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2014 Supreme(Online)(TDSAT) 12
TELECOM DISPUTES SETTLEMENT AND APPELLATE TRIBUNAL
MR. AFTAB ALAM, CJ, MR. KULDIP SINGH, J
Kable First India Pvt. Ltd. – Appellant
Versus
IndiaCast UTV Media Distribution Pvt. Ltd. – Respondent
Petition No. 385 (C) of 2013 | M.A. Nos. 2 & 6 of 2014
For the Appellants/Petitioners:Mr. Meet Malhotra, Sr. Advocate, Mr. Vineet Bhagat, Advocate, Mr. Ravi S. Chauhan, Advocate, Ms. Neha Jain, Advocate, Ms. Pallak, Advocate
For the Respondents:Mr. Ramji Srinivasan, Sr. Advocate, Mr. Kunal Tandon, Advocate
The minimum guarantee clause in subscription agreements cannot contravene regulatory provisions allowing freedom to negotiate terms.
Headnote:In compliance with the Telecommunication (Broadcasting and Cable Services) Interconnection Regulations, 2012, the petitioner sought modification of subscription fees due under an agreement with the respondent. The court analyzed the legal implications of the minimum guarantee clause in the existing contract impacting subscriber payments. The primary issue hinged on the legality of the terms imposed by the respondent under the agreement, with the court elaborating on the basis that the parties can mutually agree on terms without violating statutory provisions. The court noted, 'No service provider shall demand from any other service provider a minimum guaranteed amount as subscription fee'. The court concluded that the petitioner may continue to subscribe to selected channels while addressing payment obligations as outlined in the final ruling, emphasizing adherence to regulatory rates applicable during the interim period.
| Table of Content |
|---|
| 1. summary of financial obligations and contract terms. (Para 1 , 2 , 3 , 4 , 5) |
| 2. debate on the legality of the minimum guarantee clause. (Para 9) |
| 3. court’s resolution regarding subscriber channel selection during interim. (Para 10 , 11) |
ORDER
Miscellaneous Application No. 2 of 2014 has been filed by the applicant/petitioner seeking the permission of this Tribunal to switch off the signals of 27 channels of the respondent as mentioned in the notices issued by the petitioner under clauses 6.3 and 6.5 of the Regulations and directing the respondent to charge the petitioner only for the channels which the petitioner intends to transmit.
The respondent/applicant has in turn filed the Miscellaneous Application No.6 of 2014 seeking the vacation of the interim order of the Tribunal dated 13.11.2013 and allowing the respondent to disconnect the supply of signals of its channels to the petitioner. The applicant/respondent has also sought direction to the petitioner to pay a sum of Rs.1,44,57,780.01 payable up to 31.12.2013 and such further amount as may become payable till the supply of signals of the respondent’s channels to the petitioner is continued.
2. As per terms of offer (MOU) signed between the parties, the term of the same starts on 16.4.2013 and ends on 31.3.2014 and comprises of the following periods : Period 1: April 16, 2013 to June 30,2013 Period 2: July 1, 2013 to September 30.2013 Period 3: October 1, 2013 to December 31, 2013 Period 4: January 1, 2014 to March 31, 2014
The subscription fees payable by the petitioner to the respondent are as under: Period 1:
(20th April, 2013 to 30th June, 2013) –
Rs.10,00,000/- (Rupees Ten Lacs only) per month based on Rs.8/- per set top box per month for a minimum guaranteed 1,25,000 subscribers.
Period 2: (1st July, 2013 to 30th September, 2013) –
Rs.15,00,000/- (Rupees fifteen Lacs only) per month based on Rs.10/- per set top box per month for a minimum guaranteed 1,50,000 subscribers.
Period 3: (1st October, 2013 to 31st December, 2013) –
Rs.18,00,000/- (Rupees Eighteen Lacs only) per month based on Rs.9/- per set top box per month for a minimum guaranteed 2,00,000 subscribers.
Period 4: (1st January, 2014 to 31st March, 2014) –
Rs.30,00,000/- (Rupees Thirty Lacs only) per month based on Rs.12/- per set top box per month for a minimum guaranteed 2,50,000 subscribers.
In the event the average subscribers of Kable First increase more than the minimum guaranteed subscribers in a particular month in each period as specified above, Kable First shall pay an additional license fee on each additional subscriber as stated below:-
Period 1: April 20, 2013 to June 30,2013 – additional license fee at the rate of Rs. 8/- per subscriber.
Period 2: July 1, 2013 to September 30,2013 – additional license fee at the rate of Rs. 10/- per subscriber.
Period 3: October 1, 2013 to December 31,2013 – additional license fee at the rate of Rs. 9/- per subscriber.
Period 4: January 1, 2014 to March 31, 2014 – additional license fee at the rate of Rs. 12/- per subscriber.”
3. The respondent in turn is required to pay the monthly marketing fees to the petitioner which are as under:-
Period 1: (20th April, 2013 to 30th June, 2013) – Rs.8,00,000/- (Rupees Eight Lac only) per month based on Rs.6.4/- per set top box per month for a minimum guaranteed 1,25,000 subscribers.
Period 2: (1st July, 2013 to 30th September, 2013) – Rs.6,25,000/- (Rupees Six Lac Twenty five Thousand only) per month based on Rs.4.17/- per set top box per month for a minimum guaranteed 1,50,000 subscribers.
Period 3: (1st October, 2013 to 31st December, 2013) – Rs.6,00,000/- (Rupees six Lac only) per month based on Rs.3/- per set top box per month for a minimum guaranteed 2,00,000 subscribers.
Period 4: (1st January, 2014 to 31st March, 2014) – Rs.10,00,000/- (Rupees Ten Lac only) per month based on Rs. 4/- per set top box per month for a minimum guaranteed 2,50,000 subscribers.
In the event the average subscribers of Kable First increase more th
