RTIs reveal intense battle between Registrar of Copyrights and IPRS, over release of royalties to lyricists and composers

As mentioned in an earlier post of mine this morning the CPIO of the Copyright Office finally sent us half the information that we had requested for under the Right to Information Act, 2005. Appended to one of the Indian Performing Rights Society (IPRS) Annual Reports was a treasure trove of information in the form of a string of correspondence, throughout the year 2009, between lyricists, composers, the Registrar of Copyright and IPRS. The correspondence shows us the intensity of the battle between the Registrar of Copyrights, on behalf of the lyricists and composers, and the management of IPRS who were withholding certain payments to these lyricists and composers. These events probably had a substantial bearing on the drafting of the Copyright (Amendment) Bill, 2010. Image from here.

While the details of each of the 15 letters are outlined below, I’ll briefly run you through the events of these 15 letters. The letters themselves can be accessed over here.

A. The battle between the Registrar and IPRS: The entire episode starts of in January, 2009 with a strongly worded letter from Mr. Raghavender, Registrar of Copyrights to IPRS asking them to release payments owed to some of the lyricists and composers who had not been paid for some time. IPRS replied asking for details of lyricists. The Registrar of Copyrights then sent IPRS a list of 16 lyricists and composers who were receiving royalties from IPRS until 2006 or 2008. Subsequently IPRS stopped payments because of which a written complaint was submitted to the Registrar. IPRS’s response to this letter is not available. On the 29th of July, 2009 the Registrar of Copyrights passed an ORDER requiring IPRS to definitely release the pending funds to the lyricists and composers. IPRS then returned with a lengthy letter stating that 3 of the composers/lyricists have been satisfied with the royalties given to them and then proceeded to give two reasons for not releasing the payments for the remaining 13 composers/lyricists:

(i) IPRS after 30 years begins to cite the Supreme Court decision in the Eastern Indian Motion Pictures Association to argue that as per the Supreme Court, producers of cinematograph films are first owners of lyrics and musical works and not composers and lyricists. IPRS does not categorically state the implications of its judgment. We’ve discussed these issues over here.

(ii) That a MoU entered into in 1993 assured lyricists and composers 20% and 30% of the royalties respectively. However in order to release the royalties, the lyricists and composers were required to give an undertaking to IPRS that the ownership of the copyright existed with only the music company publishers. Since the lyricists and composers in question refused to sign such under-takings, IPRS refused to release the money.

The obvious question over here is why was IPRS, requesting the signing of an undertaking if the assignment deeds were already clear on the fact that music companies owned the copyright in all the works? If the music companies did not have assignment deeds with them then the lyricists and composers were entitled to royalties. IPRS then proceed to state in its letter that it cannot decide ownership and that it is only required to administer rights. Quite the contradiction I say!

In response to this letter, the Registrar of Copyright sent IPRS an elaborate questionnaire, asking them to clarify amongst other things, the legality of the ‘undertaking’ that was required of lyricists, the reason for IPRS not collecting ring-tone royalties, the reason for outsourcing of royalty collection to two specific companies and the basis for determining ownership of copyright by IPRS. The ringtones question is very pertinent because the PPL Annual Report clearly states that ringtones revenue is required to be shared with IPRS because they are being collected through a single window system. The IPRS Audited Accounts however show no income from mobile ringtones. As discussed earlier this morning PPL is earning Rs. 100 crores through mobile ringtones.

This is where things turn interesting. The Registrar of Copyrights wanted a meeting with IPRS to get answers to these questions and sort out the issue and also fixed a date for the meeting. IPRS stalled the meeting twice and before the ultimatum for the third meeting expired IPRS informs the Registrar of Copyrights that a suit has been filed against it by Saregama before the Civil Judge (Senior Division) Barasat, West Bengal disputing the membership of IPRS since authors and composers were being made members of IPRS when they were not the owners of Copyright. Saregama was therefore granted a ‘status quo’ injunction and IPRS was restrained from holding a meeting of its Governing Council. IPRS then has the audacity to inform the Registrar that the Court apart from ordering a ‘status quo’ on the matter, has also impleaded the Registrar himself as a defendant (on an application by Saregama) and cites these two reasons for not co-operating with the Registrar because it is worried that the same may result in contempt of court. (The order is available on the last page over here). Even more interesting is a previous letter where IPRS had stalled the meeting on the grounds that its Executive Directors had to meet. Therefore while it kept delaying the meeting it stood by waiting for Saregama to sue it because it knew that Saregama would sue it in November. This had happened for the last 4 years and it was to be expected. It then used this ‘status quo’ as the basis of not co-operating with the Registrar. The string of correspondence in our custody ends over here but let me first lay out the blatantly absurd reasoning put forth by IPRS:

(i) Saregama had been filing such suits in the same court every year from 2005 to 2009 to restrain IPRS from conducting a meeting of its Annual General Meeting. However in this one year, the ‘status quo’ injunction was granted restraining the holding of the Governing Council Meeting and not the Annual General Meeting, atleast that is what the order says. The most shocking aspect is that the MoA and the AoA, both of which are appended to one of the Annual Reports do not even mention a ‘Governing Council’! What was Saregama asking for, why did the Court grant it and why did IPRS not oppose it? If this isn’t enough the order records that IPRS’s counsel has no problem being injuncted and that a status quo order would not affect them!

(ii) To the best of my knowledge Saregama never impleaded the Registrar of Copyrights until that year and even in that year it impleaded the Registrar only a few days prior to the scheduled meeting between IPRS and the Registrar. The coincidence in Saregama’s impleading the Registrar of Copyrights just before his scheduled meeting with IPRS, smells fishy. Right?

(iii) The most glaring error is that the Civil judge (Senior Division) has no jurisdiction to hear such a suit and yet Saregama has been filing the same suit or application every year for the last 5 years without IPRS taking any corrective steps. The reason for this is simple. Although the ‘S’ in IPRS stands for society, IPRS is actually IPRS Ltd. i.e. a company incorporated under the Companies Act, 1956 and as per Section 10 of the Companies Act, 1956 only High Courts or district courts have jurisdiction to hear matters pertaining to subjects covered by the Companies Act. This is the precisely the reason that all the other music companies have been filing petitions against IPRS, on the same point, before the Company Law Board and not civil courts. Why has the IPRS management not opposed the suit on jurisdiction and have the same thrown out? What is going on in IPRS? Why is it standing by when Saregama is suing them like clockwork every-year resulting in injunctions against the holding of IPRS’s Annual General Meeting?

(iv) Even presuming that I got everything wrong in this case, there is still no reason for IPRS to not reply to the Registrar for the simple reason that a ‘status quo’ order by the Court never stopped IPRS from carrying out its normal functions and that involves responding to the Government. The order only stated that nothing prejudicial could be done against Saregama. There is nothing in that order restraining IPRS from providing the Government with information. Next thing you know IPRS will inform the government that it is not going to pay its taxes because of the ‘status quo’ order passed by the 2nd Civil Judge (Senior Division) Barasat Court, West Bengal!

Summary of the letters

1. 14th January, 2009: A strongly worded letter from Mr. Raghvender, Registrar of Copyrights to the C.E.O. of IPRS, ordering him to release all pending royalties to the lyricists and composers. He states in his letter that he has been informed by a group of lyricists and composers that as per a MoU entered into between IPRS and authors, the revenue was supposed to be shared between publishers, composers and authors in the following ratio 50:30:20.

2. 16th January, 2009: Letter from Mr. Rakesh Nigam, CEO of IPRS to Mr. Raghavender, Registrar of Copyrights regarding a complaint made by 17 lyricists/composers that IPRS was withholding royalties due to them.

3. 24th January, 2009: Letter from Ravi, a.k.a ‘Bombay Ravi’ to Mr. Amit Khare, Joint-Secretary, Ministry of Human Resources and Development, complaining his intervention in the dispute between IPRS and composers/lyricists such as himself. A file-noting on the letter requests the Registrar to visit the IPRS office in Mumbai and solve the problem.

4. 24th January, 2009: Letter from ‘Bombay Ravi’ to CEO of IPRS informing him that IPRS is illegally holding back his money.

5. 4th of February, 2009: Letter from Registrar of Copyright to ‘Bombay Ravi’ informing him that he was visiting the IPRS office on the 5th and 6th of February, 2009 and requesting him to be present at the IPRS office along with other aggrieved composers.

6. 4th of February, 2009: Letter from the Registrar of Copyright to the CEO of IPRS, disclosing the list of 17 authors and composers, who complained about their royalties not being released. The Registrar of Copyrights orders the CEO of IPRS to ensure that these royalties were released within 7 days.

7. 29th July, 2009: An ‘ORDER’ from the Registrar of Copyrights to the CEO of IPRS, ordering him this time to release royalties to 16 of the lyricists/composers and also asking for further information on unpaid royalties to other artists. An appended list of 16 lyricists and composers, including Javed Akhtar, Sajid Wajid, Salim Merchant, Nawab Arzoo etc. contains details of cheques that IPRS had been sending to these composers and lyricists up until 2007-08.

8. 12th August, 2009: A lengthy letter from the ‘Executive Committee Directors’ of IPRS to the Registrar of Copyrights responding to & protesting against the ORDER of the Registrar on the grounds that IPRS was not even given a chance to be heard before the passing of the ORDER. In regards the specific list of composers sent by the Registrar, IPRS informs him that 3 the composers have been paid their dues and are satisfied with the same. In regards the remaining 13 composers, IPRS informs the Registrar that these persons are non-members as they do not own any of the works. It further informs the Registrar that sharing of works with authors and composers will be according to a MOU of 1993 between composers and IPRS and any other terms laid down by the Governing Council and Owner Members. IPRS then proceeds to inform the Registrar that its mandate is to govern the rights on behalf of owners and that it is not in a position to decide with whom ownership of the works rest and that in light of the Supreme Court judgment in EIMPAA v. IPRS 1977 (2) SCC 820, the producer of a cinematograph film is the first owner of copyright unless there is an agreement to the contrary. Moving on to the contentious topic of ‘Distribution of Royalty’, IPRS informs the Registrar that it was agreed in 1993 through an MoU that 50% of the performing royalties would be shared with authors and composers who are members of IPRS but that in order to avoid unnecessary disputes to arise in future, “the Owners would like the Non-Owner Author Composer to sign the letter confirming the subject of ownership resting with the music company publishers and in lieu of the signing such letter, the said author or composer or their legal heirs would continue to receive such performing rights royalty as stated in the MoU.” The letter concludes with ‘musical regards’ and a request for the ORDER to be reconsidered.

9. 5th October, 2009: A lengthy letter from the Registrar of Copyright to IPRS responding to their 12th of August, 2009 letter. In this letter the Registrar of Copyrights asks IPRS a series of extremely thirteen extremely pertinent questions/allegations with a request that the CEO of IPRS appear personally before him on the 20th of October, 2009 to explain their views on the same. The thirteen questions/allegations basically cover the following topics:

(i) On the amendment of IPRS’s ‘Memorandum of Association’ & ‘Article of Association’ both of which are the basic documents of any legal entity. The allegation against IPRS is that it amended MAA without informing the government and that it’s AGM of only owners was held even before the registration of the new society.

(ii) Whether IPRS signed any assignment deed with all authors/music composers when they became members of IPRS?

(iii) On the legal basis of the ‘under-taking’ pertaining to the MoU to share royalties with the composers and lyricists, especially since this ‘under-taking’ had not been mentioned before in previous communication dated 25th April, 2008. The Registrar also enquires whether IPRS insists on similar undertakings from music companies before disbursing royalties to them. Whether the amended MAA requires authors and composers to give an ‘under-taking’ that they have no rights in any work for which they receive royalties.

(iv) The basis of determining that ‘only owner-members’ are the real owners of copyright.

(v) The reason for IPRS not collecting royalties for Ring-tones and the reasons for the same.

(vi) The basis of authorizing Select Media Holdings Pvt. Ltd. and Label Music India Pvt. Ltd. to collect royalties on behalf of IPRS.

10. 14th October, 2009: Letter from CEO of IPRS to the Registrar of Copyright in response to the Registrar’s letter dated 5th of October, 2009. The CEO ask for a postponement of the 20th of October, 2009 meeting suggested by the Registrar on the grounds that most Directors and Board Members were on Diwali vacations. Suggests a date in second week of November, 2009.

11. 20th of October, 2009: The Registrar of Copyrights writes back to IPRS postponing the meeting to the 9th of November.

12. 4th of November, 2009: The CEO of IPRS write to the Registrar seeking another postponement of the meeting, this time to January 2010 on the grounds that a meeting of the Governing Council is scheduled for the 28th of December, 2009 and that the Governing Council would be required to discuss the subject before a reply could be sent to the Registrar.

13. 9th of November: This is the date on which the original meeting has been fixed – On this date the Chairperson of IPRS – Mr. Hasan Kamaal, without waiting for a confirmation that the Registrar has indeed extended the date of the meeting, informs the Registrar that they have just received a communication from “an Advocate claiming to be representing Saregama India Ltd (one of our members) stating that the Hon’ble Civil Judge (Senior Division) in Barasat, West Bengal has passed a “status quo” order in respect of the above mentioned matter”. A copy of the same was provided to the Registrar. (We do not have a copy of that letter)

14. 20th of November, 2009: The Registrar writes to IPRS informing them that no more delays will be tolerated and that a final meeting is fixed for the 4th of December, 2009.

15. 25th of November, 2009: Chairman of IPRS Mr. Hasan Kamal writes to the Registrar of Copyright informing him that the Civil Judge in Barasat had passed an order of status quo and has also impleaded the Registrar of Copyright as a defendant to the Suit. The letter then proceeds to inform the Registrar that they have received legal advice that providing any answers to the questions raised by the Registrar of Copyrights would amount to ‘Contempt of Court’. Mr. Hasan Kamaal then seeks the advice of the Registrar of Copyrights on the issue before he signs off with his musical regards. Attached to this letter is the Order of the Barasat Court.

The thread of letters ends over here.

Conclusion: We don’t know what happened after this but I sincerely hope that the Registrar of Copyrights stuck to his guns and got the amount released. If these are the only letters and no more then in that case the Registrar of Copyrights should not hesitate to conduct an investigation into IPRS under Section 33(4) of the Copyright Act, 1957 because they are clearly trying to take him for a ride. I was under the impression that only PPL was non-transparent but IPRS is clearly not above the board. There is something wrong and it needs to be investigated. Some more RTIs I say!