Case title:
PHONOGRAPHIC PERFORMANCE LIMITED V. AZURE HOSPITALITY PVT. LTD
Date of Order:
3rd March 2025
Bench:
Hon’ble Mr. Justice Amit Bansal
Parties:
Plaintiff: Phonographic Performance Limited
Defendants: Azure Hospitality Private Limited & Ors.
SUBJECT:
The Delhi High Court addressed whether PPL, which manages public performance rights for music labels, could issue licenses without being a registered copyright society. PPL sued Azure Hospitality for unauthorized use of its copyrighted music in restaurants, while the Defendants argued that only a registered copyright society could issue licenses and that a withdrawn Bombay High Court suit barred the case. The Court rejected the bar under Order 23 Rule 1(4) CPC, holding that the prior suit was an anticipatory action, whereas the present case dealt with actual infringement. It further clarified that Section 33 of the Copyright Act does not override Section 30, allowing copyright owners to grant licenses individually. Since PPL held exclusive rights, it could enforce copyright without mandatory registration as a society. Accordingly, the Court ruled in favour of PPL, granting an interim injunction against Azure Hospitality, restraining unauthorized use of copyrighted sound recordings.
IMPORTANT PROVISIONS:
The Code of Civil Procedure, 1908 (CPC):
- Order XXXIX Rules 1 and 2: Deal with temporary injunctions, allowing Courts to prevent potential harm to parties in a suit until a final decision is made, by restraining the Defendants from certain actions.
- Order XXXIX Rule 4: permits a dissatisfied party with a temporary injunction order to apply to the Court to discharge, vary, or set aside the injunction, but only under specific circumstances.
- Order XXIII Rule 1: Allows Plaintiff to withdraw a suit or abandon part of their claim, but with specific conditions for withdrawing with liberty to file a fresh suit.
The Copyright Act, 1957 (The Act): - Section 14 (e) (iii): grants the owner of the copyright of a sound recording the exclusive right to communicate the sound the sound recording to public.
- Section 18: Assignment of copyright
- Section 30: Where a person to whom a licence relating to copyright in any future work is granted under this Section dies before the work comes into existence, his legal representatives shall, in the absence of any provision to the contrary in the licence, be entitled to the benefit of the licence.
- Section 33: The Court, after the case has been heard, shall pronounce judgment, and on such a decree shall follow.
- Section 51: copyright infringement
- Section 55: deals with civil remedies available to copyright owners when their work is infringed.
OVERVIEW:
- Phonographic Performance Limited (Plaintiff), is a company (formerly a copyright society) engaged in the business of issuing licences for public performance of sound record labels, upon execution of assignment deeds u/s 18 of the Copyright Act with its assignors’ sound recordings.
- In July 2022, when representatives of the Plaintiff visited one of the Defendant No.1’s (Azure Hospitality Private Limited; a company running restaurants and bars) restaurants, they found that the Defendant was exploiting the sound recording of the Plaintiff in the said premises without taking any licence from the Plaintiff.
- Despite receiving a Cease & Desist Notice from the Plaintiff, the Defendant continued their exploitation of the Plaintiff’s sound recordings without the procuring a license.
- The Plaintiff thereby filed a suit against the Defendant seeking a permanent injunction for infringing their copyright.
ISSUES RAISED:
- Whether the Plaintiff can be deemed the owner of the copyright?
- Does the Plaintiff have to be registered as a copyright society to enforce its ownership rights?
ARGUMENTS ADVANCED BY THE PLAINTIFF:
- It was submitted that the Plaintiff was the owner of copyright of the sound recordings and had acquired public performance rights in various sound recordings through assignment deeds under Section 18 of the Act. The Assignment deed conferred the rights of issuing licences and independent enforcement upon the Plaintiff.
- Section 30 of the Act empowers the Plaintiff to issue licences as an assignee. Moreover, this right exists regardless of the Plaintiff’s registration as a copyright society.
- Section 33 of the Act does not bar the Plaintiff as a copyright owner from issuing copyright licences.
- A previous suit before the Bombay High Court arose out of a different cause of action. The suit before the Bombay High Court was a quia timet action, whereas the instant suit was based on actual ongoing infringement. Therefore, according to order XXIII Rule 1 of CPC, withdrawal of the Bombay suit does not prevent the institution of the present suit.
ARGUMENTS ADVANCED BY THE DEFENDANT:
- As per Section 33 of the Act, only copyright societies are authorized to issue licenses for public performance rights & collect royalties, but the Plaintiff surrendered its registration as a copyright society in 2014, due to the amendment brought in the Act requiring it to re-register itself.
- The Plaintiff concealed the fact the it had previously withdrawn a similar suit, without any liberty to file a fresh suit, filed before the Bombay High Court. Plaintiff is thus, barred in terms of Order XXIII Rule 1 of CPC.
- The ex-parte ad-interim injunction granted against the Defendant should be vacated as per Order XXXIX Rule 4 of CPC, considering the Plaintiff’s suppression of material facts & erroneous interpretation of the provisions of the Act.
- Furthermore, the Plaintiff has failed to adduce evidence to prove substantial caused by the Defendant’s actions.
JUDGEMENT ANALYSIS:
- The Court held that the cause of action in the Bombay suit and in instant suit have separate causes of action. It rejected the Defendant’s argument that the Plaintiff was barred to file the present suit under Order XXIII Rule 1 o CPC, stating it was not applicable in the present case as the provision only bars initiating a fresh suit on the same cause of action.
- It further acknowledged that there was no suppression of material facts by the Plaintiff. Mere omission of mentioning the Bombay suit, does not amount to concealment of facts.
- It was held that Section 33 – which deals with copyright societies – does not override the provisions of Section 30, which grants owners of copyright (including an assignee) to grant licences.
- The assignment deeds executed between the Plaintiff and the assignor u/s 18 of the Act grants the Plaintiff the ownership of the copyright.
- The Court reiterated the distinction between copyright owners & copyright societies. Owners of copyrights are allowed to assign rights to a society while retaining their individual licensing authority.
- It held that in the present case Plaintiff would be considered owners for the assigned rights as per Section 54. Plaintiff possess the authority to enforce its ownership of copyright without requiring to be registered as copyright society.
- It further observed that the Defendant had not refuted the Plaintiff’s claims of them playing the sound recordings without a licence.
- The Court observed that allowing the Defendant to continue using the Plaintiff’s copyrighted works would amount to infringement.
CONCLUSION
Consequently, the Delhi High Court ruled that the balance of convenience lay in favour of the Plaintiff. It observed while restraining the Defendants from playing the sound recordings would not result in closure of the Defendant conducting its business of serving food and drinks, but the Plaintiff would suffer damages if licences are not obtained from it. The Court granted a permanent injunction in the Plaintiff’s favour. This judgment highlights the rights of Copyright owners and assignees under the Copyright Act. It clarifies the that assignees of a copyright retain its ownership without having to be registered as a copyright soc
