Msm Discovery Private Limited vs Union Of India And Ors.
2010 Latest Caselaw 5825 Del

       IN THE HIGH COURT OF DELHI AT NEW DELHI

       W.P.(C) 8585/2010 & CM APPL 21898/2010 with Caveat Nos.
       293 and 294 of 2010

       MSM DISCOVERY PRIVATE LIMITED               ..... Petitioner
                   Through: Mr. Aman Lekhi, Senior Advocate
                   with Mr. Abhishek Malhotra,
                   Mr. Nitin Bhatia and
                   Ms. Sahana Basavapatna, Advocates

                       versus

       UNION OF INDIA AND ORS.                     ..... Respondents
                     Through: Mr. Maninder Singh, Senior Advocate
                     with Mr. Kaushik Mishra, Advocate
                     for R-2/Caveator in Caveat No.293/2010.
                     Mr. Amit S. Chadha & Mr. Ramji Srinivasan, Sr.
                     Advocates with
                     Mr. Gaurav Juneja, Mr. Zeyaul Haque, Mr. Arjun
                     Natrajan and Ms. Garima Sharma, Advocates for
                     R-3/Caveator in Caveat (C.A.) No.294/2010.

       CORAM: JUSTICE S. MURALIDHAR

                                 ORDER

22.12.2010

1. The challenge in this petition is to an order dated 16th December 2010

passed by the Telecom Disputes Settlement and Appellate Tribunal

(`TDSAT') declining the Petitioner's prayer for an ad-interim injunction in

Petition No. 422(C) of 2010.

2. The Petitioner is a broadcaster within the meaning of the provisions of

the Telecommunication (Broadcasting and Cable Services) Interconnection

Order, 2004. It entered into an agreement (`Term Sheet') for carriage of the

channels of the Respondent No. 2 New Delhi Television Ltd. (`NDTV') on

1st April 2005. By amendments made to the said agreement, the Petitioner

agreed to perform its obligations for a fixed fee.

3. Anticipating the termination of the Agreement (Term Sheet), the

Petitioner on 10th December 2010 filed the aforementioned petition before

the TDSAT praying inter alia for a declaration that the agreement dated 1st

April 2005 and its subsequent amendments dated 29th August 2007 and 1st

April 2009 were "valid, binding and subsisting between the parties." A

direction was sought to restrain Respondent No. 3 herein, i.e., Star Den

Media Services Private Ltd. (`SDMSPL') from interfering with the

Petitioner's rights during the term of its agreement dated 1st April 2005,

i.e., till 31st March 2012. The interim relief sought was to restrain NDTV

from terminating the agreement and creating third party interests. The

TDSAT was to take up the petition for hearing on 14th December 2010.

4. It is stated that late in the night of 13th December 2010 the Petitioner

was served with an undated notice issued by NDTV terminating the Term

Sheet. In the said letter, after listing out the events leading to the

termination, the NDTV stated as under:

"In this background, it is evident that MSMD's acts of omission and commission lack in commercial probity and there is lack of fair dealing on its part.

This has shattered the trust and faith in the relationship, which is incapable of being remedied. This has also caused huge financial loss to NDTV apart from the loss of business opportunity i.e. the consequences of which are irreversible. Resultantly the Term Sheet stands terminated forthwith.

You are hereby called upon to refrain from holding yourself out or representing yourself to the trade as the Distributor of NDTV Channels and to return all material belonging to NDTV that

may be in your possession. You are also called upon to make the payment of all sums due and owed to NDTV till the date termination of the Agreement."

5. By the impugned order, the TDSAT declined the prayer for ad-interim

relief. It held that a combined reading of Sections 14(1)(a) and (c) and

Section 41(e) of the Specific Relief Act, 1963 (`SRA') revealed that no ad-

interim mandatory injunction would be granted when the aggrieved party

could be sufficiently compensated in terms of money. The TDSAT held

that the Petitioner had failed to establish a prima facie case for grant of an

ad-interim mandatory injunction. It was further held that the validity and

illegality of the action of the parties could be adjudged only after the case

had been finally heard. The balance of convenience was also not in favour

of the Petitioner.

6. Mr. Aman Lekhi, learned Senior counsel appearing for the Petitioner

urged that the TDSAT proceeded on a misreading of Section 14(1)(a)

SRA. It set out only one of the grounds on which a Court might decline to

exercise its discretion for grant of an ad-interim injunction. He emphasized

on the word `adequate' occurring in Section 14(1)(a) SRA and submitted

that if the Court was of the view that the compensation would not

constitute an `adequate relief', it should proceed to issue a mandatory

injunction directing the continuance of the contract. He relied upon certain

passages from A Treatise on the Specific Performance of Contracts by

Edward Fry (1st Indian reprint 1997 @ p.3) and Specific Performance by

Gareth Jones and William Goodhart (2nd Edition - 1996 @ p. 1). Mr.

Lekhi states that the grounds set out in Section 20 SRA for not granting

specific performance could not be read in aid of Section 14 SRA. They

were only aids to the exercise of discretion by the Court in awarding

damages instead of ordering specific performance. They did not prevent

the Court, in an appropriate case, from issuing an ad-interim mandatory

injunction directing specific performance.

7. Mr. Lekhi pointed out that the essential condition as provided in clause

21 of the Term Sheet for bringing about a termination of the contract did

not exist and, therefore, the termination itself was illegal. It was submitted

that Section 14(1)(d) SRA could not fetter the discretion of the Court. Mr.

Lekhi sought to distinguish the judgment of the Supreme Court in Indian

Oil Corporation Ltd. v. Amritsar Gas Service (1991) 1 SCC 533 and the

earlier judgment of this Court in MSM Discovery Pvt. Ltd. v. Viacom 18

Media Pvt. Ltd. 2010 VII AD (Delhi) 45 which affirmed an order dated

27th July 2010 passed by the TDSAT declining ad-interim mandatory

injunction in similar circumstances. Mr. Lekhi pointed out that unlike in

the said case, here it was a principal-to-principal agreement and, therefore,

there was no question of any agency being involved. Mr. Lekhi relied upon

the judgment in C H Giles & Co. Ltd. v. Morris [1972] 1 All ER 960 and

submitted that the rule against grant of specific performance even in a

contract of agency was also not absolute.

8. The above submissions have been considered. At the ad-interim stage,

the Court has to proceed on the basis of the documents presented before it.

The Court does not have the benefit of evidence which would help it in

determining if the actions of the parties were justified in terms of the

agreement. The letter dated 13th December 2010 issued by NDTV

terminating the `Term Sheet' inter alia points to the breakdown of trust

and faith in the relationship. Where one of the parties to an agreement is

categorical that it does not wish to continue the agreement for whatever

reason, it is not possible for a court at an ad-interim stage to direct revival

of such agreement. [see Percept D'mark India (Pvt.) Ltd. v. Zaheer Khan

AIR 2006 SC 3426 (3438-39)]. Prima facie, it appears that Section

14(1)(c) SRA is attracted. The agreement in question was in its very nature

a determinable one. Further, in terms of Section 14(1)(a) SRA, it cannot

possibly be contended that the Petitioner cannot be compensated for the

breach of agreement resulting in its non-performance. Whether such

compensation would be an adequate relief cannot possibly be determined

at an ad- interim stage. However this Court is of the view that in the

circumstances, given the nature of the agreement between the parties, the

damages or losses, if any, suffered by the Petitioner on account of the

alleged breach of its agreement by NDTV can certainly be quantified.

Section 41(e) places a further fetter on the Court in granting injunction to

prevent a breach of contract the performance of which would not be

specifically enforced.

9. The judgment of the Supreme Court in Indian Oil Corporation Ltd. v.

Amritsar Gas Service is clear that even where the termination of a contract

is illegal, the only relief that can be granted is by way of damages and not

continuation of the contract by an interim mandatory injunction.

10. This Court has not been shown any Indian precedent where, in similar

circumstances, the continuance of contract has been ordered at the interim

stage. The order dated 8th December 2010 of a learned Single Judge of the

Bombay High Court in Arbitration Petition (Lodge) No. 1303 of 2010

(KPH Dream Cricket Pvt. Ltd. v. Board of Control for Cricket in India)

and the order dated 14th December 2010 in Arbitration Appeal (Lodging)

No. 30742 of 2010 (Board of Control for Cricket in India v. Jaipur IPL

Cricket Pvt. Ltd.) relied upon by Mr. Lekhi contain no reference

whatsoever to provisions of the SRA.

11. For all the above reasons, this Court finds no ground having been made

out for interference with the impugned order of the TDSAT. The writ

petition is dismissed as such but, in the circumstances, with no order as to

costs. Both the caveats as well as the application for stay stand disposed of.

S. MURALIDHAR, J DECEMBER 22, 2010 akg