Bombay High Court: In a petition filed under Section 9 of the Arbitration and Conciliation Act, 1996 seeking interim measure of restraining the respondents from producing sequel to film “Goodachari”, Manish Pitale, J. found that the petitioner failed to make a prima facie case in its favour, and that the film was already in the pre-production phase. Therefore, the Court dismissed the instant petition.
Background
It was stated that a deed of transfer was executed by the petitioner authorizing the first respondent to only produce a remake of the original film. The petitioner contended that the original film being in Telugu, the said deed specifically limited the assigning of copyright in the film by incorporating specific covenants clearly indicating that there was no right to produce a sequel.
The petitioner and third respondent jointly held Intellectual Property Rights and Exploitation Rights pertaining to the said film in 50-50 ratio. The film was jointly produced and released in theatres on 3-08-2018, got good response from audience and was also artistically acclaimed in Telugu film industry. Two of the respondents approached the petitioner to express their interest in acquiring rights concerning the said film, including remake rights, which led to execution of transfer deed dated 4-05-2019. Interpretation of clauses of the said deed gave rise to the instant dispute.
It was contended that in June 2023, the petitioner came to know that the petitioners made a public announcement for producing a sequel of the said film, tentatively titled as “Goodachari-2/G-2”, after which, the petitioner issued legal notice on 28-06-2023 claiming that the transfer deed excluded the right to make sequel to the film, restraining the respondents from making any attempt to produce the sequel. The respondents claimed that they had acquired entire rights. The respondents further claimed that the news was all over regarding the making of this sequel since 2022 and that even the petitioner had shown knowledge of the same in an interview dated 4-04-2023.
Court’s Analysis
Regarding the challenge against the transfer deed to be taken as an arbitration agreement between the parties, the Court pointed towards the ‘not very happily worded’ clause 23 which named Clause 25, but the agreement ended at the very same 23rd clause. Regardless of the same, the Court gave a proper and holistic reading to the same reflecting that the parties agreed for determination of all the matters under Arbitration and Conciliation Act, 1996 with exclusive jurisdiction of Courts at Mumbai, including interim relief under Section 9. The Court found the clause qualified to be an arbitration agreement executed between the parties. It further opined that even if the ratio in K.K. Modi v. K.N. Modi, (1998) 3 SCC 573 and Mahanadi Coalfields Ltd. v. IVRCL AMR Joint Venture, 2022 SCC OnLine SC 960 was applied as relied upon, the said clause did qualify. The Court agreed with the petitioner’s contention that “no party can be allowed to take advantage of inartistic drafting of the arbitration clause”.
For instant petition being filed under Section 9 and not Section 11 of A&C Act, the Court supported the petitioner’s reliance upon SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618 which held that “when a party seeks interim relief, while claiming that the dispute is liable to be resolved by Arbitration under the said Act and the opposite party disputes the very existence of Arbitration Clause/Agreement, even in a proceeding under Section 9 of the said Act, the Court must necessary decide as to whether such an Arbitration clause/Agreement is valid in law.”
Right to Sequel
The Court perused the clauses of transfer deed to express that the entire document along with schedules would have to be read as a whole, which stated that the rights transferred included remake rights in all languages other than theatrical release rights in Telugu, dubbing rights in Hindi and North Indian languages with reference to the definition of Intellectual Property Rights excluding exploitation and derivative rights.
The Court found that the acceptance of petitioner’s contention would lead to an absurdity since the exhaustive definitions of exploitation rights and derivative rights would take away even the remake rights of the film in the schedule pertaining to mere clarification of the expression, ‘said rights’. It further explained that the interpretation sought would lead to an absurdity, relying upon Radha Sundar Dutta v. Mohd. Jahadur Rahim, 1958 SCC OnLine SC 38 recognizing the settled rule of interpretation that in case two constructions of a document were possible, the one giving effect to all the clauses must be preferred over the one rendering one or more clauses nugatory. The Court followed the decision in Ramkishorelal v. Kamal Narayan, 1962 SCC OnLine SC 113 regarding golden rule of construction, ascertaining the intention of parties after considering all the words in their ordinary and natural sense.
The Court hinted towards the petitioner’s failure to make out a prima facie case in its favour and expressed that “Ordinarily, once a finding is rendered that no prima facie case is made out, no discussion is warranted on the aspects of grave and irreparable loss and balance of convenience.” However, due to exhaustive address regarding balance of convenience and urgency, the Court went on to refer to the rival contentions and pointed towards the petitioner circulating the instant petition “on a contrived ground of urgency” since the evidence reflected that the intention to produce sequel was in public domain since June 2022.
The Court noted that the film was already in pre-production phase, and a number of third parties were already involved who would suffer hardship if the petitioner’s prayers were granted. The Court was convinced that the petitioner did not deserve any indulgence, and therefore dismissed the instant petition.
[Sri Abhishek Pictures v. Abhishek Agarwal Arts LLP, 2023 SCC OnLine Bom 2440, Order dated 27-10-2023]
Advocates who appeared in this case :
For Petitioners: Advocate Mayur Khandeparkar, Advocate Vikramjeet Garewal; Advocate Mahalakshmi Ganpathy
For Respondents: Advocate Venkat Rao, Advocate Akash Gaonkar, Advocate Archita Rao, Advocate Sindhu Kotian; Legalserve and Associates, Advocate Vikas Kumar, Advocate P. V. Narendran; Lex Legal and Partners
Buy Arbitration and Conciliation Act, 1996 HERE
