India: Delhi High Court Rules: Intention Behind The Assignment To Be Perceived

Last Updated: 17 December 2008

Deciding the case of M/s International Film Distributors v. Sh. Rishi Raj [FAO (OS) No.81/2002] the Court opining on the relevance and ambit of an assignment stated:

"It is common knowledge that with the passage of time the television rights have assumed great importance. Whenever an agreement therefore has been arrived at the intention of the parties cannot be lost sight of. The intention of the parties will spell as to what exactly was agreed and intended
to be performed by the parties."

The appeal being decided upon was directed against the order passed by the learned Single Judge of the High Court of Delhi seeking return of the plaint as under Order 39 Rule 1 and 2 of the Code of Civil Procedure and a prayer under Order 7 Rule 10 of seeking injunction restraining M/s International Film Distributors, its employees, agents and representatives from in any manner interfering in the negative rights, sole and exclusive commercial and non-commercial video rights in all formats, including VCD, DVD, satellite and television rights (both terrestrial and extra-terrestrial), cable T.V. rights, pay T.V. rights and the available theatrical rights for all India and overseas territories i.e. the entire world including India, in the picture "KOHINOOR" till the disposal of the suit has been allowed. Mr. Rishi Raj is involved in the business of film distribution, exhibition and exploitation of cinematographic films and is also dealing in satellite right and negative rights of cinematograph films.

Cinematographic film 'KOHINOOR' was produced by M/s Republic Films Corporation, whose producer was declared insolvent and all of whose assets were taken over by the Official Assignee of Bombay High Court, including the entire negative rights in KOHINOOR as well as sole and exclusive commercial and non-commercial video rights in all the formats. The theatrical rights for All India and overseas territories i.e. the entire world including India were vested with the Official Assignee of the Bombay High Court.

M/s A.G. Exports, who were already enjoying the rights of the movie made an offer of Rs. 75,000/- on to the Official Assignee to acquire the sole and exclusive rights for a further period of 10 years. The Official Assignee made a similar offer to various people including Sh. Rishi Raj vide a letter that stated that the distribution rights of the said picture are perpetually held by another party (M/s Seth and Sayyed for U.P., Delhi, East Punjab, CPCI, Nizam Circuit) under an agreement and hence only other rights were available with the Official Assignee for sale. In response, Rishi Raj made an offer of Rs. 2 Lakhs and consequently made the highest bid to acquire the rights under an assignment. The plaint averred that after the grant of the said rights, Mr. Rishi Raj was entitled to deal with the picture Kohinoor in respect of the said rights and that nobody else could interfere in the said rights.

It was averred that prior to the said agreement Mr. Rishi Raj received a letter from International Films stating that they have also held certain rights in the said film, but did not enclose a copy of any agreement to the letter. In reply Rishi Raj conveyed that International Film had no right nor had their name ever appeared in the notice of auction along with other right holders. Therein they were also called upon them to produce a copy of the agreement, which International Film produced. The agreement held the signatures of International Films as well as that of the movie's producer asserting them to be right holders for overseas excluding India, Burma, Pakistan, Ceylon, Aden, Continent of Africa, Complete Middle East, West Indies, Fiji UK, and Greece and propounded an agreement with M/s. Republic Films Corporation to be existent.

Further, it was noted that when the said agreement was executed there were no satellite rights or video rights and thus International Film could not allege that they were video rights and satellite right holders. It was argued that International Film had no right to interfere in the issue but despite that they had been interfering by writing letters to leading satellite channels as a result of which Rishi Raj was not able to enjoy such rights. The Court noted that as per the allegation, though it is not recorded by the Official Assignee, International Film had only theatrical distribution right over certain overseas countries and thus could not claim any right in satellite channels. It was also argued that International Film had no authority to interfere in the said right as it would mean that Mr. Rishi Raj had paid the money but acquired nothing in return.

International Films alleged that Rishi Raj was carrying on the business of exploitation, exhibition and distribution of Hindi feature films throughout the world and through two agreements, the producer of the feature film Kohinoor granted to International Films the sole, exclusive and proprietary copyrights for exploitation, distribution and exhibition of commercial as well as non-commercial rights.

The Court emphasized the main questions to be centered on territorial jurisdiction and International Film' right in the picture Kohinoor. Considering the question of territorial jurisdiction, the Court took note of the relevant provisions of the Civil Procedure Code, 1908 as also those in the Copyright Act, 1957. The Court herein agreed with the single Judge and affirmed that the Hon'ble Court in question did possess territorial jurisdiction, in view of the place where the party resided and the cause of action having arisen..

As regards the copyright vesting in International Films, the Court found the agreement to reveal that M/s. Republic Film Corporation had assigned rights in favour of International Films for a consideration of Rs.10,000/-. Examining the clauses that followed, the Court found no infirmity in the prima facie opinion expressed by the learned single Judge that the phraseology 'all other rights attached to such exploitation' cannot be read to mean that the other rights referred only to television rights and that the
clause referred to Rishi Raj as the sole exclusive and perpetual copyright holder for exploitation of the films in question. Thus, it was concluded that the agreement executed would take effect in satellite telecast of the said film as well.

Taking into account the view elucidated in a number of decisions, the Court stated that a restrictive view could not be imposed on the enjoyment of copyright which is vested with the earlier exclusive as a fall out of technological evolution. The Court viewed that prima facie International Film had acquired the rights in the year 1961 by virtue of the agreement prior in time the rights acquired by the plaintiff. The acquisition of rights by Sh. Rishi Raj vide the Official Assignee was not denied and the rights accruing thereon were said to be conditional and not exclusive; International Film asserting its rights in a limited manner only i.e. for overseas countries as described in the agreement. The Court upheld the interim order in respect of other countries of the world including India to continue till the final disposal of the suit.

© Lex Orbis 2008

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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