Demanding unreasonable licence fee to play songs constitutes refusal under Copyright Act: Delhi High Court

The Delhi High Court has held that charging unreasonable licence fees for copyrighted music can amount to a refusal to give a licence under Section 31 of the Copyright Act, 1957, thereby entitling aggrieved parties to seek a compulsory licence for permission to play such songs. .Justice Mini Pushkarna made the observation while dealing with a petition filed by Al Hamd Tradenation (petitioner) against Phonographic Performance Limited (PPL). The petitioner, an event organiser claimed that PPL was demanding an unreasonably high amount as licence fee for permission to play songs in its repertoire. .In a judgment dated May 13, the Court ruled that exorbitant and inflexible tariffs for the public performance of sound recordings may constitute constructive refusal to give a license. Such a refusal would pave the way for aggrieved parties to avail remedies under the compulsory licensing framework."... in our constitutional scheme of statute, monopoly is not encouraged and an artistic work, if made public, should be made available subject to reasonable terms ... Offer to make copyrighted work available on an unreasonable term, would also amount to refusal on the part of owner of a copyright … this Court is within its authority to direct compulsory license to check an abuse of monopoly,” the Court held..The case arose when the petitioner sought a licence to play music at a corporate event for 50 guests. PPL quoted a flat rate of ₹55,440 to play its music at public events, for gatherings of 1–150 people. The petitioner offered to pay a proportionate sum of ₹16,500, on account of its event only having 50 people. PPL declined the offer, prompting the petitioner to approach the High Court under Section 31 of the Act. Section 31 deals with scenarios where a licence to use copyrighted work is refused on unreasonable grounds. In such cases, the competent authority can order the issue of a compulsory licence for the use of such copyrighted work. .In the present case, the High Court observed that PPL’s one-size-fits-all licensing fee - irrespective of audience size, event duration, or number of songs played - was arbitrary and failed to align with market norms. Justice Pushkarna noted that PPL’s fee structure made no distinction between events attended by 1 person or 150, or whether one or several songs were played, or how long the event lasted.By contrast, Recorded Music Performance Ltd (RMPL), the only registered copyright society for sound recordings in India, employed a more nuanced and reasonable tariff structure, the Court found.“The respondent cannot be given a free hand to procure any arbitrary and unreasonable licence fees ... Accordingly, this Court is within its authority to direct compulsory license to check an abuse of monopoly,” the Court concluded..PPL had argued that compulsory licences under Section 31(a) apply only to literary, dramatic, or musical works, not sound recordings. It added that its refusal to grant a licence did not amount to withholding the work from the public, as defined under Section 31.Rejecting this, the Court held that "work" under the Copyright Act expressly includes sound recordings, and that making sound recordings available to the public through unreasonable fees can amount to a constructive refusal.The Court also clarified that the term “refusal” under the Act is not limited to outright denial, but includes unreasonable or arbitrary demands. It further emphasised that the law does not favour monopolies in copyrighted works that can be made public. .Notably, the Court also acknowledged that in an earlier Division Bench ruling (Azure Hospitality v. PPL), the High Court had held that PPL could not independently grant licences for public performance of sound recordings, since it was neither a registered copyright society nor a member of one.The Supreme Court has since stayed a portion of that ruling. In view of the pending appeal before the top court, the Delhi High Court clarified that its directions in this case would be subject to further orders, if any, from the Supreme Court. .The Court proceeded to conclude that the petitioner's plea for a compulsory licence to play music in question has merit. The Court has directed both parties to file affidavits of evidence within eight weeks to determine what the terms of the compulsory licence should be, including the amount of compensation to be paid to PPL.The matter is listed next on May 29, 2025, before the Roster Bench..Advocates Aditya Ganju, Pallavi Shali, Sambhavi Mishra, and Samanyu Sethi appeared for the petitioner..PPL was represented by Senior Advocate Chander M Lall with Advocates Ankur Sangal, Sucheta Roya, Raghu Vinayak Sinha, Shaurya Pandey and Ananya Mehan from Khaitan & Co. .[Read Judgment].Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.