Starcon India Ltd & Anr vs Prasar Bharti

Rekha Palli, J

E.A.406/2020

This is an application filed by the Decree Holder(DH) No.1/ applicant seeking the release of a sum of Rs.33,69,94,847/- as deposited by the Judgment Debtor(JD) along with interest, in compliance of order dated 13.12.2018, read with order dated 18. 01.2019, passed by this Court in these very proceedings.

Learned counsel for the DH No.1 submits that vide an award dated 26.12.2016, the learned Arbitrator had allowed the claim of the DH No.1 by holding that the DH was entitled to receive compensation at the rate of USD 32,40,740 per day for the shortfall of broadcasting rights for 17 cricketing days along with interest of 18% p.a., which award was assailed by the JD by way of O.M.P. (COMM) 225/2017. He submits that, upon the challenge by the JD, a Coordinate Bench of this Court vide its judgment dated 13.03.2020, while setting aside a part of the award, has specifically upheld the remaining part thereof, by holding that the DHs were entitled to 7 days of shortfall of cricket days. By drawing my attention to paras 54, 58 and 69 of this judgment, he contends that the learned Judge while finding fault with the findings of the learned arbitrator regarding 10 days of shortfall, had upheld the finding qua the remaining 7 cricketing days. The DHs were, therefore, granted liberty to raise and agitate its claim for compensation qua the shortfall of 7 days, in accordance with law. He further submits that under the award dated 26.12.2016, which was the subject matter of O.M.P.(COMM)225/2017, of which enforcement is being sought in the present petition, the learned arbitrator while awarding a sum of USD 5,509,259 million for 17 days of shortfall, had computed the same by awarding compensation of USD 32,40,740 per day. He, thus, contends that the DHs are entitled to claim for 7 cricketing days at the per day rate awarded by the learned arbitrator, in terms of order dated 13.03.2020.

Mr. Dholakia further submits that even though liberty has been granted to the DHs to claim compensation for 7 cricketing days in accordance with law, since it was the JD's own case before this Court, as articulated by its counsel, Mr. Rajeev Sharma on 13.12.2018, read with order dated 18.01.2019, that the amount as quantified for 7 days shortfall was Rs.15,37,03,465/-; no further adjudication is necessary in this regard. The JD has deposited a sum of Rs.33,69,9484/- with this Court, i.e., the aforesaid sum of Rs.15,37,03,465/- towards 7 days shortfall of cricketing days along with interest @ 9% p.a. He, therefore, contends that the DH No.1 is entitled to receive the sum of Rs.15,37,03,465/-, with interest @18% p.a., instead of interest @ 9% p.a., in accordance with that part of the award which has not been tinkered with by the learned Judge in O.M.P.(COMM)225/2017. He further submits that the DH No.2 has already assigned its rights qua the present claim in favour of the DH No.1, for which purpose, he seeks to place reliance on an affidavit dated 30.08.2017 filed by one Mr. Duncan Edward Fay, acting on behalf of DH No. 2. He further submits that the claim of the JD that it is entitled to recover huge amounts from the DHs under the 3 other awards in its favour and therefore the amount deposited before this Court should not be released to the DHs is wholly misplaced, as even according to the own averments of the JD in E.A. 3280/2019, the amount payable to the JD under the 3 awards was only Rs.22,43,55,126/-, whereas the amount payable to the DH/applicant under the award of which enforcement is being sought is more that Rs.68 crores under the award of which enforcement is being sought. He, therefore, prays that the entire amount of Rs.33,69,94,847/- deposited by the JD be released in favour of the DH No.1 by remittance to its bank account.

On the other hand, Mr. Rajeev Sharma, learned counsel for the JD vehemently opposes the application and submits that the judgment dated 13.03.2020, which is the basis for filing the present application, does not grant any monetary relief to the DHs. He specifically places emphasis on the words "raised" and "agitate claim" used in para 58 and 69 of the said order and contends that after the decision of the Coordinate Bench in O.M.P.(COMM)225/2017, it is open for the DHs to agitate their claim for 7 days shortfall in accordance with law. He, thus, contends that no decree having been passed in favour of the DH No. 1/Applicant and the finding qua the shortfall of 17 days having been specifically set aside, the DHs cannot claim release of the amount deposited by the JD in December, 2018, without any fresh adjudication.

Mr. Sharma submits that the learned Judge, while deciding O.M.P.(COMM)225/2017 had merely upheld that part of the award whereby the counter claims of the JD were rejected, and thus contends that there is nothing to show that any part of the award in favour of the DHs was upheld. He further submits that once the petition under Section 34 of the Act has been allowed by setting aside the reliefs granted to the DHs under the award, there is no ground made out for release of any amount to the DH No.1.

Mr. Sharma further contends that the learned Judge, having set aside the award insofar as it held the DHs entitled to 17 days shortfall, the learned Judge could not have and rightly did not modify the award.

By placing reliance on the decisions of the Supreme Court in McDermot International Inc. vs. Burn Standard Co. Ltd. Vs. Burn Standard Co. Ltd., (2006) 11 SCC 181, Ssangyong Engineering & Construction Co. Ltd. vs National Highways Authority Of India (NHAI), (2019) 15 SCC 131 and on the decision of this Court in State Trading Corporation of India Limited v. Toepfer International Asia PTE Limited, (2014) SCC Online Del 3426, he urges that the Court, while dealing with an application under Section 34, has no power at all to modify an arbitral award even if it finds the award to be erroneous or in conflict with law; the Court in such a circumstance is only empowered to set aside the same and remit the matter back to the learned Arbitrator.

Mr. Sharma thus contends that the Coordinate Bench, being cognizant of the aforesaid decisions, had rightly not granted any relief to the DHs, and therefore, after holding that the learned arbitrator had wrongly allowed the DH's claim for 17 days of shortfall, the Coordinate Bench had merely granted liberty to the DH to raise its claim for the shortfall of 7 days. He further submits that even though the Coordinate Bench has held that the DH was entitled to compensation for the delay of 7 days shortfall, the said finding is erroneous, and the JD reserves its' right to assail the same, by way of appropriate proceedings. He, therefore, prays that the application being wholly misconceived be dismissed with costs.

Without prejudice to his contentions, that no amount whatsoever is payable to the DH after the award, qua the grant of compensation for shortfall of 17 days was set aside vide order 13.03.2020; Mr. Sharma submits that even though the present execution petition is claimed to have been filed on behalf of both the DHs, nothing has been placed on record to show that the DH No.2 has, in fact, authorised DH No.1. He submits that no reliance can be placed on a mere affidavit of one Mr. Duncan Edward Fay, to accept the plea of DH No.1 that it is entitled to claim the amount on behalf of DH No.2 as well. He, thus, contends that the present application is liable to be rejected on this ground also.

Finally, Mr. Sharma submits that there are three existing awards in favour of the JD/Respondent in the present application, whereunder a sum of about Rs.42 crores is payable by the DH, and therefore, by placing reliance on Order XXI, Rule 18, Code of Civil Procedure, 1908 (CPC), he contends that the present application should be taken up along with the enforcement petition already filed by the JD in relation to the aforesaid 3 awards. He submits that the cumulative amount payable to the JD under the three awards (out of which one has already attained finality up to the Supreme Court in the year 2017), being much more than the amount payable, if at all, to the DH under the present award, therefore, no direction for release of any amount in favour of DH No. 1 is warranted at this stage.

Having heard the submissions of the learned counsel for the parties at some length, I am unable to accept Mr. Sharma's first contention that subsequent to the O.M.P.(COMM)225/2017 being allowed vide order 13.03.2020, no amount is payable to the DH as the very award of which enforcement is being sought has been set aside. A perusal of the decision dated 13.03.2020 makes it evident that only a part of the award has been set aside for which purpose reference may be made to paras 54, 58 and 69 which reads as under:-

"54. Respondents may be right in their contention that the Triangular Series may not have earned as much revenue as was expected from another series between India -Pakistan and India-Australia, but this argument cannot be raised by the respondents at this stage. When the petitioner granted the right to the respondents to market and telecast the Triangular Series, the petitioner should have objected at that stage, instead of telecasting the series and earning revenue therefrom. Thus, in my view, the finding of the Arbitrator allowing the claim of the respondent towards the shortfall of 10 cricketing days is patently illegal and cannot be sustained, more particularly in view of the judgment of the coordinate Bench. To this extent, the Award deserves to be set aside.

Petitioner in my view is not right in its contention that the said 20 days were to be excluded and therefore it was obliged only to provide only 115 days in the cricketing season. The Agreement was entered into between the parties on 19.02.2000. It was clearly known to the petitioner on the date of signing the Agreement that 20 days of cricket had been played in the year 1999, yet, when the Agreement was entered into, it was clearly mentioned that 27 cricket days would be provided in each season for the 5 cricket seasons. Had the petitioner intended that these 20 days were to be included, the Agreement would have read otherwise. It is not open for the petitioner at this stage to argue contrary to the terms of the Agreement. My view is further fortified by Clause 12.1 of the Agreement between the petitioner and the BCCI dated 25.09.1999, where there is a clear provision of carrying forward of cricket days in case of shortfall in a particular cricket season. Thus, this contention of the petitioner has to be rejected. Thus, the respondents were entitled to clear 135 days of Cricketing Events in 5 seasons but this would include the 10 days of Triangular Series. Thus, the part of the Award which has held that respondents are entitled to payment for 17 days of shortfall is set aside. Respondents are only entitled to 7 days of shortfall and are at liberty to raise this claim in accordance with law.

Petition is thus partly allowed, as above. Part of the Award dated 26.12.2016 holding a shortfall of 17 Cricketing Days in favour of the respondents is set aside. Respondents are at liberty to agitate their claim of 7 days shortfall in Cricketing Days, in accordance with law. Remaining part of the Award is upheld."

Thus, what emerges is that, out of the claim for 17 days shortfall, the learned judge set aside only the finding qua 10 days of the shortfall while finding no infirmity in the finding of the learned arbitrator qua the remaining 7 days shortfall. Though Mr. Sharma, by placing reliance on McDermot International Inc. vs. Burn Standard Co. Ltd. Vs. Burn Standard Co. Ltd., (2006) 11 SCC 181, Ssangyong Engineering & Construction Co. Ltd. vs National Highways Authority Of India (NHAI), 2019 (15) SCC 131 and on the decision of this Court in State Trading Corporation of India Limited v. Toepfer International Asia PTE Limited, 2014 SCC Online Del 3426, vehemently contended that this Court as the executing Court, cannot endeavour to interpret the judgement passed by the Coordinate Bench and holds that the DH is entitled to any compensation even when none has been granted to it by the Court while setting aside the award. I am unable to agree. Upon a reading of the judgement dated 13.03. 2020 in its entirety, there can be no doubt that the learned Judge has upheld the award for 7 days shortfall, after finding fault with Arbitrator's finding qua 10 days shortfall, which is in consonance with the well settled principle of severability and partial validity of an award.

In this regard, reference may be made to the decision of a Division Bench of this Court in Delhi Metro Rail Corporation Ltd. vs. Delhi Airport Metro Express Private Limited in FAO (OS) (COMM) 58/2018 dated 15.01.2019, wherein the Division Bench after reiterating the settled legal position by holding that the Court cannot correct errors of arbitration and it can only quash the award, thereby leaving the parties free to begin with arbitration again, if they so desire. The Division Bench had also considered the issue of severability of the award by referring to a decision of the Full Bench of Bombay High Court in R.S. Jiwani versus Ircon International Ltd,. (2010) 1 Bom. CR.529 and observed as under:-

"129. In R.S. Jiwani (supra), the Full Bench of Bombay High Court while applying the doctrines of severability and partial validity had clarified that the said principles can be applied only when portions of claims/counter claims are capable of being severed and separated from the rest and not when the decisions on issues are inter -connected and bifurcation would alter the scope of the Award. Reference was made to Shin Satellite Public Co. Ltd. versus Jain Studios Ltd., MANU/SC/0783/2006 : (2006) 2 SCC 628, where the Supreme Court was dealing with the issue whether an arbitration clause could be invoked inasmuch as a particular clause of the agreement was against public policy and unenforceable. Reference was made to paragraph 430 of Halsbury Law of England, 4th Edition, Volume 9, page 297 drawing four general principles applicable to severance in case of contracts. The second principle states that severance can allowed where it is possible to strike out the offending parts, without re-writing or rearranging the contract. Thirdly, the court would not alter entirely the scope and intention of the agreement and, fourthly, shorn of offending parts, the contract must retain characteristics of a valid contract, otherwise the other parts of the contract would also become unenforceable. Chitty on Contracts (29th Edn. Vol. 1) pages 1048-49 also draws distinction between cases where provisions are wholly void and where good part is severable and not dependent upon the bad part, which can be then severed, in which case good can be retained and bad can be rejected. Care must be taken that the Court do not re-write or create a new contract or an Award in which case it is impermissible to dissect and segregate. Reference was made to Section 23 of the Contract Act. These principles, it has been held, can be applied to an award after referring to the decision of the Supreme Court in J.C. Budhraja versus Chairman, Orissa Mining Corporation Ltd., MANU/SC/0602/2008 : (2008) 2 SCC 444 wherein it was held that the entire award need not be set aside and part of the award which is valid and separable can be upheld."

Now coming to the question of quantification of 7 days shortfall, what emerges is that the learned Judge vide deciding O.M.P.(COMM)225/2017 did not deal with the calculation for either 17 days or for 7 days, and therefore, left it to the DH to raise a claim towards the amount payable to it. This is, evidently, for the reason that the award granted compensation on a per day basis and, therefore, the quantification for 7 days shortfall was never really an issue. Therefore, merely because no quantification has been done by the learned Judge while upholding a part of the award, it cannot be said that no amount is payable to the DH. In fact, the amount payable to the DH for 7 days shortfall is crystal clear and needs no determination even by this Court, especially in view of the order dated 13.12.2018, read with order dated 18.01.2019 passed in these very proceedings. Para 13 of the order dated 13.12.2018 reads as under:-

"13. Therefore, for the moment, I am inclined to direct Prasar Bharti to deposit an amount equivalent to seven (7) cricketing days.

13.1 According to Mr. Sharma, if 7 cricketing days is monetized the principal amount would be a sum of Rs.l5,37,634.65.

13.2 To be noted, the learned Arbitrator has also awarded interest at the rate of 18 per cent.

13.3 In my view, for the moment, simple interest at the rate of 9 percent should suffice.

13.4 Accordingly, Prasar Bharti is directed to deposit Rs.15,37,634.65 along with interest at the rate of 9 percent for the period referred to in the Award."

As the aforesaid order contained some typographical errors regarding the amount, the same came to be corrected on 18.01.2019, on which date also, the learned counsel for the JD did not dispute the figure of Rs.15,37,634,65/- and accordingly, the JD was directed to deposit a sum of Rs.15,37,634,65/- along with interest @ 9% p.a. for the shortfall of 7 days, which is the period for which the decree holder's claim has been upheld by the Coordinate Bench. Pursuant to the said order, the JD has duly deposited a sum of Rs.33,69,94,847/-, seeking release whereof, the present petition has been filed by the DH No. 1.

Now coming to the second submission of Mr. Sharma that there is nothing to show that DH No.2 has authorised DH No.1 to pursue the present petition on its behalf, and therefore the amount should not be released solely in favour of DH No.1. Having given my thoughtful consideration to this plea, I find that even though the DH No.1 has placed an affidavit of Mr. Duncan Edward Fay on record as also the fact that the same counsel was representing both the DHs in the arbitration proceedings, this bald affidavit in my view is not sufficient to direct the release of entire amount in favour of DH No.1 at this stage. However, the prayer of DH No.1 to file additional documents in support of its plea that it is in fact authorized to claim the decretal amount on behalf of DH No.2 deserves to be allowed. The DH No.1 is accordingly granted four weeks' time to file further documents in this regard.

Coming to the last and final submission of Mr. Sharma that a cumulative sum of more than Rs.42 crores is payable to the JD under three different awards against the DHs and therefore, no amount ought to be released to the DHs, for which purpose, he has relied on the provisions of Order XXI, Rule 18 which reads as under:-

"18. Execution in case of cross decrees.- (1) Where applications are made to a court for the execution of cross decrees in separate suits for the payment of two sums of money passed between the same parties and capable of execution at the same time by such court, then -

(a) if the two sums are equal, satisfaction shall be entered upon both decrees; and

(b) if the two sums are unequal, execution may be taken out only by the holder of the decree for the larger sum and for so much only as remains after deducting the smaller sum, and satisfaction for the smaller sum shall be entered on the decree for the larger sum as well as satisfaction on the decree for the smaller sum.

(2) This rule shall be deemed to apply where either party is an assignee of one of the decrees and as well in respect of judgment debts due by the original assignor as in respect of judgment debts due by the assignee himself.

(3) This rule shall not be deemed to apply unless-

(a) the decree holder in one of the Suits in which the decrees have been made is the judgment debtor in the other and each party fills the same character in both suits; and

(b) the sums due under the decrees are definite,

(4) The holder of a decree passed against several persons jointly and severally may treat it as a cross decree in relation to a decree passed against him singly in favour of one or more of such persons."

Though learned counsel for the DHs does not deny that amounts are payable to the JD under 3 arbitral awards, he contends that only one of them has attained finality. Furthermore, he also contends that even as per the JD's own averments in its application being E.A. 3280/2019, only a sum of Rs.22,43,55,126/- would be payable to the JD and that too if the other two awards are also upheld. He, therefore, prays that the entire amount of Rs.33,69,94,847/- as deposited by the JD be released in favour of DH No.1, as the same is even otherwise lesser than the amount of over Rs.68 crores, which has, as on date, become payable by the JD in accordance with judgement dated 13. 03.2020.

In the light of the aforesaid discussion, specially the admitted position that the JD is entitled to recover amounts under the 3 arbitral awards from the DH, I am of the view that while withholding a sum of Rs.22,43,55,126/- for the present, it would be appropriate to direct release a sum of Rs.11 crores in favour of the DH No.1, out of the sum of Rs.33,69,94,847/- as deposited by the JD. The Registry is accordingly directed to remit to DH No.1, a sum of Rs. 11 crores with proportionate interest accrued thereon, out of the sum deposited by the JD. The aforesaid amount be transferred in Account No. CA 000984321151, Bank: Indian Bank, Branch- Saket, New Delhi, ISFC: IDIB000S097.

The application is disposed of in the aforesaid terms. However, it is made clear that the amount, if any, further payable to the DHs, will be subject to final adjudication of the enforcement petition.

O.M.P(ENF)(COMM) 232/2018

At request, list on 26.06.2020, the date already fixed.