W. JAYARAGHAVAN Vs. THE LEO FILMS

JUDGEMENT

(1.) THIS is an appeal by the plaintiff against the amount of damages awarded to the defendants upon their counter -claim. The plaintiff (hereafter called " the appellant,") carries on business as a film distributor. The defendant firm, of which Mr. C.S. Jagannathan is the managing partner (to whom it is convenient hereafter to refer as " the respondent ") were producers of a Tamil talkie picture named " Poompavai." Whilst the film was in course of production, and before it had been completed, a contract dated 6th May, 1943, was made between the respondent (therein called " the lessor ") and the appellant (therein called the "lessee") whereby it was agreed inter alia that (1) the respondent should lease to the appellant the rights of exploiting the picture " Poom -pavai " within the districts specified in the agreement, including the City of Madras, for five years from the date of delivery of the picture; (2) the appellant to pay to the respondent, as rent, the sum of Rs. 32,000 of which Rs. 2,016 was payable on the date of the agreement, three sums of Rs. 5,000 each payable on 16th May, 16th June and 16th July, 1943, and the balance of Rs. 14,984 on delivery of two -copies of the picture; and (3) in case of any infringement by either party, the defaulter should compensate the other for the loss sustained.

(2.) THE appellant duly made the first payment of Rs. 2,016 but he failed to pay any instalment thereafter, the first default taking place on 16th May, 1943, when a sum of Rs. 5,000 then due was not paid. The respondent treated the appellant's failure as a repudiation of the agreement, thereby entitled him to terminate it, which accordingly he did. The appellant instituted a suit, C.S. No. 22 of 1944, against the respondent claiming specific performance of the agreement and damages for wrongful repudiation and for return of the amount of Rs. 2,016 paid on or about the 8th May, 1943. The respondent counter -claimed for damages, alleging they amounted to Rs. 20,000, but he limited his claim to Rs. 5,000. The suit was tried by Chandrasekhara Aiyar, J., sitting in the exercise of ordinary original civil jurisdiction of this Court, who held that the respondent was in breach and the appellant was not. On appeal, that decision was set aside; the appellate Court found that the appellant was at fault and the respondent was justified in terminating the contract and directed that the counter -claim be remanded to the Original -Side of this High Court to inquire into the damages and to pass a decree for the amount found due to the respondent. The appellate Court upheld a finding that the appellant was entitled to return of the sum of Rs. 2,016. The latter finding clearly was pursuant to the provisions of Section 64 of the Indian Contract Act.

(3.) THE respondent was the only witness who was called. A perusal of his testimony does not reflect that it was very satisfactory or dependable. He said the cost of the picture was Rs. 3,00,000, its production commenced in September 1942 and was completed in August 1944. By May 1943 only Rs. 10,000 had been obtained towards the heavy cost of making the picture, which sum was provided by the respondent himself, that amount was exhausted by May 1943, when the agreement was made, with the appellant, and, when he paid the sum of Rs. 2,016. At that period, the respondent was under obligation to pay salaries and provide board and lodging for the artists who had been engaged and for use of the studio. The complaint made is that production was held up solely because the appellant failed to make his payment of Rs. 5,000 on the 16th May, and the other two instalments of like amounts on 16th June and 16th July. In July, the respondent entered into a very satisfactory arrangement and contract with one S. Venkatararman Chettiar, who subsequently provided all the finance which was needed in con -sideration of which he was given the exploitation rights in a large part, if not throughout the whole of the Presidency of Madras and other places where the picture would be acceptable for exhibition. The main complaint which the respondent appeared to make in his evidence was that through the appellant's default he was unable to purchase raw films; but nevertheless his accounts show that a sum approaching Rs. 3,000 was spent for such films in April, 1943. In cross -examination, the respondent was forced to admit that he obtained from Venkataraman Chettiar a sum of Rs. 5,000 on the 17th June, and another sum of Rs. 2,500 on the 26th June, for which no interest was payable. He added, that he borrowed Rs. 6,000 between May and June from a man named Sanjeeva Naidu at interest.