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2021 (4) TMI 1381
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....first instance, a chronological excursion through the various documents executed and exchanged in the present case, thus: (i) It appears that, since some time earlier, programs of the respondent were being distributed and shown on the petitioner's Platform. On 24th February, 2020, the respondent, under the brand name "The Viral Fever (TVF)" confirmed that it would provide six shows, to be hosted on the petitioner's Platform in 2020-2021. The communication read thus: "Hi Aaron, As discussed and confirmed: TVF will provide 6 shows in 2020-21 * Immature S2 - 5 Episodes of 20 min each - 3 yr exclusive + 1 year non exclusive * UPSC S1 - 5 Episodes of 20 min each - 3 yr exclusive + 1 year non exclusive * Flames S3 - 5 Episodes of 20 min each - 3 yr exclusive + 1 year non exclusive * 3 more shows 5 Episodes of 20 min each - 3 yr exclusive + 1 year non exclusive - TBD All the other clauses remain the same from last time. All masters will be cleaned / without sponsorship. Deal Value - 21 cr + taxes Payment Terms: 35% Advance 65% on Delivery Look forward to a....
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.... from the date of delivery of the Delivery Material relating to such Program by the Company and continue for a period of 4 (four) years from the Effective Date of each such Program and includes initial 3 (three) years on an exclusive basis and thereafter 1(one) year on a nonexclusive basis ("Distribution Period")." (b) Clause 4 of the Agreement provided for "Exclusivity", and sub-clause 4.1, thereunder, reads thus: "4.1 Each of the Programs shall be provided by the Company to the Distributor as per the delivery schedule mentioned in Annexure land shall be first released solely on the Platform. All Rights granted by the Company to the Distributor hereunder, in respect of the Program, shall be available to the Distributor on an exclusive basis for a period of 3 (three) years from the Effective Date, and thereafter on a non- exclusive basis for a period of 1 (one) year. Accordingly, the Company shall ensure that no part of the Program is released or distributed anywhere in the Territory through any means or modes of distribution including such modes or mediums which use satellite as the means of transmission, prior to the same being released on the Platform. The Part....
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....ials in respect of the relevant Additional Program by the Distributor subject to receipt of valid invoice. v. In the event no Additional Programs are selected by Distributor during the Term, then no payment shall be made towards the Minimum Guarantee for each such Additional Show, which has not been selected during the Term. 8.2. The Company shall raise all invoices towards all amounts of Minimum Guarantee in USD and the foreign exchange rate shall be calculated as of the date of the relevant invoice. Further, all payments to be paid by Distributor, shall be paid in USD, such that the amount received by the Company shall be the exact INR of Minimum Guarantee as agreed hereinabove under clause 8.1, without any loss as a result of the exchange rate and applicable withholding or any other taxes, to the Company. In case of occurrence of such loses, the Distributor shall make good of the same to the Company." (d) The Agreement provided for its termination, by the petitioner or by the respondent. Clause 14 dealt with termination by the respondent, and sub-clauses 14.1 and 14.2 thereof read thus: "14.1 The Company shall be entitled to terminate this Agr....
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.... mutually within 30 (thirty) days from the expiry of the Settlement Period or such other period that the Parties may mutually decide. In the event the Parties are unable to appoint an arbitrator mutually within the aforesaid time period, then the arbitration shall be conducted by a panel of 3 (three) arbitrators, where 1 (one) arbitrator shall be appointed by the Distributor, 1 (one) arbitrator shall be appointed by the Company, and the 2 (two) arbitrators so appointed by the Parties respectively, shall appoint the third arbitrator who shall be the presiding arbitrator for the purpose of the arbitration proceedings. 19.3 The arbitration shall be conducted in accordance with the Arbitration and Conciliation Act, 1996. The language of arbitration proceedings shall be English. Each Party shall bear its own cost. The venue of arbitration shall be New Delhi. 19.4 This Agreement shall be governed by the laws of India. Subject to the foregoing, courts in New Delhi shall have the exclusive jurisdiction on all matters arising out of or in connection with this Agreement." (g) Annexure-1 to the Agreement set out the details of the various Programs and their delivery....
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.... "Hi Animesh, We shall review the shared draft. However, the FE copy of the latest licence deal is still awaited from your side and the related amendment can not take place until we don't receive the aforesaid FE copy in our record. Tx" (Emphasis supplied) (vii) On 8th July, 2020, the respondent again wrote to the petitioner, thus: "Hi Aaron, It was good to connect on call today and as discussed the 2 key action points: 1. TVF to share the Delivery timelines for the 3 current shows agreed ie UPSC, Flames 3 & Immature 2 2. TVF to share concepts/show ideas for the other 3 shows in the Agreement which the Mx team can evaluate and respond Also pls do respond on: 1. The addendum to the last Agreement 2. Digital signature for the final paperwork since we've some audit requirements Regards Vijay Koshy" (Emphasis supplied) (viii) On 15th July, 2020, the petitioner wrote to the respondent, requesting for "update on the timelines" of the three shows which they had selected. The respondent, vide reply mail dated 16th July, 2020, agreed to share....
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....ak - understand that the schedules are crazy but let's keep the conversation rolling. We have proposed the way we want to progress with this deal which is a 1 + 1 + 1 show approach starting with UPSC which was to be delivered in Dec. Are we on track with that? Regards Aaron" (Emphasis supplied) (xii) The respondent replied, on the same day, i.e. 11th September, 2020, as under: "Hi Aaron, Thanks for understanding. We've been discussing the same internally and I wanted to discuss with you certain reservations that we have in going ahead with the above mentioned approach. It really puts us in a very tough spot. Do let me know whenever we can have a conversation and I'll make myself available. Cheers Sherry" (Emphasis supplied) (xiii) That the "1 + 1 + 1" arrangement suggested by the petitioner on 11th September, 2020, was not acceptable to the respondent, and was further reflected by the following e-mail, dated 21st September, 2020, from the latter to the former: "Hey Aaron, Thanks for taking our time the other day to hear our point of view on the prop....
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....Hi Aaron, Apologies for the delay in responding. We will call you tomorrow and let's discuss how we can close this asap." (Emphasis supplied) (xvii) On 14th October, 2020, the petitioner wrote, to the respondent, as under: "Hi Vijay, It was a pleasure of speaking with you today. To capture the broad understanding, the current deal would be structured as a 1 + 1 + 1 with MX greenlighting the subsequent shows post the launch of the previous based on the output delivered. This would mean that the amount paid to TVF as a signing fee would be against the 1st show which we chose, which I would confirm to be Immature 2. We understand and appreciate your reservation towards making this a 8 ep (25-30 mins). I would suggest we do this as a 7 ep (25-30 mins) show. Please confirm the ep count so we can go ahead and draft the addendum accordingly. Regards Aaron" (Italics and underscoring supplied) (xviii) On 28th October, 2020, the petitioner forwarded, by way of an attachment e-mail, a second "amendment draft", attaching a proposed "First Amendment" to the Agreement dated 18th March, 2020. (This, therefore, ....
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....es Two Crores Eighty Lakhs only) for each Program upon receipt of the Delivery Materials in respect of relevant Program from the Company in accordance with this Agreement and according to technical specifications, which the Distributor shall be liable to pay within 45 (forty five) days from the date of receipt of the Delivery Materials in respect of the relevant Program by the Distributor subject to receipt of valid invoice. 1.5 INR 1, 52, 84, 500/- (Indian National Rupees One Crore Fifty Two Lakhs Eighty Four Thousand Five Hundred only) equivalent to USD 200,000/- (United States Dollars Two Hundred Thousand only) in accordance with Clause 8.1.1 (I) has already been paid by the Distributor to the Company as an advance amount towards all the Programs upon execution of the Principal Agreement, receipt and sufficiency of which is hereby acknowledged and confirmed by the Company. 1.6 The balance amount of INR 2, 07, 15, 500/- (Indian National Rupees Two Crores Seven Lakhs Fifteen Thousand and Five Hundred only) equivalent to an amount in USD as per Clause 8.1.1(i) shall be paid within 45 (forty five) days of execution of this First Amendment and subject to receipt of ....
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....; Animesh Sukhatankar Content Acquisition - MX Player" (xxii) On 27th November, 2020, the petitioner forwarded, under cover of an e-mail to the respondent, a further revision to the amended draft Agreement "to accommodate the recent discussions". This, therefore, was the third "First Amendment" proposed, by the petitioner to the Agreement dated 18th March, 2020, without ever sending back the original countersigned Agreement. (xxiii) Apropos the programs to be broadcasted on the petitioner's Platform, and the amount payable to the petitioner, this third, and newly proposed, "First Amendment" was identical to the second "First Amendment", forwarded by the petitioner to the respondent on 28th October, 2020. Clause 1 of the newly proposed "First Amendment" to the original Agreement dated 18th March, 2020, which contained the proposed amendments, reads as under: "1.1 The term "Program(s)" as defined under Clause 1.1.24 of the Principal Agreement....
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....ivery of the Delivery Materials relating to the respective Program, subject to quality checks and acceptance of the same by the Distributor. 1.5 Parties expressly agree that the Distributor, at its sole discretion, shall have the right to green-light the production in any sequence of Program 2 and/ or Program 3. 1.6 The Company shall deliver the Programs to the Distributor as per the timelines mutually agreed between the Parties and in accordance with the technical specifications as stated in Annexure 2 of this First Amendment." With this, it makes it clear that instead of counter-signing the original Agreement, forwarded by the petitioner to the respondent on 18th March, 2020, the petitioner proposed as many as three "First Amendments" to the original Agreement dated 18th March, 2020. (xxiv)This fact was highlighted by the respondent, vide e-mail dated 9th December, 2020, to the petitioner, which reads thus: "Dear Aaron, We look forward to closing this at the earliest as well. As you are aware that earlier this year (March 2020), TVF and MX were to sign a principal Agreement, recording certain business understanding ag....
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.....e UPSC, Flames 3 & Immature 2. It is great to hear that you are open to a revised business discussion- we can close the same tomorrow over a call- let me know if tomorrow 2.30 pm works. Look forward to receiving your thoughts on the addendum shared. Aaron" (xxvi) The petition also annexes follow-up e-mails, between the petitioner and the respondent, from 16th December, 2020 till 22nd December, 2020, attempting to fix schedules for mutual meetings, to iron out the possible differences. (xxvii) On 26th December, 2020, the respondent addressed the following e-mail to the petitioner, pointing out that, as "there was no visibility on timelines for execution of the principal agreement from MX's end", the agreement "could not be concluded between the parties". Even so, the respondent agreed to explore the amendments suggested by the petitioner, but stated that, in view thereof, the show "Aspirants" would have to be excluded. Regarding the other two shows, the communication went on to state thus: "Meanwhile, we also seek your confirmation on MX's continued interest in licensing the remaining two proposed shows i.e. Immature So2 and Flames S....
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....ames Season 3" and "UPSC" programs, in default whereof the petitioner threatened legal action. (xxix)The respondent replied on 6th February, 2021, categorically denying the existence of any concluded contract with the petitioner. It was pointed out that the terms of the agreement between the petitioner and respondent were still being negotiated. Without sending back the signed Agreement forwarded by the respondent on 18th March, 2020, it was pointed out that the petitioner was suggesting changes till December 2020. In the absence of any concluded contract, the respondent denied any obligation to the petitioner. Insofar as the payment of US $ 2,00,000 was concerned, the respondent pointed out that there was no covenant, in the Agreement dated 18th March, 2020, contemplating any such payment. In any event, it was pointed out, the said payment was even less than the 30% Minimum Guarantee required to be paid by the petitioner as advance under the Agreement. The respondent pointed out that, as the petitioner was not forthcoming with a signed Agreement, the respondent chose to accept the third option proposed by the petitioner in its e-mail dated 5th October, 2020, to walk away ....
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....re Season 2', 'Aspirants Season 1' (title subsequently changed to 'UPSC'), 'Flames Season 3' created, developed and/or produced by the Respondent, to any other market player and/or digital platform in terms of Clause 4.1, and Clause 5.1 of the Agreement; AND B. Pass an order of injunction restraining the Respondent from creating any third-party interest in and to the Programs titled 'Immature Season 2', 'Aspirants Season 1' (title subsequently changed to 'UPSC'), 'Flames Season 3' created, developed and/or produced by the Respondent, in favour of any third party; AND C. Pass an order of injunction, restraining the Respondent from, in any manner, breaching/violating the exclusivity obligations under the Agreement; AND D. Pass an order directing the Respondent to deposit either in this Hon'ble Court or in an escrow account, an amount equivalent to the INR of USD 310,000/- (United States Dollar Three Hundred and Ten Thousand Only), being the consideration amount admittedly received as advance consideration from the Petitioner, along with interest @18% per annum from the date of receipt of payment till the date of delivery of the said Programs; AND E....
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.... petitioner to the respondent. The respondent was not seeking to contend that the said payment was against monies due from the petitioner to the respondent under any transaction not relatable to the Agreement dated 18th March, 2020. (ii) The petitioner was ready and willing to perform its part of the Agreement. In this context, Mr. Amit Sibal submitted, on instructions, that his client was willing to deposit, with the court, the balance consideration payable under the Agreement dated 18th March, 2020. (iii) E-mails dated 17th July, 2020 [Refer para 4(viii) (supra)] and 22nd July, 2020 [Refer para 4(ix) (supra)] from the respondent to the petitioner, acknowledged the fact that the "UPSC" "Immature" and "Flames" shows were "logged with MX this year". By using the words "logged", the respondent had acknowledged the fact that a concluded commercial Agreement, for broadcasting of these three shows on the petitioner's Platform, in the 2020-2021 year, was in place, resulting in an enforceable contractual right in the petitioner's favour. (iv) The discussion, between the petitioner and the respondent, for amendment of the Agreement dated 18th March, 2020, also in....
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....in fact, paid US $ 3,10,000 to the respondent, it was entitled to specific performance of the Agreement with the respondent. It is further submitted, in this regard, that the content of the programs, to be aired on the petitioner's platform in 2020-2021, is not substitutable and that, therefore, if the right to air such programs were to be granted by the respondent to a third party, it would result in irreparable loss to the petitioner, which could not be compensated by way of costs or damages. The petitioner has also sought to point out that the respondent is admittedly in financial difficulties. 8. To a submission, from the respondent, that no specific performance, of the Agreement between the petitioner and the respondent, could be directed, as the Agreement was determinable in nature [in view of Section 14(d) of the Specific Relief Act, 1963[1]], Mr. Sibal submitted that, in the first place, this argument was not available to the respondent, as its case was that there was no concluded contract with the petitioner. Besides, Mr. Sibal points out that determinable contracts are not, ipso facto, excluded from the scope of enforcement, by Section 14(d), which applies only to a co....
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....i) The correspondences exchanged between the petitioner and the respondent clearly indicates that the petitioner has, contrary to its own assertions, never been ready or willing to perform the contract. Readiness and willingness submits Mr. Mehta, have to be reflected from the acts of the party and the onus in that regard rests on the party seeking specific performance of the contract. The petitioner, he submits, has miserably failed to discharge this onus. Reliance has been placed, in this context, by Mr. Mehta, on the judgment of a Division Bench of this Court in Inter Ads Exhibition Pvt. Ltd. v. Busworld International Cooperative Vennootschap Met Beparkte Anasprakelijkheid [AIR 2020 Delhi 107] , as well as the judgment of the learned Single Judge of this Court, which stands affirmed thereby [2020 SCC OnLine Del 351] (iv) In these circumstances, the respondent had availed one of the three options proposed by the petitioner in its e-mail dated 5th October, 2020, by opting to exit the contract and refund the amounts paid by the petitioner. Mr. Mehta has emphasised the fact that each of the three options suggested by the petitioner amounted to a material departure from the ....
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....y indicate that the petitioner was unwilling to abide by the covenants contained in the Agreement dated 18th March, 2020, as signed by the respondent and forwarded to the petitioner. The respondent repeatedly requested the petitioner by e-mails dated 2nd June, 2020, 8th July, 2020, 17th July, 2020 and 22nd July, 2020, inter alia, to send back the Agreement, duly signed. The petitioner did not do so. 16. The petitioner, instead, required the respondent vide e-mail dated 15th July, 2020, to communicate the schedule of the programs to be aired on the petitioner's website. The respondent communicated the said schedule vide reply e-mail 17th July, 2020. Even thereafter, the petitioner did not forward the signed Agreement to the respondent. 17. Rather, starting 24th August, 2020, the petitioner started to propose changes in the "the overall construct of the arrangement". 18. On 11th September, 2020, the petitioner stated that it wanted to air the program as a "1+1+1 show". At this point, I may note that an attempt was made by Mr. Amit Sibal, on behalf of the petitioner, to state that, by requiring the program to be aired in "1+1+1 format", the petitioner was not suggesting any c....
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.... 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. 21. The submission of Mr. Amit Sibal, that the law does not require a contract, to be enforceable, to be signed by both parties, has no application in the facts of the present case. The issue is not one of want of signatures of both parties, but want of consensus regarding the Agreement. As a general proposition of law, it cannot be gainsaid that the a contract, even if not signed by both parties, may be enforceable, provided consensus ad idem, regarding the terms of the contract, exists, and the parties have acted in accordance with the contract, thereby evincing the intent to be bound by the covenants thereof. Neither of these requirements is, unfortunately for the petitioner, met in the present case. Clearly, there is no consensus ad idem between the petitioner and the respondent. Nor can it be said that the pet....
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.... come into being between the petitioner and the respondent. 25. This, apparently, was also the understanding of the petitioner, as reflected by its e-mail dated 5th October, 20205 addressed to the respondent. Mr. Sibal sought to object to Mr. Mehta reading the said e-mail dated 5th October, 20205 in isolation and submitted that if the said e-mail were to be read in conjunction with the e-mails which preceded and succeeded it, it would become apparent that the three options proposed by the petitioner in the said e-mail dated 5th October, 20205 , were no longer available to the respondent, by the time the respondent chose to exercise the third option, vide its e-mail dated 5th October, 2020 [Refer para 4(xv) (supra)] I cannot, prima facie, accept this submission. Rather, it appears to me that if the e-mail dated 5th October, 20205 was to be read in conjunction with the e-mails which preceded it, the position that emerges is that, having proposed various changes to the original Agreement dated 18th March, 2020 (as forwarded by the respondent to the petitioner), and having found that the respondent was not amenable to agree to the said changes, the petitioner recognized the fact tha....
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....signature, to Indure, but Indure did not sign it. Rather, Indure sent back a counterproposal, on 27th June, 1984, incorporating certain changes suggested by it. The tenders were submitted to the UPSEB and, later, withdrawn by the UPRNL before they were finalized. Indure, thereupon, approached the UPSEB undertaking to perform the entire contract by itself. Side by side, Indure also issued a notice, to UPRNL, invoking arbitration under Clause (14) of the draft agreement. Indure contended that it had accepted the draft agreement on 27th June, 1984, while UPRNL disputed the existence of any concluded contract with Indure. 28. UPRNL approached the High Court under Section 33 of the 1996 Act. 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 arbitr....
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....art of the original agreement though it had signed the agreement containing that part. 19. In view of the fact that Section 2(a) of the Act envisages a written agreement for arbitration and that written agreement to submit the existing or future differences to arbitration is a precondition and further in view of the fact that the original contract itself was not a concluded contract, there existed no arbitration agreement for reference to the arbitrators. The High Court, therefore, committed a gross error of law in concluding that an agreement had emerged between the parties, from the correspondence and from submission of the tenders to the Board. Accordingly it is declared that there existed no arbitration agreement and that the reference to the arbitration, therefore, is clearly illegal. Consequently arbitrators cannot proceed further to arbiter the dispute, if any. The conclusion of the High Court is set aside." (Emphasis supplied) 30. 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....