RFA No. 440/2009 Page 1 of 37 * HIGH COURT OF DELHI AT NEW DELHI + RFA No. 440/2009 Judgment reserved on: March 04, 2010 % Judgment pronounced on: April 07, 2010 M/S. PHONOGRAPHIC PERFORMANCE LTD Having its registered Office at Crescent Towers, 7th Floor, B-68 Veera Estate, Off New Link road Andheri (W), Bombay-400 053 And also at: G-11, Ground Floor, Nizamuddin West New Delhi-110 013. Through it authorized representative Debasrita Das Biswas. …Appellant Through Mr. Ashwani K. Mata, Sr. Adv. with Mr. Himanshu Bagai, Mr. Thomas George and Ms. Manmeet Sethi, Advocates Versus M/S. RADIO MID DAY( WEST) INDIA LTD 156 D, J. Dadajee Road Tardeo Road Mumbai-34. ...Respondent Through Mr. Neeraj Kishan Kaul, Sr. Advocate with Mr. Neil Hildreth, Advocate Coram: HON'BLE THE ACTING CHIEF JUSTICE HON'BLE MS. JUSTICE MUKTA GUPTA 1. Whether the Reporters of local papers may be allowed to see the judgment? Yes RFA No. 440/2009 Page 2 of 37 2. To be referred to Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes MADAN B. LOKUR, ACJ Three issues that arise for our consideration are: First, whether this appeal under Section 72(2) of the Copyright Act, 1957 is maintainable against interlocutory orders passed by the Copyright Board. In our opinion, the answer to this question must be in the negative and we rely, inter alia, upon Shah Babula Khimji v. Jayaben D. Kania & Anr, (1981) 4 SCC 8 for our conclusion. Second, assuming this appeal to be competent, whether the impugned orders passed by the Copyright Board are sustainable in law. In our opinion, the answer to this question must be a qualified affirmative. Third, whether the helplessness expressed by learned counsel for the parties with regard to the administrative support given to the Copyright Board (for which, admittedly, the Board is not to be blamed) can be ameliorated. We propose to take up this issue altogether separately since we find that though there is a great deal that needs to be remedied it is beyond our jurisdiction in this appeal. RFA No. 440/2009 Page 3 of 37 2. The Appellant is aggrieved by two orders passed by the Copyright Board. They are dated 25th August, 2009 and 26th August, 2009. The first grievance is that the Appellant was not allowed by the Copyright Board to confront Ms. Aarti Kathariya, witness for the Respondent / Complainant in Case No.6/02 with the annual report of the Respondent during her cross examination. The second grievance of the Appellant is that though the Copyright Board permitted cross-examination of Ms. Aarti Kathariya on 24th, 25th and 26th August, 2009 she was inexplicably discharged without giving an opportunity to the Appellant to complete her cross examination on 26th August, 2009. The third grievance of the Appellant is that it was not given a copy of the deposition of Ms. Aarti Kathariya recorded on 24th and 25th August, 2009 and, therefore, her cross-examination could not be effectively conducted on 25th and 26th August, 2009. The Facts: 3. The Appellant is a non-profit organization and it administers the broadcasting rights of music companies who are its members. In this capacity, the Appellant is entitled to charge and collect licence fees from users of sound recordings (such as the Respondent). The Respondent is running an FM radio channel and in the course of its business it RFA No. 440/2009 Page 4 of 37 broadcasts music for which it is liable to pay a licence fee to the Appellant. 4. As regards the quantum of licence fee payable, it appears that the parties could not reach any mutually satisfactory agreement. Accordingly, the Respondent (and several other similarly placed entities) made a complaint to the Copyright Board, under Section 31(1)(b) of the Copyright Act, 1957 for a compulsory licence of the complete repertoire of the Appellant. By way of an interim arrangement, the Copyright Board passed a ―best judgment‖ order on 19th November, 2002 determining, inter alia, the standard rate royalty of Rs.1,200/- per needle hour payable to the Appellant by the Respondent during prime time and reduced rates during other times of the day. The decision of the Copyright Board is reported as Music Broadcast Pvt. Ltd. v. Phonographic Performance Ltd., 2003 (26) PTC 70. 5. The interim decision of the Copyright Board was challenged in the Bombay High Court which passed an order on 13th April, 2004. The decision of the Bombay High Court is reported as Phonographic Performance Limited v. Music Broadcast (P) Limited, 2004 (29) PTC 282. The effective order passed by the Bombay High Court, which is what we are concerned with in this appeal, set aside the ―best judgment‖ RFA No. 440/2009 Page 5 of 37 determination and required the radio stations including the Respondent to produce before the Copyright Board their audited accounts and other materials to enable it to arrive at a just figure for payment to the Appellant. The Bombay High Court was informed that the audited accounts of the complainants would be available and that they would be willing to produce them before the Copyright Board. Accordingly, the Bombay High Court remitted back the matter to the Copyright Board for re-determination of the compensation in terms of the provisions of Section 31 of the Copyright Act and on the basis of the material produced by both the parties. 6. Feeling aggrieved by the order of the Copyright Board, the Appellant approached the Supreme Court and its decision is reported as Entertainment Network (India) Limited v. Super Cassette Industries Limited, (2008) 13 SCC 30. 7. The Supreme Court endorsed the view of the Bombay High Court remanding the matter back to the Copyright Board for evaluating the compensation or licence fee payable to the Appellant. 8. After remand, the Copyright Board passed an order dated 28th July, 2009 indicating, inter alia, the progress made (or lack of it) during RFA No. 440/2009 Page 6 of 37 the past year. The order passed by the Copyright Board makes for some interesting reading and is reproduced below: ―Matters after being remanded by the Supreme Court were listed for the first time on 29th July, 2008 and continued to be adjourned six times for hearing at an interval of every two months on the request of both the parties (30th September, 2008, 26th November, 2008, 28th January, 2009, 31st March, 2009 and 26th May, 2009) for the sake of filing pleadings and paper books, affidavit of oral witnesses etc. After one year, the evidence started in the forenoon of 28th July, 2009. Two witnesses for the Petitioner, namely, Ashish Shah and Ayan Chakraborty have deposed before the Board and have been examined & discharged. Shri Ameet Dutta, Counsel for the Respondent in all the cases relating to PPL has brought to our notice that certain evidences by affidavit were sent to the Registry of the Copyright Board on 27th July, 2009. In this regard attention is drawn to our Order dated 26th May, 2009 wherein it has been very specifically provided that list of witnesses, evidence by way of affidavit, name of the expert witnesses and their affidavit by way of evidence by the respondents need to be filed by 30th June, 2009. Since the above said evidence by affidavit has been filed belatedly by the Respondent, namely, Phonographic Performance Ltd., the same is not allowed and is not being taken on record.‖ 9. Feeling aggrieved by the latter portion of the above order declining to take on record the evidence by way of an affidavit, the Appellant preferred appeals in this Court under the provisions of Section 72 of the Act. The appeals were registered as RFA Nos. 264 to 272/2009. 10. The appeals came up for consideration before a Division Bench of this Court on 4th August, 2009 when an order was passed noting that the RFA No. 440/2009 Page 7 of 37 dispute raised with regard to the interpretation of the order dated 28th July, 2009 is in respect of procedural aspects about leading evidence by the parties. To resolve the controversy, the Division Bench directed that all evidence by way of affidavits filed by 28th July, 2009 should be taken on record but no further evidence by way of affidavits or documents should be entertained. It was further observed that the evidence should be recorded expeditiously. Learned counsel for the parties was agreed that no adjournment would be taken on this account. 11. Pursuant to the order dated 4th August, 2009 cross-examination of the witnesses continued on 24th, 25th and 26th August, 2009. As mentioned above, the only witness whose evidence was recorded was Ms. Aarti Kathariya. We were told that on 24th August, 2009 learned counsel for the Appellant asked for a copy of her deposition but that was not supplied to him. He has made a grievance in this regard but that really pertains to the management of the affairs of the Copyright Board and we shall deal with it separately. 12. Be that as it may, on 25th August, 2009 recording the evidence of Ms. Aarti Kathariya continued and during the course of her cross examination learned counsel for the Appellant wanted to confront her with certain documents to disprove the assertions made in her affidavit RFA No. 440/2009 Page 8 of 37 by way of examination-in-chief. This was disallowed by the Copyright Board on the basis of the order passed by the Division Bench of this Court on 4th August, 2009. It was noted in the order passed on 25th August, 2009 that the Appellant produced a computer printout of the annual report of the Respondent and wanted to confront the witness with this document. Two objections were raised by the Respondent in this regard: first, it was submitted that the computer printout was not an authentic copy of the annual report and second, it was not admissible in terms of the directions given by this Court on 4th August, 2009. The dispute regarding the authenticity of the document appears to have been resolved later but the Copyright Board did not permit the witness to be confronted with the document since it was not ―admissible‖ in terms of the directions of this Court passed on 4th August, 2009. 13. As regards the contents of the order dated 26th August, 2009 we find that at about 3.00 pm the Copyright Board noted that Ms. Aarti Kathariya had been examined throughout the day on 24th and 25th August, 2009 as well as on 26th August, 2009. The Copyright Board suggested to learned counsel for the Appellant to conclude her cross- examination but he submitted that he intended to cross-examine her for one more day. The Copyright Board noted that there was much repetition in the questions asked and that there was another witness of RFA No. 440/2009 Page 9 of 37 the Respondent who could be examined on the financial aspects. In fact the inputs of all the witnesses would contribute towards understanding the financial viability of the Respondent specifically, the FM radio industry as a whole and the reasonableness of the royalty to be settled. It was noted that the cross-examination had covered all the relevant issues. In view of all this, the cross-examination of Ms. Aarti Kathariya was closed and she was discharged at about 3.30 pm. 14. It is under these circumstances that the Appellant has preferred this appeal against the aforesaid two orders dated 25th and 26th August, 2009. Preliminary Objection: 15. Learned counsel for the Respondent raised a preliminary objection regarding the maintainability of the appeal. It was submitted that an appeal against an interlocutory order on a procedural matter does not lie and, therefore, this appeal should be rejected at the threshold. Reliance was placed on the word ―order‖ occurring in Section 72(2) of the Copyright Act. It was submitted that an appeal would lie only against an order that vitally affects the interests of a party. The submission was that the Copyright Board has merely declined to take on record a document, which is a procedural matter, and that refusal does not vitally affect the RFA No. 440/2009 Page 10 of 37 interests of the Appellant. Section 72(2) of the Copyright Act reads as follows: 72. Appeals against orders of Registrar of Copyrights and Copyright Board.— (1) xxx xxx xxx. (2) Any person aggrieved by any final decision or order of the Copyright Board, not being a decision or order made in an appeal under sub-section (1), may, within three months from the date of such decision or order, appeal to the High Court within whose jurisdiction the appellant actually and voluntarily resides or carries on business or personally works for gain: Provided that no such appeal shall lie against a decision of the Copyright Board under Section 6. (3) xxx xxx xxx. 16. The issue of the maintainability of an appeal against an interlocutory order is not so vexed as it appears even though it has come up for consideration on several occasions. 17. The first decision cited before us to resolve the controversy was Central Bank of India Ltd. v. Gokal Chand, (1967) 1 SCR 310. That decision concerned itself with the meaning of ―order‖ occurring in Section 38(1) of the Delhi Rent Control Act, 1958 which reads as follows: ―An appeal shall lie from every order of the Controller made under this Act to the Rent Control Tribunal (hereinafter referred to as the Tribunal) consisting of one person only to be appointed by the Central Government by notification in the Official Gazette.‖ RFA No. 440/2009 Page 11 of 37 While interpreting this provision, the Supreme Court held: ―The object of Section 38(1) is to give a right of appeal to a party aggrieved by some order which affects his right or liability. In the context of Section 38(1), the words ―every order of the Controller made under this Act‖, though very wide, do not include interlocutory orders, which are merely procedural and do not affect the rights or liabilities of the parties. In a pending proceeding, the Controller may pass many interlocutory orders under Sections 36 and 37, such as orders regarding the summoning of witnesses, discovery, production and inspection of documents, issue of a commission for examination of witnesses, inspection of premises, fixing a date of hearing and the admissibility of a document or the relevancy of a question. All these interlocutory orders are steps taken towards the final adjudication and for assisting the parties in the prosecution of their case in the pending proceeding; they regulate the procedure only and do not affect any right or liability of the parties. The legislature could not have intended that the parties would be harassed with endless expenses and delay by appeals from such procedural orders. It is open to any party to set forth the error, defect or irregularity, if any, in such an order as a ground of objection in his appeal from the final order in the main proceeding. Subject to the aforesaid limitation, an appeal lies to the Rent Control Tribunal from every order passed by the Controller under the Act. Even an interlocutory order passed under Section 37(2) is an order passed under the Act and is subject to appeal under Section 38(1) provided it affects some right or liability of any party.‖ (emphasis supplied) 18. Parmeshwari Devi v. State, (1977) 1 SCC 169 was a case under the provisions of the Criminal Procedure Code. The Supreme Court relied on Mohan Lal Magan Lal Thacker v. State of Gujarat, AIR 1968 SC 733 wherein the controversy centered round the meaning of Article 134(l)(c) of the Constitution. The Supreme Court held that no single test RFA No. 440/2009 Page 12 of 37 can be applied to determine whether an order is final or interlocutory. It was then held: ―An interlocutory order, though not conclusive of the main dispute may be conclusive as to the subordinate matter with which it deals. It may thus be conclusive with reference to the stage at which it is made, and it may also be conclusive as to a person, who is not a party to the enquiry or trial, against whom it is directed.‖ (emphasis supplied) 19. In V.C. Shukla v. State through CBI, 1980 Supp SCC 9 the question that arose was whether an appeal would be maintainable against an order framing a charge. The Supreme Court summed up the law relating to interlocutory orders in relation to the Criminal Procedure Code in paragraphs 24 and 34 of the Report. In so far as they are relevant to the case in hand, they are reproduced below: ―To sum up, the essential attribute of an interlocutory order is that it merely decides some point or matter essential to the progress of the suit or collateral to the issues sought but not a final decision or judgment on the matter in issue. An intermediate order is one which is made between the commencement of an action and the entry of the judgment.‖ ―Thus, on a consideration of the authorities, mentioned above, the following propositions emerge: (1) that an order which does not determine the right of the parties but only one aspect of the suit or the trial is an interlocutory order; (2) that the concept of interlocutory order has to be explained in contradistinction to a final order. In other words, if an order is not a final order, it would be an interlocutory order; RFA No. 440/2009 Page 13 of 37 (3) that one of the tests generally accepted by the English courts and the Federal Court is to see if the order is decided in one way, it may terminate the proceedings but if decided in another way, then the proceedings would continue, because, in our opinion, the term ‗interlocutory order‘ in the Criminal Procedure Code has been used in a much wider sense so as to include even intermediate or quasi-final orders; (4) xxx xxx xxx (5) xxx xxx xxx‖ (emphasis supplied) 20. The leading case on the subject (though it pertains to the Letters Patent) still remains Shah Babulal Khimji v. Jayaben D. Kania, (1981) 4 SCC 8. In paragraph 113 of the Report, the Supreme Court makes a distinction between a final judgment, a preliminary judgment and an intermediary or interlocutory judgment. While dealing with an intermediary or interlocutory judgment, the Supreme Court held: ―Most of the interlocutory orders which contain the quality of finality are clearly specified in clauses (a) to (w) of Order 43 Rule 1[of the Code of Civil Procedure] and have already been held by us to be judgments within the meaning of the letters patent and, therefore, appealable. There may also be interlocutory orders which are not covered by Order 43 Rule 1 but which also possess the characteristics and trappings of finality in that, the orders may adversely affect a valuable right of the party or decide an important aspect of the trial in an ancillary proceeding. Before such an order can be a judgment the adverse effect on the party concerned must be direct and immediate rather than indirect or remote.‖ (emphasis supplied) Similarly, paragraphs 114 and 115 of the Report are important and they read as follows: RFA No. 440/2009 Page 14 of 37 ―114. In the course of the trial, the trial Judge may pass a number of orders whereby some of the various steps to be taken by the parties in prosecution of the suit may be of a routine nature while other orders may cause some inconvenience to one party or the other, e.g., an order refusing an adjournment, an order refusing to summon an additional witness or documents, an order refusing to condone delay in filing documents, after the first date of hearing an order of costs to one of the parties for its default or an order exercising discretion in respect of a procedural matter against one party or the other. Such orders are purely interlocutory and cannot constitute judgments because it will always be open to the aggrieved party to make a grievance of the order passed against the party concerned in the appeal against the final judgment passed by the trial Judge. ―115. Thus, in other words every interlocutory order cannot be regarded as a judgment but only those orders would be judgments which decide matters of moment or affect vital and valuable rights of the parties and which work serious injustice to the party concerned. Similarly, orders passed by the trial Judge deciding question of admissibility or relevancy of a document also cannot be treated as judgments because the grievance on this score can be corrected by the appellate court in appeal against the final judgment.‖ (emphasis supplied) 21. The principles that may be culled out from the various judgments cited before us clearly suggest that for an interlocutory order to be appealable: 1. It must not be procedural in nature. 2. It must determine not only the rights or liabilities of the parties but their valuable rights or liabilities. In other words, it must decide a matter of moment. 3. It must have the characteristics or trappings of conclusiveness or finality or must result (in a sense) in the termination of proceedings. 4. An interlocutory or intermediary order is to be contradistinguished with a final order. RFA No. 440/2009 Page 15 of 37 5. The effect of an appealable interlocutory order must be direct and immediate and not indirect and remote. Examples of interlocutory orders have been given in Gokal Chand and Shah Babulal Khimji and are not repeated here. 22. Looked at in the light of the above principles, it is difficult to accept the view canvassed by learned counsel for the Appellant that this appeal would be maintainable. Clearly, the attempt to introduce the annual report on 25th August, 2009 is a off-shoot of the failure of the Appellant to take advantage of a procedural matter. The Appellant could very well have filed the document as per the requirement of the Copyright Board – sufficient time was given to the parties to place all their documents on the record. Since the Appellant failed to do so, it cannot be allowed to collaterally introduce the annual report by confronting a witness in cross-examination. Having failed to take advantage of the procedure laid down, the Appellant cannot be permitted to argue that a substantive and valuable right has been violated. The matter still remains in the domain of procedure and no amount of argument to the contrary can change the situation. 23. We also find that the order passed by the Copyright Board declining permission to the Appellant to confront the witness with the RFA No. 440/2009 Page 16 of 37 annual report is not a decision on a matter of moment. No rights or liabilities of anybody have been decided in this regard. All that has happened is that the Appellant has not been allowed to place on record a document that it considers to be relevant and important. Even if the Copyright Board erred in its decision, it is not as if the Appellant is left without any remedy. On the facts of this case, as already noted by the Tribunal in its order dated 26th August, 2009 there is at least one more witness who can also deal with the financial aspects of the Respondent and who can appropriately be cross-examined by learned counsel for the Appellant. Therefore, discharging Ms. Aarti Kathariya from further cross-examination is of little consequence. That apart, additional evidence can be introduced, if permissible and necessary at a later stage and even at the appellate stage, so that no injustice is done to the parties. Clearly, therefore, it is not as if the matter would come to an end insofar as the Appellant is concerned if it is not allowed to bring the annual report on record. 24. In our opinion, there is also no finality attached to the decision rendered by the Copyright Board declining