Madras High Court
A.M.Gopalan vs Eros International Media Limited on 24 June, 2024
Author: P. Velmurugan
Bench: P.Velmurugan
Judgment dated 24.06.2024
in C.S.No.739 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 24.06.2024
Coram:
THE HONOURABLE MR.JUSTICE P.VELMURUGAN
C.S.(Comm.Div).No.739 of 2018
---
A.M.Gopalan,
Trading as
Sree Gokulam Movies,
No.66, Old No.356,
Arcot Road,
Kodambakkam,
Chennai-600 024
Represented by Power Agent Mr.V.C.Praveen
.. Plaintiff
Vs.
Eros International Media Limited,
9th Floor, Supreme Chambers,
Off Veer Desai Road,
Mumbai-400 053.
.. Defendant
Plaint filed under Order 4 Rule 1 of the Original Side Rules of Madras
High Court, and Order 7 Rule 1 of the Code of Civil Procedure (i.e. CPC), read
with Sections 51, 55 and 62 of the Copyright Act, 1957 and the Copyright
(Amendment) Act, 2012, and the plaint numbered as C.S.(Comm.Div).No.739 of
2018, praying for the grant of judgment and decree as follows:
(i) a permanent injunction restraining the defendants, their Directors,
Successors, servants, agents, employees, programmers, subordinates, assigns,
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representatives, distributors, stockists, dealers and all other persons claiming
through or under them or howsoever otherwise, from directly or indirectly in any
manner from committing acts of passing-off and enabling others to pass off the
plaintiff's title with respect to the movie 'Kayamkulam Kochunni" by displaying
such works on the defendant's web-site or other social media platforms, or from
in any manner claiming that the impugned movie originates from them, or in
any other manner whatsoever;
(ii) a permanent injunction restraining the defendants, jointly and
severally, their Directors, Successors, servants, agents, employees,
programmers, subordinates, assigns, representatives, distributors, stockists,
dealers and all other persons claiming through or under them or howsoever
otherwise, from directly or indirectly in any manner copying, re-producing,
adapting, putting up for public display, or in any manner infringing the plaintiff's
copyrighted work in the promotional material, trailers, or music videos, clips, or
any portion or the entirety of the movie "Kayamkulam Kochunni" or in any other
manner whatsoever;
(iii) a preliminary decree to be passed in favour of the plaintiff
directing the defendants to render account of profits made by use of the
plaintiff's copyrighted work with respect to the movie "Kayamkulam Kochunni" or
and a final decree be passed in favour of the plaintiffs for the amount of profits
thus found to have been made by the defendants, after the latter have rendered
accounts'
(iv) the defendant be ordered to pay the plaintiff a sum of
Rs.5,00,00,000/- (Rupees five crores) as damages for the wrongful and illegal
activities amounting to the unauthorised use and infringement of the plaintiff's
copyrighted works with respect to the movie "Kayamkulam Kochunni";
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(v) the defendant be ordered to pay to the plaintiff a sum of
Rs.2,00,00,000- (Rupees two crores) being the amount spent on marketing the
film with defendant's banner; and
(vi) for costs.
For plaintiff : Mr.Arun C. Mohan
For defendant : Mr.Akshay Patil
JUDGMENT
The plaintiff has filed the present suit for permanent injunction, for passing-off and infringement of copyright and other allied reliefs.
2. The averments made in the plaint, are as under:
(a) The plaintiff is a leading Malayalam film production and distribution entity, in Chennai. The plaintiff is under the leadership and direction of Mr.Gokulam Gopalan, a renowned and respected producer in the Malayalam film fraternity. The plaintiff-Company has produced several successful Malayalam movies and acquired/established as a key player in the movie industry.
(b) The defendant is a film production company established in Mumbai in the year 1994. In August 2017, the plaintiff started production on a Malayalam movie titled "Kayamkulam Kochunni" and the said movie is a period Page No.3/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 film, directed by Rosshan Andrrews and written by the iconic duo Bobby and Sanjay. The plot of the movie revolves around the life of Kayamakulam Kochunni, a famed highwayman who robbed from the rich and gave to the poor during the British Raj in the early 19th Centrury in Central Travancore. The movie was released on 11.10.2018 with acclaim.
(c) In July 2018, the defendant approached the plaintiff for distributing the said Malayalam film. After initial negotiations between the plaintiff and defendant, a contract was circulated by the defendant to obtain the theatrical exploitation rights for minimum guaranteed amount of Rs.17 crores plus GST and also the defendant has to pay an additional amount of Rs.3 crores plus GST to the plaintiff for the digital, audio and airborne rights.
(d) There was consensus with respect to the compensation relating to the theatrical exploitation rights along with the digital, audio, and airborne rights, pursuant to which, the defendant requested the plaintiff to allow for certain music videos and trailers to be posted on the web-site of the defendant. The defendant obtained the music videos, trailers and promotional material of the impugned movie and uploaded the same on their web-site as well as their YouTube channel. There were millions of views and viewers in respect of the said Malayalam movie.
(e) The plaintiff accommodated the defendant's request to place their Page No.4/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 banner "EROS" on all the trailers and promotional material for the impugned film as well as inside the film that was submitted for the Central Bureau of Film Certification certificate (CBFC Certificate). The parties agreed earlier for the release date being 17.08.2018, however, since there was some delay owing to the floods in Kerala, the defendant requested for release of the film at a later date, i.e. ultimately, the film was sought to be released on 22.08.2018, but not, since on 12.08.2018, the plaintiff received e-mail from the defendant's President of Business Development, stated the revised date of release of the said film on 22.08.2018, which was not acceptable for the defendant. The defendant proposed that, instead of Rs.17 crores that was originally agreed upon, the minimum guarantee would have to be re-worked and second option was that the defendant to pay the consideration on distribution basis, thereby absolving the defendant of any loss whatsoever and thereby, the compensation was reduced un-quantifiable basis. Third option was for the defendant to back out of the theatrical distribution agreement entirely and to only continue with the digital, audio and air-borne rights, which had put the plaintiff to loss.
(f) At last, the defendant attempted to re-work the agreement at the eleventh hour, coupled with the fact that the plaintiff e-mailed on 12.08.2018, thereby leading to re-negotiate the agreement terms due to floods. After this e- mail, legal action developed between the parties leading to send a letter dated Page No.5/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 25.08.2018 by the plaintiff, in which the plaintiff stated that their copyrighted videos relating to the trailers and music videos of the movie "Kayamkulam Kochunni" were still available on the defendant's web-site, much after the agreement between the parties, was called-off. Even after the said notice/letter, dated 25.08.2018, the promotional materials continued to be in existence on the web-site of the defendant.
(g) Even in the said notice dated 25.08.2018, the plaintiff had already requested for Rs.5 crores as damages for exploitation that occurred due to digital, audio and air-borne rights of the said Malayalam movie and also requested for Rs.2 crores spent on marketing the movie under the defendant's banner "EROS".
(h) Subsequently, the defendant issued a reply dated 03.09.2018 and the reply was also sent through counsel on 21.09.2018. There was no consensus-ad-idem between the parties with regard to the theatrical distribution rights and digital, audio and air-borne rights of the movie under dispute. Though the defendant profited off the plaintiff's copyrighted content, there was not even a single pie from the proceeds.
(i) The trailers and music videos generate money through well-placed ads that appear before the videos start, more particularly the internet-traffic with respect to the plaintiff's content on the defendant's YouTube channel only Page No.6/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 entices and other entities would advertise their wares or services on the defendant's channel. Ultimately and undoubtedly, the defendant reaped the benefits of such extensive publicity. The defendant offered a paltry sum of only Rs.25 lakhs for the music, audio and audio-visual rights of the impugned movie, after both parties had already acted in furtherance of the original understanding. In order to delete the defendant's banner "EROS", the plaintiff spent huge money. All the above prejudiced the opportunities for the plaintiff to monetize its content.
(j) Thus, according to the plaintiff, the defendant had indulged in infringement of the copyright subsisting in the plaintiff's music videos, trailers and promotional posters for the plaintiff's cinematographic film (Kayamkulam Kochunni) and as per the provisions of the Copyright Act, 1957, the plaintiff is first owner of the said film and any derivative works thereof. The plaintiff did not even saw a single rupee in respect of the said Malayalam film/movie for the exhibition of videos, trailers or promotional material. Hence, the plaintiff is sought to be compensated by the defendant for unauthorised use of the plaintiff's copyrighted works.
(k) The acts of the defendant has left the plaintiff in the toughest position of having to find other distributors at the very last minute, thereby, the defendant was able to successfully capitalise on the plaintiff's hard work by Page No.7/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 convincing the plaintiff to ignore other third parties and placed the defendant's banner on all promotional material and provide credit for the defendant in the said film with which CBFC certificate was obtained.
(l) It is crystal clear from the attitude of the defendant that the movie is already generating sufficient buzz and Revenue, which had diverted the act of the defendant in free of cost. Despite the plaintiff's accommodation of low turn- outs at the theatres due to the heavy rains in Kerala, the defendant had left the plaintiff in lurch, even though the posters for the movie is available on the defendant's web-site even at a later point of time after start of legal battle, leave alone the compensation sought to be made to the plaintiff by the defendant.
(m) The defendant had done the acts of passing-off by falsely stating to the public that the movie originates only from the defendant and also committed copyright infringement by enticing the plaintiff to give access to the videos, promotional material and trailers of the said Malayalam movie, as the acts of the defendant are prima-facie clear from their deeds.
(n) The defendant is liable for the acts of passing-off, copyright infringement and gross breach of understanding and agreement and this had caused irreparable loss, damages, injury and prejudice to the plaintiff. The intellectual property rights of the plaintiff had ultimately been infringed due to the unlawful conduct of the defendant.
Page No.8/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 Thus, for the foregoing averments, plaintiff seeks to grant permanent injunctions and also pray for payment of Rs.2 crores for marketing the film with the defendant's banner and also seeks Rs.5 crores as damages.
3. The main stand of the defendant/Company in brief in their written statement, is that the suit filed by the plaintiff is misconceived in law and on facts. There is no cause of action for the plaintiff to file the present suit. Without prejudice to the following, the defendant/Company has filed the written statement, crux of which is stated as under:
(i) Without prejudice, negotiations were carried out right from 30.07.2018 till 31.08.2018 between the plaintiff and defendant, qua, the Film Rights Acquisition Agreement for Rights in respect of the impugned Malayalam film "Kayamkulam Kochunni" starring Malayalam Superstar Mohanlal, Nivin Pauly and Pria Anand. The music is composed by Gopi Sunder and the film was directed by Rosshan Andrrews which also included the film Dubbed in Tamil and Telugu languages and there was no consensus-ad-idem, much less absolute, unconditional and unqualified acceptance between the parties regarding all the terms, conditions and stipulations thereon and the essential conditions thereof including the rights and price of the said film, due to which, no agreement in respect thereof was signed by the parties.
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(ii) There being no agreement or contract, there was no legal obligations imposed on the defendant to perform the agreement or discharge any obligations thereunder with the defendant never claiming the impugned film or any part thereof.
(iii) The plaintiff, wholly, at their own risk and volition, with a view to promote the said film and in anticipation of and pending conclusion and execution of agreement of the said film, furnished to the defendant the promotional content of four songs of the said film, on ErosNow Platform and YouTube channel of the defendant, and due to the publicity of the promotional content/materials of the said film, uploaded on the ErosNew Platform and YouTube channel of the defendant, the plaintiff derived immense pecuniary and other benefits including commercial success of the said film at the Box Office and carried out all advertisements, publicity and marketing expenses of the said film.
(iv) Further, the plaintiff actively concealed and suppressed from the defendant that the plaintiff had executed documents for the said film with a party in Dubai whereunder the Holdback for the release of the dubbed versions of the Tamil and Telugu languages of the said film, would be six weeks after theatrical release of the said film, despite which the plaintiff incorrectly agreed and stated in the 'without prejudice draft agreement' that the Tamil and Telugu versions of the said film would be released after three weeks. Consequent to the Page No.10/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 above circumstances, the plaintiff deleted the licence of the Tamil and Telugu versions of the film from the without prejudice draft agreement and of their own volition also, agreed to reduce the minimum guarantee amount (M.G) of Rs.15 crores to Rs.14 crores.
(v) Despite the fact that there was no consensus and unanimity between the parties regarding all the terms, conditions and stipulations and the essential terms in the said agreement and the rights of the said film, due to which no agreement in respect thereof was signed between the parties, the plaintiff illegally an unauthorisedly continued to use the Banner/Logo of the defendant in all their advertisements, marketing and publicity materials, thereby infringing the copyright and committing any acts of passing-off, in respect thereof. In the bargain, the plaintiff unjustly enriched themselves apart from mis-representing and misleading the public and cine-goers that the said film is being released by the defendant.
(vi) The Copyright Act, 1957 and the Copyright Amendment Act, 2012, mandates any assignment or licence of copyright in any work to be in writing and signed by the assignor or the licensor or by his duly authorised agent. There was no agreement whatsoever signed and concluded by the parties with the entire plaint and the allegations therein of infringement of copyrighted work in the impugned film and passing-off thereof, totally misconceived and untenable in Page No.11/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 law.
(vii) Pursuant to application for certificate for public exhibition for theatrical release of the impugned film, vide Rule 21(1) of the Cinematograph (Certification) Rules, 1983, was granted certificate by the Central Board of Film Certification (CBFC) on 17.08.2018, subject to excisions and modifications listed in Part-II on the reverse of the certificate. The excisions and modifications were initially carried out on 17.08.2018 and thereafter, the plaintiff made an application under Rule 33 of the Cinematograph (Certification) Rules, 1983 for excisions and modification in the impugned certified film. The record shows that excisions and modifications to the certified film were carried out by the plaintiff in Reels A: 1,2,3,4,6,7 and 8 thereof with the Examining Committee of the C.B.F.C. approving it on 26.09.2018, vide Rule 33 of the Cinematograph (Certification) Rules, 1983 and certificate for unrestricted public exhibition for Theatrical release finally given by CBFC to the impugned film on 28.09.2018 and subsequent to the certification of the impugned film on 28.09.2018, the plaintiff distributed and released the said film on 11.10.2018 to third party(ies) in more than 350 screens in Kerala and screened 1700 shows on the first day and on their own showing the said film grossed Rs.5.30 crores at Kerala Box Office on the first day and grossing Revenues of Rs.100 crores from the world-wide Box Office and therefore, the allegations and claim of the plaintiff of: (i) releasing the Page No.12/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 impugned film either on 15.08.2018 or 17.08.2018 and thereafter on 22.08.2018,(ii) sustaining or suffering any losses and the claim of compensation of the plaintiff, to their knowledge and manifestly false, misconceived and untenable in law.
(viii) Further, the suit is bad for non-joinder of necessary parties. The Music Audio of the three songs, viz., (i) Krishnamizhikal, (ii) Kalari Aavum and
(iii) Thjanajana Naadam of the said film was uploaded on 08.10.2018 and one song, viz., NaaduVaazhuka was uploaded on 25.10.2018 on ErosNow Platform by Eros Digital FZ LLC, a separate entity incorporated in accordance with law of United Arab Emirates (UAE) and this was done pursuant to Digital License Agreement, dated 07.07.2015 and Addendum thereto, dated 31.07.2017, signed by Eros Digital FZ LLC with Divo TV Private Limited (Divo), of which, the plaintiff was aware of. The said three songs were de-activated from ErosNow Platform on 05.11.2018 and the said one song was deactivated from ErosNow Platform on 31.10.2018. From 05.11.2018/31.10.2018, the defendant ceased from uploading the music audio of all the said four songs of the said film with communication in respect thereof given to the plaintiff. The plaintiff was fully aware of the material facts, but concealed the same from this Court and on the basis of incorrect and distorted facts, secured ex-parte ad-interim order on 01.11.2018 against the defendant.
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(ix) The music audio of the song Kalariyadavum of the said film was uploaded on 02.08.2018 and music video of the song Kalariyadavum of the said film, was uploaded on 01.08.2018, lyrical video of the song "Kalariyadavum" - full song with lyrics of the said film was uploaded on 09.08.2018 and lyrical video of the song "Kalariyadavum" - full song with lyrics of the said film was uploaded on 09.08.2018 and the lyrical video of the song "Krishnamizhikal" - full song with lyrics of the said film was uploaded on 13.08.2018 and lyrical video of the song "Thjanajana Naadam" - full song with lyrics of the film, was uploaded on 10.08.2018 on ErosNow Platform/YouTube channel by Eros Digital FZ LLC. This uploading was done by the defendant pursuant to the instructions and at the behest, desire, instance, request and licence given by the plaintiff to the defendant, to promote the film in anticipation of and pending conclusion, finalisation and execution of the said agreement. Since for the reasons, as set out in the letter of the defendant, dated 17.08.2018 consensus and unanimity between the parties qua all the terms, conditions and stipulations of the said agreement could not be arrived at or otherwise, eluded the parties and the said agreement was not signed. Accordingly, the defendant, on 03.09.2018 de- activated all the promotional content of five songs of the said film on ErosNow Platform/YouTube channel and communicated the same to the plaintiff. Therefore, question of any infringement of copyrights of the plaintiff in the said Page No.14/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 film or defendant committing any acts of passing-off, does not arise or warrant at all. Hence, the plaintiff is not entitled to any reliefs, nor the defendant liable to pay any compensation, money - pecuniary or otherwise, for the promotional content or the publicity of the said film, all of which were done suo-motu by the plaintiff at their entire risk pending conclusions and executions of the said agreement, which did not fructify or materialise.
(x) The defendant is a leading global production and distribution company in the Indian film entertainment industry and is a pioneer and innovator in Indian film entertainment for over past 39 years. The defendant acquired, co- produced and distributed some of the most recognised and successful Indian language films across theatrical television and other formats and globally released Indian languages films, which have been amongst the top Box Office grossing film in India; distribute contents in all the 14 circuits in India, either through its internal distribution offices in Mumbai, Delhi, East Punjab, Mysore, Kerala, West Bengal and Bihar or through sub-distribution, outside India distributes films theatrically having offices in Dubai, Singapore, U.S., U.K, Australia and Fiji; serves one of the largest and growing television markets in the world by licensing high quality Indian film content to Satellite television broad- casters operating in India, including major Indian Television channels, such as Colors, Sony, the Star Network and Zee TV, and distributes films through Page No.15/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 established world-wide multi-channel distribution network with the films distributed to the South Asian diaspora world-wide and to non-Indian consumers who view Indian films which are sub-titled or dubbed in local languages. Internationally, the distribution network of the defendant extends to over 50 countries including US, UK, throughout Middle East, Germany, Poland, Russia, Romania, Indonesia, Malaysia, Taiwan, Japan, South Korea, China and Arabic speaking countries. In addition, to theatrical and television distribution network, the defendant has a global network for digital distribution of its contents which consists of full-length films, music, music videos, clips and other video contents, distributing the contents primarily in IPTV, VOD, including SVOD and DTH and online internet channels.
(xi) The defendant has a robust presence in Mollywood film industry in India and had taken the Malayalam Films to the international audience, and within a short span of three years of entry in the Malayalam films, the defendant released and distributed 9 Malayalam films, (i) Life of Josutty, (ii) Pathemari,
(iii) 2 Penkuttikal, (iv) while, (v) Happy Wedding; (vi) IDI, Inspector Dawood Ibrahim, (vii) C/o Saira Banu, (viii) ViswaVikhyatharayaPayyanmar and
(ix)Olappeepi. The film Pathemari was the recipient of National Film Award for Best Feature Film 2016, film-fare award for Best Actor Malayalam -- Mammotty 2016, film-fare Award for Best Film Malayalam 2016 and Kerala State Film Award Page No.16/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 for Best Film Malayalam 2016 and Kerala State Film Award for Best Background Score 2016 - Bijibal and Film "2 Penkuttikal" won Kerala State Film Award for Best Child Artist - Anna Fathima and Film "Olappeeppi" won Kerala State Film Award for Best Characater Artist -- Kanchana. All these clearly demonstrate the defendant's formidable, impressive and robust presence in the Malayalam Cinematograph Film Industry. On the other hand, it is the plaintiff who had extremely keen to associate themselves with the defendant due to their overwhelming credentials, reputation and standing in domestic and international market and their undisputed leadership and position as the largest and well- established film entertainment Company in India.
(xii) By agreement, dated 07.07.2015 between Divo TV Private Limited (Divo) and Eros Digital FZ LLC (Eros Digital), in respect of which the plaintiff cannot feign ignorance, as they being the Producers of the Film licensed Music Audio of the film and songs thereof to Divo, a company from the EROS Group, acquired music audio of the said four songs owned and/or controlled by the Divo whether at present or in future during the term. The term of the said agreement dated 07.07.2015 was extended upto 31.07.2019 by First Addendum to the license agreement, dated 07.07.2015. By e-mail dated 24.10.2018 Divo Operation term addressed the content team for Eros Now Release, viz., "Please Process for Release. We are happy to be associated with the upcoming Page No.17/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 Malayalam movie "Kayamkulam Kochunni" starring Malayalam Superstar Mohanlal, Nivin Pauly and Priya Anand, music composed by Gopi Sunder, directed by Roshan Andrews. Last single releasing today 24th October 2018. Please help us to make Single Live at the earliest. Master -- https://we.t/tt- 1lGjUa5SCv Please find attached the Metadata & Album Art." Further, by e-mail, dated 05.11.2018 in response to the e-mail of the defendant to confirm the rights of the music of the said film Divo, confirmed stating "Confirming the rights of the Music of the said Film Divo and can be reinstated on your end". These conclusively establish and corroborate that the promotion of the said Film by the Promotional content of 4 songs on the defendant's web-site and ErosNow Platform was well within their rights and did not commit any act of passing-off or infringe the rights in the said film, as alleged. Pursuant to acquisition of the music audio of the said 4 songs of the said film, there was no infringement of any rights in the said film and therefore, the question of rendering account of profits to the plaintiff or to pay any damages for unauthorised use and infringement of the said film or compensation for marketing the said film to the plaintiff, does not arise or warrant at all.
(xiii) The plaintiff was producing the Cinematograph film in Malayalam languages title "Kayamkulam Kochunni". The film was based on the life of Kayamkulam Kochunni, a real-life hero and a famed Highwayman who helped Page No.18/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 the poor and downtrodden by robbing from the rich and giving to the poor during the British Raj in the early 19th Century Central Travancore. Since the film pertained and revolved on the event in the British Raj the release date of 15.08.2018 of the said film, which was Independence Day, apart from the fact that Onam festival and holidays were also around and which would impact the Box Office collection of the said film, was the essence of or sine-qua-non of the agreement. The plaintiff, having regard to the extensive network and expertise of the defendant in distribution and exhibition inter-alia of the Cinematographic Films, was desirous of licensing on sole and exclusive basis the theatrical rights for the territory of India and world-wide digital, air-borne and music rights of the said film to the defendant. Accordingly, in July 2018 or thereabout the defendant and the plaintiff commenced without prejudice negotiations for the licensing on sole and exclusive basis theatrical rights for territory of India and world-wide digital, air-borne and music rights of the said film and the theatrical rights of the dubbed version of the said film in Tamil and Telugu languages for the territory of India. For the reasons stated in the written statement, the plaintiff was unable to release the said film either on 15.8.2018 or 17.08.2018 or 22.08.2018.
(xiv) During the 'without prejudice' negotiations and pending consensus, unanimity and finalisation of all the terms, conditions, stipulations and essential terms of the agreement of the said film and execution thereof, it Page No.19/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 was proposed that the total deal value would be Rs.20 crore, i.e. theatrical MG Rs.15 crores and an outright amount of Rs.3 crores for digital, air-borne and music rights of the said film and the balance amount of Rs.2 crores would be a refundable advance against theatrical rights. The defendant would be entitled to 15% distribution commission and the over-flow of Revenues derived from the theatrical rights of the said film in India would be shared between the plaintiff and the defendant in the ratio of 40% and 60%, i.e. 40% by the plaintiff and 60% by the defendant and it was also proposed between the plaintiff and the defendant that the release date of the said film cannot be delayed beyond 15.08.2018 and if it is done, then the defendant will have the option to either exit the deal or take a discount on MG of Rs.5 crores and the plaintiff was to exclusively bear and spend a minimum amount of Rs.2.5 crores on marketing of the film. The plaintiff has to further promote the said film world-wide, provide the defendant with music videos and the trailers of the said film inter-alia on ErosNow Platform and YouTube channel and at their own cost, carry out the publicity of the said film.
(xv) Consequent to the without-prejudice-negotiations between the parties and without-prejudice draft of Film Rights Acquisition Agreement was prepared by the defendant, and the same was sent to the plaintiff for their consideration on 02.08.2018 by without-prejudice e-mail. The foregoing Page No.20/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 agreement stipulated the release date of the said film for whatever reasons, was postponed and the film was not released on 15.08.2018, then the M.G. amount would be reduced from Rs.15 crores to Rs.10 crores with the defendant also, having a right to terminate the agreement whereupon the plaintiff was enjoined to refund the defendant all monies paid by the defendant to the plaintiff and till then, the defendant would have a paramount and charge on the said film and all its materials. The above-said without-prejudice-draft of the agreement, vide Clauses 38, 39 and 40, stipulated arbitration, in case any dispute or difference arising out of or in connection with the said agreement, the same shall initially be resolved by mutual consultation, failing which, the same shall be referred to arbitration of a sole arbitrator appointed mutually by the assignor and assignee, failing which, the sole arbitrator will be appointed, vide Section 11 of the Arbitration and Conciliation Act, 1996, in the High Court of Judicature at Bombay, with the arbitration governed by the provisions of Arbitration and Conciliation Act, 1996 and the arbitration proceedings shall be in English and held in Mumbai and the Court, in Mumbai alone, shall have the jurisdiction. Further, this agreement shall be construed and governed by the laws of India and shall be subject to the exclusive jurisdiction of the Courts in Mumbai and this agreement, shall, in all respects, be governed by and construed in all respects in accordance with the laws of India. The parties agree to submit to the exclusive jurisdiction of Page No.21/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 the Courts in Mumbai in connection with any dispute arising out of or in connection with this agreement. The above stipulations were incorporated in all the without-prejudice-draft of the agreement and sent by the plaintiff to the defendant from time to time and accepted by the plaintiff. The copy of the without-prejudice-draft of the agreement sent to the plaintiff, vide e-mail of the defendant, dated 02.08.2018.
(xvi) Further, by e-mail, dated 05.08.2018, the plaintiff sent to the defendant, a revised draft of the said agreement with extensive changes, modifications and variations in respect thereof, restricting the agreement to Malayalam film and all references to the dubbed versions of the film in Tamil and Telugu languages were deleted and excluded and in addition, various clauses of the agreement were altered, changed and varied.
(xvii) Moreover, by e-mail dated 07.08.2018, the defendant informed the plaintiff that some of the points suggested by them, vide e-mail, dated 05.08.2018, were not acceptable to the defendant. By the said e-mail, the defendant sent to the plaintiff, the without-prejudice-revised draft of the India Theatrical-Film Rights Acquisition Agreement of the said film (in Malayalam language and dubbed in Tamil and Telugu languages) with the theatrical release date for the said film being 17.08.2018 and for dubbed in Tamil and Telugu languages thereof within two weeks from the release of the said film, with both Page No.22/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 the release dates being the essence of the agreement and in case the release date of the said film for whatever reasons, was postponed and the film was not released on 17.08.2018, then the M.G. amount would be reduced from Rs.15 crores to Rs.10 crores with the defendant also having a right to terminate the agreement, whereupon the plaintiff was enjoined to refund the defendant all monies paid by the defendant to the plaintiff and till then, the defendant would have a paramount lien and charge on the said film and all its materials. The release date of 17.08.2018 for the said film, was mentioned in the without- prejudice-draft of the agreement sent to the plaintiff, vide e-mail of the defendant, dated 08.08.2018, because the plaintiff was unable to get the film censored by the CBFC. Further, the plaintiff, vide e-mail, dated 09.08.2018 again made changes in the said agreement and sent a without-prejudice revised draft thereof with changes and deletions including comments by their Advocate seeking their confirmations and instructions on several clauses and that, the copy of the without-prejudice draft of the agreement was sent to the plaintiff, vide e- mail of the defendant, dated 08.08.2018.
(xviii) Furthermore, by e-mail dated 09.08.2018, the plaintiff made capacious and extensive changes to the without-prejudice draft of the agreement, dated 08.08.2018 and sent a without-prejudice revised draft thereof, with changes and deletions, including the comments by their Advocate seeking Page No.23/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 their confirmations and instructions on several clauses therein.
(xix) From the changes made in the said agreement, it shows that the same were not accepted by the defendant. Even otherwise, on a reading of the e-mail of the plaintiff, dated 05.08.2018 and 09.08.2018 with the comments and notes of their Advocate thereon, per-se, shows that the plaintiff and their Advocate were dilly-dallying and dithering on the release dated of 17.08.2018, thereby, confirming the uncertainty of the release date of the said film. In any event, having regard to the facts and circumstances set out by the defendant in this written statement, the impugned film was ultimately certified by the CBFC for theatrical release on 28.09.2018 and the plaintiff, could not, under any circumstances, release the said film on 17.08.2018 or 22.08.2018 and all allegations to the contrary by the plaintiff, are to their knowledge, utterly false, apart from being immaterial, irrelevant and inconsequential.
(xx) Further, by e-mail, dated 10.08.2018, the defendant, inter-alia set out the changes made in the without-prejudice draft sent by the plaintiff on 09.08.2018 and stated that other changes therein, would be dealt with by the legal department. The changes and various made by the plaintiff in the without- prejudice-draft of the agreement, dated 08.08.2018 and sent by the plaintiff to the defendant, vide their e-mail, dated 09.08.2018, were not accepted or approved by the defendant. In the result, the parties reverted to the without- Page No.24/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 prejudice-draft of the agreement sent by the defendant to the plaintiff, vide their e-mail, dated 02.08.2018, wherein, it was inter-alia clearly stated that the release date of the impugned film would be 15.08.2018 and if for any reason whatsoever, the said film was not released on 15.08.2018, then the M.G. amount would be reduced from Rs.15 crores to Rs.10 crores and which was also accepted by the plaintiff, vide their e-mail, dated 05.08.2018.
(xxi) On 11.08.2018, the plaintiff replied to the e.mail, dated 10.08.2018 of the defendant stating "Pls find my reverts in Red". Further, by e- mail dated 12.08.2018, the plaintiff, inter-alia alleged that they were almost on the verge of striking a deal with "Malayala Manorama" for Rs.25 lakhs, but they agreed to associate with the defendant, keeping in mind the larger perspective and that they had been clear and straight forward in their terms only the reason of being getting associated with an organisation like EROS. The plaintiff, by their e-mail, dated 12.08.2018, while confirming that the contract was not signed between the parties, however, made false and unfounded allegations against the defendant that the said film was being censored when the censor certificate on the plaintiff's own showing was dated 17.08.2018 with the certificate for impugned film after application for excisions and modifications, was ultimately issued certified for theatrical exhibitions by the CBFC on 28.09.2018 with the plaintiff finally releasing the said film inter-alia in Kerala on 11.10.2018. The Page No.25/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 plaintiff falsely alleged that the deal was progressing in a very unsatisfactory manner and that the defendant was going back from the agreement. These allegations of the plaintiff are denied by the defendant and were dealt in-extenso by the defendant by their e-mail, dated 12.08.2018 and 17.08.2018.
(xxii) The defendant, by e-mail, dated 12.08.2018 to the plaintiff, recorded the unfortunate flooding an devastation in Kerala, despite which they were keen to partner, with the defendant for the said film, but with the revised date of release being 22.08.2018, as there was no way the said film could be released on 17.08.2018, having regard to current scenario and the censor process of the impugned film, still pending. The defendant informed the plaintiff about the fate of the film Viswaroopam, which had a poor opening due to natural calamities and similarly, the Box Office collections of the impugned film, would surely be affected, if it would have been released on 17.08.2018, by the said e.mail, the defendant recorded that all the aforesaid issues were discussed by the defendant with the plaintiff who agreed with the same and looking at the current scenario the theatrical M.G. amount of the said film needed revision for the reasons stated therein. Thus, by the said e.mail, dated 12.08.2018, the defendant merely proposed three options to the plaintiff, viz., theatrical MG to be reduced, digital/air.borne/music remains the same and that the defendant could do theatrical on distribution basis for the plaintiff, so that the plaintiff may get Page No.26/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 most of the Box Office collection, digital/air.borne/music deal remains the same and the defendant only do digital/air.borne/music deal, terms can be discussed and regarding the branding and exploitation of music rights of the said film, the defendant stated that pending conclusion of the agreement, branding and exploitation of music rights of the said film, can be put on hold. The above-said proposals, options and suggestions of the defendant, were not accepted by the plaintiff, the same being apparent by the absence of any communication of acceptance thereof, by the plaintiff to the defendant.
(xxiii) By another e.mail also, dated 12.08.2018, the plaintiff whilst confirming two weeks of negotiations and even though the plaintiff was aware that no agreement was signed and concluded between the parties for all the terms, conditions and the essential terms thereof and that the impugned film encountered difficulties with the CBFC, made manifestly false and unfounded allegations which were contrary to the materials on record. The plaintiff also falsely alleged agreement between the parties and that the agreement was to be signed on 10.08.2018.
(xxiv) By e.mail dated 14.08.2018, the plaintiff to their knowledge, imputed false and baseless allegations against the defendant. The plaintiff mala- fide distorted and misinterpreted the e.mail of the defendant, dated 12.08.2018, which clearly stated that as the said film was yet to be censored, the same could Page No.27/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 not be released on 17.08.2018. Having regard to the current scenario, i.e., the flood situations, would impact and affect the Box Office collections of the film. Accordingly, the defendant in e.mail, dated 12.08.2018, suggested the revised date of release as on 22.08.2018, subject to the three options state therein, which the record shows, was not accepted by the plaintiff. The plaintiff could not under any circumstances, release the said film on 17.08.2018, as the plaintiff had not completed the said film in all respects and also could not get the said film censored by the CBF. On the plaintiff's own showing, the Censor Certificate of the said film, issued by the CBFC, was dated 17.08.2018 with the plaintiff thereafter, making application under Rule 33 of the Cinematographic (Certification) Rules, 1983, for alterations in the certified film with the CBFC. The record shows that excisions and modifications to the certified film were carried out by the plaintiff in Reels-A : 1,2,3,4,6,7 and 8 thereof, with the examining committee of the CBFC approving it on 26.09.2018, vide Rule 33 of the Cinematographic (Certification) Rules, 1983 and certificate for unrestricted public exhibition for theatrical release finally given by CBFC to the impugned film on 28.09.2018. Thus, the impugned film could not under any circumstances, be released on 17.08.2018 or 22.08.2018 and all the allegations of the plaintiff to the contrary, are manifestly and patently false and absurd and otherwise immaterial, inconsequential and irrelevant.
Page No.28/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 (xxv) The defendant, by e.mail, dated 17.08.2018 to the plaintiff, dealt with the allegations regarding reduction of the M.G. amount and invited the attention of the plaintiff to the initial without-prejudice-drat of the agreement, sent by the defendant to the plaintiff, vide their without-prejudice e.mail, dated 02.08.2018, wherein it was clearly stated that the release date of the said film would be 15.08.2018, failing which the defendant would have the option to exit the deal or get a discount of Rs.5 crores in the consideration and which was agreed to by the plaintiff as more specifically stated in their e.mail, dated 05.08.2018. Further, the reduction of the M.G. amount of Rs.15 crores to Rs.14 crores, was also suo-motu agreed by the plaintiff for the reasons set out in the e.mail, dated 17.08.2018 of the defendant in particular, paragraph 10 thereof. In the said paragraph 10, it was clearly stated that the plaintiff, had initially, suppressed from the defendant that the plaintiff had signed document relating to the said film with the party in Dubai whereunder the hold-back for the release of the dubbed version of the Tamil and Telugu languages of the said film, would be six weeks after theatrical release of the said film, despite which, the plaintiff had incorrectly agreed and stated in the without-prejudice-draft agreement that the Tamil and Telugu version of the said film, would be released after three weeks. Consequent to the above, the plaintiff deleted the license of the Tamil and Telugu version from the without-prejudice draft agreement and of his own Page No.29/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 volition agreed to reduce the minimum guarantee amount of Rs.15 crores to Rs.14 crores. The defendant denied exploitation of the digital rights or air.borne rights of the said film. Because of the reputation and standing of the defendant in the film fraternity and entertainment industry and their sincere and excellent promotion, branding and uploading of music videos, trailors and promotional materials of the said film by the defendant on their web-site as well as their YouTube channel, the said film got outstanding fame, acclamation and publicity at the cost of the defendant. In any event, there was no consensus-ad-idem between the parties regarding all the terms, conditions and stipulations of the said agreement, nor any agreement concluded or signed by the parties in respect of the said film. All the allegations by the plaintiff in the relevant paragraph, was unwarranted and not justified by the documents and materials on record. It is clear that the plaintiff being aware of the aforesaid facts recklessly and based on extraneous and irrelevant considerations made false and absurd allegations against the defendant.
(xxvi) By e.mail, dated 17.08.2018, the defendant clearly stated that the parties were merely without-prejudice, discussing and negotiating terms, conditions and stipulations of the agreement and there was no consensus or unanimity whatsoever between the parties in respect thereof, or its essential conditions and no agreement signed by the parties hereto. The plaintiff also Page No.30/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 carried out extensive and fundamental changes and variations in the without- prejudice draft, dated 08.08.2018 of the said agreement, more particularly stated in the Clauses 5, 6, 8, 10, 11.2, 11.5, 12.4, 12.6, 13.2, 14.4, 15.1, 15.2, 15.3(i), 15.3(iv), 16, 18, 21.5, 21.14, 21.20, 21.23, 21.26, 21.28, 21.31, 21.36, 21.37, 21.39, 21.40, 22.4, 24, 25, 31.2, 31.A, 38, 49 and 40 thereof. Annexure "A" needs to be clarified with respect to the rights on MG basis and on outright basis. The defendant informed the plaintiff in detail about the disagreements of the terms, conditions and clauses of the agreement and non-execution of the agreement and the reasons in detail for not signing the same. By the said letter, dated 17.08.2018, the defendant also stated that the allegations in e.mails, dated 12.08.2018 and 14.08.2018 of the plaintiff were totally false, untrue and invalid and not justified and warranted by the documents and materials on record that showed that there was no consensus between the parties on all the terms and conditions of the agreement and all essential conditions thereof, consequent to which, no agreement was signed by the parties. The defendants denied the allegations of the plaintiff that the deal was progressing in very un- professional manner and that the defendant was going back on mutually agreed terms and conditions. The defendant recorded that the unprecedented floods ravaging in the entire State of Kerala, caused enormous loss to the lives and properties completely disrupting the entire economic activity of the State of Page No.31/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 Kerala. The floods in Kerala was a worst flood in the century and the people were marooned with vest stretches of water. The Kochi Airport was closed upto 26.08.2018 and Ernakulam and other areas of Kerala, were cut-off. Without prejudice to their rights and contentions, the defendant, vide their letter dated 17.08.2018, informed the plaintiff that they were ready to acquire the sole and exclusive music, audio and audio-visual rights of all the songs of the film, viz., (i) Kalariyadavum; (ii) Thjanajana Naadam, (iii) Krishnamizhikal and
(iv)NaaduVaazhuka, only of the said film on outright basis, in perpetuity for the territory of whole-world/Universe for a fixed consideration of Rs.25 lakhs. This price of Rs.25 lakhs for the audio rights of the said film, was made on the basis of the e.mail dated 12.08.2018 of the plaintiff, wherein, they claimed that the plaintiff 'was almost on the verge' of striking a deal with Malayalam Manorama for Rs.25 lakhs.
(xxvii) The theatrical release date of the said film was changed/postponed from 15.08.2018 to 17.08.2018 at the request of the plaintiff on the ground that the said film was not yet censored by the CBFC and therefore, the plaintiff could not be able to deliver the said film within the stipulated time for theatrical release on 15.08.2018. The plaintiff and their Advocate were dilly-dallying and dithering on the release date of 17.08.2018, the same being apparent from their e.mails dated 05.08.2018 and 09.08.2018. Due Page No.32/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 to the above facts, there was no certainty that the impugned film would be released on 17.08.2018. In any event, the revision of the theatrical release date of the said film from 15.08.2018 / 17.08.2018 did not alter or vary the consequences stated in the without-prejudice drafts of the agreement, dated 02.08.2018 and dated 08.08.2018. Both the above agreements clearly stated that in the event of the change of the theatrical release date of the said film for any reason whatsoever the M.G. amount from Rs.15 crores, would stand reduced to Rs.10 crores, apart from the fact that the defendant would have the right to terminate the agreement, whereupon the plaintiff would be liable to refund to the defendant all monies paid by the defendant to the plaintiff and till then, the defendant would have a paramount lien and charge on the said film and all its materials and which was accepted by the plaintiff, vide their e.mail dated 05.08.2018. As the parties failed to reach any consensus or mutual agreement on all the terms and conditions of the agreement and their essential conditions thereof, it was therefore futile for Mr.Girish Kumar to go to Chennai for execution thereof and accordingly, Mr.Girish Kumar refrained from going to Chennai. In this view of the matter, the allegations of the plaintiff that the defendant was going back on all the terms and conditions are denied. As stated in Clause 2(vii) of the written statement, on the plaintiff's own showing, the censor certificate of the said film issued by the CBFC was dated 17.08.2018 with the plaintiff Page No.33/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 thereafter making application under Rule 33 of the Cinematograph (Certification) Rules, 1983, for alterations in the certified film with the CBFC. The record show that excisions and modifications to the Certified Film, were carried out by the plaintiff in Reels A : 1,2,3,4,6,7 and 8 thereof with the examining committee of the C.B.F.C. approving it on 26.09.2018, vide Rule 33 of the Cinematographic (Certificate) Rules, 1983 and certificate for unrestricted public exhibition for theatrical release finally given by CBFC to the impugned film on 28.09.2018. Thus, all the allegations of the plaintiff to the contrary are manifestly and patently false and absurd and otherwise immaterial, inconsequential and irrelevant. All the allegations of the plaintiff in their e.mails and letters to the defendant, are contrary to and inconsistent with what is stated in the written statement, are denied.
(xxviii) On 29.08.2018, the defendant received the notice dated 25.08.2018 of the learned counsel for the plaintiff, making false, unfounded and ridiculous allegations against the defendant, which were manifestly contrary to the documents and materials on record. By the said notice, dated 25.08.2018, the Advocate for the plaintiff inter-alia called upon the defendant to stop forthwith the digital, audio and air.borne exploitation of the said film on the defendant's mobile app, YouTube Channel as well as any other platform that these videos might have been uploaded or disseminated on making make a Page No.34/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 public announcement stating that defendant are in no way involved in the said film henceforth and pay to the plaintiff a sum of Rs.5,00,00,000/- as damages for the exploitation thus far of the digital, audio, rights of the songs, trailers of the said film, as well as Rs.2,00,00,000/- that was spent by the plaintiff on marketing the said film with the banner of defendant. Consequent to the requisitions therein, the defendant removed the promotional materials from the web-site of the defendant and their YouTube channel since 03.09.2018.
(xxix) By interim reply dated 03.09.2018 and detailed reply dated 21.09.2018, the learned Advocate for the defendant denied all allegations in the said notice, dated 25.08.2018 and reiterated what was stated in the letter of the defendant, dated 17.08.2018 addressed by the defendant to the plaintiff. The defendant recorded that digital, audio and air.borne contents of the said film, were never exploited by the defendant, at the behest, desire, instance and request of the plaintiff, was uploaded by the defendant purely for the publicity of the said film pending conclusion and finalisation of the agreement in respect of the said film. The defendant also recorded that for the reasons stated in their letter dated 17.08.2018, no consensus or unanimity, could be arrived at or reached, qua, all the terms, conditions and stipulations of the agreement of the said film, the same was thus not signed or executed and consequently, the defendant was in no way concerned, interested or involved with the said film and Page No.35/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 its materials thereof and all the allegations to the contrary by the plaintiff was false and misconceived.
(xxx) It is manifest that without-prejudice negotiations were carried out right from 30.07.2018 till 31.08.2018, between the plaintiff and the defendant for the said film rights acquisition agreement and rights of the impugned film and there was no consensus ad-idem much less absolute, unconditional and unqualified acceptance between the parties regarding all the terms, conditions and stipulations thereof, including the rights and price of the said film, due to which, no agreement or contract in respect thereof, was signed by the parties hereto. In the absence of any agreement or contract, there was no legal obligations incurred or imposed on the defendant to perform the agreement or discharge any obligations thereunder the issue of breach thereof, does not arise or warrant at all. Accordingly, the allegations of the plaintiff that the defendant committed any acts of passing-off of the plaintiff's title in the impugned film or infringing the copyrighted work in the promotional materials, trailers or music videos, clips or any portion thereof or the entirety of the impugned film or that the plaintiff suffered any losses and the consequent claim of compensation of the plaintiff manifestly false, speculative and untenable in law. Further, having regard to the facts and circumstances set out by the defendant in the written statement, the impugned film was ultimately certified by Page No.36/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 the CBFC for theatrical release on 28.09.2018 and the plaintiff could not, under any circumstances, release the said film on 15.08.2018 or 17.08.2018 or 22.08.2018. In any event, under the Copyright Act, 1957, any assignment or license of copyright in any work is required to be in writing and signed by the assignor or the licensor or by his duly authorised agent. There was no agreement whatsoever, signed and concluded by the parties with the entire plaint and the allegations therein of infringement of copyrighted work in the impugned film and passing-off is thereof totally misconceived and untenable in law.
(xxxi) The defendant is not aware of the alleged credentials either of the plaintiff and/or the Power Agent - Mr.V.C.Parveen. The defendant denies that the said film garnered much attention already, and with a budget of Rs.50 crores, it was slated to be the most expensive Malayalam film ever made, as alleged. Owing to the interest surrounding the said film, sometime in the month of July 2018, the defendant had approached the plaintiff with the intention of distributing the said film. The defendant had a negligible presence in the Malayalam film fraternity and undoubtedly believed that it would be prudent to partner with the plaintiff so as to increase their market share in the Malayalam film industry as alleged. It is denied that after initial negotiations between the plaintiff and the defendant, a contract was circulated by the defendant, by which, the defendant would obtain the theatrical exploitation rights for a minimum Page No.37/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 guaranteed amount of Rs.17,00,00,000/- plus GST and that, in addition thereto, the defendant would pay an additional sum of Rs.3,00,00,000/- plus GST to the plaintiff for the digital, audio and air.borne rights, as alleged.
(xxxii) The defendant denies that the parties herein exchanged several e.mails with respect to the finer details of the agreement and they were in consensus with respect to the compensations relating to the theatrical exploitation rights along with digital, audio and air.borne rights and in pursuance of the said agreement and to get a head start on promoting the said film, the defendant requested the plaintiff to allow for certain music video and trailers to be posted on the defendant's web-site and that the plaintiff duly obliged, keeping in mind the payments that would be undoubtedly due as per the agreement between the parties regarding the exploitations of the digital, audio and air.borne rights and the defendant obtained the music videos, trailers and promotional material of the impugned film and uploaded the same on their website as well as their YouTube channel and that due to the high-profile nature of the movie, the videos collectively garnered millions of views and viewers were eagerly awaiting the release of the said film as alleged. It is manifest that all throughout the parties proposed and counter proposed and carried out without-prejudice negotiations and exchange correspondence and drafts of the agreement of the said film. The documents and materials on records disproves and refutes the Page No.38/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 allegations of the plaintiff and conclusively shows that there was no consensus and unanimity between the parties regarding the terms, conditions and stipulations of the said agreement, including but not restricted to the compensation relating to theatrical exploration rights along with the digital, audio and air.borne rights of the said film as alleged, nor any agreement signed by the parties in respect thereof. Therefore, all inferences and conclusions to the contrary by the plaintiff, are patently illegal and perverse.
(xxxiii) The defendant made any request for allowing the defendant to post the videos on the website of the plaintiff or requested the plaintiff for accommodation to place their banner "Eros" on all the trailers and promotional for the impugned film as well as inside the film that was submitted for the Central CBFC certificate. The plaintiff's efforts to ensure that the public knew of the defendant's involvement in the said film, helped the defendant market themselves better as an esteemed production house in the Malayalam film industry and that the concerted efforts of the plaintiff in ensuring that the public knew of the defendant's involvement in the said film/impugned film, came on the heels of repeated requests by the defendant to do so as alleged. The defendant is a global production and distribution company in the Indian Film entertainment industry and is a pioneer and innovator in the Indian film entertainment for over past 39 years.
Page No.39/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 (xxxiv) The defendant denies that they had agreed to the release date of 17.08.2018 as alleged and push back of release date of the film, was common in the industry and that the defendant agreed to 22.08.2018 as the revised date of the release of the said film, as alleged and that the defendant suddenly stated that the release date of 22.08.2018 was not acceptable to the defendant as alleged and that the defendant sought to under-cut the consideration payable to the plaintiff under the theatrical distribution rights agreement. The defendant by their e.mail dated 12.08.2018 to the plaintiff recorded the unfortunate flooding and devastation in Kerala, despite which, they were keen to partner with the defendant for the said film, but with the revised date of release and theatrical MG amount of the said film and for the reasons stated therein. By e.mail, dated 12.08.2018, the defendant merely proposed 3 options to the plaintiff, viz., theatrical MG to be reduced. Digital/air.borne/music remains the same and that the defendant can do theatrical on distribution basis for the defendant, so, the defendant get most of the Box Office collection, digital/air.borne/music deal remains the same and they only do digital/air.borne/music deal remains the same and they only do digital/air.borne/music deal, terms can be discussed and regarding the branding and exploitation of music rights of the said film, the defendant stated that pending conclusion of the agreement branding and exploitation of music rights of the said film can be put on hold. The proposals, Page No.40/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 options and suggestions of the defendant were not accepted by the plaintiff the same being apparent by the absence of any communication of acceptance in that regard by the plaintiff to the defendant.
(xxxv) As for the allegations regarding reduction of the M.G. amount, the defendant invited the attention of the plaintiff to the initial without prejudice draft, dated 02.08.2018 exchange between the parties, wherein, it was clearly stated that release date of the said film, would be 15.08.2018, failing which the defendant would have the option to exit the deal or get a discount of Rs.5 crores in consideration that the M.G. amount, would be reduced from Rs.15 crores to Rs.10 crores and which was agreed to by the plaintiff as more specifically stated in their e.mail, dated 05.08.2018. Further, the reduction of the M.G. amount of Rs.15 crores to Rs.14 crores, was suo-motu agreed to by the plaintiff for the reasons set out in e.mail, dated 17.08.2018 of the defendant, in particular, paragraph 7 thereof. In the said paragraph 7, it is clearly stated that the plaintiff had initially suppressed from the defendant that the plaintiff had signed the document relating to the said film with the party in Dubai, where-under the hold- back for the release of the dubbed version of the Tamil and Telugu languages of the said film, would be six weeks after theatrical release of the said film, despite which the plaintiff had incorrectly agreed and stated in the without prejudice draft agreement that the Tami and Telugu version of the said film, would be Page No.41/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 released after three weeks. Consequent to the above, the plaintiff deleted the license of the Tamil and Telugu version from the without-prejudice draft agreement and of his own volition agreed to reduce the minimum guarantee amount of Rs.15 crores to Rs.14 crores. The defendant never exploited the digital rights or air.borne rights of the said film. Because of the reputation and standing of the defendant in the film fraternity and entertainment industry and their sincere and excellent promotion, branding and uploading of music videos, trailors and promotional materials of the said film by the defendant on their website as well as their YouTube channel, the said film got outstanding fame, acclamation and publicity at the cost of the defendant. In any event, there was no consensus-ad-idem between the parties regarding the terms, conditions and stipulations of the said agreement, no/any agreement concluded or any agreement signed by the parties in respect of the said film. The changes made by the plaintiff in their without-prejudice draft of the agreement and sent to the defendant, vide their e.mail, dated 09.08.2018 were not accepted by the defendant. Having regard to the facts and circumstances as set out by the defendant in the written statement, the impugned film was ultimately certified by the CBFC for theatrical release on 28.09.2018, the plaintiff could not, under any circumstances, release the said film on 17.08.2018 or 22.08.2018 and all the allegations to the contrary by the plaintiff, are to their knowledge utterly false Page No.42/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 apart, from being immaterial, irrelevant and inconsequential and that it is apparent that the plaintiff being aware of the facts, has recklessly and based on extraneous consideration, made false and absurd allegations against the defendant.
(xxxvi) It is denied that the plaintiff was shocked at the defendant's attempts to re-work the agreement in the 11th hour of the movie's slated release and wrote back to the defendant, calling them out on their exceedingly un- professional behaviour and that the plaintiff stated in an e.mail also, dated 12.08.2018 that the defendant had turned down other opportunities with other companies in order to partner with the defendant, assuming that a Company of the defendant's stature would not be capable of the kind of egregious conduct and what was truly shocking was that the defendant cited wholly irrelevant reasons for why they wanted to re-negotiate the agreement between the parties and the defendant stated that due to the floods, they would have to re-negotiate agreed terms putting the plaintiff in a precarious position, when the defendant ought to have supported the plaintiff at the time of such crisis and in addition, both the parties had acted in furtherance of the understanding between them, making it legally tenable that the defendant compensates the plaintiff for unilateral rescission of the understanding as alleged. These allegations to the knowledge of the plaintiff, are false and contrary to the documents and materials Page No.43/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 on record, which conclusively establish that there was no consensus or unanimity between the parties regarding the terms and conditions of the said agreement and the essential terms thereof, nor any agreement signed between the parties in respect thereof. Hence, the question of re-working the agreement or acting in furtherance of the understanding or unilaterally rescinding the understanding of the parties or the defendant compensating the plaintiff, does not arise or warrant at all, and all the allegations to the contrary by the plaintiff, illegal, bereft of and devoid of any basis, merit or substance.
(xxxvii) It is denied further that shortly after the e.mails were exchanged, it becomes apparent that the defendant would no longer honour the agreement between the parties and the plaintiff, through their counsel, sent the defendant a cease and desist letter, dated 25.08.2018 and its copyrighted videos relating to the trailers and music videos of the said film, were still available on the defendant's web-site, much after the agreement between the parties had been unilaterally called-off by the defendant and the promotional material for the said film, continued to be available on the defendant's web-site even after the receipt of the cease and desist notice issued by the plaintiff, wherein, the plaintiff requested for a monetary sum amounting to Rs.5,00,00,000/- as damages for the exploitation thus far of the digital, audio and air.borne rights of the said film, as well as Rs.2,00,00,000/- for the amounts spent on marketing the movie Page No.44/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 under the defendant's banner "Eros" as alleged. The promotional materials of the said film was given by the plaintiff at their own risk and volition and that the defendant, at no point of time, dealt with or exploited the digital and air.borne rights of the said film. Hence, the allegations on that score, according to the defendant, are per-se absurd, baseless, unfounded and to the knowledge of the plaintiff false and concocted.
(xxxviii) It is further denied that there was any consensus-ad-idem between the parties with respect to the theatrical distribution rights and digital, audio and air.borne rights of the said film, and the defendant had not answered why the promotional material, trailers and music videos appeared on the defendant's website in the first place and that the plaintiff's copyrighted content appeared on the defendant's website only because there was an agreement to that effect and that the defendant had profited-off the plaintiff's copyrighted content, while not paying the plaintiff a single rupee from the proceeds. Further, it is well settled position that such trailers and music videos generate money through well-placed ads that appear before the video start and that the internet traffic with respect to the plaintiff's content on the defendant's YouTube channel only entices other entities to advertise their wares or services on the defendant's channel and that the defendant's involvement in the said film/impugned film, had also generated significant buzz and the defendant had undoubtedly reaped the Page No.45/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 benefits of such extensive publicity as alleged. The defendant reiterates what is stated herein. As stated herein, there was no consensus between the parties regarding the terms, conditions and stipulations of the agreement, nor agreement was signed between the parties in respect of the said film. The circumstances under which the audio content of the said film was uploaded on YouTube channel, has been clearly stated here-in-above. On the contrary, the plaintiff is liable to pay, indemnify, compensate and reimburse the defendant for all the services rendered lawfully by the defendant by uploading the promotional content of the said film on ErosNow platform, consequent to which the substantial benefits accrued thereto to the plaintiff and the said film, was a commercial success.
(xxxix) The defendant, in its detailed reply, dated 21.09.2018, made several ludicrous statements, one of them being that the defendant was unaware of any of the films that the plaintiff had produced and that the said statement, was directly controverted by the fact that the defendant was the one to approach the plaintiff in the hope of a partnership that would enlarge the defendant's presence in the Malayalam film industry. It was even more shocking to the conscience of the plaintiff that the defendant chose to make such a truly tragic natural disaster the reason for its egregious conduct and by blaming the flood ravaged State of Kerala for the reason, as the withdrawal and inexplicably linking Page No.46/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 the same to a movie that did poorly nation-wide, the defendant was trying to strong-arm the plaintiff into submitting to an unconscionable contract with the defendant and the defendant reneged on the agreed upon consideration and instead, offered the plaintiff a measly sum of Rs.25,00,000/- for the music, audio and audio visual rights of the said film/impugned film, after both parties had already acted in furtherance of the original understanding and that the plaintiff had to incur several subsequent expenses in re-working the existing music videos, trailers and promotional material so as to delete the defendant's banner "EROS" on them and that the defendant registered the same as the copyright holder of the music videos, trailers, promotional materials, pertaining to the film in YouTube which had, in turn, prejudiced the opportunities for the plaintiff to monetize its contents as alleged.
(xl) The allegations are utterly false and not warranted by the documents and materials on record. The plaintiff by e.mail, dated 12.08.2018 to the defendant alleged that Malayalam Manorama, had offered Rs.25,00,000/- for the music, audio and audio-visual rights of the said film. Therefore, based on the alleged offer of Malayalam Manorama, the defendant, like-wise offered a sum of Rs.25,00,000/- for the music, audio and audio-visual rights of the said film to the plaintiff who declined to accept the same. Despite the same, the plaintiff has the gumption to allege that the defendant had offered a "measly" sum of Page No.47/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 Rs.25,00,000/- for the music, audio and audio-visual rights of the said film. Even though the plaintiff was aware that no agreement was signed in respect of the said film, the plaintiff with impunity continued to illegally use the logo and banner of Eros the defendant on all advertising, publicity and marketing materials of the said film and reaped substantial benefits - pecuniary and otherwise there-from. The plaintiff is liable to compensate the defendant and estopped from urging and contending otherwise. On the plaintiff's own showing, the censor certificate of the said film issued by the CBFC, was dated 17.08.2018 with the plaintiff there-after, making application under Rule 33 of the Cinematograph (Certification) Rules, 1983 for alterations in the certified film with the CBFC. The record shows that excisions and modifications to the certified film, were carried out by the plaintiff in the Reels - A: 1,2,3,4,6,7 and 8 thereof with the examining committee of the CBFC, approving it on 26.09.2018, vide Rule 33 of the Cinematograph (Certification) Rules, 1983 and the certificate for unrestricted public exhibition for theatrical release finally given by the CBFC to the impugned film on 28.09.2018. The impugned film therefore could not under any circumstances be released on 17.08.2018 or 22.08.2018 and all the allegations of the plaintiff to the contrary, are manifestly and patently false and absurd and otherwise immaterial, inconsequential and irrelevant.
(xli) The defendant deny that the defendant had indulged in behaviour Page No.48/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 amounting to infringement of the copyright subsisting in the plaintiff's music videos, trailers and promotional posters for the said film. Since the said film was produced by the plaintiff, according to the Copyright Act, the plaintiff would be the first owner of the said film and any derivative works thereof and the trailers, music videos and promotional material, were all made available on the defendant's website, with the understanding that the plaintiff would be duly compensated in the light of the agreement between the parties and that the defendant unilaterally decided to withdraw from the arrangement between the parties, amounting to use of the plaintiff's videos on the defendant's web-site to unauthorised use, especially, since the plaintiff never saw a single Rupee for exploitation of the videos, trailers or promotional material and denies that the plaintiff had every right to be compensated by the defendant for such unauthorised use of its copyrighted works as alleged. The parties were , from the inception and outset, merely carrying out the without-prejudice correspondence an negotiations of the said agreement and there was no consensus-ad-idem between the parties, qua, the terms, conditions and stipulations thereof. There being no concluded and signed contract, the question of any non-performance of the contract or failure to discharge any obligations by the defendant or the defendant infringing the Copyright of the impugned film, or committing any acts of passing-off in respect thereof, does not arise or warrant at all. The claim of Page No.49/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 compensation by the plaintiff, is utterly absurd, illegal, false, farcical, misconceived, preposterous and based on extraneous and collateral considerations, more so, when the plaintiff, on their own showing has not sustained any losses whatsoever, and instead, te plaintiff, on their own showing, collected and garnered whooping Revenue of Rs.100 crores from exploitation of the rights of the film. Thus, the defendant is not liable to pay any compensation to the plaintiff. On the contrary, the plaintiff, having accepted the uploading by the defendant of the promotional content and music audio and audio-visuals of the songs of the said film and enjoyed the benefits there-from, are bound and liable to pay, compensate and reimburse the defendant for all the services rendered by the defendant.
(xlii) The defendant also denies that the said film had already generated sufficient buzz and Revenue and such buzz had unfairly mis-directed in the defendant's direction, free of cost and that it was solely due to the plaintiff's efforts in making sure the public knew of the parties' partnership, in the light of the agreement between them and the first push-back of the release date of the said film, was done in accordance with the defendant's suggestion, as the defendant was apprehensive of low turn-outs at the theatres, due to the heavy rains in Kerala and that inspite of the plaintiff's accommodations of such requests, the defendant had left the plaintiff in the tough position of having to Page No.50/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 find other distributors at the very last minute and had not compensated the plaintiff for use of the copyrighted content till date and the posters of the said film are available on the defendant's web-site even as on date and the defendant was able to successfully capitalize on the plaintiff's hard work by convincing the plaintiff to ignore the other third parties, when it came to the distribution rights, and to place the defendant's banner on all promotional material and provide credit for the defendant in the film, with which CBFC certificate was obtained, all the while lulling the plaintiff into the false belief that compensation would surely follow as alleged. The materials on record shows that the plaintiff distributed and released the said film to third parties and on their own showing that the said film was Box Office hit, garnering a Revenue of Rs.100 crores. Th plaintiff capitalised on the publicity of the promotional content of the said film uploaded on the ErosNow platform and YouTube channel of the defendant and derived humongous pecuniary and other benefits, which was also instrumental in the success of the film.
(xliii) The defendant also denied that the defendant committed the acts of passing-off by falsely stating to the public that the said film originates from the defendant and the defendant had not committed the acts of passing-off by falsely stating to the public that the said film originates from the defendant and the defendant had also committed the acts of copyright infringement by Page No.51/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 enacting the plaintiff to give them access to the videos, promotional material, and trailers of the said film under the false pretence that compensation would follow, and then reneging on the said agreement and the defendant subsequently backed out of compensating the plaintiff for use of its copyrighted content immediately made such "unauthorised use" and acts of deliberate and willfull infringement of the plaintiff's intellectual property rights by the defendant were thus apparent and bound to be restrained by this Court, as alleged and in any event, under the Copyright Act, any assignment or license of copyright in any work, is required to be in writing and signed by the assignor or the licensor or by his duly authorised agent and in the instant case, there is no agreement whatsoever signed and concluded by the parties with the entire plaint and the allegations therein of infringement of copyrighted work in the impugned film and passing-off, is thereof totally misconceived and untenable in law. The acts of the defendant do not constitute gross and willful infringement of the copyright of the plaintiff and there is no breach of understanding and agreement as alleged or otherwise. The materials on record indicate that, even though no agreement was signed in respect of the said film between the parties hereto, the plaintiff continued to illegally use the Logo and banner of (Eros) the defendant on all advertising, publicity and marketing materials of the said film and reaped immense benefits there-from. The plaintiff infringed the copyright and committed Page No.52/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 acts of passing-off of the rights of the defendant and liable to compensate the defendant for the same. The allegations of infringement of copyright and passing-off of the rights of the defendant and the claim of compensation by the defendant is thoroughly ill-conceived, absurd and an after-thought, made with ulterior motives and it is unsustainable in law.
(xliv) The defendant denies that they are liable for acts of passing-off, copyright infringement and gross breach of understanding and agreement and the defendant had not committed and are not continuing to commit the unlawful activities deliberately with a view to trade upon and commercialise on the exclusive rights of the plaintiff and that such wrongful and illegal activities of the defendant had already and will undoubtedly cause irreparable loss, damage, injury and great prejudice to the plaintiff and that the plaintiff had not been put to suffer considerable damage and irreparable harm, unless the defendant was restrained immediately by this Court from continuing their unlawful conduct and direct the defendant to compensate the plaintiff for the damage already caused by misusing the plaintiff's valuable intellectual property rights and the acts of the defendant ought not be encouraged by this Court and that the plaintiff is not entitled to an order of permanent injunction restraining the defendant from passing-off and infringement of copyright, damages as well as rendering the books and accounts of the defendant as alleged. The defendant further states Page No.53/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 that the allegations and claim of compensation by the plaintiff, is false, baseless, misconceived and untenable in law.
(xlv) The defendant also denies that the present suit arose in July 2018, when the plaintiff was approached by the defendant in order to partner with them in respect of the film and in August 2018, when several e.mails were exchanged between the parties with on their web-site and on 12.08.2018, when the defendant wrote to the plaintiff in an attempt to materially change the agreement between the parties and on 25.08.2018 when the plaintiff issued the defendant a cease-and-desist-notice and on 03.09.2018, when the defendant through its counsel, issued a holding reply and on 21.09.2018, when the defendant, through its counsel, issued a detailed reply as alleged. The defendant also denies that the cause of action for continuous acts of passing-off and infringement by the defendant, continued to accrue everyday de-die-in-diem, until the defendant is restrained permanently from committing the acts of passing-off and infringing the Copyright of the plaintiff as alleged. The defendant denies that the plaintiff is entitled to file the present suit before this Court against the defendant, as their web-site with the infringing content is available to viewers all over the country, including Chennai, within the jurisdiction of this Court as alleged. The cause of action in respect of passing-off and copyright infringement did not arise within the jurisdiction of this Court and that this Court Page No.54/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 has no jurisdiction to entertain, try and dispose of the entire suit. The entire negotiations between the parties, qua, the purported agreement of the impugned film, was carried out in Mumbai, where the defendant also have their Registered Office. The purported payments in respect of the said agreement was to be made in Mumbai. The purported agreement envisaged and stipulated that dispute between the parties in respect of the purported agreement be adjudicated by sole arbitrator in Mumbai within the Courts in Mumbai having exclusive jurisdiction. The suit is false, frivolous and fictitious and the plaintiff has failed to make out any case against the defendant and the suit may be dismissed.
4. Upon considering the pleadings of either side, this Court, on 24.07.2019, framed the following issues:
(i) Whether the use of the plaintiff's images, trailers, videos and other copyrighted works on the defendant's social media platforms, as well as their own web-site, constitutes copyright infringement ?
(ii) Whether the defendant committed a breach of understanding by unilaterally terminating the understanding between the parties ?
(iii) Whether the suit is bad for mis-joinder of necessary i.e. Eros Digial FZ LLC ?
Page No.55/89
https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018
(iv) Whether the plaintiff is entitled to a sum of Rs.5,00,00,000/- as liquidated damages for the defendant's wrongful and illegal activities amounting to the unauthorised use and infringement of the plaintiff's copyrighted works with respect to the movie "Kayamkulam Kochunni" ?
(v) Whether the plaintiff is entitled to a sum of Rs.2,00,00,000/- as liquidated damages for the amount the plaintiff has spent on marketing the film with the defendant's banner and expenses incurred subsequently after the defendant's breach of understanding ? And
(vi) Whether the plaintiff is entitled to the costs of the suit from the defendant ?
5. Learned counsel for the plaintiff submitted that the defendant was keen on associating themselves with the plaintiff in order to reach a larger audience in the Malayalam film industry therefore, in July 2018 and the plaintiff proposed to licence theatrical exploitation rights for the territory of India and world-wife digital, air.borne and music rights of the subject film Kayakulam Kochunni. The plaintiff and the defendant deliberated on the terms of the licence and the defendant circulated a film rights acquisition agreement, vide e.mail dated 02.08.2018, whereby the defendant would obtain the theatrical exploitation rights for a minimum guaranteed amount of Rs.17,00,00,000/- and Page No.56/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 in addition, the defendant was to pay an additional Rs.3,00,00,000/- plus GST to the plaintiff for the digital, audio and air.borne rights and while the minimum guarantee amount agreed upon in the film rights acquisition agreement remained undisputed, further discussions took place only on minor corrections in the agreement. The learned counsel for the plaintiff relied on the following extract of the defendant's text:
"4.15 PM, 8/2/2018 Girish Eros: Sudhakarji, we are internally checking / going thru and getting minor corrections in the agreement. Will sent it to you soon. Thanks."
6. Learned counsel for the plaintiff further contended that the plaintiff had turned down several opportunities towards the purchase of the very same theatrical exploitation rights and the defendant, by conduct, had exhibited their interest to exploit the film. In pursuance to the draft film rights acquisition agreement, the defendant had requested the plaintiff to allow the defendant to post certain promotional materials, i.e. music videos and trailers on the defendant's web-site, as the commercial terms had already been frozen. On the basis of the agreed terms and at the behest of the defendant, the plaintiff provided that the defendant, with the necessary promotional materials and defendant, upon obtaining the said music videos, trailers and promotional Page No.57/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 material of the subject film, uploaded the aforementioned promotional materials on their web-site, as well as their YouTube channel. The subject film was set to be released on 17.08.2018, however, the plaintiff and defendant agreed to revis the date of release to 22.08.2018. The plaintiff had credited the defendant's banner, i.e. Eros International in the film submitted before the CBFC and was granted the CBFC certificate on 17.08.2018 and these have been done in good faith by the plaintiff on the clear understanding that the parties would give effect to the film rights acquisition agreement.
7. Learned counsel for the plaintiff also submitted that on 12.08.2018, pursuant to a conversation between the plaintiff and defendant, the plaintiff issued an e.mail to the defendant, raising their concerns on the agreed terms between the parties, as the film rights acquisition agreement had not been signed by either parties. The defendant then responded to the same, vide e.mail dated 12.08.2018 stating that the revised date of release of 22.08.2018 was not acceptable to the defendant and further stated that they seek to materially change the agreed terms owing to the Kerala floods that took place in the month of August 2018, which led the defendant to believe that the subject film would not have a successful Box Office opening.
8. The learned counsel further submitted that time and again, the defendant admitted that they had chosen an unconscionable reason such as a Page No.58/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 natural calamity, i.e. Kerala Floods in August 2018 to take leverage of the situation and re-negotiate the understanding between parties to unduly benefit itself from the commercial transaction agreed upon between parties. Apart from the defendant's e.mail, dated 12.08.2018, the relevant admission from the defendant's witness deposition is extracted below:
"Q.7 : Can I take it that the floods were a material factor affecting the release of the feature film by the parties ?
A. Yes .. ..
Q.9 : Ex.P.4 e.mail dated 12.08.2018 at 3.58 p.m. is shown to the witness) As per the said e.mail is there any other reason save the floods which cost the defendant to seek resetting of the agreed commercial terms ?
A. No other reason.
9. Learned counsel for the plaintiff also submitted that it is the case of the plaintiff that up to the exchange of e.mails, dated 12.08.2018, the plaintiff and defendant had already acted in furtherance of the agreed terms, thus, making it legally tenable that the defendant compensate the plaintiff for its unilateral rescission of the said understanding. Therefore, when the defendant issued the said e.mail, dated 12.08.2018 with the mala-fide intent proposing to unilaterally modify the agreed terms between parties, the defendant committed Page No.59/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 the acts of breach of the earlier understanding on the minimum guarantee as per the film rights acquisition agreement, which was well settled between the parties.
10. Learned counsel further stated that the plaintiff had applied for and obtained CBFC certificate on 17.08.2018, based on the film crediting the defendant for its contribution as per the agreed terms, and in fact, even prior applying for the CBFC certificate, the defendant's logo and along with the tag-line 'Eros International Presents' was inserted by the plaintiff at the insistence of the defendant. However, the defendant failed to honour their obligations as agreed upon between the parties and chose to unilaterally terminate the agreed terms citing an unconscionable reason such as a natural calamity which was not only an after-thought, but subsequent to the plaintiff's submission of the subject film before CBFC. Therefore, the plaintiff was in no position to alter or amend the posters or promotional materials in relation to the subject-film, after the defendant's arbitrary and unilateral termination.
11. The learned counsel also submitted that the original invoices on record exhibiting the marketing expenses incurred by the plaintiff with the Eros Logo and tag line 'Eros International Presents' in its promotional materials as well as the original invoices exhibiting the additional marketing expenses incurred by the plaintiff, in view of deleting the references to the defendant in its Page No.60/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 promotional materials. The plaintiff through the aforementioned invoices had proven its claim seeking Rs.2,00,00,000/- as liquidated damages which ought to be compensated by the defendant, owing to its acts of breach of understanding between the parties.
12. Learned counsel also stated that the irrefutable that the plaintiff being the producer of the film as seen in the CBFC certificate and is therefore, the copyright owner of the copyrighted works such as the promotional materials and songs of the subject film Kayakulam Kochunni. As evident from the e.mails, dated 01.08.2018 and 02.08.2018, the defendant at its own request, sought the approval of the plaintiff to include its logo and the tag-lines 'in association with Eros International' and 'An Eros International release' to show case the promotional materials in respect of the subject-film on the basis of the agreed terms in the Film Rights Acquisition Agreement. Therefore, any unauthorised reproduction of the plaintiff's copyrighted promotional materials without making payment of the consideration in accordance with the Film Rights Acquisition Agreement amounts to infringement of the plaintiff's copyright.
13. Learned counsel for the plaintiff further contended that it is the defendant's admitted case that they had uploaded the songs 'Krishnamizhikal', 'Kalari Adavum', 'Thjanajana Naadam' and 'Naadu Vaazhuka' on Eros Now platform on 08.10.2018 and 25.10.2018, which was then retracted on Page No.61/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 31.10.2018 and on 05.11.2018 respectively. The songs retracted on 05.11.2018 were subsequent to the interim order of this Court, dated 01.11.2018 in O.A.Nos.986 and 987 of 2018 in C.S.No.687 of 2018, restraining the defendant from retaining the plaintiff's copyrighted materials on its YouTube platform. Additionally, it is evident from the screen-shots of the defendant's web-site that they had retained the promotional materials, i.e. the copyright of the plaintiff until the aforementioned interim order, dated 01.11.2018. Thereafter, the defendant filed their counter affidavit stating that they have deactivated the said songs from the defendant's web-site. Inspite of the same, it is indisputable that the defendant has virtually exploited rights in the subject-film without paying a single Rupee towards consideration as per the agreed terms. Hence, the defendant's us of the plaintiff's copyrighted works undoubtedly amounts to copyright infringement and passing-off. In the light of the acts of the defendant amounting to infringement of the plaintiff's copyright and passing-off, the plaintiff ought to be entitled to damages to the tune of Rs.5,00,00,000/- as prayed for.
14. Further, according to the learned counsel for the plaintiff, the plaintiff had not made Eros Digital FZ LLC as a party to the present dispute as the plaintiff had negotiated and agreed upon terms only with the defendant herein. In fact, it is evident from the defendant's texts that they had categorically Page No.62/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 requested the plaintiff to incorporate 'Eros International' banner and the plaintiff has not been privy to any other arrangement with Eros Digital FZ LLC. A 'necessary party' is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by this Court. This is not the case on hand and since in furtherance of the interim order, dated 01.11.2018, the plaintiff's promotional materials on the defendant's web-site as well as the plaintiff's copyrighted songs on the defendant's YouTube channel, have been retracted at the behest of the defendant herein. Therefore, in view of the reliefs sought and in particular, the permanent injunction restraining the defendant from any unauthorised use of the plaintiff's copyrights, Eros Digital FZ LLC is not a necessary party to the suit.
15. The learned counsel further submitted that the defendant has failed to make out a case as to why Eros Digital FZ LLC ought to be construed as a necessary party and further, it is not the case of the defendant that they have not acted upon the agreed terms based on the draft film rights acquisition agreement between the defendant and plaintiff. Learned counsel for the plaintiff relied on a decision of the Supreme Court in the case of Kanaklata Das Vs. Naba Kumar Das, reported in 2018 (2) SCC 352, and contended that the plaintiff cannot be compelled to make any third persons a party to the suit against the plaintiff's wishes, unless such third person is able to prove that they are Page No.63/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 necessary party to the suit and without their presence, the suit cannot proceed, nor can it be decided effectively.
16. Learned counsel further submitted that the defendant failed to make out any tenable defence and the plaintiff is legally entitled to the reliefs as sought for in the plaint. The defendant unilaterally terminated the agreed terms between the parties, despite acting upon the very same terms. The defendant attempted to unjustly enriched itself by riding on the reputation and goodwill garnered by the plaintiff in the Malayalam film industry. Therefore, the plaintiff is entitled to seek costs of the suit from the defendant from the date of instituting the suit in 2018 up-to-date and also the other costs.
17. Learned counsel for the plaintiff further argued that the defendant ought not to approbate and reprobate on the validity of the Film Rights Acquisition Agreement. The contention of the defendant that this Court lacks jurisdiction, in view of Clause (ii) of the said draft Film Rights Acquisition Agreement. The defendant submitted that the said Film Rights Acquisition Agreement does not constitute a valid, binding and subsisting contract between the parties. The defendant admitted via text message dated 02.08.2018 about the terms of the Film Rights Acquisition Agreement is agreed between parties, however, the same is only subject to minor corrections. While the defendant's witness admitted that they were of the opinion that the present dispute should Page No.64/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 be arbitrated, thereby, wholly confirming that there were materially binding terms between the parties, the defendant has not taken action under Section 8 or issued any notice under Section 21 of the Arbitration and Conciliation Act and such defence is obviously estopped and would in fact read in the plaintiff's favour as to the binding nature of the understanding, which is truly the dispute herein.
18. Learned counsel also submitted that the plaintiff is the sole and absolute owner of the copyright of the subject-film. As evident from the texts and e.mail exchanges between the plaintiff and the defendant, the plaintiff is irrefutably the sole and exclusive copyright owner of the subject-film and has adhered to the agreed terms by providing the defendant with the promotional materials of the subject-film. Further, the defendant breached the terms of the understanding between the parties and failed to honour its obligations. Hence, for the above reasons, the learned counsel for the plaintiff prayed for passing a decree as prayed for in this suit.
19. Learned counsel for the defendant submitted that without- prejudice to the submissions and contention of the defendant, there was no valid, binding and subsisting contract between the plaintiff and the defendant and even assuming without admitting, the draft agreement (Ex.D-2) is the contract between the parties and hence, the present suit may be dismissed for want of jurisdiction. The draft agreement between the parties under Clause (ii) Page No.65/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 states that the Courts in Mumbai will have exclusive jurisdiction and despite the plaintiff's pleadings of the alleged draft agreement at Ex.D-2 constitutes valid and subsisting agreement and the plaintiff acted contrary to the agreement as alleged between the parties.
20. Learned counsel for the defendant further argued that the suit is bad for non-joinder of necessary parties, i.e. Eros Digital FZ LLC and Divo TV Private Limited (Divo) and the music audio of three songs, viz., Krishnamizhikal, Kalari Adavum and Thjanajana Naadam of the film, was uploaded on 08.10.2018 and one song, viz., Naadu Vaazhuka was uploaded on 25.10.2018 on Eros Now Platform by Eros Digital FZ LLC, a separate entity incorporated in accordance with law of United Arab Emirates (UAE) and this was done pursuant to Digital Licence Agreement, dated 07.07.2015 and Addendum thereto, dated 31.07.2017, signed by Eros Digital FZ LLC with Divo TV Private Limited (Divo), of which the plaintiff was aware.
21. The learned counsel for the defendant also stated that the work and the alleged copyrighted material of the plaintiff was not published by the defendant and OTT platform ErosNow on which the alleged copyrighted material of the plaintiff was allegedly published, did not belong to the defendant. The plaintiff has failed to establish the basic requirements of establishing an infringement of copyright. The plaintiff failed to identify the class of the work and Page No.66/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 the copyrighted material of the plaintiff, which the plaintiff claims to have been unauthorisedly used by the defendant. The evidence led by the plaintiff does not identify the work and the copyrighted material. The plaintiff was required to plead and prove the infringement of copyright by the defendants.
22. It is also contended by the learned counsel for the defendant that the defendant's witness Mr.Kamtam Anand Shankar (DW.1) filed a detailed affidavit in lieu of examination in chief. There is no effective cross-examination of DW1. In fact, the testimony of DW1 is completely unchallenged. Consequently, the statement of DW1 is deemed to be accepted by the plaintiff and established and proved by the defendant. On this ground also, the suit may be dismissed.
23. Consequent to the without-prejudice negotiations between the parties (Ex.P-4), without prejudice of film rights acquisition agreement was prepared by the defendant and the same was sent to the plaintiff for their consideration on 02.08.2018 by without-prejudice e.mail. The draft agreement stipulated the release date of the film to be 15.08.2018 and in case the release date of the said film for whatever reasons postponed and the film was not released on 15.08.2018, then the M.G. amount would be reduced from Rs.15 crores to Rs.10 crores with the defendant also having a right to terminate the agreement, whereupon the plaintiff was enjoined to refund to the defendant all monies paid by the defendant to the plaintiff and till then, the defendant would Page No.67/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 have a paramount and charge on the said film and all its materials. P.W.1 had also confirmed that the parties were negotiating the transaction on the basis that the said film would be released on 17.08.2018 and thus, the release date of 15.08.2018 or week-end of 15.08.2018 was sine-qua-non.
24. In furtherance to his submissions, learned counsel for the defendant stated that the plaintiff and defendant failed to agree with regard to the material terms of the agreement. P.W.1 has accepted that the terms (period) of rights is a material term. Further, the plaintiff failed to secure censor certificate from CBFC on or before 12.08.2018, i.e. the date of delivery of the materials.
25. Adding to his submissions, learned counsel for the defendant submitted that the plaintiff has failed to prove the quantum of the damages of Rs.5 crores towards the alleged wrongful and illegal activities amounting to unauthorised dues and infringement of the plaintiff's copyrighted work with respect to the said film. The claim for Rs.5 crores is highly exaggerated and excessive. P.W.1 has confirmed that entire digital rights were fetching mere sum of Rs.25 lakhs. Admittedly, the material provided by the plaintiff to the defendant was the promotional material and not the complete sound-track or audio visual transaction. The purpose of the copyrighted material handed over by the plaintiff to the defendant was to promote the said film and not for the commercial Page No.68/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 exploitation of the said film. The promotion of the said film done by the defendant enured to the benefit of the plaintiff.
26. In furtherance of his submissions, learned counsel for the defendant stated that the plaintiff has failed to plead as proved about the basis of its competition for its claim for damages of Rs.5 crores. The claim for damages is ex-facie excessive, as the plaintiff itself was willing to license the entire digital rights of the said film for a sum of Rs.25 lakhs to an entity named Malayalam Manorama. That being so, for mere exploitation of promotional material, the alleged damages of Rs.5 crores is completely baseless.
27. It is also stated by the learned counsel for the defendant that the plaintiff failed to establish the claim of Rs.2 crores towards the amount spent on marketing the said film with the defendant's panel. The invoices produced by the plaintiff at Ex.P-6 indicate that the invoices pertain to a company, namely Shree Gokulam Chits and Finance Co. Limited, and not to the plaintiff. The invoices are GST invoices and consequently, the plaintiff has privity with the transaction covered by the alleged invoices at Ex.P-6. Further, there is no evidence to show that the plaintiff spent Rs.2 crores towards publicity material of the plaintiff's banner. However, the plaintiff's banner printed on the publicity material for the said film, was mere peripheral to the publicity material. The publicity material, even though contained the plaintiff's name, ultimately, it promoted the said film. Page No.69/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 Due to delay in the release of the film and also unprecedented floods in Kerala in August 2018, the plaintiff was liable to print the additional publicity material. Consequently, the plaintiff is not entitle to any amount, much less the amount of Rs.2 crores from the defendant.
28. The plaintiff failed to disclose the agreement between the plaintiff and Divo TV. Admittedly, the witness of the plaintiff (CW.1) deposed that there was some agreement between the plaintiff and Divo TV with respect to the said film. Resultantly, adverse inference is required to drawn against the plaintiff and the suit is liable to be dismissed for suppression of the material facts by the plaintiff. On these submissions, the learned counsel for the defendant prayed to dismiss the present suit.
29. Heard both sides and perused the materials available on record
30. The specific case of the plaintiff is that they are leading Malayalam film production and distribution entity, based in Chennai. The plaintiff was formed under the leadership and direction of Mr.Gokulam Gopalan, a renowned and respected producer in the Malayalam film fraternity. The plaintiff-firm has produced several successful Malayalam movies. The plaintiff has established that they are the key player in the movie industry. The defendant is also a film production Company, named Eros International Media Limited, established in Mumbai in the year 1994. Around August 2017, the plaintiff started producing a Page No.70/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 Malayalam movie tiled "Kayamkulam Kochunni", which is a period film directed by Rosshan Andrews and written by the iconic duo Bobby and Sanjay. The plot of the movie revolves around the life of Kayamkulam Kochunni, a famed highwayman who robbed from the rich and gave to the poor during the British Raj in the early 19th century in Central Travancore. The movie has since been released on 11.10.2018 and has also received critical acclaim. In July 2018, the defendant approached the plaintiff with an intention of distributing the film "Kayamkulam Kochunni" and as the defendant had a negligible presence in the Malayalam film fraternity. They undoubtedly believed that it would be prudent to partner with the plaintiff, so as to increase their market share in the Malayalam film industry. After initial negotiations between the plaintiff and the defendant, a contract was circulated by the defendant, whereby the defendant would obtain theatrical exploitation rights for a minimum guaranteed amount of Rs.17 crores, plus GST. In addition, the defendant was to pay an additional amount of Rs.3 crores, plus GST, to the plaintiff for the digital, audio and air-borne rights. There was conversation and negotiation between the plaintiff's representative and the defendant's representative through text messages and the parties have exchanged several e.mails with respect to the finer details of the agreement and they were in consensus with respect to the compensation relating to the theatrical exploitation rights along with the digital, audio and air-borne rights. Page No.71/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 e.mails were exchanged between the plaintiff and the defendant. In pursuance of the said agreement, and to get a head start on promoting the film, the defendant requested the plaintiff to allow for certain music videos and trailers to be posted on the defendant's website. The plaintiff duly obliged keeping in mind the payments that would be undoubtedly due as per the agreement between the parties regarding the exploitation of the digital, audio and air-borne rights. Due to high-profile nature of the movie, the videos collectively garnered millions of views and the viewers were eagerly awaiting the release of the movie "Kayamkulam Kochunni". In addition to allowing the defendant to post the videos on their website, the plaintiff also accommodated the defendant's request to place their banner "EROS" on all the trailers and promotional materials for the impugned film, as well as inside the film that was submitted before the Central Bureau of Film Certification (CBFC) certificate. The plaintiff's efforts to ensure that the public knew of the defendant's involvement in the movie, helped the defendant market themselves better as an esteemed production house in the Malayalam film industry. The concerted efforts of the plaintiff in ensuring that the public knew of the defendant's involvement in the impugned movie, came on the heels of repeated requests by the defendant to do so. The parties had agreed to a release date being 17.08.2018. However, since there were some delay owing to the floods in Kerala, the defendant requested for release date to be pushed Page No.72/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 back by a week or so, which is common in the industry, thereby making 22.08.2018 being the revised date for release of the film.
31. On 12.08.2018, the plaintiff received an e.mail from the defendant's President of Business Development, wherein Mr.Ahuja stated that the revised release date 22.08.2018 was suddenly not acceptable to the defendant. The e.mail also stated that the Kerala floods that took place during the month of August, led the defendant to believe that the movie would not have a successful box office opening and thus, the defendant looked to re-work the existing agreement between the parties. 10 days before the pushed back release date, the defendant sought to severely under-cut the consideration payable to the plaintiff under the theatrical distribution rights, agreement and the agreement to exploit the digital, audio and air-borne rights. The defendant proposed that, instead of Rs.17 crores that was originally agreed upon, the minimum guarantee would have to be re-worked and brought down further. The second option was for the defendant to pay the consideration on a distribution basis, thereby absolving the defendant of any losses whatsoever and haggling the compensation down to an unquantifiable number. The third option was for the defendant to back out of the theatrical distribution agreement entirely and to only continue with the digital, audio and air-borne rights, which would undoubtedly put the plaintiff to several loss and hardship. Page No.73/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018
32. The plaintiff was shocked at the defendant's attempts to re-work on the agreement in the 11th hour of the movie's slated release, wrote back to the defendant calling them out on their exceedingly unprofessional behaviour. The plaintiff in the e.mail dated 12.08.2018, stated that they had turned down the other opportunities with the other companies in order to partner with the defendant, assuming that a company of the defendant's stature would not be capable of the kind of egregious conduct. The defendant stated that due to the floods in Kerala, they would have to re-negotiate agreed terms, putting the plaintiff in a precarious position, when the defendant ought to have supported the plaintiff at the time of such crisis. The plaintiff, through their counsel, sent a cease and desist letter, dated 25.08.2018, in which the plaintiff stated that their copyrighted videos relating to the trailers and music videos of the said movie, were still available on the defendant's website, much after the agreement between the parties had been unilaterally called-off by the defendant. The promotional material for the movie continued to be available on the defendant's website even after receipt of the said cease and desist notice issued by the plaintiff, in which the plaintiff also requested for monetary sum of Rs.5 crores as damages for the exploitation of the digital, audio and air-borne rights of the movie as well as Rs.2 crores for the amount spent on marketing the movie under the defendant's banner EROS. In response to the cease and desist notice, the Page No.74/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 defendant, through their counsel, issued a holding reply dated 03.09.2018 and subsequently they have filed the present suit for the reliefs stated supra.
33. The case of the defendant is that they are a leading global production and distribution company in the Indian film entertainment industry and is a pioneer and innovator in the Indian film entertainment for over the past 39 years. In the end of July 2018, a representative of the plaintiffs approached the defendant and informed that the plaintiffs were producing the impugned Malayalam film and the plaintiffs were interested to associate themselves with the defendants due to extensive net-work and expertise of the defendants in distribution and exhibition inter-alia of the cinematograph film as well as the defendants in the past few years, was releasing the big budget films in Kerala and Tamil Nadu. The plaintiffs proposed a licence of the theatrical rights for the territory of India and worldwide digital, air-borne and music rights of the film to the defendants on sole and exclusive basis. As the said film revolved on the event in the British Raj and the said film would be ready for release around 15.08.2018. Apart from the fact that 15.08.2018 was the Independence Day, the Onam festival was also around 15.08.2018 and as the period around 15.08.2018 was holiday and festive season, that period was the extremely favourable period for release of a Malayalam film. If the said film were to be released on 15.08.2018, it was bound to get a good opening and would impact positively on Page No.75/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 the Box Office collection of the film. The parties also agreed that the defendants may be interested in releasing the film during Independence Day week to take advantage of the Onam festival and Independence Day holidays. Therefore, the film was proposed to be released during the Independence Day and Onam festival holidays and the representative of the defendants informed the representative of the plaintiffs, and agreed that the above period of release of the film, was favourable for release of the Malayalam film at the festival season holidays to improve their profit. The plaintiffs were assuring that the film was ready and the plaintiffs were in a position to deliver the film around and the plaintiffs were also interested to release the film on 15.08.2018.
34. The representative of the defendants discussed with the Commercial Officer of the film with the Managing Committee which proposed the total deal value to be Rs.20 crores. Thus, the offer of Rs.20 crores was based on the premise that the film would be released on 15.08.2018 or during that week. The defendants decided to propose that the defendants would be entitled to 15% distribution commission and the overflow of the Revenues derived from the theatrical rights of the film in India, which would be shared between the plaintiffs and the defendants in the ratio of 40% and 60%, i.e. 40% by the plaintiffs and 60% by the defendants. The plaintiffs were also to exclusively bear and spend a minimum amount of Rs.2.5 crores on marketing the film. As the release date of Page No.76/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 the film, i.e. 15.08.2018 was the most key factor, it was decided to propose that the release date of the film cannot be delayed beyond the week-end of 15.08.2018 and the above offer was conveyed to the plaintiffs and the negotiation between the plaintiffs and the defendants commenced. The defendants with the Management Committee was updated by the representative of the defendant and the plaintiff was also agreeable on to some terms and conditions and there was disagreement between the parties on various important and critical terms of the proposed agreement, such as the payment terms, dubbing rights, duration of licence and territory of licence, etc.
35. Pending negotiations, the plaintiffs requested the defendants to help the plaintiffs in promotion of the film on digital platforms ErosNow platform and YouTube channel of Eros. Eros Now platform and YouTube channel were owned by the defendants' group company Eros Digital FZ LLC. At the request of the defendants Eros Digital FZ LLC agreed to upload the promotional material of the said film. The plaintiffs provided the defendants with the music videos and the trailers of the film, with a request to upload the music videos and the trailers of the film. The defendants, in anticipation of reaching an agreement at its own cost, conducted publicity of the film on Eros Now Platform and YouTube channel of Eros. Due to uploading of the promotional materials of the film, Eros now Platform and YouTube channel by the defendants, the film generated a news and Page No.77/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 buzz and the film was immensely benefited by the promotion conducted by the defendant. There was negotiations between the plaintiffs and defendants and also through e-mail, message etc. In case the release date of the film, i.e. 15.08.2018, for whatever reasons was postponed and the film was not released on 15.08.2018, then the M.G. amount would be reduced from Rs.15 crores to Rs.10 crores, with the defendants also having a right to terminate the agreement, whereupon the plaintiffs were enjoined to refund the defendants all monies paid by the defendants to the plaintiffs and till then, the defendants would have a paramount charge on the film and all its materials. The agreement shall, in all respects, be governed by and construed in all respects in accordance with the laws of India, and the parties agreed to submit to the exclusive jurisdiction of the Courts in Mumbai in connection with any dispute arising out of or in connection with the agreement.
36. Further, by e-mail dated 05.08.2018, the representative of the plaintiffs, sent to the defendants, a revised draft of the said agreement to Mr.Kumar Ahuja and the defendant's colleague Mr.Girish Kumar, with extensive changes, modifications and variations in respect thereof, restricting the agreement to Malayalam film and all references to the dubbed versions of the said film in Tamil and Telugu languages, were deleted and excluded. After deliberation and discussion, the terms have been reduced with regard to the Page No.78/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 theatrical rights from ten years to one year, which was not acceptable to the defendants. The other changes made by the plaintiffs to the draft agreement, were not acceptable to the defendants. The draft proposed by the plaintiffs, in their e-mail, dated 05.08.2018, was also not acceptable. By e-mail, dated 07.08.2018, it was informed that the representative of the plaintiffs, had suggested some points and the same was not acceptable to the defendants. After lots of discussion and deliberations, inter-se, with the Management Committee of the defendants, several changes were made to the draft proposed by the plaintiffs. Revised draft agreement was sent to the defendants by the plaintiff. Since the release date of the movie was postponed due to the floods, by e-mail dated 09.08.2018, the plaintiffs made extensive changes to the draft of the said agreement, dated 08.08.2018 and since the revised draft thereof with the changes, deletions including comments by their Advocate seeking their confirmations and instructions on several clauses, the parties had not reached consensus on key terms of the agreement. The changes suggested by one Mr.Sudhakar, were not accepted by the defendants The plaintiffs and the defendants were not able to agree on key terms and conditions.
37. By e-mail dated 10.08.2018, defendants' men under instructions, set out the changes in the draft agreement sent by the plaintiff on 09.08.2018 and the other changes therein would be dealt with by the Legal Department. Page No.79/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 There were major and serious disagreement and differences between the parties. The plaintiffs were trying to change the most basic terms and conditions, which were not acceptable to the defendants. On 11.08.2018, the plaintiff informed the defendants that the film would not be ready for the release on 15.08.2018. As the plaintiffs were not in a position to deliver the film by 12.08.2018, the defendants decided to withdraw from "without prejudice"
negotiation and the same was informed to the plaintiffs.
38. On 12.08.2018, the plaintiffs falsely alleged that the way in which the negotiations were progressing, was very unprofessional. In view of the inability of the parties to agree on the terms of the agreement and inability of the plaintiffs to complete the said film for delivery for release in the week of 15.08.2018, the issue was discussed by the management of the defendants.
39. In the said circumstances, the defendants decided to propose three options to the plaintiffs. The first option was the MG for Theatrical rights to be reduced and the digital/air-borne/music remains the same. The second option is that the theatrical release of the film by the defendants on distribution commission basis and the digital/air-bone/music deal on the earlier terms. The third option was the defendant only acquired digital/air-borne/music rights on terms to be discussed. Accordingly, the men of the defendants, sent their e-mail, dated 12.08.2018 to the men of the plaintiffs recording that as there was no way for release of the said film on 17.08.2018, having regard to the scenario and lack Page No.80/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 of censor certificate, proposed three options. There was further e-mail communication, dated 12.08.2018, and 17.08.2018 between the parties. The theatrical release date of the film was changed/postponed from 15.08.2018 to 17.08.2018 at the request of the plaintiffs on the ground that the film was not yet censored by the CBFC and therefore, the plaintiffs could not deliver the film within the stipulated time for theatrical release on 15.08.2018 / 17.08.2018. As the plaintiff was unable to deliver the film due to lack of censor certification, the plaintiffs proposed the release date of the film to 22.08.2018 in the event the parties are able to reach agreement on the commercials.
40. Further, on 29.08.2018, the defendants received notice dated 25.08.2018 of the counsel for the plaintiffs making false allegations against the defendants, which were contrary to their own documents. The plaintiffs also sent interim reply dated 03.09.2018 and detailed reply dated 21.09.2018, denying the allegations levelled in the notice. The plaintiffs had licensed music audio of the film and the songs thereof, to Divo TV private Limited and by agreement, dated 07.07.2015 between the plaintiffs and Eros Digital FZ LLC (Eros digital), being a company from the EROS Group, which was licensed and permitted to exploit the music audio rights acquired by Divo in terms of the agreement, dated 07.07.2015, which was extended upto 31.07.2019 by the first addendum to the license agreement, dated 07.07.2015.
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41. By e-mail, dated 24.10.2018, Divo Operation team addressed the contents team for Eros Digital owner of platform Eros Now to release four songs from the film and the Divo also sent the URL address "Master-https://we.tl/l- alGjUq5SCv", pursuant to which the four songs were uploaded. Further, by e- mail, dated 05.11.2018, in response to the e-mail of the Eros Digital to confirm the rights of the music of the film, Divo confirmed stating, 'confirming the rights for the Soundtrack is with the said Divo and can be reinstated on plaintiffs' end. The promotional content of 4 songs on Eros Now platform was well within their rights and did not commit any act of passing-off or infringing the rights in the film as alleged. Further, pursuant to acquisition of the music audio of said 4 songs of the film, there was no infringement of any rights in the film and therefore, the question of rendering account of profits to the plaintiffs or to pay any damages for unauthorised use and infringement of the film or competition for marketing the said film to the plaintiffs, does not arise.
42. Issue No.1 : Admittedly, there was a film rights acquisition agreement between the parties regarding the film. Though initially, the film was slated to be released on 15.08.2018 and due to unexpected floods, the film could not be released, which had resulted in disagreement between the parties, and there were exchange of communications, all of which had not been denied by the parties. Since the movie could not be released as agreed and proposed Page No.82/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 between the parties, there was changes during August 2018. Admittedly, there were floods in the State of Kerala. It is not in dispute that due to the floods, the film could not be released as proposed on 15.08.2018. Further, it is not disputed that there were communications between the parties. It is admitted that the floods were the material factor affecting the release of the feature film by the parties. Further, it is not in dispute that no other reason except the floods being the delay in release of the film either on 15.08.2018 or even on 17.08.2018. Therefore, admittedly, the agreement was only for release of the movie during the relevant period of 15.08.2018. Admittedly, the movie could not be released on the said date 15.08.2018 due to unforeseen circumstances.
43. Furthermore, P.W.1 admitted that the entire digital right were fetched for a mere sum of Rs.25 lakhs and admittedly, the material provided by the plaintiff to the defendant, was the promotional material and not the complete sound-track or audio visual transaction. The purpose of the copyrighted material handed over by the plaintiff to the defendant was to promote the said film and not for commercial exploitation of the said film. The promotion of the said film done by the defendant, enured to the benefit of the plaintiff.
44. According to the plaintiff, the defendant admitted that they have uploaded the four songs on Eros-Now platform on 08.10.2018 and 25.10.2018, which were then retracted on 31.10.2018 and 05.11.2018 respectively. The Page No.83/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 songs retracted on 05.11.2018 were subsequent to the interim order of this Court, dated 01.11.2018 in O.A.Nos.986 and 987 of 2018 in C.S.No.687 of 2018, restraining the defendant from retaining the plaintiff's copyrighted materials on its YouTube platform. Additionally, it is evident from the screen-shots of the defendant's website that they had retained the promotional materials, i.e. the copyright of the plaintiff until the said order dated 01.11.2018. Thereafter, the defendant filed their counter affidavit stating that they have deactivated the songs from the defendant's website. Inspite of the same, it is indisputable that the defendant has virtually exploited the rights in the subject-film without paying a single Rupee towards consideration as per the agreed terms. Hence, the defendant's use of the plaintiff's copyrighted works undoubtedly amounts to copyright infringement and passing-off. The plaintiff is therefore entitled to damages of Rs.5,00,00,000/- as prayed for. However, it is not downloaded along with the agreement, and it is infringement. The first issue is answered accordingly.
45. In view of the above discussion, this Court finds that the defendant has not committed any breach of understanding by unilaterally terminating the understanding between the parties. Admittedly, the film could not be released as agreed by the parties in the agreement. There were changes in the agreement and they were not agreed by the parties. However, admittedly, Page No.84/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 the four songs have been uploaded. This Court does not find any breach having been committed by defendant, and there is no non-joinder of necessary party. The agreement between the plaintiff and the defendant with regard to the release of the film, could not be implemented. Admittedly, the film was not released on the particular date and only thereafter, the present suit is filed alleging infringement and also for damages.
46. As already held in the preceding paragraphs, the defendant has not infringed the copyright and therefore, the plaintiff is not entitled for even damages as sought for.
The issue Nos.(i) to (iv) are answered in the above terms.
47. As far as issue No.(v) is concerned, the plaintiff is entitled to liquidated damages for the amount the plaintiff has spent for marketing film with the defendant and the expenses incurred, subsequently, after the defendant(s) had approached the plaintiff for necessary relief and there was understanding on that score. Though the plaintiff is not entitled to Rs.2 crores under the head 'liquidated damages', from the records, it is seen that the plaintiff has spent about Rs.1 crore (and odd). Therefore, the plaintiff is entitled to only Rs.1 crore and odd. The plaintiff has not proved through enough materials that the plaintiff has spent for marketing the film with the defendant's banner.
48. Considering the facts and circumstances of the case, the plaintiff is Page No.85/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018 not entitled to costs as prayed for in the plaint.
49. There is no concluded contract between the parties. The agreement between the parties is admitted. The proposed film release date is admitted. Subsequently, the film in question could not be released on the date earlier fixed.
50. Further-more, during the relevant period, there were floods in the State of Kerala and therefore, the movie/film could not be released as desired.
51. The plaintiff is not entitled to liquidated damages, but considering the documents on record, the defendant(s) is/are liable to be compensated and the defendants are entitled to get Rs.1,19,83,800/- spent for advertisements regarding the release of the film.
52. Accordingly, the plaintiff is directed to pay Rs.1,19,83,800/- (Rupees one crore nineteen lakhs eighty three thousand and eight hundred only) spent for advertisements for release of the film, to the defendant(s).
53. Thus, the plaintiff/A.M.Gopalan, Trading as Sree Gokulam Movies, shall pay Rs.1,19,83,800/- (Rupees one crore nineteen lakhs eighty three thousand and eight hundred only) to the defendant/Eros International Media Limited, with interest @ 12% from the date of filing of the plaint till the date of payment by the defendant(s). The said amount is to be paid by the plainitaiff to the defendant, within a period of two months from the date of obtaining the certified copy of this judgment. The suit is decreed to this extent only. Page No.86/89 https://www.mhc.tn.gov.in/judis Judgment dated 24.06.2024 in C.S.No.739 of 2018
54. As far as the other reliefs prayed for in the plaint, the plaintiff is not entitled to get the same and hence, the present suit is dismissed on those other reliefs also.
55. The decisions/citations relied on by the learned counsel appearing for the parties, are distinguishable on facts and hence, the same are not applicable to the facts of the present case.
56. Considering the facts and circumstances of the case, the plaintiff is not entitled to costs as prayed for in the plaint.
24.06.2024 (1/2) cs List of witnesses examined on the side of the plaintiff:
P.W.1 Mr.Sudhakar List of exhibits marked on the side of plaintiff:
Exhibit Details
Number
P-1 Original Authorisation letter
P-2 Original General Power of Attorney
P-3 Print out of text message
P-4 Print out of e-mails
P-5 Original CBFC Certificate
Page No.87/89
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Judgment dated 24.06.2024
in C.S.No.739 of 2018
Exhibit Details
Number
P-6 Original invoice
P-7 Copy of the cease and desist notice, dated 25.08.2018
P-8 Original holding reply
P-9 Original of reply to cease and desist
P-10 Print out of the screen-shot of defendant's web-site
P-11 Original invoices
P-12 Print out of Ledger accounts
P-13 Original promotional materials
P-14 Statement of accounts of the plaintiff
List of witness marked on the side of plaintiff:
D.W.1 Mr.Kamtan Anand Shankar
List of exhibits marked on the side of defendants:
D.1 The Board Resolution, dated 20.06.2022
D.2 Print out of e.mail dated 02.08.2018
D.3 Print out of e.mail dated 08.08.2018
D.4 Print out of e.mail dated 17.08.2018
24.06.2024
(2/2)
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Judgment dated 24.06.2024
in C.S.No.739 of 2018
P. VELMURUGAN, J
cs
C.S.(Comm.Div).739 of 2018
24.06.2024
Page No.89/89
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