2021 (4) TMI 1381 - HC - Indian Laws

Petition for interim relief under Section 9 dismissed as no concluded contract existed between parties

MX Media And Entertainment Pte. Ltd. Versus M/s. Contagious Online Media Networks Private Limited

Delhi HC dismissed petition seeking interim relief under Section 9 of Arbitration and Conciliation Act, 1996. Court held petitioner failed to establish ... Concluded contract between the parties or not - specific performance of the Agreement between the petitioner and the respondent - exercise of the jurisdiction vested in this Court by Section 9 of the Arbitration & Conciliation Act, 1996 - HELD THAT:- The troika of a prima facie case, balance of convenience, and irreparable loss, it is trite, apply as much to Section 9 of the 1996 Act, as to Order XXXIX of the Code of Civil Procedure, 1908, apart from the issue of whether grant of interim protection would be “just and convenient” - The petitioner has been unable to make out a prima facie case for grant of the reliefs sought. As such, no occasion arises to consider the issues of balance of convenience and irreparable loss, the troika considerations requiring cumulative, not alternative, satisfaction. By no stretch of imagination can it be said, therefore, that there was consensus ad idem between the parties, at any stage of the proceedings, starting 18th March, 2020, regarding the covenants of the Agreement executed. That being so, in the absence of any contract duly signed by both parties, no concluded contract enforceable in law could be said to have come into being. The High Court held that a concluded contract had emerged, between UPRNL and Indure, on the ground that (i) UPRNL had sent the drafted contract to Indure, (ii) Indure had signed the contract and sent it back with modifications to UPRNL, (iii) at no time did UPRNL reject the modifications, and (iv) UPRNL, rather, acted on the basis of the contract thus returned by Indure by submitting the tender. As such, the High Court held that UPRNL could not deny the existence of the contract, or of the arbitration agreement therein. Consensus ad idem, the foremost, and most indispensable, prerequisite for any concluded contract, is totally absent in the present case. No contract, which the Court could, in exercise of its jurisdiction under Section 9 of the 1996 Act, specifically enforce, or the specific performance of which the Court could protect, even pending arbitration, can be said to exist. Thus, no occasion arises for this Court to enter into any other aspect of the controversy, including the aspects of balance of convenience and irreparable loss, as there is no prima facie case made by the petitioner, justifying grant of any of the interim reliefs sought in the present petition. The petitioner is, for reasons unknown, seeking to breathe life into a dead body - as no concluded or enforceable contract with the petitioner has ever come into being, none of the reliefs in this petition, under Section 9 of the 1996 Act, can be granted to the petitioner. It is obviously open to the respondent to contract with any other party, for broadcasting of its programs. The present judgment adjudicates only the prayer of the petitioner for interim protection under Section 9 of the 1996 Act, and the views expressed herein are prima facie, towards such adjudication. Section 9 requires the Court to examine, inter alia, whether the petitioner has made out a prima facie case, as one of the considerations for grant of interim protection - the answer has to be in negative. There are no substance, whatsoever, in this petition, which is accordingly dismissed. Issues Involved:1. Whether there was a concluded contract between the petitioner and the respondent.2. Whether the petitioner is entitled to specific performance of the Agreement dated 18th March 2020.3. Whether the petitioner is entitled to interim protection under Section 9 of the Arbitration & Conciliation Act, 1996.Issue-wise Detailed Analysis:1. Concluded Contract:The petitioner argued that a concluded contract existed, citing various emails and partial payments made. However, the respondent contended that no such contract was concluded as the petitioner never countersigned the Agreement dated 18th March 2020 and instead proposed multiple amendments. The court observed that the petitioner did not return the signed contract and proposed several amendments, indicating a lack of consensus ad idem (meeting of the minds). The court concluded that there was no concluded contract as there was no mutual agreement on the terms, and the petitioner's actions demonstrated an unwillingness to abide by the original terms.2. Specific Performance:The petitioner sought specific performance of the Agreement, claiming readiness and willingness to perform its part. However, the court noted that the petitioner had not complied with the payment terms stipulated in the Agreement and had proposed significant changes to the original terms. The court held that the petitioner's conduct did not reflect readiness and willingness to perform the contract. Furthermore, the court emphasized that without a concluded contract, the question of specific performance did not arise.3. Interim Protection under Section 9:The petitioner sought interim protection to restrain the respondent from selling or licensing the programs to third parties. The court applied the principles of prima facie case, balance of convenience, and irreparable loss, which are essential for granting interim relief. The court found that the petitioner failed to establish a prima facie case due to the absence of a concluded contract. Consequently, the court did not find it necessary to examine the balance of convenience and irreparable loss. The court concluded that the petitioner was not entitled to any interim relief under Section 9 of the Arbitration & Conciliation Act, 1996.Conclusion:The court dismissed the petition, holding that no concluded contract existed between the parties, and therefore, the petitioner was not entitled to specific performance or interim protection. The court emphasized that the parties were free to resolve their disputes through arbitration, and the findings in this judgment were prima facie and not binding on the arbitral tribunal.