Radio One Limited v. Broadcast Engineering Consultants India Ltd

12. Aperusai ofthe affidavit now filed by the respondent would show as on December 31, 2014, the total amount due is Rs.2,45,98,008/- against tower rentals for the towers at Delhi and Chennai for the period April.1, 2008 to March 31, 2015 and interest thereon ofRs.1,25,84,741/- and an amount ofRs. 4,35,882/- towards monitoring charges for 7cities, the total OMP 280/2012 &coimecU'dpelilioits j[2] IV of which, comes to Rs.3,76,18,631/-. No reply to the additional affidavit has been filed. 287/2012?

13. It is the case of the petitioner in the petition that it had participated in the auction of licences in respect of FM broadcasting stations by the respondent No. 2, Ministiy of Broadcasting (MIB) in Phase II of the licensing policy and has been granted Letter of Intent and subsequently, executed GOPA dated September 13, 2006, inter alia to set up and operate. 7 Radio stations in Tamil Nadu and Puducherry. In terms of the FM Radio policy, Phase II, the petitioner was required to co-locate transmission V- facilities with the existing infrastructure of Prasar Bharti and the common facilities had to be integrated by the respondent. In these circumstances, the petitioner entered into a PMA dated April 16, 2006 for CTI at Avadi,.. C.i'cnnai with the respondent No. 1. During oral, discussions with the officials of the BECIL, it raised concern with regard to the strength of signals that would originate at Avadi since it is located at least 20 kilometers from Chennai. According to the petitioner, it had paid to the MIB (GOI) an amount of Rs. 24.[3] Crores as one time entry fee for the operation of the FM broadcasting stations. It has also incurred capital expenditure of approximately Rs.60 Crores besides having paid a sum of Rs. 5.18 Crores to the respondent No. 1. It is also the case ofthe petitioner OMP 280/2012 connectedpditions Page 13 of50 being a successful bidder, the petitioner was also required to enter into an agreement paying rent for the use of the tower as per the said policy. It has also made an advance payment of Rs.1,08,00,000/- as 100% advance towards the estimated share of capital cost on cost sharing basis towards the building, installation, commissioning and completion of CTI to the respondent. Besides that, the petitioner was required to pay land and tower rentals. According to the petitioner, as per the FM Phase II policy at places where a suitable tower for Prasar Bharti was not available, the broadcasters were permitted to operationalise their transmission facilities out of interim set up till permanent set up was completed. The petitioner, for the city of Chennai created an interim set up at Doordarshan Centre, Chennai, and started operations of its Radio station under the name Hello FM on October 02, 2006 and the petitioner continues to use the said facility till date in view of the problems with the CTI set up/created by the respondent No. 1 at Avadi. The petitioner's case insofar as the facility at Avadi is concerned; the signals are poor, noisy with very low clarity. According to the petitioner, it is in'receipt of letter dated March 31, 2009, wherein, the respondent No. 1 has alleged that the petitioner, while operating from the interim set up at Chennai is in violation of GOPA as well as the PMA. The petitioner's stand is that it responded vide letter dated April 13, 2009, providing a detailed account of the disadvantages for phase II, due to OMP 280/2012 & connected pelilions • Page 14 of50 / s technological deficiencies in services as well as signal interference at CTI complex at Avadi. The petitioner also contested the demand made by the respondent No. 1vide its letter dated October 12, 2009 of an amount of Rs.31,37,780/- along with security deposit of Rs. 13,93,776/-, by stating that, the demand is unjustified as the petitioner had not commenced use of the same mview ofseveral deficiencies highlighted by it. The petitioner has also stated that tlie grievance ofthe petitioner has not been addressed. The petitioner also referred to the issuance ofpolicy guidelines in the year 2011 by MIB for migration to FIM Radio Phase III. The petitioner has also stated that the respondent has agreed to adjust the monitoring charges Irom the balance advanced capital with them and fiirther agreed to provide, interest on the balance capital, advance available with them, and with the said understanding, and in acknowledgement/admission of the same, the lespondent has even provided the petitioner witli TDS certificates, however, the respondent is yet to mal<e arefund ofRs.3,226,875/- and in ^'lew of the fact that the respondent No. 1has miserably failed and neglected to comply with its obligations under the agreement, it is constrained to invoke the arbitration clause to refer the disputes before the Sole Arbitrator. It has also referred to the writ petition filed by it being WP(C) No. 1257 of2012 being Radio One Ltd. Vs. Union ofIndia and Am., wherein, the Court has observed that the appropriate remedy in view OMP 280/2012 £• connectedpelilions Page 15of50 N.of the arbitration clause between the parties, is initiation of arbitration and seeking interim directions therein.

14. As noted in the other petitions, the respondent No. 1 had also filed its reply so also the respondent No. 2. That apart, the respondent No. 1 has filed an additional affidavit on February 23, 2013, wherein, the respondent No. 1 has taken the following stand: "4. I state that there have been other dealings between the parties in terms whereof tower rentals for the tower erected at Chennai and. monitoring charges in respect of monitoring of technical compliances and content are payable by the petitioner to respondent NO. 1. The said dealings are not under the Project Management Agreements.

5. I state that upto ST' December, 2014, an amount of Rs.1,30,44,538/- was payable by the petitioner towards tower rental for the Tower at Chennai for the period 01.04.2008 to 31.03.2005 along MHth interest thereon amounting to Rs.63,54,980/-. In addition, an amount ofRs.38,91,906/- was duefrom, the petitioner towards monitoring charges for the 7 cities. The total amount due from the petitioner upto 31.12.2014 was Rs.2,32,91,424".

15. Suffice to state, it is the case of the respondent No. 1 that the total amount due from the petitioner as on December 31, 2014 was OMP 2S0/2012 &connectedpetitions Page I(j of50 Rs.2,32,91,424/- towards tower rental for the tower at Chennai along with interest thereon and monitoring charges for the 7 cities under GOPA. No reply to the additional affidavit has been filed.

16. The case of the petitioner in this petition is that pursuant to an auction of the licenses in respect of private FM broadcasting stations by the MIB in Phase 11 of the licensing policy, Letters of Intent were granted to the petitioner to set up and operate radio stations in Categoiy B cities of Agra and Varanasi, Categoiy C cities of Bareily, Jalandhar, Goraklipur and Ranchi, and Categoiy D cities ofHisar and Karnal. It had executed GOPA on November 23, 2006. It had paid to the Govt. of India an amount of Rs.

7.88 Crores as one time entry fee and an amount of Rs. 25,10,505/towards fee for the first year in respect of the aforesaid 8 stations. It had also incurred capital expenditure for an approximately sum of Rs.24 Crores besides having paid a sum of Rs.[5] Crores to the respondent No. 1 and a sum of Rs. 1.20 Crores to Prasar Bharti. In terms of the Phase II policy, successful bidder was required to co-locate the transmission facilities with the existing infrastructure of Prasar Bharti and the common facilities had to be integrated by the respondent No. 1. In entered into agreements in the year 2006 with the Prasur Bharti for its existing infrastructure on payment of licence fee for each of its 8 radio stations. It had also entered into a OMP280/20!2 & connectedpetitions Page 17 of50 Project Management Agreement for CTI on April 22, 2006 with respect to FM radio station at Karnal. Similar agreements were executed in all the 8 cities. The petitioner, in consideration of the respondent No. I, building, installing, commissioning and completing the CTI agreed to pay to BECIL its shaie of actual cost as also fee for providing project management services equivalent to 10% of its share of actual net cost. An advance payment of Rs. 5,02,00,000/- was paid to the respondent No. 2 on 22.04.2006 for all 8 stations. Further, as per GOPA, the petitioner was lequired to pay its share of monitoring charges arrived at by equally apportioning Rs. 25,000/- per month amongst all permission holders for 'V the case of the petitioner, that, the BECIL vide letter dated March 19, 2009 demanded the outstanding monitoring charges for the year 2007-08 and 2008-09 from the petitioner. It is the case of the petitioner, puisuant to certam discussions, it was agreed that the monitoring charges be adjusted from the balance capital advance already with BECIL on account ofcommon infrastructure set up. It is the case ofthe petitioner that approximately, Rs.60 laklis are available with the BECIL and called upon. up the monitoring charges and for final reconciliation duly audited at their end so that the payments, ifany, may be made by the petitioner. Surprisingly, it received ashow-cause notice dated May 5, 2011 from the MIB for non payment ofmonitoring charges and stating that OMP 280/2012 &cowiectedpetitions Page 18 of50 the petitioner was in violation ofthe GOPA. The petitioner brought to the notice of the MIB the understanding arrived at between the parties. It is also its case that inspite of such unreasonable and arbitrary conduct of the respondent, it had sent a cheque of Rs. 7,86,535/- to the BECIL, being outstanding amount as per the petitioner's calculations. The petitioner refen-ed to the policy enunciated on July 25, 2011 for expansion of FM radio broadcasting services to private agencies Phase III, wherein, migration was permissible from Phase II to Phase III, subject to payment of all dues and securing an NOC from the concerned authorities. The petitioner also referred to a letter dated September 8, 2011 issued by MIB to the petitioner, asking it to clear the dues of the respondent before migration could take place. According to it, as per the respondent, vide its letter dated October 7, 2011, it had sent a final statement of accounts with regard to 8 Radio stations, whereby, it raised a.demand of Rs. 84,07,047/-. The respondent demanded Rs.58,24,172/- towards monitoring charges, which according to the petitioner, is not payable. The petitioner's case is that the statement also included an amount of Rs.5,77,628/- paid as TDS by BECIL.

17. Suffice to state, the petitioner contested the statement of accounts sent to it. The petitioner referred to a writ petition being WP (C) 8782/2011 wherein, it had prayed for a direction to permit it to migrate OMP 280/2012 &connectedpetitions p^gg jg without necessity ofobtaining acertificate from the respondent. The Court gave direction for involving the arbitration. The writ petition was withdrawn by the petitioner with liberty to initiate arbitration proceedings. It is necessary to state here that the petitioner has invoked clause 17.[1] of •the Project Management Agreements.

18. The respondentNos. 1and 2have filed their replies to the petition. I would not dilate much on the replies filed by the respondent Nos. 1and 2 in view of the additional affidavit filed by the respondent No. 1 on Februaiy 23, 2015, wherein, the following stand has been taken: "4. I state that there have been other dealings between the parties in terms whereofmonitoring charges in respect of monitoring of technical compliances and content are payable by the petitioner to respondent No. 1. The said dealings are not under the Project Management Agreements.

5. I state that upto 3f December, 2014 an amount ofRs.49,87,204/- was payable by the petitioner towards monitoring charges in respect ofthe 8citiesfor theperiod starting from 2007 to 31.03.2011 and 01.04.2012 to 31.03.2013. In addition, an amount ofRs.25,82,875/- was due from the petitioner towards CTI outstandings under the Project Management Agreements. The total amount due from the petitioner upto 31.12.2014 was Rs.75,70,079"... Page 20 of50 OMP 280/2012 & connected petitions In response to the aforesaid affidavit, the petitioner has denied, that the amount ofRs.75,70,079/- is due and payable.

19. During the hearing, Mr. Rajeev Sharma, learned counsel for the BECIL, the respondent No. 1, submitted a due payment summary ofthe petitioner, wherein, it is reflected that, the petitioner has to pay an amount ofRs. 54,87,586/- in total, the break up ofwhich is Rs. 44,35,360/-, against monitoring charges and Rs.10,52,226/- against CTI charges. OMP 291/2012;

20. The petitioner has filed the present petition with a stand that it had participated in the auction of licences in respect of private FM broadcasting stations by the MIB in Phase II of the licensing policy and granted Letters ofIntent to set up and operate 10 radio stations in the cities of Shimla, Alimednagar, Dhule, Jabalpur, Hisar, Jalgaon, Kamal, Patiala, Mujjafarpur and Ranchi. In terms ofthe Phase II policy, the petitioner wasrequired to co-locate transmission facilities with the existing infrastructure ofthe respondent Prasar Bharti and common facilities had to be integrated by the Broadcasting Engineering and Consultants India Ltd. (BECIL). It had entered into 10 agreements for availing therespondent's infrastructural facilities i.e. tower aperture, open space, land, covered space, building and other facilities. It had also entered into PMA for 10 cities for CTI with BECIL. In terms of the agreement, the petitioner was required to pay to OMP 280/2012 &connectedpetitions Page 2! of50 >the respondent the annual Ucence fee in advance for use of the respondent's infrastructure. Apart from this, the petitioner was to pay to the respondent in the first year an amount equal to one year's licence fee by way of security deposit which was refundable to the petitioner on termination of the agreement(s). Furthermore, as per the agreement(s), the petitioner was to pay to the respondent 10% after eveiy two years for the open/covered space and the common facilities; 2.5% after eveiy year for the tower. According to the petitioner, it had paid an amount of Rs.4,76,72,382/- towards licence fee in respect'of all the 10 radio stations till date. Furthermore, an amount of Rs. 68,94,331/- as security deposit was paid to the respondent at the time of execution of the licence agreements. The petitioner also referred to the new policy foiTnulated by the MIB on July, 2011, which stipulates migration to Phase III subject to clearing the dues and obtaining NOC from the concerned authorities. It is the case ofthe petitioner that a meeting was held with the Joint Secretary, Broadcasting of MIB on the issue of higher interest being charged by the respondent for use ofits infrastructure. It was decided that the issue ofhigh rentals will be discussed with the respondent in a separate meeting. Despite such an assurance, no meeting had been called for by the respondent. It is the petitioner's case that the respondent has failed miserably and neglected to comply with its obligation under the agreement(s) and is ftirther making OMP 280/2012 &connectedpetitions Page 22 of50 unreasonable demand from the petitioner and had no other alternative, but, to invoke clause 12 of the agreement(s), invoking arbitration for reference ofthe disputes so arisen between the parties before the Sole Arbitrator.

21. The respondent Prasar Bharti filed its reply wherein, it has taken a plea that the petitioner has not invoked any arbitration clause even though the petition was filed as far back as on March 26, 2012.

22. It is the case of the respondent that the petitioner has defaulted in making the payments and in such circumstances, it is not entitled to any interim measure or protection. It would state that the agreements for the 10 locations were executed as far back as on Marcli/April, 2006. The y agreements were arrived at voluntarily and the petitioner never objected to the licence fees specified therein. The respondent has also stated that the petitioner had paid licence fee without demur upto 2010-11. The •i respondent would submit that the petitioner has no prima facie case nor any balance of convenience in its favour. Admittedly, the petitioner, utilizing the land of the respondent, despite using the land, the petitioner is refusing to pay the reivt which is notjustified.

23. On March 03, 2015, when the matter was heard by this Court, the learned counsel for the petitioner has stated that the petitioner has paid all the dues to Prasar Bharti. According,to him, the Prasar Bharti in advance had raised an invoice for the year 2015-16 which has to be paid to the OMP 280/2012 &connectedpetilions Page 23 of50 petitioner and tlie same should not come in the way of for grant of NOC. Despite opportunity, no affidavit was filed and at the request of the counsel for the petitioner, the matter was adjourned to March 5, 2015. On March 5, 2015, the learned counsel for the petitioner has clarified that invoice raised by the Prasar Bharti was for the year 2014-15 for the usage of infrastructure like tower, open space and common facilities. He would concede to the fact, the petitioner has not invoked the arbitration clause.

24. Mi-.Rajeev Sharma, learned counsel for the respondent would state that an amount of Rs.1,02,82,583/- is due from the petitioner as on October 2014 with interest. He would state that till such time, the amount is paid by the petitioner, NOC cannot be granted. The learned counsel for the petitioner would submit that the petitioner would pay 50% of the amount to the respondent. OMP 294/2012;

25. In this petition, the petitioner has inter alia sought an order of injunction restrainuig the respondent No. 1 fronpi raising a demand of Rs. 81,11,040/- apart from seeking an order of issuance of No due certificate so as,?to enable the petitioner to sign GOPA for phase III. It is the case of the petitioner that pursuant tc; llie participation in the auction of licences, an LOI was issued by Ministry of Information and Broadcasting to operate Phase II FM broadcasting stations in 10 cities of Shimla, Ahmednagar, OMP280/2012& connectedpelUions Page 24 of50 V- Duley, Jabalpur, Hisar, Jalgaon, Karnal, Patiala, Muzafaipur and Ranchi. It had entered uito PMA with the respondent No. 1 with regard to the 10 cities. It had paid the respondent No. 1 an amount of Rs.6,03,00,000/- in respect of all 10 radio stations. It had made a security deposit of Rs. 68,94,331/- to the respondent No. 2 in respect of each radio stations in terms of GOPA and Rs.4,76,72,382/- towards licence fee for all 10 stations. It is the case of the petitioner that there was an issue of breach of contractual obligation by the respondent No. 1 in respect of petitioner's radio station at Shimla as the CTI facihty which was to be handed over on 20.04.2007 could be handed over only on 08.10.2009. It is its case that it had incurred huge costs on account of the delay. It had also denied its liability topay escalated costs as well as for delay in construction ofCTI in shimla. It had asked the respondent No. 1 to refund an amount of Rs.40,25,000/-. However, the respondent No. 1 has not refunded it till date. Even a request forNo-Objection Certificate has not been acceded to.

26. The respondent No. 1 demanded from the petitioner a payment of Rs.35,51,536/- towards CTI and Rs.45,59,504/- towards monitoring chaiges and interest on account of late payment ofmonitoring charges. The respondent No. 1 had also demanded an amount of Rs.14,57,671 towards electricity consumption for the month of November 2011 to Januai[7] 2012 for the 10 radio stations of the petitioner. The petitioner OMP 280/2012 &cnnnecledpetitions 2J of50 would refer to the policy regarding Phase III issued by MIB and would refer to the clauses with regard to the issuance of NOC, subject to clearance of all dues by the radio operators. The petitioner also referred to the understanding arrived at between the petitioner and the respondent NO. 1, adjusting the monitoring charges from the balance advance capital available with the respondent No. 1. The petitioner would submit that the refusal to give No-Objection Certificate is illegal.

27. Therespondent has filed its reply, taking various objections.

28. During hearing, Mr.Rajeev Sharma, has said that the total amount due from the petitioner is Rs. 77,86,632/- against monitoring charges under • clause 13.[2] ofGOPA, which payment has to be made to BECIL. Similarly, he would state that a further amount of Rs.35,51,536 as on December 31, 2014 is due for the Common Transmission Infrastmture provided by the BECIL. He would state, a total sum ofRs.1,13,38,168 is due.

29. Learned counsel for the petitioner would submit, an amount of Rs. 77 lakhs would be secured by way of a bank guarantee. He would dispute the payment of Rs. 35,51,536/- as there was a delay on the part of the BECIL to construct the CTI at Shimla. He would also state, the said amount would also be secured by way of a bank guarantee. It is his case that the petitioner is hard pressed for money in view ofvarious investments made by it. OMP 2S0/2012 c?: connectedpelitions Page 26 of50 u SUBMISSIONS;

30. Mr.Sandeep Sethi, learned counsel appearing for the petitioner in OMP No.280/2012 would submit that the petitioner operates, FM stations in 45 cities in the country and in that regard paid to the MIB fees ofRs.i60 crores as one time entiy fee and an amount of Rs.33 crores to BECIL and that apart making huge investments. The petitioner is not a fly by night opeiatoi, who would not honour, any award even ifcomes against it. He has drawn my attention to the e-mail dated February 4, 2015, received from BECIL along with an attachment, astatement showing outstanding payment of Rs.28,33,175/-, which has been paid by it. He would state, unfortunately, in the affidavit filed by the Respondent No.l, it had for the first time taken a plea that, the Tower rental, monitoring charges and Studio Transmission Linl<s charges are payable by the petitioners are not under the PMA. Such an objection has been taken after 3years, of the filing ofthe petition. He refers to letter dated November 21, 2011, writtenby the petitioner to BECIL to contend, that the, petitioner has genuine issues for which immediate attention of BECIL was sought like leconcihation of advances, interest, monitoring charges, CTI Chennai etc. With regard to Chennai, he would state the Tower in the city of Chennai was erected at Avadi, a small town in North West of Chennai, is inadequate teclmically as the height of the Tower constmcted is 130 OMP 280/2012 tt connectedpetitiojis Page 27 of50 6) meters, instead of 175, and thus, it is legitimate and prudent for the Respondent No.l to refund the entire advance amount paid to BECIL under the agreement. It was his endeavour, to argue that, the Respondent No.l does not dispute the genuine issues raised by the petitioner and the Court which considers an application under Section 9 of the Act, would have a prima facie view to decide whether a direction to the petitioner to pay is necessaiy. The amount now being claimed byBECIL is with regard to tower rental for the Tower in Chennai, and interest on delayed payment of tower rentals for the cities of Delhi, Chennai and Hyderabad, in addition to interest on STL outstanding, camiot be said to be dues unless adjudicated. He would refer to the agreement executed with Prasar Bharti on June 20, 2006 to contend, that it was for usage of infrastructure of Prasar Bharti to be collected by BECIL on behalf of Prasar Bharti with an Arbitration clause. He would also refer to PMA between the petitioner and BECIL and its various provisions. According to him, there is no dispute with regard to Monitoring charges under GOPA. In the end, it is his submission that the petitioner could not be called upon to discharge, a claim where there is no dispute.

31. On the other hand, Mr.Rajeev Sharma, learned counsel for the Respondent No. 1would state that the FM IIPolicy was framed in the year 2005, tinder which, out of 91 cities, in 84 cities, the operators could co- OMP 280/2012 &connectedpetitions Poge 28 of50 locate witl, the infrastructure of Prasar Bharti and for 7cities, referred to above, new Towers were erected by the BECIL on behalf of IVUB. The BECIL was only acoilecfing agency. Till such time the towers did not come up m these 7 cities, the operators were at hbeity to have an an-angement eitlier independently or at AIR/DD (PB) station. According to him, the agreement referred to by Mr.Sethi with Prasar Bhaiti was one such arrangement which the petitioner liad for Delhi. He would state that, the Tower rental is payable and this aspect has been conceded by the petitioner in its letter dated December 29, 2011, wherein in Para 7(a) the petitionerhad stated "itis submittedthat outofthe total amounts specified towards rentals only Rs.l,00,42,640/- is due andpayable". According to l"m, in fact, BECIL has constructed the Tower at Chemiai, in terms ofthe policy, the petitioner is bound to pay the rentals. Unfortunately, despite construction they have not co-located. He would also state that Mi-.Sethi has not answciod tiie objection talcen by the Respondent No.I. with regard to the arbiirabili.'y of the issues regarding Tower Rentals, and interest on Tower Rentals for the cities ofDelhi, Hyderabad and Chemiai, as there is no Arbiti-ation agreement between the parties. According to him. the petitioner has invoked the arbitration clause under PMA. The petition under Section 9is itselfnot maintainable. He has taken me tlirough the provisions ofthe PMA, to highlight, the scope ofthe agreement to submit OMP 280/2012 c[5] connectedpetitions Page 29 of50 construction oftower and payment of tower rent does not fiiid place in PMA. He would state that towers does not fall under Common Transmission Infrastructure. The petitioners were to execute an agreement with regard to tower rental. Unfortunately, they have not come forward to execute the same. He would refer to page 34 of the reply of respondent No.l, which is astatement showing tower rental status. According to him, vide letter dated April 08, 2009, the petitioner was called upon to pay the tower rental charges. Unfortunately, the same has not been paid. The claim ofrent is not arecent development. NOC can be given only ifthe dues are paid, which are to the tune ofRs.2,65,89,346/-.

32. Mr.K.Datta in rejoinder to the submissions made by Mr.Rajeev Sharma would submit that the respondent No.l had never taken the objection regarding arbitrability of the disputes. He would state, rather a statement was made on behalfofthe respondent No.2 that MIB is willing to appoint an Aititrator. In that regard, he draws my attention to the order dated June 01, 2012 and May 28, 2012 passed in the petition. In view of such astatement, it is not correct on the part ofrespondent No.l to contend that the issues/disputes are not arbitrable in the absence of an agreement/arbitration clause. He would reiterate the submission made by Mr.Sethi ]-egardmg inadequacy ofthe tower in Chennai, being ofalower height. So, the issue ofinadequacy ofinfrastructure is an issue which falls OMP 280/2012 &connectedpe/itions Page 30 of50 under the PMA and as such arbitrable. He referred to Annexure 1of the PMA. He would also state that as per Section 7(4)(c) of the. Act, an Arbitration Agreement is in writing, an exchange of statements of claim and defence, in which the existence of the agreement is alleged by one party and not denied by the other party. He refer to para 48-49 of the petition and coiTesponding para in reply in this regard. He also refers to the order of the Division Bench dated March 02, 2012 passed in W.P.(C) 1257/2012 filed by one of the petitioner in this batch of petitions i.e. Radio One Ltd', to contend that the Division Bench has said that remedy foi the petitioner is to initiate arbitration proceedings and seek interim direction therein. He has referred to Clause 5.[3] ofthe GOPA filed in OMP No.295/2012 to contend that GOPA recognizes the constmction of tower Unuugh BECIL. In the last it is his submission that without prejudice, the petitioner shall deposit the principal amount, excluding interest in this Court, pending decision by the Arbitrator, the NOC must be given to enable the petitioner to migrate; otherwise great hardship shall be caused to the petitioner. Out ofthe 45 stations, the dispute is with regard to only one. According to hrni, as the petitioner is operating at other places, there cannot be an appreJ^ension that the petitioner would not be able to discharge the liability if established against the petitioner. He has filed written submissions in OMP 273/2012. OMP 280/2012 &connecledpeHlions Page 3! of50 9'

33. Mj.Rajiv Nayyar, learned Senior Counsel who appeared for the petitioner in OMP 273/2012 adopted the arguments advanced in OMP 280/2012 by Mr.Sandeep Sethi/Mr.K.Datta. That apart he would point out the letter dated December 19, 2014 written by BECIL and January 19, 2015 written by the petitioner No.l, which provide justification for non payment of the dues by the petitioner. He would state, insofar as monitoring charges are concerned, the same shall be paid by the petitioner. He would also state, for the last so many years, the respondent has assured the petitioner during the hearings that the issue would be resolved or in the alternatively the matter would be referred to arbitration, but atthis point of time to say that the issue with regard to tower rentals is not arbitrable is unjustified. He says as per Section 7(4)(b) & (c), read with the statements made and avemients not denied by the respondent No.l, in its reply, the existence of an arbitration clause is admitted and in that regard he has drawn.my attention to para Nos.48 & 49 of the reply. According to him, without prejudice, the petitioner is ready to deposit the amount in the Court. He would rely on the judgment of the Supreme Court in BSNL & Ors. Vs. M/s. Siibhas Chandra,Kanchan andAnr., AIR 2006 SC3335

34. Mi-.Rajeev Sharma, learned counsel for the respondent No. 1would submit that the petitioner claim to have invoked clause 17.[1] of the PMA executed with BECIL. According to him, tower rental interest therein and OMP 280/2012 &connectedpetiHons Page 32 of50 monitoring charges do not fall within the ambit of the PMA and therefore, disputes are not covered under PMA. He would also state that, the reliance placed on Section 7(4)(b) and (c) of the Act is not tenable. For applicability of Section 7(4)(c), there has to be a specific averment which has not been denied. A bare reading of paragraph 48 shows that there is no specific averment regarding tower rental and monitoring charges. He relied upon the judgment of the Supreme Court in S.KPrasad Vs.Monnet Finance Ltd, and Ors., AIR 2011 SC 442, On Section 7(4)(b) of the Act, he would state, the letters must record the existence of an agreement. According to him, no such letters have been pointed out. He would also state that the tower/tower rentals are not part of PMA as is clear from Annexure I and III, which lists out the CTI. According to him, any jurisdictional issue needs to be pleaded by the petitioner and the Court also needs to consider such an issue while exercising jurisdiction. On the statement of the ASG, regarding willingness of the Govt. of India to appoint an Ai'bitrator as a proof of existence of an Arbitration clause, it is the submission, such submission needs to be rejected for the following reasons;

(i) MIB only nominates the Arbitrator;

(ii) The Secretaiy does not even have to see whether Arbitration

Agreement exists and whether the disputes are within the ambit of OMR 280/2012 &connectedpetitions Page 33 ofSO arbitration agreement;

(iii) The statement ofASG isnotindicative of any consent by BECIL.

He would, on the judgment of the Division Bench, states that, the DB did not go into the question as to what disputes are arbitrable and contains no adjudication on the said issue. In the last, he states, once policy has been upheld, it is not a case of an interim measure.

35. Mr. R.Gogna, learned CGSC for MIB states that even after the order dated 28.05.2012 was passed, when statement of learned Additional Solicitor General was recorded, the MIB has filed its reply in some of the petitions wherein, it has been aveiTed that since MIB is not a party to the PMA, and since there is no arbitration agreement between the petitioner and the answering respondent, the petition against MIB is not maintainable.

36. Mr.K.Datta in OMP No. 295/2012, apart from relying on the submissions made in other petitions would state that the petitioner would deposit in Court the amount claimed by therespondent No. 1.

37. Mr.Rajeev Sharma has referred to para No.4 & 5 of the affidavit which is already reproduced above to state, the petitioner is liable to pay the dues, and till such time, NOC cannot be issued.

38. The learned counsel for the petitioner in OMP No.291/2012, which OMP 280/2012 &connectedpetitions p^gg 3^ is filed piimarily against Prasar Bharti would submit that an invoice for the year 2014-15 has been raised by the Prasar Bharti for the usage of infrastructure i.e. tower, open space, common facilities. The petitioner is readyto pay 50% of the amount to the PrasarBharti.

39. Mr.Shaima on the other hand would submit that the petitioner is in arrears of Rs.1,02,82,583/- and hardship is not a ground to not pay the dues. Mr.Sharma also justifies, claim of Rs.1,13,38,168/- towards monitoring charges and CTI charges against the petitioner in OMP NO. 294/2012.

40. Having considered the submission made by the learned counsel for the parties, the foremost question which arises for consideration at least in OMP Nos. 280, 273- and 287 of 2012, is whether the petitions under Section 9ofthe Act per se are maintainable in view ofthe objection taken by the learned counsel for respondent No.l that the disputes regarding tower rental and interest thereon, is not covered by the PMA, the agreement which they invoked for the purpose offiling the petitions. From the pleadings, it is clear that the petitioners in the aforesaid OMPs did rely on the arbitration clause in PMA. It is to be seen whether PMA encompass mitself the issue related to tower rental to attract the arbitration clause. The clause 3.[1] of the PMA stipulates, BECIL providing project management sei^ices to build, install, commission and complete the OMP 280/2012 &connectedpetitions Page J[5] of50 Common Transmission Infrastructure and clause 5.[1] stipulates in consideration the operator shall pay to BECIL its share of actual net costs and fee @10% of its share of actual net costs. Suffice to state, as stated above, the CTI does not include tower construction or the rental to be paid for its usage. Rather Ifind, the petitioner in OMP No. 273/2012 in para 13 of the petition has admitted that the parties i.e. the operators and the BECIL were also required to enter into agreement for use oftower aperture and payment ofrent. It has also come on record in OMP No. 273/2012, in the reply ofthe respondent No.l, as per Annexure R[3], which is acopy of the minutes of meeting held between the officials of BECIL, AIR, Private FM Broadcasting Companies under the Chairmanship of JS(B) MIB wherein, in para 2.5, of the minutes, the following is recorded on operational date for tower rent fixation

2. J. Operational datefor tower rentfixation FM operators stated that they had signed agreements for tower rental at certain price in 2006. As per agreements, the tower rental is to escalate at certain rate per annum. The FM operators started using the tower in 2008 even though they signed the agreements in 2006.

BECIL is charging them the tower rental from 2006 However, the FM operators requested that the tower rental should be chargedfrom 2008, from the date ofactual use instead of2006, the date ofsigning the agreement". OMP 280/2012 &connectedpelitions

41. From the above, it is clear that without any doubt that the parties were required to execute a separate tower agreement, which would have governed the tower rentals. Mr.Rajeev Sharma may be right in his submission that despite being called upon to execute the agreements, the petitioners have not come forward. In any case, it is suffice to state that the issue/dispute of tower rentals is not governed by PMA and the invocation of PMA seeking relief under Section 9 is not tenable. To seek relief under Section 9, an existence of an arbitration agreement is necessary and in that regard Section 7 of the Act defines Arbitration Agreement to mean as under:-

7. Arbitration agreement. — (1) In this Part, "arbiti^ation agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect ofa defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in theform ofan arbitration clause in a contract or in the form of a separate agreement. (3) An arbitration agreementshall be in writing. (4) An arbitration agreement is in writing if it is contained, in— (a) a documentsigned bytheparties; OMP 280/2012 &connectedpetilions Page 37 of50 (b) an exchange of letters, telex, telegrams or other means oftelecommunication which provide a record of the agreement; or

(c) an exchange ofstatements ofclaim anddefence in which the existence ofthe agreement is alleged by one party and not denied by the other. (5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part ofthe contract.

42. Section 7 of the Act had come up.for interpretation before the Supreme Court in Travancore Devaswom Board Vs, Panchamy Pack (P) Ltd,, (2004) 13 see 510 wlierein the Supreme Court has in.paras 6,[7] and 8 held as under:- "6. We are unable to accede to any of the three submissions made by the respondent. The Arbitration Conciliation Act, 1996, clearly provides that the arbitration agreement must be an agreement which should be in writing (see Section 7(4)). In this case, there was no agreement atall, quite apartfrom thefact that there was no writing to this e.ffect. The High Court has not in the impugned order recorded any consent as has been contended by the OMP 280/2012 &connectedpetitions ' respondent. We are notprepared to act on any basis other than that expressed by the High Court itself.

7. The impugned order, therefore, cannot be sustained. In the absence of any agreement the Arbitrator could not have any jurisdiction. The participation of the appellant in the preliminary sittings before the Arbitrator would not make any difference. It is to be noted that under Section 7 Sub section (2), the ground challenging jurisdiction of the Arbitrator is required to be taken at the earliest and not later than the filing of the defence but a party shall not be precluded from raising such a plea merely because it has appointedorparticipated in the appointment ofan Arbitrator. The language of the Section, therefore, leaves no roomfor doubt that mere participation in the proceedings woidd not tantamount to an acceptance of the jurisdiction of the Arbitrator to arbitrate disputes between the parties.

8. The decision reported in Tamil Nadu Electricity Board case (supra) is dn allfours with the facts of the present case. This Court has clearly said in paragraph 2 ofthe decision:

OMP 280/2012 &connectedpetitions jp A[7] Constitution and then referred the matter to arbitration in violation ofthe provisions ofthe new Act. There was no arbitration agreement within the meaning ofSection 7 ofthe new Act. Under the new Act, award can be enforced as ifit is a decree ofa Court and yet the High Court passed a decree in terms of the award which is not warranted by the provisions of the new Act. The appellant had also raised the plea ofbar oflimitation as in many cases if suits had been filed, those would have been dismissed as having beenfiled beyond the period of limitation. In our opinion exercise ofjurisdiction by the High Court in entertaining the petitions was not proper and the High Court in any case could not haveproceeded to have the matter adjudicated by an arbitrator in violation of the provisions of the new Act."

43. Similarly, in SMPrasad (supra), the Supreme Court held that there can Ije aieference to arbitration only when there is an agreement between the parties. Ifthere is adispute between aparty, to an arbitration agreement with other parties as also non parties, the reference can be only with respect to the parties to the Ai'bitration agreement and not the non parties.

44. On the maintainability of Section 9 petition in the absence of an arbitration agreement, this Court in Ashok Kumar and Am. Vs. SBI OfficersAssociation andAm, 2013 XAD (Delhi) 512 has held as under:- OMP 280/2012 &conneciedpetitions

15. It IS well settled principle of law that the court seized ofan application under Section 9ofthe Act can form aprimafacie opinion on the preliminary aspects relating to arbitrability ofthe disputeprior to granting or refusing the interim measures under the saidsection. This is due to the reason that the court would proceed to consider the grant or non g,-ant ofthe interim measures only upon the satisfaction that there exists a valid arbitration clause covering the dispute raised b^ore the court. The said preliminary enquiry relating to arbitrability ofthe dispute is thejurisdictionalfact which enables the court to assumejurisdiction on the application andproceedto consider thesame on merit. Ifon the other hand, the dispute itselfdoes not fall within realm ofthe arbitration, then the court may straightawayproceed to., the application as the courtmay not be able exercise Itspowers under Section 9ofthe Act.

16. The position in law has been aptly described by the Supreme Court in the case of SBP &Co. v Patel EngineeringLtd & Anr [(2005) 8SCC 618] wherein the Apex Court has considered the powers of the court or judicial authority at great length when faced with a question as to whether thepower to appoint the arbitrator IS ajudicial power or administrative function. While answering the.,aid question, the Supreme Court also proceeded to observe that the court seized of the application underSection 9has thepower to examine the OMP 280/2012 connectedpeHlions Page 41 of50 /o>validity ofthe arbitration agreement and also to arrive at the finding whether the dispute is covered by the arbitration clause or not. Upon satisfaction of the preliminaryjurisdictionalfacts, the court can proceed to assume jurisdiction over the subject matter. In the words of the Supreme Court speaking through Hon'ble Balasubramaniyam for Majority (as his lordship then was), it was observed thus: "Similarly Section 9 enables a Court, obviously, as defined in the Act, when approached by aparty before the commencement ofan arbitralproceeding to grant interim, reliefas contemplated by the Section. When a party seeks an interim reliefasserting that there was a dispute liable to be arbitrated upon in terms of the Act, andthe opposite part)! disputes the existence ofan arbitration agreement as defined in the Act or raises a plea that the dispute involved was not covered by the arbitration clause, or that the Court which was approached had no jurisdiction to pass any order in term, of Section 9 of the Act, that Court has necessarily to decide whether it has jurisdiction, whether there is an arbitration agreement which is valid mlaw and whether the dispute sought to be raised is covered by that agreement. There is no indication in the Act that the powers ofthe Court are curtailed on these aspects. On the other hand. Section 9 insists that once approached in that behalf "the, OMP 280/2012 &connectedpetitions Page 42 of50 ) Court shall have the samepowerfor making orders as it has for the purpose of and in relation to any proceeding before it". Surdy, when a matter is entrusted,to a Civil Court in the ordinary hierarchy of Courts without anything more, the procedure of that Court would govern the adjudication. " (Emphasis Supplied)

45. Now it is to be seen, whatis the effect of the pleadings of the parties, more specifically, in para 48 and 49 of OMP 273/2012 and also the statement made by the learned ASG regarding appointment of an Arbitrator, on the dispute regarding tower rental. Whether the dispute regarding tower rental can at all be referred to arbitration.

46. I note, the petitioner in OMP 273/2012 in para 48 has stated "that due to the inaction and/orfailure and/or refusal by the respondent to act in accordance with the agreements in releasing thepayments to thepetitioner illegally withheld by it, releasing outstanding dues payable under the PMAs; delaying any issuance ofany clarifications on rentals and security charges for sights at Delhi and Chennai XQX", to which, the reply ofthe respondent BECIL is "it is denied that there is any inaction and/or failure and/or refusal by respondent to act in accordance with the agreements. It is denied that the respondent is liable topayany amount to the petitioner or there is any outstanding dues payable by it under the OMP 280/2012 connectedpetitions /oS project management agreement to thepetitioner. It is denied that there is any delay in issuance ofclarifications on rentals and the security charges for sites at Delhi and Chennai

47. To construe an averment made is an acceptance of a particular fact, it is necessaiy, that such averment must be specific and unambiguous and not by drawing an inference. To construe that the averments made above relates to tower rentals, the petitioners should have pleaded; the agreement in question (PMA) is in writing and deals with tower rentals and the said agreement contains arbitration clause for settlement of disputes with regard to tower rentals. In the absence of a specific and unambiguous stand in the petition, it cannot be construed that the respondent has accepted the existence of an arbitration agreement with regard to tower rentals. Moreover, any claim by the petitioner with regard to existence of an arbitration agreement qua tower rentals carmot be read in isolation overlooking a specific stand of the petitioner in para 13 of the petition, \vheiein, the petitioner has conceded that the parties were required to enter into agreements towards the use of CTI tower aperture at the cities of Chennai and Delhi and payment ofrent. Itcannot now, plead and contend that the averments in para 48-49 must be read to mean that it had taken a stand that the tower rentals are covered by PMA.

48. With regard to the statement made by the learned ASG during the OMP 280/20J[2] t?: connectedpelitions hearing on May 28, 2012, it is noted, the same has to be read in the context that Union of India is willing to appoint an Arbitrator in terms of the Arbitration clause (emphasis supplied). Suffice to state, with regard to tower rentals, neither there was an agreement nor any arbitration clause. The statement, can be read with regard to the disputes related to the agreements executed between the parties i.e. PMA. It is also the case of MIB during the submissions that after the hearing, dated May 28, 2012, it has pleaded in its reply that in the absence of MIB being a party to the arbitration agreement, the same is not binding on it.

49. Insofar as the judgment on which reliance was placed by Mr.Rajiv Nayar, in the case of BSNL and Ors. (supra) is concerned, the Supreme Court was considering a case wherein, existence of an arbitration agreement is not disputed. Rather, clause 25 was an arbitration clause, in terms of which, the Arbitrator was to be appointed by the Managing Director of the appellant company. While hearing an application under Section 11(6) of the Act, no objection was given by the counsel for the appointment of Mr.B.C.Bhattarcharya as an Arbitrator. The said statement was sought to be resiled from by the learned counsel for the appellant, which was not agreed to,by the High Court and in the said background, the Supreme Court held, such a statement, cannot beresiled OMP 230/2012 & connectedpetitions Page 45 of50 from in view of the provisions of Order III Rule 1 of the Code of Civil Procedure. The facts of the present case are different inasmuch as there is no arbitration agreement in this case on tower rentals, the judgment would not help the petitioner's case. Further, the order of the Division Bench in W.P.(C) 1257/2012 dated March 2, 2012 would also not help the case ofthe petitioners.

50. From the above, I note the disputes/differences between the parties primarily are as below: Petition No. Nature of dues Payable under OMP 280/2012 (1) Tower rental; Cliennai (2) Interest on tov\'er rental for the city ofDelhi, Hyderabad And Chennai (3) Interest on STLoutstandings No agreement for (1) and (2) (3) GOPA OMP 273/2012 (1) Tower rental for the towers at Chennai and Delhi with interest (2) Monitoring charges for 7 cities (1)No agreement (2) GOPA OMP 287/2012 (1).Tower rental at Chennai with Interest (2) Monitoring charges for 7 Cities (1) No agreement (2) GOPA OMP 295/2012 (1) Monitoring charges in Respect of 8 cities (2) CTI outstandings (1) GOPA (2) PMA OMP 291/2012 Tower, open space, common Facilities Agreement with Prasar Bharti OMP 294/2012 (1) Monitoring charges (2) CTI charges (1) GOPA (2) PMA

51. The petitioners in the present petitions have primarily invoked PMA. The disputes under PMA are primarily CTI charges. In OMP 280/2012, OMP 273/2012 and OMP 287/2012, tower rentals have also been claimed, for which, there is no agi'eement. In the absence of an agreement for referring the disputes relating to tower rentals, a petition OMP 280/2012 &connectedpetitions p^gg gj-^g under Section 9ofthe Act would not be mamtainable nor adirection as soughtfor by the petitioners for issuanceofNOC can be granted. These petitions are accordingly dismissed.

52. Insofar as OMP Nos. 295/2012, 291/2012 and 294/2012, are concerned, they primai-ily relate to monitoring charges, CTI cirarges, charges for common facilities etc. under GOPA/PMA/agreement with PrasarBharti. In OMP 295/2012, the petitioner has only invoked clause 17.[1] ofthe PMA and not tlie corresponding clause in GOPA. Insofar as OMP Nos. 291/2012 and 294/2012 are concerned, the petitioner has not invoked the relevant arbitration clause till date even though three years have elapsed since the filing ofthe petitions. This itselfcan be aground to dismiss these petitions under Section 9in view ofthe pronouncement ofthe judgment oftlie Supreme Court in Sundanm Finance Ltd. Vs. mPC India Ltd., (1999) 2SC 479 wherein, the Supreme Court has stated, that, when an application under Section 9of the Act is filed before the commencement of the aibitral proceedings, there has to be a manifest intention on the pai't of the applicant to take recourse to the arbitral proceedings. Absence of Invocation does not reveal the manifest intention on the part of the petitioner to take recourse to the arbitral proceedings. Apossible argument of the petitioners on this OMP 280/2012 & connected petitions • could be, it was under the bona fide beliefofthe matters getting settled.

53. It is true, as seen from the order sheets, the petitions also got adjourned on the ground ofsettlement. It is also noted, that the last date ofmigration to Phase III also got extended. Possibility ofthe petitioners being under the bona fide belief that matters would be settled, and as such, no steps were taken to invoke arbitration clauses, cannot be ruled out, but, the larger question would be whether they have made out a prima facie case, for grant of interim measure. The answer is in the negative, for more than one reason; the amount sought to be recoveied by BECIL/Prasar Bharti has a contracttial basis, in GOPA/PMA/Agreement in the case of Prasar Bharti; the agreements have been executed as per the policy enunciated by the MIB; the demand made is not speculative. I note from the respective stand ofthe parties, they are justifying/contesting the demand. The differences need to be decided, through the process ofarbitration contemplated under the agreements, that cannot be areason, not to pay the dues as demanded for the purpose ofNOC, in terms ofthe policy dated July 25, 2011, which provision has been upheld by the Division Bench of this Court in W.P.(C) 1257/2012. Even though, the petitioners have offered to give bank guarantees as security/pay some ofthe amount, this Court is ofthe OMP 280/2012 &connectedpelUioiis 48 of50 N- •^9 view, the only orderthat can be passed, keeping in view the facts is that, insofar as OMP No. 295/2012 is concerned, the petitioner shall deposit the entire amount as claimed from it with BECIL within 10 days from today. On deposit of the said amount, the BECIL, shall issue NOC to the petitioner within two days. Simultaneously, the petitioner shall also invoke the arbitration clause under GOPA. The BECIL shall keep the amount so deposited by the petitioner in an interest bearing FDR(s) till the culmination of the arbitration proceedings by the Arbitrator, to be appointed by this Court in the petition filed by the petitioner under Section 11(6) of the Act and pursuant to invocation of GOPA in terms of this order, so that the interest amount is enured to the successful party. Suffice to state, the deposit of the amount is subject to the orders to be passed in Arbitral proceedings.

54. Similarly, insofar as OMP Nos. 291/2012 and 294/2012 are concerned, the petitioner shall deposit the entire amount claimed from it with BECIL/Prasar Bharti within 10 days. On deposit of the said amount, the BECIL/Prasar Bharti shall issue NOC to the petitioner within two days. Simultaneously, the petitioner shall also invoke the arbitration clause for appointment of an Arbitrator within 10 days from today. The BECIL/Prasar Bharti shall keep the amount so deposited by OMP280/2012 & connectedpelilions Page 49 of50 /V the petitioner in an interest bearing FDR(s) till the cuhnmation of the arbitration proceedings by the Arbitrator(s), so that the interest is enured to the successful party. Suffice to state, the deposit of the amount is subject to the orders to be passed in arbitral proceedings.

55. The conclusion is, OMP Nos. 273/2012, 280/2012 and 287/2012 are dismissed.

56. OMP Nos. 291/2012, 294/2012 and 295/2012 are disposed of in terms of the directions in para 53 & 54 ofthis judgment.

MARCH 10, 2015 akb I 'f- O'- !. • JUDGE •,.»N OhdP 280/2012 connectedpetitions ^0of50