The Bombay High Court has ruled that an inability to prove the precise quantum of loss does not bar the award of compensation, provided the fact of loss is established. In a judgment delivered on August 29, Justice Arif S Doctor directed the defendant to pay around ₹1.9 crores as damages to the plaintiff in a long-pending copyright dispute [Ultra Distributors Pvt Ltd v. Dhariwal Films Pvt Ltd]. The case centers on the 2005 assignment agreement for exclusive video and cable TV rights of the movie Nehle Pe Dehla.
The Copyright Dispute
Ultra Distributors entered into the agreement with Dhariwal Films to acquire the rights for eight years. The total consideration was ₹42.51 lakh, with the plaintiff paying an upfront amount of ₹10.01 lakh. However, the defendant failed to deliver the master tapes of exploitable quality. Instead, it permitted a rival distributor to exploit the same video rights, effectively breaching the exclusivity clause.
The court found the defendant’s behavior to be “blatant commercial dishonesty and cheating.” Justice Doctor noted that Dhariwal Films took “mutually contradictory stands” regarding the creation of competing rights in favor of both the plaintiff and a second defendant during different legal proceedings. This contradiction, according to the judge, “speaks volumes in respect of the lack of credibility” of the defendant.
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Suit was filed in 2007.
The record plainly discloses that Defendant No. 1 has, at different points in time, taken different and plainly contradictory stands with regard to the creation of competing rights in favour of the Plaintiff and Defendant No. 2 in respect of the same Film. This, in my view, speaks volumes in respect of the lack of credibility and commercial dishonesty on the part of Defendant No. 1.
Such conduct really amounts to misrepresentation and cheating and exposes the commercial dishonesty of Defendant No. 1 and therefore must be met with punitive damages.
Assessing the Damages
This ruling offers a practical pathway for businesses facing similar contractual breaches where financial accounting might be imperfect. By allowing a “rough and ready” assessment, the court prioritizes the restoration of expected economic benefits over the perfection of forensic accounting. It creates a balance where strict adherence to accounting standards does not become a shield for those who have already broken the law.
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Justice Doctor adopted a “rough and ready” reasonable assessment to calculate the compensation. The court relied on unfiled consent terms where Dhariwal Films had valued the rights at ₹82.51 lakh. From this figure, the judge deducted the balance consideration Ultra had yet to pay, arriving at ₹50.01 lakh as “expectation damages.” This figure aims to place Ultra in the economic position it would have enjoyed had the contract been performed.
The Court also took note of the proved publicity expenses and unchallenged witness testimony and upheld the full compensatory claim of ₹1.66 crore.
Thus, the Court decreed the suit and directed Dhariwal Films to pay ₹1.66 crore as compensatory damages, ₹25 lakh as punitive damages, and ₹15 lakh as legal costs within eight weeks.
