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Union of India Vs M/s Millennium Mumbai Broadcast Pvt Ltd: The Provisions Of The Specific Relief Act Would Not Apply To Contracts Which Are Governed By A Statutory Provision

Prahalad B ,
  16 October 2021       Share Bookmark

Court :
Supreme Court
Brief :

Citation :
Civil Appeal No. 1150 of 2006

Crux:

The provisions of the Specific Relief Act would not apply to contracts which are governed by a statutory provision.

Date of Judgement:

24.08.2006

Coram:

Justice S B Sinha
Justice P P Naolekar

Parties:

Appellant – Union of India
Respondents – M/s. Millennium Mumbai Broadcast Pvt. Ltd.

Subject

If a contract is governed by a specific statutory regulation, it will be governed by the same and the Specific Relief Act would not be applied.

Legal Provisions

  • Section 14(1)(c) of the Specific Relief Act, 1877 (before 2018 amendment) – A contract which is in its nature determinable cannot be enforced.

Overview

  • The appellant invited tender for license to operate FM broadcasting service. The respondent was one among the other four successful bidders. It was stipulated that holders of licenses would shift to a common transmission tower and the cost was to be shared by the licensees. The successful bidders defaulted and did not sign the license agreement. Hence, the cost of shifting to common transmitter increased. The appellant then issued a notification wherein time was given for shifting to a common transmission tower and in the meantime, they were to broadcast from the existing stations.
  • After one year, the appellant issued a reminder to the respondent saying that the license fee will become due from a certain date. The respondent asked for a time extension for payment which went unanswered. After the due date, the appellant revoked the license and invoked the bank guarantee. In meant time, a new policy was framed which allowed the companies to share the revenue rather than fixed payment to the appellant.
  • The respondent approached the tribunal against the revocation of license. The appellant contended that the respondent had defaulted in payment of the license agreement.
  • The tribunal noted that in the interregnum period the appellant had brought a new policy which was also being adopted by other licensees and held that the respondent is also eligible for this. Due to the fact that the appellant had invoked the bank guarantee towards the license fee, the tribunal directed the respondent to provide bank guarantee for rest of the license tenure as per the agreement.
  • The appellant also contended before this court that the tribunal’s order was contrary to Section 14(1)(c) of the Specific Relief Act.

Issue

  • Whether the order of the tribunal is against the objective of Section 14(1)(c) of the Specific Relief Act?

Judgement Analysis

  • This court rejected the contention of the appellant and upheld the order of the tribunal on the ground that when there is a specific statutory provision governing a contract, the Specific Relief Act cannot be considered.
  • The court also noted that the respondent had lost huge amounts of money in this process and the action of the appellant.
  • The court also examined and accepted with the observation of the tribunal that the revocation of license was not valid as there was not a notice time of 30 days but what the appellant issued was a reminder. It was also observed that the tribunal has not exceeded its jurisdiction and held that under Section 14 of the Telecom Regulatory Authority Act, 1997 has wide powers.
  • Due to the aforementioned grounds, the appeal was dismissed.

Conclusion

The Specific Relief Act cannot be referred to when there is statutory provision governing a contract. The Respondent having complied with the statutory provisions and the bank guarantee being invoked towards the license fee; the respondent was not liable to pay any further amount.

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