GE POWER vs NHPC -Jurisdiction of civil courts in Copyright cases arising from Insolvency plan
In this case, the Plaintiff, through its predecessor in title i.e. Alstom India Ltd. entered into a contract for designing and manufacturing of facilities for a hydro-electric project with Lanco Teesta Hydropower Limited (LTHPL), a Special Vehicle Company that is part of Lanco Infratech Limited (LIL). Vide the contract, LIL was granted a limited and conditional license to make use of the Plaintiff’s drawings and confidential data, being subject to the Plaintiff’s copyright. On the subsequent liquidation and insolvency of LIL, the project was awarded to the Defendant who issued an open tender for the said Teesta VI Project and expressed its intension to hand over all drawings in which the Plaintiff claims copyright to the successful bidder.
The main points of law addressed by the Delhi High Court included the right of the Defendant to use the copyrighted work of the Plaintiff without any assignment or a license in writing by the Plaintiff as well as the Delhi High Court’s territorial jurisdiction to try the present suit.
With respect to the copyrighted work of the Plaintiff, the Defendant contended that it received the drawings and the confidential data as per the NCLT’s resolution plan for LIL and the same could be understood as ensuring continuity of all benefits in favour of the Defendant. The Plaintiff, however, contended that the drawings and the confidential data was provided to LIL under a limited and conditional license, thereby not making LIL the owner of the copyrighted work and in view of the same, while relying on the Astrazeneca UK Ltd. & Anr. vs. Orchid Chemicals case, the Plaintiff contended that the Defendant could not have used the drawings and data without a license from the Plaintiff or without explicit permission of the Plaintiff. The Defendant further took the plea of fair dealing under Section 52(1)(a) of the Copyright Act, 1957. However, dismissing the Defendant’s plea of fair dealing, the Delhi High Court clarified that the said defence of fair dealing was available only for private or personal use and did not apply to the commercial activity for which the Defendant published the work i.e. designing, manufacturing of facilities for a hydro-electric project.
With respect to the Defendant’s contention of the Delhi High Court lacking territorial jurisdiction to try the present suit on the grounds of neither the Plaintiff or the Defendant residing or working for gain in Delhi and the Defendant’s website not exclusively targeting Delhi consumers, the Delhi High Court observed that the fact that the copies of the Plaintiff’s purported work were put on the web portal and circulated to the public including the public in Delhi, the cause of action arose at Delhi. The Delhi High Court dismissing the Defendant’s contention based on the Banyan Tree Holding (P) Ltd. vs. A. Murali Krishna Reddy & Anr. judgement, observed that the cause of action as pleaded by the Plaintiff was not the publishing of the bid by the Defendant in Delhi but that while publishing the bid, the Plaintiff’s copyright in the drawings had been infringed at Delhi by storing the same in the electronic medium, making copies of the same and uploading the same on the portal of CPPP to be viewed all over India including Delhi and thus, the act of the Defendant in storing and communicating the work of the Plaintiff to the public including the public in Delhi amounts to the cause of action arising in Delhi.
However, the Delhi High Court held that it lacks jurisdiction to try the present suit as the dispute falls within the ambit of Section 60(5) of IBC, as the same arises out of and/or is in relation to the insolvency resolution plan and therefore must be adjudicated by the NCLT exclusively and that the proceedings in the Civil Court with respect to the same are barred.
Further, the Delhi High Court while dismissing the said suit also held that the original contract for drawings and confidential data was between Alstom India Limited and LIL and thus, for the suit to be adjudicated fairly, LIL and LTHPL had to be made parties to the suit.