Breaking: Delhi High Court dismisses the 2006 suit filed by IPRS against Aditya Pandey and others, imposes costs of INR 2 Lacs [READ JUDGEMENT]

The Delhi High Court today dismissed the suit which was filed by the Indian Performing Rights Society (IPRS) against Aditya Pandey and others in 2006. Read judgement here.

Key Highlights of the judgement:

• Jurisdiction – IPRS had filed an application under Order VII Rule 10 of the CPC for return of the plaint in light of the dicta in the Supreme Court’s decision of IPRS vs Sanjay Dalia [(2015) 10 SCC 161] i.e. having realized that the Delhi High Court does not have the territorial jurisdiction over the matter. Justice Rajiv Sahai Endlaw relying on Supreme Court’s decision in Harshad Chiman Lal Modi vs DLF Universal Ltd observed that there is no lack of subject jurisdiction of the court in the present case. He pointed out that there was no impediment to the court in proceeding with the suit since the defendants had given up the plea on objecting to the territorial jurisdiction of the court. Justice Endlaw further observed that it is a well settled principle of law and public policy and essential part of rule of law that a person shall not be vexed twice for the same relief. “The plaintiff, by instituting the suit in this Court has vexed the defendants in this Court and in the appeals arising from the suit, for the last twelve years, and for this reason also I am unable to find any equity in favour of the plaintiff for allowing the plaintiff to seek return of the plaint for filing the same in the High Court of Bombay. Rather, allowing the plaintiff to do so will tantamount to this Court allowing its machinery to be used improperly and permitting the process of law to be abused.”

• Evidence- Justice Endlaw observed that the suit must be necessarily dismissed since -(i) the Plaintiff failed to lead any evidence (ii) the evidence of plaintiff having already been closed (iii) the order having attained finality and (iv) the onus of the main issues being on the plaintiff.
• Costs- The Court imposed costs of INR 2,00,000/- to be paid by the plaintiff to the defendant.

Background of the dispute:

• In 2006, IPRS had filed a suit against Synergy Media Entertainment Ltd a company involved in broadcasting business, its Senior Manager Aditya Pandey, and others and sought permanent injunction and other consequential reliefs for infringing the copyright of IPRS. The suit was clubbed with another suit filed by IPRS and PPRS against CRI Events, an event management company which had organized an event where works comprising of the plaintiffs’ repertoire were communicated to the public.
• The main issue before the court was whether the defendants required to obtain permission only from the copyright owner of the derivative work (sound recording) to broadcast the work or additionally required a similar permission from the owner of the underlying works. IPRS submitted that when recorded music is played in public, two licenses are payable, namely, one to IPRS for performing or communicating to the public the musical composition/ lyrics and the other to PPL for communicating the sound recording of the music to the public by playing the sound recording. The Defendants relying on the 1977 IPRS vs EIMPAA case had submitted that once the author of underlying works parts with his copyrights in the making of a film or sound recording, that copyright is subsumed with the right directly flowing from Section 14(d) and (e), which entitle the copyright owner of the film or sound recording to communicate the entire film/ sound recording which includes either the entire song or part thereof to public and he cannot be compelled to pay a separate authorization or license fee to the creator of the music or the song writer.
• Justice Ravindra Bhat had vide order dated July 28, 2011 disposed of the Plaintiff’s application for temporary injunction by holding that the defendants do not have to secure a license from the plaintiff with the direction that “in case the defendants wish to perform the sound recording in public, i.e. play them, a license from PPRS is essential; in case the musical works are to be communicated or performed in the public, independently, through an artiste, the license of IPRS is essential. In case the defendant wishes to hold an event involving performances or communication of works of both kinds to the public, the license or authorization of both IPRS and PPRS are necessary. The defendant is accordingly restrained from communicating any of such works to the public, or performing them, in the public, without such appropriate authorization, or licensing pending adjudication of the suit.”
• IPRS thereafter filed an appeal against the single bench order. The division bench comprising of Justice Pradeep Nandrajog and Justice S.P Garg vide judgement dated May 8, 2012 dismissed the appeal and upheld the single bench order. The division bench of the Delhi High Court had also observed that “Had the intention of Indian legislature been that the owner of a sound recording (derivative work) should not communicate the sound recording to the public without obtaining the prior authorization of the owner of the copyright in literary and musical works (original works) or that 2 permissions had to be obtained, it should have specifically manifested such intention in the Copyright Act, 1957, as has been manifested by the legislature in the United Kingdom in the CDP Act, particularly when CDP Act, 1988 prohibits the owner of copyright in sound recording from communicating the sound recording to the public stood enacted, at the time when provision relating to copyright in sound recording was amended in India in the year 1994. Faced with such situation, it is difficult to accept the stand of IPRS that 2 separate permissions would be required.”
• An appeal was filed in the SC against the division bench order which was decided by the Supreme Court in the matter of International Confederation of Societies of Authors and Composers Vs. Aditya Pandey & Ors [Civil Appeals No.9412-9413/2014] where Justice Gogoi vide order dated September 20, 2016 dismissed the appeal and upheld the Division Bench order which had held that event organizers need not secure a separate license from lyricists and musicians for playing the song in public after it has paid for the broadcasting of the song to the sound recording company. The Court however clarified, that with effect from 21.06.2012, in view of sub-section (10) of Section 19, the assignment of the copyright in the work to make sound recording which does not form part of any cinematograph film, shall not affect the right of the author of the work to claim an equal share of royalties or/and consideration payable for utilization of such work in any form by the plaintiff/respondent.
• IPRS filed the interim application under Order VII Rule 10 for return of plaint which came up for the first time before the Delhi High Court on September 29, 2016 where IPRS argued that as per the Supreme Court judgement in IPRS vs Sanjay Dalia, the plaintiff realized that it did not have territorial jurisdiction since the suit had been filed on the basis of the plaintiff having a branch office in Delhi which is not sufficient for creating jurisdiction under Section 62(2) of the Copyright Act. IPRS further pleaded that since its principal office is in Mumbai, the plaint be returned to be presented before the Bombay High Court.

 The Jurisdiction conundrum: The application under Order VII Rule 10 was filed by IPRS for return of the plaint relying on Supreme Court’s decision in IPRS vs Sanjay Dalia.

• IPRS vs Sanjay Dalia– The Supreme Court in the landmark case of IPRS vs Sanjay Dalia had held that  “the provisions of section 62 of the Copyright Act and section 134 of the Trade Marks Act have to be interpreted in the purposive manner. No doubt about it that a suit can be filed by the plaintiff at a place where he is residing or carrying on business or personally works for gain. He need not travel to file a suit to a place where defendant is residing or cause of action wholly or in part arises. However, if the plaintiff is residing or carrying on business etc. at a place where cause of action, wholly or in part, has also arisen, he has to file a suit at that place.”

The Sanjay Dalia judgement was subsequently relied by the Delhi and Bombay High Court in the following judgements:

• Ultra Home Construction Pvt. Ltd vs Purushottam Kumar Chaubey & Ors [227 (2016) DLT 320 (DB)] – The division bench of the Delhi High Court had analysed the Sanjay Dalia judgement in the Ultra Home case and illustrated four contingencies in the following table:

The Division bench further observed that “By virtue of the Supreme Court decision in Sanjay Dalia (supra) this deeming provision contained in the explanation in section 20 of the Code has been read into section 134(2) of the Trade Marks Act, 1999 and section 62(2) of the Copyright Act, 1957 for the purposes of isolating the place where the plaintiff can be said to carry on business. It will be noted that though the expression “carries on business” is used in all the three provisions (i.e., section 20 of the Code, section 134(2) of the Trade marks Act, 1999 and section 62(2) of the Copyright Act, 1957), the deeming provision contained in the Explanation in section 20 of the Code has not been expressly incorporated in the other two provisions. But, the Supreme Court has, in the said decision, given the expression “carries on business” used in relation to a corporation in the context of a defendant in section 20 of the Code the same meaning when it is used in relation to a plaintiff under the said sections 134(2) and 62(2).”

• Manugraph India Limited vs Simarq Technologies Pvt. Ltd & Ors [NS 494/2014 in Suit No. 516/2013]– Justice Gautam Patel while relying on the Sanjay Dalia judgement has held as under:

(a)a plaintiff suing under the Trade Marks Act or Copyright Act can always file the suit in the jurisdiction where he lives, works for gain or carries on business. In the context of a company, given the view in Sanjay Dalia, this would mean where the company has its principal or registered office. All issues of cause of action and situs or location of the defendant or the cause of action are inconsequential. It makes no difference where the defendant resides. It makes no difference where the cause of action arose. It certainly makes no difference that the plaintiff also happens to have a branch office in another location where the cause of action may have arisen or where the defendant may reside or carries on business.

(b) Where the plaintiff has only one office, it presents no difficulty. Where the plaintiff has multiple offices, however, he has a limited choice. He may either bring a Suit under Section 134(2) or Section 62(2), i.e., within the jurisdiction where he resides; or he may invoke Section 20 and file a suit where the Defendants reside or work for gain or where the cause of action arose wholly or in part. The fact that the Plaintiff has the choice of bringing a suit based on Section 20 of the CPC does not mean that his rights under Section 134(2) or Section 62(2) are in any way eroded, curtailed or restricted.

(c) However, where the plaintiff chooses not to file a Suit at his or its principal business or where his registered office is located, and also chooses not to file a suit in a jurisdiction covered by Section 20 of the CPC but instead attempts to file the suit at some other location where the plaintiff happens to have a subsidiary or satellite office, but where there is absolutely nothing else (neither cause of action nor any of the defendants) the Plaintiff cannot invoke Section 134(2) or Section 62(2) to drag the Defendant to that distant location. That, following the decision of the Supreme Court, is the abuse that is required to be prevented. That is in fact the only abuse that is required to be prevented.

(d) The Section 134(2) and Section 62(2) privilege or advantage attaches to the registered office or principal place of work. It is a privilege not to be used by abandoning the registered office situs, abandoning the Section 20 situs options, and travelling to some remote location where there is neither defendant nor cause of action. That is the mischief addressed in Sanjay Dalia.

To illustrate: the plaintiff has its registered office in Mumbai. The defendant is in Delhi. The cause of action arose in Delhi. The plaintiff also has another branch office in Port Blair. A plaintiff can sue in Mumbai or in Delhi, but not in Port Blair.

In his judgement, Justice Patel had disagreed with the analysis of the Delhi High Court in the Ultra case and had observed that there is nothing in the Sanjay Dalia judgement to suggest that the provisions of Section 134(2) of TM Act or Section 62(2) of Copyright Act are in any way curtailed by the provisions of Section 20 of the CPC. Justice Patel had also placed reliance on the Delhi High Court single bench’s decision in the case of M/S Rspl Ltd. vs Mukesh Sharma & Anr in which the Justice Vipin Sanghi was of the view that the case before him was unaffected by the Division Bench’s decision in Ultra Home, one he came upon after he reserved judgment in RSPL Ltd. Justice Sanghi had returned the plaint under Order VII Rule 10 in that case.

• M/S Rspl Limited vs Mukesh Sharma & Anr [Appeal order- Delhi High Court]

The decision of Justice Sanghi was set aside by the division bench of the Delhi High Court vide a subsequent judgement dated August 3, 2016 where the division bench comprising of Justice Badar Durrez Ahmed and Justice Sanjeev Sachdeva upheld the decision of the Delhi HC division bench in the Ultra case. The Division Bench had held as under:

“it is indeed unfortunate that the learned Single Judge has embarked upon an adventure to disagree with the decision of a Division Bench in Ultra Home (supra), albeit, as a student of law’. It is not open to a Single Judge (and more particularly a trial court) to differ from or critically appraise a decision of a Division Bench (and more particularly of an appellate court). Once it is recognized that the decision of the Division Bench is binding on the Single Judge, there is no need to express any difference of opinion or disagreement or purport to give reasons for the said difference of opinion or to even suggest that the decision of the Division Bench may need re-consideration. That is only in the domain of another Bench of co-equal strength. In any event, the findings and observations of the learned Single Judge with respect to its interpretation of the Supreme Court decision in Sanjay Dalia (supra), to the extent they are contrary to the decision of the Division Bench in Ultra Home (supra), are set aside.”

The main disconnect between the Ultra and RSPL division bench judgements on one side and Justice Patel’s judgement and RSPL single bench on the other seemed to be with respect to the division bench (Ultra case) where it said that the deeming provision of Section 20 of CPC, i.e., the explanation, had been ‘read into’ Sections 134(2) and 62(2) (for isolating the place where the plaintiff can be said to be carrying on business)

However in the Aditya Pandey case, with respect to IPRS’s contention that its registered office is in Mumbai, subordinate office in Delhi and cause of action has arisen in a third place, the rulings in all the abovementioned cases seem to be that the suit should be instituted at the place where the plaintiff has its principal business.

While Justice Endlaw rightly pointed out that the defendant cannot be vexed twice for the same relief and that equity is not in favour of the plaintiff in allowing it to return the plaint to be filed in another court, in my view his judgement fails to clarify as to how the guidelines set in the abovementioned decisions would not apply.

In all likelihood, IPRS would file an appeal challenging this decision.

It would also be pertinent to point out that the Supreme Court in para 6 of the CISAC judgement had held that “all observations, findings and views expressed by the High Court in the original as well as appellate proceedings before it to be of no legal effect, whatsoever, in so far as the merits of the suits are concerned which will now be expedited and heard and disposed of within a year from today”. The Supreme Court’s decision was only an interim exercise by the court to find a reasonable solution to the matter which was to govern the parties until disposal of the suit. The SC had upheld the Division Bench order only as a workable solution during the pendency of the suit.

In view of the CISAC judgement, the 2011 and 2012 judgements passed by the Single and Division bench of the Delhi High Court in the IPRS vs Aditya Pandey matter have no legal effect.

The CISAC judgement had led to varied interpretations on whether dual licensing is required post 2012 Amendment or whether the decision was limited to pre-2012 Amendment. In the absence of any clarification on this point in Justice Endlaw’s judgement, the issue remains open for interpretation.

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