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Magnum Films Vs. Golcha Properties Pvt. Ltd. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtDelhi High Court
Decided On
Case NumberSuit No. 407 of 1983
Judge
Reported inAIR1984Delhi162; 2003(5)DRJ103
ActsArbitration Act, 1940 - Sections 20
AppellantMagnum Films
RespondentGolcha Properties Pvt. Ltd.
Advocates: M.C. Bhandare and; Ramesh Chandra, Advs
Excerpt:
arbitration act 1940 - sections 20 and 41--whether the terms of the contract which are clear and unambigous can be modified by reference to other matters such as usage, custom or trade practice.; that the custom or a trade practice cannot modify an express term hence no injunction can be granted on that basis. - - 52,000.00 as well as the term of minimum collection of rs......as in force in the state of haryana, to the union territory of delhi regarding fixation of the cinema rates and its approval by the licensing authority, delhi. writ petitions were modified challenging the action of the government. golcha cinema also filed a writ petition. during the pendency of the writ petition interim rates of admission were fixed by the court as follows -- balcony rs. 7.60 rear stall rs. 6.40 middle stall rs. 5.60 front stall rs. 4.40 by virtue of these rates the weekly collection of the full house of golcha cinema comes to rs. 78,211.00 . these rates were subject to final orders of the court. by an order dated 20th december, 1982 a division bench of this court dismissed the writ petition of the exhibitors. a special leave petition was filed in the supreme court.....
Judgment:

Sultan Singh, J.

(1) THE plaintiffs filed a suit under Section 20 of the Arbitration Act for filing of the agreement and reference of the disputes to arbitration relating to agreement dated 3rd May, 1982. The plaintiffs also filed an application (I.A. No. 1255 of 1983) under Section 41 of the Arbitration Act for an injunction restraining the defendant from interrupting or interfering with the continuous screening of the picture 'Nikaah' at Golcha Cinema till it collects a minimum sum of Rs. 58,186.43 per week and to continue its running on payment of Rs 46,549.15 only per week. On 22nd March, 1983 summons of the suit and notice of the application were issued to the defendant for 19th April, 1983 and ex parte injunction was issued restraining the defendant from in any manner interrupting or interfering with the continuous screening of the picture 'Nikaah' at Golcha Cinema, Delhi till the box office collections of the picture cover the minimum hold over figure of Rs. 58,186.43 per week. The defendant was served and it filed an application (I.A. No. 1434 of 1983 under Section 151 of the Code of Civil Procedure for vacation of the injunction on the ground that it was contrary to the express term of the agreement between the parties. With the consent of the parties, the main petition under Section 20 of the Arbitration Act and this injunction were heard today.

(2) BY a separate order I have held that the disputes have arisen relating to the agreement dated 3rd May, 1983 and with the consent of parties Shri Kamal Barjatiya of Rajshree Pictures Private Ltd. has been appointed as an Arbitrator for settlement of disputes between the parties. The question remains whether the plaintiffs are entitled to the injunction as above. Briefly the facts are that on 3rd May, 1982 the plaintiffs wrote a letter to the defendant staling that they were holding the distribution rights of the picture 'Talaq Talaq Talaq'. The name of the picture is now 'Nikaah' as admitted by both the parties. The plaintiffs have distribution rights of the picture 'Nikaah' for the territories of Delhi and U.P. They agreed to pay theatre hire at Rs. 52,000.00 per week for 28 shows. It was further stated that the picture would run at the theatre so long as it collects a minimum sum of Rs. 65,000.00 per week for 28 shows. The other terms were to be as per rules of the Motion Pictures Association, Delhi. The Director of the defendant company also signed this letter. The terms of the agreement between the parties are thus embodied in the letter dated 3rd May. 1982 form the plaintiff to the defendant and the rules of the Motion Picture Association.

(3) THE plaintiffs have alleged that on or before 15th December, 1980 the weekly full house capacity of Golcha Cinema was Rs. 70,012.60. The rates of admission were Rs. 7.00 per ticket for the Balcony and R.s. 5.00 per ticket for the lower class. The exhibitors had raised admission rates unilaterally. A Writ Petition was filed in this court wherein it was observed that the Delhi Administration had no right to control the rates of admission. Subsequently, .the Central Government extended the provision of the Punjab Cinema Regulation Act, 1952 as in force in the State of Haryana, to the Union Territory of Delhi regarding fixation of the cinema rates and its approval by the licensing authority, Delhi. Writ petitions were modified challenging the action of the Government. Golcha Cinema also filed a writ petition. During the pendency of the writ petition interim rates of admission were fixed by the court as follows --

Balcony Rs. 7.60 Rear Stall Rs. 6.40 Middle Stall Rs. 5.60 Front Stall Rs. 4.40

By virtue of these rates the weekly collection of the full house of Golcha Cinema comes to Rs. 78,211.00 . These rates were subject to final orders of the court. By an order dated 20th December, 1982 a Division Bench of this court dismissed the writ petition of the exhibitors. A Special Leave Petition was filed in the Supreme Court challenging the order of this court, It is stated that the Supreme Court has refused stay of operation of the order of this court as far as fixation of admission rates are concerned. The result is that the exhibitors are not entitled to enhance rates of admission but are bound to revert to the old rates which were existing on 15th December, 1980. In the case of Golcha Cinema, as already stated, the admission rates were Rs. 7.00 per ticket for Balcony Class and Rs. 5.00 per ticket for the lower class.

(4) THE learned counsel for the plaintiffs submits that the admission rates stand .reduced and thereforee the plaintiffs are entitled to proportionate reduction in the agreed weekly hire of Rs. 52,000.00 as well as the term of minimum collection of Rs. 65,000.00 per week, and the defendant be restrained from interrupting in the running of the picture so long as minimum collection per week is Rs. 58,186-43 of 28 shows.

(5) CLAUSE 4 of the agreement dated 3rd May, 1982 reads as under :

'THAT the picture will run at your theatre so long as it collects a minimum of Rs. 65,000.00 per week for 28 shows'.

Learned counsel submits that as the rates of admission have been reduced the capacity of the full house which was previously for Rs. 78,211.00 is reduced to to Rs. 70,01260, that the weekly hire though agreed was Rs. 52,000.00 per week also stands reduced to Rs. 46,549.15 per week. As regards the minimum weekly box collection he submits that the same is also liable to be reduced to Rs. 58,186.43 paise In other words, he submits that the picture 'Nikaah' will continue to run at Golcha Cinema so long as it collects a minimum sum of Rs. 58,186.43 per week. He says that there are implied terms of a contract. Those implied terms may be derived from Custom and usage in the film trade. He refers to the following passage from the Law of Contract Ninth Edition Cheshire and Fifoot page 121 :

'THE normal contract is not an isolated act, but an incident in the conduct of business or in the framework of some more general relation such as that of landlord and tenant. It will frequently be set against a background of usage, familiar to all who engage in similar negotiations and which may be supposed to govern the language of a particular agreement. In addition, thereforee, to the terms which the parties have expressly adopted, there may be others imported into the contract from its context. These implications may be derived from custom or they may rest upon statute or they may be inferred by the judges to reinforce the language of the parties and realize their manifest intention.'

The plaintiffs have pleaded that it is an established trade practice, custom and usage in the film trade that the weekly theatre hire of a particular cinema and the minimum hold over figure is fixed with reference to the class of the cinema and that every time the weekly theatre hire of a particular cinema and the minimum hold over figure for the continuous running of a picture is negotiated between the distributor of the picture and the exhibitor, the basic guiding factor is the weekly full house capacity of the cinema and that accordingly the weekly theatre hire and the minimum hold over figure are liable to be increased or reduced. Although it has been pleaded by the plaintiff that there has been a custom or usage but no material has been placed on record to that effect. The simple question for decision is whether the terms of the contract which are clear and unambiguous can be modified by reference to other matters such as usage, custom or trade practice. Term No. 4 of the contract specifically mentions that the picture will run at the theatre so long as it collects a minimum sum of Rs. 65,000.00 per work. This amount cannot be reduced unilaterally. It is a matter of contract between the parties. There is no ambiguity. Whether the admission rates are reduced or increased the condition of term No. 4 cannot be modified. How long the picture 'Nikaah' would run in the cinema is not specified in the agreement but it duperies upon the minimum weekly collection. The agreement between the parties is that as long as the box office collection of the picture cover the minimum of Rs. 65.000.00 the picture will run. Thus I am of the view that the minimum collection figure of Rs. 65,000.00 cannot be reduced by the court.

(6) THE parties entered into agreement on 3rd May, 1982 when admittedly the question of admission rates was pending before this court. The plaintiffs could have stipulated for the contigency. But no stipulation was made in the agreement either for reduction of weekly hire or minimum box office collection per week for continuous screening of the picture 'Nikaah' in case of reduction of admission rates. Moreover the custom or usage of a trade cannot modify the express term which is clear aid not ambiguous. Prima facie thereforee in my opinion the amount of minimum weekly collection cannot be reduced on account of revision of admission rates.

(7) I, thereforee, do not find that there is any ground for continuing the injunction passed on 22nd March, 1982. The agreement between the parties subsists and they are bound by term No. 4 of the agreement. The injunction application (I.A. No. 1255 of 1983) is dismissed with no order as to costs. The ex parte injunction dated 22nd March, 1983 stands vacated,

(8) IN view of the order on I.A. No. 1255 of 1983 I.A. No. 1434 of 1983 stands disposed of.


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