The directions were passed in October by Justice A P Shah on a petition filed by Prasar Bharati urging that Plus Channel be wound up since the company had failed to pay around Rs 8.55 crore it owed the agency for the programme Chitrahaar. The total sum it owes Prasar Bharati is around Rs 22 crore.

According to the petition, Prasar Bharati - which regulates and controls the entire gamut of government-owned electronic media - had entered into an agreement with Plus Channel in 1997 for the production and marketing rights of 20 episodes of Chitrahaar to be beamed on Doordarshan-I. The minimumguarantee fee for each episode was to be Rs 59.4 lakh while a bank guarantee of Rs 1,18,80,000 was to be given. This included the minimum fee for the first episode. The company was also to ensure that its advertising agency would pay all dues to the body within 45 days of the first month that followed the telecast of each episode.

However, Plus Channel's advertising and marketing agency, Amitabh Bachchan Corporation Ltd (AB Corp), which had furnished the initial bank guarantee, had failed to pay the minimum guarantee fee and other amounts due, towards the 15 episodes eventually telecast between February 12 and June 11, 1997. According to the petition, Prasar Bharati had asked the company to pay its dues, but when it failed, it encashed the bank guarantee and directed the company to pay the rest of the amount it owed.

AB Corp eventually claimed that since it was a sick company, Plus Channel had to make the payments. Doordarshan then withdrew the accreditation status granted to Plus Channel and arbitrationproceedings were initiated. The winding-up petition was filed when no payments were forthcoming even by June 1998.

In its defence, Plus Channel pointed out that since arbitration proceedings were still underway, the petition should be dismissed. In an affidavit, it stated that the person under whom the earlier arbitration proceeding were to be carried out had been unable to proceed and another person, Amit Mitra, had only recently consented to be head the proceedings.

The company also objected to the petition on the grounds that the statutory notice of the petition was not sent to the company at the right address as it had shifted to Plus House, Kharani Road, Sakinaka, Andheri. It also alleged that since AB Corp was the designated marketing agency it was responsible for the payments.

However, Justice Shah rejected the contention of the `statutory notice' and observed that the clause on the change in address could be admitted only when the registrar of companies recorded the change. At the time thepetition was filed, the registrar had the earlier address of the company in its records.

Allowing for the arbitration proceeding to continue, Justice Shah however directed that the company deposit Rs 4 crore in two instalments with the court Rs 2 crore by December 31, 1999, and another Rs 2 crore by March 2000. If the company defaults, the winding-up petition will be admitted and advertised as such in papers.