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Eswara Communications (Vijayawada) v. Msm Discovery Pvt. Ltd.
Factual and Procedural Background
The petitioners, identified as Multi Service Operators, entered into a Subscription Agreement dated 14.9.2012 with the respondent, a Broadcaster/Content Aggregator, for the period from 01.10.2012 to 31.12.2012 after prolonged negotiations. The petitioners received IRD boxes from the respondent on 25.9.2012 (except in Petition No. 833 (c) of 2012) and paid for them on 11.10.2012. An advance payment covering subscription fees for October, November, and December 2012 was made on 14.9.2012. However, the respondent did not activate the IRD boxes, prompting the petitioners to file petitions seeking activation of the decoder boxes, provision of a counter-signed copy of the agreement, and entry into a fresh agreement on the same terms upon expiry of the initial period. The petitioners also requested interim relief for activation of the boxes pending final hearing. The respondent delayed filing a reply but contested the interim matter during the hearing.
Legal Issues Presented
- Whether the respondent is obligated to activate the IRD boxes supplied to the petitioners despite the respondent not having signed the Subscription Agreement.
- Whether the provisions of Section 69 of the Indian Partnership Act, 1932, particularly relating to the registration of partnership firms, apply to the petitioners for activation of IRD boxes.
- Whether the petitioners are entitled to activation of IRD boxes in the absence of valid postal registration certificates or registered partnership firms.
Arguments of the Parties
Petitioners' Arguments
- The parties entered into a Subscription Agreement on 14.9.2012, which included payment of advance subscription fees for three months.
- The IRD boxes were supplied by the respondent but not activated, despite payment and execution of the agreement.
- The petitioners requested activation of the IRD boxes, a counter-signed copy of the agreement, and continuation of the agreement on the same terms after expiry.
- They argued that Section 69 of the Indian Partnership Act is not applicable as the distributor of TV channels includes individuals, groups, firms, or organizations beyond registered partnerships.
- They cited prior tribunal judgments holding that Section 69 does not apply to supply of signals to cable operators.
- The petitioners expressed willingness to submit postal registration certificates where expired.
- The respondent's email after filing the petitions did not dispute execution of the agreement.
Respondent's Arguments
- The Subscription Agreement produced by the petitioners was not signed by the respondent and thus not binding.
- In several petitions, there was no valid postal registration certificate as on the date, affecting entitlement to activation.
- Several petitioners were partnership firms without registered partnership deeds filed, which, according to the respondent, disqualified them from activation under Section 69 of the Indian Partnership Act, 1932.
- The respondent agreed to activate IRD boxes only for petitioners with valid postal registration certificates and objected to activation for unregistered partnership firms citing legal necessity for registration.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Judgment of this Tribunal dated 27.7.2011 in Petition No. 67 (C) of 2009 | Section 69 of the Indian Partnership Act, 1932 is not applicable to supply of signals to cable operators. | Supported the court’s prima facie view that Section 69 does not apply to the present cases involving signal supply. |
| Judgments dated 14.8.2012 in Petition Nos. 50 (C) of 2012 and 51 (C) of 2012 | Section 69 of the Indian Partnership Act, 1932 is not applicable for supply of signals to cable operators. | Reinforced the court’s conclusion that the statutory provision is inapplicable to the petitioners’ claims for activation of IRD boxes. |
Court's Reasoning and Analysis
The court examined the Subscription Agreement dated 14.9.2012, noting that it was signed only by the petitioners and not by the respondent. The respondent challenged the binding nature of the agreement on this basis. The court also considered the respondent’s objections regarding the absence of valid postal registration certificates and unregistered partnership firms among the petitioners, invoking Section 69 of the Indian Partnership Act, 1932.
However, the court relied on prior tribunal judgments that clarified Section 69 is not applicable to the supply of signals to cable operators. It accepted the petitioners’ argument that distributors include a broad category beyond registered partnerships. The court found a prima facie basis to hold that Section 69(2) of the Indian Partnership Act does not apply to these cases.
Balancing these considerations, the court ordered interim activation of the IRD boxes supplied to the petitioners within three days, subject to rights and contentions of the parties and without prejudice to any further orders.
Holding and Implications
The court directed the respondent to activate the IRD boxes supplied to the petitioners within three days from the date of the order.
This interim order allows the petitioners to access the broadcast signals despite the respondent’s objections regarding agreement execution and registration formalities. The order is without prejudice to the parties’ rights and contentions, indicating that the final resolution remains open. No new precedent was established beyond reaffirming the inapplicability of Section 69 of the Indian Partnership Act to signal supply agreements in this context.
Petitioners in these petitions are a Multi Service Operators and the Respondent is a Broadcaster/Content Aggregator as described under the Regulations.
2. Petitioners claimed that after the long process of negotiations between the parties, the commercial terms of the Subscription Agreement were settled and the parties entered into a Subscription Agreement dated 14.9.2012 for the period 01.10.2012- 31.12.2012.
3. On 25.9.2012, the IRD boxes were supplied to the Petitioner in all matters except in Petition No. 833 (c) of 2012 and the payment for IRD Boxes was also made to the Respondent on 11.10.2012. According to the Petitioner, an advance of Subscription Amount of three months for the months of October, 2012, November, 2012 and December, 2012 was paid on 14.9.2012 at the time of execution of the agreement but the Respondent has not yet activated the IRD boxes. Therefore, the Petitioner has filed these petitions inter-alia for the following reliefs:-
(i) Direct the Respondent to activate the decoder boxes of its channels issued to the Petitioner;
(ii) Direct the Respondent to provide counter signed copy of the Agreements.
(iii) Direct the Respondent to enter into a fresh agreement with the Petitioner from the date of expiry of the period of three months on the same terms and conditions.
4. In its interim prayer, the Petitioners requested to direct the Respondent to activate the decoder boxes of its channels pending final hearing in the matter.
5. The Respondent asked time to seek final instructions and time to file a short reply. When the matter was called for hearing on the interim matter on 23.11.2012, the Respondent did not file the reply, however, he argued on the interim matter.
6. Mr. Jayant Mehta, learned counsel appearing on behalf of the Petitioner brought to our notice the copy of the agreement signed on 14.9.2012. The agreement shows the document number as well as period of validity starting from 01.10.2012 to 31.12.2012. The validation form shows the monthly amount to be paid to the Respondent.
7. However, Mr. A. C. Mishra, learned counsel appearing on behalf of the Respondent pointed out that these agreements have not been signed by the Respondent. It is noticed that these agreement have been signed only by the Petitioners. The counsel has shown the payment of subscription amount dated 14.9.2012 for three months by way of post-dated cheques of 31.10.2012, 30.11.2012 and 31.12.2012 for an amount of Rs.54,836/- in Petition No 827 (C) of 2012. This paper is at page 31 of the paperbook, which shows that the distributor of the Respondent has received the same. Similarly a document dated 25.9.2012 has been shown which shows that IRD boxes has been supplied to the Petitioner where the distributor of the Respondent as well as the Petitioners have signed.
8. The Petitioner has reminded the Respondent on 5.11.2012 wherein the Respondent was requested to activate the IRD boxes as well as return the counter-signed copy of the agreement signed between the parties on 14.9.2012.
9. The Respondent was reminded again on 12.11.2012. The Respondent has produced a chart before us about these petitions. We may reproduce the letter dated 5.11.2012 as under:- S.No. Petition No. Nature of Firm Status of P&T Certificates
1. 827 (C) of 2012 Sole Proprietary Expired on 31.7.2012
2. 828 (C) of 2012 Partnership Expired on 13.6.2012
3. 829 (C) of 2012 Sole Proprietary Expired on 15.7.2012
4. 830 (C) of 2012 Sole Proprietary Valid till 2.3.2013
5. 831 (C) of 2012 Sole Proprietary Valid till 16.3.2013
6. 832 (C) of 2012 Partnership Expired on 27.10.2012
7. 833 (C) of 2012 Partnership Valid till 18.6.2013
8. 834 (C) of 2012 Partnership Expired on 09.10.2012
10. Mr. A.C. Mishra, learned counsel contends that the subscription amount has not been signed by the Respondent, therefore, the agreement copy produced by the Petitioner is not binding on it. In Petition No. 827 (C) of 2012, No. 828 (C) of 2012, No. 829 (C) of 2012, No. 832 (C) of 2012 and Petition No. 834 (C) of 2012, there is no valid postal certificate as on date. Similarly, the Petitioners in Petition Nos. 828 (C) of 2012, 832 (C) of 2012,
833 (C) of 2012 and 834 (C) of 2012 are the partnership firms but registered partnership deal has not been filed. Therefore, the Petitioners are not entitled for the activation of the IRD boxes.
11. Mr. Mehta, learned counsel has pointed out that although these petitions has been filed on 19.11.2012, the Respondent has chosen to send an e-mail to the Petitioner on 22.11.2012 after filing of these petitions. This e-mail does not mention anywhere that the agreement between the party has not been executed. The Respondent has raised an issue of Postal Registration Certificate for the first time. Mr. Mehta, submits that he is ready to submit the Postal Registration Certificate immediately to the Respondent wherever period of registration has expired.
12. Mr. Mishra, learned counsel later agreed that the Respondent will activate the IRD boxes of the Petitioners in the petitions having valid Postal Registration Certificates. However, he has a strong objection for activation of those IRD boxes wherever the partnership firm has not been registered as according to him, it is necessary that partnership firm should be registered as required under Section 69 of the Indian Partnership Act, 1932.
13. Mr. Mehta, has brought to our notice that Section 69 of the Indian Partnership Act, 1932 is not applicable in these cases, as the distributor of TV channel means any person including an individual and group of persons, public or body corporate firm or any organization.
14. Mr. Mehta has also brought to our notice a judgment of this Tribunal dated 27.7.2011 in Petition No. 67 (C) of 2009 and in judgement dated 14.8.2012 in Petition No. 50 (C) of 2012 and 51 (C) of 2012 wherein it was held that Section 69 of the Indian Partnership Act is not applicable for supply of signals to the cable operators.
15. In view of our clear findings in various judgements, prima-facie, I am of the view that Section 69 (2) of the Indian Partnership Act is not applicable in these cases, where the Petitioners seek signals of the Respondent.
16. Therefore, in view of the aforementioned reasons by way of interim order, it is directed that Respondent will activate the IRD Boxes supplied to the Petitioner within a period of three days from the date. However these orders will be without prejudice to the rights and contentions of parties and is subject to any other or further orders. .... (P.K. Rastogi) Member HKC/
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