Judgment :-

G.S. Singhvi, J.

1. This appeal is directed against the judgment of the learned Single Judge of the Andhra Pradesh High Court whereby he allowed the appeal filed by respondent No.1 and decreed the suit filed by the said respondent for grant of a declaration that it is having exclusive worldwide video rights of VCD/DVD and other formats of video rights in respect of 15 Telugu films for which it had entered into an agreement dated 27.8.2001 with M. Srinivasa Rao and also for restraining the appellant and respondent Nos.2 and 3 from producing or selling VCDs/DVDs or any other video format of those films in any form of exploitation.

2. M/s. Vijaya Production Private Limited (hereinafter referred to as “the Producer”) produced 15 Telugu films. By an agreement dated 28.9.1987, the Producer granted the sole and exclusive video rights of the films to M/s. Jyothi Video for a period of seven years. During the currency of that agreement, the Producer gifted the films to M/s. Nagireddy Charities (respondent No.3) represented by its Managing Trustee, Shri B. Nagireddy. Respondent No.3 entered into an agreement of lease with respondent No.2-M/s. Vijaya Pictures whereby the rights of theatrical and non-theatrical distribution, exhibition and exploitation including video and TV rights were given to respondent No.2 for the areas of Andhra and Nizam for a period of 20 years commencing from 1.1.1975 for a consideration of Rs.20 lakhs. By another agreement dated 25.6.1990 (Exhibit A-4) the term of agreement dated 10.1.1975 was extended by 70 years with effect from 1.1.1995. The relevant portions of that agreement are extracted below: Whereas the Lessors are the absolute owners in possession of the negatives, holding the entire rights for the Indian Union of the Telugu Talkie pictures produced by M/s Vijaya productions Private Ltd., as specified hereunder, the rights of which have been assigned absolutely by way of gift by the said Vijaya Productions Private Ltd., in favour of the Lessors. Whereas the Lessors have already granted to the Lessees, the exclusive lease rights of exploitation of their several Black and White and Colour pictures for the territory of Andhra and Nizam by way of agreement of lease dated 10.1.1975 for a period of 20 years from 1st of January, 1975. Whereas the Lesees have approached the Lessors to grant unto them the exclusive lease rights of Theatrical and Non-theatrical distribution, exhibition and exploitations of the several pictures by way of lease, in respect of the areas of Andhra and Nizam as known in the Film Trade, for a further period of 70 (seventy) years from the date of expiry of the present lease agreement i.e. from 1st January 1995 and to transfer

complete pictures negatives in favour of the Lesees herein. NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:-

1. The Lessors hereby grant us the Lessees as the rights of Theatrical and Non-Theatrical distribution, exhibition and exploitation by way of lease of the following Black and White Telugu Pictures produced by M/s Vijaya Productions Pvt. Ltd. Madras 600 020 including the video and T.V. Rights thereof

1. Shavukaru

2. Pathala Bhairavi

3. Pellichehi Choodu

4. Chandraharam

5. Missamma

6. Maya Bazar

7. Appuchesi Pappukudu

8. Jagadekaveerunikatha

9. Gundamma Katha

10. C.I.D.

12. Umachandi Gowrishankula Katha

13. Rechukka Pagatichukka

for the Areas of Andhra and Nizam, and to appropriate to themselves the proceeds earned by them on the said pictures by such exploitation for a period of 70 (seventy) years from 1st January 1995.

4. The Lessees shall have the power to assign this agreement either in part and/or whole to third parties at their discretion, without in any manner affecting the rights of the Lessors under this agreement.

5. It is agreed that the Lessors shall not lease out, sell or exhibit the pictures in the territories for which the rights of exploitation are herein be granted, till the expiry of the agreement. The Lessees also shall not exhibit the