TaxTMI 
TaxTMI 
TaxTMI 
2019 (12) TMI 3
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....tter, the applicable law, judicial pronouncements and after considering the parties' submissions, ascertain whether the Impugned Order should be sustained or quashed. FACTS : 3. Prior to the dealing with the respective arguments canvassed by the parties, it would be necessary to set-out the following : 3.1 On 10th December, 2004, the Telecom Regulatory Authority of India ("TRAI") notified the Telecommunications (Broadcasting and Cable Services) Interconnection Regulations, 2004 ("2004 Regulations"). The 2004 Regulations inter alia covered arrangements amongst broadcasters such as the Petitioners and distributors of TV channels such as NSTPL. 3.2 On 1st October, 2013, NSTPL entered into an interconnect agreement with one Media Pro Enterprises India Private Limited ("Media Pro") a content aggregator 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 Pri....
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....,3 & 4 Companies to refund to the petitioner company any amounts it has paid under the respective Interconnection Agreements, in excess of the prices being offered by the said companies to distributors that are similarly placed with the Petitioner Company herein; (e) Direct that the Respondents Nos. 3 and 4 Companies have an obligation to disclose the existing and future volume related schemes to the Petitioner Company herein and further direct that the Petitioner Company may avail of the same if desired; ** ** **" 3.8 On 1st August, 2014, NSTPL entered into an agreement with Star on the basis of Star's RIO for a period between 1st August, 2014 to 30th June, 2015 ("Star RIO No.2"). 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 Limite....
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....training Star from giving effect to the Disconnection Notices provided NSTPL made an on-account payment of Rs. 1,00,00,000/- within a month. 3.16 In view of the fact that the questions arisen in the First TDSAT Petition were likely to affect the broadcasting sector as a whole, on 30th July, 2015, TDSAT permitted all concerned stakeholders to intervene in the First TDSAT Petition. 3.17 On 7th August, 2015, TDSAT directed that the Second TDSAT Petition would be decided after the disposal of the First TDSAT Petition. Parties have completed pleadings and have filed their respective Affidavit(s) of Evidence in the Second TDSAT Petition. The Second TDSAT Petition is pending as on date. 3.18 On 7th December, 2015, TDSAT passed an Order and Judgment in the First TDSAT Petition ("7th December, 2015 Order"). Amongst various other findings and directions, TDSAT directed all broadcasters to publish new RIOs in terms of the TRAI Regulations 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 f....
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....ear violation of Section 3 and 4 of the Competition Act ("Information"): 3.32 On 21st July, 2018, Sony filed a Contempt Application before TDSAT in view of NSTPL's failure to comply with TDSAT's order dated 1st May, 2017. 3.33 On 24th July, 2018, TDSAT permitted NSTPL to comply with its order dated 1st May, 2017 on the condition that an additional amount of Rs. 1,00,000/- shall be paid by NSTPL to Sony. 3.34 On 10th August, 2017, TDSAT dismissed the Contempt Application filed by NSTPL as also the Execution Applications filed by Star by inter alia holding: "Having considered the entire materials in the light of aforesaid rival stands and having gone through the three orders relied upon by the petitioner and also subsequent orders dated 09.02.2016 and 16.02.2016 in MA Nos. 34 and 36 of 2016 in the pending broadcasting 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....
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....2.2015. Accordingly, parties have been heard on this issue ** ** ** 7. On behalf of petitioner, a simple stand is taken that petitioner has also sought a declaration that the demand is illegal and there is a need for reconciliation of accounts and clearly these reliefs cannot become infructuous unless respondent No. 1 agrees to give up its claim over the alleged outstanding against the petitioner. In reply, the respondents refused to give up their right to claim money from the petitioner on account of arrears of dues. ** ** ** 8. In our considered view, in the aforesaid circumstances, it would not be proper to dismiss the petition as infructuous The issue relating to reconciliation of accounts and also legality and validity of the demand raised by the respondent remains to be adjudicated Hence, the prayer made on behalf of respondent to dismiss the petition on the ground that no cause of action survives has to be rejected. We order accordin....
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....petitive conduct qua NSTPL by Star remained undecided as on date. He supplemented his argument by submitting that TDSAT has itself held that the issue of the legality and validity of the demand raised by Star has not been finally decided. He thereafter submitted that NSTPL has admitted in Writ Petition No.12319 of 2019 filed by it that the Second TDSAT Petition is pending adjudication and that the issue of discrimination by Star in providing incentives has not been finally adjudicated. He then submitted that the issues raised in the Second TDSAT Petition are jurisdictional facts which only TRAI/TDSAT as expert regulatory bodies are equipped to decide. The existence of a jurisdictional fact is a sine qua non for the exercise of power. In this context, reliance was placed by him on S.K. Maini v. Carona Sahu & Ors. [1994] 3 SC 510, Arun Kumar & Ors. v. Union of India & Ors [2007] 1SCC732]. Therefore, according to him, absent a finding by TRAI/TDSAT that Star has in fact engaged in any price discrimination and/or non-disclosure of discounted schemes/incentive schemes and/or anti-competitive conduct qua NSTPL, the necessary jurisdictional fact for exercise of powers under the Competitio....
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....n v. Competition Commission of India & Anr 2016 SCC OnLine Del 1951, Rohtas Industries Ltd. v. S.D. Agarwal [1969]1 SCC 325. Mr. Khambata therefore concluded that CCI, while carrying on a prima facie assessment, has failed to fulfil the jurisdiction pre-requisites laid down under the Competition Act and therefore, the Impugned Order be quashed by this Court. SUBMISSIONS BY SONY PICTURES NETWORK INDIA PRIVATELIMITED: 7. Appearing for Sony, Learned Senior Advocate Mr. S.K. Cooper submitted that until TDSAT holds that the RIO(s) were in breach of the Interconnection Regulations and/or discriminatory, there can be no question of CCI exercising jurisdiction under the Competition Act. In support of his submission on jurisdiction, he placed reliance on CCI v. Bharti Airtel. He submitted that the jurisdictional basis for passing the Impugned Order is lacking. Mr. Cooper then submitted that the Impugned Order seeks to apply the provisions of Section 3(4)(d) of the Competition Act without stating the basis i.e. the agreement on which such violation is alleged to have occurred. He further submitted that there is no expression of opinion or basis for such expression provided in the Impugned ....
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....exceeded its jurisdiction. However, not only did the Delhi High Court refuse to entertain the writ, the Supreme Court also dismissed the appeal and upheld the 7th December, 2015 Order. Thereby, the clear and explicit finding of anti-competitive conduct came to be finally upheld. According to him, Section 3(4) deals with, among others, two forms of abuses that appear to exist in the facts of the case viz. "tie-in arrangement" and "refusal to deal". The existence of these two abuses in the facts of the case, is writ large on the face of the Order dated 7th December , 2015, which came to be upheld even by the Supreme Court. CCI has, by applying the ratio in CCI v. Bharti Airtel, sought to investigate the same in discharge of its duty under Section 18 of the Competition Act, applying the due process enshrined in Section 26, read with Section 19, read with the CCI (General) Regulations, 2009 ("General Regulations"). He submitted that Section 3(4) entails interdiction of agreements among enterprises or persons at different stages of supply of services, if such agreement causes or is likely to cause an AAEC on arrangement or a refusal to deal causes or is likely to cause AAEC. Both "tie-i....
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....lying objective criteria, the Impugned Order explains in detail how the Petitioners have tremendous market power for their actions, and their understanding of how their customers must transact with them, to result in violation of Section 3(4), indeed on a prima facie basis. 9.4 Fourthly, he submitted that such conclusive findings in the 7th December, 2015 Order has been noticed in the Impugned Order, and forms, amongst others a prima facie rationale, the basis of investigations ordered in the Impugned Order. The Impugned Order also records that the order of this Court in the case of Vodafone (which, in appeal, led to CCI v. Bharti Airtel), canvassed by the Petitioners, indeed ruled that the telecom regulatory system needs to clarify the regulatory position. In the instant case, at the time the Impugned Order was passed, the confirmation of violative conduct was far firmer than a mere clarification. 9.5 Fifthly, he submitted that even the TDSAT, sitting in a successor bench, has clearly and firmly pointed out that the "final" decision 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 ....
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.... case, the Supreme Court ruled that the issues involved in that case were regulatory questions, which needed to be answered. The regulatory issues in the instant case stand answered by the 7th December, 2015 Order, and applying the principles of CCI v. Bharti Airtel, the CCI now has to discharge its duty to conduct the investigation to examine if there is conduct that deserves to be interdicted. 9.9 Ninthly, he submitted that it is trite and well-settled law that judgements must not be read like legislation much less like fiscal legislation, with a literal reading of specific sentences without context, particularly, context of the facts being adjudicated upon in the judgement. The reference to "respective rights and obligations" in Vodafone, noticed in the Impugned Order, has been rightly interpreted as regulatory rights and obligations. CCI does not have any jurisdiction to sit in judgement and grant any party-specific relief to a complainant. Indeed, the National Company Law Appellate Tribunal 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 ....
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....he issues between the parties with respect to the RIOs and the violations of the Interconnect Regulations and the TRAI Act. As such, the 7th December, 2015 Order is conclusive, comprehensive and has finally adjudicated upon the said issues. Mr. Andhyarujina's fourth submission was that the various orders and directions of the TDSAT clearly indicate that the only outstanding issues that remain to be decided in the Second TDSAT Petition is that of settling of accounts. Placing further reliance on these orders, he submitted that the said orders highlight the mala fide actions and intent of the broadcasters. Mr. Andhyarujina tendered various charts across the bar to demonstrate how NSTPL was a victim of price discrimination. Mr. Andhyarujina's fifth submission was that this Court, in its Writ Jurisdiction, has a limited and restricted scope to interfere with an order of investigation and therefore, this Court ought not to interfere with the Impugned Order. 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....
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....seeker. The purpose behind providing interconnection by one service provider to the other service provider is to ensure smooth communication by a subscriber of one service provider to the cell number which is provided by another service provider. In that sense, this direction facilitates smooth functioning of the cellphone network even when it is managed by different companies as it ensures interconnectivity i.e. connectivity from one service provider to other service provider. 13. On 21-10-2013, RJIL was granted Unified Licence and Unified Access Service Licence under Section 4 of the Telegraph Act by the Department of Telecom (DoT) for providing telecommunication services in all 22 circles/licensed service areas in India. Soon thereafter, RJIL executed interconnection agreements (ICA) with existing telecom operators inter alia including, Bharti Airtel Ltd. and Bharti Hexagon Ltd. (hereinafter collectively referred to as "Airtel"), 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....
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....t the parties stuck to their respective positions and it may not be necessary to refer to those communications in detail. Suffice it is to mention that RJIL fixed 5-9-2016 as the launch date, which fact was informed to other service providers as well who were also told that the subscriber base was expected to substantially and swiftly increase resulting in even more POI congestion. On that basis, request was made for urgent POI augmentation vide letter dated 2-9-2016. The TRAI even facilitated a meeting between the representatives of RJIL and other service providers (the respondents herein) to sort out and resolve the differences in the interest of the consumers. At the same time, in the said meeting, the three telecom operators (respondents herein) also raised a grievance that free calls being provided by RJIL has resulted in an unprecedented traffic congestion on their respective networks and 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 wo....
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....ement of this dispute which has arisen between various service providers, namely, RJIL on the one hand and the IDOs on the other, wherein COAI is also roped in. TRAI is seized of this particular dispute. 101. It is a matter of record that before the TRAI, IDOs have refuted the aforesaid claim of RJIL. Their submission is that not only required POIs were provided to RJIL, it is the RJIL which is in breach as it was making unreasonable and excessive demand for POIs. It is specifically pleaded by the IDOs that: 101.1. RJIL raised its demand for POIs for the first time on 21-6-2016. 101.2. In the letter dated 21-6-2016, it was admitted that RJIL was in test phase. 101.3. There was no express mention of any commercial launch date. 101.4. As per the letter, immediately on commercial launch RJIL would have a 22mn subscriber base for which number 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. 1....
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....n filed before it. It needs to be reiterated that RJIL has approached the DoT in relation to its alleged grievance of augmentation of POIs which in turn had informed RJIL vide letter dated 6-9-2016 that the matter related to interconnectivity between service providers is within the purview of TRAI. RJIL thereafter approached TRAI; TRAI intervened and issued show-cause notice dated 27-9-2016; and post issuance of show-cause notice and directions, TRAI issued recommendations dated 21-10-2016 on the issue of interconnection and provisioning of POIs to RJIL. The sectoral authorities are, therefore, seized of the matter. TRAI, being a specialised sectoral regulator and also armed with sufficient power to ensure fair, non-discriminatory and competitive market in the telecom sector, is better suited to decide the 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 provision....
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....iders are governed by the TRAI Act and are supposed to follow various regulations and directions issued by TRAI itself." 18. Following the aforesaid, the Supreme Court laid down the test for CCI to exercise its jurisdiction as follows: "113. The conclusion of the aforesaid discussion is to give primacy to the respective objections of the two regulators under the two Acts. At the same time, since the matter pertains to the telecom sector which is specifically regulated by the TRAI Act, balance is maintained by permitting TRAI in the first instance to deal with and decide the jurisdictional aspects which can be more competently handled by it. Once that exercise is done and there are findings returned by TRAI which lead 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....
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....ignals to the distributor without ado (provided of course the distributor's system are technologically compliant with the regulatory prescriptions!). At the same time, the Regulations also seem to allow for inter-connect arrangement between the broadcaster and a distributor, based on mutually negotiated agreement. To cap it all, the Regulations dictate parity and non-discrimination in the inter-connect arrangements that a broadcaster may enter into with different broadcasters. These demands, that to some may appear incompatible or even conflicting and that go into the making of the Regulations give rise to a number of questions. Does the RIO have precedence over mutual negotiations and does it circumscribe 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 pri....
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....ght 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 negotiations - contract out of mandatory norms laid down both in the Regulations (e.g. 13.2A.11 and 13.2A.12) and the conditions/methodology contained in Schedule III? 5. Can a HITS operator be regarded as similarly situated as compared with MSO/DTH in terms of Clause 3.6 of the 2004 Regulations, thus enabling it to claim non-discriminatory treatment ? On a consideration of the relevant provisions of the Regulations, 2004, the submissions made on behalf of 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 in....
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....the distributors has three main features : (i) It gives only a list of individual channels with their a la carte rates (ii) It does not give any bouquets of channels or the prices thereof (iii) Even the a la carte rates of channels are fixed with no regard to the market realities, as reflected in the negotiated deals, but at the highest permissible rate under the tariff order framed by TRAI This faux RIO gives the broadcaster immense advantages. First, as every distributor of channels much prefers to take channels in bouquet forms and not individually, and specially not at the higher rates fixed in the RIO, the omission to give any bouquets in the RIO makes the broadcaster by and large 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 dea....
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....absolutely no scientific or objective way to ascertain the number of viewers watching any particular channel and in analogue mode gross understatement of the subscriber base by the distributor is a well-known and recognised fact. There is thus no other mode for the broadcaster and the distributor to agree upon the subscriber base and/or the licence fee payable by the distributor excepting mutual negotiations. The position is, however, entirely different in addressable systems of transmission in which the computerized subscriber management system keeps record of every single viewer watching every channel given by the distributor. Unlike analogue mode, in addressable 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....
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....broadcaster may enter into a negotiated agreement with any distributor. To put it conversely, the broadcaster cannot enter into any negotiated deal with any distributor unless the template of the arrangement, along with its price, consistent with the ratio prescribed under clause 13.2A.12 is mentioned in the RIO. In addition, any volume-related price scheme must also be clearly stated in the RIO so as to satisfy the requirement of clause 3.6 of the Interconnect Regulations. A proper RIO would, thus, form the starting point for any negotiations which would be within the limits allowed by the ratio between the a la carte and the bouquet rates as 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 thei....
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....t part with a pan-India MSO and must, therefore, receive the same treatment. VII. Operative Directions In light of the discussions made above, both Star and Taj, as well as the other broadcasters who have joined the proceedings as intervenors, are directed to issue fresh RIOs, in compliance with the Interconnect Regulations, as explained in this judgment within one month from the date this order becomes operational and effective. It will be then open to the Petitioner to execute fresh interconnect agreements with Star and Taj, and with any other broadcasters on the basis of their respective RIOs or on negotiated 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 Peti....
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....not be used as the means to completely step out of the Regulations. It would be plainly opposed to any common sense principle to first set out an elaborate cumbersome regulatory architecture, only to allow parties to opt out of it as will. At the same time, we are conscious that the present judgment may unsettle the way in which various parties in the broadcasting sector have entered into existing agreements. We are further conscious that while the TRAI has taken a position broadly in line with our conclusions in this case, that has not always been the case. As the Amicus Curiae and the counsel for the Petitioner 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 be....
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....ated Broadcasting Code instead of the large number of Regulations dealing with different aspects of the service and each having undergone numerous amendments. In order to make a serious effort in that direction, TRAI would be required to get hold of all the negotiated interconnect agreements between the broadcasters and the distributors of channels, which the broadcasters are in any event obliged to submit to TRAI. The analysis of the commercial terms of the negotiated agreements would give TRAI a clear picture of the market prices of the broadcasters' channels. A comparison of the prices in the negotiated 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....
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....r the broadcasting sector not only in India but in some other jurisdictions as well. In the result, Petition No.295(C) of 2014 (along with all applications pending in it) is disposed of in the above terms. Petition No.526(C) of 2014 is held back and kept pending as directed above. 23. Having ascertained that the decision in CCI v. Bharti Airtel applies to in personam/inter party disputes, we propose to juxtapose the decision in the said case with that of the grievances of NSTPL. It is NSTPL's case that its grievances in so far as price discrimination is concerned have already been decided in the 7th 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 ....
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....to discharge the burden of showing how it is "similarly situated" before it can avail itself of the incentives/rates/bundles/bouquets offered to other similarly situated entities. In so far as findings specific to NSTPL's claims of parity/nondiscrimination and disclosure are concerned, the TDSAT specifically directed that NSTPL will continue to be bound by Star RIO No.2 and that the determination of NSTPL's payment liability under Star RIO No.2 requires evidence, which shall be determined in the Second TDSAT Petition. NSTPL has admittedly raised allegations of price discrimination, 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 ha....
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....ct the broadcasting sector as a whole. For this reason, all stakeholders were allowed to intervene in the First TDSAT Petition. After various stakeholders intervened, the five issues that were eventually framed in the First TDSAT Petition were industry-wide/ general issues. Of these issues, not one relates to the specific conduct of Media Pro, Star or Taj. In Part IV of the 7th December, 2015 Order , TDSAT noted various facts concerning the broadcasting sector as a whole. Of these facts, not one relates to NSTPL or the Petitioners' market position in the 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....
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....ircumstances of this case, since the effect of this judgment may be to unsettle a number of existing agreements and necessitate re-negotiation..." 28. The 7th December, 2015 Order further expressly noted: "111. 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 broadcasters, Star and Taj, for their signals received by it during the pendency of the petitions before the Tribunal and further until execution of fresh agreements in terms of this judgment or in terms of fresh Regulations, if any, framed by TRAI. It will not be fair that the broadcasters should continue to supply signals to the petitioner without any payment for the next several months. It is, therefore, necessary to make some interim arrangement under which the petitioner should make payment of licence fees to the two broadcasters 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....
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....1) of the Act. This meant that a prima facie finding AAEC would be an essential and mandatory finding before CCI could direct investigation. However, the Impugned Order lacks this necessary finding. In our considered opinion, the Impugned Order cannot be sustained on this count alone. In this respect, it would be necessary to place reliance on the Supreme Court's decision in CCI v Steel Authority of India (supra) and the following findings therein: "93. We may also usefully note that the functions performed by the Commission under Section 26(1) of the Act are in the nature of preparatory measures in contrast to the decision-making process. That is the precise reason that the legislature has used the word "direction" to be issued to the Director General for investigation in that provision and not that the Commission shall take a decision or pass an order directing inquiry into the 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 c....
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....asoned. " 31. The aforesaid decision of the Supreme Court as also various other decisions cited before us clearly lay down that the formation of an opinion is a sine qua non for CCI to exercise its jurisdiction. 32. Further, whilst considering a contravention of Section 3(4) of the Act, CCI ought to render a prima facie finding as to the existence of an agreement refusing to deal and that such agreement causes/is likely to cause AAEC in India. However, as already held by us hereinabove, such material finding is lacking in the Impugned Order. Faced with this difficultly, CCI has attempted at defending the Impugned Order by stating that it evidently contains an analysis of whether Star and Sony are in dominant positions in the relevant market. CCI admits and accepts that the Impugned Order assesses the conduct of Star and Sony under Section 4 of the Act, and therefore, the Impugned 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 w....
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....truction contained in clauses (a) to (d)." 33. 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. However, there is no finding that the Petitioners have refused to produce, supply, distribute, store or trade in goods or provision of services with/to NSTPL. CCI was under an obligation to arrive at a prima facie finding that the conduct of the Petitioners 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 absent. 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....
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....e clear mandate and regulatory regime and adjudicatory body prescribed under the TRAI Act, which bars the jurisdiction of the Respondent No. I to adjudicate upon issues which are within the scope of TRAI Act and Ld. TDSAT." 36. Additionally, Star has taken a specific ground in its Writ Petition contending that the rights and obligations of the parties under the TRAI Act are still pending adjudication under the TRAI Act and that the TDSAT is still considering the issue of discrimination and denial of incentive scheme in the Second TDSAT Petition. At this stage, it is pertinent to note that none of these grounds taken by Star has been contravened by NSTPL in as much as NSTPL has not even chosen to file a Reply to the Writ Petitions. 37. It was Mr. Andhyarujina's next argument that Star RIO No.2 was signed by NSTPL under protest. 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 ....
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....l interference under Article 226 of the Constitution. As per the RJIL as well as CCI, the High Court could not have entertained the writ petition against an order passed under Section 26(1) of the Competition Act which was a pure administrative order and was only a prima facie view expressed therein, and did not result in serious adverse consequences. It was submitted that the finding of the High Court that such an order was quasi-judicial order is not only erroneous but it is contrary to the law laid down in SAIL [CCI v. SAIL, (2010) 10 SCC 744]. The respondents, on the other hand, have submitted that the judgment in the above case had no application in the instant case as it did not deal with the sector that is regulated by a statutory authority. Moreover, such an order was quasi-judicial in nature 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 ma....
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....n appealable before the Tribunal. Even if it is a direction under any of the provisions and not a decision, conclusion or order passed on merits by the Commission, it is expected that the same would be supported by some reasoning. At the stage of forming a prima facie view, as required under Section 26(1) of the Act, the Commission may not really record detailed reasons, but must express its mind in no uncertain terms that it is of the view that prima facie case exists, requiring issuance of direction for investigation to the Director General. Such view should be recorded with reference to the information furnished to the Commission. Such opinion should be formed on the basis of the records, including the information furnished and reference made to the Commission under the various provisions of the Act, as aforereferred. However, other decisions and orders, which are not directions simpliciter and determining the rights of the parties, should be well-reasoned analysing and deciding the rival contentions 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 a....
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....07) 8 SCC 559], this Court held as under: (SCC pp. 569 & 571, paras 26-28 & 36) "26. The learned counsel for the appellant Company submitted that the fact as to "paid-up share capital" of rupees one crore or more of a company is a "jurisdictional fact" and in absence of such fact, the court has no jurisdiction to proceed on the basis that the Rent Act is not applicable. The learned counsel is right. The fact as to "paid-up share capital" of a company can be said to be a "preliminary" or "jurisdictional fact" and said fact would confer jurisdiction on the court to consider the question whether the provisions of the Rent Act were applicable. The question, however, is whether in the present case, the learned counsel for the appellant tenant is right in submitting that the "jurisdictional fact" did not exist and the Rent Act was, therefore, applicable. 27. Stated simply, the fact or facts upon which the jurisdiction of a court, a tribunal 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 ....
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.... whilst passing of the Impugned Order. 42. Lastly, we now deal with the two documents on EU Competition Law tendered by Mr. Sundaresan during his arguments. In so far as these documents are concerned, we note that firstly, the document titled 'Refusals to Deal 2007' dated 3rd September, 2009 states that under EU law, the term "refusal to deal" "refusal to supply" refers to a situation in which one firm refuses to sell to another firm, is willing to sell only at a price that is considered "too high", or is willing to sell only under conditions that are deemed unacceptable. It further explains that such situations are analyzed by reference to Article 102 of the Treaty on the Functioning of the European Union ("TFEU"). Article 102 of the TFEU deals with unilateral conduct of dominant firms which act in an abusive manner. On a reading of Article 102 of the TFEU, it appears that the sine qua non for the application of Article 102 is that the enterprise from whom supply is requested must enjoy substantial market power in the market for the refused input, not simply by reference to its market share but also by taking account of the full range of constraints which it faces, and in....