Madras High Court
Sanjay Lalwani vs M/S.Jyostar Enterprises on 3 September, 2020
Author: M.Govindaraj
Bench: M.Govindaraj
O.A.NO.1194 OF 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 03 / 09 / 2020
CORAM:
THE HON'BLE MR.JUSTICE M.GOVINDARAJ
O.A.NO.1194 OF 2018
Sanjay Lalwani ... Applicant
Vs.
1.M/s.Jyostar Enterprises
No.5, Samarayas Nagar,
J.J.Salai, Near Rose Mahal,
Thiruvallur – 602 001.
2.Jeevitha Rajasekhar
3.Koteswar Raju
4.Ulka Shah
5.Sony Pictures Networks India Private Limited
4th Floor, Interface, Building No.7,
Off. Malad Link Road,
Mumbai – 400 064. ... Respondents
PRAYER: Original Application filed under Order XIV Rule 8 of the
Original Side Rules read with Section 9 of the Arbitration and Conciliation
Act, 1996 read with Section 151 of Code of Civil Procedure, with a prayer to
(i) grant interim injunction restraining the respondents, their men, servants,
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agents, authorized representatives, successors and any other persons
authorized to act for and on its behalf from alienating / selling the Copyright
of Satellite Rights and the theatrical rights for Hindi and All North Indian
Languages Dubbing Rights and Other Rights of the Telugu Talkie picture in
colour and in scope title “PSV GARUDA VEGA” with Starcast:
Dr.Rajashekar, Pooja Kumar, Shradha Das, Sunny Leone and others, directed
by Praveen Sattaru to any third parties / T.V.Channels; (ii) grant interim
injunction restraining the respondents herein more particularly the 5th
respondent from telecasting the Telugu Talkie picture in colour and in scope
title “PSV GARUDA VEGA” with Starcast: Dr.Rajashekar, Pooja Kumar,
Shradha Das, Sunny Leone and others, directed by Praveen Sattaru.
For Applicant : Mr.L.Murali Krishnan
For Respondents : Mr.S.R.Raghunathan
O R D ER
This Original Application has been filed grant of interim
injunction in respect of Copyright of Satellite Rights and theatrical rights of a
film in Hindi and other North Indian Languages Dubbing Rights and other
Rights from being alienated and telecasted.
2. According to the applicant, they entered into a Deed of
Assignment with the respondents 1 to 3 on 21.10.2017 and fulfilled the
payment of consideration on 16.11.2017. In the meanwhile, the respondents 1
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to 3 have executed a Deed of Assignment in favour of the fourth respondent
on 09.11.2017. The said execution of the Deed of Assignment in favour of
the fourth respondent is in contravention of the Deed of Assignment dated
21.10.2017. Immediately, on knowing the same, the applicant has caused a
legal notice on 20.11.2017 to the respondents 1 to 3, to which, the first
respondent, by their letter dated 23.11.2017, agreed to cancel the Deed of
Assignment executed in favour of the fourth respondent. In spite of the same,
the fourth respondent is continuing to violate the rights conferred in his
favour and approached the fifth respondent in the first week of November
2018 and alienated the Satellite rights of the said film to the fifth respondent
and the fifth respondent is attempting to telecast the film in their television.
As per Clause 9 of the Deed of Assignment dated 21.10.2017, the matter is
referable to arbitration. Since the respondents are trying to telecast the film,
to which, he has the Copyright of Satellite rights and theatrical rights, an
order of interim injunction restraining the respondents from alienating and
telecasting the film “PSV GARUDA VEGA” shall be granted.
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3. Per contra, the fourth respondent would contend that no
prima facie case has been made out the and the application under Section 9
of the Arbitration and Conciliation Act, 1996, itself is not maintainable as the
dispute regarding Copyright Assignment, pertains to right in rem and as such,
it is not arbitrable. The fourth respondent has purchased the Copyright by a
Deed of Assignment dated 09.11.2017 by remitting the sale consideration in
one shot. Since all rights in respect of the said film has been assigned in
favour of the fourth respondent in sole and exclusive basis, she has every
right to enjoy the same. The first and third respondents had not written any
letter to the fourth respondent seeking cancellation of the agreement and the
Deed of Assignment executed in her favour is still in force and subsisting.
The Central Board of Film Certification, Mumbai, after verifying all the title
documents of the said film, granted Hindi Censor Certificate in favour of the
fourth respondent. For the public notice advertising her rights on 11.11.2017,
this Original Application is filed in December 2018, after a period of one
year, will not give rise to any prima facie case and therefore, the applicant is
not entitled to injunction.
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4. In support of his contention, the learned counsel for the
respondents would rely on the following judgments:-
(a) Judgment of the High Court of Bombay in
STEEL AUTHORITY OF INDIA LTD., VS. SKS
ISPAT AND POWER LTD. [2014 SCC ONLINE
BOM 4875]
(b) Judgment of the High Court of Bombay in
THE INDIAN PERFORMING RIGHT SOCIETY
LTD., VS. ENTERTAINMENT NETWORK (INDIA)
LTD. [2016 SCC ONLINE BOM 5893]
(c) Judgment of the Hon'ble Supreme Court in
EMAAR MGF LAND LIMITED VS. AFTAB SINGH
[2018 SCC ONLINE 2771]
(d) Judgment of the Hon'ble Supreme Court in
A.AYYASAMY VS. A.PARAMASIVAM AND
OTHERS [2016 (10) SCC 386]
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(e) Judgment of the Hon'ble Supreme Court in
BOOZ ALLEN AND HAMILTON INC. VS. SBI
HOME FINANCE LIMITED AND OTHERS [2011
(5) SCC 532]
Furthermore, it is contended that the fourth respondent is not a party to the
arbitration agreement and therefore, the injunction application under Section
9 of the Arbitration and Conciliation Act, 1996, is not maintainable against
the third parties. Therefore also, the application is liable to be dismissed.
5. I have considered the submissions made on either side and
perused the materials available on record.
6. At the outset, it is relevant to note that the Hon'ble Supreme
Court in BOOZ ALLEN AND HAMILTON INC VS. SBI HOME
FINANCE LIMITED [2011 (5) SCC 532] has categorically held that in
respect of the matters in rem, arbitration is not maintainable and it can be
done only in respect of rights or actions in personam. In this regard,
paragraph Nos.34 to 36 of the said judgment reads as under:
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“34. The term `arbitrability' has different meanings
in different contexts. The three facets of arbitrability,
relating to the jurisdiction of the arbitral tribunal, are as
under : (i) whether the disputes are capable of adjudication
and settlement by arbitration? That is, whether the
disputes, having regard to their nature, could be resolved
by a private forum chosen by the parties (the arbitral
tribunal) or whether they would exclusively fall within the
domain of public fora (courts). (ii) Whether the disputes are
covered by the arbitration agreement? That is, whether the
disputes are enumerated or described in the arbitration
agreement as matters to be decided by arbitration or
whether the disputes fall under the `excepted matters'
excluded from the purview of the arbitration agreement.
(iii) Whether the parties have referred the disputes to
arbitration? That is, whether the disputes fall under the
scope of the submission to the arbitral tribunal, or whether
they do not arise out of the statement of claim and the
counter claim filed before the arbitral tribunal. A dispute,
even if it is capable of being decided by arbitration and
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falling within the scope of arbitration agreement, will not
be `arbitrable' if it is not enumerated in the joint list of
disputes referred to arbitration, or in the absence of such
joint list of disputes, does not form part of the disputes
raised in the pleadings before the arbitral tribunal.
35. Arbitral tribunals are private fora chosen
voluntarily by the parties to the dispute, to adjudicate their
disputes in place of courts and tribunals which are public
fora constituted under the laws of the country. Every civil
or commercial dispute, either contractual or non-
contractual, which can be decided by a court, is in principle
capable of being adjudicated and resolved by arbitration
unless the jurisdiction of arbitral tribunals is excluded
either expressly or by necessary implication. Adjudication
of certain categories of proceedings are reserved by the
Legislature exclusively for public fora as a matter of public
policy. Certain other categories of cases, though not
expressly reserved for adjudication by a public fora (courts
and Tribunals), may by necessary implication stand
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excluded from the purview of private fora. Consequently,
where the cause/dispute is inarbitrable, the court where a
suit is pending, will refuse to refer the parties to
arbitration, under section 8 of the Act, even if the parties
might have agreed upon arbitration as the forum for
settlement of such disputes.
36.The well recognized examples of non-arbitrable
disputes are : (i) disputes relating to rights and liabilities
which give rise to or arise out of criminal offences; (ii)
matrimonial disputes relating to divorce, judicial
separation, restitution of conjugal rights, child custody;
(iii) guardianship matters; (iv) insolvency and winding up
matters; (v) testamentary matters (grant of probate, letters
of administration and succession certificate); and (vi)
eviction or tenancy matters governed by special statutes
where the tenant enjoys statutory protection against
eviction and only the specified courts are conferred
jurisdiction to grant eviction or decide the disputes. “
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7. In the judgment of the High Court of Bombay in STEEL
AUTHORITY OF INDIA LTD., VS. SKS ISPAT AND POWER LTD.,
[2014 SCC ONLINE BOM 4875] it is observed that for the reliefs against
infringement and passing off, they will not fall within the jurisdiction of
Arbitrator. Paragraph Nos.4 and 5 of the said judgment reads as under:
“4.The present suit, firstly, is for reliefs against
infringement and passing off, which by their very nature do
not fall within the jurisdiction of the Arbitrator, The rights
to a trademark and remedies in connection therewith are
matters in rem and by their very nature not amenable to the
jurisdiction of a private forum chosen by the parties.
Secondly, the disputes concerning infringement and passing
off do not arise out of the contract between the parties
dated 1 June 2011, which contains the arbitration
agreement. Thirdly, there are other parties who are arranged
as party Defendants to the present suit, who are not parties
to the arbitration agreement contained in the contract dated
1 June 2011.
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5.As held by the Supreme Court in the case of
Sukanya Holdings Pvt. Ltd., V. Jayesh H. Pandya, the
entire subject matter of the dispute must be shown to have
been covered by the arbitration agreement between the
parties to the suit, before a relief can be claimed under
Section 8 of the Arbitration and Conciliation Act, 1996.
The plaintiff cannot be asked to split up his cause of action
and seek separate reliefs before the Arbitral Forum in
respect of matters covered under the arbitration agreement
and before the Court in respect of other matters.”
8. The same view has been expressed in the judgment of the
Hon'ble Supreme Court in VIKAS SALES CORPORATION VS.
COMMISSIONER OF COMMERCIAL TAXES [1996 (4) SCC 433] which
is followed in the judgment of the High Court of Bombay in THE INDIAN
PERFORMING RIGHT SOCIETY LTD., VS. ENTERTAINMENT
NETWORK (INDIA) LTD. [2016 SCC ONLINE BOM 5893]. The relevant
paragraphs from the said judgment reads as under:
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“120. Supreme Court in the case of Vikas Sales
Corporation and Anr. (supra) has held that patents,
copyrights and other rights in rem which are not rights over
land are also included within the meaning of movable
property.
121. Delhi High Court in the case of Mundipharma
AG Vs. Wockhardt Ltd. (supra) has interpreted the
provisions of Chapter XII of the Copyright Act, 1957
relating to civil remedies in case of infringement of
copyright; every suit or other civil proceedings arising under
that Chapter in respect of Infringement of copyright in any
work or the infringement of any other right conferred by the
said Copyright Act shall be instituted in the district Court
having jurisdiction and has held that in case where
copyright in any work is infringed, the remedies by way of
injunction, damages, account and otherwise as are or may be
conferred by law for the infringement of such a right,
cannot be subject-matter of arbitration.
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122. Section 62(1) of the Copyright Act, 1957
provides that every suit or other civil proceeding arising
under Chapter XII in respect of the infringement of
copyright in any work or the infringement of any other right
conferred by this Act shall be instituted in the district court
having jurisdiction. In my view, the said provision makes it
mandatory for institution of every suit or civil proceeding
arising under Chapter XII in respect of infringement of the
copyright in any work or infringement of any other right
conferred by the said Act which is very wide in nature. I am
respectfully in agreement with the views expressed by the
Delhi High Court in the case of Mundipharma AG Vs.
Wockhardt Ltd. (supra) which applies to the facts of this
case. I am also bound by the judgment of the Supreme Court
in the case of Vikas Sales Corporation and Anr. (supra)
which applies to the facts of this case.
123. This Court in the case of Steel Authority of
India Ltd. (supra) has considered the application of the
defendants in an infringement suit filed by the plaintiff
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who had claimed a permanent injunction against the
defendants from infringing the registered trade marks of the
plaintiff. The plaintiff had also claimed for damages
against the defendants. The defendants had filed a notice of
motion under Section 8 of the Arbitration Act relying upon
the arbitration agreement admittedly entered into between
the parties in that matter. This Court held that the said suit
was for the reliefs against infringement and passing off,
which by their very nature do not fall within the
jurisdiction of the arbitrator. It is held that the rights to a
trademark and remedies in connection therewith are matters
in rem and by their very nature not amenable to the
jurisdiction of a private forum chosen by the parties. This
Court accordingly dismissed the said notice of motion filed
under Section 8 of the Arbitration Act by referring the
parties to the arbitration.
124. In my view, the judgment of this Court in the
case of Steel Authority of India Ltd. (supra) applies to the
facts of this case. I am in agreement with the views
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expressed by the learned Single Judge of this Court in the
said order. The view taken by the learned Single Judge of
this Court in the said judgment is in conformity with the
view taken by the Supreme Court in the case of Booz Allen
and Hamilton Inc. (supra).
125. In so far as the judgment of the Supreme Court
in the case of Chiranjilal Shrilal Goenka (deceased) through
LRs. (supra) is concerned, the issue before the Supreme
Court was whether the grant of Probate by a Court of
competent jurisdiction is in the nature of a proceeding in
rem. It binds not only upon all the parties made before the
Court but also upon all other persons in all proceedings
arising out of the Will or claims under or connected
therewith. It is held by the Supreme Court that consent of
the parties cannot confer jurisdiction nor an estoppel
against statute. The jurisdiction could be conferred by
statute and the Court cannot confer jurisdiction or
authority on the tribunal. It is held that a decree passed by
a court without jurisdiction on the subject matter or on the
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grounds on which the decree made which goes to the root to
its jurisdiction or lacks inherent jurisdiction is a corum non
judice. Such decree passed by such a court is a nullity and is
non est. It is held that its invalidity can be set up whenever
it is sought to be enforced or is acted upon as a foundation
for a right, even at the stage of execution or in collateral
proceedings.
126. Merely because the respondent did not raise any
specific plea before the learned arbitrator that prayer clause
(a) in the statement of claim for various declarations in
respect of the copyright of the parties was an action in rem
and was not arbitrable, in my view, since the learned
arbitrator inherently lacked the jurisdiction to adjudicate
upon such claim made by the claimant, it would not amount
to a waiver under Section 4 of the Arbitration Act. A party
even by consent cannot confer jurisdiction on the learned
arbitrator in case of action in rem which jurisdiction the
learned arbitrator did not have. In my view, the principles
laid down in the judgment of the Supreme Court in the case
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of Chiranjilal Shrilal Goenka (deceased) through LRs.
(supra) would apply to the facts of this case. I am
respectfully bound by the said judgment.
127. This Court in the case of Veena Naresh Seth
and Anr. (supra) has held that there is nothing
under Section 16 which indicates that a plea of inherent
lack of jurisdiction cannot be raised in a petition
under Section 34 of the Arbitration Act even if it was not
raised before the learned arbitrator. It is held that the
questions relating to inherent lack of jurisdiction may also
be raised before the learned arbitrator. However, that does
not imply that if not raised before the learned arbitrator, the
questions relating to inherent lack of jurisdiction cannot be
raised in a petition under Section 34 of the Arbitration Act.
128. This Court in the said judgment has interpreted Section
34(2)(b) of the Arbitration Act and has held that while
scrutinizing an award under Sub-section 2(b), it is not
necessary for the party making the application to furnish
proof that the subject matter of the dispute is not capable of
settlement by arbitration. The award may be set aside even
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if the Court itself finds that the subject matter of the
dispute is not capable of settlement by arbitration. It is held
that if the arbitral tribunal lacks inherent jurisdiction
which cannot be cured or waived, the arbitral award would
also be in conflict with the public policy of India. I am
therefore of the view that since the learned arbitrator
inherently lacked the jurisdiction to decide an action in rem,
merely because the respondent did not raise an issue of
jurisdiction before the learned arbitrator under Section 16 or
otherwise, that would not confer jurisdiction on the learned
arbitrator. In my view, the said issue of inherent lack of
jurisdiction is incapable of being waived.”
9. In the judgment of the Hon'ble Supreme Court in EMAAR
MGF LAND LIMITED VS. AFTAB SINGH [2018 SCC ONLINE SC
2771] following the judgment in Booz Allen's case (cited supra) the Hon'ble
Supreme Court has observed as under:
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“32. We have already noted several categories of
cases, which are not arbitrable. While referring to judgment
of this Court in Booz Allen and Hamilton Inc. (supra), those
principles have again been reiterated by this Court in A.
Ayyasamy (supra), Dr. A.K. Sikri, J. delivering the
judgment in that case has noticed certain cases, which are
not arbitrable in paragraph No.14, which is as follows:-
“14. In the instant case, there is no
dispute about the arbitration agreement
inasmuch as there is a specific arbitration
clause in the partnership deed. However, the
question is as to whether the dispute raised by
the respondent in the suit is incapable of
settlement through arbitration. As pointed out
above, the Act does not make any provision
excluding any category of disputes treating
them as non-arbitrable. Notwithstanding the
above, the courts have held that certain kinds
of disputes may not be capable of adjudication
through the means of arbitration. The courts
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have held that certain disputes like criminal
offences of a public nature, disputes arising
out of illegal agreements and disputes relating
to status, such as divorce, cannot be referred to
arbitration. The following categories of
disputes are generally treated as non-
arbitrable:
(i) patent, trade marks and copyright;
(ii) anti-trust/competition laws;
(iii) insolvency/winding up;
(iv) bribery/corruption;
(v) fraud;
(vi) criminal matters.
Fraud is one such category spelled out by the
decisions of this Court where disputes would
be considered as non-arbitrable.”
10. Same view was endorsed in the judgment of the Hon'ble
Supreme Court in A.AYYASAMY VS. A.PARAMASIVAM AND OTHERS
[2016 (10) SCC 386].
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11. Therefore, it is clear that arbitration is not maintainable in
respect of Copyright matters. In view of the ratio laid down by the Hon'ble
Supreme Court and other High Courts, this Court is of the considered
opinion that this Original Application under Section 9 of the Arbitration and
Conciliation Act, 1996 is not maintainable and accordingly, stands
dismissed. No costs.
03 / 09 / 2020
Index : Yes/No
Internet : Yes/No
TK
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M.GOVINDARAJ, J.
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