Full Judgment Text
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
DECIDED ON : OCTOBER 12, 2017
+ CS(COMM) 625/2017
SAREGAMA INDIA LIMITED ..... Plaintiff.
Through : Mr.C.M.Lall, Sr.Advocate, with Mr.Ankur
Sangal, Ms.Sucheta Roy and Ms.Pragya
Mishra, Advocates.
versus
EROS DIGITAL FZ LLC & ANR ..... Defendants
Through : Mr.Dayan Krishnan, Sr.Advocate, with
Ms.Anshu Bhanot and Mr.Sanjeev,
Advocates
CORAM:
HON'BLE MR. JUSTICE S.P.GARG
S.P GARG, J. (ORAL)
IA No.10917/2017 (u/O 39 R-1&2 CPC)
1. The instant application for seeking ad-interim injunction till the
disposal of the suit has been preferred by the plaintiff; it is contested by
the defendants.
2. The plaintiff has instituted a suit for permanent injunction for
restraining the infringement of its copyright; rendition of accounts and
damages against the defendants. It is averred that the plaintiff is the
owner of copyright in a wide variety of sound recordings published in
India. The plaintiff has acquired rights in numerous songs, including
IA No.10917/2017 in CS(COMM) 625/2017 Page 1 of 10
regional and Hindi film as well as non-film sound track music from the
respective producers thereof. The plaintiff is also the owner of
copyright in the musical works (musical compositions) as well as the
literary works (lyrics) embodied in the said sound recordings which
were assigned to it by the producers of the respective sound recordings.
The plaintiff is also the producer of number of sound recordings and by
virtue of the same, is also the owner of copyright of the underlying
musical and literary works of the same. The plaintiff holds the exclusive
right to ‘grant a license’ or ‘authorize the doing’ of any of the acts
provided for in the Copyright Act, 1957.
3. The plaintiff entered into a Content License Agreement dated
13.07.2015 with defendant No.1 whereby the defendant No.1 was
granted a non-exclusive license to exploit the copyrighted works of the
plaintiff through the defendants’ website ‘www.erosnow.com’ and their
mobile application ‘ErosNow’. By virtue of the said agreement, the
defendant No.1 was permitted to use the plaintiff’s content of
‘streaming’ and ‘online caching’ wherein the latter permitted the end-
users i.e. clients of the defendants to access temporary copies of the
plaintiff’s Works in cache memory of internet enabled devices. The
License Agreement was granted for a period of twenty four months
effective from 13.07.2015. As per the terms of the License Agreement,
defendant No.1 was required to pay the plaintiff a Minimum Guarantee
amount of ` 9,50,00,000/-; he was also liable to pay a streaming fee of
` 0.14 per stream in case the value of the utilization of the plaintiff’s
Works exceeded the Minimum Guarantee amount. The defendant did
not pay the installments in time for which he was served with various
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notices. The said license has now come to an end by efflux of time on
12.07.2017. It is alleged that the defendants are guilty of copyright
infringement due to default in making due payment to the plaintiff. The
defendants continue to infringe the copyright on account of continued
exploitation of the work despite expiry of the agreement. Currently the
defendant No.1 is in default of payment of 6,12,50,000/- besides
`
interest and penal interest. It is further pleaded that defendants are in the
process of selling their business to third parties. Since both the
defendants are based out-side India, grave hardship and significant
damage would be caused to the plaintiff if immediate steps to restrain
them from selling the business were not taken.
4. The defendants put appearance on advance notice and sought
time to file response to the application. In reply, the defendants have
denied the plaintiff’s allegations. It is vehemently urged that this Court
has no territorial jurisdiction to entertain the present suit due to Clause
29 of the License Agreement whereby the parties had consented to
submit to the jurisdiction of the courts at Kolkata. It is further averred
that the disputes between the parties are purely contractual and there is
no infringement of any copyright after the expiry of the License
Agreement on 12.07.2017 by e-mail dated 25.07.2017. Defendant No.1
confirmed that contents of the plaintiff were taken down from Eros
Now platform. The said email was never disputed by the plaintiff. It is
further stated that no cause of action arose against defendant No.2; there
was no privity of contract between the plaintiff and defendant No.2; and
he has been unnecessarily dragged to litigation.
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5. Learned Senior counsel for the plaintiff urged that this Court has
territorial jurisdiction to entertain the present suit under Section 20 (c)
of the Code of Civil Procedure; Section 62 of the Copyright Act 1957
and Section 134 of Trademarks Act. Relying upon FAO (OS) 494/2015
titled Ultra Home Construction Pvt.Ltd. vs. Purushottam Kumar
Chaubey & Ors. decided by this Court on 20.01.2016, the learned
Senior counsel contended that Principal Office of the plaintiff was at
Kolkata; it has subordinate branch office at Delhi and cause of action
arose in Delhi. Hence, Delhi is the place where the plaintiff
additionally seek ad-interim injunction under Section 134 of
Trademarks Act and Section 62 of the Copyright Act. Reliance was
also placed on FAO(OS) 506/2013 titled World Wrestling
Entertainment vs.Reshma Collection 2014 SCC OnLine Del 2031. It
was urged that the License Agreement was not entered into with
defendant No.2. There was thus, no bar to file the instant suit by the
plaintiff at Delhi.
6. Learned Senior counsel for the defendants relying upon Indian
Performing Rights Society Ltd.Vs.Sanjay Dalia & Anr. (2015) 10 SCC
161; A.B.C.Laminart Pvt.Ltd.& Anr. Vs.A.P.Agencies, Salem (1989) 2
SCC 163; Federal Express Corporation Vs. Fedex Securities Ltd. &
Ors. (in Case CS No.2213/2014) and Lakshmi Raj Shetty &
Anr.Vs.State of Tamilnadu (1988) 3 SCC 319 urged that this Court has
no territorial jurisdiction to entertain and decide the suit as Clause 29 of
the License Agreement ousted its jurisdiction in express terms. On
merits, it was urged that the defendants have not exploited any
plaintiff’s Works after the expiry of the License Agreement. No
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reliance can be placed upon the newspaper report being in the nature of
hearsay secondary evidence.
7. The entire case of the plaintiff is based upon the License
Agreement dated 13.07.2015 which was executed with defendant No.1.
The said License Agreement was not only entered into but was also
acted upon. In terms of the said License Agreement, several
installments were admittedly paid to the plaintiff on various dates.
Apparently, the parties are governed by the terms and conditions
incorporated in the License Agreement. It is also not in dispute that the
said License Agreement was entered into between the parties at
Kolkata. It was entered into between Saregama India Ltd.; an existing
Company under the Companies Act having its office at No.2
Chowringee Approach, Kolkata-700072 and Eros Digital FZ LLC; an
existing company incorporated under the laws of United Arab Emirates
th
(UAE) and having its Registered office at 12 Floor, Fujalrah Creative
City Free Zone, Fujalrah Media Group, Creative Tower, PO Box 4422,
Fujalrah, United Arab Emirates. It was signed by the authorized
signatory Mr. G.B. Aayeer, Chief Financial Officer of Saregama India
Ltd. Clause 29 of the License Agreement reads as under:
“This Agreement shall be governed by and interpreted in
accordance with the Laws of India and in case of any matter or
dispute arising here from, the High Court of Calcutta, India alone
shall have jurisdiction.”
8. Needless to say the parties have expressly excluded jurisdiction
of any other court except High Court of Kolkata. The agreement
specifies the jurisdiction of the courts at a particular place i.e. Kolkata.
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It is not in dispute that the courts at Kolkata have jurisdiction to
entertain the instant suit as the cause of action arose there due to the
execution of the License Agreement. It has further come on record that
the installments in terms of License Agreement were made at Kolkata.
The invoices were raised at Kolkata and the payments were credited in
the account maintained by the plaintiff at Kolkata i.e. ICICI Bank Ltd.
Kolkata Branch, Rasol Court 20, Sir R.N.Mukherjee Road, Kolkata.
The defendants do not reside at Delhi.
9. Without delving into the controversy if any part of cause of
action arose in Delhi due to the alleged infringement of plaintiff’s work
under the Copyright Act or Trademark Act, it is well-settled that where
there are two or more competent courts which can entertain a suit
consequent upon a part of the cause of action having arisen therewith, if
the parties to the contract agree to vest jurisdiction in one such court to
try the dispute which might arise as between themselves, the agreement
would be valid. This cannot be understood as the parties contracting
against the statute. The said agreement would not be contrary to public
policy or in contravention of Section 28 or 23 of the Indian Contract
Act.
10. In Swastik Gases P. Ltd. vs. Indian Oil Corporation Ltd.
MANU/SC/0654/2013 in para (31) it was held:
“In the instant case, the appellant does not dispute that
part of cause of action has arisen in Kolkata. What
appellant says is that part of cause of action has also
arisen in Jaipur and, therefore, Chief Justice of the
Rajasthan High Court or the designate Judge has
jurisdiction to consider the application made by the
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appellant for the appointment of an arbitrator under
Section 11. Having regard to Section 11(12)(b) and
Section 2(e) of the 1996 Act read with Section 20(c) of
the C.P.C., there remains no doubt that the Chief
Justice or the designate Judge of the Rajasthan High
Court has jurisdiction in the matter. The question is,
whether parties by virtue of Clause 18 of the agreement
have agreed to exclude the jurisdiction of the courts at
Jaipur or, in other words, whether in view of Clause 18
of the agreement, the jurisdiction of Chief Justice of the
Rajasthan High Court has been excluded. For answer
to the above question. Court have to see the effect of the
jurisdiction clause in the agreement which provides
that the agreement shall be subject to jurisdiction of the
courts at Kolkata. It is a fact that whilst providing for
jurisdiction clause in the agreement the words like
'alone', 'only', 'exclusive' or 'exclusive jurisdiction' have
not been used but this is not decisive and does not make
any material difference. The intention of the parties--by
having Clause 18 in the agreement--is clear and
unambiguous that the courts at Kolkata shall have
jurisdiction which means that the courts at Kolkata
alone shall have jurisdiction. It is so because for
construction of jurisdiction clause, like Clause 18 in the
agreement, the maxim expressio unius est exclusio
alterius comes into play as there is nothing to indicate
to the contrary. This legal maxim means that
expression of one is the exclusion of another. By
making a provision that the agreement is subject to the
jurisdiction of the courts at Kolkata, the parties have
impliedly excluded the jurisdiction of other courts.
Where the contract specifies the jurisdiction of the
courts at a particular place and such courts have
jurisdiction to deal with the matter, an inference may
be drawn that parties intended to exclude all other
courts. A clause like this is not hit by Section 23 of the
Contract Act at all. Such clause is neither forbidden by
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law nor it is against the public policy. It does not offend
Section 28 of the Contract Act in any manner.”
11. Similar are the observations of the Hon’ble Supreme Court in
A.B.C.Laminart Pvt.Ltd.& Anr. Vs.A.P.Agencies, Salem (supra):
16 So long as the parties to a contract do not oust the
jurisdiction of all the Courts which would otherwise have
jurisdiction to decide the cause of action under the law it
cannot be said that the parties have by their contract
ousted the jurisdiction of the Court. If under the law
several Courts would have jurisdiction and the parties
have agreed to submit to one of these jurisdictions and not
to other or others of them it cannot be said that there is
total ouster of jurisdiction. In other words, where the
parties to a contract agreed to submit the disputes arising
from it to a particular jurisdiction which would otherwise
also be a proper jurisdiction under the law their
agreement to the extent they agreed not to submit to other
jurisdictions cannot be said to be void as against public
policy. If on the other hand the jurisdiction they agreed to
submit to would not otherwise be proper jurisdiction to
decide disputes arising out of the contract it must be
declared void being against public policy. Would this be
the position in the instant case?
21 From the foregoing decisions it can be reasonably
deduced that where such an ouster clause occurs, it is
pertinent to see whether there is ouster of jurisdiction of
other Courts. When the clause is clear, unambiguous and
specific accepted notions of contract would bind the
parties and unless the absence of ad idem can be shown,
the other Courts should avoid exercising jurisdiction, As
regards construction of the ouster clause when words like
'alone', 'only, 'exclusive' and the like have been used there
may be no difficulty. Even without such words in
appropriate cases the maxim 'expressio unius est exclusio
alterius' expression of one is the exclusion of another may
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be applied. What is an appropriate case shall depend on
the facts of the case. In such a case mention of one thing
may imply exclusion of another. When certain jurisdiction
is specified in a contract an intention to exclude all others
from its operation may in such cases be inferred. It has
therefore to be properly construed.
12. In the instant case Clause 29 of the agreement is clear and
unambiguous. The parties by this clause have bound themselves that in
any matter arising between them under the said agreement, it is the
court in Kolkata alone which will have jurisdiction. Once parties bound
themselves as such, it is not open for them to choose a different
jurisdiction as such as suit would be in violation of the said agreement.
13. It is relevant to note that in the plaint, the plaintiff did not aver at
all that the license agreement was executed at Kolkata. It was also not
revealed that the installments were paid in the bank account maintained
by the plaintiff at Kolkata.
14. The averments in the plaint are to be considered to ascertain if
this Court has territorial jurisdiction to entertain the suit. The plaintiff
has alleged infringement of its copyright by the defendants. Merely
because defendant No.2 is not a party to the license agreement it cannot
be inferred that the suit qua defendant No.2 alone can be entertained by
this Court.
15. Since this Court has no territorial jurisdiction to entertain the suit,
relief as claimed cannot be granted by this Court. The plaintiff will have
to approach the court of competent jurisdiction to avail the relief
claimed.
16. The application is disposed of in the above terms.
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CS(COMM) 625/2017
17. Since this Court has no territorial jurisdiction to entertain the suit,
as discussed above, the plaint be returned to the plaintiff for
presentation before the court having jurisdiction i.e. the High Court of
Calcutta.
18. Copy of the order be given dasti to the counsel for the parties.
S.P.GARG
(JUDGE)
OCTOBER 12, 2017/ sa
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