TaxTMI 
TaxTMI 
TaxTMI 
2023 (9) TMI 1739
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....NSEL FOR THE RESPONDENT NO.1/DEFENDANT NO.6. 19-28 Court's Reasoning. 29-89 Amendment Act 2018 has made specific performance of a contract a general rule rather than an exception. The legislative shift is towards stronger enforcement of contracts. 29-42 The Original Agreement & Addendum are not determinable. 43-45 Section14 of Act, 1963 is inapplicable as the Appellant is enforcing a negative covenant only. 46-50 The uniform and consistent practice of Courts has been to enforce a negative covenant in an agreement .. 51-56 Section 27 applies only to restrictions in Post Contract period. 57-61 Damages are not an adequate remedy 62-65 In view of the averments in the plaint, the Appellant-Plaintiff's suit cannot be dismissed on lack of territorial jurisdiction. 66-69 In view of the defence that the Agreement and Addendum are vitiated by fraud, the matter cannot be referred to arbitration. 70-73 The agreements between the parties are neither 'Excessively one sided' nor they impose a 'bondage'. 74-76 Prima facie conduct of the Respondent No.1/Defendant No.6 is neither honest nor fair. 77-80 En....
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....ith third parties for creation of any new intellectual property or content of any kind during the term of the Original Agreement, except to the extent and on the conditions provided under Annexure D of the Original Agreement. The relevant terms of the Original Agreement are reproduced hereinbelow :- PRINCIPAL TERMS OF THE AGREEMENT S. No. Particulars Description 1. Content Any and all of the two hundred works of the intellectual property works including without limitation all musical, lyrical, cinematographic, literary, dramatic, pictorial works, images, sound recording, music, underlying works etc. created by the Artists during the Term as commissioned by Global Music Junction 2. Term 30 (thirty) months from Effective Date 3. Territory Worldwide xxxx xxxx xxxx 5. Consideration Payable a) Global Music Junction shall be liable to pay the Artist a fee of INR 5,00,00,000/- (Rupees Five Crores only) plus taxes (the "Fee") during the Term of this Agreement in the manner and as per the timelines set out in the Payment terms detailed in Annexure B attached herewith ..... 6. Any other Terms Standard T....
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....not obligation to, without prejudice to any other right or remedy available to it under this Agreement, law or tort, to restrict the Artist from producing and/ or publishing any further content of any kind, including without limitation as per detailed in Annexure D herein, until such time that the breach made by the Artist has been cured in full or damages incurred by the Producer due to such breach have been paid in full. 4. Representations and Warranties: Each Party hereby represents and warrants that: xxxx xxxx xxxx xxxx 4.2 this Agreement creates a binding and legally enforceable Agreement 4.3 it shall not enter into or acquiesce in any other agreement I arrangement which could prevent it from fully complying with the provisions of this Agreement; xxxx xxxx xxxx xxxx 4.6.13 it shall not work with any third-parties for the production of any content in any manner whatsoever during the Term, unless otherwise detailed in the exclusion schedule as detailed in Annexure D. 5. Intellectual Property Rights: 5.1 The Artist hereby acknowledges that t....
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....provide the Producer with any and all Deliverables and Content and any parts thereof for the work undertaken till such time. xxxx xxxx xxxx xxxx Annexure A Detailed Description of the Deliverables of The Artist to Global Music Junction The engagement of the Artist and Global Music Junction is limited to the production of 200 songs by the Artist. xxxx xxxx xxxx xxxx Annexure B Payment Terms: The Producer shall pay the Artist a total Fee of Rs. 5,00,00,000/- (Rupees Five Crores only) plus taxes for the production and development of the Content, payable as follows: Sr. No. Amount Date/Time of Payment 1. Rs. 30,00,000/- (Rupees Thirty Lakhs only) Within fifteen days from the date of the execution of the Agreement and receipt of valid invoice thereof. 2. Rs. 1,50,00,000/- (Rupees One Crore and Fifty Lakhs only) Within one month after the completion of Limited Permitted Entity Obligations as per Annexure D herein or the 1st of September, 2021, whichever is later and receipt of valid invoice thereof. 3. Rs. 3,20,00,000/- (Rupees Thr....
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....ellant/ Plaintiff pursuant to the terms of the Original Agreement. The relevant terms of the Addendum are reproduced hereinbelow :- "1. Preamble 1.1. The Parties have entered into an agreement dated 27 May 2021 ("Original Agreement"), a copy of which is annexed hereto. 1.2. The Parties have agreed to enter into this Agreement, to amend, modify and vary the terms of the Original Agreement. xxxx xxxx xxxx xxxx 3. Delivery of Content 3.1. Subject to the terms and conditions set forth herein, the Artist hereby agrees to deliver to the Producer 8 (eight) original and new songs each calendar month as per the schedule prescribed in Schedule 1 ("Deliverables" and each a "Deliverable") for the period commencing on and from the date of this Agreement and ending on September 30, 2025 ("Term"). Provided however, if the total Deliverables delivered by September 30, 2025 are less than 100 then the Term shall stand automatically extended until 100 Deliverables are delivered. xxxx xxxx xxxx xxxx 3.4. The Producer shall pay an amount as set out in Schedule 2 for each calenda....
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.... amended, modified and varied by this Agreement and subject to Clause 8.3. The arbitrations proceedings commenced under the Original Agreement shall stand terminated, and all legal notices issued in connection thereto shall stand unconditionally and irrevocably withdrawn. 6.4. This Agreement forms an integral part of the Original Agreement and, shall be read as a whole together with the Original Agreement and constitutes the entire agreement between the Parties with respect to the subject matter hereof to the exclusion of all other prior agreements, or understandings and assurances, relating to such subject matter either written or oral. None of the rights and obligations of any of the Parties shall, except for the modifications or amendments contained in this amendment letter, be deemed to be altered or modified in any manner whatsoever. xxxx xxxx xxxx xxxx 9. Miscellaneous xxxx xxxx xxxx xxxx 9.9. Non-Exclusive Remedies. 9.9.1. The rights and remedies provided in this Agreement are cumulative and none is exclusive of any other, or of any rights or remedies....
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....he personal qualifications of the Respondent No.1/ Defendant No.6 and the Original Agreement fell within the category of contracts which are not specifically enforceable in terms of Section 14(c) of the Specific Relief Act, 1963 ('Act, 1963'). Further, relying upon Infinity Optimal Solutions Pvt. Ltd. (IOS) vs. Vijender Singh & Ors., MANU/DE/2856/2009 and Rajasthan Breweries Limited v. The Stroh Brewery Company, 2000 SCC OnLine Del 481, the learned Single Judge held that the Original Agreement being a commercial contract between two private parties for mutual gain and benefit, can be terminated by the Respondent No. 1/Defendant No. 6. without assigning any reason and by giving a reasonable notice, even in the absence of a specific termination right. Therefore, the contract being determinable in nature was not enforceable in view of Section 14(d) of the Act, 1963. The learned Single Judge also placed reliance upon Percept D'Mark (India) (P) Ltd. v. Zaheer Khan and Anr. (2006)4 SCC 227, to hold that the exclusivity clauses in the Original Agreement and the 'right of first refusal' under the Addendum in favour of the Appellant/ Plaintiff were clearly hit by the bar....
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....of the plaintiff company that the present suit is not a suit seeking specific performance of the contract, but rather a suit for injunction against the defendants from infringing the copyright of the plaintiff company. I do not find merit in the aforesaid submission. Though, the prayers in the suit have been framed in a manner to give an impression that the suit has been filed for copyright infringement, in real terms, it is a suit for specific performance of a 'contract of service', which is barred under section 14(c) and (d) of the Specific Relief Act, 1963. Clause 5.1 of the Agreement specifically states that the plaintiff shall become the owner of the copyright only upon the same being created in the future. Therefore, the plaintiff cannot claim any copyright in the songs/content that are yet to come into being. Therefore, in my considered view, the present suit is nothing but a suit for specific performance of the contract, though guised as a suit seeking injunction for infringement of copyright. 30. Even otherwise, the exclusivity clauses in the Original Agreement and the 'right of first refusal' in favour of the plaintiff under the Addendum are clear....
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....deration payable per song basis was Rupees Two Lakhs and Fifty Thousands (Rs. 2,50,000/-) per deliverable along with additional consideration by way of ten per cent (10%) profit share was to be paid on an annual basis and the Respondent No. 1/Defendant No. 6 was allowed to engage with third parties, subject to 'right to first refusal' being available to the Appellant/ Plaintiff. Thus, according to him, though there was no modification to the ownership of the copyright in the content, which continued to be vested in the Appellant/ Plaintiff, yet the artist was allowed to work with the third parties, subject to certain conditions. 10. Learned senior counsel for the Appellant/ Plaintiff stated that the contractual period in the instant case is till 30th September, 2025 which is still subsisting and the Appellant/ Plaintiff is seeking to enforce the negative covenant in the Addendum till the said contractual period and not beyond 30th September, 2025. 11. He submitted that Section 14 of the Act, 1963 is not applicable to the present case as the Appellant/ Plaintiff is not seeking specific performance of the contract but an injunction to perform a negative covenant. He sub....
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....rom the deliverables. According to him, the revenue from the songs which was the consideration for the Appellant/ Plaintiff under the Addendum cannot be ascertained by any means as different songs have different views on different platforms which is an ongoing and ever continuing process since as long as the song is available on any platform, the same can be viewed and therefore, no definite amount of revenue earned from the songs can be ascertained as the same will keep on changing and consequently, damages for loss of such revenue cannot be ascertained. He submitted that Section 38(3) of the Act, 1963 enables the Court to grant injunction where no standard exists for ascertaining the actual damage caused, or likely to be caused, by the invasion. 15. He also submitted that the impugned judgment was completely contrary to the law of contract extant in Indian jurisprudence as it gave complete exoneration from contractual stipulations/ obligations to a contracting party on wholly unsustainable ground that the parties had lost trust in each other and hence, the breaching party cannot be held bound to the terms thereof. 16. He contended that the learned Single Judge completely mi....
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....espondent No.1/ Defendant No.6 on the said agreements were forged as they do not match with the signatures on the Original Agreement and the Addendum. He emphasised that the date of execution of the alleged Assignment Agreement dated 01st June, 2021 between Respondent No.1/Defendant No. 6 and Respondent No. 2, which is same as the Original Agreement with the Appellant/ Plaintiff raises question on the authenticity of the alleged Assignment Agreement. According to him, Respondent No. 1/Defendant No.6 could not have been in two different cities on the same day for execution of these two agreements. He also stated that the official records of Annapurna Film Studio LLP as available on the official website of the Ministry of Corporate Affairs shows that it was incorporated on 06th October, 2021. Therefore, on the date of the alleged Assignment Agreement i.e. 01st June, 2021, Respondent No. 2 was not even existing. Thus, he contended that Respondent No. 1/Defendant No. 6 in collusion with Respondent No. 2 and Respondent No.5 had perpetrated fraud upon this Court in order to defeat the just rights of the Appellant/ Plaintiff. ARGUMENTS BY LEARNED COUNSEL FOR THE RESPONDENT NO.1/ ....
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....ion of the agreements and the Addendum had never been acted upon by the Respondent No.1/ Defendant No.6. 24. He further submitted that on bare reading of the Original Agreement and Addendum, it is apparent that they were excessively one-sided and cast no obligation on the Appellant/ Plaintiff, while at the same time imposed an unreasonable, unfair and unjustified restraint on the Respondent No. 1/Defendant No.6's right to exercise any lawful profession, carry on business or trade of any kind. He contended that the Original Agreement and Addendum imposed a "bondage" on the Respondent No.1/ Defendant No.6 by way of exclusivity clause as it restrained the said Respondent from working and singing for any other company other than the Appellant/ Plaintiff. He contended that if any relief is granted to the Appellant/ Plaintiff in the present proceedings, then the Respondent No.1/ Defendant No.6 will be rendered idle - a situation which the Act, 1963 does not contenance. In support of his submission, he relied on ABP Network Private Limited vs. Malika Malhotra, 2021 (6) R.A.J. 628 (Del), Simran Music Company vs. Prit Brar & Ors., MANU/DE/9846/2007, Infinity Optimal Solutions Pvt. Lt....
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....urt had observed that even in absence of specific clause authorizing and enabling either party to terminate an agreement in the event of happening of events specified therein, a commercial transaction could be terminated even without assigning a reason by serving a reasonable notice and ultimately if it is found that the termination was bad in law or contravening any terms or the agreement, the remedy of the appellant would be to seek a compensation for such wrongful termination but not claim for specific performance." 28. He repeatedly emphasised that the Courts have wide discretion while dealing with specific performance cases. Consequently, he submitted that as a general rule, Courts award damages with specific performance of a contract being an exception. COURT'S REASONING AMENDMENT ACT 2018 HAS MADE SPECIFIC PERFORMANCE OF A CONTRACT A GENERAL RULE RATHER THAN AN EXCEPTION. THE LEGISLATIVE SHIFT IS TOWARDS STRONGER ENFORCEMENT OF CONTRACTS. 29. Specific performance is an equitable relief given by the Court to enforce against a defendant the duty of doing what he agreed by the contract to do. It was in the process of a search for effective remedial action that Speci....
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..... Anand Desai. 34. Acting on the recommendations of the said Committee, the Government of India decided to amend the Act, 1963 prospectively (See: Katta Sujatha Reddy and Another Vs. Siddamsetty Infra Projects Private Limited and Others, (2023) 1 SCC 355). The Statement of Objects and Reasons of the Specific Relief (Amendment) Act, 2018 (hereinafter be referred to as 'Amendment Act, 2018') is reproduced hereinbelow :- "STATEMENT OF OBJECTS AND REASONS The Specific Relief Act, 1963 was enacted to define and amend the law relating to certain kinds of specific relief. It contains provisions, inter alia, specific performance of contracts, contracts not specifically enforceable, parties who may obtain and against whom specific performance may be obtained, etc. It also confers wide discretionary powers upon the courts to decree specific performance and to refuse injunction, etc. As a result of wide discretionary powers, the courts in majority of cases award damages as a general rule and grant specific performance as an exception. 2. The tremendous economic development since the enactment of the Act have brought in enormous commercial activities in India in....
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....f sought to be remedied and the object and the purpose of the legislation in question. In Kalpana Mehta v. Union of India, (2018) 7 SCC 1 : 2018 SCC OnLine SC 512, the Supreme Court has held as under :- "125. In K.P. Varghese v. CIT, (1981) 4 SCC 173 : 1981 SCC (Tax) 293, the Court, while referring to the Budget Speech of the Minister, ruled that speeches made by Members of legislatures on the floor of the House where a Bill for enacting a statutory provision is being debated are inadmissible for the purpose of interpreting the statutory provision. But the Court made it clear that the speech made by the mover of the Bill explaining the reasons for introducing the Bill can certainly be referred to for ascertaining the mischief sought to be remedied and the object and the purpose of the legislation in question. Such a view, as per the Court, was in consonance with the juristic thought not only in the western countries but also in India as in the exercise of interpretation of a statute, everything which is logically relevant should be admitted. Thereafter, the Court acknowledged a few decisions of this Court where speeches made by the Finance Minister were relied upon by the ....
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....c performance, you take money". It was also impacting our standing in the Ease of the Doing Business. Therefore, ultimately, it was thought that this matter requires to be addressed. And, ultimately, a three-member Committee of eminent people was formed and that Committee recommended - there were people from the law firms; there were people from the industry - that this requires proper amendment. And, therefore, we came with an amendment. What is the purport of the amendment which we are seeking to move today? It is basically three- fold. First and foremost, now, a specific performance shall be the rule and damages has been exception. So, we have reversed the entire focus of the Bill from 1963 to 2017-18 .... " 37. From the aforesaid, it is apparent that the primary intent behind the Amendment Act, 2018 is to introduce greater certainty in the enforcement of contracts and consequently improve India's ranking in 'Enforcement of Contracts' and 'Ease of Doing Business'. 38. This Court is of the view that the Amendment Act, 2018 introduces a paradigm shift in law regarding contractual enforcement in India. A glaring instance of the legislative shift is the ame....
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....y,- (a) a contract for the non- performance of which compensation is an adequate relief; (b) a contract which runs into such minute or numerous details or which is SO dependent on the personal qualifications or volition of the parties, or otherwise from its nature is such, that the court cannot enforce specific performance of its material terms; (c) a contract which is in its nature determinable; (d) a contract the performance of which involves the performance of a continuous duty which the court cannot supervise. (2) Save as provided by the Arbitration Act, 1940, no contract to refer present or future differences to arbitration shall be specifically enforced; but if any person who has made such a contract (other than arbitration agreement to which the provisions of the said Act apply) and has refused to perform it, sues in respect of any subject which he has contracted to refer, the existence of such contract shall bar the suit. (3) Notwithstanding anything contained in clause (a) or clause (c) or clause (d) of sub-section (1), the court may enforce specific performance in the following cases: (a) where the suit is for the enforcement o....
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....ts in fraud of the contract, or willfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or (c) who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms of the performance of which has been prevented or waived by the defendant. Explanation : For the purposes of clause (c),- (i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court; (ii) the plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction. 16. Personal bars to relief .- Specific performance of a contract cannot be enforced in favour of a person- (a) who has obtained substituted performance of contract under section 20; or (b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or ....
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....se (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract. (3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance. (4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the party. 20. Substituted performance of contract.- (1) Without prejudice to the generality of the provisions contained in the Indian Contract Act, 1872 (9 of 1872), and, except as otherwise agreed upon by the parties, where the contract is broken due to non-performance of promise by any party, the party who suffers by such breach shall have the option of substituted performance through a third party or by his own agency, and, recover the expenses and other costs actually incurred, spent or suffered by him, from the party committing such breach. (2) No substituted performa....
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....ust, for including a claim for such compensation. Explanation: The circumstance that the contract has become incapable of specific performance does not preclude the court from exercising the jurisdiction conferred by this section. 21. Power to award compensation in certain cases.- (1) In a suit for specific performance of a contract, the plaintiff may also claim compensation for its breach in addition to such performance. (2) If, in any such suit, the court decides that specific performance ought not to be granted, but that there is a contract between the parties which has been broken by the defendant, and that the plaintiff is entitled to compensation for that breach, it shall award him such compensation accordingly. is entitled to compensation for that breach, it shall award him such compensation accordingly. (3) If, in any such suit, the court decides that specific performance ought to be granted, but that it is not sufficient to satisfy the justice of the case, and that some compensation for breach of the contract should also be made to the plaintiff, it shall award him such compensation accordingly. (4) In determining the amount of any co....
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.... The suits had no particular time period in which they had to be disposed of further leading to years of impediment and delay in enforcing contractual liabilities. A suit filed under the Specific Relief Act would have to be disposed off within twelve months from the date of service of summons to the defendant. This period can be extended by six months after the recording of written reasons by the court. There was no demarcation of any Court as a special one and the routine civil courts had the jurisdiction over such matters and dealt with them accordingly. Certain civil courts are proposed to be designated as Special Courts by the state government that will deal specifically with the cases pertaining to the infrastructure related disputes. 42. Consequently, the Amendment Act, 2018 has changed the nature of specific relief from an equitable, discretionary remedy to a statutory remedy. It has made specific performance of a contract a general rule rather than an exception. THE ORIGINAL AGREEMENT & ADDENDUM ARE NOT DETERMINABLE 43. The agreements in question are not determinable, as there is a negative covenant and the Respondent No.1/ Defendant No.6 has no right t....
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.... (b) a contract, the performance of which involves the performance of a continuous duty which the court cannot supervise; (c) a contract which is so dependent on the personal qualifications of the parties that the court cannot enforce specific performance of its material terms; and (d) a contract which is in its nature determinable. xxxx xxxx xxxx 41. Injunction when refused .- An injunction cannot be granted- xxxx xxxx xxxx (e) to prevent the breach of a contract the performance of which would not be specifically enforced. 42. Injunction to perform negative agreement .- Nothwithstanding anything contained in clause (e) of section 41, where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied, not to do a certain act, the circumstances that the court is unable to compel specific performance of the affirmative agreement shall not preclude it from granting an injunction to perform the negative agreement: Provided that the plaintiff has not failed to perform the contract so far as it is binding on him." 47. ....
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....s short of indirectly compelling the singer or actor or employee to do the agreed work. 54. In fact, the judgment in Warner Brothers Pictures vs. Nelson (supra), was applied in Niranjan Shankar Golikari vs. Century Spinning and Manufacturing Co. Ltd. (supra) wherein Niranjan Golikari, the employee had resigned from the services of the employer during the contractual period of five (5) years and joined another company, yet the Supreme Court upheld the injunction granted against him restraining him from getting employment or being engaged as a shift supervisor in the manufacture of tyre cord yarn or as an employee under any title discharging substantially the same duties as a shift supervisor in Rajasthan Rayon, Kotah or any other company or firm or individual in any part of India for the term ending 15th March, 1968 (term as mentioned in the agreement). 55. The said judgment has been consistently followed in Gujarat Bottling Co. Ltd. & Ors. V. Coca Cola Co. & Ors. (supra) and Percept D' Mark (India) (P) Ltd. V. Zaheer Khan & Anr. (supra). The relevant portion of all the aforesaid judgments are reproduced hereinbelow: A. Warner Brothers Pictures, Incorporated V. Ne....
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.... and not against Section 27 of the Contract Act. In Brahmaputra Tea Co. Ltd. v. Scarth [ILR (XI) Cal 545] the condition under which the covenantee was partially restrained from competing after the term of his engagement was over with his former employer was held to be bad but the condition by which he bound himself during the term of his agreement, not, directly or indirectly, to compete with his employer was held good. At page 550 of the report the court observed that an agreement of service by which a person binds himself during the term of the agreement not to take service with any one else, or directly or indirectly take part in, promote or aid any business in direct competition with that of his employer was not hit by Section 27. The Court observed: "An agreement to serve a person exclusively for a definite term is a lawful agreement, and it is difficult to see how that can be unlawful which is essential to its fulfilment, and to the due protection of the interests of the employer, while the agreement is in force." [See also Pragji v. Pranjiwan [5 Bom. L.R. 872] and Lalbhai Dalpathbhai & Co. v. Chittaranjan Chandulal 1966 Pandya [AIR Guj 189]]. In Deshpande v....
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....re no validity in the contention that the negative covenant contained in clause 17 amounted to a restraint of trade and was therefore against public policy." C. Gujarat Bottling Co. Ltd. And Others Vs. Coca Cola Co. And Others, (1995) 5 SCC 545 34. Since the negative stipulation in paragraph 14 of the 1993 Agreement is confined in its application to the period of subsistence of the agreement and the restriction imposed therein is operative only during the period the 1993 Agreement is subsisting, the said stipulation cannot be held to be in restraint of trade so as to attract the bar of Section 27 of the Contract Act. We are, therefore, unable to uphold the contention of Shri Shanti Bhushan that the negative stipulation contained in paragraph 14 of the 1993 Agreement, being in restraint of trade, is void under Section 27 of the Contract Act. ....... 42. In the matter of grant of injunction, the practice in England is that where a contract is negative in nature, or contains an express negative stipulation, breach of it may be restrained by injunction and injunction is normally granted as a matter of course, even though the remedy is equitable and thus in pr....
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....were a case for reconsideration of this 132 years old interpretation, though none is made out by the appellant, such an exercise ought not to be undertaken in the present interlocutory proceedings ........ 56. The legal position with regard to post-contractual covenants or restrictions has been consistent, unchanging and completely settled in our country. The legal position clearly crystallised in our country is that while construing the provisions of Section 27 of the Contract Act, neither the test of reasonableness nor the principle of restraint being partial is applicable, unless it falls within express exception engrafted in Section 27 ..... 60. We have perused the contract in detail. The terms of the contract were expressly limited to 3 years from 30-10-2000 to 29-10-2003, unless extended by mutual agreement, and all obligations and services under the contract were to be performed during the term. 61. Clause 31(b) was also to operate only during the term i.e. from the conclusion of the first negotiation period under clause 31(a) on 29-7-2003 till 29-10-2003. This Respondent 1 has scrupulously complied with. So long as clause 31(b) is read as being op....
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..... Ltd. (supra) is not applicable to the present case as the contract was still subsisting therein. On the contrary, as pointed out hereinabove, in Niranjan Shankar Golikari Vs. Century Spinning and Manufacturing Co. Ltd. (supra) the Supreme Court enforced the negative covenant despite termination of the contract by the employee. 59. The reliance by the learned Single Judge in the impugned order on the judgment of the Supreme Court in Percept D' Mark (India) (P) Ltd. V. Zaheer Khan & Anr (supra) is also misplaced, as in the said case, the cricketer's agreement with the plaintiff therein for availing its services as an agent had ended i.e. expired by efflux of time and what was sought therein was an injunction against the cricketer not to contract with different agencies after the performance of the contract was over. In such circumstances, it was held that the plaintiff therein cannot compel the cricketer to appoint the plaintiff therein as his agent in perpetuity. 60. Consequently, this Court is of the view that the learned Single Judge has erred in holding that since the Respondent No.1/ Defendant No.6 had terminated the contract, the negative covenant cannot be enfo....
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....ation or enforce the performance of the covenants, representations and obligations contained in this Agreement. These injunctive remedies are cumulative and are in addition to any other rights and remedies the Parties may have at law or in equity, including a right for damages." (emphasis supplied) 65. Consequently, this Court is of the view that both the Original Agreements and the Addendum in question preclude the Respondent No.1/ Defendant No.6 from contending that damages is an adequate remedy and shows that Respondent No.1/ Defendant No.6 is party in breach whose actions have caused losses to the Appellant/ Plaintiff. IN VIEW OF THE AVERMENTS IN THE PLAINT, THE APPELLANT- PLAINTIFF'S SUIT CANNOT BE DISMISSED ON LACK OF TERRITORIAL JURISDICTION. 66. As far as the plea of lack of territorial jurisdiction is concerned, this Court finds that the Appellant/ Plaintiff in its plaint in Para 106 has averred that 'the Plaintiff submits that the content created by the Defendant No.6 in breach of the copyrights and Intellectual Property Rights of the Plaintiff granted under agreement with the Plaintiff, has been and can be viewed at New Delhi, and has been downloaded ....
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....rtual' shop because of the advancement of technology, in our view, it cannot be said that the appellant/plaintiff would not carry on business in Delhi'. 69. Since in the present case, the Appellant/ Plaintiff in its plaint avers that viewers in Delhi have been specifically targeted and there has been an alleged injurious effect of the same, this Court is of the view that Appellant/ Plaintiff's suit cannot be dismissed at this stage on ground of lack of territorial jurisdiction. It is open to the Respondent No.1/ Defendant No.6 to raise this defence at the trial stage. IN VIEW OF THE DEFENCE THAT THE AGREEMENT AND ADDENDUM ARE VITIATED BY FRAUD, THE MATTER CANNOT BE REFERRED TO ARBITRATION. 70. It was the Respondent No.1/ Defendant No.6's case in the application for vacation of interim injunction filed before the learned Single Judge that the entire Original Agreement and the Addendum, which incorporate the arbitration clause, are vitiated by fraud. The relevant portion of the application for vacation of the interim injunction filed by Respondent No.1/ Defendant No.6 is reproduced hereinbelow :- "15. That thereafter in month of February 2022 Sh. Raj....
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....uary. xxx xxx xxx 22. That even in the termination clause no option is conferred on the artist to terminate the contract. The artist has been made liable to deliver songs to third parties with whom he has no direct or indirect agreement. The rights of writers, lyrist, directors, producers of the applicant/Defendant has been attempted to be taken away by the plaintiff despite the fact that no writer/lyrist of the songs sung by the applicant/ answering Defendant, directors and producers were party to the above said fraudulent and unlawful agreements. The agreements have been drafted with a fraudulent mindset wherein not only an attempt has been made to steal, usurp and detain the art of the applicant/ Defendant but also the work of the writers, lyrist, directors, producers have been attempted to be illegally captured." 71. In Vidya Drolia and Others Vs. Durga Trading Corporation, (2021) 2 SCC 1, the Supreme Court has held as under :- "78. In view of the aforesaid discussions, we overrule the ratio in N. Radhakrishnan [N. Radhakrishnan v. Maestro Engineers, (2010) 1 SCC 72 : (2010) 1 SCC (Civ) 12] inter alia observing that allegations of....
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.... be permitted to renege his promises under the garb of a restriction allegedly violative of any law. PRIMA FACIE CONDUCT OF THE RESPONDENT NO.1/ DEFENDANT NO.6 IS NEITHER HONEST NOR FAIR. 77. The primary defence adopted by Respondent No.1/Defendant No.6 that he entered into the agreements under misrepresentation or fraud perpetrated by the Appellant/ Plaintiff as the Respondent No.1/Defendant No.6 was not well versed in English, inspires no confidence. The Addendum was entered into both in English and Hindi languages, post-exchange of legal notices between the parties to avoid any allegation that the Respondent No.1/ Defendant No.6 did not understand the terms of the agreement. 78. This Court also finds that at the time of execution of the Addendum several insertions/ corrections were made in handwriting and signed by the Respondent No.1/ Defendant No.6 which is apparent from review of clauses 3.1, 6.2 and 8 of the Addendum. 79. Disputes having arisen between the parties post execution of the Original Agreement, this Court is of the prima facie view that Respondent No.1/Defendant No.6 being a professional is likely to have been assisted by lawyers and his manager at the....
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....), Simran Music Company vs. Prit Brar & Ors. (supra), Infinity Optimal Solutions Pvt. Ltd. (IOS) vs. Vijender Singh & Ors. (supra) and Warren vs. Mendy and Anr. (supra) offer no assistance to the Respondent No.1/ Defendant No.6. CONTENTION THAT ADDENDUM WAS NEVER ACTED UPON IS NOT CORRECT 84. The contention of the Respondent No.1/ Defendant No. 6 that the Addendum was never acted upon is not correct as out of the total twelve (12) songs delivered by him since the inception of the Original Agreement, eight (8) songs were delivered after execution of the Addendum, i.e. from 8th April 2022 onwards. Post receipt of twelve (12) songs, the advance of Rupees Thirty Lakh (Rs. 30,00,000/-) provided by the Appellant/ Plaintiff was adjusted and requests to raise further invoices were made by the Appellant/ Plaintiff. NO ALLEGATION THAT APPELLANT/PLAINTIFF BREACHED EITHER THE ORIGINAL AGREEMENT OR ADDENDUM 85. It is pertinent to mention that there is no allegation either in the application for vacation of interim injunction or in the present appeal that the Appellant/ Plaintiff has breached or violated any terms of the Original Agreement or Addendum. Consequently, this Court is of ....