# ENTERTAINMENT NETWORK v. SUPER CASSETTE 167

- **Citation:** [2008] 9 S.C.R. 165
- **Court:** Supreme Court of India
- **Decided:** 2008-05-16
- **Case number:** Civil Appeal No. 5114 of 2005
- **Bench:** S.B. Sinha, Lokeshwar Singh Panta
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/entertainment-network-v-super-cassette-167-24842
- **Pages:** 74

## Headnote

)c
~
Copyright Act, 1957:
S.31 - Interpretation of - S.31(2) refers to case falling
under clause (a) of sub-section (1) of Section 31 and not clause c
(b) thereof- In terms of s.31, Principles of Natural Justice are
required to be complied with - The manner in which the Copyright Board dealt with the matter not approved - Order of the
Board set aside and matter remitted to the Board for consideration of the matter afresh on merit - Administrative Law -
D
Principles of Natural Justice - Constitution of India - Arlie/es
14, 19(1)(g).
Doctrines:
Doctrine of purposive construction -Applicability of.
E
International conventions, covenants and resolutions:
Applicability of for the purpose of interpreting domestic
statute, would depend upon the acceptability of the conventions in question - Where protection of human rights, enviF
ronment, ecology etc. involved courts should not be loathe to
refer to International Conventions.
Marginal Notes: Where the statute is clear, marginal note
may not have any role to play
G
Words & Phrases:
'"'
'Work', 'public', 'compensation', 'royalty' - Meaning of in
the context of Copyright Act, 1957.
165
H
166
SUPREME COURT REPORTS
(2008] 9 S.C.R.
A
First respondent is one of the leading music companies engaged in the production and/or acquisition of
rights in sound recordings. It has copyright over a series
of cassettes and CDs commonly known as T-series, containing cinematographic films and sound recordings.
B Appellant broadcasts under the brand name "Radio
Mirchi". It is a leading FM radio broadcaster. Disputes and
differences arose between the holding company of the
first respondent and Phonographic Performance Ltd.
(PPL) as regards the playing of the songs of which copyC rights belongs to the first respondent in their FM radio
network.
A suit was filed before the Delhi High Court for restraining the appellant from playing and broadcasting the
music belonging to the first respondent on any of the
D Radio Stations belonging to the appellant.
Various Radio Stations including the appellant filed
an application before the Copyright Board at Hyderabad
in terms of Section 31 (1 )(b) of the Act for grant of compulsory license to all the radio stations. The Copyright Board
E by a judgment and order dated 19.11.2002 fixed the standard rate of:
Payment to be made at Rs.1200/needle hour during
prime time.
F
For 12 normal hours = 60% of standard rate
For 8 lean (night) hours = 25% of standard rate and
respondents also directed to furnish a security/bank guarantee of Rs.20,00,000/- per radio station to PPL.
G
The Board also held that the same shall be operative for a period of 2 years and the matter shall be reconsidered again in September-October, 2004. Super Cassettes was not a party therein. The Board fixed royalties
initially for a period of two years. An appeal thereagainst
H was preferred before Bombay High Court and it is the
ENTERTAINMENT NETWORK v. SUPER CASSETTE 167
INDUSTRIES
subject matter of C.A. No. 5181 of 2005.
Appeals were filed before the Bombay High Court
by the radio companies and PPL against the order dated
19.11.2002.
A
13 Appeals in total were filed before the Bombay High B
Court. The Bombay High Court by a common judgment
and order dated 13.4.2004 in First Appeal Nos. 279-294 of
2003, 421 of 2003 and 1573 of 2003 remitted the matters
back to the Copyright Board for reconsideration and for
fixation of license fees.
c
Appellant filed an application before the Copyright
Board at Delhi, for grant of compulsory licence in terms
of Section 31(1)(b) of the Act against Super Cassettes. The
Application was allowed granting a compulsory licence.
Appellant filed an appeal against the said order before D
the Bombay High Court questioning the rates of compensation only. The said appeal was tagged with various
other appeals which had been filed 'b~fore the Bombay
High Court against the said order passed by the Copyright Board at Hyderabad.
E
Respondents however preferred two-fold appeals
before the Del

## Text

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[2008] 9 S.C.R. 165
M/S ENTERTAINMENT NETWORK (INDIA) LTD.
A
\/.
M/S SUPER CASSETTE INDUSTRIES LTD.
(Civil Appeal No. 5114 of 2005)
MAY 16, 2008
B
[S.B. SINHA AND LOKESHWAR SINGH PANTA, JJ.]
)c
~
Copyright Act, 1957:
S.31 - Interpretation of - S.31(2) refers to case falling
under clause (a) of sub-section (1) of Section 31 and not clause c
(b) thereof- In terms of s.31, Principles of Natural Justice are
required to be complied with - The manner in which the Copyright Board dealt with the matter not approved - Order of the
Board set aside and matter remitted to the Board for consideration of the matter afresh on merit - Administrative Law -
D
Principles of Natural Justice - Constitution of India - Arlie/es
14, 19(1)(g).
Doctrines:
Doctrine of purposive construction -Applicability of.
E
International conventions, covenants and resolutions:
Applicability of for the purpose of interpreting domestic
statute, would depend upon the acceptability of the conventions in question - Where protection of human rights, enviF
ronment, ecology etc. involved courts should not be loathe to
refer to International Conventions.
Marginal Notes: Where the statute is clear, marginal note
may not have any role to play
G
Words & Phrases:
'"'
'Work', 'public', 'compensation', 'royalty' - Meaning of in
the context of Copyright Act, 1957.
165
H
166
SUPREME COURT REPORTS
(2008] 9 S.C.R.
A
First respondent is one of the leading music companies engaged in the production and/or acquisition of
rights in sound recordings. It has copyright over a series
of cassettes and CDs commonly known as T-series, containing cinematographic films and sound recordings.
B Appellant broadcasts under the brand name "Radio
Mirchi". It is a leading FM radio broadcaster. Disputes and
differences arose between the holding company of the
first respondent and Phonographic Performance Ltd.
(PPL) as regards the playing of the songs of which copyC rights belongs to the first respondent in their FM radio
network.
A suit was filed before the Delhi High Court for restraining the appellant from playing and broadcasting the
music belonging to the first respondent on any of the
D Radio Stations belonging to the appellant.
Various Radio Stations including the appellant filed
an application before the Copyright Board at Hyderabad
in terms of Section 31 (1 )(b) of the Act for grant of compulsory license to all the radio stations. The Copyright Board
E by a judgment and order dated 19.11.2002 fixed the standard rate of:
Payment to be made at Rs.1200/needle hour during
prime time.
F
For 12 normal hours = 60% of standard rate
For 8 lean (night) hours = 25% of standard rate and
respondents also directed to furnish a security/bank guarantee of Rs.20,00,000/- per radio station to PPL.
G
The Board also held that the same shall be operative for a period of 2 years and the matter shall be reconsidered again in September-October, 2004. Super Cassettes was not a party therein. The Board fixed royalties
initially for a period of two years. An appeal thereagainst
H was preferred before Bombay High Court and it is the
ENTERTAINMENT NETWORK v. SUPER CASSETTE 167
INDUSTRIES
subject matter of C.A. No. 5181 of 2005.
Appeals were filed before the Bombay High Court
by the radio companies and PPL against the order dated
19.11.2002.
A
13 Appeals in total were filed before the Bombay High B
Court. The Bombay High Court by a common judgment
and order dated 13.4.2004 in First Appeal Nos. 279-294 of
2003, 421 of 2003 and 1573 of 2003 remitted the matters
back to the Copyright Board for reconsideration and for
fixation of license fees.
c
Appellant filed an application before the Copyright
Board at Delhi, for grant of compulsory licence in terms
of Section 31(1)(b) of the Act against Super Cassettes. The
Application was allowed granting a compulsory licence.
Appellant filed an appeal against the said order before D
the Bombay High Court questioning the rates of compensation only. The said appeal was tagged with various
other appeals which had been filed 'b~fore the Bombay
High Court against the said order passed by the Copyright Board at Hyderabad.
E
Respondents however preferred two-fold appeals
before the Delhi High Court. By reason of the impugned
judgment. dated 30.6.2004, the respondent's appeal has
been allowed remitting the matter back to the Copyright
Board to reconsider the application of the appellant for F
grant of compulsory license under Section 31 of the Act
after giving adequate opportunity to the parties to adduce
evidence and to dispose of the same by a rea$oried order. The High Court furthermore directed that the appellant must file an undertaking that it would not broadcast G
the sound recordings of the respondent. Appellant had
filed Petition for Special Leave to Appeal giving rise to
Civil Appeal No. 5114 of 2005 in this Court.
Thus there are two judgments before this Court, one H
168
SUPREME COURT REPORTS
[2008) 9 S.C.R.
A from the Bombay High Court and another from the Delhi
High Court. Whereas the Bombay High Court opined that
in terms of Section 31 .of the Act, grant of compulsory license on reasonable remuneration is permissible; the
B
Delhi High Court held otherwise.
The core questions which, arose for consideration
were:
. (i)
Whether the Copyright Board has jurisdiction
under Section 31(1)(b) of the Copyright Act, 1957
c
to direct the owner of a copyright in any Indian
work Or a registered copyright society to issue
compulsory licences to broadcast such as
works, where such work is available to the
public through radio broadcast?
· D
(ii)
Whether in any event such a compulsory
E
F
license can be issued to more than one
complainant in the light of Section 31 (2)?
(iii) What would be the relevant considerations
which the Copyright Board must keep in view
while deciding on;
(a)
Whether to issue a compulsory license to
a particular person; and
(b)
The terms on which the compulsory license
may be issued, including the compensation?
Allowing the appeals, the Court
HELD: 1.1 Applicability of the International Conventions and c'ovenants, as also the resolutions, etc. for the
G purpose of interpreting domestic statute will depend
upon the acceptability of the Conventions in question. If
the country is a signatory thereto subject of course to
the provisions of the domestic law, the lr.ternational Covenants can be utilized. Where International Conventions
H are framed upon undertaking a great deal of exercise
/
ENTERTAINMENT NETWORK v. SUPER CASSETTE 169
INDUSTRIES
upon giving an opportunity of hearing to both the parties A
and filtered at several levels as also upon taking into consideration the different societal conditions in different
countries by laying down the minimum norm, as for example, the ILO Conventions, the court would freely avail
the benefits thereof. [Para 19] [218-G,H, 219-A]
B
1.2 Those Conventions to which India may not be a
~
signatory but have been followed by way of enactment
of new Parliamentary statute or amendment to the existing enactment, recourse to International Convention is
permissible. [Para 19] [[219-B]]
c
1.3 As regards the question where the protection of
human rights, environment, ecology and other secondgeneration or third~generation rights is involved, the
courts should not be loathe to refer to the International D
Conventions. [Para 19] [219-E]
Gramophone Company of India Ltd. v. D.B. Pandey
(1984) 2 SCC 534; Kesavananda Bharati v. State of Kera/a
(1973) 4 SCC 225; Jagdish Saran and Ors. V. Union of India
(1980) 2 SCC 768; -Indian Handicrafts Emporium and Ors. V.
E
Union of India (2003) 7 SCC 589; Motor General Traders and
Anr. v. State of Andhra Pradesh and Ors. (1984) 1 SCC 222;
Rattan Arya and Ors. v. State of Tamil Nadu and Anr. (1986) 3
SCC 385; Synthetics and Chemicals Ltd. and Ors. v. State of
UP and Ors. (1990) 1 SCC 109; Liverpool and London S.P
F
;
and I Asson. Ltd. V. M. V Sea Success I and Anr. (2004) 9
sec 512; M. v Elisabeth (1993) Supp. (2) sec 433; The
State of West Bengal v. Kesoram Industries Ltd. And Ors.
(2004) 10 SCC 201; Pratap Singh v. State of Jharkhand and
Anr. (2005) 3 SCC 551; Centrotrade Minerals and Metal Inc.
G
v. Hindustan Copper Limited (2006) 11 SCC 245; State of
•
Punjab and Ors. v. Amritsar Beverages Ltd. and Ors. 2006 (7)
..,J
SCALE 587; State of Punjab and Anr. v. Devans Modern
Brewan·es Ltd. and Anr. (2004) 11 SCC 26; Anuj Garg and
Ors. v. Hotel Association of India and Ors. (2008) 3 SCC 1;
H
170
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A PUCL v. Union of India (1997) 3 SCC 433; John Vallamattom
v. Union of India (2003) 6 SCC 611; Madhu Kishwarv. State of
Bihar (1996) 5 SCC 125; Kubic Darusz v. Union of India (1990)
1 sec 568; Chameti Singh v. State of UP (1996) 2 sec 549;
C. Masi/amani Mudaliar v. Idol of Sri Swaminathaswami
B Thirukoil (1996) 8 SCC 525; Apparel Export Promotion Councit v. A.K. Chopra (1999) 1 SCC 759; Kapila Hingorani Vs.
-
State of Bihar (2003) 6 SCC 1; State of Punjab & Anr. Vs. Mis.
Devans Modem Breweries & Anr. 2003 (10) SCALE 202 and
Liverpool & London S.P & I Asson. Ltd. Vs. M. V Sea Suec cess I 2003 (10) SCALE 1 - referred to
The Berne Convention, Articles 11, 11 bis; Rome Convention, Articles 3(f), 12; Copinger and Skone James on
Copyright, 151h Ed.2005, para 2-5, page 27, Vol.1 and Black's
Law Dictionary, Seventh Edition - referred to.
D
2.1 The Copyright Act seeks to maintain a balance
between the interest of the owner of the copyright in protectinf-his works on the one hand and the interest of the
public to have access to the works, on the other. The exE tent to which the owner is entitled to protection in regard
to his work for which he has obtained copyright and the
interest of the public is a matter which would depend upon
the statutory provisions. [Para 21] [221-B,C]
2.2 Whereas the Act provides for exclusive rights in
F favour of owners of the copyright, there are provisions ,
where it has been recognized that public has also substantial interest in the availability of the works. The provisions relating to grant of compulsory license must be
viewed having regard to the aforementioned competing
G rights wherefor an appropriate balance has to be stuck.
[Para 21] [221-C,D]
2.3 The freedom to contract is the foundation of economic activity and an essential aspect of several Constitutional rights including the freedom to carry on trade or
H business guaranteed under Article 19(1)(g) and the right
ENTERTAINMENT NETWORK v. SUPER CASSETTE 171
INDUSTRIES
to property under Article 300A of the Constitution of InA
dia. But the said right is not absolute. It is subject to reasonable restrictions. [Para 21] [221-G,H, 222-A]
2.4 Section 30 enables the owner of the copyright to
grant any interest in the copyright by a license in writing B
signed by him or by his duly authorized agent. The un-
~
derlying philosophy of the Copyright Act is that the owner
of the copyright is free to enter into voluntary agreement
or licenses on terms mutually acceptable to him and the
licensee. The Act confers on the copyright owner the exelusive right to do the various acts enumerated in Sec- c
tion 14. An infringement of copyright occurs if one of
those acts is done without the owner's license. A license
passes no interest, but merely makes lawful that which
would otherwise be unlawful. The Act also expressly recognizes the notion of an "exclusive license" which is D
defined in Section 2(j). But, that does not mean, as would
be noticed from the discussions made hereinafter, that it
would apply in all situations irrespective of the nature of
right as also the rights of others. It means a licence which
confers on the licensee, to the exclusion of all other perE
sons (including the owner of the copyright) any right comprised in the copyright in a work. An exclusive licensee
has specific rights under the Act such as the right to have
recourse to civil remedies under Section 55 of the Act.
This Scheme shows that a copyright owner has complete F
freedom to enjoy the fruits of his labour by earning an
agreed fee or royalty through the issuance of licenses.
Hence, the owner of a copyright has full freedom to enjoy
the fruits of his work by earning an agreed fee or royalty
through the issue of licenses. But, this right is not absoG
lute. It is subject to right of others to obtain compulsory
licence as also the terms on which such licence can be
..;
granted. [Para 21] [222-A-G]
3.1 The meaning of a word must be attributed to the
context in which it is used. For giving a contextual meanH
172
SUPREME COURT REPORTS
(2008] 9 S.C.R.
A ing, the text of the statute must be kept in mind. An act of
refusal depends upon the fact of each case. Only because
an offer is made for negotiation or an offer is made for
grant of license, the same per se may not be sufficient to
arrive at a conclusion that the owner of the copyright has
s not withheld its work from public. When an offer is made
on an unreasonable term or a stand is taken which is otherwise arbitrary, it may amount to a refusal on the part of
the owner of a copyright. When the owner of a copyright
or the copyright society exercises monopoly in it, then
c the bargaining power of an owner of a copyright and the
proposed licensee may not be same. When an offer is
made by an owner of a copyright for grant of license, the
same may not have anything to do with any term or condition which is wholly alien or foreign therefor. An unreaD sonable demand if acceded to, becomes an unconstitutional contract which for all intent and purport may amount
to refusal to allow communication to the public work recorded in sound recording. A de jure offer may not be a de
facto offer. [Para 24] [226-E-H, 227-A]
E
3.2 Although the term 'work' has been used both in
clauses (a) and (b) of sub-Section (1) of Section 31, the
same has been used for different purpose. The said term
'work' has been defined in Section 2(y) in different contexts. It enumerates the works which are: (a) a literary,
F dramatic, musical or artistic work; (b) a cinematograph
film; (iii) a sound recording. Thus, a literary work ex facie
may not have anything to do with sound recording. [Para
24] [227-B,C]
3.3 There are indications in the Act particularly havG ing regard to Sections 14(1)(a) and 14(1)(e) thereof that
they are meant to operate in different fields. They in fact
do not appear to be operating in the same field. Clause
(a) refers to publication or republication of the work. It may
be in print media or other medias. Clause (b), however,
H refers to broadcast alone. Sound recording is a part of it.
ENTERTAINMENT NETWORK v. SUPER CASSETTE 173
INDUSTRIES
Sub-clauses (i) to (vii) of sub-clauses (a) of sub-Section A
(1) of Section 14 and sub-clauses (i) to (iii) of sub-clause
(e) conferred different meanings of the word copyright.
Whereas clause (a) refers to work in general, clause (b)
refers to work recorded in such sound recording, which
in turn means the recording of sounds from which such
B
sounds may be reproduced regardless of the medium on
which such recording is made or the method by which
the sounds are produced. Clause (b) ex facie does not fit
in the scheme of clause (a). [Para 24] [227-C,D,E,F]
3.4 Interpretation of clause must be given effect to c
having regard to the limitations contained therein, namely,
unless context otherwise requires. [Para 24] [227-F]
3.5 Communication to the public is possible by way
•
of diffusion. Explanation appended to Section 2(ff) clearly D
shows the extensive meaning of the said term. Publication and republication of a work in general may be different from communication of a work recording in sound
recording. The use of words 'such work' also assumes
significance. The said words must be understood havE
ing regard to the fact that sound recording is also a work.
If it is accepted that voluntary licenses have been entered
into by the owners with All India Radio and some other
Radio Broadcasters, then it is sufficient for closing the
doors on another person to approach the Copyright Board.
One may as well say that if it is provided to a satellite chanF
nel or a space radio, the same also would subserve the
purpose for refusing to grant an application under Section 31 of the Act. [Para 24] [227-G,H, 228-A,B]
'
3.6 The word 'work' in the context of broadcast must
•
G
be understood having regard to the fact that there are 150
_,
F.M. licenses out of which about 93 are working. There
are 300 broadcasters working in almost all the big cities
in India. The word 'public' must be read to mean public of
all parts of India and not only a particular part thereof. If H
174
SUPREME COURT REPORTS
(2008] 9 S.C.R.
A any other meaning is assigned, the terms 'on terms which
the complaints considers reasonable' would lose all significance. The very fact that refusal to allow communication on terms which the complainant considers reasonable have been used by the Parliament indicate that unB reasonable terms would amount to refusal. It is in that
sense the expression 'has refused' cannot be given a
meaning of outright rejection or denial by the copyright
owner. [Para 24] [228-C,D,E]
c
3.7 PPL and SCIL might have been called upon the
broadcasters to enter into licenses and were willing to
license their repertoire. But their contention was that if
such terms are unreasonable, it amounted to refusal
which would attract Section 31 of the Act. The word 'communicate the work to the public by broadcast" is of sigD nificance. It provides for a mode of communication. Thus,
only because a Registrar of a Copyright would be directed
to grant a licence to communicate the work to the public
by broadcast would not mean that only a single licence
shall be granted. The Board acting as a statutory authorE ity can exercise its power from time to time. It is therefore
not correct to contend that having regard to the provisions of sub-section (2) of Section 31, compulsory licence
can be granted only to one and not to more than one
broadcaster. [Para 24] [228-F-H, 229-A]
F
t
3.8 Section 31 (1 )(b) in fact does not create an entitlement in favour of an individual broadcaster. The right is
to approach the Board when it considers that the terms
of offer for grant of license are unreasonable. It, no doubt,
provides for a mechanism but the mechanism is for the
I
G purpose of determination of his right. When a claim is
:ti
made in terms of the provisions of a statute, the same
has to be determined. All cases may not involve narrow
'"'
commercial interest. For the purpose of interpretation of
a statute, the court must take into consideration all situaH tions including the interest of the person who intends to
ENTERTAINMENT NETWORK v. SUPER CASSETTE 175
INDUSTRIES
have a licence for replay of the. sound recording in reA
spect whereof another person has a copyright. It, however, would not mean that all and sundry can file applications. [Para 24] [229-C,D,E]
3.9 Admittedly in terms of Section 31 of the CopyB
right Act the principles of natural justice are required to
..
be complied with and an enquiry has to be held. The extent of such enquiry will depend upon the facts and circumstances of the case. A finding has to be arrived at that
the grounds of refusal by an owner of a copyright holder
is not reasonable. Only upon arriving at the said finding, c
the Registrar of copyright would be directed to grant a
license for the said purpose. The amount of compensation payable to the owner of the copyright must also be
determined. The Board would also be entitled to deterIi
mine such other terms and conditions as the Board may D
think fit and proper. Registration is granted only on payment of such fees and subject to compliance of the other
directions. [Para 24] [229-G,H, 230-A,B]
4.1 An owner of a copyright indisputably has a right E
akin to the right of property. It is also a human right. Now,
human rights have started gaining a multifaceted approach.
Property rights vis-ii-vis individuals are also incorporated
within the 'multiversity' of human rights. As, for example,
any claim of adverse possession has to be read in consonance with human rights. [Para 25] [230-C,D]
F
4.2 The right of property is no longer a fundamental
right. It will be subject to reasonable restrictions. In terms
of Article 300A of the Constitution, it may be subject to
the conditions laid down therein, namely, it may be wholly G
or in part acquired in public interest and on payment of
reasonable compensation. [Para 25] [231-B,C]
P.T. Munichikkanna Reddy and Ors. v. Revamma and Ors.
(2007) 6 sec 59 - referred to.
H
176
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A
Peter Smith v. Kvaerner Cementation Fo11ndations Ltd.
(2006) EWCA Civ 242; Beaulane properties Ltd. v. Palmer
2005 EWHC 817(Ch.) and J. A. Pye (Oxford) Ltd. v. Graham
(2002) 3 ALL ER 865 - referred to.
5.1 The right to property, therefore, is not dealt with its
8 subject to restrict when a right to property creates a monopoly to which public must have access. withholding the
same from public may amount to unfair trade practice. In
our constitutional Scheme of statute monopoly is not encouraged. Knowledge must be allowed to be disseminated.
C An artistic work if made public should be made available
subject of course to reasonable terms and grant of reasonable compensation to the public at large. [Para 26] [231-E,F]
5.2 The legislature for all intent and purport equates
0
'compensation' with 'royalty'. In the context of the Act,
royalty is a genus and compensation is a species. Where
a licence has to be granted, it has to be for a period. A
'compensation' may be paid by way of annuity. A 'compensation' may be held to be payable on a periodical basis, as apart from the compensation, other terms and conE ditions can also be imposed. The compensation must be
directed to be paid with certain other terms and conditions which may be imposed. [Para 27] [232-D,E,F]
Gherulal Parakh v. Mahadeodas Maiya and Ors. 1959
F Supp (2) SCR 406 and Oevinder Singh and Ors. Vs. State of
Punjab and Ors. AIR 2008 SC 261 - referred to.
"World Copyright Law" (2"d Edn) by J.A.L. Sterling - referred to.
G
6. It is also well settled that where the statute is clear,
marginal note may not have any role to play. [Para 26]
[232-G,H]
K.P Varghese v. Income-Tax Officer, Ernakulam (1981)
4 SCC 173 and Bhinka & Ors. V. Charan Singh 1959 Supp.
H (2) SCR 798 - referred to.
•
ENTERTAINMENT NETWORK v. SUPER CASSETTE 177
INDUSTRIES
7 .1 The intention of the Parliament, it is trite, must be A
ascertained from the plain reading of the Section. The intention is to treat works, which have been "withheld from
the public" differently from the "right to broadcast". The right
to broadcast is a ephemeral right. lt"requires special treatment as it confers upon every person, who wishes to broad8
casta work or the work recorded in a sound recording, the
right to do so is either by entering into a voluntary agreement to obtain a licence on such terms which appear to be
reasonable to him or when the term appears to be unreasona.ble to approach the Board. [Para 27] [233-~,B,C]
c
7.2 One wishes the statute would have been clear
and explicit. But only because it is not, the courts cannot
fold its hands and express its helplessness. When such
a complaint is made, it confers the jurisdiction "l pon the
Board. It may ultimately allow or reject the complaint but D
it cannot be said that the complaint itself is not maintainable. [Para 27] [233-C,D]
8.1 Interpretation of Section 31 (2) is attracted in a case
where there are more than one applicants. The question E
of considering the respective claim of the parties would
arise if they tread the same ground. The same, however,
would not,mean that only one person is entitled to have a
licence for all time to come or for an indefinite term even
in perpetuity. A licence may be granted for a limited period; if that be so another person can make such an apF
plication. Sub-section (2) of Section 31 would lead to an
anomalous position if it is read literally. It would defeat
the purport and object of the Act. It has, therefore, to be
read down. Purposive construction therefor may be resorted to. [Para 28] [233-E,F,G]
G
,_,
8.2 The provisions of the Act and the Rules in this
i
case, are, thus required to be construed in the light of the
action of the State as envisaged under Article 14 of the
Constitution of India. With a view to give effect thereto, H
178
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A the doctrine of purposive construction may have to be
taken recourse to. [Para 28) [235-B,C)
8.3 The Court while interpreting a statute will put itself in the armchair of the reasonable legislature, all statutes must be presumed to be reasonable. It is now a trite
8
law that literal interpretation should be avoided when it
leads to absurdity. If it is to be held that once the compulsory licence is granted in respect of a sound recording,
the Board loses its jurisdiction for all time to come, it will
lead to an absurdity. The statute does not contemplate
C such a position. The statute on the one hand not only in
terms of General Clauses Act but also having regard to
the individual complaints which a person may have as
regards the unreasonableness of the terms impose upon
him by the owner of the copyright must be held to be enD titled to approach the Board as and when any cause of
action arises therefor. It therefore must be held that subsection (2) of Section 31 is relatively directed to clause
(a) and not clause (b). [Para 28) [235-C,D,E,F]
8.4 In this case, however, the meaning of the Statute
E is neither clear nor sensible. It is a statute where a purposive construction is warranted. It is a case where subsection (2) should be kept confined to clause (a) for that
purpose. The statute has to be read down. It is not a case
of improper interpolation so as to take away a primary
F purpose of the legislative intent. It is expedient to give
effect to the intent of the statute. This itself says that
creases can be ironed out. While undertaking the said
exercise, the court's endeavour would be to give a meaning to the provisions and not render it otiose. Therefore,
G this Court is of the opinion that Section 31 (2) refers to
case falling under clause (a) of Sub-section (1) of Section
31 and not clause (b) thereof. [Para 28) [236-F,G, 237-A]
H
Oriental Insurance Co. Ltd. v. Brij Mohan and Ors (2007)
7 sec 56 - relied on.
..
I
i
,.,
ENTERTAINMENT NETWORK v. SUPER CASSETTE 179
INDUSTRIES
New India Assurance Company Ltd. v. Nusli Neville
Wadia and Anr. 2007 (14) SCALE 556, (2008) 3 SCC 279;
Bharat Petroleum Corporation Ltd. V. Maddula Ratnavalli and
Ors. (2007) 6 SCC 81 and Indian Administrative Services
(SCS) Association, UP & Ors. V. Uniqn of India & Ors. 1993
Supp. (1) SCC 730 - referred to.
Aharon Barak, "Purposive Interpretation in Law" (2007)
pg. 87 - referred to.
9. The Tribunal exercises a limited jurisdiction in India. Different cases are required to be considered on its
own merits. What would be reasonable for one may not
be held to be reasonable for the other. The principles can
be determined in a given situation. The Bombay High
Court has remitted the matter back to the Board for the
said purpose. The Bombay High Court's views are endorsed. [Para 29] [237-B,C]
10.1 The question before the Board was as to
whether there was an abuse in the sense that unreasonable amount was being claimed by way of royalty. As it
was a case of abuse, the Board had the jurisdiction to
entertain any application for grant of compulsory licence.
How far and to what extent appellant has infringed the
right of the respondent is a matter which may be taken
into consideration by the Board. A suit was filed and injunction was granted. Apart from the fact that the appellant offered to take a license held negotiations with the
respondents in the suit as soon as it came to know that
Super Cassettes is not a member of PPL, it gave an undertaking. Each case must be considered on its own facts.
[Paras 30, 31] [238-B,C,D,E]
10.2 This Court doe::; not approve the manner in
which the Board has dealt with the matter. It has refused
to examine the witnesses. It took up the matter on a day
for hearing which was fixE:d for production of witnesses.
A
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[2008] 9 S.C.R.
A Therefore, the order of the Board should be set aside and
the matter be remitted to the Board again for the consideration of the matter afresh on merit. [Para 31] [238-E,F]
B
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 5114
of 2005
From the Judgment and final Order dated 30.6.2004 of
the High Court of Delhi at New Delhi in R.F.A. No. 848/2003
WITH
c
C.A. Nos. 5178-5180, 5181, 5182 and 5183 of 2005.
Dr. Abhishek Manu Singhvi, Harish N. Salve, Shyam Divan, Sudhir Chandra, Pratibha Singh, Maninder Singh, Surbhi
Mehta, Gaurav Sharma, Sumeet Bhatia, Abhinav Sanghi,
Kamaldeep Dyal, Krishnendu Datta, Ashish Verma. Thomas
D Kurwika, Ayaz Bilawala, Gaurav Goel, E.C. Agrawala, Amit
Sharma, Ashutosh Garg, Amit Sibbal, Sameer Parekh,
Ranjeeta Rohatgi, Diksha Rai, Rahul, Ajatshatru, Haryjot S.
Bhalia (for M/s. Parekh & Co.) Praveen Kumar, Sagar Chandra,
Hari Shankar K., Vikas Singh, Joseph Pookkatt, Prashant
E Kumar and Vaibhav Srivastava for the Appearing Parties.
F
G
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The Judgment of the Court was delivered by
S.B. SINHA, J. 1. Leave granted.
INTRODUCTION
2. Interpretation of Section 31 of the Copyright Act, 1957
(for the sake of brevity, hereinafter referred to as, 'the Act') is
involved in these appeals.
3. We may notice the factual matrix of the matter.
BACKGROUND FACTS
4. First responder:it is one of the leading music companies engaged in the production and/or acquisition of rights in
sound recordings. It has copyright over a series of cassettes
..,;
ENTERTAINMENT NETWORK v. SUPER CASSETTE 181
INDUSTRIES [S.B. SINHA, J.]
and CDs commonly known as T-series. It has copyrights in cinematographic films and sound recordings. Appellant Mis. Entertainment Network (India) Ltd. (ENIL) broadcasts under the
brand name "Radio Mirchi". It is a leading FM radio broadcaster.
Disputes and differences arose between Bennett Coleman &
Co. Ltd., the holding company of the first respondent and Phonographic Performance Ltd. (PPL) as regards the playing of
the songs of which copyrights belongs to the first respondent in
their FM radio network. Appellant is a company which holds
licence for running FM radio stations in various cities across
India.
Free-to-Air private FM Radio Broadcasting is a recent
phenomenon in India and the basic content of any radio station,
presently, is only sound recordings, i.e., songs.
Disputes and differences having arisen between the parties in regard to broadcast of the songs in respect whereof the
first respondent holds a copyright as owner thereof or by reason of purchase of the copyright belonging to others.
5. BACKGROUND FACTS
The radio industry was revolutionized by the Government
of India as_in October 1999 for its first phase of granting license
for private FM, broadcasting channel, tenders were invited.
Appellant herein was awarded the license for running a
private FM broadcasting service in 12 cities on payment of a
hefty license fee. Several other bidders were also granted Iicenses. Respondent, however, was not a member of the appellant - society. It was found to have been using the broadcasting songs in respect whereof Super Cassettes Industry Limited (SCIL) had an ownership over the copyright. It was a member of the copyright society being Phonographic Performance
Ltd. (PPL). Indisputably, there had been an infringement of the
copyright Qf Super Cassettes. Allegedly, appellant was under
the belief that it was a part of PPL and whereupon the music
belonging to the repertoire of SCIL was played during the peA
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SUPREME COURT REPORTS
[2008] 9 S.C.R.
A
riod from October 2001 to May, 2002 in its stations at Indore
and Ahmedabad. Royalty was paid by ENIL to PPL at the rate
of Rs.400/- per needle hour pursuant to the order passed by
the Calcutta High Court dated 28.9.2001. Attempts were made
to obtain a licence from SCIL when ENIL came to know that it
B
was not a part of the copyright society PPL. Negotiations failed
between the parties.
c
A suit was filed before the Delhi High Court for restraining
ENIL from playing and broadcasting the music belonging to SCIL
on any of the Radio Stations belonging to ENIL.
6. COMMUNICATIONS BETWEEN THE PARTIES
We may notice relevant parts of some communications
between the parties. Super Cassettes through its lawyer by a
notice dated 21.1.2002, in view of the said infringement of his
D copyright called upon ENIL, inter alia, to give an undertaking
that it shall not broadcast the sound records of Super Cassettes
through its Radio Station without a valid licence and payment of
royalty (the terms of which were mutually arrived at). Super Cassettes again by a notice dated 2.4.2002 through its Advocate
E
called upon ENIL to: "a) immediately desist from broadcasting
Sound Recording(s) of Super Cassettes clients through its Radio Station; b) Tender an unconditional apology for the illegal
broadcast of Sound Recordings of Super Cassettes clients in
past; c) give an undertaking that it shall not broadcast the Sound
F
Recordings of Super Cassettes clients through its Radio Station without a valid licence and payment of royalty (the terms of
which can be mutually arrived at), and d) pay a sum of Rs.
50,00,000.00 (Fifty lacs only) as liquidated damages, for the
illegal broadcast and acts of infringements committed by it, to
G Super Cassettes within 15 days of receipt hereof under intimation to Super Cassettes failing which Super Cassettes have
positive instruction of its clients to initiate such legal actions
8oth Civil and/or Criminal against you, your directors, and all
other persons responsible for the said infringement without any
further notice and in that case you shall be further liable for all
H
ENTERTAINMENT NETWORK v. SUPER CASSETTE 183
INDUSTRIES [S.B. SINHA, J.]
cost and consequences thereof which may please be noted A
very carefully".
In response to the said notice, ENIL stated:
"2. Since our clients intend to negotiate with your clients,
as was our clients intention from the beginning we have B
approached your clients and have offered payment of
royalty, the price of which will be mutually convenient to
both the parties.
3. It is our clients' contention that music is for general
benefit of society at large. Our clients understand that your C
clients have entered into a contract/Agreement with Media
Broadcast Indian Ltd., broadcasting under the channel
"Radio City", and our clients are also likewise prepared .to
popularise your client's music and add value to your clients'
content by entering into Agreement/License with your D
clients.
4. As we have already stated in the aforesaid para music
is for general enjoyment and a restrictive practice of a tie
up only with Media Broadcast India Ltd. is not in public
interest. We, therefore, do not admit any of the allegations E
made by your clients in your aforesaid letter and further
suggest that your clients resolve the issue by entering into
a contract beneficial to both parties."
Super Cassettes, however, by another legal notice dated
F
1.6.2002 stated:
"My client has clearly indicated its willingness to grant
your client a public performance license. However, without
obtaining such license, your client continues to broadcast
songs of our clients.
G
In the circumstances, your client is once again called upon
to:
•' ~~
(a)
First immediately cease and desist from such r: · ~
unauthorized broadcast before a formal license>·~H
.,
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SUPREME COURT REPORTS
[2008] 9 S.C.R.
agreement is drawn up.
(b)
Pay my client a sum of Rs.1,00,00,000/- (Rupees
one crore) for past infringement by way of radio
broadcast of my client's sound recordings through
your client's various FM Radio Stations situated in
various cities."
PPL again to the Holding Company of ENIL, BCCL by a
letter dated 6.9.2000 stated:
"As you may be aware, it is a legal requirement to obtain
permission (Licence) from the copy-right owners before
you can broadcast the copyrighted music (Sound
Recordings). As you may further be aware, Phonographic
Performance Ltd. (PPL), is the copyright society in respect
of sound recordings and is registered with Government of
India. We have about 50 member companies including
HMV, Universal, Tips, Venus, Sony Music (India), Virgin,
Milestone, Magnasound, BMG - Crescendo and others.
The broadcasting rights in the music recordings - both of
Indian and International music - or our members are
administered by us.
It will be essential for your to apply for our licence for
broadcasting of our members' existing and future sound
recordings, subject to our tariff and terms and conditions
as applicable.
We shall appreciate if you kindly confirm to us the centres
where you will be setting up your F.M. Broadcasting
stations/transmitters, and the estimated date/month from
which the said stations/transmitters will start operations.
G
On receipt of this information, we shall send you the licence
application form and the tariff details."
H
It, however, appears that several broadcasters including
ENIL by a letter dated 17.4.2001 addressed to PPL stated as
under:
ENTERTAINMENT NETWORK v. SUPER CASSETTE 185
INDUSTRIES [S.B. SINHA, J.]
"We acknowledge that you are constituted as the body A
legally empowered to represent the interests of the owners
of music copyrights around the world when performances
take place in India. We are, therefore, approaching you to
discuss arrangements for the provisions of licensing the
broadcast of copyrighted music on our new stations.
8
>
We want to begin discussions immediately, since at least
some of our stations are all but ready to begin broadcasts
now.
We can begin with the agreement that owners of copyrights c
deserve to be compensated for the use of their music on
radio stations. Radio stations play copyrighted music
because of its popularity because the music helps build
the audience that the stations can offer to advertisers with
eventual hope of making an opening profit. We assume D
that copyright owners desire exposure to their music that
is as broad as possible.
The expectations for the future of private radio
broadcasting in India are high, and we have the ambition
to develop private radio to a level of popularity not unlike E
what achieves in most other developed countries in the
world. Whereas radio currently attracts the average Indian
for less than half an hour a day, daily radio listenership in
most countries averages something over three hours a
day. Uniquely among the media, radio has the ability to
F
provide as entertainment and information services to
listerners who do not have to stop everything else they
may be doing to take full advantage of the programming.
We feel that while radio has been a dismal failure at
attracting listenership thus far in this country, we can, with G
your expectation, build radio listening to the point that
music will begin to play a much larger role in the lives of
the Indian public than is the case today.
We hope that we can meet at your ea_rliest convenience
to begin to discuss a contractual business arrangement,
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SUPREME COURT REPORTS
[2008) 9 S.C.R.
which will be beneficial to both the society and to the new
radio industry in India.
We would appreciate if you can get in touch with Mr.
Prakash Iyer at 852-3880 extn. 3291 or Mobile: 982-1182869 in the next 7 days to set up a date and time for the
meeting."
Indisputably, appellant, in the suit filed by the first respondent having come to learn that it is outside PPL's jurisdiction to
give an undertaking not to use the songs copyright whereof bee longs to PPL, Super Cassettes. The said suit admittedly has
been withdrawn.