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Manthan must clear dues for MSM MD to continue with signals: TDSAT

MUMBAI: The Telecom Disputes Settlement & Appellate Tribunal (TDSAT) has directed MSM Media Distribution not to disconnect signals to multi-system operator (MSO) Manthan Broadband Services, provided the latter pays Rs 4.69 crore (Rs 46.9 million) as outstanding dues.

The MSO has to make the payment in three tranches, Rs 1.5 crore (Rs 15 million) by 25 December, Rs 1.5 crore (Rs 15 million) 15 days thereafter, and the balance amount after adjusting TDS amount by 31 January 2016.

As per the notices issued, the MSO had to pay Rs 4.04 crore (Rs 40.4 million) for Kolkata and Rs 55.6 (Rs 5.56 million) for Ranchi to MSM Media Distribution. Similarly, it had to pay Rs 8.2 lakh (Rs 0.82 million) for Kolkata and Rs. 1.12 lakh (Rs 0.11 million) for Ranchi.

The tribunal noted that the subscription agreement between the parties had expired on 31 March and that no fresh agreement had been signed to date.

The regulation allows three months period after expiry of the existing agreement to enable the parties to negotiate and arrive at a fresh agreement.

During this period, the terms of the old agreement are applicable but when the fresh agreement is signed, the same have to abide by the terms of the new agreement, the tribunal stated.

The tribunal said that the MSO must clear the outstanding amount of subscription dues as per the old agreement if it wishes to continue with the signals since the parties have not been able to come to any agreement even after three months.

The tribunal also ruled that the MSO cannot insist on adjustment of placement fees against the dues of licence fee since the subscription fee and placement charges are governed by two separate agreements, which do not even subsist as on date.

Manthan counsel Navin Chawla submitted that as per understanding between the parties, the MSO was getting a credit period of two months for payment of subscription dues.

He further submitted that as per the invoices issued by the MSO, the distributor owes a sum of Rs 4.73 crore (Rs 47.3 million) as on October 2015 towards placement charges of the channels.

He also claimed that after netting off the placement charges, MSM Media Distribution has to pay an amount of Rs 1.58 crore (Rs 15.8 million) to the MSO.

He also referred to the minutes of the meetings between the parties held on 11–13 August, as per which the distributor had admitted placement charges of Rs 2.97 crore (Rs 29.7 million) until July 2015.

MSM Media Distribution counsel Ramji Srinivasan submitted that there is no netting-off clause in the subscription agreement for adjusting subscription fees against placement charges and that the agreement for placement had in any case expired on 31 March, and the MSO, therefore, cannot claim any placement charges in the absence of any such agreement.

He further submitted that the minutes of the meetings dated 11–13 August 2015 were part of a negotiation process and cannot be relied upon in the absence of a concluded agreement.