IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO. 2125 OF 2009 IN SUIT NO. 1408 OF 2009 Edelweiss Securities Limited & anr ........ Plaintiffs versus Indian Express Newspapers (Mumbai) Ltd.........Defendants. Mr. S.U. Kamdar i/b. Rajani Associates adv. For the Plaintiffs Mr. D.D. Madon Sr. counsel i/b. Ms. Poorvi Kamani adv. For the Defendants. CORAM: A. P DESHPANDE, J. DATED : 7th July, 2009. P. C.: By consent of both the learned counsel appearing for the parties Notice of Motion is taken up for final hearing . 1. The Plaintiff no.1 is a public limited company registered under the Compani’s Act 1956 and is engaged in the business of stock broking and is a member broker of the National Stock Exchange of India and also Bombay Stock Exchange Limited. The Plaintiff no.1 is a subsidiary of plaintiff no.2 company. Plaintiff nos. 1 and 2 are are in occupation of more than one premises in a building owned by the defendant known as Express Towers. For the purposes of business the plaintiffs have taken the premises from the defendant as a lessee and/or licensee and are carrying on their business in the said premises. Having regard to the nature of the business of the Plaintiffs, the plaintiffs have installed VSAT and dish antennas. It is a matter of record that the plaintiffs have, as a matter of fact installed six VSAT and dish antennas on the second floor terrace and had led communication cable from the dish antenna to the dealing room. 2. At the outset, it is necessary to state that the subject matter of the present suit constitutes only one VSAT and dish antenna and does not involve any premises or any of the other five VSAT and dish antennas, which is hereafter referred to as suit antenna. The plaintiff no.1 and the defendant entered into an agreement/understanding which is reflected in the letter dated 19-1-2007 under which the defendant granted permission to install the suit VSAT and dish antenna on the second floor terrace. Perusal of the agreement/understanding reveals the terms and conditions subject to which and the period for which the defendant granted license to the plaintiff to install and operate the VSAT and dish antenna. It is revealed from the said document that the defendant granted license to the plaintiff to install VSAT and dish antenna on second floor terrace and for laying communication cables from the VSAT and dish antenna to the dealing room of the plaintiff no.1. The amount of compensation agreed between the parties was Rs. 27.900/- per month payable in advance. The lease term/period was 33 months commencing from 1-1-2007 to 30-9-2009. After expiry of the period of license, the plaintiff has been granted an option to renew the same for a further period of 33 months subject to the escalation of 20% of the amount of compensation at the time of renewal. Certain amount was also deposited by way of security. The important clause which deals with termination of the license is clause 8 which reads thus: “Either may terminate the agreement with a three months notice period in the event of breach of the terms of the MOU or if found to conflict with any rule, order or law.” 2. Acting under clause 8 the defendant issued a notice terminating the MOU vide letter dated 22-1-2009. The letter of termination does not spell out any reason for termination of MOU. 3. In the above set of facts the plaintiffs have instituted the present suit claiming relief of permanent injunction restraining the defendant from acting upon the said letter dated 22-1-2009 purporting to terminate the MOU dated 19-1-2007. Further relief of declaration is also sought that the MOU dated 19-1-2007 is valid, binding and subsisting. In tune with, substantive prayers made in the suit, Notice of Motion is taken out for claiming temporary injunction. 4. According to the plaintiff, during the subsistence of the license period of 33 months ending with 30-9-2009, the defendant could terminate the license only if the plaintiff is guilty of breach of MOU or in the event of breach of any rule, order or law, and in no other eventuality could the defendant taking recourse to clause 8 of the MOU terminate the license. 5. According to the defendant the suit filed in the present form is not maintainable in as much as there is no previty of contract between the plaintiff no.2 and the defendant. It is then stated that it was not obligatory on the part of the defendant to mention the reason for termination in the notice terminating the MOU. By filing an affidavit in reply the defendant has assigned the reason as to why the defendant has terminated the MOU and the reason assigned is that the plaintiff no.1 has assigned or transferred its right under the agreement and has permitted the Plaintiff no.2 to use the suit antenna. 6. Having regard to the nature of the business carried on by the Plaintiff the same is dependant on the use of VSAT dish antenna and its connectivity to National Stock Exchange and Bombay Stock Exchange. The defendant has consciously permitted the plaintiff to tie up communication with NSC and BSC and for that purpose issued no objection letter to NSC and BSC who in turn installed the apparatus to facilitate the business. Having regard to the very nature of business it can be safely said that if the plaintiff succeeds in making out a prima facie case then, injunction must follow as otherwise the Plaintiff would be put to suffer irreparable loss on account of disruption of the business causing serious damage to the business, reputation and good will, besides causing inconvenience to the subscribers/consumers which cannot be compensated in terms of money. 7. Coming to the question of the prima facie case suffice it to point out that there is no obvious or patent breach of any term of the agreement/MOU which would permit the defendant to terminate the same. The breach of the term alleged by the defendant is in the nature of permitting the use of the imputs from VSAT and dish antenna also by the plaintiff no.2 and/or it is other subsidiaries. According to the defendant as the permission granted by it was a “bare permission” the plaintiff no.1 could not have permitted use of the VSAT dish antenna by the Plaintiff no.2. There is no express stipulation in that regard in the agreement/MOU. The learned counsel for the Plaintiff has relied upon another license agreement entered into by the Plaintiff no.2 with the defendant which is placed on record page 23 in support of its case, to the effect that the plaintiff no.2 was permitted to use the premises taken on license for its use by the plaintiff no.2, itself or its subsidiaries, associates or group companies. In my opinion, it would not be proper at this stage to go into the question as to whether permitting use of VSAT dish antenna by plaintiff no.2 would constitute breach of the term of the agreement/MOU. The said issue is debatable and can be addressed in the trial. The plaintiff contends that as the plaintiff no.1 is a subsidiary of plaintiff no.2, use of VSAT dish antenna which is subject matter of the suit can be used by the plaintiff no.2 as well and that there is no breach of any term. As I am of the considered opinion that as there is no obvious or patent breach of any of the terms of the agreement, the defendant is not justified in terminating the agreement and thus the Plaintiff is entitled to ad-interim relief as prayed for. 8. In the result, I hold that the Plaintiffs have succeeded in establishing a prima facie case for grant of temporary injunction more so when the termination is prior to the expiry of license period. The Plaintiff need to be protected till the expiry of the period of license. I am also of the view that balance of convenience lies in favour of the plaintiff. Before I conclude, it will not be out of place to point out what I have observed in the order dated 8th May 2009 that the learned counsel for the defendant had pointed out urgency in the matter of water proofing the terrace on the second floor for the reason that there was leakage of water in the premises beneath the second floor terrace which is in occupation of a third party, and in response to the same the learned counsel for the plaintiff had assured the court that the plaintiff would co-operate in the water proofing of the terrace by the defendant, so that the leakages could be stopped. Relying on the said assurance and expecting the plaintiff to act justly and fairly in that regard I proceed to allow the Notice of Motion in the following terms. 9. I restrain the defendant by an order of temporary injunction from acting upon the letter dated 22-1-2009 purporting to terminate the MOU dated 19-1-2007 and from disturbing and/or removing the plaintiff’s communication equipment including VSAT dish antenna from the second floor terrace till the expiry of the licence period stipulated in the MOU dated 19-1-2007 i.e. till 30th September, 2009. (A. P. Deshpande, J.)