The single judge bench of the Punjab and Haryana High Court held that it is well settled law that freedom of contract must be founded upon equality and bargaining power between the contracting parties. The party having less bargaining power is left with little or no choice but to accept the unfair and unreasonable terms imposed upon it by the party with superior bargaining power.
Brief facts
The factual matrix of the case is that Plaintiff is a well-known Indian film actor, singer, and model and Defendant no.1 is the Proprietor of Defendant no.2 i.e.‘Simran Music Industries’, which also operates as ‘Single Track Studios’ with YouTube username ‘hawkrecords’. The Plaintiff sang one song titled ‘Vehem’ which was recorded by the defendant in the year 2019. However, no contract was signed between the parties. Thereafter, the Plaintiff was invited to participate in the reality TV show ‘Big Boss Season 13’, which premiered on national television the Plaintiff entered the Big Boss House and just two days prior to entering the big boss house, the defendant approached the Plaintiff requesting and pleading her to sign a quick “Memorandum of Understanding” regarding a show of intent with respect to their future working relationship. When the same was denied by the Plaintiff, she was told that it was nothing but a succinct MoU regarding the song ‘Vehem’ and could always be modified, if need be. On repeated requests by the defendants, the plaintiff signed the same in a hurry and left for Big Boss House. Furthermore, after the show was over, she started getting many offers. However, she got to know that the defendants were sending E-mails to third parties claiming that the plaintiff was their exclusive artist as per the Agreement and was not allowed to appear in any other music video without the permission of the defendants. Then, the plaintiff asked for a copy of the said agreement and they refused to share. Later on, the defendants sent another set of emails to another music label company and demanded settlement consideration if they wished to work with the Plaintiff. After that, the Plaintiff sent the legal notice to the defendant and the defendant replied to the same and shared the copy of the agreement with the plaintiff. Thereafter, again emails were sent by the defendant and then the plaintiff served the defendant with the legal notice in which it was asserted that the agreement was void and she had rescinded the said Agreement and was, in no way, bound by the same. Then, for about two years the plaintiff didn’t receive any communication from the defendants and the plaintiff successfully completed many projects over the two years including songs, advertisements, music videos, reality shows, movies etc., without any direct or indirect interference on the part of the defendants. After a long gap, the defendant raised an ownership dispute through their Youtube channel ‘Single Track Studios’ with username ‘hawkrecords’ on the plaintiff’s latest music video titled ‘Ghani Syanni’ produced by ‘Desi Music Factory’ and pop due to which Youtube temporarily suspended the revenue inflow to the producers of the song, as per their protocol.
The suit of temporary injunction was filed by the Plaintiff against the defendant. The trial court dismissed the application on the ground that no finding can be given with respect to the Agreement that the same is a result of misrepresentation, without consideration or against public policy. The plaintiff is already working on different projects. So, no prima facie case is made out in favour of the plaintiff and the relief claimed in the application is not such it cannot be compensated in terms of money. Then, the appeal was filed before the learned appellate court and then, the same was allowed. Hence, the present revision is filed.
Contentions of the Petitioner
The Petitioners/defendants contended that no dispute was ever raised by the Respondent that she had not signed the agreement in question. It was furthermore contended that the defendants sent different E-mails to third parties in order to bring to their notice with respect to breach of trust on the part of the plaintiff. In order to avoid the medium of litigation, they preferred the medium of mediation. Also, the Negative Covenant in the Agreement and the same binds the parties that at the fag end of the period of the Agreement, defendants cannot be restrained from exercising the right that belonged to them. The Petitioner relied upon the judgment titled Global Music Injunction Pvt. Ltd. vs. Shatrughan Kumar Aka Khesari Lal Yadav & Others.
Contentions of the Respondent
The Respondent/ Plaintiff contended that the agreement is the result of misrepresentation and the same is with consideration. Hence, it will be considered to be void. It was furthermore contended that the Plaintiff had already served the defendant with the legal notice in which the plaintiff clearly mentioned that she had rescinded the said Agreement. Since the Agreement itself stood rescinded, the defendants cannot force the plaintiff to comply with the negative covenant in the Agreement. Also, the plaintiff didn’t receive any further communication or objections from the defendants, which meant that the matter was finally settled. The Respondent relied upon the judgment titled Simran Music Company vs. Prit Brar and others
Observations of the court
The Hon’ble Court observed that the basis of freedom of contract needs to be the negotiating power and equality of the parties to the contract. The party with less bargaining power is left with no choice but to accept the unfair and unreasonable conditions that the side with more bargaining power has forced upon it. Also, the defendants Company, due to its goodwill and reputation in the music industry, is placed on a higher pedestal, whereas the plaintiff, who was an aspiring singer, was dreaming of creating her place in the music industry and accordingly, in order to fulfill her dreams, acceded to the unfair terms mentioned in the Agreement.
The court noted that to grant an injunction, the Courts are required to see three ingredients i.e. prima facie case, balance of convenience, and irreparable loss or injury. In the instant case, the agreement cannot be prima facie considered to be valid as the terms in the agreement are unfair and the same is the result of one party having superior bargaining power and the other party at a very inferior position with low bargaining power. Furthermore, the defendants did not interfere with the working of the plaintiff for a long period of two years after receiving legal notice from her, rescinding the Agreement in question. Balance of convenience is also in favour of the plaintiff. At last, if the plaintiff is estopped from working, except for the defendants, on the basis of an unfair Agreement, the plaintiff would suffer irreparable loss and injury.
Based on these considerations, the court found no merit in the present revision petition.
The decision of the court
With the above direction, the court dismissed the revision petition.
Case Title: Sajjan Kumar Duhan and another V. Shehnaz Kaur @ Shehnaaz Gill
Coram: Hon’ble Mr. Justice Gurbir Singh
Case No.: CR No.1855 of 2024
Advocates for the Petitioner: Dr. Anmol Rattan Sidhu, Senior Advocate with Mr. Harlove Singh Rajput, Advocate and Mr. Jashandeep Singh Bains, Advocate
Advocates for the Respondent: Ms. Fury Jain, Advocate and Mr. Taranjeet Singh Dosanjh, Advocate
Read Judgment @Latetslaws.com
Picture Source :