In the writ petitions filed by Phonographic Performance Limited for setting aside (i) the order dated 25 May 2021 passed by the Government rejecting the application filed by PPL for re-registration as a copyright society and (ii) certificate of registration dated 18 June 2021 granted to Recorded Music Performance Limited (RMPL), the Delhi High Court has vide its order dated 9 March, 2022 set aside both the impugned orders and directed the Government to re-consider the application of PPL for re-registration on merits, as being filed in time. The Court has further asked the Government to undertake this whole exercise within a reasonable time and the outcome be communicated to PPL. Read order here.
The Delhi HC held that:
- There was a sheer non-application of mind by the Government in rejecting the application of PPL without giving an opportunity of being heard to it and ignoring the correspondences exchanged between PPL and Government in 2018 and DIPP Office Memorandum which clarified that it was the Government who had assured PPL of its application for re-registration not being rejected.
- With respect to setting aside RMPL’s registration as a copyright society, the Court’s rationale was that if RMPL’s registration is not set aside, PPL may not get the registration on the ground as envisaged in Section 33 (3) and Rule 49, which says only one copyright society would be registered for administering the rights relating to same class of work i.e., sound recording and would irreversibly prejudice PPL’s chances for registration as a copyright society, unless the Government consider giving registration to two societies though, per Rule 49 of the Copyright Rules, the registration of another copyright society for the same class of works is an express ground for rejection of a subsequent application.
- The Court also noted that the Government, after failing to act upon the petitioner’s application for re-registration as a Copyright Society for 9 years and RMPL’s application for registration as a copyright society for 3 years, proceeded in great haste to register RMPL as a copyright society within 15 days of the interim order passed in the first Writ Petition filed by PPL where there was no reason for the Government to grant the impugned registration to RMPL in such a hurry.
- The Government completely ignored the order passed by the Court in WP No. 21/2021, wherein the Delhi High Court while granting the ad-interim stay to the petitioner, clarified the Government would have to keep in mind that in case PPL succeeded in the present Writ Petition, its 2013 re-registration application would stand revived, and directed Government to not take any steps inconsistent with the said position during the pendency of the writ petition.
As covered in our post here, the brief background to the case is as under:
- Pursuant to an amendment in the Copyright Act, 1957 and the Rules thereunder, in the year 2012 and 2013, registered copyright societies such as PPL, were required to apply for re-registration within a stipulated time frame of one year from the date of commencement of Copyright (Amendment) Act, 2012..
- PPL applied for such re-registration on 09 May 2013. However, by a communication dated 20 May 2014, PPL informed the Government that it was not desirous of carrying on business as a registered copyright society, and that it ceased to be a “copyright society” under Chapter VII of the Act. It therefore stated that its application dated 09 May 2013 stood withdrawn by it with an intention to file an application for fresh registration at an appropriate stage.
- Government did not accept the aforesaid position and, informed PPL that its application for re-registration was still under consideration of the Central Government, and no final decision had been taken so far. PPL took the position that, pending a final decision on its application, PPL was not entitled to take a unilateral decision not to continue as a copyright society, as the interests of several rights owners were involved.
- However, by a communication dated 25 May 2021(Impugned Order) , Government contended that PPL had withdrawn its application on 20 May 2014, and that it had made a subsequent application on 11 Jan 2018, which was belated. The Government therefore communicated its decision that re- registration cannot be granted to PPL.
Submissions of the Parties:
PPL argued that the observations made by the Government in the impugned order are completely erroneous, incorrect, unreasoned, arbitrary, without application of mind and contrary to the principles of natural justice.
The Respondents argued that no case was made for re-registration of PPL as a Copyright Society as it never acted as a Copyright Society after giving its letter of withdrawal in the year 2014; further there was no promise made by the Government and lastly no prejudice is caused to PPL by not affording them an opportunity of being heard as it was PPL’s own choice to become an owner of musical recordings and it never on its own continued as a Copyright Society after 2013 despite Government giving it an opportunity, hence it cannot seek setting aside of impugned order.
Government argued that a) the case put up by PPL was never put up in the correspondences and it cannot seek the principle of promissory estoppel against the Government as there was never any promise by the Government to accord consent for re-registration of the petitioner’s society as such application, filed in January 2018, was much beyond the two months period as prescribed in the Rules; and b) reference was made to Dange Committee Report enquiring about the misdeeds of M/s. Indian Performing Right Society Limited (IPRS), another society and during the course of enquiry it was found some directors of IPRS were common in PPL and since IPRS had made changes per recommendations of the Government, it was re-registered.
RMPL argued that a) PPL though sought re-registration vide letter dated 2013 but sought its withdrawal and hence its application automatically stood surrendered. Even otherwise PPL was not desirous to continue to function as a society as despite the Central Government declined to accept their letter, PPL had actually withdrawn its application for re-registration by its conduct since it started taking licenses from the assignees / authors and started acting as authors for giving licenses to various persons, hence to say that their application was pending is totally frivolous; b) the Central Government was rather satisfied that PPL were mismanaging hence, it did not grant re registration and it was well within its power under Section 33 (4) of the Copyright Act; and c) PPL rather elected to act as assignees of the authors and hence could not have claimed any lien over re-registration of its candidature as once it had elected a position, it could not have changed its position to its benefit if the registration was awarded to RMPL. Reference was made to Karam Kapahi and Others vs. Lal Chand 2010 (4) SCC 753 and National Insurance Company vs. Mastan and Others 2006 (2) SCC 641 (d) PPL’s case falls under Rule 47(2) of the Copyright Act, which deals with the re-registration and not Rule 49 and thus, even if opportunity of being heard was not granted then also it did not cause any prejudice to PPL (Reference made to Dharmapal Satyapal Limited vs. Deputy Commissioner of Central Excise 2015 (8) SCC 519). (5) A hyper technical view ought not be taken qua the compliance of natural justice since no prejudice is caused to the petitioner by not giving a hearing. Reference was also made to K.L. Tripathi vs. State Bank of India 1984 (1) SCC 43.
Findings of the court:
- Per Rule 47 PPL gave an application for re-registration within two months i.e., in May, 2013 but the appropriate government did not decide such application within time and lingered it on one pretext or the other for an year and since fate of rules was allegedly not clear hence the petitioner allegedly sought withdrawal of its application. Admittedly, such withdrawal was never allowed and hence the petitioner in the intervening period acted as an owner of the Copyright users per proviso to Section 33(1), and there was no illegality in it, as during the intervening period the businesses and rights of its members need to be protected.
- Correspondences were exchanged between Government and PPL in 2018 and Government required the petitioner to submit an Action Taken Report on issues indicated in the compliance letter, preferably to Rule 58 (8) and 65 of the Copyright Act. Such correspondences do show the Government kept the application of re-registration filed by the petitioner alive all this time, pursuant to which, the petitioner took steps for its re-registration as a Copyright Society.
- IPRS also filed its withdrawal application along with that of petitioner and despite there being an enquiry pending against it, yet it was allowed to be re-registered as a Copyright Society and whereas PPL’s request for re-registration was unceremoniously rejected by the Government vide the impugned order. There was never any enquiry pending against PPL. The letters of the Government written to PPL rather clarify it was the Government who had assured PPL of its application for re-registration not being rejected.
- Office Memorandum of the Copyright Division, Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India, dated 06.10.2016 would show IPRS PPL, both filed applications for withdrawal and there were allegations of mal-practices only against IPRS and not against PPL and further both applications were admitted to be filed in time and were under examination. All this was enough to give legitimate expectation to PPL about pendency of its application and governments intention to re-register it.
- Though it was argued by the respondent, proviso to Rule 49(1) shall be applicable only to applications for registration and not to applications for re-registration but where the petitioner was a registered society prior to the amendment and where its application for re-registration was in process the respondent no.1, being a quasi-judicial authority, ought to have given the petitioner an opportunity of being heard, especially in circumstances enumerated above.
- It cannot be said, principles of natural justice would apply only to cases of fresh registrations and not to applications for re-registration. Admittedly there is no separate rule for hearing on applications for re-registration and Rule 49 stipulates the condition only for registration, but it is equally true if an application for re-registration is rejected to pave way to register another society, then this principle ought to be read in Rule 47 (supra) and would squarely apply to applications for re-registration. It is needless to mention the certificate granted to the IPRS on its application for re-registration is too under Rule 49.
- “The impugned order shows there was sheer non-application of mind by the competent authority in rejecting the application of the petitioner without giving an opportunity of being heard to it. Respondent no.1 rather failed to decide the application on merits and dismissed it on the premise, the petitioner filed fresh application only in June 2018, which premise is wholly incorrect as the application dated June 2018 was never under, Form IX and rather was a letter given by the petitioner to comply with issues involved. The impugned order is wholly silent qua the correspondences exchanged between petitioner and respondent no.1 and to an Office Memorandum dated 06.10.2016 which rather declared the application was well within time.
- Thus, before passing the impugned order, Respondent no.1 ought to have considered a) rejection of the application of withdrawal; b) the office memorandum of 2016 and c) correspondences between the year 2014 till 2018 revealing the application of petitioner was being processed at the end of the Government and was alive lest there was no reason for petitioner to correspond with the Government. These facts do not find mention in the impugned order; hence it is bad in law and is set aside.
- The respondent No.1, while granting the registration to the RMPL/ respondent No.2, had completely ignored the order passed by this Court in WP No. 21/2021, wherein this Court while granting the ad-interim stay to the petitioner, clarified the respondent No. 1/ Government would have to keep in mind that in case the petitioner succeeded in the present Writ Petition, its 2013 re-registration application would stand revived, and directed the respondent No.1 to not take any steps inconsistent with the said position during the pendency of the writ petition.
- The respondent No.1 has not considered if the petitioner’s re-registration application gets revived, it may not get the registration on the ground as envisaged in Section 33 (3) and Rule 49, which says only one copyright society would be registered for administering the rights relating to same class of work i.e., sound recording.
- If the respondent No.2/ RMPL registration is not set-aside, the same would irreversibly prejudice the petitioner’s chances for registration as a copyright society, unless the Government consider giving registration to two societies though, per Rule 49 of the Copyright Rules, the registration of another copyright society for the same class of works is an express ground for rejection of a subsequent application.
- The respondent No. 1, after failing to act upon the petitioner’s application for re-registration as a Copyright Society for 9 years and the respondent No. 2/RMPL’s application for registration as a copyright society for 3 years, proceeded in great haste to register the respondent No.2 as a copyright society within 15 days of the interim order passed in the first Writ Petition. There was no reason for the respondent No. 1 to grant the impugned registration to the respondent No.2 in such a hurry.
- If the first writ petition is allowed, the second writ petition would have to be allowed as a corollary, or in view of the order dated 02.06.2021 passed by this Court in W.P.(C)-IPD No.21/2021, if the said Writ is allowed, the petitioner’s application for re-registration would stand revived, and hence the order granting RMPL registration as a copyright society would have to be set aside as RMPL’s application for registration was subsequent in time to the petitioner’s application.
- Thus, in view of above, impugned orders dated 05.2021 and 18.06.2021 both are set aside. Respondent No.1 is directed to re-consider the application of the petitioner for re-registration on merits, as being filed in time. The respondent No.1 is expected to undertake this whole exercise within a reasonable time and the outcome be communicated to the petitioner.
- Consequently, both the petitions are allowed in terms of above. Pending application(s), if any, also stand disposed of.”
Should the Government consider granting registration to multiple societies for same class of works?
Section 33 (3) proviso of the Copyright Act provides that “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. Rule 49 of the Copyright Rules, 2013 provide that “49. Conditions for registration of a copyright society.—(1) When an application for registration is submitted to the Central Government through the Registrar of Copyrights, that Government may, within a period of sixty days from the date of its receipt by the Registrar of Copyrights either register the applicant as a copyright society or, if— (i) xxx (ii) there exists another copyright society registered under the Act for administering the same right or set of rights in the specific categories of works and it is well functioning; or (iii) the Central Government has reason to believe that the members of the applicant are not bona fide copyright authors or other owners or they have not voluntarily signed the instrument setting up the applicant and the application for registration; or (iv)the application is found to be incomplete in any respect, reject the application: Provided that no such application shall be rejected without giving an opportunity of being heard to the applicant.
It could be argued that Section 33 read with Rule 49 gives a discretionary power to the Government to grant registration to more than one copyright society even if there exists a well functioning copyright society for the same class of works. This is not uncommon and there are several jurisdictions including USA where multiple societies for same class of work are registered (ASCAP, SESAC, BMI). The Government has held several stake holder meetings to that effect.
It would have to be seen if the Government/ RMPL files an appeal challenging this order.