THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on: 31.08.2007 + CS (OS) 527/2007 THE INDIAN PERFORMING RIGHT SOCIETY LTD. ...Plaintiff - versus - SANJAY DALIA & ANOTHER ...Defendants Advocates who appeared in this case: For the Plaintiff : Mr Rajiv Shakdhar, Sr. Advocate with Mr Himanshu Bagai For the Defendant : Mr Rajiv Nayar, Sr. Advocate with Mr Mahesh Agarwal, Mr Rishi Agarwal, Mr Bhagvan Swarup Shukla and Mr Sagar Pathal CORAM:- HON'BLE MR JUSTICE BADAR DURREZ AHMED 1. Whether Reporters of local papers may be allowed to see the judgment ? 2. To be referred to the Reporter or not ? 3. Whether the judgment should be reported in Digest ? BADAR DURREZ AHMED, J 1. An objection with regard to the territorial jurisdiction of this Court in entertaining the present suit has been taken by the defendants. In paragraph 25 of the plaint it has been stated that this Court has territorial jurisdiction to entertain and try the present suit by virtue of Section 62 (2) of the Copyright Act, 1957 as the plaintiff “carries on business” through its branch office situated at B-317, Som Dutt Chamber-1, Bhikaji Cama Place, New Delhi within the territorial limits of this High Court. The objection raised by the defendants CS(OS)527/2007 Page No 1 of 16 is that the expression “carries on business” appearing in Section 62 (2)1 of the Copyright Act, 1957 has to be understood in the manner indicated in the explanation to Section 202 of the Code of Civil Procedure, 1908 (hereinafter referred to as the 'CPC'). It has been contended on behalf of the defendants that the said explanation clearly stipulates that a corporation is deemed to carry on business at its sole or principal office in India. If it has a subordinate office and any cause of action arises at the place of the subordinate office, then the corporation shall be deemed to carry on business at the place of such subordinate office also. The contention is that the plaintiff has filed this suit on the basis of the existence of a purported branch office at New Delhi. But Delhi can only be regarded as a place where the plaintiff carries on business if the cause of action has arisen at Delhi. And, according to the defendants, no 1 62. Jurisdiction of court over matters arising under this Chapter.— (1) Every suit or other civil proceeding arising under this Chapter in respect of the infringement of copyright in any work or the infringement of any other right conferred by this Act shall be instituted in the district court having jurisdiction. (2) For the purpose of sub-section (1), a "district court having jurisdiction" shall, notwithstanding anything contained in the Code of Civil Procedure, 1908(5 of 1908), or any other law for the time being in force include a direct court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceedings, the person instituting the suit or other proceeding or, where there are more than one such persons, any of them actually and voluntarily resides or carries on business or personally works for gain. 2 20.Other suits to be instituted where defendants reside or cause of action arises.- Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction— (a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or (c) the cause of action, wholly or in part, arises. CS(OS)527/2007 Page No 2 of 16 part of the cause of action has arisen in Delhi. Therefore, they say, this court would not have jurisdiction. 2. The plaintiff is a company limited by guarantee and registered under the Companies Act, 1956. It is also registered as a copyright society under Section 33 of the Copyright Act, 1957. The registered office of the company is at Mumbai. The plaintiff, as per the statements made in the plaint, is a non-profit making body established for the purposes of monitoring, protecting and enforcing the rights, interests and privileges of its members comprising of authors, composers and publishers of literary and/ or musical works as well as on behalf of the members of other sister societies who are owners of copyrights in their literary and musical works. The defendant No.1 is the Chief General Manager of defendant No.2 (Cineline Cinemas). The defendant No.2, as per the averments in the plaint, are pioneers in cinema exhibition with 33 screens up and running in various locations and 97 screens in the making. It is alleged that the defendants have been indulging in continuous violation of the rights of the plaintiff by communicating to the public / publicly performing, literary and / or musical works from the plaintiff's repertoire without having obtained a licence from the plaintiff to do so. It is alleged that the defendants had been put on adequate notice of the plaintiff's rights but to no avail. On the basis of the averments made in the plaint, the plaintiff has prayed for an order of permanent injunction restraining the CS(OS)527/2007 Page No 3 of 16 defendants from performing/ communicating to the public literary works and / or musical works / playing of live music or any other means, or by way of mechanical devices at any premises, literary and / or musical works of the plaintiff by way of live performances or mechanical devices such as public address systems/ radio/ T. V sets/ cinema theaters without obtaining a licence from the plaintiff and without paying the requisite licence fee. Damages have also been claimed to the tune of Rs 20,01,000/-. 3. The defendants have raised objections with regard to the territorial jurisdiction of this Court in entertaining the suit filed by the plaintiff. It has been submitted that the entire cause of action has arisen at Mumbai. Both the plaintiff and the defendant No.2 have their principal offices in Mumbai. It was further submitted that the plaintiff is seeking its rights under assignments of musical works by lyric writers and music composers. The assignments deeds that have been filed by the plaintiff are all executed at Mumbai by artists residing at Mumbai. The licences filed by the plaintiff along with the plaint have all been executed in Mumbai. The notices issued by the plaintiff to the defendant, all mention only the plaintiff's address at Mumbai. Apart from all this, it was contended that the suit has been signed and verified at Mumbai. The affidavits have been attested at Mumbai. Even the replies to applications have been verified at Mumbai. The affidavit in support of the replication has also been verified at Mumbai. It was also contended that the defendants also CS(OS)527/2007 Page No 4 of 16 reside at Mumbai. As its major defence, the defendants have relied upon the licences issued by Phonographic Performance Limited, a society under the Copyright Act, 1957. These licences have also been issued in Mumbai. The defendants presently have cinema halls in Maharashtra/ Mumbai. No part of the cause of action, according to the defendants, has arisen at New Delhi. In fact, they contend that the entire cause of action, as per allegations in the plaint, has arisen at Mumbai alone. 4. Mr Rajiv Nayar, the learned senior counsel who appeared on behalf of the defendants, submitted that Section 62 (2) of the Copyright Act provided an additional forum where a plaintiff could institute the suit. But this did not mean that the provisions of Section 20 CPC have to be ignored. Only the impediment that was placed by Section 20 CPC with regard to filing of a suit by a plaintiff based upon the place where the plaintiff actually and voluntarily resided or carried on business or personally worked for gain, was removed. He submitted that Section 20 CPC permitted suits to be filed only at places where the defendant actually and voluntarily resided or carried on business or personally worked for gain. Section 62 (2) of the Copyright Act, 1957, according to Mr Nayar, provided an additional forum for a plaintiff and permitted him to also institute a suit where he actually and voluntarily resided or carried on business or personally worked for gain. It was contended by him that in the present case the plaintiff being a corporation the expression “carries CS(OS)527/2007 Page No 5 of 16 on business” as appearing in Section 62 (2) of the Copyright Act, 1957 has to be construed in the sense given in the explanation to Section 20 CPC. He submitted that a corporation would be deemed to be situated at its registered office in view of the decision of the Supreme Court in the case of Morgan Stanley Mutual Fund v Kartik Das: (1994) 4 SCC 225. 5. Mr Nayar referred to the decision of the Supreme Court in the case of Dhodha House v S. K. Maingi: (2006) 9 SCC 41 wherein the Supreme Court observed that the territorial jurisdiction conferred upon the Court in terms of the provisions of the CPC indisputably shall apply to a suit or proceeding under the Copyright Act, 1957 (see para 44). The Supreme Court also observed that sub Section (2) of Section 62 of the Copyright Act, 1957 provided for an additional forum so as to enable the author to file a suit who may not otherwise be in a position to file a suit at different places where his copyright was violated. In the very same decision the Supreme Court also observed that it is well settled that the Court shall not readily presume the existence of jurisdiction of a court which was not conferred by the statute. In this context, the Supreme Court observed:- “For the purpose of attracting the jurisdiction of a court in terms of sub-section (2) of Section 62 of the 1957 Act, the conditions precedent specified therein must be fulfilled, the requisites wherefor are that the plaintiff must actually and voluntarily reside or carry on business or personally work for gain”. CS(OS)527/2007 Page No 6 of 16 The Supreme Court also observed that ordinarily, the residence of a company would be where the registered office is. This observation was made with reference to its earlier decision in the case of Morgan Stanley Mutual Fund (supra). 6. In Dhodha House (supra), the Supreme Court also considered the expression “carries on business”. While construing the same, it was of the view that for the purpose of carrying on business only presence of a man at a place is not necessary. Such business may be carried on at a place through an agent or a manager or through a servant. The owner may not event visit that place. The phrase “carries on business" at a certain place would, therefore, mean having an interest in a business at that place, a voice in what is done, a share in the gain or loss and some control thereover. The Court also cited with approval the passage in Mulla on the Code of Civil Procedure, 15th Edn. that one of the conditions which must be satisfied before it can be said that a business is carried on at a particular place is that the essential part of the business must take place in that place. Then, in paragraph 47 of the said decision, the Supreme Court observed as under:- “47. A corporation in view of Explanation appended to Section 20 of the Code would be deemed to be carrying on business inter alia at a place where it has a subordinate office. Only because, its goods are being sold at a place would thus evidently not mean that it carries a business at that place.” CS(OS)527/2007 Page No 7 of 16 7. Mr Rajiv Nayar referred to the decision of a learned Single Judge (R. C. Lahoti, J as he then was ) of this Court in the case of Lok Nath Prasad Gupta v. Bijay Kumar Gupta: 57 (1995) DLT 502. The very question that arose in that case was — which would be the forum before which a suit could be filed by the plaintiff in respect of infringement of a copyright or infringement of any other right conferred by the Copyright Act, 1957 in view of the provisions of Section 62 thereof read with Section 20 CPC? The averment made in the plaint in that case was that this Court had jurisdiction to entertain and try the suit as the defendant was selling its products within the territorial jurisdiction of this Court. It was further contended that this Court had jurisdiction under Section 62 (2) of the Copyright Act, 1957 as the plaintiff carried on its business within the territorial jurisdiction of this Court. In the said decision it is observed that apart from the aforesaid statement contained in the plaint, it has not been mentioned as to how and in what manner the plaintiff carried on his business within the jurisdiction of this Court. After referring to provisions of Section 20 CPC as also Section 62 of the Copyright Act, 1957, the learned Single Judge was of the view that the effect of sub-section (2) of Section 62 of the Copyright Act, 1957 is that a suit in respect of infringement of a right could be filed not only in a District Court having jurisdiction by reference to the CPC but also in a District Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or other proceeding or, where there are more than CS(OS)527/2007 Page No 8 of 16 one such person, any of them, actually and voluntarily resides or carries on business or personally works for gain, though such a District Court would not have had jurisdiction but for the provisions of Section 62 (2) of the Copyright Act, 1957. More importantly the Court held:- “8. "Actually and voluntarily resides", "carries on business" and "personally works for gain" have the same meaning to be assigned in Section 20 of the Code or in Section 62(2) of the Act.” Having so held, the plaint was directed to be returned to the plaintiff for presentation before the proper court. 8. Mr Rajiv Nayar also referred to a decision of Bombay High Court in the case of Arun Digamber Varangaonkar v. M/s Kharpe Gruh Udyog and Others: AIR 1997 Bombay 299. However, in my view no further discussion of this decision is necessary as it would not have much bearing on the present case. 9. Mr Rajiv Shakdhar, the learned senior counsel appearing on behalf of the plaintiff, submitted that it is stated in the plaint that the plaintiff carries on business at Delhi through its branch office. He further submitted that the documents filed with the plaint, for example, the plaintiff's annual report also shows this office at Delhi. He contended that at this stage where the question of return of the plaint is to be considered, only the averments in the plaint and CS(OS)527/2007 Page No 9 of 16 the documents filed along with the plaint are to be seen. So, according to the averments made in the plaint and the documents filed along with it, it is clear that the plaintiff has stated that it carries on business at Delhi. According to Mr Shakdhar this alone is sufficient to clothe this Court with territorial jurisdiction insofar as the present suit is concerned. 10. He submitted that Section 62(2) of the Copyright Act, 1957 is a radical departure from the normal rules of jurisdiction provided for under Section 20 CPC. Referring to the Supreme Court decision in the case of Exphar SA and Another v Eupharma Labortories Ltd. and Another: (2004) 3 SCC 688. He submitted that the objection and the reason for introduction of Section 62 (2) was not to restrict the owners of the copyright to exercise their rights but to remove any impediment from doing so. The Court had observed that Section 62 (2) cannot be read as limiting the jurisdiction of the District Court only to cases where the person instituting the suit or other proceeding, or where there are more than one such persons, any of them actually and voluntarily resides or carries on business or presently works for gain. It prescribes an additional ground for attracting the jurisdiction of a Court over and above the “normal” grounds as laid down in Section 20 of the CPC. In my view, there can be no dispute with these observations. Even the defendants had submitted that Section 62 (2) provides an additional forum as was indicated in the Supreme Court decision in Dhodha House (supra). There is no doubt that CS(OS)527/2007 Page No 10 of 16 Section 62 (2) of the Copyright Act, 1957 does not take away anything from Section 20 CPC but adds something to it. The something that it adds is that even the plaintiff's place of residence, the plaintiff's place of business and where the plaintiff works for gain have been nominated as places where the suit could be instituted. Therefore, in my view there is nothing in Exphar SA(supra) which militates against the submissions made on behalf of the defendants or enables the Court to take a view that this Court would have jurisdiction in the present case. 11. Mr Shakdhar also referred to the Joint Committee deliberations in respect of the Copyright Bill, 1955 prior to the enactment of the Copyright Act, 1957 in its present form. He referred to the following words of the Joint Committee:- “Clause 61 (Original clause 65).— Sub-clause (2) of the original clause 65 has been omitted and replaced by a new sub-clause. The Committee feels that the provisions of the original sub-clause (2) would virtually make registration of copyright compulsory and would be an undue restriction on the owner of the copyright to exercise his rights. In the opinion of the Committee many authors are deterred from instituting infringement proceedings because the court in which such proceedings are to be instituted is situated at a considerable distance from the place of their ordinary residence. The Committee feels that this impediment should be removed and the new sub-clause (2) accordingly provides that infringement proceedings may be instituted in the district court within the local limits of whose jurisdiction the person instituting the proceedings ordinarily resides, carries on business etc.” CS(OS)527/2007 Page No 11 of 16 According to Mr Shakdhar the explanation to Section 20 would run counter to the intendment behind the introduction of Section 62 (2). A reference was also made by him to Section 4 of the CPC to submit that the CPC itself gave precedence to the applicability of special and local laws in force. He submitted that the Copyright Act, 1957 was a special law promulgated to amend and consolidate the law relating to copyrights and, therefore, Section 62 (2) cannot be read as being subject to the explanation appended to Section 20 CPC. He further submitted that the non obstante clause contained in clause 62 (2) was equivalent to saying that in spite of the provisions of the CPC, the provisions of Section 62 (2) would apply. This, he submitted on the strength of the Supreme Court decision in the case of Chandavarkar Sita Ratna Rao v Ashalata: AIR 1987 SC 117 wherein the scope of a non obstante clause was considered. He submitted that it is well settled that the expression “notwithstanding” is in contradistinction to the phrase “subject to”, the latter conveying the idea of a provision yielding place to another provision or other provisions to which it is made subject to. He submitted that the words “subject to” are not mentioned in Section 62 (2). Instead the word “notwithstanding” is used. Therefore, Section 62 (2) has to be given its full meaning notwithstanding anything that may be contained in the CPC. Reference was also made to the decision of the Supreme Court in the case of Narcotics Control Bureau v Kishan Lal: AIR 1991 SC 558 for showing the importance of the intendment of a statute. However, no further discussion in respect of that case would be necessary as in my view the CS(OS)527/2007 Page No 12 of 16 said decision is not relevant for the purposes of the present case as would be clear from the discussion below. 12. Lastly, it was contended by Mr Shakdhar that the cause of action had also arisen in part in Delhi because the defendants carry on business all over India and the plaintiff envisages an imminent threat and apprehension of the defendants expanding their business to Delhi. The threat in itself would mean a cause of action and if the threat is felt in Delhi then the cause of action would have arisen in Delhi. For this proposition, he relied upon the decision in the case of Pfizer Products, Inc. v. Rajesh Chopra and Others: 2006 (32) PTC 301 (Delhi). However, I find that that decision would not be applicable to the facts of the present case. That was a suit for injunction against infringement of a trade mark. The present case falls under an entirely different category and is one under the Copyright Act, 1957. That decision would not be applicable to the facts and circumstances of the present case. 13. There is no doubt that the explanation in Section 20 CPC has reference to the expression “carries on business” appearing in clauses (a) and (b) of Section 20 which in turn speaks of a defendant or defendants. This explanation creates a fiction that a corporation carries on business at its sole or principal office in India or in respect of any cause of action arising at any place where it has also a subordinate office, at such place. The meaning is very clear. CS(OS)527/2007 Page No 13 of 16 If a corporation has a sole or principal office at place “A”, it will be deemed to carry on business at place “A”. However, if it has a subordinate office at place “B” then it will be deemed to carry on business at place “B” only if the cause of action also arises at place “B”. The meaning, therefore, is that a corporation would be deemed to carry on business at a subordinate office or a branch office only in respect of any cause of action arising at the place where the branch office or the subordinate office is situated. As pointed out above, this explanation has reference to a defendant because it is only where the defendant actually and voluntarily resides, or carries on business, or personally works for gain that a suit can be instituted under Clause (a) [or clause (b) where there are more than one defendant] of Section 20 CPC. But this defendant – centric impediment has been removed by virtue of Section 62 (2) of the Copyright Act, 1957 and, now, not only the courts at the place where the defendant actually or voluntarily resides, or carries on business, or personally works for gain but also the courts at the place where the plaintiff actually and voluntarily resides, or carries on business, or personally works for gain, would have jurisdiction to entertain a suit for infringement of a right under the Copyright Act, 1957. Therefore, what Section 62 (2) has done is to remove the fetter and expand the scope of Section 20 CPC by extending the