HC quashes criminal case against Warner Bros

Hyderabad: The Telangana High Court has quashed criminal proceedings against major production house Warner Bros. Pictures, ruling that a “purely commercial and contractual dispute” cannot be “converted into a criminal prosecution”.The Indian arm of the American multinational entertainment conglomerate approached court after a local film distributor accused them of duping it by first assuring continued theatrical distribution rights for its films — Man of Steel, Pacific Rim and Into the Storm — but later releasing the same movies through another distributor.The case was registered at the Jubilee Hills police station in 2016. Warner Bros was booked under Sections 420 (cheating and dishonestly inducing delivery of property) and 406 (criminal breach of trust) of the IPC. The distributor even alleged that the production house refused to pay Rs 25 lakh collected towards distribution rights.Delivering the verdict recently, the bench of Justice N Tukaramji observed that while “the availability of civil remedies did not bar criminal proceedings against the petitioner (Warner Bros), the criminal process could not be permitted to become an instrument of coercion in commercial disputes”.The observation stemmed from Warner Bros’ petition, which claimed that the local distributor, despite securing distribution rights for several major Hollywood releases, consistently defaulted on agreed payment schedules and even “subsequently resorted to filing multiple unsuccessful civil suits and a prior FIR on the same facts”. It further contended that the distributor suppressed these previous legal failures and filed a fresh police complaint as a “pressure tactic to coerce a settlement” over a civil and commercial matter.Though the distributor argued that the criminal investigation should be allowed to proceed for “breach of trust and cheating”, the court dismissed the contention.But while it dropped the criminal case, the court clarified that “the order did not prevent the parties from pursuing appropriate civil remedies in accordance with the law”.Further, reiterating that the “dispute is overwhelmingly civil in character”, Justice Tukaramji stated that “initiating criminal proceedings on identical facts, coupled with unexplained delay, weakened the claim of fraud and indicates misuse of criminal process”.The High Court ruled that “allowing the case to continue would be an abuse of the process of law, as the dispute was entirely civil in character and did not disclose any prima facie criminal offences,” and disposed of the matter.