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Supreme Court of India
Saregama India Limited vs Next Radio Limited on 27 September, 2021Author: Hon’Ble Dr. Chandrachud
Bench: Hon’Ble Dr. Chandrachud, B.V. Nagarathna
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal Nos 5985-5987 of 2021
(Arising out of SLP (Civil) Nos 14972-14974 of 2021)
Saregama India Limited …. Appellant(s)
Versus
Next Radio Limited & Ors ….Respondent(s)
WITH
Civil Appeal Nos 5988-5990 of 2021
(Arising out of SLP (Civil) Nos 15108-15110 of 2021)
JUDGMENT
Dr. Dhananjaya Y. Chandrachud, J
1 Leave granted.
2 These appeals arise from an interim order dated 2 August 2021 of a Division Bench of
the High Court of Judicature at Madras in a batch of petitions. The writ petitions
Signature Not Verified
have been instituted before the High Court under Article 226 of the Constitution to
Digitally signed by
challenge the validity of Rule 29(4) of the Copyright Rules 2013 1. The High Court has,
Sanjay Kumar
Date: 2021.09.28
19:02:53 IST
Reason:
by its interim order, directed that:
1“Rules”
2
(i) No copyrighted work may be broadcast in terms of Rule 29 without issuing a
prior notice;
(ii) Details pertaining to the broadcast, particularly the duration, time slots and
the like, including the quantum of royalty payable may be furnished within
fifteen days of the broadcast or performance;
(iii) Compliance be effected with a modified regime of post facto, as opposed to
prior compliance mandated by Rule 29(4) and the statutory mandate of a
twenty four hour prior notice shall be substituted by a provision for
compliance within fifteen days after the broadcast; and
(iii) The interim order will be confined to the petitioners before the High Court and
the copyrighted works of the second and third respondents which are sought
to be exploited.
3 The primary submission which has been urged on behalf of the appellants is that
the interim order of the High Court has the effect of re-writing Rule 29(4) of the Rules
framed in pursuance of the provisions of Section 31D and Section 78(2)(cD) of the
Copyright Act 1957 2.
4 Mr Mukul Rohatgi and Mr Akhil Sibal, learned Senior Counsel, have appeared on
behalf of the appellants. Mr Navroz Seervai and Mr Neeraj Kishan Kaul, learned
Senior Counsel, have appeared on behalf of the contesting respondents, who are
the original petitioners before the High Court.
5 Since the interim direction has been issued in the writ petitions moved before the
High Court and the petitioners before the High Court are represented in these
2“Act”
3
proceedings through counsel, on caveat, we are disposing of the appeals at this
stage.
6 The batch of writ petitions before the High Court is listed for final disposal on 4
October 2021. A grievance has been made on behalf of the contesting
respondents that the appellants have not filed counter affidavits in response to the
petitions. The learned counsel appearing on behalf of the appellants assured the
Court that they would do so expeditiously, well before the next date of listing so as
to facilitate the final disposal of the writ petitions.
7 The facts, insofar as they are necessary for the disposal of the present appeals,
which arise from the interim order of the High Court, can be briefly visited.
8 By the Copyright Amendment Act 2012, Parliament incorporated the provisions of
Section 31D which were brought into force on 21 June 2012. Section 31D is in the
following terms:
“31D. Statutory licence for broadcasting of literary and
musical works and sound recording.–(1) Any
broadcasting organisation desirous of
communicating to the public by way of a
broadcast or by way of performance of a
literary or musical work and sound recording
which has already been published may do so
subject to the provisions of this section.
(2) The broadcasting organisation shall give prior
notice, in such manner as may be prescribed,
of its intention to broadcast the work stating
the duration and territorial coverage of the
broadcast, and shall pay to the owner of rights
in each work royalties in the manner and at
the rate fixed by the Commercial Court.
(3) The rates of royalties for radio broadcasting
shall be different from television broadcasting
and the Commercial Court shall fix separate
rates for radio broadcasting and television
broadcasting.
4
(4) In fixing the manner and the rate of royalty
under sub-section (2), the Commercial Court
may require the broadcasting organisation to
pay an advance to the owners of rights.
(5) The names of the authors of the principal
performers of the work shall, except in case of
the broadcasting organisation communicating
such work by way of performance, be
announced with the broadcast.
(6) No fresh alteration to any literary or musical
work, which is not technically necessary for the
purpose of broadcasting, other than
shortening the work for convenience of
broadcast, shall be made without the consent
of the owners of rights.
(7) The broadcasting organisation shall–
(a) maintain such records and books of account,
and render to the owners of rights such reports
and accounts; and
(b) allow the owner of rights or his duly authorised
agent or representative to inspect all records
and books of account relating to such
broadcast, in such manner as may be
prescribed.
(8) Nothing in this section shall affect the
operation of any licence issued or any
agreement entered into before the
commencement of the Copyright
(Amendment) Act, 2012.”
9 Under sub-section (1) of Section 31D, a broadcasting organization which is desirous
of communicating to the public by way of a broadcast or performance of a literary
or musical work and sound recording which has already been published, may do so
subject to compliance with the provisions of the Section. Sub-Section (2)
incorporates five requirements, namely: (i) a prior notice; (ii) in the manner
prescribed; (iii) of the intention to broadcast the work; (iv) stating the duration and
territorial coverage of the broadcast; and (v) payment to the owner of rights in
each work royalties in the manner and at the rate fixed by the Appellate Board.
5
10 Applications were filed by several broadcasters before the Intellectual Property
Appellate Board 3 seeking the determination of the rates for the purpose of a
statutory license under Section 31D (together with the provisions of Rules 29 to 31 of
the Rules), for the communication of sound recordings to the public by way of
broadcast through FM radio. For several years, the Copyright Board was not duly
constituted. In 2017, the Copyright Board merged with the IPAB as a result of a
statutory amendment. By an order dated 31 December 2020, the IPAB determined
the rates of royalty and payment mechanism for the communication of sound
recordings by way of FM radio broadcasts, under Section 31D. The order of the
Copyright Board, insofar as it is material, contains the following directions:
“215. We hereby direct that the above mentioned
royalty rates set out in para 149 for
broadcasting sound recordings payable
respectively for the sound recording and for
the underlying literary and musical works as
envisaged under Section 31D with effect from
1st October 2020 to 30th September 2021. We
further direct that:
a. The above royalty rates shall be published in
the IPAB Website and Copyright Office
website.
b. The new royalty rates comes into effect from
01.10.2020.
c. The radio broadcasters have to pay the
arrears of royalty to the music companies on
or before 10.02.2021 for the period of
01.10.2020 to 31.01.2021. As far as royalty fixed
by us for underlying works of sound recording is
concerned, the same shall be distributed as
per the amended provision of proviso 3 & 4 of
Section 18 and 19 of the Act. With regard to
receipt of royalty from the broadcasters
pertaining to sound recording which has been
3 “IPAB”
6
fixed by us, the broadcasters shall pay the
same to PPL on behalf of their members, rest of
the same shall be paid directly to the
respective parties. Similarly, the share of author
and composer fixed by us for underlying works
shall be fixed by IPRS on behalf of the authors
and composers being members to be paid.
The non-members of the IPRS shall be entitled
to receive the royalty directly from the
broadcasters.
d. The radio broadcasters have to comply with
Rule 29 of the Copyright Rules, 2013 to obtain
statutory license from the music companies,
by giving advance notice to the owner of the
copyright along with an advance payment as
per the above royalty calculation with effect
from 01.02.2021. The same notice copy has to
be sent to the Registrar of Copyrights for
records.
e. In case, the respondents would insist for
advance payments as mentioned in the Rules,
we are of the view that since COVID 19
pandemic is an unusual thing to happen in the
year 2020. The lockdown to tackle the Covid
crisis had not only affected the radio industry,
but every other industry in the country.
Considering the peculiar circumstances till
30.09.2021, we direct all the broadcasters to
deposit 25% (twenty five percent) as advance
amount under the compliance of Rule 29,
subject to adjustment of amount every
calendar month.
f. As far as regional songs and small
broadcasters having one or two radio stations
having total gross income of less than 10
crores, they are free to negotiate with the
music companies under Section-30 of the Act
as per earlier practise either to play in
lumpsum or as per terms and conditions
decided by them.
g. The royalty rates shall be reviewed by the
Board as per Rule 31(9) at the end of the said
period either suo motto or on the application
by any interested person.
h. The rate determined under these proceedings
will act as a base for future revision/change in
the rates, where this entire process need not
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be replicated, except taking into
considerations, change in the financial details,
paying capacity of the Radio Broadcasters,
the effect of pandemic and all other relevant
factors etc. which have been given due
consideration.
i. All the Petitions are allowed in terms of the
royalty determined hereinabove.
j. Indian Performing Rights Society/Authors
(lyricists & music composers) are also entitled
to claim their share of royalty from the
assignee.
k. No costs.”
(emphasis supplied)
11 The order of the IPAB is stated to have been challenged by the copyright owners,
on the one hand. On the other hand, suits are pending before the High Court of
Delhi and the High Court of Judicature at Bombay. This is not the bone of
contention in the present case.
12 Rule 29 of the Rules, insofar as it is material, contains the following requirements:
“29. Notice to owner for communication to the public
of literary and musical works and sound recordings.—
(1) Any broadcasting organisation desirous of
communicating to the public by way of broadcast or
by way of performance of a published literary or
musical work and sound recording under sub-section
(1) of Section 31-D shall give a notice of its intention to
the owner of the copyright and to the Registrar of
Copyrights before a period of five days in advance of
such communication to the public and shall pay to
the owner of the copyright, in the literary or musical
work or sound recording or any combination thereof,
the amount of royalties due at the rate fixed by the
Board in this regard:
Provided that in case of communication to the public
by way of broadcast or by way of performance of a
newly published literary or musical work or sound
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recording or any combination thereof, which has
been published within the said period of five days of
such communication and which do not form part of
the scheduled programmes, the notice shall, be given
before such communication to the public:
Provided further that in case of communication to the
public by way of broadcast or by way of performance
of any published literary or musical work and sound
recording or any combination thereof, in unforeseen
circumstances, the notice shall, be given within
twenty-four hours of such communication to the
public:
Provided also that any broadcasting organisation shall
give a notice under this chapter only after the royalty
to be paid is determined by the Board under Rule 31
and published in the journal and in the website of the
Copyright Office and the Board.
(2) Every such notice shall be in respect of works
belonging to one owner only.
(3) Separate notices shall be given for communication
to public by way of radio broadcast or television
broadcast or by way of performance of a literary or
musical work and sound recording which has already
been published.
(4) The notice under sub-rule (1) shall contain the
following particulars, namely—
(a) Name of the channel;
(b) Territorial coverage where communication to
public by way of radio broadcast, television
broadcast or performance under sub-rule (3) is to be
made;
(c) Details necessary to identify the work which is
proposed to be communicated to the public by way
of radio broadcast, television broadcast or
performance under sub-rule (3);
(d) Year of publication of such work, if any;
(e) Name, address and nationality of the owner of
the copyright in such works;
(f) Names of authors and principal performers of
such works;
(g) Alterations, if any, which are proposed to be
made for the communication to the public by way of
radio broadcast, television broadcast or performance
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of the works, reasons thereof, and the evidence of
consent of the owners of rights, if required, for making
such alteration;
(h) Mode of the proposed communication to
public, i.e. radio, television or performance;
(i) Name, if any, of the programme in which the
works are to be included;
(j) Details of time slots, duration and period of the
programme in which the works are to be included;
(k) Details of the payment of royalties at the rates
fixed by the Board; and
(l) Address of the place where the records and
books of accounts are to be maintained for inspection
by the owner of rights.”
13 Rule 29(4) has been challenged before the High Court on the ground that it (i)
violates Article 19(1)(a) of the Constitution; and (ii) is ultra vires Section 31D of the
Act.
14 The High Court, in the course of its interim order, observed:
“3. Prima facie, there appears to be an element of
unworkability about the Rule in that it may be
seen to be almost claustrophobic in its
operation and leaving very little room for
flexibility. Indeed, the very concept of speaking
or performing ad lib, which is the essence of
spontaneity in any live speech or live
performance, would be lost if pre-planned
details, down to the every second of the
programme must be disclosed as the
impugned Rule may be read to imply.”
The High Court was of the view that the duty which is cast on broadcasters in the
notice to broadcast under Rule 29(1) is “apparently onerous”. Consequently, it
directed that the petitioners before it may be permitted to resort to the second
proviso to Rule 29(4) as a “routine procedure”, instead of an exception, subject to
the duration of the ex post facto reporting being enlarged to fifteen days. In other
words, the High Court, while maintaining the requirement of a prior notice under
10
Section 31 D, has re-fashioned the rule by stipulating that details pertaining to the
broadcasts, particularly the duration, time slots and the like, including the quantum
of royalty may be furnished within fifteen days of the broadcast or performance.
15 Mr Mukul Rohatgi and Mr Akhil Sibal, learned Senior Counsel appearing on behalf of
the appellants, submitted that:
(i) The interim order of the High Court re-writes Rule 29(4), which is impermissible,
in any event at the interim stage;
(ii) The validity of Rule 29(4) is yet to be adjudicated upon and a presumption
would attach to the constitutionality of both – the Rules and the Statute;
(iii) There is no challenge to the validity of Section 31D in terms of which Rule 29
has been framed;
(iv) The order of the IPAB dated 31 December 2020 specifically requires
compliance with the provisions of Rule 29 while fixing the rates of royalty; and
(v) The High Court has, in the course of its interim order, extended it only to the
petitioners before it and to the broadcasters who have been impleaded as
parties, as a result of which the pan-India operation of the Rule is left in the
realm of uncertainty.
16 These submissions have been contested on behalf of the broadcasters by Mr Navroz
Seervai and Mr Neeraj Kishan Kaul, learned Senior Counsel.
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17 Mr Navroz Seervai urged that:
(i) Section 31D(2) stipulates that the broadcasting organization shall give prior
notice, in such manner as may be prescribed, of its intention to broadcast the
work, stating the duration and territorial coverage of the broadcast, together
with the payment of royalty;
(ii) Section 31 D, in referring to a notice in the manner as may be prescribed,
does not envisage that conditions incorporating minute details should be
provided in the prior notice; and
(iii) The rule making power in Section 78 makes a distinction between ‘form’,
‘manner’ and ‘conditions’. Since Section 31D refers to the manner in which
the notice may be issued, the ‘manner’ cannot extend to stipulating
‘conditions’.
18 Mr Neeraj Kishan Kaul has submitted that:
(i) Section 31D was introduced by Parliament by an amendment of 2012 to
obviate the exercise of monopolistic rights wielded by copyright owners to
the detriment of the public at large;
(ii) Section 31D creates a statutory right in favour of broadcasters to obtain
licenses as a result of which the earlier regime of voluntary licensing has been
replaced by the regime of statutory licenses envisaged in Section 31D;
(iii) Until December 2020, in the absence of a duly constituted IPAB, broadcasters
were functioning under the ambit of voluntary licensing agreements;
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(iv) Rule 29(4) defeats the object of Section 31D insofar as it incorporates minute
details in the prior notice which has been prescribed;
(v) Many broadcasters operate in the context of interactive dynamic sites as a
result of which the requirements which have been prescribed in Rule 29(4) are
onerous and impossible to fulfill;
(vi) The broadcasters are ready and willing to pay royalties which are prescribed
by the IPAB according to the statute at the end of every month and even
inspection of records is furnished to copyright owners; and
(vii) Whereas Section 31D provides for only the duration and territorial coverage of
the intended broadcast, the notice which has been prescribed by Rule 29(4)
has gone far beyond the statutory ambit of Section 31D and is ultra vires for
that reason.
19 While counsel appearing on behalf of the contesting parties have addressed
submissions on merits, we would desist from expressing any opinion on the
constitutional challenge which is pending consideration before the High Court of
Judicature at Madras where, as noted earlier, the writ petitions are slated for final
disposal on 4 October 2021.
20 At this stage, the issue is whether the interim order of the High Court can be
sustained. Essentially, as the narration in the earlier part of this judgment would
indicate, the High Court has substituted the provisions of Rule 29(4) with a regime of
its own, which is made applicable to the broadcasters and the petitioners before it.
A Constitution Bench of this Court in In Re: Expeditious Trial of Cases Under Section
13
138 of NI Act 1881 4 has emphasized that the judiciary cannot transgress into the
domain of policy making by re-writing a statute, however strong the temptations
maybe. This Court observed:
“20. Conferring power on the court by reading certain words
into provisions is impermissible. A judge must not rewrite a
statute, neither to enlarge nor to contract it. Whatever
temptations the statesmanship of policy-making might
wisely suggest, construction must eschew interpolation and
evisceration. He must not read in by way of creation. The
Judge’s duty is to interpret and apply the law, not to
change it to meet the Judge’s idea of what justice requires.
The court cannot add words to a statute or read words into
it which are not there.”
It is a settled principle of law that when the words of a statute are clear and
unambiguous, it is not permissible for the court to read words into the statute. A
Constitution Bench of this Court in Padma Sundara Rao v State of Tamil Nadu 5 has
observed:
“12. …The court cannot read anything into a statutory provision
which is plain and unambiguous. A statute is an edict of the
legislature. The language employed in the statute is
determinative factor of legislative intent. The first and
primary rule of construction is that the intention of the
legislation must be found in the words used by the
legislature itself. The question is not what may be supposed
and has been intended but what has been said.
…..
14. While interpreting a provision the court only interprets the
law and cannot legislate it. If a provision of law is misused
and subjected to the abuse of process of law, it is for the
legislature to amend, modify or repeal it, if deemed
necessary.”
4
Suo Motu Writ Petition (Crl.) No. 2 of 2020, 16 April 2021, available at
https://main.sci.gov.in/supremecourt/2020/9631/9631_2020_31_501_27616_Judgement_16-Apr-
2021.pdf
5
(2002) 3 SCC 533
14
21 The court is entrusted by the Constitution of the power of judicial review. In the
discharge of its mandate, the court may evaluate the validity of a legislation or
rules made under it. A statute may be invalidated if is ultra vires constitutional
guarantees or transgresses the legislative domain entrusted to the enacting
legislature. Delegated legislation can, if it results in a constitutional infraction or is
contrary to the ambit of the enacting statute be invalidated. However, the court in
the exercise of judicial review cannot supplant the terms of the provision through
judicial interpretation by re-writing statutory language. Draftsmanship is a function
entrusted to the legislature. Craftsmanship on the judicial side cannot transgress into
the legislative domain by re-writing the words of a statute. For then, the judicial craft
enters the forbidden domain of a legislative draft. That precisely is what the Division
Bench of the High Court has done by its interim order. Section 31D(2) speaks of the
necessity of giving prior notice, in the manner as may be prescribed, of the intention
to broadcast the work stating the duration and the territorial coverage of the
broadcast, together with the payment of royalties in the manner and at the rates
fixed by the Appellate Board. While the High Court has held the broadcasters down
to the requirement of prior notice, it has modified the operation of Rule 29 by
stipulating that the particulars which are to be furnished in the notice may be
furnished within a period of fifteen days after the broadcast. The interim order
converts the second proviso into a “routine procedure” instead of an exception (as
the High Court has described its direction). This exercise by the High Court amounts
to re-writing. Such an exercise of judicial redrafting of legislation or delegated
legislation cannot be carried out. The High Court has done so at the interlocutory
stage.
15
22 We are, therefore, clearly of the view that an exercise of judicial re-drafting of Rule
29(4) was unwarranted, particularly at the interlocutory stage. The difficulties which
have been expressed before the High Court by the broadcasters have warranted
an early listing of the matter and this Court has been assured by the copyright
owners that they would file their counter affidavits immediately so as to facilitate the
expeditious disposal of the proceedings. That having been assured, we are of the
view that an exercise of judicial re-writing of a statutory rule is unwarranted in the
exercise of the jurisdiction under Article 226 of the Constitution, particularly in
interlocutory proceedings. The High Court was also of the view that the second
proviso may be resorted to as a matter of routine, instead of as an exception and
that the ex post facto reporting should be enlarged to a period of fifteen days
(instead of a period of twenty four hours). Such an exercise was impermissible since
it would substitute a statutory rule made in exercise of the power of delegated
legislation with a new regime and provision which the High Court considers more
practicable.
23 We accordingly allow the appeals by setting aside the interim order of the High
Court dated 2 August 2021. This is, however, subject to the clarification that this
Court has not expressed any opinion on the merits of the rival submissions which
would fall for determination in the exercise of the writ jurisdiction of the High Court in
the pending proceedings..
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24 Pending application(s), if any, stands disposed of.
…………………………….……………………..J.
[Dr Dhananjaya Y Chandrachud]
……..…..…….………..……………….………..J.
[B V Nagarathna]
New Delhi;
September 27, 2021
-S-
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