Delhi District Court
Pioneer Publicity Corporation Pvt Ltd vs M/S Fiitjee Ltd on 10 May, 2023
IN THE COURT OF DISTRICT JUDGE
(COMMERCIAL COURT2)
SOUTH DISTRICT, SAKET COURTS: NEW DELHI
(1) OMP (Comm) 14/2020
Pioneer Publicity Corporation Pvt ltd. ........Petitioner
Having its registered office at
Pioneer House, Plot No. 6,
Block no. 2 C, New Rohtak Road,
WEA, Karol Bagh New Delhi110005
versus
M/s FIITJEE LTD. ........Respondent
FIITJEE House, 29A, Kalu Sarai
Sarvapriya Vihar, New Delhi
AND
(2) OMP (Comm) 18/2020
M/s FIITJEE LTD. ...........Petitioner
FIITJEE House, 29A, Kalu Sarai
Sarvapriya Vihar, New Delhi
versus
Pioneer Publicity Corporation Pvt ltd. ........Respondent
Pioneer House
2C/6, New Rohtak Road, Karol Bagh
Near liberty Cinema, Delhi110005
Date of Institution : 05.08.2020
Arguments concluded : 09.05.2023
Date of Judgment : 10.05.2023
Appearance
Sh. Ramesh Kumar counsel for PIONEER.
Sh. Sandeep Sharma counsel for FIITJEE.
Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020)
M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 1 of 26
JUDGMENT
1. This common Judgment shall dispose of two petitions U/s 34 of Arbitration & Conciliation Act, 1996 (hereinafter referred as "A&C Act") arising out the award dated 11.01.2020 passed by Ld. Sole Arbitrator. First petition (OMP (Comm) 14/2020) is filed by M/s Pioneer Publicity Corporation Pvt Ltd. (hereinafter referred to as 'Pioneer') against M/s FIITJEE Ltd and second petition (OMP (Comm) 18/2020) is filed by M/s FIITJEE Ltd (hereinafter referred to as 'FIITJEE') against Pioneer. Ld. Tribunal partly allowed claim of the Pioneer and dismissed the counter claim of FIITJEE. Both the parties have taken recourse petition u/s 34 of A & Act for seeking setting aside the award.
1.1 In brief, background facts of case are that claimant - Pioneer deals in outdoor advertisement, who acquired the naming rights of 23 stations for 10 years from Delhi Metro Rail Corporations Ltd. (hereinafter referred to as DMRC) and one of the stations, where Pioneer acquired naming rights from DMRC was, IIT Metro station. FIITJEE showed interest in display of its name as advertisement at IIT Metro Station. After deliberations, a licence agreement dated 11.01.2018 was executed between Pioneer and FIITJEE for semi-naming rights to display advertisement at entire IIT Metro Station and branding IIT Metro Station as "FIITJEE-IIT Metro Station".
1.2 It is stated that in terms of the licence agreement, FIITJEE acquired advertising licence for a period of 10 years at a Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 2 of 26 monthly licence fee of Rs. 16,00,000/- plus taxes payable on or before 10th day of each month post month of completion of station. Licence deed provided a lock-in-period of two years after which the FIITJEE was entitled to terminate the contract by serving 3 months notice. FIITJEE agreed to pay one time fabrication charges.
1.3 As agreed between the parties, a semi branding advertising described as FIITJEE-IIT was fabricated and was fixed at suitable places at IIT Metro Station as desired by it . The licence fee for such advertisement was payable w.e.f 28.05.2018, the date the IIT Metro Station was to become operational. Branding of IIT Metro station as FIITJEE-IIT Metro station sparked a controversy as IIT Delhi raised an issue that branding of the IIT metro station as FIITJEE-IIT Metro station was intended to mislead the IIT aspirants and the co-branding had the effect of passing of the name of the FIITJEE, as an associate of IIT Delhi. IIT filed a writ petition WP (C) No. 5708/2018 in High Court of Delhi against Pioneer, FIITJEE and DMRC. 1.4 Vide order dated 10.07.2018, writ petition was disposed off with the direction be displayed and disclaimer "FIITJEE is in no way connected to any IIT"and the font of disclaimer should be of same font and size as that of FIITJEE. FIITJEE preferred a a review petition, which was dismissed vide order dated 10.08.2018. Thereafter, an LPA filed by FIITJEE against the order dated 10.07.2018 was also dismissed. FIITJEE started blaming Pioneer for display of the said disclaimer as it wanted to display that "FIITJEE has no business association with Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 3 of 26 IITDelhi" but the High Court did not approve of it. 1.5 Pioneer vide email dated 24.09.2018 intimated the FIITJEE that in case, license fee was not paid within 15 days, it will be constrained to terminate the license agreement. The FIITJEE in its reply email dated 25.09.2018 objected to the revocation of license agreement and did not make payment of the outstanding amount but at the same time wanted the Contract to continue. Thereafter, claimant/Pioneer filed a petition under Section 11(6) of The Arbitration and Conciliation Act, before Hon'ble High Court of Delhi. It was conveyed that the license agreement shall stand terminated w.e.f. 28.11.2018 and upto that date, FIITJEE was liable to pay the license fee and outstanding license fee @ Rs.70,14,400/ and fabrication charges of Rs.47,01,120/ besides interest, litigation charges and cost were claimed before the learned Arbitrator Sh. G.P. Thareja appointed by the Hon'ble High Court vide order dated 13.03.2019. 1.6 Vide Award dated 29.01.2018 passed by Ld. Tribunal, Pioneer was awarded license fee upto 27.09.2018, but license fee was not awarded for a period of 2 months w.e.f. 28.09.2018 to 29.11.2018. Against this rejection of 2 months license fee, Pioneer preferred petition under Section 34 of The A & C Act.
2. The counter claim filed by FIITJEE was dismissed. FIITJEE filed counter claim before the learned Arbitrator for (i) refund of license fee of Rs.54,14,400/ already paid to Pioneer;
(ii) compensation of Rs.20,00,000/; (iii) litigation cost of Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 4 of 26 Rs.15,00,000/; (iv) loss of profit of Rs.25,00,000/ and (v) Rs.10,00,000/ for cost of reputation. FIITJEE also challenged the award under Section 34 of The Arbitration and Conciliation Act for dismissal of its counter claims.
3. This Court has heard submissions advanced by Sh. Ramesh Kumar Ld. Counsel appearing for Pioneer and Sh. Sandeep Sharma with Ms. Konika Ld. Counsels appearing for FIITJEE and has perused the record carefully.
4. Ld. Counsel for FIITJEE submitted that vide the Agreement dated 11.01.2018, Pioneer had given the seminaming rights of the lIT Metro Station to it for a period of 10 years and thereby agreed to naming of the metro stations as "FIITJEE IIT". It is submitted that the email dated 02.05.2018, written by IIT shows that IIT had strong reservations against the branding of the IIT metro station, particularly with any coaching institution and the same was duly brought to the knowledge of DMRC. In reply to the aforesaid email dated 02.05.2018, email dated 04.05.2018 had been written by DMRC to IIT stating the modification of the branding at the IIT Metro Station or the underlying agreement shall have huge financial implications and the same shall be done only if the IIT was willing to bear the financial implication. IIT, thereafter, in reply vide email dated 12.05.2018, informed DMRC that if DMRC was not modifying the signages at IIT Metro Station, a court case shall be instituted by DMRC. It is contended that the Pioneer failed to explain as to why such infrastructure work was undertaken by the Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 5 of 26 Respondent/Pioneer despite the reservations raised by IIT and particularly, without bringing the same to the knowledge of the FIITJEE. It is submitted that in view of Clause 11 of the Agreement, being bound by the lock in period of the 2 years, FIITJEE was not in the position to terminate the Agreement and hence, believing that the Pioneer would infact continue further the agreement with the same terms till the date, it continued to fulfill its obligations of payment under the agreement. It is submitted that FIITJEE in the interest of the agreement took measures to mitigate losses and preserve the agreement. It is submitted that disclaimer in the first place had been put on the signages without the consent of the FIITJEE and hence amounted to breach of agreement and therefore, it is entitled to damages. 4.1 Sh. Sandeep Sharma, Ld. Counsel for FIITJEE submitted that Ld. Arbitrator ignored the provisions of Clause 11 of the Agreement, which provided for two years of lock in period and that the Pioneer had no option to terminate the Agreement before expiry of the said period. It is submitted that Ld. Arbitrator wrongly observed that the Pioneer intended to proceed with the Agreement in spite of the alleged anticipatory breach and paid the license fee for the same. It is contended that this is contrary to the facts of the case, as the Pioneer had categorically consented to honouring the terms of the Agreement and Ld. Arbitrator ignored the emails exchanged between the parties and the bona fide efforts of the Pioneer to mitigate the losses.
Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 6 of 26 4.2 Ld. Counsel for FIITJEE argued that Ld. Sole Arbitrator erred in holding that the breach committed by the Pioneer was ratified by the Order of the Hon'ble High Court. It is submitted that the disclaimer had been put on the signage even prior to the passing of judicial order and counsel for DMRC pointed out on 10.07.2018 that disclaimer had been already put on the signages. It is submitted that the directions to the effect had been passed by the Hon'ble High Court for the first time on 10.07.2018, while admittedly the disclaimer had been put on the signages prior 27.05.2018, without the consent of the FIITJEE . It is averred that the case of the Pioneer is that they were bound by orders of this Court and the order of the High Court was for the first time passed on 10.07.2018. It is submitted that order in review was passed on 10.08.2018 and order in LPA was passed on 12.09.2018. It is submitted that aforesaid orders were never complied by the Pioneer and on 24.09.2018 consent of the FIITJEE was sought. It is submitted that subsequently, vide email dated 27.09.2018, the Pioneer informed that the signage and the disclaimer had been covered.
4.3 It is submitted that Ld. Sole Arbitrator failed to take into consideration the fact that in view of clause 2(i) of the Agreement was required to provide all necessary approvals required for execution of the project. It is submitted that the object of the seminaming agreement dated 11.01.2018 was to promote and improve the brand value of FIITJEE as evident from preface of the Agreement dated 11.01.2018, which was Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 7 of 26 dependent upon the text of the signage. It is submitted that the order dated 10.07.2018 passed by the Hon'ble High Court, the Agreement between the parties had become impossible of performance and hence void and Ld. Sole Arbitrator ignored the said legal position and committed an error in passing the impugned award. It is submitted that while the court order dated 10.07.2018 had the effect of frustrating the contract subsequent to 10.07.2018 and therefore, rendering the contract void and that Prior to 10.07.2018, the arbitrary modification of the signage by the Pioneer amounted to breach. It is submitted that Ld. Sole Arbitrator failed to consider the email dated 05.06.2018 vide which the Pioneer had categorically stated that it would continue to pay the license fee only in accordance with the agreement. 4.4 Ld. Counsel for FIITJEE submitted that Ld. Sole Arbitrator erred in noting that the Pioneer intended to take advantage of the signages by prefixing FIITJEE before IIT Metro Station. It is submitted that the Ld. Sole Arbitrator failed to consider the fact that text on the signage was not within the discretion/purview of the Pioneer. It is submitted that in view of Annexure A and Annexure C of the Agreement, it was clear that the text on the signage was placed in accordance with the prior agreement entered between Pioneer and DMRC.
4.5 Ld. Counsel for FIITJEE submitted that Ld. Sole Arbitrator awarded the said claims to the Pioneer without there being any evidence for the same and ignored the fact of cost invoices detailing the actual cost incurred by the Pioneer in Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 8 of 26 fabrication was mandated by Clause 3 (a) and 3 (f) of the Agreement. It is submitted that Ld. Arbitrator erred in law in finding that the fabrication of signages as per clause 3 was an independent contract in the said license agreement. It is submitted that Ld. Sole Arbitrator wrongly held that the FIITJEE did not dispute the bills submitted by the Pioneer and that the said finding is contrary to the pleadings of the Pioneer in the arbitration proceedings.
4.6 Clause 3 of the Agreement provides that in furtherance of the present agreement, FIITJEE shall pay to the first party i.e. "PIONEER"the total cost of fabrication of the entire lIT metro station building premises. It is submitted that use of "in furtherance of the present agreement" makes it clear that Petitioner's obligation to pay fabrication charges arises from and is incidental to the performance of the whole agreement and cannot be read distinct from the core agreement, so as to cause fragmentation of the whole agreement. It is submitted that the Pioneer agreed to the payment of cost of fabrication, in view of the business arrangement entered for a period of 10 years. It is submitted that the Pioneer breached the contract from the very inception and cannot be allowed to take undue benefit by means of the fabrication cost.
4.7 Ld. Counsel for FIITJEE submitted that Ld. Sole Arbitrator wrongly rejected the Counter Claim for Refund of License Fee already paid to the Pioneer and failed to consider the fact the order dated 10.07.2018 had the effect of frustrating Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 9 of 26 an otherwise valid agreement in terms of Section 56 of the Indian Contract Act, 1872 and the Pioneer in such circumstances, in view of Section 65 of the Indian Contract Act, 1872 was bound to restore and refund to the FIITJEE benefit received by it on account of License Fee.
4.8 Ld. Counsel for FIITJEE has placed reliance in Satyabrata Ghose vs Mugneeram Bangur & Company AIR 1954 SC 44; Jawahar Lal Wadhwa vs Haripada Chakroberty (1989) 1 SCC 76; Pepsico India Holding vs Nishiland Park Limited Arb. Petition 768/2010 High Court of Bombay; Karambir Nain vs State of Haryana PLR (2014) 176 P & H 167 Punjab & Haryana High Court; Vasu P Shetty vs Hotel Vandana Palace AIR 2014 SC 1947 and Mahanagar Telephone Nigam vs Finolex Cables Limited 2017 (166) DRJ 1.
5.1 Sh. Ramesh Kumar Ld. counsel appearing for Pioneer submitted that the email dated 04.10.2018 from FIITJEE showed that it was still willing to continue with the license agreement despite being aware of controversy raised by IIT Delhi and Order dated 10.07.2018 passed by the Hon'ble High Court. It is submitted that Pioneer is only space provider and not responsible in case of any controversy arising on account of text of the advertisement and the dispute was purely personal between Fiitjee and IIT. It is submitted that it was also proposed to the Pioneer that they could terminate the contract by paying license fee for remaining lockinperiod, but FIITJEE stated that they were willing to display "FIITJEE has no business Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 10 of 26 association with IIT Delhi" instead of 'FIITJEE is in no way connected to any IIT' and that proposal mentioned in their review application and in the LPA by the FIITJEE was not accepted by the Hon'ble High Court.
5.2 Ld. Counsel for Pioneer submitted that in reply to claim in para (g), FIITJEE admitted that actual cost of fabrication was to be borne by it, which after installation worked out to Rs.47,01,120/ for which invoice dated 07.06.2018 was issued to the FIITJEE. It is submitted that FIITJEE had contended that fabrication cost was meant for 10 years, which was not payable by FIITJEE. It is submitted that fabrication cost is one time expense which had already been incurred by the Pioneer, who is liable to be reimbursed.
5.3 It is urged that the FIITJEE admitted that branding of IIT Metro station had sparked a controversy that it was trying to mislead the IIT aspirants and had the effect of passingoff the name of the FIITJEE as an associate of IIT Delhi. It was admitted by FIITJEE that disclaimer was put up pursuant to the Orders of the Hon'ble High Court and it was admitted in email dated 24.09.2018, that Pioneer had conveyed to terminate the contract in case the payment of license fee was not paid and to treat the said email as notice as per clause 13 and 15 of license agreement. 5.4 Ld. counsel for Pioneer submitted that FIITJEE wanted to continue the agreement. In email dated 27.05.2018, the Pioneer had stated that in case FIITJEE had an issue with the disclaimer, it should bear the infrastructure cost and part ways Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 11 of 26 with the contract. In reply by way of email dated 05.06.2018, FIITJEE stated that they were bound by the terms of the contract and would abide the terms and conditions of the agreement and pay license fee for the days of May'2018 and onwards and that they would take best possible recourse available to avoid passing adverse Orders by the Hon'ble High Court and that they look forward to longer and fruitful relationship with Pioneer. Thus, despite the disclaimer already put up, the FIITJEE was willing to continue with the contract and was ready to pay license fee regularly.
5.5 It is submitted that in email dated 21.07.2018, it was admitted by FIIJEE in para 2 that Pioneer was only a space provider and that in the license deed dated 11.08.2018, it had only represented to the FIITJEE regarding the space available and the manner in which advertisement would be displayed and since size of the disclaimer was increased by the Hon'ble High Court and its responsibility and consequences could not be fastened upon the Pioneer .
5.6 It is urged that the Pioneer had claimed the unpaid arrears of license fee charged upto 28.11.2018 amounting to Rs.70,14,400/ and also Rs.47,01,120/ towards fabrication charges and that there is no dispute with respect to bills and the amount. It is submitted that with respect to license fee, the defence of FIITJEE was that the disclaimer had disentitled the Pioneer from seeking payment and fabrication charges were meant for 10 years. These reasons were given by FIITJEE for not Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 12 of 26 making payment and the disclaimer had been ordered by the Hon'ble High Court and that FIITJEE in its email dated 05.06.2018 admitted that they would pay the license fee irrespective of the controversies relating to disclaimer, which had already arisen and was conveyed by the Pioneer to the FIITJEE as per email dated 27.05.2018 and the fabrication charges were admittedly one time expense incurred by it and parties had agreed that these are liable to be reimbursed by the FIITJEE, who admitted their liability to pay this amount.
5.7 It is submitted that the claim of the FIITJEE for refund of license fee already paid to the Pioneer amounting to Rs.54,14,400/ has been rightly rejected as the Pioneer was a space provider and space has been utilized for the advertisement of FIITJEE though with the disclaimer and controversy had arisen on account of manner of the text of advertisement belonging to FIITJEE. It is submitted that FIITJEE in their email dated 04.06.2018 categorically admitted to continue the contract and to pay license fee for 4 days of May and onwards and thus, FIITJEE has been rightly held liable to pay arrears of license fee and is not entitled to recover license fee already paid. It is submitted that FIITJEE had claimed damages/compensation of Rs.25,00,000/ and that no pleadings or evidence has come forward as to how the amount of Rs.25,00,000/ was arrived at. 5.8 There is no correspondence that any facilities mentioned in Clause 2 of the agreement had not been provided by the Pioneer and the pleadings and documents clearly Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 13 of 26 suggested that advertisement had been displayed and the FIITJEE was aggrieved with the disclaimer and no breach has been committed by the Pioneer and directions to put up disclaimer issued by the Hon'ble High Court cannot held to be a violation on part of the Pioneer and as such, this claim of the counter claimant has been rightly dismissed. Moreover, claim of Rs.15,00,000/ towards indemnification of the litigation cost suffered by the FIITJEE was rightly dismissed as there was no evidence quantifying the amount of Rs. 15,00,000/ and the Clause 10 of the agreement made the Pioneer liable only, in case litigation had occurred due to some acts committed by the Pioneer.
5.9 It is urged that the controversy had arisen on account of text displayed which was approved by the FIITJEE only, who in all those litigations had lost which implied that the issues raised by IIT Delhi were genuine and the FIITJEE could not seek indemnity and payment of litigation cost litigation was not occasioned due to any act of the Pioneer, who was merely a space provider and the text belonged to the FIITJEE, who claimed Rs.25,00,000/ for loss of profit. This claim was also based upon the disclaimer for which Pioneer cannot be held liable and no loss of profit was proved by FIITJEE. It is submitted that FIITJEE alleged that there was a decline in admissions but no evidence was brought on record to indicate that the decline was on account of any of its act . Hon'ble High Court vide order dated 10.08.2018 noted that disclaimer is a true Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 14 of 26 statement. As such, claim of Rs.10,00,000/ for loss of reputation was rightly dismissed.
5.10 It was submitted that sovereign action cannot be the basis to allege loss of reputation to make this claim and there is no evidence in support of the claim and the manner of semi naming of the metro station was chosen and decided by the FIITJEE only so they had to suffer for the consequences. Impugned Award is neither in contravention with fundamental policy of India nor is in conflict with the most basic notions of morality or justice.
6. The legal position is well settled that the Arbitral tribunal is the final arbiter of the facts and the law. Ordinarily, conclusions of fact, or law, at which the arbitral tribunal arrives, are not amenable to interference under Section 34. Ordinarily, interference with the arbitral award is to be scrupulously eschewed. Having elected to resolve their disputes by arbitration, the parties are ordinarily expected to defer to the decision of the arbitrator. Awards of arbitral tribunals cannot be likened with judgments of courts, which are susceptible to appeal. Else, the very raison d'etre of the establishment of the arbitral institution would stand defeated. A broad distinction has to be maintained between the decisions which are perverse and those which are not and interference by the Court under Section 34 (2) (b) (ii) does not entail a review of the merits of the dispute, and is limited to situations where the findings of the arbitrator are arbitrary, capricious or perverse, or when the conscience of the Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 15 of 26 court is shocked, or when the illegality is not trivial but goes to the root of the matter. Perversity, in such a case must be of such a degree that no reasonable man, conversant with the facts and the law, would arrive at such a decision.
6.1 An arbitral award may not be interfered with if the view taken by the arbitrator is a possible view based on facts. An award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence. The Court is not entitled to sit in appeal over the decision of the arbitral tribunal. Neither can the court re appreciate the evidence, which has been appreciated by the arbitral tribunal. If all the evidence has been examined by the arbitral tribunal, the court cannot interfere on the ground that the examination of the evidence, as undertaken by the arbitral tribunal, is not, to its mind, satisfactory or sufficient. Nor can the court substitute its own view for the view of the arbitral tribunal, on the ground that, in its perception, the view of the court is "better" or "more appropriate". ('MMTC Ltd vs Vedanta Ltd.', AIR 2019 SC 1168; 'Union of India vs Chenab Construction (Regd.) 2019 SCC OnLine Del 10515; 'Ssangyong Engineering & Construction Co. Ltd. vs National Highways Authority of India (NHAI), (2019) 15 SCC 131, 'Paras Kente Collieries Limited vs Rajasthan Rajya Vidhut Utpadan Nigam Limited' , AIR 2019 SC 2908, 'Patel Engineering Ltd vs North Eastern Electric Power Corporation Ltd (NEEPCO)' 2020 SCC OnLine SC 466 and 'Anglo America Metallurgical Coal PTY Ltd vs MMTC Ltd' 2020 SCC OnLine Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 16 of 26 SC 1030).
7. This Court finds that Ld. Tribunal has looked into the submissions advanced by the parties, discussed the legal and factual position and after detailed analysis in the impugned award, came to a reasonable conclusion.
8. There is no dispute about certain admitted facts. Pioneer had been awarded IIT metro station for exclusive co branding activity and seminaming rights vide a contract with DMRC for a period of 10 years commencing from the date when the metro station becomes operational. Admittedly, parties (i.e. Pioneer and FIITJEE) had entered into an agreement on 11.01.2018. By virtue of clause 2 of the said agreement, Pioneer had undertaken to provide seminaming/branding IIT Metro station as FIITJEEIIT metro station at entry and exit alongwith placements platform area i.e. minimum 12 locations and also allowed the branding of existing FIITJEE sister concern and also upcoming brand USUQ, Edfora etc., wherever required. Vide clause 3 of the agreement, FIITJEE had to pay total cost of fabrication (which was estimated approximately Rs. 25 lakhs) of the entire IIT metro station on actuals/total cost incurred by the Pioneer. FIITJEE had to pay licence fees @ Rs. 16 lakhs per month post completion of the month after the said metro station became operational. FIITJEE could terminate the agreement by giving three months agreement in writing after completion of lock in period. Pioneer had a right to terminate the agreement in case FIITJEE defaults in making payment of licence fee even Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 17 of 26 after notice of demand. The said metro station had become operational on 28.05.2018.
9. This Court is satisfied that none of the grounds raised by both the parties in their petition depict any error or fault in the findings reached at in award. Case of the FIITJEE is that the license fee was payable, since Pioneer had on various occasions asked the FIITJEE to comply with the directions in terms of order dated 10.07.2018 and post 10.07.2018, order was never complied by the FIITJEE, who on the contrary had been expressing its intent to comply with the terms of the Agreement by way of numerous emails and oral communications. Vide e mail dated 18.07.2018, Pioneer suggested that an appeal be filed against the order dated 10.07.2018 passed in the W.P. (C) 5708/2018 and assured to support the case of the FIITJEE in appeal and for the first time on 24.09.2018 consent of the FIITJEE was sought by the Pioneer for changing the layout of the metro station and subsequently vide email dated 27.09.2018, the Pioneer informed that the signage & the disclaimer had been covered.
10. This Court finds view of Ld. Arbitrator reasonable and balanced. Pioneer had admitted the fact that the signages had been covered by it from 27.09.2018. Ld. Arbitrator, as regards to the issue of license fee claimed by the Pioneer for the period 28.09.2018 to 28.11.2018 rightly noted that "It is evident from the email dated 27.09.2018, that Pioneer deprived FIITJEE of the benefits of the advertisement which the signages were Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 18 of 26 providing to it in business by covering the signages and Pioneer, therefore, could not claim the rental charges on and after 28.09.2018 as rental charges were meant to benefit the business, which enjoyment was denied.
11. Ld. Arbitrator noted that email dated 27.05.2018 shows that dispute was raised by the IIT about the confusion created by seminaming the FIITJEE alongwith the name of IIT, by which confusion was lending to impression that IIT is associated with FIITJEE and thus, was affecting the reputation of IIT institutes of engineering in India for which the coaching is provided by the FIITJEE to students for seeking admission in the premier institutes. It was observed that the fact was brought by the claimant/Pioneer in writing to the notice of the FIITJEE by email dated 27.05.2018 and this was done after the disclaimer 'FIITJEE IS NO WAY CONNECTED TO ANY IIT' was put at the space of signages for which the licence agreement was entered into between the parties. Ld. Arbitrator observed that putting the disclaimer by the DMRC, who was the principal qua the claimant amounted to anticipatory breach of the licence agreement executed between the parties, by the claimant. . Ld. Arbitrator was of the view that on the face of such anticipatory breach of agreement the option was with the FIITJEE to accept the breach and thereby bring an end to the contract without prejudice to the right if any. It was observed that from the order of Hon'ble High Court, FIITJEE did not accept the anticipatory breach committed by the claimant and its principal DMRC, Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 19 of 26 instead the FIITJEE desired to continue the contract and with that end, in view of preferred review petition and also an appeal before Hon'ble High Court, It was observed that FIITJEE intended to proceed with the contract inspite of the anticipatory breach of contract and kept alive the contract agreement.
12. Ld. Arbitrator noted that in reply of FIITJEE on email dated 05.06.2018 which was sent in reply to email dated 27.05.2018 shows that despite the disclaimer having been put at the signages by the DMRC, FIITJEE was willing to continue with the licence agreement and was willing to pay the charges for the same as agreed between the parties and subsequent emails also show that the FIITJEE was willing to abide by the terms and conditions of the licence agreement at all material time, inspite of the disclaimer having been put at the site.
13. It was observed that the disclaimer which had been put on 27.05.2018 or prior to that i.e. after 25.05.2018 had been ratified by Hon'ble High Court on 10.07.2018, which affirmed the act of DMRC in putting the disclaimer, which was in public interest and no party could say that wrong was caused to it. Ld. Arbitrator observed that an act done in public interest calls for no compensation to be awarded to any person and FIITJEE consented for the continuance of disclaimer with the signages until the Court modified the same. Disclaimer to the effect that "FIITJEE has no business association with IIT Delhi." was not accepted by the court and conduct of the FIITJEE shows that the it never treated the contract of licence agreement having being Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 20 of 26 frustrated under Section 56 of Indian Contract Act 1872. Ld. Arbitrator was of the view that the disclaimer cleared the cloud of confusion which signages were creating advantage of which FIITJEE intended to take by prefixing FIITJEE before IIT Metro Station and despite disclaimer, the FIITJEE continued to take advantage of the signages which they were getting from signages influencing the mind of the aspirants in getting coaching from the FIITJEE during admission season.
14. Ld. Arbitral Tribunal rightly rejected the argument of the FIITJEE to the effect that the contract of licence agreement got frustrated in terms of Section 56 of Indian Contract Act, 1872 and that it was entitled to the refund of the amount already paid by it claimant towards the charges agreed for the site of the signages and services agreed. Ld. Arbitrator rightly noted that the FIITJEE did not dispute the bills or the figure shown in the bills and in absence of any dispute having been raised about the amount of the bills, the claimant was entitled to the amount claimed. Since, FIITJEE IIT was displayed at the IIT metro station and being aggrieved, objection had been raised by the IIT institute and in proceeding filed by IIT, Hon'ble High Court agreed with them that the seminaming of IIT Metro Station had the effect of sending wrong message that FIITJEE was connected to IIT, Delhi. This Courts finds no error or patent illegality in the view taken by Ld. Arbitrator.
15. Now as regards fabrication charges, as per clause 3
(a) of licence agreement, the fabrication charges were estimated Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 21 of 26 as Rs. 25,00,000/ but they were to be paid on actual basis. On actual basis, claimant incurred a sum of Rs. 47,01,120/. As per clause 3 (f) of the licence Agreement , the claimant had to bear all charges and expenses visavis, the fabrication including brand colour on the station building, advertisement board innovations etc. The FIITJEE was to share the said cost, who in answer to the claim had not disputed the cost. Ld. Arbitrator was of the view that the fabrication charges were one time expense which the claimant is entitled and bill submitted by the claimant were not disputed and were to be paid immediately after the bill was submitted and the station become operational. It was observed that the FIITJEE cannot deny the amount claimed once it had taken benefit of the signages even prior to station having become operational.
16. During arguments, Ld. Counsel for FIITJEE submitted that FIITJEE had disputed the costs towards fabrication charges and the invoice of the costs were not proved by the Pioneer. This Court finds that this contention raised on behalf of FIITJEE is misconceived and against the record. In the statement of claim, Pioneer had mentioned about fabrication charges of Rs. 25 lakhs and the fabrication costs after installation worked out to be Rs. 47,01,120/ and invoice dated 07.06.2018 was issued to the FIITJEE. In statement of defence, FIITJEE had stated that it was matter of record that the cost of fabrication, after installation worked out to Rs. 47,01,120/ and the issuance of invoice dated 07.06.2018 was also not disputed. There was no Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 22 of 26 denial in any manner of the said fact ,therefore, no fault of Ld. Tribunal can be found. In view of the admission and failing of denial , Pioneer was not required to prove invoices of the costs. Thus, no fault can be fond with the reasoning of Ld Tribunal in this regard.
17. It is noted that the contract was brought to an end by the claimant on account nonpayment of rent by the FIITJEE, who can not be permitted to deny the claim on the ground that the benefit of signages was meant for 10 years. As per clause 2
(j) of the contract agreement provided that in case the FIITJEE desired reprinting or reinstall the boxes/backlit signages, such charges of reprint etc., was to be borne by it . Ld. Arbitrator noted that the life of signages depended upon the choice of FIITJEE and it may or may not be for 10 years. There was scope for change of signages etc., even prior to expiry of 10 years. Ld. Arbitral Tribunal noted that a business man does the business with all the risk involved not only the act of God but also by the change of public policy of Government and a business venture may get affected by a change in public policy, which may either bring profits by windfall or losses. It was noted that for such change, loss cannot be shifted to the Pioneer .
18. As regards, counter claim filed by the FIITJEE, Ld. Arbitral Tribunal rightly held that claimant/FIITJEE is not entitled to the refund of licence fee. A reading of clause 2 of the agreement shows that what has been provided in the said clause are the services which were to be rendered during the tenure of Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 23 of 26 the contract for 10 years for which simultaneously the FIITJEE was to pay to the Pioneer a sum of Rs. 16,00,000/-. Ld. Arbitral Tribunal rightly held that the claimant was entitled to the monthly charges only upto 28.09.2018 , when the signages were covered. For the period on or after 28.09.2018, the Arbitral Tribunal found that Pioneer was not entitled to any amount, as claimed , for non-provision of services as per clause 2 of the licence agreement. It was noted that Section 74 of the Indian Contract Act 1872 provides that penalty can be awarded only towards monetary loss suffered. Non provision of services in terms of clause 2 of the agreement cannot be monetary loss to the FIITJEE. When there is no monetary loss, then no damages can be awarded even though clause 9 of the agreement provided for the penalty when no amount of penalty is agreed to between the parties. It was noted by Ld. Arbitrator that the claim is beyond clause 9 of the licence agreement as no monetary loss could be caused to it for non-provision of facilities after 28.09.2018, on which date the contract came to an end.
19. Ld Arbitrator noted that the FIITJEE claimed Rs. 15,00,000/- towards litigation expenses incurred by the FIITJEE while contesting the claim of the IIT. The claim of the IIT resulted in clearing the cloud of confusion created on account of signages prefixing FIITJEE before IIT Metro Station in signages in the mind of the public. A challenge to licence agreement, by way of claim, with respect to advertisement affecting the public, at large, is not covered by the licence agreement as claimed by Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 24 of 26 FIITJEE . The Arbitral Tribunal rightly found that such a claim cannot be allowed.
20. Ld. Tribunal rightly found that the loss claimed was not a direct loss caused to the FIITJEE on account of disclaimer which had been ratified by the Hon'ble High Court vide order dated 10.07.2018. This ratification has caused no wrong. It was noted that the FIITJEE contested the writ petition preferred by IIT, which resulted in imposition of the disclaimer of signages and FIITJEE thereafter, sought reviews of the said order and preferred an appeal before the Division Bench of Hon'ble High Court but failed. It was rightly noted that the disclaimer under these circumstances, cannot invite the claim of damages allegedly caused on account of loss or profit nor the said loss can be described as a loss of profit for the reason that the disclaimer was put at the signages, in public interest, to remove confusion in the mind of aspirants of engineering education including the guardians of such aspirants. Ld. Arbitral Tribunal right found that the FIITJEE is not entitled to the amount. Therefore, the Award dated 11.01.2020 passed by the Ld. Arbitrator is not illegal or invalid and cannot be set aside.
21. Award notes that facts regarding raising dispute by the IIT was informed by the Pioneer to FIITJEE by way of email dated 27.05.2018 and the billing has been raised on 28.05.2018. Thereafter, FIITJEE continued with agreement as per their email dated 05.06.2018 stated therein that they were bound by the terms of the contract. In para G, Ld. Arbitrator discussed in detail about the clauses/relevant portion of the licenced agreement. As Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 25 of 26 regards email dated 27.05.2018 written by Pioneer and reply dated 05.06.2018 written by FIITJEE stating that it was bound by the terms of the agreement.
22. On thoughtful consideration of the submissions advanced at bar by Ld. Counsels for the parties, in the light of aforenoted legal position, this Court finds no merits in the submissions advanced by the Learned counsels for the parties. This Court finds that parties have failed to satisfy any ground for interference with the arbitral award under Section 34 of A & C Act and in the view taken by the Ld. Arbitrator after considering the material before him. It cannot be said that the Award dated 11.01.2020 is against the fundamental policy of Indian Law or perverse or has patent illegality which goes to the root of the matter.
23. In the result, this Court finds no merits in both the petitions and no ground for interference is called in the award. Accordingly, both petitions U/s 34 of A&C Act deserve to be dismissed. Order accordingly. No order as to costs. Both the files be consigned to record room.
(Dictated and announced today i.e. 10th May 2023) (VINAY KUMAR KHANNA) District Judge (Commercial Court-02) South Distt., Saket, New Delhi/10.05.2023 Pioneer Publicity Corporation Pvt Ltd vs M/s Fiitjee Ltd (OMP (Comm) 14/2020) M/s Fiitjee Ltd vs Pioneer Publicity Corporation Pvt Ltd (OMP (Comm) 18/2020) Page no. 26 of 26