The Madras high court on Thursday passed an interim order allowing three Sun Group entities to take part in phase three of the FM radio auctions starting next week, offering at least a temporary reprieve to the media group in its battle with the central government.

Justice M. Sathyanarayanan, who passed the order, said the results of the auction should be kept in a sealed cover until further orders from the court.

The judge also said the decision is subject to the result of the main writ petition filed by the group seeking a court directive for the quashing of an order passed by the information and broadcasting ministry barring the Sun Group from taking part in the auctions.

Justice Sathyanarayanan’s order came in response to petitions filed by Sun TV Network Ltd, South Asia FM Ltd and KAL Radio Ltd—all units of the Sun Group controlled by media baron Kalanithi Maran. The petitions sought a court directive that would allow them to take part in the auctions.

Investors cheered the interim ruling. Shares of Sun TV Network climbed 6.02% to end at 273.90 on the BSE on a day the benchmark Sensex fell 0.47% to 28,370.84 points.

Two other Sun Group companies—Digital Radio (Delhi) Broadcasting Ltd and Digital Radio (Mumbai) Broadcasting Ltd—have challenged the information and broadcasting ministry’s move to bar them from the auctions in the Delhi high court.

Sun Group’s Red FM radio station was among the prime bidders in the phase three FM auctions covering 135 radio channels in 69 cities. The auctions are due to start on 27 July and close towards September-end.

In June, the home ministry denied a security clearance to 33 television channels run by Sun TV Network on grounds that their continued airing would have an “adverse impact on the economic security" of the country because of a pending probe against the company’s promoters by the Central Bureau of Investigation and the Enforcement Directorate.

The five Sun Group entities that have approached the courts were barred from participating in the auctions, while 21 other operators were granted approval.

Media reports have said that all the Sun Group companies paid 87 crore at the time of application as earnest money. The ministry of information and broadcasting wanted companies to pay 25% of the reserve price per licence they were bidding for upfront.

That would have made the group eligible to bid up to 350 crore across circles. The group’s application, however, was rejected.

Mint couldn’t immediately ascertain the money paid upfront by each of the Sun Group entities.

Chennai: The Madras high court on Thursday issued an interim order allowing Sun Group to participate in the Phase-III auction process of FM radio.

Justice M. Sathyanarayanan, who passed the order, said the results of the auction should be kept in a sealed cover till further orders. The judge also said the decision is subject to the result of the main writ petition filed by the group seeking a direction to quash the order passed by the Information and broadcasting ministry.

The I&B ministry had disallowed Red FM from taking part in the auction process on the basis of absence of clearance from the Union home ministry. On Tuesday, the court had reserved its order on an interim plea by the Sun Group seeking a direction to the Centre to allow it to participate in the auction process.

Making the interim prayer in a batch of six petitions, the Sun Group and its companies had sought a stay on the 15 July order of the I&B ministry refusing the permission. Senior counsel Raman, appearing for the petitioner, had said the group had been denied security clearance on the ground it faced Aircel-Maxis case linked to 2G spectrum allocation case, money laundering charges and alleged illegal telephone exchange case (in which former telecom minister Dayanidhi Maran and his brother and Sun Group owner Kalanithi Maran are accused). He submitted that when chargesheeted persons were allowed to enjoy the post of ministers, how could the persons facing mere FIRs be disallowed from running FM radio stations.

He contended that Indian Telegraph Act, 1885, nowhere mentions about the security clearance. Raman had further said there were contradictions in the statements of the Union government that the Marans caused a loss of 443 crore to the exchequer by establishing a mini-telephone exchange using it illegally for Sun TV whereas the FIR filed in this connection says that the loss was only 1.17 crore.

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