Prentice Hall India Pvt. Ltd. vs Prentice Hall Inc. And Ors.
2002 Latest Caselaw 748 Del

JUDGMENT

A.K. Sikri, J.

1. Suit No.200/2000 is filed by the Prentice Hall India Pvt.Ltd. (hereinafter referred to as "Indian Company"). The main defendant is defendant No.1, namely, Prentice Hall Inc. which is a company incorporated in USA. The defendants 2 to 6 are the companies incorporated in different countries other than India which are associate companies of defendant No.1. The plaintiff has filed this suit for declaration of title, permanent injunction restraining infringement of copyright, breach of contract, rendition of accounts, delivery up etc.

2. It may be mentioned at the outset that the plaintiff was incorporated in India on 6.6.1963 as a joint venture with defendant No.1. The basis for filing the present suit is Agreement dated 7.9.1983 between the plaintiff and the defendant No.1 under which the plaintiff claims to have exclusive rights to print, reprint, translate, adapt, publish and sell in India and export to any other Asian or other countries low-cost standard text books and other books for schools, colleges, universities or other institutions or books for any other purpose, primarily relating to subjects of Science, Technology, Literature, Fine Arts, Economics, Law and any other subject in which copyrights of such books are owned or may be owned by the defendant No.1 or any of its subsidiary associate companies. While the plaintiff maintains that this Agreement is continuing as per which it is the plaintiff company only which has the aforesaid rights, the grievance of the plaintiff is that the defendant No.1 or its subsidiary associates, namely, defendants 2 to 6 are violating this agreement and have started printing, publishing and marketing the books in India on their own or through other parties. It is mentioned in para-22 of the plaint that as on the date of the filing of the suit 50 numbers of such publications were available in Indian market, the details of which are given in that para. These books and publications, according to the plaintiff have been re-printed without the consent of the plaintiff and, therefore, infringe the plaintiff's copyright granted to it by Agreement dated 7.9.1983.

3. The plaintiff has, therefore, prayed for the following reliefs in the suit:

(a) "a declaration in favor of the plaintiff to the effect that the plaintiff is the owner of copyright by virtue of being the exclusive licensee for the territory of India or Asian or other countries in relation to the publications of the defendants No.1 to 6 including titles listed in paragraph 22 of the plaint as well as other publications which Defendant No.1 to 6 or any other associate or subsidiary company of Prentice Hall Inc. are proprietors of at present or and may become proprietors of in the future as specified in the agreement dated 7th September 1983, and the publication or import or reprint by any of the defendants directly or indirectly within the specified territory would amount to an infringement of the plaintiff's exclusive rights.

(b) a permanent injunction restraining the defendants from printing, publishing, causing the printing or publishing or importing into India any publications that the plaintiff is the proprietor of amounting to an infringement of copyright of the plaintiffs in respect of titles listed in paragraph 22 listed in paragraph 22 of the plaint as well as titles that the defendant No.1 to 6 are the proprietors of and may become the proprietors of publications in future amounting to infringement.

(c) a permanent injunction restraining the defendants from publishing printing, causing the publishing or printing or importing into India or any Asian or other country any of the publications listed in paragraph 22 of the plaint as well as any other publication that the defendant nos.1 to 6 are proprietors of thereby amounting to an breach of the terms of the agreement dated 7th September,1983.

(d) a delivery up of all the infringing copies of publications that violate the copyright of the plaintiff thereon as well as amount to a breach of the terms of the agreement dated 7th September,1983.

(e) an order for rendition of accounts of profits illegally earned by the defendants and an order be passed in the amount of the profits so earned.

(f) an order for costs in the proceedings.

(g) any further orders as this Hon'ble Court may deem fit and proper under the facts and circumstances of the case".

4. Along with the plaint the plaintiff has also filed application under Order XXXIX Rules 1 and 2 read with Section 151 CPC (IA.992/2000) seeking declaration of title and praying for ad-interim injunction restraining infringement of copyright and breach of contract etc.

5. The defendant No.1 has contested this suit by filing written statement and reply to this application. The defendants 2 to 6 have filed applications under Order I Rule 10 CPC alleging that they are unnecessarily imp leaded as parties in this suit and that there is no cause of action against these defendants. Prayer made in these applications, therefore, is to delete them from the array of parties. In this respect IA.2012/2000 is filed by defendants 2,5 and 6, IA.2706/2000 is filed by defendant No.4 and IA.2707/2000 is filed by defendant No.3.

6. Suit No.716/2000 is filed by Prentice Hall Inc which is defendant No.1 in Suit No.200/2000. This suit is filed against Indian Company stating that the Indian Company has nothing to do with various publications of the Prentice Hall Inc and its subsidiary associates in India and further that they have right to make such publications in India. The following reliefs are prayed in this suit:

(a) "a decree of declaration declaring that the defendant is not the `exclusive licensee' of the plaintiff in any book in which the plaintiff has a copyright;

(b) a decree of declaration declaring that the Agreement dated 7th September,1983 between the plaintiff and the defendant by itself does not grant any `exclusive license' and/or license and/or right in any book in which the plaintiff has a copyright;

In the alternative a decree of declaration declaring that the Agreement dated 7th September 1983 is unenforceable and/or opposed to public policy and/or null and void;

(c) a decree of mandatory injunction commanding and directing the defendant from taking any action or alleging or claiming rights on the basis of the Agreement dated 7th September,1983 or from holding out that it has exclusive license and/or license pertaining to any copyright in any book other than those books over which the defendant has a separate, independent and valid enforceable agreement/license in operation;

 

                     (d)  a   decree  for    perpetual   injunction
                         prohibiting    and     restraining    the

defendants from printing, reprinting, publishing, translating, adapting, importing / exporting any book over which the plaintiff has a copyright including the books mentioned in Annexure-F hereto other than the books over which the defendant has a separate, independent and valid enforceable agreement/license in operation;

(e) pass appropriate orders or directions commanding and directing the defendants to deliver up to the plaintiff the infringing copies of all books which violate the copyright of the plaintiff;

(f) a decree for rendition of accounts directing the defendants to render accounts relating to all transactions carried out by it pertaining to books in which the plaintiff has a copyright and on such rendition of accounts pass a decree for such sums of money to which the plaintiff may be entitled to, and also award to the plaintiff damages;

(g) costs of the suit be awarded to the plaintiff;

(h) pass such other or further orders or grant such reliefs as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case".

7. Along with this suit Prentice Hall Inc. has filed IA.3524/2000 being an application under Order XXXIX Rules 1 and 2 read with Section 151 CPC seeking declaration of title and restraining infringement of copyright by the Indian Company which has filed its written statement and reply to this application contesting the suit. The Indian Company has also filed IA.4432/2000 which is an application under Section 10 of Code of Civil Procedure with a prayer that suit proceedings in Suit No.716/2000 be stayed as the two suits substantially and materially involve the same issues between the same parties and the suit instituted by Indian Company (S.No.200/2000) is prior in point of time. Contesting this application Prentice Hall Inc. has on the other hand filed an application under Section 151 of CPC (IA.8186/2000) for consolidation of two suits.

8. Thus both the suits and all the applications are inter related. Thus all the applications were heard together and are being disposed of by this common order.

9. Before dealing with these applications, let us scan through the admitted facts in some more detail. Prentice Hall Inc. (hereinafter referred to as `defendant No.1') is a publishing company. Prentice Hall India Pvt.Ltd. (hereinafter referred to as `plaintiff') is also a publishing company which was incorporated in 1963 as a joint venture with defendant No.1 as already pointed out above. The plaintiff has been involved with the printing, publishing and marketing etc. of such publications since 1963 either bearing the Prentice Hall India trademark or the imprint Eastern Economy Editions. The plaintiff claims that since the books are primarily meant for students, it has always tried to keep the price of the publications reasonable and also contributed in a large way the promotion of the publications. From 1963 the control of the plaintiff was with the Laroia family who were the majority Indian shareholders. However, in the year 1983 they expressed their intention to withdraw from the company. At that point of time, defendant No.1 approached several potential buyers to purchase Indian shares earlier held by Laroia family. Laws did not permit defendant No.1 to hold these shares. In this context defendant No.1 persuaded Mr.Asoke Ghosh, the current Chairman and Managing Director of the Plaintiff, who was then a minority share holder, to purchase these shares. He was assured continuous support of defendant No.1 in running of the plaintiff company. In these circumstances Mr.Asoke Ghosh purchased the shares held by the Laroia family. He holds 67.7% of the total share holding.

10. It may be mentioned that when the plaintiff was formed in the year 1963, the Government of India initially approved the collaboration for a ten year period for the joint venture which was renewed in the year 1973 for another ten years. When the extended term about to expire in the year 1983 there were certain changes in the Government policy in relation to remittance of royalty. Therefore, instead of renewal of collaboration the defendant No.1 sought and obtained the permission of the Reserve Bank of India for continuing their equity participation in the plaintiff company which is 31.25% at present. Following the discussions between the plaintiff and the defendant No.1, the two parties also signed an Agreement dated 7.9.1983. It is in fact this Agreement, the interpretation of which holds the scales. This Agreement is the foundation of the case filed by the plaintiff on the basis of which the plaintiff claims, as already pointed out above, exclusive rights to print, reprint, translate, adapt, publish and sell in India and export to any other Asian or other countries low-cost standard text books and other books for schools, colleges, universities or other institutions or books for any other purpose, primarily relating to subjects of Science, Technology, Literature, Fine Arts, Economics, Law and any other subject in which defendant No.1 or any of its subsidiaries or an associate company owns or may own the copyright. We shall revert to this Agreement after completing the sequence of events.

11. It is further case of the plaintiff that under this Agreement the plaintiff has been reprinting, translating and importing the books of the defendant No.1 into India and selling the same. This arrangement continued smoothly till 1997 when there was change in the ownership of the defendant No.1 company by Simon and Schuster International. It may not be necessary to state in detail the various discussions and correspondence which took place between the parties thereafter. Suffice is to state that the defendant No.1 now wanted fresh arrangement on new terms with the plaintiff. The plaintiff wanted to stick to the original arrangement on same terms. Therefore, new arrangement between the parties could not and did not go through.

12. The plaintiff in July/August,1999 came to know that the defendant No.1 was violating and infringing the Agreement dated 7.9.1983. In August,1999 it also came across a price list of June,1999 for Paperback Editions of defendant No.1. The plaintiff objected to the same by letter dated 25.8.1999. Meetings were held between the parties which again did not bring out the desired results. In November,1999 the plaintiff found that the defendants have imported certain titles into the Indian market and termed the same as breach of Agreement dated 7.9.1983. According to the plaintiff till the filing of the suit as much as 50 such titles are available in Indian market. This the plaintiff treats as blatant violation of Agreement dated 7.9.1983 and consequently Suit No.200//2000 was filed in January,2000.

13. At this stage, it would be appropriate to reproduce the Agreement dated 7.9.1983 in extenso: This Agreement made this 7th day of September,1983 between PRENTICE-HALL INC., a corporation organized and existing under the laws of the State of Delaware, U.S.A.

(hereinafter referred to as the "Foreign Company" which expression shall, unless repugnant to the context, include its successors) of the one part and PRENTICE-HALL OF INDIA PRIVATE LIMITED, a company with limited liability incorporated under the provisions of the Indian Companies Act, 1956 and having its registered office at M-97, Aggarwal Buildings, Connaught Circus, New Delhi-1, (hereinafter referred to as "the Publisher" which expression shall, unless repugnant to the context, include its successors) of the other part.

14. The Parties Hereto Agree As Follows:

1. The Foreign Company hereby grants to the publisher exclusive rights to print, reprint, publish, translate, adapt, import and sell in India and export to any other Asian or other countries standard textbooks and other books for schools, colleges, universities or other institutions or books for any other purpose, relating to subjects of Science, Technology, Literature, Fine Arts, Economics, Law and any other subjects, in respect of which the Foreign Company or any of its subsidiaries or an associate company owns or may own the copyright (all such books are hereinafter referred to as "the Licensed Books").

2. The Publisher shall for every Licensed book reprinted by it in India pay to the Foreign Company, or its subsidiary or associate company, as the case may be, royalty at the rate of ten per cent (10%) of the Indian list price. The payments shall be in U.S. dollars.

3. The Publisher shall pay to the Foreign Company royalty, in respect of the Licensed Books sold in a calendar year ending on 31st December, calculated according to para 2 above, on or before the 31st December of the succeeding year. Every such payment shall be accompanied with an account of each Licensed Book during the relevant year.

4. In order to facilitate remittance of royalty and record clearly the territories assigned to the Publisher, the Foreign Company will issue individual agreements for each Licensed book in respect of which rights are granted to the Publisher.

5. The Foreign Company hereby grants exclusive rights to the publisher to import and sell books, which have been or may be published by the Foreign Company or any of its subsidiary or associate companies, in India and outside India.

The Publisher may import such books itself or through its nominee or other importers. All orders to be placed or forwarded by the Publisher shall be in the prescribed sales order forms.

6. The Foreign Company shall render all assistance and support to the Publisher in exporting books produced by the Publisher and guarantees the Publisher to cause export of a minimum of ten per cent (10%) of its annual production.

7. The Foreign Company shall be entitled to terminate this agreement (a) if the Publisher commits breach of any term or condition of this agreement and fails to remedy the breach within thirty (30) days of receipt of written notice from the Foreign Company, or (b) If the publisher goes into liquidation (except for the purpose of amalgamation or reconstruction) or is declared insolvent.

The termination shall be without prejudice to any claims which the Foreign Company may have against the publisher.

8. This agreement shall be governed and interpreted in all respects by the laws of India.

In Witness whereof, the parties hereto have caused this Agreement to be executed on the day and year first above written through their duly authorised representatives.

PRENTICE-HALL INC. PRENTICE-HALL OF INDIA Through: MR. LEO N. ALBERT PRIVATE LIMITED Through: MR. ASOKE K.GHOSH VICE PRESIDENT MANAGING DIRECtor

15. Interpreting the aforesaid Agreement, Mr.Sudhir Chandra, learned senior counsel appearing for the plaintiff submitted that Clause-1 of the Agreement confers upon the plaintiff exclusive copyright not only in presenti but in respect of future publications as well. This is clear from the opening sentence of Clause-1 which uses the expression "hereby grants". What is granted are the "exclusive rights" which include rights to print, publish, import and sell in India the publications in which the defendant No.1 company and its subsidiary associates have the copyright. Such an exclusive right is in respect of future publications also as this clause not only confers such a copyright in respect of the publications which the defendant-1 "owns" but also "may own" i.e. which they may acquire in future. It was further submitted that the copyright is not only in respect of publications of defendant No.1 but also in respect of those publications of which subsidiary associate companies of defendant No.1 own or may own the copyright. His submission was that for the purpose of ascertaining the rights of the plaintiff under this Agreement it is Clause-1 only which is to be looked into. Rest of the clauses deal with other incidental aspects.

16. The submission of Mr.Sudhir Chandra was that as per Clause-2 the plaintiff company was to give royalty at the rate of 10% of the Indian list price of a particular publication which is reprinted in India and the arrangement contemplated in Clause-4 was only to facilitate remittance of royalty. Another purpose for entering into individual Agreement was to record the territories assigned to the publisher i.e. those territories where the plaintiff could export the publication printed by it. His submission was that insofar as sale of such a publication in India is concerned, the plaintiff enjoyed exclusive rights. The plaintiff was also permitted to export the publication to any other Asian or other countries and particulars of these countries in respect of each publication were to be stated by individual Agreement to be entered into under Clause-4.

17. The learned counsel further submitted that as per Clause-7, the Agreement could be terminated only on the happening of any of the two eventualities mentioned therein, namely, (i) if the plaintiff committed breach of any term or condition of the Agreement and failed to remedy the breach within 30 days of receipt of written notice from the defendant No.1 or (ii) if the publisher went into liquidation or was declared insolvent. Otherwise, according to him, such an Agreement was not terminable.

18. Referring to various provisions of the Copyright Act, learned senior counsel argued that grant of such an exclusive license/assignment by defendant No.1 in favor of the plaintiff, not only in respect of publications of defendant No.1 at the time of entering into an Agreement but even in respect of those publications wherein defendants acquire copyright in future, was permissible under the law. In support of this proposition, relied upon Section-2(j), Section-19(2)&(5), Sections-18, 22, 30, 30(A), 51(a)(i) and 54(a). He also referred to and relied upon the judgment of this Court in the case of Penguin Books Ltd. England Vs. M/s.India Book Distributors and others in support of his plea that the plaintiff had satisfied all the conditions for grant of temporary injunction and the litmus test, namely, comparative strength of the cases of the respective parties.

19. Mr.Shanti Bhushan, learned senior counsel argued on behalf of defendant No.1 and Mr.V.P.Singh, learned senior counsel argued for defendants 2 to 6 pressed applications under Order I Rule 10 CPC.

20. The main defenses of defendant No.1, as objected by Mr.Shanti Bhushan can be summarised as under:

Agreement dated 7.9.1983 was only a General Agreement which did not confer any specific right in favor of the plaintiff. As per this Agreement although the defendant No.1 granted exclusive rights of the nature specified therein to the plaintiff in respect of its publication as well as the publications of its subsidiary/associate companies, this clause had to be interpreted narrowly keeping in view other clauses of the Agreement. Much emphasis was laid on Clause-4 of the Agreement as per which individual agreements were required to be entered into for each licensed book in respect of which rights were granted to the plaintiff. It was submitted that it is only when an individual Agreement is arrived at in respect of a particular book to be licensed to the plaintiff and terms and conditions on which rights are to be granted to the plaintiff are stated in such an Agreement, the plaintiff could not be said to have acquired any right over any publications of the defendant No.1 or its associate/subsidiary companies. Otherwise, it was submitted, such an Agreement was not workable at all inasmuch as unless the essential conditions are agreed upon between the parties on the basis of which the plaintiff could allow to print/publish, import and sell the books, the plaintiff could not have acquired any right. Thus Clause-1 of the Agreement in itself was not workable at all in the absence of individual agreements. In order to support this contention the individual agreement in respect of various publications were referred to showing that material and significant conditions were in fact agreed upon between the parties by executing such agreements. Therefore, Mr.Shanti Bhushan would urge, Clause-1 of the Agreement would not by itself give any right to the plaintiff and in case interpretation suggested by the plaintiff to be accepted, it would become difficult to work out such an Agreement as many legal problems could be created. According to him 1983 Agreement was only a general arrangement on the basis of which specific agreements were to be executed. This General Agreement was not enforceable and what was enforceable was the specific agreement arrived at between the parties in terms of Clause-4.

21. It was also submitted that Agreement dated 7.9.1983 was without consideration. Read in the manner, plaintiff would also make this Agreement against public policy and in violation of the Section 23 as also Section 27 of the Contract Act. It is Clause-4 which was required to make Clause-1 operative otherwise it was understood that Clause-1 would not operate unless the parties were able to agree on the terms and conditions on which individual agreement was to be signed i.e. how agreement was understood and worked out. According to learned counsel only two consequences were possible, namely, (1) either Agreement dated 7.9.1983 was not a concluded contract; Clause-1 being vague and not capable of being operated or (2) this Agreement was a conditional Agreement; it was an agreement to enter into an agreement to arrive at such individual agreement in respect of each book and unless such an individual agreement is arrived at, no enforceable contract came into existence.

22. Concluding his submissions, learned counsel submitted that insofar as the application of granting temporary injunction is concerned, as the issue raised is a vexed question, at this stage while taking prima facie view, disputed facts should be kept aside and the matter be proceeded on the basis of admitted facts. The plaintiff's copyright in the books in which the defendant No.1 or its associate/subsidary companies, namely, the defendants 2 to 6 have copyright was in dispute. On the other hand, title of the defendant No.1 in such books was not at all in dispute. As far as individual agreements were concerned, they had ceased to operate. There was no individual agreement signed with the plaintiff in respect of any other publication. The defendants should, therefore, be permitted to continue their operations in the manner they had sorted and contention regarding maintaining the accounts etc. by the defendants could be imposed at the most. The learned counsel in support of this submission relied upon the case of Colgate Palmolive (India) Ltd. Vs. Hindustan Lever Ltd. . He also referred to various judgments on other submissions made by him and noted above including following cases:

A SCHROEDER MUSIC PUBLISHING CO.LTD. VS. MACAULAY, [1974] 3 All ER 616 (pages 621 & 622)

INSTONE VS. A SCHROEDER MUSIC PUBLISHING CO.LTD.,[1974] 1 All ER 171

SHAMJIBHAI VS. JAGOO HEMCHAND AND OTHERS, AIR (39) 1952 Nagpur 220 (Paras 36 to 42)

CHATTURBHUJ VITHALDAS JASANI VS. MORESHWAR PARASHRAM AND OTHERS,

RICKMERS VERWALTUNG GMBH VS. INDIAN OIL CORPORATION LTD.,

AMERICAN JURISPRUDENCE SECOND EDITION Vol.17 359 (Para.23)

WINN VS. BULL, 1877 Ch.D. Page 29 at pages 30 & 32

CHILLINGWORTH VS. ESCHE, 1922 Ch.D. Page 97 at pages 103-106

23. Mr.V.P.Singh, learned senior counsel appearing for defendants 2 to 6 submitted that Agreement dated 7.9.1983 was admittedly between the plaintiff and the defendant No.1 and defendants 2 to 6 were not parties to that Agreement. The Defendant No.1 could not bind the defendants 2 to 6 nor the plaintiff could force its alleged rights under this Agreement against defendants 2 to 6 who were not parties. It was also submitted that the defendant No.6 was no more in existence; all the defendants were not associated with the defendant No.1; para-4 of the plaint clearly demonstrated that the plaintiff had no knowledge about the defendants and thus there was no cause of action against these defendants.

24. Mr.Sudhir Chandra, learned senior counsel for the plaintiff rebutted the aforesaid submissions of both the counsel for the defendants. At the outset he submitted that the plaintiff was not claiming any copyright in respect of the publications in which the defendant No.1 was not having a copyright and further that the plaintiff was confining its claim to enjoy the copyright rights in India only and that too against the defendant No.1 alone. He further submitted that the reason for impleading defendants 2 to 6 as defendants was because of the fact that they were operating in India in respect of publications in which defendant No.1 had the copyright. It was submitted that the plaintiff's grievance was that in violation of Agreement dated 7.9.1983 the defendant No.1 had assigned the copyright to defendants 2 to 6 and that too in respect of Indian territory which defendants had no right to do. Mr.Sudhir Chandra reiterated the arguments submitted in the first instance and replied to various objections raised by the learned counsel for the defendants. He again emphasised that rights were granted by the defendant No.1 in favor of the plaintiff vide Agreement dated 7.9.1983 which was a concluded contract. The Agreement was for valid consideration as royalty was agreed to be paid as per Clause-2. He underlined the submission that the individual Agreement as contemplated in Clause-4 was only for the purpose of payment of royalty and defining foreign territory. If individual agreement was required for each book then the 1983 Agreement was totally unnecessary. He tried to distinguish the various judgments cited by the learned counsel for the defendant No.1 and refuted its contentions that such an Agreement was against public policy. By explaining what the term `public policy' would mean and quoting from `Law of Contract' by Pollock and Mulla (Pages 348, 353 and 354) he highlighted that the entire argument on public policy was fallacious and no such public policy was involved. He also referred to the case of Renusagar Power Co.Ltd. Vs. General Electric Co. and the case of Cadila Health Care Ltd. Vs. Cadila Pharmaceuticals Ltd. .

25. I have given my utmost consideration to the submissions made by all the parties.

26. The starting point of the case is the Agreement dated 7.9.1983 executed between the plaintiff and the defendant No.1. Mutual rights and obligation of the respective parties under this Agreement would determine further course of action. Where as it is the case of the plaintiff that as per this Agreement the plaintiff company is granted exclusive copyright not only in respect of existing publication of the defendant No.1 at the time of signing of the Agreement but it also included future publications as well, the stand of the defendant No.1 is that this Agreement was only an Agreement to enter into further Agreement and in the absence of such an Agreement as contemplated in Para-4 of this Agreement relating to particular book, Agreement dated 7.9.1983 could not be enforced.

27. Clause-1 of Agreement dated 7.9.1983 very categorically and in no uncertain terms stipulates that the defendant No.1 "hereby grants" to the plaintiff "exclusive rights to print, reprint, publish, translate, adapt, publish and sell in India and export the books of which defendant No.1 owns the copyright". The nature of type of such books is also spelt in this clause. It also mentions that these books include not only those in respect of which defendant No.1 owns the copyright but also its subsidiary associate companies "own or may own the copyright". These books are referred to as "the licensed books". Thus if Clause-1 is to be interpreted in isolation, it appears that what was intended was that the plaintiff be granted by the defendant No.1 exclusive rights to print, reprint, publish etc. the books in which the defendant No.1 or its associate companies own the copyright or may own the copyright. The defendant no.1 has also permitted the plaintiff to sell in India and export to any other Asian or other countries these books. The consideration for giving such grant is specified in Clause-2 of the Agreement as per which royalty at the rate of 10% of the Indian list price is to be made by the plaintiff to the defendant no.1 although such a payment is to be made in US Dollars. Reading of this Agreement up to this stage admits of no doubts about the grant of such exclusive right by the defendant No.1 in favor of the plaintiff.

28. However, taking help of Clause-4 of this Agreement, the defendants argued that Agreement dated 7.9.1983 would be only an Agreement to enter into further agreement and till such an agreement as contemplated under Clause-4 is entered into between the parties, this Agreement dated 7.9.1983 would not convey any rights in favor of the plaintiff and could not become enforceable. In order to appreciate this contention, it would be apposite to reproduce Clause-4 once again:

4. In order to facilitate remittance of royalty and record clearly the territories assigned to the Publisher, the Foreign Company will issue individual agreements for each Licensed book in respect of which rights are granted to the Publisher.

29. No doubt Clause-4 talks of entering into individual agreements for each licensed book in respect of which rights are granted to the plaintiff. However, the question which falls for consideration is as to what would be the nature of such an agreement as per Clause 4? According to the plaintiff this agreement as contemplated under Clause-4 is only to achieve twin purposes, viz., (a) to facilitate remittance of royalty and (b) to record clearly the territories assigned to the plaintiff. Otherwise this Clause-4 also states that such individual agreements would be "for each licensed book in respect of which rights are granted to the publisher" i.e. the plaintiff. This aspect is, however, elaborately dealt with at a later stage.

30. At this stage let us examine the validity of alleged grant given vide Agreement dated 7.9.1983 from the legal point of view i.e. the position as contained in the Copyright Act,1957. Section-2(j) of the Copyright Act defines "exclusive license" and recognises that such a license can be granted. It reads thus:

"2(j) "exclusive license" means a license which confers on the licensee or on the licensee and persons authorised by him, to the exclusion of all other persons (including the owner of the copyright) any right comprised in the copyright in a work, and "exclusive licensee" shall be construed accordingly".

31. Section-30 of the Act permits the owner of the copyright to give such a license. This Section is in the following words:

"30. licenses by owners of copyright.

The owner of the copyright in any existing work of the prospective owner of the copyright in any future work may grant any interest in the right by license in writing signed by him or by his duly authorised agent:

Provided that in the case of a license relating to copyright in any future work, the license shall take effect only when the work comes into existence.

Explanation.-Where a person to whom a license relating to copyright in any future work is granted under this section dies before the work comes into existence, his legal representatives shall, in the absence of any provision to the contrary in the license, be entitled to the benefit of the license".

32. Section-18 permits assignment of copyright by the owner not only in existing work but also by the prospective owner of the copyright in a future work.

Section-19 deals with the mode of assignment and Section-19(A) with disputes with respect to assignment of copyright. Thus going by these provisions it cannot be said that grant of exclusive license in the works owned by the defendant No.1 at that time or in its future works was in any case barred. On the contrary it is specifically allowed by the aforesaid provisions.

33. It may be stated at this stage that during the course of arguments, learned counsel for the plaintiff submitted that he was confining his relief in the suit in respect of those titles only wherein the ownership vests with defendant No.1 and was excluding defendants 2 to 5 and further that his claim was restricted to the printing publication and sale of these titles in India only and was not extended to territories outside India.

34. Mr.Shanti Bhushan had tried to argue that there could not have been a grant of assignment in respect of future publications of defendant No.1 inasmuch as, as per Section-30 it is only "the prospective owner" who could give such a license. It is the author of the book who would be owner of the copyright unless he has assigned the same in favor of the publisher. It could not be predicted at that time that a particular book published by defendant No.1 in future whether the copyright thereof would be with the author or be given to the publisher i.e. the defendant No.1. However, this argument need not detain us inasmuch as, Clause-1 of Agreement dated 7.9.1983 talks of rights only in respect of those publications which are owned or may be owned by defendant No.1.

35. The next attempt of the learned counsel for the defendant No.1 was to have it declared that such an Agreement is not valid under the law. For this he submitted that Agreement was against public policy, without consideration, and also in restraint of trade and thus hit by Section-27 of the Contract Act.

36. Thus It is now time to deal with the issue as to whether Agreement is opposed to public policy.

37. Learned counsel for the defendants, in support of this submission sought to raise an argument that if the Agreement is interpreted in the manner the plaintiff is interpreting then it would be against public policy. In support of this submission learned counsel relied upon Section 19(2) to(5) and Section-30 of the Copyright Act. To appreciate this argument, one may have to look at Section 19 which reads as under:

"19. Mode of assignment. (1) No assignment of the copyright in any work shall be valid unless it is in writing signed by the assignor or by his duly authorised agent.

(2) The assignment of copyright in any work shall identify such work, and shall specify the rights assigned and the duration and territorial extent of such assignment.

(3) The assignment of copyright in any work shall also specify the amount of royalty payable, if any, to the author or his legal heirs during the currency of the assignment and the assignment shall be subject to revision, extension or termination on terms mutually agreed upon by the parties.

(4) Where the assignee does not exercise the rights assigned to him under any of the other sub-sections of this section within period of one year from the date of assignment, the assignment in respect of such rights shall be deemed to have lapsed after the expiry of the said period unless otherwise specified in the assignment.

(5) If the period of assignment is not stated, it shall be deemed to be five years from the date of assignment.

(6) If the territorial extent of assignment of the rights is not specified, it shall be presumed to extend within India.

(7) Nothing in sub-section (2) or sub-section (3) or sub-section (4) or sub-section (5) or sub-section (6) shall be applicable to assignments made before the coming into force of the Copyright (Amendment) Act,1994".

38. The submission of learned counsel was that as per Sub-Section-2 the assignment of copyright has to identify the work and specify rights assigned as well as duration and territorial extent of such assignment and further that where the assignee does not exercise his right assigned to him within the period of one year from the date of assignment, assignment in respect of such rights is deemed to have elapsed after the expiry of this period. Sub-Section-5 mandates that the period of assignment is five year only if the period is not stated in the agreement. Relying on these provisions it was argued that these provisions were introduced to ensure that all terms and conditions on which the assignment is made are specifically stated including identification of work rights which are assigned, duration and territorial extent of such assignment, amount of royalty payable etc. Although Section 19 as amended came into operation after the Agreement dated 7.9.1983 entered into between the parties, it was sought to argue that since it was based on public policy, the principles which were incorporated in this Section based on public policy should be applied in the present case to consider the issue of the Agreement being against public policy.

39. An agreement which is contrary to or opposed to public policy shall be void as per provisions contained in Section 23 of the Contract Act. However, the term "public policy" is not defined in the Contract Act. By various judicial pronouncements attempt is made to explain this term. It is declared by the Courts in such pronouncements that from the very nature of things the expression "public policy" or "opposed to public policy" are incapable of precise definition. In Central Inland Water Transport Corpn. Vs. Brojonath Ganguly the Supreme Court held that public policy is not the policy of a particular Government. It connotes some matter which concerns the public good and the public interest. The principles governing public policy are capable, on proper occasion, of expansion or modification. If there is no head of public policy which covers a case, then the court must in consonance with public conscience and in keeping with public good and public interest declare practices which were considered normal at one time but have become obnoxious and oppressive to public conscience, to be opposed to public policy. "Above all, in deciding any case which may not be covered by authority our courts have before them the beacon light of the Preamble to the Constitution. Lacking precedent, the Court can always be guided by that light and the principles underlying the Fundamental Rights and the Directive Principles enshrined in our Constitution".

40. The term `public policy' is also defined as the principle which declares that no man can lawfully do that which has a tendency to be injurious to the public welfare. Under this principle freedom for contract or private dealings is restricted by law for the good of the community. The very meaning of public policy is in the interest of persons other than the parties.

41. One has to keep in mind the aforesaid perception of public policy while dealing with the present case.

42. To my mind, the argument on `public policy' on the facts of the present case is without any force. The Agreement in question is merely an Agreement between two parties. The defendant No.1 has assigned certain copyrights in favor of the plaintiff. Therefore, there is no public policy involved in the sense understood in legal parlance or what is judicially delineated while interpreting Section 23 of the Indian Contract Act. There is no obligation to public involved here. It does not appear to common sense as to how such an Agreement is opposed to public policy whereby copyrights are assigned to another party. As already noted above the copyright itself not only permits assignment of copyright in the works in present time but in future works also. When such an assignment is permissible even under the Copyrights Act, how an agreement in question is violative of public policy, is beyond comprehension.

43. In Rattanchand Hirachand v. Askar Nawaz Jung & Ors. , Sawant J. speaking for the Court enumerated as to what could be against the public policy in the following words:

"A contract which has tendency to injure public interest or public welfare is one against public policy. What constitutes an injury to public interest or welfare would depend upon the times and the climes. The social milieu in which the contract is sought to be enforced would decide the factum, the nature and the degree of the injury. It is contrary to the concept of public policy to contend that it is immutable, since it must vary with the varying needs of the society.

These values may sometimes get incorporated in the legislation, but sometimes they may not. The Legislature often fails to keep pace with the changing needs and values nor is it realistic to expect that it will have provided for all contingencies and eventualities. It is, therefore, not only necessary but obligatory on the courts to step in to fill the lacuna".

44. That apart admittedly provisions of Section 19 came into existence only in the year 1984 much after the Agreement in question was entered into between the parties.

45. Prima facie I also do not agree with the contention that the Agreement dated 7.9.1983 is in restraint of trade, or without consideration. However, it is not necessary to deal with these aspects in detail at this stage and particularly because of the view I am taking.

46. However, if the matter was to be decided on the basis of this agreement alone, it would not have posed any problem. But the fact remains that the agreement has been worked out for number of years and in the process the parties have acted in a particular manner. This course of conduct may be relevant for the purpose of ascertaining as to how the parties understood and acted on this agreement.

47. The important question which falls for consideration is as to whether Agreement dated 7.9.1983 is an Agreement which could be worked out and enforced without entering into individual agreements. Fact remains that individual agreements were entered into each time, while granting copyrights in respect of a particular book.

48. The aforesaid question posed can be answered by applying the following test:

Whether Agreement of 1983 is enforceable by itself i.e. the plaintiff could enforce this Agreement even if individual agreements were not entered into in respect of each separate book?

49. Before we answer this question, it would be appropriate to note the conduct of the parties. Admittedly, even after the 1983 Agreement, specific agreements are entered into by the parties all these years in respect of each book. Furthermore, admittedly these specific agreements were not confined to payment of royalty and defining territories. These agreements also contained the stipulation with respect to exclusive right to print, reprint, publish, sell etc. by the plaintiff in respect of a particular book. In these agreements the period within which the book is to be published is also mentioned. The specific agreements which are almost identical in nature include following clauses as well:

7. "If the publisher's edition of the said work goes out-of-print or off the market and the publisher fails to reprint within six (6) months thereafter (giving prior notice in writing to the Proprietor of the publication of such reprinting) or should the publisher be declared bankrupt, or become insolvent, or violate any of the terms of this Agreement and not rectify such violation within one (1) month after having received written notice from the proprietor to do so, or should there be a cumulative change in the beneficial ownership of 5% or more of the equity of the publisher not controlled by proprietor as of the date of this Agreement, then all rights herein granted to the publisher shall revert to the proprietor and this Agreement shall terminate, without prejudice, however, to any claims which the proprietor may have against the publisher.

8. The rights herein granted shall not be transferred, or sublicensed, nor any duties hereunder delegated by the publisher without the written consent of the proprietor.

9. All rights now existing or which hereafter come into existence and which are not specifically mentioned in this Agreement are hereby reserved to and by the proprietor".

50. Therefore, although the extreme position adopted by either party may not be correct and although Agreement dated 7.9.1983 may be an agreement by which the defendant no.1 granted certain rights to the plaintiff, the fact remains that the parties acted with the understanding that without signing an individual agreement in respect of each book, it was not possible to work out 1983 Agreement. It is because in these individual agreements parties have agreed upon various other terms and conditions on which each book in which copyright is given by such specific agreement is to be printed, published and sold. The parties had adopted this course of action for number of years. Therefore, there may be some force in the argument of the defendants that parties contemplated separate agreements whereby detailed terms and conditions on which each book is to be published were to be agreed upon.

51. After all we are considering the application for interim injunction. The parties have to go for trial. At this stage only prime facie view of the matter is to be taken. While taking this view the aforesaid course of dealing between the parties cannot be ignored.

52. No doubt the Court would look into the "comparative strength" of the case of each party in a matter like this. However, there is a dispute as to how the Agreement dated 7.9.1983 was to be worked out. Taking into consideration the conduct of the parties and particularly the fact that individual agreements were entered into, the defense of the defendants seems plausible and cannot be brushed aside lightly. The matter would be thrashed out in evidence. Thus one can approach the issue after taking into consideration the admitted position that has emerged.

53. Undisputed fact is that Defendant No.1 is the owner of the publications in question in which the plaintiff is seeking to claim copyright without any individual agreements having been entered into. Therefore, it is the case of owner versus so called assignee of the copyright. Since title of the defendant No.1 is not in dispute and on the other hand copyright of the plaintiff in such publications is in dispute, the grant of ad interim injunction in favor of the plaintiff at this stage would mean decreeing the suit itself. When this is seen in the context that in the past, parties have entered into specific agreements in respect of each book and it is only on the strength of such specific agreements that the plaintiff was able to publish and print the books, can the plaintiff be granted injunction of the nature prayed for? Answer has to be in the negative. Grant of such an injunction would mean restraining the defendant No.1 from getting its booked printed, sold etc. through any other person except the plaintiff. In other words that would mean mandating the defendant No.1 to enter into specific agreements in respect of each such book with the plaintiff thereby allowing the plaintiff alone to publish, print and sell such books. Unless the parties are at ad idem and are able to agree upon various terms and conditions on which specific agreements are entered into between the parties in the past, such a mandatory injunction cannot be issued by the Court at this interlocutory stage. Even the Court cannot suggest the terms and conditions on which a specific agreement is to be entered. It is for the parties to agree upon such terms and conditions.

54. The interest of the plaintiff can be adequately safeguarded by imposing certain conditions upon the defendant No.1 relating to maintenance of accounts etc. The balance of convenience is also, therefore, in favor of the defendant No.1. What would be the position if ultimately Court comes to the conclusion that Agreement dated 7.9.1983 could not be enforced without specific agreements and the suit of the plaintiff is dismissed? Grant of injunction at this stage, if the suit of the plaintiff is ultimately dismissed, would cause an irreversible situation for the defendant No.1. On the other hand if the plaintiff ultimately succeeds the plaintiff shall be adequately compensated and order to that effect can be passed. The defendant No.1 being the owner of the publications in question and plaintiff's rights are under cloud, even on the touchstone of "comparative strength" of the case, it is the defendant No.1 who would succeed insofar as question of interim injunction is concerned.~ I.A.No.992/2000 in Suit No.200/2000.

55. This application is accordingly disposed of by holding that the plaintiff is not entitled to any injunction at this stage and the defendant No.1 shall be entitled to get his books published through any other person. However, the arrangement of the defendant No.1 shall be subject to the following conditions:

A. The defendant No.1 shall file complete accounts/statements of sale relating to these publications in this Court from time to time.

B. In the aforesaid statements, the defendant No.1 shall also include those publications which have already been undertaken by the defendant No.1 and particulars whereof are given by the plaintiff in the suit.

C. The defendant No.1 shall also deposit 10% of the sale amount in respect of these publications in this Court. This amount shall be kept in a fixed deposit by the Registry in the name of Registrar General of this Court.

56. This direction is given keeping in view the fact that the defendant No.1 is a company incorporated in USA and is not having any office in India. Therefore, such an order is needed to secure the interest of the plaintiff in the event the plaintiff ultimately succeeds in the suit.

57. I.As.Nos.2012, 2706 & 2707/2000 in S.No.200/2000.

58. These applications filed by defendants 2 to 6 under Order 1 Rule 10 and Section 151 CPC are allowed inasmuch as the plaintiff has itself made the statement that the plaintiff does not wish to proceed against them. The names of defendants 2 to 6 are, therefore, deleted from the array of parties.

59. I.A.No.3524/2000 in S.No.716/2000.

60. In this application filed by Prentice Hall Inc. (hereinafter referred to as `foreign company') in the aforesaid suit in which it is the plaintiff, it has sought restraint order against Prentice Hall India Pvt.Ltd./defendant, (`Indian company' for short) inter alia, prohibiting and restraining it from printing, reprinting, publishing, translating, adapting, importing/exporting any book over which the plaintiff has a copyright including the books mentioned in Annexure-F to the plaint other than the books over which the defendant has a separate, independent and valid, enforceable agreement/license in operation.

61. In view of the aforesaid discussion relating to Agreement dated 7.9.1983, it cannot be said that it is a case where no rights have accrued in favor of Indian company in respect of the publications already undertaken. The entire thrust in the application is that Agreement dated 7.9.1983 was only in the nature of a Memorandum of Understanding and in any case null and void being against the public policy etc. It is already observed hereinabove that prima facie these contentions of the foreign company are not valid. Therefore, it would not be appropriate to grant them any injunction of the aforesaid nature in favor of foreign company as well. The Indian company had printed/published various books not only on the basis of Agreement dated 7.9.1983 but also when the foreign company had signed individual agreement in respect of these books. It may also be mentioned that the Indian company was incorporated in collaboration with the foreign company which is also having 30% stakes in this company. If the injunction of the nature sought for by the foreign company is granted at this stage, it would sound death knell to the Indian company. Therefore, even the balance of convenience is in favor of Indian company. Accordingly this application is also dismissed. However, the Indian company shall also be bound by the conditions imposed upon foreign company, namely, it would file statement of account in respect of sales made by it in this Court from time to time and deposit 10% of the sale amount in respect of these publications in this Court. This amount shall be kept in a fixed deposit by the Registry in the name of Registrar General of this Court.

62. I.As.No.4432 & 8168/2000 in S.No.716/2000.

63. I.A.No.4432/2000 is filed by the Indian company under Section 10 read with Section 151 of the Code of Civil Procedure for stay of Suit No.716/2000 on the ground that the issue involved in the suit is substantially the same as involved in Suit No.200/2000 which was filed by the Indian company prior in point of time and on the other hand IA.No.8168/2000 is filed by the foreign company for consolidation of two suits. Since both the suits are in this Court and are proceeded with simultaneously and even the interim applications filed in two suits were heard together, instead of staying proceedings in this suit, it would be appropriate to consolidate the two suits. Suit No.200/2000 shall be the leading case in which the proceedings shall be recorded. These applications are disposed of accordingly.