Dish TV India ltd v. Gulf DTH FZLLC

By Rima Majumdar and Aishwarya Hariharan

Brief facts about the case

• The Appellant, Dish TV India, a subsidiary of the Essel Group (which also owns Zee TV), has been granted the direct-to-home (DTH) broadcasting rights for a range of entertainment, news, and sports channels. The parent companies of these channels have given Dish TV permission to broadcast them in India and Sri Lanka via its DTH platform.
• Dish TV was utilizing three satellites to transmit its signals across India and Sri Lanka. However, the signals from these satellites were not contained within those territories and were instead spilling over into a broader region, including parts of South Asia, the Middle East, and North Africa, known as the OSN territories.
• The Respondent No.1, Gulf DTH FZ LLC runs a DTH satellite subscription pay television platform in the Middle East and North African region ( OSNterritory), having its registered office in Dubai.  Gulf DTH had secured the exclusive DTH broadcast rights for these OSN territories. In the present case, the signals from Dish TV had overlapped wherein their signals were being broad casted over large swathes of South Asia., the Middle East and North Africa which is OSN territories. It is pertinent to note that the plaintiff, Gulf DTH, had acquired the broadcast rights for DTH transmission in these territories.
• Respondent No.1 had filed a suit seeking, inter alia, permanent injunction restraining the Appellant from distributing setup boxes and smart cards in the OSN territory, from recharging Appellant’s pay-TV services in the OSN territory and from activating any smart cards for use by consumers in the OSN Territory.

Issues dealt in the underlying suit filed by Gulf DTH

To gain a deeper understanding of this case and its outcome, it is necessary to first examine the sequence of events that led to this point, which is outlined below:

 

Submissions of the Appellant

The Appellant made following submissions regarding the maintainability of the present appeal and contended that the Written Statement of the Appellant/Defendant ought to be taken on record.

• At the time when the Appellant’s/Defendant’s right to file Written Statement was closed, the suit filed by the Respondents was an ordinary Civil Suit.
• Section 13 of the CCA would not apply to the orders passed prior to the suit being converted into a Commercial Suit. The Impugned Order was passed by the Ld. Single Bench in exercise of ordinary original civil jurisdiction, and such an order is appealable under Section 10 of the Delhi High Court Act, 1966.
• The Appellant claims that the Impugned Order affects the valuable right of the Appellant to raise a defense. Therefore, the same ought to be treated as “Judgment’.
• In case of a suit filed as a normal civil suit, even though relating to a “commercial dispute”, the second proviso to Sub-Rule (1) of Rule 1 of Order V of the CPC would not apply, if 120 days’ period for filing of Written Statement expired before the suit was transferred to the Commercial Suit.
• In case of transferred suits, the commercial court/commercial division is empowered to exercise discretion under proviso to Section 15(4) of the Commercial Courts Act to extend the period of 120 days for filing written statement. Therefore, the time limits given under Order V Rule 1(1) of the CPC will not apply to such transferred suits.

Submissions of the Respondents

Respondent made the following submissions contending that the Ld. Single Judge has rightly forfeited the right of the Appellant to file Written Statement and the appeal is not maintainable.

• By way of notifications issued by the Hon’ble Delhi High Court dated November 6, 2015 and October 23, 2015, Commercial Division was instituted and subsequently, the CCA became applicable to all the pending suits before the Hon’ble High Court of Delhi that relate to any subject matter provided in Section 2(c) of the Commercial Courts Act.
• The Respondent alleges that the dispute between the parties is a ‘commercial dispute’ in terms of Section 2(c) of the CCA. Therefore, the maintainability of the present appeal has to be seen as per Section 13 of the CCA.
• Since the suit was a Commercial Suit and the time period of 120 days to file the Written Statement stood expired, the Appellant had forfeited its right to file the Written Statement as stipulated under proviso to Order VIII Rule 1 of CPC as amended by CCA.
• Section 21 of the CCA provides that the CCA would have overriding effect on all other laws, therefore Section 13 of CCA would prevail over Section 10 of the Delhi High Court Act, 1966.
• The Impugned order does not affect any valuable right of the Appellant, nor does it finally and conclusively decide the dispute between the parties. Therefore, the present appeal would not be maintainable.
• By way of the Impugned Order, the Ld. Single Judge has exercised the ‘discretion’ provided in proviso to Section 15(4) of the CCA to not extend the time of the Appellant to file the Written Statement.

Analysis and findings of the Court

1. Scheme of CCA
   • The Hon’ble Court examined the scheme of CCA in light of Sections 2 (c), 4(1), 7, 13(IA), 15(4) of the above-mentioned Act. The Hon’ble Court analyzed that in respect of all High Courts having Ordinary Civil Jurisdiction, the concerned Chief Justice have to constitute Commercial Division in the Hon’ble High Court, which would be competent to hear suits relating to ‘commercial disputes’. Upon constitution of these commercial division, the suits relating to ‘commercial disputes’ would be transferred to the Commercial Division.
   • Section 15(4) of CCA provides that after the suit has been transferred to the Commercial Division of the High Court, the Commercial Division shall hold case management hearings in order to prescribe new timelines as per the provisions of the CCA.
   • Proviso to Section 15(4) of CCA specifically provides that the time limit of 120 days for filing of Written Statement from the date of issuance of summons as prescribed under Order V Rule 1(1) of the CPC, shall not apply to such transferred suits and the transferee court shall have the discretion to prescribe new time limits for filing of the written statement.
2. Applicability of CCA on the present suit
   • The suit filed by the Respondent/Defendant in no way suggests that it was filed in accordance with provisions of the CCA. Therefore, the same would qualify as pending suit in terms of Section 15 of CCA and was required to be transferred to Commercial Division of this Court. It was only after such transfer/conversion that the provisions of CCA would apply. In the present case, it was only via the Impugned order that a direction was passed for the registry to renumber the present suit. Ergo, till the time the present suit was converted into a commercial suit, it continued to be an ordinary civil suit.
   • The Court disagreed with the findings of the Single judge that if a suit pertaining to a ‘commercial dispute’ was filed after coming into effect of the CCA, the same would be treated as a commercial suit.
   • The Division Bench observed that once, the suit pertaining to a ‘commercial dispute’ has not been filed as a commercial suit, the said suit cannot automatically be treated as a commercial suit unless a competent court declares the same to be a commercial suit and directs conversion of the suit into a commercial suit. Since the Impugned order was passed before the suit was converted into a commercial suit, an appeal against the same would not be governed by Section 13 of the CCA.
   • The court after discussing various judgments held that the bar under Section 13 of the CCA would not apply to the present appeal as the Impugned order was passed prior to the suit being converted into a commercial suit. The provisions of the CCA, including the time period for filing of the Written Statement, would apply from the date on which the suit was converted to a commercial suit.
3. Maintainability of the present appeal under section 10(1) of Delhi High Court Act,1966
   • The Court relied on Shah Babulal Khimji v Jayaben D. Kania and Anr. 1981 AIR 1786 wherein it was held that an interlocutory order that is not covered under Order 43 of CPC, can be treated as a ‘judgment’ if it adversely affects the valuable right of the Defendant to defend himself in the suit and hence, would be appealable under the Letters Patent of a High Court.
   • The Court relied on the parameters of ‘judgement’ as laid down in Shah Babulal Khimji case to examine whether the Impugned Order meets those parameters. The Hon’ble Court stated that vital rights of the Appellant to defend the suit would be affected if it deprived of its right to file written statement. Therefore, the Impugned Order would qualify as Judgment. Resultantly, the present appeal would be maintainable under section 10(1) of Delhi High Court Act, 1966.

Findings of the Court

• Once the present suit was directed to be renumbered as a commercial suit, ideally, the suit should have been listed before the Commercial Division for case management hearing, where the Court would have exercised its discretion under proviso to Section 15(3) of CCA with regards to prescribing fresh time period to extend the time of the Appellant to file the Written Statement.
• However, the Impugned Order proceeded on the basis that the Suit has to be treated as a commercial suit since it pertained to commercial dispute.
• Even otherwise, the Written Statement was filed by the Appellant merely 3 days’ beyond the 120 days’ period stipulated for an ordinary suit and the appellant has given an explanation for the delay.
• In light of the above discussion the Court was of the view that the right of the Appellant to file written statement could not be forfeited. Accordingly, the Court allowed the present appeal and set aside the Impugned order. Furthermore, the Court directed that the written statement filed on behalf of the appellant/defendant no.1 to be taken on record and the suit shall proceed from that aforesaid stage.

Conclusion

The Commercial Courts Act, 2015 provides that all suits and applications relating to ‘commercial dispute’ of a specified value pending before the High Court/District shall be transferred to Commercial Division/Court. Therefore, it is clear that it’s a mandatory procedure to transfer the pending suits and applications to the commercial court. Nonetheless, this ruling makes it clear that until and unless the suit pertaining to a ‘commercial dispute’ has not been filed as a commercial suit, the said suit cannot automatically be treated as a commercial suit unless a competent court declares the same to be a commercial suit and directs conversion of that civil suit into a commercial suit. The Act also gives power to the Court to prescribe new timelines or issue further directions for the efficacious and speedy disposal of those suits and applications. Therefore, this clarification was indeed necessary for the cases wherein the rights of the parties were affected due to such automatic transfer of cases. Moving forward, it will be interesting to see how the Court will deal with such cases.

Saakshi Khandelwal, Junior Associate Advocate at S.S. Rana & Co. has assisted in the research of this article.