STAR INDIA PRIVATE LIMITED versus DEPARTMENT OF INDUSTRIAL POLICY AND PROMOTION & ORS. on 30 October 2018

128 SUPREME COURT REPORTS [2018] 14 S.C.R.[2018] 14 S.C.R. 128

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STAR INDIA PRIVATE LIMITED

v.

DEPARTMENT OF INDUSTRIAL POLICY AND PROMOTION& ORS.

(Civil Appeal Nos. 7326-7327 of 2018)

B

OCTOBER 30, 2018

[R. F. NARIMAN AND NAVIN SINHA, JJ.]

Telecommunication (Broadcasting and Cable) ServicesInterconnection (Addressable Systems) Regulations, 2017 –CTelecommunication (Broadcasting and Cable) Services (Eighth)(Addressable Systems) Tariff Order, 2017 – Constitutionality of theRegulation and Tariff Order challenged – Held: The Regulationand the Tariff Order were made keeping the interests of thestakeholders and the consumers in mind and are intra vires theregulatory power contained in s.36 of the TRAI Act.D

Telecom Regulatory Authority of India Act, 1997:ss.11(1)(a)(iv), 11(1)(b), 36(1) – Role of TRAI – TRAI acts as aregulatory authority, which looks to the interest of both broadcasterand subscriber so as to provide a level playing field for both – Thebroadcaster is free to provide whatever content he chooses for theETV channels that he chooses to transmit to the ultimate consumer –At no stage is content of a TV channel sought to be regulated, andthat pricing relating to TV channels laid down in the Regulationand Tariff Order is a balancing act between the rights ofbroadcasters and the interests of consumers – The broadcaster isFfree to arrange pricing of his TV channels so long as they are non-discriminatory and do not otherwise have the effect of unreasonablyrestricting the choice of a subscriber to choose bouquet or a-la-carte channels – Telecommunication (Broadcasting and Cable)Services Interconnection (Addressable Systems) Regulations, 2017– Clause 2(j).G

Copyright Act, 1957: s.2(dd) – The case of appellants wasthat content that is carried by transmission from the broadcastersto the ultimate consumer is regulated only by the Copyright Act andany royalties charged are governed only by Copyright Act and thisbeing the case, when TRAI fixes rates and/or interferes with content, H

it is trespassing into the exclusive domain set out by Parliamentunder the Copyright Act and since the TRAI Act and the CopyrightAct, both are Acts passed by Parliament, they have to be harmonised,and such harmony can be maintained if TRAI is kept out altogetherfrom the domain covered by the Copyright Act – Held: When thedefinitions of “broadcast” in s.2(dd) of the Copyright Act and of“broadcasting services” in Clause 2(j) of the impugned Regulationare compared, it is clear that the words “intended to be received bythe general public either directly or indirectly” are completely missingfrom the definition of “broadcast” contained in the Copyright –Therefore, copyright is meant to protect the proprietary interest ofthe owner, which in the instant case is a broadcaster, in the “work”,i.e. the original work, its broadcast and/or its re-broadcast by him– The interest of the end user or consumer is not the focus of theCopyright Act at all – On the other hand, the TRAI Act has to focuson broadcasting services provided by the broadcaster that impactthe ultimate consumer – The two Acts operate in different fields – Inthis view of the matter, the Copyright Act will operate within its ownsphere, the broadcaster being given full flexibility to eitherindividually or in the form of a society charge royalty orcompensation – TRAI, while exercising its regulatory functionsunder the TRAI Act, does not at all, in substance, impinge upon anyof these rights, but merely acts, as a regulator, in the public interest,of broadcasting services provided by broadcasters and availed ofby the ultimate consumer – Telecom Regulatory Authority of IndiaAct, 1997 – Telecommunication (Broadcasting and Cable) ServicesInterconnection (Addressable Systems) Regulations, 2017.

Interpretation of statutes: Harmonious construction –Copyright Act, 1957 – Telecom Regulatory Authority of India Act,1997 – Held: Both the Copyright Act as well as the TRAI Act arecentral enactments which do not expressly provide that the oneoverrides the other – In this situation, both the Acts are to beharmonized in the event of any clash/conflict between the two sothat both may be given effect to – Since the Telegraph Authority,acting under the Telegraph Act and the Indian Wireless TelegraphyAct, is required to act in public interest, the jurisdiction of the saidAuthority is left untrammeled by the provisions of the TRAI Act – Itcan thus be seen that TRAI and the Telegraph Authority both act inpublic interest – The TRAI Act, the Telegraph Act and the Indian AB

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AWireless Telegraphy Act, being statutes in pari materia, form a Code,insofar as wireless telegraphy and broadcasting is concerned – Ifin exercise of its regulatory power under the TRAI Act, TRAI were toimpinge upon compensation payable for copyright, the best way inwhich both statutes can be harmonized is to state that, the TRAI Act,being a statute conceived in public interest, which is to serve theBinterest of both broadcasters and consumers, must prevail, to theextent of any inconsistency, over the Copyright Act which is an Actwhich protects the property rights of broadcasters – Therefore, tothe extent royalties/compensation payable to the broadcasters underthe Copyright Act are regulated in public interest by TRAI under theCTRAI Act, the former shall give way to the latter.

Dismissing the appeals, the Court

HELD: 1. The provisions of the TRAI Act have to beviewed in the light of protection of the interests of both serviceproviders and consumers. This being so, it is clear that noDconstricted meaning can be given to the provisions of this Act.Under Section 11(1)(a)(iv) of the TRAI Act, one of the functionsof the Authority, though recommendatory, is to facilitatecompetition and promote efficiency in the operation oftelecommunication services (which includes broadcastingEservices) so as to facilitate growth in such services. Under Section11(1)(b), the terms and conditions of inter-connectivity betweendifferent service providers have to be fixed, which necessarilyincludes terms that relate not only to carriage simpliciter but toall terms and conditions of interconnectivity between broadcaster,MSO, Cable TV operator and the ultimate consumer, so as toFensure that the object of the Act is carried out, namely, that bothbroadcasters and consumers get a fair deal. Section 11(2) makesit clear that the Authority may, from time to time, notify the ratesat which telecommunication services, including broadcastingservices, within India and outside India, shall be provided underGthis Act. The plain literal language of Section 11(2) makes it clearthat rates at which broadcasting services are offered within andoutside India can be fixed by TRAI. It is clear therefore thatwhen rates are fixed after several rounds of consultations betweenvarious service providers and consumers, looking to the interestof each, it is impossible to say that any broadcaster’s rights haveHbeen impinged upon. [Para 30][177-G-H; 178-A-F]

Avishek Goenka v. Union of India (2012) 5 SCC 275 :[2012] 5 SCR 547 ; Hotel & Restaurant Assn. v. StarIndia (P) Ltd. (2006) 13 SCC 753 : [2006] 9 Suppl. SCR 602 – relied on.

Petroleum and Natural Gas Regulatory Board v.Indraprastha Gas Ltd. (2015) 9 SCC 209 : [2015] 7SCR 215 – held inapplicable

2. At no stage is content of a TV channel sought to beregulated, and that pricing relating to TV channels laid down inthe Regulation and Tariff Order is a balancing act between therights of broadcasters and the interests of consumers, which hasnot been impugned on the ground that any right or fundamentalright is violated, but only on the ground that the Regulationas well as the Tariff Order are outside the “jurisdiction”of TRAI. The power under Section 36(1) of the Act is verywide and not constricted by the provisions of Section 11.[Para 30, 32][178-F-G; 179-C]

BSNL v. TRAI (2014) 3 SCC 222 : [2013] 12 SCR 999 ;Hotel & Restaurant Assn. v. Star India (P) Ltd. (2006)13 SCC 753 : [2006] 9 Suppl. SCR 602 – relied on.

3. Both the Regulation as well as the Tariff Order havebeen the subject matter of extensive discussions between TRAI,all stake holders and consumers, pursuant to which most of thesuggestions given by the broadcasters themselves have beenaccepted and incorporated into the Regulation and the TariffOrder. The Explanatory Memorandum shows that the focus ofthe Authority has always been the provision of a level playingfield to both broadcaster and subscriber. For example, when highdiscounts are offered for bouquets that are offered by thebroadcasters, the effect is that subscribers are forced to takebouquets only, as the a-la-carte rates of the pay channels that arefound in these bouquets are much higher. This results in perversepricing of bouquets vis-à-vis individual pay channels. In theprocess, the public ends up paying for unwanted channels, therebyblocking newer and better TV channels and restrictingsubscribers’ choice. It is for this reason that discounts are capped.While doing so, however, full flexibility has been given tobroadcasters to declare the prices of their pay channels on an a- A

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Ala-carte basis. The Authority has shown that it does not encroachupon the freedom of broadcasters to arrange their business asthey choose. Also, when such discounts are limited, a subscribercan then be free to choose a-la-carte channels of his choice. Thus,the flexibility of formation of a bouquet, i.e., the choice of channelsto be included in the bouquet together with the content of suchBchannels, is not touched by the Authority. It is only efforts aimedat thwarting competition and reducing a-la-carte choice that are,therefore, being interfered with. Equally, when a ceiling of INR19 on the maximum retail price of pay channels which can beprovided as a part of a bouquet is fixed by the Authority, theCAuthority’s focus is to be fair to both the subscribers as well asthe broadcasters. INR 19 is an improvement over the erstwhileceiling of INR 15.12 fixed by the earlier regulation which nobodyhas challenged. To maintain the balance between the subscribers’interests and broadcasters’ interests, again the Authority makes it clear that broadcasters have complete freedom to price channelsDwhich do not form part of any bouquet and are offered only on ana-la-carte basis. As market regulator, the Authority states thatthe impugned Regulation and Tariff Order are not written in stonebut will be reviewed keeping a watch on the developments in themarket. Therefore, the Regulation and the Tariff Order haveEbeen made keeping the interests of the stakeholders and theconsumers in mind and are intra vires the regulation powercontained in Section 36 of the TRAI Act. [Para 37][189-C-H;190-A-C]

Entertainment Network (India) Ltd. v. Super CassetteFIndustries Ltd. (2008) 13 SCC 30 : [2008] 9 SCR 165– referred to

4. The interest of the end user or consumer is not the focusof the Copyright Act at all. On the other hand, the TRAI Act hasto focus on broadcasting services provided by the broadcasterGthat impact the ultimate consumer. The focus, therefore, of TRAIis that of a regulatory authority, which looks to the interest ofboth broadcaster and subscriber so as to provide a level playingfield for both in which regulations can be laid down which affectthe manner and carriage of broadcast to the ultimate consumers.Once the relative scope of both the enactments is understood,H

there can be no difficulty in stating that the two Acts operate indifferent fields. The broadcaster is free to provide whatevercontent he chooses for the TV channels that he chooses totransmit to the ultimate consumer. The broadcaster is free toarrange pricing of his TV channels so long as they are non-discriminatory and do not otherwise have the effect ofunreasonably restricting the choice of a subscriber to choosebouquet or a-la-carte channels. The impugned Regulation andTariff Order have been passed by a regulatory authority afterapplying its mind to the objections of the various stakeholdersinvolved aftqer which the Regulation and Tariff Order have beenlaid down which have, by and large, been initially acceded to bythe broadcasters themselves. In this view of the matter, theCopyright Act will operate within its own sphere, the broadcasterbeing given full flexibility to either individually or in the form of asociety charge royalty or compensation for the three kinds ofcopyright. TRAI, while exercising its regulatory functions underthe TRAI Act, does not at all, in substance, impinge upon any ofthese rights, but merely acts, as a regulator, in the public interest,of broadcasting services provided by broadcasters and availed ofby the ultimate consumer. [Paras 63, 64][210-F-H; 211-A-E]

5. Both the Copyright Act as well as the TRAI Act arecentral enactments which do not expressly provide that the oneoverrides the other. In this situation, a basic principle ofinterpretation of statutes is that both Acts be harmonized in theevent of any clash/conflict between the two so that both may begiven effect to. Since the Telegraph Authority, acting under theTelegraph Act and the Indian Wireless Telegraphy Act, is requiredto act in public interest, the jurisdiction of the said Authority isleft untrammeled by the provisions of the TRAI Act. It can thusbe seen that TRAI and the Telegraph Authority both act in publicinterest. The TRAI Act, the Telegraph Act and the IndianWireless Telegraphy Act, being statutes in pari materia, form aCode, insofar as wireless telegraphy and broadcasting isconcerned. If in exercise of its regulatory power under the TRAIAct, TRAI were to impinge upon compensation payable forcopyright, the best way in which both statutes can be harmonizedis to state that, the TRAI Act, being a statute conceived in publicinterest, which is to serve the interest of both broadcasters and AB

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Aconsumers, must prevail, to the extent of any inconsistency, overthe Copyright Act which is an Act which protects theproperty rights of broadcasters. Therefore, to the extentroyalties/compensation payable to the broadcastersunder the Copyright Act are regulated in public interest by TRAIunder the TRAI Act, the former shall give way to the latter.B[Paras 65, 66, 67][211-F-G 212-B-E]

Star India Pvt. Ltd. v. TRAI (2018) 146 DLT 455 ;Secretary, Ministry of Information & Broadcasting,Govt. of India & Ors. v. Cricket Association of Bengal(1995) 2 SCC 161 : [1995] 1 SCR 1036 ; DeepakCTheater v. State of Punjab 1992 Supp (1) SCC 684 :[1991] 3 Suppl. SCR 242 ; Cellular Operators Assn.of India v. TRAI (2016) 7 SCC 703 : [2016] 9 SCR 1 –relied on Case Law Reference D

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 7326-7327 of 2018.

From the Judgment and Order dated 02.03.2018 & 23.05.2018Gof the High Court of Judicature at Madras in Writ Petition Nos. 44126and 44127 of 2016.

With

Civil Appeal Nos. 7328-7329/2018.

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P. S. Narasimha, Vikramjit Banerjee, ASGs, P. Chidambaram,Dr. A. M. Singhvi, Neeraj Kishan Kaul, Gopal Jain, Rakesh Dwivedi,Vikas Singh, K. V. Vishwanathan, Krishnan Venugopal, Ramji Srinivasan,Shyam Diwan, Sr. Advs., Saikrishna, R. N. Karanjawala,Ms. Ruby Singh Ahuja, Siddharth Chopra, Ms. Sneha Jain,Utsav Trivedi, Swikirti Singhania, Utkarsh Maria, Mrs. ManikKaranjawala, Abhishek Singhvi, Ms. Gitanjali Miriam, Sanjit Ranjan,Samar Singh Kachwaha, Chanan Parwani for M/s. Karanjawala & Co.,Sanjay Kapur, Saket Singh, Ms. Sheena Taqui, Ms. Megha Karnwal,Ms. Mansi Kapur, Saif-ud-din Shams, S. S. Shamshery, Ms. ShraddhaDeshmukh, Anmol Chandan, V. C. Shukla, Rahul G. Tanwani,Mohit Seth, Gurmeet Singh Makker, Jayant Mehta, Sukant Vikram,Arjun Suresh, Nasir Hussain, Anshumaan Sahni, Abhinav Ankit,Dhananjay Bhaskar Rai, Venkataraman R., Tuba Mohdi, Abhinav Ankit,Vibhu Tiwari, Sumit R. Sharma, Anshuman Sharma, Vivek Sarin,Ms. Anamika Jha, Satish C. Kaushik, Ms. Aakarshan Aditya,Balraj Dewan, Ms. Liz Mathew, Ms. Garima Prashad, Mohit Paul,Anugrah Niraj Ekka, Obhirup Ghosh, Viveak Ranjan, Tejveer Bhatia,Rohan Swarup, Kunal Vats, Gaurav Sharma, Harpreet Singh Sandhu,Vikram Singh, Ms. Bhanu Pant, Abhishek Malhotra, Ms. Niyati Asthana,Renjit B. Marar, A. Karthik, Advs. for the appearing parties..

The Judgment of the Court was delivered by

R. F. NARIMAN, J.

1. The present civil appeals raise a challenge to certain clausesof the Telecommunication (Broadcasting and Cable) ServicesInterconnection (Addressable Systems) Regulations, 2017 (hereinafterreferred to as the “Regulation”) notified on 3.3.2017 and theTelecommunication (Broadcasting and Cable) Services (Eighth)(Addressable Systems) Tariff Order, 2017 (hereinafter referred to asthe “Tariff Order”) dated 3.3.2017 made under the Telecom RegulatoryAuthority of India Act, 1997 (hereinafter referred to as the “TRAI Act”).Since regulations made under the TRAI Act were under challenge, awrit petition was filed before the Madras High Court in which the mainissues that arose before the Division Bench were as follows:-

a. Whether the Telecom Regulatory Authority of India (hereinafterreferred to as “TRAI”) has the power to regulate only the ‘meansof transmission’, viz. the ‘carriage’ aspect of broadcasting, and AB

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Adoes not have the power to regulate the ‘content’ of the broadcast(i.e. the channel and/or its constituent programmes)?

b. Whether the impugned clauses, in fact, and in effect, regulatethe content of the broadcast (i.e. the channel and/or its constituentprogrammes)?

B

c. Whether the impugned clauses have a direct effect on the pricingand marketing of a television channel by the broadcaster and henceis an illegal interference with the content of the broadcast (i.e. thechannel and/or its constituent programmes)?

The appellants have contended that the impugned clauses haveCthe effect of regulating programmes and television channels, their pricingand their marketing and manner of offering/ bundling in the followingillustrative manner, which is beyond the scope of TRAI’s jurisdiction ofregulating “means of transmission”:

a. TRAI has effectively fixed a uniform maximum retail price forDeach TV channel at INR 19/-;

b. TRAI has stipulated that a television channel, which isindividually priced at more than INR 19/- cannot be included in acollection of television channels (commonly referred to as a“bouquet”) and can only be offered on an individual/ a-la-carte/Estand-alone basis;

c. TRAI has stipulated that the price of a bouquet of televisionchannels shall not be less than 85% of the sum of a-la-carte pricesof television channels comprised in the bouquet;

d. TRAI has stipulated that the sum of discount on televisionFchannels and the distribution fee paid by broadcasters to adistributor of television channels, cannot exceed 35% of themaximum retail price of the television channel;

e. Television channels cannot be priced differently for differentdistribution platforms; G

f. Channels of one broadcaster cannot be offered by anotherbroadcaster in their bouquet of television channels, even afterobtaining due authorization;

g. Promotional schemes (i) can only be offered on a-la-carte pricesfor offering television channels and not on bouquet prices, (ii)cannot exceed 90 days at a time, and (iii) can be offered onlytwice in a year;

h. High definition and standard definition channels cannot be inthe same bouquet of television channels;

i. Pay channels and free to air channels cannot be in the samebouquet.

2. The Division Bench consisting of M. Sundar, J. and Chief JusticeIndira Banerjee differed in their conclusions. As per M. Sundar, J., itwas held:- “8(a). Owing to the narrative, discussion and all that have beenset out supra, those of the impugned provisions in the saidregulations and said tariff order which touch upon content of theprogrammes of broadcasters are liable to be struck down as notin conformity with the parent Act / plenary Act. Therefore, clauses6(1), second proviso to 6(1), proviso to 7(2), 7(4), first proviso to7(4) and 10(3) of the said Regulations and clauses 3(1), 3(2)(b),second proviso to 3(2)(b), first proviso to 3(3), second proviso to3(3), third proviso to 3(3), fourth proviso to 3(3), fifth proviso to3(3), sixth proviso to 3(3) and 3(4) of the said tariff order arestruck down as not in conformity with the parent act, i.e., TRAIAct.

8(b). With regard to the other two impugned provisions, as wewere given to understand in the course of the hearing that theyare relevant and necessary for some other clauses also other thanthose which have been put in issue in the instant writ petitions,they deserve to be saved to the extent they survive and serve thepurpose other than serving implementation or any other purposeof the provisions which we have struck down. Therefore, theother impugned provisions, i.e., clause 11(2) in the said Regulationsas also clause 4(2) in the said tariff order will continue to be in thebooks, but cannot be pressed into service for anything to do withthe provisions which we have struck down supra. In other words,these provisions, i.e., clause 11(2) in the said Regulations as alsoclause 4(2) in the said tariff order can be operated if it can beoperated for other provisions of the said Regulations and saidtariff order, other than those which we have struck down.”

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3. Differing from M. Sundar, J., the learned Chief Justice held:-

“69. I am unable to agree with the conclusion of M. Sundar, J.that the provisions of the impugned Regulation and the impugnedTariff Order are not in conformity with the TRAI Act. In myview the impugned provisions neither touch upon the content ofBprogrammes of broadcasters, nor liable to be struck down.However, the clause putting cap of 15% to the discount on theMRP of a bouquet is arbitrary. The said provision is, in my view,not enforceable. In my considered view, the challenge to theimpugned Regulation and the impugned Tariff Order fail.

70. Since we have not been able to agree, the writ petitions maybe placed before a third Judge. Since the Chief Justice hasdelivered the dissenting judgment, the matter may be placed beforethe next available Judge in order of seniority for nomination of theJudge before whom the matter may be placed.”

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D4. The third Judge who therefore resolved the controversy infavour of the present respondents was M.M. Sundresh, J. After anexhaustive analysis of the arguments and the Acts in question, the thirdlearned Judge sided with the Hon’ble Chief Justice and held:- “27.1. In her short, yet clear decision, the Hon’ble Chief JusticeEhas held that there is sufficiency of the power under the TRAIAct as against the Indian Copyright Act, 1957. They travel intheir respective paths, not intended to cross. The scope of theamendments made in the year 2012 along with Section 37 wascorrectly dealt with. This Court is of the view that the CopyrightAct has rightly taken note of being the one which gives succourFto the copyright holder as against the licensee, who may also be aBRR holder. It was rightly held that the provisions deal with theprotection of the right of the copyright holder. It is rather pertinentto keep in mind the discussion on the Copyright Act, 1957, whichis to be seen contextually qua the issue i.e., field being occupied.GThis Court also does not find anything wrong with the findinggiven on the so called concession given by the learned counsel forthe TRAI being inconsequential, as the very jurisdiction of theAct itself was taken for consideration. The finding has to be seencontextually along with the other issues including the overall standtaken in the counter affidavit of respondents 1 to 4. Similarly the E

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self imposed restrictions while invoking the extraordinaryjurisdiction under Article 226 of the Constitution of India, deservesto be concurred with.

27.2. Though a submission has been made on the decision arrivedat with respect to the fixation of cap at 15% discount on the MRPof the bouquet and the discounts given under the tariff order, theaforesaid decision cannot be a ground to hold that the ultimateconclusion arrived at on the other issues would necessarily followsuit. After all, as a reference Court, this Court is concerned withthe views expressed by either of the learned Judges on the pointsof difference. Accordingly, the dissenting judgment standsconcurred.

28. In the result, this reference qua points of difference standsordered concurring with the dissenting judgment. No costs.”

5. Dr. A.M. Singhvi, learned Senior Advocate appearing on behalfof the appellants, has referred to several statutes and judgments in thecourse of his detailed submissions. According to the learned SeniorAdvocate, the TRAI Act was amended in 2000, as a result of which theTRAI Act was extended to broadcasting services which were undefined.By a Central Government notification dated 9.1.2004, the TRAI Actwas expressly extended to broadcasting services, and certain functionswere allocated to TRAI in addition to those contained in Section 11(1)(a)of the TRAI Act, as also to specify norms and periodicity of revision ofrates of pay channels. According to the learned Senior Advocate, thedefinition of “telecommunication service” contained in Section 2(1)(k)of the TRAI Act only enables TRAI to regulate transmission or receptionof broadcasting services, which essentially relates to regulatory measurestaken for carriage of these signals. According to the learned SeniorAdvocate, his clients, namely, broadcasters, do not have to obtain thepermission of the Government of India for uplinking their programmeswith a particular satellite at a particular frequency, after which permissionhas to be obtained for downlinking such channels. At this point, thebroadcaster, post downlinking, sends the signal to a multi-system operator(hereinafter referred to as an “MSO”), who in turn sends the signal to acable TV operator from which it is beamed to the ultimate consumerwatching the television programmes. For this, the broadcasters pay adistribution fee and a carriage fee for transportation of such signal, thensend the signals to the MSO, who in turn sends it on to the cable TV

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Aoperator, who beams the signal to the ultimate consumer. Distributionfee, carriage fee and networking capacity fee are all payable by thebroadcaster, with which the broadcaster can have no quarrel. Equally,in a situation where direct to home services are provided, instead of theMSO one has persons, like, for example, TATA Sky, who then beam thesignal directly to the consumer via satellite. TRAI under the TRAI ActBcannot restrict pricing, bundling or packaging done by the broadcaster,as TRAI’s functions kick in under the Cable Television Networks(Regulation) Act, 1995 (hereinafter referred to as the “Cable TV Act”)only after the signal reaches the Cable TV operator. According to thelearned Senior Advocate, at a stage anterior to the Cable TV operatorCbeaming signals to the consumers, the broadcasters’ rights are not coveredby the TRAI Act, which regulates only carriage, but by the CopyrightAct, 1957, which regulates content. Dr. Singhvi took us through theStatement of Objects and Reasons for the TRAI Act, the Preamblethereof, and in particular Sections 2(1)(k), 11 and 36, to contend that this

Act is “carriage-centric”, and is thus limited to regulation of service inDtransmission alone and does not extend to or include the subject matteror content of the transmission. The Copyright Act, on the other hand, is“content-centric” and deals with intellectual property rights whichbroadcasters have in the form of both copyright, as well as broadcastreproduction right inter alia under Section 37 of the Copyright Act. HeErelied heavily on the 2012 amendment to the Copyright Act, and inparticular on Chapter 8 of the said Act. According to him, tariff, whichrelates to content, is governed by the Copyright Act and not by the TRAIAct, whereas transmission and delivery to the consumer, namely, carriage,alone pertains to TRAI’s jurisdiction. According to him, the impugnedclauses of the Regulation as well as the Tariff Order impact and haveFthe effect of regulating pricing and terms and conditions of licensing ofTV channels, including their packaging, bundling and other manner ofoffering the said channels and their underlying programmes, being films,TV shows, etc., which are all aspects of intellectual property rightscovered by the Copyright Act. He relied heavily upon the SportsGBroadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007(hereinafter referred to as the “Sports Act”), by way of contrast, andstated that in this Act the definitions of “broadcaster”, “broadcasting”,“broadcasting service” and “content” made it clear that the reach of thisAct was not merely confined to transmission of signal but extended tocontent as well, and argued that the difference therefore in the definitionsH

contained in the Sports Act would show that the reach of the TRAI Actin contrast was limited and did not go to content. He also relied stronglyupon the Cable TV Act and in particular on the definitions of “broadcaster”and “cable operator” therein, as well as Section 4A and 5 thereof, readwith the Rules framed thereunder, which would show that “content”could certainly be regulated by TRAI under the Sports Act, but only inthe manner provided by that Act and from the stage of the cable TVoperator to the consumer and not before. It is thus clear that this beingthe case, the aforesaid regulations are outside the power of TRAI underthe TRAI Act and must thus be struck down.

6. Shri P. Chidambaram, learned Senior Advocate appearing onbehalf of some of the appellants, argued in support of Dr. Singhvi. Hereferred, in particular, to the definitions contained in Sections 2(dd) and2(ff) of the Copyright Act and stated that “broadcast” would only meankeeping in readiness a set of TV channels, which may or may not befurther carried by the MSO of the Cable TV Operator. According tohim, in substance, the impugned Regulation and Tariff Order went beyondthe jurisdiction of TRAI under the TRAI Act in that they sought to regulate“content” which would mean the original work such as a book, whichcould then be made into a film and finally broadcast by the appellants.Anything which impinges upon the aforesaid “content” in terms of making,buying, packaging or marketing, including licensing and assignment, woulddirectly be covered by the Copyright Act and would, therefore, be outsidethe jurisdiction of the TRAI Act. He also strongly relied upon the judgmentof this Court in Petroleum and Natural Gas Regulatory Board v.Indraprastha Gas Ltd., (2015) 9 SCC 209, to state that in a parallelfact circumstance, no tariff could be fixed by the Board for the commodityin question, but only for carriage of the said commodity through pipelines.

7. Shri Rakesh Dwivedi, learned Senior Advocate appearing onbehalf of TRAI, countered each of these submissions. According to thelearned Senior Advocate, a reading of the TRAI Act, together with theStatement of Objects and Reasons, would show that it was an Actconceived in the public interest in order to protect the interests of bothservice providers like the broadcasters here, as well as the consumers.Interest of the consumers of broadcasting services is therefore one ofthe paramount considerations when one comes to the authority orjurisdiction of TRAI under the said Act. According to the learned SeniorAdvocate, from the stage of the teleport from which a TV channel is AB

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Auplinked by a broadcaster to a satellite and then downlinked to an MSO,permissions of the Central Government have to be taken for both uplinkingand downlinking, under guidelines issued, which he took us through. Thesaid guidelines would show that content is certainly regulated at thisstage, as TV channels which are contrary to the security of the state,for example, would not be allowed to be beamed. According to him,Bregardless of whether the teleport from which the broadcaster’s signalis uplinked to a satellite is owned by the broadcaster, or is beamed by aperson other than the broadcaster, a licence under Section 4 of theTelegraph Act and Section 5 of the Wireless Telegraphy Act is a sinequa non for operating a teleport and that therefore it is wholly fallaciousCto say that broadcasters need not be licencees under the Telegraph Actwhen they broadcast signals, either from their own teleport, or inconjunction with the owner of a teleport, which reach the ultimateconsumer in India. According to the learned Senior Advocate, therefore,a constricted reading of the TRAI Act would stultify the nature of the beneficial legislation contained therein, which is to look after consumerDinterests as well. It is clear therefore that the definition of“telecommunication service” in Section 2(1)(k) cannot be read in themanner suggested by Dr. Singhvi, and would include, when it comes tobroadcasters, beaming and transmission of signals from the teleportonwards right up till the stage of the MSO and the cable TV operatorEthereafter. He stressed upon Section 11(1)(b) in particular and statedthat in order to ensure effective interconnection between different serviceproviders, it was necessary to lay down regulations made under Section36 of the Act that balanced the interest of broadcasters with the interestof consumers. He was at pains to point out that at no stage does eitherthe Regulation or the Tariff Order seek to regulate, directly or indirectly,Fthe content of the matter contained in the television channel that is beamed.As an example, he stated that neither the Regulation nor the Tariff Orderinterferes with what could be beamed by the broadcaster, but only to themanner of such beaming, keeping the interest of both the broadcaster aswell as the ultimate consumer in mind. He also took us through theGconsultation papers which preceded the draft regulation which wasframed, and pointed out that most of what was contained in the impugnedRegulation and Tariff Order, was either requested by the broadcastersthemselves or suggested by them to safeguard their interests, whichTRAI has in principle followed. What is interesting to note is that it wasonly at a later stage, before the draft regulation was made, that referencesH

to content and the Copyright Act were made solely as an afterthought.He also relied upon the Cable TV Act and stated that it was important tonote that it was the same regulator, namely, TRAI, who had to regulatethe same signal from broadcaster to MSO, MSO to Cable TV operatorand Cable TV operator to consumer. It would be extremely anomalousto find that from Cable TV operator onwards regulations such as thosemade by TRAI in the present case would pass muster, but not from thestage of broadcaster to MSO and MSO to Cable TV operator. Hemade it clear that the Sports Act would have no application in the presentcase as it dealt with the compulsory broadcast of certain sports eventsby broadcasters, which was why content was referred to in the saidAct. He reiterated that at no stage does TRAI seek to or in fact regulatecontent of what is broadcasted so that any reference to this Act wouldbe wholly irrelevant for the purpose of deciding this case. He also stronglyrelied upon Sections 3AA and 4 of the Telegraph Act to buttress hissubmission. According to him, since the Copyright Act operates in adistinct and separate field from the TRAI Act, equally the red herring ofthe Copyright Act would have no real relevance to the powers andfunctions of TRAI acting under the TRAI Act. He also cited certaindecisions which will be referred to later in this judgment.

8. Shri Vikas Singh, learned Senior Advocate also appearing onbehalf of TRAI, referred to Section 2(1)(k) of the TRAI Act in order toexplain that the main provision and the proviso had to be harmonised inthe manner suggested by the Delhi High Court in Star India Pvt. Ltd.v. TRAI, (2018) 146 DLT 455, and that, so harmonised, it is clear thatthe main provision did not include broadcasting services only for thetime being. The proviso which was added by the Amendment Act of2000 made it clear that the time had come to include broadcasting servicesas well. He further argued that the appellants in the present case hadbeen taking contradictory stands throughout. As an example of suchstand, he referred to an Order of the Competition Commission of Indiadated 27.2.2018, in which he referred to the stand of the appellantsstating that the Competition Commission had no jurisdiction to look intopricing and the manner of offering TV channels, which lies in the domainof the sectoral regulator TRAI and is, therefore, an occupied field. Healso referred to how the analogue system led to great leakages whichled to less revenue and how the movement towards digitisation, therefore,gave broadcasters a great fillip in their revenue. He also referred to theconsultations that went on between all stakeholders and consumers which A

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Aled up to the impugned Regulation, which was a Regulation whichbalanced the interests of broadcasters and consumers.

9. Shri K.V. Vishwanathan, learned Senior Advocate appearingon behalf of the multi-system operators, placed strong reliance onRegulations 3(1) and 3(2) of the impugned Regulation, which, accordingBto him, have not been challenged by the appellants. These regulationsmake it clear that the broadcasters have to offer TV channels on a non-discriminatory basis. The only reason why pricing is referred to in theimpugned Regulation is to fulfil Regulation 3(2), which is to ensure thatthe offer made is non-discriminatory and, therefore, the Regulation andthe Tariff Order read as a whole would, in fact, not impact content at allCbut be regulations for carriage of the signals stricto senso. He relied onjudgments which held that TRAI’s regulatory powers are extremely wide.He also relied upon several provisions of the Copyright Act, includingSection 52(1)(b), which made it clear that there would be no infringementof copyright, assuming the arguments of the appellants to be correct,Dwhen there is transient or incidental storage of a work or performancepurely in the technical process of electronic transmission or communicationto the public.

10. Shri Shyam Divan, learned Senior Advocate, appeared on behalfof direct-to-home companies. He referred to and relied upon variousEprovisions of the Copyright Act, in particular, Section 37 thereof, makingit clear that the broadcast reproduction right referred to is born onlyafter the broadcast which has passed down from the broadcaster throughthe MSO to the cable operator to the consumer and/or through the DTHservice provider to the consumer is over. He stressed the fact that thisright comes in only when a re-broadcast or a subsequent secondFbroadcast takes place after the original broadcast, which would not becovered by the Regulation or the Tariff Order in the present case.

11. Shri Krishnan Venugopal, learned Senior Advocate appearingfor some of the consumers, referred to the Standing Committee ofParliament, in which it was pointed out that digitisation of cable TVGservices, by switching from the older analogue system in phases from2012 onwards, had greatly increased the revenue of broadcasters andstated that these benefits could not possibly be denied by the broadcasters.In addition, the selfsame broadcasters have been regulated throughoutand are raising questions relating to jurisdiction only after the presentHRegulation and Tariff Order have been made largely with their consent.He also cited certain decisions on the reach of TRAI under the TRAIAct.

12. Having heard learned counsel for the parties, it is important tofirst deal with the TRAI Act. In Secretary, Ministry of Information& Broadcasting, Govt. of India & Ors. v. Cricket Association ofBengal, (1995) 2 SCC 161, this Court referred to the pressing need tocreate a comprehensive enactment regulating airwaves, being publicproperty. Public interest demanded that service providers be regulatedand the usage of the airwaves through frequencies be regulated. Adirection was thus issued to the Government of India to formulate acomprehensive enactment after noting the inadequacies that were felt inthe Indian Telegraph Act, 1885. This Court stated:

“Per Sawant, J.:

78. There is no doubt that since the airwaves/frequencies are apublic property and are also limited, they have to be used in thebest interest of the society and this can be done either by a centralauthority by establishing its own broadcasting network or regulatingthe grant of licences to other agencies, including the privateagencies. What is further, the electronic media is the most powerfulmedia both because of its audio-visual impact, and its widest reachcovering the section of the society where the print media does notreach. The right to use the airwaves and the content of theprogrammes therefore, needs regulation for balancing it and aswell as to prevent monopoly of information and views relayed,which is a potential danger flowing from the concentration of theright to broadcast/telecast in the hands either of a central agencyor of few private affluent broadcasters. That is why the need tohave a central agency representative of all sections of the societyfree from control both of the Government and the dominantinfluential sections of the society.

xxx xxx xxx

120. … Hence every citizen has a right to use the best meansavailable for the purpose. At present, electronic media, viz., T.V.and radio, is the most effective means of communication. …

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122. We, therefore, hold as follows:

[i] The airwaves or frequencies are a public property. Theiruse has to be controlled and regulated by a public authority in A

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A

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the interests of the public and to prevent the invasion of theirrights. Since the electronic media involves the use of theairwaves, this factor creates an in-built restriction on its use asin the case of any other public property.

[ii] The right to impart and receive information is a species ofthe right of freedom of speech and expression guaranteed byArticle 19(1)(a) of the Constitution. A citizen has thefundamental right to use the best means of imparting andreceiving information and as such to have an access totelecasting for the purpose. However, this right to have anaccess to telecasting has limitations on account of the use ofthe public property, viz., the airwaves, involved in the exerciseof the right and can be controlled and regulated by the publicauthority. This limitation imposed by the nature of the publicproperty involved in the use of the electronic media is in additionto the restrictions imposed on the right to freedom of speechand expression under Article 19(2) of the Constitution.

[iii] The Central Government shall take immediate steps toestablish an independent autonomous public authorityrepresentative of all sections and interests in the society tocontrol and regulate the use of the airwaves.

[iv] Since the matches have been telecast pursuant to theimpugned order of the High Court, it is not necessary to decidethe correctness of the said order.

Per Jeevan Reddy J.:

201.1. (b) Airwaves constitute public property and must be utilisedfor advancing public good. No individual has a right to utilise themat his choice and pleasure and for purposes of his choice includingprofit…

201.1. (c) Broadcasting media is inherently different from Pressor other means of communication/ information. The analogy ofpress is misleading and inappropriate. This is also the viewexpressed by several Constitutional Courts including that of theUnited States of America.

xxx xxx xxx

201.4. The Indian Telegraph Act, 1885 is totally inadequate togovern an important medium like the radio and television, i.e.,broadcasting media. The Act was intended for an altogetherdifferent purpose when it was enacted. This is the result of thelaw in this country not keeping pace with the technological advancesin the field of information and communications. While all theleading democratic countries have enacted laws specificallygoverning the broadcasting media, the law in this country has stoodstill, rooted in the Telegraph Act of 1885. Except Section 4(1) andthe definition of telegraph, no other provision of the Act is shownto have any relevance to broadcasting media. It is, therefore,imperative that the parliament makes a law placing thebroadcasting media in the hands of a public/statutory corporate orthe corporations, as the case may be. This is necessary tosafeguard the interests of public and the interests of law as alsoto avoid uncertainty, confusion and consequent litigation.”

13. Accordingly, the Government formulated a National TelecomPolicy in 1994 and then decided to promulgate an ordinance which led tothe enactment of the TRAI Act. The Statement of Objects and Reasonsof this Act stressed:

“1. In the context of the National Telecom Policy, 1994, whichamongst other things, stresses on achieving the universal service,bringing the quality of telecom services to world standards,provisions of wide range of services to meet the customers demandat reasonable price, and participation of the companies registeredin India in the area of basic as well as value added telecom servicesas also making arrangements for protection and promotion ofconsumer interest and ensuring fair competition, there is a feltneed to separate regulatory functions from service providingfunctions which will be in keeping with the general trend in theworld. In the multi-operator situation arising out of opening ofbasic as well as value added services in which private operatorwill be competing with Government operators, there is a pressingneed for an independent telecom regulatory body for regulationof telecom services for orderly and healthy growth oftelecommunication infrastructure apart from protection ofconsumer interest.

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A

2. In view of above, it was proposed to set up an independentTelecom Regulatory Authority as a non-statutory body and forthat purpose the Indian Telegraph (Amendment) Bill, 1995 wasintroduced and then passed by Lok Sabha on 6[th] August, 1995.At the time of consideration of the aforesaid Bill in Rajya Sabha,having regard to the sentiments expressed by the Members ofRajya Sabha and of the views of the Standing Committee onCommunication which expressed a hope that steps will be takento set up a Statutory Authority, it is proposed to set up the TelecomRegulatory Authority of India as a statutory authority.

B

3. The proposed Authority will consist of a Chairperson andCminimum two and maximum four members. A person who is orhas been a Judge of the Supreme Court or Chief Justice of a HighCourt will be eligible to be appointed as a Chairperson of theauthority. A member shall be a person who has held as the postof Secretary or Additional Secretary to the Government of IndiaDor any equivalent post in the Central Government or the StateGovernment for minimum period of three years.

4. The powers and functions of the Authority, inter alia, are-

(i) ensuring technical compatibility and effective inter-relationship between different service providers; E

(ii) regulation of arrangement amongst service providers ofsharing their revenue derived from providingtelecommunication service;

(iii) ensuring compliance of licence conditions by all serviceproviders; F

(iv) protection of the interest of the consumers oftelecommunication service;

(v) settlement of disputes between service providers;

(vi) fixation of rates for providing telecommunication servicewithin India and outside India; G

(vii) ensuring effective compliance of universal serviceobligations.

5. The Authority shall have an inbuilt dispute settlementmechanism including procedure to be followed in this regardas well as a scheme of punishment in the event of non-compliance of its order.

6. The Authority will have to maintain transparency whileexercising its powers and functions. The powers andfunctions would enable the Authority to perform a role ofwatchdog for the telecom sector in an effective manner.

7. In order that the Authority functions in a truly independentmanner and discharges its assigned responsibilities effectively,it is proposed to vest the Authority with a statutory status.

8. As the Parliament was not in session, the Presidentpromulgated the Telecom Regulatory Authority of IndiaOrdinance, 1996 on the 27[th] January, 1996 for the aforesaidpurpose.

9. The Bill seeks to replace the said Ordinance.”

(Emphasis supplied.)

14. The said Act was amended by Act 2 of 2000, which substitutedthe Preamble of the TRAI Act thus:

“An Act to provide for the establishment of the TelecomRegulatory Authority of India and the Telecom DisputesSettlement and Appellate Tribunal to regulate thetelecommunication services, adjudicate disputes, dispose ofappeals and to protect the interests of service providers andconsumers of the telecom sector, to promote and ensure orderlygrowth of the telecom sector and for matters connectedtherewith or incidental thereto”

(Emphasis supplied.)

15. The Amendment Act of 2000 added a proviso to the definitionof “telecommunication service” under Section 2(1)(k), permitting theCentral Government to notify other services to be telecommunicationservices including broadcasting services. The relevant provisions of theTRAI Act are, therefore, set out hereinbelow:

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“2(1) In this Act, unless the context otherwise requires,- xxx xxx xxx (e) “licensee” means any person licensed under sub-section (1)of Section 4 of the Indian Telegraph Act, 1885 (13 of 1885) forproviding specified public telecommunication services; (ea) “licensor” means the Central Government or the telegraphauthority who grants a licence under Section 4 of the IndianTelegraph Act, 1885; xxx xxx xxx (j) “service provider” means the Government as a service providerand includes a licensee; (k) “telecommunication service” means service of any description(including electronic mail, voice mail, data services, audio taxservices, video tax services, radio paging and cellular mobiletelephone services) which is made available to users by means ofany transmission or reception of signs, signals, writing, imagesand sounds or intelligence of any nature, by wire, radio, visual orother electromagnetic means but shall not include broadcastingservices.

Provided that the Central Government may notify other serviceto be telecommunication service including broadcasting services.

xxx xxx xxx

11. Functions of Authority.— (1) Notwithstanding anythingcontained in the Indian Telegraph Act, 1885 (13 of 1885), thefunctions of the Authority shall be to—

(a) make recommendations, either suo motu or on a requestfrom the licensor, on the following matters, namely:—

(i) need and timing for introduction of new service provider;

(ii) terms and conditions of licence to a service provider;

(iii) revocation of licence for non-compliance of terms andconditions of licence;

(iv) measures to facilitate competition and promote efficiencyin the operation of telecommunication services so as tofacilitate growth in such services;

(v) technological improvements in the services provided bythe service providers;

(vi) type of equipment to be used by the service providersafter inspection of equipment used in the network;

(vii) measures for the development of telecommunicationtechnology and any other matter relatable totelecommunication industry in general;

(viii) efficient management of available spectrum; (b) discharge the following functions, namely:—

(i) ensure compliance of terms and conditions of licence;

(ii) notwithstanding anything contained in the terms andconditions of the licence granted before the commencementof the Telecom Regulatory Authority of India (Amendment)Act, 2000, fix the terms and conditions of inter-connectivitybetween the service providers;

(iii) ensure technical compatibility and effective inter-connection between different service providers;

(iv) regulate arrangement amongst service providers ofsharing their revenue derived from providingtelecommunication services;

(v) lay-down the standards of quality of service to be providedby the service providers and ensure the quality of service andconduct the periodical survey of such service provided bythe service providers so as to protect interest of the consumersof telecommunication service;

(vi) lay-down and ensure the time period for providing localand long distance circuits of telecommunication betweendifferent service providers;

(vii) maintain register of inter-connect agreements and of allsuch other matters as may be provided in the regulations;

(viii) keep register maintained under clause (vii) open forinspection to any member of public on payment of such feeand compliance of such other requirement as may be providedin the regulations; A

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(ix) ensure effective compliance of universal serviceobligations;

(c) levy fees and other charges at such rates and in respect ofsuch services as may be determined by regulations; (d) perform such other functions including such administrativeand financial functions as may entrusted to it by the CentralGovernment or as may be necessary to carry out the provisionsof this Act:

Provided that the recommendations of the Authority specified inclause (a) of this sub-section shall not be binding upon the CentralGovernment:

Provided further that the Central Government shall seek therecommendations of the Authority in respect of matters specifiedin sub-clauses (i) and (ii) of clause (a) of this sub-section in respectof new licence to be issued to a service provider and the Authorityshall forward its recommendations within a period of sixty daysfrom the date on which that Government sought therecommendations:

Provided also that the Authority may request the CentralGovernment to furnish such information or documents as may benecessary for the purpose of making recommendations under sub-clauses (i) and (ii) of clause (a) of this sub-section and thatGovernment shall supply such information within a period of sevendays from receipt of such request:

Provided also that the Central Government may issue a licence toa service provider if no recommendations are received from theAuthority within the period specified in the second proviso or withinsuch period as may be mutually agreed upon between the CentralGovernment and the Authority:

Provided also that if the Central Government, having consideredthat recommendation of the Authority, comes to a primafacie conclusion that such recommendation cannot be acceptedor needs modifications, it shall refer the recommendation back tothe Authority for its reconsideration, and the Authority may, withinfifteen days from the date of receipt of such reference, forwardto the Central Government its recommendation after considering the reference made by that Government. After receipt of furtherrecommendation if any, the Central Government shall take a finaldecision.

(2) Notwithstanding anything contained in the Indian TelegraphAct, 1885 (13 of 1885), the Authority may, from time to time, byorder, notify in the Official Gazette the rates at which thetelecommunication services within India and outside India shallbe provided under this Act including the rates at which messagesshall be transmitted to any country outside India:

Provided that the Authority may notify different rates for differentpersons or class of persons for similar telecommunication servicesand where different rates are fixed as aforesaid the Authorityshall record the reasons therefor.

(3) While discharging its functions under sub-section (1), or sub-section (2) the Authority shall not act against the interest of thesovereignty and integrity of India, the security of the State, friendlyrelations with foreign States, public order, decency or morality.

(4) The Authority shall ensure transparency while exercising itspowers and discharging its functions.

xxx xxx xxx

36. Power to make regulations.— (1) The Authority may, bynotification, make regulations consistent with this Act and the rulesmade thereunder to carry out the purposes of this Act.

(2) In particular, and without prejudice to the generality of theforegoing power, such regulations may provide for all or any ofthe following matters, namely :—

(a) the times and places of meetings of the Authority and theprocedure to be followed at such meetings under sub-section (1)of Section 8, including quorum necessary for the transaction ofbusiness; (b) the transaction of business at the meetings of the Authorityunder sub-section (4) of Section 8;

(c) [* * *]

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A(d) matters in respect of which register is to be maintained by theAuthority under sub-clause (vii) of clause (b) of sub-section (1)of Section 11; (e) levy of fee and lay down such other requirements on fulfilmentof which a copy of register may be obtained under sub-clauseB(viii) of clause (b) of sub-section (1) of Section 11; (f) levy of fees and other charges under clause (c) of sub-section(1) of Section 11.”

16. The proviso to section 2(1)(k) was challenged in the DelhiHigh Court, which challenge was repelled by the Delhi High Court inCStar India Private Limited v. TRAI & Ors., (supra.). An SLP fromthe said judgment was also dismissed. Acting under Section 2(1)(k), theCentral Government issued two notifications on 9.1.2004. S.O.44(E)reads as follows:- “S.O. 44(E). – In exercise of the powers conferred by the provisoDto clause (k) of sub-section (1) of section 2 of the TelecomRegulatory Authority of India Act, 1997 (24 of 1997), the CentralGovernment hereby notifies the broadcasting services and cableservices to be telecommunication service.

[Notification No. 39 issued by Ministry of communication andEInformation Technology dated 9 January 2004. S.O. No.44(E) issued by TRAI, vide F.No. 13-1/2004]”

S.O.45(E) reads as follows:-

“S.O.45(E). – In exercise of the powers conferred by clause (d)of sub-clause (1) of section 11 of the Telecom Regulatory AuthorityFof India Act, 1997 (24 of 1997) (hereinafter referred to as theAct), the Central Government hereby entrusts the followingadditional functions to the Telecom Regulatory Authority of India,established under Sub-section (1) of Section 3 of the Act, in respectof broadcasting services and cable services, namely:- G(1) Without prejudice to the provisions contained in clause (a) ofsub-section (1) of section 11 of the Act, to make recommendationregarding –

(a) the terms and conditions on which the ‘addressablesystems’ shall be provided to customers.H

Explanation – For the purposes of this clause, ‘addressablesystem’ with its grammatical variation, means an electronic deviceor more than one electronic devices put in an integrated systemthrough which signals of cable television network can be sent inencrypted or unencrypted form, which can be decoded by thedevice or devices at the premises of the subscriber within thelimits of authorisation made, on the choice and request of suchsubscriber, by the cable operator for that purpose to the subscriber.

(b) the parameters for regulating maximum time foradvertisements in pay channels as well as other channels.

(2) Without prejudice to the provisions of sub-section (2) of section11 of the Act, also to specify standard norms for, and periodicityof, revision of rates of pay channels, including interim measures.

[Notification No. 39 issued by Ministry of Communication andInformation Technology, dated 9 January 2004, S.O. No.45(E) issued by TRAI, vide F.No. 13-1/2004]”

17. We are concerned with the impugned Regulation that wasframed on 3.3.2017 under Section 36 of the Act together with the TariffOrder made on the same date. The regulations with which we aredirectly concerned are set out hereunder:

“3. General obligations of broadcasters.— (1) No broadcastershall engage in any practice or activity or enter into anyunderstanding or arrangement including exclusive contracts withany distributor of television channels that prevents any otherdistributor of television channels from obtaining signals of televisionchannel of such broadcaster for distribution.

(2) Every broadcaster shall, within sixty days of receipt of writtenrequest from a distributor of television channels for obtaining signalsof television channel or within thirty days of signing ofinterconnection agreement with the distributor, as the case maybe, provide, on non-discriminatory basis, the signals of televisionchannel to the distributor or convey the reasons in writing forrejection of the request if the signals of television channel aredenied to such distributor:

Provided that imposition of any term or condition by thebroadcaster, which is unreasonable, shall be deemed to constitutea denial of request:

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Provided further that this sub-regulation shall not apply to adistributor of television channels, who requests signals of aparticular television channel from a broadcaster while at the sametime demands carriage fee for distribution of that television channelor who is in default of payment to the broadcaster and continuesto be in such default.

(3) If a broadcaster, proposes or stipulates for, directly or indirectly,placing the channel in any specified position in the electronicprogramme guide or assigning a particular channel number, as apre-condition for providing signals, such pre-condition shall alsoamount to imposition of unreasonable condition.

Explanation: For removal of doubt, it is clarified that if a paybroadcaster offers discount, in non-discriminatory manner, throughits reference interconnect offer on the maximum retail price ofpay channel, within the limit as specified in sub-regulation (4) ofregulation 7, to distributors of television channels for placing thechannel in any specified position in the electronic programme guideor assigning particular channel number, such offer of discountshall not be considered a pre-condition.

(4) No broadcaster shall propose, stipulate or demand for, directlyor indirectly, packaging of the channel in any particular bouquetoffered by the distributor of television channels to subscribers.

(5) No broadcaster shall propose, stipulate or demand for, directlyor indirectly, guarantee of a minimum subscriber base or a minimumsubscription percentage for its channel or bouquet.

Explanation: For removal of doubt, it is clarified that thesubscription percentage of a channel or bouquet refers to thepercentage of subscribers subscribing to a specific channel orbouquet out of average active subscriber base of a distributor.

xxx xxx xxx

6. Compulsory offering of channels on a-la-carte basis. - (1)Every broadcaster shall offer all its television channels on a-la-carte basis to the distributors of television channels:

Provided that the broadcaster may also offer its pay channels, inaddition to offering of pay channels on a-la-carte basis, in form ofbouquet:

Provided further that such bouquet shall not contain—

(a) any ‘free-to-air channel’; and

(b) High definition (HD) and Standard Definition (SD) variantsof the same channel.

7. Publication of reference interconnection offer bybroadcaster for pay channels.— (1) Every broadcaster shallpublish, on its website, reference interconnection offer, inconformance with the regulations and the tariff orders notified bythe Authority, for providing signals of all its pay channels to thedistributor of television channels—

(a) within sixty days of commencement of these regulations;and (b) before launching of a pay channel. and simultaneouslysubmit, for the purpose of record, a copy of the same to theAuthority.

(2) The reference interconnection offer, referred to in sub-regulation (1), shall contain the technical and commercial termsand conditions relating to, including but not limited to, maximumretail price per month of pay channel, maximum retail price permonth of bouquet of pay channels, discounts, if any, offered onthe maximum retail price to distributors, distribution fee, mannerof calculation of ‘broadcaster’s share of maximum retail price’,genre of pay channel and other necessary conditions:

Provided that a broadcaster may include in its referenceinterconnection offer, television channel or bouquet of pay channelsof its subsidiary company or holding company or subsidiarycompany of the holding company, which has obtained, in its name,the downlinking permission for its television channels from theCentral Government, after written authorization by them.

Explanation: For the purpose of these regulations, the definitionof “subsidiary company” and “holding company” shall be the sameas assigned to them in the Companies Act, 2013 (18 of 2013).

(3) Every broadcaster shall declare a minimum twenty percent ofthe maximum retail price of pay channel or bouquet of paychannels, as the case may be, as the distribution fee:

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AProvided that the distribution fee declared by the broadcaster shallbe uniform across all the distribution platforms.

(4) It shall be permissible to a broadcaster to offer discounts, onthe maximum retail price of pay channel or bouquet of paychannels, to distributors of television channels, not exceeding fifteenpercent of the maximum retail price:

B

Provided that the sum of distribution fee declared by a broadcasterunder sub-regulation (3) and discounts offered under this sub-regulation in no case shall exceed thirty five percent of themaximum retail price of pay channel or bouquet of pay channels,as the case may be:

C

Provided further that offer of discounts, if any, to distributors oftelevision channels, shall be on the basis of fair, transparent andnon-discriminatory terms:

Provided also that the parameters of discounts shall be measurableand computable.

D

(5) Every broadcaster of pay channel shall mention in its referenceinterconnection offer the names of persons, telephone numbers,and e-mail addresses designated to receive request for receivinginterconnection from distributors of television channels andgrievance redressal thereof.

E

(6) The terms and conditions mentioned in the referenceinterconnection offer shall include all necessary and sufficientprovisions, which make it a complete interconnection agreementon signing by other party, for distribution of television channels.

F

(7) The Authority, suo-motu or otherwise, may examine thereference interconnection offer submitted by a broadcaster andon examination if the Authority is of the opinion that the referenceinterconnection offer is not in conformance with the provisions ofthe regulations and the tariff orders notified by the Authority, itmay, after giving an opportunity of being heard to such broadcaster,direct such broadcaster to modify the said referenceinterconnection offer and such broadcaster shall amend referenceinterconnection offer accordingly and publish the same withinfifteen days of receipt of the direction.

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(8) Any amendment to the reference interconnection offer shallbe published in the same manner as provided under the sub-regulations (1), (2), (3), (4), (5) and (6) of this regulation.

(9) In the event of any amendment to the reference interconnectionoffer by a broadcaster under sub-regulation (8), the broadcastershall give an option to all distributors, with whom it has writteninterconnection agreements in place, within thirty days from thedate of such amendment and it shall be permissible to suchdistributors to enter into fresh interconnection agreement inaccordance with the amended reference interconnection offer,within thirty days from the date of receipt of such option, or continuewith the existing interconnection agreement.

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10. Interconnection agreement between broadcaster anddistributor of television channels.— (1) No broadcaster shallprovide signals of pay channels to a distributor of televisionchannels without entering into a written interconnection agreementwith such distributor of television channels.

(2) No distributor of television channels shall distribute pay channelsof any broadcaster without entering into a written interconnectionagreement with such broadcaster.

(3) It shall be mandatory for a broadcaster and a distributor oftelevision channels to enter into written interconnection agreementon a-la-carte basis for distribution of pay channels.

xxx xxx xxx

11. Territory of interconnection agreement.— (1) Theinterconnection agreement signed between a broadcaster and amulti-system operator shall include the following details fordescribing the territory for the purpose of distribution of signals oftelevision channels –

(a) the registered area of operation of the multi-systemoperator as mentioned in the registration granted by the CentralGovernment; (b) the names of specific areas for which distribution of signalsof television channels has been agreed, initially, at the time ofsigning of the interconnection agreement; and A

B

C

D

E

F

G

H

A

(c) the names of the corresponding states/ union territories inwhich such agreed areas as referred in clause (b) of thissub-regulation are located.

(2) It shall be permissible to the multi-system operator to distributethe channels beyond the areas agreed under sub-regulation (1),by giving a written notice to the broadcaster, after thirty daysfrom the date of receipt of such written notice by the broadcasterand the said notice shall deemed to be an addendum to the existinginterconnection agreement:

B

Provided that such areas fall within—

C

(a) the registered area of operation of the multi-systemoperator; and (b) the states or union territories in which the multi-systemoperator has been permitted to distribute the signals oftelevision channels under the interconnection agreement.

D

(3) Nothing contained in sub-regulation (2) shall apply if writtenobjections with reasons from the broadcaster have been receivedby the multi-system operator during the said thirty days noticeperiod: Provided that any objection by the broadcaster, which isunreasonable, shall be deemed to constitute a denial of provisioningEof signals beyond the areas agreed under the clause (b) of sub-regulation (1).”

18. The relevant clauses of the Tariff Order with which we aredirectly concerned are set out hereunder:

“3. Manner of offering of channels by broadcasters.— (1)Every broadcaster shall offer all its channels on a-la-carte basisto all distributors of television channels.

F

(2) Every broadcaster shall declare ——

(a) the nature of each of its channel either as ‘free-to-air’ or‘pay’; and G

(b) the maximum retail price, per month, payable by asubscriber for each of its pay channel offered on a-la-cartebasis:

Provided that the maximum retail price of a pay channel shall beHmore than ‘zero’:

Provided further that the maximum retail price of a channel shallbe uniform for all distribution platforms.

(3) It shall be permissible for a broadcaster to offer its pay channelsin the form of bouquet(s) and declare the maximum retail price(s),per month, of such bouquet(s) payable by a subscriber:

Provided that, while making a bouquet of pay channels, it shall bepermissible for a broadcaster to combine pay channels of itssubsidiary company or holding company or subsidiary companyof the holding company, which has obtained, in its name, thedownlinking permission for its television channels, from the CentralGovernment, after written authorization by them, and declaremaximum retail price, per month, for such bouquet of pay channelspayable by a subscriber:

Provided that such bouquet shall not contain any pay channel forwhich maximum retail price per month is more than rupeesnineteen:

Provided further that the maximum retail price per month of suchbouquet of pay channels shall not be less than eighty five percentof the sum of maximum retail prices per month of the a-la-cartepay channels forming part of that bouquet:

Provided further that the maximum retail price per month of suchbouquet of pay channels shall be uniform for all distributionplatforms:

Provided further that such bouquet shall not contain any free-to-air channel:

Provided also that such bouquet shall not contain both HD andSD variants of the same channel.

Explanation: For the purpose of this Order, the definition of“subsidiary company” and “holding company” shall be the sameas assigned to them in the Companies Act, 2013 (18 of 2013).

(4) It shall be permissible for a broadcaster to offer promotionalschemes on maximum retail price(s) per month of its a-la-cartepay channel(s):

Provided that period of any such scheme shall not exceed ninetydays at a time:

A

B

C

D

E

F

G

H

Provided further that the frequency of any such scheme by thebroadcaster shall not exceed twice in a calendar year:

A

Provided further that the price(s) of a-la-carte pay channel(s)offered under any such promotional scheme shall be consideredas maximum retail price(s) during the period of such promotionalscheme:

B

Provided also that the provisions of Regulations and Tariff Ordersnotified by the Authority shall be applicable on the price(s) of a-la-carte pay channel(s) offered under any such promotionalscheme.

C

(5) Every broadcaster, before making any change in the nature ofa channel or in the maximum retail price of a pay channel or in themaximum retail price of a bouquet of pay channels or in thecomposition of a bouquet of pay channels, as the case may be,shall follow the provisions of all the applicable Regulations andDOrders notified by the Authority, including but not limited to thepublication of Reference Interconnection Offer.

4. Declaration of network capacity fee and manner ofoffering of channels by distributors of television channels.—- (1) Every distributor of television channels shall declare networkcapacity fee, per month, payable by a subscriber for availing adistribution network capacity so as to receive the signals oftelevision channels:

E

Provided that the network capacity fee, per month, for networkcapacity upto initial one hundred SD channels, shall, in no case,exceed rupees one hundred and thirty, excluding taxes:

F

Provided further that the network capacity fee, per month, fornetwork capacity in the slabs of twenty five SD channels each,beyond initial one hundred channels capacity referred to in firstproviso to sub-clause (1), shall, in no case, exceed rupees twentyexcluding taxes:

G

Provided also that one HD channel shall be treated equal to twoSD channels for the purpose of calculating number of channelswithin the distribution network capacity subscribed.

(2) Every distributor of television channels shall offer all channelsavailable on its network to all subscribers on a-la-carte basis and H

declare distributor retail price, per month, of each pay channelpayable by a subscriber:

Provided that the distributor retail price, per month, payable by asubscriber to a distributor of television channels for subscribing toa pay channel shall, in no case, exceed the maximum retail price,per month, declared by the broadcasters for such pay channel.

(3) Every distributor of television channels shall offer to allsubscribers each bouquet of pay channels offered by a broadcaster,and for which interconnection agreement has been signed withthat broadcaster, without any alteration in its composition anddeclare the distributor retail price, per month, for such bouquetpayable by a subscriber:

Provided that the distributor retail price, per month, payable by asubscriber to a distributor of television channels for subscribing toa bouquet of pay channels offered by the broadcaster shall in nocase exceed the maximum retail price, per month, declared bythe broadcasters for such bouquet of pay channels:

Provided further that such bouquet shall not contain any paychannel for which maximum retail price per month declared bythe broadcaster is more than rupees nineteen:

Provided further that such bouquet shall not contain any free-to-air channel:

Provided also that such bouquet shall not contain both HD andSD variants of the same channel.

(4) It shall be permissible for a distributor of television channels tooffer bouquet(s) formed from pay channels of one or morebroadcasters and declare distributor retail price(s) , per month, ofsuch bouquet(s) payable by a subscriber:

Provided that such bouquet shall not contain any pay channel forwhich maximum retail price per month declared by the broadcasteris more than rupees nineteen:

Provided further that the distributor retail price per month of suchbouquet of pay channels shall not be less than eighty five percentof the sum of distributor retail prices per month of a-la-carte paychannels and bouquet(s) of pay channels forming part of thatbouquet:

AB

C

D

E

F

G

H

A

Provided further that the distributor retail price per month of abouquet of pay channels offered by a distributor of televisionchannels shall, in no case, exceed the sum of maximum retail pricesper month of a-la-carte pay channels and bouquet(s) of paychannels, declared by broadcasters, forming part of that bouquet:

Provided further that such bouquet shall not contain any free-to-air channel:

B

Provided also that such bouquet shall not contain both HD and SDvariants of the same channel.

Explanation: For the removal of doubt it is hereby clarified that adistributor of television channels while forming bouquet under thisclause shall not break a bouquet of pay channels offered by abroadcaster to form two or more bouquet(s) at distribution level.

C

(5) It shall be permissible for a distributor of television channels tooffer bouquet(s) formed from free-to-air channels of one or morebroadcasters.

D

(6) No distributor of television channels shall charge any amount,other than the network capacity fee, from its subscribers forsubscribing to free-to-air channels or bouquet(s) of free-to airchannels.

E

(7) Within the distribution network capacity subscribed, in additionto channels notified by Central Government to be mandatorilyprovided to all the subscribers, a subscriber shall be free to chooseany free-to-air channel(s), pay channel(s), or bouquet(s) ofchannels offered by the broadcaster(s) or bouquet(s) of channelsFoffered by distributors of television channels or a combinationthereof:

Provided that if a subscriber opts for pay channels or bouquet ofpay channels, he shall be liable to pay an amount equal to sum ofdistributor retail price(s) for such channel(s) and bouquets inaddition to network capacity fee.

G

(8) Subject to sub-clause (1) of clause 4, a distributor of televisionchannels shall not increase the network capacity fee for a periodof six months from the date of such notification: Provided that adistributor of television channels, before making any change in the H

STAR INDIA PVT. LTD. v. DEPARTMENT OF INDUSTRIALPOLICY AND PROMOTION [R. F. NARIMAN, J.]

network capacity fee, shall at least thirty days prior to the scheduledchange—

A

(a) inform the Authority; and

(b) inform the subscribers by running scroll on the channel.”

19. In the judgment of Sundar,J., in the Division Bench of theMadras High Court, a useful table is set out which not only states theprovisions that have been challenged, but the specific ground on whichthey have been challenged. We, therefore, reproduce this table in ourjudgment:- B

“Provisions of the Interconnection Regulation which Regulatecontent C

Sl. ProvisionGroundN o. 1. 6(1) All c hannels (pay Impinges upon broadcaster's channels and free-to-air ability to package a T V channel. channels) to be offered on No such restriction on broadcaster a-la-carte ba sis. under Copyright Act. D2. Second proviso to 6(1) Impinges upon broadcaster's - Bouquet of pay channels ability to package a T V channel. shall not have free-to-air No such restriction on broadcaster channels. under Copyright Act. - HD and SD variant of sam e channel cannot be in sam e bouquet. E3. Proviso to 7(2) - Bundling Impinges upon broadcaster's of third party channels ability to package a T V channel. prohibited. No such restriction on broadcaster under Copyright Act. 4. 7(4) - Broadcaster can of fer Directly regulates the pricing of a discounts to distributor not TV channel, thereby also ex ceeding 15% of MRP. regula ting pricing of individual programm es. F5. First proviso to 7(4) - Sum Directly regulates the pricing of a of discount unde r 7(4 ) and TV cha nnel, thereby also distribution fee under 7(3) regula ting pricing of individual shall not exceed 35% of programm es. M RP. 6. 10(3) r/w 6(1) - M andatory Impinges upon broadcaster's to enter into agreement freedom to offer pay chann els Gwith DPO on an a-la-carte only as a pa rt of bouquet and not basis for pay channels. as a-la-carte. No such restriction on broadcaster under Copyright Act. 7.11(2) - D eemed extension Directly impinges the of geo graphical territory. broadcaster's right under 19(2) to designate the geogra phical territor y of exploitation. H

H

H

166 SUPREME COURT REPORTS [2018] 14 S.C.R.

AProvisions of the Tariff Order which regulate contentSl . P ro visio nG rou n dNo. 1. 3(1 ) - All chann el s to be Im p in g es u po n b road caste r's offered o n a-la-c arte ba sis ab ility to p ack ag e a T V c h an nel. N o su ch re striction o n broadca ster un d e r C o p yrig h t BA ct. 2. 3(2 )(b ) - D eclaratio n o f Im p in g es u po n b road caste r's M R P o f a-la-ca rte ch a n nel freedo m to o ffer p a y ch ann e ls on ly as a p art o f b o uq uet an d n o t as a-la-ca rte. N o such re st ri ctio non broadcaste r u n de r C o p yrig h t A ct. 3. S eco n d pro viso to 3 (2 )(b ) -U n d er Se cti on 3 3A rea d w ith CM R P of all p a y cha nn els to R u le 5 6 o f th e C o p yri gh t R u les, be un ifo rm ac ro ss 20 1 3, b ro adc aster h as the rig ht to distrib u tion p la tform s . dec id e s eparate M R P fo r diffe re n t ca teg or y of a u di ence . 4. First pro viso t o 3 (3 ) -Im p in g es u po n b road caste r's B un d ling of th ird p a rty ab ility to p ack ag e a T V c h an nel. ch an ne ls proh ibited . F or exa m p le , th ird party ch a nn els ca n no t b e part o f th e sam e b o uqu et. N o suc h Dres trictio n o n bro ad cas ter u nd e r C o py rig ht Act. 5. S eco n d prov iso to 3(3 ) -D irectly regu la tes th e pric in g o f M R P o f p ay chann e l in a TV chan ne l, there b y a lso bo u qu et no t t o ex c eed INR reg u latin g pricin g o f in d iv id ual 19 /- prog ram m es. 6. Th ird pro vis o to 3 (3) -D irectly regu la tes th e pric in g o f B ou q u et price sh al l n o t b e a TV chan ne l, there b y a lso Eless th a n 85 % of th e su m o f reg u latin g pricin g o f in d iv id ual a-la -carte pric es o f prog ram m es. in d ivid u al ch a n n els in th e bo u qu et. 7. Fo u rth provis o to 3 (3 ) -U n d er R ul e 5 6 o f th e C o p yrig h t M R P o f a ll b o uq u ets to b e R u le s, 20 13, b roadcas te r h as th e un ifo rm acro ss d istrib u tio n righ t to dec id e sep arate M R P fo r plat form s . diffe re n t ca teg or y of a u di ence . F8. Fifth p rov iso to 3(3) -Im p in g es u p on b roadcas te r's B ou q u et o f p ay ch a n n els ab ility to p ack ag e a T V c h an nel. s ha ll n o t have free-to- air N o su ch re striction o n ch an ne ls. broadca ster un d e r C o p yrig h t A ct. 9. S ix th p rov iso to 3(3) - HD Im p in g es u po n b road caste r's an d SD v a riant of s am e ab ility to p ack ag e a T V c h an nel. ch an ne l ca n no t b e in sam e N o su ch re striction o n bo u qu et. broadca ster un d e r C o p yrig h t GA ct. 10. 3(4 ) - R e striction o n A ll t hese res tri ctio ns im p in ge pro m otion o f b ouq u ets, broadca ster's ability to restric tion on tim e, co m m ercially m o n etize h is restric tion o n freq u e n cy . co n ten t. 11. 4(2 ) - D istri bu tor to o ffer Indir ectl y im p ing es up on the all chann els o n a-la-ca rte b roa dc aster's righ t to o ffer h is basis. c hann els to the cu sto m ers on ly as Ha b o u qu et and n o t as a-la -carte.”

20. Since the Regulation made under Section 36 of the said Act isunder challenge, it must first be stressed that a restrictive meaning cannotbe given to the words “regulation” or “regulate”, as otherwise the veryobject of the Act would be stultified. In Deepak Theater v. State ofPunjab, 1992 Supp (1) SCC 684, a case which related to the PunjabCinemas (Regulation) Act, 1952 and Rules, this Court referred to thepower of licensing and regulation under the said Act as follows:

“5. Witnessing a motion picture has become an amusement toevery person; a reliever to the weary and fatigued; a reveller tothe pleasure seeker; an imparter of education and enlightenmentenlivening to news and current events; disseminator of scientificknowledge; perpetuator of cultural and spiritual heritage, to theteeming illiterate majority of population. Thus, cinemas havebecome tools to promote welfare of the people to secure andprotect as effectively as it may a social order as per directives ofthe State policy enjoined under Article 38 of the Constitution. Massmedia, through motion picture has thus become the vehicle ofcoverage to disseminate cultural heritage, knowledge, etc. Thepassage of time made manifest this growing imperative and theconsequential need to provide easy access to all sections of thesociety to seek admission into theatre as per his paying capacity.Though the right to fix rates of admission is a business incident,the appellant having created an interest in the general public therein,it has become necessary for the State to step in and regulate theactivity of fixation of maximum rates of admission to differentclasses, as a welfare weal. Thereby fixation of rates of admissionbecame a legitimate ancillary or incidental power in furtheranceof the regulation under the Act.Access to and admission intotheatre is a facility and concomitant right to a cinegoing public.Classification of seats and fixation of rates of admission accordingto paying capacity of a cinegoer is also an integral power ofregulation.Power to fix rates of admission includes power toamend and revise the rates from time to time. The statute veststhat power in the licensing authority subject to control by the StateGovernment. The fixation of the rates of admission has thusbecome an integral and essential part of the power and regulationof exhibition of cinematograph.”

(Emphasis supplied.)

AB

C

D

E

F

G

H

A

B

C

D

E

F

G

H

21. In BSNL v. TRAI, (2014) 3 SCC 222, this Court held:

“80. After the Amendment of 2000, TRAI can either suo motu oron a request from the licensor make recommendations on thesubjects enumerated in Sections 11(1)(a)(i) to (viii). Under Section11(1)(b), TRAI is required to perform nine functions enumeratedin sub-clauses (i) to (ix) thereof. In these clauses, different termslike “ensure”, “fix”, “regulate” and “lay down” have been used.The use of the term “ensure” implies that TRAI can issue directionson the particular subject. For effective discharge of functions undervarious clauses of Section 11(1)(b), TRAI can frame appropriateregulations. The term “regulate” contained in sub-clause (iv)shows that for facilitating arrangement amongst service providersfor sharing their revenue derived from providing telecommunicationservices, TRAI can either issue directions or make regulations.

xxx xxx xxx

83. In K. Ramanathan v. State of T.N. [K. Ramanathan v. Stateof T.N., (1985) 2 SCC 116 : 1985 SCC (Cri) 162] , this Courtinterpreted the word “regulation” appearing in Section 3(2)(d) ofthe Essential Commodities Act, 1955 and observed: (SCC pp. 130-31, paras 18-20)

“18. The word ‘regulation’ cannot have any rigid or inflexiblemeaning as to exclude ‘prohibition’. The word ‘regulate’ is difficultto define as having any precise meaning. It is a word of broadimport, having a broad meaning, and is very comprehensive inscope. There is a diversity of opinion as to its meaning and itsapplication to a particular state of facts, some courts giving to theterm a somewhat restricted, and others giving to it a liberal,construction. The different shades of meaning are brought outin Corpus Juris Secundum, Vol. 76 at p. 611:

‘“Regulate” is variously defined as meaning to adjust; to adjust,order, or govern by rule, method, or established mode; to adjustor control by rule, method, or established mode, or governingprinciples or laws; to govern; to govern by rule; to govern by,or subject to, certain rules or restrictions; to govern or directaccording to rule; to control, govern, or direct by rule orregulations.

“Regulate” is also defined as meaning to direct; to direct byrule or restriction; to direct or manage according to certainstandards, laws, or rules; to rule; to conduct; to fix or establish;to restrain; to restrict.’

(See also Webster’s Third New International Dictionary, Vol.2, p. 1913 and Shorter Oxford Dictionary, Vol. 2, 3rd Edn., p.1784.)

19. It has often been said that the power to regulate does notnecessarily include the power to prohibit, and ordinarily the word‘regulate’ is not synonymous with the word ‘prohibit’. This is truein a general sense and in the sense that mere regulation is not thesame as absolute prohibition. At the same time, the power toregulate carries with it full power over the thing subject to regulationand in absence of restrictive words, the power must be regardedas plenary over the entire subject.It implies the power to rule,direct and control, and involves the adoption of a rule or guidingprinciple to be followed, or the making of a rule with respect tothe subject to be regulated. The power to regulate implies thepower to check and may imply the power to prohibit under certaincircumstances, as where the best or only efficacious regulationconsists of suppression. It would therefore appear that the word‘regulation’ cannot have any inflexible meaning as to exclude‘prohibition’. It has different shades of meaning and must take itscolour from the context in which it is used having regard to thepurpose and object of the legislation, and the Court mustnecessarily keep in view the mischief which the legislature seeksto remedy.

20. The question essentially is one of degree and it is impossibleto fix any definite point at which ‘regulation’ ends and ‘prohibition’begins. We may illustrate how different minds have differentlyreacted as to the meaning of the word ‘regulate’ depending onthe context in which it is used and the purpose and object of thelegislation. In Slattery v. Naylor [(1888) LR 13 AC 446 (PC)]the question arose before the Judicial Committee of the PrivyCouncil whether a bye-law by reason of its prohibiting internmentaltogether in a particular cemetery, was ultra vires because theMunicipal Council had only power of regulating internmentswhereas the bye-law totally prohibited them in the cemetery in A

B

C

D

E

F

G

H

A

B

C

D

E

F

G

H

question, and it was said by Lord Hobhouse, delivering the judgmentof the Privy Council: (AC p. 447)

‘A rule or bye-law cannot be held as ultra vires merelybecause it prohibits where empowered to regulate, asregulation often involved prohibition.’”

xxx xxx xxx

87. Reference in this connection can also be made to the judgmentin U.P. Coop. Cane Unions Federations v. West U.P. SugarMills Assn. [(2004) 5 SCC 430] In that case, the Court interpretedthe word “regulation” appearing in the U.P. Sugarcane (Regulationof Supply and Purchase) Act, 1953 and observed: (SCC pp. 454-55, para 20)

“20. … ‘Regulate’ means to control or to adjust by rule or tosubject to governing principles. It is a word of broad impacthaving wide meaning comprehending all facets not onlyspecifically enumerated in the Act, but also embraces withinits fold the powers incidental to the regulation envisaged ingood faith and its meaning has to be ascertained in the contextin which it has been used and the purpose of the statute.”

88. It is thus evident that the term “regulate” is elastic enough toinclude the power to issue directions or to make regulations andthe mere fact that the expression “as may be provided in theregulations” appearing in clauses (vii) and (viii) of Section 11(1)(b)has not been used in other clauses of that sub-section does notmean that the regulations cannot be framed under Section 36(1)on the subjects specified in sub-clauses (i) to (vi) of Section11(1)(b). In fact, by framing regulations under Section 36, TRAIcan facilitate the exercise of functions under various clauses ofSection 11(1)(b) including sub-clauses (i) to (vi).

89. We may now advert to Section 36. Under sub-section (1)thereof TRAI can make regulations to carry out the purposes ofthe TRAI Act specified in various provisions of the TRAI Actincluding Sections 11, 12 and 13. The exercise of power underSection 36(1) is hedged with the condition that the regulationsmust be consistent with the TRAI Act and the rules madethereunder. There is no other restriction on the power of TRAI to STAR INDIA PVT. LTD. v. DEPARTMENT OF INDUSTRIALPOLICY AND PROMOTION [R. F. NARIMAN, J.]

make regulations. In terms of Section 37, the regulations arerequired to be laid before Parliament which can either approve,modify or annul the same. Section 36(2), which begins with thewords “without prejudice to the generality of the power undersub-section (1)” specifies various topics on which regulations canbe made by TRAI. Three of these topics relate to meetings ofTRAI, the procedure to be followed at such meetings, thetransaction of business at the meetings and the register to bemaintained by TRAI. The remaining two topics specified in clauses(e) and (f) of Section 36(2) are directly referable to Sections11(1)(b)(viii) and 11(1)(c). These are substantive functions ofTRAI. However, there is nothing in the language of Section 36(2)from which it can be inferred that the provisions contained thereincontrol the exercise of power by TRAI under Section 36(1) orthat Section 36(2) restricts the scope of Section 36(1).”

(Emphasis supplied.)

22. However, learned counsel for the appellants relied uponCellular Operators Assn. of India v. TRAI, (2016) 7 SCC 703 and,in particular, paragraph 41 thereof, which reads as follows:

“41. We find that the impugned Regulation is not referable toSections 11(1)(b)(i) and (v) of the Act inasmuch as it has notbeen made to ensure compliance with the terms and conditions ofthe licence nor has it been made to lay down any standard ofquality of service that needs compliance. This being the case, theimpugned Regulation is dehors Section 11 but cannot be said to beinconsistent with Section 11 of the Act. This Court has categoricallyheld in BSNL [BSNL v. Telecom Regulatory Authority of India,(2014) 3 SCC 222] judgment that the power under Section 36 isnot trammelled by Section 11. This being so, the impugnedRegulation cannot be said to be inconsistent with Section 11 ofthe Act. However, what has also to be seen is whether the saidRegulation carries out the purpose of the Act which, as has beenpointed out hereinabove, under the amended Preamble to the Act,is to protect the interests of service providers as well as consumersof the telecom sector so as to promote and ensure orderly growthof the telecom sector. Under Section 36, not only does the Authorityhave to make regulations consistent with the Act and the Rulesmade thereunder, but it also has to carry out the purposes of the ABC

D

EF

G

H

A

AAct, as can be discerned from the Preamble to the Act.If, farfrom carrying out the purposes of the Act, a regulation is madecontrary to such purposes, such regulation cannot be said to beconsistent with the Act, for it must be consistent with both theletter of the Act and the purposes for which the Act has beenenacted. In attempting to protect the interest of the consumer ofBthe telecom sector at the cost of the interest of a service providerwho complies with the leeway of an average of 2% of call dropsper month given to it by another Regulation, framed under Section11(1)(b)(v), the balance that is sought to be achieved by the Actfor the orderly growth of the telecom sector has been violated.CTherefore, we hold that the impugned Regulation does not carryout the purpose of the Act and must be held to be ultra vires theAct on this score.”

(Emphasis supplied.)

23. What is important to note from this judgment is that the balanceDthat was sought to be maintained between protecting the interest ofservice providers and consumers was destroyed by the impugnedregulations. What is important from our point of view, however, is thatunder Section 36 of the TRAI Act, the Authority is empowered to carryout the purposes of the said Act as can be discerned from the PreambleEto the Act. What is clear from the amended Preamble to the Act is thatthe interests of service providers and consumers are of paramountimportance, both of which have a role to play when regulations are framedunder Section 36.

24. Learned counsel for the appellants also relied upon PetroleumFand Natural Gas Regulatory Board v. Indraprastha Gas Ltd.(supra.). In this case, the Petroleum and Natural Gas RegulatoryBoard Act, 2006 was the subject matter of discussion by this Court.This Court, after construing the Act, held that where there is acassus omissis, such lacuna cannot be filled up by the judicialinterpretative process. Thus, entities which are neither “commonGcarriers” nor “contract carriers” within the tariff regulating powersof the Board under the Act were not held amenable to regulation.Further, the reach of the Act, as is clear from a reading of Sections20 to 22 would make it clear that transportation tariffs for commoncarriers and contract carriers alone could be regulated by theHBoard. This would naturally not include a regulation which will STAR INDIA PVT. LTD. v. DEPARTMENT OF INDUSTRIALPOLICY AND PROMOTION [R. F. NARIMAN, J.]

pertain to network tariff for city or local gas distribution networkas such a network is neither a common carrier nor a contractcarrier covered by the Act. Further, the laying down of thecompression charge for CNG gas would also, therefore, be whollyoutside the reach of the said Act. This judgment again has noapplication to the facts of the present case, given the fact that thePreamble read with Section 11(2) makes it clear that the Regulationand Tariff Order made thereunder would both be within the reachof TRAI under the TRAI Act.

25. At this stage, it is also important to set out some of the provisionsof the Indian Telegraph Act, 1885. This Act was amended in 2004 toinclude Section 3(1AA). The relevant sections of this Act are set outhereinbelow:

“3.(1AA) “telegraph” means any appliance, instrument, materialor apparatus used or capable of use for transmission or receptionof signs, signals, writing, images, and sounds or intelligence of anynature by wire, visual or other electro magnetic emissions, Radiowaves or Hertzian waves, galvanic, electric or magnetic means; Explanation.- “Radio waves” or “Hertzian waves” means electromagnetic waves of frequencies lower than 3,000 giga-cycles persecond propagated in space without artificial guide.

xxx xxx xxx

4. Exclusive privilege in respect of telegraphs, and powerto grant licences.— (1) Within India, the Central Governmentshall have the exclusive privilege of establishing, maintaining andworking telegraphs:

Provided that the Central Government may grant a license, onsuch conditions and in consideration of such payments as it thinksfit, to any person to establish, maintain, or work a telegraph withinany part of India:

Provided further that the Central Government may, by rules madeunder this Act and published in the Official Gazette, permit, subjectto such restrictions and conditions as it thinks fit, the establishment,maintenance and working—

(a) of wireless telegraphs on ships within Indian territorialwaters and on aircrafts within or above India, or Indianterritorial waters, and A

B

C

D

E

F

G

H

A

(b) of telegraphs other than wireless telegraphs within anypart of India.

Explanation.— The payments made for the grant of a licenceunder this sub-section shall include such sum attributable to theUniversal Service Obligation as may be determined by the CentralGovernment after considering the recommendation made in thisbehalf by the Telecom Regulatory Authority of India establishedunder sub-section (1) of Section 3 of the Telecom RegulatoryAuthority of India Act, 1997 (24 of 1997).

B

(2) The Central Government may, by notification in the OfficialGazette, delegate to the telegraph authority all or any of its powersunder the first proviso to sub-section (1).

C

The exercise by the telegraph authority of any power so delegatedshall be subject to such restrictions and conditions as the CentralGovernment may, by the notification, think fit to impose.”

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26. Sections 2(2) and 5 of the Indian Wireless Telegraphy Act,1933 are also set out hereinbelow:

“2(2) “wireless telegraphy apparatus” means any apparatus,appliance, instrument or material used or capable of use in wirelesscommunication, and includes any article determined by rule madeEunder Section 10 to be wireless telegraphy apparatus, but doesnot include any such apparatus, appliance, instrument or materialcommonly used for other electrical purposes, unless it has beenspecially designed or adapted for wireless communication or formspart of some apparatus, appliance, instrument or material speciallyso designed or adapted, nor any article determined by rule madeFunder Section 10 not to be wireless telegraphy apparatus; E

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5. Licenses.—The telegraph authority constituted under the IndianTelegraph Act, 1885 (13 of 1885), shall be the authority competentto issue licenses to possess wireless telegraphy apparatus underthis Act, and may issue licenses in such manner, on such conditionsand subject to such payments as may be prescribed.”

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27. It is clear that only a person who is licensed under Section 5of the Indian Wireless Telegraphy Act can use a teleport from IndiaHfrom which a TV channel is to be uplinked to a satellite. Equally, to be uplinked to a satellite and thereafter downlinked from such satellite to anMSO, permission would be required from the Central Government. Thiswould be clear from a reading of the separate guidelines for uplinkingand downlinking channels issued by the Government of India.

28. So far as the uplinking guidelines are concerned, on 5.12.2011,the Ministry of Information and Broadcasting (Broadcasting Wing) setout detailed conditions by which the uplinking of TV channels may bemade. Under Clause 5.9 of the said guidelines, the Government of Indiashall have the right to suspend the permission of a company for a specifiedperiod in the public interest, or in the interest of national security, toprevent misuse.

29. Similarly, insofar as the policy guidelines for downlinking ofTV channels is concerned, the Ministry has given detailed guidelines ofthe same date, i.e., 5.12.2011. Among other things, it is stated:- “2.4. No News and Current Affairs channel shall be permitted tobe downlinked if it does not meet the following additional conditions:

2.4.1. That it does not carry any advertisements aimed at Indianviewers; 2.4.2.That it is not designed specifically for Indian audiences; 2.4.3.That it is a standard international channel; 2.4.4.That it has been permitted to be telecast in the country ofits uplinking by the regulatory authority of that country; Provided that the Government may waive/modify the conditionunder clause 2.4.1 on a case-by-case basis.

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5. BASIC CONDITIONS/OBLIGATIONS

5.1. The Company permitted to downlink registered channels shallcomply with the Programme and Advertising Code prescribedunder the Cable Television Networks (Regulation) Act, 1995.

5.2. The company shall ensure compliance of the provisions ofSports Broadcasting Signals (Mandatory sharing with PrasarBharati) Act 11 of 2007 and the Rules, Guidelines, Notificationsissued thereunder.

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5.3. The applicant company shall adhere to any other Code/Standards guidelines/restrictions prescribed by Ministry ofInformation & Broadcasting, Government of India for regulationof content on TV channels from time to time.

5.4. The applicant company shall submit audited annual accountsof its commercial operations in India.

5.5. The applicant company shall obtain prior approval of theMinistry of Information and Broadcasting before undertaking anyupgradation, expansion or any other changes in the downlinkingand distribution system/network configuration.

5.6. The applicant company shall provide Satellite TV Channelsignal reception decoders only to MSO/Cable Operators registeredunder the Cable Television Networks (Regulation) Act 1995 or toa DTH operator registered under the DTH guidelines issued byGovernment of India or to an Internet Protocol Television (IPTV)Service Provider duly permitted under their existing TelecomLicense or authorized by Department of Telecommunications orto a HITS operator duly permitted under the policy guidelines forHITS operators issued by Ministry of Information andBroadcasting, Government of India to provide such service.

5.7. The applicant company shall ensure that any of its channels,which is unregistered or prohibited from being telecast ortransmitted or re-transmitted in India, under the Cable TelevisionNetworks (Regulation) Act 1995 or the DTH guidelines or anyother law for the time being in force, cannot be received in Indiathrough encryption or any other means.

5.8. The Union Government shall have the right to suspend thepermission of the company/registration of the channel for aspecified period in public interest or in the interest of Nationalsecurity to prevent the misuse of the channel. The company shallimmediately comply with any direction issued in this regard.

5.9. The applicant company seeking permission to downlink achannel shall operationalise the channels within one year fromthe date of the permission being granted by the Ministry ofInformation and Broadcasting failing which the permission willliable to be withdrawn without any notice in this regard. However, the company shall be afforded a reasonable opportunity of beingheard before such a withdrawal.

5.10. The company/channel shall adhere to the norms, rules andregulations prescribed by any regulatory authority set up to regulateand monitor the Broadcast Services in the country, 5.11. The applicant company shall give intimation to Ministry ofInformation and Broadcasting regarding change in the directorship,key executives or foreign direct investment in the company, within15 days of such a change taking place. It shall also obtain securityclearance for such changes in its directors and key executives.

5.12. The applicant company shall keep a record of programmesdownlinked for a period of 90 days and to produce the same beforeany agency of the Government as and when required.

5.13. The applicant company shall furnish such information asmay be required by the Ministry of Information and Broadcastingfrom time to time.

5.14. The applicant company shall provide the necessarymonitoring facility at its own cost for monitoring of programmesor content by the representative of the Ministry of Informationand Broadcasting or any other Government agency as and whenrequired.

5.15. The applicant company shall comply with the obligationsand conditions prescribed in the downlinking guidelines issued bythe Ministry of Information and Broadcasting, and the specificdownlinking permission agreement and registration of eachchannel.

5.16. In the event of any war, calamity/national security concerns,the Government shall have the power to prohibit for a specifiedperiod the downlinking/reception/transmission and re-transmissionof any or all channels. The Company shall immediately complywith any such directions issued in this regard.”

30. We are of the view that the provisions of the TRAI Act haveto be viewed in the light of protection of the interests of both serviceproviders and consumers. This being so, it is clear that no constrictedmeaning can be given to the provisions of this Act. It is important toremember that under Section 11(1)(a)(iv), one of the functions of the A

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AAuthority, though recommendatory, is to facilitate competition andpromote efficiency in the operation of telecommunication services (whichincludes broadcasting services) so as to facilitate growth in such services.What is also clear from Section 11(1)(b), is that terms and conditions ofinterconnectivity between different service providers have to be fixed,which necessarily includes terms that relate not only to carriage simpliciterBas submitted by Dr. Singhvi, but to all terms and conditions ofinterconnectivity between broadcaster, MSO, Cable TV operator andthe ultimate consumer, so as to ensure that the object of the Act is carriedout, namely, that both broadcasters and consumers get a fair deal.Towards this end, Section 11(2) makes it clear that the Authority may,Cfrom time to time, notify the rates at which telecommunication services,including broadcasting services, within India and outside India, shall beprovided under this Act. Dr. Singhvi argued that the literal language ofthis sub-section, which would undoubtedly bring in rates laid down in theTariff Order, would have to be constricted by the language of the last part of the provision, viz., “including the rates at which messagesDshall be transmitted to any country outside India”. We are afraidthat this is against basic canons of construction, as the expression“including” would only refer to a part of what precedes the expressionand cannot therefore constrict the part that has gone before. The plainliteral language of Section 11(2) makes it clear that rates at whichEbroadcasting services are offered within and outside India can be fixedby TRAI. It is clear therefore that when rates are fixed after severalrounds of consultations between various service providers and consumers,looking to the interest of each, it is impossible to say that any broadcaster’srights have been impinged upon. Shri Dwivedi is absolutely right insaying that at no stage is content of a TV channel sought to be regulated,Fand that pricing relating to TV channels laid down in the Regulation andTariff Order is a balancing act between the rights of broadcasters andthe interests of consumers, which we may hasten to add has not beenimpugned on the ground that any right or fundamental right is violated,but only on the ground that the Regulation as well as the Tariff OrderGare outside the “jurisdiction” of TRAI. Dr. Singhvi’s argument on thisscore must therefore fail.

31. In fact, in Avishek Goenka v. Union of India, (2012) 5SCC 275, this Court has already held:

STAR INDIA PVT. LTD. v. DEPARTMENT OF INDUSTRIALPOLICY AND PROMOTION [R. F. NARIMAN, J.]

“18. If one examines the powers and functions of TRAI, aspostulated under Section 11 of the Act, it is clear that TRAI wouldnot only recommend, to DoT, the terms and conditions upon whicha licence is granted to a service provider but has to also ensurecompliance with the same and may recommend revocation oflicence in the event of non-compliance with the regulations. It hasto perform very objectively one of its main functions i.e. to facilitatecompetition and promote efficiency in the operation of thetelecommunication services, so as to facilitate growth in suchservices. It is expected of this regulatory authority to monitor thequality of service and even conduct periodical survey to ensureproper implementation.”

32. We must also hasten to add that the power under Section36(1) of the Act is very wide and not constricted by the provisions ofSection 11, as was held in BSNL v. TRAI (supra.).

33. Equally, in Hotel & Restaurant Assn. v. Star India (P)Ltd., (2006) 13 SCC 753, this Court has held:- “24. Section 11 of the TRAI Act provides for the functionsof TRAI. Clause (a) of sub-section (1) of Section 11 ofthe TRAI Act empowers TRAI to make recommendations eithersuo motu or on the request from the licensor, on the mattersenumerated therein. Clause (b) thereof empowers it inter alia tofix the terms and conditions of interconnectivity between theservice providers.

25. Sub-section (2) of Section 11 of the TRAI Act contains a nonobstante clause providing that TRAI may frame from time to timeby order(s) notified in the Official Gazette the rates at which thetelecommunication services within India and outside India shallbe provided under the said Act including the rates at whichmessages shall be transmitted to any country outside India. Provisoappended to sub-section (2) thereof empowers TRAI to notifydifferent rates for different persons or class of persons for similartelecommunication services and where different rates are fixedas aforesaid TRAI shall record the reasons therefor.

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A55.TRAI exercises a broad jurisdiction. Its jurisdiction is not onlyto fix tariff but also laying down terms and conditions for providingservices. Prima facie, it can fix norms and the mode and mannerin which a consumer would get the services.

56. The role of a regulator may be varied. A regulation may providefor cost, supply of service on non-discriminatory basis, the modeand manner of supply making provisions for fair competitionproviding for a level playing field, protection of consumers’ interest,prevention of monopoly. The services to be provided for throughthe cable operators are also recognised. While making theregulations, several factors are, thus required to be taken intoaccount. The interest of one of the players in the field would notbe taken into consideration throwing the interest of others to thewind.”

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(Emphasis supplied.)

34. It is interesting to note, as has been stated by Shri Dwivedi,that in Star India’s response to the consultative paper of 29.1.2016, StarIndia itself has requested that the Regulation and Tariff Order be fixedon the basis of the principles that are now contained therein. For example,Star India’s response to whether a reasonable wholesale price cap canbe ensured for mass genres, was as follows:- D

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“Reasonable wholesale price cap to be ensured for the massgenres [Channels need to be incentivized for creating diverse and]innovative content F

[Incumbent flagship channels have been suffering from]legacy price and bouquet freeze.

[All channels should earn fair share of consumers’ ARPU.]

[Our research findings reveal that basis current ARPUs,]share of viewership of flagship channels, and existing revenueshare of the broadcasters in the addressable market, the valueattributed by the market to the flagship channels is significantlymore than the existing wholesale list prices of these channels.

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[Accordingly, the retail value ascribed to flagship]entertainment channels by consumers, translate into awholesale price of Rs.11/- to Rs.28/-. For details refer toAnnexure A.

[Therefore, the wholesale cap should be Rs.28/- to allow]for optimum monetization of the flagship channels. If thechannel values are allowed to be corrected basis consumerdemand the share of the channel in the ARPUs shall berealigned to reflect their true value proposition without leadingto any arbitrary or perverse price hikes. Further the proposeddiscount cap will effectively eliminate pricing distortions.

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[However, in the interest of enabling a smooth and seamless]transition to full addressability without creating anyunnecessary chaos we are proposing the following caps, inthe transition phase. Any lower cap will not only stifleinvestments in innovative content but also continue to restrictincumbent channels whose rates were frozen in 2003-2004from realizing their real value.

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Mass GenreProposedPriceCap (Rs.)EGeneral12.00Entertainment(Hindi & Regional)Movies (Hindi &10.00Regional)Sports18.00F

[These caps should be subject to automatic annual revision,]basis inflation.”

While answering whether broadcasters should offer wholesale discountsto distribution platform operators (hereinafter referred to as a “DPO”)which should be transparently available as part of the referenceinterconnect offer (hereinafter referred to as “RIO”), Star India hasstated:

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“Wholesale discounts to be subject to a maximum overallcap of 33%

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As explained above, there are wide variety of parametersthat a single broadcaster may want to drive basis variousbusiness requirements 33% discount will be sufficient to effectively drive only afew business requirements Any discounting cap lower than 33% will render thediscounting structure ineffective/unworkable.”

Similarly, so far as high definition channels are concerned, Star Indiahad this to say:

“1. HD channels offer a viewer experience that is distinctlydifferent from SD channels

- The production, transmission and re-transmission of HDchannels entail substantial investments.

- HD channels offer distinctly superior audio and video qualityto the viewers through cutting edge technology used rightfrom shooting of content, production, post-production,transmission & re-transmission. For detailed explanation referto Annexure B.

- The consumption of HD channel requires significantinvestment by the consumer in an HD TV and HD set-topbox. As such, these channels are aspirational and for affluentaudiences who demand better content & quality offering andhave the capacity to pay for it.

2. Price forbearance for HD channels should continue

- HD channel can be subscribed by only those subscriberswho can afford specialized HD set-top box as well as HDTV, which comes at a premium.

- The HD channel market has witnessed a robust growthand has allowed broadcasters to invest in quality and innovativecontent. Over the last four years market forces have enabledthe channels to discover their real prices and desiredpenetration.

- This has been possible because of the laudable decision ofthe Authority to keep HD channels outside the regulatorypurview. With upcoming 3D, 4D and virtual reality it would indeed be a regressive step if the Authority were to nowregulate HD channels thereby sending out a negative signalto potential investments in these technologies.

- Hence we recommend that the Authority should continueto keep HD channels outside the regulatory ambit.

- In order to protect the interest of subscribers and to fosterfurther growth in this segment, we recommend that HDchannels should adhere to twin conditions and discountingcaps at the wholesale and retail.

- Discount on wholesale prices should be capped at 33% toensure a viable a-la-carte fallback option for DPOs.

- Retail a-la-carte prices should be linked to wholesale prices(same linkage multiplier as used for SD channels).

- Discount at retail level also to be limited to 33% to ensure aviable a-la-carte fallback option for consumer.

3. Bundling of HD and SD channels should not be allowed,both at wholesale and retail levels.

4. Charging of access fee for HD channels should not beallowed at retail level.

5. DPOs free to sell HD channels as a-la-carte as well asbouquet(s) of HD channels.

6. Consumers and DPOs should have a choice to subscribeto only HD channels or only SD channels or both combinedbut purchased separately.”

Equally, insofar as whether free to air and pay channel bouquetsare concerned, Star India itself stated that they should not be bundledtogether thus:- “FTA and Pay channels should not be bundled together

- As has been highlighted in the Preamble, we believe thatFTA channels should be free to consumer.

- Pay and FTA channels should not be bundled in the samebouquet.

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- The declaration of a-la-carte rate is only with regard to paychannels, as per existing regulations. Allowing a-la-cartepricing of FTA channels is thus not in accordance with theextent regulatory constructs.

- Pricing FTA channels at retail level and bundling them withBPay channels leads to price distortions by bloating the bouquetsize and price, which is not in consumer interest.

��Creating separate pay bouquets will ensure consumersare provided true visibility of pay channel pricing.”

35. It is only when TRAI issued a second consultation paper datedC4.5.2016 that Star India submitted its response in June, 2016 where itraised for the first time the issue relating to the Copyright Act as anafterthought. What is important to notice is that even in this response,Star India reiterated that discount caps should be provided for as thischecks discriminatory behavior during negotiation and will facilitateDdesigning of discount criteria based on intelligible differentia which willhelp serve the diverse needs of consumers. In a third response to thedraft regulations and tariff order, Star India raised jurisdictional issues ofTRAI.

36. Pursuant to these and other inputs, TRAI has in its explanatoryEmemorandum given reasons for the Tariff Order as follows:- “64. The Authority has noted that at present the uptake of channelson a-la-carte basis is negligible as compared to the bouquetsubscriptions. Analysis yields that the prime reason for such pooruptake of a-la-carte channels is that the a-la-carte rates ofchannels are disproportionately high as compared to the bouquetFrates and further, there is no well defined relationship betweenthese two rates. As per data available with TRAI, some bouquetsare being offered by the distributors of television channels at adiscount of upto 80%-90% of the sum of a-la-carte rates of paychannels constituting those bouquets. These discounts are basedGon certain eligibility criteria/conditions to be fulfilled by thedistributor of television channels in order to avails those discountsfrom broadcasters. Such high discounts force the subscribers totake bouquets only and thus reduce subscriber choice.As a result,while technically, a-la-carte rates of channels are declared, these G

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are illusive and subscribers are left with no choice but to opt forbouquets. Bouquets formed by the broadcasters contain only fewpopular channels. The distributors of television channels are oftenasked to take the entire bouquet as otherwise they are denied thepopular channels altogether or given such popular channels atRIO rates. To make the matters worse, the distributors of televisionchannels have to pay as if all the channels in the bouquet arebeing watched by the entire subscriber base, when in fact onlythe popular channels will have high viewership. In such a scenario,at the retail end, the distributors of television channels somehowpush these channels to maximum number of subscribers so as torecover costs. This marketing strategy based on bouquetsessentially results in ‘perverse pricing’ of bouquets vis-à-vis theindividual channels.As a result, the customers are forced tosubscribe to bouquets rather than subscribing to a-la-carte channelsof their choice. Thus, in the process, the public, in general, end uppaying for “unwanted” channels and this, in effect, restrictssubscriber choice. Bundling of large number of unwanted channelsin bouquets also result in artificial occupation of distributors’network capacity. This acts as an entry barrier for newer TVchannels.

65. In order to facilitate subscribers to exercise their options inline with intention of lawmakers to choose individual channels, inthe new framework the broadcasters will declare to customers/subscribers the MRP of their a-la-carte channels and bouquets ofpay channels. In order to ensure that prices of the a-la-cartechannels are kept reasonable, the maximum discount permissiblein formation of a bouquet has been linked with the sum of the a-la-carte prices of the of pay channels forming that bouquet. Abroadcaster can offer a maximum discount of 15% while offeringits bouquet of channels over the sum of MRP of all the pay channelsin that bouquet so as to enable customer choice through a-la-carte offering and also prevent skewed a-la-carte and bouquetpricing (refer example 1). The bouquet(s) offered by thebroadcasters to subscribers shall be provided by the distributorsof television channels to the subscribers without any alteration incomposition of the bouquet(s). In case a broadcaster feels that AB

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more discount can be provided in formation of the bouquet, itindirectly means that a-la-carte prices at the first stage has beenkept high and there is a need to revise such a-la-carte pricesdownwardly. Full flexibility has been given to broadcasters todeclare price of their pay channels on a-la-carte basis to correctsuch situations, if it may come.

66. Some stakeholders are of the opinion that limiting the discountto subscribers while forming bouquets is anti subscriber. In this-regard, while the Authority wants to facilitate the availability of ala-carte choice to customers/subscribers, it does not intend toencroach upon the freedom of broadcasters and distributors to dobusiness.During the discussions in the Parliament on the motionfor consideration of the Cable Television Networks (Regulation)Amendment Bill, 2011, the then Minister of Information andBroadcasting emphasised the need to establish a system forsubscribers to choose a-la-carte channels of choice. The Authorityhas also made several attempts in this regard, but for one or theother reason could not succeed. Here it is important to understandthat the Authority has not been able to do pricing of channels inthe absence of pricing of content. Present trends indicate thatmajority of channels are priced much below the prevailing ceiling,but higher ceilings were prescribed to give flexibility to broadcastersto monetise their channels and freedom to do business. Further,different channels even in the same genre may have varying costof production and potential to monetise, but within the framework.A broadcaster may price even non-driver channels at a muchhigher value that they can command. Non-discovery of reasonableprice of a channel in a market is one of the constraints that can bemanipulated and misused to price a channel in a-la-carte fromwhich is illusionary. Such high a-la-carte prices permitsbroadcasters/distributors to provide high discounts to push non-drivers channels in form of bouquets to the subscribers whilereducing the probability of choosing the a-la-carte channels ofchoice as required by the lawmakers in the Parliament. Thepossibility to forcing bouquets over a-la-carte choice by usinghigher discounts can be further understood by following example,where a broadcaster has a total of 35 pay channels out of whichonly 5 are driver channels:

STAR INDIA PVT. LTD. v. DEPARTMENT OF INDUSTRIALPOLICY AND PROMOTION [R. F. NARIMAN, J.]

ChannelDiscount Discount Discount Discount Discount 75% 60% 45% 30% 15% Channel 1 a-la-carte price 19 19 19 19 19 Channel 2 a-la-carte price1010101010Channel 3 a-la-carte price1212121212Channel 4 a-la-carte price55555Channel 5 a-la-carte price 4 4 4 4 4 Sum of a-la-carte prices of 5 5050505050driver pay channels Sum of a-la-carte prices of 30 3030303030non-driver pay channels (@ Re 1) Total price of 35 a-la-carte [REDACTED]pay channels Price of bouquet of 35 pay 20 32 44 56 68 channels (with discount on sum of a-la-carte prices)

The above table clearly indicates that in case the amount of discountoffered by the broadcaster, over the sum of a-la-carte prices ofpay channels, while forming the bouquet of those pay channels isvery high (75%), the price of bouquet becomes much lower thanthe sum of a-la-carte prices to the extent that it is almost equal toa-la-carte price of one driver channel. Such amount of discount isanti customer/subscriber as it discourages a-la-carte selection ofchannels. As the amount of discount on formation of bouquetdecreases, the difference between the prices of bouquet and thesum of a-la-carte prices also decreases. In case the amount ofdiscount is fixed at 15%, the price of bouquet becomes higherthan the sum of a-la-carte prices of driver channels; therebyencouraging a subscriber to choose a-la-carte channels of hischoice.

67. In the present regulatory framework incidences have cometo the knowledge where discount upto 90% on the declared RIOprices has been given by broadcasters. Obviously such efforts killcompetition and reduce a-la-carte choice which is anti-subscriber.Accordingly, the Authority has prescribed a discount of 15% tobe provided by broadcasters at wholesale level and further 15%to be provided by distributors at retail level. The net effect to A

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subscribers at retail level will be a discount of approximately 30%on the bouquets of channels. Therefore flexibility of formation ofbouquet has been given to broadcasters and MSOs both to suchan extent that total permissible discount does not kill the a-la-carte choice.The Authority has been careful in prescribing aframework which does not encourage non-driver channel to bepushed to subscribers against their choice. Non-driver channelswhich are provided as part of bouquets not only kill choice of theala-carte channels but also eat away the channel carrying capacityavailable with distributors which may result in artificial capacityconstraints at distribution platforms for launch of new/competitivechannels. Such restrictions are anti-subscriber and have to becarefully handled. Accordingly, the Authority has consciouslydecided the present framework of prescribing relationship betweena-la-carte and bouquet prices to protect interest of customers/viewers and as well as those of service providers.However, theAuthority will keep a watch on the developments in the marketand may review the maximum permissible discount while offeringa bouquet, in a time period of about two years.

68. A broadcaster is free to offer its pay channels in the form ofbouquet(s) to customers. While subscribing to bouquet, a customermay not be aware of the price of each channel forming thebouquet. Abnormal high price of a pay channel may result in higherprice of a bouquet leading to adverse impact on subscribers’interests. It is an established fact that bundling of channelscomplicates and obscures their pricing. Prices are obscuredbecause subscribers do not always understand the relationshipbetween the bundle price and a price for each component.However, the bundling of channels offers convenience to thesubscribers as well as services providers in subscriptionmanagement. Keeping in view these realties and to protect theinterests of subscribers, the Authority has prescribed a ceiling ofRs. 19/- on the MRP of pay channels which can be provided aspart of a bouquet.Therefore, any pay channel having MRP ofmore than Rs. 19/- cannot become part of any bouquet. Theamount of Rs. 19/- has been prescribed keeping in view theprevailing highest genre wise ceilings of Rs. 15.12 for alladdressable systems between broadcaster & DPOs at wholesalelevel and further enhancing it 1.25 times to account for DPOs distribution fee. Broadcasters also have complete freedom to pricetheir pay channels which do not form part of any bouquet andoffered only on a-la-carte basis. Similar conditions will also beapplicable to DPOs for formation of the bouquets. However, theAuthority will keep a watch on the developments in the marketand may review the manner in which a channel can be providedas part of a bouquet, in a time period of about two years.”

(Emphasis supplied.)

37. It can thus be seen that both the Regulation as well as theTariff Order have been the subject matter of extensive discussionsbetween TRAI, all stake holders and consumers, pursuant to which mostof the suggestions given by the broadcasters themselves have beenaccepted and incorporated into the Regulation and the Tariff Order. TheExplanatory Memorandum shows that the focus of the Authority hasalways been the provision of a level playing field to both broadcasterand subscriber. For example, when high discounts are offered forbouquets that are offered by the broadcasters, the effect is thatsubscribers are forced to take bouquets only, as the a-la-carte rates ofthe pay channels that are found in these bouquets are much higher. Thisresults in perverse pricing of bouquets vis-à-vis individual pay channels.In the process, the public ends up paying for unwanted channels, therebyblocking newer and better TV channels and restricting subscribers’ choice.It is for this reason that discounts are capped. While doing so, however,full flexibility has been given to broadcasters to declare the prices oftheir pay channels on an a-la-carte basis. The Authority has shown thatit does not encroach upon the freedom of broadcasters to arrange theirbusiness as they choose. Also, when such discounts are limited, asubscriber can then be free to choose a-la-carte channels of his choice.Thus, the flexibility of formation of a bouquet, i.e., the choice of channelsto be included in the bouquet together with the content of such channels,is not touched by the Authority. It is only efforts aimed at thwartingcompetition and reducing a-la-carte choice that are, therefore, beinginterfered with. Equally, when a ceiling of INR 19 on the maximumretail price of pay channels which can be provided as a part of a bouquetis fixed by the Authority, the Authority’s focus is to be fair to both thesubscribers as well as the broadcasters. INR 19 is an improvementover the erstwhile ceiling of INR 15.12 fixed by the earlier regulationwhich nobody has challenged. To maintain the balance between the AB

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Asubscribers’ interests and broadcasters’ interests, again the Authoritymakes it clear that broadcasters have complete freedom to price channelswhich do not form part of any bouquet and are offered only on an a-la-carte basis. As market regulator, the Authority states that the impugnedRegulation and Tariff Order are not written in stone but will be reviewedkeeping a watch on the developments in the market. We are, therefore,Bclearly of the view that the Regulation and the Tariff Order have beenmade keeping the interests of the stakeholders and the consumers inmind and are intra vires the regulation power contained in Section 36 ofthe TRAI Act. Consequently, we agree with the conclusion of the learnedChief Justice and the third learned Judge of the Madras High Court thatCthese writ petitions deserve to be dismissed.38. Since submissions have been made by Dr. Singhvi on the reachof various other Acts, it is a little important to deal with the same.

39. Dr. Singhvi relied heavily upon the Sports Act. The Statementof Objects and Reasons of this Act makes it clear that the distribution ofDbroadcasting signals of sporting events of public interest is notdisseminated to persons who do not have access to satellite and CableTV, most of whom are in rural areas. Since the downlinking and uplinkingpolicy guidelines of the Government have been challenged in courts aslacking statutory sanction, it has become necessary that sporting eventsEof national importance reach the general public on a free to air basis. Itis for this reason that the definitions of “broadcaster”, “broadcasting”,etc. refer to content. The following are certain relevant terms as definedunder the Sports Act:

“2.(1)(a) “broadcaster” means any person who provides a contentFbroadcasting service and includes a broadcasting network serviceprovider when he manages and operates his own television orradio channel service; (b) “broadcasting” means assembling and programming any formof communication content, like signs, signals, writing, pictures,Gimages and sounds, and either placing it in the electronic form onelectro-magnetic waves on specified frequencies and transmittingit through space or cables to make it continuously available on thecarrier waves, or continuously streaming it in digital data form onthe computer networks, so as to be accessible to single or multipleusers through receiving devices either directly or indirectly; andHall its grammatical variations and cognate expressions; STAR INDIA PVT. LTD. v. DEPARTMENT OF INDUSTRIALPOLICY AND PROMOTION [R. F. NARIMAN, J.]

(c) “broadcasting service” means assembling, programming andplacing communication content in electronic form on the electro-magnetic waves on specified frequencies and transmitting itcontinuously through broadcasting network or networks so as toenable all or any of the multiple users to access it by connectingtheir receiver devices to their respective broadcasting networksand includes the content broadcasting services and thebroadcasting network services; (d) “broadcasting networks service” means a service, whichprovides a network of infrastructure of cables or transmittingdevices for carrying broadcasting content in electronic form onspecified frequencies by means of guided or unguided electro-magnetic waves to multiple users, and includes the managementand operation of any of the following:

(i) Teleport/Hub/Earth Station;

(ii) Direct-to-Home (DTH) Broadcasting Network,

(iii) Multi-system Cable Television Network,

(iv) Local Cable Television Network,

(v) Satellite Radio Broadcasting Network,

(vi) any other network service as may be prescribed by theCentral Government; xxx xxx xxx (h) “content” means any sound, text, data, picture (still or moving),other audio-visual representation, signal or intelligence of anynature or any combination thereof which is capable of beingcreated, processed, stored, retrieved or communicatedelectronically;

(i) “content broadcasting service” means the assembling,programming and placing content in electronic form andtransmitting or retransmitting the same on electro-magnetic waveson specified frequencies, on a broadcasting network so as to makeit available for access by multiple users by connecting theirreceiving devices to the network, and includes the managementand operation of any of the following:

A

B

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D

E

F

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A

(i) terrestrial television service,

(ii) terrestrial radio service,

(iii) satellite television service,

(iv) satellite radio service,

B

(v) cable television channel service,

(vi) community radio service,

(vii) any other content broadcasting services as may beprescribed by the Central Government.”

CThe heart of the Sports Act is contained in Sections 3 and 5 thereof,which state as follows:-

“3. Mandatory sharing of certain sports broadcastingsignals.—(1) No content rights owner or holder and no televisionor radio broadcasting service provider shall carry a live televisionbroadcast on any cable or Direct-to-Home network or radiocommentary broadcast in India of sporting events of nationalimportance, unless it simultaneously shares the live broadcastingsignal, without its advertisements, with the Prasar Bharati to enablethem to re-transmit the same on its terrestrial networks and Direct-to-Home networks in such manner and on such terms andconditions as may be specified.

D

E

(2) The terms and conditions under sub-section (1) shall alsoprovide that the advertisement revenue sharing between thecontent rights owner or holder and the Prasar Bharati shall be inthe ratio of not less than 75:25 in case of television coverage andF50:50 in case of radio coverage.

(3) The Central Government may specify a percentage of therevenue received by the Prasar Bharati under sub-section (2),which shall be utilised by the Prasar Bharati for broadcasting othersporting events.

G

xxx xxx xxx

5. Power of the Central Government to issue Guidelines.—The Central Government shall take all such measures, as it deemsfit or expedient, by way of issuing Guidelines for mandatory sharingof broadcasting signals with Prasar Bharati relating to sportingevents of national importance:

H

Provided that the Guidelines issued before the promulgation ofthe Sports Broadcasting Signals (Mandatory Sharing with PrasarBharati) Ordinance, 2007 (Ord. 4 of 2007) shall be deemed tohave been issued validly under the provision of this section.”

40. Shri Dwivedi is therefore right that the object of the SportsAct has nothing to do with the validity of the Regulation and Tariff Ordermade by TRAI under the TRAI Act. Content is referred to in the SportsAct only for the reason stated in the Objects and Reasons. Secondly, ashas correctly been argued by Shri Dwivedi and as has been held by usabove, the TRAI Act, as well as the Regulation and Tariff Order, do notin any manner affect the content of the TV channels that are broadcastby the broadcasters in these cases.

41. Dr. Singhvi then relied upon the Cable TV Act as follows:

“2.(a-i) “Authority” means the Telecom Regulatory Authority ofIndia established under sub-section (1) of Section 3 of the TelecomRegulatory Authority of India Act, 1997 (24 of 1997); (a-ii) “Broadcaster” means a person or a group of persons, orbody corporate, or any organisation or body providing programmingservices and includes his or its authorised distribution agencies; (a-iii) “cable operator” means any person who provides cableservice through a cable television network or otherwise controlsor is responsible for the management and operation of a cabletelevision network and fulfils the prescribed eligibility criteria andconditions; (b) “cable service” means the transmission by cables ofprogrammes including re-transmission by cables of any broadcasttelevision signals;

(c) “cable television network” means any system consisting of aset of closed transmission paths and associated signal generation,control and distribution equipment, designed to provide cableservice for reception by multiple subscribers; xxx xxx xxx 4-A. (3) If the Central Government is satisfied that it is necessaryin the public interest so to do, and if not otherwise specified by theAuthority, it may direct the Authority to specify, by notification in A

B

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A

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the Official Gazette, one or more free-to-air channels to be includedin the package of channels forming basic service tier and any oneor more such channels may be specified, in the notification, genre-wise for providing a programme mix of entertainment, information,education and such other programmes and fix the tariff for basicservice tier which shall be offered by the cable operators to theconsumers and the consumer shall have the option to subscribe toany such tier:

Provided that the cable operator shall also offer the channels inthe basic service tier on a la carte basis to the subscriber at atariff specified under this sub-section.

(4) The Central Government or the Authority may specify in thenotification referred to in sub-section (3), the number of free-to-air channels to be included in the package of channels formingbasic service tier for the purposes of that sub-section and differentnumbers may be specified for different States, cities, towns orareas, as the case may be.

xxx xxx xxx

Explanation.—For the purposes of this section—

(a) “addressable system” means an electronic device (whichincludes hardware and its associated software) or more thanone electronic device put in an integrated system throughwhich signals of cable television network can be sent inencrypted form, which can be decoded by the device ordevices, having an activated Conditional Access System atthe premises of the subscriber within the limits of authorisationmade, through the Conditional Access System and thesubscriber management system, on the explicit choice andrequest of such subscriber, by the cable operator to thesubscriber; (b) “basic service tier” means a package of free-to-airchannels to be offered by a cable operator to a subscriberwith an option to subscribe, for a single price to subscribersof the area in which his cable television network is providingservice;

(c) “encrypted”, in respect of a signal of cable televisionnetwork, means the changing of such signal in a systematicway so that the signal would be unintelligible without use ofan addressable system and the expression “unencrypted” shallbe construed accordingly; (d) “free-to-air channel”, in respect of a cable televisionnetwork, means a channel for which no subscription fee is tobe paid by the cable operator to the broadcaster for its re-transmission on cable; (e) “pay channel”, in respect of a cable television network,means a channel for which subscription fees is to be paid tothe broadcaster by the cable operator and due authorisationneeds to be taken from the broadcaster for its re-transmissionon cable; (f) “subscriber management system” means a system ordevice which stores the subscriber records and details withrespect to name, address and other information regarding thehardware being utilised by the subscriber, channels or bouquetsof channels subscribed to by the subscriber, price of suchchannels or bouquets of channels as defined in the system,the activation or deactivation dates and time for any channelor bouquets of channels, a log of all actions performed on asubscriber’s record, invoices raised on each subscriber andthe amounts paid or discount allowed to the subscriber foreach billing period.

xxx xxx xxx

5. Programme code.—No person shall transmit or re-transmitthrough a cable service any programme unless such programmeis in conformity with the prescribed programme code:

[***]”

42. He then referred to Rule 6 of the Cable Television NetworksRules, 1994, as follows:- “6. Programme Code. –

(1) No programme should be carried in the cable service which:- (a) Offends against good taste or decency:

A

B

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DE

F

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A

B

C

D

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(b) Contains criticism of friendly countries;

(c) Contains attack on religions or communities or visuals orwords contemptuous of religious groups or which promotecommunal attitudes; (d) Contains anything obscene, defamatory, deliberate, falseand suggestive innuendos and half truths; (e) Is likely to encourage or incite violence or contains anythingagainst maintenance of law and order or which promote-anti-national attitudes; (f) Contains anything amounting to contempt of court; (g) Contains aspersions against the integrity of the Presidentand Judiciary; (h) Contains anything affecting the integrity of the Nation;

(i) Criticises, maligns or slanders any individual in person orcertain groups, segments of social, public and moral life ofthe country ; (j) Encourages superstition or blind belief; (k) Denigrates women through the depiction in any mannerof the figure of a women, her form or body or any part thereofin such a way as to have the effect of being indecent, orderogatory to women, or is likely to deprave, corrupt or injurethe public morality or morals;

(l) Denigrates children;

(m) Contains visuals or words which reflect a slandering,ironical and snobbish attitude in the portrayal of certain ethnic,linguistic and regional groups; (n) Contravenes the provisions of the Cinematograph Act,1952.

(o) is not suitable for unrestricted public exhibition Provided that no film or film song or film promo or film trailer ormusic video or music albums or their promos, whether producedin India or abroad, shall be carried through cable service unless ithas been certified by the Central Board of Film Cetification(CBFC)) as suitable for unrestricted public exhibition in India.

Explanation – For the purpose of this clause, the expression“unrestricted public exhibition” shall have the same meaning asassigned to it in the Cinematograph Act, 1952 (37 of 1952);

(2) The cable operator should strive to carry programmes in hiscable service which project women in a positive, leadership roleof sobriety, moral and character building qualities.

(3) No cable operator shall carry or include in his cable serviceany programme in respect of which copyright subsists under theCopyright Act, 1972 (14 of 1972) unless he has been granted alicence by owners of copyright under the Act in respect of suchprogramme.

(4) Care should be taken to ensure that programmes meant forchildren do not contain any bad language or explicit scenes ofviolence.

(5) Programmes unsuitable for children must not be carried in thecable service at times when the largest numbers of children areviewing.

(6) No cable operator shall carry or include in his cable serviceany television broadcast or channel, which has not been registeredby the Central Government for being viewed within the territoryof India PROVIDED that a cable operator may continue to carry or includein his cable service any Television broadcast or channel, whoseapplication for registration to the Central Government was madeon or before 11th May, 2006 and is under consideration, for aperiod upto 31st May, 2008 or till such registration has been grantedor refused, whichever is earlier PROVIDED further that channels uplinking from India, inaccordance permission for uplinking granted before 2nd December,2005, shall be treated as registered television channels and can becarried or included in the cable service.”

43. The argument of Dr. Singhvi is that since this Act regulatescontent downstream from the Cable TV operator to the consumer, itsabsence in the TRAI Act is eloquent testimony to the fact that contentcannot be the subject matter of the TRAI Act. As has been held by ushereinabove, the same answer must obtain, namely, that this Act is also A

B

C

D

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H

Airrelevant in the present case as the TRAI Act does not, as has beenheld by us above, regulate the content of the TV channels that arebroadcasted by the broadcaster.

44. The main thrust of the arguments of both Dr. Singhvi and Mr.Chidambaram were also by copious reference to the Copyright Act,B1957, which, according to them, showed that once the Copyright Actsteps in, TRAI must necessarily step out. They referred to certainprovisions of this Act stage-wise. The Copyright Act, 1957 as originallyenacted stated in its Objects and Reasons that: “it is necessary to enactan independent self-contained law on the subject of copyright inthe light of growing public consciousness of the rights andCobligations of authors and in the light of experience gained in theworking of the existing law during the last forty years. New andadvanced means of communications like broadcasting, litho-photography, etc., also call for certain amendments in the existinglaw”, as a result of which certain rights akin to copyright are conferredDon broadcasting authorities in respect of programmes broadcast by them.In this Act, as originally enacted, Section 2(v) defined “radio-diffusion”as follows:

“2(v).“radio-diffusion” includes communication to the public byany means of wireless diffusions whether in the form of soundsEor visual images or both.”45. Section 37, as originally enacted, recognised a broadcastreproduction right by radio-diffusion only by the Government or any otherAuthority of Government as follows:

“37. Broadcast Reproduction RightF(1)Where any programme is broadcast by radio-diffusion bythe Government or any other broadcasting authority, a specialright to be known as “broadcast reproduction right” shall subsistin such programme.

(2) The Government or other broadcasting authority, as the caseGmay be, shall be the owner of the broadcast reproduction rightand such right shall subsist until twenty-five years from thebeginning of the calendar year next following the year in whichthe programme is first broadcast.

(3) During the continuance of a broadcast reproduction right inHrelation to any programme, any person, who,- (a) without the licence of the owner of the right-

(i) rebroadcasts the programme in question or any substantialpart thereof or

(ii) causes the programme in question or any substantialpart thereof to be heard in public; or (b) without the licence of the owner of the right to utilise thebroadcast for the purpose of making a record recording theprogramme in question or any substantial part thereof, makesany such record, shall be deemed to infringe the broadcastreproduction right.”

46. Section 38, as originally enacted prescribed as under :

“38. Other provisions of this Act to apply to broadcastreproduction rights.

(1) Sections 18, 19, 30, 53, 55, 58, 64, 65 and 66 shall, with anynecessary adaptations and modifications, apply in relation to thebroadcast reproduction right in any programme as they apply inrelation to the copyright in a work :

xxx xxx xxx”

47. Sections 18 and 19 of the Copyright Act deal with assignmentof copyright and royalty or other consideration payable to the owner forsuch assignment. Section 30 of the Copyright Act refers to the right tolicence any interest in copyright by the author or his duly authorisedagent.

48. By the 1983 amendment to the Copyright Act, Section 2(v)defining radio-diffusion was deleted and instead Section 2(dd) was inserteddefining “broadcast” as follows:

“2(dd). “broadcast” means communication to the public –

(i) By means of wireless diffusion, whether in any one ormore of the forms or signs, sounds or visual images; or

(ii) By wire,

and includes re-broadcast.”

49. Section 2(ff) was also inserted, defining “communication tothe public” as follows:

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A

“2(ff) “communication to the public” means communication tothe public in whatever manner, including communication throughsatellite.”

50. Consequently, Section 37 was also amended so as to replacethe expression “radio-diffusion” with the expression “broadcast”.

B

51. In 1994, consequent to treaty obligations imposed upon India,broadcast reproduction rights were expanded to include privatebroadcasting organisations. The Statement of Objects and Reasons forthe aforesaid amendment made it clear that:

“… The law relating to copyright and related rights has been undercomprehensive review of the Government for some time, takinginto account the difficulties expressed by different groups ofcopyright owners and others, the experience gained from theadministration of the existing law and the situation created byvarious technological developments that have taken place.

C

D

2. The Copyright Act, 1957 amended and consolidated the lawrelating to copyright in India. It was further amended by theCopyright (Amendment) Acts of 1983 and 1984 and certainimprovements were effected. By the Copyright (Amendment)Act, 1992 the term of copyright was further extended by a periodEof ten years. Now, it is considered appropriate to further amendthe provisions of the Copyright Act, 1957- xxx xxx xxx to further clarify the law in respect of cable, satellite andother means of simultaneous communication of works to morethan one household or private place of residence, includingthe residential rooms of a hotel or hostel.

F

xxx xxx xxx

to further improve the functioning of the Copyright Board; to simplify and improve the law relating to copyright andrelated rights, in the interests of the general public, and inparticular of the users as well as the owners of such rights.”

G

52. Section 2(ff) defining “communication to the public” wassubstituted with a more comprehensive definition as follows:

H

“2(ff) “communication to the public” means making any workavailable for being seen or heard or otherwise enjoyed by thepublic directly or by any means of display or diffusion other thanby issuing copies of such work regardless of whether any memberof the public actually sees, hears or otherwise enjoys the work somade available.

Explanation: For the purpose of this clause, communicationthrough satellite or cable or any other means of simultaneouscommunication to more than one household or place of residenceincluding residential rooms or any hotel or hostel shall be deemedto be communication to the public.”

53. Section 37 was entirely recast as follows :

“37. Broadcast reproduction right. - (1) Every broadcastingorganisation shall have a special right to be known as ‘‘broadcastreproduction right’’ in respect of its broadcasts.

(2) The broadcast reproduction right shall subsist until twenty-five years from the beginning of the calendar year next followingthe year in which the broadcast is made.

(3) During the continuance of a broadcast reproduction right inrelation to any broadcast, any person who without the licence ofthe owner of the right does any of the following acts of thebroadcast or any substantial part thereof, - (a) re-broadcasts the broadcast; or (b) causes the broadcast to be heard or seen by the public onpayment of any charges; or

(c) makes any sound recording or visual recording of thebroadcast; or (d) makes any reproduction of such sound recording or visualrecording where such initial recording was done withoutlicence or, where it was licensed, for any purpose notenvisaged by such licence; or (e) sells or hires to the public, or offers for such sale or hire,any such sound recording or visual recording referred to inclause (c) or clause (d), shall, subject to the provisions of section 39, be deemed to haveinfringed the broadcast reproduction right.”

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A54. Section 38 was substituted with a new Section 39A as follows:

“39A.Other provisions applying to broadcastreproduction right and performer’s right.(1) Sections 18, 19, 30, 53, 55, 58, 64, 65 and 66 shall, with anynecessary adaptations and modifications, apply in relation to thebroadcast reproduction right in any broadcast and the performers’right in any performance as they apply in relation to copyright in awork:

B

xxx xxx xxx”

55. Sections 33 and 33A, which have been relied upon by thelearned counsel for the appellants, read as follows:

C

“33. Registration of copyright society.— (1) No person orassociation of persons shall, after coming into force of theCopyright (Amendment) Act, 1994 commence or, carry on thebusiness of issuing or granting licences in respect of any work inwhich copyright subsists or in respect of any other rights conferredby this Act except under or in accordance with the registrationgranted under sub-section (3):

D

Provided that an owner of copyright shall, in his individual capacity,continue to have the right to grant licences in respect of his ownworks consistent with his obligations as a member of the registeredcopyright society:

E

Provided further that the business of issuing or granting licence inrespect of literary, dramatic, musical and artistic worksincorporated in a cinematograph films or sound recordings shallbe carried out only through a copyright society duly registeredunder this Act:

F

Provided also that a performing rights society functioning inaccordance with the provisions of Section 33 on the dateimmediately before the coming into force of the Copyright(Amendment) Act, 1994 shall be deemed to be a copyright societyfor the purposes of this Chapter and every such society shall getitself registered within a period of one year from the date ofcommencement of the Copyright (Amendment) Act, 1994.

G

(2) Any association of persons which fulfils such conditions asmay be prescribed may apply for permission to do the businessspecified in sub-section (1) to the Registrar of Copyrights whoshall submit the application to the Central Government.

(3) The Central Government may, having regard to the interestsof the authors and other owners of rights under this Act, the interestand convenience of the public and in particular of the groups ofpersons who are most likely to seek licences in respect of therelevant rights and the ability and professional competence of theapplicants, register such association of persons as a copyrightsociety subject to such conditions as may be prescribed:

Provided that the Central Government shall not ordinarily registermore than one copyright society to do business in respect of thesame class of works.

(3-A) The registration granted to a copyright society under sub-section (3) shall be for a period of five years and may be renewedfrom time to time before the end of every five years on a requestin the prescribed form and the Central Government may renewthe registration after considering the report of Registrar ofCopyrights on the working of the copyright society under Section36:

Provided that the renewal of the registration of a copyright societyshall be subject to the continued collective control of the copyrightsociety being shared with the authors of works in their capacityas owners of copyright or of the right to receive royalty:

Provided further that every copyright society already registeredbefore the coming into force of the Copyright (Amendment) Act,2012 shall get itself registered under this Chapter within a periodof one year from the date of commencement of the Copyright(Amendment) Act, 2012.

(4) The Central Government may, if it is satisfied that a copyrightsociety is being managed in a manner detrimental to the interestof the authors and other owners of right concerned, cancel theregistration of such society after such inquiry as may be prescribed.

(5) If the Central Government is of the opinion that in the interestof the authors and other owners of right concerned or for non- A

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A

Acompliance of Section 33-A, sub-section (3) of Section 35 andSection 36 or any change carried out in the instrument by whichthe copyright society is established or incorporated and registeredby the Central Government without prior notice to it, it is necessaryso to do, it may, by order, suspend the registration of such societypending inquiry for such period not exceeding one year as may beBspecified in such order under sub-section (4) and that Governmentshall appoint an administrator to discharge the functions of thecopyright society.

33A. Tariff scheme by copyright societies.— (1) Everycopyright society shall publish its tariff scheme in such manner asCmay be prescribed.

(2) Any person who is aggrieved by the tariff scheme may appealto the Appellate Board and the Board may, if satisfied after holdingsuch inquiry as it may consider necessary, make such orders asmay be required to remove any unreasonable element, anomalyDor inconsistency therein:

Provided that the aggrieved person shall pay to the copyrightsociety any fee as may be prescribed that has fallen due beforemaking an appeal to the Appellate Board and shall continue topay such fee until the appeal is decided, and the Board shall notEissue any order staying the collection of such fee pending disposalof the appeal:

Provided further that the Appellate Board may after hearingthe parties fix an interim tariff and direct the aggrieved parties tomake the payment accordingly pending disposal of the appeal.”

F

56. Equally, Section 39, as substituted by the amending Act of1994, reads as follows:

“39. Acts not infringing broadcast reproduction right orperformer’s right.— No broadcast reproduction right orperformer’s right shall be deemed to be infringed by—

G

(a) the making of any sound recording or visual recording for theprivate use of the person making such recording, or solely forpurposes of bona fide teaching or research; or

(b) the use, consistent with fair dealing, of excerpts of aHperformance or of a broadcast in the reporting of current eventsor for bona fide review, teaching or research; or

(c) such other acts, with any necessary adaptations andmodifications, which do not constitute infringement of copyrightunder Section 52.”

57. The 2012 amendment to the Copyright Act was relied uponand placed with great emphasis by learned counsel appearing on behalfof the appellants. The Statement of Objects and Reasons of thisamendment Act stated as follows :

“The Copyright Act, 1957 was enacted to amend and consolidatethe law relating to copyrights in India. To meet with the nationaland international requirements and to keep the law updated, theAct has been amended five times since then, once each in theyears 1983, 1984, 1992, 1994 and 1999. The 1994 amendmentwas a major one which harmonized the provisions of the Act withthe Rome Convention, 1961 by providing protection to the rightsof performers, producers of phonographs and broadcastingorganizations. It also introduced the concept of registration ofCopyright Societies for collective management of the rights ineach category of copyrighted works. The last amendment in 1999introduced a few minor changes to copy with the obligations underthe Trade Related Aspects of Intellectual Property Rights (TRIPS).

2. The Act is now proposed to be amended with the object ofmaking certain changes for clarity, to remove operationaldifficulties and also to address certain newer issues that haveemerged in the context of digital technologies and the Internet.The two World Intellectual Property Organisation (WIPO) InternetTreaties, namely, WIPO Copyright Treaty (WCT), 1996 andWIPO Performances and Phonograms Treaty (WPPT), 1996have set the international standards in these spheres. The WCTand the WPPT were negotiated in 1996 to address the challengesposed to the protection of Copyrights and Related Rights by digitaltechnology, particularly with regard to the dissemination ofprotected material over digital networks such as the Internet. Themember countries of the WIPO agreed on the utility of having theInternet treaties in the changed global technical scenario andadopted them by consensus. In order to extend protection ofcopyright material in India over digital networks such as internetand other computer networks in respect of literary, dramatic,musical and artistic works, cinematograph films and sound AB

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Arecordings works of performers, it is proposed amend the Act toharmonise with the provisions of the two WIPO Internet Treaties,to the extent considered necessary and desirable. The WCT dealswith the protection for the authors of literary and artistic workssuch as writings, computer programmes; original databases;musical works; audiovisual works; works of fine art andBphotographs. The WPPT protects certain “related rights” whichare the rights of the performers and producers of phonograms.However, India has not yet signed the above-mentioned twotreaties. Moreover, the main object to make amendments to theAct is that it is considered that in the knowledge society in whichCwe live today, it is imperative to encourage creativity for promotionof culture of enterprise and innovation so that creative peoplerealize their potential and it is necessary to keep pace with thechallenges for a fast growing knowledge and modern society.

xxx xxx xxx

D

xxx xxx xxx

D

(xvii) make provision for formulation of a tariff scheme bythe copyright societies subject to scrutiny by the CopyrightBoard.”

58. By this amendment, Section 2(ff) defining “communication tothe public” was replaced as follows:- E

“2(ff) “communication to the public” means making any work orperformance available for being seen or heard or otherwise enjoyedby the public directly or by any means of display or diffusion otherthan by issuing physical copies of it, whether simultaneously or atplaces and times chosen individually, regardless of whether anymember of the public actually sees, hears or otherwise enjoys thework or performance so made available.

F

Explanation: For the purposes of this clause, communicationthrough satellite or cable or any other means of simultaneouscommunication to more than one household or place of residenceincluding residential rooms or any hotel or hostel shall be deemedto be communication to the public.”

G

59. Certain amendments were made to Section 37(3)(e). Section39A was amended to extend the provisions of Sections 33 and 33A toowners of the broadcast reproduction rights as follows:- H

“39A. Other provisions applying to broadcast reproductionright and performer’s right.

(1) Sections 18, 19, 30, 30A, 33, 33A, 34, 35, 36, 53, 55, 58, 63, 64,65, 65A, 65B and 66 shall, with any necessary adaptations andmodifications, apply in relation to the broadcast reproduction rightin any broadcast and the performers’ right in any performance asthey apply in relation to copyright in a work.

xxx xxx xxx”

60. A reading of the aforesaid provisions, according to the learnedSenior Advocates for the appellants, makes it clear that broadcastersmay, in fact, be the owners of the original copyright of a work – forexample, if they themselves have produced a serial. They may also bethe copyright owners of the broadcast of this serial which is a separateright under the Copyright Act which they are able to exploit, and if thereis a re-broadcast of what has already been copyrighted, this again isprotected by Chapter VIII of the Copyright Act. The argument,therefore, is that content that is carried by transmission from thebroadcasters to the ultimate consumer is, therefore, regulated only bythe Copyright Act and any royalties that can be charged for exploitationof the three rights as aforesaid are governed only by the Copyright Act.Further, the right to band themselves into a society is by virtue of Section33, which mutatis mutandis applies to broadcasters alone. The tariff,therefore, that may be charged under Section 33A of the Copyright Actread with Rule 56 of the Copyright Rules is nothing but compensationthat is payable to broadcasters for parting with their copyright in themanner indicated above. This being the case, when TRAI fixes ratesand/or interferes with content, it is trespassing into the exclusive domainset out by Parliament under the Copyright Act. Since the TRAI Actand the Copyright Act, both being Acts passed by Parliament, have to beharmonised, such harmony can only be maintained if TRAI is kept outaltogether from the domain covered by the Copyright Act. Learnedcounsel for the appellants also strongly relied upon the observationscontained in Entertainment Network (India) Ltd. v. Super CassetteIndustries Ltd., (2008) 13 SCC 30, in which this Court explained asunder:

“125. Are the terms “royalty” and “compensation” notsynonymous? “Royalty” means the remuneration paid to an authorin respect of the exploitation of a work, usually referring to payment A

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A

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on a continuing basis (e.g. 10% of the sale price) rather than apayment consisting of a lump sum in consideration of acquisitionof rights. It may also be applied to payment to performers.[See World Copyright Law, (2nd Edn.) by J.A.L. Sterling.]

126. The word “compensation”, however, must have been usedkeeping in view the fact that if it is a statutory grant; it is a case ofstatutory licence. We are not unmindful of the fact in cases ofother statutory licences, the word “royalty” has been used. Eventhe word “usually” has been used. Mr Divan himself has referredto Rule 11-A and Form II-A appended to the Rules of 1958.Clauses (10) and (11) of the form which have validly been madeused the word “royalty”.

“10. Rate of royalty, which the applicant considers reasonable,to be paid to the copyright owner.

11. Means of the applicant for payment of the royalty.”

127. The legislature therefore for all intent and purport equates“compensation” with “royalty”. In the context of the Act, royaltyis a genus and compensation is a species. Where a licence has tobe granted, it has to be for a period. A “compensation” may bepaid by way of annuity. A “compensation” may be held to bepayable on a periodical basis, as apart from the compensation,other terms and conditions can also be imposed. The compensationmust be directed to be paid with certain other terms and conditionswhich may be imposed.”

61. Rule 56 of the Copyright Rules, 2013, also relied upon, is set outhereunder:

“56. Tariff Scheme.— (1) As soon as may be, but in no caselater than three months from the date on which a copyright societyhas become entitled to commence its copyright business, it shallframe a scheme of tariff to be called the “Tariff Scheme” undersection 33A of the Act setting out the nature and quantum ofroyalties which it proposes to collect in respect of the right or theset of rights in the specific categories of works administered by it.

(2) Every copyright society shall display its Tariff Scheme byposting it on its website.

(3) The Tariff Scheme shall indicate the separate rates for- (a) different categories of users; (b) different media of exploitation, such as telephone,broadcast or internet;

(c) different types of exploitation whether by an individual orby groups or whether single or multiple use or for advertising; (d) different durations of use and territory; and (e) any other differentiation factor indicated by the society,as it may deem fit.

(4) While fixing the tariff the copyright society shall follow theguidelines issued by any Court or the Board, if any, and may consultthe user groups.

(5) The copyright society shall collect the royalties from a licenseein advance where the Tariff Scheme provides for lump sumpayment of royalties. In cases where the Tariff Scheme providesfor payments in installments, each installment shall be collected inadvance. However, in cases where the Tariff Scheme providesfor the payment of royalties based on actual use, the copyrightsociety may collect an advance at the time of issue of licence andsettle the final payment based on actual use at the end of theperiod for which the licence is issued or granted.

Provided that the copyright society shall not receive any paymentin the nature of minimum guarantee from a licensee whose royaltypayments are based on actual use which are to be settled with thesociety at the end of the licence period except where, anyexceptional circumstances are specifically included in the TariffScheme and the individual case has been approved by theGoverning Council.

(6) The copyright society may revise the Tariff Schemeperiodically but not earlier than a period of twelve months byfollowing the rules. It shall publish the date of coming into of therevised Tariff Scheme at least before two months in advance andthe same shall be posted on its website.”

62. At this juncture, it is of a little importance to compare andcontrast Section 2(dd) of the Copyright Act with “broadcasting services”as defined in the impugned Regulation and Tariff Order. By Clause 2(j)of the impugned Regulation, “broadcasting services” is defined as follows:

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A“2(j) “broadcasting services” means the dissemination of any formof communication like signs, signals, writing, pictures, images andsounds of all kinds by transmission of electro-magnetic wavesthrough space or through cables intended to be received by thegeneral public either directly or indirectly and all its grammaticalvariations and cognate expressions shall be construed accordingly;”B

63. When the definitions of “broadcast” in Section 2(dd) of theCopyright Act and of “broadcasting services” in Clause 2(j) of theimpugned Regulation are compared, what is clear is that the words“intended to be received by the general public either directly or indirectly”are completely missing from the definition of “broadcast” contained inCthe Copyright Act. Also, Section 52(1)(b) of the Copyright Act indicatesthat transient or incidental storage of a work or performance purely inthe technical process of electronic transmission or communication to thepublic is not an act that would constitute infringement of copyright. Section52(1)(b) reads as follows:D“

“52. Certain acts not to be infringement of copright.- (1)The following acts shall no constitute an infringement of copyright,namely:- xxx xxx xxx E(b) the transient or incidental storage of a work or performancepurely in the technical process of electronic transmission orcommunication to the public;”

64. The picture that, therefore, emerges is that copyright is meantto protect the proprietary interest of the owner, which in the presentcase is a broadcaster, in the “work”, i.e. the original work, its broadcastFand/or its re-broadcast by him. The interest of the end user or consumeris not the focus of the Copyright Act at all. On the other hand, the TRAIAct has to focus on broadcasting services provided by the broadcasterthat impact the ultimate consumer. The focus, therefore, of TRAI isthat of a regulatory authority, which looks to the interest of bothGbroadcaster and subscriber so as to provide a level playing field for bothin which regulations can be laid down which affect the manner andcarriage of broadcast to the ultimate consumers. Once the relative scopeof both the enactments is understood as above, there can be no difficultyin stating that the two Acts operate in different fields. We do not find ona reading of the impugned Regulation as well as the Tariff Order madeH

that TRAI has transgressed into copyright land. This is for the reason,as has been stated hereinabove, that regulations which allegedly impactpackaging TV channels, pricing of TV channels and the broadcaster’sright to arrange his business as he pleases, all have to be viewed withthe lens of a regulatory authority, which is to provide a level playing fieldbetween broadcaster and subscriber. We have also noted how thebroadcaster is free to provide whatever content he chooses for the TVchannels that he chooses to transmit to the ultimate consumer. We havealso noted how the broadcaster is free to arrange pricing of his TVchannels so long as they are non-discriminatory and do not otherwisehave the effect of unreasonably restricting the choice of a subscriber tochoose bouquet or a-la-carte channels as has been held hereinabove.We are satisfied that the impugned Regulation and Tariff Order havebeen passed by a regulatory authority after applying its mind to theobjections of the various stakeholders involved after which the Regulationand Tariff Order have been laid down which have, by and large, beeninitially acceded to by the broadcasters themselves. In this view of thematter, we are of the view that the Copyright Act will operate within itsown sphere, the broadcaster being given full flexibility to either individuallyor in the form of a society charge royalty or compensation for the threekinds of copyright mentioned hereinabove. TRAI, while exercising itsregulatory functions under the TRAI Act, does not at all, in substance,impinge upon any of these rights, but merely acts, as has been statedhereinabove, as a regulator, in the public interest, of broadcasting servicesprovided by broadcasters and availed of by the ultimate consumer.

65. As Dr. Singhvi has repeatedly stressed that fixation of ratesunder Section 11(2) would directly impinge upon compensation payablefor copyright to the broadcasters, it is important to note that both theCopyright Act as well as the TRAI Act are central enactments whichdo not expressly provide that the one overrides the other. In this situation,a basic principle of interpretation of statutes is that both Acts beharmonized in the event of any clash/conflict between the two so thatboth may be given effect to. In fact, Section 38 of the TRAI Act readsas under:- “38. Application of certain laws. – The provisions of this Actshall be in addition to the provisions of the Indian Telegraph Act,1885 (13 of 1885) and the Indian Wireless Telegraphy Act, 1933(17 of 1933) and, in particular, nothing in this Act shall affect any AB

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Ajurisdiction, powers and functions required to be exercised orperformed by the Telegraph Authority in relation to any area fallingwithin the jurisdiction of such Authority.”

66. Since the Telegraph Authority, acting under the Telegraph Actand the Indian Wireless Telegraphy Act, is required to act in public interest,Bthe jurisdiction of the said Authority is left untrammeled by the provisionsof the TRAI Act. It can thus be seen that TRAI and the TelegraphAuthority both act in public interest. The TRAI Act, the Telegraph Actand the Indian Wireless Telegraphy Act, being statutes in pari materia,form a Code, insofar as wireless telegraphy and broadcasting isconcerned.

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67. We are, therefore, clearly of the view that if in exercise of itsregulatory power under the TRAI Act, TRAI were to impinge uponcompensation payable for copyright, the best way in which both statutescan be harmonized is to state that, the TRAI Act, being a statute conceivedin public interest, which is to serve the interest of both broadcasters andDconsumers, must prevail, to the extent of any inconsistency, over theCopyright Act which is an Act which protects the property rights ofbroadcasters. We are, therefore, of the view that, to the extent royalties/compensation payable to the broadcasters under the Copyright Act areregulated in public interest by TRAI under the TRAI Act, the formerEshall give way to the latter. As there is no merit in these appeals, thesame are, therefore, dismissed.

Devika Gujral

Appeals dismissed.

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