TMI Blog2012 (11) TMI 1308X X X X Extracts X X X X X X X X Extracts X X X X ..... vertisement captioned Indian Telecommunications-Opening upto the World have been approved by the Minister of State for Communications, and that the advertisements should be inserted as early as possible without waiting for a formal order from TCIL, and on whose behalf the advertisements were to be issued. Alongwith the letter Ex. P1 dated 4.10.1995 there were the lists of 114 newspapers and 20 magazines in which advertisements were to be published throughout the country. With respect to changing some of the publications, i.e. numbering 8, a letter dated 5.10.1995/Ex. P3 was thereafter received by the plaintiff from the defendant no. 1 through the said Mr. Umesh Verma, Director. The plaintiff in terms of these letters Ex. P1 and Ex. P3 coordinated with the defendant no. 2/TCIL on the aspect of release of the advertisements. Major part of the advertisements (advertisements in the newspapers) were published by the plaintiff from 6.10.1995 to 8.11.1995. The advertisements which were issued in this period were the advertisements only in the newspapers. So far as the advertisements in the magazines are concerned, called 'double spread advertisements', the same were issued in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h its Joint Secretary asked the defendant no. 2 that the payments should be released to the plaintiff without any further delay. (vi) After insertion of the double spread advertisements in the magazines during the months of December, 1995 and January, 1996, the plaintiff sent its letter dated 5.2.1996/Ex. P83 annexing therewith the invoice with respect to the advertisements in the magazines. Alongwith this invoice the copies of the magazines were annexed. The invoice with respect to the advertisements inserted in the magazines was for a sum of ₹ 36,46,500/-. (vii) The plaintiff has then averred in the plaint that defendant No. 2 was chased for payment, but the defendant No. 2 postponed the payment because it was informed to the plaintiff that there was a financial stringency as a result of which payment was not being released. Another reason given for not making the payment was that defendant no. 2 was a small company and it had asked the Ministry/defendant no. 1 for moneys, and when the moneys would be received by the defendant no. 2 from the defendant no. 1, then payments would be made to the plaintiff. (viii) On account of non-payment of the dues by the plaintiff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement has similarly pleaded lack of privity of contract as no formal order was said to be issued to the plaintiff. The defendant No. 2 on account of lack of privity of contract pleads that it is therefore neither a necessary nor a proper party inasmuch as whatever advertisements which were released on behalf of the defendant No. 2 were of the defendant no. 1/DOT and did not related to the defendant No. 2 and therefore it was only the defendant No. 1 which was liable to make the payment. Defendant No. 2 has also taken up a plea of the suit being barred by limitation. The defendant No. 2 in para 17 of its written statement states that the defendant No. 2-company is a 100% government PSU and fully controlled by the defendant no. 1/Department of Telecommunications, and that therefore it is obliged to carry out the directions of the Department of Telecommunications. It is pleaded that only because of the directions of the defendant no. 1 that the defendant No. 2 made the part payment to the plaintiff of ₹ 59,82,166.80/-, however, the subject payment cannot fasten the defendant No. 2 with any liability. 3(i) Issues were framed in this case on 2.4.2003 and which read as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff has a privity of contract with any or both of them. Only that defendant will be liable with whom the plaintiff had a privity of contract i.e. such defendant for whom the plaintiff issued the advertisements, because, in law, liability in a case such as the present can only be of the person with whom the contract has been entered into more so because the plaintiff specifically claims that its entitlement arises because of a contract entered into, and pursuant to which it issued advertisements in various newspapers and magazines. The determination of the aspect of privity of contract, i.e. whether there is privity of contract with defendant no. 1/Union of India or with defendant No. 2/TCIL, is compounded by the fact that not only there is no specific written contract, but also because the correspondence which exists in this case of both the defendants inter se as also their correspondence with the plaintiff, and which correspondence seems to suggest that liability could be either of the defendant No. 1 or the defendant No. 2 or both. 6. On an in-depth examination of the facts of the case and the documents on record I am of the opinion that in the present case contract of the pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as there is certain correspondence inter se the defendants that the liability should be apportioned between the Ministry/defendant No. 1 and the company-TCIL/ defendant No. 2. Though the defendant No. 2 has written its letter dated 21.5.1998/Ex. P119 (i.e. well after all the advertisements were completed by February, 1996) and which letter states that payment is being processed and shall be made by DOT, really the same is only a matter of internal arrangement inter se the defendants, once we take into account the fact that bills/invoices have been raised upon the defendant No. 2 to which no objection was raised and the TDS certificate has been issued by the defendant No. 2. (iv) Plaintiff has proved on record the note (date illegible) Ex. DW2/P3 which was put up by the defendant No. 2 to its Board of Directors for making of the payment by the defendant No. 2 to the plaintiff. Even if we take the fact that this note did not translate into the Board resolution, this note is signed by as many as three highest ranking persons in the defendant no. 2, and who are none other than the Managing Director and the Directors (Technical and Finance) of the defendant No. 2. This note Ex. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mal order possibly was because as urged on behalf of the plaintiff that the concerned Minister was to go to a Telecom Conference at Geneva in a short period of time and had to carry the published advertisements which showed opening of telecommunication sector in India to the world. I may note that in the cross-examination of the witness of the defendant No. 1, namely Sh. L.T. Tlulanga/DW-1 (Deputy Secretary, DOT) the plaintiff put specific questions as to the World Telecommunications Exhibition taking place in Geneva and all the Ministers and the Ministerial staff going to Geneva. Though, this witness expressed ignorance as to whether the advertisement material was taken by the Minister to Geneva, however, the witness admitted that the World Telecommunications Exhibition took place in Geneva in October, 1995 i.e. the month in which major part of the advertisements were published. This part of the cross-examination of the DW-1 when taken with the letter dated 4.10.1995/Ex. P1 from the defendant No. 1 to the plaintiff, leaves no manner of doubt that there was great urgency in getting the advertisements published because the said advertisements were really the advertisements not of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndirectly informed the plaintiff that issuance of advertisements was illegal; there is correspondence numbering about half a dozen inter se the defendants with respect to payments to be made to the plaintiff and of apportioning of the quantum to be paid between the defendant No. 1 and the defendant No. 2; there did take place an exhibition in Geneva in October, 1995 which the then Minister visited; and finally that the defendant No. 2 is not bound to only issue advertisements through DAVP and it has in the past been issuing the advertisements through advertising agencies and paying the advertising agencies at commercial rates and not DAVP rates. 9. Therefore, I hold that it is the defendant No. 2 who is liable inasmuch as the privity of contract of the plaintiff was with the defendant No. 2, though the advertisements which were issued were of the Department of Telecommunications/defendant No. 1. The witness of the defendant No. 2, DW3, in his cross-examination dated 1.10.2008 has admitted that though the advertisements were of defendant No. 1, defendant No. 2 being a telecom company also got the benefit thereof. The contract of the plaintiff is therefore held to be with the defe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns AIR 1962 SC 779 has held that once the government takes benefit of services, then, although there is no contract as per Article 299, yet, on the principles of Section 70 of the Contract Act, 1872, government is liable to make payment of the dues. This Constitution Bench judgment was delivered possibly so as to avoid injustice to a person who provides services to the Union of India, incurs expenditure and whereafter such person is stonewalled for payment by the UOI on account of bar contained under Article 299 of the Constitution of India. I need not say anything further inasmuch as I am not holding the UOI liable in the facts of the present case, and as stated above it is the defendant No. 2 which is liable to make the payment on account of its privity of contract with the plaintiff. 11. In view of the above, issue Nos. 2, 2(a) and 2(b) are decided by holding that it is the defendant No. 2 which will be liable to the plaintiff for the amount which is being decreed in the subject suit. Issue Nos. 3, 4 and additional issue framed on 13.9.2004 12(i). That now takes us to the issue as to whether the defendant No. 2 is liable to pay to the plaintiff only at DAVP rates or is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... azines besides claiming the principal amount may also claim certain other compensation towards interest. In any case, the counsel for the plaintiff states that no amount which is deposited by the defendant No. 2 in this Court will be taken by the plaintiff till the dues of each of the publications i.e. the newspapers and magazines are cleared. I may note that plaintiff has already received a sum of ₹ 59,82,166.80/-, and it was not clear as to whether some payments from this amount already received has been made by the plaintiff to any of the publications, however during the hearing, counsel for the plaintiff on instructions from Sh. Satyapal Anand, Managing Director of the plaintiff, has made it clear that the plaintiff had made certain payments to the publications and which payments are duly appearing in its audited accounts. Details of such audited accounts including balance sheets and profit and loss account are agreed to be filed in the Court so that Receiver has the information as to the different payments which have been made to different publications and the balances due. (v) It is on the basis of the aforesaid two aspects that I am now proceeding to decide whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcial rates as PSU's are not entitled on DAVP rates. It is only the Government who are entitled for DAVP rates and TCIL had released only their own advertisement. xxxx xxxx xxxx Q: Is it correct that any advertisement got done by TCIL was paid only on commercial rates? Ans: Yes. As I understand as per my office it is on commercial rates. It is correct that if the government get the advertisement done through DAVP, the government pays to them (DAVP) at DAVP rates. xxxx xxxx xxxx xxxx 14. One thing is very clear that it is only through an accredited agency (with INS) such as the plaintiff that the advertisements can be published through the various publications and also that the discounted rates are those which are clearly specified by INS i.e. rates are not nebulous. Further, the defendant No. 2 was not hidebound to get advertisements issued only through DAVP, and it had got advertisements issued in the past through accredited agencies of INS such as the plaintiff and had paid for the advertisements at commercial rates. Also, there are publications which are covered and have a contract with DAVP, but, there are other publications with which DAVP has no contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subject matter of the present suit. 16. I refuse to grant any damages as claimed by the plaintiff inasmuch as this is a case of non-payment of dues, and under issues of contract, there can only be a requirement of payment of balance dues with interest, and no damages arise in contractual matters de hors the aspect of payment of balance dues. Also, the plaintiff has failed to lead any credible evidence whatsoever on the aspect of any alleged damages which have been suffered by him, and which further persuades me to decline the claim of damages. 17. Accordingly issue Nos. 3 and 4 are decided in favour of the plaintiff and against the defendant No. 2 by holding that the plaintiff will be entitled to the balance principal amount of ₹ 1,36,01,743.20/- from the defendant No. 2. So far as additional issue as framed on 13.9.2004, the same is decided against the plaintiff holding that plaintiff is not entitled to any damages as claimed by it. Issue No. 1 18. This issue of limitation arises because the invoices are of November, 1995 and February, 1996 whereas the suit is filed on 25.1.2000 i.e. beyond three years. The suit is however within limitation as a part payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the different publications in which advertisements were done by the plaintiff are first cleared. I appoint Mr. Prasouk Jain, Advocate, office at: 459, Old Block, Delhi High Court, New Delhi-110003, Mobile No. 9899314700 as a Receiver in this case for taking all actions for distributing the decretal amount which would be deposited in this Court on the present judgment becoming final to the respective publications which are the subject matter of Ex. P66 to Ex. P79 and Ex. P84 to Ex. P89. I may state that counsel for the plaintiff has no objection to appointment of Mr. Prasouk Jain, Advocate as a Receiver in this case although he is associated with Mr. B.V. Niren, counsel appearing for UOI. Fees of the Receiver are fixed at ₹ 1 lakh for the work to be done by him under the present judgment including taking all necessary steps and also communicating with the different publications for payment of their respective dues. The Receiver will be entitled to all out of pocket miscellaneous expenses in addition to his fees. Also, if so requested by the plaintiff, the Receiver can after payment of the dues of the publications correspond with the INS on behalf of the plaintiff. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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