THE HIGH COURT OF JUDICATURE AT MADRAS DATE : 30.06.2008 CORAM THE HONOURABLE MR.JUSTICE A.C.ARUMUGAPERUMAL ADITYAN A.S.No.460 of 1998 Hyluck Film, rep by its Power of Attorney/Manager S.A.J.Kamal Batcha 19, Kothari Road, Nungambakkam, Chennai-34. .. Appellant / Plaintiff Vs. Theatre Nagesh rep by its partner Regina Nagesh 19,Thiagaraya Road, T.Nagar, Chennai-17. .. Respondent / Defendant Prayer :- This appeal has been preferred under Order XLVI Rule 1 r/w Section 96 of CPC against the decree and judgment dated 11.4.1997 in O.S.No.7366 of 1996 on the file of the II Additional Judge, City Civil Court, Chennai. For Appellant : Mr.C.Ramesh, Advocate For Respondent : Mr.Najeeb Khan, Advocate JUDGMENT This appeal has been directed against the decree and judgment in O.S.No.7366 of 1996 on the file of the II Additional Judge, City Civil Court, Chennai. The plaintiff is the appellant herein. 2.The suit has been filed by the plaintiff for recovery of excess payment of entertainment tax to the tune of Rs.4,15,146/50 and also for recovery of Rs.17,500/- from the collection amount for the film show cancelled on 23.10.1990 (two shows), on 30.01.1991 (one show), on 22.2.1991 (four shows) and on 6.2.1991 (two shows) which comes to Rs.5,625/- (Rs.625 x 9 shows) and also a sum of Rs.17,500/- being the excess payment in respect of the rent. The total claim in the plaint, according to the plaintiff, comes to Rs.4,38,271/50. https://hcservices.ecourts.gov.in/hcservices/ 3.According the plaintiff, he is carrying on business in distribution and exhibition of motion pictures and that the defendant is a partnership firm owning a Cinema Theatre at No.19, Thyagaraya Road, Madras-17, in the name of 'Theatre Nagesh'. By virtue of successive agreements from 1984 onwards the plaintiff was exhibiting motion pictures at the defendant's theatre. The last such agreement expired on 13.4.1989. In the meanwhile the parties agreed for the plaintiff's exhibiting the pictures at the defendant's theatre for 28 shows in a week including noon shows at a rental of Rs.16,000/- per week for a period of 260 weeks. Since the contract was not extended due to the default of the defendant, the plaintiff filed C.S.No.252/1989 before the High Court. An interim order was passed in C.M.P.No.1681 of 1989 in C.S.NO.252 of 1989 on 5.4.1989 directing the plaintiff to pay a sum of Rs.17,500/- for 28 shows in a week until the disposal of the suit. On the basis of the said direction, the plaintiff was exhibiting the pictures in the defendant's theatre and paying a weekly rent of Rs.17,500/- and the defendant was paying the theatre collections to the plaintiff less the entertainment and show tax. After the said order, the Government of Tamil Nadu issued an ordinance, amending the provision of Tamil Nadu Entertainment Tax Act 10 of 1939 where the percentage of tax was reduced from 53% to 40% of the gross collections. For the period of exhibition from 14.07.1989 to 12.9.1990 the defendant had collected 53% of the gross collections as entertainment tax, instead of 40%, which comes to Rs.4,15,146/50. After 1.7.1989 the Government has demanded only 40% entertainment tax. Hence, the defendant is liable to pay Rs.4,15,146/50 being the excess entertainment tax collected from the plaintiff. The plaintiff is liable to pay only R.17,500/- towards rent per week for 28 shows in a week. Owing to Bandh and other incidents that had happened, two shows were cancelled on 23.10.1990, one show on 30.1.1991, four shows on 22.2.1991 and two shows on 6.2.1991. On that score the plaintiff is entitled to claim repayment of Rs.5,625/-. The plaintiff has made an excess payment of Rs.17,500/- in respect of the rents paid. Hence, the suit for Rs.4,38,217/50 with interest at 18% per annum and also for costs. 4.The defendant in his written statement would contend that the allegation that for the period after 13.4.1989 the plaintiff and the defendant had agreed for the plaintiff exhibiting pictures at the defendants theatre for 28 shows in a week for the further period of 260 weeks on a rental of Rs.16,000/- per week, is not correct. No other agreement was made. The defendant is not liable to pay any amount towards excess of entertainment tax paid to the government. The defendant does not admit that the plaintiff is entitled to any rebate of Rs.5,625/- or any other sum. There was no excess payment made by the plaintiff much less Rs.17,500/-. The defendant never agreed to return any money to the plaintiff. The plaintiff is not entitled to any interest as claimed in the plaint. The suit C.S.No.252 of 1989 filed by the plaintiff against the defendant was https://hcservices.ecourts.gov.in/hcservices/ dismissed with costs by the High Court by its Judgment dated 30.08.1991. As per the said judgment there was no concluded contract between the plaintiff and the defendant regarding screening of pictures in the defendant's theatre after 18.4.1989 and that the plaintiff was guilty of unilaterally altering certain vital documents materially with ulterior motives and for the purpose of that cases and that the suit was frivolous in nature. The defendant further submits that whatever tax it collected from the public was duly remitted to the statutory authority concerned. The defendant sought for refund of the difference between the actual tax remitted and the tax that was leviable. The said request was rejected by the statutory authority concerned. The defendant filed W.P.No.12153 of 1993 claiming refund of the said amount, which was dismissed by an order dated 10.5.1994 by the High Court. The writ appeal was also dismissed. Thus the suit is frivolous like C.S.No.252 of 1989. Hence, the suit is liable to be dismissed with costs. 5.On the above pleadings five issues were framed by the learned trial judge. The plaintiff's power of attorney was examined as P.W.1. The Managing Director of the defendant theatre A.Narayanan was examined as D.W.1. Ex.A.1 to Ex.A.3 were marked on the side of the plaintiff. Ex.B.1 to Ex.B.3 were marked on the side of the defendant. After scanning the evidence both oral and documentary, the learned Trial judge has come to a conclusion that the plaintiff is not entitled to any relief under the plaint and accordingly, dismissed the suit with costs. Aggrieved by the findings of the learned Trial Judge, the plaintiff has preferred this appeal. 6.The points that arose for determination in this appeal are as follows:- 1)Whether the plaintiff is entitled to a decree for repayment of excess of the entertainment tax from the defendant? 2)Whether the plaintiff is entitled to a sum of Rs.5,625/- being the rental charges for the non-screening of the film on 23.10.1990 (two shows), on 30.01.1991 (one show), on 22.2.1991 (four shows) and on 6.2.1991 (two shows) ? 3)Whether the plaintiff is entitled to Rs.17,500/- being the excess rent paid by him as claimed in the plaint? 4)Whether the decree and judgment in O.S.No.7366 of 1996 on the file of the II Additional Judge, City Civil Court, Chennai, is liable to be set aside for the reasons stated in the memorandum of appeal? 7.The point No.1:- The plaintiff claims Rs.4,15,146/50 being the excess entertainment tax deducted by the defendant in lieu of the ordinance issued by the Government of Tamil Nadu amending the provision of Tamil Nadu entertainment Tax Act 10/1939 where the percentage of tax was reduced to 40% from 53% of the gross collection. Ex.B.1 is the judgment in C.S.No.252 of 1989 of this Court. The said suit was filed by the plaintiff herein against the https://hcservices.ecourts.gov.in/hcservices/ defendant herein, wherein the plaintiff asked for a direction directing the defendant to execute a renewable contract as per the terms enclosed in the letter dated 14.12.1988 and also for an injunction against the defendant and his men from screening any picture in the suit theatre (Theatre Nagesh). That suit was dismissed by this Court. The defendant in his written statement has stated that the defendant filed W.P.No.12153 of 1993 before the High Court of Madras for refund of the excess entertainment tax paid after the ordinance for amending the Tamil Nadu Entertainment Tax Act 10/1930, wherein the entertainment tax was reduced from 53% to 40% . Ex.B.3 is the Judgment in W.P.No.12153 of 1993 of this Court dated 10.5.1994. The relevant observation in Ex.B.3 for the purpose of disposal of this appeal runs as follows:- "The petitioner did collect 53% of the entertainment tax, on admission of each audience in various classes into the petitioner-theatre. Two moot questions would arise for consideration in such a situation, namely, 1) nature and character of the tax; and 2) entitlement to the alleged excess collection of tax. The proviso to Section 4(1) of the Principal Act, relatable to tax on payment for admission to entertainments prescribes that in the case of cinematograph exhibition, the tax shall be calculated at the rates specified on such payment for admission, after excluding from such payment the amount of the tax. Section 4(1)(a) of the Amendment Act prescribes that on each payment for admission to any cinematograph exhibition, at the rate of forty per cent of the gross payment for admission inclusive of the amount of the tax. It is thus clear from the original as well as the amended provisions, the nature and character of the impost of the entertainments tax remained the same, in the sense of it being an 'indirect tax' collected from the cinema-goers, through the agency of the management of the theatre, like the petitioner and the difference is that under the original provisions, the quantification of the entertainments tax is made on the gross collections, exclusive of the entertainments tax, whereas under the amended provision, it is inclusive of the same. An useful reference, at this juncture, may be made to Viswanathan's case (Viswanathan Vs. State of Madras - 1961 II MLJ 29) wherein a Division Bench of this Court laid down the dictum in a scintillating fashion thus: ......... what is collected by the person providing the entertainment tax is a tax for being paid over to the https://hcservices.ecourts.gov.in/hcservices/ Government. The circumstance that such tax is collected along with the admission fee for the particular entertainment cannot alter the nature of what is collected on behalf of the Government or of the obligation on the part of the person so collecting the transfer the entirety of the amount so collected from the public. The amount thus collected not being the income of the person providing the entertainment would not form his property so that he can in case there is any payment by mistake recover it back. What was paid to the Government was what was collected on its behalf; if there was an excess collection made, the person aggrieved is the person who paid. The appellant could have no cause of action in respect of such excess collection which was made and paid over to the Government" Ultimately Writ Petition filed by the petitioner (defendant in O.S.No.7366 of 1996 on the file of the II Additional Judge, City Civil Court, Chennai,) was dismissed. According to the defendant, the writ appeal preferred by him against the order in W.P.No.12153 of 1993 was also dismissed. So under such circumstance, as correctly held by the learned trial Judge, the plaintiff cannot claim 13% of the difference in the entertainment tax in lieu of the ordinance, which was challenged and rejected under Ex.B.3. Point No.1 is answered accordingly. 8.Point No.2 & 3:- The plaintiff filed the suit for return of the collection of shows on 23.10.1990 (two shows), on 30.01.1991 (one show), on 22.2.1991 (four shows) and on 6.2.1991 (two shows) which comes to Rs.625/-. As per the order of this Court in CMP.No.1681 of 1989 in C.S.No.252 of 1989, the plaintiff was directed to pay a sum of Rs.17,500/- for 28 shows in a week. According to the plaintiff, as per the direction in CMP.No.1681 of 1989 in C.S.No.252 of 1989 he was regularly depositing Rs.17,500/- per week for 28 shows. But two shows were cancelled on 23.10.1990, one show was cancelled on 30.01.1991, four shows were cancelled on 22.2.1991 and two shows were cancelled on 6.2.1991 due to Bandh, and for that shows the collection amount comes to Rs.5,625/-. The learned trial Judge on the basis of Ex.A.3-statement furnished by the defendant to the plaintiff has come to a conclusion that the defendant had already deducted the said amount in the statement itself. But a perusal of Ex.A.3-statement will go to show that for the cancellation of two shows on 23.10.1990 even though it has been mentioned that two shows were cancelled on 23.10.1990 against the entry for 15 weeks from 24.08.1990 to 29.11.1990, the collection was shown as Rs.2,62,500/-. As admittedly per week the plaintiff has to pay Rs.17,500/- to the defendant for exhibiting his films in the defendant's theatre. So, for 15 weeks i.e., for the period from 24.8.1990 to 29.11.1990 the plaintiff has to pay a sum of Rs.2,62,500/-. If non-screening of the film for two shows on 23.10.1990 is deducted from the said sum of https://hcservices.ecourts.gov.in/hcservices/ Rs.2,62,500/- (Rs.625/- per show), the net amount the plaintiff is liable to pay for 15 weeks come to Rs.2,61,250/- only. According to the plaintiff, on 30.1.1991 one show was cancelled. The cancellation of one show on 30.1.1991 which amounts to Rs.625/- has been given credit to from the amount collected for the week from 1.2.1991 to 7.2.1991. Likewise for the cancellation of two shows on 6.2.1991 and cancellation of four shows on 22.2.1991 were also given credit to in the accounts for the collection for the week from 8.2.1991 to 14.2.1991 and 1.3.1991 to 7.3.1991 respectively. So the plaintiff is entitled to Rs.1,250/- being the amount collected for the cancellation of two shows on 23.10.1990. In Ex.A.3-statement for the period from 14.4.1989 to 5.4.1991 the collection of Rs.17,500/- per week is to be paid by the plaintiff to the defendant as per the order of this Court in CMP.No.1681 of 1989 in C.S.No.252 of 1989. In Ex.A.3-statement relating to the payment of rent for the theatre at page 2 for the entry for the perios from 24.8.1990 to 29.11.1990 ie., for 15 weeks the plaintiff had paid to the defendant Rs.2,62,500/- without making deduction for the cancellation of two shows on 23.10.1990 and also for a weeks collection amount ie., Rs.17,500/- excessively paid by the plaintiff to the defendant as seen from the noting under the remarks column in the said entry. In the earlier paragraph I have held that the rent for cancellation of two shows on 23.10.1990 was not given credit to in the said entry for 15 weeks from 24.8.1990 to 29.11.1990. Apart from this, the excess payment of one week collection i.e., Rs.17,500/- is also to be deducted from the said sum of Rs.2,62,500/- paid by the plaintiff to the defendant. Even though the learned Trial Judge has stated in the judgment at para-6 (inner page-4) that this amount of Rs.17,500/- being the excess payment was given credit to in Ex.A.3-statement actually it is not so. So the plaintiff is entitled to the excess payment of one week collection, which comes to Rs.17,500/- and also Rs.1,250/- for rental charges under the suit. Hence, I hold on Point No.2 that the plaintiff is entitled to Rs.1,250/- for rental charges and I hold on Point No.3 that the plaintiff is entitled to Rs.17,500/- being the excess weekly collection paid by the plaintiff to the defendant as per Ex.A.3-statement. 9.Point No.4:- In view of my discussions in the earlier paragraphs I hold on Point No.4 that the plaint in O.S.No.7366 of 1996 is entitled to a decree for Rs.18,750/- (Rupees Eighteen Thousand Seven Hundred and fifty) only. 10.In fine, the appeal is allowed in part and the decree and judgement in O.S.No.7366 of 1996 on the file of the II Additional Judge, City Civil Court, Chennai, is set aside and the suit is decreed in part and the plaintiff is entitled to Rs.18,750/- with 9% interest from the date of suit till the date of realisation with proportionate costs. In other respects, the decree and judgment of https://hcservices.ecourts.gov.in/hcservices/ the trial Court is hereby confirmed. Time for payment is one month from this date. sd/- Deputy Registrar /true copy/ Sub Asst.Registrar ssv To, The II Additional Judge, City Civil Court, Chennai. Copy to the Section Officer, VR Section, High Court Madras. +1 cc To Mr.C.Ramesh,, Advocate, SR.33537 +1 cc To Mr.K.Ravi, Advocate, SR.33584 A.S.No.460 of 1998 ssv[co] gkg/25.7 https://hcservices.ecourts.gov.in/hcservices/