{"id":148196,"date":"2011-09-02T00:00:00","date_gmt":"2011-09-01T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-divya-exports-vs-ms-shalimar-video-company-ors-on-2-september-2011"},"modified":"2019-01-11T01:38:28","modified_gmt":"2019-01-10T20:08:28","slug":"ms-divya-exports-vs-ms-shalimar-video-company-ors-on-2-september-2011","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-divya-exports-vs-ms-shalimar-video-company-ors-on-2-september-2011","title":{"rendered":"M\/S. Divya Exports vs M\/S. Shalimar Video Company & Ors on 2 September, 2011"},"content":{"rendered":"
Supreme Court of India<\/div>\n
M\/S. Divya Exports vs M\/S. Shalimar Video Company & Ors on 2 September, 2011<\/div>\n
Author: ……..J.<\/div>\n
Bench: G.S. Singhvi, Asok Kumar Ganguly<\/div>\n
                                                                           NON-REPORTABLE\n\n\n                     IN THE SUPREME COURT OF INDIA\n\n                       CIVIL APPELLATE JURISDICTION\n\n\n                       CIVIL APPEAL NO.6438 OF 2005\n\n\n\n\n\nM\/s. Divya Exports                                                   ... Appellant\n\n\n                                          Versus\n\n\nM\/s. Shalimar Video Company\n\nand others                                                           ... Respondents\n\n\n\n\n                                   J U D G M E N T\n<\/pre>\n
G.S. Singhvi,  J.\n<\/p>\n<\/p>\n
1.     This   appeal   is   directed   against   the   judgment   of   the   learned   Single <\/p>\n
Judge   of   the   Andhra   Pradesh   High   Court   whereby   he   allowed   the   appeal <\/p>\n
filed by respondent No.1 and decreed the suit filed by the said respondent <\/p>\n
for grant of a declaration that it is having exclusive worldwide video rights <\/p>\n
of VCD\/DVD and other formats of video rights in respect of 15 Telugu films <\/p>\n
for   which   it   had   entered   into   an   agreement   dated   27.8.2001   with   M. <\/p>\n
Srinivasa   Rao   and   also   for   restraining   the   appellant   and   respondent   Nos.2 <\/p>\n
and 3 from producing or selling VCDs\/DVDs or any other video format of <\/p>\n
those films in any form of exploitation.\n<\/p>\n
\n                                                                                             2<\/span><\/p>\n
2.     M\/s. Vijaya Production Private Limited (hereinafter referred to as “the <\/p>\n
Producer”)   produced   15   Telugu   films.     By   an  agreement  dated   28.9.1987, <\/p>\n
the Producer granted the sole and exclusive video rights of the films to M\/s. <\/p>\n
Jyothi   Video   for   a   period   of   seven   years.     During   the   currency   of   that <\/p>\n
agreement,   the   Producer   gifted   the   films   to   M\/s.   Nagireddy   Charities <\/p>\n
(respondent No.3) represented by its Managing Trustee, Shri B. Nagireddy. <\/p>\n
Respondent No.3 entered into an agreement of lease with respondent No.2-<\/p>\n
M\/s.   Vijaya   Pictures   whereby   the   rights   of   theatrical   and   non-theatrical <\/p>\n
distribution, exhibition and exploitation including video and TV rights were <\/p>\n
given to respondent No.2 for the areas of Andhra and Nizam for a period of <\/p>\n
20 years commencing from 1.1.1975 for a consideration of Rs.20 lakhs.  By <\/p>\n
another   agreement   dated   25.6.1990   (Exhibit   A-4)   the   term   of   agreement <\/p>\n
dated 10.1.1975 was extended by 70 years with effect from 1.1.1995.   The <\/p>\n
relevant portions of that agreement are extracted below:<\/p>\n
       “Whereas the Lessors are the absolute owners in possession of <\/p>\n
       the negatives, holding the entire rights for the Indian Union of <\/p>\n
       the Telugu Talkie pictures produced by M\/s Vijaya productions <\/p>\n
       Private   Ltd.,   as   specified   hereunder,   the   rights   of   which   have <\/p>\n
       been   assigned   absolutely   by   way   of   gift   by   the   said   Vijaya <\/p>\n
       Productions Private Ltd., in favour of the Lessors.<\/p><\/blockquote>\n
       Whereas   the   Lessors   have   already   granted   to  the   Lessees,   the <\/p>\n
       exclusive lease rights of exploitation of their several Black and <\/p>\n
       White   and   Colour   pictures   for   the   territory   of   Andhra   and <\/p>\n
       Nizam   by   way   of   agreement   of   lease   dated   10.1.1975   for   a <\/p>\n
                                                                                          3<\/span><\/p>\n
period   of   20   years   from   1st  of   January,   1975.     Whereas   the <\/p>\n
Lesees   have   approached   the   Lessors   to   grant   unto   them   the <\/p>\n
exclusive   lease   rights   of   Theatrical   and   Non-theatrical <\/p>\n
distribution, exhibition and exploitations of the several pictures <\/p>\n
by way of lease, in respect of the areas of Andhra and Nizam as <\/p>\n
known in the Film Trade, for a further period  of 70 (seventy) <\/p>\n
years from the date of expiry of the present lease agreement i.e. <\/p>\n
from   1st  January   1995   and   to   transfer   complete   pictures <\/p>\n
negatives in favour of the Lesees herein.\n<\/p>\n
\nNOW THIS AGREEMENT WITNESSETH AS FOLLOWS:-\n<\/p>\n<\/p>\n
1.   The   Lessors   hereby   grant   us   the   Lessees   as   the   rights   of <\/p>\n
Theatrical   and   Non-Theatrical   distribution,   exhibition   and <\/p>\n
exploitation by way of lease of the following Black and White <\/p>\n
Telugu Pictures produced by M\/s Vijaya Productions Pvt. Ltd. <\/p>\n
Madras 600 020 including the video and T.V. Rights thereof<\/p>\n
1. Shavukaru<\/p>\n
2. Pathala Bhairavi<\/p>\n
3. Pellichehi Choodu<\/p>\n
4. Chandraharam<\/p>\n
5. Missamma<\/p>\n
6. Maya Bazar<\/p>\n
7. Appuchesi Pappukudu<\/p>\n
8. Jagadekaveerunikatha<\/p>\n
9. Gundamma Katha<\/p>\n
10. C.I.D.\n<\/p>\n
12. Umachandi Gowrishankula Katha<\/p>\n
13. Rechukka Pagatichukka<\/p>\n
for   the   Areas   of   Andhra   and   Nizam,   and   to   appropriate   to <\/p>\n
themselves the proceeds earned by them on the said pictures by <\/p>\n
such   exploitation   for   a   period   of   70   (seventy)   years   from   1st <\/p>\n
January 1995.\n<\/p>\n<\/p>\n
4.   The   Lessees   shall   have   the  power   to  assign   this   agreement <\/p>\n
either   in   part   and\/or   whole   to   third   parties   at   their   discretion, <\/p>\n
without in any manner affecting the rights of the Lessors under <\/p>\n
this agreement.\n<\/p>\n
\n                                                                                              4<\/span><\/p>\n
       5. It is agreed that the Lessors shall not lease out, sell or exhibit <\/p>\n
       the pictures in the territories for which the rights of exploitation <\/p>\n
       are   herein   be   granted,   till   the   expiry   of   the   agreement.     The <\/p>\n
       Lessees also shall not exhibit the pictures in any station outside <\/p>\n
       the territory leased herein.\n<\/p>\n<\/p>\n
       7.   It   is   understood   between   the   parties   herein   that   this <\/p>\n
       agreement   is   without   prejudice   to   the   16mm   rights;   T.V.   and <\/p>\n
       Video   rights   committed   by   the   producers   Vijaya   Productions <\/p>\n
       (P) Ltd for the various periods with the parties concerned and <\/p>\n
       the Lessees herein are entitled for the said rights after the expiry <\/p>\n
       of the periods committed thereunder.”\n<\/p>\n<\/p>\n
3.     A   third   agreement   dated   11.12.1995   (Exhibit   A-5)   was   entered   into <\/p>\n
between   respondent   Nos.3   and   2   whereby   and   whereunder   copyright   for <\/p>\n
broadcasting of films through satellites, cassettes, disc, cable, wire, wireless <\/p>\n
or any other system including its transmission through cable system without <\/p>\n
restriction of geographical areas was assigned to respondent No.2 for a sum <\/p>\n
of   Rs.8   lakhs.     The   relevant   portions   of   the   third   agreement   are   also <\/p>\n
extracted below:\n<\/p>\n<\/p>\n
       “Now, This Agreement Witneseth:\n<\/p><\/blockquote>\n
<\/blockquote>\n
       1.   The   Assignors   irrevocably   assign   to   the   Assignees   the <\/p>\n
       copyright   for   broadcasting   the   said   films   through   satellite, <\/p>\n
       cassette,   disc,   cable,   wire,   wireless   or   any   other   system <\/p>\n
       including   its   transmission   through   cable   system   without <\/p>\n
       restriction   of   geographical   areas   and   for   this   purpose   the <\/p>\n
       assigners are authorized to make such copies of recordings on <\/p>\n
       film, taps, disc or such other media as may be required.<\/p>\n
                                                                                               5<\/span><\/p>\n<\/blockquote>\n
       2.   The   Assignors   have   already   delivered   to   the   Assigners   the <\/p>\n
       concerned version of the picture and sound negatives of the said <\/p>\n
       films   as   per   the   Agreement   dated   25-6-1990   between   the <\/p>\n
       Assignors and Assignees.\n<\/p><\/blockquote>\n
<\/blockquote>\n
       3. The Assignees shall have the full right to broadcast the said <\/p>\n
       Films   after   subtitling,   editing,   deleting   any   portion,   altering <\/p>\n
       colour or inserting advertisement, or broadcasting the excerpts, <\/p>\n
       or   programme   including   the   excerpts,   or   part   of   whole   of   the <\/p>\n
       sound track only, at their sole and absolute discretion.<\/p>\n<\/blockquote>\n
       4.  The   Assignees   shall  be  entitled  to  assign  their  rights   under <\/p>\n
       this   Agreement   in   part   or   in   full   to   any   other   party   and   to <\/p>\n
       broadcast   through   any   authority   or   agency,   at   their   sole   and <\/p>\n
       absolute   discretion   including   Doordharshan’s   Terrestrial <\/p>\n
       Primary Channels.”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
4.     After five years, respondent No.2 entered into an agreement of lease <\/p>\n
dated 30.7.2001 with M. Srinivasa Rao and granted him rights of theatrical <\/p>\n
and   non-theatrical   (excluding   satellite   rights)   exhibition   and   35   mm <\/p>\n
exploitation,   video,   VCD,   DVD,   Audio   and   16   mm   by   way   of   lease   in <\/p>\n
respect  of 14  films  for  the areas   of  Andhra  and  Nizam for  a  period   of  60 <\/p>\n
years for a consideration of Rs.10 lakhs.  Paragraphs 5 to 9 of that agreement <\/p>\n
read as under:\n<\/p>\n<\/p>\n
       “5. The Lessees shall have the power to assign this agreement <\/p>\n
       either   in   part   or   whole   to   third   parties   at   their   discretion, <\/p>\n
       without any manner affecting the rights of the lessors under this <\/p>\n
       agreement.\n<\/p><\/blockquote>\n
<\/blockquote>\n
       6. The lessors hereby grant to the lessees the rights of theatrical <\/p>\n
       and   non-theatrical   (excluding   satellite   rights)   exhibition   and <\/p>\n
                                                                                               6<\/span><\/p>\n
       35mm   exploitation,   video,   VCD,   DVD,   Audio   and   16mm   by <\/p>\n
       way of lease of the following.\n<\/p><\/blockquote>\n
<\/blockquote>\n
       7. It is agreed the lessors shall not lease out, sell or exhibit the <\/p>\n
       pictures   in   the   territories   for   which   the   rights   of   exploitations <\/p>\n
       herein granted till the expiry of this agreement.<\/p>\n<\/blockquote>\n
       8. In case the original procedures M\/s Vijaya Productions Pvt. <\/p>\n
       Ltd. or lessors herein require any prints of the pictures lease out <\/p>\n
       herein for any overseas exploitation the same share be delivered <\/p>\n
       by the lessees herein at cost.\n<\/p><\/blockquote>\n
<\/blockquote>\n
       9. It is understood between the parties herein that 16mm rights, <\/p>\n
       video   rights   committed   by   the   producers   Vijaya   Productions <\/p>\n
       Pvt. Ltd. with the parties concerned was expired.   The lessees <\/p>\n
       herein are entitled for the said rights.”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
5.     M. Srinivasa Rao executed an agreement dated 17.8.2001 in favour of <\/p>\n
respondent   No.1   and   granted   CDs,   VCDs,   DVDs,   copyrights   for <\/p>\n
transferring, processing, recording, duplication, copying, taping on to video <\/p>\n
grams, discs, CDs, VCDs, DVDs and the digital formats for commercial and <\/p>\n
private exhibition of the 15 films for the entire world.<\/p>\n
6.     Three   days   prior   to   the   execution   of   the   aforesaid   agreement, <\/p>\n
respondent   No.3   entered   into   an   agreement   dated   14.8.2001   with   the <\/p>\n
appellant   and   assigned   it   exclusive   DVD   rights,   VCD   rights   and   internet <\/p>\n
rights (worldwide web TV rights) by way of lease in respect of the 15 films <\/p>\n
                                                                                              7<\/span><\/p>\n
for the entire world including Indian Union Territory for a period of 60 years <\/p>\n
in lieu of a consolidated royalty amount of Rs.1,50,000\/-. <\/p>\n
7.      Within   8   days   of   the   execution   of   agreement   dated   17.8.2001, <\/p>\n
respondent   No.1   got   published   a   notice   in   the   newspaper   dated   25.8.2001 <\/p>\n
declaring  that it had purchased DVD and VCD rights for 15 Telugu films <\/p>\n
produced   by   M\/s.   Vijaya   Production.     Thereupon,   respondent   No.3   issued <\/p>\n
telegram to respondent No.1 and called upon it to stop production of DVDs <\/p>\n
and   VCDs.     In   its   reply   dated   31.12.2001,   respondent   No.1   relied   upon <\/p>\n
agreement dated 17.8.2001 executed by M. Srinivasa Rao and claimed that it <\/p>\n
had purchased all the rights in respect of the 15 films.  By way of rejoinder, <\/p>\n
respondent No.3 informed respondent No.1 that it had not sold or assigned <\/p>\n
any   rights   to   respondent   No.2  or  M.   Srinivasa   Rao   to  produce   DVDs  and <\/p>\n
VCDs.\n<\/p>\n<\/p>\n
8.      After   exchange   of   notices,   respondent   No.1   filed   suit   for   grant   of <\/p>\n
relief   to   which   reference   has   been   made   in   the   opening   paragraph   of   this <\/p>\n
judgment.  It also applied for and was granted ex parte injunction by the trial <\/p>\n
Court on 23.6.2003, which was vacated on 22.8.2003. The appeal preferred <\/p>\n
by respondent No.1 was dismissed by the Division Bench of the High Court.<\/p>\n
                                                                                              8<\/span><\/p>\n
9.      In the written statement  filed by the appellant  through its Managing <\/p>\n
Partner Bh. Sudhakar Reddy, which was adopted by respondent No.3, it was <\/p>\n
pleaded that the rights of VCDs\/DVDs had not been assigned by respondent <\/p>\n
No.3 to respondent No.2 and, as such, M. Srinivasa Rao could not acquire <\/p>\n
any   such   rights   from   respondent   No.2   and   assign   the   same   to   respondent <\/p>\n
No.1.  In a separate written statement, respondent No.2 claimed that in terms <\/p>\n
of   agreement   dated   15.12.1995   executed   with   respondent   No.3,   it   had <\/p>\n
acquired   the   rights   for   future   technical   development   in   the   field   of <\/p>\n
cinematography.     Respondent   No.2   pleaded   that   after   accepting   a   sum   of <\/p>\n
Rs.8   lakhs,   respondent   No.3   had   assigned   irrevocable   copyright   for <\/p>\n
broadcasting   the   said   films   through   satellite,   cassette,   disc,   cable,   wire, <\/p>\n
wireless or any other system including its transmission through cable system <\/p>\n
without restriction of geographical areas and for this purpose, the assignees <\/p>\n
were   authorised   to   make   copies   of   recording   of   films,   disc,   tape   or   such <\/p>\n
other   media   as   may   be   required.     Respondent   No.2   admitted   that   it   had <\/p>\n
entered   into   an   agreement   dated   30.7.2001   with   M.   Srinivas   Rao   for <\/p>\n
assignment   of   the   rights   acquired   by   it   under   agreements   dated   25.6.1990 <\/p>\n
and 15.12.1995.\n<\/p>\n
\n                                                                                                     9<\/span><\/p>\n
10.     On the pleadings of the parties, the trial Court framed the following <\/p>\n
issues:\n<\/p>\n<\/p>\n
        “1)      Whether this court has territorial jurisdiction to maintain <\/p>\n
                 the suit?\n<\/p><\/blockquote>\n
<\/blockquote>\n
        2)       Whether   the   suit   is   bad   for   non   joinder   of   necessary <\/p>\n
                 parties?\n<\/p><\/blockquote>\n
<\/blockquote>\n
        3)       Whether   the   agreement   dt.   25.6.1990   will   include <\/p>\n
                 VCD\/DVD rights and whether the plaintiff is entitled to <\/p>\n
                 claim the broadcasting rights thereunder coupled with the <\/p>\n
                 agreement   dt.   15.2.2002   and   thereby   the   plaintiff   is <\/p>\n
                 entitled for the manufacture and sale of the VCDs\/DVDs <\/p>\n
                 of the suit films?\n<\/p><\/blockquote>\n
<\/blockquote>\n
        4)       Whether   the   plaintiff   is   entitled   for   the   relief   of <\/p>\n
                 declaration and the injunction sought for?\n<\/p><\/blockquote>\n
<\/blockquote>\n
        5)       To what relief?”<\/p>\n
11.     After considering the pleadings of the parties and evidence produced <\/p>\n
by   them,   the   trial   Court   held   that   the   suit   was   bad   for   non   joinder   of   M. <\/p>\n
Srinivasa Rao, who is said to have assigned rights to respondent No.1.  This <\/p>\n
is evinced from the following observations made by the learned trial Court:  <\/p>\n
        “The   plaintiff   is   claiming   his   right   through   M.   Srinivasa   Rao <\/p>\n
        from   whom   the   plaintiff   has   obtained   an   agreement   for <\/p>\n
        assignment of the rights over the suit schedule films.  When the <\/p>\n
        defendants   1   and   3   have   come   forward   with   a   specific <\/p>\n
        contention   that   the   M.   Srinivasa   Rao   have   no   right   at   all   to <\/p>\n
        assign   the   VCD   and   DVD   rights   the   plaintiff   ought   to   have <\/p>\n
        impleaded the said M. Srinivasa Rao as a party to the suit.  But <\/p>\n
        the plaintiff has not chosen to bring him on record and he has <\/p>\n
                                                                                            10<\/span><\/p>\n
       deposed in his cross examination that he has no grievance at all <\/p>\n
       against M. Srinivas Rao and therefore he thought that it is not <\/p>\n
       necessary to bring him on record.   It is important to note that <\/p>\n
       the plaintiff is claiming right through M. Srinivas Rao.  He has <\/p>\n
       purchased   the   rights   from   the   2nd  defendant   and   because   the <\/p>\n
       dispute   is   that   he   has   conveyed   the   rights   which   was   not <\/p>\n
       covered by the agreement under which he got the assignment in <\/p>\n
       his   favour   from   the   2nd  defendant   the   plaintiff   ought   to   have <\/p>\n
       impleaded M. Srinivasa Rao as one of the parties and in spite of <\/p>\n
       the objection taken by the other side the plaintiff has not chosen <\/p>\n
       to   bring   the   Srinivasa   Rao   on   record   but   only   satisfied   by <\/p>\n
       saying   that   he   has   no   grievance   against   Srinivas   Rao.     This <\/p>\n
       issue   to   be   held   as   against   the   plaintiff   holding   that   the <\/p>\n
       necessary   party   Srinivas   Rao   is   not   brought   on   record   and <\/p>\n
       therefrom the suit is bad for non joinder of necessary party and <\/p>\n
       Issue No.2 is held accordingly.”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
12.    The   trial   Court   then   referred   to   agreements   dated   25.6.1990   and <\/p>\n
15.12.1995   executed   between   respondent   Nos.2   and   3,   agreement   dated <\/p>\n
30.7.2001   entered   into   between   respondent   No.2   and   M.   Srinivasa   Rao   as <\/p>\n
also agreement dated 14.8.2001 executed by M. Srinivasa Rao in favour of <\/p>\n
respondent No.1, referred to the provisions of the Copyright Act, 1957, two <\/p>\n
judgments   of   the   Madras   High   Court   and   concluded   that   the   plaintiff   has <\/p>\n
failed to make out a case for grant of declaration and injunction.<\/p>\n
13.    In   the   appeal   filed   by   respondent   No.1,   the   learned   Single   Judge <\/p>\n
framed the following questions:\n<\/p>\n
\n                                                                                                  11<\/span><\/p>\n
        “1.     Whether the assignment of copyrights made by the third <\/p>\n
        defendant in favour of first defendant is true and valid?<\/p>\n<\/blockquote>\n
        2.      Whether the assignment of copyrights made by the third <\/p>\n
        defendant   in   favour   of   second   defendant   confers   the   right   of <\/p>\n
        manufacturing and selling VCDs\/DVDs and whether the rights <\/p>\n
        assigned and conferred under Exs.A.4 and A.5 are only meant <\/p>\n
        for   `broadcasting’   the   suit   films   and   if   so,   what   is   the   effect <\/p>\n
        thereof?\n<\/p><\/blockquote>\n
<\/blockquote>\n
        3.      Whether   the   non-joinder   of   the   person   by   name <\/p>\n
        Srinivasarao,  who was allegedly  the assignee from the second <\/p>\n
        defendant and assignor in favour of the plaintiff, would vitiate <\/p>\n
        the suit?                                 or<\/p>\n
        Whether the plaintiff can be non-suited for non-joinder of one <\/p>\n
        Srinivasarao   who   was   allegedly   the   assignee   from   the   second <\/p>\n
        defendant and assignor of the plaintiff?”\n<\/p><\/blockquote>\n
\n<\/blockquote>\n
14.     Although, the trial Court had not framed any issue which could give <\/p>\n
rise   to   question   No.1   and   in   the   appeal   filed   by   the   respondent   no   such <\/p>\n
prayer was made, the learned Single Judge invoked Order XLI Rule 24 of <\/p>\n
the Code of Civil Procedure, 1908 (CPC) and justified the framing of first <\/p>\n
question by recording the following observations:<\/p>\n
        “The first point as formulated by this Court in this appeal was <\/p>\n
        not framed by the trial court as an issue in the suit.  But in my <\/p>\n
        considered view, the trial court ought to have framed this issue <\/p>\n
        also in the light of the specific averment made by the plaintiff <\/p>\n
        in the plaint that the acquisition of rights by the first defendant-<\/p>\n
        M\/s   Divya   Exports   from   the   3rd  defendant-M\/s   Nagireddy <\/p>\n
        Charities,   represented   by   its   Trustee-Venugopal   Reddy   was <\/p>\n
        totally  false and  baseless  having regard to the fact  that Sri  B. <\/p>\n
        Nagireddy, the original Managing Trustee of the 3rd  defendant-<\/p>\n
                                                                                              12<\/span><\/p>\n
       M\/s   Nagireddy   Charities,   had   already   given   away   the <\/p>\n
       copyrights during the year 1995 itself in favour of the second <\/p>\n
       defendant.   Hence, having regard to the said specific averment <\/p>\n
       made  by the plaintiff  in the plaint and also in the light of the <\/p>\n
       specific ground taken by the plaintiff in this appeal with regard <\/p>\n
       to the application of Section 73 of the Indian Trusts Act 1881 <\/p>\n
       (for short “the Trusts Act”),  I deem it absolutely  necessary to <\/p>\n
       formulate   the   first   point   for   consideration,   exercising   the <\/p>\n
       jurisdiction of this Court under Order 41, Rule 24 C.P.C.   For <\/p>\n
       this reason, this Court formulated the first point as stated supra.<\/p>\n
       From the submissions made at the Bar by the learned Counsel <\/p>\n
       appearing   for   the   parties,   it   could   be   seen   that   the   whole <\/p>\n
       controversy   revolves   around   Exs.A.4   and   A.5   and   Ex.A.3   on <\/p>\n
       one side and Ex.A.3 on one side and Ex.B.1 on the other.” <\/p><\/blockquote>\n
       The   learned   Single   Judge   then   referred   to   the   pleadings   and   oral   as <\/p>\n
well as documentary evidence produced by the parties, Sections 73 and 74 of <\/p>\n
the   Trusts   Act   and   held   that   Exhibit   B.1   executed   by   respondent   No.3   in <\/p>\n
favour  of the appellant  was not valid.   Paragraphs 52 to 55 and 58 of the <\/p>\n
impugned   judgment,   which   contain   the   reasons   recorded   by   the   learned <\/p>\n
Single Judge for arriving at the said conclusion, are extracted below:<\/p>\n
       “52.    What is more interesting to note is that no trust deed or <\/p>\n
       any   other   document   was   pressed   into   service   by   the   first <\/p>\n
       defendant  while getting  himself examined as D.W.1 to clarify <\/p>\n
       or explain that Mr. Venugopalreddy had acquired the status of a <\/p>\n
       trustee   of   M\/s   Nagireddy   Charities   in   order   to   effectively <\/p>\n
       represent the trust and to execute Ex.B.1 document in favour of <\/p>\n
       the first defendant.  Interestingly, D.W.1 was the Special Power <\/p>\n
       of Attorney Holder also, representing M\/s Nagireddy Charities.<\/p><\/blockquote>\n
       53.     In   other   words,   totally   an   alien,   not   connected   with   the <\/p>\n
       affairs   of   M\/s   Nagireddy   Charities,   but   a   beneficiary   under <\/p>\n
                                                                                    13<\/span><\/p>\n
Ex.B.1,   was   examined   as   D.W.1,   representing   both   defendant <\/p>\n
No.1   and   defendant   No.3.     No   document   relating   to <\/p>\n
appointment of Venugopalreddy as a trustee of M\/s Nagireddy <\/p>\n
Charities,   authorizing   Venugopalreddy   to   represent   trust   has <\/p>\n
been brought on record and no person directly connected with, <\/p>\n
and having knowledge of the affairs of M\/s Nagireddy Charities <\/p>\n
had been examined on behalf of the defendants.\n<\/p>\n<\/p>\n
54.    It is to be remembered that the suit was instituted in the <\/p>\n
year 2003 and during the pendency of the suit Mr. B. Nagireddy <\/p>\n
was   very   much   alive,   of   course,   totally   in   a   state   of <\/p>\n
indisposition.     In   such   circumstances,   I   am   of   the   considered <\/p>\n
view that the burden heavily lies on either the first defendant or <\/p>\n
the third defendant to establish the change in trusteeship of M\/s <\/p>\n
Nagireddy Charities, in which case alone Ex.B.1 document can <\/p>\n
be   called   as   a   validly   and   legally   executed   document   by <\/p>\n
Venugopalreddy in the capacity of the trustee of M\/s Nagireddy <\/p>\n
Charities   in   favour   of   the   first   defendant.     Unfortunately,   no <\/p>\n
other witness, except D.W.1, was examined in this behalf.<\/p>\n
55.    It   is   well-known   principle   that   a   person   who   has   no <\/p>\n
proper   authorization   to   represent   a   trust   cannot   enter   into <\/p>\n
agreements with third parties in order to bind the trust – even if <\/p>\n
such agreements are entered into, such agreements are not valid <\/p>\n
in the eye of law.  In the instant case, the first defendant and the <\/p>\n
third   defendant   –   M\/s   Nagireddy   Charities,   represented   by   its <\/p>\n
Power   of   Attorney   Holder   have   utterly   failed   to   establish   the <\/p>\n
capacity   of   Venugopalreddy   as   trustee   to   execute   Ex.B.1 <\/p>\n
agreement assigning the VCDs and DVDs copyrights in respect <\/p>\n
of the suit schedule films in favour of the first defendant during <\/p>\n
the   lifetime   of   Sri   Nagireddy,   the   Managing   Trustee   of   M\/s <\/p>\n
Nagireddy   Charities.   This   is   a   strong   and   suspicious <\/p>\n
circumstance,   which   compels   this   Court,   to   hold   that   Ex.B.1 <\/p>\n
was   not   executed   by   a   proper   and   authorized   person <\/p>\n
representing the third defendant-trust, conveying the copyrights <\/p>\n
of VCDs and DVDs in favour of the first defendant.   Further, <\/p>\n
when   Mr.   Venugopalreddy’s   authority   as   trustee   to   execute <\/p>\n
Ex.B.1   is   in   serious   doubt,   first   defendant,   who   is   the <\/p>\n
beneficiary of the said document cannot be placed on a higher <\/p>\n
and comfortable position that Mr. Venugopalreddy.<\/p>\n
                                                                                         14<\/span><\/p>\n
58.     From the perusal of the impugned judgment it could be <\/p>\n
seen the court below while discussing issues 3 and 4, without <\/p>\n
going to the aspect of validity or otherwise of the assignment of <\/p>\n
copyright   in   favour   of   first   defendant   by   third   defendant, <\/p>\n
incidentally recorded a finding basing on the Xerox copy of a <\/p>\n
document Ex.A-12, that the plaintiff is estopped from raising a <\/p>\n
plea   that   B.   Venugopal   Reddy   has   no   authority   to   represent <\/p>\n
third defendant trust.  But a perusal of Ex.A-12 discloses that it <\/p>\n
is   only   a   reiteration   of   assignment   of   broadcast   rights   under <\/p>\n
Ex.A-5.   In this context it is to be noted that Ex.A-12 is only a <\/p>\n
Xerox   copy   and   the   original   is   not   filed.   No   reasons   were <\/p>\n
recorded by the trial court with regard to the admissibility of the <\/p>\n
said   document.   Even   assuming   that   the   said   document   was <\/p>\n
really   executed   by   B.   Venugopal   Reddy   in   favour   of   second <\/p>\n
defendant,   as   already   noticed,   it   is   only   a   reiteration   or <\/p>\n
confirmation of Ex.A-5. Further there  is no cross-examination <\/p>\n
by  the  defendants   1  and  3  on  this  aspect  and  there  is   also  no <\/p>\n
reference   to   this   document   in   the   written   statements   filed   by <\/p>\n
them. Therefore, so long as the execution of Ex.A-4 was agreed <\/p>\n
to   have   been   in   subsistence   by   virtue   of   its   execution   by   B. <\/p>\n
Nagi   Reddy,   Managing   Trustee   of   third   defendant   assigning <\/p>\n
rights for a period of seventy years, Ex.A-12 does not gain any <\/p>\n
significance. If Ex.A-12 is to be accepted, notwithstanding the <\/p>\n
admissibility   or   otherwise   of  it,   at   best   it   has   to   be   presumed <\/p>\n
that B. Venugopal Reddy had become the Managing Trustee of <\/p>\n
third   defendant   as   on   the   date   of   execution   of   Ex.A-12   dated <\/p>\n
15-2-2002.   But   in   the   present   case,   the   whole   dispute   is   with <\/p>\n
regard to the authority of B. Venugopal Reddy to execute Ex.B-<\/p>\n
1   document   in   the   capacity   of   trustee   of   third   defendant   in <\/p>\n
favour of first defendant, which is a prior transaction. In other <\/p>\n
words   the   genesis   of   the   rights   of   assignment   of   broadcast   is <\/p>\n
Exs.A-4 and A-5, but not Ex.A-12. Furthermore, the reasons for <\/p>\n
bringing   into   existence   of   the   controversial   Ex.A-12   is   not <\/p>\n
explained   in   the   evidence   of   either   of   the   parties   and   as   its <\/p>\n
execution  is  subsequent  to the  execution  of  Ex.B-1,  on which <\/p>\n
defendants   1   and   3   are   mustering   their   claim   of   copyright   of <\/p>\n
VCDs and DVDs, the same is not relevant and inconsequential. <\/p>\n
Hence, the finding of the trial court that the plaintiff is estopped <\/p>\n
                                                                                                  15<\/span><\/p>\n
        to   question   the   validity   or   otherwise   of   the   trusteeship   of   B. <\/p>\n
        Venugopal Reddy for third defendant is not justifiable.”<\/p>\n
15.     Although,   learned   senior   counsel   appearing   for   the   parties   made <\/p>\n
elaborate   arguments   on  the   merits   of  the   findings  recorded   by   the   learned <\/p>\n
Single   Judge   with   reference   to   questions   No.2   and   3   and   produced <\/p>\n
publications  titled  Copinger and Skone James  on Copyright  (15th  Edition), <\/p>\n
Goldstein   on   Copyright   (3rd  Edition)   Volume   1   and   the   judgments   of <\/p>\n
different High Courts, we do not consider it necessary to examine the same <\/p>\n
because   in   our   considered   view,   the   learned   Single   Judge   was   not   at   all <\/p>\n
justified in non-suiting the appellant by recording a finding that Exhibit B.1 <\/p>\n
was invalid.\n<\/p>\n<\/p>\n
16.     Since   the   trial   Court   had   not   framed   specific   issue   touching   the <\/p>\n
validity   of   agreement   Exhibit   B.1,   the   parties   did   not   get   effective <\/p>\n
opportunity   to   lead   evidence   in   support   of   their   respective   cases.     In   the <\/p>\n
absence   of   any   issue,   the   trial   Court   did   not   even   advert   to   the   question <\/p>\n
whether or not agreement Exhibit B.1 was valid.  The evidence available on <\/p>\n
the   record   was   not   at   all   sufficient   for   deciding   that   question   and   yet   the <\/p>\n
learned Single Judge decided that question by drawing inferences from the <\/p>\n
statements made by the witnesses examined by the parties with reference to <\/p>\n
                                                                                               16<\/span><\/p>\n
the issues framed by the trial Court and returned a negative finding on the <\/p>\n
validity of Exhibit B.1.\n<\/p>\n<\/p>\n
17.     In our view, in the peculiar facts of this case, the learned Single Judge <\/p>\n
was not at all justified  in invoking Order  XLI Rule  24 CPC.   If  at all the <\/p>\n
learned   Single   Judge   felt   that   the   trial   Court   should   have   framed   specific <\/p>\n
issue   on   the   validity   of   agreement   Exhibit   B.1,   then   he   should   have <\/p>\n
remanded the matter to the trial Court with a direction to frame such an issue <\/p>\n
and decide the suit afresh.   The omission on the part of the learned Single <\/p>\n
Judge to adopt that course has resulted in manifest injustice to the appellant. <\/p>\n
18.     In   the   result,   the   appeal   is   allowed.     The   impugned   judgment   is   set <\/p>\n
aside and the case is remitted to the trial Court with the direction that it shall, <\/p>\n
after considering the pleadings of the parties, frame an additional issue on <\/p>\n
the validity of agreement Exhibit B.1 executed between respondent No.1 and <\/p>\n
respondent   No.3,   give   opportunity   to   the   parties   to   produce   evidence   and <\/p>\n
decide the suit afresh without being influenced by any  of the observations <\/p>\n
made by the High Court and this Court.\n<\/p>\n
\n                                                                                           17<\/span><\/p>\n
19.     Since the matter is sufficiently old, we direct the trial Court to dispose <\/p>\n
of the matter as early as possible but latest within nine months from the date <\/p>\n
of receipt\/production of copy of this judgment.   The parties are directed to <\/p>\n
appear before the trial Court on 10.10.2011.\n<\/p>\n<\/p>\n
20.     The   Registry   is   directed   to   send   a   copy   of   this   judgment   to   IX <\/p>\n
Additional Chief Judge, City Civil Court (Fast Track Court), Hyderabad by <\/p>\n
fax.\n<\/p>\n<\/p>\n
                                                       ……………………………….J.\n<\/p>\n
                                                        [G.S. Singhvi]<\/p>\n
                                                                 …………………………\n<\/p>\n
                                                                                    ……..J.\n<\/p>\n
                                                       [Asok Kumar Ganguly]<\/p>\n
New Delhi;\n<\/p>\n
September 02, 2011.\n<\/p><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India M\/S. Divya Exports vs M\/S. Shalimar Video Company & Ors on 2 September, 2011 Author: ……..J. Bench: G.S. Singhvi, Asok Kumar Ganguly NON-REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.6438 OF 2005 M\/s. Divya Exports … Appellant Versus M\/s. Shalimar Video Company and others … Respondents […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-148196","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nM\/S. Divya Exports vs M\/S. 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