JUDGMENT
Madan B. Lokur, J.
1. The Petitioner, in a petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) has prayed for an interim measure, namely, a direction to the Respondent to “immediately telecast DD Sports channel as a free to air channel”. Presently, the DD Sports channel is an encrypted or a pay channel.
2. The Board of Control for Cricket in India (BCCI) entered into a contract with the Respondent on 25th :- OMP 293/2000
September, 1999 in terms of which, the Respondent was given exclusive and full terrestrial and satellite rights and licenses to telecast all domestic and international cricket matches played in India which are conducted by the BCCI for the term of the contract, that is till 30th September, 2004.
Subsequently, towards the end of January, 2000 the Respondent invited bids for marketing of air time in India and overseas of the cricketing events conducted by the BCCI in India for the period from 1st January, 2000 to 30th September, 2004. The details for the bids were included in Part I of the tender enquiry.
3. The Petitioner, being the successful bidder, its bid was accepted by the Respondent by a letter dated 4th February, 2000. Paragraph 1 of this letter stated as follows:-
“The Rights comprise India (Air Times Sales) rights as specified in Part-I of the Tender Enquiry”.
4. Subsequent to the acceptance of the bid of the Petitioner, an agreement was entered into between the parties on 17th February, 2000. Clause 2 of the recitals to this agreement reads as follows:-
“And whereas pursuant to the aforesaid Agreement, Prasar Bharati invited bids for the exclusive marketing of Air Time in the Territory for the Cricketing Events on the terms and conditions contained therein and the same is annexed hereto as Annexure A.”
5. While Annexure A has not been attached to the list of documents filed in Court, but it was submitted by learned counsel for the Petitioner that this annexure is Part I of the tender enquiry referred to above. This was not disputed by the learned Additional Solicitor General appearing for the Respondent. So, I assume that Annexure A to the agreement dated 17th February, 2000 is Part I of the tender enquiry.
6. Clause 4 of the recitals to the agreement dated 17th February, 2000 reads as follows:-
“AND WHEREAS Prasar Bharati accepted the Bid Offer by its acceptance letter dated 4th February,2000 for the exclusive marketing of Air Time in the Territory for the consideration and on the terms and conditions contained therein. The said acceptance letter is annexed hereto as Annexure B.”
7. Taking these recitals into account, it is quite clear that Part I of the tender enquiry is to be read as a part of the agreement dated 17th February, 2000.
8. The bone of contention between the parties relates to the interpretation of Clause 1.2 of Part I of the tender enquiry. This Clause reads as follows:-
“All the matches will be telecast exclusively on Doordarshan Channels, viz. DD-Sports/Doordarshan Network in India. The test matches will be telecast live only on DD-Sports (a Satellite Channel) with a limited two hour live telecast on DD-1 (the National Channel which is both terrestrial and satellite). One hour of highlights of these test matches will also be telecast on the National Channel, DD-1. One day International matches will be simulcast live on DD-1 (National Channel) and DD-Sports Channel. Prasar Bharati at present has a reach of 70 million households. DD-1 telecasts are through the INSAT system of satellites (free to air) and the telecasts on the Sports Channel are through the PAS-4 satellite in digital mode and on INSAT system satellite in Analogue mode (free to air).”
9. Sometime in September, 2000, the DD Sports channel became an encrypted or a pay channel. The grievance of the Petitioner is that it should continue to remain free to air as per Clause 1.2 of Part I of the tender enquiry. It is to achieve this object that the present petition has been filed.
10. Learned counsel for the parties made their submissions on 21st December, 2000 when judgment was reserved.
11. The learned Additional Solicitor General appearing for the Respondent bowled a few googlies by way of preliminary objections. It is not necessary to decide these preliminary objections because, on merits, I am in agreement with the contentions of the learned Additional Solicitor General. However, for the record, the preliminary objections urged were that before entertaining a petition under Section 9 of the Act, the Court has to be satisfied that the Petitioner has a “manifest intention” to have the alleged disputes referred to an arbitral tribunal. Reliance for this was placed on Sundaram Finance Ltd. v. NEPC India Ltd., . According to the learned Additional Solicitor General, the pleadings did not manifest such an intention on the part of the Petitioner, and therefore, this petition should not be entertained.
12. It was also contended that when the DD Sports channel was encrypted or converted into a pay channel, the Respondent had entered into a distributor agreement with Modi Entertainment Network Ltd. Consequently, if the relief prayed for in the petition is granted, Modi Entertainment Network Ltd. would be directly affected. It was, therefore, contended that the petition should be dismissed for the non-joinder of a necessary party.
13. It was also contended that the arbitration clause in the agreement dated 17th February, 2000 postulates that the disputes should first be settled by mutual conciliation and if that is not possible then they may be referred to arbitration. According to the learned Additional Solicitor General, there is nothing on the record to suggest that mutual conciliation was ever attempted by the Petitioner. Therefore, it was submitted that the arbitration clause could not be invoked by the Petitioner and if the arbitration clause cannot be invoked, then a petition under Section 9 of the Act ought not to be entertained.
14. It was finally submitted that the Petitioner has not fulfillled its obligations under the agreement dated 17th February, 2000 and the petition under Section 9 of the Act is only to deflect the main issue. The grant of an injunction being an equitable relief and discretionary, no latitude should be shown to the Petitioner in view of its conduct.
15. Of course, learned counsel for the Petitioner did respond to all these preliminary objections; but, since I am deciding against the Petitioner on the merits of the controversy, I do not think it necessary to go into these preliminary objections.
16. A bare reading of Clause 1.2 of Part I of the tender enquiry indicates that it is in two parts. The first part of this Clause is framed in the future tense. This indicates what the Respondent intends to do. The first part of Clause 1.2 undoubtedly makes certain representations. The second part of the Clause makes only statements of facts. These statements of fact, to my mind, do not indicate any intention of the Respondent, nor can they be said to constitute any representation.
17. The first such statement of fact is that the Respondent at present has a reach of 70 million households. The next statement of fact is that DD-1 telecasts are through the INSAT system of satellites (free to air). It is also stated as a matter of fact that telecasts on the DD Sports channel are by two modes, namely, through the PAS-4 satellite in digital mode and on the INSAT system of satellites in the analogue mode (free to air). It may be mentioned, en passant, that learned counsel for the Petitioner informed me that on the DD Sports channel, the Respondent has stopped telecasts through the INSAT system of satellites. The telecast on the DD Sports channel by the Respondent is now entirely through the PAS-4 satellite in digital mode.
18. The controversy in the present case is simply this: Is the Respondent obliged to continue telecasts on the INSAT system of satellites or on the PAS-4 satellite on a free to air basis or is it entitled to convert the DD Sports channel into an encrypted channel or a pay channel during the currency of the agreement dated 17th February, 2000?
19. Television broadcasting in India is through three modes. The most common is the terrestrial telecast where the signals are sent through towers (called earth stations) built virtually throughout India. Terrestrial telecast has a very wide range and it is said to cover about 70 million homes.
20. The second mode of telecasting is through satellites. It is a matter of common knowledge that we have sent into orbit several INSAT satellites. Television programs are beamed to these satellites and the signals are then sent back to earth covering a large area (called a footprint). The signals can be received directly by a television viewer if he has a dish antenna. Otherwise, a television viewer can join a network where a cable operator has a dish antenna through which he transmits the signals to several homes through a cable network. The receipt and transmission of such signals is free to air, that is to say, that the television viewer does not have to pay anything to receive the signals – he only requires a dish antenna (or otherwise he or she pays a subscription to his/her cable operator for the services rendered by him). It is believed that satellite television is available in about 30 million homes. DD-1 telecasts are made both terrestrially as well as through the INSAT system of satellites.
21. The third mode of telecast is where the signal received from a satellite is encrypted. To unscramble the signal, the television viewer (or the cable operator) needs a decoder. This is what the DD Sports channel began doing in September, 2000.
22. For some reason which could not be explained to me, picture quality on the encrypted channel (also referred to as a pay channel), is far superior. This may be, perhaps, because the telecast is in the digital mode and not in the analogue mode. However, this is not really relevant. In any case, it appears that merely having a dish antenna is not enough to receive signals in an encrypted or a pay channel. It is also necessary to have a decoder.
23. The submission of learned counsel for the Petitioner was that given this matrix of facts, the Respondent had given a clear representation in Clause 1.2 of Part I of the tender enquiry that telecasts on DD-1 will be through the INSAT system of satellites on a free to air basis and on the DD Sports channel through the PAS-4 satellite or the INSAT system of satellites on a free to air basis. It was submitted that the Petitioner took this into consideration while giving its bid. Midway through the contract, the Respondent cannot convert the free to air telecast on the DD Sports channel into an encrypted or a pay channel. It was alleged that this conversion has drastically reduced viewership because it is not everyone who is willing to subscribe to a pay channel. It was contended that while about 30 million homes receive telecasts through the satellite channels, hardly 6 to 10 million homes receive telecasts through the encrypted or a pay channel. This reduced viewership has affected the business of the Petitioner. Learned counsel for the Petitioner referred to letters from various advertising agencies to contend that the conversion of the DD Sports channel into a pay channel has resulted in reduced audiences making it difficult for the advertisers to seriously consider booking advertisements on this channel.
24. It was also contended that in the agreement between the BCCI and the Respondent, it was clearly laid down that the Respondent could not assign, sublet or lease the signals to any third party. Frankly, this argument is liable to be rejected summarily because it is really not the concern of the Petitioner if there is any violation of the agreement entered into between the BCCI and the Respondent. This is entirely the look out of those contracting parties. The Petitioner cannot base any contention on this ground.
25. No authoritative figures were placed before me to indicate the viewership of the DD Sports channel before and after it became an encrypted or a pay channel. Such figures would have proved the correctness or otherwise of the contention of learned counsel for the Petitioner that the number of people watching DD Sports has reduced after it became an encrypted or a pay channel. On the other hand, such figures may also have proved that because of the improved picture quality, the number of people watching the DD Sports channel has increased. In any case, the viewership of the DD Sports channel cannot, to my mind, be determinative of the interpretation of Clause 1.2 of Part I of the tender enquiry.
26. As I read Clause 1.2 of Part I of the tender enquiry, it appears to me that no representation is made to the Petitioner to the effect that telecasts on the DD Sports channel will continue to be free to air. What is told to the potential bidders is a statement of fact, namely, that the Respondent has a reach of 70 million households. There is no representation that this reach of 70 million households will increase or decrease. It is only a statement of fact indicating the present reach of the Respondent.
27. Similarly, it has also been stated as a matter of fact that telecasts on DD-1 are made in a particular manner and telecasts on the DD Sports channel are made in another manner. There is no representation that this situation will continue forever or that this situation will not change. The Respondent has not put a freeze on the position as it existed on the day of the agreement between the parties. I can understand if a promise was made by the Respondent and it did not keep its promise. But that is not so with regard to the last two sentences of Clause 1.2 of Part I of the tender enquiry. Clearly, these two sentences do not (or even purport to) make any representation to the Petitioner about the future course of conduct of the Respondent. These two sentences merely state facts existing on a particular date. These facts were made known to all the bidders to enable them to make informed bids. These facts were not given to the bidders with an understanding that they are static and immutable. Clause 1.2 of Part I of the tender enquiry cannot be read in this manner. Any fact situation can change over a period of time and it has changed in this case. If the Petitioner has suffered financially because of this change in facts, it has only to ask itself why. The Petitioner could have bound down the Respondent to keep the DD Sports channel free to air and not convert it into an encrypted or a pay channel, but it did not do so.
28. Learned counsel for the Petitioner laid great stress on the second paragraph of a letter dated 5th September, 2000 sent by the Respondent to the Petitioner. This letter reads as follows:-
“This is to bring to your kind notice that Doordarshan has entered into an agreement with M/s. Modi Entertainment Network Limited for promoting distribution and marketing of Doordarshan Sports Channels on Cable System. For the purpose Doordarshan signals for Sports Channel would be encrypted very soon. The encryption services should be starting shortly. This will ensure better quality signals and delivery system of Doordarshan Sports Channel, before Sports Channel starts telecast of Olympics w.e.f. 15/09/2000.
However, this is to assure you that all the terms and conditions regarding the telecast of BCCI cricket matches as per the agreement entered into with you on 17/02/2000, will get precedence and overriding priority.”
29. Quite naturally, the second paragraph of the letter has to be read in the context of the first paragraph. If so read, it is quite clear that all that the Respondent wishes to convey to the Petitioner is that notwithstanding encryption of the DD Sports channel and the telecast of the Olympics, the agreement dated 17th February, 2000 will get precedence and overriding priority. The second paragraph of the letter dated 5th September, 2000 cannot be read, by any stretch of imagination, to mean that the DD Sports channel will be encrypted for all purposes other than for cricket matches covered by the agreement dated 17th February, 2000. In any case, the occasion for reading the second paragraph of the letter dated 5th September, 2000 in such a convoluted manner will not arise in view of the findings that I have arrived at above.
30. The contentions of the Petitioner have, therefore, to be rejected.
31. It may be mentioned that the learned Additional Solicitor General did contend that in the event of any contradiction between the tender enquiry and the agreement between the parties, it is the agreement dated 17th February, 2000 which will prevail. There is nothing in the agreement, according to him, which compels the Respondent to telecast free to air on the DD Sports channel. However, this contention also need not be gone into because the primary contention raised by learned counsel for the Petitioner is, with respect, untenable.
32. Under the circumstances, I am of the view that no interim measures can be granted in favor of the Petitioner. However, it is made clear that in case the Petitioner invokes the arbitration clause and the alleged disputes between the parties are arbitrated upon, any expression of views herein will not bind the arbitral tribunal.
33. The petition is dismissed. No costs.