S.33(1) Copyright Act: Delhi HC Rules Entities 'Carrying on Business' of Licensing Must Comply with Copyright Society Registration - 2025-04-16

Delhi High Court Clarifies Copyright Licensing: Entities in the 'Business' Must Align with Copyright Societies

New Delhi, April 15, 2025 – In a significant judgment delivered today, a division bench of the Delhi High Court, comprising Justices C. Hari Shankar and Ajay Digpaul , partially allowed an appeal filed by Azure Hospitality Private Limited against Phonographic Performance Limited (PPL). The court modified a previous order by a single judge, clarifying the interpretation of Section 33(1) of the Copyright Act, 1957, concerning the business of issuing or granting licenses for copyrighted works.

Case Overview: Azure Hospitality vs. Phonographic Performance Limited

The dispute arose from a lawsuit filed by PPL against Azure Hospitality, alleging copyright infringement for playing sound recordings in PPL's repertoire without obtaining a license. PPL, claiming to own public performance rights for a vast catalogue of sound recordings through assignment deeds, sought an injunction against Azure. A single judge granted an interim injunction, restraining Azure from using PPL’s copyrighted works. Azure appealed this order.

The core legal question was whether PPL, not being a registered copyright society, could directly issue licenses for public performance of sound recordings, or if Section 33(1) mandates such licensing to be conducted through or in accordance with a registered copyright society.

Arguments Presented

Azure Hospitality (Appellant) , represented by Senior Advocates Mr. Dayan Krishnan and Ms. Swathi Sukumar, argued that Section 33 of the Copyright Act aims to prevent monopolistic practices and ensure regulated tariff schemes for copyright licensing. They contended that PPL, admittedly in the ‘business of issuing licenses,’ is obligated to comply with Section 33(1) and operate through a registered copyright society. Allowing PPL to issue licenses directly would circumvent the regulatory framework, including the tariff regime under Section 33A, and defeat the purpose of Chapter VII of the Copyright Act. Azure highlighted that Recorded Music Performance Limited ( RMPL ) is the registered copyright society for sound recordings, suggesting PPL should operate within its ambit.

Phonographic Performance Limited (PPL) (Respondent) , represented by Senior Advocates Mr. Rajiv Nayar and Mr. Akhil Sibal, asserted its right as a copyright owner under Section 30 of the Copyright Act to grant licenses. PPL relied on previous judgments, particularly those in Novex Communication v Lemon Tree Hotels and Novex Communications v Trade Wings Hotel , which upheld the right of copyright owners to license their works independently. PPL argued that Section 33(1) and its proviso preserve the individual licensing rights of copyright owners and that registration as a copyright society is not mandatory for granting licenses.

Court's Analysis and Reasoning

The High Court, in its judgment authored by Justice C. Hari Shankar , diverged from the interpretation adopted by the single judge and in the Novex decisions. The division bench emphasized the proscriptive nature of Section 33(1), which states:

> “No person or association of persons shall, after coming into force of the Copyright (Amendment) Act, 1994 commence or, carry on the business of issuing or granting licences in respect of any work in which copyright subsists or in respect of any other rights conferred by this Act except under or in accordance with the registration granted under sub-section (3)...”

The court held that the phrase "carrying on the business of issuing or granting licenses" applies to PPL, which itself admits to being in this business. The bench further reasoned that the proviso to Section 33(1), while allowing copyright owners to grant licenses, mandates that such actions must be "consistent with his obligations as a member of the registered copyright society." This, according to the court, implies that entities in the business of licensing must operate within the framework of registered copyright societies.

The judgment critically analyzed the Novex precedents, stating:

> “In arriving at these findings, we are of the opinion, with great respect to the High Court of Bombay, that the High Court has failed to notice the words “or in respect of any other rights conferred by this Act” contained in Section 33(1). Thus, the right conferred by Section 30 is also made subject to Section 33(1).”

The court also referenced the 227th report of the Parliamentary Standing Committee on Human Resource Development, which highlighted concerns about transparency and potential for “arbitrariness” and “arm twisting” in tariff schemes by copyright societies, further supporting the need for a regulated licensing framework.

Final Decision and Implications

The Delhi High Court, while not entirely rejecting PPL’s plea, modified the single judge’s order. Instead of a complete injunction, the court directed Azure to pay PPL for playing sound recordings from PPL's repertoire, but at tariff rates equivalent to those of RMPL , the registered copyright society for sound recordings. This payment is interim and subject to the final outcome of the suit.

The court concluded:

> “...IA 16777/2022 would stand disposed of with a direction to Azure to make payment to PPL as per the Tariff of RMPL , as displayed on its website, and in accordance with the terms thereof, in the event that Azure intends to play any of the sound recordings forming part of PPL’s repertoire in any of its outlets. Azure and PPL would both place on record before the learned Single Judge, a three-monthly statement of the payments, if any, so made and received. The payment would be strictly subject to the outcome of CS (Comm) 714/2022.”

This judgment clarifies that entities engaged in the business of copyright licensing, even as assignees of copyright, must operate in alignment with the provisions of Section 33(1) of the Copyright Act, suggesting a potential preference for licensing through or in accordance with registered copyright societies to ensure regulatory compliance and prevent monopolistic practices. The ruling underscores the importance of navigating the complex interplay between individual copyright owner rights and the collective management system envisioned by the Copyright Act.