Shri Vipin Mehra vs Star India Pvt. Ltd.
2003 Latest Caselaw 933 Del

JUDGMENT

R.C. Chopra, J.

1. This petition under Section 9 of the Arbitration and Conciliation Act 1996 ( hereinafter referred to as "the Act" only) is with the prayer to restrain the respondent from discontinuing or disconnecting the supply of signals to the petitioner's cable network.

2. The facts relevant for the disposal of this petition, briefly stated, are that the petitioner is running a cable distribution network under the name and style of M/s World Vision at Model Town, Delhi. The respondent is a broadcaster providing various channels to the cable operators through out the country. According to the petitioner in the year 2002 vide a Subscription Agreement dated 14.2.2002 he was provided transmission rights of various channels by respondent for the areas comprised of Model Town Phase I, II and III, MCD Colony and Water Supply Colony, Delhi. subsequently, on his request the respondent agreed to extend his operations to the adjoining areas also consisting of Azad Pur, Adarsh Nagar, Naniwala Bagh, Kewal Park, Suraj Nagar, Romeshwar Nagar, Jahangir puri, Delhi. An Agreement in this regard was entered into on 1.1.2003 which was operative from 1.1.2003 to 31.12.2003. The petitioner submitted that on 1.12.2002 in anticipation of inclusion of new areas he entered into an agreement with his franchisee Ranjit Singh of Rama Cable appointing him for the additional areas. It was also averred that due to increase in the area and number of subscribers the petitioner was required to pay Rs. 30 per subscriber for 1000 subscribers aggregating to Rs. 30,000/- per month. This subscription agreement was prepared and presented by respondent and was signed by the petitioner but copy thereof was not provided to him by the respondent. Since the earlier agreement was to expire on 13.1.2003 but was terminated on 31st December, 2002 a credit for 13 days in the sum of Rs. 8775/- was given to the petitioner by the respondent by adjusting the amount in the bill of January, 2003. The balance of Rs. 21,225/- was paid by the petitioner to respondent vide Bankers Cheque dated 8.1.2003 which was duly received by the respondent. In the month of February, 2003 the respondent refused to accept the monthly charges which were later received on 7.3.2003. On inquiries the petitioner came to know that M/s Win Cable & Data Com. Pvt. Ltd in which the respondent had substantial equity holding, was also operating in the additional areas with the petitioner and as such the respondent was intending to disconnect the signals to the petitioner. The petitioner's franchisee Ranjit Singh filed a suit for injunction in the District Courts against the petitioner as well as respondent and others in which ex parte ad interim injunction was granted but later his application was dismissed. The petitioner pleaded that in view of its agreement dated 1.1.2003 the respondent has no right to disconnect or discontinue supply of signals to his cable network and as such prayed for interim relief. It was pleaded that in the event the respondent succeeds in its designs the petitioner would suffer business loss in-excess of Rs. 50 lakhs and he would be rendered unemployed.

3. Respondent filed a reply to the petitioner's application raising numerous preliminary objections including that there was no concluded contract between the petitioner and the respondent. It was also added that respondent had sent a Subscription agreement to the petitioner for the earlier areas only but the petitioner made certain changes therein unilaterally including the additional areas which was not acceptable to the respondent. It was stated that in the absence of a concluded contract between the parties, the arbitration clause also as contained in the agreement did not survive. Referring to the earlier suit filed by Ranjit Singh against the petitioner and the present respondent it was pleaded that in view of dismissal of the petitioner's application under Order 39 Rule 1 and 2 the petitioner was disentitled to claim same relief in the present petition . It was denied that the petitioner had been given any right to provide cable network services in the newly added areas. It was specifically stated in para 7 of the reply that the petitioner had mischievously entered the additional areas in the Subscription Agreement dated 1.1.2003.

4. I have heard learned counsel for the petitioner and learned counsel for the respondent. I have gone through the records.

5. Learned counsel for the petitioner has vehemently argued that the petitioner is entitled to interim relief as prayed in as much as the Agreement dated 1.1.2003, which was a concluded contract between the parties, is still subsisting and is operative up to 31.12.2003. It is submitted that in the course of arguments, learned counsel for the respondent has conceded that the additional areas mentioned in the said agreement are in the writing of the representative of the respondent and as such the respondent cannot contend that the said areas were not part of the agreement. Relying upon the payment of Rs. 30,000/- per month, it is submitted that this increase in the Subscription was on account of the increase on the number of subscribers as well as the increase in the area and as such the respondent has no right to stop the supply of signals to the petitioner.

6. Learned counsel for the respondent on the other hand has vehemently opposed the prayer made by the petitioner on the ground that the agreement dated 1.1.2003 was not signed by the respondent in token of having accepted the terms and conditions contained therein and the increase in the monthly fee was only on account of the fact that the number of subscribers had increased . Referring to the suit filed by Ranjit Singh a franchisee, it is argued that in the said suit the petitioner even had filed an application under Order 39 Rules 1 and 2 of the CPC for restraining the respondent from stopping the supply of signals but his application was dismissed. It is argued that in view of dismissal of the said application, the petitioner has no right to come to this Court and claim the same relief again. It is also argued that it is not a fit case for grant of interim relief to the petitioner for the reason that the petitioner has no prima facie case in his favor and damages can be equally efficacious remedy in case it is held that the respondent had no right to disconnect the supply of signals to the petitioner. It is also contended that in case this Court issues an ad interim injunction it would not be in a position to supervise its compliance.

7. Coming to the question as to whether a concluded contract had come into existence or not between petitioner and respondent, this Court must observe at the outset itself that according to the Indian Contract Act, 1872 a concluded contract comes into existence as soon as an offer made by one party is accepted by the other party. The "proposal" referred to in Section 2(a) of the Indian Contract Act is defined as willingness of one party to do or to abstain from doing anything with a view to obtain the assent of the other to such act or abstinence. The "acceptance" as defined in Section 2(b) of the Act means when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted and a proposal when accepted becomes a promise. The communication of the proposal or acceptance can be made by any act or omission of the party and it is complete in terms of Section 4 of the Contract Act, in the case of "proposal" when it comes to the knowledge of the person to whom it is made and in the case of "acceptance" when it is put in the course of transmission so as to be out of the power of the acceptor and as against the acceptor, when it comes to the knowledge of the proposer. According to Section 10 of the Contract Act all agreements are contracts if they are made by free consent of parties, competent to contract, for a lawful consideration and with a lawful object, and are not declared to be void.

8. The law therefore is well settled that as soon as the proposal made by a proposer is accepted and the communication of acceptance to the proposer is out of control of the acceptor, a concluded contract between the parties comes into existence and thereafter both the parties stand precluded from revoking the same except in accordance with the terms and conditions of the contract. In a case like the present one where the acceptance of the offer was handed over to a representative of the proposer the contract was at once complete for all intents and purposes. Every agreement/contract need not be in writing and therefore a contract may come into existence even by an oral offer and oral acceptance. It is prima facie shown that the Subscription Agreement dated 1.1.2003 which bears the signatures of the petitioner was communicated to the petitioner by respondent through its representative who had filled up the columns thereof. This Subscription Agreement in original thereafter remained in possession and custody of the respondent and was produced even in Court by the respondent. Therefore, the proposal made by respondent as contained in this Agreement was accepted by the petitioner by signing the agreement and handing it over to the representative of respondent and as such prima facie a concluded contract had come into existence between the parties. It does not matter if the respondent did not put its signatures on this Agreement because this Agreement emanated from the respondent carrying a proposal to the petitioner which was accepted by the petitioner. If the respondent had not taken it as a concluded contract the signals ought not to have been supplied by it to the petitioner after 1.1.2003 and monthly subscription also would not have been received. Not only this, in case the respondent had any reservations in regard to this Subscription Agreement, the respondent could have put the petitioner to notice that the respondent had not accepted this Agreement as a concluded contract due to variation of the terms or some other reason. The plea of the variation of the terms would be discussed hereinafter but suffice it would be to say that in the course of arguments, learned counsel for the respondent fairly conceded that the so called additions in Col. No. 2 of agreement in regard to the additional areas were in the hand-writing of respondent's representative who had filled up other portions of this Agreement. Thus, prima facie it must be held that Agreement dated 1.1.2003 was a concluded contract between the petitioner and respondent.

9. Learned counsel for the respondent has vehemently argued that the additional areas mentioned in Col. No. 2 of the Subscription Agreement dated 1.1.2003 were not part of the offer made by the respondent to the petitioner and interpolations were made therein unauthorisedly and fraudulently by the petitioner. This submission cannot be prima facie sustained for the reason that it has been conceded that the additional areas mentioned in Col. No. 2 of the agreement are in the hand writing of the representative of the respondent who had filled up the other columns of this Agreement. Initially, in its reply the respondent had pleaded that these additional areas were introduced by way of interpolations by the petitioner but the said stand was given up on account of the fact that the additional areas are also in the hand writing of respondent's representative itself. Moreover, it is also shown on record that this agreement had all along remained in possession and control of the respondent and in case the respondent had any objection against the additional areas mentioned in Col. No. 2 the respondent ought to have issued some notice to the petitioner raising objections and ought to have refused to receive any subscription from the petitioner for transmitting signals. No such action was taken by the respondent against the petitioner. The fact that on 1.12.2002 the petitioner had entered into an agreement with his franchise Ranjit Singh permitting him to operate in additional areas does not show that the petitioner was planning some fraud or forgery but rather it prima facie suggests that negotiations for inclusion of additional areas in the agreement between the petitioner and the respondent were already on and in anticipation of grant of additional areas the petitioner entered into a contract with its franchisee Ranjit Singh on 1.12.2002 giving him right to operate in the additional areas. These questions, however, remain open for decision by the Arbitral Tribunal in accordance with law but prima facie it cannot be said that the petitioner was not given any right to have its cable net work in the additional areas mentioned in para 2 of the Subscription Agreement dated 1.1.2003.

10. Learned counsel for the respondent has vehemently argued that the franchisee of the petitioner had filed a suit for permanent injunction in the District Courts in which the respondent was also imp leaded as one of the defendants and in the said suit not only the franchisee Ranjit Singh but the petitioner also had filed an application under Order 39 Rule 1 and 2 of the CPC for restraining the present respondent from stopping the transmission of signals. He submits that this application was dismissed and the orders passed by learned ADJ had become final and as such the petitioner has no right to claim the same relief again from this Court by invoking Section 9 of the Arbitration and Conciliation Act, 1996. After going through the pleadings and the orders passed by learned ADJ, this Court finds that the controversies and the issues raised by the franchisee Ranjit Singh in the said suit were entirely different from those which are being raised by the petitioner before this Court and are to be adjudicated upon by the Arbitrator. If apprehending contempt action the petitioner sought some interim relief against the present respondent but failed that does not preclude him from invoking the remedy available to him against the respondent before this Court as the suit filed before learned ADJ was not arising out of the Agreement between the petitioner and the respondent but was based upon the Agreement dated 1.12.2002 between the franchisee of the petitioner and petitioner. Therefore, it cannot be said that the petitioner stands precluded from invoking the jurisdiction of this Court for interim relief under Section 9 of the Arbitration and Conciliation Act, 1996.

11. Learned counsel for the respondent submits that the petitioner is not entitled to interim relief in as much as damages to him would be an alternative and equally efficacious remedy. It is also pleaded that the contract between the parties was determinable in nature and as such no injunction may be issued. It is contended that in case an ad interim injunction as prayed is granted, the Court may not be in a position to supervise and enforce its compliance. Learned counsel for the petitioner on the other hand submits that damages would be no adequate compensation as the petitioner, in case of the breach of agreement dated 1.1.2003 by the respondent, would suffer not only heavy financial loss, and loss for business reputation but would be involved in further litigation also with his franchisees in respect of the additional areas. It is also submitted that up to 31.12.2003 the respondent is under a contractual obligation to provide him signals in terms of the agreement dated 1.1.2003 and in case there is any breach of the injunction order issued by the court the respondent would be liable for contempt. After considering the submissions made by learned counsel for the parties, this Court is of the considered view that where the parties are shown to have entered into a commercial contract for a specified period every effort should be made to make them abide by the terms and conditions thereof. Damages would certainly be not an adequate relief to the petitioner for the reason that not only he would suffer loss of business and trade reputation but he may be involved in further litigation also with his franchisees. The Court can certainly supervise and enforce compliance of its directions in case of violation as the same would render the respondent liable to action under Contempt of Courts Act.

12. This Court, therefore, finds that the petitioner has succeeded in establishing a prima facie case in its favor for grant of interim relief as prayed. The balance of convenience is also more in favor of the petitioner who has acted upon the agreement dated 1.1.2003 and in case interim relief is not granted the petitioner is likely to suffer irreparable loss/injury. However, the petitioner has to be put to certain terms while granting interim relief so that in case it is ultimately held that the petitioner had no right to the additional areas or there was no concluded contract between the parties it would become difficult for the respondent to recover his losses and dues from the petitioner. The financial interests of the respondent, therefore, have to be properly protected.

13. Under the circumstances, till the finalisation of the arbitral proceedings between the parties or 31.12.2003, whichever is earlier, the respondent stands restrained from disconnecting its signals to the petitioner subject to the condition that within two weeks from today the petitioner furnishes a security in the sum of Rs. 5 lakhs to the satisfaction of the Registrar General of this Court and continues to pay monthly subscriptions also in terms of agreement dated 1.1.2003.

14. Application stands disposed of.

15. Nothing stated herein shall be taken as an expression of opinion on the merits of the disputes between the parties before the Arbitrator as the observations made herein are tentative only.