Petition No. 101(C) of 2015. Case: Clear Media (India) Pvt. Ltd. Vs Ministry of Information & Broadcasting. TDSAT (Telecom Disputes Settlement & Appellate Tribunal)

Case NumberPetition No. 101(C) of 2015
CounselFor Appellant: Krishnan Venugopal, Sr. Advocate, Kaushik Mishra and Shivendra Singh, Advocates and For Respondents: Rajeev Sharma and Radhalakshmi R., Advocate
JudgesAftab Alam, J. (Chairperson) and Kuldip Singh, Member
IssueConstitution Of India - Article 14; Indian Telegraph Act, 1885 - Section 4; Telecom Regulatory Authority Of India Act, 1997 - Sections 11, 11(1)(a), 11(1)(a) (VIII), 11(i)(a), 3
Judgement DateJuly 01, 2015
CourtTDSAT (Telecom Disputes Settlement & Appellate Tribunal)


Kuldip Singh, Member

  1. The petitioner is operating FM (Frequency Modulation) Radio Broadcasting Service in Delhi for which it has been granted a license under section 4 of the Indian Telegraph Act, 1885. It has filed the present petition challenging the Notices dated 1.7.2014 and 24.2.2015 and clause 31 and clause 9.4 of Information Memorandum dated 21.1.2015, issued by the Ministry of Information and Broadcasting (MIB) who is the respondent herein. The respondent, vide the impugned notice dated 1.7.2014 and the Information Memorandum dated 21.1.2015, has asked the FM Phase-II licensees who wish to migrate to Phase-III License for a fresh period of 15 years to execute a fresh Grant of Permission Agreement (GOPA) which is to be effective from 31.3.2015 and to pay a Non Refundable One Time Migration Fee (NOTMF) at the time of execution of GOPA. The petitioner, who is a Phase-II licensee, is aggrieved by this cutoff date of 31.3.2015 as well as clause 9.4(C) of the Information Memorandum that provides for a three year lock-in period before the largest Indian shareholder can dilute its equity below 51%.

    Facts of the case

  2. The respondent had opened up the FM Broadcasting service for private sector privatization in the year 2000 by granting 22 licenses, including three for Delhi, under Phase-I licensing policy. These license were granted for a period of 10 years. The licensees were required to pay an annual license fee as prescribed under the licenses. 21 of these licenses are operational at present.

  3. On 13.07.2005, the respondent notified FM Radio Phase II policy. As per this policy, the licensees were required to pay a one-time entry fee (OTEF) that was based on a blind auction and an annual fee @ 4% of the Gross Revenue subject to a minimum of 10% of the reserve OTEF for the city. There were 284 successful bidders in the phase II auction. Out of these, 221 channels are operational at present.

  4. In the meanwhile, the Phase-I licensees, who were required to pay a defined license fee annually, were finding the same too onerous. The matter was under consideration of the respondent as well as the regulator TRAI and pursuant to the recommendations of TRAI, the phase-I licensees were offered migration to the phase-II regime retrospectively with effect from 01.04.2005 by paying a one-time entry fee based on the average of the successful bids in each city. 21 phase-I licensees migrated to the phase-II regime with effect from 01.04.2005 and their licenses are, therefore, valid till 31.03.2015.

  5. In January 2006, auction of phase-II licenses was held in cities with population of more than 3 Lakhs. The petitioner was the fourth successful bidder in Delhi and was awarded FM spectrum band to operate its radio station in Delhi. It paid a one-time entry fee (OTEF) of Rs. 13.33 crores and was granted a license on 14.06.2006 for ten years. As per the license, the effective date of the same was to be reckoned from the date of operationalization of the channel or one year from the date of signing of the license whichever occurred first. As the petitioner operationalized its channel on 01.09.2006, its license is expiring on 31.08.2016.

  6. On 25.07.2011, the respondent notified the phase-III policy for expansion of FM broadcasting through private agencies. Subsequently, a migration policy for phase-II licensees to phase-III was also made part of the same. On April 9, 2013, the respondent made a reference to TRAI. As per the letter written by the Secretary MIB to Chairman TRAI, there were some additional benefits in phase-III regime in terms of increased limit of FDI+FII 1 and substantial cost reduction due to networking of channels as well as permission to carry some additional content. As per the letter, in view of the additional benefits, there may be a case for charging migration fee from phase-II operators who opt to shift to phase-III regime. The issue relating to charging of migration fee was discussed in the Inter-Ministerial Committee on January 9, 2013 wherein it was decided that the TRAI may be authorized to give recommendations on the same after hearing all stake holders. TRAI was requested to give its recommendations under Section 11(1)(a) (VIII) of TRAI Act, 1997.

  7. TRAI, however, sought a clarification from the respondent stating that it had come to its notice that both the policy guidelines as well as the GOPA indicate the date of migration from phase II to phase III as July 25, 2011. However, the additional benefits cannot be availed retrospectively from July 25, 2011 as the existing phase-II operators will be authorized to avail these only after signing of GOPA for migration. It was further stated that if a...

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