The DTH operator had moved TDSAT seeking an interim direction to Star India to restore the supply of signals and to enter into a fresh agreement because the earlier agreement has expired by efflux of time by 31 August 2017.
The tribunal asked the parties to enter into a fresh agreement either on the basis of negotiations or on the basis of reference interconnect offer (RIO) terms. In an order passed on 16 July, it also noted that the DTH will be entitled to restoration of signals only on payment of Rs. 12.52 crore on account.
The supply of signals under this interim order will have to be restored at the earliest and preferably within 24 hours, the tribunal said in the interim order.
The tribunal stated that the GST liability for the current dues will have to be met by Independent TV to the satisfaction of Star India within two weeks. Until the execution of the fresh agreement, the liabilities of the petitioner, for the time being, shall be governed by the terms of the settlement agreement.
The DTH operator was also directed to honour its commitment to supply tax deduction at source (TDS) certificates for the remaining amount of Rs. 2.23 crore within the time permitted by law. It was also asked to meet the liability of GST for the payments made against the current dues in accordance with law.
The tribunal said that the interim order will be without prejudice to the case of either of the parties, particularly that of Star India. “The arrangement shall be subject to final orders which may be passed by this tribunal in these two petitions,” the tribunal said in its order.
The tribunal noted that the two parties had reached a settlement agreement on 2 February under which Star India had agreed to accept a substantially reduced amount of Rs. 21.72 crore including TDS of Rs. 6.27 crore as dues till 12 January. Against this commitment, Independent TV, which was then known as Reliance Big TV, could pay only Rs. 5.73 core in six tranches till 9 March.
Star issued a notice of disconnection and subsequently effected for the default of outstanding dues. The balance amount of Rs. 9.74 crore along with a short deposit of Rs. 2.23 crore as TDS is due on account of the settlement of February 2018. On account of invoices for current period after this settlement agreement, a further amount of Rs. 2.78 crore admittedly remains due in addition to the GST.
The DTH operator filed a petition seeking relief against earlier disconnection notice of 21 December. It also offered to make good the entire outstanding under the settlement agreement dated 2 February.
It also agreed to pay at once an amount of Rs. 12.52 crore so as to cover not only the balance amount of Rs. 9.74 crore but also the current dues of Rs. 2.78 crore. It also agreed to provide TDS certificates to Star India for the amount of Rs. 2.23 crore so as to comply with its liabilities under the settlement agreement and also shall meet the tax liabilities for the current dues by paying GST in accordance with law.
Learned senior counsel for Star India raised several objections including technical ones on the ground that Reliance Big TV failed to meet its liabilities under the contract leading to an outstanding amount and when a settlement agreement was executed between the parties, even that was not honoured in full leading to disconnection of signals.
It has also been argued that now the agreement has expired and the contract is over because even the settlement agreement has been terminated through a notice dated 6 March 2018.
Lastly, the broadcaster also argued that due to the failure of the settlement agreement, as per terms of that very agreement, the DTH operator is liable to pay not only the amount agreed under the settlement agreement but for a larger amount of Rs.23.76 crores till the date of disconnection.
While stating that the aforesaid issue between the parties is clear and will be adjudicated in due course, the tribunal said that it would not be proper to keep the DTH operator out of competition by depriving it signals of Star India on account of this dispute.
It also said that it will not be proper to be guided by technicalities. “Parties must be given a chance to move forward and the dispute reserved for adjudication be settled as early as possible so that if the claim of Star India is lawful, it may get its claimed dues regardless of this interim order,” the TDSAT said.
The matter has been posted before the Registrar’s Court on 27 August to give an opportunity to the parties to complete pleadings at an early date.