Delhi High Court Sentences Reliance Entertainment Studios Executives To 4 Weeks Jail For Contempt Over T-Series Dues
The Court has, however, kept the sentence in abeyance for two weeks to allow payment of the remaining amount along with interest.
The Delhi High Court on Tuesday sentenced three senior executives of Reliance Entertainment Studios Private Limited, part of the Anil Ambani-led Reliance Group, to four weeks of simple imprisonment in a contempt case after they failed to comply with its directions to deposit amounts payable to Super Cassettes Industries Private Limited (T-Series). According to the court, Rs 3.13 crore still remains unpaid.
Justice Manmeet Pritam Singh Arora, however, suspended the sentence for two weeks to grant the respondents an opportunity to purge the contempt by depositing the remaining amount and interest as directed by the court. The respondents are the director, the additional director, and the authorised representative of the company.
The dispute traces back to a commercial suit filed by T-Series seeking to recover about Rs 60 crore, which it said remained unpaid from a Rs 168 crore loan extended to Reliance in 2021 for financing six films.
When the matter came up before the court in December 2023, an affidavit filed by Reliance disclosed two admitted sums. One was Rs 7.42 crore receivable from Zee Entertainment Enterprises Limited. The other was Rs 2.32 crore arising from revenues of the films IB-71 and Bholaa. The Court directed that both amounts be deposited within two weeks.
T-Series later approached the Court alleging that the direction had not been complied with within the stipulated period and sought initiation of contempt proceedings.
It also told the Court that Reliance had breached an earlier restraint order by releasing the web series Indian Police Force and the film Crakk without obtaining prior permission.
Reliance Entertainment Studios, however, disputed responsibility for the payment expected from Zee Entertainment. According to the company, its role was limited to instructing the third-party vendor to deposit the amount with T-Series.
The company further claimed that it was unable to immediately pay the Rs 2.32 crore amount because its bank accounts had been attached by statutory authorities.
Further, the company maintained that the web series Indian Police Force was merely a line-production assignment commissioned by Amazon and was neither produced nor co-produced by Reliance, and therefore did not fall within the scope of the Court's earlier restraint.
With respect to the film Crakk, the respondents argued that their agreement with the co-producer had been terminated on December 8, 2023, and therefore there was no requirement to seek the Court's permission before its release.
Rejecting the respondents' attempt to shift liability to a third party, the Court clarified that a contractual “lien or charge on revenue” does not amount to a legal assignment of liability.
“The Defendant's stand that it has not produced or co-produced the said web series is prima facie negated by the said display of the Defendant's name in the credits of the said web series. No document/agreement has been filed by the Defendant to substantiate its plea that it was merely a line producer in this web series,” the Court observed.
The Court held that the respondents were guilty of wilful disobedience of its directions regarding the deposit of admitted sums and sentenced them to four weeks' simple imprisonment.
However, the Court granted them an opportunity to purge the contempt by depositing the outstanding balance and interest.
“Accordingly, Respondent Nos. 1, 2 and 3 as well as the Defendant company are given two [2] weeks' time to deposit the balance amount of Rs.3.13 crores along with the interest at the rate of 12.5% per annum. The Defendant will also deposit interest at the rate of 12.5% per annum on the delayed payment of Rs. 4.29 crores as well as Rs. 2.32 crores calculated from 02.01.2024 [the date when the payment was supposed to be made vide order dated 19.12.2023 until the date of their actual payment]” the Court said.
The court added that if the payment along with interest is not made within two weeks, the three executives will have to undergo four weeks' imprisonment.
Accordingly, the contempt application was allowed and disposed of.
For Plaintiff: Senior Advocate Amit Sibal, Advocates Harsh Kaushik, Darpan Sacheva, Srishti Mishra, Harsh Prakash, Saksham Dhingra, and Vinay Tripathi.
For Defendant: Senior Advocate Saurabh Kirpal, Advocates Malvika Kapila Kalra, Tanwangi Shukla, Junaid Aamir, Harbani S., and Apoorva Jain, for the defendant company.