The Entertainment business is witnessing litigation more rapidly than ever before. Reliance Big Entertainment Ltd. (hereinafter Big Entertainment) had filed an application praying for an interim injunction application against Percept Ltd. (Reliance Big Entertainment Pvt. Ltd. v. Percept Ltd. & Anr. 2009 (39) PTC 555(Del.)) praying that Percept, its officers, servants and agents be restrained from dealing with either themselves or through any third party from assigning, licensing or releasing of the movie titled Aashayein and from issuing any order/letter allowing the release of the print of the film titled Aashayein in favour of any third party. Big Entertainment had filed a suit for recovery, grant of permanent injunction and decree for sale against Percept Ltd and its co-defendant Super Cassettes Industries Ltd, the co-producers of the film in question.
Big Entertainment, an establishment as part of the Reliance Anil Dhirubhai Ambani Group, claimed to have extensive production partnerhips with the leading creative talent in India. Big Entertainment in association Percept, co-producers of the movie involving acquisition of films, distribution rights etc around May, 2008. It was agreed that Big Entertainment would 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.
Big Entertainment in the present suit alleged that he was shown a one minute teaser (short promotional clip) of the proposed film which suggested the film to be a commercial film. Big Entertainment then asked Percept to provide a written synopsis on the subject matter and treatment note of the film.
Via email, Super Cassettes sent them a written synopsis on behalf of both themselves and Percept detailing the film's subject matter. The plaint stated that a perusal of the synopsis reflected that the film was proposed to be a commercial film venture. They further contended that there was representation by Percept to Big Entertainment that the price cost of the film was Rs. 18 Crores and it was assured that Percept would not deviate from the story line.
Big Entertainment further alleged that on the basis of the representation made by Percept, they entered into a Distribution agreement (Term Sheet) with Percept such as distribution of certain rights in the film such as theatrical and non-theatrical rights, world satellite rights, television rights, overseas home video rights etc. They agreed to enter into a Long Form agreement within thirty days of the present agreement and stated that the same be valid and binding on both the parties until the Long Form Agreement was signed.
On viewing the complete film was, Big Entertainment' representatives discovered that the film did not resemble what they had been represented, rather being contrary to the representation earlier supplied. They further pleaded that the film was not commercial in character. This fact was conveyed to Percept many a times, consequent to which Big Entertainment pleaded fraud and misrepresentation by Percept.
Big Entertainment also alleged that Percept had sent an e-mail demanding payment of the second installment but the Big Entertainment explained its discontentment and demanded refund of money paid. Thereafter, Super Cassettes via a letter agreed to the same latest before the release of the movie, but Big Entertainment learnt of their lack of intent and their move to release the movie through trade channels. Thereafter, Big Entertainment claimed to have called upon Percept and Super Cassettes to refund the money paid and also explained various reasons owing to which the contract had been vitiated.
Big Entertainment claimed in the plaint that in view of the fraud and misrepresentation made by Percept, they continued to exercise lien over the film and that Percept had no right to distribute the film with third parties for exploiting the distribution rights.
Percept contended that Big Entertainment had filed the suit for recovery of a definite sum of money and not a specific performance of the Term Sheet and having given up its right in the film, cannot claim any interim orders restraining the release of the film. They stated that Big Entertainment owed them the minimum guarantee amount as contractually agreed and that the present suit was filed to wriggle out of the obligation. They also averred in the written statement that the entire story was narrated by an email and several communications had been exchanged in this regard. It was also contended that the entire story line had been made public on the website, "Bollywood Hungama" and journals as early as February, 2008. Percept also s submitted that admittedly Big Entertainment's representatives had seen the film on 14th July, 2008, but the first written communication about displeasure and dissatisfaction of the script was received much later. It is also averred that in fact Big Entertainment had second thoughts about the film, therefore, Big Entertainment was looking for excuses to avoid fulfillment of its contractual obligations.
As regards Big Entertainment' contention regarding Percept not having spent more than Rs 5 Crores on the film although a total investment of Rs.18 Crores, was assured, no evidence had been produced by either of the parties. Different statements to the effect were made and the Court held that the budget of the film in question could not be adjudicated at the prima facie stage in the absence of any evidence or accounts showing the actual expenses incurred on the film. Further, reverting to Big Entertainment's contention regarding the film being deviant of the written synopsis and the same being non-commercial, the film was represented to be commercial venture which is contrary to the written synopsis, they stated that the actor for a very small part in the film suffered from cancer, and that the entire story of the film was narrated to the plaintiff.
The Court opined that the misrepresentation about the commercial nature of the film cannot be defined by anyone. And that the term can have a very vast meaning which may be judged on subjective satisfaction of a person and would vary from case to case. The Courts stated that without releasing a film, one cannot expect to comment on the fact that the said film is commercial in nature or not, since 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 could be arrived at.
On the letter dated 15th September, 2008, both parties placed heavy reliance, to establish some admissions on account of acknowledgment/assurance given by Percept about the refund of money in addition to resolving the matter amicably. The letter was relied on by Percept to evade the liabilities on the ground that a letter was merely a proposal of settlement where it was alleged that they may consider various options including the return of money. The Court however opined that when both the parties are offering different interpretation to the letter, in the absence of clear admission, I find it is difficult to allow the arguments of admission at the prima facie stage.
Looking at the dicta behind the grant of an ad interim injunction, the Court looked at the well established principles. In consideration of delay, the Counsel for Big Entertainment argued that there was no delay on their part and that legal action was initiated as soon as they came to know from the trade circle that a release of the film was being planned. The Counsel for Percept argued that after watching the film, no disappointment/ misrepresentation or fraud as alleged was made in writing. His contention is that if Big Entertainment was not satisfied with the film made which is why he waited for more than two months to bring the action. The Court however stated that a delay in bringing the action was there since no communication in writing or evidence on record was there to suggest any protest made by the plaintiff for two months except the oral statement made by the plaintiff.
The Court opined that there was a question of the rights of third parties involved and that it would be harmful for both the parties if the court passes the orders stopping the release of the film, unless the court is satisfied that there is no other way of granting justice to the parties except by a preventive injunction.
Bearing in mind the settled principles of law, the Court considered the question of balance of convenience involved in the matter and held that Reliance Big Entertainment was not entitled to interim injunction without any term. The Court held that the relief could be compensated sufficiently monetarily; thereby maintaining the balance of convenience between the parties is to be maintained. In this pursuit, the Court directed that Percept and Super Cassettes deposit 30% of total amount paid by Big Entertainment in equal proportion (15% each) before this Court by way of a FDR in the name of Registrar General, for the period of 12 months within seven days.
Subject to this condition, Percept and Super Cassettes were said to be at liberty to release the film. In addition, they were also ordered to maintain accounts for all the dealings between themselves and their distributors and an account to furnish all the money realized by the exhibition of the film, every quarter.
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