India: Constitutionality of Rules 56, 57(5), and Rule 61(5) of the Copyright Rules, 2013 upheld

Source: www.delhihighcourt.nic.in

Recently, the Delhi High Court in the case of Anand Bhushan v Union of India upheld the constitutionality of Rules 56, 57(5), and Rule 61(5) of the Copyright Rules, 2013.

Brief Facts

• Anand Bhushan (hereinafter referred to as ‘Petitioner No. 1’) is a shareholder and Joint Managing Director of M/s Pitambar Publishing Co. Pvt. Ltd. (hereinafter referred to as ‘Petitioner No.2’).
• Petitioner No. 2 is a Company registered under the Companies Act, 1956. Petitioner No. 3, the Indian Reprographic Rights Organization (hereinafter referred to as "IRRO"), is a registered Society under the Societies (Registration) Act, 1860, having its head office in Delhi, whereas Petitioner No.4, the Federation of Indian Publishers (hereinafter referred to as "FIP"), is also a registered Society which is an apex body representing the Indian Publishing Industry and engaged in promoting and representing the interests of the said industry.
•  It was submitted that the Petitioner’s publishing business and commercial activities extended to the whole country and beyond, specifically Delhi, which was a major center for publishing activities.
• It was further submitted that their constitutional rights were affected by the Rules 56(3), 56(4), 56(5), 56(6), 57(5), and Rule 61(5) of the Copyright Rules, 2013.
• Thus, the following Petition.  

Issues

• Whether Sections 11(2), 12(2), 31 and 33A (2) of the Copyright Act, 1957 (as amended by the Copyright Amendment Act 2012; “Act” for short) violate the provisions of Articles 14, 19(1)(c) and 19(1)(g) of the Constitution of India?
• Whether Rules 3, 47(1), 56(3), 56(4), 56(5), 56(6), 57, 59(7) and 61(5) of the Copyright Rules 2013 (“Rules” for short) violate the provisions of Articles 14, 19(1)(c) and 19(1)(g) of the Constitution of India. 
• Whether the Petitioner’s prayer to prohibit the Respondent from making any appointment to the Copyright Board in terms of the impugned provisions is justified or not?

Petitioner’s Contentions

• It contended that the Sections 11 (2) & 12 (2) of the Act suffered from the vice of excessive delegation. Also, Rule 3 of the Rules was argued to be violative of Article 14 of the Constitution, being contrary to the principles for appointment of Tribunals like the Copyright Board laid down by the Supreme Court.
• It contended that the expression ‘unreasonable element’ should be read as by applying the doctrine of 'noscitur a sociis', which meant, the expression ‘unreasonable’ in Section 33A(2) of the Act must take its color and meaning from the words ‘anomaly and inconsistency’ in the tariff scheme.
•  It submitted that the challenged Rules impose unreasonable, unjustified and fatuous restrictions on the Copyright Society registered under Section 33 (3) of the Act, without any rationale. Also, the said Rules limited the frequency of tariff revisions (whether upward or downward), which was beyond any rule-making power conferred by the Act. 

Respondent’s Contentions

• It claimed that the decision of the Copyright Board cannot be considered as wide and unlimited as the final orders of the Copyright Board can be challenged before the High Court.
• It submitted that Section 31 of the Act provided for compulsory license in case of abuse of rights. It argued that the Copyright Board, only after giving a reasonable opportunity of being heard to the owner of the copyright in the work, would direct the Registrar to grant a compulsory license as per the rates fixed by the Board.
•  It also submitted that Rule 56 introduced a system of transparency in fixing prices by the Copyright Societies and governed and regulated the system of fixation, collection and distribution of royalties. Further, Rules 59(6), 59(7) and 61(5) were in harmony with the legislative intent of Section 35(3), which provided for equal membership of authors and owners.
• Therefore, it argued that the Rules were not, in any way, violative of Articles 19(1)(c) & (g) of the Constitution.

Court’s Decision

• With regards to the noscitur a sociis argument of the Petitioners, the High Court (hereinafter referred to as ‘the Court’) was of the view that it would not like to curtail or water down the scope and ambit of language employed and adopted, given the importance to the Copyright Board for the said purpose.
•  It held that ‘while exercising the power of judicial review, it is not to examine merits of delegated legislation. A writ petition for judicial review of the Rules would lie only on certain well-defined grounds. Courts cannot always go into the merits or demerits of a policy reflected in the substratum of the Rules. The parameters of judicial review of subordinate legislation have been succinctly stated in various decisions of the Supreme Court.’
• It further held that Rule 56 does not in any way ran counter to or defeated the rights of the Copyright Society to fix and claim reasonable tariff. The Court specified that the object and the purpose behind Clauses (a) to (d) of Rule 56 was to ensure that different Copyright Societies should publish tariffs which have some form of uniformity and consistency for the users to be able to understand and appreciate them. It was a regulatory exercise and not an exercise which curtails freedom and discretion of Copyright Societies to fix tariff.
• With regard to Rule 57, the Court held that it ensures that the Board while examining the question whether the tariff was unreasonable can examine the prevailing standards of royalties to such commercial exploitation of works. This according to the Court was not an unreasonable or illegal stipulation which the Board must take into consideration while deciding the appeal. If an appeal was filed, the Board can issue general directions on whether the tariff was unreasonable and suffers inherent inconsistency.
• Regarding Rule 61, the Court refused to accept the argument of the Petitioner that some of the members of the Copyright Societies cannot be treated as legitimate or righteous members under the Act as in the view of the Court the argument was hypothetical and based on assumption that a wrong or ineligible person would be enrolled as a member of the Copyright Society. The Court further held that in case a wrong or ineligible person was enrolled, he can always be removed from the Copyright Society by following the procedure in accordance with law.

The Court held that ‘the Rules do not negate the principal enactment and it cannot be said that they are repugnant to or in derogation of the object or purpose which the principal enactment seeks to achieve. The impugned rules were held to be in consonance with the main enactment, i.e., the Copyright Act 1957. The writ petition was therefore dismissed.’