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Movie production is a very volatile business. Filmmaking is a high-stakes game where there are more chances of loss than profit. The winning average of movies is also very low. 1000 movies are released in a cinema every year but only a handful win. If the movie wins, it is a win for the actor and director, but if it loses, the loss is only for the producer. Producers, financiers, distributors, cinema owners and so on have financial dealings with many. If the movie loses, everyone will lose. Cases are also common. But now the verdict given by the Supreme Court in a similar case has provided a small relief to the producers.

A case of criminal fraud was registered against a film producer for not returning the money invested for the production of a film. The Supreme Court, which heard the case, quashed the criminal proceedings against the producer. The Supreme Court has made an important observation about the business nature of film production. The court said that if a film fails at the box office or suffers a loss, it cannot be considered cheating. A bench of Justices Vikram Nath and Prasanna B Varale, who conducted the hearing, said, ‘Film production is inherently a high-risk business. There is no guarantee that the money invested here will get profit.

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If a movie loses and money is lost, it cannot be called ‘criminal fraud’. The Supreme Court has made it clear that investors put money in the expectation of profit, but when there is a loss in the business, it is only a civil dispute and not a criminal offence. As there was no evidence to prove that the producer had an intention to defraud the investors from the beginning, the court held that it was not proper to file a criminal case on the basis of financial loss alone.

This judgment has brought great relief to the producers of Bollywood and other film industries. This is likely to prevent unnecessary criminal cases being filed against producers when there is loss in film distribution or investment. As financial transactions are high in the cinema industry, this judgment has again highlighted the distinction between civil contracts and criminal liabilities.

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