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2023 Supreme(Online)(DEL) 7746
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* IN THE HIGH COURT OF DELHI AT NEW DELHI + FAO(OS) (COMM) 7/2023 & CM APPLs. 2067/2023 AND 2070/2023 GLOBAL MUSIC JUNCTION PVT. LTD. ..... Appellant Through: Mr. Akhil Sibal, Senior Advocate with Mr.Yashvardhan, Ms. Rhia Marshall, Ms. Kritika Nagpal, Ms.Smita Kant, Mr.
Tarun Bhushan, Mr. PranayMohan Govil, Ms. Priyanka Raj and Ms. Sanya Kumar, Advocates.
versus SHATRUGHAN KUMAR AKA KHESARI LAL YADAV & ORS. ..... Respondents Through: Mr. Pradeep Kumar Arya, Mr.Gaurav Chaudhry, Mr. Randhir Singh, Mr.
Priyanshu Malik, Mr. Rahul Rana, Mr.
Pulkit Chadha, Mr.Aditya Kumar Yadav, Mr.Raj Karan Sharma, Mr.Priyanshu Malik and Mr.Arpit Bamal, Advocates for R-1.
Mr. Akhand Singh, Mr. Abhinandan Gautam, Ms. Samridhi Dobhal and Ms.
Deeksha Dwivedi, Advocates for R-5. Mr. Vihan Dang, Ms. Aditi Umapathy and Ms. Pragya Jain, Advocates for R-6.
Reserved on : 12th July, 2023 % Date of Decision: 05th September, 2023 CORAM:
HON'BLE MR. JUSTICE MANMOHAN HON'BLE MR. JUSTICE SAURABH BANERJEE TABLE OFCONTENTS Para Nos.
APPEAL…………..................…………………….........…………….…….……………...….…......1-2 FACTS.....................................................................................................................................3-7 ARGUMENTSBYLEARNEDCOUNSELFORTHEAPPELLANT/PLAINTIFF….............………..........8-18 ARGUMENTS BYLEARNEDCOUNSELFORTHERESPONDENTNO.1/DEFENDANTNO.6............19-28 Court’sReasoning.............................................................................................................29-89 AmendmentAct2018hasmadespecificperformanceofacontract ageneralruleratherthananexception.Thelegislativeshiftistowards strongerenforcementof contracts…………………...................…………………………….29-42 TheOriginalAgreement&Addendumarenotdeterminable…………………………….….43-45 Section14ofAct,1963isinapplicableastheAppellant isenforcinganegativecovenantonly....………..……………….....…....................….…......46-50 Theuniformandconsistentpracticeof Courtshasbeentoenforce anegative covenantinanagreement……......................................………………………..….….......….51-56 Section27appliesonlytorestrictionsinPostContractperiod.........….............................57-61 Damagesarenotanadequateremedy............…………………………...............................62-65 Inviewoftheavermentsintheplaint,theAppellant-Plaintiff’ssuit cannotbedismissedonlackofterritorialjurisdiction.......................................................66-69 InviewofthedefencethattheAgreementandAddendumarevitiated byfraud,themattercannotbereferredtoarbitration.…........................…………............70-73 Theagreementsbetweenthepartiesareneither‘Excessivelyonesided’
northeyimposea‘bondage’.............................................................................................74-76 PrimafacieconductoftheRespondentNo.1/DefendantNo.6isneither honestnorfair..................................................................................….....………...,..........77-80 Enforcingnegativecovenant(Clause3.5ofAddendum)willneitherrender RespondentNo.1idlenorcompelhimtoexclusivelyworkwiththeAppellant……………81-83 ContentionthatAddendumwasneveracteduponisnotcorrect..…......................................84 NoallegationthatAppellant/Plaintiffbreachedeitherthe Original AgreementorAddendum……….............................................................................…….....….85 Conclusion...............................................................................................................……...86-89
J U D G M E N T
MANMOHAN, J:
1. The present appeal has been filed challenging the order/ judgment dated 6th January, 2023 passed by a learned Single Judge of this Court in CS(COMM) No. 715 of 2022, whereby the application of the Respondent No.1/ Defendant No.6 under Order XXXIX Rule 4 of CPC, 1908 has been allowed and the application filed by the Appellant/ Plaintiff under Order XXXIX Rules 1 and 2 CPC, 1908 has been dismissed, thereby vacating the ex-
parte ad interim order dated 14th October, 2022 in its entirety.
2. It is pertinent to mention that the Appellant/ Plaintiff has filed a suit being CS(COMM) No. 715 of 2022 seeking the reliefs of permanent injunction, rendition of accounts as well as damages in view of alleged infringement of the copyright owned by the Appellant/ Plaintiff in certain literary works, musical works, cinematographic films and sound recordings by the Respondents/ Defendants.
FACTS
3. It is the case of the Appellant/Plaintiff that pursuant to detailed business negotiations between the Appellant/ Plaintiff (a music company) and the Respondent No.1/ Defendant No.6 (a singer), the parties entered into a production agreement dated 27thMay, 2021, effective from 1st June, 2021 (the ‘Original Agreement’) for creation and production of two hundred (200) songs within a term of thirty (30) months (i.e. till 30th November, 2023) for a total consideration of Rupees Five Crores only (Rs. 5,00,00,000/-). Under the Original Agreement, all intellectual property in the content/ songs created by Respondent No.1/ Defendant No. 6 vested with the Appellant/ Plaintiff, thereby granting ownership rights with respect to the content produced by the Respondent. No.1/ Defendant No. 6 during the term of the Original Agreement, with the Appellant/ Plaintiff. Furthermore, in accordance with the terms of the Original Agreement, the Respondent No.1/ Defendant No.6 agreed to exclusively work with the Appellant/ Plaintiff for creation and production of content and agreed to refrain from working with third parties for creation of any new intellectual property or content of any kind during the term of the Original Agreement, except to the extent and on the conditions provided under Annexure D of the Original Agreement. The relevant terms of the Original Agreement are reproduced hereinbelow:-
| PRINCIPAL TERMS OF THE AGREEMENT | ||
| S.No. | Particulars | Description |
| 1. | Content | Any and all of the two hundred works of the intellectual property works including without limitation all musical, lyrical, cinematographic, literary, dramatic, pictorial works, images, sound recording, music, underlying works etc. created by the Artists during the Term as commissioned by Global Music Junction |
| 2. | Term | 30 (thirty) months from Effective Date |
| 3. | Territory | Worldwide |
| xxxx xxxx xxxx | ||
| 5. | Consideration Payable | a) Global Music Junction shall be liable to pay the Artist a fee of INR 5,00,00,000/- (Rupees Five Crores only) plus taxes (the “Fee”) during the Term of this Agreement in the manner and as per the timelines set out in the Payment terms detailed in Annexure B attached herewith….. |
| 6. | Any other Terms | Standard Terms & Conditions as stated in Schedule “A” attached hereto shall apply. In the event of conflict between the Standard Terms & Conditions and the Principal Terms, then the terms as set out in the Principal Terms of the Agreement shall supersede. |
This Agreement (hereinafter referred toas “Agreement”)is made at Mumbai onthis
1stdayofJune,2021(“EffectiveDate”)
xxxx xxxx xxxx xxxx Schedule“A”-StandardTerms &Conditions
1. DefinitionsandInterpretations xxxx xxxx xxxx xxxx
1.1.1 Content – shall mean audio-visual content of various duration including but not limited to images, sound recording, music, underlying works etc. which is produced/underproduction/tobeproducedby theArtistaspertheclauses1and4of thePrincipalTermsoftheAgreement.
xxxx xxxx xxxx xxxx
2. Term ThisAgreementshallbevalidforaperiodmore particularly statedinclause2ofthe Principal Terms of th
