TaxTMI 
TaxTMI 
2006 (11) TMI 540
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....rnational Hotels Ltd. The members of Hotel Association of India are owners of big hotels whereas the members of Hotel & Restaurant Owners Association (Western India) are owners of small hotels. They provide television services to their guests. Respondents herein are broadcasters or distributors. The television services provided for by the broadcasters to the actual consumers are carried through distribution of Cable or Multi System operators (MSOs). Whereas ordinarily in the small hotels cable operators give signal to all the rooms where for separate charges are levied; the services provided in the big hotels are through an equipment installed for the said purpose known as Head End. The signals are received through satellites. They have contracts with the broadcasters directly. 2. The Parliament enacted the Cable Television Networks (Regulation) Act, 1995 (for short "the 1995 Act") to regulate the operation of cable television networks in the country and for matters connected therewith or incidental thereto. 3. "Cable operator", "cable service" and "cable television network" as defined in Section 2 of the 1995 Act read as under : "(aa) "cable operator" means any person who....
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....ne 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." 7. In exercise of its power under the proviso appended to Section 2(1)(k) of the TRAI Act, the Central Government issued a notification on 9-1-2004 notifying broadcasting and cable services to be telecommunication services. 8. On 15-1-2004, a Tariff Order known as "The Telecommunication (Broadcasting and Cable) Services Tariff Order, 2004" was issued by TRAI freezing the charges prevalent on 26-12-2003 till final determination by it on the various issues concerning those charges. The same was to apply in both Conditional Access System (CAS) and non-CAS areas. The said Tariff Order was amended on 10-3-2004 known as "The Telecommunication (Broadcasting and Cable) Services Tariff (First Amendment) Order, 2004" in terms whereof classification and non-classification of CAS and non-CAS areas w....
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....hat if any new pay channel(s) that is/are introduced after 26-12-2003 or any channel(s) that was/were free to air channel on 26-12-2003 is/are converted to pay channel(s) subsequently, then the ceiling referred to as above can be exceeded, but only if the new channel(s) are provided on a stand alone basis, either individually or as part of new, separate bouquet(s) and the new channel(s) is/are not included in the bouquet being provided on 26-12-2003 by a particular broadcaster. The extent to which the ceilings referred to above can be exceeded would be limited to the rates for the new channels. For the new pay channel(s) as well as the channel(s) that were free to air as on 26-12-2003 and have subsequently converted to pay channel(s) the rates must be similar to-the rates of similar channels as on 26-12-2003 : Provided further that in case a multi system operator or a cable operator reduces the number of pay channels that were being shown on 26-12-2003, the ceiling charge shall be reduced taking into account the rates of similar channels as on as on 26-12-2003." 11. On 1-12-2004, the Telecommunication (Broadcasting and Cable) Services (Second) Tariff (Second Amendment) Order,....
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....m were paid, Appellant - Hotel Association of India filed an application marked as Application No. 32(C) of 2005 before TDSAT praying inter alia for the following reliefs : "(i) Direct the respondents to charge fair, non-discriminatory, non-arbitrary and cost based rates by the respondents. (ii) Direct the respondents to provide the detail working of the final rental charged and submit supportive documents and other details as may be necessary to ascertain that the final rental charged is fair, cost based, non-arbitrary and non-discriminatory; (iii) Direct the respondents not to deactivate channels of the members Hotel of the petitioner No. 1 Association until the final disposal of the present petition. (iv) Pass ad-interim, interim, ex-parte orders in terms of the above prayers ;..." 15. Appellant - Hotel & Restaurant Owners Association (Western India) also filed a similar application bearing No. 80(C) of 2005. Indisputably, on 4-4-2005, an interim order directing maintenance of 'status quo as existing on that date' was passed by TDSAT. 16. On or about 29-11-2005, a Second Order was issued by TRAI permitting the broadcasters to further increase 4% of the enhanced....
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....ed by TRAI being applicable to all consumers who obtain telecommunication services, TDSAT committed a serious error in opining that the same would not apply to commercial consumers. (iii) TDSAT having regard to the scheme of the Act and the orders made thereunder committed a manifest error in holding that the applications filed by Appellants were not maintainable. 20. Counsel appearing on behalf of broadcasters, on the other hand, submitted : (i) Appellants do not constitute a "group of consumers" so as to maintain an application under Section 14(a)(ii) of TRAI Act. (ii) Tariff Order dated 15-1-2004 and subsequent Tariff Orders dated 1-10-2004 and 1-12-2004 providing for ceiling rates payable by "cable subscribers" to "cable operators" apply to individual members of Appellants who use it for commercial purpose and are transmitting the same to the customers. (iii) The individual members of Appellants being not governed by the Tariff Orders dated 7-3-2006 and 24-3-2006 and in any event the validity thereof having not been challenged by them, all these appeals have now, therefore, become academic. (iv) In any event, in terms of the Tariff Order dated 15-1-2004, Appel....
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.... be applicable. 24. Section 11 of TRAI Act provides for the functions of TRAI. Clause (a) of Sub-section (1) of Section 11 of 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 inter-connectivity between the service providers. 25. Sub-section (2) of Section 11 of 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. 26. Section 14 of TRAI Act provides for establishment of Appellate Tribunal known as TDSAT. In terms of Section 14(a)(iii) inter alia it is entitled to adjudicate any disp....
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....known to the broadcasters or cable operators. A guest may not watch TV or in fact the room may remain unoccupied but the amount under the contract by the owners of the hotels whether with the broadcasters or cable operators remains unchanged. We, therefore, are of the opinion that the members of the appellants' associations are consumers. 29. The question in regard to supply of food to a guest by the owner of a hotel whether constitutes a sale or not came up for consideration before this Court in The State of Punjab v. M/s. Associated Hotels of India Ltd. [(1972) 1 SCC 472] wherein it was held : "What precisely then is the nature of the transaction and the intention of the parties where a hotelier receives a guest in his hotel? Is there in that transaction an intention to sell him food contained in the meals served to him during his stay in the hotel? It stands to reason that during such stay a well equipped hotel would have to furnish a number of amenities to render the customer's stay comfortable. In the supply of such amenities do the hotelier and his customer enter into several contracts every time an amenity is furnished? When a traveller, by plane or by steam-ship, purc....
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....on of 'consumer'. The said submission of Mr. Desai, in our opinion, is wholly misconceived. Reliance has been placed on Morgan Stanley Mutual Fund v. Kartick Das [(1994) 4 SCC 225] wherein it was opined that the meaning of the word 'consumer' was broadly stated in the above definition so as to include anyone who consumes goods or services at the end of the chain of production. The said decision has no application. 33. 'Consumer' has been defined in the notification dated 31-12-2004. It did not make any distinction between an ordinary cable consumer and a commercial cable consumer. TRAI itself said so in its consultation paper stating : "In the Recommendations on Broadcasting and Distribution of TV channels the Authority had also indicated that the ceiling shall be reviewed periodically to make adjustment for inflation. It was also stated that the price regulation is only intended to be temporary and as soon as there is evidence that effective competition exists in a particular area price regulation will be withdrawn. The Tariff Order did not define the word "cable subscribers" and no distinction was expressly provided between ordinary cable consumer and a commercial cable con....
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....xercise of its power under Section 11(2) of TRAI Act. The same having not been done till date, in our opinion, it cannot be contended that a commercial consumer is not a consumer. 39. 'Subscriber' has been defined in Section 2(i) of the 1995 Act to mean a person who receives the signals of cable television network at a place indicated by him to the cable operator, without further transmitting to any other persons. 40. The members of Appellants - Associations stricto sensu do not retransmit the signals to any other person. It merely makes the services available to its own guests, which in other words, would mean to itself. If the amenities provided for by the management as a subscriber under TRAI Act is inseparable from the other amenities provided to a boarder of a hotel, it remains a subscriber by reason of making the services available in each of the rooms of the hotel. It is not transmitting the signals of cable television network to any other persons. TRAI Act and various orders made thereunder are required to be read conjointly with a view to give harmonious and purposive construction thereto. 41. An attempt has been made by Mr. Desai to contend that the 1986 Act is a....
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....ltivation of the field. In the wider sense it comprises of all activities in relation to the land including horticulture, forestry, breeding and rearing of livestock, dairying, butter and cheese-making, husbandry etc. Whether the narrower or the wider sense of the term 'agriculture' should be adopted in a particular case depends not only upon the provisions of the various statutes in which the same occurs but also upon the facts and circumstances of each case. The definition of the term in one statute does not afford a guide to the construction of the same term in another statute and the sense in which the term has been understood in the several statutes does not necessarily throw any light on the manner in which the term should be understood generally." 45. In Tata Consultancy Services v. State of A.P. [(2005) 1 SCC 308], this Court held : "40. Copyright Act and the Sales Tax Act are also not statutes in pari materia and as such the definition contained in the former should not be applied in the latter. [See Jagatram Ahuja v. Commissioner. of Gift-tax, Hyderabad]. 41. In absence of incorporation or reference, it is trite that it is not permissible to interpret a word i....
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....t are not in pari materia. They have been enacted for different purposes and in that view of the matter even Sirsilk Ltd. v. Textiles Committee and Others [1989 Supp (1) SCC 168] would have no application in the instant case. 49. Strong reliance has been placed on some purported agreements entered into by and between the broadcasters and the cable operators to contend that cable operators were authorised only to supply signals to private residential households or private residential multi-unit dwellings and not to commercial users. TDSAT has not gone into that aspect of the matter. It is seriously disputed that such agreements exist. In any event such a question cannot be gone into by us as cable operators are not parties in these appeals. 50. We, therefore, are of the opinion that it would not be correct to contend that the commercial cable subscribers would be outside the purview of regulatory jurisdiction of TRAI. If such a contention is accepted, the purport and object for which the TRAI Act was enacted would be defeated. TDSAT, with great respect, therefore, was not correct in opining that the regulators should also consider whether it is necessary or not to fix the tari....
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.... for fair competition providing for label 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 of taken into consideration throwing the interest of others to the wind. 57. We may notice that the Tariff Order of 2004 which came into force from 15-1-2004 whereby the price prevalent as on 26-12-2003 was to be the ceiling in respect of charges payable by : (a) Cable subscribers to cable operator; (b) Cable operators to Multi Service Operators/ Broadcasters (including their authorized distribution agencies); and (c) Multi Service Operators to Broadcasters (including their authorized distribution agencies). 58. Whereas members of Hotel & Restaurant Association would be protected thereby, the Tariff Order dated 7-3-2006 protects all as in terms thereof Sub-clause (f) of Clause 2 of the Telecommunication (Broadcasting and Cable) Services (Second) Tariff Or....
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....Until an appropriate order is passed by TDSAT, by way of an interim measure, the members of Appellants - Hotel & Restuarant Association and those members of Hotel Association who are taking supply through cable operators shall pay in terms of the Order dated 7-3-2006 but the same shall be subject to the ultimate order that may be passed by TDSAT. All other informations, if any, as directed by TDSAT, shall be furnished. 64. On 19th October, 2006, we have passed the following order : "It appears that by our order dated 28-4-2006, a Bench of this Court directed that status-quo, as it existed on that date, shall be maintained. It is stated at the Bar that pursuant to and in furtherance of the said order the TRAI has not been carrying out the processes for framing the tariff in terms of Section 11 of the Telecom Regulatory Authority of India Act. Before us Mr. Sanjay Kapur, learned counsel appearing for TRAI submitted that TRAI has already issued consultation papers and processes for framing a tariff is likely to be over within one month from date. We in modification of our said order dated 28-4-2006 direct the TRAI to carry out the processes for fr....