Case Notes By Aseem Chawla, Shamik Saha & Priyanka Mongia

Supreme Court Removes Gender Barrier that Prohibited Women from Working as Bollywood Make-up Artists

The Supreme Court of India in Charu Khurana vs. Union of India (2015 [1] SCC 192), ruled that a woman make-up artist cannot be barred from practicing as a “make-up artist” and strongly criticized this decades-old practice by the Cine Costume Make-up Artists and Hair Dressers Association (“CCMAA”) as gender-biased in violation of statutory and constitutional provisions.


The petitioner, Charu Khurana, a Hollywood-trained Make-up Artist and Hair Stylist, applied for membership in the CCMAA as a “Make-up Artist and Hair Stylist.”  The CCMAA rejected her application on two grounds, including the fact that CCMAA membership as a “Make-up Artist” is limited to men.  Khurana was told that she could apply only as a “Hair Dresser” as that would be available to her as a woman.  She was told to delete from her application any reference to “Make-up Artist.”  Khurana was also fined ₹ 26,500 ($400) fine, for having worked as a Make-up Artist and Hair Dresser without prior approval from the CCMAA.  Khurana appealed the CCMAA’s decision to its parent body, the Federation of Western India Cine Employees (“FWICE”).  CCMAA argued that the practice of limiting licenses to practice as Make-up Artists to men was not discriminatory as the specialty of Hair Dresser was open to women.  Women therefore had equal opportunities with men in the field of make-up and hairdressing.

FWICE overruled the CCMAA and recommended that Khurana be licensed as a Make-up Artist and Hair Dresser and that pending the processing of her application she be permitted to work in that capacity in films, television serials, music albums and advertising films.  When the CCMAA declined to accept FWICE’s recommendation, Khurana filed a writ petition before the Supreme Court under Article 32 of the Constitution of India.  (Article 32 empowers the Court to issue writs against the executive branch, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari for the enforcement of constitutionally guaranteed rights.)  The Court found it had jurisdiction here because Article 39A requires the State to ensure that the legal system promotes justice, on a basis of equal opportunity.  Given the CCMAA was registered with the Registrar of Trade Unions (as required by law) and given further that the Registrar had wrongly accepted the CCMAA’s discriminatory by-laws (discussed below), the Court had the power to issue a writ against the Union of India (of which the Registrar is a part) to require it to promote justice on the basis of equal opportunity.

Khurana alleged that Clause 4 (Membership) and Clause 6 (Admission of New Members) of CCMAA’s by-laws were discriminatory because they barred women from working as Make-up Artists. Khurana also alleged that this discriminatory policy was enforced by the practice of harassing women in the workplace who managed to work as a make-up artist without the CCMAA’s approval.

The Court held that the CCMAA’s by-laws were discriminatory against women and ordered that the impugned clauses be expunged and that Khurana and her co-petitioner make-up artists be registered in that capacity within four weeks of its order.


Madras High Court Holds There Is No Copyright In A Live Broadcast

The issue in Commissioner of Income Tax-IV v. Delhi Race Club (1940) Ltd. (2015 [273] CTR Del [503]) was whether payment made by the Delhi Race Club for broadcasting rights of live horse races from at acing clubs was a royalty liable to taxation subject to withholding at source. The Delhi Race Club was engaged in the business of conducting horse races and derived income from betting fees, commissions and entry fees.  The Club also paid other race clubs for the right to broadcast their races.

During assessment proceedings the Assessing Officer ruled that the amounts paid to other clubs for the right to broadcast their races was a royalty for transfer of a copyright under sections 40(a)(ia) and 194J of the Income Tax Act, 1961 and was subject to tax withholding at source.  The Commissioner of Income Tax (Appeals) upheld the Assessing Officer’s ruling.  The Delhi Race Club appealed to the Income Tax Appellate Tribunal (”ITAT”) which reversed the Commissioner and held that the payment made for live telecast of horse races is not income by way of royalty for a transfer of copyright and, therefore, is not subject to withholding at source (known in India as “tax deducted at source”).

The Revenue Department appealed ITAT’s ruling to High Court of Delhi, which, based on the language of the Income Tax Act, framed the issue as being whether payment for live telecasts of horse racing is a payment for transfer of a “copyright” or “scientific work.” If so, the payment would be taxable and subject to withholding.  The Delhi Race Club argued that the right to broadcast or telecast is different from a copyright, and payment for live telecasts was not a payment for transfer of any copyright. The Club argued that a broadcast or telecast is not copyrightable work because, except for labor, skill and capital, it does not have any underlying creativity and because it shows a performance meant for public viewing. Accordingly, a payment made for a live telecast cannot be said to be a payment for transfer of a copyright.

Applying rules of statutory interpretation, the Court held that in clause (v) of Section 9(1)(vi) of the Income Tax Act, the phrase “the transfer of all or any rights (including the granting of a licence) in respect of any copyright, literary, artistic or scientific work” Parliament intended to mean “the transfer of all rights in respect of any copyright in literary, artistic or scientific work.  The Court reasoned that rules of statutory interpretations permitted it to depart from the rule of literal interpretation because a literal interpretation would render the statute meaningless.  The The word “copyright” cannot be said to be a type of work as would be a literary, artistic or scientific work.  Copyright exists only as it applies to a work. Before any words are read to repair an omission in the act, it should be possible to state with certainty that the inserted words would have been inserted by the draftsman and approved by Parliament had their attention been drawn to the omission before the bill was passed into law.

The Court held that live television coverage of any event is a communication of visual images to the public and falls within the definition of “broadcast,” a word that is not mentioned in the section discussing transfer of copyright. That apart it was noted that section 13 of the Copyright Act, 1957, does not contemplate broadcast as a work in which “copyright” exists.  Under the section, copyright exists only in literary, dramatic, musical and artistic work, cinematograph films and sound recordings.  Similarly, under section 14 of the Copyright Act, “copyright” means the exclusive right to reproduce, issue copies, translate, or adapt a work which is already existing.

The Court cited it earlier decision in ESPN Star Sports v. Global Broadcast News Ltd., 2008 (38) PTC 477, where it observed that the language of the Copyright Act, 1957 expressed a clear legislative intent to treat copyright and broadcasting reproduction rights as distinct and separate rights.

Accordingly, the Court held that as payments made by the Delhi Race Club to other race clubs for the right to broadcast their live races were not copyright-related royalties, the Club had no duty to withhold taxes on those payments.


Delhi High Court Recognizes a Cause of Action of Infringement of “Personality Rights”  

In Shivaji Rao Gaikwad vs. Varsha Productions (2015 [2] CTC 113), plaintiff, Rajnikanth, a famous and acclaimed actor of long-standing in the Indian film industry, mostly in Tamil language films (“Tollywood”), filed suit for a permanent injunction restraining the defendant Varsha Film Productions from using his name, image, caricature or style of delivering dialogue, in the Varsha Productions 2015 Hindi language comedy film spoofing his film hero persona titled Mai Hoon Rajnikanth (“I am Rajnikanth”). The Madras High Court issued an interim injunction restraining Varsha from releasing the film pending a decision on the application for a permanent injunction.

Rajnikanth’s suit for a permanent injunction was based on three grounds: infringement of copyright, infiltration of Rajnikanth’s personality rights by such unauthorized use, and misrepresentation and deception in the minds of public leading to passing off.  Rajnikanth asked that Varsha be ordered to remove all references, press releases, videos, posters, advertisements, content, publicity materials containing his name, image, caricature, and style of delivering dialogue from all websites, television channels, radio channels, newspapers and, or other modes of advertisement in any other modes of electronic and, or print media with respect to the film.  He also asked for compensation and punitive damages of ₹2,500,000 ($42,000 based on the currency exchange rate, or $125,000 based on purchasing power parity) for the unauthorized use of the his name, image, caricature, style of delivering dialogues, and for the costs of the suit

Rajnikanth contended that he did not want gross commercialization of his name and reputation, as a consequence of which he had deliberately chosen not to authorize any biopic featuring him or create any work based upon him or his personality.  Rajnikanth further alleged that, based on various press releases, videos, web articles, posters and information from other sources, it was evident in Mai Hoon Rajnikanth  that it exploited his superhero image not to speak of the fact that the movie also had scenes of an immoral nature. Varsha never obtained his consent or permission, either written or oral, to use his name, caricature, image, or style of delivering dialogue as depicted in the film.

Varsha argued that the film was neither a biopic nor based on any event of Rajnikanth’s life. Varsha also denied putting the plaintiff’s image, caricature, style of delivering dialogues, film sequence, song, tune in the film.  Varsha contended that the only reference to Rajnikanth was in the title Main Hoon Rajinikanth, which is a common, non-copyrightable name which just happens to be the first name of the protagonist in the movie.  Relying on Section 17 of the Copyright Act, 1957, Varsha also countered that only the first owner of a name can claim copyright and be entitled to a license of copyright. But in this case, there was no evidence of when the name “Rajinikanth” came into being, or who first thougth of it, which demonstrates that the name has long been in public domain.  Moreover, the name “Rajinikanth’ has been used in different movies on several occasions.  Varsha denied that the movie had scenes depicting the character in immoral situations. Varsha also contended that a “Personality Right” is not recognized under any law in India.

In granting the permanent injunction, the Court observed that although “personality right” is not defined under any law in India, the Courts have recognized it. The Court explained that “personality right” vests on those persons who, like Rajnikanth, have attained celebrity status—a fact that Varsha did not dispute.  The celebrity, as here, must be identifiable from the unauthorized use. Moreover, infringement of personality right requires no proof of falsity, confusion, or deception, especially when the celebrity is identifiable. The fact that the name Rajnikanth is a common name, thus, is not a defense if, as here, this particular Rajnikanth is a celebrity recognizable in the movie.

Aseem Chawla is the Founder Partner of MPC Legal in New Delhi and leads the firm’s tax practice group. He is currently Vice Chair of India Committee & Asia Pacific Committee of the ABA Section of International Law. He is the Co-Chairperson of Law & Justice Committee of PHD Chamber of Commerce and Industry, India. He can be reached at

Shamik Saha is a member of Bar Council of Delhi and is an associate in the Corporate Law team of MPC Legal, New Delhi. He can be reached at

Priyanka Mongia is a member of The Institute of Chartered Accountants of India and is an associate in the Direct Tax team of MPC Legal, New Delhi. She can be reached at



Is India Special Enough for the 301 List?

By Raj Bhala

A “Special 301 Report” is prepared every year by the Office of the United States Trade Representative (the “USTR”) under Section 301 of the Trade Act of 1974.  The report identifies trade barriers to U.S. companies and products due to the intellectual property laws of other countries.  The USTR is also required to identify “Priority Foreign Countries” (“PFCs”), which are those countries deemed to have inadequate intellectual property laws.  Being designated a PFC may subject a country to U.S. trade sanctions.  In the Spring of 2014, the USTR  came under pressure from American trade lobbies to designate India as a Priority Foreign Country.  The USTR acknowledged problems in India with respect to securing and enforcing patents, protecting trade secrets, counterfeiting trademarked goods, IP piracy, and localization rules.  Localization rules favor a domestic industry or service provider, or domestic IP, vis-à-vis foreign competitors.  While localization rules serve a legitimate purpose, such as protecting data privacy or national security, others are overtly protectionist and implemented largely to enhance the strength of domestic industry.  Unsurprisingly, the reaction in India was anger.  To Indians, the action was an American bullying tactic and unjustified legally.  In a speech delivered in March 2014 in Chicago, the Indian Ambassador to the United States, S. Jaishankar stated that “it would be a mistake [for the U.S.] to pile up public pressure, especially through a misrepresentation of the facts.”  Indrani Bagchi, India’s Fresh Attack in U.S. Trade War, The Times of India, at 19 (Mar. 4, 2014).  Did the ambassador have a point? Continue reading

Challenges in Anti-dumping Investigations in India

J.K. Dadoo and D.P. Mohapatra

The cardinal principle of the World Trade Organization (“WTO”) is trade promotion through the facilitation of the free flow of goods and services among member states with minimal tariff barriers and without non-tariff barriers. In a world where tariff and non-tariff barriers are decreasing rapidly, unfair trade practices like dumping, subsidization and sudden surges in exports,  continue to occur regularly. Thus, anti-dumping, anti-subsidy and safeguard measures are increasingly becoming major tools in the hands of member nations to protect their domestic industries against unfair trading practices. Such measures create a level playing field for domestic industries to compete more effectively in their domestic markets. Among these trade remedial measures, an Anti-dumping Duty is the most frequently used tool for the protection of the domestic industry from “dumping”, i.e. export of an article into the market of another country at a lesser price (normal value) than the price at which it is sold in the domestic market of the exporting country.

India has emerged as one of the frequent users of anti-dumping measures in recent years. The anti-dumping journey of India began in the year 1995. Over the years, India has experienced dumping of various products such as chemicals and petrochemicals, pharmaceuticals, textiles/fibers/yarns, steel and other metals, consumer goods, automotive components, plastics and plasticizers, electrical and electronic items.  Various countries, especially China, were found to be participating in these dumping practices. The anti-dumping investigations conducted by India were predominantly against China, EU member nations, Korea, and Taiwan; even though a large number of other countries were also found to be dumping goods in the Indian market. Continue reading

India’s Public Stockholding of Agricultural Products: Will Exports of Procured Food Grains Cause Trade Distortion?

By Abhijit Das


India’s concern for securing sufficient flexibility for maintaining public stockholding of agricultural products has received significant international attention in the last few months. In the context of public stockholding for food security purposes, some countries have raised an apprehension that exports of food grains from the Food Corporation of India (FCI) stocks distort global trade (See Raul Montemayor,  “Public Stockholding for Food Security Purposes – Scenarios and Options for a Permanent Solution”,  June 2014, ICTSD Programme on Agricultural Trade and Sustainable Development, Issue Paper No. 51).  Exports from a country can be said to distort global markets under two circumstances. First, when the exports benefit from specific subsidies; and second, when the export price is lower than the price at which the product is sold in the home market of the exporting country, i.e. the product is dumped. The mere fact that the export price is lower than the prevailing prices in international markets, including the prices in the importing country, cannot be the basis for concluding that low priced exports are distorting global markets. In order to conclude that low priced exports are distorting global markets, it is necessary to establish factually that the exports are either dumped or benefit from subsidies. It is essential to bear these two considerations in mind while examining whether exports of food stuff from FCI stocks are distorting global markets.

In the above context, this article will explore the question of whether the export of food grains from the FCI stocks could distort trade? Continue reading

Recent Changes in FDI Regime for Indian Realty

By  Vivek Kohli and Anu Chowdhry

Significant changes have recently been made to the Foreign Direct Investment (FDI) regime governing India’s cash-starved realty sector, which has been witnessing declining FDI inflows.  The declining amounts are $2.94 billion in 2009-10, $1.23 billion in 2010-11, $0.73 billion in 2011-12, $0.13 billion in 2012-13, and $.12 billion in 2013-14, according to data compiled by Department of Industrial Policy and Promotion (DIPP), Government of India. In its Cabinet Note in October, 2014, the Government of India proposed numerous amendments to the Consolidated FDI Policy, 2014 (FDI Policy), aimed at increasing inflows and opportunities for growth and employment. With the release of DIPP’s Press Note No.10 on December 3, 2014, the final amendments to the FDI Policy have come into effect, and are analysed in this article. Continue reading

Introduction of Separate Regulatory Framework for Medical Devices

By Sunil Tyagi and Anu Chowdhry

In the Indo-U.S. Joint Statement released for the January 2015 visit of the U.S. President to India, bilateral collaboration in medical devices, pharmaceuticals, biotechnology and health-related information technology occupies prime position. Other healthcare agendas in the Joint Statement include completion of a Memorandum of Understanding among the Indian Ministry of Health & Family Welfare, the Indian Department of Biotechnology, the Indian Council of Medical Research, the All India Institute of Medical Sciences, the U.S National Institute of Health and National Cancer Institute and the upcoming completion of an Environmental Health, Occupational Health and Injury Prevention as well as a Control MoU between the U.S. Centres for Disease Control and Prevention and the Indian Council for Medical Research.

India’s total revenue potential for electronic medical devices is estimated at $ 6.4 billion for 2020. In an Executive Briefing in June, 2010, the United States International Trade Commission (USITC) noted that India’s market for orthopaedic devices alone is expected to touch $600 million by 2015, attributable to an increasing elderly population that is projected to reach nearly 200 million by 2025. Healthcare companies in the U.S. have begun to tap into this market by forming strategic alliances with Indian entities. For instance in October 2013, Minneapolis-based Medtronic, the world’s largest maker of heart rhythm devices, announced its entry in the kidney dialysis business in collaboration with India’s Apollo Hospitals Enterprise Limited, and dedicated an investment of $24 million towards research, development and manufacturing in India. GE Healthcare (healthcare division of American conglomerate General Electric) has set up three manufacturing plants in the State of Karnataka, invested $500 million towards R&D in these facilities and has plans to introduce low-cost portable ultrasound machines in India. Predominant factors attracting such large-scale investment include focus on health insurance coverage and preventive care, rising demand for better medical infrastructure and specialized facilities, as well as growth of medical tourism. Despite the favourable outlook for India’s medical device industry and the U.S. being considered a world leader in medical device innovation, foreign investors are yet to leverage these opportunities – a key reason being that although previous Foreign Direct Investment (FDI) policies permitted FDI in medical devices, separate norms for the sector had not been explicitly provided for. Continue reading

Case Notes – Spring 2015

By Aseem Chawla, Shamik Saha, Pranshu Goel

Bombay High Court Holds That the Issuance of Shares at Premium Does Not Per Se Yield “Income”

Vodafone India Services Private Limited (‘Company’ or ‘taxpayer’ or ‘Vodafone’), a wholly owned subsidiary of Vodafone Tele-Services (India) Holdings Ltd. (‘Holding Company’), issued 289,224 equity shares of face value of ₹10 at a premium of ₹8,509 per share. The tax payer received a total consideration of ₹2,463,800,000 at a fair market value of ₹8,519 per share computed in accordance with the methodology prescribed by the Government of India under the Capital Issues (Control) Act, 1946.

The subject transaction of allotment of equity shares along with the Arm’s Length Price (ALP) of ₹8,519 per share was reported by the taxpayer in the Accountants Report (Form 3CEB) as an international transaction.  However, the tax payer had placed his contention in FORM 3CEB by way of a note that the said international transaction was being reported only as a matter of abundant caution and would by no means affect the income of the Company. Continue reading

The Services Sector in EU-India Trade Negotiations

By Anirudh Shingal

The European Union and India launched negotiations towards a free trade agreement (a “FTA”) in June 2007.  After several rounds, these negotiations entered an intense phase following the February 2012 EU-India Summit.  Both partners would like the negotiations to conclude by the next summit.  One of the important issues in this agreement, officially called the Bilateral Trade and Investment Agreement (the “BTIA”), is the overall ambition of the services package.

The services sector is extremely important for the EU and India in the on-going trade negotiations.  Both the EU and India are predominantly service economies with more than 70% and 50% of their respective GDPs emanating from services.  Thus, any trade agreement between the two that excludes services would ipso facto exclude the most important sectors for both partners.  Moreover, there are significant barriers to services trade between the two, so that substantial coverage of services in a likely agreement could help to deliver improved access to both markets and also lead to more rapid liberalization of India’s services than can arguably be accomplished unilaterally.  While services liberalisation offers direct benefits, much like goods liberalisation, the research literature suggests the presence of more comprehensive systemic benefits via the positive impact of services liberalization on manufacturing productivity.  See, e.g.,  Arnold et. al, 2006a, b, 2007.  Thus, the benefits to both economies from services liberalization will almost certainly be larger than those from goods trade liberalisation. Continue reading