Supreme Court Sets Aside Madras High Court’s Interim Order on Copyright Rules: Saregama India Limited vs. Next Radio Limited (27 September 2021)

Date of the Judgment: 27 September 2021

Citation: (2021) INSC 661

Judges: Dr. Dhananjaya Y. Chandrachud, J. and B.V. Nagarathna, J.

Can a court, while considering a challenge to a statutory rule, issue an interim order that effectively rewrites the rule? The Supreme Court of India recently addressed this critical question in a case concerning the Copyright Rules, 2013. The court clarified the boundaries of judicial intervention in matters of delegated legislation, emphasizing that courts cannot modify or rewrite rules, especially at the interim stage. This judgment arose from an appeal against an interim order of the High Court of Judicature at Madras, which had modified Rule 29(4) of the Copyright Rules, 2013. The bench consisted of Justice Dr. Dhananjaya Y. Chandrachud and Justice B.V. Nagarathna, with the majority opinion authored by Justice Dr. Dhananjaya Y. Chandrachud.

Case Background

The case involves a dispute over the interpretation and implementation of Rule 29(4) of the Copyright Rules, 2013, which governs the process for broadcasting copyrighted literary and musical works and sound recordings. Several broadcasters had challenged this rule before the High Court of Judicature at Madras, arguing that it was unworkable and violated their rights. The High Court, in an interim order, modified the rule, leading to the present appeal before the Supreme Court.

The appellants, Saregama India Limited, are copyright owners. The respondents, Next Radio Limited & Ors., are the original petitioners before the High Court, who are broadcasters. The respondents sought relief from the strict requirements of Rule 29(4) of the Copyright Rules, 2013, which they argued were overly burdensome and impractical.

Timeline

Course of Proceedings

The High Court of Judicature at Madras was hearing a batch of writ petitions challenging the validity of Rule 29(4) of the Copyright Rules, 2013. The petitioners, who are broadcasters, argued that the rule was unworkable and violated their rights under Article 19(1)(a) of the Constitution and was ultra vires Section 31D of the Copyright Act, 1957. The High Court, finding merit in the arguments regarding the impracticality of the rule, issued an interim order modifying it. The High Court allowed the broadcasters to follow a modified regime of post facto compliance, instead of prior compliance mandated by Rule 29(4), by allowing the broadcasters to furnish details pertaining to the broadcast, including the quantum of royalty payable, within fifteen days of the broadcast. This interim order was challenged before the Supreme Court.

Legal Framework

The core of this case revolves around Section 31D of the Copyright Act, 1957, and Rule 29 of the Copyright Rules, 2013. Section 31D provides a statutory license for broadcasting literary and musical works and sound recordings. It states:

“31D. Statutory licence for broadcasting of literary and musical works and sound recording. –(1) Any broadcasting organisation desirous of communicating to the public by way of a broadcast or by way of performance of a literary or musical work and sound recording which has already been published may do so subject to the provisions of this section.”

Section 31D(2) mandates that the broadcasting organization must give prior notice of its intention to broadcast, stating the duration and territorial coverage, and pay royalties. Rule 29 of the Copyright Rules, 2013, further specifies the details required in the prior notice, including:

“29. Notice to owner for communication to the public of literary and musical works and sound recordings. —(1) Any broadcasting organisation desirous of communicating to the public by way of broadcast or by way of performance of a published literary or musical work and sound recording under sub -section (1) of Section 31- D shall give a notice of its intention to the owner of the copyright and to the Registrar of Copyrights before a period of five days in advance of such communication to the public and shall pay to the owner of the copyright, in the literary or musical work or sound recording or any combination thereof, the amount of royalties due at the rate fixed by the Board in this regard…”

Rule 29(4) lists the particulars that the notice must contain, such as the name of the channel, territorial coverage, details of the work, and time slots. The constitutional aspect arises from the challenge to Rule 29(4) as a violation of Article 19(1)(a) of the Constitution, which guarantees freedom of speech and expression. The broadcasters argued that the detailed requirements of the rule were overly restrictive and hindered their ability to broadcast freely.

Arguments

Arguments on behalf of the Appellants (Copyright Owners):

• The interim order of the High Court effectively rewrites Rule 29(4), which is not permissible, especially at the interim stage.
• The validity of Rule 29(4) is yet to be determined, and there is a presumption of constitutionality for both the Rules and the Statute.
• There is no challenge to the validity of Section 31D of the Copyright Act, 1957, under which Rule 29 has been framed.
• The order of the Intellectual Property Appellate Board (IPAB) dated 31 December 2020, specifically requires compliance with Rule 29 while fixing the rates of royalty.
• The High Court’s interim order was limited to the petitioners before it, creating uncertainty about the pan-India operation of the Rule.

Arguments on behalf of the Respondents (Broadcasters):

• Section 31D(2) of the Copyright Act, 1957, only requires a prior notice of the intention to broadcast, stating the duration and territorial coverage, along with the payment of royalty. It does not mandate the minute details required by Rule 29(4).
• The rule-making power under Section 78 of the Copyright Act, 1957, distinguishes between ‘form’, ‘manner’, and ‘conditions’. Since Section 31D refers to the ‘manner’ in which the notice may be issued, the ‘manner’ cannot extend to stipulating ‘conditions’.
• Section 31D was introduced to prevent monopolistic practices by copyright owners and create a statutory right for broadcasters to obtain licenses.
• Rule 29(4) defeats the object of Section 31D by requiring overly detailed information in the prior notice, making it impossible for broadcasters to comply, especially those operating interactive, dynamic sites.
• Broadcasters are willing to pay royalties as prescribed by the IPAB and provide access to their records for inspection by copyright owners.
• Rule 29(4) goes beyond the statutory ambit of Section 31D and is therefore ultra vires.

Innovativeness of the argument: The broadcasters innovatively argued that the rule-making power under Section 78 of the Copyright Act, 1957, distinguishes between ‘form’, ‘manner’, and ‘conditions’ and that since Section 31D refers to the manner in which the notice may be issued, the ‘manner’ cannot extend to stipulating ‘conditions’.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court did not frame specific issues. However, the core issue before the court was:

• Whether the interim order of the High Court, which modified Rule 29(4) of the Copyright Rules, 2013, was legally sustainable.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authorities:

On the impermissibility of re-writing a statute:

• In Re: Expeditious Trial of Cases Under Section 138 of NI Act 1881, Suo Motu Writ Petition (Crl.) No. 2 of 2020, Supreme Court of India. The Court emphasized that the judiciary cannot transgress into the domain of policy making by re-writing a statute.
• Padma Sundara Rao v State of Tamil Nadu (2002) 3 SCC 533, Supreme Court of India. The Court held that a court cannot read anything into a statutory provision which is plain and unambiguous.

Authority Table

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Supreme Court cited In Re: Expeditious Trial of Cases Under Section 138 of NI Act 1881 to emphasize that courts cannot rewrite a statute, as it is a function of the legislature. The court used this authority to support its finding that the High Court’s interim order was an impermissible exercise of judicial power.
• The Supreme Court cited Padma Sundara Rao v State of Tamil Nadu to reinforce the principle that courts cannot add words to a statute or read words into it which are not there. The court used this authority to support its finding that the High Court’s interim order was an impermissible exercise of judicial power.

What weighed in the mind of the Court?

The Supreme Court’s reasoning was primarily driven by the principle of separation of powers and the limitations on judicial intervention in legislative matters. The Court emphasized that while it has the power of judicial review, it cannot rewrite statutory provisions or rules, especially at the interim stage. The Court’s concern was that the High Court had overstepped its boundaries by modifying Rule 29(4) instead of interpreting it. The Court was also concerned that the High Court had converted the second proviso to Rule 29(4) into a routine procedure, thereby changing the intent of the rule. The Court was of the view that the High Court should have decided the matter on merits instead of passing an interim order modifying the statutory rule.

Fact:Law Ratio

The court’s decision was heavily influenced by legal principles and the interpretation of the law (80%), with a lesser emphasis on the specific facts of the case (20%).

Logical Reasoning

Judgment

The Supreme Court held that the High Court’s interim order was an instance of judicial overreach. The Court emphasized that while the judiciary has the power of judicial review, it cannot rewrite statutes or statutory rules. The Court noted that the High Court had effectively substituted its own interpretation of Rule 29(4) by allowing the broadcasters to furnish details within fifteen days of the broadcast, instead of the prior notice required by the rule. The court stated that such an exercise of judicial redrafting of legislation or delegated legislation cannot be carried out. The Court emphasized that the High Court should have decided the matter on merits instead of passing an interim order modifying the statutory rule.

The Court quoted from In Re: Expeditious Trial of Cases Under Section 138 of NI Act 1881, stating, “A judge must not rewrite a statute, neither to enlarge nor to contract it. Whatever temptations the statesmanship of policy-making might wisely suggest, construction must eschew interpolation and evisceration. He must not read in by way of creation. The Judge’s duty is to interpret and apply the law, not to change it to meet the Judge’s idea of what justice requires.”

The Court also quoted from Padma Sundara Rao v State of Tamil Nadu, stating, “The court cannot read anything into a statutory provision which is plain and unambiguous. A statute is an edict of the legislature. The language employed in the statute is determinative factor of legislative intent. The first and primary rule of construction is that the intention of the legislation must be found in the words used by the legislature itself. The question is not what may be supposed and has been intended but what has been said.”

The Court further explained that the High Court had converted the second proviso of Rule 29(4) into a routine procedure, which was not the intention of the rule. The Court stated that the High Court’s action was impermissible since it would substitute a statutory rule made in exercise of the power of delegated legislation with a new regime and provision which the High Court considers more practicable.

The bench was unanimous in its decision. There were no dissenting opinions.

The Supreme Court’s decision has significant implications for the interpretation of statutory rules and the extent of judicial intervention in matters of delegated legislation. The ruling emphasizes that courts must interpret and apply the law as it is, without attempting to rewrite or modify it, especially at the interlocutory stage. This judgment sets a precedent that will guide future cases involving challenges to statutory rules and the limits of judicial power.

Key Takeaways

• Courts cannot modify or rewrite statutory rules, particularly at the interim stage.
• Judicial review does not extend to substituting the court’s interpretation for the clear language of a statute or rule.
• The principle of separation of powers must be respected, with courts refraining from encroaching on the legislative domain.
• The interim order of the High Court was set aside, and the matter was sent back for a decision on merits.
• Broadcasters must comply with the requirements of Rule 29(4) of the Copyright Rules, 2013, until the High Court decides on the validity of the rule.

Directions

The Supreme Court did not issue any specific directions, other than setting aside the interim order of the High Court and clarifying that it has not expressed any opinion on the merits of the rival submissions which would fall for determination in the exercise of the writ jurisdiction of the High Court in the pending proceedings.

Specific Amendments Analysis

There is no specific amendment analysis in the judgment.

Development of Law

The ratio decidendi of this case is that courts cannot rewrite or modify statutory rules, especially at the interim stage. The Supreme Court has reaffirmed that the judiciary must respect the principle of separation of powers and refrain from encroaching on the legislative domain. This judgment reinforces the principle that courts must interpret and apply the law as it is, without attempting to rewrite or modify it.

Conclusion

The Supreme Court’s judgment in Saregama India Limited vs. Next Radio Limited clarifies the limits of judicial intervention in matters of delegated legislation. The Court set aside the interim order of the High Court of Judicature at Madras, which had modified Rule 29(4) of the Copyright Rules, 2013. The Supreme Court emphasized that courts cannot rewrite statutory rules, especially at the interim stage, and must respect the principle of separation of powers. The judgment underscores the importance of adhering to statutory language and the limits of judicial interpretation. The matter was sent back to the High Court for a decision on merits.

Category

Parent Category: Copyright Law

Child Categories:

• Copyright Rules, 2013
• Section 31D, Copyright Act, 1957
• Statutory Licenses
• Judicial Review
• Delegated Legislation

Parent Category: Copyright Act, 1957

Child Categories:

• Section 31D, Copyright Act, 1957

FAQ

Q: What was the main issue in the Saregama India Limited vs. Next Radio Limited case?

A: The main issue was whether the High Court could modify a statutory rule (Rule 29(4) of the Copyright Rules, 2013) through an interim order while hearing a challenge to that rule.

Q: What did the Supreme Court decide?

A: The Supreme Court set aside the interim order of the High Court, holding that courts cannot rewrite or modify statutory rules, especially at the interim stage.

Q: What is Section 31D of the Copyright Act, 1957?

A: Section 31D of the Copyright Act, 1957, provides a statutory license for broadcasting literary and musical works and sound recordings, subject to certain conditions.

Q: What is Rule 29(4) of the Copyright Rules, 2013?

A: Rule 29(4) of the Copyright Rules, 2013, specifies the details that a broadcasting organization must provide in a prior notice before broadcasting copyrighted content.

Q: Can a court change a law or rule while hearing a case?

A: No, the Supreme Court clarified that courts cannot rewrite or modify statutory rules. Their role is to interpret and apply the law as it is, not to change it.

Q: What does this judgment mean for broadcasters?

A: Broadcasters must comply with the requirements of Rule 29(4) of the Copyright Rules, 2013, until the High Court decides on the validity of the rule.

Q: What is the principle of separation of powers?

A: The principle of separation of powers is the division of governmental powers among the legislative, executive, and judicial branches. The judiciary should not encroach on the legislative domain by rewriting laws or rules.