1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO.578 OF 2007 Saregama India Limited .... Appellant (Ori. defendant) Vs. Charu Harish Pandya .... Respondent (Ori.plaintiff) Ms. Snehal Shah with Ms. Deepti Pande, Mr. Sameer Khandekar i/by Thakore Jariwala & Associates for appellant. Mr. Shailesh Shah with Ms. Mrudul Bhatia & Mr. Nagvekar i/by Soloman & Co. for respondent. Coram : D.K. Deshmukh & Smt.R.P. SondurBaldota, JJ. Date : 30th June, 2010 P.C.: 1. This appeal is preferred against the preliminary decree dated 18th September 2006 passed in Suit No.978 of 1983 filed by the respondent. 2. One Subhash Desai, producer of picture “Chhaliya” was entitled to royalty rights in respect of gramophone records relating to the picture. He had, by the agreement executed on 7th May 1960 allowed the appellant to exploit the rights during the period of one year computed from 2nd March 1960 in consideration of the agreed royalty. The original plaintiff, mother of the respondent and wife of one Ramniklal Chunilal Shah claimed that Subhash Desai had 2 assigned his rights under the agreement with the appellant to Ramniklal Shah vide letter dated 5th March 1963 addressed to the appellant. Ramniklal Shah died on 10th February 1971. 20 years after the agreement and 12 years after the death of Ramniklal Shah, his widow filed the suit herein demanding accounts in respect of sale of gramophone records of picture “Chhaliya” sold by the appellant and the amount of royalty payable from 5th March 1963 and for payment of the amounts due under the accounts along with interest. The appellant resisted the suit contending that the suit was hopelessly barred by law of Limitation and also that the court has no territorial jurisdiction to entertain and try the same. As regards the merits of the case, it disputed the alleged agreement of assignment between Subhash Desai and Ramniklal Shah. It also disputed that the respondent is an heir of Ramniklal Shah. Each side examined a single witness in support of it’s case. By the impugned judgment and decree, the learned Single Judge held that this court has territorial jurisdiction to entertain the suit. He also held that the respondent is entitled to claim royalty amount for sale of records of the picture “Chhaliya”. As records the limitation, it was held that the respondent is entitled to accounts only for the period of 3 years prior to filing of the suit and the claim prior to that was time barred. 3 3. Material clauses of the agreement dated 7th May 1960 which forms foundation of the respondent’s claim in the suit read as follows : 1 “ The Clients shall during a period of one year computed from the 2nd of March 1960 supply the Company at their own expense with artistes and musicians etc., to perform musical and/or other works from their films for the purpose of making gramophone records, and the artistes and musicians etc., shall attend at the Company s studio or such other place ’ as may be appointed by the Company and shall at such place and time record such works as the Company shall select, for issue under His Master s Voice, or any other Mark ’ which the Company shall select, in which the Mechanical Reproduction Rights including the right to make gramophone records belong to the Clients. 4. “ The Clients shall not during the said period of one year allow any of their musical and/or other works to be recorded or rerecorded by any of their artistes and musicians etc. or from any film sound tracks or recorded tapes or other means for any other person, firm or corporation whatsoever carrying on a business similar to or in competition with that of the Company in all or any of its branches. 5. The Company during the said period of one year and thereafter while the records recorded or rerecorded under this Agreement remain on sale by the Company, shall pay to the Clients a royalty on nett sales made in any part of the world of all records of the performance of the artistes and musicians etc., as aforesaid calculated on the Indian retail selling price for the time being at the following rate:- 2 per side of record. ½ PROVIDED ALWAYS that such royalty shall be payable only so long as the Clients shall not at any time hereafter, allow their artistes and musicians etc. to record any works recorded or rerecorded under the provisions of this Agreement or permit the recording of such works from any film, sound 4 track or recorded tape or other means for any other persons, firm or corporation whatsoever carrying on business similar to or in competition with that of the Company in all or any of its branches and PROVIDED FURTHER that such royalty shall not be payable to the Clients in respect of records recorded or rerecorded under the provisions of this Agreement by any of the Clients artistes and musicians etc. who has before the execution of this Agreement recorded on behalf of the Company. 11. The Company shall be entitled to continue this Agreement for one further successive period of one year upon giving notice in writing to the Clients. Any notice given under the provisions hereof shall be given before the expiration of this Agreement; or any continuance thereof as the case may be, by registered letter and sent to the address of the Clients last known to the Company. 13. The Clients shall not:- (a) assign the rights of the Clients under this Agreement, nor (b) appoint an agent to collect, on behalf of the Clients, any monies due to the Clients under the provisions of this Agreement. Without first, obtaining the written consent of the Company so to do. 15. This Agreement is accepted in Calcutta and all matters, claims and disputes arising in respect of the terms and conditions hereof are to be settled and paid by the parties in Calcutta and any legal proceedings in respect of any claims, matters or disputes or if any action whatsoever shall be instituted in the High Court of Calcutta in West Bengal which Court alone shall have jurisdiction. 4. It is contended by the appellant that in view of the specific clause No.15 in the agreement dated 7th May 1960, the learned Single Judge ought to have held that the High Court at Calcutta has jurisdiction to decide the dispute 5 between the parties and this court does not have territorial jurisdiction to entertain the same. The plaint claims that the entire cause of action has arisen in Bombay, as the amounts are due and payable in Bombay. It is also stated that the appellant carries on business in Bombay. The claim of the respondent that the amounts under the agreement are due and payable in Bombay is not correct since clause 15 quoted above specifically provides that the claims thereunder were to be settled and paid by the parties in Calcutta. Further clause 15 provides that any legal proceedings in respect of the claims, matters or disputes arising under the agreement would be instituted in the High Court of Calcutta. In the impugned order, the learned Single Judge has rejected the application of clause 15 on two counts. Firstly that it is a purely contractual stipulation and secondly that the respondent not being the party to the contract, is not bound by the contents of the same. In our opinion, the view expressed is not correct, since the claim made by the respondent against the appellant is not independent of the agreement dated 7th May 1960. The claim is in fact of assignment rights of Subhash Desai under the agreement. In the circumstances, it is not open for the respondent to contend that she is not concerned with or 6 not bound by the agreement. On the alleged assignment, Ramniklal Shah and after his death, the respondent as his heir stepped into the shoes of Subhash Desai for claiming royalty in respect of the sound recordings of picture “Chhaliya” from the appellant. Perusal of the agreement shows that it was prepared in Calcutta. In any case as per the opening sentence of clause 15, it was accepted in Calcutta. The respondent heavily relies upon the letter dated 5th March 1963 allegedly sent by Subhash Desai to the appellant at its Bombay address informing that the royalty of gramophone records of picture “Chhaliya” should be paid directly to Ramniklal Shah in view of the arrangement arrived at with him. There is serious dispute as regards this document. It has been contended by the appellant that there is no evidence before the Court that this letter was actually sent to the appellant at any time or was received by it. During the course of evidence, the respondent produced original of the letter. According to the appellant, had the letter really been sent by Subhash Desai to the appellant at its Bombay Office, the respondent could not have in her possession the original document. In any case, there is no explanation as to how the original of the letter addressed by Subhash Desai to the appellant came into hands of the respondent. Even if this letter is to be taken into consideration by ignoring the objections thereto, we fail to understand as to how 7 the same can help the respondent, as the letter does not create any independent right in favour of Ramniklal Shah. It merely refers to assignment of rights of Subhash Desai under the agreement dated 7th May 1960. Therefore, in our opinion, the learned Single Judge was not correct in ignoring clause 15 of agreement and holding that this court has jurisdiction to entertain and try the suit. Also regards clause 15 being a contractual stipulation, no fault can be found with it as long as it is not illegal. It is not the contention of the respondent that by the said clause amounts conferring jurisdiction upon the court which does not in law have jurisdiction to entertain the suit. Hence in view of clause 15, the High Court of Calcutta alone had jurisdiction to entertain and try any claim arising under the agreement and not the Bombay High Court. 5. Conjoint reading of clauses 1,4 and 11 of the agreement dated 7th May 1960 shows that the agreement was valid only for a period of two years from 2nd March 1960. It is nobody’s case that the agreement was extended beyond 1 st March 1962. Therefore the appellant could record or re- record musical or other works of picture “Chhaliya” only during that period and not beyond. In that circumstance, any claim arising under the agreement could have been made within a period of three years from the date of expiry of the agreement and not beyond that time. This aspect was 8 completely lost sight of by the learned Single Judge. He has referred to clause 8 of the agreement under which accounts were to be furnished half yearly that is on 7th May and 7th November of each year. However, this furnishing of accounts could not have been beyond the period of the agreement. Therefore, it is clear that the suit for accounts filed in the year 1983, by the respondent claiming royalty under the agreement dated 7th May 1960 was barred by law of limitation. Such a suit could not have been decreed even for the period of 3 years prior to filing of the suit. 6. As regards the merits of the case of the respondent also, we are of the opinion that the she has failed to establish the same. As seen from the impugned judgment and order, firstly she has not established the alleged arrangement dated 10th January 1963 arrived at between Subhash Desai and Ramniklal Shah. The learned Single Judge has surprisingly held that the same is not relevant to the cause of action in the suit. It is further recorded that the agreement dated 10th January 1963 was not produced in evidence and no claim on that basis was made before the learned Single Judge. Perusal of the writing dated 5th March 1963 addressed by Subhash Desai to the Bombay Office of the appellant shows that the same is nothing but a step taken by Subhash Desai in furtherance of the arrangement dated arrived at by him with Ramniklal Shah. Therefore, 9 unless that was produced and proved before the Court, the claim of assignment made by the respondent could not stand. The record as well as impugned judgment and order shows that the respondent has not proved even the contents of letter dated 5th March 1963. The learned Single Judge by resorting to Section 73 of the Evidence Act has compared the signature of Subhash Desai on the letter with his admitted signatures to arrive at the conclusion that the document dated 5th March 1963 bears the signature of Subhash Desai. Thereafter the order states that the question as to whether the contents of the documents have been proved will have to be decided on the basis of other evidence. Perusal of the entire order shows that there is no conclusion arrived at as regards the respondent proving the contents of the documents. The order also records that the respondent in her evidence has not established the delivery of the letter to the appellant and that her evidence in this regard is limited to stating that her father had told her so. It appears that when the mother of the respondent by her letter dated 1st November 1977 made a claim, for the first time, upon the appellant about the royalty payable to Ramniklal Shah, she had forwarded a copy of the letter dated 5th March 1963 to the appellant. The learned Single Judge has held that the response of the appellant to the said claim indicates that the appellant was aware of the letter dated 5th March 1963. The appellant 10 in its reply to the letter of demand had first demanded to know the status of the respondent qua Ramniklal Shah. Apparently that the appellant before responding to the main matter desired to verify the identity of the respondent and her mother. Therefore from this response alone, it would be difficult to jump to the conclusion of prior knowledge of the letter by the appellant particularly when the appellant has categorically denied the receipt and knowledge of the letter. Once this assumption of knowledge is discarded, there is no material whatsoever before the court to support the claim of the respondent in the suit. The appeal therefore is allowed. Impugned order dated 18th September 2006 passed in Suit No. 978 of 1983 is set aside. Suit No.978 of 1983 is dismissed with costs. (Smt.R.P.SondurBaldota,J) (D.K.Deshmukh, J.)