- within Corporate/Commercial Law topic(s)
Triable cause of action is undoubtedly an important consideration while filing a suit. Being a subject incorporated in Civil Procedure Code, 1908 the issue presented itself before the Delhi High Court in the case of PVR Pictures Ltd v. Studio 18. (2009)(41)PTC70(Del.) The present suit was brought under the supervision of plaintiff, PVR Pictures Ltd before the court in respect of alleged infringement of Term Sheet Agreement(TSA) by the defendant, Studio 18 on account that the agreement does not evidence a binding contract, amounting to a distributorship license to plaintiff. It was agreed under TSA that PVR Pictures Ltd would be the exclusive licensee for distribution rights in respect of the cinematograph films, i.e. KIDNAP, GOLMAL RETURNS, DIL KABBADDI, GHAJANI and SHORTKUT, for the East Punjab territory, as known in film trade parlance. TSA guaranteed PVR Pictures Ltd distributor license on payment of 90 lakhs as advance amount, 21 days before the date of release. Four of them were released; however, Studio 18 was reluctant to bequeath the plaintiff, PVR Pictures Ltd with licensee right towards the movie SHORTKUT. PVR Pictures Ltd erred that the TSA clearly records that the right granted was a license, for a period of one year, and that it were "exclusive". Therefore TSA was not merely a Memorandum of Understanding, on the contrary, it contained all the necessary terms that an exclusive license should contain. In this view, PVR Pictures Ltd sued Studio 18 for specific performance of its obligation under a Distribution Term Sheet Agreement, in respect of a movie SHORTKUT and also permanent injunction ceasing the defendant from canalizing the movie shortcut through any other distributor.
Studio 18, through its counsel, urged that the contention put forth by PVR Pictures Ltd to prove the existence of license do not reveal that there was any grant of license to the latter. It was argued that TSA was a mere desire to enter into contractual relationship, and does not evidence a binding contract, amounting to a distributorship license. They claimed to have express terms in the TSA which bear out the submission that prints are made available only after the advance amount is paid 21 days beforehand the movie was to be released. No amount has been paid by PVR Pictures Ltd, in respect of SHORTKUT. This handicapped PVR Pictures Ltd, since they were disentitled from seeking the reliefs claimed in this case. Besides, there being no valid license, under Section 30 of the Copyright Act, the PVR Pictures Ltd cannot enjoin Studio 18, which is entitled to all rights in law, being the intellectual property right owner of the copyright in the film.
On comparison of claims, the Court was of the opinion that specific performance can be enforced only if there is a binding contract, in form of license, which is lacking in this case. Equally PVR Pictures Ltd cannot complain of prejudice since they haven't met with the requisite drawn under TSA of paying the advance to Studio 18. In this case there was absolute absence of triable cause of action in favour of PVR Pictures Ltd. In this circumstance the PVR Pictures Ltd could not claim for ad interim injunction. Thus court confirmed that the suit could not be entertained and dismissed the plaint.
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