IJAZ UL AHSAN, J.---This matter arises out of ongoing litigation including contempt proceedings initiated against the Pakistan Electronic Media regulatory Authority ("PEMRA") for non-compliance of orders passed by this Court. During an earlier round of litigation, vide order dated 26.06.2018, we had directed PEMRA to decide a pending application of Bol Media Network ("BOL") regarding non- issuance/publishing of its rating by a rating Company under the name and style of Medialogic Pakistan (Private) Limited ("Medialogic"). Pursuant to the said order, an application of BOL was decided by PEMRA, vide its order dated 11.07.2018. The operative part of the said order is reproduced below:- "Therefore, considering the recommendations of hearing Committee, the Competent Authority, in exercise of delegated powers of the Authority, hereby decides as follows: i. Since the CEO of M/s. Medialogic Pvt. Ltd. has categorically agreed that they have no objection to entertaining the request of BOL Network for becoming client of the rating agency and subsequently provision of rating data to the network subject to vacation of stay order/final disposal of case in its favour by the Civil Court, therefore, the application of M/s. Labbaik Pvt. Ltd.
(BOL Network) stands disposed of subject to final disposal of civil case by the Civil Court in Lahore. ii. The ratings of the TV channels ultimately affects the content which is regulated by PEMRA, therefore, the regulator can have a role in accrediting the present and future rating agencies and may come up with guidelines to ensure a free, fair, accurate and a representative system of rating which will ultimately result in the production of content which is best suited for viewers. iii. An appropriate supervisory model having adequate representation from all concerned stakeholders e.g, broadcasters, advertisers, regulator and the rating agency etc., can help in ensuring that no individual section of the industry has majority control (and hence influence) on the rating services, there are no cross-holdings (hence the conflict of interest) in the agency or agencies providing the rating services and that there is a greater transparency in the survey methods, panel selections and subsequently the rating data. iv. Process for issuing guidelines/accreditation or registration of companies by PEMRA for provision of rating service will be initiated and same will be finalized in consultation with all stakeholders.
It appears from the above order that the application of BOL was not finally decided in so far as it was made conditional on vacation of stay order/final disposal of a case pending in the Civil Courts at Lahore.
2. When the matter came up for hearing before us on 28.07.2018, after hearing the learned counsel for all parties and examining the order passed by PEMRA, it transpired that one of the key issues was that PBA was refusing to grant membership to BOL. We accordingly issued notice to Pakistan Broadcasters Association ("PBA") to explain why grant of membership of PBA was denied to BOL.
Further, we requisitioned the record of the case titled "Pakistan Broadcasters Association v.
Medialogic Pakistan (Private) Limited" pending in the Court of Mr. Khawar Rafique, Civil Judge, 1st Class, Lahore. In the said suit, an ex parte restraining order had been passed restraining Medialogic to issue media rating to BOL.
3. When the matter came up for hearing on 01.08.2018, we observed that in view of categorical admission made by Medialogic that it had no objection to grant of media rating to BOL, the only impediment in the way of grant of media rating was the stay order granted by the Civil Court in the suit instituted by PBA against Medialogic. We also observed that BOL had not been impleaded as a party in the said case, whereas its rights had been seriously affected in the ex parte proceedings.
We, therefore, issued notice to the concerned Civil Judge to explain why our order dated 28.07.2018 directing him to transmit the original file to this Court, had not been complied with. Further, we found that proceedings before the Civil Judge prima fade sought to, and the ex parte order did, curtail the fundamental rights of the petitioner, namely, freedom of trade and freedom of expression guaranteed under Articles 18 and 19 of the Constitution of the Islamic Republic of Pakistan, 1973.
4. We also expressed our apprehension that PBA perhaps for its own reasons tried to deny membership to the petitioner to prevent it from being rated by Medialogic, which had otherwise expressed willing to grant rating to BOL. The medium of civil suit was adopted by PBA for the said objective. We, therefore, issued a direction to Medialogic to act independently in the matter and immediately grant rating to BOL notwithstanding any restraining order issued by the Civil Judge.
The matter was thereafter adjourned to 03.08.2018.
5. On 03.08.2018, we heard the learned counsel for Medialogic as well as PBA at length and got a very distinct impression that they were colluding to protect and perpetrate monopolistic conditions and restrictive trade practices to maintain exclusivity in the electronic media market in an effort to bar other broadcasting entities from entering the television advertising market and thereby depriving them access to advertisement revenues. It is clearly a devise to stifle and eliminate free and open competition in the market. However. at the same time, we were mindful of the other legal questions which needed to be considered after in depth analysis of the relevant laws and their interaction in the context of the mandate of the Constitution of Pakistan. This also requires examination of the regulatory principles of the PEMRA Ordinance, 2002 conferring a role on PEMRA in regulating competition in the field of media. However, such regulator has to remain within the framework of constitutional guarantees and fundamental rights enshrined inter alia in Articles 18 and 19 of the Constitution. The possibility of applicability of Competition Act, 2010 also needs to be examined.
6. Therefore, in the interest of equity and fair play, we directed Medialogic to comply with our order dated 01.08.2018 in letter and spirit and issue ratings to BOL for all intents and purposes by 3.30 p.m. on the same day and inform the Deputy Registrar (Lahore) of this Court. We made it clear that in case of non compliance of our order, the Chief Executive Officer of Medialogic shall personally appear before this Court on the next date of hearing and explain his position as to why he may not be punished in accordance with law for deliberately violating and disregarding express orders of this Court.
7. When the matter was taken up for hearing this morning, at the very outset, the learned counsel for Medialogic was asked if the order of this Court had been complied with. Although, he stated that the order had been complied and BOL had been granted rating, the said claim was vehemently contested by the learned counsel representing BOL. On examination of the document that the learned counsel for Medialogic has referred to, claiming that it depicts grant of rating to BOL, we find no header, title, rating figure, issuer's name or stamp on the document. Therefore, we are not satisfied that the document shows bona fide compliance of our order in letter and spirit. We get the distinct impression that a conscious effort has been made to defy and side step our order and hoodwink the Court into believing that the order has been complied with. We deprecate this attempt. On being prima facie satisfied that our order has deliberately, knowingly and consciously been defied and disobeyed, we issue Show Cause Notice to the CEO of Medialogic to explain why he may not be punished in accordance with law for deliberately violating, disregarding and defying an express order passed by this Court. Notice shall be issued at his address (Medialogic Pakistan (Private) Limited, Ground Floor, 18A-XX, Khayaban-e-Iqbal, DHA. Lahore). The office shall prepare a separate file for initiation of contempt proceedings which shall be fixed together with this Petition.
8. We have been informed that PBA is an association of Broadcasters and Licensees of PEMRA. It has been registered as an Association in terms of the Societies Registration Act, 1860. Although, we have reservations regarding the legality and validity of such registration (which issue will be examined by us at a subsequent stage), it appears that the Association is controlled by and has representation of major Media Houses. It also has associate members who are relatively small TV Channels having less significant share in the market. Although, there are more than one rating agencies in the market, PBA has entered into an agreethent with Medialogic. Such agreement inter alia provides that Medialogic shall not grant ratings to any channel or network which does not have membership of PBA. Side by side it has also executed an agreement with Pakistan Advertisers Society ("PAS") to the effect that it shall not deal with any network/media house which does not have membership of PBA and rating issued by Medialogic.
9. It may be pointed out that ratings issued by rating Companies to different media channels are fundamentally important. It is on the basis of higher rating (which depicts higher viewership) that the advertisers place their advertisements on media channels which generate revenue that constitutes the lifeblood of private media channels. It is also significant that advertisers are also contractually and practically obligated to deal with PBA and PAS in matters of advertising and are therefore obliged, by default, to toe their line.
10. On being questioned by the Court, the learned counsel for PBA categorically stated that it was not obliged to grant membership to BOL for any number of reasons and that being a private society it was free to do so. Learned counsel for the Medialogic went even further and submitted that BOL is one of its competitors in so far as it has its own rating agency. Therefore, they were not obliged to grant rating to BOL which is a competitor for all intents and purposes. The stance taken by Medialogic at this stage is diametrically opposed to the stance taken by it before PEMRA where it was categorically stated that Medialogic had no objection to the grant of rating provided the matter pending before the Court was decided in its favour. We are, therefore, convinced that neither PBA nor Medialogic are interested in granting membership or rating to BOL and are trying various methods and devices to keep it out of the market. They even went to the extent of alleging that BOL does not possess a license issued by PEMRA. This was despite the fact that admittedly BOL has been on air for a considerable period of time without any adverse action from PEIVIRA. The Chairman, PEMRA who is present in Court did not deny that BOL is a licensee of PEMRA.
11. We have gone through the suit filed by PBA before the Civil Courts of Lahore. Perusal of the contents of the plaint clearly indicates that it is a collusive and self-serving suit. The main purpose of the suit appears to furnish a legal shield to an exclusivity agreement and create an artificial and contrived legal hurdle to prevent BOL from seeking rating which as stated above is necessary to enable it to secure advertising revenue in order to remain in the market. It is also significant to note that although the focus of the plaint was to seek relief against BOL, the said company was never impleaded as a party in the said suit. An ex parte restraining order was obtained by PBA against Medialogic to prevent it from granting rating to BOL. Understandably no real effort was made on either side to get the main suit or the matter of interim relief decided. As a result, the said ex parte restraining order has remained uncontested and was cleverly used as an excuse before PEMRA to deny grant of rating to BOL.
12. After careful examination of all relevant documents and the scheme of back to back agreements, it prima facie appears to us that PBA., Medialogic and PAS have joined hands and collusively created a cartel by- creating a monopolistic market. They have used restrictive barriers, curbing free, fair and open competition. This appears to be an attempt to stifle and eliminate competition and create exclusivity in the market for those entities which control PBA. All agreements act in tandem and are skillfully designed to create an exclusive, restrictive and monopolistic atmosphere in the market. These acts of omission and commission prima facie violate and militate against fundamental rights guaranteed to BOL under Articles 18 and 19 of the Constitution which provide that every citizen shall have the right to enter upon any lawful profession or occupation, and to conduct any lawful trade or business. The Constitution actively encourages free competition in the market and frowns upon steps which tend to curb free competition or exclusion (complete or partial) of any citizen from any lawful business, trade or industry. These issues relate to questions of public importance and involve enforcement of fundamental rights.
13. In terms of section 23 of the Pakistan Electronic Media Regulatory Authority Ordinance, 2002 ("the Ordinance"), it is obligatory upon PEMRA to enlarge the choices available to people of Pakistan in the media and ensure accountability, transparency and good governance by optimizing the free flow of information. In this context, section 23 of the Ordinance also provides that no person shall be entitled to the benefit of any monopoly or exclusivity in the matter of broadcasting or the establishment and operation of broadcast media or distribution service or in the supply to or purchase from, a national broadcaster air time, programmes or advertising material and all existing agreements and contracts to the extent of conferring a monopoly or containing an exclusivity clause are, to the extent of exclusivity have been declared to be inoperative and of no legal effect.
14. As a regulator, the powers and duties of PEMRA are clear and unambiguous which have not been adverted by it in passing the order dated 11.07.2018. This constitutes abdication and failure to exercise jurisdiction. While we have refrained ourselves at this stage from expressing a final opinion on the matters which have come to our attention including but not limited to the agreement between PRA and Medialogic, we find that the stance taken by the said parties before the Civil Court, the position taken by Medialogic before PEMRA in the current proceedings and the agreement between PBA and PAS need to be examined in the light of parameters provided in section 23 of the Ordinance in the backdrop of fundamental rights enshrined in the Constitution as adverted to above.
15. Having found the agreement between PBA and Medialogic to be prima facie anti-competition and violative of fundamental rights, we in exercise of powers under Articles 184(3) and 187 of the Constitution and in the interest of justice and continuing violation of fundamental rights of BOL hereby suspend operation of the said agreement dated 15.07.2014 which shall not during the term of its suspension have any legal effect or consequence. Further, it shall not be binding either on the parties thereto or any third party including other media Houses/Channels and advertisers. They shall be at liberty to receive ratings from any one or more of the rating companies presently operating in the market. The D stakeholders in the market including but not limited to advertisers and media companies may deal with each other without recourse to PBA and Medialogic in an environment of free, fair and transparent competition in the market place with a level playing field for all concerned.
16. We also consider it appropriate to observe that in the interest of transparency, free and fair competition, impartiality, removal of conflict of interest and providing a level paying field to all competitors, PEMRA may consider creating its own set up to grant ratings to different channels/networks in its exalted capacity as the regulator of electronic media industry rather than outsourcing and abdicating an extremely important regulatory function in favour of private parties.
17. The matter is referred to PEMRA with a direction to give notice to all concerned parties, hear them and decide the question of validity of the agreements referred to above for their adherence to and compliance with the provisions of section 23 of the Ordinance and Articles 13 and 19 of the Constitution.
18. Let this matter be listed on a date to be fixed by the office. Before the next date of hearing, the Chief Executive Officer of Medialogic shall file his response to the above Show Cause Notice and appear in person before this Court to answer the charges against him.