The Delhi High Court has clarified that in view of the pending litigation before the Supreme Court on the substantive question of law regarding the Plaintiff’s (which operates well-known high-profile pubs and bars) authority to grant licenses, and the explicit clarification from the Supreme Court that its stay order in the Azure Hospitality case is limited to the parties in that matter, the legal position has not definitively changed for third parties like the Defendant.
The Court said that the subsequent pronouncement in Azure Hospitality creates doubt about the Plaintiff’s ability to issue licenses, without having registration as a Copyright Society granted under Section 33(3) of the Copyright Act, 1957, but the matter is not finally settled. Therefore, to maintain the balance of convenience and protect the interests of both parties pending the disposal of the interim applications, the Court directed that the most appropriate course of action is to continue the ad hoc arrangement vide order dated April 10, 2024 that was previously in place.
A Single Judge Bench of Justice Tejas Karia therefore, directed the Defendant No. 1 (Pass Code Hospitality) to deposit a further amount of Rs. 15 Lakhs as an ad hoc license fee for the period from May 04, 2025 to February 02, 2026. From this amount, the Plaintiff (Phonographic Performance) is permitted to withdraw Rs. 8 Lakhs with the balance of Rs. 7 Lakhs to be kept in an interest-bearing Fixed Deposit by the Registry.
The Bench noted that the initial arrangement from April 10, 2024 was established to balance the equities between the parties without prejudice to their rights and contentions, pending the final decision on the interim injunction application. On the contention of the Defendant that the Azure Hospitality decision created a “change in circumstances” that warranted discharging the ad hoc arrangement, the Bench observed that the Supreme Court, in an SLP challenging the Azure Hospitality decision, had stayed the direction contained in Paragraph 27 of that judgment.
The Bench analysed the Supreme Court’s orders dated April 21, 2025 and June 19, 2025, and observed that the Supreme Court had clarified that its orders would apply inter se the parties to that specific proceeding (Azure Hospitality), and no third party could take benefit from them. The Bench reasoned that since Paragraph 27 of Azure Hospitality (which directed payment as per RMPL tariff) was based on prior observations, including those in Paragraph 25.5, the stay on Paragraph 27 effectively meant the observations in Paragraph 25.5 also remained stayed.
Lastly, the Bench concluded that the core issue regarding the Plaintiff’s ability to issue licenses without registration under Section 33 of the 1957 Act is currently sub judice before the Supreme Court, and the Defendant’s application for a refund is also pending before this Court.
Briefly, the Plaintiff, Phonographic Performance Limited, who claims ownership of copyright in various sound recordings, initiated a suit against Defendant No. 1, Pass Code Hospitality Private Limited, for using its sound recordings without a valid copyright license, which constitutes infringement under Section 51 of the Copyright Act, 1957.
An Ad hoc Arrangement was established by the Court on April 10, 2024, requiring Defendant No. 1 to deposit license fees while the matter was being heard. This arrangement was extended through subsequent orders, and cumulatively, Defendant No. 1 deposited a total of Rs. 30 Lakhs, out of which the Plaintiff withdrew Rs. 17 Lakhs.
Thereafter, on August 22, 2025, the Defendant No. 1 filed an application seeking a refund of the deposited money, which was based on a judgment by the Division Bench in Azure Hospitality Pvt Ltd. v. Phonographic Performance Ltd., which held that the Plaintiff cannot issue licenses without being a registered Copyright Society under Section 33 of the 1957 Act. The Defendant argued that based on the rates of the registered society, RMPL, they had overpaid by Rs. 13.38 Lakhs.
Appearances:
Senior Advocate Chander M. Lall, along with Advocates Ankur Sangal, Sucheta Roy, Ankit Arvind, Raghu Vinayak Sinha, Shaurya Pandey, and Ananya Mehan, for the Plaintiff
Senior Advocate Swathi Sukumar, along with Advocates Kartik Malhotra, Sumeher Bajaj, and Anindit Mandal, for the Defendant
