Himachal Pradesh High Court
) Boehringer Ingelheim vs Tvs Motor Company on 11 March, 2022
Author: Ajay Mohan Goel
Bench: Ajay Mohan Goel
IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
ON THE 11th DAY OF MARCH, 2022
.
BEFORE
HON'BLE MR. JUSTICE AJAY MOHAN GOEL
OMPS NO. 532, 565 AND 692 OF 2021 IN COMS No. 5 of 2021
Between:-
1) BOEHRINGER INGELHEIM
INTERNATIONAL GMBH 55216,
INGELHEIM AM RHEIN GERMANY
THROUGH ITS POWER OF ATTORNEY
HOLDER
2. BOEHRINDER INGELHEIM
(INDIA) PVT. LTD. UNIT NO. 202 AND
PART OF UNIT NO. 201, SECOND
FLOOR, GODREJ 2, PRIOJSHA
NAGAR, EASTERN EXPRESS
HIGHWAY, VIKHROLI (E), MUMBAI-
400079, INDIA THROUGH ITS POWER
OF ATTORTNEY HOLDER
..........PLAINTIFFS
(BY M/S ASHOK AGGARWAL AND VINAY
KUTHIALA, SENIOR ADVOCATES WITH M/S
ATUL JHINGAN, SHILPA SOOD, SANJAY
KUMAR, PRIYANSH SHARMA AND HARSHIT
DIXIT, ADVOCATES)
AND
DR. REDDY'S LABORATORIES
LIMITED KHOL, NALAGARH, SOLAN
DISTRICT, NALAGARH ROAD, BADDI,
HIMACHAL PRADESH.
ALSO AT
DR. REDDY'S LABORATORIES
LIMITED, VILLAGE MAUJA THANA,
NALAGARH, BADDI ROAD, BADDI,
SOLAN DISTRICT, HIMACHAL
PRADESH 173205.
::: Downloaded on - 11/03/2022 20:16:30 :::CIS
2
ALSO AT
DR. REDDY'S LABORATORIES
LIMITED, 8K-3-337, ROAD NO. 3
BANJARA HILLS HYDERABAD,
.
TELANGANA 500034.
........DEFENDANT
(BY MR. BIPIN CHANDER NEGI, SENIOR
ADVOCATE WITH M/S JAI SAI DEEPAK,
GURUSWAMY NATRAJAN, SHRADHA KAROL,
ANKUR VYAS & UDIT KAUSHIK, ADVOCATES
FOR THE DEFENDANT)
_________________________________________________________________
RESERVED ON: 07.01.2022
Whether approved for reporting: Yes
These applications coming on for pronouncement of
order this day, Hon'ble Mr. Ajay Mohan Goel, passed the
following:-
ORDER
OMPS No. 532 AND 565 OF 2021 This order shall dispose of OMP No. 532 of 2021, which has been filed by the plaintiffs/applicants under Order XXXIX, Rules 1 and 2 of the Code of Civil Procedure praying for interim directions as also OMP No. 565 of 2021, which has been filed under Order XXXIX, Rule 4, read with Section 151 of the Code of Civil Procedure, praying for vacation of ad-interim injunction, dated 20.10.2021.
2. Brief facts necessary for the adjudication of these applications are as under:-
::: Downloaded on - 11/03/2022 20:16:30 :::CIS 3Applicants/plaintiffs in OMP No. 532 of 2021 (hereinafter to be referred as 'the plaintiffs' for convenience sake) .
have filed a suit for permanent prohibitory injunction for restraining the defendants from infringing the patent owned by plaintiff No. 1 alongwith other ensuing reliefs. The case of the plaintiffs is that plaintiff No. 1 is a company incorporated under the laws of Germany and plaintiff No. 2 is a company registered under the Companies Act. Plaintiff No. 1 is the owner of plethora of patents worldwide, including Indian Patent No. 268846 (hereinafter to be referred as 'subject patent or IN 846' for short).
The subject patent was granted in favour of plaintiff No. 1 on 18.09.2015 as per Section 43 of the Indian Patents Act 1970, under 'IN 846' for pharmaceuticals product titled "GLUCOPYRANOSYL-SUBSTITUTED BENZENOL DERIVATIVES, DRUGS CONTAINING SAID COMPOUNDS, THE USE THEREOF AND METHOD FOR THE PRODUCTION THEREOF" for a term of 20 years from the date of filing.
3. When OMP No. 532 was listed on 20.10.2021, the following order was passed:-
"Notice in above terms. Till the next date of hearing, the respondent is restrained either itself or through its directors, licensees, stockiest and distributors, retailers, agents, servants and/or anyone claiming through any of it, ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 4 jointly and severally, from infringing the patent rights of plaintiff/applicant No. 1 under Indian Patent No. 268846 by launching, making, using, offering for sale, selling, .
importing and/or exporting the medicinal product Empagliflozin in any form whatsoever, including Empagliflozin API, the medicinal product "Empagliflozin Tablet" and/or "Empagliflozin + Metformin Hydrochloride Tablets" or any "generic version" thereof or any product sold under the trademark/name "VICRA" or any other trademark/name whatsoever, or any other product covered by the subject patents granted by the Controller of Patents in favour of plaintiff/applicant No. 1. Respondent is further directed to remove the impugned product from its website or any other website(s)/e-portal(s).
This order is subject to compliance of provisions of Order 39, Rule 3 of the Code of Civil Procedure."
4. In the order sheet, the OMP number is mentioned as OMP No. 535 of 2021, which appears to be a typographical error as the OMP in issue is OMP No. 532 of 2021.
5. The arguments on behalf of the plaintiffs were advanced by Mr. Ashok Aggarwal, learned Senior Counsel and Mr. Vinay Kuthiala, learned Senior Counsel. Arguments on behalf of the defendants were advanced by Mr. Bipin Chander Negi, learned Senior Counsel and Mr. Jai Sai Deepak, learned Counsel.
::: Downloaded on - 11/03/2022 20:16:30 :::CIS 56. Learned Senior Counsel appearing for the plaintiffs argued that for the purpose of grant of interim relief, three primary .
ingredients, i.e. prima facie case, balance of convenience and irreparable loss are all in favour of the plaintiffs. In addition, they argued that as the defendant has not been able to lay any credible challenge to the 'subject patent', therefore, this application be disposed of by confirming ad-interim order dated 20.10.2021.
7. On the other hand, learned Counsel for the defendant have submitted that as the defendant has laid a credible challenge to the 'subject patent' therefore, its prayer for vacation of ad-
interim injunction granted on 20.10.2021 be allowed and the application filed under Order XXXIX, Rules 1 and 2 of the Code of Civil Procedure be dismissed and the application filed under Order XXXIX, Rule 4 of the Code of Civil Procedure be allowed.
8. To substantiate their contention that all ingredients exist in favour of the plaintiffs for the continuation of interim order, learned Senior Counsel have argued that in the present case, the 'subject patent' was granted to the plaintiffs on 18.09.2015, the international date of filing of the 'subject patent' being 11th March, 2005, the date of expiry of the patent is 11th March, 2025. According to the plaintiffs, the following points demonstrate that there exists a good case in their favour for confirmation of the interim order:
::: Downloaded on - 11/03/2022 20:16:30 :::CIS 6(a) 'subject patent' is old and well established;
(b) 'subject patent' is commercially highly successful .
and extensively useful;
(c) admittedly, no party, including the defendant, raised any pre-grant opposition, post-grant opposition, including against the quality and strength of the 'subject patent';
(d) the patent was granted in favour of the plaintiffs after following the substantive provisions of the The Patents Act, 1970;
(e) the patent has had a successful commercial run in India for more than six years, without any challenge, including that from the defendant;
(f) the Central Government has not filed any revocation for the 'subject patent' in terms of Section 64 of the Patents Act, 1970;
(g) the Central Government has not made any declaration for revocation of the 'subject patent' in public interest in terms of Section 67 of the Patents Act;
(h) none, including the defendant, applied under Section 84 of the Patents Act for grant of compulsory licence ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 7 of the 'subject patent' on the grounds as mentioned therein;
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(i) no challenge was ever put forth by the defendants to the 'subject patent' except immediately before the commercial launch of its infringing product in the month of October 2021, when a revocation petition was filed by the defendants under Section 64 of the Patents Act.
9. Learned Senior Counsel appearing for the plaintiffs argued that that above facts clearly and categorically demonstrate that there exists a prima facie case in favour of the plaintiffs and balance of convenience is also in their favour and in this backdrop, in case, ad-interim order is not confirmed and the defendant is permitted to infringe the 'subject patent' of the plaintiffs, then, the plaintiffs shall suffer irreparable loss, which cannot be compensated monetarily as all the hard work that has gone into the invention of the product in issue and getting it patented would be washed away. Learned Senior Counsel stressed that admittedly the defendant neither has any patent in its name nor did it lay any challenge at the time when the plaintiffs had applied for the 'subject patent' or even after the patent was granted in favour of the plaintiffs. They further submitted that the filing of revocation petition by the defendant, in close proximity with the launch of the ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 8 infringing product was nothing but an afterthought to hold out that in lieu of its having filed a revocation petition, it has laid a .
credible challenge to the 'subject patent'.
10. Opposing the prayer of the plaintiffs, learned Counsel for the defendant submitted that in the present case, the defendants have filed a revocation petition against the 'subject patent', as would be evident from the averments also made in the application filed by it under Order XXXIX, Rule 4 of the Code of Civil Procedure, perusal whereof would demonstrate that there is a credible challenge which has been laid by it to the 'subject patent'.
Learned Counsel have submitted that it is settled law that mere grant of patent does not lend a presumption of validity to the patent. The scheme of the Patents Act is to provide multi-layer challenges, which are available to a non-patentee to challenge and question the validity of a patent at any time and such validity has to be tested on the anvil of the provisions of the The Patents Act, 1970. It was argued that the provisions of Section 13(4) of the The Patents Act expressly set out the absence of any presumption of validity due to mere grant and further, as there has been non-
compliance of the statutory provisions of Sections 8 and 64 of the Patents Act, therefore, the patent in issue is not a valid patent and the defendant has laid a credible challenge to the same. They have also argued that in the case of pharmaceutical patents, which have ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 9 been recognized as a specific species of patent infringement litigation, the overwhelming factor is that of public interest-namely .
the need to provide for affordable and accessible healthcare products. They also argued that in addition to the settled principles of prima facie case, balance of convenience and irreparable loss, the plaintiffs also have to satisfy that there is no credible challenge to the 'subject patent' which in the present case, the plaintiffs have not been able to demonstrate and in this view of the matter, the ad-interim injunction granted in favour of the plaintiffs is liable to be vacated and the prayer of the plaintiffs for interim injunction is liable to be dismissed.
11. I have heard learned Counsel for the parties and have also gone through the relevant pleadings and documents appended therewith.
12. Following orders passed by various High Courts disposing of applications filed under Order 39, Rules 1 and 2 of the Code of Civil Procedure as well as appeals thereof, were relied upon by the learned Counsel for the parties:-
(1) Bajaj Auto Limited vs. TVS Motor Company Limited, 2008 SCC Online Madras 121;
(2) Cipla Limited vs. Novartis AG and another, 2017 SCC Online Delhi 7393;::: Downloaded on - 11/03/2022 20:16:30 :::CIS 10
(3) M/s National Research Development Corporation of India, New Delhi vs. M/s The Delhi .
Cloth and General Mills Co. Ltd and others, AIR 1980 Delhi 132;
(4) Bristol Myers Squibb Company & Ors vs. Mr. J.D. Joshi and another, 2015 SCC Online Delhi 10109;
(5) Communication Components Antenna Inc. vs. ACE Technologies Corporation and others, 2019 SCC Online Delohi 9123;
(6) Merck Sharp and Dohme Corporation and Another vs. Glenmark Pharmaceuticals, 2015 SCC Online Delhi 8227;
(7) FMC Corporation & Another vs. Best Crop Science LLP & Another, 2021 SCC Online Delhi 3646;
Natco Pharma Ltd. vs. Bristol Myers Squibb Holdings Ireland Unlimited Company and others, 2019 SCC Online Delhi 9124;
Ten XC Wireless Inc and Others vs. Mobi Antenna Technologies (Shenzhen) Co. Ltd., 2011 SCC Online Delhi 4648;
::: Downloaded on - 11/03/2022 20:16:30 :::CIS 11Astrazeneca AB and Others vs. Intas Pharmaceuticals Ltd. and Others, 2021 SCC .
Online Delhi 3746;
13. The pronouncements made by High Courts mentioned hereinabove in the orders passed by them either on the applications filed by the parties concerned under Order XXXIX, Rules 1 and 2 of the Code of Civil Procedure or in the appeals, which were referred to by the parties against the orders passed by learned Single Judge in the applications filed under Order XXXIX, Rules 1 and 2 are not being quoted to by me in extensio for the reason that the orders which were so passed by the Courts were in the backdrop of the factual matrix involved in the cases before them. Suffice it to say that the principles in general being followed for the grant of interim injunction in patent matters by various Courts, as they stand summarized in Ten XC Wireless Inc (supra), are as under:-
(i) The registration of a patent per se does not entitle the plaintiffs to an injunction. The certificate does not establish a conclusive right.
(ii) There is no presumption of validity of a patent, which is evident from the reading of Section 13(4) as well as Sections 64 and 107 of the Patents Act.
(iii) The claimed invention has to be tested and tried in the laboratory of Courts.::: Downloaded on - 11/03/2022 20:16:30 :::CIS 12
(iv) The Courts lean against monopolies. The purpose of the legal regime in the area is to ensure that the inventions should benefit the public at large.
.
(v) The plaintiff is not entitled to an injunction if the defendant raises a credible challenge to the patent.
Credible challenge means a serious question to be tried. The defendant need not make out a case of actual invalidity. Vulnerability is the issue at the preliminary injunction stage whereas the validity is the issue at trial. The showing of a substantial question as to invalidity thus requires less proof than the clear and convincing showing necessary to establish invalidity itself.
(vi) At this stage, the Court is not expected to examine the challenge in detail and arrive at a definite finding on the question of validity of the patent. That will have to await at the time of trial. However, the Court has to be satisfied that a substantial, tenable and credible challenge has been made.
(vii) The plaintiff is not entitled to an injunction, if the patent is recent, its validity has not been established and there is a serious controversy about the validity of the patent.
14. In addition, the parties also relied upon following judgments passed by Hon'ble Supreme Court of India:-
(1) M/s Bishwanath Prasad Radhey Shyam vs. Hindustan Metal Industries, (1979) 2 Supreme Court Cases 511;
(2) Dalpat Kumar and another vs. Prahlad Singh and others, (1992) 1 Supreme Court Cases 719;
15. In M/s Bishwanath Prasad Radhey Shyam vs. Hindustan Metal Industries, (1979) 2 Supreme Court Cases 511, ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 13 Hon'ble Supreme Court has been pleased to hold that grant and sealing of the patent, or the decision rendered by the Controller in .
the case of opposition, does not guarantee the validity of the patent, which can be challenged before the High Court on various grounds in revocation or infringement proceedings. Hon'ble Supreme Court further held that the 'validity of a patent is not guaranteed by the grant', was also expressly provided in Section 13(4) of the Patents Act, 1970.
16. Hon'ble Supreme Court of India in Dalpat Kumar and Another vs. Prahlad Singh and Others, (1992) 1 Supreme Court Cases 719 has held that it is settled law that the grant of injunction is a discretionary relief and exercise thereof is subject to the Court satisfying that (1) there is a serious disputed questions to be tried in the suit and that an act, on the facts before the Court, there is probability of his being entitled to the relief asked for by the plaintiff/defendant; (2) the Court's interference is necessary to protect the party from the species of injury. In other words, irreparable injury or damage would ensue before the legal right would be established at trial' and (3) that the comparative hardship or mischief or inconvenience which is likely to occur from withholding the injunction will be greater than that would be likely to arise from granting it. In para-5 of the judgment, Hon'ble Apex Court has been further pleased to hold as under:-
::: Downloaded on - 11/03/2022 20:16:30 :::CIS 14"5. Therefore, the burden is on the plaintiff by evidence aliunde by affidavit or otherwise that .
there is "a prima facie case" in his favour which needs adjudication at the trial. The existence of the prima facie right and infraction of the enjoyment of his property or the right is a condition for the grant of temporary injunction. Prima facie case is not to be confused with prima facie title which has to be established, on evidence at the trial. Only prima facie case is a substantial question raised, bona fide, which needs investigation and a decision on merits. Satisfaction that there is a prima facie case by itself is not sufficient to grant injunction. The Court further has to satisfy that non-interference by the Court would result in "irreparable injury" to the party seeking relief and that there is no other remedy available to the party except one to grant injunction and he needs protection from the consequences of apprehended injury or dispossession. Irreparable injury, however, does not mean that there must be no physical possibility of repairing the injury, but means only that the injury must be a material one, namely one that ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 15 cannot be adequately compensated by way of damages. The third condition also is that "the .
balance of convenience" must be in favour of granting injunction. The Court while granting or refusing to grant injunction should exercise sound judicial discretion to find the amount of substantial mischief or injury which is likely to be caused to the parties, if the injunction is refused and compare it with that it is likely to be caused to the other side if the injunction is granted. If on weighing competing possibilities or probabilities of likelihood of injury and if the Court considers that pending the suit, the subject-matter should be maintained in status quo, an injunction would be issued. Thus the Court has to exercise its sound judicial discretion in granting or refusing the relief of ad interim injunction pending the suit."
17. Coming back to the facts of the present case, the plaintiffs in this case filed an international patent application for the subject patent on 11.03.2005 and national phase patent application in India on 23rd August, 2006. The patent was granted in favour of the plaintiffs in India on 18th of September, 2015 under the Patents Act, 1970, which was published under Section ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 16 43(2) of the Patents Act on 25th September, 2015. The term of the patent is 20 years and the same is to expire on 11.03.2025.
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18. On the other hand, admittedly, the defendant does not has any patent qua the infringing product and no challenge, either to the application filed by the plaintiffs for grant of patent was laid by the defendant nor any post patent challenge was laid by it. Of course, in light of law laid down by Hon'ble Supreme Court in M/s Bishwanath Prasad Radhey Shyam (supra), grant of patent does not guarantee the validity of a patent, which can be challenged before the High Court on various grounds in revocation or infringement proceedings, but the factum of a patent being there in favour of the plaintiffs and the factum of no pre or post grant challenge to the same by anyone, including the defendant, except now by way of a revocation petition which was filed in close proximity to the launch of the infringing product, does creates a prima facie case and balance of convenience in favour of the plaintiffs. The Court is observing so for the reason that as per the plaintiffs, since the patent was granted on 18th September, 2015, the same has had a successful commercial run till date which continues and there is no serious dispute qua the same. The patent is an old patent and it has not been granted recently to the plaintiffs. Therefore, these facts do create prima facie case and balance of convenience in favour of the plaintiffs vis-a-vis the ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 17 defendant, who admittedly does not has any patent qua the infringing product.
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19. In the light of what has been discussed hereinabove, if an infringer is not restrained from infringing the patent of patent holder, then, but of course, the patent holder will suffer from irreparable loss and it cannot be said that the infringer stands on the same pedestal on which the patent holder is. Of course, the patent of the plaintiffs is vulnerable. It is open to challenge and now it has also been challenged by the defendant by way of a revocation petition. But mere filing of revocation proceedings cannot be treated to be a "credible challenge" to the old and successful patent of the plaintiffs. As far as the element of public interest is concerned, it may be observed that in the present case, the Central Government has not invoked the provisions of Section 66 of the Patents Act and after following the procedure referred to therein, made a declaration in the Official Gazette to the effect that the patent of the plaintiffs stand revoked in public interest. Not only this, the defendant has not approached the competent authority under Section 84 of the Patents Act after the expiry of three years from the grant of the patent for grant of compulsory licence of patent on the conditions enumerated therein.
20. At this stage, it is relevant to refer to Section 48 of the Patents Act as it stood prior to the amendment and also post ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 18 amendment, which amendment was carried out in the said section w.e.f. 20.05.2003.
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21. Section 48 of the Patents Act, which deals with rights of the patentees, before amendment provided as under:
Section 48. Rights of patentees (1) Subject to the other provisions contained in this Act, a patent granted before the commencement of this Act, shall confer on the patentee the exclusive right by himself, his agents or licensees to make, use, exercise, sell or distribute the invention in India. r
2) Subject to the other provisions contained in this Act and the conditions specified in Section 47, a patent granted after the commencement this Act shall confer upon the patentee---
(a) where the patent is for an article or substance, the exclusive right by himself, his agents or licensees to make, use, exercise, sell or distribute such article or substance in India;
(b) where a patent is for a method or process of manufacturing an article or substance, the exclusive right by himself, his agents or licensees to use or exercise the method or process in India."
22. After amendment, said Section now reads as under:-
Section 48: Rights of patentees.
Subject to the other provisions contained in this Act and the conditions specified in Section 47, a patent granted under this Act shall confer upon the patentee--
(a) where the subject-matter of the patent is a product, the exclusive right to prevent third parties, who do not have his consent, from the act ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 19 of making, using, offering for sale, selling or importing for those purposes that product in India;
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(b) where the subject-matter of the patent is a process, the exclusive right to prevent third parties, who do not have his consent, from the act of using that process, and from the act of using, offering for sale, selling or importing for those purposes the product obtained directly by that process in India:
23. It is evident that though subject to other provisions contained in the Patents Act, including Section 47 thereof, a patent granted under the Patents Act does confers upon the patentee, where the subject matter of the patent is a product, the exclusive right to prevent a third party, who do not have his consent, from the act of making, using, offering for sale etc. of that product in India. Thus, a statutory right, which has been conferred upon the patentee, clothes the patentee with an umbrella of safety qua the infringement of its patent by a third party.
24. In just a few lines if this Court may add, the premise of the defendant that there is "credible challenge" to the subject patent of the plaintiffs is that the subject matter of the subject patent 'IN 846' granted to the plaintiffs was covered by the claim of another Indian Patent i.e. Patent Number 'IN 205147' and further that the priority dates claimed in 'IN147' were 12.10.1999 and 05.04.2000, which ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 20 patent was granted on 15.03.2007 and has thus expired on 02.12.2020 and the patent of the plaintiffs is nothing but .
evergreening of the earlier patent. Suffice to say that the holder of the patent, evergreening of whose patent is alleged by the defendant to have been done by the plaintiffs, never filed any objections, either pre-grant or post-grant, against the application for grant of patent by the plaintiffs and further there is no allegation made by the defendant, as of now, that there was some collusion between the party, which was granted patent 'IN147' and the plaintiffs, who was granted patent 'IN846'. Therefore, on this count, it cannot be said that at this stage, the defendant has rendered the patent of the plaintiffs to be vulnerable so as to lay a credible challenge to it for the purpose of declining interim protection. These observations have been made by this Court only to demonstrate its prima facie satisfaction on the point urged and this Court is refraining itself from making any further observation on merit in view of observations made by Hon'ble Supreme Court of India in Special Leave to Appeal C No. 18892/2017, titled as Az Tech (India) & Anr. Vs. Intex Technologies (India) Ltd. & Anr., on 16.08.2017, in which Hon'ble Apex Court has been pleased to observe as under:-
::: Downloaded on - 11/03/2022 20:16:30 :::CIS 21"3. In the present Special Leave Petition (No.18892 of 2017) on 31st July, 2017, this Court passed the following order: Having read .
the order of the High Court of Delhi dated 10th March, 2017 passed in FAO(OS) No.1/2017 we find that it is virtually a decision on merits of the suit. We wonder if the High Court has thought it proper to write such an exhaustive judgment only because of acceptance of the fact that the interim orders in Intellectual Property Rights (IPR) matters in the Delhi High Court would govern the parties for a long duration of time and disposal of the main suit is a far cry.
This is a disturbing trend which we need to address in the first instance before delving into the respective rights of the parties raised in the present case. We, therefore, direct the Registrar General of the Delhi High Court to report to the Court about the total number of pending IPR suits, divided into different categories, in the Delhi High Court; stage of each suit; and also the period for which injunction/interim orders held/holding the field in each of the such suits.
The Registrar General of the Delhi High Court will also indicate to the Court what, according to the High Court, would be a reasonable way of ensuring the speedy disposal of the suits involving intellectual property rights which are presently pending.
::: Downloaded on - 11/03/2022 20:16:30 :::CIS 22We will expect the Registrar General of the Delhi High Court to report to the Court within two weeks from today, latest by 14th August, 2017."
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25. Accordingly, in light of the observations made hereinabove, the ad-interim protection granted to the plaintiffs, vide order dated 20.10.2021, is made absolute during the pendency of the civil suit, of course, subject to any further order(s) which may be passed by this Court and the application filed under Order 39 Rule 4 of the Code of Civil Procedure praying for vacation of ad-interim injunction is dismissed. No order as to costs. Both the applications stand disposed of in above terms.
OMP No. 692 of 202126. This order shall dispose of an application filed under Order VIII, Rule 1 read with Section 151 of the Civil Procedure Code, vide which the applicants/plaintiffs have prayed for the following reliefs:-
"a) Close the right of the Respondent to file its Written Statement and pronounce judgment against the Respondent;
b) Strike out the defence of the Respondent."
27. The case of the applicants is that they have filed a suit for infringement, i.e. Commercial Suit No.5 of 2021, against respondent/defendant, praying for restraining the respondent ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 23 from infringing the patent rights of the applicants under the Indian Patent No.268846 by launching, advertising etc. their .
medicinal products details whereof are mentioned in the application. It is further averred in the application that when the matter came up for hearing before this Court on 20.10.2021, an ad-interim order was passed in favour of the applicants. As per the applicants, respondent received a copy of order dated 20.10.2021 via e-mail and the entire set of pleadings via post which were forwarded in compliance of order XXXIX, Rule 3 of the Civil Procedure Code on 25.10.2021. Thereafter, on 29.10.2021, respondent filed an application under Order XXXIX, Rule 4 of the Civil Procedure Code, praying for vacation of ad-interim injunction granted on 20.10.2021. According to the applicants, till the date of filing of the present application, the respondent had not filed its written statement, though the statutory period of 30 days provided under Order VIII, Rule 1 of the Civil Procedure Code as amended by Section 16 read with Schedule 1 of the Commercial Courts Act, 2015 to file the same expired on 24.11.2021. The contention of the applicants is that as respondent failed to adhere to the statutory and mandatory time line of 30 days to file the written statement and thereafter its not taking any step to extend such time line, shows complete disregard to the due process of law on its behalf, accordingly a vested right has accrued upon the applicants ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 24 praying for pronouncement of judgment in their favour. It is further the case of the applicants that in terms of the amendment .
of the Civil Procedure Code by this Court, Rule 11 has been added to Order VIII, perusal of which demonstrates that it is mandatory to comply with said Rule and failure to comply thereto results in striking off the defence of the respondent. Accordingly, a prayer has been made for striking off the defence of the respondent. It is also the contention of the applicants that the respondent/defendant in the absence of having filed the written statement cannot take the assistance of the averments which have been made in the application filed by them under Order XXXIX, Rule 4 of the Civil Procedure Code and no cognizance of the contents thereof can be taken by this Court. It is in this background that the application has been filed, praying for the reliefs already enumerated hereinabove.
28. In reply to the application, the defendant has taken the stand that the filing of application is frivolous and a dilatory tactic on the part of the applicants to evade the arguments in the application filed under Order XXXIX, Rule 4 of the Civil Procedure Code by the defendant. The contention of the defendant is that the provisions of Order XXXIX, Rule 4 of the Civil Procedure Code, as they stand after coming into force of the Commercial Disputes Act, 2015, nowhere provide that the application can be filed only ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 25 subject to the filing of the written statement in terms of Order VIII, Rule 1 of the Civil Procedure Code. As per the defendant, the .
Civil Procedure Code expressly provides for an application under Order XXXIX, Rule 4 of the Civil Procedure Code to be preferred by an aggrieved defendant so that such a party can quickly knock the doors of the Court which has issued ex parte ad-interim order. It is further the stand of the defendant that even otherwise the statutory period which is envisaged in Order VIII, Rule 1 of the Civil Procedure Code as it stands in relation to the Commercial Disputes also, had not elapsed as on the date of filing of the application or on the date of filing of the reply, therefore, the prayer of the applicants to struck of the defence of the defendant was premature and the application was liable to be dismissed.
29. I have heard learned Senior Counsel appearing for the parties and also gone through the averments as they stand contained in the application as well as reply.
30. Chapter-5 of the Commercial Disputes Act, 2015 deals with the amendments to the provisions of the Code of Civil Procedure, 1908. Section 16 of the Commercial Disputes Act, 2015 provides as under:-
"16) Learned counsel for the respondents then strongly relied upon the inherent powers of the Court to state that, in any case, a procedural provision such ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 26 as contained in the amendment, which may lead to unjust consequences can always, in the facts of a given case, be ignored where such unjust .
consequences follow, as in the facts of the present case. We are again of the view that this argument has also no legs to stand on, given the judgment of this Court in Manohar Lal Chopra vs. Rai Bahadur Rao Raja Seth Hiralal, [1962] Suppl 1 SCR 450. In this judgment, the Court held:
"The suit at Indore which had been instituted later, could be stayed in view of s.10 of the Code. The provisions of that section are clear, definite and mandatory. A Court in which a subsequent suit has been filed is prohibited from proceeding with the trial of that suit in certain specified circumstances.
When there is a special provision in the Code of Civil Procedure for dealing with the contingencies of two such suits being instituted, recourse to the inherent powers under s.151 is not justified..." (at page 470) Clearly, the clear, definite and mandatory provisions of Order V read with Order VIII Rule 1 and 10 cannot be circumvented by recourse to the inherent power under Section 151 to do the opposite of what is stated therein."
31. In terms of the Schedule appended with the Commercial Disputes Act, 2015, in Order VIII, Rule 1 of the Civil Procedure Code, for the proviso already existing, the following proviso has been substituted:-
::: Downloaded on - 11/03/2022 20:16:30 :::CIS 27"Provided that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the written statement on such .
other day, as may be specified by the Court, for reasons to be recorded in writing and on payment of such costs As the Court deems fit, but which shall not be later than one hundred twenty days from the date of service of summons and on expiry of one hundred twenty days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the Court shall not allow the written statement to be taken on record."
32. A perusal of the proviso as it exists in Order VIII, Rule 1 of the Civil Procedure Code and as it exists with regard to the Commercial Disputes Act, 2015, demonstrates that the provisions thereof are almost pari materia except that when it comes to a commercial dispute the extra riders which are now contained in the proviso are to the effect that if the defendant is being allowed to file written statement after 30 days from the date of receipt of summons, then the same has to be on payment of such costs as the Court may deem fit but it shall not be later than 120 days from the date of service of summons and on expiry of 120 days from the date of service of summons the defendant shall forfeit the right to file the written statement and the Court shall not allow the written statement to be taken on record.
::: Downloaded on - 11/03/2022 20:16:30 :::CIS 2833. While interpreting said proviso, Hon'ble Supreme Court of India in SCG Contracts (India) Private Limited Versus K.S. .
Chamankar Infrastructure Private Limited and Others, (2019) 12 Supreme Court Cases 210, has been pleased to hold that several High Court judgments on the amended Order VIII, Rule 1 of the Civil Procedure Code have held that given the consequence of non filing of written statement, the amended provisions of the Civil Procedure Code will have to be held to be mandatory and said view is correct in view of the fact that the consequence of forfeiting a right to file a written statement: "non-extension of any further time and the fact that the Court will not allow the written statement to be taken on record, all points to the fact that the earlier law on Order VIII, Rule 1 of the Civil Procedure Code on filing of written statement under Order VIII, Rule 1 has been set at naught". The relevant paras of the said judgments are quoted hereinbelow:-
"8) The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 came into force on 23.10.2015 bringing in their wake certain amendments to the Code of Civil Procedure. In Order V, Rule 1, sub-rule (1), for the second proviso, the following proviso was substituted:
"Provided further that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the written statement ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 29 on such other days, as may be specified by the Court, for reasons to be recorded in writing and on payment of such costs as the court deems fit, but which shall .
not be later than one hundred twenty days from the date of service of summons and on expiry of one hundred and twenty days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the court shall not allow the written statement to be taken on record." Equally, in Order VIII Rule 1, a new proviso was substituted as follows:
"Provided that where the defendant fails to file the written statement within the said period of thirty days, he shall be allowed to file the written statement on such other day, as may be specified by the court, for reasons to be recorded in writing and on payment of such costs as the Court deems fit, but which shall not be later than one hundred and twenty days from the date of service of summons and on expiry of one hundred and twenty days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the court shall not allow the written statement to be taken on record." This was re- emphasized by re-inserting yet another proviso in Order VIII Rule 10 CPC, which reads as under:-
"Procedure when party fails to present written statement called for by Court.- Where any party from whom a written statement is required under Rule 1 or Rule 9 fails to present the same within the time ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 30 permitted or fixed by the Court, as the case may be, the Court shall pronounce judgment against him, or make such order in relation to the suit as it thinks fit .
and on pronouncement of such judgment a decree shall be drawn up.
Provided further that no Court shall make an order to extend the time provided under Rule 1 of this Order for filing of the written statement." A perusal of these provisions would show that ordinarily a written statement is to be filed within a period of 30 days.
However, grace period of a further 90 days is granted which the Court may employ for reasons to be recorded in writing and payment of such costs as it deems fit to allow such written statement to come on record. What is of great importance is the fact that beyond 120 days from the date of service of summons, the defendant shall forfeit the right to file the written statement and the Court shall not allow the written statement to be taken on record. This is further buttressed by the proviso in Order VIII Rule 10 also adding that the Court has no further power to extend the time beyond this period of 120 days.
9) In Bihar Rajya Bhumi Vikas Bank Samiti (supra), a question was raised as to whether Section 34(5) of the Arbitration and Conciliation Act, 1996, inserted by Amending Act 3 of 2016 is mandatory or directory.
In para 11 of the said judgment, this Court referred to Kailash vs. Nanhku, (2005) 4 SCC 480 referring to ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 31 the text of Order 8 Rule 1 as it stood pre the amendment made by the Commercial Courts Act. It also referred to the Salem Advocate Bar Association .
vs. Union of India, (2005) 6 SCC 344, which, like the Kailash judgment, held that the mere expression "shall" in Order 8 Rule 1 would not make the provision mandatory. This Court then went on to discuss in para 17 State vs. N.S. Gnaneswaran, (2013) 3 SCC 594 in which Section 154(2) of the Code of Criminal Procedure was held to be directory inasmuch as no consequence was provided if the Section was breached. In para 22 by way of contrast to Section 34, Section 29-A of the Arbitration Act was set out. This Court then noted in para 23 as under:
"23. It will be seen from this provision that, unlike Sections 34(5) and (6), if an award is made beyond the stipulated or extended period contained in the section, the consequence of the mandate of the arbitrator being terminated is expressly provided. This provision is in stark contrast to Sections 34(5) and (6) where, as has been stated hereinabove, if the period for deciding the application under Section 34 has elapsed, no consequence is provided. This is one more indicator that the same Amendment Act, when it provided time periods in different situations, did so intending different consequences."
10) Several High Court judgments on the amended Order VIII Rule 1 have now held that given the consequence of non-filing of written statement, the ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 32 amended provisions of the CPC will have to be held to be mandatory. [See Oku Tech Private Limited vs. Sangeet Agarwal & Ors. by a learned Single Judge of .
the Delhi High Court dated 11.08.2016 in CS (OS) No. 3390/2015 as followed by several other judgments including a judgment of the Delhi High Court in Maja Cosmetics vs. Oasis Commercial Pvt. Ltd. 2018 SCC Online Del 6698.
11) We are of the view that the view taken by the Delhi High Court in these judgments is correct in view of the fact that the consequence of forfeiting a right to file the written statement; non-extension of any further time;
and the fact that the Court shall not allow the written statement to be taken on record all points to the fact that the earlier law on Order VIII Rule 1 on the filing of written statement under Order VIII Rule 1 has now been set at naught."
34. Coming to the facts of this case, admittedly neither on the date of filing of application under Order VIII, Rule 1 of the Civil Procedure Code, nor on the dates of hearing of the arguments on the same the statutory period of 120 days provided under the amended proviso had expired. This Court is of the considered view that whereas the defendant has a statutory right of filing written statement in a commercial dispute as within 30 days form the date of receipt of the notice, it further has a right to file a written statement if not filed within 30 days, then within 120 days of the ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 33 receipt of the notice, subject to the conditions mentioned in the proviso. In the event of the defendant preferring a written .
statement beyond 30 days and before 120 days as from the date of receipt of the summons, then it is for the Court to take a call as to whether the written statement has to be permitted to be taken on record or not, by assigning reasons. However, till the period of 120 days is over, the plaintiff cannot call upon the Court to close the right of the defendant from filing the written statement.
35. In a given case, the defendant may file the written statement on the last day and make out a good case justifying the late filing of the same. Therefore, when the statute envisages a specific period, the same cannot be curtailed by the Court on the mere asking of the other side. In case the Court concedes to such request of the plaintiff the same shall cause irreparable loss to the defendant because the Court shall be extinguishing a right of the defendant which stands conferred upon it by the statute. However, in case the defendant in a commercial dispute fails to file a written statement even within 120 days as from the date of service of the summons, then written statement filed subsequently, cannot be ordered, even by the Court, to be taken on record in terms of the provisions of the amended proviso as interpreted by the Hon'ble Supreme Court of India in SCG Contracts' case (supra).
::: Downloaded on - 11/03/2022 20:16:30 :::CIS 34Accordingly, this Court does not concurs with the prayer of the plaintiffs to strike of the defence of the defendant in the .
application filed under Order VIII, Rule 1 of the Civil Procedure Code at the stage of filing of the present application.
36. Now, coming to the contentions which stand raised with regard to the effect of not filing of written statement vis-a-vis the application which has been filed under Order XXXIX, Rule 4 of the Civil Procedure Code, by the defendant for vacation of the ad-
interim order, this Court is of the considered view that when the Civil Procedure Code itself does not expressly provides that an application under Order XXXIX, Rule 4 of the Civil Procedure Code cannot be filed in the absence of a written statement, then such an rider cannot be created by the Court.
37. This Court is of the considered view that a defendant who has suffered an ex parte ad-interim order, can always file an application under Order XXXIX, Rule 4 of the Civil Procedure Code for vacation of the ad-interim order on the grounds available under the said provision and for this it is not necessary for it to file a written statement. The effect of an ad-interim order against the defendant may in a given situation demand an urgent re-look upon the same by the Court concerned on an application of the defendant, for which waiting for a written statement also to be ::: Downloaded on - 11/03/2022 20:16:30 :::CIS 35 filed, may lead to great injustice as far as the defendant is concerned in the given facts of the case.
.
38. Therefore, this Court does not concurs with the submissions which have been made on behalf of the applicants that the averments made in the application filed under Order XXXIX, Rule 4 of the Civil Procedure Code or the documents appended therewith cannot be gone into by this Court for the of any r written to purpose of adjudication of the issue of ad-interim relief in the absence statement being filed by the respondent/defendant.
Accordingly, in view of the findings returned hereinabove, this application being devoid of any merit is dismissed.
(Ajay Mohan Goel) Judge March 11, 2022 (narender) ::: Downloaded on - 11/03/2022 20:16:30 :::CIS