The ruling on the execution petition filed by the Official Assignee to attach all of producer K.E. Gnanavelraja’s future films is passed by Justices G. Jayachandran and C.V. Karthikeyan.
On Monday, August 12, 2024, the Madras High Court issued an order prohibiting the film production company Studio Green, which is owned by K.E. Gnanavelraja, from releasing its next two films, Thangalaan, starring Vikram, and Kanguva, starring Suriya, until ₹1 crore has been deposited in each case.
Thangalaan is scheduled to be released in theaters nationwide on August 14, so a Division Bench of Justices G. Jayachandran and C.V. Karthikeyan ordered that the production company deposit ₹1 crore with the Official Assignee by Wednesday at the latest and report compliance before the court on the same day.
The justices further mandated that ₹1 crore be deposited before to Kanguva’s release. The High Court’s Official Assignee, who had been tasked with collecting the debts owed by bankrupt businessman Arjunlal Sunderdas (who has since gone away), filed an execution petition, and the orders were made in response.
In a 2016 High Court application, the Official Assignee claimed that the businessman, who was allegedly defrauding investors of several crores of rupees by enticing them to invest in his finance and real estate businesses, had chosen to co-produce a film with Studio Green in 2011 after contributing ₹40 crore.
He repaid the production firm ₹12.85 crore in several installments between September 2011 and October 2012, however he had to withdraw in the middle because of insufficient cash. But since pre-production had already been paid for, the production company stated that it was unable to reimburse him in full.
With just ₹2.5 crore returned to the bankrupt, ₹10.35 crore remained as the balance. In order to reimburse the depositors who made money with Mr. Sunderdas, the Official Assignee pleaded with the court to order the production house to deposit ₹10.35 crore as interest-bearing capital since December 2013.
Studio Green rejected the Official Assignee’s application, arguing that by giving Mr. Sunderdas the Hindi remake rights to three Tamil films, All in All Azhaguraja, Biriyani, and Madras, it had compensated for the amount owed to him. Studio Green then asked him to sell those rights through his connections in Bollywood.
In order to support its claim, the production house claimed the original agreement was destroyed during the 2015 floods, but it was only able to offer a photocopy of the alleged agreement.
V.K. Easwaran, Studio Green’s partner, acknowledged during cross-examination that the production house’s main office was located on the second floor of a building on Thanikachalam Street in T. Nagar, Chennai, and that it was unaffected by the floods.
On the other hand, he said that the records related to the deal with Mr. Sunderdas were destroyed and stored on the bottom level of another building located on Masilamani Street in T. Nagar. Additionally, he stated that in 2016, he reported the aforementioned destruction to the service tax authorities.
On August 29, 2019, the Division Bench granted the Official Assignee’s motion, ruling that the production house’s allegation lacked credibility.
First off, there is no evidence of the purported agreement in question between the bankrupt and Studio Green, the second respondent. Additionally, the agreement’s date was not specified. The Division Bench had declared, “The worth and the goodwill of the three films have also not been stated.”
“No evidence has been shown to support the claim that the remake rights for the three movies are comparable to ₹10.35 crore. There is also no oral proof of such magnitude, let alone documentary evidence. The papers created are photocopies. The claim that the originals were destroyed in floods did not stand up to scrutiny. The court imposed a deposit of ₹10.35 crore with 18% interest starting in 2013.
Because the 2019 order was not followed, the Official Assignee filed the current execution petition, requesting that Studio Green attach all future movies, including Thangalaan and Kanguva, until it complies with the five-year-old court ruling.