REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5114 OF 2005

M/s Entertainment Network (India) Ltd. … Appellant

Versus

M/s Super Cassette Industries Ltd. … Respondent

WITH

CIVIL APPEAL NOS.5178-5180/2005,

Phonographic Performance Limited …Appellant

Versus  

Millineum Chennai Broadcast (P) Ltd. etc. etc. ..Respondents  

WITH

CIVIL APPEAL NO. 5181/2005,

Phonographic Performance Limited …Appellant

Versus  

Entertainment Network (India) Pvt. Ltd. ..Respondents  

WITH

CIVIL APPEAL No. 5182/2005

Phonographic Performance Limited …Appellant

Versus  

Radio Mid-Day West (India) Ltd. ..Respondents  

WITH

CIVIL APPEAL No. 5183/2005

Phonographic Performance Limited …Appellant

Versus  

Music Broadcast Pvt. Ltd. ..Respondents  

J U D G M E N T

S.B. Sinha, J.

Leave granted.

INTRODUCTION

Interpretation of Section 31 of the Copyright  Act,  1957 (for the

sake of brevity, hereinafter referred to as, ‘the Act’) is involved in these

appeals.   

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We may notice the factual matrix of the matter.   

BACKGROUND FACTS

First respondent is one of the leading music companies engaged in

the production and/or acquisition of rights in sound recordings.  It has

copyright  over  a  series  of  cassettes  and CDs commonly known as  T-

series.  It has copyrights in cinematographic films and sound recordings.

Appellant  M/s.  Entertainment  Network (India)  Ltd.  (ENIL)  broadcasts

under  the  brand  name  “Radio  Mirchi”.   It  is  a  leading  FM  radio

broadcaster.  Disputes and differences arose between Bennett Coleman &

Co. Ltd., the holding company of the first respondent and Phonographic

Performance Ltd.  (PPL) as  regards  the  playing of  the songs  of  which

copyrights  belongs  to  the  first  respondent  in  their  FM radio  network.

Appellant  is  a  company  which  holds  licence  for  running  FM  radio

stations in various cities across India.   

Free-to-Air  private  FM  Radio  Broadcasting  is  a  recent

phenomenon  in  India  and  the  basic  content  of  any  radio  station,

presently, is only sound recordings, i.e., songs.   

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Disputes  and  differences  having  arisen  between  the  parties  in

regard to broadcast of the songs in respect whereof the first respondent

holds  a  copyright  as  owner  thereof  or  by  reason  of  purchase  of  the

copyright belonging to others.   

BACKGROUND FACTS

The radio industry was revolutionized by the Government of India

as in October 1999 for its first phase of granting license for private FM,

broadcasting channel, tenders were invited.   

Appellant herein was awarded the license for running a private FM

broadcasting  service  in  12  cities  on  payment  of  a  hefty  license  fee.

Several other bidders were also granted licenses.  Respondent, however,

was not a member of the appellant – society.  It was found to have been

using the broadcasting songs in respect whereof Super Cassettes Industry

Limited (SCIL) had an ownership over the copyright.  It was a member

of  the  copyright  society  being  Phonographic  Performance  Ltd.  (PPL).

Indisputably, there had been an infringement of the copyright of Super

Cassettes.  Allegedly, appellant was under the belief that it was a part of

PPL and whereupon the music belonging to the repertoire of SCIL was

played during the period from October 2001 to May, 2002 in its stations

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at Indore and Ahmedabad.  Royalty was paid by ENIL to PPL at the rate

of Rs.400/- per needle hour pursuant to the order passed by the Calcutta

High Court dated 28.9.2001.  Attempts were made to obtain a licence

from SCIL  when  ENIL came  to  know  that  it  was  not  a  part  of  the

copyright society PPL.  Negotiations failed between the parties.   

A suit was filed before the Delhi High Court for restraining ENIL

from playing and broadcasting the music belonging to SCIL on any of

the Radio Stations belonging to ENIL.   

COMMUNICATIONS BETWEEN THE PARTIES

We may notice  relevant  parts  of  some communications  between

the  parties.   Super  Cassettes  through  its  lawyer  by  a  notice  dated

21.1.2002, in view of the said infringement of his copyright called upon

ENIL, inter  alia, to give an undertaking that it  shall  not  broadcast  the

sound  records  of  Super  Cassettes  through  its  Radio Station  without  a

valid licence and payment of royalty (the terms of which were mutually

arrived at).  Super Cassettes again by a notice dated 2.4.2002 through its

Advocate called upon ENIL to: “a) immediately desist from broadcasting

Sound Recording(s) of Super Cassettes clients through its Radio Station;

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b) Tender an unconditional  apology for the illegal  broadcast  of Sound

Recordings of Super Cassettes clients in past; c) give an undertaking that

it  shall  not broadcast the Sound Recordings of Super Cassettes clients

through its Radio Station without a valid licence and payment of royalty

(the terms of which can be mutually arrived at), and d) pay a sum of Rs.

50,00,000.00  (Fifty  lacs  only)  as  liquidated  damages,  for  the  illegal

broadcast and acts of infringements committed by it, to Super Cassettes

within  15  days  of  receipt  hereof  under  intimation  to  Super  Cassettes

failing which Super Cassettes have positive instruction of its clients to

initiate such legal actions both Civil and/or Criminal against you, your

directors,  and  all  other  persons  responsible  for  the  said  infringement

without any further notice and in that case you shall be further liable for

all  cost  and  consequences  thereof  which  may  please  be  noted  very

carefully”.   

In response to the said notice, ENIL stated:  

“2.  Since  our  clients  intend  to  negotiate  with  your clients,  as  was  our  clients  intention  from  the beginning we have approached your clients and have offered payment of royalty, the price of which will be mutually convenient to both the parties.

3. It  is  our  clients’  contention  that  music  is  for general  benefit  of  society  at  large.    Our  clients understand  that  your  clients  have  entered  into  a

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contract/Agreement  with  Media  Broadcast  Indian Ltd.,  broadcasting  under  the  channel  “Radio  City”, and  our  clients  are  also  likewise  prepared  to popularise your client’s music and add value to your clients’  content  by entering  into  Agreement/License with your clients.

4. As we have already stated in the aforesaid para music  is  for  general  enjoyment  and  a  restrictive practice of a tie up only with Media Broadcast India Ltd. is not in public interest.   We, therefore, do not admit any of the allegations made by your clients in your  aforesaid  letter  and  further  suggest  that  your clients  resolve  the  issue  by entering  into  a  contract beneficial to both parties.”

Super Cassettes, however, by another legal notice dated 1.6.2002

stated:

“My  client  has  clearly  indicated  its  willingness  to grant  your  client  a  public  performance  license. However, without obtaining such license, your client continues to broadcast songs of our clients.

In the circumstances, your client is once again called upon to :

(a) First immediately cease and desist from such unauthorized broadcast before a formal license agreement is drawn up.

(b) Pay my client a sum of Rs.1,00,00,000/- (Rupees one crore) for  past  infringement  by  way  of  radio  broadcast  of  my client’s sound recordings through your client’s various FM Radio Stations situated in various cities.”

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. PPL again to the Holding Company of ENIL, BCCL by a letter

dated 6.9.2000 stated:

“As you may be aware,  it  is  a  legal  requirement  to obtain  permission  (Licence)  from  the  copy-right owners  before  you  can  broadcast  the  copyrighted music (Sound Recordings).   As you may further  be aware, Phonographic Performance Ltd. (PPL), is the copyright society in respect of sound recordings and is  registered  with  Government  of  India.   We  have about  50  member  companies  including  HMV, Universal,  Tips,  Venus,  Sony Music (India),  Virgin, Milestone,  Magnasound,  BMG  –  Crescendo  and others.   The  broadcasting  rights  in  the  music recordings – both of Indian and International music – or our members are administered by us.

It will be essential for your to apply for our licence for broadcasting  of  our  members’  existing  and  future sound recordings, subject to our tariff and terms and conditions as applicable.

We shall  appreciate if you kindly confirm to us the centres  where  you  will  be  setting  up  your  F.M. Broadcasting  stations/transmitters,  and the estimated date/month from which the said stations/transmitters will start operations.

On receipt of this information, we shall send you the licence application form and the tariff details.”

It, however, appears that several broadcasters including ENIL by a

letter dated 17.4.2001 addressed to PPL stated as under:

“We  acknowledge  that  you  are  constituted  as  the body legally empowered to represent the interests of the  owners  of  music  copyrights  around  the  world

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when  performances  take  place  in  India.   We  are, therefore,  approaching  you  to  discuss  arrangements for  the  provisions  of   licensing  the  broadcast  of copyrighted music on our new stations.

We want to begin discussions immediately, since at least some of our stations are all  but ready to begin broadcasts now.

We  can  begin  with  the  agreement  that  owners  of copyrights deserve to be compensated for the use of their  music  on  radio  stations.   Radio  stations  play copyrighted music because of its  popularity because the music  helps build  the audience  that  the  stations can offer to advertisers with eventual hope of making an opening profit.  We assume that copyright owners desire  exposure  to  their  music  that  is  as  broad  as possible.

The  expectations  for  the  future  of  private  radio broadcasting  in  India  are  high,  and  we  have  the ambition  to  develop  private  radio  to  a  level  of popularity  not  unlike  what  achieves  in  most  other developed  countries  in  the  world.   Whereas  radio currently attracts the average Indian for less than half an  hour  a  day,  daily  radio  listenership  in  most countries averages something over three hours a day. Uniquely among the  media,  radio  has  the ability  to provide as entertainment and information services to listerners  who  do  not  have  to  stop  everything  else they  may  be  doing  to  take  full  advantage  of  the programming.   We feel  that  while radio has been a dismal failure at attracting listenership thus far in this country,  we can,  with  your expectation,  build  radio listening to the point that music will begin to play a much larger role in the lives of the Indian public than is the case today.

We  hope  that  we  can  meet  at  your  earliest convenience to begin to discuss a contractual business arrangement,  which  will  be  beneficial  to  both  the society and to the new radio industry in India.  

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We would appreciate if you can get in touch with Mr. Prakash Iyer at 852-3880 extn. 3291 or Mobile : 982- 11-82869 in the next 7 days to set up a date and time for the meeting.”

Indisputably,  appellant,  in  the  suit  filed  by the  first  respondent

having  come to  learn  that  it  is  outside  PPL’s  jurisdiction  to  give  an

undertaking  not  to  use  the  songs  copyright  whereof  belongs  to  PPL,

Super Cassettes.  The said suit admittedly has been withdrawn.  It may

therefore  not  be  necessary to  refer  thereto  the  proceedings  before  the

Board.   

In a letter to the respondent, appellant stated, “We had no intention

to infringe your copyright as in fact we had been regularly paying royalty

to PPL including the T-Series needle time played on our station.”

The  appellant  thus  contended  that  it  had  been  all  along

under a wrong impression that Super Cassettes was a member of PPL and

that it  had no knowledge that the license was required to be obtained.

Super Cassettes, however, contend that such a stand was not correct as

would appear from its letter dated 28.5.2002, and that the appellant had

intended to negotiate with the respondent from the very beginning.

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PROCEEDINGS BEFORE THE COPYRIGHT BOARD –  

FIRST LICENCE CASE

Various Radio Stations including the petitioner filed an application

before the Copyright Board at Hyderabad in terms of Section 31(1)(b) of

the Act on or about 19.11.2002 for grant of compulsory license to all the

radio stations.   

The Copyright Board by a judgment and order dated 19.11.2002

fixed the standard rate of:

• Payment to be made at Rs.1200/needle  hour during prime

time.

• For 12 normal hours = 60% of standard rate

• For  8  lean  (night)  hours  =  25%  of  standard  rate  and

respondents  also  directed  to  furnish  a  security/bank

guarantee of Rs.20,00,000/- per radio station to PPL.

The Board  also held that the same shall be operative for a period

of  2  years  and  the  matter  shall  be  reconsidered  again  in  September-

October, 2004. Super Cassettes was not a party therein.  The Board fixed

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royalties initially for a period of two years. An appeal thereagainst was

preferred before Bombay High Court and it is the subject matter of C.A.

No. 5181 of 2005.

Appeals  were filed before  the Bombay High Court  by the  radio

companies and PPL against the order dated 19.11.2002, details whereof

are as under:

“1. PPL V. Music Broadcast 279 of 2003

2. PPL V. ENIL 280 of 2003

3. PPL V. Miullennium Chennai 281 of 2003

4. PPL V. Millennium Delhi 283 of 2003

5. ENIL V. PPL 288 of 2003

6. Millennium Chennai V. PPL 291 of 2003

7. Millennium Delhi V. PPL 292 of 2003

8. Music Broadcast V. PPL 294 of 2003

9. Radio Midday V. PPL 421 of 2003

13 Appeals in total were filed before the Bombay High Court. The

Bombay High Court by a common judgment and order dated 13.4.2004

in First Appeal Nos. 279-294 of 2003, 421 of 2003 and 1573 of 2003

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remitted the matters back to the Copyright Board for reconsideration and

for fixation of license fees.  

SECOND LICENSE CASE

On or about 28.1.2003, appellant  filed an application before the

Copyright Board at Delhi, which was marked as Case No. 10 of 2003 for

grant  of  compulsory  licence  in  terms  of  Section  31(1)(b)  of  the  Act

against Super Cassettes praying, inter alia, for the following reliefs:

“Grant  the  applicant  a  compulsory  license  of  the complete repertoire (present and future) of SCIL on the terms and conditions considered just and equitable by this Hon’ble Copyright Board.”

On being noticed, respondents filed an objection contending that

as the suit for infringement was pending before the Delhi High Court, no

application  for  compulsory  license  could  be  entertained.   The  High

Court,  on  an  application  filed  by  the  appellant,  clarified  that  the

respondent  was  free  to  canvas  its  submissions  before  the  Copyright

Board  that  the person infringing  the  Copyright  should  not  be  granted

compulsory license.  The Board directed the parties to come with their

respective  witnesses.   However,  when  respondent  intended  to  present

oral evidence, it was declined.  Submissions were directed to be made on

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or about 20.10.2003.  Application No. 10 of 2003 was allowed granting a

compulsory license.   

Appellant filed an appeal against the said order before the Bombay

High Court questioning the rates of compensation only. The said appeal

was tagged with various other appeals which had been filed before the

Bombay High Court against  the order dated 19.11.2002 passed by the

Copyright Board at Hyderabad.   

Respondents, however preferred two-fold appeals before the Delhi

High Court which were marked as RFA No. 848 of 2003.  By reason of

the  impugned  judgment  dated  30.6.2004,  the  respondent’s  appeal  has

been  allowed  remitting  the  matter  back  to  the  Copyright  Board  to

reconsider  the  application  of  the  appellant  for  grant  of  compulsory

license under Section 31 of the Act after giving adequate opportunity to

the parties to adduce evidence and to dispose of the same by a reasoned

order.  The High Court furthermore directed that the appellant must file

an undertaking that it would not broadcast the sound recordings of the

respondent.   Appellant  had filed Petition for  Special  Leave to  Appeal

giving rise to Civil Appeal No. 5114 of 2005 in this Court.   

PROCEEDING BEFORE US

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We have two  judgments  before  us;  one  from the  Bombay High

Court  and another  from the Delhi  High Court.   Whereas  the Bombay

High  Court  opined  that  in  terms  of  Section  31  of  the  Act,  grant  of

compulsory license on reasonable remuneration is permissible; the Delhi

High Court held otherwise.   

Both  the  parties  have  preferred  these  appeals  before  us,  the

particulars whereof are as under:

Case No. Parties

1. C.A. No.5114/05 ENIL Vs. SCIL

2. C.A. No.5178-80/05 PPL Vs. Millennium Chennai

3. C.A. No.5181/05 PPL Vs. ENIL

4. C.A. No.5182/05 PPL Vs. Radio Mid-day West  

5. C.A. No.5183/05 PPL Vs. Music Broadcast Pvt. Ltd.

CONTENTIONS AND SUBMISSIONS  

Mr.  H.N.  Salve,  Dr.  A.M.  Singhvi  and  Mr.  Sudhir  Chandra,

learned  Senior  Counsel  appearing  on  behalf  of  the  appellant  would

submit:

(i) The  said  provisions  seek  to  strike  a  balance  between

creation of monopoly which is generally considered opposed

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to public interest and protecting intellectual property rights

as a measure to encourage creativity in the respective fields.

(ii) The selective refusal to sell ‘goods’ which is treated under

Indian  Law to  be an  unfair  trade  practice  is  discouraged.

Copyright  Board,  therefore,  in  terms of  Section  31 of  the

Act  must  be  held  to  be  holding  the  power  to  grant  a

compulsory licence  provided  the  following  conditions  are

satisfied:

(a) the work in question should have been published or

performed in public.

(b) the owner of the copyright should have refused to re-

publish or allow re-publication or the performance in

public  of  the work by reason of  which the work  is

withheld from the public; or

(c) has refused to allow a communication by a broadcast

of  such  work  on  terms  which  the  complainant

considers reasonable.

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(iii) The  term  ‘or’  used  between  clauses  (a)  and  (b)  of  sub-

section (1) of Section 31 should be read disjunctively and

not conjunctively.   

(iv) The language of clause (b) indicates that the same is focused

on a particular form of communication to the public- namely

“Broadcast”,  which  requires  a  proper  construction  having

regard to the fact that the said word has been brought about

by an amendment made by Act No. 23 of 1983.  The words

used prior to its amendment were ‘radio diffusion’.

(v) Section  31(1)(b)  was  designed  specifically  to  enable  the

Board to intervene where the owner, particularly of a sound

recording did not allow its public broadcast.   

(vi) The finding of the High Court that no compulsory licence

can  be  granted  now  would  be  conferred  in  the  public

interest.   

(vii) The words ‘such work’ occurring in clauses (a) and (b) do

not operate in the same field inasmuch as clause (a) refers to

publication  or  republication  of  the  work  in  print  media.

Clause (b) refers to the broadcast alone; the sound recording

being a part of it.  And in that view of the matter, the finding

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of the High Court  that clause (b) cannot apply so long as

somebody has allowed to broadcast  it  to  the public is  not

correct.

(viii) Properly construed, an owner of a copyright  cannot make

any discrimination between one broadcaster and another and

what can be demanded is equitable remuneration for grant of

broadcasting right, as a refusal to grant such a licence may

even hit the Government owned free to air channels, which

would be manifestly opposed to public interest.   

(ix) The Copyright Board not only have the requisite jurisdiction

to  grant  a  compulsory  licence  but  also  determine  the

quantum of remuneration payable to him for grant of such

licence.   

(x) Subject of course to protection of the commercial rights of

the owner of the sound recording, no owner of a copyright

can refuse to allow broadcast of a sound recording, merely

on  the  ground  that  the  same may affect  the  profit  of  the

owner  inasmuch  as  the  public  interest  in  this  behalf  is

paramount.

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(xi) Section 31(1) must be construed having regard to the fact

that India is a signatory to various International conventions,

such as, Berne Convention, Rome Convention, etc. as would

appear from the International Copyright Order, 1999 issued

by the Central  Government.    Section  31(1)  must  also  be

construed  having  regard  to  the  laws  indicted  by  other

countries in the light of the said convention.  Sub-Section

(2) of Section 31, if given literal meaning, would lay to an

anomaly and thus its area of operation should be confined to

clause (a) of sub-Section (1) of Section 31 only.  

(xii) It was urged that as the courts do not themselves lay down

the principles for grant of compensation, this Court may lay

down the same for further guidance of the same.  

Mr. Shyam Divan, the learned Senior Counsel appearing on behalf

of the respondents, on the one hand, would submit:

(i) The importance of the Copyright protection for the owners of

the  copyrights  should  be  the  prime  consideration  for

determining the issue.  The object of the Copyright Act is to

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maintain  a  balance  between  the  interest  of  the  owner  of  the

copyright  in  protecting  his  works  on  the  one  hand  and  the

interest of the public to have access to the works on the other

hand  and,  thus,  it  is  imperative  to  keep  in  mind  the  broad

features of the Act which is the owner’s freedom to contract his

interest by the Act as would be evident from Sections 14, 16

and 30 of the Act.   

(ii) The ownership of  any copyright  like ownership of  any other

property  must  be  considered  having  regard  to  the  principles

contained  in  Article  19(1)(g)  read  with  Article  300A  of  the

Constitution, besides, the human rights on property.   

(iii) As the Act  expressly recognizes  the  notion  of  an  “exclusive

licence”  as  defined  in  Section  2(j),  a  specific  right  in  terms

thereof  can  be  conferred  only  on  one  person  which  would

include a right to have recourse to civil  remedies in terms of

Section 55 of the Act, which enables the owner of a copyright

to  enjoy the  fruits  of  his  work  by earning  an  agreed  fee  or

royalty through the issuance of licence.   

(iv) The  Copyright  Board  unlike  its  counterparts  of  Australia,

England  or  Singapore  have  a  limited  jurisdiction  and  its

principal functions are:  

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“(a) To decide whether a work has been published or  as  to  the  date  on  which  the  work  was published  for  the  purpose  of  determining  the term of copyright under Chapter V of the Act. (Section 6);

(b) To decide whether the term of copyright or any work is shorter in any other country than that under the Act (Section 6);

(c) To  settle  disputes  arising  in  respect  of assignment of copyright (Section 19A);

(d) To  settle  disputes  arising  in  respect  of  a voluntary license issued under Section 30 of the Act (Section 30A);

(e) To  grant  compulsory  licenses  in  respect  of Indian works withheld from the public (Section 31);

(f) To  grant  a  compulsory  license  to  public unpublished Indian works (Section 31A);

(g) To grant a compulsory license to produce and publish  translation  of  literary  and  dramatic works (Section 32);

(h) To grant a compulsory license to reproduce and publish certain categories of liberary, scientific or artistic works for certain purposes (Section 32A);

(i) To  rectify  the  register  of  copyright  on  an application  of  the  Registrar  of  Copyrights  or any other person aggrieved (Section 50);

(j) To hear appeals from any decision or whatever the  decision  of  the  Registrar  of  Copyright [Section 72].

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(v) Section  31  of  the  Act  must  be  given  its  literal  meaning,

which  would  mean  that  the  Board  can  exercise  its

jurisdiction provided:

(i) There  is  a  refusal  by the  owner  and  as  a  result  of

which the work is “withheld from the public”, or  

(ii) In  the  case  of  a  broadcast,  the  work  has  not  been

“allowed to be communicated to the public”  

(vi) As in the instant case, the repertoire  of SCIL and PPL are

available to the public inasmuch as these copyright owners

society have entered into voluntary licenses with All India

Radio  and  some  other  FM  Radio  Broadcasters,  the

provisions of Section 31 of the Act were not applicable.

(vii) As both PPL and SCIL called upon the broadcaster to enter

into licenses and were willing to license their repertoire on

mutual agreed terms, it cannot be said that there has been a

refusal on their part to grant licenses.  In the present case, no

occasion arose for grant of a compulsory licence inasmuch

as the only relief which could be granted by the Copyright

22

Board was to direct the Registrar of Copyrights to grant to

the complainant a license to “communicate the work to the

public” by broadcast, which is already made available to the

public by broadcast through All India Radio and other radio

broadcasters.

(viii) The  existence  of  license  have  been  communicated  to  the

public.  Section 31(1)(b) does not create any entitlement in

favour of an individual broadcaster, but merely provides a

mechanism by which an Indian work that has been withheld

from the public is made available to the public by broadcast.

(ix) The interests balanced in Section 31 are (i) the interest of

the  copyright  owners  and  (ii)  the  interest  of  the  general

public.  The narrow commercial interests of the broadcasters

are not to be reckoned under the scheme of Section 31.   

(x) The relative merit  and demerit of the complainants in any

event  being  imperative  for  the  purpose  of  arriving  at  a

finding as to how the interests of the general public is to be

best  served itself  is  a  pointer  to  the  fact  that  compulsory

license should not be granted to all the radio broadcasters.   

23

(xi) The  Board  is  not  expected  unlike  the  statutes  of  other

countries to go into the reasonableness or otherwise of the

tariff fixed for grant of licenses.   

(xii) The Copyright society not being the owner of copyright, in

any  event,  cannot  be  subjected  to  grant  of  a  compulsory

license in terms of Section 31 of the Act.  

(xiii) The Act,  having used different  words ‘compensation’  and

‘royalty’, Section 3 signifies a lump sum amount to be paid

to bring back the work into the pubic domain.   It also goes

to show that it is a one time exercise.  

CORE ISSUES

The  core  questions  which,  therefore,  arise  for  consideration  in

these appeals are:

(i) Whether the Copyright Board has jurisdiction under Section 31

(1)(b)  of  the  Copyright  Act,  1957  to  direct  the  owner  of  a

copyright in any Indian work or a registered copyright society

to issue compulsory licences to broadcast such as works, where

such work is available to the public through radio broadcast?

(ii) Whether in any event such a compulsory license can be issued

to more than one complainant in the light of Section 31(2)?

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(iii) What would be the relevant considerations which the Copyright

Board must keep in view while deciding on;

(a) Whether  to  issue  a  compulsory  license  to  a

particular person; and  

(b) The  terms on  which  the  compulsory license

may be issued, including the compensation?

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STATUTORY PROVISIONS

In view of  the fact  that  interpretation  of  Section  31  of  the  Act

would depend upon the Scheme of the Act, we may notice the relevant

provisions thereof.  It is also necessary to have a broad overview.

The Copyright Act,  1957 was enacted to amend and consolidate

the law relating to copyright.  Section 2(d) defines ‘author’, which reads

as under:

2(d) “author means, -   

(i) in  relation to a literary or dramatic work, the author of the work;

(ii) in relation to a musical work, the composer; (iii) in  relation  to  an artistic  work other  than  a photograph,  the

artist; (iv) in relation to a photograph, the person taking the photograph;

(v) in  relation  to  a  cinematograph  film  or sound recording, the producer; and

(vi) in  relation  to  any  literary,  dramatic, musical  or  artistic  work  which  is computer-generated,  the  person  who causes the work to be created;”

Section 2(dd) defines ‘broadcast’ to mean communication to the

public-(i) by any means of wireless diffusion, whether in any one or more

26

of  the  forms  of  signs,  sounds  or  visual  images;  or  (ii)  by  wire,  and

includes a re-broadcast.   

Section 2(ff) defines ‘communication to the public’ to mean:

“making any work available for being seen or heard or otherwise enjoyed by the public directly or by any means  of  display or  diffusion  other  than  by issuing copies  of  such  work  regardless  of  whether  any member of the public actually sees, hears or otherwise enjoys the work so made available.

Explanation:-  For  the  purposes  of  this  clause, communication through satellite or cable or any other means of simultaneous communication to more than one  household  or  place  of  residence  including residential  rooms  of  any  hotel  or  hostel  shall  be deemed to be communication to the public;”

Sections  2(ffd)  defines  ‘copyright  society’  to  mean  a  society

registered  under  sub-section  (3)  of  Section  33.   Section  2(j)  defines

‘exclusive licence’ to mean  a licence which confers on the licensee or on

the licensee and persons authorized by him, to the exclusion of all other

persons (including the owner of the copyright), any right comprised in

the  copyright  in  a  work,  and  “exclusive  licensee”  shall  be  construed

accordingly.

Section 2(l) defines ‘Indian work’ to mean a literary, dramatic or

musical work, - (i) the author of which  is a citizen of India; or (ii) which

is first published in India; or (iii) the author of which, in the case of an

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unpublished work, is, at the time of the making of the work, a citizen of

India.

Section 2(m) defines ‘infringing copy’ to mean (i) in relation to a

lilterary,  dramatic,  musical  or  artistic  work,  a  reproduction  thereof

otherwise than in the form of a cinematographic film; (ii) in relation to a

cinematograph  film,  a copy of  the  film made on any medium by any

means;  (iii)  in  relation  to  a  sound  recording,  any  other  recording

embodying  the  same  sound  recording,  made  by  any  means;  (iv)  in

relation  to  a  programme  or  performance  in  which  such  a  broadcast

reproduction right or a performer’s right subsists under the provisions of

this  Act,  the  sound  recording  or  a  cinematographic  film  of  such

programme  or  performance,  if  such  reproduction,  copy  or  sound

recording is made or imported in contravention of the provisions of the

Act.  Section 2(xx) defines ‘sound recording’ to mean a record of sounds

from which such sounds may be produced regardless of the medium on

which such recording is  made or the method by which the sounds are

produced.   Section  2(y)  defines  ‘work’  to  mean any of  the  following

works, namely:- (i)  a literary, dramatic,  musical or artistic work; (ii)  a

cinematograph film; (iii) a sound recording.    

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Section 3 of the Act defines for meaning of publication.  Section 4

deals  with  when  ‘work’  would  not  be  deemed  to  be  published  or

performed in public.   

Chapter II of the Act deals with Copyright Office and Copyright

Board.   

Section  11  provides  for  the  provisions  relating  to  ‘Copyright

Board’

Chapter III deals with ‘Copyright’.    

Section 13 provides for subsistence of copyright throughout India

in  the  classes  of  works  specified  therein,  which  includes  (a)  original

literary, dramatic, musical and artistic works; (b) cinematograph films;

and (c) sound recording.  Sub-section (4) of Section 13 provides that the

copyright in a cinematograph film or a sound recording shall not affect

the separate copyright in any work in respect of which or a substantial

part of which, the film, or, as the case may be, the sound recording is

made.  

Section 14 of the Act provides for the meaning of copyright.   

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Clause  (c)  of  sub-section  (1)  of  Section  14  talks  about  artistic

work.  For the purposes of the Act, ‘copyright’ means the exclusive right,

subject to the provisions of this Act, to do or authorize the doing of any

act.  The acts specified therein in respect of a work or any substantial part

thereof and in the case of a sound recording, namely,  

(i) to make any other sound recording embodying it;  

(ii) to sell or give on hire, or offer for sale or hire, any copy of

the sound recording,  regardless  of  whether  such copy has

been sold or given on hire on earlier occasions;  

(iii) to communicate the sound recording to the public.   

Explanation: For the purposes of this Section, a copy which has

been sold once shall be deemed to be a copy already in circulation.

Section 16 mandates that no person shall be entitled to copyright

except as provided for under the Act.   

Chapter IV provides for the ownership of copyright and the rights

of the owner.  Section 17 states that subject to the provisions of this Act,

the author of a work shall  be the first  owner of the copyright  therein.

Proviso (b) appended thereto reads as under:

“(b) subject  to  the  provisions  of  clause  (a),  in  the case of a photograph taken, or a painting or portrait

30

drawn, or an engraving or a cinematograph film made, for  valuable  consideration,  at  the  instance  of  any person,  such  person  shall,  in  the  absence  of  any agreement to the contrary, be the first  owner of the copyright therein.”

.   

Sections 18 and 19 relate to assignment of copyright and mode of

assignment respectively.  Section 19 deals with disputes with respect to

assignment of copyright.  Section 27 provides for the term of copyright

in sound recording in the following terms:

“27.  Term of copyright in sound recording.- In the case of a sound recording, copyright shall subsist until sixty years from the beginning of  the calendar  year next following the year in which the sound recording is published.

However, only because the term for holding copyright under the

said provisions are different, the same would not mean that the right of

the copyright owner in sound recording is somewhat inferior.   

Chapter VI of the Act deals with licences.  

Section 30 provides for the licences by owners of copyright. It, in

other  words,  deals  with  a  situation  where  licence  is  granted  on  a

voluntary basis.  Section 30A provides for application of Sections 19 and

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19A.   Section  31A  provides  for  compulsory  licence  in  unpublished

Indian works, the relevant portions whereof are as under:

“(1) Where,  in  the  case  of  an  Indian  work referred  to  in  sub-clause  (iii)  of  clause  (l)  of Section  2,  the  author  is  dead  or  unknown  or cannot be traced, or the owner of the copyright in such work cannot be found, any person may apply to the Copyright  Board for a licence to publish  such  work  or  a  translation  thereof  in any language.

(4) Where  an  application  is  made  to  the Copyright  Board  under  this  section,  it  may, after holding such inquiry as may be prescribed, direct  the  Registrar  of  Copyrights  to  grant  to the applicant a licence to publish the work or a translation thereof in the language mentioned in the application subject to the payment of such royalty and subject  to  such  other  terms and  conditions  as  the  Copyright  Board  may determine,  and  thereupon  the  Registrar  of Copyrights  shall  grant  the  licence  to  the applicant  in  accordance  with  the  direction  of the Copyright Board.”

Section 32 deals with the provisions relating to licence to produce

and publish translations.  Section 32A deals with licence to reproduce

and publish works for certain purposes.

Chapter VII of the Act deals with copyright societies.  Section 33

provides for registration of copyright society, relevant portion whereof

are as under:

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“33. Registration of Copyright Society.-  (1) ……..

(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 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.

(4) The Central Government may, if it is satisfied that a  copyright  society  is  being  managed  in  a  manner detrimental  to  the  interests  of  the  owners  of  rights concerned, cancel the registration of such society after such inquiry as may be prescribed.”  

 Registration of such copyright society is mandatory in character.

Sub-Section  (2)  of  Section  33  provides  for  that  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 application to the Central

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Government.  Sub-Section  (3)  of  Section  33  empowers  the  Central

Government to grant a licence having regard to the interest of the authors

and other owners of rights under the  Act, the interest and convenience of

the public and in particular of the groups of persons who are most likely

to  seek  licenses  in  respect  of  the  relevant  rights  and  the  ability  and

professional  competence  of  the  applicants,  register  such  association.

Section 34 provides for administration of rights of owner by copyright

society.   The proviso  appended  thereto  prohibit  any discrimination  in

regard  to  the  terms  of  licence  or  the  distribution  of  fees  collected

between rights  in  Indian  and  other  works.   The  concept  of  copyright

society  appears  to  be  that  the  interest  of  the  copyright  holder  can  be

protected by the said society while granting licence so as to enable all

players  to  have  the  benefit  of  a  single  window;  as  such  a  society  is

entitled to:

(i) issue  licences  under  Section  30  in  respect  of  any  rights

under this Act;

(ii) collect fees in pursuance of such licences;

(iii) distribute  such  fees  among  owners  of  rights  after  making

deductions for its own expenses;

34

(iv) perform any other functions consistent with the provisions

of Section 35.

Sections 34A, 35, 50 and 51 of the Act read as under:

“34A.  Payment  of  remuneration  by copyright society.-  (1) If the Central Government is of the opinion that a copyright society for a class of work  is  generally  administering  the  rights  of  the owners  of  rights  in  such  work  throughout  India,  it shall  appoint  that  society  for  the  purpose  of  this section.

(2) The copyright society shall, subject to such rules as may be made in  this  behalf,  frame a scheme for determining the quantum of remuneration payable to individual  copyright  owners  having  regard  to  the number of copies of the work in circulation:  

Provided that  such scheme shall  restrict  payment  to the  owners  of  rights  whose  works  have  attained  a level  of  circulation  which  the  copyright  society considers reasonable.

35.  Control  over  the  copyright  society  by  the owner of rights.- (2) All fees distributed among the owners of rights shall, as far as may be, be distributed in proportion to the actual use of their works.

50. Rectification of Register by Copyright Board. -The Copyright Board, on application of the Registrar of Copyrights or of any person aggrieved, shall order the rectification of the Register of Copyrights by- (a)  the  making  of  any entry  wrongly omitted  to  be made in the register, or  (b) the expunging of any entry wrongly made in, or remaining on, the register, or

35

(c) the correction of any error or defect in the register.

51. When copyright infringed. -Copyright in a work shall be deemed to be infringed- (a) when any person, without a licence granted by the owner of the copyright or the Registrar of Copyrights under this Act or in contravention of the conditions of a licence so granted or of any condition imposed by a competent authority under this Act-

(i)  does  anything,  the  exclusive  right  to  do which is by this Act conferred upon the owner of the copyright, or

(ii) permits for profit any place to be used for the  communication  of  the  work  to  the  public where  such  communication  constitutes  an infringement  of  the  copyright  in  the  work, unless he was not aware and had no reasonable ground for believing that such communication to  the  public  would  be  an  infringement  of copyright; or

(b) when any person-

(i)  makes  for  sale  or  hire,  or  sells  or  lets  for hire, or by way of trade displays or offers for sale or hire, or  

(ii) distributes either for the purpose of trade or to such an extent as to affect prejudicially the owner of the copyright, or  

(iii) by way of trade exhibits in public, or

(iv) imports into India, any infringing copies of the work :

Provided  that  nothing  in  sub-clause  (iv)  shall apply to the import of one copy of any work for the private and domestic use of the importer.  Explanation.-  For  the  purposes  of  this  section,  the reproduction of a literary, dramatic, musical or artistic

36

work in  the  form of  a  cinematograph  film shall  be deemed to be an "infringing copy".  

Section  63  of  the  Act  provides  for  offence  of  infringement  of

copyright or other rights conferred by the Act.  Section 72 of the Act

provides  for  appeals  against  orders  of  Registrar  of  Copyrights  and

Copyright Board.  Section 74 empowers the Registrar of Copyrights and

Copyright Board to exercise certain powers of civil courts.

In view of the aforementioned statutory backdrop, we may notice

Section 31 of the Act.  

“31. Compulsory licence in works withheld from public.- (1) If at any time during the term of copyright in  any  Indian  work  which  has  been  published  or performed  in  public,  a  complaint  is  made  to  the Copyright  Board that  the owner of copyright  in  the work-

(a) has  refused  to  republish  or  allow  the republication of the work or has refused to allow the performance in public of the work, and by reason of such refusal the work is withheld from the public; or

(b) has  refused  to  allow communication  to the public by broadcast of such work or in the case of a sound recording the work recorded in such sound recording on terms which the complainant considers reasonable,  the Copyright  Board,  after  giving to the owner  of  the  copyright  in  the  work  a  reasonable opportunity  of  being  heard  and  after  holding  such inquiry  as  it  may  deem  necessary,  may,  if  it  is satisfied  that  the  grounds  for  such  refusal  are  not

37

reasonable, direct the Registrar of Copyrights to grant to  the  complainant  a  licence  to  republish  the work, perform the work in public or communicate the work to the public by broadcast, as the case may be, subject to  payment  to  the  owner  of  the  copyright  of  such compensation  and  subject  to  such  other  terms  and conditions  as  the  Copyright  Board  may  determine; and thereupon the Registrar of Copyrights shall grant the licence to the complainant in accordance with the directions  of  the  Copyright  Board,  on  payment  of such fee as may be prescribed.  

Explanation.-  In  this  sub-section,  the expression “Indian work” includes-

(i) an artistic work, the author of which is a citizen of India; and  

(ii) a  cinematograph  film  or  a  sound recording made or manufactured in India.

(2) Where two or more persons have made a complaint under sub-section (1), the licence shall be granted to the complainant who in the opinion of the Copyright Board would best serve the interests of the general public.”

RULES

Section 78 of the Act provides for power to make rules.  

The  Central  Government  in  exercise  of  the  said  power  framed

rules known as “The Copyright Rules, 1958” (for short “the Rules”).

 Chapter  V  of  the  Rules  deals  with  the  provisions  relating  to

Cooperative  Societies.   Relevant  clauses  of  which  are  quoted

hereinbelow:

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“12.  Conditions  for  submission  of  applications  for registration of copyright societies.  (1) Any association of persons, whether incorporated or not,  comprising  seven  or  more  owners  of  copyright (hereinafter referred to as “the applicant”) formed for the purpose of carrying on the business of issuing or granting licences  in  respect  of  any  class  of  works  in  which copyright  subsists  or  in  respect  of  any  other  right conferred  by  the  Act  may  file  with  the  Registrar  of Copyrights an application in Form II-C for submission to the Central Government for grant of permission to carry on such business and for its registration as a copyright society. (2) An application under sub-rule (1) shall be signed by all  the  members  of  the  governing  body  (by  whatever name  called)  and  the  chief  executive  of  the  applicant (who need not be a member of the applicant).

14-G.  Conditions  subject  to  which  a  copyright  may accept  authorization  and  an  owner  of  rights  may withdraw such authorization- (1) A copyright society may  accept  from  an  owner  of  rights  or  his  duly authorised  agent,  exclusive  authorisation  to  administer any right in a work if such owner or such agent enters into an agreement, in writing, with the copyright society specifying the rights to be administered, the duration for which such rights are authorised to be administered, the quantum of  fees agreed to  and the frequency at  which such  fees  shall  be  paid  by  the  copyright  society  in accordance with its Scheme of Tariff and Distribution. (2) The owner of copyrights shall, without prejudice to the  rights  under  the  agreement  and  subject  to  the condition  of  a  prior  notice  of  sixty  days,  be  free  to withdraw such authorisation in case the copyright society fails  to  fulfil  its  commitments  as  laid  down  in  the agreement.

14-J. Tariff Scheme.-  As soon as may be, but in no case later  than  three  months  from  the  date  on  which  a

39

copyright  society has become entitled  to  commence its copyright business, it shall frame a scheme of tariff to be called  the  “Tariff  Scheme”  setting  out  the  nature  and quantum of fees or royalities which it proposes to collect in respect of such copyright or other rights administered by it.

14-K. Distribution Scheme. - (1) As soon as may be, but in no case later than three months from the date on which a copyright society has become entitled to commence its copyright business, it shall frame a scheme to be called the “Distribution Scheme” setting out the procedure for collection  and  distribution  of  the  fees  or  royalities specified  in  the  Tariff  Scheme  among  the  owners  of copyright or other rights whose names are borne on its Register of Owners [maintained under clause (i) of rule 14-I] for the approval of such owners. (2) Any distribution under the Distribution Scheme shall, as far as possible, be in proportion to the income of the copyright society from actual use of the work or works of each owner of rights.”

THE FORMS

In terms of the Rules, forms have also been prescribed.  Relevant

clauses of Form IIA appended to First Schedule to the Copyright Rules,

1958 read as under:

“8. Estimated cost of the work to be published. 9. Proposed retail price per copy of the work. 10.  Rate  of  royalty,  which  the  applicant  considers reasonable, to be paid to the copyright owner. 11. Means of the applicant for payment of the royalty.

40

12.  Whether the prescribed fee has  been paid and,  if  so, particulars  of  payment  (give  Postal  Order/Bank Draft/Treasury Challan number). 13. (a) Full  name,  address  and  nationality  of  the

person competent to issue a licence. (b) Whether the applicant  after  due diligence on his part was unable to find the owner.  (c) Whether the applicant  has requested and had been  denied  authorisation  by  the  said  person  to produce and publish the translation or reproduce the work or publish the unpublished work.  (d) If the applicant was unable to find the owner, whether  he  had  sent  a  copy  of  the  request  by registered air mail post to the publisher whose name appears  on  the work.  If  so,  the  date  on  which  the copy was sent.”

CONVENTIONS

Before we embark upon respective contentions of the parties, we

may notice some International Conventions to which India is a signatory.

The Central Government issued the International Copyright order by a

notification published in the Gazette of India on 24.3.1999.  It defines

‘Berne Convention Country’ to mean a country which is a member of the

Berne Copyright Union, and includes a country mentioned either in Part I

or  in  Part  II  of  the  Schedule.  It  defines  ‘Phonograms  Convention

Country’ to  mean a  country which  has  either  ratified,  or  accepted,  or

acceded  to  the  Convention  for  the  Protection  of  Producers  of

Phonograms  against  Unauthorized  Duplication  of  their  Phonograms,

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done at Geneva on the twenty-ninth day of October, one thousand nine

hundred and seventy-one, and includes a country mentioned in Part V of

the Schedule.  It defines ‘Universal Copyright Convention Country’ to

mean a country which has either ratified or accepted, or acceded to the

Universal  Copyright  Convention,  and  includes  a  country  mentioned

either in Part III or in Part IV of the Schedule.  It defines ‘World Trade

Organization  Country’  to  mean  a  country  which  is  a  member  of  the

World Trade Organization and which has either ratified, or accepted, or

acceded  to  the  Agreement  on  Trade  Related  Aspects  of  Intellectual

Property Right, 1994, and includes a country mentioned in Part VI of the

Schedule.  The countries which have ratified/accepted/acceded to Berne

Convention are specified in Part I of the Schedule appended thereto. Part

II  of  the  Schedule  specifies  those  countries  which  are  yet  to

ratify/accept/accede to the 1971 Text of Berne Convention. Part III of the

Schedule specifies the countries which have ratified/accepted/acceded to

the 1971 Text of the Universal Copyright Convention.  Part  IV of the

Schedule specifies the countries which are yet to ratify/accept/accede to

the  1971  Text  of  Universal  Copyright  Convention.  Part  V  of  the

Schedule  specifies  Phonograms  Conventions  Countries  and  Part  VI

specify the World Trade Organization Countries.   

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We  would  refer  to  only  two  Conventions,  namely,  Berne

Convention and Rome Convention. The later comes within the purview

of the  World Trade Organization Convention.   The Berne Convention

provides for the  protection of  literary and artistic  works.  The relevant

provisions whereof are Articles 11, 11bis, which reads as under:

“Article  11.  (1)  Authors  of  dramatic,  dramatico- musical and musical works shall enjoy the exclusive right of authorizing:

(i) the public performance of  their  works,  including such public performance by any means or process;

(ii)  any  communication  to  the  public  of  the performance of their works.

(2) Authors of dramatic or dramatico-musical works shall enjoy, during the full term of their rights in the original  works,  the  same  rights  with  respect  to translations thereof.

Article  11bis. (1)  Authors  of  literary  and  artistic works shall enjoy the exclusive right of authorizing:

(i)  the  broadcasting  of  their  works  or  the communication  thereof  to  the  public  by  any  other means  of  wireless  diffusion  of  signs,  sounds  or images;

(ii)  any communication  to  the public  by wire or  by rebroadcasting of the broadcast of the work, when this

43

communication is made by an organization other than the original one;

(iii) the public communication by loudspeaker or any other  analogous  instrument  transmitting,  by  signs, sounds or images, the broadcast of the work.

(2) It shall be a matter for legislation in the countries of the Union to determine the conditions under which the rights mentioned in the preceding paragraph may be exercised, but these conditions shall apply only in the countries where they have been prescribed. They shall  not  in  any circumstances  be  prejudicial  to  the moral rights of the author, nor to his right to obtain equitable  remuneration  which,  in  the  absence  of agreement, shall be fixed by competent authority.

(3)  In  the  absence  of  any  contrary  stipulation, permission granted in accordance with paragraph (1) of this Article shall not imply permission to record, by means of instruments recording sounds or images, the work  broadcast.  It  shall,  however,  be  a  matter  for legislation in the countries of the Union to determine the regulations  for  ephemeral  recordings  made by a broadcasting  organization  by  means  of  its  own facilities  and  used  for  its  own  broadcasts.  The preservation  of  these  recordings  in  official  archives may, on the ground of their exceptional documentary character, be authorized by such legislation.”

Article  3(f)  of  the  Rome  Convention  defines  the  term

‘broadcasting’ as under:

44

“3(f)  ‘Broadcasting’  means  the  transmission  by wireless  means for public reception of  sounds or  of images and sounds.”

Article 12 of the Rome Convention reads as under:

“Article 12

If a phonogram published for commercial purposes, or a reproduction of such phonogram, is used directly for broadcasting or for any communication to the public, a single equitable remuneration shall  be paid by the user  to  the  performers,  or  to  the  producers  of  the phonograms, or  to both.   Domestic  law may, in the absence of agreement between these parties, lay down the conditions as to the sharing of this remuneration.”

GENERAL PRINCIPLES  

There cannot be any doubt whatsoever that an artistic, literary or

musical work is the brain-child of an author, the fruit of his labour and,

so, considered to be his property.  A copyright, however, unlike a trade

mark  is  a  right  created  under  the  Act  as  is  evident  from Section  16

thereof.  When an author of a copyright and other claims a copyright, it is

subjected to the provisions of the Act.  The rights and obligations of the

author ought to be found out within the four corners of the Act.   It is not

necessary to dilate more upon these aspects of the matter as the object

45

behind enacting  the  Act  is  absolutely  clear  and  explicit.   It creates  a

monopoly in favour of the author.  Copyright also creates a monopoly in

favour of  the copyright  society.  What requires  protection is  unlawful

reproduction of the author’s work by others.  It is the long period which

encourages the authors to create works of literature, music and art.   

In Gramophone Company of India Ltd.  v.  D.B. Pandey [(1984) 2

SCC 534 at 549, this Court held:

“An artistic, literary or musical work is the brain-child of an author, the fruit of his labour and, so, considered to  be  his  property.   So  highly  is  it  prized  by  all civilized  nations  that  it  is  thought  worthy  of protection  by  national  laws  and  international conventions relating to copyright.”

In Copinger and Skone James on Copyright (15th Ed. 2005, para 2-

05, page 27, Vol. 1), it is stated:

“Finally, it is considered a social requirement in the public  interest  that  authors  and  other  rights  owners should be encouraged to publish their work so as to permit the widest possible dissemination of works to the public at large.  These four fundamental principles are cumulative and inter-dependent and are applied in the justification of copyright in all countries, although different countries give varying emphasis to each of them.   To  generalize,  it  is  true  to  say  that  in  the development of modern copyright laws, the economic and social arguments are given more weight in Anglo- American laws of common law tradition, whereas, in

46

Continental law countries with civil law systems, the natural law argument and the protection of authors are given first place.

‘The  protection  of  copyright,  along  with  other intellectual property rights, is considered as a form of property  worthy  of  special  protection  because  it  is seen as benefiting society as a whole and stimulating further creative activity and competition in the public interest.”

INTERNATIONAL CONVENTIONS AND FOREIGN LAW

India is a Signatory to Berne Convention.  It is also a signatory to

the Rome Convention.   

The  International  Conventions  provide  for  compulsory  license.

Whereas U.K., Australia, Singapore, U.S.A. have framed laws for grant

of compulsory license and also constituted Tribunals for the purpose of

overseeing the tariff for licensing, stricto sensu the Indian Act does not

say so.   

BROAD ANALYSIS OF THE PROVISIONS

A statute  as  is  well  known  must  be  read  in  its  entirety.   It  is

required to be read chapter by chapter, section by section and clause by

clause.  The definitions of the term ‘broadcast’ as also ‘sound recording’

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must be given a wide meaning.  Clause (a) of Section 13 protects original

work whereas clauses (b) and (c) protect derivative works.  It provides

for commercial  manifestation of original work and the fields specified

therein.  Clause (a) of sub-Section (1) of Section 14 deals with original

work.  It is extremely broad.  In contrast thereto, the copyright on films

or sound recording work operates in restrictive field; they provide for a

restrictive right as would appear from the provisions contained in Section

14 (1)(e) of the Act.   

For a proper construction of the provisions, will it be necessary to

keep in mind the difference between the right of the original work and

right of sound recording?  Should we also bear in mind that there are

various forms of intellectual property rights.   Section 16 provides that a

right, inter alia, in respect of any work must be claimed only under and in

accordance  with  the  provisions  of  the  Act  unlike  Trade  Mark  and

‘passing off rights’ can be enforced even though they are not registered.

It must also be noticed that whereas the term of a copyright in original

literary, dramatic, musical and artistic works not only remains protected

in  the  entire  life  time  of  the  author  but  also  until  60  years  from the

beginning  of  the  calendar  year  next  following  the  year  in  which  the

author dies, the term of copyright in sound recording subsists only for 60

years, but as indicated hereinbefore, the same would not mean that the

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right of an owner of sound recording is in any way inferior to that of

right of an owner of copyright on original literary work etc.  

Chapter VI deals with licence.  The statutory licences are required

to be granted having regard to the various factors stated therein.   

Section 33 is a special provision which provides for registration of

a copyright society.

It  may,  however,  be  necessary  to  consider  that  unlike  other

countries the broadcasting rights by themselves were introduced in India

for the first time by inserting Section 37 in the year 1994.  It is true that

the  rights  of  free-to-air  broadcasters  have  not  been  dealt  with  in  a

specific legislation unlike some other jurisdiction.  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 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

49

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. The civil remedies for infringement of copyright as

envisaged  under  Section  55  of  the  Act  can  also  be  enforced  by  the

society. The Scheme of the statute governing the field in other countries

is vast and wide.  The jurisdiction of the Tribunal is indisputably very

wide.  No such legislative changes have been made in India presumably

because until recent times, the Copyright in musical work was owned by

a cooperative society, namely, IPRS and PPL.   

The third party granting license on a prescribed fee of a musical

work  was  contemplated  under  the  Act.   As  a  general  rule  for

administering such copyrights, there are about 300 radio stations now.

Monopoly in respect of sound recording is, as it appears from the tariff

supplied  to  us  by the  respondent  embrace  within  its  field,  Pop/Music

Quizzes, Mobile DJ, Jukeboxes, Dance Teachers, Dance Centre/Studio,

Exercise,  Amateur  Operatic  &  Dramatic  Societies,  Theatrical

Productions,  Temporary  Camps/Shacks,  Banquet  Halls,  Background

Music-  Guest  Houses  &  Lodges,  Hotels,  Background  Music-  Public

Houses  &  Cafes  &  Non  AC  Restaurants,  Bankground  Music  –  AC

Restaurants,  BARS,  Background  Music  –  Shops  &  Stores  Premises,

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Background  Music  –  Hairdressing  Salons  &  Beauty  Parlours,

Background Music – Clinics,  Background Music  – Nursing Homes &

Hospitals, Background Music – Factories & Offices/Banks, Background

Music  –  Waiting  Rooms/Reception  Areas,  Background  Music-

Telephone  Music  on  hold,Puppet/Magic  Shows,  Background  Music-

Theatres, Background Music – Cinemas, Background Music- Museums

& Art Galleries, Background Music- Ten Pin Bowling Centres/Bowling

Alleys, Background Music- Amusement & Pleasure Parks, Background

Music  –  Amusement  Arcades,  Background  Music  –  Casinos,

Background  Music  –  Gymnasiums,  Background  Music  –  Swimming

Pools.

The right of the author of a copyright vis-à-vis the Society, thus,

may be exercised in almost all walks of life from the ‘Radio Stations’ to

a small ‘Hairdressing Salon’.   

If the right of an author/society is so pervasive, is it necessary to

construe the provisions under Section 31 of the Act having regard to the

International  Covenants and the laws operating in the other countries?

The  answer  to  the  said  question  must  be  rendered  in  affirmative.

Interpretation  of  a  statute  cannot  remain  static.   Different  canons  and

principles are to be applied having regard to the purport and object of the

51

Act.  What is essential therefor is to see that the expanding area in which

the  copyright  will  have  a  role  to  play  is  covered.   While  India  is  a

signatory  to  the  International  Covenants,  the  law  should  have  been

amended in terms thereof.  Only because laws have not been amended,

the same would not by itself mean that the purport and object of the Act

would be allowed to be defeated.  If the ground realities changed, the

interpretation  should  also  change.   Ground  realities  would  not  only

depend upon the new situations and changes in the societal conditions

vis-à-vis the use of sound recording extensively by a large public, but

also keeping in view of the fact that the Government with its eyes wide

open have become a signatory to International Conventions.   

APPLICATION OF INTERNATIONAL CONVENTIONS IN INDIA

It  is  for  the  aforementioned  limited  purpose,  a  visit  to  the

provisions of International Conventions would be necessary.  

In  interpreting  the  domestic/municipal  laws,  this  Court  has

extensively  made use  of  International  law inter  alia  for  the  following

purposes:

(i) As a means of interpretation;

(ii) Justification or fortification of a stance taken;

52

(iii) To  fulfill  spirit  of  international  obligation  which  India  has

entered  into,  when  they are  not  in  conflict  with  the  existing

domestic law;

(iv) To  reflect  international  changes  and  reflect  the  wider

civilization;

(v) To  provide  a  relief  contained  in  a  covenant,  but  not  in  a

national law;

(vi) To fill gaps in law.   

Beginning from the decision of this court in Kesavananda Bharati

v. State of Kerala [(1973) 4 SCC 225], there is indeed no dearth of case

laws where this Court has applied the norms of international laws and in

particular the international covenants to interpret domestic legislation. In

all these cases, this court has categorically held that there would be no

inconsistency  in  the  use  of  international  norms  to  the  domestic

legislation, if by reason thereof the tenor of domestic law is not breached

and in case of any such inconsistency, the domestic legislation should

prevail.

In Jagdish Saran and Ors. v. Union of India [(1980) 2 SCC 768], it

was observed:

53

“It  is  also  well-settled  that  interpretation  of  the Constitution of India or statutes would change from time to time. Being a living organ, it is ongoing and with  the  passage  of  time,  law  must  change.  New rights  may  have  to  be  found  out  within  the constitutional scheme. Horizons of constitutional law are expanding."

In  the  aforementioned  judgment,  this  Court  referred  to  a  large

number  of  decisions  for  the  purpose  of  interpreting  the  constitutional

provisions in the light of the international treaties and conventions.

Yet again in  Indian Handicrafts Emporium and Ors. v.  Union of

India [( 2003 ) 7 SCC 589],  this  Court  considered the Convention on

International  Trade  in  Endangered  Species  (CITES)  and  applied  the

principles  of  purposive  constructions  as  also  not  only  the  Directive

Principles  as  contained  in  Part  IV  of  the  Constitution  but  also

Fundamental Duties as contained in Part IVA thereof.

Referring to  Motor General Traders and Anr. v.  State of Andhra

Pradesh and Ors.  ( 1984 ) 1 SCC 222, Rattan Arya and Ors. v. State of

Tamil Nadu and Anr. ( 1986 ) 3 SCC 385 and Synthetics and Chemicals

Ltd. and Ors. v.  State of U.P. and Ors. ( 1990 ) 1 SCC 109, this Court

held:

54

"There  cannot  be any doubt  whatsoever  that  a  law which was at one point of time was constitutional may be rendered unconstitutional because of passage of time. We may note that apart from the decisions cited by Mr. Sanghi, recently a similar view has been taken in Kapila Hingorani v. State of Bihar (supra) and  John Vallamattom and Anr. v.  Union of India(supra)."

These judgments were referred to in the decision of Liverpool   and   

London S.P. and I Asson. Ltd.     v.   M.V. Sea Success I and Anr  .   [(2004) 9

SCC 512], wherein this court observed that as no statutory law in India

operated in the field, interpretative changes, if any, must, thus be made

having regard to the ever changing global scenario.

Liverpool  also  referred  to  the  decision  of  the  court  in  M.V.

Elisabeth     [1993 Supp. (2) SCC 433] as an authority for the proposition

that the changing global scenario should be kept in mind having regard

to the fact that there does not exist any primary act touching the subject

and in absence of any domestic legislation to the contrary.  

Concurring with the said decisions, it was however opined that the

same could not mean that it restricted the jurisdiction of the Indian High

55

Courts to interpret the domestic legislation strictly according to the judge

made law.

Liverpool   and  London  S.P.  and  I  Asson.  Ltd.   (supra)  has  been

followed by the Supreme Court in a plethora of cases inter alia The State

of West Bengal v. Kesoram Industries Ltd. and Ors. [(2004) 10 SCC201].

In  Pratap  Singh v.   State of  Jharkhand and Anr.  [(2005)  3 SCC 551]

wherein this court directed to interpret the Juvenile Justice Act in light of

the Constitutional  as  well  as  International  Law operating  in  the  field.

{See  also   Centrotrade  Minerals  and  Metal  Inc.   v.    Hindustan  Copper   

Limited [(2006)  11  SCC  245];  State  of  Punjab  and  Ors.     v.   Amritsar   

Beverages  Ltd.  and Ors. [2006 (7)  SCALE 587];  State  of  Punjab and

Anr. v. Devans Modern Brewaries Ltd. and Anr. [(2004) 11 SCC 26] and

Anuj Garg and Ors.     v.   Hotel Association of India and Ors.   [(2008) 3 SCC

1]}.

However,  applicability  of  the  International  Conventions  and

Covenants,  as also the resolutions,  etc.  for the purpose of interpreting

domestic statute will depend upon the acceptability of the Conventions in

question.  If the country is a signatory thereto subject of course to the

provisions  of  the  domestic  law,  the  International  Covenants  can  be

utilized.  Where International Conventions are framed upon undertaking

56

a great deal of exercise upon giving an opportunity of hearing to both the

parties  and  filtered  at  several  levels  as  also  upon  taking  into

consideration the different societal  conditions in different  countries by

laying down the minimum norm, as for example, the ILO Conventions,

the court would freely avail the benefits thereof.   

Those Conventions to which India may not be a signatory but have

been  followed  by  way  of  enactment  of  new  Parliamentary  statute  or

amendment  to  the  existing  enactment,  recourse  to  International

Convention is permissible.

This  kind  of  stance  is  reflected  from the  decisions  in  PUCL v.

Union  of  India, [(1997)  3  SCC 433],  John  Vallamattom v.  Union  of

India, [(2003) 6 SCC 611],  Madhu Kishwar v. State of Bihar [(1996) 5

SCC 125], Kubic Darusz v. Union of India, [(1990) 1 SCC 568], Chameli

Singh v. State of U.P., [(1996) 2 SCC 549], C. Masilamani Mudaliar v.

Idol of Sri  Swaminathaswami Thirukoil, [(1996) 8 SCC 525],  Apparel

Export Promotion Council v. A.K. Chopra, [(1999) 1 SCC 759],  Kapila

Hingorani Vs. State of Bihar [(2003) 6 SCC 1], State of Punjab & Anr.

Vs. M/s. Devans Modern Breweries & Anr.     [2003 (10) SCALE 202] and

57

Liverpool & London S.P. & I Asson. Ltd. Vs. M.V. Sea Success I [2003

(10) SCALE 1].

Furthermore,  as  regards  the  question  where  the  protection  of

human  rights,  environment,  ecology  and  other  second-generation  or

third-generation  rights  is  involved,  the courts  should  not  be loathe  to

refer to the International Conventions.   

LAW IN OTHER COUNTRIES

Reference to laws to other jurisdictions stricto sensu may not be

apposite,  where the scheme of the Act/Statute is different.   Where the

statute is differently worded, same or similar interpretation may not be

possible.   

We have  noticed  the  laws  operating  in  other  countries  only  to

highlight that broadly it is in two forms, namely:

(a) free to air broadcasting does not require a copyright licence;

58

(b) a  free  to  air  broadcaster  requires  a  licence  –  however  to

commence  broadcast  all  that  he  has  to  do  is  to  give  an

undertaking to pay a reasonable sum which in the event of

dispute will be decided by a competent tribunal.

Australian Law

Under  Section  109  of  the  Australian  Copyright  Act,  the  form

adopted is in the same form as in (b) above.  The additional feature of the

law is that the royalty for broadcasting of published sound recording is

frozen at a ceiling of 1% of the gross earnings of the broadcaster during

the specified period.  There are also provisions for compulsory licensing.  

China

China  has  the  form  (a)  above  for  domestic  recordings.   They

however,  follow  the  Berne  Convention  for  International  recordings.

These domestic recordings can be broadcasted on the radio or television

without any licence or payment.  Even a commercial broadcast is in form

(b) above.  

Japan

59

Japan has form (b) above.  The Director General of the Cultural

Affairs Agency will determine the compensation required to be paid by a

Broadcaster.   Non-profit  transmission of works already made public is

exempted from paying any royalty.

United Kingdom  

In  U.K.  statutory  licensing  and  compulsory  licensing  exists.

Copinger & Skone James clearly says :

‘….In the case of a statutory licence the rate is fixed by law, in the case of a compulsyr licence the rate is left to be negotiated,  but in neither case can use be refused or prevented….’.”

[Emphasis supplied]

It  is  of  some  significance  to  note  that  although  it  has  been

contended by Mr. Divan that the Scheme of English Statute is different,

reliance has been placed by him on some English decisions to which we

may refer to a little later.  

ESSENTIAL FEATURES OF THE COPYRIGHT ACT

60

The Act seeks to maintain a balance between the interest of the

owner of the copyright in protecting his works on the one hand and the

interest of the public to have access to the works, on the other. The extent

to  which the  owner is  entitled to  protection in regard to his  work for

which he has obtained copyright and the interest of the public is a matter

which would depend upon the statutory provisions.   

Whereas the Act provides for exclusive rights in favour of owners

of the copyright, there are provisions where it has been recognized that

public has also substantial interest in the availability of the works.  The

provisions relating to grant of compulsory license must be viewed having

regard to the aforementioned competing rights wherefor an appropriate

balance has to be stuck.  For the said purpose, we may notice the broad

features of the Act.   

Section 16 of the Act provides that no person shall be entitled to

copyright otherwise than under and in accordance with the provisions of

the  Act.   Section  14  defines  the  expression  “copyright”  to  mean  the

exclusive right to do or authorize the doing of specific things in respect

of a work, as detailed in that section.  

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The primary method that an owner of copyright employs to exploit

the copyright and to make this work available to the public is through the

vehicle of voluntary licenses in terms of Section 30 of the Act.   

The freedom to contract is the foundation of economic activity and

an essential aspect of several Constitutional rights including the freedom

to carry on trade or business guaranteed under Article 19(1)(g) and the

right to property under Article 300A of the Constitution of India.  But the

said right is not absolute.  It is subject to reasonable restrictions.   

Section 30 enables the owner of the copyright to grant any interest

in  the copyright  by a license in writing signed by him or by his  duly

authorized agent.   

The underlying philosophy of the Copyright Act is that the owner

of the copyright is free to enter into voluntary agreement or licenses on

terms mutually acceptable to him and the licensee.  The Act confers on

the copyright owner the exclusive right to do the various acts enumerated

in Section 14.  An infringement of copyright occurs if one of those acts is

done  without  the  owner’s  license.   A  license  passes  no  interest,  but

merely makes lawful that which would otherwise be unlawful.  The Act

also expressly recognizes the notion of an “exclusive license” which is

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defined in Section 2(j).  But, that does not mean, as would be noticed

from  the  discussions  made  hereinafter,  that  it  would  apply  in  all

situations irrespective of the nature of right as also the rights of others.  It

means a license which confers on the licensee, to the exclusion of all

other persons (including the owner of the copyright) any right comprised

in the  copyright  in  a work.   An exclusive licensee has  specific  rights

under the Act such as the right to have recourse to civil remedies under

Section 55 of the Act.  This Scheme shows that a copyright owner has

complete freedom to enjoy the fruits of his labour by earning an agreed

fee or royalty through the issuance of licenses.  Hence, the owner of a

copyright has full freedom to enjoy the fruits of his work by earning an

agreed fee or royalty through the issue of licenses.   But,  this right,  to

repeat,  is  not  absolute.   It  is  subject  to  right  of  others  to  obtain

compulsory  licence  as  also  the  terms  on  which  such  licence  can  be

granted.

COPYRIGHT SOCIETY

The provisions with respect to Copyright Societies are contained

in Chapter VII of the Act which in its present form was introduced by the

Copyright (Amendment) Act, 1994.  Section 33 of the Act provides for

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the registration of a Copyright Society.  Section 34 of the Act empowers

a Copyright Society to accept from the owner exclusive authorization to

administer any rights in any work by issue of licenses or collection of

license fee or both.  A Copyright Society may issue voluntary licenses

under Section 30, collect fees in pursuance of such licenses, distribute

such fees  amongst  owners  of  rights,  and  perform any other  functions

consistent  with  the  collective  control  of  the  owners  whose  rights  it

administers.

The Copyright Society is required to frame a scheme to determine

the  quantum of  remuneration  payable  to  individual  copyright  owners

having  regard  to  the  number  of  copies  of  the  work  in  circulation.

[Section 34A(2)]

Chapter V of the Copyright Rules, 1958 makes detailed provisions

with respect to the conduct of business by Copyright Societies.  Rule 14J

requires  that  a Copyright  Society shall  frame a scheme of tariff  to be

called a “Tariff Scheme” setting out the nature and quantum of fees or

royalties which it proposes to collect in respect of such copyright or other

rights  administered  by  it.   Rule  14K requires  a  Copyright  Society  to

frame a “Distribution Scheme” setting out the procedure for collection

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and  distribution  of  royalty  specified  in  the  Tariff  Scheme among  the

owners of copyright.  Any distribution under the Distribution Scheme is

required to be in the proportion to the income of the Copyright Society

from actual use of the work or works of each owner of rights.”

COMPULSORY LICENCE  

The scheme of the Act affirms the freedom to contract as being the

primary machinery  by  which  the  copyright  owner  publishes  his  work

through a voluntary license regime in terms of Section 30.  Compulsory

licenses are an exception to the general freedom of the copyright owner

to contract.   

Section 31 deals with compulsory license in works withheld from

the public and the submissions relating to this provisions are set out in

detail in the next section of this outline of submissions.

Section 31A empowers the Copyright Board to issue a compulsory

license in respect of an unpublished Indian work or a translation thereof

in any language, whose author is dead or unknown or cannot be traced or

the owner of copyright in such work cannot be found.  Section 31A(4)

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empowers  the  Board  to  hold  an  enquiry  and  direct  the  Registrar  of

Copyrights  to  grant  to  the  applicant  a  license  to  publish  the  work  or

translation, subject to the payment of such royalty and subject to such

other terms and conditions as the Copyright Board may determine.

Section 32 empowers the Copyright Board to issue a compulsory

license to produce and publish a translation of literary or a dramatic work

in any language after a period of 7 years from the first publication of the

work.

Section 32A empowers the Copyright Board to grant a compulsory

license where after the expiry of the relevant period from the date of the

first  publication  of  an edition  of  a literary,  scientific  or  artistic  work,

copies of such edition are not made available in India.

Section 32B provides for the termination of a compulsory license

where  it  is  issued  under  Section  32(1A)  or  Section  32A,  on  the

fulfillment of the conditions mentioned in that Section.

Rule 9 of the Copyright Rules prescribed the manner in which the

Copyright  Board  shall  determine  royalties  payable  to  the  owner  with

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respect to a compulsory license for a translation under Section 32.  Rule

11D  provides  for  the  manner  in  which  the  Copyright  Board  shall

determine royalties payable to the owner of the copyright in respect of

compulsory licenses issued under Section 31A, Section 32 and Section

32A.

Rule 11C (4) provides that where there are more applicants than

one  seeking  a  compulsory  license  for  translation  of  a  work  or  for

reproduction of the work or for publication of an unpublished work, then

the Copyright Board make grant the compulsory license to such one of

the  applicants,  as  in  the  opinion  of  the  Board,  would  best  serve  the

interest of the general public.  

Chapter VI  relate to grant of licence, which can be divided into

two  parts;  licences  by  owners  of  copyright  and  compulsory  licenses.

Compulsory licences can be granted by the Copyright Board subject to

the limitations contained therein.  It cannot be said to be an exception to

the general rule in the strict sense of the term as the provisions relating to

grant of license by owners of Copyright and compulsory licenses operate

in different fields.  It may be true that while passing an order for grant of

compulsory licenses, the relevant factors as laid down therein must be

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kept in mind which would include the right of the owner of the copyright

as a part of the right of property, but where a statute is to be construed as

a balancing statute, the situation may be different.    

CONSTRUCTION OF SECTION 31 OF THE ACT

The broad requirements of Section 31 are as under:

“(a) The  subject  work  must  be  an  Indian  work whose term of copyright is subsisting;

(b) The  Indian  work  must  be  one  that  has  been published or performed in public;

(c) The owner of the copyright  in the work must have

(i) refused to republish or allow republication of the work or have refused to allow the performance of the work and by reason of such refusal the work is withheld from the public; or

(ii) refused to allow communication to the public by broadcast, of such work or in the case of a sound recording the work recorded  in  such  sound  recording,  on  terms  which  the complainant considers reasonable; and

(d) The Copyright Board is satisfied that the grounds for refusal are not reasonable.”

Significantly, in between the clauses (a) and (b), the word ‘or’ has

been used.  It must be read disjunctively and not conjunctively.  Even

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otherwise,  reading  the  said  provision,  conjunctively  is  not  possible.

Clause (a) refers to republication or allowing republication of the work,

etc.  Clause (b) refers to refusal to allow communication to the public in

the case of a broadcast or in the case of the sound recording.   

What is the meaning of the word ‘refusal’

The dictionary meaning of ‘refusal’ whereupon reliance has been

placed by Mr. Divan may, at the outset, be noticed.   

“refusal.  1.  The  denial  or  rejection  of  something offered or demanded< the lawyer’s refusal to answer questions was based on the attorney-client privilege>. 2. an opportunity to accept or reject something before it is offered to others; the right or privilege of having this  opportunity  <she  promised  her  friend  the  first refusal on her house>

(See Black’s Law Dictionary, Seventh Edition)

The meaning of a word must be attributed to the context in which

it is used.  For giving a contextual meaning, the text of the statute must

be kept in mind.  An act of refusal depends upon the fact of each case.

Only because an offer is made for negotiation or an offer is made for

grant  of  license,  the  same per  se  may not  be  sufficient  to  arrive at  a

conclusion  that  the  owner  of  the  copyright  has  not  withheld  its  work

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from public.  When an offer is made on an unreasonable term or a stand

is taken which is otherwise arbitrary, it may amount to a refusal on the

part of the owner of a copyright.   

When the owner of a copyright or the copyright society exercises

monopoly in it, then the bargaining power of an owner of a copyright and

the proposed licensee may not be same.  When an offer is made by an

owner  of  a  copyright  for  grant  of  license,  the  same  may  not  have

anything  to  do  with  any  term or  condition  which  is  wholly  alien  or

foreign therefor.   An unreasonable  demand if  acceded to,  becomes an

unconstitutional contract which for all intent and purport may amount to

refusal  to  allow communication to  the public  work recorded in  sound

recording.  A de jure offer may not be a de facto offer.

Although the term ‘work’ has been used both in clauses (a) and (b)

of sub-Section (1) of Section 31, the same has been used for different

purpose.   The  said  term ‘work’  has  been  defined  in  Section  2(y)  in

different  contexts.   It  enumerates  the  works  which  are:  (a)  a  literary,

dramatic, musical or artistic work; (b) a cinematograph film; (iii) a sound

recording.  Thus, a literary work ex facie may not have anything to do

with sound recording.

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There  are  indications  in  the  Act  particularly  having  regard  to

Sections 14(1)(a) and 14(1)(e) thereof that they are meant to operate in

different fields.  They in fact do not appear to be operating in the same

field.  Clause (a) refers to publication or republication of the work.  It

may be in print media or other medias.  Clause (b), however, refers to

broadcast alone.  Sound recording is a part of it. Sub-clauses (i) to (vii)

of sub-clauses (a) of sub-Section (1) of Section 14 and sub-clauses (i) to

(iii) of sub-clause (e) conferred different meanings of the word copyright.

Whereas clause (a) refers to work in general, clause (b) refers to work

recorded in such sound recording, which in turn means the recording of

sounds  from which  such sounds  may be  reproduced regardless  of  the

medium on which such recording is made or the method by which the

sounds are produced.  Clause (b) ex facie does not fit in the scheme of

clause (a).  

Interpretation of clause must be given effect to having regard to

the  limitations  contained  therein,  namely,  unless  context  otherwise

requires.

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Communication  to  the  public  is  possible  by  way  of  diffusion.

Explanation  appended  to  Section  2(ff)  clearly  shows  the  extensive

meaning of the said  term.  Publication and republication of a work in

general  may be different  from communication  of  a  work recording  in

sound  recording.   The  use  of  words  ‘such  work’  also  assumes

significance.  The said words must be understood having regard to the

fact  that  the  sound  recording  is  also  a  work.   If  it  is  accepted  that

voluntary licenses have been entered into by the owners with All India

Radio and some other Radio Broadcasters, then it is sufficient for closing

the doors on another person to approach the Copyright Board.  One may

as well say that if it is provided to a satellite channel or a space radio, the

same  also  would  subserve  the  purpose  for  refusing  to  grant  an

application under Section 31 of the Act.   

A  contextual  interpretation  of  the  provisions  would  lead  us  to

consider the ground realities.  F.M. radios are played for every city.  The

word ‘work’   in  the  context  of  broadcast  must  be  understood  having

regard to the fact that there are 150 F.M. licenses out of which about 93

are working.  There are 300 broadcasters working in almost all the big

cities in India.  The word ‘public’ must be read to mean public of all

parts of India and not only a particular part thereof.  If any other meaning

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is  assigned,  the  terms  ‘on  terms  which  the  complaints  considers

reasonable’  would  lose  all  significance.  The  very  fact  that  refusal  to

allow  communication  on  terms  which  the  complainant  considers

reasonable have been used by the Parliament indicate that unreasonable

terms would  amount  to  refusal.  It  is  in that  sense  the expression  ‘has

refused’ cannot be given a meaning of outright rejection or denial by the

copyright owner.   

PPL and SCIL might have been called upon the broadcasters  to

enter into licenses and were willing to license their repertoire.  But their

contention was that if such terms are unreasonable, it amounted to refusal

which would attract Section 31 of the Act.  The word ‘communicate the

work to the public  by broadcast” is  of significance.  It  provides for  a

mode of communication.  Thus, only because a Registrar of a Copyright

would  be directed  to  grant  a  licence to  communicate  the  work  to  the

public by broadcast would not mean that only a single licence shall be

granted.  The Board acting as a statutory authority can exercise its power

from time to  time.  It  is  therefore  not  correct  to  contend that  having

regard  to  the  provisions  of  sub-section  (2)  of  Section  31,  compulsory

licence can be granted only to one and not to more than one broadcaster.

We would  deal  with  this  provision  at  some  details  a  little  later.   In

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response to a query as to whether when an application for compulsory

licence is filed any publication thereof is made or not; we are informed

that no such rule or practice exists.  Apart from the fact that application

for grant of compulsory licence in the matter of sound recording may be

by  different  persons;  the  wide  range  of  it  has  been  noticed  by  us

hereinbefore.   It  may  for  different  parts  of  the  country  nay  different

cities.  If a compulsory licence is granted only once covering every single

part of the country, the same cannot be lead to a conclusion that no other

person can approach the Board.  

Section 31(1)(b) in fact does not create an entitlement in favour of

an individual broadcaster.  The right is to approach the Board when it

considers that the terms of offer for grant of license are unreasonable.  It,

no doubt, provides for a mechanism but the mechanism is for the purpose

of  determination  of  his  right.   When a claim is  made in  terms of  the

provisions of a statute, the same has to be determined.  All cases may not

involve narrow commercial interest.  For the purpose of interpretation of

a statute, the court must take into consideration all situations including

the interest of the person who intends to have a licence for replay of the

sound recording in respect whereof another person has a copyright.  It,

however, would not mean that all and sundry can file applications.     

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The mechanism to be adopted by the Board for determining the

right of a complainant has been provided under the Act.  

Explanation appended to Section 31 also plays an important role as

it seeks to make a distinction between an artistic work on the one hand

and a cinematographic films or sound recording on the other.   We are

not concerned therewith at this stage.   

Admittedly  in  terms  therof  the  principles  of  natural  justice  are

required to be complied with and an enquiry has to be held.  The extent

of such enquiry will depend upon the facts and circumstances of the case.

A finding has to be arrived at that the grounds of refusal by an owner of a

copyright  holder  is  not  reasonable.  Only  upon  arriving  at  the  said

finding, the Registrar of copyright would be directed to grant a license

for the said purpose. The amount of compensation payable to the owner

of  the  copyright  must  also  be  determined.   The  Board would  also  be

entitled to determine such other terms and conditions as the Board may

think fit  and proper.  Registration is granted only on payment of such

fees and subject to compliance of the other directions.   

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RIGHT TO PROPERTY – IS THE CONCEPT APPLICABLE

An owner of a copyright indisputably has a right akin to the right

of property.  It  is also a human right.  Now, human rights have started

gaining a multifaceted approach.  Property rights vis-à-vis individuals are

also  incorporated  within  the  ‘multiversity’  of  human  rights.  As,  for

example, any claim of adverse possession has to be read in consonance

with  human  rights.  The  activist  approach  of  the  European  Court  of

Human Rights is quite visible from the judgment of Beaulane properties

Ltd. v.  Palmer [2005 EWHC 817(Ch.)]  and  J. A. Pye (Oxford) Ltd. v.

Graham [(2002) 3 ALL ER 865].  

This Court recognized need of incorporating the same principle for

invoking  the  rule  of  strict  construction  in  such  matters  in  P.T.

Munichikkanna Reddy and Ors. v.  Revamma and Ors. [(2007) 6 SCC

59] stating:

" Adverse possession is a right which comes into play not just because someone loses his right to reclaim the property  out  of  continuous  and  willful  neglect  but also  on  account  of  possessor's  positive  intent  to dispossess. Intention to possess can not be substituted for  intention  to  dispossess.  Mere  possession  for howsoever  length  of  time  does  not  result  in converting  the  permissible  possession  into  adverse possession."

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Further, in Peter Smith v. Kvaerner Cementation Foundations Ltd.

[[2006] EWCA Civ 242] the court allowed the appellant to reopen the

case despite  a delay of four  years as  he had been denied the right  to

which  Article  6  of  the  European  Convention  on  Human Rights  ("the

Convention") entitled him – to a fair hearing before an independent and

impartial tribunal.

But the right of property is no longer a fundamental right.  It will

be subject to reasonable restrictions.   In  terms of Article 300A of the

Constitution,  it  may  be  subject  to  the  conditions  laid  down  therein,

namely, it may be wholly or in part  acquired in public interest and on

payment of reasonable compensation.   

PUBLIC INTEREST – PUBLIC POLICY

What would be a public interest?  Would it depend upon the facts

and circumstances of each case and the provisions of the statute?   

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General meaning of the word "public policy" has always been held

to be an unruly horse by this Court. [See Gherulal Parakh v. Mahadeodas

Maiya and Ors. [1959 Supp (2) SCR 406]. This case was referred to in

the recent decision of this court in Devinder Singh and Ors. Vs. State of

Punjab and Ors. [AIR 2008 SC 261]

The  right  to  property,  therefore,  is  not  dealt  with  its  subject  to

restrict when a right to property creates a monopoly to which public must

have access.   withholding the same from public may amount to unfair

trade practice.  In our constitutional Scheme of statute monopoly is not

encouraged.  Knowledge must be allowed to be disseminated.  An artistic

work  if  made  public  should  be  made  available  subject  of  course  to

reasonable terms and grant of reasonable compensation to the public at

large.    

ROYALTY AND COMPENSATION

Are the terms “royalty” and “compensation” are not synonymous?

“Royalty” means  the remuneration  paid  to  an author  in  respect  of  the

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exploitation of a work, usually referring to payment on a continuing basis

(e.g. 10 per cent of the sale price) rather than a payment consisting of a

lump sum in consideration of acquisition of rights.  May also be applied

to  payment  to  performers.  (See  ‘World  Copyright  Law’ (2nd Edn)  by

J.A.L. Sterling).

The word ‘compensation’, however, must have been used keeping

in view the fact  that  if  it  is  a statutory grant;  it  is  a case of  statutory

licence.   We are not  unmindful  of the fact  in cases  of other  statutory

licenses, the word ‘royalty’ has been used.  Even the word ‘usually’ has

been used. Mr. Divan himself has referred to Rule 11A and Form IIA

appended to the Rules of 1958. Clauses (10) and (11) of the Form which

have validly been made used the word ‘royalty.   

“10. Rate of royalty, which the applicant  considers reasonable, to be paid to the copyright owner.  

11. Means  of  the  applicant  for  payment  of  the royalty”

The  legislature  therefore  for  all  intent  and  purport  equates

‘compensation’ with  ‘royalty’.   In the context  of  the Act,  royalty is  a

genus and compensation is a species.  Where a licence has to be granted,

it  has  to  be for  a  period.   A ‘compensation’  may be  paid  by way of

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annuity.  A ‘compensation’ may be held to be payable on a periodical

basis,  as  apart from the compensation,  other  terms and conditions  can

also be imposed.   The compensation must  be directed to be paid with

certain other terms and conditions which may be imposed.   

MARGINAL NOTE

It was urged that for proper construction of Section 31 of the Act,

reference  to  marginal  note  is  permissible.   Strong  reliance  has  been

placed by Mr. Divan on K.P. Varghese v. Income-tax Officer, Ernakulam

[(1981) 4 SCC 173] to contend that the marginal note to a section can be

relied upon for indicating the drift  of the section or to show what the

section is dealing with.  It is however, also well settled that where the

statute  is  clear,  marginal  note  may not  have  any  role  to  play.   {See

Bhinka & ors. v. Charan Singh [1959 Supp.  (2) SCR 798] .   

PARLIAMENTARY INTENT

The intention of the Parliament, it is trite, must be ascertained from

the plain reading of the Section.  The intention is to treat works, which

have  been  “withheld  from  the  public”  differently  from  the  “right  to

broadcast”.   The  right  to  broadcast  is  a  ephemeral right.   It  requires

80

special  treatment  as  it  confers  upon  every  person,  who  wishes  to

broadcast a work or the work recorded in a sound recording, the right to

do so is either by entering into a voluntary agreement to obtain a licence

on such terms which appear to be reasonable to him or when the term

appears to be unreasonable to approach the Board.  

We wish the statute would have been clear and explicit.  But only

because  it  is  not,  the  courts  cannot  fold  its  hands  and  express  its

helplessness.

When such a complaint is made, it  confers the jurisdiction upon

the Board.  It may ultimately allow or reject the complaint but it cannot

be said that the complaint itself is not maintainable.   

INTERPRETATION OF SECTION 31(2)

This takes us to the interpretation of Section 31(2).  It is attracted

in a case  where there are more than  one  applicants.   The question of

considering the respective claim of the parties would arise if they tread

the same ground.  The same, however,  would not  mean that  only one

person  is  entitled  to  have  a  licence  for  all  time  to  come  or  for  an

indefinite  term even  in  perpetuity.    A licence  may be  granted  for  a

81

limited  period;  if  that  be  so  another  person  can  make  such  an

applicatioin.  Sub-section (2) of Section 31 would lead to an anomalous

position if it is read literally.  It would defeat the purport and object of

the Act.  It has, therefore, to be read down.  P purposive construction

therefor may be resorted to.   

In  New India Assurance Company Ltd.   v.  Nusli Neville Wadia

and Anr. [2007 (14) SCALE 556,  (2008) 3 SCC 279], this court opined:

“With a view to read the provisions of the Act in a proper  and effective  manner,  we are  of  the  opinion that literal interpretation, if given, may give rise to an anomaly or absurdity which must be avoided. So as to enable  a  superior  court  to  interpret  a  statute  in  a reasonable manner, the court must place itself in the chair of a reasonable legislator/ author. So done, the rules of purposive construction have to be resorted to which  would  require  the  construction  of  the  Act  in such a manner so as to see that the object of the Act fulfilled;  which  in  turn  would  lead  the  beneficiary under the statutory scheme to fulfill its constitutional obligations as held by the court inter alia in  Ashoka Marketing Ltd. (supra).”

Barak in his exhaustive work on ‘Purposive Construction’ explains

various  meanings  attributed  to  the  term 'purpose'.  It  would  be  in  the

fitness of discussion to refer to Purposive Construction in Barak's words:

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“Hart  and  Sachs  also  appear  to  treat  'purpose'  as  a subjective  concept.  I  say  'appear'  because,  although Hart  and  Sachs  claim  that  the  interpreter  should imagine  himself  or  herself  in  the  legislator's  shoes, they introduce two elements of objectivity: First, the interpreter  should  assume  that  the  legislature  is composed  of  reasonable  people  seeking  to  achieve reasonable goals in a reasonable manner; and second, the  interpreter  should  accept  the  non-rebuttable presumption  that  members  Page  0184  of  the legislative  body sought  to  fulfill  their  constitutional duties  in  good  faith.  This  formulation  allows  the interpreter to inquire not into the subjective intent of the author, but rather the intent the author would have had, had he or she acted reasonably.”

(See Aharon Barak, Purposive Interpretation in Law (2007) at pg. 87)  

In  Bharat Petroleum Corporation Ltd. v.  Maddula Ratnavalli and

Ors. [(2007) 6 SCC 81], this Court held:

“The  Parliament  moreover  is  presumed to  have enacted  a reasonable  statute  (see  Breyer,  Stephen  (2005):  Active Liberty:  Interpreting  Our  Democratic  Constitution,  Knopf (Chapter on Statutory Interpretation - pg. 99 for Reasonable Legislator Presumption).”

The  provisions  of  the  Act  and  the  Rules  in  this  case,  are,  thus

required  to  be  construed  in  the  light  of  the  action  of  the  State  as

envisaged under Article 14 of the Constitution of India. With a view to

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give effect thereto, the doctrine of purposive construction may have to be

taken recourse to. [See a;sp  Oriental Insurance Co. Ltd. v.  Brij Mohan

and Ors [(2007) 7 SCC 56]”

Furthermore, the court while interpreting a statute will put itself in

the armchair of the reasonable legislature, all statutes must be presumed

to be reasonable.  It is now a trite law that literal interpretation should be

avoided when  it  leads  to  absurdity.   If  it  is  to  be  held  that  once  the

compulsory licence is granted in respect of a sound recording, the Board

loses its jurisdiction for all time to come, it will lead to an absurdity. The

statute does not contemplate such a position. The statute on the one hand

not only in terms of General Clauses Act but also having regard to the

individual  complaints  which  a  person  may  have  as  regards  the

unreasonableness  of  the  terms  impose  upon  him by the  owner  of  the

copyright must be held to be entitled to approach the Board as and when

any cause of action arises therefor.  It therefore must be held that sub-

Section  (2)  of  Section  31  is  relatively  directed  to  clause  (a)  and  not

clause (b).   

Mr.  Divan  relied  on  Indian  Administrative  Services  (SCS)

Association, U.P. & ORS. v.  Union of India & ORS.   [1993 Supp. (1)

SCC 730] wherein it has been held that:

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“9. Thus it is settled law that where the intention of statutory  amendment  is  clear  and expressive,  words cannot be interpolated. In the first place they are not, in  the  case,  needed.  If  they  should  be  added,  the statute  would more than likely fail  to  carry out  the legislative  intent.  The  words  are  the  skin  of  the language  which  the  legislature  intended  to  convey. Where the meaning of the statute is clear and sensible, either with or without omitting the words or adding one,  interpolation  is  improper,  since  the  primary purpose  of  the  legislative  intent  is  what  the  statute says  to  be  so.  If  the  language  is  plain,  clear  and explicit,  it  must be given effect  and the question of interpretation does not  arise. If found ambiguous or unintended, the court can at best iron out the creases. Any wrong  order  or  defective  legislation  cannot  be righted merely because it is wrong. At best the court can quash it, if it violates the fundamental rights or is ultra vires of the power or manifestly illegal vitiated by fundamental laws or gross miscarriage of justice. It could thus be held that  the legislature intended that the  First  Amendment  Rules  would  operate prospectively from February 3, 1989, the date of their publication  in  the  Gazette  of  India.  Its  policy  is explicit  and unambiguous.  Rule  3(3)(ii)  intended  to remedy  the  imbalances  while  at  the  same  time  the proviso  intended  to  operate  prospectively  to  avert injustice  to  the  officers  recruited/promoted  earlier than  the  officer  promoted  later  to  that  date.  The proviso carved out an exception to ward off injustice to the officers that became members of I.A.S. earlier to those dates.”

In this case, however, the meaning of the Statute is neither clear

nor sensible.  It is a statute where a purposive construction is warranted.

It is a case where sub-Section (2) should be kept confined to clause (a)

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for that purpose.  The statute has to be read down.  It is not a case of

improper  interpolation  so  as  to  take  away  a  primary  purpose  of  the

legislative intent.  It is expedient to give effect to the intent of the statute.

This itself  says that creases can be ironed out.  While undertaking the

said exercise, the court’s endeavour would be to give a meaning to the

provisions and not render it otiose.  We are, therefore, of the opinion that

Section 31(2) refers to case falling under clause (a) of Sub-section (1) of

Section 31 and not clause (b) thereof.  

PRINCIPLES OF VALUATION

We have, moreover, been called upon to lay down the principles of

evaluation.  We decline to do so.  We have been taken through various

judgments of different jurisdictions.  We have noticed hereinbefore that

the  scheme  therein  is  different.   The  Tribunal  exercises  a  limited

jurisdiction in India. Different cases are required to be considered on its

own merits.  What would be reasonable for one may not be held to be

reasonable for the other.  The principles can be determined in a given

situation.  The Bombay High Court has remitted the matter back to the

Board for the said purpose.  We endorse the views of the Bombay High

Court.   

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DISCRETIONARY JURISDICTION

The other question which arises is as to whether the discretionary

jurisdiction should have been exercised in favour of the appellant.  It was

urged that keeping in view the fact that ENIL infringed the copyright, it

was not entitled to an injunction.  Reliance has been on  Phonographic

Performance  Ltd.  vs.  Maitra  [(1998)  Fleet  Street  Reports  749 at  770-

773].   The  general  principle  of  grant  of  injunction  came  up  for

consideration before the Court of Appeal.  Therein, it was held that an

owner may exercise and exploit his proprietary right by licensing some

and not  others.   He may charge  whatever  he  wishes.  Such is  not  the

position  in  India.   Therein,  the  defendant  did  not  take  part  in  the

proceedings.  It was, inter alia, from that angle, held that the court could

still exercise discretion.   

The court of appeal held:

“Use  of  an  injunction  by  PPL  to  obtain  money  to obtain money to which they are not entitled would be an  abuse,  but  there  is  no  evidence  that  that  ever occurs.  Where unauthorized use of PPL’s copyright is  taking place,  we do not  believe it  is  an abuse  to refuse to licence that copyright without an appropriate payment for past use and an agreement for future use.

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Nor do we consider  it  an  abuse  for  PPL to  require compliance  with  an  injunction  either  by  the  person refraining from using the repertoire or by payment for such use that has taken place and will take place.”

Apart from the fact that we are not dealing with a case where an

order of injunction is required to be issued; as indicated hereinbefore, the

question before the Board was as to whether there was an abuse in the

sense that unreasonable amount was being claimed by way of royalty.   

CONCLUSION

As  it  was  a  case  of  abuse,  the  Board  had  the  jurisdiction  to

entertain any application for grant of compulsory licence.  How far and

to what extent  appellant  has infringed the right of the respondent is  a

matter which may be taken into consideration by the Board.  A suit was

filed and injunction was granted.  Apart from the fact that the appellant

offered to take a license held negotiations with the respondents in the suit

as soon as it came to know that Super Cassettes is not a member of PPL,

it gave an undertaking.  Each case must be considered on its own facts.   

However, we do not approve the manner in which the Board has

dealt with the matter.  It has refused to examine the witnesses.  It took up

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the  matter  on  a  day  for  hearing  which  was  fixed  for  production  of

witnesses.  We, therefore, are of the opinion that the order of the Board

should be set aside and the matter be remitted to the Board again for the

consideration of the matter afresh on merit.

These appeals are allowed with the aforementioned directions.  In

the facts and circumstances of the case, the parties shall  pay and bear

their own costs.  

……………….…..………….J. [S.B. Sinha]

..………………..………… …J.     

[Lokeshwar Singh Panta]

New Delhi; May 16, 2008

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