According to the Bombay High Court, copyright assignees such as PPL and Novex are considered ‘owners’ and have the authority to issue music licenses without being registered as Copyright Societies under Section 33(1) of the Copyright Act.
here below is the judgement
Varsha COMP-264-2022 AND COMP-363-2019 final.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL IP SUIT NO. 264 OF 2022
Novex Communications Pvt Ltd. …Plaintiffs
Versus
Trade Wings Hotesl Limited …Defendant
WITH
COMMERCIAL IP SUIT NO. 304 OF 2018
WITH
COMMERCIAL IP SUIT (ST) NO. 3544 OF 2023
WITH
COMMERCIAL IP SUIT NO. 278 OF 2018
WITH
COMMERCIAL IP SUIT NO. 281 OF 2018
WITH
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
INTERIM APPLICATION(ST) NO. 5417 OF 2021
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 267 OF 2022
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
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2024:BHC-OS:1428
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WITH
INTERIM APPLICATION(ST) NO. 5992 OF 2023
IN
COMMERCIAL IP SUIT (ST) NO. 5500 OF 2023
WITH
INTERIM APPLICATION(ST) NO. 21044 OF 2021
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUITS(ST) NO. 39541 OF 2022
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
Mr. Darius Khambata, Sr. Adv, a/w Mr. Rashmin Khandekar, Apurva
Manwani a/w Mr. Ali Antulay a/w Mr. H. N. Thakore, Mr.Kunal Parekh
Ms. Nirali Atha i/b Dua Associates for Plaintiff in COMIP/264/2022
and Applicant in IA(L)/5368/2021.
Abhiraj Parab a/w Pooja Mishra, Anjali M. for Defendant No. 8 in
COMIP/345/2019
Adv. Mr. Hiren Kamod Adv.Mr. Prem Khullar, Adv. Rahul Punjabi, Adv.
Anees Patel for Defendant in IA(L)/5992/2023 in
COMIP(L)/5500/2023
Mr. Sameer Pandit a/w Ms. Sarrah Khambati Mr Mihir Govande i/b
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Wadia Ghandy & Co. For Plaintiff in NMCD/577/2018 &
NMCD/721/2018 IN COMIP/304/2018
Mr. Sameer Pandit a/w Ms. Sarrah Khambati Mr Mihir Govande i/b
Wadia Ghandy & Co. For Defendant in NMCD/725/2019 &
NMCD/1388/2018 IN COMIP/363/2019 AND NMCD/525/2018 &
NMCD/664/2018 IN COMIP/281/2018
Dr. Virendra Tulzapurkar Sr. Adv. Mr. Ramesh Soni a/w Mr. Sameer
Pandit, Ms. Sarrah Khambati, Mr. Mihir Govande i/b Wadia Ghandy &
Co. For Defendant No. 1 in IA/2102/2023 IN COMIP/157/2023 &
NMCD/523/2018 & IA/1533/2020 IN COMIP/278/2018
Mr. Durgaprasad Poojari i/b PDS Legal, for Plaintiff in
COMIP/278/2018
Mr. Rashmin Khandekar a/w Mr. H. N. Thakore a/w Mr. Kunal Parekh
Ms. Nirali Atha i/b Dua Associates for Plaintiff in IA(L)/5417/2021,
COMIP/332/2021.
Mr. Rashmin Khandekar a/w Mr. H. N. Thakore, Mr. Kunal Parekh Ms.
Nirali Atha i/b Dua Associates for Plaintiff in IAL/5880/2021 IN
COMIP/267/2022
Mr. Rashmin Khandekar, a/w Mr. H. N. Thakore, Mr. Kunal Parekh Ms.
Nirali Atha i/b Dua Associates for Plaintiff in IAL/5992/2023 IN
COMIP(L)/5500/2023
Mr. Rashmin Khandekar, Ms. Apurva Manvani a/w Mr. H. N. Thakore,
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Mr. Kunal Parekh Ms. Nirali Atha i/b Anil T Agarwal for Plaintiff in
COMIP(L)/3544/2023
COMMERCIAL IP SUIT NO. 363 OF 2019
Phonographic Performance Ltd …Plaintiff
Versus
Bunglow - 9 And 99 Ors …Defendants
WITH
COMMERCIAL IP SUIT (ST) NO. 3997 OF 2023
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
INTERIM APPLICATION(ST) NO. 4038 OF 2023
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT SUITS NO. 114 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 221 OF 2021
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
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WITH
COMMERCIAL IP SUIT NO. 938 OF 2018
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 914 OF 2018
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 966 OF 2018
IN
COMMERCIAL IP SUITS NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 1051 OF 2018
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 922 OF 2018
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 126 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 123 OF 2019
IN
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COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 119 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 116 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 120 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 122 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 117 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 115 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 127 OF 2019
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IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 121 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 118 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 358 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 345 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 359 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 291 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
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COMMERCIAL IP SUIT NO. 290 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 347 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 350 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 343 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 303 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 304 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 292 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
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WITH
COMMERCIAL IP SUIT NO. 145 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 306 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 319 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 321 OF 2019
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT (ST) NO. 35265 OF 2022
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 40 OF 2023
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 157 OF 2023
IN
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COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 156 OF 2023
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 147 OF 2023
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT (ST) NO. 37130 OF 2022
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT (ST) NO. 37136 OF 2022
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 148 OF 2023
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT (ST) NO. 37964 OF 2022
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 155 OF 2023
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IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 235 OF 2023
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
WITH
COMMERCIAL IP SUIT NO. 154 OF 2023
IN
COMMERCIAL IP SUIT NO. 332 OF 2021
Mr. Ravi Kadam Sr. Advocate, Mr. Amogh Singh, Asmant Nimbalkar,
Neeraj Nawar, Shivani Rane, Apurva Manwani i/b Mr. D P Singh For
Plaintiff in COMIP/363/2019 for Plaintiff.
Counsel Hiren Kamod, Prem a/w Ms. Madhu Gadodia, Deepak
Deshmukh, Suyog Mukherjee, T Kulkarni i/b Naik & Co. for Defendant
in COMIP (L) No. 37964/2022
Mr. Amit Jamsandekar a/w Mahua Roy Chowdhury, Akshay Kapadia,
Jahnavi Singh, Angel Mary Aju i/b Royzz & Co. For Defendant No.1 in
COMIP/221/2021, IA(L)/2633/2021
Huzefa Nasikwala a/w Idris M B i/b Nasikwala Law Office for
Defendant No.3 in COMIP/117/2019 with NMCD/331/2018.
Huzefa Nasikwala a/w Idris M B i/b Nasikwala Law Office for
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Defendant No.2 in COMIP/966/2018 with NMCD/1741/2018.
Huzefa Nasikwala a/w Idris M B i/b Nasikwala Law Office for
Defendant No.3 in COMIP/1051/2018 with NMCD/1793/2018.
Mr. Sameer Pandit a/w Ms. Sarrah Khambati Mr Mihir Govande i/b
Wadia Ghandy & Co. For Plaintiff in NMCD/577/2018 &
NMCD/721/2018 IN COMIP/304/2018.
Mr. Sameer Pandit a/w Ms. Sarrah Khambati Mr Mihir Govande i/b
Wadia Ghandy & Co. For Defendant in NMCD/725/2019 &
NMCD/1388/2018 IN COMIP/363/2019 AND NMCD/525/2018 &
NMCD/664/2018 IN COMIP/281/2018.
Dr. Virendra Tulzapurkar Sr. Adv. Mr. Ramesh Soni a/w Mr. Sameer
Pandit, Ms. Sarrah Khambati, Mr. Mihir Govande i/b Wadia Ghandy &
Co. For Defendant No. 1 in IA/2102/2023 IN COMIP/157/2023 &
NMCD/523/2018 & IA/1533/2020 IN COMIP/278/2018.
Mr. Prasad Shenoy a/w Abhishek Salian i/b Vidhi Partners.
Mr. Prasad Shenoy a/w Karishma Rao i/b vidhi Partners COMM.
S/148/2023.
Mr. Amogh Singh, Apurva Manwani, Asmant Nimbalkar, Neeraj Nawar,
Shivani Rane, i/b Mr. D P Singh for Applicant/Paintiff in
COMIP/221/2021.
Mr. Ashish Kamat Senior Advocate, Mr. Amogh Singh, Asmant
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Nimbalkar, Neeraj Nawar, Shivani Rane, Apurva Manwani i/b. Mr. D P
Singh for Applicant/Plaintiff in COMIP/1051/2018
Mr. Amogh Singh, Asmant Nimbalkar, Neeraj Nawar, Shivani Rane i/b
Mr. D P Singh for Applicant/Plaintiff in all Matters.
Adv. Jainil Vashi i/b M P Vashi & Associates for Respondent in
MNCD/332/2019 IN COMIP/116/2019
Adv. Ayush Chaddha for Plaintiff.
CORAM : R.I. CHAGLA, J.
RESERVED ON : 10TH NOVEMBER 2023.
PRONOUNCED ON: 24TH JANUARY 2024.
JUDGMENT : (PER R.I. CHAGLA, J)
- In the above suits Novex Communications Pvt. Ltd and
Phonographic Performance Ltd. (for short “Novex and PPL”)
respectively are the Plaintiffs. Identical relief has been sought in the
above suits namely a perpetual injunction restraining the Defendant
from publicly performing or in any manner communicating the sound
recordings of the songs assigned and authorized to PPL and Novex
respectively without obtaining licences from PPL and Novex.
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - A preliminary issue has been raised by the Defendants in
the above suits namely that Novex and PPL cannot carry on the
business of issuing licenses without being registered as a Copyright
Society under Section 33(1) of the Copyright Act, 1957 (“the Act”) and
thus, the Suit as filed will not entitle PPL and Novex to any kind of
relief. - Thus the issue which falls for determination prior to going
into merits of each of the above suits, is whether PPL and Novex in the
above suits are entitled to seek reliefs as sought for in the plaint
without being registered as a Copyright Society under Section 33 (1)
of the Act. - Mr. Darius Khambata, learned Senior Counsel has made
submissions on behalf of Novex which are supported by the Counsel
whose appearances have been mentioned above. Whereas Mr. Ravi
Kadam, learned Senior Counsel for PPL has made submissions on
behalf of the PPL supported by the Counsel whose appearances are
referred above. - Mr. Darius Khambata, has made submissions with regard to
the scheme of the Copyright Act, which is divided into various chapters
and each chapter deals with a different topic. He has referred to the
meaning of the term “Copyright” and the rights associated with it
covered in Chapter III of the Act, under Section 14. This defines a
copyright to mean the exclusive right to reproduce a literary, dramatic
or musical work in any material form including storing by electronic
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means, to make copies of such a work to perform it in public and in the
case of a sound recording it includes the right to sell or give on
commercial rentals or to communicate the sound recording to the
public. He has submitted that the rights of the owner of copyright and
its associate rights are covered in Chapter IV of the Act. Ownership of
the copyright can be acquired in 4 broad ways. These are as under:-
i) By the author himself, being the first owner
under Section 17;
ii) Situations in which the author creates a work in
the course of his employment etc. for the benefit or on
behalf of someone else, also under Section 17;
iii) Through an assignment under Sections 18 and
19 and
iv)Through testamentary disposition under Section 20. - Mr. Khambata has submitted that the aforementioned
categories confer full and absolute ownership on the
author/owner/assignee, as the case may be. Thus, the owner of the
copyright could be an assignee. All the incidents of rights that are
available to an owner are also available to an assignee. The rights are
not higher or lower merely by virtue of the ownership rights being
acquired through assignment. The Defendants termed the Plaintiffs as
“Aggregators” whatever their characterization, in law, the Plaintiffs are
as much owner as any other form of owner.
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - Mr. Khambata has referred to Section 18(2) of the Act
wherein it is provided that the assignee shall be treated for the
purposes of this Act as the owner of copyright and the provisions of
this Act shall have effect accordingly. - Mr. Khambata has also referred to Section 18 (1) of the Act
which specifically recognizes the owner’s right to assign his copyright
either wholly or partially, to any person. - Mr. Khambata has referred to the Right of an owner of
copyright to license its work under Chapter VI of the Act. Under
section 30 of the Chapter VI of the Act the Licences by owners of
copyright have been provided. The owner of the copyright in any
existing work or the prospective owner of the copyright in any future
work may grant any interest in the right by licence in writing by him
or by his duly authorised agent: - Mr. Khambata has submitted that Section 30 of the Act is
the source, which gives an "owner" of a copyright the power to grant
any interest in the copyright by license. Section 30 applies to an
"owner". An "owner" as is clear from Section 18(2) and as mentioned
above includes an "assignee". Further, Section 30 also specifically
empowers "duly authorized agent" of the owner, to grant license. He
has referred to Section 30 (A) of the Act and has submitted that this
makes it very clear that the provisions of Section 30 apply to licensing
in the same way as the provisions of Section 19 apply to an
assignment. Therefore, the Act allows an "owner" to grant a license
directly or through an agent under Section 30 and then sets out the
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procedure for licensing by specifying that what applies to assignment
would apply to licensing as well. - Mr. Khambata has referred to Sections 31, 31(A) to 31(D)
of the Act which give a whole scheme of regulations for granting
licenses compulsorily to the public. These sections fetter the right of
the owner in the matter of grant of licences. He has submitted that the
scheme of these sections contemplates notice to be issued to the
“owner” to secure such licences thereby recognizing the primacy of the
“owner’s right to licence” . The term owner is used in these sections not
a “registered copyright society”. These Sections of the Act envisage that
it is the “owner” of the Copyright who is entitled to grant licenses for
consideration and if he charges an exorbitant consideration, there is a
remedy provided in the Act itself. It is the “owner” who is also entitled
to be heard and to be paid. - Mr. Khambata has submitted that such a scheme provided
under the Act would have been totally unnecessary if the Defendants
were correct in their contention that it was only a “registered copyright
society” which could carry on such business of issuing or granting
licences. Accepting the Defendant’s submission as pleaded and argued
would amount to rendering this scheme meaningless. - Mr. Khambata, thereafter, referred to the Scope and object
of the 1994 Amendment. By the 1994 Amendment a new chapter –
Chapter VII was introduced, which deals with ‘copyright society’. He
has submitted that the object of 1994 Amendment was to promote the
Collective administration of rights through a Copyright Society, both
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for the benefit of the owner as well as general public. The copyright
societies, on an “authorization” from the owners could administer
rights that were either licensed and/or assigned to them. As such, a
Copyright Society fundamentally operated to administer rights in
respect of works that belong to “others”. He has submitted that by its
very nature therefore, a copyright society may wear two hats i.e. (i) an
authorized agent and (ii) an assignee. It administers the rights of
“owners” by operating as an agent. He has submitted that reading of
Clause 11 of the Notes on Clauses together with Sections 33 to 36
which have been introduced by 1994 Amendment Act was was merely
to provide for registration and to regulate functioning of copyright
societies. The amendments so introduced did not in any manner affect
and/or circumscribe the rights of an owner to conduct its own affairs
including granting of licenses by such owner. The “sea change” as
sought to be contended by the Defendants is absolutely not evident
from the 1994 Amendment or Notes on Clauses in this regard. - Mr. Khambata has submitted that it is necessary to refer in
this context to Section 33 of Chapter VII of the Act, which is
reproduced as under:-
Section 33 of the Act provides as follows;
“33. Registration of Copyright society.— (1) No
person or association of persons shall, after coming into
force of the Copyright (Amendment) Act, 1994 (38 of
1994) commence or, carry on the business of issuing or
granting licences in respect of any work in which
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copyright subsists or in respect of any other rights
conferred by this Act except under or in accordance
with the registration granted under sub-section (3):
Provided that an owner of copyright shall, in his
individual capacity, continue to have the right to grant
licences in respect of his own works consistent with his
obligations as a member of the registered copyright
society:
Provided further that the business of issuing or
granting licence in respect of literary, dramatic, musical
and artistic works incorporated in a cinematograph
films or sound recordings shall be carried out only
through a copyright society duly registered under this
Act:
Provided also that a performing rights society
functioning in accordance with the provisions of section
33 on the date immediately before the coming into
force of the Copyright (Amendment) Act, 1994 (38 of
1994) shall be deemed to be a copyright society for the
purposes of this Chapter and every such society shall
get itself registered within a period of one year from
the date of commencement of the Copyright
(Amendment) Act, 1994.
(2) Any association of persons who fulfils such
conditions as may be prescribed may apply for
permission to do the business specified in sub-section
(1) to the Registrar of Copyrights who shall submit the
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application to the Central Government.
(3) The Central Government may, having
regard to the interests of the authors and other owners
of rights under this Act, the interest and convenience of
the public and in particular of the groups of persons
who are most likely to seek licences in respect of the
relevant rights and the ability and professional
competence of the applicants, register such association
of persons as a copyright society subject to such
conditions as may be prescribed:
Provided that the Central Government shall not
ordinarily register more than one copyright society to
do business in respect of the same class of works.
(3A)…
(4)…
(5)… - Mr. Khambata has submitted that the heading of Section 34
is clear that it deals with ‘Administration of rights of an owner by a
copyright society’. Thus, it it is somebody else’s rights which are being
administered and that owner can be an author, employer, proprietor,
an assignee or someone who inherits it. Therefore, the copyright
society is acting in a capacity similar to a manager/agent while
administering the rights of the owner. - Mr. Khambata has referred to Section 34(1)(a) which deals
with the manner in which a copyright society would obtain
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authorization for administration which clearly conveys the intention to
include both, the author and other owners of right which would
include an ‘assignee’. Further, Section 34(1)(b) of the Act contemplates
that an author or other owner will have the right to withdraw
authorization given to the copyright society. This shows that an author
or other owner does not have to carry out the business of licensing his
works only through a copyright society. Since, once an owner
withdraws its authorization from a copyright society, the owner can
independently exercise his rights as he deems appropriate. It could
never have been the intention of the legislature that once an author
withdraws the authorization from a copyright society then that work
cannot be licensed by anyone especially an owner. Such an
interpretation would undermine the public interest in making available
the copyrighted work to members of the public. In any event the
provisions of Section 31, 31A-D would continue to operate to bind all
owners to grant compulsory and statutory licenses even after
withdrawal of authorization under Section 34(1)(b). - Mr. Khambata has submitted that Section 34(3) of the Act
clarifies that a copyright society is licensing the works of an “owner”
under section 30. This means that a copyright society is licensing the
works of the “owner” as a duly authorized agent under Section 30.
Therefore, this is not a new right created in favour of a copyright
society independent of the owner or independent of it being a duly
authorized agent.
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - Mr. Khambata has then referred to Section 35 (1) of the
Act, wherein it is provided that “Every copyright society shall be
subject to the collective control of the owners of rights under this Act
whose rights it administers … ” - Thus, both Sections 34 and 35 draw a clear distinction
between the author/ owner of the right on the one hand and the
administrator of that right on the other (i.e. the copyright society) as
such has been drawn. - Mr. Khambata has referred to the decision of the Supreme
Court in the “Entertainment Network India Ltd. v. Super Cassette
Industries Ltd”.
1
He has submitted that the Supreme Court has held
that Chapter VII was incorporated into the Act so as to enable an
author to commercially exploit his intellectual property through a
Copyright Society. A Copyright Society steps into the shoes of the
author, it issues licenses on behalf of the author and files litigation on
his behalf. The Supreme Court goes on to hold that as per Section 34
of the Act, a Copyright Society is a virtual agent authorized to act on
behalf of the owner. Therefore, Chapter VII does not take away the
rights of the author/ owner, it only gives a choice to the author/ owner
to either exploit its copyright on its own or to exploit its copyright
through a Copyright Society. The idea of a Copyright Society is to assist
the owner and not take away rights from an owner. - The Supreme Court has concluded that Section 34 of the
Act provides for administration of rights of owners by a copyright
1 (2008) 13 SCC 30 Para 66
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society for all intent and purport creates a virtual agency so as to
enable the society to act on behalf of the owner…(emphasis supplied). - Mr. Khambata has referred to the decision of the The Delhi
High Court in the case of Phonographic Performance Ltd. vs Lizard
Lounge & Ors.
2
The Delhi High Court whilst discussing the role of
Copyright Society and the rights that such Copyright Society can
exercise observed that the author being the first owner of the
Copyright under section 17 can certainly appoint an agent (Copyright
Society) to institute legal proceedings. The Delhi High Court held
that :-
“24.…The Copyright Society may not have exclusive
rights inasmuch as the owner continues to
simultaneously have rights to deal with his Copyright
in the work…
25..…The Copyright Society is an agent appointed
under the agreement by the owner of the Copyright
and specific powers have been conferred on the agent
to institute legal proceedings. The said Act does not
contain any provision prohibiting the institution of
legal proceedings in derogation to the general law of
agency. The author being the first owner of Copyright
under Section 17 of the said Act can certainly appoint
an agent to institute legal proceedings.
2 (2009) ILR 2 Delhi 726 Para 24-27.
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - …The creation of Copyright Society is to serve all
the three objectives without denuding the author of its
own individual rights” (emphasis supplied)”. - Mr. Khambata has referred to extract from Copinger and
Skone James at Page 1540, wherein it is stated that the norm is that
copyright licensing is done individually by the owners. It is only in
situations where it becomes difficult or impossible for an owner to
license his works individually that the need for Copyright Societies
arises. The rationale for Copyright Societies is that it is the best means
of protecting owners rights. Such Societies offer a facility to owners;
they do not denude the owners of any of their rights. - Mr. Khambata has submitted that Owner’s right under
Section 30 cannot be curtailed by Section 33 (1) of the Act. He has
submitted that Defendants have alleged that “no person” in Section
33(1) includes an “owner” of copyright and therefore even an owner of
copyright cannot commence or carry on the business of granting
copyright licenses. He has submitted that such an interpretation is ex
facie incorrect because :
i) If the interpretation as sought to be canvassed by
the Defendant is accepted, then Section 33(1)
completely takes away the right granted by Section 30
of the Act. In such a case, Section 33(1) would
effectively emasculate Section 30;
ii) Further, if Defendant’s interpretation is accepted
then a section in a chapter dealing with copyright
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societies would completely subordinate and emasculate
the right of an owner under Section 30, a section which
falls in a different Chapter dealing with licensing. If
Parliament had intended to take away any part of the
owner’s right under Section 30 (even by subjecting it to
the compulsory agency of a registered copyright society)
then an express amendment to Section 30 would have
been essential. - Mr. Khambata has submitted that the decision of the
Supreme Court in the case of “K.M. Nanavati v. State of Bombay”
3
recognizes the well settled rule of interpretation that two apparently
conflicting provisions operating in two different fields should be
reconciled, by restricting each to its own object or subject. - Mr. Khambata has then referred to the decision in the case
of “Leopold Café & Stores & Anr. Vs. Novex Communications Pvt. Ltd,
4
wherein the Supreme Court has held that the prohibition as
contemplated under Section 33(1) is on conducting business of
licensing by a person in its own name for works in which ‘others’ hold
Copyright. - Mr. Khambata has submitted that the word ‘business’ has
no technical meaning but is to be read with reference to the object and
context of the Act in which it occurs. The interpretation necessarily has
to be "contextual". He has submitted that for this purpose it is
3 AIR 1961 SC 112
4Order dated 17th July 2014 in NOM (L) No.1451 of 2014 in Suit (L) No.603 of 2014; 2014 SCC
OnLine Bom 1324.
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necessary to note the heading of Section 33 which is “Registration of
copyright society”. He has submitted that the heading of a section can
be used to interpret the object and purpose of a Section. It is well
settled that the headings of sections are substantive parts of the act
and limit or explain their operation. He has placed reliance upon the
decision of the Supreme Court in “K.M. Nanavati” (supra) which is
the authority for this proposition. He has also referred to the heading
of Section 34 of the Act which is “Administration of rights of owner by
copyright society”. He has submitted that Sections 33 and 34 of the Act
must be read as respectively restricted to the subject described by these
headings. Therefore, if a copyright society wants to do the business of
issuing licenses, then it must do so as per the provisions of Section 33;
this is all that the section contemplates. It cannot purport to curtail the
owner’s right to license given under Section 30 falling under Chapter
VI of the Act. - Mr. Khambata has submitted that it is also well settled that
a statute is required to be harmoniously construed so that each
provision is given effect to without defeating and/or destroying
another. - He has placed reliance upon the decision of the Supreme
Court in “Godavat Pan Masala Products I.P. Ltd. vs. Union of India”
5
.
The Supreme Court has held as under:
“It is an accepted Canon of Construction of Statutes
that a statute must be read as a whole and one
5(2004) 7 SCC 68 Para 29.
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provision of the Act should be construed with
reference to other provisions of the same act so as
to make a consistent, harmonious enactment of the
whole statute. The Court must ascertain the
intention of the legislature by directing its attention
not merely to the Clauses to be construed but to the
Scheme of the entire statute. The attempt must be
to eliminate conflict and to harmonize the different
parts of the statute for. It cannot be assumed that
Parliament had given by one hand what it took
away by the other. (emphasis supplied).
The same principle has been enunciated by the
Constitution bench of the Supreme Court in K.M.
Nanavati’s (Supra). - Mr. Khambata has submitted that applying these principles,
the only interpretation and the way to look at the term ‘business’ that
harmonizes Section 33 with the other sections in the Act would be to
construe business as "business of trading or granting licenses in respect
of works which are not owned by such person" as held by this Court in
“Leopold Cafe” (Supra). The meaning of “business” has to be
necessarily such that would not cause violence to other provisions of
the Act including Sections 18, 19, 30 and 34. - Mr. Khambata has submitted that the Defendants have
contended that “business” must be given the widest possible meaning
and as such anything that is “business”, including the grant of licenses
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by the owner is covered by Section 33 (1). He submitted that such a
contention is completely counterproductive and in fact militates
against the case of the Defendants. The wider the interpretation of the
term “business”, the greater the intrusion on the right available to the
owner under Section 30. If business is interpreted as put forth by the
Defendants, then in that case, 99% of the ownership rights would be
taken away and the only right left with the owners would be to license
its rights for philanthropy. - Mr. Khambata has referred to the definition of Copyright
under Rule 2 (c)of the Copyright Rules, 2013. He has submitted that
this definition is in wide terms although it also references sub-section
(3) of Section 34, which deals with functions that a copyright society
may perform qua works of others. He has submitted that definition in
Rule 2(c) in any event applies only to the rules. It cannot be applied to
interpret Section 31(1), a provision of the primary statute and one that
came 19 years before Rule 2(c). He has submitted that if the term
“business” is given the wide meaning, then, there would necessarily be
a conflict between Section 30 and 33 of the Act. - Mr. Khambata has submitted that in any case, the Rules are
a piece of subordinate legislation. They cannot be considered to control
the provisions of the Act especially if they cause conflict or absurdity in
reading of the substantive provision of the Act. - Mr. Khambata has submitted that the different chapters in
an Act cover different demarcated aspects. Chapter VII of the Act
covers ‘Copyright Societies’ and further expounds on the conditions of
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the registration and other associated aspects, whereas Chapter VI of
the Act creates a statutory right of licensing. He has submitted that a
section which comes under Chapter VII dealing with copyright societies
cannot in effect, take away a right granted under a completely
different chapter. Particularly when the “clearest of language” in this
regard as used in the second proviso is absent. - Mr. Khambata has submitted that the contention of the
Defendants that the later provision i.e. Section 33 would prevail over
an earlier provision i.e. Section 30 of the Act has become obsolete in
England. Even under Indian law the Supreme Court in K.M. Nanavati’s
case (supra) made it clear that the rule is to be applied along with
several other rules. The Supreme Court has treated the rule of the later
provision as one amongst a basket of rules which must operate
together with other rules and which moderate and temper each other.
It cannot be said that this last rule supersedes every other rule and the
only thing that matters for harmonizing or resolving ambiguity is to
see which is the latter provision as sought to be argued by the
Defendant. The Supreme Court has also held that if there is a conflict
between two provisions of a statute then it has to be determined which
is the leading provision and which is the subordinate provision and
which provision must give way to the other. If this test is applied the
positive clear provision conferring statuary rights upon an owner to
grant license is Section 30. Section 33(1) does not deal with owner’s
right of licensing.
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - Mr. Khambata has submitted that interpretation leading to
unreasonable results must be eschewed. He has in this context placed
reliance upon the decision of the UK Supreme Court in “Gill v Donald
Humberstone & Co. Ltd”.
6
In the said decision the UK Supreme Court
has elucidated the principle that if the language of a section is capable
of more than one interpretation then, the Court should avoid natural
meaning if it leads to an unreasonable result. - Mr. Khambata has submitted that the Defendants
interpretation on 33 (1) must be eschewed as it will lead to absurd
and unreasonable results. If such interpretation is accepted on
withdrawal of authority by the owner from the registered copyright
society (as is permissible under Section 34(1)(b)) no one will be able
to license the work- not even the owner himself. The first proviso to
Section 33(1) will place the owner who is a member of a copyright
society in a better place (i.e. being able to license) then one who had
never been a member at all (who could not, on the Defendants’
interpretation, license its own work). - Mr. Khambata has referred to the first Proviso to Section
33(1) which recognizes right of an owner to grant licenses even after
such owner becomes a member of a registered Copyright Society. The
only embargo in such a case is that the owner can grant a license
consistent with its obligation qua such registered society. He submitted
that what flows from the first proviso to Section 33 is that if as a
member of a copyright society an owner can license his own works,
6[1963] 1 WLR 929
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surely a non-member cannot be prevented from licensing his own
works. - Mr. Khambata has submitted that the the first proviso to
Section 33(1) uses the phrase ‘individual capacity’. He has submitted
that the term individual capacity should not be considered to be
equivalent to exercise of rights by individual authors or owners
personally. It should rather be understood to mean any method other
than collective management whereby right holders make their own
decisions about exercise of the rights in the works. - Mr. Khambata has submitted that the defendants have
contended that the words ‘individual capacity’ in Section 33(1) is the
opposite of business and therefore an owner licensing his works in his
individual capacity would not be doing business as per Section 33(1)
of the Act. He has submitted that this argument is also completely
untenable since there is nothing in the Act to suggest that the words
individual capacity is the opposite of business. He has submitted that a
company can also do business in its individual capacity. He has
submitted that the use of the expression ‘carrying on business’ must be
interpreted contextually. The same would not cover the owners’
activity of carrying on business and include carrying on business of
issuing licenses in its own name but in which others hold copyright.
Hence, the expression “individual capacity” in Section 33(1) must be
interpreted as meaning only anything opposed to “collective capacity”
i.e. through a society. That is collective administration of owner’s
rights.
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - Mr. Khambata has thereafter referred to the second Proviso
to Section 33 (1) of the Act. He has submitted that prior to 2012
Amendment by which the second proviso was added to Section 33(1),
the authors of the underlying work lost their rights to their works to
the owners of the sound recording or the owners of the cinematograph
film who had employed them to create the underlying work. In order
to correct this specific mischief a proviso was added to Section 17 as
well as Section 18 as per the 2012 Amendment Act. These provisos
stated that even if an individual who has authored a work has been
employed by someone else i.e. the owner of the copyright, the authors’
rights to the underlying work would not be affected by the ownership
of the copyright by the employer. He has referred to Minister’s speech
tabling the 2012 Amendment and has submitted that the second
proviso was introduced to assuage the grievances and/or concerns of
the “author” community and this can also be culled out from the
statement of objects and reasons to the said amendment. - He has also referred to the speech of the Minister of
Information and Broadcasting whilst tabling this amendment, which is
in this context. Further he has also referred to Parliamentary
Committee 227th Report- 2011 Bill from which the discussion on the
amendment to Section 33 can be ascertained. He has submitted that it
is clear therefrom that the object of the amendment was to augment
/strengthen the eco system with respect to the “author” community
and ensuring equal representation of “authors” and “composers” on
one hand, and “owners” on the other, in copyright societies.
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - Mr. Khambata has submitted that what is significant to note
in the 2nd proviso is that there is a complete embargo on carrying on
the business of issuing or granting license in respect of the underlying
work and this business can be carried out “only” through a copyright
society. Therefore, it is clear that when the legislature specifically
wanted rights of owners / authors to be curtailed, there was a specific,
clear and unambiguous provision. This language is absent in Section
33(1). He further submitted that if the Defendants argument is
accepted that Section 33(1) prevented all owners, including authors,
from doing the business of granting license of copyright, then there
would be no need of the second proviso. - Mr. Khambata has submitted that the second proviso was
needed since the Parliament was clear that Section 33(1) did not
prevent all owners including authors from licensing their copyrights for
profit and since parliament wanted to draw distinction between the
authors and the owners the second proviso became necessary. Hence it
is specifically mentioned that licensing by the authors of the
underlying works will only be done by the copyright society. - Mr. Khambata has submitted that if the second proviso to
Section 33(1) is clarificatory (as argued by the Defendants), this would
mean that the Parliament only wished to clarify this position for
underlying works and not for any other works. Therefore even this
case as canvassed by the Defendants militates against the
interpretation sought to be propounded by them. He has submitted
that the Supreme Court in “Shree Bhagwati Steel Rolling Mills vs.
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Commissioner of Central Excise”.
7
at Paragraph 21 held that
‘Parliament is deemed to know the law and therefore the fact that the
Parliament has amended Section 33(1) in 2012 by adding the second
proviso shows that Parliament itself did not think Section 33(1) barred
every owner of a copyright from carrying on the business of licensing
his works’. - Mr. Khambata has submitted that the Division Bench of this
Hon’ble Court in the case of Phonographic Performance Limited v.
Avion Hospitality Pvt Ltd & Ors. has set aside the view taken by a
Learned Single Judge of this Court in “Phonographic Performance Ltd
vs City Organisers Pvt. Ltd.”.
8
which had accepted the interpretation as
sought to be canvassed by the Defendants. The Division Bench in
“Avion Hospitality Pvt. Ltd.” (supra) accepted the interpretation placed
by counsel for the Plaintiff on Section 33 read with Section 34 of the
Act and had found that the learned Judge's attention was not invited to
several provisions of the Act from which it can be construed that the
Plaintiff-Novex has locus to file the suit or claim injunction. - Mr. Khambata has submitted that the decision of the
Madras High Court in “Novex Communications Vs. DXC Technology
Pvt. Ltd.”.
9 does not assist the Defendant. He has submitted that the
Madras High Court in the said decision has erroneously framed an
issue whether Novex is entitled to grant licenses or not. The subject
matter of the dispute before the Madras High Court was whether DXC
Technology was infringing Novex’s copyright or not, it wasn’t whether
7[2016) 3 SCC page 643
8[Comm. Suit No. 740/2017 dated 21.12.2017
9[2021) SCC online MHC 6266
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Novex was entitled to grant licenses or not. He has submitted that the
Madras High Court had relied heavily upon the reasons for introducing
the 2012 amendment, in support of its decision. The Madras High
Court held that a careful examination of Section 18, 30 and 33 show
that while the right of the owner in his individual capacity is retained,
the right to carry on the “business of issuing and granting licenses” is
taken away on account of the bar contained in Section 33(1) read with
the second proviso. The judgment also holds that the word “only”
occurring in the second proviso can be done only through a registered
copyright society. - Mr. Khambata has submitted that the Madras High Court
has in the said decision misconstrued the judgment of this Court in the
case of Leopold (supra) and completely misapplied the ratio contained
therein. The Madras High Court failed to appreciate that in Leopold
(supra), Novex was merely an agent acting on behalf of undisclosed
principle (which this Court held was prohibited by Section 33). The
Madras High Court has conflated the first and the second proviso to
Section 33(1) and applied its interpretation of the second proviso
which deals with the authors of the underlying works to the first
proviso which deals with assignees/ owners of the entire sound
recording. - Mr. Khambata has submitted that the argument of the
Defendants is that the assignment is obtained by the plaintiff for the
purpose of issuing and granting licenses and therefore cannot be
enforced before this Court in view of Section 33(1). Since there is no
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bar in the Act in obtaining an assignment, at best and without
prejudice to the argument elucidated above and, in the alternative, the
bar would kick in only in respect of the actual grant or issuance of
licenses. That will not affect the right of an owner independently to
bring a suit for infringement of copyright and seek reliefs. - Mr. Khambata has submitted that another fact is that the
Defendants have no independent right of its own. They are rank
infringers. The Defendants have not even attempted to justify their
entitlement in exploiting the subject sound recordings and has merely
sought to assail Novex’s entitlement to seek reliefs on the ground that
Novex is not a registered copyright society. Once it is observed that the
right to seek relief for infringement is not jeopardized, the relief as
sought by Novex must follow. This is clear from a reading of Sections
13, 14 r/w. 51 (a)(i). - Mr. Khambata has submitted that the Defendants’
contentions are that the Assignment Agreements are illegal and
erroneous. The Assignment Deeds have been executed for a substantial
consideration between the music labels and Novex for transferring the
‘on ground performance rights’ in consonance with Section 18 of the
Act. He has submitted that all that the Suit is concerned, is whether
Novex is the exclusive owner of the Copyright and whether Novex has
a right to prevent the infringement of its exclusive Copyright.
Therefore, if it is held that Novex is the exclusive owner of the
Copyright then what logically follows is that the Defendants have to be
injuncted from infringing upon Novex’s exclusive Copyright. This
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would be irrespective of whether or not there is a bar under Section
33(1) of the Act preventing Novex from carrying out the business of
issuing licenses of its Copyrights. - Mr. Khambata has submitted that when an owner takes an
assignment of copyright, the object is to take ownership of the
copyright. The consideration which prompted that is not the object or
purpose of the contract. Analysis of the contracts entered into by
Novex will show that the contracts have not even said anything about
the assignment being taken for the purpose of business of granting
license. Even assuming the contract did say that the contract was for
the purpose of doing the business of granting license that would only
describe the motive of the contract i.e. the reason Novex desired to
take the assignment but that motive would still not be the object of the
contract. Thus, Defendants’ contention that if Novex has taken an
assignment solely for the purpose of doing business, in licensing, then
the assignment is for an unlawful object and therefore void, under
Section 23 of the Contract Act, is misconceived. - Mr. Khambata has submitted that the the Assignment Deeds
are extremely specific and meet the requirements of Section 19. The
Assignment Deeds categorically state that the ownership rights in the
works are being assigned to Novex and there is no mention in the
Assignment Deeds of the assignment being for the purpose of doing
business in licensing. Therefore, the argument of the Defendants that
the assignment is solely for the purpose of doing business in licensing
must be rejected.
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - Mr. Khambata has accordingly submitted that there is no
question of there being any impediment in the Plaintiff’s entitlement to
the reliefs as sought. Equally, the fact that the Plaintiff is not a
registered copyright society does not impair its ability to the reliefs as
sought. - Mr. Ravi Kadam, learned Senior Counsel appearing for the
PPL has submitted that PPL owns and controls (by Exclusive
Licenses) the public performance rights of various music labels
which include both, international and domestic recordings. The
repertoire of the recordings in which rights are assigned to PPL
extend to around 400 labels and more than 45 lakh recordings. PPL
issues licenses for public performances / communication to the
public of sound recordings on the basis of exclusive rights assigned
to it under various assignment agreements by these music labels.
He has submitted that PPL has Assignment agreements with 60%
of the labels in its repertoire whereby the following rights have
been assigned exclusively to PPL. These Agreements can be
found on the official website of PPL. Further, he has submitted
that with respect to 11 labels, PPL is the 'Exclusive Licensee' of
the copyright in the sound recordings. Barring these 11 labels, for
all the other labels i.e. 393 of 404, PPL has Assignment Deeds
executed for the copyright in the sound recordings. - Mr. Kadam has placed reliance on the relevant
definitions under the Copyright Act namely Section 2(d) which
defines Author; Section 2(f) which defines Cinematograph film;
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Section 2(ff) which defines Communication to the public; Section
2(j) which defines Exclusive licence; Section 2(uu) which defines
Producer; Section 2(xx) which defines sound recording; Section
2(y) which defines work and Section 2(ffd) which defines
Copyright society. He has also referred to relevant provisions of the
Act which includes Sections 13, 14, 17, 18 ,19, 30 and 33. - Mr. Kadam has submitted that one of the objections
raised by the Defendant is that PPL cannot sue without joining
the owner in respect of the exclusively licensed works. He has
referred to Section 54 of the Act, which provides that unless the
context otherwise requires, the expression “owner of copyright”
shall include an “exclusive licensee”. Further Section 55 provides
that where the copyright in any work has been infringed, the owner
of the copyright shall be entitled to all such remedies including an
injunction. From a reading of Section 55 with Section 54, an
exclusive licensee would be entitled as an owner of copyright for
the purposes of Chapter XII to institute a Suit and seek an
injunction in relation to an infringement of copyright in any work
covered by the exclusive license. - He has further referred to Section 61 of the Act which
provides Owner of copyright to be party to the proceeding. He
has submitted that in the present case, the infringement by
failure to obtain license by the various Defendants is not only in
relation to works of which the Plaintiff/PPL is an exclusive
licensee but also in respect of works of which it is itself an
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owner. Thus and for that reason, Section 61(1) would not
apply. - Mr. Kadam has submitted that PPL’s repertoire has a
majority of works over which it is the owner. These are two
compelling reasons and factors because of which the Court ought to
exercise its discretion under Section 61(1) to hold that it is not
necessary to make the 11 music labels who are Licensors/Owners of
the works as party Defendants to the Suit. - Mr. Kadam has submitted that upon reading of the
aforementioned provisions of the Act, when an owner is monetizing
copyright in any work, the owner is doing so for gain or for profit.
Regardless of the scale at which such activity resulting in
monetization of copyright takes place, it is a commercial or a
business activity as it is being done for gain. Any restriction or
curtailment of exercise of ownership rights whether by selfexploitation; assignment; license, depending upon scale or
motive/manner of exercise or regularity of exercise of such
ownership rights would be reading into the Act facets or nuances
relating to the primary right of ownership of a copyright, which
the Act does not in its language provide for at all. - Mr. Kadam has placed reliance upon provisions of the
Bern Convention (1896), to which India is a signatory and
particularly Article 2 (6), which provides that the protection of
works mentioned in this Article shall shall operate for the benefit of
the author and his successors in title. Article 5 (1), which provides
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that Authors shall enjoy, in respect of works for which they are protected
under this Convention, in countries of the Union other than the country
of origin, the rights which their respective laws do now or may hereafter
grant to their nationals, as well as the rights specially granted by this
Convention. Further, under Article 5(2) it is provided that, t he
enjoyment and the exercise of these rights shall not be subject to any
formality; such enjoyment and such exercise shall be independent of
the existence of protection in the country of origin of the work.
Further Article 9, which is Right of Reproduction, provides that
Authors of literary and artistic works protected by this Convention
shall have the exclusive right of authorizing the reproduction of
these works, in any manner or form. It shall be a matter for the
legislation in the countries of the Union to permit the reproduction
of such works in certain special cases, provided that such
reproduction does not conflict with a normal exploitation of the
work and does not unreasonably prejudice the legitimate interests of
the author. - Mr. Kadam has submitted that in view of the
aforementioned, the primary objective of copyright and provisions
relating to copyright is being for the benefit and enjoyment and
protection of the owner. He has also placed reliance on an extract from
Copinger and Skone & James on Copyright Volume I, page 1503,
Paragraphs 18-28 in this context. - Mr. Kadam, has supported the submissions of Mr. Kambata
as to the interpretation of Chapter VII of the Act brought by the 1994 as
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well as 2012 Amendments, by which the second proviso to Section
33(1) was added. He has submitted that the embargo or prohibition on
a person or association of persons commencing or carrying on the
business of issuing or granting licenses in respect of any work in which
copyright subsists other than by registering such association of persons
as a copyright society [ Section 33(1) r/w Section 33(3)] has no
application to the issuing or granting of licenses in respect of any work
by an owner or by an exclusive licensee who by the terms of the
exclusive license is entitled to issue further licenses in respect of the
work. This interpretation is supported by the provisions of the Act
pertaining to ownership analysed. It is also in consonance with the
first proviso to Section 33(1). This proviso clarifies that an owner of
copyright shall in his individual capacity, continue to have the right
to grant licenses in respect of his own works. - Mr. Kadam has submitted that there is nothing in the
language of Chapter VII or the relevant rules appearing in Chapter XI of
the Copyright Rules 2013 that mandates or forces owners who may in a
given case own copyright in a large repertoire of sound recordings to
become members of a registered copyright society. He has also placed
reliance in this context on Section 34(1)(b) of the Act. - Mr. Kadam has further submitted that the expression in
his individual capacity appearing in the first proviso to Section 33 has
nothing to do with whether the owner of copyright in a sound recording
is granting licenses on a small or large scale so as to constitute such
activity as a business. The expression ‘capacity’ when used in the
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context of a particular status applies where a person enjoys two
statuses simultaneously. He has supported this interpretation placed
by Mr. Khambata on the first proviso to Section 33 (1) in this context. - Mr. Kadam has submitted that the decision of the Madras
High Court in “Novex Communications Pvt. Ltd. Vs. DXC Technology
Pvt. Ltd” (supra) has overlooked Section 30 which only speaks of
the owner’s rights to license and does not talk about any capacity or
does not talk about whether the activity is done at an individual
level or as a business. He has submitted that the Madras High Court
has completely lost sight of the phrase individual capacity
appearing in the first proviso to Section 33(1), applies in the
context of that proviso where the owner of a copyright in a work
becomes a member of a Registered Copyright Society for that
category of works. This subjectivity of ‘individual capacity’
transcending into the realm of business is a notion introduced by the
judgment and brings about a whole world of uncertainty and
ambiguity in the application of the provisions of the Act in
paragraph 55. Further, the Madras High Court has concluded that
the entity like the plaintiff therein which is involved in the business
of issuing licenses falls within the net of the second proviso of
Section 33 (1). There is no reasoning as to how the granting of
licenses in respect of sound recordings which is not covered by the
second proviso of Section 33(1) would take the activity of the
Plaintiff within that second proviso.
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - Mr. Kadam has submitted that if the argument of the
Defendants that the ‘business’ of licensing can be conducted only
through a copyright society is to be accepted then, it would only be
the Copyright Society who would be in a position to maintain a suit
for infringement. The Defendants’ have failed to address the issue
that no conditions have been introduced in Section 51 and Section
19 for exercise of rights by the Copyright Owner at the time when
the Copyright Society chapter was introduced in the Act. He has
accordingly submitted that the PPL in the present case has exercised
its rights as an owner and is not administering the rights of others.
This has been overlooked by the Defendants in their arguments. He
has accordingly submitted that PPL by exercising its rights as owner
is able to seek reliefs as sought for in the above suits. - Dr. Virendra Tulzapurkar, learned Senior Counsel
appearing for the Defendants in the above suits has submitted that
the prohibition imposed by Section 33(1) applies if the following
two conditions are satisfied: (i) Plaintiff is a “person or association
of persons”; and (ii) Plaintiff carries on business of issuing or
granting licenses. He has submitted that both PPL and Novex in the
above suits are limited companies and therefore, fall within the
meaning of “persons”. He has submitted that there is nothing in the
language of Section 33(1) to suggest that the word “persons”
excludes owners of copyright. On the contrary, “persons” as used in
Section 33(1) must include owners because Section 33(1) refers to
issuing of licenses. Admittedly, only an owner can issue a license
under Section 30 of the Act.
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - Dr. Tulzapurkar has submitted that since there is no
ambiguity in the language of the section, the first rule of statutory
interpretation, i.e., of literal interpretation, would demand that the
word “persons” be given its natural grammatical meaning without
any artificial limitations or restrictions. - Dr. Tulzapurkar has submitted that Section 33(1)
prohibits “any person or association of persons” from carrying on the
“business of issuing or granting licenses” without registration as a
copyright society. PPL and Novex as aforementioned are covered by
Section 33(1) as they are clearly “persons” as well as carry on a
commercial activity that qualifies as “business”. - Dr. Tulzapurkar has submitted that Section 30 and
Section 33(1) operate in separate fields and do not conflict which
each other. While Section 30 deals with the general right of an
owner to grant a license, Section 33(1) regulates the business of
licensing. The law is plain and clear - an owner has the right to issue
a license. When his licensing activity enters the realm of “business”,
he is subject to statutory regulation under Chapter VII and must
carry on his activities either by seeking registration as a copyright
society or by doing it through a registered copyright society.
Assuming without admitting there is a conflict, even then Section
33(1) is a special provision and must prevail over the general one.
Moreover, the object of copyright law and legislative intent behind
Chapter VII is to balance the rights of owners and public interest by
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protecting the rights of users. This would mean owners too are
covered by Section 33(1). - Dr. Tulzapurkar has submitted that Section 33(1) does
not efface or make Section 30 redundant. An owner’s right to
monetise his copyright through licensing is not taken away at all, it
is merely regulated by Section 33(1). Such regulation is perfectly
permissible when done by way of statute. In fact, Section 34(3)
expressly preserves the right of licensing available under Section 30. - Dr. Tulzapurkar has submitted that the First Proviso to
Section 33(1) does not come to the aid of PPL and Novex because
(I) it applies only to members of a Copyright Society; (ii) Assuming
the First Proviso applies to non members, even then PPL and Novex
are not covered as they do not issue licenses in their “individual
capacity” or in respect of their “own works”. - Dr. Tulzapurkar has submitted that the purported
assignment agreements relied upon by the Plaintiffs are void and do
not validly transfer actual ownership rights to the Plaintiffs as: (i)
they do not identify the “work” as required under Section 19(2); (ii)
they fall foul of the requirement to specify payment of royalty to
authors; (iii) they do not confer actual ownership rights but are
designed only to circumvent Section 33(1); and (iv) in case of PPL,
there is no assignment/transfer of ownership in respect of 40% of
the sound recordings.
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - Dr. Tulzapurkar has further submitted that the Second
Proviso to Section 33(1) has no relevance to the present matter. It
was brought in by way of amendment in 2012 to correspond to the
changes made to Section 18 to protect owners of underlying works.
It does not impact Section 33(1), which has been on the statute
books since 1994. - Dr. Tulzapurkar has submitted that the Division Bench of
this Court in PPL vs. Avion Hospitality Pvt. Ltd.
10
, disposed off the
appeals against a set of ad-interim orders by clarifying that the
Defendant may raise “appropriate contentions including raising the
issue of maintainability of the Suits at the instance of the present
Plaintiff.” - Dr. Tulzapurkar has submitted that PPL and Novex have
not filed a simpliciter suit for injunction on grounds of infringement.
On the contrary, their entire case is that they are entitled to issue
licenses and collect license fees. On this basis, they have sought a
limited injunction against the Defendants from playing sound
recordings without taking a license from the Plaintiffs. This is
evident from the Plaintiffs’ own pleadings. He has relied upon
Paragraphs Nos. 6,9,11,13,28 and 32 of the plaint in Suit No. 157 of
2023 and Paragraphs Nos. 4, 6, 9 of Legal Notice dated October 4,
2022 issued by Plaintiff’s advocate in respect of the alleged
infringement at page no. 59 of the plaint in Suit No. 157 of 2023
and Paragraph no. 8 of Legal Notice dated October 4, 2022 issued by
10 Order dated 22nd December 2017 in Commercial Appeal (L) no. 100 of 2017.
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Plaintiff’s advocate in respect of the alleged infringement at page no.
76 of the plaint in Suit No. 157 of 2023. - Mr. Tulzapurkar has submitted that all the ad-interim
orders obtained by PPL and Novex in the matters under
consideration were limited to directing the Defendants to deposit the
license fees in court if they wanted to play the sound recordings or
directing the Defendants to take a license from PPL and Novex on a
without prejudice basis. Neither did PPL/Novex seek nor did the
Court grant them an injunction simplicitor. - Dr. Tulzapurkar has submitted that argument of PPL and
Novex runs contrary to the well-settled principle of ex turpi causa
non oritur actio or ex dolo malo non oritur actio i.e., a Plaintiff
cannot find his cause of action on an illegal act or amounts to
transgression of a positive law. This principle finds its modern
origins in the classic passage of Lord Mansfield C.J. in the 1775 case
of Holman vs. Johnson: He has submitted that this passage has been
cited with approval by the Supreme Court and High Courts in
several cases where the plaintiff’s cause of action emanated out of
an illegal act. - Dr. Tulzapurkar has submitted that the Supreme Court in
“Narayanamma & Anr. Vs. Govindappa & Ors”.
11 has recently
reviewed the entire law on ex turpi causa, including Lord Mansfield’s
seminal passage, and reiterated that if the plaintiff’s cause of action
11 [(2019) 19 SCC 42]
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is based on an illegality, it will not grant any relief to the plaintiff,
even if the defendant is guilty. - Dr. Tulzapurkar has submitted that the decision relied
upon by PPL and Novex namely the English Supreme Court’s
decision in “Patel v Mirza”
12 to counter the above does little to assist
the Plaintiffs. The said decision actually supports the Defendants’
case as it makes clear that ex turpi causa is indeed a valid defence
and that courts must examine the underlying purpose of the
prohibition and the public policy involved. - Dr. Tulzapurkar has submitted that the Plaintiffs reliance
on Gurumukh Singh v Amar Singh [(1991) 3 SCC 79] is also
misplaced. The said case dealt with an allegation that the object of
the contract was harmful to public policy. There was no
contravention of any law involved. In the instant case, however, the
Plaintiff’s actions are in direct contravention of Section 33(1) of the
Copyright Act. As per the law laid by the Supreme Court, it would
be impermissible to grant relief to such a plaintiff. - Dr. Tulzapurkar has submitted that PPL’s and Novex’s
activities fall under Section 33 (1) of the Act and which is apparent
from Clauses 3(a), 3(y), 3(z), 3(aa) and 3(ab) of its Memorandum
of Association as well as 3.20 and 12 of its Articles of Association.
This is also apparent from PPL’s Annual Report for the year ended
March 31, 2022 which shows that its principal activity is granting
12 [(2016) UKSC 42]
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public performance licenses. Further, a holistic reading of the
purported Assignment Deeds relied upon by PPL also points to the
fact that PPL is in fact engaged in the business of issuing licenses. - Dr. Tulzapurkar has further submitted that the clinching
factor on this issue is PPL’s antecedents. PPL was previously
registered as a copyright society under Section 33 of the Copyright
Act and admittedly carried on the business of issuing licenses. It
applied for re-registration in 2013 but withdrew its application in - It once again applied for re-registration in 2018, which was
rejected by the Government on grounds of delay. PPL challenged this
rejection before the Delhi High Court. The High Court directed the
Government to consider PPL’s application on merits. Vide order
dated June 9, 2022, the Government rejected PPL’s application on
the ground that PPL “has no professional competence to carry on its
business and manage its affairs in accordance to the provisions of
the Copyright Act 1957 and Copyright Rules, 2013”. Pertinently, PPL
has been carrying on exactly the same business of issuing licenses
and collecting license fees. More importantly, the very fact that PPL
was previously registered as a society and continued to fight for
registration shows that PPL itself is aware that registration is
required to carry on the business of licensing. - Dr. Tulzapurkar has submitted that similar is the case
with Novex namely that they carrying on business of issuing /
granting licenses. This is apparent from Clauses 1, 4 and 11 of the
Memorandum of Association of Novex which makes it clear that the
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main object of Novex is to carry on business of granting licenses.
Further, Novex’s Annual Report for the year ended 31st March, 2022
which clearly shows that Novex’s principal activity is granting public
performance licenses. Further, Novex’s website while referring to
public performance rights states “Novex is engaged in the business
of giving public performance rights in sound recordings”. Further, a
holistic reading of the purported Assignment Deed dated August 11,
2015 executed with Zee Entertainment Enterprises Ltd. clearly
shows that Novex is in fact engaged in the business of issuing
licenses. - Dr. Tulzapurkar has thereafter, referred to the definition
of “copyright business” in Rule 2(c) of the Copyright Rules, 2013
namely “business of issuing or granting licence in respect of any
class of works in which copyright or any other right conferred by the
Act subsists, and includes the functions referred to in sub-section (3)
of section 34”. He has submitted that the legislature has consciously
chosen to define this term widely and has not excluded the business
of licensing carried out by owners. - Dr. Tulzapurkar has placed reliance upon the decisions of
Courts on what is meant by “business” or “carrying on business”,
which are as under:-
i) ‘Smith vs. Anderson’
13
ii) ‘Bata Shoe Co. Ltd. vs. Union of India’‘
14
13 [1879 Vol. XV Ch. Div. (CA) 247]
14 [AIR 1954 Bom. 129]
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iii)’Sri Gajalakshmi Ginning Factory Ltd. vs. Commissioner
of Income Tax’
15
iv) ‘Barendra Prasad Ray vs. Income Tax Officer’
16
v) ‘State of Tamil Nadu vs. Board of Trustees of the Port of
Madras’
17
.
vi) ‘State of Andhra Pradesh vs. H. Bakhi’
18
.
vii) ‘State of Gujarat vs. M/s. Raipur Manufacturing Co.
Ltd.’
19
. - Dr. Tulzapurkar has submitted that PPL and Novex have
relied upon “S Mohan Lal v R Kondiah
20
” and “P K Kesavan Nair v
C K Babu Naidu
21
” to contend that the word “business” should be
interpreted as per context. However, reference to these cases does
not assist PPL and Novex in any manner. There is no justifiable
reason given by PPL and Novex to discard the definition of ‘business’
in the Copyright Rules namely Rule 2(c) of the Copyright Rules, - Further, PPL and Novex have not denied that they indeed
carry on business. Their own documents as aforesaid clearly show
that PPL and Novex are in the business of licensing. - Dr. Tulzapurkar has submitted that PPL and Novex have
based their argument on an incorrect assumption that an assignment
from the original owner takes them out of the regulatory ambit of
15 [AIR 1953 Mad 343]
16 [(1981) 2 SCC 693]
17 [(1999) 4 SCC 630]
18 [AIR 1965 SC 531]
19 [AIR 1967 SC 1066]
20 [(1979) 2 SCC 616]
21 [1953 SCC OnLine Mad 368]
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Chapter VII of the Copyright Act and Chapter XI of the Copyright
Rules. - Dr,. Tulzapurkar has submitted that the plain language of
Section 33(1) does not exclude owners/assignees. There is nothing
in the language to suggest that an assignment from an owner
entitles an assignee to carry on the business of licensing to public at
large without any regulatory fetters. - Dr. Tulzapurkar has submitted that there is nothing to
suggest that this “contract” or “agreement” referred to in Section 34
and Rule 54 excludes an agreement of assignment. The trigger for
regulation is the nature of the activity, i.e., business of licensing, and
not the mode of acquisition of the right to carry on such business. - Dr. Tulzapurkar has submitted that there is no conflict
between Section 30 and Section 33(1). Alternatively, assuming
without conceding there is any conflict, even then Section 33(1)
would prevail over Section 30. Section 30 is a general provision that
deals with an owner’s general right to license his copyright. Section
33, on the other hand, is part of Chapter VII of the Copyright Act,
which is a special provision and self-contained chapter that
elaborately governs the business of granting and issuing licenses.
Moreover, the present Section 33 is a latter provision that was
brought in by way of an amendment in 1994. Thus, the legislature
had notice of Section 30 when it enacted Section 33(1).
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - Dr. Tulzapurkar has submitted that it is well settled law
that the general law must yield to the special law. The Supreme
Court in a catena of cases has reiterated this well settled Latin
maxim “generalia specialibus non derogant”. In “Commercial Tax
Officer, Rajasthan vs. Binani Cements Ltd. & Anr.”
22
, the Supreme
Court exhaustively reviewed the judicial precedents on the subject
and noted that this principle is applicable not only amongst two
statutes but also finds utility in resolving a conflict between a
general and specific provision of the same statute. Further, it is also
an accepted principle of interpretation that in case of conflict
between two provisions of the same statute, the latter provision will
prevail over the former. See K.M. Nanavati vs The State of Bombay
23
and In Re: W. G. Ambekar
24
. He has further submitted that both
above principles are squarely applicable to the facts of the present
case and would mandate that Section 33(1) must prevail over
Section 30. - Dr. Tulzapurkar has submitted that it is now well
accepted that copyright law is not designed for protecting the
interest of owners alone. It is intended to balance the rights of the
owners with the rights of end users. He has placed reliance upon
Article 27 of the Universal Declaration of Human Rights where this
principle finds its origins. This is also noted by P. Narayanan in Law
of Copyright and Industrial Designs 4
th Edition where Article 27 is
reproduced. Further, “Copinger and Skone & James on Copyright”
25
22 [(2014) 8 SCC 319]
23 [AIR 1961 SC 112]
24 [MANU/MH/0148/1952]
25 (15
th
Edition)
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explains the rationale for copyright societies (also known as
collecting societies). The author notes that collecting societies
benefit rights owners and users alike, and in principle operates for
the benefit of the public. - Dr. Tulzapurkar has submitted that India is not alone in
regulating the business of collective administration of copyright.
Among common law countries, the UK has adopted the ‘Collective
Management of Copyright (EU Directive) Regulations 2016.’
Singapore too has an entire chapter on the subject in Part 9 of its
Copyright Act, 2021. Thus, given the strong public interest involved
in the collective administration of copyrights, governmental
regulation of such business is commonplace across jurisdictions. - Dr. Tulzapurkar has submitted that after noticing the
problems with the activities of copyright societies introduced by the
1994 Amendment, the Act was further amended in 2012 to
incorporate additional provisions for regulation of copyright
societies. Elaborate rules were also framed under Chapter XI of the
Copyright Rules 2013. He has placed reliance upon the provisions of
the Copyright Act and Rules that regulate the business of granting
license. He has submitted that it is evident that the Chapter VII of
Copyright Act and Chapter XI of the Copyright Rules put in place an
elaborate regime to regulate the business of issuing licenses. The
Statement of Objects and Reasons to the 2012 Amendment also
notes that one of the objects for the amendment was to “make
provision for formulation of a tariff scheme by the copyright
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societies subject to scrutiny by the Copyright Board”. He has also
placed reliance upon the 227th Report of the Parliamentary Standing
Committee dated November 2010 on the Copyright (Amendment)
Bill 2010 that ultimately led to the 2012 Amendments to the
Copyright Act. He has submitted that reference to the above material
is appropriate and necessary to ascertain the legislative intent
behind Chapter VII of the Copyright Act. Such reference to
legislative history has been approved by the Supreme Court in “R. S.
Nayak vs. A. R. Antulay”
26 wherein it was held that the function of
the court is to give effect to the real intention of Parliament. These
materials are permissible aids to construction and their denial would
deprive the court of substantial and illuminating aid to construction. - Dr. Tulzapurkar has placed reliance upon the decision of
the Supreme Court in “Entertainment Network (India) Ltd. vs. Super
Cassette Industries Ltd”.
27 wherein the Supreme Court has noted
that the provisions of Chapter VII of the Copyright Act serve the dual
objective of having copyright societies, i.e., to maintain a balance
between the protection of owners’ rights and interest of the public to
have access to the works. - Dr. Tulzapurkar has submitted that the expansive words
of Section 33(1), i.e., “no person or association of persons shall
commence or carry on the business of issuing or granting licenses”
clearly underline the intention of the legislature that business of
26 [(1984) 2 SCC 183]
27 [(2008) 13 SCC 30]
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issuing licenses can only be undertaken by a registered copyright
society. These words are required to be construed in the context of
its use in the Copyright Act and Rules which require that: (i) such
business can be carried on only by a registered copyright society; (ii)
such society is regulated by the Government; and (iii) there is only
one society for one category of work. Thus, allowing PPL to carry on
the business of licensing without registration would result in
escaping the intended regulation and would be contrary to the
scheme and object of Chapter VII of the Copyright Act. - Dr. Tulzapurkar has submitted that if the Plaintiff’s
argument is accepted and an assignee/owner is permitted to carry
on the business of issuing licenses without registration, then Section
33 itself would be rendered redundant and nugatory. This would be
contrary to the clear intention of the legislature to regulate the
business of licensing, even if the business is carried out by an
assignee/owner. Since only an owner (which term includes an
assignee) can issue licenses, it is quite obvious that the intent of
Section 33(1) was to regulate owners of copyright who can
potentially carry on the business of licensing. Thus, there is no
logical basis in the Plaintiffs’ argument that Section 33(1) applies to
persons other than owners. He has submitted that the law intends
that there must be a single copyright society for one class of work to
ensure a single window for end-users. - Dr. Tulzapurkar has submitted that the law clearly seeks
to address a mischief, i.e., of a person carrying on the business of
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licensing without regulation. He has submitted that the statute must
be interpreted to avoid this mischief by following the Heydon’s Rule
or mischief rule. He has referred to the following cases on this point:
a. The Supreme Court in “Godawat Pan Masala Products
(I) Pvt. Ltd. & Anr. vs. Union of India & Ors”
28 it was
held that for construing a statute, all sections will have
to be read together to ascertain what is the mischief
sought to be avoided.
b. In “Ameer Trading Corporation Ltd. vs. Shapoorji Data
Processing Ltd”.
29 the Supreme Court reiterated that
the Heydon’s Rule or Mischief Rule must be applied to
suppress the mischief that was intended to be
remedied, especially when Parliament has consciously
made an amendment to the law.
c. In “S. Mohan Lal vs. R. Kondiah”
30 it was held that the
expressions used in the Act must take their colour from
the context in which they appear.
d. In “Badshah vs. Urmila Badshah Godse”
31 the Supreme
Court relied on the Heydon Rule to hold that courts
must avoid a construction that “would reduce the
legislation to futility and should accept the bolder
construction based on the view that Parliament would
legislate only for the purpose of bringing an effective
result”.
28 [(2004) 7 SCC 68]
29 [(2004) 1 SCC 702]
30 [(1979) 2 SCC 616]
31 [(2014) 1 SCC 188]
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - In “District Mining Officer vs. Tata Iron & Steel Co. &
Anr.”32 the Supreme Court explained that legislation is primarily
directed to the problems before the legislature and to cover similar
problems arising in future. Thus, the legislative intent is to be
derived by considering the words in the enactment “in light of any
discernable purpose or object which comprehends the mischief and
its remedy to which the enactment is directed”. - Dr. Tulzapurkar has submitted that Chapter VII of the
Copyright Act requires that the business of licensing be carried on in
a particular manner. The Plaintiffs cannot be permitted to
circumvent the entire regulatory regime and carry on the business of
licensing in a manner other than what is prescribed by law. This
would go against the well accepted rule laid down in “Taylor vs
Taylor Taylor”
33 that if the law requires something to be done in a
particular manner, it must be done only in that manner or not at all.
He has referred to the decision of the “Nazir Ahmad vs. The KingEmperor”
34 and State of “Uttar Pradesh vs. Singhara Singh”
35
,
which follows the Taylor Rule. - Dr. Tulzapurkar has submitted that the principles of
construction propounded by PPL and Novex are misconceived and
not applicable to instant case. He has submitted that the decisions
relied upon by them in support of “harmonious construction” would
32 [(2001) 7 SCC 358]
33 [(1875) Vol.1Ch.D 426]
34 [1936 LXIII Indian Appeals 372]
35 [(1964) 4 SCR 485]
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require the court to read down Section 33(1) such that “owners” are
excluded from the word “persons”. This is contrary to the plain
language used in Section 33(1) of the Act. Further, harmonious
construction applies only if there is an ambiguity in the language of
the statute and cannot be used if the language is clear. In the present
case, the language of Section 33(1) is plain and unambiguous.
Hence, it would be impermissible to ignore the rule of literal
interpretation and apply the rule of “harmonious construction”
instead. - Dr. Tulzapurkar has submitted that Section 33(1) does
not take away the general rights of owners to license their works. On
the contrary, it retains and preserves that right but only regulates the
manner in which the business of licensing is to be carried on. Thus,
all that Section 33(1) requires is that if an owner wishes to carry on
the business of licensing, he must do it in the legally mandated
manner, i.e., through a registered copyright society. - Dr. Tulzapurkar has submitted that PPL and Novex have
relied upon the decisions in “Union of India vs. Dileep Kumar
Singh”
36 to contend that the court must give precedence to the
leading provision over the subordinate provision. However, this case
too is inapplicable in the present situation. PPL and Novex have been
unable to explain how Section 30 is a leading provision and Section
33 is a subordinate provision. On the contrary, the two operate in
separate fields altogether.
36 [(2015) 4 SCC 421]
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - Dr. Tulzapurkar has submitted that PPL and Novex have
relied upon decisions in support of their contention that absurd or
unintended results of interpretation should be avoided. In the
instant case, there is no ambiguity in the language of Section 33(1).
There is no absurdity or unintended consequence by adhering to the
plain meaning of Section 33(1). - Dr. Tulzapurkar has submitted that constant refrain of
PPL and Novex was that giving literal interpretation to Section 33(1)
would lead to “effacement” of Section 30 and take away the right of
an owner to monetise his copyright is completely incorrect. - Dr. Tulzapurkar has submitted that Section 33 does not
take away an owner’s right to license for commercial purposes. All
that Section 33 postulates is that the business of licensing should be
carried out in a regulated manner by registration under the
Copyright Act. If an owner wishes to carry on business, he has to
either be registered as a copyright society himself or must carry on
the activity through a copyright society. Quite contrary to the
Plaintiffs’ submission, Section 33(1) would be effaced if the
Plaintiffs’ submissions are accepted. Since only an owner can issue
licenses, exclusion of an owner from its purview would render
Section 33(1) completely meaningless and redundant. - Dr. Tulzapurkar has submitted that the First Proviso to
Section 33(1) does not exempt PPL and Novex from the prohibition
of Section 33(1). Apart from claiming to be owners, PPL and Novex
have not satisfied the conditions of the Proviso viz. (i) Person is an
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owner of Copyright; ii) Person is acting in his ‘individual capacity’;
iii) Person grants licenses in respect of his “own works”; iv) the grant
is “consistent with his obligations as a member of the registered
society”. - Dr. Tulzapurkar has placed reliance upon the decision of
the Supreme Court in “Dwarka Prasad vs. Dwarkadas Saraf”
37
wherein it is held that a proviso does not travel beyond the main
provision. Further, in “Delhi Metro Rail Corporation Limited vs.
Tarun Pal Singh and Ors”
38 the Supreme Court went on to explain
that a proviso cannot be interpreted as stating a general rule. He has
submitted that there is nothing exceptional in the language or
scheme of Section 33(1) or the first proviso to suggest that the
proviso warrants a deviation from the general rule of interpretation.
It cannot therefore be construed as creating an independent right in
favour of the Plaintiff beyond the main enacting section. - Mr. Tulzapurkar submitted that it is the contention of PPL
and Novex that Section 33(1) is not a prohibition at all and that
copyright facilities were merely a facility and option created for the
benefit of owners. They have further contended that the 1994
Amendments to the Copyright Act introduced the concept of
copyright societies for the first time as facility for owners by enacting
Section 33(1). These contentions are plainly incorrect. He has
submitted that copyright Societies existed long before the 1994
Amendment. In fact, PPL was founded in 1941 and has been
37 [(1976) 1 SCC 128]
38 [(2018) 14 SCC 161]
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carrying on the same business ever since. The facility of collective
management was always available to owners even prior to 1994. Till
1994, there was no regulation on the business of licensing. Section
33(1) that was introduced by the 1994 Amendment brought
copyright societies within the regulatory purview and mandated that
the business of licensing should only be carried out through a
registered entity. He has submitted that the material relied upon
through the course of the hearing including the Supreme Court’s
decision in “Entertainment Network”
39, the Parliamentary Debates
and extracts from Copinger make it amply clear that the object of
copyright societies is not just to promote rights of owners but to
balance it with public interest by protecting the interests of users. - Dr. Tulzapurkar has submitted that the contention of PPL
and Novex that copyright societies are “agencies” or administrators
of rights does not take that case any further. The decision of the
Supreme Court’s in “Entertainment Network and Delhi High Court’s
decision in Lizard Lounge” (Supra) relied upon by PPL and Novex in
this context deal with the question whether business of licensing can
be carried out by an owner without registration. Further, Section 33
requires a particular activity, i.e., business of licensing, to be done
only by regulated entity/through a regulated entity. - Dr. Tulzapurkar has submitted that the contention of PPL
and Novex that the authorization granted to a copyright society can
be withdrawn by an owner under Section 34(1)(b) would suggest
that it is not mandatory for an owner to carry on business only
39 [(2008) 13 SCC 30]
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through a society ought to be rejected. All that Section 34(1)(b) says
is that an owner is not perpetually bound to be a member of a
copyright society and the section enables him to withdraw from a
collective management system should he choose to. This is a
voluntary act. Once he withdraws, he is in the same position as any
other person who is not a member of a copyright society. He can
exercise all rights under Section 14 and also issue a license under
Section 30 in an individual capacity. But he cannot carry on the
business of licensing. If he wishes to recommence the business of
licensing, he has to once again join a registered copyright society. - Dr. Tulzapurkar has submitted that argument canvassed
by PPL and Novex was that Section 31 provides for compulsory
licensing. Thus, there is no need to regulate owners who carry on
the business of licensing by requiring them to register as copyright
societies is wholly fallacious and an incorrect reading of Section 31.
Compulsory licensing is a completely different concept from
regulation of the business of licensing carried on by copyright
societies. He has submitted that Section 31 (1) (a) does not allow a
user to challenge a Tarriff Scheme, whereas under Section 33 A this
is allowed to a user. Further under Section 31, compulsory license
can only be granted to a person whom the board/court finds
“qualified” to receive a license. There is no such restriction under
Section 33A. A decision for compulsory licensing under Section 31
creates a right in rem only in favour of the complainant/prospective
licensee. On the other hand, an appeal under Section 33A results in
modification of the Tariff Scheme for the public at large. Merely
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because the Copyright Act provides two remedies for two different
scenarios, it cannot mean that one of the remedies available in law
should be given a complete go-by to. - Dr. Tulzapurkar has submitted that there is no valid
assignment in favour of the PPL and Novex and thus this cannot be
the basis for a suit filed by the Plaintiffs in their capacity as
assignees. - Dr. Tulzapurkar has submitted that the argument of PPL
and Novex is that the second proviso to Section 33(1) uses the word
‘business’ and applies only to owners of underlying works. The
consequence must be that owners of sound recordings such as PPL
and Novex are entitled to carry on business without regulation. - Dr. Tulzapurkar has submitted that this argument is
highly flawed. He has submitted that the second proviso is of no
relevance to the present matter as it only applies to underlying
works incorporated in films or sound recordings. Sound recordings,
that are the subject matter of the present dispute, are directly
covered by the main enacting provision, i.e., Section 33(1) which
refers to “any work in which copyright subsists”. Thus, the
prohibition against owners of sound recordings from carrying on
business except through a copyright society can be found in the main
section itself without any reference to the second proviso. - Dr. Tulzapurkar has submitted that the main section
33(1) and the First Proviso have been in the statute since the 1994
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Amendments. The Second Proviso was brought in only in 2012. This
is relevant because the 2012 Amendment Act also amended Section
18(1) and added provisos therein which prohibited authors of
underlying works from assigning or waiving the right to receive
royalties except to their legal heirs or copyright societies. Thus, it
was necessary to make corresponding clarificatory changes to
Section 33(1). - Dr. Tulzapurkar has placed reliance upon the decision of
the Madras High Court in “Novex Communications (P) Ltd. Vs DXC
Technology (P) Ltd”. (Supra). He has submitted that the Madras
High Court extensively considered all issues relating to Section 33
including the arguments raised by the Plaintiffs in the instant matter.
He has submitted that the Madras High Court has correctly holds
that Section 33 distinguishes between granting licenses in an
individual capacity and carrying on the business of licensing. The
Court holds that “once the grant of license moves from the owner in
his individual capacity and transcends into the realm of a business”
Section 33(1) applies. On this basis, the Court concluded that since
Novex was statutorily barred from issuing licenses, the very
substratum for the relief sought by Novex must crumble like a pack
of cards. - Dr. Tulzapurkar has submitted that this Court be pleased
to answer the aforementioned issue in favour of Defendants and
dismiss the Plaintiffs’ Interim Applications.
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - Mr. Hiren Kamod and Mr. Amit Jamsandekar, amongst
other Counsel have made submissions for the Defendants in their
respective Suits which are in support of the submissions of Dr.
Tulzapurkar, and in line with his submission. - Mr. Rajiv Narula has made submissions on behalf of the
Defendants in Commercial Notice of Motion No. 331 of 2019 in
Commercial Suit No. 117 of 2019. He has supported the submissions
of Dr. Tulzapurkar on interpretation of the relevant provisions of the
Copyright Act including Section 33 and its Proviso. He has placed
reliance upon the legislative debate which had also been relied upon
by the Madras High Court in “Novex Communications Vs. DXC
Technology Pvt. Ltd”. (supra). He has in particular has placed
reliance upon Paragraph Nos. 38 to 40 and 42 of the said judgment.
He has also referred to the 227th Report on Copyright (Amendment)
Bill, 2010 by the Parliamentary Committee. - Mr. Narula has submitted that in interpreting any statute,
the role of the Court is to give effect to the will of the legislature.
Where ambiguities exist, the Courts, no doubt, have the power to
take recourse to external and internal aids to construe a provision in
line with the intention of the legislature. Having examined the
background leading to the Copyright (Amendment) Act, 2012, in
view of Section 33(1) and its second proviso, the business of
granting or issuing licenses in respect of any work in which
copyright subsists, can be undertaken only through a copyright
society registered under Section 33(3) of the Act.
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - Mr. Narula has submitted that the second Proviso to
Section 33(1) and proviso to Section 33 (3A), being the
consequence and effect of the amendments to Section 17, 18 and 19
read with Section 30A, provides that the business of issuing or
granting licence (being collection and distribution) of sound
recording or cinematograph film, which comprises of the nonassignable and non-waivable rights in literary and musical work
“shall be carried out only through a copyright society duly registered
under this Act”. - Mr. Narula has submitted that the legislative intent to
remove the basis of the Supreme Court Judgment in “Indian
Performing Rights Society vs. Eastern India Motion Pictures
Association”
40 and provide independent and non-assignable and nonwaivable right of the authors can be best understood from four
paragraphs of the Report of the Standing Committee, 227th Report
on Copyright ( Amendment) Bill, 2010. These are paragraphs 9.14
to 9.16 and 9.18 of the Report. - Mr. Narula has thereafter referred to the Copyright
(Second Amendment) Bill, 1992 introduced in Loksabha is on 16th
July 1992. He has in this context referred to the statement of objects
and reasons and the Notes on Clauses appended to the 1992 Bill
which clearly shows the intent of 1992 Bill. This was revised and
modified by the Legislature before the enactment of the 1994
Amendment. He has submitted that it is important to note that
Section 33(1) as proposed in the 1992 Bill did not contain the 1st
40 [(1997) 2 SCC 820]
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proviso to Section 33(1). The same was introduced subsequently.
Therefore, it is obvious that the legislative intent initially was to
impose a complete prohibition on any person or association to carry
on the business of issuing or granting license except in accordance to
the registration granted under Section 33(3) of the Act. - Mr. Narula has submitted that the insertion of the
definition “copyright society” and “Chapter VIII-Copyright Society”
and the deleting the term “performing rights society” is reflected
from 1992 Bill. This was in order to widen the scope of collective
administration consistent with Clause 11 of the Bill 1992 Bill. He has
referred to Clause 2 of the Notes on Clauses of the 1992 Bill in this
context. Therefore, the copyright society was not only for the
benefits of authors and owners, but also for the general public/users
(like the defendants) for whom it is not convenient to obtain
licenses. - Mr. Narula has joined in the submission of Dr.
Tulzapurkar that Novex and PPL have no right to maintain the
present suits. - Mr. P. Shenoy, learned counsel for the Defendant in
Commercial Suit No. 37362 of 2022, has supported the submissions
of Dr. Tulzapur and has relied upon the ‘Mischief Rule’ of Statutory
Interpretation, which has also been highlighted by Mr. Khambata in
his submissions on behalf of Novex. He has also referred to the
functions associated with the business of “Collective Administration
of Copyright” and has submitted that what PPL did when they were
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registered as a copyright society and what they continue to do today
(when not registered as a Copyright Society), through the artifice of
taking limited partial assignments, is the same. He has referred to
“Copinger and Skone James” (supra) on Copyright, which articulates
the difference between “Individual Exercise of Rights” and
“Collective Administration of Rights”. He has submitted that an
“Individual Exercise of Rights” is where each rightholder of
copyright enters into agreements with prospective users of his work
without “banding together” with other rightholders. Moreover, when
it comes to certain categories of copyright, individual right holders
may “band together to exercise rights on a Collective basis” This
would involve all the individual rightholders pooling in their
individual works to create a common repertoire of works in a single
entity, which repertoire is then provided to a prospective user
through that single entity. Any entity which manages this repertoire
of works pooled together by individual rightholders, whether
through assignment of ownership, licensing or agency in common
parlance is considered to be a “collecting society” or a “licensing
body”, - Mr. Shenoy has submitted that Section 33(1) of the
Copyright Act provides that no person or association of persons shall
“commence or, carry on the business of issuing or granting licenses”.
It is necessary for this Court to give meaning to what is meant by the
“business of issuing or granting licenses”.He has submitted that these
words are used by the Legislature to mean the “Collective
Administration of Copyright”. The same is borne out of the
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statement and objects and reasons of the Copyright (Amendment)
Act, 1992 as well as Clause 11 of Notes on Clause. Further, the title/
heading of Chapter VII is “Copyright Societies”. - Mr. Shenoy has also joined in the submission of Dr.
Tulzapurkar and other counsel for Defendants in submitting that the
Plaintiffs have no right to maintain the present suit and that this
Court dismiss the Plaintiffs Interim Application. - Having considered the submissions, for determining the
issue that arises in the above suits viz. whether the plaintiff is
entitled to seek reliefs sought for in the plaint without being
registered as a copyright society under section 33(1) of the Act, it
would be necessary to refer to certain provisions of the Act. In the
present case, that PPL and Novex have been partially assigned the
copyright under the Sound Recording Agreements i.e. to
communicate the sound recordings to the public. - Section 14 of the Act defines a copyright to mean the
exclusive right to reproduce a literary, dramatic or musical work in
any material form including storing by electronic means; to make
copies of such a work; to perform it in public and in the case of a
sound recording it includes the right to sell or give on commercial
rentals or to communicate the sound recording to the public.
Further, ‘Owner’ of Copyright is provided in Chapter IV of the Act. As
submitted by Mr. Khambata, Ownership of copyright can be acquired
in 4 broad ways including through an assignment under Sections 18
& 19 of the Act which is relevant in the present case. These confer
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full and absolute ownership on the author/owner/assignee, as the
case may be. - Further Section 18(2) of the Act provides as under :
“where the assignee of a copyright becomes entitled
to any right comprised in the copyright, the assignee
as respects the rights so assigned, and the assignor as
respects the rights not assigned, shall be treated for
the purposes of this Act as the owner of copyright
and the provisions of this Act shall have effect
accordingly”. - Whereas Section 18 (1) of the Act specifically
recognizes the owner’s right to assign his copyright either
wholly or partially, to any person. This is a substantive right
which has been provided to an owner under the Act and can
be exercised without restrictions except as provided in the
section. - Thus, in my view a partial assignment created as in
the present case in favour of PPL and Novex i.e. to
communicate sound recording to the public, to the extent of
the right so created, the assignee is an ‘owner’ of the copyright
in the work.
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - PPL and Novex as assignees/owners of copyright
license their work under section 30 of the Act. This Section
falls under Chapter VI of the Act and reads as under:
“30. Licences by owners of copyright.:-The
owner of the copyright in any existing work or
the prospective owner of the copyright in any
future work may grant any interest in the right
by licence in writing by him or by his duly
authorised agent:
Provided that in the case of a licence
relating to copyright in any future work, the
licence shall take effect only when the work
comes into existence.
Explanation.— Where a person to
whom a licence relating to copyright in any
future work is granted under this section dies
before the work comes into existence, his
legal representatives shall, in the absence of
any provision to the contrary in the licence,
be entitled to the benefit of the licence”. - Thus, Section 30 of the Act is the source,
which gives an "owner" of a copyright who may be an
assignee, the power to grant any interest in the
copyright by license. Further, Section 30 also
specifically empowers a "duly authorized agent" of the
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owner, to grant license. Thus, it follows that PPL and
Novex as owners/assignees have the power to grant
any interest in the copyright by license which would
include the interest of communicating the sound
recordings to the public. - Now turning to the scope and object of the
1994 Amendment which added Chapter VII and in
particular sections 33 to 36 in the Act. Clause 11 of the
Notes on Clauses reads as follows:
“This clause seeks to substitute new
provisions for Chapter VII to make provision
for copyright societies in respect of any kind
of right (and not merely “performer’s rights”)
and to make adequate general provision for
the registration and management of such
societies in the interests both of authors and
of other copyright owners for whom it would
be impractical or uneconomical to licence the
use of their work individually to all users,…” - Thus, from a reading of Clause 11 of the Notes on
Clauses Sections 33 to 36 have been introduced as part of Chapter
VII for promoting the collective administration of rights through
copyright societies, both for the benefit of the owner as well as the
general public. These societies, on an “authorization” from the
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owners could administer rights that were either licensed and/or
assigned to them. A copyright Society fundamentally operates to
administer rights in respect of works that belong to “others”. - In my view, by its very nature, a copyright society may
wear two hats i.e. (i) as an authorized agent and (ii) as an assignee.
It administers the rights of “owners” by operating as an agent. It is
necessary to note that under section 34 of the Act and in particular
Section 34 (1) (b) it is provided that an owner will have the right to
withdraw authorization given to the copyright society. This also
shows that an author or other owner/assignee does not have to carry
on the business of licensing his works only through a copyright
society. Since, once an owner withdraws its authorization from a
copyright society, the owner can independently exercise his rights
under Section 30 of the Act to grant licenses as he deems
appropriate. It could never have been the intention of the legislature
that once an author/owner withdraws the authorization from a
copyright society then that work cannot be licensed by anyone
especially an owner. Such an interpretation would undermine the
public interest in making available the copyrighted work to members
of the public. In any event the provisions of Section 31, 31A-D would
continue to operate to bind all owners to grant compulsory and
statutory licenses even after withdrawal of authorization under
Section 34(1)(b). - Thus it is clear that the 1994 Amendment which
introduced these provisions was brought in to protect and facilitate
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the exercise of “owner’s” rights, not to restrict or diminish them in
any way. - The other relevant provision namely Section 34(3) of the
Act clarifies that a copyright society is licensing the works of an
“owner” under section 30. This means that a copyright society is
licensing the works of the “owner” as a duly authorized agent under
Section 30. Therefore, this is not a new right created in favour of a
copyright society independent of the owner or independent of it
being a duly authorized agent. Section 35(1) of the Act provides that
“Every copyright society shall be subject to the collective control of
the owners of rights under this Act whose rights it administers … ”.
Thus, both Sections 34 and 35 draw a clear distinction between the
author/ owner of the right on the one hand and the administrator of
that right on the other (i.e. the copyright society). - The decision relied upon by Mr. Khambata on behalf of
Novex namely “Entertainment Network India Ltd. v. Super Cassette
Industries Ltd” (Supra) is apposite. The Supreme Court has held that
Chapter VII was incorporated into the Act so as to enable an author
to commercially exploit his intellectual property through a Copyright
Society. The Supreme Court holds that as per the Section 34 of the
Act, a Copyright Society is a virtual agent authorized to act on behalf
of the owner. Paragraph 66 of the said decision reads as under:
“66. …It may, however, be of some importance to
note that Chapter VII deals with Copyright society,
the concept whereof was incorporated in the Act so
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as to enable an author to commercially exploit his
intellectual property by a widespread dispersal in a
regulated manner. It for all intent and purport steps
into the shoes of the author. The society grants
license on behalf of the author, it files litigation on
his behalf, both for the purpose of enforcement as
also protection of the enforcement of his right. It not
only pays royalty to the author but is entitled to
distribute the amount collected by it amongst its
members. Section 34 providing for administration of
rights of owners by a copyright society for all intent
and purport creates a virtual agency so as to enable
the society to act on behalf of the owner…”. - Thus, this decision of the Supreme Court makes it
clear that Chapter VII does not take away the rights of the
author/ owner. It only gives a choice to the author/ owner to
either exploit its copyright on its own or to exploit its copyright
through a Copyright Society. The idea of a Copyright Society is
to assist the owner and not take away rights from an owner. - This is further made clear by Delhi High Court in
“Phonographic Performance Ltd. vs Lizard Lounge & Ors”.
(supra) which has also been relied upon by Mr. Khambata on
behalf of Novex. The Delhi High Court has held thus:
“the owner continues to simultaneously have rights to
deal with his Copyright in the work…
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25..…The Copyright Society is an agent appointed
under the agreement by the owner of the Copyright
and specific powers have been conferred on the
agent to institute legal proceedings. However, this
does not denuding the author of its own individual
rights”. - The function of a Copyright Society has been
highlighted by Copinger at Page 1540 which has been relied
upon by Mr. Khambata for Novex, wherein copyright society is
referred to as a collecting society. Collecting societies provide a
service to enable rights owners to enforce and administer certain
of their copyrights effectively and cheaply, and secondly to
provide a service to users by facilitating access to copyright
works and making it possible for users to comply with their
obligations under the law to obtain licences for the use of
copyright works. Advantages of collecting societies has also been
mentioned. Collecting societies are practically, economically and
legally both viable and essential: Practically, because copyright
owners cannot be in an indefinite number of places at the same
time exercising individual rights. Further, “collecting
administration bodies provide the best available mechanism for
licensing and administering copyrights and is to be encouraged
wherever individual licensing is not practicable. They represent
the best means of protecting the rights owners' interests”,
enabling copyright owners to license and monitor the use of
their works, to collect and distribute together and to bring
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actions for infringement. At the same time, they facilitate access
to copyright protected works for the consumer and minimize the
number of persons with whom users must negotiate licensing
contracts. - I am of the considered view that Section 33 (1) of the
Act cannot curtail the power of the owner to grant any interest
in the copyright by license under Section 30 of the Act. This
provision has not at all being denuded by the 1994 Amendment,
which has brought in Chapter VII in the Act. - I do not find any merit in the interpretation placed by
the Defendant that “no person” in Section 33(1) includes an
“owner” of copyright and therefore even an “owner” of copyright
cannot commence or carry on the business of granting copyright
licenses. If such interpretation is accepted, Section 33(1) of the
Act would take way the power of owner and / or the right of the
owner to grant any interest in the copyright by license. This
would emasculate right of the owner under Section 30. This was
not contemplated by the Parliament by way of the 1994
Amendment Act. In my view, Chapter VII which deals with
copyright society is operating in a different field than that of
Chapter VI which is the source for granting of licenses by the
owner of copyright. - It is a settled rule of Interpretation that two
apparently conflicting provisions operating in two different
fields should be reconciled by restricting each to its own object
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or subject. This has been expressly held by Supreme Court in
“K.M. Nanavati v. State of Bombay”
41.
I find much merit in the
interpretation placed by counsel on behalf of PPL and Novex
that the prohibition as contemplated under Section 33(1) is on
carrying on business of licensing by a person or association of
persons in its own name for works in which “others”. hold
copyright. This has also held by this Court in Leopold Cafe and
Stores and Anr. (supra). Thus in other words carry on “business’
of granting licenses can be authorised to an agent such as a
copyright society under Section 30 read with Section 18, 19 and
34 of the Act. - Further, the heading of Section 33 is “Registration of
copyright society” and which could only mean that where a
copyright society wants to carry on the business of issuing
licenses on behalf of “others”, then it must do so as per the
provisions of Section 33. This is all that the section
contemplates. It cannot purport to curtail the owner’s right to
license given under Section 30 falling in Chapter VI of the Act. - The Interpretation placed on “business” in Section
33(1) of the Act by learned counsel on behalf of the Defendants
by referring to Rule 2(c) of the Copyright Rules, 2013 which
defines ‘Copyright Business’ is in my view misconceived. This
definition is in wide terms although it also references subsection (3) of Section 34, which deals with functions that a
copyright society may perform qua works of others. However, if
41 AIR 1961 SC 112 (Para 77(1)) (Sr. No. 41/ Page 737, Volume IV of Defendant’s Compilation).
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the term “business” is given the wide meaning, then, there
would necessarily be a conflict between Sections 30 and 33 of
the Act. The definition in Rule 2(c) in any event applies only to
the rules and it cannot be applied to interpret Section 33(1), a
provision of the primary statute and one that came 19 years
before Rule 2(c). Further, the Rules are a piece of subordinate
legislation. They cannot be considered to control the provisions
of the Act especially if they cause conflict or absurdity in reading
of the substantive provision of the Act. - Much has been said by the counsel for the
Defendants that Section 33 of the Act is a later provision and
prevails over Section 30 of the Act. I find in “K.M. Nanavati’
(supra), the Supreme Court has treated the rule of the later
provision as one amongst a basket of rules which must operate
together with other rules and which moderate and temper each
other. Further, the Supreme Court has held that if there is a
conflict between two provisions of a statute then it has to be
determined which is the leading provision and which is the
subordinate provision and which provision must give way to the
other. I find that from the two provision viz. Sections 30 and
33(1) of the Act, Section 30 is the leading provision which is the
source of power i.e. licensing rights conferred rights upon an
owner . Section 33(1) does not deal with owner’s right of
licensing.
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - Although, there have been arguments on the First
Proviso and Second Proviso to Section 33(1) of the Act as well
as reference to the legislation of 2012 Act as well as
parliamentary debates and Speeches on this legislation, these
provisos are inapplicable to the present case. The Second Proviso
is confined to authors of underlying works which requires
protection and thus inapplicable to the present case which
concerns the owner of sound recordings. The Second Proviso to
Section 33(1) in fact militates against the interpretation sought
to be propounded on behalf of the Defendants. By amending
section 33(1) in 2012 i.e. by adding the second proviso it would
show that the Parliament itself did not contemplate that Section
33(1) barred every owner of a copyright from carrying on the
business of licensing his works. Thus, the business of issuing or
granting licence in respect of literary, dramatic, musical and
artistic works incorporated in a cinematograph films or sound
recordings shall be carried out only through a copyright society
duly registered under the Act. Hence, it cannot be accepted that
the Second Proviso to Section 33(1) of the Act is clarificatory. - The Madras High Court in “Novex Communications
vs DXC Technology Pvt Ltd”. (supra) has in my view overlooked
Section 30 of the Act where the owner has a right to grant any
interest in the copyright by way of license. The Madras High
Court has applied the second proviso of section 33(1) of the Act
to the right to communicate the sound recordings to the public,
although such right does not fall within that proviso. The second
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proviso as mentioned is confined to underlying works. Further,
the Madras High Court has held that Novex is not entitled to
issue licenses which according to the Court falls into the second
proviso after considering legislative history and speeches in
parliament. However, no reason has been provided as to how the
licenses in respect of sound recording is covered by the second
proviso to section 33(1). - Thus in my view the Madras High Court has not
considered Section 33(1) in light of other provisions of the Act
namely Section 30 read with Section 18 and 30 of the Act which
enables the Plaintiff- Novex as owner to grant licenses to the
public. - In my considered view carrying on business of
granting licences cannot be excluded from section 30 of the Act,
particularly when such granting of licenses is by the owner of
the copyright. The word “business” would include the grant of
Licenses. If the interpretation of the Defendants on business is to
be accepted then in that case 99% of the ownership rights would
be taken away and the only right left with the owners would be
to license its rights for philanthropy. Thus, this interpretation of
the Defendant cannot be accepted. - The decisions on business relied upon by the Counsel
on both sides only support the above view.
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - The first proviso of Section 33(1) of the Act only
recognizes the right of an owner to grant licenses even after
such owner becomes a member of a registered Copyright
Society. The first proviso has nothing to do with granting of
Licenses by an owner of copyright under section 30 of the Act. If
a member of the copyright society can grant license surely a
non-member cannot be prevented from licensing his own works.
Thus, the first proviso to Section 33(1) cannot in any manner
prevent a non member from exercising his rights under Section
30 of the Act. - It appears from the argument of Dr. Tulzapurkar on
behalf of Defendant that a distinction has been drawn between
the granting of individual licenses by the owner and the carrying
on of business of granting licenses by the owner which makes
section 33 (1) applicable. I find no merit in this argument,
particularly in view of aforementioned findings that Section 30
of the Act confers the power on the owner to grant any interest
in the copyright by license which in my view would encompass
an owner carrying on business of granting licenses in respect of
works in which he has copyright. Thus, there would be no fetter
on the owners rights under Section 30 of the Act by Section
33(1) of the Act which falls under a separate chapter. Thus, in
my view it is not necessary for PPL and Novex as
owners/assignees of copyright to be registered as copyright
societies for carrying on the business of granting licenses of their
works.
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Varsha COMP-264-2022 AND COMP-363-2019 final.doc - Merely because PPL was at one time registered as a
copyright society will make no difference to the above findings
as PPL is granting Licenses as an owner and thus entitled under
Section 30 of the Act to grant its interest in the copyright by
license. Further, it will not make any difference that Novex is
carrying on the business of granting licenses of their works as
there is no restriction placed on an owner to grant any interest
in the copyright by License. Thus, in my view the power under
Section 30 to grant license by an owner has in no manner been
denuded by section 33(1) of the Act. Accordingly, PPL and
Novex as owners of copyright in respect of their works are
entitled to file the present suits and seek reliefs sought for
therein. - The above findings will also apply to those Suits
where PPL and /or Novex are exclusive Licensees as Section 54
of the copyright Act, provides that an ‘owner of copyright’
includes an ‘exclusive licensee’. - I further find no merit in the submission of Dr.
Tulzapurkar on behalf of Defendant that the cause of action in
the above suits is on an illegal act or amounts to transgression of
a positive law as the plaintiffs have been generally assigned the
business of granting licenses which activity they seek protection
without having themselves registered as copyright society and
thus violative of the statutory protection in Section 33(1) of the
Act. The decisions relied upon on the well settled principle of of
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ex turpi causa non oritur actio or ex dolo malo non oritur actio
are inapplicable in the present case. This is in view of my finding
that PPL and Novex have the power as owners to grant interest
in the copyright by license under section 30 of the Act
irrespective of whether they are carrying on the business of
granting licenses or not. Further, there is no bar under section
33(1) of the Act from an owner carrying on the business of
licensing, or collecting license fees. Accordingly, I do not find
that the Assignment Agreements and/or Exclusive License
Agreements are illegal as contended on behalf of Defendants. - Prima facie, I find that there is much merit in the
submission on behalf of PPL and Novex that the above suits have
been filed against the Defendants who are rank infringes as they
have failed to obtain a license in respect of the works which they
are exploiting. The present suits concern whether PPL and
Novex are exclusive owners of the copyright and whether they
have a right to prevent infringement of their exclusive copyright.
This in my view would be irrespective of whether or not these is
a bar under Section 33(1) of the Act preventing them from
carrying on business of issuing licenses in respect of their
copyright. In the event it is held that PPL and Novex are
exclusive owners of the copyright then it would follow that the
Defendants have to be prevented from infringing the copyright. - Accordingly, the issue as to whether PPL and Novex
as Plaintiffs in the above suits are entitled to seek reliefs as
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sought for in the plaint without being registered as a copyright
society under section 33(1) of the Act is answered in the
affirmative.
(R.I. CHAGLA, J)
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