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Thursday, Apr 29, 2004

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Ministry can encash bank guarantees of FM radio cos: Bombay HC

Our Bureau

New Delhi , April 28

EVEN as the private FM radio companies are still pushing for a deferment on payment of licence fee, the Government can encash the bank guarantees if these operators do not pay up before the deadline. The radio companies have to pay their annual licence fee by April 29 or within the next one week.

It is indicated the Finance Ministry is unlikely to permit a deferment of licence fee. However, the Information and Broadcasting (I&B) Ministry has not received a final response from them.

Sources in the I&B Ministry said that the Bombay High Court after hearing a petition filed by Entertainment Network India Ltd (ENIL) said that the Ministry could encash the bank guarantee deposited by the radio companies at the time of issuing of licences. "The Government cannot, however, cancel the licences," they said.

The I&B Ministry, meanwhile, is waiting for a response from the Finance Ministry on the issue and is unlikely to encash the bank guarantees in a hurry. The I&B Minister, Mr Ravi Shankar Prasad, had written to Finance Minister, Mr Jaswant Singh on the issue of deferment. "We will wait for the opinion of the Finance Ministry and then take a comprehensive decision on all the cases," the officials said. The Ministry may also refer the issue to the Election Commission after it receives the recommendations of the Finance Ministry.

The private FM companies, on their part, are not keen on paying up the annual licence fee. They are waiting for the Government to finalise the new norms for FM radio. "Both the Amit Mitra committee report and the recommendations of the Telecom Regulatory Authority of India (TRAI) were Government initiatives and therefore a deferment can be given till the new norms are finalised," said a senior official in a radio company.

Meanwhile, Living Media's Radio Today is also planning to go to court while the Ispat Group's Music Broadcast Pvt Ltd has decided to wait and watch before taking a legal recourse. Another Mumbai operator, Millenium Mumbai has decided to pull its channel off air from Thursday and Radio Mid-Day West has given notice to surrender the licence.

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