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2007 Supreme(Bom) 668

Bombay High Court
ANOOP V. MOHTA, J
NASIR HUSAIN FILMS PVT.LTD -Appeallant
Versus
SAREGAMA INDIA PVT.LTD -RESPONDENTS
ARBITRATION PETITION 81 Of 2007
Decided On: 05/04/2007

Advocates Appeared:
CHAKRANANI MISRA, F.DIVETRE, JANAK DWARKADAS, NISHAD NADKARNI, Sharan Jagtiani, SRIRAM PANYAM, VISHAL MAHESHWARI

The judgment emphasizes the importance of a binding arbitration agreement and the duty of the court to construe correspondence to determine the intention of the parties.

Headnote:

Arbitration Act - Assignment and Exploitation of Copyrights - Arbitration and Conciliation Act 196 - Section 9

Fact of the Case:

The petitioner sought an interim order for disclosure of royalties and deposit in court, based on an agreement for assignment and exploitation of copyrights. The respondents were accused of unauthorized exploitation of the petitioner's songs and failure to clear outstanding royalties.

Finding of the Court:

The court found that there was no binding arbitration agreement between the parties, and rejected the petitioner's prayer for relief.

Issues: Existence of a binding arbitration agreement, unauthorized exploitation of copyrights, and outstanding royalties.

Ratio Decidendi: The court emphasized the requirement for a binding contract and the duty to construe correspondence to determine the intention of the parties. It also highlighted that a letter of intent does not create a binding legal relationship.

Final Decision: The petition was dismissed, and the parties were advised to raise their objections under section 11 of the Arbitration Act if necessary.

( 1 ) THE present Petition which is under section 9 of the Arbitration and Conciliation Act 196 (for short Arbitration Act ).

( 2 ) BASED on the agreement dated 8th May, 2006 for assignment and exploitation of copy rights and sound recording and underlying works, the petitioner has sought an interim order upon initiation hearing and final disposal of the arbitration proceedings and making of the award and/or implementation thereof, respondent no. 1 be ordered to disclose within 15 days on affidavit complete details of the royalties due to the petitioners and deposit in court all royalties payable to the petitioners under the Assignment deed including those dues under clause 6 (a) and 6 (j) of the Assignment Deed. The petitioners have not pressed prayer clauses (a) and (b ). Therefore, made restricted submissions by the counsel for the parties.

( 3 ) RESPONDENT no. 1 is a company incorporated and registered under the provisions of the Companies act, 1956 with its registered office at 33, Jessore road, Dum Dum, Kolkata-700 028. Respondent no. 1 is carrying on the business inter alia, as a music company. Respondent no. 2 is a copyright society as per the provisions of the Copy Rights Act, 1957 (hereinafter referred to as the "copy Right Act)and represents the interests of its member music companies and inter alia, assists its member music companies in the exploitation of copyrights and the collection and administration of royalties in respect thereof. Respondent no. 1 is a member of respondent no. 2. Respondent no. 2 also assists respondent no. 1 in the exploitation of copyrights and the collection of royalties for and on behalf of respondent no. 1.

( 4 ) THE petitioner is a famous and well known producer of Hindi cinematograph films and film songs. The petitioner has produced various blockbuster films. The petitioner has inter alia produced films which are listed in Exhibit A hereto and owns all copyrights in such films, filmsongs, sound recordings in respect thereof and all its underlying works.

( 5 ) IN or around the latter part of the year 2004, the petitioner was shocked to to know that respondent no. 1 through respondent no. 2, was exploting the petitioners songs, music, lyrics and sound recordings thereof by various modes to specify ring tone though they were not authorised to do so under any previous agreements. Such unauthorised exploitation was, inter alia, through ring tones was not contemplated by the previous agreements. Such unauthorised exploitation not only amounted to breach of the terms of the previous agreements but also is in violation of the petitioners copy rights in the songs and the music and the lyrics comprised therein and the sound recordings thereof. As alleged, not only did the respondents make unauthorised use and exploitation of the petitioners songs but also did not make any payment or give compensation for such unauthorised use and exploitation.

( 6 ) THE petitioners, therefore by various notices/letters called respondent no. 1 to clear of the outstanding amount/royalties due to the petitioners under the previous agreement and further to cease and desist from making use and exploiting the petitioners works/songs/music/lyrics, inter alia through or by way of ringtones/ringtone down loadings thereof The respondents denied the petitioners claim. Respondents failed to clear the the petitioners dues and continued to wrongfuly and unauthorisedly exploit the petitioners copy rights.

( 7 ) HOWEVER, there were various negotiations and agreements reached between the parties. Various correspondences have been exchanged between the parties including e-mails. A draft of fresh agreement as negotiated have been exchanged between the parties as alleged and respondent no. 1 agreed to all the terms of the fresh Assignment Deed. Admittedly, by letter dated 8th May 2006 sent to respondent no. 1 two originals of the Deed of assignment agreed by them with a request to return to the petitioners one original of the letter

















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