Sikkim High Court
M/S Phonographic Performance Ltd vs Tara Palace Hotel And Others on 28 November, 2019
Author: Meenakshi Madan Rai
Bench: Meenakshi Madan Rai
THE HIGH COURT OF SIKKIM : GANGTOK
(Civil Appellate Jurisdiction)
DATED : 28.11.2019
------------------------------------------------------------------------------------------------------------
SINGLE BENCH : THE HON'BLE MRS. JUSTICE MEENAKSHI MADAN RAI, JUDGE
------------------------------------------------------------------------------------------------------------
RFA No.08 of 2017
Appellant : M/s. Phonographic Performance Ltd.
versus
Respondents : Tara Palace Hotel and Others
Appeal under Order XLI Rules 1 and 2
of the Code of Civil Procedure, 1908
--------------------------------------------------------------------------------------
Appearance
Mr. Sayantan Basu, Mr. Sudesh Joshi and Mr. Tanmoy Roy,
Advocates for the Appellant.
Mr. K.T. Bhutia, Senior Advocate with Ms. Tashi Doma,
Advocate, for the Respondent No.1.
None present for Respondents No. 3 and 4.
--------------------------------------------------------------------------------------
And
RFA No.09 of 2017
Appellant : M/s. Phonographic Performance Ltd.
versus
Respondents : Arthur's Plur and Others
Appeal under Order XLI Rules 1 and 2
of the Code of Civil Procedure, 1908
--------------------------------------------------------------------------------------
Appearance
Mr. Sayantan Basu, Mr. Sudesh Joshi and Mr. Tanmoy Roy,
Advocates for the Appellant.
Mr. K.T. Bhutia, Senior Advocate with Ms. Tashi Doma,
Advocate, for Respondents No.1 and 2.
Mr. Ajay Rathi and Mr. Tashi Norbu Basi, Advocates for
Respondent No.3.
None present for Respondent No. 4.
--------------------------------------------------------------------------------------
RFA No.08 of 2017 2
M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others
And
RFA No.09 of 2017
M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others
JUDGMENT
Meenakshi Madan Rai, J.
1. This common Judgment disposes of the assailed Orders, both dated 19.06.2017, in RFA No.08 of 2017 and RFA No.09 of 2017 arising out of IPR Suit No.2 of 2015 (M/s. Phonographic Performance Ltd. v. Tara Palace Hotel and Others) and IPR Suit No.1 of 2016 (M/s. Phonographic Performance Ltd. v. Arthur's Plur and Others) respectively, (hereinafter referred to as ―IPR Suit No.2‖ and ―IPR Suit No.1‖).
2. Before delving into a discussion on the merits of the instant Appeal, it is pertinent to mention here for clarity that in the impugned Order dated 19.06.2017, in IPR Suit No.2 the following applications came to be decided;
1. Order VII Rule 14(3) read with Section 151 of the Code of Civil Procedure, 1908 (hereinafter the ―CPC‖);
2. Order XXXIX Rule 2A read with Section 151 of the CPC;
3. Order VII Rule 11 of the CPC; and
4. Order XXXIX Rule 4 of the CPC, 1908.
(a) While dealing with the application under Order VII Rule 14(3) read with Section 151 of the CPC, the learned trial Court held in the impugned Order that, in view of the nature of the additional documents filed by the Appellant, they were necessary for effective adjudication of the case and allowed the additional documents to be filed.RFA No.08 of 2017 3
M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others
(b) While deciding the application under Order XXXIX Rule 2A read with Section 151 of the CPC filed by the Appellant against the Respondent No.1, for violation of injunction order dated 21.12.2015, it was observed that the Respondent No.1 had paid the Licence Fee to the Appellant and the application under Order XXXIX Rule 2A, read with Section 151 of the CPC not being pressed by the Appellant was disposed of accordingly.
(c) Considering the application under Order XXXIX Rule 4 of the CPC filed by the Respondent No.1, the learned trial Court took into consideration the discussions which had ensued in the application filed under Order VII Rule 11 of the CPC filed by the Respondent No.1 (which shall be discussed later hereinbelow) and observed that there was no necessity to pass any order in the said petition.
(d) It may relevantly be noted that the records reveal that an application was filed by the Appellant under Order XXXIX Rules 1 and 2 read with Section 151 of the CPC on 21.12.2015. Vide the Order dated 24.03.2016, the learned trial Court recorded inter alia that ―the Order dated 21.12.2015 stands confirmed" and the application was disposed of, however the final order did not make a mention of this application.
3. In IPR Suit No.1, the following applications were decided by the learned trial Court;
1. Order XXXIX Rule 2A read with Section 151 of the CPC;
2. Order VII Rule 11 of the CPC; and RFA No.08 of 2017 4 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others
3. Order XXXIX Rules 1 and 2 of the CPC, 1908.
(a) The learned trial Court while disposing of the application under Order XXXIX Rule 2A read with Section 151 of the CPC rejected it on grounds that the Appellant had failed to establish violation of the Order of injunction of the learned trial Court dated 07.03.2016.
(b) Although an application under Order XXXIX Rules 1 and 2 had been filed, however only the application under Order VII Rule 11 of the CPC was taken up for hearing. In the impugned Order, it was concluded that there was no necessity to pass any order on the petition filed by the Respondents No.1 and 2 under Order XXXIX Rules 1 and 2 of the CPC.
4. While considering the application under Order VII Rule 11 of the CPC in both IPR Suit No.2 and IPR Suit No.1, the learned trial Court took to discussing the provisions of Section 33 of the Copyright Act, 1957 (for short ―the Act‖) and observed that the contents of the Plaint and the documents filed by the Appellant establish that the Appellant was "conceived, incorporated and is carrying on the business of issuing and granting licences in respect of literary, dramatic, musical and artistic works incorporated in cinematograph films or sound recordings as contemplated under Section 33 of the Act.‖ That prior to the year 2013, the Appellant was registered as a copyright society under Section 33 of the Act and involved in the business of issuing and granting licences, however Annexure B of the Appellant's document clarified that the Appellant was not as RFA No.08 of 2017 5 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others of date registered under Section 33 of the Act and thereby concluded that the Appellant was not a copyright society as contemplated under Section 33 of the Act.
(a) Section 19, Section 30 and Section 30A of the Act were taken up together for discussion wherein it was observed that the Appellant was to have produced ownership documents. That, Annexure B a Deed of Partial and Limited Assignment of Rights in Sound Recordings is between Universal Music India Pvt. Ltd. and the Appellant, both registered under the Companies Act, 1956. That, the Appellant had averred that Universal Music India Pvt. Ltd. had assigned their rights to the Appellant and that Annexure E disclosed the owners of copyright of the sound recordings. However, it was observed that to maintain a Suit for infringement it was to be filed by the owner or the exclusive licensee of the copyright. If it is filed by the latter (as was the Appellant purportedly) then the owners of the copyright viz. Universal Music India Pvt. Ltd. was necessarily to be impleaded as Defendants, which the Appellant has failed to do, thereby failing to comply with the provisions of Section 61 of the Act. That, the Appellant has levelled allegations of infringement of copyright without material particulars or cogent evidence of such infringement and thereby concluded that the Suit was liable to be dismissed for not disclosing the cause of action and also for non-compliance of Section 61, Section 19 and Section 30A of the Act. The petitions under Order VII Rule 11 of the CPC came to be thus dismissed.
RFA No.08 of 2017 6
M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others
5. The Suits (supra) before the learned trial Court was for declaration, permanent injunction and consequential reliefs. The Appellant claimed to be the owner of the copyright in sound recordings having obtained exclusive assignment of copyright in the sound recordings from the assignors. Vide ―Annexure B‖ the Deed of Assignment with Universal Music India Pvt. Ltd., ―Annexure II to Schedule A of the Plaint‖ and ―Annexure E‖ this claim was sought to be buttressed. It was also averred that a list of more than 250 music labels have granted assignment to the Appellant and a list of the assignor music labels was available on its website. That, if the sound recordings so assigned are to be exploited by any user for commercial purposes, they can do so only on obtaining licence from the Appellant, who is entitled to issue or grant licences and collect Licence Fees from such users. That the Respondents No.1, 2 and 3 are communicating the sound recordings of the Appellant without obtaining such a valid licence in wilful infringement of copyright subsisting therein. The reliefs prayed for by the Appellant before the learned trial Court inter alia were as follows;
"(a) Declaration that the plaintiff is exclusively entitled to administer the copyright in respect of their and/or defendant no. 4's sound recordings and the defendants have no right to exploit/use the sound recordings as shown in Annexure-E without a valid license from the Plaintiff;
(b) A Decree of permanent injunction restraining the defendant nos. 1, 2 and 3 and their men, agents and assigns from communicating sound recordings, as shown in Annexure-E music video of the plaintiff without obtaining a licence from the plaintiff;
(c) A Decree of permanent injunction restraining the defendant nos. 1, 2 and 3 and their men, agents and assigns from infringing the copyright in the sound recordings, music RFA No.08 of 2017 7 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others video of the members of the plaintiff as shown in Annexure-
E without obtaining a license from the plaintiff; ..."
6.(a) Raising the argument before this Court that the rejection of the Plaint on grounds given in the Order was wholly perverse, it was contended by learned Counsel for the Appellant that despite allowing the application of the Appellant under Order VII Rule 14(3) of the CPC, wherein the Deed of Assignment executed between the relevant parties was accepted, the learned trial Court erroneously concluded that the Appellant was a Licensee. In fact the Deed of Assignment was executed by and between the Appellant and the erstwhile owners of the sound recordings, by virtue of which the Appellant stepped into the shoes of the original owners. That, an error emanated in rejecting the Plaint on the ground of Section 19 of the Act after the Deed of Assignment was taken on record and not declared to be null and void. The learned trial Court failed to take into consideration the list of sound recordings of the assignors which form part of Schedule A, and specifically mentions that past, present and future sound recording works owned by the Universal Music India Pvt. Ltd. are assigned to the Appellant. Reasoning that the Suit was filed in the manner of a quia timet action and/or apprehensive infringements to be committed by the Respondents, it was canvassed that the learned trial Court erroneously concluded that insufficient evidence was furnished in the Plaint to indicate infringement by the Respondents but failed to consider that documents accompanying the Plaint were to be tested at the time of trial. That, the impugned Order while RFA No.08 of 2017 8 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others alleging non-compliance by the Appellant of Section 30 of the Act is devoid of reasons.
(b) That, consideration was also not extended to the grievance of the Appellant pertaining to wrongful exploitation of the sound recordings by the Respondents despite relevant details having been disclosed in the documents relied upon by the Appellant. That, the Appellant as owner of the copyright was entitled to issue Licence to third parties if the said parties sought to exploit the sound recordings of the Appellant but sans Licence such exploitation would tantamount to infringement. Although notices were issued to the Respondents to obtain Licence for use of the assigned sound recordings, these were ignored and the learned trial Court paid scant attention to this aspect, nor did the Respondents undertake not to exploit the sound recordings of the Appellant. Drawing the attention of the Court to the verification clause in the application filed by the Respondent No.1 under Order VII Rule 11 of the CPC, it was submitted that it was verified by one Gauranga Dalal and not by the Respondent No.1, hence the application itself is defective.
(c) That, literary, dramatic, musical and artistic works are works which can be distinguished from a work of sound recording under Section 2(y)(iii) of the Act. That, Section 33 of the Act in effect restricts any agent or third party from issuing Licences for other copyright works without disclosing the name of the original author and/or owner of such copyright to prevent wrong appropriation of Licence Fees, however in the instant case RFA No.08 of 2017 9 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others such a question does not arise as the Appellant himself is the owner of the copyright and is claiming Licence Fees from the Respondents for exploiting and/or intending to exploit such sound recordings of the Appellant. The learned trial Court opined that the Appellant is not a Copyright Society as contemplated under Section 33 of the Act, when in fact this Section protects the rights of the owners of copyright including the sound recordings of which the Appellant is the owner and can exercise rights under Section 30 of the Act, therefore there was an inability to distinguish between Section 33 and Section 30 of the Act. The learned trial Court dealt with the matter as if it was that of a Licensee when in fact it pertains to an assignee. That, although Section 33 of the Act was discussed in the impugned Order, the learned trial Court did not dismiss the suit as being barred by law under Section 33 of the Act. As the Respondents failed to prefer any cross appeal against this observation, they cannot urge this issue in Appeal. It was also contended that without assigning reasons as to how Section 30A of the Act suffered from non-compliance, the Plaint was rejected. That the learned trial Court was also in error in dismissing the Suit for non-compliance of Section 61 of the Act since the Appellant is the owner by way of assignment thereby rendering nugatory the necessity of impleading the assignors. That apart, Respondent No.4 Sony Music Entertainment India Pvt. Ltd. has been made a party in terms of Section 61 of the Act as the said Company had only licensed its rights in sound recordings to the Appellant. RFA No.08 of 2017 10
M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others While asserting their ownership rights on the sound recordings as an assignee, reliance was placed on the provisions of Section 2(d)(v) of the Act as also Section 2 (uu), Section 2 (y)(iii), Section 13(1)(c), Section 17, Section 18 and Section 19 of the Act. These submissions were fortified by the ratio in Saregama Ltd. v. New Digital Media and Others 1 and International Confederation of Societies of Authors and Composers (ICSAC) V. Aditya Pandey and Others2 followed by the prayer that the impugned Order be set aside.
7. Learned Senior Counsel for the Respondent No.1, in vehement repudiation, raised the contention that the reasons for dismissal of the Suit under Order VII Rule 11 of the CPC was three pronged viz. the Suit did not disclose a cause of action; secondly, it was barred by Section 33 of the Act and thirdly by Section 61 of the Act in view of the non-joinder of the necessary parties being Universal Music India Pvt. Ltd. That, the reliefs prayed for by the Appellant before the learned trial Court are bereft of indications that there was an infringement by the Respondents, hence the reliefs prayed for cannot be granted. Referring to Section 19 of the Act, learned Senior Counsel contended that although the Appellant submits that the copyright of the works was assigned to them, however when one peruses Schedule A to the Plaint, it is clear that the details of the songs assigned to the Appellant has not been given. That, although Annexure E details the sound recordings, however it 1 2018 AIR CC 3171 (Cal) 2 (2017) 11 SCC 437 RFA No.08 of 2017 11 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others has not been signed by the assignor and the Schedule is blank and hence cannot be relied upon by the Appellant to establish its case. Thus, there is a clear non-compliance of Section 19(2) of the Act which requires that the assignment of copyright in any work shall identify such work and shall specify the rights assigned, the duration and territorial extent of such assignment. Referring to Section 30 of the Act, he put forth the argument that this Section requires that 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 or by his duly authorized agent, but the Appellant has no such rights. That the provisions of Section 33 of the Act which deals with registration of Copyright Society is to be considered along with Section 17 to Section 19 and Section 14(e)(iii) of the Act. That, a reading of the Sections supra would clearly indicate that the right granted to the Appellant is only under Section 14(e)(iii) of the Act viz. to communicate the sound recording, it does not authorize the Appellant to grant Licence which is reserved for the owner of the copyright and is to be done in his individual capacity as envisaged in the proviso to Section 33 of the Act. This emanates from the fact that the Appellant is not the original owner. The pleadings before the learned trial Court clearly indicate that prior to amendment of the Copyright Act, 1957, the Appellant was a Performing Rights Society and after the 2012 Amendment and consequent to the new Copyright Rules, the Appellant started working as a Company and has been RFA No.08 of 2017 12 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others fixing tariffs at random for use of the sound recordings. Section 51 of the Act provides for consequences when a copyright is infringed, therefore if the Appellant had a grievance of infringement of copyright, they ought to have brought an infringement Suit and not demanded money as made out in their prayers. That, by skillful drafting, the Appellant has avoided showing infringement but has actually brought a Suit for collection of Licence Fees. It was further submitted that the learned trial Court has correctly held that the owner ought to have been impleaded as a party, in the absence of which, the Suit was not maintainable, having failed to comply with the provisions of Section 61 of the Act as the Appellant is not the owner of the copyright. Consequently, the law prohibits the Appellant from licensing so the question of paying tariff to them for the sound recordings does not arise. Reliance was placed on Phonographic Performance Ltd. v. Hotel Gold Regency & Ors.3.
8. While placing arguments in IPR Suit No.1, learned Counsel Mr. Ajay Rathi and Mr. Tashi Norbu Basi for the Respondent No.3 submitted that in sum and substance they endorse and adopt the arguments canvassed by learned Senior Counsel Mr. K.T. Bhutia for the Respondents No.1 and 2.
9. The submissions of learned Counsel for the parties have been considered and all documents on record, the 3 AIR 2009 (Del) 11 RFA No.08 of 2017 13 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others impugned Order and the citations relied on by learned Counsel for the parties have been carefully perused.
10. The discontent of the Appellant pivots around the dismissal of their Suit under Order VII Rule 11 of the CPC on grounds of non-disclosure of cause of action and for non- compliance of Section 61, Section 19 and Section 30A of the Act. Hence, the limited question that falls for consideration of this Court is whether the impugned Orders can sustain.
11. Order VII Rule 11 of the CPC inter alia provides that the Plaint shall be rejected if it does not disclose a cause of action, is undervalued, insufficiently stamped or the Suit appears to be barred by law, where the Plaint is not filed in duplicate or for non-compliance of the provisions of Order VII Rule 9 of the CPC. In the instant matters the provisions nudged into service before the learned trial Court by the Respondents were under Order VII Rule 11 (a) of the CPC ‗failure to disclose cause of action' and Order VII Rule 11 (d) of the CPC ‗where the Suit appears to be barred by any law.' Appositely, what constitutes a cause of action may be mulled over. In A.B.C. Laminart Pvt. Ltd. and Another v. A.P. Agencies, Salem4 it was held as follows;
―12. A cause of action means every fact, which if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the court. In other words, it is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all the 4 (1989) 2 SCC 163 RFA No.08 of 2017 14 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others material facts on which it is founded. It does not comprise evidence necessary to prove such facts, but every fact necessary for the plaintiff to prove to enable him to obtain a decree. Everything which if not proved would give the defendant a right to immediate judgment must be part of the cause of action. But it has no relation whatever to the defence which may be set up by the defendant nor does it depend upon the character of the relief prayed for by the plaintiff.‖ In Saleem Bhai and Others v. State of Maharashtra and Others 5 the Hon'ble Supreme Court while considering the provisions of Order VII Rule 11 of the CPC, observed as under;
―9. A perusal of Order 7 Rule 11 CPC makes it clear that the relevant facts which need to be looked into for deciding an application thereunder are the averments in the plaint. The trial court can exercise the power under Order 7 Rule 11 CPC at any stage of the suit -- before registering the plaint or after issuing summons to the defendant at any time before the conclusion of the trial. For the purposes of deciding an application under clauses (a) and (d) of Rule 11 of Order 7 CPC, the averments in the plaint are germane; the pleas taken by the defendant in the written statement would be wholly irrelevant at that stage, ...‖
12. In this context, the observation of the learned trial Court is to the effect that for the purpose of obtaining a relief, the facts averred are to be stated and proved but not the evidence, consequently the Appellant's petition under Order VII Rule 14(3) of the CPC which requires the Plaintiff to produce documents on which the cause of action is based, was allowed. Thus, Annexure E came to be filed. Admittedly, ―Annexure B‖ i.e. the purported Deed of Partial and Limited Assignment of Rights in Sound Recordings, executed between the Appellant and Universal Music India Pvt. Ltd. and ―Annexure II to Schedule A‖ of the Plaint had already been filed. The unequivocal claim of the 5 (2003) 1 SCC 557 RFA No.08 of 2017 15 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others Appellant in the Suits filed is that it is the ―owner‖ of the copyright of the sound recordings by way of assignment vide the documents supra, which are being exploited by the Respondents without licence from the Appellant. The claim of ownership by way of assignment is sought to be substantiated by the documents enumerated supra. They do not claim to be licensees nor do they claim to be agents on behalf of any other copyright owners, hence their unflinching claim that as owners of the copyright they can take steps in terms of the Act while issuing or granting licences and connected matters thereto. As the Appellant does not hold out any claims of being a copyright society as contemplated under Section 33 of the Act, it thereby contends that the prohibitions engrafted therein are not applicable to it.
13. ―Assignment‖ as per Black's Dictionary, Tenth Edition, Page 142 is as follows;
―1. The transfer of rights or property <assignment of stock options>. 2. The rights or property so transferred. ―An assignment is a transfer or setting over of property, or of some right or interest therein, from one person to another; the term denoting not only the act of transfer, but also the instrument by which it is effected. In these senses the word is variously applied in law.‖ Alexander M. Burrill, A Treatise on the Law and Practice of Voluntary Assignments for the Benefit of Creditors 1, at 1 (James Avery Webb ed., 6th ed. 1894). ...‖ An ―assignee,‖ (ibid supra) is defined as under;
―1. One to whom property rights or powers are transferred by another. Use of the term is so widespread that it is difficult to ascribe positive meaning to it with any specificity. Courts recognize the protean nature of the term and are therefore often forced to look to the intent of the assignor and assignee in making the assignment - rather RFA No.08 of 2017 16 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others than to the formality of the use of the term assignee - in defining rights and responsibilities. - Also termed assign.‖
14. In light of the above observations of the Hon'ble Supreme Court in the context of cause of action and discussions which have emanated supra we may usefully refer to Section 18 of the Act which inter alia provides that the owner of the copyright in an existing work or the prospective owner of the copyright in a future work may assign to any person the copyright either wholly or partially and either generally or subject to limitations for the whole of the copyright or any part thereof. The first proviso elucidates that in the case of the assignment of copyright in any future work, the assignment shall take effect only when the work comes into existence. The second proviso details that no such assignment shall be applied to any mode of exploitation of the work which did not exist or was not in commercial use at the time when the assignment was made unless the assignment specifically refers to such mode of exploitation of the work. Section 18(2) of the Act provides that where the assignee of a copyright becomes entitled to any right comprised in the copyright, the assignee in respect of the rights so assigned and the assignor in respect of the rights not assigned, shall be treated for the purpose of this Act as the owner of the copyright and the provisions of this Act shall have effect accordingly. Section 18(3) of the Act provides that the expression ―assignee‖ in respect of the assignment of the copyright in any future work includes the legal representatives of RFA No.08 of 2017 17 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others the assignee, if the assignee dies before the work comes into existence.
15. The mode of assignment of copyright is described in Section 19 of the Act which lays down that no assignment of the copyright in any work shall be valid unless it is in writing signed by the assignor or by his duly authorized agent. Section 19(2) of the Act provides that the assignment of copyright in any work shall identify such work and shall specify the rights assigned, the duration and the territorial extent of the assignment. That apart, in terms of Section 19(3) of the Act, the assignment of copyright in any work shall also specify the amount of royalty to the author or his legal heirs during the currency of the assignment which shall also be subject to revision, extension or termination on terms mutually agreed upon by the parties. Section 19(4) of the Act states with clarity that if the assignee does not exercise the rights assigned to him under any of the Sub-Sections of this Section within a period of one year, his rights will lapse unless otherwise mentioned in the assignment. The assignment shall be deemed to be for a period of five years if the period of assignment is not provided, this is provided in Section 19(5) of the Act. The territorial extent if not specified, shall be presumed to extend to the whole of India in terms of Section 19(6) of the Act. These provisions however shall not be applicable to assignment made before the Copyright (Amendment) Act, 1994. Section 19(8) of the Act renders void the assignment of copyright in any work contrary to the terms and conditions of the RFA No.08 of 2017 18 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others rights already assigned to a copyright society in which the author of the work is a member. Section 19(9) of the Act deals with assignment of copyright in any work and lays down that no such assignment to make a cinematograph film shall affect the right of the author of the work to claim an equal share of royalties and consideration payable in case of utilization of the work in any other form other than for communication of the work to the public along with the cinematograph film in a cinema hall. Section 19(10) of the Act provides that no assignment of the copyright in any work to make a sound recording which does not form part of any cinematograph film shall affect the right of the author of the work to claim an equal share of royalties and consideration payable for any utilization of such work in any form.
16. ―Licences‖ is however discussed in Chapter VI of the Act. Section 30 of the Act provides that 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 authorized agent. The proviso to Section 30 of the Act is concerned with licence relating to copyright in any future work and lays down that such licence shall take effect only when the work comes into existence. The explanation therewith is that if a person to whom such a licence relating to copyright in any future work is granted dies before the work sees the light of day, his legal representatives shall be RFA No.08 of 2017 19 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others entitled to the benefit of the licence provided there is no provision to the contrary in the licence.
17. On the anvil of the provisions of Section 18 and Section 19 of the Act supra, a cursory look at ―Annexure B‖ inter alia reveals as under:
―This Deed (―Deed‖) is being entered into by and between, Universal Music India Pvt. Ltd., a Company registered under the Companies Act 1956, and having its registered/main office at Samir Complex, St. Andrews Road, Bandra West, Mumbai-100050 hereinafter referred to as the ―Music Label‖ (which expression shall unless repugnant to the context include its successors and assigns) of the FIRST PART; and Phonographic Performance Limited, a company registered under the Companies Act, 1956 and having its registered/main office at Crescent Towers, 7th floor, B-68, Veera Estate, off New Link Road, Andheri West, Mumbai 400053 hereinafter referred to as ―PPL‖ (which expression shall unless repugnant to the context include its successors and assigns) of the SECOND PART.
...............................................................................................................
1. Partial and Limited Assignment of Rights in Sound Recordings exclusively to PPL:
1.1 The Music Label hereby exclusively assigns, for the Territory, the rights provided below, in respect of below-
listed modes and mediums (without any limitation as to format or style or mechanics or process or method of storage) in its Music Catalogue (of existing and future sound recordings), in favour of PPL for the term of this Deed, subject to earlier determination of this Deed by the Music Label, and PPL accepts such assignment. This Deed is an assignment of rights u/s 18 and 19 of Copyright Act. It is clarified that the rights exclusively assigned hereby are on ownership basis, with full rights for monetization and for enforcement, including by way of legal/court litigation and police authorities.
(emphasis supplied) Rights exclusively licensed with respect to the Sound Recordings in the Music Catalogue:
1.1.1 Public performance/Communication to Public in the following modes/mediums in the Territory and during the term of this Deed:
(a) by way of ‗background' music, i.e., right to perform the Sound Recordings comprising the Music Catalogue, in public, in the background, including in, by way of example, any transport vehicle, hotels, shops, restaurants, offices, RFA No.08 of 2017 20 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others community centers, and amusement centers, and other public places and establishments;
(b) by way of performing the Sound Recordings at events, shows, concerts, and other events,
(c) by way of radio-broadcasting, with respect to terrestrial, A.I.R., FM, AM, and satellite; and
(d) by way of mobile telephony, namely: (a) music messaging over IVR - all telcos and aggregators - only Indian sound recordings. The parties agree that all other telecom related rights (i.e. except the rights granted herein) with respect to the Music Catalogue are retained by the Music Label.
............................................................................................................... 1.4 It is clarified that all rights and interests in and to copyright in the Sound Recordings of the ―Music Catalogue‖, save and except for the limited and partial assignment as provided for in above-named modes and mediums of monetization, continue to vest with the Music Label.
2. Definitions "Music Catalogue" shall mean all past, present and future Sound Recordings, published or unpublished in which Copyright subsists, including derivatives or variations or portions or embodiments thereof, together with associated meta-data, art-work, images, promotional and ancillary material, which are owned by the Music Label and/or controlled by the Music Label through exclusive licensing/contractual arrangements and in respect of which the Music Label has lawful, un-encumbered and effective rights to enter into this Deed.
(emphasis supplied) Without affecting the generality of the foregoing, the Music Label agrees to provide detailed particulars of the Sound Recordings, comprising the Music Catalogue to PPL in full, as per prescribed format and submit the same to PPL within 7 days from the date of execution of this Deed, by way of Schedule A ―Music Catalogue‖ to this Deed. The same shall be sent from official email id or by way of data stored in CD; if sent in any other manner (eg hard-copy printout), the same shall require (physical or digital) signature by both parties. The Music Label hereby agrees and undertakes to inform PPL in writing about any additions/deletions from time to time and the same shall form part of Schedule A ―Music Catalogue‖, as and when particulars of such additions/deletions are received from the Music Label by PPL.
............................................................................................................... 6.4 PPL warrants that it is entitled to grant licences u/s 30 of the Copyright Act. PPL confirms and undertakes to institute appropriate legal proceedings against infringers of copyright in the Music Catalogue in order to protect the rights granted to PPL herein, at all times during the subsistence of this Deed.
RFA No.08 of 2017 21M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others (emphasis supplied)
7. Miscellaneous 7.1 The Music Label agrees that PPL is entitled to grant licences u/s 30 of Copyright Act, on ownership basis (as covered by sub-Section 18(2) of Copyright Act). 7.2 Music Label recognises that PPL has full authority, with prior intimation to the Music Label, to take all steps as may be necessary for the purpose of protecting the assigned rights from infringement in any manner whatsoever, including the filing or defending of any litigation or proceeding before a Court or tribunal or police, giving undertakings, settling or withdrawing any actions instituted for this purpose either by or against PPL and generally to take all steps as PPL may deem fit for the purpose of giving substantial and complete effect to these presents. Music Label recognises and agrees that PPL has the right to send notices and to initiate or defend legal proceedings for infringement of the assigned rights, copyright disputes, money recovery, etc., in its own name, without naming the Music Label as a party to the litigation or proceedings. The Music Label ratifies all past acts done by PPL, including existing, on-going litigations in any Court of law or tribunal or police, both civil and criminal. ...‖
18. On the touchstone of what ―assignment‖ means and in view of the details set out in ―Annexure B‖ supra as also the signatures which are affixed on various documents relied on by the Appellant, the learned trial Court in my considered opinion ought to have allowed the Appellant an opportunity of leading evidence pertaining to the documents so as to establish whether the necessary details as mandated by the provisions of the Act were forthcoming in the documents filed by it. The claim of ownership of the copyright could have been either established or disproved by way of allowing the documents to be examined and juxtaposing it with the relevant provisions of the Act. Of course the documents would have to pass the strict rigours of proof as laid down in the Indian Evidence Act, 1872. The Appellant had averred that there was an infringement of their rights by the Respondents who failed to obtain licence to exploit the sound RFA No.08 of 2017 22 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others recordings owned by them. They claim ownership of the sound recordings on the bedrock of assignment vide documents filed by them. It is not the Appellant's case that they are licensees or agents of any company. The documents of the Appellant were therefore also required to be examined in terms of the provisions of Section 18 and Section 19 of the Act as also the related provisions agitated by the Appellant. Without considering the documents the Suits could not have been thrown out at the threshold. As the learned trial Court had allowed additional documents under Order VII Rule 14(3) of the CPC, the documents so allowed ought to have been tested by evidence instead of holding that there was non-disclosure of the cause of action or non-compliance of Section 61, Section 19 and Section 30A of the Act when the claim was of ownership. Consequently, I find that the Suits do not suffer from the deficiency of non- disclosure of cause of action.
19. It may appositely be pointed out that the learned trial Court also went on to discuss the provisions of Section 33 of the Act and concluded that the Appellant was not a copyright society under Section 33 of the Act but did not specify as to what consequences followed thereto. So far as non-compliance of Section 61 of the Act is concerned this would arise only after the learned trial Court had examined the documents and arrived at the finding as to whether the Appellant was either the owner of the copyright or not. Dismissal of the Suit on this ground would only arise consequent thereto. With regard to Respondent No.4 RFA No.08 of 2017 23 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others (Sony Music Entertainment India Pvt. Ltd.), it is an admitted position that they are licensees of the rights in sound recordings to the Appellant and in terms of Section 61 of the Act have been impleaded as a Respondent. In the same thread, the application of the provisions of Section 30 and Section 30A of the Act would also only have arisen subsequent to the finding of the Court as to whether the Appellant was indeed the owner of the copyright after examining the provisions of Section 18 and Section 19 of the Act based on the documents relied on by the Appellant. At this stage, I refrain from examining the provisions of Section 30, Section 30A and Section 61 of the Act, lest it be construed as touching upon the merits of the controversy, which would consequently prejudice either of the parties in the Suit.
20. The finding that the allegations of infringement were not fortified by cogent evidence is undoubtedly premature for the above stated reasons. If there was a dichotomy in the averments of the Appellant pertaining to ―licensee‖ and ―assignee,‖ the contradictory claims if any, ought to have been examined by evidence. The Suits were dismissed as if the final hearing had concluded when in fact the Court did not have the benefit of examining and considering the documents on the basis of which the claim of the Appellant emanated.
21. To address the contention of the Appellant that the verification clause in the Affidavit in the application under Order VII Rule 11 of the CPC was defective, on perusal thereof it is RFA No.08 of 2017 24 M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others clear that the deponent has stated that he was authorized to swear the Affidavit. Nothing further remains for decision thereof.
22. In view of the foregoing discussions and reasons enumerated, the impugned Orders of the learned trial Court are set aside.
23. Appeals in RFA No.08 of 2017 arising out of IPR Suit No.2 and RFA No.09 of 2017 arising out of IPR Suit No.1 are allowed.
24. Both Suits are remanded to the learned trial Court with the following directions;
(i) in IPR Suit No.2, the learned trial Court shall consider the matter after the stage of Order VII Rule 14(3) of the CPC as documents sought to be filed by the Appellant vide this petition have already been allowed;
(ii) in IPR Suit No.1, the matter shall be considered from the stage of hearing of the petition under Order XXXIX Rules 1 and 2 of the CPC;
(iii) the matters be disposed of as per law.
25. Consequently, both the Suits be restored to their respective original numbers in the Register of the learned District Judge, East Sikkim at Gangtok.
26. This Judgment is not and shall not be construed as observations on the merits of the matter.
RFA No.08 of 2017 25
M/s. Phonographic Performance Ltd. vs. Tara Palace Hotel and Others And RFA No.09 of 2017 M/s. Phonographic Performance Ltd. vs. Arthur's Plur and Others
27. Copy of this Judgment be sent to the learned trial Court, for information and compliance.
28. Lower Court records be remitted forthwith.
( Meenakshi Madan Rai ) Judge 28.11.2019 Approved for reporting : Yes ml Internet : Yes