ORDER OF THE JUDGE MR. JUSTICE M.M. SUNDRESH IN W.P.NOS. 44126 & 44127 OF 2016 AND W.M.P.NOS. 37951 TO 37956 OF 2016, 5641, 6050 TO 6052, 6054 TO 6056 AND 11131 OF 2017 IN THE CASE TITLED STAR INDIA PRIVATE LIMITED & VIJAY TELEVISION PRIVATE LIMITED VS. DEPARTMENT OF INDUSTRIAL POLICY AND PROMOTION, DEPARTMENT OF TELECOMMUNICATIONS, MINISTRY OF INFORMATION AND BROADCASTING AND TELECOM REGULATORY AUTHORITY OF INDIA.

Scope of Reference in the Dissenting Judgement

Owing to the fact that the previous judgment dated 02.03.2018 in the Writ Petitions passed by the Division Bench of the Hon’ble Madras High Court was dissenting in nature, the same was referenced to the Ld. Single Judge under Clause 36 of Letters of Patent of the Madras High Court which defines and delineates the contours of the power to be exercised by the Ld. Single Judge when a reference is made as to the decision given on any point of difference. Thus, the specific role assigned to the Ld. Single Judge is to confirm either of the decisions on a point of difference.

Case History before the present Reference

Brief Background

The Writ Petitions had been filed before the High Court Of Judicature at Madras and the judgment had been reserved on 02.08.2017 and was delivered on 02.03.2018 by the Division Bench comprising of Hon’ble Ms. Indira Banerjee, Chief Justice and the Hon’ble Mr. Justice M. Sundar in W.P. Nos.44126 and 44127 of 2016 and W.M.P.Nos.37951 to 37956 of 2016, 5641, 6050 to 6052, 6054 to 6056 and 11131 of 2017.

The Petitioners STAR India Private Limited and Vijay Television Private Limited had filed the two Writ Petitions on 23.12.2016 challenging the two consultation Papers issued by the Telecom Regulatory Authority of India namely – titled ‘Consultation on the Draft Telecommunication (Broadcasting and Cable Services) (Eighth) (Addressable Systems) Tariff Order, 2016’ dated 10.10.2016 and titled ‘Consultation Paper on Draft Telecommunication (Broadcasting and Cable Services) Interconnection (Addressable Systems) Regulations, 2016’ dated 14.10.2016.

That pending the Writ Petitions, consultation papers were notified on 03.03.2017 by TRAI as the ‘Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) Regulations, 2017’ and ‘Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff Order, 2017’ and hence the prayers filed by the Petitioners were accordingly amended by the Petitioners.

Challenge To The Impugned Regulations & Tariff Order

The Writ Petitions challenged the vires of the abovementioned Regulations and the Tariff Order to the extent they have the effect of regulating, determining or otherwise impacting content creation, generation, exploitation, licensing and terms and conditions for exploitation of content and broadcast reproduction rights and in particular:

1. Clauses 2(h), 2(j), 2(mm), 2(pp), 3 and 7 of the Telecommunication (Broadcasting and Cable) Services Interconnection (Addressable Systems) Regulations, 2017;
2. Clauses 2(f), 2(h), 2(zg), 2(zh) and 3 of the Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff Order, 2017.

The Petitioners challenged the vires of seven clauses in said Regulations and eleven clauses in the Tariff Order (18 clauses in all) that have been enumerated in the form of two separate tabular columns / tables alongwith the ground for setting them aside:

DISSENTING ORDER PASSED BY THE HON’BLE DIVISION BENCH

The Hon’ble Judges of the Division Bench held the following-

Concluding Remarks on the Pre-reference Judgement

Since the Judges have not been able to agree, it was stated by the Hon’ble Chief Justice that the Writ Petitions may be placed before a third Judge. Since the Chief Justice has delivered the dissenting judgment, the matter may be placed before the next available Judge in order of seniority for nomination of the Judge before whom the matter may be placed.

Contemplation on Issues in the Present Reference

In order to arrive at the limited issues which would be dealt with in the present Reference Judgment, the Hon’ble Single Judge deliberated the following-

• The Petitioners case is that the Regulatory Authority (i.e. TRAI), through the impugned Regulations and Tariff Order, regulates the “content” but has no such power under the TRAI Act (also referred to in this note as the “Act”), which jurisdiction is occupied by the Copyright Act.
• The Respondents contended that the decision of the Ld. Chief Justice qua Regulation 7(4) which places a fetter on discount offer to distributor is required to be dealt by this Court – however the same can’t be done due to limited powers vested upon the Reference Court.
• The conclusion arrived in the lead judgment was to strike down certain clauses in the Tariff Order (as mentioned in the chart given herein-below) but certain others such as Clause 11(2) and 4(2) in the Tariff Order can be operated if it can be operated for other provisions of the Regulations and Tariff Order, other than those that have been struck down.
• In her differing Judgment, the Hon’ble Chief Justice has concurred with sub paragraphs 1 to 4 of the lead judgment – and hence these issues have attained finality.
• While deliberating on powers of TRAI, the Hon’ble Reference Judge has referred to the proviso to Section 2(1)(k) of the TRAI Act, which inter alia led to the notification of 44(E) and 45(E) after being challenged by one of the Petitioners.
• Another challenge to Section 11(2) of the TRAI Act was dismissed by the Division Bench of the Delhi High Court holding that there was no merit in the aforesaid SLP.
• The Hon’ble Reference Judge stated that the Petitioners were asked by the impugned Regulations and Tariff Order to package and sell their pay channels, free to air channels, high and standard definition channels in a specified manner keeping in mind the overall interest of all inclusive of the general public.
• The impugned Regulations and Tariff Order make it mandatory for Broadcasters to make their offers in a particular manner.
• It can be said that the actual content of programme in a channel has never been touched.
• These Regulations and Tariff Order are put into challenge by the Petitioners inter alia contending that they deal with “content” for which there is no power available under the TRAI Act, which only deals with “carriage”.
• The other contention is that the field is occupied by the Copyright Act, 1957, by which, the broadcasters reproduction right has been recognised and protected.

Issues in the Present Reference

Thus the Two principal issues crop up for determination in the present reference:-

1. WHETHER the impugned Regulations and the Tariff Order can exist and operate through the powers conferred to and under the TRAI Act, 1997;
2. WHETHER the impugned Regulations and the Tariff Order would impinge upon the provisions of Copyright Act, 1957.

One ancillary issue was also taken up for determination:-

1. WHETHER the impugned Regulations and Tariff order impinge upon the Broadcast Reproduction Rights of the Petitioners?

Principles of Law Involved

The Hon’ble Single Judge then has gone to only consider the following issues and principles of law in order to pass a decision in the present reference which includes but not limited to the following-

1. Interpretation of Statutes,
2. Conflict of Enactments,
3. Presumption of Legislation,
4. Reading down of provisions,
5. Damages while presuming facts on legal fiction, and
6. Competence of Regulator to pass subordinate legislation

Important Deliberations made in the Judgement

• The Hon’ble Reference Judge has gone into the inception of the issue wherein the TRAI Act was created as a result of a judgment of the Apex Court in re Secretary, Ministry of Information and Broadcasting, Govt. Of India and Ors. V. Cricket Association of Bengal and Ors. (1995)2SCC161 wherein a pressing need to create a comprehensive enactment regulating the airwaves or frequencies being public properties was felt and emphasized, so also the overwhelming public interest to create a level playing field, avoid monopoly, regulate the services providers and the usage frequencies, airwaves, content of programmes, and to sustain promote and improve quality. Accordingly a direction was given to the Government of India to formulate a comprehensive enactment, after noting the inadequacies inherent in the Indian Telegraph Act, 1885 which eventually led to the creation of TRAI.
• In the said created TRAI Act the Hon’ble Reference Judge pointed out that the preamble itself is clear that the intention was to make provisions regulating the services to meet the customers demand at a reasonable price.
• The paramount interest is that of the consumer who should be given the choice to select the channel on a level playing ground. Two amendments were made in the year 2000 and 2004 as the Act was understood as a social, welfare one a liberal approach should be adopted in tune with the objects meant to be achieved.
• Suffice to state that the Hon’ble Reference Judge believes that the TRAI Act is meant to regulate a large number of activities and that no such regulation such as the impugned one and tariff order can ever be made under any other enactment including The Copyright Act, 1957.
• Hon’ble Reference Judge has further deliberated on provision i.e. Section 11 of the Act which has four different parts, speaking on functions of the Authority. The two fundamental functions outlined in Section 11 are recommendatory and regulatory.
• Hon’ble Reference Judge has stated that Section 11(b) speaks about compliance of terms and conditions of license and thus would also take in its ambit Section 4 of The Indian Telegraph Act. This provision also deals with laying down standard of quality of service.
• Since the underlying interest is that of a consumer, Section 11(b) has to be read as a whole and if that is done then there is no difficulty in bringing the availability and existence of power in favour of TRAI to regulate.
• The words “quality of service ” and ”public interest” are to given an extensive and expansive meaning and even sub clause (d) of Section 11 provides sufficient power to perform such other functions that may be necessary to carry out the provisions of the Act.
• Therefore Section 11(d) is directly relatable to the provisions of the Act and Section 11(b) being distinct and independent need not be related to the powers of Section 11(d).
• Since the functions might be varied that is the reason why the word include has been mentioned while referring to administrative and financial functions being part of the scheme of the TRAI Act. Sub clause 11(2) thus provides sufficient ammunition for the Authority to specify rates for telecommunications services and the word television channel has never been mentioned under the Act as against broadcasting service.
• Thus the challenge made to this provision was dismissed by the division bench of the Delhi High Court while rejecting the case of the Petitioner to a challenge made to the aforesaid Section 2(k).
• Section 12 of the Act bestows upon the Authority a power to call for information, conduct investigation, issue directions to service provider to ensure proper functioning thus giving the extent of power that can be wielded by the Authority over service providers.
• Section 13 of the Act touches upon the power of the Authority to issue directions in discharge of the function U/S 11(1) of the Act thereby bestowing a larger role upon the Authority being its function U/S 11(1).
• Section 36 of The TRAI Act is the source provider who make the regulations which are consistent with the Act and Rules thereby granting TRAI legislative power thus TRAI Act empowers TRAI to make regulations to carry on the objects of enactment enshrined u/s 11,12 and 13 giving it wide powers and primacy.
• The present impugned Regulations and Tariff order have come into being by exercise of powers by the Authority in the sections detailed above as well as in context of the notification issued by the Central Government in S.O. 44 (E) and 45(E) dated 09.01.2004. Hence it is suffice to state that the Petitioners are bound by the Act, notification and the regulations and tariff order issued under the powers deliberated in detail herein above.
• In the matter of Avishek Goenka vs. Union Of India and Another ((2012) 5 SCC 275 the availability and existence of power under sections 11 and 36 of the TRAI Act are clearly established.
• The impugned Regulations and Tariff order are passed as a sequel to earlier ones from the time the regulatory regime started functioning from the year 2004. Such power can be generously traced to the above stated notification and provisions thus giving sufficient ammunition to sustain the impugned Regulations and Tariff order.
• The aforesaid definition of the word “programme ” and “programme service’’ have to be understood as being a member of broadcasting service family. The impugned Regulations are concerned with television broadcasting and hence it shows that it does not take into account other forms of broadcasting.
• A broadcast would mean a communication which would include re-broadcast as mentioned in the scheme of the Copyright Act. When such a work is communicated to the public as defined U/S 2 (ff) through the means mentioned in 2 (dd) it becomes a broadcast. Therefore, a broadcast would actually happen when it is communicated to the public and such an activity being done by an organisation makes it a broadcaster organisation.
• When the broadcasting of a programme takes place containing works as defined above, it creates a broadcasting reproduction right in favour of the creator/broadcaster.
• Hon’ble Reference Judge observed that the Copyright Act which defines the abovesaid rights of a broadcaster does not contemplate the process of transmission between a broadcaster and a distributor prior to broadcast as defined under the Act.
• The Copyright Act only deals with individuals such as copyright holder and the licensee with a limited right to a third party therefore, it does not deal with a larger public interest, especially when the air waves and frequencies are owned by the government which is duty bound to protect the overwhelming public interest of subscriber.
• Thus provisions under Copyright Act deal with broadcast right only to the limited extent of the Broadcast Reproduction Right.
• Hon’ble Reference Judge observed that there is absolutely no copyright or a broadcast reproduction right given independently to a television channel. Such a right is relatable and attributable to a particular broadcast alone. Thus, copyright does not recognise any specific right of television channel but it may become a broadcasting organisation, which can be restricted to a broadcaster made hence, it is programmed, work and thus broadcast centric.
• Hon’ble Reference Judge has observed that there is no difficulty in holding that the Copyright Act of 1957 and the TRAI Act of 1997 stand apart in their respective arena, their fields being distinct and separate. He has elucidated further by stating that under Copyright Act no third party is involved and there is no element of regulation. Whereas he noted that TRAI Act is a sector Specific act and there is an overwhelming public interest involved in the TRAI Act unlike the Copyright Act.
• Thus the Petitioners contention on the restricted scope of the Telegraph Act does not hold water in the teeth of the specific provisions contained in Section 6(a) which provides sufficient authority to fix rates, messages and other conditions in light of the Hon’ble Supreme Court judgment namely Star India Pvt. Ltd. Vs. TRAI and Ors (2008) 146 DLT 455. Both TRAI Act and Telegraph Act are to be read together and even dehors.
• Hon’ble Reference Judge has observed that The Cable Television Network Act, 1995 (“CTNA”) was also introduced using the powers conferred by the constitution along with the field of legislation as in case of the TRAI Act 1997 but with a specific object to control and regulate Cable Television network.
• Section 4(a) of the CTNA was amended duly by the government W.E.F. 25.10.2011 taking note of technological development and thus allowing for the transmission of programmes through Digital Addressable Systems. The CTNA further defines encrypted, unencrypted channels, free to air and pay channels and also seeks to regulate the programming and advertising code and thus it shall be read with the provisions of the TRAI Act as it helps TRAI in discharging of its regulatory functions in the field of broadcasting.
• Hon’ble Reference Judge has observed that on the detailed analysis of the provisions contained in enactments other than the TRAI ACT 1997, one cannot hold that there exists any conflict / overlapping either incidental or direct and the field being occupied as against the TRAI Act which has got a specific role to play. Thus, such other enactments can at best be stated to sail alongwith the TRAI Act.

Gist of Petitioner’s Submissions

• Impugned Regulations and Tariff order impact content and therefore they are ultra vires the TRAI Act.
• Section 11(1)(b),(c) and (e) do not confer any power upon TRAI to pass the impugned Regulations.
• The regulation of content, its price and packaging is governed by the Copyright Act and Section 2 (dd) read with Section 2 (ff) would only mean uplinking and downlinking and thus would fall under the scope of The Cable Television Network Act and thus TRAI by notifying the impugned Regulation and Tariff order has wrongly understood the scope and power granted to it under the TRAI Act.

Gist of Respondent’s Submissions

• TRAI has sufficient power under Sections 11, 12 and 13 read with Section 36 of the TRAI Act and such powers are wide and exhaustive.
• The enactments mentioned by the Petitioners are to be seen as assisting the TRAI Act and the scope of the Copyright Act is altogether to be excluded in the present case as it deals with a completely different subject matter.
• The decision rendered in Petroleum and Natural Gas Regulatory Board Vs. Indraprastha Gas Limited and Ors ((2015) 9 SCC, 209) has to be seen contextually. Similarly the decision relied upon by the Petitioners in ESPN Star Sports V. Global Broadcast News Ltd., (2008)(38) PTC 477 (DEL.) (DB) cannot be understood to hold that Section 37 of the Copyright Act protects a television channel. Accordingly while rejecting the lead judgment, dissenting one has to be concurred with.

FINDINGS AND RESULT OF THE REFERENCE JUDGE

Discussion on Submissions

• Hon’ble Reference Judge has observed that the jurisdiction of the enactments has been dealt with extensively, and it is clear that the TRAI Act involves the regulation of air waves and frequencies being public properties, touches upon various stakeholders with primacy to public interest.
• Hon’ble Reference Judge has observed that the general public is the king, being the subscriber whose interest should be guarded and protected under the Act as a prime factor and thus TRAI is obligated to take adequate measures as mandated by the statute
• The CTNA and The Indian Telegraph Act go with the TRAI Act strengthening the hands of the Authority. The enactment deals with the last part of the broadcast and thus it comes with the object to protect the interest of the copyright holder, to a limited extent a broadcasting reproduction right holder and a third party with a specific reference to the tariff scheme.
• That is the reason why the Authority is the same along with the definition of Digital Addressable System and introduction of transmission of programmes through Digital Addressable System etc.
• The TRAI Act does not deal with a mere means of transmission alone and hence the principle governing noscitur a sociis cannot be applied as the Petitioners have suggested.
• If contentions of the Petitioners are accepted, the very provision contained under section 11 (2) would become redundant and otiose.
• Notably tariff orders of a similar nature as well as regulations made u/s 36 of the TRAI Act have been introduced from time to time. The notification no. 39 dated 09.01.2004 has also not been challenged by the Petitioners while challenging the proviso to section 2(1)(k) which has provided additional powers to TRAI.
• To sum up the TRAI Act being a centripetal, sector specific one, involving the utilisation of public property, having a regulatory regime and to protect the public interest stands on its distinct footing.
• Thus, as a natural sequitor, the Regulations and Tariff order would ipso facto apply to the Petitioners case.
• Hon’ble Reference Judge has further observed that the submission made by the counsel for the Petitioners that a broadcast takes place in a moment of uplinking and downlinking is contrary to the Copyright Act as any such interpretation would directly violate the provisions including definitions sections contained under Section 2 (dd) and 2 (ff) of the Act.
• Hon’ble Reference Judge has observed that Sections 37 and 39 of the Copyright Act also do not help the case of the Petitioners because there is no broadcast reproduction right involved under the TRAI Act and no right has been given to a television channel under Section 37 of the Copyright Act.
• While the Copyright itself does not make any reference to a television channel it has been referred accordingly as such only after obtaining permission for downlinking under the impugned Regulations.
• Therefore a television channel has been understood in a very restrictive manner under the impugned Regulations.
• The issue as to whether the impugned Regulations and Tariff order deal with content or carriage is an irrelevant argument made by the Petitioners.
• A content has to be seen in the programme and not in the channel and merely identifying or categorising a channel either in a group or stand alone would not amount to interference in content. What is involved here is the reach of the particular channel in a specific way or mode giving several options to choose qua a subscriber. A content in a programme is different from that of a channel.
• Thus the Hon’ble Reference Judge has observed that there is sufficient and ample power to pass the impugned Regulations and Tariff order under the TRAI Act.
• Hon’ble Reference Judge has observed that a party who approbates and reprobates should not be shown any indulgence in court and the law governing the issue of “estoppel” would also come into play. It applies to the Petitioners who state that they are a service provider under the TRAI Act.
• Hon’ble Reference Judge citing ESPN Star Sports Vs. Global Broadcast News Ltd., (2008) (38) PTC 477 (DEL.) as relied upon the Petitioners has stated that the judgment does not recognise a separate right of television channel under Section 37 of the Copyright Act. Such a right is only confined to the broadcast made and thus there is no express recognition of a right qua a television channel as against the broadcaster.
• There is further no need to go into the issue as to whether the impugned Regulations and Tariff Order touch upon the content or carriage as contended by the Petitioners, it being merely their perspective and based on an incorrect premise as TRAI itself is in existence to protect the freedom and right of consumers.
• A power conferred under the TRAI Act cannot be imported into any other act. If the submissions of the Petitioners is accepted the effect of such a decision would in a way obliterate the very power to regulate thus Hon’ble Reference Judge has been unable to agree with his Ld. Brother Judge who pronounced the lead judgment.

Final Findings in Reference Judgment on the Issues

The Hon’ble Reference Judge thereafter dealt with specific issues which were issues of dissent in the judgment dated 02.03.2018 and has observed the following-