Facts of the Case

Global Music Junction Pvt. Ltd., a music company, entered into a production agreement dated 27.05.2021 (effective 01.06.2021) with singer Shatrughan Kumar (known as Khesari Lal Yadav), for creation and production of 200 songs over 30 months for consideration of ₹5,00,00,000. Under the agreement, all intellectual property in the content vested with the appellant, and the singer agreed to work exclusively with it, subject to specified exceptions in an Addendum. When the appellant alleged the singer began working with third parties in breach of this negative covenant, it filed suit CS(COMM) No.715/2022 seeking a permanent injunction, rendition of accounts, and damages, obtaining an ex-parte ad-interim injunction on 14.10.2022. A learned Single Judge, by order dated 06.01.2023, vacated that interim injunction and dismissed the appellant's application for interim relief. The appellant challenged that order in this appeal.

Issues Involved

  1. Whether the negative covenant restraining the singer from working with third parties was enforceable notwithstanding Section 14 of the Specific Relief Act, 1963 (which generally bars specific performance of contracts of personal service).
  2. Whether the appellant's suit was liable to be dismissed for lack of territorial jurisdiction or referred to arbitration on the ground of fraud.
  3. Whether enforcing the covenant would amount to indirectly compelling personal service or render the singer idle.

Petitioner's Arguments

  • The 2018 amendment to the Specific Relief Act made specific performance a general rule rather than an exception, strengthening enforcement of contracts.
  • Section 14 was inapplicable since only a negative covenant was being enforced, not the positive obligation to create songs; damages were not an adequate remedy.
  • The singer's conduct in working with third parties despite the exclusivity clause was neither honest nor fair, and enforcing the covenant would not render him idle since he had numerous other income streams (acting, dancing, TV, stage shows) apart from selling new songs.

Respondent's Arguments

  • The addendum containing the negative covenant was never really acted upon, and the dispute should be referred to arbitration.
  • The agreement and addendum were one-sided and oppressive on him, effectively creating a "bondage," and enforcing the exclusivity clause would amount to an indirect decree of specific performance of personal service, which the law does not permit.

Court Order / Findings

  • The Division Bench held that the 2018 amendment strengthened contractual enforcement and did not preclude injunctions to enforce negative covenants; Section 14 of the Specific Relief Act did not bar enforcement of Clause 3.5 of the Addendum, which was only a negative covenant.
  • The respondent's own admissions (that 8 of 12 songs delivered were after the Addendum, and that he had other lucrative income avenues) undercut his "bondage"/idle-rendering arguments; there was no allegation that the appellant itself had breached the agreement.
  • The impugned Single Judge order was set aside, and the Court injuncted the singer from engaging with any third party (including named co-defendants) for monetising any new song until 30.09.2025, unless the appellant refused to accept delivery after being offered a chance to deposit the balance fee of ₹2.20 crore with the Registry — while clarifying he remained free to continue acting, singing and dancing on TV, social media and stage.

Important Clarification

This is a copyright/contract-law appeal concerning specific performance of an exclusivity clause in a music production agreement; it contains no GST ruling of any kind — the ₹5 crore consideration is mentioned only as "plus taxes," without any GST issue being argued or decided. It is useful chiefly to entertainment-industry professionals as guidance on enforceability of exclusivity/negative covenants after the 2018 Specific Relief Act amendment.

Sections Involved

  • Specific Relief Act, 1963 (as amended in 2018) — Section 14, Section 27
  • Copyright Act, 1957 — ownership of literary, musical and cinematographic works
  • Code of Civil Procedure, 1908 — Order XXXIX Rules 1, 2 and 4

Decision – In Favour of

Appellant (Global Music Junction Pvt. Ltd.) — appeal allowed, interim injunction against the singer restored on modified terms; no GST question involved.

Case Details

  • Court: High Court of Delhi at New Delhi
  • Case: FAO(OS)(COMM) 7/2023 with CM Appls. 2067/2023 and 2070/2023
  • Coram: Hon'ble Mr. Justice Manmohan and Hon'ble Mr. Justice Saurabh Banerjee
  • Date: 05.09.2023 (reserved 12.07.2023)

Link to Download the Order

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