The Madras High Court on Monday (August 12, 2024) ordered that the film production house Studio Green, run by K.E. Gnanavelraja, cannot release its upcoming movies Thangalaan, starring ‘Chiyaan’ Vikram, and Kanguva, starring Suriya, without depositing ₹1 crore each before the release of the two movies.
A Division Bench of Justices G. Jayachandran and C.V. Karthikeyan ordered that the production firm must deposit ₹1 crore with the Official Assignee on or before Wednesday (August 14) and report compliance before the court on the same day, as Thangalaan is slated to be released in theatres across the country on Thursday (August 15).
The judges further ordered that another ₹1 crore be deposited before the release of Kanguva. The orders were passed on an execution petition filed by the High Court’s Official Assignee, who had been entrusted with the task of recovering the debts due to insolvent businessman Arjunlal Sunderdas (since dead).
The Official Assignee had filed an application in the High Court in 2016 stating that the businessman, accused of cheating people of several crores of rupees by allegedly luring them to invest in his finance and real estate companies, had decided to co-produce a movie in association with Studio Green in 2011 by investing ₹40 crore.
Accordingly, he had paid ₹12.85 crore to the production house on different dates between September 2011 and October 2012 but decided to back off midway due to a paucity of funds. The production house, however, expressed its inability to repay the entire amount to him since it was spent on pre-production.
The insolvent had got back only ₹2.5 crore, thereby leaving a balance of ₹10.35 crore. The Official Assignee urged the court to direct the production house to deposit ₹10.35 crore with 18 percent interest since December 2013 so that the depositors with Mr. Sunderdas could be repaid their money.
Studio Green resisted the application filed by the Official Assignee claiming it had offset the amount due to Mr. Sunderdas by giving him the Hindi remake rights of three Tamil movies titled All in All Azhaguraja, Biriyani, and Madras and asked him to sell those rights using his contacts in the Bollywood.
However, the production house could produce only a photocopy of the purported agreement between them to prove its claim, stating the original agreement was destroyed in the 2015 floods.
During cross examination, Studio Green’s partner V.K. Easwaran admitted that the main office of the production house was on the second floor of a building on Thanikachalam Street at T. Nagar in Chennai and that it was not affected by the floods.
He, however, claimed the documents pertaining to the transaction with Mr. Sunderdas were kept on the ground floor of another office at Masilamani Street in T. Nagar and they were destroyed. He also claimed to have informed the service tax authorities about the said destruction in 2016.
The Division Bench on August 29, 2019, allowed the Official Assignee’s application after holding that the claim made by the production house did not inspire confidence.
“In the first place, the alleged agreement between the insolvent and the second respondent (Studio Green) in this regard has not been produced. The date of the agreement had also not been stated. The value and the goodwill of the three movies have also not been stated,” the Division Bench had stated.
“No evidence has been let in to justify the stand that the remake rights of the three movies would be exactly equal to ₹10.35 crore. There is also no oral evidence to that extent, let alone documentary evidence. The documents produced are photocopies. The explanation that the originals have been lost in floods had not withstood cross examination,” it wrote and ordered the deposit of ₹10.35 crore with 18 percent interest from 2013.
As this 2019 order was not complied with, the Official Assignee filed the present execution petition with a plea to attach Studio Green’s all future movies, including Thangalaan and Kanguva, until it complies with the five-year-old court order.
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