Msm Discovery Pvt. Ltd. vs New Delhi Television Ltd. & Ors.
2011 Latest Caselaw 1005 Del

*         IN THE HIGH COURT OF DELHI AT NEW DELHI
+                   LPA NO. 44 of 2011

                  Judgment reserved on: 18th February, 2011
%                      Date of Decision: 21st February, 2011

MSM Discovery Pvt. Ltd.              ....Appellant
    Through Mr. Aman Lekhi, Sr. Advocate with
               Mr. Abhishek Malhotra, Mr. A.J. Bhambhani,
               Mr. Nitin Bhatia, Mr. Victor Ahanthem & Ms.
               Sahana Basavapatna, Advocates.

                    VERSUS

New Delhi Television Ltd. & Ors.       .....Respondents
    Through Mr. Maninder Singh, Sr. Advocate with
                Mr. Kaushik Mishra, Adv. for Respondent No. 1.
                Mr. Ramji Srinivasan and Mr. S. Ganesh,
                Sr. Advocates with Mr. Gaurav Juneja and
                Mr. Zeyaul Haque and Mr. Anjum Natrajan
                For respondent NO. 2.
                Mr. Ruchir Mishra, Advocate for respondent 3.

CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJIV KHANNA

1. Whether 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                     YES
   in the Digest ?

Sanjiv Khanna, J.

The appellant MSM Discovery Pvt. Ltd. has filed a petition before

Telecom Disputes Settlement and Appellate Tribunal (TDSAT, for short)

under the Telecommunication (Broadcasting and Cable Services)

Interconnection Order 2004, against the New Delhi Television Limited

and Star Den Media Services Private Limited, respondents 1 and 2

respectively, praying for the following reliefs:-

"i. Hold and declare that the Distribution Term Sheet dated 01.04.2005 and its Amendments dated 29.08.07 and 01.04.2009 respectively (Agreement between the petitioner and the respondent No. 1 is valid, binding and subsisting between the parties;

ii. Direct respondent No. 1 to continue to perform and discharge its obligations under the Agreement till the expiration of the term of the Agreement, i.e., till 31.03.2012;

iii. Restrain respondent No. 1 from unlawfully terminating the Agreement;

iv. Restrain respondent No. 1 from creating any third party interest or rights in respect of the subject matter of the Agreement, including in favour of Respondent No. 2;

v. Restrain Respondent No. 2 from interfering with the petitioner's rights under and during the term of the Agreement, i.e., till 31.03.2012.

vi. Pass such further orders as this Hon'ble Tribunal deems fit and proper in the facts and circumstances of the case."

2. The appellant had also filed an application for interim relief

praying for interim injunction restraining the respondent No. 1 from

terminating the agreement dated 1st April, 2005 as amended on 29th

August, 2007 and 1st April, 2009 and for restraining the respondent No.

1 from creating any third party interest or rights, including rights in

favour of respondent No. 2, in respect of the said agreement during the

term of the agreement i.e. till 31st March, 2012.

3. Interim application came up for hearing before TDSAT on 14th

December, 2010 and was rejected with reasons to follow. Thereafter

reasons were incorporated in the order dated 16th December, 2010.

The orders were made subject matter of challenge before the learned

Single Judge in Writ Petition (C) No. 8585/2010 but without success as

the writ petition and the applications have been dismissed vide order

dated 22nd December, 2010. These orders have now been made subject

matter of the present Intra Court Appeal.

4. The appellant is a company and is engaged in the business of

aggregating content of different television channels by entering into

contracts with them and it also enters into licensing and sub-licensing

agreements with Multi System Operators (MOSs), Cable Operators,

Direct to Home operators, etc. for distribution of the channels.

5. In 2003, the appellant and respondent No. 1 entered into an

agreement and executed a Distribution Term Sheet (DTS, for short)

dated 11th February, 2003 under the which the appellant agreed to

distribute channels "NDTV Profit" and "NDTV 24x7" in various

platforms. On 1st April, 2005, this agreement was replaced by a new

DTS and the channel "NDTV India" was added. This DTS was to

commence on 1st April, 2005 and to terminate on 31st March, 2009.

DTS was made subject matter of two amendments dated 29th August,

2007 and 1st April, 2009. By the second amendment, the term was

extended from 1st April, 2009 to 31st March, 2012.

6. Relying upon the clauses of DTS dated 1st April, 2005 and the

second amendment dated 1st April, 2009, it has been submitted on

behalf of the appellant that the agreement envisaged principal-to-

principal relationship on a fixed annual fee for the period upto 31st

March, 2012. This relationship could be terminated by the parties only

in terms of clause 21 of the DTS dated 1st April, 2005. Otherwise, DTS

cannot be prematurely terminated. It was urged that the respondent

No. 1 wanted to renegotiate the annual fee amount payable as per the

amended DTS and there were negotiations and e-mails were

exchanged. As the appellant became suspicious and suspected foul

play by the respondent No. 1, the aforesaid petition was filed before

TDSAT on 13th December, 2010 in the morning hours. In the evening,

on the same day an undated letter from the respondent No. 1 was

received terminating the DTS. It is alleged that the reasons given for

termination are beyond clause 21 of DTS dated 1st April, 2005 and,

therefore, the termination is bad and illegal.

7. On the other hand, the contention of the respondent Nos. 1 and

2 is that the migration of channels from one content aggregator to

another is not an unusual or a new phenomenon. In the present case

the respondent No. 1 has validly terminated the TDS for lack of trust as

the appellant had added other channels to the bouquet and was

subsidizing/pushing growth of the added channels, with a result there

was a declining trend in the annual fee, though the industry was

constantly growing. It is alleged that the appellant had given step

motherly treatment to the respondent No. 1's channels to promote

their own interest and to enhance revenues from the appellant's own

channels.

8. At the outset, it may be stated that the appellant has argued the

matter as if we are the first appellate court and have widest jurisdiction

to re-examine the issues and contentions on both facts and law. Under

Article 226 of the Constitution, the High Courts have power of judicial

review which is limited and circumscribed and cannot be equated with

the appellate power of a Court/forum, which subject to statutory

provisions, can go into both issues of law and fact. A writ court is

primarily concerned with the decision making process, rather than the

merits of the decision itself. Jurisdiction under Article 227 of the

Constitution may be somewhat wider, but a Writ Court seldom

interferes with the orders passed by the tribunals constituted under the

special acts, unless there is procedural illegality or irregularity or they

have acted in excess of their jurisdiction. While exercising jurisdiction

under Article 227, the Writ Court does not convert itself to a court of

appeal.

9. In the present case, TDSAT has passed a detailed order giving

reasoning why it is not inclined to grant interim injunction. The

contentions of the parties as raised before the TDSAT have been

considered and dealt with objectively and lucidly. A perusal of the

order dated 16th December, 2010, shows that the appellant had

contended before the TDSAT that they being an exclusive agent of

respondent No. 1, purported implied negative covenant in the TDS was

enforceable. It was further alleged that the agency of the appellant was

coupled with interest, as the appellant had entered into further

contracts with MSOs/link operators. Reliance was placed on Sections

202 and 204 of the Contract Act. The TDSAT, in this connection has

referred to their earlier decision in the case of Viacom 18 India Limited

vs. MSN Discovery Pvt. Ltd., Mumbai, dated 11th August, 2010, whereby

the prayer for interim injunction on similar pleas was rejected. This

order has been upheld by a Single Judge of the Delhi High Court in MSM

Discovery Pvt. Ltd. vs. Viacom 18 Media Pvt. Ltd., 2010 VII AD (Delhi) 45.

Before us, the appellant has contended that the TDS agreement was

entered into on principal-to-principal basis. Thus, it is apparent that

there is a change of stand before us and what was urged and argued

before the TDSAT. We do think that it is proper and correct for the

appellant to make a challenge and to argue the appeal in terms of the

changed stand.

10. The TDSAT on the question whether the termination of TDS

agreement is valid or not, has observed that this is a matter of trial and

evidence. What mattered and tilted the decision in favour of

respondent Nos. 1 and 2 is the question of balance of convenience and

whether it justifies grant of interim injunction. It has been observed by

the TDSAT as under:-

"The petitioner in the event of success can sufficiently be compensated on monetary terms. Even if there are gross breaches of contract on the part of respondent No. 1, the petitioner may claim not only general damages but also special damages. The balance of convenience also, in our opinion, thus, does not lie in favour of grant of injunction. The petitioner, in our opinion, having regard to the observations made hereinbefore shall also not suffer substantial injury far less an irreparable injury, if the prayer for interim injunction is refused."

11. The appellant herein is not a cable operator or a small time

distributor. As per the appeal itself, the appellant's distribution

network platform "TheOneAlliance" has become an industrial leader

and currently carries 21 TV channels. The appellant had entered into

license and sub-licenses with cable operators, MSOs, etc. The appellant

in paragraph 15 of the appeal has stated that these agreements i.e.

license/sub licenses were for fixed period with mutual covenants,

duties and responsibilities. However, dates and periods when these

contracts i.e. licenses/sub-licenses were/are to expire is not averred. It

is apparent that in case the appellant succeeds and is able to show that

the contract, i.e. DTS, was illegally and wrongfully terminated and that

there was a breach of contract, they can be adequately compensated.

The conclusion and finding of the TDSAT in this regard is based upon

relevant considerations which does not warrant interference in exercise

of jurisdiction under Articles 226 and 227 of the Constitution. We may,

at this stage, notice that the appellant has submitted that the decisions

in Percept D'mark India (Pvt.) Ltd. vs. Zaheer Khan, AIR 2006 SC 3426

and Indian Oil Corporation vs. Amritsar Gas Service (1991) 1 SCC 533

are distinguishable. It is stated that in Percept D'mark India (Pvt.) Ltd.

(supra), the Supreme Court was considering post contractual covenants

and restrictions after a contract had come to an end. Further in the

case of Indian Oil Corporation Ltd. (surpa), the Supreme Court had

applied clause 28 of the agreement therein, wherein either party could

revoke/terminate the contract by 30 days' notice. It is submitted that

there is no such term in the DTS and clause 21 is to the contrary.

Further in the present case, we are not concerned with the post

contractual covenants and restrictions. We are not inclined to

interfere with the order passed by the TDSAT rejecting the interim

application for the distinctions and differences pointed out above.

These aspects can be examined in detail by the TDSAT while dealing

with the main petition. At this stage, we are not inclined to interfere

and exercise our discretionary jurisdiction in view of the finding of the

TDSAT that if the appellant succeeds it can be compensated in

monetary terms. As noticed above, it has been observed that in case

of gross breach of the contract on the part of the respondent No. 1, the

appellant can claim general damages and also special damages. We are

not satisfied that the facts of the present case show and establish any

irreparable harm or injury that cannot be compensated in monetary

terms. As noticed above, the original DTS dated 1st April, 2005 was valid

upto March 2009 and by the second amendment it was extended upto

31st March, 2012. The end period was stipulated and there was also a

termination clause. The appellant continues and remains in business

and is distributing other TV channels. The questions as raised ex facie

relates to loss of revenue/earning of the appellant because of the

alleged wrongful and illegal termination.

12. Learned counsel for the appellant has relied upon Treatise on

Specific Performance of Contracts by Edward Fry and Specific

Performance by Gareth Jones and William Goodhart. A reference was

also made to Law of Specific Relief by Prof. G.C. Venkata Subbarao.

13. We have examined and gone through the said treatise but do not

find any reason and cause to interfere. Balance of convenience and

whether or not irreparable harm or loss will be caused depends upon

the facts of each case. In the present case, TDSAT has applied its mind

to the relevant considerations and given cogent and clear findings.

Similarly, reliance placed by the learned counsel for the appellant on

Mrutunjay Pani and anr. vs. Narmada Bala Sasmal and Another,

(1962) 1 SCR 290, does not merit interference. In the said case, the

Supreme Court was dealing with the concept of trust and accordingly

observations have been made. The said observations are not

relevant for the dispute/issue raised in the present appeal. It is

noticed that the TDSAT itself has fast tracked the entire matter and

issues have been framed and the matter has now been fixed for

examination of witnesses. In the order dated 31st January, 2011, the

TDSAT has noticed that they were required to make all endeavors to

dispose of the matter in 90 days and the said period is over. The case

is now fixed before the TDSAT on 21st February, 2011. As we have

dismissed the present appeal, it will be open to the appellant to

request the TDSAT for amendment of the petition, if they are so

advised.

14. With the aforesaid observations, the present appeal is

dismissed without any orders to costs. The observations made above

are for disposal of the present appeal and will not be constructed as

binding findings before the TDSAT.

SANJIV KHANNA, J.

CHIEF JUSTICE st FEBRUARY 21 , 2011 KKB