Case: Star Sports India Pvt Ltd Vs. Prasar Bharti

6. The appellant (formerly ESPN Software India Private Limited) is the sole and exclusive distributor of some sports channels in India. These include ESPN, Star Sports, Star Sports 2 and Star Cricket. These channels telecast various sporting events such as ICC Cricket, BCCI Cricket, Formula 1, Barclays Premier League Football, ICC Cricket World Cup and Wimbledon etc. for telecasting these events, the appellant enters into a contract with the sporting events organizers. These broadcasting rights have also been acquired from International Cricket Council (ICC) to broadcast cricket events organised by ICC for the Indian territory.7. Keeping in mind the mandate of Section 3 of the Sports Act, the appellant informed respondent no. 1, i.e., Prasar Bharati on March 07, 2013 that it would be sharing the live signals with Prasar Bharati of cricket matches organised by the ICC. It was followed by another letter dated March 14, 2013 wherein the appellant stated that such live signals, which the appellant would be sharing with Prasar Bharati, shall contain certain added features comprising of commercial elements. Prasar Bharati replied vide letter dated April 06, 2013 informing the appellant that under the law, appellants obligations is to share the signals without any commercials. The appellant responded by stating that under the contract with the sporting event organizers, the appellant was receiving the feed containing certain advertisements by the organizer of the sporting events and, therefore, the signals were transmitted as it is, including those advertisements which were not the advertisements booked by the appellant. It was also stated that as per Section 3 of the Sports Act, appellant was to share the live broadcast signal as it is, i.e., the manner in which it was received by it from the copyright owner of the broadcast (the sporting event organizer) and, therefore, it did not amount to any violation of Section 3 of the Sports Act. It was also contended that the appellant had no control over the live signals so received. Since both the parties remain adamant about their respective position, the appellant approached the High Court of Delhi by way of writ petition filed under Article 226 of the Constitution, seeking following declarations and reliefs:"(a) a declaration that under the provisions of the Act and the Rules framed thereunder, the appellant shall offer to simultaneously share with the respondent no. 1 the same live broadcasting signals of sporting events of national importance as provided by the appellant to other broadcast network service providers in India, without insertion of the appellants commercial advertisements;(b) a declaration that the live broadcasting signals of sporting events of national importance shared by the appellant with the respondent no. 1 under Section 3 of the Act shall be the best feed as received from site with all features inclusive of any commercials of the event owner and without insertion of any commercial advertisements by the appellant.(c) a writ of certiorari to quash and set-aside the communication dated 06th April, 2013 issued by the respondent no. 1;(d) hold and declare Rule 5 of the Sports Rules in violative of Section 3 of the Act and ultra-vires Article 14 of the Constitution;(e) Hold and declare that upon the appellant offering to share t he world feed of the relevant matches of the Champions Trophy 2013 without its commercial advertisement with the respondent, it has discharged its obligation under Section 3 of the Act; and(f) Such other writ, order or direction as the court may deem fit in the interest of justice."8. Insofar as vires of Rule 5 of the Rules, 2007 is concerned, the High Court repelled the contention of the said Rule being ultra vires the provisions of Section 3 of the Sports Act with the reason that this Rule simply obliges the content right owner or the holder or a broadcast service provider to comply with the statutory provisions of the Act, which in any case was the obligation of the broadcaster even if Rule 5 was not to exist. Thereafter, the High Court came to the fulcrum of the dispute and noted that insofar as plain language of Section 3 of the Sports Act is concerned, it categorically casts an obligation on the broadcaster to share the life broadcasting signals without its advertisements, with Prasar Bharati. We would produce the text of Section 3 at this juncture:"3. Mandatory sharing of certain sports broadcasting signals - (1) No content rights owner or holder and no television or radio broadcasting service provider shall carry a live television broadcast on any cable or Direct-top-Home network or radio commentary broadcast in India of sporting events of national importance, unless it simultaneously shares the live broadcasting signal, without its advertisements, with the Prasar Bharati to enable them to re-transmit the same on its terrestrial networks and Direct-to-Home networks in such manner and on such terms and conditions as may be specified.(2) The terms and conditions under sub-section (1) shall also provide that the advertisement revenue sharing between the content rights owner or holder and the Prasar Bharati shall be in the ratio of not less than 75:25 in case of television coverage and 50:50 in case of radio coverage.(3) The Central Government may specify a percentage of the revenue received by the Prasar Bharati under sub-section (2), which shall be utilised by the Prasar Bharati for broadcasting other sporting events."The High Court noted that the arguments of the appellant was that the contents were to be shared without its_ advertisements which meant no advertisements of the Broadcaster and, therefore, this expression did not include advertisements inserted in the feed by the event organizer. This argument is, however, rejected in the following manner:"The expression unless it simultaneously shares the live broadcasting signal, without its advertisements, with the Prasar Bharati.... with reference to the two words its advertisements in the phrase, admits of the phrase having only one meaning and not admitting two. The only one meaning that the live broadcast signals have to be without any advertisements for the reason the rules of English grammar guide us that the subject of (the single sentence) sub-section (1) of Section 3, is the content right owner or holder or radio broadcasting service provider and the three words without its advertisements are a sub-clause constituting a condition and since the three words immediately follow the words live broadcasting signal they have to be, plainly read, as a condition concerning the live broadcast service provider; meaning thereby, whosoever airs a live television broadcast of sporting events of national importance must share the same without any advertisements inserted with Prasar Bharati."

Reasoning: Section 3(1), in the first instance, mandates that the sharing of live broadcasting signals with Prasar Bharati has to be without its advertisements. Exception is, however, made in sub-section (2) of Section 3 which enables the broadcasting service provider to even share the contents along with advertisements, but subject to the condition that there has to be a sharing of revenue in the proportion prescribed in sub-section (2) of Section 3. As aforesaid, when live broadcasting signal is shared containing advertisements, those advertisements have much larger viewership because of its telecast/broadcast on Prasar Bharati. The benefit of advertisement in such a case would accrue to those who have booked the advertisements and the service provider, in such an eventuality would definitely be in a position to charge much more from the advertisers. It is a matter of common knowledge that rates of advertisement go up when circulation thereof is enhanced. When we keep in mind the aforesaid twin objectives of the Act, the answer to the issue raised becomes obvious. The application of rule of purposive interpretation would go against the appellant and in favour of thesharing of the signals has to be without any advertisements and if the advertisements are also to be included in the signals, there has to be sharing of the revenue. The learned Attorney General has rightly argued that the word its cannot be given limited meaning by confining it to advertisements only of broadcasting service provider. Section 3 which starts with negative covenant very expressly puts an embargo to all the three categories mentioned therein, viz., content rights owner, (ii) contents holder as well as (iii) television or radio broadcasting service provider not to have television broadcast either through cable or DTH and not to have any radio commentary broadcast unless live broadcasting signal is shared simultaneously with Prasar Bharati. Examined in this hue, it becomes clear that the words without its advertisements which follow immediately after the words unless it simultaneously shares the live broadcasting signal has to be given a meaning that such broadcasting signals are to be without advertisements, whether it is of the content rights owner, content holder or that of television or radio broadcasting service provider. It is made crystal clear by providing the definition of content rights owner or holder in Rule 2(b) of the Rules, 2007. Rule 3(3) takes the issue beyond any pale of doubt when it mentions that the signals to be shared with Prasar Bharati by the content rights owner or holder are to be the best feed that is provided to broadcast service provider in India and has to be free from commercial advertisements. Thus, even if it is ICC which has included those advertisements/logos, the feeds have to be without those logos/advertisements inasmuch as nobody can dispute that the content rights owner are content holder, i.e, ICC in the instant case has included those logos/advertisements from purely commercial angle. Thus, the arrangement between the ICC and the appellant, is totally inconsequential.