M/s. Sun TV Network Ltd. v. Union of India
(2016) 3 LW 331
In the High Court of Madras
W.P Nos. 21810-21815, 11476 and 11477 of 2015
Before Justice M. Duraiswamy
Decided on June 14, 2016

Relevancy of the case: Refusal to extend the license of an FM Radio Channel.

Statutes & Provisions Involved

• The Information Technology Act, 2000 (Section 13)
• The Indian Telegraph Act, 1885 (Section 4)
• The Constitution of India, 1950 (Article 14, 19, 21, 226)
• The National Green Tribunal Act, 2010 (Section 22)
• The Companies Act, 2015 (Section 2)

Relevant Facts of the Case

• Petitioners are running an FM Radio channel which they started before 10 years under Section 4 of the Indian Telegraph Act, 1885. They acquired the license to establish, operate, and maintain FM Radio broadcasting stations. This aforementioned license was valid for 10 years.
• All private companies were told to migrate to the Phase III policy by the respondents. To migrate to Phase III, the petitioners, according to them, submitted all the documents but still weren’t in the list of companies who were permitted to migrate from Phase II to Phase III published by the respondents.
• The petitioner’s company was denied security clearance from the Ministry of Home Affairs. According to the petitioners, despite furnishing all the documents, neither their license was extended nor did the Ministry reply to their letters for justification.
• The petitioners also mentioned other Phase I FM Radio Broadcasters who transitioned to Phase II have been given a conditional extension of their licenses from 1 April 2015 or before Phase III migration, whichever one is sooner. Refusal to extend their license without any reasonable reason was against the Constitution of India, 1950 as it violated Article 14.
• The respondents stated that one of the alleged shareholders, Shri Kalanithi Maran, of the company was involved in criminal activity and the nexus is a valid reason to deny the security clearance and they camouflaged this to get their license.
• The petitioners have neither challenged the notice inviting applications or e-auctions and its terms and conditions for award of FM Radio Licenses nor they have questioned the terms and conditions of the said notice.

Opinion of the Bench

Justice M. Duraiswamy:

• The petitioner’s company existed since 2005 and the case which was registered against Shri Kalanithi Maran was in 2011 and hence no camouflage was done by the petitioners to penetrate the corporate veil.
• It is already mentioned that the petitioner firms were formed more than 10 years ago which is well before the suspected offences were committed and no adverse remarks by any of the authorities have been received till date. This will not raise the issue of piercing the corporate veil.
• The applicant firms have in turn been using their Phase-I and Phase-II licenses for over 10 years. Although the cases against Shri Dayanithi Maran and Shri Kalanithi Maran were registered in the year 2011, the petitioner firms continued to function their various radio stations with no complaint regarding security clearance matters.
• Failing any evidence to prove that the petitioner companies’ service of radio channels would raise security issues, the respondent’s rejection of security clearance cannot be acknowledged.

Final Decision

• It was held that by entering into Grant of Permission Agreement [GOPA], the petitioners’ FM radio stations were entitled to move to Phase III policy.

This case summary has been prepared by Akshara Kamath, an undergraduate student at Symbiosis Law School, Hyderabad, during her internship with The Cyber Blog India in June/July 2020.