Prasar Bharti vs Joslin Communications Pvt. Ltd.
2005 Latest Caselaw 504 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 Joslin Communications Pvt. Ltd., arising out of Agreement between the parties dated 31.1.1995.

2. Facts, in brief, are: That an agreement dated 31.1.1995 was executed between Doordarshan Commercial Service (hereinafter 'DCS') and M/s. Joslin Communications Pvt. Ltd. (hereinafter the 'respondent') whereby 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 been incurred, entered into and engaged to be done 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 31.1.1995, respondent released programmes 'Cinema Cinema', 'Kingdom Adventure', 'Yeh Ishq Nahin Asan', 'Prem Sudha', 'Spot', etc. which were duly telecast on Doordarshan. The respondent availed commercial time in respect of the said programmes and placed advertisements/sponsorship programmes with the Doordarshan Commercial Service for which bills were raised from time to time. The amount billed by the petitioner was not paid and as on 31.3.2003 a sum of Rs. 1,98,36684/- was due from the respondent, which included the principal sum of Rs.1,02,43,125/- and interest @ 18% per annum. It is further pleaded that Director General, Doordarshan has failed to appoint an arbitrator as per the agreement, on account of paucity of officers available to act as arbitrators, thus, 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 programmes 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 programme '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 be applicable to the similar other claims. It is also argued that claims of the petitioner are barred by limitation. 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. In support of his submission, he placed reliance on the decision of the Single Judge of this Court in Rajbir Singh v. Union of India . However, on being asked whether the writ court has ordered stay on appointment of arbitrator, learned counsel frankly admitted that there is no stay.

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 adjudicatory role and return a verdict, 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 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. The validity of the agreement having an arbitration caluse is not in dispute. 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, limitition, 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 arise out of Agreement dated 31.1.1995, 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 22nd March, 2005 at 4.30 pm. Learned arbitrator shall fix her 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.