1. Permission to operate as Multi System Operator under Cable Television Network Rules cancelled due to denial of mandatory security clearance by the Central Government. (Para 4 , 5 , 14 )
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2019 Supreme(SC) 15
SUPREME COURT OF INDIA
ABHAY MANOHAR SAPRE, INDU MALHOTRA, JJ.
Digi Cable Network (India) Pvt. Ltd. – Appellant
Versus
Union of India & Ors. – Respondents
Civil Appeal No. 120 of 2019 (Arising out of S.L.P.(C) No. 33244 of 2015)
With
SCOD 18 Networking Pvt. Ltd. – Appellant
Versus
Ministry of Information & Broadcasting & Ors. – Respondents
Civil Appeal No. 121 of 2019 (Arising out of S.L.P. (C) No. 33411 of 2015)
Decided On : 07-01-2019
Important Points
IMPORTANT POINT
Permission for operating as Multi System Operator (MSO) in the Digital Addressable System (DAS) notified areas is subject to security clearance by Home Ministry.
Permission for operating as Multi System Operator (MSO) in the Digital Addressable System (DAS) notified areas is subject to security clearance by Home Ministry.
Subject
Administrative Law - Licensing and Permits
Act Referred
CABLE TELEVISION NETWORK RULES: R.11(c)
Headnote
Cable Television Network (Amendment) Rules, 2012 – Rule 11C – Permission to operate as MSO subject to security clearance by Home Ministry – Instantly appellant failed to obtain security clearance – Permission rightly cancelled – Also held, appellant was not entitled to claim any prior notice before passing of the cancellation order in question. (Para 14, 17)
(2014) 5 SCC 409 – Relied upon
Facts of the case:
The appellant was granted permission by the Government of India for operating as Multi System Operator (MSO) in the Digital Addressable System (DAS) notified areas.
This permission was, however, cancelled by the Government of India on the ground that the Ministry of Home Affairs has denied issuance of “security clearance” to the appellant.
The High Court dismissed the writ petition and upheld the order of cancellation as being just, legal and proper.
Finding of the Court:
Cancellation of permission was just and proper.
Result: Appeals dismissed.
Legal Category Hierarchy
Table of Contents
2. Whether cancellation of permission without providing an opportunity of hearing violates the principles of natural justice and fair play. (Para 15 )
3. Grant of permission is subject to mandatory security clearance; in national security matters, the executive's policy judgment prevails over strict procedural requirements. (Para 11 , 12 , 13 , 14 , 16 , 17 )
4. Principles of natural justice, including prior notice, may be excluded in matters of national security, which are matters of executive policy rather than law. (Para 16 , 17 , 18 )
5. Appeal dismissed; appellant granted liberty to apply for fresh permission in accordance with law. (Para 19 , 20 )
6. Is security clearance a mandatory requirement for registration as a Multi System Operator?
Yes, under Rule 11C(1) of the Cable Television Network (Amendment) Rules, 2012, the registering authority shall issue a certificate of registration only after being satisfied with eligibility criteria and obtaining security clearance from the Central Government. (Para 12 , 13 , 14 )
7. Can the principles of natural justice be bypassed in matters involving national security?
Yes. In situations of national security, a party cannot insist on strict observance of the principles of natural justice. Such decisions are matters of executive judgment and policy rather than questions of law. (Para 16 , 17 , 18 )
8. What is the court's power of review when the State invokes national security to deny clearance?
The court may satisfy itself that there were justifiable facts by calling for and reviewing the relevant files, but it shall not disclose the reasons to the affected party once the State maintains that national security is involved. (Para 16 , 17 )
JUDGMENT :
Abhay Manohar Sapre, J.
IN CIVIL APPEAL No.120 OF 2019 (Arising out of S.L.P.(C) No. 33244 of 2015)
1. Leave granted.
2. This appeal is directed against the final judgment and order dated 30.10.2015 of the High Court of Judicature at Bombay in Writ Petition No.58 of 2015 whereby the Division Bench of the High Court dismissed the writ petition filed by the appellant herein.
3. The controversy involved in this appeal lies in a narrow compass as would be clear from the facts stated hereinbelow.
4. By letter dated 12.06.2012 (Annexure P2) the appellant was granted permission by the Government of India under Rule 11C of the Cable Television Network (Amendment) Rules, 2012 (hereinafter referred to as “the Rules”) for operating as Multi System Operator (MSO) in the Digital Addressable System (DAS) notified areas vide notification dated 11.11.2011.
5. This permission was, however, cancelled by the Government of India vide order dated 03.09.2014 on the ground that the Ministry of Home Affairs has denied issuance of “security clearance” to the appellant. In other words, since the Ministry of Home Affairs did not grant security clearance to the appellant, the permission initially granted to the appellant vide letter dated 12.06.2012 was cancelled.
6. Challenging the order of cancellation of grant of permission, the appellant filed writ petition before the High Court of Bombay at Mumbai. By impugned order, the High Court dismissed the writ petition and upheld the order of cancellation as being just, legal and proper which has given rise to filing of the present appeal by way of special leave in this Court by the unsuccessful writ petitioner.
7. So, the short question involved in this appeal is whether the High Court was justified in dismissing the appellant's writ petition and, in consequence, was justified in upholding the order dated 03.09.2014 cancelling the permission which was granted to the appellant vide letter dated 12.06.2012.
8. Heard Mr. Jay Savla, learned counsel for the appellant and Ms. Pinky Anand, learned ASG for the respondents.
9. It may be mentioned here that Ms. Pinky Anand, learned Additional Solicitor General appearing for the Union of India respondent filed the copy of the reasons in a sealed cover which was made basis to deny security clearance to the appellant and which led to cancellation/withdrawal of permission granted to the appellant. The document filed is taken on record for perusal.
10. Having heard the learned counsel for the parties and on perusal of the record of the case, we find no merit in this appeal.
11. In our considered opinion, the impugned order of cancellation was passed in conformity with the requirements of Rule 11C of the Rules and hence it was rightly upheld by the High Court in impugned order.
12. Rule 11C was inserted in the Rules with effect from 28.04.2012. Rule 11C(1) reads as under:-
“11C. (1) Registration as multi-system operator(1) On being satisfied that the applicant fulfils the eligibility criteria specified under rule 11B and the requirements of rule 11A, the registering authority shall, subject to the terms and conditions specified in rule 11D and the security clearance from the Central Government, issue certificate of registration.”
13. It is clear from mere reading of the Rule 11C(1) that grant of permission is subject to issue of security clearance from the Central Government to the applicant (appellant in this case).
14. In this case, admittedly the appellant failed to obtain the security clearance as provided under Rule 11C of the Rules. It was a mandatory requirement as provided under Rule 11C of the Rules. Since the grant of permission was subject to obtaining of the security clearance from the concerned Ministry, the competent authority was justified in cancelling the conditional permission for want of security clearance.
15. Learned counsel for the appellant, however, argued that the appellant was not afforded any opportunity of hearing before cancelling the permission and, t
