Stage III FM auctions: HC slams Centre’s ‘vague’ security clearance norms for radio stations

The court has for now asked the Central government to inform on Wednesday whether the auction can be postponed.

By: Express News Service | New Delhi | Published:July 22, 2015 1:24 am

Expressing its displeasure over the “vague” process adopted by the Central government for giving security clearance to radio station companies for participating in the Stage III FM auctions, the Delhi High Court on Tuesday asked the Centre to consider if the auction process could be postponed.

Hearing a plea filed by SunTV network-owned Red FM, the court of Justice Badar Durrez Ahmed and Justice Sanjiv Sachdeva observed that the process and criteria used by the Centre were “vague” and “open to misuse.”

“Things are not spelt out as to what you mean by security clearance. The clause (requiring company and directors of radio company to be security cleared) is vague. It can be misused,” observed the bench.

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The court has for now asked the Central government to inform on Wednesday whether the auction can be postponed.

The observations were made by the court during hearing of a plea by Digital Radio Broadcasting Ltd against a decision by the Ministry of Information and Broadcasting, to refuse permission to its radio channel, Red FM, to participate in Stage III of FM auctions on the grounds that Kalanithi Maran, a shareholder in the radio channel, was facing prosecution in a money laundering case.

The court observed that rejection of Red FM’s application and refusal of security clearance amounted to “blacklisting” and for that they had to be given an opportunity to be heard.

Senior advocates Kapil Sibal, Abhishek Manu Singhvi and Rajiv Nayar, who appeared for Red FM, said the radio channel will have to shut operations if it is not allowed to participate in the auction as its Stage II licence expires in September this year and it has to migrate to Stage III.

The radio channel’s counsel also told the court that it was wrongly disqualified from participating in Stage III of FM auction on the grounds of money laundering cases against the Maran family as former Union telecom minister Dayanidhi Maran was in “no way connected” to it and Kalanithi Maran indirectly held 22 per cent stake in the company.

Sanjiv Narula, the government’s counsel, opposed the firm’s contentions saying: “What is important for us is where the money is coming from, whether the funds are tainted,” he said.

The submission was made in response to the court’s query as to why security clearance of a shareholder was sought when the clauses in tender documents only ask for security clearance of the company and its directors.

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