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TDSAT disposes of NSTPL’s application as MIB cancels DTH tripartite agreement

MUMBAI: The Telecom Disputes Settlement & Appellate Tribunal (TDSAT) has disposed of headend-in-the-sky (HITS) operator Noida Software Technology Park Ltd’s (NSTPL) contempt application against the Ministry of Information & Broadcasting (MIB) as the latter has done away with the provision of tripartite agreement between direct-to-home (DTH) firms and lenders.

The ministry had issued a cancellation order dated 5 October whereby it did away with the tripartite agreement policy that allowed DTH companies to utilise the licence agreement as security to lenders for seeking financial aid from banks or financial institutions.

The HITS operator had filed a contempt application against the ministry for failing to comply with tribunal’s order dated 27 May. The tribunal had directed the ministry to take a fresh decision on NSTPL’s request of assigning its HITS licence as security for bank loan within two months from the date of receipt of a copy of the order.

When the matter came up for hearing, MIB counsel Sandeep Mahapatra produced the copy of the order dated 5 October, by which the ministry’s earlier order dated 3 December 2009 was cancelled.

On 3 December 2009, the ministry had passed an order that made it mandatory for all DTH licensees planning to utilise their licence agreement as security for financial loan/assistance for the setting up/operation of DTH services to execute a tripartite agreement as per a prescribed format between the licensor (the President of India acting through the MIB director of broadcasting policy and legislation), the licensee and the lenders.

The tribunal disposed of the application stating that it no longer survives in view of the issuance of the order by the ministry.

NSTPL was seeking to be treated on a par with DTH companies and to utilise its licence as security to lenders for financial aid from financial institutions. The ministry had rejected NSTPL’s request to keep its HITS licence as a collateral for seeking a loan of Rs 15 crore (Rs 150 million) from a bank for its working capital.

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