1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUIT NO.2124 OF 2007 Music Choice India Private Limited ...Plaintiff Vs. Phonographic Performance Limited ...Defendant Mr.J.Dwarkadas with Mr. Himansu Kane for Plaintiff Mr.Amit Jamsandekar with Dr. V. Tulzapurkar i/b. Bilawal & Co., for Defendant WITH SUIT NO.2283 OF 2007 Music Choice India Private Limited ...Plaintiff Vs. Super Cassettes Industries Limited ...Defendant Mr.J.Dwarkadas with Mr. H.W.Kane for Plaintiff Mr. A. Bookwala with Mr. Rupesh N.Gaonkar for Defendant CORAM: SMT.ROSHAN DALVI, J. DATED: 22ND JANUARY, 2009 JUDGMENT: 1. The Plaintiff is a broadcaster of music inter alia on the television and operating through local operators of Satellite, cable and Internet platform. The Defendant is a Collecting Society constituted under Section 33(3) of the Copyright Act, 2 1957 (the Act) to perform the statutory duties and public functions essentially under Section 31 of the Act. Section 31 runs thus :- “31. Compulsory licence in works withheld from public – (1) If at any time during the term of copyright in any Indian work which has been published or performed in public, a complaint is made to the Copyright Board that the owner of copyright in the work - (a) has refused to re-publish or allow the re- publication of the work or has refused to allow the performance in public of the work, and by reason of such refusal the work is withheld from the public ; or (b) has refused to allow communication to the public by [broadcast], of such work or in the case of a [sound recording] the work recorded in such [sound recording], on terms which the complaint considers reasonable. the Copyright Board, after giving to the owner of the copyright in the work a reasonable opportunity of being heard and after holding such inquiry as it may deem necessary, may, if it is satisfied that the grounds for such refusal are not reasonable, direct the Registrar of Copyrights to grant to the complainant a licence to re- publish the work, perform the work in public or commu -nicate the work to the public by [broadcast], as the case may be, subject to payment to the owner of the copyright of such compensation and subject to such other terms and conditions as the Copyright Board may determine; and thereupon the Registrar of Copyrights shall grant the licence to the complainant in accordance with the directions of Copyright Board, on payment of such fee as may be prescribed. Explanation,- In this sub-section, the expression “Indian 3 work” includes - (i) an artistic work, the author of which is a citizen of India; and (ii) a cinematograph film or a [sound recording] made or manufactured in India. (2)Where two or more persons have made a complaint under sub-section(1), the licence shall be granted to the complainant who in the opinion of the Copyright Board would best serve the interests of the general public.” 2. The Plaintiff sought certain Government clearances and licences to broadcast music. Thereupon the Plaintiff sought a licence from the owner of the Copyright in sound recordings to broadcast their music. The Defendant is the assignee of such rights of several owners who are the record publishing companies. The Plaintiff has, therefore, sought licence from the Defendant to allow the Plaintiff to broadcast their sound records. The Plaintiff' s offer was made on certain terms (as to payment of money for broadcasting those sound records) which the Plaintiff considered reasonable. The Defendant has not accepted that offer. It is the Plaintiff's case that the Defendant has demanded an unreasonable royalty from the broadcasters, such as the Plaintiff, compelling them to approach the Copyright Board and the Civil Court. It is the Plaintiff's case that the royalty claimed by the Defendant is excessive and arbitrary which the Defendant, as a creature of the Statute (the Act) cannot 4 do. 3. It is the Plaintiff's case that the purpose and object of the aforesaid statutory provision is that the owner of the Copyright or his assignee cannot refuse to allow its communication to the public by broadcast and must allow it on reasonable terms. It is the contention on behalf of the Plaintiff that those reasonable terms are essentially what the Plaintiff considers reasonable and not what the Defendant might deem reasonable. 4. It is however clarified by Mr. Dwarkadas on behalf of the Plaintiff that the Plaintiff has not sought any order and direction from this Court as to the extent of the royalty to be paid or the rate of the royalty to be fixed by this Court, which is conceded to be in the exclusive jurisdiction of the Copyright Board under the aforesaid provision. Hence, the Plaintiff's suit is for an order and declaration that the Plaintiff is entitled to a licence to broadcast the present and future sound recordings of the Defendant on payment to the Defendant of such royalty and compensation subject to the terms and conditions determined by the Copyright Board on the Plaintiff's application already filed on 4th July 2007 for compulsory licence under Section 31(1)(b) of the Act. 5 5. The Plaintiff's suit is also for an injunction against the Defendant restraining them from interfering with the Plaintiff's broadcast of the sound recordings of the Defendant upon the Plaintiff paying the Defendant the royalty or compensation fixed by the Copyright Board and upon the terms and conditions determined by the Board on the aforesaid application of the Plaintiff. 6. It is the Defendant's case that only the Copyright Board can determine the amount of reasonable royalty or compensation, if it is not agreed between the parties upon following the procedure laid down in Section 31(1)(b) of the Act. The Defendant, therefore, contends that the Plaintiff's suit for the aforesaid declaration and injunction is not maintainable in a Civil Court, as falling outside the purview of Section 9 of the C.P.C. The Defendant has filed its written statement inter alia in that behalf. The issue relating to the inherent jurisdiction of the Civil Court is required to be determined under the provisions of Order XIV Rule 2 of the C.P.C. The preliminary issue has been framed. The Plaintiff desires its amendment. It is, therefore, re-framed as follows:- Whether this Court has inherent jurisdiction to try the Suit. 6 7. One mode of reading of plaint is to see the Plaintiff' s position as the Broadcaster and the rights which the Plaintiff claims under the Act for the reliefs claimed in the suit to grant the Plaintiff the relief claimed at the first hearing of the Suit itself upon the premise that the Plaintiff' s prayer for a declaration as to its entitlement to the licence is itself subject to the decision of the Copyright Board, which fact, in essence, is not disputed. Mr. Dwarkadas laid much emphasis upon the fact that the Plaintiff has not sought the relief of calling upon this Civil Court to grant the Plaintiff, the licence to re-publish or broadcast the sound recordings assigned to the Defendant or to decide the extent of the fee as compensation, or royalty payable therefor. Hence, contends Mr. Dwarkadas, the Court' s inherent jurisdiction is not barred and the jurisdiction of the Copyright Board under Section 31(1)(b) is preserved. However, this argument misses the intrinsic relief that the Plaintiff seeks, pending the decision of the Copyright Board since the decree, if granted, in terms of the prayer (a) of the suit would be to allow the Plaintiff a licence to broadcast either without fixation of the royalty and compensation on merits upon the enquiry required to be made by the Copyright Board under the aforesaid Section or upon the royalty as fixed by the Plaintiff 7 itself, which has not been accepted by the Defendant. The Plaintiff has obtained an ad-interim order to broadcast the sound recordings assigned to the Defendant pending the suit without determination of the merits of its offer. That order would in terms be extended pending the decision of the Copyright Board. That order would therefore, allow the Plaintiff to broadcast those sound recordings before any adjudication of the Plaintiff's claim on merits by the Copyright Board upon following the procedure established by law i.e., under the Act. In fact that dubious end has been achieved. Merits of the Plaintiff's claim is not seen. Yet an injunction has ensued pending the interim relief and the consideration of the inherent jurisdiction of this Court. Besides, no irreparable loss or injury can be stated to be caused to the Plaintiff for not being allowed to broadcast the Defendant' s sound recordings before the Plaintiff makes out such prima facie case of reasonable compensation offered by it on merits. That would be much like allowing a party to commence business without obtaining a licence because he has applied for one ! The mischief is, therefore, translucent. 8. It is clear from the aforesaid Section that when any offer inter alia of a Broadcaster is refused by any owner of a Copyright or his assignee for broadcasting any sound 8 recording which is meant to be communicated to the public on the terms which the Broadcaster considers reasonable, a complaint to the Copyright Board is statutorily required to be made. That complaint has to be enquired into and examined by the Copyright Board. The Copyright Board is required to follow the procedure set out in that provision. He has to give the owner of the Copyright a reasonable opportunity of being heard. He has to hold an enquiry as he may deem necessary. He has to satisfy himself that the grounds of the refusal of the owner of the copyright or his assignee are not reasonable, and if and when that procedure is followed he has to direct the Registrar of Copyrights to grant to the complainant the licence to broadcast. This grant would be on terms and conditions determined by the Copyright Board for payment of royalty and compensation and for doing such other acts and things as the Board may determine. The Section, therefore, is a complete Code. It lays down the entire procedure for determining the extent of the royalty. The Copyright Board may or may not accept the terms of the complainant as reasonable. It may impose further terms and conditions. It may direct the Plaintiff/Complainant to make such payment of fee as royalty or compensation, as it may consider reasonable. That may be equal to, more or less than what the 9 Plaintiff/Complainant may have offered the owners of the copyright or his assignee. 9. The Plaintiff has made its application under the aforesaid provision on 4th July 2007. The Plaintiff has filed this Suit immediately thereafter on 19th July 2007. 10. The main contention of the Plaintiff is that the Copyright Board does not meet and carry on its adjudicatory proceedings often. It is the Plaintiff' s case that the Copyright Board “meets only once or twice in a year”. It is the Plaintiff's grievance that, therefore, its application is not likely to be decided for one or two years. It is 1½ years since the filing of the suit itself. 11. The Plaintiff, therefore, has sought relief from two Forums – the Copyright Board and the Civil Court. The relief in this suit is the otherwise innocuous relief of being granted a declaration that the Plaintiff would have a licence to broadcast subject to the terms and conditions determined by the Copyright Board, which is the statutory provision itself, clocked upon the Plaintiff's case of obtaining interim relief in the Civil Court and the final relief in the Statutory Forum. The purpose of the mischief is apparent. Upon getting the 10 right to broadcast on the terms offered by the Plaintiff alone, notwithstanding the Defendant's non-acceptance or refusal of such offer, the Plaintiff would broadcast before the procedure established by law is effectuated. Hence, the Plaintiff would have circumvented with law through a more malleable legal procedure. On the Plaintiff' s own showing it would be years before the enquiry specifically contemplated in the aforesaid Section comes to a close with the statutory Appeals and further Appeals therefrom being availed of by either of the parties. The procedure established by law would thus be abused. It will have to be seen whether this Court would have jurisdiction to lend the Plaintiff its hand in such an exercise or whether this Court' s civil jurisdiction for determination of the disputes with regard to declaratory and injunctive relief, otherwise in the domain of another Statutory Forum, can be exercised to give relief of the nature prayed for in this Suit. 12. The Civil Court has jurisdiction to try all civil suits unless barred under Section 9 of the C.P.C. Section 9 runs thus:- 9.Courts to try all civil suits unless barred – The Courts shall (subject to the provisions herein contained) have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred. 11 It will therefore, have to be seen whether the Court' s civil jurisdiction is impliedly barred by Section 31(1)(b) of the Act. 13. Mr. Dwarkadas has relied upon the ad-interim order of injunction dated 28th June 2001 passed in a similar suit being Suit No.2138/2001 in the Notice of Motion taken out in that Suit being Notice of Motion No.1440/2001 on the main contention that the Plaintiff in that suit had also similarly applied for a licence of the Defendants herein at the rate offered by the Plaintiff which was not accepted by the Defendant on the premise that the Copyright Board met only once or twice a year and the Plaintiff would not be able to start their radio station to broadcast the sound recordings of the Defendant since they would not be able to get their application decided expeditiously. It is gratifying to note that there is one litigant who considers that the Civil Court would really decide his dispute expeditiously or at least more expeditiously than some another forum – specifically created for only such matters ! Such forums are created to take a part of the workload of the Civil Courts which are unable to decide disputes in pending matters expeditiously. In the above order Section 31 of the Act came to be considered. The right of the public to get a license on reasonable terms 12 for being allowed the communication of sound recordings by broadcast by various means, which is an exception to the voluntary licence granted by a owner of a Copyright to another in that behalf, came to be considered. That was to be on reasonable terms since the right of the public to avail itself of such communication was the object of that statutory provision itself. Hence, it came to be observed that the rate which the Plaintiff, as the Broadcaster, was to be charged could not be arbitrary or unreasonable since the Defendant being creature of that Statute was to perform statutory duties and public functions in which, as a rule of administrative law, arbitrariness should be eliminated. It also came to be observed that the interest of the Defendants was to be secured – The Defendant was the assignee of the owner of the Copyright and no term can be termed reasonable if it does not heed the rights of the owner of the Copyright himself/herself. Consequently in that ad-interim order a rate per hour of recorded music came to be fixed. A further advance payment of a fixed sum payable by the Broadcaster to be adjusted at the end of each month also came to be fixed. Upon those terms the Plaintiff in that suit was allowed to start FM radio station in one City. A Copyright Board was directed to be moved at an early date so that the dispute could be resolved in accordance with the 13 Act. The Court expressed its hope and trust that if such an application was moved, the Board would consider it sympathetically. The Plaintiff has already moved the Copyright Board. Within a fortnight of its application the Plaintiff has moved the Civil Court. The Plaintiff in that suit was directed to move the Copyright Board so that the dispute could be resolved. In this case, half the Plaintiff's battle is already won. The Copyright Board, already moved, would consider the Plaintiff's application. It is not known whether the Plaintiff has sought an early date before the Board or whether the Board has refused any such application of the Plaintiff. The aforesaid ad-interim order has not considered the inherent jurisdiction of the Court or an implied bar to its civil jurisdiction. 14. Mr. Dwarkadas relied upon the Division Bench judgment of this Court dated 13th April 2004 considering three appeals under Section 72 of the Act from the order of the Copyright Board, one being the case of Phonographic Performance Ltd. Vs. Music Broadcast Pvt. Ltd. In that case also the ambit of Section 31 of the Act has been considered. Section 31(1)(b) is observed to be in the nature of a proviso 14 or an exception to Section 31(1)(a). We are concerned with Section 31(1)(b) alone, which deals with broadcast of sound recordings. This legal position is not in dispute. This Court is not even called upon to adjudicate it. Since only the preliminary issue of jurisdiction is to be decided, the only relevant part of the aforesaid judgment is the observation that the Plaintiff must first approach the Holder of the Copyright to re-broadcast the work and offer terms which he considers reasonable. If such permission is refused by the Copyright Holder (or his assignee) the Plaintiff can approach the Copyright Board. The Copyright Board then holds an enquiry. The enquiry is to find out the grounds of refusal i.e., whether those grounds are reasonable or not, the Copyright Board would grant a licence to the Complainant, if it finds the reasons for refusal to be unreasonable. It is, therefore, held in paragraph 8 of the judgment that the question of determination of compensation is with the Copyright Board. The parties to the suit are not at dispute with this legal position also. A further observation in this judgment whilst considering Section 31(2) of the Act is that the Board can choose one or more amongst the Complainants who have applied for licence for broadcasting the sound recordings and that the Board is not required to choose only one such Complainant/Licencee. It is observed 15 that choosing only one complainant would militate against the principles incorporated in Section 31(1)(b) because the object of that Section is to grant licence to every Broadcaster to broadcast the work, if all those persons are willing to offer reasonable terms for such broadcasting. In fact that judgment is in line with the judgment of the Supreme Court in the case of Entertainment Network (India) Ltd. Vs. Super Cassette Industries, MIPR . 2008(2) 129 , in which the Supreme Court has held that the provisions of Section 31(2) are required to be read down in view of the object of Section 31(1)(b), and which shall be considered presently. The parties are not at dispute with regard to this legal position also. It is the observation following the ambit of Section 31(2) of the Act laid down in paragraph 9 of the aforesaid judgment of the Division Bench of this Court that is material in that case. The said observation runs thus :- “There is no question of the principle choosing one or two persons amongst the complainants who have applied for compulsory licence to broadcast once the Copyright Board finds that the terms offered were reasonable and that the complainant is willing to pay the compensation determined by the Copyright Board and it is also willing to abide by other terms and conditions which have been imposed.” Hence, that judgment holds that the right, if any, would accrue to all the persons who have sought a licence, which 16 has been refused by the Copyright Holder, and who have filed complaints only upon the Copyright Board adjudicating upon the terms and finding them reasonable. The judgment does not hold that pending such an adjudication the Civil Court can allow the Plaintiff, such as in this case, to be a Licencee for broadcasting the sound recordings of the Copyright Holder or his Assignee without payment of, what is adjudicated as reasonable fee by way of compensation or royalty therefor. 15. Mr.Dwarkadas relied upon the Supreme Court judgment in the case of Entertainment Network (India) Pvt. Ltd. (supra). That judgment has also likewise considered the allowance for broadcast upon the right of the public to receive such communication as an example of an exception to the rights of a Copyright Holder, by even more than one such application under the Act. A reading of the judgment has not drawn me to any corner where the Court has considered the Civil Court' s jurisdiction to grant any reliefs in any disputes with regard to the payment of royalty for availing of the exemption to apply to the Copyright Board by way of licence from the Copyright Holder for the works which cannot be withheld from the Court such as the 17 broadcast of sound recordings. Nay, the judgment has specifically laid down the procedure to be followed under Section 31(1)(b) by the Copyright Board including the holding of proper enquiry, the reasonable opportunity of being heard to the Copyright owner and to grant compensation only on reasonable basis to be determined and subject to compliance of other conditions. In fact the ratio decidendi of the judgment is that upon the refusal of a reasonable offer for obtaining a licence to broadcast the sound recording, a complaint to the Board for issue of compulsory licence is maintainable “ as it has jurisdiction to deal with the same”. Consequently the witnesses who were to present oral evidence, (which was earlier declined by the Copyright Board) were directed to appear before the Board and their evidence was directed to be considered by the Board. The concept of compulsory licencing, as against the general principles governing Copyrights as artistic literature and musical works which are owned by the author as the fruits of his labour and thus considered to be his property, was considered, it being a statutory exception in public interest. Consequently clauses (a) and (b) of Section 31 were considered separately. It was held that they should be disjunctive and not conjunctive. The concept of refusal by the owner of copyright and its ambit was laid down. The 18 mechanism provided to approach the Board under Section 31(1)(b) and its purpose was also considered- all of which do not come up for consideration in the issue before this Court. Similarly, as aforesaid, in the case of the Division Bench of this Court (supra) the ambit of Section 31(2) for grant of the licence to more than one individual and thus reading down Section 31(2) and its application to Section 31(1)(a) and under 31(1)(b) came to be considered. The conclusion set out in that judgment is the climax. It runs thus :- “Conclusion 105. As it was a case of abuse, the Board had the jurisdiction to entertain any application for grant of compulsory licence.” That observation in fact shows the implied bar of the jurisdiction of Civil Courts in such cases. 16. It would be worth undertaking the exercise of seeing how the Civil Court' s jurisdiction is impliedly barred in case of certain other Statutes. Mr. Jamsandekar has brought to my notice a number of such judgments which would be the culmination of a good deal of effort in that direction. 17. In the case of The Premier Automobiles Ltd. Vs. Kamlekar Shantaram Wadke of Bombay (1976) 1 S.C.C . 19 496 in which the ouster of Civil Court's jurisdiction where a Statute creates rights and liabilities and provides remedy for enforcement were considered. That case is related to