Delhi High Court
Wire & Wireless (India) Ltd &Anr. vs Mr. Anirudh Singh Jadeja on 23 December, 2009
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. Nos.614/2007, 615/2007, 616/2007 & 617/2007
Reserved on : December 10, 2009
Pronounced on : December 23,2009
1. OMP No. 614/2007
WIRE & WIRELESS (INDIA) LTD &ANR. ...Petitioners
Through: Ms. Pratibha Singh and Ms. Surbhi
Mehta, Advocates.
VERSUS
MR. ANIRUDH SINGH JADEJA ....Respondent
Through: Mr. N.Ganpathy and Mr. Yati Soni,
Advocates.
2. OMP No. 615/2007
WIRE & WIRELESS (INDIA) LTD &ANR. ...Petitioners
Through: Ms. Pratibha Singh and Ms. Surbhi
Mehta, Advocates.
VERSUS
MR. ASHWINI KUMAR GAMBHIR ....Respondent
Through: Mr. N.Ganpathy and Mr. Yati Soni,
Advocates.
3. OMP No. 616/2007
WIRE & WIRELESS (INDIA) LTD & ANR ...Petitioners
OMP Nos.614-617/2007 Page 1
Through: Ms. Pratibha Singh and Ms. Surbhi
Mehta, Advocates.
VERSUS
MR.KANAK SINGH RANA ....Respondent
Through: Mr. N.Ganpathy and Mr. Yati Soni,
Advocates.
AND
4. OMP No. 617/2007
WIRE & WIRELESS (INDIA) LTD & ANR. ...Petitioners
Through: Ms. Pratibha Singh and Ms. Surbhi
Mehta, Advocates.
VERSUS
MR.KARAN SINGH JADEJA ....Respondent
Through: Mr. N.Ganpathy and Mr. Yati Soni,
Advocates.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
1. Whether the Reporters of local papers may be allowed to see
the judgment?
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported in the Digest? Yes
% JUDGMENT
OMP Nos.614-617/2007 Page 2
VALMIKI J. MEHTA, J.
1. The facts of the aforesaid cases are more or less similar. Reference is
therefore being made to the facts of the OMP No. 614/2007.
2. The petitioner in this case by means of this OMP under Section 9 of the
Arbitration and Conciliation Act, 1996 in effect prays for the following reliefs,
though the reliefs in the prayer clauses of the petition are differently worded:-
(i) Seeking a restraint against the respondent from using the control
room/head-end and the network operations/assets/equipment of the
petitioners.
(ii) Restraining the respondent from running cable networking business
either in his name or any other name;
(iii) Restraining the respondent from interfering with the entire cable
network business including rights over cable operators/franchisees and
subscriber base/connectivity of the petitioners.
(iv) Appointment of a Commissioner to make inventories and take over
the assets of the petitioners with the respondent (which reliefs have
more or less been granted).
OMP Nos.614-617/2007 Page 3
(v) Restraining the respondent from using the trademark/logos of the
petitioners namely "Siti Cable", "Channel Siti", "Siti Music", "Siti
Hulchul" or any other mark/logos connected or linked with the
petitioner no.1.
Other incidental orders with respect to the aforesaid reliefs have also been
asked for.
3. This court when this case came up for admission on 6.11.2007, passed
the following order:-
"Issue notice, returnable on 12.02.2008.
The learned counsel for the plaintiff has drawn my attention to the
agreement in question and has also indicated that in similar
circumstances in respect of other parties where the same cause of action
had arisen, this court had passed ad interim ex parte orders. That matter
was OMP327/2004 and the order passed thereon was dated 21.09.2004.
Considering all these circumstances, I direct that till the next date of
hearing, the respondent is restrained from using the logos "Siti Cable"
and "Siti Channels" owned by the petitioner No.1 and/or from creating
any third party interest in the movable assets owned by the petitioners
and which are listed in documents 12, 13,14 and Annexure A to the
Agreement.
I also appoint Mr. Tejinder Singh, Advocate (R/o A-162, Gujranwala
Town, Part-1, Delhi 110033 Tel: 27141005 Mobile-9810526009) as a
receiver to take possession of the equipments detailed in document Nos
12,13,14 and Annexure A to the said agreement dated 01.05.2004. The
receiver shall prepare an inventory of all the movables. Thereafter, the
movables shall be stored in a place to be provided by the petitioners.
The above named receiver shall proceed to the address noted in prayer b
(i) for the aforesaid purpose. Insofar as the address given at b (ii) of the
prayer clause i.e., C-202, Sahajanand Complex, 2 nd Floor, Opp
Swaminarayan Mandir, Shahi Baug, Ahmedabad-380004, Mr. Navin
Chawla, Advocate (Mobile: 981011498) is appointed as a receiver to
take the possession of the assets indicated above which may be lying in
OMP Nos.614-617/2007 Page 4
these premises. After preparing an inventory, he shall store the same in
the place to be provided by the petitioners. The respondent is also
restrained from collecting any subscription on behalf of the petitioner
Nos 1 and 2 and shall not interfere with the subscriber base and
connectivity of the petitioners. The said receivers shall be paid a sum
of Rs.30,000/- each as fees.
Dasti.
IA No.12739/2007
Allowed subject to all just exceptions."
4. The counsel for the respondent has not disputed the directions passed by
the order dated 6.11.2007, except the portion ".....shall not interfere with the
subscriber base and connectivity of the petitioners". The counsel for the
respondent states that the respondent is not interested in any of the assets or the
decoders or the trade marks/logos or connectivity of the petitioners and
undertakes not to use them. Though, most of the assets according to the counsel
for the respondent have been handed over pursuant to the orders of this Court,
however, assuming that there are any other assets, the same shall be handed
over to the petitioners.
5. In view of the above, the disputes to be decided by this order fall in a
very narrow compass under two heads. The first head being of restraint against
the respondent from carrying on the business of a cable operator/networking
and business related therewith. The second aspect is with regard to interference
by the respondent in the subscriber base of the petitioner no.2 and which relief
OMP Nos.614-617/2007 Page 5
in sum and substance is that the respondent should not cater to the subscriber
base of the petitioners. Some of the relevant clauses of the „Right to Use‟
Agreement dated 1.5.2004 between the parties, and, as relied upon by the
counsel for the petitioners are as under:-
"Clause 17 (MAINTAINANCE & GROWITH OF CONNECTIVITY): That
Second Party hereby agrees and undertakes to maintain the connectivity of
the first party during the validity of this agreement. At the time of
expiration or termination of this agreement, as the case may be, the second
party shall hand over the connectivity of the first party in the same condition
as it was handed over at the time of execution of this agreement including
any new subscribers added thereto. For the removal of doubts it is hereby
clarified that any increase of subscriber base in the present area of the first
party in the Ahmedabad City shall be the subscribers of the first party. The
total list of the franchisees and there connectivity, area of operation shall be
provided by the second party to the first over running cable network
business by the second party to the first party. The list of franchises/cable
operators with connectivity and area of operations are herewith enclosed as
Annexure D.
Clause 21 (OWNERSHIP): It is understood by the Second Party that all
the assets, equipments and materials used in establishing and running the
network, exclusively belong to First Party and the Second Party shall not
have any right/claim, of whatsoever nature, over the assets or cable
television networking business, except as provided in this agreement. It is
also understood by the Second Party that all the subscribers (existing
subscribers and any new subscribers added thereto) shall belong to the First
Party and the Second Party shall have no right of any nature over such
subscribers.
Clause 23 (NON-COMPETE): The Second Party shall not be entitled to
enter into any agreements or arrangements, whether directly or indirectly
with any party, firm, company carrying on the business similar to the First
party or to assist or guide anyone regarding cable television networking
business during the period of this agreement and two year thereafter in
Ahmedabad City and its adjoining areas. The first party shall not be entitled
to enter into any agreements or arrangements, whether directly or indirectly,
with any party, firm, company carrying on the business similar to the First
party or to assist or guide anyone regarding cable television networking
business during the period of this Agreement."
OMP Nos.614-617/2007 Page 6
6. So far as the aspect that the respondent should not carry on any business
of a cable operator, not much stress was or could be laid by counsel for the
petitioners in view of the provision of Section 27 of the Contract Act,1872 and
the judgment of the Supreme court reported as Percept D' Mark (India) Private
Limited Vs. Zaheer Khan, 2006 (4) SCC 227 and as per which, there cannot be
contractual restrictions after the contractual period between the parties has come
to an end. Since in the present case the restraint which is being sought against
the respondent from carrying on the business, pertains to the period after the
termination of the contractual obligation between the parties, the relief of
injunction as prayed for that the respondent should not carry on similar business
cannot therefore be granted in view of the provision of Section 27 of the
Contract Act and the aforesaid judgment of Supreme Court in the case of
Percept D' Mark (India) Private Limited(supra).
7. That takes me to the main issue which has been very strongly urged and
argued by the counsel for the parties. This aspect pertains to the entitlement of
the petitioners, as claimed by it, is for exclusivity in the subscriber base of the
petitioner no.2. Putting it differently, what is said is that when the respondent
carries on an independent business, he should not use the subscriber
base/customers which were the customers of the petitioners and more
particularly of the petitioner no.2. In my opinion, this second and the main
OMP Nos.614-617/2007 Page 7
issue argued is inextricably linked with the first issue of Section 27 of the
Contract Act. As already discussed, under Section 27 of the Contract Act after
termination of the contractual relationship, no one can be restrained from
carrying on business, then if that be so, then in such a case, if what cannot be
done directly, then surely the same cannot be done indirectly as well. By
seeking restraint against the respondent from not using the subscriber base of
the petitioner no.2, effectively, the petitioners are seeking to restrain the
respondent from independently carrying on its business, because, it is to these
very customers/ subscribers that the cable network services are being provided
by the respondent. I may note that it is not the contention of the petitioners that
it has any copyright under the Copyright Act, 1957 in the list of the subscribers
and if there is no copyright, the list of the customers/subscribers are such which
are in the public domain and if the respondent seeks to carry on business with
those subscribers using his own network/assets/control room and so on, there
can be absolutely no legal basis to prevent the respondent from carrying on his
business in as much as such an injunction will indirectly do what is directly
prevented by Section 27 of the Contract Act. For this reason therefore the
injunction against the respondent from using the subscriber base cannot be
granted.
OMP Nos.614-617/2007 Page 8
8. I am also doubtful whether a subscriber base can be said to be an "asset"
once it is admitted that no copyright in the same exists. A person has an
absolute right when an asset which is owned by him. A list of subscribers in
public domain is surely not an asset and not a property and therefore it is not
permissible to seek a restraint against use of such „property‟ by another person.
At the cost of repetition, I may state that list of customers can be an asset only if
the same is a list in which a right vests under the Copyright Act, 1957. Thus,
looking at this issue from this angle also, I find that there cannot be any restraint
against the respondent, because there is no asset in the ownership of the
petitioner which it seeks to restrain the respondent from using. Even under the
Copyright Act, it has been held by a learned Single Judge of this Court in the
judgment reported as Diljeet Titus Vs. Alfred A Adebare 2006 (130) DLT 330
(paras 69 & 72) that though an injunction can be granted against a person from
using the information in a copyrighted list, however, if any details of a person
found in the copyright list, otherwise also exists in common/public domain, the
copyright in the details of the person appearing in the copyrighted list does not
survive.
In my opinion additionally, if such third person whose name appears in the
copyrighted list seeks to independently approach, for entering into a contract
with a person (for example a cable operator) other than the person (another
OMP Nos.614-617/2007 Page 9
cable operator) who has the details of such person in his copyrighted list, then,
no injunction can be granted against the third person inasmuch as there cannot
arise an issue pertaining to violation of a copyright in such a situation because
we are then looking at the independent freedom of action of a person. This is
because a person whose name and particulars exists in the copyrighted list, is
surely legally justified in adopting whatever course of action he chooses
because he has complete freedom of action so as to enter into a contract with
anyone and in the guise of obtaining an injunction on the basis of the copyright
list, a wholly independent third person cannot be prevented from acting in a
manner, he so chooses, for entering into any contract with any person. Surely,
an injunction cannot operate against a person who is not a party to a contract,
and a third person who is not party to a contract, therefore, cannot in effect be
restrained from independently exercising his volition to enter into a contract
with any person. These observations are being made for the reason that a
subscriber/customer of a cable service network provider is fully entitled to
approach any cable network service provider by entering into a contract with
such service provider and it cannot be said that there can in effect be an
injunction against such third person simply because of a contract between two
cable service providers that a subscriber/customer is his „asset‟ and who cannot
approach one or other particular cable network service provider although it is at
OMP Nos.614-617/2007 Page 10
the customer‟s own volition. Thus assuming for the sake of argument an
injunction is granted as prayed for by the petitioner, there cannot be an
injunction against the respondent from giving services to a customer who
directly approaches the respondent. For this reason also the relief as prayed
cannot be granted.
9. Therefore, looking at the issue from the point of view of either the fact
that the respondent cannot be restrained from carrying out his business in terms
of Section 27 of the Contract Act or that a list of subscriber is not an asset or
that even if there is a copyrighted list a customer/subscriber cannot be prevented
from approaching any cable network service provider because of the right of
freedom of action of such independent customer, the petitioner cannot succeed
in seeking the interim relief to prevent the respondent from entering into
contracts with customers/subscribers and nor can such subscribers/customers in
effect be prohibited from entering into a contract with the respondent.
10. I could have disposed of this case on a preliminary point that the present
petition is not maintainable, but, as arguments were addressed in detail, I have
opted to take the course of deciding the issue also on merits. A preliminary
objection which was argued was that the petition under Section 9 is not
maintainable because there is no arbitration agreement between the parties as
envisaged by law because an Arbitration Agreement has necessarily to be a
OMP Nos.614-617/2007 Page 11
written contract as per Section 7 of the Arbitration and Conciliation Act, 1996.
What the respondent contends is that as per the case of the petitioners
themselves, the contract which was entered into between the parties, is the Right
to Use Agreement dated 1.5.2004, and admittedly, that Agreement was only
valid for a period of one year which expired on 30.4.2005. Thereafter,
according to the counsel for the respondent, even according to the petitioner, it
is only an oral understanding that continued between the parties and therefore it
is contended that no petition can be filed where the arbitration clause is on an
oral understanding.
11. Para 7 of the petition is relevant in this regard and runs as under:-
"7. The agreement was initially for a period of one year till
30.4.2005 and the same was renewed for a further period of 2 years as
per oral understanding arrived between the parties on agreed terms and
conditions between the parties. Even as per oral
understanding/arrangement arrived with the Respondents has come to
an end on 30.4.2007." (Emphasis added)
The first line of para 17 of the petition also is relevant and the same
reads as under:-
"That as per oral understanding arrived between the parties" (Emphasis added)
The aforesaid averments as made in the petition make it more than
clear that the petitioner itself relies not on the written contract but only on oral
understanding between the parties.
OMP Nos.614-617/2007 Page 12
12. Section 7 of the Arbitration and Conciliation Act, 1996 requires that the
agreement between the parties has to be in writing. On the admission of the
petitioner itself that it was an oral understanding/arrangement/agreement only
on the basis of which the contractual relationship was continuing, it is therefore,
quite clear that after 30.4.2005, there was no written contract but only an oral
contract between the parties. If there is no written contract, then, the clause of
arbitration in the written agreement dated 1.5.2004 surely is no longer operative
between the parties for periods after 30.4.2005 when oral agreement is said to
be operative as between the parties. Accordingly, I am of the opinion that the
present petition is not maintainable under Section 9 of the Arbitration and
Conciliation Act, 1996 because there is no written Agreement between the
parties and which is a sine qua non for a petition to be filed under Section 9.
13. Accordingly, both on merits as well as on non- maintainability, the
present petitions are dismissed with costs of Rs.25,000/- in each of the petition.
VALMIKI J.MEHTA, J
December 23, 2009
ib
OMP Nos.614-617/2007 Page 13
