ANAND BHUSHAN & ORS. vs. UNION OF INDIA

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* IN THE HIGH COURT OF DELHI AT NEW DELHI

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% Reserved on: 1 March, 2018
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Date of Decision: 28 May, 2018

+ W.P. (C) No. 3143/2013 & C.M. No.5958/2013

ANAND BHUSHAN & ORS. ..... Petitioners
Through Mr.Jagdish Sagar, Advocate

versus
UNION OF INDIA ..... Respondent
Through Mr.Sanjeev Narula, CGSC with
Mr.Abhishek Ghai, Advocate for
UOI.
Mr.Sagar Chandra, Ms.Ishani
Chandra & Mr.Ankit Rastogi,
Advocates for Intervener/ Music
Broadcast Pvt. Ltd.

CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MR. JUSTICE CHANDER SHEKHAR

CHANDER SHEKHAR, J.

The petitioners, by way of the present writ petition under Article 226
relying upon violation of Articles 14, 19(1)(c) & 19(1)(g) of the Constitution
of India, have prayed for striking down Sections 11(2), 12(2), 31, and
33A(2) of the Copyright Act, 1957, as amended by the Copyright
(Amendment) Act, 2012 (“Act”, for short) and Rules 3, 47(1), 56(3), 56(4),
56(5), 56(6), 57, 59(7) and 61(5) of the Copyright Rules, 2013 (“Rules”, for
short). Further, a prayer is also made to pass an order prohibiting the
WP(C) No.3143/2013 Page 1 of 36




respondent from making any appointment to the Copyright Board in terms of
the impugned provisions.
2. By order dated 22.08.2013, C.M.No.10983/2013 for amendment of
the petition was allowed and the amended writ petition was taken on record.
It is stated in the amended writ petition that the first petitioner, namely,
Anand Bhushan, is a shareholder and Joint Managing Director of M/s
Pitambar Publishing Co. Pvt. Ltd., petitioner No.2 herein. Hence, the
grievances raised by the petitioner No.2 are ipso facto the grievances of the
petitioner No.1.
3. Petitioner No.2 is a Company registered under the Companies Act,
1956. Petitioner No.3, the Indian Reprographic Rights Organization
(“IRRO”), is a registered Society under the Societies (Registration) Act,
1860 having its head office in Delhi, whereas petitioner No.4, the Federation
of Indian Publishers (“FIP”), is also a registered Society which is an apex
body representing the Indian Publishing Industry and engaged in promoting
and representing the interests of the said industry. It is submitted that the
petitioners‟ publishing business and commercial activities extend to the
whole country and beyond, specifically Delhi, which is a major centre of
publishing activities.
4. It is further submitted by the petitioners that their constitutional rights
are affected by the impugned provisions of the Rules, and in some cases the
Act, in particular, with regard to – (i) constitution of the Copyright Board;
(ii) certain provisions pertaining to the tariffs of Copyright Societies like
IRRO; (iii) certain provisions pertaining to the continuation of existing
Copyright Societies like IRRO; (iv) certain provisions affecting the
WP(C) No.3143/2013 Page 2 of 36




management of Copyright Societies like IRRO; and (v) certain compulsory
licensing provisions, the details of which are given as under:-
(a) Constitution of the Copyright Board: The petitioners including all the
members of IRRO and the FIP have a legitimate interest that the
appointments to the Copyright Board should be made transparently in a
constitutional manner; the members of the Copyright Board should be
appropriately qualified; and the Copyright Board should perform its
functions independently and are aggrieved by the provisions of the Act and
Rules which militate against the same. The legislative intent was only to
provide an efficacious quick remedy through the Copyright Board and not to
draw upon any technical expertise which is readily inferable from sub-
Section (3) of Section 19A of the Act. The petitioners also submitted that
the Board is a Tribunal, i.e. a quasi-judicial body exercising powers of a
judicial character, save for its existence, would be exercised by the Courts.
The Copyright Board is entrusted with important judicial powers, viz.
referred to in Section 19A, for the purpose of speedy remedy. The
contention of the petitioners is that Sections 11(2) & 12(2) of the Act suffers
from the vice of excessive delegation and further, Rule 3 of the Rules is
violative of Article 14 of the Constitution, being contrary to the principles
for appointment of Tribunals like the Copyright Board laid down by the
Supreme Court.

(b) Provisions pertaining to the tariffs of the Copyright Societies like
IRRO: The petitioners submitted that the amendment gives the Copyright
Board a limited corrective or provisional power in respect of the tariffs of
Copyright Societies. Rules 56(3), 56(4), 56(5), 56(6) & 57 of the Act
WP(C) No.3143/2013 Page 3 of 36




effectively give the Copyright Board roving powers to regulate and
interferes suo moto with every aspect of the tariff fixation. The petitioners
also submit that the Copyright Society is wholly competent to fix its own
tariff under section 35 of the Act. They also claim that the Board‟s powers
under Section 33A to remove unreasonable elements in the tariff do not
empower it to review the tariff as a whole.
(c) Provisions pertaining to the continuance of the existing Copyright
Societies like IRRO: The petitioners submitted that the Rules having come
into force on 14.03.2013 the period for re-registration under Section 33(3A)
expires on 13.05.2013 under Rule 47(1) which is ultra vires Section 33(3A)
of the Act that allows one year from the commencement of the 2012
Amending Act which itself came into force on 21.06.2012, hence, under the
Act, the petitioner No.3 and other pre-existing Copyright Societies have to
apply for registration until 20.06.2012.
(d) Provisions affecting the management of Copyright Societies like
IRRO: Before and after the recent amendments, the different provisions of
Chapter VII of the Act seek to ensure control over Copyright Societies by
the owners of rights administered by the Society. The provision under Rule
59(7) that membership of the Governing Council of a Copyright Society
should remain perpetually in compulsory biennial rotation is bound to create
confusion and discontinuity in the management of Copyright Societies and
there is no basis for it under the Act.
(e) Certain compulsory licensing provisions: Petitioners No.1, 2 & 4 are
aggrieved by the provisions of Section 31 of the Act as recently amended
which subjects them to an arbitrary and excessive compulsory licensing
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regime. They challenge clause (a) of the Section. The Statute provides that
once a work has been published then in the circumstances described in
Section 31(a) the Copyright Board after due hearing and inquiry may grant a
compulsory license to an applicant who claims that the work in question has
been withheld from the public after having once been published. But under
the amended Section 31, once the Copyright Board has granted such
compulsory license to one applicant, then it may without any further hearing
direct the granting of such compulsory licenses to any number of further
persons who may not even have sought them which is arbitrary and contrary
to the principles of natural justice.
5. Per contra, the respondent has claimed that the decision of the
Copyright Board as per Sections 6, 19A, 31, 31A, 31B, 31C, 31D, 32A, 50
and 72(1) of the Act cannot be considered as wide and unlimited as the final
orders of the Copyright Board can be challenged before the High Court.
They also added that under Section 11 of the Act with regard to the terms
and conditions of appointment of the Board, while Rule 3 of the Rules has
been made as powers of delegated legislation derived from Section 78(2)(a)
of the Act, Section 11 of the Act gives flexibility to the Government to
appoint a Chairman and two Members of the Board. It is not specified in
Section 11 that the Member should be judicial or technical. Therefore, the
relevant Rule 3 of the Rules has been drafted keeping in view of this
flexibility.
6. The respondent further submitted that Section 33A of the Act provides
for tariff scheme for Copyright Societies, which introduces a system of
transparency in fixing prices by Copyright Societies and it governs or
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regulates the system of fixation, collection and distribution of royalty. The
objective of this proposal is to allow scrutiny of tariff scheme of Copyright
Societies by the Copyright Board on receipt of appeals from any aggrieved
party to make the user of works to continue to pay royalties, pending the
appeal before the Copyright Board. The Copyright Board is empowered to
fix interim tariff, pending appeal on the tariff scheme. The Copyright
Society has to revise its tariff scheme based on the orders of the Copyright
Board, but the Board will not suggest a new tariff scheme as per the section
33A or relevant Rules.

7. With regard to the elements, the respondent submitted, „unreasonable
element‟, „anomaly‟ or „inconsistency‟ will be determined by the Board,
based on the evidence of unreasonable pricing or abuse of rights and
monopoly position by the Copyright Society. Section 33A introduces a
system of transparency in fixing process by Copyright Societies and it
governs or regulates the system of fixation, collection and distribution of
royalty. Fixing of rates or royalties by Courts or Tribunals is not uncommon
all over the world. Copyright Board does not take away the right of right
holders to fix royalties, but removes any unreasonable element, anomaly or
inconsistency therein. They submitted that Rule 47(1) is not ultra vires of
section 33(3A) of the Act, which directs the Copyright Society to re-register
itself within one year from coming into force of the Copyright Act, 2012.
The Rules came into force in March, 2013. As per Rule 47(1), the
application for re-registration has to be filed within two months of coming
into force of the Rules i.e. by 13.05.2013, so that the administrative process
of re-registration will be completed by 20.06.2013 i.e. within one year of the
Act coming into force.
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8. So far as the compulsory license is concerned, the respondent
submitted that Section 31 of the Act provides for compulsory license in case
of abuse of rights, such as, refusal of license by right owner or unreasonable
pricing by him. The compulsory license is a limitation on the exclusive right,
while deciding the matter, the Copyright Board only after giving a
reasonable opportunity of being heard to the owner of the copyright in the
work and after holding such inquiry, as it may deem necessary and if it is
satisfied that the grounds for such refusal are not reasonable, it directs the
Registrar of copyrights to grant to the complainant a compulsory license as
per the rates fixed by the Board.
9. It is also submitted by the respondent that Rule 56 introduces a system
of transparency in fixing prices by the Copyright Societies and it governs
and regulates the system of fixation, collection and distribution of royalties.
Further, Rules 59(6), 59(7) and 61(5) are in harmony with the legislative
intent of Section 35(3), which provides for equal membership of authors and
owners. Therefore, these Rules are not, in any way, violative of Articles
19(1)(c) & (g) of the Constitution.
10. We may note that the petitioners have given up their challenge to
Sections 11(2), 12(2) and 31 of the Act and also Rules 3 & 47(1) of the
Rules. Learned counsel for the petitioners submitted that the said challenge
has become infructuous. In respect of Section 31 of the Act, it is stated that
the provision is being interpreted by the Madras High Court. By order dated
22.02.2018, it was clarified that though the petitioners have given up the
challenge to the vires of Section 31 of the Act, but the said statement made
WP(C) No.3143/2013 Page 7 of 36




by the learned counsel for the petitioners would not be construed as
constructive res judicata or an opinion of this Court on merits.
11. Rules 56(3), 56(4), 56(5) & 56(6) read as under:-
―56.(3) The Tariff Scheme Shall indicate the separate rates for-
(a) different categories of users;
(b) different media of exploitation, such as telephone, broadcast
or internet;
(c) different types of exploitation whether by an individual or by
groups or whether single or multiple use or for advertising;
(d) different durations of use and territory; and
(e) any other differentiation factor indicated by the society, as it
may deem fit.
(4) While fixing the tariff the copyright society shall follow
the guidelines issue by any court or the Board, if any, and may
consult the user groups.
(5) The copyright society shall collect the royalities from a
licensee in advance where the Tariff Scheme provides for lump
sum payment of royalties. In cases where the Tariff Scheme
provides for payments in installments, each installment shall be
collected in advance. However, in cases where the Tariff
Scheme provides for the payment of royalties based on actual
use, the copyright society may collect an advance at the time of
issue of licence and settle the final payment based on actual use
at the end of the period for which the licence is issue or
granted.
Provided that the copyright society shall not receive any
payment in the nature of minimum guarantee from a licensee
whose royalty payments are based on actual use which are to
be settled with the society at the end of the licence period except
where, any exceptional circumstances are specifically included
in the Tariff Scheme and the individual case has been approved
by the Governing Council.
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(6) The copyright society may revise the Tariff Scheme
periodically but not earlier than a period of twelve months by
following the rules. It shall publish the date of coming into of
the revised Tariff Scheme at least before two months in advance
and the same shall be posted on its website.‖

12. The submission of the petitioners is that the aforesaid Rules impose
unreasonable, unjustified and fatuous restrictions on the Copyright Society
registered under Section 33 (3) of the Act, without any rationale. The
petitioners further submitted that the said Rules limit the frequency of tariff
revisions (whether upward or downward), which is beyond any rule-making
power conferred by the Act. Reliance is placed upon the judgment of the
Supreme Court in Kunj Behari Lal Butail and Ors. v. State of Himachal
Pradesh &Ors. , AIR 2000 SC 1069 . Relevant paragraph of the said
judgment relied upon by the petitioners reads as under:-
“ 14. A delegated power to legislate by making rules ‗for
carrying out the purposes of the Act‘ is a general delegation
without laying down any guidelines; it cannot be exercised as to
bring into existence substantive rights or obligations or
disabilities not contemplated by the provisions of the Act itself.‖

Reliance is also placed on Section 33A of the Act and it is urged that
these Rules are in conflict with the statutory mandate of Section 33A of the
Act and violate the same. The petitioners further submitted that alternatively,
if the said Rules are held to be intra vires the Act, then Section 33A(2) is
itself ultra vires the Act.
13. In order to examine the veracity of the aforesaid contention, we would
like to reproduce Section 33A of the Act, which reads:-


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―33A. Tariff Scheme by copyright societies.—
(1) Every copyright society shall publish its tariff scheme in
such manner as may be prescribed.
(2) Any person who is aggrieved by the tariff scheme may
appeal to the Copyright Board and the Board may, if satisfied
after holding such inquiry as it may consider necessary, make
such orders as may be required to remove any unreasonable
element, anomaly or inconsistency therein:
Provided that the aggrieved person shall pay to the
copyright society any fee as may be prescribed that has fallen
due before making an appeal to the Copyright Board and shall
continue to pay such fee until the appeal is decided, and the
Board shall not issue any order staying the collection of such
fee pending disposal of the appeal:
Provided further that the Copyright Board may after
hearing the parties fix an interim tariff and direct the aggrieved
parties to make the payment accordingly pending disposal of
the appeal.‖

Sub-section (1) to Section 33A of the Act states that every Copyright
Society shall publish its tariff scheme in the manner as may be prescribed.
Section 33A of the Act, therefore, accepts and recognizes that the Rules can
prescribe the manner in which the tariff scheme is required to be published.
Sub-Section (2) to Section 33A of the Act states that any person, who is
aggrieved by the tariff scheme, may file an appeal before the Copyright
Board, which is empowered to make orders as may be required to remove
any unreasonable element, anomaly or inconsistency therein. Copyright
Board for this purpose is entitled to hold an inquiry as it may consider
necessary. The Copyright Board, therefore, has been given the power to
modify the tariff scheme provided it comes to the conclusion that the tariff
fixed has an unreasonable element or suffers from an anomaly or
inconsistency and requires removal of any such unreasonable element,
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anomaly or inconsistency. The contention of the petitioners is that the
expression „unreasonable element‟ should be read as by applying the
doctrine of ' noscitur a sociis' , meaning thereby, the expression
„unreasonable‟ appearing in Section 33A(2) of the Act must take its colour
and meaning from the words „anomaly and inconsistency‟ in the tariff
scheme.
14. The rule of construction of ' noscitur a sociis' holds that the meaning
of a word is to be judged by the company it keeps. It is a rule wider than the
rule of „ ejusdem generis‘; rather the latter rule is only an application of the
former. This doctrine applies when two or more words, which are
susceptible of analogous meaning, are coupled together. They are
understood to be used in the cognate sense, for associated words take their
meaning from one another. Philosophy behind the doctrine is that the
meaning of the doubtful word may be ascertained by reference to meaning
of words associated with it. The more general is restricted to a sense
analogous to a less general. The word „anomaly‟ would refer to any
ambiguity or doubt. Inconsistency normally refers to incomparability and
variation that is unacceptable. Expression „unreasonable element‟ has its
own contours and relevance. „Unreasonable element‟ would refer to
unreasonable fixation of tariff or any of the clauses of the tariff scheme.
Three expressions therefore refer to different situations and it must be borne
in mind that noscitur a sociis is merely a rule of construction and it cannot
prevail in cases where it is clear that the wider words have been deliberately
used in order to make the scope of the defined word correspondingly wider.
The object and purpose behind Sub-section (2) of Section 33A of the Act is
to confer power to the Copyright Board to make enquiry as may be
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necessary and to decide whether the tariff fixed by the Copyright Society has
an unreasonable element, anomaly or inconsistency therein. We would not
like to curtail or water down the scope and ambit of language employed and
adopted, given the importance to the Copyright Board for the said purpose.
Sub-section (1) to Section 33A empowers and authorizes the Copyright
Society to publish tariff and while publishing the tariff they have to keep in
mind that the tariff is reasonable and also does not suffer from any anomaly
or inconsistency.
15. In State of Bombay and Others v. The Hospital Mazdoor Sabha and
Others , (1960) 2 SCR 866, the Supreme Court was faced with the question
whether the Industrial Disputes Act, 1947 was applicable to a group of
hospitals. It was observed that the answer to the said question would depend
on the interpretation of the definition of “industry” prescribed by Section
2(j) of the Industrial Disputes Act, 1947. The Supreme Court refused to
apply the rule of noscitur a sociis in order to give a narrow interpretation to
the relevant words in the definition of “industry” in Section 2(j). Relevant
paragraph of the said decision reads as under:-
―9. ….The argument is that certain essential features or
attributes are invariably associated with the words ―business
and trade‖ as understood in the popular and conventional
sense, and it is the colour of these attributes which is taken by
the other words used in the definition though their normal
import may be much wider. We are not impressed by this
argument. It must be borne in mind that noscuntur a sociis is
merely a rule of construction and it cannot prevail in cases
where it is clear that the wider words have been deliberately
used in order to make the scope of the defined word
correspondingly wider. It is only where the intention of the
legislature in associating wider words with words of narrower
WP(C) No.3143/2013 Page 12 of 36

16. In Municipal Corporation of Greater Bombay v. Bharat Petroleum
Corporation Ltd. , (2002) 4 SCC 219, the Supreme Court in regard to the
rule of noscitur a sociis and ejusdem generis observed as under:-
―7. The learned counsel appearing on either side invited our
attention, at considerable length, to the judgments of the High
WP(C) No.3143/2013 Page 13 of 36

17. In Shriram Vinyl & Chemical Industries vs. Commissioner of
Customs, Mumbai , (2001) 4 SCC 286, the benefit of a notification
recommending grant of lower rate of duty was denied to the appellants. The
WP(C) No.3143/2013 Page 14 of 36




Supreme Court disagreeing with the narrow interpretation given by the
Tribunal to the relevant words in the notification, held as under:-

18. We do not think that the aforesaid interpretation, in any way, runs
counter and is contrary to the ratio in Entertainment Network (India) Ltd.
WP(C) No.3143/2013 Page 15 of 36




v. Super Cassette Industries Ltd., 2008(13) SCC 30 . Relevant paragraphs of
the said judgment relied upon by the petitioners read as under:-

XXXXX

WP(C) No.3143/2013 Page 16 of 36

Reference was also made to the Federation of Hotels & Restaurants
Association of India v. UOI and Ors. , 2011 (46) PTC 169 (Del), relevant
paragraph of which reads as under:-

19. It is equally well settled that in exercise of power of judicial review,
this Court is not to examine merits of delegated legislation. A writ petition
for judicial review of the Rules would lie only on certain well defined
grounds. Courts cannot always go into the merits or demerits of a policy
reflected in the substratum of the Rules. The parameters of judicial review of
subordinate legislation have been succinctly stated in various decisions of
the Supreme Court. In Cellular Operators Association of India and Others
v. Telecom Regulatory Authority of India and Others , (2016) 7 SCC 703, it
was held as under:-
―34. In State of T.N. v. P. Krishnamurthy [State of T.N. v. P.
Krishnamurthy, (2006) 4 SCC 517] , this Court after adverting
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to the relevant case law on the subject, laid down the
parameters of judicial review of subordinate legislation
generally thus: (SCC pp. 528-29, paras 15-16)

WP(C) No.3143/2013 Page 18 of 36




of the rule is not with reference to any specific
provision of the enabling Act, but with the object and
scheme of the parent Act, the court should proceed
with caution before declaring invalidity.‖

20. In Union of India and Another v. Azadi Bachao Andolan and
Another , (2004) 10 SCC 1, the Supreme Court held as under:-
―52. The question whether a particular delegated legislation
is in excess of the power of the supporting legislation conferred
on the delegate, has to be determined with regard not only to
specific provisions contained in the relevant statute conferring
the power to make rules or regulations, but also the object and
purpose of the Act as can be gathered from the various
provisions of the enactment. It would be wholly wrong for the
court to substitute its own opinion as to what principle or policy
would best serve the objects and purposes of the Act; nor is it
open to the court to sit in judgment over the wisdom, the
effectiveness or otherwise of the policy, so as to declare a
regulation ultra vires merely on the ground that, in the view of
the court, the impugned provision will not help to carry through
the object and purposes of the Act…‖

21. The scope of judicial review of the impugned Rules is not agape and a
power to substitute. A piece of subordinate legislation does not carry the
same degree of immunity which is enjoyed by a statute passed by a
competent Legislature. Subordinate legislation may be questioned on any of
the grounds on which plenary legislation is questioned. In addition, it may
also be questioned on the ground that it does not conform to the statute
under which it is made. It may further be questioned on the ground that it is
contrary to some other statute. The proposition finds support from the
decision of the Supreme Court in Indian Express Newspapers (Bombay)
WP(C) No.3143/2013 Page 19 of 36




Private Ltd. and Others v. Union Of India and Others, (1985) 1 SCC 641,
the relevant extract is reproduced hereunder:-
―75. A piece of subordinate legislation does not carry the
same degree of immunity which is enjoyed by a statute passed
by a competent Legislature. Subordinate legislation may be
questioned on any of the grounds on which plenary legislation
is questioned. In addition it may also be questioned on the
ground that it does not conform to the statute under which it is
made. It may further be questioned on the ground that it is
contrary to some other statute. That is because subordinate
legislation must yield to plenary legislation. It may also be
questioned on the ground that it is unreasonable, unreasonable
not in the sense of not being reasonable, but in the sense that it
is manifestly arbitrary. In England, the Judges would say
―Parliament never intended authority to make such rules. They
are unreasonable and ultra vires‖. The present position of law
bearing on the above point is stated by Diplock, L.J.
in Mixnam's Properties Ltd. v. Chertsey Urban District
Council [(1964) 1 QB 214 : (1963) 2 All ER 787 : (1963) 3
WLR 38 (CA)] thus:
―The various special grounds on which subordinate
legislation has sometimes been said to be void … can,
I think, today be properly regarded as being
particular applications of the general rule that
subordinate legislation, to be valid, must be shown to
be within the powers conferred by the statute. Thus,
the kind of unreasonableness which invalidates a bye-
law is not the antonym of ‗reasonableness‘ in the
sense in which that expression is used in the common
law, but such manifest arbitrariness, injustice or
partiality that a court would say: ‗Parliament never
intended to give authority to make such rules; they
are unreasonable and ultra vires‘...if the courts can
declare subordinate legislation to be invalid for
‗uncertainty‘ as distinct from unenforceable...this
must be because Parliament is to be presumed not to
have intended to authorise the subordinate legislative
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authority to make changes in the existing law which
are uncertain.‖
78. That subordinate legislation cannot be questioned on the
ground of violation of principles of natural justice on which
administrative action may be questioned has been held by this
Court in Tulsipur Sugar Co. Ltd. v. Notified Area Committee,
Tulsipur [AIR 1980 SC 882 : (1980) 2 SCR 1111 : (1980) 2
SCC 295] , Rameshchandra Kachardas Porwal v. State of
Maharashtra [(1981) 2 SCC 722 : AIR 1981 SC 1127 : (1981)
2 SCR 866] and in Bates v. Lord Hailsham of St.
Marylebone [(1972) 1 WLR 1373 : (1972) 1 A11 ER 1019 (Ch
D)] . A distinction must be made between delegation of a
legislative function in the case of which the question of
reasonableness cannot be enquired into and the investment by
statute to exercise particular discretionary powers. In the latter
case the question may be considered on all grounds on which
administrative action may be questioned, such as, non-
application of mind, taking irrelevant matters into
consideration, failure to take relevant matters into
consideration, etc, etc. On the facts and circumstances of a
case, a subordinate legislation may be struck down a arbitrary
or contrary to statute if it fails to take into account very vital
facts which either expressly or by necessary implication are
required to be taken into consideration by the statute or, say,
the Constitution. This can only be done on the ground that it
does not conform to the statutory or constitutional requirements
or that it offends Article 14 or Article 19(1)(a) of the
Constitution. It cannot, no doubt, be done merely on the ground
that it is not reasonable or that it has not taken into account
relevant circumstances which the Court considers relevant.

22. Maharashtra State Board Of Secondary And Higher Secondary
Education and Another v. Paritosh Bhupeshkumar Sheth and Others,
(1984) 4 SCC 27, was cited with approval in the case of Union Of India and
Another v. Azadi Bachao Andolan (supra), wherein, the Supreme Court
observed the question whether a particular piece of delegated legislation,
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whether a rule or regulation or other type of statutory instrument, is in
excess of the power of subordinate legislation conferred on the delegate has
to be determined with reference only to the specific provisions contained in
the relevant statute conferring the power to make the rule, regulation, etc.
and also the object and purpose of the Act as can be gathered from the
various provisions of the enactment. It was further held that it would be
wholly wrong for the Court to sit in judgment over the wisdom and
effectiveness or otherwise of the policy laid down by the regulation-making
body and declare a regulation to be ultra vires, merely on the ground that in
the view of the Court, the impugned provisions will not help to serve the
object and purpose of the Act. So long as the body entrusted with the task of
framing the rules or regulations acts within the scope of the authority
conferred on it, in the sense that the rules or regulations made by it have a
rational nexus with the object and purpose of the statute, the court should not
concern itself with the wisdom or efficaciousness of such rules or
regulations. It is exclusively within the province of the Legislature and its
delegate to determine, as a matter of policy, how the provisions of the statute
can best be implemented and what measures, substantive as well as
procedural would have to be incorporated in the rules or regulations for the
efficacious achievement of the objects and purposes of the Act. The Court
further set out the well settled legal position pertaining to bye-laws and held
as under:-
―21. The legal position is now well-established that even a
bye-law cannot be struck down by the Court on the ground of
unreasonableness merely because the Court thinks that it goes
further than ―is necessary‖ or that it does not incorporate
certain provisions which, in the opinion of the Court, would
have been fair and wholesome. The Court cannot say that a
WP(C) No.3143/2013 Page 22 of 36




bye-law is unreasonable merely because the Judges do not
approve of it. Unless it can be said that a bye-law is manifestly
unjust, capricious, inequitable, or partial in its operation, it
cannot be invalidated by the Court on the ground of
unreasonableness. The responsible representative body
entrusted with the power to make bye-laws must ordinarily be
presumed to know what is necessary, reasonable, just and fair.
In this connection we may usefully extract the following oft-
quoted observations of Lord Russel of Killowen
in Kruse v. Johnson [(1898) 2 QB 91, 98, 99 : 78 LT 647 : 46
WR 630 (DC)] (quoted in Trustees of the Port of
Madras v. Aminchand Pyarelal [(1976) 3 SCC 167, 178 : AIR
1975 SC 1935 : (1976) 1 SCR 721, 733] ) (SCC p. 178, para
23):
―When the Court is called upon to consider the bye-
laws of public representative bodies clothed with the
ample authority which I have described, accompanied
by the checks and safeguards which I have mentioned,
I think the consideration of such bye-laws ought to be
approached from a different standpoint. They ought to
be supported if possible. They ought to be, as has
been said, ‗benevolently interpreted‘, and credit
ought to be given to those who have to administer
them that they will be reasonably administered.
The learned Chief Justice said further that there may
be cases in which it would be the duty of the court to
condemn bye-laws made under such authority as
these were made (by a county council) as invalid
because unreasonable. But unreasonable in what
sense? If, for instance, they were found to be partial
and unequal in their operation as between different
classes; if they were manifestly unjust; if they
disclosed bad faith; if they involved such oppressive
or gratuitous interference with the rights of those
subject to them as could find no justification in the
minds of reasonable men, the court might well say,
‗Parliament never intended to give authority to make
such rules; they are unreasonable and ultra vires‘.
WP(C) No.3143/2013 Page 23 of 36




But it is in this and in this sense only, as I conceive,
that the question of reasonableness or
unreasonableness can properly be regarded. A bye-
law is not unreasonable merely because particular
Judges may think that it goes further than is prudent
or necessary or convenient, or because it is not
accompanied by an exception which some Judges may
think ought to be there.‖
We may also refer with advantage to the well-known decision of
the Privy Council in Slattery v. Naylor [(1888) 13 AC 446 : 59
LT 41 : 36 WR 897 (PC)] where it has been laid down that
when considering whether a bye-law is reasonable or not, the
Court would need a strong case to be made against it and
would decline to determine whether it would have been wiser or
more prudent to make the bye-law less absolute or will it hold
the bye-law to be unreasonable because considerations which
the Court would itself have regarded in framing such a bye-law
have been overlooked or rejected by its framers. The principles
laid down as aforesaid in Kruse v. Johnson [(1898) 2 QB 91,
98, 99: 78 LT 647: 46 WR 630 (DC)] and Slattery
v. Naylor [(1888) 13 AC 446: 59 LT 41 : 36 WR 897 (PC)]
have been cited with approval and applied by this Court
in Trustees of the Port of Madras v. Aminchand Pyarelal
[(1976) 3 SCC 167, 178: AIR 1975 SC 1935: (1976) 1 SCR 721,
733].‖

23. In Kunj Behari Lal Butail and Ors. v. State of H.P. & Ors. (supra),
the Legislative Assembly of Himachal Pradesh enacted Himachal Pradesh
Ceiling on Land Holdings Act, 1972, to consolidate and amend laws relating
to ceilings on landholdings in the State. As per sub-Section (1) to Section 26
of the said Act the State Government was empowered, by notification to
make rules to carry out the purposes of the Act. In exercise of the powers
conferred by the Act, the State Government framed Himachal Pradesh
Ceiling on Land Holdings Rules, 1973. As per amendment to Rule 3 of the
WP(C) No.3143/2013 Page 24 of 36




said Rules, the State Government restricted certain landowners from
alienating their land. The Court was of the opinion that the prohibition
imposed by the said Rules did not advance the object of the Act. It was
further held that it is very common for the legislature to provide for a
general rule making power to carry out the purpose of the Act. When such a
power is given, it may be permissible to find out the object of the enactment
and then see if the rules framed satisfy the test of having been so framed as
to fall within the scope of such general power confirmed. If the rule making
power is not expressed in such a usual general form, then it shall have to be
seen if the rules made are protected by the limits prescribed by the parent
Act.
24. In our opinion, the aforesaid case relied upon by the petitioners
stands on a different footing and can be clearly distinguished and discerned
from, in view of the principle enactment and Section 33A of the Act. The
Statement of objects and reasons, in the introductory part of the Act, clearly
provides the object of the enactment. The Legislation provides rule-making
power to carry out the purpose of the Act. The Rules framed satisfy the test
of having so framed as to fall within the scope of such general power
confirmed and the Rules framed are protected by the limits prescribed by the
parent Act.
25. The contention is that the Copyright Society must have been given
very wide powers to fix the tariffs which should not be unnecessarily and
unreasonably interfered. The Statement of objects and reasons of the Act
stated that the existing law relating to copyright was contained in the
Copyright Act, 1911 of the United Kingdom as modified by the Indian
WP(C) No.3143/2013 Page 25 of 36




Copyright Act, 1914. Indian parliament could enact independent self-
contained law on the subject of copyright in the light of growing public
consciousness of the rights and obligations of authors and in the light of
experience gained in the working of the existing law during the preceding
years. New and advanced means also call for certain amendments in the
existing law. Adequate provisions were needed for fulfillment of
international obligations in the field of copyright. A complete revision of
law of copyright, therefore, seemed inevitable, and the Bill attempted such a
revision. Keeping the above objects in mind the Copyright Bill was passed
by both the Houses of Parliament and received the assent of the President on
th
4 June, 1957. We are of the opinion that the Rules do not negate the
principal enactment and it cannot be said that they are repugnant to or in
derogation of the object and purpose, the principal enactment seeks to
achieve.
26. In the present case, sub-section (2) to Section 33A of the Act is not in
challenge before us. The expression “unreasonable element”, would have to
be interpreted and examined by the Copyright Board in facts of the given
case. The power of the interference is to be exercised within the confines of
expressions „unreasonable element‟, „anomaly‟ or „inconsistency‟ in the
tariff.
27. We have quoted above the sub-rule (3) to (6) of Rule 56. Sub-clauses
(a) to (e) to Rule 56(3) stipulates that the tariff scheme shall indicate the
separate rates for different categories of users; different media, such as
telephone, broadcast or internet; different types whether by an individual or
by groups or whether single or multiple use or for advertising; different
WP(C) No.3143/2013 Page 26 of 36




durations of use and territory and any other differentiation factor indicated
by the Society, as it may deem fit.
28. We do not think that the aforesaid stipulation, in any way runs counter
to or defeats the right of the Copyright Society to fix and claim reasonable
tariff. Sub-Section (1) to Section 33A of the Act gives power to every
Copyright Society to publish the tariff scheme in such manner as may be
prescribed. Sub-rule (3) to Rule 56 precisely prescribes the manner in which
tariff is to be published. By stipulating the mandatory fields in Clauses (a)
to (d) and Clause (e) it leaves it open to the Copyright Society to fix any
other differentiation factor indicated by the Society, as it may deem fit. It
stipulates and gives the parameters and divergent aspects that must be kept
in mind while fixing the tariff. The object and the purpose behind Clauses
(a) to (d) is to ensure that different Copyright Societies should publish tariffs
which have some form of uniformity and consistency for the users to be able
to understand and appreciate them. It is a regulatory exercise and not an
exercise which curtails freedom and discretion of Copyright Societies to fix
tariff. It is also to be ensured that the tariffs fixed are uniformly applied to
the users and not the pick and choose policy followed. There cannot be any
doubt that sub-rule (3) to Rule 56 of the Rules has a salutary purpose and
object behind it, which does not in any manner curtail and infringe the right
of the Copyright Societies. We also do not think that it is correct to hold that
the sub-rule (2) to Rule 56 would, in any manner, curtail or restrict the
power of the Government to frame rules as to the manner in which the tariff
scheme is to be published. Reference in this regard can be made to Section
78 of the Act. We may note that the petitioners have not challenged the
power of the Government to prescribe a manner in which the copyright
WP(C) No.3143/2013 Page 27 of 36




scheme is to be published under sub-section (1) of Section 33A. Section 78
of the Act authorizes the Central Government to publish rules in the Official
Gazette. Sub-section (2) to Section 78 of the Act states that in particular, and
without prejudice to the generality of the foregoing power, the Central
Government can make rules to provide for all or any of the matters
stipulated in Clauses (a) to (h). Clause (CCA) of sub-section (2) to Section
78 of the Act reads as under:-
―(CCA) the manner in which a copyright society may publish
its Tariff Scheme under sub-section (1) of section 33A.‖

Sub-rule (3) to Rule 56 of the Rules has been enacted pursuant to the
power given under Clause (CCA) to sub-section (2) to Section 78 of the Act
read with Section 33 A (1) of the Act. Thus, it passes the test of being a valid
subordinate legislation as it does not exceed the limits prescribed by the
parent act.
29. Sub-rule (4) to Rule 56 stipulates that while fixing the tariffs, the
Copyright Society shall follow the guidelines issued by any Court or the
Board, if any, and may consult the users groups. This sub-rule, we do not
think, in any way curtails or unreasonably restricts power of the Copyright
Society to fix the tariff. In case the Board has issued any guideline, which is
asserted to be unreasonable and contrary to law, the same can be
challenged in accordance with law. With reference to the guidelines by the
Board, we would observe that this power follows and flows as the Board is
an Appellate Authority under sub-Section (2) to Section 33A. Powers to
issue guidelines by the Board would be exercised when necessary and
justified.
WP(C) No.3143/2013 Page 28 of 36




30. Sub-rule (5) to Rule 56 stipulates that the Copyright Society shall
collect the royalties from the licensee in advance where the tariff scheme
provides for lump sum payment of royalties. In cases, where the tariff
scheme provides for payments in installments, each installment shall be
collected in advance. To this extent, the petitioners have no grievance and
do not challenge the sub-rule (5) to Rule 56. The grievance is raised against
the latter portion of sub-rule (5) which stipulates that where the tariff scheme
provides for the payment of royalties based on actual use, the Copyright
Society may collect an advance at the time of issue of licence and settle the
final payment based upon actual use at the end of the period for which the
licence was issued or granted. The said stipulation is also just and fair and,
in fact, there is no specific challenge. The grievance of the petitioners is
primarily to the proviso to sub-rule (5). The said proviso states that
minimum guarantee would normally not be imposed on the licensee where
royalty has to be paid on the basis of actual use at the end of the licence
period. However, at the same time, it stipulates that in exceptional
circumstances the tariff scheme can provide minimum guarantee and the
individual case has to be approved by the Governing Council. It is not
referred to any governing authority or third person but the Governing
Council of the Copyright Society itself.
31. We again do not think that the proviso itself is unreasonable or
contrary to law or Section 33A (2) of the Act. The sub-rule (5) to Rule 56 is
again enacted in terms of power conferred under sub-section (1) to
Section 33A of the Act which empowers the Government to prescribe the
manner in which tariff would be published. It ensures that the Copyright
Society shall not receive any payment in the nature of minimum guarantee
WP(C) No.3143/2013 Page 29 of 36




from a licensee whose royalty payments are based on actual use, which are
to be settled with the Society at the end of the licence period, unless they
have an exception which is specified and so stated in the tariff scheme.
Therefore, where a Copyright Society deems it necessary and appropriate, it
can so spell in any individual case with the approval of their Governing
Council. The proviso again ensures that the tariff schemes by different
Copyright Societies have a uniform structure and the licensees are not left
with any doubt or debate as to the amount paid. Wherever Copyright
Societies for special reasons feel that an individual should pay minimum
guarantee for actual user licensee, they are entitled to impose the said
condition. In case, the condition has an unreasonable element or suffers
from any anomaly or inconsistency, it can be interfered by the Copyright
Board. Sub-rule (6) to Rule 56 states that the Copyright Society may revise
the tariff scheme periodically but not earlier than a period of 12 months by
following the Rules. It also stipulates that the date of revised tariff scheme
should be published at least two months in advance and it shall be posted on
the website. This Rule ensures that the tariffs do not change every now and
then and there is consistency and severity in the tariff so published. We do
not think that the said stipulation is repugnant to Section 33A (1) of the Act.
The aforesaid sub-rule has been made within the power of Section 33A(1) of
the Act read with Clause (CCA) to sub-section (2) to Section 78 of the Act.
It is obvious that in case, tariff keeps on changing and/or altering, licensee
would face difficulties and problems. It also ensures that the Copyright
Societies do not indulge in unnecessarily slashing or increase their rate every
now and then and which would not be in the interest of the licensee and fair
WP(C) No.3143/2013 Page 30 of 36




and just competition. Normally, frequent changes would not take place in
case there is an effective and true competition.
32. Rule 57 of the Act reads as under:-
―57. Appeal to the Board on Tariff Scheme –
(1) Any person aggrieved by the Tariff Scheme may appeal to
the Board under section 33 A along with the fee specified in
the Second Schedule.
(2) The Board, if satisfied with the grounds of the appeal, shall
(a) serve a copy of the appeal to the copyright society; and
(b) give an opportunity to the appellant and also, to the
copyright society, to be heard and may take such
evidence in respect of the appeal, as it may deem fit.

(3) The appellant shall pay to the copyright society any interim
tariff fixed by the Board that has fallen due before filing an
appeal to the Board.
(4) The Board may after hearing the parties fix an interim tariff
and direct the appellant to make the payment accordingly
pending disposal of the appeal.
(5) The Board shall determine the Tariff Scheme of the
copyright society under section 33A after taking into
consideration.

(a) the prevailing standards of royalties in regard to such
commercial exploitation of works; and
(b) such other matters as may be considered relevant by the
Board.
(6) The Board shall dispose of the appeal within a period of
three months from the date of its filing.‖

33. Learned counsel for the petitioners submitted that he would restrict his
challenge to sub-rule (5) to Rule 57 which states that the Board shall
WP(C) No.3143/2013 Page 31 of 36




determine the tariff scheme of the Copyright Society under Section 33A of
the Act after taking into consideration, the prevailing standards of royalties
in regard to such commercial exploitation of works and such other matters,
as may be considered relevant by the Board.
34. As discussed earlier, the Board under sub-section (2) to Section 33A
of the Act while deciding the appeal of any person, is entitled to conduct
enquiry as may be necessary and required, thereafter it can pass orders so
required to remove any unreasonable element, anomaly or inconsistency
therein. We have already interpreted “unreasonable element”, where we
have held that it is not to be read as meaning the same as “anomaly” and
“inconsistency.” Sub-rule (5) to Rule 57 ensures that the Board while
examining the question whether the tariff was unreasonable can examine the
prevailing standards of royalties to such commercial exploitation of works.
This, we do not think, is an unreasonable or illegal stipulation which the
Board must take into consideration while deciding the appeal. If an appeal is
filed, the Board can issue general directions on whether the tariff is
unreasonable and suffers inherent inconsistency.
35. Clause (b) sub-rule (5) to Rule 57 hardly requires any challenge. The
Board can, however, take into consideration, all such matters which are
relevant. Thus, wide discretion and power has been given to the Board to
examine Section 33A of the Act. The power to enact the said Rule can be
traced to Clause (CCB) to sub-section (2) to Section 78 which reads as
under:-
―(CCB). The fee which is to be paid before filing an appeal
to the Copyright Board under sub-section (2) of the Section
33A.‖
WP(C) No.3143/2013 Page 32 of 36




In fact, other sub-clauses which are relevant are (CB), (CD) and (CE)
under the said clause. The Central Government by the Rules may impose
conditions subject to which the Copyright Society may be registered under
sub-Section (3) to Section 33 of the Act. Therefore, the power to enact the
sub-rule (7) to Rule 59 is apparent and cannot be questioned.
36. Sub-rule (7) ensures that the Copyright Society is democratic and
represents the Chairman and the other members of the Governing Council
who are elected in every two years. It is important here to note that the
special Governing Council has been postulated in Clause (b) to Rule 59 (1),
which stipulates that every Copyright Society shall have a Governing
Council with a Chairman and a minimum of six other members. The powers
have been given to the Governing Council to fix the tariff.
37. We may clarify that in the present case, the petitioners have not raised
the question of conflict between the Act, i.e., Copyright Act or the Rules i.e.
the Copyright Rules, 2013 with any other statutory enactment, like the
Companies Act or Cooperative Societies Act or Societies Act. We have not
examined and commented on the said aspect and if any issue arises, the
same may be considered and decided by the Court in accordance with law.
38. Lastly, the challenge is made to sub-rule (5) to Rule 61 which reads as
under:-
―(5). Every member of the society shall have equal voting
rights in the General Body meetings.‖

39. The aforesaid Rule incorporates principle of equal suffrage, i.e., each
vote would carry the same weight and value. Learned counsel for the
WP(C) No.3143/2013 Page 33 of 36




petitioners submitted that the said Rule would be contrary to and violate
Section 35(3). Section 35 of the Act reads as under:-
―35. Control over the copyright society by the author and
other owners of right.—
(1) Every copyright society shall be subject to the collective
control of the author and other owners of right under this Act
whose rights it administers (not being [authors and other
owners of right] under this Act administered by a foreign
society or organisation referred to in sub-section (2) of section
34) and shall, in such manner as may be prescribed,—
(a) obtain the approval of such authors and other
owners of right] for its procedures of collection and
distribution of fees;
(b) obtain their approval for the utilisation of any
amounts collected as fees for any purpose other than
distribution to the author and other owners of right; and
(c) provide to such owners regular, full and detailed
information concerning all its activities, in relation to the
administration of their rights.
(2) All fees distributed among the author and other owners
of right shall, as far as may be, be distributed in proportion to
the actual use of their works.
(3) Every copyright society shall have a governing body with
such number of persons elected from among the members of the
society consisting of equal number of authors and owners of
work for the purpose of the administration of the society as may
be specified.
(4) All members of copyrights society shall enjoy equal
membership rights and there shall be no discrimination
between authors and owners of right in the distribution of
royalties.‖

WP(C) No.3143/2013 Page 34 of 36




We would record that sub-section (4) to Section 35 provides that all
members of the Copyright Society shall enjoy equal membership rights and
there shall be no discrimination between authors and owners of right in the
distribution of royalties. However, our attention is drawn to sub Section (2)
to Section 35 which states that the fees distributed among the authors and
other owners of right as far as may be in proportion to usage of their works.
This, in no way, conflicts with universal and equal voting right envisaged
and provided under sub-rule (5) to Rule 61. Sub-rule (5) to Rule 61
stipulates that every member of the Society shall have equal voting rights in
the General Body meetings. The said sub-rule does not state that the fee
distributed and paid amongst the authors shall not be proportionate to actual
usage of their works. It only applies to General Body meetings and voting
either for the election by the General Body to the Governing Council. Each
member of the Copyright Society has equal voting rights. This is clearly the
mandate and is so postulated in Section 35 of the Act. In a way sub-rule (6)
to Rule 61 is a reflection and concords with sub-section (4) to Section 35 of
the Act.
40. Learned counsel for the petitioners has urged that some of the
members of the Copyright Societies cannot be treated as legitimate or
righteous members under the Act. It is also stated that new members
enrolled by the Governing Body would carry and have equal vote. This
argument, according to us carries no weight for enrollment of new members
is with the Copyright Society and enrollment has to be made in terms of the
rules framed for the said purpose. This argument is hypothetical and based
on assumption that a wrong or ineligible person would be enrolled as a
member of the Copyright Society, but we would not decide this writ petition
WP(C) No.3143/2013 Page 35 of 36




on any such assumption. In case a wrong or ineligible person is enrolled, he
can always be removed from the Copyright Society by following the
procedure in accordance with law.
41. We are of the opinion that the petitioners have failed to point out that
the impugned Rules have not been made for carrying out and in accord
with the purpose and object of the Act. Impugned Rules do not bring into
existence or create substantive rights or obligation not contemplated
and beyond what is envisaged and postulated by the provisions of the Act
itself.
42. In view of the aforesaid discussions, we have no hesitation to hold
that the prayers made in the petition are untenable in law, since the
impugned Rules are in consonance with the objects and reasons and in
consonance with the main enactment, i.e., the Copyright Act, 1957. There is
no anomaly or absurdity in the Rules under challenge rather they are in the
interest of public at large in addition to the statutory mandate. The writ
petition is accordingly dismissed. Pending application also stands disposed
of. Parties are left to bear their own costs.

CHANDER SHEKHAR, J

SANJIV KHANNA, J

MAY 28, 2018/B
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