Music Broadcast Brief

Radio Interference

Music Broadcast Pvt. Ltd. v. Union of India (29th April, 2009) (Petition No. 73(c)/2008)

Facts the (2) The case of the Petitioner is that petitioner to restrain the respondent license never really went into effect. It from invoking a bank guarantee states that the grant of licenses issued The

case

concerns

efforts

by

submitted by it pursuance to the issuance to it to operate FM radio stations at of a FM broadcast license in the city of Nagpur and Patna was only a Pune. The petition praying for the return formality and that the nonof the bank guarantee made the commencement of broadcasting at the argument that the conditions for its centers was due to the inordinate delay on the part of the Respondent to invocation had not been satisfied. give a wireless operational license.

Issues

Besides

the

contention

of

the

Petitioner is that the term of the (1) What are the conditions for the return license was to commence from the of the Bank Guarantee? date of issuance of the wireless

The tribunal on examination of the terms of the Bank Guarantee held that it was conditional and could only be invoked by the respondent on the petitioner not paying the license fees

(2) What is the nature of the Bank operational license from the WPC Guarantee? wing, a license that it never received.

Decision (1) The tribunal first into the nature of (3) According to the Respondent, as the bank guarantee, since, if it, “is per clause 6 of the license Agreement conditional, then the conditions must be and clause 2.1 of Article 2 of schedule satisfied before the Bank Guarantee can C of the License Agreement, the be invoked. On the other hand, if it is an licensee

is

unconditional Bank Guarantee, then the installation party

in

whose

favour

the

required of

to

complete

infrastructure

and

Bank facilities within 12 months from the

Guarantee has been executed cannot be date of allocation of frequency by the stopped from invoking/encashing the WPC, i.e. by 29.12.2001. Immediately Bank

Guarantee.”

The

tribunal

on thereafter, it could have applied for

examination of the terms of the Bank the issue of the wireless operational Guarantee held that it was conditional license which would have been given and could only be invoked by the to it and that the non-issue of this respondent on the petitioner not paying license was only on account of the the license fees.

inaction of the Petitioner.

Radio Interference

Music Broadcast Pvt. Ltd. v. Union of India

Decision Cont.. (4) Ultimately the tribunal accepts the arguments of the petitioner and holds that the petitioner did not default in the payment of licenese fees, an event for the invocation of the bank guarantee. The logic applied by the tribunal was that since, a wireless operational license was not issued to the petitioner, it did not commence services and the license fees did not become payableand hence it did not commit a default making the bank guarantee payable. enterprises. The decision empasised that in the era of liberalization there cannot be any discrimination between private and state owned enterprises.

Ultimately the tribunal accepts the arguments of the petitioner and holds that the petitioner did not default in the payment of license fees, an event for the invocation of the bank guarantee. For regular information on the world of Media, Telecom, Technology and Law visit www.iltb.apargupta.com