Case Title: Avanika Films LLP Vs. Abhay Verma
Order Date: 15th September, 2025
Case Number: Interim Application (L) No. 24289 of 2025 in Commercial Suit (L) No. 24272 of 2025
Neutral Citation: 2025:BHC-OS:15254
Name of Court: High Court of Judicature at Bombay (Ordinary Original Civil Jurisdiction)
Name of Hon'ble Judge: Justice Prafulla S. Khubalkar
Fact
Avanika Films LLP, the producer of a film named “Prem Keetanu,” entered into an Artist Agreement with Abhay Verma, appointing him as the lead actor. The agreement, signed on 15th June, 2025, included specific positive and negative covenants about the actor’s commitment to an exclusive shooting schedule between 5th September 2025 and 20th November 2025. After signing, Abhay Verma indicated his inability to comply with the designated shooting schedule due to prior professional commitments. Consequently, on 12th July 2025, he sent a termination letter, stepping away from the arrangement. Avanika Films LLP filed a lawsuit seeking a permanent injunction to enforce the negative covenant, a declaration that the termination was illegal, and a claim for damages of ₹12 crores plus interest. The main interim application in focus sought a temporary injunction to prevent Abhay Verma from engaging in any other acting assignments during the agreed shooting period, enforcing the negative covenant from the artist agreement.
Procedural Detail
Upon receiving the termination notice from Abhay Verma, Avanika Films LLP filed a commercial suit and simultaneously sought an interim injunction to enforce the negative covenant in Clause 2.2.2 of the Artist Agreement. The court considered arguments from both sides—while the plaintiff maintained the sanctity of contract and irreparable harm, the defendant argued that the agreement was for personal service and could not be specifically enforced, that he had validly terminated due to schedule conflicts, and that monetary damages would be adequate if any harm was established. After replying affidavits and rejoinders from both parties, and post hearing comprehensive submissions, the application for interim injunction was considered at length at the interim stage, with the main focus on whether such negative covenants could be enforced after the artist had terminated the agreement.
Dispute
The principal issue before the Court was whether the negative covenant in the Artist Agreement—barring the actor from other assignments during the shooting schedule—could or should be enforced by a temporary injunction, after the defendant had unilaterally terminated the contract. Avanika Films asserted it was harmed by the abrupt withdrawal and invoked the negative covenant in Clause 2.2.2 as a binding restriction on the defendant. The plaintiff argued that such covenants are recognized by law and that the defendant should be restrained during the previously-agreed shooting window. On the other hand, Abhay Verma argued that the relief sought amounted to specific enforcement of a contract of personal service, which is not permissible under law, and that any true loss to the producer could be compensated monetarily rather than through a restrictive injunction.
Detailed Reasoning Including Judgements
Justice Prafulla S. Khubalkar carefully considered the relevant contract clauses, the nature of the artist agreement, and the legal standards for temporary injunctions under Indian law, especially considering the Specific Relief Act and the Contract Act. The Court noted that the Artist Agreement clearly required exclusive services from Abhay Verma during specified dates, but the contract was one of personal service.
Clause 2.2.2 set forth the exclusive commitment to the shooting schedule and barred engagement in competing assignments. The agreement also stipulated, per Clause 2.8 and 11.4, that willful non-performance would attract liquidated damages, highlighting a remedy in monetary terms even for breach. For context, the Court noted that Avanika Films LLP was seeking neither a stay on the termination nor specific performance of the overall contract, but only an injunction to enforce the negative covenant post-termination.
The Court turned to established precedents on the enforceability of negative covenants. The plaintiff relied on Niranjan Shankar Golikari v. The Century Spinning and Mfg. Co. Ltd. (AIR 1967 SC 1098), Warner Brothers Pictures v. Nelson ( 1 KB 209), Gujarat Bottling Co. Ltd. v. Coca Cola Co. (AIR 1995 SC 2372), and Balaji Telefilms Ltd. v. Salil Ankola, to argue that agreements involving exclusivity or negative stipulations are valid and enforceable during the currency of the contract, and do not generally fall foul of Section 27 of the Contract Act relating to restraint of trade. The Court accepted that these cases did recognize negative covenants as enforceable for the duration of a contract of employment or service, so long as such enforcement did not essentially amount to compelling someone into personal service.
However, the facts at hand diverged materially: Abhay Verma had terminated the agreement before the shooting window even began, and the plaintiff had not contemporaneously sought any judicial stay of this termination. Thus, the main negative covenant was now sought to be enforced not in aid of an ongoing joint venture, but to prevent a former contracting party—after cancellation of the contract—from pursuing any other work during the shooting window. The legal focus, therefore, squarely shifted to whether an injunction of this nature could or should be continued after a personal service contract had ended, and whether this would amount to restraint of trade under Section 27 of the Contract Act or illegal enforcement of a personal service contract contrary to Section 41(e) of the Specific Relief Act, 1963.
The Court meticulously evaluated counter-authorities cited by the defense, such as Percept D’Mark (India) (P) Ltd. v. Zaheer Khan (2006) 4 SCC 227, Jet Airways (I) Ltd. v. Jan Peter Ravi Karnik (2000 SCC OnLine 241), and SVF Entertainment Pvt. Ltd. v. Mr. Anupriyo Sengupta (2018 SCC OnLine Cal 4775). The Supreme Court in Percept D’Mark made clear that specific performance or negative enforcement of personal service contracts cannot be granted by courts, especially once trust or personal relationship has ended. Similarly, in Jet Airways, the Bombay High Court highlighted that injunctions for enforcing negative covenants must serve a proprietary (protectable) interest—not simply to make an individual “sit idle,” especially absent a pressing ongoing right or property at risk.
The Court found that, while the negative covenant could be validly enforced if the contract was subsisting and the plaintiff could demonstrate a real risk to a legally-protected proprietary interest, the specific facts here did not support such relief. The agreement stood terminated and the defendant’s absence did not deprive the plaintiff of any “property right” for which an injunction was the only effective safeguard. The real injury to the producer was financial, for which the contract itself prescribed a liquidated damages clause. The Court noted that Avanika Films LLP had also claimed substantial monetary compensation in its suit and had not shown why such damages would not suffice.
Justice Khubalkar noted that forcing the defendant to not work (sit idle) by the operation of a negative covenant, after the contract was ended, would be a hardship and a restraint of trade under Section 27, especially in the absence of any active, ongoing contractual requirement. Citing the language and reasoning in Percept D’Mark and Jet Airways, the judge held that such relief was, therefore, improper for a court to award under interim or injunctive discretion.
Decision
Given the findings, the Bombay High Court rejected the plaintiff’s request for a temporary injunction to enforce the negative covenant. The Court concluded that the plaintiff’s claim centered around a contract for personal service that had been terminated, and that enforcement of the negative covenant in these circumstances would be contrary to public policy, operate as a restraint of trade, and was not the kind of relief contemplated under Section 42 of the Specific Relief Act. The suit for damages and related reliefs could proceed, but the balance of convenience and risk of irreparable harm were not proved so as to justify an interim injunction. Accordingly, the application for ad-interim and interim reliefs was dismissed.
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Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
Suggested Titles for Publication
Enforceability of Negative Covenants in Artist Agreements: Lessons from Avanika Films LLP v. Abhay Verma
Restraint of Trade and Contracts for Personal Service: Bombay High Court’s Approach
Can Film Producers Stop Stars from Working Elsewhere? An Analysis of Avanika Films LLP v. Abhay Verma
Contract Termination, Injunctions, and the Limits on Negative Covenants in Indian Law
Understanding Interim Injunctions in Entertainment Contracts: A Comprehensive Legal Analysis
