Delhi High Court
Mx Media And Entertainment Pte. Ltd. vs M/S. Contagious Online Media Networks ... on 5 April, 2021
Equivalent citations: AIRONLINE 2021 DEL 531
Author: C. Hari Shankar
Bench: C. Hari Shankar
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 23rd March, 2021
Pronounced on: 5th April, 2021
+ O.M.P.(I) (COMM.) 106/2021, I.As 4338/2021 & 4448/2021
MX MEDIA AND ENTERTAINMENT PTE. LTD.
..... Petitioner
Through: Mr. Amit Sibal, Sr. Adv. with
Mr. Angad Dugal & Mr.
Govind Singh Grewal, Advs.
Versus
M/S. CONTAGIOUS ONLINE MEDIA NETWORKS
PRIVATE LIMITED ..... Respondent
Through: Mr. Jayant Mehta, Sr. Adv.
with Mr. Sulabh Rewari, Ms.
Neha Mathen & Ms. Smiti
Verma, Advs.
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
% JUDGMENT
1. Learned Senior counsel for the parties have been heard at
length and, with consent, this judgment disposes of O.M.P. (I)
(COMM.) 106/2021.
Facts
2. The petitioner is incorporated and located in Singapore. It is
engaged in the production, development, marketing and distribution of
media entertainment content, over its Platform "MX Player" ("the
Platform").
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3. The respondent produces and develops audio-visual content
under the brand names "The Viral Fever ("TVF")", "The Screen Patti
(TSP)" and "The Timeliners", among others.
4. Appreciation of the rival submissions would require, in the first
instance, a chronological excursion through the various documents
executed and exchanged in the present case, thus:
(i) It appears that, since some time earlier, programs of the
respondent were being distributed and shown on the petitioner's
Platform. On 24th February, 2020, the respondent, under the
brand name "The Viral Fever (TVF)" confirmed that it would
provide six shows, to be hosted on the petitioner's Platform in
2020-2021. The communication read thus:
"Hi Aaron,
As discussed and confirmed:
TVF will provide 6 shows in 2020-21
• Immature S2 - 5 Episodes of 20 min each - 3 yr
exclusive + 1 year non exclusive
• UPSC S1 - 5 Episodes of 20 min each - 3 yr exclusive
+ 1 year non exclusive
• Flames S3 - 5 Episodes of 20 min each - 3 yr
exclusive + 1 year non exclusive
• 3 more shows 5 Episodes of 20 min each - 3 yr
exclusive + 1 year non exclusive - TBD
All the other clauses remain the same from last time.
All masters will be cleaned / without sponsorship.
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Deal Value - 21 cr + taxes
Payment Terms:
35% Advance
65% on Delivery
Look forward to a great partnership.
PS - mark my finance/legal.
@ Megha - pl initiate contract.
Best
Rahul Sarangi
Global Head
Business & Content
The Viral Fever (TVF)"
(ii) As per the petitioner, consequent to an "understanding"
arrived at, with the respondent, the respondent forwarded, to the
petitioner, an Agreement, dated 18th March, 2020 ("the
Agreement"), duly signed by the respondent. The petition
seeks to aver that, as the office of the petitioner at Singapore
was closed owing to the COVID-2019 pandemic, the petitioner
was not in a position to countersign the Agreement and send it
back. The undisputed factual position remains, however, that
the Agreement was signed only by the respondent. The
respondent contends that there was no concluded contract, inter
alia for the reason that the Agreement was never signed by the
petitioner. The petitioner contends, per contra, that there was.
Some relevant features of the Agreement may be noted thus:
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(a) The respondent offered, by the Agreement, to
grant the right to distribute, the Programs owned by it, to
the petitioner, which agreed to acquire the said rights.
Clause 2.1.1 of the Agreement granted, to the petitioner,
the right to distribute the Programs, on the petitioner's
Platform, during their respective distribution periods.
"Program(s)" was defined, in Clause 1.1.24, thus:
"1.1.24. "Program(s)" means web shows that
being distributed under this Agreement namely
as below:
i. Immature- season 2 (Program 1)
ii. Aspirants (tentative title)- season
1 (Program 2)
iii. FLAMES- season 3 (Program 3)
iv. Additionally, there shall be three
more web shows (the titles of which shall
be collectively decided by the parties)
namely (Program 4), (Program 5) and
(Program 6) respectively shall be part of
this Agreement.("Additional Programs").
Program l, Program 2, Program 3 and
Additional Programs shall be collectively
referred to as Program(s)."
"Distribution Period" was defined, in Clause 3.1.1, thus:
"3.1. Distribution Period.
3.1.1 The Distributor shall be entitled to
exercise the Rights granted to it herein and
Distribute each of the Programs during the
Distribution Period, in accordance with the
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terms of this Agreement. The Distribution
period of each Program shall commence from
the date of delivery of the Delivery Material
relating to such Program by the Company and
continue for a period of 4 (four) years from the
Effective Date of each such Program and
includes initial 3 (three) years on an exclusive
basis and thereafter 1(one) year on a non-
exclusive basis ("Distribution Period")."
(b) Clause 4 of the Agreement provided for
"Exclusivity", and sub-clause 4.1, thereunder, reads thus:
"4.1 Each of the Programs shall be provided
by the Company to the Distributor as per the
delivery schedule mentioned in Annexure land
shall be first released solely on the Platform. All
Rights granted by the Company to the
Distributor hereunder, in respect of the
Program, shall be available to the Distributor on
an exclusive basis for a period of 3 (three) years
from the Effective Date, and thereafter on a
non- exclusive basis for a period of 1 (one) year.
Accordingly, the Company shall ensure that no
part of the Program is released or distributed
anywhere in the Territory through any means or
modes of distribution including such modes or
mediums which use satellite as the means of
transmission, prior to the same being released
on the Platform. The Parties further agree that,
subject to Clause 4.2, during the exclusivity
period of the Programs, the Company shall not
and shall not cause each such Program or any
parts thereof, whether independently or through
any platform or mode of distribution owned or
operated by the Company, to be embedded on
any website, mobile application, platform or
other means of distribution of content including
such modes or mediums which use satellite as
the means of transmission, owned or operated
by a third Person in the Territory."
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(c) The consideration, governing the Agreement, was
stipulated in Clause 8, more specifically Clauses 8.1 and
8.2 thereof. These clauses read thus:
"8. CONSIDERATION
8.1 In consideration of the Rights granted by
the Company to the Distributor under this
Agreement, in respect of the Program, the
Distributor shall pay to the Company, the
aggregate Minimum Guarantee of the USD
equivalent to an amount of INR 21,00,00,000/-
(Indian National Rupees Twenty One Crores
Only) in accordance with Clause 8.1.1 below,
8.1.1 The Company shall be entitled to receive
from the Distributor against valid invoices
raised on the Distributor:
i. 30% of the Minimum Guarantee,
within 30 (thirty) days from the
Execution Date for each Program except
Additional Programs, subject to receipt
of valid invoice; and
ii. 70% of the Minimum Guarantee,
apportioned for each Program except
Additional Programs upon receipt of the
Delivery Materials in respect of any
relevant Program from the Company in
accordance with this Agreement and
according to technical specifications,
which the Distributor shall be liable to
pay within 45 (forty five) days from the
date of receipt of the Delivery Materials
in respect of the relevant Program by the
Distributor subject to receipt of valid
invoice.
iii. 25% of the Minimum Guarantee,
within 30 (thirty) days from the day, the
relevant Additional Program is selected
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by Distributor subject to receipt of valid
invoice;
iv. 75% of the Minimum Guarantee,
apportioned for each Additional Program
upon receipt of the Delivery Materials in
respect of any relevant Additional
Program from the Company in
accordance with this Agreement and
according to technical specifications,
which the Distributor shall be liable to
pay within 45 (forty five) days from the
date of receipt of the Delivery Materials
in respect of the relevant Additional
Program by the Distributor subject to
receipt of valid invoice.
v. In the event no Additional
Programs are selected by Distributor
during the Term, then no payment shall
be made towards the Minimum
Guarantee for each such Additional
Show, which has not been selected
during the Term.
8.2. The Company shall raise all invoices
towards all amounts of Minimum Guarantee in
USD and the foreign exchange rate shall be
calculated as of the date of the relevant invoice.
Further, all payments to be paid by Distributor,
shall be paid in USD, such that the amount
received by the Company shall be the exact INR
of Minimum Guarantee as agreed hereinabove
under clause 8.1, without any loss as a result of
the exchange rate and applicable withholding or
any other taxes, to the Company. In case of
occurrence of such loses, the Distributor shall
make good of the same to the Company."
(d) The Agreement provided for its termination, by the
petitioner or by the respondent. Clause 14 dealt with
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termination by the respondent, and sub-clauses 14.1 and
14.2 thereof read thus:
"14.1 The Company shall be entitled to
terminate this Agreement in respect of any
Program by giving a prior written notice of 30
(thirty) days to the Distributor, in the event the
Distributor fails to make payments towards the
Minimum Guarantee in respect of any Program
in accordance with this Agreement, and fails to
remedy such default within 30 (thirty) days of
being notified by the Company of the
occurrence of such default by the Distributor;
14.2 In addition to the above, the Company
shall be entitled to terminate this Agreement in
respect of any Program by providing a written
notice to the Distributor in the event the
Distributor materially breaches the provisions of
Clause 2.1.1, Clause 4.2, Clause 9.2.1, Clause
10.4, 10.4.2, Clause 10.4.4 and Clause 10.4.6
hereinabove, in respect of any Program, and
where such breach is curable, fails to cure such
breach within 30 (thirty) days from being
notified by the Company of the occurrence of
such breach."
(e) Clause 15 of the Agreement provided for interest,
in the event of any delay, on the part of either party to the
Agreement, in making payment to the other, and reads
thus:
"15. Interest
In the event of any delayed payment on the part
of the either Party of any moneys due to the
other Party under this Agreement, the delaying
Party shall be liable to pay interest at the rate of
18% per annum on the amounts due to be paid
to the other Party which shall be calculated from
the date on which the payment of such moneys
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was due and until the date of actual payment to
the non-delaying Party by the delaying Party.
The Parties agree that the amounts payable by
the delaying Party to the other Party towards
interest pursuant to this Clause are a genuine
pre-estimate of the damage that may be suffered
by the non-delaying Party."
(f) Disputes, arising under the Agreement, were to be
resolved in accordance with Clauses 19.2 to 19.4 thereof,
by arbitration, in the event of failure to achieve any
resolution by mutual discussions and negotiations.
Clauses 19.2 to 19.4 of the Agreement read thus:
"19.2 In the event the Parties fail to resolve
their disputes or differences amicably, within 30
(thirty) days ("Settlement Period") from the date
on which any Party first notifies the other Party
of such dispute having arisen, then such
disputes shall be settled by arbitration of a sole
arbitrator, who shall be appointed by the Parties
mutually within 30 (thirty) days from the expiry
of the Settlement Period or such other period
that the Parties may mutually decide. In the
event the Parties are unable to appoint an
arbitrator mutually within the aforesaid time
period, then the arbitration shall be conducted
by a panel of 3 (three) arbitrators, where 1 (one)
arbitrator shall be appointed by the Distributor,
1 (one) arbitrator shall be appointed by the
Company, and the 2 (two) arbitrators so
appointed by the Parties respectively, shall
appoint the third arbitrator who shall be the
presiding arbitrator for the purpose of the
arbitration proceedings.
19.3 The arbitration shall be conducted in
accordance with the Arbitration and
Conciliation Act, 1996. The language of
arbitration proceedings shall be English. Each
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Party shall bear its own cost. The venue of
arbitration shall be New Delhi.
19.4 This Agreement shall be governed by the
laws of India. Subject to the foregoing, courts in
New Delhi shall have the exclusive jurisdiction
on all matters arising out of or in connection
with this Agreement."
(g) Annexure-1 to the Agreement set out the details of
the various Programs and their delivery schedule, in the
following tabular form:
"Annexure-1
Delivery Materials and Delivery Schedule
Sr.No. Programs Total No. Apportioned
of value in INR
Episodes
1. Immature season 2 5 4,00,00,000/-
(Program 1)
2. Aspirants 5 5,00,00,000/-
(Tentative title)
season 1 (Program
2)
3. FLAMES season 3 5 3,00,00,000/-
(Program 3)
4. ______(Program 4) 5 3,00,00,000/-
5. ______(Program 5) 5 3,00,00,000/-
6. ______(Program 6) 5 3,00,00,000/-
"
(iii) On 19th March, 2020, the respondent raised an invoice,
on the petitioner, for US $ 4,83,222. It is an admitted position
that, against this invoice, an amount of US $ 2 lakhs alone has
been paid by the petitioner to the respondent, on 23 rd April,
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2020, though the petitioner claims right to adjustment,
additionally, of US $ 1,10,000. Indisputably, even thereafter,
an amount of US $ 1,73,222 remains outstanding, to be paid by
the petitioner against this invoice. Mr. Sibal submits that his
client is willing to deposit the said amount in Court, if the
present petition is allowed.
(iv) On 20th May, 2020, the petitioner wrote to the
respondent, requesting the respondent to adjust, against the
amount invoiced by it, US $ 1,10,000. Vide reply mail dated
2nd June, 2020, the respondent agreed to the request,
whereupon, vide a further mail of the same date, i.e. 2nd June,
2020, the petitioner wrote to the respondent stating that it would
"share the addendum stating the same". Further
correspondence ensued, in this regard, during which the
respondent also requested the petitioner to share the Final
Executed ("FE") copy of the License Agreement". As it
happened, the FE License Agreement was never, in fact,
forwarded by the petitioner to the respondent.
(v) On 4th June, 2020, the petitioner forwarded an
amendment to the Agreement dated 18th March, 2020, which
provided for adjustment, against the consideration stipulated in
the Agreement, the amount of US $ 1,10,000 due from the
respondent to the petitioner. This was the first amendment
proposed, by the petitioner, to the Agreement.
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(vi) The respondent, while agreeing, vide reply email dated
6th June, 2020, to review the suggested amendment, pointed out
that the FE copy of the Agreement was still awaited. The e-
mail read as under:
"Hi Animesh,
We shall review the shared draft. However, the FE
copy of the latest licence deal is still awaited from
your side and the related amendment can not take
place until we don't receive the aforesaid FE copy in
our record.
Tx"
(Emphasis supplied)
(vii) On 8th July, 2020, the respondent again wrote to the
petitioner, thus:
"Hi Aaron,
It was good to connect on call today and as discussed
the 2 key action points:
1. TVF to share the Delivery timelines for the 3
current shows agreed ie UPSC, Flames 3 & Immature
2
2. TVF to share concepts/show ideas for the other
3 shows in the Agreement which the Mx team can
evaluate and respond
Also pls do respond on:
1. The addendum to the last Agreement
2. Digital signature for the final paperwork since
we've some audit requirements
Regards
Vijay Koshy"
(Emphasis supplied)
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(viii) On 15th July, 2020, the petitioner wrote to the respondent,
requesting for "update on the timelines" of the three shows
which they had selected. The respondent, vide reply mail dated
16th July, 2020, agreed to share the timelines by the next day.
Accordingly, vide e-mail dated 17th July, 2020, the respondent
wrote, to the petitioner, thus, regarding the timelines for the
three selected programs:
"Hi Team Mx,
As per my mail last evening, sharing the timelines across
various stages of the 3 shows that have got locked with Mx
this year. They are as follows:
UPSC:
Pre Production: 25th July to 15th October '20
Shoot: 16th October to 30th November
Post Production: December, January, Feb '21
Delivery: End of February '21
Immature S2:
Pre Production: 1st December '20 to 15th January ' 21
Shoot: 16th January to 15th February '21
Post Production: Mid February, March, April '21
Delivery: End of April '21
Flames S3:
Pre Production: 1st December '20 to 15 th January '21
Shoot: 16th January to 10 th February '21
Post Production: Mid February, March, April '21
Delivery: End of April '21
Happy to discuss them in detail over a call with the
creative/production team at our end. Also please confirm if
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Wednesday first half works for the discussion on the balance
3 shows.
Warm Regards
Vijay Koshy
President
The Viral Fever"
(ix) Vide e-mail dated 22nd July, 2020, the respondent again
reminded the petitioner that the following two points were still
awaiting a response from the petitioner:
"1. Mx and TVF Agreement (URGENT)
2. Show timelines for the 3 that we've already
locked (not as urgent as point 1)"
(Emphasis supplied)
(x) As there was still no response, from the petitioner,
regarding communication of the finalised Agreement, or of the
status/timelines of the three shows already "locked", the
respondent wrote, on 24th August, 2020, to the petitioner, that it
had been trying to reach the petitioner "for a follow-up
conversation on the status/timelines of the shows" already
locked. The petitioner responded, on the same day i.e. 24th
August, 2020, stating that it was awaiting a response from the
respondent "on the overall construct of the arrangement", so
that the "next steps" could be planned.
(xi) On 11th September, 2020, the petitioner addressed the
following e-mail to the respondent:
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"Hi Shreyansh,
We have not yet been able to speak - understand that
the schedules are crazy but let's keep the conversation
rolling.
We have proposed the way we want to progress with
this deal which is a 1 + 1 + 1 show approach starting
with UPSC which was to be delivered in Dec.
Are we on track with that?
Regards
Aaron"
(Emphasis supplied)
(xii) The respondent replied, on the same day, i.e. 11 th
September, 2020, as under:
"Hi Aaron,
Thanks for understanding. We've been discussing the
same internally and I wanted to discuss with you
certain reservations that we have in going ahead with
the above mentioned approach. It really puts us in a
very tough spot.
Do let me know whenever we can have a conversation
and I'll make myself available.
Cheers
Sherry"
(Emphasis supplied)
(xiii) That the "1 + 1 + 1" arrangement suggested by the
petitioner on 11th September, 2020, was not acceptable to the
respondent, and was further reflected by the following e-mail,
dated 21st September, 2020, from the latter to the former:
"Hey Aaron,
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Thanks for taking our time the other day to hear our
point of view on the proposed arrangement. Like we
spoke, starting with the new Title and then deciding on
subsequent seasons of established titles puts us in a
very tricky spot.
Do let us know your thoughts on how can we proceed
and make this a win win for both TVF and MXP.
Looking forward to hearing from you.
Cheers
Sherry"
(Emphasis supplied)
(xiv) On 23rd September, 2020, the petitioner wrote to the
respondent, stating that it would "like to re-look at the episodic
count for the shows and overall minutes". The respondent, vide
e-mail of the next day i.e. 24th September, 2020, requested the
petitioner to discuss the matter at 4 PM.
(xv) On 5th October, 2020, the following e-mail was addressed
by the petitioner to the respondent:
"Hi Vijay,
Trust this mail finds you well.
Wanted to circle back on our conversation from last
week. I would like to reiterate our intent to work
around the situation and move ahead with this deal
with a revised structure of a 1 + 1 + 1 approach
wherein we greenlight the 2nd show post the launch of
the previous based on the output delivered.
Re-emphasising on our intent here - our preferred
show to begin this equation with is UPSC but taking
your perspective into consideration, we would go
ahead with either Flames or Immature.
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As discussed, the commercials need to be revisited and
addressed as it is not in sync with our deal structures
and subsequent costs (internal + market benchmarks).
Below are the 3 approaches we can look at
• Option 1 - Keep the commercials the same and
increase the episode count to minimum 8 eps of
25-30 mins
• Option 2 - Keep the ep count and the durations
the same & reduce the license fee by 1 cr for the
show (which we select between flames &
immature)
• Option 3 - We amicably part ways on this deal
and TVF gives a refund on the monies paid
Look forward to your thoughts on how to proceed.
Aaron"
(Emphasis supplied)
(xvi) Thereafter, on 12th October, 2020, the following
exchange of e-mails took place, between the petitioner and the
respondent:
Petitioner to respondent
"Hi Vijay,
Await your response on this and closing at the earliest.
Regards
Aaron"
(Emphasis supplied)
Respondents to petitioner
"Hi Aaron,
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Apologies for the delay in responding. We will call
you tomorrow and let's discuss how we can close this
asap."
(Emphasis supplied)
(xvii) On 14th October, 2020, the petitioner wrote, to the
respondent, as under:
"Hi Vijay,
It was a pleasure of speaking with you today.
To capture the broad understanding, the current deal
would be structured as a 1 + 1 + 1 with MX
greenlighting the subsequent shows post the launch of
the previous based on the output delivered. This
would mean that the amount paid to TVF as a signing
fee would be against the 1st show which we chose,
which I would confirm to be Immature 2.
We understand and appreciate your reservation
towards making this a 8 ep (25-30 mins). I would
suggest we do this as a 7 ep (25-30 mins) show.
Please confirm the ep count so we can go ahead and
draft the addendum accordingly.
Regards
Aaron"
(Italics and underscoring supplied)
(xviii) On 28th October, 2020, the petitioner forwarded, by way
of an attachment e-mail, a second "amendment draft", attaching
a proposed "First Amendment" to the Agreement dated 18 th
March, 2020. (This, therefore, was the second "First
Amendment" proposed by the petitioner, after the first
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amendment proposed on 4th June, 2020.) Clause 1 of the
proposed "First Amendment" envisaged the following
amendments, to the Agreement dated 18th March, 2020:
"1.1 The term "Program(s)" as defined under Clause
1.1.24 of the Principal Agreement shall stand revised
and replaced as follows:
"Program(s)" means the shows that are being
distributed under this Agreement namely as below:
i. Immature - season 2 (Program 1)
ii. UPSC- season 1 (Program 2)
iii. FLAMES -season 3 (Program 3)
1.2 The term "Minimum Guarantee" as defined under
Clause 1.1.18 of the Principal Agreement shall stand
revised and replaced as follows:
"1.1.18 "Consideration" means the amount
payable in respect of each Program as specified
in Annexure 1 hereto aggregating to INR
12,00,00,000/- (Indian National Rupees Twelve
Crores Only) for the Programs, by the
Distributor to the Company in accordance with
this Agreement."
1.3 The Annexure 1 of the Principal Agreement
shall stand revised and replaced with the Annexure 1
attached herein under this First Amendment..
1.4 Clause 8.1 under the Principal Agreement shall
stand revised and replaced as follows:
8.1 In consideration of the Rights granted by
the Company to the Distributor under this
Agreement, in respect of the Program(s) and
subject to compliance of the terms of the
Agreement by the Company, the Distributor
shall pay to the Company, the aggregate
Consideration of the USD equivalent to an
amount of INR 12,00,00,000/- (Indian National
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Rupees Twelve Crores Only) in accordance with
Clause 8.1.1 below,
8.1.1 The Company shall be entitled to receive
the Consideration from the Distributor against
valid invoices raised on the Distributor in the
following manner:
i. 30% of the Consideration i.e. INR 3, 60, 00,
000/- (Indian National Rupees Three Crores
Sixty Lakhs only) equivalent to an amount in
USD, within 45 (forty-five) days from the
Execution Date for all the Programs, subject to
receipt of valid invoice; and
ii. 70% of the Consideration i.e. INR 8, 40, 00,
000/- (Indian National Rupees Eight Crores
Forty Lakhs Only) equivalent to an amount in
USD, shall be paid to the Company in the
following manner:
a. INR 2, 80, 00, 000/- ((Indian
National Rupees Two Crores Eighty
Lakhs only) for each Program upon
receipt of the Delivery Materials in
respect of relevant Program from the
Company in accordance with this
Agreement and according to technical
specifications, which the Distributor
shall be liable to pay within 45 (forty
five) days from the date of receipt of the
Delivery Materials in respect of the
relevant Program by the Distributor
subject to receipt of valid invoice.
1.5 INR 1, 52, 84, 500/- (Indian National Rupees
One Crore Fifty Two Lakhs Eighty Four Thousand
Five Hundred only) equivalent to USD 200,000/-
(United States Dollars Two Hundred Thousand only)
in accordance with Clause 8.1.1 (I) has already been
paid by the Distributor to the Company as an advance
amount towards all the Programs upon execution of the
Principal Agreement, receipt and sufficiency of which
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is hereby acknowledged and confirmed by the
Company.
1.6 The balance amount of INR 2, 07, 15, 500/-
(Indian National Rupees Two Crores Seven Lakhs
Fifteen Thousand and Five Hundred only) equivalent
to an amount in USD as per Clause 8.1.1(i) shall be
paid within 45 (forty five) days of execution of this
First Amendment and subject to receipt of valid
invoice.
1.7 Parties expressly agree that the Distributor, shall
have the right to green-light the production of the
Programs, in any sequence, from Program 2 and/ or
Program 3 subject to successful submission of concept
development and preproduction deliverables of the
respective Programs by the Company to the
satisfaction of the Distributor.
1.8 The Company shall deliver the Programs to the
Distributor as per the timelines mutually agreed
between the Parties and in accordance with the
technical specifications as stated in Annexure 2 of this
First Amendment."
(xix) It is apparent, from a bare reading of the preceding
correspondence, with the "First Amendment" forwarded by the
petitioner to the respondent, on 28th October, 2020, that the
petitioner did not sign the original Agreement dated 18th March,
2020, which was signed by the respondent and forwarded to the
petitioner for signature, the petitioner forwarded, on 28th
October, 2020, the aforesaid "First amendment" suggesting
amendments to be made in the original Agreement dated 18th
March, 2020.
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(xx) Vide e-mail, dated 2nd November, 2020, the petitioner
acknowledged the receipt of confirmation, from the respondent,
regarding adjustment of US $ 1,10,000. This fact was also
reflected in the following e-mail, dated 3rd November, 2020,
from the respondent to the petitioner:
"Hi Animesh,
This is to confirm that TVF bank account was been
credit by Rs 7733000 equivalent to $ 110000 as on 17th
Jan, 2020 which will be adjusted against on account of
new contract deal with Mx player.
Plz feel free to ask for any further clarification.
Regards,
Nikita Trivedi"
(xxi) On 6th November, 2020, the petitioner addressed the
following e-mail to the respondent:
"Hi Manish and Megha,
As we are currently in talks with the business team for
updating certain terms in the new agreement, it will be
convenient to execute both the main LFA as well as
the related amendment draft together given the
restriction in coordination we face during these times.
I am attaching the revised amendment draft for deal 1
which captures our recent discussions on the agreed
stance. Please let me know your thoughts on the draft.
Regards"
MX Player Animesh Sukhatankar
Content Acquisition - MX Player"
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(xxii) On 27th November, 2020, the petitioner forwarded, under
cover of an e-mail to the respondent, a further revision to the
amended draft Agreement "to accommodate the recent
discussions". This, therefore, was the third "First Amendment"
proposed, by the petitioner to the Agreement dated 18 th March,
2020, without ever sending back the original countersigned
Agreement.
(xxiii) Apropos the programs to be broadcasted on the
petitioner's Platform, and the amount payable to the petitioner,
this third, and newly proposed, "First Amendment" was
identical to the second "First Amendment", forwarded by the
petitioner to the respondent on 28th October, 2020. Clause 1 of
the newly proposed "First Amendment" to the original
Agreement dated 18th March, 2020, which contained the
proposed amendments, reads as under:
"1.1 The term "Program(s)" as defined under Clause
1.1.24 of the Principal Agreement shall stand revised
and replaced as follows:
"Program(s)" means the shows that are being
distributed under this Agreement namely as below:
i. Immature- season 2 (Program 1)
ii. UPSC- season 1 (Program 2)
iii. FLAMES- season 3 (Program 3)
1.2 The term "Minimum Guarantee" as defined
under Clause 1.1.18 of the Principal Agreement shall
stand revised and replaced as follows:
"1.1.18 "Consideration" means the amount
payable in respect of each Program as specified
in Annexure thereto aggregating to INR
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12,00,00,000/- (Indian National Rupees Twelve
Crores Only) for the Programs, by the
Distributor to the Company in accordance with
this Agreement."
1.3 The Annexure 1 of the Principal Agreement
shall stand revised and replaced with the Annexure 1
attached herein under this First Amendment.
1.4 Clause 8.1 under the Principal Agreement shall
stand revised and replaced as follows:
8.1 In consideration of the Rights granted by
the Company to the Distributor under this
Agreement, in respect of the Program(s) and
subject to compliance of the terms of the
Agreement by the Company, the Distributor
shall pay to the Company, the aggregate
Consideration of the USD equivalent to an
amount of INR 12,00,00,000/- (Indian National
Rupees Twelve Crores Only) in accordance with
Clause 8.1.1 below,
8.1.1 The Company shall be entitled to
receive the Consideration from the
Distributor against valid invoices raised
on the Distributor in the following
manner:
A. Consideration payable for
Programs:
i. INR 1,52,84,500/-
(Indian National Rupees
One Crore Fifty Two Lakhs
Eighty Four Thousand Five
Hundred only) equivalent
to USD 200,000/- (United
States Dollars Two
Hundred Thousand
only)has already been paid
by Company as an advance
amount towards all the
Programs upon execution
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of the Principal Agreement,
receipt and sufficiency of
which is hereby
acknowledged and
confirmed by the Company.
ii. Balance amount of INR
10,47,15,500/- (Indian
National Rupees Ten
Crores Forty-Seven Lakhs
Fifteen Thousand Five
Hundred Only) equivalent
to an amount in USD shall
be payable in the following
manner:
a. INR
3,49,05,167/-
(Indian National
Rupees Three
Crores Forty-Nine
Lakhs Five
Thousand One
Hundred and Sixty
Seven only) per
Program within 45
(forty five) days
upon successful
delivery of the
Delivery Materials
relating to the
respective Program,
subject to quality
checks and
acceptance of the
same by the
Distributor.
1.5 Parties expressly agree that the Distributor, at its
sole discretion, shall have the right to green-light the
production in any sequence of Program 2 and/ or
Program 3.
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1.6 The Company shall deliver the Programs to the
Distributor as per the timelines mutually agreed
between the Parties and in accordance with the
technical specifications as stated in Annexure 2 of this
First Amendment."
With this, it makes it clear that instead of counter-signing the
original Agreement, forwarded by the petitioner to the
respondent on 18th March, 2020, the petitioner proposed as
many as three "First Amendments" to the original Agreement
dated 18th March, 2020.
(xxiv) This fact was highlighted by the respondent, vide e-mail
dated 9th December, 2020, to the petitioner, which reads thus:
"Dear Aaron,
We look forward to closing this at the earliest as well.
As you are aware that earlier this year (March 2020),
TVF and MX were to sign a principal Agreement,
recording certain business understanding agreed at the
time. The final agreed form of the Agreement was in
fact executed at TVF's end, however, the execution at
MX's end could not be completed. We understand that
this would've been due to unusual circumstances
(Covid-19 etc.) at the time and MX has been wanting
to relook and reconsider the terms of the principal
Agreement.
Keeping this in mind, we have been open for a revised
business discussion as and when proposed by MX and
so far have received three different proposals over the
last two months, as shared by MX team. We assure
you that we are committed to offering our best to MX
considering the existing partnership. Looking forward
to discussing the new combination of deliverables and
commercials (including the latest proposed
arrangement) with the MX team, which is mutually
agreeable to both of us.
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Let's set up a time for a call, to take this ahead. Does
1500 tomorrow work for the same??
Warm Regards
Vijay Koshy
President
The Viral Fever"
(xxv) The petitioner responded, on 15th December, 2020, thus:
"Dear Vijay,
Getting this email from you is rather surprising since
we have been in constant touch and MX has at all
times expressed its desire to work with TVF.
With regards to the execution of the Agreement- Yes
there have been delays due to covid & we had
suggested modifications in the term keeping in mind
the variables & the moving pieces as the teams &
talent at your end also went through a change after this
contract was signed. In spite of that MX has honoured
the equation and also made the initial payment to TVF.
The 3 revised proposals were shared as per your
feedback as well as the telephonic conversations where
you proposed certain terms- which we quickly turned
around as formal proposals. We would have been
happy to close the first proposal that was shared with
you 2 months back.
You would also appreciate that MX has been
extremely patient with TVF this year owing to the
major organizational restructuring. While the shows
were locked in Jan/Feb this year and the contract was
finalized by March -we received no updates on the
progress on any shows till date in terms of readiness,
completion of writing, shooting dates etc.
Having said that, We at MX reiterate our intent to
work with TVF on the shows part of our agreement i.e
UPSC, Flames 3 & Immature 2.
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It is great to hear that you are open to a revised
business discussion- we can close the same tomorrow
over a call- let me know if tomorrow 2.30 pm works.
Look forward to receiving your thoughts on the
addendum shared.
Aaron"
(xxvi) The petition also annexes follow-up e-mails, between the
petitioner and the respondent, from 16th December, 2020 till
22nd December, 2020, attempting to fix schedules for mutual
meetings, to iron out the possible differences.
(xxvii) On 26th December, 2020, the respondent addressed the
following e-mail to the petitioner, pointing out that, as "there
was no visibility on timelines for execution of the principal
agreement from MX's end", the agreement "could not be
concluded between the parties". Even so, the respondent
agreed to explore the amendments suggested by the petitioner,
but stated that, in view thereof, the show "Aspirants" would
have to be excluded. Regarding the other two shows, the
communication went on to state thus:
"Meanwhile, we also seek your confirmation on MX's
continued interest in licensing the remaining two
proposed shows i.e. Immature So2 and Flames S03,
along-with the other combinations of concepts/ shows
(which are in the pipeline at our end). Since, we are
constantly receiving the interest from the market
regarding the above two shows as well, therefore we
would appreciate if the same can be closed at your end
on a priority basis.
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In case both the parties are not able to arrive at a
mutually agreeable proposal regarding the amendments
in discussion, then as suggested during the call by MX,
TVF can consider of refunding the partial advance [i.e.
INR 1.52 cr. (an amount, approx. equivalent to
advance license fee for one show)], as received under
the principal Agreement. Accordingly, parties can
conclude the current discussion and start altogether a
fresh business arrangement.
We request that this loop of discussions be brought to
closure soon, post which parties can start a new
partnership and do something great together.
Looking forward to hearing from you."
(xxviii) Three weeks elapsed before the petitioner chose to
respond, on 19th January, 2021, seeking to contend that the
"principal understanding, as recorded in the Agreement dated
March 18, 2020" stood "concluded", and that it was only on the
basis of such "concluded" understanding that the petitioner had
paid advance of US $ 2,00,000 to the respondent on 23 rd April,
2020. Reliance was also placed, in the said communication, on
the e-mail dated 17th July, 2020, from the respondent to the
petitioner, communicating the delivery timelines and schedules
of the three programs and also stating that the show titled
"UPSC" would be delivered by the end of February, 2021, with
the remaining two shows being delivered by the end of April,
2021. It was also asserted that the communications, between
the petitioner and the respondent from August to December
2020 evinced their intent to honour their
"arrangement/agreement" in respect of the aforesaid three
shows. Exception was taken, by the petitioner, to the
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respondent demurring, for the first time on 23 rd December,
2020, from the commitment to deliver the "UPSC" show. In
these circumstances, it was asserted that, if the respondent
would contract with any third party for these shows, it would
breach the Agreement dated 18th March, 2020, after having
received advance consideration. The petitioner, therefore,
called upon the respondent to deliver, forthwith, the "Immature
Season 2", "Flames Season 3" and "UPSC" programs, in
default whereof the petitioner threatened legal action.
(xxix) The respondent replied on 6th February, 2021,
categorically denying the existence of any concluded contract
with the petitioner. It was pointed out that the terms of the
agreement between the petitioner and respondent were still
being negotiated. Without sending back the signed Agreement
forwarded by the respondent on 18th March, 2020, it was
pointed out that the petitioner was suggesting changes till
December 2020. In the absence of any concluded contract, the
respondent denied any obligation to the petitioner. Insofar as
the payment of US $ 2,00,000 was concerned, the respondent
pointed out that there was no covenant, in the Agreement dated
18th March, 2020, contemplating any such payment. In any
event, it was pointed out, the said payment was even less than
the 30% Minimum Guarantee required to be paid by the
petitioner as advance under the Agreement. The respondent
pointed out that, as the petitioner was not forthcoming with a
signed Agreement, the respondent chose to accept the third
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option proposed by the petitioner in its e-mail dated 5th October,
2020, to walk away from the deal and return the amount paid by
the petitioner. The respondent confirmed, categorically, that, in
view thereof, all offers of the respondent, in relation to the three
programs, stood revoked, and no obligation remained of the
respondent, towards the petitioner. The respondent objected to
the attempt of the petitioner to thrust, on it, obligations under an
unexecuted agreement. Even so, the respondent expressed its
willingness to enter into any "fresh business discussions", if the
petitioner so desired.
(xxx) On 23rd February, 2021, the petitioner, by e-mail to the
respondent, requested for a confirmation that the balance
payable by the petitioner to the respondent as on 31st December,
2020, was US $ 1,73,222. The respondent replied, vide e-mail
dated 28th February, 2021, that no amount was due from the
petitioner, but that it was due to refund, to the petitioner, the
amount of US $ 3,10,000 paid by the petitioner. (These
documents do not form part of the record filed by the petitioner,
and were tendered, across the bar, by Mr. Jayant Mehta, learned
Senior Counsel for the respondent. They were not, however,
denied or traversed by learned Senior Counsel for the
petitioner.)
(xxxi) On 5th March, 2021, the respondent again wrote to the
petitioner, stating that, for want of any response from the
petitioner regarding its earlier e-mail dated 6th February, 2021,
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whereby the respondent had exercised the option (offered by
the petitioner) to walk away from the Agreement and return the
amount paid by the petitioner, it was presumed that the
petitioner did not want to discuss the matter any further.
Confirming that it had to refund the amount of US $ 3,10,000
paid by the petitioner, the respondent requested the petitioner to
provide details of its bank accounts so that the refund could be
made.
5. It is in these circumstances that the petitioner has approached
this Court, by means of the present petition under Section 9 of the
Arbitration & Conciliation Act, 1996 ("the 1996 Act"). The prayer
clause in the petition reads as under:
"In view of the above stated fact/circumstances and
submissions, it is most respectfully prayed that this Hon'ble
Court be pleased to:
A. Pass an order of injunction restraining the Respondent
from selling, licensing, exploiting or assigning the rights in
relation to the Programs titled 'Immature Season 2',
'Aspirants Season 1' (title subsequently changed to 'UPSC'),
'Flames Season 3' created, developed and/or produced by the
Respondent, to any other market player and/or digital
platform in terms of Clause 4.1, and Clause 5.1 of the
Agreement; AND
B. Pass an order of injunction restraining the Respondent
from creating any third-party interest in and to the Programs
titled 'Immature Season 2', 'Aspirants Season 1' (title
subsequently changed to 'UPSC'), 'Flames Season 3' created,
developed and/or produced by the Respondent, in favour of
any third party; AND
C. Pass an order of injunction, restraining the Respondent
from, in any manner, breaching/violating the exclusivity
obligations under the Agreement; AND
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D. Pass an order directing the Respondent to deposit
either in this Hon'ble Court or in an escrow account, an
amount equivalent to the INR of USD 310,000/- (United
States Dollar Three Hundred and Ten Thousand Only), being
the consideration amount admittedly received as advance
consideration from the Petitioner, along with interest @18%
per annum from the date of receipt of payment till the date of
delivery of the said Programs; AND
E. Pass an order directing the Respondent to disclose on
affidavit its assets and restraining the Respondent from
alienating / transferring / selling or otherwise disposing off its
assets in any manner till the conclusion of arbitration
proceedings between the parties; AND
F. Pass such further orders as this Hon'ble Court may
deem fit in the facts O and circumstances of the present case."
6. Detailed arguments were advanced by Mr. Amit Sibal and Mr.
Jayant Mehta, learned Senior Counsel for the petitioner and the
respondent respectively, and detailed and exhaustive written
submissions have also been filed by the learned counsels. Learned
Senior Counsels were agreeable to the petition being disposed of, on
the basis of the oral submissions advanced at the Bar and the written
submissions tendered.
Rival submissions
7. Mr. Amit Sibal, arguing on behalf of the petitioner, submitted
thus:
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(i) The contention, of the respondent, that there was no
concluded contract between the parties, was not correct, as was
apparent from the following:
(a) The e-mails dated 24th February, 2020 and 25th
February, 2020, from the respondent to the petitioner1
confirmed the understanding between the petitioner and
the respondent in relation to the programs of the
respondent to be broadcasted on the petitioner's
Platform.
(b) The respondent had signed the Agreement dated
18th March, 2020 and forwarded it to the petitioner and
the inability of the petitioner to sign the said Agreement
was owing to circumstances beyond its control.
(c) The petitioner and the respondent had acted upon
the terms of the Agreement, as was apparent from the
following:
(i) On the very day after the signing of the
Agreement, i.e. 19th March, 2020, the respondent
raised an invoice, on the petitioner, in terms of the
Agreement.
(ii) Against the said invoice, advance
consideration of US $ 2,00,000 was paid by the
1 Refer para 4(i) (supra)
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petitioner, which was unequivocally and
unconditionally accepted by the respondent.
(iii) Vide e-mail dated 3rd November, 20202 the
respondent agreed for adjustment, against the
amount due to it from the petitioner, of the
advance amount of US $ 1,10,000 payable by the
respondent to the petitioner.
(iv) As such, advance consideration of US $
3,10,000 stood paid by the petitioner to the
respondent. The respondent was not seeking to
contend that the said payment was against monies
due from the petitioner to the respondent under any
transaction not relatable to the Agreement dated
18th March, 2020.
(ii) The petitioner was ready and willing to perform its part
of the Agreement. In this context, Mr. Amit Sibal submitted, on
instructions, that his client was willing to deposit, with the
court, the balance consideration payable under the Agreement
dated 18th March, 2020.
(iii) E-mails dated 17th July, 20203 and 22nd July, 20204 from
the respondent to the petitioner, acknowledged the fact that the
"UPSC" "Immature" and "Flames" shows were "logged with
2 Refer para 4(xx) (supra)
3 Refer para 4(viii) (supra)
4 Refer para 4(ix) (supra)
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MX this year". By using the words "logged", the respondent
had acknowledged the fact that a concluded commercial
Agreement, for broadcasting of these three shows on the
petitioner's Platform, in the 2020-2021 year, was in place,
resulting in an enforceable contractual right in the petitioner's
favour.
(iv) The discussion, between the petitioner and the
respondent, for amendment of the Agreement dated 18th March,
2020, also indicated that there was, in existence, a concluded
contract, as there could be no question of any
Agreement/addendum to an unconcluded or non-existent
contract. [In this context, Mr. Sibal has emphasised the use of
the words "we can look at", as used in the mail dated 5 th
October, 20205.]
(v) The mere fact that alternative options were being
explored, between the petitioner and the respondent, did not
indicate that the petitioner in any manner repudiated the
contract dated 18th March, 2020. Rather, by suggesting
alternatives, the petitioner was accommodating the difficulties
expressed by the respondent. A proper construction of the
sequence of e-mails exchanged between the petitioner and the
respondent, from 24th August, 2020 to 14th October, 2020,
would bear out this position.
5 Refer para 4(xv) (supra)
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(vi) Undue advantage was being sought to be taken, by the
respondent, of the three "options" suggested by the petitioner in
its e-mail dated 5th October, 20205. Mr. Sibal submitted that, in
the light of the further e-mails exchanged between the petitioner
and the respondent, "option three", proposed in the e-mail dated
5th October, 20205, was no longer available for exercise by the
respondent.
(vii) A contract, in order to be legal, valid and binding among
the parties thereto, was not required, necessarily, to be signed
by all parties. Reliance was placed, for the said purpose, on the
judgment of the Queens Division Bench of High Court of U.K.
in Reveille Independent LLC v. Anotech International (UK)
Limited6, the judgment of the Court of Appeal, in appeal
therefrom, as reported in [2016] EWCA Civ 443, as well as the
judgments of the Supreme Court in Trimex International FZE
Limited, Dubai v. Vedanta Aluminium Ltd7 and Kollipara
Sriramulu v. T. Aswatha Narayana8.
(viii) In these circumstances, as (a) an arbitrable dispute
existed between the parties, (b) the Agreement between the
parties contained a valid arbitration clause and (c) irreparable
prejudice would result to the petitioner, if the Court would not
step in, Mr. Sibal would seek to contend that a clear case for
grant of interim protection, under Section 9 of the 1996 Act
exits. He submits that, as the petitioner has always been ready
6 [2015] EWHC 726 (Comm)
7 (2010) 3 Supreme Court Cases 1
8 (1968) 3 SCR 387
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and willing to perform its part of the contract and had, in fact,
paid US $ 3,10,000 to the respondent, it was entitled to specific
performance of the Agreement with the respondent. It is further
submitted, in this regard, that the content of the programs, to be
aired on the petitioner's platform in 2020-2021, is not
substitutable and that, therefore, if the right to air such
programs were to be granted by the respondent to a third party,
it would result in irreparable loss to the petitioner, which could
not be compensated by way of costs or damages. The petitioner
has also sought to point out that the respondent is admittedly in
financial difficulties.
8. To a submission, from the respondent, that no specific
performance, of the Agreement between the petitioner and the
respondent, could be directed, as the Agreement was determinable in
nature [in view of Section 14(d) of the Specific Relief Act, 19639],
Mr. Sibal submitted that, in the first place, this argument was not
available to the respondent, as its case was that there was no
concluded contract with the petitioner. Besides, Mr. Sibal points out
that determinable contracts are not, ipso facto, excluded from the
scope of enforcement, by Section 14(d), which applies only to a
contract which is "in its nature determinable". This, he submits,
914. Contracts which are not specifically enforceable. - The following contracts cannot be
specifically enforced, namely:-
(a) where a party to the contract has obtained substituted performance of contract in
accordance with the provisions of section 20;
(b) a contract, the performance of which involves the performance of a continuous duty
which the court cannot supervise;
(c) a contract which is so dependent on the personal qualifications of the parties that the
court cannot enforce specific performance of its material terms; and
(d) a contract which is in its nature determinable."
(Emphasis supplied)
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would refer to contracts which are determinable at the sweet will of
either of the parties thereto, without reference to the other party and
unconditionally, without the requirement of any breach. For this
purpose, Mr. Sibal relies on the judgment of the recent decision, dated
12th March, 2021, of this Court, in OMP (I) (Comm) 87/2021 [Dr.
Sharad Sahai v. DIO Digital Implant India Pvt. Ltd] and of the High
Court of Bombay in Narendra Hirawat & Co. v. Sholay Media
Entertainment Pvt. Ltd.10.
9. Responding to the submissions of Mr. Amit Sibal, Mr. Jayant
Mehta, learned Senior Counsel appearing for the respondent,
advanced the following contentions:
(i) There was no concluded contract between the parties.
The contract, as signed by his client, had been forwarded to the
petitioner as far back as on 18th March, 2020. Till date, the
signed contract has not been sent back, by the petitioner to the
respondent. Rather, the petitioner started suggesting one
amendment after the other, without responding to the repeated
entreaties, of the petitioner, to return the signed contract. The
communications exchanged between the respondent and the
petitioner clearly indicated that the petitioner was unwilling to
abide by the covenants of the contract as originally forwarded
by the respondent to the petitioner, and desired to alter various
aspects, including a change from a "3+3" to a "1+1+1"
regimen, change in the advertisement slots and alterations in the
10 2020 (5) MLJ 173
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consideration governing the contract. The respondent, for its
part, had never acquiesced to any of these changes. There being
no concluded contract between the petitioner and the
respondent, no case for specific performance thereof, could at
all lie. Clearly, there was no consensus ad idem between the
parties, regarding the covenants of the Agreement.
(ii) In the anticipation of a response from the petitioner, the
respondent had forwarded the invoice dated 19th March, 2020.
That invoice, too, remains unpaid even as on date. Mr. Mehta
has pressed into service, the principle that a party, in breach of a
contract, cannot seek specific performance thereof, for which
purpose he cites the judgment of a Single Bench of this Court in
Enter Tech Entertainment Pvt. Ltd. v. Blueair India Pvt.
Ltd.11.
(iii) The correspondences exchanged between the petitioner
and the respondent clearly indicates that the petitioner has,
contrary to its own assertions, never been ready or willing to
perform the contract. Readiness and willingness submits Mr.
Mehta, have to be reflected from the acts of the party and the
onus in that regard rests on the party seeking specific
performance of the contract. The petitioner, he submits, has
miserably failed to discharge this onus. Reliance has been
placed, in this context, by Mr. Mehta, on the judgment of a
Division Bench of this Court in Inter Ads Exhibition Pvt. Ltd.
v. Busworld International Cooperative Vennootschap Met
11 2016 SCC OnLine Del 5507
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Beparkte Anasprakelijkheid12, as well as the judgment of the
learned Single Judge of this Court, which stands affirmed
thereby13.
(iv) In these circumstances, the respondent had availed one of
the three options proposed by the petitioner in its e-mail dated
5th October, 2020, by opting to exit the contract and refund the
amounts paid by the petitioner. Mr. Mehta has emphasised the
fact that each of the three options suggested by the petitioner
amounted to a material departure from the Agreement dated 18th
March, 2020 and, therefore, to clear repudiation of the contract
by the petitioner. The petitioner, he submits, was clearly
unwilling to abide by the covenants of the Agreement dated 18th
March, 2020 and could not, therefore, seek enforcement thereof.
(v) Mr. Mehta has also relied on the judgment of the
Division Bench and the Single Judge of this Court in Inter Ads
Exhibition Pvt. Ltd.12 & 13 to contend that a contract containing a
"termination for default" clause was "in its nature
determinable" within the meaning of Section 14(d) of the
Specific Relief Act, 1963 and was, therefore, not specifically
enforceable. Section 41(e) of the Specific Relief Act, 1963
therefore, proscribed the Court from granting any injunction,
towards enforcement of such a contract14.
12 AIR 2020 Delhi 107
13 2020 SCC OnLine Del 351
14 41. Injunction when refused. - An injunction cannot be granted -
*****
(e) to prevent the preach of a contract the performance of which would not be specifically
enforced;"
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Analysis and Conclusion
10. To my mind, it is clear, from a bare reading of the
correspondence between the parties, that no relief, whatsoever, can be
granted to the petitioner, at least in exercise of the jurisdiction vested
in this Court by Section 9 of the 1996 Act.
11. The troika of a prima facie case, balance of convenience, and
irreparable loss, it is trite, apply as much to Section 9 of the 1996 Act,
as to Order XXXIX of the Code of Civil Procedure, 1908, apart from
the issue of whether grant of interim protection would be "just and
convenient".15
12. The petitioner has, in my considered opinion, been unable to
make out a prima facie case for grant of the reliefs sought. As such,
no occasion arises to consider the issues of balance of convenience
and irreparable loss, the troika considerations requiring cumulative,
not alternative, satisfaction.
The "concluded contract" conundrum
13. The tone and tenor of the communications between the parties,
apropos the Agreement dated 18th March, 2020, are clear and
unmistakable.
15 Refer Adhunik Steels Ltd v. Orissa Manganese & Minerals Pvt Ltd, (2007) 7 SCC 125, Transmission
Corporation of A.P. Ltd v. Lanco Kondapalli Power Pvt Ltd, (2006) 1 SCC 540
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14. As far back as on 18th March, 2020, the respondent forwarded,
to the petitioner, the contract signed by the respondent. Till date, the
petitioner never condescended to return the said contract, duly signed.
15. A cohesive and conjoint reading of the e-mails exchanged
between the petitioner and the respondent clearly indicate that the
petitioner was unwilling to abide by the covenants contained in the
Agreement dated 18th March, 2020, as signed by the respondent and
forwarded to the petitioner. The respondent repeatedly requested the
petitioner by e-mails dated 2nd June, 2020, 8th July, 2020, 17th July,
2020 and 22nd July, 2020, inter alia, to send back the Agreement, duly
signed. The petitioner did not do so.
16. The petitioner, instead, required the respondent vide e-mail
dated 15th July, 2020, to communicate the schedule of the programs to
be aired on the petitioner's website. The respondent communicated
the said schedule vide reply e-mail 17th July, 2020. Even thereafter,
the petitioner did not forward the signed Agreement to the respondent.
17. Rather, starting 24th August, 2020, the petitioner started to
propose changes in the "the overall construct of the arrangement".
18. On 11th September, 2020, the petitioner stated that it wanted to
air the program as a "1+1+1 show". At this point, I may note that an
attempt was made by Mr. Amit Sibal, on behalf of the petitioner, to
state that, by requiring the program to be aired in "1+1+1 format", the
petitioner was not suggesting any change from the regimen
contemplated by the Agreement dated 18th March, 2020, which was
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also on a "1+1+1 format", even if it did not expressly say so. On the
face of the correspondence between the parties, I am unable to accept
this contention. On 21st September, 2020, the respondent had
expressed its difficulty in the new arrangement proposed by the
petitioner, of "starting with the new Title and then deciding on
subsequent seasons of established titles".16 Neither in its further
communications to the respondent, nor during submissions in Court,
did the petitioner seek to deny that this was a revised arrangement,
proposed by it.
19. In this context, Mr. Mehta has further invited my attention to
the e-mail dated 5th October, 20205, in which the petitioner
transparently, stated that it desired to "move ahead with this deal with
a revised structure of a 1 + 1 + 1 approach wherein we greenlight the
2nd show post the launch of the previous based on the output
delivered". This intent was again reflected in the following passage
from the subsequent e-mail dated 14th October, 202017:
To capture the broad understanding, the current deal would
be structured as a 1 + 1 + 1 with MX greenlighting the
subsequent shows post the launch of the previous based on
the output delivered. This would mean that the amount paid
to TVF as a signing fee would be against the 1st show which
we chose, which I would confirm to be Immature 2.
The Agreement dated 18th March, 2020, as signed by the respondent,
did not contemplate any "greenlighting", by the petitioner, of the
second show, based on the "output delivered" on the first. It
envisaged, clearly, three shows, namely Immature, Aspirants and
Flames, being delivered by the respondent to the petitioner, for
16 Refer para 4 (xiii) (supra)
17 Refer para 4 (xvii) (supra)
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broadcasting on the petitioner's platform. The remaining three shows
were optional. The Annexure to the Agreement, too, did not
contemplate any such arrangement, as was reflected in the e-mails
dated 5th October, 2020 and 14th October, 2020, from the respondent
to the petitioner. Without, at any point of time, sending back a
countersigned Agreement, the petitioner suggested as many as three
Amendments to the original Agreement dated 18th March, 2020.
There was no acquiescence, by the respondent, to any of the said
Amendments.
20. By no stretch of imagination can it be said, therefore, that there
was consensus ad idem between the parties, at any stage of the
proceedings, starting 18th March, 2020, regarding the covenants of the
Agreement executed. That being so, in the absence of any contract
duly signed by both parties, no concluded contract enforceable in law
could be said to have come into being.
21. The submission of Mr. Amit Sibal, that the law does not require
a contract, to be enforceable, to be signed by both parties, has no
application in the facts of the present case. The issue is not one of
want of signatures of both parties, but want of consensus regarding
the Agreement. As a general proposition of law, it cannot be gainsaid
that the a contract, even if not signed by both parties, may be
enforceable, provided consensus ad idem, regarding the terms of the
contract, exists, and the parties have acted in accordance with the
contract, thereby evincing the intent to be bound by the covenants
thereof. Neither of these requirements is, unfortunately for the
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petitioner, met in the present case. Clearly, there is no consensus ad
idem between the petitioner and the respondent. Nor can it be said
that the petitioner and the respondent had acted on the basis of the
contract. Clause 8.1.1 of the Agreement dated 18th March, 2020
required the petitioner to pay advance of 30% of the Minimum
Guarantee within 30 days of the execution of the Agreement. Neither
has the Agreement been executed, nor has 30% of the Minimum
Guarantee been paid, till date. Mr. Mehta correctly points out that the
petitioner has not even made payment in accordance with the invoice
dated 19th March, 2020 raised by the respondent. Rather, the e-mail
dated 23rd February, 2021, from the petitioner to the respondent18
(which the petitioner has not chosen to file), impliedly acknowledged
that, even as per the Agreement dated 18th March, 2020, US $
1,73,222 remained outstanding from the petitioner to the respondent.
The belated suggestion, by Mr. Amit Sibal, during arguments in
Court, that the petitioner be permitted to deposit the balance payment
in Court, cannot advance its case an inch, or make out any case for
grant of interim protection by this Court.
22. Even otherwise, given the number of aspects on which there has
been want of meeting of minds between the petitioner and the
respondent, it can hardly be said that consensus ad idem existed
between them.
23. The petitioner proposed as many as three amendments to the
Agreement dated 18th March, 2020. The respondent, by its
18 Refer para 4(xxx) (supra)
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communications to the petitioner, clearly expressed its difficulties in
agreeing to the amendments proposed by the petitioner. The
respondent has never acquiesced, either expressly or by necessary
implication, to any of the amendments, suggested by the petitioner.
24. Mr. Sibal also sought to contend that if there was no concluded
contract, the parties would never have explored the possibility of
addenda or amendments thereto. This submission, on the face of it,
merits rejection. In the present case, the suggested contract, as signed
by the petitioner and forwarded to the respondent, was never
countersigned by the respondent. Rather, the petitioner proposed three
different amendments, at one point of time, after the other, to the
respondent, none of which were accepted by the respondent. There
has been no consensus ad idem on the Agreement dated 18th March,
2020, either as originally signed by the respondent or in any of its
amended avatars. No concluded contract can, therefore, be said to
have come into being between the petitioner and the respondent.
25. This, apparently, was also the understanding of the petitioner,
as reflected by its e-mail dated 5th October, 20205 addressed to the
respondent. Mr. Sibal sought to object to Mr. Mehta reading the said
e-mail dated 5th October, 20205 in isolation and submitted that if the
said e-mail were to be read in conjunction with the e-mails which
preceded and succeeded it, it would become apparent that the three
options proposed by the petitioner in the said e-mail dated 5th October,
20205, were no longer available to the respondent, by the time the
respondent chose to exercise the third option, vide its e-mail dated 5th
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October, 20205. I cannot, prima facie, accept this submission. Rather,
it appears to me that if the e-mail dated 5th October, 20205 was to be
read in conjunction with the e-mails which preceded it, the position
that emerges is that, having proposed various changes to the original
Agreement dated 18th March, 2020 (as forwarded by the respondent to
the petitioner), and having found that the respondent was not
amenable to agree to the said changes, the petitioner recognized the
fact that there was no possibility of travelling the contractual path any
further with the respondent. As such the option of walking out of the
Agreement and returning the amount deposited by the petitioner, in
my view, was consciously proposed by the petitioner, as one of the
only viable alternatives remaining. The respondent exercised this
option. There is no communication from the petitioner to the
respondent withdrawing any of the aforesaid three options, suggested
in the e-mail dated 5th October, 2020. Once, therefore, the respondent
had exercised the third option suggested by the petitioner, it is no
longer open to the petitioner to seek specific performance of the
Agreement dated 18th March, 2020, which has run its course.
26. In circumstances such as these, the judgments of the Supreme
Court in Trimex International7 and Kollipara Sriramulu8 can be of
no avail to the petitioner. Trimex International7 held,
unexceptionably, that "once (a) contract is concluded orally or in
writing, the mere fact that a formal contract has to be prepared and
initialed by the parties would not affect either the acceptance of the
contract so entered into or implementation thereof, even if the formal
contract has never been initialled". (Refer para 49 of the report)
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Similarly, Kollipara Sriramulu8 dealt with a situation in which the
agreement, on the basis of which the parties had acted, contemplated
execution of a "future formal contract". The Supreme Court held that,
in such circumstances, the existence of a binding contractual
relationship between the parties could not be denied merely because
the "future formal contract" had not been executed. There is no
parallel, whatsoever, between the issue in controversy in that case,
and that in controversy in this.
27. The legal position, rather, is against the petitioner, as reflected
by the judgment in U. P. Rajkiya Nigam Ltd v. Indure Pvt Ltd19. In
that case, the U.P. State Electricity Board ("UPSEB") floated tenders
for certain construction activities. The tender documents were
purchased by the U. P. Rajkiya Nigam Ltd ("UPRNL"). M/s Indure
Pvt Ltd ("Indure") approached UPRNL for joint participation in
submitting tenders in response to the notice of UPSEB. A draft
agreement was prepared by UPRNL and sent, without signature, to
Indure, but Indure did not sign it. Rather, Indure sent back a counter-
proposal, on 27th June, 1984, incorporating certain changes suggested
by it. The tenders were submitted to the UPSEB and, later, withdrawn
by the UPRNL before they were finalized. Indure, thereupon,
approached the UPSEB undertaking to perform the entire contract by
itself. Side by side, Indure also issued a notice, to UPRNL, invoking
arbitration under Clause (14) of the draft agreement. Indure contended
that it had accepted the draft agreement on 27th June, 1984, while
UPRNL disputed the existence of any concluded contract with Indure.
19 (1996) 2 SCC 667
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28. UPRNL approached the High Court under Section 33 of the
1996 Act. The High Court held that a concluded contract had
emerged, between UPRNL and Indure, on the ground that (i) UPRNL
had sent the drafted contract to Indure, (ii) Indure had signed the
contract and sent it back with modifications to UPRNL, (iii) at no
time did UPRNL reject the modifications, and (iv) UPRNL, rather,
acted on the basis of the contract thus returned by Indure by
submitting the tender. As such, the High Court held that UPRNL
could not deny the existence of the contract, or of the arbitration
agreement therein.
29. Reversing the decision, the Supreme Court held, in paras 17
and 19 of the report, thus:
"17. In Ramji Dayawala & Sons (P) Ltd. v. Invest
Import [(1981) 1 SCC 80 : AIR 1981 SC 2085] , a two-Judge
Bench of this Court considered the existence of the contract
and arbitration clause thereunder. This Court had held that in
the facts of a given case acceptance of a suggestion may
be sub silentio reinforced by the subsequent conduct. Where
there is a mistake as to terms of a document, amendment to
the draft was suggested and a counter-offer was made, the
signatory to the original contract is not estopped by his
signature from denying that he intended to make an offer in
the terms set out in the document. Where the contract is in a
number of parts it is essential to the validity of the contract
that the contracting party should either have assented to or
taken to have assented to the same thing in the same sense or
as it is sometimes put, there should be consensus ad idem. In
that case a sub-contract was signed and executed by the
Managing Director of the appellant-Company but part of the
contract was altered subsequently since counter-proposal was
given by the respondent. This Court had held that one such
case is where a part of the offer was disputed at the
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negotiation stage and the original offeree communicated that
fact to the offeror saying that he understood the offer in a
particular sense; this communication probably amounts to a
counter-offer in which case it may be that mere silence of the
original offeror will constitute his acceptance. Where there is
a mistake as to the terms of the documents as in that case,
amendment to the draft was suggested and a counter-offer
was made, the signatory to the original contract is not
estopped by his signature from denying that he intended to
make an offer in the terms set out in the document; to wit, the
letter and the cable. It can, therefore, be stated that where the
contract is in a number of parts it is essential to the validity of
the contract that the contracting party should either have
assented to or taken to have assented to the same thing in the
same sense or as it is sometimes put, there should be
consensus ad idem. It was held that there was no consensus
ad idem to the original contract. It was open to the party
contending novatio to prove that he had not accepted a part of
the original agreement though it had signed the agreement
containing that part.
19. In view of the fact that Section 2(a) of the Act
envisages a written agreement for arbitration and that written
agreement to submit the existing or future differences to
arbitration is a precondition and further in view of the fact that
the original contract itself was not a concluded contract,
there existed no arbitration agreement for reference to the
arbitrators. The High Court, therefore, committed a gross
error of law in concluding that an agreement had emerged
between the parties, from the correspondence and from
submission of the tenders to the Board. Accordingly it is
declared that there existed no arbitration agreement and that
the reference to the arbitration, therefore, is clearly illegal.
Consequently arbitrators cannot proceed further to arbiter the
dispute, if any. The conclusion of the High Court is set
aside."
(Emphasis supplied)
30. Consensus ad idem, the foremost, and most indispensable,
prerequisite for any concluded contract, is totally absent in the present
case. No contract, which the Court could, in exercise of its
jurisdiction under Section 9 of the 1996 Act, specifically enforce, or
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the specific performance of which the Court could protect, even
pending arbitration, can be said to exist.
31. In view of the aforesaid, no occasion arises for this Court to
enter into any other aspect of the controversy, including the aspects of
balance of convenience and irreparable loss, as there is no prima facie
case made by the petitioner, justifying grant of any of the interim
reliefs sought in the present petition. In my view, the petitioner is, for
reasons unknown, seeking to breathe life into a dead body. Mr. Mehta
has submitted that his client has requested the petitioner, on more than
one occasion, to take back the amount of US $ 3,10,000, paid by the
petitioner to the respondent. Needless to say, that option would always
be open to the petitioner and it is not necessary for this Court, in the
present proceedings, to express any view thereon. Suffice it to say
that, as no concluded or enforceable contract with the petitioner has
ever come into being, none of the reliefs in this petition, under Section
9 of the 1996 Act, can be granted to the petitioner. It is obviously
open to the respondent to contract with any other party, for
broadcasting of its programs.
32. The present judgment adjudicates only the prayer of the
petitioner for interim protection under Section 9 of the 1996 Act, and
the views expressed herein are prima facie, towards such adjudication.
Section 9 requires the Court to examine, inter alia, whether the
petitioner has made out a prima facie case, as one of the
considerations for grant of interim protection. For the reasons
aforementioned, the answer, in my opinion, has to be in the negative.
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Needless to say, the parties would be at liberty to seek resolution of
their disputes by arbitration and, in such event, the Arbitral Tribunal
would not be bound by the findings, on merits, contained in this
judgment.
Conclusion
33. In view thereof, there is, in my view, no substance, whatsoever,
in this petition, which is accordingly dismissed with no orders as to
costs.
C. HARI SHANKAR, J.
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