PRASAR BHARTI Vs. FAME COMMUNICATIONS

JUDGEMENT

(1.) By this petition under Section 11 (6)(c) of the Arbitration & Conciliation Act, 1996, petitioner Prasar Bharti (Broadcasting Corporation of India) has prayed for appointment of a sole arbitrator to adjudicate upon their disputes with the respondent M/s. Fame communications, arising out of Agreement between the parties dated 28.1.2994.

(2.) Facts, in brief, are: That an agreement dated 28.1.1994 was executed between Doordarshan Commercial Service (hereinafter 'DCS') and M/s.Fame Communications (hereinafter the 'respondent') whereby the respondent was appointed as an accredited agent. The agreement inter alia provided that respondent will be responsible for payment of advertisement and other related bills jointly and severally with advertisers. The respondents were entitled to 15% commission. The agency was responsible for payment of advertisement and other related bills, jointly and severally with the advertisers. The respondent was to pay to DCS its bill according to the rules framed and within the credit period of 45 days from the first of the month following the date of the telecast of advertisement. They were also made liable to pay interest @ 18% per annum on all amounts due and payable beyond the stipulated period. It is pleaded that in 1997 the Prasar Bharati (Broadcasting Corporation of India) Act, 1990 was notified, in terms of Section 3 whereof, all contracts entered into by Akashvani or Doordarshan are deemed to have been entered into and engaged with or for Prasar Bharati. And in terms of Section 16(c) all sums due to the Central Government in relation to Doordarshan are deemed to be due to the Corporation.

(3.) In pursuance of the Agreement dated 28.1.1994, respondent released programmes 'Music Station', 'Noorejahan', 'Jai Mata Ki' and 'Kati Patang Hai yarron', which were duly telecast by Doordarshan on its channels. The respondent availed commercial time in respect of the said programmes and placed advertisements/sponsorship programmes with the Doordarshan Commercial Service for which bills were raised from time to time. The amount billed was Rs.26,19,67,992.00, against which respondent paid only Rs.14,87,60,739.00, thus leaving an outstanding balance of Rs.11,32,07,253.00 It is further pleaded that the respondent is liable to pay this amount alongwith interest @18%, which has not been paid despite demand dated 11.3.2003. In terms of Clause (5) of the said Agreement, by an order dated 17.4.2003 the Director General, Doordarshan appointed Shri K.S. Sharma, Chief Executive Officer of Prasar Bharti as the Arbitrator. However, Shri K.S. Sharma, vide his letter dated 28.8.2004, withdrew from the arbitration proceedings. A situation, as contemplated by Section 11(6)(c) of the Act has arisen. The petitioner has prayed for appointment of a sole arbitrator. Respondents have filed their reply, opposing the prayer. I have heard learned counsel for the parties.