Sandeep Kapoor vs Anuj Sharma
2011 Latest Caselaw 4067 Del

    * IN THE HIGH COURT OF DELHI AT NEW DELHI

%                     Judgment Reserved on: 19.08.2011
                      Judgment Pronounced on: 23.08.2011

+           CS(OS) 1394/2009

SANDEEP KAPOOR                                  ..... Plaintiff
                        Through: Mr Sandeep Sharma, Sr. Adv
                        with Mr Rajan Bajaj, Advs.

                                versus


ANUJ SHARMA                                    ..... Defendant
                        Through: Mr V.K. Garg & Mr Vivek
                        Sharma, Advs.

CORAM:-
HON'BLE MR JUSTICE V.K. JAIN

1. Whether Reporters of local papers may
   be allowed to see the judgment?                           No.

2. To be referred to the Reporter or not?                    No.

3. Whether the judgment should be reported                   No.
   in Digest?


V.K. JAIN, J.

IA No. 7470/2011 (by plaintiff for release of 1.32 crore)

1. The parties to the suit entered into a Memorandum

of Understanding (MoU) dated 18th December, 2007,

whereby the plaintiff agreed to invest 30% -50% of the

budget of a film which was to be produced by the defendant.

The defendant was required to complete the film and release

it by October, 2008, after the plaintiff had invested the

agreed amount entirely. It was further agreed between the

parties that the realization of the movie shall be distributed

in the following manner:

"10 (a) First, the first party shall be reimbursed to the tune of the amount they invested, which referred in para 1 here-in-above.

(b) The remaining amount of the will be reimbursed to the second party, hereinabove.

(c) After the disbursement of the investments to the first and the second party hereinabove, the remaining profit amount will be share equally in the ratio of 50:50 i.e. the first party shall be entitled to 50% of profit and the second party shall be entitled for 50% of profit.

(d) The overflow revenue generated by the feature film shall also be divided in the same ratio referred in above.

(e) In case of loss, due to any reason whatsoever or in the event of the said feature film being shelved or not being completed by the second party after the complete payment has been made by the first party for whatever reasons, the same will be exclusively borne by the second party and the first party shall not be liable for the same. The second party shall compensate the first party with the entire amount of the investment made by the first party, referred in para 1

hereinabove, along with simple interest @ 12%."

2. The case of the plaintiff is that he was informed by

the defendant that the budget for the movie was about Rs 4-

4.5 crore and he paid a sum of Rs.1,32,00,000/- to the

defendant on different dates. Since the defendant failed to

complete the film by October, 2008, the plaintiff asked him

to refund the money invested by him. The defendant having

failed to pay the amount invested by the plaintiff, the suit

for recovery of Rs.1,32,00,000/- has been filed by him.

3. The defendant has contested the suit, though he

has admitted the MoU dated 18th December, 2007. This is

also the case of the defendant that initially a MoU was

entered into between the parties on 4th July, 2007 which

was followed by the MoU dated 18 th December, 2007. It is

alleged in the Written Statement that the film was about

60% complete and the plaintiff had failed to adhere to the

terms of the MoU since he was aware that the cost of the

project was going to be much above Rs.10 crore and did not

invest 30-50% of the budget of the film in terms of the MoUs

dated 4th July, 2007 and 18th December, 2007. It is also

alleged in para 8 of the Written Statement that till 31 st

December, 2008 the plaintiff had only invested a sum of

Rs.1,03,70,880/- on various dates though he was required

to invest about 30-50% of the estimated budget of about

Rs.12 crore.

4. As noted earlier, the plaintiff had agreed to invest

about 30-50% of the budget of the film, which the defendant

had agreed to produce. The percentage of investment

agreed to be made by the plaintiff is same in the MoU dated

4th July, 2007 as well in the MoU dated 18 th December,

2007. As per MoU dated 4th July, 2007 the defendant was

required to complete the film by February, 2008 whereas as

per the MoU dated 18th December, 2008 he was required to

complete the film by October, 2008. Though the MoU dated

4th July, 2007 stands superseded by the MoU dated 18 th

December, 2007, there is no such term in the MoU dated 4 th

July, 2007 which can be said to be favourable to the

defendant. The obligations of the plaintiff are identical

under both the MoUs. Both the MoUs are silent with

respect to the budget estimated by the parties at the time

these documents were executed. The case of the plaintiff is

that the budget of the film was estimated to be Rs.4-4.5

crore whereas the case of the defendant is that it was

estimated to be more than Rs.10 crore and could go up to

Rs.12 crore. At this stage, it is not possible for the Court to

take a final view in this regard. But, what is important is

that though the defendant had agreed to complete the film

by October, 2008, there is no communication from him to

the plaintiff at any time prior to 31 st October, 2008 claiming

that he had not invested his share in terms of the MoU or

that the amount invested by him was less than what he

ought to have invested. It was vide letter dated 20 th

February, 2009, the defendant for the first time wrote to the

plaintiff alleging that he had not invested even 10% of the

total cost of the film though he was supposed to invest 30-

50% of the total cost. The plaintiff on the other hand sent a

legal notice to the defendant on 28th February, 2009 alleging

therein that the budget of the movie as told by him was

about Rs.4-4.5 crore. Since the defendant knew that he

was required to complete the film by October, 2008, he

would, in the event of breach of his contractual obligation

by the plaintiff, have written to him prior to October, 2008

alleging that he had failed to perform his part of the

contract by not investing 30-50% of the estimated budget of

the film. Prima facie, it is somewhat difficult to accept that

the plaintiff had failed to perform his part of the contract

which led to the defendant suffering damages. In any case,

no counter claim has been filed by the defendant against

the plaintiff.

5. The film in question has been completed during

pendency of the suit. Vide consent letter dated 24th

December, 2010, the defendant was permitted to negotiate

the sale of the film and execute sale documents subject to

condition that he will obtain a pay order of Rs.1,32,00,000/-

in the name of Registrar General of this Court and deposit

the same in the Court. The amount of Rs.1,32,00,000/-

has since been deposited by the defendant and the film has

been released.

6. In the facts and circumstances of the case,

including the fact that no counter claim has been filed by

the defendant, I see no reason why the plaintiff should not

be allowed to use at least that much amount which the

defendant admits having been invested by the plaintiff,

subject, of course, to conditions which would ensure

restitution of the aforesaid amount to the defendant in the

event of the suit being dismissed on merits. The defendant

has already sold the film and thus enjoyed the fruits of the

production. There is no good reason for not allowing the

plaintiff to use at least the admitted amount during

pendency of the suit.

7. It was contended by the learned Counsel for the

defendant that two other suits have been got filed by the

plaintiff against the defendant in respect of parts of the

amount of Rs.1,03,70,880/- invested by the plaintiff and in

the event of those suits being decreed the defendant may

have to pay the decreetal amounts of those suits to the

plaintiff in those suits. As noted earlier, this is defendant's

own case in the Written Statement that it was the plaintiff,

who had invested Rs.1,03,70,880/-. In view of this

admission, the defendant cannot deny the contribution of

the plaintiff to the extent of the aforesaid amount.

8. For the reasons given in the preceding paragraphs,

it is directed that out of amount of Rs.1,32,00,000/- lying in

this Court, a sum of Rs.1,03,70,880/- be released to the

plaintiff on his furnishing surety bond of the same amount

to the satisfaction of the concerned Joint Registrar. The

surety, irrespective of whether he is plaintiff himself or some

other person who agrees to furnish surety bond for him,

must own an immovable property valued at more than Rs.1

crore and should have a clear title to the property. The

surety bond should contain an undertaking not to sell,

transfer, assign, mortgage or otherwise part with the

possession of the aforesaid property during subsistence of

the surety bond. The application stands disposed of in

terms of this order.

R.1&2 CPC), IA No. 13037/2009 (u/O 39 R.4 CPC), IA No. 4469/2011 (u/O 39 R.2A CPC) & IA No. 6318/2011 (u/O 39 R.2A CPC)

List on the date already fixed.

V.K. JAIN, J AUGUST 23, 2011 bg/vn