IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 29-06-2012 CORAM THE HONOURABLE MR.JUSTICE R.S.RAMANATHAN O.A.No.601 of 2011 and A..Nos.3288 to 3290 of 2011 M/s.STUDIO GREEN, Rep. by its Prop. Mr.K.E.Gnanavel Raja : Applicant vs. 1.M/s.Reliance Big Picture, (A division of Reliance Big Entertainment Pvt. Ltd.,) Having office at No.6, Raja Mannar Street, G.N.Chetty Road, T.Nagar, Chennai-17. 2.M/s.Reliance Entertainment, 5th Floor, 49/50, Maruti Chambers, Veera Desai Extn. Road, Off New Link Road, Andheri (West), Mumbai-400 053. : Respondents Prayer: Petition filed under Order XIV Rule 8 of O.S. Rules r/w section 9(ii)(d) of Arbitration and Conciliation Act, 1996 to grant an ad-interim injunction to restrain the respondents or their men or the agent or the successors or the assigns or the person claiming through them from releasing or exploiting or using the Film SINGHAM (Hindi) Version to the cine businesses pending disposal of the arbitration proceedings. For Applicant : Mr.G.Rajagopal Senor Advocate for V.Manohar For Respondents : Mr.A.L.Somayaji Senior Advocate for Mr.K.Manoj Menon O R D E R
The case of applicant is that the applicant conceived and produced the film title 'SINGAM' in Tamil language and on seeing the potential advantages, the 1st respondent approached the applicant to associate itself with the production of the film subject to certain terms and on 07.05.2008, a film production agreement was entered into between the applicant and the first respondent, by which the first respondent agreed to provide finance for the film and it was agreed that the profit and loss shall be shared in the proportion of 60:40 between the applicant and the first respondent respectively. It is also agreed that the applicant and the first respondent will jointly hold the intellectual property right in the film for an initial period of 2 (two) years from the date of release of the film and the first respondent will provide monthly statement of revenues along with profit.
2.It is further stated that addendum to the film production agreement, dated 7th of May 2008 was entered on 01.07.2009 between the applicant and the first respondent, by which the parties agreed to share the profit and loss in the proportion of 51:49 between the applicant and the first respondent respectively. Further addendum to the film production agreement dated 7th May 2008 was also entered into on 18.03.2010 and as per the agreement clause 12, if the first respondent undertakes dubbing and/or remake of the film in any language, other than Tamil and Telugu, then the revenue generated from the exploitation of such dubbed/remade versions less the actual cost incurred including but not limited to dubbing/remaking, payment of royalties to the Directors, script/story writer, Music Director and other Technicians, etc and the resultant surplus shall be shared between the parties in the ratio of 75:25, i.e. 75% for the first respondent and 25% for the applicant.
3.According to the applicant, contrary to the terms of agreement, the respondents with the connivance of SUN TV Network Limited started producing the film in Hindi under the same title 'SINGAM' without incorporating the logo and the name of the applicant in the production title and advertisement for the Hindi film Singam and according to the reports received by the applicant, the first respondent has sold the film with a profit of more than Rs.50 crores and therefore, as per the agreement, dated 18.03.2010, the respondents are liable to pay 25% of the profit in Hindi remake of Tamil film 'Singam' and therefore, the respondents are bound to pay Rs.12 crores and filed C.S.No.461 of 2011 seeking for a direction, directing the respondents to pay a sum of Rs.12,50,00,000/- towards the share in the quantum of income derived in the venture 'Singam' film in Hindi and for injunction restraining the respondents from releasing or exploiting or using the film 'Singam' (HINDI) version and furnish the actual and correct accounts and for mandatory injunction directing the respondents to incorporate the logo and the name of the applicant in the production titles and advertisements, in case of releasing the film. In that suit, an application under section 8 of the Arbitration and Conciliation Act was filed by the respondent in A.No.3112 of 2011 stating that having regard to the arbitration clause in the agreement, the suit will not lie and that petition was allowed by decree and judgment, dated 19.07.2011. Immediately, the applicant filed the above O.A.No.601 of 2011 for injunction restraining the respondents from releasing or exploiting or using the film 'Singam' pending disposal of the arbitration proceedings and also filed application No.3288 of 2011 for a direction, directing the respondents to deposit a sum of Rs.12,50,00,000/- towards the tentative share arrived at the quantum income generated in the venture 'Singam' film in Hindi and filed Application No.3289 of 2011 for mandatory injunction, directing the respondents and their men or the person to incorporate the logo and the name of the applicant in the production titles and advertisements of the Hindi film and filed application No.3290 of 2011 to direct the respondents to furnish the actual and correct accounts in respect of the entire production, sale, exploitation and other related income derived from the film SINGAM (Hindi version).
4.The respondents filed a detailed counter repudiating the claim of the applicant and contended that the prayer sought for in O.A.No.601 of 2011 has become infructuous as the film was released on 22nd July 2011 and further contended that the relief of mandatory injunction in an Application No.3289 of 2011 has also become infructuous as the film has already been released and the relief sought for in Application No.3290 of 2011 cannot be granted as the same is the subject matter of arbitration and during the arbitration proceedings, if any direction is given by the arbitrator to produce the accounts, the same can be considered by the respondents and therefore, the relief prayed for in Application No.3290 of 2011 cannot be considered.
5.It is further contended that in respect of the relief prayed for in Application No.3288 of 2011 is concerned, the applicant is not entitled to any share of profit, much less a sum of Rs.12,50,00,000/- as claimed by them in the application.
6.It is stated that the first respondent entered into an agreement on 20.03.2010 with SUN TV Network Limited, by which the intellectual property right held by the respondents for the film Singam' Tamil was assigned to SUN TV Network and as per the assignment, the sole and exclusive theatrical exploitation rights of cinematography film 'Singam' in Tamil language for India was assigned to Sun TV Network Limited and the sole and exclusive intellectual property right, excluding the territory of Andhra Pradesh was also assigned to SUN TV Net Work under a separate agreement, dated 20.03.2010.
7.It is further stated that as per clause 14 of the said agreement, the respondents and SUN TV Network Limited agreed that if either of them undertakes dubbing and or remake of the subject mentioned film in any language other than Tamil and Telugu, the resultant surplus after meeting expenses shall be shared between the parties in the ratio 50:50 and it is further stated that under the agreement, dated 20th June 2011 assigning the transfer rights for the purpose of remake and dubbing the Tamil film into Hindi all rights were conveyed to the first respondent for a consideration of Rs.75,00,000/- and therefore, as per the agreement, dated 18.03.2010 between the parties, the respondents are liable to pay 25% of the said amount of Rs.75,00,000/- and accordingly, the applicant is entitled to receive Rs.18,75,000/- and the applicant is not entitled to claim any sum more than that.
8.It is further stated that the remake of Bangali and Oriya language was assigned for a sum of Rs.5,00,000/- and 50% of the amount, namely Rs.2,50,000/- was paid to SUN TV Network Limited and out of 2,50,000/- being the share of the property to the respondent, 25% in that amount, namely, 56,250/- was paid to the applicant, after deducting TDS by cheque No.003440, dated 9th September 2010 drawn on Yes Bank Limited and that was acknowledged by the applicant. Similarly the respondent sold the remake rights of the Singam tamil film to Kannada for a sum of Rs.1,00,000/- and the applicant share of Rs.25,000/- was paid through cheque No.004488 drawn on Yes Bank and the same was also acknowledged by the applicant and therefore, the applicant is only entitled to the share of profit received by the respondents and as stated supra, the respondents sold the right for Rs.75,00,000/- and 25% of that was offered to the applicant and therefore, the applicant cannot claim Rs.12,50,00,000/-.
9.Mr.G.Rajagopal, the learned Senior counsel appearing for the applicant submitted that except the Application No.3288 of 2011, the other applications have become infructuous as the film was released before the applicant got an order of injunction in this court and also submitted that the relief of mandatory injunction, directing the respondents to furnish the actual account is a subject matter of arbitration and that cannot be considered in this litigation. Nevertheless, the learned Senior counsel appearing for the applicant submitted that the respondents cannot be heard to say that as per the agreement, the applicant is entitled to 25% of the profits arrived at from the remake of Tamil film 'Singam' into other languages, except Tamil and Telugu and a fraud has been practiced upon the applicant by the respondents by entering into an agreement with Sun TV Network Limited, by which they assigned the intellectual property right of Tamil film 'Singam' to Sun TV Network Limited and also assigned the right, except Tamil and Telugu to Sun TV Network Limited and agreed to receive 50% of the profit and latter, they entered into an another assignment deed from SUN TV Network Limited for consideration of Rs.75,00,000/- and claimed that the applicant is entitled to 25% of the said amount of Rs.75,00,000/- and not entitled to any profits from Hindi remake of the film 'Singam'.
10.He further submitted that the details of collection taken from Internet would prove that the film 'Singam' Hindi version is a box office hit and the respondents are getting profits more than Rs.100 crores and the applicant tentatively estimated the profit at Rs.50 crores and claimed their share as per the agreement, dated 08.03.2010 and therefore, the respondents may be directed to pay a sum of Rs.12,50,00,000/-.
11.On the other hand, Mr.A.L.Somayaji, the learned Senior counsel appearing for the respondents submitted that the prayer in application No.4288 of 2011 is similar to the relief sought for under Order 38 Rule 5 CPC and the applicant indirectly seeks direction to furnish the security and that cannot be entertained in an application under section 9 of the Arbitration and Conciliation Act and as per the law laid down by the Honourable Supreme Court in the judgment reported in 2007(7) SCC 125, in the matter of Adhunik Steel Ltd vs. Orissa Manganese and Minerals Pvt. Ltd., section 9 of the Arbitration and Conciliation Act is not independent of the well known principles governing the grant of an interim orders that generally govern the courts. Therefore, unless the applicant brings his case within the parameters under Order 38 Rule 5 of CPC, he is not entitled to the relief prayed for. He also relied upon the judgment reported in (2008)2 SCC 302 in the case of Raman Tech. & Process Engg. Co., and another vs. Solanki Traders, in order to claim attachment before judgment, the plaintiff has to prima facie prove that his claim is bona fide and valid and also satisfy the court that the defendant is about to remove or dispose of the whole or part of his property, with the intention of obstructing or delaying the execution of any decree that may be passed against him. He further submitted that no allegation has been made against the respondents by the applicant in the application and the respondent company is a reputed film manufacturing company and without proving the essential ingredients under Order 35 Rule 5 CPC, it is not open to the applicant to ask for the relief of directing the deposit for a sum of Rs.12,50,00,000/- before the conclusion of arbitration. According to him, the applicant is not entitled to claim any money over the profits received by the respondents company by the release of Hindi film and the respondents received a sum of Rs.75,00,000/- as share of profit from SUN TV Network Limited for remaking of the film 'Singam' in Hindi and 25% of that amount is liable to be paid to the applicant and the respondent is willing to pay the same and that amount has also been deposited the same into Court. He, therefore, submitted that the petition is liable to be dismissed.
12.Heard both sides.
13.According to me, as rightly submitted by the learned Senior counsel appearing for the applicant, the application O.A.No.601 of 2011 and application NO.3289 of 2011 have become infructuions as the film was released even before any orders were passed in these applications. Hence, O.A.No.601 of 2011 and the application No.3289 of 2011 are dismissed as infructuous.
14.In respect of the relief prayed for in the application No.3290 of 2011 is concerned, as rightly submitted by the learned Senior counsel appearing for the respondents, the reliefs cannot be sought for under section 9 of the Arbitration and Conciliation Act and it is for the arbitrator to give direction, if he so desires and hence, the relief sought for in application No.3290 of 2011 cannot be granted and the application is dismissed.
15.In respect of the relief prayed in Application No.3288 of 2010 is concerned, as rightly submitted by the learned Senior counsel appearing for the respondents, the applicant is not entitled to claim that relief, unless he is able to bring his case within the parameters by Order 38 Rule 5 of CPC.
16.In the judgment reported in (2007)7 SCC 125, in the case of Adhunik Steels Ltd. vs. Orissa Manganese and Minerals Pvt. Ltd., the scope of section 9 of the Arbitration and Conciliation Act has been discussed in detail and held as follows:-
18. It is true that the intention behind Section 9 of the Act is the issuance of an order for preservation of the subject matter of an arbitration agreement. According to learned counsel for Adhunik Steels, the subject matter of the arbitration agreement in the case on hand, is the mining and lifting of ore by it from the mines leased to O.M.M. Private Limited for a period of 10 years and its attempted abrupt termination by O.M.M. Private Limited and the dispute before the arbitrator would be the effect of the agreement and the right of O.M.M. Private Limited to terminate it prematurely in the circumstances of the case. So viewed, it was open to the court to pass an order by way of an interim measure of protection that the existing arrangement under the contract should be continued pending the resolution of the dispute by the arbitrator. May be, there is some force in this submission made on behalf of the Adhunik Steels. But, at the same time, whether an interim measure permitting Adhunik Steels to carry on the mining operations, an extraordinary measure in itself in the face of the attempted termination of the contract by O.M.M. Private Limited or the termination of the contract by O.M.M. Private Limited, could be granted or not, would again lead the court to a consideration of the classical rules for the grant of such an interim measure. Whether an interim mandatory injunction could be granted directing the continuance of the working of the contract, had to be considered in the light of the well-settled principles in that behalf. Similarly, whether the attempted termination could be restrained leaving the consequences thereof vague would also be a question that might have to be considered in the context of well settled principles for the grant of an injunction. Therefore, on the whole, we feel that it would not be correct to say that the power under Section 9 of the Act is totally independent of the well known principles governing the grant of an interim injunction that generally govern the courts in this connection. So viewed, we have necessarily to see whether the High Court was justified in refusing the interim injunction on the facts and in the circumstances of the case. Therefore, the power under section 9 of the Arbitration and Conciliation Act is not independent of the well known principle governing the grant of interim orders that generally govern the courts, and the prayer sought for in the application No.3288 of 2011 is similar to the prayer sought for under Order 38 Rule 5 CPC. Therefore, unless the applicant is able to bring his case within the parameters under Order 38 Rule 5 CPC as already held by the Honourable Supreme Court in the judgment reported in (2008)2 SCC 302 in the case of Raman Tech. & Process Engg. Co and another, the applicant is not entitled to claim any relief.
17.Admittedly, no averment has been made in the petition stating that the respondent is likely to remove or dispose of the whole or part of his property or likely to segregate the accounts in respect of Hindi film 'Singam' and in the absence of such allegation, the applicant is not entitled to the relief of direction, directing the respondents to deposit a sum of Rs.12,50,00,000/- being the share of profit at this stage. Hence, the application No.3288 of 2011 is dismissed. However, I make it clear that I deliberately did not go into the merits of the case, whether the applicant is entitled to 25% of the entire profit received by the respondents from remaking of Hindi film as per the agreement, dated 18.03.2010, as the same is within the realm of arbitration and any finding given by me will prejudice the mind of the arbitrator. Similarly, whether the applicant is entitled to receive only 25% of the amount, which the respondent got from SUN TV Network Limited is also to be decided by the learned arbitrator. Hence, I am not expressing any view regarding the right of the parties to claim the share of profit in respect of Hindi film 'Singam'.
18.In the result, the petition is dismissed. No costs.
er R.S.RAMANATHAN.J er Pre-delivery Order made in O.A.No.601 of 2011 29.06.2012