The Court relied upon a literal and plain reading of the law to adjudicate whether the authors of underlying works were indeed entitled to royalties whenever a sound recording consisting of their work was communicated to the public. Sound recordings communicated to the public can be a part of a cinematograph film or otherwise. In both scenarios, apart from taking license from the authors of such cinematograph films or sound recordings, the broadcasters even need to remunerate the author of the underlying works forming part of such sound recordings. Section 18 of the Act, which deals with assignment of copyright, explicitly states in the provisos to the section that the author of a literary or musical work included in a cinematograph film or sound recording not forming part of a cinematograph film shall not assign or waive the right to receive royalties for the utilization of their work.
Thus, the legislature has created a provision which makes it impossible de jure for authors of underlying works to relinquish the right to receive royalties in the commercial exploitation of their work. Moreover, sub-sections (9) and (10) of Section 19 of the Act state that the assignment of copyright in a cinematograph film or a sound recording not forming part of a cinematograph film shall not affect the rights of the authors of underlying works to receive royalties for the utilization of their work. The quintessential terms in Sections 18 and 19 are “equal basis” and “equal share” respectively vis-a-vis the rights of authors to collect royalties. Even though the Court has not dealt in depth with these terms, it is a departure from the laissez faire towards a more socialist approach as the legislature is essentially trying to remedy the inequity that exists between the producers and artists and thus not leaving copyright in underlying works and its exploitation to contractual relationship between the two as it would be detrimental to the interests of the artists.
To reinforce this point of view, points (vii), (viii), (ix) and (x) of the Statement of Objects and Reasons of the Amendment Act require careful consideration. These points make it clear that one of the objectives to be achieved by the Amendment Act is to clarify the rights of the authors to receive royalties from the commercial exploitation of their works. Thus, both from a literal approach as well from a teleological approach, authors of underlying works are entitled to receive royalties for the commercial exploitation of their works.