Rishi Raj vs International Films ...
2002 Latest Caselaw 84 Del

JUDGMENT

Mukundakam Sharma, J.

1. This order would dispose of the application filed by the plaintiff under Order 39 Rules 1 & 2 of Code of Civil Procedure ( I.A. No. 7236/2001) seeking for injunction in favor of the plaintiff and against the defendant restraining the defendant, its employees, agents and representatives from in any manner interfering in the negative rights, sole and exclusive commercial and non-commercial Video rights in all formats, including CVD, DVD, satellite and television rights (both terrestrial and extra terrestrial), cable T.V. rights, pay T.V. rights and the available theartical rights for all India and overseas territories i.e. the entire world including India, in picture 'KOHINOOR', till the disposal of the suit. This order would also dispose of the application of the defendant under Order 7 Rule 10 of the Code of Civil Procedure (I.A. 8262/2001) seeking for return of the plaint to the plaintiff to be presented in the court having proper jurisdiction.

2. The plaintiff is carrying on the business of film distribution, exhibition and exploitation of cinematographic films and is also dealing in satellite right and negative right of cinematographic films. A cinematographic film 'KOHINOOR' was produced by M/s. Republic Films Corporation, which producer was later declared as insolvent and all assets of the said producer were taken over by the Official Assignee of Bombay High Court and thus the entire negative right of the picture KOHINOOR including the negative rights, sole and exclusive commercial and non-commercial video rights in all formats allegedly vest with the Official Assignee of Bombay High Court.

3. On 1.6.2000, one M/s. A.G. Exports, who were earlier enjoying the said rights made an offer of Rs. 75,000/- to the Official Assignee for acquiring the sole and exclusive rights of the said picture for further ten years from 1.1.2001. Based on the aforesaid offer, the Official Assignee made a similar offer to various people including the plaintiff under letter dt. 27.7.2000. In the said letter, it was made clear that the distribution right of the said picture are perpetually held by one M/s. Seth & Sayyed for U.P., Delhi, East Punjab, CPCI, Nizam Circuit under agreement dt. 24.8.1962 while other rights were available with the Official Assignee which were offered for sale to the plaintiff. The plaintiff participated in the aforesaid bidding held in the office of the Official Assignee on 30.8.2001 and ultimately the plaintiff gave the highest bid of Rs. 14,10,000/-, which was accepted by the Official Assignee and a report thereto was submitted by the Official Assignee before the Bombay High Court seeking a direction whether the offer of Rs. 14,10,000/- could be accepted or not. When the matter was listed before the Bombay High Court, the said offer of the plaintiff was accepted and thereafter an agreement 20.12.2000 was executed by the Official Assignee in favor of the plaintiff after receipt of the entire amount from the plaintiff. It is also stated that before the said agreement could be executed, the plaintiff received a letter dt. 10.10.2000 from the defendant stating that they have also certain rights in the said film. Immediately, on receipt of the aforesaid letter dt. 10.10.2001, the plaintiff informed the defendant under their letter dt. 27.10.2000 that as per the information of the plaintiff, the defendant has no right nor the defendant has lodged their claim with the Official Assignee when proceedings for insolvency were in progress. In response to the letter of the plaintiff, the defendant furnished a photo copy of the agreement signed by the defendant with the producer and asserted that they were holding rights for overseas excluding India, Burma, Pakistan, Ceylon, Aden, Continent of Africa, Complete Middle East, West Indies, Fiji, U.K. and Greece and alleged that there is an agreement dt. 13.10.1961 with M/s. Republic Film Corporation. Accordingly, the present suit was filed seeking an injunction against the defendant from interfering with the rights of the plaintiff. Summons were issued and notice was issued on the injunction application, on receipt of which the defendant filed the aforesaid application under Order 7 Rule 10 CPC contending, inter alia, that the agreement of the defendant with the original purchaser of the movie dt. 13.10.1961, contains a clause providing that in the event of any dispute arising out of our in connection with the aforesaid agreement, the same shall have to be decided by arbitration under the Arbitration Act. It was also submitted that the plaintiff is claiming the alleged rights in respect of the said picture from the Original Assignee under agreement dt. 20.12.2000, which provides that only the Courts in Bombay will have the jurisdiction to entertain the matter. Relevant Clause 9 of the said agreement, which is relied upon by the defendant, provides that in case of any dispute or interpretation of the memorandum of agreement dt. 20.12.2000, the same would be subject to the jurisdiction of the Hon'ble the Insolvency Court of the High Court of Judicature at Bombay alone. Accordingly, it was submitted by the counsel appearing for the defendant that the Delhi courts shall have no jurisdiction and that the subject matter of the suit is required to be adjudicated upon through the process of arbitration and, therefore, the plaint is to be returned to the plaintiff.

4. In view of the aforesaid position, I have heard the learned counsel appearing for the parties on the issue of grant of an interim injunction as prayed for and also on the issue of return of plaint in terms of the provisions of Order 7 Rule 10 of the Code of Civil Procedure. The contention of the defendant is that their right in the picture KOHINOOR is based on the agreement executed in favor of the defendant by M/s. Republic Films Corporation, Bombay, on 13.10.1961. By the aforesaid agreement, the defendant was given the right of distribution, exploitation and exhibition rights of the said picture KOHINOOR for certain overseas territories, namely, complete overseas excluding India, Burma, Pakistan, Ceylon, Aden, Continent of Africa, Complete Middle East, Complete Fareast, West Indies, Fiji, U.K. and Greece. The same is mentioned at the top of the aforesaid agreement, a copy of which is placed on record. If a dispute arises in respect of the same with regard to rights of the defendant excluding the aforesaid areas, the defendant could possibly seek for reference of such dispute to arbitrator. However, here is a case, where the original purchaser, namely, M/s. Republic Film Corporation was declared insolvent and all assets of the said producer were taken over by the Official Assignee of the Bombay High Court. The Official Assignee called for offers in acquiring the negative rights, sole and exclusive commercial and non-commercial video rights in all formats including CVD, DVD, satellite and television rights, cable T.V. rights, Pay T.V. rights and the available theatrical rights of the said picture for India and overseas territories i.e. the entire world including India for ten years commencing on 1.1.2000 of the picture KOHINOOR in black and white produced by the insolvent under the banner of M/s. Republic Films Corporation. The Official Assignee sold the said rights for a period of ten years to the plaintiff, who was the highest bidder and the aforesaid bid of the plaintiff was also approved by the Bombay High Court. It further transpires from the records that before the aforesaid bid was approved by the Bombay High Court, the defendant informed the Official Assignee about the agreement of the defendant with the original producer, upon which the Official assignee directed the defendant to represent their case before the Bombay High Court. It transpires from the proceedings of the Bombay High Court that the defendant was represented before the Bombay High Court in the aforesaid proceedings. The order of the Bombay High Court, which is placed on record, discloses that the Official Assignee submitted the report that the offer of Rs. 14,10,000/- given to the Official Assignee in the auction sale dt. 30.8.2000 by the plaintiff for acquiring the negative rights etc. including the sale of commercial and non-commercial video rights in all formats, was a good offer and, therefore, the said offer was approved by the Bombay High Court. Therefore, in terms of the orders by the Bombay High Court, the plaintiff has acquired all the aforesaid rights, in respect of which an injunction is claimed in the present suit. The aforesaid orders were also passed after hearing the parties, namely, the Official Assignee, the plaintiff herein as also the defendant herein.

5. That being the position and the plaintiff having paid the entire amount of Rs. 14,10,000/-, in terms of his offer in the auction sale, the plaintiff has acquired the bonafide claim in respect of the aforesaid rights and the plaintiff has a strong arguable case in its favor. The plaintiff would also suffer irreparable loss and injury in case an interim injunction as sought for in the present suit is not granted in its favor, for if such an injunction is not granted, the defendant would exploit the rights of the plaintiff and in that event the plaintiff would definitely suffer irreparable loss and injury as it has invested an amount of Rs. 14,10,000/- for the said rights, which is also approved by the Bombay High Court. The balance of convenience is also in favor of the plaintiff and, therefore, I am of the considered opinion that the plaintiff has been able to make out a prima facie case for grant of an ad interim injunction as sought for in the present application.

6. In question as to whether the subject matter of the present suit is governed by the arbitration clause, is to be considered at this stage. The present suit is instituted by the plaintiff to give effect to the memorandum of agreement dt. 20.12.2000. No dispute is raised either in respect of the said agreement or in respect of the agreement of the defendant dt. 13.10.1961. The agreement of plaintiff with the official assignee pursuant to confirmation/approval of the offer of the plaintiff vests all the rights claimed herein, on the plaintiff.

7. The jurisdiction of a court does not depend upon the defense taken by the defendant and it is the allegation made in the plaint, which decide the forum as was held in the case of P.M. Diesels Ltd. v. Patel Field Marshals Industries . In view of the nature of the statements made in the plaint read with the documents placed on record, I am of the prima facie opinion that this court has the jurisdiction to try this suit. This, however, is my tentative view, at this stage, only for the purpose of deciding the issue of grant of interim injunction. The right, which is claimed by the plaintiff pursuant to agreement with the official assignee dt. 20.12.2000 could be prima facie established by the plaintiff in Delhi. The plaintiff has also claimed injunction regarding a threatened breach of its right at Delhi and, therefore, prima facie it cannot be said that this court does not have territorial jurisdiction.

8. Counsel appearing for the defendant also drew my attention to a decision of the Bombay High Court dt. 17.10.2000 in Insolvency Case No. 1/1966 wherein the rights involved in the present suit were allegedly held to be a part of the overseas right. In my considered opinion, the said decision was rendered upon facts of its own nature and the said facts are distinguishable from the facts of the present case. Here is a case where the defendant, if at all acquired a right in the year 1961, said rights are limited to a particular overseas area. The rights, which are acquired by the plaintiff were acquired by him through the Official Assignee in the insolvency proceedings, which is also confirmed by the Bombay High Court. In this regard reference may be made to the decision of the Madras High Court in Raj Video Vision v. K. Mohana Krishnan and Anr. reported in AIR 1998 Madras 294. In the light of similar facts, the Madras High Court has held that as per Section 14(1)(d)(ii) of the Copyright Act, the producer, as the original owner had all the rights of video, satellite etc. on the date of assignment and that in the year 1961 when the negative rights were given to the assignee, the rights of Video, satellite etc. could not have been dreamt off and, therefore, assigned or granted. The ratio of the aforesaid decision applies with full force to the facts of the present case. Therefore, in my considered opinion, the plaintiff in the present case has been able to make out a strong prima facie case for grant of an ad interim injunction. Accordingly, such an injunction, as prayed for by the plaintiff, is granted in terms of paragraph 6 of the application. Both the applications stand disposed of in terms of the aforesaid order.

S.No. 1615/2001

9. Defendant is directed to file its written statement within four weeks. Replication thereto, if any, shall be filed before the next date. Let the suit be listed for further orders on 17th May, 2002.