Media Transasia India Ltd. And ... vs Indian Airlines Ltd. And Ors.
2002 Latest Caselaw 1366 Del

JUDGMENT

R.C. Chopra, J.

1. This application under Order 39 Rules 1 & 2 read with Section 151 of the Code of Civil Procedure is for grant of ad interim injunction in favor of the plaintiffs to restrain the defendants from placing on board of Indian Airlines and Alliance Air Flights, their offices and in lounges at various Airports in the country, any other in-flight magazine except the plaintiffs magazine named "SWAGAT". In the course of the arguments, however, Shri Gopal Subramanium, Sr. Advocate for the plaintiffs has limited his prayer to interim injunction for restraining the defendant No. 1 from putting on the flights of Indian Air Lines only the proposed Magazine "DARPAN' which is being printed by defendant No. 3 for defendant No. 2, Alliance Air.

2. The facts relevant for the disposal of this application, briefly stated, are that the plaintiffs have filed a suit for declaration and permanent injunction against the defendants alleging that the plaintiffs had entered into an Agreement dated 14.5.1998 with defendant No. 1 in regard to the publication of an in-flight Magazine titled "SWAGAT". According to the plaintiffs all over world an in-flight Magazine is exclusive in character and is identified as the brand ambassador of the concerned Airlines and as such has exclusivity. According to the plaintiffs their agreement of 1998 subsists up to 2004, in terms of which the plaintiffs are printing and supplying 60,000/- copies of the magazine "SWAGAT" to defendant No. 1 every month for placing the same on board the flights of Indian Airlines defendant No. 1 and the Alliance Air-defendant No. 2. The plaintiffs are not only supplying 60,000 copies every month free of cost but in addition are paying a royalty also of Rs. 8,75,000/- per month to defendant No. 1 for the privilege of exclusive circulation rights. They are also providing free advertising space worth of Rs. 5,20,000/- to defendant No. 1 by giving it two full page advertisements. Under the Agreement the ratio of the editorials and advertising space is fixed and the only benefit that the plaintiffs derive out of the Agreement is by way of the advertisements which they receive for the magazine.

3. The plaintiffs allege that in or about October, 2001 they were shocked to see an advertisement in "Times of India" by which the defendant No. 2, Alliance Air, had issued a tender seeking bids for appointing an agency to undertake designing and printing of its in-flight monthly magazine. The plaintiffs made efforts to obtain details about this advertisement and sought clarification from defendant No. 1 also but there was no response. In the month of May 2002 the plaintiffs discovered that defendant No. 3 was openly interviewing people in the travel and hospitality industry in connection with its in-flight Magazine to be printed for defendant No. 2 Alliance Air. It was being represented that the said in-flight Magazine was meant for distribution in Indian Airlines as well as Alliance Air Flights. According to the plaintiffs the impugned action on the part of the defendants was in violation of the plaintiffs rights and privileges in regard to the exclusivity of printing and circulating "SWAGAT" on Indian Airlines flights and was in violation of the agreement dated 14.2.1998. On 3.6.2002 the defendant No. 3 announced the launch of its new in-flight magazine for Alliance Air and Indian Airlines and the letters issued by defendant No. 3 invited proposals for advertising space in its proposed magazine. On 10.6.2002 the plaintiffs wrote a letter to the Chairman-cum-Managing Director of defendant No. 1 seeking clarifications on the matter but there was no response. On 13.6.2002 and 14.6.2002 the plaintiffs wrote two more letters to defendant No. 1. Only on 26.6.2002, a letter was received from defendant No. 1 in which a stand was taken that the contract between the plaintiffs and defendant No. 1 in no way gave exclusivity of circulation to plaintiffs magazine "SWAGAT". The plaintiffs alleged that the Agreement between defendants No. 2 and 3, in regard to the printing and publication of another in-flight magazine was in violation of the Agreement between the plaintiffs and defendant No. 1 as defendants had no right to put any other in-flight magazine on Indian Airlines Flight and was aimed at causing huge financial loss to the plaintiffs. The application under Order 39 Rule 1 and 2 of the CPC for ad interim injunction was also based on the aforesaid pleadings.

4. The defendants filed their written statements and replies controverting the plea of the plaintiffs that they had any right of exclusivity in regard to the printing and circulation of an in-flight Magazine on Board Indian Airlines flights. It was further pleaded that the plaintiffs had no privity of contract with defendant No. 2 and as such the defendant No. 2 was free to enter into an agreement with defendant No. 3 in the matter of printing and publishing its own in-flight magazine. It was pointed out that defendants No. 2 and 3 had already entered into an Agreement for printing an in-flight magazine for defendant No. 2 under the name of "DARPAN". It was pleaded that the in-flight magazine of plaintiffs "SWAGAT" was being placed on the flights of Alliance Air, defendant No. 2, without there being any contract between the plaintiffs and defendant No. 1 in this regard and similarly the defendant No. 2 was also free to place on the flights of defendant No. 1, Indian Airlines, its in-flight magazine "DARPAN". It was clarified that neither the number of the copies received from the plaintiffs was being reduced nor any other action was being contemplated which could be stated to be in violation of the Agreement between the plaintiffs and defendant No. 1. The defendant No. 2 and 4 pleaded that they had no privity of contract with the plaintiffs and as such they could not be injuncted from having a separate in-flight magazine. It was also pleaded that there was nothing in the agreement between the plaintiffs and defendant No. 1 to give exclusivity to the magazine of the plaintiffs or to curtail the rights of defendant No. 1 or defendant No. 2 to have any other magazine. It was stated that suit against defendant No. 2 to 4 was not even maintainable as there was no privity of contract between them.

5. I have heard Sh. Gopal Subramanium, Sr. Advocate for the plaintiffs, Sh. Harish N. Salve, Sr. Advocate for defendant No. 1, Sh. Mukul Rohtagi, Sr. Advocate for defendants No. 2 & 4 and Sh. Arun Jaitley, and Sh. Rajiv Nayyar, Sr. Advocates for defendant No. 3.

6. Shri Gopal Subramanium, Sr. Advocate, appearing on behalf of the plaintiffs has vehemently argued that the exclusivity in favor of the plaintiffs in the matter of the circulation of its magazine "SWAGAT" on board Indian Airlines flights may not be explicit in the agreement dated 14.5.1998 but it is implicit in as much as the concept of an in-flight magazine on the flights of airlines all over the world is based on the exclusivity of such magazines and they are identified as brand ambassadors of their respective Airlines. It is submitted that the agreement between the parties and the facts and circumstances placed on record prima facie establish that the exclusivity was implicit in the agreement and as such, the defendant No. 1 has no right to permit any other in-flight magazine on board its flights. It is submitted that the plaintiffs are not only supplying 60,000 magazines free of cost to defendant No. 1 every month but are paying it a huge royalty also besides providing free advertisement space in its magazine worth Rs. 5,20,000/-. It is argued that all these payments and facilities being provided by the plaintiffs to defendant No. 1 at their cost are in consideration of plaintiffs right to attract advertisements in their magazine "SWAGAT" and in case another in-flight magazine is put on board of Indian Airlines flights it would make serious inroads into the revenue of the plaintiffs and jeopardies the economic viability of their agreement with defendant No. 1. It is submitted that under the circumstances, the plaintiffs have a prima facie case for an interim relief during the pendency of the suit by way of restraining the defendant No. 1 from permitting the defendants No. 2 & 3 to place their proposed magazine "DARPAN" on the flights of defendant No. 1 Indian Airlines.

7. Shri Harish N. Salve, Sr. Advocate for defendant No. 1 has strongly repudiated the claim of the plaintiffs in regard to any exclusivity of rights in the matter of the printing and circulation of an in-flight magazine on board of Indian Airlines flights. According to him, the agreement dated 14.5.1998 did not contain any negative stipulation curtailing the right of defendant No. 1 to have another in-flight magazine on board its flights. He submits that the defendant No. 1 has already issued instructions to defendants No. 2 to 4 not to publicise or project that the magazine "DARPAN" being printed by them is an in-flight magazine of defendant No. 1. He points out that the defendant No. 1, without there being any contract even was placing the magazine of the plaintiffs on the flights of defendant No. 2 and as such, has a right as well as justification to permit the defendant No. 2 also to put its proposed magazine "DARPAN" on the flights of defendant No. 1. It is argued that the defendant No. 1 is abiding by all the terms and conditions of its agreement dated 14.5.1998 with the plaintiffs and has neither reduced the number of its copies nor the share of editorials and advertisements and as such, the plaintiffs cannot make any grievance in regard to the contravention of the terms of their agreement with defendant No. 1. It is submitted that both, defendants No. 1 and 2, are free to have inflight magazines of their choice for placing on board in their flights and as such, the plaintiffs have no prima facie case to show that they are entitled to ad-interim injunction as prayed. Referring to para 10 of the plaint, learned counsel for defendant No. 1 points out that the plaintiffs have come to this Court raising absolutely false and frivolous grounds and as such, they are not entitled to an ad-interim injunction as prayed.

8. Shri Mukul Rohtagi, Sr. Advocate, appearing for defendants No. 2 and 4 supports the submissions made by learned Counsel for defendant No. 1 and submits that the plaintiffs have no right to seek any relief against defendants No. 2 and 4 for the reason that there is no privity of contract between the plaintiffs and defendants No. 2 and 4. It is submitted that defendant No. 2 is a separate entity and was not a party to the agreement dated 14.5.1998 between the plaintiffs and defendants No. 1. He has drawn the attention of the Court to the fact that the plaintiffs had come to know about the decision of defendant No. 2 about the printing and circulation of its in flight magazine in October, 2001 but still the plaintiffs kept on waiting and watching and came to the Court in July, 2002 only when the contract between the defendants No. 2 & 3 had matured and the new magazine was ready for circulation. It is also submitted that the new in-flight magazine of defendant No. 2 has already been printed and its first issue is already out.

9. Shri Arun Jaitley, Sr. Advocate, appearing for defendant No. 3, the printer and publisher of the new in-flight magazine of defendant No. 2 submits that petitioners have no prima facie case in their favor. It is submitted that the new inflight magazine of defendant No. 2 will be promoting a healthy competition between the plaintiffs and defendant No. 3 and as such, the plaintiffs should not feel shy of competing with defendant No. 3. It is pointed out that the plaintiffs have been getting the contract in their favor without any tenders and in violation of the guidelines applicable to public sector undertakings. Not only that, the plaintiffs have been enjoying undue benefit also by way of circulation of its inflight magazine on the flights of defendant No.2 inspite of the fact that under the agreement dated 14.5.1998, the defendant No.1 was under no obligation to place the magazine of plaintiffs on the flights of defendant No.2. It is submitted its rights in the matter of having as many magazines as it wanted for placing on board its flights and as such, the plaintiffs have no prima facie case in their favor. It is argued that the plaintiffs have no cause of action against defendants No.2, 3 and 4 and as such, no orders can be passed injuncting these defendants. He further contends that in the plaint itself, the plaintiffs have reserved their right to claim damages and as such, it is a fit case in which the plaintiffs should be left to pursue their remedy by way of claiming damages only, if made out, in accordance with law.

10. After considering the submissions made by learned counsel for the parties, this Court is of the considered view that the plaintiffs have not been able to establish a prima facie case in regard to the exclusivity of their right for the circulation of their magazine "SWAGAT" on board Indian Airlines flights. Clause 3 of the agreement dated 14.5.1998 relates only to the content of the magazine and speaks of the exclusive nature of the Articles to be printed therein so as to maintain an exclusivity of the magazine but it does not suggest even that the plaintiffs have any exclusive right to circulate their magazine on board Indian Airlines flights. Neither Clause (3) of the agreement speaks of exclusivity in favor of the plaintiffs nor there is any other negative covenant in the agreement forbidding the defendant No.1 from having any other in-flight magazine on its flights. The contention of learned counsel for the plaintiffs that all over world, such magazines are exclusive and are treated as the brand ambassadors of their respective Airlines cannot be accepted in the face of written agreement dated 14.5.1998 in which exclusivity clause is conspicuously missing. This Court does not agree with the submission that exclusivity clause is implicit in the agreement. It appears that after entering into the agreement dated 14.5.1998, which had no exclusivity clause and enjoying the benefit of having their magazine on the flights of defendant No.2 also, inspite of absence of any right in respect thereof, the plaintiffs are now attempting to expand their rights further without any lawful claim or justification.

11. It is also to be noticed that the defendant No.2 is an altogether separate entity with whom the plaintiffs have no privity of contract. The defendant No.2 has full liberty to have its own in-flight magazine. In view of the fact that it has no privity of contract with the plaintiffs in the matter of any in-flight magazine the plaintiffs have no prima facie case in their favor to claim any restraint order against defendant No.2 in the matter of printing and circulation of its own in-flight magazine.

12. Learned counsel for defendant No.1 has categorically stated that defendant No.1 is neither violating nor intends to violate any term of its agreement with the plaintiffs and it has also already issued directions to defendants No.2, 3 & 4 to refrain from representing or projecting to the public as well as tourism and hospitality industry that their in-flight magazine is an in-flight magazine of defendant No.1. It is pointed out that the defendant No.1 is continuing to receive 60,000 copies per month from the plaintiffs and would continue to place them on its flights and shall abide by the terms and conditions of agreement to ensure that the contract between the plaintiffs and defendant No.1 is abided by in its letter and spirit. The plaintiffs' apprehension that the magazine of defendants No.2 & 3 would eat into their advertisements and thereby cause loss of revenue to them say have some truth but so long the defendant No.1 is acting within the terms of its agreement with the plaintiffs this apprehension of the plaintiffs cannot be made a ground for depriving defendant No.1 of its right to have on its board the magazine of defendant No.2. The plaintiffs must get prepared and geared up for a healthy competition with defendant No.3 and improve the quality and content of their magazine so as to attract more advertisements for their magazine "SWAGAT".

13. Under the circumstances, this Court is of the considered view that the plaintiffs have not succeeded in establishing even prima facie that they have any right to injunct the defendants in the matter of printing or circulation of the new in-flight magazine of defendant No.2. They have also failed to establish prima facie that they have any right of exclusivity in regard to the circulation of their in-flight magazine "SWAGAT" on the flights of defendant No.1.

14. Not only that the plaintiffs have no prima facie case in their favor, it is also shown on record that the balance of convenience is more in favor of defendants. The defendant No.1 is acting in accordance with the terms and conditions of its agreement with the plaintiffs and defendants No.2 to 4, who have no privity of contract with the plaintiffs, are exercising their own right to go for a separate in-flight magazine for defendant No.2 under the name of "DARPAN". In case an ad interim injunction as prayed is granted, the defendants No.2 to 4, who are already at a very advanced stage of the printing and circulating of their magazine, would suffer extreme inconvenience and financial loss. As such, the balance of convenience is not at all in favor of the plaintiffs.

15. In the plaint itself, the plaintiffs have reserved their right to sue the defendants for damages. It clearly conveys that damages would be an alternative remedy for the plaintiffs. This Court is of the considered view that the under the facts and circumstances of the case, compensation in terms of money would be an equally efficavious remedy for the plaintiffs. Therefore, the plaintiffs cannot be held entitled to the grant of an ad interim injunction as prayed.

16. Before concluding, this Court may further add that the plaintiffs are liable to be denied the relief of ad interim injunction on the ground of latches and delay also in as much as it is shown that in the month of October, 2001 itself, they had come to know that defendant No.2 was contemplating to have its separate in-flight magazine. When the plaintiffs came across an advertisement in the 'Times of India' regarding tenders for an in-flight magazine of defendant No.2 they ought to have come to the Court immediately and should not have slept over the matter for months together during which period the defendants No.2 to 4 made substantial progress in the matter of the printing and circulation of new magazine "DARPAN". In the course of the arguments, learned counsel for defendants No.2 to 4 placed before the Court the first issue of "DARPAN" which has already been printed and is ready for circulation. Therefore, on the ground of delay and latches also, the plaintiffs have rendered themselves disentitled to the discretionary relief of ad-interim injunction as prayed.

17. In view of the foregoing reasons, this Court is of the considered view that plaintiffs have failed to make out a case for grant of ad-interim injunction. Application under Order 39 Rule 1 and 2 CPC filed by the plaintiffs, therefore, stands dismissed.

18. Nothing stated herein shall be taken as an expression of opinion on the merits of the suit pending before this Court as the observations made herein are on prima facie basis only.