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2013 Supreme(Del) 309
High Court of Delhi
RAJIV SAHAI ENDLAW, J.
Yogesh Radhakrishnan
Versus
Media Networks & Distribution (India) Ltd & Others
CS(OS) No. 217 of 2013 & IA No.1907 of 2013 (Of The Plaintiff Under Order 39 Rule 1&2 CPC)
Decided on : 19-03-2013
For the Plaintiff:S. Ganesh, N.K. Kaul, Sr. Advs. with Amit Sibal, Vikram Mehta, Sunil Shekhawat &. Anshuman Srivastava, Advocates.
For the Defendants:D-1, Rajiv Nayyar, Sr. Adv. with Jaspreet Singh Kapoor,. D-2 to 4, Dr. Abhishek Manu Singhvi, Maninder Singh, Sr. Advs. with Kunal Tandon, D-5, Aman Lekhi, Sr. Adv. With Abhishek Malhotra , Angad Singh Dugal, Advocates.
Headnote:
Specific Relief Act, 1963 - Sections 14(1)(b), 14(1)(d), 41 & 42 r/w Clause 8 of the JVA and Article 87 of the AoA - Suit for injunction not maintainable - Termination letter 90 days period of termination, in terms of the BSA was given - Defendants contended that the suit was infructuous as the termination had already come into effect and could not be injuncted - Issue was whether this Court can grant a decree for injunction restraining the defendants No.2 to 4 from terminating the BSA and decree for specific performance of BSA - Inspite of exclusive rights, under the BSA, having been granted to the defendant No.1 to distribute the channels of defendants No.2 to 4 for a period of three years, the parties still permitted termination thereof by the defendants No.2 to 4 in the events described in Clause 14.2 thereof and also without any reason whatsoever under Clause 15.1 - BSA by its specific terms was determinable in nature - Held: Section 14(1)(c) of the SRA was clearly attracted - Suit for injunctionfound to be not maintainable - Petition dismissed.
Rajiv Sahai Endlaw, J.
1. The plaintiff, holding 49% shares in the defendant No.1 Company has instituted this suit as a derivative action, for and on behalf of defendant No.1 Company, to prevent the defendant No.2 Bennett Coleman & Company Ltd. holding the remaining 51% shares in the defendant No.1 Company and its 100% subsidiaries Times Global Broadcasting Company Ltd. and Zoom Entertainment Network Ltd., impleaded as defendants No.3 & 4 respectively, from illegally and malafidely terminating the Business Service Agreement (BSA) dated 18.01.2011 between the defendant No.1 Company on the one hand and defendants No.2 to 4 on the other hand and to restrain the defendants No.2 to 4 from entering into an agreement with the defendant No.5 MSM Discovery Pvt. Ltd. for the same services for which they had entered into the BSA with the defendant No.1.
2. The plaintiff claims, i) a declaration that the BSA is valid, subsisting and binding on the parties; ii) a declaration that the termination of the BSA vide termination letter dated 06.11.2012 is illegal; iii) decree for Specific Performance directing the defendants No.2 to 4 to specifically perform their obligations under the BSA; iv) decree for Permanent Injunction restraining the defendant No.5 from acting under the Agreement entered into by it with the defendants No.2 to 4.
3. The plaintiff, in support of its case relies upon a Joint Venture Agreement (JVA) dated 20.01.2011 between the plaintiff on the one hand and the defendant No.2 on the other hand and to which JVA, the defendant No.1 Company being the Joint Venture Company was also a party. It was however not the plea of the plaintiff in the plaint as originally filed, that the terms of the JVA had been incorporated in the Articles of Association (AoA) of the defendant No.1 Company.
4. The suit came up for admission on 06.02.2013 when doubts as to its maintainability were expressed on the following counts:
(i) Maintainability in law of a derivative action for the benefit of a Company by a shareholder.
(ii) Whether the terms of the JVA, notwithstanding the defendant No.1 Company being the Joint Venture Company being party thereto, were binding on the defendant No.1 Company without being incorporated in the AoA of the defendant No.1 Company; reference was made to V.B. Rangaraj Vs. V.B. Gopalakrishnan (1992) 1 SCC 160; and
(iii) The specific enforceability of the BSA.
The counsels for the defendants also appeared on that date and arguments were heard on the aforesaid three aspects.
5. The plaintiff thereafter applied for amendment to plead that material terms of the JVA dated 20.01.2011 were indeed incorporated in the AoA of the defendant No.1 Company pursuant to the Resolution passed in the Extraordinary General Meeting (EGM) of the defendant No.1 Company held on 16.02.2011. The said amendment was allowed and the amended plaint taken on record and the arguments on the aspect of maintainability continued and the order thereon reserved.
6. It is the case of the plaintiff:
(i) that the defendants No.3 & 4 are the owners of various channels such as Times Now, ET Now, etc.;
(ii) that in the Digital Media various parties act as intermediaries (such as Cable / Direct to Home (DTH) operators) for the purposes of distributing the services to the end consumers; the said intermediaries collect subscription charges from the consumers and pass it on to the broadcasters and provide allied services;
(iii) that in the year 2011, the defendant No.2 approached the plaintiff, a professional having expertise in providing such intermediary services, for availing his services for distribution of its channels and other allied functions so as to fetch maximum subscription revenue therefrom;
(iv) that eventually the JVA aforesaid was executed under which the plaintiff became the Managing Director of the defendant No.1 Company and which provides that the business of the defendant No.1 Company cannot be transferred or alienated without the co
