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TMI Blog2019 (12) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... essable systems (as opposed to analogue/ non-addressable systems) are at par with other addressable system technology operators and must, therefore, receive the same treatment. The factors peculiar to NSTPL s market position, which would determine whether NSTPL is in fact similarly placed with other distributors such as (i) viewership, (ii) advertisement revenue potential, (iii) regional, cultural, linguistic considerations, and (iv) other special considerations have not even been considered in the 7th December, 2015 Order - the liability, once determined, will constitute the final adjudication of the rights and liabilities of the Petitioners and NSTPL inter se. In the Impugned Order, in order to hold a prima facie contravention of Section 3(4), CCI ought to have formed a prima facie view that there exists an agreement either between Star/Sony and NSTPL which provides for a refusal to produce, supply, distribute, store or trade in goods or provision of services with/to NSTPL and that such agreement causes AAEC - Since there is no prima facie finding by CCI on AAEC, according to us, the mandatory jurisdictional pre-requisite of a prima facie view of contravention of Section 3(4) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gregator for Star to off-take bouquets on the basis of the rates specified in Media Pro's Reference Interconnect Offer ("RIO") for a period between 1st October, 2013 to 30th September, 2014 ("Star RIO No.1 "). According to NSTPL, it entered into Star RIO No.1 under protest. 3.3 Similarly, on 31st October, 2013, NSTPL entered into an interconnect agreement with one MSM Discovery Private Limited ("MSM") a content aggregator for Sony to off-take bouquets on the basis of the rates specified in MSM's RIO for a period between 1st October, 2013 to 30th September, 2014 ("Sony RIO No.1"). According to NSTPL, it entered into Sony RIO No.1 also under protest. 3.4 On 11th January, 2014, RIO No.1 was amended to permit NSTPL to take certain TV channels from Media Pro on an a-la-carte basis. 3.5 On 10th February, 2014, whilst the 2004 Regulations continued to operate, TRAI published new regulations which prohibited content aggregators like Media Pro and MSM from distributing TV channels of multiple broadcasters by bundling them together and prescribed 9th August, 2014 as the cut-off date for transition. 3.6 Media Pro ceased to operate and ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.9 On 25th November, 2014, NSTPL entered into another RIO with Sony ("Sony RIO No.2"). NSTPL once again contends that this RIO was also entered into by it under protest. 3.10 On 17th December, 2014, NSTPL amended the First TDSAT Petition to add Star and Taj Television Private Limited as Respondents therein. In its amendments, NSTPL raised grievances in respect of Star RIO No.2 in addition to its previous grievances against Star RIO No.1. 3.11 On 1st May, 2015, NSTPL entered into a further RIO with M/s. Multi Screen Media Private Limited ("Sony RIO No.3"). 3.12 Between 18th and 19th June, 2015, Star issued Disconnection Notices to NSTPL for non-payment of ₹ 1,69,57,400/- ("Disconnection Notices"). 3.13 On 31st August, 2016, Sony discontinued providing signals to NSTPL due to NSTPL's failure to repay Sony's outstanding dues amounting to ₹ 2,42,00,000/-("Sony Disconnection Notices"). 3.14 Aggrieved by the Disconnection Notices, on 9th July, 2015 NSTPL filed a Petition being Petition No.314(C) of 2015 before the TDSAT ("Second TDSAT Petition"). In the Second TDSAT Petition, NSTPL sought the following re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns as interpreted by the TDSAT. 3.19 The 7th December, 2015 Order was unsuccessfully challenged by Star before the Delhi High Court and thereafter before the Supreme Court. Both challenges by Star failed. 3.20 Given the passage of time and given the fact that Star continued to supply signals of channels to NSTPL, NSTPL's unpaid dues accumulated to ₹ 1,69,00,000/-. 3.21 On 18th December, 2015, TDSAT directed NSTPL to pay star ₹ 1,69,00,000/- on or before 31st January, 2016, failing which, Star would be at liberty to disconnect the signals of its channels. 3.22 On 29th January, 2016, TDSAT allowed an application filed by NSTPL in the Second TDSAT Petition seeking an extension of one month to make the payment of ₹ 1,69,00,000/- subject to 12% interest on the amounts. 3.23 On 1st April, 2016, Star disconnected its signals to NSTPL as NSTPL failed to comply with TDSAT's orders dated 18th December, 2015 and 29th January, 2016. 3.24 Pursuant to the 7th December, 2015 Order, Star issued a fresh RIO on 4th May, 2016 ("Star RIO No.3") and Sony issued a fresh RIO on 5th May, 2016 ("Sony RIO No.4"). 3.25 On 27th May, 2016, NSTPL filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g petitions relied upon by the respondent, it is evident that the orders on which petitioners are relying to claim a decree for execution were orders passed by way of interim arrangement and that Broadcasting Petition No. 526 of 2014 as well as Broadcasting Petition Nos. 313 and 314 of 2015 preferred by the respondent herein were noticed therein and it was observed that they would be decided on their own merits and if need be, after taking evidences from both sides. Hence, we find merit in the submissions advanced on behalf of respondent herein that the petitioner, Star India Pvt. Ltd. cannot claim any decree in its favour at this stage because the controversy relating to accounts is still pending before this Tribunal and there is no final adjudication on the relevant issues between the parties. ** ** ** both E.A. No.10 of 2016 (in B.P. No. 295 of 2014) and E.A. No. 11 of 2016 (in B.P. No.314 of 2015) are dismissed as pre-mature and therefore, not maintainable. However, there shall be no order as to costs. " 3.35 On 16th November, 2017, NSTPL withdrew Petition No.526 of 2014 against Taj since Taj abandoned/gave up its claims against NSTPL. 3.36 On 21st November, 2017, T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder accordingly." 3.37 On 27th July, 2018 and 31st July, 2018, CCI passed two orders exercising powers under Section 26(1) of the Competition Act inter alia directing the Director General to initiate and conduct an investigation to ascertain whether or not Star, Sony and IBF have indulged in refusal to deal by way of discrimination with NSTPL in contravention of the provisions of Section 3(4) of the Competition Act ("Impugned Order"). 3.38 Aggrieved by the Impugned Order, Star filed the present Petition on 13th August, 2018 and Sony filed its Writ Petition on 1st September, 2018. 3.39 On 16th August, 2018, this Court granted ad-interim relief restraining CCI from taking any coercive steps against Star and Sony in pursuance of the Impugned Order. 4. The aforesaid is the factual conspectus leading to the filing of the present Writ Petitions. 5. We now proceed to record the submissions canvassed by both parties. SUBMISSIONS BY STAR INDIA PRIVATE LIMITED : 6. Appearing for Star, Learned Senior Advocate Mr. D. J. Khambata submitted that the Impugned Order has been passed without jurisdiction. In this respect, he submitted that as per the ratio laid down by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xercise of powers under the Competition Act is lacking. Mr. Khambata also submitted that CCI must form a prima facie view with some reasons prior to passing an order under Section 26(1) of the Competition Act. This requirement, according to him, is also a sine qua non for the exercise of power. In this context, he placed reliance on Competition Commission of India v. Steel Authority of India [2010] 10 SCC744, Cadila Healthcare Limited & Anr. v.. Competition Commission of India [2010] 10 SCC OnLine Del 11229, Grasim Industries Ltd. v.. Competition Commission of India Writ Petition [C] No.7842 of2017, Google Inc. & Ors. v. Competition Commission of India & Anr. LPANo.733of2014, Telefonaktibolaget Ericsson v.. Competition Commission of India & Anr 2016 SCC OnLine Del 1951. He submitted that a similar provision exists under Section 231 of the Companies Act, 2013 which provision has also been interpreted to be exercised only after an opinion has been formed. In this respect, he placed reliance on Barium Chemical Ltd. v. Company Law Board AIR 1967SC 295and Bhikhubhai Patel v. State of Gujarat [2008] 4 SCC144. He then submitted that CCI has not satisfied the ingredients of Section 3(4) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is for such expression provided in the Impugned Order that there has been an appreciable adverse effect on competition. He also submitted that the Impugned Order completely ignores the false statements and suppression indulged in by NSTPL which would clearly show that the Information is merely an attempt to wriggle out of NSTPL's defaults. Mr. Cooper then submitted that the Impugned Order suffers from non-application of mind. According to him, CCI has failed to consider or deal with either the law or the facts which were on record before it. According to Mr. Cooper, the TDSAT has not adjudicated as to whether Sony's RIO was discriminatory or not. Mr. Cooper therefore concluded that the Impugned Order ought to be quashed by this Court. 8. The aforesaid submissions broadly suggest that the Petitioners herein mainly contend (i) that the Supreme Court's decision in CCI v. Bharti Airtel prevented CCI from passing the Impugned Order as the in personam and inter-party disputes were not adjudicated under the TRAI Act; and (ii) CCI has failed to arrive at a prima facie finding as to the existence of an agreement refusing to deal and that such agreement causes/is likely to cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrangement or a refusal to deal causes or is likely to cause AAEC. Both "tie-in arrangements" and "refusal to deal" are defined in an inclusive manner in the Explanation to Section 3(4). Illustrative types of such arrangements are spelt out in the legislation. The term "agreement" itself is defined in Section 2(b) and is also an inclusive one, bringing within its sweep, inter alia, any arrangement or understanding or action regardless of whether such arrangement, understanding or action is formal or in writing. The record discloses that the "RIO" is the agreement terms proposed by broadcasters in the market for television channels in the genre of sports and entertainment. The understanding of the broadcasters in providing their signals in this market is that they would violate the obligation stipulated under the telecom regulatory framework viz., providing the same on an "a la carte" basis i.e. on such basis that any purchaser of the signals can acquire the signals in an itemized manner for the channels he desires. Such finding, in the 7th December, 2015 Order, is being incorrectly sought to be dismissed as a "generic" fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n on issues had been taken in the 7th December, 2015 Order. While the 7th December, 2015 Order is the judgement that framed the relevant issues and conclusively answered them, subsequent proceedings before the TDSAT involved in personam disputes between the parties, and are of no relevance for the issues that need to be determined for purposes of discharging the mandate under the Competition Act. 9.6 Sixthly, he submitted that the strong and repeated emphasis by the Petitioners on the conduct of the NSTPL is irrelevant for purposes of the investigation under the Competition Act. According to him, NSTPL is merely an informant, and has no relevant role to play in the investigations. CCI may conclude that there is no violation or it may conclude that there is indeed a violation as originally suspected, that there is a violation of a nature different from what was originally a statutory exercise. The Competition Act and the Regulations made thereunder provide for a very intense, elaborate and detailed checks and balances against any arbitrary conduct in the course of investigation. 9.7 Seventhly, he submitted that in the teeth of such checks and balances, the Petitions seek to simp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has jurisdiction to adjudicate compensation claims after final findings are rendered. According to Mr. Sundaresan, CCI v. Bharti Airtel did not at all deal with a fact pattern similar to the facts of the instant case indeed apart from the relevant market falling within the TRAI administered telecom sector. The instant case in fact shows that the telecom regulatory system has rendered a clear view. Indeed, it is noteworthy that in filing such writ petitions, care is always taken not to make the purported sectoral regulator a party. In fact, the Supreme Court cautioned against "regulatory capture" in CCI v. Bharti Airtel; opposed to bilateral rights and obligations. Lastly, he submitted that the Petitioners have argued that the regulatory framework has changed since the time of the Impugned Order. This argument too is of no avail for stultifying the investigative and inquisitorial jurisdiction of the CCI inasmuch as the investigation to probe, followed by a decision to punish or remedy or both, is a statutory activity that is mandated by Parliament for CCI to conduct. 9.10 Lastly, Mr. Sundaresan relied upon two documents on EU Competition Law tendered by him during his a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. In this context, he placed reliance on Google Inc. & Ors. v. Competition Commission of India & Anr. 2015 SCC Online Del 8992 Kingfisher Airlines Ltd. & Ors. v. Competition Commission of India & Ors. [2010] 4 CompL.J. 557, and Shashikant vs. Central Bureau of Investigation & Ors2007] 1 SCC 630 12. We have heard the arguments canvassed by the Learned Senior Advocates and Advocates as aforesaid. We have also considered the Written Submissions filed by the respective parties. The Supreme Court's Decision in Competition Commission of India v. Bhartiairtel Ltd. & ors., [(2019) 2 SCC 521]. 13. In order to appreciate the present controversy, we propose to first deal with the Supreme Court's decision in CCI v. Bharti Airtel. In the said case, disputes arose between telecom service providers where one service provider alleged that others were discriminating against it by not providing sufficient points of interconnection. The aggrieved service provider filed a complaint with CCI. In turn, like in the present case, CCI ordered an investigation. The said order of investigation was first challenged before this Court by way of a Writ Petition. This Court struck down the order of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tel"), Idea Cellular Ltd. (hereinafter referred to as "Idea"),-Vodafone India Ltd./Vodafone Mobile Services Ltd. (hereinafter collectively referred to as "Vodafone"). RJIL commenced test trial of its services after intimation and approval of the DoT and TRAI. 14. By its "firm demand" letter of 21-6-2016, RJIL vide separate letters requested IDOs to augment point of interconnection (POIs) for access, national long distance (NLD) and international long distance (ILD) services, as according to it, the capacity already provided to it was causing huge POI congestion, resulting in call failures on its network. According to RJIL, these companies intentionally ignored the aforesaid request. Accordingly, RJIL sent a letter dated 14-7-2016 to TRAI stating that the POIs provided by IDOs are substantially inadequate and leading to congestion/call failures on its network in all circles. Hence, TRAI was requested to intervene and direct these telecom operators to augment the POI capacities as per the demands made by RJIL. TRAI vide separate letters dated 19-7-2014 requested inter alia the aforementioned telecom operators to augment POIs as per the RJIL's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the current IUC regime is inadequate to cover the cost of efficiently maintaining such high traffic. Thereafter, vide letter dated 14-9-2016, addressed by Airtel to RJIL, it stated that the POIs (also known as E1s) would be converted into 50:50 ratio to outgoing and incoming E1s. In other words, the E1s provided would be converted to "only outgoing" or "only incoming" i.e. one-way E1s. RJIL replied by stating that it was acceptable to them. 16. Soon thereafter i.e. in September 2016 itself, Mr Rajan Sardana, a Chartered Accountant, filed information under Section 19 of the Competition Act (registered as Case No. 81 of 2016) and similar application was filed by Justice K.A. Puj (retired) (registered as Case No. 83 of 2016). Then, it was followed by information under Section 19 of the Competition Act by RJIL in November, 2016 (registered as Case No. 95 of 2016)." 15. After having read the aforesaid, it would also be necessary to reproduce paragraph no.22 which quotes the allegations raised in the complaint: "22. It is clear from the above that as per RJIL, the respondent service providers, along with COAI, entered into an anti-competitive agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber series was already allotted. 101.5. As per the DoT Circular dated 29-8-2005 test customers are not considered as subscribers and test customers can only be in the form of business partners. It was highlighted that problem, if any, of congestion has been suffered on account of provisioning of full-fledged services during test phase. 101.6. RJIL in its complaint before TRAI was not considering the period of 90 days as was prescribed in the Interconnection Agreement. It was instead proceeding on the basis that the demand for POIs should be met on an immediate basis. 101.7. 101.7. There were several errors in the forecast made by RJIL. 101.8. The tables given by the RJIL are wrong as they take into account its total demand at the end of nine months against what was actually provided." 17. Lastly, we record what the Supreme Court held to be jurisdictional facts that were to be determined: " 102. The learned counsel appearing for the IDOs had also argued that the first firm demand for provisioning of POIs was made by RJIL on 21-6-2016. According to the IDOs, in that letter, RJIL had expressly admitted that it was under test phase and had not commenced "comme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid issues. After all, RJIL's grievance is that interconnectivity is not provided by the IDOs in terms of the licences granted to them. The TRAI Act and Regulations framed thereunder make detailed provisions dealing with intense obligations of the service providers for providing POIs. These provisions also deal as to when, how and in what manner POIs are to be provisioned. They also stipulate the charges to be realised for POIs that are to be provided to another service provider. Even the consequences for breach of such obligations are mentioned. 104. We, therefore, are of the opinion that the High Court is right in concluding that till the jurisdictional issues are straightened and answered by TRAI which would bring on record findings on the aforesaid aspects, CCI is ill-equipped to proceed in the matter. Having regard to the aforesaid nature of jurisdiction conferred upon an expert regulator pertaining to this specific sector, the High Court is right in concluding that the concepts of "subscriber", "test period", "reasonable demand", "test phase and commercial phase rights and obligations", "reciprocal obligations of servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad to the prima facie conclusion that the IDOs have indulged in anti-competitive practices, CCI can be activated to investigate the matter going by the criteria laid down in the relevant provisions of the Competition Act and take it to its logical conclusion. This balanced approach in construing the two Acts would take care of Section 60 of the Competition Act as well." 19. The Supreme Court's decision clearly mandates that unless TRAI finds fault with the conduct of a service provider, CCI cannot order investigation. The Supreme court has rightly laid down that despite the overlap between TRAI and CCPs jurisdiction the possibility of conflicting views can be resolved by holding that matters which pertain to issues specifically regulated by TRAI, TRAI has the jurisdiction at the first instance to deal with and render findings on such jurisdictional aspect. Thereafter, once TRAI performs this function viz. returning a finding that leads to a prima facie conclusion that the parties have indulged in anti-competitive practices can CCI investigate a matter. 20. In our considered opinion, each of the issues raised in CCI v. Bharti Airtel were in-personam disputes between the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mscribe the scope of negotiations and limit it to the framework of the RIO within which negotiations may be held to agree upon some changes in the terms of the RIO ? Does this view interfere with the broadcaster's freedom to contract on the basis of voluntary negotiations said to be guaranteed under the Constitution and further sanctioned by the Copyright Act ? Is the converse of the above the correct view, that for entering into interconnect agreement, mutual negotiation has primacy and RIO is the fall back device, in case negotiations fail to satisfy both sides ? But in that case if the broadcaster does not disclose to everybody the terms of the agreement brased on negotiation with a certain distributor, how are the rights of party and non-discrimination of other similarly situated distributors impacted ? What is the parameter to judge similarity between different distributors of TV signals ? What weight should be assigned to mutual negotiations, RIO and parity and non-discrimination in the over-all scheme of interconnection to best sub-serve the intent and purpose of the Regulations. These are some of the main questions, along with some ancillary issues that come up for cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the parties and the interveners and the earlier decision of the Tribunal in the Hathway's case we are unhesitatingly of the view that reasonableness, parity and non-discrimination, as mandated in clause 3.2 of the Regulations are essential and un-violable elements of an interconnect agreement. We accept as correct, the submission made on behalf of TRAI that Clause 3.2 is the essence of the Regulations and that clauses 3.1 & 3.2 stipulate the "most essential conditions of the interconnection regulations". Having thus disposed of the main contentions made on behalf of the broadcasters and some others in favour of leaving the field completely open for negotiated agreements and having arrived at some primary findings we now proceed to examine the question that was left open in the Hathway decision namely, the extent of freedom of negotiation enjoyed by the provider and seeker of signals and the extent to which the RIO of the provider regulates, limits or expands the area of negotiation. This brings us to the RIO which is the most basic in this controversy. Once the nature of the RIO and its position in the Regulations is correctly understood everything falls into pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... free of the Regulations and gives it complete freedom of negotiations for entering into interconnect arrangements with the distributors. The broadcaster is thus able to retain the choice to take the "high road" of negotiations and thereby not to submit to the regulatory provisions or to take the "low road" of the RIO in which case alone it would submit to the Regulations. Secondly, by not giving in the RIO the bouquets and their prices that it offers for distribution in all its negotiated deals the broadcaster completely bye passes the mandate of clause 13.2A.12 that fixes the ratio between the a la carte rate and the bouquets rates channels. Thirdly, as the a la carte rates given in the RIO do not follow the ratio under clause 13.2A.12 of the Regulations and are also completely divorced from the actual market prices of the channels, the broadcaster acquires great bargaining power in any negotiation with the distributors. It can always refuse to enter into negotiations or terminate a negotiation asking the seeker of the channel to take the RIO that would be highly disadvantageous and quite often commercially unviable for the distributor. The RIO thus puts the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e systems, there cannot be any dispute or any negotiations in that regard. Hence, Mr. Saket Singh rightly submitted on behalf of TRAI that once the RIO regime is introduced in any area under addressable transmission, the provision of clause 3.5 gets ousted. As regards, the proviso to clause 13.2A.6(i), it is to be noted that "the mutually agreed terms and conditions are qualified by the condition of non-discriminatory basis and provide only for modifying the RIO and not to discard it altogether". It is secondly contended that by putting up the RIO on its website offering the channels individually and on a la carte rates the broadcaster satisfies the requirement of non-discrimination. Additionally that the broadcaster is free to fix the a la carte rates of channels upto the upper limit allowed under the tariff order and regardless of the actual market price of the channels. It is further contended that the broadcaster is not obliged to give any bouquets in the RIO because the Regulations mandate it to offer all its channels for distribution on a la carte basis; there is no mandate to give the channels in the form of bouquets. The submission is quite fallacious. As discus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stipulated under clause 13.2A.12 and the margins between different negotiated agreements would be such as they would hardly be any requirement for disclosures. VI.d. Issue 5 Issue No.4 is thus answered in the above terms and this takes us to the fifth issue, regarding the status of the HITS operator for the purpose of interconnect arrangements. In this regard, Mrs. Pratibha Singh submitted that "HITS has a PAN-India footprint and a last mile monopoly". It, therefore, enjoys the benefits of both MSOs and DTH operators without any of their deficiencies. She submitted that a HITS operator could, thus, emerge as a monopolistic and a dominant player in the market. We simply take note of the submission for the sake of record. There is no material to support the apprehensions expressed by Mrs. Singh, and, in any event, this is a matter to be addressed by the regulator. It is not open to the broadcaster to mete out a discriminatory treatment to the HITS operator on the basis of a self-serving prediction that at some future date HITS has the potential to dominate the broadcasting sector. Dr. Singhvi and some other counsel submitted that the HITS operator was different from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d terms within the limits, as described hereinabove. Star and Taj must execute fresh interconnect agreements with the Petitioner within two weeks from the date of issuance of their fresh RIOs. The agreement with Star would relate back to 30 October 2015 and with Taj to 30 June 2015. This issuance of the fresh RIOs by the broadcasters will also give right to other distributors of channels with whom the broadcasters may be in interconnect agreement to have their agreements modified in terms of clause 13.2A.7. It is noted in the earlier part of the judgment that the Petitioner executed an RIO based agreement with Media Pro. At that time, it did not complain before the Tribunal that it was being forced into the RIO based agreement even though it had ample opportunity to do so as the Media Pro application was pending before the Tribunal. Later on, after Media pro ceased to be an agent of the broadcasters, the Petitioner, even after filing the present Petition, signed RIO based agreements both with Star and Taj. The agreement with Star was for the period upto 30 July 2015 and the two agreements with Taj were upto 31 March 2015. The Petitioner must, therefore, be held bound by those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have pointed out, the positions taken by TRAI in the past have not always been fully consistent. In particular, we note the observation of TRAI in Consultation Paper No.15/2008 that in view of the confidentiality restrictions, "the automatic implementation of non-discrimination clause in Interconnect Regulation is practically difficult". Thus, as far back as 2008, TRAI was aware that the non-discrimination clause - which, in these proceedings, it has sought to place on a very high pedestal - was effectively inoperative. And yet, matters in the broadcasting sector have been allowed to lie where they are by TRAI. There are, undoubtedly, important issues of regulatory policy that underlie the interpretative issues that this Tribunal has had to confront. It is incumbent on this Tribunal to interpret the Regulations as those stand, and place an interpretation that is aligned with the legislative and regulatory intent. But in a matter where TRAI has not been entirely consistent at every point in time, in a matter where the Regulations have evolved with frequent and successive amendments, and in a sector which has undergone some technological change with the shift from analog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iated agreements and those shown in the current RIOs will then show how far the RIOs are removed from market realities. Having examined the negotiated agreements between the broadcasters and the distributors of channels, TRAI may even feel the need to take a re-look at the tariff orders framed by it. But for any meaningful exercise for reviewing and consolidating the broadcasting Regulations it would be imperative for TRAI to get hold of the negotiated agreement between the broadcasters and distributors which alone would give the correct picture of the market reality. Needless to add that in case TRAI issues any fresh Regulations before 1 April 2016, the Petitioner and the broadcasters would be obliged to execute agreements on that basis. In case, however, no fresh Regulations are issued by TRAI, this judgment and order will come into effect from the aforesaid date and the parties would be obliged to follow the directions given above. X. Trying up the loose ends. Suspension of this judgment, as explained above is in the larger interest of the broadcasting sector. It does, however, leave open the question of the Petitioner's liability to pay licence fees to the broadcaster ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h December, 2015 Order. In order to test the aforesaid submission, it would be necessary to list below the issues as were framed in the First TDSAT Petition. These read: 1. Whether, in the facts of this case, a dispute requiring the adjudication of issues framed by the Tribunals order dated 30 July 2015, at all arises ? 2. Whether the right to freedom of contract is embedded in the Interconnect Regulations and consequently mutually negotiated agreements are outside the purview of not only the non-discrimination obligation in clause 3.2 of the Interconnect Regulations, 2004 but the regulatory regime itself? 3. Whether, in light of the scheme of the Copyright Act and the fact that what is being transmitted is licensed content, the Interconnect Regulations 2004 must necessarily be interpreted as according complete freedom of contract and primacy of mutual negotiations in matters of interconnection ? 4. What interpretation ought to be placed on the various clauses of the 2004 Regulations ? Specifically, what is contemplated by an RIO, and what is the extent of negotiation that is permissible in deviating from the terms of the RIO ? Specifically, can parties - by mutual negotiat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, non-disclosure of discounted schemes/incentive schemes and anti-competitive conduct all of which remains to be decided in the Second TDSAT Petition. 25. Further, the issues as raised by NSTPL in the Second TDSAT Petition are jurisdictional facts which only the TDSAT as an expert regulatory body is equipped to decide as per the ratio laid down in CCI v. Bharti Airtel. Absent a finding in the Second TDSAT Petition that Star and Sony have in fact engaged in price discrimination and/or non-disclosure of discounted schemes/incentive schemes and/ or anti-competitive conduct qua NSTPL, CCI could not have proceeded with the investigation. 26. In our considered opinion, a bare perusal of the 7th December, 2015 Order demonstrates that it pertains only to general/industry-wide issues relating to the concept of RIO and the law declared therein is intended to be prospective in operation. This is evident from the fact that TDSAT did not deal with the finer and specific issues of discriminatory conduct alleged by NSTPL against Media Pro, Taj and Star in the First TDSAT Petition. In fact, none of the specific reliefs sought against Media Pro, Star and Taj in the First TDSAT Petition were ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he broadcasting sector. In Part V of the 7th December, 2015 Order , TDSAT noted various provisions of the TRAI Act and Regulations, with particular reference to the non-discriminatory mandate and the "must provide" obligation. These were particularly referred to and interpreted when considering the questions relating to the scope of mutual agreement and freedom to contract under the TRAI Act and Regulations. In Part VII of the 7th December, 2015 Order, TDSAT passed its operative directions in light of the discussions on the five industry-wide issues decided by it. The operative direction was to issue fresh RIOs, in compliance with the Regulations "as explained in this Judgment within one month from the date of this order". This direction was not specific to Star and Taj, but applied to all other broadcasters who joined the proceedings as intervenors. Despite this, TDSAT held that NSTPL was bound by Star RIO No.2, not only for the period of the agreement but for three months beyond that as well. This operative direction was clearly prospective. Pertinently, the TDSAT did not impose any penalty or direct any other broadcaster to refund any amounts collected from c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oadcasters until after execution of fresh agreements accounts are finally reconciled. The determination of payment liability by the petitioner may also require some evidence to be taken. For this purpose, Petition No. 526 (C) of 2015 is de-tagged from this judgment and kept pending. Star has already filed an application (M A. No. 377 of 2015) in Petition No. 314 (C) of 2015 claiming the dues of licence fees from the petitioner. Petition No. 526 (C) of 2015 is directed to be tagged with Petition No. 314 (C) of 2015. In these two petitions, the Tribunal proposes to determine the Petitioner's liability to pay the license fees to Star and Taj on an ad hoc basis and as an interim measure until the execution of the agreements with the two broadcasters, and when the accounts of the two sides may be reconciled to determine any final liability of the Petitioner or Respondents to make any further payments. " (emphasis supplied) Therefore, this liability, once determined, will constitute the final adjudication of the rights and liabilities of the Petitioners and NSTPL inter se. 29. We find credence in Mr. Khambata's argument that in the Second TDSAT Petition, NSTPL has made var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allegations made in the reference to the Commission. 94. The Tribunal, in the impugned judgment, has taken the view that there is a requirement to record reasons which can be express, or, in any case, followed by necessary implication and therefore, the authority is required to record reasons for coming to the conclusion. The proposition of law whether an administrative or quasi-judicial body, particularly judicial courts, should record reasons in support of their decisions or orders is no more res integra and has been settled by a recent judgment of this Court in CCT v. Shukla & Bros. [(2010) 4 SCC 785: (2010) 2 SCC (Cri) 1201: (2010) 2 SCC (L&S) 133], wherein this Court was primarily concerned with the High Court dismissing the appeals without recording any reasons. The Court also examined the practice and requirement of providing reasons for conclusions, orders and directions given by the quasi-judicial and administrative bodies. 97. The above reasoning and the principles enunciated, which are consistent with the settled canons of law, we would adopt even in this case. In the backdrop of these determinants, we may refer to the provisions of the Act. Section 26, under its dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order has considered the factors set out under Section 19 (4) of the Act. In fact, the CCI submitted that every vertical agreement/refusal to deal is not interdicted by CCI. Instead, CCI conducts a threshold analysis to ascertain whether the person is in a dominant position before proceeding to analyze whether the agreement amounts to a refusal to deal. This is because, according to CCI, parties who are not in a position of dominance have the freedom to contract and deal with whomsoever they choose. However, the oral arguments and the Written Submissions tendered by CCI do not provide any reason whatsoever as to why, after ascertaining that Star and Sony are in dominant positions in the relevant market, no analysis of the likelihood of AAEC has been carried out when passing the Impugned Order. Before directing an investigation, the CCI ought to have applied its mind to and scrutinized the Petitioners' conduct based on the factors set out under Section 19(3) of the Competition Act. Apposite from this discussion, it would be necessary to reproduce the following finding from the Supreme Court's decision in ShriSitaram Sugar Co. Ltd. v. Union of India [1990] 3 SCC 223, " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, once again, we are unable to find any reasonable justification justifying CCI's failure to apply the aforesaid analysis whilst passing the Impugned Order. This being so, the Impugned Order cannot stand the test laid down under the Act. 34. The impropriety of the Impugned Order stands further buttressed from the fact that whilst it says that the Petitioners have prima facie violated Section 3(4) read with 3(1) of the Competition Act, the factors to arrive at such finding viz. Section 19 (3) have not been considered. The Impugned Order is once again found lacking in the requirement to analyze and apply the factors laid down under Section 19(3) of the Competition Act and therefore cannot be sustained. 35. Moving further, it was Mr. Andhyarujina's submission that Star has changed its stand regarding the scope of the issues that were decided by TDSAT in the 7th December, 2015 Order and the Second TDSAT Petition. In this context, Mr. Andhyarujina placed reliance on the 10th August, 2017 Order, 16th November, 2017 Order and Star's Written Submissions filed with TDSAT on 8th November, 2017. It was Mr. Andhyarujina's submission that Star had always maintained t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... To deal with this submission, it would first be necessary to note that it is not NSTPL's case pleaded on Affidavit as NSTPL has not filed any reply in these petitions. Star has specifically asserted in its Writ Petition that Star RIO No.2 was voluntarily entered into by NSTPL. However, NSTPL has not filed any reply controverting the said assertions at all. In fact, in the 7th December, 2015 Order, TDSAT has noted: "101. It is noted in the earlier part of the judgment that the petitioner executed an RIO based agreement with Media Pro. At that time, it did not complain before the Tribunal that it was being forced into the RIO based agreement even though it had ample opportunity to do so as the Media Pro application was pending before the Tribunal. Later on, after Media Pro ceased to be an agent of the broadcasters, the petitioner, even after filing the present petition, signed RIO based agreements both with Star and Taj. The agreement with Star was for the period upto 30 July 2015 and the two agreements with Taj were up to 31 March 2015. 102. The petitioner must, therefore, be held bound by those agreements till the periods of those agreements and further, three months ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re and cannot be treated as an administrative order since it was passed by CCI after collecting the detailed information from the parties and by holding the conferences, calling material details, documents, affidavits and by recording the opinion. It was submitted that judicial review against such an order is permissible and it was open to the respondents to point out that the complete material, as submitted by the respondents, was not taken into consideration which resulted in an erroneous order, which had adverse civil consequences inasmuch as the respondents were subjected to further investigation by the Director General. 116. We may mention at the outset that in SAIL [CCI v. SAIL, (2010) 10 SCC 744], nature of the order passed by CCI under Section 26(1) of the Competition Act [here also we are concerned with an order which is passed under Section 26(1) of the Competition Act] was gone into. The Court, in no uncertain terms, held that such an order would be an administrative order and not a quasi-judicial order. It can be discerned from paras 94, 97 and 98 of the said judgment, which are as under: (SAIL case of CCI v. SAIL, (2010) 10 SCC 744], SCC pp. 785 & 787) " 94. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons raised before the Commission by the parties. In other words, the Commission is expected to express prima facie view in terms of Section 26(1) of the Act, without entering into any adjudicatory or determinative process and by recording minimum reasons substantiating the formation of such opinion, while all its other orders and decisions should be well-reasoned. 98. Such an approach can also be justified with reference to Regulation 20(4), which requires the Director General to record, in his report, findings on each of the allegations made by a party in the intimation or reference submitted to the Commission and sent for investigation to the Director General, as the case may be, together with all evidence and documents collected during investigation. The inevitable consequence is that the Commission is similarly expected to write appropriate reasons on every issue while passing an order under Sections 26 to 28 of the Act." 117. There is no reason to take a contrary view. Therefore, we are not inclined to refer the matter to a larger Bench for reconsideration. 118. It was, however, argued that since SAIL [CCI v. SAIL, (2010) 10 SCC 744] was not dealing with the telecom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal or an authority depends can be said to be a "jurisdictional fact". If the jurisdictional fact exists, a court, tribunal or authority has jurisdiction to decide other issues. If such fact does not exist, a court, tribunal or authority cannot act. It is also well settled that a court or a tribunal cannot wrongly assume existence of jurisdictional fact and proceed to decide a matter. The underlying principle is that by erroneously assuming existence of a jurisdictional fact, a subordinate court or an inferior tribunal cannot confer upon itself jurisdiction which it otherwise does not possess. 28. In Halsburys Laws of England (4th Edn.), Vol. 1, Para 55, p. 61; Reissue, Vol. 1(1), Para 68, pp. 114-15, it has been stated: 'Where the jurisdiction of a tribunal is dependent on the existence of a particular state of affairs, that state of affairs may be described as preliminary to, or collateral to the merits of, the issue. If, at the inception of an inquiry by an inferior tribunal, a challenge is made to its jurisdiction, the tribunal has to make up its mind whether to act or not and can give a ruling on the preliminary or collateral issue; but that ruling is not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to its market share but also by taking account of the full range of constraints which it faces, and in particular the ease with which its position may be challenged by existing or potential competitors. As such, under EU law, refusal to deal forms a facet of abuse of dominance. However, in the prevalent Indian regime, abuse of dominance is an independent provision which falls under Section 4 of the Competition Act. On the other hand, refusal to deal falls under Section 3 (4) of the Competition Act. Hence, it appears that EU Competition Law on refusal to deal is materially different from Indian law on the subject. Further and in any event, even under EU Law, a refusal to deal will only be unlawful if it can be shown that it will have an anti-competitive effect, with consequent long-lasting consumer harm. However, the Impugned Order did not consider whether the Petitioners' actions of will have any AAEC. Therefore, according to us, this submission of Mr. Sundaresan's cannot help sustain the Impugned Order. 43. In view of the findings herein, we proceed to pass the order as below. CONCLUSION: 44. Both the Writ Petitions are allowed. 45. The Impugned Orders dated 27th Jul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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