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M/s Digicable Network (India) Private Limited v/s M/s ESPN Software India Private Limited

Company & Directors' Information:- DIGICABLE NETWORK (INDIA) LIMITED [Active] CIN = U74999MH2007PLC171246

Company & Directors' Information:- R S SOFTWARE (INDIA) LTD. [Active] CIN = L72200WB1987PLC043375

Company & Directors' Information:- C K SOFTWARE PRIVATE LIMITED [Active] CIN = U72501DL2000PTC106184

Company & Directors' Information:- A K C SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2004PTC128462

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- P AND P SOFTWARE PRIVATE LIMITED [Active] CIN = U74899DL1994PTC057212

Company & Directors' Information:- SOFTWARE INDIA PRIVATE LIMITED [Active] CIN = U72200GJ1995PTC025791

Company & Directors' Information:- N. D. SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200TG1998PTC029778

Company & Directors' Information:- M S SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2005PTC133997

Company & Directors' Information:- G A S SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2004PTC127546

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- H K SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200WB2001PTC093967

Company & Directors' Information:- J SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200TZ2000PTC009229

Company & Directors' Information:- K S M SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2004PTC128463

Company & Directors' Information:- R B SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2005PTC140322

Company & Directors' Information:- SOFTWARE INDIA PRIVATE LIMITED [Active] CIN = U72200RJ1995PTC010577

Company & Directors' Information:- R J SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2005PTC133815

Company & Directors' Information:- I & I SOFTWARE INDIA PRIVATE LIMITED [Strike Off] CIN = U72200TN2005PTC056262

Company & Directors' Information:- D F SOFTWARE INDIA PRIVATE LIMITED [Strike Off] CIN = U72200TZ2003PTC010629

Company & Directors' Information:- E. C. SOFTWARE INDIA PRIVATE LIMITED [Active] CIN = U72900TN2007PTC063486

Company & Directors' Information:- Q 3 INDIA SOFTWARE PRIVATE LIMITED [Active] CIN = U72900TN2007PTC065786

Company & Directors' Information:- B C L SOFTWARE (INDIA) PRIVATE LIMITED [Strike Off] CIN = U30007MH1999PTC117922

Company & Directors' Information:- C C M SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200TG2000PTC034002

Company & Directors' Information:- ESPN INDIA PVT. LTD. [Strike Off] CIN = U99999DL1995PTC065084

Company & Directors' Information:- M I S SOFTWARE PRIVATE LIMITED [Active] CIN = U72200TN2008PTC068694

Company & Directors' Information:- A. T. SOFTWARE PRIVATE LIMITED [Active] CIN = U72200TG1996PTC023841

Company & Directors' Information:- J A K SOFTWARE PVT LTD [Active] CIN = U72200DL2001PTC111929

Company & Directors' Information:- R R SOFTWARE PVT LTD [Under Process of Striking Off] CIN = U72200KL1991PTC006051

Company & Directors' Information:- A M H SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200DL2005PTC132410

Company & Directors' Information:- P D A SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72900DL2003PTC123465

Company & Directors' Information:- I SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72300MH2012PTC225903

Company & Directors' Information:- V M SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72900PN2010PTC136847

Company & Directors' Information:- H M SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200HP2011PTC031756

Company & Directors' Information:- S N R SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72900DL2012PTC243073

Company & Directors' Information:- C M S SOFTWARE PRIVATE LIMITED [Active] CIN = U74899DL2005PTC142352

Company & Directors' Information:- S M I T SOFTWARE COMPANY PRIVATE LIMITED [Strike Off] CIN = U74899DL2006PTC144816

Company & Directors' Information:- A D SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200KA2002PTC030722

Company & Directors' Information:- H. A. N. R. E. J SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200TG2008PTC062044

    Petition No. 585(C) of 2012

    Decided On, 18 September 2012

    At, Telecom Disputes Settlement Appellate Tribunal New Delhi


    For the Petitioner: K. Datta, Diggaj Pathak, Advocates. For the Respondent : N. Ganpathy, Kartik Yadav, Advocates.

Judgment Text

1. The Petitioner is a Multi Service Operator having a pan India operation. It entered into diverse agreements with the Respondent herein for the purpose of retransmission of its channels.

2. The Petitioner fell in arrears in respect of payment of the subscription fee. A memorandum of understanding had been entered into by and between the parties hereto on or about 29.4.2010 in terms whereof a settlement was arrived at which is as under:

'2. The total consolidated subscription fees (excluding all taxes) agreed for Analog & Digital Cable platforms of all the Digicable centers listed in the annexure to the MOU for the Terms is an follows:

(Year I) – July 1, 2009 to June 30, 2010 is Rs. 20.53 crores: Payable in accordance with clause 5 hereinbelow.

(Year II) – July 1, 2010 to June 30, 2011 is Rs. 24.76 crores: Payable in 12 equal monthly installments, payable in accordance in with clause 6 hereinbelow.

(Year III) – July 1, 2011 to June 30, 2012 is Rs. 28.47 crores: Payable in 12 equal monthly installments, payable in accordance in with clause 6 hereinbelow.

3. It was furthermore agreed:

'8. Centre-wise subscription fee will be payable as per annexure attached to this MOU.'

The networks of the Petitioner have been mentioned in the annexure to the said MoU, item Nos.7 to 22 thereof for the period July, 2009 to June, 2009 are in respect of the area of Delhi.

4. The Respondent served a notice purported to be under Clause 4.1 and a public notice in terms of clause 4.3 of the Telecommunication (Broadcasting & Cable Services) Inter Connection Regulations, 2004 inter alia, on the following grounds:

a. Non renewal of the agreement

b. Default in payments in terms of the said MoU.

5. This petition was filed on 24.8.2012 as the supply of signals to the Petitioner’s network was stopped from 1.8.2012.

This petition, however, was confined to Delhi.

6. The submission made on behalf of the Petitioner in support of its prayer for interim order is that it was ready and willing to pay the entire amount payable in respect of it Delhi networks. While opposing the said prayer, the terms of the said MoU had been pointed out on behalf of the Respondent to contend that the Petitioner is bound to make payments in terms thereof.

7. Indisputably, the Respondent has filed a petition for recovery of more than Rs.31.00 crores against the Respondent.

It was marked as Petition No.225 of 2012. It, however, now stands admitted that in effect and substance the Respondent would be entitled to receive about Rs.27.00 crores out of which the Petitioner has paid a sum of Rs.6.5 crores, thus leaving a balance of about 20.5 crores.

8. Upon hearing the counsel for the parties, this Tribunal by an order dated 27.8.2012 directed the Petitioner to pay a sum of Rs.16.00 crores plus taxes whereupon supply of signals were to be restored within 48 hours from the time of payment. It was furthermore directed that the Petitioner shall go on making payments of the subscription fees as stipulated for the month of July, 2012.

9. It now is accepted at the Bar that the Petitioner handed over cheques for a sum of Rs.17.71 crores in terms of the aforementioned order. However, the said cheques bounced.

10. Whereas according to the Petitioner the parties had been negotiating for settlement of their disputes and differences on a pan India basis, the said cheques were not to be presented in the bank. The Respondent, however, presented the cheques on or about 29.8.2012 which, as noticed heretobefore bounced.

11. It, however, appears that the demand drafts for the aforementioned sum of Rs.17.61 crore have been handed over to the Respondent on 4.9.2012.

It also appears that pursuant to the said interim order of injunction in mandatory form dated 27.8.2012, the supply of signals in respect of Delhi network of the Petitioner has been restored on 29.8.2012.

12. It is furthermore admitted that the Petitioner had not made any payment of the subscription fee even in respect of the town of Delhi for the month of July, 2012.

13. Although having regard to the offer made by the Petitioner and accepted by the Respondent, no opportunity was required to be given to the latter to file a short affidavit nor was it prayed for.

14. The Respondent has filed a Miscellaneous Application praying inter alia for the following reliefs:

(a) 'To clarify the order dated August 27, 2012 passed in Petition No. 585 (C) of 2012 by this Hon’ble Tribunal;

(b) to pass directions to the Petitioner in terms of paragraphs 4(a) to (c) above;

(c) to fix a date for hearing the interim application and for interim orders after furnishing an opportunity to the Respondent to file an affidavit in opposition confined to the interim relief(s);

(d) to permit the Respondent to lead evidence in the matter if the Petitioner fails to provide the information sought for in paragraph 4(b) above;

(e) pass such other and further order (s) as this Hon’ble Tribunal may deem fit and proper in the facts and circumstances of the case.'

15. A copy of the said application was handed over to the learned counsel for the Petitioner on 6.9.2012.

The Respondent has filed a short affidavit, inter alia, contending:

' However, since the agreement between the parties has expired on June 30, 2012, the Petitioner cannot be allowed by this Hon’ble Tribunal to enjoy, pending the adjudication of their petition, the services of the Respondent at highly discounted rates offered to the Petitioner in terms of MoU dated April 29, 2010. The arrangement for the supply of the Respondent’s services to the Petitioner has to be revised keeping in mind the factors below:-

(i) The Petitioner enjoyed highly discounted rates under an agreement dated April 29, 2010

(ii) The subscriber base of the Petitioner is over Rs.5 lacs for Delhi region

(iii) There has been devaluation of the Indian currency.

(iv) The subscriber base of the Petitioner has increased since the year 2010 and subscription fees should reflect the current ground reality.'

16. In its rejoinder, the Petitioner contends that there has been no growth in its subscriber base.

It was stated:

'It is further stated that the numbers quoted are part of an ad-sales proposal to Aircel and is only an estimated number of viewers. The figure of 5.5 lakhs is based upon the cable and satellite industry household figures and is not reflective of the exact number of subscribers. The aforesaid number of viewers mentioned by the Petitioner is just an indication of the approximate viewers of the channel. As per cable and satellite industry guestimates every TV house has approximately 6 viewers. 5 Lacs viewers translates into approximately 83,000 television Subscribers. This figure can be validated with the subscribers disclosed to the MIB by the Petitioner for the city of Delhi on the assumption that the entire Delhi serviced by the Petitioner is digitized; based on the foregoing it is self-evident that there is a clear case for down gradation of subscription fees payable to the Respondent by the Petitioner. It is stated that though a new agreement is required to be negotiated & executed but the same has to be on reduced subscription fee. It. is stated that the order dated 27.08.2012 fully protects the interest of the Respondent. It is further stated that the Respondent has already received a sum of Rs.17.61 crores from the Petitioner and hence there is no need of any further protection. This Hon’ble Tribunals has already balanced equities while passing the aforesaid order.'

17. Mr. K.Datta, learned counsel appearing on behalf of the Petitioner would contend that although the cheques issued by the Petitioner have bounced, the reasons therefor was continuation of negotiations between the parties as also, an understanding arrived at by them that the cheques shall not be presented and in that view of the matter, there is absolutely no reason as to why the interim order dated 27.8.2012 shall not be made absolute.

18. Mr. Ganpathy, learned counsel appearing on behalf of the Respondent, on the other hand, urged that having regard to the fact that the Petitioner has taken recourse to suppressio veri and suggestio falsi and furthermore having not complied with the order of this Tribunal, in so far as non-paypment of subscription fee for the month of July, 2012, the interim order passed by this Tribunal should be recalled.

19. It was furthermore submitted that there has been a steady growth in the subscriber base of the Petitioner which would be evident from the Respondent’s reply dated 31.8.2012.

20. According to Mr. Ganpathy, the Cable and Satellite TV homes in Delhi in so far as the Petitioner is concerned having been estimated at 5.5 lakhs and the Petitioner having supplied 74,750 set top boxes, there is absolutely no reason as to why the Petitioner would continue to pay the subscription fees on the subscriber base of 27,000 which was fixed in the year 2010.

21. Learned counsel would furthermore contented that despite the fact that the Petitioner was granted heavy discounts keeping in view its financial difficulties, it having not abided by the commitments made by it by entering into the aforementioned MoU, no discretionary relief, far less an interim order by way of mandatory injunction should be passed in his favour.

22. Strong reliance in this behalf has been placed on paragraphs 16 and 17 of Dorab Cawasji Warden v. Coomi Sarob Warden, (1990) 2 SCC 117 which are as under:

'16. The relief of interlocutory mandatory injunctions are thus granted generally to preserve or restore the status quo of the last non-contested status which preceded the pending controversy until the final hearing when full relief may be granted or to compel the undoing of those acts that have been illegally done or the restoration of that which was wrongfully taken from the party complaining. But since the granting of such an injunction to a party who fails or would fail to establish his right at the trial may cause great injustice or irreparable harm to the party against whom it was granted or alternatively not granting of it to a party who succeeds or would succeed may equally cause great injustice or irreparable harm, courts have evolved certain guidelines. Generally stated these guidelines are:

(1) The plaintiff has a strong case for trial. That is, it shall be of a higher standard than a prima facie case that is normally required for a prohibitory injunction.

(2) It is necessary to prevent irreparable or serious injury which normally cannot be compensated in terms of money.

(3) The balance of convenience is in favour of the one seeking such relief.

17. Being essentially an equitable relief the grant or refusal of an interlocutory mandatory injunction shall ultimately rest in the sound judicial discretion of the court to be exercised in the light of the facts and circumstances in each case. Though the above guidelines are neither exhaustive nor complete or absolute rules, and there may be exceptional circumstances needing action, applying them as prerequisite for the grant or refusal of such injunctions would be a sound exercise of a judicial discretion.'

23. We have noticed heretobefore the contentions of the Respondent with regard to the estimated number of viewers i.e. 5.5 lakhs in Delhi. Stricto sensu the Petitioner is a defaulter.

24. However, by reason of the aforementioned order dated 27.8.2012, this Tribunal for all intent and purport sought to give substantial effect to the said MoU despite the fact that in respect of Delhi, only a sum of Rs.4.16 crores was said to be due as in August, 2011.

25. There cannot be any doubt or dispute that the Respondent has accepted the cheques offered by the Petitioner. It is true that the said cheques have bounced but the same had been replaced by Demand Drafts. The Respondent having accepted a substantial amount from the Petitioner without any demur whatsoever and having acted thereupon as a result whereof for all intent and purport a substantial part of its petition being Petition No.225 of 2012 stands allowed, I am of the opinion that no case has been made out for vacation of this Tribunal’s order dated 27.8.2012.

26. The agreement between the parties expired only in June, 2012.

In terms of Clause 8.1 of the Regulations, the terms of the agreement continues for a period of three months subject of course to the fact that the negotiations between the parties had started two months prior to the expiry of the agreement.

The commercial terms in that view of the matter shall continue upto September, 2012.

27. So far as passing of an order of injunction in mandatory term is concerned, it has been noticed by me heretobefore that for all intent and purport the contention of the Respondent had been substantially acceded to. It is one thing to say that the petition was not maintainable for the Delhi network only but it is another thing to contend that for the purpose of grant of interim injunction in mandatory form, the MoU on a pan India basis would be given effect to.

28. There cannot be any doubt or dispute that ordinarily while exercising its jurisdiction under Order XXXIX Rule 2 of the Code of Civil Procedure, the Court will insist on existence of a strong prima facie case.

29. However, it must be noticed that the same may represent the state of law in other fields, but in the matter of the broadcasting and cable industry, an additional fact is required to be taken into consideration that if an order of injunction and some times in mandatory form is not granted, subject of course upon protecting the interest of the broadcaster, the Multi Service Operator would lose it entire business as no viewer would continue to subscribe to the MSO who might not be telecasting an important channel.

30. The question of existence of a strong prima facie case and balance of convenience, t

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hus, must be judged on case by case basis by this Tribunal. The principles governing grant of mandatory injunction in a case of this nature cannot be equated with a case involving disputes over immovable property. 31. Moreover, as indicated heretobefore the Respondent even did not ask for an opportunity to file a short reply. Only when the interim order was passed, wisdom must have drawn upon it that it should ask for something more. If there has been a substantial growth to the subscriber base of the Petitioner, the said plea was available to it. It did not raise the said contention on that date. 32. It was more or less concerned with realization of its own dues which was the subject matter of the aforementioned Petition No.225 of 2012. 33. Furthermore, a broadcaster would always be ready and agreeable to enter into a subscription agreement with a Multi Service Operator which has a large viewership. In that sense not only the conduct of the Petitioner, but also that of the Respondent assumes significance. 34. While making the interim order dated 27.8.2012 absolute, it is directed that the Petitioner shall pay the stipulated monthly subscription fee not only for the month of July, 2012 with interest at the rate of 9% per annum but also shall go on making payments of the subscription fee on and from the date of restoration of the supply of signals of its channels. 35. This order is passed without prejudice to the rights and contentions of the parties in this matter as also the aforementioned Petition No.225 of 2012.