Wire and Wireless (India) Ltd. & Anr v. Mr. Kanak Singh Rana Ec+

* IN THE HIGH COURTOF DELHIAT NEW DELHI + O.M.P. Nos.614/2nn7.615/2007,616/2007& 617/2007 Reserved on : December 10, 2009 Pronounced on : December 23,2009

¶1OMP No. 614/2007 WIRE &WIRELESS(INDIA)LTD &ANR. ...Petitioners Through; Ms. PratibhaSinghand Ms. Surbhi Mehta, Advocates. VERSUS MR. AiNIRUDTTSINGH JADEJA ....Respondent Tlirough: Mr. N.Ganpathyand Mr. Yati Soin, Advocates. ^

¶2OMP No. 615/2007 WIRE cV V/IRELESS(INDIA)LTD &ANR. ...Petitioners Througli: Ms. PratibhaSingh and Ms. Surbhi Mehta, Advocates. VERSUS MR. ASMWINI KUMAR GAMBHIR ....Respvondent Through: Mr. N.Ganpathy and Mr. Yati Scivi, .Advocates. ^

¶3OMP No. 616/2007 WTRE & V/IRELESS (INDIA) LTD & /vNR ...Petitioners OMP No;..C.14-617/2007 Pnge 1 Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Through: Ms. PratibhaSinghand Ms. Surbhi Mehta, Advocates. VERSUS MR.KANAKSINGHRANA ....Respondent Through: Mr. N.Ganpathyand Mr. Yati Soni, Advocates. AND

¶4OMP No. 617/2007 WIRE & WIRELESS(INDIA)LTD & ANR. ...Petitioners Tlirough: Ms. PratibhaSinghand Ms. Surbhi Mehta, Advocates. VERSUS < MR.KARAIvi SINGH JADEJA ....Respondent Through: Mr. N.Ganpathy and Mr. Yati Soni, Advocates. CORAM: HON'BLE MR. JLSTICE VALMIKI J.MEHTA

¶1WTietherthe Reporters of local papers ma>' be allowed to see the judgment?

¶2To be referred to the Reporter or not? >

¶3Whether the judgment .should be repcr^td in the Digest"^ *>0 JUDGMENr OMF No.s.61^r-617/2007 ?.

VALMIKI J. MEHTA, J. The facts ofthe aforesaidcasesare more or less similar. Reference thereforebeingmade to the factsofthe OMP No. 614/2007.

¶2The petitionerin this case by means of this OMP under Section9of the Arbitrationand ConciliationAct, 1996 in effectprays for the followingreliefs, thoughthe reliefsin the prayerclausesofthe petitionare differentlyworded:-

(i) Seeking a restraint against the respondent from using the control room/head-end and the network operations/assets/equipmentof the petitioners.

(ii) Restrainingthe respondentfrom running cable networkingbusiness either in his name or any other name;

(iii) Restraining the respondent from interfering with the entire cable network business includingrights over cable operators/franchiseesand subscriber base/connectivity of the petitioners.

(iv) Appointment of a Commissionerto make inventories and take over the assets of the petitioners with the respondent (which reliefs have more or less been granted). OMPNos.614-617/2007 Page 3

(v) Restraining the respondent from using the trademark/logosof the petitionersnamely "Siti Cable", "Channel Siti , Siti Music , Siti Hulchul" or any other mark/logos connected or linked with the'^ i petitioner no.l. Otherincidentalorderswith respecttothe aforesaidreliefshave also been asked for.

¶3This court when this case came up for admissionon 6.11.2007,passed the following order:- "Issue notice, returnable on 12.02.2008. The learned counsel for the plaintitThas drawn my attention to the agreement in question and has also indicated that in similar circumstancesin respectof otherpartieswherethe same causeof action had arisen, this court had passedad interimex parte orders. That matter was OMP327/2004 and the order passed thereon was dated 21.09.2004. Consideringall these circumstances,1 direct that till the next date of hearing,the respondentis restrainedfrom using the logos "Siti Cable" and "Siti Channels" owned by the petitioner No.l and/or from creating any third party interestin the movable assets owned by the petitioners and which are listed in documents 12, 13,14 and Annexure A to the Agreement. I also appoint Mr. Tejinder Singh, Advocate (RYo A-162, Gujranwala Town, Part-1, Delhi 110033 Tel: 27141005 Mobile-9810526009) as a receiver to take possession of the equipments detailed in document Nos 12,13,14 and Annexure A to the said agreement dated 01.05.2004. The receiver shall prepare an inventory of all the movables. Thereafter, the movables shall be stored in a place to be provided by the petitioners. The above named receiver shall proceed to the address noted in prayer b

(i) for the aforesaid purpose. Insofar as the address given at b (ii) of the praj'er clause i.e., C-202, Sahajanand Complex, 2"'' Floor, Opp Swaminarayan Mandir, Shahi Baug, Ahmedabad-380004, Mr. Navin Chawla, Advocate (Mobile: 981011498) is appointed as a receiver to take the possession of the assets indicated above which may be lying in OMPNo,s.614-617/2007 Page 4 thesepremises. Afterpreparingan inventory,he shall storethe same in the place to be provided by the petitioners. The respondent is also restrainedfrom collectingany subscriptionon behalfof the petitioner Nos 1 and 2 and shall not interfere with the subscriber base and connectivityofthe petitioners. The said receiversshall be paid a sum of Rs.30,000/- each as fees. Dasti. IA No. 12739/2007 Allowedsubjectto alljust exceptions."

¶4The counselfor the respondenthas not disputedthe directionspassedby the order dated 6.11.2007,except the portion *' shall not interfere with the subscriber base and connectivityof the petitioners". The counsel for the respondentstatesthat the respondentis not interestedin any ofthe assetsor the decoders or the trade marks/logos or connectivity of the petitioners and ^ undertalcesnot to use them. Though,most ofthe assetsaccordingto the counsel for the respondenthave been handedover pursuantto the orders of this Court, however, assuming that there are any other assets, the same shall be handed over to the petitioners.

¶5In view of the above, the disputes to be decided by rhis order fall in a very nanovv compass under two heads. The first head being of restraint against the respondent from carrying on the business of a cable operator/networking * and businessrelatedtherewith. The secondaspectis with regardto interferencr^ by the respondent in the subscriber base of the petitioner no.2 and which relief OMR Nos.614-617/2007 Page ;3 in sum and substanceis that the respondentshould not cater to the subscriber base of the petitioners. Some of the relevant clauses of the 'Right to Use' Agreement dated 1.5.2004 between the parties, and, as relied upon by the counselfor the petitioners are as under 'Tlatise 17 (MAINTAINANCE& GROWITH OF CONNECTIVITY).That Second Party hereby agrees and undertakesto maintainthe connectivityof the first party during the validity of this agreement. At the time of expirationorterminationofthis agreement,as the case may be, the second partyshall hand overthe connectivityofthe first party in the same condition as it was handed over at the time of execution of this agreement including any new subscribersadded thereto. For the removal of doubts it is hereby clarifiedthat any increaseof subscriberbase in the presentarea of the first party in the AhmedabadCity shall be the subscribersofthe first party. The total list of the franchisees and there connectivity, area of operation shall be provided by the second party to the first over running cable network businessby the second party to the first party. The list of franchises/cable operatorswith connectivityand area of operationsare herewithenclosedas Annexure D. Clause 21 (OWNERSHIP). It is understood by the Second Party that all the assets, equipments and materials used in establishingand running the network, exclusively belong to First Party and the Second Party shall not have any right/claim, of whatsoever nature, over the assets or cable television networking business, except as provided in this agreement. It is also understood by the Second Party that all the subscribers (existing subscribers and any new subscribers added thereto) shall belong to the First Party and the Second Party shall have no right of any nature over such subscribers. Clause 22 (NON-COMPETE): The Second Party shall not be entitled to enter into any agreements or arrangements, whether directly or indirectly with any party, firm, company carrying on the business similar to the First party or to assist or guide anyone regarding cable television networking business during the period of this agreement and two year thereafter in Ahmedabad City and its adjoining areas. The first party shall not be entitled to enter into any agreements or arrangements, whether directly or indirectly. It with any party, firm, company carrying on the business similar to the First party or to assist or guide anyone regarding cable television networking business during the period of this Agreement " OMPNos.614-617/2007 Page 6

¶6So far as the aspectthat the respondentshouldnot carry on any business of a cable operator,not much stress was or could be laid by counsel for the petitionersin view ofthe provisionofSection27 ofthe ContractAct,1872 and thejudgmentofthe Supremecourtreportedas PerceptZ)' Mark(India)Private Limited Vs. Zaheer Khan, 2006 (4) SCC 227 and as per which, there cannotbe contractual restrictions after the contractual period between the parties has come to an end. Since in the present case the restraint which is being sought against the respondentfrom carrying on the business, pertains to the period after the termination of the contractual obligation between the parties, the relief of injunction as prayed for that the respondent should not carry on similar business cannot therefore be granted in view of the provision of Section 27 of the V Contract Act and the aforesaid judgment of Supreme Court in the case of Percept D' Mark (India) Private Limited(siipra).

¶7That takes me to the main issue which has been very strongly urged and argued by the counsel for the parties. This aspect pertains to the entitlement of the petitioners, as claimed by it, is for exclusivity in the subscriber base of the petitioner no.2. Putting it differently, what is said is that when the respondent carries on an independent business, he should not use the subscriber It base/customers which were the customers of the petitioners and more particularly of the petitioner no.2. In my opinion, this second and the main OMP Nos.614-617/2007 Page 7 issue argued is inextricablylinked with the first issue of Section 27 of the ContractAct. As alreadydiscussed,under Section27 of the ContractAct after termination of the contractual relationship, no one can be restrained from carryingon business,then if that be so, then in such a case, if what cannotbe done directly, then surely the same cannot be done indirectly as well. By seeking restraint against the respondent from not using the subscriber base of the petitioner no.2, effectively, the petitioners are seeking to restrain the respondent from independently carrying on its business, because, it is to these very' customers/ subscribers that the cable network services are being provided by the respondent. I may note that it is not the contention of the petitioners that it has any copyright under the Copyright Act, 1957 in the list of the subscribers V and if there is no copyright, the list of the customers/subscribers are such which are in the public domain and if the respondent seeks to carry on business with those subscribers using his own netwoik/assets.Aontrol room and so on, there can be absolutely no legal basis to prevent the respondent from carrying on his business in as much as such an injunction will indirectly do what is directly prevented by Section 27 of the Contract Act. For this reason therefore the injunction against the respondent from using the subscriber base cannot be ^ granted. OMP Nos.614-6-17/2007 /-iUU/ Pages

¶8I am also doubtfulwhethera subscriberbase can be said to be an "asset" once it is admitted that no copyright in the same exists. A person has an absoluteright when an asset which is owned by him. A list ofsubscribersin public domain is surely not an asset and not a propertyand thereforeit is not permissibleto seek a restraintagainstuse ofsuch 'property'by anotherperson. At the costofrepetition,1may statethat list ofcustomerscan be an asset only if the same is a list in which a right vests under the CopyrightAct, 1957. Thus, lookingatthis issuefrom this anglealso,I find that therecannotbe any restraint against the respondent, because there is no asset in the ownership of the petitionerwhich it seeks to restrainthe respondentfrom using. Even under the CopyrightAct, it has been held by a learned Single Judge of this Court in the "^judgmentreportedas DiljeetTitus Vs. AlfredAAdebare2006 (130) DLT330 (paras 69 & 72) that though an injunction can be granted against a person from using the infonnation in a copyrighted list, however, if any details of a person found in the copyright list, otherwise also exists in common/public domain, the copyright in the details of the person appearing in the copyrighted list does not survive. In my opinion additionally, if such third person whose name appears in the copyrighted list seeks to independently approach, for entering into a contract with a person (for example a cable operator) other than the person (another OMP iN'o.s.614-617/2007 Page 9 cable operator)who has the detailsof such personin his copyrightedlist, then, no injunctioncan be grantedagainstthe third person inasmuchas there cannot arise an issue pertainingto violationof a copyrightin such a situationbecause we are then lookingat the independentfreedom of action of a person. This is because a person whose name and particularsexists in the copyrightedlist, is surely legally justified in adopting whatever course of action he chooses because he has complete freedom of action so as to enter into a contract with anyoneand in the guise of obtaining an injunction on the basis of the copyright list, a wholly independent third person cannot be prevented from acting in a manner, he so chooses, for entering into any contract with any person. Surely, an injunction cannot operate against a person who is not a party to a contract, and a third person who is not paity to a contract, therefore, cannot in effect be restrained from independently exercising his volition to enter into a contract with any person. These observations are being made for the reason that a subscriber/customer of a cable service network provider is fully entitled to approach any cable network service provider by entering into a contract with such service provider and it cannot be said that there can in effect be an injunction against such third person simply because of a contiact between two ^ cable service providers that a subscriber/customer is his 'asset' and who cannot approachone or otherparticularcable networkserviceprovideralthoughit is at OMPNgs.614-617/2007 Page10 the customer's own volition. Thus assuming for the sake of argument an injunction is granted as prayed for by the petitioner, there cannot be an injunction against the respondent from giving services to a customer who directly approachesthe respondent. For this reason also the reliefas prayed cannot be granted.

¶9Therefore,looking at the issue from the point of view of either the fact that the respondent cannot be restrained from carrying out his business in tenns of Section 27 of the Contract Act or that a list of subscriber is not an asset or that even if there is a copyrighted list a customer/subscriber cannot be prevented from approaching any cable network service provider because of the right of freedom of action of such independent customer, the petitioner cannot succeed in seeking the inteiim relief to prevent the respondent from entering into contracts with customers/subscribers and nor can such subscribers/ci'storners in effect be prohibited from entering into a contract with the respondent.

¶101 could have disposed of this case on a preliminary point that the present petition is not m.aintainable, but, as arguments were addressed in detail, I have opted to lake the course of deciding the issue also on merits. A preliminary ^ objection Ahich was argued was tliat the petition under Section 9 is not maintainable because there is no aibitration agreement between the pa.-ties as envisaged by law because an Arbitration Agreement has necessarily to be a OMP Nok.611-617/2037 Paoe 11 \ writtencontractas per Section7 ofthe Arbitrationand ConciliationAct, 1996. What the respondent contends is that as per the case of the petitioners themselves,the contractwhichwas enteredintobetweenthe parties,is the Right to Use Agreement dated 1.5.2004,and admittedly,that Agreementwas only valid for a period of one year which expired on 30.4.2005. Thereafter, accordingto the counselfor the respondent,even accordingto the petitioner,it is only an oral understandingthat continuedbetweenthe partiesand thereforeit is contendedthat no petitioncan be tiled where the arbitrationclause is on an oral understanding.

¶11Paia 7 of the petitionis relevantinthis regardandruns as under;- "7. The agreement was initially for a period of one year till

70.4.2005 and the same was renewed for a further period of 2 years as per oral understandingarrivedbetweenthe partieson agreedterms and conditions between the paities. Even as per oral understanding/arrangement arrived with the Respondents has come to an ex'd on 30.4.2007." (Emphasis added) The first line of para 17 ttt'the petition also is relevant and the same reads as under:- "That as per oral understanding arrived between the parties" (Emphasis added) The aforesaid avennents as made in the petition make it more than clear that the petitioner itself relies not on the \vritten contract but only on oral understanding between the parties. I OMP Nos 614-6J 7/2007 Page 12

¶12Section7 of the Arbitrationand ConciliationAct, 1996 requiresthat the / ^ agreementbetweenthe parties has to be in writing. On the admissionof the petitioneritselfthat it was an oral understanding/arrangement/agreementonly onthe basisof whichthe contractualrelationshipwas continuing,it is therefore, quite clear that after 30.4.2005,there was no writtencontractbut only an oral contractbetweenthe parties. If there is no writtencontract,then, the clauseof arbitrationin the writtenagreementdated 1.5.2004surelyis no longeroperative between the partiesfor periodsafter 30.4.2005when oral agreementis said to be operativeas betweenthe parties. Accordingly.I am of the opinion that the present petition is not maintainableunder Section 9 of the Aibitrationand Conciliation Act. 1996 because there is no written Agreement between the 4^ partiesand whichis a sinequanon for a petitionto be filed underSection9.

¶13Accordingly, both on merits as well as on non-maintainability, the present petitions are dismissed with costs of Rs.25,000/- in each of the petition. December 23, 2009 ib VALMIKJ J.MEHTA, .1 QMP Nos.614-617/2007 Page 13