Contradictory Positions, Costly Consequences: Bombay HC on Competing Film Rights Assignments

Can a party who takes flatly inconsistent positions on who owns the same rights, first backing one claimant, then reversing to support a rival, be made to pay punitive damages for it? The Bombay High Court answered in Ultra Distributors Pvt.Ltd. v. M/s. Dhariwal Films Pvt. Ltd. and 2 Ors.¹, decreeing that Ultra Distributors holds the sole and exclusive video, cable television, and video-on-demand rights to a Hindi feature film, and awarding it over Rs 2 crore in compensatory damages, punitive damages, and costs. Justice Arif S. Doctor found that Dhariwal Films had taken “different and plainly contradictory stands” on competing claims to the same rights, holding this conduct “really amounts to misrepresentation and cheating.” For practitioners in entertainment and IP litigation, the judgment is a useful illustration of how a defendant’s own shifting positions, taken across multiple proceedings, can both establish a plaintiff’s title and independently justify punitive damages.

In 2005, Dhariwal films approached Ultra Distributors offering to assign its video rights to the film, telling Ultra that an earlier assignment of the same rights to a company called Showman Exports had been cancelled in writing dated 25 November 2002. On that basis, Ultra and Dhariwal executed an Assignment Agreement dated 31 March 2005 for a total consideration of Rs 42,51,000, of which Ultra paid Rs 10,01,000. A second party, referred to in the judgment as Defendant No. 2, separately claimed to hold the same video rights, tracing its title through an assignment from Qamar Films to Showman dated 4 February 2002, followed by an assignment from Showman to itself dated 30 May 2002, and a further Deed of Assignment purportedly executed by Dhariwal Films in its favour on 28 August 2002. Defendant No. 2 had filed its own suit asserting these rights, but the Court had already dismissed that suit by an order dated 20 April 2026, after finding that the eight-year tenure of the assignment it relied on had expired by efflux of time and nothing survived for adjudication. Ultra sued Dhariwal Films for breach, alleging Dhariwal had failed to supply Digibeta Master tapes of commercially exploitable quality as required under the 2005 agreement, and for a declaration that its assignment was valid and that Defendant No. 2’s competing claim was not.

Validity of Ultra’s Assignment

The Court found the existence and validity of Ultra’s assignment straightforward on the facts, noting Dhariwal Films had never, at any stage, disputed either executing the 2005 agreement or receiving the Rs 10,01,000/- payment. What made the case turn decisively in Ultra’s favour, however, was a string of contemporaneous admissions Dhariwal Films had itself made elsewhere. In a written statement filed in Defendant No. 2’s own suit, Dhariwal Films had affirmed that rights in the film were “with the present Plaintiff,” meaning Ultra, and that the necessary print and cassette had been delivered to it. In an affidavit filed in a separate motion, Dhariwal Films had gone further, taking the specific position that Showman never had authority to assign the video rights to anyone without the producer’s consent, directly undercutting the chain of title Defendant No. 2 relied on. Separately, Consent Terms executed between Ultra and Dhariwal Films, though never filed in court, expressly recorded that the 2005 agreement was “binding, valid and subsisting” and that Dhariwal Films acknowledged receiving the Rs 10,01,000/- payment. Weighing all of this together, the Court held that Dhariwal Films’ positions were “clearly mutually inconsistent and incapable of reconciliation,” and that this “speaks volumes in respect of the lack of credibility and commercial dishonesty” on its part. 

The Master Tapes and the cost of Silence

On whether Dhariwal Films had supplied Digibeta Master tapes of commercially exploitable quality, the Court’s reasoning turned on a procedural point with real teeth. Ultra had specifically pleaded, in its plaint, that Dhariwal Films failed to provide exploitable-quality masters within the stipulated time. Dhariwal Films never specifically addressed this allegation in its written statement. Relying on the Supreme Court’s decision in Thangam v. Navamani Ammal,² which held that Order VIII Rules 3 and 5 of the Civil Procedure Code³ require a specific admission or denial of pleaded facts and that a general or evasive denial will not do, the Court held that Dhariwal Films had, “for want of non-traverse, admitted” that acceptable Digibeta tapes were never delivered. The Court added that even assuming certain tapes had been physically tendered, Dhariwal Films had led no evidence at all, no technical report, delivery acknowledgment, or correspondence, to establish they were of the required quality, while Ultra’s own evidence on the point went unimpeached.

Damages

On quantum, the Court accepted Ultra’s evidence of the commercial loss flowing from its inability to exploit the rights it had paid for, and separately accepted its evidence of expenditure already incurred preparing for release, including invoices for publicity material and printed inlay covers. Notably, the Court used the Consent Terms themselves as a valuation benchmark: since those terms had recorded the rights’ value at Rs. 82,51,000, a figure Dhariwal Films had itself proposed, and Ultra would only have owed a further Rs 32,50,000 to complete payment under the original agreement, the Court treated the difference of Rs. 50,01,000 as a measure of the “Expectation Damages” needed to place Ultra in the position it would have occupied had the contract been performed. Combined with Ultra’s proven expenditure, the Court found sufficient evidentiary basis to award the full Rs. 1,66,75,000 claimed. On punitive damages, the Court was explicit that these were warranted not merely because Dhariwal Films had failed to perform its contract, but because it had represented that the Showman assignment was cancelled, accepted payment on that basis, later confirmed the agreement’s validity in the Consent Terms, then still later reversed course to support Defendant No. 2’s rival claim on oath in another proceeding. This sequence, the Court held, amounted to “misrepresentation and cheating” warranting a further Rs. 25,00,000.

The collapse of the chain title

The Defendant No.2 fared no better. The court found its documentary record riddled with defects, including an assignment deed with no witness signatures, no company seals, and executed on stamp paper bearing neither a serial number nor a vendors’ signature, with the names of the film’s producers, director and cast left blank in the schedule. Cross-examination compounded the problem: Defendant No. 2’s own witness admitted he believed the company already owned the rights before executing a supposedly confirmatory deed “as a precautionary measure,” could not explain why that deed required a fresh Rs. 7,00,000 payment if it were merely precautionary, and could not account for how or when the rights he claimed had already vested would need reconfirming at all. Finding the chain of title neither clear nor consistent, and Defendant No. 2 unable to discharge its burden of proving it acquired the rights, the Court answered every issue concerning Defendant No. 2’s claim against it and decreed the suit in Ultra’s favour, directing Dhariwal Films to pay the full damages, punitive damages, and costs, with 8% interest to apply if payment was not made within eight weeks.

The judgment is a reminder that a party’s own conduct across parallel or successive proceedings can be turned against it with real force: admissions made in one suit, an affidavit filed in another, and terms recorded in a settlement that was never even filed, were together enough to both prove a plaintiff’s title and to characterise the defendant’s overall conduct as dishonest enough to attract punitive damages. It is equally a reminder of the practical cost of a non-traverse under Order VIII Rule 5, a specific factual allegation left unanswered in a written statement can be treated as admitted, regardless of how the case is argued at trial. And for parties valuing damages in copyright assignment disputes, the Court’s use of a settlement figure the defendant itself proposed, even one recorded in an unfiled settlement, as a benchmark for expectation damages is a notable piece of reasoning worth keeping in mind when assembling evidence on quantum.

Citations

1. Ultra Distributors Pvt. Ltd. v. M/s. Dhariwal Films Pvt. Ltd. and 2 Ors., Commercial IP Suit No. 26 of 2007, Bombay High Court ↩︎
2. Thangam v. Navamani Ammal, (2024) 4 SCC 247 ↩︎
3. Code of Civil Procedure, 1908, Order VIII Rules 3 & 5 ↩︎

Expositor(s): Adv. Pratistha Dahiya