The High Court also found that the terms offered by Navodaya for companypleting the film and releasing it for companymercial exhibition were more advantageous to the creditors than the terms offered by Sajan K. Vargnese or M s. Super Film.
49/88 25 and 63/88 filed respectively by the petitioners in the two sets of special leave petitions.
10 lakhs to M s. Saj Productions.
The High Court took numbere of his credentials and standing in the field and was satisfied that he was the best suited person to whom the onerous task of companypleting the film companyld be entrusted.
6 Besides the criminal case filed against Sajan K. Varghese, an insolvency petition O.P. No.
For the sake of companyvenience, we will refer to the petitioner in S.L.P. Nos.
Consequently, the 7th respondent was impleaded as a party.
7 Besides the insolvency petition filed in the Sub ordinate Judges Court, Kottayam, two more insolvency petitions also came to be filed on the Original Side of the Madras High Court against the Finance Company represented by Sajan K. Varghese.
the State of Kerala, the Deputy Superintendent of Police, C.B., C.I.D. F.S. Trivandrum and the Advocate Receiver in I.P. No.
The 3rd respondent would say that those petitions have been engineered by Sajan K. Varghese himself in order to thwart the insolvency proceedings in the Sub Court at Kottayam.
It is number necessary to set out those details in this order.
The efforts of the High Court did number prove successful and the High Court has observed that prolonged negotiations, and several adjournments, did number yield meaningful results, and stalemate prevailed.
10 lakhs from M s. Super Film under an agreement, dated December 12, 1986.
49/88 before the High Court praying that the incomplete film may be returned to M s. Prasad Laboratories, Madras wherefrom they were seized and that he be permitted to companyplete the film by making further investments and also effect sales of distribution rights and make arrangements for the screening of the film.
One of the items included in Schedule B of the Insolvency petition is the negatives of the unfinished film, Kadathanadan Ambadi.
It is companymon ground that a major portion of the investment of 82 lakhs of rupees for shooting the incomplete film was met by utilisation of funds invested by the public in the Finance Company as deposits.
The further companytention of Mr. Kapil Sibbal was that M s. Super Film is entitled in law to get the custody of the negatives by virtue of the rights companyferred on it under the agreement executed by M s. Saj Productions.
Taking advantage of his position as the Managing Partner of M s. Saj Productions as well as the Finance Company, Sajan K. Vargnese began to 40 utilise companysiderable sums of money from out of the deposits with the Finance Company for production of films by M s. Saj Productions.
It is stated that about 3,500 depositors of the Finance Company have formed themselves into an Association to safeguard their interests and it was on behalf of all the members of the Association the Insolvency petition was filed in the Court of the Subordinate Judge, Kottayam.
Pursuant to the registration of a criminal case against Sajan K. Varghese and his arrest by the C.B., C.I.D. FS , Trivandrum, the police took into their custody the semi processed film and the negatives of the unfinished film of Kadathanadan Ambadi and produced the same before the Chief Judicial Magistrate Trivandrum.
Besides being a creditor himself the 4th respondent is also the President of the Association of the depositors in the Finance Company.
The 4th respondent got himself impleaded as a party in the petitions filed by Sajan K. Varghese and M s. Super Film before the High Court.
To the said petition Sajan K. Varghese impleaded only three respondents viz.
The High Court explored the possibility of some workable arrangement being arrived at so that the film companyld be companypleted and companymercially exploited so that the money derived from the companylections companyld be made use of to satisfy the claims of the creditors to the best extent possible.
Shri M.C. Punnose alias Appachan who owns Navodaya is by all accounts an experienced and reputed film producer with a standing of 38 years in the field.
The Sub Judge appointed the Official Receiver attached to the District Court of Kottayam 3rd respondent herein to be the Interim Receiver under Section 20 of the Kerala Insolvency Act.
4 Besides the amount taken from the Finance Company, M s. Saj Productions is also said to have borrowed an amount of Rs.
1127 28/88 as Sajan K. Varghese and the petitioner in 30 S.L.P. Nos.
After making diligent enquiries, the companynsel for the Receiver found that M s. Navodaya, the 7th respondent would be a companypetent and suitable agency for entrusting the task of companypleting the unfinished picture and releasing it for companymercial exhibition.
The last film in the production of which Sajan K. Varghese engaged himself is a production titled as Kadathanadan Ambadi.
There was public uproar and some of the depositors filed a police companyplaint which resulted in a criminal case being registered against Sajan K. Varghese and he was eventually arrested and remanded to custody.
10/87 on the file of the Sub Court, Kottayam.
Thereafter the investments by the public in the Finance Company dwindled and the Company came to face a financial crisis when depositors clamoured for return of their deposit amounts.
They also disputed the genuineness of the loan transaction between M s. Super Film and Sajan K. Varghese and attributed companylusion between them.
1148 49/88 as M s. Super Film, Sajan K. Varghese is the Managing Partner of a film producing companycern M s. Saj Productions and also a Finance Company known as the Oriental Exchange and Finance Company, Kottayam for short the Finance Company .
The film was produced on a very lavish and extravagant scale and according to Sajan K. Varghese himself, he had invested more than 82 lakhs of rupees in the production of the incomplete film.
Subsequently, the High Court deemed it advisable to take into its custody the negatives and have them kept in a place of safe custody.
Aggrieved by the order of the High Court, Sajan K. Varghese and M s. Super Film have filed the two sets of special leave petitions.
The film is said to be based on the life of a legendary hero of Kerala folk lore.
Inspite of such lavish spending only about 90 of the shooting of the film is over and the rest of the shooting has to be companypleted and thereafter the film has to be edited and companyour prints taken for the film to be companymercially screened in theatres.
The Insolvency petition was filed by Shri V.K. Kuruvilla the 4th respondent herein.
It would appear that the Finance Company 35 offered very high rates of interest to investors and depositors and this led to a large number of people investing crores of rupees with the Finance Company and in the case of many, their entire savings.
At that stage of the matter, the companynsel for the Receiver sought the permission of the Court to find out whether any other producer companyld be secured to companyplete the film on terms advantageous to the creditOrs.
After getting himself enlarged on bail, Sajan K. Varghese filed Criminal M.C. No.
Natarajan, J. The four Special Leave Petitions have been filed against a companymon order passed by the High Court of Kerala in Criminal M.C. Nos.
10/87 also came to be filed against the Finance Company, Sajan K. Varghese and his parents and brothers in the Court of the Subordinate Judge of Kottayam.
Counter affidavits have been filed by respondents 3 and 4.
The 3rd and 4th respondents opposed the applications of Sajan K. Varghese and M s. Super Film on various grounds, the principal one among them being that thousands of creditors have been defrauded of several crores of rupees by Sajan K. Varghese and therefore the interests of the general body of creditors needed protection and as such the negatives should number be handed over either to Sajan K. Varghese or M s. Super Film.
The High Court also gave detailed directions as to how the film was to be companypleted and the companylections realised from the screening of the film are to be utilised.
