Amar Talkies, Sagar v. Apsara Cinema — 1978 DIGILAW 396 (MP)

ORDER C.P. Sen, J. - 1. The plaintiff has preferred this revision against the order of the lower appellate Court vacating the ad interim injunction granted to it by the trial Court restraining the defendants from exhibiting the film "Ganga-ki-Sougandh' in the Apsara Cinema at Sagar. 2. The plaintiff, Amar Talkies and defendant No.1, Apsara Cinema are exhibiting of cinema films in two different talkies at Sagar bearing their respective names. Defendant No. 2-M/s. Prabodh Picturcs and defendant No.3 M/s Veena Raju Pictures are distributors of films. All the parties in this suit are members of the Central Circuit Cine Association, Bhusawal (hereinafter referred to as the C. C.C.A.) and subject to the rules framed by the said Association including the Standard Film Renting Contracts. 3. The plaintiff's case is that on 5-12-75 it entered with a written agreement with the defendant No.2-M/s. Prabodh Pictures for exhibition of the film 'Ganga-ki- Sougandh' in the Amar Talkies at Sagar. Rupees 5,000 were paid in advance by the plaintiff to the defendant No.2 and the balance amount of Rs. 20.000 was to be paid one week in advance at the time of taking delivery of the prints from the producers. The plaintiff is always ready and willing to fulfill the part of its contract, but inspite of subsisting contract with defendant No.2, defendant No.3 M/s. Veena Raju Pictures, which is a sister concern of the defendant No.2, has entered into a written agreement with the defendant No. 1-Apsara Cinema for exhibition of the film 'Ganga-ki-Sougandh' in the Apsara Cinema at Sagar. In fact the prints of the film had been delivered to the defendant No.1 and the film was to be exhibited from 16-2-78. The plaintiff has prayed for the following reliefs:- (i) that, a declaration be given that the plaintiff alone is entitled to exhibit the film "Ganga-ki-Sougandh' in the Amar Talkies at Sagar; (ii) the defendant No. 1 be restrained permanently from exhibiting the film 'Ganga-ki-Sougandh' in the Apsara Cinema; (iii) a mandatory injunction be issued to the defendant Nos. 2 and 3 to allow the plaintiff to exhibit the film 'Ganga-Ki-Sougandh' in the Amar Talkies, as per the contract dated 5-12-75. The plaintiff has also filed an application under Order 39, Rr. 1 and 2, C. P.C. for a temporary injuction restraining the defendants from exhibiting the film 'Ganga-ki-Sougandh' at Sagar. 2 and 3 to allow the plaintiff to exhibit the film 'Ganga-Ki-Sougandh' in the Amar Talkies, as per the contract dated 5-12-75. The plaintiff has also filed an application under Order 39, Rr. 1 and 2, C. P.C. for a temporary injuction restraining the defendants from exhibiting the film 'Ganga-ki-Sougandh' at Sagar. According to the plaintiff, if the temporary injunction is not granted, the good-will earned by it for the last so many years would be seriously damaged and it would loose its reputation all an exhibitor. The loss so sustained could not be compensated in terms of money. If the temporary injunction is not granted, the object of the suit will be frustrated and the plaintiff will suffer an irreparable injury. 4. The learned trial Judge granted an exparte and interim temporary injuction on 8-2-78 restraining the defendants from exhibiting the film 'Ganga-ki-Sougandh' at Sagar. Notices were issued to the defendants to show cause, returnable by 27-2-78. It appears that on 17-2-78 the defendants filed two applications, one was an application under section 34 of the Arbitration Act for stay of the suit on the ground that there is an arbitration clause in the plaintiff's contract date 15-12-75 and that all disputes are to be settled by the Court of Arbitrators mentioned therein. In fact the dispute had already been referred to the Court of Arbitrators and an interim injunction had been issued by the Arbitrators restraining the plaintiff from interfering with the exhibition of the film 'Ganga ki Sougandh' in the Apsara Cinema at Sagar. The second application was filed under section 151 of the Code for vacating the ad interim temporary injunction, The defendants also pleaded that the plaintiff's contract with the defendant No.2, dated 5-12-75, expired by afflux of time on 5-12-77 and as such, the plaintiff is not entitled to any relief on the basis of that contract. The defendants did not file any reply as such to the plaintiff's application for a temporary injunction. 5. The defendants did not file any reply as such to the plaintiff's application for a temporary injunction. 5. The learned trial Judge came to the conclusion that since it has been pleaded by the defendants that the plaintiff's contract came to an end by afflux of time, the arbitration clause also came to an end and, therefore, there was no question of staying the suit, The trial Judge was very much influenced because of the fact that the defendants did not file any reply to the plaintiff's application for a temporary injunction. He also was influenced from the fact that similar contracts executed earlier have been enforced by the parties, although the period of those contracts had expired long back. This being the important question as to whether the plaintiff's contract still subsists or not for agitation and the Court of Arbitrators cannot decide this question. Since there is no dispute between the plaintiff and defendant No. 2., who were parties to the suit contract, the question of arbitration does not arise. Accordingly, the application for stay has been rejected. The trial Judge also came to the conclusion that the suit will be frustrated if the film is allowed to be screened at the Apsara Cinema The obligations of defendant No.2 are binding on defendant No. 3, as per letter dated 29-12-77 and the plaintiff has, therefore, a very strong prima facie case and a very strong point to agitate in the Court; the plaintiff will suffer great damages and the litigation will be multiplied if the injunction is not confirmed. Accordingly, the ad interim injunction was confirmed. 6. In appeal the learned District Judge vacated the temporary injunction granted in favour of the plaintiff. He was of the view that the Civil Suit is barred under section 32 of the Arbitration Act and if indeed the plaintiff desired to challenge the existence or validity of the arbitration agreement or to have the effect thereof be determined by the Court, the proper procedure would have been to file an application under section 33 of the Act. The plaint as framed, is not an application under section 33 of the Act and, therefore, the Court does not get any jurisdiction. He also came to the conclusion that prima-facie the contract of the plaintiff with defendant No. 2, dated 5-2-75 came to an end by efflux of time on 5-12-77. The plaint as framed, is not an application under section 33 of the Act and, therefore, the Court does not get any jurisdiction. He also came to the conclusion that prima-facie the contract of the plaintiff with defendant No. 2, dated 5-2-75 came to an end by efflux of time on 5-12-77. Therefore, the plaintiff has got no prima facie case. The defendants did not file any reply to the application for a temporary injunction because that could have amounted to taking steps in the proceedings and, therefore, their purpose of filing and application under section 34 would have been defeated. This apart the contract between the plaintiff and defendant No.2 was subject to confirmation by the principal, i.e. the Producer of the film 'Ganga-ki-Sougandh'. But, there is nothing on record to show that any such confirmation was received from the Producer. Since the plaintiff's contract expired on 5-12-77, there was no obligation of defendant No.3 under that contract. The defendant No. 3 has entered into a written contract with the Apsara Cinema on 22-1-78 and there is a subsisting contract in favour of defendant No.1 and it has paid Rs. 25,000 for exhibiting the film 'Ganga-ki-Sougandh' and the prints of the film have been delivered to it for exhibition from 16-2-78, It has also been found that if the temporary injunction is refused to the plaintiff, it would not suffer any irreparable injury, because the loss can be easily estimated and compensated in terms of money. Accordingly, the temporary injunction granted by the trial Judge has been vacated. 7. The impugned order of the lower appellate Court is being challenged on the following grounds: (1) The appellate Judge mis-applied S. 32 of the Arbitration Act by holding that the Court has no jurisdiction to enterain the suit when S. 32 has no application here. Accordingly, the temporary injunction granted by the trial Judge has been vacated. 7. The impugned order of the lower appellate Court is being challenged on the following grounds: (1) The appellate Judge mis-applied S. 32 of the Arbitration Act by holding that the Court has no jurisdiction to enterain the suit when S. 32 has no application here. The trial Judge was perfectly justified in refusing stay of the suit under S. 34 of the Arbitration Act because of the complicated questions of law involved in the case; (2) the appellate Judge committed an error in deciding the application for temporary injunction as an original Court and exceeded its jurisdiction by interfering with the discretion properly exercised by the trial Judge; (3) an adverse inference should have been drawn against the defendants for not replying to the application for a temporary injunction, as the reply to such an application does not amount to taking steps in the proceedings; (4) the plaintiff's contract with defendant No.2 is still subsisting and the appellate Judge committed an error in relying on the amended clause 9 (ii) (a), which came into force on 1-4-77, and should have applied the rule which was then prevalent. 8. The defendants supported the order of the appellate Judge and submitted that the order is perfectly valid and legal order and the appellate Judge committed no error in the exercise of his jurisdiction and there can be no interference with it in a revision. It is further submitted that no irreparable injury would be caused to the plaintiff by the impugned order. 9. First of all it has to be considered whether the suit is barred in view of section 32 of the Arbitration Act. Section 32 provides that 'notwithstanding any law for the time being in force no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award, nor shall any arbitration agreement or award be set aside, amended, modified or in any way affected otherwise than as provided in this Act'. This can be done by filing an application to the Civil Court under section 33 of the Act. But, here no body has challenged the existence, effect or validity of the arbitration agreement, nor the plaintiff wants the arbitration agreement, to be amended. This can be done by filing an application to the Civil Court under section 33 of the Act. But, here no body has challenged the existence, effect or validity of the arbitration agreement, nor the plaintiff wants the arbitration agreement, to be amended. modified or set aside As such, section 32 has no application whatsoever in the present suit and the plaintiff's suit is not barred by this section, However, it may be mentioned that the defendants did not press their application for stay of the suit under section 34 of the Arbitration Act before the lower appellate Court. Therefore, it is not necessary to disturb the finding of the trial Judge on this application. However, it may be pointed out that the trial Judge was under a mis-apprehension in rejecting the application. He has relied on a decision of the Single Bench of this Court in Hindustan Steel Limited, Bhilai v. M/s. Ramdayal Dau and Co. Durg 1972 JLJ 520 and a decision of the Supreme Court in The Union of India v. Kishorilal Gupta AIR 1959 SC 1362 There can be no doubt that if the existence of the contract itself is in dispute, that question has to be decided by the Civil Court. In the case of Hindustan Steel Limited, Bhilai (supra), there was allegation that no valid contract containing the arbitration clause existed as it was brought about by fraud. In the Supreme Court case of The Union of India v. Kishorilal Gupta (supra), the contract was said to be non est, as it was brought into being illegally and was, therefore, void ab initio. Here, that is not the position. The existence and validity of the contract of the plaintiff is not under challenge. What the defendants contended is, that the contract came to an end by efflux of time on 5-12-1977. Here, that is not the position. The existence and validity of the contract of the plaintiff is not under challenge. What the defendants contended is, that the contract came to an end by efflux of time on 5-12-1977. The trial Judge has not cared to look into the Clause 21 of the Standard Film Renting Contract, which provides that all disputes which may arise between the Exhibitor and Distributor, whether during the currency or after the determination of there presents and whether in relation to the interpretation of these presents or to any act or omission of either party to the dispute or as to any acts which ought to be done by the parties in dispute or either of them or in relation to any other matter whatsoever touching these presents or the transaction referred to herein shall be referred to C.C.C.A. for settlement and decision or to the Court of Arbitration, according to Rules and Regulations relating thereto formed by the Association, and in force at the time of filing of the dispute The decision of the Association or the Award of the Court of Arbitration shall be binding on the parties to the dispute as if its terms were incorporated in these presents. It means that although the contract came to an end by efflux of time, any dispute arising under that contract is still to be decided either by the Association or by the Court of Arbitration. The Supreme Court in Michael Golodetz v. Serajuddin and Co. AIR 1963 SC 104 has held that 'the Court ordinarily requires the parties to resort for resolving disputes arising under a contract to the tribunal contemplated by them at the time of the contract. That is not because the Court regards itself bound to abdicate its jurisdiction in respect of disputes within its cognizance; it merely seeks to promote the sanctity of contracts, and for that purpose stays the suit. The jurisdiction of the Court to try the suit remains undisputed; but the discretion of the Court is on grounds of equity interposed. 10. It is now well settled that the grant of a temporary injunction under the powers conferred by Order 39, rules 1 and 2 of the Code is a matter of discretion of the Judge trying the suit. 10. It is now well settled that the grant of a temporary injunction under the powers conferred by Order 39, rules 1 and 2 of the Code is a matter of discretion of the Judge trying the suit. If the Judge rightly appreciates the facts and applies to those facts the true principles, that is a sound exercise of judicial discretion and the Court hearing an appeal from such an order would not ordinarily interfere. (See Durga Das v. Nalin Chandra Nandan. It has to be seen whether the trial Judge has rightly appreciated the facts and applied those facts the true principles. As pointed out earlier, the trial Judge has not correctly decided the application for stay under section of the Arbitration Act by misconstruing and in applying the decision of this Court and that of the Supreme Court, which have no application to the facts of the present case. The second mistake committed by the trial Judge in holding that the suit contract of the plaintiff is still subsisting because similar earlier contracts between the parties are still being enforced, though those contracts also came to an end by efflux of time. It has been rightly pointed out by the learned District Judge that if the distributor allowed exhibition of certain films even on the basis of a contract which had already expired, that would not mean that there is a general rule that would have been binding on the parties. It has to be seen what are the terms of the suit contract. If the contract provided that the suit contract would automatically terminate on efflux of time, it was not necessary for defendant No.2 to revoke the suit contract by notice. The trial Judge erred in holding that such a revocation was necessary, 11. Clause 9 (ii) (a) of the Standard Film Renting Contract is as under: "The Distributor, at the option of the exhibitor to be exercised by the exhibitor in writing any time prior to the date of expiry of the life of the contract, shall terminate the contract as from the date of expiry and shall refund the deposit and/or advance/s received, within a period of 3 months from the date of expiry of the contract. In any case, the amount of deposit and for advance, if any, received against the picture shall be: refunded to the exhibitor prior to the release of the picture. In case the exhibitor fails to exercise his option in writing, the life of the contract shall stand extended for a further period of one year ipso facto (and on expiration of the extended period the contract shall stand automatically cancelled)." The bracketed portion has been added by subsequent amendment, which came into force on 1-4-77. In the suit contract no time has been prescribed for execution of the contract and, therefore, the contract would be for one year under clause (3). Under this clause 9 (ii) (a) the contract would be automatically extended by one more year if the exhibitor did not terminate the, contract by giving written notice before the expiry of the first year. It is not possible to read this clause as to hold that the contract automatically gets extended every year unless notice of termination is given by the exhibitor. So even reading the un-amended clause, as it existed on 5-12-75, the plaintiff's contract expired by efflux of time on 5-12-77. as has been held by the District Judge. The bracketed portion in that clause has been added by way of a clarification to remove any doubt Under clause 21, all the disputes are to be decided by the Association or by the Court of Arbitration, as per the Rules in force at the time of filing of such a reference. As such, the amended clause 9 (ii) (a) would apply, which leaves no matter of doubt that prima facie the plaintiff has not subsisting contract after 5-12-77. There being no prima-facie case, the plaintiff is not entitled to a temporary injunction. 12. It is a settled principle that a temporary injunction can be granted if the plaintiff has a prima facie case, the balance of convenience is in plaintiff's favour and the plaintiff would suffer an irreparable injury if the injunction is not granted. Recently, the House of Lords in American Cyanamid Co. 12. It is a settled principle that a temporary injunction can be granted if the plaintiff has a prima facie case, the balance of convenience is in plaintiff's favour and the plaintiff would suffer an irreparable injury if the injunction is not granted. Recently, the House of Lords in American Cyanamid Co. v. Ethicon Ltd. (1975) 1 All ER 504, has held that 'there was no rule of law that the Court was precluded from considering whether, on a balance of convenience, an interlocutory injunction should be granted unless the plaintiff succeeded in establishing a prim facie case or a probability that he would be successful at the trial of the action. All that was necessary was that the Court should be satisfied that the claim was not frivolous or vexatious, i.e. that there was a serious question to be tried. This case clearly made a departure from the settled rule that the plaintiff has to making out a prima facie case. This case has been relied on by this Court in Shankarlal Rathore v. State of M.P. 1978 JLJ 51 . But the decision of the House of Lords has since been criticised, distinguished and explained in several cases by the Court of appeal. Lord Denning in Fellowes and mother v. Fisher (1975) 2 All ER 829, has this to say; "The American Cyanamid case was only reported a little while ago, but we have already bad two cases in which its effect has been canvassed in this Court. It has perplexed the profession. It has been criticised in the New Law Journal. So much that counsel have appealed to us for guidance. "It was a case of infringement of the patents. The case was much too difficult and complicated for the House to deal with is interlocutory proceedings, The interlocutory application was heard for 3 days by the trial Court, for 8 days by the Court of Appeal and for 12 days by the House of Lords. So it ought to go for trial. But meanwhile the best thing to do was to grant an interlocutory injunction so as to maintain the status quo until the trial. The difficulty has arisen because some of the statements made in the House appear to undermine all we had previously understood. So it ought to go for trial. But meanwhile the best thing to do was to grant an interlocutory injunction so as to maintain the status quo until the trial. The difficulty has arisen because some of the statements made in the House appear to undermine all we had previously understood. Previously the understanding of the profession was that, in order to get an interlocutory injunction, the plaintiff had to make out a prima facie case. In support of this practice of the profession there are decisions of the House of Lord more than 100 years old. The clearest and fullest statement of the principle was made in 1965 in the House of Lords itself in J.T. Stratford and Son Ltd. v. Lindley (1964) 3 All ER 102. But this case has not been referred to in the American Cyanamid case. Therefore, the case has to be read in the light of the peculiar circumstances of that case." 13. Now, I have to see whether the plaintiff would suffer irreparable injury if the temporary injunction is not granted. The trial Judge has not given any finding that any irreparable injury would be caused to it, but only held that the plaintiff would suffer great damages. That is not the requirement of law. P.V. Dixit, J. (as he then was) in Mohd. Latif Choudhary v. Smt. Amritkala Bayeja has held. "In a case where the granting of temporary injunction would virtually amount to decreeing it in a suit for perpetual injunction and likewise refusing to grant it would have the effect of dismissing it, the plaintiff seeking an order of temporary injunction pending the suit, must not only make out a prima facie case but also satisfy the Court that irreparable injury would be caused to him if the temporary in-junction is not granted." This was a case regarding showing of a film and a temporary injunction was sought for restraining the defendant from exhibiting the film. It was held that no irreparable injury would be caused by refusing the injunction because the damages that would be suffered by the plaintiff could be realised from the defendant. It was held that no irreparable injury would be caused by refusing the injunction because the damages that would be suffered by the plaintiff could be realised from the defendant. There was no difficulty in determining the amount that may be found due to the plaintiff for the realisation from the exhibition of the film from the accounts that the distributors have to submit to the producers under the contract and these of the exhibitors themselves. On the other hand, considerable inconvience and injury would be caused to all the parties if the distribution and exhibition of the picture in the Central India territory is restrained for a considerable time. It is common knowledge that in cinema trade simultaneous release of any picture at several places is of considerable importance in order to secure that the success and popularity of a picture in any area is not marred or affected by the reception it has received or the reputation it has gained in any other area. There is thus a risk of the 'exhibition value' of the picture going down in the Central India territory by the reports about it in places where it has already been exhibited or is: being exhibited. Therefore, the order of the lower appellate Court granting the temporary injunction was vacated, Hence also apart from the accounts, the defendant No. 1 is required to maintain a statement of the gross receipts regarding exhibition of the film 'Ganga-Ki-Sougandh'. The defendant No. 1 ill also required to furnish returns of entertainment tax which is subject to supervision and scrutiny of the Government. As such, the District Judge was justified in holding that no irreparable loss or injury would be caused to the plaintiff in refusing the injunction. The defendant No.1 has already parted with Rs. 25.000/-, He has already received the prints of the film and was to exhibit the film from 16-2-1978, but for the temporary injunction-granted by the trial Judge. The defendant No.1 has got a subsisting contract and in fact the injury suffered by it would be much greater than the injury, if any that may be suffered by the plaintiff. 14. It is true that the defendant did not file any reply to the application for a temporary injunction. The defendant No.1 has got a subsisting contract and in fact the injury suffered by it would be much greater than the injury, if any that may be suffered by the plaintiff. 14. It is true that the defendant did not file any reply to the application for a temporary injunction. The District Judge held that this was because if any reply was filed, it amounted to taking steps in the proceedings and would have defeated the defendant's application for stay under section 34 of the Arbitration Act. This view does not seem to be correct. A Division Bench of this Court in Sansarchand v. State of M.P. 1961 JLJ 525= AIR 1961 MP 322 has held that: "The filing of a reply to the application of the plaintiff for securing a temporary injunction and arguing the said application itself does not amount to "taking other steps in the proceedings" by the defendant within the meaning of section 34. Opposing the application is not an unequivocal indication on behalf of the defendant to choose to give up his right under the agreement to refer the dispute to arbitration," Though, no reply was filed, the plaintiff had filed an application under S. 151 of the Code for vacating the ad interim injunction and in which all the facts have been pleaded by the defendants. Moreover, the defendants were given notice to file their reply by 27-2-1978. In fact the application for temporary injunction was considered on an earlier date, i.e. on 17-2-1978. Therefore, the reply to that application might not have been filed. Non-filing of the reply is of no effect because the defendants have pleaded all the facts in their application under S. 151 of the Code. 15. The balance of convenience is also not in favour of the plaintiffs. The defendant No.1 has already received the prints from the producer after paying Rs. 25,000 to the defendant No.3. The film was to be exhibited from 16-2-1978, but this could not be done because of the temporary 'injunction granted by the trial Court: In their application for temporary injunction there is no pryayer for temporary mandatory injunction by the plaintiff in order to enable it to exhibit the film Ganga-Ki-Sougandh' in the Amar Talkies at Sagar. Such a prayer could have been made when in the suit the plaintiff has claimed a mandatory injunction against the defendant Nos. Such a prayer could have been made when in the suit the plaintiff has claimed a mandatory injunction against the defendant Nos. 2 and 3 to allow the plaintiff to exhibit the film in the Arnar Talkies. The grant of temporary injunction would result in not showing of the film till the decision of the suit, which may take years before it is finally decided. In the mean while the film will become stale and will loose its present market and after some years there will not be much demand for this film, as by that time the film would have been exhibited in different centres in India and opinion regarding the film would be formed By refusing temporary injunction, the plaintiff's claim in suit is not frustrated. In case he succeed in this suit, he would be entitled to damages, which can be ascertained and there will be no irreparable injury to the plaintiff. 16. The counsel for the non-applicants-defendants pleaded that injunction cannot be granted under Section 41 of the Specific Relief Act to prevant breach of contract, the performance of which is not specifically enforced. Section 14 (1) (a) provides that a contract cannot be specifically enforced for the non-performance of which compensation in money is an adequate relief. Section 10, Explanation II, provides that 'the breach of a contract to transfer movable property can be compensated in terms of money unless the property is not an ordinary article of commerce, or is of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market', It is true that all these principles have to be kept in view for granting a permanent injunction and if a permanent injunction cannot be granted, perhaps a temporary injunction will be refused. Section 37 (1) provides that temporary injunctions are regulated by the Code of Civil Procedure. Section 41, which occurs in the Chapter relating to perpetual injunction, has no application as much to the temporary injunction. The Code is not exhaustive and that the Court has inherent jurisdiction to act ex debito justitiee. 17. The revision, therefore, fails and is dismissed with costs. Counsel's fee Rs 100, if certified.