9911796707
TMI Blog2006 (4) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not in dispute that in terms of the agreement, it was stipulated that holders of 10 licences, which were planned for the city of Mumbai, would co-locate the transmission infrastructure on a common transmitter tower, as required in Clause 14 of the Licence Agreement, as also Article 7. 1(i) of the Schedule (C) of the said Licence Agreement. Pursuant to or in furtherance of the said scheme, the cost of creating the common infrastructure to transmit from a common transmission tower was to be shared by the ten licensees in Mumbai. It is admitted that five licensees who were successful bidders in the auction process defaulted and did not sign the agreements for grant of licences in Mumbai. Having regard to the default on the part of the said five bidders, the costs of co-locating on a common transmission tower for the remaining five licensees was almost doubled. The Appellant herein, thereafter, issued guidelines permitting the five licensees in Mumbai to broadcast from interim independent facilities for an interim period of 24 months, during which period the five licensees were required to set up a common transmission tower. 3. It is also not in dispute that the said guidelines w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said amount was accepted or not. 5. The Appellant, by an order dated 20.5.2003, revoked the licence stating: In continuation of our earlier letter dated 2.5.2003, I am directed to inform you that you have failed to pay the 2nd year's licence fees within the prescribed period, your licence stands revoked and therefore you should stop broadcasting immediately. The Appellant, thereafter, invoked the Bank Guarantee and encashed the same on 28.5.2003. The Respondent, questioning the validity of the said order of revocation of licence, filed a writ petition before the Delhi High Court, which was marked as WP(C)No.4195 of 2003. An interim order was passed by the Delhi High Court on 2.7.2003 directing the Appellant herein to permit the Respondent to broadcast until further orders and that from the amount recovered through invocation of the Bank Guarantee, the Appellant would be permitted to appropriate the sum towards licence fee for the period of broadcasting as per the interim orders. The High Court also extended the operation of the interim order on 3.9.2003, subject to the condition that the Respondent herein deposits a sum of ₹ 1 crore. Yet again, by an order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent was illegal. It was observed: We are informed that during the interregnum the Respondent/Government had come out with a new policy which entitles the existing licence holders to migrate from fixed licence fee regime to revenue sharing regime which the petitioner submits the other Licensees similarly situated have been permitted. If that be so, the petitioner shall also be entitled to the said benefit of the change in licence fee. However, since petitioner's bank guarantee has been appropriated towards non-payment of licence fee for the period for which the licence fee was payable, the petitioner shall now on demand from the respondents furnish a bank guarantee as required under the terms and conditions of the licence. 9. The licence agreement was entered into on 27.10.2000 between the parties herein. The said licence had four Schedules. Schedule (C) appended to the said agreement laid down the terms and conditions of the licence. Clause 1 of the said agreement reads as under: 1. Unless otherwise mentioned in the subject of context appearing hereinafter all the Schedules i.e. A B C & D, annexed hereto including the tender documents, Letter of Intent and the guideli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or may encash the bank guarantee without any notice in any of the following conditions: i) If the licensee fails to deposit the licence fee within 7 days of the beginning of the each year. ii) If the licence stops the service without giving one year's notice under Clause 12.3. iii) If the licensee is declared or applies for being declared insolvent or bankrupt. 11. Mr. A. Sharan, learned Additional Solicitor General of India appearing on behalf of the Appellant submitted that having regard to the provisions contained in Clause 1.2 and Clause 12.1 of the terms of the licence, it is evident that the condition precedent for grant of 30 days' notice as also an opportunity of hearing, were required to be complied with only in the cases of breach of any of the terms and conditions of agreement and not in relation to the default in payment of licence fee as Clause 12.1 dealt with different situation. It was also submitted that the right of the Appellant in terms of Clause 1.2 of the terms of licence contained in Schedule-C thereof provides first to distinguish the powers of the Appellant, i.e., to revoke the licence and to encash and forfeit the bank guarantee without givin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ituated should make their own arrangements for broadcasting of the events. Clause 1.2 of the agreement provided for the mode and manner as regard construction of the said agreement in case of any conflict between the corresponding provisions of the schedule and the body of the agreement. 14. In view of the aforementioned express stipulations contained in the agreement, it is required to construe Clause 9 of the agreement at the outset independently. By reason of the said provision revocation of the licence both for breach of terms and conditions as also for default in payment of any consideration must precede 30 days' written notice and a reasonable opportunity of hearing. How the said provision can be given effect to would depend on the construction of terms and conditions of the licence. By reason of Clause 1.2, as contained in the Schedule-C appended thereto, the licensor had been conferred with a power to revoke the licence as also encash and forfeit the bank guarantee without any notice. The expression 'and' occurring in between the words 'right to revoke the licence' and encash and 'forfeit the bank guarantee' must be read as two separate clauses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. It was not a notice in the true sense of the term as consequences for non-payment had not been stated therein. The said letter was issued only by way of reminder. 17. We have noticed hereinbefore that only because the licensee makes a default, the same would not mean that the licence should stand revoked without any further notice. Once it is held upon construction of the relevant provisions of the conditions of licence as also the terms thereof that 30 days' notice was required to be given before a licence is revoked, it cannot be said that the said letter dated 6.3.2003 satisfied the requirements thereof. We may consider the matter from another angle. By reason of the provisions contained in Clause 12.1 of the terms of the licence, not only the revocation of licence for breach of any conditions contained in any agreement; but also prevention thereof on any other ground which would include the default in payment of licence fee would result in the consequence of debarring the licensee from applying directly or indirectly for any FM Radio Station in future. The consequence of the revocation of the said licence, therefore, is penal in nature. Such penal provision is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expiry of the terms of the licence, other licensees allegedly continued to do the same, although the tenure of licence expired, it is in that situation, the Respondent took the stand that it should be treated alike the other four licensees, who are continuing to broadcast despite the fact that no further extension had been granted even to them by the Union of India, although they had paid the revenue therefore. 20. Our attention, in this connection, has been drawn to the provisions as regard migration for Phase-I to Phase-II, as laid down in the policy decision, which is as under: 1. Licensees of Phase-I, who have actually operationalized their channels would be given the option to Migrate to Phase 2 Policy Regime. They will have to exercise their initial option by the prescribed date to automatically migrate to Phase 2 Policy regime in accordance with the terms and conditions of migration or continue under Phase-I or surrender their licences with one month's notice. This Court at this stage is not concerned with the question as to whether the Respondent has fulfilled the said conditions or not; but admittedly, the Tribunal proceeded on the basis that the licence having n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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