INDIA BUSINESS WORLD - FEBRUARY 2007
The Month that was ...

SC TELLS TDSAT TO DECIDE ON VALIDITY OF TRAI'S NEO ORDER

The Supreme Court asked TDSAT to decide on the validity of TRAI order lowering price for the Neo Sports channel from Rs 58.50 to Rs 37.25 without taking into account findings of Delhi High Court. The High Court had refused to interfere with TRAI order of January 11 which lowered the price for the petitioner Neo Sports on the ground that it has right for price fixation to protect the interest of consumers.

A bench comprising Justice SB Sinha and Justice Markandey Katju said TDSAT will decide the issue on merits without going into the findings of the high court. The matter is schedule for hearing before the Tribunal on March 13.

The court passed the order after taking into account the submissions of senior counsel Harish Salve appearing for the petitioner Neo Sports who said much prejudice will be caused to it if tribunal took into account the observations of the high court. TRAI direction lowering of price for the petitioner was illegal, said Salve.

However, TRAI counsel Sanjay Kapur said that the Authority is empowered to fix prices of the channels under Section 13 of the TRAI Act. The high court had turned down the plea of Neo Sports that its charge of Rs 58.50 will have no effect on consumers.

On January 19, the high court had said: "We are in no manner of doubt that it is always the consumer who will have to bear the brunt of price fixation." The petitioner had said that it was a broadcaster and will recoup its investments from the multi system operators and local cable operators.

Rejecting the plea, the court had said: "It is indeed sanguine and unrealistic that regardless of whether the charge is Rs 37.25 or Rs 58.50, the effect would not percolate downwards to the consumers."

The high court had also rejected the plea of Neo Sports which had said that it had paid about Rs 2700 crores to acquire the rights from BCCI and due sanctity must be given to commercial contracts. "It is quite reasonable to expect a braodcaster first to make an assessment of what the rate likely to be approved by the TRAI would be and only thereafter make a bid for the braodcasting rights," the high court had said.