Madras High Court Allows Release Of Suriya Starrer 'Kanguva' After Producer Makes Part Payment Towards Dues

A division bench of Justice G Jayachandran and Justice CV Karthikeyan also recorded a proposal made by the producer of making a one time settlement of Rs 3,75,00,000 by December in addition to the Rs. 6,41,96,969 already made by the producer. The court thus modified its earlier order asking Gnanavel to deposit Rs 20 crore by today (Wednesday) for allowing the release of the movie and instead granted time till December to make the one time settlement. 

“Taking the proposal into consideration and the part payment made today, the counsels for the Judgment Debtor and the Decree Holder were rerquested to find possibilities of a One Time Settlement for full satisfaction of the debt. After some deliberations, the Judgment Debtor has come forward to pay further some of Rs 3,75,00,000 on or before 11^th December 2024 towards full satisfaction of the decree. For the said purpose, he seeks modification of the order permitting him to release the movie tomorrow. The Judgment Debtor also undertakes to file an affidavit to this effect by 14^th November 2024,” the court noted thus allowing the release of the movie.

The orders were made in an application filed by the Official Assignee appointed by the High Court to deal with the estate of realtor and financier Arjunlal Sunderdas after he was declared insolvent. In 2019, the division bench had allowed a petition filed by the Official Assignee directing Studio Green to pay a sum of Rs. 10,35,00,000/- with an interest of 18% p.a. Stating that the above order was not complied with, the Official Assignee had moved the court to attach Studio Green's future movies and an order was made by the High Court directing the Studio to deposit Rs 1 crore each before the release of Thangalan and Kanguva.

The Official Assignee had now approached the court to modify this order insisting the producer be directed to deposit the entire liability of Rs. 26.34 crore.

On 11^th November, the court had restrained Gnanavel from releasing Kanguva without paying the pending dues. Remarking that the leniency shown to the Judgment Debtor till now was misplaced sympathy, the court noted that the decree holder had been waiting for the past 6 years. The court had thus asked Gnanavel to deposit Rs. 20 Crore on or before the midnight of November 13 to proceed with the release.

“The Decree Holder having waited for nearly six years after obtaining decree is unable to pay the creditors to the insolvent who are waiting for nearly ten years after the insolvency petition was instituted. The leniency shown to the Judgement Debtor so far believing that he has bonafide intention to discharge the debt if not in full, substantially, appears to be a misplaced sympathy. Therefore, this Court has no other alternative except to pass the inevitable order of restraining the second respondent to release the movie by name “Kanguva” without discharging the decree,” the court had observed.

Background

In 2014, Sunderdas was declared insolvent and an official assignee took steps to determine the debtors and creditors of his estate. Noting that KE Gnanavel Raja from Studio Green had to pay a sum of Rs. 10,35,00,000 to Sunderdas, the official assignee approached the court for orders.

Countering this application, Gnanavel informed the court that he and Sunderdas had entered into an agreement to co-produce a tamil movie by investing Rs 40 crore each. He added that as part of this agreement, Sunderdas had paid him money for the pre-production expenses. However, when Sunderdas expressed his inability to pay the remaining amount, an understanding was reached wherein Gnanavel agreed to grant the Hindi remake rights of three Tamil movies – All in All Azaguraja, Biriyani, and Madras which Sunderdas could sell using his contacts in the Hindi film industry.

The court noted that though Gnanavel contended that he had entered into a contract with Sunderdas and thus didn't owe him any money, there was no evidence to prove the same. The court also noted that though there was a mention of granting the Hindi remake rights, no one from Gemini Colour Laboratory, which had the rights, was summoned to speak about the document.

Thus, finding that the documents were neither admissible nor proven in the manner known to the law, the court rejected the defense of Studio Green and allowed the official assignee's petition.

The official assignee had filed the current execution petition after the 2019 order was not complied with. The official assignee had sought to attach Studio Green's future movies till the orders were complied with.

Case Title: The Official Assignee v S Arjunlal Sunderdas and Another

Case No: A 5694 of 2024