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August 23, 2025

Court Case Bulletin: Unreasonable License Fee Constitutes Ground For Compulsory Licence For Public Performance Of Sound Recordings

Author: Vanshika Gupta

In the matter of AL Hamd Tradenation vs. Phonographic Performance Limited [C.O.(COMM.IPD-CR) 8/2024], a Single Judge (Justice Mini Pushkarna) of Delhi High Court vide judgement dated May 13, 2025,held that a demand for an unreasonably high licence fee by a copyright owner constitutes refusal under Section 31 of the Copyright Act, 1957, thereby entitling the Petitioner to seek a compulsory licence for public performance of sound recordings.

Section 31 of the Copyright Act, 1957 (‘the Act’) states that “…the Copyright Board,… after holding such inquiry as it may deem necessary, may, if it is satisfied that the grounds for such refusal are not reasonable, direct the Registrar of Copyrights to grant to the complainant a licence to re-publish the work, perform the work in public or communicate the work to the public by broadcast, as the case may be, subject to payment to the owner of the copyright of such compensation and subject to such other terms and conditions as the Copyright Board may determine…”. The question that arises is whether the refusal to negotiate a reduced licence fee for a small-scale event amount to refusal under Section 31(1), and whether it can be a criterion for compulsory licence.

The Respondent, asserting ownership over its repertoire, claimed that it was legally entitled to determine licensing terms. It argued that the Petitioner was not a broadcasting organisation and had not been denied access, as licences were available at the published tariff rate.

The Court rejected the Respondent’s argument and held that an unreasonable demand for licence fees constitutes constructive refusal and further noted that, “… If the petitioner is required to pay the licence fee for each event that the petitioner organises, as per the tariff rate of the respondent, it will not only place an undue burden on the petitioner, but also on the general public…”.  Accepting the Plaintiff’s claim for a compulsory licence, the Court further held that, “The respondent cannot be given a free hand to procure any arbitrary and unreasonable licence fees. The respondent has to be held accountable for ensuring that it charges a fair and reasonable licence fee for its repertoire.

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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