Delhi High Court: A suit was filed by Ivy Entertainment Private Limited (plaintiff) seeking interim injunction thereby restraining the defendant, its agents, representatives and assigns or any person acting through the defendant, from releasing the Tamil Film – ‘Veera Deera Sooran’ (‘Assigned Film’) on 27-03-2025 along with a direction to the defendant to render accounts in respect of their contracts with the distributors for the theatrical release of the assigned film and its satellite rights. Manmeet Pritam Singh Arora, J., granted an ad-interim injunction, restraining the defendant from releasing the film for four weeks, citing the defendant’s failure to fulfill its contractual obligation to provide the necessary Theatrical Release Materials and Before Release Materials.
The present petition arises from a dispute between the plaintiff and the defendant regarding the release of the film “Veera Deera Sooran.” The plaintiff and defendant entered into a Film Assignment Agreement dated 19-06-2024, under which the defendant assigned digital, theatrical, and satellite rights of the film in Hindi and North Indian languages to the plaintiff for a consideration of Rs. 51 crores, of which Rs. 44 crores have been paid. The defendant retained the theatrical rights for the Southern States of India and overseas (except Nepal).
According to the plaintiff, the defendant breached the Assignment Agreement by announcing a theatrical release date of 27-03-2025, without obtaining the plaintiff’s written approval. The plaintiff asserted that, under Articles 1.6.1.3, 5.C.44, and 5.C.46 of the Agreement, such a release requires their consent. Additionally, Articles 1.9, 1.12, and 1.24 mandated the defendant to deliver the “Before Release Materials” and “Theatrical Release Materials,” including the CBFC Certificate, at least 14 days before the release. However, the plaintiff claims the defendant failed to meet this requirement, thereby preventing the plaintiff from exploiting its rights, particularly in negotiating digital rights with OTT platforms.
The defendant, on the other hand, argued that the plaintiff was aware of the release date since January 2025 and has approached the court with unclean hands. The defendant also contended that the plaintiff’s inability to negotiate digital rights is unrelated to the theatrical release. While the defendant received the CBFC Certificate on 22-03-2025, it asserted that the proposed release remains within the outer limit of 31-03-2025, as stipulated in Article 1.23. The defendant further maintained that the plaintiff’s failure to pay the remaining Rs. 7 crores relieve it of any obligation to provide the materials.
Despite the plaintiff’s requests for a deferral to secure digital rights, the defendant proceeded with release preparations, resulting in ticket sales and distributor commitments. The dispute led the plaintiff to seek injunctive relief to halt the film’s release, citing irreparable harm and breach of contractual obligations.
The Court noted that the defendant obtained the CBFC certificate for the original Tamil language version only on 22-03-2025, after the service of the advance copy of the plaint. The Court observed that the defendant had not provided the Theatrical Release Materials and Before Release Materials as stipulated in Articles 1.24 and 1.12 of the Assignment Agreement, which were necessary for the plaintiff to exercise its rights.
The Court emphasised that the timely delivery of these materials was the essence of the Agreement as outlined in Articles 1.9, 2.15, and 4.1. It was held that the defendant’s obligation to deliver the materials was absolute and not contingent upon any request from the plaintiff. The email dated 24-03-2025 was deemed insufficient to meet the compliance requirements.
The Court further observed that the defendant’s inability to deliver the materials before 22-03-2025, due to the absence of CBFC certification, and its refusal to defer the release date of 27-03-2025, constituted a flagrant breach of the Agreement. The defendant’s assertion that the plaintiff impliedly consented to the release date was rejected, as there was no written consent from the plaintiff, nor any formal communication from the defendant confirming the release date.
The Court emphasised that since the defendant had failed to fulfill its material obligations despite receiving Rs. 44 crores from the plaintiff, it was a fit case for the defendant to have extended the release date using the grace period under Article 1.23. The refusal to do so denied the plaintiff the opportunity to exploit its assigned rights.
The Court rejected the defendant’s argument that the plaintiff had no cause of action due to non-payment of the remaining Rs. 7 crores. The Court noted that the plaintiff had offered to pay the balance within 24 hours, which the defendant refused. Therefore, the claim of lack of cause of action was found meritless.
The Court held that an ad-interim injunction was warranted to prevent irreparable injury. The Court noted that damages could not adequately compensate the plaintiff’s losses, especially considering the risk of lower digital rights valuation if the film underperformed at the box office.
The Court concluded that a four-week deferment of the release was justified and reasonable. The plaintiff was directed to deposit the Rs. 7 crores within 24 hours, after which the defendant was to provide the required materials within 48 hours. The Court appointed a Commissioner to supervise the compliance. Additionally, the Court imposed a cost of Rs. 25,000 on the plaintiff for the non-disclosure of a relevant email, with the payment to be made to the Delhi High Court Legal Services Committee.
Finally, the Court clarified that the defendant would be entitled to release the film after four weeks, with no further extensions permissible. This balanced the interests of both parties and protected the plaintiff from irreparable harm.
[Ivy Entertainment Private Limited v. HR Pictures, 2025 SCC OnLine Del 1889, decided on 27-03-2025]
Advocates who appeared in this case:
Mr. Darpan Wadhwa, Sr. Adv. with Mr. Sanampreet Singh, Advocates for plaintiff
Mr. Devadatt Kamat, Sr. Adv. with Mr. Ruchir Tolat and Mr. Utsav Trivedi, Advocate for respondent
