M/S. ZEE TELEFILMS LTD. (NOW KNOWN AS ZEE ENTERTAINMENT ENTERPRISES LTD.) versus SURESH PRODUCTIONS & ORS. on 25 February 2020

M/S. ZEE TELEFILMS LTD.(NOW KNOWN AS ZEE ENTERTAINMENTENTERPRISES LTD.)

v.

SURESH PRODUCTIONS & ORS.

(Civil Appeal No.1716 of 2020)

FEBRUARY 25, 2020

[ASHOK BHUSHAN AND NAVIN SINHA, JJ.]

Cause of Action: Right to sue – Accrual of, when – On facts,plaintiffs assigned telecasting right of 16 schedule films byassignment deeds dated 23.12.1994 for a period of 9 years in favourof defendant Nos.5 to 8 as requested by defendant No.4 – Issuanceof public notice in Film Magazine by plaintiff regarding the 16 films– Claim by defendant N o.1 that they acquired satellite broadcastingrights of the 16 Hindi films from defendant No.2, by assignmentdeed dated 21.3.1997 for a period of 99 years – Suit by plaintiffsin 2003, for declaration that defendant Nos. 1 to 4 have no mannerof right, title and interest in the Copyright in respect of the scheduledfilms, and to pass a decree of perpetual injunction against defendantNos.1 to 4 – Trial court holding that the cause of action arose in theyear 1995 itself when the plaintiff got knowledge of claim of thefirst defendant over the given films and plaintiffs chosen to file thesuit in the year 2003 in respect of agreement dated 10.10.1994 –Dismissal of suit as barred by limitation – Cause of action to aplaintiff to file a suit accrues when there is a clear and unequivocalthreat to infringe a right of the plaintiff – On facts, plaintiff havingalready assigned their right for a period of 9 years by assignmentdeed dated 23.12.1994, there was no cause of action during thesaid period of 9 years – When the plaintiffs had already partedwith their right of telecasting films on 23.12.1994 there could nothave been any threat to their right in the year 1995 – Thus, the suitfiled by the plaintiffs is within limitation – Order passed by the HighCourt upheld.

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ADismissing the appeal, the Court

HELD: 1.1 When the plaintiffs assigned their rights todefendant Nos.5 to 8 on the request of defendant No.4 for a periodof 9 years, plaintiffs having parted with their satellite rights couldnot have claimed any right for telecasting during the said periodBof 9 years. Inter se dispute between defendant Nos.4 and 3 whichbegun with filing suit in Mumbai there could not have been anycause of action for the plaintiffs to file a suit claiming telecastingrights for themselves. Furthermore, it was the case of thedefendant No.3 itself that dispute between defendant No.3 and 4subsided when the suit filed by defendant No.3 was returned inCthe year 1995 itself. It was submitted by the counsel for theappellants that even though DS filed a police complaint in theyear 1995 itself with regard to the alleged assignment dated10.10.1994 but no further proceedings were taken by DSthereafter. The trial court in its judgment has also returned aDfinding that the assignment dated 10.10.1994 by DS in favour ofdefendant No.4 and assignment dated 17.10.1994 by defendantNo.4 to 3 has not been proved. [Para 14][983-C-F]

1.2 The trial court by its judgment dismissed the plaintiffs’suit having accepted the case of the plaintiffs regardingEassignment of telecasting rights of said schedule films i.e.assignment of 23.12.1994 in favour of defendant Nos. 5 to 8 atthe request of defendant No.4 for 9 years. The plaintiffs’ claimfor the right of schedule films arose only after 22.12.2003. Theyhaving parted with their right, there was no real threat to theirright by any inter-se dispute between defendant Nos.4 and 3 orFother defendants. It was on 22.12.2003 that plaintiffs again becameentitled to assign telecasting rights of the aforesaid 16 films afterthe expiry of the period of 9 years of assigning the telecastingright of 16 films to defendant Nos.5 to 8 on the request of thedefendant No.4 on valuable consideration. [Para 15][984-B-D]G1.3 The trial court had observed that cause of occasion arosein the year 1995 itself when the plaintiff got knowledge of claimof the first defendant over the given films and plaintiffs havechosen to file the suit in the year 2003 in respect of agreement H

ENTERPRISES LTD.) v. SURESH PRODUCTIONS

dated 10.10.1994. The trial court further held that plaintiffs satover their rights for eight long years, hence, suit is barred bytime. The suit which was filed in the year 1995 by defendant No.3against defendant No.4 in the Small Causes Court, Mumbai whereassignments dated 10.10.1994 and 17.10.1994 were referred togot dismissed in the year 1995 itself as Small Causes Court hadno jurisdiction to consider the claim of defendant No.3. [Para16][984-E-F]

1.4 Cause of action to a plaintiff to file a suit accrues whenthere is a clear and unequivocal threat to infringe a right. Theplaintiff having already assigned their right for a period of 9 yearsby assignment deed dated 23.12.1994, there was no cause of actionduring the aforesaid period of 9 years. When the plaintiffs hadalready parted with their right of telecasting films on 23.12.1994there could not have been any threat to their right in the year1995. Thus, in view of the pleadings on the record and facts ofthe present case, suit filed by the plaintiffs is well within limitation,the finding of the High Court that the suit is within limitation isbased on correct appreciation of facts and pleadings. [Paras 17,18][985-G-H; 986-G]

Daya Singh and another v. Gurdev Singh (Dead) byLrs. And others (2010) 2 SCC 194 : [2010] 1 SCR 194– referred to.

Case Law Reference

[2010] 1 SCR 194referred toPara 17

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1716of 2020.

From the Judgment and Order dated 11.03.2016 of the High Courtof Judicature at Hyderabad in City Civil Court Appeal No. 120 of 2015.

Sridhar Potaraju, Gaichangpou Gangmei, Ms. Petal Chandok,Ms. Rupali Gupta, Ms. Shweta Parihar, Ms. Shiwani Tushir, Ms. G.Ushasri, Vishnu Tulasi Menon (for M/S. Trust Legal), Advs. for theAppellant.

T. Raghuram, Mullapudi Rambabu, N. Eswara Rao, Ms. PrityKumari, Ms. Vijayshree Pattnaik (for M/S. M. Rambabu And Co.),Advs. for the Respondents.

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AThe Judgment of the Court was delivered by ASHOK BHUSHAN, J.

1. This appeal has been filed by the defendant against the judgmentof the High Court of Judicature at Hyderabad for the State of Telanganaand the State of Andhra Pradesh dated 11.03.2016 allowing the plaintiffs’Bappeal.

2. Brief facts of the case for deciding this appeal are:

The parties shall be referred to as described in the suit. Theplaintiffs have been carrying on business of producing, distributing andCexhibiting cinematographic films. On a request of 4[th] defendant, M/s.N.S. Films, the plaintiffs on 23.12.1994 assigned to four personsnominated by 4[th] defendant satellite broadcasting rights of 16 Hindi filmsfor a period of 9 years. The assignments were made by six assignmentdeeds all dated 23.12.1994. In the year 1995, plaintiffs came to knowabout the pendency of the Small Causes Suit filed in Bombay, SmallDCauses Suit No.281 of 1995 by 3[rd] defendant, M/s. Asia Vision againstthe 4[th] defendant seeking for relief of declaration and injunction in respectof above 16 films,on the basis of certain documents purporting to be adeed of assignment dated 07.10.1994 and declaration dated 15.10.1994allegedly assigned by D. Suresh Babu assigning satellite and DoordarshanErights in favour of 4[th] defendant. The suit at Bombay was filed on thebasis of notarised of the said forged documents. Shri D. Ramesh Babu,Director of first plaintiff lodged a complaint with the Police Station, JubileeHills, Hyderabad complaining about the said forgery. Defendant No.3had also lodged complaint against 4[th] defendant and plaintiffs at Mumbai.Several criminal proceedings were filed by the plaintiffs as well as byFdefendant Nos.3 to 8. However, suit filed by the other parties came tobe dismissed for default and controversy was subsided.

3. The plaintiffs issued a public notice in the Film InformationMagazine on 27.09.2003 with respect to the above said 16 Hindi films. Alegal notice from first defendant on 14.10.2003 in reply to the notice ofGthe plaintiffs was received where defendant No.1 claimed that they haveacquired satellite broadcasting, Pay TV and Cable TV rights of all above16 Hindi films from defendant No.2, M/s. B.N.U. & Co. vide deed ofassignment dated 21.03.1997 for a period of 99 years and that, M/s.B.N.U. & Co. had in turn acquired the said rights from M/s. Asia Vision,defendant No.3, vide agreement dated 16.03.1997. The first defendantH

called upon the plaintiffs to withdraw the said public notice. The plaintiffssent reply dated 17.10.2003 refuting the facts in the notice of the firstdefendant. The plaintiffs filed Original Suit No.392 of 2003 on 11.11.2003before the Chief Judge, City Civil Courts, Hyderabad, for declarationthat defendant Nos.1 to 4 have no manner of right, title and interest inthe Copyright in respect of the scheduled films, to pass a decree ofperpetual injunction against defendant Nos. 1 to 4.

4. First defendant filed written statement. It was pleaded thatD. Suresh Babu representing the plaintiff Nos.1, 3 and 4 assigned T.V.Doordarshan and world satellite rights in the said 16 films in favour of4[th] defendant on 10.10.1994 for a valuable consideration ofRs.55,00,000/-. The 6 assignment deeds dated 23.12.1994 was allegedto be manufactured for the purpose of claiming rights in the suit scheduledfilms. Although, the above plaintiffs have already been divested of theirrights by assignment dated 10.10.1994 with 4[th] defendant. Under deedof assignment dated 17.10.1994, the 4[th] defendant had assigned the rightsto third defendant and third defendant in turn assigned the rights to seconddefendant by deed of assignment dated 16.03.1997. First defendantclaims deed of assignment from second defendant by assignment deeddated 21.03.1997. First defendant pleaded that from 21.03.1997 it hasbeen exercising the satellite broadcasting rights acquired under the deedof assignment and the suit scheduled films have been telecasted as manyas 223 times on various occasions since August 1997 till date. Theallegations made in the plaint were denied. Defendant No.2 adopted thewritten statement filed by defendant No.3. Defendant No.3 also filed awritten statement which was in the line of the written statement filed bydefendant No.1. Reference of Suit No.221 to 225 of 1995 filed by thedefendant Nos.4 to 8 was also made which were dismissed on31.08.2000,the defendant No.3 claimed to be bona fide purchasers ofsuit scheduled 16 films for a valuable consideration, with regard to SmallCauses Suit Nos. 281 of 1995 filed by defendant No.3 against defendantNo.4 through Mrs. Nalini Shankerit was stated that it was not necessaryto pursue as Small Causes Court, Mumbai was not having jurisdiction. Itwas pleaded that the plaintiffs were very well aware of as back as 1994rights acquired from the plaintiffs on 10.10.1994.

5. The trial court framed the following 10 issues:

1) Whether the suit is barred by limitation?

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A2)Whether the suit is barred by res judicata in view of decreein O.S.Nos.18 to 21 of 1996?

3) Whether the plaintiffs acquiesced the infringement of copyright of the scheduled films?

4) Whether the claim of Defendant No.1 over the plaint scheduleBfilms is true?

5) Whether the suit transactions, as alleged by the plaintiffs aretrue, valid and binding on the defendants?

6) Whether the plaintiffs are entitled to the declaration as prayedfor?

C

7) Whether the plaintiffs are entitled to the perpetual injunctionas prayed for?

8) Whether the plaintiffs are entitled to the delivery of tapesetc., as prayed for?D

9) Whether the plaintiffs are entitled to the damages, as prayedfor?

10) To what relief?”

6. On Issue No.1 trial court held that cause of action for filing theEsuit arose in the year 1995 itself when the plaintiff got knowledge of theclaims of the first defendant over the given films and they have chosento give report to the police in respect of the agreement dated 10.10.1994.Trial Court held that they slept over their rights for eight long years,hence, the suit claim is hopelessly barred by limitation.

F7. On Issue No.2, trial court held that suit is not barred by principleof res judicata. Issue Nos.4 to 9 were answered in favour of the plaintiffs,it was held that the plaintiffs’ claim over the suit scheduled films is proved.The agreement dated 23.12.1994 was held to be proved whereasdefendants have failed to prove the assignment dated 10.10.1994. Thetransactions alleged to have been entered into between 4[th] defendantGand 3[rd]defendant in respect of 16 films was held not to be proved. IssueNo.3 was also decided in favour of the plaintiffs. Trial court, however, inview of finding on Issue No.1 that suit is barred by limitation dismissedthe suit by its judgment dated 09.03.2011.

8. The plaintiffs aggrieved by the judgment of the trial court filedHappeal before the Hight Court which appeal has been allowed by the High Court by impugned judgment dated 11.03.2016. The High Courtnoticed in the judgment that only point for determination in the appeal is:“Whether the finding of the trial court that suit was barred by limitationis factually and legally correct?” The High Court after considering thesubmissions of the learned counsel of the parties held that suit filed bythe plaintiffs was not barred by limitation.

9. The High Court held that in the year 1995 defendant Nos.1 and2 were not in the scene and so the question of plaintiffs taking actionagainst them does not arise. It held that to the plaintiffs cause of actionarose for the first time when defendant No.1 issued notice dated14.10.2003 and the suit having filed immediately thereafter was wellwithin time. The High Court allowed the appeal and decreed the suit infavour of the plaintiffs. Defendant No.1 aggrieved by the judgment ofthe High Court has come up in this appeal.

10. Shri Sridhar Potaraju, learned counsel for the appellant submitsthat the plaintiffs had knowledge of violation of their rights qua scheduled16 films in the year 1995. It is submitted that defendant No.3 has filedS.C. Suit No.281 of 1995 in Mumbai for declaration and injunction againstdefendant No.4 where reference of agreement dated 10.10.1994 and17.10.1994 was made. PW.1, D. Suresh Babu who appeared as witnessin the present suit admitted having knowledge of the suit filed in theBombay Court. It is further submitted that defendant Nos.4 to 8 hadfiled O.s.No.221 to 225 of 1995 for declaration and injunction againstplaintiff No.1 and defendant Nos. 3 and 4 before the City Civil Court,Hyderabad which suit was subsequently dismissed. Plaintiff Nos.1 to 4has also filed O.S.No.16 of 1996 in the Court of Chief Judge, City CivilCourt, Hyderabad against defendant Nos.3,4 and 8 qua 3 films. Theabove facts clearly indicate that they had full knowledge of infringementof their right and ought to have filed suit within the period of limitation.He submits that Article 58 of the Indian Limitation Act provides that suitcan be filed within three years from the date when the cause of actionfirst arose. He further contends that plaintiff being aware of the claim ofthe defendants as reflected in various litigations and having not takenany action acquiesced to the claim of the defendants,hence, the suit isliable to be dismissed on the principle of acquiescence.

11. Learned counsel for the respondents, Shri T. Raghuram refutingthe submissions of the appellants contends that the High Court afterconsidering the materials on record has rightly come to the conclusion A

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Athat the suit was not barred by time. It is submitted that the allegedassignments dated 10.10.1994 and 17.10.1994 which are foundation ofthe case of the defendants having not been proved in the suit and thetrial court itself has found that the said assignments have not been proved,there was no cause of action to the plaintiff to file suit in the year 1995.It is submitted that assignment dated 23.12.1994 by the plaintiff in favourBof defendant No.4 has been proved by which plaintiff has assignedbroadcasting rights to defendant No.5 to 9 for a period of 9 years. Theplaintiff was not concerned about the telecasting of films during the saidperiod.It is submitted that cause of action arose to the plaintiff whenthey published notice in the Film Information Magazine with regard toCprosecute their right to which reply was given on 27.09.2003. It issubmitted that cause of action arose when reply dated 14.10.2003 wasreceived from defendant No.1 which claimed rights to the aforesaid 16films. It is submitted that the suit of the plaintiffs was well within timeand the High Court has rightly come to the said conclusion.

D12. We have heard learned counsel for the parties and perusedthe records.

13. The plaintiff’s case in the plaint was that plaintiffs have assignedtelecasting right of 16 schedule films by 6 assignment deeds dated23.12.1994 for a period of 9 years in favour of defendant No.5 to 8 asErequested by defendant No.4. The trial court in its judgment whileconsidering the Issue Nos.4 to 9 has specifically considered theassignment deed dated 23.12.1994. While answering Issue Nos.4 to 9especially assignment deed dated 23.12.1994 by the plaintiff in favour ofdefendant No.5 to 8 at the instance of defendant No.4, the trial courtrecorded the following finding:F

“It is an undisputed fact that originally copyright holders in respectof suit schedule films have been the plaintiffs firms only. D.W.1also accepted the same. It is the contention of the plaintiffs thatSr.D. Rama Naidu, representing plaintiffs firm has entered intoassigned agreement with fourth defendant and assigned satelliteGand broadcasting rights over the suit schedule films for a periodof nine years from 23.12.1994 to the nominees of fourth defendanti.e. Defendant No.5 to 8 for valuable consideration received bythe plaintiffs from fourth defendant and acknowledging saidassignment and receipt of the consideration vide letter datedH23.12.1994. Exs. A7 to A12 are assignment agreements pertaining to Defendant Nos.5 to 8. Defendant Nos. 4,5,6 and 8 have notchosen to contest the suit by filing written statement, though theyappeared before the Court through their respective advocates.They have not even cross-examined the witnesses examined forplaintiff and first defendant and they have not adduced any evidenceeither. Thus, it is to be taken that, they are not actually disputingwith the claims of the plaintiffs. By examining P.W.1 before thecourt and by producing Exs.A7 to A12, plaintiffs could establishtheir claims in respect of assignment agreement entered into byplaintiffs with fourth defendant and their assignment rights overthe suit schedule films and also expiry of the period of saidassignment prior to the date of filing of this suit.”

14. When the plaintiffs assigned their rights to defendant Nos.5 to8 on the request of defendant No.4 for a period of 9 years, plaintiffshaving parted with their satellite rights could not have claimed any rightfor telecasting during the aforesaid period of 9 years. Inter se disputebetween defendant Nos.4 and 3 which begun with filing suit in Mumbaicould not have been any cause of action for the plaintiffs to file a suitclaiming telecasting rights for themselves. Furthermore, it was the caseof the defendant No.3 itself that dispute between defendant No.3 and 4subsided when the suit filed by defendant No.3 was returned in the year1995 itself. It is submitted by the counsel for the appellants that eventhough D. Suresh Babu filed a police complaint in the year 1995 itselfwith regard to the alleged assignment dated 10.10.1994 but no furtherproceedings were taken by D.Suresh Babu thereafter. The trial court inits judgment has also returned a finding that the assignment dated10.10.1994 by D. Suresh Babu in favour of defendant No.4 and assignmentdated 17.10.1994 by defendant No.4 to 3 has not been proved. The trialcourt has itself returned the finding in paragraph 10(iv) to the followingeffect:

“10(iv) In such circumstances, it is the bounden duty of thedefendants, who are relying upon such document i.e. assignmentdeed dated 10.10.1994 to establish that such document has beenexecuted by P.W.1 conveying satellite broadcasting rights andother rights over the suit schedule films to fourth Defendant. Butno such evidence is adduced on record. Neither original nor anyauthenticated copy of the said document is produced before theCourt. Further, documents relating to transaction alleged to have A

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been entered into between fourth defendant and third defendantin respect of these films, also have not been produced before theCourt. No evidence is adduced on record to establish the claimsof the contesting defendants in respect of transfer of satellitebroadcasting rights over the suit schedule films from one to anotheramong Defendant Nos.3 and 4.”

B

15. The trial court by its judgment dismissed the plaintiffs’ suithaving accepted the case of the plaintiffs regarding assignment oftelecasting rights of said schedule films i.e. assignment of 23.12.1994 infavour of defendant Nos. 5 to 8 at the request of defendant No.4 for 9years.The plaintiffs’ claim for the right of schedule films arose only afterC22.12.2003. They having parted with their right, there was no real threatto their right by any inter-se dispute between defendant Nos.4 and 3 orother defendants. It was on 22.12.2003 that plaintiffs again becameentitled to assign telecasting rights of the aforesaid 16 films after theexpiry of the period of 9 years of assigning the telecasting right of 16Dfilms to defendant Nos.5 to 8 on the request of the defendant No.4 onvaluable consideration.

16. The trial court while discussing Issue No.1 had observed thatcause of occasion arose in the year 1995 itself when the plaintiff gotknowledge of claim of the first defendant over the given films andEplaintiffs have chosen to file the suit in the year 2003 in respect ofagreement dated 10.10.1994. The trial court further held that plaintiffssat over their rights for eight long years, hence, suit is barred by time.Thesuit which was filed in the year 1995 by defendant No.3 against defendantNo.4 in the Small Causes Court, Mumbai where assignments dated10.10.1994 and 17.10.1994 were referred to got dismissed in the yearF1995 itself as Small Causes Court had no jurisdiction to consider theclaim of defendant No.3.

17. Cause of action to a plaintiff to file a suit accrues when thereis a clear and unequivocal threat to infringe a right. The plaintiff havingalready assigned their right for a period of 9 years by assignment deedGdated 23.12.1994, there was no cause of action during the aforesaidperiod of 9 years. When the plaintiffs had already parted with their rightof telecasting films on 23.12.1994 there could not have been any threatto their right in the year 1995. This Court in Daya Singh and anothervs. Gurdev Singh (Dead) by Lrs. And others, (2010) 2 SCC 194,Hhad laid down that a right to sue accrues when there is a clear and unequivocal threat to infringe a right of plaintiff. In paragraphs 14 and15 following was laid down:

“14. In support of the contention that the suit was filed withinthe period of limitation, the learned Senior Counsel appearing forthe appellant-plaintiffs before us submitted that there could be noright to sue until there is an accrual of the right asserted in the suitand its infringement or at least a clear and unequivocal threat toinfringe that right by the defendant against whom the suit isinstituted. In support of this contention the learned Senior Counselstrongly relied on a decision of the Privy Council in Bolo v. Koklan,AIR 1930 PC 270. In this decision Their Lordships of the PrivyCouncil observed as follows: (IA p. 331)

“… There can be no ‘right to sue’ until there is an accrual ofthe right asserted in the suit and its infringement, or at least aclear and unequivocal threat to infringe that right, by the defendantagainst whom the suit is instituted.”

15. A similar view was reiterated in C. Mohammad Yunus v.Syed Unnissa, AIR 1961 SC 808, in which this Court observed: (AIRp. 810, para 7)

“7. … The period of six years prescribed by Article 120has to be computed from the date when the right to sue accruesand there could be no right to sue until there is an accrual of theright asserted in the suit and its infringement or at least a clearand unequivocal threat to infringe that right.”

In C. Mohammad Yunus, this Court held that the cause of actionfor the purposes of Article 58 of the Act accrues only when theright asserted in the suit is infringed or there is at least a clear andunequivocal threat to infringe that right. Therefore, the mereexistence of an adverse entry in the revenue records cannot giverise to cause of action.”

18. We are of the view that in view of the pleadings on the recordand facts of the present case, suit filed by the plaintiffs is wellwithinlimitation, the finding of the High Court that the suit is within limitation isbased on correct appreciation of facts and pleadings. We do not find anymerit in this appeal. The appeal is dismissed.

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