Only When the Company as a Principal Accused Commits the Offence, Individuals Can Be Held Vicariously Liable: Calcutta High Court Directs Trial Court to Add Company as Party

In a significant judgment, the Calcutta High Court dealt with the vicarious liability of individuals in copyright infringement cases, emphasizing that an individual can be held liable only if the company, as a principal accused, is proven to have committed the offence.

The case, Prithwiraj Ganguly vs. The State of West Bengal & Anr., revolved around allegations of unauthorized use of copyrighted sound recordings during an event organized by IQ City (Mani Group), where Prithwiraj Ganguly served as Assistant General Manager. The petitioner sought to quash proceedings initiated against him, arguing that Phonographic Performance Ltd. (PPL), the complainant, lacked legal standing as it was not registered under Section 33 of the Copyright Act.

Vicarious Liability: Justice Shampa Dutt (Paul) referenced Supreme Court judgments, clarifying that vicarious liability arises only when the company itself is implicated and found guilty. "Unless the company as a principal accused has committed the offence, the persons mentioned in sub-section (1) would not be liable," noted the Court.

Legal Standing of PPL: The Court examined the legitimacy of PPL's claim to issue licenses, considering a government notification and a Delhi High Court order. The Court found that the petitioner's claim about PPL’s lack of registration was not substantial enough to quash the proceedings.

Company as Principal Accused: The judgment stressed that a company must be named as a principal accused for proceedings against individuals like the petitioner. The Court observed, "The decision in Anil Hada is overruled with the qualifier as stated in para 51."

Amendment to Include Company as Accused: The Court acknowledged that if specific averments against a company are present in a complaint, the complaint can be amended to include the company as an accused. This view was based on the principle of curable legal infirmity.

Decision: The High Court dismissed the petition for quashing the proceedings and directed the trial court to add the company as a party to the case, proceeding in accordance with the law. The Court underscored the need for a trial to ascertain the claims regarding copyright infringement and licensing.

Date of Decision: 22nd March 2024

Prithwiraj Ganguly vs. The State of West Bengal & Anr.