TDSAT Awards Rs 7.31 Lakh to MSO After LCO Switches Operator Mid-Agreement, Refuses to Return 469 Set Top Boxes

TDSAT allows MSO Kal Cables' petition, ordering Chennai LCO Kurinji Network to pay Rs 5.62 lakh for 469 unreturned set top boxes and Rs 1.68 lakh for premature de-linking after the respondent switched to a rival MSO in August 2016 without notice or dues clearance.

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has allowed a broadcasting petition filed by M/s Kal Cables Pvt. Ltd., a Multi System Operator (MSO) based in Chennai, against M/s Kurinji Network, a Local Cable Operator (LCO) whose proprietor is Mrs. T.S. Padmavathy. The order, dated 5 May 2026, directs Kurinji Network to deposit Rs 5,62,800/- towards the value of 469 unreturned set top boxes (STBs) and Rs 1,68,632/- as compensation for premature de-linking of signals, both amounts carrying simple interest at 9% per annum. The petition had been pending since 2017. The Tribunal held that the interconnect agreement was valid, that the STBs remained the property of the MSO at all times, and that the LCO's departure without notice in August 2016 caused quantifiable loss to the petitioner.

The Dispute: Agreement, STBs, and an Abrupt Switch

Kal Cables and Kurinji Network entered into an Interconnection Agreement on 24 February 2015. The agreement offered two revenue-sharing options; the respondent chose a special revenue-sharing arrangement on the basis of a seven-year lock-in period. An addendum dated 26 February 2016 fixed a minimum guarantee fee of Rs 42,158/- per month for STBs up to 433 in number.

Under the agreement, 447 Standard Definition (SD) STBs and 22 High Definition (HD) STBs — 469 in total — were given to the respondent on a “use and return basis” for provisioning to end subscribers. Clause 7.5(i) of the agreement declared the petitioner the absolute owner of all STBs and viewing cards at all times. Clause 7.5(iii) made the STBs returnable property, with the respondent liable to compensate for any damage or loss.

In August 2016, Kurinji Network switched to another MSO without giving notice to Kal Cables and without clearing outstanding subscription charges. The STBs were neither returned nor their value paid. A legal notice dated 24 January 2017 demanded return of all 469 STBs with accessories or payment of Rs 7,36,500/- in lieu, along with Rs 27,40,270/- as compensation for premature de-linking within the seven-year lock-in period.

The respondent replied on 24 February 2017, denying the notice and claiming the STBs had been purchased outright. The respondent also disputed the number of STBs and contended that the seven-year lock-in clause was contrary to the Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable Television Systems) (Seventh Amendment) Regulations, 2016, which came into force on 15 March 2016 and mandated fresh agreements on the basis of a Model Interconnect Agreement (MIA) or Standard Interconnect Agreement (SIA) with a renewable one-year tenure.

The Regulatory Question: Was the Seven-Year Lock-In Valid?

The Tribunal framed six issues, including whether the interconnect agreement was valid and whether it violated the interconnect regulations. These were the central contested questions.

On the validity of the agreement (Issue No. 2), the Tribunal found that the respondent had admitted signing the agreement even while disputing its contents. Citing the settled principle that admission of signature amounts to admission of execution, the Tribunal held that the agreement was to be interpreted as written. It found nothing illegal in the agreement dated 24 February 2015 and declared it a valid one.

On the regulatory challenge (Issue No. 3), the Tribunal accepted that the Seventh Amendment Regulations of 15 March 2016 changed the framework going forward. From that date, any renewal or readjustment of an interconnect agreement was to follow the MIA or SIA format with a one-year renewable tenure. The Tribunal held that the seven-year lock-in period would cease to operate from 15 March 2016, or from the date of any subsequent renewal. The agreement remained valid for one year, up to 24 February 2016. Issue No. 3 was decided in favour of the petitioner on this basis.

Ownership of STBs: Petitioner's Evidence Goes Unrebutted

On Issue No. 4, the Tribunal examined whether the petitioner was entitled to recover the STBs or their value. The petitioner filed affidavit evidence through its witness M. Natesan. The respondent did not file any evidence of its own.

The Tribunal found that Schedule B of the agreement listed the STBs with serial numbers, signed by both parties, and that an acknowledgement at page 31 of the paper book confirmed the LCO's receipt of the STBs. The respondent's cross-examination of the petitioner's witness produced no variation from the examination-in-chief.

The respondent's claim that the STBs were purchased outright was unsupported by any documentary proof. The Tribunal applied the principle from Anil Rishi v. Gurbaksh Singh (AIR 2006 SC 1971) that the burden of proof lies on the party asserting a fact. Since the respondent asserted outright purchase but led no evidence, the Tribunal held that the petitioner had fully proved ownership.

On valuation, the petitioner had not pleaded or proved a specific cost per STB. However, the respondent had admitted in its reply that STBs were purchased for Rs 600 to Rs 900 each in 2012. The Tribunal treated this admission as evidence and, applying notional depreciation and general wear and tear up to the date of the demand notice (24 January 2017), assessed the value at Rs 1,200 per STB inclusive of accessories. The total came to Rs 5,62,800/- (Rs 1,200 multiplied by 469 STBs).

The Tribunal declined to order physical return of the STBs. It observed that after eight years, electronic items such as STBs and viewing cards would be of no practical use or worth, and that this situation had arisen because of the respondent's conduct. Compensation in money was the appropriate relief.

Compensation for Premature De-Linking: A Partial Award

On Issue No. 5, the petitioner had claimed Rs 27,40,270/- as compensation for de-linking before the expiry of the seven-year lock-in. The Tribunal did not award this sum.

Counsel for the petitioner fairly conceded during arguments that, given the Seventh Amendment Regulations, the effective agreement period was one year from the date of the addendum — 26 February 2016 to 26 February 2017. The agreed minimum guarantee under the addendum was Rs 42,158/- per month. The respondent had shifted to another MSO in August 2016, so signals were not availed after that month. The remaining period from August 2016 to March 2017 was eight months.

The Tribunal found neither specific pleading nor proof on the actual loss for this period. Applying what it described as a “reasonable prudent guesswork” to reach a just and equitable result, it split the loss equally between the parties. The equitable compensation was calculated as Rs 42,158/- multiplied by 8 months, divided by 2, yielding Rs 1,68,632/-.

Interest Rate: 9% Simple Interest

The petitioner had claimed interest at 18% per annum. The Tribunal declined that rate. It noted that in repeatedly decided petitions, considering the fiscal situation and the conditions of cable workers, it had consistently awarded simple interest at 9% per annum. The same rate was applied here, running from the date of the legal notice (24 January 2017) on the STB compensation amount, and from the date of the judgment on the de-linking compensation amount, until actual payment.

Order

The Tribunal allowed the petition and directed Kurinji Network to deposit the following amounts with the Tribunal within two months of the judgment:

(a) Rs 5,62,800/- (Rupees Five Lakhs Sixty Two Thousand Eight Hundred) against 469 STBs (447 SD and 22 HD) along with all accessories including viewing card, remote control and AV cord, valued as at 24 January 2017, with simple interest at 9% per annum from 24 January 2017 until actual payment.

(b) Rs 1,68,632/- (Rupees One Lakh Sixty Eight Thousand Six Hundred and Thirty Two) as compensation for premature de-linking, with simple interest at 9% per annum from the date of the judgment until actual payment.

In the event of non-deposit, the amounts are to be realised by due process. The Tribunal directed the office to prepare a formal order and decree accordingly.