Lahari Recording Company Limited v. Music Master Audio Video Manufacturing Co.(P) Ltd.

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED:03.03.2008CORAM:THE HONOURABLE MR.JUSTICE S.J.MUKHOPADHAYAANDTHE HONOURABLE MR.JUSTICE M.VENUGOPALO.S.A.No.19 of 2002Lahari Recording Company Limited,Rep. By its Managing Director... Appellant/5th Defendant Vs.1.Music Master Audio Video Manufacturing Co.(P) Ltd., Rep: by its Director, Mr.Ghanshyam2.Raja Music Universal, rep: by its Partner R.Jeevaraja, No.12, Padmanabhan Street, T.Nagar, Chennai-600 017.3.Bharat Film Distributors, rep. By its Managing Partner M.S.Guhan, No.38, Arcot Road, Vadapalani, Chennai-600 026.4.The Master Recording Company, No.97-C, III Street, Kumaran Colony, Vadapalani, Chennai-600 026.5.S.Eknath, Proprietor, Eknath Audio, 193, Anna Salai, Chennai-600 006.... Respondents/Plaintiff and(Respondents 2 to 5 are not necessaryDefendants 1 to 4 parties for this appeal. Hence, they are given up)Prayer: Appeal filed under Order XXXVI Rule 1 of the O.S. Rules andClause 15 of the Letters Patent Appeal against the Judgment andDecree dated 7th March, 2001 in C.S.No.385 of 1998 passed by thelearned Single Judge of this Court. https://hcservices.ecourts.gov.in/hcservices/ For Appellant: Mrs.Meera Gupta For M/s.Surana and SuranaFor 1st Respondent: Mr.K.Harishankar For Mr.C.RameshJUDGMENTM.VENUGOPAL,J.This Original Side Appeal is preferred by the appellant/5thdefendant as against the Judgment and Decree passed by the learnedsingle Judge on 07.03.2001 in C.S.No.385 of 1998.2.The first respondent/plaintiff has filed a suit C.S.No.385 of1998 praying for a declaration that the first respondent/plaintiffis the absolute owner of limited copy right viz., the audio rightsin the pictures described in Schedule A and B of the plaint forperpetual period to commence from the date mentioned against eachpicture and for permanent injunction restraining the respondents/defendants, their men, agents, servants or any other person actingon their behalf from infringing the plaintiff's limited copy right.3.After contest, the learned single Judge in the suit hasgranted the declaratory relief that the plaintiff is entitled to therelief of limited copy right viz., audio right in respect ofmanufacturing and marketing audio cassettes of the films mentionedin A and B Schedule of the plaint except two pictures in respect ofwhich a compromise decree has been passed and also granted therelief of permanent injunction restraining therespondents/defendants from infringing the firstrespondent/plaintiff's limited copy right viz., the audio rights inrespect of the pictures mentioned in A and B Schedule of the plaintexcept two pictures.4.Aggrieved against the said Judgment and Decree passed by thelearned single Judge in C.S.No.385 of 1998 on 07.03.2001, theappellant/5th defendant has filed the present appeal before thisCourt.5.According to the learned counsel for the appellant/ 5thdefendant, the learned single Judge has not taken into considerationthe averment made in the written statement and the evidence of D.W.1to the effect that the appellant/5th defendant has stoppedmanufacturing cassettes after the expiry of the copy right periodand therefore, erred in granting the permanent injunction and thatthere is no proof that the appellant/5th defendant has infringed the https://hcservices.ecourts.gov.in/hcservices/ copy right of the first respondent/plaintiff and when theappellant/5th defendant has not manufactured and marketed the audiocassettes, certainly no relief of permanent injunction could havebeen granted on the facts and circumstances of the case and in anyevent the relief of permanent injunction ought not to have beengranted against the appellant/5th defendant and therefore, prays forallowing the appeal.6.The plea of the appellant/5th defendant is also to the effectthat the first respondent/plaintiff ought not to have filed a singlesuit against all the defendants in respect of the films coveredunder A and B Schedule of the plaint, inasmuch as the appellant/5thdefendant is concerned, only with 42 films described in serial No.1to 42 in A Schedule of the plaint.7.The appellant/5th defendant also takes a stand that since thefirst respondent/plaintiff claims rights as against defendants 2 to5 as per Ex.A.1-Agreement in respect of various pictures, therecannot be either misjoinder of parties or misjoinder of causes, inthe eye of law.8.The first respondent/plaintiff in the plaint has averred thatthey acquired exclusive rights to make and release copies in theform of Audio Cassettes and Compact Discs from the secondrespondent/first defendant who were holding the rights in thepictures, the details of which are given in the Schedule as perAgreement dated 12.06.1997 for valuable consideration and the saidrights were assigned to the first respondent/plaintiff forexploitation in India and that the 5th respondent/4th defendantseems to have assigned audio rights in certain pictures to theappellant/5th defendant and that the first respondent/plaintiffunderstands from the second respondent/first defendant that theassignment in favour of the appellant/5th defendant came to an endby March 1997 and that the appellant/5th defendant inspite of theassignment period which has come to an end, is continuing to exploitthe audio rights in the pictures described in the plaint scheduleand the said exploitation made by the appellant/ 5th defendant isillegal and in infringement of first respondent/plaintiff's limitedcopy right and therefore, the first respondent/plaintiff has filedthe suit for declaration of its limited copyright and for the reliefof permanent injunction restraining the defendants.9.The appellant/ 5th defendant in the written statement filedhas stated that it has not exploited the audio rights in thepictures described in the schedule to the plaint or any of them andthat the allegation that the appellant/ 5th defendant is illegally https://hcservices.ecourts.gov.in/hcservices/ marketing the cassettes is also denied and that the appellant/ 5thdefendant has stopped exploiting, manufacturing or marketing afterthe period of its assignment was over and however, the cassetteswere already in the market with various dealers and whatevercassettes were already in the market with a dealers were beyond thecontrol of the appellant/ 5th defendant, since the distributors willbe selling them everyday and that as against the appellant/ 5thdefendant, there is no cause of action and that suit is liable to bedismissed.10.The learned counsel for the first respondent/ plaintiffcontends that when there is an infringement of the right of firstrespondent/plaintiff, then the first respondent/plaintiff isentitled to file a suit praying for a relief of declaration andinjunction and in support of his proposition relied on AIR (32) 1945Allahabad 55 Om Prakash and another V. Pt.Radhey Shyam Kathawachak,whereby and whereunder it is laid down as follows:"The language of S.2, Imperial Copyright Act, whichdefines the infringement of copyright is wide enough toinclude not only a sale of the copyright by a person notentitled to sell the same but also an attempted sale.Accordingly an advertisement by the defendant claiming aright in a copyright which was owned by the plaintiff andoffering to sell the same constitutes an infringement ofthe right and the plaintiff can in such a case claim adeclaration and if necessary an injunction under S.13:(1914) 1.K.B. 395 and (1926) 2 K.B. 474, Rel. on".11.He also relied on the observation made in the aforesaiddecision at page 57 which runs as follows:"Under S.1, sub-s(2), Imperial Copyright Act, 'copyright'means the sole right to produce or reproduce the work etc.Under S.2, Imperial Copyright Act, a "copyright in a work shall be deemed to be infringed byany person who, without the consent of the owner of thecopyright, does anything the sole right to do which is bythis Act conferred on the owner of the copyright ..."12.The learned counsel for the first respondent/ plaintiffpressed into service the observation made in the aforesaid decisionwith reference to Halsbury's Laws of England, Hailsham Edn. Vol.7,para. 891 at p.575, wherein it is observed as follows: https://hcservices.ecourts.gov.in/hcservices/ "It is also an infringement of copyright to grant orpurport to grant to a third person the-right to do an actwhich, if done, would infringe copyright, whether theintention is that the grantee shall do the act on his ownaccount, or only on account of the grantor. Thus it is aninfringement of copyright to let the right of performinga cinematograph film in public, to advertise a proposedexhibition of a cinematograph film, to purport to sellthe right to print and publish a manuscript, or to sell agramophone record with a view to its public performance,where the acts contemplated would, if done, constituteinfringements of copyright".13.He also drew attention to (1914) 1 K.B. 395 (1914) 1 K.B.395 Monckton V. Pathe Freres Pathephone Ltd., Buckley L.J at page403, wherein it is held as follows:"..... copyright includes the sole right to authorize theperformance of the work. The seller of a recordauthorizes, I conceive, the use of the record, and suchuser will be a performance of the musical work. Thisconsideration seems to show that sub-2. itself is notconfined to making but extends to sale".14.In this connection, it is useful to refer to the evidence ofP.W.1-Dayalan, Manager of the first respondent/ plaintiff Company tothe effect that the second respondent/ first defendant was havingcopyright over various films with regard to audio right and that thefirst respondent/ plaintiff and the second respondent/firstdefendant have entered into an agreement on 12.06.1987 whereby thefirst respondent/plaintiff has purchased the audio rights for about109 Tamil and Telugu pictures which are mentioned in the schedule ofthe Ex.A.1 agreement and in pursuance of the same, the firstrespondent/plaintiff are manufacturing audio cassettes and that thesecond respondent/first defendant has handed over to the firstrespondent/plaintiff the Master cassette for these pictures and thatthe second respondent/first defendant has previously sold thecopyrights in respect of audio rights, in regard to those films,previously to the defendants 2 to 5 for a period of five years,which has come to an end in 1997 prior to their agreement and thatthe defendants continued to manufacture audio cassettes includingthe first respondent/plaintiff's cassettes and that the firstrespondent/plaintiff has produced the photo copies of the agreemententered into between the second respondent/first defendant with D2to D5 and that he first respondent/plaintiff has paid Rs.22,50,000/-for assignment of copy rights, audio rights for pictures mentionedand therefore pray for injunction restraining the defendants frominfringing their copy rights. https://hcservices.ecourts.gov.in/hcservices/

15.D.W.1-R.Kannan, the Accountant of the appellant/5thdefendant has deposed that the appellant and the 5th respondent/4thdefendant has entered into an agreement in respect of audio rightsfor 42 pictures mentioned in the plaint schedule and that the periodhas come to an end in July 1980 and thereafter, the appellant/5thdefendant did not manufacture any audio cassettes in respect of bothand that neither the first respondent/plaintiff nor the 5threspondent/4th defendant has ever sent any notice that the appellantis manufacturing cassettes even after the expiry of the agreementperiod.16.It is significant to point out that neither P.W.1-Dayalannor D.W.1-R.Kannan has been cross examined.17.Generally, it is to be pointed out that the vital reliefagainst infringement is one of injunction. Admittedly, the remedy ofgranting injunction is in the discretion of the Court and the Courthas to weigh the possible damage to the party if an injunction isnot given against the possible damage to the defendant if it isgranted. Therefore, it is quite evident that once the infringementand its continuance is proved, a party as plaintiff will generallybe entitled to the relief of injunction. However, the relief ofinjunction will not be granted if the damage caused to the defendantby granting the injunction be out of all proportion to theseriousness of the infringement or to the possible damage to theplaintiff.18.In AIR 1979 Madras at page 56 R.M.Subbiah and another V.N.Sankaran Nair and another, it is laid down as follows:"Injunction being an equitable remedy, which is granted bya Court in exercise of its judicial discretion has to beconsidered from various facets which arise from aparticular set of circumstances in each case. There may becases in which the grant of an injunction temporary orpermanent will only meet the ends of justice and analternative safeguard for the preservation of the rightsof the challenging party cannot at all be thought of.There may be also cases where the remedy of injunction hasto be made flexible and adjustable to the situationsarising in each case. A rigid invocation withoutcontemplating elasticity in the application of the rule asto the grant of injunction might sometimes result inhardship which cannot later be cured". https://hcservices.ecourts.gov.in/hcservices/

19.As a matter of fact, before the Court exercising hisjurisdiction to grant the relief of injunction will also to besatisfied that the inconvenience or comparative mischief which islikely to arise from withholding an injunction will be greater thanthat which is likely to arise from granting it.20.If an individual without the consent or licence of the ownerof the copyright does or authorise the doing of an act to issue thecopies of the work to the public not being copies already incirculation, or distribute infringing copies either for the purposeof trade or to such an extent as to effect prejudicially the ownerof the copyright or to reproduce the work in any material formincluding the storing of it in any medium by electronic means hewill be infringing the copyright work as per Section 51 read withSection 14(a) and Section 14(b) of the Copyright Act, 1957. Nodoubt innocence is no defence to a charge of infringement ofcopyright and the offence is completed even if the offenderauthorises the infringement innocently as per decision AIR 1930Privy Council page 314 Performing Right Society Limited V. UrbanDistrict Council of Bray.21.In F.Hofmann – La Roche A.G. V. Secretary of State for Tradeand Industry (1975) A.C. 295, H.L., a higher test for proving astrong prima facie case is emphasised. However, in Cyanamid CompanyV. Ethicon Limited (1975) A.C. 396, H.L., the higher test of strongprima facie is replaced with the test of whether there is a seriousquestion to be tried.22.It is not out of place to point out that there are two typesof damages available to the owner of a copyright, 1.as per Section55 for an infringement and the other under Section 58 forconversion. Only if an infringement is established, damages can bepresumed. General damages does not require specific proof. Whereasspecial damages should be pleaded and proved. Moreover, theCopyright Act, 1957 does not contain any specific provision foradditional damages in case of flagrant infringement.23.It is useful to refer to Ex.A.1-Agreement dated 12.06.1997entered into between the second respondent/first defendant (rightsholder) and the first respondent/ plaintiff company (assignee)which refers to the licence period of five years, the rights tomanufacture and the sell prerecorded cassettes to various companiessuch as Raja Cassettes Recording Company, Eknath Audio, Bharat FilmDistributors and the Master Recording Company and that the rightsholder is the copyright owner of, having acquired them from variousproducers, the audio rights of films for which it had licenced outfor a period of five years etc. https://hcservices.ecourts.gov.in/hcservices/

24.In an agreement dated 24.02.1992 between the M/s.RajaCassette Recording Company and the 5th respondent/ 4th defendant,M/s.Eknath Audio clause 6 speaks of the Assignors declaration (RajaCassette Recording Company) that they will not exploit the market,or otherwise deal with the Audio Rights, thus granted to theAssignee (5th respondent/4th defendant) during the period of theagreement.25.The Agreement dated 17.06.1993 entered into between theappellant/5th defendant and the 5th respondent/4th defendant refersto the averments which are as follows:"WHEREAS the party of the second part has acquired IndianRights of the audio rights, manufacturing and marketingof Audio Cassettes and Gramaphone recording only withrespect to various movies from various producers underdifferent dates of agreements for a period of five yearsfrom the date of original agreement to the party of thesecond part (5th respondent/4th defendant).The party of the second part (5th respondent/4thdefendant) hereby grant, assign and agree to transfer tothe party of the first part absolutely free from allencumbrances for the remaining period of five years inthe party of the second part in respect of the films setout in the Annexure to make Gramaphone records and AudioCassettes of songs and dialogues for Indian Territoryonly, in consideration of the party of the second parthaving made a payment of Rs.16,99,000/- The right vestedin the party of the second part to the party of the firstpart is detailed in the Annexure to this agreement".Further, the clause 4 and 5 of the aforesaid agreement enjoinas follows:"4.It is also agreed between the parties that the party ofthe second part shall not from this date of agreement makeany further records and cassettes of songs and dialoguesfrom recording and shall also return to the party of thefirst part all the unused cassettes of total No. forthe rates and value agreed upon between the parties ofTotal amount 2.81,711.5 and also made the payment by wayof cheque No.653466 and 653467 dated 3.7.93 and 10.9.93drawn on Federal Bank Limited, Bangalore.5.The party of the second part also agrees that they shalldestroy all the unused labels and also agrees not to usethe same from the date of this agreement". https://hcservices.ecourts.gov.in/hcservices/

26.In C.S.No.385 of 1998 a decree was passed by this Court on17.04.2000 as against the second defendant as per the clauses foundtherein as per the memorandum of compromise and as against otherdefendants and suit was ordered to be pending.27.In C.S.No.385 of 1998 on 17.11.2000 this Court has dismissedthe suit against the second defendant since an understanding wasarrived at between them and that the said suit was adjourned to24.11.2000.28.As far as the present case is concerned that though thefirst respondent/plaintiff has taken a plea in the suit that theappellant/5th defendant after its period of assignment expired iscontinuing to exploit the audio rights in the pictures described inthe schedule to the plaint by infringing the firstrespondent/plaintiff's limited copyright and the same being deniedby the appellant/5th defendant stating that it has stoppedexploiting, manufacturing or marketing after period of itsassignment was over and further that the appellant has stoppedmanufacturing cassettes after the expiry of the period of itscopyright, there is no evidence of manufacturing or marketing orselling the audio rights or audio cassettes by the appellant/5thdefendant after the expiry of assignment period and further thatwhatever that were in the market that will be sold by thedistributors every day, the first respondent/plaintiff is notentitled to claim the relief of permanent injunction in so far asthe appellant/5th defendant is concerned, in our definiteconclusion.29.Regarding the misjoinder of cause of action or themisjoinder of party, it is to be noted that the plaintiff can joinseveral cause of action in one suit to avoid multiplicity ofproceedings and as far as the appellant/ 5th defendant isconcerned, the suit filed by the first respondent/plaintiff ismaintainable in law notwithstanding the fact that the appellant/5thdefendant is concerned only with 42 films mentioned in Serial No.1to 42 in Schedule A to the plaint. 30.Therefore, in sum and substance, there is no illegality inthe suit filed by the first respondent/ plaintiff joining severalcauses of action in one suit against the defendants and the same ispermissible under Or.1 R.3 and Or.2 R.3 of C.P.C. which postulatethat the question of joinder of parties also involves the joinderof causes of action as per decision (1999) 3 SCC 457 Isuar BhaiC.Patel alias Bachu Bhai Patel V. Harihar Behra and Another. In https://hcservices.ecourts.gov.in/hcservices/ regard to the declaratory relief that the firstrespondent/plaintiff is the absolute owner of copyright, thefinding of the learned single Judge in this regard in so far as theappellant/5th defendant is concerned, we are not interfering withthe same. However, in regard to the relief of permanent injunctionas against the appellant/5th defendant, we are of the opinion thatthe first respondent/ plaintiff has not established conclusively tosatisfy the conscious of this Court that the appellant/5th defendanthas manufactured or marketed or sold the audio rights or audiocassettes after the expiry of the assignment period and in thatview of the matter, we set aside the Judgment of the learned singleJudge granting the relief of permanent injunction against theappellant/5th defendant and dispose of the present appeal in aboveterms. Bearing in mind the facts and circumstances of the case,there shall be no order as to costs. sglSd/-Asst. Registrar./true copy/Sub Asst. Registrar.ToThe SAR,Original Side,High Court, Madras.1 cc to M/s.Surana & Surana, Advocate, SR.116951 cc to Mr.C.Ramesh, Advocate, SR.11833la (co)dv/20.3.Judgment in O.S.A.No.19 of 2002