Pooja Entertainment Limited, run by Vashu Bhagnani, has initiated a legal action against Netflix India, alleging criminal breach of trust and cheating over contentious license agreement. The complaint stems from a multi-film deal that set the two sides against each other in content distribution.

The complaint filed with the Economic Offences Wing (EOW) of the Mumbai police has called for an investigation in the form of a Preliminary Enquiry (PE), in order to determine the validity of claims. In regard to that, EOW has issued two summons to Netflix India, seeking their cooperation in the due process.

What does the EOW say?

Speaking with The Statesman, Senior Inspector Ravindra Avhad, the investigating officer on the case, confirmed that two legal summons have been dispatched to Netflix. However, he noted that Netflix has not appeared for questioning.

When asked about the next steps, he said, “Wait and watch. Can’t say anything at this moment,” emphasizing that he was unaware of Netflix’s official stance regarding the allegations. While media reports suggest that Netflix has dismissed the claims as baseless, Avhad pointed out that no official response has been submitted to the authorities. “They have not sent their version to us, let alone representatives,” he stated, “Ab unke hisaab se investigation thodi hoga?”

Avhad also mentioned that Pooja Entertainment shared the ordeals of other industry peers who had similar experiences with the OTT platform, though none of these individuals have filed formal complaints.

What actually happened?

At the heart of the complaint is a licensing agreement between the two parties, wherein Netflix was to acquire subscription-video-on-demand (SVOD) rights for three films produced by Pooja Entertainment: ‘Mission Raniganj: The Great Bharat Rescue’, ‘Bade Miyan Chote Miyan’, and ‘Hero No. 1’.

The deal reportedly involved a payment of ₹281 crore (approximately $34 million USD) to Pooja Entertainment. However, the production and marketing costs for these films reportedly exceeded ₹645 crore (around $80 million USD), raising the stakes for both companies.

Pooja Entertainment’s complaint, filed by Bhagnani and his lawyer Nagesh Vaidikar, alleges that Netflix defaulted on its financial commitments after the films were completed. In the official complaint, Pooja Entertainment claims that Netflix threatened to withdraw its licensing agreement for ‘Bade Miyan Chote Miyan’ while simultaneously halting payments for the other films.

The allegations go on to claim that Netflix representatives misled Pooja Entertainment. This resulted in financial investments based on promises of future payments. Bhagnani specifically points fingers at several key Netflix executives, including Reginald Shawn Thompson, Kiran Desai, Monica Shergil, and Vibha Chopra, who heads Film Licensing at Netflix.

How did it start?

Tensions escalated during the theatrical release of ‘Ganapath’ and ‘Mission Raniganj’ in October 2023. Pooja Entertainment alleges that, following the films’ lackluster box office performance, Netflix attempted to renegotiate the licensing fees, a move that Pooja Entertainment argues is not permissible under their existing agreements. When Pooja Entertainment rejected these renegotiation attempts, they claim Netflix threatened to cancel the licensing deal altogether.

Bhagnani alleges in his complaint that Netflix has been exploiting the films on its platform without committing to its financial obligations, claiming an outstanding balance of ₹47 crore under the agreement. This situation has been exacerbated by what Bhagnani describes as Netflix’s lack of cooperation with the EOW, with key management personnel reportedly evading summons for questioning.

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