Delhi High Court
Times Internet Limited vs Alt Digital Media Entertainment ... on 23 May, 2019
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 23rd May, 2019.
+ CS(COMM) 268/2019 & IAs No.7435/2019 (u/O XXXIX R-1&2
CPC) & 7436/2019 (u/O II R-2 CPC)
TIMES INTERNET LIMITED ..... Plaintiff
Through: Mr. Rajiv Nayar, Sr. Adv. with Mr.
Mohit Chadha and Mr. Saurabh Seth,
Advs.
Versus
ALT DIGITAL MEDIA ENTERTAINMENT
LIMITED ......Defendant
Through: Mr. Amit Sibal, Sr. Adv. with Ms.
Sonam Gupta, Mr. Kaushik Moitra,
Mr. Anurag Tandon, Ms. Niyati
Asthana, Mr. Sohan Kumar and Mr.
Ambar Bhushan, Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. The plaintiff has instituted this suit "for permanent and mandatory
injunction" pleading, (i) that the plaintiff is inter alia engaged in the
business of production, development, marketing and distribution of media
and entertainment content; the plaintiff owns and operates the digital
platform namely MX Player; (ii) that the said platform of the plaintiff has
become a preferred choice of millions of its customers who are looking for
one-stop platform for movies, TV shows, web series, music videos and short
videos; (iii) that the said platform of the plaintiff focuses on exclusive
original content, with emphasis on high-quality Hindi and regional
languages; (iv) that the defendant is engaged in the business inter alia of
CS(COMM) 268/2019 Page 1 of 25
production and development of audio-visual content and is the producer and
owner of media content, including original shows, web series, videos, sound
recordings and other audio visual content; (v) that the defendant also
operates and provides an over-the-top platform that offers subscription-
based video on-demand services; (vi) that in the year 2018, the defendant
offered to grant to the plaintiff, the right to integrate its digital platform /
website / channel or other means of distribution of content operated by the
defendant or its affiliates, including the platform named ALT Balaji, with
the plaintiff‟s platform, to distribute the existing and additional programs
operated by the defendant on Balaji platform and make them available to the
viewers of the plaintiff‟s MX Player platform; (vii) that the plaintiff and the
defendant entered into a Content Distribution Agreement dated 11 th October,
2018 whereunder the defendant granted to the plaintiff, for the period from
28th September, 2018 to 27th September, 2019 inter alia, (a) the right to
integrate, incorporate and embed the content of defendant‟s platform with
the plaintiff‟s platform; and, (b) right to broadcast each of the programs or
any parts thereof available on the defendant‟s Balaji platform on the
plaintiff‟s platform; (viii) that in consideration of the rights granted by the
defendant, the plaintiff, out of the total agreed consideration of Rs.12 crores,
paid licence fee of Rs.6,48,00,000/- (Rs.4,32,00,000/- + Rs.2,16,00,000/-);
(ix) that in terms of the Agreement, the defendant made the content
available on its platform to the plaintiff in the format mutually agreed upon
between the parties; (x) that during the meeting held on 4 th March, 2019, the
representatives of the defendant expressed their intention to, with effect
from 1st April, 2019, withdraw all the content provided by the defendant
under the said Agreement on the plaintiff‟s platform; (xi) that such sudden
CS(COMM) 268/2019 Page 2 of 25
withdrawal was not acceptable to the plaintiff, since the same was in breach
of the Agreement which is valid till 27th September, 2019 and was bound to
have severe and adverse implications on plaintiff‟s business plans and
viewership; (xii) that the business plans of the plaintiff are devised on the
basis of the quantum of content anticipated by the plaintiff from its content
partners; thus the unexpected deviation from an agreed understanding by the
defendant as a content partner of the plaintiff affected the business plans of
the plaintiff; (xiii) that even though there was no obligation to hold
discussions with the defendant but the plaintiff held discussions with the
defendant; however the defendant was adamant; (xiv) that in the meeting
held on 30th March, 2019, it was "agreed" that the programs to be provided
by the defendant as per the Agreement would be tapered down, after mutual
discussion and approval / consent of the plaintiff; (xv) however, the
defendant, vide its email dated 2nd April, 2019 proposed that the defendant
would withhold pulling out of its programs till 15 th April, 2019; with effect
from 15th April, 2019, ten programs would be taken off, similarly on 15th
May, 2019, and 15th June, 2019 also ten programs would be taken off, and
the plaintiff‟s platform could continue to use the programs mentioned
therein till the end of the licence period; (xvi) however, the aforesaid
proposal was not acceptable to the plaintiff; and, (xvii) the defendant
abruptly took down the new episodes of the existing programs and stopped
making its programs available to the plaintiff.
2. The following reliefs are claimed in the suit:
"a) a decree of permanent injunction restraining the Defendant, its
partners, directors or shareholders, as the case may be, its assigns
in business, franchisees, affiliates, subsidiaries, licencees and
CS(COMM) 268/2019 Page 3 of 25
agents, from removing the entire or any part of the Program(s)
(Existing Program(s) and / or Additional Program(s), as the case
may be) or any other content, as agreed under the Agreement
from the Licensed Platforms, during the subsistence of the
Agreement;
b) a decree for mandatory injunction directing the Defendant, its
partners, directors, or shareholders, as the case may be, its assigns
in business, franchisees, affiliates, subsidiaries, licencees and
agents, to comply with the obligations under the Content
Distribution Agreement dated 11.10.2018;
c) a decree for mandatory injunction directing the Defendant, its
partners, directors or shareholders, as the case may be, its assigns
in business, franchisees, affiliates, subsidiaries, licencees and
agents, to not only deliver / make available the Existing Programs
on the Licensed Platform, but also provide to the Plaintiff, all
Additional Programs that are currently being Broadcasted and in
future will be Broadcasted, on the Balaji Platform, in such manner
that all the Additional Programs are released on the Licensed
Platform simultaneously with the release on Balaji Platform,
during the subsistence of the Agreement;"
3. The suit came up first before this Court on 20th May, 2019, when the
counsel for the defendant/caveator appeared and the hearing adjourned to
the following day. The following day as well as on the date thereafter, the
hearing was adjourned on account of non-availability of some counsel or the
other.
4. The senior counsel for the plaintiff and the senior counsel for the
defendant have been heard.
CS(COMM) 268/2019 Page 4 of 25
5. The senior counsel for the plaintiff has argued that out of the total
annual licence fee of Rs.12 crores, the plaintiff has already paid Rs.6 crores
to the defendant.
6. The senior counsel for the defendant contends that the plaintiff is
seeking the relief of specific performance of the Agreement dated 11 th
October, 2018, without seeking the said relief and without making the
requisite pleas therefor.
7. I have straightway enquired from the senior counsel for the plaintiff,
whether the present suit is for the relief of specific performance of the
Agreement and if so, what are the pleadings in this respect.
8. The senior counsel for the plaintiff, under instructions states that the
plaintiff is not seeking specific performance of the Agreement dated 11 th
October, 2018. It is argued that the plaintiff is enforcing the negative
covenant in the Agreement. Attention is drawn to the Agreement, in which
the defendant is referred to as the „licensor‟ and the plaintiff as „licencee‟,
relevant clauses whereof are as under:
"WHEREAS:
A. ...
B. ...
C. The Licensor has offered to grant to the Licensee, the
right to integrate the Balaji Platform with the Licensed
Platform, distribute the Programs through the Licensed
Platform, and exploit the Rights (defined hereunder) in
the Programs, and the Licensee has agreed to the
aforesaid arrangement for the Territory, in accordance
with the terms of this Agreement;
.......
CS(COMM) 268/2019 Page 5 of 25
2. GRANT OF RIGHTS
2.1 Rights. The Licensor hereby grants to the Licensee, the
Rights on a non - exclusive basis, including the following
rights in and to each of the Programs, for the License
Period and throughout the Territory. Parties agree that
the Rights granted to the Licensee hereunder are non -
transferable except to the Licensee's Affiliates and as
permitted in this Agreement, and shall be revocable by
the Licensor only in accordance with the terms of this
Agreement:
2.1.1. The right to integrate, incorporate and embed the
Content API in and with the Licensed Platform and
cache the meta data of the Programs on Licensee's
servers, and utilize the Content API and the
Programs for the purposes set out in this
Agreement;
2.1.2. the right to Broadcast each of the Programs or any
parts thereof available on the Balaji Platform as
integrated in the Licensed Platform, in the
Licensed Languages, during the License Period
and in the Territory through any Modes of
Exploitation, by means of internet or intranet on
an Approved Device, on an unlimited runs basis
without any restriction or limitation whatsoever in
respect of the number of Broadcasts of any
Program. It is hereby clarified that the Licensee /
User shall have the right to exploit the Programs
on the Licensed Platform through the Balaji
Platform integrated with the Licensed Platform
using Playback Functionality;
2.1.3. the right to Broadcast the Programs or any parts
thereof on the Licensed Platform, as part of an On
CS(COMM) 268/2019 Page 6 of 25
Demand Service and/or on a video on demand
basis or any such similar means or technology as
specified under the Agreement;
2.1.4. to create thumb nails of and from the Programs
and to display the same on the Licensed Platform
through the Balaji Platform to enable end users to
click on the thumb nails and access the Programs;
2.1.5. the right to create advertisement slots before, after
or during any Program and insert advertisements
of third parties or of the Licensee or any Affiliates
in any Program, by way of banners, mid rolls, pre-
rolls, post rolls and to sell and monetize such
advertisement slots in any manner as the Licensee
may deem fit, and receive consideration from third
parties or displaying their advertisements during
such advertisement slots of the Programs.
Provided that the Licensee (i) shall ensure that the
underlying content of each Program is not edited
to create the advertisement slots in terms of this
Clause, (ii) shall ensure that the advertisements do
not interfere with the creative elements of any
Program and does not change the concept and
storyline of any Program; and (iii) shall not play
advertisements of any Competitors during
exhibition of any Programs of the Licensor
licensed to the Licensee hereunder;
2.1.6. the right to promote and advertise the Broadcast of
the Programs on the Licensed Platform, in subject
to Clause 2.2 of this Agreement;
2.1.7. the right to Download and allow Users to
Download the Programs (or any parts thereof) for
offline viewing of the Programs on the Licensed
CS(COMM) 268/2019 Page 7 of 25
Platform, during the License Period; and the right
to share and to allow Users to share the Programs
or any parts thereof with other Users, for viewing
within the Licensed Platform during the License
Period;
2.1.8. the right to sue the names, photographs, likenesses
of all performers associated with or involved in the
creation of the Programs including the names,
photographs, likenesses of the artists, composer,
lyricist, musicians and other companies (i.e., all
persons who have rendered services in connection
with the Programs) in connection with the
Programs and all other publicity material
throughout the Territory for purpose of exploiting
the Licensee's Rights under this Agreement,
subject to Clause 2.2 of this Agreement; and
2.1.9. the right to superimpose the Licensee's or its
Affiliates' trademark on the Licensed Platform,
Promotional Materials and Additional Materials in
a manner that does not have a material adverse
effect on the Licensor's Intellectual Property
Rights and/or the Licensor's branding on the
Programs.
......
5. DELIVERY OF PROGRAMS AND INTEGRATION
OF CONTENT API
5.1. The Licensor shall make available the Content API to the
Licensee in the format mutually agreed between the
Parties in writing separately upon execution of this
Agreement (emails allowed), and provide to the Licensee
the access of the Content API for necessary integration of
CS(COMM) 268/2019 Page 8 of 25
Programs on the Licensed Platform, on or before the
Execution Date.
5.2. Simultaneously with the execution of this Agreement by
the Parties, the Licensor shall deliver all Existing
Programs to the Licensee, through Content APIs, to be
integrated on the Licensed Platform.
5.3. Thereafter, the Licensor shall provide to the Licensee, all
Additional Programs that are Broadcast on the Balaji
Platform, in such manner as shall ensure that all
Additional Programs are released on the Licensed
Platform simultaneously with the release on Balaji
Platform but no later than 2 (two) hours (solely in case of
technical failure) from the release of such Program on
the Balaji Platform or Youtube.
5.4. The Licensor shall ensure that all upgrades, updates,
additions to the Programs ("Updated Programs"),
occurring at any time during the Term, are delivered to
the Licensee simultaneously and available for
transmission to Users on the Licensed Platform, such
that at any time during the Term, the same version of all
Programs is exhibited on the Licensed Platform and on
the Balaji Platform. All Updated Programs as available
on the Balaji Platform shall be deemed to form part of
the Programs.
5.5. The Licensor shall ensure that the Content API and other
related integrations as may be required by the Licensee
for the purpose of this Agreement, are implemented in a
smooth manner, without any disruption, interruption and
interference to/with the Licensed Platform, save and
except for technical disruption which is not in anyway
attributable to the Licensor, its employees, agents and
consultant.
CS(COMM) 268/2019 Page 9 of 25
5.6. The Licensee shall be entitled to undertake all tests
required to assess and examine the functionality and
operation and the integrations undertaken by the
Licensor pursuant to this Agreement ("Acceptance
Testing"). If during the course of the Acceptance Testing
or at anytime thereafter during the License Period, the
Licensee identifies or discovers any errors or defects or
other functionality issues in the Content API provided by
the Licensor ("Errors"), then the Licensor shall rectify
the same within a maximum period of 3 (three) working
days from the time the Error is reported by the Licensee
to the Licensor in writing (emails allowed) and
skype/wechat of any authorized representatives of the
Licensor.
5.7. Further, the Licensor shall ensure that any changes or
modifications to the Content API undertaken by the
Licensor shall be implemented without any hindrance in
the functioning of the Licensed Platform (save and except
for technical disruptions which are not in anyway
attributable to or are not in control of the Licensor, its
employees, agents and consultants) and transmission of
the Programs on the Licensed Platform, and without any
changes to the user interface and user experience on the
Licensed Platform. In the event of any interruptions in
the audio/audio video signals of the Balaji Platform on
the Licensed Platform, the Licensor will rectify the same
as soon as possible and no later than 24 (twenty four)
hours from the time such interruptions occur.
5.8. The Programs shall be hosted on the Licensor's server(s)
and will be delivered using Licensor's delivery network.
The Licensee shall cache the meta data on Licensee's
server to avoid frequent calls to Licensor's servers.
CS(COMM) 268/2019 Page 10 of 25
5.9. The Licensor shall be responsible for providing,
procuring, maintaining and supporting all the hardware
and all third party software licenses related to the
Content API of the Balaji Platform required throughout
the Term, to operate the Balaji Platform and the Content
API and to grant the license hereunder, and to deliver
and exhibit the Programs through the Licensed Platform,
without any interruptions or disruptions (save and except
for technical disruptions which are not attributable to or
not in control of the Licensor, its agents and consultants).
It is hereby agreed by the Parties that the transmission of
the Programs on the Licensed Platform shall be
simultaneous with that of the Balaji Platform. All
business, administrative and other expenses in relation to
delivery of the Programs on the Licensed Platform, by
the Licensor shall be incurred solely by the Licensor.
5.10. The Parties further agree that if at any time during the
Term, any Program(s) are not available/accessible on the
Licensed Platform as a result of a delay in adherence to
any of the timelines set out above in this Clause 5, the
License Period shall stand automatically extended with
such period for which the Program(s) remained
unavailable on the Licensed Platform.
......
11. TERMINATION
11.1. Either Party shall be entitled to terminate this
Agreement, by giving a written notice of 7 (seven) days to
the other Party ("Defaulting Party") in the event:
11.1.1. the Defaulting Party breaches any of its
covenants or obligations hereunder or any other
terms of this Agreement, including the
Licensor's failure to delivery any Programs in
CS(COMM) 268/2019 Page 11 of 25
accordance with the terms of this Agreement,
and failure to cure such breach within 7 (seven)
days from being notified of the occurrence of
such breach. In the event of any payment default
by the Licensee, the cure period specified above
shall be 30 (thirty) working days; or
11.1.2. any representation and/or warranty of
Defaulting Party is found to be false, misleading,
untrue, or inaccurate in any manner, and failure
of the Defaulting Party to rectify the same within
7 (seven) days of being notified of the relevant
representation and/or warranty being false,
misleading, untrue, or inaccurate; or
11.1.3. any claims or proceedings being made against
the Defaulting Party which is not resolved or in
respect of which no injunction is granted (where
applicable) for a period of more than 60 (sixty)
days, and the continuance of which
claim/proceeding(s) adversely hampers the
arrangement or business contemplated between
the Parties hereunder;
11.1.4. any petition for winding up, liquidation,
insolvency or bankruptcy is admitted against the
Defaulting Party in any competent court.
11.2. Each Party shall be entitled to terminate this Agreement,
by giving a prior written notice of 7 (seven) days to the
other Party, in the event of a Force Majeure Event
affecting the other Party continuing for a period of more
than 60 (sixty) days."
CS(COMM) 268/2019 Page 12 of 25
9. The senior counsel for the plaintiff contends that the negative
covenants which the plaintiff is enforcing by this suit are contained in
Clauses 5.5 and 5.9 of the Agreement by use of the words "......without any
disruption, interruption and interference....". It is argued that the defendant
having agreed to supply and deliver its creative content to the platform of
the plaintiff and having further agreed to not cause any disruption,
interruption or interference therewith, can be restrained by a decree of
permanent injunction as sought, from so refusing to supply its creative
content for viewership by the customers of the plaintiff on the platform of
the plaintiff. It is further contended that the defendant, without even
terminating the Agreement, is causing interruption, disruption and
interference in supply and delivery of creative content and the plaintiff is
entitled to a decree for permanent injunction for restraining the defendant
from causing interference, disruption and interruption in supply and delivery
of creative content.
10. The senior counsel for the plaintiff, on enquiry, states that the plaintiff
was getting the entire content in terms of the Agreement, till 17th April,
2019, whereafter the defendant has stopped supplying the entire content.
11. Per contra, the senior counsel for the defendant has argued that, (a)
the plaintiff, in the garb of permanent and mandatory injunction, is seeking
the relief of specific performance, without even paying the requisite court
fees therefor; reliance in this regard is placed on Mujeeb Rehman Vs.
Mohd. Nabi 2017 SCC OnLine Del 11393; (b) the plaintiff in the plaint has
admitted withdrawal by the defendant of all the content of the defendant
from the platform of the plaintiff, thereby admitting the termination of the
CS(COMM) 268/2019 Page 13 of 25
Agreement; (c) attention is invited to the communication dated 13th March,
2019 of the defendant to the plaintiff intimating the plaintiff of the
defendant‟s desire to withdraw the Agreement on account of the same being
unworkable; attention is also invited to the communication dated 26 th April,
2019 of the defendant to the plaintiff referring to the communication dated
13th March, 2019 and it is argued that the plaintiff also understood the
Agreement to have been terminated by the defendant; (d) the Agreement is
not specifically enforceable owing to the bar contained in Section 14(b) and
(d) of the Specific Relief Act, 1963 since it entails performance of a
continuous duty which the Court cannot supervise and because the contract
contained in the Agreement is in its nature determinable; attention is invited
to Clause 11 supra of the Agreement which provides for termination thereof;
(e) on enquiry, whether not Clause 11 provides for termination of the
Agreement only in the eventualities mentioned therein and not otherwise at
the wish of the parties, and whether from such a clause it can be said that the
contract by its nature is determinable, it is stated that such a clause does not
affect the determinability of the agreement; reliance is placed on Rajasthan
Breweries Ltd. Vs. The Stroh Brewery Company 2000 (55) DRJ (DB) and
on Turnaround Logistics (P) Ltd. Vs. Jet Airways (India) Ltd.
MANU/DE/8741/2006; (f) there is no balance of convenience or irreparable
loss to the plaintiff by termination of Agreement and there are no pleadings
also to the said effect; (g) Section 41(e) of the Specific Relief Act bars the
grant of injunction to prevent the breach of a contract the performance of
which would not be specifically enforced; (h) since the contract is not
specifically enforceable owing to the bar of Section 14(b) and (d), no
injunction also for breach by the defendant of the Agreement can be granted;
CS(COMM) 268/2019 Page 14 of 25
(i) the argument that the plaintiff by this suit is enforcing a negative
covenant is also not correct; reliance is placed on Yogesh Radhakrishnan
Vs. Media Networks & Distribution 201 (2013) DLT 773 to contend that
Clauses 5.5 and 5.9 of Agreement do not constitute a negative covenant
within the meaning of Section 42 of the Specific Relief Act; (j) though the
suit itself is not maintainable, but even if were held to be maintainable, the
plaintiff is not entitled to the interim relief claimed which is the same as the
final relief; reliance is placed on Bank of Maharashtra Vs. Race Shipping
& Transport Co. Pvt. Ltd. (1995) 3 SCC 257 deprecating the practice of
granting interim orders which practically give the principal relief sought; (k)
the entitlement of the plaintiff if any is only to damages for breach of
contract and the plaintiff also, being conscious of the same, has applied
under Order II Rule 2 of the CPC to subsequently sue for the relief of
damages; (l) on enquiry, whether not there is also an element of public
interest in the customers of the plaintiff being not deprived of watching the
creative content of the defendant on the platform of the plaintiff, it is
contended that the Agreement in any case was for a period of one year only
and whereafter the customers of the plaintiff in any case would be deprived
of the said creative content of the defendant unless the defendant agreed to
continue to supply and deliver such creative content to the plaintiff; it is also
contended that the programmes / serials mostly run for more than a year and
thus there was no public interest in entering into the Agreement for a period
of one year only; it is further contended that the said customers, after 27th
September, 2019 or now, will have an option to shift to another platform
including of the defendant or of others to whom the defendant is so
supplying the creative content; and, (m) on enquiry, whether not the plaintiff
CS(COMM) 268/2019 Page 15 of 25
must have arranged its affairs till 27th September, 2019 on the premise of the
creative content of the defendant continuing to be available to the plaintiff,
and upon refusal of the defendant to so supply the creative content, will be
left high and dry without any creative content, it is argued that the plaintiff
has not even pleaded that it has no other content to replace the content which
was to be supplied by the defendant; it is argued that the plaintiff, on its
platform has content available from Hungama.com, T-Series and Sony Live
as well as plaintiff‟s own substantive content, the plaintiff being a part of the
Times of India Group.
12. Both the senior counsels also drew attention to Clause 5.10 of the
Agreement providing that if at all any time during the term of the
Agreement any programme was not made accessible by the defendant to the
plaintiff, the licence period shall stand automatically extended for such
period for which the programme remained unavailable to the plaintiff.
While the senior counsel for the plaintiff contended that the same shows that
the creative content agreed to be provided was to be provided in any case,
the senior counsel for the defendant contends that the same demonstrates
that time was not of the essence. It is argued that even if interim injunction
is not granted but ultimately it is found that the content was to be so
provided by the defendant to the plaintiff, it can be so ordered to be
provided after final adjudication of the suit.
13. The senior counsel for the defendant, with reference to Clause 7 titled
"Consideration" of the Agreement providing for the licence fee of Rs.12
crores payable in two tranches, of Rs.6 crores at the time of entering into the
Agreement and the balance Rs.6 crores after six months, has contended that
CS(COMM) 268/2019 Page 16 of 25
the defendant, on the expiry of six months, informed its intent to the
plaintiff.
14. The senior counsel for the plaintiff, in rejoinder (i) drew attention to
para no.10 of the plaint to contend that the plaintiff therein has pleaded
"...that considering the business plans of the plaintiff for any period are
devised basis the quantum of content available or anticipated by the plaintiff
from its content partners like, defendant in the instant case, any unexpected
deviation from an agreed understanding with any content partner adversely
affects its business plans, viewership, programming and other commercial
aspects of the plaintiff‟s business" and also to para no.13 of the plaint where
the plaintiff has pleaded that deprivation of the creative content agreed by
the defendant to be provided would have long-term monetary as well as
business repercussions to the plaintiff; (ii) drew attention to the
communication dated 12th April, 2019 of the defendant to the plaintiff
enquiring when the episodes launched by the defendant of "Dil Hi Toh Hain
Season 2" and "Kehne Ko Humsafar Hain Season 2" would be live on the
platform of the plaintiff, to contend that the defendant, after 31st March,
2019 also was treating the Agreement as subsisting and it is now wrongly
argued that the defendant in the beginning of March, 2019 only had given
notice to the plaintiff of termination of the Agreement with effect from 31 st
March, 2019; (iii) argued that the plaintiff is not asking for specific
performance because the creative content which the defendant has already
delivered / given to the plaintiff cannot be taken back by the defendant and
the plaintiff is thus seeking permanent injunction against the defendant to
restrain the defendant from doing so and is claiming mandatory injunction
CS(COMM) 268/2019 Page 17 of 25
with respect to the new content which also the defendant under the
Agreement had agreed to provide / deliver; and, (iv) argued that the negative
covenant, besides in Clauses 5.5 and 5.9, is also contained in Clause 5.7,
also providing that the defendant shall implement the Agreement without
any hinderance. On enquiry whether there was any plea in the plaint, of the
suit being to enforce the negative covenant, it is argued that the said plea is
to be found in para 9 and last part of para no.10 of the plaint, though "not
very happily worded".
15. I have considered the rival contentions.
16. In Mujeeb Rehman supra cited by the senior counsel for the plaintiff,
I was concerned with the question whether relief in the nature of
enforcement of contractual obligations can be claimed by seeking a
mandatory injunction. It was held that (i) the law relating to specific
performance as well as relating to injunctions is contained in the Specific
Relief Act but which deals with the two separately; (ii) to hold that the
plaintiff has a choice, either to sue for specific performance or to sue for
mandatory injunction, would result in defeating the legislative scheme
contained in the Specific Relief Act as well as in the Court Fees Act, 1870
and in Suits Valuation Act, 1887, separately providing for the reliefs of
specific performance and injunctions; and, (iii) a relief in the nature of
specific performance cannot be claimed by seeking the relief of injunction
and if was claimed, the plaint would be liable to be rejected.
17. The plaintiff herein has not only not claimed the relief of specific
performance but chosen to claim reliefs of injunction and valued the said
CS(COMM) 268/2019 Page 18 of 25
reliefs accordingly, but the senior counsel for the plaintiff also expressly
states that the plaintiff is not suing for specific performance.
18. However the relief which the plaintiff is claiming and which as per
the terms of the Agreement is the remedy in law of the plaintiff, is of
specific performance and which has not been claimed. The argument that
the defendant is sought to be restrained by a decree of permanent injunction
from taking back what it has already delivered / given to the plaintiff in
pursuance of the Agreement, cannot be accepted. A bare reading of the
Agreement shows that such delivery was not in a tangible form i.e. in the
form of a tape recording or recording on a compact disk or a hard drive or in
any other medium, but by giving by the defendant a right to the plaintiff to
integrate, incorporate and embed the creative content of the defendant in and
with the Licensed Platform and cache the meta data of the programmes on
the plaintiff‟s servers. Thus for the said creative content to be continued to
be delivered / provided by the defendant to the plaintiff, the defendant was
required to, for the period of the contract, continue to allow such integration
and which required performance of a continuing obligation. Thus the
creative content of the defendant, which in the past may have been available
to the plaintiff would cease to be so available on the defendant ceasing to
perform its obligation. Similarly, for the plaintiff to be entitled to additional
programmes i.e. the programmes of the defendant not existing on the date of
the Agreement, the defendant was required to continuously allow / permit
integration thereof with its servers to enable the plaintiff to integrate with
the server of the defendant. The remedy of the plaintiff thus, for breach by
the defendant of the Agreement, was / is of specific performance, which has
CS(COMM) 268/2019 Page 19 of 25
not been claimed. The contention of the senior counsel for the defendant, of
the suit filed for the reliefs of specific performance in the garb of injunction
being not maintainable, has to prevail.
19. While allowing specific performance, injunction can be issued; but
where the remedy in law is found to be of specific performance and which
has not been claimed, injunction cannot be granted.
20. It is for this reason only that Section 41(e) supra bars grant of
injunction to prevent breach of contracts which are not specifically
enforceable.
21. One of the arguments of the senior counsel for the defendant relying
on Rajasthan Breweries Ltd. supra is that the contract between the parties
was determinable and when it is so, it is not specifically enforceable.
22. In Rajasthan Breweries Ltd. supra, the Division Bench of this Court,
noticing that the Agreement subject matter before them permitted
termination at the occurrence of any of the events mentioned therein, held
that all revocable deeds and voidable contracts may fall within the
determinable contracts and the principle on which specific performance of
such an agreement would not be granted is, that the Court will not go
through the idle ceremony of ordering execution of a deed or instrument
which is revocable at the will of the executant. Reliance was placed on
Indian Oil Corporation Ltd. Vs. Amritsar Gas Service (1991) 1 SCC 533
and on Classic Motors Ltd. Vs. Maruti Udyog Ltd. (1997) 65 DLT 166. In
Turnaround Logistics (P) Ltd. supra also, it was held that even if the
determination of the agreement between the parties was not in accordance
CS(COMM) 268/2019 Page 20 of 25
with the terms and condition on which the Agreement was terminable, it will
only entitle a party for damages and not specific performance.
23. Though I am bound by the judgments aforesaid, but entertain
reservations. In my view, the meaning which is required to be given to
Section 14(d) is, that only where the agreement is determinable at the whim
of either party i.e. without any reason also, is specific performance thereof
barred. Holding that even those agreements which provide for termination
in specific eventualities, cannot be specifically enforced even if are
terminated without such eventuality occurring, would lead to a situation
where no agreement would be specifically enforceable making the part
relating to specific performance of the Specific Relief Act redundant. Thus
in my view where the agreement which is otherwise specifically enforceable
is terminated on the ground of any of the eventualities in which termination
was permitted occurring, it is for the Court to decide whether such
eventuality has occurred or not and if finds the eventuality to have not
occurred, shall be entitled to grant specific performance. I am supported in
this view by the judgments of this Court in Upma Khanna Vs. Tarun
Sawhney 2012 SCC OnLine Del 2716 (DB), Ascot Hotels and Resorts Pvt.
Ltd. Vs. Connaught Plaza Restaurants Pvt. Ltd. (2018) 249 DLT 329 and
Brokers & Brokers Pvt. Ltd. Vs. Om Prakash Bhola (2007) 143 DLT 736
[Section 14(d), prior to the amendment of the year 2018 to the Specific
Relief Act, was Section 14(1)(c)].
24. That brings me to the question, whether the plaintiff is entitled to
injunction to the defendant to perform the negative covenant.
CS(COMM) 268/2019 Page 21 of 25
25. Section 42 of the Specific Relief Act permits such injunction where
the contract "comprises an affirmative agreement to do a certain act, coupled
with a negative agreement, express or implied, not to do a certain act". I
have in Yogesh Radhakrishnan supra cited by the senior counsel for the
defendant, held as under:
"30. I am unable to subscribe to the contention of the Senior
Counsel for the plaintiff that the purport of Section 42 of the
SRA is to make agreements which by their very nature are not
enforceable, enforceable. The negative covenant,
enforcement whereof is provided for in Section 42 of the SRA
has to be distinct from the Agreement which is found to be
not enforceable. Section 42 of the SRA provides for a
situation where even though the agreement may be found to
be specifically not enforceable but the defendant has
separately agreed not to do a certain act and permits grant of
an injunction restraining the defendant from doing that act. It
cannot be interpreted as making the agreement which is non
enforceable, enforceable. In fact during the hearing, it was
enquired from the senior counsel for the plaintiff whether
merely by providing in the contract that the same shall not be
terminated, the same can be made specifically enforceable
even though not permitted so under Section 14 of the SRA.
No plausible answer was forthcoming. If Section 42 of the
SRA were to be read in such a manner, it would amount to
making of contracts specifically enforceable notwithstanding
CS(COMM) 268/2019 Page 22 of 25
the provisions of the SRA. The classic example which can be
given of Section 42 of the SRA is of a singer who though
cannot be forced to sing for the plaintiff for whom he / she
has agreed to sing, but if has agreed not to sing for the said
duration of the agreement with the plaintiff for any other
person, can be restrained from so singing. However Section
42 of the SRA cannot be invoked for preventing termination
of a contract which is terminable by its very nature. Section
42 of the SRA will have no application where the positive and
negative covenants have the same effect. Mention may be
made of Shree Ambarnath Mills Corporation Vs. D.B.
Godbole AIR 1957 Bom. 119 where a Division Bench of the
Bombay High Court observed that the negative covenant
must be distinct from the affirmative agreement, otherwise
breach of every affirmative agreement would be restrained by
an injunction even if the Court is unable to compel specific
performance of the affirmative covenant.
34. The suit for injunction is thus found to be not
maintainable and is dismissed. The matter having been
examined for this limited purpose, any observation made will
not come in the way of the plaintiff / defendant No.1 claiming
relief of damages or any other relief to which they may be
entitled. However in the facts, no costs."
26. It is the contention of the senior counsel for the defendant that in the
present case there is no negative agreement not to do a certain act, separately
CS(COMM) 268/2019 Page 23 of 25
from the affirmative agreement to do a certain act; there is only an affirmative
agreement to, without any disruption, interruption and inference, continue to
supply creative content and the case is not covered by Section 42 of the
Specific Relief Act.
27. Merit is again found in the contention of the senior counsel for the
defendant, which prevails. Section 42 of the Specific Relief Act is attracted
where though the agreement to do something is not specifically enforceable,
but to prevent the defendant from dishonestly and for the sake of better
commercial exploitation not doing that thing, the defendant has also agreed to
not do something other than that agreed. Reference in this regard may also be
made to Vinod Chandra Hiralal Gandhi Vs. Vivekanand Mills Ltd.,
Ahmedabad AIR 1967 Guj 255 (DB) and Urmila & Co. Pvt. Ltd. Vs. J.M.
Baxi & Co. AIR 1986 Del 336, which remained to be noticed in Yogesh
Radhakrishnan supra.
28. It is not as if in the present case the creative content to be supplied /
delivered by the defendant to the plaintiff, if not delivered, was coupled with a
covenant restraining the defendant from delivering it to a competitor of the
plaintiff. In fact, the Agreement expressly records the delivery to be on a non-
exclusive basis and the counsels during the hearing also informed that the same
creative content, besides on the platform of the defendant, is also available on
other platforms during the time of the agreement and even now. Thus no case
for injunction under Section 42 of the Specific Relief Act also is made out.
29. The purport of the findings aforesaid is, that the suit filed is not
maintainable. Once it is so, the need to keep the suit pending is not felt.
CS(COMM) 268/2019 Page 24 of 25
30. The suit is dismissed with costs. Professional fee assessed at Rs.2 lacs.
Decree sheet be drawn up.
31. The plaintiff shall however be entitled to claim any other remedy to
which it may be entitled to from the actions impugned of the defendant.
RAJIV SAHAI ENDLAW, J.
MAY 23, 2019 „bs/gsr‟ (Corrected & released on 2nd July, 2019) CS(COMM) 268/2019 Page 25 of 25