Summary
In a decision that could have far-reaching implications for copyright licensing models followed by PPL, Novex, and others, the Delhi High Court weighed in on a long-standing debate: can copyright owners license works directly, or must they route their rights through registered copyright societies?
In Azure Hospitality Pvt. Ltd. v. Phonographic Performance Ltd., the Court held that Phonographic Performance Limited (“PPL”), though an assignee of copyrights, could not engage in the business of licensing its music repertoire without being registered as a copyright society or becoming a member of one. However, balancing the equities, it allowed Azure Hospitality Private Limited (“Azure”) to continue using the music—provided it paid licence fees at the tariff rates set by a registered society, RMPL.
Background
The dispute arose when PPL sued Azure for publicly playing music in its restaurants from PPL’s catalogue, allegedly without a licence. PPL claimed to hold copyrights over these sound recordings through assignment deeds from original producers. It also claimed that it was within its rights—as a copyright owner under Sections 18(2) and 30 of the Copyright Act—to license these recordings directly to users.
The Single Judge agreed with PPL and granted an interim injunction restraining Azure from using the repertoire without first securing a licence from PPL, and Azure appealed.
The Licensing Question
The question before the appellate court was whether PPL, as an assignee under Section 18(2), could license works under Section 30 in the course of business without being a registered copyright society as required by Section 33(1) of the Copyright Act. This question is pertinent because Section 30 permits copyright owners to license their works, and Section 33 states that only copyright societies can carry out the business of licensing.
PPL’s Stand
PPL argued in the case that copyright ownership included the right to grant licences. It relied on Section 30, which allows the owner of copyright to license any interest in the work. It further invoked the proviso to Section 33(1), which states that a copyright owner, in their individual capacity, can still license their own works even if they are a member of a copyright society.
Based on this, PPL claimed that the bar under Section 33(1)—which prohibits anyone from carrying on the business of licensing unless registered as a copyright society—did not apply to it. Since it was the assignee (and hence owner) of the works, PPL stated that it could issue licences independently.
Azure’s Submissions
Azure argued that PPL was not just licensing its own works occasionally—it was in the business of licensing, something expressly regulated under Section 33(1). As per Azure, Section 33 requires any person or entity engaged in the business of issuing licences to be either a registered copyright society or a member of one.
Azure further submitted that accepting PPL’s argument would render Section 33 meaningless and open the doors to unchecked monopolisation. If copyright assignees like PPL could license thousands of works commercially without oversight, Azure submitted that the entire regulatory structure introduced by the 2012 amendments—including transparency mechanisms like Section 33A—would be bypassed. To substantiate its arguments, Azure also placed reliance on the 227th Parliamentary Standing Committee Report, which had raised red flags about the opacity and abuse of tariff-setting by entities like PPL. The 2012 amendments, Azure argued, were a legislative response to such concerns.
The Court’s Interpretation
The Court sided with Azure’s interpretation of the law. It held that Section 33(1) imposes a clear restriction on carrying on the business of copyright licensing without registration. The proviso to Section 33(1), the Court clarified, does not override the main section—it only preserves the limited right of a member of a copyright society to license their own works in their individual capacity, and only when consistent with their obligations under that society.
More importantly, the Court found that PPL was not merely an occasional licensor but was engaged in the business of issuing licences. This brought it squarely within the scope of Section 33(1). Since PPL was neither a registered copyright society nor a member of one (its application for re-registration had been rejected post the 2012 amendment), it could not legally license the works.
The Court also rejected earlier decisions of the Bombay High Court: Novex v. Lemon Tree and Novex v. Trade Wings—that had allowed copyright owners to license works independently irrespective of the restriction under Section 33. According to the Court, these rulings overlooked the phrase “in respect of any other rights conferred by this Act” in Section 33(1), which includes licensing rights under Section 30. Ignoring that, the Court held, would reduce Section 33 to a dead letter.
Court’s Order
Despite finding PPL’s licensing business to be statutorily impermissible, the Court stopped short of granting Azure an unconditional right to play the music without paying fees. It acknowledged that PPL did hold copyrights via valid assignments, and that allowing Azure to use its works without compensation would be unfair.
To balance the equities, the Court permitted Azure to continue playing the sound recordings, provided it paid licence fees based on the publicly available tariff rates of Recorded Music Performance Limited (RMPL), the only registered copyright society for sound recordings under Section 33(3). The Court stated that this interim arrangement would continue until the final adjudication of the underlying suit.
The Court directed both parties to file three-monthly statements of usage and payments before the single judge.
Section 30 Vs. Section 33: Who can issue copyright licenses?
The relevant paras that discuss who can carry out the business of licensing read as follows:
“20. Analysis of the impugned judgment, and the legal position 20.1 The two Novex judgments on which the learned Single Judge has placed reliance, clearly hold that registration as a copyright society is not mandatory for a person to grant licenses for exploitation of sound recordings in respect of which such person is the deemed owner by virtue of Section 18(2) of the Copyright Act. In other words, these decisions hold that the proviso to Section 33(1) grants a deemed owner of copyright in sound recordings, within the meaning of Section 18(2), the absolute right to grant licenses for exploitation of such sound recordings on its own terms, unfettered by any restrictions which may apply to copyright societies, which would include the tariff envisaged by Section 33A. The proviso to Section 33(1), according to these decisions, is, therefore, essentially aimed and intended at preserving the right of the owner of copyrighted material to grant licenses for exploitation of such material, otherwise conferred by Section 30 of the Copyright Act. The right available under Section 30, in other words, cannot be said to have been undone by Section 33.
20.2 The entire issue is thorny and, perhaps, legislative intervention may lend greater clarity to the provisions involved. That said, however, we are required to interpret the provisions as they exist today.
20.3 The difficulty in accepting the interpretation of Section 33(1), and the proviso thereto, as envisaged in the Novex decisions, relied upon by the learned Single Judge, is, however, precisely the factor underscored by Mr. Dayan Krishnan, which is that, if such an interpretation is accepted, the main part of Section 33(1) may be reduced to redundancy.
20.4 This may be explained thus.
20.5 The Copyright Act does not envisage grant of license in respect of copyrighted sound recordings by any person other than the first owner of such copyrighted recordings, or the assignee thereof under Section 18. PPL is, unquestionably, the owner of the sound recordings in its repertoire, of which copyright stands assigned to it under Section 18(1). To that extent, PPL’s stand is unassailable. The two Novex decisions would, therefore, grant him an absolute right to issue licenses in respect of such recordings, on its own terms.
20.6 Such an interpretation would, however, undisputedly render the words “except under or in accordance with the registration granted under sub-section (3)”, in Section 33(1), completely otiose. Indeed, Section 33(1) would be rendered completely redundant, as it is intended only to introduce this restriction, on persons who desire to carry on the business of issuing or granting licenses in respect of copyrighted work.
20.7 It is a cardinal principle of interpretation of statutes that the Court must not adopt an interpretation which renders any part of the statutory instrument redundant or otiose.39 Efforts must be made to lend meaning and purpose to every word contained in a statute.
39 Refer Institute of Chartered Accountants of India v Price Waterhouse, (1997) 6 SCC 312 (para 15) 20.8 The two Novex decisions, as well as the impugned judgment of the learned Single Judge, do not specifically advert to this issue.
20.9 The fact that every association of persons which carries on the business of granting licences in respect of copyrighted work has to do so in accordance with the registration granted under Section 33(3) – which would require it to either be a registered copyright society or a member of a registered copyright society – also stands clearly recognized by the first proviso to Section 33(1).
20.10 In our view, the first proviso to Section 33(1) proceeds on the accepted premise that the owner of copyright, who carries on the business of issuing or granting licences in respect of copyrighted works, is a member of a registered copyright society. Any other reading of the proviso would require according, to it, a strained, unnatural and illogical connotation. The proviso, even while allowing an owner of copyright to, in his individual capacity, retain the right to grant licences in respect of his own works, clearly states that the exercise of this right has to be consistent with his obligations as a member of the registered copyright society. There is no escaping the position, in our considered view, that the concerned copyright owner, who desires to grant licences in respect of his own works, has, firstly, to be a member of a registered copyright society, and, secondly, can exercise the right to grant licences in respect of his own works only consistent with its obligations as such member. The requirement of being a member of a registered copyright society, whether under Section 33(1) or under the first proviso thereto is, therefore, in our considered opinion, absolute and non-negotiable.
21. The sequitur The position that ultimately obtains is, therefore, the following:
(i) The obligation under Section 33(1) is absolute. Section 33(1) requires any person, who carries on the business of granting licenses in respect of copyrighted works, to do so in accordance with the registration granted under Section 33(3).
(ii) Be it noted, this sub-section does not specifically state that the person issuing or granting licenses must itself be registered as copyright society under Section 33(3). The issuance of granting of licenses has only to be in accordance with the registration granted under Section 33(3).
(iii) This is also apparent from the proviso to Section 33(3), which ordinarily permits the central government to register only one copyright society in respect of one class of works. Sound recordings constitute a distinct and individual class of works under Section 2(y)(iii). Thus, ordinarily there would be only one registered copyright society in respect of sound recordings.
Such a registered copyright society, we are informed, is already in existence in the form of RMPL.
(iv) The word “carrying on the business of issuing or granting licenses” in Section 33(1) would envisage every commercial activity in which licenses in respect of copyrighted works are issued or granted. There is no legitimate basis to read down the ambit of the expression “carry on the business”, particularly the word “business”.
(v) In any event, it is an admitted position that PPL is engaged in carrying on the business of issuing or granting of licenses in respect of the sound recordings assigned to it by the original copyright owners.
(vi) PPL can, therefore, issue or grant licenses in respect of the sound recordings assigned to it, of which it can claim ownership under Section 18(2), only in accordance with the registration granted under Section 33(3).
(vii) The use of the words “consistent with his obligations as a member of the registered copyright society”, contained in the proviso to Section 33(1) are of great significance. They clearly indicate that the legislature envisages any person who is granting licenses in respect of copyrighted works as being a member of a registered copyright society. It would be unrealistic and strained to read the words “consistent with his obligations as a member of the registered copyright society” as contained in the proviso to Section 33(1) as applying only to a situation in which the copyright owner happens to be such a member. Clearly, at the cost of repetition, it is clear that Section 33(1) envisages that the copyright owner, who is issuing or granting licenses in respect of the copyrighted works of which he is the owner, is a member of a registered copyright society.
(viii) This interpretation would also harmonise with the well- settled principle that a proviso to a section cannot derogate or detract from the ambit of the section itself. It has to be read harmoniously with the main section, and cannot dilute its efficacy.40 The requirement of any person engaged in the business of issuing or granting licenses in respect of copyrighted works, contained in Section 33(1) cannot, therefore, be diluted, much less eviscerated, by the proviso thereto.
(ix) Thus, what the proviso permits is that such a member of a registered copyright society, who may also be holding copyright in respect of his own works – which expression has necessarily to be contradistinguished with the works of which he claims ownership merely as an assignee under Section 18(2) – has the right to grant licenses in respect of such works. Even so, such grant of licenses has to be consistent with the obligations of such a person as a member of the registered copyright society.
(x) Viewed any which way, therefore, there can be no escaping the position that issuance or grant of licenses for exploiting of works in respect of which a person claims 40 Refer Sales Tax Commissioner v B.G. Patal, 1995 Supp (1) SCC 429 copyright can only be done if such person is a registered copyright society or a member of a registered copyright society.
22. Re. the two Novex decisions The judgments in the two Novex decisions, of the learned Single Judge of this Court and the High Court of Bombay, have placed reliance on Section 30 to except PPL from the requirement of being a member of a registered copyright society. In para 31 of the impugned judgment, learned Single Judge notes, as one of the principles contained in Novex v Trade Wings, postulate that “Section 33(1) of the Copyright Act does not curtail the power of the owner to grant any interest in the copyright by license under Section 30 of the Copyright Act and that Sections 30 and 33 operate in separate chapters of the Copyright Act”. 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 requirement of acting in accordance with the registration granted under Section 33(3), even while issuing or granting licenses in respect of copyrighted works would, therefore, also cover the rights conferred by Section 30. In other words, while exercising the right conferred by Section 30, to issue licenses in respect of the works assigned to it, in respect of which it claims ownership under Section 18(2), PPL has still to act in accordance with the registration granted under Section 33(3).
23. 227th report of the PSC 23.1 The 227th report of the PSC, on which Mr Dayan Krishnan relies, supports the interpretation that we have adopted. The report was tabled at a time when PPL was a registered copyright society. One of the objections to the introduction of Section 33A in the Copyright Act, as voiced before Parliament by, inter alia, PPL, was that the provision would unreasonably hinder the rights of producers/sound recording labels to enter into private agreements with licencees. In other words, regulation of the tariff rates at which exploitation of the copyrighted sound recordings could be allowed, was strongly opposed. The PSC noted that, even during deliberations, the copyright societies, including PPL, was not forthcoming about its tariff schemes despite being specifically queried in that regard. Lack of transparency in the matter of the tariffs at which exploitation of the sound recordings was allowed, was also flagged as a cause of concern, in para 17.7 of the report of the PSC. This resulted in “arbitrariness” and “arm twisting”. The proposed Section 33A was, therefore, felt to be serving a salutary purpose, of introducing transparency in the tariff scheme, as well as a right of appeal, by aggrieved persons, before the Copyright Board.
23.2 We, in the circumstances, find prima facie substance in Mr Dayan Krishnan’s contention that PPL cannot be permitted to, without registering itself as a copyright society or becoming a member of any registered copyright society, issue or grant licences for the sound recordings in its repertoire at any rate palatable to it. The entire purpose of introducing Section 33A in the Copyright Act would, thereby, stand frustrated. Section 33(1) could plainly be avoided by neither registering oneself as a copyright society, nor becoming a member of any registered copyright society. This would, as Ms Swathi Sukumar submitted, frustrate not only Section 33, but, in fact, Chapter VII of the Copyright Act itself, in its entirety. The requirement of being a member of a registered copyright society, which is clearly intended by the legislature to be mandatory, would become dispensable.
24. The corollary 24.1 We, therefore, are unable to accept the principle that PPL was entitled, without either registering itself as a copyright society or becoming a member of any registered copyright society, to issue licenses in respect of the sound recordings assigned to it under Section 18(1) of the Copyright Act. ”
Citation: Azure Hospitality Pvt. Ltd. v. Phonographic Performance Ltd., FAO(OS)(COMM) 41/2025 (H.C. Delhi Apr. 15, 2025). Available at: https://indiankanoon.org/doc/66876097/, Visited on: 16/04/2025.
