HC tells MRF to pay ad agency in 10-year-old dispute

The Delhi High Court has directed MRF to pay Rs 58 lakh to an advertisement agency in a 10-year-old dispute over services rendered to the tyre manufacturer.

A single member bench, comprising Justice Anil Kumar, directed MRF to pay the disputed amount after it found that there was a contract between the tyre manufacturer and the agency over display of advertisements across the city.

The radial company had been contending that there was no such agreement with the agency.

"With the finding that there had been concluded agreements between the parties, pursuant to which the advertisements were displayed by the plaintiffs (ad agency), they would be entitled to claim the amounts," the court said, directing MRF to pay Rs 58 lakh to Vasudeva Publicity Service.

The court also directed MRF to pay a 9 per cent interest to the agency till the date of filing of the petition before it, and 6 per cent during the pendency of the suit.

The court's direction came over a petition filed by Vasudeva Publicity Service, demanding a payment of Rs 58 lakh by MRF for displaying its ads.

The court rejected MRF's contention that there was no such agreement with the agency. Also, it did not agree with the tyre manufacturer's contention that there was no "discussion, understanding, agreement or approval" for the displays of advertisements.

"MRF has failed to prove that the advertisements could be displayed only after written approval and signing of written contracts by the defendant.The agreements rather categorically stipulates that they were to be signed for the purpose of record," the court said.

The court agreed with the ad agency's submission that, as per the practice, they had placed MRF's ad on their display board on their oral direction, and the written contract was done later only as a formality.

The dispute between them was for the periods extending from January 15, 1998-August 14, 1998, and August 15, 1998- August 14, 1999, when they extended their contract.