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2007 Supreme(Del) 2390

IN THE HIGH COURT OF DELHI AT NEW DELHI
M/S TOTAL TELEFILM P.LTD. ..... Petitioner
versus
GOVT. OF NCT OF DELHI ..... Respondent
W.P.(C) 9656/2005
Decided On : October 10, 2007

Advocates Appeared:
Mr. Akshay Pinge for Respondent No.1. Ms. Meera, Bhatia for UOI.
Mr. Sunder Khatri, Advocate.
Mr. Justice S. Ravindra Bhat (Open Court)

Courts should refrain from entertaining contractual disputes and leave parties to seek remedies through arbitration or civil courts as per the terms of the contract.

Headnote:

VSNL - Contractual Dispute - Clause 14 - ABL International Vs. Export Credit Guarantee Corporation, 2004 (3) SCC 553; Nobel Resources Ltd. Vs. State of Orissa and Anr., (2006) 10 SCC 236

Fact of the Case:

The Petitioner entered into a Tripartite Agreement with Videsh Sanchar Nigam Ltd. and M/s Shen Public Ltd. for up-linking services. The Petitioner claimed losses and damages due to alleged non-performance by VSNL.

Finding of the Court:

The Court found that the dispute arose from a contractual obligation and should be resolved through arbitration as per Clause 14 of the Agreement. The Court declined to exercise its writ jurisdiction and dismissed the petition.

Issues: The main issue was whether the Court should entertain the disputes raised by the Petitioner or if the matter should be resolved through arbitration as per the contract.

Ratio Decidendi: The Court emphasized that disputes arising from contracts should be left for the parties to resolve through civil courts or arbitration, and the Court should not exercise its writ jurisdiction in such cases.

Final Decision: The relief claimed in the petition was not granted, and the petition and pending applications were dismissed.

1. The Petitioner claims various reliefs including the directions to the respondents (herein referred to “VSNL”) to pay amounts for alleged lossess incurred by it. A sum of Rs.2,96,00,000/- (Rupees Two Crores Ninety Six Lacs) in addition to which compensation for “mental torture” for alleged harassment, quantified at Rs.01,4,00,000/-(Rupees One Crore Four Lacs) have also been claimed.

2. The facts of the case are that the Petitioner entered into a Tripartite Agreement on 23.12.2003 with Respondent-Videsh Sanchar Nigam Ltd. and M/s Shen Public Ltd. In terms of the contract, the Petitioners channel was to be up- linked by the respondents in Delhi. The Petitioner deposited Rs.5 lakhs on 5.1.2004 with the VSNL pursuant to terms of the agreement. It is averred on 27.7.2005 the Petitioner applied for permission from the Ministry of Information and Broadcasting for Telecast of channel named “Total TV”. Permission is alleged to have been granted. The Petitioner applied to the said Wireless Planning Commission on 27.9.2004

3. In these circumstances it is claimed that having performed its part of the bargain the Petitioner was not provided with the services agreed to by the parties. It, therefore, claimed commercial losses and also damages.

4. Learned counsel for the Petitioner besides reiterating the averments in the petition relied upon the judgment of the Supreme Court in ABL International Vs. Export Credit Guarantee Corporation, 2004 (3) SCC 553 and contended that this Court ought to issue appropriate directions to give complete relief without insisting upon the exhaustion of alternative remedy. Learned counsel contended that the action of the Respondents in accepting the amounts and not proceeding further to honour the contract besides being a contractual dispute is one falling within the public law domain as it amounts to breach of the doctrine of promissory estoppel. Counsel further relied upon the judgment reported as Nobel Resources Ltd. Vs. State of Orissa and Anr., (2006) 10 SCC 236 .

5. Learned counsel for the Respondents resisted the proceedings. It was contended that the services agreed to be provided, did not materialize because the Petitioner was unable to secure permission from the Wireless Planning Commission. Counsel also relied upon Clause 2.13 and 3.14 of the Agreement which, inter alia, cast obligation on the Petitioner to secure necessary permission and consent. It was contended that the cause of action arose in Mumbai. Lastly, the counsel submitted that in terms of Clause 14 of the Agreement the dispute between the parties is arbitrable. Lastly counsel contended that immediately upon coming aware that the necessary permission from the Wireless Planning Commission was not forthcoming, the Respondent refunded the security deposit of Rs.5 lakhs.

6. The above narrative would show that the Petitioner entered into a Tripartite Agreement whereby it was to receive feed/uplinking from the respondent. A copy of that agreement has been produced. In terms of clause 2.1.3 and 3.1.4 all approvals from the necessary government authorities were to be obtained (and should be maintained) as a condition for the services under the Contract. Clause

1.4 reads as follows :- “It is the absolute responsibility of the Customer to obtain all necessary consents, approvals, licenses, and other rights from third parties, including without limitation, government agencies required for the transmission and reception of such programming and/or material.”

7. The Respondent contends that since the necessary permission and consent of the Wireless Planning Commission was not forthcoming it refunded the security deposit amount, to the Petitioner. The latter, on the other hand contends that the BSNL has not only breached the contract but acted arbitrarily and in an unreasonable manner, inviting the public Law jurisdiction of this Court.

8. It is no doubt true that this Court has a wide amplitude of power under Article 226 of the Constitution. In gi






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