Pooja Films Pvt. Ltd. vs Motion Pictures Association
1995 Latest Caselaw 590 Del

JUDGMENT

Devinder Gupta, J.

(1) This is plaintiff's application under Order 39 Rules 1 & 2 read with Section 151 of the Code of Civil Procedure seeking an injunction against the defendant during the pendency of the suit restraining the defendant from interfering in the sale and exclusive right of the plaintiff in respect of thedistribution; exhibition and exploitation of picture Dostana and further restraining the defendant from refusing to grant permission to run the picture in Delhi and U.P. and from issuing any circular to members for not running the said picture Dostana and from withdrawing any prints on this pretext. An injunction in mandatory form has also been claimed directing the defendant to forthwith deliver the prints collected by the defendant from Kumar Cinema (Bareilly),Miglani Cinema (Moradabad) and Nishat Talkies (Meerut).

(2) The plaintiff has filed the suit alleging that it is engaged in the business ofdistribution, exhibition and exploitation of cinematographic films in Delhi and U.P.and is presently holding distribution rights of picture Dostana and RAIZADA.It is alleged that through an agreement dated 7.9.1994 the plaintiff acquired the balance right of picture Dostana by entering into an agreement with M/s Aartee Traders (Dostana) on a fixed hire basis of Rs. 1,50,000.00, which has since been paid to M/s Aartee Traders (Dostana). It is alleged that initially picture Dostana was acquired by M/s Aartee Traders and was duly registered in their favor in there cord of the defendants. M/s Aartee Traders was a partnership concern of fivebrothers, namely, Shobh Raj Jaisinghani, Nand Lal Jaisinghani, Nanak Ram Jaisinghani and Prakash Kumar Jaisinghani and Pawan Kumar Jaisinghani. This partnership was dissolved on 4.9.1977 when Nand Lal Jaisinghani and Prakash Kumar Jaisinghani retired. The firm continued with the remaining partners Shobh Raj,Nanak Ram and Pawan Kumar. This partnership was again dissolved on 4.5.1983(wrongly shown as 4.8.1993) when Nanak Ram and Pawan Kumar retired with effect from 1.10.1982. Partnership was taken over by Shobh Ram Jaisinghani as the sole proprietor of firm M/s Aartee Traders. In this dissolution picture DOSTANA fell to the share of Nanak Ram and Pawan Kumar who constituted a separate partnership under the name and style of M/s Aartee graders (Dostana) on and from 4.5.1983 and since then they have been carrying or. business under the name and style of M/s Aartee Traders (Dostana).

(3) On 7.9.1994 the plaintiff acquired the rights of picture Dostana from M/sAartee Traders (Dostana) for a total consideration of Rs. 1,50,000.00 Due intimation, at the time of dissolution was given to all the members of the film trade by M/s Aartee Traders and it was known that M/s Aartee Traders had become the sole proprietary concern of Shobh Raj and picture Dostana had came to the share of Nanak Ram and Pawan Kumar. Plaintiff on acquiring the right of pictureDostana from M/s Aartee Traders (Dostana) applied with defendant No.1 for registration of the picture. Initially permission was granted to he plaintiff, on payment of Rs. 1,00,000.00 for a period of two weeks, for the screening of the film.This payment of Rs. I lac was insisted upon by the defendant, since according to the defendant M/s Aartee Traders were indebted to numerous numbers of the defendant. Since plaintiff was desirous of the screening the picture in various theaters within the territory of Delhi and U.P., the plaintiff deposited the requisite registration fee with the defendant and also spent considerable amount in publicity of the film and in acquiring prints of the film.

(4) In order to pressurize the plaintiff to settle the dues of M/s Aartee Traders,the defendant has issued directions to various exhibitors in Delhi and U.P. not to exhibit the picture Dostana, without getting the permission of the defendant and also asked those exhibitors to deposit the prints of picture with the defendant. It is alleged that the defendant has already got three prints of picture Dostana from Kumar Cinema (Bareily), Miglani Cinema (Moradabad) and Nishat cinema (Meerut).The plaintiff has alleged that the defendant is neither granting remission nor is considering registration of the picture and the defendant is threat ming not to grant permission to exhibit the picture unless the plaintiff makes payment of the dues of M/s Aartee Traders with respect to another picture Razia Sultana.5. The plaintiff has claimed the aforementioned decree alleging that the defendant has no authority to refuse to grant permission on the ground of the alleged non-payment of dues of the members against picture Razia Sultana of M/s Aartee Traders, which now is the sole proprietary concern on Shobh Raj Jaisinghani since the plaintiff has absolutely no concern or connection with Shobh Raj.The plaintiff has acquired full rights of picture Dostana, by making complete payment to its holders, namely, Pawan Kumar and Nanak Ram and is entitled to have the same registered. The action of defendant to club the dues a picture Razia Sultana against the registration of the picture Dostana is an attainment to pressurize and blackmail the plaintiff. The decree claimed in the suit is for dec) ration that the defendant has no right to refuse registration of picture Dostana due to the allegation-payment of dues of members in respect of picture Razia Sultan is registration of which is in the name of M/s Aartee Traders and for a mand of pry injunction directing the defendant to register the picture Dostana in favor of the plaintiff and issue necessary circular to the exhibitors that the plaintiff is entitled have the picture screened and directing the defendant to restore the three prints to the plaintiff.

(5) Suit is resisted by the defendant who has denied the legality and validity of the two dissolutions amongst five brothers. The defendant claims that the dissolution is bogus and is a clever device with a view to defraud its credtors. According to the defendant picture Dostana was the only picture with M/s Aartee Traders from which the creditors, who are all members of Defendant Association could have recovered their dues. The dissolution, according to the defendant is a device to cheat the creditors by taking away the only asset from which the creditor could recoup their dues. The defendant has also assailed the agreement arrived at amongst the plaintiff and the retiring partners of Aartee Traders on the ground that the alleged agreement dated 7.9.1974 for a paltry consideration of only Rs.1,50,000.00 is a sham transaction meant only to defraud the creditors. In view of the status of film Dostana, rights therein could not have been acquired for a paltry sum of Rs. 1,50,000.00 and that also on a Fixed hire. Picture Dostana could not have otherwise been got registered with the defendant as per rules of the defendant till the dues of creditors are deared. According to the defendant, the plaintiff knew very well that there are huge dues against M/s Aartee Traders, which could only todeposit be recovered from picture Dostana and thus, after the alleged agreement of7.9.1974, when the plaintiff applied for registration, the plaintiff readily agreed to deposit a sum of Rs. 1,00,000.00 towards part liquidation of the dues of the creditors and promised to abide by the decision of the creditors. Permission accordingly was granted only for a limited period of two weeks and that too subject to the plaintiff making Settlement with its creditors for the payment of dues. According to the defendant, the rules of association stipulate that the dues of members have to be paid before a picture is registered in the name of the applicant-distributor. Number of other objections have been raised by the defendant, including the one that suit is only for declaration and is not maintainable in the present form.

(6) I have heard the learned Counsel for the parties who have also taken me through the record.

(7) Learned Counsel for the plaintiff has placed reliance upon a decision of this Court in Mehboob Productions (Pvt.) Ltd., Bombay v. Motion Pictures Association, Delhi (1974 Dlt 299) for the proposition that for the dues of another concern,the defendant cannot refuse registration iof the picture.

(8) PLAINTIFF'S case in nutshell is that picture Dostana was initially registered in the name of M/s Aartee Traders, a partnership-firm which stands dissolved.Picture Dostana fell to the share of two partners, who retired from the partnership and for a valuable consideration, the plaintiff acquired its right and, thus, for the remaining period, the plaintiff is entitled to have the picture screened in varioustheater within the territories of U.P. and Delhi and since the same cannot bescreened, due to the rules and regulations of the defendant without its concurrence,which is a powerful association, the plaintiff is entitled to a declaration and injunction which are the only remedies available to it. The plaintiff also claims that the defendant cannot compel the plaintiff to pay the dues of M/s Aartee Traders with respect to another picture. Liability is that of M/s Aartee Traders which is now the sole proprietary concern of Shobh Raj. The plaintiff, thus, states it has got a prima fade case in his favor and balance of convenience also lies in its favor.

(9) After going through the pleadings of the parties and documents placed on record I am not in agreement with the submissions made by the learned Counsel for the plaintiff am of the view that even to the facts of the case, ratio of decision in Mehboob Productions (Pvt.) Ltd.'s case (supra) are also not applicable. After the plaintiff entered into an agreement with the two retiring partners of M/s Aartee Traders, a letter was addressed on 7.9.1974 by Nanak Jaisinghani to the defendant informing that the rights of picture Dostana have been given to the plaintiff on affixed hire and the entire consideration has been received. Request was made to register the picture Dostana, for the balance period, in favor of the plaintiff. On6.10.1994 the defendant sent a communication to the plaintiff with copy to ChamanGupta, a local representative of the plaintiff, which letter has been produced on record by the plaintiff. The gist of this letter is that after the plaintiff applied for registration, the matter was considered by the Executive Committee of the defendant in the presence of the plaintiff's authorized representative Chaman Gupta,who requested that a meeting of the creditors of M/s Aartee Traders be called to decide the mode of recovery of the claim against Aartee Traders. Chaman Gupta undertook to abide by and adhere to the decision to be taken by the creditors in the meeting in liquidating the dues against Aartee Traders. The letter further says thata meeting of creditor was scheduled to be held on 7.10.1994 for which the plaintiff was asked to participate. The letter further says that;"on the undertaking to abide by the decision of the creditors to liquidate the dues against M/s Aartee Traders, Delhi and on tendering the pay order forRs. 1.00lac for interim permission, the Executive Committee on 27.9.1994 has granted two weeks permission to you to release the picture 'DOSTANA' in Delhi/U.P, circuit at members cinema."10. The letter further informs the plaintiff that since the plaintiff has acquired picture on a fixed hire, an application for registration be made, in accordance withrules.

(10) It is not in dispute that the defendant association is a powerful body and if a distributor wishes to exhibit picture in Delhi and U.P. circuit, the rules of Association provide that firstly he should become a member of the Association and pay the prescribed fee. Secondly he should get the picture registered with theAssociation. It is only after the picture is registered that the distributor gets a right entitled to have the picture screened .at all theaters in Delhi and U.P. circuit, which theaters are the members of the defendant Association. On failure to follow this procedure the exhibitors, who are the members of the defendant, are obliged to deal with the distributor and refuse to screen their films. Rules have been framed by the defendant and it is not in dispute that rules do provide that if there is a claim of any of the member/members of the association against a particular distributor and he applies to the association for the registration of the picture in that case the members shall not enter into any arrangement for taking his picture and the registration of the picture will not be allowed unless a satisfactory arrangement is made by the association for the recovery of the amount due of the members from the distributor.

(11) The interim relief which the plaintiff has claimed in the application under Order 39 Rules 1 & 2 of the Code of Civil Procedure if granted will result in almost deciding the suit at this stage since the same relief has been prayed for in the mainsuit. The plaintiff is basing his argument on the decision in Mehboob Productions(Pvt.) Ltd.'s case (supra). On facts the ratio of said decision cannot be made applicable to the instant suit. In Mehboob Productions's case thirteen pictures produced by Mehboob Productions (Pvt.) Ltd. were initially registered by the defendant for a period of eleven months for being screened in various theaters in Delhi and U.P. circuit. After the expiry of this period, Mehboob Products (Pvt.) Ltd.applied for registration, which was refused by the defendant on the ground, that certain dues were payable by 'Ross International ' and unless those dues are cleared picture will not be registered. It was also claimed that the wife of the proprietor of'Ross International' was a director in Mehboob Products (Pvt.) Ltd., therefore,payment of dues was a condition precedent. It was held that the defense taken by the defendant was not a valid defense in law since Mehboob Products Pvt. Ltd. wasa separate and distinct entity from its shareholders and Mehboob Products had attributed malice to the association in refusing membership. Picture had been registered in the name of Ross International only for a period of 11 months, which period was already over. In these circumstances, injunction was granted directing Mehboob Productions Pvt. Ltd. to be registered as one of the members of theAssociation. The instant case is not on similar facts. Picture Dostana stands registered in the name of M/s Aartee Traders, a partnership concern of fivepartners. In case any arrangement has been made amongst the five partners interset the same cannot have the effect of depriving the creditors of their legitimatedues, if any, since registration in their favor is valid and prima facie the defendant would be justified in calling upon even a transferee from M/s Aartee Traders or from its partners to pay of the dues in case the transferee wants to have the picture registered in his name on the ground that it has acquired rights for the remainingperiod. Plaintiff claims to be a transferee from the two partners of Aartee Traders.Moreover, by virtue of the letter dated 6.10.1994 the plaintiff was permitted to screen the picture for two months on clear understanding that the plaintiff will have to settle the matter with the creditors and unless a satisfactory arrangement is arrived at, registration will not be carried out. In these circumstances, I do not find any prima facie case in favor of the plaintiff for grant of injunction. There is also no question of irreparable loss or injury being cause since loss or injury, if any caused to the plaintiff, can very well be compensated in terms of money. Accordingly, the application stands dismissed.List before D.R. on September, 1995 for admission/denial of documents andin Court on November 1995 for framing of issues.