Madras High Court
Sri Sambu Films Represented By Its ... vs Vijaya Pictures By Its Managing Partner ... on 15 June, 1990
Equivalent citations: (1990)2MLJ405
JUDGMENT
1. The Appellants in the O.S.A. are defendants 1, 3, 5, 6 to 13 and the legal representatives of the 4th defendant in C.S. No. 126 of 1969. The suit C.S. No. 126 of 1969 is for recovery of a sum of Rs. 1,28,299-42 together with interest on the principal amount of Rs. 91,393-55 from the date of plaint till the date of decree at 12% per annum and thereafter at 6% per annum till the date of payment.
2. The case of the plaintiff in C.S. No. 126 of 1969 is as follows: The first defendant firm started production of a Motion Picture in Telugu titled as Srikakula Andhra Maha Vishnu in the beginning of the year 1965. Defendants 2 to 5 are the partners of the first defendant firm. By distribution agreement dated 16.6.1965 marked as ExP.1 in the case between the plaintiff on the one hand and the first defendant firm represented by the 2nd respondent as its Managing Partner on the other hand, the plaintiff was granted the sole and exclusive rights of distribution over the said Telugu motion Picture Srikakula Andhra Maha Vishnu for the areas comprising Srikakulam, Visakhapatnam, East Godavary, West Godavary, Krishna, Guntur, Nellore, Chittoor, Anantapur, Cuddappah, Kurnool of Andhra Pradesh and Bellary District of Mysore State, Ganjam and Korapet Districts of Orissa State and Bengal Circuit including Madhya Pradesh. The distribution Agreement Provided that (a) that the plaintiff should pay the defendants as distribution advance a sum of Rs. 3,00,000, (b) that the plaintiff should in addition to the said sum of Rs. 3,00,000 advance a further sum equivalent to the cost of release prints against the delivery of the raw film and also the cost of publicities such as newspaper publicities, banners, cut outs, etc., (c) that the defendants should deliver the release prints to the plaintiff on or before 31-3-1966, (d) the distribution period is for five years from the date of the first release of the picture; (e) that the plaintiff should reimburse itself all the amounts advanced to the defendants or spent on behalf of the defendants from the net distributor's share of the collections of the picture after deducting their distribution commission; (f) that if the plaintiff was unable to realise all the amounts advanced, amounts spent and expenses incurred by it on. behalf of the defendants on account of the picture together with the distribution commission within one year from the date of the first release of the picture in the areas reserved to it, the plaintiff is entitled to claim such unrealized amount remaining due to it under the distribution agreement, with interest, without prejudice to the plaintiff's right of distribution of the picture for the unexpired period covered by the distribution agreement. Pursuant to this distribution agreement dated 16.6.1965 the plaintiff advanced the defendants the entire amount of Rs. 3,00,000 and also advanced the amount of release prints, publicities etc. which came to Rs. 5,07,025-49 ps. The picture was released on 6-5-1966. Although more than three years and five months have elapsed from the date of release of the picture, the plaintiff was able to realise only Rs. 4,09,337-21 ps. and there is still a balance of Rs. 91,393-55 ps. being the unrealised amount and Rs. 36,903-87 ps. towards interest at 12% on the unrealised amount from the date of expiry of one year, i.e. 6.5.1966 from the date of the first release of the picture, both the amounts aggregating to Rs. 1,28,299-42 ps. and the defendants are liable to pay the said sum to the plaintiff.
3. The third defendant, one of the partners of the first defendant firm filed the written statement which was adopted by the other defendants. In the written statement, the defendants contended that the plaintiff had not given the proper statement of account and that the plaintiff had not exploited the picture in the Bengal Circuit which was also part of the area distribution given to the plaintiff and that, in any event, the plaintiff is not entitled to claim interest. On the above pleadings, the following issues have been framed by the Learned Judge:
1. Have the plaintiffs committed default of the terms of the distribution agreement, set out in paragraph 3 of the written statement and are the defendants entitled to any adjustments relating to the recovery?
2. Whether the plaintiffs have exploited the picture in full as per the terms of the agreement?
3. Whether the plaintiffs have submitted statement of accounts to the defendants and in any event whether the accounts are proper?
4. Whether the plaintiffs are entitled to claim interest?
5. Whether the suit is premature?
6. To what reliefs are the plaintiffs entitled?
The original written statement was filed in September, 1970. In March, 1972 the defendants filed additional written statement. In the additional written statement the defendants contended that the suit as framed is barred by law, by reason of the mandatory provisions contained in Order 2, Rule 2 of the Civil Procedure Code. They further contended that the plaintiff had filed an earlier suit in this Court in C.S. No. 146 of 1967 against the defendants herein for the recovery of the balance amount due on a promissory note dated 14.4.1966 executed by the defendants in favour of the plaintiff for a sum of Rs.50,000 and that the defendants have submitted to a decree in that suit. The said sum of Rs. 50,000 had been originally debited by the plaintiff against the defendants in the distribution account itself and later on the said entry was cancelled and a separate loan account for the said sum of Rs. 50,000 had been opened. The lending of Rs. 50,000 under the promissory note dated 14.4.1966 is also part of the same transaction as the one in the present suit, and the plaintiffs having failed to include the present claim in the earlier suit (C.S. No. 146 of 1967) it is barred under Order 2, Rule 2 of the Civil Procedure Code from filing the present suit. On the basis of the additional written statement, the following additional issues were framed by the learned Judge.
1. Is the preset suit barred under Order 2, Rule 2 of the Civil Procedure Code, by reason of C.S. No. 146 of 1967?
2. Is the suit maintainable by reason of non-registration under Section 69 of the Partnership Act?
3. Is the plaintiff entitled to withdraw the entry for Rs. 50,000 as had been done by the plaintiff?
4. Is there any fraud in the statement of accounts and is the account bad by reason of any irregularities?
5. Is the plaintiff entitled to recover commission after the plaintiff had filed the suit?
6. Are not the defendants entitled to counter interest for the payments received by the plaintiff on account of the defendants?
7. Are the debits of the plaintiff with reference to publicity charges correct?
8. Had not the plaintiffs properly exploited the picture and are the defendants entitled to damages on that account?
9. Are the defendants entitled to claim a set off as damages for non-exploitation?
10. Is not the plaintiff entitled to claim interest?
4. The Learned Judge after considering the entire evidence on record both oral and documentary, accepted the case of the plaintiff and granted a decree in favour of the plaintiff for a sum of Rs. 1,22,188-40 ps. with subsequent interest on the principal amount at 6% per annum from 1-8-1976 upto the date of realisation. Aggrieved by the judgment of the Learned Judge, defendants 1 and 3, and legal representatives of the 4th defendant, and defendants 5, 6 to 13 have filed the above O.S.A.
5. Mr. V.S. Subramaniam, learned Counsel for the appellants raised only two contentions in this appeal. In the first place, the learned Counsel contended that the suit is barried by the provisions contained in Order 2, Rule 2, Civil Procedure Code. He submitted that even the sum of Rs.50,000 advanced under the promissory note dated 14.4.1966 was only part of the same transaction of lending by the plaintiff. In respect of the sum due under the promissory note dated 14.4.1966 the plaintiff filed the suit C.S.No.146 of 1967. The lending of the sum of Rs.50,000 under the promissory note dated 14-4-1966 marked as Ex.P.75 in the suit is part of the same transaction as the one in the present suit and the plaintiff having failed to include the present claim in the earlier suit C.S.No.146 of 1967 the plaintiff is barred under Older 2, Rule 2, C.P.C. from filing the present suit, In support of his contention the learned Counsel relied on the decisions reported in Appasami v. Ramaswamy I.L.R. 9 Mad. 279, Kedar Nath Mitra v. Dins Bandhu Saha I.L.R. 42 Cal. 1043, Shanmugham Pillai v. Syed Gulam Ghosh I.L.R.27 Mad. 116, Muniyandi v. Muthuswami Iyer (1972) I M.L.J. 372 and Naba Kumar v. Radhashyam A.I.R. 1931 P.C. 229.
6. Let us first consider the principles to be applied in cases where the plea of a bar of suit under Order 2, Rule 2, C.P.C. is raised. Order 2, Rule 2 provides that:
Normally every suit should include the entirety of the claim which a plaintiff is entitled to make in respect of a cause of action. The plaintiff may also relinquish a portion of his claim with a view to bring the suit within the jurisdiction of the Court. But where a plaintiff omits to sue or intentionally relinquishes any portion of his claim he will be thereafter precluded from suing in respect of the portion so omitted or relinquished. Likewise, a person entitled to more than on relief with reference to a cause of action, may sue for all or any of such reliefs. But if he omits without leave of court to sue for all such reliefs, he shall not afterwards be permitted to sue for the relief so omitted.
In Arunachalam Pillai v. Velamma (1967) 2 M.L.J. 490 Natesan, J.-While dealing with the plea of bar of a suit under Order 2, Rule 2, C.P.C. has held that one and the same transaction may give rise to different causes of action and unless the relief claimed in the subsequent suit is on the same cause of action, which gave rise to the earlier suit. Order 2, Rule 2 is not attracted. The Plaintiff cannot be allowed to divide any cause of action and bring two or more suits on the same cause of action. The Privy Council in Naba Kumar v. Radhashyam A.I.R. 1931 P.C. 229 held that the Rule under Order 2, Rule 2, Code of Civil Procedure is intended to deal with the vice of splitting the cause of action. The Principle of Order 2, Rule 2, C.P.C. is enunciated by the Judicial Committee in Payana v. Rana Lana Palaniappa (1914) 41 I.A., 142 as follows:
The Rule is directed to securing the exhaustion of the relief in respect of a cause of action, and not to the inclusion in one and the same action of different cause of action, even though they arise from the same transaction.
In Sidramappa v. Rajashetty , the Supreme Court held that if the relief asked for in the subsequent suit is not one which could have been asked for in the earlier suit, there is no bar under Order 2, Rule 2, C.P.C. Considering the above decisions, the tests to be applied in cases where the plea of bar of suit under Order 2, Rule 2 is raised, are as follows:
(i) Whether the cause of action in the previous suit and the subsequent suit is identical;
(ii) Whether the relief claimed in the subsequent suit could have been given in the previous suit on the basis of the pleading made in the plaint?
(iii) Whether the plaintiff omitted to sue for a particular relief on the cause of action which has been disclosed in the previous suit?
7. Now applying the above tests, it has been seen whether the present suit, out of which the C.S.A. arose, is barred under Order 2, Rule 2, C.P.C. by reason of C.S.No. 146 of 1967. Order 2, Rule 2, C.P.C. will bar the present suit only if both the claims, namely, the claim for Rs. 3,00,000 with interest which is the subject matter of the present suit and the claim for Rs. 50,000 which is a subject matter of C.S. No. 146 of 1967 arose out of a single cause of action. The evidence in this case discloses that the claim for Rs. 50,000 which is the subject matter of O.S. 146 of 1967 does not form of part of the claim of Rs. 3,00,000 arising under Ex.P.1 which is the subject matter of the present suit, and the cause of action for both the suits referred to above are different. This is not a case where a single cause of action has given a right to two reliefs claimed in the two suits referred to above, It is an admitted fact that the plaintiff has paid the entire sum of Rs. 3,00,000 towards distribution advance as per the terms of ExP.1 which is dated 16.6.1965 and that the defendants received a sum of Rs. 50,000 from the plaintiff on 14.4.1966 by executing a promissory note, marked as ExP.75. The evidence in this case makes it clear that the parties to the suit always understood that the distribution advance under ExP.1 was only Rs. 3,00,000 and that the sum of Rs. 50,000 received from the plaintiff under the promissory note Ex.P.75 is by way of loan and that it is totally a different transaction. The contention put forth by the defendants in the additional written statement that an advance of Rs. 50,000 made by the plaintiff on 14.4.1966 under Ex.P.75 is also part of the same transaction as that in ExP.1 is clearly an after-thought taking advantage of the fact that the plaintiff without maintaining two accounts with regard to two different transactions, had wrongly debited the said sum of Rs. 50,000 also in the distribution account and at a later stage finding out the mistake, the plaintiff had opened a separate loan account in the name of the defendants and had transferred the said sum of Rs. 50,000 to the said loan account Notwithstanding the specific recital in ExP.1 that the amount to be advanced under ExP.1 is only Rs.3,00,000 the contention of the defendants that the distribution advance under Ex.P.1 was really Rs. 3,50,000 cannot be accepted, because the said contention is against not only the terms of the distribution agreement Ex.P.1, but also against the pleadings of the defendants themselves. In paragraph 4 of the plaint the relevant terms of the distribution right under Ex.P.1 are set out, and in paragraph 3 of the Original Written statement the defendants have stated that the averments contained in paragraph 4 of the plaint are substantially correct. In paragraph 3 of the original written statement it is stated that the plaintiff made a distribution advance of Rs. 3 lakhs as per the terms of the agreement entered into between the parties.
8. In Application No. 888 of 1969 filed by the defendant in the suit praying for leave to defend the present suit, in paragraph 4 of the affidavit filed in support of the said application, it is stated that the plaintiff made a payment of Rs. 3,00,000 under the distribution agreement. Application No. 2259 of 1969 is taken out by the plaintiff for attachment before judgment. The 3rd defendant has filed counter affidavit in Application No. 2259 of 1969. In paragraph 3 of the counter affidavit in A.No. 2259 of 1969 the specific case of the defendants is that the plaintiff made a payment of Rs. 3,00,000 as distribution advances. In paragraph 6 of the counter affidavit there is reference to the previous suit, C.S. No. 146 of 1967 filed by the plaintiff for the recovery of a sum of Rs. 50,000 due under the promissory note Ex.P.75. However, it has not been stated anywhere in the counter affidavit in A.No. 2259 of 1969 that the amount of Rs. 50,000 advanced against the promissory note marked as Ex.P.75, was part of the distribution advance payable under Ex.P.1 and that the payment of the said sum of Rs. 50,000 was also part of the same transaction.
9. Further in C.S. No. 146 of 1967 the plaintiff has specifically stated that the cause of action for the said suit arose on 14.4.1966 when the promissory note Ex.P.75 was executed at Madras. It is relevant to note that the distribution agreement Ex.P.1 is dated 16.6.1965, and it is very much prior to the date of the promissory note. In view of the facts and circumstances pointed out above, the contention of the learned Counsel for the appellants that the sum of Rs. 50,000 also formed part of the distribution advance, cannot be countenanced.
10. The third defendant was examined as D.W.1 in the suit. In the cross examination D.W.1 admitted that in the original written statement it is stated that the distribution advance was only Rs. 3 lakhs and that in the affidavit in A.No. 888 of 1969 and in the counter affidavit in A.No. 2259 of 1989 he has stated that the plaintiff had paid a distribution advance of only Rs. 3 lakhs and that the above statements made earlier are not correct But, in his evidence he is not able to explain how he came to make such a wrong statement in the original written statement as well as in the affidavit and counter affidavit referred to above. It must be remembered that the statements of the defendants that the distribution advance was Rs. 3,00,000 and that the plaintiff paid only Rs. 3,00,000 as such advance, are part of the pleadings in the suit and that the defendant cannot be permitted to let in evidence against their own pleadings. That apart, the plea in the additional written statement that the payment of Rs. 50,000 under Ex.P.75 was also part of the same transaction has not been substantiated by the defendants by letting in any positive evidence.
11. There is yet another important circumstance which goes to show that the present contention of the appellants is not true. The picture was released only on 6.5.1966. The plaintiff became entitled to claim repayment of the unadjusted advance under Ex.P.1 only by 6-5-1967. There is evidence in this case in the form of ExP.48, P.53 and P.54, which go to show that very much prior to 6.5.1967 the plaintiff demanded payment of the sum of Rs. 50,000 and the defendants promised to repay the same. This only indicates that the sum of Rs. 50,000 was not part of the distribution advance under Ex.P.1, but, it was a separate transaction. The defendants could not have agreed to repay the said sum of Rs. 50,000 if it was part of the distribution advance and if the said sum of Rs. 50,000 was part of the distribution advance the plaintiff cannot make claim for payment before 6.5.1967.
12. Ex.P.72 is a receipt book of the plaintiff and Ex.P.72(a) is the counterfoil of the receipt passed by the plaintiff to the defendants for a sum of Rs. 5,000. The plaintiffs case is that this of Rs. 5,000 was paid by the defendants towards the loan account covered by the promissory note, Ex.P.75, in Ex.P.75(a) it is specifically stated that the sum of Rs. 5,000 had been received towards the loan account. The defendants have not produced the original receipt given to them inspite of the plaintiff giving notice to them to produce the same into court The defendants also failed to prove their case that the said payment of Rs. 5,000 was made at Madras and that the sum of Rs. 5,000 was paid only towards the distribution account.
13. There is another circumstance which goes to disprove the case of the defendants that a cheque for Rs. 5,000 was handed over to one Poornachandra Rao at Madras towards distribution account. In C.S.No.146 of 1967 the plaintiff had made a specific averment in the plaint that a sum of Rs. 5,000 paid on 31-7-1967 was towards the promissory note debt and that the said sum of Rs. 5,000 had been appropriated towards the interest due under the promissory note Ex.P.75. In the said suit C.S. No. 146 of 1967 only after giving credit to the said sum of Rs. 5,000 the balance amount due on the promissory note had been claimed. The defendants have consented for a decree in the said suit. While so, it is not open to the defendants to contend in the present suit that the said sum of Rs. 5,000 was not paid in part satisfaction of the debt due under the promissory note Ex.P.75, but it was only towards the distribution account.
14. The Learned Counsel for the appellants placed much reliance on the fact that the plaintiff had originally debited the said sum of Rs. 50,000 against the defendants in the distribution account and the plaintiff had not made any distinction between the amount of Rs. 50,000 and the amount advanced under Ex.P.1. The evidence let in on behalf of the plaintiff goes to show that by the end of September, 1966 its auditor pointed out, the mistake in the accounting and, thereafter, the mistakes were rectified by opening separate loan account against the defendants and the said evidence adduced on behalf of the plaintiff was rightly accepted by the Learned Judge. The fact that the plaintiff has not originally opened a separate loan account, but had mistakenly debited the sum of Rs. 50,000 in the distribution account, would not in any way advance the case of the defendants, particularly, when parties always understood that the sum of Rs. 50,000 paid under the promissory note Ex.P.75 was a different transaction and not connected with the distribution agreement Ex.P.1. Another important circumstance that goes to show that the case of the defendants cannot be true is that from August, 1967 the plaintiff had been sending two statements relating to the two accounts, namely distribution account and the loan account, and, the defendants never objected to the same.
15. The evidence in this case clearly goes to prove that there was only one agreement between the parties regarding the distribution rights and that is evidence by Ex.P.1, and that, the sum of Rs. 50,000 advanced under Ex.P.75 was not part of the distribution advance and it was a separate transaction. In these circumstances, there is absolutely no merit in the contention that the present suit is barred under Order 2, Rule 2 of the Civil Procedure Code. The decisions relied on by the learned Counsel for the appellants can be distinguished on facts. The Learned Judge has rightly held that the decisions relied on by the learned Counsel for the appellants and referred to above, will not apply to the facts of the present case.
16. The only other argument advanced by the learned Counsel for the appellants is that the plaintiff had not exploited the picture fully as per the terms of the agreement, Ex.P.1. The learned Counsel contended that the plaintiff had not exhibited the picture in the States of Orissa, Bengal and Madhya Pradesh, to which places also the distribution agreement extends. Ex.P.1 shows that the area in which the plaintiff has got the right to exploit the Picture comprises of the districts of Srikakulam, Visakapatnam, East Godavari, West Godavari, Krishna, Guntur, Nellore, Chittoor, Anantapur, Cuddapah, Kurnool, in Andhra Pradesh, Bellary District of Mysore State, Ganjam and Korapet districts of Orissa State and Bengal circuit including Madhya Pradesh. The Plaintiff has let in sufficient evidence to show that he made very effort to exploit the picture in Bengal Circuit and in the districts in Orissa State, but he could not succeed. It is the admitted case of both the parties that in these areas Telugu Picture can be screened only as a Morning show. The Plaintiffs case that there was no proper offer from any exhibitor from those areas, and therefore the plaintiff as a distributor, could not exploit the picture in those areas, has to be accepted, and the same has been rightly accepted by the learned Judge. The learned Counsel for the appellants elaborating this contention further argued that in some theatres in the Districts of Andhra Pradesh, the Picture had not run even the minimum-run days. He contended that in Tenali, the Minimum run-days were 42, but the picture had run in theatre at tenali only for 34 days in Vijayanagaram the minimum-run days were 42, but the picture had run only for 26 days, and this, according to the counsel, goes to show that the plaintiff failed to exploit the picture fully as per the terms of agreement Ex.P.1. We are the view that the said contention is without substance. It is explained on behalf of the plaintiff that the exhibitors could not be persuaded to run the picture for the minimum-run days, because the collections were very poor. There is nothing to show that the plaintiff failed to make all efforts to exploit the picture fully as per the terms of the agreement. The evidence in this case also goes to show that inspite of all the efforts on the part of the plaintiff to persuade the exhibitors to adhere to the terms and run the picture for the minimum run days, the exhibitors could not be persuaded to do so. By the letter dated 25.6.1966 marked Ex.P. 25 the plaintiff explained to the defendants the difficulties in screening the picture. Ex.P.29, dated 2.6.1966 is a letter from the defendants to the plaintiff which shows that the defendants knew about the fact that some exhibitors were removing the picture even before the minimum - run period. Ex.P.62, dated 5.12.1968 in another letter from the defendants to the plaintiff wherein the defendants accepted the plaintiff's suggestion for a second release of the picture. In the said letter, the defendants requested the plaintiff to realise as much money as possible from such second run. All these letters go to show that the plaintiff has been making every effort to exploit the picture properly and fully as per the terms of the agreement Ex.P.1.
17. Further, in the present case, the defendants have raised a plea of equitable set off and it is not a mere defence to the suit claim. If the picture had not been properly exploited by the plaintiff as contended by the defendants, the remedy of the defendants is to claim damages against the plaintiff which would be an independent claim and which can stand along with the plaintiff's claim. In the written statement, the defendants have pleaded that they have suffered damages as the plaintiff failed to exploit the picture properly as per the terms of the agreement As a matter of fact, an additional issue No. 8 has been framed to the effect as to whether the defendants are entitled to damages for non-exploitation and additional Issue No. 9 is framed as to whether the defendants are entitled to claim Act off regarding damages. It is well settled position of law that even in respect of equitable set off, the Court fee has to be paid. In the present case, admittedly, the defendants have not paid any court-fee, and therefore, the plea of set off has to be rejected.
18. The learned Judge has given cogent and convincing reasons for granting a decree in favour of the plaintiff. There is absolutely no merit in the appeal and the appeal is liable to be dismissed. Accordingly, the O.S.A. is dismissed with costs.