A. Gopal Reddy J. - (1.) THIS Civil Miscellaneous Appeal is filed under Section 37(l)(a) of the Arbitration and Conciliation Act, 1996 (for short, "the Act"), against the order passed in Arbitration O.P.No.754 of 2011, dated 16.09.2011, by the Chief Judge, City Civil Court, Hyderabad, whereunder the petition filed by the respondent/petitioner therein for grant of interim injunction restraining the appellant/respondent therein from acting in any way in breach of clauses 2(A) & 2(B) of the Agreement, dated 16.10.2004 etc., was partly allowed.
(2.) THE relevant facts, which are necessary for disposal of the present appeal, are briefly stated as under:- M/s.Visakha Industries Limited, a company incorporated under the Companies Act, 1956 (hereinafter referred to as "the Company"), respondent herein, manufactures Asbestos Cement Sheets, Yarn and Building Boards. THE Hyderabad Cricket Association (hereinafter referred to as "Association"), appellant herein, is a registered society and is an affiliated member of the Board of Control for Cricket in India. THE Association has been established for promoting, organizing, managing and conducting game of Cricket in Hyderabad and for holding various tournaments in cricket including those of Board of Cricket Control in India (BCCI) besides International Cricket matches held in Hyderabad. THE Association proposed to construct an International Cricket Stadium on all that of its leased land admeasuring Ac.16-00 guntas situated at Tarnaka-Uppal Road. THE Association had been making efforts to find a corporate body willing to sponsor or part finance the construction of the new Stadium and in return the Association offers to such party in-Stadium advertising rights and certain other privileges and benefits. It inter alia engaged a third party to act, on commission basis, as agent to persuade a reliable party to come forward and accept the Association's offer as aforesaid. On termination of the contract with the said third party, the Association approached various companies including M/s.Visakha Industries Limited and after discussions and negotiations, an irrevocable agreement was arrived, which was reduced into writing on 16.10.2004. THE relevant clauses of the said agreement are as follows:- "(A) THE petitioner agreed to pay Rs. 6.5 crores to the respondent for the exclusive vesting in the petitioner of the irrevocable right to name the said Stadium as 'Visaka International Cricket Stadium' and Advertisement, publicity and display rights at the places specified the company's products, name, logo, trademarks and promotional materials and devices. (i) An extent of 9,000 running feet in the entire outer rim advertising space of the stadium shall be reserved exclusively for Corporate advertising and publicity and display purposes; out of which 1200 running feet divided into 400 running feet in front of the pavilion on the structure of the stadium's south stand and 200 running feet each on the structure of the stadium's East and West stands, and space on the electronic Score Board shall be available exclusively for advertising and publicity and display purposes. (ii) THE entire rooftop of the stadium shall be available exclusively for advertising and publicity and display purposes. (iii) Two permanently fixed Runner Boards of 20 running feet length and 3 feet width size each, i.e., a total of 40 running feet displayed between 5 to 10 feet outside the boundaries in the third man region on either side of the wicket shall be available exclusively to the company or its nominees for advertising, publicity and display purposes. (iv) THE name of the stadium after 'Visaka International Cricket Stadium' shall be displayed at the main gates at the cost of respondent and two big hoardings shall be placed above the East and West sides. (v) A balloon at the appropriate place and height in the stadium for advertisement shall be allowed to be displayed at the cost of petitioner and a ball will be allowed to be displayed in metal or other medium as found feasible by the company at the location and height mutually decided. (b) At clause (A)(ix), it is specifically stated that "for the removal of doubts, it is expressly agreed and stated here that the places/space and facilities aforesaid shall be reserved for the exclusive use of the company and at all times irrespective of whether there is or there is no any match or other event being held or conducted or taking place in the said stadium or any part thereof. (c) Certain privileges are listed out available to the petitioner company under clause-B. they include allowing free of charge (4) air-conditioned corporate boxes kept in good maintenance by the Association bearing Box Nos.6 and 7, 10 and 12; the association shall give the petitioner 150 VVIP complimentarty passes free of cost in the main Pavilion of the South Stand for every match taking place in the stadium; 100 tickets of assorted denominations sold for the match will be offered on right to first refusal basis to the company for purchase at the rates applicable to for the given match; the company shall be allowed free of cost (5) Corporate Memberships in the Club proposed to be established by the Association at the stadium; 10 VVIP car parking slots shall be allotted to the company, free of cost; the company shall have the right to use, free of charge, the stadium for two full days each year with electricity and water facilities for the company's corporate and social purposes and the representatives or nominees of the petitioner company making use of the aforesaid facilities shall do so without violating the association's rules and regulations. (d) At clause-6, the association had undertaken certain responsibility on its part, viz., that it will not insist for additional funds to be provided by the petitioner which shall keep the petitioner company informed regularly about the development of the construction, securing and confirming the insurance coverage. THE important clause is sub-clause (v) in Clause-6 which reads, "in the event the Association fails to provide to the company in any year during the currency of this Agreement advertisement and publicity and display place/space and /or any one or more of the facilities/privileges/ benefits aforesaid, the Association shall be liable to pay to the company liquidates damages (not amounting to penalty) an amount equal to six times the consideration paid by the company to the association under this agreement." Clause-8 demonstrates the following. THE petitioner shall have the right to assign, lease or sublease any of the advertisement or publicity or display places/spaces as also the spaces of the four corporate boxes to any party or parties, provid4ed that such assignment or licence etc. is not in conflict in any manner whatsoever with any of the sponsorships or arrangements made by the association with ICCI/BCCI for the matches; the association shall kept the petitioner informed at all times, the various arrangements with regard to the advertisements, publicity, display and sponsorship contract etc, the association has or enters with third parties so as to facilitate the company in its planning of allotment of spaces for its own use in terms of these covenants. Clause- 10 had provided the exclusive ownership on the association only and not on the company. Clause-015 provides settlement of any dispute by appointment of three arbitrators in accordance with the provisions of Arbitration and Conciliation Act, 1996 and to be held at Hyderabad. In pursuance of the said agreement, the Company invested 4.32 crores. Subsequently, the parties negotiated to rename the International Cricket Stadium as "Rajiv Gandhi International Cricket Stadium" in view of the proposal from the Government which is reflected in the letter, dated 10.11.2005, written by the Association limiting the contractual consideration with the company to the extent of the amount spent i.e., Rs 4.32 crores in full and final settlement of the contract and to continue the existing terms and conditions as mentioned in the contract, dated 16.10.2004, and the proposal to effect variance of the terms of the said Contract shall be by way of a supplemental Agreement. THEreafter, both the parties mutually agreed and the same was informed by the Association in its letter, dated 25.04.2006, noting the points of agreement viz., shifting of name of the South end to the North End to be called as Visaka End, and the playing grounds to be hereafter called as Visakha Cricket Grounds in all future correspondence and to be displayed inside on the south side of the Pavilion, besides the change of name of Visaka Stadium to Rajiv Gandhi International Cricket Stadium, which has been effected and all other facilities and areas of sponsorship agreed to remain the same. While so under the guise of an alleged arrangement with BCCI vis-a-vis IPL, the Association issued a communication, dated 21.04.2008, asking the Company to forego their rights and privileges which were available to them under agreement, dated 16.10.2004, which is nothing but an attempt to wriggle out the contractual terms and conditions. THEreby, the company filed 0. P.No.689 of 2008 under Section 9 of the Act to protect its rights and in the said O.P. obtained an interim injunction in I.A.No.1385 of 2008, dated 19.04.2008, restraining the Association from acting in any way in breach of clauses 2(A) & 2(B) of the Agreement, dated 16.10.2004, denying the exclusive irrevocable rights of the Company and its nominees for advertisement of their product name, logo, trademark, promotional material and devices as well as the enjoyment of privileges/benefit in the nature of use of four air conditioned corporate boxes in the Stadium along with rights, privileges, benefits, identical to those attached to similar corporate boxes along with entry and exit rights in Visakha Cricket Ground, Rajiv Gandhi International Stadium at Uppal during DLF Indian Premier League (DLF-IPL) matches held between 18.04.2008 and 01.06.2008, which has later became final. In view of the orders passed in O.P.No.689 of 2008, the Association in its letter, dated 19.04.2008, had come forward to honour their commitment in letter and spirit under the agreement, dated 16.10.2004, to which the Company agreed to the said offers in its letter, dated 21.04.2008. When the Association filed a counter in the said O.P. with false and pretentious averments, with regard to the rights of the Company, it served a notice on 08.10.2010 to the Association invoking the arbitration clause and appointed Mr.M.R.Vikram, Partner, M/s.M.Anandam & Co., as an arbitrator on its behalf for resolution of disputes taking recourse to the provisions of the Act and requested the Association to nominate an arbitrator on its behalf so that appropriate steps for appointment of presiding Arbitrator can be taken by the parties. In spite of service of notice, the company filed A.A.No.26 of 2011 under Section 11(6) of the Act seeking appointment of the arbitrator for resolution of the dispute, which was allowed by this Court appointing Dr. Justice Motilal B.Naik, as arbitrator to decide the disputes relatable to the agreement, dated 16.10.2004. In view of the plea taken by the Association that it terminated the agreement by issuing a notice, dated 16.07.2011, after filing the application, both the parties chosen Justice B.Subhasan Reddy, Former Chief Justice of Madras and Kerala High Court as a third and presiding arbitrator. While the matter stood thus, the Association sent a communication on 07.03.2011 informing the company that as per the agreement the Company had with the Association, the IPL matches are not covered by it. THErefore, the company is required to buy the Corporate Box, if they so desire. In acknowledgment of the said letter, the company inturn replied to withdraw the communication violating the conditions of the agreement and ensured that the company will enjoy all their rights during the Fourth Edition of IPL in terms of the agreement, dated 16.10.2004, without any hindrance. In view of the above claim made by the Association in its letter, dated 07.03.2011, the company again filed the present O.P.No.754 of 2011 seeking an injunction as follows:- (a) Injunction orders be passed in favour of the company and against the association restraining the association from acting in any way in breach of clauses 2(A) & 2(B) of the agreement, dated 16.10.2004 by denying the exclusive irrevocable rights of the company and its nominees for advertisement of their product name, logo, trademark, promotional material and devices as well as enjoyment of privileges/ benefits in the nature of use of four air conditioned corporate boxes in the Rajiv Gandhi International Stadium along with rights, privileges, benefits identical to those attached to similar corporate boxes along with entry and exit rights in Visaka Cricket Ground, Rajiv Gandhi International Stadium at Uppal during 08.04.2011 to 22.04.2011 or otherwise to interfere in any of the rights available to the petitioner or their nominees in any manner whatsoever. The Association filed a detailed counter admitting the execution of the agreement, dated 16.10.2004, inter alia stating that initially the game of cricket was played in the format of three days and five days game. Later a one-day format of the game was introduced which was recognized by the BCCI as an acceptable format. In the year 2007, a further short cut format of the game known as 20-20 (T-20) game was recognized by the International Cricket Council (ICC) which is the world body of the game. All the matches being organized by the BCCI were being played at places decided by the BCCI and allotted by it to its members for the purpose of organizing and conducting the matches. In view of the success of short format of the game, the said game format was introduced in India. The said format of the game is being organized by some individuals also. For example, the Indian Cricket League is such an Organizer. The BCCI had decided to promote the said format of the game having regard to the huge expenditure involved in the conduct of the said format of the game. BCCI had formulated a scheme for the purpose of organizing the matches by the franchisees under an agreement/arrangement, whereunder the franchisee would be at liberty to enter into agreements with National and International players of repute to be part of the team, to be played under the name and style chosen by the Franchisee. The teams belonging to various franchisees would play at the venues fixed for the said purpose. The matches will be organized and conducted by the franchisees and for the conduct of such matches by the franchisees, the BCCI asked its member associations to make available the Stadia. The respondent being member associate had agreed to provide infrastructure facilities for organization of such matches by the franchisees. The BCCI is providing funds to its members for providing/upgrading the facilities available in the stadia to international levels. The respondent does not possess any stadium on its own to enable it to organize the domestic and international matches at Hyderabad. At the request of the respondent, the Government had allotted the land for constructing an International Stadium. As the funds for construction of Stadium were inadequate, the respondent had approached various Corporate Bodies who are willing to sponsor or part finance the construction. In that regard, the petitioner and the respondent entered into an agreement, dated 16.10.2004, setting out the terms and conditions agreed to between the parties. The agreement, dated 16.10.2004, is confined to the matches that are organized and are conducted by the Association, but not the matches conducted by BCCI-IPL. At the time when the agreement was entered shortcut format of game i.e., 20-20 was not in existence. The agreement does not in any way confer any ownership or right in the Stadium in favour of company, but recognizes the Association as the exclusive owner of the Stadium and does not in any way impinge upon the rights of the Association to enter into the agreements either with BCCI or any other association for the purpose of organizing the cricket matches on such terms as it thought fit. The Company's rights under the agreement are limited to the matches conducted by the association in the said stadium and it cannot claim any rights in respect of the matches being organized and are conducted by the third parties. Further, it will give liberty to the BCCI-IPL and the franchisee to choose another available stadium and in which event also the Association will not be able to claim the advertisement and other rights. The franchisees, who invest huge sums of money cannot be tied down to the terms of the agreement between the parties herein since it will have the effect of denying them their right to manage the matches and commercially exploit them. The company is trying to place fetters on rights of the association in dealing with the stadium and denying it the opportunity to better its facilities. The Association would not derive any financial benefit except the sum that would be fixed for providing infrastructural facilities to the franchisees. The association apart from getting reimbursement of expenditure incurred would only get 20% of the entry tickets which the association has no authority to sell as they would be branded as free/ complimentary and it will have to be distributed among the members of the association and its sponsors like the company. The BCCI did not give any chance to negotiate it would have imposed conditions which the association is obliged to comply. Further the terms and conditions are applicable to all the seven centers where BCCI-IPL is organizing the matches. The franchisees are organizing/ conducting matches. The contention of the company that the association could have purchased the said rights and made them available to the company is to be rejected. The agreement between the company and the association is confined to matches that are organized and conducted by the association, but it does not extend to the matches conducted by the franchise of BCCI-IPL. Therefore, the company can avail privileges, benefits and exercise rights under the agreement against the association and the association organizes and conducts the matches. The company cannot convert the application under Section 9 of the Act into a suit for specific performance and if the company establishes any breach on the part of the Association, it can always claim damages, which in fact is provided in the agreement. Where damages are ascertainable and payable consequent upon the breach, such party is not entitled to injunction but only for damages and that is the specific mandate under the Specific Relief Act. The company has not made out a prima facie case nor balance of convenience in its favour for grant of injunction and prayed for dismissal. To substantiate the plea of the Company, Exs.P1 to P22 were marked and on behalf of the Association no documents were marked.
(3.) LEARNED Chief Judge, City Civil Court, after considering the rival contentions of the parties and the documents made as part of the record, allowed the O.P. with the direction as aforementioned. Questioning the same, the present appeal by the Association. Sri B.Adinarayana Rao, learned counsel for the appellant, contends that the application under Section 9 of the Act and the relief claimed thereunder is not to interfere with the rights available to the company or their nominees during 08.04.2011 to 25.04.2011. In the absence of any amendment carried out, the learned trial court ought to have dismissed the O.P. as infructuous. On termination of the contract/agreement with the Company by the Association through its letter, dated 16.07.2011, a new cause of action had arisen for appointment of an arbitrator. Therefore, the earlier cause of action in terms of the relief claimed earlier vanishes. He secondly contends that Section 9(ii) of the Act deals with interim measures of protection in respect of the matters from (A) to (E). Therefore, the injunction under Section 41(h) of the Specific Relief Act bars the grant of injunction when equally efficacious relief by way of damages can be obtained by the parties. The arbitrators, who are now appointed, can determine the damages payable to the petitioner in the event of an award is passed to enforce the agreement. When the agreement is terminated, the terms cannot be given effect to pending arbitral proceedings, which can ultimately be granted finally by the arbitrators. The lower court having noticed the validity of the termination cannot be gone into in the present proceedings, erred in consequently directing to enforce the agreement, which can be enforced only if an award is passed in favour of the Company. He thirdly contends that at the time when the parties have entered into an agreement, the formats of the game that were being played were different from the formats of the games at present being played and the Association is obliged to conduct games as directed by the BCCI, but it has no right in respect of the matches which are not organized by it and organized by the franchisees. The IPL matches and the Championship League Matches are being organized by BCCI and ICC and as such the Association cannot provide or adhere to the terms of the agreement and it is only providing ground facilities to the BCCI/ICC who will have their own sponsor. Therefore, it is impossible to adhere to the clauses under 2(A) & (B). Therefore, the finding of the lower court that clause 2(A)(ix), 2(B)(ii) and its sub-clause (1) should be read in harmonious with other clauses which shows that the company will enjoy the benefits/rights/privileges etc., in respect of every match taking place in the stadium without reference to the person/persons or organization/s organizing/ staging/ conducting such matches, is incorrect. Equally, the finding that the company's rights are not restricted in juxta position to the sponsorships or arrangements of the association with BCCI/ICC for the match/ matches, is erroneous. Therefore, the impugned order is liable to be set aside as the company failed to establish prima facie case, balance of convenience for grant of injunction in its favour and is liable to be set aside. In support of the said submissions, reliance is placed on Adunik Steeb v. Orissa Mangenism Minerals Pvt. Limited (1) (2007) 7 SCC 125.;