Messrs.Emgeeyar Pictures Pvt. Ltd. v. Messrs.O.K.Films & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 15-9-2009CORAMTHE HONOURABLE MR.JUSTICE M.CHOCKALINGAMANDTHE HONOURABLE MR.JUSTICE R.SUBBIAHOSA Nos.265 and 266 of 2009andMP No.1 of 2009 in OSA 265 of 2009Messrs.Emgeeyar Pictures Pvt. Ltd.,Represented by its ManagingDirectorNirmala Ravindran9, Dhandapani StreetT.Nagar, Chennai 17. ..Appellant in both appeals/Plaintiff vs1.Messrs.O.K.Films Represented by its Proprietor R.V.Mani, Airlines Building 829, Mount Road, Chennai 2. ..1st Respondent in OSA 265/2009 and Respondent in OSA 266/20092.M/s.Raj Tele Films Ltd., represented by its Director M.Raajhendran *now known as M/s.VissaTelevision Net Work Ltd., Represented by its Director M.Ravindran 32, 2nd Street, Poes Road Teynampet, Chennai 600 018. ..2nd Respondent in OSA 265/2009Original side appeals preferred under Clause 15 of LettersPatent and Order XXXV Rule (1) of O.S. Rules against the order ofthis Court made in O.A.No.48 of 2009 in C.S.No.1101 of 2008 and inO.A.No.1231 of 2008 in C.S.No.1100/2008 dated 11.8.2009. https://hcservices.ecourts.gov.in/hcservices/ For Appellant: Mr.B.Kumar Senior Counsel for Mr.V.RameshFor Respondents: Mr.V.Thiageswaran for M/s.Waraon & Saikumar for R1 Mr.R.Krishnaswami Senior Counsel for Mr.K.Harishankar for R2COMMON JUDGMENT(Judgment of the Court was delivered by M.CHOCKALINGAM, J.)These two appeals challenge a common order of the learned SingleJudge of this Court made in O.A.No.48 of 2009 in C.S.No.1101 of 2008and in O.A.No.1231 of 2008 in C.S.No.1100/2008 dismissing the saidapplications.2.The Court heard the learned Senior Counsel for the appellant,the learned Counsel for the first respondent and also the learnedSenior Counsel for the second respondent.3.Pending the suit in C.S.No.1100/2008 the appellant/plaintifffiled O.A.No.1231/2008 for temporary injunction to restrain the soledefendant from dealing with the negative rights of the three Tamilfeature films (1) Nadodi Mannan (2) Adimai Penn and (3) Ulagam SutrumValiban including all and every copyright viz., 16mm and TV rights,etc., for entire world and in any other dimension or in any othermanner, while the appellant has filed O.A.No.48/2009 an applicationfor temporary injunction against the defendants therein inC.S.No.1101/2008 whereby he sought a permanent injunction to restrainthe defendants therein from dealing with the negative rights of theabove said three feature films including all and every copyrightviz., entire copyright, world negative right, sole exclusive andabsolute ownership right, distribution, exhibition and exploitationright in 35mm, 70mm, cinemascope and all other dimensions, throughout the world, world satellite rights, audio rights, CD, LCD, DVD,VCD, cable TV rights, pay channel right, dish antenna rights, worldhigh seas rights, world overseas TV rights, air born rights, DTHrights, paper view rights, video on demand rights, VHS rights, payTelevision rights, satellite pay television rights, direct to User(DTU) rights, laser disc, multimedia rights, cable TV, internet rightetc., for entire world and in any other dimension or in any othermanner. A counter was filed. The learned Single Judge on scrutinyof the available materials and hearing the submissions made,dismissed both the applications. Hence these appeals have arisen atthe instance of the appellant/plaintiff. https://hcservices.ecourts.gov.in/hcservices/

4.Advancing the arguments on behalf of the appellant, thelearned Senior Counsel Mr.B.Kumar would submit that admittedly therewas an assignment deed executed by the appellant in favour of thefirst defendant dated 25.1.1999 wherein it is stated that theconsideration for transfer of the world negative rights of the threefilms is Rs.18 lakhs and a sum of Rs.1 lakh alone was paid asadvance; that the balance of Rs.17 lakhs was agreed to be paid underClause 2(b) of the assignment deed on the appellant obtaining anddelivering to the first respondent the confirmed laboratory lettertransferring and delivering the entire copyright, world negativerights and all other rights detailed therein relating to the threepictures; that the most important clause is obtaining and deliveringthe confirmed laboratory letter; that in the instant case, noconfirmed laboratory letter was given to the appellant in favour ofthe first respondent O.K.Films; that the clause in a contract andthat too in a contract where copyright was assigned, the terms of thecontract have to be strictly construed; that if construed so, thelaboratory letter should contain a clause "transferring anddelivering the entire copyright, etc." and when no such laboratoryletter was given by the appellant in favour of the first defendant OKFilms, there was no transfer or delivery of the entire copyright andnegative rights; that apart from the advance of Rs.1 lakh, a sum ofRs.8 lakhs has been received and nothing more; that under the twoassignment deeds, the total amount payable was Rs.33 lakhs and thebalance due was Rs.24 lakhs; that the first defendant has miserablyfailed to honour the agreement and has committed a grave breach ofthe contract and hence he was not entitled to any right arising outof the assignment deed; that it is not correct to state that theassignment was complete and the copyright has been assigned in favourof the respondent; that the finding recorded by the learned SingleJudge is erroneous for the reason that under the provisions of theSale of Goods Act unless the balance of sale consideration was paid,the title in goods would not pass on to the purchaser or theassignor; that admittedly in this case, M/s.Raj Tele Films Ltd., hasexhibited two out of the three films in its TV network with piratedversion; that the respondents have given up their rights and theycould not seek the enforcement of the agreement as M/s.Raj Tele FilmsLtd., has chosen and accepted the alternative mode of performance;that the appellant was in no way concerned with any agreement betweenthe respondents; that once the appellant is able to show that noright has flown under the assignment dated 25.1.1999 in favour of thefirst defendant, there was no question of the first defendantassigning any right which he did not possess, in favour of the seconddefendant M/s.Raj Tele Films Ltd; that at the time when theassignment deed was executed, the question of copyright of threefilms was subjudiced and even the right of the appellant has notcrystallised and in fact, there was an order of injunction againstthe appellant obtained by the third party, and hence the appellant atany rate could not have conveyed or assigned the copyright; thatthere was no collusion between the appellant and the first defendant https://hcservices.ecourts.gov.in/hcservices/ as contended by the second defendant; that the letter of the firstdefendant dated 25.1.1999 conveyed no meaning and even if that letteris taken to be a concocted one, it will have no bearing on thedecision on the application for injunction since admittedly it is notthe case of M/s.Raj Tele Films Ltd., that the first defendant haspaid the whole consideration to the appellant and obtained thelaboratory letter as per the assignment deed dated 25.1.1999 betweenthe plaintiff and the first defendant; that the exhibition of thepirated version amounts to criminal breach of trust and all rightsflowing, even if it be true, under the assignment deeds werenullified because of the illegality committed by the second defendantM/s.Raj Tele Films Ltd. 5.Added further the learned Senior Counsel that so long as thefirst defendant did not perform the condition by making the balanceof consideration as found in the deed of assignment, he could not getany right under the assignment or he could convey to the seconddefendant any right by way of the alleged assignment; that thecopyright under the assignment dated 25.1.1999 will not operate; andthat the first defendant cannot claim any right under the agreementunless and until he has paid the entire consideration as foundtherein. 6.Placing reliance on Section 19(4) of the Copyright Act, 1957,the learned Senior Counsel would submit that non-exploitation of theright within a period of one year will result in the lapse of theassignment; that the first defendant as plaintiff filed a suit inC.S.No.795 of 2000 and also an application for injunction against theplaintiff, and the same was dismissed on 8.1.2001; that the allegedassignment by the first defendant in favour of the second defendantwas on 5.5.2000; that once the application filed by the firstdefendant against the plaintiff herein seeking interim injunction wasdismissed, refusing injunction in favour of the plaintiff against thedefendants in the present suits would create inconsistent situation;that under the circumstances, the plaintiff has made out a primafacie case for grant of interim injunction, and hence it has got tobe ordered by setting aside the order of the learned Single Judge.7.Advancing arguments on behalf of the first defendantM/s.O.K.Films, the learned Counsel Mr.T.Thiageswaran would submitthat as per the assignment made by the plaintiff in favour of thefirst defendant dated 25.1.1999, it is true that there was aconditional clause; but the condition has not yet been fulfilled;that the second defendant at the time of the assignment made by thefirst defendant in favour of the second defendant, knew about thesame and also about the pendency of the litigation, and thus the actof the second defendant in broadcasting the films in the TV networkwas not bona fide. https://hcservices.ecourts.gov.in/hcservices/

8.The learned Senior Counsel Mr.R.Krishnaswami appearing for thesecond defendant put forth his submissions in his sincere attempt ofsustaining the order of dismissal by the learned Single Judge.9.The Court paid its anxious consideration on the submissionsmade and looked into the materials available.10.Pending the suits C.S.Nos.1100 and 1101 of 2008, the formeragainst the first defendant and the latter against both thedefendants, the above two interim injunction applications came to befiled. It is not in controversy that the plaintiff and the firstdefendant entered into a deed of assignment on 25.1.1999. It is alsonot in controversy that the first defendant has executed a deed ofassignment in favour of the second defendant on 5.5.2000 on thestrength of the assignment entered into between the plaintiff and thefirst defendant on 25.1.1999. It is also admitted by the seconddefendant M/s.Raj Tele Films Ltd., that out of the three films, oneor two have been telecasted in its TV network. The grievanceventilated by the appellant/plaintiff is that the assignment made bythe first defendant in favour of the second defendant was inviolation of the assignment between the plaintiff and the firstdefendant dated 25.1.1999; and that even under the assignment, thefirst defendant did not get the rights assigned therein since thefirst defendant has not made the payment of the remainder of theconsideration which was a condition precedent. According to theappellant/plaintiff, as per the assignment deed dated 25.1.1999, theconsideration was fixed at Rs.18 lakhs, and a sum of Rs.1 lakh waspaid as advance, and the first defendant agreed to make payment ofthe remainder of Rs.17 lakhs which was a condition precedent forobtaining and delivering to the first respondent the confirmedlaboratory letter, and only thereafter, there would be a transfer ofthe copyrights, world negative rights, etc., and since the firstdefendant admittedly has not paid the entire balance ofconsideration, the assignment made under the agreement has not comeinto force. At the time when the matter was heard, the learnedCounsel for the first defendant has also admitted that the balance ofconsideration was not paid. 11.It is contended by the second defendant M/s.Raj Tele FilmsLtd. that the plaintiff and the first defendant are acting incollusion and all the contentions now put forth by both the plaintiffand the first defendant stand contra to the assignment deed enteredinto between them on 25.1.1999. Hence it has become necessary tolook into the deed of assignment entered into between the plaintiffand the first defendant on 25.1.1999. Clauses 1 and 2 of the deed ofassignment read as follows:"1.The ASSIGNORS hereby for the consideration set outhereunder paid and agreed to be paid, transfer, assign anddeliver, free from all encumbrances, in favour of the https://hcservices.ecourts.gov.in/hcservices/ ASSIGNEES herein, the Negatives, Master Positive Prints andthe Light Cards etc., relating to the aforesaid threepictures, to enable the Assignees to exercise all theaforesaid rights, for the entire world, for a perpetualperiod of 99 years from the date of execution of thesepresents, to be owned, enjoyed and exploited by them insuch manner, as they deem fit. (emphasis supplied)2.In consideration of the rights assigned as stated supra,the assignees have agreed to pay the consideration amountstated above, to the Assignors, in the following manner:-(a) Rs.1,00,000/- (Rs.One Lakh only) paid by cash, onsigning this agreement, being the advance payment;(b) Rs.17,00,000/- (Rs.Seventeen Lakhs only) being thebalance amount, shall be paid by the Assignees to theAssignors, on the Assignors obtaining and delivering to theAssignees, confirmed lab.letter transferring and deliveringthe entire Copyrights, World Negative Rights and all otherrights detailed above, relating to the abovesaid threepictures, for a period of 99 years from 25-1-99, in favourof the Assignees herein."12.The very reading of the above clauses would clearly indicatethat the assignment was made in consideration of the amount paid andagreed to be aid thereafter. Out of the said consideration of Rs.18lakhs, Rs.1 lakh was actually paid and Rs.17 lakhs was agreed to bepaid. The contention put forth by the appellant's side that thepayment of balance of consideration was a condition precedent forexercise of the rights of assignment given to the first defendantunder the deed cannot be countenanced for the simple reason that thedeed of assignment was given effect from the date of the assignmentdeed namely 25.1.1999. The following averments in the affidavitfiled in support of the application in O.A.No.48 of 2009 inC.S.No.1101/2008 stand contra to the contentions put forth by theappellant's side."But, later, C S 173 of 1999 was filed by Mrs.Kavitha andafter notice was served, the clause pertaining to thepayment of the balance in the deed of assignment dated25.1.1999 was mutually agreed to be altered to the effectthat full and final settlement will be made only after thedelivery of the court order declaring theplaintiff/applicant as owner of the copy rights grantedunder the assignment deed dated 25.1.1999. This wasconfirmed in the form of a letter dated 1.9.1999 by thefirst defendant/respondent addressed to theplaintiff/applicant. Thus for the deed of assignment dated25.1.1999 the condition for full and final settlement was https://hcservices.ecourts.gov.in/hcservices/ agreed to be at the time of delivery of court order, whilefor the deed of assignment dated 25.2.1999 the balance ofRs.14 lakhs has to be paid at the time of delivery of courtorder declaring the copy right of the plaintiff/applicantpertaining to that deed."13.The contention put forth by the first defendant that the actof the second defendant was unlawful and in breach of the agreementbetween them cannot be countenanced in view of the communicationaddressed by the plaintiff to the second defendant M/s.Raj TelevisionNetwork Ltd., dated 23.7.2001 which reads as follows:"In continuation of our agreement entered between us, wehave assigned the Entire World Satellite TV Rights and otherRights as per the agreement to you.The above three films are in dispute and we hope to get itcleared through Court in our favour before September 2001.Until such time we request you to wait till the court orderscomes to our hand. We also undertake to pay the Interestfor the money received as Royalty for the above saidpictures if the Court matter is extended beyond September30th, 2001."14.Much reliance was placed on a letter dated 25.1.1999 allegedto have been written by the first defendant to the plaintiff. It wascommented on the side of the second defendant that the said letterwas a fabricated one since both the phone numbers 42140493 and28521535 could not have been in existence in the year 1999 since thenumber starting by 4 was introduced in 2005 and the number beginningwith 2 was introduced only in 2002. Thus it would speak of thecollusion between the first defendant and the plaintiff.15.Apart from the above, the agreement of assignment enteredinto between the first defendant and the second defendant dated5.5.2000 would indicate that the said assignment was made by thefirst defendant in favour of the second defendant after receiving asubstantial consideration. In such circumstances, now the firstdefendant cannot be allowed to put forth a contrary plea. Thus itwould be quite clear that under the deed of assignment dated25.1.1999, the plaintiff has assigned the copyrights as found thereinin favour of the first defendant, and it also speaks of the mode ofpayment of the remaining part of consideration. Having agreed thatthe said deed would come into force on the date of deed of assignmenti.e., 25.1.1999, now the appellant/plaintiff cannot be allowed to saythat the deed will come into force only after the entire balance ofconsideration was paid. Equally having executed a deed of assignmentin favour of the second defendant by getting a substantialconsideration, the first defendant cannot be allowed to go back andsupport the case of the plaintiff. https://hcservices.ecourts.gov.in/hcservices/

16.In view of all the above, it can be well stated that theappellant/plaintiff has not made out a prima facie case for grant ofinjunction, and hence the learned Single Judge was correct indismissing the applications. There is no infirmity or illegality inthe order of the learned Single Judge.17.Accordingly, both these appeals are dismissed confirming theorder of the learned Single Judge and leaving the parties to beartheir costs. The observations made above will not in any way standin the way of the trial Court deciding the case on merits of thematter. Consequently, connected MP is closed. Sd/Asst.Registrar/true copy/Sub Asst.RegistrarnsvTo The Sub Assistant Registrar, Original Side, High Court, Madras.+ 2 c.cs. to Mr. Srinath Sridevan, Advocate. S.R.No.47292.+ 2 c.cs. to Mr. V. Ramesh, Advocate. S.R.No.47152. OSA Nos.265 and 266/2009CK (CO)GSK 22.09.2009.