Page 1

The Role and Rule of Law A Legal Handbook on The Indian Media & Entertainment Industry


Disclaimer This book has been authored by Naik Naik & Company. The book has been written after research and analysis of domestic laws, guidelines and regulations governing the media and entertainment industry. Naik Naik & Company has taken due care to ensure that the information contained in this book is accurate. However, Naik Naik & Company accepts no legal responsibilities for any consequential incidents that may arise from errors or omissions contained in this book. Readers are advised to seek independent professional advice for taking any action on any issue mentioned in this book. All rights in the book are reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without written consent from Naik Naik and Company

Year of publication: 2014

Book Design: Mad Earth Studio


The Role and Rule of Law

A Legal Handbook on The Indian Media & Entertainment Industry


Foreword

From the age old cinema to the digital cinema; From monochrome TV to the burgeoning medium of web TV; From gramophones to DVDs and Ring Tones; From Dial-up connections to broadband, From Desktop Apps to Web Apps; From landlines to Voice over Internet Protocol; From personal home page discussion forums to widespread social networks; From pen and paper to hits and clicks‌ Indeed!!! The Technology Media and Telecommunication sector has come a long way and continues to evolve at rocket speed!!!! The rapid development of new technology has changed the landscape of the media and entertainment sector, which is now a vast economic empire with film, television, print, radio, sports, celebrity management, digital media including internet, live events, advertising, gaming and so on. As the frenzy grows, the role and rule of law becomes more pivotal in this dynamic and maturing sector, to strike a balance between the creative, financial and legal phenomenon. It is here that laws guiding the media and entertainment industry step in. Because otherwise, India will not be able to cope with technological, financial, creative, social and political changes sweeping the industry right now. Indian cinema, for instance, acquired industry status and has become well-defined and systemized over time. Having completed a century, Indian cinema has witnessed the transformation of domestic studios from being one- man production houses to the existing corporate entities, which have made presence felt even at the international capital markets. The industry’s success story has clearly been jointly scripted by the creative and corporate worlds. International collaborations have seen Indian film companies tying up with Hollywood production companies for co-production of films in In-

dia. The entry of international studios has helped streamline processes, thereby resulting in better value creation for all stakeholders. Indian films have also acquired a global platform by making their mark at international film festivals and feeding the growing appetite of the burgeoning overseas market. The digitization of cinemas has resulted in wider releases, especially in Tier 2 and Tier 3 towns and semi-urban areas. The country has one of the largest broadcasting industries in the world with close to 161 million TV households, more than 795 satellite channels, 88 teleports, 245 FM Radio channels and more than 165 community radio stations operating in India. The radio sector too has expanded to accommodate more than 245 FM Radio channels and more than 165 Community Radio Stations. The third Phase of FM licensing, which was notified in July 2011, will allow 839 new FM channels across 294 cities, resulting in FM Radio coverage of all cities with population of one lakh and above. India already has more than 120 million internet users and the country’s growth rate in this segment is far ahead of many of the developing nations. From being a mere mode of communication, the internet now plays a role in almost every aspect of our lives. The revenues from the print industry in India are expected to increase at over 9% CAGR to reach 331 billion INR in 2017 from 212 billion INR in 2012. Rising population, improved literacy levels and relaxation of foreign investment norms are among the factors spurring this growth. Celebrity endorsements, though in the nascent stage in India, have resulted in the establishment of talent management agencies. Indian artistes have become global icons and the growing platforms for exploitation for their rights have led to the need to better manage these rights. Live entertainment too is a booming sector and has proved to be a significant source of revenue for the media and entertainment industry.


In this backdrop, the role and rule of law has been vital to the growth of the media and entertainment industry. Forums such as the Competition Commission of India are playing an important role to curb anticompetitive and unfair activities in the industry. Regulatory bodies like TRAI play a very important role in crafting the roadmap for the content industry. Indian entertainment companies have begun to access foreign capital markets and structured funding and private equity participation will boost productivity. While the Copyright Act, 1957 has been amended in 2012 to protect the rights of authors and owners of copyright and encourage creativity, the amendment has resulted in multiplicity of litigation challenging the grey areas. While certain copyright societies are awaiting registration under the Act, registered societies like Indian Singers Rights Association are facing difficulties in enforcement of royalty rights of performers. Recognizing the statutory role of the Central Board of Film Certification, Indian courts have discouraged frivolous litigation seeking injunctive reliefs on exploitation of films. Courts have recognized that film makers and artists must have a broad field of creativity protected by the fundamental right to freedom of speech and expression guaranteed under the constitution of India and such creativity must not be circumscribed by baseless and frivolous objections. The courts tend to depreciate irresponsible claims initiated after a film being certified to be fit for public exhibition by the Central Board of Film Certification, the statutory body constituted for the purpose. Indian courts have also been prompt in rejecting blackmail tactics used by litigants who approach courts closer to the eve of release of a film or television program to extract undue benefits. International studios have also been able to protect their works through Indian courts.

Emergence of self-regulatory bodies like Broadcast Content Complaints Council constituted by Indian Broadcasting Federation has immensely contributed in content governance. The recent years have witnessed increased litigation on remake and adaptations of classic films. Indian courts have a demonstrated a balanced approach in protecting original creative works on one hand and dissuading dishonest claims on the other hand. Effective steps have been initiated for curbing piracy, implementation of digitization and measurement of television viewership. The Book has been authored by Naik Naik & Company, a leading law firm in the media and entertainment space, with the objective to outline the application and evolution of law and identify the key challenges faced by the industry. The firm started its practice in 2004 and has been ranked as a Band I firm for its leadership in Technology, Media and Telecommunication (TMT) by Chambers & Partners in 2009, 2010, 2011, 2012 and 2013. The Firm has also been ranked as the best in the service sector of TMT by India Business Law Journal and is recommended by Legal 500. I would like to thank our clients, who have entrusted us with challenging matters, which have only added depth to our repertoire of experience. I would like to thank our entire team at Naik Naik and Company. In particular, I would like to thank Madhu and Anushree for their invaluable contribution and research; also, Ravi and Abha for their continuous support in the Media and Entertainment practice. Finally, I would like to thank the Confederation of Indian Industry (CII) for this opportunity to collaborate on this book.

Ameet B. Naik Managing Partner, Naik Naik & Company

Head Office:

Nariman Point Office:

Andheri Office:

New Delhi Office:

116 B, Mittal Towers, Nariman Point, Mumbai 400021, INDIA. Tel. : +91 22 40680200 +91 22 22854657 / 58 / 59 Fax : +91 22 22854660

135 & 136 B, Mittal Towers, Nariman Point, Mumbai 400021, INDIA.

Office No.4, 3rd Floor, Woodrow, Veera Desai Road, Andheri (West), Mumbai 400053, INDIA. Tel: +91 22 40507100 Fax: +91 22 40507105

12, Lawyers Chamber (Old), Supreme Court of India, Tilak Marg, New Delhi 110001, INDIA.


Contents 2 83 120 131 145 156 165 182 188 190

Sector 1: Film Sector 2: Television Sector 3: Radio Sector 4: internet sector 5: celebrity management sector 6: live events sector 7: Print Foreign investment Conclusion Annexure


Sectorone 4 6

CHAPTER I: INTRODUCTION

D.

Procedure to challenge film certification

E.

Litigation pertaining to exhibition of films post certification

A.

Registration of copyright

F.

B.

Authorship and ownership of copyright

Certification of films for video films and satellite exploitation

C.

Rights of authors and owners of works

G.

D.

Transfer of copyright – assignment and licence

Mib advisory on cbfc certificate before trailers

H.

Mib advisory on rash driving

E.

Term of copyright

F.

Remedies prescribed for infringement of copyright

CHAPTER VI: FILM/TRADE ASSOCIATIONS IN INDIA

G.

Adaptation and remake rights

A.

Dipsutes relating to theft of idea and underlying literary and musical works in films

Nature of film trade associations and their role

B.

Regulation of power of film trade associations under competition law

I.

Performer’s rights- formation of isra and the myriad interpretations revolving performers rights

L.

66

CHAPTER VII: DISTRIBUTION AND EXHIBITION OF FILMS

Piracy, rights and remedies under Copyright Act to control piracy

A.

Distribution rights and platforms

Acts not amounting to infringement - fair dealing

B.

Types of distribution agreements

C.

Film distribution territories

D.

Local cinema regulations

Compulsory license

M. Statutory license for cover versions

53

61

H.

K.

46

Certification of films – procedure and principles governing certification

CHAPTER II: APPLICATION OF COPYRIGHT ACT, 1957

J.

40

C.

N.

Copyright societies and their role

O.

Copyright Rules, 2013

P.

Petitions filed challenging the Copyright Amendment Act, 2012 and Rules, 2013

Q.

Music industry

R.

International treaties and conventions signed by India

CHAPTER III: LAW GOVERNING TITLE OF FILMS A.

Protection under statute – Copyright Act, 1957 and Trademarks Act, 1999

B.

Dipsutes pertaining to registration of titles

69

73 76

CHAPTER VIII: FINANCE AND CO-PRODUCTION OF FILMS A.

Models of film financing and co-production arrangements in India

B.

International treaties on co-production

CHAPTER IX: FILM INSURANCE A.

Film insurance

B.

Completion bond companies

CHAPTER X: TAXES APPLICABLE ON PRODUCTION, DISTRIBUTION AND EXHIBITION OF FILMS A.

Tax deductable at source

B. Service tax

CHAPTER IV: MISCELANEOUS DIPSUTES RELATING TO FILMS

C.

Value added tax

D.

Goods and service tax

A. Tort

E. Stamp duty

B. Scenes showing smoking in films

F. Show tax

C.

Defamation of persons – living or dead

G.

D.

Disputes for enforcement of security interest in films

E.

Principle of de minimus non curat lex

CHAPTER V: CERTIFICATION OF FILMS A.

Application of Cinematograph Act, 1952

B.

Role and constituttion of Central Board for Film Certification

80

Entertainment tax

CHAPTER XI: SHOOTING COMPLIANCES BY FOREIGN FILMMAKERS AND ARTISTES A. Shooting of films in India by foreign filmmakers B. Shooting requirements by indian crew at overseas sites:

190 Annexure i


Films Highlights • The Indian Performing Right Society judgment (1977), for the first time, recognized underlying rights in cinematograph films thereby establishing that a producer can defeat the rights of the author and be the first owner. • In the case of RG Anand Vs Deluxe Films (1978), the Supreme Court held that there is no copyright in an idea. It is always open to any person to choose an idea as a subject matter and develop it in his own manner and give expression to the idea by treating it differently from others. • In Kanungo Media (P) Ltd vs RGV Film Factory (2007) the court held that there is no copyright in a title and laid down the test of secondary meaning. • In the case of Twentieth Century Fox vs BR Films (2009), an Indian court protected the copyright in the underlying work in respect of the Hollywood Film, My Cousin Vinny. The case resulted in the first ever settlement for a Hollywood Studio. • In Prakash Jha Productions vs Union of India and others (2011) the Supreme Court set aside the ban imposed on the release of Aarakshan by the Uttar Pradesh government stating that once the censor board has cleared a film for public exhibition, it is no excuse to say for the state government that there may be a law and order situation and it is for the government concerned to see that the law and order situation is maintained. • John Doe orders: UTV Software Communications Limited vs Home Cable Network Ltd. And Ors (2011) saw the first John Doe order to prevent piracy of the Bollywood films 7 Khoon Maaf and Thank You while Warner Brothers India Pvt. Ltd (2012) resulted in the first John Doe order for a Hollywood film, The Dark Knight Rises. • Disposing eight complaints including Eros International Media Limited against Central Circuit Cine Association, Indore & Ors (2012), the Competition Commission of India for the first time held that diktats such as compulsory registration of films with trade associations and forcing producers to abide by their unfair and discriminatory rules amounted to abuse of dominant position by the trade associations. • The Copyright Rules, 2013 were notified on March 14, 2013.

• ISRA (Indian Singers’ Rights Association) received its Certificate of Registration from the Central Government on June 14, 2013 and is the first registered copyright society after the Copyright Amendment Act, 2012 coming into effect.Six petitions have been filed challenging the Copyright Amendment Act, 2012 and the Copyright Rules, 2013 by the authors, producers, music labels, broadcasters and book publishers. • In Leopold Café & Stores v/s Novex Communications Pvt. Ltd (2014), the Bombay High Court clarified the co-existence of Section 30 and 33 of the Copyright Amendment Act, 2012 by ruling that copyright owners would be allowed to license their works themselves or through their authorized agents under Section 30 of the Copyright Act, however agents like Novex cannot be allowed to be in the business of issuing or granting licenses as per Section 33 of the Copyright Act. • In the case of Asha Audio Company v/s Om Prakash Sonik & Ors (2013), the Calcutta High Court suspected IPRS of indulging into collusive litigation. • In the case of Techlegal Solutions Pvt. Ltd. V Mrs. Genelia Ritiesh Deshmukh & Ors (2014) pertaining to the trademark dispute over the film titled “Lai Bhari”, the Bombay High Court noted that if the protection of IPR was extended to give persons proprietary rights over common expressions/ phrases across products and services, this would in effect result in choking the entirety of a language. • India acceded to the Madrid Protocol and was the first country to ratify the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled. • In the case of Saregama India Limited v/s Viacom18 Motion Pictures (2013) pertaining to utterance of the words “Mere Sapno Ki Rani” in the film Special 26, the Calcutta High Court amongst other grounds, confirmed the applicability of the principle of De Minimus Non Curat Lex (the law does not concern itself with trifles). • MIB released advisory on television channels to show CBFC certificate before airing any film or its trailer as well as an advisory on not showing scenes of rash and negligent driving and where such scenes are unavoidable to accompany them with appropriate disclaimers/ warnings.


4

Role and Rule of Law Media & Entertainment Industry Films

01. Introduction

F

ilms play a vital and dominant role in the social fabric of India. The country can boast of being the largest producer of films, both in the mainstream and regional cinema spheres. The year 2012 marked the completion of 100 years of Indian cinema.

Indian Cinema has evolved over the decades in its artistic supply and commercial viability. From blockbusters such as Sholay and Hum Aapke Hai Kaun to the recent hits such as Chennai Express, Dhoom 3 and Kick and the dominant position of the Khans, this industry has realised value and money for all its stakeholders. The last decade or so has seen significant collaboration between the creative world and the corporate world. This amalgamation with a balanced approach has yielded results at the box office and it would be fair to say that this success story was scripted by a joint effort of both these worlds. Both culturally and economically, cinema has metamorphosed into a huge business. It was at this premise and through the collective efforts of the people in the entertainment business that the government accorded it the status of an industry. Bollywood is the creation of our intelligent media and the Hindi film industry and the regional film industry are two sides of the same coin with each contributing significantly to the growth of the industry. From the old production houses, which were one-man shows, to the emergence of corporate entities comprising the next generation of filmmakers, the evolution of studios has taken place. Production houses are now participating in distribution in a big way, which has helped them realise value even in the capital market. International studios have also helped streamline processes. India has a lot to gain from the international experience where cinema has been in existence for more than 100 years. For the first time, the Indian regulator has recognised the importance of

cinema. International co-productions are at an all-time high and have resulted in value creation for all stakeholders. Indian artistes have become global icons and internet provides a clear indication of how the Indian artiste is perceived globally. In this backdrop, the most significant development has been with regard to the rule and role of law in this sector. The Indian regulators, forums and courts have played a very active and dominant role in recognition and protection of copyright and fundamental rights of creative expression. This section is our attempt to summarise the manner in which the law plays a dynamic role in the value chain for the end-delivery of films. We think this section would be of great help to readers as it covers legal issues arising out of or relating to the film industry. This is only a small attempt to trace the application and evolution of law.

Constitutional Genesis of the Entertainment Sector Right to Freedom of Speech and Expression The Constitution under the provisions of Article 19 (1) (a) guarantees the Right to Freedom of Speech and Expression which forms the basis of functioning of the media and entertainment industry. Courts have held a citizen’s right to produce films or to exhibit films as a part of the freedom of expression1. Also the acting done by an actor is held to be an expression of creative talent, which is a part of freedom of expression 2. Further, Article 19 (2) lists down the reasonable restrictions to freedom granted under Article 19 (1) (a) wherein the State reserves the 1

Odyssey v Lokvidayan, AIR 1988 SC 1642: (1988) 3SCC 410

2

Bharat Bhawan Trust v Bharat Bhawan Artists’ Association, (2001) 7SCC 630


5

power to impose restrictions in the event the exercise of such freedom is against the law, public order or morality, defamation, contempt of court or incitement to an offence.

The nexus of Seventh Schedule with the Entertainment Industry The Indian Constitution, while being the longest and the most elaborate, has the distinction of having the most eloquent distribution of powers between the Union and the States. In India’s federal democracy, while there is a constant tussle between the Union and the States, the Indian courts have, time and again, upheld the constitutional supremacy and recognised the division of power as enshrined under Article 245. Laws governing the media and entertainment industry, like any other law, trace their origin to the Constitution and we have endeavoured to encapsulate the scheme under the Constitution in so far it relates to the Union, State and the Concurrent lists. The nexus between the Seventh Schedule and the entertainment industry is unique, as the Copyright Act and Cinematographic Act are legislated by the Parliament while the State Legislators deal with subjects such as local cinema regulations and entertainment duty, etc.

The relevant Entries under the Union list are as follows: Entry 49 of the Union List elaborates on subjects such as “Patents;

Inventions and Designs; Copyright; Trade-Marks and Merchandise Marks”: ► Copyright Act, 1957, that deals with protecting the copyright of creators of literary, dramatic, musical, artistic works and producers of cinematograph films and sound recordings.

► Trade Marks Act, 1999, which provides for registration and better protection of trademarks for goods and services and for the prevention of the use of fraudulent marks; ► Patents Act, 1970, which is a statute governing inventions, registration of inventions and controlling the usage, making and sale of such inventions for a limited period;

prehension of public unrest in the State or in apprehension of a law and order situation, restrict a film from exhibition in the state.

Entry 35 empowers the state government to legislate laws governing “works, lands and buildings vested in or in the possession of the State” therefore the regulations applicable to the multiplexes, single theatres and other exhibition centers situated on a property are to be governed by the state government. Entry 54 specifies that the levy of taxes on the sale and purchase of goods are to be decided upon by the state government.

Entry 62 of the State List provides that the “Taxes on luxuries, includ-

ing taxes on entertainments, amusements, betting and gambling” are to be governed and regulated by the State Legislatures. Few such legislations are: State relaxation on Entertainment Tax

Certain states have relaxed the Entertainment Tax for: Movies instilling values: Movies are exempted from entertainment tax when they bring to the table apart from healthy entertainment, some ethical values that the government would like to see diffused. Some of the movies that have enjoyed this exemption in various states in the last few years are Swades, Black, Lagaan, Rang De Basanti, Bhaag Milkha Bhaag, Mary Kom, Mardaani and Katiyabaaz. The states also grant tax exemptions to the movies whose production process took place in the state. Multiplex start up: As an incentive to set up a multiplex, the govern-

ment of Maharashtra under the Bombay Entertainments Duty Act 1923, Section 3(13)a for a new multiplexes imposes ‘no duty’ for the first three years, for next two years 25% duty is leviable and from the sixth year full amount is leviable, on the rates charged. Similar exemption is also given by several other states such as Punjab, West Bengal, etc.

Language Based Exemption: Another manner of exemption is on State language movies. For instance, Tamil movies screened in Tamil Nadu have no Entertainment Tax levied on them.

Local regulations:

► Designs Act, 2000, a statute which strives to promote designs by registration and protection of the registered designs;

In addition to Central and State laws, local municipal regulations would also be applicable to the industry with respect to:

Entry 60 of the Union List empowers the Parliament to legislate on the

Property Tax

subject of “sanction of cinematograph films for exhibition” therefore, the Cinematograph Act, 1952, came into force in order to sanction the exhibition of films across the country.

Entry 61 of the Union List empowers the Parliament to legislate laws governing industrial disputes concerning union employees in the film industry. The Federation of Western India Cine Employees (FWICE) is a registered trade union.

Show Tax Development Control Regulations Licenses to set up an office/multiplex/theatre Stamp Duty on all relevant transactions, etc.

Entry 83 of the Union List empowers the Parliament to legislate on the

laws relating to ‘duties of customs including export duties’. The Customs Act, 1962, is applicable to the entertainment industry.

The relevant Entries under the State List are: Entry 33 of the State List empowers the State Legislature to make laws

for the subject of “theatres and dramatic performances; cinemas subject to the provisions of Entry 60 of List I; sports, entertainments and amusements.” Therefore, every State has legislated laws which govern/ regulate the license provisions for places where the exhibition of a cinematograph film and also the state government may, in rare cases of ap-

Entertainment and Taxation: Union

State

Local Authority

Service Tax

Value Added Tax

Property Tax

Income Tax

Entertainment Tax

Show Tax

Customs Duty

Stamp Duty

(Refer to Annexure 1 for a list of Central, State and local laws)


Role and Rule of Law Media & Entertainment Industry Films

6

02. APPLICATION COPYRIGHT ACT, 1957

C

opyright is an exclusive right given by law for a certain term to an author, composer, etc. (or his assignee) to print, publish, reproduce, adapt, distribute, translate, perform and display his original work.

Procedure for registration: Chapter VI of the Copyright Rules,

The Copyright Act, 1957, recognises and protects copyright in six categories of works:

b. Separate applications should be made for registration of each work;

i) ii) iii) iv) v) vi)

Literary work Musical work Artistic work Dramatic work Cinematograph film Sound recording.

Object of copyright law: The copyright law aims to encourage authors, composers, artists, etc. to create original works by rewarding them with the exclusive right for a limited period to reproduce works. It allows the author, composer, artist, etc. to enjoy the fruits of their creative works and protects against plagiarism and unfair exploitation of the works. On the expiry of the term of copyright, the works belong to the public domain and anyone can reproduce them without permission.

A. REGISTRATION OF COPYRIGHT It is not mandatory to register a copyright. Copyright comes into

existence as soon as a work is created. However, facilities exist for having the work registered in the Register of Copyrights maintained in the Copyright Board/Office. The entries made in the Register of Copyrights serve as prima-facie evidence in the court of law. The Copyright Board has been set up to provide registration facilities to all types of works and is headed by a Registrar of Copyrights.

1956, sets out the procedure for the registration of a work as follows: a.

c.

An application for registration is to be made;

Each application should be accompanied by the requisite fee; and

d. The applications should be signed by the applicant or the advocate in whose favour a Vakalatnama or Power of Attorney has been executed. e.

Three copies of published work may be sent along with the application. If the work to be registered is unpublished, a copy of the manuscript has to be sent along with the application.

Infringement of copyright Section 51 of the Act deals with infringement of copyright. Copyright is deemed to be infringed when any person, without license being granted by the owner of copyright, does anything, the exclusive right to do which is by the Act upon the owner of copyright. For instance, if a person has copyright in a literary or musical work and another person issues a copy of such work in the public or reproduces such work in any material form, without consent of the owner of the work, he shall be infringing copyright of the owner of such work. The Act also prohibits any dealing with an infringing copy, including sale or hire, display, distribution by any way of trade or import or in a manner to prejudicially affect the owner of copyright.


In Anandji Virji Shah and others vs Ritesh Sidhwani and others (2006), the Bombay High Court heard a case where the Plaintiffs claimed to be the owners of the copyright in respect of the musical works, including theme music/score and music for two songs, Yeh Mera Dil and Khaike Pan Banaraswala, of the film, Don (1978).


Role and Rule of Law Media & Entertainment Industry Films : Chapter 2 : Application Copyright Act 1957

8

B. AUTHORSHIP AND OWNERSHIP OF

to be created.

COPYRIGHT

Owner of copyright

Author of copyright

Section 17 of the Copyright Act specifies that the author of the work shall be the first owner of copyright therein.

► The Copyright Act distinguishes between authorship and ownership of copyright. In simple words, an author is the person who creates a work. Therefore under Section 2(d) of the Copyright Act, an author means: (i) In relation to a literary or dramatic work, the author of the work; (ii) In relation to a musical work, the composer; (iii) In relation to an artistic work other than photograph, the artist; (iv) In relation to a photograph, the person taking the photograph; (v) In relation to a cinematograph film or sound recording, the producer; and (vi) In relation to any literary, dramatic, musical or artistic work, which is computer generated, the person who causes the work

► As per Section 17 (a) of the Copyright Act, in case of a literary, dramatic or artistic work made by the author in the course of employment by the proprietor of a newspaper or magazine under a contract of service or apprenticeship, for the purpose of publication in a newspaper or magazine, such proprietor is, in the absence of any agreement to the contrary, the first owner of copyright in the published work. ► As per Section 17 (b) of the Copyright Act, in case of a cinematograph film made for valuable consideration at the instance of any person, such person shall, in the absence of an agreement to the contrary, be the first owner of copyright therein. ► As per section 17 (c) of the Copyright Act, in case of a work made in the course of author’s employment under contract of service or apprenticeship, the employer shall, in the absence of an agreement to the contrary, be the first owner of copyright therein.

Important Case Laws: Indian courts have been approached in several cases pertaining to challenge on ownership and authorship of copyright.

Indian Performing Right Society v Eastern India Motion Picture Association Court: Supreme Court of India

Citation: AIR 1977 SC 1443 Coram: VR Krishna Iyer and Jaswant Singh, JJ Date: March 14, 1977 Facts: Indian Performing Right Society, a registered copyright society representing lyric writers, composers and publishers, published a tariff laying down fees, charges and royalties that it proposed to collect for the grant of licence for performance in public of works in respect of which it claimed to be an assignee of copyrights and to have the authority to grant licences as required by the Copyright Act, 1957. The Respondent and others, which were associations of film producers, claimed to be owners of such films including the soundtrack. Ratio: The Supreme Court observed that the rights of a music com-

poser or lyricist can be defeated by the producer of a cinematograph film in the manner laid down in provisos (b) and (c) of Section 17 of the Copyright Act. According to first of these provisos, viz, proviso (b), when a cinematograph film producer commissions a composer of music or a lyricist for reward for valuable consideration for the purpose of making his cinematograph film or composing music or lyrics therefore i.e. the sounds for incorporation or absorption in the sound track associated with the film, which as already indicated, are included in a cin-

ematograph film, he becomes the first owner of copyright therein and no copyright subsists in the composer of the lyric or music so composed unless there is a contract to the contrary between the composer of the music or lyric on one hand and the producer of the cinematograph film on the other. The same result follows according to aforesaid proviso (c) if the composer of music or lyrics is employed under contract of service or apprenticeship to compose the work. It is therefore crystal clear that the rights of a music composer or lyricist can be defeated by the producer of a cinematograph film in the manner laid down in provisos (b) and (c) of Section 17 of the Act.

● In Anandji Virji Shah and others v Ritesh Sidhwani and others1 (2006), the Bombay High Court heard a case where the Plaintiffs claimed to be the owners of the copyright in respect of the musical works, including theme music/score and music for two songs, Yeh Mera Dil and Khaike Pan Banaraswala, of the film, Don (1978).

The Plaintiffs sought an injunction on the release of Don (2006), a remake of the 1978 film, as it contained the two songs and the theme music/score of which the Plaintiffs claimed to be the authors and owners of the copyright. The court held that the Plaintiffs were commissioned by Nariman Films (producer of the 1978 Don) and had composed the music for valuable consideration and therefore Nariman Films were the first owners of the copyright and not the Plaintiffs. The court also refused to grant any interim relief on grounds of delay and laches on the part of the Plaintiffs, who approached the court three days before the release of the film.

1

Citation: Order in Notice Motion No. of 2006 in Suit (L) No. 2993 of 2006


9

● In Nariman Pictures and others v Baba Arts Ltd. and others2

(2011), the Bombay High Court, once again refused to grant interim injunction for the release of the film on grounds of delay on behalf of the Plaintiffs. The court observed that Don-2 was due to be screened in less than 48 hours and all third party contracts, theatre bookings, distribution of prints to the distributors and the owners of the theatres has been done and a grant of injunction at this stage would cause grave harm and irreparable injury to third parties.

2

Citation: Appeal Lodging No. 851 of 2011 in Suit Lodging No. 3404 of 2011

C. RIGHTS OF AUTHORS AND

OWNERS OF WORKS Rights of Authors

Prior to the 2012 amendments to the Copyright Act, if the author of a particular work was not the first owner of the copyright, then the author had no right vested in him in such works except the moral right referred to in Section 57 of the Act. Section 57 of the Copyright Act provides for special rights of an author,

● In 2010, the Calcutta High Court in Saregama India Ltd v Puneet

Prakash Mehra and others3 [Houseful case] reiterated that the rights of a music composer or lyricist can be defeated by the producer of a cinematograph film in the manner laid down in proviso (b) and (c) of Section 17 of the Copyright Act. (Please refer to Annexure 1(ii) for cases details)

3 Citation: APO No. 253/2010, CS No. 101/2010, APO No. 254/2010, CS No.112/2010, GA 1423/2010 and APO 265/2010, CS No.109/2010, GA 1731/2010

independent of the author’s copyright and even after assignment, either wholly or partially of the said copyright. Such rights include: a) the right to claim authorship of the work; and b) the right to restrain or claim damages in respect of any distortion, mutilation, modification or other act in relation to the said work if such distortion, mutilation, modification or other act would be prejudicial to the honour or reputation of the author. c) The Act also empowers the legal representatives of the author to exercise the rights conferred upon the author in this section (save and except the right to claim authorship of the work).

Important Case Laws: ● Mannu Bhandari v Kala Vikas Pictures Pvt. Ltd. and another Court: Delhi High Court Citation: AIR 1987 Delhi 13

ment of the copyright. To put it differently, the contract of assignment would be read subject to the provisions of Section 57 and the terms of contract cannot negate the special rights and remedies guaranteed by Section 57.”

Facts: The Appellant/Original Plaintiff had assigned the rights to

► The court observed that sub-clause (a) of clause (1) of Section 57 prohibits any distortion of mutilation of the author’s work. “The words “other modification” appearing in the sub-clause (a) will have to be read ejusdem generis with the words “distortion” and “mutilation”. The modification should not be so serious that the modified form of the work looks quite different work from the original.

Ratio: The court observed that, “Section 57 lifts authors’ status beyond the material gains of copyright and gives it a special status.”

► “Only “certain modifications” which are necessary for converting the novel into a film version are allowed. The second object of modifications is to make the film version suitable for a successful film. But the said modifications are to be done after discussion with the author. The contract further states that proper publicity will be given to the plaintiff as the author of the said story in all credits (commercial and other publicity).”

► The court held that, “Section 57 confers additional rights on the author of a literary work as compared to the owner of a general copyright. The special protection of the intellectual property is emphasized by the fact that the remedies of a restraint order or damages can be claimed even after the assignment either wholly or partially of the said copyright. Section 57 thus clearly over-rides the terms of the contract of assign-

► The parties moved a joint application for settlement on August 7, 1986. In view of the settlement between the parties the findings of facts and the directions given in this judgment have become ‘Otiose’ (infructuous). The respondents were free to exhibit the movie in accordance with the settlement between the parties. The appeal as well as the suit was dismissed as withdrawn.

Coram: SB Wad, J Date: August 8, 1986 make a film on the basis of her novel, Aap ka Bunty, to the Respondent. The Appellant had filed a suit seeking permanent injunction against screening and exhibition of the film on the basis that the film was a mutilation and distortion of her novel. An appeal was filed against the refusal of the ad-interim order by the trial court.


10

Role and Rule of Law Media & Entertainment Industry Films : Chapter 2 : Application Copyright Act 1957

CHANGES INTRODUCED BY THE COPYRIGHT AMENDMENT ACT, 2012 Pursuant to the amendment to the Copyright Act in 2012, under Section 19 read with Section 18 (as amended) a new right has been created in the author of works. This is apparent from a harmonious reading of Sections 17, 18 and 19 of the Act.

Author’s right to Royalty ► Section 19 has been amended by introducing sub Section 8, 9 and 10. ► Section 19(9) effectively creates in the author of any work who has assigned the right to make a cinematograph film based on his work, the right to claim an equal share of royalties and consideration payable in the case of utilisation of the work in any form other than for communication of the work along with the cinematograph film in a cinema hall. ► Section 19(10) creates a similar right in the author of any work who has granted an assignment to use his work to make a sound recording when his work is utilised in any form.

in the royalty on an equal basis with the assignee of the copyright. ► By reason of the second newly inserted proviso to Section 18, the exploitation of a cinematograph film, in which an author’s literary or musical work is included, outside the cinema hall entitles the author to receive royalty to be shared on an equal basis with the assignee. However, assignment or waiver of the right to receive royalty even in respect of a literary or musical work which is not included in a cinematograph film or in a sound recording, is not prohibited. ► Such royalty rights vested in the authors have been further protected with the introduction of proviso to Section 17 [after clause (e)] by the amendment:

New proviso to Section 17. “Provided that in case of any work incorporated in a cinematograph work, nothing contained in clause (b) & (c) shall affect the right of the author in the work referred to in clause (a) of sub Section 1 of Section 13”.

Right to royalty non-assignable ► Section 18 has been amended by introducing three new provisos. The new second and third provisos to Section 18 place a restriction on the author of a literary or musical work which is included in a cinematograph film or a sound recording from assigning or waiving the right to receive royalty and which royalty is to be shared by the author on an equal basis with the assignee of the copyright. Under the second newly inserted proviso, such right to share royalty will not be available when the literary or musical work is incorporated in a film and the work is communicated along with the cinema film in a cinema hall. Such author is not entitled to assign or waive the right to receive this royalty except to his legal heirs or to a copyright society for collection and distribution of royalty. The second proviso further lays down that any agreement to the contrary shall be void. The third newly inserted proviso is to similar effect except that it relates to literary or musical work included in a sound recording but not forming part of any cinematograph film. The author’s right in such a case is to receive an equal share in royalty for any utilisation of his work, and any agreement to the contrary is void. ► Thus, Sections 19(9) and 19(10) read with the newly inserted second and third provisos to Section 18, create a right in the author to claim a share in the royalty and consideration which right, prior to these amendments, was not in existence as regards an author who fell within the ambit of Section 17(b) or (c). ► Even in the case of an author who did not fall within Section 17(b) or (c) but which author was also the first owner of the copyright in his work, he had no right to receive royalty if he had made an absolute assignment of all his copyright in his work. Prior to these amendments, it was only the owner of the copyright who was entitled to claim or receive consideration which could be in the form of royalty or otherwise in respect of the work in which he held the copyright. However, now with these amendments, though the author may not be the owner of the copyright in the work, but if he has assigned the copyright in his work to make a cinematograph film or to make a sound recording, the author, notwithstanding that he has ceased to be the owner of the copyright in his work, is entitled to claim a share

► With the introduction of the aforesaid proviso to Section 17, the amended Act has made a distinction between the actual author of the work and the first owner of the copyright in such work, in respect of the works referred to in clause (a) of sub Section 1 of Section 13 of the Act. These works are literary, dramatic, musical and artistic works. The proviso applies only to these four works mentioned in Section 13(1)(a). Where any of the works mentioned in Section 13(1) (a) are incorporated in a cinematograph work, then notwithstanding that under Section 17(b) or (c), the first owner of the copyright is a person other than the actual author of those works, the author has been conferred with certain right. ► Section 21 of the Copyright Act provides for author’s right to relinquish any right in the copyright. The rights comprised in copyright have been provided in Section 14 of the Copyright Act. However, the author’s right to receive royalty as prescribed under the second and third newly inserted provisos to Section 18, is a right separate and independent of copyright hence it is reasonable to interpret that the provision of Section 21 does not apply to such royalty right of author.

Rights of owners ► The owner of copyright in a work has the exclusive right to do or authorise the doing of various acts in respect of a work or substantial part thereof as have been more particularly detailed above. ► In addition, the owner of copyright in a work is also entitled to certain civil remedies prescribed under Chapter XII of the Copyright Act in case of infringement of copyright. Such remedies include injunction, damages and accounts and otherwise as are or may be conferred by law for infringement of a right. The expression “owner of copyright” would include: (a) An exclusive licensee; (b) In the case of an anonymous or pseudonymous literary, dramatic, musical or artistic work, the publisher of the work, until the identity of the author or, in the case of an anonymous work of joint authorship, or a work of joint authorship published under


11

names, all of which are pseudonyms, the identity of any of the authors, is disclosed publicly by the author and the publisher or is otherwise to the satisfaction of the Copyright Board by that author or his legal representatives. ► As per Section 58 of the Copyright Act, all infringing copies of any work in which copyright subsists and all plates used for production of such infringing copies, shall be deemed to be the property of the owner of copyright, who accordingly may take proceedings for recovery of possession thereof or in respect of the conversion thereof.

D.

TRANSFER OF COPYRIGHT – ASSIGNMENT AND LICENSE The Copyright Act provides for transfer of copyright by two modes: (i) Assignment (ii) License

Assignment of copyright ► Section 18 of the Copyright Act provides for assignment of copyright in an existing work or a future work. However, assignment in any future work shall take effect only when the work comes into existence. Assignment may be made either wholly or partially and the same may be subject to limitations. Further assignment may be either for the whole of copyright or any part thereof. ► The newly inserted proviso to Section 18 by Copyright Amendment Act, 2012, reads as under: “Provided further that no such assignment shall be applied to any medium or mode of exploitation of the work which did not exist or was not in commercial use at the time when the assignment was made, unless the assignment specifically referred to such medium or mode of exploitation of the work: The new proviso refers to any medium or mode of exploitation of the work and in this regard refers to two categories of medium or mode of exploitation: (i) mode or medium of exploitation which did not exist; and (ii) mode or medium of exploitation which was not in commercial use, at the time when the assignment was made. Therefore, by the first part of the proviso, any assignment of copyright in any work shall not apply to any mode or medium of exploitation of the work which either did not exist or was not in commercial use at the time of the assignment. The second part of the proviso permits the assignment to apply to a medium or mode which did not exist or was not in commercial use at the time of the assignment but the assignment specifically referred to such medium or mode of exploitation of the work. The intention of this provision appears to be that the assignee shall not be entitled to any right in any medium or mode of exploitation which either did not exist or was not in commercial use at the time of the assignment unless the assignment specifically referred to such medium or mode of exploitation. Now, it is possible to refer specifically to a particular medium or mode of exploitation if the same is known or is in existence even if it is not in commercial use at the time of the assignment. Therefore, under the second part of the first proviso, it is possible for an assignment to make a specific reference to that medium or mode of exploitation which is not in commercial use at the time of the assignment but which is known to exist. It is not possible to refer specifically to any mode or medium of exploitation which is not at all in existence and therefore which is unknown at the time of the assignment. So, if a

new medium or mode of exploitation is invented subsequent to the date of assignment, such assignment will not entitle the assignee to exploit the work by the new medium or mode which was not in existence of the date of the assignment but has come into existence subsequently. This is because the assignment could never have referred specifically to such medium or mode of exploitation on the date of assignment since it was completely unknown and not in existence.

Mode of assignment of copyright:

Section 19 of the Copyright Act prescribes the mode of assignment: An assignment has to be made in writing, signed by the assignor or by his duly authorised agent and shall specify the work, the rights assigned and duration and territorial extent of assignment. The assignment shall also specify the royalty and other consideration payable to the author or his legal heirs during the duration/term of assignment.

► If an assignment agreement is silent on the period of assignment, such period shall be deemed to be five years from the date of assignment and if it is silent on the territorial extent of assignment of rights, the same shall be presumed to extend within India. ► If the assignee does not exercise the rights assigned to him within a period of one year from the date of assignment, the assignment of such rights shall be deemed to have lapsed after expiry of the said period, unless otherwise specified in the assignment.

Disputes with respect of assignment of copyright As per Section 19A of the Copyright Act, if an assignee fails to make sufficient exercise of the rights assigned to him and such failure is not attributable to any act or omission of the assignor or if a dispute arises with respect to assignment of copyright, the Copyright Board may pass appropriate orders including order for revocation of assignment. However, no order of revocation shall be made within a period of five years from the date of such assignment.

License of copyright Section 30 of the Copyright Act provides for licence of copyright in an existing work or a future work. However, licence in any future work shall take effect only when the work comes into existence. ► A licence has to be made in writing, signed by the licensor or by his duly authorised agent and shall specify the work, the rights licensed and duration and territorial extent of licence. The licence shall also specify the royalty and other consideration payable to the author or his legal heirs during the term of licence. ► If a license agreement is silent on the period of licence, such period shall be deemed to be five years from the date of licence and if it is silent on the territorial extent of licence of rights, the same shall be presumed to extend within India. ► If the licensee does not exercise the rights licensed to him within a


12

Role and Rule of Law Media & Entertainment Industry Films : Chapter 2 : Application Copyright Act 1957

period of one year from the date of licence, the licence of such rights shall be deemed to have lapsed after expiry of the said period, unless otherwise specified in the licence.

E. TERM OF COPYRIGHT The term of copyright prescribed for various works under the Copyright Act is as under: ► In published literary, dramatic, musical and artistic works published within the lifetime of author, copyright shall subsist until 60 years from the beginning of the calendar year next following the year in which the author dies; ► In anonymous and pseudonymous works, copyright shall subsist until 60 years from the beginning of the calendar year next following the year in which the work is first published; ► In posthumous work i.e. in case of a literary, dramatic or musical work or an engraving, in which copyright subsists at the date of death of the author, or in the case of any such work of joint authorship, at or immediately before the date of death of the author who dies last, but which, or any adaptation of which has not been published before that date, copyright shall subsist until 60 years from the beginning of the calendar year next following the year in which the work is first published or, where an adaptation of the work is published in any earlier year, from the beginning of the calendar year next following that year; ► In photographs, copyright shall subsist until 60 years from the beginning of the calendar year next following the year in which the photograph is published. ► In cinematograph films, copyright shall subsist until 60 years from the beginning of the calendar year next following the year in which the film is published. ► In sound recording, copyright shall subsist until 60 years from the beginning of the calendar year next following the year in which the sound recording is published. ► In government works, copyright shall subsist until 60 years from the beginning of the calendar year next following the year in which the record is first published. ► In works of public undertakings, copyright shall subsist until 60 years from the beginning of the calendar year next following the year in which the work is first published. ► In works of international organizations, copyright shall subsist until 60 years from the beginning of the calendar year next following the year in which the work is first published.

F. REMEDIES PRESCRIBED FOR

INFRINGEMENT OF COPYRIGHT

The Copyright Act prescribes both civil and criminal action for infringement of copyright.

Civil remedy Chapter XII provides civil remedies for infringement of copyright. In case of any civil suits regarding copyright infringement, the concerned District Court has the exclusive jurisdiction.

The owner of the copyrighted work shall be entitled to all such civil remedies available by way of injunction, damages, and accounts of profits and otherwise as are or may be conferred by law for the infringement of a right. This right includes but is not limited to the recovery of possession of the infringed work, confiscate the items, recover any profits that have been earned. The cost of all parties in any proceedings in respect of the infringement of copyright shall be in the discretion of the court.

Criminal remedy The punishment for infringement of copyright, as laid down under Section 63 of the Copyright Act, is imprisonment for six months but which may extend to three years and with fine which shall not be less than Rs 50,000 but which may extend to Rs 2 lakh . The punishment, in case of a second and subsequent conviction shall not be less than one year but which may extend to three years and with fine which shall not be less than Rs 1 lakh but which may extend to Rs 2 lakh. In this regard, any police officer, not below the rank of a sub-inspector may, on being satisfied of an offence being committed or likely to be committed in this regard, may seize without warrant, all copies of the work and all plates used for the purpose of making infringing copies of the work, wherever found and all copies and plates so seized shall, as soon as practicable be produced before a magistrate.

Remedy in case of groundless threat of legal proceedings Section 60 of the Copyright Act provides that if any person claiming be the owner of copyright in any work, threatens any other person with any legal proceedings or liability in respect of an alleged infringement of copyright, the aggrieved person may institute a declaratory suit that the threats related was not in fact an infringement of any legal rights of the person making such threats and may: (i) Obtain an injunction against the continuance of such threats; and (ii) Recover such damages, if any, as he has sustained by reason of such threats. This provision would, however, not apply if the person making such threats, with due diligence, commences and prosecutes an action for infringement of copyright claimed by him.

G. ADAPTATION AND REMAKE RIGHTS Indian cinema has always witnessed the production of remake or adaptations of films from Hollywood or any local Indian language. Such remakes / adaptations, even if a scene-by-scene inspiration, were often made without acquiring rights or license from the original producer. Some of these remakes / adaptations based on information available in the public domain include Pyaar Ka Saaya (adaptation of Ghost), Main Aisa Hi Hoon (adaptation of I Am Sam), Heyy Baby (adaptation of Three Men and a Baby). However, with the cognizance taken by producers of original films (Hollywood or local Indian language) and stringent implementation of copyright laws, acquiring rights to produce an official remake or adaptation is a new trend.


13

Important Case Laws: One of the first instances where a Hollywood studio raised an objection to an alleged remake of their film being produced was the case of the Hindi film, Partner. Sony Pictures threatened to sue the producers of Partner for allegedly producing a remake of their film, Hitch. However, no legal action was initiated. ► In the case of Twentieth Century Fox v BR Films1 , an Indian court was inclined to protect the copyright in the underlying work in respect of the Hollywood film, My Cousin Vinny, and placed reliance on the correspondence under which the Defendants had sought to acquire rights. The matter was eventually settled. ► In 2004, once again a Hollywood studio was able to protect its copyright in an alleged remake of the film, Phone Booth, which resulted in an injunction in favour of Twentieth Century Fox. Subsequently, the injunction was vacated by the appeal court only on deposit of money. Both these judgments laid the foundation for recognizing and protecting international work in the cinematograph space and will continue to go a long way in protecting plagiarism of any Hollywood film.

● Twentieth Century Fox v BR Films and Anr. Court: Bombay High Court Citation: Notice of Motion No. 1561 OF 2009, Suit No.1925 OF 2009] Coram: SJ Kathawalla, J Date: August 5, 2009 Facts: The Plaintiff filed a suit on May 7, 2009, for copyright infringe-

ment against the Defendants claiming that the Defendant’s film, Banda Yeh Bindaas Hai, was an unofficial remake of their film, My Cousin Vinny. Plaintiffs sought an injunction against the release of the film, Banda Yeh Bindaas Hai.

Ratio: The parties settled the matter out of court and the consent terms were recorded by the court.

● Twentieth Century Fox v Sohail Maklai Entertainment Pvt. Limited

and granted an interim injunction against release and exploitation of KnockOut on the ground that any average viewer of both films would come to the unmistakable conclusion that the defendant‘s film is a copy of the plaintiff‘s film. The judge observed that it is the quality of the copied work and not the quantity that would determine infringement of the work or substantial part thereof. The test of concluding whether the second work is a pirated copy of the first work is the impression of the average viewer. The other test is that if the infringing parts were removed from the copied work whether the remainder would become meaningless and hence what must be seen is the substance, the foundation, the kernel and the copied work and to see if the rest can stand without it. There is little doubt that a person seeing both the films at different times would come to the unmistakable conclusion that the defendant’s film is a copy of the plaintiff’s film. That cannot be allowed to prevail in the present form. The judge while granting the injunction held that the original novel expression of the idea in both the films of the plaintiff and the defendants relate to a man held hostage in a telephone booth by a sniper. The injunction was passed a day before the scheduled release of the film KnockOut. The defendants preferred an appeal against the order of injunction granted by the single judge on the same day before a division bench of Bombay High Court.

Ratio: The division bench allowed the film KnockOut, to be released subject to the producers depositing a certain sum with the court and maintaining accounts of the box office collections. The suit was disposed of on March 5, 2013 after the minutes of order (consent terms) were submitted in the court by which apparently the parties had settled the dispute. As a consequence of the above judicial precedents, Indian cinema has witnessed production of authorised remakes and adaptations after acquiring remake / adaptation rights from the producers of the original film. Some instances in this regard are the films: We Are Family (adaptation of Step Mom), Players (adaptation of The Italian Job) and Nagesh Kukunoor’s film, Mod (an official remake of the Taiwainese film, Keeping Watch). Adaptations are made not only from released films but also from books and literary works in the public domain.

Court: Bombay High Court Citation: [2011(1) BomCR750] ( (Notice of Motion No. 2847 of 2010 in Suit No. 2692 of 2010) Coram: Mohit S Shah and DY Chandrachud, JJ

● Barbara Taylor Bradford v Sahara Media Entertainment Ltd. Court: Calcutta High Court

Date: October 14, 2010

Citation: G.A. No. 2310 of 2003, A.P.O.T. No. 394 of 2003 with C.S. No. 145 of 2003 and T.S. No. 210 of 2003

Facts: The Plaintiff alleged that the defendant’s film, KnockOut, was

Coram: Ajoy Nath Ray and Joytosh Banerjee, JJ.

infringing copyright in the screenplay of their film, Phone Booth. The single judge of the Bombay High Court viewed both the films

1

Citation: Notice of Motion No. 1561 OF 2009, Suit (L) No. 1084. Suit No.1925 OF 2009]

Date: June 16, 2003. Facts: The Appellant-Plaintiff had sued the Respondents-Defendants for infringing her copyright in the 1979 bestseller, A Woman of Sub-


14

Role and Rule of Law Media & Entertainment Industry Films : Chapter 2 : Application Copyright Act 1957

stance. The Appellant-Plaintiff wanted to stop the telecast of a serial, Karishma - A miracle of Destiny, of some 300 planned episodes, of Respondent No.1. Till then only one episode of the said serial was broadcast on May 12, 2003. The story writer and other directors denied having ever read the book. The court had passed an order dated June 30, 2003, whereby the Appellant-Plaintiff were not granted an injunction against the Respondent-Defendant but it directed the RespondentsDefendants to furnish a bank guarantee to the extent of Rs 25 lakh. The Appellant-Plaintiff filed an appeal against the said order.

Ratio: The court held, “The Copyright Law does not protect basic plots

and stock characters. If it granted such protection, four or five writers writing 15 or 20 novels with stock characters and stock plots could stop all writers of pop literature from writing anything thenceforth.”

The court observed that the Appellant-Plaintiff had failed to establish a prima-facie case as copyright infringement could not alone be established on the borrowing of some characters and plot. The court held that the balance of convenience was in the favour of the Respondents-Defendants as they had expended a great amount of money on the said serial. The appeal was thus dismissed and the court lifted the obligation to furnish bank guarantee.

such perspective. The Court therefore held that ad-interim reliefs on the ground of violation of moral rights could not granted at the ad-interim stage not only on the ground of gross delay but also on the ground that the Plaintiff had not talked about vulgarity/obscenity in her complaint to the film Writers Association on March 12, 2013 but in the said complaint had also claimed damages for Rs. One crore for the alleged violation of copyright as well as the moral rights which led the court to conclude that at the ad-interim stage there was no prima facie finding that the moral rights of the Plaintiff had been violated. With regards to the allegation qua violation of copyright the Court took note of the agreement between the Plaintiff and the producer of the 1981 film, PLA Productions wherein the Plaintiff had permanently given her rights to PLA Productions of the story, screenplay and dialogue written by her for the 1981 film. Since the Plaintiff had crystallized her claim in monetary terms for violation of her copyright and moral rights, the Court did not find any prima facie case in her favour and found the balance of convenience in favour of the Defendants. The matter was eventually withdrawn by the Plaintiff on January 22, 2014.

● Salim Khan & Anr v/s Sumeet Prakash Mehra and others (Zanjeer)

● Sai Paranjpaye v/s PLA Entertainment Pvt. Ltd. and others (Chashme Buddoor)

Court: Bombay High Court

Court: Bombay High Court

2013

Citation: Notice of Motion no. (L) 764 of 2013 in Suit no. (L) 280 of

2013

Coram: S.J Kathawalla, J. Date: April 4, 2013 Facts: The Plaintiff had written and directed the film “Chashme Bud-

door” in 1981. Defendant No.1 i.e. PLA Entertainment Private Limited was the assignee of all the film rights of the said original film. Defendant No.1 had assigned the remake rights of the 1981 film to Defendant No. 3 i.e. Viacom 18 Media Private Limited who accordingly produced the remake version of the film titled “Chashme Baddoor in 2013 which was written and directed by Defendant No.2 i.e. Mr. David Dhawan. The Plaintiff had filed the suit alleging that the Defendants were guilty of violating the Plaintiff’s copyright and / or author’s special rights conferred under the Copyright Act, 1957. The Plaintiff’s claim was that on enquiry, she had discovered that the said remake was a complete distortion and/ or mutilation of the Plaintiff’s work “Chashme Buddoor” (1981) which was confirmed when she saw the trailer of the remake film. The Plaintiff accordingly filed the suit, inter alia, for an order of permanent injunction from theatrically and/ or otherwise releasing the film Chashme Baddoor (2013) and also for a decree in favour of the plaintiff and against the Defendants for a sum of rupees fifty lacs as and by way of damages for pirating/ corrupting and / or distorting/ mutilating the work of the Plaintiff.

Ratio: The Court found the balance of convenience in favour of the

Defendants and rejected the ad-interim application of the Plaintiff. The Court held that the Plaintiff is guilty of unpardonable delay in approaching the court one day prior to the release of the film despite the news of the remaking of the said film being in public domain since the year 2007 and repeatedly in the years 2011 to 2013. With respect to the claim on infringement of moral rights, the Court observed that the 2013 film had been granted censor certificate and what the Plaintiff perceived as vulgar/ obscene may not be looked by the general public in

Citation: Notice of Motion (L) No. 768 of 2013 in Suit (L) No. 283 of Coram: S.J. Kathawalla, J. Date: September 2, 2013. Facts: Mr. Prakash Mehra produced and directed the Hindi film “Zan-

jeer” starring Amitabh Bacchan and Jaya Bahaduri; the story, dialogues, screenplay of which was written by the Plaintiffs under the banner of Prakash Mehra Productions. The Plaintiffs Mr. Salim Khan and Mr. Javed Akhtar had alleged copyright infringement of the script they had written for the original ‘Zanjeer’ produced by Prakash Mehra in 1973. They prayed for a permanent order of injunction restraining Sumeet Mehra and others (heirs of Prakash Mehra, the Defendants in this case) from in any manner exhibiting, releasing, displaying, communicating to the public anywhere in the world the remake film “Zanjeer” in Hindi and Telugu languages or any other language. The Plaintiffs contended that they were the authors of the script of the original Zanjeer. According to them, this literary work was never commissioned by Prakash Mehra and it was in existence even before Prakash Mehra had approached the Plaintiffs for the same. Moreover, Prakash Mehra was granted a one time permission to make the said film in 1973. Therefore, Prakash Mehra’s rights were restricted only to the cinematographic film “Zanjeer” made in the year 1973 and did not extend to the underlying “literary work” since there was no authorization from the Plaintiffs to this effect. The Plaintiffs thus contended that all the rights including the right to remake a cinematographic film based on the literary work, in any language in the absence of any assignment under Sections 18 and 19 of the Copyright Act continues to remain with the Plaintiffs and no remake film can be made based on the said literary work by the Defendants, without the written consent of the Plaintiffs.

Ratio: The Court came to the conclusion that Prakash Mehra had com-

missioned the work from the Plaintiffs for consideration of Rs.55,000/each and was therefore the first owner of the underlying works of the film which included the literary work. The turning point of the case was the following sequence of events: (i) Plaintiff No.1 narrated the “story idea” of “Zanjeer” to Dharmendra; (ii) Dharmendra paid valuable con-


Films like chashme budoor, zanjeer and sholay form subject matter of dispute in courts on the issue of remakes and adaptation


16

Role and Rule of Law Media & Entertainment Industry Films : Chapter 2 : Application Copyright Act 1957

sideration for that story; (iii) Dharmendra narrated the story to Prakash Mehra and asked him to take a script from the Plaintiffs based on the said story; and (iv) Dharmendra then commissioned the Plaintiffs to write a script on behalf of Prakash Mehra based on the said story. Several interviews of Prakash Mehra and Salim Khan were examined and the court found clear statements that showed that the script had been bought by Dharmendra and later by Prakash Mehra from Salim Khan and it was not a case of mere licensing. The assessment order of the relevant year along with the profit and loss account and the breakup of the costs of the movie were also produced where it was shown that Rs. 55,000/- was paid to each author as a consideration for ‘script and screenplay’. The court disregarded a letter written by Dharmendra that the Plaintiffs produced to prove that the script was not bought because the letter was produced at a very belated stage. The Plaintiffs had also contended that they had licensed the “remake rights” of the literary work in respect of all South Indian languages, in favour of Mr. S.V.S. Manian. The Plaintiffs produced an affidavit of the wife of Shri S.V.S. Manian dated December 31, 2012, confirming that her husband had bought the story rights in the Hindi film “Zanjeer” from the Plaintiffs for a period of 25 years for the making of the Tamil film “Sirithu Vazha Vendum”. But no written license was produced. The court disregarded the affidavit and left its authenticity to be checked at the stage of cross examination. On the basis of these facts and based on the decision in the IPRS v/s EIMPAA 1977 Supreme Court case, the court came to a prima facie conclusion that it is the producer i.e. Prakash Mehra who became the first owner of the copyright in the underlying work (the script) and therefore had a right to remake the same (this right now vests with his heirs (the Defendants). Moreover, the court found that the Plaintiffs had unduly delayed in bringing the case to court. They were closely associated with the Film industry and therefore could not take the plea that they were not aware that the Defendants were in the process of remaking Zanjeer, which was widely publicized. Also, since the Plaintiffs had quantified their claims in monetary terms at Rs. 6 crores, the court found that they were not entitled to a mandatory injunction. This was because even if the Court would have come to the conclusion that the Plaintiffs are the owners of the copyright since the Plaintiffs’ claim falls within the provisions of Section 38 (3) (c) and not under Section 38 (3) (b) of the Specific Relief Act, 1963, their claims would be satisfied by payment of monetary compensation and not by an injunction. The Notice of Motion was thus dismissed. The Plaintiffs filed an appeal before the division bench of the Bombay High Court against the said order of the single judge. During the course of the hearing for the appeal, the Appellants (original Plaintiffs) informed the court that they wished to withdraw the appeal and suit unconditionally. The appeal and suit were thus dismissed as withdrawn vide order dated September 4, 2013.

● Ramesh Sippy V/s Shaan Ranjeet Uttamsingh and others (Sholay) Court: Bombay High Court Citation: Appeal No. 334 of 2013 in Notice of Motion No. 406 of 2013

Sholay, filed the suit claiming to be the author and first owner of the copyright and also to the Author’s Special Rights in the film titled “Sholay” and other four films viz. (i) Seeta aur Geeta, (ii) Saagar, (iii) Shaan and (iv) Andaz. The Plaintiff alleged the Defendants to be guilty of infringement of the Plaintiff’s copyright and the Author’s Special Rights in the said film Sholay and the said other films. The Plaintiff in the notice of motion, sought temporary injunction against Def No. 5 to 8 from dealing with or disposing of and / or parting with or assigning and/or creating any right, title and interest or dealing in any manner whatsoever with the said film Sholay. The Plaintiff also sought a temporary injunction against Defendant Nos. 7 and 8 from in any manner communicating to the public the purported 3D version of the said film Sholay in India or outside India. The Learned Single Judge (Justice S.J. Kathawalla) denied ad-interim reliefs to the Plaintiff for the following reasons (i) The Plaintiff did not raise any objection claiming any copyright in the said film at any time till the filing of the present suit i.e. for almost 40 years (ii) The said film was broadcast on television on numerous occasions to which also the Plaintiff never objected. From 1997 till date of the suit the said film was broadcasted over 50 times on Zee Network to which the Plaintiff did not object to (iii) the Plaintiff never objected to the assignment of rights by the Defendants and/or the public notices pertaining to the 3D version of Sholay nor did he assert any right of ownership in various films including the said film Sholay (iv) The Plaintiff in a newspaper interview had quoted that he had no idea about the film Sholay being turned into 3D but his best wishes were conveyed to whoever was making it (v) In a dispute between the Defendants in Delhi High Court pertaining to the film Sholay, the Delhi High Court held that the rights in the said film vested with Def No. 4 and 5 (vi) Def No. 5 had adopted several proceedings to prevent the infringement of rights in Sholay. The Learned Single Judge concluded that from the aforesaid facts it was clear that the Plaintiff never claimed to be the author/ owner qua the copyright in the cinematograph film Sholay and for the first time after 40 years made his claims for reasons best known to him. The Learned Single Judge thus held that the Plaintiff failed to make a prima facie case in his favour and the balance of convenience was in favour of the Defendants and against the Plaintiff and therefore no ad-interim reliefs were granted to the Plaintiff. The Plaintiff filed an appeal before the division bench of the Bombay High Court against the order passed by the Single Judge.

Ratio: The Learned Division Bench of the Bombay High Court upheld the order passed by the Single Judge finding no reason to interfere with the order and thereby dismissed the appeal. The Plaintiff thereby filed a special leave petition (Special Leave to Appeal (Civil) No(s).5/2014) in the Supreme Court. However the SLP was disposed by the Supreme Court). The matter is pending before the Bombay High Court.

Other landmark cases:

in Suit No. 166 of 2013

● RG Anand v Delux Films

Coram: S.J. Vazifdar and G.S. Patel, JJ

Court: Supreme Court of India

Date: December 3, 2013

Citation: AIR 1978 SC 1613

Facts: The Plaintiff, Mr. Ramesh Sippy director of the 1975 cult film

Coram: Jaswant Singh, RS Pathak and S Murtaza Fazal Ali, JJ.


17

Date: August 18, 1978 Facts: The Plaintiff, an architect and also a playwright, dramatist and

producer of several stage plays, wrote and produced a play, Hum Hindustani, in 1953. In January 1955, the Plaintiff met the second and third Defendants and had detailed discussions about the play and its plot and the desirability of filming it. However, after this discussion, the Plaintiff received no further communication from the second Defendant. In May, 1955, the Defendants started making the film, New Delhi, which, the Plaintiff gathered, was based on his play. In September 1956, the movie was released and after viewing it, the Plaintiff filed a suit for infringement of his copyright in his play, Hum Hindustani. His claims included damages, account of profits and a permanent injunction against the Defendants restraining them from exhibiting the movie.

Ratio: While holding that no copyright exists in an idea, the court

observed: “Thus, the position appears to be that an idea, principle, theme, or subject matter or historical or legendary facts being common property cannot be the subject matter of copyright of a particular person. It is always open to any person to choose an idea as a subject matter and develop it in his own manner and give expression to the idea by treating it differently from others. Where two writers write on the same subject , similarities are bound to occur because the central idea of both are the same but the similarities or coincidences by themselves cannot lead to an irresistible inference of plagiarism or piracy. Thus, on a careful consideration and elucidation of the various authorities and the case law on the subject discussed above, the following propositions emerge: 1. There can be no copyright in an idea, subject matter, themes, plots or historical or legendary facts and violation of the copyright in such cases is confined to the form, manner and arrangement and expression of the idea by the author of the copyright work.

2. Where the same idea is being developed in a different manner, it is manifest that the source being common, similarities are bound to occur. In such a case the courts should determine whether or not the similarities are on fundamental or substantial aspects of the mode of expression adopted in the copyrighted work. If the defendants work is nothing but a literal imitation of the copyrighted work with some variations here and there it would amount to violation of the copyright. In other words, in order to be actionable the copy must be a substantial and material one which at once leads to the conclusion that the defendant is guilty of an

H. DIPSUTES RELATING TO THEFT OF IDEA

AND UNDERLYING LITERARY AND MUSICAL WORKS IN FILMS

Indian courts have been seized with several cases wherein the Plaintiff has alleged theft of underlying literary and musical works in cinematograph films. It is well-settled law that there is no copyright in an idea. What is sought to be protected is expression of an idea in a tangible form. In the landmark case of RG Anand v Deluxe Films1 , the Supreme Court has observed that that an idea, principle, theme, or subject matter or historical or legendary facts being common property cannot be the

1

Citation: AIR 1978 SC 1613

act of piracy. 3. One of the surest and the safest test to determine whether or not there has been a violation of copyright is to seeing the reader, spectator or the viewer after having read or seen both the works is clearly of the opinion and gets an unmistakable impression that the subsequent work appears to be a copy of the original. 4. Where the theme is the same but is presented and treated differently so that the subsequent work becomes a completely new work, no question of violation of copyright arises. 5. Where however apart from the similarities appearing in the two works there are also material and broad dissimilarities which negative the intention to copy the original and the coincidences appearing in the two works are clearly incidental no infringement of the copyright comes into existence. 6. As a violation of copyright amounts to an act of piracy it must be proved by clear and cogent evidence after applying the various tests laid down by the case law discussed above. 7. Where however the question is of the violation of the copyright of stage play by a film producer or a Director the task of the plaintiff becomes more difficult to prove piracy. It is manifest that unlike a stage play a film has a much broader prospective, a wider field and a bigger background where the defendants can by introducing a variety of incidents give a colour and complexion different from the manner in which the copyrighted work has expressed the idea. Even so, if the viewer after seeing the film gets a totality of impression that the film is by and large a copy of the original play, violation of the copyright may be said to be proved.” In Vipul Amrutlal Shah v Shree Venkatesh Films Pvt. Ltd. and Ors1 , (2009) the court held that Petitioner had no copyright in the idea but in the expression of such idea i.e. the cinematographic film Namastey London. It held that the Bengali film, Poran Jaey Joliya Re, infringes such right and therefore, the Petitioner was entitled to an order of interim injunction. (Please refer to Annexure 1(iii) for details of other cases) 1

Citation: GA No. 2064 of 2009 and CS No. 219 of 2009

subject matter of copyright of a particular person. It is always open to any person to choose an idea as a subject matter and develop it in his own manner and give expression to the idea by treating it differently from others. ► Ram Sampath’s case in 2008 was the first of its kind where the judge in a suit alleging copyright infringement heard the musical score of the Plaintiff and that of the film, Krazzy 4, in his chamber and came to a conclusion that there was similarity in the two musical scores. This case resulted in the first settlement of its kind. ► Script writer Kapil Chopra, in 2012, was able to procure an injunction against the alleged infringement of his work in respect of the satellite broadcast of the film, Jannat-2. The basis of this judgment was breach of confidentiality and the high court placed heavy reliance in its judgment on the findings of the Script Writers’ Association.


18

Role and Rule of Law Media & Entertainment Industry Films : Chapter 2 : Application Copyright Act 1957

Important Case Laws: ● Ram Sampath v Rajesh Roshan [Krazzy 4] Court: Bombay High Court Citation: 2009 (40) PTC 78 (Bom) Order in Notice of Motion No. 1330 of 2008 in Suit No. 1135 of 2008 Coram: DG Karnik, J Date: April 9, 2008 Facts: The Plaintiff filed a suit for perpetual injunction restraining the

defendants from infringing the plaintiff’s copyright in musical composition/theme tune titled, The Thump, and for damages. The plaintiff had composed, The Thump, and licensed it for a period of one year to a media agency to use in an advertisement for Sony Ericsson. Subsequently, the Plaintiff noticed that The Thump had been used/ copied in four songs (Kraazy 4, Break Free, Kraazy 4 remix and Break Free remix) of the film Kraazy 4.

Ratio: The court held that the Defendants’ work infringes the copy-

right of the Plaintiff on the grounds that an expert feels that The Thump track and the aforesaid four songs share the same musical cadence, rhythmic structure and phrasing, genre of music and melodic structure; There is a tacit admission by the defendants that the songs contain copy of a small portion of six seconds which is repeated four to five times; A man, illiterate in music, on hearing the two songs feels that the latter is a copy of or plagiarism of the former work. The court restrained the Defendants from releasing the film containing the four soundtracks, which contained copies of the plaintiff’s musical work, The Thump. However, the Defendants were allowed to release the film by removing the infringing part from the film. After the interim injunction was pronounced, the parties settled the suit. The defendants paid a sum of Rs 2 crore to the Plaintiff and the matter was disposed of.

Smt. Sakshi Punjabi v. Mrs. Shobha Kapoor and others (Shaadi Ke Side Effects) Court: Bombay High Court

Citation: Notice of Motion (L) No. 416 of 2014 in Suit No. 177 of 2014 Coram: S.J KATHAWALLA, J. Date: February 27, 2014 Facts: The Plaintiff had filed the Suit, inter alia, seeking direction to

the Defendants to depict the name of the Plaintiff in the credits of the film “Shaadi Ke Side Effects” and for permanent injunction restraining the Defendants from releasing the suit film in theatres or distributing it in any manner on the ground of breach of confidence and infringement of copyright in the Plaintiff’s storyline/script. The Plaintiff created a concept which was expressed in a synopsis/concept note including core theme, characters, introduction, set-up titled “Just adjust” based on the trials and tribulations of an urban married couple, and registered the same with the Film Writers Association, Mumbai. The Plaintiff in the

alternative relief, sought a declaration that the Defendant Nos. 1 to 9 are liable to pay to the Plaintiff 10 per cent of the profits made from each of the act of using and exploiting the Plaintiff’s work in the suit film as royalty for original work, and in the alternative to pay to the Plaintiff an amount of Rs. 40,00,000/-( Rupees Forty lakhs only) as damages.

Ratio: The Court held that it is trite law that there can be no copy-

right in a theme or an idea. Where the same idea is being developed in a different manner, certain similarities are bound to occur. After going through the synopsis and storyline of the Plaintiff, the script of the film submitted on behalf of Defendant No. 6, the similarities and dissimilarities between the work of the Plaintiff and the suit film and the propositions set out by the Hon’ble Supreme Court in the case of R.G. Anand, the Court was prima facie of the view that the Plaintiff failed to establish that the Defendants have breached any of the rights of the Plaintiff as alleged. The Court further held that the Plaintiff had not only failed to make out a prima facie case for grant of urgent ad interim relief in her favour, but the Plaintiff was guilty of gross delay on her part in approaching the Court i.e. one day prior to the release of the suit film and therefore the balance of convenience is also completely in favour of the Defendants and against the Plaintiff. Ad-interim reliefs were hence rejected to the Plaintiff. The matter is pending before the Bombay High Court.

● Sushant Supriya v/s N Tiwari (Bhootnath Returns) Court: Delhi High Court Citation: CS (OS) 896/2014 Coram: A.K. Pathak, J. Date: April 4, 2014 Facts: The plaintiff claimed the heart of the movie (Bhootnath Re-

turns) the trailer, was the complete adaptation of his literary work. The plaintiff referred to nine expressions from the trailer of the movie, and said they have been copied from short story ‘Bhoothnath’ of the writer published in 2007 in Hindi magazine ‘Aaj Kal’. The Plaintiff sought for permanent injunction restraining the Defendants, their partners or proprietor from infringing the copyright of the Plaintiff in the literary character Bhoothnath, from screening the trailer of the film ‘Bhoothnath Returns’ or releasing the film or parting with the satellite or DVD or internet rights for the film.

Ratio: The court rejected the interim application of the Plaintiff. It perused, analyzed and compared the brief synopsis of the script of the film and the trailer with the story ‘Bhootnath’ written by Sushant Supriya (plaintiff) and concluded that there could be some resemblance between the plaintiff’s story and the film as they both relate to ghost, but there were no substantial similarities between the two. The matter is pending before the Delhi High Court.

Uday Singh Deshraj Rajput V/s Filmkraft Productions (India) Pvt. Ltd and others (Krrish 3) Court: Bombay High Court

Citation: O.S. Appeal No. 434 of 2013 in Notice of Motion No.2138 of


19

2013 in Suit (L) NO.967 of 2013

Citation: Notice of Motion (L) no. 502 of 2014 in Suit No. 219 OF 2014

Coram: A.P. Bhangale and S.C. Gupte, JJ

Coram: G. S. Patel, J.

Date: October 31, 2013

Date: June 20, 2014

Facts: The suit was filed by the Plaintiff for a decree and order that

Facts: The Plaintiff, a professional film script writer had authored a film script titled “ONCE”.

the Plaintiff is the owner of the script and screen play of the film Krrish – 3 and that the Defendants are not entitled to use the script and the screen play for Krrish – 3 or any other film. The Plaintiff also sought a permanent injunction restraining the Defendants from exhibiting in any manner the film Krrish – 3 or any part thereof, the story of which he alleged to be infringed by defendant No.2. The Plaintiff also sought damages for infringement of his alleged rights and for passing of his story in the sum of Rs. 2 crores. According to the Plaintiff, he had written the script Krrish -2 and had got the same registered with the Film Writer’s Association, Mumbai, on July 28, 2008. Thereafter, he started looking for a suitable director and film producer for making the film, and whilst on the lookout for the same in Mumbai, he met the Defendant No. 2 (Mr. Rakesh Roshan) on July 30, 2008, who gave him some suggestions to make the film. The plaintiff as per the suggestions incorporated those suggestions into his script and by registered post on July 30, 2008 sent a copy of the original script to the Defendant No. 2 which was received and acknowledged by the Defendant No. 2. The plaintiff claimed that the Defendant No. 2 had agreed to pay Rs. 50,00,000/- towards the first instalment and Rs. 1.5 crores after the release of the film. The Plaintiff claimed that the defendants without paying any consideration to the plaintiff used his story and made the film named Krrish-3 based on his story and thereby violated his intellectual property rights. The Learned Single Judge (Justice S.J. Kathawalla) vide order dated October 29, 2013 rejected the ad-interim application of the Plaintiff. The Learned Single Judge was of the view that the Plaintiff has approached the court with a completely bogus case. He pointed out the discrepancies and contradictory statements given in the Plaintiff’s Advocates Notice and the Plaint. He observed that the bona fides of the Plaintiff’s case is therefore seriously in doubt and no ad-interim relief could be granted. He also pointed out that the film was to be released on November 1, 2013 for which the Defendants had spent to the tune of Rs. 140 crores and that the film was in news since the last one and a half years and hence there was gross delay by the Plaintiff in approaching the court. The Learned Judge also held that in the event of the Plaintiff establishing his claim at the time of the hearing of the Notice of Motion and/or the Suit, the Court could always pass appropriate orders and could also consider the case of the Plaintiff for damages against the Defendants, which was estimated by the Plaintiff in the sum of Rs. 2 crores. The Plaintiffs filed an appeal before the division bench of the Bombay High Court.

Ratio: The division bench of the Bombay High Court upheld the Sin-

gle Judge’s order and rejected the prayer of the Plaintiff. The Division Bench also observed that while the Plaintiff claimed that he had met Mr. Rakesh Roshan, during the said period Mr. Roshan was out of India. The Court therefore held that when the movie is duly censored and certificate of exhibition issued and in such a case where the wrong was compensable in terms of money, they were not inclined to prevent release of the film. The Appeal was disposed of on December 2, 2013 and the suit is pending before the Bombay High court.

● Mansoob Haider V/s Yashraj Films Pvt. Ltd. & Ors (Dhoom 3) Court: Bombay High Court

The Plaintiff claimed that the Defendants’ film Dhoom 3, infringed the Plaintiff’s copyright in his script “ONCE”. In the suit, the Plaintiff sought an order that he should be given credit in the titles of the film. The Plaintiff claimed that he had delivered this script to Yashraj Films Pvt. Ltd’s (1st Defendant’s) office. Three years later, the film Dhoom 3 was released. After he saw the film he realised that the film and his original script were so similar that the only possibility was that the 1st Defendant i.e. Yash Raj Films and, in particular, Aditya Chopra & Vijay Krishna Acharya (Defendant Nos. 2 and 3 respectively), credited as co-authors of the film script for Dhoom 3(the 3rd Defendant being the director of the film) had infringed the Plaintiff’s copyright in his original work. The Notice of Motion sought a restraint on Defendant Nos. 1 to 3 from releasing the film on June 28, 2014 via satellite broadcast on television channel. This was proposed to be done by the 4th and 5th Defendants, who run several television channels under the name Sony TV. By the time the suit was filed the film had already enjoyed a general public release in December 2013.

Ratio: Court held that considering the very large volume of affidavits

and pleadings filed, the many authorities cited and the oral arguments, it found that at a prima-facie stage the Plaintiff had failed to make out a sufficient case for the grant of injunctive reliefs in the terms sought in the Notice of Motion. The Court concluded that the two works were entirely different, each original in its own way. The Plaintiff could not prove the submission of the script at the Defendant’s office. The Court concluded that the claim by the Plaintiff for copying the themes, elements or the motifs or the scenario did not amount to copy of the Plaintiff’s work. Therefore the court held that the Plaintiff has no right against the work of the Defendant. The Notice of Motion was accordingly dismissed. To discourage persons like the plaintiff from “taking their chances” in making frivolous cases of this king, the court also awarded against the Plaintiff in the token amount of Rs.1. The matter is pending before the Bombay High Court.

M/s Kshitij Movies International V/s Shri Rajv Hari Om Bhatia alias Akshay Kumar &Ors (72 Miles- Ek Pravas) Court: Bombay High Court

Citation: Notice of Motion No. 1054 of 2013 in Suit No. 550 of 2013 Coram: S. J. Kathwalla, J Date: July 30, 2013 Facts: The Plaintiff filed the suit for an order of permanent injunction, restraining Defendant Nos. 1 to 5 from releasing, in any manner, the Marathi feature film “72 Miles- Ek Pravas”. The Plaintiffs took out a notice of motion for a temporary injunction restraining the defendants from releasing the said Marathi feature film ’72 Miles- EkPravas’, during the pendency of the suit. The Plaintiff claimed that the impugned film was based on a Marathi novel “72 Miles” authored by one Shri.


20

Role and Rule of Law Media & Entertainment Industry Films : Chapter 2 : Application Copyright Act 1957

Ashok Whatkar (since Deceased) and published by Popular Publications, and that the Plaintiffs had acquired copyrights of the said book from his widow Smt. Uma Ashok Whatkar, vide an Agreement dated March 15, 2007. The Plaintiff also claimed to have registered the title “72 Miles” with Indian Motion Pictures Producers Association.

Ratio: The court observed that from a reading of the assignment agree-

ment dated March 15, 2007, it could be gathered that it was restricted to the extent of translation of the novel “72 Miles” into Hindi language and its publication and distribution. The Court held that it was clearly stated in the said Agreement that the widow Smt. Usha Whatkar would retain all the other rights with regard to the said novel and that it did not confer upon the Plaintiff, any rights with regard to the making of a feature film based on the novel “72 Miles”. The Plaintiff therefore had no right to have the name of the novel “72 Miles” registered as a title of a film with the Indian Motion Pictures’ Producers Association. Further, the court also held that the Agreement did not specify the time period for which the assignment of copyright had been made. Under Section 19 sub section (5) of the Copyright Act, 1957, the term of assignment would be for a period of 5 years since the date of assignment of copyright. Therefore the Assignment dated March 15, 2007 had come to an end on March 14, 2012. The court therefore held that as the plaintiff could not make out a prima facie case and as the balance of convenience was not in favour the plaintiffs, no ad-interim relief was granted to the plaintiff. The Suit was dismissed on September 6, 2013 for want of prosecution.

● Dhirendra Kumar V/s Ronnie Screwvala and another (Ghanchakkar)

Court: Bombay High Court Citation: Notice of Motion no. 1247 of 2013 in Suit (L) No. 513 of 2013 Coram: S.J. Kathawalla, J. Date: June 27, 2013 Facts: The suit was filed by the Plaintiff for a declaration that the

plaintiff is the exclusive copyright holder with respect to the story “Maal Kahan” and the Defendants had adopted and/or used that story for their movie titled Ghanchakkar”. The Plaintiff had also taken out a Notice of Motion seeking urgent ad interim reliefs restraining the Defendants from releasing their film. The Defendants contended that the story/ script based on which the film “Ghanchakkar” was made by the Defendants was registered with the Film Writers’ Association on July 22, 2009 i.e. much before the story of the Plaintiff “Maal Kahan” was registered.

Ratio: The Court after going through the story written by both parties concluded that there were substantial differences between the concept of the Plaintiff and the work of the Defendants. Except for the aspects of amnesia and robbery there was nothing common between the two stories. The Court also held that since the Defendant’s story was registered prior to the Plaintiff’s story, the question of Defendant using the Plaintiff’s story does not and could not arise. The Plaintiff had failed to make out a prima facie case of infringement of his copyright as alleged. The Court found the balance of convenience and the issue of irreparable injury in favour of the Defendants and thereby rejected the application for urgent ad-interim reliefs. The Notice of Motion was disposed of on July 5, 2013 as the movie had already released in the prayers in the notice of motion therefore became infructuous. On July 22, 2013, the suit was dismissed for want of prosecution.

● Radhey Shayam @ Raj V/s M/s Ramesh Sippy Entertainment Pvt. Ltd and Others (Nautanki Saala) Court: Bombay High Court Citation: Notice of Motion (L) No. 823 of 2013 in Suit (L) No. 308 of 2013 Coram: S. J. Kathawalla, J Date: April 10, 2013 Facts: Plaintiff sought urgent ad-interim reliefs i.e. an order restraining

the Defendants from releasing the cinematograph film “Nautanki Saala”. The Plaintiff claimed to be the owner of the copyright in the literary work i.e. the story named “DASTOOR (a Wrong Step)” which was registered with the Film Writers Association in 2008 and further alleged that the film “Nautanki Saala” was made by the defendants using the story of the movie “DASTOOR (a Wrong Step)”, thereby breaching the plaintiff’s copyright. The Defendants contended that the movie “Nautanki Saala” was the remake of a French movie originally titled “Après Vours”. The agreement for acquiring the remake rights between LPF LES Films Pelleas and Ramesh Sippy was executed on June 1, 2012 for a consideration of Rs. 4 crores was submitted by the Defendant.

Ratio: The Court observed that it was not the Plaintiff’s case that he had at any time narrated his story to the Defendants. Instead the Plaintiff had mentioned in his plaint that he had approached and narrated the film story to various producers, directors and production houses without naming any single producer, director and production house. The Plaintiff further confirmed that he had no objection to the release of the film if the scene pertaining to the theatre in the film “Nautanki Saala” is changed to a restaurant scene on which the Court observed that it showed that the Plaintiff was claiming that the defendants have breached the Plaintiff’s alleged copyright on the basis that the Defendants have shown the scene pertaining to the theatre from his story, which by no stretch of imagination could be treated as breach of copyright of his story. As the plaintiff did not disclose any cause of action and the balance of convenience was not in favour of the plaintiff the application for ad-interim relief was rejected. The matter was subsequently disposed of on February 27, 2014. In M/s KBC Pictures v AR Murgadoss & Ors.1 [Ghajini case (2008)], the court held that as there was an unsatisfactorily explained delay on the part of the Plaintiff to approach the court and the Plaintiff had approached the court only five days prior to the release of the said film, the delay had caused great prejudice to the Defendants who had invested large amounts in the making and advertisement of the said film and also third party interests had been created by that time. Thus, the court refused the interim relief and dismissed the motion. In Sushila Sharma v Madhur Bhandarkar & Ors2 [Jail case (2009)], the court criticised the increasing tendency to file suits and seek reliefs on the eve of the release of a film and with which big production houses, directors, technicians and artistes are associated and refused to grant interim relief. In Yash Patnaik and another v Red Chillies Entertainment Pvt. Ltd. and Others. 3 [Ra-One (2011)], the Appellants claimed an action of copyright infringement against the Respondent’s film Ra-One. The court allowed the film to be exhibited after the deposit of Rs 1 crore.

1

Citation: Draft Notice of Motion No. of 2008 in Suit Lodging no. 3821 of 2008

2

Citation: Notice of Motion No. 3391 of 2009 in Suit No. 2417 of 2009

3

Citation: 2012(114) BomLR7


21

The suit is pending.

no material.

In Saregama India Limited v Balaji Telefilms Limited & Ors 4 [The Dirty Picture-Ooh La La song case (2012)], the trial court allowed broadcast of the film, The Dirty Picture, upon deposit of Rs 2 crore. The appeal court reduced the deposit amount to Rs 50 lakh on the premise that the figure of Rs 2 crore was highly disproportionate and based on

The case, Vishesh Films India Pvt. Ltd. v Kapil Chopra and Ors. 5 [Jannat 2 case (2012)], resulted in a settlement with the Defendants paying Rs 20 lakh to Kapil Chopra, who claimed copyright infringement of his script titled, Zero. The Defendants agreed to give Chopra due credit in all the future releases of the film, Jannat 2.

4

Citation: Appeal- APOT 221 of 2012in GA 1087 of 2012 in T 6 of 2012 in CS 142 of 2012 (Balaji Tele Films Ltd. v Saregama India Ltd. & Ors.) and APOT 220 of 2012 in TA 54 of 2012 in CS 142 of 2012 (Saregama India Ltd. v Balaji Tele Films Ltd. & Ors.)

(Please refer to Annexure 1(iv) for details of cases) 5 Citation: Civil Appeal No: 6546 of 2012 arising out of SLP (C) No. 27576 of 2012

Recommendations on steps to be taken by a producer / director to prevent any blackmail action in relation to an underlying work:

Recommendations

(i)

Recommendations on steps to be taken by an author for protection of copyright in his works: (i)

Register the work with the Registrar of Copyright and concerned film trade association such as the Film Writers’ Association.

(ii) Whenever a work is shared with a producer / director or any person to explore incorporation of such work in a cinematograph film or sound recording, the same should be done under a valid and binding Confidentiality/Non Disclosure Agreement. If a script is shared, the person with whom it is shared should place his signature / initial on each page of the script so as to avoid any dispute in relation to the content. Also, if possible the script can be sent by email which will also serve as an evidence of its existence. (iii) The author should be diligent about his rights. If the author proposes to initiate legal action against the person with whom the author had shared his work, such action should be initiated at the earliest available opportunity and not at the last minute so as to avoid the same as appearing to be a blackmail action.

I. PERFORMER’S RIGHTS Section 2 (qq) of the Copyright Act defines performer as including an actor, singer, musician, dancer, acrobat, juggler, conjurer, snake charmer, a person delivering a lecture or any other person who makes a performance.

Performer’s rights: comprises of all rights which may accrue to a performer by virtue of his performance. Performer’s rights are therefore of three distinct types: (i) Economic rights which include rights of reproduction, adaptation, distribution, rental, lending, remuneration and communication. (ii) Moral rights which are rights of attribution and integrity over the work performed. (iii) Non-tangible rights which include right over the persona of a performer, the right against use of

Whenever an author desires to share his work, the producer / director should place on record the conversation with such author i.e the terms on which the work is sought to be shared. If the producer / director has similar idea in mind, it should be categorically placed on record that the producer / director is not restricted from making a film on the same idea.

(ii) The producer / director should place their signature / initial on every page of the script or insist that the script be sent by email so that the author cannot manipulate the content thereof at a subsequent stage. (iii) If the work shared by the author is not approved by the producer / director, it should be categorically placed on record. The producer / director should ensure that if they produce a cinematograph film on the same / similar idea as that of the author, there should be glaring dissimilarities between the author’s work and works of such producer / director so that there is no infringement of the author’s work. (iv) The producer / director should commence publicity of their film in advance so that any legal action that may be proposed can be initiated well in advance and the producer / director has adequate opportunity and time to defend / settle such claim, as the case may be.

likeness or name of the performer and other personality rights.

Neighboring Rights: Copyright consists in not merely the right to reproduction but in the right to works derived from the original works. Related rights/ Neighboring Rights is a term in copyright law, which is independent of any author’s rights. The rights of performers and broadcasting organisations are covered under neighboring rights. Performing Rights: Performer’s rights should not be confused with

performing rights, which means the right to perform music in public. It is part of copyright law and demands payment of royalties to the music’s composer/lyricist and publisher in return for the licence (permission) to perform the musical work in public. ► Pursuant to the 2012 amendment to the Copyright Act, the performer’s


22

Role and Rule of Law Media & Entertainment Industry Films : Chapter 2 : Application Copyright Act 1957

the absence of any contract to the contrary, object to the enjoyment by the producer of the film of the performer’s right in the same film: Provided that, notwithstanding anything contained in this sub-section, the performer shall be entitled for royalties in case of making of the performances for commercial use.

right has been amended to read as:

Performer’s right: 1) Where any performer appears or engages in any performance, he shall have a special right to be known as the performer’s right in relation to such performance.

Performers entitled to royalty

2) The performer’s right shall subsist until 50 years from the beginning of the calendar year next following the year in which the performance is made.

► Thus under sub-section (2) and proviso thereto to Section 38A, the performer has been vested with a right to receive royalty in case of making of the performances for commercial use.

The Copyright Amendment Act, 2012, adds a proviso to the definition of performer to exclude the so called ‘extras’ from the definition. The proviso reads as:

Therefore, while under Section 19, the author of any work is entitled to claim royalty and consideration in the circumstances mentioned in Section 19(9) & 19(10), under the second and third new provisos to Section 18 the author of a literary or musical work included in a cinema film and the author of literary or a musical work included in a sound record not forming part of a cinematograph film, is entitled to receive royalty. Under Section 38A (2) the performer is also entitled to royalty for any commercial use of his performance.

“Provided that in a cinematograph film a person whose performance is casual or incidental in nature and, in the normal course of the practice of the industry, is not acknowledged anywhere including in the credits of the film shall not be treated as a performer except for the purpose of clause (b) of S. 38B;” ► In addition, Section 38 A has been introduced which gives certain exclusive rights to performers. Section 38A. Exclusive right of performers: (1) Without prejudice to the rights conferred on authors, the performer’s right which is an exclusive right subject to the provisions of this Act to do or authorise for doing any of the following acts in respect of the performance or any substantial part thereof, namely:—

► The Copyright Societies, which are to be constituted under Chapter VII of the Copyright Act, will administer and protect the rights of such authors and performers. The societies will fix the tariffs which have to be paid by the assignees who are exploiting the work / performance in respect of which the authors/ performers are entitled to claim or receive royalties.

(a) to make a sound recording or a visual recording of the performance, including— (i) reproduction of it in any material form including the storing of it in any medium by electronic or any other means; (ii) issuance of copies of it to the public not being copies already in circulation;

Section 39: Acts not infringing performer’s right. – No performer’s right shall be deemed to be infringed by(a) the making of any sound recording or visual recording for the private use of the person making such recording, or solely for purposes of bona fide teaching or research; or

(iii) communication of it to the public; (iv) selling or giving it on commercial rental or offer for sale or for commercial rental any copy of the recording; (b) to broadcast or communicate the performance to the public except where the performance is already broadcast.

(b) the use, consistent with fair dealing, of excerpts of a performance or of a broadcast in the reporting of current events or for bona fide review, teaching or research; or (c) such order acts, with any necessary adaptations and modifications, which do not constitute infringement of copyright under section 52.

(2) Once a performer has, by written agreement, consented to the incorporation of his performance in a cinematograph film he shall not, in

INTERPRETATIONS REVOLVING AROUND AMENDMENTS TO PERFORMERS RIGHTS ISRA (Indian Singers’ Rights Association) was incorporated as a Company Limited by Guarantee under the Companies Act, 1956 on 3rd May, 2013. Thereafter, ISRA (Indian Singers’ Rights Association) filed for Registration as a Copyright Society as per Section 33 of the Copyright Act and received its Certificate of Registration from the Central Government on 14th June, 2013. ISRA happens to be the first registered copyright society after

the Copyright Amendment Act, 2012 coming into effect. Currently Indian Performing Rights Society (IPRS) and Phonographic Performance Limited (PPL) have not been granted a re-registration certificate under the Copyright Amendment Act, 2012 which makes ISRA the only registered copyright society under the Act. The Amendments pertaining to performer’s rights have been subject to varied interpretations owing to the ambiguous drafting of the statute. Few inconsistencies in the amendments pertaining to performer’s rights are as under:


23

I. Live performance:

to authors of literary and musical works and the said privilege may not be intended to extend to performers.

► Section 2 (q) of the Copyright Act defines “performance” in relation to performer’s right to mean any visual or acoustic presentation made live by one or more performers; However Rule 68 (3) of Copyright Rule, 2013 provides:

► “Performance includes recording of visual or acoustic presentation of a performer in the sound and visual records in the studio or otherwise.” The question therefore arises whether ‘performance’ under the Copyright Act is intended to be restricted only to live performance or to include all performances whether live or recorded in a studio. What constitutes “live performance” has been a debatable issue which was briefly addressed in the case of Neha Bhasin vs Anand Raj Anand [2006 (32) PTC 779 Del] wherein the Delhi High Court observed that “Every performance has to be live in the first instance whether it is before an audience or in a studio. If this performance is recorded and thereafter exploited without the permission of the performer then the performer’s right is infringed.” The proviso inserted vide Section 38 (A) (2) provides “Provided that, notwithstanding anything contained in this subsection, the performer shall be entitled for royalties in case of making of the performances for commercial use.” While the Act does not define “commercial use”, Rule 68 (2) of the Copyright Rules, 2013 provides “Commercial use as mentioned in proviso to sub-section (2) of Section 38 A, means the exploitation of the performers right by way of reproduction , issue of copies or distribution, communication to public including broadcasting and commercial rental of the cinematograph film.” One way of interpreting the aforementioned provisions could be that the right to receive royalties granted to the performers under Section 38 (A) (2) would be only limited to the live audio-visual performances given by the performers. However on a harmonious reading of Section 38 A (2) and Explanation 2 and 3 to Rule 68, another possible interpretation could be that royalties are payable to performers for all performances (whether or not such performance is made in the presence of audience and whether or not such performance is made in a studio or otherwise), each time the performance is reproduced, distributed, communicated to the public including broadcasting and commercial rental of the cinematograph film. II. Assignability/ Non-Assignability of royalty rights of performers While Section 39-A states that Section 18 with necessary adaptations and modifications, shall apply in relation to the broadcast reproduction right in any broadcast and the performer’s right in any performance as they apply in relation to copyright in a work, it is important to note that the non assignable royalty rights granted to the authors of literary and musical works under the third and fourth provisos to Section 18 is a limited privilege granted to only authors of literary and musical works and does not extend to all works under the Copyright Act including dramatic and artistic works which are essential to films. Therefore the intent of the Legislature could be to provide non-assignable royalty rights only

Also, had the intention of the Legislature been to provide non assignable royalty rights to performers, Section 38 A (2) would have specifically provided the same. Authors and performers cannot be considered at par. The royalty right of performer is not available to a performer whose performance in a film is causal or incidental in nature and is not acknowledged including in credits of the film while royalty rights of authors are available to all authors. Also the Act does not prescribe the quantum of royalty right of performer while the royalty rights of authors of literary and musical works is prescribed to shared on an equal basis with the assignee of copyright. Therefore it could be interpreted that the royalty rights of performers are assignable in nature. Had the third and fourth provisos to Section 18 applied to all copyrighted works and Section 38 (A) (2) referred to a share of royalty on equal basis, then it might have been arguable that Section 39A made the third and fourth provisos to Section 18 applicable to performers of cinematograph films, but such is not the case. However a strict interpretation of Section 39-A (which includes Section 18 in the list of sections which would apply mutadis mutandis with performers rights) would be that royalty rights of performers are non assignable. Had the intention been to allow assignment of royalty rights, the same would not have been granted in the first place. Hence it would be reasonable to state that, akin to the royalty rights of authors of musical and literary works, the royalty rights of performers are also not assignable in favour of third parties, save and except in favour of legal heirs or copyright societies. III. Payment of royalties for cinematograph films only v/s cinematograph films + sound recordings Section 38 A (2) provides that “Once a performer has, by written agreement, consented to the incorporation of his performance in a cinematograph film he shall not, in the absence of any contract to the contrary, object to the enjoyment by the producer of the film of the performer’s right in the same film: Provided that, notwithstanding anything contained in this subsection, the performer shall be entitled for royalties in case of making of the performances for commercial use.” Explanation 2 to Rule 68 provides “Commercial use as mentioned in proviso to sub-section (2) of Section 38 A, means the exploitation of the performers right by way of reproduction , issue of copies or distribution, communication to public including broadcasting and commercial rental of the cinematograph film. On perusal of Section 38 A (2) read with Exp 2 to Rule 68, it can be seen that the sub-section does not refer to sound recordings and is confined to “cinematograph film” only. Therefore it could be interpreted that where only sound recording is played without the visual, royalty may not be payable to the performers. This interpretation would result into radio broadcasters being exempted from royalty payments to performers. Another way of looking at Explanation 2 to Rule 68 would be as follows: Commercial use as mentioned in proviso to sub-section (2) of Section 38 A, means the exploitation of the performers right by way of


24

Role and Rule of Law Media & Entertainment Industry Films : Chapter 2 : Application Copyright Act 1957

► reproduction (of performance),

in the performers in relation to making commercial use of the performances in any form whatsoever i.e. in the form of sound recording and/or cinematograph film. Hence, it may be incorrect to confine the royalty rights of performers to exploitation of cinematographic films only.

► issue of copies or distribution(of performance), ► communication to public (of performance),including broadcasting and commercial rental of the cinematograph film. In which case, performance in sound recordings would be included within the scope of commercial use and would attract royalties. In any case, the intention of the legislature is to vest royalty rights

The myriad interpretations revolving around performer’s rights are merely conjecture at this stage and one would ultimately have to wait for a judicial interpretation on the varied ambiguities revolving the Copyright Amendment Act, 2012 and the Rules thereunder.

J. PIRACY, RIGHTS AND REMEDIES UNDER

Changes introduced by the Copyright Amendment Act, 2012, to combat piracy:

Entertainment and software industry are the most affected by piracy. It is important to ensure zero level tolerance of piracy in India.

(i) Protection of technological measures: Section 65A introduces a penalty of imprisonment up to two years and a fine for anyone, who circumvents an effective technological measure applied for the purpose of protecting any rights conferred by the Copyright Act.

COPYRIGHT ACT TO CONTROL PIRACY

Piracy is rampant in the country and prevalent in all forms i.e. physical piracy and digital / internet piracy. Online piracy of films and television content in India is mainly through file-sharing networks like BitTorrent and cyberlockers, or web-based file hosts such as RapidShare and Mediafire. Anyone who sells, acquires, copies or distributes copyrighted materials without permission is called a pirate. Cinema viewing has undergone a significant change from theatrical exhibition being the only dominant means of exhibition to the introduction of various other modes, media and platforms with rapid advances in digital media technology. However, such developments have only made piracy easier not only for pirates but also for the consumers, who now have easy access to pirated material through file sharing networks and portals. According to a recent report and studies commissioned by the Motion Picture Distributors’ Association (MPDA), the local office of the Hollywood Motion Picture Association (MPA), India accounts for maximum film piracy in any English-speaking country if one goes by the number of broadband subscribers. Many Indian production and distribution houses have come together to implement measures to combat piracy. One such alliance is the Alliance Against Copyright Theft (AACT) formed by production and distribution houses such as Reliance Big Entertainment, MoserBaer Entertainment, UTV Motion Pictures, Eros International and Movie Producers and Distributors’ Association.

Provisions under the copyright act 1957, dealing with piracy: Section 51 of the Copyright Act, 1957, lists the acts which constitute infringement of copyright and amount to piracy. Copyright is deemed to be infringed when any person, without license being granted by the owner of copyright, does anything, the exclusive right to do which is by the Act upon the owner of copyright. For instance, if a person has copyright in a literary or musical work and another person issues a copy of such work in the public or reproduces such work in any material form, without consent of the owner of the work, he shall be infringing copyright of the owner of such work.

(ii) Protection of Rights Management Information1: Section 65B provides that any person, who knowingly,— (i) removes or alters any rights management information without authority, or (ii) distributes, imports for distribution, broadcasts or communicates to the public, without authority, copies of any work, or performance knowing that electronic rights management information has been removed or altered without authority, shall be punishable with imprisonment which may extend to two years and shall also be liable to fine: Provided that if the rights management information has been tampered with in any work, the owner of copyright in such work may also avail of civil remedies provided in the Act against the persons indulging in such acts.

Rights and remedies under the Copyright Act to control piracy The Indian Copyright Act, 1957, prescribes civil and criminal remedies in cases of copyright infringement. These include the following: (i) Civil Remedy: The owner of the copyrighted work shall be entitled to all such civil remedies available by way of injunction, damages, and accounts of profits and otherwise as are or may be conferred by law for the infringement of a right, including but not limited to the recovery of possession of the infringed work, confiscate the items, recover any profits that have been earned. In case of any civil suits regarding copyright infringement, the concerned district court has the exclusive jurisdiction.

1 Rights Management Information has been defined under Section 2 (xa) as (a) the title or other information identifying the work or performance; (b) the name of the author or performer; (c) the name and address of the owner of rights; (d) terms and conditions regarding the use of the rights; and (e) any number or code that represents the information referred to in sub-clauses (a) to (d),but does not include any device or procedure intended to identify the user;


25

(ii) Criminal remedy: The punishment for infringement of copyright, as laid down under Section 63 of the Copyright Act, is imprisonment for six months but which may extend to three years and with fine which shall not be less than Rs 50,000 but which may extend to Rs 2Lakh. The punishment, in case of a second and subsequent conviction shall not be less than one year but which may extend to three years and with fine which shall not be less than Rs 1 lakh but which may extend to Rs 2 lakh.

(iv) Punishment for other acts of piracy: The Copyright Act also prescribes punishment for the following: (i) possession of plates for the purpose of making infringing copies; (ii) disposal of infringing copies or plates for the purpose of making infringing copies; (iii) making false entries in register etc., for producing or tendering false entries;

(iii) Power of search and seizure: As per Section 64 of the Copyright Act, any police officer, not below the rank of a subinspector may, on being satisfied of an offence being committed or likely to be committed in this regard, may seize without warrant, all copies of the work and all plates used for the purpose of making infringing copies of the work, wherever found and all copies and plates so seized shall, as soon as practicable be produced before a Magistrate.

John Doe Orders (Ashok Kumar orders): Given how rampant piracy is and the difficulty in tracing offenders, it has become necessary for the film makers to approach courts to protect their films by obtaining an order against unknown violators in the form of a John Doe order to prevent violators from communicating their film without obtaining a license /authorisation from the film maker. John Doe orders enable the order to be served upon persons whose identity is unknown to the plaintiff at the time the action was commenced, but whose activity falls within the scope of the action. Since it is not possible to determine the infringers at the time of filing the suit, it is filed against unknown defendants and hence the name “John Doe”. This concept of John Doe orders is well entrenched in the common law jurisdictions of Canada, America, Australia and UK. Pre-requisites for obtaining a John Doe order: 1. The person filing the John Doe order has to prove ownership of his copyright. Hence the documents proving ownership of copyright in the film need to be annexed to the suit. 2. In case of a cinematograph film, details of the star cast of the film, music launch, release date, commencement and end date of shooting, etc need to be provided. 3. Certification of Central Board of Film Certification (CBFC) needs to be annexed to show that the film is approved for being released. 4. John Doe orders have been granted by Indian courts under Order 39 Rule 1 and 2 of the Civil Procedure Code, 1908, which refers to courts’ power to grant a temporary injunction. Thus the requirement of granting John Doe orders is that of granting temporary injunction on being satisfied of there being a prima facie case, balance of convenience and irreparable loss. In this regard, the plaint should disclose some instances of infringement and consequent loss suffered in the past. 5. The burden on the plaintiff is to merely disclose the existence of a right and anticipated breach thereof. The Plaintiff also has to show that it anticipates large scale and sporadic infringement and is unable to ascertain the full particulars of the defendants at the time of seeking relief.

(iv) for making false statements for the purpose of deceiving or influencing any authority or officer. (v) For contravention of Section 52A of the Act which provides for particulars to be included in a sound recording and in video films.

Process after obtaining a John Doe Order: ► Once a John Doe order is obtained, the Plaintiff usually gives a public notice in a newspaper (preferably national and local) informing the general public at large about the John Doe order and further cautioning that any person violating the order would be liable for infringement of the copyright of the Plaintiff in the film as well in breach of the order for which the Plaintiff would be entitled to initiate action in accordance with law. ► Violation of John Doe order would follow consequences for breach or disobedience of an injunction order passed by the court. John Doe orders in India For the first time, after placing reliance on Canadian Courts, the Delhi High Court in the case of Taj Television v Rajan Mandal1 granted India’s first John Doe order to prevent illegal broadcast of the FIFA World Cup 2002. After this, a series of John Doe orders were passed. John Doe orders for India films: (i) In the last few years, the remedy provided by courts in the form of John Doe orders have been invoked several times by the film production houses to prevent their movies from being downloaded from the net or being telecast by cable operators without a license. In UTV Software Communications Limited v Home Cable Network Ltd. and Ors.2 an order was obtained against the cable operators who illegally telecast pirated version of the films. The Plaintiff by the present suit sought to protect its copyright in films 7 Khoon Maaf and Thank You. The suit was necessitated as the production house had faced a lot of piracy in its prior productions. (ii) Reliance Big Pictures obtained a similar order from the Delhi High Court to prevent the illegal broadcast or streaming of its upcoming films Bodyguard and Singham. (iii) This case was followed in the Speedy Singhs case in which the defendants (including unknown defendants) were restrained from 1

Citation: 2003 FSR (22) 407

2

Citation: CS(OS) No. 821/2011)


26

Role and Rule of Law Media & Entertainment Industry Films : Chapter 2 : Application Copyright Act 1957

communicating without license or displaying, releasing, showing uploading, downloading, exhibiting, playing defraying the movie Speedy Singhs through different mediums like CD, DVD, Blu-ray, VCD, Cable TV, DTH, Internet Services, MMS, Tapes, Conditional Access System or in any other like manner. The suit was filed by Viacom 18 Media Pvt. Ltd. (iv) Similar orders were obtained by Viacom 18 Media Pvt. Ltd. for films like Speedy Singhs, Bitto Boss, Department, Blood Money, Loot, Players, Kahaani, Gangs of Wasseypur I, Gangs of Wasseypur 2, Special 26, Inkaar and Reliance Big Entertainment Limited got similar order for the their film Don 2 and Creative Commercials obtained a John Doe order against BSNL and Others for their film Dhammu in the Madras High Court among others. (v) The Bombay High Court passed another unconditional John Doe order on July 18, 2012, for the film The Dark Knight Rises. Warner Bros. Pictures (India) Private Limited., the copyright holder of the film had moved the Bombay High Court against cable operators, internet service providers and other unknown defendants seeking preemptory orders restraining any person from pirating the film on any platform including television and internet. Warner Bros Pictures (India) Private Limited also obtained a John Doe order for their film ‘The Hobbit: An Unexpected Journey’. (vi) Yash Raj Films Private Limited obtained a John Doe order with respect to its film “Dhoom 3”.

the legitimate users of these sites were unable to access the sites. Following the John Doe order passed for the film, 3, by the Madras High Court, several ISPs including Airtel blocked entire websites. This resulted in consumer complaint being filed in Karnataka against Airtel. The District Consumer Disputes Redressal Forum at Shimoga has directed Airtel to pay Rs 20,000 for deficiency in internet service thereby causing mental agony to the complainant. “By misinterpreting the Madras High Court order, Airtel blocked entire websites. It is needless to say that the company’s actions amount to deficiency in service as well as unfair trade practice,” said the forum. In the case of Creative Commercials v BSNL & Ors1 , the Madras High Court granted a John Doe order with respect to the film, Dhammu, on April 25, 2012. Thereafter an appeal was filed by a consortium of Internet Service Producers (ISPs) seeking specificity in complaints of infringing content. In the appeal, the consortium of ISPs pointed out that the John Doe order had, inter alia, led to legitimate content being disabled. ISPs further pointed out that they are willing to block access to infringing content when informed by the studios. On June 15, 2012, the court has passed a clarificatory order. The operative part of the order reads as under: “The order of interim injunction dated 25/04/2012 is hereby clarified that the interim injunction is granted only in respect of a particular URL where the infringing movie is kept and not in respect of the entire website. Further, the applicant is directed to inform about the particulars of URL where the interim movie is kept within 48 hours.”

Complexities in John Doe orders John Doe orders may sometimes be vague and harm the rights of the legitimate third parties. In the Singham case, after obtaining the order Reliance Entertainment sent a list of file sharing sites to ISPs, asking them to stop them from pirating the movie. The ISPs, unable to prevent piracy, just blocked entire file sharing websites, thus preventing legitimate usage of these sites from India. As a consequence of this action, majority of

Other legal provisions to deal with piracy (i) The Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007: These are IPR Border Rules which came into force in 2007 and empower the Central Government to prohibit the import of goods which infringe IPR. The Notification of 2007 prohibits import of goods infringing patents, copyrights and geographical indications in addition to the goods infringing trademarks and designs of the right holders which were already in force vide an earlier Notification. (ii) The MPDA, Goonda Acts and other efforts: Various states including Maharashtra, Tamil Nadu, Andhra Pradesh and Karnataka have notified ordinances and Acts in order to curb audio-video piracy which seek to prescribe preventive detention of IPR offenders.

Suggestions to combat piracy (i) Development of technology to combat piracy including development of software which would prevent unauthorised copying / reproduction of copyrighted material and thereby prevent physical piracy.

John Doe orders are in their nascent stage and are yet to establish an organised system of preventing piracy without harming any third parties involved.

1

OA No. 358 of 2012 in C.S. No. 294 of 2012

(ii) Effective means of monitoring websites for digital / online piracy. Effective due diligence to be exercised by ISPs in this regard. Provision for blocking of websites which display infringing / unauthorized material. (iii) Introduction and implementation of stringent anti-piracy laws which would act as a deterrent for the pirates and consumers who avail of pirated material. (iv) Illegal recordings of movies in the theater are the single largest source of fake DVDs sold on the street and unauthorized copies of movies distributed on the Internet. Hence there should be strict checking outside cinema halls to ensure that no recording devices are carried in the cinema hall. Exhibitors and cinema operators to employ security methods and effective monitoring to ensure that there is no unauthorised recording in the cinema halls.

K.

ACTS NOT AMOUNTING TO INFRINGEMENTFAIR DEALING: To encourage private study, research and promotion of education, the Copyright Act lists certain exceptions to what might not cause infringe-


27

(i) any artistic work permanently situate in a public place or any premises to which the public has access; or

ment. These form the defences in cases of infringement of copyright. The basic purpose of Section 52 is to recognize the freedom of expression under Article 19 (1) of the Constitution of India. Section 52 gives a list of acts that do not constitute infringement and has been amended by the Copyright Amendment Act, 2012. Some such acts listed in Section 52 are: ► “A fair dealing with any work, not being a computer programme, for the purposes of-— (i) private or personal use, including research; (ii) criticism or review (iii) the reporting of current events and current affairs, including the reporting of a lecture delivered in public.

Explanation.—The storing of any work in any electronic

medium for the purposes mentioned in this clause, including the incidental storage of any computer programme which is not itself an infringing copy for the said purposes, shall not constitute infringement of copyright.

► Reproduction of any work for the purpose of judicial proceedings/legislative texts or for the purpose of a report of a judicial proceeding. ► The reading or recitation in public of reasonable extracts from a published literacy or dramatic work; ► The reproduction of any work by a teacher or a pupil in the course of instruction; or as part of the questions to be answered in an examination; or in answers to such questions; ► The performance of a literary, dramatic or musical work by an amateur club or society, if the performance is given to a non-paying audience, or for the benefit of a religious institution; ► The reproduction in a newspaper, magazine or other periodical of an article on current economic, political, social or religious topics, unless the author of such article has expressly reserved to himself the right of such reproduction; ► The inclusion in a cinematograph film of-

(ii) any other artistic work, if such inclusion is only by way of background or is otherwise incidental to the principal matters represented in the film;

Changes introduced by the 2012 Amendment Fair dealing Section 52(1)(a) now allows for fair dealing with respect to any work (except a computer programme), and is not restricted to literary, dramatic, musical or artistic works other than computer programmes as was the case earlier. Defences to copyright infringement available to intermediaries The amendment protects intermediaries in cases of secondary copyright infringement, and a notice-and-take-down procedure has been incorporated into the statute to enable rights owners to have infringing content taken down for a minimum period of 21 days. Broadened exceptions to copyright infringement The exceptions to copyright infringement dealing with the reproduction of works for judicial, legislative and educational use now generally apply to any work, instead of only to literary, dramatic, musical and artistic works as was the case earlier. The new Section 52(1)(h) allows the publication of compilations for instructional use instead of just for educational institutions as was the case earlier. Archival storage and reproduction by libraries The new Section 52(1)(n) allows: ‘the storing of a work in any medium by electronic means by a non-commercial public library, for preservation if the library already possesses a non-digital copy of the work’, and the scope of Section 52(1)(o) has been restricted to allow only non-commercial public libraries to make not more than three copies of books unavailable for sale in India for their own use, as opposed to any public library as was the case earlier.

Important Case Laws: In Super Cassettes Industries Ltd. v Hamar Television Network Pvt. Ltd. and Anr.1 (2010), the Delhi High Court held that the defence of “fair use” failed in the instant case as out of a large number of allegedly infringing material produced before the court most of them were neither used for the purposes of criticism or review nor shown to be necessary for the purpose of reportage of current events.

In India TV Independent News Service Pvt. Ltd. & Ors. v Yashraj Films Pvt. Ltd. 2 (2012), the Delhi High Court observed that small amount of usage of songs in a television programme did not amount to any infringement as it amounted to ‘fair use’, as the same is de minimis, that is, very little usage compared to the whole programme. (Please refer to Annexure 1(v) for case details) 2

1

Citation: FAO (OS) 583 of 2011

Citation: FAO (OS) 583 of 2011


28

Role and Rule of Law Media & Entertainment Industry Films : Chapter 2 : Application Copyright Act 1957

L. COMPULSORY LICENSE Section 31 of the Copyright Act deals with compulsory licences of works withheld from public. This section provides that if the owner of copyright in any Indian work has refused the performance in public of the work and withheld the work from the public or has refused communication to the public by broadcast of the work recorded in sound recording, the Copyright Board may, on the basis of a complaint received and after such inquiry as it may deem necessary, direct the Registrar of Copyrights to grant to the complainant, a licence. ► By the Amendment of 2012, applicability of this section is amplified from Indian work to any work. The word, complainant, is also replaced with the words, such person or persons who, in the opinion of the Copyright Board, is or are qualified to do so. Sub-section (2) is omitted so as to enable the Copyright Board to grant compulsory licence to more than one person. ► Section 31 A relates to compulsory licences in unpublished Indian works. The section has been amended to allow compulsory licences to any unpublished work or any work published or communicated to the public where the work is withheld from the public in India and in cases where the author is dead or unknown or the owner cannot be traced. ► Special provisions have been provided for compulsory licensing of the works for the disabled by inserting Section 31B.

M. STATUTORY LICENSE FOR COVER VERSIONS A new Section 31 C in the Copyright Act provides for statutory licence to any person desiring to make a cover version being a sound recording in respect of any literary, dramatic or musical work, where sound recordings of that work have been made by or with the licence or consent of the owner of the right in the work. Provided that such sound recordings shall be in the same medium as the last recording, unless the medium of the last recording is no longer in current commercial use. The person making the sound recording shall give to the owner prior notice of his intention in the prescribed manner, provide the copies of all covers or labels with which the version is supposed to be sold, and pay in advance the royalty at the rate fixed by the Copyright Board. Such sound recordings can be made only after the expiration of five years after the publication of the original sound recording. There is a requirement of payment of a minimum royalty for 50,000 copies of the work during each calendar year. A specific proviso has been added to state that such sound recordings shall not be sold or issued in any form of packaging or with any cover or label which is likely to mislead or confuse the public as to their identity, and in particular shall not contain the name or depict in any way any performer of an earlier sound recording of the same work or any cinematograph film in which such sound recording was incorporated and, further, shall state on the cover that it is a cover version made under this section.

literary and musical works and sound recording. Section 31-D applies for broadcast of literary works, musical works and sound recording but does not apply to cinematograph films. It provides: (1) Any broadcasting organisation desirous of communicating to the public by way of a broadcast or by way of performance of a literary or musical work and sound recording which has already been published may do so subject to the provisions of this section. (2) The broadcasting organisation shall give prior notice, in such manner as may be prescribed, of its intention to broadcast the work stating the duration and territorial coverage of the broadcast, and shall pay to the owner of rights in each work royalties in the manner and at the rate fixed by the Copyright Board. (3) The rates of royalty for radio broadcasting shall be different from television broadcasting and the Copyright Board shall fix separate rates for radio broadcasting and television broadcasting.

N. COPYRIGHT SOCIETIES AND THEIR ROLE Ordinarily, the authors of creative works are not business minded and seldom have the financial resources or the business skill to exploit their own work. The best way for an author of a work to monetise his work is to licence a publisher to publish the work on a royalty basis. It is extremely difficult for the owner of a work to monitor the usage of his work and prevent infringement of the work anywhere in India or abroad. To overcome this difficulty owners of copyright works have formed copyright societies to licence their works for performance or communication to the public or issue copies to the public. Thus copyright societies were formed to licence the works of owners of copyright to those interested in the reproduction, performance or communication to the public of the works and to take appropriate legal action against the infringers. A copyright society is a registered collective administration society under Section 33 of the Copyright Act, 1957. Such a society is formed by copyright owners. A society has to have a minimum of seven members for registration. Ordinarily, only one society is registered to do business in respect of the same class of work. A copyright society can issue or grant licences in respect of any work in which copyright subsists or in respect of any other right given by the Copyright Act. However, the owner of copyright shall, in his individual capacity, continue to have the right to grant licences in respect of his own works consistent with his obligations as a member of the registered copyright society:

Copyright Amendment Act, 2012: The Copyright Amendment Act, 2012, has made it mandatory for a copyright society to be registered under this Act.

Statutory licensing for broadcasters:

On May 17, 2012, Human Resource Development (HRD) minister, Kapil Sibal, in his speech in Parliament, said that the sections in respect of copyright societies had been amended to ensure equal representation of both authors and composers and owners of rights in copyright societies so that the members of copyright societies were not limited only to producers. As per the 2012 amendment, authors along with owners are entitled to receive royalty and the author’s right to royalty is nonassignable.

A new section 31 D provides for statutory license for broadcasting of

Thus to ensure equal representation of the creators of copyright as well

Further the person making such sound recordings shall not make any alteration in the literary or musical work which has not been made previously by or with the consent of the owner of rights, or which is not technically necessary for the purpose of making the sound recordings.


29

as those who exploit the copyright amendments in Section 33 to that effect were made to the following effect: ► The business of issuing or granting licence in respect of literary, dramatic, musical and artistic works incorporated in a cinematograph film or a sound recording shall be carried out only through a copyright society duly registered under this Act. ► The registration granted to a copyright society shall be for a period of five years and may be renewed from time to time before the end of every five years. ► Renewal of the registration of a copyright society shall be subject to the

continued collective control of the copyright society being shared with the authors of works in their capacity as owners of copyright or of the right to receive royalty.

Functions of a copyright society: (i) A copyright society may issue licences and collect royalties in accordance with its tariff scheme in relation to the right or the set of rights in the specific categories of works for which the copyright society is registered. (ii) The royalty collected shall be distributed as per the distribution scheme

Important Case Laws: ● Leopold Café & Stores and Anr v/s Novex Communications Pvt. Ltd Court: High Court of Bombay Citation Notice of Motion (L) No. 1451 of 2014 in Suit (L) No. 603 Coram: G.S. Patel, J Date: July 17, 2014 Facts: M/s Leopold Cafe, one of the most popular restaurants in Mumbai, obtained an interim order against Novex Communications which claims to be an authorized agent of copyright owners such as Yash Raj Films and Shemaroo. The issue before the Bombay High Court pertained to whether companies such as Novex could perform the function of collecting societies in light of certain restrictions contained in Section 33 of the Copyright Act. In pertinent part, Section 33 states that: “No person or association of persons shall, after coming into force of the Copyright (Amendment) Act, 1994 commence or, carry on the business of issuing or granting licences in respect of any work in which copyright subsists or in respect of any other rights conferred by this Act except under or in accordance with the registration granted under sub-section (3).” Section 33(3) provides for the registration of collecting societies. The new proviso inserted by the Copyright Amendment Act, 2012 provides that “Provided further that the business of issuing or granting license in respect of literary, dramatic, musical and artistic works incorporated in a cinematograph films or sound recordings shall be carried out only through a copyright society duly registered under this Act;” Novex argued that it could license music as an agent of music labels, since Section 30 of the Copyright Act allows the copyright owner or its agent to grant an interest in any work by way of a licence.

Ratio: Justice G S Patel clarified that Copyright Owners would be allowed to license their works themselves or through their authorized agents under Section 30 of the Copyright Act. The Court held that Novex was not allowed to be in the business of issuing or granting licenses as per Section 33 of the Copyright Act. However, they could

continue issuing licenses as an authorized agent of Copyright Owners under Section 30 of said Act. While reasoning out on the co-existence of Section 30 and Section 33 of the Copyright Act, Justice Patel held: “There is also the seemingly nice distinction between “issuing” and “granting” a license. Both words must be read together with their conjunctive. “Issuing” speaks possibly to the physical act of generating a license. “Granting” is the legal effect of that issuance. What Section 33 forbids is an engagement in the “business of issuing and granting” licenses in works in which copyright subsists. This cannot mean that a copyright owner cannot appoint an agent to grant any interest on behalf of the copyright owner. That is something that Section 30 in terms permits. The express permission in Section 30 cannot be occluded by an extension of the express prohibition in Section 33. All that the two sections, read together, require is that the factum of agency must be disclosed so that the licensee knows that it has a valid license from the copyright owner; i.e., that it is made known by the agent that it is acting on behalf of the holder of copyright in the works in question, even though the licensee may throughout deal only with the agent and never directly with its principal. The minute the principal is undisclosed and the license is issued and granted in the agent’s own name, the prohibition in Section 33 comes into play.” In this matter, the Court found that Novex did not clearly disclose its agency and no evidence was produced to that effect. Specifically, the court observed that Novex was issuing licences in its own name rather than in the name of the copyright owner, and as such the invoicing took place in its own name. In the court’s opinion, this proved that Novex was not acting as an agent. The court stated that to qualify as an agent, it was necessary for the agent to declare this in its dealings with clients and disclose that it is acting on behalf of the copyright owner. To not do so when licensing music would attract the prohibitions under Section 33.

Impact: The Bombay High Court’s judgment clarifies the co-existence of Section 30 and Section 33. The Judgment would impact the licensing models of several music labels which are currently not members of any copyright society. An agent cannot initiate legal proceedings for copyright infringement as Section 54 of the Copyright Act includes within the scope of “owner of copyright” only an exclusive licensee and Section 55 of the Copyright Act allows only owners of copyright to initiate legal proceedings. Therefore, as an agent, such companies cannot initiate legal proceedings.


30

Role and Rule of Law Media & Entertainment Industry Films : Chapter 2 : Application Copyright Act 1957

IPRS and PPL- Absence of Re-Registration Certificates and consequences thereof Prior to the enactment of the Copyright Amendment Act, 2012 the following were the registered copyright societies in India (i) For cinematograph and television films : Society for Copyright Regulation of Indian Producers for Film and Television (SCRIPT) (ii) For musical works: Indian Performing Right Society Limited (IPRS) (iii) For sound recording: Phonographic Performance Limited (PPL) (iv) For reprographic(photo copying) works: Indian Reprographic Rights Organization (IRRO) The newly inserted Section 33 (3A) of the Copyright Amendment Act, 2012 requires that every copyright society already registered before the coming into force of the Copyright (Amendment) Act, 2012 shall get itself registered within a period of one year from the date of commencement of the Copyright (Amendment) Act, 2012. Interestingly, PPL and IPRS have both applied for re-registration of their certificate under Section 33 of the Copyright Act, however the Copyright Office has not yet granted them the re-registration certificate. In the absence of the re-registration certificate mandated by Section 33, the sanctity and existence of IPRS and PPL is itself questionable as Section 33 clearly provides that the business of issuing and granting licenses in any work can be carried out only by a registered copyright society. In this regard it is pertinent to note that the Ministry of Human Resource Development on February 27, 2014 has issued an order for appointment of inquiry officer to inquire into alleged irregularities in administration of the Indian Performing Rights Society as per Section 33 (5) of the Copyright Act, 1957 and Rule 50 of the Copyright Rules, 2013 for the purpose of making an enquiry into alleged irregularities in the IPRS as the alleged irregularities are prima facie violations against Section 33, 34 and 35 of the Act and the Rules framed thereunder. The order further alleges IPRS of non-distribution of royalties to authors and composers by imposing illegal conditions in violation of the Act and the Rules framed thereunder, illegal sub-licensing of collection of royalties by IPRS by causing loss of revenue; illegal transfer of mechanical rights and ringtones royalties by IPRS to PPL, forgery of signatures or misrepresentation by IPRS administration to the Ministry and reasons for non-compliance of the Copyright Rules, 2013 by IPRS for its re-registration. The order refers to the various complaints from authors and composer members of IPRS to inquire into irregularities in administration of IPRS. Vide the said order, the MHRD has appointed Justice Shri. Mukul Mudgal (Retd Chief Justice of Punjab and Haryana High Court) as the inquiry officer. Mr. Hasan Kamal, Chairman of IPRS has challenged the said order of MHRD in the High Court of Bombay vide writ petition no. 1529 of 2014. The petition is pending before the Bombay High Court.

● Hotel Prakash v/s Indian Performing Rights Society Court: District Court of Ludhiana Citation: CS (OS) No 27182 of 2013 Coram: ADJ. Mr. Darbari Lal

Date: September 3, 2013 Facts: The Plaintiff filed the present suit for declaration and for permanent injunction against groundless threats for legal proceedings being issued by the Defendants i.e. IPRS. The Plaintiff is a hotel and restaurant enterprises operating, managing and administration of restaurants in Ludhiana. The case of the Plaintiff was that the Defendant have been sending threatening letters to the Plaintiff to oblige to their unreasonable demands and have also threatened the Plaintiff of dire consequences of an alleged infringement of copyright if the Plaintiff fail to obtain the mandatory public performance license to play the literary, dramatic and musical works at the Plaintiff’s premises. The Plaintiff contended that the Copyright Act, 1957 has been amended bide the Amendment Act w.e.f. June 21, 2012 along with new copyright rules 2013 w.e.f. March 14, 2013 and that though the Defendant i.e. IPRS has applied for reregistration till date no re-registration has been granted to IPRS. Ratio: The Judge was of the view that the Plaintiff had made out a prima facie case in its favour for grant of ad-interim injunction. Accordingly an ex-parte ad interim injunction was granted in favour of the Plaintiff restraining IPRS from taking any steps enforcing and making any further demand for public performance, license fees to play the literary, dramatic and musical works under Section 33 of the Copyright Act, 1957 as the Defendant is not a registered copyright society under Section 33 of the Copyright Act, 1957. The matter is pending before the District Court of Ludhiana.

● Asha Audio Company and Anr v/s Om Prakash Sonik & OrsCourt: High Court of Calcutta Citation: GA 1741 of 2013 in CS 202 of 2013 and GA 1830 of 2013 in CS 2012 of 2013.

Coram: Hon’ble Justice Patherya Date: July 1, 2013 Facts: Asha Studio (member of IPRS) filed a petition against Om Prakash Sonik (one of the directors of IPRS), IPRS, the Registrar of Copyrights, Sameer Pandey, Anand Srivastava and few other parties. The petition was filed for a decree for rendition of true and faithful accounts of undisputed royalty so also appointment of administrator to distribute the royalty and convene a general meeting to elect the governing council of the IPRS. The background to this specific prayer is a notice served by the Registrar of Copyrights on IPRS asking for information on whether it has cleared all of its previous dues owed to its members, especially the lyricists and composers who have repeatedly complained to the Registrar of Copyright that IPRS had stopped payments to them. The Copyright Amendment Act, 2012 gives the Registrar the power to insist on disclosure of such information before registering IPRS as a copyright society under the new law. Asha Audio claimed that disclosure of such information would somehow result in prejudice to it, thereby warranting an order restraining the Registrar from requesting such information. Asha Audio’s contention was that Section 19 (9) of the 1957 Act as amended by the Amendment Act 2012 specifically states that no assignment shall affect the right of the author to claim an equal share of royalties not only in a cinematographic film and also in a work which is not comprised in a cinematographic film. Asha Audio therefore contended that they are entitled to receive royalties from IPRS which is a copyright society. They contended that by virtue of Section 33 (3A) of the Copyright Amendment Act, 2012 an application is to be made for reregistration within the time specified not only under the second proviso of Section 33 (3A) of the Amendment Act 2012 but also Rule 47 (1) of the 2013 Rules, within the time mentioned in the said Act. An applica-


31

tion has been filed by IPRS for re-registration. In the process of re-registration a show cause notice was issued to IPRS whereby the Deputy Registrar of Copyrights on behalf of the Respondent no. 5 (to the suit) called upon IPRS to intimate what steps have been taken to release the royalties due to some of the complainants who had filed complaints with regard to non-payment of royalties to authors and music composers. It was submitted by Asha Audio that this was done under Rule 47 (3) of 2013 Rules. They contended that on reading of Rule 47 it will be evident that it deals with applications for re-registration or renewal. According to Asha Audio since IPRS was already registered and needed to be registered under the second proviso of Section 33 (3A) all that was required to be done was to re-register IPRS without raising any query as raised in the letter dated 24th May 2013. They submitted that it is only in cases of renewal, that Rule 47(3) comes into play and this being not a case of renewal the said query could not have been raised on behalf of the respondent no. 5. Asha Audio therefore submitted that by virtue of said queries raised they apprehend that steps will be taken to disburse the royalties and, therefore, deprive them of its legitimate royalty.

Ratio: The Calcutta High Court, while denying Asha Audio its prayer for interim relief, made this following observation,

giving a reply to the letter dated 24th May, 2013 the respondent no.4 was restrained from challenging the same and, therefore, has set up the petitioner to challenge the said order. In seeking the orders as sought, the respondent no.4 is in effect seeking to preempt any order of rejection that may be passed against it. To intercept an order of rejection at this stage would be to prevent an authority from exercising its powers under the Act and acting in accordance with law. Admittedly, the Rules have not been challenged and as the provisions of the Act must prevail over the Rules this application at this stage warrants no order. It will not be out of place to mention that from the submissions made by the petitioner and the respondent nos. 1 to 4 that each one of them wants the same order and, therefore, again prima facie, collusion cannot be ruled out. The petitioner seeks an automatic registration but an authority is not to act as a rubber stamp but to apply its mind while registering a Society because if the authority does not do so it will have to bear the brunt of the Courts of law for non application of mind.” In the absence of re-registration certificates being granted to the two major copyright societies i.e. IPRS and PPL, it would be interesting to witness the implementation of the Copyright Amendment Act, 2012.

“All that the petitioner would be interested in is receiving royalties and in the entire petition there is no whisper with regard to the royalties which is due or payable by the respondent no.4 to the petitioner. The order sought is based on an apprehension that in view of the query raised by the Central Government, royalties will be disbursed by the respondent no.4. The respondent no. 4 has submitted that the disbursement made by it is in accordance with law, and royalties in respect of which there are disputes and unclaimed royalties have not been paid by it. Therefore, it appears that the apprehension of the petitioner is unfounded at this stage as no overtly action is being undertaken by the respondent no.4 to disburse the royalties. It is very surprising that the respondent no.4 is agreeable to any orders that may be passed by this Court. It is also agreeable to a restrain order being passed against it in respect of disbursement of royalties. This would definitely not be in the interest of its members and the feeling that one gets is that by

The roots of the Amendment can be traced to the disgruntled authors who were denied payment of ringtone royalties which formed a major revenue stream for music labels. IPRS which started as a performing society for authors was eventually controlled by music labels. The ringtone royalties were transferred to be collected by PPL on behalf of IPRS which apparently did not share the royalties with IPRS and to which IPRS did not raise any issue of non-payment, a possible reason being that both the societies shared the same directors. The Amendment introduces equal membership of authors and owners of works and has posed the copyright societies with important responsibilities of ensuring royalty distribution and issuing and granting licenses in underlying works incorporated in cinematograph films and sound recordings. The success or failure of the Copyright (Amendment) Act, 2012 will ultimately be contingent on the role played by the copyright societies in ensuring transparency in its dealings and giving effect to the Amendment.

O. COPYRIGHT RULES, 2013

► Statutory licence for broadcasting of literary and musical works and sound recording

The Copyright Division, Department of Higher Education, Ministry of Human Resource Development has notified the Copyright Rules, 2013 on March 14, 2013. The introduction of new provisions under the Copyright (Amendment) Act, 2012, which came into force on June 21, 2012 led to amendments in the Copyright Rules, 1958 as well.

► License for translations

The Copyright Rules, 2013, provide rules and procedures for the following:

► Performers Society

► The Copyright Board- Terms and Conditions of the Office of the Chairman and members of the Board ► Relinquishment of Copyright ► Compulsory Licenses in works withheld from the public ► Compulsory license to publish or communicate to the public the work or translation thereof ► Compulsory license for the benefit of the disabled ► Statutory license for cover versions

► License for publication, translation and re-production of work ► Copyright Societies

► Registration of Copyright ► Storage of transient or incidental copies of works ► Making or adapting the work by organizations working for the benefit of persons with disabilities ► Importation of Infringing Copies ► Technological protection measures The fee for registration of copyright for various works and fee for licences to be issued by Registrar of Copyright under the directions/orders of the Copyright Board have been increased under the Copyright


32

Role and Rule of Law Media & Entertainment Industry Films : Chapter 2 : Application Copyright Act 1957

Rules, 2013. The minimum fee has been increased for registration from Rs. 50/- per work to Rs. 500/- per work and the maximum fee has been increased from Rs. 600/- per work to Rs. 5,000/. The fee for licences has been increased from Rs. 200/- to Rs. 2000/- per work and the maximum fee has been increased from Rs. 400/- to Rs. 40,000/-. The new fee structure provided under Second Schedule of the Rules is applicable from the date of coming into force of the Copyright Rules, 2013 that is March 14, 2013. The Copyright Office has recently issued a notification (No. F. 2725/2014-CO), stating that the online facility for filing of copyright applications has been launched from February 17, 2014. According to the notification, dated July 22, 2014, the Copyright Counter would close from August 1, 2014 in an attempt to promote online filing of copyright applications.

HIGHLIGHTS OF THE COPYRIGHT RULES, 2013: Compulsory license for the benefit of the disabled Chapter VI of the Rules (Rule 17 to 22) deal with compulsory license for benefit of disabled in furtherance of the newly inserted Section 31B of the Copyright Amendment Act, 2012.The relevant form for submitting an application is Form V, which must be sent to either the owner of copyright or the publisher, if the former is untraceable. Notice and hearing to other interested parties must also be given. If the Board is satisfied that the license or publication of the work in the format applied for may be granted to the applicant/s, as, in the opinion of the Board would best serve the interest of the disabled persons, it shall direct the Registrar of Copyright to grant license accordingly. Statutory license for cover versions Chapter VII of the Rules (Rule 23 to 28) deals with statutory licensing provisions for cover versions in furtherance of newly inserted Sec 31 C of the Copyright Amendment Act, 2012. These rules provide for a notice to be given by any person intending to make the cover version, being a sound recording in respect of any literary, dramatic or musical work of such intention to the owner of the copyright in such works and to the Registrar of Copyright at least 15 days in advance of making the cover version and payment of royalties to the owner for a minimum of fifty thousand copies. The Rules further provide for the conditions to be followed while making the cover versions which include maintaining the integrity of the original literary, dramatic or musical works, except to the extent as may be necessary for the purpose of making the cover version, restriction on the cover version being issued in any form of packaging or with any cover or label including any label or carton or inlay card or website having design or colour scheme or layout or getup similar to that of the original sound recording which is likely to mislead or confuse the public as to the identity of the original sound recording, restriction on using label of the original sound recording and to state in bold letters on the cover mat that it is a cover version made under Section 31-C. The cover version shall prominently display the names of performers and shall not contain the name or depict in any way any performer of an earlier sound recording of the same work or any cinematograph film in which such sound recording is incorporated. The Rules further require that upon giving a notice under Section 31 C, the applicant needs to give a fresh advance notice under Rule 23 and comply with the additional conditions including payment of royalties. Additionally, the Rules provide for the manner of determining royalties as well as a complaint mechanism in case of non payment of royalties to the owner of the original work. Statutory licence for broadcasting of literary and musical works and sound recording Chapter VIII (Rules 29 to 31) provide for statutory licence for broadcast-

ing of literary and musical works and sound recording in furtherance of newly inserted Section 31-D of the Copyright Amendment Act, 2012. These rules provide for notice of intention to be given to the owner of the copyright and the Registrar of Copyright before a period of five days in advance of such communication to the public and shall pay to the owner of the copyright, in the literary or musical work or sound recording or any combination thereof, the amount of royalties due at the rate fixed by the Board. Further, separate notices are required for radio and television broadcasting. It also mentions the necessary details that are required to be included in the notice. The Rules state that the Copyright Board must give public notice of its intention to fix royalties and invite suggestions for determining the same. Within 30 days of such public notice, interested parties must give suggestions for royalty rates along with adequate evidence – including rates for different formats. Thus, the final royalty rates must be fixed by the Board within two months. It also lists out some of the factors that the Board should consider in fixing royalties: the time slot, nature of work, different rates for different classes of works, terms and conditions included in the Grant of Permission Agreement (GOPA) between Ministry of Information and Broadcasting and the broadcaster for Operating Frequency Modulation (FM) Radio Broadcasting Service. Copyright Societies Chapter XI (Rules 44 to 67) concern copyright societies. These Rules deal with the following: ► Conditions for submission of application for registration of copyright society which provides for an application which may be made to the Registrar by any association of persons, having an independent legal personality, comprising seven or more authors and other owners of rights formed for the purpose of carrying on business of issuing or granting licenses in respect of rights or set of rights ► Membership of copyright society which is open for all authors and other owners of rights or a set of rights. ► Conditions for grant of permission to carry on copyright business which deals with eligibility criteria for applicants ► Applications and conditions for re-registration of existing copyright societies which provides for mandatory re-registration of copyright societies which were registered prior to the Rules coming into force ► Documents accompanying applications, ► Conditions for registration of a copyright society which provides that when an application for registration is submitted to the Central Government through the Registrar of Copyrights, the Government may within sixty days either register the applicant as a copyright society or reject the applications on the ground mentioned in Rule 49. It further provides that the copyright society from the date of commencement needs to maintain its own website, have proper infrastructure such as office building and officials for management. ► The Rules further provide for order of inquiry, suspension of registration and appointment of administrator, procedure for holding inquiry, powers and functions of an administrator wherein if the Central Government, on complaint of the Registrar of Copyrights or a member of the copyright society, has reason to believe that the copyright society is being managed in a manner detrimental to the interests of the members concerned of for non compliance of the relevant sections of the Act, it may order an inquiry to be set up. ► Cancellation of registration of a copyright society which provides for the power of the Central Government to cancel the registration of a copyright society after giving the copyright society a reasonable oppor-


33

Six petitions have been filed challenging the Copyright Amendment Act, 2012 and the Copyright Rules, 2013 by the authors, producers, music labels, broadcasters and book publishers tunity of being heard if any of the particulars furnished in an application for registration are found to be incorrect/ misleading, upon results of inquiry being set on the copyright society, if the society has failed to manage its affairs properly or distribute the royalties as per scheme of failed to maintain proper accounts or not complied with relevant sections of the Act. ► It further provides for conditions subject to which a copyright society may accept authorization and an author or other owner of rights may withdraw such authorization, conditions subject to which a copyright society may issue licenses to collect royalties and distribute such royalties, ► Tariff scheme which provides for the copyright society to create its tariff scheme not later than three months from the date it is entitled to commence its business The tariff scheme shall indicate separate rates for different categories of users, media of exploitation, whether exploitation by individual or group, different durations of use and territory, other differentiation factor, etc. While fixing the tariff scheme the copyright society shall follow the guidelines issued by any court or the board and may consult the user groups. The copyright society needs to collect the royalties from a licensee in advance where the Tariff Scheme provides for a lump sum payment of royalties and where in instalments each instalment to be collected in advance. No payment to be received in the form of minimum guarantee. The Rules also provide for appeal provision by an aggrieved person to the Board on Tariff Scheme,

of performers’ society. It provides that for the purpose of carrying on business of issuing or granting licenses in respect of performer’s rights under Section 38-A (1) and (2) of the Act, there shall be a separate performers’ society for the performers. Provided that the Central Government may allow registration of a society for performers’ of different classes of performers in cases where the performances are interconnected or closely related to each other. The explanations to Rule 68 clarify three things: 1) The royalty collected from enjoyment of the performer’s right in (i) to (v) of clause (a) of sub section (1) and proviso to sub.section (2) of Section 38 A, shall be shared equally between the performer and other owner of copyright 2) Commercial use as mentioned in proviso to sub-section (2) of Section 38 A, means the exploitation of the performers right by way of reproduction , issue of copies or distribution, communication to public including broadcasting and commercial rental of the cinematograph film. 3) Performance includes recording of visual or acoustic presentation of a performer in the sound and visual records in the studio or otherwise. Storage of transient or incidental copies of works

► The other provisions in the chapter deal with management of copyright society, approval of schemes, meetings of the society, documents to be presented in the annual general body meeting, accounts and audit, records to be maintained by copyright societies, returns to be filed by the copyright societies with the Registrar of Copyright, Code of conduct for copyright societies and welfare fund of copyright society.

Chapter XIV (Rule 75) provides for storage of transient or incidental copies of work which provides that any owner of copyright may give a complaint in writing under Section 52 (1) (c) to a person who has facilitated transient or incidental storage of work for providing electronic links, access or integration to restrain from such storage of work. On receipt of the written complaint, the person responsible for the storage of the copy, if satisfied from the details provided in the complaint that the copy of the work is an infringed copy, within thirty six hours, take measures to refrain from facilitating such access for a period of twenty one days from the date of receipt of the complaint or till he receives an order from the competent court restraining him from facilitating access, whichever is earlier.

Performers Society

Importation of Infringing Copies

Chapter XII (Rule 68) deals with the registration and management

Chapter XVI (Rule 79) deals with importation of infringing copies. It

► Distribution Scheme- A copyright society needs to frame a scheme setting out the procedure for distribution of royalties specified in the Tariff scheme among the members. The Distribution needs to be in proportion to the royalty income of the society and there should be no discrimination between authors and owners of rights in the distribution of royalties.


34

Role and Rule of Law Media & Entertainment Industry Films : Chapter 2 : Application Copyright Act 1957

relates to Section 53 of the Copyright Act which allows for allegedly infringing imported goods to be classified as ‘prohibited goods’, liable to be detained by a Customs Officer. The notice must be in accordance with Form XIII and shall include the required security deposit. The period of detention is 14 days and notices must be sent to both parties upon detention. The Rules make an additional allowance for the importer to request of the name and address of the person sending such a notice. Technological Protection Measures (TPM) Chapter XVII (Rule 80) deal with technological protection measures. These Rules explicitly state that where circumvention of TPM’s is permitted under law, an individual may approach anyone to assist in such circumvention. Such person, providing assistance, must maintain details records of the said individuals including his personal and professional details, reasons for circumvention and an undertaking that he will be solely responsible in case of infringement. If such circumvention technology is provided online, then an online registration form requiring such details to be submitted is also mandatory. It is further provided that such information shall only be disclosed on the basis of a court order or to a police officer not below the rank of sub-inspector, if it involves a complaint under Section 65A of the Act.

P.

PETITIONS CHALLENGING THE COPYRIGHT AMENDMENT ACT, 2012 AND COPYRIGHT RULES, 2013 The Copyright Amendment Act, 2012 happens to be one of the most widely challenged statutes. There are currently six petitions filed challenging several provisions of the Copyright Amendment Act, 2012 and the Copyright Rules, 2013. Petitions have been filed by music labels, producers, authors, broadcasters and book publishers challenging the Amendment Act and the Rules.

PETITION FILED BY BROADCASTERS: Indian Broadcasting Foundation v/s Union of India & Ors : Writ Petition No. 2116 of 2013-Bombay High Court

The Indian Broadcasting Foundation (IBF) is the apex industry association of the broadcasters in India. The IBF along with some of its member broadcasters have challenged the constitutionality of certain provisions inserted in the Copyright Act, 1957, by the Copyright Amendment Act, 2012 (Act No. 27 of 2012, hereinafter referred to as the “Amendment Act”) namely Section 17, newly inserted provisos to Section 18, Section 19 (9), and Rule 54(4), of the newly introduced Copyright Rules, 2013 (hereinafter referred to as “Copyright Rules”) contending that these provisions violate their fundamental rights guaranteed under of the Constitution of India for the following reasons: (i) Section 17 proviso: The newly inserted proviso to Section 17 which states “Provided that in case of any work incorporated in a cinematograph work, nothing contained in clauses (b) and (c) shall affect the right of the author in the work, referred to in clause (a) of sub-section (1) of section 13” appears to discriminate against the rights of first owners of cinematograph films in the underlying works embedded in such films vis-a-vis the rights of first owners of the same works embedded in other media. The said proviso further puts an unreasonable, arbitrary and unconstitutional restriction on the Petitioners’ ability to freely determine their contractual arrangements and to deal with their copyrights in cinematograph films and is therefore unconstitutional and violative of the Petitioners’ constitutional and fundamental rights guaranteed under Article 14 and Article 19 (1) (g) of the Constitution of India.

(ii) Section 18 first new proviso: The first new proviso to Section 18 which states “Provided further that no such assignment shall be applied to any medium or mode of exploitation of the work which did not exist or was not in commercial use at the time when the assignment was made, unless the assignment specifically referred to such medium or mode of exploitation of the work:” takes away the freedom from the Petitioners of assignment of copyright in any mode or medium of exploitation of the work which did not exist or was not in commercial use at the time when the assignment was made, unless the assignment specifically referred to such medium or mode of exploitation of the work thereby affecting the Petitioners’ fundamental rights under Article 19 (1) (g) and right to property under Article 300A. The Petitioners have contended that the first new proviso to Section 18 is also discriminatory and violative of Article 14 because the restriction imposed by this proviso restricts the freedom to deal with the Petitioners’ property which restriction is not applicable with respect to tangible property and the owners of the tangible property are free to deal with their property the manner in which they wish. (iii) Section 18 second new proviso and Section 19(9) The Petitioners contend that the second new proviso to Section 18 and Section 19 (9) violate the right to equality enshrined in Article 14 of the Constitution as they discriminate without any intelligible differentia between the owner of cinema hall on one hand from other people including the Petitioners who communicate the cinematograph films to the public in other forms and not as part of cinematograph film in cinema hall and who also communicate sound recordings not forming part of cinematograph films to the public. According to the Petitioners the impugned Amendments therefore violate the principles of equality enshrined under Article 14 and unreasonably restrict the fundamental rights under Article 19 of the Constitution. (iv) Also, the aforesaid provisos violate Article 21 of the Constitution as regards the authors of the underlying works in a cinematograph film. Interestingly, in the reply filed by the Union of India, they have admitted that royalties are not payable for primary mode of exploitations and that royalties are payable only on commercial use of songs. The petition is pending before the Bombay High Court

PETITION FILED BY PRODUCERS: Bharat Anand & Anr v/s Union of India [WP (C) No 2321/ 2013]- Delhi High Court

The Petitioners Mr. Bharat Anand and Sir JVM Movies Pvt. Ltd are producers of feature films and have filed a petition in the Delhi High Court challenging Sections 11, 12, 17, 18, 19 and 33 of the Amendment Act and Rule 3 of the Copyright Rules as being ultra vires Article 14, 19(l) (c), 19 (1) (g), 21 and 300-A of the Constitution of India for the following reasons: (i) Sections 11 and 13 r/w Rule 3- The Copyright Board as constituted under Sections 11 and 13 r/w Rule 3 do not meet the tests for such Tribunals as laid down by the Supreme Court in the case of Union of India v/s R. Gandhi [2010 11 SCC 1]. Section 11 of the Amendment Act details the basic constitution of the Copyright Board and Section 12 of the Amendment Act details the powers and procedure of the Copyright Board. Rule 3 lays down the qualifications required to be appointed as a member or Chairperson of the Copyright Board. Rule 3(2)


35

in particular lays down the qualification criteria for the post of members. The core challenge is against the appointment of active members of the Executive to the Copyright Board. The Rules allow the Central Government to appoint serving bureaucrats to the Copyright Board which foes against the Supreme Court holding in the case of Union of India v/s R. Gandhi [2010 11 SCC 1]. (ii) Section 17 proviso- The Petitioners challenge that the new proviso to Section 17 derogates without justification from the general rule in Section 17 (b) and (c) and unreasonably violates the fundamental freedom of contract of the Petitioners enshrined under Article 19. The new proviso further renders Section 17 (b) and (c) redundant and nugatory. Petitioners have further contended that the new Section 17 proviso further violates their right under Article 21 as it exposes them to excessive risk so as to prejudice their business and occupation. (iii) Section 18 second and third new proviso and Section 19 (9) and (10)- The core constitutional challenge against these provisions, by the film producers, is that such provisions create special rights for only lyricists and composers and unreasonably discriminates against other classes of authors thereby being violative of Article 14 of the Constitution. The Petitioners have contended that producers of cinematograph films have been singled out in violation of Article 14, as against other persons who cause works to be made for them under contracts of employment or for employment such as newspaper/ magazine, book publishers and software companies, all of whom are allowed to acquire copyright in literary works commissioned by them or made by their employees without the statutory requirement of a compulsory royalty share with authors of such works. The Petitioners have further contended that Sections 18 and 19 read together are mutually contradictory and devoid of any meaning and liable to be struck down. (iv) Section 33 new proviso – The Petitioners challenge that the new proviso to Section 33 which provides that the business of granting licenses in respect of literary, dramatic, musical and artistic works incorporated in cinematograph films or sound recordings shall be carried out only through a registered copyright society, violates the Petitioner’s freedom under Article 19 (1) (c). The Petitioners argue that such a provision violates their fundamental right under Article 19(1)(c) to form associations and unions since the Supreme Court has held that the right to form association, includes the right to not join an association. The Petitioners further contend that there is no rational basis for compelling owners of literary, dramatic, musical and artistic works included in cinematograph films and sound recordings to compulsorily exploit their works through copyright societies while owners of the same works which do not form part of cinematograph films and sound recordings are not under the same compulsion. They have challenged this provision as being violative of Article 19 (1) (g) as a result of preventing the Petitioners from licensing their works otherwise than through a copyright society. The Petition is pending before the Delhi High Court

PETITION FILED BY AUTHORS Devender Dev and Ors v/s Union of India WP (C) No. 2959/ 2013- Delhi High Court

The Petitioners Devender Dev, Sandeep Kapoor and Akhilesh Kumar are Bhojpuri music composers and have challenged certain provisions of the Amendment Act and Rules more particularly the second and

third new provisos to Section 18 and Section 33 (1) as being ultra vires Articles 14, 19 (1) (c), 19 (1) (g), 21 and 300A of Constitution for the following reasons: i)

Prior to the Amendment, the petitioners (authors of lyrics and musical composition) had the right to negotiate and enter into contracts freely and mutually agree upon an upfront lump sum consideration of the works created by them. The Petitioners would get an upfront lump sum payment for their works and the entire responsibility in respect of the promotion of the said works and thereafter enjoying the royalty in the event the works became successful was borne by the producer. Thus irrespective of the commercial success of their works, the Petitioners were duly remunerated for their works as the producer took the entire risk in the event the works did not become successful and no royalties were generated.

ii) Bhojpuri authors have limited means and modes/ media of exploitation when compared with the mediums of exploitation available to the authors in the Hindi film industry. The Petitioners heavily rely upon physical sales of their works and considerably lesser upfront lump sum payments regardless of the success or failure of their works in the ultimate marker analysis. iii) Section 18 second and third new provisos- By virtue of second and third new provisos to section 18 (1), the Petitioner’s freedom to contract or assign their works on terms they deem fit has been taken away by bringing the mandatory royalty sharing regime. The said provisos to Section 18 (1) completely bar the Petitioners from assigning their right to receive royalties for the exploitation of their works and have created a deeming fiction that any agreement to the contrary shall be void thereby violating their rights under Article 19 (1) (g), Article 21 and Article 300 A. The Petitioners further contend that the said provisos to Section 18 (1) violate the right of equality of the Petitioners under Article 14 of the Constitution as they result in unequal treatment of equally placed individuals, being authors whose works have been and have not been, or have not yet been, included in a film or sound recording. The said provisos to Section 18 (1) of the Amendment Act are also in conflict with sub-section (3) of Section 19 which provides that “the assignment shall be subject to revision, extension or termination on terms mutually agreed upon by the Parties”. It is submitted that this freedom cannot be exercised by the authors of works made for films or sound recordings in view of the said provisos to Section 18 (1) of the Amendment Act. They further contend that these provisos to Section 18 (1) deprive the Petitioners the freedom to deal with their property as they deem fit causing severe prejudice to the Petitioners and violating their right to life under Article 21. iv) Section 19 (9) and (10)- The Petitioners have submitted that these sub-sections do not bar the assignment of the right to receive royalties by an author such as the Petitioners. There is thus a conflict between the impugned second and third new provisos to Section 18 (1) which enacts as a bar on the Petitioners from assigning their right to receive royalties to be shared on an equal basis to the assignee of the copyright. The impugned provisos take away the rights of the Petitioner to deal with/ exploit the intellectual property created by the Petitioners without there being a public purpose to do so, thus violative of Article 21. v) Section 33- The Petitioners contend that under the new proviso to Section 33 (1), the Petitioners are compelled to be members of a copyright society and can pursuant to the impugned


Role and Rule of Law Media & Entertainment Industry Films : Chapter 2 : Application Copyright Act 1957

36

amendment, license their works only through such copyright society and not otherwise thereby violating their right under Article 19 (1) (c) which also grants the right not to be a part of an association. The impugned proviso to Section 33 is also contended to be in conflict with Section 34 (1) (b) of the Act which grants liberty to the authors such as the Petitioners from withdrawing their authorization from the copyright society enabling the society to administer the Petitioners’ works. As a result of the impugned proviso, the said Section 34 (1) (b) becomes meaningless. The Petition is pending before the Delhi High Court.

PETITIONS FILED BY MUSIC LABELS 1) Super Cassettes Industries Ltd v/s Union of India and Ors [WP (C) 2316/2013]

2) Venus Worldwide Entertainment Pvt. Ltd v/s Phonographic Performance Limited [WP 2318/2013] Delhi High Court There are two petitions filed by music labels challenging the Amendment Act and the Rules. The first petition is filed by Super Cassettes Industries Limited and the second petition is filed by Venus Worldwide Entertainment Pvt. Ltd and Phonographic Performance Limited. Both the petitions are more or less identical. These petitions have challenged the following provisions of the Amendment Act and Rules viz. Section 11- [Copyright Board] , Section 31 (1) (b) [Compulsory licence in works withheld from public], Section 31 D-[Statutory licence for broadcasting of literary and musical works and sound recording] Read with the corresponding rules i.e. Rule 3(2)[ which deals with qualification for appointment as chairman and member of the Copyright Board], Rule 7 [notice of application for license under Section 31], Rule 29 [Notice to owner under Section 31 D] , Rule 30 [Maintaining of records] and Rule 31[Manner of determining royalties] of the newly introduced Copyright Rules, 2013. In the Venus Worldwide petition as a result of PPL joining the challenge, this petition also challenges the right to appeal against tariff scheme prescribed by copyright societies under Section 33A (2). The said sections and rules have been challenged as being ultra vires Article 14, 19(l)(g), 21 and 3 00-A of the Constitution of India for the following reasons: (i) Section 11 read with Rule 3(2) – The challenge to Section 11 and Rule 3(2) is on the basis that these provisions are violative of the principle of fair trial as it permits appointment of bureaucrats, serving government employees and other persons as members of the Copyright Board without there being any requirement for such member to have prior industry knowledge or experience, thereby being contrary to the provisions of Article 14 and 19(1) (g). They contend that the rates and terms of licenses for use of copyrighted sound recordings and underlying literary and musical works will no longer be determined primarily by freedom of contract but by a three-member Copyright Board ( with no knowledge or expertise whatsoever in the music industry, radio industry or television industry). The requirement that the Chairman shall be a person who has been a Judge of a High Court or is qualified for appointment as a Judge of a High Court, the qualifications prescribed under Rule 3(2) for appointment of ‘member’ go contrary to the letter and spirit of the Hon’ble Supreme Court’s judgment dated 11th May, 2010 in the matter of Union of India vs R. Gandhi (supra).

(ii) Section 31 (l)(b), as amended, provides for a system of a non-voluntary/compulsory licensing in respect of copyrighted works whereby upon a complaint made to the Copyright Board by a complainant, the Copyright Board may impose, without the consent of the owner, a license not only in favour of the person making the complaint, but also to any number of other persons that in the opinion of the Copyright Board are “qualified” to get such a license without giving any opportunity of being heard or even notice to the owner of the copyrighted work qua the grant of a license to such other persons.

Natural justice: The Petitioners have objected this provision’s expansion of compulsory licenses to persons other than the complainant as being unreasonable and contrary to principles of natural justice, on the ground that the reasonableness of the copyright owner’s refusal to grant a voluntary licence can only be judged vis-à-vis the complainant, and thus any remedy should accordingly be restricted to the complainant alone (especially as third parties are not involved in any hearing under this provision) (iii) Section 31-D- According to the Petitioners Section 31 –D imposes in the most arbitrary manner, a system of non-voluntary/ statutory licensing in respect of three classes of copyrightable works, i.e. literary works, musical works and sound recordings (and not others) under which any broadcasting organization has a right to a statutory license to communicate to the public or publicly perform the said works without needing the consent of the owner of such works and without offering the owner any hearing at any stage or for any purpose whatsoever. The rates and terms for such statutory license are fixed by the Copyright Board. Therefore, Section 31D impermissibly expropriates copyright owners such that licenses can no longer be granted by freedom of contract but by a statutory or compulsory license whose rates and terms will be determined by a three-member Copyright Board appointed by the Government which is not required to have any knowledge or expertise whatsoever in the music industry, radio industry or television industry under Section 11 read with Rule 3(2). Section 3ID completely bypasses the scheme of providing a hearing, much less a fair hearing, to the owner of a copyrighted work before granting private persons/entities a statutory license to use the same. The Petitioners’ grievance is that the Copyright Board has been provided with uncanalised, unreasonably overbroad and excessive power to micro-manage the commercial exploitation of an owner’s copyright insofar as the Copyright Board can under both the aforesaid provisions set the terms and conditions of such a mandatory license including the terms of royalty payable to the owner as per its sole discretion. (iv) Section 33A (2): The Venus Worldwide petition additionally challenges Section 33A (2) which allow users to appeal against tariff scheme prescribed by copyright societies before the Copyright Board. The Board in turn has powers to remove any ‘unreasonable’ element in the prescribed tariff scheme. The Petitioners question the competence and qualifications of the Board in determining ‘reasonableness’ in tariff scheme without legislative guidance. The Petitioners argue that this provision causes prejudice to members of copyright society vis-à-vis music labels not part of any copyright society. Furthermore, it fears that it would discourage music labels from becoming part of copyright societies as the provision unfairly interferes with freedom to negotiate licensing terms. The petition also contends that Rule 56(3), (4) & (5) and Rule 57(3) & (4) as not only unconstitutional but also exceeds the scope of Section 33A. Rule 56 and 57 deals with the procedure for publication of tariff scheme and appeals to the Board, respectively.


37

The grounds for challenge taken by the Petitioners are as under: Violation of Article 14: (i) Section 31(l)(b) and Section 31D are in clear violation of the right to equality enshrined in Article 14 of the Constitution as they result in unequal treatment of equally placed individuals. These provisions discriminate between parties doing business who stand on an equal footing and are in the same situation. [Analogy drawn with owners of cinematograph films, television broadcasters who themselves produce films, etc] (ii) The said provisions treat equals unequally and violate Article 14 by imposing price regulation upon one business group being the owner and supplier of the copyrighted works while leaving the second business group (broadcasters) free to exploit the same purely for a commercial purpose without imposing any price regulation upon the latter in their exploitation of the copyrighted works i.e. the broadcasters pay a price regulated by the Copyright Board for the copyrighted works, but in their exploitation of the said works, are at full liberty to fix their own advertising rates, free from any legislative supervision or regulation. (iii) Section 31 D arbitrarily discriminates in favour of Radio and Television broadcasters by ensuring to such broadcasters an unhindered and uncanalized access to Petitioners’ copyrighted work at subsidized royalty rates. (iv) The practical effect of both the said licensing related provisions is extra benefit to private entities and not the benefit of the public at large who already have access to the copyrighted works through multiple sources. Violation of Article 19 (1) (g) The said provisions besides being highly arbitrary, excessive in nature, substantially and unreasonably abrogate the fundamental rights of Petitioners to enter into contract and/or to carry on trade/business in a free and fair manner and take away a principal source of income and livelihood for Petitioners thus being violative of Article 19(1 )(g) as well as Article 21 of the Constitution of India. The said provisions cannot be contemplated as ‘reasonable restrictions’ of the nature as envisaged under Article 19(6). Violation of Article 300 A The said provisions fail to consider that a copyright owner has a right to property in his copyrighted work, both under the general scheme of Article 300A of the Constitution as well as under the specific provisions of the Copyright Act. Such a right cannot be taken away from the owner except for an urgent and primary public necessity and without prescribing a reasonable mechanism for compensating the owner of the right. The grievance of the Petitioners is that if the impugned provisions are not struck down, the long standing mutually negotiated voluntary license agreements with multiple broadcasters including with All India Radio which are getting unhindered access to the works of Petitioners and through them the public is getting easy access to the said works, and with the coming of the impugned provisions, such broadcasters would have no incentive to enter into and/or continue with the voluntary license agreements with the Petitioners and instead would attempt to terminate or wriggle out of their agreements with the Petitioners in order to approach the Copyright Board to have terms convenient to them fixed and imposed upon the copyright owner. These petitions are pending before the Delhi High Court.

Q. MUSIC INDUSTRY: In respect of a cinematograph film and sound recording, the producer is the author and owner of the copyright therein. Producer in relation to a cinematograph film and sound recording means the person who takes the initiative and responsibility of making the work. The producer commissions singers, composers, lyricists and technicians for the purpose of production of sound recordings. The general practice in the industry is that the producer assigns his rights in the sound recordings in the film/ or independent albums to a music company (publisher), which in turn facilitates the distribution and exploitation of the rights in the sound recordings. These publishers license music to the copyright societies for efficient management of royalties accrued by the exploitation of the sound recordings across any mode/medium/form. Publication of sound recording means making the sound recording available to the public by issue of copies or by communicating the work to the public.

Salient Features of the Copyright Act, 1957 as applicable to the Music Industry: ► Kinds of Contracts: Producer engages a music composer for composing music for his film. Usually such engagements are by a contract of service under Section 17 (c) of the Copyright Act, 1957, or a workfor-hire/ commissioned basis under Section 17 (b) in which case, the producer is the sole and exclusive owner of the copyright in such musical work. However, today, the popular arrangement is changing and the well-known/senior music composers are being engaged under a contract for service, in which case, the music composer remains the owner of the musical work. Hence for playing any music/song developed by these music composers, the license from the music composer would be required, as these music composers licence their music to the producers only for its use in the film, but the ownership as well as the authorship continues to remain with the composers. ► Musical works and Sound Recordings under Copyright Act, 1957 - As per Section 2 (p), musical work means a work consisting of music and includes any graphical notation of such work but does not include any words or any action intended to be sung, spoken or performed with the music; As per Section 2(xx), sound recording means a recording of sounds from which such sounds may be produced regardless of the medium on which such recording is made or the method by which the sounds are produced; ► Musical works and sound recording embodying the music are considered as separate subject-matters for copyright. Thus copyright in the recording of music is separate from the copyright in the music. Copyright in the music vests in the composer and the copyright in the music recorded vests in the producer of the sound recording. ► Licences: As per the Copyright Amendment Act, 2012, the business of issuing or granting licence in respect of literary, dramatic, musical and artistic works incorporated in cinematograph films or sound recordings shall be carried out only through a copyright society duly registered under the Act. Licences are issued by the Indian Performing Rights Society (IPRS), which represents lyric writers, composers and publishers, and the Phonographic Performance Limited (PPL), which represents the record companies i.e. the publishers or any other copyright society formed.

Changes in view of the Copyright (Amendment) Act, 2012. ► Royalties: In view of the 2012 Amendment, in addition to obtaining a license from the PPL, person exploiting the sound recording would be


38

Role and Rule of Law Media & Entertainment Industry Films : Chapter 2 : Application Copyright Act 1957

required to pay royalties to the copyright society of which the author of such sound recording is a member and such copyright society would in turn pay the royalties equally between the authors and the producer/ assignee of the sound recording. As per Section 18 of the Copyright Amendment Act, 2012, authors of musical work included in a cinematograph film are now entitled to receive non-assignable royalties to be shared on an equal basis with the assignee of copyright for the utilisation of such work in any form other than for the communication to the public of the work along with the cinematograph film in a cinema hall. Also the author of the literary or musical work included in the sound recording but not forming part of any cinematograph film are entitled to receive non-assignable royalties to be shared on an equal basis with the assignee of copyright for any utilisation of such work. ► Application of the 2012 amendment: The amendment came into effect from June 21, 2012.

First View: The amendment is applicable to all future exploitation of historic works i.e. works which have come into existence prior to the amendment and continue to be exploited. For instance, if a person wishes to play a song from a film released in 2011, i.e. prior to the 2012 amendment, he would be required to take a license from PPL as the sound recording rights of the film are with publishers which are members of PPL. In addition to the license from PPL, he/she would have to pay royalties to the copyright society of which the lyricist, music composer and music company are members.

Second View: The amendment is applicable only to assignments that are executed after the amendment came in force. There is no express provision in the Copyright Act giving retrospective effect to the 2012 amendments. It is reasonable to state that the intention of the legislature cannot be to impose obligation on third parties to make payment of royalty for historic works prior to the amendment. If the second view is held to be applicable, then the user would be required to pay royalties to authors of literary and musical works only for sound recordings which have come into existence after June 21, 2012, i.e. the date on which the Copyright Amendment Act, 2012, came into force.

R. INTERNATIONAL TREATIES AND

CONVENTIONS SIgnED BY INDIA

India is a signatory to the following international treaties and conventions for the protection of intellectual property rights: 1. Paris Convention (1883): This Convention applies to industrial property in the widest sense, including patents, marks, industrial designs, utility models, trade names, geographical indications and the repression of unfair competition. Under the provisions on national treatment, the Convention provides that, as regards the protection of industrial property, each contracting state must grant the same protection to nationals of the other contracting states as it grants to its own nationals.

tection of performers, producers of phonograms and broadcasting organisations. The Convention secures protection in performances of performers, phonograms of producers of phonograms and broadcasts of broadcasting organisations. 5. Phonograms Convention (1971): This Convention provides for the obligation of each contracting state to protect a producer of phonograms who is a national of another contracting state against the unauthorised duplication of their phonograms. Protection may be provided as a matter of copyright law, sui generis (related rights) law, unfair competition law or penal law. 6. Trade Related Aspects of Intellectual Property Rights (1994): TRIPs is the most important and comprehensive international agreement on intellectual property rights. Member countries of the World Trade Organisation (WTO) are automatically bound by the agreement. It covers most forms of intellectual property including patents, copyright, trademarks, geographical indications, industrial designs, trade secrets, and exclusionary rights over new plant varieties. The TRIPS agreement outlines several important trade related aspects of intellectual property.

WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT) (1996): India is not a signatory to the WCT and WPPT but the Copyright (Amendment) Act, 2012, was enacted to incorporate important aspects of both the treaties. The World Intellectual Property Organizations (WIPO) is an agency of the United Nations which was established in 1970, to promote the protection of Intellectual Property. The WCT and WPPT were negotiated to address the difficulties faced in the protection of copyright and related rights, particularly on the digital platform. The WCT deals with the protection for the author of literary and artistic works while WPPT protects the right of performers and producers.

INDIA’S ACCESSION TO MADRID PROTOCOL There has been a significant development in India with reference to the International Trademark Registration System. India has joined the Madrid Protocol which will enable the domestic companies and entrepreneurs to obtain cost effective global trademark registration. The system of international registration of marks is governed by two treaties: the Madrid Agreement Concerning the International Registration of Marks (referred as ‘Madrid Agreement’ in brief), which dates from 1891, and the Protocol Relating to the Madrid Agreement ( hereinafter referred as ‘Madrid Protocol’ in brief), which was adopted in 1989, entered into force on December 1, 1995, and came into operation on April 1, 1996. Common Regulations under the Agreement and Protocol also came into force on that date.

2. Berne Convention (1886): Berne Convention is for the protection of literary and artistic works. It requires its signatories to recognise the copyright of authors from other signatory countries in the same way as it recognises the copyright of its own nationals.

Under the Madrid Protocol, a mark can be protected in many jurisdictions by filing an application for international registration. Such application is presented to the International Bureau of the World Intellectual Property Organization at Geneva, through the office of origin i.e. the trademark office of the applicant.

3. Universal Copyright Convention (1952): UCC is one of the principal international conventions protecting copyright. It was developed by UNESCO as an alternative to the Berne Convention for those states which disagreed with aspects of the Berne Convention but still wished to participate in some form of multilateral copyright protection.

Where the application complies with the applicable requirements, the mark is recorded in the International Register and published in the WIPO Gazette of International Marks. The International Bureau then notifies each Contracting Party in which protection has been requested whether in the international application or subsequently.

4. Rome Convention (1980): This Convention provides for the pro-

Each designated Contracting Party has the right to refuse protection of


39

India acceded to the Madrid Protocol and was the first country to ratify the Marrakesh Treaty mark by so notifying to the International Bureau within the time limits specified in the Madrid Protocol. Unless such a refusal is notified to the International Bureau within the applicable time limit, the protection of the mark in each designated Contracting Party is the same as if it had been registered by the Office of that Contracting Party. An international registration remains dependent on the mark registered or applied for in the Office of origin, for a period of five years from the date of its registration. If, and to the extent that, the basic registration ceases to have effect within this five-year period, the international registration is no longer protected. An international registration subsists for the period of 10 years from the date of its registration and it may be renewed further by paying renewal fee before the expiry of every 10 years. All changes subsequent to the international registration, such as a change in name and/or address Guidelines for functioning under the Madrid Protocol of the holder, a (total or partial) change in ownership of the holder or a limitation of the list of goods and services in respect of all or some of the designated Contracting Parties, may be recorded and have effect by means of a single procedure with the International Bureau and the payment of one fee. This would give a unique opportunity to all domestic companies and entrepreneurs to protect their trade mark portfolio across the world. This instrument would provide an opportunity for the Indian companies to increase their global footprint and to register trademarks in member countries of the Protocol through a single application. It would give an opportunity to the brand owners across the world to extend their protection to the important Indian market through a single, simplified and cost-effective procedure.

THE MARRAKESH TREATY The ‘Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled’ was signed in Marrakesh, Morocco, on 27th June 2013. India is the first country to ratify the Treaty on 24th June, 2014. The Marrakesh Treaty will come into force once 20 countries ratify it. The adoption of this Treaty has made equal and appropriate balance between Copyright Law, its exceptions and limitations. The primary aim of the Treaty is to have a cross border exchange of copyrighted work in accessible formats. The Treaty clarifies that beneficiary persons are those affected by a range of disabilities that interfere with the effective reading of printed material. The broad definition includes persons who are blind, visually impaired, or reading disabled or persons with a physical disability that prevents them from holding and manipulating a book. The treaty recognizes the obligation of right holders to make works accessible to persons with visual impairments and to the print disabled, recognizes that though countries have different limitations and

exceptions to their copyright laws, a uniform international framework is required to address the needs of this section of society in order to harmonize the law on this point and to ensure cross-border exchange of books in accessible formats. The Treaty has a clear structure and provides for specific rules regarding both domestic and cross-border limitations and exceptions. First, it requires Contracting Parties to have a limitation or exception to domestic copyright law for blind, visually impaired and otherwise print disabled (VIPs). The rights subject to such limitation or exception are the right of reproduction, the right of distribution, and the right of making available to the public. Authorized entities may, on a non-profit basis, make accessible format copies, which can be distributed by noncommercial lending or by electronic communication; the conditions for this activity include having lawful access to the work, introducing only those changes needed to make the work accessible, and supplying the copies only for use by beneficiary persons. VIPs may also make a personal use copy where they have lawful access to an accessible format copy of a work. At the domestic level countries can confine limitations or exceptions to those works that cannot be “obtained commercially under reasonable terms for beneficiary persons in that market.” Use of this possibility requires notification to the WIPO Director General. Second, the Treaty requires Contracting Parties to allow the import and export of accessible format copies under certain conditions. Regarding importation, when an accessible format copy can be made pursuant to national law, a copy may also be imported without rightholder authorization. With reference to exportation, accessible format copies made under a limitation or exception or other law can be distributed or made available by an authorized entity to a beneficiary person or authorized entity in another Contracting Party. This specific limitation or exception requires the exclusive use of the works by beneficiary persons, and the Treaty also clarifies that, prior to such distribution or making available, the authorized entity must not know or have reasonable grounds to know that the accessible format copy would be used by others. The MVT leaves Contracting Parties the freedom to implement its provisions taking into account their own legal systems and practices, including determinations on “fair practices, dealings or uses”, provided they comply with their three-step test obligations under other treaties. The three-step test is a basic principle used to determine whether or not an exception or limitation is permissible under the international norms on copyright and related rights. It includes three elements; any exception or limitation: (1) shall cover only certain special cases; (2) shall not conflict with the normal exploitation of the work; and (3) shall not unreasonably prejudice the legitimate interests of the rightholder. However this treaty is applicable to literary and artistic works only. In India, the Copyright Amendment Act, 2012 introduced S. 52(1)(zb) permits adaptation, reproduction, issue of copies or communication to the public of any work in accessible format for the benefit of persons with disabilities.


40

Role and Rule of Law Media & Entertainment Industry Films

03. LAW GOVERNING TITLES OF FILMS

A. PROTECTION UNDER STATUTE – COPYRIGHT

Other States:

ACT AND TRADE MARKS ACT

(v) Karnataka Film Chamber of Commerce

The issue regarding intellectual property in film titles is at a nascent stage in India. Indian courts have taken a uniform view like the US courts, that title alone cannot be protected under the copyright law. However, titles are protected according to the fundamental tenets of trademark and unfair competition law. Film titles can be segregated into two categories:

(vi) Andhra Pradesh Film Chamber of Commerce

(i) The titles of a series of films; and (ii) The title of a single film. Series titles enjoy the same protection as a usual trademark. In case of single film titles, it must be proven that such a title has acquired a wide reputation among the public and the industry and has acquired a secondary meaning. With the rising number of disputes related to titles and growing awareness, producers have started applying for registration of their film titles in accordance with the Trade Marks Act, 1999. Film titles are generally registered as a service mark under Class 41 of the Fourth Schedule of the Trade Marks Rules, 2001. Film titles are also registered under Class 9 of the Fourth Schedule of the Trade Marks Rules, 2001. The registration of a trademark constitutes prima facie validity in legal proceedings.

In addition, various trade associations of film producers also register titles of films. Some of these associations in Mumbai are: (i) Indian Motion Pictures Producers Association (IMPPA) (ii) The Film and Television Producers’ Guild of India (iii) The Association of Motion Pictures and Television Programme Producers (AMPTPP) (iv) Western India Film Producers’ Association.

vii) Hyderabad State Film Chambers of Commerce viii) Tamil Nadu Film Chambers of Commerce (This list is not exhaustive) While registration with societies and associations may not have any legal sanctity/statutory force, it carries evidentiary value in proving first user of the concerned title.

B.

DISPUTES PERTAINING TO REGISTRATION OF TITLES ► In 2006, there were two interesting judgments in respect of film titles for the films, Kabhi Alvida Na Kehna, and Nisshabd, in which the courts declined to interfere and held that there was no copyright in a title. ► In the matter of Sholay Media and Entertainment v Parag M. Singhvi & Ors.1 in 2006, the Delhi High Court granted an injunction in respect of the title, Sholay, on the basis of a trademark registration by the Plaintiff. This paved the way for recognition of a registered trademark in respect of a film title as against registration with a trade association. ► Judgments in cases such as, 13 B - Fear Has a New Address, and Thank You, in 2009 and 2011, went on to hold that there was no statutory protection for a title registered with the trade association.

1

Citation: CS (OS) No. 1892/2006


41

Important Case Laws: ●

Biswaroop Roy Choudhary v Karan Johar [Kabhi Alvida Na Kehna] Court: Delhi High Court

Citation: 131 (2006) DLT 458/ 2006(33) PTC381(Del) Coram: V Sen, J. Date: July 28, 2006 Facts: The Plaintiff had filed an application seeking interim injunction restraining the Defendant from using the trademark/title, Kabhi Alvida Naa Kehna, and for rendition of accounts of profits earned by the Defendant under the impugned trademark/title. Ratio: The court refused to grant interim relief. It held that neither of the parties had authored or conceived the words/catchy phrase, Kabhi Alvida Naa Kehna, since it is a part of a popular film song. ► The court observed, “Where words or phrases in common parlance were sought to be used with exclusivity, the court should take care to determine which of the parties ended its journey or traversed appreciably longer way in the use of such words as a trademark or as a title.” ► Fact that the defendant completed the production of the film, and was ready to release it for commercial exploitation, was a factor which would always deter the court from granting injunctory relief. ► Delay on behalf of the Plaintiff in approaching the court, so far as grant of equitable relief was concerned, was fatal. The Plaintiff had waited for the Defendants to expend large sums of money and energy in the completion of the film with the same title, thereby shifting the balance of convenience in favour of the Defendant. ► Relief of interim injunction was declined as intention of plaintiff was found to be mala fide. In Sholay Media and Entertainment v Parag M Singhvi & Ors.1 (2006), Delhi High Court heard a challenge against director Ram Gopal Verma and others in respect of the film, Ram Gopal Verma ke Sholay. The Plaintiff alleged breach of its proprietary rights in its registered trademarks, Sholay, Gabbar and Gabbar Singh. The court retrained the Defendants from using or passing off the trademarks Sholay, Gabbar and Gabbar Singh and from infringing the copyright of the Plaintiff in the film Sholay.

● Kanungo Media (P) Ltd v RGV Film Factory [Nisshabd] Court: Delhi High Court Citation: 138 (2007) DLT 312 Coram: AK Sikri, J Date: February 27, 2007 1

Citation: CS (OS) No. 1892/2006

Facts: The Plaintiff had filed the suit for permanent injunction on the ground that Plaintiff had already produced a movie with the title, Nisshabad, and the same title was used / proposed to be used by the Defendants for their film. Ratio: The court while refusing to grant injunction to the Plaintiffs observed that there was delay on the Plaintiff’s part to approach the court. The action also failed because the Defendant’s film had acquired much more publicity than the Plaintiff’s film as the latter’s film was a documentary in Bengali language made for the viewership of a particular category. It would be relevant to quote the observations of the judge as this case is the landmark judgment on trademark protection to titles and the principle of secondary meaning. The court observed: “American Courts have taken uniform view that title alone of a literary work cannot be protected by Copyright Law. Copying of a title alone, and not the plot, characterization, dialogue, song etc. is not the subject of Copyright Law. Thus, a copyright on a literary work would not include exclusive right to use the title on any other work. What, therefore, follows is that if a junior user uses the senior user’s literary title as the title of a work that by itself does not infringe the copyright of a senior user’s work since there is no copyright infringement merely from the identity or similarity of the titles alone. Same is the position under Copyright Law in India. However, legal protection for literary titles lies in the field of trademark and unfair competition. In general, such titles are protected according to the fundamental tenets of trademark and unfair competition law. Whether titles of single literary works can be registered as trademark or not has itself become debatable in the US, though in the case of titles of series of literary work, judicial opinion is that they are registrable. However, it is not necessary to go into this debate in as much as the plaintiff’s title ‘Nisshabd’ for its film is not registered as a trademark. The case at hand is, therefore, while applying the legal protection given to such titles under the Trade Marks Act is to be considered on the principle applicable in the cases of passing off of such trademarks. In passing off, necessary ingredient to be established is the likelihood of confusion and for establishing this ingredient it becomes necessary to prove that the title has acquired secondary meaning. Thus, in case of unregistered title following ingredients are to be proved in order to triumph in an injunction suit: i) Title has acquired the secondary meaning; ii) There is likelihood of confusion of source, affiliation, sponsorship or connection of potential buyers/audience/viewers. The test of secondary meaning in respect of literary titles is explained in the following manner by McCarthy (supra): The test of secondary meaning for literary titles is essentially one of determining whether, in the minds of a significant number of people, the title in question is associated with a single source of the literary work. That is, are people likely to assume that defendant’s work is connected in some way with the producers of plaintiff’s literary effort? The association need be only with a single, anonymous source. That is, the


42

Role and Rule of Law Media & Entertainment Industry Films : Chapter 3 : LAW GOVERNING TITLES OF FILMS

Delhi High Court heard a challenge against director Ram Gopal Verma and others in respect of the film, Ram Gopal Verma ki Sholay. The Plaintiff alleged breach of its proprietary rights in the registered trademarks, Sholay, Gabbar and Gabbar Singh.


43

consumer need not know the trade name of the source, but is entitled to assume that all works or goods under that title are controlled by some single source.”

● M/s. Narayani Production and another Vs. Prakash Jha Production and Others (Satyagraha) Court: Bombay High Court Citation: Notice of Motion (L) No. 1640 of 2013 in Suit (L) No. 722

of 2013

Coram: S. J. Kathawalla, J Date: August 28, 2013 Facts: The Plaintiff had filed the suit to restrain the defendants from

using the name “Satyagraha” for their movie which was scheduled to release on August 30, 2013. The Plaintiff’s claim was that the title, “Satyagraha” was registered by the plaintiff with the Association of Motion Pictures & T.V. Programme Producers (AMPTPP) since 2005. The registration of the title was thereafter renewed by the Plaintiffs on a yearly basis. The Plaintiffs admittedly failed to renew the said registration after January 29, 2011. On February 16, 2012, the Plaintiffs filed an application before the Trade Mark Registry seeking registration of the trademark Satyagraha under class 41, which is still pending. In the meantime on 15th June, 2011, the Defendant filed an Application seeking registration of the same title Satyagraha for its film with another Association viz. Indian Motion Picture Producers’ Association (IMPPA). Realising the lapse, the Plaintiffs applied for registration of the title with AMPTPP on August 25, 2011, which was subject to approval of the Title Registration Committee. Over a series of decisions taken by the two associations, the title was finally registered for the Defendants, because the registration of the Plaintiffs lapsed in January 2011, and the Defendants’ application was prior in time after the lapse. The Plaintiff therefore filed the suit seeking perpetual injunction against the Defendants from using, circulating, exhibiting, showing, distributing in any audiovisual format such as cinematic format/DVD,CD, film, movie or internet or any website the name of the feature film titled “Satyagraha” in any manner. In the alternative, the Plaintiffs also sought damages to the tune of Rupees Twenty Five Lacs from the Defendants. A Notice of Motion was also taken out by the Plaintiffs seeking a temporary reliefs and injunction restraining the Defendant Nos. 2 and 3 from proceeding with the release of the movie “Satyagraha”.

Ratio: The Hon’ble Court was of the view that the Plaintiffs were themselves to be blamed for having lost their registration to the title “Satyagraha” as they were negligent in getting it reregistered. It dismissed the allegations made against the defendants by the plaintiffs that defendants used their power and influence in the industry to manipulate the records of the Association of Motion Pictures & T.V. Programme Producers (AMPTPP), and deprived the Plaintiff of its legitimate right to use the title Satyagraha. Further the Court held that no copyright can be claimed in the title. Since the trademark Satyagraha was not registered till date in favour of the Plaintiffs, the Court held that the Plaintiffs could not claim any statutory rights in that regard. The Plaintiffs also could not claim any common law rights in the admitted absence of any plea of existence of any reputation and goodwill in the mark. The Plaintiffs therefore failed to make out any prima facie case in their favour. The application for injunction to restrain the release of Satyagraha was accordingly dismissed. The suit was eventually disposed of as withdrawn on January 6, 2014.

Techlegal Solutions Pvt. Ltd. V Mrs. Genelia Ritiesh Deshmukh & Ors (Lai Bhari)

Court: Bombay High Court Citation: Notice of Motion (L) No. 1562 of 2014 in Appeal (L) No. 411 of 2014 in Notice of Motion (L) No. 1503 of 2014 in Suit (L) No. 629 of 2014 Coram: S.J. Vazifdar and A.K. Menon,JJ Date: July 10, 2014 Facts: The Plaintiff sought to restrain the Defendants from releasing a Marathi film under the title “Lai Bhaari”. The Plaintiff claimed that this phrase or expression is the Plaintiff’s registered trade mark and that the Plaintiff is a prior user of this mark. The Plaintiff claimed that sometime in 2010, it launched a social network in Marathi with a domain name “laibhaari.com”. This, the Plaintiff claimed, rapidly became popular and acquired several subscribers. The Plaintiff claimed that it has a complete monopoly on the expression “lai bhaari.” The Single judge of the Bombay High Court, Justice G.S. Patel vide order dated July 3, 2014 held that ‘Lai Bhaari’ is not an expression coined by the Plaintiff. It is a very old, well-known and established colloquial expression in Marathi, its etymology possibly in one of the coastal dialects. It has a known meaning: excellent, very good or very important. It is used in several contexts to convey this. Also the registration of plaintiff’s domain name, laibhaari.com does not give the plaintiff proprietary rights in the common Marathi expression “lai bhaari” across all classes, products and range of activities. The consequence of that submission according to the judge was far too wide, and far too dangerous. That is not the mandate of intellectual property protection laws. The single judge held that the Plaintiff has not made out even the slightest vestige of anything approaching a prima facie case. There was no possible injury to the Plaintiff. There was no question of any balance of convenience being in the Plaintiff’s favour. According to the Learned Single Judge none of the well-established tests for infringement were satisfied. The Plaintiff had absolutely no proprietary or statutory rights in the phrase “lai bhaari”, no matter how spelled. Ad-interim injunction was therefore refused. The Plaintiffs filed an appeal against the Learned Single Judge’s order.

Ratio: The Division bench of the Bombay High Court upheld the order passed by the Learned Single Judge further observing that prima facie the material on record did not indicate that the Plaintiff’s mark is a well know mark sufficient to maintain an action successfully for passing off or for infringement. The Court further observed that the Appellant’s application for registration of the words “Lai Bhaari” is pending registration. The Court noted that the Registrar of Trademarks has himself has raised an objection to the same. The respondents also did not intend using the words as a website mark. The Court held that the learned single judge had discussed in detail that the words constitute an extremely popular Marathi expression and have been used in various forms, including in songs, as names of the restaurants and even as a figure of speech. The Division Bench therefore found no reason to interfere with the Single Judge’s order.

Bajaj Auto Limited and Anr V/s JA Entertainment Private Limited and Anr (Hamara Bajaj) Court: Bombay High Court

Citation: Notice of motion no. 1029 of 2013 in Suit No. 491 of 2013 Coram: S.J Kathawalla, J. Date: September 21, 2013


44

Role and Rule of Law Media & Entertainment Industry Films : Chapter 3 : LAW GOVERNING TITLES OF FILMS

Facts: Bajaj Auto, India’s second largest two-wheeler maker filed a suit against J.A. Entertainment Pvt. Ltd over the alleged infringement of their trademark “Hamara Bajaj” following the announcement of the film’s title. The Plaintiffs sought a permanent injunction restraining the Defendants from in any manner infringing, passing off or enabling others to pass of the Plaintiffs registered trademark Bajaj by using the title “Hamara Bajaj” as the title and/ or by the use of the mark Bajaj and Hamara Bajaj in the contents of the proposed film or else wherein respect of their proposed cinematographic movie production. Ratio: The Court ruled in favour of Bajaj Auto by granting it a perma-

nent injunction against J.A. Entertainment from using ‘Hamara Bajaj’ as their movie title. In view of the Defendants’ submitting to a Decree, the Plaintiffs did not press any costs or damages. The Suit was accordingly disposed off. Notice of Motion also stands disposed off.

● PepsiCo vs. MSM Motion Pictures & Ors (Youngistaan) Court: Delhi High Court Citation: CS (OS) 418/2014 Coram: A.K. Pathak, J. Date: March 5, 2014. Facts: PepsiCo after learning about the movie being released under the title “YOUNGISTAAN” sought to restrain the producers, MSM Motion Pictures and Vashu Bhagnani from advertising, promoting and releasing the film under the above mentioned title. PepsiCo sent a cease and desist notice to the Defendants calling upon them to cease use of the impugned mark in respect of their movie; however inspite of the said notice, the producers announced on February 6, 2014 the stated release of the film under the said title and went ahead with all the promotional activities. On ignorance by MSM Motion Pictures to the cease and desist letter, PepsiCo moved the Delhi High Court on February 12, 2014 seeking a permanent injunction against the release of the movie and therefore, preventing the defendants from blatantly imitating PepsiCo’s registered trademark “Youngistaan” as a part of their movie title. Ratio: The court in its order stated that the two parties agreed to settle

the matter amicably. The defendants put forward a set of terms which were acceptable to the plaintiffs. The terms were as follows: ► Defendants would give a disclaimer at the end of the beginning title credits before the movie begins in a prominent manner in the following words: “This movie is not related to or associated with, sponsored or promoted in any manner by Pepsi’s Youngistaan Campaign”; ► Defendants had no connection or right in Pepsi’s registered trade mark Youngistaan or the Campaign thereof; ► Defendants would also give disclaimer in their promos in the end slate to the effect “No connection with Pepsi”, as also in non-theatrical trailers and on all other social media with effect from March 15, 2014. The suit was accordingly disposed off.

● Rashttravadi Shiv Sena v/s Sanjay Leela Bhansali Films Pvt. Ltd & Ors. (Ramleela) Court: High Court of Delhi Citation: W.P. (C) 6384/2013 Coram: Hon’ble Chief Justice and Justice Manmohan

Date: October 9, 2013 Facts: This petition was filed by the Petitioner organization seeking a ban on the film Ramleela. They contended that the expression Ramleela is understood by Hindus as enactment of the life and story of Lord Rama. The Petitioner contended that the film Ramleela had got nothing to do with the life of Lord Rama, the MaryadaPurshottam, but was filled with violence, sex and vulgarity. According to them the title of the film was a deliberate attempt to hurt the religious sentiments/religious feelings of Hindus at large. Ratio: The Court was of the opinion that no organization leave alone the petitioner could claim to be sole proprietor of names of Hindu Gods. Hinduism is a religion which promotes tolerance and catholicity of outlook. The admitted position was that the petitioner had not viewed the film Ramleela as it had not been commercially released. In any event, the effect of the words, title and scenes would have to be judged from the standards of a reasonable, strong minded, firm and courageous man and not from that of a weak and vacillating mind. The Court mentioned that previously in a Public Interest Litigation, some other individuals had challenged the title of another film Dhobi Ghat. This Court by a detailed order in Vinod Kumar Kanojia Vs. UOI &Ors. (in W.P.(C) No.6302/2010) after referring to the judgment of the Supreme Court in Ashok Kumar Pandey Vs. State of West Bengal, (2004) 3 SCC 349 had held that “the present litigation, styled as a public interest litigation, has been initiated just to satisfy one’s own egoism or megalomania. It is to be borne in mind that a public cause is required to be espoused in a public interest litigation. It must have some kind of nexus with the public interest.” The present litigation had only exhibited ostentatious proclivity of a personality who intended to occupy the centre stage as a protagonist harbouring the notion that the Court is a laboratory and he can come to play at his own whim and fancy. This is not permissible and not to be countenanced. The Court dismissed the petition with costs of Rs. 50,000/- to be paid by the Petitioner in the Delhi High Court Legal Services Committee. The Petitioner has filed a special leave petition in the Supreme Court [WP (CC) CC 6720/2014]

● Amit Kumar Sahu v/s CBFC and Ors (Ramleela) Court: Madhya Pradesh High Court Citation: W.P. No.20008/2013 Coram: Hon’ble Acting Chief Justice, Hon’ble Shri Justice Subhash Kakade,

Date: November 22, 2013 Facts: The petition was filed in relation to the exhibition of the film

namely ‘Goliyon-ki-Rasleela, Ram-Leela’. It was alleged that the film namely ‘ Ram-Leela’ had no concern with the contents of the name of the film and in fact the contents of the film were contrary to the established religious name called as ‘Ram-Leela’. It was contended by the petitioners that the word ‘Ram- Leela’ had no concern with the life sketch of Lord Shriram, instead the film is a social drama, inspired by William Shakespeare’s ‘Romeo & Juliet’. The contents of the film were against the sentiments of the Hindus who are crores in India. It was contended that the word ‘Ram- Leela’, in the title of the film, may be banned. The petitioner in M.C.C. No.1395/2013, Shri Anand Chawla had filed a writ petition, which was registered as W.P. No. 17779/2013 (PIL) and was finally disposed of by the Madhya Pradesh High Court on October 10, 2013 with a direction to the petitioner to approach the Censor Board for redressal of his grievance. Shri Anand Chawla had approached to the Central Board of Film Certification, Mumbai and the Central Board of Film Certification by an order dated November 8,


45

The Bombay High Court ruled that no monopoly can be claimed with respect to common expressions such as “Lai Bhari”

2013 had turned down the objection of the petitioner. Vide order dated November 14, 2013 an interim order was passed by which the Court had permitted exhibition of the film, but without the name in title of the film ‘Ram-Leela’.

Ratio: The Court held that under Section 5 C of the Cinematograph

Act, 1952 the petitioners could raise their grievance before the Appellate Tribunal by filing an appeal/ representation to the Board. The Court observed that as the matter of Anand Chawla had already been examined and turned down by the CBFC, it would be a futile exercise for the petitioner Mr. Amit Sahu to approach the Censor Board, however he may approach the Appellate Tribunal. The Petition was accordingly disposed of. The Respondent, Eros International Media Limited filed a special leave petition against the order of the Madhya Pradesh High Court, for which the Supreme Court was pleased to grant a stay order.

Similar petitions were filed in Bombay High Court1 and Allahabad High Court2 with respect to the film Ramleela In Warner Brothers Entertainment Inc & Anr v Harinder Kohli & Ors3 (2008), the Delhi High Court heard a case filed by Plaintiff who alleged that the film, Hari Puttar, infringed their trademark, Harry Potter. The court refused to stop the release of the film stating that even if there is any structural or phonetic similarity between the competing

marks, the real test to determine deceptive similarity is whether the target audience is able to discern the difference between the marks. In Sanjay B Haran v Big Pictures & Ors. [13 B - Fear Has a New Address]4 (2009), the Bombay High Court held that the registration of the title with the producers’ association and any rules of the association neither have any statutory force nor gives any proprietary rights to the Plaintiff in relation to the said title. In Fish Eye Network Pvt. Ltd. v Association of Motion Pictures and TV Program Producers & Ors. 5 (2011), the Bombay High Court dealt with a dispute regarding the use of the title, Thank You. The court observed that there is no copyright as such in a mere title of a film. The court allowed the Defendant to use the title stating that the Plaintiff had not acquired any goodwill or reputation in the title of the film while the Defendant had already spent a large amount on the making of the film. In the case, High Definition v Association of Motion Pictures and TV Program Producers & Ors.6 (2011), the Plaintiff challenged the

action and rules of the Association of Motion Pictures and TV Program Producers (AMPTPP). The Plaintiff had registered the title, Mausam, with AMPTPP, which subsequently allowed another party to use it for their film. The court held that rules of voluntary association could not be challenged before the court. (Please refer to Annexure 1(vi) for details of cases)

1

Sandeep Rammilan Shukla vs Kishore Lulla and Ors- WRIT PETITION (L) No. 2920/ 2013

4

Citation: Order in Notice of Motion No. of 2009 in Suit (L) No. 629 0f 2009

2

Nutan Thakur v/s Union of India and Ors WP-10845/2013

5

Citation: Order in Notice of Motion No.1885 of 2011 in Suit No.1422 OF 2011

3

Citation: 2008 (38) PTC 18 (Del)

6

Citation: Appeal No. 432 of 2011 in NMS/1973/2011 in S/505/2011


46

Role and Rule of Law Media & Entertainment Industry Films

04. Miscellaneous Disputes Relating to Film

A. TORT For the first time, a petition examining tortious wrong by banning a film resulting in losses has been entertained by the Supreme Court in respect of the film, Aarakshan. The release of the film was banned in three states: Punjab, Uttar Pradesh and Andhra Pradesh. Filmmaker Prakash Jha filed a petition filed under Article 32 of the Constitution before the Supreme Court and obtained an order against the states which had banned his film. Subsequently, he filed petitions in the three states claiming damages against the states on the basis of tort and misfeasance. While the high courts rejected the petitions, in a SLP preferred by Prakah Jha, the Supreme Court has issued notice to the states.

Facts of the case: Prakash Jha’s film, Aarakshan, starring Amitabh Bachchan, Saif Ali Khan and others was scheduled to be released in India on August 12, 2011. Three states; Uttar Pradesh, Punjab and Andhra Pradesh, on the basis of news reports, believed that the film was based on the sensitive subject of caste reservation and could disturb public law and order. The three states sought a pre-release screening and after viewing the film, suspended its screening for a certain period. Prakash Jha Productions challenged the suspension orders before the Supreme Court. Subsequent to filing of the petition, the states of Punjab and Andhra Pradesh revoked their suspension orders. However, the state of Uttar Pradesh had suggested deletion of some portion of the film, without which the film could not be screened. On August 19, 2012, Supreme Court quashed the decision of the Uttar Pradesh government suspending the screening of the film. Since the film lost its opening weekend, which is most crucial for its overall performance,

Prakash Jha filed petitions in these three states seeking exemplary damages suffered by him due to the imposition of ban on the film’s release. The Petitioner contended that the state is liable for tort and misfeasance since its has exercised public power affected by malice and knowing that such action would be unlawful and consequently causing severe harm, damage and loss to the Petitioners. The High Court of Punjab and Haryana and the Andhra Pradesh High Court dismissed the petitions claiming damages. The petition before the Allahabad High Court is still pending. Jha has simultaneously filed Special Leave Petition in this case against the orders of the division bench of the High Court of Punjab (SLP No. 26743/2012), and also sought a transfer of the case pending before the Allahabad High Court. On September 17, 2012, the Supreme Court observed that the Petitioners were not insisting on the quantum of damages as claimed but were seeking to claim damages on the basis of public law. The transfer petition is clubbed along with the SLP and the court has issued notice in the matter.

B. SCENES SHOWING SMOKING IN FILMS Background on the evolution of the legislation: Filmmakers and government officials have been unable to reach a consensus on the handling of scenes that show actors smoking on screen. The legal battle on the issue is ongoing. The Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003, prohibited advertisements of cigarettes and other tobacco products. The Central Government framed The Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Rules, 2004, to deal with such representation in films made in the past and future.


47

Important Case Laws: In 2006, four petitions challenging the complete ban on display of tobacco products in cinema and television programmes as per Rule 4 of the Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Rules, 2004, and the 2005 amendment were heard jointly by a division bench of the Delhi High Court.

● Mahesh Bhatt and Kasturi and Sons v Union of India and Anr.

product cannot be prohibited as it would bar a representation of how life is.” Thus the could held the restrictions to be outside the ambit of Article 19(2) of the Constitution and therefore Rule 4(6), 4(6A), 4(6B) & 4(8) are held to be ultra vires the parent Act as well as violative of Article 19(1)(a) of the Constitution and were accordingly struck down.

23716/2005 and 7410-11/2006

On February 17, 2009, Union of India filed an appeal in the Supreme Court1 challenging the decision of Justice Mukul Mudgal (dated February 7, 2008) and Justice Sanjay Kishan Kaul (dated January 23, 2009). The SLP is pending before the Supreme Court.

Coram: Mukul Mudgal and Sanjiv Khanna, JJ.

Second Amendment Rules, 2011:

Date: February 7, 2008

Ministry of Health and Family Welfare by a notification dated October 27, 2011, made amendments to the 2004 Rules which are now known as Second Amendment Rules, 2011. The following rules have been inserted:

Court: Delhi High Court Citation: 147(2008) DLT561/ Writ Petition (Civil) Nos. 18761 and

Facts: The Petitioners contended that the amended Rules violated free-

dom of speech and expression guaranteed under Article 19(1)(a) of the Constitution of India and were not protected under Article 19(2). The Petitioners further contented that if the amended Rules were upheld that would result in the stifling of the film, electronic and print media from expressing themselves and curtail their freedom to communicate, inform public and portray society as it exists.

Ratio: The division bench gave a dissenting judgment in the case: Justice Mukul Mudgal struck down Rule 4(6) and 4 (8) of the 2004 Rules. The judge held that, “In my view, none of the provisions of

Section 31 contemplates directly or indirectly the power to make rules in respect of television serials and films and, therefore, in my view, the plea of the petitioner that a blanket ban on production of films and television serial which show a smoking scene is ultra vires the rule making power under Section 31 of the Act appears to have substance.”

Justice Sanjiv Khanna upheld the validity of the Rules in its entirety. In view of the difference between the two judges of the division bench, the matters were placed before a third judge, Justice Sanjay Kishan Kaul.

● Mahesh Bhatt v Union of India and Anr. Court: Delhi High Court Citation: 156(2009)DLT725 Coram: Sanjay Kishan Kaul, J. Date: January 23, 2009 Ratio: The judge was in agreement with the view expressed by Justice

Mukul Mudgal. The judge observed that “A cinematographic film or a television serial depicts life in all its hues often adding spice to make it interesting. The fact remains is that in the absence of any ban on smoking, the act of smoking is seen though in restricted areas. To per se depict such an act without glamorizing it or promoting any particular

Rule 7: Health Spots and Scroll in Old Film and Television Programmes: whereby every manager of a theatre and/ or any broadcaster

shall mandatorily screen the following while the screening/ telecasting of an old Indian or foreign television programme which displays any tobacco product or its use: ► Minimum 30 seconds message of anti-tobacco health spots or messages at the beginning and middle of the film /television programme.

► A prominent scroll displaying an anti-tobacco health warning at the bottom of the screen.

Rule 8: Health Spots and Scroll in New Film and Television Programmes: whereby all the new Indian or foreign film and television

programmes displaying tobacco products or it use, were to have the following:

► A strong editorial justification explaining the necessity of such display to the censor board (for films) and Ministry of Information and Broadcasting (for television programmes). ► A ‘U/A’ certification in case of films from CBFC and necessary approvals from MIB for television programmes ► A disclaimer of minimum 20 seconds by the concerned actor regarding the ill effects of the use of such products in the beginning and middle of the film or television programme. ► Minimum 30 seconds message of anti-tobacco health spots or messages at the beginning and middle of the film /television programme. ► A prominent scroll displaying an anti-tobacco health warning at the bottom of the screen.

Filmmaker Mahesh Bhatt filed a writ petition in Delhi High 1

SLP Civil No. 8429-8431/ 2009


48

Role and Rule of Law Media & Entertainment Industry Films : Chapter 4 : Miscellaneous Disputes Relating to Film

Court1 challenging the Second Amendment Rules, 2011. The Delhi High Court has listed the matter for hearing in October 2012.

► Films showing use of tobacco products shall also be required to display an anti-tobacco health warning in the form of a static message during the period of display of the tobacco products or their use in the films.

● UTV Software Communications Pvt. Ltd. v Union of India and Ors

► The health ministry also agreed to drop the clause that necessitated ‘UA’ certification for films showing tobacco products or their use.

Court: Delhi High Court

In furtherance to the Notification G.S.R. 706 (E) dated 21st September, 2012 (“Said Notification”) issued by the Ministry of Health to revise the Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) (second amendment) Rules 2011 the below mentioned changes have been noted in the Media Industry in reference to the Scenes that have been showcased in Films.

Citation: WP (C) 5280/2012 Coram: Rajiv Shakdher, J Date: August 27, 2012 Facts: UTV filed a petition in the Delhi High Court challenging a letter

written by the Ministry of Information and Broadcasting (MIB) to the Central Board of Film Certification (CBFC). The letter stated that the MIB and the Ministry of Health and Family Welfare (MHFW) were in the process of modifying the October 27, 2011, notification. In the meantime, CBFC was requested to advise the film makers to ensure the following: i) A 20 second anti smoking message as approved by the MHFW with voiceover of one of the actors who is seen smoking in the film to be displayed at the beginning and in the middle (after interval) of the film. ii) A static anti-smoking message to be displayed for the duration of the smoking scene in the film.

Ratio: Justice Rajiv Shakdher issued notice to the MIB and health ministry and the CBFC and sought their responses by September 10, 2012.

On September 12, 2012, the court allowed the release of the film, Heroine, without the display of the static anti-smoking message. The court directed the CBFC to issue a certificate without the condition of displaying anti-smoking message during smoking scenes. The court held that, “It is prima facie not appropriate for Respondent Nos. 1 and 2 (ministries of I&B and health) to disturb the state of affairs in interregnum. This is specially so, as the measures put in place on November 29, 2011, appear to have worked well between December 2011 and March 2012.” Ending the year-long row over depiction of smoking scenes in films, the ministries of information and broadcasting and health reached a compromise in September 2012, with health disclaimers to be run before and during a film. In a statement issued in September 21, 2012, the Information and Broadcasting Ministry stated: ► Anti-tobacco health spots of minimum 30 seconds shall be shown at the beginning and middle of films, which have scenes displaying tobacco products or their use. ► An audio-visual disclaimer of minimum 20-second duration on the illeffects of tobacco use shall also be displayed at the beginning and middle of these films. ► The spots and disclaimers prepared by the health ministry will be provided to the Central Board of Film Certification.

The UTV Case was withdrawn by UTV as UTV had complied with the order dated September 10, 2012 passed by the Delhi HC and the movie was released. The Delhi High Court passed an order in the UTV case stating that the balance of convenience was in favour of UTV in view of the fact that it had invested huge sums of money based on what was perhaps according to it, the state of legal regime, in which, it was required to operate.

● Mahesh Bhatt v/s Union of India and Anr Court: Delhi High Court Citation: WP (C) 210/2013 Coram: JUSTICE V.K. JAIN Date: January 14, .2013 Facts: Mr. Mahesh Bhatt filed a Petition in the Delhi HC to challenge the 2012 Rules by way of a Writ Petition challenging the Power of the Health Ministry under Section 31 of the Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 to make rules qua certification and regulation of contents if Cinematograph Films and Television Programmes thereby encroaching upon the subject matter of the Cinematograph Act, 1952 and Cable Television Network Regulation Act, 1995.

Ratio: The Delhi HC however dismissed the said Petition.

● Mahesh Bhatt v/s Union of India and Anr Court: Supreme Court of India Citation: Special Leave Petition (Civil) 11916 Of 2013 Coram: BEFORE THE REGISTRAR SANJIV JAIN Date: February 25, 2014 Mr. Mahesh Bhatt filed a SLP in respect to the Rules of 2012. The Counsel for Mr. Bhatt stated the Delhi High Court has not gone into the ground raised by them and the Supreme Court held that the first respondent is free to challenge the Rules raising all the grounds permissible by way of filing a SLP.

Ratio: The said Petition will be heard with all the other Petitions pending in SC on the same issue.

● Anurag Kashyap & Ors v/s Union of India &Anr 1

WP (C) 1475/ 2012

Court: Bombay High Court


49

Citation: WPL/3286/2013 Coram: MOHIT S. SHAH, CJ and M.S. SANKLECHA, J. Date: May 7, 2014 Facts: Mr. Anurag Kashyap, Phantom Films Pvt. Ltd and Dar Media

Pvt. Ltd had filed a petition in the Bombay High Court challenging the constitutional validity of Rules 4(6), 4(7) and Rule 8 of the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Rules 2004 as amended in 2012. The basis of the challenge was that the same is ultra vires the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003. The principal contention of the Petitioner with respect to its film “Ugly” was that anti tobacco health warning as a prominent static message at the bottom of the screen during the period of display of the tobacco products would unnecessarily disturb the viewers attention and destroy the enjoyment of the movie as a piece of art. The counsel for the Respondent opposed the ad interim reliefs sought by the Petitioners on the ground that judgment of the Delhi High Court in Mahesh Bhat v/s U.O.I. & ors striking down the Rules came to be challenged before the Supreme Court and operation of the order of Delhi High Court has been stayed by order dated April 27, 2012 of the Supreme Court. The Respondent counsel

C. DEFAMATION OF PERSONS-LIVING OR DEAD In India, defamation is both a civil wrong and a criminal offence. However, truth published in public interest is a valid defence and the threshold of permissible intrusion into the lives of famous personalities is generally considered to be higher than that applicable to an ordinary individual.

Defamation of a living person: All individuals are guaranteed right to reputation under civil and criminal law and violation thereof amounts to defamation. In case gross misrepresentation is made of any facts or events regarding the life of the personality, an action for defamation, either a civil suit for damages or a criminal action, may be instituted. There is no copyright infringement if a living person is portrayed in a film. However, a film-maker undertaking such a project should be aware of a possible claim for infringement of privacy or for defamation by such a person who may feel the film has lowered his reputation in the eyes of others. This is why the credits of a film (other than a biographical study) usually purport to state that any resemblance of any character to a living person is entirely coincidental. One sure way to avoid the possibility of a defamation action is to collaborate with such person when making the film. Such collaboration should involve the agreement of those depicted in the film not to work with any other film-maker who is considering making a competing film. It is also advisable to acquire the exclusive rights to use any published auto/biography on which the portrayal is to be based, not only to avoid any copyright infringement, but also to avoid such material being available for use in any competitive project.

Defamation of a deceased person Under criminal law, defamation of a deceased person is regarded as a

further brought to the Court’s attention the order dated July 22, 2013 by the Supreme Court in Health for Millions v/s Union of India(Civil Appeal nos. 5912-5913 of 2013) wherein the Supreme Court had set aside the interim orders passed by the Bombay High Court in Writ Petition No.6151 of 2005 (Sridhar S. Kulkarni and others vs. Union of India) wherein the Supreme Court had specifically ordered that as a sequel to setting aside of the interim order passed by the High Court, the Central Government and the Governments of all the States shall be bound to rigorously implement the provisions of the 2003 Act and the 2004 Rules as amended from time to time.

Ratio: The Bombay High Court found substance in the submission made on behalf of the respondent authority that grant of any interim or ad-interim stay of the operation of Rule 4(7)(c) or Rule 8(1)(c) would come in the way of the Central Government and the State Government implementing the provisions of 2004 Rules as amended from time to time and such interim or ad-interim order cannot be passed. The Hon’ble Court however clarified that the order shall not come in the way of the petitioners making representation to the Central Government for modification/deletion of Rules 4(6), 4(7)(c) and Rule 8(1)(c) of the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Rules, 2004.

If some person speaks ill of the deceased person, his relatives can have a limited protection under law for such defamation. The law does not protect the deceased person himself, but the interests of the relatives of the deceased person. crime when its publication is, in truth, an attack upon the interests of living persons. Reputation of a deceased person is protected to a limited extent. If some person speaks ill of the deceased person, his relatives can have a limited protection under law for such defamation. The law does not protect the deceased person himself, but the interests of the relatives of the deceased person. Thus, criminal action for defamation of a deceased person can be filed by family members or near relative, if the defamatory article is hurtful to the feelings of his family or other near relatives (as per Explanation 1 to Section 499 of the Indian Penal Code, 1860). However the person filing the complaint must be an “aggrieved person”. To demonstrate that a person is an “aggrieved person”, he needs to prove injury to his legal rights. Merely showing hurt to feelings and sentiments of a person is not sufficient to prove that a person is an “aggrieved person”. No such action can be taken by strangers being part of bodies / associations / collective group of persons or even friends or followers of a particular sect to bring the law into motion for injury to their sentiments.


Role and Rule of Law Media & Entertainment Industry Films : Chapter 4 : Miscellaneous Disputes Relating to Film

50

Important Case Laws: ●

Paramjit Kaur and Ors. v Union of India (UOI) and Ors. [Bhagat Singh] Court: Punjab and Haryana High Court

Citation: Civil Writ Petition No. 8820 of 2002 Coram: VK Bali and KA Lall, JJ Date: July 2, 2003 Facts: The Petitioners were the relatives of martyr Bhagat Singh. They filed a petition to stop the screening of the film allegedly containing distorted versions of the life of Bhagat Singh. They further sought a stay on all the new films which were to be released based on the life of Bhagat Singh during the pendency of the petition. The alleged distortions, like a heroine being shown as Bhagat Singh’s fiancée, showing him as a turbaned Sikh, etc., were observed from the promotional campaigns of the films and various media reports. Ratio: The court dismissed the petition stating that film was certified

by the censor board, which consisted of historical experts and the objectionable scenes found in the films were already censored. The court observed that the distortions claimed by the Petitioners were based on the excerpts from various sources. The three films on which the ban was sought were full length movies and the same were not viewed by the Petitioners. The court held that, “The profit making or at least running the films without any loss, has to be the natural aim of story writers, producers or directors in making the films for public viewing and if while keeping intact the basic character of National Hero, some glamourisation or addition to the main events, which may not be derogatory or offending as such has been made, nothing wrong can be found with the same.” In Raghu Nath Pandey and anr. v Bobby Bedi and Ors1 , the descendants of Mangal Pandey filed a suit alleging defamation in respect of the film, Mangal Pandey – The Rising. The Delhi High Court held that the grievance of the descendants could be addressed by giving the following disclaimer at the end of the movie: “The character of Heera is fictionalised. There was no such Heera in the life of Mangal Pandey. Mangal Pandey died a bachelor.” In Bharatiya Minorities Suraksha Mahasangh and anr. v Balaji Motion Pictures and ors, 2 (2010) Sundar Shekhar, the adoptive son of Haji Mastan, filed a suit seeking permanent injunction against the release film, Once Upon A Time In Mumbai, and a preview screening. The court disposed of the application and allowed the release of the film in light of the disclaimer in the beginning of the film that this film has absolutely no resemblance with the life of the late Haji Mastan Mirza. In Vadlapadla Naga Vara Prasad v Chairperson, Central Board of Film Certification, Bharat Bhavan, Mumbai and others3 , the 1

Citation: 2006(89) DRJ40 / CS (OS) No. 1212/2005 and is No. 6787/200

2

Citation: Appeal from Order No. 813 of 2010 with Civil Application No. 1015 of 2010

3

Citation: Writ Petition No. 30376 of 2011

brother of the deceased south Indian actress Vadapatla Vijaya Lakshmi (aka Silk Smitha), filed a writ petition claiming that the film, The Dirty Picture, portrayed his sister in a defamatory and obscene manner. The Court observed that the said film was not a biopic or a fictional representation of the life of the Petitioner’s sister and therefore there is no violation of any right of privacy or reputation of the deceased actress or her family including the Petitioner.

● Hamdard National Foundation and Anr v/s Hussain Dalal and Ors (Yeh Jawaani Hai Deewani) Court: Delhi High Court Citation: CS (OS) No. 1225 of 2013 Court: Mr. Manmohan Singh,J Date: June 07, 2013 Facts: The Plaintiffs, proprietor of the trade mark “Roohafza” had filed this suit for infringement of trademark, passing off, commercial disparagement and tarnishment of goodwill and damages against the Defendants for releasing their film “Yeh Jawaani Hai Deewani” containing some dialogues showing their product “Roohafza” in a manner detrimental to the interests of the Plaintiffs as a proprietor. Ratio: The Court interpreted Section 29 (9) read with Section 2

(2) of the Trademarks Act, 1999 and held that the expression “use” under Section 29 (9) should be construed to include infringement by way of spoken words. What is an infringement is not merely visual representation of the product in the bad light under the provision of Section 29 (9) of the Act but it is the infringement of the trade mark if the same is caused by way of spoken use of the words and the visual representation of the said words. Thus, the provision of the Section 29 (9) further makes a statutory infringement of the registered trade mark if the same is caused by the spoken words. The Court held that the said offending dialogues in the film were uncalled for, in poor taste and could have been avoided. The same are likely to tarnish the reputation of the plaintiffs. The Court further observed that since the movie had already released in the theatre, protection could be accorded to the plaintiffs to prevent the future commission of the said acts by omitting the objectionable dialogues in other formats of the movie in which the same shall be made available to the public at the home. The Court thus directed the Defendants to restrain from releasing the home vide version of the film “Yeh Jawaani Hai Deewani” or any other version of the movie on cable television or television which contained the objectionable dialogue. The Court however clarified that the order was not applicable to the theatre version which had already released. The Defendants were agreeable to the permanent injunction order passed provided the plaintiffs did not press for costs and damages. The matter was accordingly disposed of on August 13, 2014.

● Akshaya Creations v/s Muthulakshmi Court: Madras High Court Citation: C.R.P (PD)Nos.3943 and 3944 of 2012


51

Coram: Mr. Justice R.S. Ramanathan, J

Citation: Arbitration Petition No. 387 Of 2009

Date: February 1, 2013

Coram: AV Mohta, J

Facts: The first respondent/plaintiff filed the above said suit for the re-

Date: August 6, 2009

lief of injunction, restraining the defendants from in any manner, exhibiting, releasing or exploiting the film named “Vana Udham” in Tamil and “Attakasa” in Kannada or in any other name, in any other language, portraying the life of the plaintiff, viz., the first respondent i.e. Muthulakshmi and her husband, late Veerappan, in any form, whatsoever. In the suit filed before the Learned VII Assistant Judge, City Civil Court Chennai passed an order granting injunction restraining the defendants, from exhibiting, releasing or exploiting the abovesaid two Films and also restrained the defendants from publishing any advertisement or giving interviews in Daily Newspapers, T.V. Channels or in any other media, in respect of the said films. In an appeal before the Learned IV Additional Judge, City Civil Court, Chennai, by a judgment dated 26.09.2012, set aside the order, dated 21.07.2012, passed by the VII Assistant Judge, and allowed both the Appeals and granted ad interim injunction, restraining the defendants from releasing or exploiting the abovesaid two films and also from publishing any advertisement or giving interviews in Daily Newspapers, T.V. Channels or in any other Media, in respect of the said films. Challenging the said judgment dated September 26, 2012 passed by the IV Additional Judge, the Appellants i.e. producers filed the present civil revision petition before the Madras High Court.

Ratio: The court relied on the Supreme Court decisions in (i) R. Ra-

jagopal and Anr vs State of Tamil Nadu [1994 (6) SCC 632] in which the Supreme Court had clarified that though every citizen had right to privacy under Article 21 of the Constitution, any information based on public records could be published by the press. The Court also made it clear that the State and its officials did not have any privacy rights (ii) R.Rajagopal & Anr. v. Jayalalitha & Sasikala[ (2006) 2 CTC 35] wherein the Court had held that public personalities cannot expect the same degree of privacy as ordinary people (iii) C.B.F.C. v. Yadavalaya Films [2007 (1) CTC 1] wherein the Court set aside the objections of the Censor Board and allowed the release of the film depicting the assassination of Rajiv Gandhi. Relying on these judgments and since the petitioner agreed to delete the marriage scenes between Veerapan and his wife (Respondent) , the court concluded as under: “Therefore, having regard to the law laid down by the Hon’ble Supreme Court in the aforesaid judgment, and having regard to the undertaking given by the learned Senior Counsel for the revision petitioners, that the revision petitioners would delete those scenes, as stated above, I am of the opinion that the right of privacy of the first respondent is in no way affected and there is no right of privacy available to the first respondent, as the Film is taken on the basis of the Police records and the first respondent has no cause of action, restraining the revision petitioners from exhibiting, exploiting the said Film.” Ms. Muthulakshmi thereafter filed a special leave petition before the Supreme Court against the Madras High Court order. However the matter was ultimately compromised between the parties. (Please refer to Annexure 1(vii) for details of cases)

D. DISPUTES FOR ENFORCEMENT OF

Facts: The Petitioner invoked Section 9 of the Arbitration & Conciliation Act, 1996, for various reliefs of injunction, protection against Respondents 1 to 3 on the foundation of arbitration clauses in various agreements confirming the liabilities and to make the payments by installments not later than June 30, 2009. The amount of Rs7. 25 crore was due as per the agreements. It was mutually settled and reduced to Rs 5.01 crore towards full and final settlement. The respondents failed to make the payment and all cheques, except one, bounced. Respondent No.3 has signed as a guarantor.

Ratio: The basic principle for grant of injunction/appointment of Receiver/attachment of property as contemplated under Code of Civil Procedure and as elaborated in Adhunik Steels Ltd. vs. Orissa Manganese and Minerals (P) Ltd., (2007) 7 SCC 125 was as follows: “It is true that Section 9 of the Act speaks of the court by way of an interim measure passing an order for protection, for the preservation, interim custody or sale of any goods, which are the subject matter of the arbitration agreement and such interim measure of protection as may appear to the court to be just and convenient. Moreover, when a party is given a right to approach an ordinary court of the country without providing a special procedure or a special set of rules in that behalf, the ordinary rules followed by that court would govern the exercise of power conferred by the Act. On that basis also, it is not possible to keep out the concept of balance of convenience, prima facie case, irreparable injury and the concept of just and convenient while passing interim measures under Section 9 of the Act.” The default on the part of the Respondents cannot be permitted to be utilised and to be used against the petitioner to deny his right of getting interim protection/measure/reliefs which are, otherwise available in the present case, on the basis of the basic elements of equity, balance of convenience and injury. The conduct of respondent by not paying the amount though settled and agreed is also an additional facet. The court directed the Respondents to furnish the security in the sum of Rs 5.01 crore subject to the adjustment of the amount, if already paid to secure the petitioners’ dues within ten weeks. Cases such as YT Entertainment Limited v Mrs Nasreen Azam Khan4 and Yash Tejpal Shah & Ors v M/s Shree Ashtavinayak Cine Vision Ltd. & Ors5 also dealt with enforcement of security interests in films.

(Refer to Annexure 1(viii) for details of cases)

E. PRINCIPLE OF DE MINIMUS NON CURAT LEX ● Saregama India Limited v/s Viacom 18 Motion Pictures and Ors (Special 26)

SECURITY INTEREST IN FILMS

Court: Calcutta High Court

Courts have entertained petitions regarding recovering security interests in films:

Citation: TA. No. 29 of 2013 with T. No. 62 of 2013

YT Entertainment Limited v One More Thought Entertainment Pvt. Ltd.

4

Citation: Arbitration Petition No. 778 of 2010

Court: Bombay High Court

5

Citation: Chamber Summons No.866 of 2012 in Execution Application (L) No.1207 of 2012 In Award dated October 29, 2011


Role and Rule of Law Media & Entertainment Industry Films : Chapter 4 : Miscellaneous Disputes Relating to Film

52

Coram: I.P. Mukherji, J Date: March 1, 2013 Facts: The Plaintiff Saregama filed the suit against Viacom Motion Pictures and Ors on the grounds that its film ‘Special 26’, which was released in theatres on February 8, 2013 had infringed the Plaintiff’s copyright in the lyrics and music of the song ‘Mere Sapno Ki Rani’ (Queen of my dreams), which featured in the film Aaradhana. ‘Special 26’ had a scene where one of the lead actors Anupam Kher, uttered about 4-5 words from ‘Mere Sapno Ki Rani’, over a period of less than 7 seconds. Ratio: The Court denied Saregama relief, in this lawsuit on the

grounds that first, there was no infringement in the music since the words were not narrated in the particular melody of the original; second, there was no originality in just the words ‘Mere Sapno Ki Rani’ (The Romeos of India have long claimed ownership of those words) and third, the use of less than 7 seconds was de minimis and not worthy of a legal claim. For the last proposition, the judge relied on the judgment of the Delhi High Court in the case of India TV Independent News Service Private Limited & Others v. Yashraj Films Private Limited [FAO(OS) 583/2011]. The Learned Judge further observed “Let us assume that the rendition of those four words was infringement of the plaintiff’s copyright in the lyrics. It has no impact, no effect and causes no loss to anybody. It is trifling. It is minimal.”The application was accordingly disposed of.

Compliance Checklist Before a film can be exhibited to the public, the film producer has to comply with the following:

1

Central Board of Film Certification (CBFC) Guidelines: In India, films can be publically exhibited only after they have been certified by the CBFC. The CBFC follows guidelines issued by the Central government while certifying the films for public exhibition. These guidelines prohibit scenes showing involvement of children in viole nce, showing cruelty or abuse to animals, encouraging consumption of alcohol, drugs or tobacco products, degrading women, obscene and vulgar scenes, etc.

2

Cinematograph Act, 1952: The CBFC, while certifying any film for public exhibition, adheres to the principles laid down by the Cinematograph Act. These principles state that a film shall not be certified if it is against the interest of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or involves defamation or contempt of court or is likely to incite commission of any offence.

3

The Flag Code, 2002, The Emblems and Names (Prevention of Improper Use) Act, 1950 and The Prevention of Insults to National Honour Act, 1971: The display of the National Flag, usage of any name or emblem specified in the Schedule (eg. Ashoka Chakra, Dharma Chakra, etc) must be in accordance with the law.

4

Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) [Second Amendment Rules] 2011: Film makers shall ensure that anti-smoking messages as required by the law are displayed for the required duration and at the required intervals.

5

Depiction of pre-natal diagnosis to determine sex of an unborn child is prohibited.

6

Animal Welfare Laws – If the film involves performing animals, the producer will have to obtain a no-objection certificate from the Animal Welfare Board of India (AWBI). Further, under the Cinematograph (Certification) Rules, 1983, the producer has to make a declaration that no cruelty has been caused to any animals during the shooting. In People for Ethical Treatment of Animals (PETA) vs Union of India & Ors (PIL (Lodging) No. 2490 of 2004), the court held that the AWBI certificate shall be filed with the application made to the CBFC for certification of a film for public exhibition. The court further directed that the AWBI shall grant such a certificate within two weeks of the submission of an application.


Role and Rule of Law Media & Entertainment Industry Films

53

05. CERTIFICATION OF FILMS

A.

OVERVIEW OF THE CINEMATOGRAPH ACT, 1952 AND THE CINEMATOGRAPH (CERTIFICATION) RULES, 1983 Dadasaheb Phalke, the father of Indian cinema, released his feature film, Raja Harishchandra, on May 3, 1913. Thereafter, a few enterprising Indians also attempted to make films and a need was felt to regulate the exhibition of films, their certification as suitable for public exhibition and regulation of cinema including their licensing. As a result the Cinematograph Act, 1918, was passed by the Legislature which remained in force till 1952. The Act of 1918 was amended in 1949 but it was felt that exhaustive provisions may be made to meet the requirements of the changed circumstances after independence of the country. The Cinematograph Bill having been passed by both the Houses of Parliament received the assent of the President on March 21, 1952. ► Section 8 of the Cinematograph Act empowers the Central Government to make rules to give effect to the provisions of the Cinematograph Act. Thus, the Central Government has made the Cinematograph (Certification) Rules, 1983 (Rules). ► The Rules provide for term of office of the members of the Central Board of Film Certification (CBFC), the duties of the CBFC, terms and conditions of service, meetings, etc. The Rules further provide for procedure of application for examination of films, the procedure followed by Examining Committee and Revising Committee. ► Rule 29 of the Rules provides that a certificate granted by the CBFC in respect of a film shall be valid for a period of 10 years from the date on which the certificate is granted. ► Rule 35 provides for the type of certificates and state that a certificate authorising the public exhibition of a film shall be in one of the forms set out in the second schedule according as the film is fit for U, or U/A or A or S or U or V/A or V/UA or V/S certificate as the case may be.

B.

ROLE AND CONSTITUTION OF CENTRAL BOARD OF FILM CERTIFICATION ► Section 3 of the Cinematograph Act provides that for the purpose of sanctioning films for public exhibition, the Central Government may constitute a board to be called the Board of Film Certification (CBFC). Accordingly, CBFC was constituted under the Cinematograph Act. The Cinematograph Act provides that CBFC shall constitute of not less than 12 and not more than 25 other members appointed by the Central Government.

C.

CERTIFICATION OF FILMS - PROCEDURE AND PRINCIPLES GOVERNING CERTIFICATION The Cinematograph Act, 1952 read with the Cinematograph (Certification) Rules, 1983, and the guidelines issued by the Central government u/s 5 (B) of the Cinematograph Act prescribes the following procedure for certification of films:

Examination of films: A person desirous to exhibit any film is re-

quired to make an application to the CBFC for grant of certificate. The CBFC, after examining the film may, in the prescribed manner sanction the film for exhibition in any of the categories prescribed under the Cinematograph Act or may direct the Applicant to carry out such cuts or modifications in the film as it thinks necessary before sanctioning the film for public exhibition or may refuse to sanction the film for public exhibition.

Certification of films - After examining a film, the CBFC may grant the following certifications: U: The film is suitable for unrestricted public exhibition UA: The film is suitable for unrestricted public exhibition with an en-

dorsement of caution that parental discretion is required for children below 12 years.


54

Role and Rule of Law Media & Entertainment Industry Films : Chapter 5 : CERTIFICATION OF FILMS

A: The film is not suitable for unrestricted public exhibition, but is suitable for public exhibition restricted to adults.

S: The film is suitable for public exhibition restricted to members of any profession or any class of persons.

Principles for guidance in certifying films – The CBFC may

refuse to grant certification to a film if in its opinion the film or any part of it is against the interest of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality, or involves defamation or contempt of court or is likely to incite the commission of any offence [Section 5-B]. The Central Government has directed that in sanctioning films for public exhibition, the CBFC shall be guided by the Guidelines.1

D.

PROCEDURE TO CHALLENGE FILM CERTIFICATION ► Appeals - Any person applying for a certificate in respect of a film who is aggrieved by any order of the CBFC refusing to grant a certificate; or granting only an A/S/UA or directing the applicant to carry out any excisions or modifications, may, within 30 days from the date of such order, prefer an appeal to the Film Certification Appellate Tribunal 1 CBFC Guidelines are available on: http://cbfcindia.gov.in/html/uniquepage. aspx?unique_page_id=1

(FCAT) [Section 5C]. ► Suspension and revocation of certificate- The Central Government may by notification suspend the certificate granted by the CBFC for such period it thinks fit or may revoke such certificate if it is satisfied that (i) The film in respect of which the certificate was granted, was being exhibited in a form other than the one in which it was certified, or (ii) The film or any part thereof it being exhibited in contravention of the provisions of this part rules made there under [Section 5E] ► Powers of review and revision of the Central Government- An applicant for a certificate or any other person to whom the rights in the film have passed who is aggrieved by any order of the Central Government under Section 5-E may, within 60 days of the date of publication of the notification in the Official Gazette, make an application to the Central Government for review of the order, setting out in such application the grounds on which he considers such review to be necessary [Section 5F] The Central Government may, of its own motion, at any stage call for the record of any proceeding in relation to any film which is pending before, or has been decided by the CBFC/ FCAT (but not including any proceeding in respect of any matter which is pending before the Tribunal) and after such inquiry into the matter as it considers necessary, make such order in relation thereto as it thinks fit, and the Board shall dispose of the matter in conformity with such order [Section 6].

Important Case Laws:

E. LITIGATION PERTAINING TO EXHIBITION OF

FILMS POST CERTIFICATION

● KA Abbas v Union of India and Anr.

July 3, 1969, should be quashed. The petitioner claimed that his fundamental right to free speech and expression was denied by the order of the Central Government and that he was entitled to a ‘U’ Certificate for the film as a matter of right.

Citation: 1970 (2) SCC 780

Ratio: The court held that Central Government is authorised to issue directions as it may think fit setting out principles which shall guide authority competent to grant certificates under Act in sanctioning films for public exhibition.

Coram: M Hidayatullah, AN Ray, CA Vaidyialingam, GK Mitter and JM Shelat, JJ.

With regard to the power of pre-censorship, Chief Justice Hidayatullah observed:

Date: September 24, 1970

“The task of the censor is extremely delicate.....The standards that we set out for our censors must make a substantial allowance in favour of freedom thus leaving a vast area for creative art to interpret life and society with some of its foibles along with what is good. We must not look upon such human relationships as banned in toto and forever from human thought and must give scope for talent to put them before society. The requirements of art and literature include within themselves a comprehensive, view of social life and not only in its ideal form and the line is to be drawn where the average man moral man begins to feel embarrassed or disgusted at a naked portrayal of life without the redeeming touch of art or genius of social value. If the depraved begins to see in these things more than what an average person would, in much the same way as it is wrongly said, a Frenchman sees a woman’s legs in everything, it cannot be helped. In our scheme of things ideas having redeeming social or artistic value must also have importance and protection for their growth.”

Court: Supreme Court of India

Facts: The petitioner had made a documentary film, A Tale of Four Cities, which attempted to portray the contrast between the life of the rich and the poor in the four principal cities of the country. The film included certain shots of the red light district in Bombay. Although the petitioner applied to the CBFC for a `U’ Certificate for unrestricted exhibition of the film, he was granted an ‘A’ certificate for exhibition restricted to adults. On an appeal made by the petitioner, the Central Government issued a direction on July 3, 1969, that a `U’ Certificate may be granted provided certain specified cuts were made in the film. The petitioner thereafter approached the Supreme Court seeking a declaration that the provisions of Part 11 of the Cinematograph Act, 1952, together with the rules prescribed by the Central Government on February 6, 1960, in exercise of its powers under Section 5-B of the Act were unconstitutional and void. He further prayed that the direction dated


55

In 1979, the Supreme Court while hearing the case Raj Kapoor v Laxman1 , held that once a film had been granted a certificate for public exhibition by the censor board, the public exhibition, circulation or distribution or the production of the film, even if it be obscene, lascivious or tending to deprave or corrupt public morals, cannot be an offence.

● S Rangarajan v P Jagjivan Ram & Ors. Court: Supreme Court of India Citation: (1989) 2 SCC 574 Coram: KJ Shetty, KN Singh and Kuldip Singh, JJ Date: March 30, 1989 Facts: The Plaintiff had produced a Tamil film, Ore Oru Gramathile,

and applied for certificate for exhibition. The examination committee refused to grant the certificate but on a reference being made for review, a ‘U’ certificate was granted subject to deletion of certain scenes. The grant of ‘U’ certificate was challenged on the ground that the film projected the government’s reservation policy in a biased manner and would create a law and order problem in Tamil Nadu. A single judge dismissed the petitions. But upon appeal they were allowed and the ‘U’ certificate was revoked. Thereby, the producer filed a Special Leave Petition before the Supreme Court.

pa2 , the Supreme Court held that when the government has chosen to

establish a quasi judicial body which has been given power to decide the effect on public, the decision of such body will be final and binding so far as the executive and government is concerned. The Supreme Court said that to permit the government to review or revise a decision made by such body would amount to interference and such interference is not warranted.

● M/s. Prakash Jha Productions & Anr. v Union of India & Ors. Court: Supreme Court of India Citation: WP. Civil No. 345 of 2011 Coram: Mukundakam Sharma and Anil R. Dave, JJ Date: August 19, 2011 Facts: The Petitioner challenged the ban imposed by the states of Uttar Pradesh, Andhra Pradesh and Punjab on the release of the film, Aarakshan, in their respective states on the grounds that it could lead to a law and order problem. The states of Punjab and Andhra Pradesh lifted the imposition of ban within two days of the release of the film hence with respect to these two states the petition was rendered infructuous. The contentions raised by the Petitioners were: a)

Ratio: The Court while allowing the Special Leave Petition and reversing the judgment of the high court observed:

“The democracy is a government by the people via open discussion. The democratic form of a government itself demands its citizens an active and intelligent participation in the affairs of the community. The public discussion with people’s participation is a basic feature and a rational process of democracy which distinguishes it from all other forms of government. The democracy can neither work nor prosper unless people go out to share their views. The truth is that public discussion on issues relating to administration has positive value.” “Movie is the legitimate and the most important medium in which issues of general concern can be treated. The producer may project his own message which the others may not approve of. But, he has right to ‘think out’ and put counter appeals to reason. It is part of democratic giveand-take to which no one could complain. The State cannot prevent open discussion and open expression, however hateful to its policies.” “We want to put the anguished question, what good is the protection of freedom of expression if the State does not take care to protect it? If the film is unobjectionable and cannot constitutionally be restricted under Article 19(2), freedom of expression cannot be sup- pressed on account of threat of demonstration and processions or threats of violence. That would tantamount to negation of the rule of law and surrender to black mail and intimidation. It is the duty of the State to protect the freedom of expression since it is a liberty guaranteed against the State. The State cannot plead its inability to handle the hostile audience problem. It is its obligatory duty to prevent it and protect the freedom of expression.” “Open criticism of Government policies and operations is not a ground for restricting expression. We must practice tolerance to the views of others. Intolerance is as much dangerous to democracy as to the person himself.”

● In 2000, while hearing the case, Union of India v KM Shankarap1

Citation: AIR1980SC605

The power of suspension of screening of the film exercised by state governments amounted to exercising the power of precensorship which was not vested with the state governments. The power of pre-censorship is vested only in the Central Board of Film Certification.

b) Further, the power which was exercised by the state government was also without jurisdiction as such power could be only exercised when a film was being publicly exhibited or was shown in cinema theatres.

Ratio: The Supreme Court while setting aside and quashing the decision of the State Government suspending the screening of the film in Uttar Pradesh observed as under:

► The provisions of Section 6(1) of the U.P. Cinemas (Regulation) Act make it clear that the power vested with the state government could only be exercised after the film was publicly exhibited and was likely to cause breach of peace and tranquility. Only in such circumstance and event an order could be passed suspending the exhibition of the film. Therefore, such power could not have been exercised by the State of Uttar Pradesh in view of the fact that the said film was not being exhibited publicly in the cinema theatres in Uttar Pradesh. ► The Supreme Court strongly relied upon the case of S Rangarajan and stated that in a democracy it is not necessary that everyone should sing the same song. Freedom of speech and expression as enumerated in Article 19 of the Constitution is a rule and it is generally taken for granted. ► Relying on the KM Shankarappa’s case, the court stated that once the public body (CBFC) has considered the impact of the film on the public and has cleared the film, it is no excuse to say for state government that there may be a law and order situation and it is for the government concerned to see that the law and order situation is maintained. Therefore once the Board has cleared the film for public viewing, screening of the same cannot be prohibited in the manner as sought to be done by the state government in the present case.

2

Citation: AIR1980SC605


56

Role and Rule of Law Media & Entertainment Industry Films : Chapter 5 : CERTIFICATION OF FILMS

Hindu Dharma Sakthi vs Government of India Court: Madras High Court Citation: WP No. 19668/ 2014 Coram: Justice B Rajendran Date: July 23, 2014 Facts: The petitioner ‘Hindu Dharma Sakthi’, alleged that the Tamil

movie Sorgam Yen Kaiyel, a film dubbed from Kannada portrays “Hindu sanyasis” as indulging in deceitful and immoral activities and hurts the religious sentiments of Hindus. The petitioner further submitted that the Censor Board in Karnataka had through its order dated July 30, 2012 held that the movie was not fit to be released for public viewing. Hence, the producer was now trying to release the Tamil dubbing of the film in Tamil Nadu, the petitioner contended. The petitioner further submitted that under section 5B(1) of the Cinematograph Act 1952, a film shall not be certified for public exhibition by the competent authority, if the film, or any part of it, is against public order, decency or morality. Hence he sought a direction to the Information and Broadcasting Ministry and the Central Board of Film Certification, Chennai to revoke the censor certificate for public exhibition issued to the film.

Ratio: The Court ordered issue of a notice to Information and Broad-

casting Ministry and the Central Board of Film Certification, Chennai. The matter is pending before the Madras High Court.

Jamiat Ulama- E- Maharashtra vs Regional Officer (Mumbai) Central Board of Film Certification & Ors (Ya Rab) Court: Bombay High Court Citation: PIL (L) 12 of 2014 Coram: Mohit Shah, C.J & M.S. Sanklecha, J. Date: February 6, 2014. Facts: This Public Interest Litigation (PIL) was filed by the petitioner

challenging the certification of the Hindi Film “Ya Rab”. The Examination Committee on July 1, 2013 had a detailed discussion on the theme, treatment and the presentation of the said film in accordance with the guidelines issued under Section 5B(2) of the Cinematograph Act, 1952 and made final recommendation to refer the film to the Revising Committee. The Revising Committee further examined the film on 5th July, 2013 and made a final recommendation to make nine deletions and granted ‘A with Cut’ certificate for the said film. The producer of the said film, being aggrieved by the 5th July order, filed an appeal to the Tribunal. On the basis of the Tribunal order, the CBFC issued a U/A certificate dated 7th January, 2014 for the said film. The Petitioner contended that the film is based on terrorism and that the Tribunal had permitted respondent No.3 to exhibit the film without any cut or modification as suggested by the Revising Committee and that the objectionable scene in the film would create disharmony in the society. The Petitioner further contended that the film shows Muslim community in a bad light and would create a wedge between the different communities who are presently living in peace and harmony.

Ratio: The court stated in its order that the Learned Counsel for re-

spondent no. 3 produced the certificate which showed that the Tribunal has upheld four deletions while setting aside five deletions made by the Revising Committee. It also held that the disclaimers have already been

inserted at the beginning of the said film. Further the Court held that the petitioner had filed this petition through its Secretary who affirmed the verification in support of the petition, however, he himself had not seen the film. The memo of the petition also did not contain any material as dialogues and/or descriptions of scenes which according to the petitioner were objectionable. Thus the court could not accede to the prayer of the Petitioners to grant an ad-interim stay against the release of the said film. The matter is pending before the Bombay High Court.

C. Ezhilrazu v/s CBFC & Ors (Madras Cafe) Court: Madras High Court (Madurai Bench) Citation: WP (MD) No. 13512 of 2013 Coram: S. Manikumar, J Date: August 16, 2013 Facts: The Writ petition was filed for issuance of a writ of mandamus

to direct the respondents not to release the film “Madras Cafe” in its present form as cleared by the CBFC instead, the offending portions of the film were prayed be re-censored jointly by the Union of India and the Government of Tamil Nadu taking into consideration Tamil sentiments and moral values based on the representation of the Petitioner.

Ratio: The Court held that writ petition cannot be entertained on the premise that there is going to be likelihood of law and order problem in near future. No evidence was produced to establish that the Sri Lankan Govt had financed the film “Madras Cafe”. Merely because some complaints have been lodged, it cannot be considered that there is a likelihood of law and order problem, if the film is released. The Govt of Tamil Nadu and the law enforcing authorities concerned are bound to take appropriate steps. The apprehension that there is a likelihood of law and order problem is not sufficient ground for restricting the release of a movie. The Writ Petition was accordingly dismissed. Similar writ petition was filed by B. Stalin v/s CBFC and Ors pertaining to the film “Madras Cafe” before the Madurai bench of the Madras Cafe. The Court refused to entertain the plea of the petitioner and disposed of the petition.

Sushil Kumar Mishra v/s Union of India (Singham Returns) Court: Allahabad High Court Citation: PIL No. 42495 of 2014 Coram: Hon’ble Dr. Dhananjaya Yeshwant Chandrachud, Chief Justice and Hon’ble Dilip Gupta, J.

Date: August 14, 2014 Facts: The petitioner sought a writ of mandamus for the deletion of an objectionable dialogue and scene in the cinematographic film “Singham Returns” viz “Main Tera Do Kaudi Ka Pravachan Sunne Nahi Aaya Hu” and an order to restrain the release of the film which was slated to be released on 15 August 2014. According to the petitioner, the word “Pravachan” is a Hindu religious discourse and by attributing the adjectives “Do Kaudi” to a religious discourse by a Hindu saint, the film lowers respect for the religion. The Respondents filed a counter affidavit to the effect that the CBFC had suggested certain cuts which included removal of the word “Pravachan” as well as removal of the expression “Do Kaudi” which the Respondent had complied with and therefore the objectionable words were no longer a part of the dialogue. Ratio: The Court held that the clarification in the counter affidavit met


57

the grievance of the petitioner and the film was duly certified under the Cinematograph Act. The Court further held that the petition essentially was based on an isolated dialogue which was picked out from the film. No literary work can be accessed on the basis of an isolated sentence. The use of language and expression has to be understood in the context of the theme of a literary work. Reading out of context a dialogue in a film or a sentence in a book, cannot be used as a basis for striking down the publication of the book or exhibition of a film or for that matter for questioning the legality of a certificate which has been granted, as in the present case by the Board. If such an exercise is to be made permissible, freedom of speech and expression, which is one of most precious rights of every citizen of India, would be at the mercy of such objections. Film makers and the artists must have a broad field of creativity protected by the Constitution, a creativity which is not circumscribed by such objections. The Court further observed that “it has now become a common practice for injunction applications to be moved before the Court on the eve of the release of a cinematographic film. Promos and trailers receive wide publicity well in advance. The content and the theme of the film is widely publicised in newspapers and journals. The Courts under Article 226 of the Constitution must be careful in entertaining requests for granting a stay at such a belated stage. Arrangements are made for the distribution of the film well in advance, particularly in today’s context where the distribution of films in a digitised format takes place in different territories across the world at or about the same time. Any interference by the Court is liable to seriously damage the production of the film and to destroy the legitimate expectation of the artists and of those who have contributed to the making of the film”.

The Court held that the petition was based on a perceived insult to religion merely on the basis of a stray sentence in the film. The producer of the film who had appeared before the Court had submitted that looking at the film in its entirety, it would be apparent that there is not even a remote insult to a religion since the main proponent of the film is an investigating officer, who is but discharging his duties as an officer. The Court accordingly dismissed the writ petition. Tidbit: The Film “Vishwaroopam/ Vishwaroop”, produced by Raj Kamal Films International was duly certified by the CBFC and was scheduled to be released on January 25, 2013. The film had received censorship in Islamic countries including Malaysia and Qatar. However, one day prior to the release of the film, there was a ban order by the District Collectors of 31 districts invoking Section 144 of the Code of Criminal Procedure banning the release of the film in the state of Tamil Nadu. The District Collectors had passed the orders upon complaints from certain Muslim organizations. While the single bench of the Madras High Court has passed an interim stay on the operation of the order made under Section 144 of the CrPC and allowed the release of the film, the division bench of the Madras High Court set aside the single bench’s order. The matter was ultimately amicably resolved between the producers of the film and the Muslim Organizations, pursuant to which all district collectors in the state withdrew the orders earlier passed under Section 144 of CrPC, suspending the exhibition of the film, thereby paving the way for the peaceful release of the film in Tamil Nadu.

(Refer to Annexure 1(ix) for details of cases)

While dismissing a petition filed against a dialogue in the film Singham Returns, the Allahabad High Court held that the Courts under Article 226 of the Constitution must be careful in entertaining requests for granting a stay on the eve of the release of a film.

F. CERTIFICATION OF FILMS FOR VIDEO FILMS

AND SATELLITE EXPLOITATION

nels. However, the Ministry of Information and Broadcasting directed that despite being certified as ‘U/A’, the said film should be exhibited on satellite channel only after 11 pm and not during prime time.

However explanation to Rule 21 (Application for examination of films) of the Cinematograph (Certification) Rules, 1983, provides that “For the purpose of certification for public exhibition every revised version or shorter version of a film shall be deemed to be a fresh film.”

Similarly, other films certified as ‘A’ for theatrical exhibition such as, Jannat 2, were sought to be given ‘U/A’ certification for satellite exhibition subject to the rider/condition that the film would be telecast post 11 pm only. The producers of Jannat 2, fearing a loss of revenue in satellite rights, challenged the CBFC’s guidelines before the Film Certification Appellate Tribunal (FCAT). The FCAT ruled in favour of the production house (Vishesh Films) and directed CBFC that it could not decide the slotting of films on TV. This led the CBFC to declare that they would not recertify ‘A’ rated films.

Recently, there have been several controversies regarding certifying a film for public exhibition on satellite channels. The film, The Dirty Picture, which was certified as an ‘A’ film for theatrical exhibition was resubmitted by the producers with edits and cuts for re-certification. The CBFC certified the edited film as ‘U/A’ for exhibition on satellite chan-

The decision of the CBFC led to an uproar in the film industry due to which the Ministry of Information and Broadcasting stepped in to resolve the deadlock by asking CBFC to continue pruning films for the small screen until suitable amendments are made in the Cable Television Act.

The Cinematograph Act and Cinematograph Rules do not have a separate provision for recertification of films for satellite (television) viewing. Rule 35 of the Cinematograph Rules and Form V-A of the Cinematograph Rules provide for separate certification for video films.


58

Role and Rule of Law Media & Entertainment Industry Films : Chapter 5 : CERTIFICATION OF FILMS

Important Case Laws: In the case, Video Master v Union of India & Ors.1 , the Bombay High Court observed: “The main question involved in these writ petitions, is as to whether only because a video copy of an already certified movie is prepared from the celluloid film, a re-examination and recertification of video copy of the film is necessary. It is an admitted position that a duplicate true copy of the duly certified celluloid film does not require any re-certification. If the celluloid copy of the certified film does not require re-examination or re-certification then in our view only because it is a duplicate copy on video tape it cannot be treated on a different footing. Rule 21 of the Rules prescribes a form of application for examination of the film. Explanation to the said rule clarifies the position by saying that for the purpose of certification for public exhibition, every revised version or shorter version of a film shall be deemed to be a fresh film. Therefore if the video copy of the film is either a revised version or shorter version of the original film, then obviously it will be deemed to be a fresh film…..” Therefore an ‘A’ certified film when edited and altered to suit the requirements of unrestricted public exhibition is applied for re-certification, the same is to be construed to be a fresh film and the CBFC cannot decline certification of the same.

Pratibha Nathani v Union of India & Ors Court: Bombay High Court

Citation: (Public Interest Litigation No. 1232 OF 2004). Coram: RM Lodha and SA Bobde, JJ. Dated: August 23, 2006 Facts: The two issues that were debated in this matter were: (i) Are

the broadcasters (foreign or otherwise) and the DTH service providers amenable to the provisions of Cable Television Networks (Regulation) Act, 1995 and the Rules framed there under and thereby bound by the Programme Code and the order dated 21st December, 2005; and (ii) Does the order dated December 21, 2005, restrict the exhibition of the films certified ‘U/A’ by the CBFC.

Ratio: The court held that Direct to Home (DTH) service providers are bound to follow the Programme and Advertising Code and consequently, the order dated December 21, 2005, binds them too. The court clarified that the films carrying ‘U’ and ‘U/A’ belong to the same class of films i.e. for unrestricted public exhibition. The court held that a film certified for ‘U/A’ does not cease to be a film sanctioned by the Board for unrestricted public exhibition and hence the films carrying certificate ‘U’ and ‘U/A’ belong to the same class of films viz., for unrestricted public exhibition.

Citation: AIR 2006 Bom 259

It was therefore clarified that the order dated December 21, 2005, did not restrict exhibition of films certified as ‘U’ or ‘U/A’ or ‘V’ or ‘V/UA’.

Coram: RM Lodha and DG Karnik, JJ

(Refer to Annexure 1(x) for case details)

Date: December 21, 2005

Note: It is pertinent to note that the Cable TV Act does not prescribe

Facts: The issue in this case pertained to the telecast of adult films

through cable service. The moot question was whether the cable operators/cable service providers were free to telecast the films certified by CBFC as “adult” films despite the restriction in clause (o) of Rule 6(1) that no programme shall be carried in cable service which is unsuitable for unrestricted public exhibition.

Ratio: The court directed cable operators not to broadcast any film with an ‘A’ certificate on television channels. It held that the fundamental rights guaranteed by Article 19(1) can be subjected to reasonable restrictions. Accordingly, if the law authorises restriction in carrying in cable service a programme which is not suitable for unrestricted public exhibition, there is nothing wrong in it. The adult viewer’s right to view the film of adult content is not taken away by Clause (o) of Rule 6(1). Such viewer can always view the adult certified film in cinema hall. He can view such film on his private TV set by means of DVD, VCD or such other mode for which no restriction exists in law. Similarly, by putting restriction upon the cable operator and the cable service provider that no programme should be carried in the cable service which is not suitable for unrestricted public exhibition, it cannot be said that such restriction violates their right to carry trade and business. Pratibha Nathani v Union of India Court: Bombay High Court 1

Citation: AIR 1986 Bom 428

any time slot for showing ‘U/A’ certified films. Rule 6(5) of the Cable TV rules provide that “Programmes unsuitable for children must not be carried in the cable service at times when the largest numbers of children are viewing”.

The Self Regulatory Guidelines prescribed by the Indian Broadcasting Federation (IBF) provide that the category “Generally Accessible” (G) i.e. programmes which are suitable for unrestricted viewing by all viewers and/or under Parental Guidance‟ can be scheduled for telecast at all times. Only such content which falls under the Category “Restricted Access” (R) programmes which may not be suitable for children and young viewers should be scheduled between 11 pm to 5 am.” If a film is granted ‘V/UA’ certification by CBFC, it will fall within the category “Generally Accessible - G” prescribed by IBF under the Guidelines hence would be suitable to be scheduled at all times. This is further supported by the judgment in the Pratibha Nathani case cited above where the Bombay High Court clarified that the films carrying certificate ‘U’ and ‘U/A’ belong to the same class of films viz., for unrestricted public exhibition. It is therefore reasonable that if there is no restriction on telecast time for ‘U’ certified films, there should be no restriction for telecast time of ‘U/A’ certified films also. TIDBITS:

► In a petition filed in the Supreme Court by the All India Human Rights and Social Justice Front to ban the release


59

Role and Rule of Law Media & Entertainment Industry Films : Chapter 5 : CERTIFICATION OF FILMS

once the censor board has cleared A film, the state cannot ban its release fearing a law and order problem


60

Role and Rule of Law Media & Entertainment Industry Films : Chapter 5 : CERTIFICATION OF FILMS

the anti-tobacco health warning scroll when Dhanush was shown smoking in the film. The first bench, comprising Chief Justice Sanjay Kishan Kaul and Justice M. Sathyanarayanan, observed, “Every citizen cannot become a super censor board or a super authority in the form of petitioning the court under a PIL.” While dismissing the PIL from S. Cyril Alexander, state convener of the Tamil Nadu People’s Forum for Tobacco Control (TNPFTC), the first bench passed the order. Refusing to entertain the PIL, the judges said: “Representations are said to have been made to the committee. It is for the committee to find out whether there is any violation or not. We are thus not inclined to entertain the petition.”

of the film “PK” based on the poster of actor Aamir Khan, the Supreme Court dismissed the petition and observed that these are matters of art and entertainment and let them remain so. It added that any restrictions on release of film would affect constitutional right of the film makers. It suggested that the petitioner may not watch the film if he does not like it but religious facets should not be brought into this. ► The Madras High Court on August 13, 2014 dismissed a public interest litigation (PIL), which sought to prosecute Wunderbar Films Private Limited, producer of Tamil film, Velaiyilla Pattathari, starring Dhanush, for not showing

G. CINEMATOGRAPH BILL, 2013 In wake of the controversy surrounding the film “Vishwaroopam” and the Tamil Nadu Governement imposing ban on the film despite the grant of the certificate by the Censor Board resulted in the Government setting up a panel headed by Justice Mukul Mudgal, former Chief Justice of the High Court of Punjab and Haryana. The Mudgal committee has proposed a model Cinematograph Bill to replace the Cinematograph Act, 1952 to provide for a new legal framework for governing Indian cinema.

Key features of the Bill: ► The Bill suggests different slabs of rating for various age groups of film viewers. Under the Bill, films would be certified by the Central Board for Film Certification (CBFC) under U, 12+, 15+, A and S categories. ► The Bill introduces criminalization of the act of unauthorized copying of a negative or of a film. ► Power of Central Government to supersede the Board ► To address the sensibilities of women in the films, provisions have been introduced to the effect that one-third members of the 25-member Central Board of Film Certification Board will be women. Even the advisory boards will have one- third women members. ► To ensure that the distributor or exhibitor or any other person to whom the rights in the film have passed do not circumvent the certification by not displaying the categories on the posters and other publicity material, the Bill makes a provision of fine up to Rs.5, 000 and an additional Rs.20, 000 for each day of violation. ► Where any person is aggrieved by any order of the Board or of the Central Government, or of any other authority which affects and relates to the exhibition of a film, such person may, within a period of thirty days from the date of such order, prefer an appeal to the Appellate Tribunal i.e. FCAT. Provided that the Appellate Tribunal may, if it is satisfied that the appellant is prevented by sufficient cause from filing the appeal within the aforesaid period of thirty days, allow such appeal to be admitted within a further period of thirty days by passing a reasoned order. An appeal against the order of the FCAT would lie only in the Supreme Court.

H.

MIB ADVISORY ON CBFC CERTIFICATE BEFORE TRAILERS Movie trailers on television:

The MIB had initially released an advisory, on January 6, 2011, targeting TV channels to display a Central Board of Film Certification (CBFC) certificate before the airing of any film or its trailer. Having seen instances of non-compliance, the MIB released another advisory dated May29, 2014. MIB warned that any further non-compliance would be a violation of the law under the Cable Television Networks (Regulation) Act 1995 and Cable Television Network Rules 1994. The notice reads “channels are sometimes showing trailers of new films without showing CBFC certificate. Showing films/film trailers without CBFC certificate is a violation of the Cinematograph Act, 1952 as enshrined in Rule 6(1)(n) of the Cable Television Networks Rules, 1994 which further provides that no film or film song or film promos of film trailer or music videos or music albums or their promos, whether produced in India or abroad, shall be carried on cable service unless it has been certified by the CBFC.”

I.

MIB ADVISORY ON RASH DRIVING DATED JUNE 23, 2014 The Ministry of Road Transport & Highways had earlier raised concerns on depiction of rash, negligent and dangerous driving in various progammes, serials, news features, etc. on TV channels and in print media. Drawing attention to a few such instances the ministry of road transport & highways has pointed out that such depiction could be against public interest. Taking note of the aforesaid issues, Ministry of Road Transport & Highways requested that: i)

The stills/images/scenes depicting rash, negligent or dangerous driving may not be usually portrayed in print and electronic media.

ii) In the unlikely event that depiction of such situation becomes unavoidable in a certain context, these should invariably be accompanied by appropriate messages such as “over speeding kills”, “driving two-wheeler without wearing helmet is dangerous and illegal”, “driving four wheeler without wearing seat belt is dangerous”, etc. In view of the aforementioned requests of the Ministry of Road Transport and Highways, the MIB issued an advisory by which all TV channels/Doordarshan/print media are advised to be extremely careful in portraying such stills/images/scenes which depict rash, negligent or dangerous driving; and in case, such portrayal is necessary, then it may be accompanied by appropriate messages/warnings.


Role and Rule of Law Media & Entertainment Industry Films

61

06. FILM TRADE ASSOCIATIONS IN INDIA

A. NATURE OF FILM ASSOCIATIONS AND

THEIR ROLE:

There are several film associations in the industry formed by its members to facilitate the functioning of its different sectors. Though these associations do not have a statutory standing, the members therein follow the rules, procedures and bye laws of these associations as a way of customary practice. Some of the important Film Associations are as follows: 1. The Film and Television Producer’s Guild Ltd. 2. Association of Motion Pictures and TV Programme Producers (AMPTPP) 3. Federation of Western India Cine Employees (FWICE) 4. Motion Pictures Distributors Association (India) Pvt. Ltd. (MPDA) 5. Indian Music Industry (IMI) 6. Cine and TV Artists Association (CINTAA) 7. Film Federation of India (FFI) 8. Indian Film and Television Directors’ Association (IFTDA) 9. Film Writers’ Association The above Associations have an active dispute resolution forum and registration facilities for film script and film/TV titles. Essentially

these Associations are formed for the welfare of its members and therefore, they often represent their members in taking a legal action subsequent to or parallel to an ongoing dispute resolution proceedings if any.

GROWTH OF FILM TRADE ASSOCIATIONS: In the nascent decades of the Indian film industry, distributors hardly existed. By the 1930s, with the introduction of sound in films, the distribution system gradually emerged. Distributors play a median role between film producers and exhibitors. Initially, due to the cost of film exhibition equipment, distributors were concentrated in a few towns such as Bombay, Calcutta and Madras. With the growth in population and the possibility to show films in regional languages, the distribution sector expanded. In the chain of the cinematography business, distribution and exhibition are integral links and have undergone a significant transformation over the last 100 years. In the last 20 years, the growth of television, internet and multiplexes has transformed the film exhibition business and expanded it beyond theatres. The distribution system functions through a territorial chain divided into geographical zones, for which rights are sold separately. The system of film collections is maintained at three levels; the distributor would take money from the exhibitors in his circuit and pass it on to the producer. The various associations of film distributors and exhibitors play an important role in ensuring that the system works smoothly. Any dispute between the producer and the distributor or distributor and exhibitor is referred to these associations and the parties abide by the decision of the association.


62

Role and Rule of Law Media & Entertainment Industry Films : Chapter 6 : FILM TRADE ASSOCIATIONS IN INDIA

B. REGULATION OF POWER OF FILM TRADE

Section 3 – prohibits anti-competitive agreements

ASSOCIATIONS UNDER COMPETITION LAW

Section 4 – prohibits abuse of dominant position

Trade associations are subject to scrutiny by competition authorities to deter practices that facilitate collusion among the members. The Monopolies and Restrictive Trade Practices (MRTP) Act, 1969, was repealed by the Competition Act, 2002, which provides for the establishment of a Competition Commission to prevent practices that adversely impact fair competition. The aim is to promote and sustain competition in markets, to protect the interests of the consumers and to ensure freedom of trade carried on by other participants in the markets. As per the Amendment Act, 2007, the Commission was made an expert body and was to function as a market regulator for preventing and regulating anti-competitive practices in the country.

Section 19 – provides for inquiry into certain agreements and domi-

The relevant sections of the Competition Act, 2002, pertaining to the media and entertainment sector are:

nant position of enterprise by the Commission

Section 27 - empowers the Commission to pass orders after inquiry into agreements or abuse of dominant position: a) to discontinue and not to re-enter such agreement or discontinue such abuse of dominant position, as the case may be; (b) impose a penalty; c) direct that the agreements shall stand modified to the extent and in the manner as may be specified in the order by the Commission. Section 33 – empowers the Commission to issue interim orders to temporarily restrain any party from carrying on such act until the conclusion of such inquiry or until further orders, without giving notice to such party.

LANDMARK DISPUTES IN COMPETITION COMMISSION OF INDIA ● Eros International Media Limited against Central Circuit Cine Association, Indore & Ors. Sunshine Pictures Private Limited against Motion pictures Association & Ors. Citation: Case No. 52 and 56 2010 Date: February 16, 2012

● Reliance Big Entertainment Limited against Karnataka Film Chamber of Commerce (KFCC) & Ors. ● UTV Software Communications Limited against KFCC ● Reliance Media Works Limited against KFCC ● Reliance Big Entertainment Limited against KFCC ● FICCI Multiplex Association of India against KFCC ●

Eros International Media Limited against Bihar and Jharkhand Motion Pictures Association

● UTV Software Communications Limited against Bihar and Jharkhand Motion Pictures Association.

bans, penalties and giving a call of boycott against those who violate the rules and regulations of the associations. The Informants pleaded for interim orders under Section 33 of the Act in order to secure the release of their films.

Held: The Commission held that the associations were individually held in contravention of the provisions of section 3(3) (b) read with section 3(1) of the Act. It passed an order stating that the associations were taking decisions and engaged in anti-competitive practices. It held that the demands such as compulsorily registration of films before release amounted to blackmail tactics. The Commission held that only the conduct of the said associations was to be penalised in the present order and the matter against the members would be penalised separately. The Commission imposed a penalty at the rate of 10% of the average of their three years total receipts of each association. In addition the Commission directed all the associations to cease and desist from the following practices and to take suitable measures to modify the anti-competitive practices alleged by the informants.

UTV Software Communications Limited, Mumbai against Motion Pictures Association, Delhi Citation: Case No. 09/2011

Citation: Case No. 25, 41, 45, 47, 48, 50, 58 and 69 of 2010.

Date: May 8, 2012

Date: February 16, 2012

Facts: The Informant alleged that the Respondent/Opposite Party had abused its dominant position by imposing unreasonable terms and conditions which limited the production, supply, distribution and exhibition of the films in the areas of operation of the Opposite Party. The cause of filing of the information arose when the Opposite Party issued a circular declaring the film, 7 Khoon Maaf, unregistered, alleging that the informant had failed to comply with the rules of the Opposite Party and that its name would be removed from the membership of the association if the terms and conditions were not agreed to. The Informant also stated that previously penalty had been levied on the Informant’s films like, Rang De Basanti, Aamir, Mumbai Meri Jaan, Jodha Akbar,

Facts: In all these cases, the basic issue raised by the Informants was that the Respondent film bodies/associations had indulged in various anti-competitive activities in violation of the provisions of Sections 3 and 4 of the Competition Act, 2002, such as asking the producers-distributors to compulsorily register their films before release with them in territories under their control, forcing them to be liable to abide by their unfair and discriminatory rules, directing the members not to deal with non-members, prescribing undue long holdback period for satellite, DTH and other rights in respect of exhibition of films and imposing


63

Kismat Konnection, A Wednesday, Fashion and Kurbaaan for alleged premature satellite telecast of the said films.

Held: The Commission found the rules of the Opposite Party in violation of section 3(3)(b) read with section 3(1) of the Act since the said rules limited and controlled the distribution and exhibition of the films in its area of operation. The Commission held that the rules of the Opposite Party were anti-competitive in nature and were against the spirit of free competition in the market. The Commission observed that since a penalty had already been imposed on the Opposite Party (in case no. 25 of 2010), the Commission deemed it fit not to impose any further penalty and the conduct of the executive members of the Opposite Members were to be taken up separately. The Commission further upheld the ‘cease and desist’ order which was passed in case no.’s 25, 52 and 56 of 2010 directing the Opposite Party to dispense with the rules which were anti-competitive.

● In 2011, FICCI – Multiplex Association of India v United Producers/Distributors Forum (UPDF) & Ors. The Competition

the films i.e. “Son Of Sardar” as well as “Jab Tak Hain Jaan”, during Diwali. However, due to the said ‘tie-in’ arrangements entered into by Yash Raj Films, there were very less and second quality theatres available for Ajay Devgn Films for its Diwali release film “Son of Sardar”.

Held: The CCI rejected the Complaint of Ajay Devgn Films, on the

ground that though there was a ‘tie-in’ arrangement between Yash Raj Films and the theatre owners, there was no ‘appreciable adverse effect’ on the competition, as required under Section 3 of the Competition Act, 2002. Commission considered all the factors in Section 19(3) of the Act and further came to the conclusion that the agreements were not affecting the competition in the Indian market. Such, agreement had not created any entry barriers for the new entrants nor did they drive existing competitors out of the market. The Commission was of the view that the impugned agreement between YRF and theatre owners was purely commercial in nature between parties promoting their economic interests and as such did not affect any particular market. The impugned agreement, therefore, did not violate section 3(4) of the Competition Act. The Commission further did not accept the Informant’s contention that YRF was a dominant player in the market film industry and hence did not find any contravention of Section 4 of the Competition Act. The CCI therefore passed a closure order under Section 26(2) of the Competition Act.

Commission of India directed all the 27 opposite parties to refrain from indulging in such anti-competitive practices in future and are further directed to file an undertaking to this effect within one month from the date of receipt of the order. A penalty of Rs 1 lakh was also imposed on each of the 27 opposite parties.

● Appeal before Competition Appellate Tribunal (COMPAT):

● Following the case filed by FICCI, Film and Television Produc-

Citation: Appeal No. 130 of 2012 with IA No. 264 of 2012

ers Guild of India (Guild) filed a complaint with the CCI against Multiplex Association of India (MAI) & Ors., which is pending before the CCI.

● Ajay Devgn Films against Yash Raj Films Private Limited Before the Competition Commission of India

Date: November 13, 2013 Aggrieved by the order of the CCI, Ajay Devgn Films has preferred an appeal before the Competition Appellate Tribunal. The COMPAT however upheld the decision passed by the CCI and dismissed the appeal.

Citation: Case No. 66 of 2012

● Shri Vipul A .Shah against All India Film Employees Confederation and Ors

Date: November 5, 2012

Before the Competition Commission of India

A Complaint was filed by Ajay Devgn Films before the Competition Commission of India against Yash Raj Films Pvt. Ltd under Section 3 (4) (a) and under Section 4 of the Competition Act, 2002.

Citation: Case No. 19 of 2014

Facts: The present information was filed by Ajay Devgn Films under Section 19(1)(a) of the Competition Act, 2002 against Yash Raj Films Private Limited, Yash Raj P.P. Associates Private Limited, Yash Raj Puri & Co. Pvt. Ltd., Yash Raj Pal Film Distributors (Banglore) Pvt. Ltd., Yash Raj Vandana Film Distributors Pvt. Ltd. and Yash Raj Kushagra Arts Pvt. Ltd. (‘alleging inter-alia contravention of sections 3 and 4 of the Act. Yash Raj Films, at the time of release of its film “Ek Tha Tiger”, had entered into agreements with the theatre owners wherein Yash Raj Films put a condition to the theatre owners that they would be required to exhibit “Ek Tha Tiger” releasing on 15th August, 2012, as well as the then untitled film of Yash Raj Films, scheduled for release in Diwali (November, 2012), which was later titled as “Jab Tak Hai Jaan”. One of the conditions under the agreements between Yash Raj Films and the theatre owners was that for both the films, the single screen theatre owners were required to book all their screens, for all 4 shows and for 7 days of the week and for three continuous weeks. By making it compulsory to the theatre owners to abide by these conditions, knowing that the theatre owners were keen to release the film “Ek Tha Tiger”; Yash Raj Films “tied-in” its then untitled film scheduled for release in Diwali of 2012 (November, 2012). Aggrieved by the aforesaid “Tie-in” arrangement of Yash Raj Films, Ajay Devgn Films filed the captioned complaint with the CCI. The grievance of Ajay Devgn Films was that there were theatre owners, who wanted to exhibit “Son of Sardar” during Diwali and there were theatre owners who wanted to exhibit both

Facts: The present information was filed under Section 19(1) (a) of

Date: June 23, 2014 the Competition Act by Shri. Vipul A. Shah against All India Film Employees Confederation and other parties alleging inter alia, contravention of provisions of Section 3 and 4 of the Act. The opposite parties were different associations and trade unions representing different crafts in the film industry. The Informant’s case was that with advent of time every craft in the film industry such as artists, lightmen, cameramen, models, fighters, dancers, etc started creating their own associations. Each of these associations have negative agreements i.e. producers cannot take any person who is not a member of the respective association, thereby adversely affecting the public interest as development of skills of persons who are not part of the association gets limited and the producer is unable to choose freely. The Informant’s case was that te television producers cannot withstand the non-co-operation of the opposite parties. Reference was made to the Memorandum of Understanding dated October 1, 2010 entered into between Opposite Party No. 2 i.e. Federation of Western India Cine Employees (FWICE) representing the opposite party nos. 6 to 25 on one hand and the Opposite party nos. 26 to 28 i.e. Indian Motion Picture Producers Association (IMPAA), The Film and Television Producers Guild of India Ltd and Indian Film And TV Producers Council (formerly known as Association of Motion Picture and TV Program Producers /AMTPP) representing the film and television producer members on the other hand (“MOU”).


64

Role and Rule of Law Media & Entertainment Industry Films : Chapter 6 : FILM TRADE ASSOCIATIONS IN INDIA

Held: The Commission examined the provisions of the MOU and made the following observations:

► Clause 6 of MOU which provided that film producers shall exclusively deal only with the members of Opposite Party No. 2 i.e. FWICE including the Respondent Nos. 6 o 25 makes it apparent that the film and television producers cannot engage the services of craftsmen who are not members of the Opposite Party Nos. 6 to 25. Since film and television producers are dependent on these associations, such provision has the affect of controlling/ limiting the provision of such services which is in contravention of Section 3(1) read with Section 3 (3) (b) of the Act. Furthermore, the MOU provides for fixing of work shift timings/ wages, rates which is contravention of provisions of Section 3 (1) read with Section 3(3) (a) of the Act as it indirectly determines purchase/ sale prices. ► CCI referred to a resolution passed by Opposite Party No.1 i.e. All India Film Employees Confederation which stipulated that (i) if a film is being shot in Mumbai and the dance director/ fight master is from Bengal/ Chennai or Hyderabad, in this case he should engage 70% of the Dancers/ Fighters form Mumbai and 30% of his choice and (ii) if a Hindi film is being shot in other region than Mumbai and the Dance Director/ Fight Master is from other region than the region the film is being shot in, in that case 50% Dancers/ Fighters should be engaged from Mumbai, 25% from the local association where the film is being shot and the remaining 25% of his choice. The CCI found this in contravention of the provisions of Section 3 (3) (b) and (c) read with Section 3(1) of the Act. ► The CCI also found certain other provisions of the resolution dealing with payment of 1.5 times of shift charges to all craftsmen engaged by the producer if shooing outside Mumbai, extra payment charges on the film and television producers for hiring models, etc in contravention of Section 3(3)(a) of the Act read with Section 3(1) of the Act. The CCI was therefore of the prima facie opinion that a case of contra-

vention of the provisions of Section 3 of the Act is made out against the Opposite Parties Nos. 1 to 25 and further observed that the Competition Act is applicable to Trade Unions unlike the erstwhile MRTP Act. The CCI has directed the Director General to cause an investigation to be made in the matter. The matter is pending before the CCI. (Please refer to Annexure 1(xi) for case details)

OTHER ISSUES ► In August 2011, UTV Software Communications Ltd. approached the Competition Commission of India (CCI) for approval on its proposed merger with Walt Disney Co. (South East Asia) Pvt Ltd in a deal valued at around Rs 2,000 crore. The CCI has cleared the takeover of UTV by Disney. From June 1, 2011, it has become a mandate under the Competition Act, 2002, that companies with a turnover of more than Rs 1,500 crore will have to approach the Competition Commission for approval before any merger. ► In 2011, HT Media Ltd. filed a complaint against Super Cassettes Industries Ltd (SCIL), which owns the T-Series label, before the Competition Commission of India. HT Media owns several radio stations which wanted to play the music owned by T-Series but the parties were not able to agree on the royalty rates. The basis on which the complaint was filed was that T-series was not following the 2% royalty ruling of the Copyright Board and was charging the old rates i.e., Rs 660 per needle hour and that it was using its dominant position in the music market. The Commission has asked its director general to investigate whether the music is charging arbitrary royalty rates from radio broadcasters. T-Series, which owns 80 % music rights of new films, had sought an interim order from the Delhi court in 2010 that the rates fixed by the Copyright Board shall not apply to the royalty rates of Super Cassettes Industries Limited.

The film distribution system functions through a territorial chain divided into geographical zones, for which rights are sold separately.


FILM TRADE ASSOCIATIONS I Main trade bodies 1. Andhra Pradesh Film Industry Employees Federation 2. Chennai City Film Exhibitors Association 3. Cinema Owners and Exhibitors Association of India 4. Eastern India Motion Pictures Association 5. Federation of Western India Cine Employees 6. Film Employees Federation of South India 7. Film Federation of India 8. Karnataka Film Workers Artists Technicians Federation 9. Karnataka Film Chamber of Commerce II Film Federation of India and its affiliates 1. AP Film Chamber of Commerce 2. Akhil Bhartiya Marathi Chitrapat Nirmata Mandal 3. All India Film Employees Confederation 4. Association of Film & TV Publicity 5. Association of Motion Pictures & TV Programme Producers 6. Bihar Motion Pictures Association 7. Central Circuit Cine Association 8. Chamber of Motion Pictures Production 9. Eastern India Motion Pictures Association 10. Film & TV Producers Guild of South India 11. Film Critic Association 12. Film Distributors Council 13. Hyderabad State Film Chamber of Commerce 14. Indian Documentary Producers Association 15. Indian Film Exporters Association 16. Indian Motion Pictures Distributors Association 17. Indian Motion Pictures Producers Association 18. Kannada Film Producers Association 19. Karnataka Film Chamber of Commerce 20. Kerala Film Chamber of Commerce 21. Cinematograph Renters’ Society 22. Kolhapur Chitra Nagri 23. Malayalam film Producers Association

24. Motion Pict. Assn. of America Inc. 25. Motion Pictures Association 26. North Indian Film Association 27. Short Film Makers Association of Eastern India 28. South Indian Film Chamber of Commerce 29. South Indian Film Exporters Association 30. Tamil Film Producers Council 31. Tamil Nadu Film Chambers of Comm. 32. Tamil Nadu Film Distributors Council 33. Tamil Nadu Film Exhibitors Association 34. Telugu Film Producers’ Council 35. The Film & TV Producers Guilds Of India 36. Upper India Cine Artistes Association 37. Upper India Film Production Association 38. Western India Film Producers Association 39. Western India Film Producers Association III Federation of Western India Cine Employees and its affiliates 1. Association Of Cine & TV Art Directors 2. Association of Cine TV Advt. Production Executives 3. Association Of Film Editors 4. Association of Film Set Material & Hirers 5. Association of Motion Pictures Studios 6. Association of Voice Artistes 7. Cine & TV Artistes Association 8. Cine Agents Combine 9. Cine, TV Artistes’ & Workers’ Association 10. Cine Costume & Make-up Artistes’ Association 11. Cine Dancers’ Association 12. Cine Music Directors’ Association 13. Cine Musicians Association 14. Cine Singers Association 15. Cine Still Photographers Association 16. Film Studio Setting & Allied Mazdoor Union 17. Indian Film Dance Directors Association 18. Indian Film Directors Association 19. Junior Artistes Association 20. Mahila Kalakar Sangh 21. Movie Actions Dummys & Effects Association 22. Movie Stunt Artiste Association 23. Musician Federation of India

24. Planks & Ply Suppliers Association 25. The Film Writers Association 26. Western India Cinematographers Association 27. Western India Motion Picture Sound Engineering Association OTHER FILM TRADE ASSOCIATIONS 1. Advtg. Agencies Association 2. All India Photographic & Industry Association 3. Association of Voice Artistes 4. Audio Engineering Society India 5. Bharat Cine & TV Writers’ Association 6. Bombay Book Sellers & Publishers Association 7. Bombay Union of Journalists 8. Cine Advertisers Association 9. Cine Agents Combine 10. Cine Artiste Welfare Trust 11. Cine, TV, Artistes’ & Workers Association 12. Cinematographers Combine 13. Freelance Film Journalists Combine 14. FICCI 15. FICCI (Delhi) 16. GRAFTTI 17. Hindi Patrakar Sangh 18. IAAP 19. Indian Film & TV Artists Association 20. Indian Film Producers & Directors Association 21. Indian Music Industry (IMI) 22. Indian Performing Rights Society Ltd. 23. Indian Television Academy 24. Marathi Chitrapat Nirmata – Vitrak Mahasangh 25. Maharashtra Laghu Chitrapat Nirmata Sangh 26. Music Association of India 27. Musician Federation of India 28. Osian’s Connoisseurs of Art P.L. 29. RAPA 30. School of Audio Engineering College 31. Shiv Sena Chitrapat Shakha 32. The Indian Music Industry & Phonographic Performance Ltd. 33. V.C.C.C.I.


66

Role and Rule of Law Media & Entertainment Industry Films

07. Distribution And Exhibition of Films

A. DISTRIBUTION RIGHTS AND PLATFORMS: The various distribution rights / exploitation rights of a film are:

a. Airborne Rights: the right to show or play the film by any manner or

means as approved by any airline anywhere in the world or make available videograms to passengers on aircraft registered in any country or to guests/passengers/occupants in any chartered flight and by all means every Airborne right.

b. Clip Rights: the right to exploit limited duration excerpts from the

picture in all forms of media now existing or in the future created separately from the picture.

c. Derivative rights: shall mean right to make prequels, sequels, remake, etc. of the film.

d. Hotel Rights: the right to show or play the film by means of television

system in hotels and motels excluding any public showing or showing to any audience which had paid or is deemed pursuant to any statutory or other provision to have paid to see or hear the film, but including the right to show the film by pay per view device in any hotel room to a hotel guest.

e. Music Publishing Rights: the right to use, exercise, enforce and

exploit (subject only to the right, if any, of the composer to receive customary royalties) including without limitation all rights of copyright and administration in and to all music and/or lyrics written for or in connection with the film (other than previously copyrighted

music and/or lyrics licensed to the licensor of such rights or its predecessors in interest by unrelated copyright proprietors and not specifically written for the film).

f. Non-Theatrical Rights: the right to distribute, exhibit and exploit or

permit the distribution and exhibition of the film by all forms of media now existing or in the future created to organisations not primarily engaged in the business of exhibiting motion pictures, such as, by way of example only, oil rigs, schools, hospitals, hotels, museums, military installations, diplomatic posts and missions, commercial aeroplanes and ships.

g. Online Distribution: the right to distribute the picture by means of computer networks integrated through the use of any protocol now known or hereafter in existence, including, without limitation, the ‘internet’ and the TCP/IP protocol or any successor or similar technology used to access such computer networks for display on any viewing devices (including, without limitation, liquid crystal devices, plasma screens, hand held viewing devices, video display monitors, and the like) using computer or computer mediated processing units or similar technology now known or hereafter in existence.

h. PPV Rights: the right to exhibit the film by transmission of an en-

crypted television signal by means of a point to multi-point distribution system containing programming chosen by a viewer, whereby (i) the scheduling of the exhibition of the program is predetermined, in whole or in part, by the distribution service; and (ii) the viewer is required to pay or is assessed a separate per-program, per exhibition fee (including “pay per day” and near video on demand), as opposed to payment being on a pre packaged, subscription basis.


i. Print Publication Rights: the right to publish the screenplay for the film together with the right to publish the novelisation(s) based on such screenplay.

j. Radio Rights: the right to produce for and broadcast on radio audio-

only howsoever transmitted versions of the screenplay on which the picture is based, and adaptations thereof. The broadcast on radio of excerpts from the picture for publicity and marketing purposes shall not be deemed to form part of radio rights

k. Satellite Rights: the rights to broadcast through digital or analogue the

film through satellite in extra-terrestrial orbit and beam down signals through satellite antenna and re-broadcast such signals in the contracted territories/areas and cover all operations for communications and rebroadcasting of the film from signal input towards the satellite upto and including its reception by the tele-viewer whether or not this be effected by means of a unit other than the original receivers and antennas.

l. Ship Rights: the right to show or play the film by any manner or means

or make available videogram to passengers/occupants on ships registered in any country or any water transport vessels in any country.

m. Soundtrack Recording Rights: the right to use and to licence and sub-

licence any other person or entity (including any subsidiary or affiliated corporation) the right to use all or any part of the soundtrack of the picture and/or all or any part of the musical score and the individual parts used in connection with or as part of the film (other than pre-existing compositions or masters, the rights to which are limited by the terms of the licence thereof) for the purpose of producing or reproducing commercial, phonograph, tape, wire or other recordings of any kind, whether in album form, single records, cartridges, electrical transcriptions or otherwise, and whether designed for sale to the public or for advertising purposes or any other purpose and to sell, market and exploit the same.

n. Surface Transport Rights: the right to show or play the film by any

manner or means or make available videograms to passengers/occupants on any transport touching or plying on the surface of the earth or on any fitting and fixtures based on the ground.

o. Television Rights: the right to transmit, broadcast, stream and exhibit

the picture within a schedule of programming chosen by the television company by means of free unencrypted television (Free Television Rights), satellite television rights (including MMDS, SMATV, DTH, SSL, XDSL, DBS) cable television rights, pay per view rights (residential and non residential), video on demand (NVOD, SVOD, NMOD) and encrypted television requiring some form of payment for access, including VOD, SVOD, PPV, and basic and premium subscription services (“Pay Television Rights”), whether high definition, digital or analogue and whether delivered by terrestrial broadcast, cable or satellite broadcast, Online Distribution or by any other means.

p. Theatrical Rights: the right to distribute and exhibit or cause the dis-

tribution or exhibition of the picture in 35 mm gauge width film prints, or in other technological formats now known or hereafter invented, in theatres or drive-in theatres which are licensed as such, and which are primarily engaged in the business of exhibiting motion pictures where the exhibition occurs before an audience which has purchased admission tickets for such exhibition.

q. VOD Rights: the right to exhibit the picture by any means of “video-

on-demand” (VOD) formats, including, but not limited to, addressable draft transmission to a consumer of the picture via telephone, satellite, cable or other lines, over-the-air, and/or online distribution (as defined herein), for the intended purpose of non-commercial viewing by consumers wherever and whenever they choose.

r. Video Rights: audio-visual rights for exploitation of the said film

for home viewing in the form/format of devices, including, interalia, the right : (a) of recording, re-recording, manufacturing and having manufactured, reproducing, embedding, processing, copying of the film on the devices; (b) to market, distribute, sell/offer for sale, use, promote, rent, license or deal, copy or dispose of copies of the film on the devices.

s. Video Rental: means authorised distribution of devices embedding a copy of the cinematograph film through approved modes such as video libraries.

t. Video Sell Through: means authorised sale of devices embedding a copy of the cinematograph film through approved modes of marketing and distribution such as shops and other establishments.

u. Other Rights: such as exploitation of the film on cable, LAN, broad-

band, personal video players (PVPs), personal video recorder, digital video recorder, digital TV, optical disc burner or recorders or equivalent memory stick cartridges, semi conductor chips in both standard and hi definition formats, versatile digital discs, optical disc, laser disc, video compact disc, compact disc, disc players, Blu-ray, personal computers, set-top based games that are played in conjunction with a DVD, HD-DVD, HD, or any other mode of video together with audio/songs (Audio/Video) and the visuals accompanying them in the film (alone or in conjunction with audio/songs and visuals accompanying the audio and songs of other film(s)), interactive television, interactive media, telephone, electric wires, wireless, chip, satellite, DTH, DSL, ADSL, VDSL, SSL, DBS, free download, pay downloads in part or full, animation, games, reel, VHS, video cyberspace, video internet, mobile, computer hard drives, RAM devices (e.g. “Flash” or “Memory Stick” cards), personal digital assistants (PDAs), personal entertainment devices (PEDs), wireless devices, all interactive games, mobile rights, call back tones, ring back tones, music soundtrack and publishing rights, all rights in relation to exploitation and distribution of the music rights including digital rights and publishing rights, merchandising rights.

B. TYPES OF DISTRIBUTION AGREEMENTS: a. Grant of Distribution Rights on an Outright Basis: Producer or the owner of the Distribution Rights (Party ‘A’) grants the distribution rights (one or all of the rights) on an outright basis to distributor (Party ‘B’). Party B pays a lumpsum consideration to Party A for such grant of distribution rights. The distribution rights could be assigned either for a fixed period or for the entire term of the copyrights, as per the commercial understanding. Party A may or may not share the profits with Party B, depending on the commercial understanding. The grant of distribution rights by Party A to Party B may or may not be coupled with grant of copyright in the cinematograph film in favour of Party B, depending on commercial understanding between the parties.

b. Grant of Distribution Rights on a Minimum Guarantee Basis: Producer or the owner of the distribution rights (Party ‘A’) grants the distribution rights (one or all of the rights) on a minimum guarantee basis to distributor (Party ‘B’), where Party B pays a minimum guarantee amount (‘MG amount’) to Party A. Party B is entitled to recoup the MG amount from the revenues arising from exploitation of the film. However, the MG amount is not refundable by Party A to Party B in any event i.e. even if Party B is unable to recover the same from the


68

Role and Rule of Law Media & Entertainment Industry Films : Chapter 7 : Distribution And Exhibition of Films

revenues of the film and consequently Party B suffers losses. In most cases, post the recovery of (i) the MG amount, (ii) distribution commission at agreed rate and (iii) other agreed expenses by Party B; Party B shares the profits with Party A in a mutually agreed ratio.

k. Tamil Nadu: Tamil Nadu, Kerala.

c. Grant of Distribution Rights on a Commission Basis:

D. LOCAL CINEMA REGULATIONS

Producer or the owner of the distribution rights (Party ‘A’) grants the distribution rights (one or all of the rights) on a commission basis to distributor (Party ‘B’), where Party B is entitled for a commission at a rate mutually agreed between the parties on the revenues collected by it from the exploitation of the distribution rights. Party B is also entitled to recoup the expenses incurred by it for publicity and distribution of the film from the revenues of the film and after recoupment of such expenses and commission, the balance amount of revenues is payable by Party B to Party A.

Important features of State Cinema Regulations in various states of India are as under:

d. Grant of Distribution Rights on a Refundable Advance Basis: Producer or the owner of the distribution rights (Party ‘A’) grants the Distribution Rights (one or all of the Rights) on a refundable advance basis to distributor (Party ‘B’), where Party B pays a refundable advance amount to Party A. Party B is entitled to recoup the MG amount from the revenues arising from exploitation of the film. However, in the event Party B is unable to recoup the Refundable Advance in full or in part, the deficit amount shall be refundable by Party A to Party B. Post the recovery of (i) the refundable advance, (ii) distribution commission at agreed rate and (iii) other agreed expenses by Party B; Party B shares the profits with Party A in a mutually agreed ratio.

C. FILM DISTRIBUTION TERRITORIES: Film Distribution Territories in India: The Film distribution territories in India are broadly divided into 12 territories: a. Mumbai Territory: Mumbai City and Suburbs, Gujarat, Parts of Maharastra, Parts of Karnataka and Goa. b. Delhi-U.P. Territory: Delhi City, Uttar Pradesh and Uttaranchal. c. East Punjab Territory: Punjab, Harayana, Chandigarh, Himachal Pradesh, and Jammu and Kashmir. d. Eastern Circuit Territory: West Bengal, Bihar, Jharkhand, Orissa, Assam and Northeastern States, Andaman and Nicobar Island, and Nepal. e. Bihar Territory: Bihar and Jharkhand and parts of Chhattisgarh. f. Nizam/Andhra territory: Parts of Andhra Pradesh (including Hyderabad), parts of Maharashtra and parts of Karnataka. g. CP Berar Territory: Eastern Maharashtra, Southern and Western Madhya Pradesh, Chattisgarh. h. CI Territory: Parts of Madhya Pradesh. i. Rajasthan Territory: State of Rajasthan. j. Mysore territory: Banglore city, parts of Karnataka.

l. Andhra Pradesh: Parts of Andhra Pradesh

The States have the power to regulate the exhibition by means of cinematographs and the licensing of places in which cinematographs are exhibited and further has powers to suspend the exhibition of the films in the state in the event the film poses any threat to the law and order situation in the state, the following are the relevant provisions of the various state cinema regulation Acts (Cinema Regulation Acts): ► Licensing: The cinema regulation Acts, at the outset, lay down the manner of licensing a place for the exhibition of cinematograph (meaning an apparatus for the representation of moving picture or series of pictures). Any person, who intends to provide exhibition by means of a cinematograph in a place shall take appropriate licenses from the licensing authority. The licensing authority may grant the licence on certain terms and conditions and subject to restrictions. The licensing authority may refuse to grant the license if he/she is of the opinion that the Rules made under the State Cinema Regulation Act and/or the provisions under the Act are not abided by and/ or in the event the applicable taxes are due. This license is non-transferable without prior consent of the respective licensing authority. ► State Government’s power to suspend exhibition of films: The State Government in respect of the whole of the state or any part thereof, and the licensing authority in respect of the area within its jurisdiction, may suspend the exhibition of a film, which is being or is about to be publicly exhibited, if the State Government or the licensing authority is of the view that such exhibition is likely to cause a breach of the peace. During the period of such suspension no person is allowed to exhibit such film or permit it to be exhibited in any place in the state or any part or area thereof, as the case may be. Any such order shall remain in force for a period of two weeks from the date thereof, but the State Government may direct that the period of suspension shall be extended by such further period or periods not exceeding two months in the aggregate, as it thinks fit. ► Penalty: In default of compliance with the provisions under this Act or the Rules hereunder, the licensing authority may impose a penalty fine on the defaulter. In the event of persistent default, the licensing authority may revoke or suspend the license for such period as it deems fit. The State Government has been given the power to revise any order. ► Rules: Every cinema regulation Act provides provisions for making Rules, which gives conditions for the facilitation of the provisions under the parent cinema regulation Act. The Rules inter alia provide for regulation of security and public safety of the cinematograph exhibitions, regulations for the entrance and exit of the licensed place and providing for prevention of disturbance threat, matters considered by the licensing authority before granting the licenses, the provision for approval of film, regulation of sale of tickers or pass for admission. ► Power to exempt: The State Government may exempt the compliance of provisions under cinema regulation Act or rules made there under for cinematograph exhibition or class of cinematograph exhibitions or any place where a cinematograph exhibition if the same is necessary or expedient in public interests, subject to such conditions and restrictions as may be specified in the order.


Role and Rule of Law Media & Entertainment Industry Films

69

08. FINANCE AND PRODUCTION OF FILMS

A. MODELS OF FILM FINANCING AND CO-

PRODUCTION ARRANGEMENTS IN INDIA:

The term, film finance / financing, refers to funding the cost of production of the film from the stage of pre-production until completion and delivery of the film to the distributor. In industry terms, these costs are normally bifurcated into two parts: (i) Above-the-line costs, which include costs of key elements of the film such as lead star cast, director etc., and (ii) Below-the-line costs, which includes the other costs of production. Film financing could be procured by a Producer at any stage of production. Normally, a producer seeks funding before commencement of production i.e. at the stage of Pre-Production or Development stage of the film. There are various models of film financing and depending on the elected model, the financier may be either a co-producer or an investor.

I. FILM FINANCING AT PRE-PRODUCTION STAGESince the film project is undeveloped at this stage, the financier normally funds the cost of development of basic key elements such as the script, costs of blocking the key actors and directors of various departments, recce for the locations, writers, etc. (referred to as development expenses). The producer develops the basis film project and presents the same to the financier for its approval / disapproval. In case of approval, the financier agrees to finance the film as co-producer / investor of the film. In case of disapproval, the financier seeks either refund of the development expenses from the producer or takes-over the film project at the concerned development stage. Such arrangement is normally referred to as Development Expenses Deal or First Look Deal. 1. STAGES OF DEVELOPMENT EXPENSES DEAL/ FIRST LOOK DEAL: (i) Producer approaches a financier with a storyline/concept for a film and for developing the said storyline/concept into a film project. (ii) The financier may agree to fund the pre-agreed and pre-approved development expenses for the film project. (iii) The producer develops the Key Elements (i.e. finalisation and blocking of the lead star cast, director, development of the script and detailed production budget) of the film and presents the same to the financier for approval. Within agreed period, the

financier has to either accept or reject the Key Elements of the film developed by the producer. In the event of the key elements being approved by the financier, the financier and the producer agree to produce/co-produce/finance, distribute and present the film on such terms and conditions as may be mutually agreed between them. This is commonly known as Green Lighting of the project. In such cases, the development expenses paid by the financier are normally adjusted towards production budget of the film. (iv) On the other hand, if the financier disapproves the Key Elements, the financier may either seek refund of the development expenses or may choose to take-over the Key Elements and develop the same on its own or in association with another producer. If financier seeks refund, the producer is entitled to raise funding on the Key Elements from other financiers. In order to secure itself on the refund of development expenses, the financier may seek security from the producer in various forms such as post-dated cheques, personal guarantee, bank guarantee, first and exclusive charge on the Key Elements etc. (v) Until the financier either accepts or rejects the key elements, the ownership of Key Elements is determined by commercial understanding between the parties i.e. the producer and the financier.

II. OTHER MODELS OF FILM FINANCING 2. PLAIN VANILLA FINANCE DEAL (NOT A CO-PRODUCTION): (i) A producer approaches financier for funding the budget of his film. The investor agrees to finance the film against an agreed return on investment i.e. (i) simple interest payable on the finance amount, the same being payable at the agreed rate of interest from the date of payment of the finance amount until repayment / realization of the same. The finance amount along with interest is normally payable / repayable either prior to or after the release of the film. If the same is payable after release, the producer utilizes the exploitation proceeds of the film for such payment. In some cases, instead of seeking fixed return on the finance amount, the financier elects to receive a share in profit arising from exploitation of the film. In such case, the financier recoups its investment from the exploitation proceeds of the film on first priority and subsequently also has a share in the profit. This model is more beneficial for the producer since


Role and Rule of Law Media & Entertainment Industry Films : Chapter 8 : FINANCE AND PRODUCTION OF FILMS

70

there is no commitment of fixed returns on the investment and the return on investment is contingent upon the financial performance of the film. (ii) In order to secure its investment until repayment of the finance amount along with return on investment, the financier seeks creation of security interest in its favour in various forms viz: a.

First and paramount charge/lien on the film (intellectual property) and tangible film materials (negatives and other paraphernalia) in favour of the financier;

b.

Post dated cheques issued by the producer in favour of the financier;

c.

Personal guarantee/corporate guarantee issued by the producer in favour of the financier.

(iii) In the event the producer fails to complete the film at any stage, the financier is entitled to invoke the security interests created in its favour and in the process of such invocation, the financier may elect to either take over the production of the film or sell the under-production film to any third party. 3. FINANCE AGAINST ACQUISITION OF FILM EXPLOITATION RIGHTS –SALE PURCHASE MODEL: (i) The financier in this case is normally a distributor of films or trader of film exploitation rights. In this kind of deal, the financier and the producer of the film mutually agree to a lumpsum consideration (Purchase Price) at which the producer agrees to grant and the financier agrees to acquire all exploitation rights of an underproduction film. The grant of exploitation rights may or may not include grant of copyright in the film in favour of the financier as may be commercially agreed between the producer and the financier. The financier may seek credit in respect of the film as an investor, presenter or co-producer of the film. The Producer envisages the Purchase Price to include, inter alia, the cost of production, producer’s fee and profit margin. (ii) The payment of Purchase Price is done as per cash-flow schedule mutually agreed between the producer and the financier, which is generally corresponding to the production schedule of the film so that the financier would have the ability to make Purchase Price pro-rata to the development / progress of production of the film. In such cases, the financier also has the ability to hold back payment of certain tranche as per cash flow schedule if the producer is unable to undertake production of the film in the manner mutually agreed between them. (iii) In the event of failure on the part of the producer to complete the film, the financier may have the option to take over the production of the film and on such take-over, all rights in the film stand assigned in favour of the financier; (iv) In order to secure its investment until repayment of the finance amount along with return on investment, the financier seeks creation of security interest in its favour in various forms viz: a.

First and paramount charge/lien on the film (intellectual property) and tangible film materials (negatives and other paraphernalia) in favour of the financier;

b.

Post dated cheques issued by the producer in favour of the financier;

c.

Personal guarantee/corporate guarantee issued by the pro-

ducer in favour of the financier. d. The film and its materials (negatives and other paraphernalia) is registered with the laboratory in the name of the financier and no print can be removed from the laboratory without the consent of the financier; (v) In the event the producer fails to complete the film at any stage, the financier is entitled to invoke the security interests created in its favour and in the process of such invocation, the financier may elect to either take over the production of the film or sell the under-production film to any third party 4. FINANCE AGAINST ISSUANCE OF OPTIONALLY CONVERTIBLE DEBENTURES (OCDs): (i) In such a deal the film financier agrees to finance the production budget of the film on the understanding that a separate company will be incorporated by the producer as a special purpose vehicle (SPV) through which the film will be produced. Such SPV will be the repository of all the rights of the film and will be treated as the producer of the film for all purposes. The financier will fund the production budget of the film by investing the same in the SPV and in lieu of such investment, the SPV would issue optionally convertible debentures (OCDs) in favour of the financier. The terms of the OCDs are contained in the debenture certificates issued in favour of the financier. The financier has the option to convert the OCDs into equity shares of SPV based on a pre-agreed conversion formula and during the pre-agreed conversion period. The enterprise value of the SPV is normally arrived at on mutually agreed basis in order to evaluate the equity percentage to be allotted to the financier to give effect to the conversion of OCDs into equity shares. (ii) In the event the financier does not exercise its option to convert the OCDs into equity shares, the SPV is obliged to redeem the OCDs by making payment of the amounts financed by the financier along with interest at pre-agreed coupon rate and other costs due thereon. (iii) This kind of film financing model has been implemented by various film funds (venture capital funds registered with the Securities and Exchange Board of India). 5. CO-PRODUCTION DEAL: (i) In this kind of deal, producer and co-producer come together for production of a film, wherein co-producer agrees to finance 100% of the production budget of the film and producer agrees to carry out production of the film. In co-production, the role of producer and co-producer is subject to agreed commercial understanding between them. In some case, the producer and co-producer may both fund the production budget of the film in a mutually agreed ratio and may both share the production responsibilities as well. (ii) The budget, star cast, crew members, etc. of the film are mutually agreed upon between the producer and the co-producer. The production budget, production schedule and payment schedule for payment of production budget by the co-producer to the producer, is mutually agreed between the parties and the same forms part of the agreement executed between the parties. (iii) The exploitation of the film is done as per mutual agreement between the co-producer and producer. In some cases, particularly when 100% of the production budget is funded by the coproducer, the film is distributed by the co-producer alone and


71

the exploitation proceeds are appropriated as per mutual agreement between the producer and co-producer. (iv) The Intellectual Property Rights (IPR) of the film are normally shared equally or in an agreed ratio between the producer and the co-producer. (v) In the event of failure on the part of the producer to complete the film, the co-producer is entitled for repayment of the entire amount paid by it to the producer until such date alongwith interest, at the rate as may be agreed between the parties or else the co-producer may, at its sole option, have the option to take over the production of the film and all IPR and exploitation rights in the film stand assigned in favour of the co-producer; (vi) In order to secure its investment until repayment of the finance amount, the co-producer seeks creation of security interest in its favour in various forms viz: e.

First and paramount charge/lien on the film (intellectual property) and tangible film materials (negatives and other paraphernalia) in favour of the co-producer;

f.

Post dated cheques issued by the producer in favour of the co-producer;

g. Personal guarantee/corporate guarantee issued by the producer in favour of the co-producer. h. The film and its materials (negatives and other paraphernalia) is registered with the laboratory in the name of the co-producer and no print can be removed from the laboratory without the consent of the co-producer; (vii) In the event the producer fails to complete the film at any stage, the co-producer is entitled to invoke the security interests created in its favour and in the process of such invocation, the coproducer may elect to either take over the production of the film or sell the under-production film to any third party 6. SPV MODEL OF CO-PRODUCTION: (i) In this arrangement, the producer incorporates a new company as a special purpose vehicle (SPV), for the production of the film. This SPV is treated as producer of the film for all purposes including as the repository of all the exploitation rights and Intellectual Property Rights of the Film. The co-producer then subscribes to the equity shares of the SPV. Thereafter, the producer and the co-producer are shareholders of the SPV. The shareholding ratio of the parties would be as per the commercial understanding between the parties. (ii) The board of directors of the SPV could be as per the commercial understanding and the same is captured under the shareholders agreement between the parties. Certain critical items / decisions with respect to the film or with respect to the exploitation of the film could be listed under the shareholders agreement requiring affirmative vote of the minority shareholder group. The subscription money is used by SPV for production of the film. (iii) Exploitation of the film is done by the SPV and all the proceeds of exploitation are received in the bank account of the SPV. (iv) The revenues received in the account of the SPV, after deduction of all the distribution expenses and after payment of all the distributor commissions and after payment of all statutory

taxes / expenses; are treated as profits in the books of the SPV. (v) The Profits of the film in the books of the SPV are shared in the form of dividends to both the parties as per their shareholding ratio in the SPV. 7. OTHER MODES OF FILM FINANCING DURING THE PRODUCTION OF THE FILM: a. Advances from distributors of a film against the grant of distribution rights to such distributors. These advances could be in the form of a refundable advances or non-refundable minimum guarantee amount. b. Loan from the Financial Institutions like Banks. c. Finance from Venture Capital Investors – This includes various Film Funds in India. 8. FINANCE FOR PRINT AND ADVERTISEMENT EXPENSES OF A FILM: (i) In this kind of arrangement, the financier funds the print and advertisement expenses (P&A Expenses) of the Film. The financier agrees to finance the P&A Expenses against an agreed return on investment i.e. (i) simple interest chargeable on the P&A Expenses payable from the date of disbursement until the repayment of the same, payable either prior to or after the release of the Film (e.g. P&A Expenses + interest @ 15% p.a. on the P&A Expenses until the repayment of the same), or (ii) fixed return on investment in the form of fixed percentage of the P&A Expenses, payable either prior to or after the release of the film (e.g. P&A Expenses + 20% of the P&A Expenses), or (iii) share in the profits of the film (e.g. P&A Expenses + agreed percentage of share in the profits of the film). The producer may also agree to assign certain percentage / share in the Intellectual Property Rights of the film to the investor. (ii) Usually one or all of the following collaterals / securities are created in favour of the financier by the producer: a.

Post dated cheques are issued by the producer in favour of the financier;

b.

First and paramount charge / lien is created on the film and its materials (negatives and other paraphernalia) in favour of the financier until the repayment of the P&A Expenses;

c.

Personal guarantee/corporate guarantee issued by the producer in favour of the financier.

(iii) The exploitation revenues of the film are appropriated by the producer in the following manner: a.

Firstly, towards recoupment of the P&A Expenses paid / incurred by the financier;

b.

Secondly, towards the fixed return on the P&A Expenses paid / incurred by the financier;

c.

Thirdly, towards the production budget of the film incurred by the producer;

d. Fourthly, towards the distribution expenses incurred by the producer; e.

Fifthly, towards the mutually agreed distribution commission of the producer;


Role and Rule of Law Media & Entertainment Industry Films : Chapter 8 : FINANCE AND PRODUCTION OF FILMS

72

f.

Lastly, any overflows/profits are shared between the financier and the producer in the agreed ratio.

B. INTERNATIONAL TREATIES ON

CO-PRODUCTION:

To promote the production of the foreign film in India and to promote production of Indian films in foreign countries, there are treaties signed between India and some foreign countries wherein the mutual incentives/ tax benefits/concessions are given by both the countries for the film co-produced as per these treaties between the entities of these countries. India has signed co-production treaties with few countries, as detailed hereunder: 1. The UK/India Co-Production Agreement (Treaty): This Treaty was ratified by both countries in October 2008. Some of the important provisions of this Treaty are as follows: The treaty provides for a detailed procedure, general requirements for a film to be co-produced and the benefits which would be accorded to such a film co-produced under this treaty. However, we are only summarising the benefits offered under this treaty, as under(i) To the extent that is permissible by the international law the parties shall allow for the temporary import and export, free of import duties and taxes of any equipment necessary for the production of an approved co-production. Each party shall allow any person employed in the making or promotion of an approved co-production to enter and remain in the country throughout out the making or the promotion of the film subject to any over-riding law in this regard. (ii) It further provides for additional benefits available only to coproductions with final approval including the benefit that each party (country) shall treat the film as a national film for the purposes of the benefits afforded in that country to national films including eligibility for any benefits in fiscal treatment subject to the fulfilling certain conditions of the treaty, the fiscal benefits available in either country are to be accorded only to that co-producer who is of that nationality. 2. Audio-visual Co-Production Treaty India and Germany: Some of the important provisions of this treaty are as follows: (i) The films which are produced within the framework of this treaty shall be deemed to be national films and entitled to claim all state support benefits available to the film and video industries and the privileges granted by the respected enforced provisions in either country. (ii) Permits temporary entry into the country. For approved co-productions, each contracting party shall facilitate entry into and temporary residence in its territory for technical and artistic personnel of the other contracting party and the import into and export from its territory of technical and other film making equipment and materials by producers of the other contracting parties. 3. Audio Visual Co-Production Treaty India and Italy: Some of the important provisions of this treaty are as follows: (i) Both the countries are to facilitate entry and short stay in their respective countries for directors, actors, producers, writers, technicians and other personnel prescribed in each co produc-

tion contract as per the applicable laws and the procedure for importing of equipment shall also be in accordance with the applicable laws. (ii) Subject to the restrictions contained in the legislation and regulations in force in the two countries no other restrictions were to be placed on the import, distribution and exhibition of Indian film, television and video productions in Italy or that of Italian film, television and video productions in India. Italy will be further under an obligation to abide by the norms of the European Union with respect to the free circulation of goods among Italy and other European Union countries. 4. Agreement on Audio Visual Co – Productions between India and Brazil: Some of the important provisions of this treaty are as follows: (i) It provides that such work shall be treated as a national audiovisual work and shall be fully entitled to all the benefits which are available under the laws of each contracting party. Specific benefits available in either country shall be accorded only to that co-producer who is of that nationality. (ii) It provides that it each party was to facilitate, in accordance with the domestic law, entry into and temporary residence in its territory for technical and artistic personnel of the other party, the import into and export from its territory of technical and other film making equipment and materials by producers of the other party and the transfer of funds destined for payments related to the audio-visual co-productions. 5. Agreement on Audio-Visual Co-Productions between India and New Zealand: Some of the important provisions of this treaty are as follows: (i) Each country shall permit in accordance with the domestic law, for all the approved co-productions, entry into and temporary residence in its territory for the nationals of the other party. (ii) Subject to the domestic law each party shall provide for temporary admission, free of import duties and taxes, of technical equipment for the making of co-production films. (iii) For the purpose of taxation laws which are in force in the two countries, shall be applicable, subject to the provisions of the Convention between the Government of New Zealand and the Government of the Republic of India for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income. 6. Audio Visual Coproduction Agreement between India and Poland: This Treaty was entered into in July 2012 to enhance bilateral cooperation in the films sector. The agreement establishes a legal framework for relations regarding audio visual co-production, especially films including animation & documentary films for the cinema and TV, as well as films intended solely for dissemination on analogue or digital data carriers. The agreement shall remain in force for a period of five years from the date of its entry into force. The films so produced shall be treated as national films in both countries and such films would not be treated differently from a domestically produced film in each of the coproducing countries. The Agreement would also facilitate producers, screenwriters, directors, technicians, actors and other specified personnel to enter and briefly stay in each other’s country.


Role and Rule of Law Media & Entertainment Industry Films

73

09. insurance

A. FILM INSURANCE Film business activities were given an industry status in 2000 and the Reserve Bank of India (RBI) allowed financial institutions and banks to provide funding towards film production. Nowadays, banks and NonBanking Financial Companies (NBFCs) before lending money to any film producer verify whether the concerned film is insured as a prerequisite for granting bank loans. Hence, taking insurance for a film has become a significant aspect of film production and funding. Film insurance provides production cover, errors and omissions and distribution cover, which broadly include any risks related to production/shooting of a film such as fire, injury or death of lead star cast, abandonment of project, copyright infringement as more particularly detailed below-

1. Key Elements of a film, like the principal cast, techniciansInsurance for Key Elements could arise in the event of various events like death, accident, illness, death in immediate family, natural calamity, force majeure/act of god, etc. Insurer’s liability is restricted to reimbursement of lost remuneration in event of above events, reshooting expenses and losses due to expenses on account of cancellation/postponement etc.

2. Third Party liability Coverage is due to injury/loss to members of any third party or public caused due to the shooting or production of the film. This will include any public interest litigations or any injury caused to any third party due to the shooting or the film.

3. Production equipment Any damage/loss to the production equipment due to, the following is covered-

► Standard fire and special perils ► Earthquake, terrorism, ‘Act of God’ perils ► Riots, strikes, malicious damage , flood, tempest, inundation ► Accidental external damages, faulty equipments, malfunctioning ► Breakdown (electrical, mechanical and electronic derangement) ► Burglary, theft and housebreaking whilst in operation, storage and transit. Insurer’s liability is limited to material damage caused to the production equipment.

4. Negative Film/Raw stock The policy will pay the insured actual cost of raw stocks, films, tapes etc for physical losses, damages sustained by them whilst in operation, storage and/or in transit as a result of the following► On all risk basis, standard fire and special perils ► Earthquake, terrorism, ‘Act of God’ perils ► Riots, strikes, malicious damage , flood, tempest, flood, inundation ► Political strikes, accidental external damages ► Breakdown (electrical, mechanical and electronic derangement) ► Burglary, theft and housebreaking ► Faulty stock of raw materials/film negatives, faulty equipments ► All raw film stock, recorded / exposed negatives (developed or underdeveloped), video tapes, matrices, inter-positive, positive, work prints, cutting copies, fine grain print colour (transparencies), reels, outwork and drawings, Software, hardware and related material used to generate computer images, sound tracks and tapes.

5. Accident Insurance This coverage is for all members of the production team on-location


74

Role and Rule of Law Media & Entertainment Industry Films : Chapter 9 : Insurance

and/or off-location at a predetermined rate. Coverage can be claimed for bodily injury resulting from accidents caused directly and solely by external, violent, visible means during the policy period.

6. Media Liability Insurance (Errors and Omission) Errors and Omissions Insurance Programme (Media Liability Insurance) protects the insured against the exposures of liability lawsuits. This policy responds to the lawsuits filed in respect of the following: 1. Defamation 2. Libel / Slander 3. Copyright Infringement 4. Trademark Infringement 5. Invasion of Privacy 6. Emotional Distress 7. Misappropriation (IPR) 8. Plagiarism 9. Negligence 10. False arrest, Detention or Imprisonment

7. Coverages/ Insured Perils Distributors Loss of Profit (DLOP) Insurance Programme: Insurer hereby agrees, subject to limitations, terms and conditions herein after mentioned, to indemnify the insured for their loss of revenue accruing to the insured due to any drop in collections/revenue directly attributable to:

► Force majeure and riot, strike, malicious damage ► Epidemics, national and state mourning, ► Strike, bandh call, ban call of the particular movie given by a political or a non-political organisation ► Any act of terrorism and/or threat thereof (whether actual or perceived) regardless of any other cause or event contributing concurrently or in any other sequence to the loss and also any loss resulting from or in connection with any action taken in controlling, preventing, suppressing or in any way relating to any act of terrorism or fear thereof. ► Blockade of public, access roads due to dispute, public demonstration, riots strike and civil commotion, malicious damage ► Act of God perils

B. COMPLETION BOND COMPANIES INTRODUCTION A completion guarantee is a bond provided by the guarantor that a film will be finished within the agreed time schedule. This guarantee basically insulates the financier from any over runs that result in cost escalations and increase the financing requirement. The guarantor gives a guarantee to the financier, on payment of a fee, that the film will be completed as per the schedule that is agreed upon. If there is a project overrun, the guarantor can take suitable action to protect his and the financiers’ interests. The guarantor would have entered into an agreement with the producer that would detail the commitments and liabilities of the producer towards the production and completion schedule for the film. The concept of a ‘completion guarantee’ first came up in the 1950’s in the United Kingdom where Film Finances Inc. took up a completion

guarantee for the film, Bandit Queen. This concept has slowly gained popularity not only in the United States but also other countries such as Hong Kong, Australia, New Zealand, Ireland, Canada and India. However, the success rates of the same in these countries varies.

FUNCTIONING OF COMPLETION BOND COMPANIES A producer usually secures a completion guarantee for the benefit of the bank or other financiers who agree to make the necessary production funding strike price available to the producer. In general, a completion guarantee assures banks and financiers that: 1. The producers will complete and deliver the film in keeping with the screenplay, budget and production schedule that the bank or financiers approved; or 2. The completion guarantor will complete and deliver the film in keeping with such pre-approved screenplay and production schedule, and advance such sums in excess of the pre-approved budget necessary to do so; or 3. In the event production of the film is abandoned, the completion guarantor will fully repay all sums invested in the film by the bank or financiers. The “strike price,” or the “production price” as it is sometimes referred, is the amount that the completion guarantor believes will be needed in order to complete and deliver the film. The strike price will generally comprise (1) the budgeted “above the line” and “below the line” production costs, including fringes and insurance costs; (2) interest and financing costs, if applicable; (3) the completion guarantor’s fee; and (4) the contingency allowance. For the completion guarantee to be effective, the full amount of the strike price must be made available for the production of the film. The first proceeds from distribution will go to pay off any loss of the bonding company. In order to determine whether a proposed film project presents an acceptable production risk, the completion guarantor will carefully examine and evaluate all significant factors facing the production. This process begins with the producer submitting to the completion guarantor the following main elements: script, budget, shooting schedule, résumés of key crew and descriptions of the project’s financiers and their respective financing commitments. Generally, completion guarantors prefer that the film’s distributors and financiers approve these key elements before they are submitted. The completion guarantor will require the producer to include an adequate contingency allowance in the budget. The contingency allowance may be a flat sum, but in most instances it is a fixed percentage of direct production costs (i.e., all production costs other than the contingency, interest and finance costs and the completion guarantee fee). The “standard” fee is 6% of your total budget. One of the requirements laid down by the bonding company is the standard requirement to keep aside an amount equal to 10% of the entire budget in cash.

SCOPE IN THE US AND UK As mentioned earlier, completion guarantees originated in the UK in the late 1950s. Contrary to film production in the US, which was dominated by major studios with little or no use for completion bonds, producers in the UK and Europe were truly independent and usually dealt with several outside sources of financing. Thus, the need for completion bonds arose to protect the investor’s interests. With the current increased involvement of European Banks and Film Investor Funds in American Film Financing, completion bonds have become almost standard in every production with a budget of


75

more than $2 million. Thus the scope of completion bonds in the US and UK is very wide with the top completion guarantors i.e. Film Finance Inc. as well as International Film Guarantors situated in both the abovementioned countries.

COMPLETION BONDS IN INDIA Los Angeles-based Film Finances and the Bobby Bedi-promoted Kaleidoscope Films joined hands to form the first film completion guarantee company, Film Completion Services, which provided a completion guarantee to a variety of movies including, the movie Mangal Pandey: The Rising, etc. The first movie to be produced with a completion guarantee, in India, was Bandit Queen in 1994. Banks such as IDBI earlier undertook film financing policies wherein the borrower was required to obtain a completion bond guarantee from

such agencies. Till such time, the guarantee was made available; the risk in this regard had to be mitigated suitably to the satisfaction of IDBI. However, this is no longer required now, unless the project is above Rs 20 crore. Even the General Insurance Corporation of India (GIC) has entered the film completion bond business as a reinsurer and also offers support to film completion guarantees.

Conclusion: Despite all this, completion guarantee has not taken off in India. Increasingly formal sources of finance are funding Indian films and completion guarantees will become a common thing in some years. Film financing in India has taken another step towards corporatisation. The reason for this being that there is no predictable legal framework to govern such a transaction and the law for doing so is scattered among various statutes.

A completion guarantee is a bond provided by the guarantor that a film will be finished within the agreed time schedule. This guarantee basically insulates the financier from any over runs that result in cost escalations and increase the financing requirement.


Role and Rule of Law Media & Entertainment Industry Films

76

10. TAX IMPLICATIONS ON PRODUCTION, DISTRIBUTION AND EXHIBITION OF FILMS T A. TAX DEDUCTIBLE AT SOURCE (TDS) Under

he production, distribution and exhibition of films involves following tax implications, viz:

the Income Tax Act, 1961

a) In a co-production agreement, the party financing the production budget is required to deduct Tax Deductible at Source (TDS) under the Income Tax Act, 1961. The (approximate) rate of this TDS is 2% of the budget payable by the financer. In the production agreements, the producer is required to deduct TDS in the following manner: i.

For line production agreement – TDS @ (approximately) 10% is deductible on the fees payable to the line producer;

ii. For the fees / remuneration payable to the Artists, technicians, director, cinematographer, writer, music composer, etc. – TDS @ (approximately) 10% is deductible; iii. For the fees payable to spot boy, driver, etc. – TDS @ (approximately) 1% is deductible; b) In case of transfer of copyrights, TDS is deductible @ (approximately) 10% against the consideration receivable for transfer of non-theatrical rights, while it is not deductible on the consideration receivable for transfer of theatrical rights.

B. SERVICE TAX: Background: The provisions relating to Service Tax in India were

brought into force with effect from July 1, 1994. Since the very inception, service tax was being levied on expressly specified services i.e. services specified in Section 65(105) of the Finance Act, 1944, which fall within the ambit of the definition of taxable service and were liable to be taxed under the charging Section 66 of the Finance Act, 1944. This list of services was known as the positive list. But with the passage of time, a need was felt to adopt an approach that has been operational in many developed countries - comprehensive approach i.e. the concept of negative list, whereby a specified list of services is expressly exempted from the purview of service tax and any other service which is not expressly mentioned in the said list would be charged. The relevant provisions of service tax applicable to the entertainment industry from time to time have been highlighted below as under:

Addition of Intellectual Property Services [vide Notification No. 17/2004-ST dated September 10, 2004]: In the Budget 2004-

2005, Intellectual Property Services were included in the service tax net (w.e.f. September 10, 2004). The definition of Intellectual Property Right (as stated in Section 65(55a)) expressly excluded copyright.

Addition of Copyright services [vide Notification No. 24/2010ST dated 22.06.2010]: In the Budget 2010 vide Finance (14/2010)

Act, 2010, the scope of service tax was extended to include Copyright Services.

Amendment of 2012: Chapter V of the Finance Act, 1994, contain-

ing provisions of Service Tax, has been amended by Section 143 of the Finance Act 2012 with effect from July 1, 2012. Sections 65, 65A, 66, 66A have ceased to apply and stand deleted from the statute from the notified date. The said deleted provisions would still continue to apply to the services provided prior to July 1, 2012. Thus, the principles of classification as mentioned in section 65A, which were applicable prior to July 1, 2012, have ceased to apply since with introduction of the negative list of services, there would arise no need to categorise the said services. With effect from July 1, 2012, all services are chargeable under the charging section 66B of the Finance Act which reads as follows: “There shall be levied a tax (hereinafter referred to as the service tax) at the rate of twelve per cent. on the value of all services, other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may be prescribed.”

Insertion of the negative list: Section 66D of the Finance Act contains a list of 17 services, the negative list of services, which have been kept outside the purview of service tax.

The relevant services applicable to the sector of Media & Entertainment kept outside the purview of service tax are: (e) trading of goods; (f) any process amounting to manufacture or production of goods; (g) selling of space or time slots for advertisements other than advertisements broadcast by radio or television; (j) admission to entertainment events or access to amusement facilities;


77

The scope of the definition of ‘Service’ as provided in section 65B (44) has also been widened with the inclusion of a list of ‘declared services’ inserted via section 66E of the Finance Act. Section 66E: The following shall constitute declared services, namely:–– (c) temporary transfer or permitting the use or enjoyment of any intellectual property right; (f) transfer of goods by way of hiring, leasing, licensing or in any such manner without transfer of right to use such goods; Apart from these, certain specific exemptions of taxable services from being charged under section 66B of the Finance Act have been made in entry 15 and 16 vide Notification No. 12/2012 and which are retained vide the Mega exemption Notification No. 25/2012. “15. Temporary transfer or permitting the use or enjoyment of a copyright covered under clause (a) or (b) of sub-section (1) of section 13 of the Indian Copyright Act, 1957 (14 of 1957), relating to original literary, dramatic, musical, artistic works or cinematograph films;” 16. Services by performing artist in folk or classical art forms of (i) music, or (ii) dance or (iii) theatre, excluding services provided by such artist as a brand ambassador.”

Amendment of 2013Vide notification dated March 1, 2013, the Central Government amended certain provisions of Service Tax Notification No.25/2012- dated June 20, 2012. Entry 15 of the 2012 Notification was accordingly subsistuted as under: “15. Services provided by way of temporary transfer or permitting the use or enjoyment of a copyright,(a) covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 (14 of 1957), relating to original literary, dramatic, musical or artistic works; or (b) of cinematograph films for exhibition in a cinema hall or cinema theatre;”;

The 2012 notification therefore clarifies the position with respect to temporary transfers of copyrights of literary, dramatic, musical, artistic works and cinematographic films (only for exhibition in cinema halls) which are exempted from service tax. However transfer of copyright in sound recording and cinematograph film (not exhibited in cinema hall) has not been exempted. The list of exemption only covers temporary transfer and not permanent transfer of copyright in section 13(1) (a) which would continue to attract service tax.

C. VALUE ADDED TAX (VAT) Background: VAT is a state subject, derived from Entry 54 of the State List. VAT is levied on ‘sale’ of goods, which may be of tangible or intangible movable goods. A producer has to pay VAT while giving the film print to a distributor for release. In states like Maharashtra, VAT is not applicable on transfer of theatrical rights. However, the same is payable on assignment / transfer of Non-theatrical rights. VAT imposed in various states is more particularly detailed in the table provided overleaf (page 80) In few states, VAT is payable by the producer on purchase of equipments required for the production of the film such as camera, film negatives and raw stock, materials for positive prints, materials required for

setting up of sets, etc.

D. GOODS AND SERVICE TAX (GST): Background: The replacement of the state sales taxes by the Value Added Tax in 2005 marked a significant step forward in the reform of domestic trade taxes in India. Implemented under Empowered Committee of State Finance Ministers, it addressed the distortions and complexities associated with the levy of tax at the first point of sale under the erstwhile system and resulted in a major simplification of the rate structure and broadening of the tax base. Buoyed by the success of the State VAT and as announced by the Empowered Committee of State Finance Ministers in November 2007, the Centre and the States are looking forward to the form of a ‘Dual’ Goods and Services Tax (GST), to be levied concurrently by both levels of government. Experts say that GST is likely to improve tax collections and boost India’s economic development by breaking tax barriers between States and integrating India through a uniform tax rate. Worldwide, more than 140 countries have introduced GST in some form. It has been a part of the tax landscape in Europe for the past 50 years and is fast becoming the preferred form of indirect tax in the Asia Pacific region. It is interesting to note that there are over 40 models of GST currently in force, each with its own peculiarities. The GST rates worldwide are typically between 16 per cent and 20 per cent. In India also, the rate of GST is expected to be in the same range. The essential details of the dual GST are still not finalised and the implementation of GST may take some more time.

What is GST: Goods and Services Tax (GST) is a comprehensive tax levy on manufacture, sale and consumption of goods and services at a national level. Through a tax credit mechanism, this tax will be collected on valueadded goods and services at each stage of sale or purchase in the supply chain and will replace all indirect taxes levied on goods and services by the Indian Central and State Governments. The system allows the set-off of GST paid on the procurement of goods and services against the GST which is payable on the supply of goods or services. However, the end consumer bears this tax as he is the last person in the supply chain.

The implications of GST (after it is implemented): GST will be

implemented concurrently by the Central and State Governments as Central GST and State GST respectively and would replace the CENVAT and the Service Tax levied by the Centre and the VAT levied by the states. All these are multi-stage value-added taxes. Under GST, the taxation burden will be divided equitably between manufacturers land services, through a lower tax rate by increasing the tax base and minimizing exemptions. GST will be levied only at the destination point, and not at various points (from manufacturing to retail outlets). Currently, a manufacturer will have to pay tax when a finished product moves out from a factory, and it will again be taxed at the retail outlet when sold. Exports will be zero-rated and imports will be levied the same taxes as domestic goods and services adhering to the destination principle.

E. STAMP DUTY: Background: Stamp duty is a subject which falls under all three lists


78

Role and Rule of Law Media & Entertainment Industry Films : Chapter 10 : TAX IMPLICATIONS ON PRODUCTION, DISTRIBUTION AND EXHIBITION OF FILMS

under Schedule VII of the Constitution of India. Items covering stamp duty under Schedule VII of Constitution are as under:

List I i.e. Union List90. Taxes other than stamp duties on transactions in stock exchanges and futures markets.

91. Rates of stamp duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts.

List II- State List 63. Rates of stamp duty in respect of documents other than those specified in the provisions of List I with regard to rates of stamp duty.

List III-Concurrent List 44. Stamp duties other than duties or fees collected by means of judicial stamps, but not including rates of stamp duty. The Central Act governing stamps is the Indian Stamp Act, 1899. Stamp Duty being a State subject as well and every State has its own Stamp Duty Acts. The relevant Stamp Duty payable in the state of Maharashtra on agreements relating to the entertainment industry, including film production agreements in accordance with the Maharashtra Stamp Act, 1958 (earlier known as Bombay Stamp Act, 1958) is as under:

Typically all cast and crew agreements fall under Art. 5 (h) A (iii) i.e. specific performance by any person or a group of persons where the value of contract exceeds Rs 1 lakh – a. If the amount agreed does not exceed Rs 10 lakh – Rs 2.50 for every Rs 1000 or part thereof on the amount agreed in the contract, subject to minimum of Rs 100 b. In any other case- Rs. 5 for every Rs. 1000 or part thereof on the amount agreed in the contract.

All agreements providing for assignment of copyrights such as acquisition agreements fall under: Art. 5 (h)A(v) i.e. Assignment of Copyright under the Copyright Act, 1957 a. if amount does not exceed Rs 10 lakh- Rs 2.50 for every Rs 1,000 or part thereof on the amount agreed in the contract subject to minimum of Rs 100. b. In any other case- Rs 5 for every Rs. 1000 or part thereof on the amount agreed in the contract.

Other documents fall under the residuary clauses i.e. Article 5(h) A (iv): which states that creation of any obligation, right or interest and having monetary value, but not covered under any other article (a) if the amount agreed does not exceed Rs. 10 Lakhs: Rupee One for every Rs. 1,000 or part thereof on the amount agreed in the contract subject to minimum of Rupees 100 is payable. (b) And in any other case: Rs. 2 for every Rs. 1,000 or part thereof on the amount agreed in the contract is payable

Article 5 (B) i.e. if not otherwise provided for- One Hundred Rupees Stamped documents give evidentiary value and form permissible evidence in the Court of law. The instruments that are not properly stamped are not admissible in evidence. If an instrument is not duly stamped the stamp authorities may levy a penalty (as provided in Section 59 of the Maharashtra Stamp Act, which ranges from penalties to imprisonment in the case of deliberate evasion of stamp duty. However, penalties are not enforced as seen in Section 40 of the Act where the instruments were not stamped due to a bona fide case of accident, mistake or urgent necessity. Where any instrument of the nature described in any article in Schedule I of the Maharashtra Stamp Act and relating to any property situate or to any matter or thing done or to be done in the state of Maharashtra is executed out of the State and subsequently such instrument or a copy of the instrument is received in the State- the amount of duty chargeable on such instrument or a copy of the instrument shall be the amount of duty chargeable under Schedule I on a document of the like description executed in the State of Maharashtra less the amount of duty, if any, already paid under any law in force in India excluding the State of Jammu and Kashmir on such instrument when it was executed;

F. SHOW TAX: Show Tax is the subject of a local self government, such as municipality, municipal corporation, gram panchayat, etc. The Show Tax is a tax payable to the local self government on every show of a film in any theatre. The rate of Show Tax varies from place to place and varies with each corporation / municipality. In Mumbai, the rate of Show Tax per show is Rs 60/- for A/C cinema halls and Rs 45/- for non A/C cinema halls.

G. ENTERTAINMENT TAX: Entertainment Tax/Duty is a State Subject and every State has different rates of Entertainment Tax / Duty. Entertainment Tax is collected from the patrons who visit the cinema hall for watching a film i.e. the ticket purchased by a patron clearly mentions the amount of Entertainment Tax paid by such patron, which goes to the respective State government. In Mumbai the rate of Entertainment Tax / Duty is 45% of admission rate. On an average, in India the rate of Entertainment Tax is about 30%. In many states such as Maharashtra, the respective State Governments introduced a policy granting Entertainment Tax holiday for people, who would set up multiplexes, with the required specifications. These policies were introduced to promote new multiplexes / malls, which add to the infrastructural growth and to promote more and more people visiting the cinema halls for watching films, since with the onslaught of cable, the number of people visiting cinema halls was reducing. However, the Punjab Government has completely exempted all the cinema halls, whether it is single screen or multiplex, from the levy of Entertainment Tax. Film Producer Suneep Singh Bedi has filed a petition in the Supreme Court1 challenging the illegal efforts of the State Governments charging entertainment tax discriminatingly on cinematograph films only on the basis that (a) the movies are of language other than the local language (b) they have been filmed in a location outside the State (c) the number of prints produced is more than a particular number showing the national or international character of the movie.Notice has been issued by the Supreme Court and the matter is pending before the Supreme Court.

Or 1

Sundeep Singh Bedi v/s Union of India –WP (C) No. 502/ 2013


79

State of

Vat

19. Uttar Pradesh: Schedule II, Part A, Entry 3, “Intangible goods like copyrights, patent, rep, license etc; Transfer of rights to use of goods ► 4%

1. Rajasthan: Schedule 4, Entry 3 “All intangible goods like copyright, patent, REP license etc.” ► 4%

18. Jharkhand: Schedule II, Part B, Entry 5,“All intangible goods like copyright, patent, rep license etc.” ► 4%

2. Punjab: Schedule B, Entry 59 “Intangible goods of all kinds like copyright, patent and rep license” ► 5.5%

17. West Bengal: Schedule C, Part 1, Entry 4 “All intangible goods like copyright, patent and replenishment (REP) licence, other than those specified elsewhere in this Schedule or any other Schedule.” ► 4%

3. Uttaranchal: Schedule II B, Entry 4, “All intangible goods like copyright, patent, replicense etc.” ► 5%

16. Assam: Schedule II A, Entry 3, “All intangible goods like copyright, patent,replenishment license.” ► 4%

4. Madhya Pradesh: Schedule II, Entry 3, “All intangible goods like copyright, patent, rep license etc.” ► 4%

15. Arunachal Pradesh: Schedule II, Entry 2, “All intangible goods like copyright, patent, rep. license etc” ► 4% 14. Meghalaya: Schedule II, Entry 3, “All intangible goods like copyright, patent, rep license etc.” ► 5%

5. Maharashtra: Schedule A, Entry 27 “Goods of incorporeal or intangible character, other than those notified under entry 39 in Schedule C” ►NIL Schedule C, Entry 39 –“Goods of intangible or incorporeal nature as may be notified from time to time by the State Government in the Official Gazette.” ► 4%

3

15 1

19

16 14 18

4

6. Goa: Schedule B, Entry 5 “All intangible goods or goods of incorporeal nature like copyright, patent, rep license, Exim scrips, SIL licenses, trade marks, import licenses, export permits or licenses or quota, software package, credit of duty entitlement pass book, technical know-how, goodwill, designs registered under the designs Act, 2000(Central Act 16 of 2000), sim card used in mobile phones and franchise, that is to say an agreement by which the franchise is granted representational right to sell or manufacture goods or to provide service or undertake any process identified or associated with the franchise, whether or not a trade mark, service mark, trade name or logo or any symbol, as the case maybe.” ► 5% 7. Kerala: Schedule 3, Entry 68 “Intangible goods like Copyright, Patent, R.E.P. License” ► 5%

13. Mizoram: Schedule II, Entry 3, “All intangible goods like copyright, patent, rep license etc.” ► 4%

2

11

5

10

6 8

13 17

12

12. Tripura: Schedule II A, Entry 3, “All intangible goods like copyright, patent, rep license etc.” ► 4%

11. Orissa: Schedule B, Part II Entry 3 “All intangible goods like copyright, patent, rep license etc.” ► 4% 10. Andhra Pradesh: Schedule IV, Entry 2 “Goods of intangible or incorporeal nature as may be notified from time to time by the State Government, and including: Trade Marks, Copyright, Designs, Goodwill etc.” ► 4%

7

9

9. Tamil Nadu: Schedule 1 Part B, Entry 70 “Intangible goods like copyright, patent, REP license” ► 5% Schedule 1, Part C, Entry 17- “Cinematographic equipments, including video cameras, projectors, over-head projectors, enlargers, plates and cloth required for use therewith, sound-recording and reproducing equipments, parts and accessories thereof and lenses, exposed films, film strips, arc or cinema carbons, cinema slides.” ► 14.5%

8. Karnataka: Schedule 6, Entry 10 “Processing, printing and supplying of cinematographic films” ► 5%


80

Role and Rule of Law Media & Entertainment Industry Films

11. SHOOTING COMPLIANCES BY FOREIGN FILMMAKERS AND ARTISTES

A.

SHOOTING OF FILMS IN INDIA BY A FOREIGN FILM MAKER: Foreign producers wishing to shoot in India have to go through myriad statutory and procedural time consuming clearances. With growing concerns in the film industry over this issue, the Ministry of Information and Broadcasting (MIB) is now planning to set up a film commission to act as a single window for international filmmakers looking to shoot in India. Currently, to shoot a film in India, permissions have to be sought from the MIB for shooting feature films and from Ministry of External Affairs for commercials, documentaries and music videos. Further clearances are required from the Home Ministry with regard to security and from the Customs Department for the purposes of import of shooting equipments in India.

Approvals/ Clearances required by foreign film makers for shooting in India: 1. Approval from the Indian Embassy: The producer intending to shoot a film in India needs to apply for an approval in his/her own country at the Indian Embassy. 2. Approval from Miscellaneous Ministry/Departments: After getting an approval from the Indian Embassy in the respective country, approval from the following ministries and/or departments is required: ► Restricted Area Permits (RAP)/Protected Area Permit (PAP) is required from the Ministry of Home Affairs, New Delhi for film shooting in certain states of India. (this has to be in accordance with the Foreigner (Protection of Areas) Order), 1958. ► Approval from the Archaeological Survey of India (ASI) in case of film

shootings at monuments which are controlled by the ASI. Approval from State Government archaeological departments if the monument comes under it. ► Approval from the Ministry of Railway needs to be sought if the shooting is done at the Railway Station or the producer is hiring a train for film shooting and then obtain a State Railway Zone. ► Approval from the respective State Governments of India. ► Approval from the Ministry of Environment and Forest, New Delhi, in case of film shooting for wild life in jungles and then from the state forest department. ► Approval from the Ministry of Civil Aviation and the Ministry of Defence for the purposes of aerial photography. ► If location at which the shooting to be done is a Defence area then permission from Ministry of Defence needs to be taken. ► If location is a sensitive one from internal security point of view in that case permission should be to obtain from Ministry of Home Affairs. ► In case of shooting at the Airports of India we need to obtain the permission from the Director of that Airport and incase of shooting at tarmac we need to take permission from the office of Director General of Civil Aviation New Delhi & also from the Bureau of civil Aviation Security New Delhi.

Revised Guidelines for shooting in India for the foreign artistes, by the Ministry of Information and Broadcasting ► Letter of Intent: A letter stating the intention to shoot in India and other details like dates and chosen locations for shooting with the particulars of the cast and crew needs to be addressed to the MIB a month


81

before the shooting schedule. Along with the said letter, four copies of the final, detailed shooting script, a draft/cheque for US$ 225 drawn in favour of the MIB (that is a fee for scrutiny of the script), detailed shooting locations and particulars regarding the cast and crew coming to India needs to be sent. No fee is required for shooting documentaries in India. Acquiring the permission to shoot would take approximately three weeks. Once the permission letter is issued it would facilitate permission from other local authorities, which may, in some cases, need to be obtained directly from these authorities. ► For film based on a personality: The Ministry suggests that in case the film intends to portray any living personality as a character, such script should be shared with such person or his/her legal heirs, before beginning the shooting and a ‘no objection letter’ is obtained to that effect. Such a letter would expedite the clearance of the application, and also guard against the possibility of any defamation or libel suits. ► Co-production with foreign party: In case the film is intended to be shot as a co-production, a copy of the agreement between foreign party and an Indian party indicating the role of each party, its responsibilities and liabilities, must accompany the application. ► Shooting in sensitive areas: In the event the film requires shooting in the scenic but sensitive areas of Jammu & Kashmir, the North Eastern India or border belts, the application would be considered for specific approval in consultation with the Ministry of Home Affairs. In such cases, more time would be required to process such an application. ► Script scrutiny: The script submitted would be scrutinized by an expert from the panel constituted for the said purpose. If considered necessary, to facilitate the shooting, a liaison officer may be attached to a film shooting team. This officer would assist in getting local clearances, and would also provide an interface with any local institutions. Where a liaison officer is so attached to the shooting team, his expenses would be borne by the Government of India. ► Shooting films on sensitive subjects: Films made on subjects of political, religious or socio cultural sensitivity would be required to be shown after its completion, to a representative of the Government of India, in India or in an Indian Mission abroad, before its release anywhere in the world. This is done to ensure that the film has been shot in accordance with the scrutinized script and that the film has nothing objectionable from the point of view of presentation of a correct and balanced perspective on the topic covered. The Ministry further states that in the event there are any material changes or deviation from the approved script permission to be taken from the Ministry before shooting such scenes. ► Equipment: If for the purposes of shooting, equipments, props and costumes are brought along, a list of the equipment to be temporarily imported should be provided to the Ministry of Information & Broadcasting. This will enable them to make a recommendation to the customs authorities to exempt the temporary import from customs duty.

Visa Requirements for Artistes as well as professionals from Production Companies: Entry will not be allowed into India without an appropriate visa. Overseas personnel wishing to work in India will require an Employment Visa irrespective of the number of days of work. Types of Visas: 1. Business Visa: Valid for 6-months/one year with multiple entries. In order to obtain a Business Visa, a letter (on company letterhead) from Sponsoring Organization is needed which would indicate the nature of applicant’s business, probable duration of stay, places and organizations

to be visited incorporating therein a guarantee to meet maintenance expenses etc. should accompany the application. 2. Employment Visa: Employment Visa is initially issued for oneyear stay subject to fulfillment of certain conditions. This can be extended at Foreigners Regional Registration Office in India if the job contract continues. 3. Journalist Visa: A ‘J’ Visa would be required for the cast/crew. This applies to both feature as well as documentary films. Foreigners need prior approval from the Ministry of Information and Broadcasting in order to shoot films in India, both feature as well as documentary. 4. Permit to visit Restricted/Protected Areas: For visit to Restricted/ Protected Areas, a separate application, giving details of the places to be visited, should accompany the visa application. All foreign nationals are required to obtain permits for each visit to a restricted/ protected area.

Conditions to be fulfilled for the grant of Employment Visa for Foreign Artistes: ► Particulars of Applicant and his/her Employment: The Applicant must be a highly skilled and/or qualified professional who is being engaged or appointed by a company/organization/industry/undertaking in India on contract or employment basis, such visas would not be granted for jobs for which qualified Indians are available, for routine, ordinary or secretarial/clerical jobs. Such a person seeks to visit India for employment in a company/firm/ organization registered in India or for employment in a foreign company/ firm/organization engaged for execution of some project in India. The foreign national being sponsored for an Employment Visa in any sector should draw a salary in excess of a particular amount elaborated country wise in the case of US, it is US$ 25,000 per annum. ► The foreign national must comply with all legal requirements like payment of tax liabilities etc. The Employment Visa must be issued from the Indian Embassy/Consulate country of origin or from the country of domicile of the foreigner provided the period of permanent residence of the applicant in that particular country is more than 2 years. The name of the sponsoring employer / organization shall be clearly stipulated in the visa sticker. Employer’s Responsibility: The Indian company / organisation engaging such foreign nationals are responsible for their conduct during their stay in India and are also responsible for their departure from India upon expiry of their Employment Visa. The Embassy/ Consulate may grant an employment visa, which is valid for a year, irrespective of the duration of the contract. Further extensions of up to 5 years may be obtained from MHA/ FRRO in the concerned state in India. The visa duration starts on the day of issuance, and not on the day of entry into India. ► Long Term Employment: It is a mandate for all foreigners arriving on Long Term (More than 180 days) Employment Visa (E) to register themselves within 14 days of their first arrival in India, irrespective of the duration of their stay, required to adhere to the Special Endorsement made on the Visa by the Indian Mission, etc. Further, the employer would need to make sure of their exit after the completion of their contract/ work. ► Other Instructions: Foreign nationals undertaking modelling assignments, dance shows, advertisements, bollywood etc. with different companies would be allowed to register but would be granted three months time to submit documentary proof to the effect that they would be getting remuneration of at least a minimum amount per annum (differs from country to country) in US, it is $ 25,000 only. If they are not able to produce documentary proof to the effect they may be granted


82

Role and Rule of Law Media & Entertainment Industry Films : Chapter 11 : TAX IMPLICATIONS ON PRODUCTION, DISTRIBUTION AND EXHIBITION OF FILMS

immediate exit after 3 months from the date of registration. ► Illegal Employment: In the event any foreign tourists are used for a particular shot in the movie, who have entered the country on an Entry visa, Business visa or Tourist visa, the employers (producers) will be liable for illegal employment as it’s a mandate to obtain an Employment visa in the event the employer is an Indian and even if the project is really small.

B.

SHOOTING REQUIREMENTS BY INDIAN CREW AT OVERSEAS SITES: An increasing number of Indian films are being shot at locations abroad. The Indian crew has to comply with legal and procedural requirements, which vary from country to country.

For instance In New York, the Mayor’s Office of Film, Theatre and Broadcasting offers permits, free police assistance and free access to public locations. Permit coordinators work with the guest team to ensure that their foreign insurance carrier meets the local requirements and that permits are available to the visiting team.

Shooting in New York City in the United States would require the following permissions: Petition for worker status The production company needs to file Form I-129 Petition for Nonimmigrant Worker with the US Citizenship and Immigration Service, around three or four months prior to one’s trip for employees to be granted nonimmigrant worker status. The production company or producer must file this form and submit a nonrefundable application fee for each person entering the country. Apply to the US Department of State for temporary worker visa Applicants for temporary work visas should apply at the American Embassy or Consulate Office in the region of their place of permanent residence. Each applicant for a temporary worker visa must pay a nonrefundable application fee and submit the necessary documents. Types of visas

O-1: For Artists of Extraordinary Achievement (actors, direc-

tors, producers, other singular professionals known for their craft). Requirements: ► Lead or starring role in distinguished production; ► National or international achievement recognition; ► Distinguished reputation of production; ► Record of significant commercial success or acclaim; ► Recognition by critics, organizations, government, agencies and experts; ► High salary compared to others in field.

O-2 Supporting cast and crew (actors, assistant directors, crew who are essential or have been attached to O-1 talent)

► Pre-existing, long standing working relationship with O-1 ► Have engaged in significant work on production such that participation will be essential to production.

B-1 Business Visitor/consultant visas. L-1 and E Visas - International transfers for production companies

with offices in the US. P-1 Classification applies to individual or team athletes, or members of an entertainment group that are internationally recognized; P-2 Classification applies to artists or entertainers who will perform under a reciprocal exchange program; P-3 Classification applies to artists or entertainers who perform under a program that is culturally unique (same as P-1); and P-4 Classification for the spouse and children of P1, P-2, and P-3 visa holders Bringing equipment into the US

There are two ways to bring equipment into the United States: 1) ATA Carnet - Over 75 countries are part of the Carnet Agreement. Upon entry, one will need to leave a deposit against the value of the equipment, which is refunded when one leaves. If one`s country is a member of the ATA Carnet Agreement then the applicant will need to get in touch with the National Guaranteeing Association in their country of origin. 2) Temporary Importation Entry (T.I.E.) - For productions coming from non-ATA Carnet countries, the applicant will need to hire a US Customs Broker, who is licensed by the US Department of the Treasury, to put together a Temporary Importation Entry package. Customs Brokers are the only people who can do this. Thus one can see that the list of requirements is extensive and will vary for each country/state/city. Transfer of equipment:

ATA Carnet: ATA Carnet is a universally accepted customs document issued in 75 countries including India, aims at facilitating temporary admission of goods into a member country without payment of normally applicable duties and taxes. Its operation is administered by World ATA Carnet Council (WATAC), ICC, Paris, which governs the operation of the ATA Carnets in all participating 75 countries. It eliminates the need to purchase temporary import bonds. So long as the goods are re-exported within the allotted time frame, no duties or taxes are due. The acronym ATA is a combination of French and English phrases, Admission Temporaire/Temporary Admission. ATA Carnets broadly applies to three categories of merchandise commercial samples, professional equipment and goods for use at exhibitions and fairs. With the exception of perishable or consumable items, the product range is nearly limitless. The key benefit using an ATA Carnet is that it is valid for six months to a year and for multiple trips and a single document is enough for clearing goods in different countries. In India, the Federation of Indian Chambers of Commerce and Industry (FICCI) is the approved body to issue ATA Carnets. It has been appointed as the National Guaranteeing and Issuing Association for ATA Carnets. Currently in India, Carnet is allowed only with respect to admission of goods for international trade fair/ exhibition. It is proposed to expand the same to cover commercial samples, professional equipment, private exhibitions, film shootings, musical troupes, sports and media coverage etc. FICCI, which is the National Issuing and Guaranteeing Association (NIGA) for implementing ATA Carnets in India, is pursuing the matter with the Ministry of Finance for the expansion of scope of system to cover professional equipment and commercial samples.


83

Sectortwo 85 97

CHAPTER I: INTRODUCTION

109 CHAPTER VII: COMPLIANCE CHECKLIST

CHAPTER II: UPLINKING AND DOWNLINKING GUIDELINES

90

98

CHAPTER III: REGULATORY FRAMEWORK

A.

Compliance of animal welfare laws

B.

Compliance of Drugs and Magical Remedies Act

C.

Compliance with NCPCR Guidelines

D.

Compliance with National Flag Code and the Emblems and Names (Prevention Of Improper Use) Act, 1950

A.

Trai Regulations

B.

Cable Television Networks (Regulation) Act, 1995

E.

Compliance with gaming, gambling laws

C.

Cable Television Networks Rules, 1994

F.

D.

Duration of advertisements on television

Compliance with guidelines regarding obscenity, sex and nudity

E.

Indian Broadcasting Federation (ibf) guidelines

G.

Compliance with guidelines prohibiting indecent representation of women

F.

The Electronic media monitoring centre (emmc)

H.

Compliance with guidelines regarding depicting violence

G.

News Broadcasters Association (nba) - code of ethics and broadcasting standards

I.

Compliance with guidelines regarding religion

J.

H.

Advertising Standards Council of India (asci)

Compliance with guidelines regarding depicting tobacco and alcohol consumption

K.

Compliance with guidelines regarding broadcast of superstitious material

L.

Representation of special children

CHAPTER IV: MEASUREMENT OF VIEWERSHIP A.

Tam and intam

M. Pre-natal diagnosis

B. Disputes C.

Policy guidelines for television rating agencies in india

101 CHAPTER V: IMPACT OF COPYRIGHT

N. Contests

114 CHAPTER VIII- SPORTS BROADCASTING A.

The Sports Broadcasting Signals (mandatory sharing with Prasar Bharti) 2007.

B.

Case laws

AMENDMENT ACT 2012 A.

Payment of royalties by broadcaster

B.

Statutory licensing

103 CHAPTER VI: MISCELANEOUS DIPSUTES A.

Disputes on titles

B.

Disputes on obscene content

C.

Disputes on format rights

D.

Disputes on moral rights

E. Tdsat F.

John Doe orders

118 CHAPTER IX: DIGITISATION

Disputes pertaining to digitisation

202 annexure 2


84

Role and Rule of Law Media & Entertainment Industry Films : Chapter 1 : introduction

Television Highlights • Rulings in cases regarding telecast show timings of programmes such as Sach Ka Saamna and Bigg Boss have led to a debate regarding time slots for airing content unsuitable for unrestricted public viewing. • In Pratibha Nathani vs Union of India (2005) the court directed cable operators not to broadcast any films with an ‘A’ ceritificate on telelvision channels. In a subsequent case, Pratibha Nathani vs Union of India (2006), the Bombay High Court clarified that the films carrying ‘U’ and ‘U/A’ certificated belong to the same class of films viz., for unrestricted public exhibition. • Time slots for airing ‘A’ certified films recertified as ‘U/A’ for TV broadcast is also under debate following public interest litigations filed against the broadcast of films such as, The Dirty Picture. The Government is considering an amendment to the Cable Television Networks Regulations Act, 1995 to resolve the issue. • Sports Broadcasting: In Secretary, Ministry of Information and Broadcast vs Cricket Association of Bengal (1995), the court held that a private agency having the right to telecast a cricket match had to share the feed with Doordarshan as viewers’ rights would be trampled if cricket matches are not telecast through Doordarshan. • In New Delhi Television Ltd. Vs ICC Development (International) Ltd. & Another (2012), the court permitted footage of live cricket matches to be used by news channels while reporting sports events in both hard news and sports news programmes on the condition that the programmes would be in the pre-existing news format with no premium advertising. • TRAI notified the Standards of Quality of Service (Duration of Advertisements in Television Channels) (Amendment) Regulations, 2013 on March 22, 2013 which requires that no broadcaster shall, in its broadcast of a programme, carry advertisements exceeding twelve minutes in a clock hour. The Regulation has been challenged by several broadcasters and the Delhi High Court has granted an interim stay on the application of this Regulation. • In the case of M/s. Teleshop Teleshopping v/s The Advertising Standards Council of India & another (2014), the Bombay High Court ruled that ASCI in the garb of acting as a voluntary self regulatory Council cannot act as a statutory regulator and cannot arrogate to itself the powers of restricting/restraining or causing the restriction/

restraint of any commercial advertisements belonging to the Plaintiff who is not a member of ASCI. • Ministry of Information and Broadcasting vide its Advisory dated August 21, 2014 has stated that non-compliance of ASCI’s Code of self regulation in advertising is a violation under Rule 7(9) of the Advertising Code under Cable Television Networks (Regulation) Act, 1995 and Rule 1994 • Broadcast Audience Research Council (BARC) aims to enter the market with its new system for TV ratings in the month of October 2014 whereby it is targeting to have at least 25,000 metres across 20,000 households at the beginning of October. • MIB issued policy guidelines for television rating agencies in India on January 9, 2014. Kantar Market Research Services Private Limited has challenged the cross holding restrictions in these Guidelines before the Delhi High Court and obtained an interim stay on the said provisions. • Multi Screen Media Pvt. Ltd and Star India Private Limited obtained John Doe orders wherein rogue websites and unknown websites (John Doe) were restrained from communicating the FIFA World Cup, 2014 and the recent India-England Series Matches, 2014 respectively. Several internet service providers, Department of Telecommunications (DoT) through Ministry of Communications and Information Technology and Department of Electronics and Information Technology (DEIT) were also arrayed as defendants to ensure effective implementation of any orders which would be passed by the court. Over 200 websites were blocked by the ISP’s following the orders passed by the Delhi High Court. • In the case of Star India Private Limited v/s Akuate Internet Services Private Limited (2013), the Supreme Court upheld the interim order passed by the single judge of the Delhi High Court recognizing the right of the plaintiff over live feed of cricket matches and restraining the defendants from providing minute by minute updates of matches on mobile and digital platforms without license from the plaintiffs. • Local cable operators in several states have challenged the Standards of Quality of Service (Digital Addressable Systems) Regulations, 2012 of the TRAI as being discriminatory against them and in favour of the Multi System Operators.


Role and Rule of Law Media & Entertainment Industry Television

85

01. introduction

T

elevision transmission was started in India in the terrestrial mode in 1959. This was a modest beginning with an experimental telecast in Delhi. Regular daily transmission commenced in 1965. From a single government owned channel, Doordarshan (DD), the sector has grown to boast more than 600 multilanguage channels, which engage a viewership running into millions. Globalisation and liberalisation of the Indian broadcasting sector led to the entry of various new players, national as well as international, in the television industry. This gave rise to the need to structure the industry in terms of the legalities involved as well as content regulation and funding. Media houses began developing their equity by fragmentation of viewership on parameters of age, sex and economic background. They develop content, which specifically caters to these clusters. Broadcasters have experimented with formats by introducing reality shows, talent hunts and so on. This aggressive competition between the players led to a sudden explosion of a variety of content/ information received by viewers on television, which gave rise to the urgent need of monitoring as well as setting up a legal framework to regulate the broadcasting of content through television cable networks. The television sector has seen a rapid growth in the last decade. The television industry was valued at Rs 329 billion in 2011 and is expected to touch Rs 735 billion by 2016. Flourishing DTH, cable digitisation and launch of new digital platforms for content delivery have completely changed the face of media distribution over the last five years. Digitisation of television initially in the metros and thereby in the major cities and urban areas has far reaching advantages. It

will result in superior picture quality and increased choice of channels to the end consumers. Digitisation will solve the problem of capacity constraint and will enable incorporation of value added services (viz. Pay per View, Time Shifted Video, Personal Video Recorder, Near Video on Demand, Radio services, Broadband etc.) in the offerings to the customer, which would enhance the range of choice for the customer and improve the financial viability of operations for the service provider. Addressability will ensure choice of channels to the consumer and transparency in business transactions and will build stakeholder confidence in the sector. It will also effectively address the issue of piracy. There are at least five basic types of television in India: (i) broadcast or over-the-air television; (ii) unencrypted satellite or free-to-air; (iii) Direct-to-Home (DTH), (iv) cable television; and (v) Internet Protocol Television (IPTV).

TERMS DEFINED: (i)

Broadcaster: means any person including an individual, group of persons, public or body corporate, firm or any organisation or body who/which is providing broadcasting service and includes its authorised distribution agencies.

(ii)

Direct to Home (DTH) Service: means distribution of multi channel TV programmes by using a satellite system to provide TV signals directly to a subscriber’s home without passing


86

Role and Rule of Law Media & Entertainment Industry Television: Chapter 1: introduction

Digitisation of television will provide viewers with superior picture and sound quality, large bouquet of channels, choice of channels, games, and movies on demand. It will also effectively address the issue of piracy.

offered to the distributor of TV channels or to the subscriber, as the case may be;

through an intermediary such as a cable operator or any other distributor of TV channels; (iii) Commercial Subscriber: means any subscriber who receives a programming service at a place indicated by him to a service provider and uses signals of such service for the benefit of his clients, customers, members or any other class or group of persons having access to such place; (iv) Multi-System Operators (MSO) (providing signals through analogue cable): means any person who receives a broadcasting service from a broadcaster and/or their authorised agencies and re-transmits the same to consumer and/or re-transmits the same to one or more cable operators and includes his/her authorised distribution agencies. (v)

Local Cable Operator (LCO) (connected to MSOs): means any person who provides cable service through a cable television network or otherwise controls or is responsible for the management and operation of a cable television network. Mainly an LCO provides last mile connectivity between an MSO and the subscriber.

(vi) Aggregator: means any person including an individual, group of persons, public or body corporate, firm or any organisation or body authorised by a broadcaster/ multi system operator to make available TV channel(s), to a distributor of TV channels (MSO/ LCO).

For instance, Star Den, Zee Turner and MSM Discovery Pvt. Ltd are aggregators of channels belonging to several broadcasters including Star, Zee, NDTV, Fox and Sony. An aggregator packages and forms bouquets of various channels of broadcasters for offering the same to the MSOs and DTH operators.

(vii) Basic service tier: means a package of free-to-air channels to be offered, with an option to subscribe, by a cable operator for a single price to subscribers of the area in which his cable television network is providing service; (viii) Bouquet of channels: means an assortment of distinct channels, offered together as a group or as a bundle; (ix) Bouquet rate: means the rate at which a bouquet of channels is

(x)

Carriage Fee: means any fee paid by a broadcaster to a distributor of TV channels, for carriage of the channels or bouquets of channels of that broadcaster on the distribution platform owned or operated by such distributor of TV channels, without specifying the placement of various channels of the broadcaster vis-avis channels of other broadcasters;

(xi) Placement Fee: means any fee paid by a broadcaster to a distributor of TV channels, for placement of the channels of such broadcaster vis-Ă -vis channels of other broadcasters on the distribution platform owned or operated by such distributor of TV channels; (xii) Digital Addressable System (DAS) Area: means the area where in terms of notifications issued by the Central Government under sub-section (1) of section 4A of the Cable Television Networks (Regulation) Act, 1995 (7 of 1995), it is obligatory for every cable operator to transmit or re-transmit programmes of any channel in an encrypted form through a digital addressable system. (xiii) Must Provide: The TRAI has enforced its must-provide clause where a broadcaster must provide its channels on a non-discriminatory basis, when requested by networks. The clause avoids vertical monopolies from denying channels to their competitors. (xiv) Telecom Regulatory Authority of India (TRAI): TRAI is the authority that protects the interest of consumers and at the same time nurtures conditions for the growth of broadcasting and cable services in a manner and pace, which will enable India to play a leading role in the emerging global information society. (xv) Price-Fixation by TRAI: The price of television channels that a broadcaster can charge to any operator for re-transmission to residential subscribers has been capped by TRAI according to the genre of channels. Also, the price for channels, which the MSO/ LCO can charge to the residential subscriber, is also capped according to the category of cities.


Role and Rule of Law Media & Entertainment Industry Television

87

02. UPLINKING AND DOWNLINKING GUIDELINES

U

plinking is a process of transmission by which signals are sent from a broadcaster to a communication satellite. Once the signal is received at the satellite, it is transmitted back to the Earth using a process called downlinking.

Uplinking Guidelines: Under the Uplinking Guidelines, an applicant seeking permission to set up an Uplinking Hub/Teleport or a TV channel or Uplink facility by a news agency is required to be a company registered in India under the Companies Act, 2013.

► July 2000: The MIB notified the Guidelines for Uplinking from India. ► March 2003: Guidelines for Uplinking of News and Current Affairs TV Channels from India were notified ► August 2003: Guidelines for Uplinking of News and Current Affairs TV Channels from India amended ► May 2003: Guidelines for use of Satellite News Gathering (SNG)/ Digital Satellite News Gathering (DSNG)

The Guidelines lay down a general eligibility criteria which include the period of permission, fee and special conditions/obligations and further sets out different permissions for setting up of hub/ teleports, permission for uplinking a non-news and current affairs TV channel, permission for uplinking of news and current affairs TV channels, permission for uplinking by Indian news agency, etc. The special conditions/ obligations for obtaining permission for uplinking under various heads inter alia include obtaining registration for each channel in accordance with the procedure laid down under the Downlinking Guidelines notified by MIB. As per the amendment in the policy guidelines for uplinking of television channels from India with effect from December 5, 2011, TV channels operating in India and uplinked from India but meant only for foreign viewership are not required to comply with the programme and advertisement code of India. The concerned broadcasters will be required to ensure compliance of the rules and regulations of the target country for which content is being produced and uplinked. However, the uplinked content should not contain anything which is against the sovereignty, integrity and national security of India as well as its relations with friendly countries. For monitoring purposes, these channels will be required to preserve the recordings of the proceedings for at least six months instead of the present stipulation of three months.

► April 1, 2005: addendum to Guidelines for use of SNG/DSNG

Downlinking Guidelines:

► October 20, 2005: Guidelines for use of SNG/DSNG further amended and consolidated into one set of guidelines and notified.

The MIB has formulated policy guidelines for downlinking all satellite television channels downlinked/received/transmitted and re-transmitted in India for public viewing. According to these guidelines all persons/entities providing television satellite broadcasting services uplinked from other countries to viewers in India as well as any entity desirous of providing such a television satellite broadcasting ser-

► December 2005: Superseding all previous guidelines, the Government notified the Uplinking Guidelines which have come into effect from the December 2, 2005.


88

Role and Rule of Law Media & Entertainment Industry Television: Chapter 2: UPLINKING AND DOWNLINKING GUIDELINES

vice, receivable in India for public viewership, are required to obtain permission from MIB. Thus, only those persons/entities registered by MIB under these guidelines are permitted to downlink a channel. These guidelines prescribe two kinds of permissions: i.

Firstly, permission is required to be obtained by an Indian company which wants to enter into the business of downlinking one or more foreign satellite television channels.

ii. The second kind of permission is for allowing the downlinking of the satellite television channel and registering it in the list of channels permitted for downlinking in India. As per these guidelines, companies, which have been granted permission under the Uplinking Guidelines, are by default permitted to seek permission for registration of channels for Downlinking in India and any channel which is permitted to uplink from India and caters to foreign audience only is not required to seek registration under the Downlinking Guidelines. The Downlinking Guidelines provide for the eligibility criteria for applicant companies, eligibility criteria for permission and registration and of channels for being downlinked, period of registration and permission, permission fee, basic conditions, obligations, offences penalties, dispute resolution, procedure for grant of permission of channels, renewal of existing permissions/ registration, transfer of permission of television channels. Companies permitted to downlink registered channels have to comply with the Programme and Advertising Code prescribed under the Cable Television Networks (Regulation) Act, 1995, Sports Broadcasting Signals (Mandatory sharing with Prasar Bharati) Act of 2007 and the Rules, Guidelines, notifications issued by the MIB for regulation of content on TV channels from time to time.

ity restriction on the number of channels that could be carried on their networks. The LCOs after purchasing broadcast signals from the MSOs receive a single bouquet of analogue channels belonging to different broadcasters which it retransmits through cables to the subscribers in the local area/s which have been assigned to such a LCO. ► It is pertinent to note that the consumer does not have much of an option to choose the channels for subscription, but is more or less offered channels which are available with the local cable operator (LCO). ► Analogue networks have limited capacity to carry channels (capacity of up to 60 channels) ► Analogue networks have different frequencies known as bands where Prime Band and S-Band ensure that most of the television sets in India receive the channels which are placed in such bands. ► The fact that each analogue network can carry only six channels per band makes the supply constrained. Thus broadcasters have to pay huge amounts as placement fee to ensure that their channels are placed on Prime or S-Band.

Digital Addressable Cable TV System The total number of television channels distributed today in India is more than 500 out of which approximately 140 are pay channels. The total revenue received by all broadcasters together (i) From analogue market (including digital non addressable) ~ Rs 2000 crore (80 million cable homes + 6 million digital cable homes) (ii) From DTH ~ Rs 2000 crore (26 million cable homes) and therefore the estimated total revenue from subscription in India is Rs 4000 crore. There are approximately 5000 analogue operators in all of India. DTH operators in India include: TataSky, Dish TV, Airtel Digital TV, Videocon D2H, Sun Direct, Reliance Big TV.

DISTRIBUTION NETWORK

Direct-to-home (DTH)

The distribution of television network is of two types (i) through analogue platform (ii) through digital platform. The difference between these two types is with the signals that they can process. Analogue TVs are restricted to analogue signals while Digital TVs can process digital signals and analogue signals. Since analogue TVs can only process analogue signals, it is prone to the problems such as noise, interference, and distorted displays.

► The DTH operators have the prerogative to package and provide various channels to their subscribers.

Analogue/Cable Analogue services are being phased out in India starting with the four metros of Delhi, Mumbai, Kolkata and Chennai having to shift to digital addressability by October 31, 2012. The service chain of analogue/cable services includes the following supply entities: the broadcasters, aggregator, multi-service operators (MSOs), local cable operator (LCOs) and the consumer. The broadcaster uplinks the content signals to the satellite from where the distributor downlinks the content signals. The aggregator, who acts as the distribution agent of either a single or multiple broadcasters, performs the functions of bundling and negotiating the services on behalf of the broadcaster/s. The broadcaster/aggregator sells the channel either as a single unit or sells a bouquet of channels as a single unit. The MSOs purchase the said content from the broadcaster/aggregator and downlinks the purchased content signals, decrypt and encrypt channels and provide the LCOs with a bundled feed consisting of multiple channels. Thus, the MSOs act as master distributors which provide LCOs with content. The MSOs have recently started charging carriage/placement fee as signals, which were carried in the analogue mode, had a capac-

► To ensure that the channels are placed on packages available to maximum number of subscribers, broadcasters discounts the price to a great extent. In India, the reception of television signals is already operating in the digital mode in the case of direct-to-home (DTH) and internet protocol television (IPTV). The digitisation is intended to convert the reception of television signals received via terrestrial mode and cable operators. The television signals and other value added and interactive services would be received via installing set top boxes (STB) which will replace the cable wires and the said service shall be duly authorised by the MSOs.

Internet Protocol Television (IPTV) The IPTV technology functions by combining the distribution of television with broadband and telephony and the signals are transmitted through cable/optical fibre networks. The major attraction of this technology is the high speed two way connectivity and value added services like video on demand (VoD), time shift viewing, online gaming, broadband, e-commerce, option of triple play services, etc. This distribution supply chain is similar to the direct-to-home distribution supply chain with respect to being the exclusive distributer in the distribution value chain. Some of the major IPTV service providers include MTNL, BSNL, Bharti Airtel and Reliance Communications. (Refer to the internet sector for more details on IPTV-pg 138)


Television Distribution network contribution

studio

Broadcasting to homes

teleport

over the top (OTT)

Direct to home (dth)

cable tv/iptv


90

Role and Rule of Law Media & Entertainment Industry Television

03. REGULATORY FRAMEWORK

A. TELECOM REGULATORY AUTHORITY OF

INDIA (TRAI) REGULATIONS:

By notification dated, January 9, 2004, of the Ministry of Communication and Information Technology, notified broadcasting cable TV services to be Telecommunication Services. This brought the regulation of broadcasting and cable TV services under the ambit of TRAI. It has been entrusted with the obligation of laying down standards of the quality of services to be provided and ensure the standards of the quality of the services provided to the consumers. In furtherance of the above, TRAI has passed the following regulations:

i.

The Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable Television Systems) (Fourth Amendment) Regulation, 2014 dated July 18, 2014 This definition introduces the definition of “commercial establishment” and amends the definition of “commercial subscriber” and “subscriber” in the Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable Television Systems) Regulations, 2012 (9 of 2012). This Regulation has been introduced after the long standing disputes with respect to the tariff stipulations for commercial establishments and commercial subscribers. The definition of commercial establishments

includes within its scope a number of establishments which run for private gain.

ii. Standards of Quality of Service (Duration of Advertisements in Television Channels) (Amendment) Regulations, 2012. This regulation provides that no broadcaster shall, in its broadcast of a programme, carry advertisements exceeding 12 minutes in a clock hour. In case of live broadcast of a sporting event, the advertisements shall be carried only during the breaks in the sporting action.

iii. Standards of Quality of Service (Digital Addressable Cable TV Systems) Regulations, 2012. These regulations provide for connection, disconnection, transfer and shifting of the cable TV services, procedure for handling subscriber’s complaints and redressal of complaints, procedure for obtaining/supplying the set top box, procedure for changing the positioning of channels/and/or taking the channel/s off-air etc., procedure for payment of bills, demarcation of obligation and responsibilities for multi-system operators and local cable operators for ensuring quality of services at the subscriber level. iv. Consumers Complaint Redressal (Digital Addressable Cable

TV Systems) Regulations, 2012.


91

v.

The regulations make provisions for the time bound resolution of complaints received by TRAI. The regulations also provide for a Consumer’s Charter.

roadmap for implementation, in a four-phased manner, from June 2012 to December 2014. The October 2011 Ordinance, became an Act in December 2011.

The Telecommunication (Broadcasting And Cable) Services (Fourth) (Addressable Systems) Tariff (First Amendment) Order, 2012 (No. 3 of 2012)

vii. The Direct to Home Broadcasting Services (Standards of Quality of Service and Redressal of Grievances) Regulations, 2007 (8 of 2007) and The Direct To Home Broadcasting Services (Standards Of Quality Of Service And Redressal Of Grievances) (Amendment) Regulations, 2009 (3 Of 2009).

This Order shall be applicable to broadcasting services and cable services provided to subscribers, through digital addressable systems, throughout the territory of India.

As a result of these regulations: ► Cable operators will have to mandatorily offer a Basic Service Tier (BST) to viewers throughout the country. Thus, TV viewers will soon get to choose a minimum of 100 Free to Air (FTA) channels including 18 mandatory Doordarshan channels and the Lok Sabha channel at a maximum retail price of Rs 100. ► The TRAI tariff order lays down that apart from the mandatory channels in the Basic Service Tier, cable operators and Multi System Operators (MSOs) will have to provide customers a minimum of five channels of different genres. The genres are: General Entertainment Channels (GEC) in English, GEC- Hindi, GEC - Regional, music, news, movies, sports, kids infotainment and lifestyle.

vi. The Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable Television Systems) Regulations, 2012. On December 10, 2004, TRAI made an interconnection regulation applicable for broadcasting and cable TV sector. The regulation was called the Telecommunication (Broadcasting and Cable Services) Interconnection Regulation 2004 (13 of 2004). There have been six amendments made to this regulation. These regulations cover arrangements among service providers for interconnection and revenue share, for all broadcasting and cable services. The main features of the regulations are: ► Provision of ‘must provide’ (i.e. non discriminatory access) for the broadcasters; ► Provision for ‘disconnection of TV signals’. The regulations prescribe notice period for disconnection. The notice for disconnection must state reasons for disconnection. No notice for disconnection is required if there is no written agreement permitting distribution of signals. The notice of disconnection should be published in newspaper for the information of the consumers. Digital Addressable Cable TV Systems (DAS): With the evolution of technology, new addressable digital TV platforms such as direct to home (DTH) and Internet Protocol Television (IPTV) have been introduced. The evolution of technology also paved way for bringing about digitisation in the cable TV sector. On August 5, 2010, TRAI gave its recommendations on implementation of Digital Addressable Cable TV Systems (DAS) across the country along with a roadmap to achieve the same. On October 25, 2011, the Government issued an Ordinance amending the Cable Television Networks (Regulation) Act, 1995, paving way for the implementation DAS in India. Thereafter, the Government issued a notification (dated November 11, 2011), which laid down the

The Direct to Home Broadcasting Services (Standards of Quality of Service and Redressal of Grievances) Regulations, 2007, were issued on August 31, 2007, to lay down the standards of quality of DTH services and to protect the interests of DTH subscribers. The 2007 Regulations were amended in 2009 to address new issues relating to quality of DTH service. The present amendment regulations extended the protection available to the DTH subscriber regarding composition of a subscription package for six months from the date of enrolment or contracted period, whichever is longer.

viii. The Standards of Quality of Service (Broadcasting and Cable Services) (Cable Televison-Non-CAS Areas) Regulations, 2009. The regulations provide for the procedure for cable service connection, disconnection or shifting, billing procedure and billing related complaints for cable services, complaint handling and redressal additional standards of quality of service relating to digital decoder and set box for digital cable service (with or without conditional access) in Non CAS areas, technical standards as to quality of signals.

ix. Regulation on The Standards of Quality of Service (Broadcasting and Cable services) (Cable Television- CAS Areas) Regulation, 2006 (8 of 2006) The regulations provide for the provisions relating to connection, disconnection, transfer and shifting of the cable services in CAS areas, to complaint handling and redressal in respect of cable services in CAS areas, billing procedure and the billing related complaints in respect of cable services in CAS areas, set top box (STB) related issues and complaints, technical standards, monitoring of performance of quality of service standards in respect of cable services in CAS areas, etc.

x. The Telecommunication (Broadcasting and Cable) Services (Second) Tariff Order 2004 On January 15, 2004, TRAI specified a ceiling for the rates at which the charges will be paid by the cable subscribers to cable operators, by the cable operators to multi system operators and the multi system operators to broadcasters, as those prevailing on December 26, 2003. A mechanism was to be devised for pricing the new upcoming channels. Thus, it was decided that the pay channels launched after December 26, 2003, should not be allowed to become part of the bouquet of channels being provided on December 26, 2003. A similar rule would apply for those channels that were free-to-air on December 26, 2003, and later convert to pay. It is expected that this would give choice to the operators and through them to the consumers.

B.

CABLE TELEVISION NETWORKS (REGULATION) ACT, 1995. The Act was introduced to regulate the operations of cable television networks in the country to regulate and structure the Indian cable broadcasting industry.


92

Role and Rule of Law Media & Entertainment Industry Television: Chapter 3: REGULATORY FRAMEWORK

► The Act requires cable networks operators to register as a cable operator before operating the cable network services. ► The Act further throws light on the distinction between:

A free-to-air channel, which means a channel, the reception of which would not require the use of any addressable system to be attached with the receiver set of a subscriber and; A pay channel, which means a channel the reception of which by the subscriber would require the use of an addressable system to be attached to his receiver set.

► The Act requires the person who transmits or re-transmits any programme through a cable service, to abide by the Programme Code and for transmission of the advertisement, to abide by the Advertisement Code. ► An authorised officer is empowered to prohibit any cable operator from transmitting or re-transmitting any programme or channel if, it is not in conformity with the prescribed Programme Code and Advertisement Code or if it is likely to promote, on grounds of religion, race, language, caste or community or any other ground whatsoever, disharmony or feelings of enmity, hatred or ill-will between different religious, racial, linguistic or regional groups or castes or communities or which is likely to disturb the public tranquility. ► Section 21 of the Act provides that the provisions of this Act shall be in addition to, and not in derogation of, the Drugs and Cosmetics Act, 1940, the Pharmacy Act, 1948, The Emblems and Names (Prevention of Improper Use) Act, 1950, The Drugs (Control) Act, 1950, the Cinematograph Act, 1952, the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954, the Prevention of Food Adulteration Act, 1954, the Prize Competitions Act, 1955, the Copyright Act, 1957, the Trade and Merchandise Marks Act, 1958, the Indecent Representation of Women (Prohibition) Act, 1986 and the Consumer Protection Act, 1986.

C. CABLE TELEVISION NETWORK RULES, 1994 The Rules form a part of the Cable Television Networks (Regulation) Act, 1995. Rule 6 and Rule 7 elaborate on the statue to be adhered to while designing content for programmes on television. ► Rule 6 lays down the Programme Code which is the regulation for controlling television program content. It lays down that television programmes must not include: any content which would go against good taste, decency, anti-religious content, content which could affect friendly relations between countries, obscene or defaming or indecent content, content that could encourage violence, content that may amount to contempt of court, content that may denigrate women, children, is not suitable for unrestricted public exhibition any content that may contravene the Cinematograph Act, 1952, and so on. ► Rule 7 lays down the Advertising Code which regulates advertisement content and states that advertisements carried in the cable service should conform with laws of the country and should not offend morality, decency and religious susceptibilities of the subscribers. The advertisements must not permit the content which tends to go against the Constitution of India, or promote audience to indulge in crime or degrades women and/ or encourage social evils such a dowry or promotes directly and/or indirectly promotes the sale of alcohol and tobacco, the advertisement must not make any direct or indirect reference to prohibited products or any content which goes against the Advertising Standard Council of India (ASCI) and lastly no programme shall carry advertisements exceeding 12 minutes per hour, which may include up

to 10 minutes per hour of commercial advertisements, and up to two minutes per hour of a channel’s self-promotional programmes.

D.

DURATION OF ADVERTISEMENTS ON TELEVISION The Advertisement Code under Rule 7(11) of the Cable Television Networks Rules, 1994 provides that no programme shall carry advertisements exceeding twelve minutes per hour, which may include up to ten minutes per hour of commercial advertisements, and up to two minutes per hour of the channel’s self-promotional programmes. TRAI has been entrusted for laying down the standards of quality of service to be provided by the service providers and ensure the quality of service to the consumers. In this endeavor TRAI concluded that duration of advertisements is closely related to the quality of viewing experience of the consumers. The duration and format of advertisements, being carried in TV channels was found not to be in accordance with the provisions of the Advertising Code as prescribed in the Cable Television Networks Regukation Act, 1995 and the Rules, 1994. TRAI therefore notified the “Standards of Quality of Service (Duration of Advertisements in Television Channels) Regulations” dated May 14, 2012. These regulations, besides prescribing that the limit of advertisement duration should be adhered to on clock hour basis, also provided that (i) advertisements should be carried only during breaks in live sporting action (ii) time gap between consecutive advertisement sessions should be of minimum 30 minutes in case of movies and 15 minutes otherwise (iii) no part screen advertisements should be permitted etc. The said regulations were challenged by some of the broadcasters in the Hon’ble Telecom Disputes Settlement and Appellate Tribunal (TDSAT). Taking into consideration the recommendations of the various stakeholders, the Regulation of 2012 was again sought to be amended. TRAI was however of the view that consumers have to pay for all the subscribed channels, whether it is pay or FTA. Therefore, it is a legitimate expectation on the part of the consumers to get the programmes for which the channel is subscribed rather than it being loaded with advertisements beyond a point. Thus, the prime irritant for the consumer with regard to the advertisements is their excessive time duration in programmes. TRAI was of the view that the issue of excessive advertisements in violation of the existing rules, needs to be addressed for giving a respite to the consumer from onslaught of prolonged duration of advertisements and thereby to enhance his quality of viewing experience of TV channels. Moreover, the provisions in the Cable Television Networks Rules 1994 with regard to the maximum duration of advertisements that can be carried per hour cannot be different for different hours of the day thereby discriminating the consumers’ viewing experience depending upon the hour of the day. TRAI was therefore of the view that the restriction on maximum duration of advertisements carried in the programmes of a TV channel, as prescribed in the Cable Television Networks rules is to be effectively enforced on a clock hour basis, to ensure quality of service to the consumers. The TRAI therefore notified the Standards of Quality of Service (Duration of Advertisements in Television Channels) (Amendment) Regulations, 2013 on March 22, 2013.

STANDARDS OF QUALITY OF SERVICE (DURATION OF ADVERTISEMENTS IN TELEVISION CHANNELS) (AMENDMENT) REGULATIONS, 2013 The Telecom Regulatory Authority of India (TRAI) notified the Standards of Quality of Service (Duration of Advertisements in Television Channels) (Amendment) Regulations, 2013 on March 22, 2013. Regulation 3 provides as under: “Duration of advertisements in a clock hour--- No broadcaster shall, in


93

TRAI restricts the broadcasters from carrying advertisements exceeding twelve minutes in a clock hour. its broadcast of a programme, carry advertisements exceeding twelve minutes in a clock hour.

of persons may, either individually or jointly, file a complaint directly to BCCC against any programme broadcast on any of the TV channels within 14 days from the date of the first broadcast. In case of any complaint relating to a channel which is not a member of the IBF is received the same are to be forwarded to the Ministry of Information and Broadcasting for appropriate action.

Explanation: The clock hour means a period of sixty minutes commencing from 00.00 of an hour and ending at 00.60 of that hour. (example: 14.00 to 15.00 hours)”.

The Supreme Court’s recent ruling in the case of BSNL v/s TRAI on December 6, 20131 , holding that TDSAT does not have authority to hear cases challenging the Telecom Regulatory Authority of India (TRAI) regulations, resulted in broadcasters filing a writ petition in the Delhi High Court challenging the vires of Standards of Quality of Service (Duration of Advertisements in Television Channels) (Amendment) Regulations, 2013. The petition has been filed by News Broadcasters Association (NBA) and several broadcasters such as 9X Media, B4U, TV Vision, Sun TV, E24 and Pioneer Channel. The Delhi High Court vide its interim order dated February 18, 2014 has granted stay on the application of the Standards of Quality of Service (Duration of Advertisements in Television Channels) (Amendment) Regulations, 2013 and directed that pending the disposal of the petition no coercive order should be taken against the petitioner or its members. The matter is pending before the Delhi High Court.

E. Indian Broadcasting Foundation (IBF)

GUIDELINES:

► The Indian Broadcasting Foundation (IBF) was established in 1999 to promote the interests of the Indian television industry. Being the apex industry association and with more than 250 channels as its members, it plays a critical role in facilitating creativity. ► IBF has played a significant role in a short span of time in protecting and promoting the interests of its members and freedom of electronic media in the world’s largest democracy. ► IBF has approved ‘Self Regulatory Guidelines Redressal Mechanism’ for all non-news channels, including general entertainment, children, special interest channels irrespective of the medium/platform of transmission. ► The Self Regulatory Guidelines Redressal Mechanism operates at two levels: i)

Each broadcaster will set up a Standards and Practices Department and appoint content auditor/s to deal with complaints received for the content aired on its channels.

ii) The complaints are to be dealt at the level of the Broadcasting Content Complaints Council (BCCC). Any person or a group

1

(2014) 3 SCC 222

► Under the Guidelines, a content categorisation system is provided which prescribes detailed guidelines in respect of the subjects such as crime and violence, sex, obscenity and nudity, horror and occult, drugs, smoking, tobacco, solvents and alcohol, religion and community, harm and offence and general restrictions which are to be adhered to. ► The Guidelines deal with the Programme Classification System and specifically provide that the category, Generally Accessible (G), i.e. programmes which are suitable for unrestricted viewing by all viewers and/or under Parental Guidance, can be scheduled for telecast at all times. Only such content which falls under the category, Restricted Access (R), i.e. programmes which may not be suitable for children and young viewers, should be scheduled between 11 pm to 5 am.

F.

THE ELECTRONIC MEDIA MONITORING CENTRE (EMMC) In 2008, Central Monitoring Services was replaced by Electronic Media Monitoring Centre (EMMC). EMMC, functioning under the Union Ministry of Information & Broadcasting, monitors and records the content of various channels throughout the Indian territories. Contents broadcast by these channels are monitored so that any violations of codes framed under the Cable television Network (Regulation) Act, 1995 could be checked. Presently, EMMC records around 300 TV channels and monitors about 180 channels on a 24×7 basis for the purposes of: i. To check the violations by All TV channels uplinking and downlinking in India ii. Any other such works relating to monitoring of contents of broadcasting sector assigned by the Governments from time to time

Organizational Structure of the EMMC The EMMC is headed by a Director who is assisted by two Deputy Directors handling content and administration. There is a team of technicians headed by Chief Operating Officer (Technical) who in turn reports to Director. The TV channels are monitored by about 100 monitors who are supervised by content auditors. Functions of The EMMC:

Monitoring & Security of Violations: EMMC has been equipped


94

Role and Rule of Law Media & Entertainment Industry Television: Chapter 3: REGULATORY FRAMEWORK

with Satellite Dishes, Satellite TV Monitoring System comprising of Loggers, Editing system, Servers and Channel Monitoring set up, and Data Storage facility. It readies the Centre to store the broadcast content of TV channels for 90 days and review the same as and when required.

Monitoring & Scrutiny of Violations: EMMC makes reports on

violations along with the recorded clips to the Scrutiny Committee. This Committee then examines those violations and forwards its findings to the Ministry of I&B and other bodies for further action. EMMC identifies relevant matters of public importance and generates daily reports to the Ministry for evaluation and for taking action, if necessary. In addition, the Centre helps other ministries and organizations of Government of India to assess public opinion on issues of national and international importance.

Special Reports: From time to time, EMMC prepares Special Reports on the coverage in various television channels of relevant issues and events that concern the Government. Human Resource Management: Through One Week Orientation

Programme, EMMC trains the newly inducted staff. Besides, a Refresher Programme is being conducted to enhance the expertise and upgrade the skills of the existing personnel. Future Plans ► Upgrading Technical Infrastructure ► Monitoring & Regulation of broadcast content of Private FM Radio ► Increase the number of TV channels monitored to 1500 ► Establishment of EMMC Research and Analysis Wing (RAW) ► Establishment of Training Cell ► Collaboration with other Media Institutions Complaints mechanism at the EMMC If any person notices a violation of basic ethics or exaggeration by an electronic media, he/she as a responsible citizen of the country should raise an alarm by filing a complaint. Once the complaint is received, the concerned violating clip is analyzed and sent for scrutiny. About 150 TV channels are examined to determine whether their content including the advertisements conform to the codes of conduct under various Acts mainly Cable Television Network (Regulation) Act, 1995. Also, there is a scrutiny committee headed by the director and represented by officials from I&B Ministry, National Women’s Commission, National Human Rights Commission etc. which go through the finding of the monitors and prepare a report for further action by I&B Ministry. The clips are sent to the concerned wing of the Information and Broadcasting Ministry which in turn double-checks the veracity of the complaints before notice is sent to the concerned. The EMMC will verify the authenticity of the complaints and take it up to the level of Information & Broadcasting Ministry as and when required. Positions BCCC and EMMC ► Any person can file a complaint directly to the BCCC against any programme broadcast on any of the TV Channels within 14(fourteen) days from the date of the first broadcast. ► On receipt of the complaint, the BCCC Secretariat will acknowledge the complaint within two working days of the receipt of the complaint. All complaints will be put up for orders of Chairperson by BCCC Secretariat within three working days from the receipt of the complaint(s). ► If the complaint appears to be vexatious, frivolous or motivated or baseless, the Chairperson will not initiate any action but

will direct the BCCC Secretariat to put up the same at the next meeting of BCCC to decide whether the complaint should be processed or not. ► If the Chairperson feels that the complaint indicates a possible violation of the Code, the Chairperson will direct BCCC Secretariat to ask the concerned Channel to submit their views on the offending content within one working week from the receipt of the letter from BCCC in the matter. ► On receipt of request from BCCC, the EMMC, after carrying out its scrutiny (as mentioned above) shall submit the tape/CD on the offending content within two working days. The reply of the Channel, in any, along with video/footage as received from EMMC will be put up for consideration of BCCC in its next meeting. ► If BCCC is not satisfied with the response of the concerned Channel, the BCCC should decide whether the offending content has violated the Guidelines. In case a violation is detected, BCCC shall direct the concerned Channel to modify or withdraw such content within a week on receipt of direction from BCCC. ► If the representative of the Channel fails to appear before BCCC on the stipulated date, the BCCC may decide the complaint ex-parte as the BCCC may deem fit. ► In the event a channel is found to continue the telecasting of any objectionable unauthorized content, the BCCC may, upon due consideration, pass an interim order directing immediate withholding of the offending telecast by the Channel and direct the Channel to send its justification within twenty four hours to enable issue of final order by the BCCC in the matter. If the channel defies the order of the BCCC, the matter may be referred to Ministry of Information and Broadcasting within the next 24 hours for appropriate action. ► If it appears to BCCC that a motivated complaint has been made with the objective of tarnishing the reputation and or the goodwill of the concerned Channel in the market, the BCCC can blacklist such complainants for three years and no complaint shall be entertained thereafter from such complainants.

G.

NEWS BROADCASTERS ASSOCIATION (NBA) - CODE OF ETHICS AND BROADCASTING STANDARDS1 The code provides broad paradigms accepted by the members of News Broadcasters’ Association (NBA) as practice and procedures that would help journalists and electronic media to adhere to the highest possible standards of public service and integrity.

► Impartiality and objectivity in reporting: Channels must strive to present news not only with speed but also accuracy. Channels must avoid anything which is defamatory or libelous. Even though truth is a defense, equal opportunities must be provided for individuals involved to present their point of view.

► Ensuring neutrality: Channels must strive to provide news in a neutral manner by offering equality for all affected parties in any dispute or conflict to present their point of view. Specially, channels must strive to ensure that allegations are not portrayed as fact and charges are not conveyed as an act of guilt. ► Reporting on crime and safeguards to ensure crime and vio-

1 http://www.nbanewdelhi.com/pdf/final/NBA_code-of-ethics_english.pdf


After the November 26, 2008, terrorist attack in Mumbai, the News Broadcasters association framed guidelines on the telecast of news during emergency situations


Role and Rule of Law Media & Entertainment Industry Television: Chapter 3: REGULATORY FRAMEWORK

96

lence are not glorified: Television has greater reach, and more

immediate impact than other forms of media, therefore, channels must exercise restraint to ensure that any report or visuals broadcast do not induce, glorify, incite, or positively depict violence and its perpetrators, regardless of ideology or context. Specific care must be taken not to broadcast visuals that can be prejudicial or inflammatory.

► Depiction of violence or intimidation against women and children: Channels must ensure that no woman or juvenile, who is a victim of sexual violence, aggression, trauma, or has been a witness to the same is shown on television without due effort taken to conceal the identity. ► Sex and nudity: Channels must not show without morphing, nudity of the male or female form or explicit images of sexual activity or sexual perversions or acts of sexual violence like rape or molestation, or show pornography, or the use of sexually suggestive language. ► Privacy: Channels must not intrude on private lives, or personal affairs of individuals, unless there is a clearly established larger and identifiable public interest for such a broadcast. However, the defense of the premise of privacy cannot be misconstrued as the denial of access, and this applies to all individuals, including those in the public eye and public personalities. ► Endangering national security: Channels must not show the use of any terminology or maps that represent India and Indian strategic interests. News channels will also refrain from allowing broadcasts that would reveal information that endangers lives and national security. However, it is in the public interest to broadcast instances of breach of national security and loopholes in national security and reporting these cannot be confused with endangering national security. ► Refraining from advocating or encouraging superstition and occultism: In broadcasting any news about such genre, news channels must issue public disclaimers to ensure that viewers are not misled into believing or emulating such beliefs and activity. Therefore channels must not broadcast myths as facts. ► Sting operations: Channels must ensure that sting and under cover operations should be a last resort in an attempt to give the viewer comprehensive coverage of any news story. Also, channels must not allow sex and sleaze as a means to carry out sting operations, the use of narcotics and psychotropic substances or any act of violence, intimidation, or discrimination as a justifiable means in the record-

ing of any sting operation. ► Corrigendum: Channels must ensure that significant mistakes made in the course of any broadcast is acknowledged and corrected on air immediately. Corrections should also be scheduled in such a way that they attract enough viewer attention and are not concealed. ► Reporting on emergency situations: After the November 26, 2008, terrorist attack in Mumbai, the NBA framed guidelines on the telecast of news during emergency situations to include among others the following: i.

No live reporting should be made that facilitates publicity of any terrorist or militant outfit or its ideology or tends to evoke sympathy for the perpetrators or glamorises them or their cause or advances the illegal agenda or objectives of the perpetrators.

ii. In live reporting of hostage situations or rescue operations, no details of identity, number and status of hostages should be telecast or information given of pending rescue operations or regarding the number of security personnel involved or the methods employed by them.

F.

ADVERTISING STANDARDS COUNCIL OF INDIA

The Advertising Standards Council of India (ASCI) was established in 1985. ASCI is a voluntary self-regulation council, registered as a not-for-profit company under section 25 of the Companies Act, 1956. The sponsors of ASCI, who are its principal members, are firms of considerable repute in India and comprise of advertisers, media, ad-agencies and other professional / ancillary services connected with advertising practice. ASCI is neither a Government body nor does it formulate rules for the public or the relevant industries. ASCI has a consumer complaints council (CCC) which considers the complaints, orders investigation and decides on such complaints. In 2006, the Cable Television Networks Rules, 1994 were amended introducing Rule 7 (9) which provides that no advertisement which violates the Code for self regulation in advertising, as adopted by the Advertising Standards Council of India (ASCI), Mumbai for public exhibition in India, from time to time, shall be carried in the cable service.

Important Case Laws: M/s. Teleshop Teleshopping v/s The Advertising Standards Council of India & another Court: Bombay High Court Citation: Notice Of Motion (L) NO. 1153 OF 2014 IN SUIT NO. 497

OF 2014

Coram: S.J. KATHAWALLA, J. Date: May 7, 2014

Facts: The Plaintiff in the instant case took out a notice of motion and sought for urgent ad-interim reliefs to, inter alia, restrain the Defendant No.1 i.e. ASCI from in any manner enforcing or acting upon (i) its decision dated March 14, 2014, qua the Plaintiff wherein a certain infomercial of the Plaintiff viz. ‘Go Addiction Plus’ was stated to be included in the list of 87 advertisements against which complaints were upheld by the Consumer Complaints Council of the Defendant No.1 and (ii) the letter dated 23rd April, 2014 issued by the Defendant No.1 to the Drug Inspector, Food and Drug Administration, Thane wherein the Defendant No.1 had informed the inspector that the CCC had considered and upheld the complaint in its meeting in June, 2013 and found the


97

infomercial to be in contravention of the ASCI Code. The Plaintiff’s case was that it had provided CD’s of both the commercials to Defendant No. 2 i.e. The Infomercial Advertisers Council of India which is also a voluntary self regulatory body, comprising of members who are engaged in the production and making of infomercials and the Defendant No. 2 had not received any complaints/ objections with respect to the said infomercials. The Plaintiff further contended that the Plaintiff is not a member of the Defendant No.1. The Plaintiff further contended that upon publishing of the ASCI decision, the infomercials were abruptly discontinued on the channels thereby causing immense hardship including loss of business profit and loss of goodwill enjoyed by the Plaintiff in the industry and in its dealings with the broadcasters.

Ratio: The Hon’ble Court found merit in the Plaintiff’s case and

granted ad-interim reliefs to the Plaintiff to the effect that pending the hearing and final disposal of the present suit, the operation of the ASCI decision and the direction issued by and under letter dated April 23, 2014 with respect to the said infomercials be stayed and the Defendant No.1, including its CCC, be restrained by an order and temporary injunction of the Hon’ble Court from in any manner enforcing and acting upon (i) the said ASCI-CCC decision March 14, 2014 qua the Plaintiff and (ii) the direction issued by and under letter dated April 23, 2014 issued by the Defendant No. 1 and further restraining the Defendant No.1 and its CCC from in any manner from taking any cohesive steps against the Plaintiff. In its detailed reasoned order, the Hon’ble Court held that the Defendant No.1 is a private body and is not a statutory body or ‘State’ or an instrumentality or an agency of the State within the meaning of Article 12 of the Constitution of India. The Defendant No.1 in the garb of acting as a voluntary self regulatory Council cannot act as a statutory regulator and cannot arrogate to itself the powers of restricting/restraining or causing the restriction/restraint of any commercial advertisements belonging to the Plaintiff who is not a member of the Defendant No.1. The decisions made and directions issued by the Defendant No.1 to its members in respect of the infomercials of the Plaintiff have the effect of adversely affecting and restricting the rights of the Plaintiff to carry out its trade, business and occupation and to that extent the directions are against law and beyond the realm of the Defendant No.1’s powers. The Court further observed that the Plaintiff was not even provided with a hearing, and the decisions of the Defendant No.1 were passed in an unauthorized and illegal manner discontinuing the infomercials of the Plaintiff, who is not a member of the Defendant No.1. By doing so, the Defendant No. 1 has caused and is continuing to cause immense and irreparable harm and loss to the Plaintiff.

boards (India) Ltd. vs. The Advertising Standards Council of India [1 1993 (3) Mh.L.J 543] wherein it was, inter alia, held that a voluntary association of persons, even a Company such as ASCI, cannot usurp the jurisdiction of the Courts, Tribunals and Fora duly constituted by the Parliament. Paragraph 7 of the said decision is relevant and is reproduced hereunder: “7. I have considered the arguments put forward by the learned Counsel for the parties. Undoubtedly defendant is a Company which is governed by the provisions of the Companies Act. Therefore, the members of the Company would be bound by all the directions which are issued by the Board of Directors of the Company. Any directions issued by this Company are not binding on the plaintiff. Restrictive order can only be passed by the State in exercise of its powers under Article 19 of the Constitution. This Article permits the State to impose reasonable restrictions on the Rights to Freedom, guaranteed in this Article. No individual or company can arrogate to themselves the powers of the State, Statutory Authorities or Instrumentalities of the State. I am prima facie of the view that this Company cannot be elevated to the status of State, Statutory Corporation or Instrumentality of the State. That being so, any action taken by the Company which would infringe the rights of a citizen of India guaranteed under Articles 14 and 19 would be without jurisdiction. No directions issued by the Company to the members can be held to be binding on a non-member. Therefore, if the directions issued by the Company to the members have the effect of adversely affecting the trade or profession of a non-member, the directions would be without jurisdiction. Interestingly in the Memorandum and Articles of Association it is provided that the Code is not in competition with law. Its rules, and the machinery, through which they are enforced are designed to complement legal controls, not to usurp or replace them. But the directions contained in the two impugned orders clearly have the effect of a mandatory injunction. This kind of order can be granted only by courts duly constituted under law. A voluntary association of persons, even a Company such as the defendant, cannot usurp the jurisdiction of the courts, Tribunals and Fora duly constituted by Parliament”. The said decision was followed by the Hon’ble Delhi High Court in the case of M/s. Quick Telemall Marketing Pvt. Ltd. vs. The Advertising Standards council of India dated September 27, 2013 in CS (OS) No. 1877 of 2013. The Court expressed its concern over the continuance of such orders being passed by ASCI despite the aforesaid court decisions, thereby pointing out that such orders passed by the Defendant No. 1 are without jurisdiction and against the principles of natural justice.

The Court further referred to a similar case against ASCI, Century Ply-

The matter is pending before the Bombay High Court.

While the courts in India have affirmed that ASCI is not a statutory regulator and cannot usurp / arrogate itself the powers of restricting the telecast of any advertisement or infomercial, the Ministry of Information and Broadcasting vide its Advisory dated August 21, 2014 has stated that non-compliance of ASCI’s Code of self-regulation in advertising (“Advertising Code”) is a violation of Rule 7(9) of the under Cable Television Network Rules, 1994. Hence, ASCI’s decisions are bound to be complied by advertisers and the advertisements which are found to be violative by ASCI cannot be carried out on cable service / TV Channels. The said Advisory further provides that ASCI has pointed out to

the Inter Ministerial Committee of the MIB, a possible violation of the provisions of the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 and Rules 1955. Hence IMC recommended to advise all channels not to telecast the advertisements which would be found to be violative by ASCI. The Competent Authority of the MIB accepted the recommendation of the IMC and all TV channels have accordingly been advised not to carry the particular advertisements as listed in the annexure to the advisory on their respective channels and to ensure strict compliance of the Cable Television Networks (Regulation) Rules and the Advertisement Code.


98

Role and Rule of Law Media & Entertainment Industry Television

04. MEASUREMENT OF VIEWERSHIP

A. Television Audience Measurement

(TAM) & Indian National Television Audience Measurement (INTAM)

Television Rating Points [TRP]: TRP is an audience measurement criterion of rating points which indicates the popularity of a television channel and a programme on a particular channel. TRPs help advertisers in deciding the channel in which to place advertisements. Advertising revenue is a major source of income for TV channels.

Rating Services in India: Earlier, Doordarshan Audience Ratings (DART) was the only rating agency whose data was available and followed. In 1994, ORG-MARG’s Indian National Television Audience Measurement (INTAM) was established but its area of operation was restricted to only major cities. In 1998, a second rating agency, Television Audience Management (TAM) was established. TAM is joint venture between Nielsen (India) Private Limited and Kantar Market Research. A Joint Industry Body (JIB) comprising representatives from the Indian Society of Advertisers (ISA), Indian Broadcasting Foundation (IBF) and Advertising Agencies Association of India (AAAI) worked closely with TAM in technical matters. The two agencies TAM and INTAM were formerly merged in 2001.

In 2004, another rating agency Audience Measurement and Analytics Ltd. (aMap) started its operation in India. On March 14, 2012, the Indian Broadcasting Foundation (IBF), the Indian Society of Advertisers (ISA) and Advertising Agencies Association of India (AAAI) formally announced at FICCI Frames, the official formation of a nationwide audience research joint body, Broadcast Audience Research Council (BARC). This council is being formed with the object to conduct and commission market research using appropriate research methodologies, to provide accurate, up to date and relevant findings relating to broadcast audiences, including TV ratings. BARC is proposing to adopt the Broadcasters’ Audience Research Board (BARB) model of United Kingdom. BARC aims to enter the market with its new system for TV ratings in the month of October 2014 (aiming for October 1) whereby it is targeting to have at least 25,000 metres across 20,000 households at the beginning of October. BARC has signed a 6-year contract with French Company Mediametrie, to help set up the technology infrastructure required for the rating system. Mediametrie operates the TV, internet and radio currency ratings systems and has been engaged in multi-media audience research for the last 25 years.The technology used will be that of an “audio watermark” which performs the same function as a watermark on a photo. The wa-


99

termark will be embedded in the audio signal, which will help identify ownership of the copyright in that audio track. The implication of this is that if a person were to copy the signal then the information embedded in the audio signal would also be copied helping track the copying. Therefore, this new technology of watermark coding will help register and track patterns of television sets attached to peoplemetres. This technology used is platform-agnostic (works with digital, analogue and terrestrial signals) and can be used to measure delayed viewing (content is recorded and viewed later).

B. DISPUTES: 1. NDTV sues TAM: On July 26, 2012, NDTV sued Nielsen Company, the parent company of TAM, for negligence, fraud and a variety of other causes of action in a New York State court. It alleged that TAM and its owners were knowingly allowing manipulation of data ratings to favour channels that offered bribes. It stated that Nielsen’s wrongdoings, including negligence, gross negligence, false representations and prima facie tort, have had catastrophic effects on customers, on the television industry, on advertisers and on viewers in the United States and overseas. The complaint was filed against various companies including WPP, Nielsen Company, VNU, ACNielsen Marketing Research India, Kantar Media Research, JWT India, IMRB International and TAM Media Research amongst others. The complaint demanded two primary remedial measures: the discontinuation of publication of data until there was an increase of sample size from 8,000 to 30,000 and increased security measures. On August 28, 2012, WPP, which owns half of TAM, sought dismissal of the lawsuit on the grounds of invalid jurisdiction As per reports, in Febauray 2013 the New York Court NDTV’s lawsuit on grounds of lack of jurisdiction and Indian courts being the appropriate jurisdiction to hear the matter. In May 2013 NDTV filed an appeal against New York Court’s dismissal of NDTV’s lawsuit.

2. Prasar Bharati upset with TAM: In September 2012, news re-

ports stated that the Indian government owned Prasar Bharati would sue Television Audience Measurement (TAM) agency for alleged inaccurate representation and under-reporting of data for its channel, Doordarshan. The said suit is to be filed in India. Prasar Bharati reportedly cited other factors for the non-reliability of the data of TAM Media Research which included the release of data on weekly basis, lack of transparency in the method of selection of households and the confidentiality of the names of panel homes, which prevented verification. In light of the allegations of corruption and monopoly, the News Broadcasters’ Association (NBA) wrote to the ministry of information and broadcasting (MIB) seeking a third party audit of TAM Media Research and for the suspension of TAM data till such a third party audit was achieved. The MIB asked Telecom Regulatory Authority of India (TRAI) to recommend an accreditation mechanism for TV ratings in India in order to set the benchmark for other rating agencies. The MIB further wrote to TAM for a report on the measures taken to improve the rating system and to address the issue of the corruption charges.

C.

Policy Guidelines for Television Rating Agencies in India The Union Cabinet on January 9, 2014 approved the proposal of the Ministry of Information and Broadcasting for bringing out a comprehensive regulatory framework in the form of guidelines for Television Rating Agencies in India. These guidelines cover detailed procedures for registration of rating agencies, eligibility norms, terms and conditions of registration, cross-holdings, methodology for audience meas-

urement, a complaint redressal mechanism, sale and use of ratings, audit, disclosure, reporting requirements and action on non-compliance of guidelines etc. The proposal is based on recommendations made by the Telecom Regulatory Authority of India (TRAI) on “Guidelines for Television Rating Agencies” dated September 11, 2013. Based on the recommendations of TRAI, comprehensive policy guidelines for television rating agencies have been formulated.

Salient features of these guidelines are as follows: ► All rating agencies including the existing rating agencies shall obtain registration from the Ministry of Information and Broadcasting. ► Detailed registration procedure, eligibility norms, terms and conditions, cross-holding norms, period of registration, security conditions and other obligations have been delineated. ► No single company / legal entity either directly or through its associates or interconnect undertakings shall have substantial equity holding that is, 10 percent or more of paid up equity in both rating agencies and broadcasters/advertisers/advertising agencies. ► Ratings ought to be technology neutral and shall capture data across multiple viewing platforms viz. cable TV, Direct-to- Home (DTH), Terrestrial TV etc. ► Panel homes for audience measurement shall be drawn from the pool of households selected through an establishment survey. A minimum panel size of 20,000 to be implemented within six months of the guidelines coming into force. Thereafter the panel size shall be increased by 10,000 every year until it reaches the figure of 50,000. ► Secrecy and privacy of the panel homes must be maintained. 25 percent of panel homes shall be rotated every year. ► The rating agency shall submit the detailed methodology to the Government and also publish it on its website. ► The rating agency shall set up an effective complaint redressal system with a toll free number. ► The rating agency shall set up an internal audit mechanism to get its entire methodology/processes audited internally on quarterly basis and through an independent auditor annually. All audit reports to be put on the website of the rating agency. Government and TRAI reserve the right to audit the systems /procedures/mechanisms of the rating agency. ► Non-compliance of guidelines on cross-holding, methodology, secrecy, privacy, audit, public disclosure and reporting requirements shall lead to forfeiture of two bank guarantees worth Rs. one crore furnished by the company in the first instance, and, in the second instance shall lead to cancellation of registration. For violation of other provisions of the guidelines, the action shall be forfeiture of bank guarantee of Rs. 25 lakh for the first instance of non-compliance, forfeiture of bank guarantee of Rs.75 lakh for the second instance of non compliance and for the third instance, cancellation of registration. ► 30 days time would be given to the existing rating agency to comply with the guidelines. ► The guidelines would come into effect immediately from the date of notification. The Guidelines for Television Rating Agencies in India are designed to address aberrations in the existing television rating system. These guide-


100

Role and Rule of Law Media & Entertainment Industry Television: Chapter 4: MEASUREMENT OF VIEWERSHIP

Kantar Market Research Services Private Limited has challenged the cross holding restrictions of the MIB Policy Guidelines for Television Rating Agencies in India before the Delhi High Court and obtained an interim stay on the cross holding provisions

lines are aimed at making television ratings transparent, credible and accountable. The agencies operating in this field have to comply with directions relating to public disclosure, third party audit of their mechanisms and transparency in the methodologies adopted. This would help make rating agencies accountable to stakeholders such as the Government, broadcasters, advertisers, advertising agencies and above all the people. Kantar Market Research Services Private Limited which is a unit of the global advertising giant WPP and an equal shareholder in India’s only TV ratings agency, TAM Media Research has filed a petition in the Delhi High Court1 challenging the cross holding restrictions under the Policy Guidelines for Television Ratings Agencies in India, 2014. Paragraph 1.7 of the Policy Guidelines state as under:

“The company shall comply with the following cross holdings requirements (a) No single company/ legal entity, either directly or through its associates or inter-connected undertakings, shall have substantial equity holding in rating agencies and broadcasters/advertisers/ advertising agencies. (b) No single company/legal entity, either directly or through its associates or inter-connected undertakings, shall have substantial equity holding in more than one rating agency operating in the same area. (c) The cross-holdings restriction will also be applicable in respect of individual promoters besides being applicable to legal entities. (d) A promoter company/member of the board of directors of the rating agency cannot have stakes in any broadcaster/ advertiser/advertising agency either directly or through its associates or inter-connected undertakings.

Explanation: For the purpose of para 1.7, substantial equity shall mean equity of 10% or more of paid-up equity. Having a substantial equity holding in companies shall constitute a cross-holding. Provided that the eligibility conditions stipulated at 1.5, 1.6 and 1.7 will

1

WP(C) 494/2014

not be applicable in the self-regulation model where the industry-led body, such as, Broadcast Audience Research Council (BARC) itself provides the rating.” Paragraph 16 of the Guidelines state

“Provisions with respect to existing rating agencies 16.1 These guidelines shall also be applicable to the existing rating agencies.

16.2 No rating agency shall generate and publish ratings till such time that they comply with the provisions of these guidelines.”

The Petitioners have argued that the impugned Guidelines are without jurisdiction and in any event no executive guidelines can operate to prejudice of any person until and unless the same is supported by legislative authority, i.e., a specific rule of law must authorize such action. The Petitioners also relied upon Section 11(1)(a)(iv) and (vii) of the TRAI Act to submit that TRAI has no jurisdiction to recommend the impugned Guidelines. The Delhi High Court vide its order dated February 12, 2014 granted an interim stay on paragraphs 1.7(a) and (d) as well as paragraphs 16.1 and 16.2 of the Guidelines till the disposal of the writ petition. The interim order was passed in view of the deadline for registration under the impugned Guidelines was going to expire on February 15, 2014. The Court has further directed the Petitioners to disclose the list of petitioner No. 1’s affiliated companies engaged in Advertising Sector in India as well as to provide a list of significant clients of its affiliated Advertising Companies on its website. By the said order TAM Media Research Private Limited in which petitioner No. 1 i.e. Kantar Market Research Services Private Limited holds 50% shares, was granted an additional time of two weeks to get registered under the Policy Guidelines. The Court further held that the aforesaid interim arrangement was without prejudice to the rights and contentions of either of the parties and has been put in place only to promote transparency and to ensure that in the interregnum no party suffers irreparable loss and injury. The matter is pending before the Delhi High Court.


Role and Rule of Law Media & Entertainment Industry Television

101

05. APPLICATION OF THE COPYRIGHT ACT, 1957, AND 2012 AMENDMENT

T

he Copyright Act, 1957, defines a cinematograph film as any work of audiovisual recording and includes a sound recording accompanying a visual recording. A cinematograph film therefore does not merely include a feature film but any audio visual recording such as television program, advertisement film, etc. Therefore the provisions of the Copyright Act applicable to the film sector would be applicable to the television industry as well.

Broadcast means communication to the public: (i) by means of wireless diffusion, whether in any one or more of the forms of signs, sounds or visual images; or (ii) by wire and includes a re-broadcast. A programme broadcast usually includes literary, dramatic or musical works or records in which independent copyright may subsist. The broadcasting organisation is therefore required to obtain the consent or licence of the copyright owner of the work in question.

Infringement of Broadcast Reproduction Right: The following acts, if done without licence of the owner of broadcast reproduction right, would amount to an infringement: (a) re-broadcasting the broadcast; or (b) causing the broadcast to be heard or seen by the public on payment of any charges; or (c) making any sound recording or visual recording of the broadcast; or (d) making any reproduction of such sound recording or visual recording where such initial recording was done without licence or, where it was licensed, for any purpose not envisaged by such licence; or (e) selling or giving on commercial rental or offer for sale or for such rental, any such sound recording or visual recording referred to in clause (c) or clause (d),

Rights of Broadcasting Organisation under the Copyright Act, 1957

Section 39: Acts not infringing broadcast reproduction right:

Section 37: Broadcast Reproduction Right:

No broadcast reproduction right or performer’s right shall be deemed to be infringed by-

Every broadcasting organisation has a special right, Broadcast Reproduction Right, in respect of its broadcasts. The broadcast reproduction right shall subsist until 25 years from the beginning of the calendar year next following the year in which the broadcast is made.

(a) the making of any sound recording or visual recording for the private use of the person making such recording, or solely for purposes of bona fide teaching or research; or (b) the use, consistent with fair dealing, of excerpts of a perfor-


102

Role and Rule of Law Media & Entertainment Industry Television: Chapter 5: APPLICATION OF THE COPYRIGHT ACT, 1957, AND 2012 AMENDMENT

The provision of statutory licensing would ensure that the content becomes available for public broadcast without any discrimination and on reasonable royalties to be fixed by the Copyright Board mance or of a broadcast in the reporting of current events or for bona fide review, teaching or research; or (c) such order acts, with any necessary adaptations and modifications, which do not constitute infringement of copyright under section 52.

Copyright Amendment Act 2012: Any Copyright legislation in India needs to ensure that the public interest is not compromised so far as public access to information and entertainment in literary and musical work is concerned.

A. Broadcasters’ liability to pay royalties

► The above amendment has been brought in to facilitate access to the works for the growing broadcast industry. At present, the access to copyright works by broadcasters was dependent on voluntary licensing. As a result, unreasonable terms and conditions were being set by the copyright societies and owners. There are divergent views by the courts in interpreting the existing compulsory licensing provisions under Section 31. There were litigations pending before various high courts as well as the Copyright Board regarding the nature of license and the rate of royalties to be paid when works particularly songs were used for broadcasting. The procedure for obtaining a statutory license and the mechanism of determining royalties is set out in Chapter VIII Copyright Rules, 2013. The process is:

► The Copyright (Amendment) Act, 2012 casts an obligation on the

► Interested person to give public notice in two daily news papers having circulation in the major part of the country and the website of the Copyright Office. Separate notice for radio and television broadcasting.

► With the amendment to Section18 and 19 of the Copyright Amendment Act, 2012, authors of underlying works included in a cinematograph film and sound recording not forming part of cinematograph film are entitled to receive royalty to be shared on an equal basis with the assignee of copyright for the utilisation of such work (except theatrical rights in case of cinematograph films). With respect to authors of literary and musical works this right to receive royalty is non assignable. In addition to the above, performers are entitled to a right to receive royalty in case of making of the performances for commercial use.

► Any owner of copyright or any broadcasting organisation or any other interested person may within 30 days from the date of publication of public notice give suggestions with adequate evidence as to the rate of royalties to be fixed including different rates for different works and different formats.

broadcasters (assignees in the arrangement between producers and broadcasters) to pay royalties for the exploitation of works on the satellite platform.

► Therefore, the broadcaster would have to pay royalties to the copyright society of which the authors and owners of underlying works are members as per the tariff scheme of the copyright society. The Copyright Society would thereby distribute the royalties amongst the authors and owners of the underlying works as per the distribution scheme of the copyright society. Similarly the broadcaster would have to pay royalties to the performers’ society with respect to utilisation to broadcasting of performances for commercial use.

B. Statutory Licence for broadcasting ► Section 31-D introduced by the Copyright Amendment Act, 2012, provides for Statutory Licence for broadcasting of literary and musical works and sound recording. This is to ensure that the content becomes available to everyone desirous of the same without any discrimination and on payment of reasonable royalties to be fixed by the Copyright Board and at the same time the owners of copyright works are also not subject to any disadvantages.

► Hearing by the copyright board giving opportunity to all persons who have made suggestions ► Copyright Board to fix the rate of royalty within two months.

Factors to be considered while determining royalties: a)

time slot in which the broadcast takes place and different rates for different time slot including for repeat broadcast;

b) different rates for different nature of works; c)

the normal market practice of determining advertisement rates for different time slots and in case of television broadcast the target rating point (TRP);

d) such other matters as may be considered relevant by the Copyright Board. e)

Revision of royalty rates preferably every two years.


Role and Rule of Law Media & Entertainment Industry Television

103

06. Miscellaneous Disputes

A. DISPUTES ON TITLE The television sector has attracted disputes with respect to infringement of titles of programmes. The case regarding the title, Emotional Atyachar, is one of the most significant cases.

● Gen X Entertainment vs Purple Haze Entertainment (Emo-

tional Atyachar case)

Court: Bombay High Court Citation: Appeal (Lodging) No. 598 of 2010 IN Notice of Motion No.__ of 2010 in Suit (Lodging) No. 2498 of 2010 Coram: Mohit Shah and DY Chandrachud, JJ Date: September 2, 2010 Facts: The Plaintiff was the owner of the TV show, Emotional Aty-

achar, and the Defendant was releasing a film titled, Emotional Attyachar. The Plaintiff had told the court that it had applied for trademark registration of the title of their show and the Defendants were aiming at monetising on the goodwill of the Plaintiff’s TV show, as the audience would believe that the makers of the show and film were the same.

The single judge referred to the Dadagiri case1 wherein two television shows were allowed to be telecast on different channels with the same title, Dadagiri. The court held that the platform was different and each work is different, specific, separate and a unique commercial item, each book, movie, play or record is an economic market in itself and 1

Gen X Entertainment Ltd vs Zee News Ltd (Notice of Motion No.2945 OF 2009 in Suit No. 2083 of 2009)

these are not in competition with similar works. Therefore, the single judge held that there is no balance of convenience in favour of the Plaintiff and the injunction was denied. An appeal was filed against the order.

Ratio: While hearing the appeal, the court directed the Defendant, dur-

ing the pendency of the appeal, to put a disclaimer at the commencement of the movie and in all their promotional literature and posters that the film had nothing to do with the reality TV show of the Plaintiffs. The court further directed the Defendant to furnish a bank guarantee of a nationalised bank for Rs 50 lakh and the grant of interim injunction in favour of the Appellants-Plaintiffs was declined. The matter is still pending. (Refer to Annexure 2(i) for other cases)

B. DISPUTES ON OBSCENE CONTENT Broadcasters have to comply with the Programme Code and Advertisement Code while broadcasting content on television. Several shows have attracted the attention of the MIB and the public at large for showing obscene/ content not fit for unrestricted public viewing.

● Viacom 18 Media Private Limited and Anr vs Ministry of Information and Broadcasting and Ors. (Big Boss case) Court: Bombay High Court Citation: Writ Petition No. 2917 of 2010 Coram: SJ Kathawalla and UD Salvi, JJ Date: December 27, 2010


104

Role and Rule of Law Media & Entertainment Industry Television: Chapter 6: Miscellaneous Disputes

The court allowed the telecast of bigg boss during prime time (between 9 pm and 11 pm) and directed that the TV show must strictly adhere to the Programme Code


105

Facts: The Petitioner, a channel, challenged an order issued by the Ministry of Information and Broadcasting (MIB), alleging that the content of the show, Big Boss, was violative of the Programme Code under Section 5A of the Cable Television Networks (Regulation) Act, 1995, and Rules framed there under and of the Uplinking Guidelines under the Cable Act. The order directed the Petitioners to shift the timings of the show to post 11 pm and not on prime time television as being done by the Petitioners. The court directed the Respondents to issue a show cause notice pertaining to the episodes which were offensive. The MIB issued a notice to the Petitioners listing eight episodes, which were offensive and violative of various provisions under the Cable TV Act. Petitioners filed a detailed reply and also appeared before the appropriate authorities. However, the MIB on December 23, 2010, passed the following order: a) To shift the said show to anytime after 11 pm. b) To run an apology scroll on the said show for three days c) To modify the content of the said show in accordance with the Programme Code d) To ensure no transmissions or news clippings of the said show to be telecast between 5 am to 11 pm.

Relevant submissions made by the Petitioners were that: 1) That the Petitioners had not violated the Uplinking Guidelines or any provisions of the Programme Code under the Cable Act and Rules framed thereunder. 2) Grave harm, loss and damage, injury and prejudice will be caused to the petitioners if the timing is changed. 3) The Petitioners are willing to submit an undertaking to not screen any dialogue which required to be beeped and/or screen any obscene gestures of the participants and that they shall follow the provisions of the Cable Television Networks (Regulation) Act 1995, and Rules framed thereunder and also the other directions of the MIB in respect of not telecasting the clippings of the impugned episodes.

Ratio: The court passed an order allowing the show to be aired be-

tween 9 pm and 11 pm and directed that the eight objectionable episodes or part thereof must not be screened on any channel. The court directed that the Petitioners must strictly adhere to the Programme Code and the show must not contain any content which requires beeping and must not contain any content which has any objectionable gestures of the participants.

► The show, Sach Ka Saamna, also attracted attention in the cases, Deepak Maini vs Star Plus & Ors1 and Star India Private Ltd. vs Union of India2 .

● Viacom 18 Media Pvt. Ltd & Anr v/s Union of India Court: Delhi High Court Citation: W.P. (C) 3402/2013 and Appeal: LPA (Civil) No. 374 of 2013 Coram: Justice V.K. Jain Date: May 24, 2013 1

Citation: WP(C) Nos. 10383/2009 and 10396/2009

2

Citation: Writ Petition No. (C) 879/2010

Facts in brief: The Ministry of Information and Broadcasting had is-

sued two separate show cause notices for separate TV serial programs viz. “Comedy Central Presents” and “Popcorn which were telecast on the channel ‘Comedy Central’, alleging mainly that the content was denigrating to women. The show cause notices were referred by the Petitioner to the Broadcast Content Complaints Council for their consideration and decision. BCCC passed its decision and communicated the same to MIB wherein BCCC advised the channel to discontinue the said episode with respect to one program and to be cautious about airing programmes having similar content in future. The MIB however passed an order prohibiting transmission or re-transmission of the said Channel in any platform throughout the territory of India for a period of 10 days. The petitioner therefore challenged the order of the MIB on the following grounds: (i) the respondent did not consult BCCC before imposing penalty, though such consultation was mandatory. (ii) No action was recommended by the BCCC, which is a broad-based professional body against the petitioner and (iii) the penalty imposed upon the petitioner is disproportionate to the violation alleged to have been committed by the channel. The Petitioner referred to paragraph 10. 2 of the Uplinking Guidelines under which violation is constituted and determined only in consultation with established self regulating mechanisms. The phrase “violation” that is used in Clause 10.2 is also used in Clause 8.2 of the Uplinking Guidelines which provides for offences and penalties and therefore by the accepted principles of statutory interpretation, this phrase must have the same meaning in both clauses as the draftsman is intended to have used the same word with the same meaning in one instrument. The Petitioner further contended that several courts in India have acknowledged BCCC as the self regulating body. Reference to the cases of Indraprastha People & Anr v/s Union of India in WP Civil 1200 / 2011 of Delhi High Court was given. Reference to the case of Star India Private Limited v/s Union of India in WP 879/ 2010 of Delhi High Court was also made wherein there was a tacit acknowledgement by the I&B Ministry that the complaints received by it about objectionable content of television programmes require to be examined by a broad-based expert body. The Petitioner further contended that the penalty imposed is grossly disproportionate considering the nature of offence and that the Respondent has wrongly imposed penalty under Section 20 (2) of the Cable Television Networks (Regulation) Act, 1994 which gives the power to the Central Government to prohibit the transmission of any channel or programme in the interest of public order, decency or morality and which should be applied only in grave and rare occasions as against Section 20(3) of the said Act under which the Central Government can prohibit the transmission or re-transmission of a programme if it considers that any programme of a channel is not in conformity with the prescribed programme code under Section 5 of the Cable TV Act.

Ratio: The single judge dismissed the petition on the following

grounds (i) Under provisions of the Cable Television Networks (Regulations) Act, 1995 consultation with BCCC is not a requirement laid down in the said Act. (ii) Under Clause 10.2 of the Policy Guidelines, the self-regulatory body needs to be consulted only for the purpose of determining whether the contents of any particular telecast constitute a violation of the said Policy Guidelines or not. No such consultation is prescribed while deciding the quantum of penalty to be imposed upon the offending channel (iii) Considering the highly vulgar and objectionable nature of the contents, it would be difficult to say that the penalty imposed upon the petitioner was wholly disproportionate to the violation or that no reasonable person could have awarded such a penalty for the violation of this nature.

Appeal: The Petitioners filed an appeal before the division bench of the Delhi High Court wherein the appellant apprised the court that they had served three days of the penalty and both the programmes have already been suspended. The appellants further gave an undertaking that the said programmes will not be telecast in future and in the event the appeal is dismissed, the appellant would undergo the remaining period of prohibi-


106

Role and Rule of Law Media & Entertainment Industry Television: Chapter 6: Miscellaneous Disputes

tion imposed by the order. The division bench of the Delhi High Court therefore stayed the single judge’s order directing the prohibition of transmission and re-transmission of the said Channel until further orders. The matter is pending before the Delhi High Court. (Refer to Annexure 2 for details of cases)

C. FORMAT RIGHTS DISPUTE There have been an increasing number of disputes in the television industry with respect to copyright infringement of formats of television shows. The judgment of Bombay High Court in the case of Zee Telefilms vs Sundial1 is one of the landmark cases which laid down the test of similarity to prove copyright infringement.

● Zee Telefilms Ltd and Film And Shot & Anr. vs Sundial Communications Pvt. Ltd. & Ors. Court: Bombay High Court Citation: 2003 (5) Bom CR 404 Coram: AP Shah, DK Deshmukh, JJ Date: March 27, 2003 Fact: The Plaintiff had filed this suit against the Defendants for breach

of copyright and misuse of confidential information with respect to the Plaintiffs’ work, Krish Kanhaiyya. The Plaintiffs took out a Notice of Motion seeking an injunction restraining the Defendants from producing or in any manner exploiting or broadcasting through television or any other medium, or otherwise any programme deceptively similar to the original concept and format of the Plaintiffs.

Ratio: The court compared the two programs: Krish Kanhaiya of the

Plaintiff and Kanhaiyya of the Defendant, and observed that the striking similarities in the two works cannot be said to constitute merely chance. The only inference that can be drawn from the material on record is unlawful copying of the Plaintiff’s original work. The court further observed that in order to find out similarity in the two concepts, what is to be seen is the substance, the foundation, the kernel and the test as to whether the reproduction is substantial is to see if the rest can stand without it. If it cannot, then even if many dissimilarities exist in the rest, it would nonetheless be a substantial reproduction liable to be restrained. In view of this, the court held that it had no hesitation in holding that the original Plaintiff had established that there had been infringement of their copyright.

► With the growing awareness among authors, there has been an

increase in the number of such format right disputes including disputes for the shows, Shubh Vivah2, Summer Showdown3, Antakshari the Great Challenge4 and Sound Tripping5.

● Endemol Nederland B.V. and Ors v/s Vedartha Entertainment Pvt. Ltd and Ors 1

Citation: 2003 (5) BomCR 404

2

Anil Gupta and Anr vs Kunal Das Gupta and Ors (AIR 2002 Del 379)

3 Urmi Juvekar Chiang vs Global Broadcast News Limited and Anr (2008(2) BomCR400) 4

Zee Entertainment Enterprises Ltd. vs M/s. Gajendra Singh & Ors. (Appeal No. 75 of 2008 in Notice of Motion No. 1648 of 2007 in Suit No. 1253 of 2007)

5

Clockwork Studio vs Viacom 18 Media Private Limited (Suit Lodging no. 941 of 2012)

Court: Bombay High Court Citation: Notice of Motion (L) No. 1219 of 2013 in Suit (L) No. 514 of 2013

Coram: S.J. Kathawalla, J Date: June 27, 2013 Facts: The Plaintiffs had filed this suit for a permanent injunction

against the Defendants from exploiting, telecasting, publicizing or continuing to telecast the Defendant’s show “Malayalee House” in any manner whatsoever and /or from infringing the Plaintiff’s copyright in the production bible / format or concept note of “Big Brother / Big Boss”. The Plaintiffs, inter alia, sought permanent injunctive reliefs against the Defendants from passing off the impugned show “Malayalee House” as and for the Plaintiff’s show “Big Boss / Big Brother” or from in any manner making or continuing to make, produce, broadcast, telecast or publish the impugned show “Malayalee House” or any further episodes thereof or any show deceptively similar or a colorable imitation of the Plaintiff’s show “Big Boss / Big Brother”. In addition to aforesaid, the Plaintiffs also sought a decree against the Defendants for Rs.10 crores as and by way of damages for infringement of copyright and for Rs.10 crores for loss of reputation and Plaintiff’s potential opportunity to produce the show “Big Boss / Big Brother” in Malayali language. The Plaintiffs further sought permanent injunctive reliefs against the Defendants for disclosing the confidential information pertaining to the Plaintiff’s show “Big Boss / Big Brother” including the written concept note / content Production Bible and a detailed step-bystep format of the Plaintiff’s show “Big Boss / Big Brother”.

Ratio: At the ad-interim stage, the Court recorded the undertaking of Defendant Nos. 1 to 3 and 5 not to telecast the serial “Malayalee House” on any other channel and/ or in any other languages, without giving four weeks prior notice to the Plaintiffs. The matter is pending before the Bombay High Court. (Please refer to Annexure 2 for case details)

D. DISPUTES ON MORAL RIGHT Section 57 of the Copyright Act, 1957 confers certain moral rights to the authors of works. The case of Arun Chadha vs Oca Productions Private Limited6 recognized the moral rights of a producer and hence is an important case.

● Arun Chadha vs Oca Productions Private Limited & Ors. Court: Delhi High Court Citation: CS (OS) 1096 0f 2009 Coram: Kailash Gambhir, J Date: July 5, 2012 Facts: The Plaintiff filed a suit seeking to restrain the Defendants from

broadcasting, Ek Kadam Aur, a TV serial based on an autobiographical work, Kasturi Kundal Basey, the rights of which the Plaintiff had acquired through a valid assignment and thereafter assigned to one DAE prior to the commencement of production of the said show. The Plaintiff claimed that he had completed the production of his serial based on the said autobiographical work and had given the same for post-production

6

Citation: CS (OS) 1096 0f 2009


107

(editing) to a studio (Defendant No. 2). It was subsequently revealed to the Plaintiff that few of his episodes were already telecast by the Defendants without any consent, on Doordarshan channel with the same cast and crew and also credit was given to the writer of the said autobiographical work, but the Defendant did not give any credit to the producer, the director, cameraman and editor and their names were changed. The Plaintiff moved the court claiming authorship over the TV serial and sought damages for breach of special rights under Section 57 of the Copyright Act, 1957.

Ratio: After the examination of cast and crew of the said TV serial,

who stated that they had not worked with the Defendant for the production of the infringing episodes of the TV serial, Ek Kadam Aur, the court accepted the Plaintiff’s contention as the Defendant could not adduce any evidence to prove otherwise. The court held that the principal underlying Section 57 of the Copyright Act is that damage to the reputation of the author is something apart from infringement of work itself. Section 57 provides an exception to the rule that after an author has parted with his rights in favour of another person, the latter alone is entitled to sue. The court therefore granted permanent injunction against the Defendants, without making any order for damages.

E. Telecom Dispute Settlement

Appellate Tribunal (TDSAT) disputes. The TDSAT has been set up under Section 14 of the Telecom Regulatory Authority of India Act, 1997, by TRAI (Amendment) Act, 2000 to adjudicate disputes and dispose of appeals with a view to protect the interests of service providers and consumers of the telecom sector and to promote and ensure orderly growth of the telecom sector. The functions of the appellate tribunal are to adjudicate any dispute between a licensor and licensee, between two or more service providers, between a service provider and a group of consumers, and to hear and dispose of appeals against any decision or order of TRAI, the appellate tribunal consists of chairperson and two members.

● Viacom 18 Media Pvt. Ltd. vs MSM Discovery Pvt. Ltd. Petition No. 220(C) of 2010

Coram: SB Sinha (chairperson) and PK Rastogi (member)

not given proper tiering and/or packaging to Viacom’s channels; ► The contention of MSM-D that there had been no commitment to grant stake to Viacom, and that the talks failed even prior to entering into the agreement in question was not in spirit of the maintaining good relationship between the parties; ► It had been fabricating subscriber reports; ► It had failed to provide access to interconnection agreements with the distribution platforms. ► Its attitude towards Viacom vis-à-vis its own channel was to some extent discriminatory.” TDSAT further observed that “We have noticed hereto before the principles and/or measures for grant of damages. We, therefore, are of the opinion that grant of three months’ profit as damages subject of-course, to the adjustment of due amount to Viacom in terms of the agreement would sub-serve the ends of justice; claim of damages under other heads having not been proved.” TDSAT therefore held that MSM-D, upon adjusting the amount of Rs 2.68 crore and Rs 11 lakh payable to it by Viacom, is directed to pay the balance sum to Viacom within four weeks from date, failing which interest @ 12% p.a. shall become payable till realization thereof.

F. JOHN DOE ORDERS Recently, there have been John Doe orders passed wherein certain rogue websites and unknown websites (John Doe) have been restrained from communicating the FIFA World Cup, 2014 and the recent IndiaEngland Series Matches, 2014. Several internet service providers, Department of Telecommunications (DoT) through Ministry of Communications and Information Technology and Department of Electronics and Information Technology (DEIT) were also arrayed as defendants to ensure effective implementation of any orders which would be passed by the court.

● Multi Screen Media Pvt. Ltd V/s Sunit Singh and Ors (FIFA WORLD CUP 2014)

Date: December 23, 2011

Court: Delhi High Court

Facts: Viacom18 had filed a case in the TDSAT against MSM Discov-

Citation: CS (OS) 1860/2014

ery, a content aggregator alleging material breaches, misrepresentation and under reporting of subscribers’ base on MSM Discovery’s distribution bundle. Both the parties had entered into an agreement of carriage of channels for three years starting from April 1, 2009. The case had arisen out of a dispute following the decision by Viacom18 to pull out its four channels, Colors, MTV, Nick and Vh1, before the expiry of a three-year contract. Viacom18 had decided to shift its channels to Sun18 which was a newly formed joint venture between Sun Network and Network18. Viacom18 has claimed Rs 127 crore as damages from MSM-Discovery.

Ratio: TDSAT passed a ruling in favour of Viacom18 restraining MSM-Discovery from representing itself as an agent for distribution of Viacom18 channels to third parties. The court while deciding the quantum of damages summarized the following findings: ► “The relationship between the parties was not that of a principal and agent but between a principal and principal; ► Despite the same, there was a fiduciary relationship between the parties which, to a great extent, has been breached by MSM-D in so far as it has

Coram: Hon’ble Mr. Justice V. Kameswar Rao Date: June 23, 2014 Facts: The Plaintiff, Multi Screen Media Private Ltd (official broad-

caster of FIFA World Cup 2014) filed a suit against certain rogue websites, cable operators, internet service providers seeking injunction against the communication of the FIFA WORLD CUP 2014 by certain rogue websites (a list of 472 websites was provided) as well as unknown websites (John Doe). In order to ensure the implementation of the order, the Department of Telecommunications (DoT) through Ministry of Communications and Information Technology and Department of Electronics and Information Technology (DEIT) were also arrayed as defendants to the suit. The Plaintiff’s case was also that it has an internet and mobile portal known as Sony LIV and has a dedicated digital sports entertainment service (transmitted through internet and mobile) known as LIV Sports and that the Plaintiff had made substantial investments in securing the exclusive Mobile Transmission and Internet Broadband Transmission Rights for the 2014 FIFA World Cup which could be recovered only during live broadcast of matches. The Plain-


108

Role and Rule of Law Media & Entertainment Industry Television: Chapter 6: Miscellaneous Disputes

TDSAT passed a ruling in favour of Viacom18 restraining MSM-Discovery from representing itself as an agent for distribution of Viacom18 channels to third parties. tiff contented that various websites are indulging in hosting, streaming, providing access to the Plaintiff’s content and thereby infringing the exclusive rights and broadcast and re-production rights of the Plaintiff and that the acts of infringement were not only causing the Plaintiff loss of substantial revenues but would also take away the legitimate revenue to the Government through service tax etc which is payable on the subscription fee payable by the named and unnamed defendants if they conduct their business illegitimately. The Plaintiff also submitted that many of the websites are anonymous in nature and it is virtually impossible to locate the owners of such websites or contact details of such owners. It was further submitted that many of these Rogue Websites also hide behind domain privacy services offered by various domain name Registrars. In its suit, the Plaintiff has also submitted that owing to the fact that the defendant websites themselves are, as a whole, instruments/ vehicles of infringement, it is not practical/ viable to target / seek a restraint against individual or some specific URL’s belonging to the defendant websites and unless, therefore, access to the entire website of known and unknown defendants are blocked, there is no alternate and efficient remedy that is open to the Plaintiff. The limited relief sought against the ISP’s was to ensure the effective implementation of any relief that the Hon’ble court would grant in favour of the Plaintiff by disabling access into India of such rogue websites which the Plaintiff alleged as being primarily vehicles of infringement and which host, stream, make available and communicate to its users, illegal content including the 2014 FIFA World Cup, being broadcast on the Plaintiff’s channel . It was further submitted by the Plaintiff that the DOT itself acknowledges the fact that ISPs have an obligation to ensure that no violation of third party intellectual property rights takes place through the networks of the ISPs and that effective protection is provided to right holders of such intellectual property. By virtue of the obligations that have been imposed upon an ISP under its License Agreement with the DOT, the ISPs are mandated to ensure that the content which infringes intellectual property is not carried on its network. As per clause 33.3 of the license agreement for the Provision of Internet Services between the Department of Telecommunications and the concerned ISP, and clause 40.3 of the License Agreement for Unified License (Access Services) between the Department of Telecommunication and the concerned ISP, whichever is applicable, the ISPs have an obligation to ensure that content which infringes intellectual property is not carried on its network.

Ratio: The Hon’ble Court held that the Plaintiff having the exclu-

sive right to provide live, delayed and repeat broadcast of 2014 FIFA World Cup Matches on its aforementioned channels and being the official internet and mobile broadcaster of the matches, any activity of the defendants in hosting, streaming, providing access to the 2014 FIFA World Cup Matches would amount to an act of piracy. The Court passed an ex-parte ad interim John Doe order restraining the rogue websites, and 472 websites (list of which was provided by the Plaintiff) restraining the websites from in any manner hosting, streaming, broadcasting, rebroadcasting, retransmitting, exhibiting, making available for viewing and downloading, providing access to and / or communicating to the public, displaying, uploading, modifying, publishing, updating and/ or sharing (including to its subscribers and users), through the internet, in any manner whatsoever, the Plaintiff’s broadcast, as broadcasted / contained in its Channels SONY SIX, SONY SIX HD, SONY PIX, and

SONY PIX HD in relation to the 2014 FIFA World Cup matches and content related thereto, so as to infringe the Plaintiff’s broadcast reproduction rights. The Court further restrained the defendants from in any manner hosting, streaming, broadcasting, rebroadcasting, retransmitting, exhibiting, making available for viewing and downloading, providing access to and / or communicating to the public, displaying, uploading, modifying, publishing, updating and/or sharing (including to its subscribers and users), through the internet in any manner whatsoever, the broadcast of the 2014 FIFA World Cup Matches and the content related thereto, amounting to unfair competition and commercial misappropriation of the Plaintiff’s rights. The Internet service providers were directed to ensure and secure compliance of this order. The Court further directed the DOT AND DEIT to ensure and secure compliance of this order by calling upon the various internet service providers registered under it to block access to the various websites identified by the Plaintiff in the instant suit or such other websites that may subsequently be notified by the Plaintiff to be infringing of its exclusive rights. Vide a subsequent order of July 1, 2014, a revised list of 219 websites (in place of the 472 websites mentioned in the order dated June 23, 2014) was submitted by the Plaintiff. The Court directed one of the ISP’s (Defendant No. 40) to scrutinize the list and in case to their knowledge if any website in the list included a legitimate website, the Defendant was directed to inform the Plaintiff and barring such websites, the other websites in the list were ordered to be injuncted as per order dated June 23, 2014. On 22nd July, 2014 counsel for the Plaintiff submitted that since the FIFA World Cup 2014 had come to an end, he had instructions not to press the suit any further. The suit was accordingly dismissed as withdrawn. In the case Star India Private Limited v/s Haneeth Ujwal and Ors a similar order was obtained by the Plaintiff with respect to INDIA ENGLAND SERIES MATCHES 20141 wherein the court restrained the rogue websites listed (107 websites) by the Plaintiff from in any manner hosting, streaming, broadcasting, rebroadcasting, retransmitting, exhibiting, making available for viewing and downloading, providing access to and / or communicating to the public, (including to its subscribers and users), through the internet, in any manner whatsoever, the Plaintiffs’ broadcast, as broadcasted / contained in its Channels Star Sports 1, Star Sports 2, Star Sports 3, Star Sports 4, Star Sports HD1 and Star Sports HD2 in relation to the 2014 India - England Cricket Series content, so as to infringe the Plaintiffs’ broadcast reproduction rights. The said websites were further restrained from in any manner hosting, streaming, broadcasting, rebroadcasting, retransmitting, exhibiting, making available for viewing and downloading, providing access to and / or communicating to the public, (including to its subscribers and users), through the internet in any manner whatsoever, the broadcast of the 2014 India - England Cricket Series content, amounting to unfair competition and commercial misappropriation of the Plaintiffs’ rights. The ISP’s , DOT and DEIT were directed to ensure compliance of the order.

1

CS (OS) 2243/2014- Delhi High Court


Role and Rule of Law Media & Entertainment Industry Television

109

07. Compliance Checklist for Content

T

elevision content spans a variety of subjects, themes and ideas, but there are certain regulations which may be applicable contingent on the subject/type of content to be broadcast by the channel.

► Similarly under the CBFC Guidelines 2 (iii) (c) framed by the Central Government under Section 5 B( 2) of the Cinematograph Act, 1952, CBFC is required to ensure that scenes depicting the cruelty to or abuse of animals are not shown needlessly.

Illustration: In case an animal needs to be shown in a television pro-

● People for Ethical Treatment of Animals (PETA) v Union of India & Ors1

gramme, then the makers as well as the broadcasters need to adhere to all the legislations applicable to animals and accordingly design/ broadcast the content. Keeping the above in mind, here is a compliance checklist which may be useful for the broadcasters/content developers to keep a tab on the applicable legislation:

In a petition filed by People for Ethical Treatment of Animals (PETA) seeking directions for the use of animals in films, the Bombay High Court issued certain directions: (i) “In all cases where an applicant for certification of a film for public exhibition states that an animal has been used in the shooting of a film CBFC should require the production of a certificate from the Animal Welfare Board certifying that the provisions of the Performing Animals (Registration) Rules, 2001 have been adhered to. Such a certificate shall be filed with the application for certification of a film for public exhibition and, in any event, before the film is certified for public exhibition;

Compliance Checklist:

The content of the programme to be broadcasted has to be in compliance with the following laws:

A.

Compliance with applicable laws and guidelines for shooting with animals:

(ii) Animal Welfare Board shall expeditiously within a period of two weeks of the submission of an application containing all the necessary particulars, process all applications for the grant of certificates for certifying compliance with the Rules.

1. ANIMAL WELFARE LAWS No Objection Certificate for films/ad films in which performing animals are used: Animal Welfare Board of India (AWBI) screens

applications under Performing Animals Rules of Films/Ad Films for issuing No Objection Certificate for the films/ad films, in which performing animals are used in two stages:

► Stage 1 - Pre-shooting permission: an application is to be made

to the AWBI along with the details about storyline, sequences where animals are proposed to be used. A complete justification for using animals, relevance of using animal and a fitness certificate alongwith ownership certificate is to be provided in order to obtain pre-shoot permission. It is mandatory for the applicant to state time and place of the proposed shooting.

► Stage 2 - No Objection Certificate: After obtaining the pre-shoot

permission, the producer/applicant has to adhere to the synopsis submitted to the AWBI. After the completion of the shooting the producer has to send to AWBI two CDs containing animal sequences along with a fitness certificate. The two copies of CDs must contain the audio track for screening.

(iii) CBFC shall take steps to publish and/or circulate the aforesaid requirements in an appropriate manner to the concerned trade bodies

B.

Compliance with the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954. ► Any infomercial/ commercial/ non-commercial advertisement to be broadcast must be in compliance with above mentioned Act which controls the advertisements of drugs and prohibits the advertisements of magical remedies for treatment of certain diseases and disorders such as procurement of miscarriage in women or prevention of conception in women, maintenance or improvement of the capacity of human beings for sexual pleasure, correction of menstrual disorder in women, etc.

2. ANIMAL PROTECTION UNDER THE CINEMATOGRAPH ACT, 1952

► It further prohibits the participation of any person in the publication of any advertisement relating to such a drug which directly or indirectly gives a false impression regarding the true character of the drug, or makes a false claim for the drug or is otherwise false or misleading in any material particular.

► Under the Cinematograph (Certification) Rules, 1983, Rule 21 (bb), a declaration is to be made by the producer that no cruelty is caused to any animals during the shooting of a film produced in India.

1

Writ Petition (PIL) (Lodging) No. 2490 of 2004


110

Role and Rule of Law Media & Entertainment Industry Television: Chapter 7: Miscellaneous Disputes

C. Compliance with ‘Guidelines

To Regulate Child Participation in TV Serials, Reality Shows And Advertisements 2010-2011: The National Commission for Protection of Child Rights (NCPCR) issued the following guidelines to safeguard the participation of children in an adult oriented industry: (i)

Content of programmes involving children

(ii)

Defining age-related norms for the participation of children in TV/Reality shows

(iii) Child protection and supervision (iv)

Ensuring the physical, mental and emotional conditions, welfare, dignity and safety of children who take part or are otherwise involved in any/all programmes

(v)

Terms and Conditions for Parental/Guardian Consent, also ensuring that the minor is chaperoned by his/her parent or legal guardian at all times of the programme.

(g)

Scenes in which less usual / uncommon methods of inflicting pain and injury are employed should be avoided. These include rabbit punches, suffocation, sabotage of vehicles and booby traps.

(h)

Smoking or drinking of alcoholic beverages by minors shall not be presented in a favorable light.

(i)

References to the consumption of illegal drugs should only be made where absolutely justified by the story line or context.

(j) Care must be taken in the treatment of themes dealing with gambling, prostitution, hideous crime, or social or domestic conflict. (k)

Child labour should not be shown unless it is a part of the plot, it should not be shown in favorable light and should not be encouraged.

D.

Compliance with National Flag Code and the Emblems and Names (Prevention Of Improper Use) Act, 1950

(viii) Setting up of regulatory and monitoring mechanisms

The content of a programme has to, at all times be in compliance with the above mentioned Act which states that except in manner prescribed by the Central Government, the usage of any name or emblem specified in the Schedule (eg: the Indian National Flag, the names of Ashoka Chakra or Dharma Chakra or the pictorial representation of Ashoka Chakra, etc.) or, any colourable imitation thereof is prohibited without the previous permission of the Central Government, for the purpose of any trade, business, calling or profession, or in the title of any patent, or in any trade mark or design.

(ix) Programmes should not promote, glorify or justify social evils such as child marriage, dowry, bigamy, son preference, etc.

Compliance with Self Regulatory Content Guidelines for Representation of National Assets:

Compliance with Guidelines of Programme and Advertising Codes under Cable Television Network Rules, 1994 regarding children

Ensure that following category of programmes are not broadcast:

(vi) Ensuring education of child participants (vii) Payment for children

Following rules shall be adhered in the programmes targeted at children:

(a) Programmes which contain criticism of friendly countries. (b) Programmes which contain aspersions against integrity of the Nation.

(a)

Scenes likely to frighten, unnerve and unsettle children should be avoided.

(b)

Scenes in which pleasure is taken in the infliction of pain or humiliation upon others should be avoided.

(d) Programmes that may adversely affect the judicial process of the country.

(c)

Scenes in which the infliction or acceptance of pain or humiliation is associated with sexual pleasure should be eliminated.

(e) Programmes which contains anything affecting the integrity of the country.

(d)

Scenes, which children might copy with injury to themselves or others, should be avoided.

(f) Programmes that may jeopardize or endanger the security of the State.

(e)

The techniques of hanging, experiments with fire, tying or locking up, submerging in water or covering one’s head with plastic bags should be handled with discretion and care. There should in particular be no detailed demonstration of the means or method of suicide. These considerations apply most acutely in the case of programmes appealing to children.

(g) Programmes that cast aspersions against the integrity of the President and the Judiciary.

Compliance with gaming, gambling laws

Scenes in which easily acquired and dangerous weapons are used should be avoided, and must be excluded entirely at times when large numbers of children may be expected to be watching. This applies especially to the use in a manner likely to cause serious injury, of knives and other offensive weapons, articles or substances, which are readily accessible to children. Children should not see them in frequent use.

TV programmes cannot carry shows that promote gambling or content which may be construed to be a ‘game of chance’ as opposed to a ‘game of skill’. What is gambling in India is determined by asking whether the game in concern is a game of skill or a game of chance. For a game to be considered a game of skill under Indian law, the position of law has been so far that it need not be a 100% skill based game, but predominantly a skill based game. A game of mere skill

(f)

(c) Visuals or words involving defamation or contempt of court.

E.


111

is simply one in which the element of skill predominates the element of chance. The Supreme Court explained the meaning of game of skill in the matter of KR Lakshmanan v State of Tamil Nadu1 : “A game of skill, on the other hand – although the element of chance necessarily cannot be entirely eliminated – is one in which success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player”.

GAMBLING

“A lottery is not unlawful in the sense of being prohibited by law, it is only in relation to Section 294A of the Indian Penal Code that it becomes illegal”. Each state has enacted their respective legislations on lotteries and states like Sikkim have permitted lotteries.

Gambling is a state subject and therefore each state has its own set of regulations for gambling. The only states in which gambling is allowed under guidelines are Goa and Sikkim.

“There are three elements essential to the existence of a lottery, namely, chance, consideration and prize; if these three elements are present the scheme is a lottery, otherwise it is not... If an essential element is absent the scheme is not a lottery, regardless of the motive for the omission”.

► The Public Gambling Act, 1867: This Central legislation provides for the punishment of public gambling.

► Section 294-A of the Indian Penal Code, 1860: This Section lays down punishment for keeping a lottery office without the authorisation of the State government. ► Section 30 of the Indian Contract Act, 1872: This Section prevents any person from bringing a suit for recovery of any winnings won by way of a ‘wager.’ (An agreement which is based on a future uncertain event wherein the loss of one person is the gain of the other). Thus no claim for recovery of any winnings in lotteries, gambling or betting can be brought before the court. ► State legislations: Various state legislations like The Bengal Public Gambling Act, 1867; The Bombay Prevention of Gambling Act, 1887; The Delhi Public Gambling Act, 1955: The Madras Gambling Act etc. have been created. These Acts are more or less similar as the object of these Acts is to ban/restrict gambling. ► Section 3 of the Bombay Prevention of Gambling Act, 1887 (Gambling Act) defines ‘gaming’ as: “In this Act ‘Gaming’ includes wagering or bet- ting, except wagering or betting upon a horse-race or dog-race, when such wagering or betting takes place(a) ... (b) ... (c) Between any individual in person, being present in the enclosure or approved place on the one hand and such licensee or other person li- censed by such licensee in terms of the aforesaid license on the other hand or between any number of individuals in person in such manner.”

LOTTERY A lottery has been described as a scheme for distributing prizes by lot or chance. Section 294A of the Indian Penal Code makes it penal to keep any office or place for the purpose of drawing any lottery not authorized by the government.

1

Citation: AIR 1996 SC 1153

In the case H Anraj vs Government of Tamil Nadu 3, the Supreme Court while considering the essential elements of ‘lottery’ held: “A chance for prize for a price. Essential elements of lottery are consideration, prize and chance and any scheme or device by which a person for consideration is permitted to receive a prize or nothing as may be determined predominantly by chance.”

The following are the various laws which regulate/restrict gambling in India:

► The Lotteries (Regulation) Act, 1998: This Central Legislation lays down guidelines and restrictions in conducting lotteries.

It was held in the matter of Sesha Ayyar vs Krishna Ayyar2 :

PRIZE COMPETITION The Prize Competition Act, 1955, provides for control and regulation of prize competitions. A prize competition is a competition (whether a crossword prize competition, a missing word picture prize competition) in which prizes are offered for the solution of any puzzle based upon the building up, arrangement, combination or permutation, of letters, words or figures. It has been held in the matter of RMD Chamarbaugwala vs Union of India4 the question before the court was if the Prize Competition Act, 1955, applies to competition in which success does not depend on any substantial degree of skill, and not to competitions in which success depends upon a substantial degree of skill The court stated that competitions in which success depends to a substantial extent on skill and competitions in which it does not so depend, form two distinct and separate categories. The difference between the two classes of competitions is as clear-cut as that between commercial and wagering contracts. The court stated that there might be difficulty in deciding in which category a given competition falls, but when its true character is determined, it must fall either under the one of the two above mentioned categories. The court, in this case, opined that the impugned provisions apply to competitions in which success does not depend to any substantial extent on skill.

F.

Compliance with guidelines regarding obscenity, sex and nudity: Programmes must comply with the Guidelines of Programme and Advertising Codes under Cable Television and Self-Regulation Guidelines, Content Code and Certification Rules for the General Entertainment & Non News & Current Affairs Broadcasting Sector regarding obscenity, sex and nudity:

2

AIR 1936 Mad 225 (FB)

3

AIR 1986 SC 63

4

AIR 1957 SC 628


112

Role and Rule of Law Media & Entertainment Industry Television: Chapter 7: Miscellaneous Disputes

► Sex scenes should not be shown unless there is a strong editorial justification for the same. ► Scene or programme on incest or child abuse of children must be treated with extreme sensitivity and not be exploitative. ► Non-consenting sexual relations, adultery, cohabitation and promiscuity should not be presented as desirable. ► Scene depicting rape or indecent assault, such depiction should be minimized. ► Content that is indecent, obscene, or of bad taste e.g. language and material, which depict or describe, in downright offensive terms, sexual or excretory organs or activities should not be broadcasted. The following depictions shall lead to violation of the provisions of this section and therefore should not be broadcasted: ► No frontal and back nudity shall be permitted except under very rare circumstances, for example in the context of medical documentaries etc. Even in such cases, scheduling (outside of children viewing hours) must be done appropriately. ► No scenes depicting sexual violence shall be permitted. However, a registering shot can be allowed considering the development of the plot and storyline, but, it needs to ensure that it does not offend or shock the public viewing the same. ► No scenes depicting sexual intercourse and suggestive material shall be permitted. ► No obscene jokes, gestures, dialogues shall be permitted.

G. Compliance with guidelines

prohibiting indecent representation of women: Programmes must comply with the Indecent Represent of Women (Prohibition) Act, 1986 And Compliance with Guidelines of Programme and Advertising Codes under Cable Television And SelfRegulation Guidelines, Content Code And Certification Rules For The General Entertainment & Non News & Current Affairs Broadcasting Sector.

Programmes must not: ► Depict women as mere objects or symbols of sexual desires or behavior. ► Excessive skin showing, vulgarity and portrayal of scantily dressed woman, in keeping with genre of show. ► Careful depiction of rape and molestation scenes, if storylines demands. ► Programmes should not depict or portray women in a manner that emphasizes passive, submissive qualities and encourage them to play a subordinate secondary role in the family and society.

► To ensure that programmes do not depict any form of violent, indecent, disturbing visuals, that lead to incite people to crime, cause disorder or violence or breach of law. ► To ensure that programmes likely to encourage the modus operandi of criminals or other visuals or words likely to incite the commission of any offence are not depicted. ► Programmes which are likely to induce, incite, encourage or glorify violence or terror or its perpetrators or contain anything against the maintenance of law and order or which promotes anti-national attitudes should not be broadcast. ► Not to broadcast programmes that could endanger “human” lives or prejudice the success of attempts to deal with a hijack or “hostage” or kidnapping. ► Programmes likely to incite violence against specific groups identified by race, national or ethnic origin, colour, religion, gender, sexual orientation, age, and mental or physical disabilities should not be broadcasted. ► Bloodshed and gore have to be kept to the minimum. Incase of portrayal of a murder, the method of death should not be demonstrated. ► Slitting of neck, wrist, hanging to death, stabbing should not be demonstrated or endorsed. ► Programme should not glamorize or promote in any manner gangsters, vandals, etc., or advocate the use of violence or criminal activity.

I.

Compliance with guidelines regarding religion: Programmes must comply with Guidelines of Programme and Advertising Codes under Cable Television and Self-Regulation Guidelines, Content Code and Certification Rules for the General Entertainment & Non News & Current Affairs Broadcasting Sector with Regards Religion. The content of a programme has to, at all times be in compliance with the following guidelines: ► Nothing contained in any programme should be prejudicial to maintenance of communal harmony and national integration. ► No programme which contains attack on any religion or religious communities or visuals or word contemptuous of religious groups or which promotes communal attitudes or is likely to incite communal or caste violence shall be broadcast. ► No programme likely to incite disharmony, animosity, conflict, hatred or ill will between different religious, racial groups, linguistic groups, castes, communities shall be broadcast.

Compliance with guidelines regarding depicting violence:

► No programmes or advertisements shall be permitted to be broadcast which counsels, pleas, advises, appeals or provokes any person to destroy, damage or defile any place of worship or any object held sacred by any class or persons with the intention of thereby insulting or demeaning or deriding the religion or any class of persons.

Programmes must comply with Guidelines of Programme and Advertising Codes under Cable Television and Self-Regulation Guidelines, Content Code and Certification Rules For The General Entertainment & Non News & Current Affairs Broadcasting Sector Regarding Depicting Violence.

► No programmes or advertisements inducing or claiming to the effect that any particular religion is the ‘only’ or ‘true’ religion or faith or provoking, appealing advising, imploring or counseling any person to change his/her religion or faith shall be permitted to be broadcast.

H.


113

► No programmes or advertisements playing on fear and having reference either explicit or implicit, to the alleged consequences of not being religious or not subscribing to a particular faith or belief shall be permitted to be broadcast.

Misrepresentation of facts

► In the name of religion, dangerous, retrogressive and gender discriminatory practices should not be promoted.

► There should not be any simulation of news programmes, which may alarm or mislead viewers either in programmes or in programme promotional material.

J.

Compliance with guidelines regarding depicting tobacco and alcohol consumption: Programmes must comply with the Cigarettes And Other Tobacco Products (Prohibition Of Advertisement And Regulation Of Trade And Commerce, Production, Supply And Distribution (Second Amendment) Rules, 2005 And Compliance with Guidelines of Programme and Advertising Codes under Cable Television and Self-Regulation Guidelines, Content Code and Certification Rules for the General Entertainment & Non News & Current Affairs Broadcasting Sector: ► It shall be mandatory for the broadcaster to ensure either placement of an anti-tobacco health warning as a prominent scroll at the bottom of the television screen during the period of such display or airing of anti tobacco health spots for a period of minimum thirty seconds during the telecast of each television programme of thirty minute duration or less. In case the television programme is more than thirty minutes further airtime of 30 seconds shall be allocated for each incremental thirty minutes, for telecasting anti tobacco spots. The minimum duration of each anti tobacco spot shall be not less than 15 seconds ► The use of illegal drugs, abuse of drugs, smoking, solvent abuse and the misuse of alcohol should not be featured in programmes, which have the effect of justifying or glorifying drinking. ► In addition, particular care is needed with programmes likely to be seen by children and young people. Programmes made especially for children shall not contain any intoxication, liquor, tobacco or cigarette unless an educational point is being made, or unless in very exceptional cases, the dramatic context makes it absolutely necessary.

K.

► Factual programmes, or items of portrayal of factual matters, should not materially mislead the audience.

L. REPRESENTATION OF SPECIAL CHILDREN Programmes broadcasted should not: ► Ridicule, mock or scorn physically or mentally challenged persons; and ► Depict mentally disabled people in a wrong way and encouraging superstition and blind belief in the portrayal of mental illness of the character in the serials/ soaps by creating barrier in medication. Mentally disabled people should not be depicted as more violent than the common person. ► Mentally disabled people with psychiatric diagnosis should not be generally portrayed as unsafe, dangerous and violent. ► Avoid erroneous and negative association of mental/disabled people which may stigmatize them as dangerous persons in the society. ► Avoid negative stereotypical images of psychiatrists, psychologists, mental health treatments and mental health facilities which may not only present inaccurate and unflattering stereotypes of the psychiatric profession that misinform the people and undermine the credibility of mental health care practitioners but also create hurdles in the treatment of medication of mentally disabled people. ► Unnecessary depiction of mental health practitioners as exploitative and unethical may do irreparable harm to people who are already hesitant to seek treatment. ► Methods of suicide and self-harm must not be included in programmes except where they are justified by the context and scheduled (not in children programs/viewing hours) accordingly.

Compliance with guidelines regarding broadcast of superstitious material:

M. PRE-NATAL DIAGNOSIS

Programmes must comply with the Guidelines of Programme and Advertising Codes under Cable Television And Self-Regulation Guidelines, Content Code And Certification Rules For The General Entertainment & Non News & Current Affairs Broadcasting Sector with Regards Broadcasting Superstitious Material. To ensure that programmes do not:

► Depiction of pre-natal diagnosis (sex determination of an unborn child) is banned in India. Hence, it should not be shown in any form.

► Demonstrate exorcism, the occult, the paranormal, divination, or practices encouraging supernatural or blind belief. ► Justify, encourage or glamorize evil or witchcraft practices. Fact, visuals and stories constructed to enforce false and superstitious beliefs are not acceptable. ► Demonstration of acts such as black magic, hypnosis should not be shown in detail as this could mislead the audience. ► Instill fear or revulsion, encourage blind belief or superstitions and enable the viewer to emulate the practices.

N. CONTESTS ► Any contest included in a programme or in an advertisement must offer an opportunity for all contestants to win on the basis of skill or knowledge and not purely by chance. ► All rules and conditions of contests, including commencing and closing dates, shall be clearly and fully announced at the beginning of the contest, and thereafter adequately summarized on each occasion. ► Where a contest is included in a programme, which is recorded in advance of the date of transmission, the closing date for the contest must be fixed so as to provide a reasonable opportunity for any person viewing the programme to send in an entry before that date.


114

Role and Rule of Law Media & Entertainment Industry Television

08. Sports Broadcasting

T

he ministry of information and broadcasting has recently come out with Guidelines for Downlinking and Uplinking of the television channels in India. The most important issue affecting foreign broadcasters operating in India is the issue of the mandatory sharing of the feed related to the telecast of sports events of national importance particularly cricket matches with the public broadcaster, Prasar Bharti, on its terrestrial and Direct-to-home (DTH) service. The conditions shall apply to all future events including those covered by existing contracts. However, in case of cricket events whose broadcasting rights have been obtained by sports channels prior to the proposed law coming into effect, Doordarshan will get a feed for all matches featuring India and the finals.

The Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharti) Act, 2007 Main objective of the Act is to provide access to the largest number

of listeners and viewers, on a free to air basis, of sporting events of national importance through mandatory sharing of sports broadcasting signals with Prasar Bharti. The Act specifically provides that, “No content rights owner or holder and no television or radio broadcasting service provider shall carry a live television broadcast on any cable or Direct-to-Home network or radio commentary broadcast in India of sporting events of national importance, unless it simultaneously shares the live broadcasting signal, without its advertisements, with the Prasar Bharati to enable them to re-transmit the same on its terrestrial networks and direct-to-home networks in such manner and on such terms and conditions as may be specified�. The Act further provides that the advertisement revenue sharing between the content rights owner or holder and the Prasar Bharati shall be in the ratio of not less than 75:25 in case of television coverage and 50:50 in case of radio coverage. (Refer to annexure 2(iv) for sports associations)


115

Important Case Laws: ● The Secretary, Ministry Of Information and Broadcasting vs Cricket Association of Bengal & Anr (Airwaves Judgment) Court: Supreme Court of India Citation: 1995 SCC (2) 161 Coram: PB Sawant and S Mohan, JJ Date: February 9, 1995 Facts: The case involved the right of a cricket association, Board of Cricket Control in India (BCCI) and the Cricket Association of Bengal (CAB), to grant telecast rights for cricket matches to an agency of its choice. The questions before the court were whether the government or government agencies like Doordarshan (DD) had a monopoly of creating terrestrial signals and of telecasting them or refusing to telecast them; whether the government or government agencies like DD can claim to be the host broadcaster for all events whether produced or organised by it or by anybody else in the country and can insist upon the organiser or the agency for telecasting engaged by him, to take the signal only from the government or government agency and telecast it only with its permission or jointly with it. Ratio: The court held that no private individual or organisation, gov-

ernment or governmental organisation is entitled to monopolise or exercise any exclusive rights over the broadcasting or the electronic media. While disposing of the civil appeals the court held, “The airwaves or frequencies are a public property. Their use has to be controlled and regulated by a public authority in the interests of the public and to prevent the invasion of their rights. Since, the electronic media involves the use of the airwaves, this factor creates an in-built restriction on its use as in the case of any other public property.” The court held that it was unfair to deny people, who did not have access to pay channels, the right to enjoy televised sport. The court held, “Their (the viewers’) rights would very much be trampled if the cricket matches are not telecast through Doordarshan..” The court directed the Central government to take immediate steps to establish an independent autonomous public authority representative of all sections and interests in the society to control and regulate the use of the airwaves. It also directed the high court to apportion between the CAB and DD the revenue generated by the advertisements on TV during the telecasting of both the series of the cricket matches viz. the Hero Cup, and the international cricket matches played in India from October to December, 1994, after hearing the parties on the subject.

In ESPN STAR Sports vs Global Broadcast News Ltd. , the court held that both copyright and broadcasting organisations are provided to protect their rights against third parties. Sat- ellite broadcasting rights are treated as separate rights and the said rights are recognised throughout the world as independent rights.

● New Delhi Television Ltd. vs ICC Development (International) Ltd. & Another Court: Delhi High Court

Citation: (FAO) OS 460/2012 Coram: Pradeep Nandrajog and Manmohan Singh, JJ Date: October 11, 2012 Facts: The Appellant is the operator of a news television network con-

trolling TV channels such as NDTV 24x7, NDTV India and NDTV Profit, while the Respondent is the owner of the copyright i.e. broadcasting and reproduction rights, pertaining to cricket tournaments organised by the International Cricket Council (ICC). The appellant had, in the past, presented special programmes on ICC organsied cricket matches involving match discussion, review, criticism, analysis and commentary by renowned cricketers. It was alleged that the Appellants profited from these programs by earning advertising revenue from advertisements and display of brand names and trademarks in the backdrop. Also, the usage of such brand names in such programs may give rise to the impression that the company owning the brand name/trademark is in some manner associated with the original ICC event. The Respondent filed a suit seeking permanent injunction to restrain the Appellant from infringing the copyright and reproduction right in the broadcast of the ICC T20 World Cup 2012, cricket matches. The Appellant didn’t deny the Respondent’s proprietary rights, but extended the defence of fair dealing in the broadcast in reporting of current events. A single judge decided that the Appellant could use footage length of the maximum limit prescribed by the ICC Guidelines. The judge held that fresh footage would be delayed by at least 30 minutes and the Appellant should not air any advertisement immediately before, during or immediately after the said footage. If the footage is shown in the news bulletins, ticker advertisements would be allowed provided they were not booked to be shown specifically during the reporting of ICC T20 World Cup 2012. Also, any use of footage would have to carry courtesy bugs/courtesy lines providing due acknowledgement to the Respondents and the official ICC event logo. NDTV filed an appeal against the single judge’s order.

Ratio: The appeal court held that an event/affair which may be entertainment to the masses can still pose as a news event/affair to be reported. The test that the court followed was whether the activity involves coverage/reporting that is result oriented or whether it is primarily an analysis/review of a sporting event. In case it is not result oriented reporting, injunction must follow irrespective of whether the use of the footage is fair or unfair. Upholding the constitutional right to freedom of speech and expression, the court permitted footage to be used while reporting sports events in both hard news and sports news programs on the condition that the programs would be in the pre-existing news format with no premium advertising. For special sports news programs, news channels have to pick from one of the two options: Either air an advertisement specifically targeted during the programmes and don’t use the ICC footage; or


116

Role and Rule of Law Media & Entertainment Industry Television: Chapter 8: sports broadcasting

use the footage but don’t air any advertisements. While admitting that such effects and association would harm the economic interests of the original investors of the event, the court at the same time recognised that stale news is no news and thus news has to be reported while it remains current. After much deliberation about what consists news, the court agreed that the time span or gestation period for news broadcast will vary from event to event. In a cricket match, the span of the match as an event being news would span the entire duration of the match, while individual events within a match would be events which on the principle of ‘stale news is no news’ would need to be reported immediately. Viewer interest also demanded the same. The court did not comment on the directions issued by the single judge as they were related to the coverage of an event (ICC T20 World Cup 2012), which had already come to an end. The suit filed by ICC Development International Ltd was disposed of on March 25, 2014 in view of the settlement arrived at between the parties.

● Star India Pvt. Ltd v/s Akuate Internet Services Pvt. Ltd & OrsCourt: Supreme Court of India Citation: Special Leave to Appeal (Civil) No(s).29629/2013 Date: September 30, 2013 Coram: T.S. Thakur and Vikramajit Sen, JJ Facts: Star India Private Ltd was given an exclusive right to broad-

cast cricket matches organized by the Board of Control for Cricket in India. BCCI had assigned a ‘bouquet of rights’ exclusively to STAR. Two of such rights, were regarding ‘Mobile Rights’ and “Mobile Activation Rights’. Defendants, telecom service providers, provided the subscribers with score updates. The plaintiff sought an interim injunction against the defendants alleging that the latter violated those rights, which as per the agreement with BCCI, were exclusively assigned to the plaintiff. The defendants have disputed these claims of STAR inter alia that that there is no such right as claimed by the plaintiff. In the absence of a legal right, the same cannot be enforced and no relief as prayed by the plaintiff maybe granted making the suit liable to be dismissed under Order VII Rule 11 of the Code of Civil Procedure (CPC) for the lack of a cause of action. The Defendants argued that the Indian Copyright Act (“The Act”) only recognized the rights that are explicitly provided for under the Act and inferring and extending further protection to other rights was not permissible under Section 16 of the Act. Thus, STAR and BCCI did have the authority to claim broadcasting rights and copyright in the cinematograph film of the match or the sound recording of the commentary, but the score updates and match alerts were mere ‘facts’ over which no one could claim exclusive rights. They belonged to the public domain.

Ratio: The Single Judge Bench of the Delhi High Court vide order dated March 13, 2013 found merit in Star India’s case and passed the order, against the Defendants i.e. three mobile/digital companies: ► Interim injunction restraining the defendants from broadcasting match information in the form of minute-by-minute score updates without obtaining a license from the plaintiff. ► Defendants can report noteworthy information or news from cricket matches.

► There shall be no requirement for the license if the defendants broadcast the information after a time lag of 15 minutes.

The grounds on which the interim injunction was granted is summarized as under: ► Section 16 of the Copyright Act: The Court observed that there was no dispute regarding the fact that the Plaintiff had approached the court de hors the Copyright Act, 1957. Regarding the Defendant’s contention that common law rights are abrogated (precluded or preempted) under Section 16 of the Copyright Act, the Court observed that it is essential to keep in mind the legislative history of Section 16. Despite there being an array of rights which have been recognized under the Copyright Act, 1957, it is unmistakable, that the pre-emption under Section 16 of the Act, only applies to copyright or any similar right only with respect to “works” and cannot be extended to the other rights in any manner whatsoever. Section 16 does not apply to neighbouring rights i.e. broadcasting rights and performers rights as Section 39-A does not include within its scope Section 16. In the instant case, it is amply clear that score updates/match alerts do not constitute a “work” as defined under the Act, and therefore, cannot be said to fall within the purview of the pre-emption under Section 16. The Court held that in any event, the BCCI and the Plaintiff were not seeking a creation of copyright or a similar right from this Court, but had merely approached the Court to find a remedy in common law against the tort of “unjust commercial enrichment” and the declaration of a right to generate revenue by monetizing the information arising from an event, which was conceptualized, developed, created and organised by the sole efforts and expenditure of the BCCI; as its assignee. ► Unjust enrichment: The Court held that applying the test of unjust enrichment it was amply clear that the Defendants were enriching themselves at the cost of the Plaintiff. With respect to the Defendant’s arguments regarding lack of direct competition between the parties, the action of the Defendants directly competes with the Plaintiff. This is because both the Plaintiff and Defendant are seeking to generate revenue by way of providing contemporaneous score updates/match alerts. The Plaintiff in the instant case had successfully bid for the entire “bouquet of rights” which also included “mobile rights” and “mobile activation rights”. If the Plaintiff did not intend on generating revenue by exploiting these “mobile rights” and “mobile activation rights”, it could have resorted to bidding only for selective rights since they were also available on an “a la carte” basis. The Court observes that the Plaintiffs grievance was not infringement of its exclusive rights over the footage of the cricket match, but specifically regarding the right to raise revenue by disseminating match information contemporaneously via SMS/MVAS by exploiting the “mobile rights” and “mobile activation rights” exclusively assigned to it in the “Media Rights Agreement” dated, August 10, 2012 with BCCI. Therefore, the element of direct competition clearly existed specifically with respect to contemporaneous score updates/ match alerts. The Court also observed that it was an undisputed fact that the only source of income for the BCCI was from monetizing the cricketing events organised by it. In such a circumstance, the Defendants would have had a legitimate right to disseminate contemporaneous match information, had they obtained a license by either participating in the bid conducted by the BCCI or by obtaining a sub-license from the Plaintiff. Therefore, the action of the Defendants cashing upon the efforts of the Plaintiff/BCCI constitutes free-riding. ► Public domain: The Court held that the suit was de hors the Copyright Act and since the Plaintiffs were not seeking a copyright of the score updates/match alerts, there was no question of the information entering the public domain as envisaged under the Act. However, the term “public domain” may be used to connote the information becoming freely available to the public. The Court held that it could be said that the information emanating from a cricket match, enters the public domain at different moments of time i.e. is becomes freely available to the public


117

at different moments of time. To elucidate through an example, the outcome of the first ball bowled in a cricket match, enters the public domain instantly qua the spectators in the stadium. The same information enters the public domain after a delay of a few seconds (or micro-seconds) subject to the time-lag in transmission of such information over a live telecast through television/radio. As a corollary, the information has still not entered the public domain qua the persons who do not have any access to a source of contemporaneous information i.e. TV or radio. The Court further observed that there is a great demand for knowing ball-by-ball progress of a match as opposed to the match-summary at the end of the match. This is evidenced by the fact that customers of such SMS/MVAS are willing to pay between two to three rupees per alert/update. The Court thus did not find any merit in the argument that the match information has entered public domain i.e. available to the public, the very instance it is broadcasted by the Plaintiff. Thus, match information has not entered “public domain” i.e. is not readily available to the class of persons who do not have access to TV/radio, who also happen to be the target consumers of the both the parties. ► Balance of convenience: The Court held that it was found that by free-riding upon the efforts of the Plaintiff, the Defendants were eating into the revenue which the Plaintiff would have made, thereby causing the Plaintiff irreparable injury. With respect to the balance of convenience, it lies with the Plaintiff only to a certain extent. On one hand, while recognizing the right of the Plaintiff to monetize and earn revenue from the information arising from a cricket match, it must be borne in mind that such recognition should not amount to a conferral of blanket rights upon the Plaintiff, to the prejudice of the other stakeholders observed earlier. On the other hand, the Defendants while having their fundamental right of trade and free speech, including the dissemination of match information to the public, cannot be permitted to have a free ride or reap what they have not sown. Concurrently, both the contesting parties venturing into commercial activities cannot deprive the public of its valuable right to have the information of news and events. Meanwhile, the public also cannot, as a matter of right, claim the access to contemporaneous score updates/match alerts, equal to those who are enjoying rights at a premium, by buying the tickets at the stadium or watching it live on TV. While recognizing the right of the general public to have score up-

dates/match alerts at their convenience on mobile phones via SMS/ MAS, and in view of the conflicting rights of the contesting parties, it would be just and reasonable for the Defendants to either obtain a license and gain equal rights to their subscribers, or make them wait for some time, in order to not prejudice the right of the Plaintiff to earn revenue from the match information.

Appeal: The Defendants filed an appeal in the division bench of the same court . The Divisional Bench of the High Court set aside the Single Judge’s order and rejected Star India’s claims: ► It held that Star’s rights were precluded by the way of section 16 of the Indian Copyright Act as there are no provisions for the protection of real time sensitive information and that the live scores were in the public domain already. ► It further held that there was no unfair competition or unjust enrichment on these facts.

SLP: Star India Private Limited therefore filed a special leave petition

with the Supreme Court pursuant to this order. The Division Bench order was overturned and an order was passed to maintain status quo as on March 13 2013 when the first order was made in favour of Star India. The Supreme Court: ► Passed an interim order recognising the broadcaster’s right to exploit mobile and digital rights assigned to it by BCCI and ► Directed that the Defendants deposit Rs. 10 lakh per cricket match before broadcasting live scores. ► Directed the Defendants disseminating live alerts to maintain receipts of their SMS alerts, which had to be made available to the Court on a monthly basis. The decision of the Supreme Court will have various consequences, the most important being with respect to whether real time information forms a new category of “works” protected by copyright or is to be interpreted as one.

In the case of Star India Private Limited v/s Akuate Internet Services Private Limited (2013), the Supreme Court upheld the interim order passed by the single judge of the Delhi High Court recognizing the right of the plaintiff over live feed of cricket matches and restraining the defendants from providing minute by minute updates of matches on mobile and digital platforms without license from the plaintiffs.


118

Role and Rule of Law Media & Entertainment Industry Television

09. digitisation

T

he International Telecommunication Union (ITU) has set 2017 as the global deadline for most countries to achieve analogue switch-off, which essentially implies that broadcasting signals will be distributed only in the digital medium. The Indian Ministry of Information and Broadcasting has stated that the phase deadlines are irrevocable, and is also positive that there will be no impediment in meeting the same. Further, the law provides for punishment for those who did not comply with the deadline, but the government is confident that such a situation would not arise since the whole exercise is in the interest of all the stakeholders. Digitisation is a process which converts the information from analogue to digital format. In this format, information is organised into discrete units of data (called bits) that can be separately addressed (usually in multiple-bit groups called bytes). Television signals can be received via aerial for terrestrial reception, via satellite as in case of direct-to-home (DTH), via broadband connection as in the case of Internet Protocol TV (IPTV) or via cable from the local cable operator. The reception of television signals through satellite and broadband connection are already operating in digital mode and the government has taken a decision to switch over to digital mode for reception of TV signals both in terrestrial mode as well as through cable from local cable operators. The digital cable TV service will be available through a set top box. With this technology the viewers will get superior picture and sound quality, large bouquet of channels, choice of channels, games, and movies on demand.

In India, digitisation is expected to be executed in four phases: ► First phase: the four metros of Delhi, Mumbai, Kolkata and Chennai were expected to be digitised by October 31, 2012.

► Second phase: was to include the digitisation of 35 cities with population of more than one million, such as Patna, Chandigarh, Pune and Bangalore by March 31, 2013. ► Third phase: all urban areas were expected to be digitised by November 30, 2014. However the Ministry of Information and Broadcasting has extended the deadline for Phase III to December 2015. ► Fourth phase: the remaining areas were to be digitized by March 31, 2015. However the MIB has extended the deadline of Phase IV to December, 2016.

Advantages of digitisation: As an underlying technology, digitisation is a growth driver. Digital transmission offers a number of advantages over analogue broadcasting:

► Better reception quality ► High definition picture quality ► Data casting/ multicasting ► More channel programming ► Increased channel carrying capacity ► New features such as programme guides ► Multi-view and interactive services as well as potential to provide triple play: voice, video and data. ► Effectively address the issue of piracy ► Allows for convergence or integrated use of consumer devices for purposes such as telephony, television or personal computing

Need of Licensing Digital Services – As per TRAI Recommendations. A licensing mechanism exists in most countries. However, in India there is in force only a simple process of registration. Section 4 of The Cable Television Networks (Regulation) Act 1995 read with Rule 3-5 of The Cable Television Networks Rules provides for an application to be made in the prescribed form along with a fee of Rs 500. A licensing regime in whatever form, once introduced, would facilitate prescription of a standard set of rights and obligations to which any licensee would be subject to. The power to licence cable networks is available with the government under Section 4 of the Indian Telegraph Act, 1885, therefore the license for digital service should also be issued under the Cable Act. The licence period for digital service provider should be 15 years which may be extended for a period of five years.

Conditional Access System The Cable Television Networks (Regulation) Amendment Act, 2002, introduced what is popularly known as Conditional Access system (CAS). The amendment introduced Section 4A in the Act providing for ‘Transmission of programmes through addressable system’. CAS is a digital mode of transmitting TV channels through a set-top box (STB). The transmission signals are encrypted and viewers need to buy a settop box to receive and decrypt the signal. The STB is required to watch only pay channels

Disputes pertaining to Digitization: The TRAI Regulations on digitization have been widely challenged all over the country. In the first phase for the four metros, Chennai could not be covered because of a stay by the Madras High Court. The second phase covered 38 cities with populations of more than one million. It is however reported that analogue systems are still working not only in the metros but also in these cities.


119

The TDSAT has been flooded with litigation involving broadcasters, MSOs, LCOs and DTH operators over the past year and a half - coinciding with the government’s thrusting digitisation down the throats of those involved in India’s relatively unorganised cable TV ecosystem.

(v) Entertainment tax in general ought to be levied on the service rendered and not on the basis of the number of set top boxes sold, it is fair and just to levy the duty on the payment received from the customer. Also there is no uniformity in the entertainment duty.

The initial rounds of challenges were around the sunset date in few cities. However the larger set of challenge is by the local cable operators (LCO)challenging the TRAI Regulations as being favorable to the Multi System Operators (MSO) and the role of the LCO’s being transformed to being merely commissioning agents for the MSO’s.

(vi) In case of disputes arising between the LCOs and the MSOs, the same has to be addressed at the TDSAT located in Delhi as there is an express bar on jurisdiction of civil courts, which makes it tedious and expensive for the LCO’s to fight the battle with the MSO’s.

The Standards of Quality of Service (Digital Addressable Systems) Regulations, 2012 have primarily been challenged on the following grounds:

The grievance of the LCO’s is that LCO’s have been in the cable industry since its inception and the entire subscriber base has been developed by the LCO’s over the years of hard work and they are responsible to provide the last mile connectivity. The role of cable operators is not limited to merely re-transmitting signals, but extends to providing continuous after installation and other services. According to the LCO’s, the implementation of the Digital Addressable system in India has created an inequitable and unjustifiable situation for many subscribers and LCO’s and a never ending dispute between the LCO’s and the MSO’s as the control over the new system of DAS is gradually and systematically being given to the MSO’s. The Regulations are framed with the intention to eliminate the LCO’s from the industry. According to the LCO’s while there are around 60,000 LCO’s and only 6000 MSO’s, there was no consultation with majority of LCO’s before implementing DAS.

(i) Billing of subscribers- The Regulation requires that every multi system operator shall offer cable TV services on both pre-paid and post-paid payment options to the subscriber and shall be responsible for generation of bills for the subscribers. These Regulations empower the MSO’s not just to generate the Bills on the customers, but to interact directly with the customers who are the clientele of the LCO’s. The LCO’s were supposed to be the link between the customers and the MSO for revenue collection as also for customer services issues. The LCO’s are contending that the LCO’s have an indispensible role in the cable and broadcasting industry which has now been affected. The LCO’s are the ones who have been raising bills and collecting monthly subscription since the last 20 years or more. (ii) Setting up and operationalization of subscriber management system- The Regulations provide that every multi system operator shall before providing cable services through digital addressable system, establish, set up and opertionalize its subscriber management system and such system shall comply with the digital addressable cable TV system requirements as mentioned in the Telecommunication Interconnection Regulations, 2012 for ensuring efficient and error free service to the subscriber by recording and proving individualized preferences for channel, billing cycles or refunds. According to the LCO’s this takes away the clientele developed by the LCO’s and simply throws it in the hands of the MSO’ and empowers the MSO to not just generate the bill but to eliminate the LCO effectively for all practical purposes. In addition to empowering the MSO to generate bills with the subscriber it has also been mandated that the LCO collect a particular form viz. the Customer Application Form (CAF) and submit the same to the MSOs. The CAF not only discloses the details of the subscribers but also registers the customer as a subscriber of the MSOs which would result in opening doors for the MSOs to connect directly with the customers leaving the LCO’s with no business and depriving them of their livelihood. (iii) Interconnection Agreement-The Regulation mandates the execution of interconnection agreements by and between the MSO’s and LCO’s. TRAI as a regulatory body should prescribe a standard agreement for execution, which will be mutually beneficial, is well balanced agreement and approved by all the stakeholders including broadcasters, MSO’s and LCO’s. (iv) BIS compliant Set Top boxes- As per the Regulation it is mandatory that the set top boxes to be BIS complaint and having BEE ratings, which represents the standard of quality of set top box. But the STB provided by the MSO’s are currently made in China and do not bear the BIS/ BEE mark.

In Maharashtra, the Maharashtra Cable Operators Foundation have challenged the Standards of Quality of Service (Digital Addressable Systems) Regulations, 2012 vide Writ Petition (L) No. 1122 of 2014 on the aforementioned ground. The matter is pending in the Bombay High Court. In Madhya Pradesh, a similar petition has been filed by the Malwa Cable Operator Sangh challenging The Telecommunication (Broadcasting and Cable) Services (Fourth) Addressable Systems) Tariff (First Amendment) Order, 2012 and the Standards of Quality of Service (Digital Addressable Systems) Regulations, 2012 on similar grounds. In the said petition, the cable operators have primarily challenged the arbitrary rate hike and disconnection of their cable-TV-signal feeds and the arbitrary clause on revenue share between LCO’s and MSO’s wherein clause 5 of the Tariff Order of 2012 provides “Provided that in case the multi-system operator and the local cable operator fail to arrive at mutual agreement, the charges collected from the subscribers shall be shared in the following manner:(a) the charges collected from the subscription of channels of basic service tier, free to air channel and bouquet of free to air channels shall be shared in the ratio of 65:35 between multi-system operator and local cable operator respectively and; (b) the charges collected from the subscription of channels or bouquet of channels or channels and bouquet of channels other than those specified under clause (a) shall be shared in the ratio of 65:35 between multi-system operator and local cable operator respectively. As on date, the LCO’s have obtained a stay order against MSO’s i.e. not to stop the cable signal feed until the next order is passed by the Indore Bench of the Madhya Pradesh High Court. The matter is pending before the Indore Bench of the High Court of Madhya Pradesh. Similar petitions have also been filed in Ahmadabad and Chennai.


Sectorthree

122 CHAPTER I: INTRODUCTION 124 CHAPTER II: RADIO LICENSING 125 CHAPTER III: REGULATORY FRAMEWORK A.

Self Regulatory Guidelines of ibf

B.

Electronic Media Monitoring Center

C.

Association of Radio Operators for india (aroi)

D.

Mib advisories to radio channels

127 CHAPTER IV: IMPACT OF COPYRIGHT (AMENDMENT) ACT, 2012

128 CHAPTER V: DIPSUTES RELATING TO RADIO 130 CHAPTER VI: THE ROAD AHEAD – DIGITISATION OF RADIO

205 annexure 3


radio

Highlights • Phase – III of FM Licensing, notified on July 7, 2011, will result in the setting up of 839 new FM channels across 294 cities. Private radio channels will be allowed to broadcast news provided by All India Radio.

available to everyone without any discrimination and on reasonable royalties fixed by the Copyright Board. Earlier the only option available to a radio broadcaster was to obtain a voluntary license or in case of a refusal, to obtain a compulsory license.

• In Entertainment Network (India) Ltd. Vs Super Cassettes Industries Ltd. And Phonographic Performance Limited vs Millennium Chennai Broadcast (P) Ltd. Etc (2008), the Supreme Court held that the Copyright Board could grant a compulsory license interpreting “unreasonable conditions” imposed by owner of copyright of grant of license to be an attempt to withhold the work from the Public.

• Royalties: The Copyright (Amendment) Act, 2012, casts an obligation on the broadcasters/radio stations (assignees) to pay royalties for the exploitation of works on the radio platform.

• In Music Broadcast Private Limited vs Indian Performing Rights Society Limited (2011), the court held that Indian Performing Rights Society is not entitled to claim and/or demand royalty fee and/or license fees from the radio stations for the broadcast of sound recording comprising of musical and/or literary work. • Statutory Licensing: The Copyright (Amendment) Act, 2012, provides for issuance of statutory license to ensure that content becomes

• The MIB vide its notification dated July 1, 2014 has approved the extension of deadline for signing of migration Grant of Permission Agreement (GOPA) upto March 31, 2015. Therefore all FM Phase II operators will be allowed to execute the Migration GOPA not later than March 31, 2015. • MIB has issued advisories dated October 15, 2012 and January 28, 2013 with respect to certain objectionable and vulgar content being broadcast on several FM Radio Stations and thereby cautioning the radio stations to be in compliance with the terms and conditions of the GOPA.


122

Role and Rule of Law Media & Entertainment Industry RADIO

01. Introduction

R

adio, one of the oldest, fastest and most economical means of accessing entertainment and news, has undergone tremendous transformation over the years in India. The sector has grown from a single Government-owned channel, the All India Radio, to more than 200 private FM radio channels with a subscriber base of 22.86 million today. In view of the support from the Government, radio is finally set for dynamic changes leading to the third phase of expansion of FM Radio service which will allow private radio channels to extend its reach to 839 new stations across 294 cities. The limit for Foreign Direct Investment in the sector has also been raised from 20% to 26%. The Radio story in India goes beyond just the private players to include community radio stations. An organisation wanting to operate a community radio station must satisfy as a non-profit organisation having content what would cater to solely the educational, developmental, social and cultural needs of that particular community. In India, presently there are 31 listed operational community radio stations.

The radio industry can be divided into three categories as follows: 1. Public Radio Broadcasting Services which includes the AIR, Prasar Bharati 2. Private Radio Broadcasting Services which includes Radio City, Radio Mirchi and so on. 3. Community Radio Stations

Phases of FM Licensing in India The First Phase of FM Licensing: The First Phase policy was approved by the Government in July 1999, and subsequently in 2000, with 108 frequencies in the FM spectrum being auctioned across 40 cities in the country. These licences were awarded for a period of 10 years. The cities were divided into five categories on the basis of the amount of reserve licence fees. The first phase of the FM Licensing in India was not very encouraging as only an approximate of 25% of the expected licenses could become operational and further, the private FM radio industry reported heavy losses. In January 2004, the Government notified broadcasting to be a telecommunication service under Section 2 (i)(k) of Telecom Regulatory Authority of India (TRAI) Act, 1997.

The Second Phase of FM Licensing: The Second Phase was notified in July 2005, after considering the recommendations of the Dr. Amit Mitra Committee and TRAI. The Radio Broadcast Policy Committee was set up under the chairmanship of Dr. Amit Mitra (Mitra Committee) after the failure of Phase I. The committee’s recommendations included the migration of Phase I licences to Phase II. The objective of the second phase was to attract private agencies to supplement and complement the efforts of the All India Radio (AIR) by operationalising radio stations that provide programmes with local content and relevance, improve the quality of reception and generation, encouraging participation by local talent and generating employment. In the second phase, the Government had set up a two round process for granting permissions for all the new participants. The first round involved the short listing of the applicants by the Ministry of Information and Broadcasting on the basis of the prescribed eligibility criteria which provided that only companies registered under the Companies Act, 1956 (now Companies Act 2013), prescribed the financial and managerial competence of the participants,


123

etc. The second round involved the making of financial bids for specific channels in different cities by the shortlisted applicants. Participants of Phase I were allowed to participate in Phase II subject to their fulfilling the prescribed eligibility criteria. This phase was well received by all stake holders. It resulted in huge growth in the FM radio industry as it opened up new areas for creative employment and also met the demand for FM Radio in the cities not covered by Phase-I. However, many cities still remained uncovered by the private FM radio broadcasting.

The Third Phase of FM Licensing: The Third Phase was notified on July 7, 2011. The notification contained the expansion plan of the radio broadcasting services through private agencies. Some of the reasons why there was further expansion of the private sector were inter alia that many cities still remained uncovered by the private radio broadcasting in Phase II; promotion of the private radio sector in the border areas was less; there were 97 vacant channels from Phase-II which could not be auctioned due to various reasons; there was still scope for further utilisation of the frequency spectrum and the capacity to generate additional revenue for the Government, etc. The Phase III policy is set to extend its services to an approximate of 227 new cities (in addition to 86 present cities) with a total of 839 new FM radio channels across 294 cities, Phase-III policy will result in coverage of all cities with a population of one lakh and above with private FM radio channels. Few salient features of the approved policy for Phase III are listed hereunder: ► Permission for broadcasting news: the permission is given to the radio operators for carriage of news bulletins of All India Radio but only in an unaltered form. Prior to this, private radio channels were not allowed to broadcast news. ► Other information “non news and current affairs” broadcasting: broadcast of information pertaining to sporting events, traffic and weather; coverage of cultural events; festivals; examinations; results; admissions, career counseling, etc. as provided by the local administration will be treated as non-news and current affairs broadcast and will therefore be permissible. ► Multiple channels: The private owners could own more than one channel but not more than 40% of the total channels in a city subject to a minimum of three different operators in the city. ► License fee: In the third phase the license fee would be determined as 4% of Gross Revenue (GR) generated or 2.5% of bid price for a city, whichever is higher. ► Networking of channels will be permissible within a private FM broadcaster’s own network across the country. ► Broadcast pertaining to the certain categories like information pertaining to traffic and weather, availability of employment opportunities, coverage of topics pertaining to examinations, coverage of cultural events, sporting events, festivals, results, career counselling, admissions, public announcements pertaining to civic amenities like water supply, natural calamities, electricity, health alerts etc. as provided by the local administration will be treated as non-news and current affairs broadcast and will therefore be permissible. ► The limit on the ownership of Channels, at the national level, allocated to an entity has been retained at 15%. However channels allotted in Jammu & Kashmir, North Eastern States and island territories will be allowed over and above the 15% national limit to incentivise the bidding for channels in such areas; Special incentives for North East (NE) Region and Jammu & Kashmir (J&K) and Island territories:

a) Private FM Radio broadcasters in Jammu & Kashmir (J&K) and Island territories and North East (NE) Region will have to pay half the rate of annual license fee for 3 years initially from the date from which the annual license fee becomes payable and the permission period of fifteen (15) years begins. b) To the existing operators in these States to enable them to effectively compete with the new operators, for a period of three years the revised fee structure has also been made applicable, from the date of issuance of guidelines. c)

Apart from the fee relaxation, it is further proposed that Prasar Bharati infrastructure would be made available at half the lease rentals for similar category cities in such areas.

d) The limit on the ownership of Channels, at the national level, allocated to an entity has been retained at 15%. However channels allotted in Jammu & Kashmir, North Eastern States and island territories will be allowed over and above the 15% national limit to incentivise the bidding for channels in such areas;

Extension for Phase-II licenses: From April 2015 Phase-II licenses will start expiring, as their 10-year period ends. After payment of a migration fee and signing of the migration Grant of Permission Agreement (GOPA) Phase-III would permit to migrate all existing FM Radio channels, operational under Phase-II regime. Telecom Regulatory Authority of India (TRAI) received a reference in April, 2013 from MIB seeking TRAI’s recommendations for it. The Authority recommended in February 2014 the following: ► Acceptance and early implementation of its “Recommendations on Prescribing Minimum Channel Spacing, within a License Service Area, in FM Radio Sector in India” ► The existing operators, who migrate from Phase-II to Phase-III, the period of permission should be fifteen (15) years from the date of migration. ► That a cut-off date, for migration from Phase-II to Phase-III of FM Radio 11 broadcasting for the existing FM radio operators, should be fixed by MIB after the completion of auction process for Phase-III of FM Radio and that cut-off date for migration should not be later than March 31, 2015. ► To increase the number of FM channels in each city for auction the minimum channel spacing of 400 Khz should be implemented. ► The Authority also recommended that the methodology for determining the reserve price for fresh cities in Phase-III should be reconsidered as the current methodology might jeopardise the auction. The MIB vide its notification dated July 1, 2014 has approved the extension of deadline for signing of migration GOPA upto March 31, 2015. Therefore all FM Phase II operators will be allowed to execute the Migration GOPA not later than March 31, 2015. Vide notification dated July 23, 2014, the MIB notified that based on the selection criteria in clause 1.9 of the Request for Proposal (RFP), the following bidders are found to be technically qualified: (i) e-procurement Technologies Limited (ii) mjunction Services Limited (iii) C-1 India Private Limited. These agencies shall conduct the e-auction of FM Radio licences (Phase-III) in 294 cities(839 channels).


Role and Rule of Law Media & Entertainment Industry Radio

124

02. RADIO LICENSING Licence/Permission to set up a FM radio station

its holding company or subsidiary or a company with the same management or an interconnected undertaking

The Ministry of Information and Broadcasting (MIB) has prescribed the following consolidated policy guidelines on expansion of FM Radio Broadcasting Services through private agencies for FM Phase III.

9. Companies who are defaulters of conditions under Phase-I & Phase-II, who have contested the revocation of their Letters of Intent/Licence Agreements/ Bank Guarantees, thereby continue to be debarred from participating in any future bidding process.

The e-auction process for granting permission for channels in each batch under Phase III shall consist of four stages.

Stage-I: shall be invitation stage wherein prospective bidders submit

The Guidelines have also prescribed criteria for assessing the financial eligibility of the applicant who wishes to apply for grant of license for setting up a FM radio station, the managerial competence of the of the applicants, etc.

Stage II (Pre-qualification stage): shall involve screening of ap-

Existing permission holders will also have to satisfy the prescribed eligibility criteria to become eligible for participating in the auction.

their applications.

plications, publication of ownership details and pre-qualification test.

Stage III (Auction stage): only applicants qualifying in accordance with prescribed eligibility criteria will be invited to the auction stage for bidding for specific channels in different cities.

Stage-IV: will be grant stage wherein payment of winning bid amount and issuance of Letter of Intent (LOI) subject to fulfillment of relevant conditions.

ELIGIBILITY CRITERIA: The eligibility criteria for the first stage of obtaining permission for setting up FM radio channels states that only those companies which are registered under the Companies Act, 1956 (now Companies Act, 2013), are eligible. Certain disqualifications with respect to the types of companies which are not entitled to apply for such permission are: 1.

Companies not incorporated in India

2. Company controlled by a person convicted of an offence involving moral turpitude or money laundering/drug trafficking, terrorist activities or declared as insolvent or applied for being declared insolvent. 3. Company, which is an associate of or controlled by a trust, society or non-profit organisation 4. Company controlled by or associated with a religious body 5. Company controlled by or associated with a political body 6. Company which is functioning as an advertising agency or is an associate of an advertising agency or is controlled by an advertising agency or person associated with an advertising agency 7.

A subsidiary company of any applicant in the same city, holding company of any applicant in the same city, companies with the same management as that of an applicant in the same city; company with more than one Inter-Connected Undertaking in the same city

8. Company debarred from taking part in the bidding process or

PROCEDURE: Auction: The auction for Phase III will be conducted by an independent expert agency to be appointed by the government. The MIB would separately issue a detailed Information Memorandum, in due course, enabling the prospective bidders to participate, and also indicating the cities to be taken up in each batch and their respective reserve prices. The MIB will also issue a Notice Inviting Applications (NIA) for participation in the auction. The permission for setting up a channel shall be granted on the basis of a Non-Refundable One-Time Entry Fees (NOTEF) i.e. a successful bid amount arrived at through an ascending e-auction process as per the details to be notified separately. Prospective bidders for a channel shall be required to deposit Earnest Money, along with the application for pre-qualification, in the form of a bank guarantee which shall be 25% of the reserve price of that city per channel. The applicants are further required to pay a non-refundable application processing fee of Rs. 25,000 in favour of the MIB.

Period of Validity: Each permission shall be valid only for a period of 15 years from the date of operationalisation of the channel or the expiry of the specified time limit for operationalisation. The guidelines do not provide for any extension provision. The Guidelines further provide the payment methodology for the successful bidders and in the event any successful bidder fails to deposit the bid amount for any channel within the prescribed period such bidder shall be disqualified from subsequent biddings for a period of five years and the earnest money deposited shall be forfeited. The Applicant/Letter of Intent holder and the MIB will sign the Grant of Permission Agreement in the prescribed format. Annual Fee for Permission Holders: The permission holder shall be liable to pay an annual fee to the government every year charged @ 4% of gross revenue of its FM radio channel for the financial year or @ 2.5% of NOTEF for the concerned city, whichever is higher.

(Details available on the MIB website1) 1. http://www.mib.gov.in/ShowContent.aspx?uid1=2&uid2=2&uid3=0&uid4=0&uid5=0&u id6=0&uid7=0


Role and Rule of Law Media & Entertainment Industry Radio

125

03. Ragulatory Framework

A.

C.

Self Regulatory Guidelines of Indian Broadcasting Foundation (IBF):

Association of Radio Operators for India (AROI):

The Self Regulatory Guidelines of the IBF are applicable to radio broadcasting as the definition of “programme” is inclusive of programmes broadcast on radio. Further the broadcasting service providers are under an obligation to ensure that the all the programmes (inclusive of radio broadcasting) are categorised and self certified. The broadcasting service providers further have to obtain prior certification from CBFC or any other authority authorised by the Central government for all films, including but not limited to foreign films, music videos, albums, trailers, promos, songs, etc., and is under an obligation to broadcast them on radio only after the certification and categorisation as detailed in the IBF guidelines.

This is the official association of the private commercial radio stations in India. It defines and reflects the common policies and goals of the private radio industry in India. The AROI, while acting as a platform for inter- industry dialogues and common initiatives, interacts with the government on policy and procedure initiatives, with the advertising industry for revenue enhancements and outstanding control, with listenership measurement agencies for evolving acceptable listenership survey models, with foreign media and investor bodies for mutually beneficial collaborations, with suppliers for enhancing cost effective hardware/software solutions, etc.

(The applicable guidelines have already been covered under the television sector earlier in the book page 93.)

B.

Electronic Media Monitoring Centre (EMMC) Earlier the task of monitoring radio and TV networks, in relation to violations relating to Advertisement and Program Codes enshrined in Cable Television Networks Regulations Act, 1995, and Rules, was entrusted with the Central Monitoring Service (CMS). Thereafter, the Ministry of Information and Broadcasting set up the Electronic Media Monitoring Centre for monitoring the content including advertising broadcast on radio. EMMC monitors private FM channels to keep a watch on violation of any law in India and further provides the public with a mechanism through which they can voice their grievances and obtain redressal regarding the programme and advertisement content. The content regulation codes seek to place greater responsibility on broadcasters and advertisers to cater to public sensitivity prior to the broadcast. The EMMC regulates broadcast on private FM radio channels in relation to the treatment of subjects such as dignity of women and children, individual’s right to privacy, crime and violence, sex, obscenity, horror and occult, drugs, smoking, tobacco, alcohol, religion and so on.

► Objective: AROI acts as a central organisation of the radio broadcasters in India with an aim to promote and safeguard the business of its members incidental to the running of their radio stations, and to take suitable steps in respect of such business as are affected by the action of legislatures, governments, government corporations, boards, authorities, law courts, municipal and local bodies, associations, companies and organisations, commercial or otherwise, to anticipate and take action on issue of taxation, common charges and levies by authorities dealing with broadcasting authorities like Prasar Bharati, etc. ► The AROI holds periodical meetings on all matters affecting the common business interests of its members. It collects subscriptions and other contributions from its members for the recurrent expenses of the society.

MIB Advisory to Radio ChannelsOctober 15, 2012 The MIB issued an advisory to all radio channels pertaining to the vulgar and objectionable content being broadcast on several FM Radio Channels by many Radio Jockeys. The Advisory stated that the Radio Jockey’s often make defamatory and derogatory comments, particularly in night hours which do not appear in good taste. It referred to clause 7.6 of the Grant of Permission Agreement (GOPA) whereby permission is granted to run a FM Radio Channel which provides that the permission holder shall ensure that no content, messages, adver-


126

Role and Rule of Law Media & Entertainment Industry Radio: Chapter 3: Ragulatory Framework

The AROI acts as a platform for inter- industry dialogue and common initiatives, interacts with the government on policy and procedure initiatives, with the advertising industry for revenue enhancements and with listenership measurement agencies for evolving acceptable listenership survey models

tisement or communication, transmitted in its Broadcast Channel is objectionable, obscene, unauthorized or inconsistent with the laws of India.

(xii) Trade names in broadcast which amount to advertising directly (Except in commercial service)

Clause 11.2 of GOPA provides that the permission holder shall follow the same programme and advertisement code as followed by All India Radio, which prohibits the following:

The Advisory further notes that airing such type of contents is in gross violation of clauses 7.6 and 11.2 of GOPA signed by the FM Radio Channels for running their channels. As per Clause 25.3.1 of the GOPA signed by the FM Radio Channels, in the event of the permission holder violating any of the terms and conditions of permission or any other provisions of the FM Radio policy, the Grantor shall have the right to impose the sanctions for suspension of the permission and prohibition of broadcast as prescribed therein.

(i) Criticism of friendly countries (ii) Attack on religion of communities (iii) Anything obscene or defamatory (iv) Incitement to violence or anything against maintenance of law and order ot showing disrespect to the Constitution. (v) Anything amounting to contempt of court (vi) Aspersions against the integrity of the President, Governors and Judiciary (vii) Attack on a political party by name (viii) Hostile criticism of any state of the centre (ix) Hostile criticism of any state or the centre (x) Appeal for funds except for the Prime Minister’s national Relief Fund/ the National Defense Funds or in case of natural calamity such as floods, earthquake or cyclone (xi) Direct publicity for or on behalf of an individual or organization which is likely to benefit only that individual or organization

The MIB therefore in exercise of its powers flowing from the GOPA advised all FM Radio Channels to strictly adhere to the terms and conditions prescribed therein and not to air any content in violation thereof. It further advised that the Channel must exercise discretion and restraint in broadcast of such contents. Strict compliance to the above direction is required to be ensured by all FM Radio channels failing which any violation shall entail such penal action as deemed fit in accordance with the terms laid in GOPA. The MIB issued another advisory on January 28, 2013 stating that despite the October 15, 2012 advisory, objectionable content was being continued to be broadcast on some private FM Radio Channels. The Advisory further states that it has come to the notice of MIB that some FM operators are making unsolicited calls to members of public and disturbing their privacy by way of aggressive comments and conversation which is broadcast without the prior knowledge and consent of these individuals. Such acts of making prank calls which violate the privacy of individuals cannot be permitted since these violate the programme code and advertisement code prescribed by GOPA. All private FM channels have been called upon to adhere to the provisions of GOPA.


Role and Rule of Law Media & Entertainment Industry Radio

127

04. Impact of Copyright Amendment Act, 2012 on the Radio Sector Statutory Licensing: The Copyright Amendment Act, 2012 provides for the availability of content on radio through the mechanism of statutory licensing on the payment of royalty to be determined by the Copyright Board. This is to ensure that the content becomes available to everyone without any discrimination and on reasonable royalties fixed by the Copyright Board. This would also ensure that the owners of copyright works get reasonable royalties. Thus, a radio channel can now approach the Copyright Board to get a statutory license to broadcast a musical, literary work or sound recording. Earlier, the channel had to approach the owner of copyright (producer or copyright society), who could lay down unreasonable terms for grant of license. Section 31-D introduced by the Copyright Amendment Act, 2012, provides for Statutory License for broadcasting of literary and musical works and sound recording. The procedure of obtaining a statutory license is as stated under Rule 42 of the Copyright Rules.

Compulsory Licensing: There were divergent views by the courts in interpreting the existing compulsory licensing provisions under Section 31. Disputes were pending before various high courts as well as the Copyright Board regarding the nature of license and the rate of royalties to be paid when works particularly songs were used for broadcasting. Now, channels have an alternate remedy in obtaining a statutory license from the Copyright Board.

Royalties: The Copyright (Amendment) Act, 2012 casts an obligation on the broadcasters/ radio stations (Assignees) to pay royalties for the exploitation of ‘works’ on the radio platform. ► With the amendment to Sections 18 and 19 of the Copyright Amendment Act, 2012, authors of underlying works included in a cinematograph film and sound recording not forming part of cinematograph film are entitled to receive royalty to be shared on an equal basis with the assignee of copyright for the utilisation of such work (except theatrical rights in case of cinematograph films). With respect to authors of literary and musical works this right to receive royalty is non assignable. In addition to the above, performers are entitled to a right to receive royalty in case of making of the performances for commercial use. ► Therefore the broadcaster would have to pay royalties to the copyright society of which the authors and owners of underlying works are members as per the tariff scheme of the copyright society. The copyright society would thereby distribute the royalties among the authors and owners of the underlying works as per the distribution scheme of the copyright society. Similarly, the broadcaster would have to pay royalties to the performers’ society with respect to utilisation to broadcasting of performances for commercial use.

Licence from Phonographic Performance Ltd. (PPL) and Indian Performing Rights Society (IPRS): ► PPL is a copyright society, which deals exclusively with sound recordings or phonograms and administers the commercial exploitation, including the broadcasting and communication to the public, of phonograms or sound recordings on behalf of its members. IPRS administers the rights of lyricists and composers and issues licenses to perform publicly such works controlled by IPRS and its affiliated collecting societies. ► In view of the amendments to Section 18 and 19 of the Copyright Amendment Act, 2012 the authors of underlying works will be entitled to receive royalties in relation to broadcast of sound recording from a radio station. Therefore, in relation to such broadcast, the radio station would have to obtain appropriate license from PPL and from IPRS or any other society administering royalties for and on behalf of authors of underlying works. ► The newly inserted Section 33 (3A) of the Copyright Amendment Act, 2012 requires that every copyright society already registered before the coming into force of the Copyright (Amendment) Act, 2012 shall get itself registered within a period of one year from the date of commencement of the Copyright (Amendment) Act, 2012. ► While PPL and IPRS have both applied for re-registration of their certificate under Section 33 of the Copyright Act, 2012 however the Copyright Office has not yet granted them the re-registration certificate. ► In the absence of the re-registration certificate mandated by Section 33, the sanctity and existence of IPRS and PPL is itself questionable as Section 33 clearly provides that the business of issuing and granting licenses in any work can be carried out only by a registered copyright society. ► Post 2012 Amendment: In view of the Copyright (Amendment) Act, 2012, Section 33 of the Copyright Act, 1957 dealing with the registration of Copyright Society has been amended to include “…the business of issuing or granting license in respect …sound recordings shall be carried out only through a copyright society duly registered under this Act.” As a consequence of the amended section, many music labels, which are not members of PPL and IPRS, may now have to register with PPL and IPRS for the commercial exploitation of their sound recordings. ► ISRA (Indian Singers’ Rights Association) was incorporated as a Company Limited by Guarantee under the Companies Act, 1956 on May 3, 2013. Thereafter, ISRA (Indian Singers’ Rights Association) filed for Registration as a Copyright Society as per Section 33 of the Copyright Act and received its Certificate of Registration from the Central Government on June 14, 2013. With the formation of ISRA, the question also arises on whether Radio Stations would be required to pay royalties to performers i.e. singers. The Amendments pertaining to performer’s rights have been subject to varied interpretations owing to the ambiguous drafting of the statute. (Please refer to Page 22 Chapter 2 of Sector 1 for detailed analysis on this issue).


128

Role and Rule of Law Media & Entertainment Industry Radio

05. DISPUTES RELATING TO RADIO

T

he disputes in the radio sector have been mostly related to issues of compulsory licensing, royalty rates payable by FM broadcasters, dual payment of royalties to IPRS and PPL.

● Entertainment Network (India) Ltd. v Super Cassette Industries Ltd. and Phonographic Performance Limited v Millennium Chennai Broadcast (P) Ltd. etc. Court: Supreme Court of India Citation: (2008) 13 SCC 30 33 Coram: SB Sinha and Lokeshwar Singh Pantaa, JJ. Date: May 16, 2008

Facts: The issue before the Supreme Court was whether the Copyright Board can grant a compulsory license interpreting “unreasonable conditions” imposed by owner of copyright for grant of license to be an attempt to withhold the work from the public. In this case, Super Cassette Industries Ltd. (SCIL) approached Delhi HC alleging that Entertainment Network (India) Ltd (ENIL), which operated the FM channel, Radio Mirchi, was using its songs without obtaining the requisite license. ENIL had made attempts to obtain a licence from SCIL. However, a dispute arose regarding the terms of the licence, which the Appellant considered unreasonable. In January 2003, ENIL approached the Copyright Board for grant of compulsory license. In October 2003, the Copyright Board granted a compulsory license. SCIL challenged the order of the Copyright Board before the Delhi High Court. On June 30, 2004, the Delhi HC remitted the matter back to the Copyright Board and directed ENIL to file an undertaking that it would not broadcast the sound recordings of SCIL. Aggrieved by this order, ENIL filed an SLP before the Supreme Court.

Ratio: The Supreme Court heard the appeal along with a clutch of similar appeals. Allowing the appeals, the SC held that an act of refusal depends upon the facts of each case. Only because an offer is made for negotiation or an offer is made for grant of licence, the same per se may not be sufficient to arrive at a conclusion that owner of copyright has not withheld its work from public. 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 the copyright. The court held, “When owner of a copyright or copyright society exercises monopoly in it, then bargaining power of an owner of a copyright and proposed licensee may not be the same. An unreasonable demand if acceded to, becomes an unconscionable contract which for all intent and purport may amount to refusal to allow communication to the public, work recorded in sound recording.” The very fact that refusal to allow communication on terms which the complainant considers reasonable have been used by Parliament indicates that unreasonable terms would amount to refusal. It is in that sense the expression “has refused” cannot be given a meaning of outright rejection or denial by the copyright owner. The court observed that the by virtue of Section 31(1)(b) of the Copyright Act if the owner of copyright refuses to allow communication to the public a sound recording on terms which complainant considers reasonable then a complaint to the board made in this regard for issuance of compulsory license is maintainable as it has jurisdiction to deal with the same. It further observed that while granting compulsory licenses court has to strike a balance between rights of the owner of the copyright and the other person’s right to get a compulsory license. If a compulsory licence is granted only once covering every single part of the country, the same cannot lead to a conclusion that no other person can approach the Board. The court, however, did not approve the manner in which the Copyright


129

Once the author of a lyrical or a musical work parts with his copyright by authorising the producer to have it incorporated or recorded in the sound recording, the producer acquires copyright, which gives him the exclusive rights to exploit the work

Board dealt with the matter. The court therefore remitted the matter back to the Board for consideration of the matter afresh on merit.

● Music Broadcast Private Limited v Indian Performing Rights Society Limited Court: Bombay High Court Citation: Suit No. 2401 OF 2006 Coram: SJ Vazifdar, J Date: July 25, 2011 Facts: The Plaintiff had sought a declaration that the Defendant, a registered copyright society representing authors of underlying works, was not entitled to demand or recover royalty and/or license fee for the broadcast of sound recordings by the Plaintiff on its FM radio stations. The Plaintiff sought a permanent injunction restraining the Defendant from demanding or claiming or interfering with such broadcasts by the Plaintiff for non-payment of royalty/license fee. It also sought a refund of Rs 1.55 crore paid as royalty/license fee to the Defendant from August 1, 2003, to July 31, 2006, with interest. The Plaintiff alternatively sought a declaration that it was entitled to a license to broadcast the works from the Defendant’s repertoire on payment of royalty as stipulated by the August 25, 2010, order passed by the Copyright Board and for an order restraining the Defendant by a perpetual injunction from interfering with the Plaintiff’s broadcasting works upon payment of such amounts.

embodied in such sound recording cannot interfere with these rights of the owner. Once the author of a lyrical or a musical work parts with his copyright by authorising the producer of a sound recording in respect of his work and thereby to have his work incorporated or recorded in the sound recording, the producer of the sound recording acquires copyright, which gives him the exclusive rights. This exclusive right includes the right to broadcast the sound recording to the public, and the persons holding the underlying works cannot seek separate licence fee or royalty for broadcasting of such sound recording. The court therefore held that the Defendant was not entitled to claim and/or demand royalty fee and/or license fees from the Plaintiff for the broadcast of sound recording comprising of musical and/ or literary work on their radio station. The court further held that the Copyright Board has the exclusive jurisdiction to decide the remaining issues. The judgment was stayed till October 31, 2011.

● The Delhi High Court arrived at a similar finding in the case of Indian Performing Rights Society v Aditya Pandey & Ors1. ● In the case of Super Cassettes Industries Ltd. v Music Broadcast Pvt. Ltd, 2 the Supreme Court held that the Copyright Board does

not have the power to grant any interim relief under Section 31 of the Copyright Act, 1957, which deals with compulsory licence in works withheld from public.

● In the order passed by the Copyright Board in M/s Music Broadcast Pvt. Ltd v M/s Phonographic Performance Ltd & Ors3 the

Copyright Board fixed the rate of royalty at 2% of the net advertisement revenue payable by FM Radio stations to copyright societies and owners of sound recordings. (Refer to Annexure 3 for case details)

1 FAO (OS)Nos. 423-424/2011

Ratio: The court held that once a sound recording is made, it is only the

producer, as the owner, who can exploit it exclusively. The owners of the underlying musical and literary work (such as lyricists, music composers)

2 AIR2012SC2144 3 Case No. 1, 2, 6 of 2002, 3-1/2008-CRB(NZ), 3-2/2008-CRB(NZ) & 3-3/2008-CRB(NZ), 3-5/2008-CRB(WZ), 3-4/2008-CRB(NZ) and 3-6/2008-CRB(NZ)


130

Role and Rule of Law Media & Entertainment Industry Radio

06. DIGITISATION OF RADIO Digitisation of Radio: Digitisation aims to benefit the radio industry by increasing the number of radio programmes, improving the audio quality and eliminating the fading problems in mobile environments among other benefits like saving transmission power. However, analogue radio is still more popular than digital radio online, but its fast growing in popularity. Digital radio broadcasting systems are typically designed for handheld mobile devices, just like mobile-TV systems. The digitisation in radio is at a very nascent stage in India. However, the internet is trying to be one medium through which radio stations all over the world can be accessible from one point.

Digitisation Of Radio In India: Digitisation is now becoming a necessity in India and a sub-group of the Indian Planning Commission on ‘Going Digital’ has been formed. This Commission is headed by a member secretary of the Planning Commission. It had laid down the path for migration from analogue transmission to digital, as under:

Step I - Commencement of digital terrestrial broadcast in Delhi - 2010 Step II - Commencement of digital terrestrial broadcast in all mega cities - 2011

Step III - Commencement of digital terrestrial broadcast in Tier II & Tier III cities – 2012 Step IV - Commencement of digital terrestrial broadcast in all other

areas – 2013

DIGITISATION OF ALL INDIA RADIO (AIR) ► AIR has adopted Digital Radio Mondiale (DRM) technology for digitisation of transmissions. DRM is the universal, open standard, digital radio system for short-wave, medium-wave and long-wave digital radio, for frequencies below 30MHz. DRM provides near-FM sound quality plus the ease-of-use that comes from digital transmissions. The improvement over AM is immediately noticeable. DRM can be used for a range of audio content, and has the capacity to integrate text and data. This technology aims to use the same FM band and can be introduced in existing FM band for switching over to digital. ► AIR proposes replacement of 500 kW present analogue transmitters by DRM transmitters at Bangalore which provides Vividh Bharati programs to most parts of India. All India Radio proposes to set up 24 DRM+ compatible FM transmitters of 1kW and 5kW (12 each). At the end of 11th Plan, it is estimated that 70 % of the country will receive DRM transmission. There are 238 stations functioning. AIR has a total of 380 transmitters (177 FM, 149 MW, and 54 short wave).

SATELLITE RADIO Satellite radio is one of the fastest-growing entertainment services in the world and it is making its presence felt in a small but a positive way in India. A satellite radio is basically a digital unit that receives signals broadcast by communication satellites. This allows a person

with a set to follow his favourite stations anywhere in the country unlike the terrestrial radio (AM and FM) whose signals are limited to a certain area depending on the power of the station. Satellite Radio Service refers to distribution of single or multi channel radio programmes by using a satellite system which provides encrypted digital radio signals direct to subscribers’ receiver sets. Some of the advantages of a satellite radio are that the sound is of digital quality and there are no commercials. But it is not for free, it is available on subscription for a fee. ► The Telecom Regulatory Authority of India (TRAI) had brought out a consultation paper on issues relating to Satellite Radio Services on December 29, 2004, and had sent its recommendations, based Open House Discussion, to the government on June 27, 2005. The MIB had accepted the said recommendations with certain modifications. Accordingly the MIB framed the draft Satellite Radio Policy Guidelines. The ministry had vide its letter No. 09/01/2005-BP&L-Vol.II dated March 11, 2008 requested the comments of TRAI on the guidelines and TRAI on June 4, 2008, released its final comments on draft Satellite Radio Policy as proposed by the MIB. ► The major issues covered in the draft Satellite Radio Policy Guidelines are eligibility criteria, period of license, entry fee & annual license fee, bank guarantee, basic conditions & obligations, technical standards, monitoring, inspection, value added services, terrestrial repeaters, termination of license, wireless planning and co-ordination wing’s license, procedure for application, disputes and jurisdiction. ► In its final comments it had suggested certain modifications in clauses relating to eligibility, procedure of application and grant of license and migration path for existing service provider to the licensing regime. It further recommended for a provision of auctioning of licenses in the event the number of eligible applicants exceeds the number of licenses being offered. Further in its recommendations it agreed with the proposal to permit terrestrial repeaters for satellite radio service so as to provide for high quality widespread coverage. The initial license period will be for a period of ten years, with provision for further extension for ten years. The licensee will have to pay an annual license fee of 4% of the gross revenue. The draft Satellite Radio Policy Guidelines also provided for appropriate obligation on the licensee to roll out the service within one year of getting the license.

INTERNET RADIO ► Internet radio, also known as web radio, net radio, streaming radio or eradio webcasting is an audio service transmitted via the internet. Music streaming on the internet is usually referred to as webcasting since it is not transmitted broadly through wireless means. ► An internet radio license is a specific type of broadcast license that allows the licensee to operate an internet radio station. The licensing authority and number of licenses required varies from country to country, with some countries requiring multiple licenses to cover various areas of a station’s operation, and other countries not having stringent licensing procedures in place. Licensing costs also vary, based on the number of listeners that a station has, as well as other factors such as the number of songs played, the number of broadcast hours, and whether tracks are dubbed to a digital playout system.


131

Sectorfour

133 CHAPTER I: INTRODUCTION 134 CHAPTER II: LEGAL FRAMEWORK A.

Information Technology Act 2000

B.

Intermediary Guidelines, 2011

C.

Indian Penal Code 1860

D.

Copyright Act 1957

136 CHAPTER III: INTERNET GAMING 138 CHAPTER IV: EXPLOITATION OF RIGHTS ON INTERNET PLATFORM A. iPTV

140 CHAPTER V: MISCELANEOUS DISPUTES A.

Internet censorship

B.

Domain name disputes

C. Defamation D.

Violation of privacy

144 CHAPTER VI: INTERNET PIRACY 207 Annexure 4


132

Role and Rule of Law Media & Entertainment Industry Films : Chapter 1 : introduction

Internet

Highlights • In Rediff Communications Limited vs Cyber-booth & another (1999), the court held that in case of two domain names being almost similar in nature there was every possibility of the internet user being confused and deceived in believing that both domains names belong to one common source and connection although the two belonged to different persons. • In Tata Sons Limited vs Greenpeace International and Anr (2011), the court while hearing a case alleging defamation, refused to grant an injunction against an online game, Turtle vs TATA. Stating that through the game, the defendants were seeking to convey their concern and criticism of the port project off the coast of Orissa and its perceived impact on the turtles’ habitat.

• In Super Cassettes vs Myspace Inc. (2011), the court directed the deletion of the copyrighted works of the plaintiff which had been uploaded on the website of the defendants without obtaining the requisite license from the plaintiff. • In Avnish Bajaj vs State of Delhi (2012), the court quashed the criminal proceedings against the director of a website that hosted an obscene MMS clip for sale stating that the directors and the employees cannot be held vicariously liable when the principal offence has been alleged against a company. • John Doe orders to prevent piracy of films on the internet: In Reliance Big Entertainment Pvt Ltd vs Jyoti Cable networks (2011), the first John Doe order was passed to prevent internet piracy of an Indian Film, Singham.


Role and Rule of Law Media & Entertainment Industry Internet

133

01. Introduction

I

ndia’s internet economy is expected to reach Rs 10.8 trillion by 2016, as the country’s growth rate in this segment is far ahead of many of the developing nations, according to a 2012 report published by the Boston Consulting Group. India’s Internet economy growth rate of 23 % places it as the second fastest across the G-20 nations. Internet reached India in 1996 with the Videsh Sanchar Nigam Limited (VSNL), the government-owned Internet service provider, offering its services. Within a year, India had 14,000 internet connections. Today, India already has more than 120 million internet users. From being a mere mode of communication, the internet now plays a role in almost every aspect of our lives. With the click of a mouse we can access social networking sites, retrieve unlimited information, shop online from the comfort of our home and download entertainment modules. Global internet giants such as Google and Facebook expect tremendous growth in the Indian internet sector and the internet is ex-

pected to play a pivotal role for India to realise its ambitions in the global economy. Increasing internet penetration fuelled by faster broadband speeds, video traffic, Wi-Fi growth, Internet Protocol TV (IPTV), adoption of new technologies such as 3G and 4G and the government’s efforts towards the last mile connectivity will boost the sector. Cyber pundits predict the next growth engines for the internet sector to be mobile phone internet users and on-demand video with the youth driving the change. The burgeoning of the internet industry has also given rise to the need to regulate the activities in cyberspace. The existing frameworks for the protection of individuals’ rights such as right to privacy and personality rights and intellectual property rights have been challenged. Cyber crimes such as phishing and identity theft, and online piracy are a growing cause for concern owing to the financial losses involved. While the internet offers unlimited growth potential, the evolution of law to monitor and prevent abuse needs to keep pace with technological advancements.


134

Role and Rule of Law Media & Entertainment Industry internet

02. legal framework

A. THE INFORMATION TECHNOLOGY (IT) ACT,

2000

Salient features of the IT Act: Information Technology Act, 2000, is an omnibus legislation intended primarily to promote e-commerce and e-governance. It legalised electronic documents and digital signatures and constituted certifying authorities for cyber transactions. Incidentally, it carries a few provisions to deal with unauthorised use of the computer system and unlawful conduct in cyber space.

Object: The IT Act provides legal recognition for transactions carried out by means of electronic data interchange and other means of electronic communication, commonly referred to as, electronic commerce, which involve the use of alternatives to paper-based methods of communication and storage of information, to facilitate electronic filing of documents with the government agencies and further to amend the Indian Penal Code, the Indian Evidence Act, 1872, the Bankers’ Books Evidence Act, 1891, and the Reserve Bank of India Act, 1934, and for matters connected therewith or incidental thereto. The relevant sections of the IT Act along with the amendments of 2008 pertaining to the media and entertainment space are as under:

Section 66 A: Punishment for sending offensive messages through communication service, etc.

This section provides that any person who sends, by means of a computer resource or a communication device —

(a) any information that is grossly offensive or has menacing character; or (b) any information which he knows to be false, but for the purpose of causing annoyance, inconvenience, danger, obstruction, insult, injury, criminal intimidation, enmity, hatred or ill will, persistently by making use of such computer resource or a communication device; (c) any electronic mail or electronic mail message for the purpose of causing annoyance or inconvenience or to deceive or to mislead the addressee or recipient about the origin of such messages; shall be punishable with imprisonment for a term which may extend to three years and with fine.

Section 66 E: Punishment for violation of privacyThis section provides that whoever, intentionally or knowingly captures, publishes or transmits the image of a private area of any person without his or her consent, under circumstances violating the privacy of that person, shall be punished with imprisonment which may extend to three years or with fine not exceeding Rs 2 lakh, or with both.

Section 69: Power to issue directions for interpretation or monitoring or decryption or any information through any computer resource:

This section expands the powers of the government to access any information and correspondences being transferred on the internet, if the government feels that there is a probable threat to the sovereignty or integrity of India, defence of the country, security of the state, foreign relations or are capable of the incitement of any cognisable offence. Further sections 69A and 69B which were introduced by the 2008


135

amendment, empowers the government (a) to block any information from the public access (b) and monitor and collect traffic data or information generated, transmitted, received or stored in any computer resource respectively.

offensive or menacing in nature; g) impersonates another person;

Thus these amendments empower the government to take necessary steps to prevent various cyber crimes.

h) contains software viruses or any other computer code, files or programs designed to interrupt, destroy or limit the functionality of any computer resource;

Section 79: Exemption from liability of intermediary in certain cases:

i)

This section exempts the intermediaries from any liability arising from any information, data or communication link made available or hosted by him, in cases (1) where the functions of the intermediary is limited to providing access to a communication system over which information made available by third parties is transmitted or temporarily stored or hosted; and (2) the intermediary does not initiate the transmission, or selects the receiver of the transmission, or selects or modify the information contained in the transmission; and (3) the intermediary observes due diligence while discharging his duties under this Act and also observes such other guidelines as the central government may prescribe in this behalf.

Section 80: Power of police officer and other officers to enter, search, etc: This section empowers the police and any other officer of the central government or a state government authorised by the central government in this behalf to enter any public place, search and arrest without warrant any person found therein who is reasonable suspected of having committed or of committing any offence under this Act.

B. INFORMATION TECHNOLOGY

(INTERMEDIARIES GUIDELINES) RULES, 2011 ► Section 2 (w) of the IT Act, defines an intermediary with respect to any particular electronic records, as any person who on behalf of another person receives, stores or transmit that record or provides any service with respect to that record and includes telecom service providers, network service providers, internet service providers, web – hosting service providers, search engines, online payment sites, online – auction sites, online- market places and cyber cafes. ► These guidelines put an obligation on the intermediary to exercise due diligence while discharging its duties. The intermediaries shall publish the rules and regulations, privacy policy and user agreement for access or usage of the intermediary’s computer resource by any person and the same shall inform the users of computer resource not to host, display, upload, modify, publish, transmit, update or share any information that: a) belongs to another person and to which the user does not have any right to; b) is grossly harmful, harassing, blasphemous defamatory, obscene, pornographic, paedophilic, libellous, invasive of another’s privacy, hateful, or racially, ethnically objectionable, disparaging, relating or encouraging money laundering or gambling, or otherwise unlawful in any manner whatever; c)

harms minors in any way;

d) infringes any patent, trademark, copyright or other proprietary rights; e)

violates any law for the time being in force;

f) deceives or misleads the addressee about the origin of such messages or communicates any information which is grossly

threatens the unity, integrity, defense, security or sovereignty of India, friendly relations with foreign states, or public order or causes incitement to the commission of any cognisable offence or prevents investigation of any offence or is insulting any other nation.

► The Guidelines further put an obligation on the intermediary not to knowingly host or publish any information or initiate the transmission, select the receiver of transmission, and select or modify the information contained in the transmission. However, the following actions shall not amount to hosting, publishing, editing or storing of any such information as specified in (a) temporary or transient or intermediate storage of information automatically within the computer resource as an intrinsic feature of such computer resource, involving no exercise of any human editorial control, for onward transmission or communication to another computer resource; (b) removal of access to any information, data or communication link by an intermediary after such information, data or communication link comes to the actual knowledge of a person authorised by the intermediary pursuant to any order or direction as per the provisions of the Act. ► The intermediary, on whose computer system the information is stored or hosted or published, upon obtaining knowledge by itself or been brought to actual knowledge by an affected person in writing or through e-mail signed with electronic signature about any such information, shall act within 36 hours and where applicable, work with user or owner of such information to disable such information that is in contravention of sub-rule (2) of Rule 3. Further the intermediary shall preserve such information and associated records for at least 90 days for investigation purposes, ► The intermediary shall inform its users that in case of non-compliance with rules and regulations, user agreement and privacy policy for access or usage of intermediary computer resource, the intermediary has the right to immediately terminate the access or usage lights of the users to the computer resource of intermediary and remove noncompliant information.

C. INDIAN PENAL CODE, 1860. After the enactment of the Information Technology Act, 2000, various statutes including the Indian Penal Code, 1860, were amended to incorporate the provisions of the IT Act and to deal with cyber crimes such as email phishing, hijacking domain names, identity theft or imposition, etc.

D. COPYRIGHT ACT, 1957 By insertion of sections such as 63A to the Copyright Act, 1957, by the Amendment Act of 1994 the penalty for second and subsequent conviction was enhanced and by the Amendment Act of 2012, Section 65A was introduced thereby penalising with an imprisonment up to two years and a fine for anyone, who circumvents an effective technological measure applied for the purpose of protecting any rights conferred by the Copyright Act.


136

Role and Rule of Law Media & Entertainment Industry Internet

03. Internet Gaming

O

nline gaming is a growing industry. Various websites today provide online gaming options for users. Websites such as zapak.com, gamehouse.com, freeonlinegames.com, indiagames. com, ibibo.com, etc allow users to play online gaming and even social networking websites such as facebook.com provide gaming options to its users.

While some websites provide free gaming options, there are others which allow players to put their money where their mouse is. In India, betting and gambling fall under the State List and therefore the power to make laws in regard to the same are vested only with the state legislatures. All online games do not constitute gambling but there is little clarity on what is permissible.

Games are divided into two types: (i) those involving mere chance and (ii) those involving skill. The Public Gambling Act, 1867, which prohibits gambling, prohibits a game involving mere chance while a game of skill is permissible.

Provisions for online gaming: There is no express provision in India either banning or allowing online gaming. Sikkim is the only state to have a statute governing online gaming: Sikkim Online Gaming (Regulation) Act, 2008 and the Sikkim

Online Gaming (Regulation) Rules, 2009. This Act invites applications for licences to set-up online gaming websites with the servers based in Sikkim. Section 3 of the Sikkim Online Gaming Act provides for the games that can be played online, which include roulette, black jack, pontoon, bingo, casino brag, etc.

1. Information Technology (Intermediary Guidelines) Rules 2011

Rule 3 (2) (b) of the Intermediary Guidelines, 2011, requires an intermediary to observe the following due diligence while discharging his duties, namely publish rules and regulations, terms and conditions or user agreement to inform the users of computer resource not to host, display, upload, modify, publish, transmit, update or share any information that is inter alia relating or encouraging money laundering or gambling, or otherwise unlawful in any manner whatever;

2. The Indian Computer Emergency Response Team (CERT - IN) is authorised to block a website promoting gambling on receipt of a complaint or otherwise.

3. Reserve Bank of India (RBI) regulations: The RBI can deny permission to any company to operate payment systems (i.e. credit card, debit card and money transfer operations) under the Payments and Settlement Systems Act, 2007.

4. Foreign Exchange Management (current account transactions) Rules, 2000: Rule 3 of the Foreign Exchange Management (current account transactions) Rules, 2000, prohibits transactions such as remittances out of lottery winnings, and for sweepstakes.


137

Important Case Laws: ● M/s Gaussian Network Pvt. Ltd. vs Ms. Monica Lakhanpal and State of NCT

real games being played in the physical form. Online games cannot be compared with real games.” The court stated that there could be no equation in the degree of skills in games to be played in the physical form and those to be played online and there was a marked difference in the games being played online. It was further stated that in online gaming various factors increased the degree of chance and predominance of skill over chance was questionable.

Court: Additional District Judge-I, Patiala House Courts, New Delhi Citation: Suit No. 32/12 Coram: Ina Malhotra, additional district judge Date: September 17, 2012 Facts: The Petitioner company had proposed to launch a website, which would offer six games i.e., chess, billiards, rummy, texas holdem poker, bridge and snooker. As per the agreement, the Petitioner was to conduct the online business and carry out the operation and Respondent No. 1 had to make an investment of Rs 5 lakh. It was stated in the petition that the games which were being offered were the games which were recognised as games of skill and also that the Petitioner would not bet against any of its players and would charge a limited commission of under 5% on the winning hand.

(v) Whether there can be restriction on advertising and promoting the website offering the aforesaid games of skill?

The petition sought the opinion of the court on various issues pertaining to online gaming. The finalisation of the agreement between the Petitioner and Respondent No. 1 was contingent on the court’s opinion.

Ratio: The Petitioner sought the opinion of the court on certain queries, which were answered as follows:

(i) Whether games of skill are considered “business activity”, protected under Article 19(1)(g) of the Constitution of India?

The court observed that the such online “business activity” would not be protected under Article 19(1)(g) of the Constitution of India.

(iv) Whether wagering and betting on games of skill make the activity “gambling”?

The court observed that the games of rummy, chess, golf, bridge and billiards could definitely be opined to as games of skill, the element of chance being negligible or insignificant.

The court held that poker could not be accepted to be a game of skill. The court further observed that it would be legal to play poker within the states which do not hold it as illegal, such as within the state of West Bengal as the West Bengal Gambling and Prize Money Act has specifically excluded poker from the ambit of gambling.

The court clarified that, “This opinion on playing Games of Skill for money being legal is, however, applicable only to these

The court stated that the various websites offering such online games for prize money and winnings through betting were virtual casinos which were illegal. The court stated that advertising or promoting such websites had to be curtailed and the sponsors advertising or promoting their own product on such sites also attracted penal consequences.

(vi) Can banks refuse to provide normal banking service to the websites once it is determined that the company is conducting normal business activities?

(ii) Whether the games of rummy, chess, golf, poker, bridge, and snooker are games of skills? (iii) Whether there is any restriction on playing aforementioned games of skill with stakes on the websites making profit?

The court observed that there were various sites which offered games of skill online free of charges and there was no illegality involved but “when the service provider partakes a slice of the winning component, it is no better than a gambling house which are illegal.”

The court observed that online gaming, even pertaining to games of skill, offered by websites involving money could not be held to be legal and therefore the banks could refuse to provide normal banking services to such websites. The court stated that the payment gateways for gambling were blocked by the Reserve Bank of India as per the Information of Technology Rules, 2011.

(vii) Can the company or its directors, agent, players etc. be held liable under any penal laws as long as they are only offering games of skill which are declared to be normal business activities?

The court held that since online gaming cannot be held to be legal in the states which prohibited gambling, the company and its directors, agents, players would be liable to penal consequences.

In Abbas Shaikh vs Union of India & Ors1 the Bombay High Court heard a PIL seeking to block online a gambling website. By an order dated March 10, 2010, the court directed Indian Computer Emergency Response Team (CERT - IN) to block the transmission of the gambling and betting website, www.betfair. com, from all ISPs based in India within three months.

1 PIL/40/2009


138

Role and Rule of Law Media & Entertainment Industry Internet

04. INTERNET PROTOCOL TELEVISION (IPTV)

I

nternet Protocol Television (IPTV) is a system where a digital television service is delivered using the internet protocol over a network infrastructure, which may include delivery by a broadband connection. To decode the images in real time, IPTV requires either a computer and software media player or an IPTV set top box. IPTV services include Live TV (multicasting), as stored video (video on demand VOD) and time shifted television (this service allows one to record the programme and watch it later). IPTV services also have the potential to offer value added services like online gaming, broadband and e-commerce.

Managed and Unmanaged Network IPTV services can be provided by a managed network or unmanaged network/Over-The-Top (OTT). The difference between the two is that in unmanaged network/OTT, the option of deciding the internet service provider (ISP) lies with the end consumer. A managed network would therefore involve a situation wherein the service provider shall mandate what internet connection is to be used in order to view the content provided. There are few IPTV providers which tie up with internet service providers and then through a network operation centre provide IPTV services to end consumers. Few IPTV providers are themselves Internet Service providers and hence do not require to tie up with any ISP separately. Currently, the Indian market has just one over-the-top (OTT) television distribution platform in the form of Ditto TV launched by Zee News Media, the digital arm of Zee Entertainment, in March 2012. There are numerous on-demand online content providers like NyooTV, BigFlix and Eros Now, among others. In India, the Information Technology Act 2000, Cable Television Network (Regulation) Act 1995, and the Rules thereunder, Telecom Regulatory Authority of India Act 1997, Telecommunication (Broadcasting and Cable Services) Interconnection (Fifth Amendment) Regulation Act 2009, together with various guidelines issued by the Ministry of Information and Broadcasting and TRAI provide for the legal framework for IPTV. Further, the Programme and Advertisement Codes under the Cable Television Networks Rules, 1994, shall also apply to the content of IPTV.

(iv) Cable TV operators registered under Cable Television Network (Regulation) Act 1995, can provide IPTV services without requiring any further permission. Content Regulation: • The MIB Guidelines state that the Telecom Licensee for providing TV services through IPTV shall receive the satellite signals of a registered TV channel directly from the broadcasters and under no circumstances such satellite signals of TV channels shall be taken directly from the Multi System Operators (MSO). • MIB has also issued a clarification on November 18, 2008, that the provisions of Rule 6(3) of the Cable Television Network (Regulation) Rules 1994, which requires that no content in respect to which copyright subsists under the Copyright Act 1957, shall be included in the cable service unless the copyright owner issues a license with respect to the same, shall also be applicable to all MSO’s/cable operators who are to provide content to telecom licensees for IPTV services only after obtaining the relevant license from the Copyright owner, failure to do so will amount to violation of the Programme Code. Licenses and Registrations • Video on Demand (VOD): Registration as an Other Service Providers (OSP) with Department of Telecommunications (DoT) and separate ISP licence is not required for providing VOD if content is delivered using a Network Operating Centre (NOC). • VOD and Live TV: No separate ISP license is required if content is delivered using an NOC, but an OSP registration with DoT is required, moreover for broadcasting live channels license from broadcaster/ channel owners is required. Further all telecom licensees/cable operators before providing IPTV are also required to give a self certified declaration to Ministry of Information and Broadcasting, Department of Telecommunications and Telecom Regulatory Authority of India (TRAI) furnishing details like license/registration under which IPTV service is proposed, the start date, details of the network infrastructure and the covered area, along with the applicable license fees.

IPTV Guidelines The guidelines issued by the Ministry of Information and Broadcasting (MIB Guidelines) provide that the following can provide IPTV services in India: (i) Telecom service providers (Unified Access Services License and Cellular Mobile Telephony Service) who have the license to provide triple play services (ii) Internet Service Providers (ISPs) with net worth more than Rs 100 crore after obtaining the permission from the licensor (iii) any other telecom service provider duly authorised by the Department of Telecom will be able to provide IPTV service under their licenses without requiring any further registration

Mandatory Transmission The MIB Guidelines mandatorily requires the below mentioned eight channels to be included in the IPTV services provided by the service providers: 1. Lok Sabha Television Channel 2. DD Rajya Sabha Channel 3. DD-1 (National Channel) 4. DD (News Channel) 5. DD Sports Channel 6. DD Urdu Channel 7. Gyan Darshan Channel 8. DD Bharati Channel.


139

IPTv block diagram

Telecom central Office satellite channels

IPTV system

Voice switch internet

video on demand

digital subscriber line access multiplexer

telephone

combiner

splitter

Triple play service: Voice, data, Video (residence) ADsl Modem Personal computer

Television

iptv set top box


140

Role and Rule of Law Media & Entertainment Industry Internet

05. MISCELANEOUS DISPUTES

A. INTERNET CENSORSHIP: The Information Technology (Amendment) Act 2008, empowers the Government to block any information from public access, further it criminalises sending inflammatory or offensive messages. In 2003, the government of India established the Indian Computer Emergency Response Team (CERT - IN) to ensure internet security. CERT-IN is the agency that accepts and reviews requests to block access to specific websites. In April 2011, the government enacted the Intermediary Guidelines which requires internet companies to remove any objectionable content within 36 hours of being notified.

INSTANCES OF INTERNET CENSORSHIP: In the last few years, the Indian Government has stepped up its internet surveillance. Few instances where the government exercised its power on censoring online content are given below:

► Yahoo Group: In September 2003, the Department of Telecommunications asked Indian ISPs to block the Yahoo group which was linked to an illegal separatist group from Meghalaya.

► In December 2011, Google was asked to remove 236 items from Orkut and 19 items from YouTube. These items criticised the government. (Source: Google Transparency Report.)

► From August 18 to August 21, 2012, the Government of India had

ordered more than 300 websites to be blocked. The so blocked articles, accounts and videos were believed to contain inflammatory content with fictitious details relating to communal violence in Assam.

► The film, Innocence of Muslims, sparked off violent protests in

many countries and the courts of these countries had ordered the film to be removed from Google’s site, Youtube. A PIL has been filed in India also seeking removal of this film from the internet, with respect to which the Bombay High Court has issued notices to the Central and the Maharashtra government.

B. DOMAIN NAME DISPUTES: A domain name acquires the features of a trademark, trade name, or brand, and de facto, it is a means of individualization of a certain business entity, its goods and services. Because of the increasing popularity of the internet, companies have realized that having a domain name that is the same as their company name or the name of one of their products can be an extremely valuable part of establishing an internet presence.

● Rediff Communication Limited vs Cyberbooth & another Court: Bombay High Court Citation: Notice of Motion No. of 1999 in Suit No. 1881 of 1999/ AIR2000Bom27

Coram: AP Shah, J Date: April 23, 1999 Facts: The Appellant filed the suit for a permanent injunction restraining

the Respondents from using the mark/domain name, Radiff, or any other similar name so as to pass off or enable others to pass off their business or goods or services as for the business or goods or services of the Appellant. The Appellant also sought a permanent injunction restraining the Respondents from using the mark, Radiff, or any other word or mark either as part of their trade name or trading style which is deceptively similar to the Plaintiff’s trading style and/or, Rediff. The Appellants further sought an injunction against the Respondents from using the literary or artistic work found on the Appellant’s web page or infringing the Appellant’s copyright thereon without the Appellant’s licence. Along with the suit, the Appellant’s had taken out the Notice of Motion for interlocutory injunctions.

Ratio: The court observed that the law relating to passing off was fairly

well settled. The principle underlying the action was that no one was entitled to carry on his business in such a way as to lead to the belief that he was carrying on the business of another man or to lead to believe that he was carrying on or has any connection with the business carried on by another man. The court held that there could be no doubt that the two marks/domain names, i.e. Appellant’s Rediff and Respondent’s Radiff, were almost similar and also that the field of activity of both the Appellant and the Respondent were clearly similar and overlapping. When both domain names were considered it was clearly seen that two names being almost similar in nature there was every possibility of internet user being confused and deceived in believing that both domain names belong to one common source and connection although two belonged to different persons.

Similar domain name disputes were dealt with in the cases of Satyam Infoway Ltd v Sifynet Solutions Pvt. Ltd1, (India TV) Independent News Service Pvt. Limited v India Broadcast Live LLC and Ors. 2 and Times Internet Ltd. v Belize Domain Whois Service Ltd. and Anr3. [Refer to Annexure 4(i) for details of cases] 1 [AIR 2004 SC 3540] 2 2007 (35) PTC 177 Del 3 2011(45)PTC96(Del)


141

C. DEFAMATION There have been several cases of defamation of individuals/ companies on the internet medium.

● Nirmaljit Singh Narula vs Yashwant Singh & Ors Court: Delhi High Court Citation: IA No. 10017/ 2012 in CS (OS) 1518/2012 Coram: Kailash Gambhir, J Date: September 14, 2012 Facts: The Plaintiff projected to have some healing powers and used to conduct congregations which his followers/devotees used to attend to hear his spiritual discourses and seek his blessings. As per the Plaintiff, the Defendants authored and/or published defamatory articles and defamatory statements against the Plaintiff on the website of Defendant No. 3 with the intention to disparage and malign the reputation of the plaintiff and continued to do so even after put to notice. Ratio: The court while emphasising on maintaining a balance between

the right to freedom of speech and expression of the press recognised by the Constitution and an individual’s right to protect his reputation, granted conditional injunction, thereby asking the Defendant to restrain from licensing, writing, publishing, hosting or advertising any defamatory material against the Plaintiff and the Plaintiff was also asked to restrain in future from giving any kind of absurd or illogical solutions to his disciples.

● Tata Sons Limited vs Greenpeace International and Anr. Court: Delhi High Court Citation: IA No. 9089/2010 in CS (OS) 1407/2010 [178(2011) DLT705] Coram: S Ravindra Bhat, J Date: January 28, 2011 Facts: The Plaintiff had filed the suit seeking a permanent injunction and a decree for damages to the extent of Rs 10 crore against the Defendants who had made an online game, Turtle v. TATA. The game was launched to mark the long-standing conflict between attempts to protect the endangered Olive Ridley Turtles and TATA Steel’s port located off the coast of Orissa. The Plaintiff alleged that the Defendant used the Plaintiff’s trade mark, TATA, as well as the “T” within a circle device without the permission of the Plaintiff thereby infringing its trade mark rights and also maligning its reputation.

Ratio: Tata was denied interim injunction. The court held that, “The use of a trademark, as the object of a critical comment, or even attack, does not necessarily result in infringement. If the user’s intention is to focus on some activity of the trademark owners, and is “denominative”, drawing attention of the reader or viewer to the activity, such use can prima facie constitute “due cause” under Section 29(4), which would disentitle the Plaintiff to a temporary injunction, as in this case. The use of TATA, and the ‘T’ device or logo, is clearly denominative. Similarly, describing the Tatas as having demonic attributes is hyperbolic and parodic. Through the medium of the game, the Defendants seek to convey their concern and criticism of the project and its perceived impact on the turtles’ habitat. The court cannot appoint itself as a literary critic, to judge the efficacy of use of such medium, nor can it don the robes of a censor. It merely patrols the boundaries of free speech, and in excep-

tional cases, issues injunctions by applying Bonnard Principle. So far as the arguement by the Plaintiff that it is being “targeted” is concerned the court notes that the Defendants submit that the major gains through the port accrue to the Tatas.” The court protecting the freedom of speech and expression of the Defendant held that granting an injunction would freeze the entire public debate on the effect of the port project on the Olive Ridley Turtles’ habitat. “That plainly would not be in public interest; it would most certainly be contrary to established principles.” Similar cases of defamation include Google India Private Limited v M/s Visaka Industries Limited4 and Vyakti Vikas Kendra, India Public Charitable Trust Through Trustee Mahesh Gupta & Ors v Jitender Bagga & Anr5. [Refer to Annexure 4 for case details.]

D. INTERMEDIARY LIABILITY ● Super Cassettes vs MySpace Inc. Court: Delhi High Court Citation: CS (OS) No. 2682 of 2008 Coram: Manmohan Singh, J Date: July 29, 2011 Facts: The Plaintiff claimed to be the owner of the copyright in certain cinematograph films and sound recordings, etc. which the Defendant, a social networking website, was offering on its website without obtaining the requisite license. Ratio: The court while recognising that the IT Act does not protect intermediaries against copyright infringement claims observed that, “Section 79 of IT Act is, meant for all other internet wrongs wherein intermediaries may be involved including auctioning, networking servicing, news dissemination, uploading of pornographic content but not certainly relating to the copyright infringement or patent infringement which has been specifically excluded by way of proviso to Section 81.” The court observed that the acts of the Defendants whereby they are offering the space over the internet, getting the works uploaded through users, thereafter saving in their own database with the limited licence to add, amend, or delete the content and thereafter communicating the said work to the public by providing some advertisements alongside the work or in the alternative gaining advertisements or sponsorships on the said basis thereafter would prima facie tantamounts to permitting the place for profit for infringement as envisaged under Section 51(a)(ii) of the Act. The court, in this case, found MySpace guilty of primary copyright infringement and passed an interim order restraining the defendants from dealing with the Plaintiff’s works, including modifying them, adding advertisements, or making profits from the same, without enquiring about the ownership of the works. As regards future works, it directed MySpace to delete the works of the Plaintiff as and when they are notified by them. The suit is pending. Its outcome will be keenly watched as it will determine the law on intermediary liability with respect to infringement of copyright.

4 Crl.P.No.7207 OF 2009 5 CS(OS) No. 1340/2012


142

Role and Rule of Law Media & Entertainment Industry internet: Chapter 5: MISCELANEOUS DISPUTES

the Respondent unauthorisedly accessed the email account of her husband and father-in-law and

downloaded their e-mails and chats to use as evidence in her dowry harassment case against them.


143

● Avnish Bajaj vs State Court: Supreme Court of India Citation: Criminal Appeal Nos. 1483 of 2009 Coram: Dalveer Bhandari, Sudhansu Jyoti Mukhopadhaya and Dipak

Misra, JJ.

Date: April 27, 2012 Facts: The Appellant in this case was the CEO of a company on whose website, baazee.com, a pornographic MMS was posted for sale. The Appellant appealed against the decision of the Delhi High Court seeking quashing of a criminal case against him under Sections 292 and 294 of the IPC dealing with sale of obscene material and Section 67 of the IT Act. The question before the court was that whether the company could be made liable for prosecution without being impleaded as an accused and whether the director could be prosecuted for offences punishable under the aforesaid provisions without the company being arrayed as an accused. Ratio: The Court relying upon the three-judge bench judgment in State

of Madras vs CV Parekh and Anr1, where it was held that when the principal offence has been alleged against a company and it is not made an accused then the directors and the employees cannot be held vicariously liable, held that all the proceeding initiated in this case were not maintainable either against the company or against the director thus quashing all proceedings against the appellant and the company.

Recently, a complaint was filed against Google and other social networking websites seeking removal of “objectionable” pictures of gods and goddesss uploaded on these social networking websites. The appeal, Google India Private Limited vs Vinay Rai and Anr.2 , is pending in the Delhi high court and is likely to be heard in December 2012.

E. VIOLATION OF PRIVACY: Under the Constitution of India, the right to privacy has been interpreted as a fundamental right under Article 21 which guarantees right to life and personal liberty. The increasing number of cases of violation of this right has seen the Indian judiciary taking an aggressive stance in protecting the right to privacy. In the landmark judgment in Kharak Singh vs State of UP3, the Supreme Court held that the right to privacy forms an integral part of Article 21 of the Constitution and therefore concluded that an unauthorised intrusion in to a person’s home and disturbance caused to him is in violation of personal liberty of the individual.

Provisions under the IT Act, 2000

Section 69 of the Information Technology Act 2000, empowers the government to intercept any information transmitted through any computer resource, and further requires that users disclose encryption keys or be imprisoned. Section 72 of the IT Act provides that any person who discloses the contents of any electronic record, book, register, correspondence, information, document or any other material without the consent of the person concerned shall be penalised. By the amendment of 2008 to this Act, intermediaries and body corporate (any company including a firm, sole proprietorship or other association of individuals engaged in commercial or professional activities) have also been brought within the ambit of this Act via Section 72A and Section 43A respectively. Further Section 66 E of the Act provides that anyone who intentionally or knowingly captures, publishes or transmits the image of a private area of any person without his consent, shall be punishable with imprisonment up to three years or fine up to Rs 2 lakh or both.

1 Citation: (1970) 3 SCC 491 2 Citation: Crl. M.A. 386 of 2012

3 Citation: AIR 1963 SC 1295

Important Case Laws: ●

Nirav Navin Bhai Shah and Ors v/s State of Gujarat and Another

Court: Gujarat High Court

Citation: Criminal Misc. Application No.10291 of 2006 Coram: S Brahmbhatt, J Date: September 28, 2006 Facts: The Complainant filed a FIR against the Appellants accusing him

of hacking into the computer system of the complainant and stealing important data under Sections 66 and 72 of the Information Technology Act 2000, and under certain other provisions of the Indian Penal Code. The issue raised here was whether criminal proceedings can be quashed on the ground that the parties have reached an amicable settlement.

Ratio: The Gujarat High Court, observed that violation of privacy and hacking are offences against the society and cannot be condoned or treated as a civil dispute. However, if the parties agree to a settlement of the entire dispute then the court may allow such settlement in the interest of justice.

● Vinod Kaushik and another vs Madhvika Joshi and others Foram: Adjudicating Officer, Information Technology Act, 2000 Citation: Complaint No. 2 of 2010 Coram: Rajesh Aggarwal, (adjudicating officer) Date: November 2011 Facts: In this case, the Respondent unauthorisedly accessed the email ac-

count of her husband and father-in-law and downloaded their e-mails and chats to use as evidence in her dowry harassment case against them. The complainant filed a complaint under Sections 43 and 66 C of the Information Technology Act 2000.

Ratio: The adjudicating officer observed that the Respondent was guilty for the offence of identity theft by using the password belonging to others dishonestly. The respondent was asked to pay a token fine of Rs 100 and spared imprisonment as the information extracted by her was not made public but was forwarded only to the police and the court.


144

Role and Rule of Law Media & Entertainment Industry Internet

06. INTERNET PIRACY

T

he internet hosts a number of file sharing sites from which the files can be uploaded and downloaded easily such as bit torrent, limewire, bearshare and so on. Through these internet sites, films, television shows, music (audio and video clips) etc. are shared without obtaining any license from the legitimate copyright holders, who do not have any means to find out the identity of such infringers. However, the identity of such infringers is known to the Internet Service Providers (ISPs) who have been compelled in various cases by the courts to provide the identity of such illegitimate users. The courts have also ordered the ISPs to block these file sharing sites. In 2007, a Danish court ordered a leading ISP to block Allofmp3.com, a website offering unauthorized music downloads. (i) In the recent Kolaveri D case1, the Madras High Court had passed an interim injunction against the Respondents and other known or unknown persons restraining them from displaying, downloading, uploading, exhibiting or playing and/or in any manner communicating the Applicant’s film, 3, which contains the famous song Kolaveri D sung by Dhanush without a proper license through any medium. (ii) Similarly in the Songs.PK case2 , the Calcutta High Court prohibited the illegal/ unauthorised/ unlicensed downloads of music from the website resulting in the blocking of the website.

Unauthorised streaming of content without the license/ permission of the copyright holder of the content would amount to copyright infringement under Section 63 of the Copyright Act, 1957, and punishable with imprisonment for a term from six months to three years and with a fine between Rs 50,000 and Rs 2 lakh.

JOHN DOE ORDERS TO PREVENT PIRACY OF FILMS ON THE INTERNET: In the last two years, the remedy provided by courts in the form of John Doe orders has been invoked several times by the film production houses to prevent their films from being downloaded from the internet or being telecast by cable operators without a license. Reliance Big Pictures obtained an order from the Delhi High Court to prevent the illegal broadcast or streaming of its upcoming films Bodyguard and Singham. Similar orders were obtained for films such as Speedy Singhs, Bitto Boss, Department, Blood Money, Loot, Players, Kahaani, Gangs of Wasseypur I, Gangs of Wasseypur 2, Don 2 and Dhammu. The Bombay High Court passed another unconditional John Doe order on July 18, 2012, for the film The Dark Knight Rises. Warner Bros. Pictures (India) Private Limited., the copyright holder of the film, had moved the Bombay High Court against cable operators, internet service providers and other unknown defendants seeking pre-emptory orders restraining any person from pirating the film on any platform including television and internet.

ing content on various websites rather than blocking the entire websites. The order restrains the defendants from uploading/ downloading/ exhibiting the movie of the Plaintiff in a manner which would infringe the Plaintiff’s copyright in its film through different mediums including the internet. These orders do not direct any websites to be blocked. However in some cases like the Singham case, after obtaining the order Reliance Entertainment sent a list of file sharing sites to ISPs, asking them to stop them from pirating the movie. The ISPs, unable to prevent piracy, just blocked entire file sharing websites, thus preventing legitimate usage of these sites from India. As a consequence of this action, majority of the legitimate users of these sites were unable to access the sites. Similarly, following the John Doe order passed for the film, 3, by the Madras High Court, several ISPs including Airtel blocked entire websites. This resulted in a consumer complaint being filed in Karnataka against Airtel. The District Consumer Disputes Redressal Forum at Shimoga has directed Airtel to pay Rs 20,000 for “deficiency in Internet service” thereby causing mental agony to the complainant. According to the forum, Airtel had provided deficient service by blocking the websites illegally while justifying their actions through misinterpretation of the court order. “By misinterpreting the Madras High Court order, Airtel blocked entire websites. It is needless to say that the company’s actions amount to deficiency in service as well as unfair trade practice,” said the forum. In the case of Creative Commercials vs BSNL & Ors , the Madras High Court granted a John Doe order with respect to the film, Dhammu, on April 25, 2012. Thereafter an appeal was filed by a consortium of Internet Service Providers seeking specificity in complaints of infringing content, instead of a John Doe / Ashok Kumar order. On June 15, 2012, the Madras High court has passed a clarificatory order stating: “The order of interim injunction dated April 25, 2012 is hereby clarified that the interim injunction is granted only in respect of a particular URL where the infringing movie is kept and not in respect of the entire website. Further, the applicant is directed to inform about the particulars of URL where the interim movie is kept within 48 hours.” In the appeal, the consortium of ISPs pointed out that the John Doe order had, inter alia, led to legitimate content being disabled. ISPs further pointed out that they are willing to block access to infringing content when informed by the studios.

1

RK productions Pvt Ltd. vs BSNL and Ors

Recently Multi Screen Media Pvt. Ltd and Star India Private Limited obtained John Doe orders wherein rogue websites and unknown websites (John Doe) have been restrained from communicating the FIFA World Cup, 2014 and the recent India-England Series Matches, 2014 respectively. Several internet service providers, Department of Telecommunications (DoT) through Ministry of Communications and Information Technology and Department of Electronics and Information Technology (DEIT) were also arrayed as defendants to ensure effective implementation of any orders which would be passed by the court. Over 200 websites were blocked by the ISP’s following the orders passed by the Delhi High Court.

2

Sagarika Music Pvt Ltd and others vs Dishnet Wireless Ltd and others (GA No.187 of 2012)

(Refer to John Doe Orders- Page -107 Sector 2-Television)

Indian courts have been inclined to direct blocking of specific infring-


145

Sectorfive

147 CHAPTER I: INTRODUCTION 148 CHAPTER II: CELEBRITY ENDORSEMENTS A.

Types of celebrity endorsements

B.

Nature of celebrity endorsement services

149 CHAPTER III: ROLE OF TALENT MANAGEMENT AGENCIES

150 CHAPTER IV: NATURE OF COMMERCIAL RIGHTS OF CELEBRITIES

152 CHAPTER V: LEGAL PROVISIONS FOR

PROTECTION OF PERSONALITY RIGHTS

153 CHAPTER VI: DISPUTES RELATING TO

AGREEMENTS OF PERSONAL SERVICE


146

Role and Rule of Law Media & Entertainment Industry Films : Chapter 1 : introduction

Celebrity Management

Highlights • The case, Sourav Ganguly vs Tata Tea Limited (1997), highlighted the growing awareness of celebrity rights with cricketer Sourav Ganguly objecting to Tata Tea’s move to profit from his popularity without prior consent. • In DM Entertainment Pvt Ltd vs Baby Gift House (2002), the court restrained the defendant from manufacturing and selling dolls, which were look-alikes of singer Daler Mehndi, without the latter’s consent. • In Percept D’Mark (India) Pvt. Ltd vs Zaheer Khan (2006), the court held that a contract of personal service is not enforceable. Thus, a celebrity cannot be forced to continue an association with an agent/ agency if there is a loss of faith or trust. Also, an agreement in re-

straint of trade was held to be void with the courts ruling that clauses such as right of first refusal are not enforceable after the termination or conclusion of a contract. • In Titan Industries Limited vs Ramkumar Jewellers (2011), the court recognised personality rights of a celebrity and granted an injunction against misappropriation of this right. • In Arun Jaitley vs Network Solutions Private Limited, the court held that the right to use a personal name is superior to than that of the commercial right of using the trade mark and thus the entitlement to use it as a trade mark or domain name vests with the person having its personal name.


Role and Rule of Law Media & Entertainment Industry CELEBRITY MANAGEMENT

147

01. INTRODUCTION

B

rand endorsements are usually done either by ordinary people, experts in the respective field or by celebrities. A celebrity can be defined as a person, who has a prominent profile and commands a great degree of public fascination and influence in dayto-day media. The term implies great popular appeal, prominence in a particular field and easily recognisability by the general public. Celebrities enjoy a high degree of public awareness. Celebrities help to build brands by extending their personality, character, popularity and goodwill to the brands which are endorsed by them. Celebrity endorsement in India, though in the nascent stage has become a booming business and has resulted in establishment of several talent management agencies. As per industry report, talent management which includes endorsements, appearances and performances is on its way to become Rs 1,000 crore business. The leading celebrities for endorsements include well known public figures, movie stars and sports personalities, particularly cricketers. Companies hire celebrities to endorse their brands by featuring in their

promotional campaigns on print, visual and audio-visual media. The special features of the product sought to be endorsed under a brand are matched with the image of the celebrity so as to entice a consumer to select the concerned brand from among other brands available in the market. Celebrity endorsement therefore aims to increase brand popularity, strengthen brand recall and highlight the distinctiveness of the product of a particular brand in comparison to similar products of other brands available in the market. Consumers like to emulate well known personalities who use the products that they want to purchase. Celebrity endorsement provides customers with a personality to whom they can relate. The recent trend of brand endorsement includes in-film advertising wherein the producer requires artistes to garner in-film advertisements of brands, products, services and trademarks which he/she is currently endorsing and/or is associated with. This section is our attempt to summarise the various legal issues that concern the industry and the manner in which the law plays a dynamic role in protecting te rights of the various stake holders.


148

Role and Rule of Law Media & Entertainment Industry CELEBRITY MANAGEMENT

02. Celebrity Endorsements

A. Types of celebrity endorsements There are various types of celebrity endorsements including the following: (i) Testimonial: The celebrity endorses the brand based on his/ her personal experience with the brand. For instance: Malaika Arora Khan, Aishwarya Rai, Karisma Kapoor and various others have endorsed brands of soap, hair colour etc. by testifying the quality of the product as it forms a part of their respective consumption basket. (i) Endorser: The celebrity vouches for the brand by explicitly associating with the brand. For instance: Sachin Tendulkar, Shah Rukh Khan and Amitabh Bachchan have been endorsing the brands of several cars. (ii) Actor: The celebrity becomes part of the story with an implicit endorsement. For instance: Several film and television actresses have acted as housewives for advertisement campaigns of detergents. (iii) Spokesman: The celebrity is the official spokesperson for the brand, whereby he/ she is explicitly identified with the brand and is authorised to express the position of the sponsor. Some celebrities are endorsing several brands or a specific brand is endorsed by different spokespersons. For instance: Amitabh Bachhan is endorsing Parker, Hajmola, Navrattan Oil, Cadbury Dairy Milk, ICICI bank and many more brands. Deepika Padukone is endorsing brands such as Parachute, Garnier, Kellogs, HP, Lux, Coca Cola, Lifestyle, Van Heusen, Tissot, Vogue, Axis Bank etc. On the other hand, Coke has been endorsed by Hritik Roshan, Aishwarya Rai, Aamir Khan, Virendra Sehwag and many more celebrities.

B.

Nature of Celebrity Endorsement Services Celebrity Endorsement Services vary from deal to deal and is subject matter of commercial understanding between the concerned brand, talent management agency and the celebrity. However, these services generally include the following: (i) Featuring the celebrity as a model in all materials that may be created by the concerned brand to promote sale of the endorsement product(s) including but not limited to print advertisements, television commercials, cinema commercials, merchandise, radio programmes/ commercials, point of purchase (POP) materials, hoardings, labeling, packaging, internet content, mobile content (Endorsement Materials). (ii) Endorsement of products. (iii) Use of the celebrity’s nickname, name, initials, autographs, voice, signature in relation to the endorsement products. (iv) Featuring / acting / participation of the celebrity in commercials/ audio advertisements. (v) Modelling for photo shoots, stills, visuals, clippings, portraits, caricatures, silhouettes, etc. (vi) Attending/participating in trade and consumer promotional campaigns of the brand, launch conferences, press meets, publicity activities, interviews, media interactions, store promotions, retailer/ trade and consumer meets, on ground events including in-store promotions. (vii) To act as an ambassador of the brand in relation to the endorsement products.


Role and Rule of Law Media & Entertainment Industry CELEBRITY MANAGEMENT

149

03. ROLE OF TALENT MANAGEMENT AGENCIES

T

he growing complexities of the media and entertainment industry have resulted in the need to better manage celebrity rights to ensure optimum realisation of value for all stakeholders and to rule out unjust utilisation of these rights. In order to facilitate such management, the commercial rights of celebrities are assigned to talent management agencies. The talent management agencies usually acquire wide rights to manage and market the commercial rights of the celebrity, including the right to exploit or use in any form, medium or manner and mode, the celebrity’s identification such as any word, symbol(s), photographic or graphical representation, and the celebrity’s signature, statements by the celebrity or combination thereof which identify the celebrity (such as the celebrity’s name, voice, nickname, likeness and anything else that identifies the celebrity). The commercial rights granted in favour of the celebrity normally include the right to manage and market the celebrity’s endorsements, brand management, PR related activities, appearances and event related appearances and performances, including but not limited to the following: (i)

Appearance in product and/ or services endorsements, promotions and advertisements including without limitation print such as posters, labels, banners, magazines, newspapers, radio, publications, POP merchandise; television (including without limitation aired, cable and satellite television, on any and all channels, whether local, national or regional or otherwise, as well as television in closed video networks), press shoots or any other form of endorsements or advertisements, excluding mobile advertising, value added services (VAS) and internet at large;

(ii) Appearance and personal performance for public relation activities, marketing and promotional campaigns, advertisements and/ or commercials; (iii) Appearance and personal performance in speaking assignments, television shows, concerts, fashion shows, semi-

nars, live events, award ceremonies, ribbon cutting, charity events, curtain raisers, fund raisers and/ or any other event, at regional, national and international level; (iv) The celebrity’s appearance and performance as an actor in feature films, in Hindi, English or any other language (this will be applicable in cases where the celebrity is an actor); (v)

The services of the celebrity to act on television shows (including without limitation aired, cable and satellite television, on any and all channels, whether local, national or regional or otherwise) as a host or jury member or actor.

(vi) Exploitation of the commercial rights of the celebrity in any new media such as mobile advertising, VAS and internet at large. (vii) The celebrity’s appearance, performance and/ or participation in social service campaign(s) conducted in public interest. (viii) Any other kind of engagement, which gives the celebrity publicity and exposure, in the best interest of the celebrity’s image and career in the Indian entertainment industry. The primary concern for a celebrity committing to a deal are the legal intricacies involved in a contract of personal service. Courts have consistently held that a contract of personal service is not enforceable. Thus a celebrity cannot be forced to continue an association with an agent/ agency if there is a loss of faith or trust. An agreement in restraint of trade has also been held to be void with the courts ruling that clauses such as right of first refusal are not enforceable after the termination or conclusion of a contract. Similarly, issues such as incorporation of a pregnancy clause for female actors, incapacity and exclusivity clauses need to be ironed out.


150

Role and Rule of Law Media & Entertainment Industry CELEBRITY MANAGEMENT

04. NATURE OF COMMERCIAL RIGHTS OF CELEBRITIES

In this background, it is important to understand the commercial rights of a celebrity as under:

► Right to Publicity: The ‘right of publicity’ is the right of an individual

to exercise control over the commercial use of the individual’s name, image, likeness or other distinctive features that relate to an individual such as voice, signature, nickname, etc. In common law jurisdiction, unauthorised use of publicity rights falls in the realm of the tort of passing off. The right of publicity can also be referred to as personality rights. Originally, the right of publicity only protected against the unauthorised use of an individual’s name, likeness and image. However, now it has been expanded to protect all the attributes that identify a particular person.

► Image Rights: The right of publicity also gives rise to ‘image rights’

which is an individual’s proprietary right in and to the individual’s personality, giving each individual the right to prevent unauthorised use of personal attributes such as physical or stylistic characteristics, photographs and other personal representations. Image rights are still considered as a sub-category of publicity rights. An image right is a person’s right to their own persona, including the right to prevent or restrict others from using their name, likeness or logos/ slogans. It encompasses the right of an individual to control the commercial use and exploitation of his / her identity.

Scope in India: Image rights as a concept is still developing in India.

The judiciary is yet to recognise the right of publicity and the right of image as distinct legal rights. Further, there is no statute governing image or publicity rights of individuals. A beginning has been made by the Delhi High Court in ICC Development (International) Ltd. vs Arvee Enterprises1, where it observed:

“The right of publicity has evolved from the right of privacy and can be inherent only in an individual or in any Indicia of an individual’s personality like his name, personality trait, signature, voice etc. An individual may acquire the right of publicity by virtue of his association with an event, sport, movie, etc. However, that right is not inherent in the event in question, that made the individual famous, nor in the corporation that has brought about the organization of the event. Any effort to take away the right of publicity from the individuals, to the organiser/ non-human enti-

ty of the event would be violative of Articles 19 and 21 of the Constitution of India – No persona can be monopolised. The right of publicity vests in an individual and he alone is entitled to profit from it. For example, if any entity was to use Kapil Dev or Sachin Tendulkar’s name persona/ indicia in connection with the World Cup without their authorisation, they would have a valid and enforceable cause of action.”

► Right to identity: The identity of an individual refers to all distinct, recognisable elements, which make up a particular persona, including the individual’s physical appearance, image or likeness, name, voice, signature, style, photograph, gestures, recognisable attires, look and facial features. It is a right in personam, which is exercised by the individual or by a third party exercising such rights on behalf of the individual, following assignment or inheritance. It encompasses the right to initiate an action to: Prevent the wrongful appropriation of an individual’s identity for commercial purposes without his or her consent; and/or Seek compensation for such wrongful appropriation of an individual’s identity for commercial purposes without his or her consent. Unauthorised use of Amitabh Bachhan’s voice for a gutka campaign created an uproar in the film industry regarding the unauthorised commercial exploitation of personality rights. Further, Rajnikanth initiated legal action prohibiting the unauthorised use of his personality and character rights in his film, Baba.

● In Sourav Ganguly vs Tata Tea Ltd. 2

cricketer Sourav Ganguly had returned from a successful tour in England and found that Tata Tea Ltd. was promoting its tea packets by offering consumers a chance to congratulate him through a postcard which was inside each packet. The company intended to profit from his popularity and his latest success. Ganguly challenged it in the court before settling the dispute amicably.

● In the case of Titan Industries Limited vs Ramkumar Jewellers3, the Plaintiff had asked the celebrity couple, Amitabh and Jaya Bachchan, to endorse and advertise its range of diamond jewellery sold under the brand name Tanishq. The couple had assigned all the rights in

2 Suit (CS) 361 of 1997 1. 2003 (26) PTC 245 Del

3 CS(OS) 2662 of 2011


151

THE PRIMARY CONCERN FOR A CELEBRITY COMMITTING TO A DEAL ARE THE LEGAL INTRICACIES INVOLVED IN A CONTRACT OF PERSONAL SERVICE. COURTS HAVE CONSISTENTLY HELD THAT A CONTRACT OF PERSONAL SERVICE IS NOT ENFORCEABLE their personality to the Plaintiff to be used in advertisements in all media, including print and video. The Plaintiff had invested huge sums of money in the promotional campaign. The Defendant, a jeweller dealing in identical goods to those of the Plaintiff, was found to have put up a hoarding identical to the Plaintiff’s, including the same photograph of the celebrity couple displayed on the Plaintiff’s hoarding. Since the Defendant had neither sought permission from the couple to use their photograph, nor been authorised to do so by the Plaintiff, the court held it liable not only for infringement of the Plaintiff’s copyright in the advertisement, but also for misappropriation of the couple’s personality rights. The court thereby granted an interim injunction in favour of the Plaintiff while specifically recognising the couple’s rights in their personalities.

● In DM Entertainment Pvt Ltd vs Baby Gift House4, the Defend-

ant had a business of selling dolls bearing singer Daler Mehndi’s likeness and singing voice, and consequently cashed in on his popularity. Aggrieved by the Defendant’s unlawful acts, the Plaintiff filed for a permanent injunction restraining the Defendant from infringing the artiste’s right of publicity and the false endorsement leading to passing off. The use of Mehndi’s persona to capitalise on his name by using it in conjunction with a commercial product was not proper or legitimate; rather, it amounted to a clear dilution of the uniqueness of such personality and gave rise to the false belief either that the Plaintiff had granted license for such usage or that the Defendant was associated with Mehndi who allowed the Defendant to use his exclusive right to market images of the artiste. The court granted the Plaintiff a permanent injunction against the Defendant and also directed damages in favour of the Plaintiff.

► Right to Privacy: The right to privacy under Article 21 of the Con-

stitution of India protects individuals against unlawful invasion. This was illustrated in R Rajagopal vs State of Tamil Nadu5 by the Supreme Court of India on October 7, 2004, in which restrictions on the usage of a person’s biography were envisaged. The court held that a person whose privacy has been infringed by a private individual may

seek compensation through a tort action, which may be coupled with an action for defamation, breach of confidence and/or misappropriation.

► Right to Digital Media Utilisation: The recent technological developments and advancement has resulted in recognition of digital media rights of celebrities including the following:

(1) market and monetise content, products, and services principally distributed, marketed and/or sold via digital means that are created by and with (or which otherwise feature) the celebrity. (2) manage and monetise his/its product and brand endorsements in and to all digital content, digital services, digital commerce and any other digital related activities. (3) use, display, photograph, reproduce, publicly perform, transmit, broadcast, publicise, merchandise and otherwise exploit the celebrity’s name, voice, biography, photograph, actual or simulated likeness, sobriquet, signature, personal characteristics and other personal identification by means of the digital media utilisation including internet, telephone and all digital media (including, but not limited to, websites, mobile platforms, blogs, tweets, Facebook (or other social media) postings, social media accounts, internet sites, webcasts, podcasts, live chat, SMS and any other digital media platform or device).

● In the case of Arun Jaitley vs Network Solutions Private Limited6 , politician Arun Jaitley sought a permanent injunction to restrain

the Defendants from misusing the domain name, arunjaitely.com and an immediate transfer of the domain name. The Delhi High Court granted the injunction and directed the Defendants to transfer the domain name to the Plaintiff, holding that, “The right to use a personal name is superior to than that of the commercial right of using the trade mark and thus the entitlement to use it as a trade mark or domain name vests with the person having its personal name.”

4 CS(OS) 893 of 2002 5 1995 AIR 264, 1994 SCC (6) 632

6 181(2011)DLT716


152

Role and Rule of Law Media & Entertainment Industry CELEBRITY MANAGEMENT

05. LEGAL PROVISIONS FOR PROTECTION OF PERSONALITY RIGHTS

In India, the protection for personality rights of a person has been provided for in the following legislations:

Trade Marks Act, 1999. Individuals may apply for the protection of their name, likeness and nicknames, among other things with the Indian Trade Marks Registry in order to obtain statutory protection against its misuse. In the absence of statutory protection, an individual may also resort to an action for passing off in order to protect his/her publicity and image rights. However, an action for passing off requires proof of: (a) The reputation of the individual; (b) Some form of misrepresentation; and (c) Irreparable damage to the individual.

Indian Copyright Act, 1957 The Copyright Act provides protection to specific images in the form of a photograph, painting or other derivative works thereto and gives

the celebrity the right to sue for infringement in case of unauthorised usage of any such work. However, complications arising out of the issue of ownership of a specific image make it difficult for individuals to protect their likeness, name or image under copyright law. Under the Copyright Act, 1957, a painting or photograph falls within the definition of “artistic work”. As per Section 17 (a) and (c) of the Act, in case of an artistic work made in the course of author’s employment under contract-of-service or apprenticeship, the employer shall, in the absence of an agreement to the contrary, be the first owner of copyright therein. As per Section 17(b) of the Act, in the case of a photograph taken or a painting or portrait drawn for valuable consideration at the instance of any person, such person shall, in the absence of an agreement to the contrary, be the first owner of copyright therein. Normally, when a celebrity permits his photograph to be taken or painting to be drawn, the permitted usage of such photograph/painting is specified and is subject matter of agreement executed between the celebrity and the person at whose instance the photograph is taken or painting is made.


Role and Rule of Law Media & Entertainment Industry CELEBRITY MANAGEMENT

153

06. DISPUTES RELATING TO AGREEMENTS OF PERSONAL SERVICE

E

ndorsement and/or Celebrity Service Agreements are contracts of personal service. According to Section 14 (1) of the Specific Relief Act, 1963, contracts involving personal, confidential and fiduciary services are not specifically enforceable in law.

● Percept D’Mark (India) Pvt. Ltd vs Zaheer Khan & Anr

Court: Supreme Court of India Citation: Appeal (civil) 5573-5574 of 2004 Coram: H Sema and A Lakshmanan, JJ Date: March 22, 2006 Facts: Cricketer Zaheer Khan had signed a promotional agreement

with Percept D’Mark India Pvt. Ltd. in 2000 for a term of three years subject to extension of the same by mutual consent. The agreement between Zaheer Khan and Percept D’Mark also envisaged a right of first refusal in favour of Percept for extension of term of the agreement. Zaheer Khan had turned down the renewal offer proposed by Percept on the ground that he was being approached by other agencies. Percept filed for an injunction restraining Zaheer Khan from entering into any third party contracts without offering the first right of first refusal to Percept. Percept relied on clause 31(b) of the agreement which cast an obligation on Zaheer Khan to provide Percept all the terms and

conditions of any third party offer in writing and the right to match the said offer. Since the agreement between Zaheer Khan and Percept contained an arbitration clause, Percept filed an arbitration petition in the high court under Section 9 of the Arbitration and Conciliation Act, 1996, and prayed for an interim order that pending the commencement of and during the arbitration proceedings and the making of the award and implementation thereof, Zaheer Khan be restrained from entering into any agreement/arrangement or acting upon any agreement/ contract with Respondent No. 2 therein or any third party. The single judge of the high court had granted ad-interim relief and thereafter the Respondents preferred separate appeals against the ad-interim order whereby a divison bench allowed the said appeals and dismissed the arbitration petition. Percept filed two special leave petitions before the Supreme Court against the order of the division bench of the high court.

Ratio: The Apex court dismissed the appeals and observed as under: ► Firstly, grant of this injunction resulted in compelling specific perfor-

mance of a contract of personal, confidential and fiduciary service, which was barred by Clauses (b) and (d) of Section 14(1) of the Specific Relief Act, 1963.

► Secondly, it was not only barred by Clause (a) of Section 14(1) of the

Specific Relief Act, but the Court has consistently held that there shall be no specific performance of contracts for personal services.


154

Role and Rule of Law Media & Entertainment Industry CELEBRITY MANAGEMENT: chapter 6: DISPUTES RELATING TO AGREEMENTS OF PERSONAL SERVICE

► Thirdly, this amounted to granting the whole or entire relief which

► Fourthly, the single judge’s order completely overlooked the princi-

spondent No.1 from entering into negotiation or an agreement with any other party in respect of the promotion agreement without furnishing to the Petitioners a right of first refusal to match any offer received by the Respondent No.1 from a third party.

► The court further held, whereas Percept (Appellant) could be fully

Ratio: The court rejected the interim reliefs prayed for by the Petitioner on the following grounds:

might be claimed at the conclusion of trial, which was impermissible. ples of balance of convenience and irreparable injury.

compensated in monetary terms if they finally succeeded at trial, Respondent No. 1 (Zaheer Khan) could never be compensated for being forced to enter into a contract with a party he did not desire to deal with, if the trial resulted in rejection of Percept’s claim.

► Totality of the obligations between the parties gave rise to a fiduciary

relationship and the injunction would not be granted, first, because the performance of the duties imposed on the appellant could not be enforced at the instance of the defendants and, second, because enforcements of the negative covenants would be tantamount to ordering specific performance of this contract of personal services by the appellant on pain of the group remaining idle and it would be wrong to put pressure on the defendants to continue to employ in the fiduciary capacity of a manager and agent, someone in whom he had lost confidence.

► The court held that a restrictive covenant extending beyond the term of the contract is void and not enforceable. Clause 31(b) of the agreement contains a restrictive covenant in restraint of trade as it clearly restricts Respondent No.1 (Zaheer Khan) from his future liberty to deal with the persons he chooses for his endorsements, promotions, advertising or other affiliation and such a type of restriction extending beyond the tenure of the contract is clearly hit by Section 27 of the Contract Act and is void.

► The Supreme Court held “The appellant can be adequately compen-

► “Where trust and confidence have ceased to exist in a relationship,

the relationship cannot survive. The law will not enforce and compel parties to observe a relationship where the foundation upon which it exists disappears”

► “Specific performance of such a contract is prima facie barred by

clauses (a), (b) and (d) of sub-section (1) of Section 14 of the Specific Relief Act, 1963 as the contract between the parties is a contract for personal services of which specific performance cannot prima facie be granted.”

► The balance of convenience weighed against the grant of injunction because where the Petitioners could be fully compensated in monetary terms if they finally succeed in the arbitral proceedings, the Respondent No.1 would be irrevocably prejudiced by being compelled to enter into a contract with a party with whom he does not desire to deal.

► As per Section 27 of the Contract Act every agreement by which any one is restrained from exercising a lawful profession, trade of business of any kind, is to that extend void.

► The Plaintiff approached the Supreme Court in an SLP but the same was dismissed as no merits were established.

sated in terms of money if injunction is refused. Clause 31(b) contains a restrictive covenant in restraint of trade as it clearly restricts Respondent No. 1 from his future liberty to deal with the persons he chooses for his endorsements, promotions, advertising or other affiliation and such a type of restriction extending beyond the tenure of the contract is clearly hit by Section 27 of the Contract Act and is void. The said covenant, as noticed earlier, curtails the liberty of Respondent No. 1 Zaheer Khan even though the contract has been completed to accept any offer for his endorsement, promotion etc. by dealing with any person of his own.”

● Infinity Optimal Solutions Pvt. Ltd (IOS) vs Vijender Singh & Ors

● Percept Talent Management Pvt. vs Yuvraj Singh & Glo-

Facts: The Plaintiff and the Defendant No.1 (boxer Vijender Singh) had entered into a representation agreement dated September 15, 2005, through which the Defendant No. 1 had granted exclusive rights to the Plaintiff to represent him in all commercial possibilities that could emanate from such a relationship. The said agreement was for a term of 10 years and the right of termination was only with the Plaintiff. The Plaintiff via media reports learnt that the Defendant No. 1 had entered into a similar contract/agreement with Defendant No.2 and thus sought an injunction restraining Defendant No. 1 from entering into any sports management agreement/contract with Defendant No. 2 or any other third party during subsistence of his agreement/contract with the Plaintiff. The Plaintiff further prayed that in the event Defendant No. 1 had already entered into an agreement then, then the Plaintiff should be restrained from acting upon or continuing with the contract with Defendant No. 2.

bosport India.

Court: Bombay High Court Citation: 2008 (2) ARBLR 49 Bom, 2008 (2) BomCR 654 Coram: DY Chandrachud, J Date: December 7, 2007 Facts: Cricketer Yuvraj Singh (Respondent No. 1) had entered into a promotion agreement dated December 12, 2003, with the Petitioner (Percept) appointing the Petitioner as his sole and exclusive agent to manage and market the services and day to day affairs in respect of media, advertisement and related activities. The agreement was to remain in force for four years or till the conclusion of ICC World Cup 2007, whichever was later. The agreement also contained a right of first refusal in favour of Percept for extension of term of the agreement. As the Agreement contained an arbitration clause the Petitioner filed an application under Section 9 seeking an order restraining the Re-

Court: Delhi High Court Citation: IA No. 12369 of 2009 in CS(OS) 1807/2009 Coram: Shiv Narayan Dhingra, J Date: November 9, 2009

Ratio: The court dismissed the suit. It observed that: ► Where a contract between the parties is entered into for mutual prof-

its and gains and where running of contract is found disadvantageous by either of the party, it can be terminated by either party irrespective of the fact whether there is a termination clause in the contract or not. The right of termination of contract cannot be restricted only to


155

[“WHERE TRUST AND CONFIDENCE HAVE CEASED TO EXIST IN A RELATIONSHIP, THE RELATIONSHIP CANNOT SURVIVE”]

the Plaintiff. It may be that if the performance of the Defendant No.1, in the eyes of the Plaintiff fell below the mark, the contract could be terminated by the Plaintiff.

and further claimed an injunction to restrain the Respondents from participating in a show called, Bigg Boss. The trial court did not grant a favourable order to the Appellants, who filed an appeal.

► Performances of such a contract of service or management cannot be

Ratio: The high court upheld the trial court order and stated that, under Section 41(e) of the Specific Relief Act, an injunction cannot be granted to prevent the breach of a contract, the performance of which cannot be specifically enforced. The trial court had refused to grant the ad-interim relief to the Appellants on the ground that the relief sought at the interim stage was the final relief sought in the plaint. The other ground for denying the interim relief was that granting an injunction in respect of the negative covenant could amount to compelling the defendant to perform a contract of personal services which was not permissible in law. The trial court had also held that the Appellants had approached the court 40 days after the reality show had commenced and in view of the reply to the notice of the Appellants, it appeared that the Appellants had acquiesced in the Respondent No.1’s participation in the Reality Show.

specifically enforced and the only remedy is to claim damages, if it is considered that the termination of the contract by Defendant No.1 with the Plaintiff has resulted into any loss or damage to the Plaintiff.

► The contract of representation and services is based on mutual trust and

if the trust is lost between the parties, one party cannot be compelled by the court to keep the contract alive.

► The court further stated that in view of Section 27 of the Indian Con-

tract Act, the restrictions cannot be put for a player from terminating the contract of an agency of one company and giving it to some other company. Section 27 disapproves and negates the restrain or restriction on the trade and business or profession.

● TV Vision Pvt. Ltd. vs Raju Srivastava & Anr.

Conclusion

Court: Bombay High Court

Given the stakes involved for each of the stakeholders, celebrity management needs to be further streamlined. In view of the growing number of platforms for exploitation, there is a need to understand the manner in which the booming technologies/platforms function, the nature of rights which may be exploited across platforms, the value of such rights and available protection of such rights. Celebrities are becoming aware of the commercial value of their personality and therefore have started resorting to multi-fold protection of rights emerging from their personality. In the absence of a specific law, courts have repeatedly drawn from existing statutes to protect celebrity rights. This is an evolving field and the law and its interpretation needs to keep pace with rapid commercialisation of personality and development of technology.

Citation: Appeal From Order No.1168 Of 2009 Civil Application No.1449 Of 2009

Coram: Nishita Mhatre, J Date: November 27, 2009 Facts: The Appellant (TV Vision) had filed a suit in the trial court claiming that the Respondent (Raju Srivastava) had breached the contract of personal service by accepting to work on another assignment


SectorSIX

158 CHAPTER I: INTRODUCTION 159 CHAPTER II: APPLICABLE LAWS 162 CHAPTER III: BROADCAST OF LIVE EVENTS 163 CHAPTER IV: DIPSUTES RELATING TO LIVE EVENTS


Live Events

Highlights • In Event and Entertainment Management Association vs Union of India and Ors. (2011), the court held that the fixation of tariff or royalties by copyright societies is not per se arbitrary or unreasonable and any challenge could be raised before the Copyright Baord. • In IPRS vs AD Venture Communication India Private Ltd (2012), the court directed an event management company to pay Rs. 5 Lakh as damages to IPRS, a copyright society, and asked the defendant to ensure that no copyright of the IPRS is infringed in any live event organized by it.

• IMPACT OF COPYRIGHT (AMENDMENT) ACT, 2012: • Under Section 38A, a performer has been granted exclusive performer’s right and is further entitled to receive royalties in the event the performance is exploited for commercial use. • Under Section 38B, a performer is now entitled to moral rights wherein he can claim damages for any distortion, mutilation and other modification of his performance that would be prejudicial to his reputation.


158

Role and Rule of Law Media & Entertainment Industry LIVE EVENTS

01. INTRODUCTION

L

ive entertainment is a booming sector which has proved to be a significant source of revenue for the media and entertainment industry. The increasing number of live events including award shows (film/television/corporate), music concerts, beauty pageants, fashion shows, etc. have contributed to a multifold growth of this sector. The organised portion of the Indian events and activation industry was estimated at around Rs 28 billion in 2011-2012. Some of the leading event management companies in the country include Wizcraft International, Percept D’Mark, 360 Degrees, DNA Networks Private Ltd. and Only Much Louder (OML). The major revenue streams for the sector include sponsorship receipts, ticket sales, advertising revenues, and exploitation of the intellectual property rights across mediums television, music, video, internet, etc. The growth in the sector is in terms of new technology exploited, the amount invested and the sponsorship deals availed for conducting a live show which may be in the form of an indoor or outdoor show. Fac-

tors such as increased individual spending capacity and diverse finance investment avenues act as a catalyst in facilitating the growth of the activation business events in the country. With the rising number of mobile phone and internet users in the country, 3G and 4G technologies will facilitate the quick streaming of certain live shows and sports in the country. The growing digital activation has had a positive impact on the event management sector by building awareness around the event, establishing several platforms for audience interaction and promotion of the event through social media networks. There are various challenges faced by the live entertainment industry today which include the numerous permissions required at both, the municipal and state level, the number and quantum of taxes imposed, lack of adequate infrastructure and ever increasing number of competitors. Courts have stepped in to protect the rights of artistes, to resolve contractual disputes and to ensure compliance to standards of decency with regard to live events.


Role and Rule of Law Media & Entertainment Industry LIVE EVENTS

159

02. APPLICABLE LAWS

T

here are no specific statutes governing the laws related to live events. The following laws are applicable in the process of organising a live event:

COPYRIGHT ACT, 1957 AND THE COPYRIGHT (AMENDMENT) ACT, 2012: ► There is no copyright in live events per se but when the real events are resolved into material form, the product shall be entitled to copyright protection. Thus, copyright would subsist in the live event once it is recorded in any device for the purpose of exploitation.

► Section 2 (f) of the Copyright Act, 1957 defines a cinemato-

graph film as any work or visual recording and includes a sound recording accompanying such visual recording and cinematograph shall be construed as including any work produced by any process analogous to cinematography including video films;

► Section 2 (xxa) defines visual recording as a recording in any

medium, by any method including the storing of it by any electronic means, of moving images or of the representations thereof, from which they can be perceived, reproduced or communicated by any method. Therefore, once a live event is visually recorded it becomes a cinematograph film under the purview of the Copyright Act, 1957.


160

Role and Rule of Law Media & Entertainment Industry LIVE EVENTS: Chapter 2: APPLICABLE LAWS

Under Section 38 A of the Copyright (Amendment) Act, 2012, a performer has been granted exclusive performer’s right and is further entitled to receive royalties in the event the performance is exploited for commercial use. Further, the 2012 amendment to the Copyright Act, 1957 has granted a performer moral rights under Section 38 B wherein they have been given the right to claim damages in respect of any distortion, mutilation and other modification of his performance that would be prejudicial to his reputation. This provision under the Amendment Act, 2012, lays down that notwithstanding the assignment of the performer’s rights in a film, the moral right with the performer will be intact. Therefore an action under the Copyright Act, 1957, for infringement will be maintainable against the event management company/organiser for unauthorised use of copyrights in the works commercially exploited.

IMPACT OF THE COPYRIGHT (AMENDMENT) ACT, 2012 Royalties: With the amendment to Section18 and 19 of the Copy-

right Amendment Act, 2012, authors of underlying works included in a cinematograph film and sound recording not forming part of cinematograph film are entitled to receive royalty to be shared on an equal basis with the assignee of copyright for the utilisation of such work (except theatrical rights in case of cinematograph films). With respect to authors of literary and musical works this right to receive royalty is non assignable. In addition to the above, performers are entitled to a right to receive royalty in case of making of the performances for commercial use. The Copyright (Amendment) Act, 2012, casts an obligation on the person utilising the underlying works in a cinematograph film/ sound recording not forming part of the cinematograph film to pay royalties to the authors of the underlying works for every utilisation of the work (other than theatrical exhibition). Therefore the organisers of the live events would be required to pay royalties to the copyright societies in which the authors of underlying works of the cinematograph films/sound recording utilised in the live events are members. The organiser would also be required to pay royalties to the performers’ society in which the performer whose performance is utilised is a member.

TRADE MARKS ACT, 1999 The usage of any logo, trademark of any person without prior authorisation/license would amount to trademark infringement. Apart from action of trademark infringement vide Section 29 of the Trade Marks Act, 1999, against the unauthorised use of the registered trademarks, an action for passing off is also maintainable against the unauthorised user.

Category Area/Zone

Permissible Noise limit (in decibel – dB) Day (6 am to 10 pm)

Industrial Area

75

Commercial Area

65

Residential Area

55

INSTANCES:

► In February 2011, the Maharashtra Government issued strict guide-

lines to the Board of Control for Cricket in India (BCCI) to keep noise levels during the forthcoming World Cup and Indian Premier League-IV matches under check. The environment department had asked the BCCI to adhere to the Noise Pollution (Regulation and Control) Rules, 2000, according to which the use of loudspeakers after 10pm is barred. The Rules also call for maintaining a maximum decibel (dB) level of 75 dB during the day and 70 dB at night.

► Similarly the police had earlier booked the IPL management for

the use of loudspeakers and fireworks after 10 pm for four matches held in the year 2010. Cases have also been registered under the Noise Pollution Act and Environment Protection Act. In 2008, the Navi Mumbai police had taken action against the event organisers for an alleged violation of the loudspeaker deadline.

INDIAN PENAL CODE, 1860 While organising a live event, the organiser/event management company must not commit any act which is in contravention to the following provisions of the Indian Penal Code.

► Section 268 (Public nuisance): Any person, who does not act or

illegally omits something which causes any common injury, danger or annoyance to the public or the people in general (who dwell or occupy property in the vicinity) or which must necessarily cause injury, obstruction, danger or annoyance to persons who may have occasion to use any public right, would be guilty of public nuisance.

► Section 294 (Obscene acts and songs): Any person, who to the annoyance of others does any obscene act in any public place or sings, recites or utters any obscene song, ballad or words, in or near any public place, would be liable to punishment extending to three months, or with fine, or with both.

NOISE POLLUTION (REGULATION AND CONTROL) RULES, 2000

LICENSES REQUIRED FOR ORGANISING A LIVE EVENT.

Rule 5: This provision prohibits the use of loudspeakers, public ad-

► License from IPRS and PPL: The event management company/

dress system and sound producing instruments during nighttime, i.e. between 10 pm and 6am. The use of loudspeakers, etc. is prohibited in silence zones, which include areas lying within 100 meters around hospitals, educational institutions, courts, religious places, etc. Permissible decibel limits: Even when permission to use loudspeakers, etc. is granted, the organisers have to ensure that they follow the permissible noise limits:

organiser would be required to obtain requisite permissions from Indian Performing Rights Society (IPRS), Phonographic Performance Ltd. (PPL) or any other copyright society formed under the Copyright Act, 1957, for the public performance of music recordings. As the registered copyright society in respect of sound recordings PPL has the authority to administer the broadcasting/telecasting and public performance rights on behalf of a large number of important music companies in India who are its members. IPRS


161

is a society of authors, composers and publishers of various literary and musical works and claims to be administering public performance/communication to public rights in terms of Section 14(a) (iii) of the Copyright Act, 1957. Any usage of the sound recordings without obtaining a prior license from the PPL/IPRS would result in an infringement of the Copyright Act, 1957.

► License from producer: In the event of a dialogue, scene, costume or set design, etc. from a particular film being used during a live event, the organiser would need to procure prior permission from the producer of the film, who is author of the film.

► Permission from local authorities: The organisers would fur-

ther be required to seek permissions from the local authorities of the area in which the live event is proposed to be held with regard to the permission to use loud speakers, traffic police, fire department, etc. For instance, in Mumbai and Delhi, an organiser would need to get the following permissions:

The Mumbai Police prescribes the procedure for obtaining a temporary license for any programme to be performed on an open ground. In such a case an application would have to be submitted in the submitted in the Citizens Facilitation Centre, Commissioner of Police Office Compound, Crawford Market, in prescribed format, by affixing court fees stamp of Rs. 5 on it. Such an application should be submitted at least 15 days prior to the event/program along with certified copies of the following documents: 1. NOC from the landlord of the venue 2. NOC from the traffic police 3. NOC from the fire brigade 4. NOC from the electrical inspector, industry, energy and labour department 5. NOC from the health department of the local civic body 6. NOC from the collector (If there is ticket selling or charity show) 7.

NOC from the Rangabhumi Parinirikshan Mandal (stage performances scrutiny board)

8. Certificate regarding fitness of machinery (in case of amusement rides) The following licenses would be required for holding programmes in an open ground: 1. NOC (for erecting structure/stage) 2. Ticket selling license 3. Premises license 4. Performance license (Application to be made to the divisional assistant commissioner of police) 5. Loud speaker license (Application to be made to the concerned police station.) After the process of submitting the application is completed the application shall be sent to the concerned police station for enquiries. After the receipt of the enquiry report, the decision will be taken and

the applicant will be informed accordingly.

1. Delhi: The organisers would be required to obtain a performance license, from the licensing unit of the Delhi Police, as their event would fall under category of musical, dancing, dramatic, mimetic, theatrical or other performance for public amusement or any public exhibition or diversion or game or any assembly for public amusement. Earlier the organisers were supposed to obtain separate clearances from the local Police, traffic, fire, electricity and entertainment tax office, but now the licensing branch of the Delhi police has now introduced single window facility exclusively for all licensed premises (as mentioned on the website http://delhipolicelicensing.gov.in/public-amusement/performancelicense.htm) which includes ML Bhartiya Auditorium, Sri Ram Centre Auditorium, Ghalib Institute, India Habitat Centre Auditorium, etc., the organiser would have to submit all the required documents a week prior to the event. In case the event is proposed to be conducted at any other non-licensed premises which includes open grounds, road shows, exhibition grounds, etc., the organiser would have to submit the requisite documents at least 30 days prior to the event. Event and Entertainment Management Association (EEMA) is a society registered under the Societies Registration Act, 1860. It comprises members from across India who are engaged in the business of organising events, functions and entertainment shows like road shows, music concerts/shows, brand promotion, dealers meet and other social events such as marriages and get-togethers etc. Individual members of EEMA provide their services, which includes, the organisation of events, wherein they themselves are neither hosts nor guests but act merely as service providers. EEMA is a unified voice of the industry to Government, statutory bodies, taxation authorities and private licensing bodies and seeks to protect the interest of its members. Further, it lays down the professional standards of management and interface between its members and clients, vendors and artistes across the country.

Applicable Taxes: Indirect Taxes: ► Entertainment tax: being a state subject would be different for each state. It is generally levied on the entry fee (ticket) charged for such an event. The tax could range from 15 % to 50 % in various states.

► Service tax: the revenue earned from the event would be subject to service tax (@ 12.36%) eg. revenue from grant of telecast rights, sponsorship revenue, etc.

► Customs duty: such a duty shall be levied on the import of the goods/equipments for the said event.

► Value Added Tax: the provisions of VAT as levied by each state government would be applicable.

► Stamp duty: all the instruments executed while organising the

event would attract the applicable stamp duty rates as per the state stamp acts.

Direct Taxes: The following would be subject to taxes: Revenue generated from the live event The event management fee The sponsorship fee Withholding taxes on key payments, etc.


162

Role and Rule of Law Media & Entertainment Industry LIVE EVENTS

03. Broadcast Of Live Events

O

ne of the major and assured stream of revenue of the organiser/event management company is the sale of the live/delayed telecast rights of the live event. In such an event the broadcaster of the live event would be regulated by the below mentioned laws/regulations which will have to be complied with by the broadcaster. The broadcast of the live events would be regulated by:

► Cable Television Networks (Regulation) Act, 1995: the provisions of the said act would be applicable, as covered under the television sector hereinabove, as the definition of ‘programme’ under Section 2 (g) (ii) of the Cable TV Act includes any audio or visual or audio-visual live performance or presentation.

► Self Regulatory Guidelines of Indian Broadcasting Federation (IBF): The Self Regulatory Guidelines of the IBF are applicable to broadcast of live performance as the definition of “programme” (as defined in the guidelines) is inclusive of the audio or visual or audio-visual broadcast of live performance or presentation. Further the broadcasting service providers are under an obligation to ensure that the all the programmes (inclusive of live performance broadcasting) are categorized and self certified.

(The applicable guidelines have already been covered under the television sector earlier in the book.)

► Telecom Regulatory Authority of India (TRAI):

All the TRAI regulations as covered under the television sector would be applicable to the broadcast of the live event.

► The Ministry of Information and Broadcasting:

The Ministry of Information and Broadcasting vide its notice dated March 12, 2010, has issued guidelines for the grant of temporary uplinking permission for live uplink of various events from India for a short duration. The Ministry grants permission on a case to case basis as per the uplinking guidelines and after examining the details relating to the teleport service provider, digital satellite news gathering (DSNG) service provider, use of satellite, programme details (with timing and duration), uplinking and downlinking locations etc. Often the applications to the Ministry are made at a very short notice which does not give the Ministry sufficient time to process the requests and examine the issues involved at length therefore, the notice further states that, all applicants are required to submit their applications for temporary uplinking permissions to the Ministry at least 15 days prior to the dates of proposed events ortherwise the Ministry shall not entertain such application.


Role and Rule of Law Media & Entertainment Industry LIVE EVENTS

163

04. Disputes Relating To Live Events

D

isputes in relation to live events usually arise out of the nonfulfillment of any contractual obligations. The live event management companies enter into various contracts for live events including but not limited to contracts with performers and other artistes/celebrities, technicians such as set designers, sound recordists, cameramen, etc, equipment rental agreements, location hire/ rental agreements, agreements between sponsors and event managers, license agreements with copyright societies such as IPRS and PPL for permission to play music, permissions from local authorities, police etc, agreements with advertising/ promotion agencies.

Disputes over copyright license fee: ● Event and Entertainment Management Association v/s Union of India (UOI) and Ors Court: Delhi High Court Citation: WP (C) 5422/2008 and CM Appl. 10648/2010 Coram: S Muralidhar, J. Date: April 25, 2011 Facts: The Appellant, Event and Entertainment Management Associa-

tion (EEMA), a society comprising members from all over India who are engaged in the business of organising events, functions and entertainment shows, through the writ petition sought direction for the Union of India, the Ministry of Human Resource Department (HRD) to frame appropriate and objective standards towards the determination and levying of royalties of various copyrighted works administered by Phonographic Performance Limited (PPL) and the Indian Performing Right Society Limited (IPRS) or any other society that may be so created by it, and the mode of enforcing and administering such royalties when so fixed. The Appellant sought a further direction for investigation of the books of account of PPL and IPRS to ascertain whether they have paid their dues to the owners/authors of copyrights. The Appellant further contended that both the PPL and IPRS were acting arbitrarily in fixing tariffs with no objective standards and had as-

sumed the role of the legislature in fixing the amount of royalties at their sole discretion, the role of a law enforcer in enforcing the collection of such royalties and in taking coercive action against the members of the Appellant.

Ratio: The court observed, that the issue whether the copyright socie-

ties had discharged their functions in accordance with the Copyright Act, 1957, must be examined in the first instance by the central government in which adequate powers have been vested under Section 33(4) read with Section 35(3) of the Copyright Act, 1957. The Court further observed that the owners of the copyright too had adequate supervisory control over the functioning of the copyright societies of which they were members. The Court held that there was no indication that the copyright societies had not complied with the procedure laid down in the Copyright Rules in relation to the fixation of tariffs. The court further held that, “In any event, this Court is not equipped to entertain a disputed question of fact in relation to the fixation of tariffs in a writ petition under Article 226 of the Constitution. This Court is therefore not persuaded to hold that the PPL or IPRS have acted arbitrarily or unreasonably in fixing tariffs for copyrighted works.” The Court held that the fixation of Tariff or royalties by PPL and IPRSL in exercise of their powers under the Act was not per se arbitrary or unreasonable. Therefore, any challenge to an instance of tariff fixation by PPL or IPRSL could be raised before the Copyright Board. It was not that there was no remedy available to the user of the copyright who was aggrieved by the fixation of tariff by a copyright society. Thus the Court dismissed the writ petition.

● IPRS v/s AD Venture Communication India Private Ltd Court: Delhi High Court Citation: CS(OS) 2132/2010 & IA 14025/2010 (O.39 R. 1&2 CPC) Coram: VK Jain, J Date: September 25, 2012 Facts: The Petitioner, IPRS a registered copyright society, alleged that


164

Role and Rule of Law Media & Entertainment Industry LIVE EVENTS: Chapter 4: Disputes Relating To Live Events

[THE COURT HELD THAT A SOFT VIEW, WHILE AWARDING DAMAGES AGAINST A PERSON INFRINGING COPYRIGHTS OF THE OTHERS TO EARN UNLAWFUL PROFITS, BY ORGANISING LIVE EVENTS, WOULD BE WHOLLY MISPLACED AND UNCALLED FOR] the Defendant, an event management company, had organised a live musical event (Raghav Live in Concert) on August 28, 2010, wherein literary/ musical work of the plaintiff society were communicated to the public without obtaining the requisite license. The Plaintiff alleged that the defendant had got musical/ literary works belonging to the members of the Plaintiff and its sister societies performed in the live concert. The Plaintiff further contented that the Phonographic Performance Limited (PPL), which is also a copyright society, was entitled to collect license fees from the users of the song recordings, but the live performance of musical/ literary work does not involve PPL and a person singing a song recording for the purpose of public performance must take license from the Plaintiff for public performance of the musical work and license from PPL for playing song recording. Thus Plaintiff had sought an injunction restraining the Defendant from organising the events including communicating Plaintiff’s repertoire of musical works administered to the public without obtaining license from it or doing any other act infringing its copyright and further sought rendition of account and damages.

Ratio: The court observed that the Defendant had sold ticket of the event in which singer Raghav performed for Rs 500 each. Thus it observed that the Defendants had exploited the work in which copyright is held by the Plaintiff, for commercial advantage and to the detriment of the authors and composers of the works. The court further observed that, “As far as grant of damages is concerned, the live performance in an event organised on a commercial basis by selling tickets needs to be treated differently from the live performance say in a family function. A soft view, while awarding damages against a person infringing copyrights of the others to earn unlawful profits, by organising live events, would be wholly misplaced and uncalled for. If the damages awarded against such persons are token in nature and do not pinch the infringer that would only encourage the infringer to repeat such acts in future at the cost of some other copyright holder.” The court restrained the Defendant from organising any event involving live performance in respect of the lyrics, musical scores copyright

in which are held by the Plaintiff-company. The court held it be obligatory for the Defendant to ensure that no copyright of the Plaintiff is infringed in any event organised by it. The Defendant was also directed to pay Rs 5 lakh by way of punitive damages to the plaintiff. Instances that attracted obscenity provisions:

1. Lakme Fashion Week (2006): Model Carol Gracias’ wardrobe malfunction at designer Benu Sehgal’s show in 2006, followed by Gauhar Khan’s wardrobe malfunction during designer Lascelle Symons’ show, had prompted the social services branch of the Mumbai police to conduct investigations with regard to obscenity in a live event. Post investigation, the social service branch had given a clean chit and stated that the incident was an accident. Subsequently, an individual filed an application before the Metropolitan Magistrate’s court urging it to charge the models and organisers for obscenity, according to press reports. The magistrate had issued criminal proceedings, following which Ravi Krishnan, the managing director of IMG which had organised the Lakme Fashion Show in Mumbai, filed a petition in the Bombay High Court, to which the court had granted a stay. Subsequently, the court vacated the stay and directed the police to investigate the matter and file a report.

2. Akshay- Twinkle case (2009): According to press reports, a criminal complaint was filed against actor Akshay Kumar and the Lakme Fashion Week organisers for an act where Akshay’s wife, Twinkle, unbuttoned his jeans while he walked down the ramp at a live/public event.

3. IPL Obscenity (2012): The High Court of Madras ordered a notice to be issued to Indian cricket board chief, an American pop star and a number of other Bollywood stars, who performed at the IPL Opening Nite, on a petition regarding alleged “uncensored and indecent” dance programmes during the inaugural show in Chennai in April. The case is ongoing in the High Court of Madras.


165

Sectorseven

167 CHAPTER I: INTRODUCTION 168 CHAPTER II: CONSTITUTIONAL FOUNDATIONS A.

Free speech and expression

B.

Right to circulate

C.

Right of press to conduct interviews

D.

Reasonable restrictions

E.

Reporting court proceedings

F.

Reporting legislative proceedings

G.

Right to advertise

H.

Emergency and press censorship

173 CHAPTER III: OBSCENITY 175 CHAPTER IV: CONTEMPT OF COURT 177 CHAPTER V: DEFAMATION 180 CHAPTER VI: SELF REGULATORY MECHANISM


166

Role and Rule of Law Media & Entertainment Industry Films : Chapter 1 : introduction

PRINT MEDIA

Highlights • In Romesh Thappar vs The State of Madras (1950), the Supreme Court reiterated that freedom of speech and expression includes the right to propogate one’s ideas, which carries with it the right to publish, to disseminate and circulate them to any class of readers, subject of course to the imposition of reasonable restrictions. • In the case of Binod Rao vs MR Masani (1976), the court criticized pre-censorship of the press stating that dissent from the opinions and views held by the majority and criticism and disapproval of measures initiated by a party in power make for a healthy political climate, and it is not for the censor to inject into this the lifelessness of forced conformity. • In Khushwant Singh and Anr. Vs Maneka Gandhi (2001), the court while upholding the individual’s right to hold a particular view and express freely on matter of public interest, held, “There is no doubt that even what may be the private lives of public figures becomes matter of public interest.” • In RK Anand vs Registrar, Delhi High Court (2009), the court defined trial by media as the impact of television and newspaper coverage on a person’s reputation by creating a widespread perception of guilt regardless of any verdict in a court of law.

• In State of Maharashtra vs Sangharaj Damodar Rupawate and Ors (2010), the Supreme Court held that is for the state to maintain public order and books, films, etc. cannot be banned merely based on an apprehensive of violence. • In Sahara India Real Estate Corporation Ltd. And Ors. Vs Securities and Exchange Board of India and Anr., (2012), the Supreme Court refrained from laying down guidelines for the press on reporting of sub-judice matters. The court held that aggrieved parties could approach courts to seek postponement of reporting of certain phases of the trial on a case- to – case basis. • The current foreign direct investment (FDI) policy for the News Media Industry, especially Print, stands at 26 % whilst non-traditional newspapers which means newspapers and journals publishing scientific, technical, specialty journals are allowed 100% FDI. • In December 2010, the Wage Board headed by Justice G R Majithia submitted its recommendations to the Government regarding a salary hike in the print industry. With effect from October 15, 2013, the Directorate of Advertising & Visual Publicity (DAVP) hiked its rates by 19% with a retrospective effect, as an interim measure till final rates were decided upon.


Role and Rule of Law Media & Entertainment Industry PRINT

167

01. INTRODUCTION

I

ndia is among the few countries in the world where circulation of newspapers and magazines both in English and regional languages is growing. Rising population, improving literacy levels and relaxation of foreign direct investment restrictions are among the factors spurring this trend in the print industry. The print industry is estimated to be worth more than Rs 200 billion with the newspaper publishing sector being the largest revenue contributor. The last decade has not only witnessed existing newspapers starting editions in new cities but also the launch of new publications__both newspapers and magazines. But there is consensus that with growing digitisation, the print media will not exist as it always has. At 2 %, India has among the lowest internet penetration in the world compared to Hong Kong (41%) and France (35%). Yet, the shift of audience and advertisers from print to online has begun and most Indian media houses have begun to diversify in to the online space. With shrinking advertising revenue, recent trends such as paid news, where news organisations are paid for positive coverage, and private

treaties, which involves giving advertising space to a company in exchange for equity shares, have invited criticism. While the Press Council of India, a self-regulatory body for the press, set up a committee to prepare a report on paid news, the Securities and Exchange Board of India (SEBI), issued guidelines in August 2010 making it mandatory for all media companies to disclose their interests in companies about whom articles were published. The existence of a healthy print media industry, particularly a free and responsible press, is essential to the functioning of our democracy. Issues such cross media ownership, which could curb plurality of opinion in our democracy, have recently come into the spotlight. The media derives its rights from the right to freedom of speech and expression available to citizens under Article 19 (1)(a) of the Constitution. The courts have zealously guarded the rights of the media and struck down “unreasonable� restrictions imposed on it by the State. This chapter is our attempt to summarise the evolution of the law that has helped shape our vibrant print media.


168

Role and Rule of Law Media & Entertainment Industry PRINT

02. CONSTITUTIONAL FOUNDATIONS

A. Free Speech and Expression:

B. Right to Circulate

The media essentially derives its rights of freedom of speech and expression by and under Article 19(1)(a) of the Constitution of India. This Article gives citizens the right to free speech and the right to express themselves through any medium or mode of their choice. The media has the same rights to write, publish, circulate and broadcast, as that of a citizen and nothing more or less.

The Right to circulate is rooted in the right to freedom of speech and expression, simply put, the right to free speech and expression would prove to be redundant if not accompanied by the right to circulate. Therefore, the right to circulate is as essential as the right/ liberty of publication itself. Without circulation, the publication would be of little value.

● The Supreme Court in the case of MSM Sharma vs Sri Krishna

● Supreme Court in the case of Romesh Thappar vs The State

citizen running a newspaper is not entitled to the fundamental right to freedom of speech and expression and, therefore, cannot claim, as his fundamental right, the benefit of the liberty of the Press. Further, being only a right flowing from the freedom of speech and expression, the liberty of the Press in India stands on no higher footing than the freedom of speech and expression of a citizen and that no privilege attaches to the Press as such, that is to say, as distinct from the freedom of the citizen.” Therefore stating that the Press is not conferred with rights in excess of what is granted to the citizen vide the Constitution and this judgment further clarifies that only a publication run by a citizen of India would have the rights under Art. 19(1)(a).

and expression includes the right to propagate one’s ideas. Right to propagation of ideas carries with it the right to publish, to disseminate and circulate them to any class of readers, subject of course to the imposition of reasonable restrictions under Article 19 (2).

Sinha and Ors.1 on December 12, 1958, had laid down that, “A non-

● The Supreme Court had further stated in the case of S Rangarajan vs PJagjivan Ram2 that “Article 19(1)(a) guarantees to all citizens the right to freedom of speech and expression. The freedom of the expression means the right to express one’s opinion by words of mouth, writing, printing, picture or in any other manner, it would thus include the freedom of communication and the right to propagate or publish opinion. The communication of ideas could be made through any medium, newspaper, magazine or movie.”

● The word, freedom, would mean the absence of unreasonable control,

interference/restriction of any kind. Hence, the expression ‘freedom of press’ would mean the right to print and publish without any interference from the State or any public authority.

of Madras 3 on May 26, 1950, reiterated that freedom of speech

● In Bennett Coleman & Co. vs Union of India4, the Supreme Court

had held that the newspapers must be given the freedom to determine the number of pages of publication and other aspects of circulation. The case was a result of the challenge to the constitutional validity of the Newspaper (Price and Page) Act, 1956, which empowered the government to regulate the allocation of advertisements in newspapers. The court held that the regulation and restriction on advertisements imposed by the government goes against the freedom guarantees vide Art. 19(1) (a) since it would have a direct impact on circulation of the paper and thereby would impinge the freedom of speech.

● Therefore,

in view of the above, it is reasonable to state that the right to circulate would encompass a right to determine the volume of circulation along with the content and medium of circulation. Any restriction on the circulation, publication and the content must fall under the purview of reasonableness under the Art. 19(2) otherwise, the restrain will be deemed to be bad in law.

1. 1959 AIR 395, 1959 SCR Supl. (1) 806

3. 1950 AIR 124, 1950 SCR 594

2. (1989) 2 SCC 574

4. AIR 1986 Bom 32


169

C. Right of press to conduct interviews The press has the right to conduct interviews, but this right is not absolute or unrestricted, it is a right subject to the interviewee’s permission. In the case of State vs Charulata Joshi5 , the Supreme Court reiterated the restricted scope of the right. In this case, the additional session’s judge had granted the news magazine, India Today, blanket permission to interview Babloo Srivastava, who was lodged in the Tihar Jail. The court stated that an undertrial could be photographed or interviewed only if he expresses his willingness. The interview had to be regulated by the provisions contained in the jail manuals and could be published in a manner that did not impair the administration of justice.

D. Reasonable Restrictions to the Right

to Freedom of Speech and Expression

Article 19(2) provides for reasonable restrictions to the Right to Freedom of Speech and Expression. It subjects the freedom of speech and expression to the government authority to legislate on matters concerning libel, slander, defamation, contempt of court, any matter offending decency and morality or a matter which undermines the security of or tends to overthrow the State. A 1963 amendment to Article 19, listed the following grounds on which reasonable restrictions can be placed on the freedom of speech: 1. Sovereignty and integrity of India 2. Security of the State 3. Friendly relations with foreign States 4. Public order 5. Decency and morality 6. Contempt of Court 7. Defamation 8. Incitement to an offence.

● In the case of Narayan Das Indurakhya vs State of MP6

there was a challenge to an order, which empowered the government to declare any newspaper, book or printed document to be forfeited if it appeared that the publication questioned the territorial integrity of India in a manner which was or was likely to be prejudicial to the interest of the safety or security of India. The case was against a geography text book which did not mark the frontiers of India accurately. The high court had upheld the order of forfeiture passed by the state government, but the Supreme Court subsequently held that the forfeiture was vitiated since the notification of forfeiture had failed to state the grounds of the state government’s opinion and a mere reference to the statute did not fulfill the statutory requirement of setting out precise grounds for opinion. The Supreme Court emphasised that grounds must be distinguished from the opinion of the government.

● In the case of Gajanan Visheshwar Birjur vs Union of India7 ,

the Petitioner had challenged the confiscation of a book imported by him from China which contained Marxist literature. The Petitioner stated that the order of confiscation under the Customs Act, 1962, failed to state which words, signs or visible representations contained in the book were likely to incite or encourage any person to resort to violence for sabotage for the purpose of overthrowing or undermining the government. It was found that the show cause notice did not contain required particulars and further, even the final

5. (1999) 4 SCC 65 6. (1972) 3 SCC 676: 1972 SCC (Cri) 720 7. (1994) 5 SCC 550

orders of confiscation lacked the required specification. Therefore, the orders of confiscation were struck down as being violative of Article 19 (1)(a).

The Doctrine of Direct Impact: This Doctrine tests the reasonableness of a restriction and states that in seeking to regulate the press as a business under Article 19(1)(g), the State cannot impose a restriction which would have a direct impact on press freedom under Article 19(1)(a) by affecting its circulation, reducing the size of its newspapers or limiting the number of subscribers, etc. On the other hand, a law seeking to regulate the press as a business and having an indirect, incidental or remote impact on the freedom of expression, would not be struck down as being in violation of Article 19 (1)(a).

E. Reporting Court Proceedings The media has consistently played an important role by ensuring that the information relating to judicial proceedings is made available to the public in order to guide, educate and create awareness.

Responsibility of the media: The media carries the responsibility of fair reporting. While rendering this responsibility, the media is under a professional and moral obligation to ensure fair and accurate reporting of judicial proceedings and thus has to ensure that it performs its duties within the framework of the Constitution and other applicable laws such as the Indian Penal Code and norms of journalistic conduct as prescribed by the Press Council of India. Therefore, this trend calls for a balance between the constitutional guarantees of the freedom of press on one hand and the right to fair trial on the other.

Applicable laws: Bombay Judicial Proceedings (Regulation of Reports) Act, 1955 ► This Act regulates the publication of reports of judicial proceedings to prevent the publication of obscene or indecent matter and other matters, the publication of which will not be in the public interest. ► Section 3 of the Act prohibits any person from printing, publishing any indecent or obscene matter, any indecent or obscene details whether medical, surgical or physiological which would be calculated to injure the public morals. Further with respect to any matrimonial matter or any judicial proceedings in connection with the offence under Section 497 of the Indian Penal Code, 1860, any particulars other than the following, the names of the parties and the order of the court. ► The press is prohibited from revealing the identity of the victim with respect to any judicial proceedings in connection with an offence under Indian Penal Code Sections: 354 (assault or criminal force to woman with intent to outrage her modesty), 366 (kidnapping, abducting or inducing woman to compel her marriage, etc.), 366A (procuration of minor girl), 366B (importation of girl from foreign country), 376 (punishment for rape), 377 (unnatural offences) or 498 (enticing or taking away or detaining with criminal intent a married woman). Official Secrets Act, 1923 ► The Section 14 under the Official Secrets Act, 1923, provides for exclusion of public from court proceedings. The court can order that the public to be excluded from a hearing on an application made by the prosecution on the ground that the publication of any evidence to be given or of any statement to be made in the course of the proceedings would be prejudicial to the safety of the State.


170

Role and Rule of Law Media & Entertainment Industry PRINT: CHAPTER 2: CONSTITUTIONAL FOUNDATIONS

Contempt of Courts Act, 1971 Section 7 of the Act states that no person will be guilty of contempt of court for publishing a fair and accurate report of a judicial proceeding before any court sitting in the chambers or in-camera except in the following cases: a. Where the publication is contrary to the provisions of any enactment for the time being in force. b. Where the court, on grounds of public policy or in exercise of any power vested in it, expressly prohibits the publication of all information relating to the proceeding or of information of the description which is published. c.

Where the court sits in chambers or in camera for reason connected with public order or the security of the State, the publication of information relating to those proceedings,

d. Where the information relates to secret process, discovery or invention which is an issue in the proceedings.

Norms of Journalistic conduct by the Press Council of India: Part A: Principles and Ethics: The Press Council of India, a self-regulatory body of the press, has laid down certain cautions to be followed by the press: Excepting where the court sits ‘in-camera’ or directs otherwise, it is open to a newspaper to report pending judicial proceedings, in a fair, accurate and reasonable manner. But it shall not publish anything:-

- which, in its direct and immediate effect, creates a substantial risk of obstructing, impeding or prejudicing seriously the due administration of justice; or - is in the nature of a running commentary or debate, or records the paper’s own findings conjectures, reflection or comments on issues, sub judice and which may amount to arrogation to the newspaper the functions of the court; or - regarding the personal character of the accused standing trial on a charge of committing a crime. ► “Newspaper shall not as a matter of caution, publish or comment on evidence collected as a result of investigative journalism, when, after the accused is arrested and charged, the court becomes seized of the case: Nor should they reveal, comment upon or evaluate a confession allegedly made by the accused.” ► “While newspapers may, in the public interest, make reasonable criticism of a judicial act or the judgment of a court for public good; they shall not cast scurrilous aspersions on, or impute improper motives, or personal bias to the judge. Nor shall they scandalise the court or the judiciary as a whole, or make personal allegations of lack of ability or integrity against a judge.” ► “Newspaper shall, as a matter of caution, avoid unfair and unwarranted criticism which, by innuendo, attributes to a judge extraneous consideration for performing an act in due course of his/her judicial functions, even if such criticism does not strictly amount to criminal Contempt of Court.”

Important Case Laws: Sahara India Real Estate Corporation Ltd. and Ors. vs Securities and Exchange Board of India and Anr. Court: Supreme Court of India Citation: I.A. Nos. 4-5, 10, 11, 12-13, 16-17, 18, 19, 20-21, 22-23, 2425, 26-27, 30-31, 32-33, 34, 35-36, 37-38, 39-40, 41-42, 43-44, 45-46, 47-48, 49-50, 55-56, 57, 58, 59, 61 and 62 in C.A. No. 9813 of 2011 and C.A. No. 9833 of 2011 and I.A. Nos. 14 and 17 in C.A. No. 733 of 2012 Coram: SH Kapadia, DK Jain, Surinder Singh Nijjar, Ranjana Desai and Jagdish Singh Kehar, JJ

Date: September 11, 2012 Facts: In an ongoing proceeding before the Supreme Court, Sahara India

had alleged breach of confidentiality by the media. A day prior to the hearing of an interim application, a news channels had flashed on television the details of a confidential proposal, which had been communicated only to the parties. Sahara prayed that appropriate guidelines be framed with regard to reporting (in the electronic and print media) of matters, which are sub-judice, the public disclosure of documents forming part of court proceedings.

Ratio: The court observed that in the present case, the question was not regarding the misuse of powers of pre-censorship but was regarding prior restraint per se. While refraining from laying down guidelines, the court laid down the principle under which aggrieved parties can seek postponement of publication of court hearings. The court held, “Anyone, be he an accused

or an aggrieved person, who genuinely apprehends on the basis of the content of the publication and its effect, an infringement of his/ her rights under Article 21 to a fair trial and all that it comprehends, would be entitled to approach an appropriate writ court and seek an order of postponement of the offending publication/broadcast or postponement of reporting of certain phases of the trial (including identity of the victim or the witness or the complainant), and that the court may grant such preventive relief, on a balancing of the right to a fair trial and Article19(1)(a) rights, bearing in mind the abovementioned principles of necessity and proportionality and keeping in mind that such orders of postponement should be for short duration and should be applied only in cases of real and substantial risk of prejudice to the proper administration of justice or to the fairness of trial. Such neutralizing device (balancing test) would not be an unreasonable restriction and on the contrary would fall within the proper constitutional framework.”

Trial by Media:

● Trial by media has assumed significance whereby the media (broadcast

as well as print) has been accused of assuming the role of police investigations and pronouncing verdicts either by way of telecasting dramatised trials or opinion polls (by way of SMS, online votes, etc).

● The Supreme Court in RK Anand vs Registrar, Delhi High Court 1 defined the expression, trial by media as:

“The impact of television and newspaper coverage on a person’s reputa-

1. Criminal Appeal No. 1393 of 2008, 29.07.2009


171

tion by creating a widespread perception of guilt regardless of any verdict in a court of law. During high publicity court cases, the media are often accused of provoking an atmosphere of public hysteria akin to a lynch mob which not only makes a fair trial nearly impossible but means that, regardless of the result of the trial, in public perception the accused is already held guilty and would not be able to live the rest of their life without intense public scrutiny.”

● In the case of MP Lohia vs State of West Bengal2 , the Supreme

Court strongly deprecated the media for interfering with the administration of justice by publishing one-sided articles touching on merits of cases pending in the courts. Justice N Santosh Hedge had remarked, “We deprecate this practice and caution the Publisher, Editor and the journalist who are responsible for the said articles against indulging in such trial by media when the issue is sub-judice. Others concerned in journalism would take note of this displeasure expressed by us for interfering with the administration of justice.”

● In a conflict between the acussed’s right to fair trial and the media’s right to freedom of speech, the former shall prevail as any violation of the former shall defeat the very purpose of justice. Media while reporting cases shall always maintain the accuracy and fairness of facts while reporting, shall avoid invasion of the privacy rights of an individual, reports based on suspicion shall not be published, no sensational or provocatory headlines to be published, etc.

● In State of Maharashtra vs Rajendra J Gandhi3 the Supreme Court observed that, “A trial by press, electronic media or public agitation is the very antithesis of rule of law”.

2. (2005) 2 SCC 686 3. (1997) 8 SCC 386

F. Reporting legislative proceedings

case]: In the 1950s, an English daily published a deleted portion of the proceedings of the Bihar State Assembly. Subsequently, a notice for breach of privilege was issued against the editor who filed a petition in the Supreme Court such issue of notice was a breach of his right to free speech as guaranteed under Article 19(1)(a) of the Constitution of India. The Supreme Court dismissed the petition and held that such reporting of the expunged portion of a member’s speech amounted to a breach of privilege. It further held that “Legislative privileges stemmed from special constitutional laws and in the event of conflict Article 19(1)(a) would have to yield to Articles 105 and 194.”

Media’s right to report legislative proceedings is restricted by the legislative privileges, which are enjoyed by the members of both the houses of Parliament and the state assemblies. The Constitution of India confers certain privileges on the members of the Parliament and the State Legislatures in order to ensure that the discussions and debates are conducted in a free environment without fear of any legal consequences.

Applicable laws: ► Constitution of India: Article 105 and Article 194 of the Constitution details the powers, privileges, etc of the Houses of Parliament and of the members and committees and the House of Legislatures and of the members and committees respectively, which provides for the freedom of speech in the Parliament or the Legislature of each state, exempts the members from any liability in any court with respect to anything stated or any vote casted, exempts from any liability with respect to any publication by or under the authority of the Parliament of any report, paper, votes or proceedings.

The Court further held that, “The effect in law of the order of the Speaker to expunge a portion of the speech of a member might be as if that portion had not been spoken and a report of the whole speech despite the speaker’s order might be regarded as a perverted and unfaithful report and prima facie constitute a breach of the privilege of the Assembly. Whether there had in fact been a breach of the privilege of the Assembly was, however, a matter for the Assembly alone to judge.”

G. Right to Advertise:

► Parliamentary Proceedings (Protection of Publication) Act, 1977: This Act was enacted to protect the publication of reports of proceedings of Parliament and introduced the concept of qualified privileges for newspapers. Section 3 provides that no person shall be liable to any civil or criminal proceedings for publishing in a newspaper a substantially true report of any proceedings of either House of Parliament unless it is proved that such publication has been made with malice. The section further provides that such protection is only extended to those publications which have been made for public good.

An advertisement per se, is information which is communicated in the form of a social, economic or political message, with an aim to inform and convince people to do something. Advertisements shape attitude and ways of life at least as much, as other kinds of information and comment.

► Norms of Journalistic Conduct (Press Council of India- Part A: Principles and Ethics): These guidelines cast a duty on the newspapers to report the proceedings of either House of Parliament, Legislative Assembly faithfully. It provides that such faithful publication would not result in any liability (civil or criminal) unless such publications have been made with malice. The guidelines further provide that the newspapers should not publish any report based on proceedings of a sitting of either House of Parliament or Legislative Assembly or as the case may be either House of the Legislature of a State, which is not open to the media.

● Tata Press Ltd. vs Mahanagar Telephone Nigam Limited and Ors.

CASES: a. MSM Sharma vs Krishna Sinha1 [also known as the Searchlight 1. AIR 1959 SC 395

The right to advertise was recognised as a fundamental right to freedom of speech and expression only in 1995 when the Supreme Court laid down the same in its judgment Tata Press Ltd. vs Mahanagar Telephone Nigam Limited and Ors2.

Court: Supreme Court of India Citation: AIR1995SC243 Coram: Kuldip Singh, BL Hansaria and SB Majumdar, JJ Date: August 3, 1995 Facts: The question before the court was whether ‘commercial advertisements’ came within the scope of freedom of speech and expression guaran-

2. AIR1995SC243


172

Role and Rule of Law Media & Entertainment Industry PRINT: CHAPTER 2: CONSTITUTIONAL FOUNDATIONS

“UNDER THE CENSORSHIP ORDER THE CENSOR IS APPOINTED THE NURSEMAID OF DEMOCRACY AND NOT ITS GRAVE-DIGGER” teed by Article 19(1)(a).

ganda. True democracy can only thrive in a free clearing-house of competing ideologies and philosophies, political, economic and social and in this the press has an important role to play. The day this clearing-house closes down would toll the death-knell of democracy. It is not the function of the censor acting under the Censorship Order to make all newspapers and periodicals trim their sails to one wind or to tow along in a single file or to speak in chorus with one voice. It is not for him to exercise his statutory powers to force public opinion in a single mould or to turn the Press into an instrument of brain-washing the public. Under the Censorship Order the censor is appointed the nurse-maid of democracy and not its grave-digger. Dissent from the opinions and views held by the majority and criticism and disapproval of measures initiated by a party in power make for a healthy political climate, and it is not for the censor to inject into this the lifelessness of forced conformity. Merely because dissent, disapproval or criticism is expressed in strong language is no ground for banning its publication.”

Ratio: The Supreme Court held that commercial speech (advertisement) is a part of freedom of speech and expression granted under Article 19(1)(a) of the Constitution of India and the said right could not be denied on the interpretation of the India and Telegraph Rules, 1951. The court held that the “Right to freedom of speech and expression guaranteed under Article 19(1) (a) of the Constitution can only be restricted under Article 19(2). The said right cannot be denied by creating a monopoly in favour of the government or any other authority.”

H. Emergency and Press Censorship: The constitutional provision for declaration of emergency are: Article 352: National emergency is declared in times of war, external aggression or armed rebellion in the whole of India or a part of its territory.

Article 356: State emergency is declared on failure of constitutional ma-

chinery in a state.

Article 360: Financial emergency is declared if the President is satisfied

that there is an economic situation in which the financial stability or credit of India is threatened. India has witnessed declarations of national emergency in 1962, 1971 and 1975. In 1975, the Central Censorship Order (June 26, 1975) was issued under the Defence of India Act. The order required every newspaper, periodical or other document to be submitted to an authorised officer for scrutiny of any news, comment, rumor or other report relating to certain specified subjects before its publications. This order was also accompanied by ‘Guidelines for the Press in the Present Emergency’. The Constitution of India provides for the suspension of the fundamental rights, including the freedom of speech and expression and the freedom of press in times of emergency. The government introduced the Prevention of Publication of Objectionable Matter Act, 1976 which prohibited the publication of any material which was likely to bring any hatred or contempt towards the Central or State governments, defamatory to the President of India, Prime Minister, etc. This Act was repealed in April 1977 by the Janata Party government.

Case Laws: 1. In the case of Binod Rao vs MR Masani1 the censor had banned a number items from being published in the applicant’s magazine, Freedom First, and the Bombay High Court declared the following: “The press is not only an instrument of disseminating information but it is also a powerful medium of moulding public opinion by propa-

Thus the court held that the banned article was not likely to influence the conduct or attitude of the public in a manner prejudicial to internal security.

2. In the case of Brij Bhushan vs State of Delhi2 , the Supreme Court had to determine the validity of imposition of censorship on a journal before its publication and whether such action was an infringement of Article 19(1)(a) of the Constitution of India. The facts of the case were that in pursuance of East Punjab Safety Act, 1949 (section 7) the Chief Commissioner of Delhi had issued an order against the printer, publisher, editor of the weekly, Organiser. The order directed them to submit all the materials relating to communal matters, news and views about Pakistan including photographs and cartoons, etc. before publication. The court while striking down the said order observed that, “Imposition of pre-censorship of a journal is a restriction on the liberty of the press which is an essential part of the freedom of the speech and expression declared by Article 19(1)(a).” 3. In the case of Fathima Beebi vs MK Ravindranaihan3 the court laid down the three purposes for which a Censorship Order could be made namely, (1) securing the defense of India and civil defense, (2) the public safety and (3) maintenance of public order. The court further stated that whatever affects internal security must necessarily affect public safety and public order. The Censorship Order, therefore, operates for the purpose of internal security, as it does for the other purposes mentioned in the preamble. War and external aggression, threaten and jeopardise the security of the State in very much the same manner as internal disturbance, with this difference that in the case of internal disturbance, the threat and jeopardy to the security of the State can at times be immediately much graver than in the case of war or external aggression. 2. AIR 1950 SC 129

1. (1976) 78 Bom LR 125

3. (1975) Cri. LJ 1164


Role and Rule of Law Media & Entertainment Industry PRINT

173

03. OBSCENITY INTRODUCTION: The word ‘obscene’ means dealing with sexual matters in an offensive or disgusting way and ‘offensive’ has been defined as causing someone to feel upset, insulted or annoyed. Therefore, obscenity means use of obscene language or behavior. The Supreme Court in Ranjit D Udeshi vs State of Maharahtra1 defined obscenity as “the quality of being obscene which means offensive to modesty or decency; lewd, filthy and repulsive.”

electronic form. An offence under this section is punishable with imprisonment up to five years and with fine which may extend to Rs 1 lakh. A second or subsequent conviction would attract imprisonment up to ten years and also with fine which may extend to Rs 2 lakh.

4. CUSTOMS ACT 1962

RELEVANT PROVISIONS:

The Central government can prohibit the import or export of goods of any specified description for the maintenance of the security of India; the maintenance of public order and standards of decency or morality; etc.

1. INDIAN PENAL CODE:

Tests laid down by courts to prove obscenity:

Section 292: Prescribes for imprisonment up to two years and a maxi-

a) Hicklin Test:

mum of Rs 2000 for the sale of obscene book, pamphlet, paper, writing, drawing, painting, representation, figure or any other object. A book, painting, etc is deemed to be obscene if it is lascivious or appeals to the prurient interest or tends to deprave and corrupt person, who are likely to read, see or hear the matter contained or embodied in it.

The section also prohibits hire, distribution, public exhibition, circulation, possession, import, export, advertising any obscene book, pamphlet, paper, drawing, painting, representation or figure or any other obscene object. A second offence attracts a jail term of up to five years and a maximum fine of Rs 5000.

Exceptions: This section does not extend to: i) any book, pamphlet, paper, writing, drawing, painting, representation or figure the publication of which is proved to be justified as being for the public good in the interest of science, literature, art or learning or other objects of general concern, or kept for religious purposes; ii) any representation sculptured, engraved, painted or otherwise represented on or in any ancient monument or any temple, or on any car used for the conveyance of idols, or kept or used for any religious purpose.

b) Likely Audience Test:

2. CODE OF CRIMINAL PROCEDURE, 1973 Section 95: Empowers the state to declare certain publications forfeited and to issue search warrants for the same when any newspaper, book, or any document printed appears to contain any matter the publication of which is punishable under Section 124A or Section 153A or Section 153B or Section 292 or Section 293 or Section 295A of the Indian Penal Code.

The likely reader test has been recognised under section 292 (1) of the Indian Penal Code, therefore what must be considered is the impact on those who could reasonably be expected to gain access to the publication. This test is based on the target audience and not the person in whose hands the book might stray into, the Supreme Court held in Chandrakant vs State of Maharashtra3 .

c) Literary Merit and Preponderating Social Purpose:

Section 293: Any person, who sells, lets to hire, distributes, exhibits

or circulates to any person under the age of 20 years any such obscene object shall be punished with imprisonment up to three years, and with fine which may extend to Rs 2000. In the case of a second or subsequent conviction, the imprisonment may extend to seven years, and also with fine of up to Rs 5000.

This test was based on the effect of a publication on the most vulnerable members of the society, whether or not they will read it. Early in the 20th Century, several literary works were destroyed at the hands of the magistrate who felt that a certain passage in the book would arouse a ‘thought of the most impure character’ and ‘glorify a horrible tendency’. Though Hicklin’s test was buried in England with the enactment of Obscene Publications Act 1959, this test was adopted in India by the Supreme Court in Ranjit D Udeshi vs State of Maharahtra2 , where in was felt necessary by the court not to discard this test on the ground that ‘it makes the court the judge of obscenity in relation to an impugned book and lays emphasis on the potentiality of the impugned object to deprave and corrupt by immoral influences’.

In this Test, wherein obscenity and art are mixed, art must be so preponderating so as to throw obscenity into a shadow or make it trivial and insignificant that it has no effect and can be overlooked. The main crux is that obscenity without a social purpose or profit cannot have the constitutional protection of free speech, the same was observed in the case of KA Abbas vs Union of India4 .

d) Aversion Defence:

Authors and filmmakers sometimes depict nudity not with the object to arouse sexual desire but revulsion in the audience against the social evil being depicted.

In the case of Samaresh Bose vs Amal Mitra5 , which arose from a challenge to the Bengali novel, Prajapati, on the grounds of obscenity, the Supreme Court found that the use of slang or unconventional words, the emphasis on sex and description of female bodies and narrations couched in vulgar language did not themselves make the novel obscene

3. INFORMATION TECHNOLOGY ACT 2000 2. AIR 1965 SC 881

Section 67: Prohibits publishing of information which is obscene in

3. (1969) 2 SCC 289 4. (1970) 2 SCC 780

1. AIR 1965 SC 881

5. 1986 AIR 967, 1985 SCR Supl. (3) 17


Role and Rule of Law Media & Entertainment Industry PRINT: CHAPTER 3: oBSCENITY

174

although the reader would react with a sense of shock and disgust. The book would not have the effect of depraving morals or encouraging lasciviousness since the intention was to expose a certain condition of the society, wherein it was necessary to use the authors own choice of words, technique and skill.

e) Judging the work as a whole:

The Publication must be read as a whole for it to be judged, it should not be that certain offending passages be separately examined so as to state that the whole publication is grossly obscene and is likely to deprave and corrupt.

f) Opinion of literary and artistic experts:

Where the court has been given the moral right to judge and decide what is artistic and what is obscene the last resort is to turn to the Supreme Court and the evidence of men of literature or others on the question of obscenity is not relevant.

The Supreme Court held that Section 292 of the IPC constituted a reasonable restriction on the right to freedom of expression under Article 19(2) in interest of decency and morality. The court relied on Hicklin’s test and further interpreted the word obscene to mean that, which is offensive to modesty or decency; lewd, filthy and repulsive. In determining what can be classified as obscene, the court held that regard should be given to ‘our community mores and standards’ and whether the ‘material appeals to the carnal side of human nature’, or having that tendency. It was held that Section 292 embodied a reasonable restriction upon the freedom of speech and expression guaranteed by Article 19 of the constitution further, the section sought no more than promotion of public decency and morality which were the words of the clause. Books Banned in India: •

Lady Chatterley’s Lover by DH Lawrence: This book was banned in 1964. The Supreme Court held that the book held no social gain for the public which could overshadow the ‘obscene’ element. It added that, “The law seeks to protect not those who protect themselves but those whose prurient minds take delight and sexual pleasures from erotic writings”.

Satanic Verses by Salman Rushdie: This book was banned by the Indian government on October 5, 1988, under Section 11 of the Customs Act 1962.

Nehru, A Political Biography by Micheal Edwardes: This book was banned in 1972 (during Emergency), but the ban was later revoked.

Shivaji: Hindu King in Islamic India by James Laine: this book was banned by the Government of Maharashtra in 2003. The ban was struck down by the Supreme Court in 20101 .

Great Soul by Joseph Lelyveld: This book was banned in Gujarat in 2011.

Cases:

● Ranjit D Udeshi vs State of Maharashtra Court: Supreme Court of India Citation: AIR 1965 SC 881 Corum: PB Gajendragadkar, KN Wanchoo, M Hidayatullah, N Rajagopala Ayyangar and JC Shah, JJ

Date: August 19, 1964. Facts: In this case, the Appellant was one of the partners of a firm, which owned the Happy Book Stall bookstore in Bombay. He was prosecuted along with other partners under Section 292 of the Indian Penal Code 1860. The bookstore was found in possession of copies of an “obscene” book, Lady Chatterley’s Lover, and selling copies of the obscene book. Ratio: An appeal was filed before the Supreme Court against the conviction of the book seller and his partners by the Bombay High Court for being in possession of a book containing obscene material. The Supreme Court confirmed the conviction and rejected the challenge to the constitutionality of Section 292 of the IPC.

1. State of Maharashtra vs Sangharaj Damodar Rupawate and Ors (2010 (58) BLJR 958)

Important Case Laws: State of Maharashtra vs Sangharaj Damodar Rupawate and Ors Court: Supreme Court of India Citation: 2010 (58) BLJR 958 Coram: DK Jain and HL Dattu, JJ Date: July 9, 2010 Facts: The Maharashtra government banned the book, Shivaji - Hindu King in Islamic India, written by James W Laine, a US professor of religious studies, on January 15, 2004, alleging that it made derogatory and scurrilous references against Maratha warrior, Chhatrapati Shivaji, causing enmity between various communities and leading to acts of violence and disharmony.

The ban was challenged before the Bombay High Court, during the pendency of which the notification was taken back and a fresh notification was issued by the state government. The high court struck down the ban. The state government filed an appeal before the Supreme Court. Ratio: The Supreme Court upheld the Bombay High Court order and dismissed the appeal. It observed that banning the book would strike at the very root of the fundamental right of freedom of expression in a democracy. The grounds which had been mentioned in the notification had not been shown as to how the references were derogatory and scurrilous and above all even the communities who were alienated from each other or whose religious beliefs were hurt had not been named or identified. In any case it is the primary responsibility of a government to prevent mischief makers from taking the law into their own hands. It is for the state to maintain public order and the books, films, etc. cannot be banned merely based on an apprehension of clashes.


Role and Rule of Law Media & Entertainment Industry PRINT

175

04. Contempt Of Court

CONTEMPT OF COURT ACT 1971

(a) civil contempt or criminal contempt

in the administration of justice, and are genuinely exercising a right of criticism and not acting in malice or attempting to impair the administration of justice, they are immune. Justice is not cloistered virtue: she must be allowed to suffer the scrutiny and respectful even though outspoken comments of an ordinary men.”

(b) Civil contempt means wilful disobedience to any judgment, decree, direction, order, writer other process of a court or wilful breach of an undertaking given to a court.

Judiciary like any other institution is not immune from criticism. The right to criticise judgments has been upheld in many cases including Aswani Kumar Ghosh vs Arabinda Bose1 .

Section 2 of the Contempt of Court Act 1971defines Contempt of Court as:

(c) Criminal contempt” means the publication (whether by words, spoken or written, or by signs, or by visible representation, or otherwise) of any matter or the doing of any other act whatsoever which(i) Scandalises or tends to scandalise, or lowers or tends to lower the authority of, any court, or (ii) Prejudices, or interferes or tends to interfere with the due course of any judicial proceeding, or (iii) Interferes or tends to interfere with, or obstructs or tends to obstruct, the administration of justice in any other manner.

OBJECT: Contempt jurisdiction is to safeguard the interest of the public which would be adversely affected if the authority of the court is denigrated and public administration of justice is weakened. This is to bring clarity to the fact that it does not afford protection to judges personally from imputation or criticism. The court has the duty of protecting the interest of the community in the due administration of justice and, so it has been entrusted with the power to punish for contempt of court. It is the duty of the court to protect and vindicate the right of the public so as to ensure that administration of justice is not perverted or prejudiced (as held in Delhi Judicial Association vs State of Gujarat (1991) 4 SCC 406.)

RIGHT TO CRITICISM: The law of contempt requires the balancing of the two vital but often competing democratic values: 1.

The right to free speech, expression and criticism.

2.

Necessity to shield the judicial system from indignation.

In the words of Lord Atkin, “The path of criticism is a public way: the wrong headed are permitted to err therein: provided that members of the public abstain from imputing improper motives to those taking part

TEST OF EROSION OF PUBLIC CONFIDENCE: The principle test that the courts in India apply in deciding criminal contempt is the test of erosion of public confidence, they have clearly distinguished between an attack on an individual judge and contempt of court, however in DC Saxena vs Hon`ble Chief Justice of India 2 this distinction was distorted as the Supreme Court held that libel against a judge can constitute criminal contempt if the gravity of the imputation erodes the public confidence in the system. Defamatory publication concerning the judge brings the court or judges into contempt, a serious impediment to justice and an inroad on majesty of justice. Moreover in Rajendra Sail vs MP Bar Association 3 , the Supreme Court held that criticism must always be dignified and the motive must never be attributed. The judgments of the courts are public documents, they are free to be analysed and criticised upon. Before placing before the public, whether on print or electronic media, it has to be seen whether any such criticism has crossed the limit as aforesaid.

TRUTH A VALID DEFENCE Till recently, neither truth or good faith were defenses against the law of contempt in India. Herein, the Test of Erosion of Public Confidence has the effect of acting as a deterrent against genuine complaints made against the judge in his individual capacity although Article 124 (4) of the Constitution expressly provides for a removal of a judge for proved misbehaviour. No one would provide proof without risking being sent to jail for contempt of court. A 2006 amendment to the Contempt of Court Act, 1971, makes truth a valid defense to a charge of contempt of court. The standard of proof required for establishing a charge of criminal contempt is same as that for any other criminal proceeding that the prosecution has to proof beyond reasonable doubt or beyond a shadow of a doubt. 1. AIR 1953 SC 77 2. AIR1996SC2481 3. AIR 2005 SC 2473


176

Role and Rule of Law Media & Entertainment Industry PRINT: CHAPTER 4: Contempt Of Court

Important Case Laws: â—? Loknath Mishra, Nationalist Lawyers Forum and Sisir Das vs State of Orissa and Ors. Court: High Court of Orissa Citation: 88(1999) CLT 399 Coram: Arijit Pasayat and PC Naik, JJ Date: August 10, 1999 Facts: In this case, the Respondents conducted a press conference in Cuttack, where they made contemptuous statements against a judge of the Orissa High Court. The same was published in the Oriya daily, Samaj Daily. A case was filed against them by members of the Orissa High Court Bar Association. Ratio: The court held the contemnors guilty and sentenced them to un-

dergo simple imprisonment of one month and a fine of Rs 5000 each, but the court stated that if the contemnors publish an unconditional apology in the concerned newspaper within one month from the date of the judgment then they shall not be held liable. The court held that whether criticism is fair, temperate and made in good faith or whether there is something directed to the personal character of a judge, or to the impartiality of the judge or the court. A finding, one way or the other will determine whether or not the act complained of amounts to contempt. No objection can be taken to an article if it merely preaches to the court of law, the sermon of divine detachment. But when things proceed to attribute improper motives to the judges, it not only transgresses the limits of fair and bonafide criticism but has a clear tendency to affect the dignity and prestige of courts. An impression is created in the minds of the public that the judges in the highest court of the land act on extraneous consideration in deciding cases, the whole community in the administration of justice is bound to be undermined and no greater mischief than that what can possibly be imagined.

magazines, banned its circulation and ordered the media not to publish anything that would lower the authority, dignity or prestige of the members of the judiciary.

Ratio: The court held that the court exercises this power not indi-

cating to save the honour of individual judges who are attacked or scandalised but to uphold the majesty of law. In cases of contempt, the apology tendered must be genuine, honest and bonafide. Acceptance of apology is comparatively a better atonement for the respondents for the impugned act as compared to an award of punishment in the form of fine or imprisonment or both. The course of justice cannot be allowed to be deflected by succumbing to the fear of bad publicity. The press has to be reminded that the smooth functioning of the legal system is as important as freedom of press. While it is correct that a judge dispensing justice must possess impeccable integrity, at the same time no one is allowed to question his or her integrity in a casual manner and on the basis of conjectures and surmises. The Court must intervene to protect the faith of the people who have abiding interest in the administration of justice. Further the apology made has to be published appropriately. The court let off the publishers in this case after accepting an apology tendered by the publishers.

â—? In Re Arundhati Roy Court: Supreme Court of India Citation: AIR 2002 SC 1375 Coram: GB Pattanaik and RP Sethi, JJ Date: 6 March, 2003 Facts: An advocate filed a contempt petition against persons including

Court: Supreme Court of India

writer Arundhati Roy for allegedly shouting abusive slogans against the court while criticising a judgment that allowed the increase of the height of the Sardar Sarovar Dam in Gujarat. Roy published an article scandalising the judicial process. On being served a notice, the respondent filed an affidavit denying the allegations. The court prima facie found the paragraphs in the said affidavit contemptuous and initiated suo motu proceedings.

Citation: 2001 (59) DRJ 298

Ratio: The court observed that though Article 19(1) of the Indian Con-

Surya Prakash Khatri vs Madhu Trehan

Coram: Arijit Pasayat, Arun Kumar, Anil Dev Singh, DK Jain and OP Dwivedi, JJ

Date: May 28, 2001 Facts: The publishers of the magazine, Wah India, published on their website the results of a survey grading judges of the Delhi High Court. The judges were graded on various criteria including personal integrity, understanding of law and quality of judgments delivered on the basis of a survey among senior members of the Delhi Bar. The Delhi High Court passed an order, confiscating all the unsold copies of the news

stitution guarantees freedom of speech and expression but the same cannot exceed its limits specified either under law of defamation or contempt of court or other constitutional limitations under Article 19(2). The court also observed that since under Articles 129 and 215 of the Constitution the Supreme Court and the High Court are courts of record respectively, therefore they are also empowered to punish for contempt of itself, thus if a citizen of this country under the protection of Article 19(1) tries to scandalise the court or undermines the dignity of the court then the court would be entitled to exercise its power under Article 129 and 215 of the Indian Constitution. The court found the Respondent guilty for contempt of court and punished her with a simple imprisonment of one day and a fine of Rupees 2000.


Role and Rule of Law Media & Entertainment Industry PRINT

177

05. DEFAMATION

P

rotection against defamation can be termed as an extension to the right to life enshrined under the Article 21 of the Constitution of India. Right to live with honour and dignity and further to have a reputation can be construed as a facet of right to life. The right to preservation of one’s reputation is acknowledged as a right in rem, i.e. a right which stands good against the entire world. The law of defamation in one way restricts the freedom of speech and expression under Article 19, i.e. to say any person can approach the courts against another if the person is of the opinion that the other person is defaming him and hurting his reputation. With technological advancement and the increasing number of modes and mediums, has facilitated the communication of information on any subject across the print, audio, visual and virtual space at an alarming speed.

Kinds of Defamation Defamation is broadly of two kinds: slander and libel. Defamation can either be in a written form (libel) or oral (slander). Thus, any publication of a defamatory statement through pictures, writing, printing, etc. would amount to libel and any defamation done by gestures or orally, etc. would amount to slander.

Laws dealing with Defamation: Constitution of India: Article 19 (2) of the Indian Constitution lists the reasonable restrictions to the freedoms enshrined in Article 19 (1) (a). Article 19 (2) expressly states that the freedom provided in Article 19 (1) (a) shall not affect inter alia affect the decency, morality, friendly relations between countries and nothing must be allowed to be pub-

lished which may lead to contempt of court or defamation or incitement to an offence.

Indian Penal Code, 1860: The IPC codifies the general penal law of

India. As per the IPC, a person could be punished if he sells, distributes, publicly exhibits or in any manner puts into circulation, imports, exports, receives profits from any business involved in circulating, importing or exporting of any obscene or defamatory goods. Further, if a book contains any parts that intend or may cause harm to the reputation of any person, the Author of the book could be punished for defamation. Similarly, if a person sells a book, printed material with the knowledge that it contains defamatory matter, he could also be punished under the IPC.

Section 499 defines defamation as being committed through:

(i) words (spoken or intended to be read), (ii) signs, or (iii) visible representations; which are published or spoken imputation concerning any person, if the imputation is spoken or published with: (i) the intention of causing harm to the reputation of the person to whom it pertains, or (ii) knowledge or reason to believe that the imputation will harm the reputation of the person to whom it pertains will be harmed. If a person is found guilty of having committed defamation in terms of Section 499 of the IPC. The punishment is stipulated in Section 500 which is simple imprisonment for up to two years and/ or a fine.

Section 499 provides for the following three exceptions: a. Imputation of truth which for public good requires to be made or published: This exception states that it is not defamation to impute anything which is true concerning any


178

Role and Rule of Law Media & Entertainment Industry PRINT: cHAPTER 5: DEFAMATION

person, if it be for the public good that the imputation should be made or published. Whether or not it is for the public good is a question of fact.

b. Public conduct of public servants: This exception states

that it is not defamation to express in good faith any opinion whatever re¬specting the conduct of a public servant in the discharge of his public functions, or respecting his character, so far as his character appears in that conduct, and no further.

c. Conduct of any person touching any public question:

this exception states that, it is not defamation to express in good faith any opinion whatever respecting the conduct of any person touching any public question, and respecting his character, so far as his character appears in that conduct, and no further.

Law of Torts: ► The common law of torts recognizes defamation as a civil wrong and

imposes civil liability on any person who communicates a false and defamatory statement to the public. Even under torts, defamation is of two kinds, libel and slander. In order to remedy an action of defamation, an aggrieved person can file a suit for damages against the person who makes or publishes slander or libel respectively. The publication of defamatory statements may be restrained by an injunction.

► An interesting aspect of defamation as a tort is that it is only a wrong

if the defamation is of a nature which harms the reputation of a person who is alive. In most cases, this translates to saying that it is not a tort to defame a deceased person since, as a general rule, the plaintiff needs to be able to prove that the defamatory words are referred to him.

► Heir of the dead: However, this does not mean that there can be

ant need not necessarily be the defamed person himself. Thus, a director of the company, a partner of a firm etc, against which the defamatory statements are made, could be aggrieved persons and would have the locus standi to file a complaint.

Defenses to an action of Defamation: Truth: Truth is a complete defence to a civil action of libel or slan-

der. If the defamatory statement published is true, then the motive of publishing the same is of no consequence. Therefore, if a person maliciously publishes something true about another, the malicious intent will not form a ground for prosecution against the person. This truth needs to be justified in all its material aspects and therefore, whether the non-material aspect of the truth is justified or not is not relevant. In the case of a criminal prosecution for defamation, mere truth is not a defence. It needs to be proved that the publication was for public good. A defamatory sentence is always presumed to be false and the burden of proving that it is true lies on the defendant. This assumption is contrary to the other cases wherein a person who approaches the court has to bear the burden of proof and establish his case.

In the case of Mitha Rustamji vs Nusservanji Nowroji 2 it was held that all defamatory statements are presumed to be false but it’s always open to the defendants to rebut the presumption. Further in the case of Khairuddin vs Tara Singh 3 it is stated that the benefit of doubt as to the truth of the statement must be given to the plaintiff. Further, rumour is not a justification and truth in the statement needs to be justified.

Fair Comment: This is the right to express fair criticism on a subject of public interest. This policy supports the rights of the public who wish to criticise without a malicious intent and in public interest.

no cause of action if a dead person is defamed. For example, a defamatory statement negatively impacts the reputation of a deceased person’s heir, an action for defamation would be maintainable. Further, if an action for defamation is instituted, and defamation is found to have been committed, damages will be payable to the plaintiff (usually, the person defamed).

Privilege: There are certain privileges enjoyed by certain sections of the society, for example in the case of parliamentary proceedings, judicial proceedings, defence forces’ proceedings and state proceedings, wherein the communication in that particular proceeding is privileged and nothing spoken and expressed during such proceedings is deemed to be defamation.

► Pre-publication injunction: In addition to this, a person apprehensive

defaming article, then in that case, consent is the best defense and the article cannot be deemed to be defamatory.

of being defamed in a publication may seek the grant of an injunction to restrain such publication. However, pre-publication injunctions are rarely granted by Indian courts.

► Restraint in publication only in exceptional cases: Even if there is an

Consent: If the person defamed has consented to the publication of a

Defenses against defamation in cases of contempt of court: The

Contempt of Courts (Amendment) Act, 2006, added truth and good faith as valid defenses against the action of Defamation.

apprehension that content may be of a defamatory nature, it is likely that publication would not be restrained except in exceptional cases, presumably, those cases where the later payment of damages would clearly not suffice to set right the wrong done to the person defamed. In nonexceptional circumstances, Indian courts have shown a tendency to support free speech, and have not displayed a tendency to grant injunctions which would have the effect of muzzling speech on the ground of possible defamation.

Injunction: The court may grant injunction against the publication to restrain them from publishing the defamatory content. In certain cases, when there is emergency, court may prefer to grant an interim injunction, ex-parte.

► Criminal Procedure Code, 1973: Section 199 of the CrPC provides for

Damages: The court has in various cases, granted a quantum of mon-

prosecution for defamation and states that even if the libelous imputations are not made directly against a person but he has a reason to be aggrieved by them, he has the locus standi to maintain a complaint.

Therefore in the case of John Thomas vs Dr K Jagadeesan1 , it was held that words “by some aggrieved person” indicate that the complain-

1

(2001) 6 SCC

Remedies against Defamation:

ey as damages. The quantum of damages is decided based on a number of factors such as the damage caused to the reputation of a person and the circulation of the publication. Further, even mental pain or suffering is taken into consideration in order to decide the amount to be paid as damages.

2

AIR 1941 Bom 278

3

(1926) ILR Lah 49


179

Important Case Laws: ● Sahib Singh Mehra vs State of Uttar Pradesh Court: Supreme Court of India Citation: AIR1965SC1451, Coram: JR Madholkar and Raghubar Dayal, JJ. Date: January 22, 1965 Facts: A case was filed for defamation against the editor and publisher of the newspaper, Kaliyug, in Aligarh for publishing a news report, Ulta Chor Kotwal Ko Dante. The news item contained defamatory remarks against the assistant public prosecutor and others in respect of their conduct in the discharge of public functions. The public prosecutor of Aligarh filed the complaint in the Sessions Court, which convicted the Appellant under Section 500 of the IPC and his appeal in the High Court was dismissed. An SLP was filed in the Supreme Court. Ratio: The Supreme Court upheld the conviction and opined that the

impugned remarks in the news items were per se defamatory. It had not been urged as defense that the remarks were true. The defense in the courts below was that they were for public good and the appellant was protected under Exceptions 3 and 9, of Section 499 of the IPC. The court stated that the tenor of the article did not in any way indicate that the purpose of the appellant in publishing these remarks was public good. Exception 3 and 9 to section 499 IPC comes into play when some defamatory remark is made in good faith. Nothing has been brought on the record to establish that those defamatory remarks were made by the appellant after due care and attention and so, in good faith. The court further stated that the press has great power in impressing the minds of the people and it is essential that persons responsible for publishing anything in newspapers should take good care before publishing anything which tends to harm the reputation of a person.

● R Rajagopal and Anr. vs J Jayalalitha and Anr. Court: High Court of Madras Citation: AIR2006Mad312 Coram: AP Shah and Prabha Sridevan, JJ. Date: April 6, 2006 Facts: The Appellant, R Rajagopal, was the editor, printer and publish-

er of Nakkheeran, a bi-weekly magazine published from Chennai. Between April 2003 and June 2003, the Appellants published certain articles about the Respondents. The first Respondent was the chief minister of Tamil Nadu. All the 24 publications made in 21 issues of Nakkheeran were the subject matter which contained allegedly defaming material. A single judge granted a blanket injunction restraining Appellants from publishing in future, any defamatory or derogatory publications in any of their publications. Thereafter the Appellants filed an appeal. Ratio: The order of injunction passed by the single judge was vacated. The

court held that in this case there was no justification for granting blanket injunction restraining Appellants from publishing any articles in future. The court directed the Appellants that whenever they propose to publish any article purely concerning the personal life of the Respondents, the Appellants shall forward their queries and/or the gist of the proposed article, as the case may be, to the Respondents but in case there is no response to the queries within 36 hours from receiving such queries, the Appellants will be entitled to proceed to publish the proposed article.

● Khushwant Singh and Anr. vs Maneka Gandhi Court: Delhi High Court Citation: AIR 2002 DELHI 58 Coram: Devinder Gupta and Sanjay Kishan Kaul, JJ Date: September 18, 2001 Facts: Writer Khushwant Singh filed an appeal against an ex parte order

of a single judge restraining the publication of his autobiography, Truth, Love and a Little Malice. The restraining order was passed in a case filed by Maneka Gandhi, who claimed to be aggrieved by a chapter titled, Gandhis and Anands, in the book. Gandhi became aware of the broad contents of the chapter by certain publication in magazines in respect of Singh’s autobiography in October 1995. Gandhi found certain extracts in the magazine as part of the quoted book, defamatory and derogatory.

Ratio: The court allowed the appeal and set aside the injunction order. The court observed that the total matter of the book was yet to be published including the chapter in question and the interim order granted by the single judge was a pre-publication injunction. The court held, “Such pre-censorship cannot be countenanced in the scheme of our constitutional framework.” The court further observed that the right to publish and the freedom of press, as enshrined in Article 19(1)(a) of the Constitution of India was sacrosanct and this right could not be violated by an individual or the State and the only parameters of restriction were provided in Article 19(2) of the Constitution of India. The court observed that there were two competing interests to be balanced i.e., right of the author to write and publish and the right of an individual against invasion of privacy and the threat of defamation and held that the “balancing of these rights would be considered at the stage of the claim of damages for defamation rather than a preventive action for injuncting of against the publication itself.” The court observed that, “People have a right to hold a particular view and express freely on the matter of public interest. There is no doubt that even what may be the private lives of public figures becomes matter of public interest.” The court observed that the appellant (Singh) has been prevented from writing and publishing his thoughts, views, personal interaction and his perspective of life in his proposed autobiography for almost six years at this late stage of his life. “Sufficient damage has already been caused. The injunction must be vacated forthwith. The three cardinal principle of balance of convenience, prima facie case and irreparable loss and injury are not satisfied in the facts of the present case. The balance of convenience is in favor of applicant rather than a gag order.”


180

Role and Rule of Law Media & Entertainment Industry PRINT

06. SELF REGULATORY MECHANISM The Press Council of India

5 members are nominated from the two houses of Parliament

The Press Council of India is a self regulatory mechanism for the press. In a democracy, the press needs to be free to function as a watchdog of public interest and thus must work unfettered while maintaining high professional standards.

3 represent cultural, literary and legal fields as nominees of the Sahitya Academy, University Grants Commission and the Bar Council of India.

The rationale for self-regulation of the press was succinctly put by, Mahatma Gandhi: “The sole aim of journalist should be service. The newspaper press is a great power, but just as unchained torrent of water submerges the whole country side and devastates crops, even so an uncontrolled pen serves but to destroy. If the control is from without, it proves more poisonous than want of control. It can be profitable only when exercised from within.”

Complaints mechanism

The Press Council of India was first constituted on July 4, 1966, as an autonomous, statutory, quasi-judicial body. Its functions included:

► to help newspapers to maintain their independence; ► to build up a code of conduct for newspapers and journalists in accord-

Term: The members serve a term of three years.

A complaint against a newspaper for any publication the complainant finds objectionable and affecting him personally, or for non-publication of any material, should first be taken up with the editor or other representative of the publication concerned. If the complaint is not resolved satisfactorily, it may be referred the Press Council of India in writing within two months of the publication of the impugned news item in case of dailies and weeklies and four months in all other cases, along with the original/copy of the impugned clipping. A declaration regarding the non-pendency of the matter in any court of law is also necessary.

► to ensure on the part of newspapers and journalists the maintenance of

If a newspaper or journalist is aggrieved by any action of any authority that may impinge on the freedom of the press, he can also file a complaint with the Council.

► to encourage the growth of a sense of responsibility and public service

On receiving the complaint, the Council may issue a show cause notice to the respondents and then consider the matter through its Inquiry Committee.

ance with high professional standards;

high standards of public taste and foster a due sense of both the rights and responsibilities of citizenship; among all those engaged in the profession of journalism;

► to keep under review any development likely to restrict the supply and dissemination of news of public interest and importance;

► to keep under review such cases of assistance received by any newspa-

per or news agency in India from foreign sources, as are referred to it by the Central Government.

If, on inquiry, the Council has reason to believe that the respondent newspaper has violated journalistic norms, the Council keeping in view the gravity of the misconduct committed by the newspaper, warns, admonishes or censures the newspaper or disapproves of the conduct of the editor or the journalist as the case may be. It may also direct the respondent newspaper to publish the contradiction of the complainant or a gist of the Council’s decision in its forthcoming issue.

The present Council functions under the Press Council Act 1978. It is a statutory, quasi-judicial body which acts as a watchdog of the press. It adjudicates the complaints against and by the press for violation of ethics and for violation of the freedom of the press respectively.

Similarly, when the Council upholds the complaint of the aggrieved newspaper/journalist the Council directs the concerned government to take appropriate steps to redress the grievance of the complainant.

Composition:

Sectoral Caps for FDI Policy, Cross Media Ownership and TRAI

Chairman: The Press Council is headed by a chairman, who has, by convention, been a retired judge of the Supreme Court of India (except for the first chairman, Justice JR Mudholkar, who was a sitting judge of Supreme Court of India in 1968). The present chairman is Justice (retired) Markandey Katju. In addition the council has: 20 members who represent the press

FDI Policy: The current Foreign Direct Investment (FDI) policy for the News Media Industry, especially Print, stands at 26% whilst non-traditional newspapers which means newspapers and journals publishing scientific, technical, specialty journals are allowed 100% FDI. The executive committee of the Indian Newspaper Society (INS) passed a proposal to increase FDI in print media from 26 per cent to 49 per cent. The Tel-


181

ecom Regulatory Authority of India (TRAI) supported this proposal and suggested that the FDI be raised through the Foreign Investment Promotion Board (FIPB) as compared to the automatic route as suggested by the Mayaram Committee. The argument in favour of this increase in investment is based first and foremost on the fact that under the Companies Act, 2013 the shareholding requirement which allows a resolution to be vetoed is 26% and the requirement which allows a majority control is 51% hence, shifting the cap from 26% to 49% would not hamper the Government in any manner as the Indian stakeholders would still be in control of the market. This increase in FDI would however allow a foreign firm to bring in more capital without any risk of managerial and editorial control/involvement by any foreign investor. Another reason to increase the FDI in print media industry is due to the threat faced by this industry by the broadcast and digital media which is rampantly growing causing the need for the print industry to reinvent itself. The only way that this can be achieved is through FDI which will give the new and the existing news brands the appropriate access to state-of-theart technology to remain relevant across all delivery and engagement platforms, including the internet, mobile, tablets etc. For News media brands to survive and grow, it is important that they are adequately invested into and engage with readers and users across multiple platforms meaningfully.

Cross Media Ownership and TRAI: India is a developing market for almost all industries and the news industry is no exception to it. Hence, taking the present market into account when the much debated issue of cross media ownership is brought up there is a fear of monopolies and cartels forming especially in a horizontal crossmedia ownership scenario. This means that two competing newspapers or news channels could form an alliance to form a mechanism to share or filter data or anything else that could lead to unfair competition to other players in the market. The TRAI was approached to provide recommendations on the concept of cross-related ownership and it’s feasibility. The TRAI recommended that for print, only daily newspapers, inclusive of business and financial newspapers, should be considered. With respect to the fear of monopolization, TRAI recommended that the market be defined linguistically and across States based on the language spoken by the majority. This will automatically prevent the formation of monopolies because the print market consists of a large number of newspapers, news channels and news digital platforms which are multilingual, heterogeneous and all of which are growing. It expressed the view that cross-media ownership would in fact open the market to healthy competition and that the Government should not be curbing this kind of consolidation. The only way the Government can really contribute is to allow unfettered growth of the media and allow the media companies to take all economic decisions of horizontal or vertical integration themselves. TRAI also provided a few other recommendations on

► The definition of ownership and voting rights and the relation between them

► The method used to establish a dominant media firm in the market and

the steps that the firm should take to prevent the forming of a monopoly

► What time period should the cross-media ownership rules be monitored and if need be, reframed

However, this attempt by TRAI to include the Print media in its recommendations through its consultation paper has been frowned upon by some who are of the view that the TRAI lacks the requisite jurisdiction and power to make recommendations on any matter relating to the Print media.

Wage Board The Wage Board has the job of deciding on wages of employees in both the public and private sectors in an attempt to protect them from exploitation. In December 2010, the Wage Board headed by Justice G R Majithia submitted its recommendations to the Government regarding a salary hike in the print industry. As per the report, the board recommended 35% variable pay for journalists and non-journalists working within the top 4 categories of newspapers and a 20% increase for others falling outside the top 4 categories, effective from July 1, 2010. They also provided recommendations regarding the retirement age and cost of living index in dearness allowance. The Union Cabinet approved the recommendations given by the Wage Board. However, these recommendations were challenged by various newspaper owners amongst other institutions like Bennett, Coleman and Co. Ltd, ABP Pvt. Ltd. and the Indian Newspaper Society (INS) in November 2011. The INS in its report expressed the opinion that there was no requirement for a Wage Board whether statutory or otherwise to set wage rates for workers in any Industry. Furthermore, they held that given that there was no other industry with a statutory wage board, it was unfair to have one for the Print industry alone. However, despite this resistance, the Supreme Court accepted the recommendations and held that all newspaper agencies and institutions had to pay their arrears from November 2011 when the Government had been notified of these recommendations. The payment had to be made according to the current wage rate in four installments within one year and then they must continue to pay the revised wages from April 2014 onwards.

DAVP RATE The Directorate of Advertising & Visual Publicity (DAVP) is the nodal agency to undertake multi-media advertising and publicity for various Ministries and Departments of Government of India. Some of the Autonomous Bodies also route their advertisements through DAVP. As a service agency, it endeavours to communicate at grass roots level on behalf of various Central Government Ministries. The DAVP had been in the process of re-evaluating its advertisement tariffs for newspapers and publications within the Print Industry. This re-evaluation was met with a lot of positivity as it was in dire need of a boost due to the heavy competition it has been facing from the electronic and digital industry, which is the more prominent and more easily accessible platform for all information. The Print Industry has been known to rely heavily on advertisements in its newspapers and publications to draw in revenue but this too has been adversely affected by the digital and internet industry furthering the need for an increase in the DAVP tariff. With effect from October 15, 2013, the DAVP hiked its rates by 19% with a retrospective effect, as an interim measure till final rates were decided upon. The previously highly subsidized DAVP tariff had adversely impacted the economic viability of newspapers, especially in an age of escalating costs. This could have resulted in closure of many small and medium publications, which rely on advertisement revenue that in turn could affect the plurality of ownership in the print media industry. Hence, this 19% increase was welcomed though there is lobbying still going on for a 100% increase in the DAVP advertising tariffs. There have been recommendations from prime figures within the Print Industry that a more careful look should be taken at the formula used for determining the DAVP rate by the Rate Structure Committee. It is held that the current one is held to be too narrow and will still be resulting in losses for some newspapers and publications within the Industry. Factors like the hike in wages within this industry by the Wage Board, expenditure on printing equipment and rising publication costs should all be taken into account when deciding on a final figure.


FOREIGN INVESTMENT


183

FOREIGN INVESTMENT AND THE INDIAN MEDIA AND ENTERTAINMENT INDUSTRY

A. INBOUND INVESTMENTS: The Indian entertainment and media industry is estimated to grow from Rs 646 billion in 2010, at a compounded annual growth rate of 13.2% to reach Rs 1199 billion in 2015. Hence, the industry has witnessed a lot of action whether by way of dominant foreign players entering the Indian media space or vice versa. Set out below, is a prĂŠcis of the sectoral restrictions for foreign investment in the industry.

INBOUND INVESTMENTS: The present Indian foreign exchange regime prohibits foreign investments in only a few activities/sectors and thus, by and large freely permits foreign investments (whether through prior approval of the Indian government or automatically) in most areas. Accordingly, it is open to a foreign entity to enter India either by tying up with an already established Indian player or incorporating its Indian wholly owned subsidiary subject to the regulatory framework. While

sectoral caps have been provided for investment in certain activities/ sectors, appropriate inbuilt safeguards can be stipulated in the transaction documents (such as a shareholders’ agreement), which affords investment protection and governance rights to foreign investors. These safeguards can allay the fears of foreign investors, who hold fewer shares than their Indian counterparts, so as to have the ability to steer the Indian company on the path they would like it to take in order to generate maximum revenue for the company and increase its valuation.

Entry routes: The Indian policy making body has permitted foreign investments in an Indian company either after obtaining approval from the Indian Foreign Investment Promotion Board (approval route) or freely (automatic route). As a thumb rule, unless and until, sectoral restrictions/caps have been provided by the Indian foreign exchange regulators, 100% foreign investment can be made in an Indian entity under the automatic route such as the Indian media and entertainment industry which includes production houses, animation studios, etc. In all cases, certain procedural compliances need to be met such as the valuation at which the shares of the Indian company can be transferred/issued need to be met.


184

Role and Rule of Law Media & Entertainment Industry FOREIGN INVESTMENT AND THE INDIAN MEDIA AND ENTERTAINMENT INDUSTRY

Raising overseas capital: Indian media companies can raise over-

seas funds by way of equity, debt or a mixture of both. Capital by way of equity entails issuing equity shares, compulsorily convertible preference shares and debentures, American Deposit Receipts (ADRs) and Global Depository Receipts (GDRs) to foreign entities.

nance, operation or any other services prior to their deployment. The security clearance shall be required to be obtained every two years. Permission vis-a-vis security clearance

Raising of overseas capital by way of debt entails issuing optionally convertible debenture/ preference shares, external commercial borrowings (to take advantage of lower interest rates) and issuing Foreign Currency Convertible Bonds (FCCBs) to foreign entities.

1. The permission shall be subject to permission holder/licensee remaining security cleared throughout the currency of permission. In case the security clearance is withdrawn the permission granted is liable to be terminated forthwith.

Foreign investment caps in various sectors:

2. In the event of security clearance of any of the persons associated with the permission holder/licensee or foreign personnel is denied or withdrawn for any reasons whatsoever, the permission holder/licensee will ensure that the concerned person resigns or his services terminated forthwith after receiving such directives from the Indian government, failing which the permission/license granted shall be revoked and the company shall be disqualified to hold any such permission/license in future for a period or five years.

I. Broadcasting Sector a. Broadcasting Carriage Services A sectoral cap of 74% is applicable for teleports (setting up of up-linking HUBs/teleports); direct-to home (DTH); cable networks (multi system operators - MSOs) operating at national or state or district level and undertaking upgradation of networks towards digitisation and addressability; mobile TV; Headend In The Sky (HITS) broadcasting service. Out of this limit, 49% comes under the Automatic Route and foreign investments beyond 49% and up to 74% comes under the Approval Route. Under the Automatic Route, foreign investment up to 49% is available for Cable Networks (other MSOs not undertaking upgradation of networks towards digitalisation and addressability and local cable operators (LCOs)). Foreign investment in the broadcasting carriage services will be subject to the following security conditions/terms: Mandatory requirement for key executives of the company 1. The majority of directors on the board of the Indian company shall be Indian citizens. 2.

The chief executive officer (CEO), chief officer in-charge of technical network operations and chief security officer (CSO) should be resident Indian citizens.

Security clearance of personnel 1. The company, all directors on the board of directors and such key executives like the managing director/CEO, chief financial officer (CFO), CSO, chief technical officer (CTO), chief operating officer (COO), shareholders who individually hold 10% or more paid-up capital in the company and any other category, as may be specified by the Ministry of Information and Broadcasting (MIB) from time to time, shall require to be security cleared.

For appointment of directors on the board of the company and such key executives like managing director/CEO, CFO, CSO, CTO, COO, etc. prior permission of the MIB shall have to be obtained. It shall be obligatory on the part of the Indian company to also take prior permission from the MIB before effecting any change in the board of directors.

2.

The Indian company shall be required to obtain security clearance of all foreign personnel likely to be deployed for more that 60 days in a year by way of appointment, contract, and consultancy or in any other capacity for installation, mainte-

Infrastructure/Network/Software related requirement 1. The officers/officials of the licensee companies dealing with the lawful interception of services will be resident Indian citizens. 2. Details of infrastructure/network diagram (technical details of the network) could be provided, on a need basis only, to equipment suppliers/manufactures and the affiliate of the licensee company. Clearance from the licensor would be required if such information is to be provided to anybody else. 3.

The company shall not transfer the subscribers’ databases to any person/place outside India unless permitted by relevant law.

4. The company must provide traceable identity of their subscribers. Monitoring, Inspection and Submission of Information 1. The company should ensure that necessary provision (hardware/software) is available in their equipment for doing the lawful interception and monitoring from a centralised location as an when required by the Indian government. 2. The company, at its own cost, shall, on demand by the government or its authorised representative, provide the necessary equipment, services and facilities at designated place(s) for continuous monitoring or the broadcasting service by or under supervision of the Indian government or its authorised representative. 3. The Government of India, MIB or its authorised representative shall have the right to inspect the broadcasting facilities. No prior permission/intimation shall be required to exercise the right of government or its authorised representative to carry out the inspection. The company will, if required by the Indian government or its authorised representative, provide necessary facilities for continuous monitoring for any particular aspect of the company’s activities and operations. Continuous monitoring, however, will be confined only to security related aspects, including screening of objectionable content. 4. The inspection will ordinarily be carried out by the Government of India, MIB or its authorised representative after rea-


185

sonable notice, except in circumstances where giving such a notice will defeat the very purpose of the inspection. 5. The company shall submit such information with respect to its services as may be required by the Indian Government or its authorised representative, in the format as may be required, from time to time. 6. The permission holder/licensee shall be liable to furnish the Government of India or its authorised representative or Telecom Regulatory Authority of India (TRAI) or its authorised representative, such reports, accounts, estimates, returns or such other relevant information and at such periodic intervals or such times as may be required. 7. The service providers should familiarise/train designated officials or the Indian government or officials of TRAI or its authorised representative(s) in respect of relevant operations/ features of their systems. National Security conditions 1. It shall be open to the licensor to restrict the licensee company from operating in any sensitive area from the national security angle. The government and MIB shall have the right to temporally suspend the permission of the permission holder/licensee in public interest or for national security for such period or periods as it may direct. The company shall immediately comply with any directives issued in this regard failing which the permission issued shall be revoked and the company disqualified to hold any such permission in further for a period or five years. 2. The company shall not import or utilise any equipment, which are identified as unlawful and/or render network security vulnerable. Other conditions 1.

Licensor reserves the right to modify these conditions or incorporate new conditions considered necessary in the interest of national security and public interest or for proper provision of broadcasting services.

2. Licensee will ensure that broadcasting service installation carried out by it should not become a safety hazard and is not in contravention of any statute, rule or regulation and public policy.

b. Broadcasting Content Services FM radio Under the Approval Route, foreign investment up to 26% is available for terrestrial broadcasting (FM radio). This is further subject to such terms and conditions as specified from time to time by the Ministry of Information and Broadcasting (MIB) for grant of permission for setting up of FM radio stations. News and current affairs TV channels Under the Approval Route, foreign investment up to 26% is available for up-linking of news and current affairs TV channels. Non-news and current affairs TV channels Under the Approval Route, foreign investment up to 100% is available for up-linking of non-news and current affairs TV channels/down-link-

ing of TV channels.

Additional conditions applicable with respect to foreign investment in broadcasting carriage and content services ► Foreign Direct Investment (FDI) for up-linking/down-linking TV channels will be subject to compliance with the relevant Up-linking/Downlinking Policy notified by the MIB from time to time. ► Foreign investments in all the aforestated services will be subject to relevant regulations and such terms and conditions, as may be specified from time to time, by the MIB. ► The foreign investment limit in companies engaged in the aforestated activities shall include, in addition to FDI, investment by Foreign Institutional Investors (FIIs), Non-Resident Indians (NRIs), FCCBs, ADRs, GDRs and convertible preference shares held by foreign entities.

II. Print Media a. Newspapers and periodicals dealing with news and current affairs: Under the Approval Route, foreign investment up to 26% is available for publishing of newspapers and periodicals dealing with news and current affairs. For the purpose of computation, of the said 26%, FDI and investments by foreign institutional investors, non resident Indians, persons of Indian origin shall be taken into account.

b. Indian editions of foreign magazines dealing with news and current affairs Under the Approval Route, foreign investment up to 26% is available for publication of Indian editions of foreign magazines (which is a periodical publication, brought out on non-daily basis, containing public news or comments on public news) dealing with news and current affairs. For the purpose of computation of the said 26%, FDI and investments by foreign institutional investors, non resident Indians, persons of Indian origin shall be taken into account. The foreign investment would also be subject to the Guidelines for publication of Indian editions of foreign magazines dealing with news and current affairs issued by MIB.

c. Scientific and technical magazines Under the Approval Route, foreign investment up to 100% is available for publishing/printing of scientific and technical magazines/ specialty journals/ periodicals, subject to compliance with the legal framework as applicable and guidelines issued in this regard from time to time by MIB.

d. Facsimile edition of foreign newspapers Under the Approval Route, foreign investment up to 100% is available for publication of facsimile edition of foreign newspapers. This foreign investment is subject to the condition that FDI should be made by the owner of the original foreign newspapers whose facsimile edition is proposed to be brought out in India. Additionally, publication of facsimile edition of foreign newspapers can be undertaken only by an entity incorporated or registered in India under the provisions of the Indian company law. Last but not the least, publication of facsimile edition of foreign newspaper would also be subject to the guidelines for publication of newspapers and periodicals dealing with news and current affairs and publication of facsimile edition of foreign newspapers issued by MIB, as amended from time to time.


186

Role and Rule of Law Media & Entertainment Industry FOREIGN INVESTMENT AND THE INDIAN MEDIA AND ENTERTAINMENT INDUSTRY

TABLE of Foreign Investment caps:

SECTOR/ACTIVITY

% OF FDI CAP/ EQUITY

ENTRY ROUTE

I. Broadcasting a. Broadcasting Carriage Services 1. Teleports (setting up of HUBs/Teleports) 2. Direct to Home (DTH) 3. Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalisation and addressability).

Automatic up to 49% 74%

Government approval route beyond 49% and up to 74%

49%

Automatic

Terrestrial Broadcasting FM (FM Radio), subject to such terms and conditions, as specified from time to time, by Ministry of Information & Broadcasting, for grant of permission for setting up of FM radio stations

26%

Government approval

Up-linking of ‘News & Current Affairs’ TV Channels

26%

Government approval

Up-linking of Non-’News & Current Affairs’ TV Channels/ Down-linking of TV Channels

100%

Government approval

26% (FDI and investment by

Government approval

4. Mobile TV. 5. Headend in the Sky (HITS) Broadcasting Service

Cable Networks (Other MSOs not undertaking upgradation of networks towards digitalisation and addressability and Local Cable Operators (LCOs))

b. Broadcasting Content Services

II. Print Media

Publishing of newspaper and periodicals dealing with news and current affairs

NRIs/PIOs/FII) 26% (FDI and investment by NRIs/ PIOs/FII)

Government approval

Publishing/printing of scientific and technical magazines/specialty journals/ periodicals, subject to compliance with the legal framework as applicable and guidelines issued in this regard from time to time by Ministry of Information and Broadcasting.

100%

Government approval

Publication of facsimile edition of foreign newspapers

100%

Government approval

Publication of Indian editions of foreign magazines dealing with news and current affairs


187

IT SHALL BE OPEN TO THE LICENSOR TO RESTRICT THE LICENSEE COMPANY FROM OPERATING IN ANY SENSITIVE AREA FROM THE NATIONAL SECURITY ANGLEÂ

B. OUTBOUND INVESTMENTS Recent trends in the Indian media reflect a growing willingness of Indian entities to tap the lucrative overseas media market, especially with respect to countries which have a large Indian expatriate population. It thus becomes pertinent to understand the Indian foreign exchange regimes for overseas investments. Just as in the case of inbound foreign investments, outbound foreign investments fall in two categories viz. the automatic route and the approval route. Under the existing foreign exchange regime, an Indian entity is permitted to invest, subject to certain terms and conditions, 400% of the net worth (paid up capital and free reserves - Quantum) in a joint venture or a wholly owned subsidiary outside India. The total financial commitment (TFC) of the Indian party, in all the joint ventures (JV)/ wholly owned subsidiaries (WOS) put together, shall not exceed the Quantum. For the purpose of determining TFC, the following are taken into account: 100% of the amount of equity shares, 100% of the amount of compulsorily and mandatorily convertible preference shares, 100% of the amount of other preference shares, 100% of the amount of loan, 100% of the amount of guarantee (other than performance guarantee) issued by the Indian party, 100% of the amount of bank guarantee issued by a resident bank on behalf of joint venture or wholly owned subsidiary of the Indian party provided the bank guarantee is backed by a counter guarantee/ collateral by the Indian party 50% of the amount of performance guarantee issued by the Indian party.

Also, in order to assist the JV/WOS to come up on its feet, by way of a financial assistance, the Indian party/entity may extend loan/ guarantee to such entities. Moreover, Indian entities may, subject to certain terms and conditions, offer any form of guarantee - corporate or personal (including the personal guarantee by the indirect resident individual promoters of the Indian party)/ primary or collateral/ guarantee by the promoter company / guarantee by group company, sister concern or associate company in India. To summarise the second part of this chapter, as overseas acquisitions opens up transfer of technology and skill, sharing of results of research and development, access to wider global market and promotion of brand image, it is only logical to suggest that the Indian media is on its way to a global shopping spree to meet the ever growing need and desire of the burgeoning Indian middle class.

C. CROSS MEDIA OWNERSHIP Cross media ownership in India has recently come under scrutiny. Media products not only create awareness but also compete to influence readers and viewers. Thus if television, newspapers, radio channels and cable distribution services are owned by the same person or company, it could lead to a suppression of plurality of opinion. Unlike the developed economies, which have curbed cross media ownership, the Indian media sector in this regard is unregulated to a great extent. The absence of regulations on cross media ownership could curb competition as there will be no scope for small distributors and broadcasters to operate in a market dominated by a few entities, which could impose unfair or discriminatory prices and limit the entry of others in the market.


conclusion


Role and Rule of Law Media & Entertainment Industry

T

oday, India can boast of having one of the most successful markets in the global media and entertainment space. The Indian media and entertainment industry has crossed the threshold of being an “emerging” industry to establish itself as an “emerged” one.

The entertainment industry is not just confined to films but comprises sectors such as television, radio, internet, sports, celebrity management, live events, gaming and so on. The last decade has seen a significant collaboration between the entertainment industry and the corporate world. This amalgamation with a balanced approach has yielded economic value for all shareholders. This transformation of domestic studios from one-man production houses to corporate entities and the existence of international studios is a clear indication of how the international entertainment industry wants to participate in India. Indian cinema has travelled to all parts of the world and monetisaton of creative work is not confined only to India. Indian entertainment companies will continue to access foreign capital markets, foreign investment in the sector will continue to increase, structured funding and private equity participation will go a long way in the evolution in the entertainment sector. Some of the key factors that have contributed to the growth and development of this industry include liberalization of the entertainment tax policy; greater awareness of intellectual property rights; active role of the judiciary in protecting and enforcing intellectual property rights and discouraging frivolous malafide and blackmail action; role of quasi-judicial bodies and tribunals such as Competition Commission of India in combating anti-competitive and unfair trade practices, role of TDSAT in interpreting the law and resolving disputes; evolution of the film certification board from the “Censor Board” to the “Central Board for Film Certification” and its role in maintaining a fair balance between compliance with guidelines for film certification and the fundamental right of speech and expression; development of technology convergence and digitisation.

189

For the overseas investors, India is too big and attractive a market to ignore. The potential of the Indian market makes it a ‘must go market’. The future of the media and entertainment industry envisages foreign direct investment to grow in the entertainment sector and more Indian entertainment companies are likely to be listed on capital markets outside India. There is a significant increase expected in cross-over and international co-productions with the entry of foreign studios in India. With the growth in technology, exploitation of commercial rights will become more complex and give rise to disputes relating to overlap of rights. The key to curtail such disputes is to better understand the manner in which the booming technology and platforms function, the nature and value of rights and the available protection of such rights. It is also important to have effective documentation in relation to the grant of rights and to move on from the negligent “chalta hai” attitude. It would also be useful to constitute a statutory body to maintain an inventory of lineage of commercial rights. In the coming years, studios and production houses will create a greater inventory of rights. Indian talent will derive better value for themselves if they manage their affairs to ensure protection of their rights in all forums globally. It is important to provide incentives to the industry by introducing tax benefits and rebates and implementing a uniform tax regime. The mantra to curb piracy is prosecution of offenders to ensure effective deterrence. This book is an attempt to highlight the evolution of law in media and entertainment industry to illustrate how awareness of intellectual property rights and other laws will continue to contribute to the development of this industry. The success story of this industry would also now largely depend on how well legal affairs are managed to maximize commercial value. In any of these, the fundamental principle of relationship and trust can never be compromised. This industry has always believed in relationships and will continue to do so. Legal advice and documentation needs to keep this factor in mind.


annexures


Annexure 1 Films i. Central List: 1. Copyright Act, 1957 2. Copyright Rules, 1958

28. Constitution of India, 1949 29. The Emblems and Names (Prevention of Improper Use) Act, 1950

Role and Rule of Law Media & Entertainment Industry

191

6. Bihar Entertainments Duty, Court fees and Stamp (Surcharge Entertainment Amendment) Act 1948 7. Delhi Entertainments and Betting Tax Act, 1996

3. The Trademarks Act, 1999

30. Prevention of Insults to National Honour Act, 1971

4. Trademark Rules, 2001

31. Flag Code Of India, 2002

5. Patents Act, 1970

32. Specific Relief Act, 1963

6. Designs Act, 2000

33. Indian Penal Code, 1860

7. The Cinematograph Act, 1952

34. The Code of Criminal Procedure, 1973

8. The Cable Television Networks (Regulation) Act, 1995

35. Indian Evidence Act, 1872

12. Himachal Pradesh Cinema (Regulation) Act, 1979

36. Civil Procedure Code, 1908

13. Haryana Cinema (Regulation) Act 1952

37. Indecent Representation of Women (Prohibition) Act of 1986

14. Karnataka Cinema Regulation Act 1971

9. The Cable Television Networks Rules, 1994 10. The Dramatic Performances Act, 1876 (Section 1 and 7) 11. The Cinematograph (Certification) Rules, 1983 12. Guide Lines for Certification of Films for Public Exhibition 13. The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981 14. The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Rules, 1984 15. The Cine-Workers Welfare Cess Act, 1981 16. The Cine-workers Welfare Cess Rules, 1984 17. The Cine-Workers Welfare Fund Act, 1981 18. The Cine-Workers Welfare Fund Rules, 1984 19. Income Tax Act, 1961 20. Income Tax Rules, 1962 21. Service Tax (Chapter V of the Finance Act, 1994)

38. The Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003

8. Gujarat Cinema (Regulation) Act, 2004 9. Gujarat Entertainments Tax Act 1977 10. Goa Entertainment Tax Act, 1964 11. Goa Entertainment Tax Rules, 1965

15. Karnataka Cinema (Regulations) Act, 1958 16. Karnataka Entertainments Tax Act, 1958 17. Kerala Cinemas (Regulations) Act 1958

39. The Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Rules, 2004

18. Kerala Cinema (Regulations) Rules 1988

40. Ministry of Commerce and Industry, Department of Commerce Public Notice No. 64 /1997-2002- Director General of Foreign Trade notified the policy for import of cinematograph films and other films (including film on video tape, compact video disc, laser video disc or digital video disc).

20. Madhya Pradesh Cinema (Regulation) Act, 1952

41. Ministry of Information and BroadcastingPolicy for Certification of Films for Film Festivals (F.NO.808/5/2004-F(C) (Pt)), dated 17th January, 2006. 42. Ministry of Information and Broadcasting’s order dated 24th September, 2007Certification of Film Songs, Film Promos, etc for Cable Service-Amendment to Cable TV Network (Regulation) Act1995.

State List:

19. Kerala Additional Tax on Entertainment and Surcharge Show Tax Act 1963

21. Madhya Pradesh Cinema (Regulation) Rules 1972 22. Madhya Pradesh Entertainments Duty and Advertisements Tax Act 1936 23. Meghalaya Cinema (Regulation) Act 1953 24. Nagaland Cinemas (Regulations) Act 1969 25. Bombay Cinema (Regulation) Act, 1952 26. Orissa Cinema (Regulations) Act, 1954 27. Orissa Entertainment Tax Act 2006 28. Punjab Cinema (Regulation) Act, 1952 29. Punjab Entertainment Duty Act 1955

22. The Customs Act, 1962

1. Andhra Pradesh Entertainment Tax Act and Rules 1939

23. The Customs Tariff Act, 1975

2. Assam Cinema Regulation Act 1953

24. Central Excise Act, 1944

3. Assam Amusement and Betting Tax Act 1939

32. Sikkim Cinemas (Regulation) Act, 1978

4. Bihar Cinema (Regulation) Act, 1954

33. Sikkim Entertainment Tax 1980

5. Bombay Entertainment Duty and Advertisements Tax Act 1923

34. Tamil Nadu Cinema (Regulation) Act, 1955

25. Central Excise Tariff Act, 1985 26. Foreign Exchange Management Act, 1999 27. Indian Contract Act, 1872

30. Rajasthan Cinema (Regulation) Act, 1952 31. Rajasthan Entertainments and Advertisement Tax Act 1957


192

Role and Rule of Law Media & Entertainment Industry Annexure 1: Film

35. Tamil Nadu Entertainments Tax Act 1939

film but did not take any steps.

36. Tripura Cinemas (Regulation) Act 1985

The contracts entered into between Plaintiffs and Nariman Films (i.e. producer of the old film, Don) cannot be said to be contracts for service but were only contracts of service. The plaintiff were commissioned by Nariman Films and had composed the music for valuable consideration and therefore Nariman Films were the first owners of the copyright therein and not the Plaintiff.

37. Tripura Entertainment Tax Act, 1997 38. Uttar Pradesh Cinema (Regulations) Act, 1955 39. Uttar Pradesh Entertainment and Betting Tax Act, 1979 40. West Bengal Cinema Regulation Act, 1954

Local regulations: In addition, local municipal regulations would cover: Property Tax Show Tax Development Control Regulations for Mumbai Bombay Shops and Establishment Act, 1948

II Owner of copyright (case laws): Anandji Virji Shah & Ors v. Ritesh Sidhwani & Ors [Don (2006)] Court: Bombay High Court Citation: Order in Notice Motion No. of 2006

in Suit (L) No. 2993 of 2006 Coram: SJ Vazifdar, J Date: October 17, 2006

Facts: Plaintiffs filed a suit for a declaration that the Plaintiffs are the owners of all rights, including the copyright in respect of the musical works, including theme music/ score and music for two songs, Yeh mera Dil and Khaike Pan Banaraswala, of the film, Don (released in 1978). The Plaintiff also sought declaration that they are entitled to special rights in respect of the said musical work. The Plaintiff sought an injunction restraining the Defendants from releasing the film, Don (2006), which contained the two songs and the theme music/score of which the Plaintiff claimed to be the authors and owners of the copyright in the music of the film, Don (1978) of which the impugned film is a remake. Ratio: The Court observed that, “Firstly, there has been gross delay and laches on the part of the Plaintiffs. I hasten to add that it is not merely on the ground of delay that this application is rejected. The delay has, in fact, led to the Defendants altering their position to their detriment. The grant of any interim reliefs today would undoubtedly cause the Defendants irreparable harm and injury.” The movie was scheduled to be released within three days and the Defendant had issued prominent public notices and the Plaintiff was aware about Defendants using the song in question in their

In the light of the above points, the court held that at the ad-interim stage there was nothing to indicate that the ingredients of Section 57 of the Copyright Act i.e. Author’s special rights exist. Vide order dated March 5, 2013 by virtue of the consent terms filed between Plaintiffs and Defendant Nos. 1, 2 and 4 viz. Ritesh Siddhwani, Excel Entertainment and Farhan Akhtar, the Plaintiffs agreed to dispose of the suit against Defendant Nos. 1, 2 and 4. The suit with respect to the remaining defendants i.e. Super Cassettes Industries Limited, Saregama India Limited and Prasad Film Laboratories is still pending before the Bombay High Court.

Saregama India Ltd v. Puneet Prakash Mehra & Ors. [Houseful] Court: Calcutta High Court Citation: APO No. 253/2010, C.S.No.

101/2010, APO No. 254/2010, C.S.No.112/2010, G.A. 1423/2010 and APO 265/2010, C.S.No.109/2010, GA 1731/2010 Coram: KJ Sengupta and K Chakraborty, JJ. Date: October 1, 2010

Facts: The Respondents had filed a copyright

infringement case for the song. Aap ka kya hoga – dhano, of the film, Housefull, allegedly based on the song, Apni Toh Jaise Taise, of the film, Lawaaris. Prakash Mehra Prductions had produced the film, Lawaaris. By an agreement dated July 18, 1981, between Saregama and Prakash Mehra, the rights in the literary, dramatic and musical and artistic work and soundtrack and recording of the songs of the film Lawaaris were transferred to Saregama. Saregama had assigned the rights in respect of the song in favour of Nadiadwlala Grandsons Entertainment Limited, who had produced the film Housefull. After making the film Nadiadwala assigned the distributorship rights under the film to Eros and the rights of recording cassettes and mobile recording, etc. in favour of Super Cassettes Industries Ltd. The rights acquired by Saregama were disputed by both the Mehras and Anand Virji Shah and others who were claiming exclusive copyright in the music of the songs. The trial court by its order order dated May 13, 2010, observed, that Kalyanji Anandji were the music directors of the film, Lawaaris, and therefore should be treated as having entered into a Contract of Service with the Prakash Mehra Productions and

thus had no copyright in the musical works of the film Lawaaris. An appeal was filed against the order by Saregama, Eros and Nadiadwala.

Ratio:

► The rights of a music composer or lyricist can be defeated by the producer of a cinematograph film in the manner laid down in proviso (b) and (c) of Section 17 of the Act. ► When a composer does any work in the course of employment of contract, the employer shall in absence of such contract become the first owner of the copy right. ► Assignee of copyright is entitled to the right to grant licenses in respect of contract works to third parties. ► The court upheld the trial court’s view that there was no mutilation or distortion in the music of the film and thus there was no infringement of the author’s special right under sub-section 1(b) of Section 57 of the Copyright Act, 1957. ► The court held that the bank guarantee furnished in favour of Mehras as well as AnandjiVirji Shah to continue until further order that might be passed by the learned Trial Judge. The Court held that the aforesaid bank guarantees were to be kept as equitable measure in order to secure future payment of royalty. In addition thereto Appellants, Saregama, Eros International, Nadiadwala Grandson Entertainment Ltd. were to furnish monthly statement of their respective receipts on account of the said film in sealed cover with the Registrar, Original Side.

Nariman Pictures and Ors. v. Baba Arts Ltd. And Ors. [Don2] Court: Bombay High Court Citation: Appeal Lodging No. 851 of 2011 in

Suit Lodging No. 3404 of 2011 Coram: Mohit Shah and Roshan Dalvi JJ Date: December 22, 2011

Facts:

The Appellants-Plaintiffs had filed a suit seeking injunction in order to restrain the Respondents-Defendants from infringing the Appellants’ copyright in the film Don and for consequential reliefs. By the order dated December 19, 2011, of the single judge of the Bombay High Court the grant of ad interim relief was declined. Thus the Appellants filed an appeal against the said order.

Ratio:

► The court was in complete agreement with the reasoning recorded by the single judge and upheld the same while refusing the ad-interim relief. The application for ad interim relief was rejected on account of the fact that prima-facie it appeared that the Plaintiffs (Appellants)


193

had the knowledge of the making of the film much before the admitted date (i.e., October 26, 2011) and also there were articles appearing about the making of the film dating back to June 2007. It was observed that “it is reasonable to presume that the Plaintiffs, who carry on business in the same field, had noticed these reports.” ► The single judge further observed that the by a letter dated March 15, 2008, the advocates of the Defendant No. 2 had informed the Plaintiffs that they had by an agreement dated May 16, 2005, acquired all the rights in respect of the original film Don. Thus, the Plaintiffs had knowledge of the alleged rights almost four years ago and did not initiate any step to protect their rights. ► The single judge held that the as the film was due to be screened in less than 48 hours and all third party contracts, theatre bookings, distribution of prints to the distributors and the owners of the theatres has been done and a grant of injunction at this stage would cause grave harm and irreparable injury to third parties and thus the ad-interim application was rejected. The suit is pending. On February 13, 2013, the suit was disposed of for want of prosecution.

IIi: Adaptation and remake rights R Madhavan v SK Nayar Court: High Court of Kerala Citation: AIR1988Ker39 Coram: PC Balakrishna Menon and PK Shamsuddin, JJ.

Date: June 4, 1987 Facts: The plaintiff filed a suit in the District

Court, Tellicherry, claiming he was entitled to the exclusive copyright in the literary work of ‘Alayazhi’ and that the film ‘Avalute Ravukal’ was an infringement of the plaintiff’s copyright. The district court refused to grant an injunction. The Plaintiff filed an appeal against the decision of the district court.

Ratio: The court was unable to find any resemblance or similarity in the theme, scenes or situations in the film after a comparison of the novel with the said film. The court further held that the material, incident situations and scenes portrayed in film are substantially and materially different from incidents and scenes portrayed in the novel. Therefore, the copyright of the Petitioner was held as not infringed and the petition was dismissed. The court further stated that the safest test to determine whether or not there has been a violation of copyright is to find out if the reader, spectator or viewer after having read or seen

both the works can get an impression that the impugned work or film is an imitation of the other. The court opined that no prudent man, who has seen the film and read the novel Alayazhi, will come with an impression that the former is an imitation of the latter. In the circumstances, the court held that there is no infringement of the copyright of the plaintiff in making film ‘Avalute Ravukal’.

NRI Film Production Associates (P) Ltd v Twentieth Century Fox Film Corporation & Anr Court: High Court of Karnataka Citation: ILR 2004 KAR 4530 Coram: K Sreedhar Rao, J Date: August 18, 2004. Facts: The Plaintiff filed a suit for a declaration that the movie Independence Day (ID) produced by the defendants infringed the copyright of the plaintiff’s film script, Extra Terrestrial Mission (ETM). The Plaintiff sought an injunction against the display of the film in any theatre or through a videocassette both in India and abroad. The Plaintiff further sought an enquiry into accounts of the film ID for assessing the compensation payable to the plaintiff for the tort of infringement. Ratio: The Court was of the view that there

is no comparative basis between ETM and ID except the fact that in both the plots the President is involved in a war, but the manner of involvement and the nature of the President’s role conceived in ETM is totally different from ID. The treatment and presentation of the concept in the film ID is totally different from the script of ETM. The picturisation of blasting of nuclear missiles, disruption of communications, traffic jams are nothing but “scene a faire” commonly found in scientific fictions. Indeed in several earlier English movies which have been marked and presented visually for the court’s benefit disclose that the confrontation of aliens with the men on Earth, the spaceship energy shields are ideas evolved several decades ago and there is nothing special of the idea. The photographic expression of the work in the film would itself constitute a copyright. Therefore, it cannot be said that the script of ETM if made a film will bear the similar presentation and effects. The court therefore held that there was no copyright infringement.

Vipul Amrutlal Shah v Shree Venkatesh Films Pvt. Ltd. and Ors Court: High Court of Calcutta Citation: GA No. 2064 of 2009 and CS No. 219 of 2009

Coram: Patherya, J. Date: August 10, 2009. Facts: The Petitioner had filed an application for interim injunction against the producers of a Bengali film, Poran Jaey Joliya Re, in a suit

for infringement of copyright of the Petitioner’s film, Namastey London. The Petitioner claimed to have a copyright in the literary and dramatic works including the cinematographic film Namastey London and claimed that the Respondent by copying the story line and plot of the Petitioner’s film, had infringed the Petitioner’s copyright.

Ratio: The Court held that the story line of

both the films was substantially and materially same and the Petitioner had no copyright in the idea but in the expression of such idea i.e. the cinematographic film Namastey London. Petitioner therefore as a producer is an author under Section 2(d)(v) of Act of 1957 and has a copyright in the expression of the ideas. Sections 2(y) and 13(i)(a) and (b) of the Act of 1957 recognize “cinematographic film” and “literary works” as separate and independent works. Petitioner has an exclusive copyright in the Hindi film and the court held that the Bengali film infringes such right and therefore, the Petitioner was entitled to an order of interim injunction. “No one can claim any copyright in the idea but can always claim copyright in the expression of such idea in the form of literary, dramatic or cinematographic works.”

IV. Disputes relating to theft of idea and underlyin g literary and musical works in cinematograph films M/s KBC Pictures v AR Murgadoss & Ors. [Ghajini] Court: Bombay High Court Citation: Draft Notice of Motion No. of 2008 in Suit Lodging no. 3821 of 2008

Coram: DG Karnik, J Date: December 26, 2008

Facts: The Plaintiff sought an injunction restraining the Defendants from infringing his copyright in the story, screenplay and dialogues in the Hindi remake of the Tamil film, Ghajini, and from releasing the Hindi remake of the said Tamil film. The Plaintiff contended that the Defendant No. 1 had written the story, screenplay and dialogues for the Tamil film and after receiving a consideration of Rs 11 lakh had by an agreement assigned the copyright in the said work in favour of the Plaintiff with the right to remake the film in Hindi language. Ratio:

► The Court observed that the Plaintiff had failed to prove that the Defendant No. 1 had executed any agreement via which the rights were assigned in the favour of the Plaintiff and that the Plaintiff was the owner of the copyright in the story, screenplay and dialogues for the Hindi version of the Tamil film.


194

Role and Rule of Law Media & Entertainment Industry Annexure 1: Film

► The Court held that the Plaintiff was guilty of delay and laches. ► The Court further held that as there was an unsatisfactorily explained delay on the part of the Plaintiff to approach the court and the Plaintiff had approached the court only five days prior to the release of the said film, the delay had caused great prejudice to the Defendant No. 3 who had invested large amounts in the making and advertisement of the said film and also third party interests had been created by that time. Thus, the court refused the interim relief and dismissed the motion.

Kishore Mohanlal Dingra v M/s SK Films Enterprises & Ors [Wanted] Court: Bombay High Court Citation: Order in Notice of Motion No. 3101 of 2009 in Suit No. 2199 of 2009

Coram: SC Dharmadhikari, J. Date: September 10, 2009

Facts: The Plaintiff sought an injunction against SK Films seeking to restrain the release of the film, Wanted, with the song which was the subject matter of the suit. The injunction was sought only against utilisation of the song, circulation of CDs, DVDs or in any other format. Ratio:

► Plaintiff failed to make out a prima facie case on his ownership. It was held by the court that “Once, the case is not free from doubt and requires further elaboration and substantiation by the Plaintiff himself, then, it is not a fit and proper case of any interim injunction much less in the form prayed.” ► Sound recording is an independent work under the Copyright Act and cannot be said to be same as cinematograph film as alleged by the Plaintiff. ► Plaintiff is required to approach the court expeditiously. The Plaintiff was aware about Defendants using the song in question in their film but did not take any steps. Plaintiff allowed the music album / CD of the film containing the song to be released hence on this ground, no relief ought to be granted in favour of the Plaintiff.

straining the Defendants from releasing, exhibiting and exploiting the film, Jail, containing the story line on the basis of which the Plaintiff had started the film to be directed by the Defendant No.1, story by Defendant No.5 in any manner whatsoever.

Ratio: The court held that the Plaintiff failed

to establish prima facie case that the rights in respect of the script and storyline, so also, the entire film vest in the Plaintiff. The judge further criticised the increasing tendency to file suits and seek reliefs on the eve of the release of a film and with which big production houses, directors, technicians and artistes are associated. In view of the aforesaid, the Plaintiff did not make any prima facie case and the balance of convenience was held not to be in favor of plaintiff and hence notice of motion was dismissed.

Mohammad Raj Khan v Shaira Khan & Ors [Paathshala] Court: Bombay High Court Citation: Notice of Motion No. 1023 OF 2010

in Suit No. 980 of 2010 Coram: RY Ganoo, J. Date: April 12, 2010

Facts: The Plaintiff claimed to be the producer of the audio cassette, Indian Brothers. The Plaintiff came to know that the film, Paathshala, which was to release on April 16, 2010, produced by Defendant No. 1 had the song, Bekarar, and three other songs found in the cassette of Indian Brothers. According to the Plaintiff, if the film, Paathshala, was allowed to be released with the four songs that would violate the rights of the Plaintiff in regard to the cassette which they have brought in the market. Ratio:

► The Court observed that “the word copyright owner of the said track would mean sound recording rights.”

Sushila Sharma v Madhur Bhandarkar & Ors (Jail) Court: Bombay High Court Citation: Notice of Motion No. 3391 of 2009 in

► The Court observed that the plaintiff holds only song recording rights of song, Bekarar. Hence the Plaintiff had not been able to make out a prima facie case that he held all rights in respect of song, Bekarar, appearing in the cassette, Indian Brothers. The Plaintiff therefore failed to make out a prima facie case for grant of ad interim relief. The court further refused to grant ad-interim relief as the Plaintiff had approached the court four days prior to the release of the film and on account of various third party rights being created in the film. The Plaintiff filed an appeal against the single judge’s order which was disposed of by the division bench of the Bombay High Court. The suit is pending before the Bombay High Court.

Facts: Plaintiff had sought an injunction re-

Yash Patnaik and another v Red Chillies Entertainment Pvt. Ltd. and Others. (Ra-One) Court: Bombay High Court Citation: 2012(114) BomLR7

The suit was unconditionally withdrawn by the Plaintiff on Octobr 17, 2011 and hence disposed of.

Suit No. 2417 of 2009 Coram: SC Dharamadikari, J Date: November 4, 2009

Coram: Mohit S Shah, Roshan Dalvi, JJ Date: October 21, 2011 Facts: The appeal was filed by the original

Plaintiffs who were aggrieved by the lower court order which had dismissed the Appellant’s suit on grounds of delay. The Appellants claimed an action of copyright infringement against the Respondent’s film Ra-One. The Appellants had developed a concept note and registered the same with the Film Writers’ Association. Plaintiff had copyright in the concept embodied in the said concept note including the materials graphics, illustrations and drawings, monograms and the scenes and the pictures of the flying robots in the gadgets. The concept note was handed over by the Plaintiff to the Defendant No 4. And the Defendant No. 4 had encouraged Plaintiff No. 1 to further develop and submit more detailed characters, outdoor designs etc. for the project. Subsequently the Plaintiff had noticed that certain scenes were a complete lift from the concept note.

Ratio: The Court granted an injunction re-

straining the Respondents, their agents, representatives, media partners, distributors, exhibitors, licensees and merchandisers from releasing/exhibiting/exploiting/broadcasting/ telecasting the film, RA-One, in theatre or over satellite or video or DVD or otherwise howsoever granted. Appeal was disposed of and the Appellants where allowed to continue exhibition post the deposit of Rs 1 crore. The suit is pending.

Barobax Corp v Eros International Media Ltd. & Ors. [Agent Vinod - Pungi song] Court: Bombay High Court Citation: Suit (L) No. 766 of 2011 Coram: SJ Vazifdar, J Date: March 22, 2012 Facts: The Plaintiff made an action for infringement of copyright in the sound recording and/ or musical work of the song, Pungi, from the film, Agent Vinod. The film was to be released the next day. Ratio:

► The Court held that it was not necessary to compare the works at this stage as the Plaintiff could not establish ownership/ assignment in the song from which the defendants’ song is copied. ► The Court further held that, “On the other hand, if the plaintiff’s case is that there is an infringement of the copyright in the underlying musical work, prima-facie at least the plaintiff has no cause of action for even the copyright registration certificate issued in Canada, indicates three persons to be the authors thereof. The suit is however, not filed by the authors who would be the original owners of the underlying musical work. There is nothing to establish that


195

they assigned their said rights to the plaintiff. The fact that the authors had themselves formed and are the promoters of the plaintiff would make no difference.” Therefore, no relief was granted to the plaintiff. The Plaintiff subsequently withdrew the case.

Saregama India Limited v Balaji Telefilms Limited & Ors (The Dirty PictureOoh La La song case) Court: Calcutta High Court Citation: Appeal- APOT 221 of 2012in GA

1087 of 2012 in T 6 of 2012 in CS 142 of 2012 ( Balaji Tele Films Ltd. v Saregama India Ltd. & Ors.) and APOT 220 of 2012 in TA 54 of 2012 in CS 142 of 2012 (Saregama India Ltd. v Balaji Tele Films Ltd. & Ors.) Coram: Sengupta and Asim Kr. Mondal, JJ Date: April 20, 2012

Facts: The Plaintiff Saregama India Limited had filed the suit seeking an injunction on the Defendants from broadcasting or by any other means showing the film, The Dirty Picture, or at any rate the song, Ooh La La. The Plaintiff alleged that the said song infringed the copyright of the Plaintiff in the song, Ui Amma Ui Amma, which was a part of the old Hindi film, Mawali. The suit was filed prior to the satellite launch of the film. A single judge of the Calcutta High Court by an order dated April 18, 2012, observed that after hearing both the songs he was of the view that the tune of the allegedly infringing part of the song in the film, The Dirty Picture, is substantially similar to the said part of the old song. The judge relied on the judgment of Ram Sampath vs Rajesh Roshan case wherein it was held that even a small part of the song is capable of copyright protection. The judge was of the view that a prima facie case of infringement was made out by the Plaintiff. However, the Judge observed that there had been inordinate delay by the Plaintiff in approaching the court and grant of injunction would cause irreparable prejudice to the rights and contentions of the Defendants. The judge therefore permitted the Defendants to broadcast the film, The Dirty Picture, upon deposit of Rs 2 crore with the Registrar, Original Side. Both the parties filed an appeal before the division bench against the said order. Ratio:

The division bench held the following: As such, at this stage, it is difficult for this court to come to prima facie conclusion that there has been an infringement in order to grant absolute order of injunction. Moreover, the question of delay cannot be overlooked lightly when it is noticed that this film along with the song was released long time back and it was within the knowledge of the plaintiff from the date of the release of the same, albeit no action was taken at the earliest. We are of the view at the ad interim stage promptness of suitor is one of vital aspect.

We fail to understand that during this period why the plaintiff did not take present action. No explanation is offered either. These are the factors for which an absolute order of injunction as suggested at this stage cannot be granted. It may or may not be possible after affidavits are filed. If during this period the defendant no.1 along with Super Cassettes and the defendants nos.4 and 5 are allowed to exploit without any tangible protest, we do not see any possible irreparable loss and injury likely to be suffered by the plaintiff for few days. Under the circumstances, some measure has to be taken by this court. It appears that already a substantial business has been done by the appellant-Balaji, and the defendants and each of them shall furnish and shall go on furnishing the earnings of all the business in connection with this film with its own Advocate-on-record in a sealed cover and to be kept by him and shall not be divulged to anyone except with the leave of the court. In addition thereto, we direct that the defendant no.1 shall deposit a sum of Rs 50 lakh instead of Rs 2 crore as directed by the learned trial judge. The figure is reduced on the premise that the figure of Rs 2 crore as directed by the trial judge is highly disproportionate and based on no material.

Saregama India Ltd. v Aynagran International Media [Pothuvaaga] Court: Calcutta High Court Citation: GA No. 1571 of 2012 in CS No. 209 of 2012 Coram: IP Mukherji, J Date: June 15, 2012 Facts: The Plaintiff filed an interlocutory ap-

plication in aid of a suit alleging infringement of copyright in a song. The Plaintiff claimed that a Tamil film, Murattukalai, which was to be released, contained a song, Podhuvaga, which is a verbatim copy of the song, Pothuvaaga Enmanasu, from the 1980s. Not only the lyrics but also the music was copied from the former song. The Plaintiff stated that he was the owner of the copyright in the former song vide an assignment agreement.

Ratio:

The court found substantial similarity in both the songs and restrained the defendants from exhibiting the film, Murattukalai, containing the song, Podhuvaga, without obtaining a licence from the Plaintiff.

Kapil Chopra v Kunal Deshmukh & Ors (Jannat 2) Court: Bombay High Court Citation: Appeal (lodging) no.322 of 2012 in

Notice of Motion (lodging) no.1490 of 2012 in Suit (l) no.1182 of 2012 Coram: Mohit Shah and NM Jamdar, JJ Date: August 21, 2012.

And

Vishesh Films India Pvt. Ltd. v Kapil Chopra and Ors. (SLP) Court: Supreme Court of India Citation: Civil Appeal No: 6546 of 2012 arising out of SLP (C) No. 27576 of 2012

Coram: Altamas Kabir, J Chelameshwar, JJ Date: September 14, 2012. Facts: On May 3, 2012, Kapil Chopra, the Plaintiff, approached the Bombay High Court and filed a suit claiming copyright infringement of his script titled, Zero. He alleged that his script was used by the Defendants for making the film, Jannat 2. He sought an injunction against the theatrical release of Jannat 2. The court did not grant any injunction against the theatrical release of the film as the Plaintiff approached the court at a belated stage and the balance of convenience was found in favour of the Defendants. On August 21, a division bench while hearing an appeal filed by the Plaintiff granted ad-interim injunction against the satellite release of the film “Jannat2” till September 10, 2012. On September 6, the division bench granted an injunction against the further theatrical and satellite release of the film and exploitation on different platforms/modes/mediums. The court stated that the Defendant had received the script from the Plaintiff. The court observed that writers of films are not treated with the dignity and respect which they deserve. The facts of the present case show that the Plaintiff was clearly deceived and exploited by the Defendants. The Defendants attempted at depriving the Plaintiff of any monetary compensation for his literary work. A SLP was filed by the original Defendants.

Ratio: The matter was settled as the original

Defendants paid Rs 20 lakh to the original Plaintiff by way of full and final settlement and further agreed to give the respondent due credit in all the future releases of the film, Jannat 2. A decree was passed. Therefore, all the interim orders passed by the High Court earlier were held to not survive further and were vacated.

V. Acts not amounting to infringement- fair dealing: Super Cassettes Industries Ltd. v Hamar Television Network Pvt. Ltd. and Anr. Court: Delhi High Court Citation: 2011(45) PTC 70(Del) Coram: Rajiv Shakdher, J. Date: May 24, 2010 Facts: The Plaintiff sought an injunction against infringement of its copyright in musical works on the grounds that DefendantHamar Television Networks was broadcasting


196

Role and Rule of Law Media & Entertainment Industry Annexure 1: Film

its copyrighted works without due permission. The Defendants invoked the statutory defence of fair use.

Ratio: The court held that the defence of “fair use” failed in the instant case as out of a large number of allegedly infringing material produced before the court most of them did not fall within the exceptions provided in Section 52(a)(ii) or Section 52(a)(ii) of the Copyright Act. They were neither used for the purposes of criticism or review nor shown to be necessary for the purpose of reportage of current events. The court observed, “A defendant can rely upon the gateways carved in Section 52 or 39 only if he is able to demonstrate that the copyrighted work is used for purposes indicated therein. If “substantial” and “vital” part of the works are reproduced the intention to appropriate on the part of the infringer the labour of others for his own profit having been made out, the court need not look to “proof of any independent oblique motive.” India TV Independent News Service Pvt. Ltd. & ORs. v/s Yashraj Films Pvt. Ltd. Court: Delhi High Court Citation: FAO (OS) 584 of 2011 Coram: P Nandrajog and Manmohan Singh, JJ Date: August 21, 2012 Facts: The court was hearing an appeal filed against a single judge’s order dated November 11, 2011. The first line of the lyrics of a hit song in the film, Bunty Aur Babli: Kajra Re Kajra Re Tere Kare Kare Naina, was used in an advertisement broadcast during a TV programme and during a chat show: India Beats, a budding singer, sang stanzas from nine songs accompanied by clippings from the cinematographic film concerned in the background. The single judge found this to be objectionable and thus restrained the defendants from doing so during the pendency of the two suits. Ratio:

► The appeal court observed that small amount of usage of songs in a programme by India TV did not amount to any infringement as it amounted to ‘fair use’, as the same is de minimis, that is, very little usage compared to the whole programme. ► The court observed that “The chat show in question is of 45 minutes duration, out of which Vasundhra Das has sung, at different intervals of the chat show, only nine songs and the total time consumed in the singing is less than 10 minutes. Applying the five principles of de minimis we find that the intention was not to appropriate something belonging to the other. The intention was to inform the viewers how Vasundhra Das was introduced into music and what milestones she achieved in her life. The viewer of the programme would not remember the programme for the songs sung by Vasundhra Das but would remember the pro-

gramme as one encapsulating the life journey of Vasundhra Das, hardly any harm would be caused to the copyright owner of the sound recording. Thus, unless at the evidence led to the contrary at the trial, prima facie, the defence of de minimis would be available even to Vasundhra Das as also India TV in relation to the programme India Beats.” ► The court allowed the appeals and set aside the impugned order dated November 11, 2011, and dismissed the applications filed by the respondents seeking interim relief. The court held and made it expressly clear that no visual clippings from any cinematographic films would be displayed.

Vi. DISPUTES PERTAINING TO REGISTRATION OF TITLES KM Multani v Paramount Talkies of India [Virginia] Court: Bombay High Court Citation: (1942) 44 BOMLR 505 Coram: J Beaumont, Kt, Somjee, JJ Date: March 25, 1942 Facts: The plaintiff filed suit seeking injunction to restrain the Defendants from distributing or exhibiting the said motion picture imported by them under the name and title of, Virginia. Ratio: The court refused to grant injunction

as the Plaintiff had failed to prove that they had very extensively advertised their film and thereafter the Defendants had declared their film. Further the court observed that the two films with identical titles would indeed lead to confusion and inconvenience in the booking and production of the films but no party would suffer any greater inconvenience than the other. Thus, as there was no intention to deceive on either party’s side the court held that the Plaintiff has no right to restrain the Defendants from using the said title.

Sholay Media and Entertainment v Parag M Singhvi & Ors. Court: Delhi High Court Citation: CS (OS) No. 1892/2006 Coram: Gita Mittal, J Date: October 5, 2006 Facts: The Plaintiffs had filed a suit against director Ram Gopal Verma and others in respect of the film, Ram Gopal Verma ki Sholay, alleging infringement of trademark, copyright, passing off, damage, rendition of accounts, etc. The Plaintiff alleged breach of its proprietary rights in its registered trademark, Sholay, Gabbar and Gabbar Singh. Ratio: The court held that the Plaintiff had

made out a prima facie case for grant of an ad-interim injunction as grave and irreparable loss would undoubtedly inure to the Plaintiffif

the interim injunction was not granted at this stage. The balance of convenience, interest of justice and equity was held to be in favour of the Plaintiff. The Defendants were restrained from manufacturing, selling, offering for sale, distributing, advertising including on the internet and in any other manner using or passing off the trade marks Sholay, Gabbar and Gabbar Singh. The Defendants were also restrained from infringing the copyright of the Plaintiff in the film Sholay. The matter is pending before the Delhi High Court.

Warner Brothers Entertainment Inc & Anr v Harinder Kohli & Ors [Hari Puttar] Court: Delhi High Court

Citation: 2008 (38) PTC 18 (Del) Coram: Reva Khetrapal, J Date: September 22, 2008

Facts: Plaintiff had filed a suit for permanent injunction against the Defendant from releasing the film, Hari Puttar, alleging that it was an infringement of their trademark, Harry Potter. Ratio: The court refused to grant an injunction.

It held that: ► Even if there is any structural or phonetic similarity between the competing marks, the real test to determine deceptive similarity is whether the target audience is able to discern the difference between the marks. ► The Plaintiff could not justify delay in approaching the court and hence the action failed, inter alia, on the ground of delay and acquiescence. ► The Plaintiff had failed to establish any irreparable loss or injury caused to them in case the film, Hari Puttar, was released and hence the grant of injunction was declined.

Sanjay B Haran v Big Pictures & Ors. [13 B - Fear Has a New Address] Court: Bombay High Court Citation: Order in Notice of Motion No. of 2009 in Suit (L) No. 629 0f 2009

Coram: AV Nirgude, J Date: March 4, 2009

Facts: The Plaintiff had filed the suit for perpetual injunction to prevent the Defendant from using the title, 13B - Fear Has A New Address. Ratio: The registration of the title with the pro-

ducers’ association and any rules of the association neither has any statutory force nor gives any proprietary rights to the Plaintiff in relation to the said title. Further, there was also delay on the part of the Plaintiff in approaching the court and had only approached shortly before the release of the film and hence the grant of ad interim injunction was declined. By order dated October 12, 2010, Justice Dharmadikari has given leave for withdrawal of no-


197

tice of motion with liberty to adopt appropriate proceedings.

Fish Eye Network Pvt. Ltd. v Association of Motion Pictures and TV Program Producers & Ors. [Thank You] Court: Bombay High Court Citation: Order in Notice of Motion No.1885 of 2011 in Suit No.1422 OF 2011 Coram: Dr DY Chandrachud, J. Date: April 5, 2011

Facts: The Plaintiff had filed an application for the grant of ad interim relief against the release of a film, Thank You. It was contended that the title, Thank You, was registered by the Plaintiff with the Association of Motion Pictures and TV Programme Producers. Hence, the Defendant was not entitled to use the same title for its film. Ratio: ► The court observed that there was no copyright as such in a mere title of a film. The Plaintiff had not acquired any goodwill or reputation in the title of the film or secondary rights in association with the title while the Defendant had already spent a large amount on the making of the film.

► The Plaintiff was already aware that the Defendant was using the said title and also the music release of the movie had taken place hence on the ground of delay and acquiescence, the grant of ad interim injunction was declined. ► By order dated June 13, 2012, Justice BR Gavai disposed of the Notice of Motion on the ground that both parties agree that with passage of time the Notice of Motion was rendered infructuous. ► The suit is pending before the Bombay High Court.

High Definition v Association of Motion Pictures and TV Program Producers & Ors. [Mausam] Court: Bombay High Court Citation: Order in Notice of Motion No. of 2011 in Suit (Lodg) No.668 of 2011 Coram: Dr. DY Chandrachud, J. Date: April 8, 2011

Appeal: Citation: Appeal No. 432 of 2011 in NMS/1973/2011 in S/505/2011 Coram: DK Deshmukh and AV Mohta, JJ. Date: September 13, 2011

Facts: The Plaintiff sought ad-interim order of injunction from restraining the Defendants from using the title, Mausam, for its film. The Plaintiff contended that it had registered the title with the Association of Motion Pictures and Television Programme Producers (AMPT-

PP) in 2001 and then had also got it renewed several times until 2010. AMPTPP had called upon the Plaintiff to check on the progress of their film but on not seeing any progress for the same, AMPTPP according to the rules laid down by them, granted registration of the title, Mausam, in favour of the Defendant. By order dated April 8, 2011, the single judge refused to grant ad-interim relief in favour of the Plaintiff. The Plaintiff preferred appeal against the order of the single judge.

Ratio: On April 13, 2011, a division bench of the Bombay High Court dismissed the appeal considering that the breach alleged was a breach of rules framed by the voluntary association of the film producers and the fact that the appeal was directed against an order which was an ad-interim order, the court did not find the need to interfere. The suit was dismissed on June 17, 2013 for want of prosecution.

Vii. DEFAMATION OF PERSONSLIVING OR DEAD Raghu Nath Pandey and Anr. v Bobby Bedi and Ors [Mangal Pandey- The Rising] Court: Delhi High Court Citation: 2006(89) DRJ40 / CS (OS) No.

1212/2005 and is No. 6787/200 Coram: AK Sikri, J Date: February 22, 2006

Facts: The Appellants-Plaintiffs, descendants of Mangal Pandey family, filed a suit for civil defamation in respect of movie, Mangal Pandey -The Rising, alleging that the Respondents-Defendants had defamed and mutilated the character for commercial purposes. The AppellantsPlaintiffs alleged that the character of Mangal Pandey was distorted and falsely depicted with the introduction of some of the characters and scenes in the film and association of Mangal Pandey with them which had brought both Mangal Pandey and his entire family to disrepute. The Appellants-Plaintiffs sought for the deletion of those portions which were not in conformity with Mangal Pandey’s character. Ratio:

► The court observed that the scenes to which the Appellants-Plaintiffs objected to were to be judged from morality and obscenity point of view and held that there was nothing objectionable in the same.

ors, 2011 [Once Upon A Time In Mumbai] Court: Bombay High Court Citation: Appeal from Order No. 813 of 2010 with Civil Application No. 1015 of 2010

Coram: RC Chavan, J Date: July 28, 2010

Facts: An appeal was filed against the judgment of the city civil court in the Bombay High Court by Haji Mastan’s adoptive son Sundar Shekhar, who had filed a suit seeking permanent injunction against the release film ‘Once Upon A Time In Mumbai’ and a preview screening. Ratio: The court disposed of the applica-

tion and allowed the release of the film on the ground that the producers of the film give a disclaimer in the beginning of the film that this film has absolutely no resemblance with the life of the late Haji Mastan Mirza. In addition, the Respondents agreed to issue press release stating: “It is denied that the film Once Upon A Time in Mumbai-When It All Started, is based on the life of the late Mr. Haji Mastan Mirza. The Respondents have never represented before anyone including the press that the film is based on the life of the late Mr.Haji Mastan Mirza. This film is purely a work of fiction and the characters in the film are fictional and do not represent any individual, whether living or dead.”

Vadlapadla Naga Vara Prasad v Chairperson, Central Board of Film Certification, Bharat Bhavan, Mumbai and seven others [The Dirty Picture] Court: Andhra Pradesh High Court Citation: Writ Petition No. 30376 of 2011 Coram: V Afzulpurkar, J Date: December 1, 2011 Facts: The Petitioner, who is the brother of the deceased south Indian actress Vadapatla Vijaya Lakshmi (aka Silk Smitha), filed a writ petition on the grounds that the film, The Dirty Picture, portrays his sister in a defamatory and obscene manner. The Petitioner had learned through television and newspapers about a film, The Dirty Picture, being made on his sister. Ratio: The Court observed that the said film

was not a biopic or a fictional representation of the life of the Petitioner’s sister and therefore there is no violation of any right of privacy or reputation of the deceased actress or her family including the Petitioner.

► The court held that the grievance of the Appellants-Plaintiffs could be addressed by giving the following statement/announcement at the end of the movie in English as well as in Hindi: “The character of Heera is fictionalised. There was no such Heera in the life of Mangal Pandey. Mangal Pandey died a bachelor.”

The Court held, “Newspapers and other sources were not valid and further held that anybody is allowed to make a movie on the life-story of a person relying on facts which appear in the public records, even without his consent or authorization. But if they go beyond that then they may be invading his right to privacy and will be liable for the consequences in accordance with law.”

Bharatiya Minorities Suraksha Mahasangh & anr v Balaji Motion Pictures &

The Court observed that at that time as the film was yet to be released the allegation relating to


198

Role and Rule of Law Media & Entertainment Industry Annexure 1: Film

defamation was to be viewed from the Respondents stand that the said film was only a work of fiction and also carries a specific disclaimer to the effect that the said film was a work of fiction and that all characters are fictitious and any resemblance to real persons living or dead would be purely co incidental. The Court, therefore, dismissed the petition.

Viii. DISPUTES FOR ENFORCEMENT OF SECURITY INTEREST IN FILMS YT Entertainment Limited v Mrs Nasreen Azam Khan Court: Bombay High Court Citation: Arbitration Petition No. 778 of 2010 Coram: AV Mohta, J Date: March 17, 2011 Facts: The Petitioners invoked Section 9 of the Arbitration and Conciliation Act, 1996, for appropriate reliefs based upon the agreement executed. The Respondents had availed of financial assistance from the Petitioners for the production of its feature film, Bang Bang Bangkok, now titled, Khalbali - Fun Unlimited, under an agreement dated December 26, 2007. The Respondents failed to repay the same. On April 13, 2010, the Petitioners addressed a legal notice to the Respondents invoking the personal guarantee and calling upon them to repay the Petitioner’s dues. The Respondents, in spite of the receipt of the said notice, failed to honour their personal guarantee. Ratio: The court held that it is settled that the

claimant can file a recovery proceeding against the principle borrower, as well as, the guarantors. A separate claim petition can also be filed only against the guarantors. The court relied on a judgment of division bench Saraswat Cooperative Bank Ltd., Mumbai v Chandrakant Maganlal Shah , which observed that if a case is made out, the court can pass an interlocutory order or appoint a Court Receiver under Order 40 of the Cvil Procedure Court (CPC) or pass order of attachment before judgment as envisaged under Order 38 of the CPC. A prima facie opinion at the interlocutory stage is sufficient.

Yash Tejpal Shah & Ors v M/s Shree Ashtavinayak Cine Vision Ltd. & Ors (Bol Bachchan and Sher case) Court: Bombay High Court Citation: Chamber Summons No.866 of 2012 in Execution Application (L) No.1207 of 2012 In Award dated October 29, 2011 Coram: RS Dalvi, J. Date: September 18, 2012

Facts: The Applicant moved the high court alleging that the Respondents had defaulted on payment as stated in the consent Award dated October 29, 2011. The Applicant moved an

execution application to execute the consent Award. A Chamber Summons was filed seeking appointment of court receiver to take custody of the negatives/prints of the film, Sher. Respondent No. 5, who had the rights of the film, Sher, opposed the prayer stating that it was a third party to the litigation and not a judgment debtor.

Ratio: The court granted the relief sought by

the Applicants on the grounds that the film, Sher, is owned by Respondents 1 and 2 and the agreement entered into between Respondents No. 1, 2 and 5 was merely a finance agreement and not a line production agreement as argued.

IX. LITIGATION PERTAINING TO EXHIBITION OF FILMS POST CERTIFICATION Raj Kapoor v Laxman Court: Supreme Court of India Citation: AIR1980SC605 Coram: RS Pathak and VR Krihna Iyer,JJ Date: December 14, 1979 Facts: The petitioners had moved court seeking quashing of criminal proceedings initiated against them under Section 292 (pertaining to obscenity) of the Indian Penal Code for the film, Satyam Shivam Sundaram. The petitioners argued that once the censor board had granted a film a certificate for public exhibition under the Cinematograph Act, 1952, the public exhibition, circulation or distribution or the production of the film, even if it be obscene, lascivious or tending to deprave or corrupt public morals, cannot be an offence. Ratio: The Supreme Court quashed the crimi-

nal prosecution observing that: “Maybe, art cannot be imprisoned by the bureaucrat and aesthetics can be robbed of the glory and grace and free expression of the human spirit if governmental palate is to prescribe the permit for exhibition of artistic production in any department, more so in cinema pictures. So it is that a special legislation viz. the (Cinematograph ) Act of 1952, sets up a Board of Censors of high calibre and expertise, provides hearings, appeals and ultimate judicial review, pre-censorship and conditional exhibitions and wealth of other policing strategies. In short, a special machinery and processual justice and a host of wholesome restrictions to protect State and society are woven into the fabric of the Act. After having elaborately enacted such a legislation can it be that a certificate granted under it by expert authority can be stultified by a simple prosecution or a shower of prosecutions for an offence under Section 291 I.P.C., driving the producer to satisfy a ‘lay’ magistrate that the certificate of the Board of Censors notwithstanding, the film was offensive? The Board under Section 5B has to consider, before certification, all the

points Section 292 I.P.C. prescribes.” The court further observed, “Going to the basics, freedom of expression is fundamental. The censor is not the moral tailor setting his own fashions but a statutory gendarme policing films under Article 19(2) from the angle of public order, decency or morality. These concepts are themselves dynamic and cannot be whittled down to stifle expression nor licentiously enlarged to promote a riot of sensual display.”

Ramesh s/o Chotalal Dalal Vs. Union of India (UOI) and Ors. Court: Supreme Court of India Citation: 1988 (1) SCC 668/ Writ Petition (Civil) No. 107 of 1988

Coram: S Ranganathan and Sabyasachi

Mukherjee, JJ. Date: February 16, 1988.

Facts: The petitioner approached the court seeking to restrain the Respondents from telecasting of film, Tamas, alleged to be based on Hindu-Muslim tension and Sikh-Muslim tension before the partition of India and declaring the screening or televising of Tamas as violative of Section 5B of the Cinematograph Act, 1952. The division bench of the Bombay High while dismissing the petition held that the Cinematograph Act itself contains several provisions to ensure the fulfillment of the conditions laid down in section 5B, and also to ensure that any film which is likely to offend the religious susceptibilities of the people is not screened for public exhibition. It held that the procedure for grant of certificate of exhibition to a film is quite elaborate, and the unanimous approval by the examining committee must be given full weight and the court would be slow to interfere with the conclusion of a body specially constituted for this purpose. Ratio: The Supreme Court while dismissing

the SLP observed that there was no reason for them to differ from the decision of the division bench. It held that there is a vast area for creative art to interpret life and society with its foibles along with what is good. The restrictions or the standards that we set upon this freedom of expression must be so framed that protection of the least capable and the most depraved amongst us determines what the morally healthy cannot view or read. A democratic society must make a substantial allowance in favour of freedom.

Shri Raghvendra Films v Govt. of AP Court: Andhra High Court Citation: 1995(2)ALT 43 Coram: PLN Sarma, J. Date: April 7, 1995 Facts: The application challenged orders suspending the exhibition of the film, Bombay, in the twin cities of Hyderabad and Secunderabad, for two months on the ground that the film is


199

likely to cause breach of peace and create religious animosity and hatred between different communities. Film was granted certificate for unrestricted public exhibition by the CBFC.

Ratio: The court quashed the suspension or-

ders and held that no reasonable person could form opinion that exhibition of film would cause breach of peace and created religious animosity and hatred between different communities. Film Censor Board had issued certificate for unrestricted public exhibition after satisfied that no part of film was against interests of sovereignty and integrity. Standard from film had to be judged that of an ordinary man of common sense and prudence and not that of out of ordinary or hypersensitive man or point of view of religious fanatic.

Bobby Art International v Om Pal Singh Hoon Court: Supreme Court of India Citation: (1996) 4 SCC 1 Coram: AM Ahmadi, SP Bharucha and BN

Kirpal, JJ. Date: May 1, 1996.

Facts: A writ petition was filed by the Respondent to quash the ‘A’ certificate of exhibition awarded to the film, Bandit Queen, and to restrain its exhibition in India. On August 31, 1995, the film was screened, with English sub-titles, at the Siri Fort Film Festival of India with the permission of the Ministry of Information and Broadcasting. From January 25, 1996, onwards the censored film was open to public viewing at various cinema theatres in the country. On January 27, 1996, the Respondent filed the writ petition before the Delhi High Court. The Delhi High Court allowed the writ petition and hence an appeal was filed. Ratio: The Supreme Court while dismissing

the writ petition observed that the Tribunal had viewed the film in true perspective and had, in compliance with the requirements of the guidelines, granted an ‘A’ certificate to the film. The High Court ought not to have entertained the writ petition impugning the grant of the certificate based as it was principally upon the slurs allegedly cast by the film on the Gujjar community. We find that the judgment under appeal does not take due note of the theme of the film and the fact that it condemns rape and the degradation of and violence upon women by showing their effect upon a village child, transforming her to a cruel dacoit obsessed with wreaking vengeance upon a society that has caused her so much psychological and physical hurt, and that the scenes of nudity and rape and the use of expletives, so far as the Tribunal had permitted them, were in aid of the theme and intended not to arouse prurient or lascivious thoughts but revulsion against the perpetrators and pity for the victim. The court held that the ‘A’ certificate issued to the film, Bandit Queen, upon the conditions imposed by the Appellate Tribunal stood restored.

Union of India v KM Shankarappa Court: Supreme Court of India Citation: Appeal (civil) 3106 of 1991 Coram: V Khare, S Variava, JJ Date: November 28, 2000. Facts: A Special Leave Petition was filed be-

fore the Supreme Court against the judgment dated April 2, 1990, in Writ Petition No. 4335 of 1979 passed by the Karnataka High Court. The Respondent, KM Shankarappa, had challenged the constitutional validity of Sections 3(1), 4(1), 5D, 6(1) and 7(1) of the Cinematograph Act i.e. the provisions regarding certification of films for public exhibition. By the impugned judgment, Sections 3(1), 4(1), 5D and 7(1) were held to be constitutionally valid. However, portions of Section 6(1) were held to be unconstitutional and those portions were struck down. As per Section 6(1) of the Act, the Central Government could at any stage call for records of any proceeding in relation to any film which was pending or had been decided by the CBFC or decided by the Tribunal and after such inquiry into the matter as it would consider fit and necessary, pass appropriate order.

Ratio: The Supreme Court held that when the

government has chosen to establish a quasi judicial body which has been given power to decide the effect on public, the decision of such body will be final and binding so far as the executive and government is concerned. The Supreme Court said that to permit the government to review or revise a decision made by such body would amount to interference and such interference is not warranted. Supreme Court further observed that once an expert body has considered the impact of the film on the public and has cleared the film, it is no excuse to say that there may be a law and order situation and that it is for the State Government concerned to see that the law and order situation is maintained and that in any democratic society there are bound to be divergent views.

Lakshmi Ganesh Films v Govt. of Andhra Pradesh Court: Andhra High Court Citation: 2006(4) ALD374 Coram: Goda Raghuram, J

Date: June 21, 2006

Facts: The government suspended the exhibition of the film, The Da Vinci Code, in English, Telugu and other languages in the State of Andhra Pradesh. The question was whether the impugned restriction was reasonable in the context of Article 19(2) of the Constitution. Ratio: While quashing the suspension order, the

Court observed that the said film had been granted ‘A’ Certificate by the CBFC and considered as fit for adult viewing throughout India. The Expert Board was satisfied that said film did not

suffer an outrage of sensibility and did not lead to breach of public order. Notification which suspended the exhibition of the film was held arbitrary and the court enforced on the regulation of a cherished, valued and guaranteed fundamental freedom, of speech and expression. “Article 19(2) enjoins a requirement that the restriction provided by a law must be reasonable.”

Sony Picture Releasing of India Ltd. v State of Tamil Nadu Court: Madras High Court Citation: 2006-3-LW728 Coram: Prabha Sridevan, J. Date: July 7, 2006 Facts: Petitioner challenged an order suspending the release of the film, The Da Vinci Code, in Tamil Nadu for two months on the ground that various sections of the Christian community have expressed their strong resentment against the alleged objectionable content of this film. The film was alleged to be against the Christian tenets and could lead to communal tension and acts of violence resulting in breach of peace. However, the censor certificate was granted by expert body, according to guidelines under Section 5B after viewing of the film by Christian leaders, who agreed for release of film. Ratio: While quashing the suspension order,

the Court observed that it would be dangerous to allow the State to straight-jacket the right to freedom of expression, as artistic expression may be asphyxiated by law, if a petulant group of self appointed ‘Censors’ prescribe the paradigms for suspending the exhibition of a film which has got the approval of the Censor Board. The Censor Board is a body with a statutory mandate to grant certificates for films. When our courts have considered it their duty and responsibility to intervene when even the Central Board of Film Certification interferes with the fundamental right of freedom of speech and expression, the duty and responsibility is heavier in this case where the film has got the Censors’ approval and yet, the petitioners have been prevented from exhibiting the film by an order which has no reasonable basis.

Directorate of Film Festivals and Ors. v Gaurav Ashwin Jain and Ors. Court: Supreme Court of India Citation: Civil Appeal No. 1892 of 2007 (Arising out of S.L.P. (C) No. 19706 of 2006)

Coram: Tarun Chatterjee and RV Raveendran,

JJ.

Date: April 11, 2007

Facts: The Directorate of Film Festivals organised the National Film Awards (NFA) for which the 53rd NFA Regulations were enacted by the Petitioner. The Regulations had two eligibility requirements separately with regard to feature films and non-feature films respectively. The Respondents were aggrieved by the two


200

Role and Rule of Law Media & Entertainment Industry Annexure 1: Film

eligibility requirements and sought a declaration that those two Regulations were violative of Articles 14 and 19(1)(a) of the Constitution. They also sought a consequential declaration that films made and released on either ‘film format’ or ‘digital format’ are eligible for entry, without any certification by the censor board.

Ratio: Under the Cinematograph Act, 1952,

a film can be released for public exhibition only if it has been examined and certified by the Central Board of Film Certification as being suitable for public exhibition under the categories ‘unrestricted’ or ‘restricted to adults’ or ‘restricted to members of any profession or class of persons’. The decision to consider for awards, only those films which are certified by the Board for public exhibition is a policy of the ministry. The right of a film maker to make and exhibit his film is a part of his fundamental right of freedom of speech and expression under Article 19(1) (a) of the Constitution. A film is a medium for expressing and communicating ideas, thoughts, messages, information, feelings and emotions. The said policy neither relates to nor interferes with the right of a film maker either to make films, or to apply for certificate or to exhibit the films. There is nothing illogical, unreasonable or arbitrary about a policy to select only the best from among films certified for public exhibition.

UTV Software Communication v State of Madhya Pradesh Court: Madhya Pradesh High Court Citation: AIR2008MP177, 2008(2)MPHT392 Coram: AK Patnaik, J and P Shrivastava, J Date: February 26, 2008 Facts: The petitioner challenged and order issued by the Madhya Pradesh government was that the film, Jodha Akbar, was cleared by the Central Board of Film Certification with a ‘U/A’ certificate. Thereafter, the film was screened in about 30 theatres in Madhya Pradesh when the government of Madhya Pradesh issued an order suspending the screening of the film throughout the state with immediate effect. It was also alleged that the sentiments of the Kshatriya Committee has been very badly affected by the distortion of history shown in the film “Jodha Akbar”. Ratio: The Court observed that “Article 19(1)

(a) of the Constitution guarantees right to freedom of speech and expression to every citizen. The Supreme Court has further held that a movie enjoys the guarantee under Article 19(1)(a) of the Constitution. Mere opposition or agitation in some places in the State of Madhya Pradesh to the exhibition of the film Jodha Akbar cannot be a ground for arriving at an opinion that there would be breach of peace in the State of Madhya Pradesh or at the places concerned. Under Article 19(1)(a) of the Constitution and in a democracy, the commitment to freedom of expression has to be kept alive and freedom of expression

cannot be gagged by a simple agitation or opposition by one section of the society.”

Kamal R Khan v State of Maharashtra Court: Bombay High Court Citation: 2009(4) Bom CR 496 Coram: Swatanter Kumar and DY Chandra-

chud, JJ. Date: January 9, 2009.

Facts: The Petitioner challenged an order sus-

pending the screening of his film, Deshdrohi, as several scenes in movie denigrated North Indians and the overall view and the contents appeared inflammatory. The suspension was for 60 days and further extended.

Ratio: The court observed that there was no

material before the state government to interfere with the exhibition of the film. The court stated that the action of suspension was initiated to suppress the creative expression of an idea and of the lawful anguish of a citizen expressed on screen. The suspension of the exhibition of the film was ill-conceived. The state government ought to have firmly dealt with those who preach hatred and instigate violence against citizens of the country for whom home and hearth are Maharashtra. It is ironical that what was done was to suppress the creative expression of an idea and of the lawful anguish of a citizen expressed on screen. The order of suspension was held unsustainable.

Gajanan Lasure v CBFC Court: Bombay High Court Citation: WP No. 6029 of 2011 Coram: DD Sinha and AR Joshi, JJ Date: August 9, 2011 Facts: Petitioners challenged the legality, propriety and validity of the Censorship Certificate for public exhibition of the film, Aarakshan. Ratio: The court while dismissing the petition observed that no material or evidence was found present to hold that the film was likely to create a problem of law and order and neither had they made any reference to the dialogue or any incident in the film to prove thereof. Writ petition was filed without watching the film and on the apprehension that the same would endanger the public order was not well founded in law and too far-fetched and illusory. The Censor Board is the only appropriate authority which has the right to judge the film in light of objectives of the Act of 1952 and the Rules of 1983. The Petitioners had not placed before this Court any material evidence of any kind to hold that the film was wholly or any part thereof was likely to create problem of law and order or public order. Hence, Petitioners have not made out any case for issuance of direction to the Respondents to arrange a special screening of the film for them and their advocates before its release.

Nupur Talwar & Anr v/s Central Board of Film & Ors. Court: Bombay High Court Citation: Writ Petition No. 945 of 2014 Coram: V. M. Kanade, & A. K. Menon, JJ Date: May 9, 2014 Facts: The Petitioners, the parents of Aarushi

Talwar, have been convicted by the trial Court for the offence punishable under Section 302 of the Indian Penal Code, 1860 and sentenced to undergo R.I. for life. The allegation against them is that they had committed murder of their daughter Aarushi and their servant. The Petitioners alleged that since November 2013, after the verdict was pronounced by the trial Court, several newspaper reports were publicised in the press, in which it was stated that the Respondents had decided to produce a film on the facts of the said case. The movie in dispute is titled ‘Rahasya’ and is directed by Manish Gupta and produced by UVI Films Production Ltd. It was submitted by the Petitioners that since their appeal, which is filed in the Allahabad High Court is pending, the release and advertising of the aforementioned film would seriously prejudice their rights, since the Court, which is going to hear the appeal is likely to be prejudiced by whatever is depicted in the said film. They further submitted that the release of the film and / or publicising / advertising the said film would amount to contempt of Court and lead to the defamation of the Petitioners.

Ratio: The Court refused to grant any interim reliefs to the Petitioners as it was satisfied that there were a lot of dissimilarities in the case of the Petitioners and the Film and as such, therefore, it could not be said that the film is actual depiction of the Petitioners’ case. The Court based this decision on the fact that: ► The Central Board of Film Certification (CBFC) filed an affidavit stating that the movie is based on fiction and had no similarities to the case of Nupur and Rajesh Talwar, as name, place and incidents in the movie are all different from the Aarushi Talwar case; ► The CBFC further proclaimed that the movie carries a disclaimer at the start saying it is fictional and bears no resemblance to any person dead or alive and; ► The CBFC assured that care will be taken by the cast of the film in the interview that no reference of the Petitioners’ case will be made. It is also submitted that the disclaimer, which is mentioned in the film, will also come in the advertisement, which may be publicized by the Respondents.


201

The matter is pending before the Bombay High Court

X. CERTIFICATION OF FILMS FOR VIDEO FILMS AND SATELLITE EXPLOITATION Director General of Doordarshan v Anand Patwardhan Court: Supreme Court of India Citation: (2006) 8 SCC 433 Coram: Dr AR Lakshmanan and Lokeshwar

COMPETITION COMMISSION OF INDIA FICCI – Multiplex Association of India versus United Producers/Distributors Forum (UPDF) & Ors. Citation: Case No. 1 of 2009 Date: May 25, 2011

Ratio: The Supreme Court directed Doordar-

Facts: ► FICCI filed a complaint alleging that the respondents, United Producers/Distributors Forum (UPDF), Association of Motion and Television Program Producers (AMPTPP) and the Film and Television Producer’s Guild of India Ltd. (FTPGI) were behaving like a cartel. It was alleged that AMPTPP and FTPGI are members of UPDF and they produce and distribute almost 100% of Hindi films produced in India and thereby exercise almost complete control over the Indian film industry. The informant had further stated that UPDF has through their notice dated March 27, 2009, instructed the producers and distributors being members of AMPTPP and FTPGI not to release any new films for the purposes of exhibition at the multiplexes operated by the members of the informant. Multiplexes could release only some low budget movies during the period.

“The freedom of expression, which is legitimate and constitutionally protected, cannot be held to ransom on a mere fall of a hat. The film in its entirety has a serious message to convey and is relevant in the present context. Doordarshan being a State controlled agency funded by public funds could not have denied access to screen the respondent’s documentary except on specified valid grounds.”

► There was a conflict between the producers/distributors and the members of the informant on revenue sharing ratio between producer/ distributor and the multiplex owners. The revenue sharing ratio was usually around 47% in the first week, 38% in the second week, 30% in the third week and 25% in the fourth and subsequent week in Maharashtra. In the early 2009, the producers/distributors started demanding unreasonable sharing ratio at a flat rate of 50%. Aggrieved by the actions of UPDF, the members of informant approached the informant with complaints in this regard.

Singh Panta, JJ. Date: August 25, 2006

Facts: The Appellant decided not to telecast the documentary film made by the Respondent titled, Father, Son and Holy War, on the ground that it would give rise to communal violence and riots. The two-part documentary film dealt with social realities and issues such as patriarchy, violence, fundamentalism and suppression of women. Part-I was given an ‘U’ certificate and Part-II was given an ‘A’ certificate by the censor board. The Film Certification Board, a body of experts, was not of the view that the film promoted communal violence since otherwise, the film would not have been certified by the Board for public exhibition. shan to telecast the film. It observed that the Respondent has right to convey his perception on oppression of women, flawed understanding of manhood and evils of communal violence through documentary film produced by him.

The court further observed, “In our view, the Doordarshan being a National Channel controls airwaves, which are public property. The right of the people to be informed calls for channelizing and streamlining Doordarshan’s control over the national telecast media vehicle.”

XI. LANDMARK DISPUTES IN

► The Counter: The UPDF stated that they had not booked any profits whatsoever and have been facing losses due to non-cooperation from the exhibitors especially from the multiplexes. It was also stated that the producers are the owners of Intellectual Property Rights (IPR) envisaged in films created by the producer and cannot be compelled to supply or distribute their cinematographic

films or any work envisaged therein irrespective of desire of general public towards the film.

Held:

► The Commission held that the question of IPR did not arise as the multiplex owners were in no way infringing upon the Respondents’ IPR in films. Further, the Respondents failed to produce any evidence to prove the infringement of the IPR by the informants. ► The Commission, after considering the contentions of the opposite parties on merit and after elaborate discussions, concluded contravention of Section 3(3)(a) and 3(3)(b) of the Act against the opposite parties. Accordingly, the Commission directed all the 27 opposite parties to refrain from indulging in such anti-competitive practices in future and are further directed to file an undertaking to this effect within one month from the date of receipt of the order. A penalty of Rs 1 lakh was also imposed on each of the 27 opposite parties.

Film and Television Producers Guild of India v Multiplex Association of India (MAI) & Ors. Following the case filed by FICCI, the Film and Television Producers Guild of India filed a complaint with the CCI against Multiplex Association of India (MAI) & Ors which is pending before the CCI. The Guild alleged that the Respondents were behaving in a cartel-like manner and that had started drifting out of their earlier arrangement and imposing fresh unreasonable terms and conditions for the exhibition of films. The informant further alleged that the Respondents had directed all the multiplexes not to approach the film producers and distributors separately and if this directive was not followed, the members would face penal action. It is alleged that the multiplexes comprised around 60% of the entire revenue generated from the exhibition of films therefore enjoying an unsaid dominant position in the industry. The Respondents have now started deciding terms for the exhibition of films on the very last date causing a lot of distress to the informant’s members and forcing the informant’s members to enter into arrangements with the Respondents on unreasonable terms. The matter is pending before the CCI.


202

Annexure 2 television

Role and Rule of Law Media & Entertainment Industry

A. TITLE DISPUTES

Court: Bombay High Court Citation: Notice of Motion No.2945 OF 2009

spondent-TV Channel.” The court further made a reference to the policy guidelines for downlinking of television channels dated November 11, 2005. The Court while dismissing the petitions observed that it was open for the government to take action under 1995 Act, and thus their interference was not called for.

Coram: SC Dharmadhikari, J Date: September 25, 2009

Star India Private Ltd. vs Union of India (Sach ka Samna case)

Facts: The Plaintiff was the owner of the reality game show called, Dadagiri, telecast on the channel UTV Bindaas. The present suit was filed when the Plaintiff learnt that the Defendant is likely to telecast on its Zee Bangla TV channel, a Bengali Quiz show, Dadagiri Unlimited, which was likely to feature cricketer Saurav Ganguly. The Plaintiff sought an injunction against the Defendant from in any manner undertaking any telecast or broadcast on television of, Dadagiri Unlimited, or any trademark deceptively similar containing the mark, Dadagiri.

Court: Delhi High Court Citation: Writ Petition No. (C) 879/2010 Coram: SJ Muralidhar, J Date: September 30, 2011

Gen X Entertainment vs Zee News Ltd (Dadagiri)

in Suit No. 2083 of 2009

Ratio: The judge was of the view that the Plaintiff had failed to make out a prima facie case. Once there is no prima facie case made out warranting grant of interim injunction and finding that the programme/show on television channel of Plaintiffs and that of the Defendants is even conceptually not identical, then, balance of convenience is also not in favour of the Plaintiffs. He further observed that there is no question of Plaintiff suffering any irreparable loss or injury either. Hence interim injunction was denied.

B. DISPUTES ON OBSCENE CONTENT Deepak Maini vs Star Plus & Ors and Prabhat Kumar Pushp v Star Plus & another (Sach ka Samna case) Court: Delhi High Court Citation: WP(C) Nos.

10383/2009 10396/2009 Coram: AP Shah and Manmohan, JJ Date: July 29, 2009

and

Facts: The two writ petitions seeking ban on the telecast of, Sach Ka Samna, show were heard together. The Petitioners sought direction to the Respondents to take appropriate steps for regulating TV broadcasting and for setting up a regulatory body like the Central Board of Film Certification. The Petitioners further submitted that there was no rule / regulation or any regulatory mechanism to regulate the telecast of any television show. Ratio: The court observed that, “We are of

the opinion that there is no vaccum/hiatus in as much as the Programme and Advertisement Code framed under the 1995 Act, is applicable to downlinking of television channels like the re-

Facts: The Petitioner filed the present petition against an order issued by the Ministry of Information and Broadcasting, warning the channel to strictly adhere to the provisions of the Programme Code prescribed under Section 5 and Rule 6 of the Cable Television Networks (Regulations) Act, 1995 and Rules respectively. The warning was against the show, Sach Ka Saamna, of which three episodes were found in breach of the Programme Code and Cable Television Networks (Regulation) Act, 1995. Ratio: The court dismissed the writ petition. It

observed that by its very nature, television viewership of a reality show cannot be restricted. Any objectionable content can if at all be “taken off” the air meaning thereby that the regulatory step can at best be “corrective” and not “preventive”. Programme producers are expected to be aware of the objective standards sought to be put in place by the Programme Code and correctly gauge what is suitable for prime time unrestricted viewership. While certainly there have to be objective standards to evaluate content, from the standpoint of a reasonable and not a hypersensitive viewer, the Programme Code does give a fairly clear indication of what the broad contours of those standards are. The court further observed that for the first time in India, the Indian Broadcasting Federation (IBF) has come up with the Self Regulatory Content Guidelines (SRCG) for TV programmes. The guidelines talk of two broad categories of television programmes according to theme, subject matter treatment and audio visual depiction as “Generally Accessible” (G) and “Restricted Access” (R). Category G programmes can be broadcast “at all times” whereas Category R programmes can be scheduled for being telecast only between 11 pm and 5 am. The SRGC is eponymously self regulatory and the Broadcast Service Provider is expected to follow the norms concerning categorisation of a programme as “G” or “R”. As at present, in terms of the SRCG, a complaint concerning the content of a programme can be made to the Broadcasting Content Complaints Council (BCCC). The BCCC then reviews the particular programme complained against and determines, inter alia, in light of the SRGC, if it

is sustainable and if so whether any corrective measure is called for. The court held that with respect to the question whether the concerned two episodes of the show violated the Rules 6(1)(a), (d) and (i) of the Cable Television Network Rules, there was little doubt that it did violate Ryle 6 (1) (o)) of the Rules. In view of this conclusion, the court observed that the remand of the matter to the I&B ministry for a fresh decision on whether the two episodes of the serial violated Rules 6 (1) (a), (d) and (i) CTN Rules stood obviated. For telecasting the episodes of Sach Ka Saamna, which were not suitable for unrestricted exhibition at prime time on July 17 and 21, 2009, thus violating Rule 6 (1) (o) Cable Television Network Rules, the warning administered to Star Plus by the I&B Ministry by the impugned order was justified as a valid exercise of statutory power by the regulatory authority.

C. FORMAT RIGHTS DISPUTES Anil Gupta and Anr vs Kunal Das Gupta and Ors Court: Delhi High Court Citation: AIR 2002 Del 379 Coram: Vijender Jain, J. Date: March 6, 2002. Facts: The Plaintiff filed the present suit against the Defendants for an injunction against the telecast of the TV program, Shubh Vivah. The Plaintiff stated that he had discussed the concept of the reality TV show for matchmaking titled, Swayamvar, with the defendants. The Defendants decided to launch Shubh Vivah, which was based on the concept of Swayamvar conceived by the Plaintiff and the concept note was registered by the Plaintiff. Ratio: The court observed that when an idea has been developed to a stage that it could be seen as a concept which has some attractiveness so as to get an audience on a television programme and could be realised as an actuality, then the concept is capable of being the subject of confidential information. The court further observed that the Plaintiff had prima facie proved that the defendants were aware of the concept of Swayamvar and if the injunction was not granted, the Defendants would launch its own TV serial, Shubh Vivah, which will also televise matchmaking. If the same would be permitted it would amount to giving premium to the Defendants and robbing the Plaintiff of his work. The court granted an injunction against the Defendants restraining the broadcast of his program for four months.

Urmi Juvekar Chiang vs Global Broadcast News Limited and Anr. Court: Bombay High Court


203

Citation: Notice of motion No. (sic) of 007 in Suit (Lodging) No. 1467 of 2007 Coram: AM Khanwilkar, J Date: June 7, 2007

Facts: The Plaintiff moved the court alleging copyright infringement against the Defendants. The Plaintiff claimed that the concept of the Defendant’s show, Summer Showdown, was a copy of the Plaintiff’s registered literary work, Work in Progress. The said show was about people trying to solve other’s civic problems. The Plaintiff sought relief alleging breach of confidentiality by the Defendants and infringement of copyright. Ratio: The court held that the similarities

between the two shows were very substantial and the differences stated by the Defendants between the shows were not significant. The Court opined that the Plaintiff’s copyright has been infringed and laid down that, “For grant of ad-interim relief, it has to be ascertained whether work of Defendants is similar in material and substantial aspects with that of Plaintiff… Action of breach of confidence succeeds only if Plaintiff could identify clearly what was the information he was relying on and has to be shown that it was handed over in the circumstances of confidence and could be treated as confidential.” The court restrained the Defendants from broadcasting Summer Showdown, without the Plaintiff’s consent and breaching the confidential information imparted by the Plaintiff and contained in the concept note. The Defendants preferred an appeal. By an order dated June 18, 2007, the court upheld the June 7, 2007, order.

Zee Entertainment Enterprises Ltd. vs M/s. Gajendra Singh & Ors. Court: Bombay High Court Citation: Appeal No. 75 of 2008 in Notice of Motion No. 1648 of 2007 in Suit No. 1253 of2007 Coram: DK Deshmukh and AV Mohta, JJ Date: April 19, 2011

Facts: The Plaintiff, Zee, sought an order restraining the Defendants from making and broadcasting the television game show, Antakshari-the Great Challenge. The Plaintiff stated that Defendant’s show violated Zee’s copyright in the TV game show, Titan Antakshari, being broadcast on Zee, since September 1993. Plaintiff claimed copyright on the note contending that it was prepared when Defendant No.1 was under the contract of service. A single judge after going through a detailed comparison of various rounds in the two shows observed that undoubtedly there were differences between the two programmes. In substance, the concept of the show programme is a

test of the contestant’s knowledge and memory of Hindi film music. The Plaintiff is not entitled to a monopoly in the concept of testing a person’s knowledge and memory of Hindi film music. It is the manner in which the contestant’s knowledge and memory is tested, which accounts for novelty. The judge, after comparison of the contents of the shows, found that while there were certain similarities in the two shows, considering the number of dissimilarities, the plaintiff would not be entitled to a temporary injunction. However, considering the dissimilarities in both shows coupled with the specific instances of misrepresentation by the Defendant indicating that the Defendant’s show was nothing but a continuation of the Plaintiff’s game show and that the Plaintiff is connected with the same, the court granted a temporary injunction against telecasting the game show. An appeal was preferred against the single judge’s order.

Ratio: The division bench set aside the order

of single judge and vacated the injunction on the ground that the allegation of misrepresentation by the Defendant cannot be established only on the basis of press articles. The suit was eventually withdrawn by Zee on March 26, 2012 and hence disposed of.

Clockwork Studio vs Viacom 18 Media Pvt. Ltd. & Anr. Court: Bombay High Court Citation: Suit Lod. No. 941 of 2012 Coram: S Dharmadhikari, J. Date: April 13, 2012 Facts: The Plaintiff filed a suit seeking adinterim injunction against the Defendant’s program, Sound Trippin, which was to be telecast on the channel MTV, alleging that the Defendant had copied, reproduced or otherwise exploited the Plaintiff’s work being the concept notes of their proposed television programme titled, Sound Yatra, without their consent and therefore infringing original work of the Plaintiff. The Plaintiff claimed that they had conceptualised the idea of recording sounds while in a journey across the country and had shared the concept with the Defendant in the form of a presentation, but the Defendant used their concept without consent and credit. Ratio: The court held that there is no novelty in the concept of a travelogue/ journey on the television and therefore the same cannot be said to have been copied and/or infringed. The court further observed that the Plaintiff’s husband was involved in the same concept and idea and identical project for Star India Private Limited’s channel, Channel V, and was proceeded against in the Delhi High Court. The court was therefore of the view that there was nothing unique in the work of the Plaintiff which the court

could protect. The ad-interim relief was denied. The suit has been disposed of as withdrawn.

Twentieth Century Fox Film Corporation v/s Zee Telefilms Ltd & Ors Court: Delhi High Court Citation: 2012(51) PTC 465(Del) Coram: Anil Kumar, J. Date: July 10, 2012 Facts: The Plaintiff had filed this suit against Zee Telefilms Ltd seeking injunction against them from making, telecasting or broadcasting or in any other manner communicating to the public the television serial/cinematograph film titled ‘Time Bomb’ and in the interim to restrict them from doing anything without obtaining a license from the plaintiff and for directions to the defendants, their partners, servants, agents, representatives to hand over possession of the infringing copies and all other incriminating material including the original script and all plates for production of cinematograph film titled `Time Bomb’ for the alleged infringement of copyright of the plaintiff in its show titled “24”. The Plaintiff contended that the representatives of the Plaintiff had met with the principal officer of Defendant No. 1 wherein the Plaintiff had categorically communicated to the said officer that the Plaintiff would not license the rights of “24” to the Defendants. The Plaintiff alleged violation of its copyright inter-alia on the grounds that it’s serial was broadcast since 2001 and the defendants had ample opportunity to view the plaintiff’s serial and had full access to it. The story line of the plaintiff’s serial was further available in the text form on the plaintiff’s website and the defendants had shown its interest in obtaining license. However, when it was declined the defendants copied it and that the defendants have copied the format and structure, screenplay, story-line, character sketches, interplay of characters and sequence of events of the Plaintiff’s serial. Ratio: The Court upon hearing the arguments

of both parties in the interim application stage, was of the view that the Plaintiff had failed to make out a prima facie case and the balance of convenience lied with the defendants for the following reasons: (i) Upon viewing some of the episodes of the Plaintiff’s and the Defendant’s serial, the Court found many differences and was of the view that the concept utilized by the of defendants’ allegedly offending serial, are not the same as that of plaintiff. The Court observed that terrorism is very common thing and plaintiff cannot contend that it is unique to its serial. Considering the qualitative differences between the serial of the plaintiff and serial of the defendants, prima facie the inferences which can be drawn is that the story line of the plaintiff’s serial is substantially different from the story line of the defendant’s serial “Time Bomb”. (ii) Simi-


204

Role and Rule of Law Media & Entertainment Industry Annexure 2: television

larity in the presentation techniques cannot be the basis to contend that there has been a copyright violation, as there cannot be any copyright in the manner and the format of presentation. The Court observed that the plaintiff cannot claim a copyright on the basis of the presentation techniques which are enabled by the use of modern technology e.g. splitting the screen which is possible by advance camera and editing technique, inserting clock to show time which is very easy in modern cameras and the use of “Real Time” format a story told are 24 hours. The Court was of the view that based on the aforementioned reasons, at the interim stage, the plaintiff failed to make out prima facie case. Since the serial of the Defendant was already telecast, the Court was of the view that restraining the defendants from telecasting the serial further will cause more incon-

(iv) LIST OF NATIONAL SPORTS ASSOCIATIONS/ORGANISATIONS: 1. 2. 3. 4. 5. 6. 7.

Board of Control for Cricket in India Indian Olympic Association Archery Association of India Amateur Athletics Federation of India Badminton Association of India Basketball Federation of India Billiards and Snooker Federation of India

venience to the defendants and that defendant shall suffer irreparable loss if the plaintiff is granted injunction as has been sought by them. The interim applications were therefore dismissed. The suit was ultimately dismissed as withdrawn by the Plaintiff on October 11, 2012.

D. DISPUTES IN UNDERLYING WORKS Paras Jaiswal v/s Playtime Creations and Ors (Pammi Pyarelal) Court: Bombay High Court Citation: Notice of Motion (L) No. 1826 of 2013 in Suit (L) No. 782 of 2013

Coram: S.J. Kathawalla, J Date: September 21, 2013

8. Indian Body Building Federation 9. Indian Amateur Boxing Federation 10. All India Chess Federation 11. Women’s Cricket Association of India 12. Equestrian Federation of India 13. All India Football Federation 14. Gymnastics Federation of India 15. Indian Hockey Federation 16. Indian Women’s Hockey Federation

Facts: The suit was filed by the Plaintiff alleging infringement of copyright in his story “Mamla Personal Hai” by the Defendant No. 6 which was telecast on the serial “Pammi Pyarelal” on the channel Colors since July 15, 2013. The application for ad-interim reliefs was listed on September 21, 2013 whereas the last episode of the serial was due to be telecasted on October 5, 2013. Ratio: The Court declined the plea of the Plaintiff to appoint a commissioner to go through the serial/ pilot episode of the Defendants’ serial “Pammi Pyarelal” and directed the Defendants to handover DVD’s of the serial to enable the Court to go through the same and compare it with the script of the Plaintiff. The notice of motion and suit were ultimately disposed of on June 24, 2014 since the Plaintiff failed to remove objections in the suit.

17. 18. 19. 20. 21. 22. 23. 24. 25.

National Rifl e Federation of India Rowing Federation of India Squash Racket Federation of India Swimming Federation of India Table Tennis Federation of India All India Tennis Association Volleyball Federation of India Indian Weightlifting Federation Wrestling Federation of India


Annexure 3 radio M/s Music Broadcast Pvt. Ltd v. M/s Phonographic Performance Ltd., M/s Entertainment Network (India) Ltd. v M/s Phonographic Performance Ltd., M/s Radio Mid Day West (India) Ltd. v M/s Phonographic Performance Ltd., Puran Multimedia Pvt. Ltd. v Phonographic Performance Ltd., Synergy Music Entertainment Ltd. v M/s Phonographic Performance Ltd., M/s Entertainment Network (India) Ltd. v M/s Phonographic Performance Ltd. and Rajasthan Patrika Pvt. Ltd. v M/s Phonographic Performance Ltd. Forum: Copyright Board Citation: Case No. 1, 2, 6 of 2002,

3-1/2008-CRB(NZ), 3-2/2008-CRB(NZ) & 3-3/2008-CRB(NZ), 3-5/2008-CRB(WZ), 3-4/2008-CRB(NZ) and 3-6/2008-CRB(NZ) Coram: Dr Raghbir Singh, Satish Chandra and Rajendra Kumar Mishra. Date: August 25, 2010

Facts: A complaint was filed by a number of radio broadcasters and other independent bodies over a period of six years (between 2002 and 2008) seeking an order to allow shift from lump sum payment mode to a more conducive revenue sharing mode of payment with respect to the royalties payable from the advertising revenue generated by the radio stations to the copyright owners. The tariff for private FM Radio was Rs 2,400 per hour or 20% of the net advertisement revenue related to music, whichever was higher. The rate proposed by the complainant was 1% to 2.5% of the net advertising revenues and takes into consideration the respondent’s investment made in the song, the copyright worth as well as taking into consideration the international standards.

Role and Rule of Law Media & Entertainment Industry

205

the total revenue. It was further suggested that security in the form of bank guarantee be furnished by the broadcasters to PPL which is to be invoked in the event of failure to pay royalty at the prescribed rate and decided time.

September 1, 2011, whereby it reversed the order passed by the Copyright Board dated, March 28, 2011, in which the Board held that it did not have the power to grant an interim compulsory license.

Order: A rate of 2% of the net advertisement revenue was decided upon. Linking to advertisement revenue is easier to administer and has been preferred by the other jurisdictions and any other source of income of revenue by the broadcaster will not be taken into consideration.

The high court held that where the dispute was over the quantum of license fee, an interim compulsory licence had to be granted.

The Copyright Board directed the Registrar of Copyrights to grant the complainants separate licenses for communicating the work recorded in sound recording in the repertoire, present and future, of the respondent to the public by broadcast of revenue sharing basis subject to certain terms: ► 2% of net advertisement earnings of each FM radio station accruing from the radio business only for that radio station shall be set apart by each complainant for pro rata distribution of compensation to all music providers including the respondent herein, in proportion to the music provided by the respective music providers and broadcast by the complainant. Complainant shall be deemed to be music providers for the music provided by it and received by it free of cost and broadcast. ► Complainants shall furnish a bank guarantee of Rs 10,000 in favor of the respondent for each radio station. The sum of such bank guarantee shall be revised within two weeks after close of every quarter of the year, to such sum for which complainant was liable for payment of compensation for that quarter.

This royalty was payable to the registered copyright society, PPL, as well as the unregistered bodies such as T-Series, Yashraj and others vide their agreement. The radio broadcasters claimed that their advertisement revenue was decreasing due to several reasons including that the radio operators were allowed to host only limited sponsored content which limits the modes of generating income and caps the revenue which can be generated from the FM, with the rapid increase in the number of FM broadcasters, the individual share in the advertising revenue per station decreased.

► If the complainant fails to revise the bank guarantee, the respondents shall be at liberty to cancel the license without notice and recover the amount due.

The complainants did not seek the grant of compulsory license against T- Series or Yashraj. The complainants further submitted that the FM broadcasters were not responsible for the downfall in the physical formats (CDs, cassettes etc.). The complainants proposed an alternate method of collecting royalty i.e. the royalties must be paid in proportion to the usage and not on

(Arising out of SLP (C) Nos. 26581-26582 of 2011) /AIR2012SC2144 Coram: Altamas Kabir, Surinder Singh Nijjar and J Chelameswar, JJ Date: May 4, 2012

► The validity of license granted by the Registrar of the Copyright shall come to end on September 30, 2020.

Super Cassettes Industries Ltd. v Music Broadcast Pvt. Ltd. Court: Supreme Court of India Citation: Civil Appeal Nos. 4196-4197 of 2012

Facts: The appeal was preferred by the Appellant against a Delhi High Court order dated,

Ratio: The Supreme Court set aside the order of the Delhi High Court and held that the Copyright Board did not have the power to grant an interim compulsory licence.

The court observed that, “It is no doubt true, that Tribunals discharging quasi-judicial functions and having the trappings of a Court, are generally considered to be vested with incidental and ancillary powers to discharge their functions, but that cannot surely mean that in the absence of any provision to the contrary, such Tribunal would have the power to grant at the interim stage the final relief which it could grant.” “If the legislature had intended that the Copyright Board should have powers to grant mandatory injunction at the interim stage, it would have vested the Board with such authority. The submission made that there is no bar to grant such interim relief in Section 31 has to be rejected since the presence of a power cannot be inferred from the absence thereof in the Statute itself.”

Indian Performing Rights Society Ltd. v Aditya Pandey & Ors. Court: Delhi High Court Citation: FAO (OS)Nos. 423-424/2011 Coram: Pradeep Nandrajog and SP Garg, JJ Date: May 8, 2012 Facts: The main issue before the court was whether any person who acquires permission from the copyright owner of the derivative work to broadcast the work, additionally requires a similar permission from the owner of the underlying works i.e. the literary and musical works. The Appellant, a registered copyright society, filed an appeal against a July 28, 2011, order of a single judge that concluded that once a license is obtained from the owner or someone authorised to give it, in respect of a sound recording, for communicating it to the public, including by broadcasting, a separate authorisation or license is not necessary from the copyright owner or author of the musical and/or literary work. However, this does not mean that the musical and/or literary work can be otherwise “performed” in the public, (as opposed to communication of a sound recording to the public) without authorisation.

Ratio: The court dismissed the appeals and


206

Role and Rule of Law Media & Entertainment Industry Annexure 3: Radio

upheld the order of the single judge. The court held, “Though a conflict may at first sight seem to exist between Section 13(4) and Section 14(1) (a)(iii) on the one hand and Section 14(1)(c)(ii) on the other, a close scrutiny and a harmonious and rational instead of a mechanical construction of the said provisions cannot but lead to the irresistible conclusion that once the author

of a lyric or a musical work parts with a portion of his copyright by authorising a film producer to make a cinematograph film in respect of his work and thereby to have his work incorporated or recorded on the soundtrack of a cinematograph film, the latter acquires by virtue of Section 14(1)(c) of the Act on completion of the cinematograph film a copyright which gives him

the exclusive right inter alia of performing the work in public i.e. to cause the film in so far as it consists of visual images to be seen in public and in so far as it consists of the acoustic portion including a lyric or a musical work to be heard in public without securing any further permission of the author (composer) of the lyric or a musical work for the performance of the work in public.�


Annexure 4 internet A. DOMAIN NAME DISPUTES Satyam Infoway Ltd. v Sifynet Solutions Pvt. Ltd Court: Supreme Court of India Citation: AIR 2004 SC 3540 Coram: Ruma Pal and P Venkatarama Reddi, JJ Date: May 6, 2004 Facts: The Appellant company, which was

incorporated in 1995, had registered several domain names such as sify.net, sifymall.com, sifyrealestate.com in 1999. It took the Respondent, who started using the domain names, siffynet.net and siffynet.com in 2001, to court. The City Civil Court had granted interim injunction against the Respondent, which was reversed by the High Court. The Appellant company appealed against the decision of the High Court in the Supreme Court.

Ratio: The court held that the Appellant was

the prior user of the mark and thus had the right to debar the Respondent from eating the goodwill it may have built up in connection with the name. The court further held that the Appellant had adduced sufficient evidence to show that the public associates that the trade name, Sify, with the Appellant while the Respondent had produced little proof to establish the averments in support of its case. The Court further observed that it was difficult to hold that the Respondent would suffer any loss as the Appellant would unless an injunction is passed. Thus, the court held that there was a dishonest adoption of the Appellant’s tradename by the Respondent and the public association of the trade name, Sify, with the Appellant and thus the Appellant was entitled to the reliefs as claimed. The Court allowed the appeal and the decision of the High Court was set aside and that of the City Civil Court was affirmed.

(India TV) Independent News Service Pvt. Limited v India Broadcast Live LLC and Ors. Court: Delhi High Court Citation: MIPR2007(2)396, 2007 (35) PTC 177 Del

Coram: Sanjay Kishan Kaul, J Date: July 10, 2007 Facts: The Appellant was the owner of the

domain name, indiatvnews.com, which was registered as a trademark in 2003. In 2007, the Appellant discovered that the Respondent company based in the United States had been using the domain name, indiatvlive.com. The Appellant filed a suit against the Respondent for

permanently restraining the Respondents from using the mark. The Appellant also prayed for a mandatory injunction directing the transfer of the said domain name to the Appellant besides claiming damages and rendition of accounts.

Ratio: The court was of the opinion that both generic and descriptive names may be granted protection where the same has assumed a secondary meaning which identifies it either with particular goods or services or as being from a particular source and granted interim injunction. In light of the said order, the Respondent caused all users to be redirected to the site, indiabroadcastlive.com, tendered an unconditional apology and also put a disclaimer that they had no connection with the Appellant channel.

Times Internet Ltd. v Belize Domain Whois Service Ltd. and Anr Court: Delhi High Court Citation: MIPR2010(3)2004, 2011(45) PTC96(Del)

Coram: VK Jain, J Date: November 10, 2010 Facts: The Appellant had a website, india-

times.com, through which it provided various services to its users one of them being travel related services. The page for these services was travel.indiatimes.com. The Respondent had registered the domain name, indiatimestravel.com, which did not promote any travel activities and the link would provide details of sponsored advertisements and would earn revenue for the domain name owner. The Appellant filed suit for permanent injunction, damages and delivery of infringing the material and stated that the Respondent was reaping benefits out of the goodwill of the Appellant’s name. The Appellant further sought direction for transfer of the domain name, indiatimestravel.com, to the Appellant.

Ratio: The court held that considering the

commercial activities that take place over the internet today, the domain name is of great importance as it serves as a business identifier and thus the use of similar or identical domain name may lead to confusion in the mind of the user resulting in diversion of users. Further the court acknowledged that though there is no specific law protecting domain names and though the operation of the Trade Marks Act, 1999, itself is not extra territorial and may not allow for adequate protection of domain names, this does not mean that domain names are not to be legally protected to the extent possible under the laws relating to passing off. The Court was convinced that the use by the Respondent of the words, indiatimes, in their domain name

Role and Rule of Law Media & Entertainment Industry

207

was just to take advantage of the goodwill of the Appellant and thus was asked to transfer the domain name in the name of the Appellant in four weeks from the day of the judgment but did not allow any damages.

B. DEFAMATION Google India Private Limited v M/s Visaka Industries Limited Court: Andhra High Court Citation: Crl.P.No.7207 OF 2009 Coram: Samudrala Govindarajulu, J Date: April 19, 2011 Facts: In this case, an article was published on the Plaintiff`s website, captioned, Poisoning the System, where the names of the complainant and politicians such as G Venkata Swamy and Sonia Gandhi, who had nothing to do with the subject matter, were mentioned and were not removed by the website even after being notified. Ratio: The Andhra Pradesh High Court decided the case in favour of the complainant, but the appeal is still pending before the Supreme Court.

Vyakti Vikas Kendra, India Public Charitable Trust Through Trustee Mahesh Gupta & Ors v Jitender Bagga & Anr Court: Delhi High Court Citation: CS(OS) No. 1340/2012 Coram: Manmohan Singh, J. Date: May 9, 2012 Facts: The Plaintiff here was a registered public charitable trust constituted to implement and promote the spiritual, educational, social and development activities for the Art of Living in India, which is one of the largest volunteer based, humanitarian and educational organisations founded by spiritual leader Sri Sri Ravi Shankar. The Plaintiff filed a suit for permanent and mandatory injunction along with damages against defamatory materials posted against them by the Defendant on the website, www.blogger.com, which is owned by Google. Ratio: The court was of the opinion that the

balance of convenience lies in favour of the Plaintiff and accordingly passed an injunction whereby the website was asked to remove all such material and the Defendant was directed to restrain from posting any material against the Plaintiff or the Art of Living Foundation or any member of the Foundation or Sri Sri Ravi Shankar.


confederation of indian industry The Mantosh Sondhi Centre 23, Institutional Area Lodi Road New Delhi 110003 India Tel: +91 11 24629994-7 Fax: +91 11 24626149 Naik naik & company, advocates Head Office: 116 B, Mittal Towers, Nariman Point, Mumbai 400021, INDIA. Tel. : +91 22 40680200 +91 22 22854657 / 58 / 59 Fax : +91 22 22