Moti Mahal Theatre v. Bharati Cinema Private Ltd. — 1973 DIGILAW 300 (CAL)

JUDGMENT The plaintiff is a financier and distributor of cinematographic films. The defendant No. 1 is a producer of such films and the defendant No. 2 is a director of the defendant No. 1. By an agreement in writing entered into by and between the plaintiff and the defendant No. 1 on February 22, 1957, it was agreed that the defendant No. I would appoint the plaintiff as the sole and exclusive distributor of a Bengali film named 'Bagha Jatin' for exhibition and exploitation. The plaintiff under the said agreement would, from time to time, advance moneys the defendant No. 1 to the extent of Rs. 80,001 and/or spend the same for or on account of the latter and would be entitled to agreed commission realizable from the box office receipts of the film. The said agreement in writing was in the usual form prevalent in the trade and contained an arbitration clause as follows :- "All questions of differences whatever which may at any time hereafter would arise between the plaintiff and the defendant No. 1 touching the agreement or the subject-matter thereof arising out of or in relation thereto respectively and whether as to construction or otherwise of the said agreement would be referred to the arbitration of the Bengal Motion Pictures’ Association, Calcutta, in accordance with and subject to the provisions of the Indian Arbitration Act, 1940." 2. It was provided in the said agreement that the sums advanced or spent by the plaintiff for and on account of the defendant No. 1 would be the first charge on the film. 3. The defendant No. 2 allegedly guaranteed due performance and/or execution of the agreement. The rate of commission payable to the plaintiff as aforesaid was allegedly increased by a subsequent arrangement made on June 28, 1958. 4. The plaintiff alleges that it paid to the defendant No. 1 and/or spent on its account a sum of Rs. 80,001 as stipulated and also spent a further sum of Rs. 69,477.95 The said film was released on or about June 27, 1958, for the first time in Calcutta for exhibition and between that date and April 30, 1960, the plaintiff alleges that it realised a sum of Rs. 75,580.74 from the box office receipts. The plaintiff claims from the defendants a sum of Rs. 69,477.95 The said film was released on or about June 27, 1958, for the first time in Calcutta for exhibition and between that date and April 30, 1960, the plaintiff alleges that it realised a sum of Rs. 75,580.74 from the box office receipts. The plaintiff claims from the defendants a sum of Rs. 81,288.01 in this suit and a declaration that the said film stands charged for payment of the said sum and the sale thereof. 5. It is admitted in the plaint that the disputes and differences between the plaintiff and the defendant No. 1 were in terms of the said arbitration clause referred to the arbitration of the Bengal Motion Pictures’ Association. On or about January 19, 1959, an award was made and published in the arbitration which reads as follows :- "Agreement is cancelled. Motimahal Theatres Private Limited shall return the eight prints to Bharati Chitran Private Ltd. on payment by them of the balance amount due after deduction of their share of the box office collections of the picture from the amount of Rs. 1,49,479.00 invested by Motimahal Theatres Private Ltd., Calcutta ." The distributors shall get no commission whatsoever but shall be entitled to interest at the rate of 4 per cent per annum on each amount of advance actually made after the date of commencement of such advances and after the date of release of the picture 'Bagha Jatin". The plaintiff contends that the said award is invalid, not enforceable and not binding on the plaintiff as the same was not filed in the Court. 6. The plaintiff filed this suit on May 16, 1960. On August 1, 1960, the defendants filed their written statement. During the pendency of this suit the said award dated January 19, 1959, was filed in this Court followed by an application by the plaintiff for setting aside the award. It appears from the records produced that on July 25, 1962 the application for setting aside this award was dismissed on a technical ground. On the same day judgment was passed in terms of the award. A decree in terms thereof was subsequently drawn up and filed. The plaintiff preferred an appeal from the order dismissing the application for setting aside the award. By an order dated May 13, 1964, the appeal Court remanded the said application back for rehearing. On the same day judgment was passed in terms of the award. A decree in terms thereof was subsequently drawn up and filed. The plaintiff preferred an appeal from the order dismissing the application for setting aside the award. By an order dated May 13, 1964, the appeal Court remanded the said application back for rehearing. It appears that by that time the parties had forgotten about the judgment upon award and the consequential decree. After remand, a consent order was purported to have been made on August 6, 1966, modifying the award to a certain extent. Admittedly, the plaintiff did not take any steps to set aside the said decree. 7. After the case was opened and the issues framed the parties came to realize that the decree on the award remained outstanding. Mrs. Manjula Bose, learned counsel appearing on behalf of the defendants, thereafter submitted that this suit could not be proceeded with in view of the decree passed in terms of the award. She contended that the decree resulted in final determination of the rights of the parties under the agreement which was also the subject-matter of this suit and amounted to a res judicata. 8. Mr. Hirak Mitter, appearing on behalf of the plaintiff, submitted that the said decree was, ex facie, not in terms of the award and, as such, the same was made without any jurisdiction. As a consequence, the same was a nullity and could be ignored. At the invitation of Mr. Mitter I have perused the award as also the decree. Undoubtedly they do not conform and there are substantial differences. Mr. Mitter invited the Court not to take any notice of the decree and to proceed with the hearing of the suit. 9. In support of his contentions Mr. Mitter relied on the decision in the case of (1) Official Trustee, West Bengal & Ors., v. Sochindranath Chatterji & Anr. AIR 1969 SC 823 . In that case the Supreme Court held that in order to invoke jurisdiction the Court should not only have jurisdiction over the subject-matter but also have the authority to pass the orders sought for. Mitter relied on the decision in the case of (1) Official Trustee, West Bengal & Ors., v. Sochindranath Chatterji & Anr. AIR 1969 SC 823 . In that case the Supreme Court held that in order to invoke jurisdiction the Court should not only have jurisdiction over the subject-matter but also have the authority to pass the orders sought for. This decision is not of much help to the plaintiffs in the instant case as there a suit was filed challenging the order passed by the lower Court and one of the reliefs claimed in that suit was for a declaration that the order passed was null and void as having been made without jurisdiction. No such proceedings were taken in this case and this Court is now being asked to by-pass an earlier decree in a subsequent proceeding. No authority could be cited on behalf of the plaintiff in support of this proposition. 10. The other decision cited by Mr. Mitter was in the case of (2) Vasudev v. Raja Bhai Abdul, AIR 1970 (1) SC 670 whore it was held that in certain circumstances the Court executing the decree could go behind a decree when the decree was a nullity, e.g., where it was passed without bringing the legal representatives on record of a person dead on the date of the decree, or against a ruling prince without a certificate or where the decree was made by a Court which had no inherent jurisdiction to make it. The decision, however, makes it clear that such objection to the jurisdiction of the Court to pass the decree should appeal on the face of the record and should not require examination of the questions raised or decided at the trial. 11. This case also is of not much help to the plaintiffs inasmuch as, firstly, the proceedings here are not in execution. Secondly, the earlier decree on its face cannot be held to be a nullity without examination of the award. Thirdly, the Court had inherent jurisdiction to pass that decree. The issue in dispute here is whether in a collateral proceeding the Court can by-pass a previous decree and, as I have already noted, no authority could be cited to show under what circumstances a Court could ignore or by-pass a decree in this manner. 12. Mrs. Thirdly, the Court had inherent jurisdiction to pass that decree. The issue in dispute here is whether in a collateral proceeding the Court can by-pass a previous decree and, as I have already noted, no authority could be cited to show under what circumstances a Court could ignore or by-pass a decree in this manner. 12. Mrs. Manjula Bose, in reply, relied on section 17 of the Arbitration Act and stated that the objection which was now being taken against the decree could very well have been taken in an appeal under section 17 of the Arbitration Act, 1940, which specifically provides for relief in such cases. The plaintiff having knowledge of the decree chose not to take the prescribed steps but allowed the decree to be drawn up, signed and filed and the same had become binding. 13. A decree of a Court can be set aside or made inoperative as follows: (a) by appeal, (b) by subsequent agreement between the parties not to give effect to the decree. Such agreement, however, has to be recorded as an adjustment (c) by a suit for setting aside the decree or a declaration that the decree is not binding on the plaintiff. None of these steps have been taken by the plaintiff in the instant case. In that view of the matter, I do not hold that such a decree should be given a go-by in the manner as has been suggested. 14. Lastly, Mr. Hirak Miter made an oral application for amendment of the plaint in this suit to include a claim for setting aside of the decree in this very suit. He contended that limitation will be no bar in view of the decision of the Supreme Court in the case of (3) Leach v. skinner, AIR 1957 SC 357 . An amendment as prayed for would mataerilly and radically after the nature of this suit. The Supreme Court has consistently held that an amendment which would destroy an accrued right of a party should not be allowed. A suit for setting aside of a decree where otherwise maintainable has to be brought within three years from the date of the decree. Under Articles 95 and 96 of the Limitation Act, 1908, a suit to set aside a decree on the grounds of mistake and fraud has to be instituted within three years. A suit for setting aside of a decree where otherwise maintainable has to be brought within three years from the date of the decree. Under Articles 95 and 96 of the Limitation Act, 1908, a suit to set aside a decree on the grounds of mistake and fraud has to be instituted within three years. If the question of fraud or mistake does not arise at best under the residuary Article 120 of the 1908 Act, such a suit has to be brought within six years. Under Article 59 of the present Limitation Act, 1963, a suit to set aside a decree has to be filed within three years. Time in all such cases runs from the date the plaintiff had knowledge of the decree. In this case, the plaintiff had the knowledge of the decree by February, 1959. In their application for setting aside the award the plaintiff included a prayer for interim stay of the execution of the decree. 15. Therefore, the right of the plaintiff to proceed against this decree by way of a suit definitely got barred by limitation after 1966. Keeping this in mind the amendment as asked for would permit the plaintiff to make fresh allegations and claim fresh reliefs. The series of Supreme Court cases starting from the case of (4) Pirgonda v. Kalgonda AIR 1957 SC 363 , (5) Luxmidas v. Nanabhai, AIR 1964 SC 11 and lastly, the decision of (6) A.K. Gupta & Sons v. D.V.C., AIR 1967 SC 96 lay down that an amendment which would result in fresh allegations and claim of fresh reliefs which are also barred by limitation should not be allowed. The plaintiff's prayer for amendment for the reasons as stated above cannot be allowed. Accordingly, I hold that this suit is barred by res judicata. This plaintiff is not entitled to proceed with the trial of this suit or ask for any relief. All interim orders passed in this suit are vacated. By reason of negligence of all the parties in bringing this suit to trial without taking any notice of the decree in terms of the award there will be no order as to costs.