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High Court Of Madhya Pradesh
S. C. PANDEY
JABALPUR CABLE NETWORK PVT.LIMITED - Appellant
Versus
E.S.P.N.SOFTWARE INDIA PVT.LIMITED - Respondents
Misc. Appeal 260 Of 1999
Decided On : 03/13/1999
ARBITRATION AND CONCILIATION ACT, 1996 - SECTION 9(II)(D) AND (E) - JURISDICTION - TERRITORIAL JURISDICTION - CONTRACT - SALE OF GOODS ACT, 1930 - SECTION 2(7) - SPECIFIC RELIEF ACT, 1963 - SECTION 7 AND EXPLANATION 2 - SECTION 10 - SECTION 14(1)(C) - SECTION 39 - SECTION 40 - SECTION 41(E) - CODE OF CIVIL PROCEDURE, 1908 - SECTION 20 - SECTION 20(B) - SECTION 20(C) - ORDER 39, RULES 1 AND 2 - GENERAL CLAUSES ACT, 1897 - SECTION 3(26) - SECTION 3(36) - CONTRACT ACT, 1872 - SECTION 23 - SECTION 28 - SECTION 52 - SECTION 54.
Fact of the Case:
The appellant, Jabalpur Cable Network Pvt. Ltd., entered into an agreement with the respondent No. 1, ESPN Software India Pvt. Ltd., for the exhibition of Star Sports services. The agreement was for a period of one year from 15th April 1998 to 14th April 1999. The appellant was required to pay a monthly fee of Rs. 48,000/- to the respondent No. 1. The respondent No. 1 reserved the right to revise the subscription from time to time. The agreement also provided that the respondent No. 1 could terminate the contract by giving a ten days' notice if it found that there was a substantial change in the base of the subscribers of the affiliate. The appellant sent a letter to the respondent No. 3, which was the distributor of the signals to the appellant on behalf of the respondent No. 1, on 22nd July 1998, stating that 80 percent of the cable operators were not paying it the dues and, therefore, it was discontinuing its service to the cable operators and accordingly, it will not be paying the respondent No. 3 for Star Sports Services from the date of next renewal. However, the last line of the letter said that in case, the cable operators were ready and willing to pay the charges for Star Sports Services, the appellant shall continue its services. The respondent deactivated the Star Sports Services on 7th of August, 1998. The appellant filed an application under Section 9 of the Arbitration and Conciliation Act, 1996 before the Court-below seeking an ex parte order requiring the respondents to restart the Star Sports Channel for the viewers at Jabalpur city by providing the necessary equipments so that the signals be issued to the cable operators. The learned trial Judge rejected the contention of the appellant to the effect that it was entitled to an ex parte temporary injunction in absence of the respondents.
Finding of the Court:
The Court held that the signals issued by the respondent No. 1 are movable property and not immovable property. The agreement between the parties was an agreement for sale of movable property and not of immovable property. The Court further held that the clause in the agreement which provided that the Courts of Delhi shall have exclusive jurisdiction was ambiguous and could not be relied upon by the respondents to oust the jurisdiction of the Court at Jabalpur. The Court also held that the appellant had a right to file the suit under Section 20(c) of the Code of Civil Procedure at the place where the cause of action arose wholly or in part. The Court further held that the respondent No. 1 was not entitled to claim charges for the period the services were discontinued. The Court also held that the contract in question was enforceable by way of specific performance. The Court also held that the appellant was entitled to a mandatory injunction subject to certain conditions.
Issues: 1. Whether the signals issued by the respondent No. 1 are movable property or immovable property? 2. Whether the clause in the agreement which provided that the Courts of Delhi shall have exclusive jurisdiction is valid and enforceable? 3. Whether the appellant had a right to file the suit under Section 20(c) of the Code of Civil Procedure at the place where the cause of action arose wholly or in part? 4. Whether the respondent No. 1 was entitled to claim charges for the period the services were discontinued? 5. Whether the contract in question was enforceable by way of specific performance? 6. Whether the appellant was entitled to a mandatory injunction?
Ratio Decidendi: 1. The signals issued by the respondent No. 1 are movable property and not immovable property. 2. The clause in the agreement which provided that the Courts of Delhi shall have exclusive jurisdiction is ambiguous and cannot be relied upon by the respondents to oust the jurisdiction of the Court at Jabalpur. 3. The appellant had a right to file the suit under Section 20(c) of the Code of Civil Procedure at the place where the cause of action arose wholly or in part. 4. The respondent No. 1 was not entitled to claim charges for the period the services were discontinued. 5. The contract in question was enforceable by way of specific performance. 6. The appellant was entitled to a mandatory injunction subject to certain conditions.
Final Decision: The appeal was allowed. The Court directed the respondent No. 1 to continue sending signals to the appellant till 14th April, 1999 subject to certain conditions. The Court also directed the appellant to pay the respondent No. 1 the amount of Rs. 2,40,000/- as directed in the order. The Court further directed that the amount of Rs. 2,40,000/- directed to be paid/deposited by the appellant in this order, shall be subject to final decision of the arbitrators appointed by the Court of competent jurisdiction.
( 1 ) THIS is an appeal under Section 37 of Arbitration and Conciliation Act, 1996 (henceforth "the Act"), against the order dated 15-2-99, passed by XIth Additional District Judge, Jabalpur, in an unregistered Case No. 99.
( 2 ) THE learned counsel for the parties, at the outset, expressed the view that this case be finally disposed of and, therefore, they were heard finally by this Court. The learned counsel for the respondent No. 1 filed a written submission after the arguments were over. The learned counsel expressed that the written submission shall supplement his arguments as the aide memoire to the Court. Accordingly, permission was granted. In paragraph 1 of the written submission there is an indication that the respondent No. 1 reserved its right to file appropriate reply to memo of appeal as well as to the application for grant of interim injunction. This Court takes it on the oral submission of the learned counsel for the respondents Nos. 1 and 2, Shri N. Ganpati, that he has waived this condition while consenting to the final order being passed by this Court and not an interim order.
( 3 ) THE appellant, Jabalpur Cable Network Pvt. ,limited, Jabalpur is a company registered under the provisions of the Companies Act 1956. It is also registered under the Cable Television Network (Regulation) Act, 1995. It has obtained a franchise from Siti Cable Network, Pvt. ,limited, New Delhi for exhibiting by means of Cable Network, the various programmes available to it.
( 4 ) THE appellant, for exhibition of its programmes, enters into agreement with several cable operators who provide the necessary signals to their subscribers so that the programmes telecast by the appellant-company may be received and displayed on their private television sets. The appellant charges fees for permission to pass the signals to the cable operators and they, in their turn, charge monthly subscription from their subscribers for transmitting those signals to their receiver sets. The respondent No. 1, E. S. P. N. Software India Pvt. Limited, is a company registered under the Companies Act and has its registered office at Pushpa Vihar Community Centre, New Delhi. The respondent No. 2 represents its regional office at Mumbai; and the respondent No. 3 is duly appointed distributor for Jabalpur region.
( 5 ) THE respondent No. 1 entered into an agreement dated 15-4-98, Annexure P-1, styled as "star Sports Service Contract", for a period between 15-4-98 to 14-4-1999. The respondent No. 1 is named as the "licensor" in the contract and the appellant is known as "affiliate". It appears from clause III of the agreement that the term of one year between the parties was to expire by efflux of time unless the contract was renewed subject to same terms except for the fees which could be varied. The amount of fees in the contract was payable at the rate of Rs. 48,000/- per month by the affiliate to the licensor. However, the licensor reserved its right to revise the subscription from time to time. Further it appears from clause IV of the agreement that the licensor reserved its right to renegotiate with the affiliate with regard to amount of monthly subscription payable to it, if it found that there was a substantial change in the base of the subscribers of theaffiliate. For this purpose, the licensor had reserved the right to give a notice of ten days and on the failure of talks regarding renegotiation the licensor had a right to terminate the contract by the end of the month. An important condition was that the licensor granted to the affiliate a non-exclusive right to distribute the services provided by Star Sports for reception by the customers of the distribution systems. It was further agreed that licensor had right to terminate the contract by written notice if it believed in good faith and reasonable judgment that it was threatened or subject to legal action by the Government or any of its authorities under the laws of the land and the rul
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