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TDSAT hands over affairs of Mahuaa to a committee comprising Tata Sky and 4 MSOs

MUMBAI: In an unprecedented judgment, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has formed a committee to manage the affairs of Mahuaa Media, the owner of Bhojpuri channel Mahuaa TV, comprising distribution platforms and the company’s promoter PK Tewari, who is facing charges of financial fraud and is currently out on bail.

The committee consists of a representative each from DEN Networks, DigiCableComm, Wire & Wireless India Ltd (Siti Cable), Indian Cable Net Co Ltd (ICNCL) and Tata Sky, besides Tewari.

The five distribution platforms are seeking recovery of outstanding dues from Mahuaa.

Mahuaa Media owes a total of Rs 33.44 crore (Rs 334.4 million) to the five companies. The company owes Tata Sky Rs 17.26 crore (Rs 172.6 million), the highest amount to be recovered by the distribution platform operators.

Mahuaa has to pay ICNCL Rs 5.27 crore (Rs 52.7 million). It owes Rs 4.18 crore (Rs 41.8 million) to DEN, Rs 4.31 crore (Rs 43.1 million) to Siti Cable, and Rs 2.42 crore (Rs 24.2 million) to DigiCableComm.

The tribunal said that the committee will act with the sole purpose of improving and strengthening the affairs of Mahuaa and to promote its finances so as to enable it to gradually and in a time-bound manner fully satisfy the five decrees against it. The decree in this case is the outstanding amount Mahuaa has to pay as per the TDSAT order,

It further stated that the committee must hold its first meeting within 15 days from the date of this order, which is 14 June.

The convener for the first meeting will be the Tata Sky representative as it has the highest amount to recover from Mahuaa. The convener will fix the date, time and the venue of the meeting taking into account the convenience of all concerned.

In the first meeting of the committee, Tewari will have to make a full and complete disclosure of all the immovable, movable, tangible and intangible assets of Mahuaa, all its bank accounts – [other than account nos.0109102000036810 (IDBI Bank), 11921900000231 (DCB Bank) and 200999454000 (Induslnd Bank)], all the details relating to its business, all the sources of its revenue, its liabilities and the expenses being incurred by it.

In case Mahuaa has or gets any receipts in cash (as evidenced from its three bank accounts), Tewari will have to make full disclosure of the same to the committee and the committee shall take control of the cash receipts, which shall be appropriated for no purpose other than the legitimate business interests of Mahuaa.

The committee will then take full and effective and physical control of the office(s) and records of Mahuaa, all its immovable, movable, tangible and intangible assets including its business as a broadcaster of TV channels, subject to any orders passed by a court or any lawful authority in respect of the Mahuaa assets or its running business.

All the decisions by the committee will be taken by majority vote. Every member, including Tewari, will be entitled to one vote. The committee will have to maintain a minute book of its meetings.

The committee in its first meeting shall also frame the rules of procedure for exercise of authority of management over the affairs of Mahuaa as directed above, keeping in mind its object and purpose, the TDSAT order said.

The tribunal said that the company will take decisions and do all acts aimed at improving the business of Mahuaa and enhancing its finances. The committee shall take all administrative as well as business decisions concerning the affairs of Mahuaa.

It can negotiate with third parties, enter into business arrangements with third parties and execute agreements on behalf of Mahuaa with any third party. It can also act through smaller sub-committees with appropriate delegation of its powers as per the rules of procedure framed by it.

The committee may, if it so decides, appoint a chartered accountant/auditor to audit the financial affairs of Mahuaa, including all its transactions with ‘related/sister companies’ such as Pragya Vision, for the past three years with a specific mandate and view to take note of and report on monies that might have been defalcated/misappropriated/siphoned off by the directors of Mahuaa either by themselves or in concert or collusion with directors/stakeholders in related companies not excluding Pragya Vision.

The committee will not act, directly or indirectly, in derogation of or contrary to any order concerning Mahuaa made by a court or any lawful authority. It will also not alienate or encumber any immovable or movable properties of Mahuaa without the prior permission of the tribunal.

Any cheques on behalf of Mahuaa will continue to be issued under the signature of Tewari. But from this date no cheque will be signed by Tewari unless it has the sanction in any special or general decision by the committee.

Any cheque signed by Tewari from this date without the sanction of the committee’s decision would be invalid and make him liable for the consequences, including the breach of this order, the tribunal said.

The committee will have to submit a financial report before the TDSAT by the fifteenth day of the expiry of each financial quarter. It will be open to the committee to approach the tribunal for any clarification or permission or instructions or directions on any specific issue.

Any challenge to the decision of the committee by any third party or any dispute arising from any agreement executed by the committee on behalf of Mahuaa with any third party shall be an action against Mahuaa or a dispute between Mahuaa and the concerned third party and shall be defended/prosecuted on behalf of Mahuaa by the committee and all expenses in that connection shall be debited from Mahuaa’s accounts, the tribunal stated.

While putting up the matter for order on 22 August, the tribunal said that the formation of the committee and its appointment as receiver does not in any way discharge the five decrees in question and the rights of the decree holders against Mahuaa under their respective decrees shall remain subsisting until the decrees are fully satisfied in accordance with law.

The execution proceedings against Mahuaa commenced with the filing of the Execution Application on behalf of DEN on 15 January 2014. Later on, the other four decree holders joined in the proceedings with their respective execution applications filed on different dates, leading to a consolidated proceeding against Mahuaa on behalf of all the five decree holders.

Tewari, the managing director of Mahuaa, after his release from custody on the basis of an order passed by the Bombay High Court’, first appeared in person before the tribunal in connection with the present proceedings on 19 March 2015.

Since then, he has filed several affidavits undertaking to pay the outstanding amounts to the five companies. However, no payment has been made to any of the petitioners in breach of the undertakings.

Under these circumstances, the tribunal expressed the view that the breach of undertakings submitted on oath and the other acts of omission and commission by Tewari brought the case under clause (c) of section 51 of the Code of Civil Procedure (CPC).

It further noted that the arrest and detention of Tewari in prison for three months would serve no purpose other than giving the distribution companies some retributory satisfaction. Taking a positive course, the tribunal proposed to proceed in terms of clause (d) of section 51 of the CPC that might help in the discharge of the decrees, even if partially.