@Naradhan
I thought O Faby was the first use of live action animation in india. well, it might still be the first movie of the sort. but, it seems the 1989 Rajnikanth movie Raja Chinna Roja directed by Muthuraman had a live action animation song in it. Ram Mohan Studios, the same people who did O Faby did this song too. 85,000 drawings for a song sequence! the movie was a huge hit owing just to the song while O Faby turned out to be a flop in kerala.