Disclaimer: This has been reported after the availability of the order of the Court and not on media reports so as to give an accurate report to our readers.
Delhi High Court: The present application was filed by the plaintiff-Super Cassettes Industries Private Limited (T-Series) under Order 39 Rule 2-A, Civil Procedure Code, 1908 (CPC) read with Sections 11 and 12, Contempt of Courts Act, 1971 (the Act) and Article 215 of the Constitution seeking initiation of contempt proceedings against Reliance Entertainment Studios Private Limited (defendant) for alleged wilful disobedience of Court’s directions related to deposit of admitted amounts and violation of restraint orders regarding release of cinematograph film and web series, “Crakk” and “Indian Police Force” respectively. A Single Judge Bench of Manmeet Pritam Singh Arora, J., held that the defendant and its responsible officers (Respondents 1, 2 and 3) were guilty of wilful disobedience of the order dated 19 December 2023 for failure to deposit ₹7.42 crores and ₹2.32 crores within the stipulated period and therefore, they are guilty of contempt of court.
Factual Matrix
The plaintiff extended a loan of ₹168 crores to the defendant for partial financing of 6 films under a Loan Agreement dated 19 May 2021. The agreement provided that apart from repayment of principal, the plaintiff would be entitled to cost of capital at 12.5 per cent and revenue share of 3 per cent from the films. To secure repayment, the plaintiff was given lien/charge on revenues from the 6 films and also on revenues from other films produced or co-produced by the defendant.
The agreement was later amended by Loan Letter Agreements dated 6 August 2022, 19 September 2022 and 17 March 2023, and under the last amendment the defendant acknowledged liability of ₹190.24 crores plus ₹7.52 crores. The defendant admitted in its written statement that only ₹143.73 crores had been repaid.
At the first hearing by order dated 23 November 2023, the Court directed the defendant to disclose receivables from third parties in respect of films over which the plaintiff had lien. In its affidavit dated 7 December 2023, the defendant disclosed that ₹7.42 crores were receivable from Zee Entertainment and ₹2.32 crores were payable on account of films “IB71” and “Bholaa”.
In order dated 19 December 2023, the Court recorded the undertaking of the defendant to deposit the admitted amounts and directed that the same be deposited within 2 weeks. The Court also restrained the defendant from releasing any cinematograph film or transferring rights without leave of the Court.
The plaintiff thereafter filed the present contempt application alleged wilful disobedience of Court’s orders dated 23 November 2023 and 19 December 2023, non-compliance of payment directions, delayed payments, and release of film “Crakk” and web series “Indian Police Force” without leave of the Court.
Moot Points
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Whether the defendant had wilfully disobeyed the Court’s direction to deposit ₹7.42 crores and ₹2.32 crores within two weeks, as recorded in the order dated 19 December 2023?
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Whether the defendant had violated the restraint order by releasing the film “Crakk” and the web series “Indian Police Force” without obtaining leave of the Court?
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Whether the defendant’s conduct in delaying compliance with directions and failing to disclose bank account details amounted to contempt of court?
Court’s Findings and Analysis
The Court held that the loan agreements and subsequent amendments clearly showed that the primary liability to repay the loan continued to remain with the defendant, and the creation of lien on revenues or arrangement for payment through third parties did not absolve the defendant from its obligation. The Court observed that the direction dated 19 December 2023 was “unequivocal and clear” and required the defendant to ensure deposit of the admitted amounts within two weeks.
With respect to non-payment of ₹2.32 crores, the Court noted that the defendant failed to comply within the stipulated time and deposited the amount only on 8 May 2025 after repeated directions. The Court held the delay to be wilful and unsupported by valid justification.
Regarding non-payment of ₹7.42 crores, the Court rejected the defendant’s contention that the obligation for payment was on Zee Entertainment, a third-party vendor, and held that the defendant had undertaken to ensure payment and therefore, could not avoid compliance. It was observed that belated receipt of ₹4.29 crores in instalments and the remaining shortfall of ₹3.13 crores clearly showed non-compliance with the order.
Regarding the release of the film “Crakk”, the Court observed that the defendant had taken inconsistent positions about its involvement in the film’s production. The Court remarked that the timing of the alleged termination of the production agreement raised doubts and might possibly be “a smokescreen to overcome the restraint order”. However, since the factual position required deeper examination, it left the matter to be determined at trial.
Similarly, in relation to web series “Indian Police Force”, the Court found that the defendant’s claim of not being a producer was prima facie contradicted by the display of its name in the credits of the series. Nonetheless, the Court deferred final determination of this issue to the trial stage.
The Court also noted that the defendant repeatedly failed to comply with directions, including the order to file details of bank accounts, and such conduct demonstrated “a consistent manner of not complying with the directions of this Court in a timely manner”.
Court’s Decision
The Court held that the defendant and its responsible officers were guilty of wilful disobedience of the order dated 19 December 2023 for failure to deposit ₹7.42 crores and ₹2.32 crores within the stipulated period. Accordingly, the Court held the defendant and its responsible officers guilty in T-Series and Reliance Entertainment contempt case.
The Court issued the following directions:
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Directed the respondents concerned to undergo simple imprisonment for 4 weeks, subject to an opportunity to purge the contempt.
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Granted 2 weeks to the defendants to deposit the balance amount of ₹3.13 crores along with interest at 12.5 per cent per annum.
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Directed them to pay interest at 12.5 per cent on the delayed payments of ₹4.29 crores and ₹2.32 crores, calculated from the date the payments were originally due until the date of actual payment.
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Suspended the sentence of imprisonment for 2 weeks to enable compliance, with direction to the respondents to furnish bail bonds of ₹1 lakh each before the Joint Registrar.
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If the payment as directed above is deposited within 2 weeks, the prison sentence should be remitted and the bail bonds would be discharged.
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Until the defendant had not made the above directed deposit, the plaintiff would have a continuing cause of action against the defendant and respondents for maintaining a fresh contempt petition.
[Super Cassettes Industries (P) Ltd. v. Reliance Entertainment Studios (P) Ltd., CS(COMM) 840/2023, CC(COMM) 21/2024, I.A. 23284-23285/2023 I.A. 23378/2023, I.A. 519/2024, I.A. 815/2024, I.A. 873/2024, I.A. 978/2024, I.A. 3970-3971/2024, I.A. 6629/2024, I.A. 9066/2024 I.A. 36331/2024 & I.A. 23392/2025, decided on 10-3-2026]
*Judgment by Justice Manmeet Pritam Singh Arora
Advocates who appeared in this case:
Mr. Amit Sibal, Sr. Adv., Mr. Harsh Kaushik, Mr. Darpan Sacheva, Ms. Srishti Mishra, Mr. Harsh Prakash, Mr. Saksham Dhingra and Mr. Vinay Tripathi, Advs., Counsel for the Plaintiff
Mr. Saurabh Kirpal, Sr. Adv., Ms. Malvika Kapila Kalra, Ms. Tanwangi Shukla, Mr. Junaid Aamir, Ms. Harbani S. and Ms. Apoorva Jain, Advs., Counsel for the Defendant
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