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COGNIZANCE OF OFFENCES UNDER SECTION 63 OF COPYRIGHT ACT

December 3, 2021

By Priya Adlakha, Tanvi Bhatnagar and Rima Majumdar

Copyright is an aspect of intellectual property which has assumed great importance in this modern day and age, as the advent of the internet and ease of electronic communication has made protection of copyrighted works and enforcement of rights more challenging than ever before. The global economy is dependent on the creation and distribution of intellectual property (IP), be it copyrights, patents, designs or trade marks. It is not a stretch to say that Intellectual Property shapes the world and our perception thereof in many ways. While the value and worth of intellectual property has indeed skyrocketed over the years, so has the resultant issues with respect thereto. Specifically, infringement of one’s IP has always been a constant part of this, resulting in significant loss to authors, inventors, creators, owners and businesses, and deception and financial disadvantage to the consumer. It is because of these reasons, the legislature has made the acts of infringement of IP rights to be an offence and provided for statutory penalties and imprisonment in addition to being a civil wrong, thus emphasizing upon the importance of copyright.

Often, IP owners have to take a conscious decision whether to opt for a civil or criminal action, or both, against infringers, in order to see the deterrent impact upon the infringer and his racket/channels. IP owners have several questions to be asked about the procedure of a criminal action including – Whether the Police will even register the FIR or not at the instance of complainant? Whether the Police will conduct a surprise search and seizure at the infringer’s premises? Whether the accused will be arrested by the Police or not? Whether the IP owner will be able to compound the offence later, once the matter is settled amicably? All these questions can be answered by looking into the specific Act/law governing the offence.

However, before one ventures into looking at the deterrent impact of criminal prosecution for any offence, let us briefly look at the three classification of offences.

THREE ASPECTS OF ANY CRIMINAL OFFENCE

As per prevalent criminal law in India, offences are covered under the following three heads:

  1. Cognizable and non-cognizable:

A cognizable offence is an offence wherein, the police can commence investigating the matter without taking prior permission from a Court, and arrests can also be made without a warrant. On the other hand, non-cognizable offences require the police to first seek permission from the Magistrate’s Court to commence investigation of the same, and the police is under no obligation to register a FIR on receiving any complaint alleging offences that are non-cognizable in nature.

Generally, offences that are grave in nature, for example murder, kidnaping, etc. are cognizable. The First Schedule of the Criminal Procedure Code (CrPC), 1973, in Part I provides classification of all offences under the Indian Penal Code (IPC) that are either cognizable or non-cognizable in nature. Part II of the First Schedule provides classification of offences against other laws, on the basis of the punishment prescribed under the said Acts, as under:

Category 1: If punishable with death, imprisonment for life or for more than seven years; cognizable and non-bailable; triable by Court of Session.

Category 2: If punishable with imprisonment for three years and above but not more than seven years; cognizable and non-bailable; triable by magistrate of the first class.

Category 3: If punishable with imprisonment: less than three years or a fine; non-cognizable and bailable; triable by any magistrate.

  1. Bailable and non-bailable:

A bailable offence is an offence in which, the arrested person can obtain bail as a matter of right. Whereas, non-bailable are those offences wherein, the decision to release a person on bail is made by the Courts, based on the facts and circumstances of the case. While adjudicating upon the issue of granting bail to an individual charged with a non-bailable offence, Courts take certain important factors in consideration, including but not limited to – whether the accused is a flight risk; risk of tampering of evidence by the accused once released on bail; whether the prosecution’s witnesses would be under any threat from the accused, etc.

Usually, offences that are cognizable in nature are in turn non-bailable. The First Schedule of Cr. P.C provides classification whether an offence is bailable or not.

  1. Compoundable and non-compoundable:

The third aspect of a criminal offence is whether it is compoundable or not. Section 320 of the Cr.P.C provides a list of offences as mentioned in the Indian Penal Code that may be compounded. Sub-section (9) of Section 320 provides that any offence (under IPC) that is not covered under Section 320, is by definition not compoundable.

When an offence is compoundable, it means that the complainant can enter into a compromise with the accused, and have the matter settled in Court. Sub-section (6) of Section 320 provides that the High Court or the Court of Sessions under Section 401 of Cr.P.C, may allow any person to compound an offence which such person is competent to compound.

On the other hand, non-compoundable offences are those that cannot be settled through a compromise between the parties, mainly due to the gravity of the offence. However, the High Court has ample power under Section 482 of Cr.P.C to quash an FIR and the subsequent proceedings thereto, for offences that are non-compoundable in nature, provided that the Court is of the view that if the criminal proceedings continue it will only be a waste of judicial time and because there is hardly any chance of success of the prosecution[1].

The scope of this article is limited to discuss the controversy around the offence under Section 63 of the Copyright Act, 1957.

OFFENCE UNDER SECTION 63 OF THE COPYRIGHT ACT, 1957

Section 63 provides that any person who knowingly infringes or abets the infringement of a copyright that exists in any work, shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to three years and with a fine, which shall not be less than fifty thousand rupees but which may extend to two lakh rupees.

It is however, pertinent to point out that when it comes to understand the power of Police to register a FIR and arrest the accused for an offence under Section 63, the Copyright Act itself is silent as to whether the offence under this Section is cognizable or not. Therefore, the issue went for consideration before various High Courts of the country at different point of times, which have given varied views and decisions on this rather glaring omission.

JUDICIAL PRONOUNCEMENTS ON COGNIZANCE OF OFFENCES VIS-À-VIS SECTION 63 OF COPYRIGHT ACT  

In 2002, while deciding an application for anticipatory bail for offences under Section 63 of the Act, a single bench of the Hon’ble Gauhati High Court in the case of Jitendra Prasad Singh V. State of Assam (2003) 26 PTC 486 GAU, held that the expression “punishable with imprisonment for a term, which may extend to three years”, will mean that the imprisonment can be for a term as long as three years, but the expression, “punishable with imprisonment for less than three years” will mean that the offence is punishable with imprisonment for a period, which is less than three years.” Therefore, offences under Section 63 of the Act are non-bailable in nature, and as such an application for anticipatory bail will be maintainable.

The interpretation of the above judgement would be that the offence u/s 63 of the Copyright Act, would fall under Schedule 1 Part II Entry II, therefore, it would be cognizable and non-bailable.

In 2006, a similar situation arose before the Hon’ble Andhra Pradesh High Court in the case of Amarnath Vyas v State of Andhra Pradesh (2007) Cri LJ 2025 AP, wherein the Court had earlier rejected the anticipatory bail application of the accused u/s 438 Cr.P.C on the ground that the offence is bailable. Later, the Public Prosecutor for the state sought reconsideration of the previous order on the premise that the offence under Section 63 is not a bailable one. The learned Single Judge took a contrary view and held that “It is trite that the penal provisions shall have to be construed strictly. True there may be certain other class of offences which may fall in between classification II and classification III of Second Part of Schedule-I. Merely because they are not coming squarely within the domain of classification- Ill, they, cannot automatically be treated as included in the classification-II.”. “The expression ‘imprisonment for a term which may extend upto three years’, in my considered view, would not come squarely within the expression ‘imprisonment for three years and upwards’. Therefore, the offence punishable under Section 63 of the Act cannot be considered as a non-bailable one.”

Speaking on whether offences under Section 63 are cognizable or not, a Single Judge of the Kerala High Court in cases titled as Sureshkumar S/o Kumaran V. the Sub Inspector of Police 2007 3 KLT 36 and Abdul Sathar vs. Nodal Officer Anti-Piracy Cell AIR 2007 Ker 212, while hearing two writ petitions under Article 226 & 227 of the Constitution, held that since Section 63 of the Act is punishable with imprisonment for a period of 3 years, there can be no doubt that this falls under category 2 of Part II of the First Schedule of CRPC, and is consequently cognizable.

In 2013, Hon’ble Ms. Justice Gita Mittal of the Delhi High Court in the case of State vs. Naresh Kumar Garg CRL. M.C 3488/2012, relied upon the judgment of Hon’ble Supreme Court in the case of  Avinash Bhosale v. Union of India (2007) 14 SCC 325, wherein the Supreme Court had observed that an offence punishable under Section 135(1)(ii) of the Customs Act, 1962 (Act of 1962) would be bailable since it is punishable with imprisonment for a term ‘which may extend to three years or fine or with both’. The Delhi High Court was of the view that since the punishment mentioned in both these sections is identical, therefore they can be read in consonance. The learned Single Judge also relied upon Amarnath Vyas (supra) of the Andhra Pradesh High Court.

The Single Judge of Rajasthan High Court in Pintu Dey vs. State of Rajasthan 2015(3) Cr. L.R. (Raj.) 1291, relying upon Amarnath Vyas (Supra) held that the offences under Sections 63 & 68A of the Copyright Act being punishable by sentence of imprisonment upto three years, are non-cognizable offences.

In 2019, Hon’ble Mr. Justice Vibhu Bhakru of the Delhi High Court, while hearing a quashing petition in the case of Anuragh Sanghi vs. State & Ors. in W.P.(CRL) 3422/2018 & CRL.M.A. 35858/2018, relying upon the judgements passed in Avinash Bhosale (Supra) and Naresh Kumar Garg (Supra) held that the offence under Section 63 of the Copyright Act is not a cognizable offence and quashed the FIR.  Recently, in February 2021, a reference was made to the division bench of the Hon’ble Rajasthan High Court, Jodhpur Bench in the case of Nathu Ram vs. State of Rajasthan D.B. Crl. Ref. No. 1/2020 to answer the exact question of law “What would be the nature of an offence (whether cognizable or non-cognizable) for which imprisonment “may extend to three years” is provided and no stipulation is made in the statute regarding it being cognizable/non-cognizable.” The Division Bench considering all the aforesaid judgements and various other judgements passed by the Hon’ble High Courts and Supreme Court and applying the rule of ‘ex visceribus actus’ answered the reference as “that unless otherwise provided under the relevant statute, the offences under the laws other than IPC punishable with imprisonment to the extent of three years, shall fall within the classification II of offences classified under Part II of First Schedule and thus, shall be cognizable and non-bailable.” It has been held that the Single Bench Judgment of Rajasthan High Court in Pintu Dey (Supra), does not lay the correct law.

The reasoning given by the Hon’ble Division Bench of the Rajasthan High Court, Jodhpur Bench in the case of Nathu Ram (supra), appears to be the most appropriate one. The reliance placed by the Single bench of the Delhi High Court in the decision of the Hon’ble Supreme Court passed in Avinash Bhosale (Supra) which is in the context of an offence under the Customs Act, was not appropriate. The High Courts have not considered the intention of the legislature behind making certain acts of IP infringement as criminal offence and increasing the quantum of punishment as well as statutory penalties by way of amendments. It is pertinent to point out here that Section 103 of the Trade Marks Act, 1999, which is another legislation for IP protection and enacted (after repealing The Trade & Merchandise Marks Act, 1958) much after the Copyright Act, 1957 (amended in 1984), makes the offence under Section 103 of the Trade Marks Act ‘a cognizable offence’.

A specific provision was added in the new Act i.e. Section 115 (3) of the Trade Marks Act, 1999 which provides “that the offences under section 103 or section 104 or section 105 shall be cognizable.”

The wordings of Section 103 of the Trade Marks Act, 1999 with Section 63 of the Copyright Act, 1957 as well as the quantum of punishment and penalty is similar, and the same is reproduced as below:

Trade Marks Act, 1999 Copyright Act, 1957
Section 103. Penalty for applying false trade marks, trade descriptions, etc.—Any person who— (a) falsifies any trade mark; or (b) falsely applies to goods or services any trade mark; or (c) makes, disposes of, or has in his possession, any die, block, machine, plate or other instrument for the purpose of falsifying or of being used for falsifying, a trade mark; or (d) applies any false trade description to goods or services; or (e) applies to any goods to which an indication of the country or place in which they were made or produced or the name and address of the manufacturer or person for whom the goods are manufactured is required to be applied under section 139, a false indication of such country, place, name or address; or (f) tampers with, alters or effaces an indication of origin which has been applied to any goods to which it is required to be applied under section 139; or (g) causes any of the things above mentioned in this section to be done, shall, unless he proves that he acted, without intent to defraud, be punishable with imprisonment for a term which shall not be less than six months but which may extend to three years and with fine which shall not be less than fifty thousand rupees but which may extend to two lakh rupees: Provided that the court may, for adequate and special reasons to be mentioned in the judgment,

impose a sentence of imprisonment for a term of less than six months or a fine of less than fifty thousand.

Section 63. Offences of infringement of copyright or other rights conferred by this Act.—Any person who knowingly infringes or abets the infringement of— (a) the copyright in a work, or (b) any other right conferred by this Act [except the right conferred by section 53A], [shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to three years and with fine which shall not be less than fifty thousand rupees but which may extend to two lakh rupees]: Provided that [where the infringement has not been made for gain in the course of trade or business] the court may, for adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than six months or a fine of less than fifty thousand rupees.]

Further, the power given to the Police under Section 64 of the Copyright Act, for conducting search and seizure at the infringer’s premises and produce the seized goods before the Magistrate, is actually rendered without teeth, unless the Police has the power to register the FIR and arrest the infringer without a warrant from the Magistrate at the place of offence.

Though the judgement passed by the Hon’ble Division Bench of the Rajasthan High Court in Nathu Ram (supra) could be persuasive upon all the High Court’s having bench of coordinate or less strength, the controversy needs to be authoritatively settled by the Hon’ble Supreme Court once and for all, or can be settled by suitable amendment in the Act, wherein a specific provision should be included to make the offence as ‘Cognizable’ to make it at par with the Trade Marks Act, 1999.

CAN OFFENCES UNDER SECTION 63 BE SETTLED THROUGH COMPROMISE?

Coming to the third aspect, whether an offence under Section 63 of the Copyright Act is compoundable or not, the Courts seem to be in unison about the same being non-compoundable in nature. However, the powers of the High Court under Section 482 Cr.P.C are ample and wide enough to allow the Court to quash the proceedings arising out of a non-compoundable offence as well. In the case of B.S. Joshi vs. State of Haryana, (2003) 4 SCC 675, the Hon’ble Supreme Court had held that “even though the provisions of Section 320 Cr.P.C would not apply to such offences which are not compoundable, it did not limit or affect the powers under Section 482 Cr.P.C., if for the purpose of meeting the ends of justice, quashing of FIR is necessary.”

In the case of Devender Bansal & Anr. vs. State (N.C.T. of Delhi) & Anr., Crl. M.C. 2059/2016, the Hon’ble Delhi High Court had held that “notwithstanding the fact that the offence under Section 63 of the Copyright Act is a non-compoundable offence, there should be no impediment in quashing the FIR under this section, if the Court is otherwise satisfied that the facts and circumstances of the case so warrant.” The parties in the present case had amicably settled their issues, and the Court quashed the FIR by referring to the Hon’ble Supreme Court in Gian Singh vs. State of Punjab, (2012) 10 SCC 303, wherein the Apex Court had recognized the need of amicable resolution of disputes in cases like the instant one.

In the case of Sanjay Kumar Behera & Ors. vs. State (N.C.T. of Delhi) & Anr. Crl. M.C. 10/2012 the Delhi High Court had quashed an FIR registered under Sections 52A/63/68A of the Copyright Act, since the parties had settled their disputes through a settlement agreement. It was pointed out by the Counsel for the State of NCT of Delhi that offences under Section 63 of the Copyright Act are non-compoundable in nature. However, since the complainant had resolved its issues with the accused, the court held that no useful purpose would be served in proceeding with the trial in this case, and proceeded to quash the FIR.

Furthermore, the Supreme Court in the case of Narinder Singh vs. State of Punjab, (2014) 6 SCC 466 had also held that those criminal cases that are having predominantly civil character, particularly those arising out of commercial transactions or arising out of matrimonial disputes/relationships, should be quashed when the parties have resolved their entire disputes among themselves.

We are of the view that this ratio of the Supreme Court will apply squarely on cases involving IP infringement, whether it is copyright, trade mark, patents etc. since the same are predominantly civil in nature.     

[1] Sanjay Singh vs Govt. Of Nct Of Delhi & Anr., Delhi High Court, Crl. M.C. No. 538/2009

 

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