TMI Blog2013 (4) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... ndant the continued use of the repertoire of the songs of the Plaintiff - We set aside the operative direction contained in paragraphs 9 and 10 of the impugned order of the learned Single Judge allowing the Defendant to broadcast sound recordings from the repertoire of the Plaintiff subject to the deposit of an amount of Rs.11.50 lakhs - For the reasons indicated earlier, we grant an ad-interim order in terms of prayer clause (a) of the Notice of Motion - We also clarify by way of abundant caution that this order shall not come in the way of the final disposal of the Notice of Motion on merits. The appeal filed by the Defendant stand dismissed - Cross-Objection of the Plaintiff is allowed. - Appeal No.122 of 2013,Notice of Motion (L) No.1108 of 2012,Suit No.883 of 2012 - - - Dated:- 2-4-2013 - D. Y. Chandrachud And A. A. Sayed, JJ. For the Appellant : Mr. Venkatesh Dhond, Senior Advocate, with Mr. Madhur R. Baya and Mr. Abhileen Chaturvedi. For the Respondent : Mr.N.H.Seervai, Senior Advocate, with Ms Gulnar Mistri i/b. Ms Madhavi Deshpande Ravuri, Mr.Vinayak Shete and Mr.Manish Upadhye. JUDGEMENT The appeal before the Court arises from an ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd by an order dated 25 August 2010, granted a compulsory licence, subject to terms and conditions, to the Defendant under Section 31(1)(b). In pursuance of the order of the Copyright Board, a licence was issued to the Defendant which, inter alia, provided for the payment of compensation to the Plaintiff computed at the rate of 2% of the net advertising revenue of the Bombay FM Radio Station. Under the terms of the compulsory licence, the Defendant was to issue a Bank guarantee which had to be revised within two weeks of the close of every quarter to such sums as it was liable to pay as compensation for that quarter. Both the order of the Copyright Board and the licence that was granted to the Defendant specifically provided that the Plaintiff would be at liberty to cancel the licence without notice and to recover the remaining dues if the Defendant failed to revise the quantum of the Bank guarantee. 6. Under the terms of the licence, the Defendant was obliged to submit a revised Bank guarantee within two weeks from the end of the quarter for the period from October and December 2010. This the Defendant failed to do. On 27 January 2012 the Defendant had instituted its own suit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt stated to be lying with the society on the basis that Radio One Station has not bifurcated any such payment station-wise. It may be something that is claimed as consolidated figure qua all stations. However, by institution of such a suit itself and without anything more, it will not be possible for Radio One Station to resist the prayer for interim injunction made in the society's suit. At that stage, a statement was made on behalf of the Defendant that an amount of Rs.5,00,000/- would be deposited in Court within a period of two weeks. The learned Judge allowed that request and directed that for a period of two weeks, the broadcast by the Defendant would continue but without prejudice to the rights and contentions of the parties. 9. Subsequently, in the impugned order of the learned Single Judge dated 9 May 2012, the Court has come to the conclusion that: (i) The Defendant was liable to make the payment to the Plaintiff in terms of the licence that was issued in accordance with the order of the Copyright Board; (ii) The terms of the licence contemplated that the Plaintiff could terminate the licence if the Bank Guarantee was not revised; (iii) From the statement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guarantee. In the present case, it has been submitted that there was admittedly a failure on the part of the Defendant to submit a revised Bank guarantee and no payment was made between 2009 and 2012 when the order of the learned Single Judge was passed. On the other hand, on behalf of the Defendant, it has been urged that the Defendant seeks to claim an adjustment in respect of an excess amount paid to the Plaintiff by way of a set-off and that after the order of the learned Single Judge, payment has been made to the Plaintiff which has however not been accepted. Moreover, it has been submitted that as a result of the amendment which has been brought about by the Copyright (Amendment) Act, 2012, Section 31D has been inserted under which a provision has been made for the grant of a statutory licence for broadcasting of literary and musical works and sound recordings, subject to payment at such rate that may be fixed by the Copyright Board. 12. The rival submissions now fall for consideration. The entitlement, prima facie, which the Defendant claims to broadcast songs from the repertoire of the decided on 22 January 2010 Plaintiff traces itself to the compulsory licence that wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplainant for a radio station for consecutive two months, respondent herein shall be entitled to cancel the licence by giving notice of one month and recover the remaining dues from the bank guarantee; (g) A complainant may for one or more radio stations, by giving notice of one month and after making payment of all sums due, cancel the licence; (h) The validity of the licence granted by the Registrar of Copyright shall come to end on 30th September, 2020. The compulsory licence that was granted to the Defendant on 16 September 2010 incorporates the conditions which were prescribed by the Copyright Board. Under the terms of the licence, the Defendant was to furnish initially a Bank guarantee for Rs.10,000/- in favour of the Plaintiff for each Radio Station. The amount of the Bank guarantee was to be revised within two weeks after close of every quarter to such sum for which the Defendant was required to make payment of compensation for that quarter. Compensation was payable at the rate of 2% of the net advertisement earnings for each FM Radio Station accruing from the radio business. The licence was terminable and an express provision was introduced into the licence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to that order by the Defendant. Moreover, it could never have been open to the Defendant to make unilateral adjustments. 14. On these facts, prima facie, the learned Single Judge has justifiably come to the conclusion that in breach of the obligation that was cast upon the Defendant by the terms of the compulsory licence, the Defendant failed to revise the quantum of Bank guarantee for every quarter commencing from September to December 2010 and, as a matter of fact, for five quarters thereafter. The authority of the Defendant to broadcast songs from the repertoire of the Plaintiff traces its origin exclusively to the grant of the compulsory licence which was terminable for breach of the obligation to furnish a Bank guarantee. The licence has been terminated for breach. The ad-interim finding of the learned Single Judge that there was a breach on the part of the Defendant is borne out by the record and does not fall for interference in appeal. The contention of the Defendant is that on 3 September 2010, 23 September 2010 and 7 October 2010 the Defendant had sought a refund of the security deposit of Rs.86 lakhs and its bona fides, it is urged, could appear from this demand. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fendant to broadcast songs on the basis of the terms of the compulsory licence which has been validly terminated would amount to an infringement of the copyright of the Plaintiff. Moreover, admittedly the Plaintiff does not command a monopoly in respect of the entire market. The grant of an injunction may at worst be a matter of inconvenience but would not result in the closing down of the business of the Defendant. 17. Section 31D has been introduced into the Copyright Act, 1957 by the Copyright (Amendment) Act, 2012. Under sub-section (1) of Section 31D as now introduced, 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 the section. Under sub-section (2) of Section 31D, the broadcasting organisation is required to pay to the owner of rights in each work royalties in the manner and at the rate fixed by the Copyright Board. Subsection (8) of Section 31D stipulates that nothing in this section shall affect the operation of any licence issued or any agreement entered into before the commencem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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