IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION The Indian Performing Right WRIT PETITION NO. 2384 OF 2014 Society Ltd (IPRS)..Petitioner Vs. Union of India and Others WITH WRIT PETITION NO. 2236 OF 2014..Respondents Mr.Hasan Kamaal..Petitioner Vs. Union of India and Others..Respondents Mr. R. M. Kadam, Senior Advocate a/w Mr. Shekhar Mennon, Mr Pragyan Sharma, Suresh Poojary i/b S. Mennon and Co, for the Petitioner in Writ Petition No.2384 of 2014. Mr. V. R. Dhond, Senior Advocate a/w Mr. Shekhar Mennon, Pragyan Sharma, Mr. Suresh Poojary i/b S. Mennon and Co, for the Petitioner in W. P. No. 2236 of 2014. Mr. N. H. Seervai, Senior Advocate a/w Mr. A. S. Kamat, Mr. Astad Randeria, Ms. Priyanka Khimani i/b Khimani and Associates,for Respondent Nos.3 to 5. Mr. Adwait Sethna a/w Ms. S. V. Bharucha, for Respondent Nos.1 and 2. Aswale 1/15
P. C.: 912.wp.2384.14 CORAM : MOHIT S. SHAH, C.J. & B. P. COLABAWALLA, J. DATE : MARCH 13, 2015. In writ petition no.2384 of 2014, the petitioner society has challenged the order dated 27 February 2014 of the Government of India in the Ministry of Human Resource Development (Department of Higher Education, Copyright Office), in exercise of the powers conferred by Section 33(5) of the Copyright Act, 1957 (for short the Act ) and Rule 50 of the Copyright Rules, 2013 (for short the Rules ). The same order dated 27 February 2014 has been challenged by Mr. Hasan Kamaal, Chairman of the Indian Performing Right Society Ltd (IPRS), which is the petitioner in writ petition no. 2384 of 2014. Since the issues in both the writ petitions are identical, for the sake of convenience we shall refer to the facts in writ petition no.2384 of 2014. 2 The petitioner claims to be a non profit making organization which was incorporated in the year 1969 which was limited by Guarantee (without share capital) registered under the Companies Act, 1956. In the year 1996, the petitioner secured registration as a copyright society under the provisions of Section 33 of the Act and the Copyright Rules, 1958 (old rules). Aswale 2/15
3 In the impugned order dated 27 February 2014, the Central Government expressed the opinion that it is necessary to appoint an Enquiry Officer as per the aforesaid provisions of the Act and the Rules for the purpose of making an enquiry into alleged irregularities in the petitioner society (IPRS) a copyright society, to manage performing rights registered under Section 33 of the Act as the alleged irregularities are prima facie violations against the provisions of Sections 33 to 35 of the Act and the Rules framed thereunder: 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 the petitioner society by causing loss of revenue; illegal transfer of mechanical rights and ring tones royalties by the petitioner society to Phonographic Performance Limited(PPL) a copyright society to manage sound recording rights; forgery of signatures or misrepresentation by the management of petitioner society to the Ministry and reasons for non compliance of the Rules by petitioner society for its re registration. The impugned order further records that the Copyright Office has received many complaints from authors and composers members of the petitioner society to inquire into irregularities in administration of the society. The operative portion of the order then provides that Now, therefore, in exercise of the powers conferred by (the aforesaid statutory provisions), the Central Government hereby appoints Justice Shri Mukul Mudgal, a Aswale 3/15
retired Chief Justice of Punjab and Haryana High Court as an Enquiry Officer to inquire into alleged irregularities in administration of IPRS. As per Rule 51(2) of the Rules, the Enquiry Officer may engage retired Justice Smt Prabha Sridevan as 'Legal Consultant', Shri I. P. Singh, retired Deputy C. A. G. as an 'Accounts Consultant' and may also engage a Convener/Secretary and a Junior to assist him in the inquiry. The order then proceeds to set out the terms of reference of the enquiry and which includes enquiry into nondistribution of royalties to authors and composers by imposing illegal conditions in violation of the Act and the Rules framed thereunder etc and also to suggest measures to improve the administration of the petitioner society. 4 The petitioner society raised two major grounds for challenging the order dated 27 February 2014. The first ground is that the impugned order wrongly and illegally proceeds on the basis that the petitioner is a registered copyright society. It is submitted that on the date of issuance of the impugned order on 27 February 2014, the petitioner cannot be termed as a registered copyright society within the meaning of Section 2(ffd) of the Act because under the amended Copyright Act and in the Copyright Rules, 2013, every copyright society already registered before the amendment, was required to be get itself registered within a period Aswale 4/15
of one year. The amendments were brought in force on 21 June 2012, and therefore, the registration under the pre amended provisions continued only till 20 June 2013. The petitioner society had made an application for registration on 8 May 2013 under the amended provisions but by letter dated 2 June 2014 to the Government of India, the petitioner society has withdrawn the said application for fresh registration. Since the petitioner accordingly ceased to be a copyright society with effect from 21 June 2013, it was not open to respondent no.1 to pass the impugned order under Section 33 of the Act read with Rule 50 of the Rules. 5 The second ground of challenge is that under Rule 50, the Enquiry Officer can only be an officer not below the rank of Deputy Secretary to the Government of India, and therefore, appointment of a former Chief Justice of the Punjab and Haryana High Court cannot be treated as appointment of Enquiry Officer in compliance with the statutory provisions in Rule 50 of the Rules. 6 At the preliminary hearing on 11 June 2014, notice was issued and the following order was passed: 2. Learned counsel for the Petitioners pray for adinterim orders apprehending that some adverse adinterim/interim orders may be passed by the Respondents or the Enquiry Officer in the mean time. 3. Since the Enquiry Officer has been appointed under order dated 27 February 2014 by the Government Aswale 5/15
of India (Exhibit A), the convenor of the enquiry committee/the Enquiry Officer will issue a notice to the Petitioners for hearing. Hence, it is not necessary to consider the prayer for ad interim orders at this stage. 4. We make it clear that this order would not amount to any acquiescence on the part of the Petitioners. The Enquiry Officer would issue at least two weeks' advance notice to the Petitioners. 7 Thereafter on the returnable date, the Court was informed that respondent nos.2,3 and 4 had already filed a transfer petition before the Supreme Court for transfer of this petition and other petitions from other High Courts to one High Court and that the Supreme Court had issued notice on such transfer petitions and the hearing of this petition was adjourned with an observation that it would be in the fitness of the things that the Enquiry Officer shall also await the outcome of those transfer petitions pending before the Supreme Court. 8 Thereafter, on 2 September 2014, Justice Mukul Mudgal, Former Chief Justice of Punjab and Haryana High Court resigned from the post of Enquiry Officer with immediate effect as he did not want his qualification to be a subject matter of litigation. Thereafter, the hearing was being adjourned either on the ground that the transfer petitions were still pending before the Supreme Court or on account of debate between the parties whether the writ petition has become infructuous or whether it is Aswale 6/15
required to be heard on merits. 9 Subsequently, the writ petitioners have moved Chamber Summons seeking leave of this Court for amendment of the writ petition for challenging show cause notices dated 30 August 2012 and 31 May 2013. Those show cause notices were issued on the basis of the complaints dated 9 August 2012 of respondent no.3 and complaints dated 1 February 2013 of respondent nos.4 and 5. After considering the petitions, written statement, the impugned order dated 27 February 2014 was passed. By this amendment the writ petitioners seek to challenge the decisions of the Central Government for holding an enquiry petitioner society. into the affairs of the 10 Learned counsel for the petitioner submitted that notwithstanding the resignation tendered by the Enquiry Officer, the petitions still survive, as the opinion formed by the Central Government that, it is necessary to appoint an Enquiry Officer for the purposes of making an enquiry into alleged irregularities in the petitioner society, still continues to hold field and the petitioner society is entitled to challenge formation of such opinion on all available grounds including the ground that the petitioner society is not a copyright society and had ceased to be as such with effect from 21 June 2013. This is long prior to issuance of the impugned order dated 27 February 2014. Secondly, it is submitted that this Aswale 7/15
being the jurisdictional condition, the petitioner is entitled to challenge formation of the opinion of Central Government under Section 33(5) of the Act and the Rules. It is also submitted that formation of the opinion by the Central Government was without giving the petitioner a personal hearing. 11 It is, therefore, submitted that this Court has jurisdiction to entertain the present petitions under Article 227 of the Constitution of India for examining the challenge to the impugned order on the ground that the jurisdictional condition for exercise of the powers under the aforesaid statutory provisions was not satisfied in the facts of the present case. It is further submitted that the petitions have not become infructuous, as on the basis of the same opinion as recorded in the impugned order dated 27 February 2014, the Government of India may appoint another Enquiry Officer and the enquiry would continue notwithstanding non compliance with the basic jurisdictional facts and conditions. 12 On the other hand, learned counsel for the Union of India as well as learned counsel for respondent nos.3 to 5 have opposed the petitions and submitted that the petitions are not maintainable, as no final decision is taken by any authority and in fact the enquiry has not yet commenced. While disputing the petitioner's contention that the petitioner is not a copyright society as contended, it is submitted that in any view of the matter, the Aswale 8/15
petitioner was admittedly a copyright society from 1996 onwards and even on the date of issuance of show cause notices on 30 August 2012 and 31 May 2013. It is submitted that since an enquiry is to be made into the alleged irregularities regarding the funds received by the petitioner society and non distribution by way of royalties to the authors and composers by imposing illegal conditions in violation of the Act and the Rules and by illegal sublicensing of collection of royalties and by illegal transfer of mechanical rights and ring tones royalties by the petitioner to another body, the Government of India does have power to have an enquiry conducted against the petitioner society, especially since these alleged irregularities were perpetrated during the time when the petitioner society was admittedly a copyright society. It is submitted that the petitioner society cannot avoid or evade an enquiry into mismanaging its funds by depriving the authors and composers of their legitimate claims on the ground that it ceased to be a copyright society after committing illegalities, irregularities and mismanagement. The petitioner was admittedly a copyright society during the period when the funds were received and were mismanaged or when the petitioner committed violations of the Act and the Rules. 13 It is further submitted that the opinion recorded by the Government of India in the impugned order dated 27 February 2014 is only a prima facie opinion and that the finding, whether the Aswale 9/15
petitioner society committed irregularities alleged to have been committed by it, is a matter to be enquired into by the Enquiry Officer. Since the Enquiry officer appointed by order dated 27 February 2014 has already resigned, the petition has become infructuous but that would not preclude the Government of India from appointing another officer on the basis of the satisfaction already recorded in the impugned order dated 27 February 2014 that it is necessary to appoint an Enquiry Officer for the purpose of making an enquiry into the alleged irregularities committed by the petitioner society and more particularly, when the petitioner society was admittedly a copyright society at the time of the alleged violations. 14 Learned counsel for respondent nos.3 to 5 further vehemently submitted that the petitions also ought not to be entertained, as the petitioner society has not approached this Court with clean hands. On the one hand the petitioner society has contended in the present petitions that it ceased to be a copyright society with effect from 21 June 2013. On the other hand, the petitioner society has filed a suit in Delhi High Court which has been verified on 23 April 2014 stating in terms that it is a copyright society. On that basis the petitioner also obtained an order of injunction dated 5 May 2014 from the Delhi High Court that is on the basis that it is a copyright society. Respondent nos.3 to 5 have also referred to other proceedings initiated by the petitioner in the Aswale 10/15
year 2014 2015 claiming that the petitioner society is a copyright society. 15 Having heard the learned counsel for the parties, we are of the view that it is true that the Enquiry Officer appointed by order dated 27 February 2014 having resigned in September 2014, the petitions might prima facie appear to have become infructuous but we do find some substance in the submission of the petitioner that formation of the opinion recorded in the impugned order dated 27 February 2014 would still continue to hold field and on that basis the Government of India may appoint another Enquiry Officer. 16 Hence, while one of the two challenges levelled by the petitioner (that the appointment of an Enquiry Officer is not in conformation with Rule 50 of the Rules) would not survive, however, the challenge to prima facie formation of the opinion to hold an enquiry pursuant to show cause notice issued on 30 August 2012 and 31 May 2013 on the basis of complaints received by the Government would survive. Admittedly, the petitioner was a copyright society on the date of issuance of show cause notices and also during the period when the petitioner society committed alleged violations of provisions of the Act and the Rules. Can it, therefore, be contended that the enquiry against the petitioner society was not maintainable only because, according to the Aswale 11/15
petitioner society, it ceased to be a copyright society on the date of issuance of order dated 27 February 2014 i. e. the order recording prima facie opinion to conduct the enquiry against the petitioner society. 17 In our view, since the opinion recorded in the impugned order is for conducting an enquiry against the petitioner society regarding alleged irregularities and violations of the Act and the Rules during the period when the petitioner society was admittedly a copyright society, we do not find any merit in the petitioner's contention that the enquiry is not maintainable against the petitioner society because, according to the petitioner, it ceased to be a copyright society after issuance of show cause notices. 18 It is necessary to note that the petitioner society was registered as a copyright society way back in the year 1996, and therefore, admittedly the petitioner was a registered copyright society from 1996 till 21 June 2013. Since the alleged violations had taken place during this period between 1996 to 21 June 2013, it has to be held that the Government of India has jurisdiction to conduct an enquiry against the petitioner society in respect of the alleged violations of the Act and the Rules. We, therefore, do not find any merit in the contention raised on behalf of the petitioner. Aswale 12/15
19 There is yet another reason to reject the submission of the petitioner in this regard. If we were to accept the submission of the petitioner, it would be adding premium to dishonesty. In a given case, a society registered as a copyright society, after having committed irregularities and violations of the Act and the Rules, to avoid an enquiry, would simply de register itself under the provisions of the Act, thereby divesting the Central Government of jurisdiction to form a prima facie opinion that an enquiry is required to be conducted into the said irregularities and violations although the same occurred during the period when the society was admittedly a registered copyright society. We do not think that the Legislature intended such an absurd result. We are,therefore, clearly of the view that the Central Government had jurisdiction to form a prima facie opinion that an enquiry is required to be conducted into the affairs of the petitioner society in respect of the alleged violations of the Act and the Rules during the period it was a registered copyright society notwithstanding the fact that subsequently its registration had lapsed. 20 In view of the above, we are not inclined to entertain the petitions in so far as the petitioner has challenged the order dated 27 February 2014 regarding formation of prima facie opinion by the Government of India that, it is necessary to conduct an enquiry against the petitioner society in respect of the alleged violations of the Act and the Rules. The Government of India is yet Aswale 13/15
to take a final decision in the matter. We are, therefore, of the view that the petitions are premature and liable to be dismissed on this ground. We make it clear that we may not be treated to have expressed any opinion on merits of the petitioner's contentions. 21 As regards the petitioner's contention that the petitioners were not given an opportunity of personal hearing, we find that the provisions of Rule 50 of the Rules and more particularly sub rules (1) and (2) thereof, contemplate the Central Government only to issue a show cause notice to the society to show cause why the enquiry should not be conducted in respect of alleged violations of the Act and the Rules and the society is required to submit its written statement. After the written statement is furnished by the society, the Central Government is required to record a prima facie satisfaction whether to order an enquiry under Section 33(4) of the Act. Since the truthfulness or otherwise of the allegations is to be examined by an Enquiry Officer, the society will get an opportunity of personal hearing at such enquiry. Hence, the satisfaction of the Central Government that the enquiry is necessary, is only a prima facie satisfaction. This is why sub rule (1) also provides that satisfaction of the Central Government would be prima facie at this stage. Therefore, there would be no need to provide an opportunity of personal hearing to Aswale 14/15
the society at this stage before appointment of the Enquiry Officer. 22 The learned counsel for the petitioner would submit that even at the stage of recording prima facie satisfaction, the Central Government must indicate on what basis the Government has reached the prima facie satisfaction for conducting an enquiry into the allegations. When the petitioner society was already given the copies of the complaints filed by respondent nos.3 to 5 along with show cause notices and petitioners were given an opportunity to give their written statement and the Government has reached a prima facie satisfaction after considering the written statement, merely for the purpose of deciding whether to conduct an enquiry and appoint an Enquiry Officer, at this stage, there would be no need for the Central Government to give reasons for recording its prima facie satisfaction. Otherwise, it would be a duplication of an enquiry at two stages. 23 For the reasons aforesaid, we do not find any merit in the petitions and the same are accordingly dismissed. CHIEF JUSTICE (B. P. COLABAWALLA, J.) Aswale 15/15