In a ruling likely to have considerable impact on the cable networks and satellite television channels, the Bombay High Court has held that TV channels are not entitled to cut off the signal in the case of payment defaults since the interests of a third, silent party — the consumers or the TV audience — is involved.
Rejecting the plea of ESPN Software India from preventing a major Mumbai cable network, 7 Star Satellite Network, from carrying its signal, Justice F I Rebello in an interim order held that, “The courts in such matters must also bear this equitable consideration of the rights of the public...”
The High Court order says that the rights of the viewers who constitute a large section of people, but who are not necessarily parties in such cases, would be affected if the signals of monopoly services such as the sports channels ESPN and Star Sports are summarily cut off.
ESPN Software had filed an arbitration suit seeking to stop 7 Star Network from using the Hindujas’ IN Cable Net signal after ESPN had disconnected the direct signal to the 7 Star network for non-payment of dues.
Another ESPN grouse was that 7 Star Network was supplying the sports channels to over 1,500 hotel rooms without paying subscription fees.
While agreeing that 7 Star Network was in breach of a contract for tapping a signal from the Hinduja network, the High Court also cautioned that “these are contracts for providing services under which persons not parties to the contract but who subscribe to the service will be affected....The courts in such matters must also bear this equitable consideration of the rights of the public in such service contracts.”
The court, however, provided some relief to the sports channels by directing the cable network to deposit the arrears of subscription fees in court for the unpaid months.
It also allowed the channels to cut off the signal to the hotels if it was technically feasible and would not to affect the interests of the remaining viewing public.
At the same time, the court pointed out that after the 7 Star Network had failed to pay its dues for the month of July and August, ESPN Software had deactivated the signal and terminated the contract with the cable network.
In these circumstances when there was no subsisting contract, were the TV channels entitled to reliefs under the terminated contract, the court has asked.
ESPN’s case is that 7 Star Network, that serves major western suburban homes in Mumbai, had failed to pay subscription fees for July and August, and hence it had de-activated the signal of the two channels ESPN and Star Sports.
To get around this, the cable network had worked out an unauthorised deal to tap the signal from the Hinduja network.
The cable network, on the other hand, has pleaded that it has a legal agreement with Hindujas. Also, attempts to pay ESPN subsequently had been rebuffed, 7 Star has contended.