Contractual clauses cannot override statutory rights: Delhi HC raps ShareChat in Zee case

In a judgment hailed as a major milestone for digital copyright enforcement, the Delhi High Court has upheld its jurisdiction to hear Zee Entertainment Enterprises Ltd’s (ZEEL) lawsuit against Mohalla Tech, the parent company of ShareChat and Moj. The Court dismissed Mohalla Tech’s plea seeking return of the plaint on the ground that only Mumbai courts had jurisdiction due to earlier contracts between the parties.

Justice Mini Pushkarna ruled that the suit—alleging large-scale copyright infringement on the social media platforms—stood independently of the expired licensing agreements and was grounded in statutory rights under the Copyright Act, not contractual disputes. The Court’s decision allows Zee’s suit to proceed in Delhi.

Legal experts say the judgment is “remarkable for copyright law”, especially in the context of digital platforms that operate nationwide. One senior copyright lawyer, speaking on condition of anonymity, said the order “reframes how courts view infringement in the age of short-video platforms” and reinforces that “statutory IP rights cannot be restricted by private contractual clauses once licenses lapse.”

Platforms Accessible in Delhi = Business in Delhi, Court Holds

The Court concluded that ShareChat and Moj “carry on business” in Delhi because their platforms are accessible, interactive, and allow users to upload, remix and share videos using music from in-built libraries. Zee alleged these libraries continued to contain its copyrighted works even after the expiry of all licensing arrangements in mid-2023.

Zee told the Court that it identified more than 9,400 instances of infringement, including 1,395 on ShareChat and 8,036 on Moj. Despite Zee’s notices instructing Mohalla Tech to remove all content after licence expiry, the company claimed the copyrighted music clips continued to be available to users.

A senior technology and media counsel observed that the ruling sends a clear message to content-driven platforms: “If your app is accessible in a city and allows users to manipulate protected works, courts there can hear infringement claims. Intermediary immunity won’t apply where a platform curates or provides copyrighted libraries.”

Mohalla Tech argued that both past agreements— the 2020 Licence Agreement and the 2023 UCRS agreement—specified exclusive jurisdiction of Mumbai courts. The High Court disagreed, stating that the current dispute did not arise from breach of contract but from post-expiry infringement.

Quoting from the judgment, an academic specialising in IP law said anonymously, “The Court is drawing a clear contractual jurisdiction clauses cannot override where copyright infringement takes place. This marks an important reaffirmation of the autonomy of statutory rights.”

A Significant Precedent for Digital Copyright Enforcement

The judgment stands out for embracing a modern, technology-aligned interpretation of territorial jurisdiction. It reaffirms that:

Accessibility plus interactivity of a digital platform is sufficient for jurisdiction.

Copyright infringement does not require proof of targeted commercial transactions.

Platforms offering curated music libraries may be considered active participants in infringement.

IP owners need not chase infringers across multiple states; they can file where infringement is accessible.

A Delhi-based IP litigator noted, “This ruling strengthens the hand of broadcasters, music labels and OTT platforms. Copyright infringement online is fundamentally borderless, and courts are acknowledging that reality.”

The Delhi High Court’s refusal to return the plaint ensures that Zee’s infringement suit will proceed in Delhi. The Court had previously directed Mohalla Tech to ensure that none of Zee’s 134 identified film clips be available in its audio library, though a separate clarification application from Zee regarding cover versions and remixes remains pending.

With this order, the Court has signalled a heightened judicial scrutiny of online platforms that allow music-based user-generated content, potentially setting a precedent for future clashes between copyright owners and short-video apps.