- (1.) This appeal is at the instance of a respondent in a proceeding under Section 9 of the Arbitration and Conciliation Act (hereinafter referred to as the Act) and is directed against an order dated 16th June, 2010 passed by a learned Single Judge of this Court by which His Lordship disposed of the said application under Section 9 of the Act initiated by the present respondent by directing the appellant before us to deposit a sum of Rs. 2 crore with the Registrar, Original Side, which would abide by the result of the reference. While passing such direction, His Lordship was of the view that the sum of Rs. 2 crore, which the present appellant had been directed to pay, was assessed at on the tentative assessment of the fact that 75 films were offered under the Memorandum of Understanding. The Registrar, Original Side was directed to invest the amount in a fixed deposit with a nationalized bank and forward the copies of the fixed deposit receipt to the parties.
(2.) Being dissatisfied, the respondent in the proceeding under Section 9 of the Act has come up with the present appeal.
(3.) The facts giving rise to filing of the application under Section 9 of the Act may be summed up thus: (i) On July 25, 2002, the appellant had executed a Memorandum of Understanding with the respondent by which the respondent was supposed to deliver 75 movies to the appellant and the appellant was entitled to exploit or telecast those movies for a period of three years commencing from 1st August, 2009. (ii) It was agreed by the parties that in respect of movies, which were to be classified as "A", and "A+" category, there should be limited transmission as mentioned in the Memorandum of Understanding but in respect of others, i.e., "B" and "C" categories, there was no limit of transmission. It was also agreed that gradation should be made by the channel considering diverse aspects including quality of film. Each movie was priced at Rs. 39 lakh. (iii) According to the appellant, notwithstanding the fact that the respondent was obliged to make over 75 movies, the respondent failed and neglected to do so and had only handed over to the appellant 48 movies out of which 20 movies had to be returned by the appellant due to failure on the part of the respondent to give necessary legal clearance to the appellant to exploit those films. (iv) Over and above, according to the appellant, the respondent did not make over any other movie to the appellant until December 2009. The appellant complained that despite the expiry of more than five months, the respondent having failed to make over all the 75 movies, it was obvious that the appellant was not in a position to effectively exploit those within the period specified in the Memorandum of Understanding. The appellant complained that out of the 48 movies delivered, it was only in a position to commercially exploit 28 movies, and consequently, the respondent made clear breach of the terms of the Memorandum of Understanding. (v) The appellant had already paid a sum of Rs. 10 crore to the respondent and terminated the said Memorandum of Understanding by letter dated 26th December, 2009. The appellant contended that although in terms of Clause 12.2 of the Memorandum of Understanding, the money so advanced by the appellant was refundable to the appellant on termination, the appellant having already telecast the aforesaid 28 movies and having intention to telecast the said 28 movies for the assigned period offered to pay a further sum of Rs. 92 lakh over and above the sum already paid being the aggregate value of the said 28 movies calculated at the rate of Rs. 39 lakh for each one.;