MAGNUM FILMS Vs. MOTION PICTURE ASSOCIATION

JUDGEMENT

(1.) This appeal by M/s. Magnum Films, plaintiff-appellant is directed against the order of learned single Judge dated 16th December, 1998 dismissing I.A. No. 7412/98 and allowing I.A. No. 8079/98 thereby vacating the ad interim injunction order dated 26th August, 1998.

(2.) Suit for declaration and permanent injunction was filed by the plaintiff, inter alia, alleging that it is a firm carrying on business of Film distribution, exhibition and exploitation of Cinematographic films in the territories of Delhi and U.P. Defendant No. 1 - Respondent No. 1 is an Association and as per the rules framed by it, no person can distribute films unless the same is got registered with it. Membership of defendant No. 1 is a must whosoever wants to carry on film trade in the territories of..' Delhi and UP. Defendant No.2-respondent No. 2 is a film producer and produced film titled RAJAJI. Defendant No, 3-RespondenNo. 3 is also carrying on business of film distribution, exhibition and exploitation of cinematographic film in the territories of Delhi and UP. The plaintiff and defendant No. 3 are permanent members of defendant No. 1 Association and as such are bound by the Rules framed by Defendant No. 1 Association.

(3.) It is alleged by the plaintiff-appellant that under an agreement dated 27th July, 1998 entered into between the plaintiff and defendant NO; 2, the later granted to the former sole and exclusive rights .of said picture RAJAJI for the territories of Delhi and U.P. for a total consideration of Rs. 90 lakhs for a period of 10 years. As per the, said agreement a sum of Rs. 5,01,000.00 was to be paid by the plaintiff to defendant No..2 immediately on signing the picture and Rs. 6 lakhs were to be deposited with. defendant No. 1 at the time of registration of picture to settle the claim of defendant No. 3. Accordingly, the plaintiff paid a sum of Rs. 5,01,000.00 by means of cheque No. 0217771 dated 27th JUly, 1998 drawn on Vijaya Bank, Chandni Chowk, Delhi, to defendant No. 2 and the cheque was got encashed by defendant No. 2 through clearing on 31st July, 1998. Defendant No. 2 Issued a letter dated 27th July, 1998 in favour of the plaintiff in the name of defendant No. 1 authorising defendant No. 1 to register the said picture in plaintiff's favour for the territories of Delhi and U.P. Since the plaintiff was to pay the amount of Rs. 6 lakhs to defendant No. 3 for settling its claim under the said agreement, plaintiff through its partner Ramesh Jain had atalk on telephone with Matlub Khan, partner of defendant No. 3 who confirmed that the agreement in between defendant No. 2 and 3 was cancelled and defendant No. 3 is only to recover the said amount from defendant No. 2. It is stated that in the meantime defendant No. 3 intimated the plaintiff that it is going to lodge its claim against the plaintiff in respect of the said picture. The plaintiff then enquired from defendant No. 2 as to how defendant No.3 is now turning hostile. Thereupon defendant No. 2 got a notice dated 30th July, 1998 issued through Advocate to defendant No. 3. In the notice it was categorically averred that defendant No. 3 had already relinquished its rights and it is only thereafter that the rights of distribution etc. in the said film were entrusted to the plaintiff by defendant No. 2 under the aforesaid agreement dated 27th July, 1998. It is further stated that defendant No. 3 seems to have approached defendant No. 2 offering higher amount for the said picture, which has changed the intention of defendant No. 2. By letter dated 6th August, 1998 written bydefendant No. 2 to defendant No. 3, for the first time defendant No. 2 alleged that the rights in the said picture were granted to the plaintiff subject to clearance from defendant No. 3, which allegation is totally erroneous. It is also pleaded that the said lietterdated6th August, 1998 was ante-dated and was actually sent on 18th August, 1998 from Delhi itself. Defendants 2 and 3 having exercised their influence on the office bearers of defendant No. 1, have started threatening to register the said picture in favour of defendant No. 3.