Failure to Prove Exact Amount of Loss Does Not Prevent Compensation: Bombay High Court
Courts can award damages even if plaintiff fails to prove the quantums as losses suffered, Bombay High Court recently ruled.
Justice Arif S Doctor passed the judgment directing the defendant film production company Dhariwal Films Pvt. Ltd. to pay approximately ₹1.9 crores as damages to plaintiff Ultra Distributors Pvt. Ltd. in a copyright infringement suit over a movie titled ‘Nehle Pe Dehla’.
The Court adopted a “rough and ready” method of reasonable assessment to compute the plaintiff’s expectation loss. It took note of consent terms uploaded on the court’s computer monitored system (CMat) but which were never filed by parties, wherein the defendant had valued the rights at ₹82.51 lakhs.
Deducting the balance consideration which plaintiff was yet to pay to defendant under the Assignment Agreement, Justice Doctor computed ₹50.01 lakh to be the “expectation damages” which would place plaintiff in the same economic position as if the contract was carried out. The Court also noted the proved publicity expenses and took a higher-end reading of the uncontradicted witness testimony and allowed the entire compensatory claim of ₹1.66 crore.
Ultimately, the Court decreed the suit and ordered defendant Dhariwal Films to pay ₹1.66 crore as compensatory damages, ₹25 lakh as punitive damages, and ₹15 lakhs as legal costs to be paid within 8 weeks. Lawyers Rashmin Khandekar, Pranav Nair, Jyoti Ghag and Shailesh Prajapati, who were briefed by Dua Associates, appeared for plaintiff Ultra Distributors. Advocates Amit Dubey, Abdullah Shaikh and Ashok M Saraogi appeared for defendant Dhariwal Films Pvt Ltd.
FACTS
The suit was filed in 2007 by Ultra Distributors. In the year 2005, Ultra had entered into an agreement with Dhariwal Films (Defendant No.1) to assign all exclusive video rights, cable TV rights and video-on-demand rights for a period of eight years in respect of a film titled ‘Nehle Pe Dehla’ (“the Film”). Ultra had paid an advance amount of ₹10.01 lakh out of a total consideration of ₹42.51 lakh.
However, Defendant No.1 failed to provide master tapes of exploitable quality and instead allowed a competing distributor (Defendant No.2) to exploit the said video rights.
It was brought to light that Defendant No.1 had taken mutually contradictory positions in various legal proceedings as to who actually had rights in relation to the Film.
Observing that award of punitive damages would also ensure that parties did not enter into contracts at the instance of a third person based on false representations or deal in double assignments, Justice Doctor also awarded ₹25 lakhs as punitive damages.
Justice Doctor noted that although plaintiff was unable to prove its quantums as to the losses suffered, the fact that loss had been suffered was proved. Hence it was held that inability to prove quantum does not bar compensation awards.
Damages were computed on a basis which would “place the plaintiff in the same economic position as if the contract had been performed,” the Court said while dealing with Defendant No.1’s appeal.
