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The Arbitration And Conciliation Act, 1996
Haryana Telecom Ltd. vs Sterlite Industries (India) Ltd. on 13 July, 1999
I.T.C. Limited vs George Joseph Fernandes & Anr on 6 February, 1989
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Andhra High Court
Incable Net Services, Hyderabad. vs Start India, Pvt. Ltd., on 19 February, 2002

HON'BLE SRI JUSTICE RAMESH MADHAV BAPAT HON'BLE SRI JUSTICE DALAVA SUBRAHMANYAM CIVIL REVISION PETITION No.364 OF 2002 AND CIVIL MISC.APPEAL NO.152 OF 2002

19-02-2002

Incable net Services, Hyderabad.

Start India, Pvt. Ltd.,

Counsel for the Petitioner: Mr. T.Rajender Prasad.

Counsel for the Respondent: Mr. C.Sudesh Anand

:COMMON JUDGMENT (PER-RMBJ):

Both the proceedings arise out of the order passed in I.A.No.4428 of 2001 in O.S.No.580 of 2001 pending on the file of the Chief Judge, City Civil Court, Hyderabad. The Civil Revision Petition arises out of the order dated 3-1-2002 passed in I.A.No.4428 of 2001 in O.S.No.580 of 2001 and the Civil Misc. Appeal arises out of the order dated 3-1-2002 passed in I.A.No.4370 of 2001. We are dealing with the C.R.P. first which will decide the fate of C.M.A.

It appears from the record that the plaintiff M/s. Incable Net Services, Hyderabad, filed O.S.No.580 of 2001 in the Court of the Chief Judge, City Civil Court, Hyderabad against the defendant Star India Private Ltd., Hyderabad, for mandatory injunction directing the defendant to supply the signals of Star Net Work without payment of any subscription, which is alleged to be the fundamental right of the plaintiff.

It is further stated in the plaint that in the year 1997 franchise agreement was entered into between the plaintiff and the defendant for receiving the transmissions of Star Movies, Star Plus, Star World, Star Net Work, National Geographic Channel and Star Gold etc., hereinafter referred to as "Star Network" on payment of monthly subscription of Rs.36,000/- initially and thereafter without there being any concurrence nor willingness from the plaintiff, the defendant gradually unilaterally went on increasing from time to time monthly subscription from Rs.36,000/- to Rs.48,000/- and lastly Rs.2,85,000/-, which was not accepted by the plaintiff at any point of time and raised objections from time to time. For this abnormal unilateral increase, the defendant never obtained the concurrence or acceptance of the plaintiff. The defendant used to obtain the signatures of the plaintiff on the blank agreement forms. Except the signature of the plaintiff, other things might have been filled up and doctored to suit their convenience, which was never agreed by the plaintiff. The plaintiff has filed the copies of the agreements along with the suit to show such agreements were obtained by the defendant.

It is the further case of the plaintiff that he objected from time to time but no cognisance was taken. It is further stated that the plaintiff received a subscription renewal letter dated 19-2-2001 acknowledging and informing the renewal of franchisee of the plaintiff and in this renewal letter, there is no arbitration or restrictive clauses as they are not accepted by the plaintiff. But assuming that there is an arbitration clause, the defendant filed caveat before the High Court as pre-emptive attempt to disconnect the supply of the signals and in order to cause wrongful loss to the plaintiff and wrongful gain for themselves.The plaintiff never agreed for arbitration clause at any point of time.

It is further stated that the plaintiff raised objections from time to time but no cognisance was taken and went on increasing the subscription and went on obtaining the signatures on the blank agreement forms from the plaintiff.

It is further pleaded by the plaintiff that relying upon the pronouncement made by the Apex Court in different Judgments, for example in A.I.R. 1995 S.C. 1236, it is stated that it is the right of the plaintiff to receive the airwaves without payment as a fundamental right. The cause of action to the plaintiff arose when the plaintiff did not pay the amount as demanded by the defendant, finally the defendant disconnected the Star connection on 10-12-2001. Therefore, the suit was filed by the plaintiff with a prayer to grant mandatory injunction directing the defendant to supply the signals of Star Network without payment of any subscription. It was further prayed to declare the action of the defendant in claiming subscription in the name of 'Pay channels' for supply of signals of their channels through air-waves as illegal, arbitrary and violative of the right of viewers and listeners and also violative of rights guaranteed under the Constitution of India. It was further prayed to declare that the air-waves, which are being used by the defendant for transmitting their signals, as public property. He further prayed for the costs of the suit and other suitable reliefs as this Hon'ble Court deems fit and proper in the circumstances of the case.

It further appears from the record that during the pendency of the suit, the plaintiff filed I.A.No.4370 of 2001 seeking direction for ad-interim mandatory injunction.

On presentation of the suit and the interim application, notice was issued to the defendant-respondent herein.On appearance, the defendant-respondent herein filed I.A.No.4428 of 2001 in O.S.No.580 of 2001 under section 8 of the Arbitration and Conciliation Act with a prayer to refer the parties to arbitration as envisaged in Clause 16 (2) (b) of Agreement dated 2-3-2001.

The defendant-respondent herein also filed a counter in I.A.No.4370 of 2001 resisting the claim of the plaintiff-petitioner herein for ad-interim mandatory injunction.

It further appears from the record that the Chief Judge, City Civil Court, Hyderabad allowed I.A.No.4428 of 2001 directing the dispute be referred to the arbitration.Aggrieved by the aforesaid order of referring the matter to the arbitration, the plaintiff-petitioner herein filed C.R.P.No.364 of 2002. The prayer for ad-interim mandatory injunction naturally was dismissed.. Aggrieved by the said order, the plaintiff-petitioner herein filed C.M.A.No.152 of 2002.

As stated earlier, a common point involved in this matter is as to whether the plaintiff has a right to receive the air-waves without making payment to the defendant?

The learned counsel Mr. T.Rajendra Prasad appearing on behalf of the revision petitioner in the C.R.P and the appellant in the C.M.A. submitted at the Bar that in various judgments of Apex Court of this Country has given the final pronouncement that to receive the air-waves is a right of viewers. The learned counsel relied upon a ruling reported in SECRETARY, MINISTRY OF INFORMATION & BROADCASTING, GOVERNMENT OF INDIA AND OTHERS v.CRICKET ASSOCIATION OF BENGAL & OTHERS1 in which their Lordships of the Supreme Court were pleased to hold as under:

" Broadcasting is a means of communication and, therefore, a medium of speech and expression. Hence, in a democratic polity, neither any private individual, institution or organisation nor any Government or Government organisation can claim exclusive right over it. Our Constitution also forbids monopoly either in the print or electronic media."

The learned counsel further relied upon a ruling reported in I.T.C. LTD., v. GEORGE JOSEPH FERNANDES & ANOTHER.2 Reliance was made on the following decisions reported in HARYANA TELECOM LTD. V. STERLITE INDUSTRIES (INDIA) LTD;3 OSPREY UNDERWRITING AGENCIES LTD., & OTHERS v.OIL & NATURAL GAS CORPORATION LTD., & OTHERS ETC., 4 The learned counsel relied upon as many as 25 rulings, copies of which are compiled in a separate paper book and was given to us.

By reading the judgments of Apex Court as well as different High Courts, the point arises for our consideration whether those rulings cited above are applicable to the present set of facts?

The learned counsel Mr.C.V.Nagarjuna Reddy appearing on behalf of the defendant- respondent herein submitted at the Bar that the order passed by the Chief Judge, City Civil Court, Hyderabad is perfectly inconsonance of the legal provisions. The learned counsel pointed out the agreement, which was entered into between the parties and renewed every year. Relevant clause of the agreement is 16 (2) (b), which reads as under:

" If any disputes or differences arises between the parties hereto as to the effect, interpretation or application of this agreement or to their rights, duties or liabilities arising out of, consequent to, or in connection with this Agreement (herein after referred to as "the Difference") the parties shall endeavour to resolve the same amicably through negotiations. In the event that the difference is not resolved by shall mean of negotiations such difference shall then be referred to and is entitled by arbitration by three arbitrators, one to be appointed by each party and the third to be appointed by the two arbitrators. The arbitration proceedings shall be in accordance with the provisions of the Arbitration and Conciliation Act, 1996, or any subsequent enactment or amendment thereof. Any application for interim order (s) or for reference of disputes to Arbitration shall be made to courts in Mumbai alone to the exclusion of all other Courts in India. The decision of the arbitration shall be final and binding upon the parties. The venue of arbitration proceedings shall be in Mumbai."

With this clause, the learned counsel for the defendant-respondent herein submitted that whatever the points raised by the learned counsel for the plaintiff-petitioner herein could be settled by the Arbitrator.

It was also brought to our notice by the learned counsel for the defendant-respondent herein that on receipt of the notice of the suit as well as the notice of the application for ad-interim mandatory injunction, the defendant appeared and filed I.A.No.4428 of 2001 for referring the matter to the Arbitration and by way of precaution the defendant-respondent herein also filed counter in I.A.No.4370 of 2001 wherein the prayer was made by the plaintiff for granting ad-interim mandatory injunction directing the defendant to restore Star connection.The learned counsel further submitted that admittedly the plaintiff and the defendant entered into an agreement by which the plaintiff agreed to pay initially a sum of Rs.36,000/- per month and from time to time the monthly subscription was increased and at present the monthly subscription is Rs.2,85,000/- for which the plaintiff agreed except on the last occasion.

The learned counsel further submitted at the Bar that the rulings cited by the learned counsel for the plaintiff-petitioner herein have no application in the present set of facts. The learned counsel further submitted that while delivering the judgment, the Apex Court held that no Governmental body or Government can have a monopoly to transmit the signals through air-waves as it is a public property. But in the present case, it was submitted by the learned counsel for the defendant-respondent herein that the defendant-respondent herein has to pay the hire charges of Satellite and also to pay money to the Producers for different programmes, which are signalled through the satellite. When the defendant is required to pay certain amount to the Satellite owners as well as the Producers of different programmes, they cannot sell/allow to broadcast the programmes to the plaintiff-petitioner herein without paying the charges. After all, both the parties are commercial organizations and since the commercial organizations are meant for running the institutions for profits, they cannot show charity to the institutions like the plaintiff.

We are in agreement with the submissions made by the learned counsel for the defendant-respondent herein. It is true that the signals sent by the defendant-respondent herein is through air.Their Lordships of the Apex Court were pleased to hold that the monopoly cannot be created even by the Government for broadcasting signals through the air as air is a public property. But, in the rulings cited above, we are not able to get any clue that their Lordships of the Apex Court made even to prevent the organisation like the defendant to collect the charges for the programmes broadcasted by them on payment to the producers and also they are required to pay the amount to the Satellite owners.

Considering the above facts, we are of the considered view that the claim of the plaintiff-petitioner herein that they are entitled to receive the signals through air free of charges cannot be accepted.

We are trying to make distinction in the rulings cited above and the present set of facts, the defendant-respondent herein is not charging for receiving the signals through air. These are not air fare charges but these are the charges which they are required to pay to the producers for different programmes as well as the satellite owners. Therefore, we are of the considered view that the claim of the plaintiff-petitioner herein based in the suit is imaginary and illusive.

While the arguments were going on, we made queries with the counsel for the plaintiff-petitioner herein as to how the Incable Net Services are collecting the charges from different customers/viewers. The answer given to this query was not satisfactory. The learned counsel for the plaintiff- petitioner herein submitted that these charges are collected for the maintenance of cables etc. But we are not satisfied with the answer. Apart from the maintenance charges, they are also making profits. They did not give the connection of cable without any profit. Therefore, it will not be correct to say for the plaintiff-petitioner herein that the defendant-respondent herein cannot charge them for the programmes etc.

The main principle that nothing is free in the world for everything some consideration must follow. If this principle is accepted, then the plaintiff- petitioner herein will have no case.

There is also no regulation by the Government restraining the Cable Operators to charge particular amount in different Cities and different areas. Therefore, they are charging in any manner they like. Therefore, we propose to the Government to formulate certain regulations as far as the charges collected by the Cable Operators are concerned.

Now we have already stated that the learned Judge allowed I.A.No.4428 of 2001 referring the dispute to the arbitration. The said order stands confirmed and without prejudice to the observations made by us in the foregoing paragraphs of the judgment, the Arbitrator may decide the dispute between the plaintiff and the defendant independently.

Thus, C.R.P., filed by the plaintiff-petitioner herein stands dismissed. No costs.

Since we have dismissed the C.R.P., the question of entertaining C.M.A.No.152 of 2002 does not arise. Thus, C.M.A.. is also dismissed. No costs.

?1) AIR 1995 S C 1236

2) AIR 1989 S.C. 839

3) AIR 1999 S C 2354

4) AIR 1999 Bom. 173