The Sholay litigation saga

In recent years, ‘Sholay’ has come to be known not just for its value as a commercial movie but also for the litigation saga involving it. (For more details regarding the same, see our posts on the Vodafone dispute here and here, the dispute with Universal, the suit against Greenpeace, the controversy surrounding Ram Gopal Varma's sequel and against the production of Sholay in 3D)   The latest additions to this are two orders passed by the Delhi High Court in the matter of Sholay Media and Entertainment Pvt. Ltd. v. Indus Video Pvt. Ltd. 

The first order issued on the 4th of April, 2013 was with respect to the confirmation of an ex-parte ad-interim order filed by Sholay Media and Entertainment Pvt. Ltd. (hereafter ‘SMEPL’). The ex-parte ad- interim order had been granted on 6th April, 2010, by the Delhi High Court in favour of SMEPL and it continued in force until the present order was passed. The defendants, Indus Video Pvt. Ltd (hereafter ‘Indus’) claimed that the copyrights of ‘Sholay’ and other films listed in the plaint was assigned to it by Shri. Ajit Sippy. Indus further assigned these copyrights to Moser Baer India Ltd. and Moser Baer Entertainment Ltd. 

The issue of whether Shri. Ajit Sippy could have validly assigned the copyrights of ‘Sholay’ and the other films has already been discussed by the Delhi High Court at an interim application stage in Sholay Media and Entertainment Pvt. Ltd. v. Ajit Sippy. (This development had been looked at in Prashant’s post, available here) In such order, issued in 2010, the Delhi High Court had restrained Shri. Ajit Sippy from exercising any rights with respect to the copyrights of ‘Sholay’ and 31 other films. The 2010 order was based on the following reasons: G. P. Sippy was the owner of the copyright who transferred these rights to a partnership firm named Sippy Films. On the dissolution of the partnership firm, owing to the death and the resignation of two partners respectively, the partnership became a proprietorship, following which the rights of ‘Sholay’ were further assigned to SMEPL and those of the 31 other films to Generation Three Entertainment Pvt. Ltd. (hereafter ‘GTEPL’). The fact that the rights had been assigned to SMEPL was further evidenced when it is observed that the later assignment deeds were signed by G.P. Sippy as a confirming party, in his capacity as chairman of SMEPL and GTEPL. Moreover, the Court noted that the doctrine of indoor management could not be invoked in this case, as the defendant was not an innocent third party observer, who was unaware of the inner workings of a company. Therefore, an interim order was passed in favour of SMEPL and GTEPL.

The Delhi High Court, in the 4th April, 2013 order noted that while its decision was not based on the interim order of 6th April, 2010, the fact that an order had been issued against Shri. Ajit Sippy coupled with the fact that Moser Baer India Ltd. had chosen not to contest, indicated that the balance of convenience was in favour of SMEPL. The other two condition required for granting an interim injunction, namely, prima facie case and irreparable injury was also satisfied in this case. The Court rejected the defendant’s contention that there was no irreparable loss and injury in the instant case, simply because SMEPL had claimed for damages. 

Indus appealed against this interim order of 4th April, 2013 and an order with respect to such appeal was issued by the Delhi High Court on 29th May, 2013. The Delhi High Court, in this order, noted that on facts, the three conditions that were required to be satisfied for an interim injunction were satisfied in the instant case. Additionally, the Court stated that it had been held by the Supreme Court in Wander Limited v. Antox Private Limited, that a Court when exercising its appellate jurisdiction should not interfere with the discretion of a Court of first instance and substitute its own discretion unless the Court of first instance can be “shown to have exercised its discretion arbitrarily, capriciously or issued an order ignoring settled principles of law.” As none of these conditions were satisfied in the instant case, the High Court stated that the appeal was dismissed.