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Petitioner: MEDIA MAX (PVT) LTD. through Chief Executive VS Respondent: ARY COMMUNICATION PVT. LTD. through Chief Executive and anothers
Court Name: Sindh High Court Judge(s): Muhammad Ali Mazhar Title:MEDIA MAX (PVT) LTD. through Chief Executive vs ARY COMMUNICATION PVT.
LTD. through Chief Executive and anothers Case No.:Suits Nos.115, 124 and 165 of 2012 Suits No,115 and 165 of 2012 and for the Defendant in Suits No,124 of 2012 Suits Nos. 115 and 165 of 2012 and for the Plaintiff in Suit No,124 of 2012 Date of Judgment:2013-06-26 Reported As: PLD 2013 Sindh 555 Result: Order accordingly Judgment ORDER ' MUHAMMAD ALI MAZHAR, J.---This common order will dispose of various applications filed in the three suits. The gist of plaint and applications are as follows:-- 1. This suit has been filed by Media Max Pvt. Ltd. Against ARY Communication Ltd. And ARY Digital, FZ LLC for declaration and permanent injunctions. The crux of the matter is that on 1-7-2001, the defendant No,2 entered into a contract with the plaintiff to exclusively provide sponsorship and advertisement for the satellite T.V. Channel ARY Digital. In this case a declaration has been sought that e-mail dated 29-1-2012 and the oral termination of the airtime contract dated 30-1-2012 communicated to the market is illegal and have no legal effect. 2. The injunction application (C.M.A. No,923 of 2012) was fixed in this court on 31-1-2012 when M/s. Bashir Ahmed Khan and Mobeen Lakho, advocates appeared for defendants and undertook to file their Vakalatnama. Both the learned counsel categorically stated in the court that Annexure "A" which is an agreement dated 1-7-2001 has not been terminated. On this statement the counsel for the plaintiff shown his satisfaction, consequently the injunction application was disposed of. Now in this case following application is pending. ' C.M.A. No,1063/2012: In this application, the defendant No,2 has prayed that agreement contained an arbitration clause, hence arbitrator be appointed. Suit No,124 of 2012 ' ARY Communication Pvt. Ltd.v.Media Max (Pvt.) Ltd.
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3. This suit has been filed by ARY Communication Ltd. 'against Media Max (Pvt) Ltd. For declaration, permanent injunction, rendition of accounts and damages. In this suit the plaintiff has sought the declaration that upon termination of agency, defendant (Media Max Pvt. Ltd) cannot represent the plaintiff for obtaining .Any business. Injunction was also sought against the defendant not to represent as agent or representative of plaintiff. Besides, claiming huge damages, the plaintiff has also sought further declaration that agreements entered into by the defendant (Media Max Pvt. Ltd) representing themselves ARY or ARY Digital are based on misrepresentation. 4. The injunction application C.M.A. No,1046 of 2012 was fixed in this court for orders on 3-2-2012. Learned counsel for the plaintiff argued that on 2-2-2012 the plaintiff terminated the agency agreement, therefore, the defendant be restrained from representing as an agent of plaintiffs and receiving amount in their name directly from the clients. It was further argued that plaintiff has no intention whatsoever to terminate the agreement entered into by the defendant with various clients on behalf of plaintiff but only wanted to ensure that sale proceeds/receipts are given directly to the plaintiffs. On this contention notice was issued to the defendant and till then the defendant was restrained to represent as an agent of the plaintiffs nor would receive any amount directly in their names nor would interfere in the business of the plaintiffs. In this suit, following applications are pending :- (1) C.M.A. No,4803/2012: The defendant has filed this application under Order XXXIX, Rule 4, C.P.C. For vacating order dated 3-2-2012. (2) C.M.A. No,1046/2012: The plaintiff has prayed that defendant be restrained to act as agent of plaintiff. (3) C.M.A. No,1685/2012: The plaintiff claims that the C.E.O of defendant has violated the court's orders dated 3-2-2012. (4) C.M.A. No,1047/2012: The plaintiff wants appointment of receiver to attach the accounts of the defendant. (5) .C.M.A. No,3292/2012: The plaintiff wants appointment of Chartered Accountant to audit the business undertaken by the defendant as agent of the plaintiff since 2001 till date. (6) .C.M.A. No,6232/2012: The plaintiff has prayed that the defendant be directed to give full and complete disclosure, statement of accounts and bank statement. (7) C.M.A. No,2204/2012:, The defendant claims that alleged contemnors have misinterpreted the order dated 3-2-2012. (8) Nazir's report dated 24-12-2012:. He submitted that the plaintiff in compliance of order dated 23- 2-2012 deposited Rs,15,22,86,741/-. The report is taken on record. Suit No,165 of 2012 ' Media Max (Pvt.) Ltd.v.ARY Communication Pvt. Ltd. 5. The plaintiff (Media Max (Pvt) Ltd.) has filed this suit for declaration, recovery, mandatory and permanent injunction against ARY Communication Ltd. And ARY Digital, FZ LLC. The plaintiff has sought the declaration that relationship of principal and agent is governed by the contract dated 1-7-2001. The agency is coupled with interest and third party contracts are protected under section 204 of the Contract Aot hence the defendant cannot revoke the contract and the plaintiff is entitled to 15% agency commission. Further declaration has been sought that the termination of agency is unlawful and in violation of natural justice. 6. On 13-2-2012 when the injunction application (C.M.A. 1352 of 2012) and others applications (at Sr.Nos.3 to 5) were fixed first time for orders Mr.Asim Mansoor, advocate appeared and waived the notice. Learned single Judge jotted down the submissions and by consent it was ordered that the defendant No,1 on receipt of amount from third party in respect of third party agreements entered into between plaintiff and the third party shall retain 85% of such amount and 15% of such recovery will be deposited with the Nazir of this court. On the same date it was further ordered that the Suit
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Nos.115 and 124 of 2012 shall also be fixed together on the next date. Now following applications are pending in this suit. (1) Nazir's report dated 20-3-2012: Nazir submitted that ARY Communication has deposited Rs,70,68,976/-. The report is taken on record. (2) C.M.A. No,9667/2012: The plaintiff claims that the directors of the defendant have violated the court's orders dated 7-5-2012. (3) C.M.A. No,7012/2012: It is an unsigned application and the contention raised are similar to C.M.A. No,9667/2012 hence it is dismissed. (4) C.M.A. No,4817/2012: The plaintiff has prayed for the release of amount deposited by the defendant No,1 with the Nazir. (5) C.MA No,1352/12: The plaintiff has prayed that defendants be restrained from collecting any revenue in terms of third party contracts. (6) C.M.A. No,1353/2012: The plaintiff has prayed for appointment of Nazir to manage accounts in relation to sale and marketing of airtime in respect of third party contracts. (7) C.M.A. No,1354/2012: The plaintiff has prayed that the defendant No,1 be directed to deposit the amount of Rs,89,922,341/- as the defendant No,1 has made a clear unequivocal, unambiguous and unqualified admission. (8) C.M.A. No,1355/2012:. The plaintiff has filed this application under Order XII, Rule 6, C.P.C. And prayed that preliminary decree may be passed to the extent of Rs,89,922,341/-. (9) C.M.A. No,1684/2012: The defendant No,1 claims that alleged contemnors have violated the order dated 13-2-2012. (101 C.M.A. No,2206/2012: The plaintiff has filed this application for restraining order against the defendants from collecting any payments from third parties. (11) C.M.A. No,2207/2012:The plaintiff has prayed for the appointment of Commissioner to inspect the defendant's accounts. (12) .C.M.A. No,2208/2012: The plaintiff has filed this application against the alleged contemnors who have committed contempt of order dated 13-2-2012. (13) C.M.A. No,6234/2012: The defendant No,1 wants recalling/ reviewing the order dated 6-6-2012. (14) C.M.A. No,5910/2012: The plaintiff prays that the bank accounts and liquid assets of the defendants be attached/freezed. (15) C.M.A. No,6235/2012: The defendant No,1 wants that the order dated 13-2-2012 may be set aside or modified/altered. (16) .C.M.A. No,3360/2012: The defendant No,1 has filed this application under Order VII, Rule 11, C.P.C. For rejection of plaint. 7. Mr.Anwar Mansoor Khan, learned counsel for the ARY Communications Ltd. And ARY Digital FZ LLC argued that the Plaintiff ARY communications was established as a private limited company in 2002 which was converted into a public limited company. Media Max was incorporated on 24-8- 2001, which is .a marketing company and was non-exclusively engaged, on terms and conditions contained in various correspondences, without a formal agreement, on casual basis for marketing and sale of airtime of ARY/ARY Digital. 8. It was further contended that ARY Digital FZ LLC, had executed an agreement on 1-7-2001 with Media Max for selling airtime for the promotion of ARY Digital, a Satellite TV Channel. By a letter dated 6-10-2005, ARY informed Media Max that the billing was to be transferred from Media Max to ARY from January 1, 2006. Media Max vide letter dated 17-10-2005 acknowledged the said letter to transfer billing from them to ARY. On 25-5-2006, a letter was written by ARY in which it was stated that the invoices would be on ARY Communication Limited's letterhead and amount received against these invoices would be deposited in Standard Chartered Bank.
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9. He further argued that the agreement dated 1-7-2001 actually came to an end and the new relationship was created between parties whereafter a new agreement was required to be entered into. The draft agreement was sent by ARY to Media Max in September 2006 which was not accepted. Media Max modified various clauses and specially the provisions of Clause 12 which stipulated the duration and termination of the agreement. The said modification was not acceptable to ARY hence various negotiations took place but no formal agreement could be signed. The informal relation, which was governed by various letters and instructions, however continued. The relationship between the ARY and Media Max was very cordial and though targets were given in relation to various channels, but there was no specific pricing policy agreed and discussed. Media Max without reference to ARY, and without information continued to unilaterally negotiate the price of airtime and raising/generating invoices in the name of ARY Communication Limited. Media Max with mala fide intention, refused to provide details of the accounts to the ARY and continued to syphon off money. 10. It was further averred that the Media Max filed a Suit No,115 of 2012 on 31-1-2012, against ARY and ARY Digital FZ, LLC basing its claim on the agreement dated 1st July 2001 which were entered into between ARY Digital FZ, LLC and Media Max. At that point in time ARY Digital had not terminated the agreement hence the counsel said that they had not terminated any agreement and this court passed an Order dated 31-1-2012, disposing off the injunction application on the basis of above statement. The Media Max was incorporated in August, 2001 and the date of submission of incorporation documents is given as 24-8-2001, which is almost 2 months after the date of the said Agreement which shows that Media Max was not in existence at the time of signing of the Agreement hence no reliance can be placed on the said agreement. 11. It was further contended that on account of serious fraud and misrepresentation and causing loss to ARY, a legal notice was served on 2-2-2012 and the oral arrangement as to the casual agency was terminated. Whilst ARY was negotiating with Media Max to give accounts of the previous years, Media Max gone into the market and started to the take advances against the moneys payable to ARY. The money thus taken by fraud is liable to be accounted for and after proper determination/audit through a qualified Chartered Accountant, be returned and or adjusted accordingly. 12. It was further contended that Media Max was never a part of ARY as both are two distinct Companies. Any such impression could not be assigned to the relationship which was of casual nature. In the Suit No, 115 of 2012, Media Max only disclosed five contracts but later on, in the Suit No,165 of 2012, the same company came up with fabricated documents, claiming them to be the agreements entered into on behalf of the ARY. It was further averred that Media Max highlighted that ARY admitted an amount of Rs,89 million as outstanding in favour of Media Max. The learned counsel denied this assertion and pointed out Rejoinder to the C.M.A. 1046 of 2012 and argued that the said amount even if could be said to be an admission, the said document is dated 19-12-2011 showing a balance as on 30-6-2011, where after there has and continued a number of transactions, as such a previous transactional, statement could not be deemed to be an admission on the date of the suit or commencement of litigation. 13. So far as the contempt applications filed by Media Max against ARY and its directors is concerned, the learned counsel argued that ARY has made all payments as directed by this Court with the Nazir but Media Max in order to pressurize ARY and its management and to extract undue benefits resorted to file contempt applications one after another. In compliance of the orders passed by this court, ARY has deposited all the amounts as directed. The final determination of any amounts due could only be made after the evidence has been led. He further argued that Media Max after termination of agency resorted to raising allegations against the ARY regarding sending fraudulent emails which allegations are denied. Media Max has submitted a fabricated email
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relating to the confirmation of the amounts which was merely for the purposes of accounting only. It is' submitted that the documents/emails submitted by the Media Max available at pages from 2049 to 2053 in Part 2 of Suit 165 of 2012 (i,e, Rejoinder in C.M.A. 1352 of 2012) are questionable as they have been received from unverified sources and are fabricated and concocted. He referred to following case in point: 1. 2004 MLD 1820 - Muhammad Qasim v. Tahir Saleem and another. The Court had ample powers under Order XXXIX rule 4, C.P.C. To discharge, vary or set aside injunctive order. It can be exercised keeping in view the circumstances of each case. 2. .1988 CLC 230 - Muhammad Inam v. Dr.Muhammad Safdar Trial court has got power under Order XXXIX, Rule 4, C.P.C. To amend or to discharge, vary or set aside order of injunction. 3. 1982 CLC 2242 - Sindh Madrasatul Islam Board Society v. Shamim. When injunction is made without notice to the opposite- party the remedy for an ex parte temporary injunction is provided in rule 4 of Order XXXIX C.P.C. 4. .PLD 2010 Karachi 213 - Raja Abdul Hameed v. Shehri-CBE When some development takes place having material bearing on substantive rights and interest of parties, the courts do not sit with eyes closed to such change, may in appropriate cases vary, modify or even dikharge the injunctive order. Ref: 2001 SCMR 279. 5. 2007 YLR 590.- Abdul Habib Rajwani v. M/s. Brothers Industries Ltd. Pre-existing interest of the agent in the subject- matter of the agency. The concept has been well illustrated at page 2036 of Halsbury's Law of England, IVth Edn, Volume-I. "868. Authority coupled with interest.---Where the agency is created by deed, or for valuable consideration, and the authority is given to effectuate security or to security or to secure the interest of the agent, the authority cannot be revoked. Thus, if an agreement is entered into on a sufficient consideration whereby an authority is given for the purpose of securing some benefit to the donee of the authority, the authority is irrevocable on the ground that it is coupled with an interest. So, an authority to sell in consideration of forbearance to sue for previous advance, an authority to apply for share to be allotted on an underwriting agreement a commission being paid for the underwriting, and an authority to receive rents until the principal and interest of a loan have been paid off or to receive money from a third party in payment of a debt, have been held to be irrevocable. On the other hand, an authority is not irrevocable merely because the agent has a special property in or a lien upon goods to which the authority relates, the authority not being given for the purpose of securing the claims of the agent. 6. PLD 2009 Karachi 288 - Cooper.Co. (Pvt) Ltd. v. Laurel Navigation (Mauritius) Ltd. The principal admittedly has authority to terminate the authority of an agent in the following circumstances:- (i) by the principal revoking his authority; (ii) by the agent renouncing the business of the agency; (iii) by the business of the agency being completed; (iv) by either the principal or agent dying or becoming of unsound mind; (v) by either the principal or agent being adjudicated an insolvent under the provisions of any Act for the time being in force for the relief of insolvent debtors; (vi) by expiry of the period agency, if any; (vii) by the destruction of a material part of the subject matter of the agency; (viii) the happening of any event which renders the agency unlawful or upon the happening of which, it is agreed between the principal and the agent that the authority shall determine; or (ix) by dissolution of the principal, where the principal is a firm or a company or other corporation. ' Thus there could be no cavil to the proposition that the principal has always ample power to rescind, revoke or alter the authority of agent provided any one or more of afore-stated conditions are available to the principal to amend, alter, rescind, vary or cancel the authority of the agent:
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Prof. SC Srivastava, in his book Law of Agency, III Edition at page 757 while discussing the nature of authority of the agent coupled with the interest, has observed, as under:-- "Where the agent's authority is by deed, or for valuable consideration, or for the purpose of effectuating any security, or of protecting or securing any interest of the agent, it is irrevocable during the subsistence of any, such security or interest. This is known as agency coupled with interest. But it is not irrevocable merely because the agent has an interest in the exercise of it." 7. PLD 2007 Karachi 278 - M/s. Time N Visions International (Pvt) Ltd. v. Dubai Islamic Bank Pakistan Ltd. A contract of agency by its very nature is personal to the parties and revocable at their volition subject to agreed terms. It does not create eternal legal relations. 8. PLD 2011 Karachi 362 - M/s. Fospak (Private) Ltd. v. Fosroc International Ltd. For Section 202 to apply, the following three conditions must be fulfilled; (a) there must be an agency; (b) the subject matter of the agency must be some property; and (c) the agent must himself have an interest in such property. Thus, for section 202 to apply. In the two illustrations to section 202, the basis of the agent's interest in the property is the debt owed to him by the principal. This basis existed independently of the agency contract, and would exist even if there were no agency contract. Ref: Dalchand v. Seth Hazarimal and others AIR 1932 Nagpur 34, and the earlier Bombay case of Vishnucharya v, Ramchandra (1881) 5 Bom. 253. 9. 2006 MLD 367 - M/s. Al-Mumtaz Agencies v. Millat Tractors Ltd. It is settled principle of law that if a principal makes a premature revocation, the agent can only claim damages as per law laid down in Frith v. Frith (1906) AC 254. Agency is dependent upon the confidence and trust which the principal has in his agent, the principal can revoke the agency at his will, once this confidence is shaken. Lamb and Sons v. Goring Brick Coy, Ltd. (1932) 1 KB 710. 10. PLD 1986 Karachi 234 - M/s. World Wide Trading Co. v. Sanyo Electric Trading Co. Mere investment does ring no bell unless the interest which is allegedly involved fulfils the condition that it forms part of the subject-matter of the contract as provided in section 202 of the Contract Act. To my mind, the two statutory illustrations given at the end of section 202 contemplate that the interest of the agent, forming subject matter of the agency, is to be some sort of an adverse nature qua the principal. 11. 2004 SCMR 1092 - Puri Terminal Ltd. v. Government of Pakistan. No doubt an injunction is a form of equitable relief. It is pertinent to note that the petitioner irrespective of seeking declaration, permanent injunction, and compensation also claimed damages as an alternative relief. By claiming damages as an alternative relief, the petitioner seemed to be not confident about the grant of other relief. 14. On the other hand, Mr.Abid Zuberi, the learned counsel for Media Max argued that since 2001 under Agreement dated 1-7-2001, Media Max worked as exclusive agent for sale of Air time and Sponsorship of ARY Digital Channel, firstly and later on as exclusive Agent on same terms and conditions for M/s ARY Communications Limited. Since inception of the business relationship, there is not a single complaint or allegation raised against the business conducted by Media Max and accounts were shared and reconciled on regular basis. Till 28-1-2012 there was no business issues and dispute arose only when Email dated 28-1-2012 was issued by ARY whereby they attempted to introduce a new team to deal sale of air time 9nd sponsorship of ARY Digital Channel which led to filing of Suit No, 115 of 2012 by Media Max in which the ARY on the first date of hearing undertook that the Agreement dated 1-7-2001 has not been terminated. However, ARY without issuing a single notice approached this court and filed Suit No,124/2012 and obtained restraining order dated 3-2- 2012 on concealment of facts. 15. It was further argued that vide letter dated 19-12-2011, Annexure CA/24 at page 417 of Counter Affidavit filed by Media Max to Stay Application in Suit 124 of 2012 makes it clear that ARY has
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confirmed as on 30-6-2011 that a balance amount of Rs,89,922,341.00 is payable to Media Max. The amount was confirmed in hand writing and their Senior Manger Finance Mr. Asim Patel also signed and stamped the said letter. To rebut this admitted liability ARY raised the pleas that figure of Rs,89,922,341.00 was admitted for "accounting purposes" and is not true and correct figure. They also manufactured a series of fictitious Emails including Email dated 19-12-2011 sent by Asim Patel to Sajid Hafeez of Media Max. In fact, this fictitious email was only sent by Mr. Asim Patel on 10-2- 2012 which was received by Media Max on 10-2-2012 i,e, just 3 days before filing of Suit No,165 of 2012 when the negotiations were taking place. M/s hostndomain.Com conducted investigation and from I.P. Address of Media Max and ARY found out that this particular email was sent from Outlook (Computer Software for sending and storing emails on a personal" computer) and Outlook picks system date. So if the system date of sender (asim.Patelgarydigital.Tv) is wrongly set then the mail will receive at recipient's end showing back date. The learned counsel referred to Annexure RJ/17 at page 2047 - 2053 of Suit No,165 of 2012 filed by Media Max along with its Rejoinder to Stay Application. ARY has taken wrong plea that they have already paid 15% commissions of Media Max and nothing is outstanding. He further argued that under Order XII, Rule 6, C.P.C. Any party may at any stage of a suit where admission of a fact is made either in pleadings or otherwise, apply to the Court for such judgment or order as upon such admissions he may be entitled to, without waiting for the determination of any other question between the parties, hence this Court may be pleased to pass preliminary decree to the extent of the admitted amount i,e, Rs,89,922,341.00. 16. It was further contended that since inception of business relationship Media Max was using Logo, Trade Mark and Trade Name of `ARY' & ARY Digital' which amounts to an implied acceptance on the part of ARY and ARY Digital. Various admitted documents addressed by Media Max either to ARY, ARY Dubai, Pakistan Broadcasters Association or third party and or Advertising Agencies do show that Media Max was using the logo and trade name of ARY Digital and the same was within the knowledge of ARY and ARY Dubai. After use of logo and Trade mark/name for a period of more than 11 years it is only now that ARY is 'making flimsy allegations which are without substance. ARY further alleged 15 Agreements mentioned In Suit No,165/2012 are forged and prepared in back date while in Suit No,115/2012 only 4 agreements were mentioned. Despite claiming remaining 11 agreements are forged, ARY has not singled out, any one of these Agreements as…
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