Seven Star Dot Com Pvt Ltd vs Zee Entertainment Enterprise Ltd

The petition is admitted for hearing. No notice need be issued because Mr. Kunal Tandon, Advocate has appeared on advance notice.

Heard learned counsel for the petitioner.

After hearing learned counsel for the parties in respect of interim relief sought by the petitioner and particularly after going through the contents of the impugned notice of disconnection dated 12.10.2021, this Tribunal finds the situation in the present case to be slightly unusual and alarming. According to the petitioner, annual audit under Regulation 15(1) of the Telecommunication (Broadcasting and Cable Services) Interconnection (Addressable System) Regulation, 2017 (Regulations of 2017) had taken place in October 2020.  Respondent exercised its right to have another audit under Regulation 15(2) through an empaneled auditor (Delloite).

On account of controversy arising between the petitioner and the said auditor, that audit could not materialise in view of the auditor's stand taken in email dated 23.3.2021(Annx. P-12) and the related situation.

The respondent appears to have made requests since July 2021 leading to a fresh audit under Regulation 15(2) in September 2021 by another empanelled Auditor KPMG.

Unfortunately, in an unusual situation this audit has also got stalled. Email of the auditor addressed to the petitioner on 30.9.2021 at 11.40 AM gives the version of the auditor, according to which,  the petitioner's representative / petitioner raised its voice and made allegation which according to auditor were very unprofessional and hence, the auditor expressed that he shall not be comfortable in continuing the audit. On the same date, it appears from Annx. P-22, the petitioner sent a letter to the respondent giving another version of the occurence, which according to the letter, happened on 29.9.2021 between 7.30 pm to 8.00 pm and for which the petitioner filed a complaint against Mr. Neeraj Singhla of ZEEL and Mr. Arun Parasher of KPMG on 1.10.2021 for un-authorised data theft from the premises of the petitioner. That complaint is Annx. P-23. From the submissions, it appears that the complaint with Cyber cell  at Mumbai is pending with notice to the concerned persons to join investigations.

The interim prayer of the petitioner is to restrain the respondent from giving effect to the disconnection notice and appoint an independent empaneled auditor to conduct an audit of the petitioner's system and also to appoint an Advocate Commissioner to oversee the conduct of such an audit to ensure that it is done in an independent manner.

This Tribunal was initially reluctant to interfere at an interim stage till the allegations made against the auditor and the respondent and the counter allegations made by the auditor could be decided on the relevant materials.  The reluctance was on account of pendency of criminal complaint filed  by the petitioner against the empaneled auditor and the respondent's representative.

Fortunately difficulty has been resolved on account of stand taken by learned counsel for the petitioner on instructions that petitioner shall withdraw the complaint made with the Cyber cell, Mumbai and shall rely upon relief it may be found entitled to in law,  by this Tribunal or TRAI, the Regulator.

This Tribunal is also inclined to associate the Regulator, TRAI in the present proceeding  so that it may examine the unusual situation  in this case and decide whether there is requirement of issuing any orders or directions to the concerned persons / parties in exercise of powers available to TRAI under Regulation 21 of the Regulations of 2017 and / or under its other statutory powers.

TRAI would also be free to apply its mind as to the adequacy of provisions in the audit manual and the Regulations to take care of such a situation in other matters in future. Long term measures may requirea time but it is expected that TRAI shall give clear instructions to its counsel Mr. Natarajan,  who has appeared today on the request of the Tribunal.

Let TRAI be added as a respondent in this case for assisting the Tribunal in reaching at an appropriate conclusion in accordance with law.

In view of petitioner having agreed to withdraw the criminal complaint filed with the Cyber Cell, Mumbai on 1.10.2021.  (Annx. P-23) or through similar related complaint against the concerned auditor and the respondent, the respondent is directed not to give effect to the impugned notice till the next date when this Tribunal shall consider petitioner's  proposal for appointing an empaneled auditor for the purpose of audit under Regulation 15(2) or an independent comprehensive audit under supervision of an Advocate Commissioner.

Learned counsel for TRAI should also come ready on the next date so that an effective interim order with a view to hold and complete an audit at the earliest may be passed.

Learned counsel for the petitioner shall provide a complete copy of the petition to learned counsel for TRAI by 2.11.2021.  If any relevant communication which may be of help of TRAI in resolving the aforesaid issue has not been included in the petition, both the parties are given liberty to supply such written material to Mr. Arjun Natarajan by 2.11. 2021.

Let Amended memo of parties  be filed by the petitioner by the next date. It will be open for the petitioner to bring on record subsequent developments by the next date.

Post the matter under the head "for directions" on 11.11.2021.