S. B. Sinha
Several questions of importance both on procedural as also substantive law arise for consideration in this petition which for all intent and purport is in continuation of another petition between the same parties being the petition No. 200(C) of 2008.
The petitioner herein who is a multi service operator filed the said petition for recovery for a sum of Rs. 44,72,816 against the respondent purported to be towards non-payment of the subscription fees for the period October, 2007 and September 2008.
The present petition has been filed by the petitioner for recovery of a sum of Rs. 53,62,690 towards the subscription amount for the period October 2008 and October, 2009.
As the fact of the matter as also various contentions raised by the parties herein have elaborately being dealt with in the aforementioned Petition No. 200 (C) of 2008, we are recording herein only those facts which are necessary for disposing of the present petition.
A business affiliate agreement was entered into by and between the parties on or about 1.10.2007. The said agreement was for a period of one year that is for 1.10.2007 to 30.09.2008. It is now not in dispute that the respondent was running a network both at Dwarka as also Paschim Delhi. The Paschim Delhi network was being looked after by respondent’s witness No. 2 Mr. Nitya Sharma whereas the Dwarka network was being looked after by his elder borther Mr. Aditya Sharma.
The business in question is said to be a family business of which Mrs. Shashi Sharma, wife of Mr. Ashok Sharma was shown as the proprietress.
Indisputably and as it stands admitted now, the said network was sold to the petitioner herein by reason of a ‘Business Transfer Agreement’ (marked as Exhibit ‘F’) on or about 28.9.2007. It furthermore stands established that a ‘Business Associate Agreement’ was to be entered into in respect of its Dwarka network with Mr. Aditya Sharma for which a draft was sent on 11.09.2007. Eventually a business associate agreement was executed by and between Mr. Aditya Sharma and the petitioner on 28.09.2007 in tune with the draft business associate agreement sent to him at 11.9.2007 through an e mail.
Another affiliation agreement was entered into by and between the parties, which is marked as Exhibit PW-1/4 in terms whereof the respondent was to act as a local cable operator upon obtaining feed from the petitioner for an agreed consideration of Rs. 4,25,000/- on a subscriber base of 1513 @ Rs. 250/- per subscriber per month plus admissible taxes.
The respondent, however, alleges that even in respect of the Paschim Delhi network a ‘Business Associate Agreement’ was to be entered into but in its place a ‘Business Affiliate Agreement’ was got executed by Ms. Shashi Sharma fraudulently by the officers of the petitioner. It was taken to the residential premises of the respondent Mrs. Shashi Sharma on the aforementioned date and as her husband Shri Ashok Sharma was out of station, she contacted him on phone and on being asked to go ahead with the execution of the said agreement, she signed the same.
She also handed over three cheques which according to the respondent were blank ones by way of security. Two of the said cheques for a sum of Rs. 42,500 bounced, when presented to bank. The respondent had been issued with the invoices and had been making part payments intermittently. Till September 2008, she had made part payments totaling a sum of Rs. 6,77,208.
According to the petitioner before the aforementioned Petition No. 200 (C) of 2008 was filed, a demand notice was issued on or about 29.05.2008 asking the respondent to pay a sum of Rs. 29,22,808 whereto neither any response nor any protest was made by the respondents.
The respondent appeared in the said Petition on 18.09.2008. It, however sent a letter on or about 3.10.2008 enclosing therewith three other letters being dated 14.12.2007, 5.2.2008 and 3.7.2008 which according to the petitioner were forged and had in fact was never sent to it; although the receipt of the letter dated 3.10.2008 is not in dispute.
As indicated heretobefore despite raising of invoices on regular basis to which the respondent did not protest, full payments thereof were not made. It furthermore appears that an affiliation agreement was executed by Mr. Aditya Sharma in respect of Dwarka network on or about 3.5.2009.
According to the petitioner despite the fact that the petition had been pending, a request had been made for issuance of 20 Set Top Boxes on or about 6.4.2009 which was supplied on 7.4.2009. Similarly, supply of 20 more Set Top Boxes were sought and received by the respondent on 21.04.2009.
Yet again, request was made for 20 more Set Top Boxes on 27.05.2009 which were supplied to and received by the respondent on or about 1.6.2009.
The petitioner has served a notice upon the respondent demanding a sum of Rs. 81,66,666/- till 10th June, 2009 which was admittedly received by the respondent. The petitioner furthermore contends that within the aforementioned period, the respondent had sent customer activation forms to the petitioner which has been produced in these proceedings.
Mrs. Shashi Sharma the proprietress of the respondent examined in Petition No. 200 (C), in her statement asserted that it had migrated to Digi Cable in November, 2009. The said deposition was made in December, 2009.
The present petition was filed in February, 2010. In the aforementioned Petition No. 200 (C) of 2008, Shri Ashok Sharma who according to both PW-1 Mrs. Shashi Sharma and PW-2 Mr. Nitya Sharma had been looking after the affairs of the respondent did not examine himself.
An application was filed for his examination in the said petition at a much later stage, but the same was declined. In this petition, however, the respondent apart from examining Mrs. Shashi Sharma and Mr. Nitya Sharma has examined Mr. Ashok Sharma.
The petitioner in support of its case has examined Mr. Manish Nathani a senior technician of the petitioner company, Mr. Shivraj the General Manager of the petitioner, and one Shri Rajiv Kumar.
We may notice that this Tribunal framed the following issues in terms of an order dated 16th March, 2010:-
“1. Whether the respondent availed signals from the petitioner after September 2008?
2. Whether the petitioner supplied Set Top Boxes to the respondent after September 2008?
3. If the above are held to be in the affirmative, what is the amount payable by the respondent to the petitioner for supply of signals and till when?
4. What would be effect of non service of notice by the respondent in terms of the Regulations 4.2 and 4.3 of the Interconnect Regulations before the migration, if any?
5. Whether the respondent is a defaulter?
6. What relief, if any, the petitioner is entitled to?”
We may, however, place on record that a large number of witnesses were summoned by the petitioner including one Mr. Jeet Kumar and Shri Sanjay at the respondent’s address but despite service of summons they did not appear. They were summoned inter alia to prove that they had received the Set Top Boxes.
The respondent’s case however, shortly stated is that although no agreement was entered into by and between the parties on or about 1.10.2007 as the petitioner played fraud upon Mrs. Shashi Sharma in getting the said purported agreement executed by her on the false representation that the same was a ‘Business Associate Agreement’, but assuming that the same had been done, the period thereof having expired, the relationship between the parties also came to an end.
According to the respondent, after September, 2008 it had not been taking supply of any signal from the petitioner and in fact had been supplying the signals of only free to air channels. Only in November 2009 it had entered into an agreement with Digi Cable, a multi service operator and retransmitting the signals of pay channels.
Mr. Arun Kathpalia the learned counsel appearing on behalf of the petitioner, would urge:-
1) Despite expiry of the agreement, the respondent having been receiving signals continuously, it was bound by the terms and conditions laid down in the affiliation agreement dated 1st October, 2007.
2) Having regard to the fact that the petitioner had been sending invoices, receipt whereof was not denied or disputed and the respondent, having not been asserting at any point of time that the petitioner was neither supplying signals nor issuing the aforementioned invoices, is bound to make payments of the invoiced amounts.
3) The respondent having admitted that it has migrated to Digi Cable only in November, 2009, it is wholly inconceivable that in a place like Paschim Vihar where there is strict competition amongst the LCOs, it could survive only on free to air channel i.e. without supplying a pay channel as alleged by it.
4) The respondent itself having been asking for Set Top Boxes and 60 Set Top Boxes having been supplied and furthermore the customer affiliation forms having been supplied by the respondent to the petitioner, its contention that no signal was supplied to its network must be rejected.
5) The petitioner having been sending notices demanding the amount due from the respondent from time to time and no protest thereagainst having been made, it must be held to be bound by its conduct and thus liable to make payments.
6) The respondent although appeared in the Petition No. 200 (c) of 2008 on 18.09.2008 it even on 3.10.2008 issued a letter to the petitioner enclosing therewith a cheque dated 4.10.2008 as also three letters, which were forged and fabricated, and no contention having been raised even therein that no signal was being supplied, the respondent’s case must be held to be wholly unbelievable.
7) The evidence adduced by the respondents and in particular that of Mr. Ashok Sharma must be held to be wholly unreliable in view of the documentary evidences brought on record by the parties hereto.
8) Mrs. Shashi Sharma being not a ‘Pardanasheen’ lady and she having alleged misrepresentation and her son Nitya Sharma having alleged putting blank signatures on certain blank forms even during pendency of the earlier proceedings were bound to prove the same and they having failed to discharge the onus of proof, the petitioner’s petition should be allowed.
9) The respondent having not pleaded the particulars of fraud as is required under Order VI Rule 4 of the Code of Civil Procedure, no evidence purported to have been adduced on the said issue, must be held to be wholly inadmissible.
10) The respondent having withheld evidence in its possession, an adverse inference must be drawn against them.
11) In any event the respondent having not issued any notice as is required under Clauses 4.2 and 4.3 of the Telecommunication (Broadcasting and Cable Service) Interconnection Regulation 2004 (The Regulations), as amended from time to time, the contract between the parties must be held to be continuing, as a consequence whereof, the respondent is bound to pay damages to the petitioner.
Mr. Naveen Chawla, the learned counsel appearing on behalf of the respondent, on the other hand, urged :-
a) The purported agreement dated 1.10.2007, assuming the same to the genuine, being the subject matter of the Petition No. 200 (C) of 2008, having come to an end, the respondent cannot be held to be bound thereby particularly having regard to the fact that it had repudiated the same while filing reply in the earlier petition.
b) If from October 2008, the petitioner despite repudiation of the agreement had supplied any signal, they must be held to have done so at their own peril.
c) The petitioner being supplier of signals was bound to take such steps which would mitigate the damages purported to have been suffered by it i.e. by switching off the signal keeping in view the fact that the repudiation of the agreement took place:
i. On the date when the repudiation of the contract takes place.
ii. If the petitioner had accepted the repudiation but treated to be breached, on the date when the breach occurred.
d) The parties having not negotiated for entering into any fresh agreement, the same was not saved in terms of the proviso appended to Clause 8.1 of the Regulations and in any event for the said purpose the provisions of Section 70 of the Indian Contract Act cannot be made applicable and/or as the respondent has not accepted the agreement, it is not bound thereby.
e) The petitioner could not have forced upon the respondent an agreement on it contending that although the agreement is non-existent, by supplying signal unilateraly the provisions of Section 70 of the Indian Contract Act would be attracted.
f) In the event the purported agreement dated 1.10.2007 is held to be valid, the respondent is bound to pay the charges only during subsistence of the agreement and not by the terms imposed upon it by the petitioner.
g) Each one of the factors on which the petitioner had relied upon namely :
1. Supply of the STBs,
2. Consumer application forms,
3. Invoices and
4. The oral evidence adduced;
must be held to have not been proved, keeping in view the materials brought on record.
h) Admittedly, the petitioner was to pay rent to the respondent for occupying its premises for installation of its head end, and the respondent having not accepted the payment of Rs. 6,000.00 per month by not encashing the cheque, the relationship between the parties must be held to have come to an end.
i) Various documents having been brought on records only with a view to confront RW-3 Mr. Ashok Sharma which although were in possession and power of the petitioner; cannot be relied upon and in any event the petitioner having failed to bring on record the best evidence in its possession including the original register, the books of accounts etc. an adverse inference must be drawn against it.
This Tribunal although has framed a large number of issues, having regard to the fact that some of the issues have been dealt with by us in the aforementioned Petition No. 200 (C) of 2008, the core issues which arise for consideration are :-
1. Whether there was a continuous supply of signals after September 2008; and
2. If that be so, what is the amount payable by the respondent to the petitioner.
Factual issues apart, several legal questions of seminal importance arise for consideration herein.
We have noticed hereto before that the core contention between the parties revolve around the legality and/or validity of the affiliation agreement dated 1.10.2007.
In our judgment passed in Petition No. 200 (C) of 2008 we have held the said agreement to be a valid one. The contention of the respondent that a misrepresentation was made with regard to the nature of the document in so far as a ‘Business Affiliation Agreement’ was got executed by the petitioner from a lady who is not very conversant with the business affairs and thus the same is void, has been rejected.
In our judgment passed in the aforementioned petition, we have drawn adverse inference against the respondent for not examining Shri Ashok Sharma who both according to Mrs. Shashi Sharma and their son Mr. Nitya Sharma had been looking after the affairs of the respondent concern.
Whereas according to Mr. Nitya Sharma, he had a limited role/function to play in the matter of running of the business of the respondent’s network, the story as set up now is otherwise, namely that he used to run the affairs of the Paschim Vihar network whereas Aditya Sharma used to run Dwarka network.
Mr. Ashok Sharma, as we can perceive it, has been examined in this case only to fill up the lacunae by the respondent.
It is also well settled that a party to a lis should not be permitted to fill up the lacunae in evidence. Order 18 Rule 17 of the Code of Civil Procedure, however car ves out one of the exceptions to the said rule. When a party finds out a lacunae in his evidence from the cross examination of its witnesses, in our opinion, it cannot be permitted to fill up the same in a subsequent proceedings. In a case of this nature where the same issues are involved, the respondent by examining Shri Ashok Sharma could not have also been permitted to fill up the lacunae.
In Vadiraj Naggappa Vernekal Vs. Sharadchandra Prabhakar Gogate reported in 2009 (4) SCC page 410, the Supreme Court of India held :-
“29. It is now well settled that the power to recall any witness under Order 18 Rule 17 CPC can be exercised by the court either on its own motion or on an application filed by any of the parties to the suit, but as indicated hereinabove, such power is to be invoked not to fill up the lacunae in the evidence of the witness which has already been recorded but to clear any ambiguity that may have arisen during the course of his examination.”
Shri Ashok Sharma has deposed in this matter in great details. He has also been cross-examined in regard to the genuineness or otherwise of the said agreement dated 1st October, 2007.
One of the legal issues is as to whether the findings arrived at in Petition No. 200 (C) would operate as ‘Res-judicata’.
Unfortunately, this Tribunal was given to understand that only the period of claim would be different in the two petitions. There was no application for consolidation of both the petitions. Neither of the parties has filed any application for stay of this petition, although the principal issues arising in both the petition are substantially the same.
Till the hearing of this matter was concluded, the judgment in petition No. 200 (C) had not been pronounced.
The question, therefore, would arise as what would be the effect of the judgment which we have delivered. The judgment pronounced in petition No. 200 (C) of 2008, in our opinion, shall operate as ‘Res-Judicata’. We hold so in view of the fact that even the principle of ‘Res-Judicata’ is not only a wholesome principle involving public policy but also on the premise that it is applicable even in different stages of the same proceedings.
We however assuming that the principles of ‘Res-Judicata would not be applicable, may also consider the evidence of Shri Ashok Sharma.
The question is as to whether he is a reliable witness? For the reasons stated hereinafter, we are of the opinion that he is not.
He, if his son and wife are to be believed were looking after the business. It is, therefore, expected that he would be having complete control thereover as also the knowledge about all the transactions.
Indisputably, the respondent is a multi service operator having been working in the field of Cable Business since 1992. According to him as would appear from paragraph 5 of his affidavit, a ‘Business Transfer Agreement’ had to be entered into, as he had been suffering from mental as also financial crisis.
We may notice the same :-
“I state that Mr. Sunil Punj, the Vice –President (Operations) of the Petitioner Company which was a fledgling organization approached me on behalf of the Respondent with a lucrative offer of ‘Business Associate’ at the juncture when my wife and I were facing mental and financial crisis and offered to provide all kind of support to run the business smoothly in the area.”
In his cross-examination, however, he in categorical terms stated that he neither had any financial crisis nor any mental crisis. He, moreover, as would appear from the discussions made hereinafter prevaricated his stand from stage to stage.
It was contended:
(1) He had entered into a ‘Business Transfer Agreement’ having been told by Mr. Sunil Punj, the Vice-President (Operations) of the petitioner company providing all kinds of support to run the business smoothly in the year.
(2) He, having regard to the fact that he intended to get ‘entangled’ from the affairs as his daughter was to get married agreed thereto; the principal term of the agreement being that the petitioner would take over the network.
(3) However, the respondent would keep running the same with the signals provided by the petitioner while the respondent would take carriage fee from the broadcaster.
(4) A copy of the ‘Business Associate Agreement’ was sent by email to Mr. Aditya Sharma and he himself uploaded the same.
(5) The same commercial terms were to apply both for Paschim Delhi Network and Dwarka network.
(6) Further negotiations ensued in terms whereof the parties were to become partners having 51% and 49% shares but on 1st October, 2007 in stead and in place of a ‘Business Associate Agreement’ a ‘Business Affiliate Agreement’ was got executed by his wife.
The witness was confronted with a large number of documents. It is a well settled principles that even if certain documents are not filed along with the petition or with the reply and/or at the stage of Order 13 Rule 2 of the Code of Civil Procedure, the witness examined on behalf of the other party can be confronted with a document in respect whereof he has knowledge. This has been so held in T. M. Mohana Vs. V. Kannan AIR 1984 Mad 14 page in following terms :-
“10. The scope and effect of Order 7, Rules 14 and 18 (1) and (2) C. P. C. came to be considered in Lakhpat Pathak v. Chiran Pathak, AIR 1937 All 55, wherein it has been held that the penalty for the non-production of a document under Order 7, Rule 14 is provided for in O. 7, Rule 18 (1) C. P. C. and that Order 7, Rule 18 (2) C. P. C. is an exception to order 7, Rule 18 (1), C. P. C. and further that it is open to a plaintiff to tender in evidence the previous statement in writing by the defendant in the cross-examination of the defendant for the purpose of contradicting him, even though such a document was not produced by the plaintiff under Order 7, Rule 14 C. P. C. No doubt, this decision has been rendered with reference to a converse case wherein the document had been produced by the plaintiff in the course of the cross-examination of the defendant. But in view of the provisions of the Civil P. C., referred to earlier, the principle that would be applicable would be the same, irrespective of whether it is the plaintiff or the defendant or their witness who is confronted with the document produced by the other side, especially when the scope and ambit of the exception carved out under Order 7, Rule 18 (1), Order 8, Rule 1 (6), Order 8, Rule 8-A (3) and Order 13 Rule 2 (2) (a) P. C. are the same. In Ranaiit Kanungo v. Ibcon Pvt. Ltd., , the defendant was confronted with certain documents during the course of the cross-examination for the purpose of testing the veracity of the witness and the trial court took the view that as the documents had not been produced at the stage of production of the documents, it cannot be permitted. However, the High Court held that in view of O. 13, R. 2 (2) (a) C. P. C. such a document intended to be used in the cross-examination of the witness is not required to be shown or produced at the stage of production of documents. From the above decisions also, it is clear that where the document relied upon is intended to be put to a witness in the course of his cross-examination, it is not necessary that such a document should be disclosed earlier or that leave of court should be obtained for so producing the documents to the witnesses in the course of cross-examination, Having regard to these considerations, the court below was in error when it declined to permit the petitioner to confront the respondent with the documents produced by the petitioner in the course of the cross-examination of the, respondent without an application to receive the document after notice to the respondent.”
We may notice some of these documents:
(a) A cheque for a sum of Rs. 4,25,000 (marked as exhibit G1) which, apart from the name of the petitioner, was filled up by Shri Sharma, although according to him, the entire cheque was blank.
(b) He admitted issuance of a similar cheque by his wife Mrs. Shashi Sharma which has been marked as Exhibit G.
(c) He was accosted with a business transfer agreement dated 28th September, 2007 which according to him had not been entered into.
(d) He, however, when confronted, acknowledged that he had issued a receipt towards final payment under the ‘Business Transfer Agreement’ on 18.10.2007 which was marked as Exhibit H.
(e) The ‘Business Transfer Agreement’ admittedly was entered into on 28.9.2007 for a consideration of Rs. 17,50,000/- (Exhibit-F).
(f) It also now stands admitted that what was sent to him or sent to Shri Aditya Sharma by way of a draft in his email dated 11.09.2007 which according to him, he himself uploaded. A Business Associate Agreement has been executed by and between Mr. Aditya Sharma and the petitioner on 28.09.2007 (Exhibit-J).
(g) The transactions between the parties did not end there and in fact an affiliation agreement was executed by Mr. Aditya Sharma in respect of his Dwarka Network on or about 3.5.2009 (Exhibit-K).
Surprisingly, Shri Ashok Sharma feigned ignorance of the agreements entered into by his son Aditya Sharma with the petitioner. According to him the respondent concern is a family business in which he and his wife invested and in running the said business he merely assists his son and wife as indicated hereinbefore.
On the other hand, the stand taken by his wife and his son Nitya Sharma had all along been that it is he who had been looking after the business.
He, however, before us has shown some signs of generosity contending that even if he had not been aware of the transactions by and between the petitioner and Shri Aditya Sharma, he would accept the same.
We, apart from the reasons stated in our judgment dated 16th December 2010 passed in petition No. 200 (C) of 2008, are of the opinion that the respondent has worsened his case by examining Shri Ashok Sharma, he; being a totally unreliable witness.
The proprietress of the respondent is not a ‘Pardanasheen’ woman. She although may not be aware of the nitti gritties of the business, had been taking part therein.
It is, therefore, difficult for us to accept as to why she being the proprietress of the respondent concern; Mr. Aditya Sharma will deal independently in relation to the Dwarka network, although according to Mr. Ashok Sharma, the transactions by and between the parties hereto were to be in respect of both the networks.
The onus of proof therefor was on the respondent. It failed to discharge the same.
In K. M. Madhavakrishnan Vs. S. R. Sami and Ors. reported in (1980) 2 MLJ 398, it was held :-
“14. The general rule of law is that a party of full age and understanding is normally bound by his signature to a document whether he reads it or understands it or not. Equity does not save people from the consequences of their own folly but will save them from being victimised by other people. Sir Raymond Evershed, M..R. has observed in Tufton v. Sperni (1952)2TLR 516 at 519, as follows:
Extravagant liberality and immoderate folly do not of themselves provide a passport to equitable relief.
But, if however, a party has been misled in executing a deed or signing a document essentially different from that which he intended to execute or sign, he can plead non est factum in an action against him and the deed or writing is completely void in whomsoever hands it may come. As Byles, J., said in Foster v. Mackinnon (1869)LR4CP704 at 711.
It is invalid not merely, on the ground of fraud, where fraud exists, but on the ground that the mind of the signor did not accompany the signature; in other words, that he never intended to sign, and therefore in contemplation of law never did sign, the contract to which his name is appended.
The doctrine of non est factum does not apply unless there is a misrepresentation inducing a mistaken belief as to the class or character of the supposed document and not a misrepresentation simply as to its contents. On the other hand, a mistake as to the contents of a deed or document is not sufficient.
For attracting the said doctrine, negligence or carelessness is no defense. It must be
established that the impugned documents have not been executed with a free mind.
In Him Mohini Communications Pvt. Ltd. through Shri Harvinder Singh Lord Vs. Star India Pvt. Ltd., reported in (2006) 5 COMP L J 379 (TDSAT) 2005 TDSAT page 275, it has been held :-
“5. Though the learned Counsel for the Petitioner has contended that the Petitioner has only signed a blank agreement form, in the absence of any satisfactory material in this regard, we are not prepared to accept this argument. On the contrary, the learned Counsel for the Respondent has produced the copy of the agreement which contains all the necessary terms. He has also produced a document to show that the relevant portion of the said agreement has been registered with the Authority as far back as in the month of April, 2005. Therefore, we will have to proceed on the basis that there is a valid agreement with agreed terms between the parties. As per the said agreement, it is seen that the Petitioner had agreed to pay a subscription for Bouquet-I at Rs.30 per subscriber on a subscriber base of 30,333 for the period from 1st February, 2005 to 31st December, 2005. In our opinion, the Petitioner now cannot resile from this contract. Therefore, the petitioner is liable to pay at the above rate till the end of the contract i.e. 31st December, 2005.
In our judgment passed on 16th December 2008 in Petition No. 200 (c) of 2008 we have held that even Order VI Rule 4 of the Code of Civil Procedure would be attracted, in terms whereof it would be obligatory on the part of a party who alleges fraud to plead the particulars thereof.
We may, in this regard notice the decision of the Supreme Court of India in Afsar Sheikh v. Soleman Bibi reported in (1976) 2 SCC 142 wherein it was stated as thus:-
“15. While it is true that “undue influence”, “fraud”, “misrepresentation” are cognate vices and may, in part, overlap in some cases, they are in law distinct categories, and are, in view of Order 6 Rule 4, read with Order 6 Rule 2 of the Code of Civil Procedure, required to be separately pleaded, with specificity, particularity and precision. A general allegation in the plaint, that the plaintiff was a simple old man of ninety who had reposed great confidence in the defendant, was much too insufficient to amount to an averment of undue influence of which the High Court could take notice, particularly when no issue was claimed and no contention was raised on that point at any stage in the trial court, or, in the first round, even before the first appellate court.”
In United India Insurance Company Ltd. and Anr. Vs. Andrew Vivera reported in AIR 1990 Ker 139 the Kerala High Court has held :-
“6. Order 6, Rule 4, C.P.C. provides that in all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default, or undue influence, and in all other cases in which particulars may be necessary beyond such as are exemplified in the forms aforesaid, particulars (with dates and items if necessary) shall be stated in the pleading. The position admits no doubt that allegation of fraud, undue influence and coercion must be set forth in full particulars and not vaguely, The allegation must be fully stated so that the case be decided on the particulars pleaded. There cannot be any departure from what has been ordained under Order 6, Rule 4. Any allegation in a sweeping manner will hardly suffice for the Court to act. In Bishundeo v. Seogeni Rai, AIR 1951 SC 280, it is held as follows (at p. 283 of AIR) :--
"In cases of fraud, undue influence and coercion the parties pleading it must set forth full particulars and the case can only be decided on the particulars as laid. There can be no departure from them in evidence. General allegations are insufficient even to amount to an averment of fraud of which any Court ought to take notice however strong the language in which they are couched may be, and the same applies to undue influence and coercion.
It is trite law that where allegations are made in a vague and sweeping manner the Court cannot act on it for lack of specific pleadings even if the allegations are worded in a very assertive language. As Order 6, Rule 4 makes it incumbent upon a party to highlight all particulars necessary to substantiate the contentions regarding misrepresentation, fraud, breach of trust, wilful default or undue influence, a party cannot shirk that responsibility and shelve it to be adduced in evidence at a later stage. If the pleadings are vague and not specific no amount of evidence can salvage the position.”
Yet again in K. Kanakarathnam v. A. Perumal and another reported in AIR 1994 Mad 247 a division bench of the Madras High Court, held as under :-
“It is settled law that as per this rule, necessary and material facts should be pleaded in support of the case set up and that in the absence of pleadings, evidence if any produced cannot be considered. The object of the rule is that in order to have a fair trial it is imperative that the party should state the essential material facts so that the other party may not be taken by surprise. No doubt, the learned counsel for the defendant argued that the pleadings should receive liberal construction and that if the parties knew the case and proceeded to trial on a certain issue by producing evidence, it would not be open to the other party to raise a question of absence of pleadings in appeal. But we do not think such a liberal construction is warranted in this case.”
Having said so we may notice the other legal submissions raised at the bar.
Would raising a plea of mis-representation amount to repudiation of the agreement?
Our answer thereto is in the negative. A party to a contract may raise several pleas. It does not mean that even the legal pleas shall be accepted although no factual foundation has been laid down therefor.
There is nothing on record to show that the agreement between the parties stood repudiated. Such an averment was not made even in the earlier petition.
It appears to us that in effect and substance the respondent did not repudiate the contract but only denied/disputed the validity thereof.
There are two aspects of the matter :-
i. That a contract being opposed to public policy and thus hit by Section 23 of the Indian Contract Act would be void being illegal.
ii. It is void being hit by one or the other provisions contained in the Indian Contract Act and in particular Section 19 thereof.
In the event, however, it is found to be valid the same would be enforceable. Once it is found the contract to be enforceable in law, the terms thereof despite being contractual in nature, shall be governed by the statute occupying the field. The Regulations, thus, would prevail over the contractual terms.
We may notice clause 8 of the said regulations :-
“8. Time Period for Renewal of existing agreements
8.1 Parties to an interconnection agreement for supply of TV channel signals shall begin the process of negotiations for renewal of existing agreement at least two months before the due date of expiry of the existing agreement.
Provided that if the negotiations for renewal of the interconnection agreement continue beyond the due date of expiry of the existing agreement then the terms and conditions of the existing agreement shall continue to apply till a new agreement is reached or for the next three months from the date of expiry of the original agreement, whichever is earlier. However, once the parties reach an agreement, the new commercial terms shall become applicable from the date of expiry of the original agreement.
Provided further that if the parties are not able to arrive at a mutually acceptable new agreement, then any party may disconnect the retransmission of TV channel signals at any time after the expiry of the original agreement after giving a three weeks notice in the manner specified in clause 4.3. The commercial terms of the original agreement
shall apply till the date of disconnection of signals.”
We may notice Clauses 4.1, 4.2, 4.3 and clause 8 of the said Regulations :-
“4.1 No broadcaster or multi system operator shall disconnect the TV channel signals to a distributor of TV channels without giving three weeks notice to the distributor clearly giving the reasons for the proposed action.
Provided that a notice would also be required before disconnection of signals to a distributor of TV channels if there was a written agreement, permitting the distribution of the broadcasting service, which has expired due to efflux of time.
Provided further that no notice would be required if there is no written agreement , permitting the distribution of the signals.
4.2 No distributor of TV channels shall disconnect the re-transmission of any TV channel without giving three weeks notice to the broadcaster or multi system operator clearly giving the reasons for the proposed action.
4.3 A broadcaster/ multi system operator/ distributor of TV channels shall inform the consumers about such dispute to enable them to protect their interests.
Accordingly, the notice to disconnect signals shall also be given in two local newspapers out of which at least one notice shall be given in local language in a newspaper which is published in the local language, in case the distributor of TV channels is operating in one district and in two national newspapers in case the distributor of TV channels is providing services in more than one district. The period of three weeks mentioned in sub-clauses 4.1 and 4.2 of this regulation shall start from the date of publication of the notice in the newspapers or the date of service of the notice on the service provider, whichever is later.”
There is neither any doubt nor any dispute that the agreement in question being valid for a period of one year expired on 30th September, 2008. We would however notice that the petitioner had asked the respondent to renew the agreement before it had expired.
Such request was made in respect of both the networks. So far as Dwarka network is concerned another agreement has been entered into in May, 2009.
The respondent however keeping in view did not do so in connection with the Paschim Delhi Network, in view of the pendency of this litigation.
However, we are not sure, as no response thereto had been given by the respondent that a negotiation within the meaning of the provisions of the clause 8.1 took place. It, in our considered view, by necessary implication intended to continue the relationship. It had not made any alternative arrangement. It continued to take supply of signals from the petitioner. It even went for digitalisation by asking to petitioner to supply set top boxes. We for the aforementioned reasons, are of the view that for all intend and purpose, the respondent intended to review the agreement.
We would, however, assume that the agreement between the parties came to an end and clause 8 of the regulation will have no application.
The matter relating to supply of signals for the purpose of retransmission thereof of the channels of broadcasters stand on a different footing.
The statutory scheme in terms of the Act as also the Regulations undoubtedly provide that the same must subserve the public purpose.
The regulator as also this Tribunal are enjoined with a duty to uphold the right of the public in this behalf.
It is in that view of the matter, the regulator had provided different kinds of notices viz:-
1. Notices under clause 4.1 by a broadcaster to the distributor;
2. Notices by distributor to a broadcaster in terms of clause 4.2, and
3. Requirement of public notices to be issued for consumption of public both by the broadcaster as also the distributor of cable services as envisaged under Clause 4.3.
Whereas the notices in terms of Clauses 4.1 and 4.2 are for the benefit of the broadcaster and the distributors respectively, the one under Clause 4.3 is for the benefit of the public.
The public keeping in view the said provisions as also the Explanatory Memorandum attached to the regulations would be entitled to bring an action before a court of law or migrate to another MSO within the aforementioned period.
This statutory remedies provided by reason of Clause 4.3 of the Regulations, in our opinion, having regard to the interest of the consumers, ordinarily, cannot be waived by any of the parties to the contact.
If, thus, in the event a finding of fact can be arrived at that the supply of signal continued which would appear from the conduct of the parties, the respondent would be bound to pay the charges arising out of the same, the signals having not been supplied gratuitously.
The relationship between the parties, therefore, did not come to an end only on mere expiry of the contract but the same would come to an end only the on expiry of 21 days from the date of publication of the public notice in two newspapers in the manner as contemplated thereby.
Strong reliance has been placed by Mr. Chawla on a passage from 27th Edition of Anson’s Law of Contract. We may however notice the relevant passage from its 28th Edition.
“The need for acceptance of a repudiation for the contract to be discharged led to Asquith L.J.’s famous and influential aphorism that ‘an unaccepted repudiation is a thing writ in water’. (Howard v. Pickford Tool Company Ltd. [1951] 1 K.B. 417 at p. 421; See Also: Fercometal S.A.R.L v. Mediterranean Shipping Co. S.A [1989] AC 788 at p. 800, State Trading Corporation of India Ltd. Vs. M. Goldodetz Ltd. [1989] 2 Lloyd’s Rep. Page 277 at p. 285.) But an unaccepted repudiation is not altogether without effect. An innocent party who remains ready and willing to perform can rely on the unaccepted repudiation as a defense in an action bought by the guilty party. (Peter Turnbull and Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd. (1954) 90 CLR 235 at pp. 245, 251; Foran v Wight (1989) 168 CLR 385 at p. 438 (Australia). See Further Carter, Breach of Contract, 2nd Edn. (1991) p. 242 ff.)”
Before considering the effect of the said passage we may also notice the statement of law made in Chitti on Contracts at page 1375, which reads as under :-
“Unless and until the repudiation is accepted the contact continues in existence for “an unaccepted repudiation is a thing writ in water.” Acceptance of a repudiation must be clear and unequivocal and mere inactivity or acquiescence will generally not be regarded as acceptance for this purpose. But there may be circumstances in which a continuing failure to perform will be sufficiently unequivocal to constitute acceptance of repudiation. It all depends on “the particular circumstances of the case.” An example of a failure to perform which has been suggested as sufficient to constitute an acceptance is the following:
“Postulate the case where an employer at the end of a day tells a contractor that he, the employer, is repudiating the contract and that the contractor need not return the next day. The contractor does not return the next day or at all. It seems to me that the contractor's failure to return may, in the absence of any other explanation, convey a decision to treat the contract as at an end.”
The requirement that the acceptance be communicated “clearly and unequivocally” is likely to mean that it is only where there has been a failure to carry out an act in relation to a party in breach that silence or inactivity will be sufficiently unequivocal for this purpose. Where the silence or inactivity relates to the performance of a contract to which the party in breach is not privy then it is unlikely that silence will be sufficiently unequivocal”
We may also refer to Avatar Singh’s “Law of Contract and Specific Relief”, at page 380, which reads as under:
“Repudiation is a drastic conclusion which should only be held to arise in clear cases of refusal, in a manner going to the root of the contract to perform contractual obligations”
The learned author further says at page 381 that:
“In a subsequent case, the Court of Appeal points out “that to constitute repudiation, a breach of contract must go to the root of the contract… This constitutes the test even when there are recurring breaches- producing different results according to the degree of non-compliance…. Notice that a breach is likely to occur or recur cannot, of course be treated as being a repudiation unless it would have that effect when it did occur or recur. (Decrowall International S.A v. Practitioners in Marketing Ltd, (1971) 2 All ER 216 CA)”
We have held heretobefore that by disputing the validity of the contract, the same would not amount to its repudiation.
The question, thus, before Tribunal would be as to what happens to a third party namely to a consumer?
But we think that the law is that a written agreement found to be valid may continue to operate in all force till it comes to an end in accordance with law in a situation of this nature.
Is it possible for a person to deny its liability despite the fact that it received the benefit from a party with whom it had entered into a contract and then contend that by way of mitigation of damages it could have and in infact ought to have terminated the contract itself?
Could, in that situation a person like the respondent having regard to the provisions contained in the Regulations have said that the law has been violated?
The answer to the said questions must be rendered in the negative.
We are firmly of the opinion that even in a case where the nature of the contract having been denied and ultimately found to be incorrect by a court of law, a party to the contract after the expiry of the contract governed under the Regulations may not be permitted to raise a plea that it is not bound to pay any amount whatsoever by way of quasi contract as contained in Section 70 of the Contract Act. It is the other way round. If the respondent intended to terminate the contract by refusing to take supply of signal, it had a remedy, namely issuance of a public notice as envisaged under clause 4.3 of the Regulations and stopping taking any benefit from other party to the contract. It, having taken supply of signals and retransmitting the same to its consumers cannot be permitted to turn around and contend that it is not liable to make any payment therefor either in terms of the contract or under Section 70 of the Contract Act.
If it had not taken recourse to the remedies provided for by a statutory provision, it must thank itself therefor. It, in our considered view, cannot take a plea contrary thereto or inconsistent therewith.
The principles of mitigation of damages whereupn Mr. Chawla relies upon, in our opinion, raises a different question.
Mr. Chawla would urge that the decision of the House of Lords in White and Carter (Councils) Ltd v McGregor reported in [1962] 2 AC 413 is being criticized. Our attention in this behalf has been drawn to Anson’s Law on Contract.
The criticism appears to be in regard to upholding the right of a party to avail remedies.
The remedies which are available to an innocent party are :-
1. To sue the other contracting party for damages of a definite sum
2. Specific performance of contract and
3. Injunction.
The criticism of White and Carter (Supra) would not cover a case of this nature as a third party namely ‘Public’ has also an interest in continuation of the contract subject of course to its repudiation by way of termination upon giving a notice in terms of Clause 4.3 of the Regulations.
The cause of action for the public to avail its remedy would have arisen provided such a notice was given.
Mr. Chawla would place strong reliance upon a decision of the Supreme Court of India in M/s. Murlidhar Chiranjilal Vs. Harischandra Dwarkadas reported in AIR 1962 SC 366 wherein Wanchoo J. laid down the law in the following terms :-
“9. The two principles on which damages in such cases are calculated are well-settled. The first is that, as far as possible, he who has proved a breach of a bargain to supply what he contracted to get is to be placed, as far as money can do it, in as good a situation as if the contract had been performed; but this principle is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps: (British Westinghouse Electric and Manufacturing Company Limited v. Underground Electric Railways Company of London 1). These two principles also follow from the law as laid down in Section 73 read with the Explanation thereof.”
As would appear from the factual matrix involved, the question therein was as to whether the contract in question was to be performed in Kanpur or Calcutta. The said decision, therefore, has no application to the facts of the present case.
When a claim is made in terms of Section 73 of the Contract Act, naturally the plaintiff will have a duty to mitigate its damages but then the said principles may not apply where a third party is involved.
In Sriram Vs. Zee Turner being Petition No. 216 (C) of 2010 disposed of on 15.7.2010 to which our notice has been drawn, this Tribunal has merely stated that clause 8.2 would not apply in a case where the parties did not arrive at a settlement for renewal of contract.
On its plain terms, clause 8.2 state so and thus no exception can be taken thereto.
There cannot be any doubt or dispute that the liability of a party during subsistence of an agreement and on the expiry thereof would differ but the same would depend on the fact situation involved in each case. Indisputably, the parties are governed by the Regulations. None of the parties having regard to clause 4 of the Regulations can terminate the contract without following the procedure prescribed therein. The respondent admittedly had not issued a public notice as is required in terms of clause 4.3 of the Regulations. It may not be a case where clause 8.2, as indicated hereinbefore, would apply. But even in a case where the agreement does not subsist on the same terms and conditions, the mutual contractual obligations on the part of the parties automatically do not come to an end. It comes to an end only on the publication of a notice in terms of clause 4.3 of the regulations, unless the parties ceased to perform their respective parts of the contract.
If that be so, submission of Mr. Chawla that the repudiation of the contract must be presumed becomes wholly irrelevant. The purported repudiation of contract was not in accordance with law.
Yet again in a case of this nature, the conduct of the parties will have a great role to play. The fact that the respondent had been receiving signals continuously despite expiry of the agreement is not in dispute. We have not been able to persuade ourselves that a local cable operators in a posh area of Delhi would be able to carry on its business only on retransmission of free to air signals.
The respondent itself had asked for supply of Set Top Boxes. The petitioner has proved supply of 60 Set Top Boxes. It is the case of the petitioner that from its head-end a hybrid nature of signal is supplied. Those who have Set Top Boxes are benefitted by the quality of supply of signal and those who do not have Set Top Boxes would continue to get signals on an analogue mode. We, therefore, are not in a position to accept the submission of Mr. Chawla that the petitioner having supplied only 60 Set Top Boxes, it cannot ask for charges more than the amount in relation thereto. Furthermore, if it has been found that the respondent had continued to take supply of signals even after expiry of the agreement, it is bound to restore the petitioner to the extent of receipt of the benefits. Furthermore, in this case the respondent does not contend that fully addressable system had been achieved; it is thus possible for the petitioner to supply hybrid signals to the customers.
We, for the reasons aforementioned are of the opinion that the petition is liable to be allowed also in respect of the period in question.
We have however, in Petition No. 200(C) of 2008 has held that the petitioner is entitled to a decree only on the basis of a reasonable rate, namely Rs. 200 per month per subscriber. The said finding shall apply to this case also.
This petition is therefore, allowed in part and to the extent mentioned hereinbefore. However, in the facts and circumstances of this case, the petitioner must be held to be entitled to interest at the rate of 9% per annum. The petitioner is entitled to costs of this petition from the respondent. Advocate’s fee assessed at Rs. 50,000/-.