Delhi High Court: In the PPL Pass Code Hospitality copyright dispute alleging the unauthorised use of copyrighted sound recordings, where an ad hoc arrangement for payment of licence fees had previously been put in place, the Single Judge Bench of Tejas Karia, J., held that this interim arrangement should continue. The Court noted that the question regarding the plaintiff’s authority to grant copyright licences is presently pending before the Supreme Court, and therefore the existing mechanism for licence fee payments should not be disturbed at this stage.
The Court further directed Defendant 1 to deposit an additional amount towards ad hoc licence fees, which the plaintiff may partially withdraw, as permitted.
Background
The plaintiff, Phonographic Performance, is an owner of copyright in various sound recordings. Defendant 1, Pass Code Hospitality, owns and operates various high-profile pubs ad bars. The plaintiffs had alleged that the defendants had been using the plaintiff’s sound recordings without taking any copyright license amounting to infringement of copyright under Section 51 of the Copyright Act, 1957 (‘Act’).
During pendency of suit regarding infringement of copyright, an ad hoc arrangement had been directed by the Court vide which Defendant 1 had been directed to deposit an amount of Rupees 15 lakhs as license fees. Out of the said amount, the plaintiff was permitted to withdraw rupees 8 lakhs and the balance of Rupees 7 lakhs was to be kept in an interest-bearing fixed deposit. The ad hoc arrangement was subsequently extended vide orders dated 19-7-2024, 5-11-2024 and 20-1-2025.
Subsequently, Defendant 1 had filed an application seeking refund of the money deposited in terms of the aforementioned ad hoc arrangements claiming that there were material misrepresentations made by the plaintiff pertaining to his competency to issue licenses without being a registered Copyright Society under Section 33 of the Act.
Defendant 1 had submitted that in the case of Azure Hospitality Pvt. Ltd. v. Phonographic Performance Ltd., 2025 SCC OnLine Del 2407 (‘Azure Hospitality’), the Court had held that plaintiff herein cannot conduct the business of issuing or granting licenses in the sound recordings held by it without being either the registered Society under Section 33 of the Act or a member of the registered Copyright Society for sound recordings i.e., Recording Music Performance Ltd. (‘RMPL’). Relying on the same, Defendant 1 had averred that the plaintiff is not legally competent or has the legal title / ownership to issue and grant licenses or is authorized on behalf of the ‘owners’ of sound recordings to collect royalties.
Defendant 1 had also submitted that the only registered Copyright Society is RMPL, whose rates are regulated and overseen by the central government. As such the tariff of RMPL shall be applicable in the present case according to which Defendant 1 is liable to pay license fees of Rupees 3,62,000. The plaintiff had already withdrawn Rupees 17 lakhs and an excess of Rupees 13,38,000 had been paid in excess by Defendant 1. It was further submitted that the ad hoc arrangement for deposit of license fees by Defendant 1 be directed to continue as per the prevailing RMPL rates till the final disposal of Defendant 1’s petition seeking compulsory license.
Analysis, Law and Decision
The Court noted that the ad hoc arrangement had been expressly directed as an interim measure to balance equities pending adjudication of the plaintiff’s application for interim injunction and was continued from time to time on the same basis. The Court examined the effect of the decision in Azure Hospitality and observed that the issue concerning the plaintiff’s authority to issue licences without registration under Section 33 was pending consideration before the Supreme Court through a Special Leave Petition and that the applicability of RMPL tariff rates to the present case formed the subject matter of a separate application pending before the Court. In these circumstances, it was held that the subsequent orders of the Supreme Court did not warrant discontinuation of the interim arrangement at this stage.
The Court emphasised that the ad hoc arrangement was not a determination of rights and was expressly made subject to the outcome of the pending applications. Given the pendency of issues of the plaintiff’s ability to issue license under Section 33 of the Act before the Supreme Court, the Court found it appropriate to continue the ad hoc arrangement dated 10-4-2024 on the same terms to maintain balance between the parties.
The Court directed continuation of the ad hoc licensing arrangement pending disposal of the applications for interim injunction and refund. Defendant 1 were directed to deposit further ad hoc licence fees of Rupees 15 lakhs for the period of 4-5-2025 to 2-2-2026, with part of the amount permitted to be withdrawn by the plaintiff and the balance retained in an interest-bearing deposit, subject to final adjudication of the pending proceedings
[Phonographic Performance Ltd. v. Pass Code Hospitality Pvt. Ltd., 2026 SCC OnLine Del 137, decided on 9-1-2026]
Advocates who appeared in this case:
For the Appellant: Chander M. Lall, Senior Advocate, Ankur Sangal, Sucheta Roy, Ankit Arvind, Raghu Vinayak Sinha, Shaurya Pandey, Ananya Mehan, Advocates
For the Respondent: Swathi Sukumar, Senior Advocate, Kartik Malhotra, Sumeher Bajaj Anindit Mandal, Advocates