Vitasta Publishing Private Ltd. vs Georg Thieme Verlag KG

V.K. Jain, J.

IA Nos. 14182/2010 and 16431/2010

This is a suit for declaration and permanent injunction. The plaintiff and the Defendant entered into a Cooperation Agreement dated 19th December 2005, whereby the plaintiff was granted exclusive rights to market and promote, throughout the territory specified in the agreement, the then current publishing programme (excluding the on-line products) of the Defendant to the extent they were available for sale in the specified territory. This was followed by a second Cooperation Agreement effecting from 1st January 2008, for a fixed tenure of three years.

The parties also entered into separate Exclusive Reprint Agreements in respect of 27 titles mentioned in para 4.8 of the plaint. Under the agreements for reprint rights, the plaintiff was required to pay an agreed sum, mentioned in each agreement, to the Defendant as licence fee, within 90 days from the date of the invoice. Para 12 of the agreement provided that in the event of the publisher i.e. the plaintiff failing to comply with any of the terms and conditions of the agreement, and such breach or default remaining unremedied for a period of 30 days after notice thereof by the Defendant/owner to the plaintiff/publisher, then, at the option of the Defendant/owner to be exercised in writing, the rights granted to the plaintiff/publisher were to revert back to the owner/Defendant without prejudice to its rights to damages for such breach or breaches.

Vide notice dated 22nd September 2010 sent to the plaintiff through counsel, the Defendant, referring to the agreement for reprint, informed the plaintiff that it had not paid the licence fee in respect of the agreements referred in para 1 of the notice, despite more than 90 days having expired from the invoice and thereby committed breach of the terms of the agreements. The plaintiff was called upon to comply with the terms of the agreement to pay the invoiced amount in respect of each of the agreements mentioned in para 1 of the notice to the Defendant within 30 days of the receipt of the notice, failing which the rights granted to the plaintiff under the aforesaid agreements were to stand reverted to the Defendant automatically without further notice and without prejudice to its rights to claim damages for the breach alleged to have been committed by it. As many as 21 titles were mentioned in para 1 of the notice.

As far as the Cooperation Agreement is concerned, its term having expired on 31st December 2010, it does not subsists anymore and the plaintiff has no legal right to seek its continuance, thereafter.

Coming to Reprint Agreements, vide e-mail dated 25th September 2008 sent by Mr. Malik of the Defendant company to Mr. Sudesh of the plaintiff company, the Defendant informed the plaintiff that it had obtained official agreement from the Directorate at Thieme to reduce the old business debt to Euro 12000. Mr. Malik further informed Mr. Sudesh that he had also obtained the agreement that they continue the trading relationship between Thieme Delhi and Vitasta until 31st March 2009 after which they would stop the business relationship. The Defendant was requested to give suggestion as to how the balance payment could be made by 31st March 2009 and a written agreement in this regard was also suggested, so that rest of the debt granted to Euro 35000 could be written off.

The e-mail dated 25th September 2008 was replied by Mr. Sudesh on the same day. Mr. Sudesh informed Mr. Malik that he was trying to find out his resources to give response to him. He also noted that the plaintiff was being given only six months'' time to pay and wind up operations with Thieme and wanted to know what would be the arrangement, thereafter.

It is thus quite clear that the offer made by the Defendant vide e-mail dated 25th September 2008 to the plaintiff company was not accepted by the plaintiff company. Hence, the plaintiff can take no advantage from the terms contained in this e-mail, including the offer to restrict the previous debt to Euro 12000. Assuming that offer made vide e-mail dated 25th September 2008 sent by Mr. Malik to Mr. Sudesh is still open for acceptance by the plaintiff, this would require not only payment of Euro 12000 by the plaintiff to the Defendant, it would also mean that the reprint agreement between the parties would have come to an end on 31st March 2009 and consequently the plaintiff would have no right to publish any of the titles, which were subject matters of reprint agreements, w.e.f. 1st April 2009.

The contention of the learned Counsel for the plaintiff is that the reprint agreements between the parties were open ended, without any time limit having been fixed for publication of the titles subject matters of the agreements. Assuming this to be correct, the plaintiff can publish those titles only subject to payment of the licence fee fixed under each agreement. Admittedly, the plaintiff has not paid the agreed licence fee within 90 days from the date of the invoice, as was stipulated in the reprint agreements. In fact, even today the plaintiff is not ready to pay the licence fee stipulated in the reprint agreements executed between the parties. What the plaintiff wants is to take the advantage of the reprint agreements in order to continue publishing the titles subject matters of the reprint agreements forever, while at the same time take advantage of a part of the offer made by Mr. Malik of the Defendant company to Mr. Sudesh of the plaintiff company by offering to pay only Euro 12000. This, to my mind is not permissible in law and available to the plaintiff company. Firstly, the offer made vide e-mail dated 25th September 2009 was never accepted by the plaintiff company. More importantly, under that offer, the plaintiff has no right to publish any title, subject matter of the reprint agreement after 31st March 2009. In any case, the plaintiff could not have accepted and offer in part. It had/has to be either accepted or rejected as a whole.

For the reasons given in the preceding paragraphs, I am of the considered view that the plaintiff has no prima facie case for continuing to publish the titles, subject matters of the reprint agreements between the parties without payment of the licence fee, stipulated in those agreements. IA 16431/2010 filed by the Defendant under Order 39 Rule 4 of CPC is allowed and IA 14182/2010 filed by the plaintiff under Order 39 Rules 1 and 2 of CPC is dismissed. The interim order granted by this Court on October 25, 2010 is hereby vacated.

CS(OS) No. 2152/2010

List for framing of issues on 10th May 2011.