Dream Warrior Pictures Vs Reliance Entertainment Studios Pvt. Ltd. (NCLT Mumbai)
NCLT held that it has no jurisdiction to decide copyright violations or contractual termination claims related to the Hindi remake of Kaithi (Bholaa). Dream Warrior Pictures’ Section 9 application against Reliance Entertainment was rejected as no undisputed operational debt existed.
Background: Dream Warrior Pictures (“Applicant”) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“Code”) seeking initiation of the Corporate Insolvency Resolution Process (“CIRP”) against Reliance Entertainment Studios Private Limited (“CD”/Corporate Debtor) for non-payment of operational debt. The dispute arose out of agreements relating to the Hindi remake of the Tamil film Kaithi, titled Bholaa.
Agreements and Payments:
- Original Co-Production Agreement (30.01.2020): Applicant and CD’s group company RFPL agreed to co-produce the Hindi remake of Kaithi, with equal ownership of rights.
- Remake Rights Assignment Agreement (29.03.2023, effective 03.01.2022): The Applicant became the sole copyright owner of the assigned rights, granting CD 50% remake rights in Hindi.
- Assignment to ADF (Ajay Devgn Ffilms): Both Applicant and CD assigned their respective 50% rights to ADF, with CD responsible for payment of the total assignment consideration. Intellectual Property Rights (IPR) of the remade film were to vest equally among Applicant, CD, and ADF.
Payment Terms:
- Assignment Fee: ₹2.5 crore (split into two tranches: ₹1 crore paid on 05.04.2022, balance ₹1.5 crore due within 30 days of theatrical release).
- Additional Fee: ₹2.5 crore due within 60 days of theatrical release.
- Variable Fee: ₹15 crore based on revenue milestones (achieving NBOC thresholds of ₹175, ₹200, and ₹300 crore).
- Clause 4.6 specified that payment would be subject to receipt of a valid invoice from the Applicant.
The remade film Bholaa was released on 30.03.2023. The CD paid ₹1.08 crore (inclusive of GST) and no further payments were made.
