Prasar Bharti vs Fame Communications
2005 Latest Caselaw 494 Del

JUDGMENT

S.K. Agarwal, J.

1. By this petition under Section 11(6)(c) of the Arbitration and Conciliation Act, 1996, petitioner Prasar Bharti (Broadcasting Corporation of India) has prayed for appointment of a sole arbitrator to adjudicate upon their disputes with the respondent M/s. Fame communications, arising out of Agreement between the parties dated 28.1.2994.

2. Facts, in brief, are: That an agreement dated 28.1.1994 was executed between Doordarshan Commercial Service (hereinafter 'DCS') and M/s. Fame Communications (hereinafter the 'respondent') whereby the respondent was appointed as an accredited agent. The agreement inter alia provided that respondent will be responsible for payment of advertisement and other related bills jointly and severally with advertisers. The respondents were entitled to 15% commission. The agency was responsible for payment of advertisement and other related bills, jointly and severally with the advertisers. The respondent was to pay to DCS its bill according to the rules framed and within the credit period of 45 days from the first of the month following the date of the telecast of advertisement. They were also made liable to pay interest @ 18% per annum on all amounts due and payable beyond the stipulated period. It is pleaded that in 1997 the Prasar Bharati (Broadcasting Corporation of India) Act, 1990 was notified, in terms of Section 3 whereof, all contracts entered into by Akashvani or Doordarshan are deemed to have been entered into and engaged with or for Prasar Bharati. And in terms of Section 16(c) all sums due to the Central Government in relation to Doordarshan are deemed to be due to the Corporation.

3. In pursuance of the Agreement dated 28.1.1994, respondent released programmes 'Music Station', 'Noorejahan', 'Jai Mata Ki' and 'Kati Patang Hai yarron', which were duly telecast by Doordarshan on its channels. The respondent availed commercial time in respect of the said programmers and placed advertisements/sponsorship programmers with the Doordarshan Commercial Service for which bills were raised from time to time. The amount billed was Rs. 26,19,67,992.00, against which respondent paid only Rs. 14,8760,739.00, thus leaving an outstanding balance of Rs.11,32,07,253.00 It is further pleaded that the respondent is liable to pay this amount Along with interest @18%, which has not been paid despite demand dated 11.3.2003. In terms of Clause (5) of the aid Agreement, by an order dated 17.4.2003 the Director General, Doordarshan appointed Shri K.S. Sharma, Chief Executive Officer of Prasar Bharti as the Arbitrator. However, Shri K.S. Sharma, vide his letter dated 28.8.2004, withdrew from the arbitration proceedings. A situation, as contemplated by Section 11(6)(c) of the Act has arisen. The petitioner has prayed for appointment of a sole arbitrator. Respondents have filed their reply, opposing the prayer. I have heard learned counsel for the parties.

4. Learned counsel for the respondent argued that the issues involved in the case are beyond the domain of arbitration and only writ court will have exclusive jurisdiction to deal with the same. It was argued that claims of the petitioner are based upon the Rate Card issued by Doodarshan and it is the case of the respondent that the said Rate Card conferred uncanalized, unbridled, unfettered, unguided and wholly arbitrary power on the petitioner with regard to fixation of the rates for telecast of the programmers in question, therefore, the said Rate Card is liable to be quashed, being violative of Articles 14 and 19 of the Constitution of India. Learned counsel further argued that the producer of the programmer 'Jai Mata Di' has filed a writ petition, challenging the said Rate Card, being CW.3575/2001, which is still pending and that the outcome of the said writ petition would have a bearing on similar other claims. Referring to Clause (i) of the Agreement learned counsel submitted that respondent's responsibility for payment of advertisement and other related bills is joint and several with the advertiser. It is also argued that claims of the petitioner are barred by limitation. In support of his submission, he placed reliance on the decision of the single Judge of this Court in Rajbir Singh v. State . However, learned counsel frankly admitted that there is no stay against appointment of the arbitrator.

5. Law with regard to appointment of arbitrators is well-settled by several authoritative pronouncements of the Apex Court. The court, while exercising jurisdiction under Section 11 of the Act is not required to adopt an ad judicatory role and return a vedict, recording reasons as to the existence or otherwise of the agreement or as to the tenability and legality of the respective claims. Even if there is an objection to the existence of an enforceable valid agreement, it has to be adjudicated by the arbitral tribunal and it is impermissible for the Court to undertake an adjudicatory task of judging contentious issues between the parties. Reference in this regard may be made to the recent decisions of the Supreme Court in Hindustan Petropeum Corporation Ltd. v. Pinkcity Midway Petroleums ; Konkan Railway Corporation Ltd. v. Rani Construction (P) Ltd. ; and FCI v. Indian Council of Arbitration and Ors. .

6. Coming back to the facts at hand, in this case, admittedly, there is a valid arbitration agreement between the parties. Therefore, disputes arising between them ought to be adjudicated by the arbitrator only. Issues being raised by the respondent on joint liability with the advertiser, limitation, etc. may form part of reference before the arbitrator.

7. For the foregoing reasons, the petition is allowed and Mr. Justice D.P. Wadhwa, a retired Judge of the Supreme Court, C-25, Panchsheel Enclave, New Delhi-110017 (Tel: 26493388) is appointed as the sole arbitrator to decide the disputes which have arisen out of Agreement dated 28.1.1994, between the parties. It shall be open to the parties to raise all claims and counter claims before the learned arbitrator. Parties shall appear before the learned arbitrator on 21th March, 2005 at 4.30 pm. Learned arbitrator shall fix his own remuneration after discussion with learned counsel for the parties. A copy of this order be sent to the learned arbitrator.

8. Petition stands disposed of. Order dusty.