A competing MSO cannot be held liable for an LCO’s dues absent privity of contract.

Siti Cable Networks Ltd., an MSO, had entered into an Interconnection Agreement dated 14 March 2013 with Rakesh Agarwal, a local cable operator, for retransmission of cable television signals in the DAS area of Jabalpur, Madhya Pradesh.

The Petitioner supplied 211 Set Top Boxes (“STBs”) and Viewing Cards to Respondent No. 1 for installation at subscribers’ premises, while retaining ownership of the equipment.

The Petitioner alleged that Respondent No. 1 failed to pay subscription dues amounting to ₹92,786 as on 31 March 2016, migrated to the network of competing MSO UCN Cable Network Pvt. Ltd. without clearing the dues or returning the STBs, and failed to give the contractually or regulatorily required notice.

The Petitioner issued a legal notice dated 23 February 2016, but received no effective response.

Respondent No. 2 denied liability, contending that it had no contractual relationship or privity with the Petitioner and that its business arrangement was only with Respondent No. 1.

Proceedings against Respondent No. 1 were conducted ex parte.

The Petitioner relied on the Interconnection Agreement, STB records, statement of dues, and the uncontroverted affidavit evidence of its authorised signatory.

Whether the Respondents were jointly and severally liable to pay the Petitioner’s outstanding dues and return the 211 STBs and Viewing Cards, or compensate the Petitioner for them?

Whether Respondent No. 2 contravened the applicable interconnection regulations by supplying signals to Respondent No. 1 without obtaining a no-dues certificate from the Petitioner?

Whether Respondent No. 1 contravened the Interconnection Agreement and applicable regulations by migrating to Respondent No. 2’s network without clearing the outstanding dues and returning the STBs and Viewing Cards?

The Tribunal exercised jurisdiction under Sections 14 and 14A of the Telecom Regulatory Authority of India Act, 1997.

It applied the preponderance-of-probabilities standard applicable to civil proceedings.

Relying on Anil Rishi v. Gurbaksh Singh, AIR 2006 SC 1971, and related authorities, it held that the party asserting a fact bears the initial burden of proving it, while the evidentiary onus may shift during the proceedings; however, the ultimate burden of proof remains on the party asserting the claim.

Regulations 6(4) and 6(5) of the Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable System) Regulations, 2012 were treated as requiring observance of the prescribed migration procedure, including clearance of dues and return of equipment before migration.

The Tribunal further applied the contractual principle that liability arising from the Interconnection Agreement and outstanding subscription dues lay against the contracting LCO, absent privity of contract between the Petitioner and the competing MSO.

The Tribunal found that the Petitioner established the Interconnection Agreement, the outstanding dues of ₹92,786, and the issuance of 211 STBs and Viewing Cards to Respondent No. 1 through documentary material and the uncontroverted affidavit of its authorised signatory.

Since Respondent No. 1 neither appeared nor filed evidence to rebut these facts, the Petitioner discharged its burden on a preponderance of probabilities.

The Tribunal therefore held Respondent No. 1 liable for the unpaid subscription charges and for returning the equipment.

However, Respondent No. 2 was not contractually connected with the Petitioner.

Its status as a competing MSO and its supply of signals to Respondent No. 1 did not, by themselves, create contractual or joint-and-several liability in favour of the Petitioner.

Accordingly, the allegation of contravention against Respondent No. 2 was not established.

Given the age of the STBs and the lapse of several years since their issuance, the Tribunal considered return in good and working condition impracticable and substituted compensation at a depreciated rate of ₹1,000 per STB.

Respondent No. 1 was directed to pay ₹92,786 towards outstanding subscription dues as on 31 March 2016, with simple pendente lite and future interest at 9% per annum until payment, within two months of the judgment.

He was also directed either to return the 211 STBs and Viewing Cards in good and working condition or deposit ₹2,11,000, calculated at ₹1,000 per STB, within the same period.

In default, the equipment compensation would also carry simple interest at 9% per annum.

The Petition was decreed with costs against Respondent No. 1.