Madras HC sets aside govt order denying Sun's FM channels to participate in Phase III auction

The Madras High Court set aside orders of the Ministry of Information and Broadcasting on July 15, 2015, denying opportunity to Sun TV Network and group companies to participate in the phase III FM radio auction owing to denial of security clearance. The Court allowed Sun TV Network and Udaya FM to move to the phase III policy FM radio stations in four cities.

In his order today, Justice M Duraiswamy directed the Ministry to announce the name of successful bidders subject to the other conditions beng fulfilled by the appicants.

"...the impugned orders dated 15.7.2016 denying the security clearance of the petitioner are liable to be set aside. Accordingly the same are set aside," said the order.

In an earlier interim order, the court has earlier allowed the petitioner companies to participate in the tender and submit their bids and the result of the bid was subject to the final order. The government submitted the bids in a sealed cover before the court, which the court returned for announcement of results subject to the other conditions.

Sun TV Network and Udaya FM were ordered as entitled to move to Phase III policy for the FM radio stations at Chennai, Coimbatore, Tirunelveli and Vishakhapatinam by entering into Grant of Permission Agreement (GPA), since the Ministry's order on July 15, 2015 was set aside.

On July 15, 2015, the ministry published a list of broadcasters, who are permitted to migrate from Phase II to Phase III, in which the Sun TV Network companies were not mentioned. The names did not figure in the list for denial of security clearance from the Ministry of Home Affairs.

The clearance was denied in connection to the investgation against the promoter Kalanithi Maran and his brother Dayanithi Maran, related to the Aircel-Maxis deal, since prosecution for major financial frauds and corruption are ground for denial in terms of national security clearance policy of the Ministry of Home Affairs.

The Judge, in his order, observed that the petitioner companies themselves have not been alleged to be vehicles of any transgression of law and they have been functioning since 2002/2003 without there being any allegation regarding their functioning resulting in any security concerns.

These companies have been operating their licences under Phase I and Phase II for more than 10 years. Though the cases were registered against the Maran brothers in 2011, these companies continued to operate their respective radio channels without any objection concerning security clearance issues.

"In the absence of any evidence to show that the operation of radio channels by the petitioner companies would create security concerns, the denial of security clearance by the second respondent (the deputy director, Ministry of Information and Broadcasting) cannot be accepted," said the Judge.

There is no allegation that the petitioner companies were created as a camougflaged to shield the persons excercising control over them from any liability, observed the Court.