R N KUMAR Vs. R K SORAL

JUDGEMENT

(1.) This is an application for leave to appeal under Article 136 of the Constitution from the order of the Division Bench of the Delhi High Court Affirming the order of the learned single Judge of that High Court. It appears that on March, 1983, there was an agreement fir distribution of film "Savere Wali Gadi" entered into between the parties, the petitioner as the distributor and the respondent as the producer. The agreement contained an arbitration clause. It is stated that a sum of Rs. 3 lakhs was paid by the petitioner and acknowledged by the respondent earlier to the execution of the said agreement and therefore, the first instalment payable under the agreement to the respondent of Rs. 3.40 laks was deemed to be adjusted. Under the aforesaid distribution agreement by 30th August, 1983, the respondent was to hand over the prints of the film by this date which he never did. In or about 1984 certain other moneys of about Rs. 3 lakhs were further advanced to the respondent. On 11th March, 1985 a further agreement was entered into between the parties whereby the respondent agreed to pay a total amount of Rs. 6.50 lakhs to the petitioner and the petitioner to give up his distribution rights in the first agreement of 19th March, 1983, The first agreement was accordingly irrevocably cancelled and superseded by this subsequent agreement. On or about 2nd June, 1985 respondent wrote to the Motion Pictures Association, Delhi to de-register the film in the name of the petitioner in view of the petitioner having given up the distribution rights by virtue of Annexure P/2 dated 11-3-1985 whereunder the petitioner had agreed to receive Rs. 6.50 lakhs and finished the deal within six months of 11-3-1985. It is the case of the petitioner, however, that the sum of Rs. 6.50 lakhs was never paid by the respondent to the petitioner. On 3rd July, 1985 the Motion Picture Association wrote to the respondent acknowledging receipt of respondent's letter dated 22nd June, 1985 whereby he had asked for de-registration of the film in view of Annexure P/2. The Motion Picture Association stated that de-registration would be allowed only when the respondent paid Rs. 6.50 lakhs to the petitioner or deposited the amount with the Motion Picture Association. It is stated that between July 1985 and September 1985, the petitioner wrote two letters to the Motion Picture Association stating that the respondent had committed a breach of the subsequent agreement dated 11th March, 1985 executed between the parties whereunder the respondent was to make payment of Rs. 6.50 lakhs and it was clear that the respondent had no desire to make payment and the respondent wrongly wanted to deal with the film and sell the distribution rights to somebody else thereby enjoying benefit of the same and also to deprive the petitioner of the amount of Rs. 6.50 lakhs. Civil suit was filed in February, 1986 for recovery of Rs. 6.50 lakhs with interest by the petitioner against the respondent. The written statement was submitted. An application was made under Section 20 in June, 1986. This application had been made later than the institution of the civil suit in the same High Court. The learned single Judge directed that the arbitration agreement to be filed and reference was directed according to the agreement. There was an order passed by the learned single Judge to that effect. There was an appeal to the Division Bench of the High Court and the Division Bench confirmed the order of the learned single Judge. Hence this petition.

(2.) It appears that there were two agreements one dated 11th March, 1985 and the other dated 19th March, 1983. The learned Judge found that there could be little doubt that the intention of the parties when agreement dated 11th March, 1985 was entered into was that the earlier contract dated 19th March, 1983 should be superseded. But it appears that the agreement fell through because when the agreement of 1985 was entered into, it was the intention of the parties to the earlier agreement would be superseded and a new arrangement was sought to be brought about whereby the rights of the petitioner herein under agreement dated 19th March, 1983 were to be yielded for a sum of Rs. 6.50 lakhs. This amount of Rs. 6.50 lakhs was never paid by the respondent. It was the case of the petitioner herein that thereby the agreement of 11th March, 1985 stood cancelled. The petitioner who claimed rights under the earlier agreement dated 19th March, 1983 and sought the continuation of his registration of distributorship. The learned single Judge found that it was at the instance of petitioner herein that respondent No. 2 confirmed vide its letter dated 19th September, 1985 that as the petitioner, before the learned single Judge, had failed to pay Rs. 6,50,000/- the aforesaid picture stood registered in the name of the petitioner herein. This registration could continue only by virtue of the earlier agreement dated March 19, 1983. The learned single Judge further found that the agreement dated 11th March, 1985 had come to an end and the earlier agreement dated 19th March, 1983 had revived. In this connection reference may be made to the observations of the Patna High Court in Babulal Marwari v. Tulsi Singh, AIR 1940 Pat 121. Whether in any particular case there was a complete novation of a contract in the sense that the new contract replaced or substituted the old contract, could depend upon the facts and circumstances of the case.

(3.) In that view of the matter, the single Judge of the High Court, in our opinion, rightly directed that the first agreement be filed.