Like contested decree ex-parte decree is also binding.

A.S.VENKATACHALAMOORTHY, J.

Plaintiffs in O.S.No.9574 of 1976 on the file of XVII Assistant Judge, City Civil Court, Madras are the appellants herein.

2. The plaintiffs filed the suit contending that the first defendant firm is the producer of Malayalam talkie picture called "Puthra Kameshti" and in respect of the distribution, exhibition and exploitation of the picture in the state of Kerala, the first defendant represented by its partners, entered into an agreement dated 1.9.1972 with the first plaintiff, who was the promoter of second plaintiff company, whereby the first defendant firm was advanced a sum of Rs.1,50,000/- by way of loan, in consideration of which the first plaintiff was entitled to the sole, absolute and exclusive rights of distribution, exhibition and exploitation of the picture for the said area for a period of seven years from the date of first release of the picture in the said area. According to the plaintiffs, the first plaintiff was also authorised to spend a sum of Rs.60,000/- towards publicity expenses and the amount so spent by the first plaintiff together with the distribution commission was to be adjusted from out of the net realisations of the picture. It is the case of the plaintiffs that as per the agreement, in the event of first plaintiff not realising in full, all the amounts due to the first plaintiff, should be repaid by the defendants. Further plea of the plaintiffs is that as per the agreement, plaintiffs advanced all the amount and the picture was first released on 10.11.1972 and the total amounts advanced by the plaintiffs came to Rs.1,80,017.20 as per the statement of account. Plaintiff would also claim from the defendants a total sum of Rs.63,746.40 towards publicity expenses as per the statement of account. The amounts due to the plaintiffs have been tried to be adjusted from out of the net realisations of the picture, but as on 1.10.1976, there was a balance of Rs.35,046.81 due and payable by the defendants and that the said amount will also fetch interest at the rate of 15% per annum. Thus a total sum of Rs.54,595.87 is due and payable by the defendants to the plaintiffs as on 1.10.1976. Plaintiffs would further plead that the defendants neglected to pay the amounts due to them in spite of repeated demands, but on the contrary filed a suit for damages against the plaintiffs in O.S.9877 of 1974 on the file of II Assistant Judge, City Civil Court, Madras. The case of the plaintiffs is that the defendants are liable to pay a sum of Rs.35,046.81 together with interest at the rate of 15% per annum amounting to Rs.18,549.06, thus totalling Rs.54,595.87. The first defendant firm, the second and third defendants as partners of first defendant firm are jointly and severally liable to pay the said amount.

3. Defendants 1 and 2 filed a common written statement. It is contended therein that the suit is not maintainable in law and the present suit has been filed by the plaintiffs only as a counter blast to the earlier suit filed by the defendants – O.S.9877 of 1974 on the file of II Assistant Judge, City Civil Court, Madras, wherein a decree has already been passed directing the plaintiffs to pay a sum of Rs.1,40,000/- and odd. The present suit is also barred by res judicata in view of the decision in O.S.9877 of 1974. The defendants would contend that only after verifying plaintiffs' account, suit O.S.9877 of 1974 was filed and in the plaint in that suit, defendants have specifically pointed out, how the plaintiffs were making false entries in the books of account and that several entries do not bear any vouchers. A specific plea is taken in the written statement that the expenses debited were large and the defendants never authorised the plaintiffs to enter into any such contract. The Court tried O.S.9877 of 1974 and only after looking into the accounts filed by the defendants in that suit, a decree for Rs.1,40,000/- and odd came to be passed. The allegation therefore made in the p