The court reinforced that loan agreements are enforceable, and defendants cannot evade repayment obligations by citing external factors like the pandemic, especially when contract terms explicitly detail repayments.

JUDGMENT :

P.T. ASHA, J.

The above suit is filed for a recovery of a sum of Rs.30,05,68,137/- together with interest at 30 % p.a on the principal sum of Rs.21,29,00,000/- together with costs.

Plaintiff's case:

2. The plaintiff is a leading production house in South Indian Film Industry and is engaged in production, distribution and marketing of several high budget movies like 2.0, Dharbar, Indian 2 to name a few. The defendant is a sole proprietary concern which had been established in the year 2013 by Mr.Vishal Krishna Reddy an actor in the Tamil Film Industry. The defendant is also engaged in production and distribution of cinematic works.

3. It is the case of the plaintiff that the defendant had produced the movie named "Marudhu" in the year 2016 and for financing the same he had entered into a loan arrangement with M/s.Gopuram Films represented by Mr. Anbu Chezhian. A sum of Rs.21.29 Crores was borrowed by the defendant from the said M/s.Gopuram Films. However, the defendant was unable to service the said loan. Therefore, he had requested the help from the plaintiff to settle this outstanding to M/s.Gopuram Films and promising to repay the same to the plaintiff with interest. Trusting the words of the defendant, the plaintiff had taken over the loan of Rs.21.29 Crores being the principal with interest at 30% per annum.

4. The plaintiff and the defendant had thereafter reduced into writing their terms of agreement under a loan agreement dated 21.09.2019. The defendant had promised to repay Rs.7 Crores one week prior to the release of the film tentatively titled as Thupparivalan II on or before 31.03.2020. It was also agreed that in case film was not released then the loan amount would be cleared by 31.12.2020.

5. The plaintiff would further submit that the first instalment was due on or before 24.03.2020 ie., a week prior to the expected release of the movie Thupparivalan II as the same was slated for release on 31.03.2020. The payment was not made and the plaintiff came to learn that the shooting of the film could not be completed owing to certain financial issue of the defendant. Therefore, the movie could not be released on 31.03.2020. Therefore, as per the terms of the agreement the loan amount was repayable on or before 31.12.2020.

6. In the meantime, the plaintiff's business was greatly affected on account of Covid 19 situation owing to which the production of several high budget movies had come to stand still and the employees who were dependent on the plaintiff for their salaries had to be still paid. In this background the non payment of the dues by the defendant was also causing great impact on the plaintiff's finances.

7. The plaintiff