Bombay High Court Restrains Release Of Sonakshi Sinha-Starrer "Tu Hai Meri Kiran" Until ₹8.85 Crore Plus Interest Is Deposited

The High Court permitted the film’s release after the deposit, subject to compliance with the co-production agreement and its other directions.

The Court was hearing a petition under Section 9 of the Arbitration and Conciliation Act, 1996, filed by AND Movie Products LLP for interim protection of its investment and contractual rights pending arbitration.

A Bench of Justice Amit Borkar observed: “In my view, the proper way is not to stop the Film from being released in every situation. Such an order would not consider the money, time and effort spent by the Respondents in producing the Film and the possibility of earning revenue from its release. At the same time, it would not be proper to allow the Film to be released and commercially exploited without securing the Petitioner's investment, when the agreement provides for repayment and the prescribed period has expired. A balance can be maintained by directing the Respondents to deposit the entire investment amount, together with the contractual interest claimed, in Court as security.”

The Court added: “The money will not be paid to the Petitioner at this stage. It will remain secured until the claims are finally decided in arbitration or orders are passed. Once the security is deposited, the Film may be released, provided the other terms of the Co-Production Agreement and the directions given below are followed. If the Respondents do not provide the security, the restriction on release will continue.”

Senior Advocate Ashish Kamat appeared for the petitioner, while Advocate Anand Mohan appeared for the respondents.

Background

The petitioner and Echelon Productions entered into a co-production agreement effective from March 27, 2024, for jointly producing and exploiting the film. Each party was to contribute ₹7.5 crore plus GST. The petitioner stated that it paid ₹8.85 crore between March 2024 and January 2025.

Clause 5.3 required Echelon to return the entire investment within 13 months of the agreement or three weeks before the film’s first release, whichever was earlier. A cheque for ₹7.5 crore issued in January 2026 was dishonoured after payment was stopped.

After the respondents announced an October 23, 2026 theatrical release, the petitioner sought security for its investment and protection of its rights relating to joint exploitation, prior consent, credits and participation in third-party agreements.

The respondents argued that the petitioner was a co-producer rather than a lender and had actively promoted the announced release through an Instagram collaboration. They stated that no third-party exploitation agreement had been executed without the petitioner and offered to deposit the film’s future revenue into a designated account.

Court’s Observations

Repayment Obligation Had Prima Facie Become Due

The Court held that Clause 5.3 fixed an independent deadline for returning the investment. Thirteen months from the agreement expired on April 27, 2025, much earlier than the date falling three weeks before the proposed release.

The Court stated: “The words ‘whichever is earlier’ have an important meaning. They show that the date which comes first is the date which has to be followed. Here, 27 April 2025 came much earlier than 2 October 2026. Therefore, on the plain reading of Clause 5.3, the obligation to return the investment amount had become due on 27 April 2025. The later announcement about the release of the Film cannot extend the time which had expired.”

The Court found that the dishonoured cheque, when considered with the repayment clause, receipt of the investment and failure to return it, established a strong prima facie case for securing the amount. It clarified that the cheque alone did not finally determine liability or make the second respondent personally liable.

Film Promotion Did Not Waive Repayment And Exploitation Rights

The Court accepted that the petitioner’s participation in the Instagram collaboration demonstrated approval of the promotional post and knowledge of the announced release date. It held, however, that this did not establish an intention to surrender the separate right to repayment or permit third-party agreements without its consent.

Referring to Jagad Bandhu Chatterjee v. Nilima Rani (1969), Godhra Electricity Co. Ltd. v. State of Gujarat (1975), State Bank of India v. M.J. James (2022) and Brihan Karan Sugar Syndicate Private Limited v. Yashwantrao Mohite Krushna Sahakari Sakhar Karkhana (2024), the Court examined waiver, subsequent conduct and acquiescence.

The Court stated: “The Instagram posts and the later conduct of the parties may help in understanding the extent to which the Petitioner approved the publicity and the proposed release. But Clause 5.3 fixes the time for repayment. Clauses 5.1 and 5.2 state the role of the Petitioner in exploitation arrangements. The Instagram collaboration does not make these clauses unclear. It cannot be used to create a different arrangement under which the Petitioner must wait until revenue is earned or the Respondents can enter into exploitation agreements without involving the Petitioner.”

Future Revenue Did Not Adequately Secure The Investment

The Court acknowledged that indefinitely restraining release could reduce the film’s commercial value and cause serious loss after the respondents had invested money, time and effort in its production.

It nevertheless found that an assurance to deposit future revenue did not adequately protect the investment that had already become due. The Court noted that there was no clear material showing that the respondents could return the entire amount if the film earned insufficient revenue.

The Court stated: “The proposed release is approaching. After the Film is released and its rights are commercially used, agreements with distributors and other third parties may be completed. Revenue may be received and spent. If the Petitioner's rights are not protected before these things happen, it may become difficult for it to get effective relief later. The Respondents' proposal to deposit future revenue is a useful safeguard. However, it does not sufficiently protect the investment amount which has become due.”

Contractual Rights Continued After Deposit

The Court directed the respondents to disclose within five working days all agreements, offers, term sheets and arrangements relating to the film’s exploitation. It also required the petitioner to be made a confirming party to exploitation agreements and directed that its contractual consent be obtained.

The respondents were directed to place all revenue in a separate designated account and disclose its details within three working days. They were also required, within 48 hours, to correct or withdraw publicity material that did not carry the credits and logo stipulated under the agreement.

Conclusion

The Court substantially allowed the petition and directed Echelon Productions to deposit ₹8.85 crore within three working days, with 15% annual interest calculated from the respective payment dates. The amount would remain secured without prejudice to the parties’ claims and could not be released without a court or arbitral order.

Until the deposit, the respondents were restrained from releasing or commercially exploiting the film through any medium. The Court left all questions concerning final liability, accounts, interest and rights in the film open for arbitration. It imposed no costs and rejected the respondents’ request to stay the judgment.

Cause Title: AND Movie Products LLP v. Echelon Productions and Others (Neutral Citation: 2026:BHC-OS:22712)

Appearances

Petitioner: Senior Advocate Ashish Kamat with Advocates Rashmin Khandekar, Ashwin Bhadang, Arpit Choudhary, Krunal Mehta, Karen Koya, Akshata Modi and Varun Dhond, instructed by King Stubb & Kasiva

Respondents: Advocates Anand Mohan, Lavin Hirani and Clint G. Thattil, instructed by Advocate Vikramaditya Chavan

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