1ARBP.1301-2010 acd IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION PETITION NO. 1301 OF 2010 Koncept Infotenment . ...Petitioner. V/s. M/s Bohra Brothers . ...Respondent. -- Mr. Vineet Naik, Ms. Rajalakshmi Mohandas, Mr. Hamed Kadiani i/b M/s ALMT Legal, for the Petitioner. Mr. Ashish Kamat i/b M/s Ahsok Purohit & Co., for the Respondent. -- CORAM : S.J. VAZIFDAR, J. DATE : 28TH OCTOBER, 2010. P.C. :- 1] The present petition is filed under section 9 of the Arbitration and Conciliation Act, 1996. 2] The parties admittedly entered into a Joint Venture Agreement in January 2009 and an Escrow Account Agreement on 27.2.2009. [A] The petitioner had advanced a sum of Rs.3.25 Crores which was termed as Co-Producer Capital in the said agreement. The recitals to the Joint Venture Agreement state that the respondent had entered into an agreement with NDTV Imagine for telecasting its serials, therein referred to TV serial comprising of 208 episodes. Clause 2(iv), 2.2(a), 4(a) and 4(e) 2ARBP.1301-2010 of the Joint Venture Agreement read as under: “2(iv): The escrow account shall have been opened and operated for refund of the Co-Producer Capital. The escrow bank shall release such amount or any such monies to the Co-Producer, without any further instructions of the Producer. 2.2(a): The Co-Producer will be entitled for a remuneration of Rs.42,500/-(Rupees Forty Two Thousand Five Hundred Only) per episode for total no. of 208 episodes of the TV serial i.e. 208 episodes x Rs.42,500/-=88,40,000/- (Rupees Eighty Eight Lacs Forty Thousand Only) “Remuneration” alongwith the refund of the Co-Producer Capital in accordance with the payment schedule as mentioned in Annexure II. All such monies shall be deposited in the escrow account immediately after it receipt from NDTV Imagine by the Producer and the same shall be utilized in accordance with the instructions of the Co-Producer. (4)(a): Default in Payment of the Remuneration and Refund of Co-Producer Capital: Default has occurred in the payment of the Remuneration and refund of Co-Producer Capital on the due dates, as stipulated in the Annexure II of this Agreement. (4)(e): Abandonment of the TV Serial The Producer has abandoned the production of the TV Serial or the TV Serial has been terminated for any reason whatsoever.” [B] Recital 4 and clause 7.1 of the Escrow Account Agreement read as under: “4. One of the conditions of the JV Agreement is that the Producer shall open a Escrow Account with the Escrow Bank for the purpose of (a) depositing of all the Proceeds and (b) for payment/repayment of the Co-Producer Capital including the Remuneration together with all the interest, additional interest, costs, expenses and other monies payable in respect thereof on the terms and conditions stipulated hereunder. 3ARBP.1301-2010 7.1.: Events of Default shall mean an Event of Default as specified in the JV Agreement or occurrence or existence of anyone or more of the following: i) If the Producer is in breach of any of its obligation under this Agreement. ii) If the Producer fails to maintain the Escrow Account, as undertaken under this Agreement. Iii) If the Borrower has diverted the funds drawn from the Escrow Account to any other account(s).” 3] It is admitted by the parties that the capital of Rs.3.25 Crores was repaid. Admittedly, only 91 episodes of the TV serial were telecast leaving 169 episodes. The question is whether the petitioner is entitled for remuneration of Rs.42,500/- for these 169 episodes. 4] The petitioner has made out a strong prima facie case in its favour on an interpretation of the aforesaid clause. I am unable to reject the petitioner’s contentions that it is entitled for remuneration for the 169 episodes which remained to be telecast. Clause 4(e) of the Joint Venture Agreement provides that the respondent would be considered to be in default if it abandoned the production of the TV serial or the TV Serial has been terminated for any reason whatsoever. Prima facie if the amount was not payable for all the episodes there would have been no question of considering a failure to telecast all the episodes as a default on the respondent’s part. 4ARBP.1301-2010 5] Shri Kamat, then submitted that the Petitioner has only a claim for money and there is no case for an order in the nature of an order under Order 38 Rule 5 of the Code of Civil Procedure, 1908. 6] I would assume that a case strictly under the provision of Order 38 Rule 5 of the said Act of 1908 has not been made out. I do not intend granting the reliefs as claimed in this petition. 7] However, the respondent would be entitled to enforcement of the agreements themselves. Clause 2.2 of the Joint Venture Agreement itself mandates that all monies due and payable in respect of the episodes shall be deposited in the Escrow account immediately upon the receipt thereof from NDTV Imagine by the respondent, and that same shall be utilized as per the instructions of the petitioner. The petitioner is entitled to have this clause enforced even at the interlocutory stage. The enforcement of this contractual term is not under Order 38 Rule 5 of the Code of Civil Procedure, 1908. 8] Shri Kamat then submitted that there was considerable delay in making this application. He also submitted that the conduct of the petitioner militates against the respondent’s contentions regarding the construction of clause 2.2. of the Joint Venture Agreement. He relied upon the correspondence between the parties in this regard. For instance by 5ARBP.1301-2010 a message dated 28.11.2009, the respondent indicated that the petitioner was entitled only to a return of Rs.3.35 Crores and an amount of Rs. 42,500/- only for 91 episodes which were telecast. He relied upon the fact that this contention though raised again in other email message was denied only on 22.1.2010 i.e. after delay of almost two months. 9] Considering the construction of the clauses, the delay in making this application is no justification to deny the petitioner reliefs. 10] Both parties have agreed to refer their disputes and differences to the sole arbitration of Shri Shailesh Shah, an Advocate of this Court. It is clarified that this is without prejudice to the respondent’s contention in this petition and its rights to challenge this Order. 11] In the circumstances, till the Arbitration Petition is disposed of and for 12 weeks thereafter the respondent is directed to deposit all amounts received from NDTV Imagine into the escrow account. The petitioner and the respondent are restrained from withdrawing amount from the escrow account. The petition is also made absolute in terms of prayer clause (e). The application for stay of this Order is rejected as staying this order could in fact frustrate the Order itself.