IN THE HIGH COURT OF DELHI AT NEW DELHI I W.P.(C) 24105/2005 STAR INDIA P. LTD. ..... Petitioner through Mr.Kailash Vasdev, Mr.A.S.Chandihok, Sr. Advocates with Mr.Amar Gupta, Mr.Dheeraj Nair, Mr.Karan Bharihoke, Ms.Ananya Kumar and versus THE TELECOM REGULATORY AUTHORITY OF INDIA & ORS. ..... Respondents through Mr.Rakesh Dwivedi, Sr.Adv. with Mr.Meet Malhotra & Mr. Ravi Chauhan, Advocates for TRAI Mr. P.P.Malhotra, ASG with Mr.Rajeeve Mehra, Mr.Chetan Chawla, Mr. Gaurav Duggal and Mr.Suresh Kait, Advocates for UOI W I T H II W.P.(C) 5332/2006 STAR INDIA P. LTD. .... Petitioner through Mr.Kailash Vasdev, Mr.A.S.Chandihok, Sr. Advocates with Mr.Amar Gupta, Mr.Dheeraj Nair, Mr.Karan Bharihoke, and Ms.Ananya Kumar versus THE TELECOM REGULATORY AUTHORITY OF INDIA & ORS. ..... Respondents through Mr.Rakesh Dwivedi, Sr.Adv. with Mr.Meet Malhotra & Mr. Ravi Chauhan, Advocates for TRAI Mr.Sudhakar V. Velankar, President, Grahak Hitvardhini Sarvajanik Sanstha WP(C) No.14877-78/2005 Page 1 of 79 W I T H III W.P.(C) 14877-78/2006 STAR INDIA P. LTD. ..... Petitioner through Mr.Kailash Vasdev, Mr.A.S.Chandihok, Sr.Advocates with Mr.Amar Gupta, Mr.Dheeraj Nair,Mr.Karan Bharioke and Mr.Shankhsengupta, versus THE TELECOM REGULATORY AUTHORITY OF INDIA & ORS. ..... Respondents through Mr.Rakesh Dwivedi, Sr.Adv. with Mr.Meet Malhotra & Mr. Ravi Chauhan, Advocates for TRAI Mr.P.P.Malhotra, ASG with Mr. Gaurav Duggal and Mr.Rajeev Mehra, Mr.Rakesh Gosain and Mr.Suresh Kait, Advocates for UOI Dr.A.M.Singhvi, Mr. Aryama Sundaram, Sr.Advocates with Mr.Manjul Bajpai, Ms.Payal and Mr.Aditya Awasthi, Advocates for Indus India Media- Intervenor Mr.Arun Jaitley, Sr.Advocate with Ms.Indu Malhotra, Mr.Vikas Mehta, Mr.Vibhav Srivastava, Ms.Sunita Ojha and Mr.Kunal Tandon,Advocates for Hathway Cable & Datacom Pvt. Ltd.- Intervenor W I T H IV W.P.(C) 16913/2006, W.P.(C) 16914/2006 SET DISCOVERY P.LTD. .... Petitioner through Mr. Soli J. Sorabjee, Sr. Advocate & Mr. A.S.P.I Chinoy, Sr. Advocate with Mr.Shankhsengupta, Mr.Gopal Jain,Ms.Mridul Sharma, Mr.Anup Bhambani and Ms. Kanika Agnihotri, Advocates WP(C) No.14877-78/2005 Page 2 of 79 versus THE TELECOM REGULATORY AUTHORITY OF INDIA & ORS. ..... Respondents through Mr.Rakesh Dwivedi, Sr.Adv. with Mr.Meet Malhotra & Mr. Ravi Chauhan, Advocates for TRAI Mr.P.P.Malhotra, ASG with Mr. Gaurav Duggal and Mr.Rajeev Mehra, Mr.Rakesh Gosain and Mr.Suresh Kait, Advocates for UOI Dr.A.M.Singhvi, Mr. Aryama Sundaram, Sr.Advocates with Mr.Manjul Bajpai, Ms.Payal and Mr.Aditya Awasthi, Advocates for Indus India Media- Intervenor Mr.Arun Jaitley, Sr.Advocate with Ms.Indu Malhotra, Mr.Vikas Mehta, Mr.Vibhav Srivastava, Ms.Sunita Ojha and Mr.Kunal Tandon,Advocates for Hathway Cable & Datacom Pvt. Ltd.- Intervenor Judgment Reserved on : May 7, 2007 Judgment Delivered on : July 9, 2007 CORAM: HON’BLE MR. JUSTICE VIKRAMAJIT SEN HON’BLE MR. JUSTICE J.P. SINGH 1. Whether reporters of local papers may be allowed to see the Judgment? Yes 2. To be referred to the Reporter or not? Yes 3. Whether the Judgment should be reported In the Digest? Yes J U D G M E N T VIKRAMAJIT SEN, J. 1. In Petition No.I (CW 24105/2005) Star India Pvt. Ltd. has prayed for a certiorari quashing the proviso to Section 2 (1) (k) of WP(C) No.14877-78/2005 Page 3 of 79 the TRAI Act; a certiorari for quashing Tariff Orders dated 15.1.2004, 1.10.2004, 1.12.2004 and 29.11.2005 and the Telecommunication (Broadcasting and Cable Services) Interconnection Regulation, 2004. It has further been prayed that the Court should declare that TRAI is not competent to regulate broadcasting services as also another declaration to the effect that these impugned Orders and impugned Interconnect Regulations are violative of Articles 14 and 19 (1) (a) and (g) as also Articles 301 to 307 of the Constitution. In Petition No.II (CW 5332/2006) Star India Private Limited has prayed for the setting aside an order of the Telecom Disputes Settlement and Appellate Tribunal in Appeal No.12(C) of 2005 titled Grahak Hitvardhani Sarvajanik Sanstha -vs- TRAI and (b) issuance of a writ of certiorari quashing the Telecommunication (Broadcasting and Cable) Services (Second) Tariff (Fourth Amendment) Order 2006 notified on 7.3.2006. In Petition No.III (CW 14877-78/2006) Star India Private Limited has prayed that the Telecommunication (Broadcasting and Cable) Services (Third) (CAS Area) Tariff Order 2006 and further that the Telecommunication (Broadcasting and Cable Services) (Second Amendment) Regulation, 2006 dated 24.8.2006 be struck down being violative of Articles 14, 19, 301 to 307 of the Constitution. In Petition No.IV WP(C) No.14877-78/2005 Page 4 of 79 (CW 16913-14/2006) filed by Set Discovery Private Limited the following prayers have been made: a) Issue writ, order or direction to declare that the TRAI has no jurisdiction or power under Section 11(2) of the TRAI Act to fix tariffs for Broadcasters; b) Issue writ, order or direction to declare that the TRAI has no jurisdiction or power under Section 11(2) of the TRAI Act to strike down S. 11(2) of the TRAI Act; c) Issue an appropriate writ, order or direction to quash the Notification dated 31.07.06 (F.No. 9/16/2004-BP&L [Vol. IV] issued by Ministry of Information and Broadcasting; d) Strike down clauses 3.3 and 9 to 12 of the Telecommunication (Broadcasting and Cable Service) Interconnection (Third Amendment) Regulation, 2006 (10 of 2006) dated 04.09.2006 (No. 6-4/2006-B&CS) as amended by the Telecom Regulatory Authority of India. 2. So far as Petition No.1 is concerned the prayer for quashing Tariff Orders was correctly not pressed before us. So far as Petition No.2 is concerned the Order in Appeal No.12(C) of 2005 was not pressed. Since the Respondents have asserted that the Petitions are not maintainable, we shall immediately deal with that point. WP(C) No.14877-78/2005 Page 5 of 79 MAINTAINABILITY OF PETITION SEEKING ENFORCEMENT OF FUNDAMENTAL RIGHTS BY A COMPANY 3. Mr. P.P. Malhotra, learned Additional Solicitor General and Mr. Rakesh Dwivedi, learned Senior Counsel for Telecom Regulatory Authority of India(TRAI), have laid a threshold challenge to the very maintainability of the present Petitions seeking the enforcement of the Fundamental Rights enshrined in Article 19 of the Constitution of India. They contend that the very least expected of the Petitioners was to plead facts establishing that they are Indian citizens. Their argument is that the Petitioners have deliberately refrained from doing so since they are in fact foreign companies transacting business in India. Indubitably the burden to clarify their status as citizens of India reposed entirely on the Petitioners and they have miserably failed to plead facts and figures establishing their eligibility. The nature of the shareholding of the Petitioners has been provided to us by the Respondents in terms of the affidavits dated 21.2.2007 filed on behalf of TRAI. So far as Star India Private Limited is concerned it appears that it is completely (98.85899 per cent) held by a foreign company named Buzzer Investments Ltd. registered in Mauritius, which in turn is owned by The News Corporation Ltd. which is registered in Australia. Star India WP(C) No.14877-78/2005 Page 6 of 79 Private Limited is the sole petitioner in WP(C) Nos.24105/2005 and 5332/2006. Learned ASG has also emphasized the fact that these petitions have been signed and verified by Mr. Himavat Chaudhuri, in the capacity of its Associate General Counsel and Vice-President(Legal). The status in the context of Article 19 has not been elucidated upon in the Petitions. WP(C) No.14877- 78/2005 has also been filed by Star India Private Limited through its General Counsel Head of Legal Affairs who has verified the Petition and is also Petitioner No.2. Remarkably, the Petition has not been signed by him. In the Petition it has been vaguely averred that Star India Private Limited is a company incorporated under the Companies Act, 1956, engaged in the business of distributing television channels and that Mr. Ajay K. Sharma is its shareholder. The details of the extended shareholding have not been furnished to the Court. Learned counsel for the Respondents have justifiably also underscored the fact that the petitions do not disclose the manner in which the Fundamental Rights of Mr. Sharma have been infringed. 4. Set Discovery Pvt. Ltd., Petitioner No.1 in WP(C) No.16913- 14/2006 is in essence a foreign Company. It has been deposed that - “so far as Set Discovery Pvt. Ltd. is concerned it is a Joint WP(C) No.14877-78/2005 Page 7 of 79 Venture of Set India Pvt. Ltd. and Discovery Communications India Pvt. Ltd. As regards Set India Pvt. Ltd., 60.57% shares are held by foreign companies and 7.80% shares are held by Foreign Institutional Investors. Thus the foreign shareholding is to the tune of over 68%, 31.63% shares are held by Indian companies and no share are held by individuals. As regards Discovery Communications India Pvt. Ltd., 100% shares are owned by foreign companies namely, Discovery Channel (Mauritius) Pvt. Ltd., Discovery Production Inc. and Discovery Communications Ltd., LLC. The first Company is based in Mauritius & the other two are based in Maryland, USA”. It is worth highlighting the fact that there are no individuals, NRIs or foreigners who are shareholders of Set India Pvt. Ltd.. Even though a labyrinth has been created by the Petitioners it is evident that Petitioner No.1 is essentially a foreign company. WP(C) No.2744/2005 has also been filed by Set Discovery Pvt. Ltd. through Mr. Amit Arora, its Regional Manager and Authorised Signatory. It is wholly inexplicable that the Petition has been verified by Mr. Kunal Dasgupta as Director of Set Discovery Pvt. Ltd., whereas in the array of Petitioners he is described as the CEO of Set India Pvt. Ltd.. 5. In this regard the following observations found in WP(C) No.14877-78/2005 Page 8 of 79 Secretary, Ministry of Information & Broadcasting, Govt. of India, -vs- Cricket Association of Bengal, (1995) 2 SCC 161 (abbreviated hereunder as 'CAB') have been relied upon on behalf of the Petitioners. 73. It is also contended that the exercise of right claimed in the present case is by BCCI/CAB and its office bearers who are citizens of India. Merely because foreign equipment and technical and personnel are used as collaborators to exercise the said right more effectively, it does not dilute the content of Article 19(1)(a) nor does it become an exercise of right by non-citizens. In this connection, it is emphasized that the Doordarshan is also using Worldtel, a foreign agency. Most of the newspapers in India are printed on machines imported from abroad. A newspaper may also have a foreigner as its manager. However, that does not take away the right of the newspaper under Article 19 (1) (a). They are only instances of technical collaboration. Apart from it, every citizen has a right to information as the same cannot be taken away on grounds urged by the MIB. 6. On the other hand, the learned counsel for the Respondents have taken us through a catena of cases containing reflections on the legal position of whether a company can file a petition seeking enforcement of Fundamental Rights. In The State WP(C) No.14877-78/2005 Page 9 of 79 Trading Corporation of India -vs- The Commercial Tax Officer, Visakhapatnam, AIR 1963 SC 1811 : 1964 (4) SCR 99 (STC case in short), the nine-Judges Bench of the Supreme Court clarified that the Constitution deliberately and advisedly makes a clear distinction between Fundamental Rights available to 'any person' and those guaranteed to 'all citizens'. Article 19 inter alia guarantees citizens of India (a) the freedom of speech and expression and (g) the right to carry on any occupation, trade or business. Their Lordships thereafter observed that the provisions of the Constitution of India in Part II relating to 'citizenship' are clearly inapplicable to juristic persons; and that neither the provisions of Constitution Part II nor of the Citizenship Act confer the right of citizenship on recognized citizens, any person other than a natural person; that they do not contemplate a corporation as a citizen. Their Lordships poignantly opined that Part-III of the Constitution, which proclaims Fundamental Rights, was very accurately drafted, delimiting rights like freedom of speech and expression, right to practice any profession etc. as belonging to citizens only and the more general rights like the right to equality before the law, as belonging to all persons; that corporations may have nationality in accordance with the country of their incorporation but that does not necessarily confer WP(C) No.14877-78/2005 Page 10 of 79 citizenship on them. 7. This is also the view expressed in Dharam Dutt -vs- Union of India, (2004) 1 SCC 712. We are of the opinion that where companies approach the Court complaining of violation of Fundamental Rights the pleadings must, in the nature of basics, clearly spell out the manner in which individuals or natural persons are affected. In all the writ petitions before us this aspect has been glossed over, and in our considered opinion obviously for the reason that when the corporate veil is lifted the alleged infraction of these rights pertain to a negligible number of citizens. The gravamen of the assault is predicated on the infringement of the right to freedom of speech and expression. The Petitioner must disclose the manner in which Fundamental Rights of a citizen have been violated. It may be possible, in an exceptional case, that although the Petitioner is an incorporated entity, further compounded by the fact that it is not an Indian citizen, the views of reputed Indian journalists have been silenced. In such cases, the siege may eventually turn out to be successful. This does not detract from the necessity to carefully plead necessary details and circumstances showing that the plaintive cry is of an Indian citizen and not of a WP(C) No.14877-78/2005 Page 11 of 79 foreigner. 8. Indo-China Steam Navigation Co. Ltd. -vs- Jasjit Singh, Additional Collector of Customs, 1964 (6) SCR 594 was decided by a Constitution Bench comprising five members of the larger STC Case. The facts were that a vessel had contravened the provisions of Section 52-A of the Sea Customs Act when it entered the Calcutta Port. Learned counsel for the Petitioner had sought to argue that if mens rea was not an essential element of Section 52-A that provision would be ultra vires Articles 14, 19 and 31(1) and as such unconstitutional and invalid. The Constitution Bench observed that the Appellant was “not only a company, but also a foreign company, and as such is not entitled to claim the benefits of Article 19. It is only citizens of India who have been guaranteed right to freedom enshrined in the said Article. ..... The plain truth is that certain rights guaranteed to citizens of India under Article 19 are not available to foreigners and pleas which may successfully be raised by the citizens on the strength of the said rights guaranteed under Article 19 would, therefore, not be available to foreigners”. This very question thereafter arose before another Constitution Bench in Tata Engineering and Locomotive Co. Ltd. (Telco) -vs- State of Bihar, WP(C) No.14877-78/2005 Page 12 of 79 1964(6) SCR 885 and yet again was rejected. Following the STC case the Constitution Bench opined that the “Petitioners cannot be heard to say that their shareholders should be allowed to file the present petitions on the ground that, in substance, corporations and companies are nothing more than association of share-holders and members thereof. In our opinion, therefore, the argument that in the present petition we would be justified in lifting the veil cannot be sustained”. Thereafter the decision of the Bench of eleven Judges in Rustom Cavasjee Cooper -vs- Union of India, 1970 (1) SCC 248 reiterated the same legal position. It opined that a company registered under the Companies Act is a legal person, separate and distinct from its individual members. All its shareholders may not be entitled to move a petition for infringement of the rights of the company unless by the impugned action his right had also been infringed. On facts it was found that the Petitioner had challenged the alleged infringement of his own rights and hence he had the legal capacity to file and pursue the writ petition. The challenge concerned the commercial interests of the Petitioner as a shareholder and not for safeguarding his freedom of speech and expression. 9. The Constitution Bench thereafter encountered this very WP(C) No.14877-78/2005 Page 13 of 79 legal nodus in Benett Coleman & Co. -vs- Union of India, (1972) 2 SCC 788. Their Lordships noted that neither in Express Newspapers (P) Ltd. -vs- Union of India, 1959 SCR 12 : AIR 1958 SC 578 nor in Sakal Papers (P) Ltd. -vs- Union of India, (1962) 3 SCR 842 : AIR 1962 SC 305 had any plea been raised about the maintainability of the writ petition. It bears highlighting that so far as Sakal was concerned it had only two shareholders who had joined the litigations as petitioners. Furthermore, the case projected by Sakal was that owing to its comparatively wide circulation, it was instrumental in playing a leading part in the dissemination of news and views and in moulding public opinion in matters of public interest. Sakal had also asseverated that it was not aligned with any political party and that the public referred to and replied upon the opinions articulated in it on controversial issues. We wish to emphasize that this role, which is quite distinct to simple entertainment, has always been considered so vital to nation building and social awareness that it has in almost all legal systems been accorded preeminence. Hence it has been viewed as a freedom and not a mere right. To put entertainment on parity with freedom of speech and expression seems to us to trivialize the function of the press and therefore to be logically and legally incongruent. After discussing WP(C) No.14877-78/2005 Page 14 of 79 the cases already mentioned by us above, their Lordships spoke as follows: 22. In the Bank Nationalization case (supra) this Court held the statute to be void for infringing the rights under Articles 19(1)(f) and 19(1)(g) of the Constitution. In the Bank Nationalization case (supra) the petitioner was a shareholder and a director of the company which was acquired under the statute. As a result of the Bank Nationalization case (supra) it follows that the Court finds out whether the legislative measure directly touches the company of which the petitioner is a shareholder. A shareholder is entitled to protection of Article 19. That individual right is not lost by reason of the fact that he is a shareholder of the company. The Bank Nationalization case (supra) has established the view that the fundamental rights of shareholders as citizens are not lost when they associate to form a company. When their fundamental rights as shareholders are impaired by State action their rights as shareholders are protected. The reason is that the shareholders' rights are equally and necessarily affected if the rights of the company are affected. The rights of shareholders with regard to Article 19(1)(a) are projected and manifested by the newspapers owned and controlled by the shareholders through the medium of the corporation. In the present case, the individual rights of freedom of speech and expression of editors, Directors and shareholders are all exercised through their newspaper through which they speak. The press reaches the public WP(C) No.14877-78/2005 Page 15 of 79 through the newspapers. The shareholders speak through their editors. The fact that the companies are the petitioners does not prevent this Court from giving relief to the shareholders, editors, printers who have asked for protection of their fundamental rights by reason of the effect of the law and of the action upon their rights. The locus standi of the shareholder petitioners is beyond challenge after the ruling of the Supreme Court in the Bank Nationalization case (supra). The presence of the company is on the same ruling not a bar to the grant of relief. 10. A couple of years thereafter, another Constitution Bench in the case reported as The State of Gujarat -vs- The Ambica Mills Ltd., Ahmedabad, (1974) 4 SCC 656 recorded that in view of Telco, Cooper and Benett Coleman it had been settled “that a corporation is not a citizen for the purposes of Article 19 and has, therefore, no Fundamental Right under that Article”. This conundrum has also been considered by H.M. Seervai in the treatise “Constitutional Law of India” IVth Edn. where the learned author and distinguished advocate had expressed the view that this state of the law is unsatisfactory. However, after culling out and expressing the view in paragraph 10.26 on page 708, the opinion has been expressed that a corporation seeking to enforce Fundamental Rights must fulfill two conditions - (a) the WP(C) No.14877-78/2005 Page 16 of 79 majority of its shareholders must be Indian citizens and (b) its management and control must in the hands of Indian citizens. This discussion discloses the undisputed view that foreigners and foreign corporations cannot enforce the Fundamental Rights enshrined in Part III of the Constitution. 11. We have already analyzed the respective shareholding of the Petitioners, brushing aside the skein of holding companies, and the minuscule and infinitesimal number of shares in Indian hands. Mr. Shenoy has forcefully posited that the Indian Constitution, as explained in Benett Coleman, does not consider it essential that a `class action' should be initiated in order to successfully withstand an assault on the Fundamental Right of a citizen; nay, even a single citizen has the inviolable right to enforce compliance and respect to his Fundamental Rights. In our opinion whilst there is no scope for applying a quantitative test a qualitative test is essential in such matters. As has specifically been observed in Benett Coleman the rights of a writer or Editor of freedom of speech and expression must be protected. But these rights cannot be confusedly and incorrectly enforced in favour of persons not falling in this category. A single shareholder may have sufficient locus standi to fight the WP(C) No.14877-78/2005 Page 17 of 79 cause of a company whose commercial interests are common to his, as had happened in the Bank Nationalization cases. The employment of the word `citizen' should not be washed away or watered down. Bennet Coleman was not a foreign company. The right of speech and expression, being zenithal in nature, is a freedom incomparable to any other Fundamental Right. Whilst its amplitude ought not to be circumscribed, curtailed or restricted its immense impact on the population requires its availability only to citizens. EcoSOC in terms acknowledges and advocates the wisdom in preserving all existing cultures and customs. If freedom of speech and expression is made available to foreign entities it would directly result in imposing their foreign cultural values on our society. In fact they are already doing this unabashedly without any check or restraint through their so- called family-life and other so-called entertainment serials. They are displaying naked vulgarity starting with innocent kids to above 60 years old women. They are teaching bad manners, adultery, rapes, innovative methods of murders, illegitimacy and all sorts of indecencies and crimes to the Indian families which were hitherto foreign to Indian culture. They have hijacked and monopolized the media from 24 X 7 hours. They are unashamedly indulging in cultural sabotage from within the WP(C) No.14877-78/2005 Page 18 of 79 country and their role is like the role of Anti National people and Public Enemies and is akin to the role of terrorists but under the cover of media and in the name of freedom of speech and expression. We cannot comprehend a more belligerent use of these freedoms. The Respondents and their associates have apparently shut their eyes, may be for ulterior motives. The economic strength of Western countries has an irresistible effect on changing the mindset of developing nations and these societies tend to ape, copy, imitate and replicate the economically advanced nations. Courts should be loath to permit such an assault and invasion by indiscriminately extending freedom of speech and expression under Article 19(1)(a) to persons who are not Indian citizens. It would be relevant to recall that in CAB the Supreme Court had observed that -- “what distinguishes the electronic media like the television from the print media or other media is that it has both audio and visual appeal and has a more pervasive presence. It has a greater impact on the minds of the viewers and is also more readily accessible to all including children at home.” In