The Mumbai High Court has directed seven top Mumbai hotels to each pay between Rs50,000 and Rs70,000 towards licensing fees for music played at their New Year's Eve parties.

The Copyright Act 1957 was amended in 1994 to confer certain special rights on performers. Phonographic Performance Ltd (PPL) was registered with the Registrar of Copyrights in 1996 as a copyright collection agency, permitted to operate in relation to sound recordings, musical works and/or any words or action intended to be sung, spoken or performed with music. Many music companies (including Sony, Universal and Virgin) are members of PPL and have assigned to it the right to issue licences to and collect fees from event organizers that play music at public events.

Any performance of music owned by a PPL member in a public place or commercial establishment (eg, hotel, restaurant, cinema or nightclub) without a licence from PPL constitutes an infringement of the Copyright Act. Violations attract heavy penalties, including fines of up to Rs200,000 and imprisonment for up to three years. The promoters, the owner of the premises and the performers themselves all have a responsibility to the owner of the copyrighted material.

PPL initiated this most recent action after noticing advertisements for the respondent hotels, which charged huge entry fees to their parties. Justice SC Dharmadhikari ordered the hotels to pay PPL the requisite licence fees, restraining the hotels from playing the music until such payment had been made.

Many event organizers are often unaware that a public performance of copyrighted music is subject to a licensing fee. According to PPL, similar action may be taken against other such hotels (or restaurants, clubs or banquet halls) that do not pay appropriate fees in light of this order.

Gowree Gokhale and Prerak Hora, Nishith Desai Associates - Legal & Tax Counselling Worldwide, Mumbai