M/s SPM Arts LLP vs M/s.Shri Abishek Pictures and 3 others

C.S(COMM DIV) No. 92 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON: 07-10-2026
DELIVERED ON:16-10-2026
CORAM
THE HON'BLE MR.JUSTICE P.B. BALAJI
C.S(COMM DIV) No. 92 of 2023
CNR: {HCMA010671142023}
M/s SPM Arts LLP
Rep.by its Partner Sanjay Laalwani, having its
office at No.13, Clemens Road, Purasawalkam,
Chennai 600 007.
..Plaintiff
Vs
1. M/s.Shri Abishek Pictures and 3 others
Rep.by its Partner Abishek Venkat Nama,
having his office at Unit No.202, 2nd Floor,
Sagacity Heights, Kavuri Hills, Madhapur,
Hyderabad 81.
2. Abhishek Venkat Nama
Partner M/s.Shri Abishek Pictures, having his
office at Unit No.202, 2nd Floor, Sagacity
Heights, Kavuri Hills, Madhapur, Hyderabad
81.
3. The Assistant Commissioner (st)
Kilpauk Assessment Circle, No.F.50, 3rd floor,
1st avenue, Anna nagar, Chennai-104
4. Deputy Commissioner(gst Appeal)
Chennai-I, Chennai-06(Defendants 3 and 4 are
impleaded as per order dated 26.04.2024 in
A.No.1198/2024)
..Defendants
Plaint filed under Order IV Rule 1 of O.S.Rules read with Order VII Rule
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C.S(COMM DIV) No. 92 of 2023
st
1 of CPC and 1 Proviso of Section 7 of Commercial Courts Act, 2015.
For Petitioner(s): Mr.R.Sivaraman
For Respondent(s): D1 And D2 Set Exparte On 06.07.2023
Mr.I.Dinesh
AGP
For D.3 and D.4
JUDGMENT
The suit has been filed directing the defendants, jointly and severally
liable to pay the plaintiff for a sum of Rs.1,22,66,092/-(Rupees One Crore
Twenty Two Lakhs Sixty Six Thousand ninety two only) together with interest
at the rate of 24% interest per annum from the date of the plaint till the date of
realisation.
2. The case of the plaintiffs in brief is as follows:-
The plaintiff is a limited liability partnership firm registered under the
Partnership Act, having its Office at Chennai. The first defendant is represented
by its partner, having office at Kavuri Hills, Madhapur, Hyderabad-81. The
second defendant is a partner of the first defendant firm. The third defendant is
the Assistant Commissioner (ST), Kilpauk Assessment Circle and the fourth
defendant is the Deputy Commissioner (GST Appeal), Chennai-1, Chennai-06.
In fact, the defendants 3 and 4 were impleaded pursuant to the order dated
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C.S(COMM DIV) No. 92 of 2023
26.04.2023 in Application No.1198 of 2024 in C.S.No.92 of 2023.
3. The plaintiff has filed this suit for recovery of a sum of
Rs.1,22,66,092/-(Rupees One Crore Twenty Two Lakhs Sixty Six Thousand
ninety two only) together with interest at 24% p.a, being the alleged GST
arrears due and payable under the provisions of Section 50(3) of the Central
Goods and Tax Rules, 2017.
4. The plaintiff states that the first defendant produced a Telugu feature
film titled “Saakshyam” which was released on 27.07.2018. The plaintiff, being
in the business of purchasing and selling specific copyrights, including dubbing
rights of feature films, was assigned the sole and exclusive dubbing copy rights
of the film of “Saakshyam” under a Deed of Assignment dated 05.02.2018, with
an exception to four South Indian languages alone viz., Tamil, Telugu, Kannada
and Malayalam and with a right to dub the feature film in Hindi and all other
Indian languages. Under the deed of assignment, the plaintiff and defendants 1
and 2 fixed a consideration of Rs.7,50,00,000/-(Rupees Seven Crores Fifty
Lakhs Only), inclusive of GST and less TDS payable by the plaintiff, to the
defendants.
5. According to the plaintiff, the defendants 1 and 2 have to bear the GST
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C.S(COMM DIV) No. 92 of 2023
payable to the authorities and as and when payment of consideration was paid
in part by the plaintiff to the defendants 1 and 2, the defendants owed a duty to
pay GST to the statutory authorities.
6. According to the plaintiff, the plaintiff has paid the entire sale
consideration of Rs.7,50,00,000/-(Rupees Seven Crores Fifty Lakhs Only)
before the release of the said movie on 27.07.2018 and in terms of the
assignment deed dated 05.02.2018, the assignment rights were also exploited by
the plaintiff in a lawful manner. The plaintiff further contends that in June 2018,
invoices were raised in favour of the plaintiff for Rs.3,12,50,000/-(Rupees
Three Crores Twelve Lakhs Fifty Thousand Only) along with GST of
Rs.37,50,000/-(Rupees Thirty Seven Lakhs Fifty Thousand Only), totalling in
all Rs.3,50,00,000/-(Rupees Three Crores Fifty Lakhs Only). The plaintiff
admits that the GST component of Rs.37,50,000/- was paid by the defendants
themselves in the month of July 2018. According to the plaintiff, the defendants
1 and 2 also raised a tax invoice for Rs.3,57,14,286/- (Rupees Three Crores
Fifty Seven Lakhs Fourteen Thousand Two Hundred Eighty Six Only) along
with GST amount of Rs.42,84,714/-(Rupees Forty Two Lakhs Eighty Four
Thousand Seven Hundred Fourteen Only), totalling in all Rs.4,00,00,000/-
(Rupees Four Crores Only).
7. The complaint of the plaintiff is that the defendants 1 and 2 have failed
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C.S(COMM DIV) No. 92 of 2023
to pay the GST payment of Rs.42,84,714/- to the tax authorities despite
remittance of total consideration of Rs.4,00,00,000/-(Rupees Four Crores Only)
by the plaintiff even in July 2018. The plaintiff also contends that the
applicable TDS amount has been duly remitted by the plaintiff in compliance
with the prevailing laws and rules.
8. It is the specific contention of the plaintiff that the plaintiff was under
the belief that the defendants 1 and 2 would make payment of GST claim of
42,85,714/- (Rupees Forty Two Lakhs Eighty Five Thousand Seven Hundred
Fourteen Only) and on coming to know that the same has not been paid, the
plaintiff has been repeatedly following up the matter with the defendants 1 and
2 and demanding payment of GST claim of Rs.42,85,714/-.
9. In the mean time, the plaintiff received a show cause notice on
16.09.2022 from the GST authorities citing non-payment of GST. According to
the plaintiff, the first defendant is alone liable to pay the said sum of
Rs.42,85,714/- and the first defendant is equally liable to pay the accrued
interest, including penal interest which may be levied by the statutory
authorities. However, the plaintiff states that the Department is now proceeding
against the plaintiff for the liability of the first defendant.
10. It is the further case of the plaintiff that under the Deed of Assignment
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C.S(COMM DIV) No. 92 of 2023
dated 05.02.2018, specifically, the parties have agreed that the payment of GST
is to be made only by the defendants 1 and 2. The plaintiff also states that as
against the proceedings dated 01.12.2022 initiated by the Assistant
Commissioner (ST), Killpauk Assessment Circle by proceedings dated
01.12.2022, slapping a demand of Rs.4,36,02,000/- (Rupees Four Crores Thirty
Six Lakhs Two Thousand Only) towards GST arrears in respect of multiple
transactions including transactions between the plaintiff and the defendants 1
and 2. The plaintiff has approached the appellate authority and has also paid
10% viz., Rs.43,60,200/-(Rupees Forty Three Lakhs Sixty Thousand Two
Hundred Only). Hence the plaintiff has come forward with the present
Commercial Suit for a money decree against the defendants 1 and 2 directing
them to jointly and severally pay the plaintiff, Rs.1,22,66,092/-(Rupees One
Crore Twenty Two Lakhs Sixty Six Thousand Ninety Two Only) together with
interest at the rate of 24% per annum and also costs.
11. The defendants 1 and 2 have been set exparte on 06.07.2023. This
Court, by order dated 30.07.2024 finding that the newly impleaded statutory
authorities have also forfeited their right to file the written statement within the
prescribed time lines, directed the plaintiff to lead evidence. This Court has
framed the following issues on 14.07.2023:-
1. Whether the plaintiff had performed its part of
contract in the payment of Rs.7,50,00,000/- to the
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C.S(COMM DIV) No. 92 of 2023
defendants under the Deed of Assignment dated
05.02.2018?
2. Whether the defendants had raised invoices in
favour of the plaintiff for the payments made by it?
3. Whether the defendants are liable to pay the GST in
its entirety for the payments received from the plaintiff,
under the Deed of Assignment dated 05.02.2018?
4. In view of the order dated 01.12.2022 passed by the
GST authorities, are not the defendants liable to pay
the GST amount together with interest and penal
interest as levied, to the taxation authorities?
5. Is not the plaintiff entitled to claim the GST amount
payable by the defendants, being the suit claim amount
and as such, is not the suit to be decreed as prayed for
with costs against the defendants?
12. In view of the defendants 1 and 2 being set exparte, there has been no
occasion for any cross examination of P.W.1. Ex.P.1 is the Partnership Deed of
the plaintiff LLP. Ex.P.1 evidences the fact that the plaintiff has been in the
business of purchase and sale of copy right including dubbing rights of feature
films. Ex.P.2 is the Deed of Assignment dated 05.02.2018 under which the
defendants 1 and 2 have assigned sole and exclusive dubbing copy rights of the
film “ Saakshyam” to Hindi and other Indian languages except four southern
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C.S(COMM DIV) No. 92 of 2023
languages viz., Tamil, Telugu, Kannada and Malayalam.
13. Ex.P.2 evidences the fact that consideration for assignment is
Rs.7,50,00,000/-(Rupees Seven Crores Fifty Lakhs Only). By letter dated
26.07.2018, marked as Ex.P.4, the defendants 1 and 2 have informed the
plaintiff that GST will be paid by the defendants 1 and 2 and therefore,
believing the representation of the defendants 1 and 2 the plaintiff proceeded to
pay the entire sale consideration of Rs.7,50,00,000/-(Rupees Seven Crores Fifty
Lakhs Only) which is evidenced by ledger accounts, marked as Ex.P.5. Exs.P.6
and P.7 evidenced the fact that thought the defendants raised tax invoice along
with GST amount, the defendants have failed to remit the GST component of
Rs.42,85,714/-, despite receipt of entire consideration of Rs.7,50,00,000/-
(Rupees Seven Crores Fifty Lakhs Only) even in July 2018.
14. Demanding payment of GST amount of Rs.42,85,714/-, the plaintiff
has also sent an e-mail dated 15.03.2021, which has been marked as Ex.P.8. In
the mean time, the plaintiff has been issued with a show cause notice dated
16.09.2022 by the GST authorities, claiming a principal demand of
Rs.42,85,714/-, together with penal interest, totalling Rs.1,22,66,092/-(Rupes
One Crore Twenty Two Lakhs Sixty Six Thousand Ninety Two Only). It is the
specific case of the plaintiff that the plaintiff is not liable to meet the said
demand of the GST authorities and the defendants 1 and 2 are liable to pay the
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C.S(COMM DIV) No. 92 of 2023
same.
15. Since the defendants 1 and 2 are operating from Andhra Pradesh
which is beyond the jurisdiction of third respondent, proceedings have been
taken against the plaintiff, which is evidenced by Ex.P.9. Admittedly, the
plaintiff has challenged the demand and an appeal is pending before the
appellate authority under Ex.P.10. The plaintiff has also paid 10% of the total
demand, amounting to Rs.43,60,200/-(Rupees Forty Three Lakhs Sixty
Thousand Two Hunded Only) which is evidenced by payment receipt dated
30.03.2023 under Ex.P.11.
16. Ex.P.12 is the whatsapp conversation between the petitioner and the
defendants 1 and 2 in and by which the plaintiff has called upon the defendants
1 and 2 to pay the outstanding GST amount, as reflected in the GST portal. The
said letter has been marked as Ex.P.13.
17. It is only at the stage of arguments of the suit that the defendants 3
and 4 have been impleaded as proper and necessary parties. However, the
defendants 3 and 4, despite opportunities being given to file written statement,
they did not avail of that opportunity.
18. In fact, this Court also permitted the defendants 3 and 4, if advised, to
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C.S(COMM DIV) No. 92 of 2023
cross examine the plaintiff before the Additional Master while recording
evidence even though they had forfeited their right to file a written statement,
and such examination has also been completed on 07.08.2025.
19. From the evidence adduced on the side of the plaintiff and cross
examination of P.W.1 by the defendants 3 and 4, it is clear that the plaintiff has
been able to establish that the liability to pay GST amount is clearly on the
shoulders of the defendants 1 and 2. However, under Section 16 (2) of Central
Goods and Services Tax Act, 2017, it is open to the authorities to proceed
against the plaintiff as well, to recover any GST arrears that may be payable by
the defendants 1 and 2.
20. Admittedly, with regard to the recovery proceedings, a demand has
been made and an appeal is also pending and therefore, it is open to the
defendants 3 and 4 to work out their rights in the pending appeal and subject to
the result of the same, proceed against the plaintiff, if any need arises.
21. However, at the same time, there is no impediment for the plaintiff to
proceed against the defendants 1 and 2 for claiming a sum of Rs.1,22,66,092/-
(Rupes One Crore Twenty Two Lakhs Sixty Six Thousand Ninety Two Only),
together with interest at the rate of 24% p.a. from the defendants 1 and 2. The
defendants 1 and 2 having received the entire sale consideration of
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C.S(COMM DIV) No. 92 of 2023
Rs.7,50,00,000/-(Rupees Seven Crores Fifty Lakhs Only) and even in the terms
of deed of assignment, have bound themselves to the GST component and the
deed of assignment clearly evidences that the consideration of Rs.7,50,00,000/-
(Rupees Seven Crores Fifty Lakhs Only) is inclusive of GST. When the
plaintiff has already paid the sum of Rs.7,50,00,000/-(Rupees Seven Crores
Fifty Lakhs Only), then, it is the burden of the defendants 1 and 2 to pay the
applicable GST.
22. Unfortunately, the defendants 1 and 2 have committed default, which
has resulted in proceedings being initiated against the plaintiff by the
Department. The present suit, however, does not in any manner come in the
way of the statutory authorities taking recourse under law and proceed against
the plaintiff. The plaintiff, having paid the entire sale consideration, is entitled
to seek a recovery of the suit claim which represents the GST arrears together
with interest/penal interest.
23. Though in the plaint as well as in the proof affidavit, the relief sought
for is a direction against the defendants in general, in view of the fact that the
defendants 3 and 4 have been impleaded only at the stage of arguments, the
decree can at best be passed against the defendants 1 and 2 alone and not
against the defendants 3 and 4. In fact, after the defendants 3 and 4 were
impleaded, the plaintiff ought to have amended the prayer column also and
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C.S(COMM DIV) No. 92 of 2023
restricted the suit relief against the defendants 1 and 2 alone, which admittedly
has not been done. However, I cannot close my eyes and grant a decree as
prayed for in the facts and circumstances of the case.
24. In fine, the suit is decreed in part, directing the defendants 1 and 2,
jointly and severally to pay the plaintiff a sum of Rs. Rs.1,22,66,092/-(Rupees
One Crore Twenty Two Lakhs Sixty Six Thousand ninety two only), together
with interest at the rate of 24% interest per annum from the date of plaint till the
date of decree and thereafter at the rate of 6% from the date of decree till the
date of realisation. The defendants 1 and 2 shall also meet the costs of the suit
incurred by not only the plaintiff but also the defendants 3 and 4.
16-10-2026
Index: Yes/No
Speaking/Non-speaking order
Neutral Citation: Yes/No
SR
To
The Section Officer,
Original Side (Records),
High Court, Chennai.
Witnesses examined on the side of the plaintiff:
P.W.1. - Sanjay Lalwani
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C.S(COMM DIV) No. 92 of 2023
Exhibits produced on the side of the plaintiffs:
S.No
.
Exhibits Date Description
1. P-1 - Photocopy of the Certificate of
registration of the Plaintiff firm and
partnership agreement
2. P-2 05.02.2018 Original Deed of Assignment between
M/s Shri Abishek Pictures and M/s SPM
Arts LLP
3. P-3 21.02.2018 Photocopy of the payment request letter
sent by M/s Shri Abishek Pictures to M/s
SPM Arts LLP
4 P-4 26.07.2018 Photocopy of payment request letter sent
by M/s Shri Abishek Pictures to M/s SPM
Arts LLP
4. P-5 01.04.2017
to
31.03.2018
Photocopy of the Ledger Account of the
defendants
5. P-6 06.06.2018 Photocopy of Tax invoice raised by the
defendants
6. P-7 26.07.2018 Photocopy of Tax invoice raised by the
defendants
7. P-8 15.03.2021 Email sent from Sanjay Lalwani to
Abishek Nama
8 P-9 01.12.2022 Photocopy of the Proceedings of the
Assistant Commissioner (ST), Kilpauk
Assessment Circle addressed to the
plaintiff
9 P-10 10.03.2023 Photocopy of the Response letter by M/s
SPM Arts LLP to the Assistant
Commissioner (ST), Kilpauk Assessment
circle to the proceedings
10 P-11 30.03.2023 Photocopy of GST payment Receipt
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C.S(COMM DIV) No. 92 of 2023
11 P.12 - Photocopy of Whatsapp conversation
between Sanjay Lalwani and Abishek
Nama
12 P-13 ... Paper cutting Poster of the Feature Film
Ravanasur
13 P-14 02.04.2023 Photocopy of Letter sent from M/s SPM
Arts LLP to M/s Shri Abishek pictures
through GST portal with
acknowledgement.
Witnesses examined on the side of the defendants
Nil.
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C.S(COMM DIV) No. 92 of 2023
To
1. M/s.Shri Abishek Pictures and 3 others
Rep.by its Partner Abishek Venkat Nama,
having his office at Unit No.202, 2nd Floor,
Sagacity Heights, Kavuri Hills, Madhapur,
Hyderabad 81.
2. Abhishek Venkat Nama
Partner M/s.Shri Abishek Pictures, having his
office at Unit No.202, 2nd Floor, Sagacity
Heights, Kavuri Hills, Madhapur, Hyderabad
81.
3. The Assistant Commissioner (st)
Kilpauk Assessment Circle, No.F.50, 3rd floor,
1st avenue, Anna nagar, Chennai-104
4. Deputy Commissioner(gst Appeal)
Chennai-I, Chennai-06(Defendants 3 and 4 are
impleaded as per order dated 26.04.2024 in
A.No.1198/2024)
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C.S(COMM DIV) No. 92 of 2023
P.B.BALAJI, J.
SR
Pre-Delivery Judgment in
C.S(COMM DIV) No. 92 of 2023
16-10-2026
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