The denial of security clearance by the Ministry of Home Affairs justified the rejection of the registration application, and the provisional registration did not confer any right to claim regular registration if security clearance was denied.

Hon'ble Dilip Gupta, J.

The order passed by the Under Secretary, Digital Addressable System, Ministry of Information and Broadcasting, Government of India rejecting the application dated 17 December 2012 filed by the petitioner for registration as Multi-Systems Operator (MSO) for the purpose of operation of cable television network services with digital addressable system in Agra, Allahabad, Kanpur, Lucknow, Meerut and Varanasi, has been assailed in this petition.

2. The petitioner had submitted an application dated 17 December 2012 for obtaining a certificate of registration under the provisions of the Cable Television Networks (Regulation) Act, 1995 (the Act) read with the Cable Television Networks Rules, 1994 (the Rules).

3. Rule 11-A of the Rules provides that for the purpose of operation of cable television network services with digital addressable system in a notified area, a person who desires to provide such services shall make an application for registration as MSO to the Registering Authority. Rule 11-B deals with eligibility criteria, while rule 11-C deals with registration as a MSO. Rule 11-C provides that on being satisfied that the applicant fulfils the eligibility criteria specified under rule 11-B and the requirements of rule 11-A, the Registering Authority shall, subject to the terms and conditions specified in rule 11-D and the security clearance from the Central Government, issue a certificate of registration. Rule 11-D deals with terms and conditions for registration as MSO. Rule 11-E deals with provisional registration. It provides that where an application has been made under rule 11-A and the Registering Authority considers that pending registration, it is necessary to grant provisional registration, it may, after preliminary scrutiny of such application, grant provisional registration but such provisional registration shall not confer any right to the applicant to claim regular registration. It also provides that where regular registration is refused to be granted, the provisional registration so granted shall stand cancelled.

4. The petitioner was granted a provisional registration under rule 11-E of the Rules pending registration by an order dated 21 February 2013. It was specifically mentioned in the said order that the grant of the said provisional registration will not confer any right to the petitioner to claim continuance of the said registration in case the security clearance was denied by the Ministry of Home Affairs. It was also mentioned that in the event, the security clearance is denied, the petitioner shall shut down its operations forthwith and shall have no claim whatsoever against the Government for any investment made in lieu of obtaining the said provisional registration. The Ministry of Home Affairs, however, denied the security clearance to the petitioner. The Under Secretary in the Ministry of Information and Broadcasting, accordingly, by a communication dated 23 April 2014 informed the petitioner that regular registration cannot be granted to it and that the provisional registration stands cancelled. However, in the interest of the consumers, fifteen days' time was granted to the petitioner to windup its operations.

5. When the matter was taken up by the Court on 13 May 2014, the learned Assistant Solicitor General of India was granted time to produce the relevant order of the Ministry of Home Affairs. The original records have now been placed before the Court.

6. Learned Senior Counsel appearing on behalf of the petitioner company submitted that the application for registration could have been rejected under rule 11-C(2) only if the petitioner did not satisfy the eligibility criteria for MSO as contained in rule 11-B. It is also his submission that the security clearance should not have been denied, particularly when the petitioner company had been granted a provisional registration and during this period of operation, no illegality had been committed. Learned counsel als