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2003 DIGILAW 117 (MAD)

L. Suresh v. P. Ravi & Another

2003-01-30

D.MURUGESAN, S.JAGADEESAN

body2003
Judgment :- D.MURUGESAN, J. This Original Side Appeal is filed under Order XXXVI Rule 11 of the Original Side Rules read with Clause 15 of the Letters Patent, challenging the order dated 12.8.2002 and modified by order dated 27.11.2002 in O.A.No.409 of 2001 in C.S.No.327 of 2001. 2. Following are the few facts that are relevant for the disposal of this appeal. A Tamil picture titled "Rahasiya Police 115" (hereinafter referred to as the "said picture") was produced by one B.R.Panthalu and the "said picture" was released on 11.1.68 through various distributors. The said B.R.Panthalu entered into an agreement on 29.9.71 with M/s Sandhya Movies, for assigning the lease hold negative rights of exhibition, distribution and exploitation of the picture for the areas of Union of India, Island of Ceylon, Malaysia, Singapore, Hong Kong and Mauritius for a period of 30 years from the date of the agreement. The relevant clause in the said agreement for the disposal of the appeal is clause 13, which reads thus:- "At the end of the period of 30 years stipulated the transferees shall hand over back to the Producers the negatives of the picture in good condition, subject to the normal wear and tear. However, the transferees shall have an option to review the leasehold negative rights of the picture for another period of 20 years on and additional payment of Rs.1,000/- payable to the Producers on or before 31st December 2000." In terms of the said agreement, the transferee had an option to renew the leasehold negative rights of the picture for a period of 20 years on an additional payment of Rs.1,000/- payable to the producer on or before 31.12.2000. 3. Subsequent to the said agreement dated 29.9.71, the said M/s Sandhya Movies entered into a further agreement with the appellant/plaintiff herein on 2.4.73. By the said agreement, the appellant/plaintiff was given the leasehold negative rights for the picture for a period of 28 years and 5 months from 2.4.1973 to 28.9.2001. The relevant clauses in the said agreement for the disposal of the appeal are as follows:- "7. By the said agreement, the appellant/plaintiff was given the leasehold negative rights for the picture for a period of 28 years and 5 months from 2.4.1973 to 28.9.2001. The relevant clauses in the said agreement for the disposal of the appeal are as follows:- "7. The transferees hereby step into the rights of the producers and become the owners of the leasehold negative rights of the picture for a period of 28 years and 5 months i.e. from 2.4.1973 to 28.9.2001 for the areas of the entire Union of India, Union of Burma, Island of Ceylon, Malaysia, Singapore, Hong Kong and Mauritius on and from this date subject to the condition set hereinabove. 8. All the rights of the transferors in the agreement enclosed as per schedule are hereby duly assigned absolutely and without any reservations in favour of the transferees. 12. At the expiry of the stipulated period the transferees shall hand over to the transferors the negative of the picture in good condition subject to the normal wear and tear." 4. It is the case of the appellant/plaintiff that even prior to the expiry of the agreement, the appellant/plaintiff by letter dated 23.4.99 expressed its willingness to renew the leasehold rights for a further period of 20 years by enclosing a cheque for Rs.1,000/- to the producer. Since the first respondent/defendant refused to accept the said payment, the appellant sent another letter dated 6.12.2000 enclosing a demand draft for a sum of Rs.1,000/- to the first respondent. The said letter was returned, as the first respondent did not acknowledge the same. Hence, the appellant filed C.S.No.327 of 2001 before this Court for a judgment and decree against the respondents declaring that the appellant is entitled for renewal of the leasehold negative rights of the "said picture" for a further period of 20 years from 29.9.2001 upto 28.9.2021, for a mandatory injunction directing the defendants to renew and grant the negative rights of the "said picture" in favour of the appellant for a period of 20 years from 29.9.2001 and for a permanent injunction restraining the respondents from exhibiting, distributing or exploiting the "said picture". Pending the suit, the appellant also filed an application in A.No.409 of 2001 for an order of ad interim injunction restraining the respondents from in any manner dealing with exhibiting, distributing and exploiting the "said picture". Pending the suit, the appellant also filed an application in A.No.409 of 2001 for an order of ad interim injunction restraining the respondents from in any manner dealing with exhibiting, distributing and exploiting the "said picture". By order dated 8.8.2001, the learned Judge has granted the ad-interim injunction as prayed for by the appellant till 3.10.2001. The application was heard after a counter affidavit was filed on behalf of the respondents. After hearing the learned counsel for appellant and the respondents, the learned Judge by order dated 12.8.2002 dismissed the said application. On further posting of the matter under the caption "for being mentioned", the amount of Rs.36,000/- mentioned in the order dated 12.8.2002 was found to be a typographical error and hence, the learned Judge directed the said amount of Rs.36,000/- to be read as Rs.66,000/- by his subsequent order dated 27.11.2002. The present appeal is filed challenging the above orders of the learned Judge. 5. Mr.T.R.Rajagopalan, learned counsel for the appellant would submit that a right of option is provided under clause 13 of the agreement dated 29.9.71 for the transferee to renew the leasehold negative rights of the "said picture" for another period of 20 years on an additional payment of Rs.1,000/- only. Though the said agreement was entered into between one B.R.Panthalu and M/s Sandhya Movies, the transferee M/s Sandhya Movies had further entered into an agreement with the appellant on 2.4.73 by assigning the leasehold negative rights of exhibition, distribution and exploitation of the "said picture" in the entire area covered by the agreement. In fact, all the terms and conditions governing the parties to the agreement dated 29.9.71 were transferred to the appellant as per clause 8 of the agreement dated 2.4.73. Though the agreement dated 2.4.73 refers to a period of 28 years and 5 months i.e. from 2.4.73 to 28.9.2001 for the appellant to have the leasehold negative rights of the picture as per clause 7 of the agreement, at the expiry of the stipulated period, the appellant shall hand over the negative of the picture to M/s Sandhya Movies as per clause 12 of the agreement. Both the said clauses should be read along with clause 8 of the said agreement whereby all the rights of M/s Sandhya Movies in the agreement dated 29.9.71 were assigned absolutely and without any reservation in favour of the appellant. Both the said clauses should be read along with clause 8 of the said agreement whereby all the rights of M/s Sandhya Movies in the agreement dated 29.9.71 were assigned absolutely and without any reservation in favour of the appellant. In such event, the right to exercise the option for renewal as provided under clause 13 of the agreement dated 29.9.71 is also available to the appellant. Rightly the appellant had exercised such power in its letter dated 23.4.99 and a further letter dated 6.12.2000. When the option was exercised in terms of the agreement, the appellant was entitled to the leasehold negative rights for a further period of 20 years. The amount of Rs.1,000/- mentioned in the agreement is only to indicate the exercise of option and the actual lease amount shall be determined after the acceptance from the producers. However, the learned Judge on erroneous construction of clause 13 has dismissed the application on the ground that the exercise of option ought to have been made by making the payment of not only a sum of Rs.1,000/- but also the lease amount of Rs.65,000/-, in all Rs.66,000/- and mere payment of Rs.1,000/- cannot be construed as proper exercise of option. 6. Mr.R.Muthukumaraswamy, learned Additional Advocate General appearing for the respondents would contend that parties are governed by the terms and conditions of the agreement. The agreement dated 29.9.71 was between the producer of the "said picture" and M/s Sandhya Movies. In the subsequent agreement dated 2.4.73, M/s Sandhya Movies had assigned the leasehold negative rights in favour of the appellant only for a period of 28 years and 5 months i.e., from 2.4.1973 to 28.9.2001. In terms of clause 12 of the agreement dated 2.4.73, the appellant should necessarily hand over the negative of the picture to M/s Sandhya Movies in good condition subject to the normal wear and tear. The appellant has no right of option for renewal of leasehold negative rights. In the absence of such right, the appellant is not entitled to seek for the ad interim injunction as prayed for in the application which has been rightly rejected by the learned Judge. The learned Additional Advocate General would further contend that in any case, the terms and conditions of the agreement should be strictly construed as those terms and conditions are binding on the parties to the agreement. The learned Additional Advocate General would further contend that in any case, the terms and conditions of the agreement should be strictly construed as those terms and conditions are binding on the parties to the agreement. Nothing could be added to or deleted from the clauses of the agreement. Even assuming that as per clause 8 of the agreement dated 2.4.73, all the rights available to M/s Sandhya Movies are assigned in favour of the appellant, condition contained in clause 13 shall also be equally applicable wherein it is provided that in order to exercise the option, an additional sum of Rs.1,000/- shall be paid on or before 31.12.2000. The said amount of Rs.1,000/- is in addition to a sum of Rs.65,000/- which was fixed as lease amount. In the absence of advancement of the entire lease amount of Rs.65,000/- plus Rs.1,000/-, it cannot be contended that the appellant had properly exercised its option in terms of clause 13. Hence, in the absence of any proper exercise of option and the corresponding acceptance of the same by the respondents, the appellant is not entitled to the ad interim injunction as prayed for. Hence, the learned Additional Advocate General submitted that the learned Judge has correctly dismissed the application. 7. On the above pleadings and the submissions of the respective senior counsel, the following points arise for our consideration. (1) Whether the appellant/plaintiff is entitled to make an option for renewal of the leasehold negative rights? If so, (2) whether the amount of Rs.1,000/- mentioned in clause 13 of the agreement dated 29.9.71 is in addition to a sum of Rs.65,000/- fixed as lease amount in the agreement? and, (3) whether the option exercised by the appellant/plaintiff to have the leasehold negative right by making only a payment of Rs.1,000/-, could be entitled to renewal as per clause 13 of the agreement dated 29.9.71? The terms and conditions of the leasehold rights etc., have been drawn in the form of a written agreement. Parties are governed by the terms and conditions. The terms and conditions of the leasehold rights etc., have been drawn in the form of a written agreement. Parties are governed by the terms and conditions. In the agreement dated 29.9.71 entered into between one B.R.Panthalu and M/s Sandhya Movies, the leasehold right of exhibition, distribution and exploitation of the "said picture" in question for the areas of Union of India, Island of Ceylon, Malaysia, Singapore, Hong Kong and Mauritius were given to M/s Sandhya Movies for a period of 30 years from the date of the agreement. By virtue of the said agreement, M/s Sandhya Movies are entitled to the leasehold rights for the purpose and areas detailed thereunder. In the absence of any restrictive clause in the agreement, M/s Sandhya Movies transferred the leasehold rights to and in favour of the appellant by subsequent agreement dated 2.4.73. In fact, whatever leasehold rights given to the said M/s Sandhya Movies by the producer viz., B.R.Panthalu, were transferred to and in favour of the appellant by the said agreement, as could be seen from clause 8 of the agreement which states that "all the rights of the transferors in the agreement enclosed as per schedule are hereby duly assigned absolutely and without any reservations in favour of the transferees." By virtue of clause 8, the appellant is entitled to exercise its option for renewal of leasehold negative rights forthwith in terms of clause 13 of the agreement dated 29.9.71. Hence, we hold the first point in favour of the appellant. 8. In so far as the points 2 and 3, it is seen that as per agreement dated 29.9.71, the lease is for a period of 30 years from the said date and the same shall expire on and from 29.9.2001. As per clause 13 of the said agreement, the transferee shall have an option to renew the leasehold rights for a further period of 20 years on an additional payment of Rs.1,000/- payable to the producers on or before 31.12.2000. As per clause 13 of the said agreement, the transferee shall have an option to renew the leasehold rights for a further period of 20 years on an additional payment of Rs.1,000/- payable to the producers on or before 31.12.2000. In order to claim the right of renewal under the said clause, the transferee must establish three things (1) that the transferee had the right of renewal, (2) that the transferee exercised the option to renew the leasehold negative rights for a further period of 20 years by making an additional payment of Rs.1,000/- payable to the producer and (3) that such payment was made on or before 31.12.2000. In so far as the compliance of the first condition referred to above, we have held that pursuant to the clause 8 of the agreement dated 2.4.73 entered into between M/s Sandhya Movies and the appellant, the appellant is entitled to opt for renewal of the leasehold negative rights of the "said picture". Coming to the compliance of conditions 2 and 3 above, as per clause 4 of the lease agreement dated 29.9.71, the transferee shall pay a sum of Rs.65,000/- as lease amount to the transferor viz., the producer of the picture. In the said agreement, no clause is incorporated enabling the parties to renew the agreement on an option by the transferee by merely making a payment of Rs.1,000/-, leaving the fixation of the actual quantum of lease amount after the option was accepted. While reading the clauses of the agreement, the Court shall not either add or delete any condition into it than what is mentioned therein, more particularly, when the conditions are not vague but clear and unambiguous. A reading of clause 13 would appear to us that it refers to the payment of Rs.1,000/- only as an additional amount. The word "additional" would assume importance to mean that the said amount shall be payable by the transferee to the producer in addition to the lease amount fixed in clause 4 of the agreement. Only when the transferee makes the payment of Rs.66,000/- while exercising the option to renew, it can be considered as an option made in compliance of clause 13 of the agreement. Only when the transferee makes the payment of Rs.66,000/- while exercising the option to renew, it can be considered as an option made in compliance of clause 13 of the agreement. In the absence of such compliance, it cannot be contended that there was a real option exercised by the transferee, the appellant in this case, for renewal of the leasehold negative rights of the "said picture". 9. Our attention was also drawn to the judgment of a Division Bench of this Court in "B.R.RAVISHANKER, PROPRIETOR, PADMINI PICTURES, MYLAPORE v. M.R.KRISHNAN AND ANOTHER (1998-2-L.W.156)". The facts of that case are almost similar to the facts of the present case. In fact, the said judgment arose out of a final judgment and decree of the suit whereas, in the present appeal, the matter arises as against the order in the application in O.A.No.409 of 2001 in C.S.No.327 of 2001. In that case, a similar condition in clause 13 of the agreement was considered by the Court wherein an option was given to the transferee to renew the leasehold rights for a further period of 20 years by making the additional payment of Rs.1,000/-. While construing the word "additional payment of Rs.1,000/-", the Court in paragraph 19 of the judgment has held as follows:- "As can be seen from clause (13) of the agreement, it cannot be said that additional payment of Rs.1,000/- contemplated was only to get a right to exercise option on further negotiation as to the consideration etc. The argument of the learned senior counsel for the appellant that the additional payment of Rs.1,000/- only conferred a power on the respondent to express his option but actually option could be exercised only on settlement of consideration by mutual consent, cannot be accepted. In clause (13) it is clearly stated that the respondent shall have an option to renew the leasehold negative rights of the picture for another period of 20 years on additional payment of Rs.1,000/- on or before 31st December, 1995. It does not speak of further negotiation between the parties as to consideration or otherwise." We are entirely in agreement with the said finding of this Court. It does not speak of further negotiation between the parties as to consideration or otherwise." We are entirely in agreement with the said finding of this Court. In fact, it should be noticed that the appellant in the said appeal, who is the first respondent in this appeal, was also a party to the similar agreement dated 5.12.71 which came up for consideration before the Division Bench of this Court. 10. In view of the above, we do not find any merit in the contentions of the learned senior counsel for the appellant. Accordingly, we hold that the appellant has not exercised its option in terms of clause 13 of the agreement and in the absence of payment of the lease amount in a sum of Rs.65,000/- and an additional amount of Rs.1,000/-, the appellant cannot be considered as said to have exercised an option under the said clause seeking for an order of injunction against the respondents. 11. For all the above reasons, we do not find any merit in the appeal and accordingly, the appeal is dismissed. There will be no order as to costs. Consequently, C.M.P.No.932 of 2003 is also dismissed.