Mr.Jaswant Chand vs M/s.G.V.Films Limited & Anr.

The plaintiff, who is the financier, has come forward with the suit for recovery of a sum of Rs.2,95,00,000/- with interest at the rate of 36% per

annum from the date of plaint till the date of realization.

The brief averments in the plaint are as follows: According to the plaintiff, the first defendant-Company, which is engaged in production of

cinematographic films had approached the plaintiff seeking finance for their upcoming film ""Shokka Thangam"". The plaintiff agreed to advance a

sum of Rs.2,50,00,000/- and upon such acceptance by the plaintiff an agreement dated 19.03.2002 was entered into between the plaintiff and the

first defendant. The plaintiff advanced a sum of Rs.2,50,00,000/- to the first defendant on 19.03.2002. It was proposed to release the movie

during August 2002. The first defendant also had agreed to pay the loan amount with interest at 36% per annum, before the release of the said

picture. The first defendant-Company also gave a letter to the 2nd defendant, viz. Prasad Film Laboratories, undertaking that the defendants will

not deliver the said picture to any party till such time the entire amount financed by the plaintiff is paid over to him with interest. Clause 6 of the

agreement also provides that the financier viz. the plaintiff will have the first charge over the picture. The plaintiff would claim that despite repeated

demands, the first defendant did not repay the money, however, attempted to release the picture, during January 2003. This has forced the plaintiff

to come forward with the present suit for recovery of the money due under the agreement and for permanent injunction restraining the defendants 1

and 2 from releasing the picture, named ""Shokka Thangam"" in India as well as overseas as advertised in the newspapers Dinakaran and Daily

Thanthi dated 12.01.2003.

The plaintiff would claim that M/s.Asian Capital Consolidates & Holdings Pvt. Ltd., had filed a suit against the 1st defendant in CS No.523 of

2001 for recovery of money and the said suit was dismissed by this Court on 14.08.2001. The appeal in OSA No.295 of 2001 was filed by the

plaintiff in CS No.523 of 2001 aggrieved by the said dismissal. Pending the said OSA, the 1st defendant attempted to release the picture without

reference to the claim of the present plaintiff by entering into a compromise with the said M/s.Asian Capital Consolidates & Holdings Pvt. Ltd.

Hence, the plaintiff had filed the CMP No.808 of 2003 seeking to implead himself in the said appeal. On 14.01.2003, a compromise was entered

into between the plaintiff herein and the 1st defendant, under which the 1st defendant under took to pay a sum of Rs.3,00,00,000/- in full and final

settlement of the claim of the plaintiff. As per the said compromise, a sum of Rs.75,00,000/- was to be paid on or before 13.01.2003; a sum of

Rs.25,00,000/- was to be paid by 25.01.2003 and the balance was to be paid before 31.03.2003 and it was agreed by the parties that the picture

will be released only after settling the entire amount to the plaintiff. The 1st defendant paid a sum of Rs.65,00,000/- on 14.01.2003, but failed to

comply with the terms of the compromise entered into in the appeal by paying the remaining amount as per the time line fixed in the compromise.

Subsequently, the 1st defendant has filed a suit in CS No.822 of 2005 seeking to cancel the compromise decree in CS No.49 of 2003 to the

extent of Rs.1,56,96,984/- and also sought for a consequential declaration declaring that the equitable mortgage created by the plaintiff in favour of

the defendant registered on 10.02.2003 over its immovable property as null and void. It also claimed a sum of Rs.71,07,726/- against the plaintiff.

The 1st defendant also filed an application in Application No.3340 of 2006 for setting aside the compromise decree dated 27.01.2003. The

compromise decree was eventually set aside by this Court on 31.07.2006, leaving the suit to be decided on merits.

The 1st defendant has filed the written statement. Issues were framed by this Court on 04.02.2011 and the matter was referred to the

Additional Master. Despite several adjournments before the Additional Master, the first defendant did not appear to prosecute the suit, in fact the

plaintiff was examined as P.W.1 in chief on 27.02.2012 and 18.04.2012 and he was partly cross-examined on 04.09.2012. Thereafter, the

counsel for the 1st defendant reported no instruction. Hence, the Additional Master referred the suit back to the Court

When the matter was listed before the Court, the learned counsel appearing for the 1st defendant in CS No.49 of 2003 and the plaintiff in CS

No.822 of 2005 reported that they returned the papers even on 07.05.2016. No other counsel had entered appearance. This Court had set the

defendant set ex-parte on 13.12.2017 and the suit filed by the 1st defendant in CS No.49 of 2003, viz. CS No.822 of 2005 was also dismissed

for non prosecution on the same day. The plaintiff has been examined as P.W.1, he has filed a proof affidavit and Exhibits P1 to P39 have been

marked. Ex.P1 is the Finance Agreement, Ex.P2 is the Laboratory letter and Ex.P3 is the Confirmation letter. Exs.P6 to P30 are 25 pronotes each

for Rs.10,00,000/-. Ex.P31 is the Statement of Account filed by the plaintiff.

From the above documents, and the oral evidence of the plaintiff it is seen that the plaintiff has established the borrowing. There is no contra

evidence available, to discredit the evidence of P.W.1. Even in the Cross examination nothing has been elicited to show that the case of the plaintiff

is not reliable. The execution of the promissory notes by the Director of the 1st defendant is not denied, hence I find that the plaintiff has proved the

borrowing. The plaintiff has claimed 36% interest on the ground, it is a Commercial Transaction. Even if the suit transaction is a Commercial

Transaction, In Alka Bose v. Parmatma Devi & Ors, reported in 2009 (2) SCC 582, the Hon''ble Supreme Court has held that Courts have

discretion to interfere with the contractual rate of interest. However, the plaintiff is entitled to the contractual rate of interest till the date of filing of

the suit. The plaintiff has come forward for recovery of the sum of Rs.2,95,00,000/- due as on 13.06.2003.

Considering the facts and circumstances of the case, I am of the considered opinion that the pendente lite interest could be reduced to 12% per

annum from the date of suit till date of realization. The plaintiff has filed the suit for recovery of sum of Rs.2,95,00,000/- due on 13.01.2003. On

14.01.2003, the plaintiff has received a sum of Rs.65,00,000/- from the 1st defendant. So the amount due as on 14.01.2003 would be

Rs.2,30,00,000/-. Therefore, the plaintiff would be entitled to 12% interest on Rs.2,30,00,000/- from the date of suit till date of realization.

In fine the suit is decreed for a sum of Rs.2,30,00,000/- with interest at 12% per annum on the said sum from the date of suit till date of

realization with proportionate costs as against the 1st defendant, the suit against the 2nd defendant will stand dismissed.