In indirect or reported speech, the tense of the original statement is typically shifted back one step in time. In the given sentence, the original statement is in the simple past tense, "I saw this film yesterday."

To convert this into indirect speech, you shift the tense back one step, resulting in "he had seen that film the day before." The past perfect tense "had seen" is used in the reporting clause to convey that the action (seeing the film) occurred before the time mentioned (the day before).