A.a. Associates v. Prem Goel & Others

V.S. Aggarwal, J.

1. M/s. A.A. Associates, plaintiff is a registered partnership. It is carrying on business of film distribution, exhibition and exploitation of cinematographic films in a the territory of Delhi and Uttar Pradesh. It has filed the present suit for recovery of Rs. 5 lakhs on account of damages besides seeking a permanent injunction and mandatory injunction to restrain the defendants 2 to 4 from in any manner telecasting the film (Majboor) on Doordarshan, ZEE TV, Satellite TV, Cable TV, Pay TV and other TVs. and defendant No. 1 should further be directed to restrain from making any payments of the telecasting charges to defendants 2 to 4.

2. The facts alleged are that the plaintiff had acquired the sole and exclusive rights of distribution, exhibition and exploitation of the picture Majboor. An agreement in this regard was arrived at on 20th March, 1987. The rights were available to the plaintiff uptil 9th July, 2007. Defendant No. 2 (M/s. Suchitra Films Pvt. Ltd.) is a film producer of the said film. There was an agreement between defendants 1 and 2 and defendant No. 2 assigned the sole and exclusive rights of distribution, exhibition and exploitation of the said film uptil 9th July, 2007. Defendant No. 1 in turn assigned the said rights to the plaintiff and he has been enjoying the said rights. It is the plaintiff, as per the agreement, who alone can deal with the rights of distribution, exhibition and exploitation pertaining to the said film. The commercial rights of the feature film has been purchased by the plaintiff and as per the plaintiff it includes all circumstances unless expressly included including telecasting rights on television i.e. Doordarshan, Cable TV, Pay TV and other television channels.

3. Since the television has become popular therefore it is stated to be a matter of concern in the film trade and the respective associations of the distributors and producers have recognised the said telecasting rights and the Motion Picture Association which is a body looking after the interest have also issued various circulars from time to time to clarify that commercial rights in the distribution, exhibition and exploitation include in it the telecasting rights. The grievance of the plaintiff if that all of a sudden he was shocked to know the telecasting of the said film on Delhi Doordarshan on its national network on 2nd February, 1991. On enquiry it was revealed that defendant No. 2 in utter disregard of that fact had telecasted the said film on Delhi Doordarshan on the said date. Since the telecasting rights were illegal a civil suit was filed. During the pendency of that suit the defendants were restrained from receiving the payment the matter was settled and Rs. 90,000/- was paid to the plaintiff by virtue of the compromise. Thereafter, the plaintiff had continued to enjoy the said rights.

4. Now it is asserted that the same film is being shown on different channels and defendant 2 has shown the said film on Delhi Doordarshan on 23rd June, 1995. Claiming that it is a breach of the agreement, civil suit has been filed claiming the damages.

5. Needless to state that in the written statement that has been filed the civil suit as such has been contested. M/s. Suchitra Films states that it has no privity of contract with the plaintiff. It had granted distribution, exhibition and exploitation rights to defendant No. 1 (Prem Goel) by an agreement dated 9th July, 1986. The distribution, exhibition and exploitation rights for the territory of Delhi and Uttar Pradesh as known in the film trade means that right so granted are theatrical rights only. The said distributor, namely the plaintiff is entitled to exploit the said picture in cinema theatres within the territory of Delhi and UP. It has been pleaded that this definition of distribution, exhibition and exploitation rights is well accepted by the film trade. There are number of other rights which are vested in a feature film and are separately granted. For assigning the same to a film distributor they are governed by the contract and the well known meaning that is assigned to it. So far as the earlier compromise in this regard is concerned it has been pleaded that the defendants were in need of money therefore they had settled the matter by way of a compromise in full and final settlement of the claim. So far as the circular of Motion Picture Association is concerned, it has been criticised asserting that the association has adopted a strange and inconceivable interpretation of the words distribution, exhibition and exploitation of rights. It is denied that plaintiff has any right to prevent the defendants from exhibiting the said movie other than on a theatre.

6. Defendant No. 3 filed a separate written statement and asserted that the civil suit is not maintainable. Defendant No. 3 is neither a proper nor a necessary party. No cause of action has arisen against them. Defendant No. 3 asserted that he does not operate any branch office at Delhi within the jurisdiction of this Court. Even the claim of the plaintiff in this regard has been controverted.

7. Rejoinders had been filed and the plaintiff re-asserted the assertions.

8. From these pleadings of the parties this Court on 8th December, 1997 had framed the following issues :

(1) Whether the defendant No. 5 is a proper party OPP

(2) Whether the plaintiffs rights in picture Majboor includes only theatrical rights and does not include telecasting on satellite rights OPP

(3) Whether during the subsistence of plaintiff rights in picture Majboor defendant No. 2 could assign the telecasting and satellite rights to any one including defendant Nos. 3 and 5 OPP

(4) Whether the suit of the plaintiff is not maintainable as alleged by the defendant OPD

(5) Whether the plaintiff is entitled to claim damages for the telecasting of the film Majboor, if so to what amounts OPP

(6) Whether the plaintiff is entitled to claim injunction as prayed OPP

(7) Whether the plaintiff suit is maintainable in view of the fact that in agreement dated 20.3.1987 India Impexico is described as a partnership but is a sole proprietary concern of Prem Goel in the suit OPD

(8) Relief.

9. At that time the parties had agreed that there was no need for leading any oral evidence and the documents filed in the suit may be permitted to be read in evidence.

10. Issues 2, 3, 4, 5 and 6: All these issues are inter-connected and therefore, can conveniently be disposed together. The short question that comes up for consideration is as to whether by virtue of agreement that had been arrived at the plaintiff had the complete rights to exhibit and exploit the motion picture Majboor including the television and other rights or it was confined to theatrical rights. Reliance on behalf of the plaintiff is being placed on the agreement that had been executed but it clearly recognised his right in this regard.

11. The agreement dated 20th March, 1987 has been placed on the record. It was executed between M/s. India Impexico and M/s. A.A. Associates (plaintiff). The relevant clauses of the same can conveniently be reproduced for the sake of facility.

Whereas the Sellers are having the sole and exclusive distribution, exhibition and exploitation rights of the picture Majboor produced by M/s. Suchitra Films (P) Ltd. in 35 MM size in Hindi starring Amitabh Bachchan, Praveen Babi, Pran and others, for the territory of Delhi and Uttar Pradesh on Outright Sale Basis for a period ending on 9th July, 2007 (Ninth July two thousand and seven only).

And Whereas The Buyers are desirous of acquiring the distribution and exhibition rights of the said picture Majboor for the territory of Delhi and Uttar Pradesh on Outright Sale Basis for the balance period available with the Sellers i.e. 9th July, 2007, and have approached the Sellers for the same.

And Whereas the Sellers have agreed to Sell on Outright Sale Basis the distribution, exhibition and exploitation rights of the said picture Majboor for the balance period i.e. upto 9th July, 2007 to the Buyers on certain terms and conditions.

And Whereas it is necessary to record the said agreement. Now it is Agreed and Declared by and between the Parties as follows :

(1) that the Sellers hereby Sell and the Buyers hereby Purchase the exclusive distribution, exhibition and exploitation rights of the picture Majboor on OUtright Sale Basis for a period commencing immediately and ending on 9th July, 2007 for the territory of Delhi and Uttar Pradesh.

12. Perusal of the same certainly shows that the seller namely India Impexico described itself to be having the sole and exclusive distribution, exhibition and exploitation rights of Majboor and they had agreed to sell on outright sale basis the said rights to the plaintiff upto 9th July, 2007 for the territory of Delhi and U.P.

13. In addition to that reliance is being placed on the different circulars that have been issued pertaining to the said rights. One such circular relied upon is of 12th July, 1983 (Ex. P2) on behalf of the Motion Picture Association pertaining to the telecasting of feature films on television in Delhi and U.P. circuit. It was observed that the rights of the feature film would include the telecasting rights. The resolution of 6th January, 1983 in this regard reads:

Resolved that it be recorded that the commercial rights of feature films under all circumstances, unless expressly excluded in any agreement, vested unconditionally with the distributors for exploitation in the Delhi-U.P. Circuit in all respects, including telecasting of such feature films on the Television which was entirely within the scope of the exploitation of commercial rights.

Resolved further that film distributors, in whose favour commercial rights of distribution/exhibition have been entrusted by the Producers, thus alone have the commercial rights of telecasting the picture on the Television and to enter into arrangement/agreement with the Television Authorities for such telecasting.

14. To the same effect is Ex. P3 of 15th April, 1983 pertaining to telecasting of feature film by Delhi Doordarshan and at TV Centres and if it infringes the rights of the film distributors or not. Almost identical conclusions are arrived at and it reads:

Members are aware that, as per the Associations Circular No. MPA/R-7/83-Acg, dated 12.1.1983 the commercial rights of feature films are vested with the film distributors, under valid agreements with the respective producers. Such commercial rights include the right of telecasting the picture, which is a commercial operation, unless specifically excluded from the relative contract by mutual agreement.

As such telecasting of any feature films in Hindi, Hindustani, Urdu, Punjbai, Bhojpuri, Haryanvi and Rajasthani languages, without the knowledge and consent of the film distributor concerned, is a violation of the legal rights of the distributors by any Television Authority, which may telecast the feature films in reference. This is also an infringement of the contract by the producers concerned, who may allow such screening to take place to the detriment of the commercial interests of the respective film distributors in Delhi-U.P. Circuit.

15. The attention of the Court had also been drawn to Ex. P4 of 9th November, 1993 whereby the Governing Body of Film Distributors Council adopted a resolution that when such rights are sold by the producer with the concurrence of the Film Distributorships Council the governing body of the film distributors considered the situation and it was resolved that they will be able to raise a dispute in the association. The producers should compensate the distributor in this regard. Same is the resolution of 5th January, 1994, copy of which is Ex. P5.

16. On the strength of these documents referred to above it was urged that all rights have been assigned. There were no impediments therein.

17. 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.

18. Reference in this connection can well be made to the decision from the Madras High Court in Raj Video Vision v. M/s. Sun TV, 1994-2-LW. 158. Somewhat a similar question came up for consideration in that Court. It was held that intention of the parties have to be determined to find out as to whether it included all other rights or it was confined to features or television or satellite. The Madras High Court held that satellite television broadcasting right is an independent right for which a copyright could not have claimed. It was further held:

........Thus, looked at from any angle, satellite TV broadcasting rights are independent rights and the same have to be assigned specifically and so far as such rights have not been assigned in favour of the applicant/plaintiff specifically, the plaintiffs cannot claim any copyright in the same or seek any order of injunction on the ground of alleged infringement by the defendant. The plaintiff/applicants therefore in my opinion have no prima facie case.....

19. The attention of the Court has also been drawn towards the decision of the Bombay High Court in the case of Video Master v. Nishi Productions, 1998 PTC (18) 117. The Bombay High Court referred to the differences and clauses/species of the communication and held that theatrical rights include the right to exhibit the cinematograph film in theatres, terrestrial rights is the right to exhibit the film on Doordarshan and satellite broadcasting rights is the right to exhibit/communicate the film by satellite signals to public with or without cable and through the satellite medium. While the cable TV right is right to exhibit a film by cable originated programme.

20. One finds itself in respectful agreement of these pleas as projected by the defendants. It is true that in the agreement it has not specifically been mentioned that the rights exclude the cable television or any other satellite rights but the intention of the parties can easily be inferred from the nature of the transaction that had been arrived at. This is clear from the fact that the plaintiff had purchased by virtue of the agreement the said rights for the area of Delhi and U.P. If a film is shown on Doordarshan necessarily it would be seen, in all probability, all over the country and in any case far beyond Delhi and U.P. This fact clearly shows that the scope of the agreement dated 20.3.1987 was limited by the geographical limitations. In case of a film being shown on Doordarshan as such geographical limitation would not exist. Once the plaintiff had entered into an agreement with a geographical limitation it is obvious that it was confined to theatrical rights in Delhi and U.P. It could not be in case of satellites or in case of the Doordarshan telecasting the film.

21. So far as circulars Ex. P1 to P4 so much relied upon by the learned Counsel are concerned, obviously decisions therein are advisory in nature. They in any case will not infer or take away a vested right flowing from the right. As held above, once there was geographical limitation and showing of the film on Doordarshan channel will not be confined to it, it must be held therefore that the said circulars are of little avail to the plaintiff.

22. In fact even the attention of the Court had been drawn to the earlier suit filed by the plaintiff, photocopy of the same has been placed on the record. It is not in controversy that in the earlier suit that was filed damages was claimed and a compromise had been arrived at whereby in full and final settlement of the said claim Rs. 90,000/- had been paid. Exhibit P8 is the copy of the application under Order 23 Rule 1 as was filed by the parties therein. It was between the parties to the present suit. It was clearly mentioned that the parties have settled their claim on payment of Rs. 90,000/- as such. The statement of Prem Nath Manchanda, Director of defendant No. 2 had been recorded and it reads:

The compromise Ex. C-1 has been entered by me with the plaintiff on behalf of defendant No. 2 as its Director. It is one of the terms of the compromise that I on behalf of defendant No. 2 shall pay Rs. 90,000/- to the plaintiff in full and final settlement of his claim regarding telecasting of picture `Majboor which was telecasted on 2nd February, 1991. Ex. C-1 bears my signatures at point `A and is supported by my affidavit Ex. C-2. Decree in terms of the compromise Ex. C-1 may be passed. Portion X to X in Ex. C-1 is not pressed.

23. The plaintiffs partner G.K. Kapoor had also made a statement accepting the said compromise. On basis of the said compromise this Court had passed an order and decree in terms of the compromise had been passed.

24. It is true that a compromise earlier had been arrived at but principles of res judicata in this regard will not apply. Reference in this connection can well be made to the decision of the Supreme Court in the case of Sunderbai w/o Devrao Deshpande and Anr. v. Devaji Shankar Deshpande, AIR 1954 SC 82 [LQ/SC/1952/50] . The Supreme Court held that when a compromise has been arrived at and a decree in terms of the same is passed principles of res judicata will not apply but there would be a bar in terms of principle of estopple that would be applicable. Same view was carried by the Supreme Court in the subsequent decision in the case of Pulavarthi Venkata Subba Rao and Ors. v. Valluri Jagannadha Rao (deceased) and Ors., AIR 1967 SC 591 [LQ/SC/1963/62] . In paragraph 10 the Supreme Court had laid the following principle:

........The compromise decree was not a decision by the Court. It was the acceptance by the Court of something to which the parties had agreed. It merely set the seal of the Court on the agreement of the parties. The Court did not decide anything. Nor can it be said that a decision of the Court was implicity in it. Only a decision by the Court could be res judicata, whether statutory under Section 11 of the Code of Civil Procedure, for constructive as a matter of public policy on which the entire doctrine rests.......

25. As a result thereto it must follow that since there was no adjudication of rights and the earlier litigation ended by virtue of a compromise strict principles of Section 11 of the Civil Procedure Code will not come into play. So far as the principle of estopple is concerned it also will not apply in the peculiar facts of the present case. There were no rights that were admitted. It was by and large a compromise. It does not restrain or restrict the other party from agitating the facts for adjudication. Once there is no admission which could be read against the defendants to bind them and to restrict them from using this plea all over again. Consequently it must be held that the plaintiffs have no right to claim the compensation and the injunction prayed. These issues are decided against the plaintiff.

26. Issue Nos. 1 and 7: In view of the findings given above, it is not necessary to go into the issues nor the same are passed.

27. Relief : For these reasons the suit being without merit must fail and is dismissed. Parties are left to bear their own costs.