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2016 Supreme(Mad) 3791

IN THE HIGH COURT OF JUDICATURE AT MADRAS
C.V. KARTHIKEYAN, J.
Haja Mohideen, Proprietor M/s.Meta Audio, Chennai - Petitioner
Vs.
S.V.Thangaraj, Proprietor M/s.Uva Sree Creations, Chennai - Defendant
CS.No.11 of 2009
Decided on : 21-12-2016

Advocates:
Advocate Appeared:
For the Petitioner: Mr.K.Harishankar
For the Defendants : Mr.V.Deenadayalan

The Defendant's liability for borrowed sums for film production was established based on the genuineness of promissory notes and documentary evidence.

Headnote:

Promissory Note - Film Financing - 27.1.2004 - 21.8.2006 - The court discussed the promissory note allegedly executed by the Defendant in favor of the Plaintiff on 20.2.2006 for a sum of Rs.17.50 lakhs and the promissory note dated 21.8.2006 for a sum of Rs.13 lakhs. The court found that the Defendant had discharged the amount of Rs.17.50 lakhs borrowed for the film MEESAI MADHAVAN, but was liable to the Plaintiff for the sum of Rs.13 lakhs borrowed for the production of the film ENGAL ASAAN. The court also held that the suit claim was not barred by limitation and decreed the suit in part for a sum of Rs.13 lakhs with interest at 24% p.a. from the date of borrowal till the date of the plaint and thereafter at the rate of 6% p.a. till the date of realization.

Fact of the Case:

The Plaintiff, a film financier, lent sums of Rs.10 lakhs and Rs.7,50,000/- to the Defendant for the production of the films MEESAI MADHAVAN and ENGAL ASAAN, respectively. The Defendant failed to repay the entire amount borrowed, leading to the Plaintiff filing a suit for recovery of Rs.49,98,500/- with interest at 24% p.a.

Finding of the Court:

The court found that the Defendant had discharged the amount borrowed for the film MEESAI MADHAVAN but was liable to the Plaintiff for the sum borrowed for the production of the film ENGAL ASAAN. The court also held that the suit claim was not barred by limitation.

Issues: The issues included the genuineness of the promissory notes, the borrowing for the production of the film ENGAL ASAAN, limitation of the suit claim, entitlement to a decree for the principal and interest, entitlement to future interest, and entitlement to a permanent injunction restraining the Defendant from releasing the film ENGAL ASAAN without settling the suit claim.

Ratio Decidendi: The court held that the Defendant had discharged the amount borrowed for the film MEESAI MADHAVAN but was liable to the Plaintiff for the sum borrowed for the production of the film ENGAL ASAAN. The court also held that the suit claim was not barred by limitation.

Final Decision: The civil suit was partly allowed, and the Plaintiff was decreed a sum of Rs.13 lakhs with interest at 24% p.a. from the date of borrowal till the date of the plaint and thereafter at the rate of 6% p.a. till the date of realization.

JUDGMENT :

This civil suit has been filed to pass a judgment and decree, against the Defendant:-

(a) directing the Defendant to pay the Plaintiff a sum of Rs.49,98,500/- (Rupees forty nine lakhs ninety eight thousand and five hundred only) with interest at 24% p.a on Rs.30,50,000/- from the date of the plaint till the date of realisation.

(b) granting permanent injunction restraining the Defendant from releasing the picture ENGAL ASAAN, starring Vijayakanth and others, without settling the dues to the Plaintiff in a sum of Rs.49,98,500/-.

(c) directing the Defendant to pay the costs of the suit.

2. The plaint averments are that the Plaintiff is in the business of financing for production of cinematograph films and acquiring various copy rights in Tamil cinematograph films. During the course of the business, the Defendant, who is a Producer of the Tamil films, had approached the Plaintiff, requesting finance for his film titled MEESAI MADHAVAN. The Plaintiff had agreed to lend a sum of Rs.10 lakhs and this was done on 27.1.2004 partly in cash and partly by cheque. The Defendant had agreed to pay the interest at the rate of 24% p.a. and undertook that the entire amount will be repaid by June 2004. The Defendant had also created a charge in favour of the Plaintiff over the satellite television rights and distribution rights in the areas of Chengalput, North Arcot and South Arcot Districts. However, the Defendant did not complete the production and requested further finance and accordingly, a sum of Rs.7,50,000/- was paid by cash by the Plaintiff on 14.7.2004. The Defendant had also issued a cheque in favour of the Plaintiff for the total sum of Rs.17.50 lakhs. The Defendant had also issued a letter of undertaking on14.7.2004, promising to repay the entire amount with interest before the release of the film. The film was released in December 2004. But, the Defendant was unable to settle the amounts borrowed. The Defendant then had promised that he would settle the dues with interest before the release of his next film titled ENGAL ASAAN, starring Vijayakanth. A promissory note was executed by the Defendant on 20.2.2006, treating the entire amount of Rs.17.50 lakhs as principle amount and undertaking to return the same with interest at 24% p.a. from 20.2.2006 till the date of repayment. It had been further stated that a further sum of Rs.13 lakhs was borrowed and a promissory note was also executed. Though the film ENGAL ASAAN was proceeding at a very slow rate, the Defendant had been promising that the amounts will be repaid before the release of the film. Since the Defendant appeared to have evaded payment, the Plaintiff had issued a legal notice, demanding the money on 18.7.2008. The Defendant did not send any reply. The Plaintiff had, therefore, filed the suit for recovery of a sum of Rs.49,98,500/- with interest at 24% p.a. on Rs.30,50,000/- from the date of the plaint till the date of realisation.

3. In the written statement, the Defendant had denied the allegations made in the plaint. It had been stated in the written statement that the agreement dated 27.1.2004 had been altered and the Plaintiff had substituted the pages numbers 2 and 3 of the original agreement with the single fabricated page as page (2). The Defendant had been forced to sign in blank paper and this was used to create the said document. The Defendant had admitted the receipt of Rs.10 lakhs and the charge over satellite television rights and distribution rights in the areas of Chengalput, North Arcot and South Arcot Districts. The Defendant, however, had stated that the Plaintiff received from the Defendant and his wife, several blank papers, stamp papers, white sheets, green sheets and promissory note papers, with the signatures of the Defendant and his wife, jointly and separately and also the letter heads of M/s.Uva Sree Creations and also in the blank cheques with the Defendant's signatures. These papers had been misused to extract money from the Defendant. I



































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