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In Al-Hamd Tradenation v. Phonographic Performance Limited, 2025:DHC:3695, the Delhi High Court delivered an important judgment clarifying the scope of compulsory licensing under Section 31 of the Copyright Act, 1957 and held that a copyright owner cannot defeat public access to copyrighted works by imposing arbitrary or unreasonable licensing conditions. The Court held that where licence fees demanded are unreasonable and effectively prevent lawful access to copyrighted works, such conduct amounts to withholding the work from the public and constitutes refusal under Section 31 of the Copyright Act.
The judgment is significant as it recognises that compulsory licensing is not confined to cases of express refusal alone and may also extend to situations where copyright owners insist on commercially prohibitive terms that make access illusory.
Brief Facts
The petitioner was organising a private corporate event for approximately 50 attendees at a hotel in Delhi. During the booking process, the petitioner was informed that a licence from Phonographic Performance Limited (“PPL”) was necessary for playing music forming part of PPL’s repertoire.
PPL demanded a licence fee of ₹ ₹55,440 under its standard tariff applicable to events falling within the relevant attendee bracket.
Considering the limited scale of the event, the petitioner proposed payment of ₹16,500 and requested PPL to proportionately determine the fee based on the size and nature of the event. The request was rejected.
Faced with insistence on the tariff and consequent infringement proceedings, the petitioner approached the Delhi High Court under Section 31 of the Copyright Act read with Rule 6 of the Copyright Rules, 2013 seeking grant of compulsory licence and fixation of reasonable licence terms.
Refusal Under Section 31 Includes Unreasonable Licensing Terms
The principal issue before the Court was whether compulsory licensing can be invoked where a copyright owner is willing to license the work but only on unreasonable terms.
PPL argued that Section 31 applies only in cases of outright refusal and that publication of tariff rates itself demonstrates availability of works to the public.
Rejecting this contention, the Court held that refusal under Section 31 cannot be interpreted narrowly.
Relying upon Entertainment Network (India) Ltd. v. Super Cassette Industries Ltd., (2008) 13 SCC 30, the Court reiterated that mere willingness to grant a licence is not determinative. What is relevant is whether access is made available on fair and reasonable terms.
The Court observed:
“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 a copyright.”
The Court therefore held that refusal is not confined to express denial but also includes constructive refusal through commercially unreasonable conditions.
Comparative Tariff of RMPL Considered to Assess Reasonableness of PPL’s Demand
An important aspect of the judgment was the Court’s reliance on prevailing market licensing practices while assessing the reasonableness of the licence fee demanded by PPL.
The Court referred to Rule 8 of the Copyright Rules, 2013, which governs determination of compensation or royalty in cases of compulsory licences and expressly permits consideration of prevailing standards of royalties for publication or public performance of works while fixing compensation.
Applying this framework, the Court examined the tariff structure adopted by Recorded Music Performance Ltd. (“RMPL”) as a relevant market benchmark and noted that for events of a comparable nature and scale, RMPL’s licence rates were substantially lower than those demanded by PPL.
The Court observed that insistence on a significantly higher flat fee, without accounting for the size and character of the event, reflected an inflexible and disproportionate licensing approach. This comparative assessment reinforced the Court’s conclusion that PPL’s licensing terms effectively deprived the petitioner of access to the repertoire and amounted to withholding the works from the public, thereby attracting Section 31 of the Copyright Act.
Copyright Protection Does Not Permit Arbitrary or Prohibitive Tariffs
The Court recognised that copyright grants valuable proprietary rights but clarified that such rights are not absolute.
The Court observed that compulsory licensing under Section 31 exists to maintain a balance between private ownership and public access.
Significantly, the Court held:
“The Respondent cannot be given a free hand to procure any arbitrary and unreasonable licence fees.”
The Court further held that permitting copyright owners to impose unreasonable tariffs without scrutiny would dilute the purpose of Section 31 and undermine access to copyrighted works.
Public Performance of Sound Recordings Covered Under Section 31
PPL argued that compulsory licensing under Section 31 does not extend to public performance of sound recordings.
Rejecting this submission, the Court interpreted Sections 2(y), 2(ff), 14 and 31 of the Copyright Act and held that the expression “work” includes sound recordings and that communication to the public includes public performance.
The Court therefore held that refusal to permit public performance through unreasonable licensing conditions falls within Section 31(a).
The Court observed:
“Performance in public of a sound recording, when refused, which includes raising unreasonable and arbitrary demand towards tariff/licence fee, would attract the rigours of Section 31(a) of the Copyright Act.”
Publication of Tariff Does Not Exclude Judicial Review
The Court also rejected the argument that publication of tariff rates immunises licensing practices from judicial scrutiny.
Referring to Section 33A of the Copyright Act, the Court observed that the statutory framework itself contemplates examination of unreasonable tariff structures.
Accordingly, publication of a tariff does not automatically render the pricing fair, nor does it deprive users of the remedy of compulsory licensing.
Conclusion
The judgment is a significant reaffirmation that copyright protection cannot become a mechanism for excluding public access through arbitrary or commercially disproportionate licensing practices. By considering prevailing market tariffs, including RMPL’s pricing structure, the Delhi High Court clarified that refusal under Section 31 is not confined to express denial and may include unreasonable licence demands that effectively withhold copyrighted works from the public. The ruling reinforces that while copyright owners retain proprietary rights over their repertoire, such rights cannot be exercised through inflexible or exclusionary licensing structures that defeat fair and equitable access.
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