1. This is an appeal under Section 37 of Arbitration and Conciliation Act, 1 996 (henceforth "the Act"), against the order dated 15-2-99, passed by XIth Additional District Judge, Jabalpur, in an unregistered Case No. 99.
2. The learned counsel for the parties, at the outset, expressed the view that this case be finally disposed of and, therefore, they were heard finally by this Court. The learned counsel for the respondent No. 1 fifed a written submission after the arguments were over. The learned counsel expressed that the written submission shall supplement his arguments as the aide memoire to the Court. Accordingly, permission was granted. In paragraph 1 of the written submission there is an indication that the respondent No. 1 reserved its right to file appropriate reply to memo of appeal as well as to the application for grant of interim injunction. This Court takes it on the oral submission of the learned counsel for the respondents Nos. 1 and 2, Shri N. Ganpati, that he has waived this condition while consenting to the final order being passed by this Court and not an interim order.
3. The appellant, Jabalpur Cable Network Pvt., Ltd., Jabalpur is acompany registered under the provisions of the Companies Act 1956. It is also registered under the Cable Television Network (Regulation) Act, 1995. It has obtained a franchise from Siti Cable Network, Pvt., Ltd., New Delhi for exhibiting by means of Cable Network, the various programmes available to it.
4. The appellant, for exhibition of its programmes, enters into agreement with several cable operators who provide the necessary signals to their subscribers so that the programmes telecast by the appellant-company may be received and displayed on their private television sets. The appellant charges fees for permission to pass the signals to the cable operators and they, in their turn, charge monthly subscription from their subscribers for transmitting those signals to their receiver sets. The respondent No. 1,E.S.P.N. Software India Pvt. Ltd., is a company registered under the Companies Act and has its registered office at Pushpa Vihar Community Centre, New Delhi. The respondent No. 2 represents its regional office at Mumbai; and the respondent No. 3 is duly appointed distributor for Jabalpur region.
5. The respondent No. 1 entered into an agreement dated 15-4-98, Annexure P-1, styled as "Star Sports Service Contract", for a period between 15-4-98 to 14-4-1999. The respondent No. 1 is named as the "licensor" in the contract and the appellant is known as "affiliate". It appears from Clause III of the agreement that the term of one year between the parties was to expire by efflux of time unless the contract was renewed subject to same terms except for the fees which could be varied. The amount of fees in the contract was payable at the rate of Rs. 48,000/-per month by the affiliate to the licensor. However, the licensor reserved its right to revise the subscription from time to time, Further it appears from Clause IV of the agreement that the licensor reserved its right to renegotiate with the affiliate with regard to amount of monthly subscription payable to it, if it found that there was a substantial change in the base of the subscribers of the affiliate. For this purpose, the licensor had reserved the right to give a notice often days and on the failure of talks regarding renegotiation the licensor had a right to terminate the contract by the end of the month. An important condition was that the licensor granted to the affiliate a nonexclusive right to distribute the services provided by Star Sports for reception by the customers of the distribution systems. It was further agreed that licensor had right to terminate the contract by written notice if it believed in good faith and reasonable judgment that it was threatened or subject to legal action by the Government or any of its authorities under the laws of the land and the rules etc. It was further agreed that the suspension of service will be on the basts of no fault liability on the part of the licensor. Then the oilier important part of the agreement was in Clause 8 of the agreement which stated that the licensor had a right to disconnect the service provided and terminate the agreement without prior notice in case of non-payment of fees when they became due for payment as per Clause IV of the agreement. However, the licensor had discretion not to disconnect the service and terminate the agreement upon such terms and conditions as the licensor may deem fit and proper which may, inter alia, include the receipt of entire arrears of money along with interest agreed thereon at the rate of 1-1/2 per cent per month or at the highest lawful rate, whichever is higher compounded monthly from the date such amounts which became due until they are fully paid- Clause 10 shows that "Star Sports", "ESPN Swear Sports" were to be treated as the trade names and the property of "Star Television Products Limited"
and the affiliate had no right to use such names for its own purpose. The right of termination was given in Clause 12. Ordinarily, termination of an agreement in Clause 12(a) would be done by seven days' prior notice by registered post on breach of any of the obligations by the concerned party or on bankruptcy or insolvency of other party. The exception to this Clause 12(a) is given in Clause 12(b). The licensor was given absolute right to terminate the agreement without notice to the affiliate upon occurrence of any of the following events :--
"(i) Non-payments of fees as contemplated in Clause IV hereof.
(ii) Non-payment of hire purchase instalments envisaged in Clause V hereof.
(iii) Breach of Representations and warranties set out in Clause 3 hereof."
The effect of termination would be that the affiliate was required to immediately pay the licensor all outstanding payments and other sums that may be due to the licensor, and it was required to promptly return the equipments given under the hire-purchase agreement in good working condition, immediately upon termination of the agreement. Clause 14 of the agreement showed that after termination of the agreement the licensor had a right to revive the agreement on such terms as it may deem it proper. It included, among others, the reconnection of service and revival of the agreement on :--
(i) payment of reconnection charges; and
(ii) payment of charges of default period plus interest at the rate mentioned in Clause 8 of the agreement as well as payment of an amount to be decided by the licensor at its discretion as advance in order to ensure timely payment of the future service charges by the affiliate:
The condition No. 15 is being reproduced hereunder as they are necessary for the decision of this appeal :--
"15. GENERAL 15.1 Entire understanding This agreement contains the entire understanding between the parties with respect to the subject-matter covered and supersedes any previous agreements between the parties regarding such subject-matter.
15.2 Covering Law and Arbitration
(a) The substantive rights and obligations of the parties under this agreement shall be governed by Indian Law. All claims and controversies hereunder shall be adjudicated exclusively in the Courts of Delhi, India where the present agreement has been signed and executed and parties hereto irrevocably subject themselves to the jurisdiction of such Courts and waive any arguments that such Courts are an inconvenient or inappropriate forum for the adjudication of such disputes.
(b) If any disputes or differences arise between the parties hereto as to the effect, interpretation or application of this agreement or as to their rights, duties or liabilities thereunder, or as to any act, matter or thing arising out of consequent to, or in connection with this agreement (hereinafter referred as "the difference") the parties shall endeavour to resolve the same amicably through negotiations. In the event that the difference is not resolved by means of negotiations within a period of 30 days of such difference period as is agreed between the parties, such difference then shall be referred to and settled by arbitration by three arbitrators, one to be appointed by each party and the third to be appointed by the two arbitrators. The arbitration proceedings shall be in accordance with the provisions of Arbitration and Conciliation Act, 1996 or any subsequent enactment or amendment thereof. The decision of the arbitrators shall be final and binding upon the parties. The venue of the arbitration proceedings shall be New Delhi."
6. After the aforesaid agreement was entered into, the appellant made a request to respondent No. 3, which was the distributor of the signals to the appellant for and on behalf of the respondent No. 1, by letter dated 22-7-98, Annexure P-6 that 80 percent of the cable operators were not paying it the dues and, therefore, it was discontinuing its service to the cable operators and accordingly, it will not be paying the respondent No. 3 for Star Sports Services from the date of next renewal. However, the last line of the letter says that in case, the cable operators were ready and willing to pay the charges for Star Sports Services, the appellant shall continue its services. It appears that pursuant to this letter, Annexure P-6, the respondent deactivated the Star Sports Services on 7th of August, 1998 as shown in the letter, Annexure P-9, dated 26th of October, 1998. However, prior to deactivating the Star Sports Services the appellant was informed by a letter, Annexure P-7, dated 24th July, 1998 to the following effect:--
"In case the payment is not made on the date it is due, naturally would be service be disconnected. However, I am sure you are more than aware as per the STAR Sports service contract W 00802, the subscription charges are payable even for that period that the STAR Sports services is discontinued."
After receiving the aforesaid letter dated 24-7-98, the appellant sent a reply dated 25th of July, 1998, Annexure P-8, to the Regional Manager, the respondent No. 2. It was stated in this letter, inter alia, that the condition of demanding subscription charges even for the period the Star Sports Services was discontinued, would leave the appellant with no option but never to restart the Star Sports Services. Thereafter, on 7th of August, 1998 the services of Star Sports discontinued. Then again on 30th of October, 1998, after waiting for about two months, it appears that the appellant again wanted to start a dialogue and stated that the conditions imposed by the respondent No. 1 were one sided and high handed. Ultimately, it appears that the talks between the parties had broken down and as a consequence thereof the respondent No. 3, Channel Links wrote to the appellant that the agreement stood terminated with effect from 4-1-99, as per Annexure P-11, and it required the appellant to pay Rs. 2,40,000/- as service charges for the period falling between 24th of July, 1998 to 24th of December, 1998.
7. It appears that thereupon, the appellant filed an application under Section 9 of the Act before the Court-below. The appellant therein, after placing the facts on record, required the Court-below to exercise its powers under Sections 9(ii)(d) and 9(ii)(e) of the Act praying that an ex parte order be passed requiring the respondents to restart the Star Sports Channel for the viewers at Jabalpur city by providing the necessary equipments so that the signals be issued to the cable operators. It was specifically prayed that the action of the respondents demanding fees during the period the Star Sports Services were not displayed, was one sided and high handed. This request was specifically made in view of the fact that there was a test series likely to be telecast between India, Pakistan and Srilanka in the months of February and March, 1999.
8. The learned trial Judge, by the impugned order rejected the contention of the appellant to the effect that it was entitled to an ex parte temporary injunction in absence of the respondents, firstly, on the ground that the appellant was bound to deposit monthly rent as per correspondence between the parties without any consideration of the fact that the respondents were not sending signals for telecasting the programmes. It was further held in the impugned order that the appellant did not deposit fees nor did it start arbitration proceedings for about 5 to 6 months. Further it was held that it was not a relevant ground for grant of temporary injunction that the cable operators had not paid the fees. Further, the learned trial Judge said that the letter dated 30th of October, 1998 showed that Doordarshan was likely to telecast the test series between India, Pakistan and Srilanka and, therefore, there was no possibility that the citizens of Jabalpur shall be deprived of watching the matches on their television sets.
9. The appellant, thereupon, filed this appeal in which this Court, by order dated 17-2-99 directed to issue show cause notices to the respondents as to why this appeal be not allowed. After requiring the appellant to serve the notices this Court gave a direction that the respondents shall take necessary steps to start Star Sports Services.
10. It is no longer in dispute that pursuant to the order passed by this Court, the respondents have started Star Sports Service channel on advance deposit of monthly rent.
11. It was pointed out during the course of arguments by the learned counsel for the respondents that an instalment of hire-purchase agreement amounting to Rs. 6,750/- was still due but the channel has already been started honouring the interim order of this Court.
12. Firstly, this Court would decide the question of maintainability of this appeal, prior to decision of the case on merits, because it is incumbent upon this Court to decide the question of its own jurisdiction first, before embarking upon decision on merits of this case.
13. The learned counsel for the respondents argued that there is no order passed by the learned trial Judge which can be said to be appealable within the meaning of Section 37 of the Act. The learned counsel argued that refusal to exercise discretion to pass an ex parte mandatory injunction in favour of the appellant would not amount to an order within the meaning of Section 37 of the Act; In this connection, the learned counsel for the respondents drew the attention of this Court to definition of "order" under Section 2(14) of the Code of Civil Procedure. The definition says that:--
" "Order" means the formal expression of any decision of a Civil Court which is not a decree."
14. The learned counsel for the appellant, on the other hand, argued that the matter was covered by either under Section 9(ii)(d) of Section 9(ii)(e) of the Act. According to the learned counsel for the appellant, refusal to grant an ex parte injunction is also an order as it formally expresses the opinion of the Court-below that the case is not such as it would exercise its powers to grant ex parte injunction. The learned counsel for the appellant argued that even an ex parte order refusing to grant temporary injunction has been held to be appealable under Order 43, Rule 1 (r) of the Code of Civil Procedure. It was argued that it would be another matter, if the Court refused to exercise its jurisdiction in a given case on the ground that the appellant had the full, opportunity to get temporary injunction after notice to the opposite party.
15. In the opinion of this Court, the first preliminary point raised by the learned counsel for the respondents Nos. 1 and 2 has no force in the eyes of law. In this particular case, the Court-below has expressed its opinion for not granting ex parte injunction. It is an order indicating the reason for not exercising the jurisdiction. Therefore, it is a formal expression of an adjudication. It cannot be disputed that under Section 9 of the Act the Court has power to grant interim injunction or to take such other interim measure of protection as may appear to the Court to be just and convenient. The Clause (d) of Section 9(ii) of the Act would cover the case of the appellant and in case it does not so cover the case by Clause (d) the width and amplitude of Clause (e) of Section 9(ii) of the Act gave the Court-below sufficiently wide power to issue an ex parte mandatory injunction to the respondents to provide services of Star Sports to the appellant. If the conclusion of this Court be correct then certainly, an order passed under Section 9 of the Act would be appealable under Section 37(1)(a) thereof. In view of this matter, the preliminary objection is rejected and it is held that an order refusing to grant of an ex parte injunction can be appealed against under Section 37(1)(a) of the Act.
16. This takes us to the other points raised by the learned counsel for the respondents Nos. 1 and 2. The second point raised by the learned counsel for the respondents Nos. 1 and 2 is regarding the territorial jurisdiction of the Court-below. According to him, the Clause 15.2(b) of the agreement, Annexure P-1, provided that the dispute between the parties shall be referred to arbitrators appointed under the Act and it has been provided under the agreement that the venue of the arbitration proceeding shall be at New Delhi. It has also been provided by Clause 15.2. (a) of the agreement that all the claims and controversies between the parties shall be adjudicated exclusively in the Courts at Delhi. India where the present agreement has been signed and executed and parties irrevocably subjected themselves to the jurisdiction of the Courts at Delhi without consideration of inconvenience or inappropriateness of forum for adjudication. In view of this matter, the learned counsel for the respondents Nos. 1 and 2 stated that the competent Court where an application under Section 9 of the Act could be filed would be at the Court situate at Delhi. In (his connection, the definition of the "Court" under Section 2(e) of the Act was cited to show that the competent Courts would be at New Delhi. Therefore, the contention of the learned counsel for the respondents is that in view of Clause 15.2 (a) of the agreement appropriate Civil Court at New Delhi was competent to decide the matter under arbitration Clause and not the Court at Jabalpur.
17. The learned counsel for the appellant, on the other hand, argued that the question of jurisdiction under Clause 15.2 (a) of the agreement is ultra vires and is contrary to Section 28 of the Contract Act. According to him, the parties could not confer jurisdiction on a Delhi Court when it had none. The nature of agreement showed mat the cause of action did not arise at Delhi and a Civil Suit could not be tried before the Delhi Courts. The learned counsel submitted further that Section 20 of the C.P.C. was subject to the limitations given in Sections 16 to 19 of the Act. Therefore, the argument advanced by the learned counsel for the respondents that Section 20 of the C.P.C. is applicable, should not be accepted.
18. Since the learned counsel for the respondents Nos. 1 and 2 has raised this point regarding the territorial jurisdiction of the Court-below before this Court, this Court is bound to give its reasons for its conclusion either way. In case, this Court comes to the conclusion that the Court-below had no territorial jurisdiction, the consequence would be that the Court-below shall be required to return the application for its presentation to the proper Court. In case, the decision of this Court is otherwise, the proceedings before the Court-below shall continue. Since the counsel for the respondents Nos. 1 and 2 heavily relied on the provisions of Section 20 of the C.P.C. and the counsel for the appellant controverts his argument, it would be in the fitness of things to examine the rival contentions.
19. In the opinion of this Court, it is necessary to examine the contents of the agreement, Annexure P-l for deciding what is the nature of the contract about which the dispute is being raised in the Civil Court at Jabalpur. The agreement, Annexure P-1, is styled as "Star Sports Service Contract. It is apparent that the respondent No. 1 is licensor, which provides to the appellant the facility of telecast through the cable operators, of its programmes popularly known as "Star Sports Channel". The licensor has given to the appellant a non-exclusive right to distribute the service provided by Star Sports for reception by the customers of the Jabalpur city as described in Clause II. It has also been provided that the appellant shall be given equipment to be used by it at a particular place without, shifting, removing, modifying or misusing it in any manner. The main purport of providing the equipment is for the decoding the signals received by the appellant for further distribution to the subscribers through the cable operators. In order to understand the nature of the agreement it may not be out of place to mention in brief, how the programmes are received at Jabalpur by the subscribers on their domestic television sets. Shorn of all details, the system that appears to be is that the respondent No. 1, after purchasing the right to transmit a particular programme via satellite to a particular area sends the necessary signals which are in coded form, at particular frequency. Before programmes can be telecast to a particular area it has to he decoded and then only it can be viewed on private domestic television sets. A programme like the aforesaid utilises a television camera for the purpose of transmission. It breaks the picture into tiny picture elements. These picture elements are changed into election (electric currents) which are, after suitable processing, sent to the satellite in a coded form, at a particular frequency for display of the programmes in a particular area. These signals then have to be decoded and converted into electromagnetic waves receivable by the antenna belonging to the cable operators. These currents are again sent inform signal eurrents and fed into the television receivers of domestie television sets. These signals are suitably processed finally to produce the picture in the domestic television sets of the subseribers. This is broadly the scheme of sending a picture. The description hereinabove, may not be entirely accurate in the sense it has not given the full details about the system but it gives an idea how a television picture of a programme is transmitted by the respondent No. 1. The question, therefore, to be asked is, what did the appellant get by paying Rs. 48,000/- after entering into the agreement, Annexure F-l. The answer is that he got the right to transmit the decoded signals issued by the appellant of a programme which informs the subscribers about the events telecast live or otherwise. Although this agreement is styled as a "Service Contract", it is, in fact, an agreement to receive the signals on monthly payment of Rs. 48,000A. In effect, the respondent No. 1 sold the coded information to the appellant which he had right to decode on payment of money. The question is whether these signals are movable or immovable property? The Code of Civil Procedure has defined "movable property" under Section 2(13) thereof to say that "movable property" includes growing crops. The definition is colourless and does not tell us what is "moveable properly". The Code of Civil Procedure does not define "immovable property". The definition of "movable property" in Section 3(36) of the General Clauses Act says that "movable property" shall mean the property of every description except immovable property. Therefore, we have to see from the definition of "immovable property" given in Section 3(26) of the General Clauses Act how it is defined therein. The definition aforesaid under Section 3(26) of the General Clauses Act does not tell what "immovable property" is. It is an inclusive definition and says that it shall include land and benefits arising out of the land and things attached to the earth, or permanently fastened to anything attached to the earth. This definition also does not tell what "immovable property" is. We have to take a common sense view of the matter and hold that whatever property is attached to earth would be "immovable property" and whatever else is moving, shall be "movable property" subject to the exceptions mentioned in the definition of "movable property" given under the Code of Civil Procedure. In this connection, it would be profitable to consider whether the signals issued by the respondent No. 1 can be defined as "goods" within the meaning of Sale of Goods Act. Section 2(7) of the Sale of Goods Act defines the "goods" as follows :--
"goods" means every kind of moveable property other than actionable claims and money; and includes stock and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be served before sale or under the contract of sale."
We are not concerned with the latter part of the definition but one thing is very clear from the above definition of "goods" that "goods" mean every kind of movable property. If the signals can be held to be goods then the agreement Annexure P-1 is for sale of movable property produced by the respondent No. 1 for a period of one year. It cannot be disputed that even the coded signals issued by the respondent No. 1 are a form of energy. They contain information in coded form. The appellant had not only right to decode them I but also to distribute the decoded forms of signals through cable operators. Such an agreement would I be an agreement of sale of goods. It cannot be disputed that these signals are movable and travel across from the site of programmes to the antenna of the appellant and, thereafter, to the television sets of the subscribers through the cable operators. These signals arc in a form of energy, in the shape of electromagnetic or other kind of waves. These are the goods sold by the respondent No. 1 to the appellant. In this connection, this Court relies on a decision of Supreme Court in The Commissioner of Sales Tax, Madhya Pradesh. Indore v. Madhya Pradesh Electricity Board, AIR 1970 SC 732, wherein their Lordships were required to consider whether "electricity" would be goods. The Supreme Court, reversing the decision of a Division Bench of this Court, rendered in Madhya Pradesh Electricity Board, Jabalpur v. Commissioner of Sales Tax, Madhya Pradesh, AIR 1968 MP 163, held that the "electricity" would be goods. The Supreme Court observed at page 736, paragraph 9 that;--
".........The term "movable property" when considered with reference to "goods" as defined for the purposes of sales tax cannot be taken in a narrow sense and merely because electric entry is not tangible or cannot be moved or touched like, for instance, a piece of wood or a book, it cannot cease to be movable property when it has all the attributes of such property.........."
The Supreme Court went on to point out that the electric energy was liable to abstraction, consumption and use. The signal, issued by the respondent No. 1 are also liable to be abstracted consumed and used. It may be further pointed out that the Supreme Court was of the view that electricity could be stolen and, therefore, stealing of electricity was made punishable for its theft. In this connection certain Clauses of the agreement show that the respondent No. 1 treated its right of sending signals as its property. It was provided in Clause 3 (f) of General Terms and Conditions of Annexure P-1, that the programmes issued by the Star Sports Services shall not be permitted to be copied or reproduced by the appellant. The affiliate is also not authorised to modify, misuse or tamper with the equipment or any of the signals emanating therefrom in a manner that prevents identification of the equipment number or to interfere with the signals as per Clause 3 (d) of General Terms and Conditions mentioned in the agreement, Annexure P-1. These precautions were taken by the respondent No. 1 by providing them specifically in the agreement because he treated the right to show the signals as its proprietary rights. Therefore, this Court is of the view that whatever be the name and style of the agreement, in fact, it is an agreement for sale of movable property and not of immovable property. In view of this matter, the argument of the learned counsel for the appellant that Sections 16 to 19 of the Act shall govern the cause of action in this case, is hereby rejected. The learned counsel for the respondents Nos. 1 and 2 is correct in spying that Section 20 of the Code of Civil Procedure would be attracted for determining the jurisdiction of the Court
20. Now, it has to be seen if the learned counsel for the respondent Nos. 1 and 2 is right in submitting that in view of Clause 15.2 (a) of Annexure P-1, only the Delhi Court had jurisdiction. The learned counsel for the respondents Nos. 1 and 2 relied on two decisions of the Supreme Court in Hakam Singh v. Gammon (India) Ltd., AIR 1971 SC 740 and A. B. C. Laminart Pvt. Ltd. v. A. P. Agencies, Salem, AIR 1989 SC 1239 in support of his argument. Learned counsel for the appellant referred to a decision in Angile Insulations v. Davy Ashmore India Ltd. reported in (1995) 4 SCC 153 : (AIR 1995 SC 1766). All the three decisions aforesaid lay down the law to the effect that the parties to an agreement cannot confer jurisdiction on a Court who is not possessed by it under the Code of Civil Procedure, but in case, there be an agreement between the parties to a contract that out of the two Courts having concurrent jurisdiction to try the suit, one of such Courts, shall try the suit, it is not opposed to public policy, within the meaning of Section 23 of the Contract Act; and it does not contravene Section 28 of the Contract Act. Relying on the aforesaid proposition it has been argued that the respondent No. 1, which is a registered company, was carrying on its business at its principal office at New Delhi within the meaning of explanation to Section 20 of the Code of Civil Procedure. Therefore, the Delhi Court had jurisdiction by the consent of the parties. This contention has to be examined from the point of view of application under Section 9 of the Act, read in the , light of Annexure P-l. In paragraph 21 of the application u/S. 9, it has been averred that the cause of action did not arise at Delhi and the Courts at Delhi had no jurisdiction to try the case and it was also averred that Clause (relating to territorial jurisdiction of the Court in the agreement, Annexure P-l) is not binding and does not oust the jurisdiction of this Court, meaning thereby the jurisdiction of Civil Court at Jabalpur, where the cause of action arose. It may also readily be seen that the appellant had made not only the respondents Nos. 1 and 2 parties to the application under Section 9 of the Act before the Court-below but the respondent No. 3 was also made a party to it. It is alleged in paragraph 7 of the application that the agreement in printed format was got signed by the Managing Director of the petitioner (appellant) -- company at Jabalpur through Shri Shashendra Lahri, one of the partners of the respondent No. 3 and it was countersigned by Shri Kevin Pereira at Mumbai office on behalf of the respondent No. 1. It was stated specifically in this paragraph 7 of the application that no part of the execution of the agreement took place at New Delhi. In View of this matter, prima facie, these averments have to be accepted for the purpose of deciding the objection on the point of jurisdiction raised by the respondent No. 1. The learned counsel for the appellant rightly referred to the decision of Nagpur High Court in the case of Fatehchand Ganeshram Agrawal v. Wasudeo Shrawan Dalai reported in AIR 1948 Nagpur 334. In that case, it was held that when an objection to maintainability of the suit is raised on the allegations made in the plaint itself, the allegations made in the plaint are deemed to be accepted as correct and the Court should proceed to decide the objection on that basis. Therefore, we must assume for a moment that the agreement was signed by the Managing Partner, Shekhar Agrawal at Jabalpur and by Kevin Pereira at Mumbai.
21. Now, if we read Clause 15.2 (a) of the agreement, Annexure P-1, it says that the jurisdiction with regard to all disputes is Delhi (India) 'where the agreement has been signed and executed'. The underlined words printed in the form of the agreement have not been deleted. It is obvious from the photostat copy of Annexure P-l that the agreement was not signed by the licensor at New Delhi and there is an averment that the appellant did not sign the agreement at New Delhi. Therefore, this is an ambiguity in the agreement itself. This ambiguity is to the effect whether the parties to Clause 15.2 (a) of the agreement that the Courts where the agreement was signed shall have the jurisdiction or the Courts of Delhi (India) shall have only the jurisdiction. This ambiguity cannot be resolved without ascertaining the intention of the parties and it will require evidence to determine the ambiguity in the agreement. It is also possible to argue that this ambiguity cannot be resolved as it is patent. No opinion can be given a priori at this stage. However, it is settled principle that the Court cannot delete any word from the agreement, Annexure P-1 to read it in favour of the respondent No. 1. In case, the allegations made in the application under Section 9 of the Act are accepted, it must be assumed that the agreement was not signed at New Delhi. Therefore, it cannot be assumed that the Court of Delhi shall have jurisdiction despite the presence of the words in Clause 15.2 (a) of the agreement qualifying the Courts of Delhi (India) "where present agreement has been signed and executed". It is open to the appellant to argue that the appellant's intention was that the city where the agreement was signed, shall have jurisdiction and not at the place where the respondent No. 1 had its head office and carries on business within the meaning of the explanation mentioned in Section 20 of the Code of Civil Procedure. In view of this matter, it is not possible to hold prima facie in absence of clear and cogent evidence, that by Clause 15.2 (a) of the agreement the parties confer exclusive jurisdiction to the Civil Court at New Delhi. This conclusion is merely based on the allegations made in the application under Section 9 of the Act and it will not be conclusive of the matter, as the respondents Nos. 1 and 2 can still raise an objection before the Court below and lead evidence to show that the parties were agreed and conferred jurisdiction to Delhi Court by clarifying the ambiguity which has remained in Clause 15.2. (a) by not deleting the words -- "where the present agreement has been signed and executed". That apart, it may be remembered that the case of the appellant will be governed by Section 20(b) of the Code of Civil Procedure for the reason in this case there are more than one non-applicants in the application under Section 9 of the Act before the Court-below. The respondent No. 3, which has been added as party to the application, has also been alleged in paragraph 1 of the application that on 11th of January, 1999, it sent a letter marked as Annexure P-l 1 to the appellant/applicant informing that the contract is terminated. It is obvious that the respondent No. 3 is necessary party in view of the contention of the appellant that the termination of the contract is illegal. In view of this matter, even assuming that there was agreement between the appellant and the respondent No. I that the case shall be filed in the Courts at New Delhi, where there is a principal office of the respondent No. 1, the application Under Section 9 of the Act can only be filed with the leave of the Court under the provisions of Section 20(b) of the CPC In this respect, the learned counsel for the respondent No. 1 claimed that the appellant was bound to file the application in the concerned Court at New Delhi afresh because it depended upon the discretion of the Court at New Delhi whether to grant leave or not When there are more than one defendants in the case. In the opinion of this Court it is clear that respondent No. 3 was a necessary party. It is a clear and distinct legal entity. However, despite the agreement there was no automatic conferral of exclusive jurisdiction in the Courts of New Delhi. The conferral of jurisdiction depended upon the discretion of the Court of competent jurisdiction at New Delhi. Refusal to grant leave would result in requiring the appellant to file the application at any place where the cause of action arose. There-tore, in view of Section 20(b) of the CPC the jurisdiction remained concurrent because by refusal, the New Delhi Court could not have conferred jurisdiction on Jabalpur Court.
22. In this case, therefore, the decision relied upon by the learned counsel for the respondents would not be applicable to the facts of this case. For all these reasons, the appellant had a right to file the suit under Section 20(c) of the Code of Civil Procedure at the place where the cause of action arose wholly or in part. In the opinion of this Court the signals were being sent to Jabalpur and they are not being restored here for which the appellant wants the matter to be referred to the arbitration. The application under Section 9 of the Act lies at Jabalpur on the allegations made [herein. Therefore, the second preliminary objection raised by the respondents, with regard to the jurisdiction of the Civil Court at Jabalpur, is hereby rejected.
23. The learned counsel for the respondents Nos. 1 and 2 has frankly accepted the fact that Annexure P-1, dated 11-1-99 was of no legal consequence, so far as it stated that the agreement stood terminated from 4-1-99. The learned counsel for the respondent No. 3, who had adopted the arguments of the learned counsel for the respondents Nos. I and 2 throughout, has also not stated to the contrary. That apart, it is also obvious that the respondent No. 3, the Channel Links which was merely a distributor for Jabalpur on behalf of the respondent No. 1 could not have any authority to cancel the agreement between the appellant and the respondent No. 1. In view of this matter, the argument of the learned counsel for the respondents No. 1 and 2 has to be examined whether there was actual repudiation of the contract as claimed by the respondents No. 1 and 2. It was argued that the agreement for the period between 15th of April, 1998 to 14th of April, 1999 was repudiated by the appellant by letter dated 22-7-98, Annexure P-6. It appears from that letter, Annexure P-6 that the appellant wrote to the respondent No. 3 that 80% of the cable operators were unable to pay the dues and consequently the appellant was not in a position to pay the respondent No. 3 for telecasting the Star Sports Channel and, therefore, it will not be paying the respondent No. 3 for Star Sports Services from the date of next renewal. However, it was stated that in case, the cable operators were willing to pay, the services shall be continued. The respondent No. 2, however, stated that in case, the payment is not made on due date, the services given by the respondent No. 1 shall be discontinued. It was also stated that for the period the services shall remain continued, the appellant will be required to pay the service charges. Then another letter dated 25-7-98 was written by the appellant to the respondent No. 1, which is marked as Annexure P-8 on record. In this letter, in paragraph 4, the appellant stated that it has already stated that it was desirous of continuing the services of the respondent No. 1, provided the cable operators pay their dues and agree to pay charges. However, the letter further stated that the demand during the period of discontinuance will not be accepted and in case, it was insisted upon, the appellant shall have no option but never to restart the "Star Sports Services". Even then it is very clear that the "Star Sports" did not deactivate the programme during correspondences between the parties and it deactivated the "Star Sports Services" on 7-8-98. The letter, Annexure P-10, dated 30-10-98 shows the intention of the appellant, was though belated, to have a dialogue with the respondent No. 2 on behalf of the respondent No. 1. It is apparent that the respondent No. 1 had full right to terminate the agreement for non-payment of monthly fees in terms of Clause IV thereof. The fact remains that no such action was taken by the respondent No. 1. It is thus clear that respondent No. 1 treated the agreement as subsisting and did not want to cancel it. It is, therefore, difficult to agree that the intention of the appellant was to repudiate the agreement by letters dated 22-7-98 and 25-7-98 when the respondent No. 1 itself treated the agreement as alive.
24. The learned counsel for the appellant had argued that it is very difficult to spell out from the agreement that the respondent No. 1 reserved the right to claim charges for the period the services were discontinued. The learned counsel drew the attention of the Court to Clause 15(1) of the agreement, Annexure P-1 and asserted that it was specifically mentioned in the agreement that whatever was written in the agreement, was entire understanding between the parties regarding the subject-matter covered by it. The learned counsel, therefore, argued that there is nothing in the agreement showing that the appellant was bound to compensate the respondent No. 1 during the period for which the services were discontinued even though it was so at the request of the appellant. This Court has examined the Clause -- 8th for the purpose which relates to nonpayment of fee by the affiliate. From Clause 8th, it is clear that on default or failure to pay the fees in accordance with Clause IV, the respondent No. 1 had right to disconnect all services and terminate the agreement without prior notice. It means that the respondent No. 1 had right to totally cancel the agreement. Obviously, no action of this kind was taken by the respondent No. 1 for non-payment of fees when it became due. Under the proviso to Clause 8, the respondent No. 1 was authorised to waive the termination of the agreement and disconnection of services and could enquire the appellant to pay all the arrears of money along with the interest mentioned therein during the period of default. However, Clause 8 does not, anywhere mention what would be the consequences when the agreement is not terminated formally, by giving an appropriate notice that the services are disconnected. Nor does the Clause 14 of the agreement could be pressed into service because it relates to revival of an agreement which had already been terminated and consequential reconnection. It, therefore, appears that the agreement does not provide anywhere consequences of disconnection of signals for any reason whatsoever without termination of the agreement. The question that has to be decided by the arbitrators is if the respondents can claim a right to monthly fee during the period the Star Sports channel remained deactivated at the request of the appellant. In case, the arbitrators come to the conclusion that the respondent No. 1 was entitled to licence-fee during the period of deactivation, they may award it together the interest as per agreement or in accordance with law to the respondent No. 1 by way of damages.
25. The learned counsel for the respondents Nos. 1 and 2 draw the attention of this Court to Sections 52 and 54 of the Contract Act. He argued that it was the appellant who was required to pay the money first under the agreement and as a consequence thereof he was entitled to receive the signals and under Section 54 of the Contract Act if the appellant failed to perform his part of the contract, the reciprocal promise on the part of the respondent No. 1 of issuing signals could not be claimed. It was claimed that on the basis of Section 54 of the Contract Act the respondent No. 1 was entitled to claim compensation for the period the services were not utilized. Nevertheless, if this Section 54 would not apply unless the respondent No. 1 suffered any loss on account of non-payment of fees by the appellant. On the other hand, it acquiesced in the act of the appellant and stopped sending signals at the request of the appellant. In such circumstances, Section 54 of the Contract Act would not be strictly applicable. The learned counsel for the appellant appears to be right when he says that since the respondent No. 1 agreed to stop issuance of signals, there was no quid pro quo and, therefore, the question of payment of damages did not arise. The respondent No. 1 had full right to rescind the whole contract and claim damages for breach of contract. It failed to exercise its option.
26. This takes us to the arguments advanced by the learned counsel for the respondents that the claim by way of mandatory injunction in order to prevent breach of contract should not be granted in favour of the appellant. It was argued that Section 41(e) of the Specific Relief Act provides that an injunction will be refused in respect of a breach of a contract, the performance of which would not be specifically enforced. Section 39 of the Specific Relief Act provides for permanent mandatory injunction and Section 40 thereof provides for damages in lieu of or in addition to injunction under Section 39 of that Act. The same principles will be applicable to grant a temporary injunction which are applicable to grant of permanent injunction exercise of the powers under Section 9(ii) (d) and (e) of the Act. The learned counsel for the appellant, however, argues that this Court is granting temporary injunction in the shape of the mandatory injunction and as such was really enforcing a specific performance of contract. The contract was not specifically enforceable. It was argued that it is implied that this Court should not grant temporary mandatory injunction if the specific performance of the contract prima facie, could not be granted. In this connection, the learned counsel for the appellant referred to Section 10 of the Specific Relief Act and argued that the compensation in money for non-performance would afford relief to the appellant. It was also argued that there was no standard for ascertaining the actual damages.
27. The learned counsel for the appellant, however, argued that this was a case of breach of contract to transfer movable property and, therefore, right to receive the decoded signals which were of special value to the appellant and they were not easily obtainable in the market. This presumption has to be drawn in this case and for this reason, the Court is entitled to exercise its discretion in granting the injunction prayed for.
28. The further argument of the learned counsel for the respondent No. 1 was that the contract, in question, was not enforceable because compensation in money would be adequate relief to the appellant and the contract in its nature was determinable under Section 14(1)(c) of the Specific Relief Act.
29. The answer to such problem has to be looked into from the point of view of the nature of the agreement. Section 7 of the Specific Relief Act provides that a person entitled to the possession of specific movable property may recover it in the manner provided by the Code of Civil Procedure. Explanation 2 of Section 7 aforesaid says that a special or temporary right lo present possession of the movable property is sufficient to support a suit under this section. In this situation, the Court has to determine the nature of contract. This Court has already stated the electronic signals in form of waves can be treated as goods and can be held to be movable property. In view of this matter, the appellant is entitled to hold the movable property by virtue of the agreement for a period between 15th of April, 1998 to 14th of April, 1999 provided the agreement subsisted. In view of Section 7 read with explanation No. 2 thereof if the appellant had a special or temporary right to present the possession of the signals, it could have filed an application under Section 9 of the Act for referring the matter to the arbitration. The application under Section 9 cannot be treated specifically an application for specific performance of contract. The coded signals bore the information sent by the respondent No. 1 to the appellant via satellite. After decoding the signals they became the information which could be received by the customers in their domestic television sets. The learned counsel for the appellant appears to be right in asserting that these signals were not ordinary articles of commerce and were of special value to the appellant and they were the goods which are not easily obtainable in market. Therefore, there was a presumption that the breach of a contract to transfer these goods cannot be relieved by payment of money in lieu thereof. It is also clear that there is no standard of ascertaining the loss caused to die appellant by not displaying the live programmes of the Star Sports Channel. In such cases, the contract of specific performance would be enforceable Under Section 10 of Specific Relief Act read with explanation (ii) (a) thereof. Even otherwise, it is covered by Section 10(b) of that Act. As already stated Section 7 read with explanation 2 gives the appellant right of temporary possession. It would in the nature of exception to Section 14(c) of the Specific Relief Act. For all these reasons, the contention of the learned counsel for the respondent No. 1 are not accepted.
30. The next point which is of some consequence for grant of mandatory temporary injunction is whether this Court is confined to the principles under Section 39 Rules 1 and 2 of the Code of Civil Procedure or it had some wide powers under Section 9(ii) (d) and (e) of the Act. Obviously, the language given in Clause (e) makes the power much wider. The learned counsel for the appellant referred to the case of Gujrat Bottling Co. Ltd. v. Coca Cola Company, reported in AIR 1995 SC 2372. The matter in this case was under Order 39, Rules 1 and 2 of the Code of Civil Procedure. In this case, the principle laid down was that the conduct of the parties has to be looked into for grant of injunction. It appears that conduct of both the parties in this case can be faulted and, therefore, it cannot be said that the appellant alone has to be blamed. It is well established that ordinarily, the Courts do not grant temporary injunction in mandatory form. The person claiming temporary injunction had to show more than a prima facie case in his favour in order to obtain a mandatory injunction. In this case, the respondent No. 1, right or wrong, claims its dues during the period in which the Star Sports channel remained deactivated to the appellant. In its essence, a claim for money which can be decided by the arbitrators to whom the parties have already decided to refer to dispute. It is also not in dispute that for a considerable period the respondent No. 1 did not issue the channels through the appellant to the viewers at Jabalpur. Accordingly, merely because the appellant, right or wrong, is not paying what the respondent No. 1 considers to be its just dues, can it deprive the appellant from telecasting the live information to the ultimate customers through cable operators. The appellant is ready and willing to pay the charges for the services that is liable to be rendered by the respondent No. 1, pending the dispute between the parties. In the opinion of this Court, it would be most inequitable not to grant the relief to the appellant to transmit information which is of great value when it is live and loses its importance after the telecast is over and, therefore, it would be appropriate to grant injunction to the appellant subject to certain conditions which shall be spelled out later on.
31. During the course of the argument it was suggested by the Court that subject to the decision by the arbitrators appointed as per agreement, Annexure P-l, the appellant may compromise the matter and deposit the amount claimed by the respondent No. 1. The learned counsel for the appellant insisted that he had the authority to compromise the matter in case, the respondent No. 1 does not compel the appellant to pay Rs. 2,40,000/- immediately and permits the appellant to continue the telecasting of Star Sports Channel subject to payment of rent. The learned counsel for the appellant and the Managing Director said that they were willing to pay Rs. 1,20,000/- in one instalment forthwith and the rest of the amount of Rs. 1,20,000/- shall be paid within the period of one month or so, Under these circumstances, it would be proper to direct the respondent No. 1 to continue the sending of signals which can be decoded by the appellant for showing its live programmes and other programmes which are telecast throughout the country subject to the following conditions that:--
(1) The appellant shall pay to the respondent No. 1 Rs. 1,20,000 (Rupees one lac twenty thousand) by cheque or Demand Draft, through Shri Rohit Arya, learned counsel for the respondent No. 1 within three days from the date of this order.
(2) The appellant shall pay the rest amount of Rs. 1,20,000/- (Rupees one lac twenty thousand) within a period of two weeks from the date of this order, to the respondent No. 1.
(3) The appellant shall also pay the rent due against it for the month of March, 1999 forthwith, if it has already not been paid by him; and also the rent for the month of April, 1999 when it becomes due, to the respondent No. 1.
(4) The respondent No. 1, on making payment by the appellant as directed above, shall continue to send signals till 14th of April, 1999 unless there is renewal of the agreement. It is made clear that in that case, the renewed agreement shall govern the contractual relations between the parties.
(5) The appellant is further directed to pay to the respondent No. 1 the instalment of Rs. 6,7507- (Rupees six thousand seven hundred fifty) for the hire-purchase agreement as per Schedule B of the hire-purchase agreement, which was due on 14th of January, 1999, forthwith if it has not already been paid.
(6) In case of breach of any of the aforesaid terms, by the appellant, the respondent No. 1 shall be entitled to discontinue sending of signals to the appellant and the order passed by this Court shall be deemed to be automatically vacated.
(7) In case, there be any factual dispute regarding the breach of the terms of this order, the parties shall be free to move the Court-below.
32. Accordingly, in terms of the aforesaid order, this appeal succeeds and is allowed. It is, however, made clear that any of the observations made for the purpose of grant of ex parte injunction by this Court, shall not be binding upon the Court-below or the arbitrators and the Court-below is free to decide the application under Section 9 of the Act after hearing the respondents, in case, they place fresh material before it and insist upon the decision of the application under Section 9 of the Act after receiving the notice thereof. It is further made clear that the amount of Rs. 2,40,000/- (Rupees two lac forty thousand) directed to be paid/deposited by the appellant in this order, shall be subject to final decision of the arbitrators appointed by the Court of competent jurisdiction. No costs.