Introduction

The case of Azure Hospitality Private Limited v. Phonographic Performance Limited before the Delhi High Court has generated a significant precedent regarding the interplay between copyright ownership, licensing rights, and the regulatory framework governing copyright societies. At its core, the dispute pits Azure Hospitality—a company engaged in the exploitation of sound recordings across its outlets—against Phonographic Performance Limited (PPL), a major entity in the field of public performance rights with control over a vast repertoire of recordings.

The background is marked by PPL’s assertion that it holds exclusive copyright rights, assigned by the original producers under Section 18 of the Copyright Act, and its insistence that any public performance of these sound recordings must occur under licenses issued in accordance with the registration guidelines mandated by Section 33 of the Act. Azure Hospitality, which operates high-end restaurant outlets, challenged PPL’s regulatory requirements and the imposition of its tariff regime, arguing for the unfettered right to exploit the sound recordings without being subjected to the strictures applicable to entities carrying on the “business” of issuing or granting licences.

The case involved multiple interlocutory applications and counter-submissions, with in-depth arguments focusing on statutory interpretation, the principles of assignment and licensing under the Copyright Act, and the relevance of regulatory provisions related to copyright societies. The Judgment, pronounced on 15 April 2025, examines these issues in detail.

Summary of the Judgment

In its detailed ruling, the Delhi High Court scrutinized whether PPL’s practice of issuing licences for public performances of sound recordings—without being a registered copyright society or a member of one—was legally tenable under Section 33 of the Copyright Act. The Court reiterated that the fundamental right to grant a licence as conferred by Section 30, while absolute in form, must operate harmoniously with the prohibitions contained in Section 33(1) regarding the “business of issuing or granting licences.”

The learned Single Judge’s judgment, which had previously granted an interlocutory injunction in favour of PPL, was critically assessed. The decision rested on the interpretation that PPL, even if deemed the owner of the sound recordings by virtue of assignment under Section 18(2), is nevertheless required to comply with the regulatory scheme of Chapter VII of the Copyright Act. That is, any entity engaged in licensing must either be registered as a copyright society or be a member of an already registered society (in this case, RMPL is identified as the sole registered society for sound recordings).

Ultimately, the Court allowed the appeal to the extent that it mandated Azure to make payments based on the tariff scheme applicable to RMPL, emphasizing that PPL cannot effectively issue licences on its own terms free from statutory obligations. The Judgment also left open key issues pending in CS (Comm) 714/2022 and balanced equities by requiring periodic statements of payments between the parties.

Analysis

Precedents Cited

The Judgment rests heavily on several precedents:

• Novex Communication v. Lemon Tree Hotels: This case was cited for the proposition that copyright owners continue to enjoy the right to grant licences in their individual capacity, even while being members of a registered copyright society. However, the Court was cautious not to allow this principle to conflict with the mandatory registration requirement under Section 33(1).
• Novex Communication v. Trade Wings Hotel: The Bombay High Court’s decision was used to underline that an assignment of copyright via Section 18(2) gives the assignee a status equivalent to that of the owner, including the right to grant licences. Nevertheless, its applicability is qualified when regulatory conditions apply.
• Entertainment Network India v. Super Cassette Industries: This Supreme Court precedent was pivotal in emphasizing that while the 1994 amendment provided opportunities for owners to exploit their copyrights, it did not dilute the necessity of abiding by statutory limitations imposed on licensing activities.

Legal Reasoning

A central focus of the Court’s reasoning lay in reconciling two competing statutory provisions:

• Section 30 of the Copyright Act: It unequivocally grants the owner (or the assignee under Section 18(2)) an absolute right to grant licences in respect of their works. This section, on its face, does not impose additional conditions.
• Section 33(1) and its Proviso: By contrast, Section 33(1) expressly proscribes any entity “carrying on the business of issuing or granting licences” unless done in accordance with a registration under Section 33(3). The proviso further clarifies that even an owner granting licences in an individual capacity must act “consistent with his obligations as a member of the registered copyright society.”

The Court was careful not to allow the interpretation of Section 30 to “water down” the mandatory regulatory framework of Section 33. It reasoned that if the assignment under Section 18(2) were allowed to operate entirely free of Section 33’s constraints, then the regulatory and tariff mechanisms envisioned by the Copyright Act (specifically, the one-stop role of a registered society) would be rendered ineffective. In order to preserve the integrity of Chapter VII of the Act, the ruling insisted on the necessity that PPL — as an entity engaged in a systematic, profit-oriented licensing business — either register as a copyright society or join an existing one (RMPL in this instance).

Impact

The Judgment is likely to have far-reaching consequences:

• Clarification on Licensing Rights: It reinforces that the rights conferred under Section 30 can only be exercised in a manner that complies with the registration and regulatory norms set forth in Section 33. This prevents a scenario where copyright owners, especially those holding bulk rights (like PPL), might otherwise monopolize the licensing market.
• Regulatory Enforcement: The decision emphasizes the importance of transparency and equitable tariff setting. It indirectly bolsters the mandate of copyright societies (like RMPL) to regulate licensing tariffs, ensuring that interests of both rights holders and users (public establishments such as restaurants) are balanced.
• Industry-Wide Implications: Future disputes in the music and sound recording industry could be influenced by this precedent, compelling entities to either seek registration as a copyright society or become members of one. It also reinforces the importance of adhering to collective regulatory mechanisms designed to prevent cartelization.

Complex Concepts Simplified

Several legal terms and statutory interpretations in the Judgment may appear convoluted. Below is a simplified explanation:

• Registered Copyright Society: This is an association or body that is officially registered under the Copyright Act to manage the licensing, collection, and distribution of fees or royalties in respect of copyrighted works. In this case, RMPL is the only registered society for sound recordings.
• "Carrying on Business": The phrase has been interpreted broadly and implies any organized, profit-motivated and continuous activity—in this instance, the systematic issuance or granting of licences for copyrighted works.
• Assignment under Section 18(2): This provision allows the original copyright holder to assign rights to another party. However, once assigned, the new holder (e.g., PPL) must still operate within the statutory constraints regarding licensing.
• Tariff Scheme and Section 33A: A tariff scheme is a schedule of fees prescribed by a registered copyright society for licensing. The proposed regulatory mechanism (Section 33A) was designed to prevent arbitrary pricing and protect both copyright owners and users.

Conclusion

In summary, the Judgment in Azure Hospitality Private Limited v. Phonographic Performance Limited sets an important precedent by clarifying that while copyright owners retain the inherent right to grant licences under Section 30, this right is not unfettered. For entities engaged systematically in the business of licensing, compliance with the registration requirement under Section 33 is mandatory. The decision mandates that during the interim phase of litigation, Azure must remunerate PPL based on the RMPL tariff rate, thereby ensuring that the collective regulatory mechanisms of copyright societies are upheld.

This ruling is significant for the broader legal and music industry community as it reinforces the role of copyright societies in managing public performance rights, prevents arbitrary exploitation by monopolistic entities, and provides clearer regulatory pathways for both rights holders and licensees. Until further legislative clarification or reform, this interpretation will guide future disputes concerning the licensing practices and regulatory compliance of bulk copyright owners.