Gauhati High Court
Star India Ltd. vs Arup Borah And Ors. on 18 December, 2002
Equivalent citations: 2003(2)ARBLR202(GAU), (2003)1GLR619
Author: Ranjan Gogoi
Bench: Ranjan Gogoi
JUDGMENT Ranjan Gogoi, J.
1. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 is directed against an ex parte order of mandatory injunction dated 8.10.2002 passed by the learned District Judge, Sonitpur, Tezpur in Misc (Arb) Case No. 178/2002. By the aforementioned order dated 8.10.2002, the appellant, who was impleaded as the defendant No. 1 in the proceedings before the learned Court below, has been directed to re-activate/re-connect the Star Plus, Star World, Star Movie and National Geography Channels to the principal respondent (herein 'the plaintiff) until the disputes between the parties are resolved through amicable negotiation or arbitration as per Clause 23 of the Contract Agreement executed by and between the parties.
2. The brief facts may be noticed as hereunder :
The principal respondent in the present appeal filed an application dated 5.10.2002 in the Court of the learned District Judge, Sonitpur under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") stating, inter alia, that the appellant, (the defendant No. 1) was engaged in the business of providing T. V. Channel services to customers including the Cable Operators. The pro forma respondents herein were described as the agents of the appellants. According to the principal respondent/ plaintiff, the plaintiff as one such subscriber and Cable Operator under the defendants at Tezpur was availing of the services of the defendants and making available various T.V. Channels like Star Plus, Star Movie, Star World and National Geography Channels to the various consumers by providing cable lines to them. The plaintiff in the application filed, further stated that the customers/consumers were required to pay monthly service charge to the plaintiff and the plaintiff, in turn, was required to pay charges, as per the agreement, to the defendants for the facilities provided.
According to the plaintiff, he had been engaged in the said business since the year 1998 on the basis of a written agreement renewed from time to time. According to the plaintiff, the defendants had fixed 500 as the number of customers/consumers in so far the plaintiff is concerned and he was required to make payment to the defendants on the aforesaid basis every month as per the contract agreement in force. The plaintiff, in the application filed, has alleged that the number of customers/consumers fixed for him by the defendant at 500 was too high and at his request, the number was brought down to 400 by mutual discussion. In the application filed before the learned Court below, the plaintiff had further alleged that the defendants had on several occasions, arbitrarily increased the number of customers/ consumers of the plaintiff there by compelling the plaintiff to pay higher/additional amounts by way of service charges.
It is the further case of the plaintiff, as stated in the application filed, that on 9.9.2002, the plaintiff received a letter from the defendant No. 1 asking the plaintiff to pay for 1800 subscribers failing which the services provided to the plaintiff were threatened with de-activation and/or disconnection. According to the plaintiff, mutual discussion took place and the defendants agreed to reduce the number of customers from 1800 to 1500 and had asked the plaintiff to make payment on that basis. The plaintiff did not agree to the said proposal and instead, asked for a survey to be conducted by both the parties to determine the number of consumers/customers of the plaintiff. The plaintiff has alleged that on 4.10.2002, the defendants deactivated or disconnected the Star T. V. and other T. V. Channels made available to the plaintiff and as the said act is not only illegal but also had the effect of causing great inconvenience to the plaintiffs consumers/customers apart from putting the plaintiff to irreparable loss and harm, immediate ex parte intervention of the learned Court below was prayed for by grant of interim mandatory injunction for restoration of T. V. Channels which were de-activated and/or disconnected by the defendants.
3. Misc (Arb) Case No. 178/2002 was registered in the Court of the learned District Judge, Sonitpur, on the basis of the aforesaid application filed. The learned District Judge by order dated 8.10.2002, on the grounds and reasons recorded, thought it proper to grant an ex parte mandatory injunction and directed the defendants to re-activate or re-connect the T. V. Channels in question to the plaintiff, aggrieved, the instant appeal has been filed.
4. Mr. D.K. Misra, learned Sr. Counsel appearing for the appellant, assailing the order passed by the learned Court below, has placed before the Court the relevant clauses of the Contract Agreement between the parties, i.e., Clauses 14, 16 and 24 to contend that the instant contract, as evident from the aforesaid clauses, is determinable in nature. It is so determinable on the happening of the events contemplated as well as on the volition of either of the parties by giving 30 days notice. The contract, therefore, cannot be specifically enforced in view of the bar under Section 14(1)(c) of the Specific Relief Act, 1963. According to the learned counsel, no injunction could, therefore, be granted by the learned Court below in view of the provisions of Section 41(e) of the said Act. The order of the learned District Judge is, therefore, wholly without jurisdiction and needs to be interfered with, it is argued. Reliance in this regard has been placed by the learned counsel on a decision of the Apex Court in the case of Indian Oil Corporation Ltd. v. Amritsar Gas service and Ors., reported in (1991) 1 SCC 533. Another decision of the Apex Court in the case of Her Highness Maharani Shantidevi P. Gaikwad v. Savjibhai Haribhai Patel and Ors., reported in (2001) 5 SCC 101 and a judgment of the Delhi High Court in the case of Rajasthan Breweries Limited v. Stroh Brewery Company, reported in AIR 2000 Delhi 450 has also been pressed into service on behalf of the appellant.
Learned counsel has further argued that the order dated 8.10.2002 passed by the learned. District Judge is a highly cryptic order not disclosing any consideration of the relevant principles that a Court is obliged to take into account while granting or refusing injunction mandatory in nature. Existence of a very strong prima facie case which is required for grant of mandatory injunction, has not been considered so also the question as to why the plaintiff cannot be compensated in terms of the money. Learned counsel by relying on the judgment of the Apex Court in the case of Dorab Cawasji Warden v. Coomi Sorab Warden and Ors., reported in (1990) 7SCC 117, has contended that not only the relevant principles governing the grant of mandatory injunction have been ignored but even assuming the facts as pleaded to be correct, the requirements laid down by the Apex Court, are not present in the facts of the instant case so as to justify the mandatory injunction granted by the impugned order dated 8.10.2002.
5. Mr. K.N. Choudhury, learned Sr. Counsel appearing for the principal respondent in the appeal has sought to controvert the arguments advanced on behalf of the appellant by contending that Section 14(1)(c) and Section 41(e) of the Specific Relief Act would have no application to the present case. The Contract Agreement between the parties is one relating to sale of movable property, though described as a subscription-cum-loan agreement. It is essentially an agreement to receive signals which after being decoded are converted into Electro-Magnetic Waves which are received by the cable operators for being beamed in the form of pictures to the consumers, through their T. V. sets. The contract, therefore, is one for sale and purchase of coded information supplied by the appellants to the principal respondents who had a right to decode the same and thereafter transmit, in the form of pictures, to the different subscribers. The contract, therefore, visualises the sale of goods which are movable. It is not a contract to render any personal service and, therefore, what would be applicable are the provisions of Section 7 read with Section 10 of the Specific Relief Act and not Sections 14 and 41 of the said Act, as contended on behalf of the appellant. The contract agreement between the parties would be specifically enforceable under Section 10 of the Specific Relief Act as according to the learned counsel the property involved is not an ordinary article of commerce easily obtainable in the market. Therefore, there exists no known standard for ascertaining the actual damage that may be caused by the actions of the defendants in the de-activating or disconnecting the T.V. Channels. In this regard, Mr. Choudhury has placed reliance on a judgment of the Madhya Pradesh High Court in the case of Jabalpur Cable Network Pvt. Ltd. v. E.S.P.N. Software India Pvt. Ltd. and Ors., reported in AIR 1999 MP 271.
It has been further argued on behalf of the principal respondent that the question as to whether the agreement is specifically enforceable or not is a question that has to be determined at the conclusion of the arbitration proceedings that will be initiated as per the arbitration clause, i.e., Clause 23 of the Contract Agreement, The matter should therefore be left to the determination of the Arbitrator and this Court should not pre-judge the same.
It has further been argued on behalf of the principal respondent that the power to grant injunction under Section 9(e) of the Arbitration and Conciliation Act, 1996 would be much wider than the power under Order 39, Rules 1 and 2 of the Code of Civil procedure and viewed from the aforesaid perspective, no infirmity can be found in the order dated 8.10.2002 passed by the learned trial Court.
6. To consider the tenability of the arguments advanced on behalf of the rival parties, it will be necessary for this Court to turn to the respective case laws relied upon by the learned counsels in support of the arguments made.
In the case of Indian Oil Corporation v. Amritsar Gas Service (supra), the question was whether the Arbitrator was right, in ordering for restoration of a distributorship after holding that the agreement though determinable in nature was not validly terminated under the relevant clauses of the Contract Agreement. The Apex Court in that case laid down that as the Arbitrator had held the contract to be determinable in nature, even on finding that the contract was not determined in accordance with the clauses providing for such determination, the Arbitrator would not be entitled to order for restoration of the status of the parties prior to termination in view of the specific bar contained in Section 14(1)(c) of the Specific Relief Act. The remedy of the aggrieved party and the power of the Court, in the event the recission of the contract is held and found to be contrary to the terms of the contract providing for such recission, is to seek and grant damages, by way of compensation. The rationale behind the Legislative bar to specific enforcement of a contract determinable in nature, appears to be that the Court can never be understood to issue futile writs. An order of the Court specifically enforcing a contract can be immediately set at naught by the parties by determining the same in accordance with the relevant clauses providing for such determination. This is the basis on which the Legislative bar to specific performance of the contract determinable in nature, appears to have been made.
Adverting to the facts of the present case, there is hardly any doubt that the contract between the plaintiff and the defendants is determinable in nature. The same is so determinable on the happening of certain contingencies by giving of notice by other side or even in the absence of any of contemplated contingencies by either of the parties on their own volition, by giving 30 days notice. This is abundantly clear from Clause 16 of the Contract Agreement, Applying the law laid down by the Apex Court in the case of Indian Oil Corporation (supra) as the instant contract is determinable in nature, the bar under Section 14(1)(c) of the Specific Relief Act would come into play and as the said contract would not be specifically enforceable, no injunction could be granted to enforce the same in view of the provisions of Section 14(e) of the said Act.
The judgment of the Madhaya Pradesh High Court in the case of Jabalpur Cable Network Pvt. Ltd. (supra) relied upon by the learned counsel for the principal respondent however strikes a somewhat discordant note. The facts on which the Madhya Pradesh High Court in the above case held the contract agreement between the parties to be essentially one relating to sale of movable properly have not been pleaded in the present case but we may assume the same for the benefit of the respondent-plaintiff. Even assuming the said facts in favour of the principal respondent, I am constrained to respectfully disagree with the views of the Madhya Pradesh High Court. While the assumption of the facts as stated above, though not pleaded, would being the facts of the present case at par with those of Jabalpur Cable Network Pvt. Ltd. (supra), the judgment in that case, with great respect, appears to have overlooked the opening words of Section 10, i.e., "Except as otherwise provided in the Chapter" which expression must be understood to mean that when a specific bar has been imposed by any of the provisions contained in Chapter-II of the Specific Relief Act, the specific performance of a contract cannot be granted by a resort to the provisions of Section 10 of the said Act. That apart, the Madhaya Pradesh High Court in the above case had no occasion to consider the decision of the Apex Court in the case of Indian Oil Corporation Ltd. (supra). The additional argument advanced on behalf of the principal respondent is that as the Apex Court in the case of Indian Oil Corporation Limited (supra) did not deal with and interpret, Sections 7 and 10 of the Specific Relief Act, the said judgment of the Apex Court must be understood in its limited perspective. The argument is apparently fallacious for the simple reason that in view of the limited application of Section 10 of the Specific Relief Act because of the inbuilt restrictions contained in the said section, no fundamental change in the conclusion with regard to the applicability of Section 14(1)(c) to a contract determinable in nature, can be visualised.
7. In view of the conclusion reached by this Court that the instant Contract Agreement between the parties would not be specifically enforceable on account of the bar contained in Section 14(1)(c) of the Specific Relief Act and, therefore, no injunction could have been issued by the learned trial court in view of the prohibition contained in Section 14(e) of the said Act, this court does not consider it necessary to go in to the second question raised on behalf of the appellant, i.e., that the order of injunction is not supported adequate and cogent grounds and is therefore not tenable in law. This Court therefore expresses no opinion on the aforesaid question raised beyond what follows from the conclusions reached on the first issue.
8. In view of the foregoing discussions and for the reasons recorded, this appeal will have to be allowed and it is accordingly allowed. The order dated 8.10.2002 passed by the learned District Judge, Sonitpur, Tespur in Misc. (Arb) Case No. 178/2002 is hereby set aside and quashed.