Delhi High Court

Phonographic Performance ... vs M/S. Spring Club & Others on 11 March, 2014

Author: Sanjeev Sachdeva

       IN THE HIGH COURT OF DELHI AT NEW DELHI

                       Order Reserved on: 10 th February, 2014.
                       Order Pronounced on: 11 th March, 2014

              IA No.3846/2011 in CS(OS) 2664/2010

P HONOGRAPHIC P ER FORMANCE LIM ITED                   ... P LAIN TIFF

                              Through:     Mr. D.C. Pandey with Mr.
                                           Dheeraj         Pandey,
                                           Advocates

                                      versus

M/S . S PRING C LUB & O THERS                       ..... D EFENDAN TS

                              Through:     Mr. Ajay Sahni with Ms.
                                           Neharika   Nainta Maini,
                                           Advocates.

       CORAM:

       HON'BLE MR. JUSTICE SANJEEV SACHDEVA

SANJEEV SACHDEVA, J.

IA No. 3846/2011 (under Order VII Rule 11 CPC)

1. The Defendants No. 1 and 2 have, by the present

application, sought rejection of the plaint under Order

VII Rule 11 (a) & (d) of the Code of Civil Procedure

(hereinafter referred to as the CP C) . As per the

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applicants, the suit of the plaintiff is barred by law

inasmuch as the plaintiff is neither residing nor

carrying on business or works personally within the

local limits of this Court. As per the applicants, the

plaintiff only has a branch o ffice within the territorial

jurisdiction of this Court and none of the defendants

are based or have any place of business within the

territorial jurisdiction of this Court and the impugned

acts for which the reliefs is sought have alleged to

have taken place outside the territorial jurisdiction of

this Court. The second ground pleade d is that no

cause of action h as ever arisen against the defendants

and the plaint does not disclose cause of action

against the Defendants.

2. It is the settled proposition of law that while deciding

an application under Order VII Rule 11 , it is only a

plaint that has to be examined to ascertain whether a

cause of action is disclosed or not and also whether

the suit is prima facie barred by any law. The court

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has to look into th e averments in the Plaint and the

pleas and defence of the defendants in the Written

Statement are not relevant for the purpose of deciding

an application under Order VII Rule 11. (C HURCH OF

C HRIST C HARITAB LE TRUS T AND E DUCATIONA L

C HARITAB LE S OCIE TY VERSUS P ONNIAMMAN

E DUCATIONA L TRUS T: 2012 (8) SCC 706).

3. The suit of the Plaintiff is for infringement of copyright

under the Copyright Act, 1957 (hereinafter referred to

as 'the Act'). Jurisdiction to try a civil Suit is conferred

on a court by Sections 15 to 20 of the CP C. Under

Sections 15 to 20 of the CP C a civil suit can be filed at

a place where the subject matter is si tuated, where the

defendants reside or where the cause of action has

arisen. Section 62 of the Act additionally confers

jurisdiction on a Court within the local limit of which the

plaintiff actually and voluntarily resides or carries on

business or personally works for gain.

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4. The plaintiff, in the present suit, has pleaded that the

plaintiff is a copyright society registered under Section

33(3) of the Copyright Act. The plaintiff has a branch

office at Delhi within the territorial jurisdiction of this

Court. In paragraph 30 of the plaint, the plaintiff has

averred that this Court has the jurisdiction to entertain

the suit as the branch office of the plaintiff is in Delhi

from which it carries on business and from where the

letters dated 14.12.2010 and 23.12.2010 had been

issued to the defendants calling upon them to obtain

the mandatory public per formance licence. The

plaintiff is stated to be carrying its business activity

from its branch office in Delhi. The plaintiff has further

stated that a substantial part of cause of action has

arisen within the territorial jurisdiction of this Court.

5. A reading of the plaint shows that the stand of the

plaintiff is that it has a branch office in Delhi from

which it is carrying on its business. Further it is

pleaded that a substantial part of cause of action has

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arisen in Delhi within the territorial jurisdiction of this

Court. From reading of the plaint it cannot be said that

the plaint does not satisfy the requirements of Section

62 of the Act.

6. For considering whether the plaint discloses a cause

of action or not it is only the plaint that is to be

considered. The defence raised by the applicants is

not relevant for the purposes of considering whether

the plaint is liable to be rejected for failure to disclose

cause of action under Order VII Rule 11 of the CP C.

What is relevant is whether the averments in the plaint

are sufficient to confer jurisdiction on this Court or not.

7. The Plaintiff has averred that it has a branch office in

Delhi from which it carries on its business and further

that a part of a cause of action has arisen in Delhi

within the local limits of this court. The averments in

the plaint, prima facie, satisfy the requirements of both

Section 62 of the Act and Section 20 of the CPC.

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Thus, the plaint can not be rejected on the ground of

lack of territorial jurisdiction.

8. The plaintiff, in the plaint, has further contended that

as the plaintiff is a registered copyright society

registered under Section 33(3) of the Act, the plaintiff

is permitted to carry on business in sound recordings.

The Registration allows and entitles the plaintiff to

administer its member's sound recordings, charge and

collect licence fee s from the users of sound

recordings. The royalties collected are then distributed

to the owners of the copyright in the sound recordings.

On account of the plaintiff being a registered copyright

society, various owners of the sound recording works

are members of the plaintiff and have granted

exclusive authorization to the plaintiff to administer

their rights in sound recording works in terms of

Section 34 of the Act.

9. The suit was instituted on 28.12.2010 and the plaintiff

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along with the documents has filed a list of its

members as on 03.12.2010. As per the plaintiff, the

plaintiff is competent to administer the rights of its

members i.e. the owners in the sound recording works

by issuing licence or collection of licence fee. As per

the plaintiff, the defendants are and would be

communicating the sound recordings of the members

of the plaintiff to the public for generating profit, an

exclusive right of which vests only with the copyright

owners. In the absence of obtaining a requisite licence

under Section 30 of the Act, all the defendants would

infringe the copyright in the works in terms of Section

51 of the Act. As per the plaintiff, every broadcasting

organization, shops, departmental stores, showroom,

restaurant, auditorium, airline, commercial

establishments, club, disco, office, music concerts,

etc. that play music without obtaining prior licence of

the plaintiff impinge on the right of the plaintiff and its

members.

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10. The defendants are stated to be commercial

establishments engaged in hospitality business and

are going to host shows in their premises to celebrate

New Year eve and other events with commercial and

profit motive of selling tickets at large. As per the

information of the plaintiff, in the said events, the

defendants would be using the copyrighted sound

recording of the members of the plaintiff.

11. The plaintiff had issued letters dated 14.12.2010 and

23.12.2010 calling upon the defendants to obtain the

requisite licence. As per the plaintiff, the defendants

have not complied with the statutory requirements of

the copyright Act of acquiring a licence from the

plaintiff nor have eve n responded to the letters issued

by the plaintiff. As per the plaintiff, the defendants are

organizing even ts in their respective premises where

the music of the plaintiff would be played.

12. For deciding whether a plaint discloses a cause of

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action one has to presume that if the averments in the

plaint are correct, is a cause of action to sue

disclosed. (W HALE S TA TIONERY P RODUC TS L TD . V ERSUS

K ORES C.E. GMBH ; 2013 (205) DLT 99). In cases

where even if the averments are presumed to be

correct, the plaint d oes not disclose a cause of action,

the plaint is liable to be rejected. But here the

averments taken on their face value disclose a cause

of action, then the veracity or the truthfulness of the

averments is not to be gone into at the stage of

deciding an application under Order VII rule 11 of the

CP C.

13. The court must treat the averments made in the plaint

as correct and true. Whether a plaint discloses a

cause of action or not would have to be ascertained

from the pleadings made in that behalf. While

undertaking such an exercise the court is not required

to conduct a detailed enquiry. All that the court is

required to ascertain is, whether the allegations throw

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up a cause of action. So long as the plaint discloses a

cause of action it is not liab le to be rejected however

weak the action is or is unlikely to succeed.

(LIVERPOO L & LONDON S.P. & I. A SSOCIATION L TD .

VERSUS M.V. S EA S UCCESS & & A NR . (2004) 9 SCC

512).

14. The Defendants have raised a plea that the Plaintiff

being a copyright society is reg istered only for the

purposes of administering license regime and recovery

of fee and it cannot prosecute claims for infringement.

15. The Division Bench of this Court in the case of

P HONOGRAPHIC P ERFORMANCE LIM ITED V ERSUS M/S

LIZARD LOUNGE & O THERS 2009 ILR (2) D ELH I 726 has

laid down as under:

"27. We have no doubt in our mind that the very object of providing for such a Copyright Society was not only to administer the license regime and recovery of fee in a better manner but also to prosecute claims for infringement. To

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hold otherwise would be a half job done.

Individual owners of Copyright find it difficult to enter into multiple license agreements and recover fee or enforce their rights. The creation of a Copyright Society is to serve all the three objectives without denuding the author of its own individual rights. The present cases are not one where the owner is contradicting the rights of the Copyright Society. In any case they are all aspects/matters of trial and the plaint could not have been thrown out at the threshold on the aforesaid ground."

16. In view of the decision of the Division Bench in the

case of L IZARD LOUNGE (S UPRA ) that the object behind

the statute for providing such a copyright society was

to also prosecute claims for infringement. The creation

of a copyright society is to serve the objective of

overcoming the difficulty of the individual owners of

are aspects of trial and the plaint cannot be rejected at

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the threshold.

17. The facts enumerated hereinabove are some of the

facts extracted from the plaint. They clearly disclose a

cause of action to sue in favour of the Plaintiff and