N HARDIP SINGH Vs. HIRA FILMS

JUDGEMENT

(1.) HIRA Films of Bombay is a firm which produced the film knows as "chandni Chowk". This firm, through its world distributing agents, Tribhavan Productions, again of Bombay, entered into an agreement with Sikand Films of Jullundur in 1953 whereunder the Jullunder firm was appointed to be the distributing agents for five years to exploit this film-Chandni Chowk-in the territories of the Punjab, Pepsu, Himachal Pradesh and Jammu and Kashmir on certain terms. The Jullundur firm exploited the film for a certain period and then on 22-2-1955 the Sikand films filed the present suit in the Court of the Senior Sub-Judge, Jullundur, against the Bombay firm for recovery of Rs. 17,500/- as damages, for delivery of a fourth print of the film and for a declaration that the plaintiff firm was entitled to recover damages at the rate of Rs. 1,000/- per day from the date of the suit till the delivery of the fourth print. The trial Court decreed the suit for delivery of the fourth print on payment of Rs. 1,400/- and awarded Rs. 2,000/- as damages but refused to grant the declaration for future damages. Dissatisfied with this decree the plaintiff has filed the present appeal in this Court for a decree of rs. 17,500/- as damages and for a declaration of future damages. Hira Films has filed cross-objections for the dismissal of the suit in toto.

(2.) THE main point to be determined in this appeal is the amount of damages, if any, to which the plaintiff firm is entitled to recover from the defendants. The facts relevant for the decision of this matter are these. On 11-11-1953 the parties entered into an agreement for exploitation of this film on the terms that 1. the plaintiff firm shall advance Rs. 45,000/- to the Hira Films in certain specified instalments. (2) the plaintiff firm shall spend Rs. 5,000/- on publicity on behalf of the bombay firm, (3) the plaintiff firm shall be entitled to a commission of 20 per cent and the defendant firm will get 80 per cent on the earnings derived form the exploitation of the film. This ratio was to be altered to 30 per cent and 70 per cent respectively if the earnings reached the figure of Rs. 65,000/-, (4) the plaintiff firm shall recover the advance of Rs. 45,000/-, the actual publicity expenses and its commission from the earnings and shall remit the balance to the bombay firm, (5) the plaintiff firm shall regularly submit detailed accounts of the earnings etc. to the Bombay firm, (6) the Bombay firm shall supply three new copies of the film but the plaintiff firm could get any number of copies on payment of certain specified amounts and (7) the film was to be exploited for five years from the date of its release for exhibition. It is not necessary to take other terms of the agreement into consideration. On 27-1-1954 the agreement was modified so as to increase the amount of the advance payable by the plaintiff firm to Rs. 51,000/ -. It appears that the film was released in Delhi during december, 1954. Differences arose between the parties and the defendant firm cancelled the agreement on 16-12-1954. Thereupon the plaintiff firm filed a suit for a declaration that it was the sole distributor of the picture for the contracted areas. The parties settled the dispute and modified the terms of the original agreement so as to further increase the amount of the advance by another Rs. 5,000/ -. The Bombay firm further agreed to supply extra fourth copy on payment of Rs. 1,700/-, out of which Rs. 300/- had already been paid. Clause 4 of this agreement reads:

(3.) IT is common ground between the parties that the damages payable to the plaintiff firm are to be assessed in accordance with S. 74 of the Indian Contract Act, 1872. This section reads: