PPL can't issue licences to play music in restaurants: Delhi High Court

A Division Bench of the Delhi High Court on Tuesday held that Phonographic Performance Limited (PPL) cannot issue licences for public performance of sound recordings, holding that the company is not a registered copyright society under the Copyright Act, 1957. Despite owning "80 to 90% of all sound recordings ever created in the country," the Court made it clear that such ownership does not override statutory requirements..A bench of Justices Hari Sankar and Ajay Digpaul overturned a single judge ruling that had allowed PPL to operate as a licensor based on its status as an assignee-owner of copyright.“There is, however, no dispute that, as on date, PPL is not a registered copyright society, or the member of any registered copyright society," the Bench said. .Under Indian law, a copyright society is a legal entity registered under the Copyright Act, 1957 to manage and administer the rights of authors and owners of specific classes of copyrighted works, such as music, literary works and artistic creations. As per Section 33 of the Act, only a registered copyright society is permitted to carry out the business of issuing licenses for the use of such works.These societies operate on behalf of rights holders such as composers, lyricists, publishers or performers, and are responsible for issuing licenses, collecting royalties and distributing them among the members.Prominent examples in India include the Indian Performing Right Society (IPRS) for music composers and lyricists and the Indian Singers Rights Association (ISRA) for performers. Unregistered entities cannot legally function as copyright societies or issue licenses for copyrighted content..The order was passed in an appeal filed by Azure Hospitality, which runs several restaurants including Mamagoto, Dhaba and Sly Granny. The single judge ruled that these restaurants cannot play songs owned by PPL at restaurant premises..PPL is a copyright collective that is in the business of issuing licences for publicly playing songs (sound recordings) after the copyright over these songs are assigned to it by music record labels. It owns the public performance rights of 400+ music labels, with more than 4 million international and domestic sound recordings. In 2022, PPL approached the Delhi High Court, accusing Azure - which runs around 86 restaurants - of violating the copyrights owned by PPL by playing PPL-owned songs without any authorisation. Azure had argued that PPL, not being a registered copyright society under Section 33 of the Copyright Act, cannot issue licenses or sue for infringement..The single judge had held that PPL, through assignment deeds from music labels under Section 18, became the owner of public performance rights in sound recordings. As an assignee, PPL could license and sue for infringement under Sections 30 and 55 of the Act, irrespective of its status as a copyright society.It rejected Azure's argument that only registered copyright societies could issue licenses, relying on the first proviso to Section 33(1), which preserves an owner’s individual licensing rights. The judgment emphasised that Section 33 regulates collective licensing by societies but does not extinguish owners’ rights. PPL, though previously a registered society (until 2014), was acting as an assignee-owner, not a collective agent..However, the Division Bench has now overruled this judgment, noting that permitting a company like PPL to give out licenses would go against the provisions of the Copyright Act.The Bench said “Section 33(1) is worded in proscriptive terms. It unequivocally proscribes any person, or association of persons, from ‘carrying on the business of issuing or granting licences in respect of any work in which copyright subsists…’ except in accordance with registration granted under Section 33(3).”While PPL relied on its rights as an assignee under Section 18 to issue licences, the Court rejected this, stating: “Section 33 cannot override the provisions of Section 30 of the Copyright Act which gives an absolute right to an owner of the copyright to grant any interest in the copyrighted work by way of a license.” However, it clarified that the business of issuing licences en masse falls squarely within the regulatory regime of copyright societies.Azure argued that allowing PPL to operate without registration would render the statutory framework meaningless. The Court appeared to agree, noting: “If the interpretation placed by the learned Single Judge on the first proviso to Section 33(1) is to be accepted, it would not only efface the main part of Section 33(1) but would entirely defeat Chapter VII of the Copyright Act.”Though the Court acknowledged PPL’s large market share, it noted that such concentration of rights must operate within the law: “Any person who grants licenses to others to exploit sound recordings in which such person holds a copyright can be said to be carrying on the business of issuing and granting such license.”.The Court, however, noted that Azure cannot be permitted to play the songs for free. Thus, the company has been directed to pay a sum equivalent to what is charged by Recorded Music Performance Ltd. .Azure was represented by Senior Advocates Dayan Krishnan and Swathi Sukumar with Advocates S Santanam Swaminathan, Kartik Malhotra, Anindit Mandal, Shreedhar Kale, Rishabh Agarwal and Ritik Raghuvanshi..PPL was represented by Senior Advocates Rajiv Nayar and Akhil Sibal with Advocates Ankur Sangal, Raghu Vinayak Sinha, Sucheta Roy, Shaurya Pandey, Jahnavi Sindhu and Sugandh Shani 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.