No interim stay on Zee’s plea in FM radio case

NOV 1: The Delhi High Court today refused to grant an interim stay on forefeiture of Rs 7.5 crore earnest money and advance licence fee de...

NOV 1: The Delhi High Court today refused to grant an interim stay on forefeiture of Rs 7.5 crore earnest money and advance licence fee deposited by the New Media Broadcasting, a group company of Zee with the government for FM Radio licence.

While adjourning the hearing to November six on a writ petition by the company, seeking refund of the money after it backed out from the race for the licence of FM Radio service, Justice Manmohan Sarin said the court would not say anything on the plea for interim stay.

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The court’s observation came after Solicitor General (SG) Harish Salve said he would not make any commitment on the forefiture of the money as he had no instruction from the Government in this regard.

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The court told ZEE counsel Kapil Sibal that "it is insignificant even if they (Government) forefiet the money. You can amend your petition and seek recovery of the amount."

The SG said "our understanding is that it is our (Government) money. But if the court directs us to refund it we will have to abide by its order."

He said the New Media Broadcasting Ltd (NMBL) had opted out of the race after a successful bid.

The Zee group company, which had baggged the largest number of 29 stations of the total 108, had opted out of the race alleging the Government had changed the rules of the licensing process at the last moment.

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Sibal had requested the court either it grants an interim stay on forfeiture of the money by the Government or seek a commitment from the SG that it would not take any action in this regard till next hearing.

The earnest money deposits could be forefeited only when the party was not abiding by the terms and conditions of a contract, he said.

Sibal told the court the government had sent a letter to the company that it would forfeit the money if it opted out of the race.

The company earlier had said it was not taking part in the FM business now because the government had changed rules of the game and its repeated attempts to negotiate on the issue had failed.

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The announcement by Zee to opt out of the race came amid reports that other leading players like Reliance and Nimbus were also opting out of the FM licence contracts.

Earlier this month, ZEE, Reliance, Nimbus along with other licencees had complained to government against inconsistencies in the licensing process and demanded remedial measures even as government asked applicants to furnish bank guarantees.

Zee had alleged there were substantial differences between tender conditions and those mentioned in the letters of intent.