Delhi High Court asks Pass Code Hospitality to deposit ₹15 lakh with PPL to play music in restaurants

The Delhi High Court has directed hospitality firm Pass Code Hospitality Private Limited to pay a sum of ₹15 lakh to performance rights organisation Phonographic Performance Limited (PPL) as an ad hoc arrangement to play music in its restaurants..Justice Anish Dayal observed that, "...at this stage, defendant no.1 be permitted to play the sound recordings of the plaintiff’s repertoire, on deposit of ad hoc license fee. This ad hoc arrangement is being made by the Court, considering that on one hand parties have to be heard ultimately on the application, and on the other hand sound recordings be available for use." This arrangement is limited to this case and shall not act as a precedent, the Court added..The terms of the arrangement were as under: a) An amount of ₹15,00,000/- (Rupees Fifteen Lakhs only) shall be deposited by defendant no.1 as ad hoc license fee valid from November 4, 2023 till August 3, 2024. b) The said deposit shall be made by defendant no.1 within two weeks from today with the Registry of this Court. c) Plaintiff shall issue to defendant no.1 a license valid from November 4, 2023 till August 3, 2024. d) Plaintiff will be entitled to withdraw, upon deposit by defendant no.1, an amount of ₹8,00,000/- (Rupees Eight Lakhs only). e) The balance amount or ₹7,00,000/- (Rupees Seven Lakhs only) shall be kept in an interest-bearing fixed deposit by the Registry for a term of one year initially and renewed thereafter..The Court was hearing a copyright infringement suit filed by PPL against Pass Code, the owner of popular restaurants Jamun, Saz and PCO. The suit aimed to restrain Pass Code's restaurants from using music PPL owns the public performance rights to. It was alleged that Pass Code was using sound recordings owned by PPL without obtaining a proper license.PPL had initially filed a civil suit before the Saket District Court, seeking an injunction and other related relief. On October 1, 2022, an interim injunction was issued in favour of PPL.Subsequently, the parties reached an amicable settlement through an agreement dated December 4, 2022, by which Pass Code agreed to use PPL's work only after obtaining the appropriate license.The licenses obtained by Pass Code expired on November 3, 2023. After the expiration of the term, Pass Code did not agree to renew the license and insisted on the same license fee proposed by PPL for the first license..Counsel for PPL submitted that it should have the liberty to license sound recordings at the rates determined by it.However, counsel for Pass Code submitted that the rates cannot be unreasonable and must be legitimate. It was submitted that PPL itself averred that it monopolises the sound recording market by claiming ownership of almost 80% to 90% of the sound recordings.It was stated that PPL agreed on a license fee of ₹7,80,852 for one year, it demanded ₹19,13,560 for the subsequent year..After hearing the parties, the Court created an ad hoc arrangement."Needless to state that the ad hoc arrangement, will be subject to further orders of the Court, and has been arrived at to balance the equities between the parties at this interim stage, without prejudice to the respective rights and contentions of the parties, as well as submissions made by the respective counsel."The matter will be heard next on July 19..Senior Advocate Chander M Lall, and advocate Anirudh Bakhru, along with a team from Khaitan & Co, led by partner Ankur Sangal and comprising Sucheta Roy (principal associate) and Raghu Vinayak Sinha (senior associate) represented PPL.Advocates Swathi Sukumar, Santanam Swaminadhain, Sumehar Bajaj, Kartik Malhotra, Rishabh Aggarwal and Ritik Raghuwanshi appeared for Pass Code..[Read Order]