This legal decision examines a contractual breach in the context of film rights and intellectual property, focusing on the failure to deliver pre-release materials within the stipulated timeframe. The Court held that such non-compliance amounted to a fundamental breach of the Assignment Agreement, warranting injunctive relief. It emphasized that in intellectual property disputes, monetary damages are often inadequate to prevent irreparable harm, thereby justifying equitable remedies. The ruling reiterates the necessity of strict contractual adherence in the entertainment industry, where unique creative assets and exclusive territorial rights are at stake.
The dispute in the case of Ivy Entertainment Private Limited vs Hr Pictures, (CS(COMM) 264/2025 & I.A. 7656/2025 I.A. 7657/2025 I.A. 7658/2025) revolves around an Assignment Agreement dated June 19, 2024, concerning the Tamil film “Veera Deera Sooran.” Under this agreement, the defendant (the producer/assignor) assigned the cinematic, digital, and satellite rights to the plaintiff (the assignee) for specific territories and languages. Notably, this included exclusive rights in Hindi and North Indian languages. The agreement operated as a complete assignment rather than a limited license, thereby transferring ownership and control over the specified rights to the plaintiff. Such a transfer significantly increases the assignee’s stake and legal vulnerability if the assignor fails to perform its delivery obligations.
The agreement also outlined the obligations for the timely delivery of release materials and specified the conditions for the film’s theatrical release. In a recent legal dispute, the plaintiff aimed to prevent the defendant from releasing the Assigned Film on March 27, 2025. The plaintiff argued that the defendant had not met important pre-release requirements. The plaintiff contended that the defendant had breached the pre-release delivery obligations under Article 2.15 and related clauses, which required the timely provision of the “Before Release Materials” and “Theatrical Release Materials.” These materials were essential for marketing, dubbing, and synchronization across territories.
Interestingly, the defendant only obtained the necessary certification from the CBFC for the Tamil version on March 22, 2025, and acknowledged that they hadn’t provided the Before Release Materials and Theatrical Release Materials as stipulated in their agreement. The plaintiff had already made a substantial payment of Rs. 44 crores out of the total Rs. 51 crores agreed upon. The Court noted that this substantial performance tilted the balance of convenience in favour of the plaintiff, as withholding the materials despite major payment created an inequitable position. A key point of contention arose over whether the March 27 release date was set with the plaintiff’s consent and if the delivery of the required materials was essential before the film’s release and the remaining payment.
A few essential issues were raised that could significantly impact the outcome. The foremost issue was whether the defendant’s non-delivery constituted a fundamental breach under Section 39 of the Indian Contract Act, 1872, that is, a failure that goes to the root of the contract and defeats its very object, thereby entitling the non-breaching party to rescind or seek equitable relief. It’s also worth discussing whether the plaintiff’s non-payment of the final tranche, amounting to Rs. 7 crores, might prevent them from seeking any relief. Lastly, whether damages would be a sufficient remedy or if an interim injunction would be necessary to address the situation effectively. Each of these points plays a critical role in determining the best course of action moving forward.
Arguments
Plaintiff
The situation regarding the film release is a bit complex. According to the contract clauses (Article 1.9, 1.24, 2.15, 4.1), the plaintiff contended that the defendant needs to provide the necessary materials at least 14 days ahead of the film’s release. Unfortunately, due to delays and breaches on the defendant’s part, a simultaneous release in the designated territories has become impossible. This has put the plaintiff in a tough spot, especially since their ability to negotiate digital rights with platforms like OTT could suffer if the film launches without the supporting materials. To help resolve this issue, the plaintiff has expressed willingness to deposit the final Rs. 7 crores within just 24 hours, provided the release is postponed by four weeks. The plaintiff expressed that this seemed like a fair compromise to ensure everything goes smoothly.
Defendant
The defendant contended that the plaintiff was aware that the release date was set for March 27, 2025, yet did not submit a written request for the delivery of materials. The defendant also argued that there was an outstanding final payment of Rs. 7 crores, and as a result, the plaintiff wasn’t entitled to the materials until this payment was completed. Additionally, any damages incurred could be quantified and compensated appropriately. The defendant expressed that it’s crucial to consider that any last-minute postponements could negatively affect other distributors and third parties involved as well.
Decision
The Court ruled that the obligation to deliver both Before Release and Theatrical Release Materials at least 14 days prior to the release was absolute, meaning it was not dependent on a request from the plaintiff or their final payment. It found that the defendant’s failure to provide these materials and secure written approval for the release date was a clear breach of the Assignment Agreement. The decision also noted that the balance of convenience and the risk of irreparable harm to the plaintiff’s rights especially concerning digital exploitation—warranted temporary injunctive relief. In cases involving intellectual property and entertainment rights, damages are often deemed insufficient, as supported by established case law and the terms of the agreement. However, it was acknowledged that the final payment of Rs. 7 crores was still pending, and the plaintiff was not entitled to receive the materials without completing this payment. It was concluded that damages could indeed be quantified and compensated, and that postponing the release at the last minute would negatively affect other distributors and third parties involved.
An interim injunction has been granted, which means the defendant cannot release the film for four weeks starting from March 27, 2025. However, the plaintiff must deposit Rs. 7 crores within 24 hours to ensure this. Once the payment is made, the defendant is required to deliver all necessary materials within 48 hours. To help oversee this process, the court has appointed a Commissioner to supervise the defendant’s compliance with these delivery obligations. Additionally, the plaintiff has been ordered to pay Rs. 25,000 in costs for not disclosing relevant correspondence, specifically an email dated February 4, 2025. Finally, a timeline has been set for the pleadings, with further proceedings and issue framing scheduled.
Conclusion
This decision reinforces the primacy of contractual compliance in film and IP assignment transactions. It reiterates that a party in breach cannot expect strict adherence from the non-breaching counterpart. Where intellectual property rights and release timelines are at risk, courts tend to favour injunctive relief over damages due to the difficulty of quantifying creative loss. The ruling thus underscores judicial sensitivity to protecting creative and territorial rights within the entertainment industry, reminding stakeholders that diligence in documentation and timely performance are indispensable.
Authored by: Advocate Bhavpreet Singh Soni
Advocate Bhavpreet Singh Soni is a corporate lawyer and founder of Sonisvision Corporates LLP and Billionpreet Growth Consultant Pvt. Ltd. Specializing in intellectual property, startup consulting, and legal compliance, he has guided numerous entrepreneurs on trademark strategy, business structuring, and funding. An IIM-trained strategist and former BNI leader, Bhavpreet actively contributes to legal education platforms and YouTube, with a mission to simplify legal processes and empower startups to grow with robust legal and IP foundations.
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