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High Court Of Madhya Pradesh
P. V. Dixit, J.
MOHD.LATIF CHOUDHRY - Appellant
Versus
AMRITKALA BAVEJA - Respondents
Civil Revn. 481 Of 1957
Decided On : 09/22/1958
CONTRACT - PLEDGE - ASSIGNMENT - INJUNCTION - FILM DISTRIBUTION RIGHTS - IRREPARABLE INJURY - RECEIVER.
Fact of the Case:
Plaintiff Amritkala and Defendant Mohd. Latif Choudhary entered into an agreement whereby Choudhary borrowed money from Amritkala and pledged the original agreement of a film distribution contract between Choudhary and M/s D. S. Films as security. The agreement stated that if the cheque issued by Choudhary to Amritkala was dishonored, Amritkala would have full legal ownership of the distribution rights for the Central India territory. The cheque was dishonored, and Amritkala claimed ownership of the distribution rights. Choudhary and M/s D. S. Films filed petitions challenging the interim injunction granted by the lower court, which restrained Choudhary from distributing the film and M/s D. S. Films from handing over the prints to anyone other than Amritkala.
Finding of the Court:
The court found that Amritkala had a prima facie case to go to trial, as the dishonor of the cheque and Choudhary's failure to repay the loan resulted in her becoming the owner of the distribution rights. The court held that the relationship between Choudhary and M/s D. S. Films was not that of principal and agent, but rather that of principal and principal, and therefore the contract could be assigned to Amritkala. However, the court also found that Amritkala had not shown irreparable injury if the injunction was not granted, as the amount due to her could be determined from the accounts submitted by the distributors and exhibitors.
Issues: 1. Whether Amritkala became the owner of the distribution rights upon the dishonor of the cheque. 2. Whether the contract between Choudhary and M/s D. S. Films was an agency agreement or a principal-to-principal agreement. 3. Whether Amritkala had shown irreparable injury if the injunction was not granted.
Ratio Decidendi: 1. The court held that Amritkala became the owner of the distribution rights upon the dishonor of the cheque, as the agreement between her and Choudhary stated that this would be the case. The court found that there was no pledge of the film, as the prints were still with the producers and not delivered to Amritkala. 2. The court held that the contract between Choudhary and M/s D. S. Films was not an agency agreement, as the distributors were not employed to act on behalf of the producers. The court found that the distributors were required to pay a minimum guarantee to the producers, and that the use of the word "commission" in the agreement did not indicate an agency relationship. 3. The court held that Amritkala had not shown irreparable injury if the injunction was not granted, as the amount due to her could be determined from the accounts submitted by the distributors and exhibitors. The court also noted that the simultaneous release of the film in multiple areas was important for its success, and that restraining its exhibition in the Central India territory could harm its "exhibition value."
Final Decision: The court accepted both petitions and vacated the injunction orders made by the lower court. The petitioners were awarded costs from the plaintiff.
( 1 ) THESE two petitions are directed against art order of interim injunction made in appeal by the second Additional District Judge of Indore in an action brought by amritkala against the two petitioners, for a prohibitory injunction restraining mohammad Latif Choudhary from distributing the film 'jivan-Sathi' anywhere in central India territory inclusive of Bhopal and Vindya Pradesh and for a mandatory injunction directing M/s D. S. Films to deliver the prints of the said film to amritkala, By the order sought to be revised, the second Additional District Judge of Indore has restrained Mohammad Latif Choudhary from distributing the film 'jivan Sathi' to any other person in the Central India territory and from exhibiting it himself or through any person in the said territory, and the applicant M/s D. S. Films from handing over the prints of the film to Mohd. Latif Choudhary or to anyone else except through the plaintiff.
( 2 ) THE undisputed material facts are that on 19-11-1956 an agreement was concluded between M/s D. S. Films of Bombay and Mohammad Latif Choudhary as owner of M/s Azad Film Distributors, Indore, whereby the right of distribution, exhibition and exploitation of the picture 'jivan-Sathi' in the territory of Central india and Rajasthan was given on certain terms and conditions exclusively to M/s azad Film Distributors who were described in the agreement as "agents" of the producers M/s D. S, Films. Thereafter M/s Azad Film Distributors appointed M/s Krishna Film Exchange of jaipur as sub-distributors for distribution, exhibition and exploitation of the said picture in the territory of Rajasthaa State. Subsequently, Mohammad Latif choudhary borrowed from the plaintiff Amritkala some amounts from time to time to pay the amount that he was required to remit to M/s D. S. Films under the agreement Out of this amount, a sum of Rs. 3151/-remained due from Mohammad latif Choudhary to Amritkala. In repayment of this amount, Mohammad Latif choudbary issued in favour of Amritkala a post-dated cheque for Rs. 3151/ -. The cheque was given on 4-4-1957 and was due for payment on 25-4-1957. At the time of the giving of the cheque, Mohammad Latif Choudhary, as proprietor of M/s azad Film Distributors, addressed a letter to the plaintiff Amritkala wherein he stated:
"i Mohd. Latif Choudhary son of Mehruddin Choudhary Proprietor Azad film Distributors, Film Colony. Indore, hereby solemnly pledge the original agreement o Jevan Sathi picture executed and signed between us and the recognised producers of the said picture Jeevan Sathi i. e. M/s d S. Films, Bombay, against an amount of Rs. 3151/- (Three Thousand one Hundred Fifty One only) which I had taken a loan for securing the rights of this picture and in repayment of the same amount I have issued you a cheque of Rs. 3151/- on the Bank of Indore Limited, sanyogitagnj, Indore, dated 25-4-57. I solemnly declare that in case the cheque is not encashed on the due date you will have the full legal ownership on the right of the picture for C. I. Territory. "
The said cheque was presented by Amritkala for payment on the due date but it was dishonoured. Thereupon on 15-5-1957 Amritkala addressed a letter to M/s D. S. Films, Bombay, saying that M/s Azad Films Distributors, Indore, had entered into a finan-cial agreement with her on 4-4-1957 under which she had advanced a sum of Rs. 3151/- to M/s Azad Films Distributors on the stipulation that if the amount was not repaid by 25-4-1957 all rights of distribution, exhibition and exploitation of the picture, Jivan Sathi would vest in her. She proceeded to say in the letter that M/s. Azad Films Distributors had failed to pay the amount, that she was therefore entitled to all the rights of distribution, exhibition and exploitation of the picture, and that M/s. D. S. Films should hand over to her all the prints and publicity material of the film. In reply to this letter, M/s D. S. Films wrote to the plaintiff on 28-5-1957 saying
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