Litigation Specialised

Where to file suit for copyright infringement? Supreme Court’s purposive interpretation amounts to re-writing the Copyright Act

vijayaraghavannarasimhamA plain reading of Section 62 of the Copyright Act, 1957 will reveal that Section 62(2) of the Copyright Act is an exception to the general rule vesting jurisdiction in a civil court in case of ‘infringement of copyright in any work’.

Under Section 62(1), such a suit has to be instituted before ‘the district court having jurisdiction’ in respect of the ‘infringement of copyright in any work’.

The general rule, seen in Section 20 of the Code of Civil Procedure, 1908 (“CPC”), is that a civil proceeding complaining of ‘infringement’ has to be instituted where the ‘cause of action’, that is, the ‘infringement’ arose, or where the defendants reside or carry on business.

S62CopyrightAct S20CPC

Section 62(2), however, has a non obstante clause vis-a-vis Section 20 of the CPC and any other law in force. Therefore, only Section 62 is invoked to determine whether such a suit is territorially tenable.

Section 62(2) thus makes an exception to Section 62(1). It means that a ‘district court within whose jurisdiction plaintiff resides or carries on business’ is also a place of permissible jurisdiction. This necessarily means that even if the ‘infringement of copyright in a work’ arose within the jurisdiction of Court A, the suit can be filed by the plaintiff in Court B, within whose jurisdiction he resides or carries on business.

Once the plaintiff proves that he was residing at the chosen venue or he was carrying on business there, he can surely sue at that location. The plaintiff need only show that he was ‘actually and voluntarily residing’ there or ‘carrying on business’ or personally working for gain. Once these ingredients are satisfied, the suit has to be held maintainable. In effect, the criteria under Section 20 of the CPC, that is, where the ‘cause of action’ arose or where the ‘defendant was residing’ or ‘carrying on business’ are rendered otiose.

The reasoning behind creating this exception was that an artist must have total control and dominance over his ‘copyright in a work’. The artist has the right to carry his right to sue wherever the artist resides or moves to reside or carries on business or moves to carry on business, irrespective of where the cause of action or infringement arises. It is a clear and lucid departure from the ordinary rule of territorial jurisdiction.

How Sanjay Dalia rewrote the Copyright Act, all in the name of “purpose”

Unfortunately, in one more exhibition of the ‘purposive interpretation’ rule, the Supreme Court has affirmed the decision of the Delhi High Court in Indian Performing Rights Society Ltd. v. Sanjay Dalia.

The plaintiff was carrying on business through a branch office in Delhi though their head office was in Mumbai. The alleged ‘infringement’ had taken place in Mumbai. The concurrent findings of the Delhi High Court declining to entertain the suit in Delhi was affirmed by the top court.

“In our opinion, the provisions of section 62 of the Copyright Act and section 134 of the Trade Marks Act have to be interpreted in the purposive manner. No doubt about it that a suit can be filed by the plaintiff at a place where he is residing or carrying on business or personally works for gain. He need not travel to file a suit to a place where defendant is residing or cause of action wholly or in part arises. However, if the plaintiff is residing or carrying on business etc. at a place where cause of action, wholly or in part, has also arisen, he has to file a suit at that place, as discussed above.”

‘Purposivism’ and ‘consequentialism’ cannot be used to tide over the ‘convenience or inconvenience’ of parties. When the Parliament has conferred on the plaintiff, the right to sue for infringement wherever he resides or carries on business, is the Supreme Court right in concluding that plaintiff could not do so in a case where the infringement arose in Mumbai and defendant carried on business in Mumbai and plaintiff also had its head office? This amounts to re-writing the legislation. Oh, for an Antonin Scalia dissent of the Obamacare and Obergeleff genre.

Vijayaraghavan Narasimhan is an advocate practicing at the Madras High Court.

Human Rights

The National Green Tribunal has restricted access to justice

PrashantReddyAmong the many tribunals established during the last decade, the National Green Tribunal (“NGT”) is the one that is most often in the news these days. Set up in 2010 by the National Green Tribunal Act, 2010, its main purpose was to provide for the effective and expeditious disposal of cases related to the environment.

After several initial hiccups, lack of infrastructure, and constitutional challenges (which remain pending), the NGT has become rather active over the last couple of years. Many of its orders, including the one banning vehicles that are more than 15 years old, have a massive impact on society, both in terms of employment losses and pollution control.

Like most other tribunals constituted over the last decade, the NGT too is poorly designed and there is enough evidence to believe that it may be doing more harm than good. One of the many reasons for questioning the effectiveness of the NGT is the fact that its jurisdiction, both territorial and subject-matter, fails to properly ensure affordable access to justice for citizens across India.

The seat of the NGT is the first issue. According to the website of the NGT, “New Delhi is the Principal Place of Sitting of the Tribunal and Bhopal, Pune, Kolkata and Chennai shall be the other four place of sitting of the Tribunal.” This is quite pathetic given that the subject matter jurisdiction of the NGT covers environmental law across a country so vast that it is classified as a sub-continent.


The National Green Tribunal at Delhi

When the Law Commission originally studied the issue of ‘Environmental Courts’ in its 186th Report, it had recommended having one environmental court in every state and had counselled against the “Government’s proposal of a single appellate Court at Delhi, which will be beyond the reach of affected parties.” For reasons that are not clear, the government completely ignored this and focussed the resources of the newly created NGT to Delhi, with a promise to allocate resources to four more locations.

The NGT’s subject matter of jurisdiction is another issue. As of now, the NGT has both appellate powers and original powers. Its appellate powers are exercised against orders passed by statutory authorities under various environmental legislation such as the Air Act and the Water Act. In pursuance of its original powers, the NGT can award damages for death or injury to any person or property if the same has resulted from “an accident or the adverse impact of an activity or operation or process”, under any of the special environmental legislation specified in Schedule I of the NGT Act. While consolidating the appellate power in the tribunal is not per se problematic, concentrating all powers to grant damages under environmental legislation with the NGT alone is a recipe for throttling access to justice because Section 29(2) of the NGT Act, 2010 completely bars the jurisdiction of civil courts in all such matters. In its report, the Law Commission had very rightly argued against such an approach.

The plaintiff should have the option of choosing between an ordinary civil court or a specialist forums such as the environmental court, the Law Commisson had argued. “As of now, for example, if a chimney in a neighbour’s house is releasing polluted air or a small sewage channel from one house or land is creating pollution to a neighbour’s house or land, parties in villages are able to approach the nearest munsif Courts which are quite accessible to these villages. If we oust the jurisdiction of these Courts, villagers cannot be expected to go all the way to the seat of the Environment Court for each adjournment and contest the same.

Not only did the Central Government not accept the Law Commission’s first recommendation of having environmental courts in each state, it also ignored the second recommendation of allowing citizens to choose between civil courts and a specialist court. As a result we have a situation today where the jurisdiction over environmental matters, which was previously spread across the high courts and the civil courts in the country, is now concentrated with a single tribunal, one that is barely able to sit in five different cities across the entire country.

A corollary of such an arrangement is that environmental jurisprudence is now concentrated with just seven judges. This is not necessarily good news because such an arrangement vests too much judicial power in the hands of only a few judges.

The NGT is a perfect example of how the executive has botched up yet another tribunal and how the Supreme Court has done little to step in and remedy the situation.

(Prashant Reddy is a Delhi-based intellectual property lawyer.)

Supreme Court of India

Amendment to negotiable instruments law has not completely bounced out the jurisdiction question

Himanshu_SumanWhere should the complaint for a cheque bounce offence be filed? Since this question has not been answered in the Negotiable Instruments Act, 1881 (“NI Act”), courts have applied general principles of criminal procedure to answer it. An offence should be tried by a court within whose jurisdiction it was committed. If the offence consists of more than one ingredient, it may be tried at any place where any of the ingredients occur. Following a Supreme Court decision in 1999, there had been significant confusion and uncertainty on this question, but that was settled when, on August 1 last year, the Supreme Court in Dashrath Rupsingh Rathod v. State of Maharashtra and Another, (2014) 9 SCC 129, held that the complaint had to be filed where the drawee bank is located.

The “cheque bounce” offence under Section 138 of the NI Act was created by the Banking, Public Financial Institutions and Negotiable Instruments (Amendment) Act, 1988 to establish and strengthen cheques as a form of mercantile tender. Section 138 makes the dishonour of a cheque for insufficiency of funds or because the amount exceeds the arrangement agreed with the drawee bank, an offence punishable with imprisonment up to two years and a fine up to twice the amount of the cheque. This is subject to compliance with the proviso to Section 138 – the payee has to deposit the cheque with the bank within six months of being drawn, issue a written notice to the drawer demanding payment within 30 days of the cheque being returned unpaid, and the drawer has to fail to make the payment within 15 days of receiving this notice.

Lifting the confusion about the jurisdiction question

In K. Bhaskaran v. Sankaran Vaidhyan Balan and Another, (1999) 7 SCC 510, the Supreme Court had held that the offence under Section 138 consisted of five ingredients – the drawing of the cheque, the presentation of the cheque to the bank, the return of the dishonoured cheque, the issuing of notice to the drawer, and the failure of the drawer to pay the amount after receipt of the notice. Following Section 178 of the CrPC, jurisdiction can vest at any place where any of them occur.

Besides introducing uncertainty, this interpretation also allowed the payee to harass the drawer by filing the complaint at distant places that had no causal connection to the transaction or the drawer.

Dashrath Rupsingh Rahthod rightly held that the offence involved not five ingredients but one, that is, the dishonour of the cheque by the drawee bank. Bhaskaran had wrongly interpreted the conditions under the proviso as being ingredients of the offence rather than merely the conditions that had to be met to initiate prosecution. The correction in Dashrath Rupsingh Rathod finally deprived the payee of his power to unilaterally confer jurisdiction on a place of his choosing and fixed with certainty the jurisdiction for complaints under Section 138.

Amendment to the negotiable instruments law returns power to payee

cheque_negotiableinstrumentThe decision in Dashrath Rupsingh Rathod was criticised by industrial associations and financial institutions for unjustly requiring the creditor to go the debtor. In their view, it ought to have been the other way round. The Negotiable Instruments (Amendment) Bill, 2015 which, has been passed by the Lok Sabha and will be introduced in Rajya Sabha during the next session, proposes in Section 142(2) that the complaint should be filed where the collecting bank is located. This will also apply to all pending cases and after it becomes law, almost every pending complaint under Section 138 will have to be transferred from the place where the drawee bank is (following Dashrath Rupsingh Rathod decision) to where the collecting bank is.

This will once again empower the payee to unilaterally confer jurisdiction on any place where he has a bank account. The drawer will have to make arrangements to defend himself in criminal proceedings at such place, wherever it may be.

Amendment benefits frequent defaulter

For some balance, the proposed amendment will prevent the payee from unduly harassing a drawer by taking four cheques and filing them in four different parts of the country as separate complaints. All complaints between the same parties are to be tried at one place irrespective of where the payee deposits the cheques.

It even proposes that all complaints against a drawer, even by different payees, should be tried before the same court, which will be the court where the first of such complaints has been filed. Whenever a payee files a complaint under Section 138 against a drawer and it is brought to the notice of the court that there is a prior pending complaint against the drawer, then the court will transfer the subsequent complaint to the court trying the prior complaint. The provision only mandates that the complaints be tried before the same court and not that they be tried together.

There is no clarity about which party bears the onus of giving notice of the prior complaint or about the time period within which it has to be given. The erring drawer would thus be able to delay subsequent complaints by revealing the prior complaint only at a later stage. A frequently defaulting drawer would benefit the most from this proposal because subsequent payee(s) would have to go where the collecting bank of the prior payee is even though such place may not have any causal connection to their transaction with the drawer.

It is welcome that the jurisdiction question will finally be settled by statute. The rough edges around the proposed Section 142-A however, have to be creased out by subsequent judicial decisions and the courts may not be wiling to interpret a penal provision meriting strict interpretation in a manner that advances the objective of establishing and strengthening cheques as a form of mercantile tender.

Himanshu Suman, an alumnus of NLSIU, Bangalore, is a Delhi-based advocate.