This article describes the reconciliation between copyright law and library services. On the face of it, libraries and copyright protection seem to be located at cross-purposes. One seeks to freely disseminate literature, and the other seeks to preserve the exclusivity of the same. However, looking deeper, one can find a basis for reconciliation of the two in that copyright law is aimed at preventing the unfair use of and unlawful gain from another's literature or other creative work, while libraries aim at distributing knowledge from this literature and other creative works. The copyright act makes a sound balancing of the competing interest of the author on the one side and user on the other hand by recognizing library use as a privileged user right while upholding the moral and economic rights of the author. An attempt is made in this paper to examine the nature, extent and scope of this privileged use especially with a comparative analysis of the similar provisions in various national legislations. It’s really interesting that inspite of a series of technological developments and changed perceptions of public interest the legal provision stands as it is without any amendments for the last five decades. So it is right time to look into the efficacy of this legal provision in the context of changed public interest and technological challenges. Suggesting a viable mechanism keeping into account of the fragile social and economic needs of the country is the final aim of this analysis.