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DEN Networks Ltd. v/s Mahuaa Media Pvt. Ltd.

    Petition No. 491(C) of 2012

    Decided On, 29 November 2013

    At, Telecom Disputes Settlement Appellate Tribunal New Delhi

    By, MEMBER

    For the Petitioner: Vibhav Srivastava, Advocate. For the Respondent: Vineet Bhagat, Neha Jain, Advocates.

Judgment Text

Aftab Alam, Chairperson.

M/s DEN Networks Ltd, a multi system operator has filed this petition, seeking recovery of Rs. 4,18,40,173/- as dues of placement charges for carrying the respondent’s channel on its network for the period April, 2011 to March, 2012. According to the petitioner, a ‘Minutes of Understanding’ was signed between the two sides on May 12, 2011, in term of which the petitioner would carry the respondent’s channel namely ‘Mahuaa’ on a frequency on 'Prime Band' on the petitioner’s network/ head-ends in the cities of Uttar Pradesh (a list of which was appended to the MoU) for a consideration of Rs.10 crores (exclusive of taxes). The MoU was executed on May 12, 2011 but it clearly ratified an arrangement that was already in existence as it was to operate retrospectively from April 01, 2011 till March 31, 2012. The MoU also laid down a schedule for making payments of the placement fee by the respondent. It is the case of petitioner that as agreed in the MoU it carried the respondent’s channel on prime band on its networks and head-ends all over U.P. for the period indicated in the MoU but the respondent defaulted in payment of placement fees with the result that its dues accumulated to Rs.4,18,40,173/- as evidenced from the statement of account (a copy of which was annexed to the petition as Annexure P3).

It is further the case of the petitioner that the respondent issued two cheques in its favour for payment of the placement fee dues; the first cheque, dated January 24, 2012 was for the sum of Rs.1,35,00,000/- and the other, dated January 30, 2012 for Rs.1,35,23,500/-. However, on presentation, both the cheques were returned by the bank without payment as there was 'stop payment' instruction by the drawer. The petitioner then gave to the respondent a notice dated February 20, 2012 under section 138 of Negotiable Instrument Act and thereupon the respondent paid to the petitioner the sum of Rs.1,35,00,000/- (the amount of the cheque dated January 24, 2012) by two cheques for Rs.60,00,000/- and Rs.75,00,000/- respectively which are duly shown in the petitioner’s statement of account. Taking into account those two payments, the petitioner’s dues against the respondent as on March 20, 2012 stood at Rs.4,18,40,173/-.

It is stated on behalf of the petitioner that the demands for payment of its dues were made many times by emails and letters sent through post but in response the petitioner only received vague assurances of payment. In this regard the petitioner brought on record the emails dated March 20, March 30 and July 23, 2012 and the letter dated April 12, 2012 sent from the petitioner’s side to one, Mr. Tiwari, the Chairman and Managing Director of the respondent company.

In the reply filed on its behalf, the respondent first sought to somehow wriggle out of the MoU dated May 12, 2011. The plea was taken that the MoU, being on plain paper and not stamp paper, was not executed as per the law and it was, therefore, not enforceable. It was also pointed out that the MoU provided for an agreement to be entered into by the parties within 30 days of its execution and no follow up agreement having come into existence, the MoU was quite unenforceable. As an alternative defence, it was stated that the petitioner did not carry the respondent’s channel on the frequency/band stipulated in the MoU and the respondent was, therefore, not liable to pay anything to the petitioner [vide. paragraphs 2(C), 2 (F) and 3(i) of the reply]. It was also stated that the two sides had already reconciled their accounts and the respondent had made full and final payment to the petitioner on March 12, 2012, and there was no further payments to be made to the petitioner. As regards the two dishonoured cheques referred to by the petitioner, it was stated that those were given by way of security and not towards payment of placement fee.

At the hearing of the case, however, counsel appearing for the respondent correctly and candidly admitted that the MoU signed by the two sides on May 12, 2011 gave rise to a concluded agreement and its terms were equally binding on both sides. But he resisted the petitioner’s claim on the sole ground that the respondent’s channel was not carried on the frequency/band as stipulated in the MoU. The petitioner had failed to discharge its obligation cast by the agreement and was, therefore, not entitled to any payment from the respondent.

In view of the limited defence taken on behalf of the respondent the only issue that needs to be examined is whether or not the petitioner carried the respondent’s channel on a frequency on 'Prime Band' as stipulated in the MoU.

The petitioner, in support of its case that the respondent’s channel was carried on the agreed frequency/band, put on record the mapping of ‘Mahuaa’ channel for the period covered by the MoU which was duly proved by its witness Mr. Vivek Nanda and was marked as Exhibit PW1 and which clearly bears out the petitioner’s case.

Assailing the mapping report, however, Mr. Vineet Bhagat, counsel for the respondent, invited our attention to the cross examination of the witness at page 5B of the Evidence Folder where he said that the petitioner company had managers on every location from whom he received reports of channel placement on weekly basis. Mr. Bhagat submitted that the mapping report was not based on the witness’s personal knowledge and he was, therefore, not competent to speak about its veracity. We are unable to accept the submission. Weekly reports of channel placement were received from the managers on every location in the ordinary course of business of the petitioner. The witness in his position as AVP (operations) was clearly tasked with the responsibility to collate those reports for making the mapping report of the respondent’s channel and this is precisely what he did. There is no reason not to accept his testimony or to reject Exhibit PW1.

On behalf of the respondent Mr. P.K. Tiwari, the Chairman and Managing Director of the respondent company was examined as its witness. In the affidavit filed by him (in lieu of examination-in-chief) he tried to disprove the validity of the MoU on many grounds but the validity of the MoU is no longer in issue in view the stand taken at the hearing of the case. On the question, whether or not the channel was carried on the promised frequency/band, Mr. Tiwari, in paragraph I of his affidavit, stated as under:

‘That, without prejudice, I say that the petitioner has deviated from his obligations agreed upon under the MOU and did not provide the placement of 'Mahuaa' Channel on the frequencies mutually agreed upon under the MOU by the petitioner and the respondent. I further say that the Respondent had complained about such deviation many a times and requested to the petitioner to place the channels as per the agreed frequencies due to which the respondent has suffered huge losses in terms of money and goodwill as GRP of the respondent channel come down to 10 from 30 but the petitioner has never paid any heed to the requests of the respondent company and his requests fell on the deaf ears of the petitioner.’

No written complaint or any email or written correspondence in that regard was produced by the respondent. But there are materials on record that falsify the case of the respondent that its channel was not carried on the agreed frequency/ band or that the respondent had complained to the petitioner in that connection.

The petitioner in its rejoinder enclosed a copy of an email from Mr. P.K. Tiwari to Mr. Vivek Nanda, an officer in the petitioner company. The email was sent on February 11, 2012 from the email address; pkt@century-communication.com and it reads as under:-

'Dear Mr. Nanda,

Please refer to our telephonic conversation; we will issue fresh cheques on Monday i.e. 13th February, 2012 in lieu of the cheques issued by us earlier.

We request you to keep the transmission of the channels on as per our mutual understanding.


P.K. Tiwari.'

(emphasis added)

In course of his cross examination Mr. P K Tiwari was confronted with this email. He admitted that pkt@century-communication.com was his email ID and acknowledged that the email was written on his instruction by Ms. Sona Debnath who was his secretary and also the authorized signatory.

In this email admittedly sent by the Chairman and Managing Director of the respondent company there is not even a hint of complaint regarding the channel not being carried on the agreed frequency/band. On the contrary there is an instruction to carry on the transmission of the channel as per the mutual understanding.

In light of this email, we see no reason not to accept the petitioner’s case duly supported by the mapping report of the channel, Exhibit PW1.

Mr. Vineet Bhagat argued that at the end of the MoU period the TAM rating of the respondent’s channel badly went down and cited it as a circumstance suggesting that the channel was not carried on the agreed frequency/ band. We fail to appreciate the submission. The agreement between the parties was to carry the channel on a frequency on 'prime band'. The agreement was not that the petitioner will get the TAM rating of the channel improved. There is evidence on record that the channel was carried on the promised frequency/band. That discharges the petitioner of its obligation and makes the respondent liable to pay the sum of money agreed in the MoU.

In light of the discussions made above, we come to the clear finding that the respondent’s channel was carried by the petitioner on the agreed frequency/ band and the case of the defendant that its channel was not carried on the agreed band is an afterthought and an incorrect plea to somehow deny the lawful claim of the petitioner. We, accordingly, allow the claim of petitioner and hold it entitled to recover from the res

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pondent the sum of Rs.4,18,40,173/- along with interest at the rate of 12 per cent per annum from March 31, 2012 till the date of payment. Before parting with the record of the case, we would like to observe that within a short while this is the third case of recovery of placement charges against Mahuaa Media Pvt. Ltd. in which we find it trying to defeat the claim on transparently got up pleas. The other two cases Petition no. 246(C) of 2012: Wire and Wireless(India) Ltd. Vs. Mahua Media Pvt. Ltd. for a sum of Rs.4,30,87,335/- with interest @ 12% per annum from September 30, 2011 till the date of payment; and were allowed by the common judgment dated November 22, 2013 in which the Tribunal was constrained to say that the respondent’s conduct was lacking in good faith. In this case we find the situation not very different from the earlier two cases. We would, therefore like to advice the respondent to mend and improve it business policies lest it lands itself in some major problem. In the result the petition is allowed. The office is directed to prepare a decree as directed above.