PVR VS STUDIO 18

A Dispute over Term Sheet

Agreement

Under the aegis of Ms. Monica Suri

Assistant Professor Law Department
Amity Business School

Presented by:
Ayushi Gulliya (D 03)
Nishita Aggarwal (D 04)
Tisha Gugliani (D 05)
Shraddha Tripathi(D 08)
Pankaj Ishpujani (D 30)
Rahil Kataria (D 41)
 Studio 18

Studio 18 is the first studio model based

motion picture business in India, with an
Operation that involves acquisition,
Production, syndication, marketing and
World wide distribution of full length
feature films.

It is a part of Viacom 18 which is joint venture

of Viacom 18 and Network 18.
FACT SHEET OF STUDIO 18

Type Public
Founded 16 feb 1997
Holding company Network 18
Registered Office Mumbai
Distribution Office London and New York
Industry Entertainment
Key People:
CEO Sandeep Bhargava
CFO Sibashish Sarkar
Other subsidiaries CNBC TV 18
MTV, IBN7, NICK.
Pioneer in multiplex development in India, it is the
largest cinema exhibition player in the country
today. It began its operation in 1997. The first
multiplex in India was PVR Anupam at Saket in
South Delhi. It also ventured into the film
distribution. It also set up PVR pictures a fully
owned subsidiary of PVR Ltd.
FACTSHEET OF PVR LTD.

Type Public
Founded 27 th March 1995
Registered Office New Delhi
Industry Entertainment
Key People:
Chairman and MD Ajay Bijli
Authorised Capital 20 crores
 WHAT IS A CONTRACT??
Section 2(h) of the ‘Indian Contract Act’ states-

‘AN AGREEMENT ENFORCEABLE BY LAW IS A

CONTRACT.’

The two essential elements of a contract-

 An Agreement: As per section 2(e) of the act, 'every promise
and every set of promises forming the consideration for each
other is an agreement.’
 A Legal Obligation: An agreement to become a contract must
give rise to a legal obligation i.e. a duty enforceable by law.
 Lawful consideration
Offer and acceptance legal relationship

Capacity of
parties

Free
Valid contract consent

Legality of
Legal object Certainty of object
Possibility of
formalities
performance
 PROCEEDINGS OF THE CASE

IN THE HIGH COURT OF DELHI AT NEW DELHI

M/S PVR PICTURES LTD.(PLAINTIFF)

THROUGH: MR. HARISH MALHOTRA, SENIOR ADVOCATE
MR. TANUJ KHURANA, ADVOCATE
VS
STUDIO 18 (DEFENDANT)
THROUGH: MR. RAJIV NAYAR, SENIOR ADVOCATE
MR. P.S SUDHEER, ADVOCATE
MR. VYAPAK DESAI, ADVOCATE
MR. P.V DINESH, ADVOCATE

IN FRONT OF
HON’BLE JUSTICE MR. S.RAVINDRA BHAT
 FACTS OF THE CASE
•A Term Sheet Agreement(TSA) was signed on 8th of September,
2008 in respect of five movies-Kidnap, Golmaal Returns, Dil
Kabbaddi, Ghajini, and Shortkut for East Punjab Territory. Further
direction to defendant (Studio-18) to deliver print and publicity
materials for movie upon receiving advance payments by signing a
“fresh license of exploitation rights agreement.”

•The dates of release of each film were mentioned in Part-5 of the

TSA, that 21 days before the date of release, the plaintiff (PVR) had to
pay 33% of the advance amount.

•Under the TSA, the advance money for ‘Shortkut’ was decided at
Rs.90 lakhs, payable 21 days before the release.
•After the successful release of the four movies, defendant planned
to release ‘Shortkut’ through some other distributor.

•Hence plaintiff aggrieved by their intention filed a suit claiming

‘injunction’ and relief for ‘specific performance’ arguing on the fact
that if the rights were denied to them, their loss would be
uncompensatable and the defendant would go ahead with the
release, denying them forever, the chance to exploit its rights.
ARGUMENT

PVR avers that TSA amounted to an

exclusive license and hence could not
be interpreted as MOU merely because
TSA mentions that they would execute
a separate formal agreement. However,
on the same point, defendants counsel
argues that there was not grant of
license. TSA was a mere agreement and
not a binding contract evidencing a
license in law.
 PROOF IN FAVOUR OF STUDIO 18

SUBMISSION OF E-MAIL BY PVR TO STUDIO 18 –

“…as soon as the strike got over we represented to you

to come forward and sign a License of Exploitation
Rights agreement for the aforesaid movie so that the
exploitation rights could come exclusively to us…”
 VERDICT

The question which the court has to answer is whether the

plaintiff is licensee of the defendants and if so, entitled to
interim injunction.
The Honorable Court held that “the plaintiff does not
possess any legal right or copyright, to entertain
the suit, there is no prima facie merit in the case.”
Hence, it is not maintainable.
“The plaintiff also cannot claim interim injunction
because it has not expended any amount, or paid
any consideration to the defendants.” Hence, plaintiff
cannot complain of prejudice.
ELEMENTS OF THE CONTRACT ACT
DISCUSSED IN THE CASE
 Difference between agreement and contract :
Agreement does not have legal implications while
contract creates a legal relationship and is final and
binding upon the parties.

 Anticipatory and implied

Breach of contract :
Anticipatory breach is a breach of contract occurring
before the time fixed for performance has arrived
and may be communicated to other party directly or
by the intentions of the party. Under this implied
breach is not communicated but is expressed
through party’s conduct at the time of the contract.
 SpecificPerformance and Injunction :
Is a remedy to breach of contract where monetary compensation is not enough
and promissor is required to perform his part of promise.

 Sec30 of Copyrights Act 1957 confers exclusive rights to the owner of the
copyright to grant any interest in the right through grant of license.
Thank You