IN THE HIGH COURT OF DELHI AT NEW DELHI
SUBJECT : CODE OF CIVIL PROCEDURE
IA No.14113/2008 in CS (OS) No.2408/2008
Judgment Reserved on : 12th January, 2009
Judgment pronounced on : 23rd January,2009
Reliance Big Entertainment Pvt. Ltd. .. .Plaintiff Through: Dr. A.M. Singhvi, Sr. Adv. with Mr. Ameet Dutta and Mr. Thomas George, Advocates
Vs.
Percept Limited and Anr. .... Defendants Through: Mr. Rajiv Nayar, Sr. Adv. with Mr. Sandeep Mittal, Advocate for Defendant No.1 Mr. Kamal Sawhney, Advocate for Defendant No.2
MANMOHAN SINGH, J.
1. By this order, I shall dispose of the plaintiffs application under Order 39 Rules 1 and 2 read with Section 151 CPC being I.A. No. 14113/2008 praying that the defendants by themselves, their officers, servants and agents be restrained from dealing with either themselves or through any third party from assigning, licensing or releasing of film titled Aashayein and from issuing any order/letter allowing and authorizing release of print of the film titled Aashayein in favour of any third party.
2. The plaintiff has filed a suit for recovery, grant of permanent injunction and decree for sale against the two defendants Percept Ltd, Defendant No.1 and Super Cassettes Industries Ltd, Defendant No.2 who are co-producers of the film in question.
3. The plaintiff claims to be established in the year 2006 as a part of Reliance Anil Dhirubhai Ambani Group, which is Indias top 3 business houses on all major financial parameters and has net assets in excess of Rs.1,34,000 crores and net worth to the tune of Rs.58,000 crores. The plaintiff claimed to have an extensive production partners with its creative talents in India, namely Farhan Akhtar, Vidhu Vinod Chopra, Rituparno Ghosh, Priyadarshan, Maniratnam, J.P. Dutta, Madhur Bhandarkar, Shyam Benegal, Sudhir Mishra, Indra Kumar, AB Corp. etc.
4. The controversy in the present case started with the plaintiffs association with the defendants who are co-producers of the film Aasheyein in relation to the project entered between the parties involving acquisition of films, distribution rights etc around May, 2008. It was agreed that the plaintiff will distribute rights of film Aashayein to be directed by Nagesh Kukunoor starring John Abraham and others for world-wide territories and for use of media platforms and formats.
5. The plaintiff alleges that in May, 2008 he was shown a one minute teasor (short promotional clip) of the proposed film which suggested the film to be a commercial film. The Plaintiff thereafter, asked the Defendants to provide a written synopsis on the subject matter and treatment note of the film.
6. By way of e-mail dated 21st May, 2008 Defendant No.2 forwarded a written synopsis on behalf of both the defendants detailing the films subject matter. The synopsis is detailed below: Aashayein is a story of a compulsive gambler who discovers new meanings of fortune and life through a dramatic turn of events. Aashayein is a tale of Rahuls journey from darkness to light. A journey about love, hate, life, death and above all hope. The brilliant storytelling and simplistic direction style of Nagesh Kukunoor. The film is about the triumph of human spirit. John Abraham in his strongest performance yet, Aashayein is a shining example of commercial cinema that does not compromise on quality. An outstanding soundtrack by Salim-Sulaiman.
7. It is pleaded in the plaint that a perusal of synopsis shows that the film was proposed to be a commercial film venture. It is further contended that there was representation by the defendant to the plaintiff that the price cost of the film shall be Rs. 18 crores and it was assured that the defendants will not deviate from the story line.
8. The plaintiff further alleges that on the basis of the representation made by the defendants, the plaintiff on 11th June, 2008 entered into a Distribution agreement (Term Sheet) with the defendants for distribution of certain rights in the film such as theatrical and non-theatrical rights, world satellite rights, television rights, overseas home video rights etc. As per clause 32 of this agreement, the parties agree to enter into the Long Form Agreement for the said film within 30 days of this agreement and it shall be valid and binding on both the parties until Long Form Agreement is signed. It is further submitted by the plaintiff that on 13th June, 2008 the plaintiff made payment equivalent to 30% of the total amount totaling to Rs.4,01,40,894/- including applicable value added tax and after deduction of tax deducted at source payable under the Term Sheet in equal proportion to the defendants.
9. The complete film was shown to the plaintiffs representatives on 14th July, 2008 who discovered that the film does not resemble in any way with what had been represented to the plaintiff and the same is contrary of representation of 21st May, 2008 supplied to the plaintiff. It is further pleaded that the film was not even commercial in character and completely departed from what had been represented by the defendants. This fact was conveyed to the defendants many a times on phones and in meetings.
10. The plaintiff has also pleaded fraud and misrepresentation by the defendants on the plaintiff on the following grounds :- (i) the synopsis provided by the defendants was a way to misrepresent and play a fraud on the plaintiff; (ii) the production cost of the film did not appear to be more than Rs. 5 crores as opposed to the claim of Rs. 18 crores and (iii) the defendants have willfully and with fraudulent intent misled the plaintiff to sell the film as commercial film and also suppressed the fact that the protagonist of the film i.e. the character played by John Abraham suffered from cancer and the story of the film revolved around his subsequent zest of his remaining life whereas the synopsis of the film sent to the plaintiff laid great emphasis on weak character being a compulsive gambler discovering new meaning of fortune through dramatic turn of events.
11. The plaintiff has alleged in the plaint that defendants sent e-mail dated 22nd July, 2008 and two letters dated 1st August, 2008 and 27th August, 2008 demanding payment of second installment as per clause 7 of the Term Sheet but the plaintiff expressed its disappointment during telephonic discussion with the defendants and in the meeting held between Ms. Sweta Agnihotri and Ms.Neha Damani, representatives of the plaintiff and Mr. Bhushan Kumar and Mr. Ajay Kapoor, representatives of defendant No.2, explained the situation and demanded refund of monies.
12. It is pleaded in the plaint that on 15th September, 2008 the defendant No.2 agreed in its letter that the money paid by the plaintiff to the defendants would be refunded by the 1st week of November, 2008 or prior to the release of the film. It is submitted by the plaintiff that during the third week of November, 2008 the plaintiff learnt that the defendants have no intention of honouring the said undertaking of 15th September, 2008 and have come to know through trade channels that the defendants are planning to release the film.
13. The plaintiff, thereafter sent a letter dated 17th November, 2008 calling upon the defendants to refund the money paid and also explained various reasons about the contract being vitiated. One of reasons is the interview of the lead character of the film, John Abraham which was published in Mumbai edition dated 12th November, 2008 of the English daily, namely, HT Caf, Mumbai. Relevant portion is extracted hereunder :- Will Aashayein be your next release I hope. Its one of my most honest films. .... But it has no takers after Big Pictures reneged on the deal. Even before the global meltdown, Percept took the film back. I am happy because they know how to market such films. Its not a run- of-the-mill product that needs a carpet bomb release. It has to be nurtured. Hey, it cost just Rs.3 crore, they can get the money back from the sale of satellite rights alone....
14. The plaintiff claimed in the plaint that in view of the fraud and misrepresentation made by the defendant, the plaintiff continues to exercise lien over the film and the defendants have no right to distribute the film with the third parties for exploiting the distribution rights.
15. The present suit has been filed by the plaintiff on 20th November, 2008 which was listed on 21st November, 2008 when the statement was made by defendants to the effect that they had no intention for releasing the film Aashayein till 9th January, 2009.
16. Per contra, the contention of the defendants is that the plaintiff has filed the suit for recovery of a definite sum of money and has not even claimed specific performance of the Term Sheet and has given up its right in the film, therefore, the plaintiff cannot claim any interim orders restraining the release of the film. The plaintiff owes the defendants the minimum guarantee amount of Rs.13,75,00,000/- as contractually agreed between the parties as set out in clause 7 of the Term Sheet and the present suit has been filed to wriggle out of the said obligation.
17. It is further averred in the written statement that the entire story was narrated to the plaintiffs representative by e-mail dated 21st May, 2008 and many communications were exchanged between the parties in this regard. It is contended that the entire story line was made public on the website, Bollywood Hungama and journals as early as February, 2008. On the website on 19th February, 2008, following extract appeared :- By Bollywood Hungama News Network, February 19, 2008 11:45 IST The story revolves around Rahul Singh (John Abraham), a compulsive gambler who wins Rs.20 million from a bet and throws a party to celebrate. Everyone has a good time drinking and partying till late night during which Rahul proposes to Nafisa (Sonal Sehgal). He announces their engagement to all present, then collapses on the floor. In hospital, he learns that he has only 90 days to live. Wanting to make the most of his last days, he leaves everything behind and moves into a soothing hospice. The inmates he meets change his outlook on life. As his relationships grow with each one of them, Rahul tries to rise above his own needs and live life to the fullest, learning from the courage of those around him.
18. It was pleaded that when the said outlines were freely available on the prominent website as early as on 19th February, 2008; the allegation of the plaintiff about misrepresentation is not believable.
19. The defendants submitted that admittedly the plaintiffs representatives saw the film on 14th July, 2008. However, the first written communication about displeasure and dissatisfaction of the script is received by the defendants from the plaintiff only on 17th November, 2008. It is also averred that infact the plaintiff had second thought about the film, therefore, the plaintiff is looking for excuses to back track from his contractual obligations.
20. In the written statement and reply, the defendants have not denied that during the first week of September, 2008 the representatives of the plaintiff, Bhushan Kumar and defendant No.2 Ajay Kapur and other representatives of defendant No.1 had a meeting wherein the plaintiff expressed its desire to back out from the agreement/Term Sheet but it was clarified in the meeting to the plaintiff that the defendants would be compelled to impound the upfront consideration as per clause 20 of the Term Sheet.
21. As regards the first contention of the plaintiff is concerned that the defendant has not spent more than Rs 5 crores on the film although an assurance was given to the plaintiff that the total investment of the film would be Rs.18 crores, no evidence in this regard has been produced by either of the parties. There are three versions made by the parties in this regard, the first one is that at the time of settlement of terms, the plaintiff was intimated by the defendants that the investment on the film shall be Rs. 18 crores, second version made by the plaintiff is that after preview of the film, it appeared that investment on the film is not more than Rs.5 crores and last one is of interview of film actor John Abraham where he mentioned that the cost of the film is Rs. 3 crores. In view of the different statements made by the parties, I hold that the budget of the film in question cannot be adjudicated at the prima facie stage in the absence of any evidence or accounts showing the actual expenses incurred on the film. All the three allegations and counter allegation are necessarily to be tested during the stage of trial.
22. Second contention of the plaintiff is that the film made by the defendants is not on the basis of written synopsis provided. The plaintiff has argued that there was fraud and misrepresentation by the defendants and thus, the agreement got vitiated as the nature of the film was represented to be commercial venture which is contrary to the written synopsis. On the other hand, it is pleaded by the defendants that there is a very small part in the film where the film actor John Abraham suffered from cancer, otherwise, it is commercial venture and at the time of negotiation, the entire story of the film was narrated to the plaintiff. It appears from pleadings and documents that after watching the complete film on 14th July, 2008, there is no written communication by the plaintiff to the defendant raising its allegations.
23. The misrepresentation about the commercial nature of the film cannot be defined by anyone. The commercial nature can have a very vast meaning which may be judged on the subjective satisfaction of a person and it would vary from case to case. Without releasing a film, one cannot expect to comment on the fact that the said film is commercial in nature or not. The commercial success of any venture would be contingent on the fact when it is put into the market. Therefore, at this stage, no conclusion can be arrived and can only be adjudged at the time of trial.
24. The next contention made by the plaintiff is on letter dated 15th September, 2008 written by the defendant No.2 to the plaintiff. The contents of letter are reproduced herein below :- To, M/s. Reliance Big Entertainment Private Limited Reliance Energy House, Santacruz (East), Mumbai-400 055 Sub : -Term Sheet dated 11th June, 2008 with regard to Distribution Rights of the film AASHAYEIN Dear Sir, This has reference to the Term Sheet executed on 11.06.2008 amongst M/s Super Cassettes Industries Ltd. and M/s. Percept Pictures (Producer 1 and Producer 2) of one part and Reliance Big Entertainment Pvt. Ltd. (Distributor) of the other part. Pursuant to execution of the above Term Sheet, certain Rights regarding the above film were assigned in your favour against payment of consideration on terms and conditions as agreed in the Term Sheet. Subsequent to execution of the above referred Term Sheet, you also paid the advance amount as agreed. However now you have expressed a desire to quit out of the above referred agreement. In view of the same it would be appropriate to have a joint meeting of all the three parties to above referred agreement in order to seek an amicable solution to the situation which may also include refund of the money in 1st week of November, 2008 or before theatrical release of the captioned film. Thanking you, Yours faithfully, We agree and confirm For Super Cassettes Industries Ltd. For Reliance Big Entertainment Pvt. Ltd. Sd/- Sd/- Managing Director/ Authorised Signatory Authorised Signatory
25. Both the parties have put their heavy reliance on this letter dated 15th September, 2008. The plaintiff tried to establish some admissions on account of acknowledgment/assurance given by the defendant about the refund of money in addition to resolving the matter amicably. On the other hand, defendants have relied on the same letter to evade the liabilities on the ground that a letter was merely a proposal of settlement where it was alleged that the defendant may consider various options which may also include return of money. But, not in any way, leads to any assurance for refund of money. After hearing the parties I find that law of admission is well settled that the judgments on admissions are made where the admissions are unequivocal and unambiguous in nature. At this prima facie stage when both the parties are giving different interpretation to the letter, in the absence of clear admission, I find it difficult to allow the arguments of admission at this stage.
26. I have heard learned counsel for the parties and have given my consideration on submissions of the parties.
27. The first and foremost question involved in this matter for my consideration is as to whether the ad interim injunction prayed by the plaintiff is to be granted or not and whether the plaintiff has made out a prima facie case in his favour for grant of an injunction to release the film and in case the injunction is not granted what irreparable loss would be caused to the plaintiff.
28. No doubt, the injunction being an equitable remedy is granted by the court in exercise of its judicial discretion and has to be considered from various facets which arise in particular set of circumstances in each matter. There may be cases in which grant of an injunction (temporary or permanent) will only meet the ends of justice and an alternative safeguard for the preservation of rights of the challenging party cannot at all be thought of. There may also be cases where the remedy of injunction has to be made flexible and adjustable to the situations arising in each case. I feel that the present case is of such a nature where during the pendency of the suit, balance between the parties is to be maintained.
29. The principle of law relating to temporary injunction during pendency of the suit is well recognized in the decision of the Supreme Court in Dalpat Kumar vs. Prahlad Singh AIR 1993 SC 276. The relevant portion of the observations of the Supreme Court in the said case refers as under:- ..It is settled law that the grant of injunction is a discretionary relief. The exercise thereof is subject to the Court satisfying that: (1) there is a serious disputed question to be tried in the suit and that an act, on the facts before the court, there is probability of his being entitled to the relief asked for by the plaintiff/defendant. (2) The courts interference is necessary to protect the party from the species of injury. In other words, irreparable injury or damage would ensue before the legal right would be established at trial; and (3) That the comparative hardship or mischief or inconvenience which is likely to occur from withholding the injunction will be greater than that would be likely to arise from granting it. The Supreme Court further held: Prima facie case is not to be confused with prima facie title which has to be established, on evidence at the trial. Only prima facie case is a substantial question raised, bona fide, which needs investigation and a decision on merits. Satisfaction that there is a prima facie case by itself is not sufficient to grant injunction. The court further has to satisfy that non-interference by the court would result in irreparable injury to the party seeking relief and that there is no other remedy available to the party except one to grant injunction and he needs protection from the consequence of apprehended injury or dispossession of apprehended injury or dispossession. Irreparable injury, however, does not mean that there must be no physical possibility of repairing the injury, but means only that the injury must be a material one, namely on that cannot be adequately compensated by way of damages. The third condition also is that the balance of convenience must be in favour of granting injunction. The court while granting or refusing to grant injunction should exercise sound judicial discretion to find the amount of substantial mischief or injury which is likely to be caused to the parties, if the injunction is refused and compare it with that it is likely to be caused to the other side if the injunction is granted. If on weighing competing possibility or probabilities of likelihood of injury and if the court considers that pending the suit, the subject matter should be maintained in status quo, an injunction would be issued. Thus the court has to exercise its sound judicial discretion in granting or refusing the relief of ad interim injunction pending the suit.
30. Learned senior counsel for the plaintiff, Dr. A. M. Singhvi has argued that there is no delay on the part of the plaintiff as the film was shown to the plaintiff on 14th July, 2008. After that from time to time, the plaintiff intimated to the representatives of the defendants telephonically and by personal meetings and raised its grievances. On 15th September, 2008, the defendant no. 2 agreed to refund the money by first week of November, 2008. Therefore, the legal action was not initiated and it was only during the third week of November, 2008 when the plaintiff came to know from the trade circle that the defendants are planning to release the film in the month of December, 2008, the present suit has been filed on 20th November, 2008.
31. Learned senior counsel for the defendants, Mr. Rajiv Nayyar has argued that after watching the film on 14th July, 2008, no disappointment/misrepresentation or fraud as alleged of any kind was made in writing in any communication by the plaintiff. His contention is that if the plaintiff was not satisfied with the film made by the defendants, why he has waited for more than two months to bring the action.
32. In my view, there is a delay for bringing the action, as the plaintiff, on 14th July, 2008 was aware that the film was not made as per written synopsis. There is no communication in writing or evidence on record to suggest any protest made by the plaintiff for two months except oral statement made by the plaintiff. It is also not in dispute that on receipt of letter dated 15th September, 2008 by the defendant No.2 when a proposal of settlement was offered, even thereafter, the plaintiff did not either approach the defendants or has taken legal recourse. The first communication in writing came into the picture only on 17th November, 2008 when plaintiff issued notice.
33. The concept of fraud and misrepresentation is clearly laid down in the contract and once the contract is vitiated by fraud or misrepresentation, it is a settled law that the party may either rescind the contract or recover damages or both. Even otherwise, in the present case, the damages would be more appropriate remedy than passing injunction because it would not only put the parties to the proceedings at loss but also cause hardship and losses to the other persons whose monies are invested in the film.
34. It is not disputed by any of the parties in this matter that the film is complete and ready for release. The rights of the third parties i.e. actors, investors, exhibitors etc are also involved. It would be harmful for both the parties if at this stage, the court passes the orders stopping the release of the film. It would not be even in equity to stop the progress of such a commercial activity unless the court is satisfied that there is no other way of granting justice to the parties except by a preventive injunction.
35. In the recent order passed by the Division Bench of this Court in FAO (OS) No. 464/2008 entitled Gaurav Duggal vs. Rabbi Sheregil in similar circumstances, the Division Bench had refused the interim injunction on the ground that the suit was filed two days prior to the release of the film.
36. Prima facie, it cannot be said that the plaintiffs plea regarding the misrepresentation are without any force. However, while considering the grant of interim injunction, the court has to see the prima facie position in the matter. The misrepresentation and fraud are the prerequisites for vitiating the contract. The contract becomes voidable at the option of the party. The plea of misrepresentation and fraud has to be proved by way of documents which should also be tested in view of the allegation and counter allegations of the parties at the stage of trial.
37. In M/s. Gujarat Bottling Co. Ltd. and others Vs. Coca Cola Company and others, AIR1995SC2372, it was observed as under:- 46. The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection has, however, to be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where the 'balance of convenience' lies. See : Wander Ltd. and Anr. v. Antox India P. Ltd. [1990] Supp. SCC 727 at pp. 731-32. In order to protect the defendant while granting an interlocutory injunction in his favour the Court can require the plaintiff to furnish an under taking so that the defendant can be adequately compensated if the uncertainty were resolved in his favour at the trail.
38. In Colgate Palmolive (India) Ltd. v. Hindustan Lever Ltd., (1999) 7 SCC 1, following observations are made by the Apex Court:- 15. Lord Diplock in Cyanamid case2 laid down the following guiding principles for the grant of interlocutory injunction: (1) The plaintiff must first satisfy the court that there is a serious issue to decide and that if the defendants were not restrained and the plaintiff won the action, damages at common law would be inadequate compensation for the plaintiffs loss. (2) The court, once satisfied of these matters will then consider whether the balance of convenience lies in favour of granting injunction or not, that is, whether justice would be best served by an order of injunction. (3) The court does not and cannot judge the merits of the parties respective cases and that any decision of justice will be taken in a state of uncertainty about the parties rights.
39. Again, in the case of S.K. Jain vs. P. Subba Rao, 33 (1987) DLT 334 at page 337 para 6, it was opined that the court has to strike the balance between the parties at the time of disposal of the injunction application which reads as under:- 6..I am of the view that these assurances and undertakings given by the defendant no. 3, are by way of additional guarantee for the payment of the amount due from the defendants. She is the wife of defendant no. 1 and the mother of defendant no. 2. By virtue of this writing, she had undertaken to pay a sum of Rs. 3,50,000.00 before the release of picture Jeete Hain Shan Se. She is under obligation to pay this amount to the plaintiff before she can be allowed to release the picture Jeete Hain Shan Se. It is the admitted case of the parties that the picture Jeete Hain Shan Se is going to be released shortly. In case the picture is released by the defendants without payment of the amount specified in the writing dated 6.4.1986 to the plaintiff, the plaintiff is likely to suffer irreparable loss. The balance of convenience is also in favour of the plaintiff because defendant no. 3 had expressly agreed to pay a sum of Rs. 3,50,000.00 before release of the picture. In the circumstances, I direct that the defendants will be entitled to release the film Jeete Hain Shan Se only after depositing a sum of Rs. 3,50,000.00 in this Court. Application is disposed of.
40. Bearing in mind the settled principles of law, I may now proceed for consideration regarding the balance of convenience involved in the matter. It would be unjust and inequitable to deny the interim injunction to the plaintiff without any term.
41. I hold that the plaintiff is not entitled for interim order restraining the defendants to release the film. In my view, the relief could be compensated for sufficiently in money and it is fit case, where the balance between the parties is to be maintained. A just and proper relief asked can be made by issuing the following directions :- 1. Both the defendants shall deposit 30% of total amount paid by the plaintiff in equal proportion (15% each) before this Court by way of FDR in the name of Registrar General, for the period of 12 months within seven days. Subject to this condition, the defendants shall be at liberty to release the film. 2. The defendants shall file an account showing all the dealings between themselves and their distributors and an account to furnish all the moneys realized by the exhibition of the film. Such filing of accounts should be done every quarter thereafter. The first statement of account shall be filed by 20th April, 2009.
42. The application is disposed of in the abovesaid directions. Dasti to both the parties.
Sd./- MANMOHAN SINGH, J.
January 23, 2009