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Mehboob Productions (Pvt.) Ltd. Vs. Morion Pictures Association and ors. - Court Judgment

LegalCrystal Citation
CourtDelhi High Court
Decided On
Case NumberSuit Appeal No. 175 of 1973
Reported in10(1974)DLT299
ActsConstitution of India - Article 19(1)
AppellantMehboob Productions (Pvt.) Ltd.
RespondentMorion Pictures Association and ors.
Advocates: R.M. Lal,; I.C. Jain,; Sunita Nayar and;
Cases ReferredNagle v. Feilden. In
.....ruled that grant of relief by the court in the absence of concluded contract, was justified - - rose international had their office at bombay as well as at delhi. the motion pictures association registered these pictures and issued certificates in which it was clearly stated that the registration is only for the period of 11 months. motion pictures association is a powerful body. they say that some of their pictures are very popular with film fans and will do good business. the defense of the association is that they exist for the well being of their members and they are bound to protect their interests. 1,00,000.00 are satisfied. the result' of this obdurate attitude of the association is that mehboob productions cannot beallowed to screen their pictures at any of these 521 theatres,..........approached mohiuddin nizamuddin sayed who was carrying on business under the name and style of rose international. rose international had their office at bombay as well as at delhi. these 13 pictures were given to rose international for a limited period of 11 months, commencing from june 12,1969, and ending with may 11, 1970. they were free to exhibit these pictures during this period of 11 months. they became a member of motion pictures association at delhi and got registration of these 13 pictures with the motion pictures association for the period of 11 months. the motion pictures association registered these pictures and issued certificates in which it was clearly stated that the registration is only for the period of 11 months. motion pictures association is a powerful body.. if.....

Avadh Behari, J.

(1) Motion Pictures Association of Delhi is an company incorporated under section 25 of the Companies Act. It is non-profit making body consisting of produceps, distributors and exhibitors. Its members operate in. Delhi and U.P. It is a voluntary association. Its avowed object is:.

'To look after the welfare of all such persons or class of persons who are engaged in production, exhibition or distribution of films in India, particularly by safeguarding their rights and titles,-trademarks, trade-names and copy rights.'

(2) It has also an adjudicatory function. It settles disputes between the members of the association between all persons engaged in production, distribution and exhibition in Indian Film Industry and arbitrates among such contesting parties. Many exhibitors and distributors are its members. The counsel says its membership is in the neighborhood of 1100 or so.

(3) Mehboob Productions (P.) Ltd, are engaged in the production of films. Their registered office is at Bombay. They have produced many films. We are concerned with their 13 pictures names of which are given in paragraph 5 of the application. Mehboob Productions were interested in exhibiting these pictures in the territory of Delhi and U.P. They approached Mohiuddin Nizamuddin Sayed who was carrying on business under the name and style of Rose International. Rose International had their office at Bombay as well as at Delhi. These 13 pictures were given to Rose International for a limited period of 11 months, commencing from June 12,1969, and ending with May 11, 1970. They were free to exhibit these pictures during this period of 11 months. They became a member of Motion Pictures Association at Delhi and got registration of these 13 pictures with the Motion Pictures Association for the period of 11 months. The Motion Pictures Association registered these pictures and issued certificates in which it was clearly stated that the registration is only for the period of 11 months. Motion Pictures Association is a powerful body.. If adistributor wishes to exhibit his pictures in the territory of Delhi or U P. the rules of the Association prescribe that firstly he should become a member of the Association and pay the prescribed fee Secondly he should get his picture or pictures registered with the Association. If this procedure is followed then that distributor is entitled to have his pictures shown at all the theatres in Delhi and in U. P. 'which are members of the Association. If this is not done then the other members of the Association, viz., the exhibitors may refuse to deal with that. distributor and may refuse to show his films at their theatres. The period of 11 months for which these 13 pictures were registered with the Association -by Rose International expired long ago. Rose International later on became insolvent. Mehbood Productions, the plaintiff, are now intersted in releasing these pictures in the territory of Delhi and U.P. They say that some of their pictures are very popular with film fans and will do good business. Mehboob Productions, thereforee, applied for membership and registration of their 13 pictures on March 17, 1971. The Association considered the application. They found that certain members of their Association had advanced money to Rose International during the period of 11 months. Inreturn of those advances Rose International did not give the pictures to those theatres for screening. The members, thereforee, said that they had claims against these pictures. The Association issued circulars to its members when the application for membership and registration was made to them by Mehboob Productions. The first circular is dated September 16, 1970. In answer to this circular anumber of inembers put forward their claims before the Association and the aggregate amount of their claims is Rs. 45,643.15 under this circular. Another circular was issued on May 1, 1971. More claims were made. Their aggregate amount comes to Rs. 55,514.46. Nearly a lac of rupees is thus claimed by the members of the Association on the ground that they had advanced moneys to Rose International when the pictures W3re registered by the Association for a period of 11 months. The Association looked into the matter. They appointed two persons to mike their report on the application of the plaintiff for registration of 13.films. These members made areport. One of them said:

'lam of the opinion that since Mrs. M.N. Syed is ashareholder of Mehboob Productions (P) Ltd., Bombay we should recover the dues of our members against her husband Mr. M. N. Sayed the proprietor of Rose International, Delhi from Mehboob Productions (P) Ltd., Bombay the producers of pictures.'

This recommendati on was accepted by the executive committee of the Association on September 27, 1971. The wife of the proprietor of Rose International Mrs. M. N. Sayed is a shareholder in Mehboob Productions (P) Ltd. The Association thought that its members should be paid their claims by Mehboob Productions because the wife of the proprietor of Rose International also happened to be a shareholder in Mehboob Productions. This is what the recommendation means. On the acceptance of the recommendation the Association .infermed Mehboob Productions that if they are prepared to pay a lakh of rupees in settlement of the claims of its members they would admit them to their membership and register 13 pictures once again. If Mehboob Productions were not willing to accept this condition then they would reject the application for membership. This is how the matter stood on April 16, 1973 when the present suit was instituted

3. Mehboob Productions have now instituted this suit against the Association. They, claim a declaration and an injunction. They say that the association have no right to deny them the membership and the 'registration of the films. It is stated that the imposition of the condition of payment of Rs. l,00,000.00is unwarranted. They say that any claim against Rose International is a. claim against that particular distributor whose proprietor was Mr. M.N.Sayed. That claim cannot beenforced against Mehboob Produetions.., Then it is said that the registration of the pictures by Rose International was limited only to Ii months. That period having expired no claim can be made against the pictures of Mehboob Productions. They seek an injunction that the Association should be directed to withdraw all its circulars and instructions asking the members not to accept their pictures and not to deal with them.

The contesting defendant is the Association. Rose International have 'not appeared to contest the suit. They are insolvent. The defense of the Association is that they exist for the well being of their members and they are bound to protect their interests. Unless the claims of Rs. 1,00,000.00 are satisfied. by Mehboob, Prioductions they will not allow these pictures to be exhibited in their territory at the theatres of their members.

(4) There are about 466 exhibitor-members in U.P. and about 55 in the Union Territory of Delhi. The result' of this obdurate attitude of the Association is that Mehboob Productions cannot beallowed to screen their pictures at any of these 521 theatres,

(5) The counsel for the Association submits that there is no contractual' relationship between the plaintiff and the Association and, thereforee, they are well within their rights to refuse membership and registration to the plaintiff. He based his entire defense on the contractual nexus and says that the court cannot compel the Association to admit an outsider to its 'membership if that outsider is not willing to abide by its' rules ^nd regulations. He placed reliance on Nandan Pictures Ltd. v. Art Pictures Ltd, Shridhar Misra and others v. Jaichandra Vidyalanker, and Mahaliram v. Fort Gloster Jute . for the proposition that the court- will not interfere in the internal working or management of the Association. This is a well established principle in company law. The Association is a company and he says that this principle is equally-applicable to his case,

(6) The Association has a set of rules and regulations. It is necessary to refer to two of them. In the Articles of Association the following rule appear at Clause (vi) : : AIR1956Cal428

'No member shall release or deal with any rights of distribution of any pictures which has already been contracted by any other member and registered with and circulated by the Association, without fully protecting the prior rights' of the other members who may have an interest in the same or except with the previous sanction of the Executive Committeee to be obtained in writing in accordance with the rules which may be framed by the Executive Committee from time to time'

(7) In a letter dated March 27, 1^65, issued by the Association for the use of the members it is stated at item No. 19:

'No picture or pictures by aproducer against whom there is a claim of any member and also no picture in the producer against whom there is a claim of any member pending, and is directly or indirectly connected and interested in any capacity whatsoever will be registered by the Association, unless, some satisfactory solution of the payment of ihe dues of the member of the Association is made.'

(8) The spirit of these rules as well as of several others is this. If there is a claim of any of the members of the Association against a particular distributor and he applies to the Association for the registration of his pictures then other members shall not enter into any arrangement for taking his pictures and registration of-his picture will not be allowed to him unless a satisfactory arrangement is made by the Association for the recovery of the amounts due to the members from that distributor. If there are any prior rights of the members or the members have an interest of some sort, against that distributor the Association sees before registering these pictures that those claims are met or some satisfactory arrangement is made with regard thereto. In fact on the basis of these rules the- Association have refused registration. At one time Mehbood Productions invited the Film Producers Guild of Bombay to use their good offices in the settlement of the dispute with the Motion Pictures Association of Delhi. They made a request to them that they should exert pressure on the Motion Pictures Association at Delhi and request them to register their 13 pictures. This was in May, 1971. There was a joint meeting of the Bombay Guild and Motion Pictures Association Delhi Ok May 20, 1971. The joint tribunal decided that Rose International did not have any rights in the 13pictures and requested the Association to reconsider the question of the registration of 13 pictures at the instance of Mehboob Productions. Nothing appears to have happened as the Association having reconsidered the matter remained of the same Opinion as before. The counsel for the plaintiff does not dispute that the Association exists for the benefit of its members .and that its objects are Laudable. What he denies is the absolute and the unfettered discretion of the Association to refuse registration. In the Articles of Association the following rule confers this absolute discretion :

'The Executive Committee shall be empowered to prescribe the procedure and make regulations for admission, of members and the Executive; Committee in its absolute discretion may accept or reject the applications for. membership and it shall not be compulsory for it to assign any reason while rejecting an application for membership.'

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The counsel for the Association submits that the matter being in the absolute discretion of the Association and its executive Committee, they can reject the application of Mehboob Productions even without assigning any reason. Mehboob Productions have made an application for interim injunction under Order 39 rules 1 and 2, Civil Procedure Code and they say that the court should direct the Association to admit them to its membership on such. terms as the court considers fit so that these 13 pictures can be exhibited at 521 theatres of Delhi and U.P. The sole question is whether the court can intervene and direct the Association to admit the plaintiff to membership and register his 13 pictures. As I have already said the Motion Pictures is a powerful body. It has great' powers. It operates as closed shop. It can direct its members not to deal with non-members and not to screen their pictures at their theatres. They can by means of their resolution put a person out of business. .Without their sanction members of the Association would have no business dealings with outsiders. They have a virtual-monopoly and control over the film industry. If no member of the Association is prepared to deal with Mehboob Productions then they cannot have any of the good theatres in Delhi or U. P. for exhibition. It was suggested by the. counsel for the Association that there are non-members operating in these territories and they are free to deal with the plaintiff. The non-members are not first class cinerma houses. Some of these are only touring talkies. Mehboob Productions think that their pictures are not of such inferior quality as should be shown in these cinemas. They want them to be exhibited in first class theatres. If the court is powerless to do anything in this matter it means that these pictures cannot be exhibited and the plaintiff can be deprived of earning their livelihood. The power of the Association is so great that they can prevent a person from earning his livelihood by asking its 'members not to deal with him. The Association exercises a virtual monopoly in an important field of human activity. By refusing the application of Mehboob Productions they can put them out of business. This is a great power. If it is abused, can the courts give redress That is the question. The counsel for Mehboob Productions submits that the trial of the suit may take years and by the time the suit is decided there may not bemany persons interested in these pictures because bythen the pictures may become stale and go out of fashion. Many exhibitors may rot like to show them at their theatres. He disputes that the claim againast Rose International can be enforced against Mehboob Productions. It is submitted that under the rules of the Association the claim can be made only against Rose International if they once again ask for the registration of these 13 pictures. If Rose International is not the applicant and the period of 11 months of their original registration has expired then the plaintiff are not bound to pay the claims against Rose International for the. registration of these pictures. It was said that under the rules there is no lien of the members on the 13, pictures. At best there is a claim against Rose International but Rose International are now insolvent. The plaintiff is otherwise-prepared to abide by the rules of the membership. They are prepared to pay the fee. The counsel for the Association submits that they cannot be compelled to admit the plaintiff to membership unless the claims of its members are satisfied. What interim arrangement should be mad before the controversy between the parties is decided What should be the terms of the injuaction if the Association are to be compelled not to place obstuction in the plaintiff's way of exploiting their pictures The plaintiff's counsel has suggested that he is prepared to furnish a bank guarantee in the sum of Rs. 80,000.00. This guarantee will continue. as long as the suit continues. If it is found that the plaintiff is liable for the liabilities incurred by Rose International, then the amount can. be paid ouf of this bank guarantee. If it is ultimately found after the .trial' of the suit that the plaintiff is not. liable for any of those claims then they will not be asked to pay. The amount ofRs. 80,000.00 has been arrived at because three members who lodged their claims in 1970 71 have written to the Association withdrawing their claims, I think bank guarantee of Rs. 80,000.00 would meet the ends of justice. The suggestion is reasonable and just. Precisely this question arose before the Court of Appeal in Eagland in Nagle v. Feilden. In that .case a woman applied to the stewards of the, Jockey Club for a license. She was a trainer of racehorses for many years. It was the practice of the stewards to refuse to grant atrainer's license to a woman in any circumsitances. She brought an action against the stewards claiming inter alias 3 declaration that the practice of the stewards in refusing a trainer's license to any woman was void as against public policy and an injunction ordering the stewards to grant her. a license. 'Her claim was dismissed by judge of first instance on the ground that she had no cause of action. She appealed. The Court of Appeal held. that the plaintiff could 'maintain an action for declaration and injunction and could succeed if she was able to show that the exercise of discretion vested in the stewards was capricious and unreasonable. Lord Deenning M. R. said :

'The common law of .England has for centuries recognised that a man has a right to work at his trade or profession without being unjustly excluded from it. He is not to be shut out from it at the whim of those having the governance Of it. If they make a rule which enables them to reject his application arbitrarily or capriciously, not reasonably, that rule is bad.'

And again: 'We live in days when many trading or professional associations operate closed shops'. No person can work at his trade or profession except by their permission. They can deprive him of his livelihood. When a man is wrongly rejected or ousted by one of these associations, has he no-remedy? I think he may well have, even though he can show no contract. The courts haye power to grant him a declaration that his rejection and ouster was invalid and an injunction requiring the association to rectify their error.' The Master of Rolls went on to say :

'THEtrue ground of jurisdiction in all these cases is a man's right to work. I have said before, and I repeat it now, that a man's right to work at his trade or profession is just as important to him as perhaps more important than his rights of property. Just as the courts will intervene to protect his rights of property, they will also intervene to protect his right to work.'

Salmon L.J. said:

'One. of the principal functions of our courts is, whenever possible, to protect the individual from injustice and oppression. It is important, perhaps today more than ever, that we should not abdicate that function. The principle that courts will protect a man's right to work is well recognised in the stream of authority relating to contracts in restraint of trad. The courts use their powers in 'the interests of the individual and of the public to safeguard the individual's right to earn his living as he will and the public's right to the benefit of his labours.'(1)

(1) After the Court of Appeal's decision the action was compromised and the plaintiff was granted her trainer's license. If amonopolistic self elected body Which controls what today is a nationwide industry in which they can effectively prevent any one from earning a living the question is : Have the courts no power to intervene and protect a man against an unreasonable restraint upon his right to work to which he has in no way agreed but which a monopoly group with no authority, save that which it has conferred upon itself, seeks capriciously to impose upon him If a candidate has been capriciously and unreasonably refused admission, it is certainly arguable that the law will intervene to protecthim. If the Association reject him arbitrarily and capriciously there is ground for thinking, as Lord Denning said, that the courts will have jurisdiction to see that the predominant power weilded by these authorities over the exercise of a trade or profession is not abused. It was urged - before me that the Association had an unrestricted power to admit, or refuse to admit, any person whom they chose. This argument in truth rests upon contractual noxus I think we have outgrown the days when we required a thoroughly artificial nexus of contract on which to hang a theory of court's jurisdiction. The law looks at the reality of the situation. The man will be completely ruined if the courts were to tell him that they were powerless in the face of the uncontrolled discretion of the Association and that they cannot protect his right. to work when it is being denied to him capriciously and without my proper consideration of the merits of his case by the dictatorial exercise of powers by a body which holds a virtual monopoly, in that trade, business or profession. Right to work which was emphasised by the Court of Appeal is of special significance to us. This right is enshrined in the Constitution. The Constitution guaranties to all citizens the right to practice any profession or to carry onanyoccupation, trade or business (Art. 19(1)(g) ). The right will become illusory if persons whose livelihood is involved are left at the mercy of decisions made by monopolistic associations which control certain trades in which no man can earn his living unless he is admitted to membership of the association. The Court of Appeal spoke of the 'right to work' in ringing terms I would call it the 'right to trade'. That expression is more appropriate to our case. Exclusion of a parson from membership of the Association may be an unreasonable denial to a person of the opportunity to pursue his chosen means of earning his living. There are now beginning to appear some signs that if the defendant does as a matter of fact enjoy a discretionary power which puts him in aposition to prevent the plaintiff from exercising his means of livelihood, then some duty is owed by him. to the plaintiff as regards the employment of that power, If there is an abuse of monopoly power over a person's means of livelihood the court is not powerless to circumscribe the unfettered right of an association to exclude a person from the membership of the association. Declaration and injunction are remedies which are in the discretion of the court. A declaration or injunction can be obtained by a person so excluded even in the absence of tort or breach of contract, as the law can act to protect a person against capricious or unreasonable denial of his right to work There is some reason for thinking, thereforee, that anew head of liability in tort or a new right, the 'right to work', is beginning to develop. (Winfield on tort, 9th Ed. page 505-506). Let me examine the Association's case for refusal to admit Mehboob Productions to its membership. The avowed reason, as would appear from the report of the members, is that since Mrs. Syed, wife of proprietor of Rose International is a shareholder of Mehboob Productions the, Association thought they would be justified in refusing membership unless the dues of its members are paid. This by itself is no ground in law. Mehboob Productions (P) Ltd. is a separate and distinct entity from its shareholders. Mehboob Productions have attributed malice and had faith to the Association in refusing membership. It is said that seven of the 13 pictures are such against which no advances were made. The Association's refusal to register all 13 pictures would not be in conformity with their own rules. These questions are to be determined in the suit. The plaintiff's case is arguable and there is ground for thinking that courts can examine the reasons which prevailed with the Association. The court has the power to issue injunction restraining a defendant from committing 'other injury of any kind' (Order 39, rule 2, Civil Procedure Code ). The plaintiff in this case, I think, has a prima facie case. The question for decision will be whether Mehboob Productions are liable to pay Rs. 80.000.00 which the members claim due to them from Rose International The balance of convenience requires that the pictures should be allowed to be exploited and should not be allowed to become old and worthless. The plaintiff shall suffer irreparable injury and there shall be no standard for ascertaining damages if they ultimately succeed in the suit and it is found that the Mehboob Productions are in no way liable for what Rose International did or failed to do. I would, thereforee, issue an injunction against the Association and direct them not to put obstacles in the release and exhibition of the 13 pictures of Mehboob Productions in Delhi and U.P. Circuit. The Association is directed to enroll the plaintiff as a member and register its 13 pictures provided the plaintiff furnishes bank guarantee in the sum of Rs. 80.000.00 to the satisfaction of the Registrar of this court within four weeks from to day. The Association will scrutinize the claims of its members against Rose International after giving the plaintiff an opportunity to be present at the hearing of these claims. The Association will submit their report to the court and finally in the suit it will be determined whether the plaintiff is liable for the claims scrutinised by the Association. The parties, are, however, left to bear their own costs.

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