ORDER
Moksh Mahajan, Member
1. This is a case of dispute between two parties involving non-performance of the contractual obligations. One Mr. K. Bikram Sir.gh (applicant in this case) submitted a proposal to Doordarshan for a story based TV serial entitled “Kahin EK Gaon” to be telecast in 13 episodes of half-an-hour each. The story of the said TV serial was based on the life of a world renowned social reformer and
environmentalist Padmashri Anna Saheb Hazare of District Ahmednagar of Maharashtra. Doordarshan sanctioned the said TV serial ‘Kahin Ek Gaon’ for telecast on the main channel in the category of sponsored programmes in 13 episodes. The applicant proceeded to produce the serial with the help of TV Artists, namely, Pankaj Kapur, Neena Gupta, Rajendra Gupta, Lahiri Singh, Vinod Nagpal, Shailinder Goel, M.K. Raina, etc. After the plot of the TV serial was approved by Doordarshan, a slot of 9.30 p.m. every Wednesday commencing from 20.12.1995 was granted for the telecast of the said serial. The applicant had already completed production of ten episodes of the said TV serial at the time of commencement of the telecast. The fixed telecast fee of Rs. 2.40 lakhs per episode was payable to the Doordarshan and the FCT available per episode was 90 seconds. For marketing its serial the applicant entered into marketing agreement with one M/s. Pakun Advertising, Delhi. As the said party who was a new entrant in this line of business, it could not procure enough commercials to utilize the entire FCT. The said agreement was terminated by M/s. Pakun Advertising on 17.1.1996 by the end of fifth episode. It surrendered the entire unutilized banked FCT amounting to 350 seconds against 9.75 lakhs. At the stage the applicant submitted a proposal to the respondent viz. M/s. Plus Channel (India) Limited which was stated to be discussed with R-2 and R-4, the functionaries of respondent No. 1 and arrived at an understanding with the applicant. The respondents agreed to pay the advance payment of Rs. 2.70 lakhs per episode for the remaining three episodes.
2. The respondents agreed to pay advance payment of Rs. 2.70 lakhs per episode for the remaining three episodes and also telecast fee of Rs. 2.40 lakhs to Doordarshan. The respondent in turn had exclusive marketing rights with banked FCT of 350 seconds from 6th weekly episode onwards. The banked FCT of 350 seconds were to be purchased at the rate of Rs. 20,000/- per ten seconds. The arrangement was, however, not adhered to and the advance payment as envisaged was not made. The
respondent on its part made the following payments:
3. For having suffered a loss on account of non-payment of the amount as agreed to and delay in payment of the part payment, the applicant has claimed the compensation of Rs. 26,00,200/- in an application filed under Section 12B of the Monopolies and Restrictive Trade Practices Act, 1969 [hereinafter referred to as the Act], the details of which are given below :
In its reply in pursuance to the notice issued by the Commission, the respondents refuted all the allegations levelled against it. It is the contention of the respondents that the performance of the serial was so poor that the banked FCT could not be sold and had to be given away as bonus spots and that too in the last episode. The arrangement between the parties was that the respondent would pay the telecast fee of Rs. 2.40 lakhs in addition to 1.50 lakhs per episode. As per arrangement, there was no liability to pay advance amount of Rs. 4.05 lakhs i.e. 50% of the
total production cost of three episodes as alleged. Even then the respondents paid a sum of Rs. 12.00 lakhs to the applicant incurring losses in marketing the serial. Therefore, in absence of any agreement to make the payment as stated, there is no further liability on the part of the respondent to make good the losses, if any, incurred by the applicant.
On completion of pleadings, the following issues were framed :
(1) Whether the respondents have been or are indulging in the restrictive/ unfair trade practices as alleged in the application ?
(2) If so, whether such restrictive/unfair trade practices are prejudicial to public interest or affecting the interest of consumer or consumers generally ?
(3) Whether any loss or damage has been caused to the applicant due to the above practices and whether the applicant is entitled for compensation ?
(4) Relief, if any.
4. Affidavit and counter affidavit were filed by way of evidence and the witnesses on both sides were cross-examined.
5. In the present case, the dispute between the parties revolves around the non-performance of the agreement by the respondent resulting in stated loss to the applicant. Admittedly, there is no contract in writing enumerating the complete terms and conditions. As per the material placed on record, the arrangement between the parties can be gathered from the proposals offered and conditions accepted. These are as under :
“PLUS PROPOSAL
(a) Exclusive marketing rights.
(b) Banked FCT can be purchased @ 20,000/- per 10 seconds – payable 6 -days after completion of banked FCT.
(c) Plus to place the contracts with Doordarshan
Pay the telecast fee to Doordarshan
Pay an advance of 50% against the total production cost of Rs. 2,70,000/- (gross) not exceeding 3 episodes at a time, the balance 50% after 60 days of telecast.
This advance payment will be made 7 days prior to actual production of the episodes.
Revenue generated over the telecast fee and the production cost (2,40,000/- + 2,70,000/- = 5,10,000/-) will be divided equally between Plus channel and the producer.
Plus further marketing fee and promotional costs.
Producers to pay for direction charges.”
The respondent on its part confirming the right of exclusive marketing made it subject to the detailed terms and conditions to be followed in the formal agreement, which reads as under :
“This is in reference to our discussions with you and further to our proposal given to you for the Exclusive Marketing of your serial, “Kahin Ek Gaon”.
We confirm that we shall be taking up the marketing of this serial on an exclusive basis from the 6th episode, i.e. from 24th January, 1996.
The above is subject to the detailed terms and conditions which follow in the formal agreement.”
The letter dated 17.4.1996 (RW1/5 – Fax Message – denied by the applicant) sent by the respondent to the applicant reads as under :
“This has reference to the discussions we had on the above. This is to put on record that Plus Channel had been assigned exclusive rights to market the commercial time (FCT) available with the programme for 8 episodes from January 24th to March 27th, 1996, on the following terms and conditions :
(a) Plus channel will bear the telecast fee payable DD for all the above episodes.
(b) Plus Channel will pay to you a sum of Rs. 1.50 lakhs per episode i.e. a total of Rs. 12 lakhs for 8 episodes after deducting the TDS.
(c) The banked commercial time accrued from the earlier episodes, if saleable, could also be sold at a reasonable rate.
That status of payment against the production cost is as under :
Balance payment of Rs. 4.50 lakhs for the remaining 3 episodes is expected to be made by end of this month.
We shall also revert to the status of banked FCT shortly.”
The above letter dated 17.4.1996 is stated to have been responded by the applicant (denied by the applicant) in following terms :
“Thank you for your Fax dated April 17, 1996 regarding the payment schedule for ‘Kahin Ek Gaon’.
You had indicated that balance payment of Rs. 4.50 lakhs for the remaining three episodes will be made by the end of April, 1996. Today being April 30, I would request you to send the balance payment at the earliest by speed post.
Please also send me the tax deduction certificates for the payments already
made.
You had also promised to revert regarding payment for banked FCT.”
6. In its cross-examination the respondents' witness denied having fabricated
the documents dated 17.4.1996 and the matter was left at that stage. No further attempt was made to prove the authenticity of both the documents RW1/5 and RW1/6. The payment of Rs. 2.40 lakhs towards the telecast fee for 8 episodes and a sum of Rs. 1.50 lakhs per episode towards the cost of production finds its confirmation in the various letters addressed by the applicant to the respondent. The other correspondence available on record in respect of the advance payment and FCT has not been categorically admitted by the respondent. While admitting the receipts of the letters, the contents have been denied. Thus, the area of dispute narrows down to two items, namely, the advance payment to be made on behalf of the respondent and the FCT, which is stated to be marketed at Rs. 20,000/- per 10 seconds. Undeniably no advance payment has been made to the applicant despite his insistence in his various letters to the respondent. Though there is no confirmation from the respondent, the admission of letter of the applicant in his respect is a pointer to the existence of an understanding between the parties for payment of amount in advance. Even the other payments were delayed and were released only after repeated discussions with the respondent.
7. Regarding FCT we find that as per letter dated 20.12.1996 (Ex. AW1 /23) addressed to the applicant by Assistant Controller of Sales, Doordarshan Commercial Service, New Delhi the utilized FCT was for 1125 seconds. This document though denied by the respondent has been authenticated by the seal and signature of the Programme Executive, Doordarshan Kendra, New Delhi. This is also supported by the gross amounts earned from various parties in regard to their ads appearing on TV.
8. As per the details furnished by the respondents, the FCT utilized was at 775 seconds yielding revenue of 17,01,000/-. Though the aforesaid documents has been denied by the applicant as in case of others, no attempt has been made to disprove the statement furnished by the respondent. Considering the utilization of the FCT as certified by the Doordarshan, there
is also no information brought on record showing the total revenue earned by the respondent. Surrender of some of the FCT as bonus spot has also not been denied on the part of the applicant. The rating of the serial coupled with the gross revenue stated to have been received from encashment of FCT by the respondent show that the serial was not a commercial success. Nonetheless, the respondents committed to pay to the applicant
a sum of Rs. 19.20 lakhs i.e. a sum of Rs. 7.20 lakhs towards telecast charges for three episodes @ Rs. 2.40 lakhs per episode and a sum of Rs. 12.00 lakhs towards cost of production for eight episodes @ Rs. 1.50 lakhs per episode. In view of the understanding to pay the amount in advance by the respondent, it would be fair to award an interest of Rs. 80,000/- in lumpsum. Thus in total the applicant is entitled to a sum of Rs. 8.00 lakhs towards compensation. Compensation for mental agony is not allowed in view of the judgment rendered by the Hon’ble Supreme Court in case of Ghaziabad Development Authority v. Union of India and Anr., reported in II (2000) CPJ 1 (SC)=IV (2000) SLT 654=2000 (5) SCALE 59.
9. In absence of any Articles of Association and the Resolution limiting the liability of the Managing Director and Vice-President of the Company having been filed, R-2 and R-3 are also liable to make the payment to the applicant. Accordingly, the respondents are directed to pay a sum of Rs. 8.00 lakhs (Rupees eight lakhs only) to the applicant within eight weeks from the date of receipt of the order and file an affidavit of compliance within two weeks thereafter.
10. The compensation application filed under Section 12B of the Act is allowed in terms of the above. There shall be no order as to the costs.