Super Cassettes Industries ... vs Scn Sujla Channel
2017 Latest Caselaw 1237 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                     Reserved on: 23rd February, 2017
                                     Pronounced on: 7th March, 2017


+      CS (COMM) 67/2016 and IA No.1415/2016 (Order XXXIX
       Rules 1 & 2 CPC)

       SUPER CASSETTES INDUSTRIES PRIVATE LIMITED
                                                             ..... Plaintiff
                          Through:     Ms. Prachi Agarwal, Advocate
                                       with Ms. Anjana Ahluwalia,
                                       Advocate
                          versus
       SCN SUJLA CHANNEL                             ..... Defendant
                          Through:     Ex parte

CORAM:
HON'BLE MR. JUSTICE R.K.GAUBA

                             JUDGMENT

1. The present suit has been instituted seeking reliefs in the nature of permanent injunction against infringement of the copyrights, rendition of accounts, damages, etc. by the plaintiff, a music company, having its registered office in Delhi against the defendant, a ground cable operator providing cable television services under the logo „SCN SUJLA Channel‟ and „SCN Sardarsahar‟ in the state of Rajasthan from its location in Sujangarh (Churu). Since the plaintiff asserts its

copyrights respecting certain works, the infringement of which statedly has given rise to the cause of action for the present proceedings, the suit has been properly instituted in Delhi in terms of Section 62 of the Copyright Act, 1957, it being the place where the plaintiff carries on business.

2. In the suit, the plaintiff describes itself as one of the largest and most reputed music companies in the country and the owner of a large repertoire of copyrighted works comprising cinematographic films, sound recordings etc. operating under the brand „T-SERIES‟ and further that in the course of its business it acquires copyright in all the literary, musical and other works which it commissions and manages, through assignments from the authors or other prior owners of copyright in the same, asserting that under Section 17(b) read with Section 2(d) of the Copyright Act, 1957, it is the first owner of copyright in those sound recordings and cinematographic films which it produces by taking the initiative and responsibility for the same, its business also including giving licences to various organizations such as Broadcasting Organizations, Television Channels, FM Radio Stations, Multi-System Operators (MSO) and Cable Television Operators etc. for the use of its repertoire of copyrighted works.

3. As mentioned at the beginning, the plaintiff‟s case is that the defendant is a ground cable operator providing cable television services in the State of Rajasthan. The plaint alleged that the defendant, like other cable operators, would also provide cable advertising and non-stop entertainment and make extensive use of

Hindi songs/ film extracts to enhance viewership and increase revenue through advertising.

4. The plaintiff claimed cause of action to bring the present suit stating that it being very diligent in protecting its intellectual property rights it came across, in the course of random monitoring in June, 2015 infringement of its copyright works by the defendant, as was confirmed by the report of Mr. Mohit Sharma (who would appear as PW-2 as the trial), one of its executives, who subjected some of the broadcasts on the cable television network of the defendant to CD/DVD recordings capturing contents, the use of which for such purposes by the defendant violated the rights of the copyright owner (the plaintiff).

5. It is the plaintiff‟s case that in order to amicably resolve the dispute, the plaintiff‟s representative contacted the defendant informing it of its Public Performance Licensing Scheme (PPLS) under the name of „T-Series Public Performance License (TPPL)‟ but since the infringing activities continued, the plaintiff claims to have served a legal notice dated 24.08.2015 on the defendant setting out specific instances of infringement of the plaintiff‟s repertoire by the defendant and requesting the defendant to obtain the requisite license to make their broadcasts legal, also demanding Rs.25 lakhs as damages.

6. The plaint alleged that the defendant in spite of being served with the said legal notice failed to respond and continued with the infringing activities unabated compelling the plaintiff to institute the

present suit. As per the averments in the suit, the CD/DVD recording of the broadcasts made by the defendant on their cable television network on 03.06.2015 included sound recordings, cinematographs films and underlying literary and musical works belonging to the plaintiff‟s repertoire of audio video songs like the song „Tere Mast Mast do Nain‟ from the film „Dabangg‟, the song „Dhinkaq Chika‟ from the film „Ready‟, the song „Laung da Lashkara‟ from the film „Patiala house‟, the song „Sadi Gali‟ from the film „Tanu Weds Manu‟ which had been communicated to the public at large without the plaintiff‟s permission or license. It is the plaintiff‟s case that it is the assignee of the copyright in the said works.

7. Summons on the suit and notice on the application for ad interim injunction under Rules 1 and 2 or Order XXXIX of the Code of Civil Procedure, 1908 (CPC) were issued by order dated 04.02.2016 with ex parte ad interim injunction also granted. The defendant was duly served but did not appear, and, therefore, was set ex parte by order dated 23.05.2016 when the ex parte ad interim injunction granted earlier was made absolute for the pendency of the case.

8. In the proceedings held thereafter, the plaintiff examined two witnesses in the ex parte evidence, they being Mr. S.K. Dutta (PW-1), Deputy General Manager and Mr. Mohit Sharma (PW-2), Executive of the plaintiff‟s company, they deposing on the strength of their affidavits Ex.PW-1/A and Ex.PW-2/A respectively. Since the

defendant has chosen to suffer these proceedings ex parte, the evidence of the said two witnesses of the plaintiff has gone unrebutted.

9. The unchallenged testimony of PW-1 has proved the necessary facts concerning the status of, and nature of business undertaken by, the plaintiff‟s company, the authorization (Ex.PW-1/2) in exercise of which the suit has been instituted on its behalf as indeed the status of, and nature of business undertaken by the defendant. Similarly, the evidence of PW-2 has proved that, during monitoring and investigation through the said executive of the plaintiff, compact disc/digital video (CD/DVD) recordings of certain broadcasts by the defendant on its cable television network on 3rd June, 2015 were made, along with cue-sheets, containing details of such broadcasts in relation to time of recording, the impugned works, duration of such broadcast (by Ex.PW-2/1 and Ex.PW-2/2). PW-1 has also affirmed on oath that the defendant by such broadcasts on his channels have infringed, amongst others, the sound recordings, cinematograph films and underlying literary and musical works belonging to plaintiff‟s repertoire from the movies like "Dabangg", "Ready", "Tanu Weds Manu"etc. This claim is supported by copyright certificate (Ex.PW- 1/8A) for the song „Hale Dil‟ from the film "Murder-2" by author M/s. Vishesh Films Pvt. Ltd.; copyright certificate (Ex.PW-1/8B) for the song "Sadi Gali" from the film "Tanu Weds Manu" by author M/s. Viacom 18 Media Pvt. Ltd.; copyright certificate (Ex.PW-1/8C) for the song "Dhinkaq Chika" from the film "Ready"; copyright certificate (Ex.PW-1/8D) for the song "Laung Da Lashkara" from the

film "Patiala House" by author M/s. People Tree Films Pvt. Ltd.; copyright certificate (Ex.PW-1/8E) for the song "Tere Mast Mast do Nain" from the film "Dabangg" by author M/s. Arbaaz Khan Productions Pvt. Ltd.; copyright certificate (Ex.PW-1/8F) for the song "Humko Pyaar Hua" from the film "Ready"; copyright certificate (Ex.PW-1/8G) for the song "Mit Jaaye Gham" from the film "Dum Maaro Dum" by author M/s. RS Entertainment Pvt. Ltd.; and copyright assignment deed dated 09.02.2011 (Ex.PW-1/H) between Ms. Nadiadawala Grandson Entertainment Pvt. Ltd. from the film "Houseful-2" by author M/s. Arbaaz Khan Productions Pvt. Ltd. all in favour of the plaintiff company.

10. Section 14 of the copyright Act, 1957 defines the meaning of "copyright". The said statutory provision, to the extent relevant here, reads as under:-

"14. Meaning of copyright- For the purposes of this Act, "copyright" means the exclusive right subject to the provisions of this Act, to do or authorise the doing of any of the following acts in respect of a work or any substantial part thereof, namely :-

(a) in the case of a literary, dramatic or musical work, not being a computer programme,-

xxx

(iii)to perform the work in public, or communicate it to the public;

(iv) to make any cinematograph film or sound recording in respect of the work;

xxx

(d) in the case of a cinematograph film,- xxx

(iii) to communicate the film to the public; xxx

(e) in the case of a sound recording,- xxx

(iii) to communicate the sound recording to the public.

Explanation - For the purposes of this section, a copy which has been sold once shall be deemed to be a copy already in circulation."

11. The plaintiff alleges infringement of its copyright in respect of the above mentioned works and refers to Section 51 of the Copyright Act, 1957 which reads as under:-

"51. When copyright infringed.- Copyright in a work shall be deemed to be infringed-

(a) when any person, without a license granted by the owner of the Copyright or the Registrar of Copyrights under this Act or in contravention of the conditions of a license so granted or of any conditions imposed by a competent authority under this Act-

(i) does anything, the exclusive right to do which is by this Act conferred upon the owner of the copyright, or

(ii) permits for profit any place to be used for the communication of the work to the public where such communication constitutes an infringement of the copyright in the work, unless he was not aware and had no reasonable ground for believing that such communication to the public would be an infringement of copyright; or

(b) when any person-

(i) makes for sale or hire, or sells or lets for hire, or by way of trade displays or offers for sale or hire, or

(ii) distributes either for the purposes of trade or to such an extent as to affect prejudicially the owner of the copyright, or

(iii) by way of trade exhibits in public, or

(iv) imports into India,

any infringing copies of the work:

Provided that nothing in sub-clause (iv) shall apply to the import of one copy of any work, for the private and domestic use of the importer.

Explanation.- For the purposes of this section, the reproduction of a literary, dramatic, musical or artistic work in the form of a cinematograph film shall be deemed to be an "infringing copy"."

12. From the facts proved, it is clear that the plaintiff, being the owner of the copyright in respect of the works in question has suffered infringement of its exclusive rights within the mischief of Section 51 of the Copyright Act, 1957 at the hands of the defendant who, without permission or license, has been broadcasting the same to the public at large on its cable television network. In these circumstances, a case for permanent injunction against such infringement has been brought home, also because the sound recordings or video films which are being published are not shown to be carrying the requisite particulars concerning the author of the works or owner of the copyright in such works as mandatorily required in terms of Section 52-A of the Copyright Act, 1957.

13. The plaintiff has also prayed for rendition of account of profits earned, directly or indirectly, by the defendant from the impugned activity and for a decree of amount thus found to be passed in its favour, this is in addition to damages claimed in the sum of Rs.1,00,01,000/- along with future damages and interest besides an order of delivering up of the infringing tapes, copies, negatives, etc. bearing the copyright material of the plaintiff.

14. It bears repetition here that the defendant has chosen not to appear to put in any contest to the suit. The plaintiff before institution of the case had served on the defendant a legal notice dated 24.08.2015 (Ex.PW-1/5), sent through courier, calling upon them to desist and also demanding damages in the sum of Rs.25 lacs. Its witness PW-1 has deposed that the defendant has "thousands of connections", thereby implying that huge revenue has been earned. The witness proved a print out from the website (Ex.PW-1/6) of the plaintiff company indicating that the license fee it charges for cable operator license is in the sum of Rs.18/- per month per connection per household, exclusive of all applicable taxes. It is on that basis that PW-1 testified that the damages have been calculated in the sum of rupee one crore, such calculation according to the witness being a conservative estimate.

15. This court finds substance in the submissions on behalf of the plaintiff that the defendant having been found to have indulged in illegal infringing activity affecting the commercial rights of the plaintiff in the copyrighted works and having chosen not to participate

in the proceedings arising out of the suit before this court cannot be allowed to get away unscathed merely by grant of prohibitory injunction. The disregard of the lawful rights of the plaintiff by deliberate and calculated infringement must result in damages being awarded. In absence of any defence having been raised, the same being willful, intentional and flagrant violation of law, the objective to be served by such award of damages must be not only to penalize the wrongdoer but also to recompense, to the extent possible, the loss suffered by the aggrieved party. [Times Incorporated vs. Lokesh Srivastava and Ors., 2005 (3) PTC 3 Del.; Microsoft Corporation vs. Kiran and Anr., 2007 (35) PTC 748 (Del.); ITC Ltd. vs. Mr. Sunil and Ors., MIPR 2007 (2) 152; and Microsoft Corporation vs. Rajendra Pawar & Anr., 2008 (36) PTC 697 (Del.)].

16. The defendant was served with the legal notice (Ex.PW-1/5) in which the damages were quantified at rupees twenty five lakh. The defendant chose not to respond by any reply to the said legal notice nor came forward to participate in the proceedings before the court. In these circumstances, the claim of the plaintiff for damages for the above infringement to that extent has gone unchallenged. But, there is no material mustered, much less sufficient, on which it can be said that the damages quantified and claimed in the legal notice represented the losses actually incurred or, on which the claim of damages to the tune of Rs.1,00,01,000/- could be justified. The plaintiff even in ex parte trial, could have summoned the records of the defendant to bring before the court some material on which assessment of the revenue

illegally earned by the infringing activity could have been undertaken. The rate card at which the plaintiff grants licenses to cable operators may give some indication of the amount which the defendant (cable operator) would be obliged to pay as consideration for the grant of license to compute the extent of unlawful gain thereby made. But, the evidence of the plaintiff‟s merely stating that clientele catered to by the defendant runs into thousands is very vague and cannot form the basis of the damages claimed in the legal notice or the suit being justified.

17. In these circumstances, the proper course would be to first direct not only delivery up of the infringing material but also rendition of account leaving the calculation of the unlawful profits earned through the impugned activity to be computed for payment of compensatory damages to be enforced in its wake for later. On the basis of existing pleadings and evidence penal damages quantified in sum of rupees five lakh are, however, found to be awardable.

18. For the foregoing reasons, the suit is decreed with costs in favour of the plaintiff and against the defendant to the following effect:-

(a) The defendant, its officers, servants, agents, partners and representatives, and all others acting for and on their behalf are:-

       (i)    permanently      injuncted     from   either     engaging            in
              themselves      or   from     authorizing      the      recording,
              distributing,                broadcasting,                   public

performance/communication to the public or in any other way exploiting the cinematograph films, sound recordings and/or literary works (lyrics) and musical works (musical composition) or other work or part thereof that is owned by the plaintiff including all works whereon the plaintiff has shown its copyright under Section 52A of the Copyright Act or doing any other act that would lead to infringement of the plaintiff‟s copyright;

(ii) directed to deliver up to the plaintiff or its authorized representative all infringing tapes, copies and negatives, etc. bearing copyrighted materials of the plaintiff;

(iii) directed to submit to the plaintiff all relevant documents for rendition of accounts of profits earned, directly or indirectly, from the infringing activity and unlawful conduct through its network, „SCN SUJLA Channel‟ and „SCN Sardarsahar‟;

(b) A decree in favour of the plaintiff and against the defendant on account of infringement of its copyright is passed, awarding:-

(i) punitive damages in the sum of rupees five lakh; and

(ii) compensatory damages, to be quantified equivalent to the unlawful profits earned, directly or indirectly, from the infringing activities as revealed by the accounts upon

compliance being made with the directions for rendition of accounts.

19. Decree sheet shall be drawn up accordingly.

(R.K. GAUBA) JUDGE MARCH 07, 2017 vk