J U D G M E N T

(This case has been heard through Video Conferencing)

The epicentre of the suit subject is the Tamil cinematographic film titled “IMAIKA NODIGAL”. The said movie was produced by 2nd defendant M/s.Cameo Films. On 07.01.2017, the 2nd defendant entered into a Royalty Minimum Guarantee Agreement with the first defendant granting commercial and theatrical exhibition copyrights of the said movie for the entire Tamil Nadu, Chittor and Pondicherry, for perpetual period. Also entered into Minimum Guarantee Agreement for entire worldwide right of exploitation of the film including the dubbing right. In turn, the first defendant on 03.03.2017 assigned to the plaintiff the theatrical exploitation right to distribute, exhibit and exploit the said film in respect of North Arcot, South Arcot and Chengalpet (shortly ‘NSC’, as called by the film industries) for a consideration of Rs.4,25,00,000/-. The first defendant received Rs.4,00,00,000/- and agreed for the balance Rs.25,00,000/-

lakhs to be paid on the eve of the movie release.

2. On the eve of the movie release, the plaintiff had resorted to this suit for declaration and injunction on the premise that, the first defendant, after assigning the theatrical exploitation rights for the 'NSC' area and received advance of Rs.4,00,00,000/- from the plaintiff with a promise that, the movie will be made ready and censored for release before 30.04.2017, failed to get the movie made ready by the time promised. Therefore, the plaintiff preferred a complaint before the Micro and Small Enterprises Facilitation Council at Chennai on 05.03.2018 against the first defendant for return of the money advanced with interest. No settlement arrived between the parties before the MSE council.

3. After assigned the copyrights for theatrical exploitation in 'NSC'

area in favour of the plaintiff through the first defendant, the producer of the film (second defendant) advertised that, the film will be released during the month of August 2018 without informing the plaintiff. Therefore, the plaintiff apprehending that, if the film is released worldwide except NSC area, will be put to severe loss, issued cease and desist notice to the defendants on 07.08.2018 not to release the film without delivering the prints to the plaintiff for theatrical exploitation in NSC area. The second defendant, on receipt of the legal notice, filed caveat in High Court anticipating suit and also replied through his counsel on 11.08.2018, wherein it was informed that the agreement dated 07.01.2017 entered between the first defendant (distributor) and the second defendant (producer) was a Minimum Guarantee Agreement for a consideration of Rs.16,50,00,000/- payable as per the schedule. The time was essence of the contract and in case of delay or default in payment, the second defendant reserved the right to terminate the agreement and refund the advance received from the first defendant soon after the movie release. When the first defendant was not able to pay the considerations as per schedule, the parties i.e., first and second defendant mutually agreed to terminate the agreement and accordingly entered into the cancellation agreement on 17.04.2017.

Thereby, the agreement dated 07.01.2017 stands cancelled.

4. In the said background, the suit is filed alleging that, after the assignment of copyright in the movie for exploiting NSC area on 03.03.2017, the first defendant cannot cancel the agreement dated 07.01.2017 without the consent of the plaintiff. The alleged cancellation deed dated 17.04.2017 is a collusive document to defeat the interest of the plaintiff.

5. The first defendant though contested the interlocutory application, did not file written statement within the period of limitation hence right to file the written statement got forfeited. The second defendant filed written statement and same taken on file.

6. The 2nd defendant in the written statement deny any liability to the plaintiff. The agreement between the second defen