Time Warner Entertainment Co. ... vs R.P. Malhotra & Anr.
2008 Latest Caselaw 1576 Del

*                         IN THE HIGH COURT OF DELHI AT NEW DELHI


+                                  CS (OS) 2216/2003


        TIME WARNER ENTERTAINMENT CO. L.P. & ORS.                  .........Plaintiffs
                         Through: Mr. C.M. Lall with Mr. Manish Dhir and
                         Mr. Dushyant Mahant

                          Versus

        R.P. MALHOTRA & ANR.                                                          .....Defendants

                                   Through: Mr. Vineet Mehta and Mr. Neeraj Grover, Advocate
                                   for defendant No.1.

CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT


1.      Whether the Reporters of local papers                                Yes
        may be allowed to see the judgment?

2.      To be referred to Reporter or not?                                   Yes

3.      Whether the judgment should be
        reported in the Digest?                                              Yes

Hon'ble Mr. Justice S. Ravindra Bhat (Open Court)
%

1.      The plaintiffs sue the defendants for permanent injunction for restraining them from selling,

or giving on hire or offering for sale or hire, any copy of the cinematograph film in which copyright

vests with any of the plaintiffs or its affiliates, associates etc. Similarly, an injunction restraining the

respondents from importing into India such copies of films in which copyright vests with any

plaintiffs or any of their affiliates or associates, which is not authorized for sale or distribution/rental

or hire in India, is sought.

2. The plaintiffs contend, along with their associates and affiliate companies, being engaged in

film production and being owners, co-owners, associates, affiliates, licensees of rights, titles etc.

They claim copyright ownership in the films so produced. It is alleged that by virtue of provisions of

the First Schedule to the International Copyright Order, 1999, (framed in exercise of the right

conferred under Section 40 of the Copyright Act) rights in films produced or owned in any of the

countries mentioned in the Schedule apply in India and the plaintiffs are thus entitled to exclusive

rights to make copies of the film, including the photograph of any image forming part of it; to sell,

give or offer for hire or sale or hire any copy of the film irrespective of whether such copy has been

sold earlier and communicate the film to the public.

3. The plaintiffs rely upon titles to films for which they claim ownership by way of list produced

as Ex. PW-1/3 (collectively). A CD containing details has been produced as PW-1/4, the plaintiffs also

rely upon a Censorship Certificate of some of the films forming part of the list, being Ex. PW-1/5.

4. According to the plaintiffs, film production is a complex and time-consuming process,

requiring a well-thought out distribution strategy whereby the films are first released in theatres and

cinema halls, and after they have run their full course, they are released in other formats. The time

lag between the two periods is significant as to enable the copyright owner to optimally utilize his

commercial rights. It is alleged that the first defendant is the sole proprietor of M/s. R.P. Electronics,

carrying on business in sale, rental and hiring of films in CD/DVD formats. The copyright in those

films vest in the plaintiffs. Likewise, the second respondent is the sole proprietor of Gupta Video

Club carrying on similar rental activity. According to the plaintiffs, the defendants charge non-

refundable, non-transferable membership fee while inducting customers as members. This entitles

such participating members to rent DVD/VCD etc. for a rental of upto Rs.250/- per day, in the case of

a DVD. The plaintiffs allege that such rentals can be either through a physical visit of the customer or

delivery of the concerned work at the customer's doorstep.

5. The plaintiffs contend that the defendants are habitual offenders in renting out infringing

copies of the films over which they (the plaintiffs) have copyrights. They refer to raids conducted by

the police authorities and lodging of First Information Reports (FIRs) against the defendants. The

details as mentioned in the Schedule are as follows:

"Details of criminal Cases pending against Defendant No.1 are as under:

                FIR No.                      Date                       Police Station
                458/98                 December 07, 1998             Greater Kailash-I
                57/01                  March 01, 2001                Greater Kailash-I

Details of criminal cases pending against Defendant No.2 are as under:

                FIR No.                       Date                      Police Station
                47/98                  January 30, 1998              Greater Kailash-I
                68/99                  February 26, 1999             Greater Kailash-I
                58/01                  March 01, 2003                Greater Kailash-I

6. The plaintiffs allege that the defendants voluntarily reside and work for gain in Delhi within

the jurisdiction of the Court, and that the cause of action for suit arose each time they made

unauthorised importation or sale or rental of the film in which copyright vests with the plaintiffs.

7. During the course of proceedings, this Court had on consideration of the materials on

record, granted an ex-parte injunction on 02.01.2004, restraining the defendants from indulging in

acts of infringement, i.e. hiring-out or selling infringing copies of the plaintiffs' films or unauthorised

importation, sale and rental of such infringing copies. The defendants entered appearance and

contested the proceedings. After some time, the second defendant stopped appearing and did not

file written statement to the amended suit. He was set down as ex-parte on 18.07.2008. On the

same date, the first respondent stated that no acts of infringement would be indulged and he would

suffer permanent injunction.

8. The Court has considered the materials on record, which include the sole testimony of Mr.

Kapil Saha, plaintiffs' attorney; he has supported the plaint averments and also produced certified

copies of First Information Reports (as Ex.1/6). According to the witness, another Suit, being No.

606/2000, is pending against the defendants, who continue to collaborate with each other and use

optical discs to service their respective customers. The witness deposes that infringing copies are

sold after manufacturing without a license from the copyright holder; as well as importation of

similar infringing copies manufactured outside India without the authorization of the copyright

owner and importation of infringing copies, though licensed for manufacture and sold in particular

countries but brought into India without authorization of the copyright owners. It is submitted that

the latter two categories of infringing copies, i.e. those manufactured unauthorizedly abroad, in

neighbouring countries, and those imported into India as legitimate copies but without authorization

or license of copyright owners are the usual routes adopted by the infringers, such as the

defendants.

9. This Court has considered the materials on record and the pleadings. In view of the orders

setting down the second defendant as ex-parte, its defence filed at the earlier stage of the

proceedings, does not require to be gone into. So far as the first defendant is concerned, a

statement was recorded by it through the counsel, on 18.07.2008 that it was willing to suffer a

permanent injunction. The evidence in the form of deposition of PW-1 and the documents marked in

its support, establish that the defendants did indulge in acts of infringement and were renting-out

VCDs/DVDs etc. of films without authorization of the plaintiffs.

10. Under Section 14(d) of the Copyright Act, 1957, the copyright owner has the exclusive right

"to do or authorize the doing" of any of the following acts, in relation to a cinematograph film-

(i) to make a copy of a film - This will include the right to make a copy of the film on celluloid, VCD, DVD format, or any other format (s);

(ii) to sell or give on hire or offer for sale or hire, any copy of the film, regardless of whether such copy has been sold or given on hire on earlier occasion" - This will include the right of (a) sale, (b) offering for sale, (c) to hire, (d) to give on hire , (e) re-sale, (f) re-hire;

(ii) to communicate the film to the public - this will include the right to communicate the film through a cinema theatre, television service (including satellite or cable television).

11. Section 2(m) (ii) of the Act, defines "an infringing copy", as a copy which is "made or

imported in contravention of the provisions of this Act". Thus, infringement is not restricted to the

act of "making" but also extends to "importation". The main pre-condition is that such act should be

in contravention of the provisions of "this Act" i.e. the Copyright Act, 1957. Section 51 defines what

are infringing copies of a work. So far as what is meant by "import" is concerned, the judgment in

Gramaphone Company of India v. Birendra Bahadur Pandey 1984 (2) SCC 534 is an authority that

the expression is of wide import, and means bringing something into India.

12. The defendants have, in these proceedings, not disclosed how they are enabled, or

authorized by the plaintiffs, copyright owners of the films, to rent or hire them. Further, the first

defendant has clearly expressed his willingness to suffer permanent injunction sought for by the

plaintiff. This court is satisfied that the facts necessary for the grant of such relief have been proved;

the contesting defendant has also admitted to the claim, in the light of the statement made in court,

on his behalf. In these circumstances, the plaintiffs' claim for a permanent injunction is justified.

13. Accordingly, the defendants, their partners, employees, servants etc. are hereby restrained

through a permanent injunction from selling, giving or offering on hire or offering for sale or hire,

any copies of the cinematograph film in which the plaintiffs or their affiliates have copyrights,

irrespective of whether such copies have been sold or hired earlier. The defendants are also

permanently restrained from importing into India any copy or copies of any cinematograph film in

which copyright vests with any of the plaintiffs, their affiliates or associates, without authority for

sale or distribution or rental or hire in India, and also restrained from selling, hiring, or renting such

imported copies.

14. The Suit is decreed in the above terms. No costs.

S. RAVINDRA BHAT, J SEPTEMBER 08, 2008 'ajk'