In a commercial arbitration petition filed before the Bombay High Court under Section 9 of the Arbitration and Conciliation Act, 1996, seeking urgent interim protection to secure the amount in dispute and to protect the subject matter of arbitration, a Single Judge Bench of Justice Amit Borkar directed respondent 1 to deposit Rs.8,85,00,000/- with 15% interest in Court within three working days as security for the petitioner’s claim, restraining the release of the film “Tu Hai Meri Kiran” until the deposit was made, after which the theatrical release could proceed, subject to disclosure of all agreements.
The Petitioner and respondent 1 jointly produced a Hindi film titled “Tu Hai Meri Kiran” starring Sonakshi Sinha, Zaheer Iqbal, and others, under an Agreement for Co-Production effective from 27-03-2024. The petitioner contended that it had invested a total amount of Rs.8,85,00,000/-, comprising Rs.7,50,00,000/- towards it share of the investment and Rs. 1,35,00,000/- towards GST. It was contended that although the respondents were bound under the Agreement to return the said amount, they had failed to do so.
It was submitted that the cheque issued by respondent 1 for Rs.7,50,00,000/- was dishonoured in January 2026 because the payment was stopped. The Respondents announced a theatrical release for 23-10-2026. The petitioner alleged that this release was in breach of its lien, joint ownership, consent rights, confirming-party status and agreed credits. Hence, the present petition.
The Petitioner argued that respondent 1 breached multiple clauses, that the cheque was issued towards an existing liability and not as security, and that the petitioner’s right to revenue was an independent right under the Agreement. It was also alleged that respondent 1 had allegedly entered into agreements with third parties, including PAM Studios and Saregama India Limited without obtaining the petitioner’s prior consent and that their logos also appeared on the poster of the film. The respondents argued that the petitioner was a partner in the venture and not merely a financier, and that its investment was secured by the film and the lien. It was contended that the petitioner had promoted the release through Instagram posts and consented by conduct under Section 63 of the Indian Contract Act, 1872, and that the cheque was only additional security.
The Court noted that the agreement gave the petitioner rights in relation to the film, its commercial exploitation, the way in which agreements with third parties are to be made and the credits which have to be given in the Film and its publicity material. It was also said that even if the money claimed by the petitioner is secured, that will not bring its other rights under the agreement to an end. Reading Clause 5.3 on its plain terms, with the words “whichever is earlier”, the Court found that the obligation to return the investment became due on 27-04-2025. It rejected the argument that repayment arose only after revenue was earned, because that reading would leave the time limit in Clause 5.3 without meaning.
Further, the Court stated that the respondents had not established that the cheque was only issued as security for an amount which might become payable at some uncertain future time. The Court found that the issuance of the cheque after the Clause 5.3 period expired, supported the case that repayment was due, although the dishonour alone did not finally decide liability or establish every part of the liability. On Clauses 5.1, 5.2 and 11.2, the Court did not find that the respondents had signed third-party agreements, but held that offers had been received and commercial exploitation was near, which is why the petitioner was not required to wait for a contrary agreement to be signed and third-party rights are created before it can approach the Court for protection.
On the respondents’ argument that the petitioner could not first publicly support the release and then ask the Court to stop it by an injunction, the Court noted that the petitioner took part in promoting the film and announced the release date of the film through the Instagram collaboration wherein tags of Saregama and PAM were also present. It was stated that the question was not only whether the petitioner did something which was different from what it was saying and that the real question was whether, by doing that act, the petitioner intended to give up the right which it was trying to enforce.
The Court stated that the petitioner’s conduct did not show that it agreed to allow third-party exploitation agreements to be signed without its consent or without making it a confirming party. It was said that such an intention could not be assumed merely because the petitioner helped in promoting the film. Further, the Court said that an order which stops the release, without giving respondents an opportunity to secure the petitioner’s claim, may cause serious loss. However, it was said that the respondents had not shown that allowing the film to be released after securing the petitioner’s claim would cause similar prejudice to them.
Noting that the petitioner had asked for a direction requiring the respondents to disclose all agreements and arrangements relating to the film, the Court stated that disclosure was necessary to know the actual position and to avoid any later dispute. It was held that the disclosure must cover agreements signed, proposed agreements, term sheets, offers, and arrangements which are under consideration, and that it must include production agreements and details of amounts received or which were to be received. It was also directed that if no agreement had been signed, the respondents must say so in their affidavit.
Furthermore, the Court directed the respondents to ensure that all publicity material under their control, including posters, trailers, teasers and digital promotional material, contains the credits and logo required under the agreement.
Hence, the petition was allowed in substantial part, with conditions. Respondent 1 was directed to deposit Rs.8,85,00,000/- with interest at 15% per annum in Court within three working days, as security and without prejudice to the parties’ contentions in arbitration. Until the deposit was made, the respondents were restrained from releasing or commercially exploiting the film. The Court directed that after the deposit, the respondents could proceed with the theatrical release, subject to other directions and the Co-Production Agreement.
The respondents were also directed to file a disclosure affidavit within five working days and to comply with Clauses 5.1, 5.2 and 11.2 by making the petitioner a confirming party and obtaining prior consent. They were required to account for revenue in a separate designated account and to correct publicity material within forty-eight hours to carry the agreed credits. Respondent 2 was directed not to assist in any act contrary to the order, but no direction was passed requiring him personally to deposit the investment amount. The findings were recorded as interim only and the respondents’ request for a stay of the Judgment was rejected.
