Loc Digital Network vs India Cast Media Distribution Pvt. Ltd

Heard learned counsel for the petitioner and learned counsel for the respondent in respect of interim relief sought by the petitioner.

On the very first date i.e. 30.11.2021 it was noted that pursuant to a disconnection notice dated 30.10.2021, respondent has disconnected the supply of

its channels to the petitioner DPO on and from 21.11.2021. Since respondent had appeared on the very first date, it was given an opportunity to

bring relevant materials on record to oppose the interim prayer. They have filed a reply. Thereafter parties were heard on the issue of interim

relief and it was noted in the order dated 28.1.2022 that in view of concern of the respondent, petitioner had shared through email of 20.9.2021 the

first audit report for the period September, 2019 to December, 2020. The stand of the respondent was that the said audit report is not complete.Â

In the above situation, the reasons for disconnection mentioned in the impugned notice of 30.10.2021 become significant. The notice makes a money

demand of Rs. 9.97 Lakhs approx. on the ground that there is absence of variable information and data pertaining to petitioner’s subscriber base

for the period 2.12.2019 to 31.8.2021, hence, a demand note for the amount of Rs. 9.97 Lakhs approximately had been raised on the basis of highest

subscriber number ever declared by the petitioner under the two agreements. Additionally a demand of Rs. 90,000 and odd was also made as

regular subscription dues under the agreements as on 31.8.2021. In the context of another agreement an interim demand has been raised for Rs.

1.30 Lakhs approximately. The petitioner admittedly did not pay the interim demand note for Rs. 9.97 Lakhs and Rs. 1.30 lakhs leading to

disconnection.   Â

In the order of 28.1.2022 respondent was asked to show that it had communicated adverse observations on the basis of Audit Report to the petitioner

after it found reasons to raise the interim demands noted above. It was noted that according to respondent petitioner’s system was not fully

complied with the standards set by TRAI and allegations of piracy had also been raised for the period after the filing of the petition.

The documents and materials brought on record by the respondent show that it was unhappy with delay in holding of audit by the petitioner and also

with delay in meeting respondent’s demand for an audit under Regulation 15 (2). However, to raise an interim demand of the nature

communicated in the impugned disconnection notice, the respondent was required to rely upon relevant materials discovered during the audit. After

receipt of audit report the respondent was required to formulate its objections or adverse comments on the basis of audit report and communicate the

same to the petitioner DPO for reply or comments, either directly or through the auditor. That course was not adopted.

In the facts noted above the disconnection for non-payment of attached interim demand made through the impugned demand notice is prima facie

found to be against the law and not after following the fair procedure. In case respondent was convinced that petitioner is deliberately delaying to

meet the demand of an audit under Regulation 15 (2), that demand should have been reiterated in the disconnection notice. No time was given for

meeting this demand; it is used only as a ground.

In the above circumstances, the disconnection effected on 21.11.2021 on the basis of impugned disconnection notice cannot be permitted to

continue. Hence, by way of interim relief to the petitioner, the respondent is directed to restore supply of its signals to the petitioner in terms of the

agreement at the earliest, preferably within 24 hours.

This interim relief will not stand in the way of the respondent in examining the audit reports if it thinks proper and to communicate its adverse

observations or comments on that basis to the petitioner for verification or reply. Additionally, since the respondent has been demanding through

various correspondences holding of an audit under Regulation 15 (2) and the said demand had been reiterated today also on instructions, the said right

of the respondent to hold an audit under Regulation 15 (2) if affirmed. If the respondent does not permit on the asking of the respondent holding of

an audit under Regulation 15 (2) within two weeks the respondent would be at liberty to disconnect the supply of signals to the petitioner after

informing this Tribunal through an appropriate application. The interim order shall also not stand in the way of respondent in protecting its interest on

the basis of subsequent developments, in accordance with law. Petitioner may file its rejoinder to the reply within three weeks from today.Â

Let the matter be listed under the same head on 10.3.2022.Â