: 1 : IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. O.O.C.J. O.O.C.J. PETITION NO.650 OF 2008 PETITION NO.650 OF 2008 PETITION NO.650 OF 2008 UNDER CLAUSE XII OF THE LETTERS PATENT UNDER CLAUSE XII OF THE LETTERS PATENT UNDER CLAUSE XII OF THE LETTERS PATENT WITH WITH WITH ARBITRATION PETITION (LODGING) NO.794 OF 2008 ARBITRATION PETITION (LODGING) NO.794 OF 2008 ARBITRATION PETITION (LODGING) NO.794 OF 2008 Balaji Telefilms Limited & Ors. ...Petitioners. V/s. SGL Entertainment Limited & Ors. ...Respondents. Mr.Ram Jethmalani Senior Counsel with Mr. Pravin Samdani, Senior Counsel, Mr.Zal Andhyarujina, Mr.Ashwath Rau and Mr. Indranil Deshmukh i/by Amarchand Mangaldas and S.A.Shroff & Co. advs. for the Petitioners. Mr.Ravi Kadam Advocate General for Maharashtra with Mr.Nikhil Sakhardande, Mr.S.Mandal , Mr.Essaji Vahanvati i/by AZB & Partners, advs. for the Respondents. CORAM: CORAM: CORAM: J.H.Bhatia,J J.H.Bhatia,J J.H.Bhatia,J. (Vacation Judge) (Vacation Judge) (Vacation Judge) DATE : 3rd November, 2008. DATE : 3rd November, 2008. DATE : 3rd November, 2008. P.C.: P.C.: P.C.: 1. Leave has been granted. Arbitration Petition be registered. 2. This petition is filed under Section 9 of the Arbitration and Conciliation Act, 1996 by the petitioners seeking direction to restrain the respondents by way of temporary injunction from acting upon purported termination notice in respect of procurement and telecast of the serial programme known as ’Kyunki Saas Bhi Kabhi Bahu Thi’ (In short ’Kyunki’). : 2 : 3. To state in brief, petitioners are the producers of the programme known as ’Kyunki’ and this is being telecast by the respondents for the last about eight years or so. Fresh procurement agreement took place between the parties again on 7-6-2007. That agreement was modified on 18th August, 2008. According to the petitioners, the respondents are bound to telecast the programme as per the said agreement. Agreement is in respect of in all six programmes and ’Kyunki’ is one of them. As per the terms of the contract, as modified on 18-8-2008, the contract could not be terminated till December, 2008 and further if it was to be terminated, it could be done only by giving notice of three months to be issued only after December, 2008 and thus, the contract could be terminated at the earliest by 31st March, 2009 and not before that. However, in contravention of the terms of the contract between the parties, the respondents issued the notice dated 10-10-2008 terminating the contract of procurement and telecast in respect of ’Kyunki’ with effect from 10th November, 2008 on the ground of decrease in T.R.P. i.e., Television Rating Points. According to the petitioners, as per the terms of the contract, they have already invoked arbitration clause for reference of the matter to the Arbitral Tribunal and the petitioners have appointed one arbitrator and the : 3 : respondents have yet to appoint their own arbitrator. Arbitral Tribunal may take sometime to settle the matter between the parties. Pending the said proceeding before the Arbitral Tribunal, petitioners seek interim relief as stated above. According to them, it is necessary particularly because if the contract is terminated as per the notice issued by the respondents, the last episode, which may be telecast will be only on next Thursday, i.e. on 6th November, 2008. As the programme has been very successful and as it has been one of the top ten serials telecasted in the country by all the television channels, it would be improper to abruptly terminate the programme without concluding the story properly and this is not possible within a short span. It is contended by the petitioners that even though the T.R.P. has come down to some extent, it is because of the failure of the respondents in telecasting promotional advertisements, which is the responsibility of the respondents under the contract. If the telecast of the programme is stopped, it would adversely affect the reputation of the petitioners, who are leading television serial producers and would also cause irreparable financial loss. 4. On behalf of the respondents, affidavit-in-reply has been filed by one Jagdish Kumar, who is the Director of the respondent no.1. It is contended that as per the terms : 4 : of the contract, if the Television Rating Points (T.R.P.) is reduced by 20% after 1st July, 2008 in any three successive months, the contract could be terminated by giving notice of one month. In respect of ’Kyunki’, for the period ending June, 2008, average T.R.P. was 5.2% and by September, 2008, it was 3.2% and thus, the T.R.P. has decreased by about 32%. In view of the Clause 6(3) of the modified contract, respondents are well within the terms of the contract to terminate the contract. It is contended that decrease in T.R.P. is attributed primarily to a combination of viewership fatigue and low quality of content and programming in the last year, which has failed to create attraction with the target audiences. According to the respondents, they are the leaders among the T.V. channels in India and to maintain leadership, it is necessary that only programmes having high T.R.P. be telecasted. It is denied that there has been any fault on part of the respondents in telecasting promotional advertisements in respect of this programme as contended by the petitioners . 5. It is contended that as per the contract, petitioners are entitled only to fixed amount for producing and procuring each episode of the programme and thus, even if by termination of the contract in respect of ’Kyunki’, petitioners suffer financial loss, that can be compensated. : 5 : On the other hand, if the respondents are forced to telecast programme in the prime slot in spite of viewership fatigue and decline in quality of content and programming, the respondent no.1 as a channel will suffer grave and irreparable loss which could not be compensated. Therefore, it is contended that the petitioners have not made out any prima-facie case to grant any interim relief under Section 9 of the Arbitration and Conciliation Act, 1996. 6. Heard the learned senior counsel for both the sides. The learned senior counsel have taken me through the terms of the contract between the parties extensively particularly Clause (6) of the Contract. They have also taken me through the different statements in respect of promotional advertisements on the channels of the respondents for the purpose of promotion of the programme ’Kyunki’ during the relevant period. It is contended by the learned senior counsel for the petitioners that even if the T.R.P. of ’Kyunki’ has reduced to some extent during the relevant period, it is because of the failure of the respondents in giving promotional advertisements on the T.V. channels. On the other hand the learned senior counsel for the respondents contended that petitioners did not provide necessary material well in advance as per the contract and, therefore, it was not possible to prepare and : 6 : telecast promotional advertisements. He has also contended that to maintain popularity and leadership of the respondents’ channel, it is necessary that more promotional advertisements are telecast in respect of new serials and as a serial becomes old, number of promotional advertisements may be reduced. He contended that not only the number of promotional advertisements exclusively for the particular serial but also the "Promo Branded Multiples" for the Star Plus programmes have to be taken into consideration. He pointed out that during the month of August and September, 2008, 263 promotional advertisements exclusively for ’Kyunki’ were telecast while the programme was also sought to be promoted by the ’Promo Branded Multiples’ along with the another programme namely, "Kahani Ghar Ghar Kii" and that number was 925. In support of this they have relied upon chart of promotional programmes and the ’Promo Branded Multiples’ for Star Plus programme issued by TAM Media Research Pvt. Ltd. In my considered opinion, rival contentions in respect of supply of material within time or about the promotional programmes to promote ’Kyunki" need not be considered at this stage as the matter is already referred to the Arbitral Tribunal and this question of fact will have to be considered by the concerned arbitrators. At this stage, it will be necessary and sufficient to consider the terms of the contract between the parties. : 7 : 7. Clause 6.2 (b) and Clause 6.3 of the modified contract dated 18.8.2008 are relevant for the purpose of present dispute. They read as follows: 6.2 (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) from Balaji until December 31, 2008. If the relevant constituent of the Star Group proposes to cease or terminate procurement of such Specified 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 procurement of any Specified Programme (other than "Kahani Ghar Ghar kii") and 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 : 8 : involving the Indian national cricket team, or (iii) any comparable event or circumstance, shall be excluded for the purposes of determining the decrease in TRPs as above for the Specified Programmes (other than "Kahani Ghar Ghar Kii") during the Relevant Period. Also provided that promotions for the Specified Programmes (other than "Kahnai Ghar Ghar Kii") must be reasonably consistent with the promotions for comparable fiction based entertainment programmes broadcast by the Star Group." 8. From Sub-clause (b) of Clause 6.2, it is clear that contract can not be terminated until 31st December, 2008 and if the respondents propose to terminate procurement of the specified programmes including ’Kyunki’, it may be done only after December 31, 2008 and that too by giving three months prior notice. Thus, the termination could not be effected before 31st March, 2009. If the termination is to take place after 31st March, 2009, four weeks notice would suffice. However, Sub-clause (b) of Clause 6.2 is to be read in the light of Clause 6.3, which is non-obstante clause. From clause 6.3, it is clear that this clause would not be applicable to one of the programmes namely, "Kahani Ghar Ghar Kii". However, it is applicable to all the other programmes including disputed programme ’Kyunki’. As per this clause, in the event, applicable T.R.P. for the specified programme decreases by 20% percentage on an average over any three successive months ("Relevant Period") after July 1, 2008 as compared against the average June 2008, TRPs for that Specified : 9 : Programme, the procurement contract could be terminated by prior notice of 30 days to be issued by the respondents to the petitioners. Paragraph 12 of the petition clearly reveals that in spite of the fact that T.R.P. of ’Kyunki’ had substantially decreased when the Modified Agreement dated 18th August, 2008 was entered into by the parties and despite, the said fact, petitioners had accepted T.R.P. test. According to petitioners, the T.R.P. Test was accepted in good faith as the respondents had acknowledged that the same was relatable to lack of promotions and publicity for the said show and they agreed to increase the level of promotions and publicity after execution of August 2008 Agreement. The learned senior counsel for the petitioners contended that when the agreement was executed on 18th August, 2008, naturally reduction in the T.R.P. by 20% has to be considered for the month of July, 2008 and it could not be related to the month of June, 2008. As pointed out earlier, according to the respondents if compared with T.R.P. in June, 2008, it had decreased by 32% during the relevant period, i.e., July to September, 2008 and this gives right to the respondents under Clause 6.3 to terminate the contract by giving notice of one month. On perusal of the terms of the contract and the pleadings in paragraph 12 of the petition, there remains no doubt that the terms of the contract were correctly understood by the parties and were correctly incorporated : 10 : in the said document as per their understanding. Therefore, there is no scope for an interpretation different from what the language of the Clause 6.3 reveals. As per the said clause, it is clear that decrease by 20 percentage points on an average over any three successive months after July 1, 2008 as compared against the average June, 2008 TRP is relevant. In paragraph 6 of the affidavit-in-reply filed on behalf of the respondents, it is pointed out that the T.R.P. of ’Kyunki’ was 5.2 in June, 2008; it decreased to 3.7 in July and to 3.4 in August, 2008 and it further went down to 3.2 in September, 2008. Thus, T.R.P. had slipped down from 5.2 in the month of June, 2008 to 3.2 by September, 2008. On an average decrease in T.R.P. over the period of three months from July to September, 2008 is calculated at 32% and there appears no serious dispute about it. Prima-facie, it will be difficult to find any fault with the termination of the contract by the respondents. These findings are only prima-facie for the purpose of disposing of the present petition, which is for interim relief only and any observations made in this order shall not affect the proceedings, which may be taken before the Arbitral Tribunal. 9. The learned senior counsel for the petitioners pointed out that by the end of July already T.R.P. was 3.7 : 11 : and by September, 2008, it was 3.2 and, therefore, reduction was not by 20% from the date of modified agreement of August, 2008. However, this argument can not be accepted in view of the specific term of the contract incorporated in Clause 6.3 of the agreement. In paragraph 12 of the petition while these terms of the contract were admitted, attempts were made to show that in spite of decrease in T.R.P. by 28% over the T.R.P. of June, 2008, by the time the agreement of August, 2008 was entered into. Petitioners had accepted the T.R.P. test in good faith as the respondents had acknowledged that the same was relatable to lack of promotions and publicity of the said programme. On behalf of the respondents, attempt is made to show that there was no laxity or fault on the part of the respondents in respect of promotion and publicity advertisements but it is only because of the viewership fatigue in respect of programme ’Kyunki’ that the T.R.P. has been consistently going down. He contended that the petitioners had failed to supply the material about the episodes of the programme well in advance and, therefore, on some occasions promotional advertisements could not be telecast. The learned senior counsel for the respondents also contended that the programme has outlived its life and popularity because it has been telecast for the last about 8 years. It will require minute consideration of evidence to find out whether the decrease in the T.R.P. was due to : 12 : failure of the respondents in telecasting promotional advertisements or it was because of the lack of contents, which could attract viewers to the programmes. I do not feel it appropriate at this stage to enter into that question as it will have to be considered by Arbitral Tribunal. 10. The learned senior counsel for the respondents contended that under Section 41 (e) of the Specific Relief Act, 1963, an injunction cannot be granted to prevent the breach of a contract the performance of which would not be specifically enforced and he pointed out that under Section 14(1)(c), a contract which is in its nature determinable, can not be specifically enforced in law . He argued that in view of the terms of the contract between the parties, the contract could be determined in particular circumstances recorded therein and, therefore, the contract is determinable. He urged that at the most, petitioners may claim damages or compensation if the termination is found to be invalid by the Arbitral Tribunal. On the other hand, the learned senior counsel for the petitioners pointed out that as per the Clause 10.1 of the modified contract , this agreement is specifically enforceable at the instance of either parties and in the event of any breach or threatened breach by any party, other party shall be entitled, in addition to any other remedy, which may be : 13 : available to it, to seek (i) a decree or order of specific performance or mandamus to enforce the observance and performance of such covenant, obligation or other provisions, and (ii) an injunction restraining such breach or threatened breach. The learned senior counsel urged that in view of this specific agreement between the parties, provisions of Section 14(1)(c) can not be invoked and it can not be contended that the contract is not enforceable under the law. In my considered opinion, even though such a clause has been incorporated in the agreement, it is contrary to the provisions of Section 14(1)(c) read with Section 41(e) of the Specific Relief Act, 1963. Petitioners have knocked the doors of the Court seeking relief under Section 41 of the Specific Relief Act read with Section 9 of the Arbitration and Conciliation Act, 1996. When the Court is called upon to consider whether relief can be granted under Section 41 or not, it will be necessary for the Court to consider the provisions under Section 14(1)(c) also. If the decree for specific enforcement of the contract cannot be passed in view of the bar under Section 14(1), it will be difficult to grant interim relief of that nature. 11. The learned senior counsel for the petitioners contended that when the matter is referred to the Arbitrators, it is necessary to protect petitioners against : 14 : the termination of the contract by granting interim relief and in support of this, the learned senior counsel relied upon the judgment of the learned Single Judge of this Court in Home Media (I) P. Ltd. v. Fun Multiplex Pvt. Ltd. Home Media (I) P. Ltd. v. Fun Multiplex Pvt. Ltd. Home Media (I) P. Ltd. v. Fun Multiplex Pvt. Ltd. 2008 (5) LJSOFT (URC) 19 2008 (5) LJSOFT (URC) 19 2008 (5) LJSOFT (URC) 19 decided on 2-4-2008 wherein there was agreement to display advertisements by installing plasma/LCD screens and the dispute had arisen between the parties on account of non reimbursement of service tax by the petitioners. Petitioners sought injunction restraining the respondents from removing plasma/LCD screens from multiplex cinema theatres. Interim relief was granted as the learned Judge found that in spite of agreement contemplating issuance of demand notice of 30 days before the termination, there was no evidence to show that demand notice was issued in accordance with Clause 8.1 of the agreement. I find that the facts and circumstances of that case are different. On the other hand, the learned senior counsel for the respondents placed reliance upon Indian Oil Indian Oil Indian Oil Corporation Ltd. v. Amritsar Gas Service and Others Corporation Ltd. v. Amritsar Gas Service and Others Corporation Ltd. v. Amritsar Gas Service and Others (1991) 1 Supreme Court Cases 533 (1991) 1 Supreme Court Cases 533 (1991) 1 Supreme Court Cases 533 wherein distributorship agreement between the Indian Oil Corporation Ltd. and the respondent Amritsar Gas Service was terminated and the matter was referred to the Arbitrator. Though the contract was found to be determinable under Section 14(1)(c), the arbitrator passed the award granting relief of restoration of distributorship. Their Lordships of the Supreme Court : 15 : held that the arbitrator had fallen in error of law while granting that relief when there was clear finding that the contract was determinable under Section 14(1)(c). Their Lordships observed as follows in paragraph 12: "12. The arbitrator recorded finding on Issue No.1 that termination of distributorship by the appellant-Corporation was not validly made under clause 27. Thereafter, he proceeded to record the finding on Issue No.2 relating to grant of relief and held that the plaintiff-respondent 1 was entitled to compensation flowing from the breach of contract till the breach was remedied by restoration of distributorship. Restoration of distributorship was granted in view of the peculiar facts of the case on the basis of which it was treated to be an exceptional case for the reasons given. The reasons given state that the Distributorship Agreement was for an indefinite period till terminated in accordance with the terms of the agreement and, therefore, the plaintiff-respondent was entitled to continuance of the distributorship till it was terminated in accordance with the agreed terms. The award further says as under: "This award will, however, not fetter the right of the defendant Corporation to terminate the distributorship of the plaintiff in accordance with the terms of the agreement dated April 1, 1976, if and when an occasion arises." This finding read along with the reasons given in the award clearly accepts that the distributorship could be terminated in accordance with the terms of the agreement dated April 1, 1976, which contains the aforesaid clauses 27 and 28. Having said so in the award itself, it is obvious that the arbitrator held the distributorship to be revokable in accordance with clauses 27 and 28 of the agreement. It is in this sense that the award describes the Distributorship Agreement as one for an indefinite period, that is, till terminated in accordance with clauses 27 and 28. The finding in the award being that the Distributorship Agreement was revokable and the same being admittedly for : 16 : rendering personal service, the relevant provisions of the Specific Relief Act were automatically attracted. Sub-section (1) of Section 14 of the Specific Relief Act specifies the contracts which cannot be specifically enforced one of which is a contract which is in its nature determinable. In the present case, it is not necessary to refer to the other clauses of sub-section (1) of Section 14, which also may be attracted in the present case since clause (c) clearly applies on the finding read with reasons given in the award itself that the contract by its nature is determinable. This being so granting the relief of restoration of the distributorship even on the finding that the breach was committed by the appellant-Corporation is contrary to the mandate in Section 14(1) of the Specific Relief Act and there is an error of law apparent on the face of the award which is stated to be made according ’to the law governing such cases’. The grant of this relief in the award cannot, therefore, be sustained." 12. The learned senior counsel for the respondents also placed reliance upon Percept D’Mark