The plaintiff, Azure Entertainment Pvt Limited, had obtained the exclusive rights to produce a Hindi language film based on a Danish film. Pursuant to Azure obtaining the sole and exclusive remake rights, the defendant no. 1, Maruti Enterprises, approached it to jointly produce the film, which was being directed by Indra Kumar, partner of Maruti.
An agreement was then executed between Azure and Maruti agreeing to share profits in the ratio of 1:2.
The two parties then executed an agreement with Super Cassettes Industries Pvt Ltd (T-Series) company and jointly assigned 50 percent of the intellectual property rights of the film and 100 percent exploitation rights in perpetuity to T-series.
Azure thereafter agreed to give up its royalty rights for ₹32 lakh and contingent royalties in exchange for ₹4.50 crores. Post this, Azure agreed to no longer participate in the production of the film and not be entitled to any other amounts.
The dispute, according to the suit, was that there were significant breaches committed by T-Series and Maruti. The breaches were that from the trailers of the film, it was perceived that the laboratory (which is the repository of the film) had been engaged by Maruti directly without involving Azure.
The breaches had been of such a nature that Azure had been induced to give up multiple rights in the film without getting any counter benefits.
“The defendants have colluded with a clear intention to deprive the plaintiff of its entitlements to the producer’s fee payable under the contract signed,” the plaintiff submitted.
Azure was also aggrieved that the defendants had not yet paid ₹4.50 crores towards film production and ₹50 lakh towards Azure’s contingent share as per the terms of the agreement even though the film had reached post production stage.
This was an essential condition in the agreement which had been breached.
Source: Barandbench
