Nahata Limited vs Raamraj Kala Mandir And Anr.
2005 Latest Caselaw 191 Del

JUDGMENT

Pradeep Nandrajog, J.

1. The present order disposes of the two captioned interim applications. IA No.5899/2001 is the plaintiff's application under Order XXXIX Rule 1 and 2 seeking to restrain defendants No.1 and 2 from telecasting the film ''Ganga Jamuna Saraswati'' on the channel ''Star Plus'' by M/s. Star India Limited. IA No.1192/2002 is the application under Order XXXIX Rule 4 filed by defendants No.1 praying for vacation of the ex-parte ad interim order dated 6.7.2001. Order dated 6.7.2001 reads as under:-

''Notice, returnable on 24.7.2001.

It is contended before me by the learned counsel for the plaintiff that the defendants 1 and 2 had no right to sell and transfer the negatives or any right for exhibiting the film Ganga Jamna Saraswati to any person during the period of subsistence of the agreement specifically after 23.12.1998 and the complete right in the said film for exhibiting and telecasting vests in the plaintiff. In support of his contention the learned counsel for the plaintiff has also relied upon the communication exchanged between the parties including the letters dt.25.7.1997, 25.10.98 and 6.10.99. I have perused the same.

It has also been contended that in the past the defendant No.1 has sought to transfer the exhibition rights and in this regard an application was moved by the defendant for permission for exhibition of the film. However, no order was passed in the application and the same is still pending.

It is contended that now defendant No.1 has in a clandestine manner authorised Star Plus Channel to telecast the film Ganga Jamna Saraswati on 7.7.2001 at 8.00 P.M.

In view of the submissions and after perusal of the documents and the pleadings on record, I am satisfied that the plaintiff has a prima facie case in its favor. The balance of convenience is also in favor of not allowing defendant No.1 to telecast the film.

I, therefore, restrain defendants 1 and 2 from allowing and person from exhibiting, telecasting or in any other manner showing the film Ganga Jamna Saraswati till the next date of hearing. dusty.''

2. Suit is for recovery of Rs.1,62,46,215/- filed by the plaintiff against defendant No.1. Injunction is also prayed against defendant No.2 restraining it from delivering the prints of various films including the film ''Ganga Jamuna Saraswati'' produced by defendant No.1.

3. As per the plaint, plaintiff and defendant No.1 had entered into an agreement on 15.5.1986 where under plaintiff financed a sum of Rs.75,00,000/- to the defendant No.1. Amount had to be repaid as per covenants of the agreement. Negative of certain films were to be deposited with defendant No.2 and were not to be handed over without the consent of the plaintiff or till as long defendant No.1 continued to remain bound by the covenants in the agreement dated 15.5.1986.

4. Relevant and important terms of the agreement dated 15.5.1986 are as under:-

''(d) The producers have secured and or agreed to secure services of M/s Gemini Colour Laboratory of Madras a film processing laboratory, under an agreement with them and the Negatives and other paraphernalia's of the said picture will be deposited and kept deposited from time to time with the said M/s Gemini Colour Laboratory of Madras in the name of M/s Nahata Limited only.

(e) The producers have not heretofore entered into any agreement or writing with any person or party for obtaining finance in respect of or relating to the said picture and/or in any way encumbered the said picture or any part thereof and/or entered into any agreement or writing or given in favor of any party or person any negative covenant either express or implied whereby the producers are either directly or indirectly prevented or restrained in any way or manner from releasing or distributing or exhibiting the said picture in any of the territories of the world or any of them or any part thereof and/or whereby the security given by the Producer in favor of the Financiers as hereinafter stated are in any way jeopardised or affected.

(f) The Producers require finance to the tune of Rs.75,00,000/- (Rupees seventy five lacs only) for completing the said picture in all respects make the same ready for release.

(g) Relying upon the representations, assurances and undertakings given by the Producers to the Financiers as hereinbefore and hereinafter stated the Financiers have agreed to finance to the Producers the amounts to the extent of Rs.75,00,000/- (Rupees se entry five lacs only) in the manner and on the terms and conditions hereinafter appearing.''

''3. In consideration of the premises aforesaid and/or various other terms and conditions hereof it is hereby agreed that the Financiers shall be entitled to be paid and paid by the Producers the following amounts viz:-

(a) A sum of Rs.8,00,000/- (Rupees Eight lacs only) as the fixed amount of royalty to be paid on or before release of the said picture in any territory of India or any part thereof plus. (i) Discount Commission at the rate of 18% p.a. on the said amount of Rs.3,00,000/- (Rupees three lacs only) already advanced as aforesaid and on the further amounts to be advanced hereunder from their respective dates of their advances till the payment thereof plus.

(b) 15% (fifteen percent) of all monies and recoveries that may become payable to the producers by or from all the distributors of the said picture for all the territories of the world for and during the period of 11 (eleven) years from the respective dates of first releases of the said picture in the said respective territories of the world, on account of the ''overflow'' of the said picture to be paid by the Distributors to the Producers under their respective agreements and if so required by the Financiers to be paid directly by the distributors to the Financiers. The term ''overflow'' in this agreement shall mean all amounts payable by the Distributors from time to time, after delivery of prints to such distributors and after such distributors have appropriated their respective minimum guarantee amount or minimum guarantee royalty amount or advances, publicity contributions and their respective commission and cost of prints, if any, and shall also include all amounts payable by distributors in excess of the minimum guarantee amount and/or Minimum Guarantee Royalty amount as and by way of sale price or lease money or any other amounts by converting the minimum guarantee or Minimum Guarantee Royalty or advance and other distribution Agreements or Agreement for sale or lease agreement or otherwise. The Producers shall obtain in favor of the Financiers letters of confirmation from such various territorial distributors interalia to the effect that 15% of such overflow if any payable by such distributors to producers under their respective Distribution Agreements shall be paid by them i.e. such Distributors to the Financiers directly together with copies of the statement of realisations. In the event of the producers receiving from the various territorial distributors overflow receivable by or payable to the Financiers as aforesaid they shall forthwith pay all such amounts due and payable by them to the Financiers hereunder and till the same are so paid, the Producers shall hold the same as the Express Trustees for and on behalf of and on account of the Financiers. The Producers liability to remit the overflow share to the Financiers shall accrue only upon its actual receipt by the Producers from various territorial distributors, in their hands. This will not however prejudice the Financiers' rights to recover the same directly from various territorial distributors. It is however clarified that the responsibility for realisation of such 15% of the overflow amount shall be that of Financiers only and the Producers shall make and execute all such papers, unitings and Documents as are required by the Financiers to realise such 15% of overflow amounts.

3. The Producers hereby declare that the declarations made hereinbefore and hereinafter are true and correct and they have not entered into any agreement or writing with any person or party for obtaining finance in respect of or relating to the said picture and/or in any way and manner encumbered the said picture or any part thereof nor entered into any agreement or writing or given in favor of any party or person any negative covenant either express or implied whereby the producers are either directly r indirectly prevented or restrained in any way or manner from releasing or distributing or exhibiting the said picture in any of the territories of the world or any of them or any part thereof and/or whereby the security given by the Producers in favor of the financiers as hereinafter stated are in any way jeopardised or effected, and that they shall not do so without first obtaining the prior written consent of the Financiers in that behalf.

4.Without prejudice to the Financiers rights and remedies under the said Bills of Exchange so drawn and to be drawn as aforesaid and otherwise howsoever the Producers agree and undertake to repay to the Financiers the said amount of Rs.3,00,000/- (Rupees three lacs only) as also all other amounts advanced hereunder as aforesaid together with the Royalty, Discount Commission accrued due thereon as aforesaid on or before the first release of the said picture in any territory of India or any of them or any part thereof or on or before the 30th June 1988 with further grace period of three months whichever is earlier and the same is hereinafter referred to as ''The Due Date''.

5. In consideration of the premises aforesaid as security for repayment of all the amounts due and payable hereunder the Producers shall simultaneously with the execution hereof address a letter to the said Gemini Colour Laboratory or such other laboratory with whom negative prints etc. of the said picture are deposited or to be deposited from time to time, irrevocably by authorising it to hold the said negatives prints etc. in trust for and in the name and on behalf of the financiers. It will be further clarified in the said letter that the negatives are to be maintained in the name of the financiers only till such time that all the amounts that may become payable by the Producers to the Financiers in terms of this Agreement are paid by the Producers the Financiers in full and once the same are so paid in full whether the same has become due or not.

6. The Producers have also further agreed and undertaken to the Financiers to obtain in favor of the Financiers the letters from such laboratory interalia confirming to the above effect i.e. to say that such laboratory shall hold the negatives and prints etc. of the said picture in trust or and with in the name and on behalf of the Financiers till all the amounts payable by the Producers to the Financiers are paid by the producers to the Financiers in full and it will transfer the said negatives etc. to the name of the Producers after the producers have so paid to the Financiers all the amount that are or will become payable by the producings in full whether due or not. The Producers have also agreed and undertaken not to hereafter change the said laboatory for their picture and not to transfer the negatives and other paraphernalia's of the said picture to the name of any person or party.''

5. Immediate cause for filing IA No.5899/2001 was the knowledge of the plaintiff stated to have been derived on 3.7.2001 that the film ''Ganga Jamuna Saraswati'' was intended to be telecasted on the channel ''Star Plus'' on 7.7.2001 at 8.00 P.M. onwards. Stating that with accrued interest, sum of over rupees five crores was due and further stating that the negative rights in the said film stand in the name of the plaintiff and none can be released except with the written permission of the plaintiff, injunction was sought against defendant No.1 and 2 to restrain them from exhibiting/telecasting the said film without the written consent of the plaintiff. As noted above, ex-parte ad interim injunction was issued by this court while issuing notice of the application vide order dated 6.7.2001.

6. Opposition of defendant No.1 to IA No.5899/2002 and case pleaded in support of its application being IA No.1192/2002 is that right of the plaintiff was restricted to the negatives of the film for release in Indian Territories only. Plaintiff had no other rights i.e. cable rights, satellite rights or overseas rights. It is accordingly prayed by the defendant No.1 that application of the plaintiff, IA 5899/2001 be dismissed and the ex-parte ad interim injunction granted vide order dated 6.7.2001 be vacated.

7. Before proceeding to adjudicate on the rival contentions, I may note that the film was telecasted, in spite of the ex-parte ad interim injunction order dated 6.7.2001. Telecast was on 7.7.2001. However, M/s. Star India Limited, in view of the injunction, has not released payment in favor of defendant No.1.

8. The short issue which has to be decided at the present stage is whether under the agreement between the parties, plaintiff had only a right on the negatives pertaining to territories in India alone and had no other rights i.e. cable rights, satellite rights or over seas rights.

9. It is settled law that a contract between the parties would be interpreted in light of how the parties acted under the agreement and how, in the past, parties interpreted the contract.

10. Defendant No.1 had filed an application on 24.1.2000 being IA No.894/2000. Prayer made was to direct the plaintiff to release one betacam cassette of the picture ''Ganga Jamuna Saraswati''. Alleging obstruction by the plaintiff in the negotiations being held by defendant No.1 with third parties, in para 6 of the application, defendant No.1 pleaded:-

''6.That by way of the present application, the Applicant/Defendant herein wishes to bring to the kind notice of this Hon'ble Court the conduct of the Plaintiff as the Defendant No.1 herein has been trying very hard to negotiate TV rights and satellite rights of the film ''Ganga Jamuna Saraswati'' so as to enable him to pay the balance amount of the principal to the Plaintiff.''

11. Prayer (b) made by defendant No.1 in IA No.894/2000 was as under:-

''(b) T.V. Rights which is assigned by S. Raamanathan in the name of M/s. Nahata and Co. to be reassigned in the name of Mr. S. Raamanathan.''

12. Along with the application i.e. IA No.894/2000, defendant No.1 filed copy of letter dated 4.11.1999 addressed by counsel for the defendant No.1 in Madras to Ms. Mamta Mehra, counsel for defendant No.1 in the present suit. Letter reads as under:-

''To

Miss Mamta Mehra

Advocate

B-345 Ashok Vihar

Phase II-Delhi 110 052

Dear Miss Mamtaji

My client Mr. S. Raamanathan of M/s. Raam Raj Kalamandir, who is also your client is negotiating to sell T.V. rights of his picture 'Ganga Jamuna Saraswati'. There are people to buy and some people are ready to lend loan on this T.V. rights. But the following two letters are very essential.

1) T.V. Rights which is assigned by S. Raamanathan in the name of M/s Nahata and Co. to be reassigned in the name of Mr. S. Raamanathan.

2) A letter from Nahata Ltd., to M/s. Gemini Colour Laboratory, Madras to arrange to prepare Betacam Cassette which is very essential for telecasting.

On receipt of the above the amount will be paid to M/s. Nahata and Co. and the deal can be finalised.

Please do the needful.

Thanking you,

Yours faithfully,

Sd/-

(Veerabadhran)

Advocate''

13. Perusal of the pleadings of defendant No.1 and prayer in IA No.894/2000 as also inter-se correspondence between counsel for defendant No.1 at Madras and counsel in the present case would reveal that the defendant No.1 understood the agreement to mean and read that defendant No.1 could not negotiate the TV telecasting and satellite rights in the film ''Ganga Jamuna Saraswati'' without the consent of the plaintiff. Prayer made in the application would reveal that defendant No.1 acknowledged having assigned T.V. Rights to the plaintiff.

14. On 25.7.1997, defendant No.1 had addressed a letter to the plaintiff, where under defendant No.1 acknowledged as under:-

''I am aware that the negatives are in your name and I am also aware that I have to settle your dues and that is how I have been paying from whatever possible sources available to me.''

15. On 25.10.1999, defendant No.1 had written a letter to the plaintiff acknowledging and praying for the following:-

''To finalize the deal I require the following:-

i) I want you to retransfer the rights in my name or I want an authorisation to the extent that I can assign the rights to some other interested dealer;

ii) A letter from you to the laboratory to prepare and supply me Betacam video cassette which is required for Doordarshan telecast. This is very important to finalise the deal.''

16. On 6.12.1999, defendant No.1 had addressed a letter to the plaintiff. On the issue, defendant No.1 had acknowledged as under:-

''We wish to draw your attention to our letter dated 25.10.99 in which we had requested you to re-assign the T.V. Rights in our name and also to write a letter to M/s. Gemini Colour Laboratory to prepare a Betacam cassette and supply us for the purpose of negotiate and finalise the Doordarshan telecasting rights. Because we've kept the negatives in your name, we want a letter from you to the laboratory.''

17. In view of the various acknowledgments of defendant No.1 affronted and in particular the case pleaded by defendant No.1 in IA No.894/2000, it does not lie in the mouth of the defendant No.1 to now allege that TV and Satellite Rights in the film ''Ganga Jamuna Saraswati'' were outside the purview of the agreement between the parties.

18. Since, the object of the ex-parte ad interim injunction granted has been frustrated because the film was admittedly telecasted on 7.7.2001 in the channel ''Star Plus'', relief has to be moulded.

19. Since it was stated at the Bar that defendant No.1 had not received money from M/s. Star India Limited for telecast of the film and since telecast was in violation of the order dated 6.7.2001, M/s. Star India Limited would be liable to be directed to deposit in court the amount payable for telecast of the film ''Ganga Jamuna Saraswati''.

20. IA No.5899/2001 and 1192/2002 are accordingly disposed of with a direction to M/s. Star India Limited to deposit in this court the sum which it had to pay to defendant No.1 for telecast of the film ''Ganga Jamuna Saraswati''. Needful be done within two weeks. Registrar of this court is directed to invest the same in a fixed deposit for a period of one year. Defendant No.1 is restrained from exhibiting/telecasting either in cinema halls, through medium of television or through satellite the film ''Gang Jamuna Saraswati''