Citation Codes

Equivalent Citations

citation codes

Case Number

C.R.P No: 1030 of 2003 and CMP No. 14686 of 2003

Advocates

Mr. P.R Raman, Advocate for Petitioner.
Mr. A.L Somayajee Senior Counsel, for Mr. P. Wilson for Respondents.

Judges

Prabha Sridevan, J.

Acts

Order 39 Rule 1 or Rule 2 of the Code of Civil Procedure,
Section 169 (1) of the Delhi Municipal Corporation Act.
Section 115 of the Code of Civil Procedure
section 115 C.P.C,

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Smart Summary

Structured Summary of the Provided Opinion

Factual and Procedural Background

This proceeding is a revision originally filed under section 115 of the Code of Civil Procedure (C.P.C.) against an order passed in C.M.A. No. 67 of 2003 confirming the order passed in I.A. No. 9980 of 2003 in O.S. No. 2821 of 2003. A subsequent application (CMP. No. 14686 of 2003) was filed to convert the revision into a petition under Article 227 of the Constitution of India.

The respondent (plaintiff in the underlying suit) and the petitioner (franchisee) entered into a franchise agreement dated 15.12.1999 for a five-year term. The agreement included a negative covenant preventing the franchisee from taking signals from third parties during its currency (Clause 4(3)/Clause 4(e)) and a clause (2(k)) permitting the franchiser to discontinue service on seven days' notice in the event of breach. The next day the parties executed a purchase agreement by which the business of distributing satellite signals owned by the petitioner was transferred to the respondent for consideration of six lakhs.

The respondent filed a suit (referred to in the opinion as O.S. No. 2881 of 2003 in para 5) on 6.6.2003 seeking a declaration that the franchise agreement was valid and a permanent injunction restraining the petitioner from disconnecting or substituting links or taking signals from third parties. An interim injunction application I.A. No. 9980 of 2003 was allowed by the trial court (VIII Assistant City Civil Judge, Chennai) on the basis of prima facie case, balance of convenience and irreparable loss, and directions were issued to enable resumption of cable service connection.

The High Court was faced with (a) a preliminary objection to the maintainability of the conversion application, (b) an argument on whether the courts below had exceeded jurisdiction by granting a relief that was, in effect, mandatory rather than purely prohibitory, and (c) the merits of competing factual contentions about whether the respondent stopped signals on 14.4.2003 and whether the petitioner thereafter lawfully procured signals from another provider.

Legal Issues Presented

Whether the application to convert the revision filed under Section 115 CPC into a petition under Article 227 of the Constitution is maintainable (i.e., whether the High Court should permit conversion to Article 227).
Whether the courts below exceeded their jurisdiction in granting an interlocutory order (interim injunction) that in effect required mandatory action (restoration of service and placement of the optical node) which was not exactly the relief prayed for in the plaint.
On the merits, whether the respondent breached the franchise agreement by stopping signals on 14.4.2003, and whether the petitioner was justified in taking signals from a third party (i.e., whether the petitioner itself was in breach of the agreement and disentitled to equitable relief).
Whether exercise of supervisory jurisdiction under Article 227 is warranted to interfere with the interim orders passed by the courts below.

Arguments of the Parties

Petitioner's Arguments

The courts below exceeded their jurisdiction and misconstrued documents; they granted relief in effect mandatory in nature though the plaint sought only a permanent injunction.
Mandatory interlocutory relief (if at all) can only be granted to restore the status quo and not to establish a new state of affairs (reliance on Bihar University v. Rajendra Singh).
When the substantive rights under the contract are disputed, the presumption of a prima facie case is not proper (reliance on Multichannel (India) Ltd. v. Kavitalaya Productions).
The petitioner asserted the respondent had committed the breach by stopping signals on 14.4.2003; the petitioner relied on complaints from end-users and events that forced it to take signals from M/s. Hathway; the petitioner contended the respondent's conduct disentitles it to injunction (unclean hands).
Delay (two months) in filing the suit after the alleged stoppage was relied upon to refute entitlement to interim relief.
Both lower courts misapprehended the effect of the purchase agreement and franchise agreement, erroneously concluding the respondent had bought the petitioner's business.
The conditional access system change in Chennai was urged to be material to the relief to be granted.

Respondent's Arguments

The petitioner was the party in breach by dealing with a third-party MSO during the currency of the franchise agreement; there was no suppression of facts by the respondent.
The scope of Section 115 CPC after amendment is limited; revision is a supervisory power of the High Court to control subordinate courts (reliance on Shiv Shakti Coop. Housing Society v. Swaraj Developers).
The petitioner did not, as claimed, request resumption of signals after the alleged stoppage nor complain promptly; instead, it arranged alternate supply and only later claimed the respondent had illegally stopped signals.
Communications such as a telegram dated 19.4.2003 asking the petitioner to pay subscription “to avoid delink” indicate that the link was not snapped on 14.4.2003, undermining the petitioner's version.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Bihar University v. Rajendra Singh, AIR 1978 Pat. 144	Principle that a mandatory injunction granted interlocutorily should normally be limited to restoring the status quo and not to establish a new stage of things.	Cited by the petitioner to argue the lower courts impermissibly granted mandatory relief beyond the plaint. The Court considered the submission but analysed factual matrix to determine whether the order was genuinely beyond jurisdiction.
Multichannel (India) Ltd. v. Kavitalaya Productions (P) Ltd., 1998 (3) MLJ 708	When the rights under the contract sought to be enforced are themselves in dispute, presumption of a prima facie case may not be proper.	Relied upon by the petitioner to contend interim injunction was improvidently granted; the Court weighed competing materials and conduct to test whether interim relief was justified.
Surya Dev Rai v. Ram Chander Rai, 2003 (4) CTC 176 : JT 2003 (6) S.C. 465	Article 226/227 jurisdiction may be exercised where an error is manifest, apparent and when grave injustice or gross failure of justice would have been occasioned.	Cited by the petitioner to support conversion to Article 227 as maintainable where manifest error/grave injustice is shown. The Court considered this in allowing conversion subject to additional court fee payment.
Vishesh Kumar v. Shanti Prasad, AIR 1980 SC 892	The revisional power of the High Court over a revisional order by the District Judge should not defeat legislative scheme; revision under Section 115 is distinct from Article 227 petitions.	Relied upon by the respondent to argue conversion should not be permitted. The Court reviewed this authority but held conversion could be allowed depending on the facts and interests of justice, referencing other Supreme Court dicta.
Sadhana Lodh v. National Insurance Company Ltd., 2003 (2) CTC 122	High Court ought not to entertain Article 227 petitions where a statutory right of appeal is available; Art.227 cannot be used to circumvent statutory remedies unless revision is expressly barred.	Cited by the respondent to resist conversion. The Court analysed this principle in light of other Supreme Court authorities and the factual matrix and proceeded to permit conversion under specified conditions.
Khimji Vidhu v. Premier High School, 1999 (9) SCC 264	Article 227 should be exercised sparingly, to correct errors of jurisdiction or material irregularities, not to reappraise findings of fact; appellate domain remains distinct.	Relied upon by the respondent; the Court applied the cautionary approach but found that, on conversion, there was no jurisdictional error requiring interference with the lower courts' orders.
Municipal Corporation of Delhi v. R.P. Khaitan, 1999 (79) DLT 555 (SC)	Articles 226/227 are extraordinary remedies distinct from ordinary remedies like Section 115 CPC; existence of an alternative remedy does not oust High Court jurisdiction; High Court may convert proceedings to another remedy where appropriate.	The Court explicitly relied on this Supreme Court holding to recognise the High Court's power to convert Section 115 proceedings into Article 227 petitions where proper cause is shown and in the interest of justice.
Shiv Shakti Coop. Housing Society, Nagpur v. Swaraj Developers and others, 2003 (2) CTC 564 : 2003 (6) SCC 659	Interlocutory orders, even if excluded from revision by amended CPC, remain subject to certiorari and supervisory jurisdiction under Articles 226 and 227.	The Court relied upon this authority to permit conversion of the revision to an Article 227 petition, and directed payment of additional court fees to effect conversion.
Mrityunjay Sen v. Shrimati Sikha Sen, AIR 2003 Cal. 165	Illustrative reliance by a High Court on the Supreme Court's approach concerning availability of extraordinary remedies.	The opinion references this case as an instance where the Calcutta High Court followed the principles in Municipal Corporation of Delhi; it formed part of the matrix considered on conversion/maintainability.
M/s. Gujarat Bottling Co. Ltd. v. Coca Cola Co., 1995 (5) SCC 545	Negative stipulations in franchise agreements (restricting franchisee from dealing with competitors) are generally enforceable during the subsistence of the agreement; tests for interlocutory injunction: prima facie case, balance of convenience, irreparable injury; conduct of parties is relevant in equitable jurisdiction under Order 39 CPC.	The Court applied these principles to the franchise agreement: (i) noted the negative covenant; (ii) emphasised that an injunction can protect such rights during subsistence of the contract; (iii) considered parties' conduct and found the respondent's explanation for removal of the optical node acceptable, supporting the injunction previously granted by courts below.
Vijaya Minerals Pvt. Ltd. v. Bikash Chandra Deb, AIR 1996 Cal. 67	Denial of an order of injunction can amount to dismissal of the plaintiff's suit at interlocutory stage; the court has duty to implement solemn agreements between parties.	Cited by the Court by way of supporting authority for granting interlocutory relief to protect contractual rights and to avoid effectively denying the plaintiff relief before trial.

Court's Reasoning and Analysis

The Court divided its approach into two principal stages: (A) the threshold question of conversion/maintainability and (B) the merits of the injunction and whether the courts below had exceeded jurisdiction.

(A) Conversion / Maintainability

The Court examined authorities establishing the relationship between ordinary remedies (Section 115 CPC) and extraordinary remedies (Articles 226/227). It relied on the Supreme Court's dictum in Municipal Corporation of Delhi v. R.P. Khaitan that the High Court may, in the interest of justice, convert proceedings from one form to another and that the mere existence of an alternative remedy is not an absolute bar to constitutional remedies.
Applying the principle in Shiv Shakti Coop. Housing Society v. Swaraj Developers, the Court noted that interlocutory orders excluded from revision by the amended CPC can still be subject to supervisory jurisdiction under Articles 226/227. On this basis the petitioner was permitted to convert the revision into a petition under Article 227, subject to payment of additional court fees by a specified date (27.10.2003). The Registry was directed to effect conversion upon receipt of the fee.

(B) Merits — Whether courts below exceeded jurisdiction and whether interlocutory mandatory relief was justified

The Court reviewed the chronology relied upon by the parties: notices and telegrams exchanged in early April 2003, the petitioner’s alleged stoppage of service on 14.4.2003, the petitioner's receipt of alternate signals on 15.4.2003, telegram dated 19.4.2003 demanding subscription “to avoid delink,” the petitioner’s registered letter of 21.4.2003 claiming illegal stoppage, and a fax of 29.4.2003 concerning removal of the optical node (which was later acknowledged as received by the respondent).
On the available materials, the Court found no proof that signals were actually stopped on 14.4.2003. The telegram of 19.4.2003 requesting payment "to avoid delink" indicated the link had not been snapped as at that date; moreover, there was documentary material showing the petitioner contacted a third-party MSO on 15.4.2003. These facts undermined the petitioner's contention that the respondent had unilaterally stopped signals on 14.4.2003.
The Court emphasised contractual provisions: the franchise agreement was for five years; Clause 4(e) (negative covenant) barred the franchisee from taking signals from a third party during its subsistence; Clause 2(h) (as noted) made the optical node and accessories the property of the respondent. Given this contractual structure, the respondent's decision to remove its optical node when the petitioner sought third-party supply was logically acceptable: the respondent would not want a rival MSO to supply signals through respondent-owned hardware.
Relying on the Coca Cola (Gujarat Bottling Co.) precedent, the Court reiterated that negative stipulations during the contract subsistence are enforceable and that interlocutory injunctions may be granted to protect such rights; in granting or upholding interlocutory relief the court must also consider the conduct of parties (equitable considerations under Order 39 CPC). The Court found the courts below had examined the correspondence and documents and granted injunction after assessing prima facie case, balance of convenience and irreparable injury.
On the specific question whether the lower courts had granted an impermissible mandatory order beyond the plaint, the Court reasoned that replacement of the optical node was necessary for the interim injunction to be effective (otherwise the injunction would be a paper order with no practical effect). Therefore the direction to restore supply and place the optical node in the petitioner's control room was consistent with making the interim relief effective and was not an excess of jurisdiction.
After conversion (if the petitioner paid additional court fees), the High Court exercising Article 227 jurisdiction reviewed whether the courts below had acted without jurisdiction or with such material irregularity as to occasion failure of justice; the Court concluded they had not. It therefore declined to interfere under Article 227 with the substantive exercise of jurisdiction by the subordinate courts.

Holding and Implications

Holding:

The Court ordered that the petitioner be permitted to convert the revision under Section 115 CPC into a petition under Article 227 of the Constitution, provided the petitioner pays the additional court fee on or before 27.10.2003 and the Registry effects the conversion upon payment. The Court further held that, after such conversion and on exercise of supervisory jurisdiction under Article 227, the courts below had not acted without jurisdiction, nor committed material irregularity warranting interference. Consequently, the High Court refused to set aside the orders passed below on the merits.

The Court directed that the respondent shall provide signals to the petitioner as directed by the courts below within one week. If the respondent fails to supply the signals within one week, the petitioner may approach the Court for appropriate direction. The Court also directed the trial court to dispose of the suit within four months from receipt of this order.

Implications:

Direct practical effect on the parties: (a) conversion to Article 227 permitted upon payment of additional court fee by the stated date (failure to pay results in dismissal of the CMP), (b) the respondent is ordered to restore/provide signals within one week, and (c) the trial court must conclude the suit within four months.
On merits, the High Court did not find jurisdictional error in the interlocutory orders of the lower courts and therefore did not exercise its supervisory jurisdiction to overturn those orders.
The opinion applies existing precedents on the interplay between Section 115 CPC and Articles 226/227, franchise agreement negative covenants and principles governing interlocutory injunctions, but it does not purport to lay down any novel legal principle or to set a new precedent beyond application of cited authorities to the facts. (No broader new precedent was announced in the opinion.)

If the petitioner fails to comply with the Court's direction to pay the additional court fee as specified, the CMP for conversion stands dismissed; if payment is made, the revision is converted and the substantive supervisory jurisdiction was not exercised to disturb the lower courts' orders.

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Prasad Mathew Prop: Metro Entertainment Network No. Gf, Century Towers, 46, Barnaby Road, Kilpauk, Chennai-10 Petitioner v. S.C.V Unit Of Sun T.V.Pvt, Ltd., (Formerly Known As Sumangali Publications) Rep. By Its Manager (Programmes) No. 183, Kodambakkam High Road, Chennai-34

1. This revision was originally filed under section 115 C.P.C, against the order passed in C.M.A No. 67 of 2003 confirming the order passed in I.A No. 9980 of 2003 in O.S No. 2821 of 2003. Thereafter, CMP. No. 14686 of 2003 has been filed for conversion of the above revision under Art. 227 of the Constitution of India.

2. Preliminary objection was taken regarding the maintainability of the C.M.P, for conversion and thereafter the matter was argued. The question of maintainability as well as the merits of revision were heard and decided together.

3. The respondent is the plaintiff who entered into a franchise agreement, (hereinafter referred to as agreement in short), with the petitioner on 15.12.1999 agreeing to provide the service which shall mean the “channels offered by the respondent to the franchisee”. The period of agreement was five years. As per Clause 2(k) of the agreement any breach by the franchisee, gave the respondent the discretion to discontinue the service by giving seven days notice or to continue the agreement. The franchisee is the petitioner.

4. The petitioner also bound himself under Clause 4(3) of the agreement not to enter into similar agreement or to carry signals from third parties during the currency of the said agreement. The next day a Purchase Agreement was entered into by the same parties whereunder the business of distributing satellite signals owned by the petitioner was transferred to the respondent for a total consideration of six lakhs.

5. O.S No. 2881 of 2003 was filed on 6.6.2003 for a declaration that the franchise agreement was valid and for a permanent injunction restraining the franchise from disconnecting the link or discontinuing the transmission or from taking signals from links from any third parties for the purpose of broadcast, distribution or transmission. I.A.No:9980 of 2003 was filed for interim injunction. Interim injunction was granted by the learned VIII Assistant City Civil Judge, Chennai, who was satisfied that there was prima facie case, that the respondent has shown balance of convenience in his favour and also irreparable loss. To enable the petitioner to resume cable service connection with the respondent, directions were issued.

6. The learned counsel for the petitioner submitted that the courts below had clearly exceeded their jurisdiction, they had construed the documents erroneously. While the prayer in the suit was only for permanent injunction, the order passed by the court below was in effect a mandatory injunction and this cannot be granted. For this purpose, reliance was placed upon Bihar University v. Rajendra Singh, AIR 1978 Pat.144 where it was held that …..”if a mandatory injunction was granted at all on an interlocutory application, it was granted only to restore the status quo and not granted to establish a new stage of things, differing from the state which existed at the date when the suit was instituted….” Reliance was also placed on the pronouncement in Multichannel (India) Ltd. v. Kavitalaya Productions (P) Ltd., Ltd., and others, 1998 (3) MLJ 708 where a Division Bench of this Court held that when the rights under the contract which is sought to be enforced was itself in dispute presumption of prima facie case was not proper. The learned Counsel also referred to Surya Dev Rai v. Ram Chander Rai, 2003 (4) CTC 176: JT 2003 (6) S.C, 465, where it was observed that frequently matters may arise before the Supreme Court where the question would arise whether the jurisdiction under Art. 226 and 227 have to be exercised even when the lis is between two private parties and it was held that where the error is manifest, apparent and when grave injustice or gross failure of justice would have occasioned, this court could exercise its supervisory jurisdiction under Art. 227 of the Constitution. Therefore it was submitted the application for conversion is maintainable. The learned senior counsel for the respondent relied on Vishesh Kumar v. Shanti Prasad , AIR 1980 SC 892 where it was held that “to recognise a revisional power in the High Court, over a revisional order passed by the District Judge would defeat the object of the Legislative Scheme” and therefore a revision petition under section 115 is separate and distinct from a petition under Art. 227 and one cannot be identified with the other. Reliance was also placed on Sadhana Lodh v. National Insurance Company Ltd., and another, 2003 (2) CTC 122, where it was held that the High Court ought not to have entertained petition under Art. 227, when the alternative remedy of appeal was available under the Statute. In Khimji Vidhu v. Premier High School, 1999 (9) SCC 264 the Supreme Court held that Art. 227 must be sparingly exercised and may be exercised to correct the error of jurisdiction an the like but not to upset the finding of fact which falls in the domain of an Appellate Court only and that the High Court had exercised its jurisdiction vested in it under Art. 227. Therefore it was submitted that Conversion cannot be ordered.

7. In Sadhana Lodh v. National Insurance Company Ltd., and another, 2003 (2) CTC 122 was a case where the statutory right of appeal had been provided for. The Supreme Court held that where law provides the right of appeal on limited grounds, it cannot be misused by filing a petition under Art. 227 and only when the remedy of filing a revision before the High Court had been expressly barred by the State enactment, Petition under Art. 227 would lie.

8. In this case, the learned counsel for the petitioner urged that the courts below had virtually granted a relief in favour of the respondent which was not prayed for in the plaint. It was also submitted that whether the plaintiff succeeded or failed in the suit, this order directing the respondent to restore supply and to place the optical node in the control room of the petitioner would remain unaltered. No order can give a party such a right.

9. In Mrityunjay Sen… v. Shrimati Sikha Sen…Opposite Party., AIR 2003 Cal. 165 the Calcutta High Court relied on a three Judge Bench decision of the Supreme Court in Municipal Corporation of Delhi v. R.P Khaitan, 1999 (79) DLT 555 (SC) a short judgment which is extracted hereunder:-

“The right to approach the High Court under Articles 226 or 227 of the Constitution, or both is within the ambit of the right to avail constitutional remedies as enshrined in Article 32 of the Constitution. These are styled as extraordinary remedies because they are not part of the ordinary procedure prescribed for adjudication of disputes in the ordinary courts of law. The remedy of revision under Section 115 of the Code of Civil Procedure whereby the High Court is empowered to call for the record of any case which has been decided by any court subordinate to it, and in which no appeal lies thereto is an ordinary one empowering it to pass appropriate orders when the subordinate court appears to have exercised a jurisdiction not vested in it by law or to have failed to exercise its jurisdiction so vested or to have acted in exercise of its jurisdiction illegally or with material irregularity. This remedy presupposes the cause having been in a court subordinate to such High Court.

In these set of appeals the view expressed by the Delhi High Court has been questioned whereby petitions under Article 226 of the Constitution were held by it to be not maintainable in the presence of the regular remedy available under Section 115, CPC towards challenging the orders of the District Judge. Delhi, passed under Section 169 (1) of the Delhi Municipal Corporation Act. Few of these appeals are by the Municipal Corporation of Delhi and the remaining are by the tax-payers. WE treat them all as identical.

It is true that the extraordinary remedies provided under Articles 226 and 227 of the Constitution are dependent upon the High Court willing to interfere in a matter for which a large measure of discretion rests with it. Its power is so wide so as to envelope not only all aspects of the matter but orders can be passed of such nature as the High Court thinks fit. The jurisdiction as such is not curtailed to meet questions of parameters. On the other hand, the regular remedy under Section 115, CPC is hedged by the language of the provision. Only errors of jurisdiction and material irregularities in the exercise of jurisdiction bring about a cause within the ambit of that provision. All the same it is worthy of notice that the Forum for the aforementioned three remedies ordinary was well as extraordinary is with the High Court itself. We see no reason then as to why the frame of the cause be determinative. It is for the litigant to choose the remedy and it is for the High Court to grant or deny relief thereon having regard to the facts and circumstances of each case. We may, however, add that the existence of an alternative remedy can by itself be a ground for the High Court refusing to exercise jurisdiction but it is not as if jurisdiction of the High Court is ousted by such existence. The High Court's dependence on Vishsh Kumar v. Shanti Prasad, AIR 1980 SC 892 in refusing to convert a petition under Section 115, CPC to be one under Art. 227 of the Constitution may have been justified on the facts of that case, but the same cannot be treated as a precedent to oust jurisdiction of the High Court vested in it under the law. The High Court certainly is entitled to convert any proceedings instituted before it it one manner to be that of another provided a proper cause has been made out and in the interest of justice.”

10. The petitioner claims that grave injustice would arise if he is not permitted to convert the petition to one under Art. 227 of the Constitution of India and if he is restricted by the provision of amended Section 115. Relying on the above decision and the decision in Shiv Shakti Coop.Housing Society, Nagpur v. Swaraj Developers and others, 2003 (2) CTC 564: 2003 (6) SCC 659, where it was held that interlocutory orders against which remedy of revision has been excluded by the amended CPC are still subject to certiorari and supervisory jurisdiction of the High Court under Art. 226 and 227, the petitioner is permitted to covert the Revision to one under Art. 227 of the Constitution of India. The petitioner shall pay the additional Court Fee on or before 27.10.2003 and on such payment the Registry shall convert this Revision as one under Art. 227.

11. Now, the merits of the case. According to the petitioner it was the respondent who committed the breach and stopped supply on 14.4.2003 Even prior to the date there were some problems between the parties. According to the petitioner it is only after the respondent stopped the signals on 14.4.2003 and the petitioner received numerous complaints from their end-user customers that the petitioner was forced to take signals from M/s. Hathway Cable and Data Com.Network Pvt., Ltd., Thereafter the petitioner informed to the respondent that since the respondent had unilaterally stopped the signals, he had no obligation to pay any subscription and that it was open to the respondent to remove the Node by sending their authorised representative. This was in response to the Fax Message issued by the respondent that they were not comfortable with keeping the Optical Node any longer with the petitioner.

12. According to the learned counsel for the petitioner having taken back the optical node and having acknowledged the fact that the services were disconnected, the respondent had come with a false case as though the petitioner was only “attempting to subvert the services” contrary to the terms of the agreement. Learned Counsel submitted that a party who has not come to the court with clean hands is not entitled to the benefit of injunction. He also submitted that when the signals were stopped in the month of April, the two months' delay in filing the suit would also disentitle the respondent from the benefit of injunction. It was also submitted that after the order of injunction, the conditional Access System had been introduced in the Metropolitan City of Chennai and therefore this should be taken note of while passing orders since this would have a direct bearing on the matter.

13. It was also submitted that both the courts below had confused themselves with regard to the effect of the purchase agreement and the franchise agreement had come to the conclusion that the respondent and had bought the petitioner's business over and had passed orders under this misconception. The mandatory direction issued by the courts below was also unjust.

14. The learned Senior Counsel appearing for the respondent on the other hand would submit that there was no suppression of facts and if at all one party's conduct is blameworthy, it is the petitioner's as he had committed breach of the agreement which was for a period of five years. It was also submitted that the scope of Section 115 after the Amendment is very limited and while right of appeal is an substantive right, right of revision under section 115 is essentially a source or power of the High Court to have effective control on the functioning of the subordinate courts by exercising supervisory power as has been held by the Supreme Court in Shiv Shakti Coop.Housing Society, Nagpur v. Swaraj Developers and others, 2003 (2) CTC 564: 2003 (6) SCC 659.

15. It was submitted that the petitioner who claims that the signals had been stopped on 14.4.2003, did not request the respondent to resume signals, nor did he make any complaint regarding the stoppage of signals, Only on 21.4.2003 a registered letter was sent by the petitioner to the respondent indicating that he had already taken signals from another provider. According to the learned senior counsel, the petitioner wanted to shift to another provider in breach of the franchise agreement and therefore the petitioner had falsely alleged that it was the respondent which stopped the signals. The learned senior counsel pointed out that if the petitioner's case was true, then there was no occasion for the respondent to issue a telegram on 19.4.2003 demanding payment of subscription from April to avoid delink. The very word “to avoid delink” would show that as on 19.4.2003, the respondent service had not been stopped.

16. In M/s. Gujarat Bottling Co., Ltd., v. Coca Cola Company, 1995 (5) SCC 545 it was held that,

“30. There is a growing trend to regulate distribution of goods and services through franchise agreements providing for grant of franchise by the franchiser on certain terms and conditions to the franchisee. Such agreements often incorporate a condition that the franchisee shall not deal with competing goods. Such a condition restricting the right of the franchisee to deal with competing goods is for facilitating the distribution of the goods of the franchiser and it cannot be regarded as in restraint of trade.

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…..In that context, it is also relevant to mention that the said negative stipulation operates only during the period the agreement is in operation because of the express use of the words “during the subsistence of this agreement including the period of one year as contemplated in paragraph 21” in paragraph 14. Except in cases where the contract is wholly one sided, normally the doctrine of restraint of trade is not attracted in cases where the restriction is to operate during the period the contract is subsisting and it applies in respect of a restriction which operates after the termination of the contract.

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42. In the matter of grant of injunction, the practice in England is that where a contract is negative in nature, or contains an express negative stipulation, breach of it may be restrained by injunction and injunction is normally granted as a matter of course, even though the remedy is equitable and thus in principle a discretionary one and a defendant cannot resist an injunction simply on the ground that observance of the contract is burdensome to him and its breach would cause little or no prejudice to the plaintiff and that breach of an express negative stipulation can be restrained even though the plaintiff cannot show that the breach will cause him any loss.

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43. The grant of an interlocutory injunction during the pendency of legal proceedings is a matter requiring the exercise of discretion of the court. While exercising the discretion the court applies the following tests - (i) whether the plaintiff has a prima facie case; (ii) whether the balance of convenience is in favour of the plaintiff; and (iii) whether the plaintiff would suffer an irreparable injury if his prayer for interlocutory injunction is disallowed. The decision whether or not to grant an interlocutory injunction has to be taken at a time when the existence of the legal right assailed by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. Relief by way of interlocutory injunction is granted to mitigate the risk of injustice to the plaintiff during the period before that uncertainty could be resolved. The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial.

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………Under Order 39 of the Code of Civil Procedure, jurisdiction of the Court to interfere with an order of interlocutory or temporary injunction is purely equitable and, therefore, the Court, on being approached, will, apart from other considerations, also look to the conduct of the party invoking the jurisdiction of the Court, and may refuse to interfere unless his conduct was free from blame. Since the relief is wholly equitable in nature, the party invoking the jurisdiction of the Court has to show that he himself was not at fault and that he himself was not responsible for bringing about the state of things complained of and that he was not unfair or inequitable in his dealings with the party against whom he was seeking relief. His conduct should be fair and honest. These considerations will arise not only in respect of the person who seeks an order of injunction under Order 39 Rule 1 or Rule 2 of the Code of Civil Procedure, but also in respect of the party approaching the Court for vacating the ad interim or temporary injunction order already granted in the pending suit or proceedings.

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48. Analysing the conduct of the GBC in the light of the above principles, it will be seen that GBC, who was a party to the 1993 Agreement, has not acted in conformity with the terms set out in the said agreement. It was itself, prima facie, responsible for the breach of the agreement, as would be evident from the facts set out earlier. Neither the consent of Coca Cola was obtained for transfer of shares of GBC nor was Coca Cola informed of the names of persons to whom the shares were proposed to be transferred. Coca Cola, therefore, had the right to terminate the agreement but it did not do so. On the contrary, GBC itself issued the notice for terminating the agreements by giving three months' notice.”

17. In Vijaya Minerals Pvt.Ltd, v. Bikash Chandra Deb, AIR 1996 Cal.67 the Calcutta High Court held that,

“………denial of an order of injunction will almost amount to dismissal of the suit of the plaintiff at the interlocutory stage and it is the duty of the Court to implement the solemn agreement between the parties.

18. The learned counsel for the petitioner has given the chronological statement of events. On 3.4.2003 a Notice was issued by the respondent to the petitioner that the cable sold by the petitioner should not be encumbered. On 4.4.2003, the petitioner denied any intention to sell the cables and asked the respondent to remove the cables. On 14.4.2003, the petitioner claims that signals were stopped. On 15.4.2003, the petitioner takes the signals from another provider. On 19.4.2003, the respondent sends a telegram calling upon the petitioner to pay subscription for the month of April to avoid delinking. On 21.4.2003, a registered letter was sent by the petitioner to the respondent that the signals had been illegally stopped by the respondent and therefore no subscription would be paid and that the petitioner is already taking signals from another provider. On 29.4.2003 a Fax is sent by the respondent to the plaintiff along with xerox copy in which it is stated that since the petitioner has taken signals from third party, the optical node belonging to the respondent would be shifted. It is seen from the paper book that the receipt of the optical node and accessories is acknowledged by a representative of the respondent. Thereafter notices were issued and the suit is filed.

19. Both the parties agree that there was an agreement dated 15.12.1999 It is for a period of five years. Therefore, it will come to an end on 14.12.2004 Clause 4(e) of the agreement bars the franchisee from entering into similar agreement with any third party. It is clear from the telegram dated 3.4.2003 and 4.4.2003 that the relationship between the parties had started deteriorating. But as regards the claim that signals were stopped on 14.4.2003, there is no material to show that it got stopped on that day. It is only in the letter dated 21.4.2003, that the petitioner claims that signals had been stopped on 14.4.2003 without warning, causing loss and that this had also affected their obligation to give uninterrupted Cable T.V Service.

20. From the submissions made on behalf of both the parties, it is clear that the Multi System Operators like the respondent feed their signals through optical nods. Para 2(h) of the franchise agreement shows that the cable and accessories to the control room of the petitioner for providing service shall always be the property of the respondent. The explanation given by the respondent that when the petitioner shifted his allegiance to another third party, they were forced to remove their optical node is clearly acceptable. The respondent definitely would not want to have his rival MSO to supply signals through the optical nodes that belong to the respondent.

21. The non mentioning of all the details in the plaint has not caused any prejudice, since in the reply to the interim application all the facts were stated the entire correspondence was placed before the Court and all the documents were also produced before the court which considered them and came to the conclusion that injunction should be granted.

22. Now the question is whether the direction given by the court amounts to mandatory direction contrary to what was prayed for by the respondent in the plaint?

23. The agreement is for a period of five years unless the respondent choose to discontinue the services. Therefore every day the petitioner gets signals from another third party the right of the respondent is being violated; and the franchisee agreement itself speaks of the huge investment that the respondent had made, vide clause 2(k) of the agreement and that is why the courts below have come to the conclusion that the respondent is entitled to the grant of injunction. If the injunction order is to be an effective order and not just a paper order, it is necessary that the respondent should transmit signals to the petitioner's control room which are thereafter transmitted to the enduser. Without the optical node this cannot be done. So unless the optical node is replaced, the respondent's right under the Franchise Agreement cannot be protected. Therefore, it cannot be said that the court below had exceeded its jurisdiction.

24. In this context, the observations made by the learned Judge of the Calcutta High Court in the decision referred to supra are very apposite. To deny interim injunction would not be in accordance with equity and justice since it would allow the defendant to flout the agreement with the blessings of the court on the ground that damages would be an adequate remedy. There is a negative covenant viz., Cl.4(e) in the agreement and according to the Coco Cola case breach of a negative stipulation is normally restrained by an order of injunction and the question of balance of convenience or damages being an adequate remedy does not arise. The petitioner does not deny the agreement. It is his case that the agreement was unilaterally terminated by the respondent by stopping the signals on 14.4.2003 If there is something to show that on 14.4.2003, the signals were stopped and that the petitioner had immediately voiced his objection, there may be some ground for his grievance. But there is nothing to that effect. Instead, we have documents to show that the petitioner had approached the third party MSO on 15.4.2003 It is not possible to accept that on 14.4.2003, the signals were stopped. On the other hand, there is the communication dated 19.4.2003 from the respondent asking the petitioner to pay the subscription for April 2003 to avoid delinking. The words “avoid delink” would mean that at least till 19.4.2003 the link was not snapped.

25. If the petitioner does not pay the additional court fees as per para 9, then the CMP shall stand dismissed. Then the merits of the matter as discussed above would show that no interference under Sec. 115, CPC is possible as per Shiv Shakti Coop.Housing Society, Nagpur v. Swaraj Developers and others, 2003 (2) CTC 564: 2003 (6) SCC 659. If the petitioner pays the additional court fees then the CMP is allowed and the revision is converted to one under Art. 227 of the Constitution of India. Exercising jurisdiction under Art. 227, it is found that the courts below have neither exercised a jurisdiction they do not have, nor have they failed to exercise a jurisdiction which they do have, nor has the exercise of jurisdiction been done in a matter not permitted by law occasioning failure of justice or grave injustice. So stepping in to exercise of supervisory jurisdiction is not called for.

26. The respondent shall provide signals to the petitioner as directed by the courts below within one week. If the respondent does not provide the signals within one week, it is open to the petitioner to approach this court for appropriate direction.

27. Since both the parties have expressed that they will be put to extreme inconvenience if the suit is unnecessarily prolonged, the court below is directed to dispose of the suit within four months from the date of receipt of this order.

Prasad Mathew Prop: ... v. S.C.V Unit Of Sun T....