declare the action of the respondents, in compelling Cable T.V. subscribers to purchase set top boxes (STB for short) and in threatening cable operators not to carry on the existing analog form of transmission with effect from the dates mentioned in the notification, as unlawful and in violation of Articles 14, 19 and 21 of the Constitution of India; and to consequently direct the respondents not to stop transmission of T.V. channel signals in analog form, and to implement the digital addressable system transmission along with analog form.= Viewed from any angle, the impugned notice issued by the Government of India dated 22.12.2016, prohibiting transmission of signals in an analog form in phase III areas beyond the sunset date of 31.01.2017, does not fall foul of Section 4-A(1) of the 1995 Act as amended by Act 21 of 2011.

2017 AP HIGH COURT – http://judis.nic.in/Judis_Andhra/list_new2.asp?FileName=14107

HONBLE THE ACTING CHIEF JUSTICE RAMESH RANGANATHAN AND HONBLEDr. JUSTICE SHAMEEM AKTHER

WP.PIL 6 OF 2017

01-06-2017

Citizens Welfare Society.Petitioner

Union of India, rep., by its Secretary, Ministry of Information and Broadcasting, Shastry Bhavan, New Delhi and two others

Counsel for the petitioner:Sri C. Ramachandra Raju

Counsel for respondents: Sri B. Narayana Reddy, learned Assistant Solicitor General, Sri S. Niranjan Reddy, learned Senior C

<GIST:

> HEAD NOTE:

? Citations:

1) (2012) 3 SCC 1
2) (Order in Writ Petition Civil No.170 of 2013 dated 12.04.2013)
3) (Judgment in PIL Nos.140 of 2013 and batch dated 02.08.2013)
4) (1987) 3 SCC 279
5) (2009) 8 SCC 431 : (2009) 2 SCC (L&S) 441
6) (1981) 4 SCC 173
7) (1988) 1 SCC 507
8) (1988) 2 SCC 299
9) (2001) 4 SCC 534
10) (1997) 8 SCC 522
11) (1985) 1 SCC 1
12) (2003) 1 SCC 692
13) AIR 1952 SC 369
14) (1964) 1 SCR 371 : AIR 1963 SC 1241
15) (1954) SCR 587
16) (1955) 2 SCR 374
17) (1955) 2 SCR 1196
18) AIR 1957 SC 832
19) AIR 1962 SC 1781 : (1963) 1 Cri LJ 1
20) AIR 1960 SC 12
21) (1826) 162 ER 456
22) JT 2001 (1) SC 536
23) (1569) 1 Plowd 353
24) (1957) 1 All ER 49
25) (2008) 4 SCC 300
26) (2001) 3 SCC 537
27) (1996) 1 SCC 642
28) (2008) 3 SCC 279
29) (2008) 5 SCC 257
30) (2008) 7 SCC 502
31) (2008) 8 SCC 505
32) (2009) 16 SCC 569
33) AIR 1991 SC855
34) (1985) 2 All.ER 355
35) (1998) 3 SCC 309
36) (2002) 6 SCC 269
37) 2004 (7) SCALE 158
38) (2005) 2 SCC 271
39) (1985) 1 SCC 591
40) (1973) 1 SCC 216
41) (2007) EWHC 3134 (Ch)
42) (1973) AC 854
43) (2004) 1 SCC 702
44) (2001) 7 SCC 358
45) (2007) 6 SCC 81
46) (1955) 2 SCR 603
47) (1996) 4 SCC 76
48) AIR 2001 SC 2603
49) (1898) AC 571, 576(HL)
50) (1898) 2 Ch. 28 (CA)
51) (1989) 1 SCC 760
52) AIR 2004 SC 1426 = (2004) 1 SCC 755
53) (2003) 4 SCC 305
54) (1999) 9 SCC 700 = AIR 1999 SC 1867
55) AIR 1956 SC 35 = (1955) 2 SCR 842
56) (2001) 5 SCC 175 = AIR 2001 SC 1832
57) AIR 1981 SC 711
58) (1988) 2 SCC 351
59) (Order in W.P NOs.31138 AND 31974 OF 2012, dated 31-12-2014)
60) (1961) 2 SCR 679 at page 702: (AIR 1961 SC 751

 

THE HONBLE THE ACTING CHIEF JUSTICE RAMESH RANGANATHAN
AND
THE HONBLE DR JUSTICE SHAMEEM AKTHER

WRIT PETITION (PIL) NO.6 OF 2017

ORDER: {Per the Honble the Acting Chief Justice Ramesh Ranganathan}
This Writ Petition is filed in public interest by the Citizens
Welfare Society, Durgabai Deshmukh Colony, Bagh Amberpet,
Hyderabad, represented by its General Secretary, to declare the
action of the respondents, in compelling Cable T.V. subscribers to
purchase set top boxes (STB for short) and in threatening cable
operators not to carry on the existing analog form of transmission
with effect from the dates mentioned in the notification, as
unlawful and in violation of Articles 14, 19 and 21 of the
Constitution of India; and to consequently direct the respondents
not to stop transmission of T.V. channel signals in analog form,
and to implement the digital addressable system transmission
along with analog form.
Facts, to the extent necessary, are that hitherto broadcasters
of TV channels were transmitting their programmes in analog form
i.e. a natural form of signals; subsequently, an artificial mode of
transmission of TV signals called the digital addressable system
(DAS for short) was introduced; under the DAS method, signals
of T.V. channels are transmitted in an encrypted form (defaced
form) which is then decrypted by the STB attached to the T.V. sets
at the subscribers residence since the signals, transmitted through
DAS, cannot be received directly by the Television sets. While
transmission of signals in an analog form does not require an STB,
signals transmitted through DAS require an STB for the signals to
reach the T.V. sets. STB is required only by those subscribers
with cable connections who seek to view a larger number of
channels under DAS. A set top box is not required for cable
subscribers who are satisfied with the limited number of T.V.
channels made available to them by local cable T.V. operators
through the analog form of signals. The object of DAS is to
facilitate transmission of a larger number of channels, within a
lesser band width, to overcome the shortcomings in the analog
form of signals. Parliament introduced DAS which enables
subscribers to receive hundreds of T.V. channels unlike in the
analog form. The Cable Television Networks (Regulation) Act, 1995
(the 1995 Act for short), was amended by Act 21 of 2011 with
effect from 25.10.2011. The Central Government issued notification
dated 11.11.2011 directing all cable operators to introduce DAS
within a specified time frame, which period was extended from time
to time. Under Phase-III, the time limit was extended upto
31.01.2017 and, under Phase-IV upto 31.03.2017.
It is the case of the petitioner that, consequent on
amendment of Section 4A of the 1995 Act, every cable operator is
obligated to adopt the DAS method along with the existing
transmission system in an analog form; while maintaining
transmission through DAS is obligatory, Section 4-A of the 1995
Act does not disable Cable T.V. Operators from transmitting signals
in an analog form, in addition to transmission of signals through
DAS; this amendment of Section 4-A is intended to facilitate both
analog and DAS subscribers; while the areas, within the limits of
the Hyderabad Municipal Corporation, fall under Phase-II, the
areas located beyond the erstwhile Hyderabad Municipal
Corporation limits, but which are now brought within the limits of
the Greater Hyderabad Municipal Corporation, fall under Phase-III;
while matters stood thus, a notice was issued by the first
respondent on 22.12.2016 informing all Chief Secretaries that, on
account of the on going Court proceedings, it was decided that
broadcasters, Multi-System Operators (MSOs for short), Local
Cable Operators (LSOs for short) would be allowed further time
upto 31.01.2017, after which no analog signal shall be carried in
Phase-III areas, and no further extension shall be given. It is this
notice dated 22.12.2016 which is subjected to challenge in this
Writ Petition.
When the matter came up before us on 24.01.2017, Sri B.
Narayana Reddy, Learned Assistant Solicitor General, sought time
to obtain instructions. When the matter was listed thereafter on
31.01.2017, a counter-affidavit was filed by the Under Secretary,
Ministry of Information & Broadcasting, Government of India, New
Delhi, on behalf of the first respondent. In the said counter
affidavit, it is stated that, in the exercise of the powers conferred
under Section 4-A of the 1995 Act as amended by the 2011 Act, the
Central Government issued gazette notification dated 11.11.2011
notifying that it is obligatory for every cable operator to transmit or
re-transmit programmes of any channel in an encrypted form
through DAS in such city, town or area as specified in the said
notification with effect from the dates mentioned in the
notification; the time schedule, to implement DAS across the
country in a phased manner, was modified from time to time in
public interest; due to Court cases, the time period to switch over
to DAS in Phase-III areas was extended till 31.01.2017, and the cut
off date for Phase IV was extended till 31.03.2017; the validity of
the notification dated 11.09.2014, whereby the cut-off date for
Phase-III of Cable TV digitalisation was fixed as 31.12.2015 and
that of Phase-IV was fixed as 31.12.2016, was challenged before
different High Courts by some associations of MSOs, Associations
of Cable Operators, companies and individuals engaged in the
business of providing Cable TV network; the relief sought for was
to declare the notification dated 11.09.2014 as unenforceable and
prejudicial to pubic interest, to direct the Union of India to
maintain status quo regarding switch over from the existing analog
system of Cable TV Transmission to DAS until full implementation
of DAS which was subject to availability of STBs for all existing
consumers of Cable TV services, extension of the cut off date
stipulated in the notification dated 11.09.2014 for implementation
of DAS in Phase-III areas till sufficient STBs were made available in
the local market, not to take any coercive measures against the
petitioners for non-compliance of the notification dated
11.09.2014, and to declare that the respondents are bound to
ensure availability of STBs in the local market before enforcing
DAS. It is further stated that, in view of multiple Writ Petitions
being filed before various High Courts involving similar legal
questions, and as different orders were being passed by various
Courts staying the sunset date of implementation of Phase-III of
DAS, a Transfer Petition was filed before the Supreme Court by the
Union of India seeking transfer, of all the Writ Petitions pending
before different High Courts, either to the Supreme Court or to the
Delhi High Court; the said Transfer Petition was allowed by the
Supreme Court by its order dated 01.04.2016 withdrawing all
cases pending before different High Courts, and transferring them
to the Delhi High Court; the Supreme Court further observed that,
in future, if any case on the same legal question was filed before
the High Courts, such cases should also be transferred to the Delhi
High Court; accordingly, all the Writ Petitions were transferred to
the Delhi High Court for further hearing; all these cases, except
three, have been subsequently disposed of by the Delhi High Court;
and even in the pending cases, no interim orders are subsisting,
and the cases are listed for hearing.
On the merits of the petitioners claim, it is stated in the
counter-affidavit that the decision to implement the new telecast
system i.e. DAS is a policy decision taken by the Government of
India on the basis of the recommendations of the Telecom
Regulatory Authority of India (TRAI for short), which is an expert
body; all the stakeholders are duly consulted by TRAI; policy
decisions are the outcome of deliberations of technical experts in
the field; Courts are not well-equipped in these areas, and would
leave such matters to the discretion of the executive; and it is only
if the policy decision is contrary to any statutory provision or is
discriminatory/arbitrary or is based on irrelevant considerations
would interference be justified. Reliance is placed on Centre for
Public Interest Litigation v. Union of India in this regard.
The counter affidavit then proceeds to highlight the
drawbacks in the existing regime of analog cable television. It is the
case of the Union of India that analog cable television was afflicted
with inherent drawbacks; as against the existing 800 permitted
satellite TV channels, the analog system is able to carry only 70 to
80 channels; this severely restricts the subscribers choice, and
denies them a large canvas of channels available in the
broadcasting universe; the limited carrying capacity of the analog
system brings about a distortion in the business of television
distribution, as the broadcaster is forced to incentivise cable
operators to carry their channels by paying a huge amount of
carriage fee or placement fee etc; analog cable does not have the
technological features of facilitating a-la-carte (individual) selection
of channels; this compels the customer to go in for the bouquet of
channels devised by the cable operator on his own accord,
restricting the say of customers in the selection of channels; the
analog regime is not customer friendly; the analog services lack
transparency as subscribers base is not accurately maintained and
reported; this has led to under reporting of subscription revenue,
and the consequent concealment of tax revenues; a limited carrying
capacities and lack of transparency distorts the business model for
the broadcasters; increases their dependence on advertisement
revenues, and restricts the scope for subscription revenues (65:35);
for higher TRP ratings, the channels often sensationalize content
on television; the quality of picture on analog cable depends on
whether a channel is carried in the Prime Band or in the non-
Prime Band; Prime Band can only accommodate a few channels;
cable operators are facing severe competition from Direct to Home
(DTH) and Internet Protocol Television (IPTV) services which are in
a position to provide high quality content and value added services;
unless the cable service providers upgrade their services, they will
lose their business to new platforms; and an effective Consumer
Grievance Redressal Mechanism does not exist.
On the need for reform, the counter affidavit states that the
drawbacks in the existing analog regime necessitated a transparent
system being ushered in to cater to the interests of the consumers;
this reform is what DAS aims at; addressability means that the
signals of cable operators will be encrypted and can only be
received through an STB after due authorization from the service
provider; this would enable identification and maintenance of a
data base for each subscriber; and this would also bring in
transparency and prevent piracy while also enabling better revenue
realisation.
The counter affidavit details the key advantages of DAS to
various stakeholders. The consumers would be empowered to
exercise a-la-carte selection to allow individual channel selection; it
would make available improved quality of content, and access to
various value added and interactive services like Electronic
Programme Guide, Movie-on-Demand, Video-on-Demand, Personal
Video recorders enabling recording and viewing at convenience,
Gaming and enhanced viewing experience; this would enable cable
operators to compete effectively with DTH services; transparency in
subscriber base would result in realistic generation of subscription
revenue, and address the issues of tax evasion; in the digitalisation
of Cable TV, it is mandatory for every MSO and his cable operator
to have a grievance redressal mechanism wherein a toll free
number, web based system for logging and tracking the status of
complaints, and notification of nodal officers are mandated; no
such system existed in the analog regime; complaints can thus be
addressed effectively in the digital system; a time line for redressal
of grievances of consumers in a time-bound fashion has been
specified by TRAI; and Broadband penetration in India will also
increase through digitalisation of cable TV services, as Broadband
can also be provided to consumers by MSOs/LCOs, on the
digitalisation of the digital Cable Network, after obtaining the
requisite license from the concerned authorities. Reliance is placed
on the judgment of the Supreme Court in Lalit Kumar v. Union of
India to contend that the decision to implement DAS, and phasing
out the traditional analog regime, are policy decisions taken by the
Central Government after consulting all stakeholders and by
following due process.
Reference is thereafter made, in the counter-affidavit, to
several cases filed challenging Phase-II of cable TV digitalisation,
and it is stated that Phase-I of digitalisation was completed by
31.10.2012 and, out of the four metro cities planned to be
digitalised, digitalisation has been completed in Delhi, Mumbai
and Kolkata; it could not be completed in Chennai because of a few
pending Court cases; Phase-II was concluded by 31.03.2013 in 38
cities spanning across 14 States and one Union Territory; and, out
of the 38 cities, the switch over is complete in all cities except in
Coimbatore because of pending Court cases.
The counter affidavit then details the initiatives taken by the
Ministry for implementation of Phase-III and Phase-IV of Cable TV
digitalisation, and refers to a Task Force having been constituted
comprising representatives from various stakeholders including
TRAI, Broadcasters, MSOs, LCOs, Nodal Officers from the States,
consumer organizations, STBs manufacturers and DTH Operators
etc., to oversee and monitor the digitalisation process in Phase-III.
Reference is also made to the publicity campaign initiated in
electronic, print and social media, and by SMS, to apprise
consumers of the benefits of digitalisation, and about the cut-off
date; all the State/UT Governments were requested to nominate
State Level and District Level Nodal Officers; and four workshops of
State Level Nodal Officers were held in different cities.
The counter affidavit, thereafter, states that sufficient time
was allowed for digitalisation of Phase-III; the estimated
requirement for Phase-III areas, as per the seeding date provided by
the registered MSOs, DTH and HITS Operators, have been fully
met; the revenues of the State Governments has increased; cable
TV digitalisation has brought in greater transparency;
entertainment tax collection from eleven states indicate that ET
collection increased from Rs.184 crores in 2012-13 to Rs.448
crores in 2015-16; there are reports of security threats due to TV
contents which can incite communal and terrorist violence; this is
because of carriage of unapproved Satellite Channels by MSOs and
LCOs; in the digital system all channels are encrypted before
transmission on to the cable network; the encryption is carried out
by MSOs, and the LCOs cannot insert any channel; it is practically
impossible to transmit unapproved channels on the cable network
in the digital system; the inter-connect agreements have been
finalised by giving sufficient time to all stakeholders to be prepared
for digitalisation, and any postponement at this juncture or
allowing the petitioner to continue transmitting analog signals
would derail the whole exercise, and defeat the very purpose of
Mission Digitalisation; the cut-off date of digitalisation cannot be
deferred as it may dampen the momentum built so far; this would
also severely affect the overall growth of the sector, and would be
against the public interest at large; it would also dis-incentivise the
stakeholders who have invested a huge sum of capital for diligently
implementing the digitisation programme of the Government; and
it is for this reason that the Delhi High Court had dismissed all the
Writ Petitions.
The counter affidavit further states that, in view of the
recommendations of TRAI, the Union Cabinet, in its meeting held
on 13.10.2010, approved the Ministrys proposal for mandatory
introduction of DAS in the cable TV services which, inter alia,
covers a time-frame and a road map for implementation of
digitalisation with addressability on a pan India basis in cable TV
services leading to a complete switch off of analog TV services by
31.12.2014; the Cabinet also approved certain amendments to the
1995 Act by the 2011 Amendment Act; the encrypted signal can
only be received through a Set Top Box (STB) after due
authorization from the service provider; this would enable
identification and maintenance of a data base for each subscriber,
bring in transparency, and prevent piracy, while enabling better
revenue realisation; therefore, the set top boxes are essential for
digitisation of Cable TV services; DAS is being implemented as per
the amended provisions of the 1995 Act; the decision to implement
DAS is a policy decision taken by the Government of India on the
recommendations of TRAI which is an expert body; all the
stakeholders have been duly consulted by TRAI before making
recommendations; the matter has also been examined by various
High Courts and the Supreme Court, and no lacuna has been
found in the notified policy to digitise Cable TV networks; and the
decision, on implementation of DAS in cable services, has been
taken in larger public interest.
The counter affidavit thereafter lists in detail the problems
and difficulties which analog form of transmission suffers from
which includes limited number of channels being made available,
and restraint on choice of the subscriber denying him a large
canvas of channels available in the broadcasting universe; the
limited carrying capacity of the analog system brings about a
distortion in the business of television distribution, as the
broadcaster is forced to incentivise cable operators for carrying
their channels by paying carriage fees or placement fee etc; analog
cables do not have the technological features of facilitating a-la-
carte (individual) selection of channels compelling the customers to
go by the bouquet of channels made available by the cable operator
on his own accord, restricting the say of customer in selection of
channels; lack of transparency as the subscriber base is not
accurately maintained and reported, which leads to under
reporting of subscription revenue, and consequent concealment of
tax revenues; limited carrying capacity of the analog system, and
lack of transparency distorts the business model for the
broadcasters; it increases their dependence on advertisement
revenues, and restricts the scope for increased generation of
subscription revenues (65:35); channels often sensationalize the
content on television for higher TRP ratings; lack of an effective
Consumer Grievance Redressal Mechanism; and inability to
provide high quality content, value added services and internet
connection service.
After narrating the difficulties in the analog system, it is
stated in the counter-affidavit that the first respondent introduced
DAS in cable TV services in 2007 which was implemented in a
phased manner; Phases I to III have already been completed;
instructions have been issued by the Ministry to all the
stakeholders i.e., Broadcasters, MSOs and LCOs, and consumers
have been given sufficient time in this regard; as per the amended
Rule 13(2) of the Cable Television Network Rules, 1994 (the Rules
for short), STBs are to be procured, supplied and installed by
MSOs; TRAI has mandated that every MSO/LCO has to offer the
scheme of outright purchase, rental or instalment basis for
providing STBs; it is mandatory for all operators to stop
transmission of analog signals after the cut-off date, failing which
the authorized officer would seize the equipment in terms of
Section 11 of the 1995 Act; TRAI had issued regulations to enable
subscribers to subscribe only to those channel which he or she
wants to see; and the object of DAS is only to facilitate
transmission of more number of channels, within a lesser band
width, to overcome shortcomings in the analog form of signals,
including bringing transparency which is missing in the analog
system.
The counter affidavit concludes with a prayer that the Writ
Petition be transferred to the Delhi High Court as per the order of
the Supreme Court in Transfer Petition No.430-444/2016 dated
01.04.2016, or that it be heard along with the three pending Writ
Petitions wherein the validity of Section 4-A of the 1995 Act are
under challenge, or to dismiss the Writ Petition.
While several applications have been filed, on behalf of the
Broadcasters by Star India Private Limited, the Association of
Indian Broadcasting Foundation and Association of Broadcasting,
the All India Digital Federation (an Association of Multi-system
Operators) and a local cable operator, to implead them as
respondents in the Writ Petition, Sri C. Ramachandra Raju,
learned counsel for the petitioner, has objected to these implead
applications being ordered, contending that the proposed
respondents are merely meddlesome interlopers, and should not
therefore be heard. He also sought time to file a counter affidavit in
all these implead applications.
While we have not ordered the implead applications as Sri C.
Ramachandra Raju, learned counsel for the petitioner, sought time
to file counter affidavits thereto, we heard Sri B. Narayana Reddy,
learned Assistant Solicitor General, Sri S. Niranjan Reddy, learned
Senior Counsel appearing on behalf of Star India Private Ltd, Sri
Abhishek Malhotra, Sri Rijul Taneja and Sri S. Rahul for the
Association of Broadcasters, Sri A. Tulsiraj Gokul, learned counsel
appearing on behalf of the MSOs and Sri M. Govind Reddy, learned
counsel appearing on behalf of the LCOs, as the issues raised in
this Writ Petition are of considerable public importance. The
elaborate submissions put forth by Learned Senior counsel and
Learned Counsel on either side shall, for convenience sake, be
examined under different heads.

I. SHOULD THIS WRIT PETITION BE TRANSFERRED TO THE
DELHI HIGH COURT

Sri B. Narayana Reddy, Learned Assistant Solicitor General
appearing on behalf of the first respondent, would submit that the
petitioner has, in effect, challenged the notifications issued by the
Government of India; while the prayer may have been couched in a
slightly different form, it is in effect not to implement the
notifications; the relief sought for in the Writ Petition squarely falls
within the order of the Supreme Court; and this Writ Petition
should also be transferred to the Delhi High Court.
Sri C. Ramachandra Raju, Learned Counsel for the
petitioner, would submit that the petitioner has not questioned
either the validity of the amended Section 4-A of the 1995 Act or
the notifications issued by the Government of India dated
11.11.2011, 11.09.2014 etc directing Broadcasters, MSOs and
LCOs to carry encrypted signals in Phase-III areas; neither Section
4-A(1) of the 1995 Act, nor the notifications issued by the
Government of India thereunder, prohibit transmission of signals
in the analog mode; the notice dated 22.12.2016, which prohibits
such transmission, is contrary both to Section 4-A(1) of the 1995
Act, and to the notifications issued by the Government of India in
this regard; the grievance of the petitioner is only that both the
Union and the State executive are doing something impermissible
under the law; they are seeking to prohibit something, which has
not been prohibited by Parliament, as Section 4-A only obligates all
cable operators to introduce DAS, and does not prohibit
transmission of analog signals along with DAS; the present Writ
Petition was instituted more than a couple of years after the order
of the Supreme Court; the question raised in the present Writ
Petition was not raised in any of the earlier Writ Petitions, which
were transferred to the Delhi High Court by the Supreme Court;
while directing that, even future cases should be transferred to the
Delhi High Court, the Supreme Court made it clear that it is only
cases in which similar legal issues arise for consideration which
should be transferred; the Supreme Court subsequently clarified
on 24.10.2016 that its order for transfer of cases to the Delhi High
Court pertained only to the notifications dated 11.11.2011 and
11.09.2014 under the 1995 Act as amended by the 2011 Act; what
is under challenge in this Writ Petition is the notice issued by the
Government of India on 22.12.2016; it is not as if every case filed
anywhere in India was transferred to the Delhi High Court; the
counter-affidavit, filed by the first respondent, itself discloses that
certain cases, pending in the Madras High Court, have not been
transferred to the Delhi High Court; the Writ Petitions before the
Delhi High Court were dismissed mainly on the ground that these
were all matters of policy; in a few cases, time was granted in view
of non-availability of set top boxes; and the question whether
Section 4-A(1) prohibited analog transmission, in addition to
transmission through the digital addressable system, was not in
issue before the Delhi High Court. He would refer to the letter of
the Ministry of Information and Broad casting dated 01.02.2007,
which refers to the cases pending before the Madras High Court in
this regard.
The object of introduction of DAS, and the obligation of a
subscriber to have a set top box to view channels transmitted in an
encrypted form, fell for consideration in Chalasani Narendra
Varaprasad v. Union of India ), and a Division bench of this Court
held:-
The High Court of Bombay while considering WP.No.2610 of 2012,
by the judgment of the Division Bench dated 31.10.2012, rejected the challenge
to the notification dated 21.06.2012 made at the instance of the MSO. It was held
that the Union Government has provided sufficient time for compliance to ensure
that no hardship is caused to any consumer as sufficient quantity of STBs were
made available. It was also observed that A certain degree of inconvenience is
inevitable in the enforcement of any deadline. The new regime, which has been
put into place by the Union Government is with a view to provide quality service
to consumers. The individual business hardship that is faced by a business
operator must necessarily give way to public interest Similarly, the Karnataka
High Court while disposing of WP.Nos.14946 14954/2013 and batch dated
16.04.2013 held at para 38 as under: 38. It is also clear from the materials on
record that respondent Nos.1 to 3 have periodically issued several directions,
guidelines and frameworks to effectively implement digitalization. Respondent
Nos.1 to 3 have framed Regulations to govern the tariff regime by specifically
stating the price and the formula for sharing the same between the MSO and
LCO. The broad terms of the interconnect link agreements have also been
specified and the MSO and the LCOI are mandated to abide by it. It is to be
noticed here that these writ petitions are not filed by the viewing public. In so far
as STBs are concerned, it has to vary in accordance with the quality, features
and the make. The MSOs do not have any control over the prices and the same
is determined by the market forces. The respondents have placed materials
before the Court to show that adequate number of STBs are available with
the MSOs. As held by the Bombay High court in the decision referred to
above, a certain degree of inconvenience is inevitable in the enforcement of
any deadline. The new regime, which has been put into place by the Union
Government is with a view to provide quality service to consumers. The
individual business hardship that is faced by a business operator must
necessarily give way to public interest in ensuring that services of a
stipulated quality are available to the members of the viewing
public.. (emphasis supplied).

The question whether a cable operator could continue to
transmit signals in the analog form, even after Section 4-A(1) of the
1995 Act was substituted by Act 21 of 2011, did not fall for
consideration in the said judgment.
On the question, whether this Writ Petition should be
transferred to the Delhi High Court and whether the petitioners, in
effect, have questioned the notifications issued by the Government
of India which were under challenge in the Writ Petitions hitherto
transferred to the Delhi High Court, it is necessary to refer to the
contents of the Government of India notification dated 11.11.2011.
In the exercise of the powers conferred by Section 4-A(1) of the
1995 Act, as amended by the 2011 Act, the Central Government,
having been satisfied that it is necessary in the public interest so to
do, notified, by notification dated 11.11.2011, that it shall be
obligatory for every cable operator to transmit or retransmit
programmes of any channel in an encrypted form through a digital
addressable system in such city, town or area, as specified in
column 2 of the table in respect of the corresponding State or
Union Territory, as specified in column 3, with effect from such
date, as specified in column 4. Phase II included the cities of
Hyderabad and Visakhapatnam, and the date specified in column 4
was 31.03.2013. Phase III, which included all other urban areas,
was to be completed by 30.09.2014 and Phase IV, for the rest of
India, by 31.12.2014. The time stipulated in the notification was
periodically extended thereafter.
While the notification dated 11.11.2011 obligated every cable
operator to transmit or re-transmit programmes of any channel in
an encrypted form, through a digital addressable system, it does
not explicitly prohibit the cable operator from transmitting signals
in the analog form in addition to transmission of signals in an
encrypted form. It is only in the impugned notice dated
22.12.2016 has the Government of India conveyed its decision that
all broadcasters, MSOs & LOCs would not be allowed, after
31.01.2017, to carry on analog signals in Phase III areas.
In its order, in Transfer Petition (Civil) Nos.430-444 of 2016
dated 11.03.2016, the Supreme Court, while issuing notice
returnable on 01.04.2016, directed that a final decision shall not
be rendered by the High Court, where the Writ Petitions were filed
which were sought to be transferred by this Transfer Petition, until
further orders. Thereafter, by order in Transfer Petition No.430-
437 of 2016 and 439-444 of 2016 dated 01.04.2016, the Supreme
Court directed that having regard to similar legal questions
involved in all the Writ Petitions that were raised before different
High Courts, with a view to avoid conflicting decisions by different
High Courts, and at the request made on behalf of the Union of
India seeking to transfer all the Transfer petitions pending before
the different High Courts, it was just and proper to withdraw all
those cases pending in different High Courts, and the transfer
petitions, to the Delhi High Court. The Supreme Court directed
that, in future, if any case on the same legal question is filed before
the High Court(s), such case(s) shall also be transferred to the
Delhi High Court.
The present Writ Petition filed in the year 2017 is evidently
not among the Writ Petitions which were pending before different
High Courts, for which transfer petitions were filed before the
Supreme Court in the year 2016. The question which necessitates
examination is whether, in terms of the directions of the Supreme
Court, this Writ Petition filed thereafter before this High Court
should also be transferred to the Delhi High Court. The directions
of the Supreme Court in this regard is that, if any case on the same
legal questions is filed before the High Court, such case should also
be transferred to the Delhi High Court.
With a view to ascertain whether the legal questions which
arise for consideration in the present Writ Petition were also in
issue in the Writ Petitions filed before different High Courts which
were the subject matter of Transfer Petition Nos.430-444 of 2016,
we examined a few such cases, and found that the questions raised
herein were not raised before the other High Courts, wherein the
legal questions related mainly to the constitutional validity of the
amended Section 4-A, and the timeline prescribed for
implementation of DAS even though adequate number of set off
boxes were not available in the market. We have been saved the
trouble of examining all the Writ Petitions as Sri S. Niranjan
Reddy, Learned Senior Counsel appearing on behalf of Star India,
fairly stated that the question raised in the present Writ Petition
were not raised in the Writ Petitions filed before different High
Courts which were part of Transfer Petition No.430-444 of 2016.
Even otherwise the Supreme Court has subsequently, in its
order in I.A. No.1-15 of 2016 in Transfer Petition (Civil). No.430-
444 of 2016, clarified that the controversy, which was ordered to be
transferred for hearing to the Delhi High Court, pertained only to
the notification dated 11.11.2011 and 11.09.2014 under the 1995
Act as amended by the 2011 Ordinance. As neither of the
notifications dated 11.11.2011 and 11.09.2014 are under
challenge in the present Writ Petition, the clarificatory order of the
Supreme Court dated 25.10.2016 would not require us to transfer
the present case to the Delhi High Court, but to adjudicate the
same on its merits.
It is also evident from the counter-affidavit filed on behalf of
Government of India that, while Phase I of digitilisation was
completed in Delhi, Mumbai and Kolkata, it could not be
completed in Chennai because of pending Court cases. It is thus
evident that the cases pending in Chennai Courts are being
contested thereat, and have not been transferred to the Delhi High
Court. In view of the clarificatory order of the Supreme Court
dated 25.10.2016, we see no justification in refusing examine the
questions raised in the present Writ Petition on its merits. The
contention, urged on behalf of the respondent in this regard,
necessitates rejection.
II. RECOMMENDATIONS OF TRAI ARE THEY RELEVANT IN
UNDERSTANDING THE SCOPE OF SECTION 4-A(1)

Sri C. Ramachandra Raju, Learned Counsel for the
petitioners, would submit that the provisions of the 1995 Act, as
amended by the 2011 Act, cannot be understood in the light of the
recommendations of TRAI; Section 4-A does not suffer from any
ambiguity, and therefore no reliance can be placed on the TRAI
recommendations; it is not obligatory for Parliament to accept the
recommendations of TRAI; it is evident that, by amending Section
4-A, Parliament did not intend to accept TRAI recommendations in
its entirety; the 2005 TRAI report recommends that a change over,
from analog to DAS, should be voluntary, and not compulsory;
public interest would not be defeated if the analog system is
continued; and the analog mode of transmission of signals is not
prohibited either by the pre-amended, or by the amended, Section
4-A.
It is contended, on behalf of the respondents, that the
recommendations in the 2010 TRAI report show that the intention
is to stop analog transmission, and effect transmission only
through the digital addressable system; not only would such
transmission bring about transparency, but it would also ensure
enhanced revenue generation, and effective recovery of taxes; it is
evident from the several recommendations in the 2010 TRAI report
that the 1995 Act was amended in 2011 only to bring an end to
the analog system of transmission, and to provide for transmission
of signals only through the digital addressable system; the TRAI
recommendations, when read in the light of the provisions of the
1995 Act and the Rules, make it clear that both Parliament and the
rule making authority intended that, after the date stipulated in
the notifications, transmission should be effected only in an
encrypted form, and not in an analog form; TRAI regulates both the
service and the service providers; the obligation to transmit signals
in an encrypted form extends to each and every Multi-System
Operator; in terms of the Government of India notification dated
09.01.2004, broad-casting and cable services are telecom services,
and fall under the purview of TRAI; the TRAI regulations are
binding on all these service providers; the TRAI recommendations
are, therefore, of great relevance; and the 2011 Act was introduced
only to comply with the recommendations of the TRAI, to bring the
existing analog system to an end, and to convert transmission only
in an encrypted form, making it compulsory for all subscribers to
have a set top box to receive signals in an encrypted form.
A statute is best understood if we know the reason for it. The
reason for a statute is the safest guide to its interpretation. The
words of a statute take their colour from its reason. There are
external and internal aids. The external aids are the Statement of
Objects and Reasons when the Bill is presented to Parliament, the
reports of committees which preceded the Bill, and the reports of
Parliamentary Committees. Occasional excursions into the debates
of Parliament are permitted. Internal aids are the Preamble, the
scheme and the provisions of the Act. Having discovered the reason
for the statute, the interpreter may proceed ahead. No provision in
the statute and no word of the statute may be construed in
isolation. (Utkal Contractors and Joinery (P) Ltd. v. State of
Orissa ; A. Manjula Bhashini v. A.P. Womens Coop. Finance
Corpn. Ltd., ). Interpretation of a statute being an exercise in the
ascertainment of meaning, everything which is logically relevant
should be admissible. (K.P. Varghese v. ITO ). In interpreting a
statute the court has to ascertain the will and policy of the
legislature as discernible from the object and scheme of the
enactment and the language used therein. (Chern Taong Shang v.
Commander S.D. Baijal ). The fairest and most rational method to
interpret the will of the legislator is by exploring his intention at
the time when the law was made, by signs most natural and
probable. And these signs are the words, the context, the subject
matter, the effect and consequence, or the spirit and reason of the
law. (Blackstone Commentaries on the Laws of England
(Facsimile of 1st edn. 1765, University of Chicago Press 1979
Vol. 1 at 59; Doypack Systems (P) Ltd. v. Union of India ).
The Telecom Regulatory Authority of India is a body
corporate established under Section 3(1) of the Telecom Regulatory
Authority of India Act, 1997 to exercise the powers conferred
under, and discharge the functions prescribed by, the said Act. By
notification in S.O. 44(E) dated 09.01.2004, the Government of
India, in the exercise of the powers conferred by the proviso to
clause (k) of sub-section (1) of Section 2 of the Telecom Regulatory
Authority of India Act, 1997, notified broadcasting services and
cable services to be telecommunication service. By the
notification in S.O.45(E) dated 09.01.2004 and, in the exercise of
the powers conferred by clause (d) of sub-section (1) of Section 11
of the Telecom Regulatory Authority Act, the Central Government
entrusted certain additional functions to the TRAI, established
under sub-section (1) of Section 3 of the Act, in respect of
broadcasting services and cable services. The TRAI was entrusted
with the functioning of making recommendations regarding the
terms and conditions on which the addressable system should be
provided to customers. In terms of the notification dated
09.01.2004, the TRAI has been entrusted with the functions of
making recommendations regarding the terms and conditions on
which the addressable system should be provided to customers. It
is therefore useful to refer to the recommendations of the TRAI in
this regard.
Further, as interpretation of Section 4-A would require us to
ascertain its meaning, and everything which is logically relevant
must be taken into consideration, we are satisfied that the contents
of the TRAI reports should be taken note of. While Sri C.
Ramachandra Raju, Learned Counsel for the petitioners would rely
on certain portions of the TRAI report dated 14.09.2005, the
Learned Counsel for the respondents would rely on certain
portions of the subsequent TRAI report dated 05.08.2010. It is
necessary for us, therefore, to briefly refer to the contents of both
the reports, more so as the Statement of objects and reasons for the
2011 amendment bill, whereby Section 4-A was substituted,
specifically refers to the TRAI report dated 05.08.2010.
The TRAI made certain recommendations on Digitalization of
Cable Television in its report dated 14.09.2005. It is useful to note
the relevant portions of these recommendations. Para. 1.4 thereof
relates to Facilitation of Policy of Digitalisation Objectives of
TRAI and, thereunder, it is stated that in developing the policy to
facilitate digitisation of cable networks the Authority has primarily
been guided by the need to keep the process completely voluntary;
cable operators, MSOs, broadcasters and consumers should adopt
the new technology only when they see the merits of such a shift;
what this means is that analog and digital transmission shall
continue side by side; consumers will only go for the digital
platform once they are convinced that it is advantageous to them;
in case, at a later date, they find that it is better to get out of the
digital service they would be free to do so; apart from this primary
consideration, the authority has been guided by the following
objectives i.e., (i) cable services should benefit from the
technological advances to the fullest possible extent, and enabled
to provide competition to other digital platforms; (ii) there should
be smooth transition from analog to digital transmission
recognising that analog services will continue along with digital
services for several years; (iii) the policy should promote
competition at all levels; (iv) the digitalisation policy should provide
guidelines to broadcasters, MSOs, Cable Operators and consumers
for adoption of new technology.
Para. 2.2 of these recommendations relate to International
experience and, thereunder, after stating that details of
international experience have been provided in the Consultation
Paper, reference is made to the important factors to be borne in
mind from this experience. They are (a) there is a cost attached to
moving to the digital platform; the biggest obstacle has been
consumer premises equipment consumers have not been very
enthusiastic about investing in digital set top boxes or digital
televisions; (b) most countries have provided a launch date as well
as a sunset date; (c) the sunset date fixed earlier in USA had to be
extended because of poor progress, and in other countries also
there is a provision to postpone the sunset date in case of poor
response; and (d) the only city in the world which has switched off
analog transmission is Berlin; and extensive subscriber education
and a subsidy scheme have been held to be crucial to this success.
Para 2.4 details the recommendations of the Authority, and
Para.2.4.1 relates to launch, time frame and plan. While detailing
the rationale for promoting digitalisation, the TRAI observed that
this does involve a cost especially for consumers who will have to
invest in a set top box or decoder to transform the digital signals
into analog and, therefore, the plan would have to be voluntary in
all steps, and would have to provide for simultaneous provision of
analog and digital service.
Chapter 6 of the TRAI report dated 14.09.2005 contains the
summary of recommendations. Para. 6.1.1 stipulates that there
should be a national plan for digitalisation from 1st April, 2006 till
31st March, 2010; and this plan would be indicative and would not
be mandatory in any form. Para 6.1.2 stipulates that the essential
components of this plan would be: (i) Introduction of digital service
in all cities/urban agglomerations with a population of one million
plus by 2010; and in all these cities/urban agglomerations the
existing analog service will continue simultaneously; (ii) licensing
for new entrants and automatic licensing for existing operators; (iii)
rationalisation of import and domestic duties by April 1, 2006; and
(iv) use of Entertainment tax for a consumer education programme
during these four years. (2006-2010). Para 6.3 relates to up-
gradation of network and technical choices and it is stated,
thereunder, that, while digitalisation of cable TV should be
promoted, the choice of analog CAS or Digital CAS should be left to
the Cable operators as per their business plans.
Five years thereafter, the TRAI submitted another report
dated 05.08.2010 which contained its recommendations on the
implementation of Digital Addressable Cable TV Systems in India.
The recommendations of TRAI contained the framework of
implementation of digitisation with addressability in India by
December, 2013, and several measures were suggested such as
fiscal incentives, right of way etc, to enable this process. The TRAI
report dated 05.08.2010 contains four chapters with four
annexures. Chapter-I relates to broadcasting sector nature and
limitations and, thereunder, the evolution of the broadcasting
sector are detailed, and it is noted that in 2009 the revenue size of
the Indian television industry was estimated at Rs.25,700 Crores;
of this Rs.16,900 Crores (66%) was attributed to subscription
revenue generated from consumers, and the balance Rs.8,800
Crores (34%) came from the advertising market; the last five years
had changed the dynamics of the market significantly; and from a
scenario where 100% of the cable and satellite (C&S) population
was dependent on analog cable services, DTH commanded around
20% market share by the end of 2009; uptake of digital services
was increasing and choice was becoming possible at the consumer
end; and the cable services value chain comprised four main
supply side entities i.e., the broadcaster, MSO, LCO and the end
consumer. The role of the broadcaster, MSO and LCO are detailed
in the report.
On the nature and characteristics of the Cable TV market,
the report dated 05.08.2010 states that the cable TV systems can
be analog, hybrid or digital; the stakeholders, in the analog cable
TV system, are the broadcasters, MSOs, LCOs and the consumers;
the broadcaster supplies the content, mostly in the form of
bouquets of channels, to MSOs; the MSO collects the content
(channels) from different broadcasters and, after repackaging, gives
it to the LCO for onward distribution to the consumer; the signal
an LCO gets is a single bouquet of analog channels belonging to
different broadcasters; the composition of the bouquet that reaches
the consumer is determined by the MSO; it reflects the MSOs
perception of what the consumers in the LCOs domain want to
watch; an MSO supplies signals to many LCOs; and though it is
technically possible for an MSO to offer different feeds for different
LCOs, there are practical limitations on the number of such feeds.
Para 1.51 states that, even if a feed is customised for a
particular LCO, the bouquet of channels carried by this LCO
cannot fully match the choice of TV channels of each subscriber; at
best, a typical consumer can expect to watch a choice of channels
broadly corresponding to the socio-cultural background of the LCO
domain in which he is residing; however, he cannot make specific
choices to suit his age, education, profession, language or interests;
in fact, the choice of channels would vary from subscriber to
subscriber; and, as a result, any particular subscriber in the
analog system may be paying for channels that he does not watch,
and may also be denied the viewing of specific channels of his
choice.
In para 1.52 it is stated that the signal compiled by the
MSO/LCO reaches the consumers TV receiver set where different
channels are selected by the tuner of the TV set; the tuner of a TV
set has a limited capacity of channel selection; this ultimately
limits the number of TV channels a viewer can watch through his
TV; and the design of the TV tuner matches the TV standard
adopted by a country. Para 1.53 records that in all 101 channels
can be accommodated; taking into consideration terrestrial FM
Radio and TV transmission as well, theoretically, the analog cable
system can have a capacity of 95-96 channels; however, given the
quality and type of the cables, modulators, RF amplifiers etc
deployed in the network, the channel carrying capacity of the
analog cable system practically gets limited to around 85-90
channels only.
Para 1.54 records that, in many parts of India, a hybrid
model is employed; in this model, some channels are carried in
analog form and the remaining capacity is used to carry digitally
modulated channels; and the combined signal is sent on the same
cable. Para 1.55 states that, in digital TV, compression techniques
are employed for storage and distribution/transmission of content;
these techniques capitalise on the redundancy of information in
intra and inter-picture frames, the movement predictions of picture
elements/objects, and the limitations of the human eye and ear to
compress the channels bandwidth requirement; this achieves the
dual objective of a near-normal viewing experience to the
consumer, and a remarkably reduced bandwidth (spectrum)
requirement; the bandwidth requirement of a digital channel
depends upon the complexity of content of the channel; greater
movement and finer visual details require more bandwidth; and, as
a rough estimate, 4 to 12 digital channels can be accommodated in
the bandwidth of a single analog channel, depending upon the
modulation technique employed and the nature of content.
On the Digital Addressable Cable TV System, the TRAI report
dated 05.08.2010 records, in para: 1.59, that, in this model, all the
channels, whether FTA or Pay, are delivered in the addressable-
digital form only; this is akin to the DTH model; not only is the
content carried in digital form, all content, whether pay or FTA, is
also encrypted; the subscriber necessarily requires a Set Top Box
(STB), duly authorised by the service provider (MSO), to view the
TV channels; and the same STB can also be used for reception of
other value added services and interactive services such as
broadband. Para 1.60 states that this model further enhances the
channel carrying capacity of the system over the hybrid model; in
this model, all FTA channels are also carried in digital format
making room for more channels; and the decoded content from the
STB can be viewed through the Audio/Video port of the TV receiver
set.
Chapter II of the TRAI report dated 05.08.2010 relates to
issues in digitization with addressability. Under this head, the
report examines the need for digitization with addressability,
including the issue whether complete digitization with
addressability (a box in every household) is the way forward. On
an analysis the TRAI report states, in para 2.7, that, in the present
cable TV system, service seekers (consumers) as well as service
providers (Broadcasters, MSOs and LCOs) are at a disadvantage;
the consumer has a limited choice of channels and he is also
compelled to pay for channels which are not of his choice; due to
non-transparent business transactions, broadcasters, MSOs and
LCOs are constantly involved in expensive litigation, which has
come to characterise the very nature of business in this segment of
the TV and entertainment industry. Para 2.8 states that the
limitations of analog cable TV transmission had given rise to non-
transparent business transactions based on negotiated non-
verifiable subscriber bases, differential pricing for the same content
and incidence of carriage and placement fee on account of demand-
supply mismatch arising out of capacity constraints, and the
advertisement-centric market strategy of broadcasters; these factors
had resulted in a lack of collaboration amongst various
stakeholders and, as business models came into conflict, litigation
had become more common. In para 2.9, it is stated that almost all
stakeholders recognize that the single most effective step that can
be taken to resolve the problems of the industry would be the
implementation of digitization of the cable TV system with
addressability; and this consensus had emerged from the written
comments of the stakeholders as well as from the views expressed
by the stakeholders. Para 2.10 states that digitization would solve
the problem of capacity constraint, and would enable incorporation
of value added services (viz. Pay per View, Time Shifted Video,
Personal Video Recorder, Near Video on Demand, Radio services,
Broadband etc.) in the offerings to the customer, which would
enhance the range of choice for the customer, and improve the
financial viability of operations for the service provider;
addressability would ensure choice of channels to the consumer
and transparency in business transactions; it would build
stakeholder confidence in the sector; and it would also effectively
address the issue of piracy.
The TRAI report dated 10.08.2010 also deals with regulatory
issues and the need to amend the 1995 Act. Para 2.43 states that,
in order to facilitate complete digitalisation of cable television
networks in India, it may also be necessary to have a re-look at the
provisions of Section 4-A of the Cable Television Networks
(Regulation) Act, 1995, and carry out necessary amendments
therein. Para 2.4 records that Section 4-A of the 1995 Act clearly
mandates that the basic service tier of free-to-air channels should
be available to subscribers without any addressable system
attached to their TV sets in any manner; in other words, these
provisions imply that, in CAS areas, the programmes of the basic
service tier should be available in the analog mode; the present
recommendations of the Authority contemplate that, after the
proposed sunset date, both FTA and pay channels should be
available to subscribers only through set top boxes helping in
determining subscriber base with transparency; the continuance of
the existing provisions of Section 4-A would result in the
continuance of the analog cable network along with digital network
in CAS notified areas, thus preventing the total analog sunset as
contemplated in these recommendations; further, if pay channels
are offered in digital form, and FTA channels are allowed to
continue in analog form without set top boxes, there is always the
possibility that pay channels will be offered as FTA channels,
resulting in piracy. Para 2.45 records that, in order to make cable
television systems fully digital (with hundred per cent
addressability), it would be necessary for each subscriber to acquire
a set top box, irrespective of whether such subscriber desires to
watch pay channels or not; having regard to the above, the
Authority was of the view that, in order to pave the way for a
complete analog switch off, the relevant provisions of Section 4-A of
the 1995 Act be amended suitably.
Chapter III of the TRAI report dated 05.08.2010 relates to the
roadmap for digitization with addressability. It is stated in para 3.6
that, internationally, concerted efforts are being made for up-
gradation to a fully digitized system; stakeholders in India have
different views on the issue of an appropriate date for analog switch
off; considering the fact that the subscribers of TV channels in
India belonged to a range of socio-economic backgrounds from the
very poor to the very affluent, a phased approach to transition from
the analog system to the addressable digital system would seem to
be most appropriate; the approach of phased implementation was
also supported by all the stakeholders; as the use of set top boxes
increased, set top boxes would be available at more affordable
prices; there arose the question as to whether the date for
migration to digital should be the same for pay and FTA channels,
or whether they should be different; if pay channels were offered in
digital form, and FTA channels continued in analog form without
STB, there was always the possibility that the pay channels would
be offered as FTA, resulting in piracy; additionally, if both pay and
FTA channels were received through STB, it would help in
determining the subscriber base with transparency; and the
Authority was of view that effective implementation would not be
possible if the date of migration was different for pay and FTA
channels.
The report then details the advantages of digitization with
addressability to various stakeholders. It is stated, in para 2.15,
that digitization with addressability would result in a number of
advantages to Consumers, Broadcasters, MSOs, LCOs and
Government. Para 2.16 records that, for the consumer, there
would be a choice of channels, enabling him to budget his bill as
per his choice and affordability; thus, he would pay only for what
he wants to watch; in addition, he would have a choice of
interactive services like Video on Demand (VoD), Personal Video
Recording (PVR), video gaming, teleshopping, with additional
features such as Electronic Program Guide (EPG) and broadband;
and he would derive value for his money with enhanced quality of
service through competition among operators/platforms. It is
stated, in para 2.17, that broadcasters would be able to carry on
their business transactions on auditable and verifiable subscriber
bases instead of negotiated basis; the digital dividend would ensure
availability of channel choice and spectrum, and hence allow viable
business planning for existing broadcasters and new entrants;
regional channels would be encouraged; thus, broadcasters would
get value for their content, commensurate to quality, and content
would be protected against piracy; and the increased capacity
would also enable broadcasters to offer niche channels and HDTV
channels. Para 2.18 records that MSOs would be benefited as
they would be able to choose their channels on a-la-carte basis;
they would be able to market pay channels based on demographics
and socio-economic conditions in their markets; and MSOs would
be able to generate more revenue through broadband, value added
and interactive services like VOD, PVR, video gaming, music and
tele-shopping etc. Para 2.19 states that, for local cable operators,
business transactions would be based on auditable subscriber
base; if the subscriber base declined, he would get commensurate
financial relief for the same; besides FTA subscription, he would get
a share of revenue from all pay channels, broadband services and
other value added services; cable operators would also be better
equipped to meet customer requirements in terms of choice of
channels and services, and in terms of quality of service. Para 2.20
records that, as far as the Government was concerned, tax
collection would match the market size; and the Government
would also earn increased service tax revenue through enhanced
deployment of broadband and other value added services. It is
stated, in para 2.21, that, lastly, greater transparency in business
transactions would greatly reduce litigation amongst service
providers, and reduce the need for regulatory intervention; this
would result in better collaboration among service providers, and
overall growth of the sector; and the Authority was of the view that
digitization with addressability was the way forward for the cable
TV industry in Non-CAS areas. In para 2.22, the Authority
recommended that digitization with addressability be implemented
on priority for Cable TV services in Non-CAS areas. In para 3.11,
the Authority recommended that migration to a digital addressable
cable TV system be implemented with a sunset date for Analog
Cable TV Services as 31st Dec 2013, in four phases as follows:-
Phase I: In four Metros Delhi, Mumbai, Kolkata and
Chennai, by 31st March 2011.

Phase II: In all cities having a population of over one million, by
31st December 2011.

Phase III: In all other urban areas (municipal
corporations/municipalities), by 31st
December 2012.

Phase IV: In the rest of India, by 31st December 2013.

The recommendations of the TRAI, in its earlier report dated
14.09.2005, were that, while digitilisation of cable TV should be
promoted, the choice of analog conditional access system or digital
conditional access system should be left to the cable operators as
per their business plans. In its subsequent report dated
05.08.2010, the TRAI has recommended that digitisation with
addressability be implemented on priority for cable TV services; and
migration to a digital addressable cable TV system should be
implemented with a sunset date for analog cable TV services in 4
phases. While the four metros were placed in Phase I with the
sunset date for analog cable TV services as 31.03.2011, the sunset
date in Phase II areas was recommended to be 31.12.2011, in
Phase III areas as 31st December, 2012, and in Phase IV by 31st
December, 2013. By the impugned notice dated 22.12.2016, the
last date for sunset of the analog system has been prescribed as
31.01.2017 for phase III areas. The recommendations of the TRAI,
in its report dated 05.08.2010 is to ensure that, after the sunset
date, transmission of signals is only through DAS and the earlier
mode of transmission of signals in an analog form is completely
disbanded.
While the impugned notice dated 22.12.2016 accords with
the TRAI recommendations in its report dated 05.08.2010, the
contention of Sri C. Ramachandra Raju, Learned Counsel for the
petitioner, is that Parliament, while enacting Act 21 of 2011
whereby Section 4(A) was substituted, did not accept the
recommendations of TRAI in its report dated 05.08.2010 in its
entirety and, while making it obligatory for cable TV operators to
send signals in an encrypted form, it has not prohibited them from
simultaneously sending signals also in the analog form. Before
examining this issue, it is useful to note the contents of the
Statement of Objects and Reasons for introduction of the Bill
which resulted in enactment of Act 21 of 2011 whereby Section 4-A
was substituted.
III. STATEMENT OF OBJECTS AND REASONS : ITS
RELEVANCE IN INTERPRETING SECTION 4-A(1):

Sri C. Ramachandra Raju, Learned Counsel for the
petitioner, would submit that the Statement of Objects and
Reasons for the bill are distinct from the Statement of Objects and
Reasons of the 2011 amendment Act; Parliament, by not including
the Statement of Objects and Reasons in the 1995 Act itself, must
be deemed to have rejected the bill; no aid can be taken of the
Statement of Objects and Reasons, placed before Parliament, by the
Executive; and such a Statement of Objects and Reasons is not
even an external aid to construction.
It is contended, on behalf of the respondents, that the very
object of the amendment is to switch over from the analog system
to the digital system of transmission of signals in an encrypted
form; not only is the object of the amendment to provide more
number of channels to the subscriber in a lesser band width, but
also to plug leakage of revenues of the State, which cable T.V.
operators are resorting to by the use of the analog system of
transmission; and digitization with addressability is stipulated in
the Statement of Objects and Reasons.
The Statement of Objects and Reasons need to be looked
into, though not by itself a necessary aid, as an aid to construction
only if necessary. To assess the intent of the legislature in the event
of there being any confusion, the Statement of Objects and
Reasons may be looked into, and no exception can be taken thereto
this is not an indispensable requirement but when faced with an
imperative need to appreciate the proper intent of the legislature,
the Statement may be looked into but not otherwise.
(Gurudevdatta VKSSS Maryadit v. State of Maharashtra ; A.
Manjula Bhashini5).
The Statement of Objects and Reasons, and the preamble of
an Act, open the minds of the makers in enacting the law. It cannot
altogether be eschewed from consideration of the relevant
provisions of the Act. (S.S. Bola v. B.D. Sardana ). Although the
Statement of Objects and Reasons contained in the Bill, leading to
enactment of the particular Act, cannot be made the sole basis for
construing the provisions contained therein, the same can be
referred to for understanding the background, the antecedent state
of affairs and the mischief sought to be remedied by the statute.
The Statement of Objects and Reasons can also be looked into as
an external aid for appreciating the true intent of the legislature
and/or the object sought to be achieved by enactment of the
particular Act. (A. Manjula Bhashini5; Gurudevdatta VKSSS
Maryadit9; Narain Khamman v. Parduman Kumar Jain ; Bhaiji
v. SDO ; Principles of Statutory Interpretation by Justice G.P.
Singh, 8th Edn., 2001, pp. 206-09).
The Statement of Objects and Reasons seeks only to explain
what reasons induced the mover to introduce the Bill in the House,
and what objects he sought to achieve (Aswini Kumar Ghose v.
Arabinda Bose ). The Statement of Objects and Reasons
accompanying a Bill, when introduced in Parliament, cannot be
used except for the limited purpose of understanding the
background and the antecedent state of affairs leading up to the
legislation. (State of W.B. v. Union of India ). The Statement of
Objects and Reasons might be admissible not for construing the
Act but for ascertaining the conditions which prevailed when the
legislation was enacted. (State of West Bengal v. Subodh Gopal
Bose ; M.K. Ranganathan v. Government of Madras ; A.
Thangal Kunju Musaliar v. M. Venkitachalam Potti ; CIT v.
Sodra Devi ; and Jai Lal v. Delhi Admn., ).
Although in Aswini Kumar Ghose13 it was held that the
Statement of Objects and Reasons contained in the Bill cannot be
used or relied upon for the purpose of construction of the statute,
this rule has not been strictly followed in subsequent judgments.
In A. Thangal Kunju Musaliar17, the Statement of Objects and
Reasons was used for judging the reasonableness of the
classification made in an enactment to see if it infringed or was
contrary to the Constitution. In Central Bank of India v.
Workmen it was held that the Statement of Objects and Reasons
can be used for the limited purpose of understanding the
background and antecedent state of affairs leading up to the
legislation. The same view was reiterated in a large number of other
judgments including Bhaiji12 in which the Supreme Court referred
to the Principles of Statutory Interpretation by Justice G.P.
Singh, 8th Edn., 2001, and observed that a reference to the
Statement of Objects and Reasons is permissible for understanding
the background, the antecedent state of affairs, the surrounding
circumstances in relation to the statute, and the evil which the
statute sought to remedy. (A. Manjula Bhashini5).
The Statement of Objects and Reasons for the amendment
bill (for Act 21 of 2011, whereby Section 4-A was substituted) refers
to the fact that the Telecom Regulatory Authority of India (TRAI), in
its recommendation dated 05.08.2010 on Implementation of the
Digital Addressable Cable Systems in India, had, inter alia,
recommended that digitalization with addressability be
implemented on priority in cable TV services in non-CAS areas;
they had accordingly recommended a time frame comprising four
phases for switch over from analog system to the digital
addressable system (DAS) in the cable TV sector; in view of the said
recommendations of TRAI, the Central Government had decided to
introduce digitalization with addressability in the cable TV services
in a phased time bound manner on a pan-India basis, leading to
complete switch off of analog TV services by 31.12.2014; for
implementation of DAS, certain amendments were required to be
made in the 1995 Act mandating all cable operators to provide
programmes of all channels including free to Air (FTA) channels, in
encrypted form through DAS in a phased manner at the specified
areas from the specified dates to be notified by the Central
Government; it was mandatory that any such notification should
give atleast six months time to the cable operators to install the
necessary digital equipment for migration, and to educate the
subscribers in this area; in order to protect the interest of
consumers, it was proposed to empower TRAI to specify a package
of free to air channels, called basic service tier, which shall be offered
by every cable operator to the consumer; and it is also necessary
that every cable operator should offer channels in the basic service
tier on a la carte (individual) basis to the consumer at a tariff fixed
by TRAI.
The Statement of Objects and Reasons refer to the TRAI
report dated 05.08.2010 recommending a time frame for switch
over from the analog system to the digital addressable system in
the cable TV sector; to the Central Government having decided to
introduce digitisation with addressability in a phased time bound
manner leading to a complete switch off of analog TGV services by
31.12.2014; and that, for implementation of DAS, certain
amendments were required to be made in the 1995 Act mandating
that all cable operators provide programmes of all channels,
including free to air channels, in an encrypted form through DAS
in a phased manner. It is evident, therefore, that the Statement of
Objects and Reasons also show that the analog system is required
to be disbanded, and to be completely discontinued in a phased
manner.
The Statement of Objects and Reasons accompanies the bill
introduced in the legislature, and should not be confused with the
preamble to an enactment. The preamble of a Statute, like the long
title, is a part of the Act and is an admissible internal aid to
construction. Although not an enacting part, the preamble is
expected to express the scope, object and purpose of the Act more
comprehensively than the long title. It may recite the ground and
cause of making of the statute, the evils sought to be remedied or
the doubts which may be intended to be settled. It is to the
preamble more specially that we are to look for the reason or spirit
of every statute, rehearsing this, as it ordinarily does, the evils
sought to be remedied, or the doubts purported to be removed by
the statute, and so evidencing, in the best and most satisfactory
manner, the object or intention of the Legislature in making or
passing the statute itself. (Brett v. Brett ; Principles of Statutory
Interpretation 13th Edition 2012 by Justice G.P. Singh). The
preamble is a key to open the minds of the makers of the Act, and
the mischiefs which they intended to redress. The preamble being
a part of the statute can be read along with other portions of the
Act to find out the meaning of the words in the enacting provisions
as also to decide whether they are clear or ambiguous. (Union of
India v. Elphinstone Spinning & Weaving Co. Ltd ; Stowel v.
Lord Zouch ; A.G. v. HRH Prince Ernest Augustus ).
While the preamble of an enactment is an internal aid,
unlike the Statement of Objects and Reasons which is an external
aid to the interpretation of statutes, the submission of Sri C.
Ramachandra Raju, Learned Counsel for the petitioner, is that
resort to external or internal aids of interpretation is permissible
only where the statutory provision suffers from some ambiguity
and, as Section 4(A) is clear and unambiguous, it is unnecessary to
take the aid of any other mode of construction of statutes. It is
necessary, therefore, for us to examine the scope of Section 4-A of
the 1995 Act as amended by Act 21 of 2011. Before doing so, it is
necessary to briefly note the distinction between analog and DAS
mode of transmission of signals.
IV. DISTINCTION BETWEEN ANALOG AND DAS:
Sri C. Ramachandra Raju, learned counsel for the petitioner,
would submit that the analog system of transmission did not come
into existence with the permission of the statute; it is a natural
form of transmission; it dates back to transmission of signals itself;
the digital addressable system (DAS) encrypts analog signals and
sends them to the Television sets in a digitised form; Television sets
are incapable of receiving encrypted signals directly, and require a
set top box (STB) to do so; the STB receives encrypted signals, and
decrypts them; after decryption, the signals received by the TV is
only in analog form; both DAS and analog transmission can be
effected through a single cable, albeit in different frequencies; both
the conditional access system (CAS) and the subscriber
management system (SMS) are embedded in the set top box; no set
top box can function merely with either one of them; a combination
of CAS and SMS constitutes the STB; the function of the
conditional access system (CAS) is to decode/decrypt the encrypted
signal, and it is only then would the T.V. Set receive these signals;
comparison of the merits and demerits of analog or DAS is in the
legislative realm; an addressable system also converts analog
signal into an encrypted signal, and is sent by the Multi System
Operator (MSO) to the subscriber; the STB with the subscriber
decrypts the signal sent to it, converts it into analog form, and
sends the analog signal to the television set; and, while every cable
operator is obligated to introduce an addressable system, the
analog mode of transmission of signals can also be continued along
with the encrypted system i.e. DAS.
It is submitted, on behalf of the respondents, that unlike an
analog form of transmission, the encrypted form is digitized; it
occupies far less band width as compared to the analog form of
transmission; an analog form of transmission is incapable of
encryption; and the band width allocation, in an analog form of
transmission, is far higher than in a digitized/encrypted form of
transmission.
The question which necessitates examination is whether the
impugned notice dated 22.12.2016, whereby local cable operators
were prohibited after 31.01.2017 from transmitting analog signals
in Phase-III areas, falls foul of Section 4-A of the 1995 Act. It is
only if Section 4-A is held as enabling the local cable operator to
transmit signals in an analog form, in addition to transmission of
signals in an encrypted form, would the impugned notice dated
22.12.2016 be liable to be struck down as having been passed in
contravention of Section 4-A of the 1995 Act as amended by Act 21
of 2011.
It is necessary therefore to refer, albeit in brief, to the
relevant provisions of the 1995 Act and the rules made thereunder.
Section 2(aii) of the 1995 Act defines Broadcaster to mean a person
or a group of persons, or a body corporate, or any organization or
body providing programming services, and to include his or its
authorised distribution agencies. Section 2(aiii) defines cable
operator to mean any person who provides cable service through a
cable television network or otherwise controls or is responsible for
the management and operation of a cable television network and
fulfils the prescribed eligibility criteria and conditions. Section 2(b)
defines cable service to mean the transmission by cables of
programmes including re-transmission by cables of any broadcast
television signals. Section 2(c) defines cable television network to
mean any system consisting of a set of closed transmission paths
and associated signal generation, control and distribution
equipment, designed to provide cable service for reception by
multiple subscribers. Section 2(i) defines subscriber to mean any
individual, or association of individuals, or a company, or any
other organization or body who receives the signals of cable
television network at a place indicated by him or it to the cable
operator, without further transmitting it to any other person.
Chapter II of the 1995 Act relates to regulation of cable
television network. Section 3 stipulates that no person shall
operate a cable television network unless he is registered as a cable
operator under the 1995 Act. Section 4 relates to registration as
cable operators and, under sub-section (1) thereof, any person who
is desirous of operating or is operating a cable television network
may apply for registration or renewal of registration, as a cable
operator, to the registering authority. Under sub-section (3)
thereof, on and from the date of issue of a notification under
Section 4-A, no new registration in a State, City, town or area
notified under that Section shall be granted to any cable operator
who does not undertake to transmit or re-transmit channels in an
encrypted form through a digital addressable system.
Section 4-A of the 1995 Act was substituted by Act 21 of
2011 with effect from 25.10.2011. Section 4-A(1), after its
substitution, stipulates that, where the Central Government is
satisfied that it is necessary in the public interest so to do, it may,
by notification in the Official Gazette, make it obligatory for every
cable operator to transmit or re-transmit programmes of any
channel in an encrypted form through a digital addressable system
with effect from such date as may be specified in the notification,
and different dates may be specified for different States, Cities,
towns or areas, as the case may be. Under the proviso thereto, the
dates specified in the notification shall not be earlier than six
months from the date of issue of such notification to enable the
cable operators, in different States, Cities, towns or areas, to install
the equipment required for the purposes of Section 4-A(1). Section
4-A(3) provides that, if the Central Government is satisfied that it is
necessary in the public interest so to do and if not otherwise
specified by the Authority, it may direct the Authority to specify, by
notification in the Official Gazette, one or more free-to-air channels
to be included in the package of channels forming the basic service
tier, and any one or more such channels may be specified, in the
notifications, genre-wise for providing a programme mix of
entertainment, information, education and such other
programmes, and fix the tariff for basic service tier which shall be
offered by the cable operators to the consumers, and the consumer
shall have the option to subscribe to any such tier. Under the
proviso thereto, the cable operator shall also offer the channels in
the basic service tier on a la carte basis to the subscriber at a tariff
specified under Section 4-A(3). Section 4-A(6) stipulates that the
cable operator shall not require any subscriber to have a receiver
set of a particular type to receive signals of cable television network.
Under the proviso thereto, the subscriber shall use a digital
addressable system to be attached to his receiver set for receiving
programmes transmitted on any channel.
Explanation (a) to Section 4-A stipulates that, for the
purposes of Section 4-A, addressable system means an electronic
device (which includes hardware and its associated software) or
more than one electronic device put in an integrated system
through which signals of cable television network can be sent in
encrypted form, which can be decoded by the device or devices,
having an activated Conditional Access System at the premises of
the subscriber within the limits of authorisation made, through the
Conditional Access System and the subscriber management
system, on the explicit choice and request of such subscriber, by
the cable operator to the subscriber. Explanation (b) defines basic
service tier to mean a package of free-to-air channels to be offered by
a cable operator to a subscriber with an option to subscribe for a
single price, to subscribers of the area in which his cable television
network is providing service. Explanation (c) defines encrypted, in
respect of a signal of cable television network, to mean the
changing of such signal in a systematic way so that the signal
would be unintelligible without the use of an addressable system,
and the expression “unencrypted” shall be construed accordingly.
Explanation (d) defines free-to-air channel, in respect of a cable
television network, to mean a channel for which no subscription
fee is to be paid by the cable operator to the broadcaster for its re-
transmission on cable. Explanation (e) defines pay channel, in
respect of a cable television network, to mean a channel for which
subscription fees is to be paid to the broadcaster by the cable
operator and due authorisation needs to be taken from the
broadcaster for its re-transmission on cable. Explanation (f)
defines subscriber management system to mean a system or device
which stores the subscriber records and details with respect to
name, address and other information regarding the hardware being
utilised by the subscriber, channels or bouquets of channels
subscribed to by the subscriber, price of such channels or
bouquets of channels as defined in the system, the activation or
deactivation dates and time for any channel or bouquets of
channels, a log of all actions performed on a subscribers record,
invoices raised on each subscriber and the amounts paid or
discount allowed to the subscriber for each billing period.
Chapter III of the 1995 Act relates to seizure and confiscation
of certain equipment. Section 11 relates to the power to seize
equipment used for operating cable television network and,
thereunder, if any authorised officer has reason to believe that,
among others, the provisions of Section 3 and Section 4-A have
been or are being contravened by any cable operator, he may seize
the equipment being used by such cable operator for operating the
cable television network. Chapter IV of the 1995 Act relates to
offences and penalties. Section 16 prescribes the punishment for
contravention of the provisions of the 1995 Act and, thereunder,
whoever contravenes any of the provisions of the 1995 Act shall be
punishable (a) for the first offence, with imprisonment for a term
which may extend to two years or with fine which may extend to
one thousand rupees or with both; and (b) for every subsequent
offence, with imprisonment for a term which may extend to five
years and with fine which may extend to five thousand rupees.
Section 17 relates to offences by companies and, under sub-section
(1) thereof, where an offence under the Act has been committed by
a Company, every person who, at the time the offence was
committed, was in charge of, and was responsible to, the company
for the conduct of the business of the company, as well as the
company, shall be deemed to be guilty of the offence and shall be
liable to be proceeded against and punished accordingly.
The Cable Television Networks Rules, 1994 (hereinafter
called the Rules) came into force on its publication in the Official
Gazette on 29.09.1994. Rule 2(c) defines Multi-System Operator to
mean a cable operator who has been granted registration under
Rule 11-C to receive programming service from a broadcaster or its
authorized agencies and re-transmit the same or transmit his own
programming service for simultaneous reception either by multiple
subscribers directly or through one or more local cable operators,
and includes his authorized distribution agencies, by whatever
name called. Rule 2(d) defines notified area to mean the area in
respect of which the date has been notified by the Central
Government under sub-section (1) of Section 4- of the Act.
Rule 3 relates to application for registration as a cable
television network in India, Rule 5 to the Registration of cable
operator, and Rule 5-A to the terms and conditions for registration.
Rule 5-B relates to deemed registration for transmission in
encrypted form in certain cases and thereunder where, in respect of
an area, a cable operator has already been registered and such
registration is valid as on the date when such area was notified
under 4-A(1), he shall be deemed to have been registered in respect
of such area for the remaining period of its validity. Under the
proviso thereto, such cable operator shall (i) transmit or re-transmit
programmes of any channels in an encrypted form through a
digital addressable system for the remaining period of the validity
of registration in such areas. Under the second proviso thereto
where such cable operator fails to do so, the registration, which is
so deemed to have been valid, shall stand cancelled with effect from
the date when such area is notified. Rule 11 relates to the grant of
permission to multi-system operators to provide cable services with
addressable systems in the notified area and, under sub-rule (1)
thereof, no multi-system operator shall provide cable television
network services with addressable systems in any one or more
notified areas without a valid permission from the Central
Government under Rule 11(3). Rule 11(5) stipulates that no multi-
system operator shall continue to provide any cable television
network services in the notified areas after the date notified therein,
without obtaining prior permission from the Central Government.
Rule 11-F relates to deemed registration of multi-system operators
in certain cases and, thereunder, no multi-system operator,
providing cable television network services in areas as on the date
when such areas are notified under Section 4A(1), shall, with effect
from the date specified in that notification, continue to provide
such services in such areas unless the operator is granted
registration under Section 11-C. Under the second proviso thereto,
the multi-system operator is required to furnish an undertaking to
the registering authority, at least thirty days prior to the notified
date of operation of the digital addressable system, namely that (a)
such operator shall transmit or re-transmit channels only in an
encrypted form through a digital addressable system in the notified
areas. Under the third proviso thereto, where such operator fails to
do so, the permission which is deemed to have been valid, shall,
with effect from the date when such area is notified, stand
cancelled. Rule 12 relates to public awareness, information
channels, price of channels, quality standards and grievance
redressal and, under sub-section (1) thereof, every broadcaster,
multi-system operator and cable operator shall create public
awareness among, and provide information to, the subscribers in
the notified areas from a period at least thirty days prior to the date
such areas are notified, either through advertisements in the print
and electronic media or through such other means including
leaflets, printing on the reverse of the receipts, personal visits,
group meetings with subscribers or consumer groups, cable service
and website, containing salient features of the digital addressable
cable system as approved by the Authority namely (a) a-la-carte
subscription rates and the periodic intervals at which such
subscriptions are payable for receiving the various channels; (b) the
refundable security deposit and the daily or monthly rental payable
for the set-top box and its detailed specifications such as the make,
model, technical specifications, user manuals and maintenance
centres; (c) the number and names of free-to-air channels that the
multi-system operator shall provide to the subscribers; (d) the
monthly service charge to be paid by each subscriber for receiving
the basic service tier fixed by the Authority and the number of
additional free-to-air channels, if any, offered by the Multi-System
Operator; (e) the Quality of Service Standards specified by the
Authority and the arrangements made by the multi-system
operator to comply with these standards; (f) the Subscriber
Management System established by the multi-system operator to
demonstrate the functioning of the set-top boxes, and to interact
with the subscribers to explain the various financial, logistic and
technical aspects of the system for its smooth implementation.
Rule 13 relates to supply and installation of set-top-boxes and,
under sub-Rule (1), every subscriber in the notified areas, who is
desirous of receiving one or more channels, may approach any one
of the multi-system operators who has been registered under Rule
11-C, either directly or through any of his linked local cable
operators, for the supply and installation of one or more set-top
boxes in his premises and deliver the requisite channels through
the same. Under the proviso thereto, every subscriber shall be free
to buy a set-top box of approved quality from the open market, if
available, which is technically compatible with the system of the
multi-system operator, and the multi-system operator or the cable
operator shall not force any subscriber to buy or to take on rent the
set-top box from him alone. Bearing the aforesaid provisions of
the 1995 Act and the Rules in mind, let us now examine whether
Section 4-A(1) of the 1995 Act, as amended by Act 21 of 2011,
prohibits transmission of signals in an analog form after
31.01.2017 in Phase III areas, or whether the local cable operator is
still entitled, notwithstanding the substitution of Section 4-A, to
transmit signals in an analog form so long as he also transmits
signals in an encrypted form.
V. DOES SECTION 4-A PROHIBIT TRANSMISSION OF ANALOG
SIGNALS:

Sri C. Ramachandra Raju, Learned Counsel for the
petitioner, would submit that Section 4-A of the 1995 Act, as
amended by Act 21 of 2011, does not prohibit transmission of
analog signals; while Section 4-A(1) makes it obligatory for every
cable operator to transmit signals through DAS, it does not bar
such an operator from, in addition, transmitting signals in an
analog form; the word only is missing in Section 4-A(1); absence
of the word only in Section 4A(1) of the 1995 Act makes it evident
that, while a cable operator is obligated to transmit signals through
DAS, it is open to him, if he so chooses, to also transmit signals in
an analog form; as Section 4-A is clear and unambiguous, a literal
construction should alone be adopted, and there is no need to take
the aid of any other rule of interpretation of statutes; Parliament
could have, if it intended to prohibit analog mode of transmission,
expressed its intention by stating that all cable T.V. operators
should transmit signals only in DAS; and, as Section 4-A does not
explicitly prohibit analog transmission, the impugned notice dated
22.12.1016 is illegal.
It is submitted, on behalf of the respondents, that Section 4-
A(1) makes it obligatory for signals to be transmitted only through
the digital addressable system giving a go-bye to the earlier analog
system; the provisions of the 1995 Act, as amended by the 2011
Act, must be read as a whole; a few words in Section 4-A(1), or in
explanation (a) thereto, cannot be read out of context to contend
that signals can be transmitted in an analog form in addition to
transmission through the digital addressable system; Section 4-
A(1) does not explicitly provide for transmission of signals in the
analog form; reference in explanation (a) to Section 4-A is to the
addressable system, and not to the mode of transmission; the choice
of the subscriber is only in terms of the addressable system i.e
within the set top box; the sun set clauses, in the Act and the
Rules, make it clear that, after the cut off date, analog form of
transmission should be brought to an end, and thereafter signals
can only be permitted to be sent in an encrypted form; the
provisions of the 1995 Act, when read as a whole, make it clear
that the analog system is required to be brought to an end; it is
evident from the proviso to Section 4-A(6) that, while a subscriber
can have a set top box of his choice, he has necessarily to use a set
top box attached to his receiver for receiving programmes
transmitted on any channel; it is compulsory for all subscribers to
have a set top box, and thereby receive signals only in an encrypted
form; the proviso to Section 4-A(6) is mandatory; Rule 5-B, which
relates to deemed registration, also makes it clear that, after the
licence period of one year, the local cable operator is obligated to
switch over to the digital addressable system, and to transmit
signals only in an encrypted form; different provisions of the 1995
Act cast an obligation on each of the service providers, (which
includes the Multi-System Operators, the local cable operators),
and the recipient of the services i.e. the subscriber; the obligation is
to transmit signals, for every channel, in an encrypted form by the
digital addressable system; the word obligate is another
expression for mandatory; and, as the Statute requires
transmission to be effected in an encrypted form, absence of the
word only will not change its meaning.
Section 4-A(1), as substituted by Act 21 of 2011, confers
power on the Central Government (a) if it is satisfied that it is
necessary in the public interest so to do, and (b) by notification in
the official gazette, to make it obligatory for every cable operator,
from a specified date, to transmit or retransmit programmes of any
channel in an encrypted form, through a digital addressable
system. While Section 4-A mandates transmission of programmes
of any channel in an encrypted form, the submission of Sri C.
Ramachandra Raju, Learned Counsel for the petitioner, is that
Section 4-A(1) does not use the word only; it is therefore open to a
cable operator to transmit programmes of any channel in an analog
form also, so long as he transmits programmes in an encrypted
form; and it would then be open to a subscriber to choose whether
he wishes to receive programmes in an analog form or in an
encrypted form.
Every statutory provision and every word used therein must
be looked at generally before any provision or word is attempted to
be construed. The setting and the pattern are important. It is again
important to remember that Parliament does not waste its breath
unnecessarily. Just as Parliament is not expected to use
unnecessary expressions, Parliament is also not expected to
express itself unnecessarily. Even as Parliament does not use any
word without meaning something, Parliament does not legislate
where no legislation is called for. Parliament cannot be assumed to
legislate for the sake of legislation; nor can it be assumed to make
pointless legislation. Parliament does not indulge in legislation
merely to state what it is unnecessary to state or to do what is
already validly done. Parliament may not be assumed to legislate
unnecessarily. (Utkal Contractors and Joinery (P) Ltd.4; A.
Manjula Bhashini5).
The legislative intent, in enacting Section 4-A(1), can be
ascertained not merely by construing the words used in the said
provision, but on a reading of relevant provisions of the 1995 Act
as a whole, the context and the subject mater of the provisions,
and its effect and consequences. A statute must be interpreted
having regard to the purport and object of the Act. The court must
place itself in the chair of a reasonable legislator. In so doing, it
would not be permissible for the court to construe the provisions in
such a manner which would destroy the very purpose for which
the same was enacted. (Krishna Kumar Birla v. Rajendra Singh
Lodha ). It is a cardinal principle of construction that the courts
must adopt a construction which would suppress the mischief and
advance the remedy. (A-One Granites v. State of U.P., ). It is the
duty of the court to further Parliament’s aim of providing a remedy
for the mischief against which the enactment is directed, and the
court should prefer a construction which advances this object
rather than one which attempts to find some way of circumventing
it. (Francis Bennion on Statutory Interpretation, 2nd Edn., p.
711; Reserve Bank of India v. Peerless General Finance and
Investment Co. Ltd., ). While Section 4-A(1) requires every cable
operator to transmit any channel in an encrypted form through a
digital addressable system, it does not explicitly permit or prohibit
analog transmission.
Sri C. Ramachandra Raju, Learned Counsel for the
petitioner, would commend a literal construction of Section 4-A(1),
and for the said provision to be interpreted independent of
explanation (a) thereto. We must express our inability to agree as
Section 4-A(1) uses the word digital addressable system and
explanation (a) thereto defines an addressable system. Further while
there is no explicit prohibition, Section 4-A(1) does not also
explicitly permit transmission of signals in an analog form. As
Section 4-A(1) is not clear and unambiguous, a literal construction
thereof is of no avail, and we must necessarily, resort to other aids
of statutory interpretation. Whether or not it can be inferred from
Section 4-A(1) that a cable operator can still continue to transmit
signals in an analog form, would require us to ascertain the
legislative intent, the purpose and object for which Section 4-A(1)
was substituted by Act 21 of 2011, and the mischief which was
sought to be remedied thereby.
Purpose is a subjective concept, and the interpreter should
imagine himself or herself in the legislator’s shoes. There are,
however, two elements of objectivity: First, the interpreter should
assume that the legislature is composed of reasonable people
seeking to achieve reasonable goals in a reasonable manner; and
second, the interpreter should accept the non-rebuttable
presumption that members of the legislative body sought to fulfil
their constitutional duties in good faith. This formulation allows
the interpreter to inquire not into the subjective intent of the
author, but rather the intent the author would have had, had he or
she acted reasonably. (Aharon Barak, Purposive Interpretation
in Law, (2007) at p. 87; New India Assurance Company Ltd. v.
Nusli Neville Wadia ; UCO Bank v. Rajinder Lal Capoor ; Union
of India v. Ranbaxy Laboratories Limited ; D. Purushotama
Reddy v. K. Sateesh ; Mahalakshmi Sugar Mills Company
Limited v. Union of India ).
The rule of purposive construction should be resorted to
which would require the construction of the Act in such a manner
so as to see that the object of the Act is fulfilled. (Ashoka
Marketing Ltd. v. Punjab National Bank ; Nusli Neville Wadia28;
Rajinder Lal Capoor29; Ranbaxy Laboratories Limited30; D.
Purushotama Reddy31; Mahalakshmi Sugar Mills Company
Limited32). The courts should, where possible, identify the
mischief which existed before the passing of the statute and then,
if more than one construction is possible, favour that which will
eliminate the mischief so identified. (Anderton v. Ryan ). The
Court must adopt that construction which, suppresses the
mischief and advances the remedy (Pawan Kumar v. State of
Haryana ).
The intention of the legislature must be found by reading the
statute as a whole. The court must ascertain the intention of the
legislature by directing its attention not merely to the clauses to be
construed but to the entire statute; it must compare the clause
with the other parts of the law, and the setting in which the clause
to be interpreted occurs. The rule is of general application as even
the plainest terms may be controlled by the context. The
expressions used in a statute should, ordinarily, be understood in
a sense in which they best harmonize with the object of the
statute, and which effectuate the object of the legislature. (Mor
Modern Cooperative Transport Society Ltd. v. Financial
Commissioner & Secretary to Govt. of Haryana ).
The Court must look at the statute as a whole and consider
the appropriateness of the meaning in a particular context avoiding
absurdity and inconsistencies or unreasonableness which may
render the statute unconstitutional. Where there exists some
ambiguity in the language or the same is capable of two
interpretations, the interpretation which serves the object and
purport of the Act must be given effect to. In such a case the
doctrine of purposive construction should be adopted. (Swedish
Match AB v. Securities & Exchange Board of India ; Nathi Devi
v. Radha Devi Gupta ). We shall, therefore, examine Section 4-
A(1) in the context of the other provisions of the 1995 Act, as also
the mischief which Act 21 of 2011 sought to remedy. As Section 4-
A(1) refers to addressable system which is defined in explanation (a),
it is useful to note the meaning of the words addressable system
therein.
VI. SCOPE OF EXPLANATION (a) TO SECTION 4-A:
Sri C. Ramachandra Raju, Learned Counsel for the
petitioner, would submit that explanation (a) to Section 4-A gives a
choice to the subscriber whether to receive transmission in an
analog form or in the DAS form; on the subscriber exercising his
choice, it is open to such of those cable operators, who are willing
to send signals in both DAS and analog forms, to provide signals of
the choice of the subscriber; the set top boxes contain both a
conditional access system and a subscriber management system;
this system is linked to the local cable operator and the multi-
system operator; the conditional access system unencrypts
encrypted signals; the subscriber management system deals with
the choice of the consumer regarding channels; both CAS & SMS
are integrated; the expression addressable system in Explanation (a)
defines not only an STB but also the transmission of DAS; a
combination of both CAS and SMS is called the STB; the function
of CAS is to decode encrypted signals, and provide subscribers
access to channels according to their choice through SMS; both
CAS and SMS are integrated and inseparable; the choice of the
subscriber is either to have an STB or not to have an STB;
whosoever choose DAS is required to have an STB, and whoever
chooses not to have DAS, and exercises his choice only for the
conventional analog system, need not have an STB; it is the choice
of the subscriber to have DAS or analog; as the analog system does
not require set top boxes, the subscriber can avoid incurring
needless expenditure in purchasing them, if he is satisfied with a
limited number of channels being made available through analog
transmission; the choice of the subscriber, under explanation (a) to
Section 4-A(1) of the 1995 Act, is a choice of the manner in which
signals should be transmitted i.e. either in analog form or through
DAS; the choice is not with respect to TV channels; there is no
reference either in Section 4-A(1) of the 1995 Act, or in explanation
(a) thereto, to TV channels; independent of Explanation (a), Section
4-A does not prohibit transmission through the analog system;
Explanation (a) only strengthens the construction placed on
Section 4-A; Section 4-A does not suffer from any deficiency; the
intention of Parliament, which is explicit in Section 4-A, is
reiterated in Explanation (a); the counter-affidavit is silent
regarding the choice available to the subscriber in terms of the
Explanation; as the contentions urged are mixed question of fact
and law, the counter-affidavit ought to have dealt with them; and
even if it is understood in the context of Explanation (a) thereto, as
Section 4-A(1) does not prohibit analog transmission, no specific
permission is required under the statute to transmit signals in the
analog form.
It is submitted, on behalf of the respondents, that Section 4-
A(1) should be construed in terms of explanation (a) thereto; while
in exceptional situations, an Explanation can be construed
independently, it is ordinarily construed only in terms of the main
provision; when Section 4-A(1) is read in the context of explanation
(a), it is evident that the transmission, required to be effected after
the 2011 amendment to the 1995 Act, and from the date notified
by the Central Government, is only in an encrypted form, and not
through the analog form of transmission of signals.
An addressable system is an electronic device, or more than
one electronic device, in an integrated system through which
signals of cable network can be sent in an encrypted form. The
encrypted signals would be decoded by the device (set top box),
having an activated conditional access system, at the premises of
the subscriber. Decoding of the encrypted signal by the device
(STB) is within the limits of authorisation made through the
conditional access system and the subscriber management system,
on the explicit choice and request of such subscribers. The words
on the explicit choice and request of such subscriber is used in the
definition of an addressable system in explanation (a) to Section 4-A.
The choice which the subscriber can exercise is only within the
addressable system itself, and not beyond. Since an addressable
system is an electronic device whereby signals are sent in an
encrypted form, the explicit choice and request of the subscriber is
not whether he should receive signals in an encrypted form or in
an analog form, as transmission of signals in the analog form falls
outside the addressable system. As explanation (a), whereby an
addressable system is defined, does not give a choice to the
subscriber, to choose between an analog form of transmission or
the encrypted form, the obligation cast on every cable operator by
Section 4-A(1) is only to transmit programmes of any channel in an
encrypted form through a digital addressable system (set top box).
When Section 4-A(1) is read along with explanation (a) thereto, it is
evident that the subscriber no longer has a choice to receive signals
in an analog form, but can receive signals only in an encrypted
form through a digital addressable system i.e. the set top box.
The submission that Section 4-A(1) must be read
independent of explanation (a) does not merit acceptance. An
Explanation, added to a statutory provision, is not a substantive
provision in any sense of the term but, as the plain meaning of the
word itself shows, it is merely meant to explain or clarify certain
ambiguities which may have crept in the statutory provision. The
object of an Explanation is to understand the provision in the light
of the explanation. It does not ordinarily enlarge the scope of the
original section which it explains, but only makes the meaning
clear beyond dispute. (S. Sundaram Pillai v. V.R. Pattabiraman ;
Sarathi in Interpretation of Statutes).
The object, of an Explanation to a statutory provision, is (a)
to explain the meaning and intendment of the Act itself; (b) where
there is any obscurity or vagueness in the main enactment, to
clarify the same so as to make it consistent with the dominant
object which it seems to subserve; (c) to provide an additional
support to the dominant object of the Act in order to make it
meaningful and purposeful; (d) an Explanation cannot in any way
interfere with or change the enactment or any part thereof but
where some gap is left which is relevant for the purpose of the
Explanation, in order to suppress the mischief and advance the
object of the Act, it can help or assist the Court in interpreting the
true purport and intendment of the enactment, and (e) it cannot,
however, take away a statutory right with which any person under
a statute has been clothed or set at naught the working of an Act
by becoming a hindrance in the interpretation of the same. (S.
Sundaram Pillai39; Hiralal Rattanlal v. State of U.P. ).
Sometimes an Explanation is appended to stress upon a
particular thing which, ordinarily, would not appear clearly from
the provisions of the Section. The proper function of an
Explanation is to make plain or elucidate what is enacted in the
substantive provision, and not to add or subtract from it. Thus an
Explanation does not either restrict or extend the enacting part; it
does not enlarge or narrow down the scope of the original Section
that it is supposed to explain. The Explanation must be
interpreted according to its own tenor, that it is meant to explain
and not vice versa. (S. Sundaram Pillai39; Swarup in Legislation
and Interpretation). It is with a view to explain the term
addressable system in Section 4-A(1), has the said term been defined
in explanation (a) thereto. Section 4-A(1) must necessarily be
understood in the light of explanation (a). When Section 4-A(1)
and explanation (a) are read together, it is evident that, after the
specified date, the cable operator is obligated to send signals only
in an encrypted form which a subscriber can receive only through
a digital addressable system (set top box).
The construction to be placed on Section 4-A(1) and
explanation (a) thereto is a pure question of law and not a mixed
question of fact and law. While the meaning of an ordinary word of
the English language is not a question of law, the proper
construction of the Statute is. (Revenue and Customs v. Premier
Foods Ltd. ). The question of what a word means in its context
within the Act is a question of legal interpretation and, therefore, of
law. The Court is required to arrive at the legal meaning of the
term. (Premier Foods Ltd.41; Benyon on Statutory
Interpretation, 3rd Edition, page 945 to 956; Brutus v.
Cozens ). The mere fact that the counter-affidavit does not refer to
the scope and ambit of Section 4-A(1) and explanation (a) thereto,
would not preclude us from examining its scope.

VII. DISTINCTION BETWEEN THE PRE-AMENDED AND
AMENDED SECTION 4-A AND THE DEFINITIONS IN THE
EXPLANATION THERETO:

Sri C. Ramachandra Raju, Learned Counsel for the
petitioner, would submit that the difference between the pre-
amended and the amended Section 4-A is only digitisation and
nothing else; the old Section 4-A also gave a choice to the
subscriber; both analog and DAS signals can co-exist; analog and
encrypted signals can be sent in the same cable, but in different
frequencies; and it is technically feasible to send both form of
signals in one single cable.
It is contended, on behalf of the respondents, that the
difference in language between Section 4-A, prior to its amendment
and after its amendment by the 2011 Act, makes it clear that the
requirement of sending signals in an encrypted form, which was
earlier limited only to pay channels, has now been extended to all
channels; while explanation (a) to the unamended Section 4-A uses
both the words encrypted and unencrypted form, the amended
explanation (a) only uses the word encrypted form; Parliament
intended to remedy the mischief which existed in the pre-amended
Section 4-A; in deleting the words unencrypted form from the
explanation, the legislative intent is evident; and it is to the effect
that signals should be transmitted only in an encrypted form.
The legislation is primarily directed to the problems before
the legislature based on information derived from past and present
experience. The legislative intention, i.e. the true or legal meaning
of an enactment, is derived by considering the meaning of the
words used in the enactment in the light of any discernible
purpose or object which comprehends the mischief and its remedy
to which the enactment is directed. (Ameer Trading Corpn. Ltd. v.
Shapoorji Data Processing Ltd., ; District Mining Officer v. Tata
Iron & Steel Co. ). Parliament intends that an enactment shall
remedy a particular mischief and it is therefore presumed that
Parliament intends that the Court, when considering, in relation to
the facts of the instant case, which of the opposing constructions of
the enactment corresponds to its legal meaning, should find a
construction which applies the remedy provided by it in such a
way as to suppress that mischief. (Ameer Trading Corpn. Ltd.43;
Halsbury’s Laws of England, Vol. 44(1), 4th Reissue, para 1474,
pp. 906-07). Parliament is presumed to have enacted a reasonable
statute. (Breyer, Stephen (2005): Active Liberty: Interpreting
Our Democratic Constitution, Knopf (Chapter on Statutory
Interpretation, p. 99 Reasonable Legislator Presumption;
Bharat Petroleum Corpn. Ltd. v. Maddula Ratnavalli ; Rajinder
Lal Capoor29).
When two interpretations are feasible, the Court will prefer
that which advances the remedy and suppresses the mischief as
the legislature envisioned. (Mor Modern Cooperative Transport
Society Ltd.36). Four things are to be discerned and considered:
(1). What was the common law before the making of the Act., (2).
What was the mischief and defect for which the common law did
not provide., (3). What remedy the Parliament hath resolved and
appointed to cure the disease; and (4). the true reason of the
remedy. Judges should always make such a construction as shall
suppress the mischief, and advance the remedy, and to suppress
subtle inventions and evasions for continuance of the mischief, and
pro privato commodo, and to add force and life to the cure and
remedy, according to the true intent of the makers of the Act, pro
bona publico. (Bengal Immunity Co. Ltd. v. State of Bihar ;
Parayankandiyal Eravath Kanapravan Kalliani Amma (Smt) v.
K. Devi ; K.P. Varghese6; Goodyear India Ltd. v. State of
Haryana ; Pawan Kumar35). It is not only legitimate, but highly
convenient to refer both to the former Act and to the ascertained
evils to which the former Act had given rise, and to the later Act
which provided the remedy. (Eastman Photographic Material
Company Ltd. v. Comptroller General of Patents, Designs and
Trade Marks ; In re Mayfair Property Company ; Bengal
Immunity Co. Ltd.46; Parayankandiyal Eravath Kanapravan
Kalliani Amma (Smt)47).
It is useful therefore to read Section 4-A, explanation (a)
thereto, and the definition of the words, basic services tier,
encrypted, free to air channel, and pay channel in the explanation
both before, and after, its amendment by Act 21 of 2011 in
juxtaposition with each other.

Before amendment
After amendment
Section 4-A. Transmission of
programmes through addressable
system, etc.
(1) Where the Central Government is
satisfied that it is necessary in the
public interest to do so, it may, by
notification in the Official Gazette,
make it obligatory for every cable
operator to transmit or retransmit
programme of any pay channel
through an addressable system with
effect from such date as may be
specified in the notification and
different dates may be specified for
different States, cities, towns or areas,
as the case may be.

Explanation.For the purposes of this
section,
(a) “addressable system” means an
electronic device or more than one
electronic devices put in an
integrated system through which
signals of cable television network
can be sent in encrypted or
unencrypted form, which can be
decoded by the device or devices at
the premises of the subscriber
within the limits of authorisation
made, on the choice and request of
such subscriber, by the cable
operator to the subscriber;

 

 

 

(b) “basic service tier” means a package
of free-to-air channels provided by a
cable operator, for a single price to the
subscribers of the area in which his
cable television network is providing
service and such channels are
receivable for viewing by the
subscribers on the receiver set of a type
existing immediately before the
commencement of the Cable Television
Networks (Regulation) Amendment Act,
2002 without any addressable system
attached to such receiver set in any
manner;
(d) “encrypted”, in respect of a signal of
cable television network, means the
changing of such signal in a systematic
way so that the signal would be
unintelligible without a suitable
receiving equipment and the
expression “unencrypted” shall be
construed accordingly;

(e) “free-to-air-channel”, in respect of a
cable television network, means a
channel, the reception of which would
not require the use of any addressable
system to be attached with the receiver
set of a subscriber;

(f) “pay channel”, in respect of a cable
television network, means a channel
the reception of which by the
subscriber would require the use of an
addressable system to be attached to
his receiver set.]

Section 4-A. Transmission of
programmes through digital
addressable systems, etc.-
(1) Where the Central Government is
satisfied that is necessary in the public
interest so to do, it may, by notification
in the Official Gazette, make it
obligatory for every cable operator to
transmit or re-transmit programmes
of any channel in an encrypted form
through a digital addressable system
with effect from such date as may be
specified in the notification and
different dates may be specified for
different States, cities, towns or areas,
as the case may be:

Explanation For the purposes of this
section,-
(a) addressable system means an
electronic device (which includes
hardware and its associated
software) or more than one
electronic device put in an
integrated system through which
signals of cable television network
can be sent in encrypted form, which
can be decoded by the device or
devices, having an activated
Conditional Access System at the
premises of the subscriber within
the limits of authorisation made,
through the Conditional Access
System and the subscriber
management system, on the explicit
choice and request of such
subscriber, by the cable operator to
the subscriber;

(b) basic service tier means a package
of free-to-air channels to be offered by a
cable operator to a subscriber with an
option to subscriber, for a single price
to subscribers of the area in which his
cable television network is providing
service;

 

 

 

(c) encrypted, in respectof a single of
cable television network, means the
changing of such signal in a systematic
way so that the signal would be
unintelligible without use of an
addressable system and the expression
unencrypted shall be construed
accordingly;

(d) free-to-air channel, in respect of a
cable television network, means a
channel for which no subscription fee
is to be paid by the cable operator to
the broadcaster for its re-transmission
on cable;

(e) pay channel, in respect of a cable
television network, means a channel
for which subscription fees is to be paid
to the broadcaster by the cable
operator and due authorisation needs
to be taken from the broadcaster for its
retransmission on cable.

 

If the legislative intention was not to distinguish, and while
stating can be sent in an encrypted form in explanation (a), as
amended by Act 21 of 2011, it was intended to convey the idea that
the signals of cable television network can be sent in encrypted or
unencrypted form, there would have been no necessity of expressing
the position differently. When the situation has been differently
expressed the legislature must be taken to have intended to express
a different intention. (CIT v. East West Import and Export (P)
Ltd., ).
The setting and context in which the words can be sent in
encrypted or uncrypted form and can be sent in encrypted form are used
in explanation (a) to the pre-amended and amended Section 4-A(1)
respectively would require the words can be sent in encrypted or
unencrypted form in pre-amended explanation (a) not to be
understood as can be sent in encrypted form in the amended
explanation (a) (Ahmedabad (P) Primary Teachers Assn. v.
Administrative Officer ) for, if both the expressions were to mean
the same, it would have sufficed to repeat the earlier expression
and not to delete the words or unencrypted in the amended
explanation (a). It is not a sound principle of construction to add
words in a statute, if they can have no appropriate application in
circumstances conceivable within the contemplation of the Statute.
(Aswini Kumar Ghose13).
In explanation (b) to Section 4-A, which defines a basic service
tier, the words, and such channels are receivable for viewing by the
subscribers on the receiver set of a type existing before the commencement of the
Cable TV net work (regulation) amendment Act without any addressable system
attached to such receiver set in any manner, are deleted in the said
definition after its substitution by the 2011 amendment. While the
pre-amended definition of a basic service tier expressly provided for
channels to be received in a receiver set without an addressable
system attached to it, (meaning thereby receipt of signals in an
analog form), deletion of these words in explanation (b), after the
2011 amendment, shows that this choice is no longer available to a
subscriber. Similarly the change in the language of the definition
encrypted (which was defined under explanation (c) prior to its
amendment, and in explanation (d) after its amendment by the
2011 Act) is significant. While the pre-amended definition of
encrypted used the words so that the signal would be unintelligible without
a suitable receiving equipment, the said definition, after its substitution
by the 2011 Act, has replaced the aforesaid words with the words
so that the signal would be unintelligible without use of an addressable system.
While the pre-amended definition refers to a suitable receiving
equipment, the amended definition refers only to an addressable
system, which can only mean an addressable system as defined in
explanation (a).
Likewise, the definition of free to air channel in explanation (e)
to Section 4-A of the pre-amended 1995 Act has been substituted
by explanation (d) pursuant to the 2011 amendment. The words
the reception of which would not require the use of any addressable system to be
attached with the receiver set of a subscriber has been deleted in the
definition of free to add channel in the amended explanation (d) and,
instead, it stipulates that no subscription fee is to be paid for such
transmission of channels by the cable operator to the broadcaster.
While the definition of a free to air channel before the 2011
amendment specifically stipulated that the use of an addressable
system, to be attached with the receiver set of a subscriber, was not
required, the deletion of these words in the definition, after its
amendment by Act 21 of 2011, shows that an addressable system
(set top box) is required even to view free to air channels. However,
no subscription fee need be paid for its re-transmission. The
change in the definition of a pay channel (under explanation (f) of
Section 4-A before the 2011 amendment, and explanation (e)
thereafter) is also significant. While the pre-amended definition of
a pay channel was a channel, reception of which, a subscriber
would require the use of an addressable system to be attached to
his receiver set, this requirement is deleted in the definition after
the 2011 amendment, evidently because an addressable system,
attached to the subscribers receiver set, is now required for all
channels both free to air and pay channels.
Different use of words in two provisions of a statute is for a
purpose. If the field of the two provisions were to be the same, the
same words would have been used. (Kailash Nath Agarwal v.
Pradeshiya Industrial & Investment Corpn. of U.P. Ltd., ; B.R.
Enterprises v. State of U.P., ). When two words of different
import are used in a statute, it would be difficult to maintain that
they are used in the same sense, and the conclusion must follow
that the two expressions have different connotations. (Member,
Board of Revenue v. Arthur Paul Benthall ). When the
legislature has taken care of using different phrases in different
Sections, normally different meaning is required to be assigned to
the language used by the legislature. If, in relation to the same
subject-matter, words of different import are used, there is a
presumption that they are not used in the same sense. (Arthur
Paul Benthall55; Oriental Insurance Co. Ltd. v. Hansrajbhai V.
Kodala ).
Applying the mischief rule it is clear that the substituted
Section 4(A) and its explanation now require all signals to be
transmitted only in an encrypted form through a digital
addressable system, and transmission of signals in an analog form
is no longer permissible.

VIII. PENAL PROVISIONS OF THE 1995 ACT AND RULE 11-F
OF THE RULES : ITS EFFECT:

Sri C. Ramachandra Raju, Learned Counsel for the
petitioners, would submit that second proviso (a) to Rule 11-F need
not be referred to, as the notifications issued by the Central
Government refer only to Section 4-A, and not to Rule 11-F; and
the penal provisions of the Act are attracted only to such cable TV
network operators who send analog signals alone, without also
sending encrypted signals under DAS.
It is submitted, on behalf of the respondents, that second
proviso (a) to Rule 11-F makes it clear that the operator is required
to transmit channels only in an encrypted form, through the
digital addressable system, in a notified area; the provisions of the
1995 Act, when read harmoniously with the Rules, make it clear
that signals can only be transmitted in a digital form, and not in
the analog form, after expiry of the date stipulated in the
notification issued by the Government of India; Sections 11, 16 (1)
and 17 provide for the consequences of violation of Section 4-A;
and if Section 4-A is to be read as permitting transmission through
the analog form, besides transmission in an encrypted form, it
would render these penal provisions redundant and nugatory.
For the purpose of interpreting Section 4-A, it is permissible
to read the Rules as if it were a part of the 1995 Act. The complex
demands on modern legislation necessitates the plenary legislating
body to discharge its legislative function by laying down broad
guidelines and standards, to lead and guide as it were, leaving it to
the subordinate legislating body to fill up the details by making
necessary rules and to amend the rules from time to time to meet
unforeseen and unpredictable situations, and within the
framework of the power entrusted to it by the plenary legislating
body. (State of T.N. v. M/s. Hind Stone etc. ). Rules framed,
under the provisions of a statute, form part of the statute. But
before a rule can have the effect of a statutory provision, two
conditions must be fulfilled, namely, (1) it must conform to the
provisions of the statute under which it is framed; and (2) it must
also come within the scope and purview of the rule making power
of the authority framing the rule. (General Officer Commanding-
in-Chief v. Subhash Chandra Yadav ; Judgment in The
Prudential Cooperative Bank Ltd. v. The A.P. Cooperative
Tribunal at MJ Market, Nampally, Hyderabad ).
A statutory rule, while ever subordinate to the parent statute,
is otherwise to be treated as part of the statute and as effective.
“Rules made under the Statute must be treated for all purposes of
construction or obligation exactly as if they were in the Act and are
to be of the same effect as if contained in the Act and are to be
judicially noticed for all purposes of construction or obligation
(State of U.P. v. Babu Ram Upadhya ; Maxwell: Interpretation of
Statutes, 11th Edition page 49-50; Hind Stone57).
As the provisions of the Act and the Rules are required to be
read harmoniously, it is necessary to also refer to the relevant rules
to consider whether the amendment brought to the 1995 Act by
Act 21 of 2011, and the Rules, prohibit transmission of signals in
an analog form. It is evident, from a reading of Rule 11(2) of the
Rules, that only a multi-system operator, who desires to provide
cable television network services with addressable system, is
entitled to apply for registration to the Central Government. Cable
network services with an addressable system can be provided only
in an encrypted form, and not by the analog form of transmission
of signals. The second proviso to Rule 11-F requires the multi-
system operator to furnish an undertaking to the registering
authority, among others, that he shall transmit or retransmit
channels only in an encrypted form through a digital addressable
system in the notified areas. The said undertaking would require
the multi-system operator to transmit signals only in an encrypted
form, to decript which a subscriber is required to have a set top
box. The word only in the second proviso (a) to Rule 11F clearly
rules out the multi-system operator being permitted to transmit
signals in an analog form, in addition to transmission of signals in
the encrypted/digitised form. The requirement of public awareness
being created regarding the salient features of the digitised
addressable cable system in Rule 12(1), and the requirement of
Rule 13(1) for every subscriber in the notified areas, who is
desirous of receiving one or more channels, to approach the multi-
system operators for supply and installation of one or more set top
boxes in his premises, make it clear that all channels, whether free
to air or pay channels can now be viewed by a subscriber only
through a set top box, and not directly from the local cable
operator through the analog mode of transmission or signals.
The aforesaid Rules show that, after the sun set date of
31.01.2017, transmission of signals in Phase III areas can only
made in an encrypted/digitised form of transmission of signals,
and not in the analog form. The power to seize equipment under
Section 11 of the 1995 Act, and the penal provisions in Section 16
and 17, when read in conjunction with Section 4-A(1) and
explanation (a) thereto, make it amply clear that failure to transmit
signals in the encrypted/digitised form through the digital
addressable system, after the sunset date of 31.01.2017, would
render cable operators, in Phase III areas, liable for penal action
under Section 16 and 17 or for their equipment to be seized under
Section 11 of the 1995 Act.
IX. DO SECTION 4-A(1) AND EXPLANATION (a) THERETO
RELATE ONLY TO THE CHOICE OF CHANNELS

Sri C. Ramachandra Raju, Learned Counsel for the
petitioner, would submit that there is no reference, in Explanation
(a) to Section 4-A, to channels; the choice of channels is dealt with
separately in Section 4-A(3), 4-A(4) and 4-A(5); and Section 4-A(6)
and its proviso apply only to those subscribers who use DAS, and
not to those subscribers who choose analog form of transmission.
It is contended, on behalf of the respondents, that the words
choice and request of such subscriber in explanation (a) to Section 4-A
relate only to the choice of channels by the subscriber, and not to
the form of transmission of signals or to receipt of signals either in
an encrypted form or in an analog form; Section 4-A(3) and its
proviso shows that the option available to a consumer is whether to
have a tier of channel or a la carte; if digital addressable system
was not to be made compulsory, the requirement of Rule 12(1)
would become unnecessary; the choice of channels, available to a
subscriber, is regulated through the subscriber management
system which is available with the Multi-System Operators, and is
integrated into the set top box; and the choice of the subscriber
relates only to the channels sent in an encrypted form.
As noted hereinabove, the explicit choice and request of the
subscriber is referred to in the definition of an addressable system,
which can only mean that the choice or request, which the
subscriber can make, must be within the limits of the addressable
system, and not outside it. Section 4(3) stipulates that, on a
notification being issued under Section 4-A, no new registration
shall be granted to any cable operator who does not undertake to
transmit or re-transmit channels in an encrypted form through a
digital addressable system. The proviso to Section 4-A(6) obligates
the subscriber to use the digitable addressable system, to be
attached to the receiver set, for receiving programme transmitted on
any channel which can only mean both the free to air channel and
the pay channel. This rules out the subscriber exercising his
choice regarding receipt of signals through the analog form of
transmission. Section 4-A(4) confers power on the Central
Government to specify the number of free to air channels to be
included in the package of channels forming the basic service tier
which, in terms of explanation (b), means the package of free to air
channels to be offered to the subscriber for the exercise of his option
to subscribe for a single price. As both free to air channels and pay
channels are now required to be transmitted only through a
digitable addressable system, and such transmission requires the
subscriber to have a set top box attached to his Television set, it is
evident that the choice, which a subscriber can exercise, is only
with regards channels within the limits of the addressable system,
and not a choice regarding the mode of transmission of signals i.e.,
either in the analog or the encrypted form. The mere fact that
explanation (a) does not specifically refer to channels does not
necessitate the conclusion that the choice which a subscriber is
entitled to exercise is regarding the mode of transmission of signals
in an analog form or a digitised form, as the analog form of
transmission of signals is outside the addressable system and not
within it.
X. CONCLUSION:

Viewed from any angle, the impugned notice issued by the
Government of India dated 22.12.2016, prohibiting transmission of
signals in an analog form in phase III areas beyond the sunset date
of 31.01.2017, does not fall foul of Section 4-A(1) of the 1995 Act
as amended by Act 21 of 2011. The challenge, to the validity of the
said notice dated 22.12.2016, must therefore fail. The Writ Petition
is, accordingly, dismissed. However, in the circumstances, without
costs. The miscellaneous petitions pending, if any, shall also stand
dismissed.
________________________________
(RAMESH RANGANATHAN, ACJ)
_____________________________
(DR. SHAMEEM AKTHER, J)
Date: 01.06.2017

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