Safiya Malik

The Delhi High Court has issued an interim injunction restraining a hospitality group from playing copyrighted sound recordings without prior authorization. The court found that the company engaged in unauthorized public performance of music, which constitutes a prima facie case of copyright infringement. The plaintiff, a licensing entity responsible for managing performance rights for multiple music labels, sought legal action against the defendant for allegedly using copyrighted sound recordings without a valid license.

The plaintiff, Phonographic Performance Limited (PPL), is a company registered under the Companies Act, 2013, engaged in issuing public performance licenses for sound recordings. The plaintiff claims to hold assignments for more than 400 music labels, with a catalog exceeding four million domestic and international sound recordings. These rights stem from assignment deeds executed under Section 18 of the Copyright Act, 1957. According to the plaintiff, these assignments entitle it to grant licenses for the public performance of sound recordings, and any unauthorized use of its repertoire amounts to infringement of its intellectual property rights.

The plaintiff states that its website lists its copyrighted works along with the applicable tariffs for their use in commercial establishments. It conducted investigations at the premises of the defendant, Azure Hospitality Private Limited, which operates multiple restaurants and bars across India, including ‘Mamagoto,’ ‘Dhaba,’ and ‘Sly Granny.’ Representatives of the plaintiff visited two locations operated by the defendant on July 13 and 14, 2022, and observed what they claim to be the unauthorized public performance of copyrighted sound recordings. Following these findings, the plaintiff issued a cease-and-desist notice on July 20, 2022. The plaintiff alleges that the defendant did not respond to the notice or obtain the necessary license.

Further inspections by the plaintiff’s representatives on October 12, 2022, reportedly revealed that the defendant continued to play sound recordings from the plaintiff’s catalog. Consequently, the plaintiff initiated legal proceedings seeking a permanent injunction to prevent further unauthorized use of its copyrighted works.

The defendant argued that the plaintiff had previously filed a commercial suit before the Bombay High Court against its operations and later withdrew the case without reserving the right to file a fresh suit. The defendant contended that the withdrawal barred the plaintiff from initiating the present litigation under Order XXIII Rule 1(4) of the Code of Civil Procedure. Additionally, the defendant stated that the plaintiff is not a registered copyright society and, therefore, lacks the legal authority to issue licenses or collect royalties for sound recordings under Section 33 of the Copyright Act. The defendant maintained that only a registered copyright society can engage in the business of licensing copyrighted works.

The court examined the provisions of the Copyright Act, particularly Sections 18, 30, 33, 34, and 51, to determine whether the plaintiff, as an assignee of public performance rights, could enforce its rights independently despite not being a registered copyright society. Regarding whether an assignee of copyright can grant licenses independently, the court observed that "the owner of the copyright, in his individual capacity, will continue to have the right to grant licenses in respect of his own works." It further noted that "Section 33(1) does not override the provisions of Section 30, which gives an absolute right to an owner of copyright to grant any interest in the copyrighted work by way of a license."

Addressing the defendant’s claim that only a registered copyright society could engage in the business of licensing and collecting royalties, the court recorded that "the role of a copyright society is to act as an agent for owners of copyright. It does not diminish or take away the rights of an owner to exploit his copyright directly." The judgment referred to prior decisions, including Novex Communication v. Lemon Tree Hotels and Phonographic Performance Ltd. v. Canvas Communication, which support the position that an owner or assignee can issue licenses without being a registered copyright society.

On the issue of the previously withdrawn case before the Bombay High Court, the court stated that "the earlier suit was based on a distinct cause of action, related to an anticipated infringement during a specific event period. The present suit is based on continuous and ongoing infringement." The court held that the withdrawal of the earlier suit did not bar the plaintiff from initiating fresh legal action under Order XXIII Rule 1(4) of the Code of Civil Procedure.

The court also examined whether the plaintiff had disclosed its licensing rates transparently. It observed that "the plaintiff has made its licensing tariffs publicly available on its website, ensuring transparency in the rates applicable for commercial establishments." The court further noted that the defendant did not deny playing copyrighted sound recordings in its establishments.

The judgment also addressed the commercial nature of playing copyrighted sound recordings in bars and restaurants. The court stated that "playing copyrighted sound recordings in commercial establishments enhances the customer experience and leads to increased footfall, making it a commercial activity requiring a license." The defendant cited a judgment from the Madras High Court in Novex Communications v. DXC Technology, which held that only a registered copyright society can engage in the business of licensing sound recordings. However, the court found that this interpretation had been rejected by the Bombay High Court in Novex Communications v. Trade Wings Hotel, which held that the Copyright Act does not restrict owners or assignees from issuing licenses independently. The court concurred with the Bombay High Court’s reasoning.

Based on these findings, the court issued an interim injunction against the defendants. It stated: "The defendants, its directors, partners or proprietors, licensees, assigns, officers, servants, agents, representatives, contractors, sister concerns and any other person working for and on behalf of the defendants are restrained from doing any act including exploitation/use of the plaintiff’s copyrighted works in any of its outlets till the final adjudication of the suit." The court also dismissed the defendant’s application seeking to vacate the interim injunction, holding that the plaintiff had established a prima facie case of copyright infringement and that allowing the defendant to continue playing the sound recordings without authorization would cause irreparable harm to the plaintiff.

Case Title: Phonographic Performance Limited v. Azure Hospitality Private Limited & Ors.

Neutral Citation:2025:DHC:1367

Case Number: CS(COMM) 714/2022

Bench: Justice Amit Bansal

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