TDSAT rejects MSO’s level-playing-field plea, orders ₹47.4 lakh payment to Culver Max

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) directed multi-system operator (MSO) Multicity Digital Consortium Pvt Ltd to pay Culver Max Entertainment Pvt Ltd, now Sony Pictures Networks India, ₹47.39 lakh in outstanding television channel subscription dues, plus simple interest at 9% per annum from the petition filing date until actual payment.

In its judgment, the tribunal, presided over by Justice Ram Krishna Gautam, directed Multicity Digital Consortium to deposit the amount with the tribunal within two months of the order. The petition was decreed with costs.

The dispute centred on unpaid subscription charges under an agreement between the broadcaster and the MSO for distributing Sony television channels across Tamil Nadu and Karnataka. The tribunal held that Culver Max established its claim through the subscription agreement, invoices, account statements and evidence submitted during the proceedings.

The ruling also rejected the MSO’s defence that alleged discriminatory commercial arrangements with rival cable distributors, the availability of Sony channels on its over-the-top (OTT) platform SonyLIV, and the broadcaster’s alleged regulatory violations justified withholding payment.

Culver Max originally sought ₹47.39 lakh, along with interest at 18% per annum. The tribunal, however, awarded simple interest at 9% per annum, in line with the rate it granted in previous cases, taking into account the prevailing financial and fiscal circumstances.

Dispute over subscription payments

According to the judgment, Sony Pictures Networks India entered into a subscription agreement with Multicity Digital Consortium on February 25, 2019, authorising the MSO to retransmit its television channels in digital addressable system areas of Tamil Nadu. The agreement was subsequently extended, and the authorised territory expanded to Karnataka in June 2020 at the MSO’s request.

The broadcaster continued supplying its channels to the MSO and regularly raised monthly invoices for subscription charges. Under the agreement, payments were due within 15 days of receiving the invoices.

Culver Max contended that Multicity Digital Consortium failed to clear its dues despite receiving the invoices. Following repeated requests for payment, the broadcaster issued a disconnection notice on February 26, 2021, under the Telecommunications (Broadcasting and Cable) Services Interconnection (Addressable System) Regulations, 2017.

After the outstanding payments remained unpaid, the broadcaster disconnected its signals to the MSO on April 3, 2021, according to the petition. A further demand notice was issued on May 6, 2021.

The outstanding amount comprised ₹41.72 lakh for Tamil Nadu and ₹5.68 lakh for Karnataka, totaling ₹47.39 lakh.

Culver Max approached TDSAT seeking recovery of the subscription dues, interest and relief against any unauthorised retransmission of its channels after disconnection.

MSO alleges unequal treatment by broadcaster

Multicity Digital Consortium contested the recovery claim, arguing that the broadcaster failed to maintain a non-discriminatory playing field among distributors, as required under the applicable interconnection regulations.

The MSO alleged that Culver Max entered into fixed-fee arrangements with larger competing MSOs, including Siti Cable Networks and GTPL, allowing them to offer cable television services to local cable operators at lower rates. According to the MSO, this led to local cable operators migrating from its network to rival distributors without clearing their outstanding dues or returning set-top boxes.

The MSO claimed it suffered losses of approximately ₹24 crore, including ₹3 crore in unpaid subscription fees from local cable operators and ₹21 crore towards set-top boxes allegedly not returned.

It argued that these circumstances had weakened its business and affected its ability to recover payments from its distribution network. It also sought access to the broadcaster’s interconnection agreements, monthly subscriber reports and account statements relating to competing MSOs to substantiate its allegations.

However, the tribunal found that the MSO had not produced documentary or oral evidence to establish the alleged discriminatory treatment. It noted that the respondent had not summoned the relevant witnesses, sought disclosure of the documents through an appropriate application, or sought cross-examination of the broadcaster’s witness on these allegations.

The tribunal held that merely raising allegations in a written reply did not constitute proof.

It also observed that the alleged non-payment by local cable operators and non-return of set-top boxes were separate issues that the MSO could pursue in appropriate proceedings against those operators. They were not directly connected to the subscription dues Culver Max claimed in the present case.

SonyLIV pricing and regulatory allegations rejected

The MSO also argued that SonyLIV offered Sony channels and programmes at a lower effective price than the charges imposed under the cable distribution agreement. It contended that the availability of content across multiple devices on the OTT platform encouraged subscribers to move away from its cable network, creating an uneven competitive environment.

Additionally, the MSO alleged that the broadcaster was distributing live television channels directly to subscribers without the requisite permissions and had violated the Cable Television Networks (Regulation) Act, 1995, as well as Ministry of Information and Broadcasting guidelines.

Culver Max countered that OTT services were distinct from the retransmission of television signals by cable distributors and fell outside the scope of the TRAI Act and the applicable interconnection regulations. It also maintained that no statutory prohibition existed on a broadcaster making its content available directly to subscribers, subject to the applicable requirements.

The tribunal found the MSO failed to place the relevant regulatory provisions or supporting evidence on record to establish the alleged violations. It accepted that the burden of proving these allegations rested on the respondent and held that the defence did not justify withholding payment under the subscription agreement.

The judgment also noted that the MSO had not produced evidence of having raised complaints about the alleged pricing disparity or OTT distribution during the continuation of the agreement. Instead, it had sought an expansion of the authorised territory to Karnataka in June 2020.

The tribunal treated the allegations concerning discriminatory pricing, SonyLIV and direct streaming as unsubstantiated in the proceedings.

Tribunal finds subscription agreement and dues established

A key consideration in the ruling was the evidence supporting the continuation of the subscription agreement beyond its initial one-year term.

While the MSO disputed the extensions, the tribunal examined email correspondence between the parties and noted that the broadcaster had repeatedly communicated extensions for successive one-month periods. It also considered the MSO’s subsequent request to expand the authorised territory to Karnataka, which the broadcaster accepted in June 2020.

The tribunal concluded that the agreement had continued and that the broadcaster had established the basis for raising invoices for both states.

It further noted that although the MSO’s counsel argued during the proceedings that subscription dues had been paid, the respondent had not submitted account statements or proof of payment to demonstrate that the invoices had been settled.

The tribunal found that Culver Max substantiated its claim through the agreement, invoices, statements of account, disconnection notice and the testimony of its distribution sales manager.

It consequently directed Multicity Digital Consortium, through its directors, to deposit ₹47,39,820 with the tribunal within two months, together with simple interest at 9% per annum from the date of filing the petition until the date of actual payment. In the event of default, the amount would be recovered through execution proceedings.

The ruling reinforces the importance of documentary evidence in subscription recovery disputes between broadcasters and distribution platforms, particularly where operators seek to defend non-payment by citing commercial grievances or alleged regulatory breaches that remain unsubstantiated in the proceedings.