SVF ENTERTAINMENT PVT LTD Vs. ANUPRIYO SENGUPTA

JUDGEMENT

(1.) In this application under Section 9 of the Arbitration and Conciliation Act, 1996 (in short, "the Act of 1996") the petitioner has prayed for orders of injunction against the respondent for enforcement of a negative covenant in the agreement dated July 01, 2013, as amended by the amendment agreement dated April 28, 2016, which also contains an arbitration agreement between the parties.

(2.) The petitioner carries on business, inter alia, of production of films. It is the case of the petitioner that on July 01, 2013 it entered into a Film Artist Agreement (hereinafter referred to as "the said agreement") with the respondent, an actor whereby the latter agreed to render his services as a part of the starcast on an exclusive basis to the petitioner as per the production schedule to be communicated to him from time to time for a premium remuneration. In this regard, the petitioner has disclosed a copy of the said agreement where the petitioner and the respondent have been described as "the producer" and "the artist", respectively. According to the petitioner, as per clauses 5.1.9 and 9.3 of the said agreement the respondent confirmed his engagement for providing services exclusively to the petitioner for the entire term of the said agreement and that during the term of the said agreement he shall not, without the written consent of the petitioner, create or participate in any manner in any other film, television serial, advertisement outside the banner of the petitioner. The said agreement was valid for a period of three years. On April 28, 2016 the parties herein executed an addendum agreement (hereinafter referred to as "the said addendum") extending the validity of the said agreement to a period of five years. The clauses pertaining to the remuneration to be paid by the petitioner to the respondent were also modified and clause 2A was inserted in the said agreement. The petitioner claims that by clause 2A of the agreement inserted by the said addendum, the respondent agreed to render his services to the petitioner on an exclusive basis for the extended term of the agreement till June 30, 2018 and thereafter for a period of three months, that is, up to September 13, 2018. The respondent signed with the petitioner for altogether five films out of which three films have already been released and the remaining two films are under production. Under the said agreement, the respondent agreed not to enter into any other arrangement and/or agreement and/or engagement and/or employment with any third party for providing any kind of service or performance in theatre, television for any other party relating to media and entertainment industry or otherwise, without obtaining a prior written approval from the petitioner. The petitioner claims that it never failed to perform its obligations under the agreement and it is also ready and willing to perform the said agreement. However, in early December 2017, the petitioner came to know that the respondent has engaged himself for providing film related services to a third party namely, Surinder Films for which he did not obtain any written consent from the petitioner. By a notice dated December 12, 2017 the petitioner called upon the respondent, inter alia, to cease from providing his services including any shooting, appearance or production related activity to any third party in breach of the said agreement as amended by the said addendum. The petitioner alleges that the conduct of the respondent has caused it to suffer irreparable damage, loss of business profits and has jeopardized its upcoming productions. In the said letter the petitioner further claimed that in the absence of an affirmative and timely action on the part of the respondent, it shall be bound to pursue every available remedy including injunction, specific performance, claim of damages against the respondent. In response to the said notice by an electronic message informed the petitioner that he does not have any copy of the said addendum. Thereafter, the petitioner forwarded a copy of the said addendum to the respondent. On December 26, 2017 when the representative of the petitioner met the respondent personally, the latter expressed his unwillingness to back out of the other film for which shooting has already started. The petitioner alleges to have made a considerable amount of investment on the respondent so as to make him a star from a non-entity. It has also developed the respondent's acting skill and spent enormous sums for building up his brand. The petitioner, therefore, seeks enforcement of the exclusivity term incorporated in the said agreement to recover its investment on the respondent, both direct and indirect, exceeding Rs. 1 crore. Any further breach of the said exclusivity term by the respondent would result in interference with the petitioner's existing and upcoming projects/production thereby causing irreparable harm and injury to itself. The petitioner further alleges that under the said agreement the respondent acknowledged the production of the film is an unique, unusual and extra ordinary character, the loss of which cannot be reasonably compensated by damages and, therefore, he agreed that the petitioner shall be entitled to seek specific performance of his services and obligations under the said agreement. Accordingly, the petitioner is entitled to seek specific performance of the said agreement by the respondent, not only in law but also under the specific terms of the said agreement. The petitioner asserts that even if specific performance of the said agreement cannot be granted, the respondent ought to be restrained from acting in breach of the negative covenant contained in clause 2A of the said agreement. The respondent is, however, not interested to perform his obligation under clause 2A of the said agreement giving rise to the disputes between the parties to be adjudicated as per the arbitration agreement contained in clause 15 of the said agreement. Thus, the petitioner is taking all necessary steps to refer the disputes to arbitration and filed this application under Section 9 of the Act of 1996 seeking for, inter alia, an order of injunction restraining the respondent from performing any arrangement and/or engagement and/or agreement with any other producer, director or other third party, in breach of the negative covenant in the said agreement.

(3.) On December 28, 2017 the petitioner moved this application before a learned Single Judge of this Court sitting in Vacation Bench and obtained an order of injunction restraining the respondent from anyway acting, participating or otherwise being engaged in any film, theatre or television production for public display until January 05, 2018. By the said order the point of maintainability of the application was kept open. On January 5, 2018 when this application was taken up for hearing the petitioner obtained leave to file a supplementary affidavit. Thereafter, the petitioner filed a supplementary affidavit disclosing a letter dated December 28, 2017 issued by the respondent alleging that on earlier occasions, he had, with the knowledge of the petitioner and without its written consent, engaged himself in the production of a bengali film by Surinder Films and also with another producer, namely M/s Heartbeat Production and the said films were released prior to the petitioner's notice dated December 12, 2017. The respondent further alleges that when the petitioner stopped his remuneration from the month of June, 2017 he is presently doing another film with the said M/s. Surinder Films which is already on floor for the last couple of months. The respondent denies that the petitioner has suffered any damage or loss of business due to his involvement in the film produced by the said Surinder Films. He has, however, expressed readiness and willingness to render his services with honest and sincerity to the petitioner. In the supplementary affidavit, the petitioner alleged that it has already paid Rs. 18.13 lakhs to the petitioner which is over and above the sum of Rs. 16 lakhs payable to the respondent under the said agreement as amended by the said addendum for the first four films and there has been an excess payment of Rs. 2.13 lakhs to the respondent.