M/S Indian Record Manufacturing Co. Ltd. v. Illaiyaraaja
Before I venture into this post, I would like to state that the content mentioned herein is completely and solely my personal academic view, and neither other members of the IPRMENTLAW team endorse it nor are responsible for it. I welcome all debates to this view to be addressed to me and not the platform. For a neutral perspective on the judgment and access to the rationale of the court please see Part 1. Also, this is a long and extremely legal post.
TABLE OF CONTENTS:
|1||The implication of the use of the word “soundtrack” in the definition of cinematographic film pre-1994 amendment|
|2||First ownership and work for hire|
|2.1||What is a contract of service/ Work for hire|
|2.2||Applicability of principles to facts of current case|
|3||Applicability of IPRS v. EIMPAA|
|3.1||Retrospective effect of the proviso to section 17, inserted by the 2012 amendment|
|3.2||Ratio in IPRS v. EIMPAA of Justice Jaswant Singh is per incuriam|
|3.2.1.||What are Per Incuriam decisions|
|3.2.2||Applicability of principle to the facts of this case|
|4||Non Impleadment of the Film Producer, is wrong|
1) The implication of the use of the word “soundtrack” in the definition of cinematographic film pre-1994 amendment:
The court has gone on to state in its analysis that the definition of the word “Cinematograph Film”, before the amendment in 1994, stated within its purview the phrase “includes a soundtrack”. This was changed in the 1994 amendment to “sound recording”. Upon this determination, the court has gone on to conclude that the song, as in the musical work incorporated in the film, comes within this definition of a cinematograph film in the case of pre-1994 films, as “soundtrack” has a wide and inclusive connotation. My core argument herein is that the court has misconstrued the meaning of soundtrack to mean the musical work, rather than that particular recording. As stated by Professor Upendra Baxi, in his seminal work of 1986 titled “Copyright and Justice in India” (Journal of Indian Law Institute, Vol. 28 No. 4 October- December 1986, 512-513), “The author of a film has the copyright in the soundtrack of the film that is that particular and specific recording of musical work in the film.” What I mean to convey through this is that owner of the film only owns the specific recording and not the work in itself, and the meaning of soundtrack was never intended to include the work and completely trench away the composers copyright in the work. This position is also visible in the Statement of Objects and Reasons and Notes to Clauses of the 1992 amendment bill to the Copyright Act, which was subsequently brought into force in 1994.
If looked at closely, a few important points come out of the Copyright Amendment Bill 1992. These are:
i) The statement of objects and reasons at page 26 clearly states the purpose of the amendment to be “simplification and improvement of the law related to copyright and related rights, in the interest of general public and users as well as owners of such rights”
ii) In the notes to clauses, it is clearly stated that the change in the definition of “Cinematograph film” was to “improve” the definition (notes to sub clause (iv)). The word soundtrack was substituted with the word sound recording, to make the intention of the legislature in the first place clearer. There was no substantive right created or taken away, rather the definition was merely simplified and clarified to make it actually clear as to what the legislature intended in the first place. The whole point was to remove the prevalent vagueness about the ambit of the word soundtrack, and to improve the interpretational flexibility associated with it, for better beneficial justice.
It is important herein to delve into certain principles of interpretation of statutes which the Madras HC has conveniently chosen to ignore and omit from its analysis. The statement of objects and reasons and the bill clearly indicate a “clarificatory” and a “beneficial improvement” oriented intent of the 1994 Act, which changed the position in Section 2(f) from “Soundtrack” to “Sound Recording”. Few important legal principles before I delve into how the interpretation stated in paragraph 18 of the judgement is flawed.
i) The Statement of Objects and Reasons have been held, by the highest court in India, to be a “valuable and effective tool” for interpreting the statutory position and legislative intent.[i]
ii) Multiple case laws have recognised – that a clarificatory amendment to an Act is considered to have a retrospective effect, as it strives to declare and clarify the real true intention of the legislature in connection with an earlier existing transaction. It helps ascertain the true intent, and does not impose new rights or obligations, rather merely declares and removes the vagueness surrounding previous provisions.[ii] In the case of Allied Motors v. Commissioner of Income tax[iii], the Supreme Court had gone on to hold that the proviso which supplies an obvious omission and remedies the unintended consequences, or improves to give the provision a reasonable interpretation, is required to be treated as retrospective in operation. Similarly, from the case of A. Usha Rani and PG Anandapadmanabham v. P Dharmalingam and United India Insurance ltd[iv]., the legal principle that emerges is that the function of a declaratory or explanatory amendment is to supply an obvious omission or to clear up doubts as to the meaning of the previous act and such an act is effectuated from the date of passing of the previous act, i.e. with retrospective effect.
iii) Even an amendment which is passed for a beneficial improvement in the prevailing statute to remedy a mischief, of reality or interpretation, has been held to retrospective in application by courts in India.[v]
The Single Judge of the Madras HC, in the case at hand, has completely omitted analysing the reason for the change in the statutory position in 1994 and has completely omitted the chance of the 1994 inclusion of the word “sound recording” instead of “sound track” being clarificatory and hence retrospective in its operation.
The rationale of such clarification also lies right in the natural rights justification of Copyright law. The Copyright Act principally makes a distinction between a “record” and a “recording” incorporated in a film. The latter is essentially an aggregate of sounds embodied and capable of being reproduced. This recording of the aggregate of sounds is merely the sound recording and not the sound i.e. the work in itself. What I mean through this is that “copyright therein” in a Cinematographic work does not include the copyright in the record, i.e. the work included, but rather only that particular recording of the work, which is incorporated in the film. The musical work is independent under Section 14(1)(a) of the Act. The Cinematographic film owner can only have implied rights, statutorily on this recording, and not the whole work in itself. The work is authored and owned by the “Composer”, save and except for situations explained below. This is an embedded principle of natural rights and labour justification of “just desserts” in the foundation of copyright law. This is the sole reason why investor centric related rights like cinematographic work and sound recording rights have a relatively limited protection available under Section 14(d), 14(e), 26 and 27. These are related rights and cannot connote first ownership of “works” merely by virtue of investment and no originality. The Kerala HC has recognised this natural rights based inclination of the Indian Copyright Act in the case of Sanjeev Pillai v. Venu Kunnapalli, recently in 2019.
Such an analysis has not been conducted by the Single Judge of the Madras HC in the Impugned judgement, leading to a completely false determination and fallacy in interpretation wherein “soundtrack” has been held to mean the “musical work”, hence connoting direct first ownership of the song with the film owner, trenching upon composers copyright. This is legally as well as rationally flawed.
There can only be 2 situations wherein, statutorily, the author can be upheld to not be the owner as well as in some cases “First owner” of copyright. These are:
i) Express Assignment of copyright under Section 18 read with Section 19 of the Copyright Act (including an implied obligation to assign in cases of Contract for Service)
ii) Work-for-hire arrangements/ Employer- Employee relationships or Contracts of Service, wherein the employer shall be the first owner of the content produced. (Section 17 of the Copyright Act)
There is no case of an express assignment in the present case. This brings me to the second point of critique in the judgment wherein, the Single Judge of the Madras HC has held that there exists a work-for- hire arrangement/ contract of service between the author composer and the owner of the film, hence implying first ownership in the hands of the film owner, unless there exists a contract to the contrary. This is a completely flawed conclusion due to the reasons provided in the section below.
2) First ownership of the film owner and work-for-hire
Is the relationship of the film producer and the composer a contract of service/ work for hire agreement, principally?
The Madras HC, in paragraph 19 of the of the decision, went on to state that due to a film being an initiative of the producer, wherein the responsibility of blending intellectual works and investing in the same is exercised by them, first ownership of such a film must be given to these producers. While holding this, the court has further gone to interpretatively hold that the constituent individual elements of this film (example the songs, not the particular recording of the song used), which are structured at the behest of the producer, are also individually owned by the producers (by ownership, I mean “first ownership”). This extensional holding is flawed. The court has clearly gone on to establish that the music composers who create the musical works, create the same upon the behest of the producer, although independently, and hence are mere employees of the producer, for a consideration, and do not own any of the “First ownership” privileges upon the work. The court has even, noticing the difference between an author and an owner, held in paragraph 26 that a music composer maybe an author of the work but cannot be the owner unless the producer who “employs” the composer expressively gives up this ownership right.
It is important herein to delve into concepts of Authorship, First ownership and ownership. As already stated above, an author shall be the first owner of the work unless there is an application of the work for hire doctrine or section 17 of the Copyright Act. Further, the post 2012 position of law is clear, wherein it has been stated in the proviso to section 17 that the ownership of the producer of the film (i.e. person at whose instance work is being developed under section 17(b) or (c), does not entrench upon the rights of the music composer, as to their independent ownership of the songs. This is even indicated as the purpose behind bringing in the 2012 amendments, in the Statement of Objects and Reasons.
My argument basically is that even in the pre-2012 cases, the application of a work-for-hire doctrine in the case of a musical work incorporated in a film, is flawed and the conclusion of there being an employer-employee relationship/ work for hire arrangement, goes completely against the jurisprudential foundations of such a relationship/ arrangement.
Firstly dealing with section 17 of the Copyright Act (pre- amendment), it is noted that Section 17(a) specifically omits the applicability of this provision upon “musical works” by specifically not mentioning the same. As far as section 17 (b) is concerned, the ownership is only limited to the “cinematographic work” as a whole and not the constituent parts worked within it. To own the same would be to infer a contract of service amongst the producers and the composer. Similarly 17(c) specifically only applies in the case of a contract of service between the producers and composers. What I am going to argue in the next paragraph is that the relationship between a film producer and composer, by nature, does not fulfil the jurisprudential and common law stare decisis set requirements of constituting a “contract of service”. The court has flawed in overlooking the same and bracketing this arrangement as a contract of service or a work for hire arrangement.
WHAT IS A CONTRACT OF SERVICE/ WORK FOR HIRE ARRANGEMENT?
In one of the all-important cases in Intellectual Property Philosophy and the principle of author/ owner distinction, the United States court had recognised 11 factors to determine whether a work-for-hire arrangement exists.[vi] The court held that if these conditions are not fulfilled, the author shall be an independent contractor and not an employee surrendering his first ownership. These are:
 The skill required;
 The source of the instrumentalities and tools;
 The location of the work;
 The duration of the relationship between the parties;
 Whether the hiring party has the right to assign additional projects to the hired party;
 The extent of the hired party’s discretion over when and how long to work;
 The method of payment;
 The hired party’s role in hiring and paying assistants; whether the work is part of the regular business of the hiring party;
 Whether the hiring party is in business;
 The provision of employee benefits;
 The tax treatment of the hired party.
Upon this determination, the court had recognised Reid to not be an employee and there to not be a work for hire arrangement, due to Reid using his own tools, not being “extensively” supervised and free in the way he met his deadlines. Further CCNV could not assign more projects to Reid, within the scope of that employment, and paid in the normal manner in which independent contractors are paid.
Even in India, the jurisprudence around this kind of an arrangement involving an employer and an employee, or one termed as contract of service or a work for hire arrangement, has been sufficiently evolved and discussed by the highest court. It is firstly submitted that by overlooking the same, and not analysing factually whether the conditions of a contract of service are fulfilled, the court gravely flawed. Now coming to the Indian jurisprudence around the same, the Supreme Court had firstly in the case of Dhrangadhra Chemical Works Ltd. v. State of Saurashtra[vii], observed that the prima facie test for the determination of the relationship between master and servant, is the existence of the right in the master to “supervise and control” the work done by the servant, not only in the matter of directing what work the servant is to do, but also the manner in which such work is to be done. This principle has even recently been recognised in the case of National Aluminium v. Ananta Kishore Raut[viii] wherein the court went on to state that “the proper test is whether or not the hirer had authority to control the manner of execution of the act in question.” There is also authority under Indian Case law which states that in the case of a professional work, control test is not sufficient, and although an important factor, is not the only decisive one. The emphasis has shifted and no longer rests strongly and solely on the aspect of control.[ix] Interpreting this, courts have read the control test in conjunction with the organisation test, the economic test and the integration test.[x] The integration test deals with the question that “whether the person was fully integrated into the employer’s concern or remained apart from and independent of it.[xi] The organisation test concerns as to whether the worker works within the employers premises or organisational structure.[xii] Keeping in mind, all these factors, and the specific, although not the sole, importance of the Control and supervision test, the Supreme Court has laid down the following factors to adjudicate to whether there exists a work for hire arrangement in India:
 Who is the appointing authority
 Who is the paymaster
 Who can dismiss
 Extent of control and supervision i.e. whether there exists complete control and supervision
 Nature of the job – professional or skilled work
 Nature of establishment
 Who can take disciplinary action
 Whether there is continuity of service[xiii]
The application of this jurisprudence in IP cases and specifically under section 17 of the Copyright Act has been upheld by the Bombay HC, wherein it was stated that:
“I am not persuaded to hold that the above decisions are inapplicable while deciding a matter under the Copyright Act. The concepts of a contract of service and a contract for service have been the subject matter of decisions both in India and in U.K. long before even the Copyright Act, 1911. The concepts have been the subject matter of decisions inter-alia in respect of cases pertaining to the Law of Torts and various labour laws. There is nothing to suggest even remotely that the Legislature intended the scope of the expression `contract of service’ in Section 17(c) to be otherwise than as has been understood for over a century. I do not read the above judgments being limited or confined to cases other than those under the Copyright Act…….The principles enumerated in the judgment above are applicable to cases under the Copyright Act”[xiv]
Further, the position with respect to IP cases was specifically clarified in the Zee Entertainment case (Supra) wherein the court relied upon Silver Jubilee (Supra) to come to a conclusion of Contract of Service. In the case of Silver Jubilee, the main important holding was that “principled employment” is an important pre-condition to there being a contract of service, even if not complete employment. This was clarified by the court wherein it went on to state, while deciding whether a tailoring employee, who used to take some other independent work from other tailoring establishments, although principally working from the organisation or within the premises or in the integrated structure of the employer, that:
“Therefore, even if he accepts some work from other tailoring establishments or does not work whole time in a particular establishment, that would not in any way derogate from his being employed in the shop where he is principally employed.[xv]”
APPLICATION OF THESE PRINCIPLES TO THE CASE AT HAND
It is important to note that in the case of a composer who is asked to compose a song for a film, a question of “principled employment” does not arise, as it is merely for that particular film that the contract is established and for nothing beyond that. Merely on the contract pertaining to one of the films of the production house, the composer cannot be held to be principally employed within the producers firm. A composer who composes merely for one project of the producer, specifically asked for a particular film or multiple films (limited number), does not fulfil the requirements of the integration test, wherein the employee gets integrated into the employers concern. The employer is the production firm and not the particular film. As the film ends, the scope of employment ends and hence there is no continuity of service or permanency of relations which is being fulfilled. Further, there is merely a “remote control” over the smooth working and the content which is being created by the composer, hence completely failing the all-important “control and supervision test”.[xvi] Further, as far as the organisation test is concerned, mostly composers do not work within the premises of the producers firm and work upon the song on their own volition, without any supply of tools or logistical support, and especially well established composers. Hence the applicability of the organisation test, inclining towards a view in favour of existence of a contract of service, completely fails as well.
It can clearly be inferred from the above mentioned detailed discussion of the jurisprudence around the term “contract of service” and the way the music industry works in terms of the Bollywood industry, and composers composing for films, that there can be no possibility of a contract of service and most of the important determining tests are failed in this case. It can at the maximum be a “contract for service”, wherein an implied obligation to assign the ownership contractually exists, to the producer i.e. the person who commissions the work.[xvii] It is an accepted principle that music composers independently create the songs which are incorporated in the film, on the basis of general directions provided by the owners of the cinematographic work. There is no substantial control exercised over the expression which comes out of the musical work. This arrangement rather fits in the independently commissioned work category along with the implied obligation to assign, as discussed above. It is unfathomable as to how the court could completely omit a discussion around this jurisprudence and these principles. This situation might differ if the music composer is an in-house composer only for the production firm. A simple analogy with respect to the same exists in the legal profession. If a company engages a lawyer for a particular dispute, the lawyer is not an employee but rather an independent contractor (not really, but just for the purpose of an analogy), however, an in-house counsel in a company shall effectively be an employee. In the Bollywood industry the latter is not a reality, and hence a conclusion with respect to the relationship being that of an employer employee is clearly flawed.
The court completely relied on the case of IPRS v. EIMPAA for the pre-amendment cases, which is a flawed approach, and this precedent is not an applicable or a binding precedent. I will be discussing the inapplicability of this precedent in the next section of this article.
3. Applicability of IPRS v. EIMPAA and the subsequent amendments to the Copyright Act
 Retrospective effect to the 2012 amendment provision introducing proviso to Section 17
The Copyright (Amendment) Act, 2012 in clause 7 clearly incorporated a proviso under section 17 of the Copyright Act, 1957. This proviso states:
“Provided that in case of any work incorporated in a cinematograph work, nothing contained in clauses (b) and (c) shall affect the right of the author in the work referred to in clause (A) of subsection (i) of section 13.”
The statement of objects and reasons of the incorporating bill clearly mentions the reason to be:
3. The amendments proposed in the bill, inter alia, seek to :
(viii) Give independent rights to authors of literary and musical works in cinematographic films.
(x) ensure that authors of the work, especially authors of songs included in a cinematographic film, or sound recordings, receive royalties for the commercial exploitation of such works.
It is well known from the parliamentary debates as well as in the legal academic circles that the amendment to this provision was a policy proposal that was appended by Justice Krishna Iyer in his seminal footnote to the IPRS v. EIMPAA decision. It was Justice Krishna Iyer who had recognised the injustice prevalent in the act, for which he had recommended a legislative change. It was not the intention of the legislature that was questioned by Justice Krishna Iyer, but rather the practical implication and the mischief being purported by the linguistic framework of the provision. Justice Krishna Iyer stated:
“But I do append the abbreviated opinion solely to belight a slightly penumbral area of the law and to voice a need for legislative exploration to protect a category now left in the cold.
Copyright in a cinema film exists in law, but s. 13(4) of the Act preserves the separate survival, in its individuality, of a copyright enjoyed by any ‘work’ notwithstanding its confluence in the film. This persistence of the aesthetic ‘personality’ of the intellectual property cannot cut down the copyright of the film qua film. The latter right is, as explained earlier in my learned brother’s judgment, set out indubitably in s. 14(1)(c). True, the exclusive right, otherwise called copyright, in the case of a musical work extends to all the sub-rights spelt out in s. 14(1)(a). A harmonious construction of s. 14, which is the integral yoga of copyrights in creative works, takes us to the soul of the subject. The artist enjoys his copyright in the musical work, the film producer is the master of his combination of artistic pieces and the two can happily co- exist and need not conflict. What is the modus vivendi ? The solution is simple. The film producer has the sole right to exercise what is his entitlement under s. 14(1)(c) qua film, but he cannot trench on the composer’s copyright which he does only if the ‘music’ is performed or produced or reproduced separately, in violation of s. 14(1)(a). For instance, a film may be caused to be exhibited as a film but the pieces of music cannot be picked out of the sound track and played in the cinema or other theatre. To do that is the privilege of the composer and that right of his is not crowned in the film copyright except where there is special provision such as in s. 17, proviso (c). So, beyond exhibiting the film as a cinema show, if the producer plays the songs separately to attract an audience or for other reason, he infringes the composer’s copyright.”
Exactly what was recommended, or the mischief in the Act which was sought to be mended and was legislatively questioned by Justice Krishna Iyer, was incorporated in the 2012 amendments to the Act. The sheer unfairness of interpretation which was sought to be clarified by the legislature in the 2012 amendments shows quite clearly that it was to be applied from the outset of Section 17 in itself, i.e. with retrospective effect. If the position were otherwise (i.e. prospective), it would follow that, although parliament has accepted the advice of all those who had urged this objectionable system to be changed, and has provided a remedy, it has reconciled itself to the continuation of cases irrevocably stamped with continued injustice. I find it impossible to accept that Parliament can have intended any such thing, and the language of the proviso clearly suggests that in the interests of reform, Parliament was willing to tolerate the qualified kind of hardship involved in giving the legislation a partially retrospective effect. This amendment effectively, overrules the applicability of the judgment in the case of IPRS v. EIMPAA (Ratio of Justice Jaswant Singh), which had suggested a statutory contract a service for composers composing for a film.
A similar rationale has been provided by Justice R. F Nariman in the case of BCCI v. Kochi Cricket Pvt. Ltd.[xviii] In this case, interestingly the relevant facts to our case were:
The Supreme Court had in an earlier decision of National Aluminium v. M/S Preesteel and fabrications, criticized the then prevailing provision of the Arbitration Act which led to interpretational injustice (this provision dealt with the automatic suspension of the execution of arbitration award upon a challenge under section 34 of the A&C Act). The court in National Aluminium had also gone on to recommend certain amendments for effective enforcement of the A&C Act. In lieu of the same, Section 36 was amended by the legislature to remedy the identified injustice by the court, later.
Justice Nariman, in the Supreme Court, while deciding upon the applicability of this amendment went on to hold that:
“It would be clear that looking at the practical aspect and the nature of rights presently involved, and the sheer unfairness of the unamended provision, which granted an automatic stay to execution of an award before the enforcement process of Section 34 was over (and which stay could last for a number of years) without having to look at the facts of each case, it is clear that Section 36 as amended should apply to Section 34 applications filed before the commencement of the Amendment Act also”
He went on to further rely upon the decision in Loreal Cherifen Des Phosphates and anr. v. Yamashita- Shinnihon Steamship Co. Ltd. (1994) 1 AC 486, wherein as well, when a provision was amended to remedy a prevailing injustice recognised by the judiciary and recommended to be changed in an Act, such an amendment was held to be retrospective in operation.
This analysis clearly shows that an important facet of statutory interpretation which is to be kept mindful of and applied (in light of the rationale of the SC precedent in BCCI v. Kochi Cricket) in the case at hand. This is, in simple words that:
a) If a legislative injustice has been recognised in the Act, and has been recommended to be changed and amended by the judiciary
b) And, in pursuance of this recommendation, the legislature takes note and goes on to remedy the position through a later amendment to the Act
c) Then, such an amendment is to be construed and applied with retrospective effect, and even to the cases and situation, prior to the effective date of the amendment.
d) This is because the legislature cannot have intended to foster injustice in the first place.
The Madras HC has simply omitted considering such a retrospective application of this amendment and the rationale and principle of statutory interpretation recognised in the latest SC precedent of BCCI v. Kochi Cricket, which has effectively resulted in a flawed conclusion and use of the ratio in IPRS v. EIMPAA as a valid binding precedent.
[II] The ratio and the judgment (Justice Jaswant Singh’s part) in the IPRS v. EIMPAA decision is per-incuriam and not a binding precedent.
Before I venture into analysing the precedential value of IPRS v. EIMPAA (Justice Jaswant Singh’s Ratio), I would like to get into the Indian Position with respect to “per incuriam” decisions.
“PER INCURIAM” DECISIONS IN INDIA
In Siddharam Satlingappa Mhetre v. State of Maharashtra & Ors.[xix], the Supreme Court held that the judgment of a larger Bench is binding on a smaller Bench or co-equal Bench. If the court doubts the correctness of the judgment, the only proper course would be to make a request to the Hon’ble Chief Justice to refer the matter to a larger Bench of appropriate strength. In case the judgment is given in ignorance of the earlier judgment, doctrine of per incuriam is attracted.
“In Young v. Bristol Aeroplane Company Limited (1994) All ER 293 the House of Lords observed that ‘Incuria’ literally means ‘carelessness’. In practice per incuriam appears to mean per ignoratium. English courts have developed this principle in relaxation of the rule of stare decisis. The ‘quotable in law’ is avoided and ignored if it is rendered, ‘in ignoratium of a statute or other binding authority. The same has been accepted, approved and adopted by this court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law.”
This has also been recognised in Halsbury’s Laws of England (4th Edn.) Vol. 26. Further, Lord Godard, C.J. in Huddersfield Police Authority v. Watson (1947) 2 All ER 193 observed that where a case or statute had not been brought to the court’s attention and the court gave the decision in ignorance or forgetfulness of the existence of the case or statute, it would be a decision rendered in per incuriam.
Recognising the important facet of Judicial Discipline, with respect to notice and application to binding precedents, the 3 judge bench of the SC of India held that:[xx]
“We are distressed to note that despite several pronouncements on the subject, there is substantial increase in the number of cases involving violation of the basics of judicial discipline. The learned Single Judges and Benches of the High Court’s refuse to follow and accept the verdict and law laid down by coordinate and even larger Benches by citing minor difference in the facts as the ground for doing so. Therefore, it has become necessary to reiterate that disrespect to the constitutional ethos and breach of discipline have grave impact on the credibility of judicial institution and encourages chance litigation. It must be remembered that predictability and certainty is an important hallmark of judicial jurisprudence developed in this country in the last six decades and increase in the frequency of conflicting judgments of the superior judiciary will do incalculable harm to the system inasmuch as the courts at the grass roots will not be able to decide as to which of the judgments lay down the correct law and which one should be followed.”
APPLICATION OF THIS PRINCIPLE TO THE CASE AT HAND
It is submitted that the division bench of the Supreme Court in the case of IPRS v. EIMPAA is per incuriam and not a binding precedent, due to its ignorance towards co-ordinate bench cases of the Supreme Court, directly upon the question of law addressed in the case. The prime question before the court in IPRS v. EIMPAA was whether a music composer who composes for a film comes within the purview of “contract of service” or work for hire under provisions of Section 17 of the Copyright Act. It is important to be noted herein that no direct provision in Section 17 states of such a conclusion. The SC in this case went on to hold (Justice Jaswant Singh’s ratio):
“According to the first of these provisos viz. proviso (b) when a cinematograph film producer commissions a composer of music or a lyricist for reward or valuable consideration for the purpose of making his cinematograph film, or composing music or lyric there- fore i.e. the sounds for incorporation or absorption in the sound track associated with the film, which as already indicated, are included in a cinematograph film, he becomes the first owner of the copyright therein ‘and no copyright subsists in the composer of the lyric or music so composed unless there is a contract to the contrary between the composer of the lyric or music on the one hand and the producer of the cinematograph film on the other. The same result follows according to aforesaid proviso (c) if the composer of music or lyric is employed under a contract of service or apprenticeship to compose the work. It is, therefore, crystal clear that the rights of a music composer or ….lyricist Can be defeated by the producer of a cinematograph film in the manner laid down in provisos (b) and (c) of section 17 of the Act.“
It is herein argued that the court, in a blanket manner, went on to determine that there is contract of service as encompassed under Section 17(c) of the Copyright act, applicable in the relationship of a music composer who composes music for a film. The court was mindless of the various tests that have been suggested by the co-ordinate benches of the same court, while determining as to whether a contract of service is foundationally possible or in existence. The court omitted taking into account the coordinate bench judgments in the case of Dhrangadhra Chemical Works Ltd. v. State of Saurashtra[xxi] and Silver Jubilee Tailoring House v. Chief Inspector of Shops and Establishment and Anr[xxii] wherein the court had enumerated certain factors as well as analyzed the law surrounding the existence of a contract of service. An analysis of these factors clearly suggests that the court would not have reached the conclusion it did, inevitably, because of firstly the non-application of the Control and Supervision test, the organization test as well the integration test. None of these conditions are fulfilled in the relationship of a music composer who composes for a film, and specifically not in the factual circumstances of both IPRS v. EIMPAA as well as the current case at hand. This is a violation of judicial disciple and a clear omission of a binding precedent, which could have, on the occasion of non-agreement, been referred to a larger bench to the maximum. Passing a decision, as in the case of IPRS v. EIMPAA, which is completely in ignoratium is a flawed approach and hence the decision is per incuriam and does not contain precedential value. The further judgments that have relied on this decision have clearly ignored this important implication and are have adopted a principally and legally flawed approach.
Further, as recognized by Professor Baxi in his above-mentioned article, the decision in Wallerstein v. Herbert, which was relied upon by Justice Jaswant Singh in IPRS v. EIMPAA, was not “on all fours” with the case. He states that:
“That was a case involving a dramatic work and there was finding that the plaintiff had “in pursuance of his engagement” rendered certain musical composition. The statutory contexts, facts, time and circumstances were strikingly different, and it could have no bearing on the 1977 case, and the court should have attempted to distinguish it.”
In light of these arguments i.e. (i) Retrospective application of Clause 7 of the 2012 amendment, (ii) Per incuria nature of IPRS v. EIMPAA and (iii) wrongful analysis of Wallerstein v, Herbert by IPRS v. EIMPAA, the use of this decision as a binding precedent in the case at hand is completely flawed and wrong.
In Arguendo, it is submitted that even if Justice Jaswant Singh’s part is considered to be binding (assuming not conceding), it has on various occasions been recognized that even an obiter dicta of the Supreme Court is binding upon the High Courts, if it establishes intent and a point of law or reason.[xxiii] Even a dissenting judgment of the SC has been held to be entitled to high respect and consideration by HC’s in India.[xxiv] Hence along the lines of the aforesaid precedents, it is definitely arguable that Justice Krishna Iyer’s opinion, further incorporated through an amendment would definitely have to be considered by the court and reasoned, if not held to be binding. This was also not done and an argument on the lines of this obiter dictum was clearly ignored by the Madras HC.
4) Non Impleadment of the Film Producer
An important principle as recognized in the Civil Procedure Code is that in a suit claiming property, unless and until all the other co-owners are not impleaded the suit shall not be maintainable.[xxv] A primary fact in dispute in the case at hand was as to who is the owner of the musical work authored by the defendant Ilaiyaraaja. This ownership was primarily to be determined amongst the defendant and the film producer. Upon this determination only could the assignment deed entered into by the film producer with the Plaintiff could have been valid. It is submitted to make this determination real, it was imperative of the court to allow for the impleadment of the film producer, as he had a direct bearing to the question of law and fact involved in this case. The court, mindless of this merely went on to state that as there was no dispute regarding assignment, the film producers were not necessary party. The court completely ignored the possibility of the assignment in itself being flawed and non-permissible in law, due to the non-first ownership of the work in the hands of the assignor film producer. When the question involved, itself called for determining whether under 17(b) the film producer was the owner of the work or not, impleading the producer was a must. This has also been wrongfully denied by the court.
This article has sought to criticize and establish as to how the rationales appended by the Madras HC in this case of M/S Indian Record Manufacturing Company v. Ilaiyaraaja are completely flawed and have been decided overlooking some essential principles of Statutory Interpretation, as well as the foundational intent of Copyright law. It is important for the industry stakeholders to recognize this flaw in the decision, as such determinations of an employer employee relationship amongst the composer and the film producer creates an inherent power dynamic, which results in the exploitation of the creators. It is essential to realize the intention of the 1474 Venetian Copyright Law as well as the statute of Anne. This was always protection of creators from exploitation by investors and bootleggers. It is important for the judiciary to be mindful of the same while interpreting these important questions of law. Overlooking the same goes completely against the core purpose of Copyright and creates a lacuna enabling interpretations which purport flawed rationales as against the foundational intent of this concept. Anyway, this is outside the scope of this article.
The main conclusions I seek to present are:
- “Soundtrack” in the Copyright Act 1957 refers to the sound recording and not the musical work itself.
- The relationship between the composer and the film producer, generally cannot be one of employer-employee or contract of service, as the requisite conditions for the foundational existence of such a relationship are not fulfilled. When looked at realistically as to how this contract or arrangement is worked, or how the song is composed, none of the pre-requisite conditions to a contract of service exist. The control, integration as well as the organization tests are not fulfilled.
- The decision in IPRS v. EIMPAA cannot be relied upon as a binding precedent as, the 2012 amendment introducing the proviso to section 17 is retrospective in construction and has effectively overruled the application of the ratio rendered by Justice Jaswant Singh. Although every amendment is generally considered to be prospective in is application, although there exist exceptions to this principle, and this case is argued to be one of these exceptions, wherein the amendment must apply from the time of initiation of the act.
- The decision in IPRS v. EIMPAA is per incuriam and does not possess precedential status.
- Non Impleadment of the Film Producer, in a suit involving a question on the ownership of the song by the film producer themselves, is flawed.
Hence in my personal opinion, due to the abovementioned five reasons, the decision of the Madras HC in the Illaiyaraaja dispute is highly flawed legally and must be appealed for the position of law to be rectified and aligned with the academic policy.
Image Source: Here
[i] The Gujrat University v. Shri Krishna Ranganath Mudholkar (1963) AIR 1963 SC 703 ; Oriental Fire General Insurance v. Shantabai S. Dhume (1986) 1987 ACJ 198 
[ii] Commissioner Of Income Tax-Ahmedabad vs Gold Coin Health Food Pvt.Ltd (2008) 9 SCC 622; M/S Virtual Soft Systems Ltd vs Commissioner Of Income Tax (2007) 9 SCC 665; R. Rajagopal Reddy (dead) by Lrs. & Ors. vs. Padmini Chandrasekharan (dead) by Lrs. [1995 (2) SCC 630]; Bangalore Medical Trust vs B.S. Muddappa And Ors [1991 AIR 1902]
[iii] (1997) 224 ITR 0677
[iv] (2008) 1 MLJ 944
[v] Oriental Fire General Insurance v. Shantabai S. Dhume (1986) 1987 ACJ 198
[vi] Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989)
[vii] AIR 1957 SC 274
[viii] 2014 (6) SCC 756
[ix] Silver Jubilee Tailoring House v. Chief Inspector of Shops and Establishment and Anr. (!974) 3 SCC 498
[x] Zee Entertainment Enterprises v. Gajendra Singh and Ors. 2007 (6) BomCR 700
[xi] Ram Singh v. UT of Chandigarh (2004) 1 SCC 126
[xii] Workmen of Nilgiri Coop. Mkt. Society ltd. v. State of Tamil Nadu (2004) 3 SCC 514
[xiii] Balwant Rai Saluja v. Air India Ltd. (2014) 9 SCC 407
[xiv] Exegesis Infotech (India) v. Mediamanage Insurance Broking (Notice of Motion No. 1290 of 2014 in Suit No.784 of 2014,Order Pronounced on 15th July, 2015)
[xv] Supra atn.9
[xvi] Supra at n.8
[xvii] Bently and Sherman, Intellectual Property Law (OUP 2015) 123)
[xviii] [2018) 6 SCC 287]
[xix] AIR 2011 SC 312; Rattiram & Ors. v. State of M.P., (2012) 4 SCC 516; Sudeep Kumar Bafna v. State of Maharashtra & Anr. AIR 2014 SC 1745.
[xx] Official Liquidator v. Dayanand and Others (2008) 10 SCC 1
[xxi] Supra at n. 7
[xxii] Supra at n.9
[xxiii] Basant Kumar Pal v. The Chief Electrical Engineer and others AIR 956 Cal 93
[xxiv] Ashok Leyland v. State of Madras AIR 1957 Mad 263
[xxv] Laxmishankar Harishankar Bhatt vs Yashram Vasta (Dead) By L.RsAIR 1993 SC 1587
[…] case of Masakali (it being a song made prior to the 2012 Amendment Act) is concerned, I have argued elsewhere that IPRS does not hold any binding value, due to it being rendered per incuriam and mindless of […]
Two additional factors are usually overlooked. One is the differentials in the duration of copyright protection. The terms of copyright in the cinematograph film and in the sound recording are coterminous, while the term of the underlying work exceeds these two, often by decades. If the producer is the first owner of the underlying work, as stated in 1977, then the term of the underlying works should be limited to 60 years.
The second is that underlying works are of a very different nature: unlike the cinematograph film and the sound recording, they are DESTINED to generate derivative sound recordings – in thousands for very popular works -, each one capable of being synchronized with other cinematograph films, audiovisual, advertisements, etc.