Licensing at What Cost? Delhi Hc Flags Arbitrary Tariffs by PPL

By Rima Majumdar and Anuj Dhar

INTRODUCTION

The case of “Al-Hamd Tradenation vs Phonographic Performances Limited” centered on the issue of whether demanding exorbitant licensing fees constitutes a refusal under Section 31 of the Copyright Act, 1957, and whether such refusal would justify the grant of a compulsory license. While addressing the balance between copyright holder’s rights and public access to creative works, the Hon’ble High Court of Delhi passed an Order dated May 13, 2025, against Phonographic Performances Limited, holding that refusal to offer reasonable licensing terms to the Licensee would constitute as withholding work from the public under Section 31 of Copyright Act, 1957.

BACKGROUND OF THE CASE

• The Petitioner, an event organizer, was organizing a corporate event for 50 people at Hotel Lutyens, New Delhi, on July 14, 2024.
• The Petitioner, while making requisite bookings, was informed by the Respondent that a license was to be obtained by the Petitioner for the music which would be played during the event. The license fees, for an event of 1-150 people, was quoted at INR 49,500 by the Respondent.
• On July 02, 2024, the Petitioner reached out to the Respondent, informing about the details of the event. With regard to the License Fees, the Petitioner offered an amount of INR 16, 500 i.e., 1/3^rd of the License Fees quoted by the Respondent, since the amount quoted by the Respondent was for 150 people, while the event being hosted by the Petitioner was only for 50 people.
• However, the Respondent refused to issue license to the Petitioner at the proposed fees i.e., INR 16,500, insisting on the full payment of license fees.
• While the Petitioner was exploring the possibility of filing a Compulsory License Petition, the Respondent initiated a Suit for Copyright Infringement against the Petitioner on July 10, 2024, before the Hon’ble High Court of Delhi being CS (COMM.) No. 564 of 2024 titled “Phonographic Performance Limited vs Al-Hamd Tradenation” (The aforesaid Suit is currently pending, and is listed on August 18, 2025, for admission-denial and marking of exhibits).
• Aggrieved by the Respondent’s unreasonably high quotations towards the license fees, the Petitioner filed the present Petition under Section 31 of the Copyright Act, 1957, before the Hon’ble High Court of Delhi on July 12, 2024, seeking a compulsory license of the Respondent’s repertoire of sound recordings in the Petitioner’s favour.

CONTENTIONS OF PARTIES

Petitioner

1. The Respondent’s licensing fees was arbitrary and disproportionate, especially for a small corporate event consisting of 50 people. It was submitted that the Respondent’s flat-rate tariff did not consider the event size or the audience, thereby making it unreasonable.
2. Even if the Respondent was the owner or copyright holder of its repertoire of sound recordings, such ownership cannot give the Respondent a free hand to demand and procure any unreasonable and unsubstantiated fees towards licensing.
3. By demanding such unreasonable fees from the Petitioner, the Respondent is effectively withholding works from the public, thereby depriving the public of the sound recordings.
4. Such an act of withholding works from the public, in effect, amounts to refusal of republishing the works, and/or allowing its performance in public.
5. Due to such arbitrary and unreasonable acts on behalf of the Respondent, the Petitioner is entitled to Compulsory License from the Respondent for its repertoire of sound recordings.

Respondent

1. The Respondent is the owner of the copyright vested in the sound recordings in its repertoire, and is exclusively entitled to grant licenses for communication to the public.
2. Section 31 of the Copyright Act, 1957, would only be applicable when the work in question has been withheld from the public. However, in the present dispute, the Respondent’s repertoire of sound recordings were being freely licensed to the public for their consumption by multiple entities like restaurants, hotels, etc. Since the members of the public have access to the Respondent’s repertoire by various mediums, the works cannot be considered to be ‘withheld from the public’.
3. The Respondent never refused to grant license to the Petitioner, but only insisted on the payment of its standard published license fees, which is consistent across events and is necessary to sustain the Respondent’s operations. It was also submitted that since April 2023, over 9100 entities have procured over 3200 licenses from the Respondent at its standard license fees, irrespective of the nature and size of the event. In view of the aforesaid, it was contended that the quantum of license fees cannot be held to be unreasonable.
4. Under Section 31 of the Copyright Act, 1957, the Commerical Courts have the power to grant compulsory license to either republish work, perform works in public, and communicate sound recordings to public by broadcasting. It was submitted that in the present dispute, Section 31 of the Act would only attract the clause of “performing works in public”. However, taking into consideration that such “works” only include literary, dramatic and musical works, and not sound recordings, it was submitted by the Respondent that Section 31 would not be applicable in the present dispute. It was also submitted that the Petitioner is an event organizer, and not a broadcasting organization, and thus cannot attract the clause pertaining to “communicating sound recordings to the public via broadcasting”.
5. The Petitioner would not be entitled to the grant of compulsory license in its favour under the provisions of Section 31 of the Act, as there was no outright refusal on behalf of the Respondent, to license its repertoire of sound recordings to the Petitoner.

LEGAL ISSUES CONSIDERED BY THE COURT, AND ITS SUBSEQUENT FINDINGS:

1. What are the Principles of Compulsory Licensing?
   • The Copyright Act, seeks to maintain a balance between the interest of the owner of the copyright in protecting his works on the one hand, and the interest of the public to have access to the works on the other.
   • Though the Copyright Act provides for exclusive rights in favour of owners of the copyright, it recognises that public has also substantial interest in the availability of the works.
   • Compulsory Licences are an exception to the general freedom of the copyright owner to contract.
   • Merely because certain members of the public have access to the copyrighted works, would not mean that others lose their right to seek compulsory licence.
   • The Right of the owner of the copyright is akin to Right to Property, which is not a Fundamental Right and is subject to reasonable restrictions.
2. What constitutes as “Refusal” or “Withholding” under Section 31 of the Copyright Act, 1957? Would Section 31 only be applicable when there is a downright refusal?
   • Refusal under Section 31 of the Copyright Act, 1957 can be accrued not merely by express denial but also by an unreasonable terms. When an offer is made on an unreasonable term or a stand is taken which is otherwise arbitrary, it may amount to a refusal on the part of the owner of copyright. In the present case, the license fees is structured in a manner that whther the audience is 1 or 150, the fees remains the same. Further, the licence fee remains exactly the same, irrespective of whether licensee plays one song or a large quantity of songs, and irrespective of the duration of the event.
   • The license fee, as demanded by the Respondent, is not commensurate with the market standards, where registered copyright societies like RMPL are charging considerably less for their repertoire of sound recordings.
   • The mere fact that an offer for negotiation or grant of license is made by the Petitioner, the same per se may not be sufficient to arrive at the conclusion that the owner of the copyright has not withheld its work from public.
   • Since the Respondent holds a vast repertoire of sound recordings, there is an oligation on the Respondent to charge fair and reasonable license rates. Such arbitrary and exorbitant license rates would not only place undue burden on the Petitioner, but also the public at large.
3. Is Section 31(a) of the Act limited to only literary, dramatic and musical works?
   No, Section 31(a) of the Act is not limited to only literary, dramatic and musical works. Section 31(a) of the Copyright Act highlights the terms, ‘work’, ‘publish’, and ‘performance in public’. The term ‘work’ is defined in Section 2(y) of the Copyright Act, which also includes, sound recording. In relation to the term ‘publish’, Section 3 of the Copyright Act defines the meaning of publication, to mean a work which is available to the public, including, communicating the work to the public. Further, Section 2(ff) defines ‘communication to the public’ meaning to be any performance seen, heard, or enjoyed by the public. A conjoined reading of the aforesaid Sections of the Copyright Act, clearly brings forth that the section would also include sound recording in its scope and ambit.

JUDGEMENT

Hon’ble Mrs. Justice Mini Pushkarna, while determining the merits of the present Suit, held that Phonographic Performance Limited’s demand for a flat licensing fees, without accommodating the specifics of Al-Hamd Tradenation’s event, amounted to an unreasonable condition, and the Petitioner’s prayer for compulsory license on fair and reasonable tariff was considered meritorious. The Hon’ble Court directed that if the Petitioner wished to use the Respondent’s repertoire of swound recordings, it must obtain a license and pay the requisite fees. However, the Court acknowledged that the the concept of ‘reasonableness’ of the fee warrants further inquiry, and thus, listed the matter for further proceedings on September 17, 2025.

AUTHOR’S NOTE

The Hon’ble Delhi High Court’s decision in Al-Hamd Tradenation v. Phonographic Performance Limited (PPL) is an important marker in the evolving jurisprudence of copyright law in India—particularly in its interpretation of what amounts to a “refusal” to license under Section 31 of the Copyright Act, 1957. The Hon’ble Court rightly observed that an unreasonable, disproportionate, or arbitrary fee, despite being disguised as a formal “offer”, may in substance amount to a refusal under Section 31.

However, while the present judgment addresses the issue of excessive pricing by copyright owners, it perhaps does not go far enough in tackling the legal status of the licensor itself—PPL. In this context, the Delhi High Court’s Division Bench judgment in “Azure Hospitality Pvt. Ltd. v. PPL” becomes particularly significant. In the said case, the Court held that PPL, not being a registered copyright society under Section 33 of the Copyright Act, cannot unilaterally issue public performance licenses for sound recordings. This distinction is crucial: while entities like PPL or Novex may have assignments of rights from sound recording owners, the law draws a clear line — only registered copyright societies may carry on the business of licensing to the public at large. This is not a mere procedural hurdle, but a deliberate safeguard provided in the Act to ensure transparency, accountability, and fairness in royalty collection and distribution.

Unlike registered societies such as RMPL or IPRS, which are subject to government oversight and whose tariff schemes must be published and are appealable, unregistered entities operate in a legal grey zone. They often charge exorbitant licensing fees without any mechanism to ensure that the artists and performers—the very stakeholders whom the law seeks to protect—actually receive their rightful share of royalties. This regulatory gap has allowed private entities to exploit their market dominance under the guise of copyright protection, while often defeating the purpose of collective rights management.

In conclusion, while the judgement of the Hon’ble Court is a progressive step towards curbing unreasonable licensing practices, its limited engagement with the legal status of PPL leaves a critical gap. For true reform, the Hon’ble Courts must go beyond the pricing scrutiny and address the legality of licensing by unregistered copyright societies.