IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL (LOD) NO.658 OF 2008 APPEAL (LOD) NO.658 OF 2008 APPEAL (LOD) NO.658 OF 2008 IN IN IN ARBITRATION ARBITRATION ARBITRATION PETITIOUN (LOD) NO.794 OF 2008 PETITIOUN (LOD) NO.794 OF 2008 PETITIOUN (LOD) NO.794 OF 2008 Balaji Telefilms Ltd. and others ..Appellants. (Org.Petitioners) V/s. SGL Entertainment Ltd. and others ..Respondents (Org.Respondents) Mr.Janak Dwarkadas, Sr.Counsel with Mr.Pravin Samdani, Sr.Counsel with Mr.Zal Andhyarujina, Mr.Ashwanath Rau, Tapan Deshpande, Mr.Manu Kulkarni i/b Amarchand Mangaldas and S.A.Shroff and Co. for the appellants. Mr.Ravi Kadam, Advocate General with Mr.Nikhil Sakhardande, Mr.Shiva Mandal, Mr.Rehan Rajadhyaksha and Mr.Paras Parekh i/b.AZB & Partners for respondents. CORAM : J.P.DEVADHAR AND CORAM : J.P.DEVADHAR AND CORAM : J.P.DEVADHAR AND S.J.KATHAWALLA, JJ. S.J.KATHAWALLA, JJ. S.J.KATHAWALLA, JJ. (VACATION BENCH) (VACATION BENCH) (VACATION BENCH) DATED : 7TH NOVEMBER, 2008. DATED : 7TH NOVEMBER, 2008. DATED : 7TH NOVEMBER, 2008. P.C. :- P.C. :- P.C. :- 1. Heard learned counsel for both the parties. 2. This appeal is directed against the decision of the learned Single Judge dated 3rd November, 2008 whereby the petition filed by the appellants under section 9 of the Arbitration and Conciliation Act, 1996 has been dismissed. - = : 2 : = - 3. Pending the Arbitration proceedings, the appellants had filed the above petition seeking a temporary injunction restraining the respondents from discontinuing the procurement and telecasting of the serial "Kyunki Sas Bhi Kabhi Bahu Thi" (‘Kyunki’ for short) in any manner whatsoever pursuant to the notice dated 10th October, 2008. 4. It is pertinent to note that the respondents have been telecasting as many as six serials produced by the appellants. However, the dispute is only regarding the serial "Kyunki" which is being telecasted by the respondents since last eight years pursuant to various agreements entered into by and between the appellants and the respondents. 5. On 18th August, 2008 both the parties entered into a fresh agreement whereby some of the earlier agreements were terminated and some of the agreements were modified. The said agreement was applicable in respect of all the six serials produced by the appellants and telecasted by the respondents. Clauses 6.2 and 6.3 of the agreement dated 18th August, 2008 (to the extent relevant) read thus :- "6.2 On and with effect from July 1, 2008, the - = : 3 : = - Content Supply Agreements shall stand modified to the extent set out herein:- (a) ...... (b) With respect to the Specified Programmes listed in Schedule F, Schedule F, Schedule F, the relevant constituent of the Star Group shall not cease or terminate procurement of any of the Specified Programmes (as per Schedule F Schedule F Schedule F) from Balaji until December 31, 2008. If the relevant constituent of the Star Group proposes to cease or terminate procurement of such Specific Programmes after December 31, 2008, such relevant constituent of the Star Group shall be required to provide at least three (3) months prior written notice of such termination or cessation to Balaji. For the avoidance of doubt, it is clarified that 3 months notice for termination as aforesaid can only be given by the aforesaid relevant constituent of the Star Group after December 31, 2008. However, the period of three (3) months shall stand reduced to four (4) weeks for termination after March 31, 2009. 6.3 Notwithstanding Article 6.2, the relevant constituent of the Star Group shall be entitled to terminate the relevant Content Supply Agreement by issue of a prior notice of thirty (30) days to Balaji, in the event the applicable TRPs for such Specified Programme decrease by 20 percentage points on an average over any three (3) successive months ("Relevant Period") after July 1, 2008 as compared against the average June 2008 TRPs for that Specified Programme. Provided that, any period during which there is a similar decrease of 20% or more in the TRPs of the three (3) comparable fiction based entertainment programmes (excluding any television programme broadcasted on a television channel owned by Star Group or any of their Affiliates) having the highest TRPs, by reason of diversion in viewership due to: (i) broadcasting of any significant Indian political event; or (ii) broadcasting of cricket matches of the Indian Premier League or cricket matches involved the Indian national cricket team, or (iii) any comparable event or circumstances, shall be excluded for the purposes of determining the decrease in TRPs as above for the Specified Programme (other than "Kahani Ghar Ghar Kii") during the Relevant Period. Also provided that promotions for the Specified Programmes (other than "Kahani Ghar Ghar Kii") must be reasonably consistent with the promotions for comparable fiction based entertainment - = : 4 : = - programmes broadcast by the Star Group. " 6. Perusal of the aforesaid clauses clearly show that under Clause 6.2 the respondents could not terminate any of the serials until 31st December, 2008. However, under Clause 6.3 the respondents except in the circumstances set out therein, by giving 30 days notice could terminate procurement of any of the serials (except in the case of "Kahani Ghar Ghar Kii") even before 31/12/2008, only if the television rating point (TRP) of the serial decreases by 20 percentage point, on an average over any three successive months ("relevant period") after 1st July, 2008 as compared against the average of June 2008 TRP’s for that specified programme. Clause 6.3 further provided that the respondents shall provide adequate level of promotions to the show (other than "Kahani Ghar Ghar Kii") reasonably consistent with the promotions for comparable fiction based entertainment programmes broadcasted by the respondents. 7. By a notice dated 10/10/2008, the respondents informed the appellants that during the three successive months after 1st July, 2008, TRP of the serial "Kyunki" had decreased by about 32% and by invoking clause 6.3 of the agreement dated 18th August, 2008, gave thirty days notice for terminating - = : 5 : = - the serial "Kyunki". There is no dispute that during the relevant period the TRP of "Kyunki" had decreased by 32%. 8. In view of the dispute, the appellants invoked the Arbitration clause and pending commencement of the arbitral proceedings filed a petition under section 9 of the Arbitration and Conciliation Act, 1996 seeking temporary injunction to restrain the respondents from discontinuing the procurement and telecast of the serial "Kyunki" pursuant to the notice dated 10/10/2008. As the learned Single Judge has dismissed the above petition on 3/11/2008, the appellants have filed the present appeal. 9. Mr.Dwarkadas, learned senior Advocate appearing on behalf of the appellants submitted that the learned Single Judge erred in holding that the contract is determinable. He submitted that it cannot be argued by the respondents that the agreement is determinable and specific performance of the contract cannot be sought by the appellants. He submitted that in fact under Clause 10.1 of the agreement parties had agreed that they would be entitled to seek specific performance in the event of breach of any performance and also entitled to seek an injunction. Mr.Dwarkadas - = : 6 : = - has also submitted that in any event under section 42 of the Specific Relief Act, an injunction can be granted by this Court to enforce a negative stipulation.He submitted that clause 6.2 contains a negative covenant i.e. prohibiting the respondents from terminating the agreement before 31st December, 2008. In support of his contention he has relied on the following decisions:- a) Gujarat Bottling Co. Ltd. V/s. Gujarat Bottling Co. Ltd. V/s. Gujarat Bottling Co. Ltd. V/s. Coca Cola Co. Coca Cola Co. Coca Cola Co. [(1995) 5 S.C.C. 545 (1995) 5 S.C.C. 545 (1995) 5 S.C.C. 545] b) Dorab Cawasji Warden V/s. Coomi Dorab Cawasji Warden V/s. Coomi Dorab Cawasji Warden V/s. Coomi Sorab Warden Sorab Warden Sorab Warden [1990 (2) S.C.C. 117 1990 (2) S.C.C. 117 1990 (2) S.C.C. 117] c) Vijaya Materials Pvt. Ltd. V/s. Vijaya Materials Pvt. Ltd. V/s. Vijaya Materials Pvt. Ltd. V/s. Bikash Chandra Deb Bikash Chandra Deb Bikash Chandra Deb [A.I.R. 1996 Calcutta A.I.R. 1996 Calcutta A.I.R. 1996 Calcutta 77 77 77] Mr.Dwarkadas has also submitted that even if it is argued that in view of clause 6.3, clause 6.2 is not applicable, the respondents cannot terminate the agreement on the ground of decreased TRPs because they have failed to promote the serial "Kyunki" as provided in the said clause 6.3. 10. Mr.Ravi Kadam, Senior Advocate appearing on - = : 7 : = - behalf of the respondents submitted that since clauses 6.2 and 6.3 speak about the manner in which the contract can be terminated, after the period prescribed therein, by no stretch of imagination, it can be contended that the agreement is not determinable. He submitted that Articles 9 & 10 (more particularly Articles 9.3 and 10.1) of the Content Supply agreement of June, 2007 which is modified by the agreement dated 18/8/2008, establishes beyond doubt that, even that agreement was determinable. He submitted that not only the agreement is determinable but also clause 6.2 cannot be said to contain any negative covenant. He submitted that in any event clause 6.3 completely negatives / nullifies the effect of clause 6.2.He has further submitted that admittedly TRPs of the serial "Kyunki" had decreased because of which the respondents became entitled to issue the notice on 10th October, 2008 declining to telecast the same after 30 days from the issue of the said notice. He submitted that as far as promotion of the serial is concerned, they have abided by the agreement setout in clause 6.3 and the appellants are wrongly contending otherwise. 11. We have noted that the learned Single Judge has in paragraph 9 of the order in appeal set out the arguments on behalf of the respondents in support of - = : 8 : = - their contention that no fault can be pointed out qua promotion of the serial "Kyunki". However, it is argued by Mr.Dwarkadas on behalf of the appellants that the learned Single Judge has not given specific finding on the aspect of promotion of the serial by the respondents during the period from 18th August, 2008 to 30th September, 2008. We have, therefore, heard the parties on this issue at some length. 12. Mr.Dwarkadas has submitted that the appellants had repeatedly drawn the attention of the respondents about the requirements of increased promotion of serial "Kyunki". In support of this contention he has taken us through a letter dated 30th August, 2008 addressed to the respondents which reads as under:- "This has reference to promotions of our shows on Star network. You will appreciate that we are trying our best efforts to deliver the ratings for our shows on the channel. We now request your support for more promotion of our shows on the channel so that they can deliver even better ratings." Mr.Dwarkadas has also pointed out that on 1st September, 2008 the appellants had written a letter to the respondents enclosing the summary report on promotion for the shows for perusal of the - = : 9 : = - respondents with a request to do the needful. 13. It will not be out of place for us to deal with these letters here itself. In the letter dated 30th August, 2008 there is not an iota of complaint made by the appellants pertaining to any lack of promotion of any serial on the part of the respondents. In the said letter the appellants had recorded that they are making best efforts to deliver the rating of their shows and had only requested support from the respondents for more promotions so that they can deliver better ratings. In fact, the respondents on the very next day i.e. on 31st August, 2008 wrote to the appellants and enquired whether they were talking of any particular show or about all shows and requested the appellants to provide them with the specifics. The appellants on the next day i.e. 1/9/2008 enclosed the summary report on promotions of all the shows of the appellants and requested the respondents to do the needful. Even this report contained only promotions for the period from 18th August, 2008 to 23rd August, 2008 (that is only 6 days) and nothing is mentioned about the serial "Kyunki" in particular. It is an admitted position that thereafter not a whisper is made by the appellants about the alleged dissatisfactory promotion - = : 10 : = - of the serial "Kyunki" by respondents till 10th October, 2008 i.e. when the said notice invoking clause 6.3 of the agreement was issued by the respondents to the appellants. 14. Mr.Dwarkadas has also taken us through a certificate issued by Tam Media Research (Tam) which inter alia shows that as against 216 programme promos of Kyunki in June, 2008 the appellants displayed / exhibited only 204 programme promos of Kyunki between 1st and 17th August, 2008 and 58 programme promos between 18th and 31st August, 2008. From the said certificate he pointed out that there were no programme promos for the months of July and September, 2008 pertaining to the serial "Kyunki". He submitted that dual promotions about which the respondents have mentioned in their reply are shown between 12 a.m. and 6 a.m. and,therefore, are of no consequence. He also submitted that the promotion figures pertaining to the serial "Kyunki" are miniscule as compared to the promotion by the respondents of serials "Bidai" and "Raja Ki Ayegi Baraat". 15. As against this Mr.Kadam pointed out that when the appellants filed the petition they had relied on incomplete information qua promotion of the serial "Kyunki". He pointed out that respondent no.1 also - = : 11 : = - undertook dual promotion (i.e. with other programmes) for "Kyunki". This fact has been deliberately omitted by the appellants. He has relied on a certificate also of Tam Media Research report (annexed as Exhibit A to the respondents’ reply) and pointed out that apart from 204 and 58 promo programmes of "Kyunki" during the period August 2008, dual promotion for promos (branded multiples) were also displayed and accepted by the respondents in respect of the serial "Kyunki" which were 387 and 206 in August, 2008 and 382 in September, 2008. He submitted that the respondents who are in the relevant field for the last several years were at all times aware of the dual promotion and ought to have obtained a complete survey from Tam Media Research and fairly placed the same before the Court in stead of misleading the Court by not giving figures pertaining to the double promotion. Mr.Kadam submitted that only after this fact of suppression was pointed out by the respondents in their affidavit in reply, the appellants in their rejoinder admitted the same but came up with an excuse that the same were not of much consequences because large part of the double promos were telecast between 12 a.m. and 6 a.m. Mr.Kadam submitted that this contention of the appellant is also denied and disputed by the respondents. - = : 12 : = - 16. Mr.Kadam further submitted that the appellants have alleged that the respondent no.1 has breached the condition to provide promotion in relation to "Kyunki" "reasonably consistent with the promotion for comparable fiction based entertainment programme broadcast by Star group". He submitted that as pointed out by respondent no. 1 in paragraphs 10 to 13 of their affidavit in reply, the publicity has to be "comparable" in all respects. The test for the programme to be "comparable" is two fold -(a) genre of the programme in question and (b) the period for which the programme has been running. For a new programme the intention of the promos for such new programmes is primarily to acquaint and bring to the knowledge of the viewers, the existence of such programme, the time slots and the concept underlying the programme. On the other hand, for a well established programme (like Kyunki), generic promos would not suffice and market practice is to provide the viewers with some clips of the forthcoming episodes of the programme to retain viewership and therefore an episode specific promotion becomes necessary. 17. Mr.Kadam further submitted that clause 2.4 of the Content Supply agreement required the appellants to deliver the material for each episode of their programme and in the case of "Kyunki" the - = : 13 : = - appellants were required to deliver the material atleast seven days prior to the date of the first telecast. He submitted that it is amply clear that this requirement is to enable the respondents to make and air the promotional film specific to the episode in question. He submitted that the appellants have suppressed the fact that they have breached this obligation on several occasions by delaying in providing the programme for telecast. In fact, on several occasions the appellants had supplied the material relating to "Kyunki" only a day before the first telecast of a particular episode of Kyunki. He submitted that this delay and consequences thereof have been highlighted on several occasions to the appellants and the respondent No.1 had specifically craved leave to refer to and rely upon this correspondence in paragraph 14 of their reply. He submitted that the appellants have not even sought inspection of the said correspondence thereby admitting complete knowledge of the same. He submitted that the appellants have themselves defaulted in providing their material in time and thus committed breach of their contractual obligation. As a result, the promotion of the serial "Kyunki" was hampered. He submitted that the appellants now cannot take advantage of their own wrong doings. - = : 14 : = - 18. Mr.Kadam further submitted that comparison of promos of "Kyunki" with other new programmes such as "Bidai" and "Raja Ki Ayegi Baraat" is misplaced and misconstrued. Kyunki has been aired and broadcasted by the respondents since 2000 i.e. since the last 8 years. Bidai and Raja Ki Ayegi Baraat are launched in September, 2007 and 2008 respectively. He drew our attention to Exhibit A to the reply as well as the report of TMA which highlighted the comparison of promotion for Kyunki, Bidai and Raja Ki Ayegi Baraat and submitted that despite the difference between the programmes in terms of the tenure, the respondent no.1 has been promoting Kyunki consistent with such programmes namely Bidai and Raja Ki Ayegi Baraat. Mr.Kadam further submitted that Bidai and Raja Ki Ayegi Baraat are not appropriate programmes to form the basis of comparison. The proper method is to compare a programme with the programme of the same genre and also the duration during which the programme has been running. He took us through the extract of TAM Media Research Report (Exhibit ‘C’ to the affidavit in reply) which highlights the comparison between promos of "Kyunki" and other programmes like "Baa, Bahu Aur Baby" and "Kumkum" which were being telecasted since 2005 and 2002 respectively. He submitted that these are the comparable programmes and the report clearly evidences that Kyunki has been - = : 15 : = - provided much more promotion than those comparable programmes and, therefore, any allegation to the contrary is devoid of any merits. 19. Mr.Kadam submitted that the allegations of the appellants that the respondents acted fraudulently and with malafide intention has to be rejected at the out set. He submitted that the agreement is in respect of 6 of the serials of the appellants and the respondents have decided not to telecast only one serial that too under compelling circumstances. He submitted that if the respondents had any malafides towards the appellants, then they would not have continued with other 5 serials of the appellants. He submitted that TRPs of the serial "Kyunki" had gone down mainly on account of fatique on the part of the viewers. He submitted that the income of the respondents is based on the advertisements that they display during the period when the serial is being telecast. With poor TRPs, the revenue generated from the advertisements would also go down and cause grave loss and prejudice to the respondents. Apart from loss of revenue, telecasting the serial which has poor TRPs would also seriously harm the reputation of the respondents who are market leaders in the field. It is only for this reason that the respondents decided to stop the serial from being telecast by them and not - = : 16 : = - for any malafides as alleged. He submitted that, therefore, the balance of convenience is also in favour of the respondents. 20. On careful consideration of the rival submissions, we find it difficult to accept the arguments canvassed on behalf of the appellants. 21 At the outset, we may note that under clause 6.2 of the agreement dated 18th August, 2008 the respondents could terminate procurement of any of the serials only after 31st December, 2008 that too by giving three months notice. However, clause 6.3 of the agreement clearly provides that the respondents could terminate procurement of any of the serials (except "Kahani Ghar Ghar Ki") prior to 31st December, 2008, if the TRPs of any of serial decreases by 20% during the relevant period, that is, from 1st July, 2008 to 30th September, 2008. Admittedly, the TRPs of the serial "Kyunki" during the relevant period had decreased by 32%. Therefore, on a plain reading of Clauses 6.2 and 6.3 of the agreement dated 18th August, 2008, we are prima facie of the opinion, that clause 6.2 does not contain any negative covenant so as to restrain the respondents from terminating procurement of the serial whose TRPs had decreased by 20% points during the relevant period and that the - = : 17 : = - contract was determinable. As regards the applicability of clause 10.1 of the agreement dated 18/8/2008, we agree with the reasoning given by the learned Single Judge. 22. Assuming that the question as to whether the contract was determinable or not, is debatable, in the facts of the present case, in view of clause 6.3 of the agreement dated 18th August, 2008 the respondents were within the legal framework in terminating procurement of the serial "Kyunki" whose TRPs had admittedly decreased by 32% points during the relevant period. 23. However, it is contended by the appellants that the respondents have failed and neglected to perform their reciprocal obligation of promoting the serial "Kyunki" as contemplated under clause 6.3 of the agreement dated 18th August, 2008 and, therefore, the respondents must be restrained from terminating procurement of the serial "Kyunki" from 10th November, 2008. We see no merit in this contention because, firstly, there is no material on record to show that during the relevant period, the appellants had made any grievance that the respondents are not promoting the serial "Kyunki" as per clause 6.3 of the agreement. As noticed earlier, in the letter dated - = : 18 : = - 30th August, 2008 the appellants had generally sought more promotions and there is no specific grievance in respect of the promotion of the serial "Kyunki". Secondly, in the petition it was stated that during the relevant period the promotions given to the serial was 262 (204+58) when in fact the promotion given during the relevant period was 1237. In these circumstances, the argument that the respondents have failed to promote the serial "Kyunki" as contemplated under clause 6.3 cannot be accepted. 24. As regards the comparison of the promotion of the serial "Kyunki" with other serials for the purpose of ascertaining the TRPs there is dispute between the parties. According to the appellants the promotion of the serial "Kyunki" has to be compared with the promotion of the serial "Bidai" and "Raja ki Ayegi Baraat" whereas, according to the respondents the comparison has to be done with programmes of the