Star India Private Limited Vs. Department of Industrial Policy and Promotion & Ors. Case Summary You Can Listen To

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0 30 Oct, 2018
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Star India Private Limited Vs. Department of Industrial Policy and Promotion & Ors.

Supreme Court Of India Civil Appeal /7326-7327/2018

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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.7326-7327 OF 2018

STAR INDIA PRIVATE LIMITED …APPELLANT

VERSUS

DEPARTMENT OF INDUSTRIAL POLICY

AND PROMOTION & ORS. …RESPONDENTS

WITH

CIVIL APPEAL NOS.7328-7329 OF 2018

J U D G M E N T

R.F. NARIMAN, J.

1. The present civil appeals raise a challenge to certain

clauses of the Telecommunication (Broadcasting and Cable)

Services Interconnection (Addressable Systems) Regulations,

2017 (hereinafter referred to as the “Regulation”) notified on

3.3.2017 and the Telecommunication (Broadcasting and Cable)

Services (Eighth) (Addressable Systems) Tariff Order, 2017

(hereinafter referred to as the “Tariff Order”) dated 3.3.2017

made under the Telecom Regulatory Authority of India Act,

1997 (hereinafter referred to as the “TRAI Act”). Since

regulations made under the TRAI Act were under challenge, a

writ petition was filed before the Madras High Court in which the

main issues that arose before the Division Bench were as

follows:-

a. Whether the Telecom Regulatory Authority of

India (hereinafter referred to as “TRAI”) has the

power to regulate only the ‘means of transmission’,

viz. the ‘carriage’ aspect of broadcasting, and does

not have the power to regulate the ‘content’ of the

broadcast (i.e. the channel and/or its constituent

programmes)?

b. Whether the impugned clauses, in fact, and in

effect, regulate the content of the broadcast (i.e. the

channel and/or its constituent programmes)?

c. Whether the impugned clauses have a direct

effect on the pricing and marketing of a television

channel by the broadcaster and hence is an illegal

interference with the content of the broadcast (i.e.

the channel and/or its constituent programmes)?

The appellants have contended that the impugned clauses

have the effect of regulating programmes and television

channels, their pricing and their marketing and manner of

offering/ bundling in the following illustrative manner, which is

beyond the scope of TRAI’s jurisdiction of regulating “means of

transmission”:

a. TRAI has effectively fixed a uniform maximum

retail price for each TV channel at INR 19/-;

b. TRAI has stipulated that a television channel,

which is individually priced at more than INR 19/-

cannot be included in a collection of television

channels (commonly referred to as a “bouquet”) and

can only be offered on an individual/ a-la-carte/

stand-alone basis;

c. TRAI has stipulated that the price of a

bouquet of television channels shall not be less than

85% of the sum of a-la-carte prices of television

channels comprised in the bouquet;

d. TRAI has stipulated that the sum of discount

on television channels and the distribution fee paid

by broadcasters to a distributor of television

channels, cannot exceed 35% of the maximum

retail price of the television channel;

e. Television channels cannot be priced

differently for different distribution platforms;

f. Channels of one broadcaster cannot be

offered by another broadcaster in their bouquet of

television channels, even after obtaining due

authorization;

g. Promotional schemes (i) can only be offered

on a-la-carte prices for offering television channels

and not on bouquet prices, (ii) cannot exceed 90

days at a time, and (iii) can be offered only twice in

a year;

h. High definition and standard definition

channels cannot be in the same bouquet of

television channels;

i. Pay channels and free to air channels cannot

be in the same bouquet.

2. The Division Bench consisting of M. Sundar, J. and Chief

Justice Indira Banerjee differed in their conclusions. As per M.

Sundar, J., it was held:-

“8(a). Owing to the narrative, discussion and all that

have been set out supra, those of the impugned

provisions in the said regulations and said tariff

order which touch upon content of the programmes

of broadcasters are liable to be struck down as not

in conformity with the parent Act / plenary Act.

Therefore, clauses 6(1), second proviso to 6(1),

proviso to 7(2), 7(4), first proviso to 7(4) and 10(3)

of the said Regulations and clauses 3(1), 3(2)(b),

second proviso to 3(2)(b), first proviso to 3(3),

second proviso to 3(3), third proviso to 3(3), fourth

proviso to 3(3), fifth proviso to 3(3), sixth proviso to

3(3) and 3(4) of the said tariff order are struck down

as not in conformity with the parent act, i.e., TRAI

Act.

8(b). With regard to the other two impugned

provisions, as we were given to understand in the

course of the hearing that they are relevant and

necessary for some other clauses also other than

those which have been put in issue in the instant

writ petitions, they deserve to be saved to the extent

they survive and serve the purpose other than

serving implementation or any other purpose of the

provisions which we have struck down. Therefore,

the other impugned provisions, i.e., clause 11(2) in

the said Regulations as also clause 4(2) in the said

tariff order will continue to be in the books, but

cannot be pressed into service for anything to do

with the provisions which we have struck down

supra. In other words, these provisions, i.e., clause

11(2) in the said Regulations as also clause 4(2) in

the said tariff order can be operated if it can be

operated for other provisions of the said

Regulations and said tariff order, other than those

which we have struck down.”

3. Differing from M. Sundar, J., the learned Chief Justice held:-

“69. I am unable to agree with the conclusion of M.

Sundar, J. that the provisions of the impugned

Regulation and the impugned Tariff Order are not in

conformity with the TRAI Act. In my view the

impugned provisions neither touch upon the content

of programmes of broadcasters, nor liable to be

struck down. However, the clause putting cap of

15% to the discount on the MRP of a bouquet is

arbitrary. The said provision is, in my view, not

enforceable. In my considered view, the challenge

to the impugned Regulation and the impugned Tariff

Order fail.

70. Since we have not been able to agree, 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.”

4. The third Judge who therefore resolved the controversy in

favour of the present respondents was M.M. Sundresh, J. After

an exhaustive analysis of the arguments and the Acts in

question, the third learned Judge sided with the Hon’ble Chief

Justice and held:-

“27.1. In her short, yet clear decision, the Hon'ble

Chief Justice has held that there is sufficiency of the

power under the TRAI Act as against the Indian

paths, not intended to cross. The scope of the

amendments made in the year 2012 along with

Section 37 was correctly dealt with. This Court is of

the view that the Copyright Act has rightly taken

note of being the one which gives succour to the

also be a BRR holder. It was rightly held that the

provisions deal with the protection of the right of the

mind the discussion on the Copyright Act, 1957,

which is to be seen contextually qua the issue i.e.,

field being occupied. This Court also does not find

anything wrong with the finding given on the so

called concession given by the learned counsel for

the TRAI being inconsequential, as the very

jurisdiction of the Act itself was taken for

consideration. The finding has to be seen

contextually along with the other issues including

the overall stand taken in the counter affidavit of

respondents 1 to 4. Similarly the self imposed

restrictions while invoking the extraordinary

jurisdiction under Article 226 of the Constitution of

India, deserves to be concurred with.

27.2. Though a submission has been made on the

decision arrived at with respect to the fixation of cap

at 15% discount on the MRP of the bouquet and the

discounts given under the tariff order, the aforesaid

decision cannot be a ground to hold that the

ultimate conclusion arrived at on the other issues

would necessarily follow suit. After all, as a

reference Court, this Court is concerned with the

views expressed by either of the learned Judges on

the points of difference. Accordingly, the dissenting

judgment stands concurred.

28. In the result, this reference qua points of

difference stands ordered concurring with the

dissenting judgment. No costs.”

5. Dr. A.M. Singhvi, learned Senior Advocate appearing on

behalf of the appellants, has referred to several statutes and

judgments in the course of his detailed submissions. According

to the learned Senior Advocate, the TRAI Act was amended in

2000, as a result of which the TRAI Act was extended to

broadcasting services which were undefined. By a Central

Government notification dated 9.1.2004, the TRAI Act was

expressly extended to broadcasting services, and certain

functions were allocated to TRAI in addition to those contained

in Section 11(1)(a) of the TRAI Act, as also to specify norms

and periodicity of revision of rates of pay channels. According

to the learned Senior Advocate, the definition of

“telecommunication service” contained in Section 2(1)(k) of the

TRAI Act only enables TRAI to regulate transmission or

reception of broadcasting services, which essentially relates to

regulatory measures taken for carriage of these signals.

According to the learned Senior Advocate, his clients, namely,

broadcasters, do not have to obtain the permission of the

Government of India for uplinking their programmes with a

particular satellite at a particular frequency, after which

permission has to be obtained for downlinking such channels.

At this point, the broadcaster, post downlinking, sends the

signal to a multi-system operator (hereinafter referred to as an

“MSO”), who in turn sends the signal to a cable TV operator

from which it is beamed to the ultimate consumer watching the

television programmes. For this, the broadcasters pay a

distribution fee and a carriage fee for transportation of such

signal, then send the signals to the MSO, who in turn sends it

on to the cable TV operator, who beams the signal to the

ultimate consumer. Distribution fee, carriage fee and

networking capacity fee are all payable by the broadcaster, with

which the broadcaster can have no quarrel. Equally, in a

situation where direct to home services are provided, instead of

the MSO one has persons, like, for example, TATA Sky, who

then beam the signal directly to the consumer via satellite. TRAI

under the TRAI Act cannot restrict pricing, bundling or

packaging done by the broadcaster, as TRAI’s functions kick in

under the Cable Television Networks (Regulation) Act, 1995

(hereinafter referred to as the “Cable TV Act”) only after the

signal reaches the Cable TV operator. According to the learned

Senior Advocate, at a stage anterior to the Cable TV operator

beaming signals to the consumers, the broadcasters’ rights are

not covered by the TRAI Act, which regulates only carriage, but

by the Copyright Act, 1957, which regulates content. Dr.

Singhvi took us through the Statement of Objects and Reasons

for the TRAI Act, the Preamble thereof, and in particular

Sections 2(1)(k), 11 and 36, to contend that this Act is

“carriage-centric”, and is thus limited to regulation of service in

transmission alone and does not extend to or include the

subject matter or content of the transmission. The Copyright

Act, on the other hand, is “content-centric” and deals with

intellectual property rights which broadcasters have in the form

of both copyright, as well as broadcast reproduction right inter

alia under Section 37 of the Copyright Act. He relied heavily on

the 2012 amendment to the Copyright Act, and in particular on

Chapter 8 of the said Act. According to him, tariff, which relates

to content, is governed by the Copyright Act and not by the

TRAI Act, whereas transmission and delivery to the consumer,

namely, carriage, alone pertains to TRAI’s jurisdiction.

According to him, the impugned clauses of the Regulation as

well as the Tariff Order impact and have the effect of regulating

pricing and terms and conditions of licensing of TV channels,

including their packaging, bundling and other manner of offering

the said channels and their underlying programmes, being

films, TV shows, etc., which are all aspects of intellectual

property rights covered by the Copyright Act. He relied heavily

upon the Sports Broadcasting Signals (Mandatory Sharing with

Prasar Bharati) Act, 2007 (hereinafter referred to as the

“Sports Act”), by way of contrast, and stated that in this Act the

definitions of “broadcaster”, “broadcasting”, “broadcasting

service” and “content” made it clear that the reach of this Act

was not merely confined to transmission of signal but extended

to content as well, and argued that the difference therefore in

the definitions contained in the Sports Act would show that the

reach of the TRAI Act in contrast was limited and did not go to

content. He also relied strongly upon the Cable TV Act and in

particular on the definitions of “broadcaster” and “cable

operator” therein, as well as Section 4A and 5 thereof, read with

the Rules framed thereunder, which would show that “content”

could certainly be regulated by TRAI under the Sports Act, but

only in the manner provided by that Act and from the stage of

the cable TV operator to the consumer and not before. It is

thus clear that this being the case, the aforesaid regulations are

outside the power of TRAI under the TRAI Act and must thus

be struck down.

6. Shri P. Chidambaram, learned Senior Advocate appearing

on behalf of some of the appellants, argued in support of Dr.

Singhvi. He referred, in particular, to the definitions contained

in Sections 2(dd) and 2(ff) of the Copyright Act and stated that

“broadcast” would only mean keeping in readiness a set of TV

channels, which may or may not be further carried by the MSO

of the Cable TV Operator. According to him, in substance, the

impugned Regulation and Tariff Order went beyond the

jurisdiction of TRAI under the TRAI Act in that they sought to

regulate “content” which would mean the original work such as

a book, which could then be made into a film and finally

broadcast by the appellants. Anything which impinges upon the

aforesaid “content” in terms of making, buying, packaging or

marketing, including licensing and assignment, would directly

be covered by the Copyright Act and would, therefore, be

outside the jurisdiction of the TRAI Act. He also strongly relied

upon the judgment of this Court in Petroleum and Natural Gas

Regulatory Board v. Indraprastha Gas Ltd., (2015) 9 SCC

209, to state that in a parallel fact circumstance, no tariff could

be fixed by the Board for the commodity in question, but only

for carriage of the said commodity through pipelines.

7. Shri Rakesh Dwivedi, learned Senior Advocate appearing

on behalf of TRAI, countered each of these submissions.

According to the learned Senior Advocate, a reading of the

TRAI Act, together with the Statement of Objects and Reasons,

would show that it was an Act conceived in the public interest in

order to protect the interests of both service providers like the

broadcasters here, as well as the consumers. Interest of the

consumers of broadcasting services is therefore one of the

paramount considerations when one comes to the authority or

jurisdiction of TRAI under the said Act. According to the

learned Senior Advocate, from the stage of the teleport from

which a TV channel is uplinked by a broadcaster to a satellite

and then downlinked to an MSO, permissions of the Central

Government have to be taken for both uplinking and

downlinking, under guidelines issued, which he took us through.

The said guidelines would show that content is certainly

regulated at this stage, as TV channels which are contrary to

the security of the state, for example, would not be allowed to

be beamed. According to him, regardless of whether the

teleport from which the broadcaster’s signal is uplinked to a

satellite is owned by the broadcaster, or is beamed by a person

other than the broadcaster, a licence under Section 4 of the

Telegraph Act and Section 5 of the Wireless Telegraphy Act is

a sine qua non for operating a teleport and that therefore it is

wholly fallacious to say that broadcasters need not be licencees

under the Telegraph Act when they broadcast signals, either

from their own teleport, or in conjunction with the owner of a

teleport, which reach the ultimate consumer in India. According

to the learned Senior Advocate, therefore, a constricted reading

of the TRAI Act would stultify the nature of the beneficial

legislation contained therein, which is to look after consumer

interests as well. It is clear therefore that the definition of

“telecommunication service” in Section 2(1)(k) cannot be read

in the manner suggested by Dr. Singhvi, and would include,

when it comes to broadcasters, beaming and transmission of

signals from the teleport onwards right up till the stage of the

MSO and the cable TV operator thereafter. He stressed upon

Section 11(1)(b) in particular and stated that in order to ensure

effective interconnection between different service providers, it

was necessary to lay down regulations made under Section 36

of the Act that balanced the interest of broadcasters with the

interest of consumers. He was at pains to point out that at no

stage does either the Regulation or the Tariff Order seek to

regulate, directly or indirectly, the content of the matter

contained in the television channel that is beamed. As an

example, he stated that neither the Regulation nor the Tariff

Order interferes with what could be beamed by the broadcaster,

but only to the manner of such beaming, keeping the interest of

both the broadcaster as well as the ultimate consumer in mind.

He also took us through the consultation papers which

preceded the draft regulation which was framed, and pointed

out that most of what was contained in the impugned

Regulation and Tariff Order, was either requested by the

broadcasters themselves or suggested by them to safeguard

their interests, which TRAI has in principle followed. What is

interesting to note is that it was only at a later stage, before the

draft regulation was made, that references to content and the

relied upon the Cable TV Act and stated that it was important to

note that it was the same regulator, namely, TRAI, who had to

regulate the same signal from broadcaster to MSO, MSO to

Cable TV operator and Cable TV operator to consumer. It

would be extremely anomalous to find that from Cable TV

operator onwards regulations such as those made by TRAI in

the present case would pass muster, but not from the stage of

broadcaster to MSO and MSO to Cable TV operator. He made

it clear that the Sports Act would have no application in the

present case as it dealt with the compulsory broadcast of

certain sports events by broadcasters, which was why content

was referred to in the said Act. He reiterated that at no stage

does TRAI seek to or in fact regulate content of what is

broadcasted so that any reference to this Act would be wholly

irrelevant for the purpose of deciding this case. He also

strongly relied upon Sections 3AA and 4 of the Telegraph Act to

buttress his submission. According to him, since the Copyright

Act operates in a distinct and separate field from the TRAI Act,

equally the red herring of the Copyright Act would have no real

relevance to the powers and functions of TRAI acting under the

TRAI Act. He also cited certain decisions which will be referred

to later in this judgment.

8. Shri Vikas Singh, learned Senior Advocate also appearing

on behalf of TRAI, referred to Section 2(1)(k) of the TRAI Act in

order to explain that the main provision and the proviso had to

be harmonised in the manner suggested by the Delhi High

Court in Star India Pvt. Ltd. v. TRAI, (2018) 146 DLT 455, and

that, so harmonised, it is clear that the main provision did not

include broadcasting services only for the time being. The

proviso which was added by the Amendment Act of 2000 made

it clear that the time had come to include broadcasting services

as well. He further argued that the appellants in the present

case had been taking contradictory stands throughout. As an

example of such stand, he referred to an Order of the

Competition Commission of India dated 27.2.2018, in which he

referred to the stand of the appellants stating that the

Competition Commission had no jurisdiction to look into pricing

and the manner of offering TV channels, which lies in the

domain of the sectoral regulator TRAI and is, therefore, an

occupied field. He also referred to how the analogue system

led to great leakages which led to less revenue and how the

movement towards digitisation, therefore, gave broadcasters a

great fillip in their revenue. He also referred to the

consultations that went on between all stakeholders and

consumers which led up to the impugned Regulation, which

was a Regulation which balanced the interests of broadcasters

and consumers.

9. Shri K.V. Vishwanathan, learned Senior Advocate appearing

on behalf of the multi-system operators, placed strong reliance

on Regulations 3(1) and 3(2) of the impugned Regulation,

which, according to him, have not been challenged by the

appellants. These regulations make it clear that the

broadcasters have to offer TV channels on a non-discriminatory

basis. The only reason why pricing is referred to in the

impugned Regulation is to fulfil Regulation 3(2), which is to

ensure that the offer made is non-discriminatory and, therefore,

the Regulation and the Tariff Order read as a whole would, in

fact, not impact content at all but be regulations for carriage of

the signals stricto senso. He relied on judgments which held

that TRAI’s regulatory powers are extremely wide. He also

relied upon several provisions of the Copyright Act, including

Section 52(1)(b), which made it clear that there would be no

infringement of copyright, assuming the arguments of the

appellants to be correct, when there is transient or incidental

storage of a work or performance purely in the technical

process of electronic transmission or communication to the

public.

10. Shri Shyam Divan, learned Senior Advocate, appeared on

behalf of direct-to-home companies. He referred to and relied

upon various provisions of the Copyright Act, in particular,

Section 37 thereof, making it clear that the broadcast

reproduction right referred to is born only after the broadcast

which has passed down from the broadcaster through the MSO

to the cable operator to the consumer and/or through the DTH

service provider to the consumer is over. He stressed the fact

that this right comes in only when a re-broadcast or a

subsequent second broadcast takes place after the original

broadcast, which would not be covered by the Regulation or the

Tariff Order in the present case.

11. Shri Krishnan Venugopal, learned Senior Advocate

appearing for some of the consumers, referred to the Standing

Committee of Parliament, in which it was pointed out that

digitisation of cable TV services, by switching from the older

analogue system in phases from 2012 onwards, had greatly

increased the revenue of broadcasters and stated that these

benefits could not possibly be denied by the broadcasters. In

addition, the selfsame broadcasters have been regulated

throughout and are raising questions relating to jurisdiction only

after the present Regulation and Tariff Order have been made

largely with their consent. He also cited certain decisions on

the reach of TRAI under the TRAI Act.

12. Having heard learned counsel for the parties, it is

important to first deal with the TRAI Act. In Secretary, Ministry

of Information & Broadcasting, Govt. of India & Ors. v.

Cricket Association of Bengal, (1995) 2 SCC 161, this Court

referred to the pressing need to create a comprehensive

enactment regulating airwaves, being public property. Public

interest demanded that service providers be regulated and the

usage of the airwaves through frequencies be regulated. A

direction was thus issued to the Government of India to

formulate a comprehensive enactment after noting the

inadequacies that were felt in the Indian Telegraph Act, 1885.

This Court stated:

“Per Sawant, J.:

78. There is no doubt that since the

airwaves/frequencies are a public property and are

also limited, they have to be used in the best

interest of the society and this can be done either by

a central authority by establishing its own

broadcasting network or regulating the grant of

licences to other agencies, including the private

agencies. What is further, the electronic media is

the most powerful media both because of its audio-

visual impact, and its widest reach covering the

section of the society where the print media does

not reach. The right to use the airwaves and the

content of the programmes therefore, needs

regulation for balancing it and as well as to prevent

monopoly of information and views relayed, which is

a potential danger flowing from the concentration of

the right to broadcast/telecast in the hands either of

a central agency or of few private affluent

broadcasters. That is why the need to have a

central agency representative of all sections of the

society free from control both of the Government

and the dominant influential sections of the society.

xxx xxx xxx

120. … Hence every citizen has a right to use the

best means available for the purpose. At present,

electronic media, viz., T.V. and radio, is the most

effective means of communication. …

xxx xxx xxx

122. We, therefore, hold as follows:

[i] The airwaves or frequencies are a public

property. Their use has to be controlled and

regulated by a public authority in the interests

of the public and to prevent the invasion of

their rights. Since the electronic media

involves the use of the airwaves, this factor

creates an in-built restriction on its use as in

the case of any other public property.

[ii] The right to impart and receive information

is a species of the right of freedom of speech

and expression guaranteed by Article 19(1)(a)

of the Constitution. A citizen has the

fundamental right to use the best means of

imparting and receiving information and as

such to have an access to telecasting for the

purpose. However, this right to have an

access to telecasting has limitations on

account of the use of the public property, viz.,

the airwaves, involved in the exercise of the

right and can be controlled and regulated by

the public authority. This limitation imposed by

the nature of the public property involved in

the use of the electronic media is in addition to

the restrictions imposed on the right to

freedom of speech and expression under

Article 19(2) of the Constitution.

[iii] The Central Government shall take

immediate steps to establish an independent

autonomous public authority representative of

all sections and interests in the society to

control and regulate the use of the airwaves.

[iv] Since the matches have been telecast

pursuant to the impugned order of the High

Court, it is not necessary to decide the

correctness of the said order.

Per Jeevan Reddy J.:

201.1.(b) Airwaves constitute public property and

must be utilised for advancing public good. No

individual has a right to utilise them at his choice

and pleasure and for purposes of his choice

including profit…

201.1.(c) Broadcasting media is inherently different

from Press or other means of communication/

information. The analogy of press is misleading and

inappropriate. This is also the view expressed by

several Constitutional Courts including that of the

United States of America.

xxx xxx xxx

201.4. The Indian Telegraph Act, 1885 is totally

inadequate to govern an important medium like the

radio and television, i.e., broadcasting media. The

Act was intended for an altogether different purpose

when it was enacted. This is the result of the law in

this country not keeping pace with the technological

advances in the field of information and

communications. While all the leading democratic

countries have enacted laws specifically governing

the broadcasting media, the law in this country has

stood still, rooted in the Telegraph Act of 1885.

Except Section 4(1) and the definition of telegraph,

no other provision of the Act is shown to have any

relevance to broadcasting media. It is, therefore,

imperative that the parliament makes a law placing

the broadcasting media in the hands of a

public/statutory corporate or the corporations, as the

case may be. This is necessary to safeguard the

interests of public and the interests of law as also to

avoid uncertainty, confusion and consequent

litigation.”

13. Accordingly, the Government formulated a National

Telecom Policy in 1994 and then decided to promulgate an

ordinance which led to the enactment of the TRAI Act. The

Statement of Objects and Reasons of this Act stressed:

“1. In the context of the National Telecom Policy,

1994, which amongst other things, stresses on

achieving the universal service, bringing the quality

of telecom services to world standards, provisions

of wide range of services to meet the customers

demand at reasonable price, and participation of the

companies registered in India in the area of basic as

well as value added telecom services as also

making arrangements for protection and promotion

of consumer interest and ensuring fair competition,

there is a felt need to separate regulatory functions

from service providing functions which will be in

keeping with the general trend in the world. In the

multi-operator situation arising out of opening of

basic as well as value added services in which

private operator will be competing with Government

operators, there is a pressing need for an

independent telecom regulatory body for regulation

of telecom services for orderly and healthy growth

of telecommunication infrastructure apart from

protection of consumer interest.

2. In view of above, it was proposed to set up an

independent Telecom Regulatory Authority as a

non-statutory body and for that purpose the Indian

Telegraph (Amendment) Bill, 1995 was introduced

and then passed by Lok Sabha on 6

August, 1995.

At the time of consideration of the aforesaid Bill in

Rajya Sabha, having regard to the sentiments

expressed by the Members of Rajya Sabha and of

the views of the Standing Committee on

Communication which expressed a hope that steps

will be taken to set up a Statutory Authority, it is

proposed to set up the Telecom Regulatory

Authority of India as a statutory authority.

3. The proposed Authority will consist of a

Chairperson and minimum two and maximum four

members. A person who is or has been a Judge of

the Supreme Court or Chief Justice of a High Court

will be eligible to be appointed as a Chairperson of

the authority. A member shall be a person who has

held as the post of Secretary or Additional Secretary

to the Government of India or any equivalent post in

the Central Government or the State Government

for minimum period of three years.

4. The powers and functions of the Authority, inter

alia, are-

(i) ensuring technical compatibility and

effective inter-relationship between different

service providers;

(ii) regulation of arrangement amongst service

providers of sharing their revenue derived

from providing telecommunication service;

(iii) ensuring compliance of licence conditions

by all service providers;

(iv) protection of the interest of the consumers

of telecommunication service;

(v) settlement of disputes between service

providers;

(vi) fixation of rates for providing

telecommunication service within India and

outside India;

(vii) ensuring effective compliance of universal

service obligations.

5. The Authority shall have an inbuilt dispute

settlement mechanism including procedure to be

followed in this regard as well as a scheme of

punishment in the event of non-compliance of its

order.

6. The Authority will have to maintain transparency

while exercising its powers and functions. The

powers and functions would enable the Authority to

perform a role of watchdog for the telecom sector in

an effective manner.

7. In order that the Authority functions in a truly

independent manner and discharges its assigned

responsibilities effectively, it is proposed to vest the

Authority with a statutory status.

8. As the Parliament was not in session, the

President promulgated the Telecom Regulatory

Authority of India Ordinance, 1996 on the 27

January, 1996 for the aforesaid purpose.

9. The Bill seeks to replace the said Ordinance.”

(Emphasis supplied.)

14. The said Act was amended by Act 2 of 2000, which

substituted the Preamble of the TRAI Act thus:

“An Act to provide for the establishment of

the Telecom Regulatory Authority of India and the

Telecom Disputes Settlement and Appellate

Tribunal to regulate the telecommunication services,

adjudicate disputes, dispose of appeals and to

protect the interests of service providers and

consumers of the telecom sector, to promote and

ensure orderly growth of the telecom sector and for

matters connected therewith or incidental thereto”

(Emphasis supplied.)

15. The Amendment Act of 2000 added a proviso to the

definition of “telecommunication service” under Section 2(1)(k),

permitting the Central Government to notify other services to be

telecommunication services including broadcasting services.

The relevant provisions of the TRAI Act are, therefore, set out

hereinbelow:

“2(1) In this Act, unless the context otherwise

requires,-

xxx xxx xxx

(e) “licensee” means any person licensed under

sub-section (1) of Section 4 of the Indian Telegraph

Act, 1885 (13 of 1885) for providing specified public

telecommunication services;

(ea) “licensor” means the Central Government or

the telegraph authority who grants a licence under

Section 4 of the Indian Telegraph Act, 1885;

xxx xxx xxx

(j) “service provider” means the Government as a

service provider and includes a licensee;

(k) “telecommunication service” means service of

any description (including electronic mail, voice

mail, data services, audio tax services, video tax

services, radio paging and cellular mobile telephone

services) which is made available to users by

means of any transmission or reception of signs,

signals, writing, images and sounds or intelligence

of any nature, by wire, radio, visual or other

electromagnetic means but shall not include

broadcasting services.

Provided that the Central Government may notify

other service to be telecommunication service

including broadcasting services.

xxx xxx xxx

11. Functions of Authority.— (1) Notwithstanding

anything contained in the Indian Telegraph Act,

1885 (13 of 1885), the functions of the Authority

shall be to—

(a) make recommendations, either suo motu or on a

request from the licensor, on the following matters,

namely:—

(i) need and timing for introduction of new

service provider;

(ii) terms and conditions of licence to a service

provider;

(iii) revocation of licence for non-compliance

of terms and conditions of licence;

(iv) measures to facilitate competition and

promote efficiency in the operation of

telecommunication services so as to facilitate

growth in such services;

(v) technological improvements in the services

provided by the service providers;

(vi) type of equipment to be used by the

service providers after inspection of

equipment used in the network;

(vii) measures for the development of

telecommunication technology and any other

matter relatable to telecommunication industry

in general;

(viii) efficient management of available

spectrum;

(b) discharge the following functions, namely:—

(i) ensure compliance of terms and conditions

of licence;

(ii) notwithstanding anything contained in the

terms and conditions of the licence granted

before the commencement of the Telecom

Regulatory Authority of India (Amendment)

Act, 2000, fix the terms and conditions of

inter-connectivity between the service

providers;

(iii) ensure technical compatibility and

effective inter-connection between different

service providers;

(iv) regulate arrangement amongst service

providers of sharing their revenue derived

from providing telecommunication services;

(v) lay-down the standards of quality of

service to be provided by the service

providers and ensure the quality of service

and conduct the periodical survey of such

service provided by the service providers so

as to protect interest of the consumers of

telecommunication service;

(vi) lay-down and ensure the time period for

providing local and long distance circuits of

telecommunication between different service

providers;

(vii) maintain register of inter-connect

agreements and of all such other matters as

may be provided in the regulations;

(viii) keep register maintained under clause

(vii) open for inspection to any member of

public on payment of such fee and compliance

of such other requirement as may be provided

in the regulations;

(ix) ensure effective compliance of universal

service obligations;

respect of such services as may be determined by

regulations;

(d) perform such other functions including such

administrative and financial functions as may

entrusted to it by the Central Government or as may

be necessary to carry out the provisions of this Act:

Provided that the recommendations of the Authority

specified in clause (a) of this sub-section shall not

be binding upon the Central Government:

Provided further that the Central Government shall

seek the recommendations of the Authority in

respect of matters specified in sub-clauses (i) and

(ii) of clause (a) of this sub-section in respect of new

licence to be issued to a service provider and the

Authority shall forward its recommendations within a

period of sixty days from the date on which that

Government sought the recommendations:

Provided also that the Authority may request the

Central Government to furnish such information or

documents as may be necessary for the purpose of

making recommendations under sub-clauses (i) and

(ii) of clause (a) of this sub-section and that

Government shall supply such information within a

period of seven days from receipt of such request:

Provided also that the Central Government may

issue a licence to a service provider if no

recommendations are received from the Authority

within the period specified in the second proviso or

within such period as may be mutually agreed upon

between the Central Government and the Authority:

Provided also that if the Central Government,

having considered that recommendation of the

Authority, comes to a prima facie conclusion that

such recommendation cannot be accepted or needs

modifications, it shall refer the recommendation

back to the Authority for its reconsideration, and the

Authority may, within fifteen days from the date of

receipt of such reference, forward to the Central

Government its recommendation after considering

the reference made by that Government. After

receipt of further recommendation if any, the Central

Government shall take a final decision.

(2) Notwithstanding anything contained in the Indian

Telegraph Act, 1885 (13 of 1885), the Authority

may, from time to time, by order, notify in the Official

Gazette the rates at which the telecommunication

services within India and outside India shall be

provided under this Act including the rates at which

messages shall be transmitted to any country

outside India:

Provided that the Authority may notify different rates

for different persons or class of persons for similar

telecommunication services and where different

rates are fixed as aforesaid the Authority shall

record the reasons therefor.

(3) While discharging its functions under sub-

section (1), or sub-section (2) the Authority shall not

act against the interest of the sovereignty and

integrity of India, the security of the State, friendly

relations with foreign States, public order, decency

or morality.

(4) The Authority shall ensure transparency while

exercising its powers and discharging its functions.

xxx xxx xxx

36. Power to make regulations .— (1) The

Authority may, by notification, make regulations

consistent with this Act and the rules made

thereunder to carry out the purposes of this Act.

(2) In particular, and without prejudice to the

generality of the foregoing power, such regulations

may provide for all or any of the following matters,

namely :—

(a) the times and places of meetings of the Authority

and the procedure to be followed at such meetings

under sub-section (1) of Section 8, including

quorum necessary for the transaction of business;

(b) the transaction of business at the meetings of

the Authority under sub-section (4) of Section 8;

(d) matters in respect of which register is to be

maintained by the Authority under sub-clause (vii) of

clause (b) of sub-section (1) of Section 11;

(e) levy of fee and lay down such other

requirements on fulfilment of which a copy of

clause (b) of sub-section (1) of Section 11;

(f) levy of fees and other charges under clause (c)

of sub-section (1) of Section 11.”

16. The proviso to section 2(1)(k) was challenged in the Delhi

High Court, which challenge was repelled by the Delhi High

Court in Star India Private Limited v. TRAI & Ors., (supra.).

An SLP from the said judgment was also dismissed. Acting

under Section 2(1)(k), the Central Government issued two

notifications on 9.1.2004. S.O.44(E) reads as follows:-

“S.O. 44(E). – In exercise of the powers conferred

by the proviso to clause (k) of sub-section (1) of

section 2 of the Telecom Regulatory Authority of

India Act, 1997 (24 of 1997), the C entral

Government hereby notifies the broadcasting

services and cable services to be

telecommunication service.

[Notification No. 39 issued by Ministry of

communication and Information Technology dated 9

January 2004. S.O. No. 44(E) issued by TRAI, vide

F.No. 13-1/2004]”

S.O.45(E) reads as follows:-

“S.O.45(E). – In exercise of the powers conferred by

clause (d) of sub-clause (1) of section 11 of the

Telecom Regulatory Authority of India Act, 1997 (24

of 1997) (hereinafter referred to as the Act), the

Central Government hereby entrusts the following

additional functions to the Telecom Regulatory

Authority of India, established under Sub-section (1)

of Section 3 of the Act, in respect of broadcasting

services and cable services, namely:-

(1) Without prejudice to the provisions contained

in clause (a) of sub-section (1) of section 11 of the

Act, to make recommendation regarding –

(a) the terms and conditions on which the

‘addressable systems’ shall be provided to

customers.

Explanation – For the purposes of this clause,

‘addressable system’ with its grammatical variation,

means an electronic device or more than one

electronic devices put in an integrated system

through which signals of cable television network

can be sent in encrypted or unencrypted form,

which can be decoded by the device or devices at

the premises of the subscriber within the limits of

authorisation made, on the choice and request of

such subscriber, by the cable operator for that

purpose to the subscriber.

(b) the parameters for regulating maximum

time for advertisements in pay channels as

well as other channels.

(2) Without prejudice to the provisions of sub-

section (2) of section 11 of the Act, also to specify

standard norms for, and periodicity of, revision of

rates of pay channels, including interim measures.

[Notification No. 39 issued by Ministry of

Communication and Information Technology, dated

9 January 2004, S.O. No. 45(E) issued by TRAI,

vide F.No. 13-1/2004]”

17. We are concerned with the impugned Regulation that was

framed on 3.3.2017 under Section 36 of the Act together with

the Tariff Order made on the same date. The regulations with

which we are directly concerned are set out hereunder:

“3. General obligations of broadcasters.— (1) No

broadcaster shall engage in any practice or activity

or enter into any understanding or arrangement

including exclusive contracts with any distributor of

television channels that prevents any other

distributor of television channels from obtaining

signals of television channel of such broadcaster for

distribution.

(2) Every broadcaster shall, within sixty days of

receipt of written request from a distributor of

television channels for obtaining signals of

television channel or within thirty days of signing of

interconnection agreement with the distributor, as

the case may be, provide, on non-discriminatory

basis, the signals of television channel to the

distributor or convey the reasons in writing for

rejection of the request if the signals of television

channel are denied to such distributor:

Provided that imposition of any term or condition by

the broadcaster, which is unreasonable, shall be

deemed to constitute a denial of request:

Provided further that this sub-regulation shall not

apply to a distributor of television channels, who

requests signals of a particular television channel

from a broadcaster while at the same time demands

carriage fee for distribution of that television channel

or who is in default of payment to the broadcaster

and continues to be in such default.

(3) If a broadcaster, proposes or stipulates for,

directly or indirectly, placing the channel in any

specified position in the electronic programme guide

or assigning a particular channel number, as a pre-

condition for providing signals, such pre-condition

shall also amount to imposition of unreasonable

condition.

Explanation: For removal of doubt, it is clarified that

if a pay broadcaster offers discount, in non-

discriminatory manner, through its reference

interconnect offer on the maximum retail price of

pay channel, within the limit as specified in sub-

regulation (4) of regulation 7, to distributors of

television channels for placing the channel in any

specified position in the electronic programme guide

or assigning particular channel number, such offer

of discount shall not be considered a pre-condition.

(4) No broadcaster shall propose, stipulate or

demand for, directly or indirectly, packaging of the

channel in any particular bouquet offered by the

distributor of television channels to subscribers.

(5) No broadcaster shall propose, stipulate or

demand for, directly or indirectly, guarantee of a

minimum subscriber base or a minimum

subscription percentage for its channel or bouquet.

Explanation: For removal of doubt, it is clarified that

the subscription percentage of a channel or bouquet

refers to the percentage of subscribers subscribing

to a specific channel or bouquet out of average

active subscriber base of a distributor.

xxx xxx xxx

6. Compulsory offering of channels on a-la-carte

basis. - (1) Every broadcaster shall offer all its

television channels on a-la-carte basis to the

distributors of television channels:

Provided that the broadcaster may also offer its pay

channels, in addition to offering of pay channels on

a-la-carte basis, in form of bouquet:

Provided further that such bouquet shall not

contain—

(a) any ‘free-to-air channel’; and

(b) High definition (HD) and Standard

Definition (SD) variants of the same channel.

7. Publication of reference interconnection offer

by broadcaster for pay channels.— (1) Every

broadcaster shall publish, on its website, reference

interconnection offer, in conformance with the

regulations and the tariff orders notified by the

Authority, for providing signals of all its pay

channels to the distributor of television channels—

(a) within sixty days of commencement of

these regulations; and

(b) before launching of a pay channel. and

simultaneously submit, for the purpose of

record, a copy of the same to the Authority.

(2) The reference interconnection offer, referred to

in sub-regulation (1), shall contain the technical and

commercial terms and conditions relating to,

including but not limited to, maximum retail price per

month of pay channel, maximum retail price per

month of bouquet of pay channels, discounts, if any,

offered on the maximum retail price to distributors,

distribution fee, manner of calculation of

'broadcaster’s share of maximum retail price', genre

of pay channel and other necessary conditions:

Provided that a broadcaster may include in its

reference interconnection offer, television channel

or bouquet of pay channels of its subsidiary

company or holding company or subsidiary

company of the holding company, which has

obtained, in its name, the downlinking permission

for its television channels from the Central

Government, after written authorization by them.

Explanation: For the purpose of these regulations,

the definition of “subsidiary company” and “holding

company” shall be the same as assigned to them in

the Companies Act, 2013 (18 of 2013).

(3) Every broadcaster shall declare a minimum

twenty percent of the maximum retail price of pay

channel or bouquet of pay channels, as the case

may be, as the distribution fee:

Provided that the distribution fee declared by the

broadcaster shall be uniform across all the

distribution platforms.

(4) It shall be permissible to a broadcaster to offer

discounts, on the maximum retail price of pay

channel or bouquet of pay channels, to distributors

of television channels, not exceeding fifteen percent

of the maximum retail price:

Provided that the sum of distribution fee declared by

a broadcaster under sub-regulation (3) and

discounts offered under this sub-regulation in no

case shall exceed thirty five percent of the

maximum retail price of pay channel or bouquet of

pay channels, as the case may be:

Provided further that offer of discounts, if any, to

distributors of television channels, shall be on the

basis of fair, transparent and non-discriminatory

terms:

Provided also that the parameters of discounts shall

be measurable and computable.

(5) Every broadcaster of pay channel shall mention

in its reference interconnection offer the names of

persons, telephone numbers, and e-mail addresses

designated to receive request for receiving

interconnection from distributors of television

channels and grievance redressal thereof.

(6) The terms and conditions mentioned in the

reference interconnection offer shall include all

necessary and sufficient provisions, which make it a

complete interconnection agreement on signing by

other party, for distribution of television channels.

(7) The Authority, suo-motu or otherwise, may

examine the reference interconnection offer

submitted by a broadcaster and on examination if

the Authority is of the opinion that the reference

interconnection offer is not in conformance with the

provisions of the regulations and the tariff orders

notified by the Authority, it may, after giving an

opportunity of being heard to such broadcaster,

direct such broadcaster to modify the said reference

interconnection offer and such broadcaster shall

amend reference interconnection offer accordingly

and publish the same within fifteen days of receipt

of the direction.

(8) Any amendment to the reference interconnection

offer shall be published in the same manner as

provided under the sub-regulations (1), (2), (3), (4),

(5) and (6) of this regulation.

(9) In the event of any amendment to the reference

interconnection offer by a broadcaster under sub-

regulation (8), the broadcaster shall give an option

to all distributors, with whom it has written

interconnection agreements in place, within thirty

days from the date of such amendment and it shall

be permissible to such distributors to enter into

fresh interconnection agreement in accordance with

the amended reference interconnection offer, within

thirty days from the date of receipt of such option, or

continue with the existing interconnection

agreement.

xxx xxx xxx

10. Interconnection agreement between

broadcaster and distributor of television

channels.— (1) No broadcaster shall provide

signals of pay channels to a distributor of television

channels without entering into a written

interconnection agreement with such distributor of

television channels.

(2) No distributor of television channels shall

distribute pay channels of any broadcaster without

entering into a written interconnection agreement

with such broadcaster.

(3) It shall be mandatory for a broadcaster and a

distributor of television channels to enter into written

interconnection agreement on a-la-carte basis for

distribution of pay channels.

xxx xxx xxx

11. Territory of interconnection agreement.— (1)

The interconnection agreement signed between a

broadcaster and a multi-system operator shall

include the following details for describing the

territory for the purpose of distribution of signals of

television channels –

(a) the registered area of operation of the

multi-system operator as mentioned in the

registration granted by the Central

Government;

(b) the names of specific areas for which

distribution of signals of television channels

has been agreed, initially, at the time of

signing of the interconnection agreement; and

union territories in which such agreed areas

as referred in clause (b) of this sub-regulation

are located.

(2) It shall be permissible to the multi-system

operator to distribute the channels beyond the areas

agreed under sub-regulation (1), by giving a written

notice to the broadcaster, after thirty days from the

date of receipt of such written notice by the

broadcaster and the said notice shall deemed to be

an addendum to the existing interconnection

agreement:

Provided that such areas fall within—

(a) the registered area of operation of the

multi-system operator; and

(b) the states or union territories in which the

multi-system operator has been permitted to

distribute the signals of television channels

under the interconnection agreement.

(3) Nothing contained in sub-regulation (2) shall

apply if written objections with reasons from the

broadcaster have been received by the multi-

system operator during the said thirty days notice

period: Provided that any objection by the

broadcaster, which is unreasonable, shall be

deemed to constitute a denial of provisioning of

signals beyond the areas agreed under the clause

(b) of sub-regulation (1).”

18. The relevant clauses of the Tariff Order with which we are

directly concerned are set out hereunder:

“3. Manner of offering of channels by

broadcasters.--- (1) Every broadcaster shall offer

all its channels on a-la-carte basis to all distributors

of television channels.

(2) Every broadcaster shall declare ----

(a) the nature of each of its channel either as

‘free-to-air’ or ‘pay’; and

(b) the maximum retail price, per month,

payable by a subscriber for each of its pay

channel offered on a-la-carte basis:

Provided that the maximum retail price of a pay

channel shall be more than ‘zero’:

Provided further that the maximum retail price of a

channel shall be uniform for all distribution

platforms.

(3) It shall be permissible for a broadcaster to offer

its pay channels in the form of bouquet(s) and

declare the maximum retail price(s), per month, of

such bouquet(s) payable by a subscriber:

Provided that, while making a bouquet of pay

channels, it shall be permissible for a broadcaster to

combine pay channels of its subsidiary company or

holding company or subsidiary company of the

holding company, which has obtained, in its name,

the downlinking permission for its television

channels, from the Central Government, after

written authorization by them, and declare

maximum retail price, per month, for such bouquet

of pay channels payable by a subscriber:

Provided that such bouquet shall not contain any

pay channel for which maximum retail price per

month is more than rupees nineteen:

Provided further that the maximum retail price per

month of such bouquet of pay channels shall not be

less than eighty five percent of the sum of maximum

retail prices per month of the a-la-carte pay

channels forming part of that bouquet:

Provided further that the maximum retail price per

month of such bouquet of pay channels shall be

uniform for all distribution platforms:

Provided further that such bouquet shall not contain

any free-to-air channel:

Provided also that such bouquet shall not contain

both HD and SD variants of the same channel.

Explanation: For the purpose of this Order, the

definition of “subsidiary company” and “holding

company” shall be the same as assigned to them in

the Companies Act, 2013 (18 of 2013).

(4) It shall be permissible for a broadcaster to offer

promotional schemes on maximum retail price(s)

per month of its a-la-carte pay channel(s):

Provided that period of any such scheme shall not

exceed ninety days at a time:

Provided further that the frequency of any such

scheme by the broadcaster shall not exceed twice

in a calendar year:

Provided further that the price(s) of a-la-carte pay

channel(s) offered under any such promotional

scheme shall be considered as maximum retail

price(s) during the period of such promotional

scheme:

Provided also that the provisions of Regulations and

Tariff Orders notified by the Authority shall be

applicable on the price(s) of a-la-carte pay

channel(s) offered under any such promotional

scheme.

(5) Every broadcaster, before making any change in

the nature of a channel or in the maximum retail

price of a pay channel or in the maximum retail

price of a bouquet of pay channels or in the

composition of a bouquet of pay channels, as the

case may be, shall follow the provisions of all the

applicable Regulations and Orders notified by the

Authority, including but not limited to the publication

of Reference Interconnection Offer.

4. Declaration of network capacity fee and

manner of offering of channels by distributors

of television channels.--- (1) Every distributor of

television channels shall declare network capacity

fee, per month, payable by a subscriber for availing

a distribution network capacity so as to receive the

signals of television channels:

Provided that the network capacity fee, per month,

for network capacity upto initial one hundred SD

channels, shall, in no case, exceed rupees one

hundred and thirty, excluding taxes:

Provided further that the network capacity fee, per

month, for network capacity in the slabs of twenty

five SD channels each, beyond initial one hundred

channels capacity referred to in first proviso to sub-

clause (1), shall, in no case, exceed rupees twenty

excluding taxes:

Provided also that one HD channel shall be treated

equal to two SD channels for the purpose of

calculating number of channels within the

distribution network capacity subscribed.

(2) Every distributor of television channels shall

offer all channels available on its network to all

subscribers on a-la-carte basis and declare

distributor retail price, per month, of each pay

channel payable by a subscriber:

Provided that the distributor retail price, per month,

payable by a subscriber to a distributor of television

channels for subscribing to a pay channel shall, in

no case, exceed the maximum retail price, per

month, declared by the broadcasters for such pay

channel.

(3) Every distributor of television channels shall

offer to all subscribers each bouquet of pay

channels offered by a broadcaster, and for which

interconnection agreement has been signed with

that broadcaster, without any alteration in its

composition and declare the distributor retail price,

per month, for such bouquet payable by a

subscriber:

Provided that the distributor retail price, per month,

payable by a subscriber to a distributor of television

channels for subscribing to a bouquet of pay

channels offered by the broadcaster shall in no case

exceed the maximum retail price, per month,

declared by the broadcasters for such bouquet of

pay channels:

Provided further that such bouquet shall not contain

any pay channel for which maximum retail price per

month declared by the broadcaster is more than

rupees nineteen:

Provided further that such bouquet shall not contain

any free-to-air channel:

Provided also that such bouquet shall not contain

both HD and SD variants of the same channel.

(4) It shall be permissible for a distributor of

television channels to offer bouquet(s) formed from

pay channels of one or more broadcasters and

declare distributor retail price(s) , per month, of such

bouquet(s) payable by a subscriber:

Provided that such bouquet shall not contain any

pay channel for which maximum retail price per

month declared by the broadcaster is more than

rupees nineteen:

Provided further that the distributor retail price per

month of such bouquet of pay channels shall not be

less than eighty five percent of the sum of distributor

retail prices per month of a-la-carte pay channels

and bouquet(s) of pay channels forming part of that

bouquet:

Provided further that the distributor retail price per

month of a bouquet of pay channels offered by a

distributor of television channels shall, in no case,

exceed the sum of maximum retail prices per month

of a-la-carte pay channels and bouquet(s) of pay

channels, declared by broadcasters, forming part of

that bouquet:

Provided further that such bouquet shall not contain

any free-to-air channel:

Provided also that such bouquet shall not contain

both HD and SD variants of the same channel.

Explanation: For the removal of doubt it is hereby

clarified that a distributor of television channels

while forming bouquet under this clause shall not

break a bouquet of pay channels offered by a

broadcaster to form two or more bouquet(s) at

distribution level.

(5) It shall be permissible for a distributor of

television channels to offer bouquet(s) formed from

free-to-air channels of one or more broadcasters.

(6) No distributor of television channels shall charge

any amount, other than the network capacity fee,

from its subscribers for subscribing to free-to-air

channels or bouquet(s) of free-to air channels.

(7) Within the distribution network capacity

subscribed, in addition to channels notified by

Central Government to be mandatorily provided to

all the subscribers, a subscriber shall be free to

choose any free-to-air channel(s), pay channel(s),

or bouquet(s) of channels offered by the

broadcaster(s) or bouquet(s) of channels offered by

distributors of television channels or a combination

thereof:

Provided that if a subscriber opts for pay channels

or bouquet of pay channels, he shall be liable to pay

an amount equal to sum of distributor retail price(s)

for such channel(s) and bouquets in addition to

network capacity fee.

(8) Subject to sub-clause (1) of clause 4, a

distributor of television channels shall not increase

the network capacity fee for a period of six months

from the date of such notification: Provided that a

distributor of television channels, before making any

change in the network capacity fee, shall at least

thirty days prior to the scheduled change---

(a) inform the Authority; and

(b) inform the subscribers by running scroll on

the channel.”

19. In the judgment of Sundar,J., in the Division Bench of the

Madras High Court, a useful table is set out which not only

states the provisions that have been challenged, but the

specific ground on which they have been challenged. We,

therefore, reproduce this table in our judgment:-

“Provisions of the Interconnection Regulation which

Regulate content

Sl.

No.

Provision Ground

1. 6(1) All channels (pay

channels and free-to-air

channels) to be offered

on a-la-carte basis.

Impinges upon broadcaster's

ability to package a TV

channel. No such restriction on

broadcaster under Copyright

Act.

2. Second proviso to 6(1)

- Bouquet of pay

channels shall not have

free-to-air channels.

- HD and SD variant of

same channel cannot be

in same bouquet.

Impinges upon broadcaster's

ability to package a TV

channel. No such restriction on

broadcaster under Copyright

Act.

3. Proviso to 7(2) -

Bundling of third party

channels prohibited.

Impinges upon broadcaster's

ability to package a TV

channel. No such restriction on

broadcaster under Copyright

Act.

4. 7(4) - Broadcaster can

offer discounts to

distributor not exceeding

15% of MRP.

Directly regulates the pricing of

a TV channel, thereby also

regulating pricing of individual

programmes.

5. First proviso to 7(4) -

Sum of discount under

7(4) and distribution fee

under 7(3) shall not

exceed 35% of MRP.

Directly regulates the pricing of

a TV channel, thereby also

regulating pricing of individual

programmes.

6. 10(3) r/w 6(1) -

Mandatory to enter into

agreement with DPO on

an a-la-carte basis for

pay channels.

Impinges upon broadcaster's

freedom to offer pay channels

only as a part of bouquet and

not as a-la-carte. No such

restriction on broadcaster

under Copyright Act.

7. 11(2) - Deemed

extension of

geographical territory.

Directly impinges the

broadcaster's right under 19(2)

to designate the geographical

territory of exploitation.

Provisions of the Tariff Order which regulate content

Sl.

No.

Provision Ground

1. 3(1) - All channels to be

offered on a-la-carte

basis

Impinges upon broadcaster's

ability to package a TV

channel. No such restriction

on broadcaster under

2. 3(2)(b) - Declaration of

MRP of a -la-carte

channel

Impinges upon broadcaster's

freedom to offer pay channels

only as a part of bouquet and

not as a-la-carte. No such

restriction on broadcaster

under Copyright Act.

3. Second proviso to

3(2)(b) - MRP of all pay

channels to be uniform

across distribution

platforms.

Under Section 33A read with

Rule 56 of the Copyright

Rules, 2013, broadcaster has

the right to decide separate

MRP for different category of

audience.

4. First proviso to 3(3) -

Bundling of third party

channels prohibited.

Impinges upon broadcaster's

ability to package a TV

channel. For example, third

party channels cannot be part

of the same bouquet. No

such restriction on

broadcaster under Copyright

Act.

5. Second proviso to 3(3) -

MRP of pay channel in

Directly regulates the pricing

of a TV channel, thereby also

bouquet not to exceed

INR 19/-

regulating pricing of individual

programmes.

6. Third proviso to 3(3) -

Bouquet price shall not

be less than 85% of the

sum of a-la-carte prices

of individual channels in

the bouquet.

Directly regulates the pricing

of a TV channel, thereby also

regulating pricing of individual

programmes.

7. Fourth proviso to 3(3) -

MRP of all bouquets to

be uniform across

distribution platforms.

Under Rule 56 of the

broadcaster has the right to

decide separate MRP for

different category of

audience.

8. Fifth proviso to 3(3) -

Bouquet of pay channels

shall not have free-to-air

channels.

Impinges upon broadcaster's

ability to package a TV

channel. No such restriction

on broadcaster under

9. Sixth proviso to 3(3) -

HD and SD variant of

same channel cannot be

in same bouquet.

Impinges upon broadcaster's

ability to package a TV

channel. No such restriction

on broadcaster under

10. 3(4) - Restriction on

promotion of bouquets,

restriction on time,

restriction on frequency.

All these restrictions impinge

broadcaster's ability to

commercially monetize his

content.

11. 4(2) - Distributor to offer

all channels on a-la-carte

basis.

Indirectly impinges upon the

broadcaster's right to offer his

channels to the customers

only as a bouquet and not as

a-la-carte.”

20. Since the Regulation made under Section 36 of the said

Act is under challenge, it must first be stressed that a restrictive

meaning cannot be given to the words “regulation” or “regulate”,

as otherwise the very object of the Act would be stultified. In

Deepak Theater v. State of Punjab, 1992 Supp (1) SCC 684,

a case which related to the Punjab Cinemas (Regulation) Act,

1952 and Rules, this Court referred to the power of licensing

and regulation under the said Act as follows:

“5. Witnessing a motion picture has become an

amusement to every person; a reliever to the weary

and fatigued; a reveller to the pleasure seeker; an

imparter of education and enlightenment enlivening

to news and current events; disseminator of

scientific knowledge; perpetuator of cultural and

spiritual heritage, to the teeming illiterate majority of

population. Thus, cinemas have become tools to

promote welfare of the people to secure and protect

as effectively as it may a social order as per

directives of the State policy enjoined under Article

38 of the Constitution. Mass media, through motion

picture has thus become the vehicle of coverage to

disseminate cultural heritage, knowledge, etc. The

passage of time made manifest this growing

imperative and the consequential need to provide

easy access to all sections of the society to seek

admission into theatre as per his paying capacity.

Though the right to fix rates of admission is a

business incident, the appellant having created an

interest in the general public therein, it has become

necessary for the State to step in and regulate the

activity of fixation of maximum rates of admission to

different classes, as a welfare weal. Thereby

fixation of rates of admission became a legitimate

ancillary or incidental power in furtherance of the

regulation under the Act. Access to and admission

into theatre is a facility and concomitant right to a

cinegoing public. Classification of seats and fixation

of rates of admission according to paying capacity

of a cinegoer is also an integral power of regulation.

Power to fix rates of admission includes power to

amend and revise the rates from time to time. The

statute vests that power in the licensing authority

subject to control by the State Government. The

fixation of the rates of admission has thus become

an integral and essential part of the power and

regulation of exhibition of cinematograph.”

(Emphasis supplied.)

21. In BSNL v. TRAI, (2014) 3 SCC 222, this Court held:

“80. After the Amendment of 2000, TRAI can either

suo motu or on a request from the licensor make

recommendations on the subjects enumerated in

Sections 11(1)(a)(i) to (viii). Under Section 11(1)(b),

TRAI is required to perform nine functions

enumerated in sub-clauses (i) to (ix) thereof. In

these clauses, different terms like “ensure”, “fix”,

“regulate” and “lay down” have been used. The use

of the term “ensure” implies that TRAI can issue

directions on the particular subject. For effective

discharge of functions under various clauses of

Section 11(1)(b), TRAI can frame appropriate

regulations. The term “regulate” contained in sub-

clause (iv) shows that for facilitating arrangement

amongst service providers for sharing their revenue

derived from providing telecommunication services,

TRAI can either issue directions or make

regulations.

xxx xxx xxx

83. In K. Ramanathan v. State of T.N. [K.

Ramanathan v. State of T.N., (1985) 2 SCC 116 :

1985 SCC (Cri) 162] , this Court interpreted the

word “regulation” appearing in Section 3(2)(d) of the

Essential Commodities Act, 1955 and observed:

(SCC pp. 130-31, paras 18-20)

“18. The word ‘regulation’ cannot have any

rigid or inflexible meaning as to exclude

‘prohibition’. The word ‘regulate’ is difficult to

define as having any precise meaning. It is a

word of broad import, having a broad

meaning, and is very comprehensive in scope.

There is a diversity of opinion as to its

meaning and its application to a particular

state of facts, some courts giving to the term a

somewhat restricted, and others giving to it a

liberal, construction. The different shades of

meaning are brought out in Corpus Juris

Secundum, Vol. 76 at p. 611:

‘“Regulate” is variously defined as

meaning to adjust; to adjust, order, or

govern by rule, method, or established

mode; to adjust or control by rule,

method, or established mode, or

governing principles or laws; to govern;

to govern by rule; to govern by, or

subject to, certain rules or restrictions; to

govern or direct according to rule; to

control, govern, or direct by rule or

regulations.

“Regulate” is also defined as meaning to

direct; to direct by rule or restriction; to

direct or manage according to certain

standards, laws, or rules; to rule; to

conduct; to fix or establish; to restrain; to

restrict.’

(See also Webster's Third New International

Dictionary, Vol. 2, p. 1913 and Shorter Oxford

Dictionary, Vol. 2, 3rd Edn., p. 1784.)

19. It has often been said that the power to

regulate does not necessarily include the

power to prohibit, and ordinarily the word

‘regulate’ is not synonymous with the word

‘prohibit’. This is true in a general sense and

in the sense that mere regulation is not the

same as absolute prohibition. At the same

time, the power to regulate carries with it full

power over the thing subject to regulation and

in absence of restrictive words, the power

must be regarded as plenary over the entire

subject. It implies the power to rule, direct and

control, and involves the adoption of a rule or

guiding principle to be followed, or the making

of a rule with respect to the subject to be

regulated. The power to regulate implies the

power to check and may imply the power to

prohibit under certain circumstances, as

where the best or only efficacious regulation

consists of suppression. It would therefore

appear that the word ‘regulation’ cannot have

any inflexible meaning as to exclude

‘prohibition’. It has different shades of

meaning and must take its colour from the

context in which it is used having regard to the

purpose and object of the legislation, and the

Court must necessarily keep in view the

mischief which the legislature seeks to

remedy.

20. The question essentially is one of degree

and it is impossible to fix any definite point at

which ‘regulation’ ends and ‘prohibition’

begins. We may illustrate how different minds

have differently reacted as to the meaning of

the word ‘regulate’ depending on the context

in which it is used and the purpose and object

of the legislation. In Slattery v. Naylor [(1888)

LR 13 AC 446 (PC)] the question arose before

the Judicial Committee of the Privy Council

whether a bye-law by reason of its prohibiting

internment altogether in a particular cemetery,

was ultra vires because the Municipal Council

had only power of regulating internments

whereas the bye-law totally prohibited them in

the cemetery in question, and it was said by

Lord Hobhouse, delivering the judgment of the

Privy Council: (AC p. 447)

‘A rule or bye-law cannot be held as

ultra vires merely because it prohibits

where empowered to regulate, as

regulation often involved prohibition.’”

xxx xxx xxx

87. Reference in this connection can also be made

to the judgment in U.P. Coop. Cane Unions

Federations v. West U.P. Sugar Mills Assn. [(2004)

5 SCC 430] In that case, the Court interpreted the

word “regulation” appearing in the U.P. Sugarcane

(Regulation of Supply and Purchase) Act, 1953 and

observed: (SCC pp. 454-55, para 20)

“20. … ‘Regulate’ means to control or to

adjust by rule or to subject to governing

principles. It is a word of broad impact having

wide meaning comprehending all facets not

only specifically enumerated in the Act, but

also embraces within its fold the powers

incidental to the regulation envisaged in good

faith and its meaning has to be ascertained in

the context in which it has been used and the

purpose of the statute.”

88. It is thus evident that the term “regulate” is

elastic enough to include the power to issue

directions or to make regulations and the mere fact

that the expression “as may be provided in the

regulations” appearing in clauses (vii) and (viii) of

Section 11(1)(b) has not been used in other clauses

of that sub-section does not mean that the

regulations cannot be framed under Section 36(1)

on the subjects specified in sub-clauses (i) to (vi) of

Section 11(1)(b). In fact, by framing regulations

under Section 36, TRAI can facilitate the exercise of

functions under various clauses of Section 11(1)(b)

including sub-clauses (i) to (vi).

89. We may now advert to Section 36. Under sub-

section (1) thereof TRAI can make regulations to

carry out the purposes of the TRAI Act specified in

various provisions of the TRAI Act including

Sections 11, 12 and 13. The exercise of power

under Section 36(1) is hedged with the condition

that the regulations must be consistent with the

TRAI Act and the rules made thereunder. There is

no other restriction on the power of TRAI to make

regulations. In terms of Section 37, the regulations

are required to be laid before Parliament which can

either approve, modify or annul the same. Section

36(2), which begins with the words “without

prejudice to the generality of the power under sub-

section (1)” specifies various topics on which

regulations can be made by TRAI. Three of these

topics relate to meetings of TRAI, the procedure to

be followed at such meetings, the transaction of

business at the meetings and the register to be

maintained by TRAI. The remaining two topics

specified in clauses (e) and (f) of Section 36(2) are

directly referable to Sections 11(1)(b)(viii) and

11(1)(c). These are substantive functions of TRAI.

However, there is nothing in the language of

Section 36(2) from which it can be inferred that the

provisions contained therein control the exercise of

power by TRAI under Section 36(1) or that Section

36(2) restricts the scope of Section 36(1).”

(Emphasis supplied.)

22. However, learned counsel for the appellants relied upon

Cellular Operators Assn. of India v. TRAI, (2016) 7 SCC 703

and, in particular, paragraph 41 thereof, which reads as follows:

“41. We find that the impugned Regulation is not

referable to Sections 11(1)(b)(i) and (v) of the Act

inasmuch as it has not been made to ensure

compliance with the terms and conditions of the

licence nor has it been made to lay down any

standard of quality of service that needs

compliance. This being the case, the impugned

Regulation is dehors Section 11 but cannot be said

to be inconsistent with Section 11 of the Act. This

Court has categorically held in BSNL [BSNL

v. Telecom Regulatory Authority of India, (2014) 3

SCC 222] judgment that the power under Section

36 is not trammelled by Section 11. This being so,

the impugned Regulation cannot be said to be

inconsistent with Section 11 of the Act. However,

what has also to be seen is whether the said

Regulation carries out the purpose of the Act which,

as has been pointed out hereinabove, under the

amended Preamble to the Act, is to protect the

interests of service providers as well as consumers

of the telecom sector so as to promote and ensure

orderly growth of the telecom sector. Under Section

36, not only does the Authority have to make

regulations consistent with the Act and the Rules

made thereunder, but it also has to carry out the

purposes of the Act, as can be discerned from the

Preamble to the Act. If, far from carrying out the

purposes of the Act, a regulation is made contrary

to such purposes, such regulation cannot be said to

be consistent with the Act, for it must be consistent

with both the letter of the Act and the purposes for

which the Act has been enacted. In attempting to

protect the interest of the consumer of the telecom

sector at the cost of the interest of a service

provider who complies with the leeway of an

average of 2% of call drops per month given to it by

another Regulation, framed under Section

11(1)(b)(v), the balance that is sought to be

achieved by the Act for the orderly growth of the

telecom sector has been violated. Therefore, we

hold that the impugned Regulation does not carry

out the purpose of the Act and must be held to be

ultra vires the Act on this score.”

(Emphasis supplied.)

23. What is important to note from this judgment is that the

balance that was sought to be maintained between protecting

the interest of service providers and consumers was destroyed

by the impugned regulations. What is important from our point

of view, however, is that under Section 36 of the TRAI Act, the

Authority is empowered to carry out the purposes of the said

Act as can be discerned from the Preamble to the Act. What is

clear from the amended Preamble to the Act is that the

interests of service providers and consumers are of paramount

importance, both of which have a role to play when regulations

are framed under Section 36.

24. Learned counsel for the appellants also relied upon

Petroleum and Natural Gas Regulatory Board v.

Indraprastha Gas Ltd. (supra.). In this case, the Petroleum

and Natural Gas Regulatory Board Act, 2006 was the subject

matter of discussion by this Court. This Court, after construing

the Act, held that where there is a cassus omissis, such lacuna

cannot be filled up by the judicial interpretative process. Thus,

entities which are neither “common carriers” nor “contract

carriers” within the tariff regulating powers of the Board under

the Act were not held amenable to regulation. Further, the

reach of the Act, as is clear from a reading of Sections 20 to 22

would make it clear that transportation tariffs for common

carriers and contract carriers alone could be regulated by the

Board. This would naturally not include a regulation which will

pertain to network tariff for city or local gas distribution network

as such a network is neither a common carrier nor a contract

carrier covered by the Act. Further, the laying down of the

compression charge for CNG gas would also, therefore, be

wholly outside the reach of the said Act. This judgment again

has no application to the facts of the present case, given the

fact that the Preamble read with Section 11(2) makes it clear

that the Regulation and Tariff Order made thereunder would

both be within the reach of TRAI under the TRAI Act.

25. At this stage, it is also important to set out some of the

provisions of the Indian Telegraph Act, 1885. This Act was

amended in 2004 to include Section 3(1AA). The relevant

sections of this Act are set out hereinbelow:

“3.(1AA) “telegraph” means any appliance,

instrument, material or apparatus used or capable

of use for transmission or reception of signs,

signals, writing, images, and sounds or intelligence

of any nature by wire, visual or other electro

magnetic emissions, Radio waves or Hertzian

waves, galvanic, electric or magnetic means;

Explanation.- “Radio waves” or “Hertzian waves”

means electro magnetic waves of frequencies lower

than 3,000 giga-cycles per second propagated in

space without artificial guide.

xxx xxx xxx

4. Exclusive privilege in respect of telegraphs,

and power to grant licences.— (1) Within India,

the Central Government shall have the exclusive

privilege of establishing, maintaining and working

telegraphs:

Provided that the Central Government may grant a

license, on such conditions and in consideration of

such payments as it thinks fit, to any person to

establish, maintain, or work a telegraph within any

part of India:

Provided further that the Central Government may,

by rules made under this Act and published in the

Official Gazette, permit, subject to such restrictions

and conditions as it thinks fit, the establishment,

maintenance and working—

(a) of wireless telegraphs on ships within

Indian territorial waters and on aircrafts within

or above India, or Indian territorial waters, and

(b) of telegraphs other than wireless

telegraphs within any part of India.

Explanation.— The payments made for the grant of

a licence under this sub-section shall include such

sum attributable to the Universal Service Obligation

as may be determined by the Central Government

after considering the recommendation made in this

behalf by the Telecom Regulatory Authority of India

established under sub-section (1) of Section 3 of the

Telecom Regulatory Authority of India Act, 1997 (24

of 1997).

(2) The Central Government may, by notification in

the Official Gazette, delegate to the telegraph

authority all or any of its powers under the first

proviso to sub-section (1).

The exercise by the telegraph authority of any

power so delegated shall be subject to such

restrictions and conditions as the Central

Government may, by the notification, think fit to

impose.”

26. Sections 2(2) and 5 of the Indian Wireless Telegraphy

Act, 1933 are also set out hereinbelow:

“2(2) “wireless telegraphy apparatus” means any

apparatus, appliance, instrument or material used or

capable of use in wireless communication, and

includes any article determined by rule made under

Section 10 to be wireless telegraphy apparatus, but

does not include any such apparatus, appliance,

instrument or material commonly used for other

electrical purposes, unless it has been specially

designed or adapted for wireless communication or

forms part of some apparatus, appliance, instrument

or material specially so designed or adapted, nor

any article determined by rule made under Section

10 not to be wireless telegraphy apparatus;

xxx xxx xxx

5. Licenses.—The telegraph authority constituted

under the Indian Telegraph Act, 1885 (13 of 1885),

shall be the authority competent to issue licenses to

possess wireless telegraphy apparatus under this

Act, and may issue licenses in such manner, on

such conditions and subject to such payments as

may be prescribed.”

27. It is clear that only a person who is licensed under

Section 5 of the Indian Wireless Telegraphy Act can use a

teleport from India from which a TV channel is to be uplinked to

a satellite. Equally, to be uplinked to a satellite and thereafter

downlinked from such satellite to an MSO, permission would be

required from the Central Government. This would be clear

from a reading of the separate guidelines for uplinking and

downlinking channels issued by the Government of India.

28. So far as the uplinking guidelines are concerned, on

5.12.2011, the Ministry of Information and Broadcasting

(Broadcasting Wing) set out detailed conditions by which the

uplinking of TV channels may be made. Under Clause 5.9 of

the said guidelines, the Government of India shall have the right

to suspend the permission of a company for a specified period

in the public interest, or in the interest of national security, to

prevent misuse.

29. Similarly, insofar as the policy guidelines for downlinking

of TV channels is concerned, the Ministry has given detailed

guidelines of the same date, i.e., 5.12.2011. Among other

things, it is stated:-

“2.4. No News and Current Affairs channel shall be

permitted to be downlinked if it does not meet the

following additional conditions:

2.4.1. That it does not carry any advertisements

aimed at Indian viewers;

2.4.2. That it is not designed specifically for Indian

audiences;

2.4.3. That it is a standard international channel;

2.4.4. That it has been permitted to be telecast in the

country of its uplinking by the regulatory

authority of that country;

Provided that the Government may waive/modify

the condition under clause 2.4.1 on a case-by-case

basis.

xxx xxx xxx

5. BASIC CONDITIONS/OBLIGAT IONS

5.1. The Company permitted to downlink

registered channels shall comply with the

Programme and Advertising Code prescribed under

the Cable Television Networks (Regulation) Act,

1995.

5.2. The company shall ensure compliance of the

provisions of Sports Broadcasting Signals

(Mandatory sharing with Prasar Bharati) Act 11 of

2007 and the Rules, Guidelines, Notifications issued

thereunder.

5.3. The applicant company shall adhere to any

other Code/Standards guidelines/restrictions

prescribed by Ministry of Information &

Broadcasting, Government of India for regulation of

content on TV channels from time to time.

5.4. The applicant company shall submit audited

annual accounts of its commercial operations in

India.

5.5. The applicant company shall obtain prior

approval of the Ministry of Information and

Broadcasting before undertaking any upgradation,

expansion or any other changes in the downlinking

and distribution system/network configuration.

5.6. The applicant company shall provide Satellite

TV Channel signal reception decoders only to

MSO/Cable Operators registered under the Cable

Television Networks (Regulation) Act 1995 or to a

DTH operator registered under the DTH guidelines

issued by Government of India or to an Internet

Protocol Television (IPTV) Service Provider duly

permitted under their existing Telecom License or

authorized by Department of Telecommunications

or to a HITS operator duly permitted under the

policy guidelines for HITS operators issued by

Ministry of Information and Broadcasting,

Government of India to provide such service.

5.7. The applicant company shall ensure that any

of its channels, which is unregistered or prohibited

from being telecast or transmitted or re-transmitted

in India, under the Cable Television Networks

(Regulation) Act 1995 or the DTH guidelines or any

other law for the time being in force, cannot be

received in India through encryption or any other

means.

5.8. The Union Government shall have the right to

suspend the permission of the company/registration

of the channel for a specified period in public

interest or in the interest of National security to

prevent the misuse of the channel. The company

shall immediately comply with any direction issued

in this regard.

5.9. The applicant company seeking permission to

downlink a channel shall operationalise the

channels within one year from the date of the

permission being granted by the Ministry of

Information and Broadcasting failing which the

permission will liable to be withdrawn without any

notice in this regard. However, the company shall

be afforded a reasonable opportunity of being heard

before such a withdrawal.

5.10. The company/channel shall adhere to the

norms, rules and regulations prescribed by any

regulatory authority set up to regulate and monitor

the Broadcast Services in the country,

5.11. The applicant company shall give intimation to

Ministry of Information and Broadcasting regarding

change in the directorship, key executives or foreign

direct investment in the company, within 15 days of

such a change taking place. It shall also obtain

security clearance for such changes in its directors

and key executives.

5.12. The applicant company shall keep a record of

programmes downlinked for a period of 90 days and

to produce the same before any agency of the

Government as and when required.

5.13. The applicant company shall furnish such

information as may be required by the Ministry of

Information and Broadcasting from time to time.

5.14. The applicant company shall provide the

necessary monitoring facility at its own cost for

monitoring of programmes or content by the

representative of the Ministry of Information and

Broadcasting or any other Government agency as

and when required.

5.15. The applicant company shall comply with the

obligations and conditions prescribed in the

downlinking guidelines issued by the Ministry of

Information and Broadcasting, and the specific

downlinking permission agreement and registration

of each channel.

5.16. In the event of any war, calamity/national

security concerns, the Government shall have the

power to prohibit for a specified period the

downlinking/reception/transmission and re -

transmission of any or all channels. The Company

shall immediately comply with any such directions

issued in this regard.”

30. We are of the view that the provisions of the TRAI Act

have to be viewed in the light of protection of the interests of

both service providers and consumers. This being so, it is clear

that no constricted meaning can be given to the provisions of

this Act. It is important to remember that under Section

11(1)(a)(iv), one of the functions of the Authority, though

recommendatory, is to facilitate competition and promote

efficiency in the operation of telecommunication services (which

includes broadcasting services) so as to facilitate growth in

such services. What is also clear from Section 11(1)(b), is that

terms and conditions of interconnectivity between different

service providers have to be fixed, which necessarily includes

terms that relate not only to carriage simpliciter as submitted by

Dr. Singhvi, but to all terms and conditions of interconnectivity

between broadcaster, MSO, Cable TV operator and the

ultimate consumer, so as to ensure that the object of the Act is

carried out, namely, that both broadcasters and consumers get

a fair deal. Towards this end, Section 11(2) makes it clear that

the Authority may, from time to time, notify the rates at which

telecommunication services, including broadcasting services,

within India and outside India, shall be provided under this Act.

Dr. Singhvi argued that the literal language of this sub-section,

which would undoubtedly bring in rates laid down in the Tariff

Order, would have to be constricted by the language of the last

part of the provision, viz., “including the rates at which

messages shall be transmitted to any country outside India”.

We are afraid that this is against basic canons of construction,

as the expression “including” would only refer to a part of what

precedes the expression and cannot therefore constrict the part

that has gone before. The plain literal language of Section

11(2) makes it clear that rates at which broadcasting services

are offered within and outside India can be fixed by TRAI. It is

clear therefore that when rates are fixed after several rounds of

consultations between various service providers and

consumers, looking to the interest of each, it is impossible to

say that any broadcaster’s rights have been impinged upon.

Shri Dwivedi is absolutely right in saying that at no stage is

content of a TV channel sought to be regulated, and that pricing

relating to TV channels laid down in the Regulation and Tariff

Order is a balancing act between the rights of broadcasters and

the interests of consumers, which we may hasten to add has

not been impugned on the ground that any right or fundamental

right is violated, but only on the ground that the Regulation as

well as the Tariff Order are outside the “jurisdiction” of TRAI.

Dr. Singhvi’s argument on this score must therefore fail.

31. In fact, in Avishek Goenka v. Union of India, (2012) 5

SCC 275, this Court has already held:

“18. If one examines the powers and functions of

TRAI, as postulated under Section 11 of the Act, it

is clear that TRAI would not only recommend, to

DoT, the terms and conditions upon which a licence

is granted to a service provider but has to also

ensure compliance with the same and may

recommend revocation of licence in the event of

non-compliance with the regulations. It has to

perform very objectively one of its main functions

i.e. to facilitate competition and promote efficiency

in the operation of the telecommunication services,

so as to facilitate growth in such services. It is

expected of this regulatory authority to monitor the

quality of service and even conduct periodical

survey to ensure proper implementation.”

32. We must also hasten to add that the power under Section

36(1) of the Act is very wide and not constricted by the

provisions of Section 11, as was held in BSNL v. TRAI (supra.).

33. Equally, in Hotel & Restaurant Assn. v. Star India (P)

Ltd., (2006) 13 SCC 753, this Court has held:-

“24. Section 11 of the TRAI Act provides for the

functions of TRAI. Clause (a) of sub-section (1) of

Section 11 of the TRAI Act empowers TRAI to make

recommendations either suo motu or on the request

from the licensor, on the matters enumerated

therein. Clause (b) thereof empowers it inter alia to

fix the terms and conditions of interconnectivity

between the service providers.

25. Sub-section (2) of Section 11 of the TRAI Act

contains a non obstante clause providing

that TRAI may frame from time to time by order(s)

notified in the Official Gazette the rates at which the

telecommunication services within India and outside

India shall be provided under the said Act including

the rates at which messages shall be transmitted to

any country outside India. Proviso appended to sub-

section (2) thereof empowers TRAI to notify different

rates for different persons or class of persons for

similar telecommunication services and where

different rates are fixed as aforesaid TRAI shall

record the reasons therefor.

xxx xxx xxx

55. TRAI exercises a broad jurisdiction. Its

jurisdiction is not only to fix tariff but also laying

down terms and conditions for providing services.

Prima facie, it can fix norms and the mode and

manner in which a consumer would get the

services.

56. The role of a regulator may be varied. A

regulation may provide for cost, supply of service on

non-discriminatory basis, the mode and manner of

supply making provisions for fair competition

providing for a level playing field, protection of

consumers' interest, prevention of monopoly. The

services to be provided for through the cable

operators are also recognised. While making the

regulations, several factors are, thus required to be

taken into account. The interest of one of the

players in the field would not be taken into

consideration throwing the interest of others to the

wind.”

(Emphasis supplied.)

34. It is interesting to note, as has been stated by Shri

Dwivedi, that in Star India’s response to the consultative paper

of 29.1.2016, Star India itself has requested that the Regulation

and Tariff Order be fixed on the basis of the principles that are

now contained therein. For example, Star India’s response to

whether a reasonable wholesale price cap can be ensured for

mass genres, was as follows:-

“Reasonable wholesale price cap to be ensured

for the mass genres

• Channels need to be incentivized for creating

diverse and innovative content

• Incumbent flagship channels have been

suffering from legacy price and bouquet

freeze.

• All channels should earn fair share of

consumers’ ARPU.

• Our research findings reveal that basis current

ARPUs, share of viewership of flagship

channels, and existing revenue share of the

broadcasters in the addressable market, the

value attributed by the market to the flagship

channels is significantly more than the existing

wholesale list prices of these channels.

• Accordingly, the retail value ascribed to

flagship entertainment channels by

consumers, translate into a wholesale price of

Rs.11/- to Rs.28/-. For details refer to

Annexure A.

• Therefore, the wholesale cap should be

Rs.28/- to allow for optimum monetization of

the flagship channels. If the channel values

are allowed to be corrected basis consumer

demand the share of the channel in the

ARPUs shall be realigned to reflect their true

value proposition without leading to any

arbitrary or perverse price hikes. Further the

proposed discount cap will effectively

eliminate pricing distortions.

• However, in the interest of enabling a smooth

and seamless transition to full addressability

without creating any unnecessary chaos we

are proposing the following caps, in the

transition phase. Any lower cap will not only

stifle investments in innovative content but

also continue to restrict incumbent channels

whose rates were frozen in 2003-2004 from

realizing their real value.

Mass Genre Proposed

Price

Cap (Rs.)

General

Entertainment

(Hindi & Regional)

Movies (Hindi &

Regional)

Sports

12.00

10.00

18.00

• These caps should be subject to automatic

annual revision, basis inflation.”

While answering whether broadcasters should offer wholesale

discounts to distribution platform operators (hereinafter referred

to as a “DPO”) which should be transparently available as part

of the reference interconnect offer (hereinafter referred to as

“RIO”), Star India has stated:

“Wholesale discounts to be subject to a

maximum overall cap of 33%

• As explained above, there are wide variety of

parameters that a single broadcaster may

want to drive basis various business

requirements

• 33% discount will be sufficient to effectively

drive only a few business requirements

• Any discounting cap lower than 33% will

render the discounting structure

ineffective/unworkable.”

Similarly, so far as high definition channels are concerned, Star

India had this to say:

“1. HD channels offer a viewer experience that is

distinctly different from SD channels

- The production, transmission and re -

transmission of HD channels entail substantial

investments.

- HD channels offer distinctly superior audio and

video quality to the viewers through cutting

edge technology used right from shooting of

content, production, post -production,

transmission & re-transmission. For detailed

explanation refer to Annexure B.

- The consumption of HD channel requires

significant investment by the consumer in an

HD TV and HD set-top box. As such, these

channels are aspirational and for affluent

audiences who demand better content &

quality offering and have the capacity to pay

for it.

2. Price forbearance for HD channels should

continue

- HD channel can be subscribed by only those

subscribers who can afford specialized HD

set-top box as well as HD TV, which comes at

a premium.

- The HD channel market has witnessed a

robust growth and has allowed broadcasters to

invest in quality and innovative content. Over

the last four years market forces have enabled

the channels to discover their real prices and

desired penetration.

- This has been possible because of the

laudable decision of the Authority to keep HD

channels outside the regulatory purview. With

upcoming 3D, 4D and virtual reality it would

indeed be a regressive step if the Authority

were to now regulate HD channels thereby

sending out a negative signal to potential

investments in these technologies.

- Hence we recommend that the Authority

should continue to keep HD channels outside

the regulatory ambit.

- In order to protect the interest of subscribers

and to foster further growth in this segment,

we recommend that HD channels should

adhere to twin conditions and discounting caps

at the wholesale and retail.

- Discount on wholesale prices should be

capped at 33% to ensure a viable a-la-carte

fallback option for DPOs.

- Retail a-la-carte prices should be linked to

wholesale prices (same linkage multiplier as

used for SD channels).

- Discount at retail level also to be limited to

33% to ensure a viable a-la-carte fallback

option for consumer.

3. Bundling of HD and SD channels should not

be allowed, both at wholesale and retail levels.

4. Charging of access fee for HD channels

should not be allowed at retail level.

5. DPOs free to sell HD channels as a-la-carte as

well as bouquet(s) of HD channels.

6. Consumers and DPOs should have a choice

to subscribe to only HD channels or only SD

channels or both combined but purchased

separately.”

Equally, insofar as whether free to air and pay channel

bouquets are concerned, Star India itself stated that they

should not be bundled together thus:-

“FTA and Pay channels should not be bundled

together

- As has been highlighted in the Preamble, we

believe that FTA channels should be free to

consumer.

- Pay and FTA channels should not be bundled

in the same bouquet.

- The declaration of a-la-carte rate is only with

regard to pay channels, as per existing

regulations. Allowing a-la-carte pricing of FTA

channels is thus not in accordance with the

extent regulatory constructs.

- Pricing FTA channels at retail level and

bundling them with Pay channels leads to

price distortions by bloating the bouquet size

and price, which is not in consumer interest.

▪ Creating separate pay bouquets will ensure

consumers are provided true visibility of

pay channel pricing.”

35. It is only when TRAI issued a second consultation paper

dated 4.5.2016 that Star India submitted its response in June,

2016 where it raised for the first time the issue relating to the

that even in this response, Star India reiterated that discount

caps should be provided for as this checks discriminatory

behavior during negotiation and will facilitate designing of

discount criteria based on intelligible differentia which will help

serve the diverse needs of consumers. In a third response to

the draft regulations and tariff order, Star India raised

jurisdictional issues of TRAI.

36. Pursuant to these and other inputs, TRAI has in its

explanatory memorandum given reasons for the Tariff Order as

follows:-

“64. The Authority has noted that at present the

uptake of channels on a-la-carte basis is negligible

as compared to the bouquet subscriptions. Analysis

yields that the prime reason for such poor uptake of

a-la-carte channels is that the a-la-carte rates of

channels are disproportionately high as compared

to the bouquet rates and further, there is no well

defined relationship between these two rates. As

per data available with TRAI, some bouquets are

being offered by the distributors of television

channels at a discount of upto 80%-90% of the sum

of a-la-carte rates of pay channels constituting

those bouquets. These discounts are based on

certain eligibility criteria/conditions to be fulfilled by

the distributor of television channels in order to

avails those discounts from broadcasters. Such high

discounts force the subscribers to take bouquets

only and thus reduce subscriber choice. As a result,

while technically, a-la-carte rates of channels are

declared, these are illusive and subscribers are left

with no choice but to opt for bouquets. Bouquets

formed by the broadcasters contain only few

popular channels. The distributors of television

channels are often asked to take the entire bouquet

as otherwise they are denied the popular channels

altogether or given such popular channels at RIO

rates. To make the matters worse, the distributors of

television channels have to pay as if all the

channels in the bouquet are being watched by the

entire subscriber base, when in fact only the popular

channels will have high viewership. In such a

scenario, at the retail end, the distributors of

television channels somehow push these channels

to maximum number of subscribers so as to recover

costs. This marketing strategy based on bouquets

essentially results in ‘perverse pricing’ of bouquets

vis-à-vis the individual channels. As a result, the

customers are forced to subscribe to bouquets

rather than subscribing to a-la-carte channels of

their choice. Thus, in the process, the public, in

general, end up paying for “unwanted” channels and

this, in effect, restricts subscriber choice. Bundling

of large number of unwanted channels in bouquets

also result in artificial occupation of distributors'

network capacity. This acts as an entry barrier for

newer TV channels.

65. In order to facilitate subscribers to exercise their

options in line with intention of lawmakers to choose

individual channels, in the new framework the

broadcasters will declare to customers/subscribers

the MRP of their a-la-carte channels and bouquets

of pay channels. In order to ensure that prices of the

a-la-carte channels are kept reasonable, the

maximum discount permissible in formation of a

bouquet has been linked with the sum of the a-la-

carte prices of the of pay channels forming that

bouquet. A broadcaster can offer a maximum

discount of 15% while offering its bouquet of

channels over the sum of MRP of all the pay

channels in that bouquet so as to enable customer

choice through a-la-carte offering and also prevent

skewed a-la-carte and bouquet pricing (refer

example 1). The bouquet(s) offered by the

broadcasters to subscribers shall be provided by the

distributors of television channels to the subscribers

without any alteration in composition of the

bouquet(s). In case a broadcaster feels that more

discount can be provided in formation of the

bouquet, it indirectly means that a-la-carte prices at

the first stage has been kept high and there is a

need to revise such a-la-carte prices downwardly.

Full flexibility has been given to broadcasters to

declare price of their pay channels on a-la-carte

basis to correct such situations, if it may come.

66. Some stakeholders are of the opinion that

limiting the discount to subscribers while forming

bouquets is anti subscriber. In this regard, while the

Authority wants to facilitate the availability of a-la-

carte choice to customers/subscribers, it does not

intend to encroach upon the freedom of

broadcasters and distributors to do business. During

the discussions in the Parliament on the motion for

consideration of the Cable Television Networks

(Regulation) Amendment Bill, 2011, the then

Minister of Information and Broadcas ting

emphasised the need to establish a system for

subscribers to choose a-la-carte channels of choice.

The Authority has also made several attempts in

this regard, but for one or the other reason could not

succeed. Here it is important to understand that the

Authority has not been able to do pricing of

channels in the absence of pricing of content.

Present trends indicate that majority of channels are

priced much below the prevailing ceiling, but higher

ceilings were prescribed to give flexibility to

broadcasters to monetise their channels and

freedom to do business. Further, different channels

even in the same genre may have varying cost of

production and potential to monetise, but within the

framework. A broadcaster may price even non-

driver channels at a much higher value that they

can command. Non-discovery of reasonable price of

a channel in a market is one of the constraints that

can be manipulated and misused to price a channel

in a-la-carte from which is illusionary. Such high a-

la-carte prices permits broadcasters/distributors to

provide high discounts to push non-drivers channels

in form of bouquets to the subscribers while

reducing the probability of choosing the a-la-carte

channels of choice as required by the lawmakers in

the Parliament. The possibility to forcing bouquets

over a-la-carte choice by using higher discounts can

be further understood by following example, where

a broadcaster has a total of 35 pay channels out of

which only 5 are driver channels:

Channel Discount

75%

Discount

60%

Discount

45%

Discount

30%

Discount

15%

Channel 1 a-la-carte price 19 19 19 19 19

Channel 2 a-la-carte price 10 10 10 10 10

Channel 3 a-la-carte price 12 12 12 12 12

Channel 4 a-la-carte price 5 5 5 5 5

Channel 5 a-la-carte price 4 4 4 4 4

Sum of a-la-carte prices of 5

driver pay channels

50 50 50 50 50

Sum of a-la-carte prices of 30

non-driver pay channels (@

Re 1)

30 30 30 30 30

Total price of 35 a-la-carte

pay channels

80 80 80 80 80

Price of bouquet of 35 pay

channels (with discount on

sum of a-la-carte prices)

20 32 44 56 68

The above table clearly indicates that in case the

amount of discount offered by the broadcaster, over

the sum of a-la-carte prices of pay channels, while

forming the bouquet of those pay channels is very

high (75%), the price of bouquet becomes much

lower than the sum of a-la-carte prices to the extent

that it is almost equal to a-la-carte price of one

driver channel. Such amount of discount is anti

customer/subscriber as it discourages a-la-carte

selection of channels. As the amount of discount on

formation of bouquet decreases, the difference

between the prices of bouquet and the sum of a-la-

carte prices also decreases. In case the amount of

discount is fixed at 15%, the price of bouquet

becomes higher than the sum of a-la-carte prices of

driver channels; thereby encouraging a subscriber

to choose a-la-carte channels of his choice.

67. In the present regulatory framework incidences

have come to the knowledge where discount upto

90% on the declared RIO prices has been given by

broadcasters. Obviously such efforts kill competition

and reduce a-la-carte choice which is anti-

subscriber. Accordingly, the Authority has

prescribed a discount of 15% to be provided by

broadcasters at wholesale level and further 15% to

be provided by distributors at retail level. The net

effect to subscribers at retail level will be a discount

of approximately 30% on the bouquets of channels.

Therefore flexibility of formation of bouquet has

been given to broadcasters and MSOs both to such

an extent that total permissible discount does not kill

the a-la-carte choice. The Authority has been

careful in prescribing a framework which does not

encourage non-driver channel to be pushed to

subscribers against their choice. Non-driver

channels which are provided as part of bouquets

not only kill choice of the ala-carte channels but also

eat away the channel carrying capacity available

with distributors which may result in artificial

capacity constraints at distribution platforms for

launch of new/com petitive channels. Such

restrictions are anti-subscriber and have to be

carefully handled. Accordingly, the Authority has

consciously decided the present framework of

prescribing relationship between a-la-carte and

bouquet prices to protect interest of

customers/viewers and as well as those of service

providers. However, the Authority will keep a watch

on the developments in the market and may review

the maximum permissible discount while offering a

bouquet, in a time period of about two years.

68. A broadcaster is free to offer its pay channels in

the form of bouquet(s) to customers. While

subscribing to bouquet, a customer may not be

aware of the price of each channel forming the

bouquet. Abnormal high price of a pay channel may

result in higher price of a bouquet leading to

adverse impact on subscribers' interests. It is an

established fact that bundling of channels

complicates and obscures their pricing. Prices are

obscured because subscribers do not always

understand the relationship between the bundle

price and a price for each component. However, the

bundling of channels offers convenience to the

subscribers as well as services providers in

subscription management. Keeping in view these

realties and to protect the interests of subscribers,

the Authority has prescribed a ceiling of Rs. 19/- on

the MRP of pay channels which can be provided as

part of a bouquet. Therefore, any pay channel

having MRP of more than Rs. 19/- cannot become

part of any bouquet. The amount of Rs. 19/- has

been prescribed keeping in view the prevailing

highest genre wise ceilings of Rs. 15.12 for all

addressable systems between broadcaster & DPOs

at wholesale level and further enhancing it 1.25

times to account for DPOs distribution fee.

Broadcasters also have complete freedom to price

their pay channels which do not form part of any

bouquet and offered only on a-la-carte basis.

Similar conditions will also be applicable to DPOs

for formation of the bouquets. However, the

Authority will keep a watch on the developments in

the market and may review the manner in which a

channel can be provided as part of a bouquet, in a

time period of about two years.”

(Emphasis supplied.)

37. It can thus be seen that both the Regulation as well as the

Tariff Order have been the subject matter of extensive

discussions between TRAI, all stake holders and consumers,

pursuant to which most of the suggestions given by the

broadcasters themselves have been accepted and incorporated

into the Regulation and the Tariff Order. The Explanatory

Memorandum shows that the focus of the Authority has always

been the provision of a level playing field to both broadcaster

and subscriber. For example, when high discounts are offered

for bouquets that are offered by the broadcasters, the effect is

that subscribers are forced to take bouquets only, as the a-la-

carte rates of the pay channels that are found in these

bouquets are much higher. This results in perverse pricing of

bouquets vis-à-vis individual pay channels. In the process, the

public ends up paying for unwanted channels, thereby blocking

newer and better TV channels and restricting subscribers’

choice. It is for this reason that discounts are capped. While

doing so, however, full flexibility has been given to broadcasters

to declare the prices of their pay channels on an a-la-carte

basis. The Authority has shown that it does not encroach upon

the freedom of broadcasters to arrange their business as they

choose. Also, when such discounts are limited, a subscriber

can then be free to choose a-la-carte channels of his choice.

Thus, the flexibility of formation of a bouquet, i.e., the choice of

channels to be included in the bouquet together with the

content of such channels, is not touched by the Authority. It is

only efforts aimed at thwarting competition and reducing a-la-

carte choice that are, therefore, being interfered with. Equally,

when a ceiling of INR 19 on the maximum retail price of pay

channels which can be provided as a part of a bouquet is fixed

by the Authority, the Authority’s focus is to be fair to both the

subscribers as well as the broadcasters. INR 19 is an

improvement over the erstwhile ceiling of INR 15.12 fixed by

the earlier regulation which nobody has challenged. To

maintain the balance between the subscribers’ interests and

broadcasters’ interests, again the Authority makes it clear that

broadcasters have complete freedom to price channels which

do not form part of any bouquet and are offered only on an a-la-

carte basis. As market regulator, the Authority states that the

impugned Regulation and Tariff Order are not written in stone

but will be reviewed keeping a watch on the developments in

the market. We are, therefore, clearly of the view that the

Regulation and the Tariff Order have been made keeping the

interests of the stakeholders and the consumers in mind and

are intra vires the regulation power contained in Section 36 of

the TRAI Act. Consequently, we agree with the conclusion of

the learned Chief Justice and the third learned Judge of the

Madras High Court that these writ petitions deserve to be

dismissed.

38. Since submissions have been made by Dr. Singhvi on the

reach of various other Acts, it is a little important to deal with

the same.

39. Dr. Singhvi relied heavily upon the Sports Act. The

Statement of Objects and Reasons of this Act makes it clear

that the distribution of broadcasting signals of sporting events of

public interest is not disseminated to persons who do not have

access to satellite and Cable TV, most of whom are in rural

areas. Since the downlinking and uplinking policy guidelines of

the Government have been challenged in courts as lacking

statutory sanction, it has become necessary that sporting

events of national importance reach the general public on a free

to air basis. It is for this reason that the definitions of

“broadcaster”, “broadcasting”, etc. refer to content. The

following are certain relevant terms as defined under the Sports

Act:

“2.(1)(a) “broadcaster” means any person who

provides a content broadcasting service and

includes a broadcasting network service provider

when he manages and operates his own television

or radio channel service;

(b) “broadcasting” means assembling and

programming any form of communication content,

like signs, signals, writing, pictures, images and

sounds, and either placing it in the electronic form

on electro-magnetic waves on specified frequencies

and transmitting it through space or cables to make

it continuously available on the carrier waves, or

continuously streaming it in digital data form on the

computer networks, so as to be accessible to single

or multiple users through receiving devices either

directly or indirectly; and all its grammatical

variations and cognate expressions;

programming and placing communication content in

electronic form on the electro-magnetic waves on

specified frequencies and transmitting it

continuously through broadcasting network or

networks so as to enable all or any of the multiple

users to access it by connecting their receiver

devices to their respective broadcasting networks

and includes the content broadcasting services and

the broadcasting network services;

(d) “broadcasting networks service” means a

service, which provides a network of infrastructure

of cables or transmitting devices for carrying

broadcasting content in electronic form on specified

frequencies by means of guided or unguided

electro-magnetic waves to multiple users, and

includes the management and operation of any of

the following:

(i) Teleport/Hub/Earth Station;

(ii) Direct-to-Home (DTH) Broadcasting

Network,

(iii) Multi-system Cable Television Network,

(iv) Local Cable Television Network,

(v) Satellite Radio Broadcasting Network,

(vi) any other network service as may be

prescribed by the Central Government;

xxx xxx xxx

(h) “content” means any sound, text, data, picture

(still or moving), other audio-visual representation,

signal or intelligence of any nature or any

combination thereof which is capable of being

created, processed, stored, retrieved or

communicated electronically;

(i) “content broadcasting service” means the

assembling, programming and placing content in

electronic form and transmitting or retransmitting the

same on electro-magnetic waves on specified

frequencies, on a broadcasting network so as to

make it available for access by multiple users by

connecting their receiving devices to the network,

and includes the management and operation of any

of the following:

(i) terrestrial television service,

(ii) terrestrial radio service,

(iii) satellite television service,

(iv) satellite radio service,

(v) cable television channel service,

(vi) community radio service,

(vii) any other content broadcasting services

as may be prescribed by the Central

Government.”

The heart of the Sports Act is contained in Sections 3 and 5

thereof, which state as follows:-

“3. Mandatory sharing of certain sports

broadcasting signals.—(1) No content rights

owner or holder and no television or radio

broadcasting service provider shall carry a live

television broadcast on any cable or Direct-to-Home

network or radio commentary broadcast in India of

sporting events of national importance, unless it

simultaneously shares the live broadcasting signal,

without its advertisements, with the Prasar Bharati

to enable them to re-transmit the same on its

terrestrial networks and Direct-to-Home networks in

such manner and on such terms and conditions as

may be specified.

(2) The terms and conditions under sub-section (1)

shall also provide that the advertisement revenue

sharing between the content rights owner or holder

and the Prasar Bharati shall be in the ratio of not

less than 75:25 in case of television coverage and

50:50 in case of radio coverage.

(3) The Central Government may specify a

percentage of the revenue received by the Prasar

Bharati under sub-section (2), which shall be utilised

by the Prasar Bharati for broadcasting other

sporting events.

xxx xxx xxx

5. Power of the Central Government to issue

Guidelines.—The Central Government shall take

all such measures, as it deems fit or expedient, by

way of issuing Guidelines for mandatory sharing of

broadcasting signals with Prasar Bharati relating to

sporting events of national importance:

Provided that the Guidelines issued before the

promulgation of the Sports Broadcasting Signals

(Mandatory Sharing with Prasar Bharati) Ordinance,

2007 (Ord. 4 of 2007) shall be deemed to have

been issued validly under the provision of this

section.”

40. Shri Dwivedi is therefore right that the object of the Sports

Act has nothing to do with the validity of the Regulation and

Tariff Order made by TRAI under the TRAI Act. Content is

referred to in the Sports Act only for the reason stated in the

Objects and Reasons. Secondly, as has correctly been argued

by Shri Dwivedi and as has been held by us above, the TRAI

Act, as well as the Regulation and Tariff Order, do not in any

manner affect the content of the TV channels that are

broadcast by the broadcasters in these cases.

41. Dr. Singhvi then relied upon the Cable TV Act as follows:

“2.(a-i) “Authority” means the Telecom Regulatory

Authority of India established under sub-section (1)

of Section 3 of the Telecom Regulatory Authority of

India Act, 1997 (24 of 1997);

(a-ii) “Broadcaster” means a person or a group of

persons, or body corporate, or any organisation or

body providing programming services and includes

his or its authorised distribution agencies;

(a-iii) “cable operator” means any person who

provides cable service through a cable television

network or otherwise controls or is responsible for

the management and operation of a cable television

network and fulfils the prescribed eligibility criteria

and conditions;

(b) “cable service” means the transmission by

cables of programmes including re-transmission by

cables of any broadcast television signals;

consisting of a set of closed transmission paths and

associated signal generation, control and

distribution equipment, designed to provide cable

service for reception by multiple subscribers;

xxx xxx xxx

4-A. (3) If the Central Government is satisfied that it

is necessary in the public interest so to do, and if

not otherwise specified by the Authority, it may

direct the Authority to specify, by notification in the

Official Gazette, one or more free-to-air channels to

be included in the package of channels forming

basic service tier and any one or more such

channels may be specified, in the notification,

genre-wise for providing a programme mix of

entertainment, information, education and such

other programmes and fix the tariff for basic service

tier which shall be offered by the cable operators to

the consumers and the consumer shall have the

option to subscribe to any such tier:

Provided that the cable operator shall also offer the

channels in the basic service tier on a la carte basis

to the subscriber at a tariff specified under this sub-

section.

(4) The Central Government or the Authority may

specify in the notification referred to in sub-section

(3), the number of free-to-air channels to be

included in the package of channels forming basic

service tier for the purposes of that sub-section and

different numbers may be specified for different

States, cities, towns or areas, as the case may be.

xxx xxx xxx

Explanation.—For the purposes of this section—

(a) “addressable system” means an electronic

device (which includes hardware and its

associated software) or more than one

electronic device put in an integrated system

through which signals of cable television

network can be sent in encrypted form, which

can be decoded by the device or devices,

having an activated Conditional Access

System at the premises of the subscriber

within the limits of authorisation made,

through the Conditional Access System and

the subscriber management system, on the

explicit choice and request of such subscriber,

by the cable operator to the subscriber;

(b) “basic service tier” means a package of

free-to-air channels to be offered by a cable

operator to a subscriber with an option to

subscribe, for a single price to subscribers of

the area in which his cable television network

is providing service;

television network, means the changing of

such signal in a systematic way so that the

signal would be unintelligible without use of an

addressable system and the expression

“unencrypted” shall be construed accordingly;

(d) “free-to-air channel”, in respect of a cable

television network, means a channel for which

no subscription fee is to be paid by the cable

operator to the broadcaster for its re-

transmission on cable;

(e) “pay channel”, in respect of a cable

television network, means a channel for which

subscription fees is to be paid to the

broadcaster by the cable operator and due

authorisation needs to be taken from the

broadcaster for its re-transmission on cable;

(f) “subscriber management system” means a

system or device which stores the subscriber

records and details with respect to name,

address and other information regarding the

hardware being utilised by the subscriber,

channels or bouquets of channels subscribed

to by the subscriber, price of such channels or

bouquets of channels as defined in the

system, the activation or deactivation dates

and time for any channel or bouquets of

channels, a log of all actions performed on a

subscriber's record, invoices raised on each

subscriber and the amounts paid or discount

allowed to the subscriber for each billing

period.

xxx xxx xxx

5. Programme code.—No person shall transmit or

re-transmit through a cable service any programme

unless such programme is in conformity with the

prescribed programme code:

[***]”

42. He then referred to Rule 6 of the Cable Television

Networks Rules, 1994, as follows:-

“6. Programme Code. –

(1) No programme should be carried in the cable

service which:-

(a) Offends against good taste or decency:

(b) Contains criticism of friendly countries;

communities or visuals or words

contemptuous of religious groups or which

promote communal attitudes;

(d) Contains anything obscene, defamatory,

deliberate, false and suggestive innuendos

and half truths;

(e) Is likely to encourage or incite violence or

contains anything against maintenance of law

and order or which promote-anti-national

attitudes;

(f) Contains anything amounting to contempt

of court;

(g) Contains aspersions against the integrity

of the President and Judiciary;

(h) Contains anything affecting the integrity of

the Nation;

(i) Criticises, maligns or slanders any

individual in person or certain groups,

segments of social, public and moral life of the

country ;

(j) Encourages superstition or blind belief;

(k) Denigrates women through the depiction in

any manner of the figure of a women, her form

or body or any part thereof in such a way as to

have the effect of being indecent, or

derogatory to women, or is likely to deprave,

corrupt or injure the public morality or morals;

(l) Denigrates children;

(m) Contains visuals or words which reflect a

slandering, ironical and snobbish attitude in

the portrayal of certain ethnic, linguistic and

regional groups;

(n) Contravenes the provisions of the

Cinematograph Act, 1952.

(o) is not suitable for unrestricted public

exhibition

Provided that no film or film song or film promo or

film trailer or music video or music albums or their

promos, whether produced in India or abroad, shall

be carried through cable service unless it has been

certified by the Central Board of Film Cetification

(CBFC)) as suitable for unrestricted public exhibition

in India.

Explanation – For the purpose of this clause, the

expression “unrestricted public exhibition” shall

have the same meaning as assigned to it in the

Cinematograph Act, 1952 (37 of 1952);

(2) The cable operator should strive to carry

programmes in his cable service which project

women in a positive, leadership role of sobriety,

moral and character building qualities.

(3) No cable operator shall carry or include in his

cable service any programme in respect of which

(14 of 1972) unless he has been granted a licence

by owners of copyright under the Act in respect of

such programme.

(4) Care should be taken to ensure that

programmes meant for children do not contain any

bad language or explicit scenes of violence.

(5) Programmes unsuitable for children must not be

carried in the cable service at times when the

largest numbers of children are viewing.

(6) No cable operator shall carry or include in his

cable service any television broadcast or channel,

which has not been registered by the Central

Government for being viewed within the territory of

India

PROVIDED that a cable operator may continue to

carry or include in his cable service any Television

broadcast or channel, whose application for

registration to the Central Government was made

on or before 11th May, 2006 and is under

consideration, for a period upto 31st May, 2008 or

till such registration has been granted or refused,

whichever is earlier

PROVIDED further that channels uplinking from

India, in accordance permission for uplinking

granted before 2nd December, 2005, shall be

treated as registered television channels and can be

carried or included in the cable service.”

43. The argument of Dr. Singhvi is that since this Act

regulates content downstream from the Cable TV operator to

the consumer, its absence in the TRAI Act is eloquent

testimony to the fact that content cannot be the subject matter

of the TRAI Act. As has been held by us hereinabove, the

same answer must obtain, namely, that this Act is also

irrelevant in the present case as the TRAI Act does not, as has

been held by us above, regulate the content of the TV channels

that are broadcasted by the broadcaster.

44. The main thrust of the arguments of both Dr. Singhvi and

Mr. Chidambaram were also by copious reference to the

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once the Copyright Act steps in, TRAI must necessarily step

out. They referred to certain provisions of this Act stage-wise.

The Copyright Act, 1957 as originally enacted stated in its

Objects and Reasons that: “it is necessary to enact an

independent self-contained law on the subject of copyright in

the light of growing public consciousness of the rights and

obligations of authors and in the light of experience gained in

the working of the existing law during the last forty years. New

and advanced means of communications like broadcasting,

litho-photography, etc., also call for certain amendments in the

existing law”, as a result of which certain rights akin to copyright

are conferred on broadcasting authorities in respect of

programmes broadcast by them. In this Act, as originally

enacted, Section 2(v) defined “radio-diffusion” as follows:

“2(v). “radio-diffusion” includes communication to

the public by any means of wireless diffusions

whether in the form of sounds or visual images or

both.”

101

45. Section 37, as originally enacted, recognised a broadcast

reproduction right by radio-diffusion only by the Government or

any other Authority of Government as follows:

“37. Broadcast Reproduction Right

(1) Where any programme is broadcast by radio-

diffusion by the Government or any other

broadcasting authority, a special right to be known

as “broadcast reproduction right” shall subsist in

such programme.

(2) The Government or other broadcasting

authority, as the case may be, shall be the owner of

the broadcast reproduction right and such right shall

subsist until twenty-five years from the beginning of

the calendar year next following the year in which

the programme is first broadcast.

(3) During the continuance of a broadcast

reproduction right in relation to any programme, any

person, who,-

(a) without the licence of the owner of the

right-

(i) rebroadcasts the programme in

question or any substantial part thereof

(ii) causes the programme in question

or any substantial part thereof to be

heard in public; or

(b) without the licence of the owner of the

right to utilise the broadcast for the purpose of

making a record recording the programme in

question or any substantial part thereof,

102

makes any such record, shall be deemed to

infringe the broadcast reproduction right.”

46. Section 38, as originally enacted prescribed as under :

“38. Other provisions of this Act to apply to

broadcast reproduction rights.

(1) Sections 18, 19, 30, 53, 55, 58, 64, 65 and 66

shall, with any necessary adaptations and

modifications, apply in relation to the broadcast

reproduction right in any programme as they apply

in relation to the copyright in a work :

xxx xxx xxx”

47. Sections 18 and 19 of the Copyright Act deal with

assignment of copyright and royalty or other consideration

payable to the owner for such assignment. Section 30 of the

48. By the 1983 amendment to the Copyright Act, Section

2(v) defining radio-diffusion was deleted and instead Section

2(dd) was inserted defining “broadcast” as follows:

“2(dd). “broadcast” means communication to the

public –

103

(i) By means of wireless diffusion, whether in

any one or more of the forms or signs, sounds

or visual images; or

(ii) By wire,

and includes re-broadcast.”

49. Section 2(ff) was also inserted, defining “communication

to the public” as follows:

“2(ff) “communication to the public” means

communication to the public in whatever manner,

including communication through satellite.”

50. Consequently, Section 37 was also amended so as to

replace the expression “radio-diffusion” with the expression

“broadcast”.

51. In 1994, consequent to treaty obligations imposed upon

India, broadcast reproduction rights were expanded to include

private broadcasting organisations. The Statement of Objects

and Reasons for the aforesaid amendment made it clear that:

“… The law relating to copyright and related rights

has been under comprehensive review of the

Government for some time, taking into account the

difficulties expressed by different groups of

from the administration of the existing law and the

104

situation created by various technological

developments that have taken place.

2. The Copyright Act, 1957 amended and

consolidated the law relating to copyright in India. It

was further amended by the Copyright

(Amendment) Acts of 1983 and 1984 and certain

improvements were effected. By the Copyright

further extended by a period of ten years. Now, it is

considered appropriate to further amend the

provisions of the Copyright Act, 1957-

xxx xxx xxx

to further clarify the law in respect of cable,

satellite and other means of simultaneous

communication of works to more than one

household or private place of residence,

including the residential rooms of a hotel or

hostel.

xxx xxx xxx

to further improve the functioning of the

to simplify and improve the law relating to

the general public, and in particular of the

users as well as the owners of such rights.”

52. Section 2(ff) defining “communication to the public” was

substituted with a more comprehensive definition as follows:

“2(ff) “communication to the public” means making

any work available for being seen or heard or

otherwise enjoyed by the public directly or by any

105

means of display or diffusion other than by issuing

copies of such work regardless of whether any

member of the public actually sees, hears or

otherwise enjoys the work so made available.

Explanation: For the purpose of this clause,

communication through satellite or cable or any

other means of simultaneous communication to

more than one household or place of residence

including residential rooms or any hotel or hostel

shall be deemed to be communication to the public.”

53. Section 37 was entirely recast as follows :

“37. Broadcast reproduction right. - (1) Every

broadcasting organisation shall have a special right

to be known as ‘‘broadcast reproduction right’’ in

respect of its broadcasts.

(2) The broadcast reproduction right shall subsist

until twenty-five years from the beginning of the

calendar year next following the year in which the

broadcast is made.

(3) During the continuance of a broadcast

reproduction right in relation to any broadcast, any

person who without the licence of the owner of the

right does any of the following acts of the broadcast

or any substantial part thereof, -

(a) re-broadcasts the broadcast; or

(b) causes the broadcast to be heard or seen

by the public on payment of any charges; or

recording of the broadcast; or

(d) makes any reproduction of such sound

recording or visual recording where such initial

106

recording was done without licence or, where

it was licensed, for any purpose not envisaged

by such licence; or

(e) sells or hires to the public, or offers for

such sale or hire, any such sound recording or

visual recording referred to in clause (c) or

clause (d),

shall, subject to the provisions of section 39, be

deemed to have infringed the broadcast

reproduction right.”

54. Section 38 was substituted with a new Section 39A as

follows:

“39A. Other provisions applying to broadcast

reproduction right and performer’s right.

(1) Sections 18, 19, 30, 53, 55, 58, 64, 65 and 66

shall, with any necessary adaptations and

modifications, apply in relation to the broadcast

reproduction right in any broadcast and the

performers’ right in any performance as they apply

in relation to copyright in a work:

xxx xxx xxx”

55. Sections 33 and 33A, which have been relied upon by the

learned counsel for the appellants, read as follows:

“33. Registration of copyright society.— (1) No

person or association of persons shall, after coming

commence or, carry on the business of issuing or

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granting licences in respect of any work in which

conferred by this Act except under or in accordance

with the registration granted under sub-section (3):

Provided that an owner of copyright shall, in his

individual capacity, continue to have the right to

grant licences in respect of his own works

consistent with his obligations as a member of the

registered copyright society:

Provided further that the business of issuing or

granting licence in respect of literary, dramatic,

musical and artistic works incorporated in a

cinematograph films or sound recordings shall be

carried out only through a copyright society duly

registered under this Act:

Provided also that a performing rights society

functioning in accordance with the provisions of

Section 33 on the date immediately before the

coming into force of the Copyright (Amendment)

for the purposes of this Chapter and every such

society shall get itself registered within a period of

one year from the date of commencement of the

(2) Any association of persons which fulfils such

conditions as may be prescribed may apply for

permission to do the business specified in sub-

section (1) to the Registrar of Copyrights who shall

submit the application to the Central Government.

(3) The Central Government may, having regard to

the interests of the authors and other owners of

rights under this Act, the interest and convenience

of the public and in particular of the groups of

persons who are most likely to seek licences in

respect of the relevant rights and the ability and

108

professional competence of the applicants, register

such association of persons as a copyright society

subject to such conditions as may be prescribed:

Provided that the Central Government shall not

ordinarily register more than one copyright society

to do business in respect of the same class of

works.

(3-A) The registration granted to a copyright society

under sub-section (3) shall be for a period of five

years and may be renewed from time to time before

the end of every five years on a request in the

prescribed form and the Central Government may

renew the registration after considering the report of

Registrar of Copyrights on the working of the

Provided that the renewal of the registration of a

collective control of the copyright society being

shared with the authors of works in their capacity as

owners of copyright or of the right to receive royalty:

Provided further that every copyright society already

registered before the coming into force of the

registered under this Chapter within a period of one

year from the date of commencement of the

(4) The Central Government may, if it is satisfied

that a copyright society is being managed in a

manner detrimental to the interest of the authors

and other owners of right concerned, cancel the

registration of such society after such inquiry as

may be prescribed.

(5) If the Central Government is of the opinion that

in the interest of the authors and other owners of

right concerned or for non-compliance of Section

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33-A, sub-section (3) of Section 35 and Section 36

or any change carried out in the instrument by

which the copyright society is established or

incorporated and registered by the Central

Government without prior notice to it, it is necessary

so to do, it may, by order, suspend the registration

of such society pending inquiry for such period not

exceeding one year as may be specified in such

order under sub-section (4) and that Government

shall appoint an administrator to discharge the

functions of the copyright society.

33A. Tariff scheme by copyright societies.— (1)

Every copyright society shall publish its tariff

scheme in such manner as may be prescribed.

(2) Any person who is aggrieved by the tariff

scheme may appeal to the Appellate Board and the

Board may, if satisfied after holding such inquiry as

it may consider necessary, make such orders as

may be required to remove any unreasonable

element, anomaly or inconsistency therein:

Provided that the aggrieved person shall pay to the

has fallen due before making an appeal to

the Appellate Board and shall continue to pay such

fee until the appeal is decided, and the Board shall

not issue any order staying the collection of such

fee pending disposal of the appeal:

Provided further that the Appellate Board may after

hearing the parties fix an interim tariff and direct the

aggrieved parties to make the payment accordingly

pending disposal of the appeal.”

56. Equally, Section 39, as substituted by the amending Act

of 1994, reads as follows:

110

“39. Acts not infringing broadcast reproduction

right or performer's right.— No broadcast

reproduction right or performer's right shall be

deemed to be infringed by—

(a) the making of any sound recording or

visual recording for the private use of the

person making such recording, or solely for

purposes of bona fide teaching or research; or

(b) the use, consistent with fair dealing, of

excerpts of a performance or of a broadcast in

the reporting of current events or for bona fide

review, teaching or research; or

adaptations and modifications, which do not

constitute infringement of copyright under

Section 52.”

57. The 2012 amendment to the Copyright Act was relied

upon and placed with great emphasis by learned counsel

appearing on behalf of the appellants. The Statement of

Objects and Reasons of this amendment Act stated as follows :

“The Copyright Act, 1957 was enacted to amend

and consolidate the law relating to copyrights in

India. To meet with the national and international

requirements and to keep the law updated, the Act

has been amended five times since then, once each

in the years 1983, 1984, 1992, 1994 and 1999. The

1994 amendment was a major one which

harmonized the provisions of the Act with the Rome

Convention, 1961 by providing protection to the

rights of performers, producers of phonographs and

111

broadcasting organizations. It also introduced the

concept of registration of Copyright Societies for

collective management of the rights in each

category of copyrighted works. The last amendment

in 1999 introduced a few minor changes to copy

with the obligations under the Trade Related

Aspects of Intellectual Property Rights (TRIPS).

2. The Act is now proposed to be amended with

the object of making certain changes for clarity, to

remove operational difficulties and also to address

certain newer issues that have emerged in the

context of digital technologies and the Internet. The

two World Intellectual Property Organisation (WIPO)

Internet Treaties, namely, WIPO Copyright Treaty

(WCT), 1996 and WIPO Performances and

Phonograms Treaty (WPPT), 1996 have set the

international standards in these spheres. The WCT

and the WPPT were negotiated in 1996 to address

the challenges posed to the protection of Copyrights

and Related Rights by digital technology,

particularly with regard to the dissemination of

protected material over digital networks such as the

Internet. The member countries of the WIPO

agreed on the utility of having the Internet treaties in

the changed global technical scenario and adopted

them by consensus. In order to extend protection of

such as internet and other computer networks in

respect of literary, dramatic, musical and artistic

works, cinematograph films and sound recordings

works of performers, it is proposed amend the Act

to harmonise with the provisions of the two WIPO

Internet Treaties, to the extent considered

necessary and desirable. The WCT deals with the

protection for the authors of literary and artistic

works such as writings, computer programmes;

original databases; musical works; audiovisual

works; works of fine art and photographs. The

112

WPPT protects certain “related rights” which are the

rights of the performers and producers of

phonograms. However, India has not yet signed the

above-mentioned two treaties. Moreover, the main

object to make amendments to the Act is that it is

considered that in the knowledge society in which

we live today, it is imperative to encourage creativity

for promotion of culture of enterprise and innovation

so that creative people realize their potential and it

is necessary to keep pace with the challenges for a

fast growing knowledge and modern society.

xxx xxx xxx

(xvii) make provision for formulation of a tariff

scheme by the copyright societies subject to

scrutiny by the Copyright Board.”

58. By this amendment, Section 2(ff) defining “communication

to the public” was replaced as follows:-

“2(ff) “communication to the public” means making

any work or performance available for being seen or

heard or otherwise enjoyed by the public directly or

by any means of display or diffusion other than by

issuing physical copies of it, whether simultaneously

or at places and times chosen individually,

regardless of whether any member of the public

actually sees, hears or otherwise enjoys the work or

performance so made available.

Explanation: For the purposes of this clause,

communication through satellite or cable or any

other means of simultaneous communication to

more than one household or place of residence

including residential rooms or any hotel or hostel

shall be deemed to be communication to the public.”

113

59. Certain amendments were made to Section 37(3)(e).

Section 39A was amended to extend the provisions of Sections

33 and 33A to owners of the broadcast reproduction rights as

follows:-

“39A. Other provisions applying to broadcast

reproduction right and performer’s right.

(1) Sections 18, 19, 30, 30A, 33, 33A, 34, 35, 36,

53, 55, 58, 63, 64, 65, 65A, 65B and 66 shall, with

any necessary adaptations and modifications, apply

in relation to the broadcast reproduction right in any

broadcast and the performers’ right in an y

performance as they apply in relation to copyright in

a work.

xxx xxx xxx”

60. A reading of the aforesaid provisions, according to the

learned Senior Advocates for the appellants, makes it clear that

broadcasters may, in fact, be the owners of the original

produced a serial. They may also be the copyright owners of

the broadcast of this serial which is a separate right under the

broadcast of what has already been copyrighted, this again is

114

protected by Chapter VIII of the Copyright Act. The argument,

therefore, is that content that is carried by transmission from the

broadcasters to the ultimate consumer is, therefore, regulated

only by the Copyright Act and any royalties that can be charged

for exploitation of the three rights as aforesaid are governed

only by the Copyright Act. Further, the right to band

themselves into a society is by virtue of Section 33, which

mutatis mutandis applies to broadcasters alone. The tariff,

therefore, that may be charged under Section 33A of the

nothing but compensation that is payable to broadcasters for

parting with their copyright in the manner indicated above.

This being the case, when TRAI fixes rates and/or interferes

with content, it is trespassing into the exclusive domain set out

by Parliament under the Copyright Act. Since the TRAI Act

and the Copyright Act, both being Acts passed by Parliament,

have to be harmonised, such harmony can only be maintained

if TRAI is kept out altogether from the domain covered by the

115

relied upon the observations contained in Entertainment

Network (India) Ltd. v. Super Cassette Industries Ltd.,

(2008) 13 SCC 30, in which this Court explained as under:

“125. Are the terms “royalty” and “compensation”

not synonymous? “Royalty” means the

remuneration paid to an author in respect of the

exploitation of a work, usually referring to payment

on a continuing basis (e.g. 10% of the sale price)

rather than a payment consisting of a lump sum in

consideration of acquisition of rights. It may also be

applied to payment to performers. [See World

126. The word “compensation”, however, must have

been used keeping in view the fact that if it is a

statutory grant; it is a case of statutory licence. We

are not unmindful of the fact in cases of other

statutory licences, the word “royalty” has been used.

Even the word “usually” has been used. Mr Divan

himself has referred to Rule 11-A and Form II-A

appended to the Rules of 1958. Clauses (10) and

(11) of the form which have validly been made used

the word “royalty”.

“10. Rate of royalty, which the applicant

considers reasonable, to be paid to the

11. Means of the applicant for payment of the

royalty.”

127. The legislature therefore for all intent and

purport equates “compensation” with “royalty”. In

the context of the Act, royalty is a genus and

compensation is a species. Where a licence has to

be granted, it has to be for a period. A

116

“compensation” may be paid by way of annuity. A

“compensation” may be held to be payable on a

periodical basis, as apart from the compensation,

other terms and conditions can also be imposed.

The compensation must be directed to be paid with

certain other terms and conditions which may be

imposed.”

61. Rule 56 of the Copyright Rules, 2013, also relied upon, is

set out hereunder:

“56. Tariff Scheme.— (1) As soon as may be, but

in no case later than three months from the date on

which a copyright society has become entitled to

commence its copyright business, it shall frame a

scheme of tariff to be called the “Tariff Scheme”

under section 33A of the Act setting out the nature

and quantum of royalties which it proposes to

collect in respect of the right or the set of rights in

the specific categories of works administered by it.

(2) Every copyright society shall display its Tariff

Scheme by posting it on its website.

(3) The Tariff Scheme shall indicate the separate

rates for-

(a) different categories of users;

(b) different media of exploitation, such as

telephone, broadcast or internet;

an individual or by groups or whether single or

multiple use or for advertising;

(d) different durations of use and territory; and

117

(e) any other differentiation factor indicated by

the society, as it may deem fit.

(4) While fixing the tariff the copyright society shall

follow the guidelines issued by any Court or the

Board, if any, and may consult the user groups.

(5) The copyright society shall collect the royalties

from a licensee in advance where the Tariff Scheme

provides for lump sum payment of royalties. In

cases where the Tariff Scheme provides for

payments in installments, each installment shall be

collected in advance. However, in cases where the

Tariff Scheme provides for the payment of royalties

based on actual use, the copyright society may

collect an advance at the time of issue of licence

and settle the final payment based on actual use at

the end of the period for which the licence is issued

or granted.

Provided that the copyright society shall not receive

any payment in the nature of minimum guarantee

from a licensee whose royalty payments are based

on actual use which are to be settled with the

society at the end of the licence period except

where, any exceptional circumstances are

specifically included in the Tariff Scheme and the

individual case has been approved by the

Governing Council.

(6) The copyright society may revise the Tariff

Scheme periodically but not earlier than a period of

twelve months by following the rules. It shall publish

the date of coming into of the revised Tariff Scheme

at least before two months in advance and the

same shall be posted on its website.”

118

62. At this juncture, it is of a little importance to compare and

contrast Section 2(dd) of the Copyright Act with “broadcasting

services” as defined in the impugned Regulation and Tariff

Order. By Clause 2(j) of the impugned Regulation,

“broadcasting services” is defined as follows:

“2(j) “broadcasting services” means the

dissemination of any form of communication like

signs, signals, writing, pictures, images and sounds

of all kinds by transmission of electro-magnetic

waves through space or through cables intended to

be received by the general public either directly or

indirectly and all its grammatical variations and

cognate expressions shall be constru ed

accordingly;”

63. When the definitions of “broadcast” in Section 2(dd) of the

the impugned Regulation are compared, what is clear is that

the words “intended to be received by the general public either

directly or indirectly” are completely missing from the definition

of “broadcast” contained in the Copyright Act. Also, Section

52(1)(b) of the Copyright Act indicates that transient or

incidental storage of a work or performance purely in the

technical process of electronic transmission or communication

119

to the public is not an act that would constitute infringement of

“52. Certain acts not to be infringement of

copright.- (1) The following acts shall no constitute

an infringement of copyright, namely:-

xxx xxx xxx

(b) the transient or incidental storage of a work or

performance purely in the technical process of

electronic transmission or communication to the

public;”

64. The picture that, therefore, emerges is that copyright is

meant to protect the proprietary interest of the owner, which in

the present case is a broadcaster, in the “work”, i.e. the original

work, its broadcast and/or its re-broadcast by him. The interest

of the end user or consumer is not the focus of the Copyright

Act at all. On the other hand, the TRAI Act has to focus on

broadcasting services provided by the broadcaster that impact

the ultimate consumer. The focus, therefore, of TRAI is that of

a regulatory authority, which looks to the interest of both

broadcaster and subscriber so as to provide a level playing field

for both in which regulations can be laid down which affect the

manner and carriage of broadcast to the ultimate consumers.

Once the relative scope of both the enactments is understood

120

as above, there can be no difficulty in stating that the two Acts

operate in different fields. We do not find on a reading of the

impugned Regulation as well as the Tariff Order made that

TRAI has transgressed into copyright land. This is for the

reason, as has been stated hereinabove, that regulations which

allegedly impact packaging TV channels, pricing of TV

channels and the broadcaster’s right to arrange his business as

he pleases, all have to be viewed with the lens of a regulatory

authority, which is to provide a level playing field between

broadcaster and subscriber. We have also noted how the

broadcaster is free to provide whatever content he chooses for

the TV channels that he chooses to transmit to the ultimate

consumer. We have also noted how the broadcaster is free to

arrange pricing of his TV channels so long as they are non-

discriminatory and do not otherwise have the effect of

unreasonably restricting the choice of a subscriber to choose

bouquet or a-la-carte channels as has been held hereinabove.

We are satisfied that the impugned Regulation and Tariff Order

have been passed by a regulatory authority after applying its

121

mind to the objections of the various stakeholders involved after

which the Regulation and Tariff Order have been laid down

which have, by and large, been initially acceded to by the

broadcasters themselves. In this view of the matter, we are of

the view that the Copyright Act will operate within its own

sphere, the broadcaster being given full flexibility to either

individually or in the form of a society charge royalty or

compensation for the three kinds of copyright mentioned

hereinabove. TRAI, while exercising its regulatory functions

under the TRAI Act, does not at all, in substance, impinge upon

any of these rights, but merely acts, as has been stated

hereinabove, as a regulator, in the public interest, of

broadcasting services provided by broadcasters and availed of

by the ultimate consumer.

65. As Dr. Singhvi has repeatedly stressed that fixation of

rates under Section 11(2) would directly impinge upon

compensation payable for copyright to the broadcasters, it is

important to note that both the Copyright Act as well as the

TRAI Act are central enactments which do not expressly

122

provide that the one overrides the other. In this situation, a

basic principle of interpretation of statutes is that both Acts be

harmonized in the event of any clash/conflict between the two

so that both may be given effect to. In fact, Section 38 of the

TRAI Act reads as under:-

“38. Application of certain laws. – The provisions

of this Act shall be in addition to the provisions of

the Indian Telegraph Act, 1885 (13 of 1885) and the

Indian Wireless Telegraphy Act, 1933 (17 of 1933)

and, in particular, nothing in this Act shall affect any

jurisdiction, powers and functions required to be

exercised or performed by the Telegraph Authority

in relation to any area falling within the jurisdiction of

such Authority.”

66. Since the Telegraph Authority, acting under the Telegraph

Act and the Indian Wireless Telegraphy Act, is required to act in

public interest, the jurisdiction of the said Authority is left

untrammeled by the provisions of the TRAI Act. It can thus be

seen that TRAI and the Telegraph Authority both act in public

interest. The TRAI Act, the Telegraph Act and the Indian

Wireless Telegraphy Act, being statutes in pari materia, form a

Code, insofar as wireless telegraphy and broadcasting is

concerned.

123

67. We are, therefore, clearly of the view that if in exercise of

its regulatory power under the TRAI Act, TRAI were to impinge

upon compensation payable for copyright, the best way in

which both statutes can be harmonized is to state that, the

TRAI Act, being a statute conceived in public interest, which is

to serve the interest of both broadcasters and consumers, must

prevail, to the extent of any inconsistency, over the Copyright

Act which is an Act which protects the property rights of

broadcasters. We are, therefore, of the view that, to the extent

royalties/compensation payable to the broadcasters under the

TRAI Act, the former shall give way to the latter. As there is no

merit in these appeals, the same are, therefore, dismissed.

………………………… ..J.

(R.F. Nariman)

………………………… ..J.

(Navin Sinha)

New Delhi;

October 30, 2018.

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