Did you hear about the recent interesting case before the Delhi High Court, Al Hamd Tradenation vs. Phonographic Performance Limited, involving a compulsory license over sound recordings? Deliberating on the scope of Article 31(1) of the Copyright Act and whether unreasonable licensing fees can be regarded as withholding the work from the public, the Court found the petitioner’s case meritorious. This long-ish post discusses this 23-page order, highlighting its key ideas that may carry significance beyond the immediate case.
First things first, the facts of the case
The case is between an event organiser (the Petitioner) and Phonographic Performance Limited (PPL), which licenses sound recordings. The Petitioner contacted PPL for a license to play music at a corporate event for 50 people at Hotel Lutyens in Delhi.
PPL quoted a flat fee of ₹49,500 for events with 1–150 people. But the Petitioner offered to pay one-third of that amount, arguing that the event had only 50 attendees. PPL refused to lower the fee or issue the license.
Here’s one thing that I find bizarre and unable to understand: Para 2.5, of the order states that “While the petitioner was exploring the possibility of filing the compulsory license petition, the respondent filed a suit, i.e., CS(COMM) 564/2024, for infringement of copyright against the petitioner on 9th July, 2024.” The Petitioner then filed this case, claiming the license fee demanded by PPL was unreasonably high and seeking a compulsory license, along with determining the license fee.
However, how could PPL file a case before the infringement took place?
Look at the timelines: The petitioner’s event was on July 14, 2024. All the discussions between parties happened between April 29, 2024, and July 2, 2024. But no agreement was reached. PPL filed a case on July 9, 2024, five days before the actual date of the event.
When I checked the suit on the DHC website, I found that the first order is for 12th July but is not accessible. Upon clicking, the website shows this: “errorThis PDF document is encrypted and cannot be processed with FPDI”
I found this anomalous. However, I admit my lack of knowledge of procedural law. So, happy to be corrected if and where I am mistaken. Alright, let’s look at the analysis.
Discussion
Generally, every legal provision has a word or two that heave the utmost legal lode. Once an arguer anchors its meaning in their favour, the remaining interpretive game becomes manageable. In Section 31, these magical terms are refusal and withholding.
The case mainly concerns Section 31(1)(a) about compulsory licensing. Put simply, as the Court puts it in para 13, Section 31(1)(a), “provides that refusal to allow republishing, or performance in public by the owner of any copyrighted works, would attract the provisions of compulsory license. Upon an application for compulsory license, the Court shall give a reasonable opportunity of being heard to the owner of the copyright in the work, and after holding inquiry, if the Court is satisfied that the grounds for refusal are not reasonable, direct the Registrar of Copyrights to grant the applicant, a license to republish, perform the work in public, etc. This is subject to payment to the owner of the copyright, such compensation, and other terms and conditions, as the Court may determine” (author’s emphasis)
Apart from clarifying the oft-claimed balancing function of copyright law—that it aims to serve both authors and the audience—the Court made three key clarifications worth noting: 1.) what constitutes refusal and withholding of a work; 2.) can courts assess ‘reasonableness’ under Section 31(1)(a); 3.) the scope of Section 31(1)(a), specifically, the kind of works it covers.
Firstly, What Counts as Refusal or Withholding?
The Court clarified that a refusal under Section 31(1)(a) need not be a direct or explicit denial. A licence offered at unreasonable rates may itself amount to refusal. The respondent’s claim—that its works were not withheld since they were available under publicly posted tariffs—was thus dismissed. Notably, the Court emphasised that “there is an obligation to charge fair and reasonable licence rates”.
To quote the Court, “an artistic work, if made public, should be made available subject to reasonable terms. If the terms of the offer to provide copyrighted work, are unreasonable, then it may constitute refusal on part of the owner of copyright.” Here, it also noted that “in our constitutional scheme of statute, monopoly is not encouraged.”
Then, to check the unreasonableness, the Court compared PPL’s fee structure with that of Recorded Music Performance Ltd. (RMPL), a registered copyright society. RMPL’s rates were markedly more modest, at 22000 INR for a five-star hotel in a tier one metro city, which is the highest in this category. Requiring the petitioner to pay PPL’s higher fee for each event, the Court said, would not only place an undue burden on event organisers, but also on the general public.
Secondly, Can Courts Assess ‘Reasonableness’ Under 31(1)(a)?
The respondent contended that the Court cannot assess whether the license terms were reasonable under Section 31(a). ‘Tis because “reasonable” appears only in Section 31(b), which deals with broadcasts of copyrighted works or sound recordings. Thus, the Court can only examine the reasonableness of licensing terms in broadcast cases.
The Court cited Rule 8 of the Copyright Rules and Section 33A of the Act to affirm that the principle of making copyrighted works available at fair and reasonable licence rates, wherever such licensing is sought, is firmly enshrined in the overall Copyright framework.
Rule 8, which outlines the manner for determining compensation or royalties in cases of compulsory licences, identifies “the prevailing standards of royalties” as a relevant factor when assessing the publication of works or their performance in public. Similarly, Section 33A, which is germane to tariff schemes of copyright societies, discourages “any unreasonable element, anomaly, or inconsistency” in such tariffs and empowers aggrieved persons to seek judicial recourse.
Plus, the Court relied on Entertainment Network (India) Limited vs. Super Cassette Industries Limited, (2008) where the Supreme Court categorically stated that “Only because an offer is made for negotiation or an offer is made for grant of licence, the same per se may not be sufficient to arrive at a conclusion that the owner of the copyright has not withheld its work from public.”
Emphasing the words “per se”, the Court noted that an offer made on unreasonable terms could also amount to refusal. It, thus, held: “[i]f this Court finds that the terms offered by the respondent are not reasonable, this Court is not precluded from adjudicating on the said issue, and can proceed to determine the terms and conditions of the licence for the copyrighted work.”
Thirdly, Is Section 31(1)(a) Limited to Literary or Musical Works?
‘Tis interesting because only Section 31(1)(b) mentions sound recording, which is not invoked in the case. The court read all copyrighted works in this section by rejecting the respondent’s claim that Section 31(1)(a) is confined only to literary, dramatic, and musical works. Here, it undertook a conjoint reading of three terms mentioned in Section 31(1)(a): “work,” “publish,” and ‘Communication to the public’ to show that sound recordings are not excluded from the ambit of Section 31(1)(a).
This interpretive exercise showed that the term “work” under Section 2(y) explicitly includes “sound recordings; “publication” of a work under Section 3 means making the work available to the public, including by communicating it to the public; and “Communication to the public” in Section 2(ff) includes performance in public.
So, “performance in public” of a work, as mentioned in Section 31(1)(a), includes sound recordings. Accordingly, the matter would fall within the provision if such performance is refused, including by demanding an unreasonable high fee.
With this discussion, the Court found the petitioner’s case meritorious and ordered the parties to file their Affidavit of Evidence to determine the compensation, terms, and conditions of the licence. However, the matter remains subject to the outcome of the ongoing dispute in Special Leave Petition (C) No. 10977/2025, titled Phonographic Performance Limited v. Azure Hospitality Private Limited. See Kartik Sharma’s post on the pending case here.
Conclusion and Broader Implications
This order may seem, at first blush, to be another case about music licensing. But if we carefully ruminate on the Court’s remarks, its implications appear far-reaching. It clarifies that copyright owners cannot use market dominance to set arbitrary prices, especially when limiting the public’s access to copyrighted works.
While I largely agreed with the court’s interpretation, the order left me wondering whether the court should have been more circumspect while liberally invoking the idea of the public’s access to costly copyrighted works. This is because the case, after all, concerned a petitioner who is a business entity focused on serving its particular 50 clients, unlike making the work available to the public in general, as typically seen in the case of compulsory licensing. Should this not be emphasised and considered while applying compulsory emergency provisions? Because, as the court also said, compulsory license is an exception to the norm of freedom of contract? I would like to know readers’ views on this question.
Overall, it’s a valuable case that underscores the limits of copyright law. It can be particularly praised for discussing the Indian copyright framework in detail and emphasising the role of “prevailing prices” in determining a reasonable cost. This emphasis, in sum, can be helpful for future cases.
Finally, while the present PPL case deals with copyright licensing, rather than piracy as in the Sci-Hub case, I also wonder how this case’s broad observations can impact the ongoing issues the systemic problem of serial access where a handful of publishers hold overwhelming control over scholarly content, locking out a large section of the public from scientific knowledge. This PPL case can be, at least, a helpful citation for the SciHub case.
Okay, that’s it from my end.
Thanks to Swaraj Barooh for his help with the post.