Bombay High Court
Ashwin Savani S/O.Late Maganlal ... vs M/S Seven Art Pictures 5 Ors on 25 February, 2021
Bench: K.R. Sriram
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Digitally
signed by
Meera Meera M.
Jadhav
M. Date: IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Jadhav 2021.03.03
17:06:44
+0530
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMMERCIAL IP SUIT NO. 25 OF 2008
1. Ashwin Savani s/o Late Maganlal )
Savani, the sole executor of the Estate of )
Late Shri Maganlal Savani, of Mumbai )
Indian Inhabitant, having his office at 5-B )
Felthan House, J. N. Heredia Road, )
Bellard Estate, Mumbai - 400 038 )
2. International Film Distributors (India) Pvt Ltd. )
A company incorporated and/or existing under )
the Companies Act, 1956 having its address at )
5/B, Feltham House, J. N. Heredia Road, )
Ballard Estate, Mumbai 400 038 ) ..Plaintiffs
Versus
1. M/s Seven Art Pictures )
A concern / firm having its address at Famous )
Cine Building, 20,Dr. E. Moses Road, Mumbai )
400 011 )
1(a) Shrestha Madan Mohla )
of Mumbai Indian Inhabitant )
having address at 301, Kings Apartment, )
Juhu, Mumbai 400 049 )
1(b) Ankush Madan Mohla )
1(c) Ashutosh Madan Mohla )
both of Mumbai Indian Inhabitants )
having their common address at )
C-42, North Bombay Society, )
Opp. J. W. Mariott. Juhu Tara Road, Juhu, )
Mumbai 400 049, all being the legal heirs and )
representatives of late Mr. Madan Mohla, )
the sole proprietor of defendant no.1 )
2. M/s Mehmood Productions )
A concern / firm having its address at )
Ranjeet Studio, Dadar, Mumbai 400014 )
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3. M/s Emkay Productions )
a concern/firm having its address at Famous )
Cine Building, Mahalaxmi, Bombay 400 011 )
4. Essel Vision )
A firm/concern having its address at Fun )
Republic, 5th floor, Plot No.844/4, Opp Laxmi )
Industrial Estate, Off. New Link Road, Andheri, )
(West), Mumbai 400 053 )
5. Zee Telefilims Ltd. )
A company incorporated under the provisions )
of the Companies Act, 1956 having its office at )
Essel Vision, Bunglow No.3, 2nd floor, Pen )
House, Asha Colony, Juhu Tara Road, Juhu )
Santacruz (West) Mumbai 400 056. )
6. Rajshree Pictures Pvt Ltd. )
A company incorporated under the provisions )
of the Companies At, 1956 having its office at )
Bhavana Building, 1st floor, 422, Veer Savarkar )
Road, Prabhadevi, Mumbai 400 025 ) ..Defendants
Mr. Vishal Kanade a/w Mr. Gauraj and Mr. Faran Khan, Mr. Rubin Vakil and
Mr. Manish Doshi i/b Vimadalal and Co. for Plaintiff.
Mr. Sumit Raghani i/b PDS Legal for Defendant Nos. 4 and 5.
CORAM : K.R.SHRIRAM, J.
DATED : 25th FEBRUARY 2021
ORAL JUDGMENT :
1 When the suit was filed, there was one plaintiff and six defendants.
Original Plaintiff No. 1 (as sole proprietor of M/s. International Film
Distributors) was claiming to be the assignee of the sole, exclusive and
perpetual copyright of exploitation, distribution, exhibition, commercial as
well as non-commercial, in 35 MM as well as any reduced size / sizes
including the rights of Television and all other rights attached to such
exploitation, distribution and exhibition for the territories of complete
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overseas circuit, inter alia, in respect of Hindi films "Sharafat", "Bombay to
Goa", "Padosan" and "Ajanana" (the said films).
2 Plaintiff no.2 is a company that has taken over the business of
Plaintiff no.1 M/s. International Film Distributors and entitled to all assets
thereof.
Defendant No.1 is the producer of the feature film "Sharafat";
defendant No. 2 is the producer of the feature film "Bombay to Goa" and
"Padosan", defendant No. 3 is the producer of the feature film "Anjana";
defendant nos. 4 and 5 are part of the Zee Television Network which
telecast the said films. Defendant No.6 claims to be a negative-rights holder
of the said films. This suit was filed in respect of the said four films.
Over a period of time, this suit has been compromised or settled with
defendant no. 2 in respect of the films "Bombay to Goa" and "Padosan" and
with defendant no.3 in respect of "Anjana". This suit has been withdrawn
against defendant nos.2 and 3. The suit has also been settled and
withdrawn against defendant no.6. Thus, this suit is now restricted only in
respect of the Film "Sharafat" against defendant nos.1, 4 and 5.
3 At the hearing of this suit, Mr. Raghani appearing for defendant nos.4
and 5 stated that defendant nos.4 and 5 are not contesting the suit any
more since the license they had for telecasting the film "Sharafat" expired
on 2011. Hence we are dealing with only the dispute between plaintiffs and
defendant nos. 1.
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4 The facts, according to plaintiffs are as under:
(a) Under an agreement dated 12th August 1968 (Exhibit P-2),
plaintiff no.1 acquired the sole, exclusive and perpetual copyright of
exploitation, distribution, exhibition, commercial as well as non-
commercial, in respect of the film "Sharafat" in 35 MM as well as any
reduced size / sizes including the rights of Television and all other
rights attached to such exploitation, distribution and exhibition for
the territories of complete overseas circuit (i.e., the entire world
including high seas and air but excluding India, Pakistan, Burma and
Aden).
(b) Under the agreement at Exhibit P-2, plaintiff no.1 paid a sum of
Rs.7,00,000/- as consideration to defendant no.1 for acquiring the
aforesaid rights in respect of the film "Sharafat". Though the
agreement mentions the consideration as Rs.8,00,000/-, by a letter
dated 28th May 1970, a further arrangement was arrived at between
plaintiff no.1 and defendant no.1 whereby the price was reduced to
Rs.7,00,000/-. Under the said agreement (Exhibit P-2), defendant
no.1 received the entire consideration and the assignment in favour of
plaintiff no.1 was complete. By the said Agreement (Exhibit P-2),
defendant no.1 has divested all rights in the film "Sharafat" in favour
of plaintiffs.
(c) On 1st September 1999, plaintiff no.2 was incorporated
(Exhibit P-1). Plaintiff no.2 took over the business of plaintiff no.1 as
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a going concern with all its properties and assets.
(d) On 28th October 2005, Deed of Assignment (Exhibit D5-2) was
executed between defendant no.1 and defendant no.5 whereby,
defendant no.5 was assigned till 14 th May 2011, exclusive rights of
satellite broadcasting including PayTV, Pay Per View, DTH rights, inter
alia, for the film "Sharafat" for the entire world including India.
(e) On 14th November 2005, defendant no.1 wrote to plaintiff no.2
(Exhibit P-5) and stated that they had not assigned any rights in the
film "Sharafat" in favour of plaintiff no.1.
(f) On 16th November 2005, plaintiff no.2 wrote to defendant No. 1
(Exhibit P-6) and stated that the sole, exclusive and perpetual
copyrights in respect of the film "Sharafat" are assigned in its favour
by defendant no.1 under the said agreement dated 12 th August 1968
(Exhibit P-2) and further called upon defendant no.1 not to infringe
plaintiffs' rights.
(g) On 24th November 2005, defendant no.1 once again wrote to
plaintiff no.1 (Exhibit P-7) and denied the rights of plaintiffs qua the
film "Sharafat".
(h) On 24th November 2005, defendant no.4 addressed a letter
(Exhibit P-9) to plaintiff no.2 calling upon plaintiffs to provide
documents under which plaintiffs claim rights in respect of the film
"Sharafat".
(i) Defendant No. 5 began telecasting the film "Sharafat" and
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infringing the rights of plaintiffs in view of the right it acquired under
the agreement dated 28th October 2005 from defendant no.1.
(j) The suit was lodged on 30th November 2007.
5 Defendant no.1 filed written statement dated 22 nd July 2010. The
written statement contains only denials. In fact, in the written statement,
defendant no.1 has even denied the agreement (Exhibit P-2) and also that
he received the entire consideration. Defendant no.1 also denied that
plaintiff no.1 had perpetual rights to exploit the film "Sharafat" or that
plaintiff no.1 alone is entitled to exploit and/or distribute, and/or exhibit,
and/or broadcast the film "Sharafat".
The sole proprietor of defendant no.1 Mr. Madan Mohla died and
legal heirs of said Madan Mohla were added as defendant nos.1(a) to 1(c)
and the plaint was accordingly amended pursuant to an order dated 20 th
September 2019. Defendant nos.1(a) to 1(c) have not appeared. Plaintiffs
have also filed affidavit of service of Mr. Sandeep S. Dhondge affirmed on 4 th
February 2021, proving service on defendant nos.1(a) to 1(c)
6 On 26th February 2013, issues were settled as under:
1) Whether the plaintiffs' suit is barred by No
limitation?
2) Whether the plaintiffs prove that the Yes
agreement being Exhibit A-1 in respect of the
film "Sharafat" is valid, subsisting and binding
upon defendant nos.1, 4 and 5 as claimed in
paragraph 5 of the plaint ?
3) Whether the plaintiffs prove that the plaintiff Yes
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no.1 is the sole, exclusive and perpetual owner
of copy rights in respect of film "Sharafat" as
claimed?
4) Whether the plaintiffs are entitled to any Yes,
reliefs and if so, to what ? See
order
below
5) Whether the defendant nos.1, 4 and 5 prove No
that the suit of the plaintiffs is bad-in-law,
misconceived and not maintainable ?
6) Whether the defendant nos.4 and 5 prove No
that the plaintiffs are guilty of delay and/or
latches and/or of acquiescence as alleged in
paragraph 5 of their written statement ?
7) What order ? What relief ?" See
order
below
7 Plaintiff led evidence of two witnesses namely Maganlal N. Savani
(P.W.-1) and Ashvin M. Savani (P.W.-2). The sole proprietor of defendant
no.1 Madan Mohla's (D.W.-1) evidence was also recorded and he was cross-
examined before he died. Defendant no.5 also led evidence of one S. J.
Kanakia (D.W.-2), who was also cross-examined by plaintiffs. That evidence
is irrelevant today for two reasons; a) defendant no.5 does not wish to
contest the suit any further and, b) they only relate to rights defendant no.5
acquired from defendant no.1. The subject matter of this suit is, whether in
view of the agreement at Exhibit P-2, defendant no.1 could have assigned
any rights to any party including defendant no.5.
With the assistance of Mr. Kanade, I have considered the pleadings
and the oral and documentary evidence.
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8 As regards issue no.1, on limitation, from Exhibit P-5, it appears that
plaintiffs came to know about the infringement of its rights and addressed
its first communication to defendant no.4 on 9 th November 2005. The
agreement between defendant no.1 and defendant no.5 is also dated 28 th
October 2005. The suit was lodged on 30 th November 2007. Hence, I would
hold that the suit is not barred by limitation. Therefore, answer to issue no.1
is - No.
9 As regards issue no.2, P.W.-1, who was the original defendant, in his
examination-in-chief, admits that he had entered into Deed of Assignment
dated 12th August 1968 with plaintiff no.1. Hence, the answer to issue no.2
is - Yes.
10 As regards issue nos.5 and 6, no evidence was led by defendant nos.1,
4 or 5 and in any event, no submissions were also made. Therefore, answer
to issue nos.5 and 6 is - No.
That would leave issue nos.3, 4 and 7, which can be answered
together.
11 Issue nos.3, 4 and 7 can be split into two parts, viz., a) what were the
rights that plaintiffs acquired by the agreement dated 12 th August 1968
(Exhibit P-2) and (b) whether plaintiffs were entitled to those rights since
defendant no.1 alleges that plaintiffs did not pay the entire consideration.
Answering the second part first, the agreement (Exhibit P-2) says
Rs.8,00,000/- is the consideration to be paid. Admittedly, only
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Rs.7,00,000/- has been paid. It is plaintiff's case that originally it was
agreed at Rs.8,00,000/- but was later reduced to Rs.7,00,000/- in full and
final settlement. For that, the evidence of P.W.-2 has to be looked into. P.W.-
2 in his testimony has stated that he was aware that the agreement dated
12th August 1968 (Exhibit P-2) in respect of the film "Sharafat" was executed
between his father, i.e., Original P.W.-1 and the sole proprietor of defendant
no.1 Madan Mohla for valuable consideration and plaintiffs had paid from
time to time an aggregate sum of Rs.7,00,000/- to defendant no.1 between
12th August 1968 till 20th October 1970 being full consideration as
mentioned under Exhibit P-2. In cross-examination of P.W.-2, question
nos.7, 8, 9, 10, 11 and 12 and answers thereto and the re-examination
relate to this payment. It will be useful to reproduce the same:
Q.7. In your affidavit you have mentioned that you have
paid aggregate sum of R.7,00,000/- towards full and final
settlement, whereas in Exhibit P-2 in clause 1 the sum
mentioned is Rs.8,00,000/- which of the contents is
correct?
Ans: I have to verify from my books of account for the
difference in the amount why I have mentioned figure
Rs.7,00,000/- in my affidavit of evidence.
Q.8 Does your affidavit of evidence prepared without
verifying your accounts ?
Ans: I have verified my books of accounts and then I
prepared my affidavit of evidence.
Q.9 I put it to you that according to your books of
account, amount paid in pursuance to the agreement dated
12.8.1968 was Rs.7,00,000/- and not Rs.8,00,000/- which
is mentioned in the agreement ?
Ans: It is not correct.
Q.10 Whether the ledgers as mentioned in paragraph 3
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were maintained only for office purpose or outsiders were
shown the same ?
Ans: I do not understand the question. The ledger is
maintained for regular accounting purpose.
Q.11 All the amounts paid by M/s International Film
Distributor to an outsider are entered into ledger account ?
Ans: Normally the entries are reflected in the ledger
account.
Q.12 Whether the person in whose name such entries
are made in the ledger account can see the said ledger
account of M/s International Film Distributor ?
Ans: He cannot see the ledger but the said person can
ask for the ledger account.
Question in re-examination:
Q. Have you verified why you have mentioned Rs.7
lakhs in your evidence affidavit ?
Ans: I have verified my books. By a letter dated 28 th
May 1970, a further arrangement was made between the
producers and ourselves whereby the price was reduced to
Rs.7 lakhs. That is why I have mentioned the figure of
Rs.7 lakhs in my evidence affidavit.
No further re-examination.
No further cross-examination.
Witness is discharged.
P.W.-2 was not cross-examined on his answer in re-examination and
also was not called upon to produce the letter dated 28th May 1970.
12 In the written statement as noted earlier, defendant no.1 has only
denied all averments in the plaint. In the written statement, D.W.-1 has
denied that he has received the entire consideration / monies under the
agreement. In his testimony, D.W.-1 only says International Films
Distribution have not paid the entire amount under the deed of assignment.
He does not say how much was received and how much was outstanding.
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Moreover, this is a witness who in his written statement has denied entering
into the agreement (Exhibit P-2), instructs the advocate to cross-examine
P.W.-1 to disprove plaintiffs' assertions that the agreement (Exhibit P-2) was
ever entered into between plaintiff no.1 and defendant no.1 (Q.46 and 47)
and in his testimony admits the agreement. How can any reliance be placed
on the testimony of such a person who has denied on oath Exhibit P-2.
Further, in the cross-examination of P.W.-2, though suggestions were made
regarding non-payment of entire consideration, it is not the pleaded case of
defendant no.1 that due to non- payment of entire consideration, no
assignment took place. In my view, it was for this reason, no issue also has
been framed to be answered.
13 Coming to the moot point, i.e., what were the rights assigned to
plaintiffs under Exhibit P-2, it is plaintiff's pleaded case that all rights
whatsoever the film "Sharafat" for the territories as mentioned in Exhibit P-
2 has been assigned to plaintiffs for perpetual exploitation, distribution and
exhibition. D.W.-1 in his examination-in-chief also states that the agreement
(Exhibit P-2) is self-explanatory and no other rights whatsoever, save and
except, stated therein was ever assigned to plaintiffs.
It will be useful to reproduce Clause Nos.1, 2 and 5 of the agreement
(Exhibit-P2) and the same read as under:
"1. The Assignors hereby agree to assign to the
Assignees and the Assignees hereby agree to take on
assignment from the Assignors the sole, exclusive and
perpetual copy rights of exploitation, distribution and
exhibition, commercial as well as non-commercial, in
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respect of the said picture in 35 mm as well as any reduced
size or sizes, including the rights of Television and all other
rights attached to such exploitation, distribution and
exhibition of the said Picture at or for the price payable as
mentioned below to the territories of complete OVERSEAS
circuit (Comprising the areas specified in clause No. 2
hereof) which territories are hereinafter referred to as the
"Contracted Territory".
2. ................ Complete Overseas circuit, i.e., Entire world
including High Seas and AIR but excluding INDIA,
PAKISTAN, BURMA & ADEN........................
5. The Assignors hereby agree and undertake that the said
Picture shall not be exploited or distributed or exhibited
commercially, non-commercially or in any other manner
whatsoever, in the Contracted Territory either by
themselves, their servants or agents or otherwise and
hereby agree to indemnify and keep indemnified the
Assignees against such unauthorized distribution or
exploitation or exhibitor of the said Picture in the
Contracted Territory. Any breach in this connection will
make the Assignors liable to damages which in no case
shall be less than twice the amount of the price."
14 Mr. Kanade submitted as under:
a) That the aforesaid clause (1) make it abundantly clear that all copy
rights in the film "Sharafat" had been assigned to plaintiffs in perpetuity
without any restrictions.
b) Interpretation of clause (1) also is supported by the negative covenant
in clause (5).
c) Inspite of this agreement, defendant no.1 acted in the manner
calculated to infringe plaintiff's copy right.
d) In view of development in technology after the agreement (Exhibit
P-2) was entered into, defendant no.1, and before the suit was filed
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defendant nos.4 and 5, were representing to the world at large that they
had the right to broadcast the film over Pay TV, Pay per view and DTH
(Direct to Home) and what was assigned to plaintiffs was only rights over
35mm film and television. Defendant no.1 had entered into a number of
agreements with third parties, seeking to assign Satellite and cable rights to
them.
15 I have considered the pleadings, evidence, the agreement (Exhibit P-
2) and in particular Clauses (1) and (5) and submissions made by Mr.
Kanade. A perusal of clause (1) of the agreement (Exhibit P-2) shows that
plaintiffs had been granted the sole, exclusive and perpetual copy rights of
exploitation, distribution and exhibition, commercial as well as non-
commercial, in respect of the film "Sharafat" in 35 mm as well as any
reduced size or sizes including the rights of Television and all other rights
attached to such exploitation, distribution and exhibition. These rights have
been assigned to plaintiff for Rs.8,00,000/- later reduced to Rs.7,00,000/-.
The Overseas territories are mentioned in clause (2), i.e., entire world
including High Seas and Air but excluding India, Pakistan, Burma and Aden.
In my view, the most natural meaning that could be given to clause (1) is
that plaintiffs have been given perpetual copyrights of exploitation,
distribution and exhibition of the film "Sharafat", commercially as well as
non-commercially, in respect of the film "Sharafat" in 35 mm as well as any
reduced size or sizes. These rights would include the rights of Television and
all other rights attached to such exploitation, distribution and exhibition of
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the film "Sharafat". The phrase "all other rights attached to such
exploitation, distribution and exhibition" cannot be read to mean that the
other rights referred only to Television rights. Clause (1) clearly shows that
the intention of the parties was, all rights were given to plaintiffs to do
what they want with the film "Sharafat" in the Overseas circuit mentioned
in the agreement. Clause (1) clearly shows plaintiff is the sole, exclusive
and perpetual copyright holder for exploitation of the film "Sharafat". The
mention of size 35mm or reduced size or sizes or Television cannot be read
to mean that all other rights where the film is exhibited through the
medium of video cassettes and DVD or DTH or Pay TV or Pay Per view are
all excluded. Ultimately what was assigned to plaintiff was the right to
exploit, distribute and exhibit the film "Sharafat" in the contracted territory.
DTH, Pay Per view etc., are only improved versions of exploiting and
exhibiting the film. Technical advancement does not mean that plaintiffs
who had been assigned the sole, exclusive and perpetual copy rights of the
exploitation, distribution and exhibition, would lose their copy rights to
exploit, distribute or exhibit. By showing the film via Pay Per view or DTH
or satellite tv or Pay tv or broadcasting etc. also amounts exhibiting or
exploiting the film and that cannot be excluded from the rights given to
plaintiffs. The clause clearly indicates that all rights whatsoever for
exploiting the film and exhibiting the film in the contracted territory has
been assigned to plaintiffs. In fact, clause (5) also reiterates what has been
explained above because it says "The assignors, (i.e., defendant no.1)
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hereby agree and undertake that the said picture shall not be exploited or
distributed or exhibited commercially, non- commercially or in any other
manner whatsoever, in the contracted territory either by themselves, their
servants or agents or otherwise .....". This also means that the film
"Sharafat" could not have been exhibited or exploited by showing it in DTH,
Pay Per view or Pay TV or in any other manner whatsoever. This court is of
the view that as per the agreement (Exhibit P-2) no restrictions can be
placed on the enjoyment of the copyrights of the film "Sharafat", for
exploitation, distribution and exhibition, which is vested in plaintiffs, only
on the ground that the mode of exhibition of the film had not been invented
at the time when the agreement has been entered into. Therefore, I have no
hesitation to conclude that defendant no.1 has acted in infringement of the
rights of plaintiffs and particularly, the negative covenant contained in
clause (5) of the agreement.
16 Suit accordingly decreed as under:
(a) It is declared that plaintiffs are the sole exclusive and
perpetual owner of copyright in respect of the suit film
"Sharafat" and solely and exclusively entitled to exploit
and/or exhibit and/or broadcast the film "Sharafat" in
any manner throughout the contracted territory
including over Television including Satellite Television,
Cable Television or DTH or Pay TV or Pay per view etc.,
and is alone entitled to allow exploitation, exhibition
and/or broadcast of the film, "Sharafat" by use of any
format and by any means whatsoever.
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(b) It is further declared that defendants herein are not in
any manner entitled to exploit and/or exhibit and/or
broadcast and/or distribute and/or broadcast the film
"Sharafat" and/or allow in any manner whatsoever
exploitation and/or exhibition and/or broadcast and/or
distribution of the film "Sharafat" in any manner by any
means howsoever, and for any purpose by any format
throughout the contracted territory.
(c) There will be a perpetual order and injunction against
defendants restraining defendants by themselves, their
servants and agents from in any manner representing
that defendants or any of them are entitled to exhibit
and/or exploit and/or broadcast and/or distribute
and/or broadcast and/or allow exploitation and/or
exhibition and/or broadcast and/or distribution of the
said film "Sharafat" by any means over any format or
otherwise however throughout the contracted territory.
17 Drawn up decree dispensed with. No order as to costs.
(K.R. SHRIRAM, J.)
Meera Jadhav
