Bombay HC rules on Zanjeer Controversy

As previously blogged (here and here), the judgment in respect of the Arbitration Petition in the Zanjeer remake controversy was pronounced yesterday (available here). The matter was between Adai Mehra Production Pvt. Ltd. (‘petitioner’/‘AMPL’) and Sumeet and Puneet Mehra (‘respondents’). 

Though one of our readers has succinctly summarized the sequence of the dispute (here) a brief perusal of the relevant background is as follows - 

The petitioner entered into co-production agreement with Fly Turtle Films for the production of the remake of ‘Zanjeer’. However, when this agreement was concluded the petitioner did not have the rights to the remake the film (the rights allegedly were with the respondents). It was only after this deal got some publicity did the respondents realize that the petitioner has concluded such an agreement without their consent. The respondents then asked the petitioner to desist from unauthorized use of their rights but later agreed to conclude a contract with them for the same. Under the contract, payments were to be made in 12 installments and AMPL was made the perpetual owner and copyright holder of the remade film. Rights under the contract were given only for the remake of Zanjeer and no other film. The contract also included an arbitration clause for dispute resolution. 

Meanwhile, after the petitioner had paid two installments, the script-writers of the original film (Javed Akhtar and Salim Khan) claimed moral rights in the remake and also claimed that their permission for the remake had not been obtained. They also said that they had never authorized Prakash Mehra Productions (PMP – respondents are the heirs to PMP) or any person to make a cinematographic film on the basis of the original screenplay. They therefore asked Amit Mehra and PMP to obtain a license for the remake. 

The petitioner asked the respondents to furnish title documents so as to establish PMP's ownership in the screenplay and underlying works of the original film. Failing which the petitioner would not pay the next installment. However, the respondents merely informed the petitioner that the copyrights vest exclusively with PMP but no documents were produced. They also alleged that the claims made by the scriptwriters were frivolous and untenable in law and if the scriptwriters took legal action they were ready to defend the same. This lead to refusal of payment of the third installment and that in turn lead the respondents to invoke the arbitration clause. 

During arbitration, the arbitrator granted interim reliefs to the respondent in as much as it temporarily restrained the petitioner from proceeding with the production of the remake. It was this order that lead the petitioner to file the present arbitration petition. This court then stayed the interim injunction given by the arbitrator and added that the film shall not be released without obtaining specific orders from the Court. 

The court subsequently heard the parties and came to the following conclusion – 

The court first undertook an inquiry into whether the Copyright Act, 1957 confers separate rights for cinematographic film and literary works. The court answered this in the affirmative after reading the definition of ‘work’ and ‘author’ conjointly with Section 13 and 14 of the Act. Given that a copyright in the literary work in a cinematograph film is capable of separate existence the court went on to analyze the impact of such a scheme on the present dispute. 

The script-writers had claimed that the rights for use of the script was given to PMP only for one film i.e. the original Zanjeer and therefore their copyrights in the literary work continued even after the production of original film ‘Zanjeer’. 

The court accepted this claim based on a conjoint reading of Section 17 and 19 of the Act. Under this scheme, unless there is contract of employment or service or apprenticeship by the author of the copyright in favour of a third party, the author continues to be the owner of the copyright of the said work. In the present case, since the respondents were unable to show a written agreement whereby the authors had contracted away all their rights in the script, the court concluded that the authors remain the owners of the copyrights in the script. Also, since Section 19 mandates that assignment of a copyright must be through a written agreement signed by the assignor and no such assignment agreement was produced by the respondents, this clearly showed that no further rights vest in PMP with regard to the script. Moreover, the script-writers established their ownership over the script by showing that they had independently licensed Zanjeer’s script for a Tamil remake of the said film titled “Sirithu Vazha Vendum” released in 1974. 

Given these facts, the court went on to refute most of the arguments raised by the respondents in relation to the petitioner’s continued exercise and exploitation of rights under the contract thereby showing that the petitioner had admitted to the respondent’s title in the said works. The court, however, relying on various provisions of the Contract Act, the Sale of Goods Act and Transfer of Property Act concluded that even if the petitioner (the purchaser) had knowledge of the alleged title of the respondent (the seller), the respondent is not absolved from his obligation to clear his title. Therefore, the court was of the prima facie opinion that the petitioner was not liable to pay the third installment. This was because despite repeated requests to furnish a copy of the said assignment agreement showing that the authors had assigned all their rights in the script, the respondents did not furnish the same. Moreover, since the contract itself had a clause for extension of time due to default of payment, time was not the essence of the contract. 

Therefore, during pendency of arbitration, the petitioner was allowed to proceed with remaking of the film ‘Zanjeer’ on the condition that petitioner deposits a particular sum to the Court. However, the release of the said film would be subject to the final outcome of the arbitration proceedings.