IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.BHAVADASAN TUESDAY, THE 5TH APRIL 2011 / 15TH CHAITHRA 1933 OP(C).No. 1210 of 2010(O) ------------------------------------- PETITIONERS ---------------------- ASIANET SATELITE COMMUNICATION LTD. 2A-SECOND FLOOR, LEELA INFOPARK,TECHNOPARK KAZHAKKOOTTAM,THIRUVANANTHAPURAM 695 581, FORMERLY SITATUED AT KARIMPANAL ARCADE EAST FORT THIRUVANANTHAPURAM. BY ADV. SRI.SAJI VARGHESE RESPONDENT(S): -------------------------- 1. P.KRISHNAN, S/O.SAROJINI AMMA PRESIDENT, MANJERI MUNICIPAL CABLE VIEWERS ASSOCIATION, SOUTH AREA COMMITTEE MANJERI AMSOM DESOM, MANJERI POST, MALAPPURAM DISTRICT.676 121 2. P.VENUGOPALAN, S/O,CHATHU .P KADENGARA HOUSE, SANTHIGRAM, MANJERI AMSOM DESOM, MANJERI POST, MALAPPURAM DISTRICT.676 121 3. S.SURESH KUMAR, S/O.LATE SUKUMARAN MENON, PROPRIETOR M/S. CASCAM, CABLE TV NETWORK IST DEFENDANT, VALPPARAPPADI,MANJERI AMSOM DESOM, MANJERI POST, MALAPPURAM DISTRICT.PIN- 676 121 R1 & R2 BY SRI.M.M.ABDUL AZIZ, SENIOR ADVOCATE BY ADV. SRI. M.A.ABDUL HAKKIM R3 BY ADV. SRI. G.RAJAGOPAL THIS OP (CIVIL) HAVING BEEN FINALLY HEARD ON 25/03/2011, THE COURT ON 05/04/2011 DELIVERED THE FOLLOWING: sts OP(C)NO.1210/2010 APPENDIX PETITIONER'S EXHIBITS: P1 COPY OF THE FRANCHISE AGREEMENT DATED 1/9/2010 BETWEEN THE PETITIONER AND THE THIRD RESPONDENT. P2 COPY OF THE PLAINT IN OS 194 OF 2010 BEFORE THE SUB COURT MANJERI FILED BY THE RESPONDENTS 1 AND 2. P3 COPY OF THE I.A.NO.883OF 2010 WITH THE SUPPORTING AFFIDAVIT P4 COPY OF THE WRITTEN STATEMENT FILEDBY THE PETITIONER IN OS 194 OF 2010. P5 COPY OF THE COUNTER FILED BY THE PETITIONER IN THE IA.NO.883 OF 2010. P6 COPY OF THE WRITTEN STATEMENT FILED BY THE 3RD RESPONDENT IN OS NO.194 OF 2010. P7 COPY OF THE ORDER OF THE LEARNED SUB JUDGE IN IA.NO.883 OF 2010 IN OS NO.194 OF 2010. P8 COPY OF THE NOTICE PRINTED AND DISTRIBUTED BY THE 1SY RESPONDENT. P9 COPY OF THE CMA FILED BY THE PETITIONER BEFORE THE DISTRICT COURT. P10 COPY OF THE COUNTER FILED BY THE 3RD RESPONDENT TO THE CMA FILEDBY THE PETITIONER. P11 COPY OF THE ORDER OF THE DISTRICT COURT IN CMA NO.22 OF 2010 DATED 26/11/2010. P12 COPY OF THE PETITIONER DURING ONAM SEASON, IN THE SAME FORMAT TO ALL ITS FRANCHISEE. P13 COPY OF THE PETITIONER TO THE THIRD RESPONDENT CLARIFYING THAT IT IS NOT INTENDING TO RENEW THE AGREEMENTS. P14 COPY OF THE PLAINT IN OS 194 OF 2010 RESPONDENT'S EXHIBITS: NIL /TRUE COPY/ P.S.TO.JUDGE sts P. BHAVADASAN, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - O.P.(Civil). No. 1210 of 2010 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 5th day of April, 2011. JUDGMENT Petitioner is a Cable T.V. Operator having subscribers throughout the State. The third respondent is its franchisee. It is claimed that the petitioner has established its cable T.V. network throughout the State by drawing cables through the electric posts owned by the Kerala State Electricity Board after having executed agreements with them. The third respondent is a Cable T.V. Operator at Manjeri. The petitioner and the third respondent entered into franchisee agreement, by which the right to distribute programmes was given to the third respondent under certain conditions. The complaint is that the third respondent in violation of the franchisee agreement was not paying the amount due to the petitioner and that compelled the petitioner to directly seek payment from the subscribers. O.P.(C). 1210 /2010. 2 2. Then, according to the petitioner at the behest of the third respondent, the first and second respondents representing all the cable T.V. subscribers at Manjeri Muncipality instituted O.S. 194 of 2010 before the Sub Court, Manjeri for a permanent prohibitory injunction restraining the defendants from disconnecting or dismantling or in any way interfering the Cable T.V. connections claimed to be given by the third respondent until the dispute regarding the collection of the subscription for the connection is finally resolved by a court or authority competent to resolve the same. Along with the suit, the plaintiff instituted I.A. 883 of 2010 praying for a temporary relief. It is pointed out that the petitioner has entered appearance in the said suit and filed its written statement. It also filed objections to the interlocutory application filed by the petitioner. However, by order dated 14.9.2010 the trial court granted injunction as payed for against the petitioner and the third respondent. Defendants 2 and 3 in the suit carried the matter in appeal as C.M.A. 22 of 2010 before the District Court, Manjeri. The O.P.(C). 1210 /2010. 3 District Court, by its order confirmed the order of the trial court and directed disposal of the suit. The aggrieved second defendant before the trial court has come up before this court challenging Exts.P7 and P11 interlocutory orders. 3. Learned counsel appearing for the petitioner pointed out that the order now passed by the trial court as confirmed by the District Court causes great injustice to the petitioner in that the petitioner is unable to collect subscription from its subscribers whereas the first defendant, who has violated the terms of the franchisee agreement has now given the right to collect subscription. The grievance of the petitioner was that the first defendant in the suit, who collected amounts from the subscribers was not handing over the money due to the petitioner and that made it necessary to take such steps as are necessary to get amount from the subscribers. Learned counsel also contended that the term of the agreement Ext.P1 expired and the first defendant therefore could not continue as a franchisee. A complaint was also raised regarding the way O.P.(C). 1210 /2010. 4 in which the lower appellate court disposed of the appeal filed by the petitioner along with the third respondent. It was pointed out that the lower appellate court has not dealt with the matter at all and has simply confirmed the order observing that the dispute is a matter to be considered by the court below on the basis of the pleadings and the evidence. None of the contentions raised by the petitioner have been considered and that has caused considerable prejudice to the petitioner. 4. The complaint raised against the lower appellate court judgment seems to be fully justified. The petitioner, who is the appellant before the lower appellate court has narrated in detail the inconvenience and injustice caused to the petitioner due to the order now passed by the trial court and also pointed out how the first defendant gains advantage over the petitioner. The specific stand taken by the petitioner was that the plaintiffs were set up by the first defendant with ulterior motive and he was able to secure an order which was in his favour. O.P.(C). 1210 /2010. 5 5. Whatever that be, the question now arises for consideration is whether any interference is called for with the orders of the court below. Ext.P1 is the franchisee agreement which provides for various things. One of the contentions taken by the petitioner is that the agreement was entered into on 1.9.2000 and it was for a period of ten years. Therefore the period expired on 31.8.2010. Thereafter the first defendant franchisee has no authority to collect subscriptions from the subscribers. The other complaint raised was that huge amounts were due from the franchisee as per the agreement and the franchisee was not honouring the terms of the agreement at all. According to learned counsel for the petitioner, whatever that be, after the expiry of the period made mention of in Ext.P1, the agreement has not been extended for further period and therefore the first defendant cannot collect any amount from the subscribers and the courts below were not justified in not allowing to continue to collect the subscription. O.P.(C). 1210 /2010. 6 6. Learned counsel appearing for the first and second respondents pointed out that the various subscribers, whom they represent have subscribed to the channels provided by the petitioner through the third respondent and they are entitled to get the programmes uninterrupted and unobstructed. Whatever be the dispute between the petitioner and the third respondent, that cannot affect the rights of the first and second respondents. The third respondent represented to the subscribers that they are the franchisee of the petitioner and it was due to that fact that many of the subscribers had subscribed to the third respondent. It was therefore contended that no interference is called for with the order of the court below. 7. Learned counsel appearing for the third respondent contended that the claim of the petitioner that the agreement is no more in force cannot be accepted in view of Clause 19 of Ext.P1 agreement. Even though 10 years period is mentioned, clause 19 has carved out an exception and provides for termination specifically. The O.P.(C). 1210 /2010. 7 petitioner has not taken recourse to that provision and therefore it could not be said that the agreement is no longer in force. It was also contended on behalf of the third respondent that infact huge amounts are due from the petitioner to the third respondent and the petitioner has not complied with the terms of the agreement. The petitioner had authorised the third respondent to collect subscriptions on behalf of the subscribers, the third respondent has been accounting for the amount received by the third respondent. It is therefore contended that the order of the court below is just and proper. 8. One is left with no doubt that the real dispute is between the petitioner and the third respondent. The plaintiffs have been set up by the first defendant. As far as the dispute between the petitioner and the third respondent is concerned, going by Ext.P1 agreement, that can be resolved only through arbitration. Both sides accused each other of financial misappropriation and non-payment. The third respondent would say that more than Rs.10 Lakhs is O.P.(C). 1210 /2010. 8 due from the petitioner towards the amount due to them as per Ext.P1 agreement. They would also point out that going by Ext.P1 agreement, the petitioner was to complete cabling in the area of the franchisee and the franchisee has to convert his existing connection to Asianet and remove his cable network thereafter. This has not been done and the distribution continues to be provided through the cable provided by the third respondent. 9. Whatever be the dispute between the petitioner and the third respondent, that obviously cannot be resolved in these proceedings. However, the complaint of the petitioner is that by the order now passed by the court below, the petitioner is left in the lurch and the third defendant is placed in a comfortable position whereby he can continue to collect subscription from the subscribers and default payment of the amount due to the petitioner. 10. There seems to be considerable substance in the above complaint. The grievance of the petitioner is that the third respondent, who was authorised to collect O.P.(C). 1210 /2010. 9 subscription from the subscribers was not paying the amount due to the petitioner and that had compelled the petitioner not to extend the franchisee agreement. Whether the franchisee agreement will terminate on the expiry of ten years automatically or whether any subsequent steps have to be taken by the petitioner for termination as contended by the third respondent are all matters to be resolved through arbitration. 11. The petitioner had admitted that the third respondent is its franchisee and the claim of the plaintiffs that they have subscribed to the third respondent's network service only because it was a franchisee of the petitioner has much force. However, there has to be some via media so as to safeguard the interest of the petitioner also. There is considerable dispute between the petitioner and the third respondent regarding the cable network through which the programmes are to be distributed. At any rate, the petitioner does not claim that the entire network has been O.P.(C). 1210 /2010. 10 replaced by its cable network as agreed in the franchisee agreement. 12. However, it is not possible to sustain the order of the trial court as confirmed by the lower appellate court since it has caused considerable injustice to the petitioner. Going by the terms of Ext.P1 agreement, after certain period, the third respondent is entitled to get 1/3rd of the subscription amount to be collected from the subscribers. It appears that the amount now being collected from each subscriber is Rs.180/- per month. The third respondent has also a case that more than Rs.10 Lakhs is due from the petitioner. Considering the various aspects it is felt that in order to safeguard the interest of all the parties, the following arrangement can be made. i) The petitioner shall deposit a sum of Rs.5 Lakhs before the trial court within a period of two weeks from today as security. ii) Those subscribers, whose subscription period has expired as on date, may directly subscribe to the O.P.(C). 1210 /2010. 11 petitioner and the petitioner may receive the subscription amount and provide necessary service. iii) Out of the subscription amount so received, 1/3rd of the amount paid by each subscriber shall be deposited before the court below within ten days of collecting the subscription. iv) The petitioner shall continue to provide the facility for the subscribers, who have subscribed for a particular period with the third respondent, in lieu of the amount already paid to the third respondent. The amount, if deposited by the petitioner, shall be disbursed after resolution of the dispute between the petitioner and the third respondent. The petitioner and the third respondent are at liberty to take such steps as are available to them for resolution of the dispute. Both the petitioner as well as the third respondent shall submit statement of amounts, if any, collected by them to the trial court periodically. O.P.(C). 1210 /2010. 12 The order of the court below is modified to the above extent. The Original Petition is disposed of as above. If any of the conditions regarding payment is violated by the petitioner, the order of the court below shall revive. P. BHAVADASAN, JUDGE sb.