Phonographic Performance Ltd. vs Dream Merchants, Events and Entertainment Group

Aravind Kumar, J.—Though this matter is listed for admission, by consent of learned advocates appearing for parties, it is taken up for final disposal. Sri Shivraj N. Arali also undertakes to appear for 2nd Respondent. His submission is placed on record.

This appeal by Plaintiff is directed against order dated 23.7.2011 passed by the XVIII Addl. City Civil Judge, Bangalore in OS No. 26226/2011 dismissing IA No. 1 and thereby refusing to grant temporary injunction.

Parties are referred to as per their rank before trial court for convenience.

Plaintiff filed a suit for permanent injunction to restrain the Defendants, their agents, representatives, servants etc., from communicating to the public by whatsoever means the sound recordings administered by the Plaintiffs by playing the cassettes or CD''s containing the sound recordings in their event/fashion show titled as "Bleaders Pride Bangalore Fashion Week 5th edition Winter Festive 2011 or otherwise organised by them between 28th July to 31st July 2011 at Hotel Crowne Plaza, Bangalore. It was contended in the suit that Plaintiff is a company registered under the Companies Act, 1956 and it is also registered under Copy Rights Act, 1957. The Government of India has also issued a certificate of registration in favour of the plantiff u/s 33 of the Copyright Act, 1957. As many as 179 music companies are members of Plaintiff-society. These members of the Plaintiff-society have entered into agreement with the Plaintiff-society assigning or authorizing their rights in the sound recordings in favour of Plaintiff-society. Under the provisions of Copyright Act the Plaintiff-society is entitled to issue license to any person or persons who want to use, enjoy, exploit the sound recording of its members either by way of broadcasting or communicating to the public.

4.1. It was contended that Plaintiff came to know about Defendant conducting a Fashion Show in the premises belonging to the second Defendant between 28.1.2010 and 31.1.2010 and in the said Fashion Show, Defendants were playing the sound recordings of the members of Plaintiff society without obtaining necessary licence from the Plaintiff and as such Plaintiff is said to have filed a suit in 05:469/2010 against the Defendants for a decree of declaration that communication by the Defendants, the sound recording of members of Plaintiff society by way of playing cassettes, CDs, Audio visuals containing the sound recording as illegal and for permanent injunction restraining Defendants from sound recordings of the members of the Plaintiff society without obtaining necessary licence and for other reliefs.

4.2. Defendants entered appearance in the said suit i.e., OS 469/1990 and filed their written statement and objections to the application filed seeking order of temporary injunction. Defendant denied the averments made in the plaint and on the basis of rival contentions raised, trial court formulated points for its consideration and by order dated 28.1.2010 rejected IA-II. However, it directed first Defendant to deposit a sum of Rs. 1,77,000/-in court and it also directed in the event of audience exceeding 500 persons and duration exceeding 2 hours everyday for 4 days, events that can be calculated and adjusted for future and held Defendants are liable to pay or refund or as the case may be. That shall be in case of communicating sound records of the companies registered with Plaintiff in the events to be performed in the premises of second Defendant organised by 1st Defendant. Aggrieved by the said order, Plaintiff preferred an appeal before this Court, in MFA No. 1125/2010 and this Court after hearing the arguments of the learned advocates appearing for the parties, disposed of the appeal by holding that event has already taken place between 28.1.2010 and 31.1.2010. This Court directed the trial court to enforce its interim order dated 28.1.2010 and also take further steps pursuant to the joint memo filed by both the parties on the same day. In the course of the order, this Court has observed as under:

In such circumstances it is the duty of the Court to prevent such infringement of Copyright Act. Allowing the infringement and then to compensate is not the object of the Act. In the instant case admittedly the Defendant has not obtained the necessary license from the Plaintiff-society, When the. Plaintiff-society has approached the Court much before the event had taken place, then it is the duty of the Court to protect the right of Plaintiff-society and to prevent the Defendant from violating the provisions of the Copyright Act. The Trial Court committed an illegality in holding that the Plaintiff-society can be compensated if there is violation of provisions of Copyright Act by the Defendant. This approach of the Trial Court resulted in failure of justice.

In the instant case the Trial Court committed an illegality in fixing certain rates as a tentative measure in the impugned order.Again this approach of the Trial Court is bad in law. There are no equitable circumstances in favour of first Defendant for exercise of such a discretion by the Trial Court. Therefore the impugned order is bad in law.

4.3. Plaintiff in the present suit (OS No. 26226/2011) contended that first Defendant is a event management company and second Defendant is incharge of the day to day management of the hotel carrying on its business from its principal office and they have organised a similar fashion show between 28th July to 31st July 2011 as organised earlier which involves the public performance of the Copy Righted Sound Recordings administered by the Plaintiff society in the said fashion show event now proposed to be held. It is contended that Defendants have not obtained the licence and it is seen from the public announcement that Defendants would be unauthorisedly using the sound recordings of Plaintiff-society without obtaining licence and as such, they have sought for an order of temporary injunction against the Defendants.

4.4. On appearance Defendants in the instant suit have resisted the claim of Plaintiff by filing a detailed written statement contending interalia that there is no cause of action for the suit and it is liable to be rejected under Order 7 Rule 11 CPC and it is hit by order 2 Rule 2 Code of Civil Procedure. It was also contended by the Defendant that e-mails sent to the Plaintiff, telephonic communication were made with the Plaintiff and to show Defendants are ready to make use of the licence to be given by the Plaintiff a cheque for Rs. 1,56,252/- was sent and same has been returned as refused and it is also contended that there is no balance of convenience in favour of the Plaintiff and accordingly prayed for dismissal of IA No. 1.

Trial court having heard the learned advocates appearing for the parties and on perusal of material available on record formulated following points for its consideration:

1) Whether the Plaintiff has made out a prima facie case to go for trial?

2) Whether the balance of convenience lies in favour of the Plaintiff?

3) Whether the Plaintiff will be put to irreparable loss and injury if injunction is refused?

All the three points formulated are answered in the negative by trial Court and consequently IA. No. 1 filed under Order 39 Rules 1 & 2 CPC by the Plaintiff came to be dismissed. It is against this order dated 28.7.2011 dismissing IA No. 1 by trial Court, Plaintiff is in appeal questioning the correctness and legality of the same.

Heard Sri Udaya Holla, learned Sr. counsel appearing for the Appellant and Sri Shivaraj N. Arali, learned Counsel appearing for Respondents.

It is the contention of learned Senior counsel appearing for the Appellants that in earlier round of litigation, this Court, has already given a categorical finding that Defendants ought to have obtained licence from the Plaintiff for the use of its musical recordings to be played at the fashion show event; there were no equitable circumstances in favour of the first Defendant; trial court had committed an illegality in holding that the Plaintiff - society can be compensated if there is violation of the Copy Rights Act by the Defendant, since allowing the infringement and then compensating is not the object of the Act and as such he contends that trial court ought to have granted an order of Temporary Injunction.

8.1. He would elaborate his submissions by contending that Fashion Show event is being conducted between 28th to 31st July 2011 and in the event of an order of temporary injunction is not granted, the very purpose of filing the suit as also filing of the application would get truncated. As such, he prays for allowing the appeal.

Per contra, Sri Shivaraj N. Arali appearing for Respondents would reiterate the contentions raised before trial court and submits that Defendant has repeatedly approached the Plaintiff for grant of licence by sending e-mails followed by telephonic calls as also offering through written communication and on account of refusal by the Plaintiff, it was left with no other option but to proceed with the conducting of the Fashion Show event. He would also contend that Plaintiffs refused to receive the letter/offer made by the Defendants and as such, a legal notice came to be issued on 21.7.2011 enclosing therewith a cheque for Rs. 1,55,562/- which according to the Defendant is the amount that would be payable for using the musical, recordings of which the Plaintiff is possessing Copy Rights and submits that even now, Defendants are ready and willing to pay the said amount and contends that an offer had been made by the Defendants before the trial court and they have deposited a cheque for the said amount and it is on record of the trial court and said offer is also made before this Court and as such he seeks for dismissal of the appeal.

9.1. He would elaborate his submission and contend that Plaintiffs stand with regard to payment by contending that amount is to be quantified on the basis of number of hours of event is erroneous and it is only number of hours when sound recordings of the Plaintiff are used that 1st Defendant would be liable to pay for the said duration only and as such, he contends that amount offered by the Defendants is in consonance with their stand and contends even otherwise it is a matter for quantification and Plaintiff would be at liberty to initiate appropriate proceedings or in the proceedings now pending before trial court. As such, he submits that there is no balance of convenience in favour of Plaintiff and prays for dismissal of the appeal.

In reply, the learned senior counsel appearing for Appellant would draw the attention of the court to the gazette notification dated 21.8.2009, particularly the tariff prescribed therein at Sl. No. 33A to contend that it is not for the number of hours when the sound recordings played in the event, the Defendant would be liable to pay the amount, it is the number of hours of the event itself where the sound recordings are used that the Defendants would be liable to pay. Whether it is the duration of the event or the duration of the sound recordings i.e., being played in the said event, which would be the basis for demanding the amount from the actual users is an issue which can be gone into by the trial court. It is the prima facie case and balance of convenience which has to be considered at the stage of granting an order of temporary injunction.

Between the same parties, in respect of the very same dispute relating to different period in the earlier round of litigation while considering these aspects namely prima facie case and balance of convenience and the right of the Plaintiff to claim the Copy Rights has been considered by this Court in MFA No. 1125/2010 and by order dated 5.1.2011 it has been held that it would be the duty of the court to prevent such infringement of copy rights. Admittedly, the said order has reached finality. In fact, first Defendant does not dispute that it should obtain licence from the Plaintiff for using the musical recordings of which the Plaintiff possesses copy right and it has even sent a legal notice on 21.7.2011 enclosing the licence fee for Rs. 1.55.562/-. This would clearly go to show that Plaintiff has a prima facie case and the balance of convenience is also in its favour. Admittedly Plaintiff society is protecting the copy rights of its members.

Be that as it may, now 1st Defendant has offered to pay a sum of Rs. 1,56,262/- which according to them is the amount they would be liable to pay to the Plaintiff. According to the Plaintiffs, amount that would be payable by the Defendant when calculated on the basis of duration of the event it would be Rs. 5,32,000/-. Admittedly, proposed Fashion show event has already commenced and it is in its midst. Hence, ensuring both parties to the lis are put to least hardship, this Court is of the considered view that if parties are put on terms, their interest can be safeguarded. Hence, it would be just equitable to direct the Defendants to be put or certain terms, so that Plaintiffs'' right would also get protected. In that view of the matter, I am of the considered view that issuance of an order of injunction at this juncture would not serve the purpose particularly when Defendants have claimed large scale arrangements have already been made and when a day has already lapsed and event is in its midst. Hence, this Court is not in favour of restraining the Defendants from conducting the event or stopping it which would also not be in the interest of Plaintiff inasmuch as stoppage of event would be a revenue loss to Plaintiff society and/or its members. Hence, it would be necessary to put 1st Defendant on following terms by allowing the event to be held:

(1) 1st Defendant shall pay to the Plaintiffs a sum of Rs. 1,56,252/- as admitted by them before the trial court as well as before this Court, by way of Demand Draft drawn in favour of Plaintiff society on or before 30.7.2011.

(2) 1st Defendant shall deposit a sum of Rs. 1 lakh in OS No. 26226/2011 by drawing a cheque in the name of the Registrar, City Civil Court, Bangalore City on or before 30.7.2011. On such deposit being made Registry shall deposit the said amount in a fixed deposit in the name of Registrar, City Civil Court, in any Nationalised Branch initially for a period of three months and shall ensure its validity till disposal of suit by extending/renewing from time to time.

(3) 1st Defendant shall file an affidavit of undertaking in OS No. 26226/2011 on or before 01.8.2011 undertaking to pay the balance amount of Rs. 2,75,748/- (Rs. 5,32.000/- - Rs. 2,56,255/-) to the Plaintiff, in the event of Plaintiff succeeding in the suit without driving them to file another suit for recovery of amount.

(4) All contentions raised by the parties are left open to be considered and adjudicated in the pending suit.

With these observations/conditions, appeal stands disposed off. No order as to costs.