Producer of Rajinikanth’s Kochadaiiyaan should pay fine of ₹2.52 crore or go to jail, orders Madras High Court

The Madras High Court has directed the producer of Rajinikanth-starrer Kochadaiiyaan to pay ₹2.52 crore, within four weeks, as compensation to an advertising agency that had financed the photorealistic motion capture movie in 2014, or end up serving a six-month simple imprisonment sentence in a cheque bounce case.

Justice Sunder Mohan passed the orders while partly allowing a criminal revision case filed by J. Murali Manohar and his production house, MediaOne Global Entertainment Limited, against the conviction and sentence imposed on them by a metropolitan magistrate in 2021 and confirmed by a city civil court in 2023.

According to the complainant, Abirchand Nahar, of AdBureau Advertising Private Limited, his firm had entered into a Memorandum of Understanding (MoU) with MediaOne Global Entertainment on April 25, 2014 for extending a loan of ₹20 crore for the post-production work on Kochadaiiyaan.

The production house had reportedly told the financier that the sale of the lease rights of the movie for a particular area would fetch nothing less than ₹20 crore, and promised to pay 20% of the sale proceeds or a minimum guaranteed profit of ₹2.40 crore to the financier before selling the rights to any third party.

Accordingly, the ad agency transferred ₹10 crore to the bank account of MediaOne on April 28, 2014. However, in December 2014, a cheque issued by the production house got returned with the endorsement, ‘stop payment by the drawer’, and hence the complaint was filed under Section 138 of the Negotiable Instruments Act of 1881.

On December 4, 2021, a metropolitan magistrate in Egmore convicted the producer and sentenced him to six months of imprisonment. Further, the magistrate had directed him to pay a compensation of ₹7.70 crore to the advertising agency or undergo six more months of imprisonment.

The conviction as well as the sentence was confirmed by an Additional City Civil Court on August 4, 2023 and therefore, the producer had approached the High Court by way of the present revision, claiming to have repaid ₹12.75 crore. He also accused the ad agency of having used a cheque given as guarantee at a much later date.

However, after finding several inconsistencies in the version of the complainant and that of the producer, the judge came to the conclusion that there were enough material to rule that the ad agency had lent only ₹10 crore, and that it had been repaid ₹8.74 crore, leaving a balance of ₹1.26 crore.

Observing that the object of Section 138 of the NI Act was essentially to recover the money covered under a cheque, the judge confirmed the conviction imposed on the film producer, but modified the sentence to a fine of ₹2.52 crore (twice the existing liability), which the producer was ordered to pay the ad agency as compensation.

“In default, the second petitioner/second accused (Mr. Manohar) shall undergo simple imprisonment for six months,” the judge said.