X MEDIA PVT. LTD. & ORS v. TELECOM REGULATORY AUTHORITY OF INDIA

Mr. Abhinav Mukerji, Sr. Adv. with Ms. Payak Kakra, Mr. Akash Tyagi, Mr. Pranav, Ms. Khushboo, Advs. in Item No.104 Mr. Kunal Tandon, Sr. Adv. with Ms. Aanchal Tandon, Ms. Niti Jain, Ms. Niharika Sharma, Mr. Nitai Agarwal, Advs. in Item Nos.104 and 105. Ms. Aanchal Tandon, Ms. Niti Jain, Mr. Nitai Agarwal, Advs. in Item No.106. Ms. Srishti Gupta, Adv. in Item No.107. Ms. Nisha Bhambhani, Mr. Rajat Arora, Ms. Mariya Shahab, Advs. in Item Nos.110 and 120. Mr. Tribhuvan, Mr. Chandan, Ms. Anushka Sarraf, Advs. in Item No.117. Mr. Balaji Srinivasan, Mr. Rohan Dewan, Advs. with Prabhat Ranjan AR of Petitioner in Item No.118. Mr. Rajshekhar Rao, Sr. Adv. with Mr. Maanav Kumar, Ms. Gauri Ramachandran, Advs. in Item No.119. Present for Respondents: Mr. Chetan Sharma, ASG with Mr. Vikram Jetly, CGSC with Ms. Laavanya Kaushik, Ms. Shreya Jetly, Ms. Khyaati Bansal for UOI in Item Nos.104 to 120. Mr. Ashish Mehta, Adv. for TRAI in Item Nos.104 to 120. Mr. Abhishek Malhotra, Sr. Adv. with Ms. Srishti Gupta, Adv. W.P,(C) 7982/2013 and connected matters Page 5 of 68 for IBF – Intervenor in Item No.104. Ms. Anushree Rauta, Mr. Nittin Bhatia, Mr. Shwetank Tripathi, Ms. Devangini Rai, Advs. for Intervenor: Culver Max Entertainment Private Limited in Item No.104. Mr. Abhishek Malhotra, Sr. Adv. with Ms. Srishti Gupta, Adv. in Item No.107. Ms. Aanchal Tandon, Ms. Niti Jain, Mr. Nitai Agarwal, Advs. for Applicant in Item No.104. CORAM: HON'BLE MR. JUSTICE ANIL KSHETARPAL HON'BLE MR. JUSTICE AMIT MAHAJAN J U D G M E N T ANIL KSHETARPAL, J.:

#1. The present batch of 17 Writ Petitions have been filed under Article 226 of the Constitution of India1, by three group of Petitioners, namely, general entertainment channels (GECs), news broadcasters and regional channels. The aforestated channels, being major stakeholders have assailed Rule 7(11) of the Cable Television Network Rules, 19942 inserted by way of R. 452(E) dated 31.07.2006. Similarly, the constitutional validity of Regulation 3 of Standard of Quality of Service (Duration of Advertisements in Television Channels) Regulations, 20123, as amended by way of Standard of Quality of Service (Duration of Advertisements in Television Channels) (Amendments) Regulations, 20134, framed by the Telecom Regulatory Authority of India (TRAI) in exercise of powers under Sections 11(1)(b)(i) and (v) read with Section 36 of Telecom Regulatory Authority of India Act, 19975, has also been challenged. 1 Hereinafter referred to as „the Constitution‟ 2 Hereinafter referred to as „Impugned Rule‟ 3 Hereinafter referred to as „Impugned Regulation of 2012‟ 4 Hereinafter referred to as „Impugned Regulation of 2013‟ 5 Hereinafter referred to as „Act of 1997‟ W.P,(C) 7982/2013 and connected matters Page 6 of 68

#2. The common ground of challenge by the Petitioners pertains to the fixation of a time ceiling of 10+2 minutes per clock hour for broadcasting of advertisements, with a 10-minute cap fixed for commercial advertisements and a 2-minute cap pertaining to self- promotional advertisements. It is the case of the Petitioners herein that the aforesaid cap is violative of Articles 14 and 19 of the Constitution.

#3. Before turning to the detailed background, followed by consideration of the rival submissions, we deem it appropriate to delineate, at the outset, that the primary challenge of the Petitioners is directed at the Impugned Regulation of 2012 as amended in 2013, which, as on date, constitutes the latest regulatory framework governing the permissible duration of advertisements on a „per clock hour‟ basis. By virtue of the said Regulations, Impugned Rule, stands effected to the extent of the modifications so introduced. Pithily put, the core issue raised in the present proceedings does not pertain to the 12-minute ceiling on advertising time per se; rather, the Petitions are directed towards the stipulation that the said time ceiling is operational on a „per clock hour‟ computation. A. BRIEF FRAMEWORK: BACKGROUND AND REGULATORY

#4. The regulatory framework governing broadcasting and cable television in India traces its origin to the enactment of the Cable Television Networks (Regulation) Ordinance, 19946, which was followed by the Cable Television Networks (Regulation) Act, 19957. The said statutory framework was complemented by the enactment of Rules of 1994, which were notified pursuant to the aforesaid 6 Hereinafter referred to as „Ordinance of 1994‟ 7 Hereinafter referred to as „Act of 1995‟ W.P,(C) 7982/2013 and connected matters Page 7 of 68 Ordinance of 1994. Originally, the Telecom Regulatory Authority of India Act, 1997 stood confined to telecommunication services, however, a pivotal shift in the framework occurred by way of a subsequent notification dated 09.01.2004 bearing no.39 of 2004, whereby broadcasting and cable services were brought within the ambit of telecommunication services under Section 2(k) of the Act of

#1997. Additionally, the regulatory reach of TRAI was expanded by empowering its recommendatory domain over matters such as duration of advertisements.

#5. Further, the Cable TV framework came to be crystallised in the year 2006, with the introduction of the Impugned Rule, thereby prescribing a ceiling of upto 10+2 minutes of advertisements per hour for commercial advertisements and self-promotional programmes, respectively. Thereafter, this regulatory intent came to be refined through a consultative process, culminating in the promulgation of the Impugned Regulation of 2012, followed by an amendment by way of Impugned Regulation of 2013. The Impugned Regulations, when read conjointly for the purpose of the present petitions, lie at the heart of the dispute, as by way of Regulation 3, they prescribed a uniform „per clock-hour‟ ceiling on advertisement duration, to ensure an uninterrupted and satisfactory viewing experience, thereby giving an operational effect to the Impugned Rule.

#6. As is evident, the Impugned Regulations did not travel unchallenged. Primarily, the said Regulations became a subject matter for scrutiny of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT). However, such proceedings were overtaken by a jurisdictional pronouncement of the Hon‟ble Supreme Court in Bharat W.P,(C) 7982/2013 and connected matters Page 8 of 68 Sanchar Nigam Limited vs TRAI8, wherein, it was held that TDSAT does not possess the authority to adjudicate upon such challenges raised against Impugned Regulations framed by TRAI. Accordingly, the appeals stood dismissed, though liberty was granted to approach the constitutional courts.

#7. It is in this continuum that the present Petitions came to be instituted before this Court, wherein the Petitioners challenged Regulation 3 of the Impugned Regulations, whereas the Impugned Rule came to be challenged in the year 2014 by way of W.P.(C) 724/2014. In the interlude, Discovery Communications India entered the fray as an intervener. Against the aforesaid backdrop, the present dispute invites this Court to scrutinize the equilibrium between commercial speech of broadcasting channels and the power of TRAI to regulate advertisement duration, in the interest of viewers, by way of imposing a uniform per clock hour ceiling on advertisement duration.

#8. At this stage, it may also be relevant to underscore that the expansion of definition of Telecommunication Service under the Act of 1997, to bring within its ambit broadcasting and cable services, brought an overlapping interplay between the Impugned Rule and the Act of 1997. Consequently, TRAI, in exercise of its powers under 11(1)(b)(i) and (v), read with Section 36 of the Act of 1997, introduced a corresponding amendment by way of Impugned Regulation of 2012, as amended by Impugned Regulation of 2013.

#9. Although, at first blush, the challenge before this Court may 8 (2014) 3 SCC 222 W.P,(C) 7982/2013 and connected matters Page 9 of 68 appear to be twofold. However, upon a closer scrutiny, it becomes apparent that, in substance, the challenges raised separately against the Impugned Rule and Regulation 3 of the Impugned Regulation of 2012, are directed towards one common object, namely, the imposition of a per clock hour ceiling on the advertisements. The said ceiling finds its substantive manifestation in Regulation 3 of the Impugned Regulation of 2012. Whereas, the Impugned Rule, when read in conjunction with the notification of the year 2004 operates in aid of, and derives content from, the Regulation 3. Consequently, the validity of the Impugned Rule is inextricably linked to, and dependent upon, the validity of Regulation 3 of the Impugned Regulation of

#2012. Accordingly, for the purpose of adjudication, the controversy in the present batch rests upon the validity of Regulation 3 of the Impugned Regulation of 2012.

#10. Before adverting towards the rival submissions made by the parties herein, this Court deems it appropriate to reproduce relevant provisions of the Act of 1995, Act of 1997, Impugned Rule and Regulations along with other statutes, which have been relied upon by the learned senior counsels for the parties during their submissions, which are as follows: Cable Television Networks (Regulation) Act, 1995-

#2. Definitions-In this Act, unless the context otherwise requires,- (g) ―programme‖ means any includes— television broadcast and (i) exhibition of films, features, dramas, advertisements and serials; (ii) any audio or visual or audio-visual live performance or presentation, and the expression ―programming service‖ shall be construed accordingly;

#5. Programme code.—No person shall transmit or re-transmit through a cable service any programme unless such programme W.P,(C) 7982/2013 and connected matters Page 10 of 68 is in conformity with the prescribed programme code.

#6. Advertisement code.—No person shall transmit or re-transmit through a cable service any advertisement unless such advertisement is in conformity with the prescribed advertisement code. Cable Television Networks Rules, 1994 (Impugned Rule)-

#7. Advertising Code. – (11) No programme shall carry advertisements exceeding 12 minutes per hour, which may include up to 10 minutes per hour of commercial advertisements, and up to 2 minutes per hour of a channel‘s self-promotional programmes. TELECOM REGULATORY AUTHORITY OF INDIA ACT, 1997

#2. Definitions.-(1) In this Act, unless the context otherwise requires,- (k) "telecommunication service" means service of any description (including electronic mail, voice mail, data services, audio tex services, video tex services, radio paging and cellular mobile telephone services) which is made available to users by means of any transmission or reception of signs, signals, writing, images and sounds or intelligence of any nature, by wire, radio, visual or other electro-magnetic means but shall not include broadcasting services.

#11. Functions of Authority - (1) Notwithstanding anything contained in the Indian Telegraph Act, 1885 (13 of 1885), the functions of the Authority shall be to— (a) make recommendations, either suo motu or on a request from the licensor, on the following matters, namely:- (i) need and timing for introduction of new service provider; (ii) terms and conditions of licence to a service provider; (iii) revocation of license for non-compliance of terms and conditions of licence; (iv) measures to facilitate competition and promote efficiency in the operation of telecommunication services so as to facilitate growth in such services; (v) technological improvements in the services provided by the service providers; (vi) type of equipment to be used by the service providers after inspection of equipment used in the network; (vii) measures for the development of telecommunication technology and any other matter relatable to telecommunication industry in general; W.P,(C) 7982/2013 and connected matters Page 11 of 68 (viii) efficient management of available spectrum; (b) discharge the following functions, namely:-- (i) ensure compliance of terms and conditions of licence; (ii) notwithstanding anything contained in the terms and conditions of the licence granted before the commencement of the Telecom Regulatory Authority of India (Amendment) Act, 2000 (2 of 2000), fix the terms and conditions of inter- connectivity between the service providers; (iii) ensure technical compatibility and effective interconnection between different service providers; (iv) regulate arrangement amongst service providers of sharing their revenue derived telecommunication services; from providing (v) lay-down the standards of quality of service to be provided by the service providers and ensure the quality of service and conduct the periodical survey of such service provided by the service providers so as to protect interest of the consumers of telecommunication service; (vi) lay-down and ensure the time period for providing local and long distance circuits of telecommunication between different service providers; (vii) maintain register of inter-connect agreements and of all such other matters as may be provided in the regulations; (viii) keep register maintained under clause (vii) open for inspection to any member of public on payment of such fee and compliance of such other requirement as may be provided in the regulations; (ix) ensure effective compliance of universal service obligations;

#36. Power to make regulations.-(1) The Authority may, by notification, make regulations consistent with this Act and the rules made thereunder to carry out the purposes of this Act. (2) In particular, and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:— (a) the times and places of meetings of the Authority and the procedure to be followed at such meetings under sub-section (1) of section 8, including quorum necessary for the transaction of business; (b) the transaction of business at the meetings of the Authority under sub-section (4) of section 8; (d) matters in respect of which register is to be maintained by the **** W.P,(C) 7982/2013 and connected matters Page 12 of 68 Authority [under sub-clause (vii) of clause (b)] of sub-section (1) of section 11; (e) levy of fee and lay down such other requirements on fulfilment of which a copy of register may be obtained [under sub-clause (viii) of clause (b)] of sub-section (1) of section 11; (f) levy of fees and other charges [under clause (c)] of sub-section (1) of section 11; Standards of Quality of Service (Duration of Advertisements in Television Channels) Regulations, 2012 (Impugned Regulation of 2012)- ― 3. Duration of advertisements in TV channels.—(1) No broadcaster shall carry in its broadcast of a programme, advertisements exceeding twelve minutes in a clock hour and any shortfall of advertisement duration in any clock hour shall not be carried over. (2) The advertisements in the clock hour shall include all types of advertisements including advertisements promoting the channel(s) of the broadcaster. Explanation: The clock hour shall commence from 00.00 of the hour and end at 00.60 of the hour (example: 14.00 to 15:00 hours).‖ Standards of Quality of Service (Duration of Advertisements in Television Channels) (Amendment) Regulations, 2013 (Impugned Regulation of 2013)- ―2. For regulation 3 of the Standards of Quality of Service (Duration of Advertisements in Television Channels) Regulations, 2012 (15 of 2012) (hereinafter referred to as the principal regulations), the following regulation shall be substituted, namely:- ―3. Duration of advertisements in a clock hour.- No broadcaster shall, in its broadcast of a programme, carry advertisements exceeding twelve minutes in a clock hour. Explanation: The clock hour means a period of sixty minutes commencing from 00.00 of an hour and ending at 00.60 of the hour. (example: 14.00 to 15:00 hours).‖ Article 14 of the Constitution of India

#14. Equality before law.—The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. Article 19 of the Constitution of India

#19. Protection of certain rights regarding freedom of speech, etc.—(1) All citizens shall have the right— (a) to freedom of speech and expression; (g) to practise any profession, or to carry on any occupation, trade or business. [(2) Nothing in sub-clause (a) of clause (1) shall affect the W.P,(C) 7982/2013 and connected matters Page 13 of 68 operation of any existing law, or prevent the State from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub-clause in the interests of 4 [the sovereignty and integrity of India], the security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence.] (6) Nothing in sub-clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub-clause, and, in particular, 1 [nothing in the said sub-clause shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to,— (i) the professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business; or (ii) the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise.] Article 31C of the Constitution of India 31C. Saving of laws giving effect to certain directive principles.— Notwithstanding anything contained in article 13, no law giving effect to the policy of the State towards securing 4 [all or any of the principles laid down in Part IV] shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by 5 [article 14 or article 19;] 6 [and no law containing a declaration that it is for giving effect to such policy shall be called in question in any court on the ground that it does not give effect to such policy]: Provided that where such law is made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent.] Article 39 of the Constitution of India

#39. Certain principles of policy to be followed by the State.—The State shall, in particular, direct its policy towards securing— (b) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good; (c) that the operation of the economic system does not result in the concentration of wealth and means of production to the W.P,(C) 7982/2013 and connected matters Page 14 of 68 common detriment; (Emphasis Supplied)

#11. Since the Petitioners herein represent diverse categories of broadcasters, namely, GECs, news channels and regional channels, learned senior counsel for each category have advanced independent submissions. However, in view of the substantial overlap in issues, the same are being considered conjointly. For the sake of convenience, W.P.(C) 4307/2021 is treated as the lead matter for news broadcasters, W.P.(C) 739/2014 for regional broadcasters, and W.P.(C) 7983/2013 for GECs. The submissions advanced on behalf of Discovery Communications India, as an intervener in W.P.(C) 7982/2013, shall, also be dealt with separately. B. CONTENTIONS ON BEHALF OF THE PARTIES:

#12. This Court has heard learned senior counsel for the parties at length, and with their able assistance, have perused the paperbook alongwith the judgments and written submissions forming part of the pleadings.

#13. At the threshold, it may be noted that although Mr. Chetan Sharma, learned ASG appearing on behalf of the Respondent/UOI, has assailed the maintainability of the present petitions in his written submissions, however, the said challenge was not raised before this Court at the time of oral arguments. Accordingly, this Court is consciously not dealing with the issue pertaining to the maintainability of the petitions. Even otherwise, the present regulatory framework, by its very design, imposes an immediate obligation and has a direct bearing on the Petitioners herein, making the present petitions maintainable. W.P,(C) 7982/2013 and connected matters Page 15 of 68

#14. Before proceeding to examine the arguments on the merits of the case, we deem it appropriate to note that, as stated in preceeding paragraphs of this judgment, three distinct classes of broadcasters have been separately represented before this Court. Accordingly, the contentions of the Petitioners are considered and addressed in four corresponding segments, so as to ensure clarity, coherence, and category-specific adjudication. Similarly, the submissions advanced on behalf of the Union of India (UOI) and TRAI, as well as the rejoinder arguments advanced in response thereto, are also dealt with separately. Submissions on behalf of News Broadcasters:

#15. Mr. Arvind P. Datar, learned senior counsel appearing on behalf of News Broadcasters, has made the following submissions:

15.1 At the outset, it has been highlighted that in 2017, TRAI issued Interconnection Regulations and Tariff Order, imposing structured price caps on television channels, including a ceiling of Rs. 19 per channel and Rs. 12 for bouquet offerings, along with restrictions on bouquet composition, discounting, promotional schemes, and distribution arrangements. These regulations, however, came to be upheld by the Hon‟ble Supreme Court in Star India (P) Ltd. v. Department of Industrial Policy and Promotion9. It is their case that the aforesaid regulation has already constrained the revenue streams of broadcaster, particularly news channels, whose subscription rates are substantially lower ranging between 25 paise to Rs. 3.5/- per month, with several operating on a Free-to-Air (FTA) model. 9 (2019) 2 SCC 104 W.P,(C) 7982/2013 and connected matters Page 16 of 68

15.2 Against the aforesaid backdrop, it is the case of the News Broadcasters that, after the imposition of the price cap over subscription fee, the primary source of sustenance for channels alike is the advertising revenue. However, an additional imposition of uniform time ceiling of 12 minutes of advertisements per clock hour across all time slots aversely impacts the commercial speech guaranteed under Article 19(1)(a) of the Constitution.

15.3 Reliance is placed on the judgment of TATA Press Limited v Mahanagar Telephone Nigam Limited10, to argue that in the said judgment, the Hon‟ble Supreme Court, while dealing with the issue of whether or not Telephone Nigam could restrain TATA Press from publishing yellow page containing paid advertisements of business, traders and association, held that commercial speech forms a part of freedom of speech and expression provided under Article 19(1)(a) of the Constitution, and advertisements cannot be denied protection merely because they are issued by the businessmen.

15.4 Further, it has been argued that the restriction on duration of advertisements by way of Impugned Rule is violative of Article 19(1)(a) of the Constitution, in light of the jurisprudence established by the Supreme Court in Sakal Papers (P) Ltd. And Others v The Union Of India11, Bennett Colemon & Co. v Union Of India12 and Hindustan Times & Ors. vs. State of UP13. A common thread running through all the three decisions, as has been argued by the learned senior counsel, is that the Hon‟ble Supreme Court has already settled the law that any restriction either direct or indirect, on advertisement