M/s. Premijit Theatres, Secunderabad vs M/s Rashi Mehata and Co. and another

Amareswari, J.—Plaintiff is the appellant. The appeal is against the judgment and decree dt. 19-3-1984 of the First Additional Judge, City Civil Court, Hyderabad dismissing the suit.

The facts may briefly be stated :

The plaintiff-appellant is a Film Exhibitor. The first defendant is a Film Distributor. Second defendant is a partner of the first defendant. The appellant-plaintiff controls the play time of the theatre Farheen 70 M.M. for exhibiting the pictures. They have four other sister concerns. Pramod Enterprises controls Anand Theatre, Pramod Theatres controls Alka Talkies, Pramod Films controls Sobhana Theatre and Pramod Cinemas controls Sri Ramana 70 M.M. theatre respectively.

The first defendant acquired the rights of distribution for Hindi Motion Picture by name "Waqt-Ki-Deewar" for the Nizam Circuit Area. The plaintiff, who is the exhibitor, and the first defendant, who is Distributor, entered into an agreement on 4-3-1981 for playing the picture "Waqt-Ki-Deewar" from 27-3-1981 in all the theatres controlled by the plaintiff and its sister concerns. Under the agreements the first defendant has to pay Rs.28,000/- -per week for 21 shows in Farheen Theatre and for every extra show a proportionate hire Rs. 3/- towards excise duty and Rs. 15/- towards representative batta. No time limit is prescribed. But the first defendant can terminate the picture by giving 14 days'' notice in advance. Similar conditions and agreements were also entered into with the plaintiff''s sister concerns with minor variation regarding the period and weekly hires. As per the above agreements, the defendants are bound to screen the picture from 27-3-1981 in the above Five Theatres. The plaintiff and the defendants also entered into an agreement Under which the plaintiff agreed to advance a sum of Rs. 4,50,000/- for getting the picture released by him from the Producer. On 4-3-1981 as the plaintiff was not ready with the money, the agreement was postponed to 7-3-1981 on which day it was reduced to writing. Under the said agreement the plaintiff has to advance a sum of Rs.2,00,000/- on 7-3-1981 and an amount of Rs. 2,50,000; - on or before 13-3-81. It was also provided in the agreement that the shares payable to the defendants from out of the theatres controlled by the plaintiff and its sister concerns shall be adjusted towards the advance lent by the plaintiff. The defendants further undertook to pay the realisations from other theatres as and when they are received and after adjustment of the said amounts, if any amount still remains unadjusted, the defendants shall pay the balance. The plaintiff confirmed the said letter Ex. A-8 and advanced the amount of Rs. 4,50,000/-. The picture was released if the theatres controlled by the plaintiff and its sister concerns and also at Sadia Talkies, Aurangabad. The picture was exhibited during the entire period in four out of the five theatres. As regards Farheen Theatre, after two weeks on 13-4-1981, the defendants gave a notice asking the plaintiff not to exhibit for more than two weeks after the said notice. During the third week, the plaintiff exhibited the picture "Mogle-E-Azam" after obtaining the consent of the defendants who also had distribution rights over the said picture. On 22-4-1981 the defendants paid a sum of Rs. 25,000/-. After adjusting the amounts received in all the theatres of the plaintiff and its sister concerns, the defendants were still due in a sum of Rs. 3,00,000/- and odd. The plaintiff says that he asked the defendants for refund of the amount several times and there was no replay. He wrote a letter on 13-7-1981 to which the defendants gave a reply accepting the above liability but however, stated that the amount will be paid out of the realisations from the picture at other theatres. It may be mentioned in this context that the defendant has distribution rights for this picture in the Nizam Circuit area for a period often years. Thereafter, the plaintiff issued a notice dt. 28-7-81 demanding payment of the amount with interest at 24% per annum. The defendants sent a reply denying their liability. Then the plaintiff filed the suit for recovery of the amount. In essence, the case of the plaintiff is that as per the agreements between the parties and according to custom, usage and practice in the trade, the amount will have to be paid immediately after the exhibition of the film in their theatres after adjusting the defendants shares.

The defendants resisted the suit contending that they are not liable to pay the amount for a period of 10 years till their distribution rights for the picture "Waqt-Ki-Deewar" are extinguished, that they made it clear to the plaintiff that the amount advanced shall be adjustable from out of the net collections of exhibition of the picture not only in the five theatres of the plaintiff and its sister concerns, but also other theatres in the Nizam circuit. It is further contended that there is no usage, custom or practice to repay the amounts immediately after the exhibition of picture in the theatres of the person who advance the money and in any event, in view of the specific agreement Ex. A-8, no such usage, custom or practice can be relied upon and the parties are bound by the agreement.

On these pleadings, the trial court framed several issues, out of which the following are relevant.

Issue No. 1 : ...

Issue NO. 2 : Whether no amount is refundable presently?

Issue No. 3 : Whether there is custom, usage, practice prevailing in the film trade as contended by the plaintiff?

Issue No. 4 : Whether the plaintiff is entitled for interest?

Issue No. 5 ...

Additional Issue No. 1 : Whether the plaintiff has filed the suit as a speculative measure?

Additional Issue No. 2 : Whether the plaintiff committed breach and whether the plaintiff is not entitled to rush to the Court?

The plaintiff examined one of the partners as P.W. 1 and his father as P.W. 2 and third parties as P.Ws. 3 and 4 and marked Exs. A-l to A-36 and Exs. X-l to X-6 on their behalf. The defendants examined D.Ws. 1 to 4 and. marked Exs. B-1 to B-10.

On a consideration of the entire evidence oil record, the trial Court found on Issues 2 and 3 and Additional Issues 1 and 2 that the amount advanced by the plaintiff to the defendants is not returnable presently and that it is refundable only after the rights of the defendants over the picture are extinguished i.e., after a period of ten years. On Issue 3 the Court found that there is custom, usage and practice as pleaded by the plaintiff to repay the amount given as advance immediately after the screening of the pictures in the plaintiffs theatres is over. But the Court negatived the relief on the ground that the agreement is specific and it binds the parties and custom and usage cannot be availed of. On Issue 4 the Court found that the plaintiff is entitled to interest at the rate of 24% per annum from the date when the amount be: comes due. On these findings the Court below dismissed the plaintiffs suit holding that no cause of action arises presently and the plaintiff''s right to recover the amounts starts only after the expiry of 10 years from the date on which the defendants obtained the rights of distribution of the picture in question.

In this appeal, two points arise for consideration, namely, (I) Whether the plaintiff has established his right to recover the money immediately after exhibiting the picture in the theatre controlled by it and its sister concerns, or only after the expiry of 10 years from the date on which the defendants obtained distribution rights over the Picture? and (2) whether the plaintiff is entitled to any interest?

Point No. 1 :-- The plaintiff is a firm doing business in exhibition of films and the defendants in distribution of films. The defendants acquired distribution rights for the picture Waqt-Ki-Deewar in the Nizam circuit area for ten years. It is also admitted that the plaintiff advanced an amount of Rs. 4,50,000/- to the first defendant for get ting the picture released. The defendants and the plaintiff entered into five agreements on 4-3-1981 and one on 7-3-1981. The agreement dt. 7-3-1981 is with reference to the advance amount. It is also admitted that by the date of filing of the suit, the amount mentioned in the plaint is still due from the defendants. The Case of the plaintiff is that as per trade usage, custom and practice and even as per the agreement dt. 7-3-198 1 , soon after the exhibition of the picture in the plaintiff''s theatres is completed, the defendants must settle the account and pay the remaining balance, if any. According to the defendants, the advance amount becomes refundable only after adjusting the amounts realised by exhibiting the picture in the entire Nizam Circuit area during a period of 10 years and pay the balance after expiry of ten years. Thus the controversy is very narrow.

It is a settled principle of law that when the agreement is ambiguous or vague on any aspect, oral evidence can be adduced but when the agreement is specific and definite in its terms, no evidence can be let in. We do not think it necessary to cite any decisions in regard to this well established principle. It has now to be seen whether Ex.A-8 agreement is definite and specific about the time regarding the repayment. The relevant portion of Ex. A-8 is as follows:--

"It has been agreed that our share (defendants'' share) from the above cinemas will be adjusted from out of this advance and we shall also pay the realisations from other theatres as and when we receive. After adjustment of all this, the amount still remaining unadjusted, if any, will be refunded by us."

It is seen from this agreement that the parties have prescribed the mode of payment, namely, first, the defendants'' share out of the collections shall be adjusted by the plaintiff towards the amount lent as advance. The defendants shall also pay the realisations from other theatres as and when they receive and after adjustment of all this, the amount still remaining shall be paid by them. As per Exs. A-4 to A-7, the film has to be exhibited in the plaintiffs sister concerns for a specified period, namely, for one week in three theatres, for two weeks in one theatre. As regards Farheen theatre, no time limit is fixed but the defendants are given liberty to terminate, the agreement by giving 14 days notice. After the exhibition of the film for a period of one week or two weeks, as the case may be, in the four theatres the plaintiff will have to return the prints to the defendants and the same can be exhibited in the other theatres. Even in the case of Farheen theatre, after the contract is over, the print has to be returned and it is open to the defendants to exhibit the film in other theatres.

From the terms of the agreement referred to above, we do not find any reference to the period of time for which the plaintiff has to wait or the date on which the amount becomes payable. It is, only the method and manner of payment that is indicated in the agreement, namely, first by adjusting the collections from out of the plaintiffs theatres and also from other theatres, and the balance thereafter. The agreement is vague with regard to the time. According to the plaintiff, he is entitled to adjust the amounts from out of the collections that fall to the share of the defendants from their theatres and also the other theatres during the period ''for which he can exhibit the film in his theatre. The plaintiffs version cannot be said to be wholly inconsistent with the agreement, as in respect of four out of the five theatres the agreements are only for a specific period of one week and two weeks and the defendants can exhibit the films in other theatres. The case of the defendants is that the understanding was that after adjusting the defendants'' share from out of the collections in the plaintiff''s theatres, the defendants should pay the collections from the other theatres as well and the remaining balance to be paid after their distribution rights are extinguished i.e., after a period of 10 years. Regarding this aspect each party has its own version and the trial Court rightly rejected the oral evidence in this regard and mainly relied upon the agreement Ex. A-8- As referred to above, we find that the term regarding the time at which the entire amount becomes payable to the plaintiff is not very specific. It is vague and ambiguous and is capable of two interpretations. We do not mean to say that the agreement itself is void or unenforceable because of this reason. But when the agreement is not so specific the Courts can always look to the custom, usage and practice. The version of the defendants also does not appear to be probable for the reason that the plaintiff has nothing to do with the distribution rights of the defendants over the picture. That is covered by agreement between the defendants and the Producer. It is the case of the defendants that the agreement Ex. B-9 was shown to the plaintiff at the time when Ex.A-8 agreement was entered into, whereas it is-the case of the plaintiff that they were not shown the agreement of the defendants with the Producer and having regard to the intimacy and acquaintance between the parties, they believed that the defendants had distribution rights over the picture and lent the money. It looks improbable that the plaintiff would have agreed to advance a huge sum of Rs. 4,50,000/- to be recovered only at the end often years from the date of lending. The plaintiff has no control over the defendants'' cohesions and he has to depend upon the mercy of the defendants and take whatever they offer saying that this is the amount they received towards the collections from the exhibition of the pictures in the other theatres. The exhibition is not confined to the city where the plaintiff has the theatres but in the entire Nizam Circuit area. The plaintiff would not know where the films are running and what the Collections are. No doubt, in the agreement five theatres are mentioned. After mentioning the five theatres a reference is made to other theatres. But it does not necessarily mean other theatres in the Nizam Circuit area. It is referable to other theatres in which the film would be shown after expiry of the period in the Plaintiff''s theatres, and so far as Farheen theatre is concerned, since there is no time limit it could be the intention of the parties that the collections from other theatres would also be adjustable by the plaintiff when the picture is running at Farheen theatre. In fact, the evidence shows that white the picture is running at Farheen theatre the defendants have paid Rs. 25,000/- towards the collections from other theatres. Thus, we are of the view that the point of time at which the balance becomes repayable is not specifically-stated in the agreement. The observation of the trial Court that since the defendants are not having the money even as per the plaintiff they cannot pay the amount unless and until he recovers the advanced amount by exploiting his motion picture, is not warranted. As the evidence discloses that both sides thought that the picture would be a hit and a great success and a money-spinner, the defendants might have thought that they would be able to pay the entire amount after exhibiting the picture in the plaintiff''s theatres. The lower Court was also not right in relying upon the statement of P.W. 1 that there are some agreements in the trade enabling the Distributor to pay the advance amount not immediately after the screening is over but long after. What all P.W. 1 stated is that in respect of some of the pictures he advanced some amounts and that still some amount is due from the distributors but the defendants are unable to show a single instance where any exhibitor has agreed to receive the amount only after the distributor''s rights are extinguished as per the agreement of the Distributor with the film Producer. In fact, a lot of evidence is adduced to show that the terms between the Producer and the Distributor are maintained as secret and they are not disclosed to other parties.

We are, therefore, of the view that Ex. A-8 agreement is not very specific regarding the point of time at which the entire amount becomes payable and hence the Court is entitled to take into account the custom, practice and usage in the trade. The plaintiff as P.W. I gave evidence that there is practice, custom and usage in the film field that whenever an advance is paid to the Distributor, the exhibitor will recover the amount from out of the collections at the Box Office and if any amount remained unpaid, it would be paid immediately after the screening is over. P.Ws. 3 and 4 who are film distributor?-cum-exhibitors, were also examined on this aspect. P.W. 4 is the President of the Hyderabad Film Chamber of Commerce. Both of them speak to the above practice. No doubt, they say that such a practice can be waived by the parties if they so choose. On the evidence of P.Ws. 3 and 4, who are independent witnesses, we hold that there is a custom, practice and usage in the trade to recover the amount after the screening in the theatres of the person, who lent the amount is completed.: The trial Court also found that there is such a practice and usage but the Court did not rely upon the custom and practice on the ground that the agreement is specific and custom and usage cannot override an agreement. In view of our finding that the agreement is not specific, custom and practice can be relied upon. Hence, the contention of the plaintiff that he is entitled to recover the amount immediately after the screening is over in his theatres, has to be upheld. We accordingly find on Point No. 1 in favour of the plaintiff.

Point No. 2:--The next point to be considered is whether the plaintiff is entitled to interest. Here, the amount is lent to get the picture released from the Producer for the purpose of exhibiting it in the theatres of the plaintiff and its sister concerns. Though the amount was lent on 7-3-1981, it was a part of the same transaction covered by the agreements Exs. A-3 to A-7. The whole thing was one scheme. The defendants as Distributors and the plaintiff as Exhibitor were anxious to get the film released and exhibit it in the plaintiff''s theatres. The defendants were in need of money and the plaintiff agreed to advance the amount on condition that all the five prints of the plaintiff would be delivered for exhibition in the theatres of which he had control. Hence, it is not a mere lending as such. The agreements also do not contain any clause regarding payment of any interest. On the other hand, the evidence shows that there is no practice, usage and custom enabling the exhibitor to collect interest. P.W. 1 who is a partner of the plaintiff firm admitted that" they have been advancing monies to some of the distributors without interest. P.W. 3 stated that interest is charged only when there is undue delay in repayment of the amount advanced. He admitted that he did not pay y interest to the exhibitors from whom he took advance. Thus, the evidence regarding payment of interest does not show that in the case of monies advanced by the exhibitors to distributors, any interest is charged. Hence, the plaintiff is not entitled, as a matter of right, to interest, We do not, therefore, grant any interest for the period prior to the filing of the suit. However, we grant interest at the rate of 6% per annum from the date of the suit till the date of realisation of the amount.

We accordingly set aside the judgment and decree of the Court below, allow this appeal and decree the suit for the principal amount claimed with interest there-on at six per cent per annum from the date of the suit till the date of payment. If any amounts are paid during the pendency of the suit and the appeal, they shall be given credit to. The parties-shall bear their own costs in this appeal.

Appeal allowed.