The Bombay High Court, in March 2021, in Piyush Subhashbhai Ranipa Vs. The State of Maharashtra1 (“Ranipa”) held that offences under section 63 of the Copyright Act, 19572 (“Copyright Act”) and section 103 of the Trade Marks Act, 19993 (collectively “Sections”) are non-bailable and rejected Mr. Piyush Ranipa’s anticipatory bail in connection with various alleged offences including those related to the Sections.

Not long before the decision in Ranipa, the Government of India in 2020, decriminalised sixteen compoundable offenses under the Companies Act, 2013 and directed all ministries to evaluate decriminalising minor, technical or procedural offences. The intent of such legal reforms was to increase the ease of doing business in India by eliminating criminal sanctions for offences which could have economic deterrents, but the injury associated therewith is of a nature that is compensable in monetary terms, including by fines alone.

In this article, we endeavour to determine what led the Hon’ble Bombay High Court to reach the decision in the Ranipa and explore if economic punishments in form of fines would be adequate for infringement of copyright and trademarks.

In Ranipa, a plea for anticipatory bail was brought before the Bombay High Court seeking pre-arrest protection in a case where the complainant alleged that Piyush Ranipa was manufacturing fake and substandard goods under the brand name of the Complainant company and causing transportation and the sale of the counterfeited products.

While addressing the plea for anticipatory bail, a question of law – the subject matter of this article –came up for consideration in connection with categorisation of punishments prescribed under the Sections in light of Part II of Schedule I of the Code of Criminal Procedure, 1974 (“CrPC”). This chapter categorises offences under special laws, i.e., laws other than the IPC, inter alia, in the following categories:

• If punishable with imprisonment for less than 3 years or with fine only, it is non-cognizable and bailable.
• If punishable with imprisonment for 3 years and upwards but not more than 7 years, it is a cognizable and non-bailable offence.

Offences under the Sections are punishable “with imprisonment for a term which shall not be less than six months but which may extend to three years” and hence, the Bombay High Court, in Ranipa, was asked to evaluate categorisation of the same as non-bailable (offences punishable with imprisonment for 3 years and upwards) or bailable (offences punishable with imprisonment for less than 3 years).

A bare reading of Schedule I of the CrPC stipulates that if an offence is punishable by an imprisonment of 3 (three) years, it is a non-bailable offence. While determining the offence under Sections as non-bailable, the Bombay High Court placed reliance on Ramrao Marotrao Budruk Vs. The State of Maharashtra4 (“Budruk”) and State of Maharashtra Vs. Shri. Suresh Ganpatrao Kenjale5 (“Kenjale”), both dealing with classification of offences under specific laws with similar punishment as that of the Sections.

In Budruk6, while interpreting the provisions under the Prevention of Insults to National Honour Act, 1971, the Bombay High Court observed that if the court has the authority to sentence the accused up to the maximum sentence of three years, then the offence is deemed to be non-bailable, since, potentially, the sentence can be of 3 years. Further, the Bombay High Court clarified that the circumstances where an accused may be sentenced lesser than three years of imprisonment would not have an impact on the classification of the offence under the CrPC. In Kenjale7, the Bombay High Court expressed a similar view that while construing the categorisation of an offence, the maximum sentence accorded under law should be the deciding factor and not the minimum threshold of the sentence.

The Bombay High Court did not, however, consider judgments of various other High Courts which particularly dealt with the Sections, even though various courts of the Country have faced similar legal conundrum.

The Guwahati High Court, while examining offences punishable under Section 63 of the Copyright Act in Jitendra Prasad v. State of Assam10 held that offences under Section 63 of the Copyright Act were non-bailable. The Guwahati High Court highlighted offences “punishable with imprisonment for term which may extend to three years” cannot be interpreted in the same way as offences which are “punishable with imprisonment for less than three years”. The intent behind it being that while categorisaton of the former may be a moot issue, the later can be determined as a bailable offence. The Kerala High Court in Abdul Sathar v. Nodal Officer, Anti-Piracy Cell, Crime Branch office11 had a similar view.

A diametrically opposite view was adopted by the Andhra Pradesh High Court in Amarnath Vyas v. State of A.P. (“Amarnath Vyas”) wherein it observed that the offences punishable for “three years and upwards” don’t fall in the same category as offences punishable with a term which “may extend to three years”. Accordingly, the Andhra Pradesh High Court held that the offences under Section 63 of the Copyright Act are bailable offences.

Similarly, the Rajasthan High Court in Deshraj v State of Rajasthan8 held that offences under Section 63 of the Copyright Act are bailable. The Rajasthan High Court placed their reliance on the judgements passed by the Hon’ble Supreme Court in Rajeev Chaudhary vs State (N.C.T.) Of Delhi9 (“Rajeev Chaudhary”), and Amarnath Vyas, while deciding that the offence is non-cognizable and bailable. The Hon’ble Supreme Court discussed the difference between the expressions “not less than 10 years” and “may extend to 10 years” in Rajeev Chaudhary Case, thereby establishing the importance of the terminology used in the legislation.

The Supreme Court, also, in Avinash Bhosale v. Union of India14 (“Avinash Bhonsale”) held that offences under Section 135 (1) (ii) of the Customs Act, 196215 are bailable offences even though the term of imprisonment for the offence could “extend to three years”. Absence of a detailed rationale for the judgment of the Supreme Court in Avinash Bhosale is possibly the reason that Courts holding the offence to be non-bailable, have been able to withstand reliance on the said decision.

While discussing the gravity of offence under Section 63 of the Copyright Act, it is interesting to note that the originally enacted section provided for imprisonment for one year. In 1984, however, the section was amended to increase the maximum imprisonment to 3 (three) years, thus making unavailable the argument, that such an offence is minor, technical or procedural only. As a matter of policy, while ease of doing business is important, however, it is equally necessary to for the law to provide effective remedy in respect of infringement of copyright/trademark. The argument in favour of providing for criminal penalty is the lack of effective basis for determination of economic loss to the owner for violation of the intellectual property right. Thus, for example, the absence of a provision for statutory damages under the relevant statutes, could be a further reason to resist decriminalization of infringement.

Another reason to not decriminalise offences related to Copyright infringement is that as a member of the World Trade Organisation and signatory of the TRIPS Agreement, India is required to provide for criminal procedures and penalties for wilful copyright violation. Accordingly, decriminalisation of copyright violation would not only hamper India’s reputation for noncompliance with an international treaty but also enable organised criminal activities with deep pockets.

Supporters of decriminalisation of intellectual property related offences could be alarmed by the decision in Ranipa as it provides ammunition to the owners with the intent to misuse the law only to brow beat willing licensees to pay exorbitant license fees. The categorisation of the offences under the Section as non-bailable and cognisable takes away the right from the accused of receiving a bail and gives discretionary powers to the court and acts as an unnecessary threat to genuine licensees who are not intentionally engaging in infringing activity, but only seeking to negotiate a reasonable fee.

With rapid proliferation of the technology and increasing globalisation having criminal sanctions in place for violation of intellectual property rights like most major economies in the world may incentivise the creative industries and enable innovation and creativity. The judgement of Bombay High Court provides a relief to intellectual property owners; however, the judgements of the Rajasthan High Court and the Andhra Pradesh High Court do throw up equally effective arguments to negate such a determination. Perhaps it is time for the Supreme Court to step in and pronounce on this vexed question with finality.