Mishra Bandhu Karyalaya And Ors v. Shivratanlal Koshal

A.P. Sen, J.

This is an appeal brought by the defendant No. 1, M/s. Mishrabandhu Karyalaya, Jabalpur and its partners, from the Judgment and decree of the 5th Additional District Judge, Jabalpur, dated 31st August 1964, decreeing against them, the plaintiff Sheoratanlal Koshals claim (A) for recovery of Rupees 15,307.04 paise with interest @ 6% per annum thereon from the date of suit, i.e., from 1st January 1963 till realisation, due on account of the arrears of royalty payable to him on the sales effected upto the end of December 1959 of the book entitled Saral Middle School Ank Ganeet, written by his son-in-law Maniram Vishwakarma, the copyright of which had been assigned to him; (B) for rendition of account of the sales effected by them of the book in question and other allied publications thereof, as per the Hyderabad Syllabus or otherwise, during the years 1960, 61, 62 and until the date of accounting, so as to ascertain the amount of royalty which had accrued thereon and become payable to him @, 15% of the sale proceeds; (C) for interest @ 6% per annum, on the amount of royalties due each year, payable from 1st January of the following year; (D) for declaring that they do not have any right, title and Interest in the book in question, or, in any other publication thereof, as per the Hyderabad Syllabus, and that the plaintiff had the sole right to such publications; and (E) for perpetually restraining them from printing or publishing the book entitled Saral Middle School Ank Ganeet, as originally published, or in any of its revised or amended forms according to the Hyderabad Syllabus or otherwise.

The relevant facts giving rise to this appeal, are these. Under Exception 2 to S. R. 2 below Fundamental Rule 47, the Director of Public Instruction Madhya Pradesh under Memo. No. 4257/S dated 9th November 1951 (Ex. P-l), had permitted the aforesaid Maniram Vishwakarma, Assistant Master, Government Multipurpose Higher Secondary School, Jabalpur, (hereinafter referred to as the "author") to undertake the work of writing a textbook on Arithmetic (in four parts) for use in Clauses V to VIII, subject to the conditions, namely, that (i) he retained no Interest in the sale of copyright, (ii) he disposed of the manuscript in lump sum not exceeding Rs. 1,500/-, and (iii) his legitimate work- did not suffer on that account. In terms of that order, the author having written such a book on Arithmetic, effected an outright sale of its copyright in favour of his father-in-law Sheoratanlal Koshal. (hereinafter referred to as the "plaintiff"), in consideration of a payment of Rs. 1,200/- for such assignment under the terms of an agreement dated 9th March 1962 (Ex. P-4), executed between them, whereby the plaintiff became the assignee of the copyright having been conveyed all rights therein, including the rights of its publication, realisation of profits accruing therefrom and the right to royalty on all its sales, etc.

The defendant No. 1, M/s. Mishrabandhu Karyalaya. Jabalpur, a firm of printers and publishers, through Basant Kumar Mishra the defendant No. 3, a member of that firm who also happened to be in management of its business along with Jagdish Prasad Mishra the defendant No. 2, entered into a publishing agreement dated 13th March 1952 (Ex. F-5) with the plaintiff. That agreement granted to the defendants a right to publish the work in question, on the following conditions: (i) the right of publication was transferred to them in lieu of their paying to the plaintiff a royalty at 15 % of all their sales, (Clause 1), (ii) an account of royalty had to be made annually, in the month of December each year, (Clause 2), and (iii) the plaintiff was entitled to inspect the account of sales of the work in question effected by the defendants; (Clause 3), (iv) the plaintiff had to get the book suitably altered to bring it in conformity with the syllabus in Arithmetic of any other State if prescribed in course of its studies, and for this he was not to be separately remunerated, (Clause 4), (v) if any alteration in the syllabus was effected in the State of Madhya Pradesh, he was to have the book suitably altered by the author himself and the defendants, in that event, had to print its amended edition also on the aforesaid terms failing which he would be entitled to have it printed elsewhere (Clause 6).

We regret to find that the defendants who claim to be publishers of some repute have throughout betrayed in this case a lack of business integrity by not adhering to their contractual obligations for personal gain. After having acquired the sole and exclusive right of publishing the work which has become a prescribed text-book in different States and, therefore, a source of considerable profit to them, the defendants have ever since displayed a callous indifference to fulfil their part of the contract in several ways, viz., (i) in submission or rendition of yearly accounts of royalties @ 15% of total sales as required to be furnished, in the month of December of each year, and (ii) in payment of such royalty on the sales, annually, as stipulated. After persistent demands, the defendants eventually rendered on 16th April 1960 an account (i) of the royalties which had accrued due up to the end of December 1959, and (ii) of the stock-in-trade in their hands as on 26th January 1960, whereby they unequivocally acknowledged their liability to pay Rs. 15,790.46 paise. Towards this, they only paid Rs. 2,000 on 18th April 1960, still leaving a balance of Rs. 13,790.40 paise in arrears. Apart from their admitted failure in making payment of Rs. 13,790.40 paise, the defendants have also failed to render an yearly account of the royalties, on sales effected in all the following years, nor have they paid the royalties which have become due thereon, i.e., for the entire period after the year 1959.

The plaintiff had by his 1st notice dated 27th February 1961 (Ex. P-27), called upon the defendants to render an account of the royalty which had become due for the year 1960, with a request for its payment, together with the arrears of royalties up-to-date within a week, failing which he threatened to take legal action for its recovery. Despite that notice, the defendants did not comply with the demand for payment of the amounts that had become due. The plaintiff, by his 2nd notice dated 25th April 1961 (Ex. P-28), pointed out that they had persistently failed to pay the royalties accrued due during the earlier years which were in arrears. The plaintiff further complained that they had also, in breach of the agreement betweer the parties, published another text-book on the subject called Purva Madhyamik Ank Ganeet (in three parts) for use in the very same classes for which they had already undertaken to publish and sell the Saral Middle School Ank Ganeet and being interested in promoting the sales of that book in the market, had been acting in a manner detrimental to his interests. Therefore, by the same notice, the plaintiff revoked and terminated the publishing licence which he had created in their favour.

The plaintiff averred that by the agreement dated 13th March 1952 (Ex. P-5), he had not assigned the copyright in the book in favour of the defendants, but had merely created a licence authorising them to print, publish and sell copies thereof which however stands revoked as a result of his notice dated 15th April 1961 (Ex. P-28), and that after the revocation of that licence, the defendants had no right to pirate that work as originally published or in any other manner as they liked, nor had they any right to appropriate to themselves the profits accruing from its sales. That profits have been earned by the defendants from such sales is an irrefutable fact which is unmistakably clear from the facts on record which speak for themselves. The book Saral Middle School Ank Ganeet was first published in or about 1952 and since then there were later editions of this work. Till about the years 1957-58, that book was in four parts; thereafter, it appeared in the Mahakoshal region in three parts, with the introduction of a unified syllabus; while it still appears in four parts in the old Vidarbha region as before. After publication of the first and subsequent editions, the book has been sold by the defendants ever since the year 1952. It appears that they have also, without reference to the plaintiff, had the book revised to bring it in conformity with the Hyderabad syllabus, and it has in that revised form been sold in the State of Andhra Pradesh. Apart from this, they further published a "1962 edition" for use in Madhya Pradesh, after having it adapted to the metric system which has now been introduced in the course of studies under the instruction of the Director of Public Instruction. Madhya Pradesh issued to the Heads of all Educational Institutions. That revised edition of the original work was brought out by the defendants without reference to the plaintiff or the author who had a right to revise it. In Schedules A and B annexed to the plaint, the plaintiff had particularised the large number of mistakes which have crept in the "1962 edition" published by the defendants.

The defendants in denial of this claim, have raised different pleas in their written statement. First of all, they allege that the author was the real owner or beneficiary under the agreement dated 13th March 1952, (Ex. P-5); that they had directly entered into that agreement with him; and that the plaintiff was only a benamidar at whose instance a suit of this nature would not lie; that the name of the plaintiff had been nominally entered in that deed at the instance of the author himself who being in Government service did not want to figure in the transaction. In other words, they alleged that the plaintiff was neither a party to the real agreement which they had with the author nor did he ever come into the picture at the time of settlement of its terms; that the publication of the book was not in pursuance of the alleged agreement as set up by the plaintiff, but was in furtherance of a contract with the author himself; that there was no privity of contract between the parties, and that, therefore, the question of performance of any of the terms of the alleged agreement did not arise.

To sum up, the contentions of the defendants were: firstly, that they never had rendered any account to the plaintiff as regards the royalty of the book in question; that the real fact was that the statements of accounts rendered on 16th April 1960 covering the period upto the end of December 1959 were delivered to the author but to retain a benami character of the transaction, as was mutually agreed upon, the name of the plaintiff had been nominally inserted therein; secondly, that there was no concluded contract which could be the foundation of a suit because the alleged agreement had yet to be finalised which was only of a tentative nature; thirdly, that they did not admit any liability for payment of Rs. 15,790.46 paise, as alleged; fourthly, that there being no privity of contract between the parties, there was no question of any breach of contract nor of rendition of accounts between them; fifthly, that there was no breach of the original contract with the author as he had been asked to bring the book in conformity with the changed syllabus after introduction of the metric system in academic session 1961-62; that he, on the contrary, neglected to carry out the required alterations in the book and, as a result, they were requested to get the book revised by one L. C. Jain, a a lecturer of the Mahakoshal Mahavidalaya, Jabalpur; that the inaccuracies, therein, if any, were not intentional or deliberate and had been rectified in the later editions; sixthly, that the agreement in question resulted in an absolute assignment of the copyright, and was not a mere licence to publish on certain terms; seventhly, that they had requested the author for a revision in the rate of royalties looking to the rise in cost of raw materials and he agreed to their proposal by reducing the rate of royalty to 12.15 per cent by his letter dated 16th April 1960 (Ex D-6), and while effecting this revision, he had taken away the original agreement the benami nature of the transaction, however, was retained by continuing the transaction in the name of the plaintiff, lastly; that the alleged agreement was for a consideration forbidden by law and, was therefore, legally not enforceable, besides being opposed to public policy and was, therefore, void and unenforceable under Section 23 of the Contract Act. Even otherwise, they alone had the right to print and publish the book in question, but in breach of that agreement, the author had given it for publication to M/s. Narbada Book Depot, Jabalpur, in the year 1960, and since then that concern was selling the book in the market, to their great detriment and in violation of their copyright in the work. For this, the defendants asserted "that they had reserved their right to sue for damages separately", but apparently no such suit has so far been filed. They had, instead, launched a prosecution against both the author Maniram Vishwakarma and his assignee the plaintiff-Sheoratanlal Koshal, for alleged infringement of their copyright, which, however, ended in their acquittal.

The learned Judge has decreed the plaintiffs claim. His findings are that (i) the plaintiff has purchased the copyright in the book Saral Middle School Ank Ganeet from the author Maniram Vishwakarma, for a cash consideration of Rs. 1,200/-, under the agreement dated 9th March 1952 (Ex. P-4); (2) the agreement was neither forbidden by law, nor opposed to public policy under Section 23 of the Contract Act, as the assignment of his rights was with the permission of the Director of Public Instruction; (3) there was a concluded contract between the plaintiff-Sheoratanlal and M/s. Mishrabandhu Karyalaya, through its managing partner Basant Kumar Mishra, on the terms embodied in the agreement dated 13th March 1952 (Ex. P-5); (4) that document was not merely a tentative draft, hut represented the terms and conditions on which the defendant-firm was granted the sole and exclusive right of publication of the book in question; (5) on a true construction of the agreement in question, there was no assignment of any copyright in favour of the defendant firm but only a licence which was revocable on the breach of any of its conditions; (6) the defendant-firm had rendered an account on 16th April 1960, acknowledging its liability to pay Rs. 15,790.46 paise towards the arrears of royalty upto the end of the year 1959 and of the stocks-in-trade as on 26th January 1960; (7) by virtue of the copyright in his favour, the plaintiff became the owner of the book, and not a mere benamidar of the author, Maniram Vishwakarma and was, therefore, entitled not only to recover the amount of Rupees 13,790.46 paise remaining due, but also to rendition of accounts and to the grant of a perpetual injunction. Accordingly, the learned Judge has decreed the entire claim in suit.

Before the Copyright Act, 1957 (Act No. 14 of 1957) was enacted by Parliament, the existing law relating to copyright in India, i.e., its statutory basis, was the British Parliamentary legislation to be found in the Imperial Copyright Act, 1911 (l and 2 Geo. V, Ch. 46) as modified by the Indian Copyright Act, 1914 (Act No. 3 of 1914). Apart from the fact that the Imperial Act did not fit in with the changed constitutional status of India, it was necessary to enact an independent self-contained law on the subject of copyright in the light of growing public consciousness of the rights and obligations of authors and in the light of experience gained in the working of the law as in force during the last forty years. New and advanced means of communications like broadcasting, litho-photography, etc., also called for certain amendments in the existing law, apart from making therein provision for the due fulfilment of international obligations in the field of copyright which India might accept. That was the object with which the Copyright Act, 1957, was enacted, and it attempted a complete revision of the law of copyright which appeared to be inevitable due to the changed circumstances.

We are, however, concerned with the state of things prevalent prior to 21st January, 1958, when the Copyright Act, 1957 (Act No. 14 of 1957), was brought into force. The law then in force was the Imperial Copyright Act, 1911 (1 and 2 Geo. V, Ch. 46) which, with slight modification, was made applicable to this Country by the Indian Copyright Act (Act No. 3 of 1914). The Imperial Copyright Act, 1911, either as operating proprio vigore or as applied bv the Indian Copyright Act, 1914, was "a law in force in the territory of India immediately before the commencement of the Constitution", and it, therefore, continued to be in force as the law of the land by virtue of Article 372(1) of the Constitution. We consider the following passage in Copinger and Skone James on Copyright, 9th Edn., pp. 428-9, as describing the position correctly:

"The United Kingdom Copyright Act, 1911, extended to India as part of His Majestys dominions, but certain modifications were introduced by the Indian Copyright Act, 1914 (No. 3 of 1914). The effect of Section 18 of the Indian Independence Act, 1947 (10 & 11 Geo. VI, C 30) appeared to be that copyright protection both in India and with respect to works originating there remained unchanged."

For a fuller discussion of this subject, see the decision of the Madras High Court in Blackwood and Sons Ltd v A. N. Parasuraman, : AIR 1959 Mad 410

Under the law then prevalent i.e., according to the provisions of the earlier enactments, the first owner of the copyright is the author and his right of assignment is dealt with in Section 5 (2) and (3) of the Indian Copyright Act. 1914, We believe the law on that aspect still remains the same with some modifications, even under the new Copyright Act, 1957. The only change that is relevant for our purposes is, that under the old law, the non-registration of the copyright had not the effect of entailing the dismissal of an action in respect of infringement of copyright commenced when the Act of 1914 was in force see, Balantrapu Venkata Rao v. Valluri Padmanabha Raju. ILR 51 Mad 180 = (: AIR 1927 Mad 981 ). Wallace, J., in that case, followed the view expressed in N. V. Savory Ltd. v. World of Golf Ltd., 1914-2 Ch 566, under the allied Fine Arts Copyright Act, that mere failure to register does not deprive an artist of his copyright. That appears to us to be a correct and reasonable view. The Indian Copyright Act, 1914, had nowhere made any provision for the registration of copyrights. Under the Copyright Act, 1957. it appears that under Sections 13 and 45, the registration of book with the Registrar of Copyrights, is a condition for acquiring copyright with respect to it. A plain reading of the several provisions of the Act, leaves no doubt in our minds that a copyright in a book now is only secured if it is an original compilation and has been duly registered according to the provisions of the 1957 Act. Once it is so registered, the author is deemed to acquire property rights in the book. The right arising from the registration of the book can be the subject-matter of civil or criminal remedy, so that, without it the author can have no rights, nor remedies in spite of the fact that his work is an original one. We are, however, concerned with the state of law prevalent under the Imperial Copyright Act, 1911, enacted by the British Parliament, subject to such modifications as stated in the Indian Copyright Act, 1914. It is necessary for us to deal with this aspect because the learned counsel for the appellants, during the course of his arguments, obliquely suggested that the copyright of the book in question "Saral Middle School Ank Ganeet not being registered, neither the author nor his assignee had any kind of right or remedy. The whole object of this discussion is to remove that misconception.

Under the law relating to copyright then prevalent, to which we have already referred, viz., the Imperial Copyright Act, 1911, as adopted or modified to suit Indian conditions by the Indian Copyright Act, 1914, a person had an inherent copyright in an original composition or compilation without the necessity of its registration. Under the English enactment (Sections 1 and 2) copyright may subsist subject to the provisions of the Act "in every original literary, dramatic, musical artistic work."

While we are dealing with this aspect, it is also necessary for us to dispel the doubt expressed by the learned counsel for the appellants that no copyright can be had in respect of a textbook on arithmetic like Saral Middle School Ank Ganeet, because it would necessarily be, in a different, form, compilation of certain arithmetical problems originated by others. We are clearly of the view that the assumption of the learned counsel is wholly unfounded. Neither original thought nor original research is essential for a literary work to be original under Section 1, Schedule I, of the Indian Copyright Act, 1914. The Judicial Committee of the Privy Council in Macmillan and Co. v. K. and J. Cooper : AIR 1924 PC 75, while interpreting Section 2 of the Imperial Copyright Act, 1911, had stated:

"The word original does not mean that the work must be the expression of original or inventive thought. Copyright Acts are not concerned with the origin of ideas, but with the expression of thought; and in the case of literary work with the expression of thought in print or writing. The originality which is required relates to the expression of the thought; but the Act does not require that the expression must be in an original or novel form, but that the work must not be copied from another work--that it should originate from the author."

The real test in adjudging the originality of a work is whether it involved any skill, labour and knowledge of the author and that being fulfilled, he would be protected by law, and no one else was permitted to steal or appropriate to himself the result of his labour, skill and learning. As their Lordships have most appropriately stated, the provision of Section 2 of the Imperial Copyright Act was based on the moral principle resting on the Eighth Commandment. Thou shall not steal. Apart from this, the originality in writing of a successful text-book in a subject like arithmetic lies upon the skill of the author. Some authors have not the art or the necessary skill to make a compilation nor are all compilations of the same nature or quality. That is the reason why one dictionary, gazetteer, grammar, map, almanac, encyclopedia, guide-book, etc., would sell and not the others. There lies the skill of the author of the work which brings to him commercial success. The contention that no originality can be claimed in such works can, therefore, hardly be accepted. For instance, a reference to the Shorter Oxford Dictionary or the Websters New International Dictionary would plainly show the difference in treatment of the same words in contrasting ways. In Copinger and James on the Law of Copyright, 9th Edn., pp. 148-49, the law has been summarised as follows:

"In the case of compilations such as dictionaries, gazetteers, maps, arithmetics, almanacs, encyclopedias and guide books, new publications dealing with similar subject-matter must of necessity resemble existing publications, and the defence of common source is frequently made where the new publication is alleged to constitute an infringement of an earlier one."

Thus, it is clearly recognised that all such books are capable of having a copyright in them. In text-books on arithmetic or books of the above description, the amount of originality of the author may be small, but the extent of his thought, skill and labour may be tremendous, and it is that which is protected by law. We are, therefore, of the view that the book Saral Middle School Ank Ganeet will certainly be an "original work", within the meaning of the English Copyright Act as applied to British India, and, therefore, the author and/or his assignee not only had or has a copyright therein but also had the right to enter into a publishing contract of any kind in respect thereof.

In this case we are concerned with the simplest type of literary copyright, namely, the right to print, publish and sell copies of the particular book in question, and in the case of a simple text-book on arithmetic, no complications as regards any dramatic or film rights can possibly arise. In determining the question whether a particular agreement relating to this was an absolute assignment or a mere licence, the effect of the opinion of Viscount Sumner delivered in the House of Lords in Messager v. British Broadcasting Co. Ltd. 1929 AC 151 seems to be that one has to look on the real meaning of an agreement rather than the particular, in that case unfortunate, choice of words of the parties. In other words, the real meaning of an agreement rather than the mere choice of words has to be looked into in deciding whether there was a complete or partial assignment of the copyright or a mere licence to print, publish and sell copies of the work in question. We would now refer to the contentions raised at the Bar.

The learned counsel for the appellants has assailed the decree under appeal on the following grounds:

(1) The plaintiff being merely a benamidar was not entitled to sue for any of the reliefs asked for, since there was no privity of contract between the parties;

(2) The document dated 13th March 1952 (Ex. P-5) was simply a "tentative draft" and not a "concluded contract" between the parties. At any rate, it was a "unilateral" document, executed by the plaintiff, and the mere addition of the word approved by Basant Kumar Mishra, a partner of the defendant-firm could not mean its acceptance, and, therefore, the matter was still at the stage of negotiation between parties which had not matured into an enforceable contract;

(3) Alternatively, on a plain reading of the said agreement, the copyright of the book had itself been transferred in favour of the defendant-firm and not merely a licence to publish on conditions: and, at any rate, it was an irrevocable licence which would not be terminated by notice;

(4) The failure of the author to revise the book in question was itself a breach of covenant which disentitled him or his assignee from claiming any equitable relief, for rendition of accounts, or, for grant of an injunction;

(5) Having himself terminated the contract by his notice dated 25th April 1961 (Ex. P-28), the plaintiff could not fall back on its terms, for claiming any royalty for the period subsequent thereto; and his claim. If any, was to sue for damages; and

(6) The claim for recovery of Rupees 13,790.46 paise, the alleged amount due, as per the Statements of account dated 16th April 1960 (Exs. P-6 to P-8), was barred by limitation.

None of these contentions is really well founded and they must all be rejected for reasons we shall presently state.

As to the first, the contention that the plaintiff Sheoratanlal Koshal was a benamidar of the author Maniram Vishwakarma and not the real owner of the copyright can hardly be accepted. The allegation in the written-statement that the author, being a Government servant, could not openly engage himself in any kind of business which vielded profit to him without permission of the Director of Public Instruction, or, that securing of such permission, besides entailing endless enquiries by Government, was also by no means easy, or that the author, being a Government servant, was precluded under the Government Servants Conduct Rules from effecting any assignment of his rights and had, therefore, nominally utilised the name of his father-in-law namely the plaintiff Sheoratanlai Koshal, stands falsified by the plea inserted by way of amendment showing that such permission to the author was duly accorded by the Director of Public Instruction to undertake the work of writing in four parts a text book on arithmetic for use in Clauses V to VIII by his Memorandum No. 4257/F dated 9th November 1951 (Ex. P-l).

Now, when a plea of this nature is raised, the onus probandi to substantiate the transaction to be benami must necessarily be on the person making the allegation, and it has to be established by strictest evidence. The defendants had, therefore, the burden of proving by cogent and convincing evidence that the alleged assignment of copyright in favour of the plaintiff was a colourable or fictitious transaction intended to defeat any provision of law. We, however, find no justification for this assumption. Indeed, there was no occasion for the author Maniram Vishwakarma to have adopted any device of this kind because he had been permitted by the Director of Public Instruction himself not only to undertake the work of writing a text book on arithmetic but also to make an outright sale of his copyright for a lump sum payment under Exception 2 to S.R. 2 below Fundamental Rule 47. In pursuance thereof, he duly assigned his rights therein.

The Courts duty is to give effect to the actual bargain of the parties according to their intention, and when the transaction is in writing, the intention of the parties has to be gathered from the actual words used in the instrument unless they are such as not to convey their intention correctly. In Copinger and Skone James on Copyright, 9th edition, P. 376, the different forms in which such agreements in common use partake are set out thus:

"Agreements between authors and publishers fall roughly into four classes, namely:--

(1) outright sales of copyright in consideration of a single payment;

(2) licences for a period on royalty terms;

(3) profit-sharing agreements: and

(4) publication on commission, no rights in the work being vested in the publishers."

Under the terms of the agreement dated 9th March 1952 (Ex. P-4) between the parties, the author Maniram Vishwakarma had parted with all his rights in lieu of the payment of a price. For a correct interpretation of that contract, we must primarily look to document itself. It reads:

"This agreement is made this day 9th of March 1952 between Shri Maniram Vishwakarma son of Shri Nanhebhai Vishwakarma resident of Jabalpur (hereinafter for the sake of brevity referred to as the Author) of the one part and Shri Sheoratanlal Koshal son of Shri B. L. Koshal resident of Mandla (hereinafter for the sake of brevity referred to as the publisher) of the other part.

Whereas the author has written a book on Arithmetic for the Middle Classes in four parts, the manuscript of which is ready and fit for publication. And whereas the publisher is desirous of starting publications and the author is willing to entrust the publication thereof to the said publisher.

That the publisher shall pay Rs. 1200/-(one thousand and two hundred only) in all to the author for the said four parts of the books.

That the publisher shall print or cause the said books to be printed in four volumes to be used for middle classes. The books may be named by the publisher according to his choice.

The books may be published by the publisher himself or he may in his discretion transfer his publishing rights to some one else. For the publication of the said books for the said sum of Rs. 1200/- (one thousand and two hundred only), the author conveys all rights to Sheoratanlal.

The author has received Rs. 500/- (Five hundred only) today and has handed over the manuscript to the publisher. The balance of the sum amounting to Rs. 700/-(Seven hundred only) shall be paid to the author within a period of three months by the said publisher.

The publisher will have a right to get the work revised, translated or rewritten by the author if and when necessity arises on account of change of syllabus or any other like reason and. in the event, will be liable to reimburse the author suitably. In the event of the author refusing to rewrite or revise the work, the publisher will be at liberty to get it suitably rewritten and revised by someone else. However, when the work is rewritten or revised by someone else, the publisher will be liable to safeguard and maintain the high standard and prestige of the work done by the author.

The publisher shall not act in any way which may be detrimental to the interest of the books or their reputation and the rights of the publisher will be liable to be forfeited in case the publisher acts In a manner detrimental to the interest or reputation of the books.

That the author hereby declares and assures the publisher that the book written by him is his sole work and would not infringe the copyright of another.

M. R. Vishwakarma, Author. Sheoratanlal, Publisher."

Apart from the words the author conveys all his rights, the other terms are clearly indicative that the agreement between the parties was of the first category, i.e., it was an agreement for an outright sale of the copyright without reservation of any kind by the author in respect of any right whatever in himself. The plaintiff had, therefore, full legal title to the copyright and as a logical consequence thereof, he also had acquired the right to enter into a publishing contract like the agreement dated 13th March 1952 (Ex, P-5) with the defendants. A fortiori, the plaintiff had a right to sue then in his own name for his royalties thereunder and for the other consequential reliefs flowing from his legal ownership in the work, i.e., the right to an account of profits, which is only an equitable remedy incidental to the right of injunction, if there was any infringement of his copyright and, upon that event, also of recovering the infringing copies, if any which were pirated from the work in question.

From a perusal of the terms appearing in the agreement taken as a whole and particularly the operative portion thereof, we find that the executant had unequivocally and in categoric language "assigned" his copyright. The recitals of the document are plain enough and the terms are susceptible of no other construction than this that the author Maniram Vishwakarma had made an outright sale of his copyright in favour of the plaintiff Sheoratanlal Koshal in consideration of payment of Rs. 1,200/- for the making of such assignment. The contention is not that the arrangement so arrived at was either forbidden by law or was against public policy and, therefore, void and unenforceable under Section 23 of the Contract Act. The submission is that the plaintiff had no right to sue, being a mere benamidar.

As already stated, we find that the author having been permitted under Exception 2 to S.R. 2 below Fundamental Rule 17 to undertake the work in question provided he assigns all his rights, there was no occasion for him to enter into a colourable transaction to defeat any provision of law. We may incidentally mention that although the defendants had pleaded that the agreement in question was for a consideration which was forbidden by law and opposed to public policy and, therefore, was not enforceable under Section 23 of the Contract Act and had raised this issue in the Court below, the learned counsel appearing on their behalf has abandoned that stand, and no provision either in the General Book Circulars or in the Government Servants Conduct Rules were brought to our notice to suggest that such contract would be legally invalid. On the contrary. Exception 2 to S.R. 2 below Fundamental Rule 47 not only permits a Government servant to be the author of a book but also enables him to assign his rights under certain conditions.

Even otherwise, the onus of establishing a transaction to be benami is on the person who asserts it. This cannot be a matter of presumption and has not only to be averred in the pleadings but also must be proved by legal evidence. In absence of evidence, the apparent title prevails See, Smt. Surasaibalini Debi v. Phanindra Moban Majumdar, : AIR 1965 SC 1364 . Normally, the proof of a transaction being benami rests not only on direct evidence but also on the relevant circumstances. In absence of any direct proof, the circumstantial evidence may sometime clinch the issue. The real criterion in cases of benami transactions is to consider the source of funds for the acquisition, motive, possession of property, custody of title-deeds, etc. See Sreemanchunder Dey v. Gopaul Chunder Chuckerburty (1866-67) 11 Moo Ind App 28 (PC) and Gangadara Ayyar v. Subramania Sastrigal, : AIR 1949 FC 88.

In Gangadara Ayyers case, : AIR 1949 FC 88 (supra), their Lordships of the Federal Court have stated that source of money for the acquisition of property is an important test, but unfortunately in a case like the present, that is of no avail. Even if it were, we have the testimony of P.W. 2 Sheoratanlal Koshal and P.W. 6 Maniram Vishwakarma that the transaction was real and the assignment of copyright was effected on payment of Rs. 1,200/-. If in the nature of things, there, is no scope for applying these tests, the burden of proving the transaction to be benami would be very much greater. In matters of this description the decision of the Court must rest not on mere suspicion but only on legal evidence, including testimony of witnesses. On the reasonable probabilities and legal inferences arising from the proved or admitted facts in the case, we are satisfied that the alleged benami nature of the transaction Is not established, and, therefore, the apparent title must prevail. Having dealt with the plaintiff as the owner of copyright and having derived benefits of a contract with him, the defendants are really precluded from contending that the real title resides elsewhere. Such an estoppel necessarily arises by reason of their privity of contract.

19-20. Next, the question is whether the parties were still at the stage of negotiations and, therefore, the agreement dated 13th March 1952 (Ex. P-5) had not matured into an enforceable contract. The argument is that the document Ex. P-5, on which the suit is based, is merely a tentative draft of an agreement and did not represent a concluded contract between the parties. Alternatively, it is suggested that it was a unilateral document executed by the plaintiff alone, and the mere addition of the word approved by Basant Kumar Mishra, defendant No. 3. would not mean its acceptance by defendant No. 1 M/s. Mishrabandhu Karyalava. (After considering the evidence, the Court held that the agreement dated 13th March 1952 (Ex. P-5) truly represented a concluded contract between the parties.)

Coming to the third contention raised by the learned counsel, we are satisfied that it is wholly devoid of substance. In dealing with arrangements between authors and publishers, particularly as regards publishing agreements, Copinger and Skone James indicate that no formalities are required, stating:

"Contracts between authors and publishers are not, as in some countries, regulated by any special law, but their validity, construction and enforcement depend upon the ordinary rules of law governing contracts relating to dealings with personal property. In practice, such arrangements vary, through many gradations of formality, from an oral or implied licence to publish a single article to a full-length publishing agreement. It is the informal agreement leaving many essential terms to implication that most often renders difficult the determination of the respective rights of the parties." (p. 375).

According to the learned authors, writing is essential when there is an assignment of copyright or an exclusive licence to publish. As already stated, such agreements form into four distinct categories. We are, however, not left to any implications to ascertain the nature of the right that came into existence, because the terms of the agreement between the parties are embodied in a writing dated 13th March 1952 (Ex. P-5). In the case of such formal agreements, the most important point to determine is whether any copyright is to be vested in the publisher or whether a licence only is intended. In the former case, the publisher will enjoy the full legal title to the copyright and will alone be entitled to enforce the right against third parties. In the case of a licence which in a publishing agreement will normally be an exclusive licence, the grant is subject to certain conditions and on their non-fulfilment, the licence is capable of being revoked. We have no manner of doubt that the real arrangement between the parties was that the copyright in the work belonged to the plaintiff Sheoratanlal and the defendants firm M/s. Mishrabandhu Karyalaya was given an exclusive licence to publish it on certain conditions. The position would have been entirely different if the plaintiff had assigned his copyright and stipulated for payment on royalty terms. In that event, the rights of the parties would have been worked out in the light of the decision in Barkar v. Stickney, 1919-1 KB 121. In that context, Copinger and Skone James state at p. 379:--

"It seems fairly clear that as the law now stands, an author, who has entered Into a publishing agreement in which the copyright is assigned to the publisher on royalty terms, has no right of action for the royalties against an assign of the publisher. Authors, therefore, should keep the copyright themselves and assign no more than a right to publish conditional upon royalties being paid and only assignable if they are provided for."

That, however, is not the case, because the plaintiff had not assigned his copyright on royalty terms but merely entered into a publishing agreement with M/s. Mishrabandhu Karyalava for retaining in himself the copyright and conferred on them the right to publish the work on payment of certain royalty. The matter depends on the construction of the terms of the agreement dated 13th March 1952 (Ex. P-5), which reads:

^^eSa fkojruyky dksky] eaMyk dk fuoklh gwaA eSaus tks vad&xf.kr dh iqLrd ftldk uke vknkZ vad xf.kr gS vkSj tks fd fe- Ldwy dh d{kkvksa ds fy, pkj Hkkxka esa fy[kh xbZ gSA mDr iqLrd ds ys[kd Jh- euhjke foodekZ ls lokZf/kdkj lfgr [kjhn dh gS] ml iqLrd ds izdkku dk vf/kdkj eSa tcyiqj ds feJ cU/kq dk;kZy; dks fuEufy[kr krksZa ij nsrk gwa fd&

feK cU/kq dk;kZy; ls eq>s fcdh gqbZ izfr;ksa ds ewY; ij izfrkr iUnzg% izfrkr jk;LBH feyk djsxhA

2 jk;Dyh dk fglkc izfro"kZ fnlEcj ds ekg esa gqok djsxkA

3 eq>s vHkok esjs }kjk fu;qDr O;fDr dks bl iqLrd ds fglkc&fdrkc ns[kus dk iw.kZ vf/kdkj jgsxkA

;fn bl iqLrd dks vU; fdlh izfr ds ikB;e ds vuq:i cukus esa fdlh izdkj ds lakks/ku dh vko;drk gksxh rks eSa iqLrd ds ewy ys[kd ls og dk;Z fu%kqYd djk nwaxkA

;fn feJ cU/kq dk;kZy; bl iqLrd ds vuqokj dks vU; fdlh Hkk"kk esa izdkfkr djuk pkgsaxs rks mUgsa bUgha krksZ ij mudh izdkku dk vf/kdkj jgsxkA ;fn feJ cU/kq dk;kZy; vuqokn izdkfkr u djs rks eq>s fdlh vU; izdkkd ls izdkfkr dukus dk iw.kZ vf/kdkj jgsxkA ml nkk esa vU; izdkku feJ cU/kq dk;kZy; dks fcdh gqbZ izfr;ksa ij izfrkr ,d izfrkr jk;YVh nsxkA

;fn e; iznsk ds fefMy Ldwy dh d{kkvksa ds bl fo"k; ds ikB;e esa dksbZ ifjorZu gksxk rks eSa ys[kd ls bl iqLrd dk lakks/ku iwjk djk nwaxk ftls feJ cU/kq dk;kZy; dks bUgha krksZ ij Nkiuk gksxk; vU;Fkk eSa mls fdlh nwljs izdkkd ds }kjk Niokus esa iw.kZ Lora= jgwaxkA

" feJ cU/kq dk;kZy; bl iqLrd dk izdkku vkt ls rhu ekg ds Hkhrj djkus dk izoU/k djsaxs vkSj eq>s :i;s ,MOgkUl jk;YVh ds crkSj nsaxs tks fd esjs jk;YVh ds fglkc esa n 2 cjkcj cjkcj fgLlksa esa nks o"kksZ esa dkV fn;k tk;sxkA

" eSa bl iqLrd dk dksbZ laLdj.k u rks Nkiwaxk vkSj u NiokmaxkA eSa bl iqLrd dh Hkk"kk vkSj fo"k; dks la{ksi esa djds fdlh nwljs ls izdkfkr u djkmaxk vkSj u Lo;a d:axkA

iwoksZDr dk;kZy; ds laiknd dks fo"k; dh j{kk djrs gq, bl iqLrd ea lakks/ku vkSj ifjorZu djus dk iw.kZ vf/kdkj jgsxkA eSa fookl fnykrk gwa fd bl iqLrd ds izdkku esa dksbZ fo"k; ,slk ugha fy;k x;k

gS ftlls fdlh nwljh iqLrd ds izdkku dk LoRo dk vigj.k gksrk gksA ;fn blesa ,slk dksbZ nks"k fudysxk rks mldk mkjnk;h eSa jgwaxkA iwoksZDr dk;kZy; bl iqLrd ds pkgs ftrus laLdj.k fudkys blesa eq>s dksbZ vkifk u gksxhA

mij fy[kk vf/kdkj i= eSaus viuh psrukoLFkk esa blfy, fy[k fn;k gS fd le; ij dke vk,A

rkjh[k &&2 n- %& ------------------------------------

Approved ckcj [kkbZ eaMyk** Sd/- B. K. Mishra.

lk{kh %& ----------------------------------------------

2 ---------------------------------------------

As a matter of construction of the words used by the parties, the agreement really intended a licence only and not an absolute or partial assignment of the copyright, that is to say, it was a publishing agreement with a printers firm on the usual term of payment of a certain percentage of royalty to the owner of the copyright, and, therefore, the defendant firm M/s. Mishrabandhu Karyalaya acquired no right in the copyright itself but only an exclusive licence to publish. In Halsburys Laws of England, 3rd Edn., Vol. 8. Paras. 743, and 758 the effect of such agreements has been stated thus:

"A licence may be for a term of years or for a definite period. In which case, in the absence of anything to the contrary in the contract, the publisher will not be restrained from selling, after the expiration of the time specified in the agreement, copies printed during that period. Warne v. Routledge (1874) ILR 18 . 497 and Howitt v. Hall (1862) 6 LT 348. Where under an agreement between an author and his publisher a licence is conferred on the publisher without limitation to any definite period, and where payment to the author is by royalties or by a share in the profits, the licence, although exclusive so long as it exists, is revocable; and the author can restrain the publication of any edition subsequent to the notice of revocation. Reade v. Bentley (1858) 4 K& J 656 : (1874) 18 Eq 497. 408).

"In the case of agreements between authors and publishers, or theatrical producers, it is often difficult to distinguish between a sole and exclusive licence and an assignment of copyright. Where the agreement between the author and his publisher contains no express terms as to the copyright, if the consideration is payment to the author of royalties or a share of the profits instead of a sum of money paid down, the inference is that the copyright is not assigned, but that a sole and exclusive licence is concerned upon the publisher. Hole v. Bradbury 1879-12 Ch D 886 per Fry, J.; Re. Judes Musical Compositions 1907-1 Ch 651 (CA), Stevens v. Benning 1855-6 De Gm and G 223 and Commr. of Inland Revenue v. Longmans Green and Co. Ltd., (1932) Macg Cop Cas (1928-35) 345,. 414). Applying these principles to the agreement in question, we are clearly of the view that the aforesaid agreement dated 13th March 1952 (Ex. P-5) created a licence in favour of the defendant firm M/s, Mishrabandhu Karyalaya, who thereupon acquired the benefits of a publishing agreement subject to their fulfilling the terms and conditions contained therein. We are fortified in this conclusion by the following observations in Copinger and Skone James on Copyright, 9th Edn., at p. 384:

"But wherever there are continuous obligations on the part of the publisher--for instance, the payment of royalties to the author -- the tendency of the courts is to construe the agreement as conferring upon the publisher a conditional licence to publish rather than as giving him an equitable title to the copyright,"

It seems to follow from these that upon non-fulfilment of any of the terms which are essential to the contract itself, the licence was capable of being terminated by reasonable notice.