M/s Kal Cables Pvt. Ltd. vs Mr. M.D. Shanmuga Sundaram, Proprietor M/s World View

The present Petition, under Section 14, read with Section 14A, of the Telecom Regulatory Authority of India Act, 1997, (hereinafter referred to as “TRAI Act”), has been filed, by Kal Cables Pvt. Ltd.-Petitioner, against Mr. M.D. Shanmuga Sundaram, Proprietor, M/s. World View, Chennai, Respondent, with a prayer for a decree, in the tune of Rs. 14,05,392/- (Rupees Fourteen Lakhs Five Thousand Three Hundred Ninety Two Only), on account of premature delinking of the signals of the Petitioner Network with the Respondent, within the period of 7 years, from the date of Interconnect Agreement, dated 28.10.2015, along with interest @18% per annum, with effect from 08.02.2017, till actual date of payment, with a further prayer of a decree, directing the Respondent to return the Set Top Boxes (STBs) 419 SD set top boxes, and 12 HD set top boxes, to the Petitioner, along with their paired viewing cards, remote control and AV cords, in good and working condition, or alternatively to pay a sum of Rs. 6,64,500/- (Rupees Six Lakhs Sixty-Four Thousand Five Hundred Only), against the cost of those set top boxes, along with interest, @18% per annum, with effect from 08.02.2017, till actual date of payment.

In brief, the Petition contends that the Petitioner is a Multi System Operator (MSO), having its Office at No. 229, Kutchery Road, Mylapore, Chennai-600004. It is a Company, incorporated under the provisions of “The Companies Act, 1956”, and is a Multi System Operator (MSO), as per definitions, envisaged in Regulation 2(s) of The Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable Television Systems) Regulations, 2012. Shri J. Rajesh is the authorised representative, as being General Manager of the Petitioner Company, duly authorized to file the present Petition, for and on behalf of Petitioner Company, vide its Board Resolution, dated 31/03/2015, which is Annexure P-2 to the Petition. The Respondent, Mr. M.D. Shanmuga Sundaram, is a sole Proprietor of the proprietorship firm, M/s. World View, situated at No. 34, Tamilnadu Housing Board Colony, Tambaram Sanatorium, Chennai - 600047, who is a cable operator, LCO involved in cable operator business, within the meaning and definition, provided under Regulation 2(k) of the said Interconnection Regulations of 2012, and distributing its signals to the end consumers, within the parts of Chennai, specified in Para 4(b) of the Petition.

The Petitioner, MSO, is engaged in the business of distribution of television channels in digital mode. The Petitioner and Respondent entered into an Agreement, dated 28.10.2015, with two options namely, (1) revenue sharing in accordance with the proportion stipulated by the Tariff Order of the Authority (TRAI), or (2) special revenue sharing arrangement, on mutually agreed basis, on an assurance of a minimum lock-in period of 7 years, and this Respondent adopted the second option. An addendum, was also entered, in between, the parties on 28.10.2015, wherein Respondent had agreed to pay a sum of Rs. 18,400/- per month, as minimum guarantee fee, as fixed subscription amount for Set Top Boxes up to 199 numbers. These monthly subscription charges were fixed, on the date of entering into agreement for 199 STBs. As per this Interconnection Agreement, the Petitioner is the absolute owner and right holder for the Set Top Boxes and viewing cards along with other accessories, and in case of termination of the agreement, in between the parties, the Petitioner shall be entitled to recover the Set Top Boxes, Viewing Cards, Remote controls and accessories or to claim damages for the same, under agreement. Besides this, the Petitioner was also entitled to recover charges/ damages for pre mature delinking or termination of agreement by the Respondent, before the expiry of Lock-in period of 7 years’ terms, as per clauses 13.6 and 13.7 of the Interconnect Agreement, executed, in between the parties.

The Respondent was using, 419 number of Standard Definition (SD) Set Top Boxes and 12 number of High Definition (HD) Set Top Boxes, along with its accessories, absolutely on free to use and “use and return basis”. As per Interconnection Agreement, the Petitioner, continuously and without any interruption, had provided the signals to the Respondent, on the payment of agreed subscription charges on the agreed terms, till June 2016, when Respondent without any intimation to the Petitioner switched over to some other MSO, without clearing the outstanding subscription charges and returning the Set Top Boxes to the Petitioner, which he was bound to return as per clause 13.6 of the Interconnect Agreement.

The Petitioner is entitled to recover the charges/compensations, for premature delinking of services by Respondent, before the expiry of 7 years lock-in term. Respondent migrated to other MSO, without giving notice to that effect to the Petitioner, or making clearance of dues, till the month of June 2016, for which a legal notice, dated 08.02.2017, was given, with a direction to return all the Set Top Boxes (419 SD Set Top Boxes and 12 HD Set Top Boxes), or alternatively to make payment in the tune of Rs. 6,64,500/- in lieu thereof, and also to pay a sum of Rs. 14,05,392/- towards charges/compensations for premature delinking of the signals of Petitioner MSO, within the Lock-in period of 7 years, from the date of delinking, till the end of the term of Interconnect Agreement, as per clause 13.7 of the Interconnect Agreement. This legal notice is Annexure P-3 Colly to the Petition. 6. The legal notice, dated 08.02.2017, of the Petitioner, was replied by Respondent, vide its reply dated, 15.02.2017, wherein the Respondent denied the contents of the notice, dated 08.02.2017, with a claim for the Set Top Boxes, to have been issued by the Petitioner to the Respondent on outright purchase basis. The number of Set Top Boxes were also disputed. The Respondent further claimed that the copy of Interconnect Agreement was not provided to the Respondent by the Petitioner. This reply of the Respondent is Annexure P-4 (Colly) to the Petition.

The Respondent deliberately chosen not to return the Set Top Boxes of the Petitioner, which otherwise was the property of the Petitioner as per clause 13.6 of the Interconnect Agreement. Hence, a cause of action, within the territorial jurisdiction of this Tribunal, had arisen within the limitation period, and this Petition with above prayer, was got filed by Petitioner.

The reply was with this contention, that the Respondent is with no outstanding towards subscription amount of the Petitioner, nor has the Petitioner claimed any amount towards subscription amount, in the present Petition. Relationship between the parties was on the basis of oral understanding, for the past many years, and as is the practice in the DAS areas of Chennai, all Cable operators including, Respondent herein, takes signals from the MSOs operating in that area, hence, contention to move to other competitive MSO is misconceived. It is the Petitioner, who had disconnected the signals to the network of the Respondent, because Respondent started demanding the copy of agreement, which had been signed by the parties in year 2015, with a detailed Statement of Account of the payments, made by Respondent to the Petitioner, as well as invoices, which have till date, not been issued by the Petitioner on Respondent, either on the basis of oral understanding, or the written agreement, a copy of which had not been provided to the Respondent, by the Petitioner. A continuous threat by Petitioner to Respondent with regard to disconnection of signals, in case of non-stopping of taking signals from other MSO, operating in the area was given. Meaning thereby, for confining exclusively to the signals of Petitioner only, was being pressed, and in case of failure, to face discontinuation, was being repeatedly extended by Petitioner. The alleged claim for lock-in period of 7 years in Interconnect Agreement, dated 28.10.2015, is not maintainable because of being against the mandate of competent authority, by virtue of Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable Television Systems) (Seventh Amendment) Regulations, 2016 (3 of 2016), dated 15.03.2016, which came in operation, with effect from 15.03.2016, whereby it was made mandatory for all the MSOs and LCOs to enter into a fresh agreement, on the basis of Model Interconnect Agreement (MIA) or Standard Interconnect Agreement (SIA) and the MSO was to bring the existing agreement, in line with the MIA or the SIA, under Clause 13(B), or in the alternative, provide an option to the LCOs, such as the Respondent herein, in writing to amend the existing agreement in light of same, under Clause 13(A). But, no such information/ option, as contemplated in the Interconnect Regulations, in writing, has been received by the Respondent, till date.

As per above Regulation, the period of Agreement can never be for more than one year. The claim with regard to lock-in period of 7 years, is not maintainable at all. As per Interconnect Regulations, said as above, the mandatory MIA or SIA provides the time to be of one year for each agreement, as against alleged 7 years lock-in period. Thus, the claim for cost or compensation or damages with regard to lock-in period of 7 years, is not maintainable. Though no basis for claiming an amount of Rs. 14,05,392/-, towards alleged compensation charges, for pre-matured de-linking of signals, was given in the pleading, nor there was any actual loss of damage to Petitioner. A statutory period of 3 weeks is available to either side, for getting the relationship terminated, by way of a written notice. Hence, for remaining locking period, even for remaining of 1 year, that can never be a claim for any damages or compensation, for remaining period. Moreso, in present case, neither specific damages has been pleaded, nor proved by Petitioner, which is contrary to proposition of law, given under Indian Contract Act, 1872. Most of the STBs were purchased outright by the Respondent, much prior to the signing of the agreement, relied upon by the Petitioner, and the remaining, were purchased thereafter, for which Respondent had paid an amount of Rs. 600/- to Rs. 900/- per STB, towards outright purchase of the same. There is no report of the activation of the STBs, which may clearly prove, when the same were purchased by the Respondent. The STBs issued more than three years back, as per schedule provided by TRAI in its Telecommunication (Broadcasting and Cable) Services (Fifth) (Digital Addressable Cable Television System) Tariff Order, dated 27.05.2013, became the property of subscribers and no claim for them can be made by Petitioner. Hence, the prayer is for dismissing this Petition.

Replication cum Rejoinder, denying the contention of reply, and reiterating Petition, has been filed with the same prayer of Petition.

On the basis of pleadings, following issues were framed by Court of Registrar on 08.03.2018, in a bunch of cases, which were now de-clubbed and taken up separately:

Learned Counsel for Petitioner filed affidavit, by way of evidence of Petitioner as of M. Natesan, and for Respondent affidavit of M. D. Shanmuga Sundaram was on record.

Heard Learned Counsel for both side and gone through the material placed on record.

Hon’ble Apex Court in Anil Rishi Vs. Gurbaksh Singh – AIR 2006 SC 1971 has propounded that onus to prove a fact is on the person who asserts it. Under Section 102 of The Indian Evidence Act, initial onus is always on the plaintiff to prove his case and if he discharges, the onus shifts to defendant. It has further been propounded in Premlata Vs. Arhant Kumar Jain- AIR 1976 SC 626 that where both parties have already produced whatever evidence they had, the question of burden of proof ceases to have any importance. But while appreciating the question of burden of proof and misplacing the burden of proof on a particular party and recording of findings in a particular way will definitely vitiate the judgment. The old principle propounded by Privy Council in Lakshman Vs. Venkateswarloo – AIR 1949 PC 278 still holds good that burden of proof on the pleadings never shifts, it always remains constant. Factually proving of a case in his favour is cost upon plaintiff when he fulfils, onus shifts over defendants to adduce rebutting evidence to meet the case made out by plaintiff. Onus may again shift to plaintiff. Hon’ble Apex Court in State of J & K Vs Hindustan Forest Co. (2006) 12 SCC 198 has propounded that the plaintiff cannot obviously take advantage of the weakness of defendant. The plaintiff must stand upon evidence adduced by him. Though unlike a criminal case, in civil cases there is no mandate for proving fact beyond reasonable doubt, but even preponderance of probabilities may serve as a good basis of decision, as was propounded in M Krishnan Vs Vijay Singh- 2001 CrLJ 4705. Hon’ble Apex Court in Raghvamma Vs. A Cherry Chamma – AIR 1964 SC 136 has propounded that burden and onus of proof are two different things. Burden of proof lies upon a person who has to prove the facts and it never shifts. Onus of proof shifts. Such shifting of onus is a continuous process in evaluation of evidence.

This Petition, before this Tribunal, is a civil proceeding and in civil proceeding, the preponderance of probabilities, is the touchstone for making a decision, as against strict burden of proof, required in criminal proceeding.

Both of these issues have been framed on the basis of reply filed by Respondent, and in brief, the dispute is with regard to validity of interconnect agreement, owing to legislative mandate of legislation, which came in effect from 15.03.2016 i.e., the Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable Television Systems) (Seventh Amendment) Regulations, 2016 (3 of 2016), dated 15.03.2016, wherein, a mandate was for all MSOs and LCOs, to enter into a fresh agreement, on the basis of the Model Interconnect Agreement (MIA) or Standard Interconnect Agreement (SIA) under Clause 13 (B) or in the alternative, provide an option to the LCO, in writing, to amend the existing agreement in light of the same, under Clause 13 (A), and as per mandate of this legislation, the tenure and term of interconnect agreement, was renewable after one year each. Hence, the very contention of lock-in period of 07 years, is being challenged on this basis. The pleadings of both side, specifically admits the Interconnect Agreement, dated 28.10.2015 i.e., Annexure P-1 to Petition, entered, in between parties, on 28.10.2015. The terms and conditions are elaborated in it. The Annexures are there. The only dispute in written submission, as well as in reply, by Respondent, is that he admits signature over this agreement. Contents are not being admitted. But, as per law laid down repeatedly, that in a case of written document, if the signatures are being admitted, execution is being admitted, then the interpretation of this Agreement, will be in accordance with the words written in it, in between, the lines. Hence, this agreement, Annexure P-1 to Petition has been proved by Affidavit filed in Evidence of PW-1 and it is with a very clear and unequivocal terms and conditions written in it. Hence, this agreement is to be interpreted as is written in it. The only challenge is with regard to lock-in period of 07 years, whereas, this agreement was prior to above date of operation of legislation on 15.03.2016. It was of 28.10.2015 wherein, the terms and conditions were enclosed, signed and acted upon by the parties, entering into agreement.

The Black’s Law Dictionary, in its 9^th Edition at Page No. 78, categorically gives the meaning of ‘agreement’, that a mutual understanding between two or more persons, about their related rights and duties, regarding past or future performances; a manifestation of mutual essence by two or more persons. Hence, acknowledging the past performances and assuring for the future, by mutual understanding, between two or more persons, are ‘agreement’. Even in the definition of ‘consideration’, given under Indian Contract Act, it is very well there, that it may be a past consideration too. Hence, in present undertaking i.e., agreement Exhibit P-1, nothing illegal is there. Rather, it is a valid one agreement.

By the operation of law, the period of one year has been prescribed for Interconnect Agreement as per Standard Interconnect Agreement or Model Interconnect Agreement. Hence, from the operation of this law, the next renovation of any existing agreement will be for that period of one year, and there is an option given for re-entering into an Interconnect Agreement, in between, MSO and LCO, by way of a notice in writing for executing the same. Hence, merely by giving this provision, this agreement already executed, in between, and acted upon, will not become invalid. Hence, this agreement in question, Exhibit P-1, is a valid one and Issue No. 2 is being decided, accordingly.

With regard to Issue No. 3, the lock-in-period of 07 years, will cease to come in effect, from the date of operation of above legislation i.e., 15.03.2016, or the renewal or re-adjustment of agreement, on the basis of mutual understanding, as per Model Interconnect Agreement (MIA) or Standard Interconnect Agreement (SIA), by the parties entered subsequently to date of this agreement, dated 28.10.2015. Hence, for one year i.e., upto period of 28.10.2016, this agreement is a valid one. This Issue No. 3 is being decided in favour of Petitioner.

Issue No. 4: Specific pleading in Petition is of 419 SD set top boxes and 12 HD set top boxes i.e., in all 431 set top boxes, alongwith its accessories said to have been given to Respondent, in connection with the Interconnect Agreement, proved and exhibited as Annexure P-1 to Petition. Whereas, this factum has been disputed in reply. But, the acknowledgement, having signature of both side, filed as at Page No. 32 of the Petition, is with specific mention of 199 STBs in it. The number of STBs elaborated at Page No. 29, 30 with acknowledgment at Page No. 32, with specific heading ‘World View’ 199 Active SMC Details (CC-0000941) dated 08.03.2015, are with fact of issuance of 199 STBs with their acknowledgement by Respondent. Hence, as against claimed 431 STBs, the proof is only of 199 STBs. The other evidence is oath against oath, affidavit of Petitioner, countered by affidavit of Respondent. But, the Interconnect Agreement, claimed to be the basis of the Petition, is with specific contention of those 199 STBs only, and the specific provision under clause 7.5 (i) of this agreement), is of the ownership of Petitioner over the Set Top Boxes and accessories, which were bailed out to Respondent for installing at subscribers’ end. Sub-Clause 7.5 (iii) specifically provides that these Set Top Boxes are returnable property of the Petitioner and in case of any damage or loss thereof, the Respondent will compensate the Petitioner, as and when demanded by the Petitioner. The purchase was pleaded by Respondent. But, no documentary proof regarding this is there on record, and it was a burden casted upon Respondent to prove this fact of purchase of those STBs. As these Set Top Boxes are admittedly of more than 10 years back, having no worth at present, and may not be returned in good and working condition to Petitioner. Hence, the Petitioner is to be compensated for cost of same. The admission with regard to purchase of same for a cost ranging from Rs. 600 to Rs. 900 in the year 2012, has been made by the Respondent in its reply filed in the Petition, and this is the best piece of evidence. Meaning thereby, these STBs were of costing at about Rs.1000/- each, on alleged execution of document agreement, on 28.10.2015. Considering this admission and notional depreciation, regarding the general wear and tear of STBs, till it is not returned, till date of demand i.e., 08.02.2017, the cost per STB, appeared to be of Rs. 1200/- per STB, alongwith all accessories including Viewing Cards, Remote Controls and AV cord, as a proper and genuine one. Hence, on the date of non-return of these 199 STBs, along with their accessories, the property worth Rs. 1200*199 = Rs. 2,38,800/-, (Rupees Two lakhs thirty eight thousand and eight hundred only), was suffered by Petitioner, which are to be compensated by Respondent. This issue is being decided accordingly, in favour of Petitioner.

Issue No 5: The lock-in period of seven years and de-linking before it, has been made basis for claiming compensation in tune of Rs. 14,05,392/-(Rupees Fourteen Lakhs Five Thousand Three Hundred Ninety Two Only), but as per admitted legal proposition, the Interconnection Agreement came in existence on 28.10.2015. Whereas, Interconnect Regulations propounded by a competent authority, came in effect from 15.03.2016 mandating parties to enter into standard MIA and SIA, form of agreement, for a period of one year, with subsequent renewal option. The Learned Counsel for Petitioner, while making arguments, clearly and fairly admitted this proposition, and said that for one year, the renewal ought to be made from 15.03.2016, the day when this new Regulation came in effect, and this migration to another competitive MSO, by Respondent was said to be in the month of June, 2016. Hence, this new regulation, came in operation from 15.03.2016, and the migration said to be there was from June, 2016 i.e., this was apparently in view of non-compliance and non-entering of MIA or SIA agreement. Hence, there is no loss or compensation or damage to Petitioner, nor it got proved. Hence, this Issue No. 5 is being decided against the Petitioner.

Issue Nos. 1 and 6: These issues are one and common. The interest rate claimed is of 18% per annum. Whereas, this Tribunal in repeated judgments, considering the fiscal scenario and the hard period of cable workers, had awarded simple interest @ 9 % per annum, in previously decided petitions, and the same seems to be reasonable and just rate of interest over above amount. But the same is to be given from the date of notice, when cause of action had arisen till the actual date of payment, over above amount. Accordingly, these issues are being decided in favour of Petitioner.

Petition is being allowed. Respondent is being ordered to make deposit in the Tribunal, within two months of judgment, Rs. 2,38,800/- (Rs. 1200*199) (Rupees Two Lakhs Thirty Eight Thousand Eight Hundred Only) towards cost of 199 STBs, alongwith all accessories, including Viewing Cards, Remote Controls and AV cord, etc., till 08.02.2017, the date of demand notice, with a Simple Interest @ 9% p.a, over above amount from 08.02.2017 to actual date of payment, for making payment to the Petitioner, failing which, the same shall be realized by due process.

Formal order / decree be got prepared by office, accordingly.