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2012 Supreme(Bom) 2373
High Court of Judicature at Bombay
S.J. KATHAWALLA, J.
Board of Control for Cricket in India
Versus
Punjab National Bank & Others
Summons For Judgment Nos. 11 of 2012, 12 of 2012 & 13 of 2012 In Summary Suit Nos. 3131 of 2011, 3132 of 2011 & 3133 of 2011
Decided on : 20-12-2012
For the Plaintiffs:T.N. Subramanian, Senior Advocate along with Ms. Akhila Kaushik, Mr. Indranil Deshmukh, Rahul Mascarnhas, Adarsh Saxena, M/s. Amarchand & Mangaldas & Suresh A. Shroff & Co., Advocates.
For the Defendants:Ravi Kadam, Senior Advocate along with Nishit Dhruve, Prakash Shinde, Ms. Prachi Mhatre instructed by M/s. MDP & Partners, V. Dhond, Senior Advocate along with Shailesh Mendan, Advocates.
The Bank Guarantees were unconditional and irrevocable, and the Defendants' obligation to pay became absolute upon receipt of a valid claim by the Plaintiff.
Headnote:
The Plaintiff filed three Summary Suits for recovery of sums guaranteed under Bank Guarantees issued by the Defendants. The Plaintiff invoked the Bank Guarantees after terminating the Media Rights License Agreement (MRLA) with Nimbus. The Defendants contended that the Plaintiff cannot invoke the Bank Guarantees after terminating the MRLA and that only a specific amount was due and payable by Nimbus to the Plaintiff under the MRLA. The Court held that the Bank Guarantees were unconditional and irrevocable, and the Defendants' obligation to pay became absolute upon receipt of a valid claim by the Plaintiff. The Court also rejected the Defendants' defense regarding the specific amount due under the MRLA. The Defendants were granted conditional leave to defend the suit on depositing a percentage of their respective Bank Guarantees in Court.
1. The Plaintiff has filed the above three Summary Suits for recovery of sums of (i) Rs. 597,98,37,329/-, (ii) Rs. 406,47,26,027/-and (iii) Rs. 597,98,37,329/-with interest thereon at the rate of 10 per cent per annum from the date of filing of the suits until payment and/or realisation. In the above three Summary Suits, the Plaintiff has taken out the above three Summonses for Judgment praying that judgment be entered for the Plaintiff in the above suits against the Defendants for the sums set out hereinabove along with interest.
2. All the above three Summonses for Judgment are taken up for hearing and disposed of by this common judgment.
3. The facts in the matter are briefly set out hereunder:
4. By a Media Rights License Agreement dated 15th October 2009 (the said Agreement), entered into between the PlaintiffThe Board of Control for Cricket in India (“BCCI”) and one Nimbus Communications Limited (“Nimbus”), BCCI granted Nimbus license of certain rights in respect of cricket matches played in India, as set out in the MRLA. The said Agreement was amended from time to time. However, the amendment which is relevant for the purpose of the present proceedings is the Addendum dated 21st October 2009. The said Agreement read with the said Addendum dated 21st October 2009 shall hereinafter be referred to as “the MRLA”.
5. In order to secure the obligations of Nimbus under the MRLA, each of the Defendants issued 9 unconditional and irrevocable Bank Guarantees, out of which two Bank Guarantees (in relation to each of the Defendants) were released and duly discharged with the consent of the BCCI and thus stood terminated on such release. As such, two of the nine Bank Guarantees issued by each of the Defendants have been returned by BCCI to the respective Defendants in terms of the MRLA and have therefore been terminated. The present Summary Suits are in respect of the money payable to BCCI under the other Bank Guarantees, aggregating to approximately Rs. 1602 crores.
6. Some of the clauses of the MRLA referred to by the parties in the course of their arguments are reproduced hereunder:
“7. RIGHTS FEE AND FINANCIAL GUARANTEE
7.1In consideration of Licensor's grant of the license of the Media Rights, Licensee shall pay to the Licensor in accordance with this clause 7 the Rights Fee as follows (the parties agree that the Rights Fee shall be as per the table below to each of the BCCI Events in accordance with the following table:
For each ODI, Test and 20/20 International Match.
2010-2014 Rupees 31.25 Crores (thirty one crores and twenty five lakhs) for each match ( per match Value)
Licensee specifically acknowledges that Licensor is in negotiation with the ICC and the Cricket Boards of various countries to finalise the Future Tours Programme (“FTP”) for all bilateral cricket tours by the Indian National Team from April 2010 onwards and changes are likely to take place in the above schedule of Matches. To the extent any series or Match/Matches is/are either increased or reduced in any year during the Rights Period, the Rights Fee payable will be pro rata increased for the extra series or Match/Matches, as the case may be, or decreased to the extent of the series or Match/Matches reduced, as the case may be, based on the Per Match Value stated above for all the series or Matches as included in the schedule below or New series scheduled by Licensor. It being understood and agreed by licensee that if Licensor decides to schedule a Tri series the amount paid per match will remain as per the Per match Value defined above.
The current schedule for Matches is as listed below:
…. …... ….. …. ….
Payment Schedule
7.2 The Rights Fee shall be paid by Licensee to Licensor in the instalments and by the due dates for payment of each instalment set out in the Payment Schedule (annexed hereto). Interest shall be payable by Licensee to Licensor on any late payments of any amount including any instalment of the Rights Fee at a rate of twelve per c
