Bombay High Court Star Judgment

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 9175 OF 2018
Star India Private Limited ]
a company incorporated under the Companies ]
Act, 1956 and having its Registered Ofce at ]
Star House, Urmi Estate, 95, Ganpatrao Kadam ]
Marg, Lower Parel, Mumbai 400 013. ] … Petitioner
Versus
1) Competition Commission of India, ]
represented by its Secretary, 18-20, The ]
Hindustan Times House, Kasturba Gandhi ]
Marg, New Delhi – 110 001. ]
2] Noida Software Technology Park Ltd. ]
Scindia Villa, Sarojini Nagar Ring Road, ]
New Delhi – 110 023, through counsel ]
Juris Corp, 12th Floor, Express Towers, ]
Ramnath Goenka Marg, Nariman Point, ]
Mumbai 400 021. ]
hitesh.jain@jclex.com ]
3] Sony Pictures Network India Pvt. Ltd., ]
3rd Floor, Interface Blg. No.7, Of Malad ]
Link Road, Malad (W), Mumbai - 400 064. ]
4] Indian Broadcasting Foundation (IBF), ]
B-304, Ansal Plaza, Third Floor, Khelgaon ]
Marg, New Delhi – 110 049. ] … Respondents
WITH
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WRIT PETITION NO. 10110 OF 2018

Sony Pictures Network India Private Limited ]
a Company incorporated under Companies Act, ]
1956 with its registered ofce at 4th Floor, ]
Interface, Building No.7, Malad Link Road, ]
Mumbai – 400 064. ]… Petitioner
Versus
1) Competition Commission of India, ]
The Hindustan Times House, 18-20, ]
Kasturba Gandhi Marg, New Delhi–110001. ]
2] Noida Software Technology Private Ltd., ]
a Company incorporated under Companies ]
Act, 1956 with its registered ofce at Scindia ]
Villa, Sarojini Nagar, New Delhi – 110 023. ]
3] Star India Private Limited, ]
a Company incorporated under the ]
Companies Act, 1956 with its registered ]
ofce at Star, Of Old Padra Road, Baroda, ]
Gujarat – 390 020. ]… Respondents
Mr. D. J. Khambata, Senior Advocate alongwith Mr.Gautam Ankhad, Mr. Rohan

Rajyadhyashya, Mr. Kunal Dwarkadas, Mr. S.Kadam, Mr. S. Rajpurkar, Mr. S.
Singhania, Mr.R.Sidhu, Mr. Dhawan for the Petitioner in WP/9175/2018.
Mr. S.K. Cooper, Senior Advocate alongwith Mr.Karthik Somasundram, Ms Kirti

Srivastava, Mr. Anand Pathak, Mr. Vijay Purohit and Mr. Avinash Amarnath
instructed by Bharucha & Partners for the Petitioner in WP 10110/2018 and for
Respondent No.3 in WP 9175/2018.
Mr. Somsekhar Sundaresan alongwith Mr. Venkat Raman, Mr.Abhishek, Ms.

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Yugandhar Khanvilkar instructed by Ms. Priyanka Vegad for Respondent No. 1 in both
Petitions.
Mr. Zal Andhyarujina alongwith Mr. Asif Ahmed, Mr. Jahaan Dastur, Mr. Kaushal
Sharma and Ms. Devanshi Sethi instructed by Parinam Law Associates for
Respondent No 2 in both Petitions.
…......
CORAM : AKIL KURESHI AND

S.J. KATHAWALLA, JJ.
RESERVED ON : 28th AUGUST 2019.
PRONOUNCED ON : 16th OCTOBER, 2019
INDEX:
Sr. Particulars Page

No. Nos.
1. Challenge in the Writ Petitions 3-4
2. Facts 4-14
3. Submissions by Star India Private Limited 14-17
4. Submissions by Sony Pictures Network India Private Ltd 18-19
5. Submissions by the Competition Commission of India 19-26
6. Submissions by Noida Software Technology Park Limited 26-27
7. The Supreme Court’s decision in Competition Commission of India 27-38
vs. Bharti Airtel Ltd. & Ors., [(2019) 2 SCC 521]
8. Reasons and Findings 38-77
9. Conclusion 77
JUDGMENT (Per S.J. Kathawalla, J.) :
1. These Writ Petitions impugn an Order dated 27th July, 2018 (“Impugned
Order”) passed by Respondent No.1/Competition Commission of India (“CCI”).
By the Impugned Order, CCI has exercised its powers under Section 26(1) of the

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Competition Act, 2002 (“Competition Act”) and directed an investigation to be
conducted against the Petitioners herein viz. Star India Private Limited (“Star”) and
Sony Pictures Network India Private Ltd. (“Sony”) on the basis of a
Complaint/Information fled by Noida Software Technology Park Limited
(“NSTPL”).
2. Below, we proceed to capture the factual conspectus of the matter, the
applicable law, judicial pronouncements and after considering the parties’
submissions, ascertain whether the Impugned Order should be sustained or quashed.
FACTS :
3. Prior to the dealing with the respective arguments canvassed by the parties, it
would be necessary to set-out the following :
3.1 On 10th December, 2004, the Telecom Regulatory Authority of India ("TRAI")
notifed the Telecommunications (Broadcasting and Cable Services) Interconnection
Regulations, 2004 ("2004 Regulations"). The 2004 Regulations inter alia covered
arrangements amongst broadcasters such as the Petitioners and distributors of TV
channels such as NSTPL.
3.2 On 1st October, 2013, NSTPL entered into an interconnect agreement with one
Media Pro Enterprises India Private Limited ("Media Pro") a content aggregator for
Star to of-take bouquets on the basis of the rates specifed in Media Pro's Reference
Interconnect Ofer ("RIO") for a period between 1st October, 2013 to 30th September,

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2014 (“Star RIO No.1”). According to NSTPL, it entered into Star RIO No.1 under
protest.
3.3 Similarly, on 31st October, 2013, NSTPL entered into an interconnect
agreement with one MSM Discovery Private Limited ("MSM") a content aggregator
for Sony to of-take bouquets on the basis of the rates specifed in MSM's RIO for a
period between 1st October, 2013 to 30th September, 2014 (“Sony RIO No.1”).
According to NSTPL, it entered into Sony RIO No.1 also under protest.
3.4 On 11th January, 2014, RIO No.1 was amended to permit NSTPL to take certain
TV channels from Media Pro on an a-la-carte basis.
3.5 On 10th February, 2014, whilst the 2004 Regulations continued to operate,
TRAI published new regulations which prohibited content aggregators like Media Pro
and MSM from distributing TV channels of multiple broadcasters by bundling them
together and prescribed 9th August, 2014 as the cut-of date for transition.
3.6 Media Pro ceased to operate and exist with efect from 1 st April, 2014 and MSM
also ceased to operate in view of certain alterations in the 2004 Regulations.
3.7 On 10th July, 2014 NSTPL fled Petition No. 295(C) / 2014 before the Telecom
Disputes Settlement and Appellate Tribunal (“TDSAT”) against Media Pro and
TRAI (“First TDSAT Petition”). One specifc grievance of NSTPL was that a
Head-end In The Sky (“HITS”) distributor such as NSTPL can be said to be similar
to Direct To Home ("DTH") operators and pan-India Multi-System Operators

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("MSO") and that therefore, HITS operators should not be ofered rates/prices or
discounts that are less favorable than those ofered by Media Pro to MSOs and DTH
operators. It was NSTPL’s case that Star RIO No.1 was entered into in violation of the
2004 Regulations. In the First TDSAT Petition, NSTPL sought the following reliefs:
"(a) Declare that Regulation 3.2 of the 2004 Interconnection Regulations

mandates that all distributors be ofered the same rate per subscriber per
month, which is the rate specifed in the Broadcaster 's RIO, unless the
conditions of Regulation 3.6 are fulflledd
(b) Declare that in terms of Regulation 3.6 of the 2004 Interconnection
Regulations, any discounted volume related scheme must be disclosed in a
transparent manner so as to enable all similarly placed distributors to avail of
the samed
(c) Direct the Respondent Nos. 1,3 & 4 Companies to disclose the Volume
Related Schemes at which they have ofered their TV Channel
Signals/Content to distributors that are similarly placed with the Petitioner
Company hereind
(d) Consequently, direct the Respondent Nos. 1, 3 & 4 Companies to refund
to the petitioner company any amounts it has paid under the respective
Interconnection Agreements, in excess of the prices being ofered by the said
companies to distributors that are similarly placed with the Petitioner
Company hereind
(e) Direct that the Respondents Nos. 3 and 4 Companies have an obligation
to disclose the existing and future volume related schemes to the Petitioner
Company herein and further direct that the Petitioner Company may avail of
the same if desiredd
xxx "

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3.8 On 1st August, 2014, NSTPL entered into an agreement with Star on the basis
of Star’s RIO for a period between 1 st August, 2014 to 30th June, 2015 (“Star RIO
No.2”).
3.9 On 25th November, 2014, NSTPL entered into another RIO with Sony (“Sony
RIO No.2”). NSTPL once again contends that this RIO was also entered into by it
under protest.
3.10 On 17th December, 2014, NSTPL amended the First TDSAT Petition to add
Star and Taj Television Private Limited as Respondents therein. In its amendments,
NSTPL raised grievances in respect of Star RIO No.2 in addition to its previous
grievances against Star RIO No.1.
3.11 On 1st May, 2015, NSTPL entered into a further RIO with M/s. Multi Screen
Media Private Limited (“Sony RIO No.3”).
3.12 Between 18th and 19th June, 2015, Star issued Disconnection Notices to NSTPL
for non-payment of Rs.1,69,57,400/- (“Disconnection Notices”).
3.13 On 31st August, 2016, Sony discontinued providing signals to NSTPL due to
NSTPL’s failure to repay Sony’s outstanding dues amounting to Rs.2,42,00,000/-
(“Sony Disconnection Notices”).
3.14 Aggrieved by the Disconnection Notices, on 9th July, 2015 NSTPL fled a
Petition being Petition No.314(C) of 2015 before the TDSAT (“Second TDSAT
Petition”). In the Second TDSAT Petition, NSTPL sought the following reliefs:

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"a) Declare the notice dated 18.06.2015 purportedly issued by the Respondent
No.1 Company under Clause 4.1 of the Telecommunication (Broadcasting and
Cable Services) Interconnection Regulations, 2004 as well as the purported
public notice dated 19.06.2015 issued under clause 4.3 of the Tele
communication (Broadcasting and Cable Services) Interconnection
Regulations, 2004 as illegal and null and voidd
b) Declare that the outstanding amount to the tune of Rs. 1.69 crores, raised
on the Petitioner Company vide Notice dated 18.06.2015 is illegal and must
include deductions based on 27.5% hike in a-la-carte rates struck down by this
Hon'ble Appellate Tribunal vide its decision dated 28.04.2015 in Appeal No. 1
(C)/2014d TDS amountsd and the incentives under the Respondent No. 1
Company's RIO that are applicable to the Petitioner Companyd
c) Direct the Respondent No.1 Company to continue the uninterrupted
supply of its TV Channel signals to the Petitioner Company and also to
reconcile accounts with the Petitioner Companyd
d) Direct the Respondent No. 1 Company to enter into fresh non-
discriminatory Interconnection Agreements with the Petitioner Company herein
based on the commitments provided in the letter issued by the Indian
Broadcasting Foundation dated 09.06.2015d
xxx "
3.15 On 9th July, 2015, TDSAT admitted the Second TDSAT Petition. Interim relief
was granted to NSTPL restraining Star from giving efect to the Disconnection
Notices provided NSTPL made an on-account payment of Rs.1,00,00,000/- within a
month.
3.16 In view of the fact that the questions arisen in the First TDSAT Petition were

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likely to afect the broadcasting sector as a whole, on 30 th July, 2015, TDSAT
permitted all concerned stakeholders to intervene in the First TDSAT Petition.
3.17 On 7th August, 2015, TDSAT directed that the Second TDSAT Petition would
be decided after the disposal of the First TDSAT Petition. Parties have completed
pleadings and have fled their respective Afdavit(s) of Evidence in the Second
TDSAT Petition. The Second TDSAT Petition is pending as on date.
3.18 On 7th December, 2015, TDSAT passed an Order and Judgment in the First
TDSAT Petition (“7th December, 2015 Order”). Amongst various other fndings and
directions, TDSAT directed all broadcasters to publish new RIOs in terms of the
TRAI Regulations as interpreted by the TDSAT.
3.19 The 7th December, 2015 Order was unsuccessfully challenged by Star before the
Delhi High Court and thereafter before the Supreme Court. Both challenges by Star
failed.
3.20 Given the passage of time and given the fact that Star continued to supply
signals of channels to NSTPL, NSTPL’s unpaid dues accumulated to
Rs.1,69,00,000/-.
3.21 On 18th December, 2015, TDSAT directed NSTPL to pay star
Rs.1,69,00,000/- on or before 31 st January, 2016, failing which, Star would be at liberty
to disconnect the signals of its channels.
3.22 On 29th January, 2016, TDSAT allowed an application fled by NSTPL in the

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Second TDSAT Petition seeking an extension of one month to make the payment of
Rs.1,69,00,000/- subject to 12% interest on the amounts.
3.23 On 1st April, 2016, Star disconnected its signals to NSTPL as NSTPL failed to
comply with TDSAT’s orders dated 18th December, 2015 and 29th January, 2016.
3.24 Pursuant to the 7th December, 2015 Order, Star issued a fresh RIO on 4 th May,
2016 (“Star RIO No.3”) and Sony issued a fresh RIO on 5th May, 2016 (“Sony RIO
No.4”).
3.25 On 27th May, 2016, NSTPL fled a Contempt Application in the First TDSAT
Petition alleging that Star RIO No.3 was not in compliance with the directives of the
7th December, 2015 Order (“Contempt Application”).
3.26 On 30th August, 2016 Star fled Execution Petitions seeking payment of
Rs.1,69,00,000/- by NSTPL in terms of TDSAT Orders dated 18 th December, 2015
and 29th January, 2016 (“Execution Petitions”).
3.27 On 31st August, 2016, Sony disconnected its signals to NSTPL as NSTPL failed
to repay its outstanding dues of Rs.2,42,00,000/-.
3.28 On 6th February, 2017, Sony approached TDSAT by fling Broadcasting Petition
No.33 of 2017 seeking to recover the dues payable by NSTPL to the Petitioner
(“Third TDSAT Petition”). The Third TDSAT Petition is pending as on date.
3.29 On 1st May, 2017, TDSAT directed NSTPL to pay Sony Rs.60,00,000/- from
Sony’s total outstanding.

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3.30 NSTPL failed to repay this outstanding. Sony initiated proceedings under
Section 138 of the Negotiable Instruments Act 1881 against NSTPL which
proceedings are pending as on date.
3.31 On 7th June, 2017, NSTPL fled an Information against Star, Sony and the
Indian Broadcasting Federation (“IBF”) with CCI under Section 19 (1) of the
Competition Act alleging that Star and Sony have adopted anti-competitive market
practices, owing to their strategic position in the broadcasting sector/market by
imposing unfair terms and limiting their services to less favored Distribution Platform
Operators such as NSTPL in clear violation of Section 3 and 4 of the Competition Act
(“Information”):
3.32 On 21st July, 2018, Sony fled a Contempt Application before TDSAT in view of
NSTPL’s failure to comply with TDSAT’s order dated 1st May, 2017.
3.33 On 24th July, 2018, TDSAT permitted NSTPL to comply with its order dated 1 st
May, 2017 on the condition that an additional amount of Rs.1,00,000/- shall be paid
by NSTPL to Sony.
3.34 On 10th August, 2017, TDSAT dismissed the Contempt Application fled by
NSTPL as also the Execution Applications fled by Star by inter alia holding:
“Having considered the entire materials in the light of aforesaid rival stands
and having gone through the three orders relied upon by the petitioner and also
subsequent orders dated 09.02.2016 and 16.02.2016 in MA Nos. 34 and 36 of
2016 in the pending broadcasting petitions relied upon by the respondent, it is

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evident that the orders on which petitioners are relying to claim a decree for
execution were orders passed by way of interim arrangement and that
Broadcasting Petition No. 526 of 2014 as well as Broadcasting Petition Nos.
313 and 314 of 2015 preferred by the respondent herein were noticed therein
and it was observed that they would be decided on their own merits and if need
be, after taking evidences from both sides. Hence, we fnd merit in the
submissions advanced on behalf of respondent herein that the petitioner, Star
India Pvt. Ltd. cannot claim any decree in its favour at this stage because the
controversy relating to accounts is still pending before this Tribunal and there
is no fnal adjudication on the relevant issues between the parties.
xxx
both E.A. No.10 of 2016 (in B.P. No. 295 of 2014) and E.A. No. 11 of 2016
(in B.P. No.314 of 2015) are dismissed as pre-mature and therefore, not
maintainable. However, there shall be no order as to costs.”
3.35 On 16th November, 2017, NSTPL withdrew Petition No.526 of 2014 against Taj
since Taj abandoned/gave up its claims against NSTPL.
3.36 On 21st November, 2017, TDSAT passed the following order in the Second
TDSAT Petition:
“2...By a detailed order dated 10.08.2017, this Tribunal held against the
petitioner that no contempt was made out and also held against M/s Star
India Pvt. Ltd, that the execution applications were pre-matured because the
controversy relating to accounts is still pending before this Tribunal and there
is no fnal adjudication on the relevant issues between the parties. This
Tribunal observed that the orders on which Star India is relying to claim
execution "were orders passed by way of interim arrangement and that

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Broadcasting Petition No.526 of 2014 as well as Broadcasting Petition

Nos.313 and 314 of 2015 preferred by the respondent herein (reference
petitioner herein) were noticed therein and it was observed that they would be
decided on their own merits and if need be, after taking evidence from both
sides
4. In the aforesaid facts and circumstances, it has fallen for decision whether
anything survives in this petition for adjudication. It is clarifed that on
24.08.2017, as is apparent from the order passed on that date, our attention
was drawn to observations in an earlier order dated 08.04.2016 that required
a consideration of the issue whether anything survived for adjudication in B.P.
Nos.313 and 314 of 2015. The observation was in the light of fnal judgment of
this Tribunal in B.P No.295/2014 which was disposed of by a detailed
judgment on 07.12.2015. Accordingly, parties have been heard on this issue
xxx
7. On behalf of petitioner, a simple stand is taken that petitioner has also
sought a declaration that the demand is illegal and there is a need for
reconciliation of accounts and clearly these reliefs cannot become infructuous
unless respondent No. 1 agrees to give up its claim over the alleged outstanding
against the petitioner. In reply, the respondents refused to give up their right to
claim money from the petitioner on account of arrears of dues.
xxx
8. In our considered view, in the aforesaid circumstances, it would not be

proper to dismiss the petition as infructuous The issue relating to
reconciliation of accounts and also legality and validity of the demand raised
by the respondent remains to be adjudicated Hence, the prayer made on behalf
of respondent to dismiss the petition on the ground that no cause of action

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survives has to be rejected. We order accordingly.”
3.37 On 27th July, 2018 and 31st July, 2018, CCI passed two orders exercising powers
under Section 26(1) of the Competition Act inter alia directing the Director General to
initiate and conduct an investigation to ascertain whether or not Star, Sony and IBF
have indulged in refusal to deal by way of discrimination with NSTPL in contravention
of the provisions of Section 3(4) of the Competition Act (“Impugned Order”).
3.38 Aggrieved by the Impugned Order, Star fled the present Petition on 13 th
August, 2018 and Sony fled its Writ Petition on 1st September, 2018.
3.39 On 16th August, 2018, this Court granted ad-interim relief restraining CCI from
taking any coercive steps against Star and Sony in pursuance of the Impugned Order.
4. The aforesaid is the factual conspectus leading to the fling of the present Writ
Petitions.
5. We now proceed to record the submissions canvassed by both parties.
SUBMISSIONS BY STAR INDIA PRIVATE LIMITED :
6. Appearing for Star, Learned Senior Advocate Mr. D. J. Khambata submitted
that the Impugned Order has been passed without jurisdiction. In this respect, he
submitted that as per the ratio laid down by the Supreme Court in Competition
Commission of India vs. Bharti Airtel Ltd. & Ors. 1 (“CCI vs. Bharti Airtel”), CCI could
1 (2019) 2 SCC 521

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only have exercised jurisdiction if and when TRAI and/or the TDSAT had come to a
fnding that parties have indulged in anti-competitive practices. According to Mr.
Khambata, the decision in CCI vs. Bharti Airtel considered in-personam disputes. It
was his argument that in the Second TDSAT Petition, NSTPL has made various in-
personam specifc allegations against Star which remain to be decided. He submitted
that CCI has disregarded the fact that the issue of price discrimination by Star in the
supply of television channels to NSTPL has not been fnally decided by
TRAI/TDSAT. On the contrary, this very issue is pending adjudication before the
TDSAT in the Second TDSAT Petition. In so far as the 7 th December, 2015 Order is
concerned, he submitted that the said order was passed on a summary basis without
conducting a trial or considering any evidence. It was an order dealing with issues
holistically. It did not fnally decide the allegations raised by NSTPL against Star.
Hence, the allegations of price discrimination, non-disclosure of discounted schemes/
incentive schemes and anti-competitive conduct qua NSTPL by Star remained
undecided as on date. He supplemented his argument by submitting that TDSAT has
itself held that the issue of the legality and validity of the demand raised by Star has
not been fnally decided. He thereafter submitted that NSTPL has admitted in Writ
Petition No.12319 of 2019 fled by it that the Second TDSAT Petition is pending
adjudication and that the issue of discrimination by Star in providing incentives has
not been fnally adjudicated. He then submitted that the issues raised in the Second

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TDSAT Petition are jurisdictional facts which only TRAI/TDSAT as expert
regulatory bodies are equipped to decide. The existence of a jurisdictional fact is a sine
qua non for the exercise of power. In this context, reliance was placed by him on S.K.
Maini vs. Carona Sahu & Ors. 2, Arun Kumar & Ors. vs. Union of India & Ors 3.
Therefore, according to him, absent a fnding by TRAI/TDSAT that Star has in fact
engaged in any price discrimination and/or non-disclosure of discounted schemes /
incentive schemes and/or anti-competitive conduct qua NSTPL, the necessary
jurisdictional fact for exercise of powers under the Competition Act is lacking. Mr.
Khambata also submitted that CCI must form a prima facie view with some reasons
prior to passing an order under Section 26(1) of the Competition Act. This
requirement, according to him, is also a sine qua non for the exercise of power. In this
context, he placed reliance on Competition Commission of India vs. Steel Authority of
India4, Cadila Healthcare Limited & Anr. vs. Competition Commission of India 5, Grasim
Industries Ltd. vs. Competition Commission of India 6, Google Inc. & Ors. vs. Competition
Commission of India & Anr.7, Telefonaktibolaget Ericsson vs. Competition Commission of
India & Anr8. He submitted that a similar provision exists under Section 231 of the
Companies Act, 2013 which provision has also been interpreted to be exercised only
2 (1994) 3 SC 510
3 (2007) 1 SCC 732]
4 (2010) 10 SCC 744
5 (2010) 10 SCC OnLine Del 11229
6 Writ Petition (C) No.7842 of 2017
7 LPA No.733 of 2014
8 2016 SCC OnLine Del 1951

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after an opinion has been formed. In this respect, he placed reliance on Barium
Chemical Ltd. vs. Company Law Board9 and Bhikhubhai Patel vs. State of Gujarat10. He
then submitted that CCI has not satisfed the ingredients of Section 3(4) of the
Competition Act. According to him, in the present case, CCI would necessarily have
to render a prima facie fnding of (i) the existence of an agreement refusing to deal; and
(ii) that the agreement causes/is likely to cause appreciable adverse efect on
competition (“AAEC”). According to him, there is no prima facie view by CCI on
these 2 critical ingredients. Hence, the mandatory jurisdictional pre-requisite of a
prima facie view is absent. Mr. Khambata also submitted that in order for CCI to have
arrived at a prima facie view of a contravention of Section 3(4) of the Competition Act
and direct the Director General to investigate the practices of Star, the CCI ought to
have undertaken an analysis in terms of factors listed under Section 19(3) of the
Competition Act. In the absence of any such exercise, Star could not prima facie be
found to have contravened Section 3(4) read with Section 3(1) of the Competition Act.
Mr. Khambata lastly submitted that an order directing the Director General to
investigate is far reaching, conclusive and will stain Star with a stigma. In support of
this submission, he placed reliance on Google Inc. & Ors. vs. Competition Commission of
India & Anr. (supra), Telefonaktibolaget Ericsson vs. Competition Commission of India &
Anr.11, Rohtas Industries Ltd. vs. S.D. Agarwal 12. Mr. Khambata therefore concluded
9 AIR 1967 SC 295
10 (2008) 4 SCC 144
11 2016 SCC OnLine Del 1951
12 (1969) 1 SCC 325

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that CCI, while carrying on a prima facie assessment, has failed to fulfl the
jurisdiction pre-requisites laid down under the Competition Act and therefore, the
Impugned Order be quashed by this Court.
SUBMISSIONS BY SONY PICTURES NETWORK INDIA PRIVATE
LIMITED :
7. Appearing for Sony, Learned Senior Advocate Mr. S.K. Cooper submitted that
until TDSAT holds that the RIO(s) were in breach of the Interconnection Regulations
and/or discriminatory, there can be no question of CCI exercising jurisdiction under
the Competition Act. In support of his submission on jurisdiction, he placed reliance
on CCI vs. Bharti Airtel. He submitted that the jurisdictional basis for passing the
Impugned Order is lacking. Mr. Cooper then submitted that the Impugned Order
seeks to apply the provisions of Section 3(4)(d) of the Competition Act without stating
the basis i.e. the agreement on which such violation is alleged to have occurred. He
further submitted that there is no expression of opinion or basis for such expression
provided in the Impugned Order that there has been an appreciable adverse efect on
competition. He also submitted that the Impugned Order completely ignores the false
statements and suppression indulged in by NSTPL which would clearly show that the
Information is merely an attempt to wriggle out of NSTPL’s defaults. Mr. Cooper
then submitted that the Impugned Order sufers from non-application of mind.
According to him, CCI has failed to consider or deal with either the law or the facts

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which were on record before it. According to Mr. Cooper, the TDSAT has not
adjudicated as to whether Sony’s RIO was discriminatory or not. Mr. Cooper
therefore concluded that the Impugned Order ought to be quashed by this Court.
8. The aforesaid submissions broadly suggest that the Petitioners herein mainly
contend (i) that the Supreme Court’s decision in CCI vs. Bharti Airtel prevented CCI
from passing the Impugned Order as the in personam and inter-party disputes were not
adjudicated under the TRAI Act; and (ii) CCI has failed to arrive at a prima facie
fnding as to the existence of an agreement refusing to deal and that such agreement
causes/is likely to cause AAEC in India.
SUBMISSIONS BY THE COMPETITION COMMISSION OF INDIA :
9. As opposed to the aforesaid arguments, we have heard Mr. S. Sundaresan
appearing for the Competition Commission of India. His submissions can be
summarised as under:
9.1 Firstly, Mr. Sundaresan submitted that the decision in CCI vs. Bharti Airtel did
not lay down the standard as has been canvassed by the Petitioners as a matter of law.
According to him, it is not at all the standard, that in personam fndings after trial of
inter-personal disputes should frst be rendered for the CCI to even begin its
investigations.
9.2 Secondly, he submitted that in the facts of this case, the telecom regulatory

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system has efectively and conclusively ruled that there is anti-competitive behaviour
in the relevant market vide the 7 th December, 2015 Order. According to him, TDSAT
has conclusively found that the RIO(s) were fraught with anti-competitive conduct.
TRAI’s view that there was indeed violative conduct in the market, was well recorded.
9.3 Thirdly he submitted that the 7th December, 2015 Order caused such serious
grievance that a writ petition was preferred by Star before the Delhi High Court. The
challenge was, inter alia, based on the ground that TDSAT exceeded its jurisdiction.
However, not only did the Delhi High Court refuse to entertain the writ, the Supreme
Court also dismissed the appeal and upheld the 7 th December, 2015 Order. Thereby,
the clear and explicit fnding of anti-competitive conduct came to be fnally upheld.
According to him, Section 3(4) deals with, among others, two forms of abuses that
appear to exist in the facts of the case viz. "tie-in arrangement" and "refusal to deal".
The existence of these two abuses in the facts of the case, is writ large on the face of
the Order dated 7th December , 2015, which came to be upheld even by the Supreme
Court. CCI has, by applying the ratio in CCI vs. Bharti Airtel, sought to investigate the
same in discharge of its duty under Section 18 of the Competition Act, applying the
due process enshrined in Section 26, read with Section 19, read with the CCI
(General) Regulations, 2009 ("General Regulations"). He submitted that Section
3(4) entails interdiction of agreements among enterprises or persons at diferent stages
of supply of services, if such agreement causes or is likely to cause an AAEC on

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arrangement or a refusal to deal causes or is likely to cause AAEC. Both "tie-in
arrangements" and "refusal to deal" are defned in an inclusive manner in the
Explanation to Section 3(4). Illustrative types of such arrangements are spelt out in the
legislation. The term "agreement" itself is defned in Section 2(b) and is also an
inclusive one, bringing within its sweep, inter alia, any arrangement or understanding
or action regardless of whether such arrangement, understanding or action is formal or
in writing. The record discloses that the "RIO" is the agreement terms proposed by
broadcasters in the market for television channels in the genre of sports and
entertainment. The understanding of the broadcasters in providing their signals in this
market is that they would violate the obligation stipulated under the telecom
regulatory framework viz., providing the same on an "a la carte" basis i.e. on such basis
that any purchaser of the signals can acquire the signals in an itemized manner for the
channels he desires. Such fnding, in the 7 th December, 2015 Order, is being incorrectly
sought to be dismissed as a "generic" fnding. He further submitted that Section 3(4)
would result in a cause of action under the Competition Act only if the types of
agreements referred to, cause AAEC. Therefore, CCI has taken care to examine
whether the size and scale of the operations of the Petitioners is likely to cause AAEC.
Towards this end, the Impugned Order, between Paragraphs 48 and 55 has taken pains
to show the scale of market power wielded by the Petitioners. In order to do so
objectively, CCI has adopted the indicia and ingredients that are statutorily stipulated

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and available in the Competition Act itself, and only towards this end, looked at
criteria that are also contained in Section 19(4). Such objective and transparent
approach has been assailed by counsel for the Petitioners as evidence of wrong
provisions being applied. The criteria applied by CCI are also criteria for consideration
of whether there is abuse of dominance in a manner that would violate Section 4.
Merely because some of these criteria are also those stipulated for determination of
abuse of dominance under Section 4, it would not follow that the criteria are irrelevant
for determination of market power for assessing AAEC under Section 3(4). CCI has
taken care to ensure that the freedom of enterprise for enterprises that do not have
market power is not interfered with. Applying objective criteria, the Impugned Order
explains in detail how the Petitioners have tremendous market power for their actions,
and their understanding of how their customers must transact with them, to result in
violation of Section 3(4), indeed on a prima facie basis.
9.4 Fourthly, he submitted that such conclusive fndings in the 7 th December, 2015
Order has been noticed in the Impugned Order, and forms, amongst others a prima
facie rationale, the basis of investigations ordered in the Impugned Order. The
Impugned Order also records that the order of this Court in the case of Vodafone
(which, in appeal, led to CCI vs. Bharti Airtel), canvassed by the Petitioners, indeed
ruled that the telecom regulatory system needs to clarify the regulatory position. In the
instant case, at the time the Impugned Order was passed, the confrmation of violative

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conduct was far frmer than a mere clarifcation.
9.5 Fifthly, he submitted that even the TDSAT, sitting in a successor bench, has
clearly and frmly pointed out that the "fnal" decision on issues had been taken in the
7th December, 2015 Order. While the 7th December, 2015 Order is the judgement that
framed the relevant issues and conclusively answered them, subsequent proceedings
before the TDSAT involved in personam disputes between the parties, and are of no
relevance for the issues that need to be determined for purposes of discharging the
mandate under the Competition Act.
9.6 Sixthly, he submitted that the strong and repeated emphasis by the Petitioners
on the conduct of the NSTPL is irrelevant for purposes of the investigation under the
Competition Act. According to him, NSTPL is merely an informant, and has no
relevant role to play in the investigations. CCI may conclude that there is no violation
or it may conclude that there is indeed a violation as originally suspected, that there is
a violation of a nature diferent from what was originally a statutory exercise. The
Competition Act and the Regulations made thereunder provide for a very intense,
elaborate and detailed checks and balances against any arbitrary conduct in the course
of investigation.
9.7 Seventhly, he submitted that in the teeth of such checks and balances, the
Petitions seek to simply stultify the statutory role of CCI by impugning administrative
decisions to investigate. In this context, he placed reliance on the Supreme Court’s

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decision in CCI vs. Steel Authority of India ( supra) (“SAIL”) which ruled that the
decision to investigate is a prima facie view taken in an administrative capacity. He
placed further reliance on decisions of the Delhi High Court and this Court to
demonstrate that there has been reluctance to entertain writs against mere decisions to
investigate.
9.8 Eighthly, he submitted that the Petitioners have simplistically characterized the
conclusive 7th December, 2015 Order as a "general" order that does not conclude
allegations between NSTPL and the Petitioners. Disputes between NSTPL and the
Petitioners are disputes in-personam whereas anti-competitive conduct and market
abuse, are matters in-rem, which indeed have been conclusively determined by the
TDSAT. The legal standard laid down in CCI vs. Bharti Airtel is not that every
"general" inter-personal dispute between a complainant and an alleged market abuser
must be conclusively determined by the sectoral regulator. This is not a condition
precedent for the CCI to even start exercising its jurisdiction. On the contrary, such an
argument was exhaustively repelled in CCI vs. Bharti Airtel, and in the facts and
circumstances of that case, the Supreme Court ruled that the issues involved in that
case were regulatory questions, which needed to be answered. The regulatory issues in
the instant case stand answered by the 7th December, 2015 Order, and applying the
principles of CCI vs. Bharti Airtel, the CCI now has to discharge its duty to conduct
the investigation to examine if there is conduct that deserves to be interdicted.

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9.9 Ninthly, he submitted that it is trite and well-settled law that judgements must
not be read like legislation much less like fscal legislation, with a literal reading of
specifc sentences without context, particularly, context of the facts being adjudicated
upon in the judgement. The reference to "respective rights and obligations" in
Vodafone, noticed in the Impugned Order, has been rightly interpreted as regulatory
rights and obligations. CCI does not have any jurisdiction to sit in judgement and grant
any party-specifc relief to a complainant. Indeed, the National Company Law
Appellate Tribunal has jurisdiction to adjudicate compensation claims after fnal
fndings are rendered. According to Mr. Sundaresan, CCI vs. Bharti Airtel did not at all
deal with a fact pattern similar to the facts of the instant case indeed apart from the
relevant market falling within the TRAI administered telecom sector. The instant case
in fact shows that the telecom regulatory system has rendered a clear view. Indeed, it is
noteworthy that in fling such writ petitions, care is always taken not to make the
purported sectoral regulator a party. In fact, the Supreme Court cautioned against
"regulatory capture" in CCI vs. Bharti Airtel; opposed to bilateral rights and
obligations. Lastly, he submitted that the Petitioners have argued that the regulatory
framework has changed since the time of the Impugned Order. This argument too is of
no avail for stultifying the investigative and inquisitorial jurisdiction of the CCI
inasmuch as the investigation to probe, followed by a decision to punish or remedy or
both, is a statutory activity that is mandated by Parliament for CCI to conduct.

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9.10 Lastly, Mr. Sundaresan relied upon two documents on EU Competition Law
tendered by him during his arguments. He placed reliance on these documents to
ascertain the meaning of the terms "refusal to deal" and "refusal to supply''.
10. Mr. Sundaresan therefore concluded that in the circumstances, the Petitions
deserve to be dismissed and the investigations be permitted to be proceeded with.
SUBMISSIONS BY NOIDA SOFTWARE TECHNOLOGY PARK LIMITED.
11. Lastly, appearing for NSTPL, Ld. Advocate Mr. Z.T. Andhyarujina submitted
that CCI had the necessary jurisdiction to take cognizance of the present matter. That
Star’s own case before CCI was that the allegations in the Information were previously
raised before the TDSAT and “were heard at length and were comprehensively
adjudicated before the TDSAT.” Therefore, according to him, Star never proceeded on
the basis that the jurisdiction issues had not been decided. In fact, it proceeded on the
contrary basis that TDSAT had decided all matters raised in the Information.
According to Mr. Andhyarujina, the grounds now taken by Star and the arguments
made before this Court are directly contrary to the arguments made by Star before
CCI. He therefore submitted that a party cannot be allowed to approbate and
reprobate. Mr. Andhyarujina’s next submission was that the test laid down in CCI vs.
Bharti Airtel has been satisfed. It was Mr. Andhyarujina’s third submission that the 7th
December, 2015 Order has extensively dealt with the issues between the parties with

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respect to the RIOs and the violations of the Interconnect Regulations and the TRAI
Act. As such, the 7th December, 2015 Order is conclusive, comprehensive and has
fnally adjudicated upon the said issues. Mr. Andhyarujina’s fourth submission was
that the various orders and directions of the TDSAT clearly indicate that the only
outstanding issues that remain to be decided in the Second TDSAT Petition is that of
settling of accounts. Placing further reliance on these orders, he submitted that the
said orders highlight the mala fde actions and intent of the broadcasters. Mr.
Andhyarujina tendered various charts across the bar to demonstrate how NSTPL was
a victim of price discrimination. Mr. Andhyarujina’s ffth submission was that this
Court, in its Writ Jurisdiction, has a limited and restricted scope to interfere with an
order of investigation and therefore, this Court ought not to interfere with the
Impugned Order. In this context, he placed reliance on Google Inc. & Ors. vs.
Competition Commission of India & Anr. 13, Kingfsher Airlines Ltd. & Ors. vs. Competition
Commission of India & Ors.14, and Shashikant vs. Central Bureau of Investigation & Ors15.
12. We have heard the arguments canvassed by the Learned Senior Advocates and
Advocates as aforesaid. We have also considered the Written Submissions fled by the
respective parties.
THE SUPREME COURT’S DECISION IN COMPETITION
13 2015 Scc Online Del 8992

14 (2010) 4 Comp L.J. 557
15 (2007) 1 SCC 630

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COMMISSION OF INDIA VS. BHARTI AIRTEL LTD. & ORS., [(2019)

2 SCC 521].
13. In order to appreciate the present controversy, we propose to frst deal with the
Supreme Court’s decision in CCI vs. Bharti Airtel. In the said case, disputes arose
between telecom service providers where one service provider alleged that others
were discriminating against it by not providing sufcient points of interconnection.
The aggrieved service provider fled a complaint with CCI. In turn, like in the present
case, CCI ordered an investigation. The said order of investigation was frst challenged
before this Court by way of a Writ Petition. This Court struck down the order of
investigation by holding that before CCI can exercise jurisdiction to investigate anti-
competitive activity, it must be frst established before the sectoral regulator that there
is a regulatory breach and such breach pertains to price discrimination etc. CCI
challenged this Court’s order before the Supreme Court which challenge failed.
14. We now proceed to analyse what the Supreme Court laid down in the said
decision. Whilst we do so, the question really to be ascertained was whether or not,
the decision in CCI vs. Bharti Airtel, considered in-personam disputes between
Reliance JIO lnfocomm Ltd. ("RJIL") and the incumbent dominant operators
("IDOs") viz. Vodafone India, Idea Cellular and Bharti Airtel. In this context, it would
be necessary to reproduce certain paragraphs from the said decision which are as
under:
“12. As mentioned above, TRAI is the regulatory which regulates the

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functioning of the telecom service provider i.e. the telecom sector. Section 11 of
the TRAI Act enumerates various functions which TRAI is supposed to perform
under the Act. Section 13, likewise, empowers TRAI to issue directions, from
time to time, to the service provider. In exercise of powers under Section 13 read
with Section 11 of the TRAI Act, TRAI issued directions dated 7-6-2005 to all
the telecom service providers to provide interconnection within ninety days of the
applicable payments made by the interconnection seeker. The purpose behind
providing interconnection by one service provider to the other service provider is
to ensure smooth communication by a subscriber of one service provider to the
cell number which is provided by another service provider. In that sense, this
direction facilitates smooth functioning of the cellphone network even when it is
managed by diferent companies as it ensures interconnectivity i.e. connectivity
from one service provider to other service provider.
13. On 21-10-2013, RJIL was granted Unifed Licence and Unifed Access
Service Licence under Section 4 of the Telegraph Act by the Department of
Telecom (DoT) for providing telecommunication services in all 22
circles/licensed service areas in India. Soon thereafter, RJIL executed
interconnection agreements (ICA) with existing telecom operators inter alia
including, Bharti Airtel Ltd. and Bharti Hexagon Ltd. (hereinafter collectively
referred to as “Airtel”), Idea Cellular Ltd. (hereinafter referred to as “Idea”)d
Vodafone India Ltd./Vodafone Mobile Services Ltd. (hereinafter collectively
referred to as “Vodafone”). RJIL commenced test trial of its services after
intimation and approval of the DoT and TRAI.
14. By its “frm demand” letter of 21-6-2016, RJIL vide separate letters
requested IDOs to augment point of interconnection (POIs) for access, national

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long distance (NLD) and international long distance (ILD) services, as

according to it, the capacity already provided to it was causing huge POI
congestion, resulting in call failures on its network. According to RJIL, these
companies intentionally ignored the aforesaid request. Accordingly, RJIL sent a
letter dated 14-7-2016 to TRAI stating that the POIs provided by IDOs are
substantially inadequate and leading to congestion/call failures on its network
in all circles. Hence, TRAI was requested to intervene and direct these telecom
operators to augment the POI capacities as per the demands made by RJIL.
TRAI vide separate letters dated 19-7-2014 requested inter alia the
aforementioned telecom operators to augment POIs as per the RJIL's request.
Further, responses of the respective companies were also sought on the issues
raised by RJIL, within seven days. Idea responded by sending letter dated 26-7-
2016 to RJIL denying that there had been any delay in augmentation of POIs
and further stated that it is willing to fully support RJIL and that it had
instructed its circle teams to augment the POIs on the basis of trafc congestion
as per the ICA. Likewise, Airtel also sent reply dated 3-8-2016 to TRAI, inter
alia stating that augmentation of POIs shall be undertaken as per the terms
and conditions of the ICA and on the basis of trafc trends post their
commercial launch. RJIL was not satisfed with such responses. It sent another
letter dated 4-8-2016 to TRAI reiterating its earlier request for augmentation
of POIs by the subject telecom operators. In the meantime, even Cellular
Operators Association of India (COAI) intervened by addressing
communication dated 8-8-2016 to TRAI wherein it took a stand by stating that
the RJIL was providing free service to millions of users under the guise of
testing which led to choking of POIs. It was further sugested that due to the free
service provided by RJIL, a substantial imbalance in voice trafc had occurred
for which the existing operators were not adequately compensated under the

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Interconnection Usage Charges Regulations (IUC) in place.
15. There was further exchange of correspondence between the parties and
even by the parties to the TRAI which shows that the parties stuck to their
respective positions and it may not be necessary to refer to those communications
in detail. Sufce it is to mention that RJIL fxed 5-9-2016 as the launch date,
which fact was informed to other service providers as well who were also told
that the subscriber base was expected to substantially and swiftly increase
resulting in even more POI congestion. On that basis, request was made for
urgent POI augmentation vide letter dated 2-9-2016. The TRAI even
facilitated a meeting between the representatives of RJIL and other service
providers (the respondents herein) to sort out and resolve the diferences in the
interest of the consumers. At the same time, in the said meeting, the three
telecom operators (respondents herein) also raised a grievance that free calls
being provided by RJIL has resulted in an unprecedented trafc congestion on
their respective networks and the current IUC regime is inadequate to cover the
cost of efciently maintaining such high trafc. Thereafter, vide letter dated 14-
9-2016, addressed by Airtel to RJIL, it stated that the POIs (also known as
E1s) would be converted into 50:50 ratio to outgoing and incoming E1s. In other
words, the E1s provided would be converted to “only outgoing” or “only
incoming” i.e. one-way E1s. RJIL replied by stating that it was acceptable to
them.
16. Soon thereafter i.e. in September 2016 itself, Mr Rajan Sardana, a

Chartered Accountant, fled information under Section 19 of the Competition
Act (registered as Case No. 81 of 2016) and similar application was fled by
Justice K.A. Puj (retired) (registered as Case No. 83 of 2016). Then, it was

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followed by information under Section 19 of the Competition Act by RJIL in

November, 2016 (registered as Case No. 95 of 2016).”
15. After having read the aforesaid, it would also be necessary to reproduce paragraph
no.22 which quotes the allegations raised in the complaint :
“22.It is clear from the above that as per RJIL, the respondent service
providers, along with COAI, entered into an anti-competitive
agreement/formed a cartel and acted in an anti-competitive manner which is
prohibited by the Act. On these allegations, it approached CCI for initiating
inquiry into this anti-competitive practice. Insofar as the nature of alleged
anti-competitive agreement is concerned, the allegations of RJIL are the
following:
22.1.Delay in provisioning or denial in provisioning of POIs, also known as
“E1” in telecom parlance, to RJIL by IDOs during the testing phase and after
commercial launch of RJIL services. POIs are the points where the networks of
telecom operators connect. Without sufcient POIs it is not possible for
subscribers of one service provider to make calls to subscribers of another
service provider.
22.2. It was also alleged, inter alia, that IDOs are denying Mobile
Number Portability (MNP) requests of customers who wanted to switch to
RJIL competing service.
22.3. It was also alleged that COAI was acting at the behest of IDOs
against the interest of a competing member i.e. RJIL, and not for the common
interest of the industry and consumers as a whole.”
16. We now reproduce what exactly the IDOs submitted were jurisdictional facts:

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“100. In the instant case, dispute raised by RJIL specifcally touches

upon these aspects as the grievance raised is that the IDOs have not given POIs
as per the licence conditions resulting into non-compliance and have failed to
ensure inter se technical compatibility thereby. Not only RJIL has raised this
dispute, it has even specifcally approached TRAI for settlement of this dispute
which has arisen between various service providers, namely, RJIL on the one
hand and the IDOs on the other, wherein COAI is also roped in. TRAI is
seized of this particular dispute.
101. It is a matter of record that before the TRAI, IDOs have refuted
the aforesaid claim of RJIL. Their submission is that not only required POIs
were provided to RJIL, it is the RJIL which is in breach as it was making
unreasonable and excessive demand for POIs. It is specifcally pleaded by the
IDOs that:
101.1. RJIL raised its demand for POIs for the frst time on 21-6-2016.
101.2. In the letter dated 21-6-2016, it was admitted that RJIL was in
test phase.
101.3. There was no express mention of any commercial launch date.
101.4. As per the letter, immediately on commercial launch RJIL would
have a 22mn subscriber base for which number series was already allotted.
101.5. As per the DoT Circular dated 29-8-2005 test customers are not
considered as subscribers and test customers can only be in the form of business
partners. It was highlighted that problem, if any, of congestion has been
sufered on account of provisioning of full-ledged services during test phase.
101.6. RJIL in its complaint before TRAI was not considering the period
of 90 days as was prescribed in the Interconnection Agreement. It was instead
proceeding on the basis that the demand for POIs should be met on an
immediate basis.

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101.7. There were several errors in the forecast made by RJIL.

101.8. The tables given by the RJIL are wrong as they take into account
its total demand at the end of nine months against what was actually
provided.”
17. Lastly, we record what the Supreme Court held to be jurisdictional facts that
were to be determined:
“102. The learned counsel appearing for the IDOs had also argued that the
frst frm demand for provisioning of POIs was made by RJIL on 21-6-2016.
According to the IDOs, in that letter, RJIL had expressly admitted that it was
under test phase and had not commenced “commercial services”. RJIL had also
stated that the demand for POIs was being made to “provide seamless connectivity
to targeted subscribers” as against “test consumers”. Their submission was that it
was not disclosed at all as to when RJIL was going to launch commercial services.
On the basis of the aforesaid stand taken by the IDOs, their argument is that in the
frst instance it is the TRAI which is not only competent but more appropriate
authority to consider these aspects as it is TRAI which is the specialised body going
by the nature of dispute between the parties, the following aspects have to be
determined by TRAI:
102.1. Whether IDOs were under any obligation to provide POIs during test
period?
102.2. As per the letter dated 21-6-2016 from RJIL, when IDOs were to
commence provisioning of POIs to RJIL?
102.3. Whether the demand for POIs made by RJIL were reasonable or not?
102.4. Whether there was any delay/denial at the end of Vodafone in
provisioning of POIs?

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102.6. Whether IDOs have provided sufcient number of POIs to RJIL in

conformity with the licence conditions?
103. We are of the opinion that as TRAI is constituted as an expert
regulatory body which specifcally governs the telecom sector, the aforesaid aspects of
the disputes are to be decided by TRAI in the frst instance. These are jurisdictional
aspects. Unless TRAI fnds fault with the IDOs on the aforesaid aspects, the matter
cannot be taken further even if we proceed on the assumption that CCI has the
jurisdiction to deal with the complaints/information fled before it. It needs to be
reiterated that RJIL has approached the DoT in relation to its alleged grievance of
augmentation of POIs which in turn had informed RJIL vide letter dated 6-9-2016
that the matter related to interconnectivity between service providers is within the
purview of TRAI. RJIL thereafter approached TRAId TRAI intervened and issued
show-cause notice dated 27-9-2016d and post issuance of show-cause notice and
directions, TRAI issued recommendations dated 21-10-2016 on the issue of
interconnection and provisioning of POIs to RJIL. The sectoral authorities are,
therefore, seized of the matter. TRAI, being a specialised sectoral regulator and also
armed with sufcient power to ensure fair, non-discriminatory and competitive
market in the telecom sector, is better suited to decide the aforesaid issues. After all,
RJIL's grievance is that interconnectivity is not provided by the IDOs in terms of
the licences granted to them. The TRAI Act and Regulations framed thereunder
make detailed provisions dealing with intense obligations of the service providers for
providing POIs. These provisions also deal as to when, how and in what manner
POIs are to be provisioned. They also stipulate the charges to be realised for POIs
that are to be provided to another service provider. Even the consequences for breach
of such obligations are mentioned.
104. We, therefore, are of the opinion that the High Court is right in
concluding that till the jurisdictional issues are straightened and answered by TRAI

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which would bring on record fndings on the aforesaid aspects, CCI is ill-equipped to
proceed in the matter. Having regard to the aforesaid nature of jurisdiction
conferred upon an expert regulator pertaining to this specifc sector, the High Court
is right in concluding that the concepts of “subscriber”, “test period”, “reasonable
demand”, “test phase and commercial phase rights and obligations”, “reciprocal
obligations of service providers” or “breaches of any contract and/or practice”,
arising out of the TRAI Act and the policy so declared, are the matters within the
jurisdiction of the Authority/Tdsat under the TRAI Act only. Only when the
jurisdictional facts in the present matter as mentioned in this judgment particularly
in paras 72 and 102 above are determined by TRAI against the IDOs, the next
question would arise as to whether it was a result of any concerted agreement
between the IDOs and COAI supported the IDOs in that endeavour. It would be at
that stage CCI can go into the question as to whether violation of the provisions of
the TRAI Act amounts to “abuse of dominance” or “anti-competitive agreements”.
That also follows from the reading of Sections 21 and 21-A of the Competition Act,
as argued by the respondents.
105. The issue can be examined from another angle as well. If CCI is
allowed to intervene at this juncture, it will have to necessarily undertake an
exercise of returning the fndings on the aforesaid issues/aspects which are mentioned
in para 102 above. Not only TRAI is better equipped as a sectoral regulator to deal
with these jurisdictional aspects, there may be a possibility that the two authorities,
namely, TRAI on the one hand and CCI on the other, arrive at conlicting views.
Such a situation needs to be avoided. This analysis also leads to the same conclusion,
namely, in the frst instance it is TRAI which should decide these jurisdictional
issues, which come within the domain of the TRAI Act as they not only arise out of
the telecom licences granted to the service providers, the service providers are
governed by the TRAI Act and are supposed to follow various regulations and

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directions issued by TRAI itself.”
18. Following the aforesaid, the Supreme Court laid down the test for CCI to
exercise its jurisdiction as follows:
“113. The conclusion of the aforesaid discussion is to give primacy to the

respective objections of the two regulators under the two Acts. At the same time,
since the matter pertains to the telecom sector which is specifcally regulated by
the TRAI Act, balance is maintained by permitting TRAI in the frst instance
to deal with and decide the jurisdictional aspects which can be more
competently handled by it. Once that exercise is done and there are fndings
returned by TRAI which lead to the prima facie conclusion that the IDOs have
indulged in anti-competitive practices, CCI can be activated to investigate the
matter going by the criteria laid down in the relevant provisions of the
Competition Act and take it to its logical conclusion. This balanced approach
in construing the two Acts would take care of Section 60 of the Competition
Act as well.”
19. The Supreme Court’s decision clearly mandates that unless TRAI fnds fault
with the conduct of a service provider, CCI cannot order investigation. The Supreme
court has rightly laid down that despite the overlap between TRAI and CCI’s
jurisdiction the possibility of conficting views can be resolved by holding that matters
which pertain to issues specifcally regulated by TRAI, TRAI has the jurisdiction at
the frst instance to deal with and render fndings on such jurisdictional aspect.
Thereafter, once TRAI performs this function viz. returning a fnding that leads to a

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prima facie conclusion that the parties have indulged in anti-competitive practices can
CCI investigate a matter.
20. In our considered opinion, each of the issues raised in CCI vs. Bharti Airtel were
in-personam disputes between the RJIL and IDOs. In view of the aforesaid, it is evident
that the principles of law laid down by the Apex Court in CCI vs. Bharti Airtel applies
to in personam / inter party disputes i.e. after the rights and obligations of the parties
have been determined by TRAI the sectoral regulator - TRAI.
21. In view of the Supreme Court’s decision comprehensively reproduced
hereinabove, we are to ascertain whether or not the 7th December, 2015 Order decided
the necessary jurisdictional facts which in turn enabled CCI to pass the Impugned
Order commencing investigation. We may however clarify that as cautioned by the
Supreme Court in paragraph no. 120 of CCI vs. Bharti Airtel, we shall not be adjudging
the validity of the Impugned Order on merits.
Reasons and Findings :
22. With the aforesaid test laid down by the Supreme Court in mind, we now
proceed with necessary analysis of the 7th December, 2015 Order. In order to do so, it
would be necessary to reproduce the following paragraphs from the 7th December,
2015 Order.
INTRODUCTION :
This case raises some very basic issues concerning the broadcasting services. The
Interconnect Regulations are founded on the principles of “must provide” and non-

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exclusion. A broadcaster must give its signal to every distributor, indeed on

reasonable terms. The Regulations further mandate the broadcaster to publish a
Reference Interconnect Ofer (RIO) setting forth the technological and commercial
terms on which it would give its signal to a distributor. The RIO is a sort of ofer to
the world at large and if a distributor expresses willingness to take the broadcaster’s
signals on the RIO terms the broadcaster must give its signals to the distributor
without ado (provided of course the distributor’s system are technologically
compliant with the regulatory prescriptions!). At the same time, the Regulations also
seem to allow for inter-connect arrangement between the broadcaster and a
distributor, based on mutually negotiated agreement. To cap it all, the Regulations
dictate parity and non-discrimination in the inter-connect arrangements that a
broadcaster may enter into with diferent broadcasters. These demands, that to some
may appear incompatible or even conlicting and that go into the making of the
Regulations give rise to a number of questions. Does the RIO have precedence over
mutual negotiations and does it circumscribe the scope of negotiations and limit it to
the framework of the RIO within which negotiations may be held to agree upon some
changes in the terms of the RIO ? Does this view interfere with the broadcaster’s
freedom to contract on the basis of voluntary negotiations said to be guaranteed
under the Constitution and further sanctioned by the Copyright Act ? Is the converse
of the above the correct view, that for entering into interconnect agreement, mutual
negotiation has primacy and RIO is the fall back device, in case negotiations fail to
satisfy both sides ? But in that case if the broadcaster does not disclose to everybody
the terms of the agreement brased on negotiation with a certain distributor, how are
the rights of party and non-discrimination of other similarly situated distributors
impacted ? What is the parameter to judge similarity between diferent distributors
of TV signals ? What weight should be assigned to mutual negotiations, RIO and
parity and non-discrimination in the over-all scheme of interconnection to best sub-

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serve the intent and purpose of the Regulations. These are some of the main
questions, along with some ancillary issues that come up for consideration before the
Tribunal.
II. THE CASE OF THE PETITIONER :

The Petitioner is a head-end in the sky (HITS) operator and a distributor
of TV channels within the meaning of the Regulations. It makes the grievance that it
is being discriminated against from the beginning and its very entry in the
broadcasting sector was sought to be blocked at the threshold. According to the
Petitioner, the present Petitions are a sequel to its earleir Petition before the Tribunal
and the present proceedings may be viewed as continuation of its eforts to fnd a fair
place in the broadcasting sector on the basis of parity and non-discrimination.
Based on the submissions made by all the counsel, and in order to lend some
structure to the observations and fndings that we have arrived at, the issues may be
enumerated as under (which in substance remain the same as the questions framed
by the order dated 30.7.2015) :
1. Whether, in the facts of this case, a dispute requiring the adjudication of
issues framed by the Tribunal’s order dated 30 July 2015, at all arises ?
2. Whether the right to freedom of contract is embedded in the Interconnect
Regulations and consequently mutually negotiated agreements are outside the
purview of not only the non-discrimination obligation in clause 3.2 of the
Interconnect Regulations, 2004 but the regulatory regime itself ?
3. Whether, in light of the scheme of the Copyright Act and the fact that what
is being transmitted is licensed content, the Interconnect Regulations 2004 must
necessarily be interpreted as according complete freedom of contract and primacy of
mutual negotiations in matters of interconnection ?

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4. What interpretation ought to be placed on the various clauses of the 2004

Regulations ? Specifcally, what is contemplated by an RIO, and what is the extent
of negotiation that is permissible in deviating from the terms of the RIO ?
Specifcally, can parties – by mutual negotiations – contract out of mandatory norms
laid down both in the Regulations (e.g. 13.2A.11 and 13.2A.12) and the
conditions/methodolog contained in Schedule III ?
5. Can a HITS operator be regarded as similarly situated as compared with
MSO/DTH in terms of Clause 3.6 of the 2004 Regulations, thus enabling it to
claim non-discriminatory treatment ?
On a consideration of the relevant provisions of the Regulations, 2004, the

submissions made on behalf of the parties and the interveners and the earlier
decision of the Tribunal in the Hathway’s case we are unhesitatingly of the view that
reasonableness, parity and non-discrimination, as mandated in clause 3.2 of the
Regulations are essential and un-violable elements of an interconnect agreement. We
accept as correct, the submission made on behalf of TRAI that Clause 3.2 is the
essence of the Regulations and that clauses 3.1 & 3.2 stipulate the “most essential
conditions of the interconnection regulations”.
Having thus disposed of the main contentions made on behalf of the
broadcasters and some others in favour of leaving the feld completely open for
negotiated agreements and having arrived at some primary fndings we now proceed
to examine the question that was left open in the Hathway decision namely, the
extent of freedom of negotiation enjoyed by the provider and seeker of signals and the
extent to which the RIO of the provider regulates, limits or expands the area of
negotiation.
This brings us to the RIO which is the most basic in this controversy. Once
the nature of the RIO and its position in the Regulations is correctly understood

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everything falls into place and a number of points raised by the diferent counsel are
either answered or appear to lose relevance, including the issue of disclosure of
commercial terms raised by Mr. Sibal.
Mr. Kathpalia, learned Counsel appearing for Hathway, as one of the

interveners in the proceedings hit the nail on the head in submitting that what are
passed of as RIOs by the broadcasters are no RIOs at all. Mr. Kathpalia submitted
that the RIO was intended to be a standard, or a reference point. Instead, in its
current form, it can be empirically established that less than 5% of the actual deals
are on RIO basis and that too, for very short periods. In other words, Mr. Kathpalia
submitted that the present RIO (as published by broadcasters) was nothing but a
threat, or a bullying tool in negotiations, where distributors were presented with a
‘my way or the highway’ choice, with the RIO being the highway. The RIO rates
were also divorced from commercial or market realities, that neither party actually
wanted an agreement on RIO basis. This, Mr. Kathpalia submitted, was borne out
by the fact that when distributors did – in certain cases – agree into an agreement on
RIO basis, the broadcasters themselves were forced to rush to this Tribunal. Mr.
Kathpalia further submitted that the RIO was structured in a manner to make the a
la carte ofering of channels a non-starter. Mr. Kathpalia submitted that
discrimination was inherent in the faux RIO that exists today.
We agree with Mr. Kathpalia’s submissions on RIO and we proceed to
examine in how many ways the RIOs, currently ofered by the broadcasters, do not
conform to the Regulations.
The RIO ofered by every broadcaster to the distributors has three main
features :
i) It gives only a list of individual channels with their a la carte rates
ii) It does not give any bouquets of channels or the prices thereof
iii) Even the a la carte rates of channels are fxed with no regard to the

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market realities, as relected in the negotiated deals, but at the highest

permissible rate under the tarif order framed by TRAI
This faux RIO gives the broadcaster immense advantages. First, as every
distributor of channels much prefers to take channels in bouquet forms and not
individually, and specially not at the higher rates fxed in the RIO, the omission to
give any bouquets in the RIO makes the broadcaster by and large free of the
Regulations and gives it complete freedom of negotiations for entering into
interconnect arrangements with the distributors. The broadcaster is thus able to
retain the choice to take the “high road” of negotiations and thereby not to submit to
the regulatory provisions or to take the “low road” of the RIO in which case alone it
would submit to the Regulations. Secondly, by not giving in the RIO the bouquets
and their prices that it ofers for distribution in all its negotiated deals the
broadcaster completely bye passes the mandate of clause 13.2A.12 that fxes the ratio
between the a la carte rate and the bouquets rates channels. Thirdly, as the a la carte
rates given in the RIO do not follow the ratio under clause 13.2A.12 of the
Regulations and are also completely divorced from the actual market prices of the
channels, the broadcaster acquires great bargaining power in any negotiation with
the distributors. It can always refuse to enter into negotiations or terminate a
negotiation asking the seeker of the channel to take the RIO that would be highly
disadvantageous and quite often commercially unviable for the distributor. The RIO
thus puts the broadcaster in a position where it can lout not only the non-
discrimination clause but quite efectively also the “must provide” clause. Fourthly,
the RIO in its present form completely defeats the thrust of the Regulations towards
giving the subscriber the option to take only a few channels of his/her choice and not
to be burdened with a very large number of channels in the form of a bouquet to sub-
serve the broadcaster’s interests in securing the advertisement revenue.
The broadcaster seeks to justify the faux RIO by taking the following

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positions. It frst, relies upon the untenable theory, as argued by Dr. Singhvi that the
Regulations recognise the negotiated agreement as a separate regime, independent of
the RIO and the Regulations give the broadcaster complete freedom for entering into
a negotiated agreement. The preposition is misleading and incorrect.
The provisions that form the basis for the submissions are contained (i) in
clause 3.5 that provide that the broadcaster to whom a request for providing TV
channels signals is made should provide the signals on mutually agreed terms to the
distributor of TV channels who is seeking signals, or specify the terms and conditions
on which it is willing to provide TV channels signals .............. and (ii) in the proviso
to clause 13.2A.6(i), providing that the broadcaster may enter, on non-
discriminatory basis, into agreements with diferent direct-to-home operator
modifying the reference interconnect ofer on such terms and conditions as may be
agreed upon.
It must be understood that provision of mutually agreed terms in clause 3.5
mainly relates to the areas under analogue mode of transmission. In analogue
system, there is absolutely no scientifc or objective way to ascertain the number of
viewers watching any particular channel and in analogue mode gross
understatement of the subscriber base by the distributor is a well-known and
recognised fact. There is thus no other mode for the broadcaster and the distributor
to agree upon the subscriber base and/or the licence fee payable by the distributor
excepting mutual negotiations. The position is, however, entirely diferent in
addressable systems of transmission in which the computerized subscriber
management system keeps record of every single viewer watching every channel given
by the distributor. Unlike analogue mode, in addressable systems, there cannot be
any dispute or any negotiations in that regard. Hence, Mr. Saket Singh rightly
submitted on behalf of TRAI that once the RIO regime is introduced in any area
under addressable transmission, the provision of clause 3.5 gets ousted. As regards,

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the proviso to clause 13.2A.6(i), it is to be noted that “the mutually agreed terms and
conditions are qualifed by the condition of non-discriminatory basis and provide
only for modifying the RIO and not to discard it altogether”.
It is secondly contended that by putting up the RIO on its website ofering
the channels individually and on a la carte rates the broadcaster satisfes the
requirement of non-discrimination. Additionally that the broadcaster is free to fx
the a la carte rates of channels upto the upper limit allowed under the tarif order
and regardless of the actual market price of the channels. It is further contended that
the broadcaster is not obliged to give any bouquets in the RIO because the
Regulations mandate it to ofer all its channels for distribution on a la carte basisd
there is no mandate to give the channels in the form of bouquets. The submission is
quite fallacious. As discussed earlier, ofering channels in the form of bouquets is the
preferred mode in the broadcasting sector. There is no need for any mandate for that.
The Regulation requires that apart from the bouquets, channels must also be ofered
on a la carte basis. That was intended for the beneft of the ordinary subscriber. But
that objective too is totally frustrated as the a la carte rates are artifcially raised
with no reference to the market prices of the channels. Moreover, Schedule III to the
Interconnect Regulations enumerate “Terms and Conditions Which Should
Compulsorily Form Part of Reference Interconnect Ofer ......”. The Annexure to
schedule III clearly requires the compositions of diferent bouquets with their
respective prices to be stated in the RIO, apart from the a la carte rates of the
channels. The omission to give the bouquets in the RIO is thus plainly a
contravention of the Regulations. Furthermore, the submission has already been
rejected in the Hathway decision.
As the Regulations stand in its present form, we are clearly of the view that
the RIO must relect not only the rates of channels but also the diferent formations,
assemblages and bouquets in which the broadcaster wishes to ofer its channels for

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distribution along with the rates of each of the formation or bouquet. Further, the a
la carte rate and the bouquet rates must bear the ratio as mandated in clause
13.2A.12. The RIO must also clearly spell out any bulk discount schemes or any
special schemes based on regional, cultural or linguistics considerations that would be
available on a non-discriminatory basis to all seekers of signals. To sum up the RIO,
must enumerate all the formats, along with their respective prices, in which the
broadcaster may enter into a negotiated agreement with any distributor. To put it
conversely, the broadcaster cannot enter into any negotiated deal with any
distributor unless the template of the arrangement, along with its price, consistent
with the ratio prescribed under clause 13.2A.12 is mentioned in the RIO. In
addition, any volume-related price scheme must also be clearly stated in the RIO so
as to satisfy the requirement of clause 3.6 of the Interconnect Regulations.
A proper RIO would, thus, form the starting point for any negotiations
which would be within the limits allowed by the ratio between the a la carte and the
bouquet rates as stipulated under clause 13.2A.12 and the margins between diferent
negotiated agreements would be such as they would hardly be any requirement for
disclosures.
VI.d. Issue 5
Issue No.4 is thus answered in the above terms and this takes us to the ffth
issue, regarding the status of the HITS operator for the purpose of interconnect
arrangements. In this regard, Mrs. Pratibha Singh submitted that “HITS has a
PAN-India footprint and a last mile monopoly”. It, therefore, enjoys the benefts of
both MSOs and DTH operators without any of their defciencies. She submitted
that a HITS operator could, thus, emerge as a monopolistic and a dominant player
in the market. We simply take note of the submission for the sake of record. There is
no material to support the apprehensions expressed by Mrs. Singh, and, in any event,

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this is a matter to be addressed by the regulator. It is not open to the broadcaster to

mete out a discriminatory treatment to the HITS operator on the basis of a self-
serving prediction that at some future date HITS has the potential to dominate the
broadcasting sector.
Dr. Singhvi and some other counsel submitted that the HITS operator was
diferent from other distributors of TV channels because it worked on a diferent
distribution technolog and referring to the Explanation to clause 3.6 sought to
justify the diferent rates ofered to the Petitioner as compared to other distributors of
channels. The explanation referred to is intended to clarify the expression “all
similarly based distributors of TV channels” occurring in clause 3.6 of the
Regulations. According to the explanation, the factors on the basis of which similarity
may be judged include geographical region and neighbourhood, having roughly the
same number of subscribers, purchase of similar service, using the same distribution
technolog. It is contended that the HITS operator uses a distribution technolog
diferent from both the MSO and the DTH operator. The contention, however,
ignores the second part of the Explanation that puts the diference based on
distribution technolog in two broad categories as under :
“For the removal of doubts, it is further clarifed that the distributors of
TV channels using addressable systems including DTH, IPTV and such
like cannot be said to be similarly based vis-a-vis distributors of TV
channels using non addressable systems.”
From the above it is clear that the diference based on technolog relates to
addressable systems and non-addressable systems and not between diferent
technologies among the addressable systems.
Any diference in distribution technolog can be accounted for in the
technological terms stipulated in the RIO but so far as commercial terms are
concerned, it is difcult to see a HITS operator as diferent from a pan-India MSO
and in our considered view a HITS operator, in regard to the commercial terms for

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an interconnect arrangement has to be taken at part with a pan-India MSO and

must, therefore, receive the same treatment.
VII. Operative Directions

In light of the discussions made above, both Star and Taj, as well as the
other broadcasters who have joined the proceedings as intervenors, are directed to
issue fresh RIOs, in compliance with the Interconnect Regulations, as explained in
this judgment within one month from the date this order becomes operational and
efective. It will be then open to the Petitioner to execute fresh interconnect
agreements with Star and Taj, and with any other broadcasters on the basis of their
respective RIOs or on negotiated terms within the limits, as described hereinabove.
Star and Taj must execute fresh interconnect agreements with the Petitioner within
two weeks from the date of issuance of their fresh RIOs. The agreement with Star
would relate back to 30 October 2015 and with Taj to 30 June 2015.
This issuance of the fresh RIOs by the broadcasters will also give right to
other distributors of channels with whom the broadcasters may be in interconnect
agreement to have their agreements modifed in terms of clause 13.2A.7.
It is noted in the earlier part of the judgment that the Petitioner executed an
RIO based agreement with Media Pro. At that time, it did not complain before the
Tribunal that it was being forced into the RIO based agreement even though it had
ample opportunity to do so as the Media Pro application was pending before the
Tribunal. Later on, after Media pro ceased to be an agent of the broadcasters, the
Petitioner, even after fling the present Petition, signed RIO based agreements both
with Star and Taj. The agreement with Star was for the period upto 30 July 2015
and the two agreements with Taj were upto 31 March 2015.
The Petitioner must, therefore, be held bound by those agreements till the

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periods of those agreements and further, three months beyond that in terms of clause
8 of the Interconnect agreement. After those dates (29 October in case of Star and 30
June in case of Taj) the arrangement will be governed by the fresh agreements.
IX. Suspension of the judgment.

We are conscious that in interpreting the Interconnect Regulations, 2004, it
has been necessary to reconcile seemingly inconsistent strands of the Regulations.
The non-discrimination obligation, which TRAI acknowledges as the pivot of those
Regulations, appears inconsistent with a regime where parties are allowed full
latitude to mutually negotiate their agreements and also not disclose the commercial
terms of the agreement to other market participants. The task before this Tribunal
has been to reconcile these diferent facets of the Regulation such that no one part is
rendered completely hollow, redundant or otiose. Thus, in the interpretation that we
have placed on the Regulation, there is the obligation to frame a meaningful RIO in
which all bouquet and a la carte rates are specifed, and there is also some room for
mutual negotiation (even on rates) within certain specifed parameters. This will
achieve the objective of introducing a transparent non-discriminatory regime whereby
distributors can obtain access to content, while still retaining some latitude to
mutually negotiable the terms and conditions of access. It will also make the nexus
between a la carte and bouquet rates, which the regulator thought ft to introduce,
applicable to all mutually negotiated agreements. Negotiations must be within the
parameters to those mandatory conditions specifed in the Regulations that cannot be
avoided or waived, and the mutual negotiation course cannot be used as the means to
completely step out of the Regulations. It would be plainly opposed to any common
sense principle to frst set out an elaborate cumbersome regulatory architecture, only
to allow parties to opt out of it as will.
At the same time, we are conscious that the present judgment may unsettle

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the way in which various parties in the broadcasting sector have entered into existing
agreements. We are further conscious that while the TRAI has taken a position
broadly in line with our conclusions in this case, that has not always been the case.
As the Amicus Curiae and the counsel for the Petitioner have pointed out, the
positions taken by TRAI in the past have not always been fully consistent. In
particular, we note the observation of TRAI in Consultation Paper No.15/2008 that
in view of the confdentiality restrictions, “the automatic implementation of non-
discrimination clause in Interconnect Regulation is practically difcult”. Thus, as
far back as 2008, TRAI was aware that the non-discrimination clause – which, in
these proceedings, it has sought to place on a very high pedestal – was efectively
inoperative. And yet, matters in the broadcasting sector have been allowed to lie
where they are by TRAI.
There are, undoubtedly, important issues of regulatory policy that underlie
the interpretative issues that this Tribunal has had to confront. It is incumbent on
this Tribunal to interpret the Regulations as those stand, and place an interpretation
that is aligned with the legislative and regulatory intent. But in a matter where
TRAI has not been entirely consistent at every point in time, in a matter where the
Regulations have evolved with frequent and successive amendments, and in a sector
which has undergone some technological change with the shift from analogue to
digital transmission, it is better if an opportunity is given for the Regulator to
comprehensively consider such issues, initiate appropriate consultations, and frame a
comprehensive code for the broadcasting sector.
We have, on past occasions as well, made similar sugestions with the hope
of nudging the Regulator to take proactive steps to reduce the scope of disputes arising
out of the Regulations. At the same time, the fact that regulatory intervention may
be the ideal way forward cannot and should not be an excuse for this Tribunal to
shirk the interpretative issues that have come before use. This is particularly so when

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there appears to be regulatory inertia.

It is in this background, and having given our anxious consideration to this
matter, that we resolve to suspend the operation of this judgment till 31 March 2016.
The judgment shall take efect on 1 April 2016. While we are aware that this is not
a common procedure, we are of the view that it is appropriate in the peculiar facts
and circumstances of this case, since the efect of this judgment may be to unsettle a
number of existing agreements and necessitate re-negotiation.
In the meanwhile it will be open to TRAI, if it elects to do so, to undertake a
comprehensive restructuring of the Regulations which would hopefully clarify many
of the issues that arise in these proceedings. We make it clear that this Tribunal is
issuing no such direction to TRAI. The delayed operation of the judgment is only to
aford an opportunity to TRAI to consider the matter and act in the intervening
period, if appropriate.
Having regard to the fact that the greater part of the country would come
under the DAS regime with efect from 1.1.2016, it would be advisable that TRAI
should try to frame a consolidated Broadcasting Code instead of the large number of
Regulations dealing with diferent aspects of the service and each having undergone
numerous amendments. In order to make a serious efort in that direction, TRAI
would be required to get hold of all the negotiated interconnect agreements between
the broadcasters and the distributors of channels, which the broadcasters are in any
event obliged to submit to TRAI. The analysis of the commercial terms of the
negotiated agreements would give TRAI a clear picture of the market prices of the
broadcasters’ channels. A comparison of the prices in the negotiated agreements and
those shown in the current RIOs will then show how far the RIOs are removed from
market realities. Having examined the negotiated agreements between the
broadcasters and the distributors of channels, TRAI may even feel the need to take a
re-look at the tarif orders framed by it. But for any meaningful exercise for

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reviewing and consolidating the broadcasting Regulations it would be imperative for

TRAI to get hold of the negotiated agreement between the broadcasters and
distributors which alone would give the correct picture of the market reality.
Needless to add that in case TRAI issues any fresh Regulations before 1
April 2016, the Petitioner and the broadcasters would be obliged to execute
agreements on that basis. In case, however, no fresh Regulations are issued by TRAI,
this judgment and order will come into efect from the aforesaid date and the parties
would be obliged to follow the directions given above.
X. Trying up the loose ends.

Suspension of this judgment, as explained above is in the larger interest of
the broadcasting sector. It does, however, leave open the question of the Petitioner’s
liability to pay licence fees to the broadcasters, Star and Taj, for their signals received
by it during the pendency of the Petitions before the Tribunal and further until
execution of fresh agreements in terms of this judgment or in terms of fresh
Regulations, if any, framed by TRAI. It will not be fair that the broadcasters should
continue to supply signals to the Petitioner without any payment for the next several
months. It is, therefore, necessary to make some interim arrangement under which
the Petitioner should make payment of licence fees to the two broadcasters until after
execution of fresh agreements accounts are fnally reconciled. The determination of
payment liability by the Petitioner may also require some evidence to be taken. For
this purpose, Petition No. 526 (C) of 2015 is de-taged from this judgment and kept
pending. Star has already fled an application (M.A. No.377 of 2015) in Petition
No.314 (C) of 2015 claiming the dues of licence fees from the Petitioner. Petition
No.526 (C) of 2015 is directed to be taged with Petition No.314 (C) of 2015. In
these two Petitions, the Tribunal proposes to determine the Petitioner’s liability to
pay the license fees to Star and Taj on an ad hoc basis and as an interim measure

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until the execution of the agreements with the two broadcasters, and when the
accounts of the two sides may be reconciled to determine any fnal liability of the
Petitioner or Respondents to make any further payments.
Before concluding we would like to put on record our deep appreciation for
the assistance rendered by all the counsel who appeared in these proceedings. We also
record our gratitude, particularly to the amicus curiae for the very valuable
assistance he provided to us by his thorough work and painstaking research of the
evolution of the regulatory regime for the broadcasting sector not only in India but in
some other jurisdictions as well.
In the result, Petition No.295(C) of 2014 (along with all applications
pending in it) is disposed of in the above terms. Petition No.526(C) of 2014 is held
back and kept pending as directed above.
23. Having ascertained that the decision in CCI vs. Bharti Airtel applies to in
personam / inter party disputes, we propose to juxtapose the decision in the said case
with that of the grievances of NSTPL. It is NSTPL’s case that its grievances in so far
as price discrimination is concerned have already been decided in the 7 th December,
2015 Order. In order to test the aforesaid submission, it would be necessary to list
below the issues as were framed in the First TDSAT Petition. These read:
1. Whether, in the facts of this case, a dispute requiring the adjudication of

issues framed by the Tribunal’s order dated 30 July 2015, at all arises ?
2. Whether the right to freedom of contract is embedded in the Interconnect
Regulations and consequently mutually negotiated agreements are outside the
purview of not only the non-discrimination obligation in clause 3.2 of the
Interconnect Regulations, 2004 but the regulatory regime itself ?

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3. Whether, in light of the scheme of the Copyright Act and the fact that what
is being transmitted is licensed content, the Interconnect Regulations 2004 must
necessarily be interpreted as according complete freedom of contract and primacy of
mutual negotiations in matters of interconnection ?
4. What interpretation ought to be placed on the various clauses of the 2004
Regulations ? Specifcally, what is contemplated by an RIO, and what is the extent
of negotiation that is permissible in deviating from the terms of the RIO ?
Specifcally, can parties – by mutual negotiations – contract out of mandatory norms
laid down both in the Regulations (e.g. 13.2A.11 and 13.2A.12) and the
conditions/methodolog contained in Schedule III ?
5. Can a HITS operator be regarded as similarly situated as compared with
MSO/DTH in terms of Clause 3.6 of the 2004 Regulations, thus enabling it to
claim non-discriminatory treatment ?
24. When juxtaposed, the conclusion that emerges is that the grievances raised
by NSTPL in the Information are materially distinct from the fve issues which were
actually framed in the First TDSAT Petition. Issue Nos. (ii) and (v) listed above have
not been raised in any petition fled by NSTPL against Star before TDSAT. However,
these issues came to be decided in view of the fact that TDSAT allowed all
stakeholders to intervene in the First TDSAT Petition because it was considering
questions that were likely to afect the broadcasting sector as a whole. In so far as Issue
Nos. (i) to (vi) are concerned, the 7 th December, 2015 Order does not decide whether
NSTPL was similarly situated with and thus entitled to the same rates, bundles /
bouquets, incentives and/or volume based discounts as those entities with whom Star

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had agreements. The fndings of the TDSAT related to general industry wide issues in
rem. In fact, the in personam dispute between NSTPL and the Petitioners is pending
fnal adjudication. This is evident from the subsequent orders of TDSAT itself. The
key issue that is specifc to the dispute between Star and NSTPL is whether NSTPL is
"similarly situated" with other distributors of Star, given its subscriber base, channel
of-take, geographic reach, placement location of channel etc. and thus, whether it is
entitled to parity in rates and incentives as such similarly situated entities. NSTPL will
have to discharge the burden of showing how it is "similarly situated" before it can
avail itself of the incentives / rates / bundles / bouquets ofered to other similarly
situated entities. In so far as fndings specifc to NSTPL's claims of parity /
nondiscrimination and disclosure are concerned, the TDSAT specifcally directed that
NSTPL will continue to be bound by Star RIO No.2 and that the determination of
NSTPL's payment liability under Star RIO No.2 requires evidence, which shall be
determined in the Second TDSAT Petition. NSTPL has admittedly raised allegations
of price discrimination, non-disclosure of discounted schemes / incentive schemes
and anti-competitive conduct all of which remains to be decided in the Second
TDSAT Petition.
25. Further, the issues as raised by NSTPL in the Second TDSAT Petition are
jurisdictional facts which only the TDSAT as an expert regulatory body is equipped to
decide as per the ratio laid down in CCI vs. Bharti Airtel. Absent a fnding in the

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Second TDSAT Petition that Star and Sony have in fact engaged in price
discrimination and/or non-disclosure of discounted schemes / incentive schemes and/
or anti-competitive conduct qua NSTPL, CCI could not have proceeded with the
investigation.
26. In our considered opinion, a bare perusal of the 7th December, 2015 Order
demonstrates that it pertains only to general / industry-wide issues relating to the
concept of RIO and the law declared therein is intended to be prospective in
operation. This is evident from the fact that TDSAT did not deal with the fner and
specifc issues of discriminatory conduct alleged by NSTPL against Media Pro, Taj
and Star in the First TDSAT Petition. In fact, none of the specifc reliefs sought
against Media Pro, Star and Taj in the First TDSAT Petition were even considered, let
alone granted, when passing the TDSAT Order. The specifc reliefs against Media
Pro, Star and Taj were:
"(c) Direct the Respondent Nos. l, 3 & 4 Companies to disclose the Volume
Related Schemes at which they have ofered their TV Channel Signals I
Content to distributors that are similarly placed with the Petitioner Company
hereind
(d) Consequently, direct the Respondent Nos.1, 3 and 4 Companies to refund
to the Petitioner Company any amounts it has paid under the respective
Interconnection Agreements, in excess of the prices being ofered by the said
Companies to distributors that are similarly placed with the Petitioner
Company:

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(e) Direct that the Respondent Nos. l, 3 and 4 Companies have an obligation
to disclose the existing and future volume related schemes to the Petitioner
Company here and further direct the Petitioner Company may avail of the
same if desiredd"
27. The 7th December, 2015 Order does not consider, let alone fnd, that NSTPL is
"similarly placed" with other distributors. The order merely holds that HITS
technology operators, being part of the addressable systems (as opposed to analogue /
non-addressable systems) are at par with other addressable system technology
operators and must, therefore, receive the same treatment. The factors peculiar to
NSTPL's market position, which would determine whether NSTPL is in fact
"similarly placed with other distributors" such as (i) viewership, (ii) advertisement
revenue potential, (iii) regional, cultural, linguistic considerations, and (iv) other
special considerations have not even been considered in the 7 th December, 2015 Order.
Instead, TDSAT passed an order on 30th July, 2015 noting that some of the questions
that arose for consideration in the First TDSAT Petition were likely to afect the
broadcasting sector as a whole. For this reason, all stakeholders were allowed to
intervene in the First TDSAT Petition. After various stakeholders intervened, the fve
issues that were eventually framed in the First TDSAT Petition were industry-wide /
general issues. Of these issues, not one relates to the specifc conduct of Media Pro,
Star or Taj. In Part IV of the 7 th December, 2015 Order , TDSAT noted various facts
concerning the broadcasting sector as a whole. Of these facts, not one relates to

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NSTPL or the Petitioners’ market position in the broadcasting sector. In Part V of the
7th December, 2015 Order , TDSAT noted various provisions of the TRAI Act and
Regulations, with particular reference to the non-discriminatory mandate and the
"must provide" obligation. These were particularly referred to and interpreted when
considering the questions relating to the scope of mutual agreement and freedom to
contract under the TRAI Act and Regulations. In Part VII of the 7 th December, 2015
Order, TDSAT passed its operative directions in light of the discussions on the fve
industry-wide issues decided by it. The operative direction was to issue fresh RIOs, in
compliance with the Regulations "as explained in this Judgment within one month from
the date of this order". This direction was not specifc to Star and Taj, but applied to all
other broadcasters who joined the proceedings as intervenors. Despite this, TDSAT
held that NSTPL was bound by Star RIO No.2, not only for the period of the
agreement but for three months beyond that as well. This operative direction was
clearly prospective. Pertinently, the TDSAT did not impose any penalty or direct any
other broadcaster to refund any amounts collected from charging allegedly
discriminatory / excess prices to NSTPL. In Part IX of the 7 th December, 2015 Order,
TDSAT suspended the operation of its own Order and directed that it would take
efect prospectively, with efect from 1 st April 2016. When doing so, TDSAT inter alia
noted as under:
"103 .... The task before this Tribunal has been to reconcile these diferent

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facets of the Regulation such that no one part is rendered completely hollow,
redundant or otiose. Thus, in the interpretation that we have placed on the
Regulation, there is the obligation to frame a meaningful RIO in which all
bouquet and a la carte rates are specifed, and there is also some room for
mutual negotiation (even on rates) within certain specifed parameters ...
xxx
104. At the same time, we are conscious that the present judgment may
unsettle the way in which various parties in the broadcasting sector have
entered into existing agreements. We are further conscious that while the TRAI
has taken a position broadly in line with our conclusions in this case, that has
not always been the case
xxx
107. It is in this background, and having given our anxious
consideration to this matter, that we resolve to suspend the operation of this
judgment till 31 March 2016. The judgment shall take efect on 1 April 2016.
While we are aware that this is not common procedure, we are of the view that
it is appropriate in the peculiar facts and circumstances of this case, since the
efect of this judgment may be to unsettle a number of existing agreements and
necessitate re-negotiation…"
28. The 7th December, 2015 Order further expressly noted:
“111. Suspension of this judgment, as explained above is in the larger interest

of the broadcasting sector. It does, however, leave open the question of the
petitioner's liability to pay licence fees to the broadcasters, Star and Taj,
for their signals received by it during the pendency of the petitions before the
Tribunal and further until execution of fresh agreements in terms of this

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judgment or in terms of fresh Regulations, if any, framed by TRAI. It will not

be fair that the broadcasters should continue to supply signals to the petitioner
without any payment for the next several months. It is, therefore, necessary to
make some interim arrangement under which the petitioner should make
payment of licence fees to the two broadcasters until after execution of fresh
agreements accounts are fnally reconciled. The determination of payment
liability by the petitioner may also require some evidence to be taken. For this
purpose, Petition No. 526 (C) of 2015 is de-taged from this judgment and kept
pending. Star has already fled an application (M A. No. 377 of 2015) in
Petition No. 314 (C) of 2015 claiming the dues of licence fees from the
petitioner. Petition No. 526 (C) of 2015 is directed to be taged with Petition
No. 314 (C) of 2015. In these two petitions, the Tribunal proposes to determine
the Petitioner's liability to pay the license fees to Star and Taj on an ad hoc
basis and as an interim measure until the execution of the agreements with the
two broadcasters, and when the accounts of the two sides may be reconciled to
determine any fnal liability of the Petitioner or Respondents to make any
further payments.” (emphasis supplied)
Therefore, this liability, once determined, will constitute the fnal adjudication of the
rights and liabilities of the Petitioners and NSTPL inter se.
29. We fnd credence in Mr. Khambata’s argument that in the Second TDSAT
Petition, NSTPL has made various in personam specifc allegations against Star.
Admittedly, in response to the Second TDSAT Petition, Star has denied all of
NSTPL's Allegations. In the 7th December, 2015 Order, TDSAT has itself recognized
the diferent factors / parameters that may play a role while determining whether a

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broadcaster had actually discriminated against a distributor. Therefore, according to
us, the critical issues / aspects identifed by NSTPL in its oral arguments are pending
adjudication in the Second TDSAT Petition. None of them have been decided by
TDSAT in the 7th December, 2015 Order. In fact, at the time of passing the 7 th
December, 2015 Order, TDSAT specifcally directed in paragraph 111 that the
question of liability and therefore the inter-party disputes between NSTPL and Star
would be decided in the Second TDSAT Petition. Thus, the issue of "reconciliation of
accounts" includes whether NSTPL was entitled to the same price, bouquets and
incentives as "similarly situated distributors". Logically, if NSTPL does not establish
that it is "similarly situated" then it would not be entitled to the same price / incentives
etc. on reconciliation of accounts. These are jurisdictional aspects and facts, which
must be decided before CCI could have ordered investigation.
30. Another aspect that leads us to hold that the Impugned Order cannot be
sustained is that the Petitioners as also CCI were ad idem as to the onus cast upon CCI
under Section 26 (1) of the Act. This meant that a prima facie fnding AAEC would be
an essential and mandatory fnding before CCI could direct investigation. However,
the Impugned Order lacks this necessary fnding. In our considered opinion, the
Impugned Order cannot be sustained on this count alone. In this respect, it would be
necessary to place reliance on the Supreme Court’s decision in CCI v Steel Authority
of India (supra) and the following fndings therein:

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“93. We may also usefully note that the functions performed by the
Commission under Section 26(1) of the Act are in the nature of preparatory
measures in contrast to the decision-making process. That is the precise reason
that the legislature has used the word “direction” to be issued to the Director
General for investigation in that provision and not that the Commission shall
take a decision or pass an order directing inquiry into the allegations made in
the reference to the Commission.
94. The Tribunal, in the impugned judgment, has taken the view that there is
a requirement to record reasons which can be express, or, in any case, followed
by necessary implication and therefore, the authority is required to record
reasons for coming to the conclusion. The proposition of law whether an
administrative or quasi-judicial body, particularly judicial courts, should
record reasons in support of their decisions or orders is no more res integra and
has been settled by a recent judgment of this Court in CCT v. Shukla & Bros.
[(2010) 4 SCC 785 : (2010) 2 SCC (Cri) 1201 : (2010) 2 SCC (L&S) 133] ,
wherein this Court was primarily concerned with the High Court dismissing
the appeals without recording any reasons. The Court also examined the
practice and requirement of providing reasons for conclusions, orders and
directions given by the quasi-judicial and administrative bodies.
97. The above reasoning and the principles enunciated, which are consistent
with the settled canons of law, we would adopt even in this case. In the backdrop
of these determinants, we may refer to the provisions of the Act. Section 26,
under its diferent sub-sections, requires the Commission to issue various
directions, take decisions and pass orders, some of which are even appealable
before the Tribunal. Even if it is a direction under any of the provisions and not
a decision, conclusion or order passed on merits by the Commission, it is
expected that the same would be supported by some reasoning. At the stage of

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forming a prima facie view, as required under Section 26(1) of the Act, the
Commission may not really record detailed reasons, but must express its mind
in no uncertain terms that it is of the view that prima facie case exists,
requiring issuance of direction for investigation to the Director General. Such
view should be recorded with reference to the information furnished to the
Commission. Such opinion should be formed on the basis of the records,
including the information furnished and reference made to the Commission
under the various provisions of the Act, as aforereferred. However, other
decisions and orders, which are not directions simpliciter and determining the
rights of the parties, should be well reasoned analysing and deciding the rival
contentions raised before the Commission by the parties. In other words, the
Commission is expected to express prima facie view in terms of Section 26(1) of
the Act, without entering into any adjudicatory or determinative process and by
recording minimum reasons substantiating the formation of such opinion, while
all its other orders and decisions should be well reasoned.”
31. The aforesaid decision of the Supreme Court as also various other decisions
cited before us clearly lay down that the formation of an opinion is a sine qua non for
CCI to exercise its jurisdiction.
32. Further, whilst considering a contravention of Section 3(4) of the Act, CCI
ought to render a prima facie fnding as to the existence of an agreement refusing to
deal and that such agreement causes/is likely to cause AAEC in India. However, as
already held by us hereinabove, such material fnding is lacking in the Impugned
Order. Faced with this difcultly, CCI has attempted at defending the Impugned

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Order by stating that it evidently contains an analysis of whether Star and Sony are in
dominant positions in the relevant market. CCI admits and accepts that the Impugned
Order assesses the conduct of Star and Sony under Section 4 of the Act, and
therefore, the Impugned Order has considered the factors set out under Section 19 (4)
of the Act. In fact, the CCI submitted that every vertical agreement / refusal to deal is
not interdicted by CCI. Instead, CCI conducts a threshold analysis to ascertain
whether the person is in a dominant position before proceeding to analyze whether the
agreement amounts to a refusal to deal. This is because, according to CCI, parties who
are not in a position of dominance have the freedom to contract and deal with
whomsoever they choose. However, the oral arguments and the Written Submissions
tendered by CCI do not provide any reason whatsoever as to why, after ascertaining
that Star and Sony are in dominant positions in the relevant market, no analysis of the
likelihood of AAEC has been carried out when passing the Impugned Order. Before
directing an investigation, the CCI ought to have applied its mind to and scrutinized
the Petitioners' conduct based on the factors set out under Section 19(3) of the
Competition Act. Apposite from this discussion, it would be necessary to reproduce
the following fnding from the Supreme Court’s decision in ShriSitaram Sugar Co.
Ltd. vs. Union of India16,
“30. The words “having regard to” in the sub-section are the legislative
instruction for the general guidance of the government in determining the price
16 (1990) 3 SCC 223

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of sugar. They are not strictly mandatory, but in essence directory. The
reasonableness of the order made by the government in exercise of its power
under sub-section (3-C) will, of course, be tested by asking the question whether
or not the matters mentioned in clauses (a) to (d) have been generally
considered by the government in making its estimate of the price, but the court
will not strictly scrutinise the extent to which those matters or any other
matters have been taken into account. There is sufcient compliance with the
sub-section, if the government has addressed its mind to the factors mentioned
in clauses (a) to (d), amongst other factors which the government may
reasonably consider to be relevant, and has come to a conclusion, which any
reasonable person, placed in the position of the government, would have come
to. On such determination of the price of sugar, which, as stated
in Panipat [(1973) 1 SCC 129 : (1973) 2 SCR 860] is the fair price, the sub-
section postulates the calculation of an amount, with reference to such price, for
payment to each producer who has complied with an order made with reference
to sub-section (2)(f). The “price of sugar”, unlike the “amount”, is arrived at
by a process of costing in respect of a representative cross-section of
manufacturing units, bearing, of course, in mind the legislative instruction
contained in clauses (a) to (d).”
33. In the Impugned Order, in order to hold a prima facie contravention of Section
3(4), CCI ought to have formed a prima facie view that there exists an agreement either
between Star/Sony and NSTPL which provides for a refusal to produce, supply,
distribute, store or trade in goods or provision of services with/to NSTPL and that
such agreement causes AAEC. However, there is no fnding that the Petitioners have

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refused to produce, supply, distribute, store or trade in goods or provision of services
with/to NSTPL. CCI was under an obligation to arrive at a prima facie fnding that the
conduct of the Petitioners causes AAEC. Since there is no prima facie fnding by CCI
on AAEC, according to us, the mandatory jurisdictional pre-requisite of a prima facie
view of contravention of Section 3(4) is absent. Therefore, once again, we are unable
to fnd any reasonable justifcation justifying CCI’s failure to apply the aforesaid
analysis whilst passing the Impugned Order. This being so, the Impugned Order
cannot stand the test laid down under the Act.
34. The impropriety of the Impugned Order stands further buttressed from the fact
that whilst it says that the Petitioners have prima facie violated Section 3(4) read with
3(1) of the Competition Act, the factors to arrive at such fnding viz. Section 19 (3)
have not been considered. The Impugned Order is once again found lacking in the
requirement to analyze and apply the factors laid down under Section 19(3) of the
Competition Act and therefore cannot be sustained.
35. Moving further, it was Mr. Andhyarujina’s submission that Star has changed its
stand regarding the scope of the issues that were decided by TDSAT in the 7 th
December, 2015 Order and the Second TDSAT Petition. In this context, Mr.
Andhyarujina placed reliance on the 10 th August, 2017 Order, 16th November, 2017
Order and Star’s Written Submissions fled with TDSAT on 8 th November, 2017. It
was Mr. Andhyarujina’s submission that Star had always maintained that the 7 th

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December, 2015 Order conclusively adjudicated all issues pending between the parties
and therefore; nothing survives in Second TDSAT Petition for adjudication. However,
in this respect, it is pertinent to note that whilst Star fled its Written Submissions with
the CCI on 8th November, 2017, by an order dated 21 st November, 2017 TDSAT
rejected Star's contention that the Second TDSAT Petition was infructuous and that
TDSAT itself held that the legality and validity of demand raised by Star against
NSTPL is pending adjudication in the Second TDSAT Petition. In our opinion, once
TDSAT rendered a fnding that there were issues that survived and were required to
be adjudicated in the Second TDSAT Petition despite having passed the 7 th December,
2015 Order, what Star contended prior to such fnding in its Written Submissions is
irrelevant. It is for this reason that Mr. Khambata brought to our notice paragraph no.
29 of Star’s Writ Petition which reads:
“29. Bearing the above in mind, it is submitted that it is evident that the
Respondent No.2 has itself raised the issue of alleged non-provisioning of TV
Channels by the Petitioner leading to alleged refusal to deal and price
discrimination before the Hon'ble TDSAT which is pending adjudication as
per its own case and order dated 10 Aug 201 7 of the Hon'ble TDSAT. Thus,
the Respondent No.2 ought not to be permitted to forum shop and re-agitate the
same issues before the Respondent No. I, in order to avoid its payment
obligations and contrary to the clear mandate and regulatory regime and
adjudicatory body prescribed under the TRAI Act, which bars the jurisdiction
of the Respondent No. I to adjudicate upon issues which are within the scope of
TRAI Act and Ld. TDSAT.”

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36. Additionally, Star has taken a specifc ground in its Writ Petition contending
that the rights and obligations of the parties under the TRAI Act are still pending
adjudication under the TRAI Act and that the TDSAT is still considering the issue of
discrimination and denial of incentive scheme in the Second TDSAT Petition. At this
stage, it is pertinent to note that none of these grounds taken by Star has been
contravened by NSTPL in as much as NSTPL has not even chosen to fle a Reply to
the Writ Petitions.
37. It was Mr. Andhyarujina’s next argument that Star RIO No.2 was signed by
NSTPL under protest. To deal with this submission, it would frst be necessary to note
that it is not NSTPL's case pleaded on Afdavit as NSTPL has not fled any reply in
these petitions. Star has specifcally asserted in its Writ Petition that Star RIO No.2
was voluntarily entered into by NSTPL. However, NSTPL has not fled any reply
controverting the said assertions at all. In fact, in the 7 th December, 2015 Order,
TDSAT has noted:
"101. It is noted in the earlier part of the judgment that the petitioner
executed an RIO based agreement with Media Pro. At that time, it did not
complain before the Tribunal that it was being forced into the RIO based
agreement even though it had ample opportunity to do so as the Media Pro
application was pending before the Tribunal. Later on, after Media Pro ceased
to be an agent of the broadcasters, the petitioner, even after fling the present
petition, signed RIO based agreements both with Star and Taj. The agreement

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with Star was for the period upto 30 July 2015 and the two agreements with
Taj were up to 31 March 2015.
102. The petitioner must, therefore, be held bound by those agreements

till the periods of those agreements and further, three months beyond that in
terms of clause 8 of the Interconnect agreement. After those dates (29 October
in case of Star and 30 June in case of Taj) the arrangement will be governed by
the fresh agreements.”
38. The aforesaid passage from the 7th December, 2015 Order refects that even
TDSAT did not accept NSTPL’s contention that Star RIO No.2 was not binding as
being "under protest" or ''without prejudice".
39. We are further unable to place any reliance on the various charts submitted by
NSTPL to submit that Star and Sony have indulged in price discrimination. It is now
clear that the issue as to whether Star and/or Sony indulged in price discrimination is
still pending adjudication in NSTPL 's Second TDSAT Petition. Therefore, we cannot
pass any fnding in this respect. In any event, the Supreme Court in CCI vs. Bharti
Airtel has clearly laid down that this Court ought not to go into the merits of the
Impugned Order. Keeping in line with the Supreme Court’s directions in CCI vs.
Bharti Airtel, we also refrain from making any observations as to the conduct and on-
going insolvency proceedings of NSTPL.
40. With respect to the Respondents’ submissions that this Court ought not to
interfere with the Impugned Order and the various citations tendered by them to

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prevent this Court from judicially reviewing the Impugned Order, we deem it
appropriate to refer to the following fndings from CCI vs. Bharti Airtel :
“B. Whether the writ petitions fled before the High Court of Bombay
were maintainable?
115. Here comes the scope of judicial interference under Article 226 of the
Constitution. As per the RJIL as well as CCI, the High Court could not have
entertained the writ petition against an order passed under Section 26(1) of the
Competition Act which was a pure administrative order and was only a prima
facie view expressed therein, and did not result in serious adverse consequences.
It was submitted that the fnding of the High Court that such an order was
quasi-judicial order is not only erroneous but it is contrary to the law laid down
in SAIL [CCI v. SAIL, (2010) 10 SCC 744] . The respondents, on the other
hand, have submitted that the judgment in the above case had no application
in the instant case as it did not deal with the sector that is regulated by a
statutory authority. Moreover, such an order was quasi-judicial in nature and
cannot be treated as an administrative order since it was passed by CCI after
collecting the detailed information from the parties and by holding the
conferences, calling material details, documents, afdavits and by recording
the opinion. It was submitted that judicial review against such an order is
permissible and it was open to the respondents to point out that the complete
material, as submitted by the respondents, was not taken into consideration
which resulted in an erroneous order, which had adverse civil consequences
inasmuch as the respondents were subjected to further investigation by the
Director General.
116. We may mention at the outset that in SAIL [CCI v. SAIL, (2010) 10
SCC 744] , nature of the order passed by CCI under Section 26(1) of the

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Competition Act [here also we are concerned with an order which is passed
under Section 26(1) of the Competition Act] was gone into. The Court, in no
uncertain terms, held that such an order would be an administrative order and
not a quasi-judicial order. It can be discerned from paras 94, 97 and 98 of the
said judgment, which are as under: (SAIL case [CCI v. SAIL, (2010) 10 SCC
744] , SCC pp. 785 & 787)
“94. The Tribunal, in the impugned judgment [SAIL v. Jindal
Steel & Power Ltd., 2010 SCC OnLine Comp AT 5] , has taken the
view that there is a requirement to record reasons which can be
express, or, in any case, followed by necessary implication and
therefore, the authority is required to record reasons for coming to the
conclusion. The proposition of law whether an administrative or
quasi-judicial body, particularly judicial courts, should record reasons
in support of their decisions or orders is no more res integra and has
been settled by a recent judgment of this Court in CCT v. Shukla &
Bros. [CCT v. Shukla & Bros., (2010) 4 SCC 785 : (2010) 3 SCC
(Civ) 725 : (2010) 2 SCC (Cri) 1201 : (2010) 2 SCC (L&S) 133] ,
wherein this Court was primarily concerned with the High Court
dismissing the appeals without recording any reasons. The Court also
examined the practice and requirement of providing reasons for
conclusions, orders and directions given by the quasi-judicial and
administrative bodies.
***
97. The above reasoning and the principles enunciated, which are
consistent with the settled canons of law, we would adopt even in this
case. In the backdrop of these determinants, we may refer to the
provisions of the Act. Section 26, under its diferent sub-sections,

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requires the Commission to issue various directions, take decisions

and pass orders, some of which are even appealable before the
Tribunal. Even if it is a direction under any of the provisions and not
a decision, conclusion or order passed on merits by the Commission, it
is expected that the same would be supported by some reasoning. At the
stage of forming a prima facie view, as required under Section 26(1)
of the Act, the Commission may not really record detailed reasons, but
must express its mind in no uncertain terms that it is of the view that
prima facie case exists, requiring issuance of direction for
investigation to the Director General. Such view should be recorded
with reference to the information furnished to the Commission. Such
opinion should be formed on the basis of the records, including the
information furnished and reference made to the Commission under
the various provisions of the Act, as aforereferred. However, other
decisions and orders, which are not directions simpliciter and
determining the rights of the parties, should be well-reasoned
analysing and deciding the rival contentions raised before the
Commission by the parties. In other words, the Commission is
expected to express prima facie view in terms of Section 26(1) of the
Act, without entering into any adjudicatory or determinative process
and by recording minimum reasons substantiating the formation of
such opinion, while all its other orders and decisions should be well-
reasoned.
98. Such an approach can also be justifed with reference to
Regulation 20(4), which requires the Director General to record, in
his report, fndings on each of the allegations made by a party in the
intimation or reference submitted to the Commission and sent for

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investigation to the Director General, as the case may be, together

with all evidence and documents collected during investigation. The
inevitable consequence is that the Commission is similarly expected to
write appropriate reasons on every issue while passing an order under
Sections 26 to 28 of the Act.”
117. There is no reason to take a contrary view. Therefore, we are not inclined
to refer the matter to a larger Bench for reconsideration.
118. It was, however, argued that since SAIL [CCI v. SAIL, (2010) 10 SCC
744] was not dealing with the telecom sector, which is regulated by the statutory
regulator, namely, TRAI under the TRAI Act, that judgment would not be
applicable. Merely because the present case deals with the telecom sector would
not change the nature of the order that is passed by CCI under Section 26(1) of
the Competition Act. However, it raises another dimension. Even if the order is
administrative in nature, the question raised before the High Court in the writ
petitions fled by the respondents touched upon the very jurisdiction of CCI. As
is evident, the case set up by the respondents was that CCI did not have the
jurisdiction to entertain any such request or information which was furnished by
RJIL and two others. The question, thus, pertained to the jurisdiction of CCI to
deal with such a matter and in the process the High Court was called upon to
decide as to whether the jurisdiction of CCI is entirely excluded or to what
extent CCI can exercise its jurisdiction in these cases when the matter could be
dealt with by another regulator, namely, TRAI. When such jurisdictional issues
arise, the writ petition would clearly be maintainable as held in Barium
Chemicals Ltd. v. Company Law Board [Barium Chemicals Ltd. v. Company
Law Board, AIR 1967 SC 295] and Carona Ltd. [Carona Ltd. v. Parvathy
Swaminathan & Sons, (2007) 8 SCC 559]
119. In Carona Ltd. [Carona Ltd. v. Parvathy Swaminathan & Sons, (2007) 8

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SCC 559] , this Court held as under: (SCC pp. 569 & 571, paras 26-28 & 36)
“26. The learned counsel for the appellant Company submitted that
the fact as to “paid-up share capital” of rupees one crore or more of a
company is a “jurisdictional fact” and in absence of such fact, the court
has no jurisdiction to proceed on the basis that the Rent Act is not
applicable. The learned counsel is right. The fact as to “paid-up share
capital” of a company can be said to be a “preliminary” or “jurisdictional
fact” and said fact would confer jurisdiction on the court to consider the
question whether the provisions of the Rent Act were applicable. The
question, however, is whether in the present case, the learned counsel for the
appellant tenant is right in submitting that the “jurisdictional fact” did
not exist and the Rent Act was, therefore, applicable.
27. Stated simply, the fact or facts upon which the jurisdiction of a
court, a tribunal or an authority depends can be said to be a “jurisdictional
fact”. If the jurisdictional fact exists, a court, tribunal or authority has
jurisdiction to decide other issues. If such fact does not exist, a court,
tribunal or authority cannot act. It is also well settled that a court or a
tribunal cannot wrongly assume existence of jurisdictional fact and proceed
to decide a matter. The underlying principle is that by erroneously assuming
existence of a jurisdictional fact, a subordinate court or an inferior tribunal
cannot confer upon itself jurisdiction which it otherwise does not possess.
28. In Halsbury's Laws of England (4th Edn.), Vol. 1, Para 55, p.
61d Reissue, Vol. 1(1), Para 68, pp. 114-15, it has been stated:
‘Where the jurisdiction of a tribunal is dependent on the existence of
a particular state of afairs, that state of afairs may be described as
preliminary to, or collateral to the merits of, the issue. If, at the
inception of an inquiry by an inferior tribunal, a challenge is made to

kpd 75/ 77 PD-WP-9175-2018.doc
its jurisdiction, the tribunal has to make up its mind whether to act or
not and can give a ruling on the preliminary or collateral issued but
that ruling is not conclusive.’
The existence of a jurisdictional fact is thus a sine qua non or condition

precedent to the assumption of jurisdiction by a court or tribunal.
***
36. It is thus clear that for assumption of jurisdiction by a court or a

tribunal, existence of jurisdictional fact is a condition precedent. But once
such jurisdictional fact is found to exist, the court or tribunal has power to
decide adjudicatory facts or facts in issue.”
120. Thus, even when we do not agree with the approach of the High
Court in labelling the impugned order as quasi-judicial order and assuming
jurisdiction to entertain the writ petitions on that basis, for our own and
diferent reasons, we fnd that the High Court was competent to deal with and
decide the issues raised in exercise of its power under Article 226 of the
Constitution. The writ petitions were, therefore, maintainable.”
41. In view of the authoritative fnding of the Supreme Court, we hold that the
present Writ Petitions against the Impugned Order are maintainable and this Court
ought to interfere with the Impugned Order in view of the fact that the procedure laid
down under the Competition Act and the Supreme Court’s pronouncement in CCI vs.
Bharti Airtel was not adhered to whilst passing of the Impugned Order.
42. Lastly, we now deal with the two documents on EU Competition Law tendered
by Mr. Sundaresan during his arguments. In so far as these documents are concerned,

kpd 76/ 77 PD-WP-9175-2018.doc
we note that frstly, the document titled 'Refusals to Deal 2007' dated 3rd September,
2009 states that under EU law, the term "refusal to deal" "refusal to supply'' refers to a
situation in which one frm refuses to sell to another frm, is willing to sell only at a
price that is considered "too high", or is willing to sell only under conditions that are
deemed unacceptable. It further explains that such situations are analyzed by
reference to Article 102 of the Treaty on the Functioning of the European Union
("TFEU"). Article 102 of the TFEU deals with unilateral conduct of dominant frms
which act in an abusive manner. On a reading of Article 102 of the TFEU, it appears
that the sine qua non for the application of Article 102 is that the enterprise from whom
supply is requested must enjoy substantial market power in the market for the refused
input, not simply by reference to its market share but also by taking account of the full
range of constraints which it faces, and in particular the ease with which its position
may be challenged by existing or potential competitors. As such, under EU law, refusal
to deal forms a facet of abuse of dominance. However, in the prevalent Indian regime,
abuse of dominance is an independent provision which falls under Section 4 of the
Competition Act. On the other hand, refusal to deal falls under Section 3 (4) of the
Competition Act. Hence, it appears that EU Competition Law on refusal to deal is
materially diferent from Indian law on the subject. Further and in any event, even
under EU Law, a refusal to deal will only be unlawful if it can be shown that it will have
an anti-competitive efect, with consequent long-lasting consumer harm. However, the

kpd 77/ 77 PD-WP-9175-2018.doc
Impugned Order did not consider whether the Petitioners’ actions of will have any
AAEC. Therefore, according to us, this submission of Mr. Sundaresan’s cannot help
sustain the Impugned Order.
43. In view of the fndings herein, we proceed to pass the order as below.
CONCLUSION :
44. Both the Writ Petitions are allowed.
45. The Impugned Orders dated 27th July, 2018 and 31st July, 2018 passed by the
Competition Commission of India under Section 26(1) of the Competition Act, 2002
and all consequent actions/notices of the Director General are quashed and set aside
in exercise of our power under Article 226 of the Constitution of India.
There shall be no order as to costs.
( S.J. KATHAWALLA, J. ) ( AKIL KURESHI, J. )

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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WRIT PETITION NO. 10110 OF 2018

Mr. D. J. Khambata, Senior Advocate alongwith Mr.Gautam Ankhad, Mr. Rohan

Mr. S.K. Cooper, Senior Advocate alongwith Mr.Karthik Somasundram, Ms Kirti

Mr. Somsekhar Sundaresan alongwith Mr. Venkat Raman, Mr.Abhishek, Ms.

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CORAM : AKIL KURESHI AND

Sr. Particulars Page

JUDGMENT (Per S.J. Kathawalla, J.) :

Order”) passed by Respondent No.1/Competition Commission of India (“CCI”).

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Competition Act, 2002 (“Competition Act”) and directed an investigation to be

Sony Pictures Network India Private Ltd. (“Sony”) on the basis of a

Complaint/Information fled by Noida Software Technology Park Limited

2. Below, we proceed to capture the factual conspectus of the matter, the

applicable law, judicial pronouncements and after considering the parties’

submissions, ascertain whether the Impugned Order should be sustained or quashed.

would be necessary to set-out the following :

notifed the Telecommunications (Broadcasting and Cable Services) Interconnection

arrangements amongst broadcasters such as the Petitioners and distributors of TV

channels such as NSTPL.

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3.3 Similarly, on 31st October, 2013, NSTPL entered into an interconnect

TV channels from Media Pro on an a-la-carte basis.

and MSM from distributing TV channels of multiple broadcasters by bundling them

also ceased to operate in view of certain alterations in the 2004 Regulations.

to Direct To Home ("DTH") operators and pan-India Multi-System Operators

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"(a) Declare that Regulation 3.2 of the 2004 Interconnection Regulations

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grievances against Star RIO No.1.

Media Private Limited (“Sony RIO No.3”).

for non-payment of Rs.1,69,57,400/- (“Disconnection Notices”).

NSTPL’s failure to repay Sony’s outstanding dues amounting to Rs.2,42,00,000/-

(“Sony Disconnection Notices”).

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Notices provided NSTPL made an on-account payment of Rs.1,00,00,000/- within a

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likely to afect the broadcasting sector as a whole, on 30 th July, 2015, TDSAT

permitted all concerned stakeholders to intervene in the First TDSAT Petition.

TDSAT Petition. The Second TDSAT Petition is pending as on date.

TRAI Regulations as interpreted by the TDSAT.

signals of channels to NSTPL, NSTPL’s unpaid dues accumulated to

3.21 On 18th December, 2015, TDSAT directed NSTPL to pay star

Rs.1,69,00,000/- on or before 31 st January, 2016, failing which, Star would be at liberty

to disconnect the signals of its channels.

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Rs.1,69,00,000/- subject to 12% interest on the amounts.

7th December, 2015 Order (“Contempt Application”).

Rs.1,69,00,000/- by NSTPL in terms of TDSAT Orders dated 18 th December, 2015

and 29th January, 2016 (“Execution Petitions”).

to repay its outstanding dues of Rs.2,42,00,000/-.

(“Third TDSAT Petition”). The Third TDSAT Petition is pending as on date.

Sony’s total outstanding.

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proceedings are pending as on date.

practices, owing to their strategic position in the broadcasting sector/market by