The main legal point established is the interpretation of the nature of the agreement and the determination of the limitation period for filing the suit.

JUDGMENT

(Prayer: First Appeal has been filed under Section Order 41 Rule 1 of Civil Procedure Code) against the judgment and decree dated 30.11.2015, made in O.S.No. 11300 of 2010, on the file of the V Additional Judge, City Civil Court, Chennai.)

Aggrieved over the judgment and decree dated 30.11.2015 passed in O.S.No. 11300 of 2010, on the file of the V Additional Judge, City Civil Court, Chennai, the appellants have preferred the first appeal.   2. This suit has been filed by the Plaintiff/respondent to direct the defendants/appellants to pay to the plaintiff/respondent a sum of Rs. 17,90,000/- together with interest at 36% per annum prevailing in the cine trade and as per the agreement on Rs.5,00,000/- from this date till the date of realization and to pay the costs of the suit.

Brief averments of the plaint:

3. On 21.09.1996 the plaintiff/respondent had advanced Rs.5,00,000/- to the defendants/appellants under a finance agreement dated 21.09.1996. The loan amount was given for production expenses of a Tamil Movie namely “Manasu” to the defendants/appellants. As per the terms and conditions of the said agreement the defendants/appellants have created first charge in respect of the territorial rights of Trichy, Tanjore, Pudukottai Nagar, Nagai-Quaid-e-Millath Districts, Tirunelveli, Salem, Dharmapuri, North Arcot and Tiruvannamalai District. The defendants have agreed to repay the said sum with interest at the rate of 36% per annum. It was also agreed that the charged areas shall not be disposed of to anyone without the prior written sanction or written consent of the plaintiff/respondent. It was also agreed that the picture will not be released anywhere in charged areas without settling the dues to the plaintiff/respondent. The charge over the said territories in respect of distribution, exhibition and exploitation rights of the said picture was also confirmed by Gemini Colour Laboratory, Chennai where negatives of the picture was processed until the producers produce a clearance letter from the plaintiff/respondent. The picture could not be released for a quite long time and finally as per the orders passed by the Hon’ble High Court in O.S.A.Nos. 47 of 2000 and 48 of 2000 in C.S.No 986 of 1998 an Advocate Commissioner was appointed to release the picture. The Advocate Commissioner had released the picture and deposited Rs.10,00,000/- (Rupees Ten Lakhs only) in Saligramam Branch, of Indian Bank by the Court. Subsequently, the plaintiff/respondent himself impleaded as one of the defendant in C.S.No.986 of 1998. The picture was released on 15.12.2000 by the Advocate Commissioner and the charges became futile, however the charges in the deposit made in the bank by the Advocate Commissioner still exists. The security created in favour of the plaintiff/respondent by the defendant is in force and the picture was released only on 15.12.2000 and the suit is filed in time. Thus, along with the interest calculated the defendants/appellants are liable to pay Rs.17,90,000/- to the plaintiff. The plaintiff/respondent has issued a legal notice on 19.06.2002 to the defendants/appellants. Though the defendants/appellants have received the notice, they have failed to send any reply. Hence the suit is necessitated.

Brief averments of written statement filed by the 2nd defendant/appellant and adopted by the 1st and 3rd defendants/appellants:-

4. The suit is not maintainable either in law or on facts. The defendants/appellants deny all the allegations stated in the plaint except those that are specifically admitted. The suit is barred by limitation. As per finance agreement the defendants/appellants were to pay the entire principal amount along with the interest within the expiry of two months from the date of agreement or on or before the first and general release of the picture whichever is earlier. Thus, the cause of action for the recovery of the amount arose on 21.11.1996. Accordingly, the limitation period expired on 20.11.1999. The suit has