TATA SKY LIMITED Vs. STATE OF UTTARAKHAND

JUDGEMENT

(1.) After the decision of the Union Cabinet dated 02.11.2000, whereby "Direct-to-Home" (DTH) broadcasting was permitted in India, prohibition on the reception and distribution of television signals in Ku Band was withdrawn by the Department of Telecommunications, through a notification dated 09.01.2001. In order to give effect to the decision of the Cabinet, as also, the notification issued by the Department of Telecommunications, referred to above, guidelines dated 15.03.2001 were issued laying down the procedure for obtaining licences for providing "Direct-to-Home" (DTH) broadcasting service in India on 15.03.2001. In the aforesaid guidelines, the conditions of eligibility were also prescribed.

(2.) In so far as the procedural aspect of the matter is concerned, interested parties were to be required to submit an application to the Secretary, Ministry of Information and Broadcasting. If the applicant was found eligible (for setting up a "Direct-to-Home" (DTH) platform in India) on the basis of the information furnished, the applicant was to be subjected to security clearance (in consultation with the Ministry of Health Affairs), and to clearance for satellite use (in consultation with the Department of Space). If an applicant was successful in obtaining the aforesaid clearances, the applicant was to be required to pay an initial non-refundable entry fee of Rs. 10 crores to the Ministry of Information and Broadcasting. Only upon the payment of the aforesaid non-refundable entry fee, an applicant would become eligible for further consideration. Having followed the aforesaid procedure, an applicant would be informed of the intent of the Ministry of Information and Broadcasting to issue the licence sought by it. Thereafter, an applicant had to obtain SACFA clearance from the Wireless Planning & Coordination Wing of the Ministry of Communications for SACFA clearance. Within one month of the receipt of the aforesaid clearance, the applicant/licensee had to submit a bank guarantee to the Ministry of Information and Broadcasting for an amount of Rs. 40 crores, to be valid for the duration of the period of licence. Only after making the aforesaid deposit an applicant was to be invited to sign a licence agreement with the Ministry of Information and Broadcasting. Having done so, an applicant was to be required to seek Wireless Operational Licence for establishment, maintenance and operation of "Direct-to-Home" (DTH) platform, from the Wireless Planning and Coordination Wing of the Ministry of Communications. After executing the licence agreement, a licensee would make himself liable to pay annual fee equivalent to the 10% of its gross revenue (reflected in the audited accounts of the licensee) for each financial year, within one month of the end of the year. The licensee additionally made himself liable to pay licence fee for spectrum use, at the rates prescribed by the Wireless Planning & Coordination Authority under the Department of Telecommunications. It is therefore apparent, that the desire to obtain a licence to set up a "Direct-to-Home (DTH) platform could not be easily fulfilled. Besides the technology, it required extensive financial inputs besides a cumbersome procedure of clearances.

(3.) Tata Sky Limited, the petitioner in Writ Petition (M/B) No. 4 of 2010 is a company incorporated under the Companies Act, 1956. The petitioner company has its registered office at Bombay. The petitioner company was granted a statutory licence under Section 4 of the Indian Telegraph Act, 1885 and Indian Wireless Telegraphy Act, 1933 after it successfully followed the rigours of procedure noticed in the foregoing paragraph. The aforesaid licence was valid for a period of 10 years. While obtaining the aforesaid licence, the petitioner company paid a sum of Rs. 10 crores to the Ministry of Information & Broadcasting as an initial non-refundable entry fee. The petitioner company also furnished a bank guarantee for an amount of Rs. 40 crores valid for a period of 10 years (commensurate with the duration of the licence agreement). In terms of the licence granted to the petitioner company, it has been paying an annual fee equivalent to 10% of its gross revenue (reflected in the audited accounts of the company for that particular financial year) within one month of the end of the year. The petitioner company has also been paying additional licence fee and royalty for spectrum used as prescribed by the Wireless Planning and Coordination Authority under the Department of Telecommunications.