Calcutta High Court
Eskay Video Private Limited vs Brand Value Communications Limited on 16 June, 2010
Author: Sanjib Banerjee
Bench: Sanjib Banerjee
AP No.115 of 2010
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
IN THE MATTER OF:-
ESKAY VIDEO PRIVATE LIMITED
Versus
BRAND VALUE COMMUNICATIONS LIMITED
For the Petitioner : Mr.Siddhartha Mitra, Advocate with
Ms.Manju Bhutoria, Advocate.
For the Respondent :Mr.Raja Basu Chowdhury, Advocate with
Ms.Sutapa Sanyal, Advocate.
BEFORE:
The Hon'ble JUSTICE SANJIB BANERJEE Date : 16th June, 2010.
The Court:-The parties entered into a Memorandum of Understanding that provided that the petitioner would make available 75 cinematograph films for the respondent to telecast the same on the respondent's television channel. According to the petitioner, the films were rated according to their perceived popular appeal and ratings of A+, A, B and C were assigned to each of the films.
The MoU was entered into sometime in August, 2009 and contemplated that for a period of three years the respondent would be entitled to exploit the cinematograph films by exhibiting the same on the respondent's channel. Category A and A+ films could be telecast four times in the 2 first year and three times each over the next two years. There was no limitation as to the telecast of the category B and C films. It would also appear from page 56 of the petition that midnight repeats of telecast made earlier in the day were not counted as further telecast.
The Memorandum required 50% of the total consideration of Rs.29,25,50,000/- to be paid upon the document being executed. It is the admitted position that only a sum of Rs.10 crores was paid at or about the time the MoU was entered into and the balance advance payment was not released. The MoU also envisaged that the parties would enter into a more detailed agreement which has since not been executed.
By December, 2009, the petitioner forwarded 48 films of agreed 75 to the respondent. The respondent says that some of the films were returned as the respondent was not satisfied as to the petitioner's title thereto and some others were not exploited at all. The agreement required the petitioner to send the films in digital betacam/betacam format to the respondent with the respondent being entitled to make copies of the same and return the original to the petitioner within 15 days of the receipt thereof. There is no dispute that such procedure was followed in respect of the 48 films though the respondent says that some of the films were returned without copies thereof being made, whether on account of the respondent's suspicion that the petitioner had no right in respect of such films or on account of the respondent being not desirous of exhibiting such films.
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On December 26, 2009, the respondent addressed a letter to the petitioner informing the petitioner that the respondent had telecast 28 films obtained from the petitioner till such date. The respondent contended that in accordance with the MoU the respondent was liable to pay for such 28 films at Rs.39 lakh per film. The respondent, however, indicated that it did not require any further films other than the 28 already chosen and advised the petitioner that it did not "want to continue with the above MoU" and the MoU "should be closed with immediate effect."
The petitioner contends that a sum of Rs.39 lakh per film was loosely indicated in the MoU and since the films had been rated, it was obvious that the value of each film would not be the same. The petitioner says that the respondent has retained 17 A or A+ rated films, 10 B-rated films and one C-rated film. The petitioner complains that in issuing the letter dated December 26, 2009 that the respondent committed a breach and that the respondent was liable to make payment in respect of the entirety of the 48 films which had been forwarded to the respondent.
The petitioner says that the petitioner is not confident that the respondent will be able to discharge its financial obligation upon the award being made in the reference.
When this petition was received on March 17, 2010, no effective interim order was made except to record that the respondent would not exploit the 28 films any more than what the respondent was otherwise entitled to 4 under the MoU. Such order of March 17, 2010 was carried in appeal without any success.
The petitioner says that a request under Section 11 of the Arbitration and Conciliation Act, 1996 has recently been filed though no copy thereof has yet been served on the respondent. It would be evident from the petitioner's conduct that the petitioner did not take immediate steps for the commencement of the reference notwithstanding having filed the petition under Section 9 of the Arbitration and Conciliation Act, 1996 some three months back.
The petitioner has not made out any credible case that the respondent is in a parlous state or is otherwise insolvent or would be unable to meet its financial obligations, if an award were to be made against the respondent. The respondent has also offered to make payment of the additional sum of Rs.92 lakh, over and above the amount of Rs.10 crore already paid, to make up for the total amount that the respondent claims to be due from it of Rs.10.92 crore in respect of the 28 films at the rate of Rs.39 lakh per film.
The respondent will make payment of the sum of Rs.92 lakh to the petitioner within a week from date, which the petitioner will receive without prejudice to the rights and contentions of the parties to the reference. Further, prima facie, it would be evident from the MoU that notwithstanding the reference therein to each film being priced at Rs.39 lakh, the manner in which the films have been rated and the restricted rights in respect of certain categories of the films and the unlimited rights in respect of other categories, the values of all the films may not have been intended to be uniform but may have been 5 loosely indicated in the MoU since that document appears to have been hurriedly prepared and contemplated a more detailed agreement being executed.
Again, prima facie, it would appear that the respondent is liable to pay well in excess of sum of Rs.10.92 crores that it has paid or offered to pay in respect of the 28 films that it has retained to exploit over the three years.
The respondent will be permitted to telecast the 28 films, subject to the rights that could have been exercised by the respondent in respect of the films under the MoU and not in excess thereof. That would imply that the respondent would be entitled to telecast the category A and A+ film four times in the first year and thrice each in the two other years. As to the category B and C films, there would be no restriction on telecast. Since it appears form page 56 of the petition that repeat midnight telecasts have not been reckoned to be original telecast, such repeat midnight telecasts shall not be taken into account for the purpose of assessing the number of telecasts effected by the respondent.
The respondent will also deposit a further sum of Rs.2 crores with the Registrar, Original Side, which will abide by the result of the reference. Though the petitioner claims that an additional amount of Rs.14 lakhs is due and payable by the respondent in terms of the agreement, it is a matter of assessment which has to be made in the reference. The sum of Rs.2 crores which the respondent has been directed to pay is arrived at on the tentative assessment of the 75 films offered under the MoU. There were only 26 A or A+ rated films and the respondent has chosen 17 A or A+ rated films in the 28 it has retained. 6
It is recorded that the respondent has disputed that the document forming annexure-B to the petition was a part of the MoU. It is also the respondent's further case that it was up to the respondent, and not the petitioner, to rate the films.
The deposit shall be made with the Registrar, Original Side, within a period of a fortnight from date. The Registrar will invest the amount in a fixed deposit with a nationalised bank and forward copies of the fixed deposit receipt to the parties.
AP No.115 of 2010 is disposed of without any order as to costs. Urgent certified photocopies of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(SANJIB BANERJEE, J.) nm A.R.(C.R.)