Court directs Rs. 8.85 crore deposit as security before allowing film's release, protecting joint producer's investment and rights amid allegations of contract breach
In a significant ruling on October 19, 2026, the Bombay High Court, presided over by Justice Amit Borkar, delivered a nuanced judgment in the arbitration petition filed by AND Movie Products LLP against Echelon Productions and others. The case concerns the co-production agreement of the Hindi film "Tu Hai Meri Kiran," starring Sonakshi Sinha and Zaheer Iqbal, involving a dispute over investment repayment, rights of joint ownership, and commercial exploitation.
AND Movie Products LLP (Petitioner) claimed to have invested Rs. 8.85 crore (including GST) in the film's production under a co-production agreement effective from March 27, 2024. The agreement stipulated that the investment was to be returned on or before the earlier of 13 months from the effective date (April 27, 2025) or three weeks prior to the film's first release (October 2, 2026). The Petitioner alleged that despite full payment, the Respondents failed to repay the amount, dishonored a Rs. 7.5 crore cheque issued as repayment, and proceeded to announce the theatrical release for October 23, 2026, without securing the Petitioner's consent or honoring its contractual rights.
The Respondents denied any breach, contending that the Petitioner was a joint partner and that investment recovery was contingent on commercial exploitation and accounting of revenue shortfall. They highlighted that the Petitioner had actively participated in promotional activities on Instagram, including collaboration on posts announcing the release date and third-party logos, implying consent. The Respondents also emphasized their readiness to include the Petitioner as a confirming party in exploitation agreements and to deposit revenues in a designated account.
Justice Borkar carefully examined the contract clauses and conduct of the parties. He ruled that Clause 5.3's clear wording obligated repayment by April 27, 2025, the earlier date, rejecting the Respondents' argument that repayment depends solely on revenue calculations post-release. The dishonored cheque for Rs. 7.5 crore was found to support a prima facie case for repayment liability.
The Court acknowledged the Petitioner's participation in Instagram promotional collaborations but distinguished this from waiving the right to repayment or prior consent for exploitation agreements. Reliance on Section 63 of the Indian Contract Act and relevant Supreme Court precedents clarified that mere conduct supporting publicity does not amount to relinquishing contractual rights unless expressly intended.
Balancing interests, the Court recognized the Respondents' investment of time and effort and the potential revenue from releasing the film, which the Petitioner also sought to recover. Therefore, the Court refused to impose a blanket injunction on the film's release, which could harm both parties. Instead, it ordered the Respondents to deposit Rs. 8.85 crore with 15% interest as security within three working days. Only upon deposit could the film be released, subject to adherence to contract terms, including the Petitioner's confirming-party status in exploitation agreements, agreed producer credits, and detailed disclosure of all related agreements and accounts.
The Court mandated the Respondents to disclose executed and proposed agreements, offers, and financial statements concerning the film's exploitation, ensuring transparency. It also required correction or withdrawal of publicity material failing to display agreed credits, protecting the Petitioner's right to acknowledgment.
The judgment preserves the Petitioner's monetary claim and contractual rights while permitting commercial exploitation under conditions that safeguard those rights, thereby maintaining a balance between contractual enforcement and commercial pragmatism.
The Respondents' application to stay the judgment was rejected.
Bottom Line:
Arbitration and Conciliation Act, 1996 Section 9 Coproduction agreement of film - Joint producer invested amount under agreement - Contract contained clear stipulation for return of investment by earlier of 13 months from effective date or 3 weeks prior to first release - Respondents could not commercially release or exploit film without securing petitioner's investment and without complying with petitioner's rights as confirming party, prior consent and agreed credits - Instagram promotional collaboration by petitioner did not amount to waiver of repayment right or consent to third-party exploitation contrary to contract.
Statutory provision(s): Arbitration and Conciliation Act, 1996 Section 9; Indian Contract Act, 1872 Section 63
AND Movie Products LLP v. Echelon Productions, (Bombay) : Law Finder Doc Id # 2999565
