INDUSIND MEDIA &COMMUNICATIONS LTD Vs. CITY CABLE &OTHERS

JUDGEMENT

(1.) ALTHOUGHWEAGREE with the draft judgment prepared by Shri. G.D. Gaiha, Learned Member that the petition should be dismissed albeit without any order as to costs, we may assign our own reasons therefor. Factual Background Petition No. 67 (C) of 2008, 68(C) of 2008, 69(C) of 2008 and 87 (C) of 2008 form one batch of petitions wherein petitioner had interalia prayed for an order of injunction against respondents directing them to restore its signals. On an interim prayer made by petitioner, this Tribunal by an order dated 24.04.01 directed respondent No.1 in each of these petitions to restore supply of signals. The respondents herein contend that pursuant thereto or in furtherance thereof, supply of signals were restored. The said order of injunction was prayed for inter alia on the premise that respondent No.1 in these matters for all intent and purport had taken over the network of petitioner. This Tribunal recorded a prima facie finding that respondents could not have taken recourse thereto without complying with the provisions of Clauses 4.2 and 4.3 of the Telecommunication (Broadcasting and Cable Services) Interconnection Regulations, 2004 as amended from time to time (the Regulations). The respondent No.1 in each of these petitions purported to be without prejudice to their rights and contentions, issued notices under Regulation 4.2 of the Regulations along with one Ashish Cable on 25.04.2008. They also issued a public notice as envisaged under Clause 4.3 of the Regulations without prejudice to their rights. Questioning the said notice under Clause 4.2 as also the public notice under Clause 4.3 of the Regulations, the other four petitions namely, Petition Nos. 95 (C) of 2008, 96 (C) of 2008, 97 (C) of 2008 and 98 (C) of 2008 have been filed. The relationship between the parties started in the year 1996 upon the petitioners (which is a Multi Service Operator) appointing respondent No. 1 for four areas of Bombay namely Goregaon, Chembur, Borivilli and Bhendre as its distributor. Indisputably, an agreement of distributorship was entered into on or about 30.06.1999 between the petitioner and 1st respondent. Some of the Clauses thereof would be noticed by us in brief a little later. The said agreement records that the petitioner had been carrying on business in cable TV network including supply of programme packages to various cable operators and had established and owned equipments in different locations for providing services to its customers. The respondent No.1 in these matters had been acting as a distributor of petitioner from before and were aware of the technicalities involved in the business. Having regard to the fact that they had the requisite skill and efficiency to render services as also assisting petitioner in maintenance of its equipments, a fresh distributorship agreement was entered into on the terms and conditions mentioned therein. Clause 2 of the said agreement stipulates that petitioner had equipped the areas necessary for transmitting signals to direct points as also to the points of the franchisees and moreover installed other assets necessary therefor, besides laying cables outside the headends necessary for rendering services as described in Schedule B thereto. The distributor was to act and render services as envisaged therein in the areas mentioned in Schedule A thereof. The objectives of petitioner, in terms of the said agreement were laid down in Clause 3, interalia being: (i) installation of assets, (ii) ensuring the same to be kept in working condition and properly operated and maintained to provide uninterrupted quality service to the customers (iii) To carry on business of cable TV network (iv) To provide trunk lines for delivery of TV channel bouquets and technical staff. So far as the duties and functions of respondent No.1 in each of these petitions as distributors are concerned, the same were enumerated in Clause 4 of the agreement, including: - (a) assisting and proper maintenance of the said assets b) Resolution of technical, commercial and other complaints which may be received from the customers (c) Sustain market and cater products and services supplied by IMC to existing and new customers in the area as also to maintain and increase IMCs market share (d) to see that the customer satisfaction is increased (e) To assist in maintenance of records of IMCs assets and all other material goods and items brought in at centre for supplying products and services to customers and to ensure that the same are properly maintained subject to usual wear and tear (f) Ensure safety and security of IMC (g) Maintain channel location as may be directed by IMC from time to time and ensure relay and transmission exactly in the form and manner in which it was provided (h) Nonutilization of bandwidth or cable would be authorised or permitted without prior approval of IMC and the distributors were to be responsible to ensure compliance of the same. (i) to cooperate and ensure efficient and competitive provisions of any other value added service which may from time to time be introduced by IMC (j) Advance petitioner's business in cable television (k) Protect its interest (l) Indemnify it for any loss or damages arising out of nonperformance or improper performance of the responsibility undertaken by the distributor. The petitioner contends that despite expiry of the said agreement, the terms thereof continued. It, however, discovered upon being informed by the customers on the night of 12/13th April 2008 that a scroll was seen on the screen of their TV sets you are now watching Scod18. Pursuant thereto, an enquiry was made and it was found that for all intent and purport the networks of the petitioners had been hijacked. It may be placed on record that so far as the Chembur area is concerned, the node was installed in the premises belonging to first respondent and in other cases the premises had been taken on rent. The mode and manner in which the signals were being transmitted are from satellite, going through the headend of petitioner. It had, however, various sub head ends whereat nodes were installed. After the decryption of the signals from the headend, the same used to be transmitted through a cable known as Grand Trunk Line wherefrom it used to be transmitted to the nodes and then to the franchisees and/or the customers. According to petitioner, respondents removed its nodes and inserted that of Scod18 by taking recourse to flipping of wires. he Proceedings The petitioners approached this Tribunal on the aforementioned premise and an interim order was passed on 24.04.2008 directing respondent to restore the supply which is said to have been complied with. The respondents inter alia contend: 1. They were merely money collecting agents and not service providers within the meaning of the Regulations and, thus, these petitions are not maintainable.

(2.) THIS tribunal has no jurisdiction. In the 2nd set of petitions, an interim order was prayed for but the same was refused by an order dated 19.05.2008; wheragainst the petitioner filed a writ petition before the Delhi High Court. An interim order was passed therein on or about 30th May, 2008 staying the notice of termination. The respondents preferred Letters of Patent Appeal thereagainst, wherein no interim order was passed. By an order dated 15.07.2008, the Delhi High Court directed the parties to approach this Tribunal. The interim order was extended till 23rdJuly, 2008. We are, however, informed that the said interim order never came up for hearing before this Tribunal. Having regard to the question of jurisdiction raised by respondents herein, a preliminary issue was framed which by an order dated 04.05.2010 was directed to be considered with other issues as in respect thereof oral evidences were required to be adduced. It may, however, be noticed that on a prayer made by petitioner, an Advocate Commissioner was appointed. The learned Advocate Commissioner submitted a report on 06.05.2008 interalia stating that on inspection it was found that respondent concerned had two wires, one of Scod18 and another of petitioner. The correctness of said report of learned Advocate Commissioner has not been questioned. We would refer thereto at an appropriate stage. The respondent by a letter dated 10.06.2008 informed petitioner that in compliance of the order passed by this Tribunal dated 09.05.2008 it had come to know from the cable operators that they had independently terminated the relationship with petitioner and those who were willing to receive the signals of the petitioner had been doing so. One of the respondents furthermore asked petitioner to take back its equipments. The issues were framed on 29.06.2010. On the aforementioned premise the parties have gone to trial. Evidence The petitioner in support of its case examined Sanjeev Ahuja, Head (Legal), Mr. Madhav Dattaraya Bedgiri, GM (Operations), and Shri Satheesh Kumar, a vice President of Petitioner Company. Respondent No.1, in each of these cases examined themselves. The parties hereto have also produced and proved a large number of documents. We may notice some of them. A Memorandum of Understanding was executed on 02.12.2006. It was signed by Shri Ganesh Naidu, representing respondent No.1 of Petition No 69 (C) of 2008 and 95 (C) of 2008, who is said to have transferred/assigned the network to Shri Johnwin Manavalan, respondent No.4 in Petition No. 87(C) of 2008 and Respondent No.1 in Petition No. 98 (C) of 2008, Jeetendra Ghadigaonkar represents respondent No.1 in Petition Nos. 68 (C) of 2008 and 97(C) of 2008, Shri. Gaurang Kanakia, representing Respondent No.1 in Petition Nos. 87 (C) of 2008. However, Shri Mehboob Gani, respondent No. 1 in Petition No. 67 (C) of 2008 and 96 (C) of 2008 did not sign this agreement. The petitioners have also brought on record a hareholders Agreement of Scod 18 Network Pvt. Ltd. in which some of the respondents are parties including Shri. Gaurang Kanakia representing M/s Satekrishmani Network, Shri. Jeetendra Ghadigaonkar representing M/s In Cable, Shri. Aashish Shirke representing M/s Ashish Cablenet India Pvt Ltd, Shri. Bhupesh Gupta representing M/s S.S.V Cable Pvt. Ltd and Shri. Mehboob Gani on behalf of M/s City Cable Ltd. It has also brought on record the Memorandum of Association of Scod 18 Network Pvt. Ltd, wherein Mr. Johnwin Manavalan and Ganesh Naidu have signed and a document showing acquisition of Scod 18 Networking Pvt Ltd by You Telecom India Pvt. Ltd. Respondents No. 1 in each of these cases along with Ashish Cable, however, issued common notices under Clauses 4.2 and 4.3 of the Regulations. Questions The principal questions which arise for consideration of this Tribunal (although a large number of issues have been framed) are: -(a) Whether the respondent No.1 in each of these cases are service providers within the meaning of the provisions of the Regulations? (b) Whether this Tribunal has any jurisdiction to entertain these petitions? (c) Whether there existed a binding contract between the parties when the cause of action for filing these petitions arose? (d) Whether the petitioner has proved its case for grant of decrees for damages? Submissions Submission of Mr. Kailash Vasudev, learned senior counsel appearing on behalf of the petitioner, shortly stated, are: -1. Respondents herein hatched a conspiracy to hijack petitioners network by not only floating companies in the name of Respondent Nos. 2 and 3 but also by entering into a transaction with You Telecom which was a Mauritius based company as would be evident from preliminary nonbinding term sheet and in that view of the matter, this petition should be allowed. 2. By reason of the aforementioned unlawful acts on the part of respondents, petitioner has suffered damages to the tune of Rs. 225 Crores in respect whereof decrees may be passed by this Tribunal.

(3.) PARTIES despite expiry of the distributorship agreements continued their relationship on the same terms and conditions till the same were determined by respondents in terms of the Clause 4.2 and the public notice issued under Clause 4.3 of the Regulations.