IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 15-9-2009 CORAM THE HONOURABLE MR.JUSTICE M.CHOCKALINGAM AND THE HONOURABLE MR.JUSTICE R.SUBBIAH OSA Nos.265 and 266 of 2009 and MP No.1 of 2009 in OSA 265 of 2009 Messrs.Emgeeyar Pictures Pvt. Ltd., Represented by its Managing Director Nirmala Ravindran 9, Dhandapani Street T.Nagar, Chennai 17. ..Appellant in both appeals/Plaintiff vs 1.Messrs.O.K.Films Represented by its Proprietor R.V.Mani, Airlines Building 829, Mount Road, Chennai 2. ..1st Respondent in OSA 265/2009 and Respondent in OSA 266/2009 2.M/s.Raj Tele Films Ltd., represented by its Director M.Raajhendran *now known as M/s.Vissa Television Net Work Ltd., Represented by its Director M.Ravindran 32, 2nd Street, Poes Road Teynampet, Chennai 600 018. ..2nd Respondent in OSA 265/2009 Original side appeals preferred under Clause 15 of Letters Patent and Order XXXV Rule (1) of O.S. Rules against the order of this Court made in O.A.No.48 of 2009 in C.S.No.1101 of 2008 and in O.A.No.1231 of 2008 in C.S.No.1100/2008 dated 11.8.2009. https://hcservices.ecourts.gov.in/hcservices/ For Appellant : Mr.B.Kumar Senior Counsel for Mr.V.Ramesh For Respondents : Mr.V.Thiageswaran for M/s.Waraon & Saikumar for R1 Mr.R.Krishnaswami Senior Counsel for Mr.K.Harishankar for R2 COMMON JUDGMENT (Judgment of the Court was delivered by M.CHOCKALINGAM, J.) These two appeals challenge a common order of the learned Single Judge of this Court made in O.A.No.48 of 2009 in C.S.No.1101 of 2008 and in O.A.No.1231 of 2008 in C.S.No.1100/2008 dismissing the said applications. 2.The Court heard the learned Senior Counsel for the appellant, the learned Counsel for the first respondent and also the learned Senior Counsel for the second respondent. 3.Pending the suit in C.S.No.1100/2008 the appellant/plaintiff filed O.A.No.1231/2008 for temporary injunction to restrain the sole defendant from dealing with the negative rights of the three Tamil feature films (1) Nadodi Mannan (2) Adimai Penn and (3) Ulagam Sutrum Valiban including all and every copyright viz., 16mm and TV rights, etc., for entire world and in any other dimension or in any other manner, while the appellant has filed O.A.No.48/2009 an application for temporary injunction against the defendants therein in C.S.No.1101/2008 whereby he sought a permanent injunction to restrain the defendants therein from dealing with the negative rights of the above said three feature films including all and every copyright viz., entire copyright, world negative right, sole exclusive and absolute ownership right, distribution, exhibition and exploitation right in 35mm, 70mm, cinemascope and all other dimensions, through out the world, world satellite rights, audio rights, CD, LCD, DVD, VCD, cable TV rights, pay channel right, dish antenna rights, world high seas rights, world overseas TV rights, air born rights, DTH rights, paper view rights, video on demand rights, VHS rights, pay Television rights, satellite pay television rights, direct to User (DTU) rights, laser disc, multimedia rights, cable TV, internet right etc., for entire world and in any other dimension or in any other manner. A counter was filed. The learned Single Judge on scrutiny of the available materials and hearing the submissions made, dismissed both the applications. Hence these appeals have arisen at the instance of the appellant/plaintiff. https://hcservices.ecourts.gov.in/hcservices/ 4.Advancing the arguments on behalf of the appellant, the learned Senior Counsel Mr.B.Kumar would submit that admittedly there was an assignment deed executed by the appellant in favour of the first defendant dated 25.1.1999 wherein it is stated that the consideration for transfer of the world negative rights of the three films is Rs.18 lakhs and a sum of Rs.1 lakh alone was paid as advance; that the balance of Rs.17 lakhs was agreed to be paid under Clause 2(b) of the assignment deed on the appellant obtaining and delivering to the first respondent the confirmed laboratory letter transferring and delivering the entire copyright, world negative rights and all other rights detailed therein relating to the three pictures; that the most important clause is obtaining and delivering the confirmed laboratory letter; that in the instant case, no confirmed laboratory letter was given to the appellant in favour of the first respondent O.K.Films; that the clause in a contract and that too in a contract where copyright was assigned, the terms of the contract have to be strictly construed; that if construed so, the laboratory letter should contain a clause "transferring and delivering the entire copyright, etc." and when no such laboratory letter was given by the appellant in favour of the first defendant OK Films, there was no transfer or delivery of the entire copyright and negative rights; that apart from the advance of Rs.1 lakh, a sum of Rs.8 lakhs has been received and nothing more; that under the two assignment deeds, the total amount payable was Rs.33 lakhs and the balance due was Rs.24 lakhs; that the first defendant has miserably failed to honour the agreement and has committed a grave breach of the contract and hence he was not entitled to any right arising out of the assignment deed; that it is not correct to state that the assignment was complete and the copyright has been assigned in favour of the respondent; that the finding recorded by the learned Single Judge is erroneous for the reason that under the provisions of the Sale of Goods Act unless the balance of sale consideration was paid, the title in goods would not pass on to the purchaser or the assignor; that admittedly in this case, M/s.Raj Tele Films Ltd., has exhibited two out of the three films in its TV network with pirated version; that the respondents have given up their rights and they could not seek the enforcement of the agreement as M/s.Raj Tele Films Ltd., has chosen and accepted the alternative mode of performance; that the appellant was in no way concerned with any agreement between the respondents; that once the appellant is able to show that no right has flown under the assignment dated 25.1.1999 in favour of the first defendant, there was no question of the first defendant assigning any right which he did not possess, in favour of the second defendant M/s.Raj Tele Films Ltd; that at the time when the assignment deed was executed, the question of copyright of three films was subjudiced and even the right of the appellant has not crystallised and in fact, there was an order of injunction against the appellant obtained by the third party, and hence the appellant at any rate could not have conveyed or assigned the copyright; that there was no collusion between the appellant and the first defendant https://hcservices.ecourts.gov.in/hcservices/ as contended by the second defendant; that the letter of the first defendant dated 25.1.1999 conveyed no meaning and even if that letter is taken to be a concocted one, it will have no bearing on the decision on the application for injunction since admittedly it is not the case of M/s.Raj Tele Films Ltd., that the first defendant has paid the whole consideration to the appellant and obtained the laboratory letter as per the assignment deed dated 25.1.1999 between the plaintiff and the first defendant; that the exhibition of the pirated version amounts to criminal breach of trust and all rights flowing, even if it be true, under the assignment deeds were nullified because of the illegality committed by the second defendant M/s.Raj Tele Films Ltd. 5.Added further the learned Senior Counsel that so long as the first defendant did not perform the condition by making the balance of consideration as found in the deed of assignment, he could not get any right under the assignment or he could convey to the second defendant any right by way of the alleged assignment; that the copyright under the assignment dated 25.1.1999 will not operate; and that the first defendant cannot claim any right under the agreement unless and until he has paid the entire consideration as found therein. 6.Placing reliance on Section 19(4) of the Copyright Act, 1957, the learned Senior Counsel would submit that non-exploitation of the right within a period of one year will result in the lapse of the assignment; that the first defendant as plaintiff filed a suit in C.S.No.795 of 2000 and also an application for injunction against the plaintiff, and the same was dismissed on 8.1.2001; that the alleged assignment by the first defendant in favour of the second defendant was on 5.5.2000; that once the application filed by the first defendant against the plaintiff herein seeking interim injunction was dismissed, refusing injunction in favour of the plaintiff against the defendants in the present suits would create inconsistent situation; that under the circumstances, the plaintiff has made out a prima facie case for grant of interim injunction, and hence it has got to be ordered by setting aside the order of the learned Single Judge. 7.Advancing arguments on behalf of the first defendant M/s.O.K.Films, the learned Counsel Mr.T.Thiageswaran would submit that as per the assignment made by the plaintiff in favour of the first defendant dated 25.1.1999, it is true that there was a conditional clause; but the condition has not yet been fulfilled; that the second defendant at the time of the assignment made by the first defendant in favour of the second defendant, knew about the same and also about the pendency of the litigation, and thus the act of the second defendant in broadcasting the films in the TV network was not bona fide. https://hcservices.ecourts.gov.in/hcservices/ 8.The learned Senior Counsel Mr.R.Krishnaswami appearing for the second defendant put forth his submissions in his sincere attempt of sustaining the order of dismissal by the learned Single Judge. 9.The Court paid its anxious consideration on the submissions made and looked into the materials available. 10.Pending the suits C.S.Nos.1100 and 1101 of 2008, the former against the first defendant and the latter against both the defendants, the above two interim injunction applications came to be filed. It is not in controversy that the plaintiff and the first defendant entered into a deed of assignment on 25.1.1999. It is also not in controversy that the first defendant has executed a deed of assignment in favour of the second defendant on 5.5.2000 on the strength of the assignment entered into between the plaintiff and the first defendant on 25.1.1999. It is also admitted by the second defendant M/s.Raj Tele Films Ltd., that out of the three films, one or two have been telecasted in its TV network. The grievance ventilated by the appellant/plaintiff is that the assignment made by the first defendant in favour of the second defendant was in violation of the assignment between the plaintiff and the first defendant dated 25.1.1999; and that even under the assignment, the first defendant did not get the rights assigned therein since the first defendant has not made the payment of the remainder of the consideration which was a condition precedent. According to the appellant/plaintiff, as per the assignment deed dated 25.1.1999, the consideration was fixed at Rs.18 lakhs, and a sum of Rs.1 lakh was paid as advance, and the first defendant agreed to make payment of the remainder of Rs.17 lakhs which was a condition precedent for obtaining and delivering to the first respondent the confirmed laboratory letter, and only thereafter, there would be a transfer of the copyrights, world negative rights, etc., and since the first defendant admittedly has not paid the entire balance of consideration, the assignment made under the agreement has not come into force. At the time when the matter was heard, the learned Counsel for the first defendant has also admitted that the balance of consideration was not paid. 11.It is contended by the second defendant M/s.Raj Tele Films Ltd. that the plaintiff and the first defendant are acting in collusion and all the contentions now put forth by both the plaintiff and the first defendant stand contra to the assignment deed entered into between them on 25.1.1999. Hence it has become necessary to look into the deed of assignment entered into between the plaintiff and the first defendant on 25.1.1999. Clauses 1 and 2 of the deed of assignment read as follows: "1.The ASSIGNORS hereby for the consideration set out hereunder paid and agreed to be paid, transfer, assign and deliver, free from all encumbrances, in favour of the https://hcservices.ecourts.gov.in/hcservices/ ASSIGNEES herein, the Negatives, Master Positive Prints and the Light Cards etc., relating to the aforesaid three pictures, to enable the Assignees to exercise all the aforesaid rights, for the entire world, for a perpetual period of 99 years from the date of execution of these presents, to be owned, enjoyed and exploited by them in such manner, as they deem fit. (emphasis supplied) 2.In consideration of the rights assigned as stated supra, the assignees have agreed to pay the consideration amount stated above, to the Assignors, in the following manner:- (a) Rs.1,00,000/- (Rs.One Lakh only) paid by cash, on signing this agreement, being the advance payment; (b) Rs.17,00,000/- (Rs.Seventeen Lakhs only) being the balance amount, shall be paid by the Assignees to the Assignors, on the Assignors obtaining and delivering to the Assignees, confirmed lab.letter transferring and delivering the entire Copyrights, World Negative Rights and all other rights detailed above, relating to the abovesaid three pictures, for a period of 99 years from 25-1-99, in favour of the Assignees herein." 12.The very reading of the above clauses would clearly indicate that the assignment was made in consideration of the amount paid and agreed to be aid thereafter. Out of the said consideration of Rs.18 lakhs, Rs.1 lakh was actually paid and Rs.17 lakhs was agreed to be paid. The contention put forth by the appellant's side that the payment of balance of consideration was a condition precedent for exercise of the rights of assignment given to the first defendant under the deed cannot be countenanced for the simple reason that the deed of assignment was given effect from the date of the assignment deed namely 25.1.1999. The following averments in the affidavit filed in support of the application in O.A.No.48 of 2009 in C.S.No.1101/2008 stand contra to the contentions put forth by the appellant's side. "But, later, C S 173 of 1999 was filed by Mrs.Kavitha and after notice was served, the clause pertaining to the payment of the balance in the deed of assignment dated 25.1.1999 was mutually agreed to be altered to the effect that full and final settlement will be made only after the delivery of the court order declaring the plaintiff/applicant as owner of the copy rights granted under the assignment deed dated 25.1.1999. This was confirmed in the form of a letter dated 1.9.1999 by the first defendant/respondent addressed to the plaintiff/applicant. Thus for the deed of assignment dated 25.1.1999 the condition for full and final settlement was https://hcservices.ecourts.gov.in/hcservices/ agreed to be at the time of delivery of court order, while for the deed of assignment dated 25.2.1999 the balance of Rs.14 lakhs has to be paid at the time of delivery of court order declaring the copy right of the plaintiff/applicant pertaining to that deed." 13.The contention put forth by the first defendant that the act of the second defendant was unlawful and in breach of the agreement between them cannot be countenanced in view of the communication addressed by the plaintiff to the second defendant M/s.Raj Television Network Ltd., dated 23.7.2001 which reads as follows: "In continuation of our agreement entered between us, we have assigned the Entire World Satellite TV Rights and other Rights as per the agreement to you. The above three films are in dispute and we hope to get it cleared through Court in our favour before September 2001. Until such time we request you to wait till the court orders comes to our hand. We also undertake to pay the Interest for the money received as Royalty for the above said pictures if the Court matter is extended beyond September 30th, 2001." 14.Much reliance was placed on a letter dated 25.1.1999 alleged to have been written by the first defendant to the plaintiff. It was commented on the side of the second defendant that the said letter was a fabricated one since both the phone numbers 42140493 and 28521535 could not have been in existence in the year 1999 since the number starting by 4 was introduced in 2005 and the number beginning with 2 was introduced only in 2002. Thus it would speak of the collusion between the first defendant and the plaintiff. 15.Apart from the above, the agreement of assignment entered into between the first defendant and the second defendant dated 5.5.2000 would indicate that the said assignment was made by the first defendant in favour of the second defendant after receiving a substantial consideration. In such circumstances, now the first defendant cannot be allowed to put forth a contrary plea. Thus it would be quite clear that under the deed of assignment dated 25.1.1999, the plaintiff has assigned the copyrights as found therein in favour of the first defendant, and it also speaks of the mode of payment of the remaining part of consideration. Having agreed that the said deed would come into force on the date of deed of assignment i.e., 25.1.1999, now the appellant/plaintiff cannot be allowed to say that the deed will come into force only after the entire balance of consideration was paid. Equally having executed a deed of assignment in favour of the second defendant by getting a substantial consideration, the first defendant cannot be allowed to go back and support the case of the plaintiff. https://hcservices.ecourts.gov.in/hcservices/ 16.In view of all the above, it can be well stated that the appellant/plaintiff has not made out a prima facie case for grant of injunction, and hence the learned Single Judge was correct in dismissing the applications. There is no infirmity or illegality in the order of the learned Single Judge. 17.Accordingly, both these appeals are dismissed confirming the order of the learned Single Judge and leaving the parties to bear their costs. The observations made above will not in any way stand in the way of the trial Court deciding the case on merits of the matter. Consequently, connected MP is closed. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar nsv To The Sub Assistant Registrar, Original Side, High Court, Madras. + 2 c.cs. to Mr. Srinath Sridevan, Advocate. S.R.No.47292. + 2 c.cs. to Mr. V. Ramesh, Advocate. S.R.No.47152. OSA Nos.265 and 266/2009 CK (CO) GSK 22.09.2009. https://hcservices.ecourts.gov.in/hcservices/