2010 (10) TMI 1167 - HC - Indian Laws

Summary

Issues Involved:
1. Legality of the termination of the Memorandum of Understanding (MOU) between MSM Discovery Private Ltd. (MSMD) and Viacom18.
2. Grant of interim relief by the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) to Viacom18 and denial of the same to MSMD.
3. Scope of powers of TDSAT under the Telecom Regulatory Authority of India Act, 1997 (TRAI Act).
4. Impact of termination on the contractual relationship between Star Den Media Services Private Ltd. (STAR DEN) and Television Eighteen India Ltd. (TV 18) and IBN 18 Broadcast Ltd. (IBN18).
5. Validity of the termination notice issued by TV 18 and IBN18 to STAR DEN.
6. Grant of interim relief by TDSAT to TV 18 and IBN18 and denial of the same to STAR DEN.
7. Applicability of the Specific Relief Act, 1963 (SRA) and Indian Contract Act, 1872 in the context of the disputes.

Detailed Analysis:

1. Legality of the Termination of the MOU between MSMD and Viacom18:
The MOU between MSMD and Viacom18 granted MSMD exclusive distribution rights for Viacom18 channels. Clause XX of the MOU stipulated a 90-day notice period for termination in case of a material breach. Viacom18 terminated the MOU without the required notice, citing MSMD's failure to place Viacom18's channels in prime slots. MSMD contended that the termination was illegal due to the absence of the 90-day notice. The TDSAT acknowledged the lack of notice but granted interim relief to Viacom18, restraining MSMD from representing Viacom18.

2. Grant of Interim Relief by TDSAT to Viacom18 and Denial to MSMD:
TDSAT granted interim relief to Viacom18, restraining MSMD from representing it post-termination. MSMD argued that the TDSAT's order was illegal as it granted relief despite acknowledging the termination's illegality. TDSAT reasoned that MSMD was seeking specific performance of a contract not enforceable under Section 41(e) of the SRA. The court upheld TDSAT's decision, noting that the losses suffered by Viacom18 due to MSMD's continued representation could be quantified and compensated.

3. Scope of Powers of TDSAT under the TRAI Act:
TDSAT's powers under Sections 14 and 15 of the TRAI Act include adjudicating disputes between service providers and granting interim relief. The court emphasized that TDSAT has the powers of a civil court and is guided by principles of natural justice. The court cited the Supreme Court's observations in Union of India v. Tata Teleservices, highlighting TDSAT's role as a specialized tribunal dealing with technical aspects of disputes.

4. Impact of Termination on Contractual Relationship between STAR DEN and TV 18 and IBN18:
STAR DEN had an agreement with TV 18 and IBN18 for exclusive distribution rights of their channels. The agreement allowed termination with a 30-day notice. TV 18 and IBN18 terminated the agreement, citing breaches by STAR DEN. STAR DEN contended the termination was invalid and sought interim relief to continue the contract. TDSAT denied interim relief to STAR DEN, restraining it from representing TV 18 and IBN18.

5. Validity of the Termination Notice Issued by TV 18 and IBN18 to STAR DEN:
TV 18 and IBN18 issued a termination notice to STAR DEN, citing breaches such as replacement of channels and non-payment of dues. STAR DEN argued the termination was invalid and sought to continue the contract. TDSAT found the termination notice valid and denied interim relief to STAR DEN, restraining it from representing TV 18 and IBN18.

6. Grant of Interim Relief by TDSAT to TV 18 and IBN18 and Denial to STAR DEN:
TDSAT granted interim relief to TV 18 and IBN18, restraining STAR DEN from representing them post-termination. STAR DEN argued that TDSAT should consider the broader impact on consumers and the industry. The court upheld TDSAT's decision, noting that the losses suffered by STAR DEN due to the termination could be quantified and compensated.

7. Applicability of the SRA and Indian Contract Act in the Context of the Disputes:
The court discussed the applicability of the SRA and Indian Contract Act in the context of the disputes. It noted that TDSAT had correctly applied the provisions of the SRA and Contract Act in deciding the interim relief. The court cited the Supreme Court's decision in Southern Roadways Ltd. v. S.M. Krishnan, emphasizing that an agent's authority terminates upon revocation of the agency, and the agent's remedy lies in claiming damages.

Conclusion:
The court upheld the TDSAT's orders granting interim relief to Viacom18 and TV 18 and IBN18, and denying the same to MSMD and STAR DEN. It found no material irregularity in TDSAT's decisions and emphasized that the losses suffered by the petitioners were quantifiable and compensatable. The court dismissed the writ petitions with costs.