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2010 Supreme(Mad) 5496

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE V. RAMASUBRAMANIAN
Sree Gokulam Chit and Finance Company (P) Ltd., Represented by its Director, Operations, V.C. Praveen having its Office
Versus
M/s. Johny Sagariga Cinema Square, Represented by Johny Thomas, Kerala & Others
O.A.No.1225 of 2010 to 1227 of 2010 in C.S.No.956 of 2010
Decided On : 21-12-2010

Advocates Appeared:
For the Plaintiff:T.V. Ramanujun, Senior Counsel for T.V. Krishnamachari, Advocate.
For the Defendants:Ms. P. Meghana Nair, P.S. Raman, Senior Counsel for S. Elambharathi, V. Raghavachari, R. Sargunaraj, Advocates.

The main legal point established in the judgment is the distinction between a loan agreement and an assignment of copyright, and the recognition of a charge over the right to remake a film.

Headnote:

Copyrights - Malayalam Cinematographic Film 'Body Guard' - Copyright Act, 1957, Section 62 - The court discussed the nature of the agreement dated 22.1.2010 and found it to be a loan agreement, not an assignment of copyright. The plaintiff was found to have a charge over the right to remake the film in Tamil. The defendants were directed to furnish security for the suit claim before the release of the film.

Fact of the Case:

The plaintiff filed a suit for a declaration as the absolute owner of the copyrights in the Malayalam Cinematographic Film 'Body Guard' and for recovery of a sum of Rs.1,88,58,187. The plaintiff sought interim injunctions restraining the defendants from dealing with the remake Tamil version of the film and from releasing the Tamil film 'Kavalan'. The defendants contested the plaintiff's claim, alleging that the agreement dated 22.1.2010 was a loan agreement, not an assignment of copyright.

Finding of the Court:

The court found that the agreement dated 22.1.2010 was a loan agreement, not an assignment of copyright. The plaintiff was found to have a charge over the right to remake the film in Tamil. The defendants were directed to furnish security for the suit claim before the release of the film.

Issues: The main issue was whether the agreement dated 22.1.2010 constituted an assignment of copyright or a loan agreement, and whether the plaintiff had a charge over the right to remake the film in Tamil.

Ratio Decidendi: The court held that the agreement dated 22.1.2010 was a loan agreement, not an assignment of copyright, based on the terms of the agreement and the conduct of the parties. The court also found that the plaintiff had a charge over the right to remake the film in Tamil.

Final Decision: The court rejected the plaintiff's applications for interim injunctions but directed the defendants to furnish security for the suit claim before the release of the film.

Judgment :

1. Pending suit for a declaration that the plaintiff is the absolute owner of the copyrights in the Malayalam Cinematographic Film "Body Guard", under an Agreement dated 22.1.2010 and for consequential reliefs of permanent injunction as well as for recovery of a sum of Rs.1,88,58,187/-, the plaintiff has come up with 3 applications, in O.A. Nos.1225, 1226 and 1227 of 2010, praying inter alia for (i) an interim injunction restraining the defendants 2 and 3 from in any way dealing with the negative and positive prints of the remake Tamil version of the aforesaid Malayalam feature film titled "Kavalan" from the fourth defendant (ii) an interim injunction restraining the fourth defendant from in any way parting with the negative and positive prints of the aforesaid film to defendants 2 and 3 and (iii) an interim injunction restraining the defendants 2 and 3 from in any way releasing or causing to release for exhibition, the Tamil film "Kavalan".

2. I have heard Mr.T.V.Ramanujun, learned Senior Counsel for the plaintiff, Ms.P.Meghana Nair, learned counsel for the first defendant, Mr.P.S.Raman, learned Senior Counsel for the second defendant, Mr.V.Raghavachari, learned counsel for the third defendant and Mr.R.Sargunaraj, learned counsel for the fourth defendant.

3. In brief, the plaint proceeds on the following lines:-

(a) The first defendant is the Producer and the second defendant is the Director of the Malayalam feature film titled "Body Guard". As a Producer, the first defendant is the absolute owner of the copyrights in the story, script, sound track and music. The first defendant is also the owner of the literary, dramatical and musical works of the said film.

(b) The Malayalam film which was due to be released on 23.1.2010 was stuck due to a financial crisis and hence the first defendant approached the plaintiff for advancing a sum of Rs.4,20,33,700/-, with an offer to assign the copyrights in the film. The plaintiff agreed and an Agreement was entered into on 22.1.2010 and a sum of Rs.3,90,00,000/- was paid to the first defendant, to enable him to release the film in Malayalam, after settling all his financial commitments.

(c) The first defendant executed 4 promissory notes, all dated 22.1.2010, with the first 3 pro-notes for a sum of Rs.1 crore each and the 4th pro-note for a sum of Rs.90 lakhs. Under the Agreement, the copyrights including the rights of remaking, dubbing and world satellite rights as well as video rights were assigned by the first defendant in favour of the plaintiff.

(d) The first defendant also put the fifth defendant on notice of the assignment of those rights in favour of the plaintiff, by a letter dated 21.1.2010. The fifth defendant claimed that a sum of Rs.30 lakhs was due to them by the first defendant. Therefore, the plaintiff made payment of the said amount to the fifth defendant and the same was acknowledged by them by letter dated 2.4.2010.

(e) Towards repayment of the amount borrowed, the first defendant made payments. After adjusting those payments, a sum of Rs.1,88,58,157/-was due and payable as on the date of the plaint.

(f) However, the plaintiff came to know that disputes between the first and second defendant had arisen, leading to civil and criminal cases. It was understood that in those cases, the second defendant was claiming rights over the story, screen play and dialogue of the aforesaid film. It was also understood that the second defendant fabricated certain documents and created false evidence against the first defendant.

(g) While the first defendant filed a criminal complaint against the second defendant, the second defendant filed a civil suit on the file of the District Munsif Court, Ernakulam on the basis of documents ante dated, created and fabricated. The second defendant has claimed that he has assigned the rights to remake the film in Tamil, to the third defendant.

(h) The District Munsif Court, Ernakulam, had no jurisdiction to entertain the suit, since



























































































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