NEW DELHI: The Delhi High Court has allowed Red FM owned by Digital Radio Broadcasting Ltd, which is part of the Sun Group, to take part in mock auctions for the third phase of FM auctions to be held on 22 and 23 July.

Justice Badar Durrez Ahmed and Sanjeev Sachdeva issued notice to the Government and said it would hear the matter on 24 July.

The order came after Government counsel Sanjeev Narula told the Court that it was not possible for the Information and Broadcasting (I&B) Ministry to postpone the main FM auctions. He said the entire process had been lined and any postponement will have a cascading effect.

The Court had yesterday (21 July) asked the Centre to consider deferring the auctions as it heard a plea by Digital Radio Broadcasting against the government’s decision.

Meanwhile, the Madras High Court said it would announce its orders on 23 July. The court had reserved its orders after prolonged hearing yesterday and had initially said that the orders would be pronounced today (22 July).

Red FM is among the prime bidders in the phase III of FM auctions covering 135 radio channels in 69 cities.

The Ministry had last week issued a list of 21 bidders, which did not include the Sun Group’s Red FM, and then sent a formal communication to the Group on 15 July that it had been denied permission.

The Court has been asked to direct the Centre to permit Sun Group to migrate to the Phase-III regime by allowing it to resubmit the application dated 20 March, 2015 to participate in the auction.

The petitions also said the company was not involved in any dispute with the nation's security, nor had it broadcast anything that affected the security of the nation.

The petition alleges that the order denying permission had been issued “carelessly, with total non-application of mind and in a cavalier fashion, totally unmindful of its consequences and repercussions not only on Sun TV but also on the entire broadcasting and media industry.”

Apart from the denial to participate in Phase III FM auctions, the order also implied that the sister companies of the Sun Group would be compelled to close down FM radio stations, totalling 45 across the nation, the petitioners said.

“Non-inclusion of the company's name on the list is nothing but closing the entire FM stations run by it for extraneous, illegal and mala fide reasons,” the petitions said.

It has pointed out that the Indian Telegraph Act does not make any mention of security clearance, and licence can be terminated or denied only if there is violation of the terms of the agreement including any defaults in payment.

Clause 2.2(b) of the Information Memorandum and Clause 3.2(b) of the Notice Inviting Application says only a company controlled by a person convicted for an offence involving moral turpitude or money laundering or drug trafficking or terrorist activities or is declared as insolvent will not be eligible to apply. The petitioners said there was nothing in the rules to deny permission to the Sun Group, which is controlled by the Maran brothers.