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TMI Blog2021 (4) TMI 1381X X X X Extracts X X X X X X X X Extracts X X X X ..... t any stage of the proceedings, starting 18th March, 2020, regarding the covenants of the Agreement executed. That being so, in the absence of any contract duly signed by both parties, no concluded contract enforceable in law could be said to have come into being. The High Court held that a concluded contract had emerged, between UPRNL and Indure, on the ground that (i) UPRNL had sent the drafted contract to Indure, (ii) Indure had signed the contract and sent it back with modifications to UPRNL, (iii) at no time did UPRNL reject the modifications, and (iv) UPRNL, rather, acted on the basis of the contract thus returned by Indure by submitting the tender. As such, the High Court held that UPRNL could not deny the existence of the contract, or of the arbitration agreement therein. Consensus ad idem, the foremost, and most indispensable, prerequisite for any concluded contract, is totally absent in the present case. No contract, which the Court could, in exercise of its jurisdiction under Section 9 of the 1996 Act, specifically enforce, or the specific performance of which the Court could protect, even pending arbitration, can be said to exist. Thus, no occasion arises for this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form in 2020-2021. The communication read thus: Hi Aaron, As discussed and confirmed: TVF will provide 6 shows in 2020-21 Immature S2 5 Episodes of 20 min each 3 yr exclusive + 1 year non exclusive UPSC S1 5 Episodes of 20 min each 3 yr exclusive + 1 year non exclusive Flames S3 5 Episodes of 20 min each 3 yr exclusive + 1 year non exclusive 3 more shows 5 Episodes of 20 min each 3 yr exclusive + 1 year non exclusive TBD All the other clauses remain the same from last time. All masters will be cleaned / without sponsorship. Deal Value 21 cr + taxes Payment Terms: 35% Advance 65% on Delivery Look forward to a great partnership. PS mark my finance/legal. @ Megha pl initiate contract. Best Rahul Sarangi Global Head Business Content The Viral Fever (TVF) (ii) As per the petitioner, consequent to an understanding arrived at, with the respondent, the respondent forwarded, to the petitioner, an Agreement, dated 18th March, 2020 ( the Agreement ), duly signed by the respondent. The petition seeks to aver that, as the office of the petitioner at Singapore was closed owing to the COVID-2019 pandemic, the petitioner was not in a position to countersign the Agreement and send it back. The undi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 (three) years from the Effective Date, and thereafter on a non- exclusive basis for a period of 1 (one) year. Accordingly, the Company shall ensure that no part of the Program is released or distributed anywhere in the Territory through any means or modes of distribution including such modes or mediums which use satellite as the means of transmission, prior to the same being released on the Platform. The Parties further agree that, subject to Clause 4.2, during the exclusivity period of the Programs, the Company shall not and shall not cause each such Program or any parts thereof, whether independently or through any platform or mode of distribution owned or operated by the Company, to be embedded on any website, mobile application, platform or other means of distribution of content including such modes or mediums which use satellite as the means of transmission, owned or operated by a third Person in the Territory. (c) The consideration, governing the Agreement, was stipulated in Clause 8, more specifically Clauses 8.1 and 8.2 thereof. These clauses read thus: 8. CONSIDERATION 8.1 In consideration of the Rights granted by the Company to the Distributor under this Agreement, in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Distributor shall make good of the same to the Company. (d) The Agreement provided for its termination, by the petitioner or by the respondent. Clause 14 dealt with termination by the respondent, and sub-clauses 14.1 and 14.2 thereof read thus: 14.1 The Company shall be entitled to terminate this Agreement in respect of any Program by giving a prior written notice of 30 (thirty) days to the Distributor, in the event the Distributor fails to make payments towards the Minimum Guarantee in respect of any Program in accordance with this Agreement, and fails to remedy such default within 30 (thirty) days of being notified by the Company of the occurrence of such default by the Distributor; 14.2 In addition to the above, the Company shall be entitled to terminate this Agreement in respect of any Program by providing a written notice to the Distributor in the event the Distributor materially breaches the provisions of Clause 2.1.1, Clause 4.2, Clause 9.2.1, Clause 10.4, 10.4.2, Clause 10.4.4 and Clause 10.4.6 hereinabove, in respect of any Program, and where such breach is curable, fails to cure such breach within 30 (thirty) days from being notified by the Company of the occurrence of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in New Delhi shall have the exclusive jurisdiction on all matters arising out of or in connection with this Agreement. (g) Annexure-1 to the Agreement set out the details of the various Programs and their delivery schedule, in the following tabular form: Annexure-1 Delivery Materials and Delivery Schedule Sr. No. Programs Total No. of Episodes Apportioned value in INR 1. Immature season 2 (Program 1) 5 4,00,00,000/- 2. Aspirants (Tentative title) season 1 (Program 2) 5 5,00,00,000/- 3. FLAMES season 3 (Program 3) 5 3,00,00,000/- 4. ______(Program 4) 5 3,00,00,000/- 5. ______(Program 5) 5 3,00,00,000/- 6. ______(Program 6) 5 3,00,00,000/- (iii) On 19th March, 2020, the respondent raised an invoice, on the petitioner, for US $ 4,83,222. It is an admitted position that, against this invoice, an amount of US $ 2 lakhs alone has been paid by the petitioner to the respondent, on 23rd April, 2020, though the petitioner claims right to adjustment, additionally, of US $ 1,10,000. Indisputably, even thereafter, an amount of US $ 1,73,222 remains outstanding, to be paid by the petitioner against this invoice. Mr. Sibal submits that his client is willing to deposit the said amount in Court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner, thus, regarding the timelines for the three selected programs: Hi Team Mx, As per my mail last evening, sharing the timelines across various stages of the 3 shows that have got locked with Mx this year. They are as follows: UPSC: Pre Production: 25th July to 15th October 20 Shoot: 16th October to 30th November Post Production: December, January, Feb 21 Delivery: End of February 21 Immature S2: Pre Production: 1st December 20 to 15th January 21 Shoot: 16th January to 15th February 21 Post Production: Mid February, March, April 21 Delivery: End of April 21 Flames S3: Pre Production: 1st December 20 to 15th January 21 Shoot: 16th January to 10th February 21 Post Production: Mid February, March, April 21 Delivery: End of April 21 Happy to discuss them in detail over a call with the creative/production team at our end. Also please confirm if Wednesday first half works for the discussion on the balance 3 shows. Warm Regards Vijay Koshy President The Viral Fever (ix) Vide e-mail dated 22nd July, 2020, the respondent again reminded the petitioner that the following two points were still awaiting a response from the petitioner: 1. Mx and TVF Agreement (URGENT) 2. Show timelines fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y i.e. 24th September, 2020, requested the petitioner to discuss the matter at 4 PM. (xv) On 5th October, 2020, the following e-mail was addressed by the petitioner to the respondent: Hi Vijay, Trust this mail finds you well. Wanted to circle back on our conversation from last week. I would like to reiterate our intent to work around the situation and move ahead with this deal with a revised structure of a 1 + 1 + 1 approach wherein we greenlight the 2nd show post the launch of the previous based on the output delivered. Re-emphasising on our intent here our preferred show to begin this equation with is UPSC but taking your perspective into consideration, we would go ahead with either Flames or Immature. As discussed, the commercials need to be revisited and addressed as it is not in sync with our deal structures and subsequent costs (internal + market benchmarks). Below are the 3 approaches we can look at Option 1 Keep the commercials the same and increase the episode count to minimum 8 eps of 25-30 mins Option 2 Keep the ep count and the durations the same reduce the license fee by 1 cr for the show (which we select between flames immature) Option 3 We amicably part ways on this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Distributor to the Company in accordance with this Agreement. 1.3 The Annexure 1 of the Principal Agreement shall stand revised and replaced with the Annexure 1 attached herein under this First Amendment.. 1.4 Clause 8.1 under the Principal Agreement shall stand revised and replaced as follows: 8.1 In consideration of the Rights granted by the Company to the Distributor under this Agreement, in respect of the Program(s) and subject to compliance of the terms of the Agreement by the Company, the Distributor shall pay to the Company, the aggregate Consideration of the USD equivalent to an amount of INR 12,00,00,000/- (Indian National Rupees Twelve Crores Only) in accordance with Clause 8.1.1 below, 8.1.1 The Company shall be entitled to receive the Consideration from the Distributor against valid invoices raised on the Distributor in the following manner: i. 30% of the Consideration i.e. INR 3, 60, 00, 000/- (Indian National Rupees Three Crores Sixty Lakhs only) equivalent to an amount in USD, within 45 (forty-five) days from the Execution Date for all the Programs, subject to receipt of valid invoice; and ii. 70% of the Consideration i.e. INR 8, 40, 00, 000/- (Indian National ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18th March, 2020. (xx) Vide e-mail, dated 2nd November, 2020, the petitioner acknowledged the receipt of confirmation, from the respondent, regarding adjustment of US $ 1,10,000. This fact was also reflected in the following e-mail, dated 3rd November, 2020, from the respondent to the petitioner: Hi Animesh, This is to confirm that TVF bank account was been credit by Rs 7733000 equivalent to $ 110000 as on 17th Jan, 2020 which will be adjusted against on account of new contract deal with Mx player. Plz feel free to ask for any further clarification. Regards, Nikita Trivedi (xxi) On 6th November, 2020, the petitioner addressed the following e-mail to the respondent: Hi Manish and Megha, As we are currently in talks with the business team for updating certain terms in the new agreement, it will be convenient to execute both the main LFA as well as the related amendment draft together given the restriction in coordination we face during these times. I am attaching the revised amendment draft for deal 1 which captures our recent discussions on the agreed stance. Please let me know your thoughts on the draft. Regards MX Player Animesh Sukhatankar Content Acquisition - MX Player (xxii) O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Rupees One Crore Fifty Two Lakhs Eighty Four Thousand Five Hundred only) equivalent to USD 200,000/- (United States Dollars Two Hundred Thousand only) has already been paid by Company as an advance amount towards all the Programs upon execution of the Principal Agreement, receipt and sufficiency of which is hereby acknowledged and confirmed by the Company. ii. Balance amount of INR 10,47,15,500/- (Indian National Rupees Ten Crores Forty-Seven Lakhs Fifteen Thousand Five Hundred Only) equivalent to an amount in USD shall be payable in the following manner: a. INR 3,49,05,167/- (Indian National Rupees Three Crores Forty-Nine Lakhs Five Thousand One Hundred and Sixty Seven only) per Program within 45 (forty five) days upon successful delivery of the Delivery Materials relating to the respective Program, subject to quality checks and acceptance of the same by the Distributor. 1.5 Parties expressly agree that the Distributor, at its sole discretion, shall have the right to green-light the production in any sequence of Program 2 and/ or Program 3. 1.6 The Company shall deliver the Programs to the Distributor as per the timelines mutually agreed between the Parties and in accordance wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as formal proposals. We would have been happy to close the first proposal that was shared with you 2 months back. You would also appreciate that MX has been extremely patient with TVF this year owing to the major organizational restructuring. While the shows were locked in Jan/Feb this year and the contract was finalized by March we received no updates on the progress on any shows till date in terms of readiness, completion of writing, shooting dates etc. Having said that, We at MX reiterate our intent to work with TVF on the shows part of our agreement i.e UPSC, Flames 3 Immature 2. It is great to hear that you are open to a revised business discussion- we can close the same tomorrow over a call- let me know if tomorrow 2.30 pm works. Look forward to receiving your thoughts on the addendum shared. Aaron (xxvi) The petition also annexes follow-up e-mails, between the petitioner and the respondent, from 16th December, 2020 till 22nd December, 2020, attempting to fix schedules for mutual meetings, to iron out the possible differences. (xxvii) On 26th December, 2020, the respondent addressed the following e-mail to the petitioner, pointing out that, as there was no visibility on time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was taken, by the petitioner, to the respondent demurring, for the first time on 23rd December, 2020, from the commitment to deliver the UPSC show. In these circumstances, it was asserted that, if the respondent would contract with any third party for these shows, it would breach the Agreement dated 18th March, 2020, after having received advance consideration. The petitioner, therefore, called upon the respondent to deliver, forthwith, the Immature Season 2 , Flames Season 3 and UPSC programs, in default whereof the petitioner threatened legal action. (xxix)The respondent replied on 6th February, 2021, categorically denying the existence of any concluded contract with the petitioner. It was pointed out that the terms of the agreement between the petitioner and respondent were still being negotiated. Without sending back the signed Agreement forwarded by the respondent on 18th March, 2020, it was pointed out that the petitioner was suggesting changes till December 2020. In the absence of any concluded contract, the respondent denied any obligation to the petitioner. Insofar as the payment of US $ 2,00,000 was concerned, the respondent pointed out that there was no covenant, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 9 of the Arbitration Conciliation Act, 1996 ( the 1996 Act ). The prayer clause in the petition reads as under: In view of the above stated fact/circumstances and submissions, it is most respectfully prayed that this Hon ble Court be pleased to: A. Pass an order of injunction restraining the Respondent from selling, licensing, exploiting or assigning the rights in relation to the Programs titled Immature Season 2 , Aspirants Season 1 (title subsequently changed to UPSC ), Flames Season 3 created, developed and/or produced by the Respondent, to any other market player and/or digital platform in terms of Clause 4.1, and Clause 5.1 of the Agreement; AND B. Pass an order of injunction restraining the Respondent from creating any third-party interest in and to the Programs titled Immature Season 2 , Aspirants Season 1 (title subsequently changed to UPSC ), Flames Season 3 created, developed and/or produced by the Respondent, in favour of any third party; AND C. Pass an order of injunction, restraining the Respondent from, in any manner, breaching/violating the exclusivity obligations under the Agreement; AND D. Pass an order directing the Respondent to deposit either in this Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2020 [Refer para 4(xx) (supra)] the respondent agreed for adjustment, against the amount due to it from the petitioner, of the advance amount of US $ 1,10,000 payable by the respondent to the petitioner. (iv) As such, advance consideration of US $ 3,10,000 stood paid by the petitioner to the respondent. The respondent was not seeking to contend that the said payment was against monies due from the petitioner to the respondent under any transaction not relatable to the Agreement dated 18th March, 2020. (ii) The petitioner was ready and willing to perform its part of the Agreement. In this context, Mr. Amit Sibal submitted, on instructions, that his client was willing to deposit, with the court, the balance consideration payable under the Agreement dated 18th March, 2020. (iii) E-mails dated 17th July, 2020 [Refer para 4(viii) (supra)] and 22nd July, 2020 [Refer para 4(ix) (supra)] from the respondent to the petitioner, acknowledged the fact that the UPSC Immature and Flames shows were logged with MX this year . By using the words logged , the respondent had acknowledged the fact that a concluded commercial Agreement, for broadcasting of these three shows on the petitioner s Platform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a clear case for grant of interim protection, under Section 9 of the 1996 Act exits. He submits that, as the petitioner has always been ready and willing to perform its part of the contract and had, in fact, paid US $ 3,10,000 to the respondent, it was entitled to specific performance of the Agreement with the respondent. It is further submitted, in this regard, that the content of the programs, to be aired on the petitioner s platform in 2020-2021, is not substitutable and that, therefore, if the right to air such programs were to be granted by the respondent to a third party, it would result in irreparable loss to the petitioner, which could not be compensated by way of costs or damages. The petitioner has also sought to point out that the respondent is admittedly in financial difficulties. 8. To a submission, from the respondent, that no specific performance, of the Agreement between the petitioner and the respondent, could be directed, as the Agreement was determinable in nature [in view of Section 14(d) of the Specific Relief Act, 1963 [1] ], Mr. Sibal submitted that, in the first place, this argument was not available to the respondent, as its case was that there was no concl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich purpose he cites the judgment of a Single Bench of this Court in Enter Tech Entertainment Pvt. Ltd. v. Blueair India Pvt. Ltd. [2016 SCC OnLine Del 5507] (iii) The correspondences exchanged between the petitioner and the respondent clearly indicates that the petitioner has, contrary to its own assertions, never been ready or willing to perform the contract. Readiness and willingness submits Mr. Mehta, have to be reflected from the acts of the party and the onus in that regard rests on the party seeking specific performance of the contract. The petitioner, he submits, has miserably failed to discharge this onus. Reliance has been placed, in this context, by Mr. Mehta, on the judgment of a Division Bench of this Court in Inter Ads Exhibition Pvt. Ltd. v. Busworld International Cooperative Vennootschap Met Beparkte Anasprakelijkheid [AIR 2020 Delhi 107] , as well as the judgment of the learned Single Judge of this Court, which stands affirmed thereby [2020 SCC OnLine Del 351] (iv) In these circumstances, the respondent had availed one of the three options proposed by the petitioner in its e-mail dated 5th October, 2020, by opting to exit the contract and refund the amounts paid by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. A cohesive and conjoint reading of the e-mails exchanged between the petitioner and the respondent clearly indicate that the petitioner was unwilling to abide by the covenants contained in the Agreement dated 18th March, 2020, as signed by the respondent and forwarded to the petitioner. The respondent repeatedly requested the petitioner by e-mails dated 2nd June, 2020, 8th July, 2020, 17th July, 2020 and 22nd July, 2020, inter alia, to send back the Agreement, duly signed. The petitioner did not do so. 16. The petitioner, instead, required the respondent vide e-mail dated 15th July, 2020, to communicate the schedule of the programs to be aired on the petitioner s website. The respondent communicated the said schedule vide reply e-mail 17th July, 2020. Even thereafter, the petitioner did not forward the signed Agreement to the respondent. 17. Rather, starting 24th August, 2020, the petitioner started to propose changes in the the overall construct of the arrangement . 18. On 11th September, 2020, the petitioner stated that it wanted to air the program as a 1+1+1 show . At this point, I may note that an attempt was made by Mr. Amit Sibal, on behalf of the petitioner, to state tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acquiescence, by the respondent, to any of the said Amendments. 20. By no stretch of imagination can it be said, therefore, that there was consensus ad idem between the parties, at any stage of the proceedings, starting 18th March, 2020, regarding the covenants of the Agreement executed. That being so, in the absence of any contract duly signed by both parties, no concluded contract enforceable in law could be said to have come into being. 21. The submission of Mr. Amit Sibal, that the law does not require a contract, to be enforceable, to be signed by both parties, has no application in the facts of the present case. The issue is not one of want of signatures of both parties, but want of consensus regarding the Agreement. As a general proposition of law, it cannot be gainsaid that the a contract, even if not signed by both parties, may be enforceable, provided consensus ad idem, regarding the terms of the contract, exists, and the parties have acted in accordance with the contract, thereby evincing the intent to be bound by the covenants thereof. Neither of these requirements is, unfortunately for the petitioner, met in the present case. Clearly, there is no consensus ad idem betw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vatars. No concluded contract can, therefore, be said to have come into being between the petitioner and the respondent. 25. This, apparently, was also the understanding of the petitioner, as reflected by its e-mail dated 5th October, 20205 addressed to the respondent. Mr. Sibal sought to object to Mr. Mehta reading the said e-mail dated 5th October, 20205 in isolation and submitted that if the said e-mail were to be read in conjunction with the e-mails which preceded and succeeded it, it would become apparent that the three options proposed by the petitioner in the said e-mail dated 5th October, 20205 , were no longer available to the respondent, by the time the respondent chose to exercise the third option, vide its e-mail dated 5th October, 2020 [Refer para 4(xv) (supra)] I cannot, prima facie, accept this submission. Rather, it appears to me that if the e-mail dated 5th October, 20205 was to be read in conjunction with the e-mails which preceded it, the position that emerges is that, having proposed various changes to the original Agreement dated 18th March, 2020 (as forwarded by the respondent to the petitioner), and having found that the respondent was not amenable to agree t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment was prepared by UPRNL and sent, without signature, to Indure, but Indure did not sign it. Rather, Indure sent back a counterproposal, on 27th June, 1984, incorporating certain changes suggested by it. The tenders were submitted to the UPSEB and, later, withdrawn by the UPRNL before they were finalized. Indure, thereupon, approached the UPSEB undertaking to perform the entire contract by itself. Side by side, Indure also issued a notice, to UPRNL, invoking arbitration under Clause (14) of the draft agreement. Indure contended that it had accepted the draft agreement on 27th June, 1984, while UPRNL disputed the existence of any concluded contract with Indure. 28. UPRNL approached the High Court under Section 33 of the 1996 Act. The High Court held that a concluded contract had emerged, between UPRNL and Indure, on the ground that (i) UPRNL had sent the drafted contract to Indure, (ii) Indure had signed the contract and sent it back with modifications to UPRNL, (iii) at no time did UPRNL reject the modifications, and (iv) UPRNL, rather, acted on the basis of the contract thus returned by Indure by submitting the tender. As such, the High Court held that UPRNL could not deny the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat he had not accepted a part of the original agreement though it had signed the agreement containing that part. 19. In view of the fact that Section 2(a) of the Act envisages a written agreement for arbitration and that written agreement to submit the existing or future differences to arbitration is a precondition and further in view of the fact that the original contract itself was not a concluded contract, there existed no arbitration agreement for reference to the arbitrators. The High Court, therefore, committed a gross error of law in concluding that an agreement had emerged between the parties, from the correspondence and from submission of the tenders to the Board. Accordingly it is declared that there existed no arbitration agreement and that the reference to the arbitration, therefore, is clearly illegal. Consequently arbitrators cannot proceed further to arbiter the dispute, if any. The conclusion of the High Court is set aside. (Emphasis supplied) 30. Consensus ad idem, the foremost, and most indispensable, prerequisite for any concluded contract, is totally absent in the present case. No contract, which the Court could, in exercise of its jurisdiction under Section 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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