Challenging the functioning of IPRS and PPL, the Federation of Hotels and Restaurants Association of India (FHRAI) had sought a direction to IPRS not to charge any licence fee in excess of 15% over and above the annual licence fee.
A bench headed by Justice Dalveer Bhandari dismissed as withdrawn the plea of the association that copyright societies, which perform functions as broadcasters of music throughout the country and abroad, were charging exorbitant rates for special events like the Christmas Eve, New Years Eve and Valentines Day, and the same should be quashed.
It said that after having obtained the annual licence from the copyright societies in respect of musical works and sound recordings, the members of the association were not liable to obtain additional licence for same works.
Challenging the Delhi High Court judgment that dismissed their petitions, the association said the copyright societies vested with monopolistic status have powers to fix the arbitrary, unjustified licence fee without any regulation and guidelines.
It said that the rights of the authors, lyricists and composers stand extinguished and get fused with the rights of the owners of sound recording.
Therefore, no separate payment for the two categories is required as the licensees use only the end product, which is the sound recording.
Counsel Lalit Bhasin, appearing for the hotel body, said that Section 34 of the Act was unconstitutional as it bestowed uncontrolled, unregulated and unbridled powers on a copyright society to issue licences to various bodies to collect fee and distribute the same among owners of those rights. He said the Act does not stipulate the conditions under which the societies can issue licence and what fee is to be charged.
The high court erred in not considering that IPRS does not have any right to charge licence fee as in most of the instances the musical work has been created for hire and the rights with respect to the said works vest with the owners of the sound recording and IPRS is conducting its affairs in a manner detrimental to public interest and is guilty of unjust enrichment, the petition said.
FHRAI had approached the High Court seeking striking down of Sections 2(ff), 13, 33(3) and 34(3) of the Copyright Act, 1957, on the ground that the sections are violating Articles 14 and 19(1)(g) of the Constitution as well as a direction to the central government and the Registrar of Copyrights to withdraw registration of IPRS and PPL and to direct the Registrar to denotify tariff schemes gazetted by IPRS and PPL as being arbitrary and unreasonable.