And Movie Productions Llp vs Echelon Productions
- Court
- Bombay High Court
CNR No : HCBM020345452026
2026:BHC-OS:22712
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AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMM ARBITRATION PETITION (L) NO.34544 OF 2026
AND Movie Products LLP
… Petitioners
Vs.
1. Echelon Productions
ATUL
GANESH
KULKARNI
2. Vishal Rana
3. Khyati Harendra Shah … Respondents
Digitally signed
by ATUL
GANESH
KULKARNI
Date: 2026.10.19
14:32:55 +0530
Mr. Ashish Kamat, Senior Advocate with Mr. Rashmin
Khandekar, Mr. Ashwin Bhadang, Mr. Arpit Choudhary,
Mr. Krunal Mehta, Ms. Karen Koya, Ms. Akshata Modi,
and Mr. Varun Dhond i/by King Stubb & Kasiva for the
Petitioners.
Mr. Anand Mohan with Mr. Lavin Hirani, and Mr. Clint
G. Thattil i/by Mr. Vikramaditya Chavan for the
Respondents.
CORAM : AMIT BORKAR, J.
DATED : OCTOBER 19, 2026
JUDGMENT:
1. By filing the present Petition under Section 9 of the
Arbitration and Conciliation Act, 1996, the Petitioner seeks urgent
interim protection to secure the amount in dispute and to protect
the subject matter of the arbitration.
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2. The subject matter is a Hindi cinematograph film titled “Tu
Hai Meri Kiran”, starring Sonakshi Sinha, Zaheer Iqbal and others
(hereinafter referred to as “the said Film”). The Petitioner and
Respondent No. 1 have jointly produced the said Film and are its
joint owners under an Agreement for Co-Production effective from
27 March 2024 (hereinafter referred to as “the said Agreement”).
According to the Petitioner, it invested a total amount of
Rs.8,85,00,000/-, comprising Rs.7,50,00,000/- towards its share of
the investment and Rs.1,35,00,000/- towards GST. Though the
Respondents received this amount and were bound under the
Agreement to return it, they have failed to do so. Further, the
cheque issued by Respondent No. 1 for Rs.7,50,00,000/- was
dishonoured in January 2026 because payment was stopped. The
Respondents have now announced the theatrical release of the said
Film on 23 October 2026. According to the Petitioner, this
proposed release is in breach of its rights under the said
Agreement, including its lien over the Film, its joint ownership
rights, its right to give consent and its right to receive the agreed
credits. According to the Petitioner, the following facts led to the
filing of the present Petition. The Petitioner and Respondent No. 1
entered into an Agreement for Co-Production effective from 27
March 2024 for jointly producing the Hindi cinematograph film
“Tu Hai Meri Kiran” (hereinafter referred to as “the said Film”).
Under the said Agreement, the Petitioner was required to invest
Rs.7,50,00,000/- plus GST towards the production of the Film. In
return, the Petitioner was given joint ownership and rights to
commercially exploit the Film. Between 19 March 2024 and 16
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January 2025, the Petitioner paid the entire investment amount of
Rs.8,85,00,000/- towards the production of the Film. However,
despite receiving the amount, the Respondents failed to provide
proper accounts, copies of production agreements, receipts for
payments and other details showing how the investment amount
had been used and how the rights in the Film had been exploited.
The Petitioner claims that it fully performed its obligations under
the said Agreement. It called upon Respondent No. 1 to provide a
statement of expenses along with supporting payment receipts, as
required under Clauses 4.4.2 and 6 of the said Agreement.
3. The Petitioner states that, on 1 January 2026, after its
repeated demands, the Respondents acknowledged their liability
and assured the Petitioner that its investment amount would be
repaid. To discharge this liability, Respondent No. 1, through
Respondent No. 2, issued Cheque No. 310772 dated 1 January
2026 for Rs.7,50,00,000/-. However, the cheque was dishonoured
and returned unpaid, as recorded in the bank return memo dated
2 January 2026. On 12 January 2026, the Petitioner, through its
Advocate, issued a legal notice-cum-demand notice to the
Respondents. The Respondents sent a holding reply on 17 January
2026. Thereafter, the Petitioner filed a complaint, being Criminal
Case No. 35824 of 2026. The Petitioner lodged a complaint with
the Police Commissioner, Lucknow, Uttar Pradesh, alleging that the
Respondents had committed offences of fraud, cheating and
criminal breach of trust. Subsequently, on 1 October 2026, the
Respondents released a poster of the said Film and announced that
it would be released in theatres on 23 October 2026. On 1 October
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2026, the Petitioner sent an email to Respondent No. 1 calling
upon it to return the investment amount, provide details of all
agreements relating to production and exploitation of the Film,
and comply with its obligations under the said Agreement. These
obligations included respecting the Petitioner's lien over the Film,
its joint ownership rights and its right to give consent. On 5
October 2026, Respondent No. 1, through its Advocate, sent a
holding reply. According to the Petitioner, Respondent No. 1 has
neither complied with the requests made in the email dated 1
October 2026 nor returned the investment amount, even though
the final date of 2 October 2026, prescribed under Clause 5.3 of
the said Agreement, had passed. The Petitioner alleges that the
Respondents are proceeding with the theatrical release and
commercial exploitation of the Film on 23 October 2026 without
making the Petitioner a confirming party to the relevant
agreements or obtaining its consent. The Petitioner apprehends
that the Respondents have entered into agreements or made
arrangements with third parties for exploiting the theatrical,
satellite, digital, music and other rights in the Film without its
consent and without involving it. In these circumstances, the
Petitioner has filed the present Petition.
4. Mr. Kamat, learned Senior Advocate appearing for the
Petitioner, submitted that Respondent No. 1 has committed the
following material breaches of the said Agreement.
(i) Respondent No. 1 has failed to return the Petitioner's
investment amount of Rs.8,85,00,000/-, comprising
Rs.7,50,00,000/- towards the Petitioner's share of the
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investment and Rs.1,35,00,000/- towards GST at 18%.
According to the Petitioner, the amount was required to be
returned on or before 27 April 2025 and, in any case, by 2
October 2026. This failure is alleged to be in breach of
Clauses 5.3 and 5.8 of the said Agreement.
(ii) Respondent No. 1 failed to complete production of the
Film and provide the First Copy within nine months. It failed
to commercially exploit the rights in the Film within thirteen
months. According to the Petitioner, these failures are in
breach of Clauses 4.1, 5.8 and 11.1(i) of the said Agreement.
Respondent No. 1 has failed to issue the necessary no-
objection certificates (NOCs) to ensure that the revenue
earned from exploitation of the Film is paid directly to the
Petitioner, as required under Clause 5.8.
(iii) Respondent No. 1 has allegedly entered into
arrangements or agreements with third parties, including
PAM Studios and Saregama India Limited, for exploiting the
Film without obtaining the Petitioner's prior consent and
without making it a confirming party to those agreements.
Mr. Kamat pointed out that the logos of these two entities
appear on the poster of the Film. He submitted that such
conduct is in breach of Clauses 5.1, 5.2 and 11.2(b) and (c)
of the said Agreement.
(iv) Respondent No. 1 has allegedly brought third-party
producers, co-producers or investors into the Film without
complying with the terms of the said Agreement. According
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to the Petitioner, this is in breach of Clauses 4.8, 8.1, 9.1 and
10.1.
(v) Respondent No. 1 has issued and circulated publicity
material, including the poster of the Film, which does not
mention the name of Mr. Pankaj Chauhan and omits the
agreed credit “Produced by Echelon & AND Movie
Productions”. The poster describes the Petitioner only as an
“associate”. Mr. Kamat submitted that this is contrary to the
agreed credits and the Petitioner's rights under Clauses 8.2
and 8.3 of the said Agreement.
(vi) Respondent No. 1 has failed to provide copies of
production agreements within five days of their execution. It
has failed to furnish accounts, statements of expenses and
supporting payment receipts. According to the Petitioner,
these failures are in breach of Clauses 4.4.2, 6 and 11.2(d) of
the said Agreement.
(vii) Respondent No. 1 is proceeding with the release and
commercial exploitation of the Film even though, according
to the Petitioner, its lien over the Film and the revenue
earned from it continues to exist. Mr. Kamat submitted that
this conduct is in breach of Clauses 5.3, 11.1(g) and 11.2(a)
of the said Agreement.
(viii) Respondent No. 1 has failed to provide details of any
sale of the satellite and digital rights of the Film. According
to the Petitioner, these details were necessary to enable it to
obtain a better offer, as contemplated under Clauses 5.1, 5.2
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and 11.2(b) and (c) of the said Agreement.
(ix) Respondent No. 1 has allegedly entered into
arrangements or agreements for theatrical distribution of the
Film without obtaining the Petitioner's prior consent and
without making it a confirming party to those agreements.
Mr. Kamat submitted that the announced theatrical release
date of 23 October 2026, as mentioned on the poster,
indicates that arrangements for the release are being made.
According to him, this conduct is in breach of Clauses 5.1,
5.2 and 11.2(b) and (c) of the said Agreement.
5. Mr. Kamat submitted that the Film is a copyrighted work and
any consent required under the Co-Production Agreement must be
given in writing. He submitted that the cheque dated 1 January
2026 for Rs.7,50,00,000/- was issued long after the expiry of the
thirteen-month period agreed between the parties for payment of
the amount. According to him, this circumstance shows that the
cheque was issued towards repayment of an existing liability.
Therefore, the Respondents cannot avoid their liability by
contending that the cheque was issued only as security. Referring
to the email exchanged in October 2026, Mr. Kamat submitted that
its terms show how the parties understood and acted upon the said
Agreement. He argued that once the parties had recorded their
agreement in writing, occasional acts or conduct could not take
away the rights which had accrued to them under that Agreement.
He submitted that the Petitioner's right to receive revenue earned
from the Film is an independent right granted under the
Agreement. It cannot be treated merely as a method of recovering
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the investment amount. He contended that the alleged
collaboration relied upon by the Respondents is not inconsistent
with the written terms of the Agreement. According to him, the
Respondents had requested the Petitioner to post a particular
message on social media. The Petitioner accepted that request and
posted the message. Such conduct, he submitted, cannot be
treated as giving up the Petitioner's contractual rights. Mr. Kamat
submitted that the Petitioner is entitled to enforce Clauses 5.1 to
5.3 of the said Agreement.
6. Per contra, Mr. Mohan, learned Advocate appearing for the
Respondents, submitted that the Agreement for Co-Production
effective from 27 March 2024 (hereinafter referred to as the “Co-
Production Agreement”) was entered into for investing in the
production of the film “Tu Hai Meri Kiran” (hereinafter referred to
as the “Film”) and for commercially exploiting it. According to
him, the Petitioner was not merely a financier who had provided
money for making the Film. It was a partner in the venture, as is
stated in the Petition. The Respondents have invested a substantial
amount of money and spent about two years in making the Film,
which required considerable time, effort and hard work. The
Petitioner's investment was secured by the Film and the lien over
it. Mr. Mohan submitted that the Petitioner has approached this
Court seeking an injunction on the false ground that the scheduled
release of the Film on 23 October 2026 would put its right to
recover the investment amount at risk. According to him, there is
no truth in this allegation.
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7. Mr. Mohan submitted that the Petitioner's present stand is
directly contrary to its own conduct. According to him, the
Petitioner and Mr. Sarvesh Goel have actively promoted and
publicised the release of the Film on 23 October 2026, in
collaboration with the Respondents, Saregama and PAM. He
contended that the very foundation of the Petition is false and
misleading. The Petitioner now claims to have an objection to the
release of the Film on 23 October 2026 and to the involvement of
PAM and Saregama. It relies on these very circumstances to claim
that urgent protection is required under Section 9 of the
Arbitration and Conciliation Act, 1996. However, according to Mr.
Mohan, the Petitioner's own conduct does not support this claim.
He submitted that on several dates in October 2026, from the date
of filing the Petition until at least 15 October 2026, Mr. Sarvesh
Goel used his own and the Petitioner's Instagram profiles to
promote the release of the Film on 23 October 2026, in
collaboration with Respondent No. 1. Through these posts, the
Petitioner not only approved and accepted the announced release
date but publicly encouraged the release. At the same time, it
approached this Court claiming that the very same release should
not be permitted. The Respondents have placed illustrative
material showing these posts and activities in a compilation
marked as Exhibit “1”.
8. Mr. Mohan submitted that, on 30 September 2026, the
Respondents informed Mr. Sarvesh Goel through WhatsApp, “Sir
kal poster drop karenge” (meaning, “Sir, we will drop the poster
tomorrow”). They asked him to provide his “insta tag”, meaning
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the Instagram handle of the Petitioner which could be tagged in
the promotional post. Mr. Sarvesh Goel replied by providing the
Instagram handles “Sarvesh.goel” and “and productions”.
Thereafter, on 1 October 2026, the announcement post, which the
Petitioner has annexed to the Petition as Exhibit K, announced “IN
THEATRES 23 OCTOBER 2026”. The post tagged @sarvesh.goel,
@andproductions, @saregama_official and @pamstudioofficial.
On 5 October 2026, the Petitioner willingly agreed to collaborate
in publishing the promotional post on Instagram. Mr. Mohan
submitted that the Petitioner had thus actively supported and
participated in promoting the release of the Film on 23 October
2026. The post prominently displayed the logos of Saregama and
PAM. Their Instagram handles were mentioned in the caption
alongside the Petitioner's own handle. According to Mr. Mohan,
the above posts and conduct of the Petitioner show that it publicly
supported and accepted the very circumstances which it now relies
upon to seek relief in the present Petition. These circumstances
are: (i) the scheduled release of the Film on 23 October 2026 in
collaboration with Respondent No. 1; (ii) the appearance of the
logos of Saregama and PAM on the publicity and promotional
material relating to the Film; and (iii) the involvement of
Saregama and PAM, whose Instagram handles appeared in the
promotional posts alongside the handles of the Petitioner, Mr.
Sarvesh Goel and Respondent No. 1. Mr. Mohan submitted that the
Petitioner cannot now rely upon these very circumstances as
grounds for seeking an injunction.
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9. Mr. Mohan emphasised that accepting a collaboration
request on Instagram is not merely a passive act. According to him,
it amounts to actively approving and supporting the post because a
person is shown as a “collaborator” only after accepting the
request to collaborate on that particular post. He submitted that
the Petitioner could not have been shown as a collaborator unless
it had actively accepted the collaboration request. In support of
this submission, the Respondents have annexed an extract from
the Instagram Help Centre, available on the website
Instagram.com, which is marked as Exhibit “2”. According to Mr.
Mohan, this extract explains that collaborative posts on Instagram
are co-authored by the persons who collaborate on them.
10. Mr. Mohan submitted that the apprehensions expressed by
the Petitioner are misplaced and are based on suspicion rather
than any actual event. He made the following statements to clarify
the Respondents' position.
(i) The Respondents have not commercially exploited the
Film or any rights relating to it by excluding the Petitioner.
(ii) Contrary to the Petitioner's allegation, no agreements
have been executed with third parties without making the
Petitioner a confirming party.
(iii) The Respondents have no intention of entering into
any such agreements by excluding the Petitioner. In support
of this statement, Mr. Mohan referred to an email dated 13
October 2026 sent by Respondent No. 1, which states: “I
want to be clear that Echelon has not signed any agreement
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granting any third party any exploitation rights in the film
yet, which will only be done as per the terms of our
agreement.”
(iv) By the same email, Respondent No. 1 informed the
Petitioner about the offers received for the overseas
theatrical rights and music rights of the Film so that the
Petitioner could consider them. Respondent No. 1 stated that
formal agreements should be entered into promptly to obtain
the best possible value. It stated that the final drafts would
be shared “for your review and signature as a confirming
party”. According to Mr. Mohan, the Petitioner has not
replied to this email.
(v) The Respondents have not received any money from
any third party towards the sale or exploitation of any rights
in the Film.
(vi) The Respondents have acted in accordance with the
Co-Production Agreement and intend to continue complying
with its terms.
11. Mr. Mohan submitted that the Petitioner's main argument is
that the release of the Film should be restrained because, unless
the money earned from its commercial exploitation is secured, the
Petitioner's security and lien over the Film may become ineffective.
According to the Petitioner, if the Film is released without securing
the revenue, it may ultimately be left with only a paper decree,
which it may not be able to enforce in practice. Mr. Mohan
submitted that this argument does not justify restraining the
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release of the Film.
12. Mr. Mohan submitted that the Petitioner's own case shows
that releasing the Film would help increase its commercial value
and generate revenue. According to him, the Petitioner is seeking
to prevent the very activity which could increase the value of the
asset that it claims to protect. He pointed out that the Petitioner
has stated in the Petition that “the bulk of a film's revenue is
realised from the theatrical release.” He referred to the Petitioner's
email dated 1 October 2026, in which the Petitioner called upon
Respondent No. 1 “to ensure that the entire revenues generated
from the exploitation rights of the said Film are be paid directly to
us for recovery of our Investment Amount”.
13. Mr. Mohan submitted that the Respondents were ready to
address the Petitioner's concerns and had made the following
commitments.
(i) The Respondents have never intended to commercially
exploit the Film or its rights by excluding the Petitioner. They
undertake not to do so in the future either.
(ii) Every rupee earned from any form of exploitation of
the Film can be deposited into an account specified by this
Court or by the Petitioner, so that the money can be dealt
with in accordance with the Co-Production Agreement.
(iii) The Respondents have not entered into, and will not
enter into, any contracts relating to the Film without
including the Petitioner as a confirming party required to
sign the contracts.
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(iv) The Respondents will ensure that the credits given in
relation to the Film are in accordance with the Co-
Production Agreement.
14. Mr. Mohan submitted that the cheque issued by Respondent
No. 1 was only an additional security for a possible future liability.
According to him, at that stage, the liability had not been finally
determined and the amount payable, if any, had not been
calculated. He contended that there was no question of any fixed
or admitted amount becoming payable before the Film was
commercially exploited and the revenue from it was received.
According to him, only after calculating the revenue earned from
the Film and comparing it with the investment amount would it be
possible to determine whether there was any shortfall and, if so,
the amount which remained payable. He submitted that the
cheque could not be treated as an acknowledgment of an admitted
and payable liability of Rs.7,50,00,000/-.
15. Mr. Mohan submitted that the Petitioner's conduct in
accepting and participating in the Instagram collaboration shows
that it had consented to the release of the Film. He accepted that,
under the Co-Production Agreement, the Film could not be
released without the Petitioner's consent. However, according to
him, such consent need not be inferred only from a separate
written communication. It can be gathered from the conduct of the
parties. He relied upon Section 63 of the Indian Contract Act,
1872, to submit that the conduct of a party may be considered
while determining whether consent has been given. He contended
that, on reading the Co-Production Agreement as a whole, it
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becomes clear that the commercial release of the Film is the means
by which the investment made by the Petitioner is expected to be
recovered.
16. Mr. Mohan invited my attention to the Petitioner's email
dated 1 October 2026. According to him, the contents of this email
show that the Petitioner understood the consent requirement
under the Co-Production Agreement to mean that the amount
invested by it would be recovered from the income earned through
commercial exploitation of the rights in the Film. He submitted
that the Petitioner's own understanding of the Agreement and its
conduct do not justify restraining the release of the Film. On this
basis, he contended that the Petitioner was not entitled to the
interim relief sought in the present Petition. In support of his
submissions, Mr. Mohan relied upon the following judgments:
Jagad Bandhu Chatterjee vs. Nilima Rani & Others, 1969 SCC
OnLine SC 419; The Godhra Electricity Co. Limited & Another vs.
The State of Gujarat & Another, (1975) 1 SCC 199; Chairman,
State Bank of India & Another vs. M.J. James, (2022) 2 SCC 301;
Brihan Karan Sugar Syndicate Private Limited vs. Yashwantrao
Mohite Krushna Sahakari Sakhar Karkhana, (2024) 2 SCC 577; the
judgment of the Division Bench of this Court in Minco India
Private Limited vs. Minco India Flow Elements Private Limited,
Commercial Appeal (L) No. 1600 of 2006, decided on 18 March
2026; and the order dated 28 July 2026 passed by a learned Single
Judge of this Court in Interim Application (L) No. 224149 of 2026
in Comm IP Suit (L) No. 24129 of 2026, in the matter of Pushker
Sona & Another vs. Swambhu Media Network Private Limited &
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Others.
REASONS AND FINDINGS:
17. I have heard the arguments of Mr. Kamat, learned Senior
Advocate for the Petitioner, and Mr. Mohan, learned Advocate for
the Respondents.
18. At the beginning, it is necessary to understand what was the
agreement between the parties. The Petitioner has not given a loan
to Respondent No. 1. Both parties agreed under the Co-Production
Agreement to jointly produce the Film. They agreed to have rights
in the Film jointly and to use those rights for commercial purposes
according to the conditions of the agreement. The total production
budget was fixed at Rs.15,00,00,000/-, with applicable GST. Each
party agreed to contribute Rs.7,50,00,000/-, with applicable GST.
The Petitioner says that it has paid its entire contribution of
Rs.8,85,00,000/-. At present, there is no material before me to
show that the Petitioner has not paid the amount which it had
agreed to pay.
19. It is not correct to consider the Petitioner's rights only as a
right to get back the money. The agreement gives it rights in
relation to the Film, its commercial exploitation, the way in which
agreements with third parties are to be made and the credits which
have to be given in the Film and its publicity material. Though all
these rights arise from the same agreement, they have to be looked
at separately. Even if the money claimed by the Petitioner is
secured, that will not bring its other rights under the agreement to
an end. The important clause for deciding the present dispute is
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Clause 5.3 of the Co-Production Agreement. It reads as follows:
“It is hereby agreed that Echelon shall ensure that the entire
Investment Amount is returned to AMPL on or before expiry
of 13 months from the Effective Date or 3 weeks prior to the
first release of the Audio Visual Content whichever is earlier.”
20. This clause gives the time by which the investment amount
has to be returned. The agreement came into effect on 27 March
2024. Thirteen months from that date ended on 27 April 2025.
The Film is now proposed to be released on 23 October 2026, and
three weeks before that date would be 2 October 2026. The words
“whichever is earlier” have an important meaning. They show that
the date which comes first is the date which has to be followed.
Here, 27 April 2025 came much earlier than 2 October 2026.
Therefore, on the plain reading of Clause 5.3, the obligation to
return the investment amount had become due on 27 April 2025.
The later announcement about the release of the Film cannot
extend the time which had expired. The Petitioner's demand
referring to 2 October 2026 indicates that the amount had not
been returned even before the announced release date.
21. Mr. Mohan submitted that the Petitioner was to recover its
investment from the revenue which would come from commercial
exploitation of the Film. According to him, no fixed amount was
payable until the Film was commercially exploited, revenue was
received and the amount which remained unrecovered from that
revenue was worked out. This argument has to be considered by
reading the whole agreement and not by looking at only one
clause. Clause 5.4 deals with the manner in which the revenue and
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the expenses of the Film are to be accounted for and recovered.
Clause 5.8 deals with situations where production is not
completed, the exploitation rights are not commercially used
within the prescribed period, or the revenue is not enough to
recover the investment amount. These clauses cannot be read by
keeping Clause 5.3 aside. Clause 5.3 provides the time for
returning the entire investment amount. Clause 5.8 gives
protection to the investing party in the situations stated in that
clause. If the intention of the parties was that the Petitioner should
wait until the Film earns sufficient revenue, without any fixed time
for repayment, there was hardly any need to provide thirteen
months for returning the investment. If the Respondents'
interpretation is accepted, the time limit in Clause 5.3 would have
no real meaning. Therefore, I am not able to accept the argument
that no repayment liability could arise until the Film was
commercially exploited and the final shortfall was calculated. The
clauses relating to revenue have to be read together with Clause
5.3. They cannot be read in such a way that the clear obligation to
return the investment within the agreed time is taken away.
22. There is material which supports the Petitioner's case that
Respondent No. 1 had accepted the obligation to repay the
amount. On 1 January 2026, Respondent No. 1, through
Respondent No. 2, issued a cheque for Rs.7,50,00,000/-. The
cheque was returned unpaid on 2 January 2026. According to the
Petitioner, it was dishonoured because payment had been stopped.
At this stage, the Respondents have not established that the cheque
was issued only as security for an amount which might become
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payable at some uncertain future time. Mr. Mohan argued that the
cheque was only additional security and that issuing it did not
mean that the amount written in it was accepted as payable to the
Petitioner. At present, I am unable to accept this explanation as
enough to answer the Petitioner's case. The cheque was issued
after the period mentioned in Clause 5.3 had expired. The amount
of the cheque is equal to the Petitioner's investment contribution,
excluding the GST which forms part of its total claim. This
circumstance supports the Petitioner's case that the repayment
obligation had become due. However, it does not finally decide
every part of the liability.
23. It must be made clear that the dishonour of the cheque alone
does not finally decide the liability of the parties. The cheque does
not establish that Respondent No. 2 is personally liable to repay
the investment under the Co-Production Agreement. But when the
cheque is considered along with the clear repayment clause, the
receipt of the investment amount and the failure to return it, the
Petitioner has made out a strong prima facie case for securing the
amount in dispute.
24. The next issue is about Clauses 5.1 and 5.2 of the Co-
Production Agreement. Clause 5.1 provides that the exploitation
rights in the Film have to be dealt with jointly by the parties and
that the Petitioner must be made a confirming party to every
exploitation arrangement or agreement. Clause 5.2 says that the
relevant agreements with third parties are to be entered into by
Respondent No. 1, with the Petitioner being made a confirming
party. It requires the Petitioner's prior consent before any such
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arrangement is agreed upon or entered into. Clause 11.2 puts
restrictions on transferring, licensing or assigning rights unless the
agreed conditions are followed, including the condition of prior
written consent. The purpose behind these clauses is not difficult
to understand. The Petitioner had a right to take part in decisions
concerning the commercial exploitation of the Film. It was not
expected to put in the investment and then remain outside the
arrangements through which the Film would earn money. The
requirement that the Petitioner should be made a confirming party
is a protection given to it under the agreement. It cannot be
treated as something which is done only for the sake of formality.
The Respondents have stated that they have not entered into any
agreement with a third party for exploitation of the Film without
making the Petitioner a confirming party. They have relied upon
the email dated 13 October 2026, in which they stated that no
agreement granting exploitation rights had yet been signed.
According to them, the draft agreements would be shared with the
Petitioner for its review and signature as a confirming party.
25. This statement of the Respondents has to be considered. On
the material available, I am not prepared to give a finding that the
Respondents have signed all the third-party agreements alleged by
the Petitioner. The mere fact that the logos of PAM Studios and
Saregama India Limited appear on a poster does not prove that a
binding agreement for exploitation of the Film has been signed.
However, offers for overseas theatrical rights and music rights have
been received, the release of the Film is proposed and commercial
arrangements for the release are approaching. These circumstances
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show that commercial exploitation is near. The Petitioner is not
required to wait until an agreement contrary to the contract is
actually signed and third-party rights are created before it can
approach the Court for protection.
26. I now come to the main argument of Mr. Mohan. He
submitted that the Petitioner had promoted and supported the
release of the Film on Instagram. The Respondents rely upon the
WhatsApp communication dated 30 September 2026, the
announcement post dated 1 October 2026 and the Petitioner's
acceptance of the Instagram collaboration request on 5 October
2026. Their argument is that the Petitioner cannot first publicly
support the release and then ask the Court to stop it by an
injunction.
27. The material shown by the Respondents indicates that the
Petitioner took part in promoting the Film and the announced
release date of 23 October 2026 through the Instagram
collaboration. The tags of Saregama and PAM were present in the
promotional post. This conduct cannot be ignored while deciding
whether the Petitioner should get an injunction. The Court cannot
look only at what is stated in the Petition and ignore conduct
which has a direct connection with those allegations. However, the
effect of this conduct has to be understood carefully. The Petitioner
seeks protection because its investment has not been returned and
its rights under the contract are said to be in danger. Its request for
an injunction is not without any condition. It seeks to prevent the
release and exploitation of the Film until the investment amount,
together with interest, is deposited in Court. For deciding this
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request, it is not necessary to hold that the Petitioner was against
the release of the Film in every possible situation. There is a
difference between agreeing to promote the announcement of a
Film and agreeing to give up the contractual right to get back the
investment. In the same way, accepting an Instagram collaboration
post is not the same thing as giving prior consent to the terms of a
commercial exploitation agreement. Both acts are different and
their effect may be different.
28. The legal position about waiver has been held by the
Supreme Court in Jagad Bandhu Chatterjee , paragraph 5. In that
case, the Supreme Court considered Section 63 of the Indian
Contract Act, 1872, and observed:
“A waiver is nothing unless it amounts to a release. It
signifies nothing more than an intention not to insist upon
the right”.
29. The Court held that under Section 63, a promisee may give
up or reduce the performance of a promise, either wholly or partly,
or accept some other form of satisfaction. It is not necessary in
every case that there must be an agreement or consideration for
such waiver.
30. The principle is that a person can give up a right by his
conduct. But the conduct has to be considered in relation to the
particular right which is said to have been given up. The question
is not only whether the Petitioner did something which is different
from what it is saying now. The real question is whether, by doing
that act, the Petitioner intended to give up the right which it is
now trying to enforce. The Petitioner's participation in the
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Instagram collaboration shows that it approved the promotional
post and the announced release date. Therefore, it cannot now say
that it had no knowledge of the announcement or of the PAM and
Saregama logos appearing in that particular post. Nor can it say
that it had opposed those features from the very beginning. This
conduct is relevant when its request for removal of that particular
publicity material is considered. But the post does not show that
the Petitioner intended to release Respondent No. 1 from the
obligation to return Rs.8,85,00,000/-. It does not show that the
Petitioner agreed to allow third-party exploitation agreements to
be signed without its consent or without making it a confirming
party. Such an intention cannot be assumed merely because the
Petitioner helped in promoting the Film. There is no material to
show that the Petitioner agreed to change Clause 5.3 or gave up
the repayment obligation which had become due.
31. The judgment of the Supreme Court in Godhra Electricity
Co. Ltd., is relevant. In paragraphs 11 and 16 to 18, the Supreme
Court considered whether the later conduct of the parties could be
used to understand the meaning of a written contract. The Court
accepted that the conduct of the parties may help in understanding
a term which is not clear. At the same time, it made a distinction
between using conduct to understand an unclear provision and
using conduct to change a provision which is clear. In paragraph
16, the Supreme Court stated:
“If the meaning of the word or phrase or sentence is clear,
extrinsic evidence is not admissible. It is only when there is
latent ambiguity that extrinsic evidence in the shape of
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interpreting statement in which both parties have concurred
should be admissible.”
32. This principle applies to the present dispute. The Instagram
posts and the later conduct of the parties may help in
understanding the extent to which the Petitioner approved the
publicity and the proposed release. But Clause 5.3 fixes the time
for repayment. Clauses 5.1 and 5.2 state the role of the Petitioner
in exploitation arrangements. The Instagram collaboration does
not make these clauses unclear. It cannot be used to create a
different arrangement under which the Petitioner must wait until
revenue is earned or the Respondents can enter into exploitation
agreements without involving the Petitioner. The conduct of the
parties may help the Court in understanding their agreement. But
unless there is sufficient material to show that they intended to
change the agreement, such conduct cannot be used to remove an
obligation which has been written in it.
33. The Respondents have relied upon the principle of
acquiescence. In M.J. James , paragraph 39, the Supreme Court
held that acquiescence may arise when a person having a right
stands by while another person acts against that right, and the
conduct of the person having the right shows approval or
acceptance. The Court held that acquiescence may be direct, by
express approval, or indirect, where the conduct of the person
having the right reasonably shows acceptance. In paragraph 40,
the Supreme Court held that acquiescence is different from mere
delay. It stated that “acquiescence implies active assent”. It may
prevent a person from later complaining about violation of a right
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if that person's conduct amounts to acceptance of the violation.
34. The judgment in Brihan Karan Sugar Syndicate (P) Ltd,
paragraph 19, recognises that acquiescence may be a defence in a
claim concerning infringement of copyright. The Supreme Court
observed that acquiescence means conduct which is not consistent
with a claim to exclusive rights. It applies to positive acts and not
merely to silence or inaction. Mere negligence is not sufficient.
35. These principles support the Respondents' objection to some
extent. The Petitioner's conduct was not only silence. It accepted
the collaboration request and took part in promoting the Film. This
conduct must be given its proper effect. But acquiescence has to be
examined with reference to the particular right and the particular
act which was accepted. A person may approve a poster or a
release announcement without agreeing to give up a separate right
to repayment or the right to be made a confirming party to future
exploitation agreements. Further, paragraph 41 of M.J. James
requires the Court to consider whether the other party has suffered
prejudice, whether its position has changed and whether third-
party rights have been created. In this case, the Respondents say
that considerable money, time and effort have been spent in
making the Film. I accept that these circumstances are relevant. An
order which stops the release, without giving the Respondents an
opportunity to secure the Petitioner's claim, may cause serious loss.
However, the Respondents have not shown that allowing the Film
to be released after securing the Petitioner's claim would cause
similar prejudice to them. The relief must be framed after
considering the interests of both sides.
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36. The principles relating to equitable relief have been
considered in Minco India Private Limited , paragraphs 19 and 20.
The Court referred to the principle that a person seeking an
injunction must bring all important facts to the notice of the Court.
It reproduced the observation in Dalglish v. Jarvie:
“It is the duty of a party asking for an injunction to bring
under the notice of the Court all facts materials to the
determination of his right to that injunction; and it is no
excuse for him to say that he was not aware of the
importance of any fact which he has omitted to bring
forward.”
37. The Court discussed the principles which have to be
considered while granting an interim injunction. These include
whether there is a genuine issue to be decided, which side will face
greater inconvenience, whether there is a possibility of harm which
cannot be compensated by money, and whether public interest
requires protection.
38. These principles require the Court to consider the Petitioner's
conduct before granting the relief sought. The Instagram
collaboration was an important circumstance. The Petitioner had
to explain its conduct while alleging that the release
announcement and the presence of PAM and Saregama in the
promotional material were against its rights. However, the
Petitioner's participation in the promotional collaboration does not
remove the repayment obligation which had become due much
earlier. It does not prove that the Petitioner agreed to the signing
of commercial agreements without its confirmation. I am not
convinced that the entire Petition should be rejected only because
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the Petitioner took part in promoting the Film. At the same time,
this conduct is against granting an unconditional injunction which
would stop the release merely because the Petitioner now objects
to the announced date or the visible association of PAM and
Saregama. The protection must be aimed at the contractual rights
which continue to be in danger.
39. Mr. Mohan submitted that the theatrical release would
increase the value of the Film and bring revenue from which the
Petitioner's investment could be recovered. This is an important
argument. The Petitioner has stated that a substantial part of the
revenue from a Film is normally earned through theatrical release.
If the release is stopped for an unlimited time, the commercial
value of the Film, in which both parties claim rights, may be
reduced. The Respondents have stated that no third-party
exploitation agreement has been signed, no money has been
received from any third party, and every rupee earned from the
Film can be deposited into an account designated by the Court or
the Petitioner. They have stated that they will not enter into any
agreement without making the Petitioner a confirming party and
that they will ensure that the agreed credits are given.
40. These statements show that the Respondents are ready to
take steps to protect the Petitioner's interests. But an assurance
that future revenue will be deposited is not the same as securing
the investment amount which had to be returned by April 2025.
Similarly, a promise to involve the Petitioner in future agreements
does not secure the amount covered by the dishonoured cheque.
There is no clear material before me to show that the Respondents
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are able to return the entire amount if the Film does not earn
enough revenue. The accounts and production details sought by
the Petitioner have not been fully placed before the Court. The
proposed release is approaching. After the Film is released and its
rights are commercially used, agreements with distributors and
other third parties may be completed. Revenue may be received
and spent. If the Petitioner's rights are not protected before these
things happen, it may become difficult for it to get effective relief
later. The Respondents' proposal to deposit future revenue is a
useful safeguard. However, it does not sufficiently protect the
investment amount which has become due.
41. In my view, the proper way is not to stop the Film from being
released in every situation. Such an order would not consider the
money, time and effort spent by the Respondents in producing the
Film and the possibility of earning revenue from its release. At the
same time, it would not be proper to allow the Film to be released
and commercially exploited without securing the Petitioner's
investment, when the agreement provides for repayment and the
prescribed period has expired. A balance can be maintained by
directing the Respondents to deposit the entire investment
amount, together with the contractual interest claimed, in Court as
security. The money will not be paid to the Petitioner at this stage.
It will remain secured until the claims are finally decided in
arbitration or orders are passed. Once the security is deposited, the
Film may be released, provided the other terms of the Co-
Production Agreement and the directions given below are
followed. If the Respondents do not provide the security, the
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restriction on release will continue. This arrangement protects the
Petitioner's claim for money without stopping the Respondents
from commercially exploiting the Film. It protects the Petitioner's
contractual rights relating to joint exploitation, prior consent, its
position as a confirming party and the agreed credits. For these
reasons, the balance of convenience is in favour of granting
protection subject to conditions.
42. The Petitioner has asked for a direction requiring the
Respondents to disclose all agreements and arrangements relating
to the Film, including those concerning theatrical distribution,
satellite, digital, OTT, music and other exploitation rights. This
request deserves to be granted. The Respondents have stated that
no binding exploitation agreement has been signed. However, they
have admitted that offers for overseas theatrical rights and music
rights have been received. The email dated 13 October 2026 refers
to these offers and states that draft agreements would be shared
with the Petitioner for its review and signature as a confirming
party.
43. In these circumstances, disclosure is necessary to know the
actual position and to avoid any later dispute about whether an
agreement was entered into before or after this order. The
disclosure must cover agreements signed, proposed agreements,
term sheets, offers, and arrangements which are under
consideration. It must include production agreements and details
of amounts received or which are to be received. If no agreement
has been signed in any particular category, the Respondents must
say so in their affidavit. A general statement that no agreements
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have been signed will not be sufficient when specific offers and
draft agreements are available.
44. The question of producer credits needs to be considered.
Under Clauses 8.2 and 8.3 of the Co-Production Agreement, the
parties agreed how producer credits should be given and how the
logos of the production houses should appear in the publicity
material. The agreed credit includes the words “Produced by
Echelon & AND Movie Productions”. The Petitioner's case is that
the poster does not mention the name of Mr. Pankaj Chauhan in
the credits and describes the Petitioner only as an “associate”. The
Respondents have stated that they will ensure that the agreed
credits are given. This statement is in accordance with the written
agreement. The Petitioner's participation in the Instagram
collaboration is relevant while considering its objection to that
particular publicity material. However, the material before me does
not show that the parties had agreed to change Clauses 8.2 and
8.3, or that the Petitioner gave up its right to receive the agreed
credits in all future publicity and in the Film. The Respondents
must ensure that all publicity material under their control,
including posters, trailers, teasers and digital promotional
material, contains the credits and logo required under the
agreement. Any existing material which does not follow the
agreement must be corrected or withdrawn, as may be required.
The Respondents cannot treat the Petitioner's participation in the
Instagram collaboration as a general permission to ignore the
agreed credit provisions in future.
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45. The Petitioner's request to restrain the Respondents from
selling, transferring, licensing, assigning or otherwise creating
third-party rights in the Film requires protection. Clauses 5.1, 5.2
and 11.2 contain clear conditions relating to joint exploitation,
prior consent and the Petitioner's right to be made a confirming
party. These conditions must continue to be followed even after the
investment amount is deposited in Court. The deposit will secure
the monetary claim. It will not transfer the ownership or
exploitation rights of the Petitioner to Respondent No. 1. The
statement of the Respondents that they will not enter into
exploitation agreements without making the Petitioner a
confirming party must be recorded and followed. In the same way,
the information and revenue arising from exploitation of the Film
must be dealt with according to the Co-Production Agreement. The
Petitioner is entitled to the benefit of the revenue arrangements
under the agreement and to receive the information needed to
check the amounts received and receivable. The Respondents must
maintain proper accounts and provide statements of revenue and
expenditure, together with supporting records, as required under
the agreement.
46. For these reasons, the Petition deserves to be allowed in
substantial part, with suitable conditions to protect the rights of
both parties. The following order is passed.
(a) The Petition is allowed in the following terms:
(b) Respondent No. 1 shall deposit in this Court, within
three working days from the date of this order, the sum of
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Rs.8,85,00,000/-, together with interest at the rate of 15%
per annum calculated from the respective dates on which the
Petitioner paid the investment amounts, until the date of
deposit. The deposit shall be made as security for the
Petitioner's claim and shall be without prejudice to the rights
and contentions of the parties in arbitration. The amount
shall not be released to either party without order of this
Court or an appropriate order in the arbitration proceedings;
(c) Until the deposit directed above is made, the
Respondents, by themselves or through their partners,
servants, agents, associates, affiliates, representatives,
distributors, licensees, assigns or any person claiming
through them, shall not release, exhibit, distribute, broadcast
or otherwise commercially exploit the Film titled “Tu Hai
Meri Kiran”, including through theatrical, satellite, digital,
OTT, music or any other mode;
(d) Upon making the deposit under clause (b), the
Respondents may proceed with the theatrical release of the
Film, subject to compliance with the remaining directions in
this order and the Co-Production Agreement. Such
permission shall not be treated as dispensing with the
Petitioner's contractual rights relating to joint exploitation,
prior consent or confirming-party status;
(e) Within five working days from the date of this order,
the Respondents shall file an affidavit disclosing all
agreements, arrangements, offers, term sheets, memoranda
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and understandings relating to the Film, including those
concerning theatrical distribution, overseas theatrical rights,
satellite rights, digital and OTT rights, music rights and all
other exploitation rights. Copies of all executed agreements
and the available drafts, offers and term sheets shall be
annexed to the affidavit. The affidavit shall disclose all
production agreements executed in relation to the Film and
all amounts received or receivable under each arrangement.
Where no agreement has been executed in a particular
category, the Respondents shall state so on affidavit;
(f) The Respondents shall not enter into any agreement
for the distribution, exhibition, licensing, transfer,
assignment or commercial exploitation of the Film without
complying with Clauses 5.1 and 5.2 and the applicable
provisions of Clause 11.2 of the Co-Production Agreement.
The Petitioner shall be made a confirming party to every
such agreement, and the prior consent required under the
Agreement shall be obtained. The Respondents shall not
create any third-party right in a manner contrary to these
provisions;
(g) The Respondents shall ensure that all revenue
generated from the commercial exploitation of the Film is
received and accounted for in a separate designated account.
The account details shall be disclosed to the Petitioner and
placed on record by affidavit within three working days. The
revenue shall be dealt with in accordance with the Co-
Production Agreement, and no amount shall be diverted or
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withdrawn in a manner contrary to its terms. The
Respondents shall provide the Petitioner with regular
statements of receipts, expenditure and amounts payable,
together with supporting records, as required under the
Agreement;
(h) Within forty-eight hours from the date of this order, the
Respondents shall ensure that publicity material under their
control, including posters, trailers, teasers and digital
promotional material, carries the credits and logo required
by Clauses 8.2 and 8.3 of the Co-Production Agreement.
Existing material which does not comply shall be corrected
or withdrawn, as necessary. The Respondents shall not issue
publicity material in breach of the agreed credits;
(i) Respondent No. 2 shall not, either directly or through
any person acting on his behalf, assist in or permit any act
contrary to the directions contained in this order. However,
in the absence of material establishing an independent
personal guarantee or other separate basis of personal
repayment liability, no separate direction is passed at this
stage requiring Respondent No. 2 personally to deposit the
investment amount;
(j) The findings recorded in this order are for deciding the
present Petition for interim measures. They shall not be
treated as a final decision on the claims or defences of either
party in arbitration. All questions concerning final liability,
accounts, interest and the parties' rights in the Film are left
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open for determination in the appropriate proceedings;
(k) There shall be no order as to costs.
47. At this stage, learned Advocate for the Respondents seeks
stay of the Judgment. However, considering the reasons recorded
in the Judgment, the request for stay is rejected.
(AMIT BORKAR, J.)
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