Madras High Court directs Lyca Productions to pay ₹5 lakh to actor Vishal towards costs in a civil suit

The Madras High Court on Wednesday imposed costs of ₹5 lakh on film production company Lyca Productions Private Limited, and directed it to pay the money to actor-producer Vishal Krishna Reddy.

Justice G. Jayachandran passed the order while dismissing an application by Lyca Productions seeking a direction to Mr. Reddy to pay it ₹30.05 crore along with interest at the rate of 30% per annum till the date of realisation.

The judge criticised the firm for having taken out the application by picking stray sentences from a counter-affidavit filed by the actor, making a misleading claim that the actor had admitted his entire liability.

The court was told that Mr. Reddy had initially availed a loan of ₹15 crore from Anbuchezhian of Gopuram Films to make

Marudhu in 2016. He could not repay the amount and the liability along with interest increased to ₹21.29 crore.

On September 21, 2019, Lyca entered into an agreement with Mr. Reddy, agreeing to discharge his liability on condition that he repay the amount to Lyca with 30% interest, and that the company would have a lien over all his future projects until the debt was cleared.

It was also agreed that the actor shall pay first tranche of ₹7 crore to Lyca a week before the proposed release of his movie

Thupparivalan-2 on March 31, 2020 and settle the entire amount with interest by December 31, 2020. Claiming that he failed to honour the terms, Lyca filed a civil suit in February. Along with the suit, it filed multiple applications, including one which wanted him to disclose all his assets.

Justice Jayachandran was shocked to find that Lyca had not only created a lien on all his future professional activities, but had also stated that the actor should not oppose any legal action taken to recover the dues.

Wondering whether such a clause was permissible since it prima facie appeared to be against public policy, the judge wrote: “Reading of these terms... only reminds this court of Section 2(d) of the Bonded Labour System (Abolition) Act, 1976, which defines the term Bonded Debt.”

The judge took note of the actor’s submission that he could not complete Thupparivalan-2 and release it on time due to the lockdown restrictions. However, when he planned to release yet another movie titled Chakra in February, Lyca chose to prefer the present suit.

The actor also submitted that the loan could be discharged only if Lyca produces evidence to prove that it had settled all his liabilities to Anbuchezhian and provides statement of accounts so that it could be reconciled.

The judge recorded his submission and observed that the validity of the terms of the agreement would be decided when the suit gets taken up for final disposal. Till then, he was directed to deposit 50% from the sale proceeds of Chakra to the account of the civil suit.