RISHI RAJ Vs. S.A. LUTHRIA

JUDGEMENT

(1.) PLAINTIFF , Sh. Rishi Raj has filed this suit for recovery of Rs. 28 lacs against the defendant, Sh. S.A. Luthria. Out of the sum of Rs. 28 lacs, the principal amount is Rs. 25 lacs and the amount of Rs. 3 lacs is interest @ 12% p.a. from 17.3.2005 till the date of filing of the suit. Plaintiff claims recovery of this amount on account of the amount of Rs. 25 lacs being due to the plaintiff from the defendant as the net expenditure incurred by the plaintiff with respect to the production and distribution of the film 'Lashkaara' (name of film subsequently changed to 'Hatya - The Murder'), (hereinafter referred to as the 'subject film'). The defendant has not only defended in the suit, but he has filed a counter claim for rendition of accounts from the plaintiff on the ground that the income and expenditure amounts have not been correctly shown and proved by the plaintiff.

(2.) THE facts of the case are that the defendant was the producer of the subject film. Defendant by September, 1995 is said to have incurred expenditure of around Rs. 26,86,000/ - + Rs. 5.5 lacs (Rs. 1.5 lacs payable to one Mr. Anees Ansari and Rs. 4 lacs payable to the Director, Mr. Kadar Kashmiri) for the film in question. Defendant at that stage did not have the finances to complete the film and he therefore approached the plaintiff for financing the film upto an amount of Rs. 20 lacs, subject to the subject film being produced by the defendant by 31.12.1995. In case the film was not completed by the defendant by 31.12.1995, then, the plaintiff was entitled to complete the balance film by incurring expenditure and after recovering his expenditure, the plaintiff was to pay the defendant a sum of Rs. 6.5 lacs and thereafter the balance income was to be divided 50:50 between the parties. Parties in this regard entered into the admitted Agreement dated 16.09.1995, Ex.PW1/1. Plaintiff in this Agreement is referred to as the World Rights Controllers and the defendant is referred to as the producer. Some of the relevant clauses of this Agreement are Clauses 3, 5, 6, 8, 10, 11, 12 and sub - Clauses 12(1), 12(2), 12(3), 12(4), 12(5) (c), 12(8) and 12(13), and which read as under: -

(3.) A reading of the aforesaid clauses shows that the plaintiff was to invest in essence a sum of Rs. 20 lacs at the first stage and which he was to be repaid with interest. If by 31.12.1995 the film was not complete, then the plaintiff had a right to step into the film production by incurring the complete expenditure. The plaintiff's investment in the subject project by means of expenditure was to be first recovered from the recoveries to be made from the release of the film, and after paying the other creditors the amounts which were due to them, the net revenue from the release of the film was to be equally divided between the parties.