 "Reliance Entertainment")
The Delhi High Court on Wednesday approved Reliance Entertainment Studios’ agreement to share 50 per cent of its profits from the upcoming Netflix film ‘Amar Singh Chamkila’ with Super Cassettes Industries Private Ltd (SCIL), the operator of the music label and film production house T-Series.
To address the enforcement of the lien or practical charges, Reliance provided an undertaking, according to media reports. The court directed Reliance to fulfil its commitments including depositing a fixed commission of 2 per cent from the licensing fee, to be deducted from the final payment received by Reliance from Netflix, as well as 50 per cent of the profits generated by the film ‘Amar Singh Chamkila’.
“These measures demonstrate a fair approach to reconciling the interests of all parties involved and ensuring compliance with the contractual and legal frameworks governing the relationships between SCIL, Reliance, Netflix, and WSF,” Justice Sanjeev Narula said.
The judge noted that films like ‘Section 84’ and ‘Singham Again’ were produced by other entities, such as Film Hangar LLP and Rohit Shetty Picturez LLP, where Reliance is only a partner. The reasoning applied to these productions as well, given their collaborative nature.
The HC deemed it unsustainable for SCIL to claim that revenues generated from the Netflix-Reliance Agreement, executed under the License Agreement between WSF and Reliance, constitute revenues in Reliance's possession, over which SCIL can legitimately claim a lien or charge.
Considering the complexities involved in distinguishing between gross revenues and direct profits accruing to Reliance, the court found that SCIL’s lien or charge, under the current circumstances of the film in question, is more appropriately enforceable over the net profits of Reliance, rather than the gross revenues.
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T-Series had reportedly provided a loan of Rs 268 crore to Reliance for the production of 11 Hindi films. Super Cassettes argued that Reliance failed to repay outstanding amounts amounting to Rs 60.23 crore, claimed to be due as of November 16, 2023.
Alleging this default, T-Series asserted its right to lien and charge over any future films produced by Reliance, whether independently or in collaboration with others.
As a result, it sought the intervention of the High Court to prevent Reliance from releasing any such films, including ‘Amar Singh Chamkila,’ until the sum is fully repaid.
In November, Reliance had assured the HC that it would refrain from releasing any cinematographic films or transferring any rights related to such films for a two-week period. However, SCIL approached the HC alleging that the Anil Ambani firm was planning to release five films, 'The Economic Times' reported.
Initially, Super Cassettes had sought to postpone the release of ‘Amar Singh Chamkila,’ but later it demanded Rs 42.16 crore that Reliance received from Los Gatos Production Services India LLP, an affiliate of Netflix Inc.
