IN THE HIGH COURT OF JUDICATURE AT MADRAS
Mr. Justice Rajagopalan and Mr. Justice Ramachandra Iyer
K.M. Mohamad Abdul Kadir Rowther
Versus
S. Muthiah Chettiar
Appeal No. 387 of 1955. (14th Sravana, 1881-Saka).
Decided On : 05 August 1959
This is an appeal against the decree in O.S. No. 7 of 1954 on the file of the Sub-Court of Dindigul. The plaintiff is the appellant.
The suit was for the recovery of a sum of Rs. 8229-2-4 representing the balance due on account with subsequent interest thereon. The appellant was a partner in a business run under the name of ‘Amar Jyothi Talkie Distributors, Dindigul’. It will be convenient to refer to that firm as the appellant’s firm. That partnership was dissolved and under an agreement between the partners the appellant became solely entitled to the moneys due from the respondent. The respondent was doing business in the distribution of films under the name of "Nethaji Picture Circuit’ at Tiruchira-palli They had acquired a right to the distribution of a Tamil film called ‘Vikata-yogi’ in the Madurai district. On 6th February, 1947, they assigned that right to the Amar Jyothi Talkie Distributors for a period of 4 ½ years. The terms of the assignment were embodied in Exhibit A-2. Under that agreement the appellant’s firm was to pay a sum of Rs. 15,000 as advance to the respondent against the right to distribute the film for a period of 4 ½ years. The respondent was to give 2 prints of the picture and all available publicities, and thereupon the appellant’s firm was entitled at their discretion to exploit and distribute the picture at such rates and on such terms and conditions as they deemed fit. In the net realisation from the exhibition of the film the appellant’s firm was to take a commission of 12½ per cent., while the respondent was entitled to the balance of 87½. The latter was, however, not to be paid over to the respondent till the entire sum of Rs. 15,000 advanced by the appellant’s firm was wiped out, and that portion of the realisations was only to be credited as against the advance. When the entire amount of Rs. 15,000 was recouped by the appellant’s firm, they were bound to pay the respondent in cash the 87½ per cent. of the realisations. There were also certain other stipulations in the agreement to which reference will be made later. It is admitted that both the parties performed their respective obligations under the contract; the appellant’s firm paid the respondent a sum of Rs. 15,000 within four days of the contract, and the respondent delivered the two prints of the film and the accompanying publicities.
On 25th February, 1947, the appellant’s firm found that M/s. Dinamani Talkies, Madurai were entitled to receive a sum of Rs. 2000 from the respondent on account of the exhibition of a certain film and they had to be paid that sum. This the appellant’s firm did presumably at the request of the respondent and debited the same in the accounts against the respondent.
The picture ‘Vikatayogi’ was however not a success. At the end of the contract period it was found that the share of the respondent of the realisations for the exhibition of the film fell short of the sum advanced, viz., Rs. 15,000. The accounts showed a debit balance of Rs. 7323-2-5 against the respondent. That amount included the sum of Rs. 2000 paid by the former to Dinamani Talkies at the request of the latter. A claim was, therefore, made for the payment of the amount due on accounts. The respondent at first complained that the loss was due to the inefficient management by the appellant’s firm, but did not persist, in that charge. He suggested to the appellant to take an extension of the contract and minimise the loss; he also promised to settle the account. The appellants firm did not agree for an extension of contract, as the picture was evidently a flop. They insisted on the payment of their dues and issued a notice of demand. The respondent denied his personal liability to the transaction and took up the position that the only right of the appellant under the agreement was to recover the advance amount paid or such portion of it that might be due, from and out of the proceeds of the picture. Thereupon the suit, out of
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