C. L. Chaudhry ( 1 ) THE petitioner has field the petition under Se ction20 of the Arbitration Act for directing the respondents to file the arbitration agreement in Court and for appointment of an arbitrator in terms of the arbitration agreement between the parties dated 9-10-1985. Ihe petition proceeds on the allegations that the petitioner is carrying on the business of film distribution, exhibition and exploitation of cinematographic films in the territory of Delhi and U. P. The petitioner in the normal course of business finances production of pictures and takes distributionship exhibitors rights in the motion pictures all over the country. ( 2 ) THE respondents are related to each other and in various names of their own family members like wife and sons are producing the pictures under different names and banners, for example respondent No. 2 is the son of respondent No. 1 and Smt. P. Bhagyam is the wife of respondent No. 1 and is basically a household lady but the respondents are even producing pictures in her name and which are benami transactions. The banner under which the respondent No. 1 is operating in the name of his wife is Shree Bhagyalaxmi Movies. These are indirect operations and productions of respondents. Two pictures under the name of durga MAAN and JEETE HA1n SHAAN SE have been produced by the respondents in collusion with their family members including the wife of respondent No. 1 and are trying to defraud their creditors including the petitioner whom they owe nearly Rs. 23,00,000. 00 and are trying to divert their assets. It is further slated that the respondents had approached the petitioner for entering into an agreement with them for taking the sole distributorship rights for the exploitation of picture ek NAI PAHELI and they had entered into an agreement on 9-4-l984. As per the terms of the said agreement clause (2) provided that payment of Rs. 15,00,000. 00 will be made by the petitioner to the respondents for taking the sole distributorship for the territory of Delhi and U. P. A sum of Rs. 5 lakhs was to be paid before the release of the picture and a sum of Rs. 10, lakhs was to be paid against the delivery of 14 prints. The petitioner was entitled to a commission of 15% on all billing till the recovery of gross distribution amount of Rs. 17,50,000. 5 lakhs was to be paid before the release of the picture and a sum of Rs. 10, lakhs was to be paid against the delivery of 14 prints. The petitioner was entitled to a commission of 15% on all billing till the recovery of gross distribution amount of Rs. 17,50,000. 00and thereafter at 10%. The agreement contained an arbitration clause. It is further stated that in pursuance of the said agreement the petitioner made various payments to the extent of Rs. 14 lakhs to the respondents for which the receipts were duly executed by respondent No. 2 for and on behalf of respondent No. 1. The amount of Rs. 2 lakhs was paid on 26-6-1984 by cheque. A sum of Rs. 6 lakhs was paid 5-7-1984 by means of a demand draft dated 4-7-1984. Another sum of Rs. 6 lakhs was paid by means of another demand draft. It is claimed that the petitioner had fulfilled its obligation under the terms of the agreement. ( 3 ) IT is further alleged that the petitioner advanced the amount only on the understanding that the respondents who were to release another picture in the near future titled as mera JAWAB produced by the respondent would not release directly or indirectly and/or exhibit, distribute in any manner whatsoever, the said film till the time the unrecouped advances of the picture ek NAI PAHELI had been cleared and paid to the petitioner. The picture ek NAI PAHELI was exhibited and, exploited in Delhi and U. P. territories but unfortunately the picture was not able to fetch good box office collections, and the total box office collections for the entire period were only Rs. 3,53,185. 75. After going all the adjustments the petitioner remained entitled to a sum of Rs. 13,15,591. 90. It is further claimed that the respondents took full advantage of and utilised the entire advances made by the petitioner for the exhibition of their pictures and also used the said funds for their benefit and for the benefit of the members of their family and also for the production and exhibition of the picture mera JAWAB . Despite various demands made the respondents were not making the payment. ( 4 ) THE petitioner filed a suit No. 108-A/1985 in this court, and got an injuction order restraining the respondents from releasing the picture mera JAWAB . Despite various demands made the respondents were not making the payment. ( 4 ) THE petitioner filed a suit No. 108-A/1985 in this court, and got an injuction order restraining the respondents from releasing the picture mera JAWAB . The respondents were served in the aforsaid suit and they had the knowledge of the injunction order. The respondents approached the petitioner and wanted to make a settlement. A compromise was arrived at on 9-2-1985 which was filed in Suit No. 108-A/1985 and thereafter the suit was dismissed as withdrawn. It is stated that by virtue of the compromise dated 9-2-1985 the respondents 1 and 2 jointly and severally agreed to pay to the petitioner the balance sum of Rs. 6,51,591. 00 within a period of six months from the date of release of the picture mera JAWAB and they further undertook not to release, exhibit or exploit any rights in any film that may be produced by them, in any language, in any size, in future, unless and until they have paid the balance of Rs. 5,51,591. 90 with interest thereon to the petitioner. It was further provided that the above condition will apply not only to cinematographic films produced by the respondents No. 1 and 1 but also to the picture with which they were directly or indirectly associated and under any banner with which they were connected/associated. It is claimed that the pictures jai DURGA MAA and jeete HAIN SHAAN SE are being produced by the respondents themselves and Smt. P. Bhagyam is the wife of respondent No. 1 and is in fact a household lady. All investments are being made by the respondents and they are responsible for the production of the said pictures. The respondents in furtherance of their ulterior motives have given the name of wife of respondent No. 1 in two different pictures in various magazines and as such their action is completely malafide. Both the pictures are being produced by the respondents and more particularly respondent No. 2 is responsible for the production of the said pictures. Smt. P. Bagyam to the knowledge of the petitioner has never involved herself in the production of any picture. It is further stated that the respondents are selling the rights to the various distributors in the market and are creating encumberances upon their pictures in violation of the terms of the compromise. Smt. P. Bagyam to the knowledge of the petitioner has never involved herself in the production of any picture. It is further stated that the respondents are selling the rights to the various distributors in the market and are creating encumberances upon their pictures in violation of the terms of the compromise. Tt is further alleged that the respondents failed to keep up their commitments and make the payments in terms of the compromise dated 9-2-1985. The petitioner filed a suit No. 887/86 on the basis of the agreement dated 9-2-1985 and got an injunction by which the respondents were restrained from releasing, exhibiting or exploiting the rights of pictures jai DURGA MAAN and jeete HAIN SHAAN SE . ( 5 ) IT is further stated that in violation of all undertakings and the agreements the respondents exhibited the picture mera JAWAB . The parties thereafter executed an agreement on 9-10-1985 wherein the respondents confirmed the amounts shown in the earlier compromise and further took additional sum of Rs. 3,00,000. 00 for the completion of the picture khoon KA BADLA KHOON and also agreed that the said compromise will be confirmed by prashad Film Laboratory where the prints were being processed. It was further provided in the agreement that no picture would be released by the respondents or any of their family members directly or indirectly till the time all the dues had been paid to the petitioner. It is stated that the respondents have failed to pay the said dues despite repeated requests and also misused the funds given for the production/progress of the picture khoon KA BADLA KHOON and used for the production/completion of the pictures durga MAAN and jeete HAIN SHAN SE . It is claimed that the respondents are releasing the said pictures and have widely advertised to the same effect. The respondents under the terms of the contract have agreed for the negative conveniant that they cannot release the pictures till the time they have already cleared the dues under the agreement in question as well as the dues under the earlier suits. It is further alleged that the following disputes have arisen between the parties : (A) That the parties are bound by the terms and conditions of the agreement dated 9-10-1985. (b) The petitioner is entitled to receive a sum of Rs. 3,00,000. It is further alleged that the following disputes have arisen between the parties : (A) That the parties are bound by the terms and conditions of the agreement dated 9-10-1985. (b) The petitioner is entitled to receive a sum of Rs. 3,00,000. 00 with interest at the rate of 24% p. a. w. e. f. 9-10-1985 in addition to the sum already claimed by the petitioner in suit No. 887-A/86. (c) The respoundents cannot exploit any picture directly or indirectly including durga MAAN . jeete HAIN SHAAN SE and KHOON KA BADALA KHOON , without making the payments of all the dues of the petitioner. These disputes are referable for arbitration in terms of the arbitration agreement. ( 6 ) ALONGWITH the suit the petitioner has filed an application under O. 39 Rules 1 and 2 of the Code of Civil Procedure read with Section 41 of the Arbitration Act praying that the respondents be restrained from releasing, exhibiting or exploiting the rights in the pictures durga MAAN , jeete HAIN SHAAN SE and khoon KA BADLA KHOON or any other picture in the name of the respondents directly or indirectly interested and/or responsible for the production or exhibition in any manner whatsoever. ( 7 ) THE respondents are contesting the claim of the petitioner. It is stated that Smt. P. Bhagyam is no doubt the wife of respondent No. 1 but she is producing the pictures under her own banner, under the name and style of of Shree Bhagyalaxmi Movies. The respondent No. 1 is the sole proprietor of M/s. P. S. R. Pictures. It is further stated that the petitioner himself has been treating the respondent No. 1, respondent No. 2, Shri P. Anand Rao and Smt. P. Bhagyam as distinct and independent legal entities and has been dealing with them and signing agreements with them in their said capacity. The claim of benami transaction is denied. It is further stated that the agreement dated 22-6-1984 was obtained by practising undue influence and fraud on respondent No. 1. It is further stated that Suit No. 108a/1985 was filed in January, 1985 and the petitioner obtained injunction order regarding release of the picture mera JAWAB and served the respondents at Madras when the picture was going to be released. Mr. It is further stated that Suit No. 108a/1985 was filed in January, 1985 and the petitioner obtained injunction order regarding release of the picture mera JAWAB and served the respondents at Madras when the picture was going to be released. Mr. P. Anand Rao came by air to Delhi and filed an application for vacation of the injunction order but it could not be done with-in the short time. He had to pay a sum of Rs. 7 lakhs and the petitioner got the compromise signed on 9-2-1985 without any legal assistance. It is further stated that the clause in the agreement relating to release of any picture with which they may be directly or indirectly concerned has no binding effect. No third party interest could be bound down. Ms. P. Bhagyam is independently producing two pictures durga MAAN and JEETE HAIN SHAAN SE in her own right and the respondents have nothing to do with them. ( 8 ) I have heard the learned counsel for the parties. The counsel for the petitioner has relied upon the terms of the agreement dated 9-10-1985. The relevant clauses are reproduced below : Clause No. 3 : That similarly the party of the third part hereby agrees and confirm that with the present advance of Rs. 3,00,000. 00 his total liability and the amount due to the party of the first part is Rs. 9,00,000. 00 i. e. Rs. 3,00,000. 00 being the amount advanced by virtue of this agreement and Rs. 6,00,000. 00 being the previous balance due from out of the sum of Rs. 13,15,591. 00 aforementioned as on 30-9-1985. Clause No. 8. That it is further agreed that the whole advance amount of Rs. 9,00,000. 00 shall carry future interest at 24% per annum till repayment. Clause No. 10 : That it is further agreed that the aforesaid total loan amount of Rs. 9,15,691. 00 shall be repaid in full alongwith the interest on or before 30-11-1985 with a gross period of two months i. e. on or before 31-1-1986, or before the release of the picture any where in India or abroad or whichever is earlier. Clause No. 14. 9,15,691. 00 shall be repaid in full alongwith the interest on or before 30-11-1985 with a gross period of two months i. e. on or before 31-1-1986, or before the release of the picture any where in India or abroad or whichever is earlier. Clause No. 14. It is also agreed between the parties that the party of the 2nd part shall not release in any other which may be produced in its own name or in the names of the family members of any other picture with which they are directly or indirectly concerned till the time dues under this agreement has been fully fulfilled and clearance obtained from the party of the first part. ( 9 ) SO far as the claim of the petitioner of Rs. 9. 00 lakhs is concerned it has not been specifically denied by the respondents. The petitioner moved a similar application in petition No. 887/1986 restraining the respondents from releasing the pictures durga MAAN and jeete HAIN SHAAN SE . On 28-4-1986 this court granted the injunction in the following terms : "notice to respondents for 20-5-1986. In the meantime, the respondents are restrained from releasing, exhibiting or exploiting the rights in the pictures "jai DURGA MAA" and "jeete HAIN SHAAN SE" in any manner whatsoever in any part of the country. This order has been necessitated in view of the urgency mentioned in the application and for the reason that the delay in hearing the other party would frustrate the object of ad interim injunction. The plaintiff is directed to comply with the mandatory provisions of law contained in proviso to Rule 3 of Order 39 C P. C. " On 5-11-1986 after hearing the counsel for the parties the injunction order was modified in the following terms : "i have heard the learned counsel for the parties. There is no dispute that the plaintiff is entitled to a substantial amount from the defendants. The security seems to be 2 or 3 films which have to be released by the defendants. In the circumstances, I direct that the defendants will be entitled to release the film jai DURGA MAA" only after making a payment of Rs. 2. 00 lakhs to the plaintiff and a further sum of Rs. 50,000. 00 before the release of the same film in Delhi/u. P. Circuit. In the circumstances, I direct that the defendants will be entitled to release the film jai DURGA MAA" only after making a payment of Rs. 2. 00 lakhs to the plaintiff and a further sum of Rs. 50,000. 00 before the release of the same film in Delhi/u. P. Circuit. The injunction in respect of the picture namely "jeete HAIN SHAAN SE" will continue to operate till further orders. "the main argument of the petitioner is that the respondents could not be allowed to circumvent the agreement by producing a picture in the name of Smt. P. Bhagyam, who is the wife of respondent No. 1. I am afraid I cannot give any positive finding whether the pictures durga MAAN and jeete HAIN SHAAN SE had been produced by Smt. P. Bhagyam in her own right or she has produced the pictures as a benami for respondent No. 1. But prima facie nothing has been placed on the record to indicate that Smt. P. Bhagyam is doing independent business and respondents No. 1 and 2 have no concerned whatsoever in this business. In the reply filed by the respondents they have stated that Smt. P. Bhagyam has taken finances in her own name and that she signed the distribution agreement with various distributors for both the films. Nothing has been placed on the record to prima facie show that she has been doing the business independently and to the exclusion of the respondents. In any case the respondent No. 1 has undertaken not to release any picture produced in its own name or in the name of its family members with which they are directly or indirectly concerned, prima facie I am of the opinion that the respondent No. 1 cannot release the picture jeete HAIN SHAAN SE till the payment is made to the petitioner. However, taking into consideration the circumstances of the case I also feel that the deposit of the entire amount by the respondents before the release of the picture would be quite onerous and number some and may thwart the release of the picture. I think the interest of justice would be fully met if the respondents are directed to deposit an amount of Rs. 3,00,030. 00 before the release of the picture. I think the interest of justice would be fully met if the respondents are directed to deposit an amount of Rs. 3,00,030. 00 before the release of the picture. In the result I direct that the respondent No. 1 will be entitled to release the film jeete HAIN SHAAN SB only after depositing a sum of Rs: 3,00, 000. 00 in this court. The I. A. is disposed of. This judgment also disposes of LA. 2807/1986 in Suit No. 887-A/1986.