Compulsory Music License for Events: Delhi HC Rules Against PPL’s Licensing Practices

Summary

In a recent case between Al Hamd Tradenation and Phonographic Performance Limited (PPL), the Delhi High Court held that Al Hamd is entitled to a compulsory license because PPL had refused to grant a license for a small-scale event for a reasonable fee. The Court stated that a compulsory license for withholding a work from the public under Section 31(1)(a) of the Copyright Act is available for all categories of works, including sound recordings. It also stated that "publication" under the Act includes making a work available to the public through communication and public performance, thereby bringing licensing of sound recordings for events within the scope of compulsory licensing. As per the Court, offering a license on unreasonable or arbitrary terms amounts to a constructive refusal. The Court also pointed out that the purpose of the compulsory license regime is to ensure access to creative works in the public interest, particularly when copyright holders adopt restrictive licensing practices.

Application for Compulsory License

Al Hamd Tradenation wanted to organise a small corporate event for 50 attendees and play recorded music during the event. Upon being told by the venue that a license from Phonographic Performance Limited (PPL) was required to perform music at the event, Al Hamd asked for the fee that needed to be paid to acquire the license. PPL quoted a fee of ₹49,500 for the 50-member event, while its website listed a tariff of ₹55,440 for gatherings of 1–150 people.

In response, Al Hamd offered ₹16,500—one-third of the quoted amount—based on the event size. PPL rejected the offer and promptly filed an infringement suit. In response, Al Hamd filed a petition for a compulsory license under Section 31 of the Copyright Act, arguing that PPL’s conduct amounted to an effective refusal to license.

PPL’s Arguments: Ownership and Licensing Freedom

PPL argued in the case that it owns valid copyright in the sound recordings forming part of its repertoire and is therefore entitled to determine licensing terms and fees. It claimed that it had not refused the license but had merely asked Al Hamd to pay the applicable fee as per publicly available tariffs. According to PPL, a compulsory license could not be granted in the absence of a complete denial of access to the work. It also argued that Section 31(a) of the Copyright Act only applies to cases where the copyrighted work is being withheld from the public entirely, and not where it is available under standard terms.

PPL further contended that Section 31(a) only covers “performance in public” for certain types of works like literary, dramatic, and musical works, and does not extend to sound recordings.

Court’s Findings: Compulsory License Grant

The Court rejected all of PPL’s arguments. It stated that copyright law must strike a balance between the monopoly rights of copyright owners and the public’s right to access published works on reasonable terms. Referring to the Supreme Court’s ruling in Entertainment Network (India) Ltd. v. Super Cassette Industries Ltd., (2008) 13 SCC 30, the Court stated that even where a license is technically “offered,” if it is on unreasonable or arbitrary terms, it would still amount to a refusal under Section 31.

With respect to works covered under Section 31(1)(a), the Court stated that sound recordings are covered under the provision because they are “works” under Section 2(y) of the Copyright Act, and because performance in public includes performance of sound recordings. It rejected PPL’s narrow interpretation of Section 31(1)(a), and pointed out that unreasonable license terms can attract the provision even in non-broadcast contexts.

In its decision, the Court was critical of PPL’s blanket tariff structure, which imposed the same fee regardless of event size, duration, or number of songs played. This model, according to the Court, placed an undue burden on small event organisers like Al Hamd and was inconsistent with the fee structures used by registered copyright societies like RMPL. As per the Court, PPL’s unreasonable fee structure, combined with its monopoly over sound recordings, amounted to a refusal and an unreasonable denial of access.

Licensing Business and Copyright Societies

The Court took note of the recent Division Bench ruling in Azure Hospitality Pvt. Ltd. v. PPL, which held that PPL could not grant licenses without registering as a copyright society or becoming a member of one. Although that decision has been partially stayed by the Supreme Court, the High Court acknowledged that PPL’s authority to issue licenses is in question, and stated that its decision would be subject to a final determination by the Supreme Court.

Decision and Next Steps

Based on its analysis, the Court concluded that Al Hamd was entitled to a compulsory license and directed the parties to file affidavits of evidence to help determine fair compensation and licensing terms. The matter is listed for further directions on 29 May 2025.

Compulsory Licensing and Public Interest

Relevant paragraphs from the Court that relate to compulsory licenses and their interpretation read as follows:

“17. The Hon’ble Supreme Court in the case of Entertainment Network (India) Limited v. Super Cassette Industries Limited, (2008) 13 SCC 30, has delved into the various aspects of compulsory licence. The relevant extracts from the said judgment are reproduced as under:

“… Essential features of the Copyright Act

87. The Act seeks to maintain a balance between the interest of the owner of the copyright in protecting his works on the one hand and the interest of the public to have access to the works on the other. The extent to which the owner is entitled to protection in regard to his work for which he has obtained copyright and the interest of the public is a matter which would depend upon the statutory provisions.
88. Whereas the Act provides for exclusive rights in favour of owners of the copyright, there are provisions where it has been recognised that public has also substantial interest in the availability of the works. The provisions relating to grant of compulsory licence must be viewed having regard to the aforementioned competing rights wherefor an appropriate balance has to be struck. For the said purpose, we may notice the broad features of the Act.

… Compulsory licence

96. The scheme of the Act affirms the freedom to contract as being the primary machinery by which the copyright owner publishes his work through a voluntary licence regime in terms of Section 30. Compulsory licences are an exception to the general freedom of the copyright owner to contract.

…

115. In response to a query as to whether when an application for compulsory licence is filed any publication thereof is made or not; we are informed that no such rule or practice exists. Apart from the fact that application for grant of compulsory licence in the matter of sound recording may be by different persons; the wide range of it has been noticed by us hereinbefore. It may be for different parts of the country, nay different cities. If a compulsory licence is granted only once covering every single part of the country, the same cannot lead to a conclusion that no other person can approach the Board.

… Right to property—Is the concept applicable

118. An owner of a copyright indisputably has a right akin to the right to property. It is also a human right. Now, human rights have started gaining a multifaceted approach. Property rights vis-à-vis individuals are also incorporated within the “multiversity” of human rights. As, for example, any claim of adverse possession has to be read in consonance with human rights. The activist approach of the European Court of Human Rights is quite visible from the judgment of Beaulane Properties Ltd. v. Palmer [2005 EWHC 817 (Ch)] and JA Pye (Oxford) Ltd. v. Graham [(2003) 1 AC 419 : (2002) 3 WLR 221 : (2002) 3 All ER 865 (HL)].

…

121. But the right to property is no longer a fundamental right. It will be subject to reasonable restrictions. In terms of Article 300-A of the Constitution, it may be subject to the conditions laid down therein, namely, it may be wholly or in part acquired in public interest and on payment of reasonable compensation.

…

131. When such a complaint is made, it confers the jurisdiction upon the Board. It may ultimately allow or reject the complaint but it cannot be said that the complaint itself is not maintainable.

…”

(Emphasis Supplied)

18. Summary of Legal Principles from the Case

From the above judgment, the following principles regarding compulsory licenses can be drawn:

1. The Copyright Act seeks to maintain a balance between the rights of the copyright owner and the public’s access to works.
2. While the Act grants exclusive rights to copyright owners, it recognises substantial public interest in access to copyrighted works.
3. Compulsory licences are exceptions to the general freedom of a copyright owner to contract.
4. Public access by some does not invalidate another’s right to seek a compulsory licence.
5. Copyright is akin to a property right but is subject to reasonable restrictions.

19. Refusal and Unreasonable Licensing Terms

“…
108. The meaning of a word must be attributed to the context in which it is used. For giving a contextual meaning, the text of the statute must be kept in mind. An act of refusal depends upon the facts of each case.

Only because an offer is made for negotiation or an offer is made for grant of licence, the same per se may not be sufficient to arrive at a conclusion that the owner of the copyright has not withheld its work from public. When an offer is made on an unreasonable term or a stand is taken which is otherwise arbitrary, it may amount to a refusal on the part of the owner of a copyright.

109. When the owner of a copyright or the copyright society exercises monopoly in it, then the bargaining power of an owner of a copyright and the proposed licensee may not be the same. When an offer is made by an owner of a copyright for grant of licence, the same may not have anything to do with any term or condition which is wholly alien or foreign thereto. An unreasonable demand, if acceded to, becomes an unconscionable contract which for all intent and purpose may amount to refusal to allow communication to the public of the work recorded in a sound recording. A de jure offer may not be a de facto offer.

…

124. The right to property, therefore, is not dealt with in isolation when a right to property creates a monopoly to which the public must have access. Withholding the same from the public may amount to unfair trade practice. In our constitutional scheme, monopoly is not encouraged. Knowledge must be allowed to be disseminated. An artistic work, if made public, should be made available subject, of course, to reasonable terms and the grant of reasonable compensation to the public at large.

…

(Emphasis Supplied)”

Citation: Al Hamd Tradenation v. Phonographic Performance Limited, C.O.(COMM.IPD-CR) 8/2024, (H.C. Delhi, May 13, 2025). Available at: http://indiankanoon.org/doc/52174789/, Visited on: 15/05/2025.