The Tribunal directed a cable operator to pay outstanding dues to the MSO. The Court held that the operator could not plead frustration of contract after violating a conditional agreement prohibiting migration without clearing dues.
Petitioner allowed; respondent directed to pay outstanding sum with 9% interest.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
TELECOM DISPUTES SETTLEMENT & APPELLATE TRIBUNAL NEW DELHI
DATED 27th JULY, 2011
Petition No. 270(C) of 2010
Hathway Bhaskar Multinet Pvt. Ltd. : Petitioner Vs. Jaipur Cable T.V. Network, Jaipur : Respondent
BEFORE:
HON’BLE MR. JUSTICE S.B. SINHA, CHAIRPERSON HON’BLE MR. G.D. GAIHA, MEMBER HON’BLE MR. P.K. RASTOGI, MEMBER
For Petitioner : Mr. Jayant K. Mehta, Advocate Mr. Nasir Hussain, Advocate For Respondent : Mr. Vineet Bhagat, Advocate Ms. Neha Jain, Advocate
JUDGEMENT
G.D. Gaiha
The petitioner is a company incorporated and registered under the provisions of the Companies Act, 1956 having its office in Jaipur. It is also registered as a cable television service provider under the provisions of Section 3 of the Cable Television Networks (Regulation) Act, 1995 (hereinafter referred to as Cable Television Act). The petitioner primarily act as a MSO and is engaged in the business of reception and distribution of satellite television, broadcast signals
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and other electronic signals primarily to various distributors, franchises, local cable operators and sub-link operators and also directly to individual subscribers on its own.
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| Sl. No. | Month | Amount |
|---|---|---|
| 1. | January and February, | 50 % of the monthly billing |
| 2009 | amount of Rs.82,349/- per month | |
| 2. | March 2009 to |
Rs.82,349/- per month |
| December, 2009 |
The parties hereto entered into arrangement of supply of signals of the channels of various broadcasters since 1999.
Para (1) The Second Party will pay 50% of the billing amount which is Rs.82,349/- (Rupees Eighty Two Thousand Three Hundred and Forty Nine only) for two months in the year 2009 (From January, 2009 to February, 2009).
Para(2) For the rest ten months (March, 2009 to December, 2009) Second Party will pay the full billing amount which is Rs.82,349/- (Rupees Eighty Two Thousand Three Hundred Forty Nine only) for every month.
This system will start from 1st January, 2009
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5. That the second party during this period will not migrate to any other Multi-system Operator. If Second Party does so, the First Party is liable to take the amount on behalf of Bhaskar Multinet Limited from the Second Party which was 100% exempted in favour of the Second Party for middle of the year 2008 (June, 2008). The amount of Rs.2,26,288/- is to be paid by Second Party to the First Party, if Second Party fails to abide by the agreement and the subscription amount of Rs.82,349/- per month for the period of July, 2008 to December, 2008, which comes to Rs.4,94,094/- will be paid by the Second Party to the First Party which was earlier 100% exempted. Hence, the Second Party will be responsible and answerable for the total amount of Rs.7,20,382/- to the First Party.
12. On the expiry of this agreement (which will be midnight of 31.12.2009) the maximum amount of Rs.7,20,382/- as per paragraph-5 aforesaid will be payable by Second Party will be considered to be exhausted. Neither the First Party nor the former Firm “Bhaskar Multinet Limited” will be liable for the aforesaid amount and also will not incorporate in any other written agreement. In the event if the agreement continues between the Parties, then the Paragraph-5, aforesaid, will continue.”
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mandatory provisions of clause 4 of the Interconnect Regulations and without clearing its outstanding dues of Rs.19,55,616/-.
“Default in Payments
Sometimes LCO’s switch from their affiliated MSO’s when they are either unable or unwilling to pay the outstanding dues to their affiliated MSO’s. This result in bad debts for their affiliated MSO’s leading to the latters inability to pay broadcasters for the LCO’s portion of dues….”
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outstanding from the respondent to the petitioner. This amount of Rs.7,20,382/- was conditionally waived off by the petitioner in the agreement dated 9.3.2009 in lieu of the respondent acting in accordance with the agreement and not migrating to any other MSO.
(ii) The petitioner has been raising invoices upon the respondent which have been duly received by them and had been making payments from time to time on the basis thereof. In the invoices mention of the previous outstanding by the petitioner was made and the outstanding amount mentioned therein has never been objected to by the respondent.
In fact the respondent was a consistent defaulter in payment of the monthly subscription amount to the petitioner as per the agreement and as on 30th April, 2010 there was a net outstanding of Rs.19,55,616/-.
(iii) The petitioner maintains books of accounts in the normal course of the business and the statement of accounts has been appended to with the petition for the period April, 2008 and April, 2010.
The petitioner by a letter dated 20.12.2010 called upon the respondent to clear the outstanding of Rs.17,90,918/towards the subscription charges.
The respondent has not even bothered to respond the said notice of the petitioner and has migrated to other
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competing MSO, i.e, DEN Sky Media Networks Pvt. Ltd. without even clearing the outstanding to wriggle out of its contractual obligations. The letter dated 20.2.2010 sent by the petitioner to the respondent alongwith the proof of delivery is also appended to the petition.
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and digital mode and this fact of change of MSO is very well in the knowledge of the petitioner.
(iii) The respondent has not duly cleared its dues to the petitioner and the petitioner has approached this Hon’ble Tribunal in connivance with other MSO, i.e., Den Sky Ltd. Since the respondent has filed the case against Den Sky just with the intention to prejudice the case of the respondent. Since April, 2009 the respondent has started taking signals from Den Sky Networks and therefore no payment has been made to the petitioner after March, 2009 because of the stoppage of the feed from it on account of the division of the areas. The respondent is also not taking any dual feed as it has only one cable through which it is transmitting/re-transmitting the signals to its customers. And since the respondent is satisfied with the services being given by the said MSO, i.e, Den Sky Networks Ltd, there is no question of having no relationship with the petitioner after 31st March, 2009.
(iv) The disputes amongst the three MSOs were resolved with the intervention of the SP, Jaipur and as per the settlement amongst the three MSOs; the respondent did not come under the territory of Den Sky Networks Pvt. Ltd.
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is re-transmitting the signals of Den Sky Networks Pvt. Ltd.
The petitioner filed an application for its impleadment therein. However, as the reliefs prayed for by the petitioner are absolutely distinct, the present petition has been filed.
Clause 3 of the agreement provides for some amount of concession to respondent herein. It was a conditional offer. The terms of the agreement-contract entered into by and between the
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parties are binding on them. In terms of the said agreement, migration of respondent to the network of any other multi service operator was prohibited. The waiver of subscription charges was subject to some conditions. Those conditions, thus, were required to be fulfilled before the waiver in payment of subscription fee could be claimed. Keeping in view the shift in the stand taken by respondent in the matter of obtaining feed from different MSOs, it cannot now be permitted to say that the waiver clauses contained in the said agreement shall apply.
The petitioner has also filed proof of despatch of the said invoices before us.
From July, 2008 payment of a sum of Rs.50,000/- was made in cash in June, 2008. From July, 2008 till February, 2009 no payment was made. It has given two cheques for sum of
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Rs.41,175/- each on 28.3.2009. Thereafter again no payment has been made.
It was on the aforementioned premise, a notice was issued by
the petitioner demanding the said amount on 20.2.2010.
The terms of the said agreement dated 9.3.2009 are not in dispute.
The respondent had been on his own showing running its network for the last 15-16 years. The respondent, it would bear repetition to state, has admitted the 2009 agreement whereby a portion of its dues were waived conditionally.
Invoices were raised. He had raised no plea of frustration of contract. Evidently he has been trying to shift from one MSO to the other for reasons best known to him.
He having, thus, violated the conditions of agreement cannot be permitted to resort to so called `frustration of contract’ nor can he be permitted to contend that he was forced to migrate. If it was so, it ought to have terminated the agreement upon complying with the statutory requirements, namely, service of notice under Clause 4.2 and a public notice under Clause 4.3 of the Regulations.
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petitioner shall be entitled to interest @ 9% p.a. on the sum due.
In the facts and circumstances of the case, however, there
shall be no order as to costs.
……………….J (S.B. Sinha) Chairperson
…………………. (G.D. Gaiha) Member
…………………. (P.K. Rastogi) Member
HKC/
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3 issues framed by the court
Whether the respondent could plead frustration of contract under Section 56 of the Indian Contract Act to void the waiver clauses of the 2009 agreement given its voluntary migration.
Whether the respondent's migration from the petitioner MSO to another MSO without clearing outstanding dues and complying with Interconnect Regulations was legal.
Whether the petitioner is entitled to recover outstanding subscription charges and interest based on the contractual waiver conditions not being fulfilled.
3 provisions across 3 enactments
Hathway Bhaskar Multinet Pvt. Ltd.
Jaipur Cable T.V. Network
S.B. Sinha
G.D. Gaiha
P.K. Rastogi
As recorded by the court registry
A petition before the Telecom Disputes Settlement and Appellate Tribunal in a broadcasting or cable-distribution dispute.
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