,,,
Sanjeev Narula, J",,,
I.A. 11026/2021 in C.O.(COMM.IPD-CR) 3/2021, I.A. 11349/2021 in C.O.(COMM.IPD-CR) 6/2021, I.A. 11361/2021 in C.O.",,,
(COMM.IPD-CR) 7/2021, I.A. 11364/2021 in C.O.(COMM.IPD-CR) 8/2021, I.A. 11367/2021 in C.O.(COMM.IPD-CR) 9/2021, I.A.",,,
11370/2021 in C.O.(COMM.IPD-CR) 10/2021, I.A. 11373/2021 in C.O.(COMM.IPD-CR) 11/2021, I.A. 11384/2021 in C.O.",,,
(COMM.IPD-CR) 12/2021,",,,
I.A. 11387/2021 in C.O.(COMM.IPD-CR) 13/2021; (u/S. 151 of the Code of Civil Procedure, 1908, (‘CPC’) seeking interim",,,
relief allowing the Petitioners to continue making payments at the license fee rates fixed by the IPAB vide order dated 31st December,,,
2020, pending determination of license fee rate in the present proceedings), and",,,
I.A. 11409/2021 in C.O.(COMM.IPD-CR) 14/2021 (u/S. 151 of the CPC seeking interim order for maintaining status quo in respect of,,,
the payment of royalty for broadcast of sound recordings by the Petitioner as per the rates determined by IPAB Order dated 31st,,,
December 2020 till revised statutory licence royalty rate for broadcast of sound recordings through radio are determined),,,
CONTENTS,,,
BRIEF FACTS,,,
INTERIM RELIEF SOUGHT,,,
PETITIONERS’ CONTENTIONS,,,
A. EXISTENCE OF PRIMA FACIE CASE,,,
B. BALANCE OF CONVENIENCE LIES IN FAVOUR OF PETITIONERS,,,
C. IRREPARABLE INJURY WILL BE CAUSED IF RELIEF NOT GRANTED,,,
D. LICENSE TO BE APPLICABLE TO “FUTURE WORKS†AS WELL,,,
RESPONDENTS’ CONTENTIONS,,,
A. DELIBERATE DELAY BY THE PETITIONER,,,
B. NO PRIMA FACIE CASE,,,
C. BALANCE OF CONVENIENCE - INTERIM ORDER WILL PREJUDICE THE RIGHTS AND INTERESTS OF THE RESPONDENTS,,,
D. ENIL-2021 IS PER INCURIAM AND NOT BINDING,,,
E. THE IPAB ORDER IS NOT SEVERABLE, AND THUS, IF EXTENDED, MUST BE IN ENTIRETY.",,,
ANALYSIS AND FINDINGS 32,,,
A. WHETHER DELAY BY THE PETITIONERS DISENTITLES THEM TO THE PRAYER SOUGHT?,,,
B. WHAT IS THE SCOPE OF PROCEEDINGS UNDER SECTION 31D OF THE COPYRIGHT ACT, 1957?",,,
C. WHETHER THE POSITION IN LAW REMAINS UNCHANGED AFTER THE 2012 AMENDMENT? IF SO, WHAT IS ITS EFFECT ON",,,
SECTION 31D?,,,
D. WHETHER THE COURT HAS THE POWER TO FIX INTERIM RATES UNDER SECTION 31D?,,,
E. WHETHER THE IPAB ORDERS SETS OUT THE COMPOSITE RATES FOR BOTH SOUND RECORDINGS AND UNDERLYING,,,
WORKS?,,,
F. WHETHER THE IPAB ORDER SHOULD BE EXTENDED IN ENTIRETY OR WITH ALTERATION?,,,
G. WHETHER THE DIRECTIONS GIVEN HEREINAFTER, SHALL APPLY AD INTERIM OR TILL THE STAGE OF FINAL",,,
DETERMINATION FOR THE PRESENT PROCEEDINGS?,,,
RELIEF,,,
BRIEF FACTS,,,
1. The captioned petitions have been filed by certain private radio broadcasting organizations, seeking revision of statutory license rate under Section",,,
31D of the Copyright Act, 1957 [hereinafter referred to as ‘the Act’], read with Rule 31(9) of the Copyright Rules, 2013 [hereinafter referred",,,
to as ‘the Rules’] for broadcasting sound recordings, which are owned and/or exclusively controlled by the Respondents herein, via the",,,
Petitioner’s radio stations.,,,
2. Since all the petitions seek nearly identical reliefs and narrate similar facts, for the sake of brevity and convenience, facts of C.O. (COMM. IPD-",,,
CR) 3/2021 are being noted specifically, unless otherwise specified.",,,
3. The facts leading to the present lis are as follows:,,,
3.1. All the Petitioners are radio broadcasters. [Entertainment Network India Private Limited in C.O.(COMM.IPD-CR) 3 of 2021 operates Radio,,,
Mirchi; HT Music and Entertainment Co. Ltd in C.O.(COMM.IPD-CR) 6 of 2021 operates Fever FM; Digital Radio (Mumbai) Broadcasting Limited,,,
in C.O.(COMM.IPD-CR) 7 of 2021 operates Red FM and Magic FM; South Asia FM Limited in C.O.(COMM.IPD-CR) 8 of 2021 operates Red,,,
FM; Next Radio Ltd. in C.O.(COMM.IPD-CR) 9 of 2021 operates Radio One; DB Corp Ltd. in C.O.(COMM.IPD-CR) 10 of 2021 operates My,,,
FM;; HT Media Limited in C.O.(COMM.IPD-CR) 11 of 2021 operates Fever FM & Radio Nasha; Rajasthan Patrika Private Limited in C.O.,,,
(COMM.IPD-CR) 12 of 2021 operates FM Tadka; T.V. Today in C.O.(COMM.IPD-CR) 13 of 20212021 operates Ishq FM; and Music Broadcast,,,
Limited in C.O.(COMM.IPD-CR) 14 of 2021 operates Radio City FM.] The Respondents and Impleaders can be broadly classified into: (i) music,,,
recording labels, [Saregama India Ltd., Super Cassettes Industries Pvt. Ltd., Sony Entertainment Enterprises Ltd., TIPS Industries Ltd., Zee",,,
Entertainment Enterprises Limited, Eros International Films Private Limited, and Yash Raj Films Private Limited.] and (ii) copyright societies,",,,
[Phonographic Performance Limited, Indian Performing Rights Society Limited and Recorded Music Performance Limited.] comprising of members",,,
who are music composers, lyricists, and other such creators/authors of musical and/or literary works embodied in the sound recordings.",,,
3.2. The license fee rates which are currently in force, payable by the Petitioners for exercise of their right under Section 31D, were prescribed by the",,,
erstwhile Intellectual Property Appellate Board [hereinafter referred to as ‘IPAB’] effective from 1st October 2020, vide a common order",,,
dated 31st December, 2020 [hereinafter referred to as ‘the IPAB Order’], pursuant to a petition filed by them under Section 31D of the Act.",,,
3.3. Presently, the Petitioners are making payment for utilization of sound recordings as per license rates fixed under the aforenoted IPAB Order; the",,,
same are due to expire on 30th September 2021.,,,
3.4. With the promulgation of the Tribunals Reforms (Rationalization and Conditions of Service) Ordinance, 2021, which was replaced by the Tribunal",,,
Reforms Act, 2021, the IPAB stands abolished w.e.f. 04th April, 2021 and its functions stand transferred to judicial bodies. Now the jurisdiction to",,,
revise/fix the license fee rates under Section 31D vests with the Commercial Division of this Court.,,,
3.5. In these circumstances, Petitioners seek revision/determination of the license rates payable by them to the Respondents for exercising their rights",,,
under Section 31D, w.e.f. 01st October, 2021, following the expiry of the rates set by the IPAB Order.",,,
INTERIM RELIEF SOUGHT,,,
4. In the interregnum, i.e., pending final determination of fresh/revised license rates, Petitioners seek continuation of the rate already fixed by the",,,
IPAB qua sound recordings. During the course of arguments, this interim relief is pressed as an order of status quo with respect to the license rates",,,
for sound recordings. This issue is elaborated in the succeeding paragraphs.,,,
PETITIONERS’ CONTENTIONS,,,
5. On behalf of the Petitioners, submissions were advanced by Mr. C. Aryama Sundaram, [For Entertainment Network India Private Limited in C.O.",,,
(COMM.IPD-CR) 3 of 2021; HT Music and Entertainment Co. Ltd in C.O.(COMM.IPD-CR) 6 of 2021; Digital Radio (Mumbai) Broadcasting,,,
Limited in C.O.(COMM.IPD-CR) 7 of 2021; South Asia FM Limited in C.O.(COMM.IPD-CR) 8 of 2021; Next Radio Ltd. in C.O.(COMM.IPD-,,,
CR) 9 of 2021; HT Media Limited in C.O.(COMM.IPD-CR) 11 of 2021. T.V. Today in C.O.(COMM.IPD-CR) 13 of 2021.] Mr. Neeraj Kishan,,,
Kaul, [For DB Corp Ltd. in C.O.(COMM.IPD-CR) 10 of 2021.] Mr. Rajshekhar Rao, [For Rajasthan Patrika Private Limited in C.O.(COMM.IPD-",,,
CR) 12 of 2021.] Senior Advocates, and Mr. Sagar Chandra, Advocate. [For Music Broadcast Ltd. in C.O.(COMM.IPD-CR) 14 of 2021] Their",,,
submissions are summarized as follows:,,,
A. Existence of Prima Facie Case,,,
5.1. There can be no doubt regarding the Petitioners’ entitlement to a license to broadcast sound recordings, stemming from the statutory right",,,
conferred under Section 31D. As the rates determined by the IPAB Order are set to expire on 30th September, 2021, Petitioners are entitled to seek",,,
continuation/revision of the rates. In order to ensure continuity of statutory broadcasting licenses vis-Ã -vis sound recordings, the court may order a",,,
status quo in respect thereof.,,,
5.2. It is settled position of law since 1977, as held in Indian Performing Rights Society v. Eastern India Motion Pictures Association (1977) 2 SCC",,,
820, that the author of a lyric or a composer, once engaged by a film producer, does not retain any right in their respective work. Thus, where a film is",,,
communicated to the public, or the sound recording associated with such film is communicated to the public, including by radio broadcast, the only",,,
license that needs to be taken is in respect of the film or the sound recording, as the case may be, and not of the underlying work separately. It be also",,,
noted that one of the Respondents herein â€" Indian Performing Rights Society [hereinafter referred to as ‘IPRS’] was also a party to the said,,,
case.,,,
5.3. The IPAB, while determining the rate of license fee for broadcast of sound recordings, proceeded to, without jurisdiction, impose a liability upon",,,
the radio broadcasters to seek a license for the underlying works as well. The IPAB Order also makes it clear that the rate fixed is not composite.,,,
There are clearly delineated rates for sound recordings and underlying works. This view was primarily based on the amendments introduced in 2012 to,,,
the Act vide the Copyright (Amendment) Act, 2012 [hereinafter referred to as ‘the 2012 Amendment’]. The Petitioners however need not pay",,,
any consideration for any underlying works, at least till such time the Division Bench, which is seized of a batch of appeals arising from the IPAB",,,
Order, decides whether the position in law has changed after the 2012 Amendment. As of now, the legal position in this regard has been settled by a",,,
judgment dated 4th January, 2021, passed by a Co-ordinate Bench of this Court in Indian Performing Right Society Ltd. v. Entertainment Network",,,
(India) Ltd., C.S.(OS) No. 666 of 2006; Appeals from which are pending before a Division Bench of this Court, in in RFA (OS) 5/2021 and RFA",,,
(OS) 6/2021. [hereinafter referred to as the ‘ENIL-2021’], which is subsequent in time to the IPAB Order. This judgment clarifies that the",,,
position of law remains unchanged post the 2012 Amendment. The initial stay order issued by the Division Bench against ENIL-2021 (supra), [Vide",,,
order dated 14th January, 2021 in RFA (OS) 5/2021 and RFA (OS) 6/2021.] was subsequently vacated, [Vide order dated 25th January, 2021.] and",,,
remains unchallenged by the Respondents. Hence, it is prayed that only the rates qua sound recordings, be extended.",,,
5.4. In 2016, the Supreme Court in International Confederation of Authors and Composers v. Aditya Pandey, (2017) 11 SCC 437 [hereinafter referred",,,
to as ‘Aditya Pandey’] interpreted Sections 13(4), 14, 17 [provisos (b) and (c)] among others to arrive at a finding that, as a matter of law, the",,,
position remains unchanged after the 2012 Amendment.,,,
5.5. The determination of rights and liabilities of parties are beyond the jurisdiction of IPAB. Therefore, its finding that the 2012 Amendment has",,,
modified the position of law, is incorrect and beyond its restrictive fact-finding scope of jurisdiction. Section 31D merely empowered the IPAB to",,,
determine rates after conducting an inquiry. The specific jurisdiction to determine the right and liabilities of parties lies solely with a judicial court. In,,,
the event of any conflict, the High Court’s jurisdiction trumps the powers of a statutory tribunal.",,,
B. Balance of Convenience lies in Favour of Petitioners,,,
5.6. An order of status quo preserving the present position, pending detailed pleadings and arguments by parties, is the only course of action that will",,,
preserve the balance that has been continuing for at least the past 9 years. Particularly given the impact of the COVID-19 pandemic on the financials,,,
of the Petitioners, which is in stark contrast to Respondents’ experience during the said period, balance of convenience lies in favour of the",,,
Petitioners.,,,
5.7. The copyright societies have not filed a single suit against any of the broadcasters in the last nine months (i.e., since the passing of the IPAB",,,
Order) alleging non-payment of royalties for the underlying works in terms of the rates fixed by the IPAB. Further, since the 2012 Amendment, IPRS",,,
has filed only one suit against a broadcaster. Moreover, no interim orders have been issued in their favour. On the contrary, during this time, four",,,
broadcasters have either obtained a decree or a final order of dismissal of suit, in their favour, and against IPRS, in the same time. In fact, the",,,
Petitioners have a decree against IPRS granted in 2011 by the Bombay High Court in Music Broadcast Private Ltd. v. Indian Performing Rights,,,
Society Ltd. 2011 (47) PTC 587 (Bom), holding that no separate royalty is payable to IPRS while broadcasting sound recordings over radio. The",,,
impact of the aforesaid decree and determination of IPRS’ right to collect royalty, is the subject matter before the Appellate Courts, and thus",,,
cannot be agitated by the Respondents in the present proceedings.,,,
5.8. On 01st October, 2021, upon expiry of the effect of royalty rates fixed by the IPAB Order and, in the absence of a status quo direction, the",,,
Petitioners will be unable to invoke statutory license Section 31D. They will then have no choice but to negotiate terms of a Voluntary License,,,
Agreement on unfavourable and monopolistic terms, which shall defeat the intent behind the enactment of Section 31D. On the other hand, in view of",,,
Section 31D and grant of statutory license to the Petitioner, the only entitlement of the Respondents is in terms of the royalty fixed by this Court. Thus,",,,
if a status quo is granted, or revised rates determined by this Court are made applicable from 1st October, 2021, no prejudice shall be caused to the",,,
Respondents. For this reason, as well, the balance of convenience also lies in favour of the Petitioner.",,,
C. Irreparable Injury will be Caused if Relief Not Granted,,,
5.9. As the Petitioners’ entitlement to license is not denied by the Respondents, final determination of these petitions will only impact the",,,
rate/quantum of license fee. If, however, the interim order of status quo is not granted in the interregnum, entire purpose of the provision shall be",,,
defeated.,,,
5.10. Aggrieved by ENIL-2021 (supra), appeals were preferred by both IPRS and the Music Labels. ENIL-2021 (supra) was stayed by the Division",,,
Bench in IPRS’ appeal, [RFA (OS) 5/2021 and RFA (OS) 6/2021] vide order dated 14th January, 2021. Subsequently in the other appeals, [RFAs",,,
30/2021, 32/2021, 17-20/2021, 25-26/2021, 29/2021] a detailed order dated 19th January 2021 was passed by the Division Bench recognising that the",,,
IPAB Order is diametrically opposite to ENIL-2021 (supra). The Court recognized that on parity of reasoning, the IPAB Order ought to be stayed as",,,
well. However, since the said Division Bench could not hear the said Appeals, it vacated the stay against ENIL-2021 (supra) vide order dated 25th",,,
January, 2021. [In RFA (OS) 5/2021 and RFA (OS) 6/2021] The Division Bench further observed that both set of appeals viz. IPRS’s and the",,,
Broadcasters’, should be heard on a clean slate.",,,
5.11. In view of worsening financial conditions and consequently the paying capacity of the Petitioner, irreparable harm and injury will be caused in",,,
absence of any interim protection. The Petitioners would be forced to pay license fee on exorbitant rates fixed by the Respondents, which will in turn",,,
lead to collapse of the Petitioners as well as of the radio industry. On the other hand, Respondents will be entitled to demand differential monetary",,,
compensation after adjudication of higher royalty rates, if any, which can be paid by the Petitioners to the Respondents, if so directed.",,,
D. License to be Applicable to “Future Works†as well,,,
5.12. By arguing that the present proceedings determining revision of royalty rates shall be limited to the works published till the date of issuance of,,,
public notice under Rule 31, the Respondents are seeking to obtain a finding from this Court which is beyond the scope of the present proceedings.",,,
5.13. Although the term “future works†is not defined under the Act, it finds a mention in Section 18 of the Act which deals with assignment of",,,
copyright, and also in Section 30 of the Act which deals with voluntary licensing, to mean ‘works’ that have not come into existence. Under",,,
Section 31D, the Petitioners are granted a statutory license in respect of all works which have already been published. Thus, Section 31D cannot be",,,
interpreted to exclude sound recordings which are published in future. While “future works†which are yet to come into existence cannot be,,,
covered under Section 31D, however, once any work is published, then as per Section 31D, the Petitioners may invoke a statutory license in respect of",,,
such published work.,,,
5.14. The arguments advanced by the Respondents go against the provisions of Section 31D read with Rule 29, which allow broadcast of a “newly",,,
published work†upon notice to the copyright owner. Rule 31(8) also stipulates that in determining the payment of royalties, ‘works newly published",,,
and not included in the scheduled programme’ shall be taken into consideration. Hence, future works should also be included in the ambit of",,,
Section 31D, once said work is published in the future.",,,
RESPONDENTS’ CONTENTIONS,,,
6. The submissions of Mr. Amit Sibal, [For Super Cassettes Industries Pvt. Ltd.] Mr. Akhil Sibal, [For Phonographic Performance Ltd. and Saregama",,,
India Ltd] Mr. Mustafa Doctor (along with Ms. Gayatri Roy), [For Yash Raj Films Pvt. Ltd.] Mr. Dayan Krishnan, [For Sony Entertainment",,,
Enterprises Ltd.] Senior Counsels; along with Mr. Saikrishna Rajagopal, [For the Indian Performing Rights Society Limited.] Mr. Jagdish Sagar, [For",,,
Recorded Music Performance Limited.] Mr. Harsh Kaushik, [For TIPS Industries Ltd.] Counsels for the Respondents, are as follows:",,,
A. Deliberate Delay by the Petitioner,,,
6.1. Despite being aware that the rates fixed the IPAB Order expire on 30th September 2021, and that process under Rule 31 requires a period of two",,,
to three months, the Petitioners have initiated proceedings under Rule 31 at the last minute. This is a deliberate ploy to falsely engineer emergent",,,
circumstances which require this Court to go beyond the scope of its powers to impose interim rates. The Petitioners were free to file these petitions,,,
before this Court immediately when the IPAB was abolished on 4th April 2021.,,,
B. No Prima Facie Case,,,
6.2. There is no prima facie case in favour of the Petitioners as they have not approached the court with clean hands. They are manifestly, blatantly",,,
and admittedly in non-compliance of the terms of the statutory license issued by the IPAB qua royalty for underlying works, which itself should",,,
disentitle them from any equitable relief. This Court would not pass any order which would in effect tantamount to rewarding such parties for wilful,,,
disobedience of the law.,,,
6.3. The Petitioners cannot rely upon the inherent powers of this Court under Section 151 of the Code of Civil Procedure, 1908 to seek interim relief,",,,
because, in a proceeding instituted under Section 31D of the Copyright Act, the powers are to be exercised only as per Section 31D read with Rules",,,
29 and 31 thereto, which do not extend to rendering of interim licenses. In Super Cassettes Industries Limited v. Music Broadcast Private Limited",,,
2012 (50) PTC 225 (SC), [hereinafter referred to as ‘Music Broadcast’], the Supreme Court held that the Copyright Board (as the predecessor",,,
of the erstwhile IPAB) has no power to pass interim orders, and such powers cannot be implied.",,,
6.4. The present application is inherently contradictory to the stand taken by the Petitioners in other pending litigations. On the one hand the Petitioners,,,
have challenged the IPAB Order before a Division Bench of this Court and sought a stay of the same, but on the other hand, they are praying in the",,,
present batch of petitions to continue the operation of the IPAB Order. Petitioners should thus be estopped from seeking the relief sought in the,,,
present applications, having prayed the opposite in the appeal.",,,
6.5. The statutory licensing process commences with issuance of a public notice by this Court, which requires a thorough adjudication prior to",,,
determination of royalty rates, considering that statutory licensing is an exception to the copyrights available to the Respondent under the Act.",,,
Petitioner, however, is not compliant with the notice format prescribed under Rule 29, for notifying the Respondent of their intent to communicate the",,,
sound recordings and underlying works to the public.,,,
6.6. The IPAB considered various factors for fixation of rate, [Para 162 of the IPAB Order, 2020] such as: the radio broadcasters’ financial",,,
capacity to pay, [Para 103 of the IPAB Order, 2020] the prevailing royalty rates in the market, [Para 187.4, 205, 209 of the IPAB Order, 2020] and",,,
the need to ensure just remuneration to owners of copyright. [Para 213 of the IPAB Order, 2020] It then determined the composite rate, being",,,
conscious that the rates determined include two components â€" sound recordings and the underlying works within sound recordings. [Para 210 of the,,,
IPAB Order, 2020]",,,
6.7. The prayer for interim relief is a wolf in sheep’s clothing as it actually seeks an alteration of the IPAB Order but does so in the guise of a,,,
prayer for a status quo order. The prayers of the Petitioners, to the extent they seek to alter the IPAB Order by asking for an extension of the rate",,,
only qua sound recordings (without an extension of the term for the rates for underlying works), are untenable in view of the fact that the Act confers",,,
power to determine or revise rates only in rem by following the procedure of public notices under Rule 31 and hearing the public at large before any,,,
such determination. There is no power vested with the court to determine interim rates inter-parties, without public notice.",,,
6.8. Reliance is placed on Music Broadcast (supra), wherein in the context of Section 31D, it was held that exercise of powers and jurisdiction vested",,,
under the Act is circumscribed by the provisions of the Act and no interim compulsory licence could be granted because the Act did not confer such,,,
power.,,,
6.9. The scheme of the statutory license under Section 31D and the language used in the section clearly contemplate only a final rate after following,,,
the procedure under Rule 31.,,,
6.10. Neither Section 31D nor Rule 31 envisage or confer the power to grant an interim rate. Thus, no revised rates can be determined or imposed in",,,
the absence of compliance with the procedure in Rule 31, which requires a de novo determination of rates.",,,
C. Balance of Convenience - Interim order will prejudice the rights and interests of the Respondents,,,
6.11. Aggrieved by the rates fixed therein, the Respondents have challenged the IPAB Order. Hence, such rates, which are under challenge, should",,,
not be extended by way of an interim order.,,,
6.12. The applications are a dishonest attempt to overreach the Division Bench before which the appeals are lis pendens, and would amount to a de",,,
facto stay of IPAB Order, which has not been done by the Division Bench. They cannot seek to secure an oblique interim order which amounts to a",,,
modification or re-determination of the IPAB Order.,,,
6.13. As per Rule 31(9), the rates of royalties, as determined under Rule 31D, have to be revised at least once a year. Even commercially, voluntary",,,
license agreements in the music industry usually increase the license fee by 6-10% on a year-to-year basis, keeping in view inflation and the general",,,
growth in the market. Thus, the rate fixed last year cannot be extended beyond a year, without increment, by way of an interim order.",,,
6.14. Contrary to Petitioner’s claims, the radio industry continues to remain profitable, and has the financial capacity to pay royalties.",,,
6.15. Any interim relief would assist the Petitioners to avoid their obligation to pay royalties as per the rates set out for the different classes of works.,,,
6.16. As the present proceeding under Section 31D are in rem, their outcome binds all radio broadcasters/entities wishing to take benefit of the",,,
statutory license rates.,,,
6.17. The Petitioners can only seek revision, and not a judicial redetermination of the rate set by IPAB, as the appeals against the IPAB Order are",,,
pending.,,,
D. ENIL-2021 is Per Incuriam and Not Binding,,,
6.18. The Petitioner’s reliance upon ENIL-2021 (supra) is mis-founded, as:",,,
6.18.1. ENIL-2021 (supra) was rendered in a suit filed prior to the 2012 Amendment. It was hence decided inter se parties, whereas the present",,,
proceedings are in rem.,,,
6.18.2. ENIL-2021 (supra) is per incuriam, as: â€"",,,
(i) ENIL-2021 (supra) is in the teeth of the Supreme Court’s dicta in Aditya Pandey (2017) 11 SCC 437.,,,
(ii) It is also contrary to the IPAB Order which is prior in time, and which recognised that royalty is required to be paid post the 2012 Amendments.",,,
(iii) It is contrary to statutory provisions vis. last proviso of Section 17, third and fourth proviso to Section 18, Section 19(9) as well as 19(10) of the",,,
Act.,,,
(iv) It’s contrary to the legislative intent of the Parliament impelling the 2012 Amendments, as stated in the 227th Standing Committee Report,",,,
[Paras 9.14 to 9.18, 10.9 to 10.13, 10.16 to 10.17, and 10.19 to 10.20 of the 227th Standing Committee Report. Â ] that the Amendments were",,,
clarificatory as to the nature of rights of authors of underlying works.,,,
E. The IPAB Order is not severable, and thus, if extended, must be in entirety.",,,
6.19. Admittedly, the Petitioners, at present, are exploiting the musical / literary works, i.e., the underlying works, without a license, and the",,,
Respondents are not being duly compensated.,,,
6.20. Fixation of an interim royalty rate different from the rate fixed by the IPAB may be considered as a materially relevant factor at the time of final,,,
hearing, which may prejudice the right of the Respondents to a fair determination of license fee under Section 31D.",,,
6.21. Arguendo, in the event this Court deems it fit to extend the operation of the IPAB Order, it must not be extended in piecemeal, but in its entirety.",,,
The entitlement to use the sound recordings upon payment of statutory royalty rates entails a reciprocal obligation to make payment for the underlying,,,
works as well. The share of royalty of the music labels has been reduced to accommodate the payment which is to be made by the radio broadcasters,,,
for the underlying works. If the IPAB was of the view that there is no requirement in law for the Petitioners to pay for one of the components i.e.,",,,
underlying works, the rates determined for the remaining component i.e., sound recordings, would have been higher, which is not the case. Therefore,",,,
the Petitioners can ask for a complete, but not for a partial extension of the IPAB Order; it cannot be severed as per their convenience.",,,
6.22. The IPAB Order contemplates a single license with separate rates. The exercise of fixing rates by the IPAB, too, was a composite one,Â",,,
[Paras 57-74 of the IPAB Order, 2020.] and thus cannot be severed. The rates for sound recordings and underlying works in the IPAB Order are",,,
inextricably intertwined. The two components are conditions precedent to the exercise of license under Section 31D. There is no license if either of,,,
these conditions are not satisfied; (ii) The IPAB Order determines the composite rate and has further divided it into two components i.e., sound",,,
recording and underlying literary and musical work.,,,
6.23. The rate determined by the IPAB in exercise of its powers under Rule 31 for sound recordings and underlying works is a composite rate for,,,
both sets of works. [Para 74.5 of the IPAB Order, 2020.] A composite licence is envisioned under Section 31D (1) of the Act, as is evident from the",,,
conjunction ‘and’ used in the wording of the Section, vis: “literary or musical work and sound recordingâ€. Rule 31(3) also requires the Court",,,
to take into consideration, suggestions in respect of “different rates for different works and different formatsâ€. Rule 31(5) mandates the court to",,,
determine “separate rates of royalty to be paid to owners of literary and musical works and sound recordings for radio and television broadcasting,,,
respectivelyâ€. Further, Rule 31(7) mandates Court to take into consideration “different rates for different classes of works.†Rule 31(9) further",,,
mandates that revision of royalties is to be in terms of the provisions of these rules. All of this shows that the rate fixed is a composite rate.,,,
6.24. The IPAB Order considered in great detail the effect of the 2012 Amendment and held that the broadcast of a song would entail use of a sound,,,
recording as well musical and/or literary works embodied therein, i.e., the underlying works. Both as a matter of law and fact, the rates fixed by the",,,
IPAB for sound recordings and underlying works are inextricably linked and cannot be severed either as a matter of legal reasoning or fact, without",,,
upsetting the entire foundation of the IPAB Order, which would be beyond the mandate of this Court.",,,
6.25. The IPAB Order further explicitly notes that the Petitioners themselves admitted that royalties were required to be paid to authors and music,,,
composers. Thus, the Petitioners cannot be allowed to resile from this admission.",,,
6.26. Pertinently, the relief sought in the applications which are being decided by way of this order, are not identical. In I.A. 11409/2021 in C.O.",,,
(COMM.IPD-CR) 14/2021, the prayer seeks for passing of an “interim order for maintaining status quo in respect of the payment of royalty for",,,
broadcast of sound recordings by the Petitioner as per the rates determined by IPAB Order dated 31st December 2020 till revised statutory licence,,,
royalty rate for broadcast of sound recordings through radio are determined†by this Court. Whereas, the applications filed in the remaining matters,",,,
seek an “interim order allowing the Petitioner to continue making payment at the license fee rates fixed by the IPAB Order†and the prayer is not,,,
limited to sound recordings. Thus, in the garb of seeking a status quo order, the Petitioners actually seek to continue making payments only for sound",,,
recordings and not for literary works and musical works.,,,
6.27. The applications are conceited in so far as they only seek continuation of the implementation/ exercise of those parts of the IPAB Order which,,,
are favourable to the Petitioners. The Petitioners cannot pick and choose such aspects of the IPAB Order to continue in the interim, especially when",,,
the challenge to the IPAB Order is pending.,,,
6.28. The IPAB Order held that in line with the scheme of Section 31D and the relevant Rules, and as per 2012 Amendments, a composite license",,,
would be issued under Section 31D, with separate rates for both ‘literary works and musical works’ and sound recordings. This composite",,,
license cannot now be split by the Petitioners at their own whim. The Petitioners have claimed that they are making payment for utilization of,,,
‘sound recording’ to music labels as per the rates set by the IPAB. This “part-payment proposal†was in fact rejected by the IPAB, as the",,,
royalty rates set by it included separate rates for underlying literary and musical works. The IPAB held that the Petitioners herein, being aware of the",,,
obligation to pay royalties for underlying works under the 2012 Amendments, could not make a prayer seeking to limit their rate fixation exercise to",,,
only sound recordings. [Para 59.5 of the IPAB Order, 2020.]",,,
6.29. Voluntary licensing under Section 30 of the Act is the ordinary mode of dealing in copyright, and the statutory license in Section 31D is an",,,
exception to the rule of voluntary licensing; it is an expropriatory provision which falls outside the norm in Section 30. [See: Entertainment Network,,,
(India) Ltd. v. Super Cassettes Industries Ltd. (2008) 13 SCC 30 â€" See, para. 89, 90, 92, 96; and Music Broadcast (supra).] Being expropriatory in",,,
nature, conditions and provisions in Section 31D and Rule 31, including the requirement to pay royalty as per the composite rate for the broadcast of",,,
sound recordings and underlying works, must be followed strictly. Thus, if the Petitioners wish to broadcast works under the benefit of Section 31D,",,,
they must pay royalty for both components of the composite rate determined by the IPAB, without which there is no statutory license.",,,
6.30. The Petitioners are wrong to state that royalty rates should be affixed qua underlying works in sound recordings. The IPAB had rejected the,,,
said submissions after extensively considering the same. Statutory licensing rates were fixed for the underlying works payable by the Petitioners.,,,
6.31. Super Cassettes Industries Pvt. Ltd. has made a separate submission concerning payment for underlying works despite being a member of,,,
IPRS. They contend that by virtue of 3rd and 4th proviso of Section 18(1) of the Act (which were inserted through the 2012 Amendment) they are,,,
entitled to an equal share of the royalty paid for the broadcast of underlying works.,,,
ANALYSIS AND FINDINGS,,,
7. The IPAB, after extensively considering the submissions of all the stakeholders and on analysis of the provisions of the Copyright Act, 1957,",,,
determined the royalty rates for statutory licensing under Section 31D payable by private FM radio stations vide judgment dated 31st December 2020.,,,
The rates so prescribed, and currently in force, are set to expire on 30th September 2021. Thus, the above captioned petitions have been filed under",,,
Section 31D of the Copyright Act, 1957 read with Rule 31(9) of the Copyrights Rules, 2013, for revision/ fresh determination of rates. Till the time",,,
such rates are finally revised/determined, the Petitioners seek status quo/continuation of the royalty rates so fixed by the IPAB Order. Interestingly,",,,
this prolongation is however sought only qua sound recordings â€" to the exclusion of the rates with respect to the underlying works, which too have",,,
been determined in the same order. All the Respondents have, in some, way opposed the interim prayer of the Petitioners by raising several",,,
objections. The written submissions filed by the Respondents raise factual and legal objections, including the plea of lack of jurisdiction of this court to",,,
pass an interim order. The contentions vary and also overlap, and therefore have been broadly classified under different headings. Yet, there is also a",,,
common thread in the submissions of nearly all the Respondents â€" they vehemently object to a partial extension of the IPAB Order, i.e., only qua",,,
sound recordings and excluding the underlying works. They contend that the IPAB Order cannot be severed; if the interim order fixing the royalties,,,
has to be extended, it should be in entirety, and rates for underlying works should also be continued.",,,
8. Before proceeding with the analysis, it is also pertinent to point out two digressions from the common arguments of the Respondents. Firstly,",,,
Recorded Music Performance Limited, represented by Mr. Jagdish Sagar, took a nuanced stance to contend that, firstly, it is neither mandatory nor",,,
necessary under the statute to fix the license fee rates, or else, the Rules would not have provided alternative means of triggering the process of fee",,,
fixation. It was pointed out that no such fees have ever been sought or fixed for television broadcasting under Section 31D, even though it came into",,,
force on 21st July 2012. In fact, no radio broadcaster ever sought fixing of statutory license fees before 2020, as voluntary licensing remains the",,,
default. Secondly, Yash Raj Films (YRF), represented by Mr. Mustafa S. Doctor, Senior Advocate, stated that it agrees with the Petitioners that the",,,
IPAB has committed a fundamental error in its interpretation of the Copyright Act by treating the underlying works as co-existing with the sound,,,
recording even after they form a part of the sound recording. It was further contended that this interpretation runs contrary to the provisions of the,,,
Act which recognize a sound recording as a separate and distinct work from the underlying works. It was also submitted that before the Appellate,,,
Court, YRF sought, as an alternative prayer, that the Petitioners herein be directed to deposit the disputed amounts with the Registrar of this Court,",,,
with a view to secure the monies. The court may consider that an interim measure, pending final adjudication.",,,
9. The conundrum before this Court, at this stage, is thus on the limited aspect as to whether Petitioners are entitled to an interim relief of maintenance",,,
of status quo of the IPAB Order, in relation to the royalty rates, till such time final determination of revision of royalty rates is completed, in",,,
compliance with Rules.,,,
10. The Court has considered the submissions advanced by the parties and shall answer them in seriatim in the following manner:,,,
A. Whether delay by the Petitioners disentitles them to the prayer sought?,,,
11. The Respondents have contended that the process under Rule 31 requires 2-3 months and therefore, the last-minute initiation of the present",,,
proceedings is a deliberate ploy to fabricate urgent circumstances which require this Court to go beyond the scope of its powers to impose interim,,,
rates/ relief. Considering the timelines involved in the process, steps should have been initiated by the Petitioners well in time. They argue that the",,,
recent creation of Intellectual Property Division â€" as a subset of this Court â€" cannot justify the delay on part of the Petitioners, as the IPD has",,,
simply altered the nomenclature for commercial disputes relating to Intellectual Property, but the avenue still existed prior to the same.",,,
12. The Court does not find any merit in this contention. The rates fixed by IPAB are going to expire on 30th September, 2021. Even if there is delay",,,
in approaching this Court, the same cannot be considered as a ground to deny the relief when the Petitioners have a statutory right to apply for fresh",,,
determination under the scheme provided under the Act. Section 31D grants a statutory license for broadcast of sound recordings on payments to be,,,
made as per the rates fixed by this Court. This right of the Petitioners cannot be swatted away by the plea of delay raised by the Respondents, more",,,
pertinently, having regard to the nature of proceedings contemplated under Section 31D.",,,
B. What is the scope of proceedings under Section 31D of the Copyright Act, 1957?",,,
13. The license as contemplated under Section 31D is a statutory license. It is fundamentally distinct from a compulsory license as envisaged under,,,
Section 31 of the Act. At this interim stage, it would suffice to note that the objective behind Section 31D is to give broadcasting organisations access",,,
to sound recordings in a fast and convenient manner without disturbing the economic rights of the copyright owners. The proceedings are in rem and,,,
bind all stakeholders, i.e., the music labels as well as the owners of copyrights in the works.",,,
14. Section 31D of the Copyright Act, reads as under:",,,
“31D. Statutory licence for broadcasting of literary and musical works and sound recording.,,,
(1) Any broadcasting organisation desirous of communicating to the public by way of a broadcast or by way of performance of a literary or,,,
musical work and sound recording which has already been published may do so subject to the provisions of this section.,,,
(2) The broadcasting organisation shall give prior notice, in such manner as may be prescribed, of its intention to broadcast the work",,,
stating the duration and territorial coverage of the broadcast, and shall pay to the owner of rights in each work royalties in the manner and",,,
at the rate fixed by the Commercial Court.,,,
(3) The rates of royalties for radio broadcasting shall be different from television broadcasting and the Commercial Court shall fix separate,,,
rates for radio broadcasting and television broadcasting.,,,
(4) In fixing the manner and the rate of royalty under sub-section (2), the Commercial Court may require the broadcasting organisation to",,,
pay an advance to the owners of rights.,,,
(5) The names of the authors of the principal performers of the work shall, except in case of the broadcasting organisation communicating",,,
such work by way of performance, be announced with the broadcast.",,,
(6) No fresh alteration to any literary or musical work, which is not technically necessary for the purpose of broadcasting, other than",,,
shortening the work for convenience of broadcast, shall be made without the consent of the owners of rights.",,,
(7) The broadcasting organisation shall -,,,
(a) maintain such records and books of account, and render to the owners of rights such reports and accounts; and",,,
(b) allow the owner of rights or his duly authorised agent or representative to inspect all records and books of account relating to such,,,
broadcast, in such manner as may be prescribed.",,,
(8) Nothing in this section shall affect the operation of any licence issued or any agreement entered into before the commencement of the,,,
Copyright (Amendment) Act, 2012.â€",,,
15. ‘Sound recording’, is defined under Section 2(xx) of the Act as “a recording of sounds from which such sounds may be produced",,,
regardless of the medium on which such recording is made or the method by which the sounds are producedâ€. The Petitioners have approached this,,,
court for fixation of the rates for sound recordings only. They claim that while broadcasting sound recordings, they do not utilize or exploit the",,,
underlying works independently. They assert that the license for sound recordings is sufficient for communicating the sound recordings. Such prayer,,,
defines the limited scope of proceedings in these petitions. A plain reading of this section shows that the scope of proceedings for fixation of rates of,,,
royalty to be paid to the owner of copyright is in-built in the statute and the rules framed thereunder.,,,
16. Indeed, it is seen that the scheme of the statutory licensing, as provided in the Act, does not require the Petitioners to specifically seek a voluntary",,,
license from the owner of copyright in the sound recording. In order to avail benefit of the provision â€" i.e., statutory or non-voluntary license, they",,,
are required to issue prior notice specifying the duration and territorial coverage, as provided in sub section 2 to section 31D, and payment of royalties.",,,
This provision thus gives statutory assurance to the public and confers a right in favour of radio broadcasters to broadcast the copyright work. The,,,
broadcasting organisations communicating sound recordings have to statutorily apply for fixation of rates under Section 31D. The commercial court is,,,
thus required to fix the rates of royalties for such work.,,,
17. The Petitioners have approached this Court under Rule 31(9), seeking revision of royalty rates as fixed by the IPAB Order. As observed in the",,,
IPAB Order, this process would not contemplate a de novo determination of royalty rates. The rates already determined by the IPAB have to be",,,
taken as a base for future revision/ change in the rates, and the entire process need not be replicated. Of course, as observed in para 215(h) of the",,,
IPAB Order, relevant factors would have to be taken into consideration, such as the financial details, paying capacity of the broadcasters, the effect",,,
of the pandemic, etc. This defines the scope of the proceedings under Section 31D.",,,
C. Whether the position in law remains unchanged after the 2012 Amendment? If so, what is its effect on Section 31D?",,,
18. On this issue, the parties have made detailed submissions. According to the Petitioners, the position in law remains unchanged, notwithstanding the",,,
2012 Amendment. They contend that although the IPAB Order has fixed separate rates for payment of underlying works, however, it has exceeded",,,
its jurisdiction in doing so. They also contend that there is no independent utilisation of underlying literary and musical works embodied in a sound,,,
recording when it is broadcast by the Petitioners via radio.,,,
19. To buttress his contention, it has been argued that this Court in ENIL-2021 (supra), has examined the effect of the 2012 Amendment, and held that",,,
the position in law remains unchanged. In light of the aforesaid decision, the Petitioners maintain that they are not liable to pay any royalty for the",,,
underlying works, notwithstanding the fact that the same has been fixed under the IPAB Order. The Respondents, on the other hand, contend that",,,
pursuant to 2012 Amendment, there is a complete overhaul of rights of owners of the underlying works in a sound recording, which is now evident",,,
from the amendments carried out to several provisions of the Copyright Act, including but not limited to Sections 17, 18 and 19. They plead that the",,,
observations made in the ENIL-2021 (supra) are merely obiter dicta, as they relate to the position of law post 2012 Amendment, which was not",,,
relevant for adjudication of disputes in the said proceedings in a suit. For this reason, it is contended that the observations do not constitute a binding",,,
precedent and certainly the Petitioners cannot seek to rely on the same to seek an alteration of the IPAB Order.,,,
20. There seems to be an apparent clash between the IPAB Order and the ENIL-2021 judgment. As noted earlier, the aforesaid decisions â€" viz. the",,,
IPAB Order and the ENIL-2021 judgment of the Court â€" are pending in challenge before Division Benches this Court. Thus, this Court refrains",,,
from making any observations on the afore-said decisions. It may also be trite to mention that for the same reason, the court has not found it apposite",,,
to examine the case laws cited by the parties in this respect, viz. Aditya Pandey (supra), IPRS v. Vijay Verma (supra) among others.",,,
21. Having said that, it is apposite to mention that there is presently no stay by the Division Bench operating in respect of either of the orders. As",,,
already noted, although the judgment in ENIL-2021 (supra) was initially stayed; it was subsequently vacated; this fact is not controverted or denied by",,,
Respondents. Thus, the effect of the decree passed by this court in the ENIL-2021 (supra), as well as the IPAB Order, continues to operate. This is",,,
the how the land lies as on today.,,,
D. Whether the Court has the power to fix interim rates under Section 31D?,,,
22. The Respondents have laid considerable emphasis that no jurisdiction is vested with this Court to grant interim orders. It is argued that in the,,,
absence of any power being expressly provided under the Act or Rules, the same cannot be implied, particularly when this power would affect the",,,
substantive rights of the stakeholders. Further, by relying upon Section 11 of the Act, it is argued that in the absence of any enabling provision, this",,,
Court would not have the power to grant interim statutory license; this court only possesses limited powers of a civil court, as specifically provided",,,
under Sections 11, 12 and 74 of the Act. Reliance is placed upon a judgment of the Supreme Court in Music Broadcast (supra) to argue that it was",,,
been specifically held by the Apex Court that the erstwhile Copyright Board, (which exercised jurisdiction under Section 31 of the Act prior to the",,,
erstwhile IPAB), did not have power to pass interim orders when such powers cannot be implied under the Act; the same principle applies to this",,,
Court under Section 31D. Without prejudice, it is also argued that an interim license would undermine the mandate of Section 31D read with the Rule",,,
31.,,,
23. The Court does not find merit in the above contention of the Respondents. Before the IPAB as well, the question for fixation of interim rates was",,,
urged, and vide order dated 18th September 2020, IPAB had fixed interim rates on consent basis. Nevertheless, Section 31D does confer the power to",,,
this Court to fix statutory license rate for broadcast of sound recordings. This is the mandate of law, and the Respondents cannot avoid the same,",,,
subject, of course, to the Petitioners making payments at the rates so fixed.",,,
24. The right of access to the copyrighted material has thus been assured. The computation and fixation of the rates to be paid for its use in sound,,,
recordings is the limited scope of present proceedings. Jurisdiction of this Court under Section 31D is confined to fixing the rates of royalty for,,,
statutory license; more significantly, at this stage, only interim arrangement has to be worked out, pending adjudication of the present proceedings.",,,
25. Today, the benchmark for the rates is already available in the IPAB Order. The court finds no embargo in law for issuing a direction for",,,
continuation of these rates for sound recordings under Section 31D. Unless the power to grant interim orders is read into the provisions of Section,,,
LICENSE BASED CITY
CLASSIFICATION OF
FM BROADCASTERS","PRIME TIME
@100
08.01Â Â
hrs  to
10.00 hrs
18.01Â Â
hrs  to
20.00 hrs","OTHER TIME
@50%
6.01Â Â Â Â Â
hrs    Â
to
08.00 hrs;
10.01Â Â Â Â
hrs    to
18.00Â Â Â Â
hrs    &
20.01Â Â Â Â
hrs    to
22.00 hrs","LEAN TIME
@25%
00.01Â Â Â Â
hrs    to
06.00 hrs
22.01Â Â Â Â
hrs    to
24.00 Hrs
TIERÂ A+Â FULLÂ
RATEÂ SOUND
RECORDING",INR 750,INR 375,INR 188
TIERÂ Â Â Â Â
A+Â Â Â Â Â
FULLÂ Â Â Â Â RATE
UNDERLYING WORKS",INR 300,INR 150,INR 75
TIERÂ Â Â AÂ Â Â
20%Â Â Â REDUCTION
SOUND RECORDING",INR 600,INR 300,INR 150
TIER A 20%
REDUCTION
UNDERLYING WORKS",INR 240,INR 120,INR 60
TIERÂ Â Â BÂ Â Â
40Â Â Â %REDUCTION
SOUND RECORDING",INR 450,INR 225,INR 113
TIER B 40%
REDUCTION
UNDERLYING WORKS",INR 180,INR 90,INR 45
TIERÂ Â Â CÂ Â Â
60%Â Â Â REDUCTION
SOUND RECORDING",INR 300,INR 150,INR 75
TIER C 60%
REDUCTION
UNDERLYING WORKS",INR 120,INR 60,INR 30
TIERÂ Â Â DÂ Â Â
80%Â Â Â REDUCTION
SOUND RECORDING",INR 150,INR 75,INR 38
TIER D 80%
REDUCTION
UNDERLYING WORKS",INR 60,INR 30,INR 15
 All rates have been rounded off.,,,
212. The royalty rate of INR 1050 at the TIER A+ peak time from the point of view of Music Companies should be satisfactory as it roughly 9% of,,,
NAR based on 2019 financial data of Broadcasters, which is far higher than 2% erstwhile received by them and even higher than 7% NAR",,,
demanded by some of the music companies in this proceeding. Similarly, the Applicant Broadcasters should also be satisfactory with the current lower",,,
royalty rate range of INR 1050(TIER A+ Prime Time) to INR 15(TIER D Lean Time) as they have earlier paid INR 1200 (For SCPL) to the lowest,,,
INR 230 (2% NAR).â€,,,
30. Earlier, Petitioners invoked Section 31D and approached the IPAB for determination of royalty rates to be paid for broadcast of sound recordings",,,
on FM Radio. In the said proceedings, the Copyright Societies intervened and sought determination of rates of royalty to be paid for utilization of",,,
underlying works. Although the Petitioners contended that broadcasting of sound recordings does not utilise or exploit the underlying works,,,
independently, nevertheless, it emerges, from a reading of the IPAB Order, that the Tribunal not only determined the royalty rates in respect of",,,
underlying works and sound recordings separately, but also made a determination that post the 2012 Amendment, while broadcasting the sound",,,
recordings on radio, the Petitioners also utilize the underlying works embodied in sound recordings. The IPAB Order thus directed payment of",,,
royalties for the underlying works as well. Whether such direction of the IPAB is lawful, is a question which is being agitated before the Division",,,
Bench of this Court in appeals filed by both the Petitioners as well as the Music labels against the IPAB Order, and hence shall not be delved into by",,,
this Court.,,,
31. The question before the court, thus, is limited to whether the manner of computation of royalty rates for sound recordings is so intertwined with the",,,
rates fixed for underlying works, that the continuation/extension of one is not possible without continuation/extension of the other. In the opinion of the",,,
Court, the afore-said observations of the IPAB do not indicate that the rates are composite. Although the Respondents have contended that if the",,,
IPAB would not have fixed separate rates for the underlying works, the rates determined for the remaining component â€" i.e., sound recordings â€"",,,
would have been much higher; however, this does not appear to be so. Both the rates have been fixed independently, as discernible from the",,,
observations made in para 209, 210 read with para 215 (c) of the IPAB Order, which give directions to the Petitioners herein to make the payments to",,,
the Copyrights Societies. In any event this aspect would have to be examined in-depth at the stage of final determination of revised/modified yearly,,,
royalty rates for sound recordings. Thus, the IPAB Order, when read in entirety, indicates that although the IPAB had fixed rates for sound",,,
recordings and underlying work, the two are separate and distinct, not consolidated or cemented in such a manner that the continuation of royalty rates",,,
only qua the component of sound recording would violate the rationale of the IPAB behind the fixation of rates for sound recording.,,,
F. Whether the IPAB Order should be extended in entirety or with alteration?,,,
32. This brings us to the moot question â€" what should be the interim arrangement? It has been argued by the Respondents that if the Court would,,,
not extend the rates determined by the IPAB qua underlying works, it would amount to a de facto grant of stay of the decision of the IPAB, and that",,,
the present proceedings are a backdoor entry to obtain an order which the Petitioners have not been able to obtain from the Division Bench.,,,
33. The court does not find merit in the afore-noted objections. Though the IPAB Order has been challenged, it does not result in a fetter on this Court",,,
to pass interim directions. Three important aspects become evident, which require a mention - (a) ever since the IPAB Order, the Petitioners have not",,,
made payment towards underlying works as fixed by the IPAB; (b) the owners of the copyright in the underlying works have not taken any coercive,,,
action against the Petitioners for non-payment of rates fixed by IPAB; (c) the effect of the IPAB Order has not been stayed by the appellate court.,,,
Thus, if the Petitioners are non-compliant and there is no arrangement with the Respondents, or, if the Petitioners are circumventing the order of the",,,
IPAB, the Respondents are well within their rights to utilize all remedies available to them in law. Indeed, one such action is reported to have been",,,
initiated before the Bombay High Court.,,,
34. In the present matters, Petitioners are seeking fixation of a revised/modified annual rate for sound recordings only. Under Section 31D read with",,,
Rule 31, a Broadcasting Organisation has to give prior notice (in the prescribed manner) of its intention to broadcast the work, stating the duration and",,,
territorial coverage of the broadcast. Under Sub-Section 2 of Section 31D, the broadcaster is required to pay to the owner of rights in each work",,,
royalties in the manner and at the rate to be fixed, by the Commercial Court. This exercise would now have to be undertaken by this Court, in terms of",,,
the Rules, which, inter alia, entails issuance of public notice, informing all interested persons of this Court’s intention to fix royalties for broadcast",,,
of sound recordings through radio, as mandated under Section 31D. These proceedings will result in fixation of statutory license fee. The provisions of",,,
the statutory licensing, upon a prima facie opinion of this Court, do not provide for fragmentation of copyright vested in sound recordings for",,,
determining the quantum of royalty rates. Whether sound recording is a separate and distinct work from the underlying work, and whether such",,,
determination is called for under Section 31D, are questions of law that are now likely to be determined by the Division Bench, and are certainly not",,,
required to be determined by this Court at this interim stage.,,,
35. If the license for sound recordings does not vest complete rights in favour of the Petitioners, and the exploitation of works is unlawful in the",,,
absence of license for underlying works, they run the risk of adverse consequences. However, this court cannot expand its mandate under the statute",,,
by issuing directions beyond what has been prayed for as the main relief in the interim applications.,,,
36. The status quo is being maintained by the Respondents themselves; therefore, the court does not find merit in their contention that the Petitioners",,,
are seeking an imprimatur from this Court to legitimize the Petitioners’ stand that they can continue to exploit the Respondents’ creative,,,
works by only paying royalties for sound recordings. If the Petitioners have breached their royalty payment obligations qua the Respondents, as",,,
decided by the IPAB, or contrary to the provisions of the Act or the Rules, the Respondents, being owners of the underlying works, can always take",,,
recourse to remedies under law. This order will not create any prejudice against such Respondents, and to that extent it is made clear that all the rights",,,
of the Copyright Societies and the owners of the underlying works, which flow from the IPAB Order, are protected. In case they have any right,",,,
which entitles them to restrain the Petitioners from broadcasting the sound recordings without payment of royalty for underlying works, they would be",,,
entitled to press for the same. However, non- interference with the directions of the IPAB, does not necessarily mean that continuation of the IPAB",,,
Order has to be in entirety or that the order of status quo, qua rates of royalty for sound recordings, has to be refused.",,,
37. In light of the above discussion, it is felt that a status quo order is necessary, failing which the situation would descend into ambiguity. In the",,,
absence of royalty rates, Petitioners would not be able to invoke Section 31D of the Act.",,,
38. The remit of the Court in the present proceedings is limited to the determination of rates of royalty for sound recordings, and pending final",,,
adjudication, the continuation of rates fixed by IPAB has to be confined to that extent. Thus, pending final adjudication, the Court considers it",,,
appropriate to direct a status quo to be maintained regarding royalty rates qua sound recordings, as fixed by the IPAB. Needless to say, if the IPAB",,,
Order is upheld at a later stage, and it is observed that the process of fixation of royalty rates would include determination of royalty rates for",,,
underlying works, then necessary consequences would follow.",,,
G. Whether the directions given hereinafter, shall apply ad interim or till the stage of final determination for the present proceedings?",,,
39. Lastly, it has been argued that only ad interim license fee rates should be fixed and Respondents should be afforded an opportunity to approach",,,
this Court for revision of interim rates, pending final adjudication. However, in the opinion of the Court, that would be unnecessary. Parties have been",,,
heard at substantial length. The benchmark to be followed are the rates determined by IPAB, by undertaking an extensive exercise. The same has to",,,
adopted as a base for revision and there is, hence, no need to revisit this issue once again, before final adjudication. The Court sees no reason to give",,,
only ad-interim directions. The need for a status quo order here is imperative to ensure that until the petitions are decided, there is an interim",,,
arrangement in place between 30th September, 2021 (when the IPAB Order’s operation ends) and the day the new/modified rates are fixed by",,,
this Court. Although as an interim measure this Court would be continuing the order of the IPAB, in the opinion of the Court, while continuing the",,,
rates in absence of any express bar, the court is also within its jurisdiction to modify/vary the rates at the interim stage if the need so arises, such that",,,
the relief sought for is not ultimately rendered otiose, to meet the ends of justice or to prevent abuse process of court.",,,
40. Further regardless of interim orders, the revised/modified rate of royalties, as determined by this court in the outcome of the present petitions,",,,
would be made effective retrospectively from 1st October, 2021, on an adjustable basis. If the royalty rates are increased or decreased upon revision,",,,
the Petitioners would naturally have to make payments as per such orders. Therefore, the interest of the Respondents would not be prejudiced.",,,
Fixation of interim rates does not tantamount to grant of interim license, as is sought to be canvassed by the Respondents. The directions given in the",,,
IPAB order qua sound recordings shall continue to operate till such time the Court takes a final view of the proceedings.,,,
RELIEF,,,
41. In view of the fore-going, the present applications are allowed, and it is directed that status quo be maintained in respect of payment of royalty for",,,
broadcast of sound recordings by the Petitioners, with effect from 01st October 2021, as per rates determined by IPAB in its Order dated 31st",,,
December 2020, pending final determination of revised statutory royalty rates by this Court.",,,
42. The applications are disposed of.,,,
