The Supreme Court recently upheld cancellation of licenses granted to Digi Cable Network and SCOD 18 Networking, for operating as Multi System Operators (MSOs) in the Digital Addressable System (DAS) notified areas.
The bench comprising of Justice Abhay Manohar Sapre and Justice Indu Malhotra observed that obtaining security clearance is a mandatory requirement as per Cable Television Network (Amendment) Rules.
The licenses, which were issued to these cable TV service providers, were cancelled by the Ministry of Information & Broadcasting on the ground that the Ministry of Home Affairs denied issuance of "security clearance" to them. The companies had approached the apex court after the Bombay High Court dismissed their pleas challenging the cancellation order.
Before the apex court bench, the Union of India submitted in a sealed cover the reasons to deny security clearance to the companies. Referring to the said document, the bench observed that the order of cancellation was passed in conformity with the requirements of Rule 11C of the Rules as these companies had failed to obtain the mandatory security clearance as provided under the rule.
"It is clear from mere reading of the Rule 11C (1) that grant of permission is subject to issue of security clearance from the Central Government to the applicant... Since the grant of permission was subject to obtaining of the security clearance from the concerned Ministry, the competent authority was justified in cancelling the conditional permission for want of security clearance," the court said.
With regard to the contention raised that these companies were not afforded any opportunity of hearing before cancelling the permission, the bench quoted observations made in Ex Armymen's Protection Services Private Limited vs. Union of India.
In the said judgment, it was observed that in a situation of national security, a party cannot insist for strict observance of the principles of natural justice. It had also observed: "In such cases, it is the duty of the court to read into and provide for statutory exclusion, if not expressly provided in the rules governing the field. Depending on the facts of the particular case, it will however be open to the court to satisfy itself whether there were justifiable facts, and in that regard, the court is entitled to call for the files and see whether it is a case where the interest of national security is involved. Once the State is of the stand that the issue involves national security, the court shall not disclose the reasons to the affected party."
Referring to these observations, the bench said that these companies were not entitled to claim any prior notice before passing of the cancellation order. Dismissing their appeals, the bench said: "We are of the view that the principles of natural justice were not violated in this case in the light of the law laid down by this Court in the case of Ex-Armymen's Protection Services Private Limited (supra) inasmuch as the appellant was not entitled to claim any prior notice before cancellation of permission."
Read the Judgment Here