Delhi High Court
Himalya International Ltd vs Himalaya Drugs Company on 7 December, 2017
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 7th December, 2017
+ CS(COMM) 1066/2016
HIMALYA INTERNATIONAL LTD. ..... Plaintiff
Through: Mr. V. Shankara, Adv.
Versus
HIMALAYA DRUGS COMPANY ..... Defendant
Through: Ms. Prachi Agarwal & Ms. Mrinali
Menon, Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. The plaintiff has instituted this suit for recovery of damages in the sum
of Rs.1 crore from the defendant, pleading that the plaintiff has suffered
commercial, business and market loss and damage to its brand name and
reputation on account of defendant's carelessness and negligence in filing
CS(OS) No.1105/2010 of this Court and obtaining an ex parte injunction
order on absolutely misconceived facts and notions and the defendant has
thereby subjected the plaintiff to mala fide and vexatious litigation. It is
further pleaded that owing to the said ex parte injunction obtained by the
defendant in CS(OS) No.1105/2010, the plaintiff lost the market share of its
product '1DAILY' intended to be launched in 2010 and launch whereof was
delayed till 2012.
2. Though the plaint is replete with incomprehensible language and
obvious typographical / grammatical errors but a perusal of the order dated
2nd June, 2010 in CS(OS) No.1105/2010, filed along with the documents,
shows that thereby summons of the said suit filed by the defendant against
the plaintiff were ordered to be issued and vide ex parte injunction the
CS(COMM) No.1066/2016 Page 1 of 9
plaintiff was restrained from using the word 'HIMALYA' in relation to its
product nutraceuticals or other products of whatsoever nature till the next
date of hearing; it was however clarified that the said order will not preclude
the plaintiff herein from legitimate use of the mark 'HIMALYA' in respect
of food and frozen food products for which the plaintiff had been using the
mark 'HIMALYA' till then.
3. This suit was entertained and summons thereof ordered to be issued.
The defendant is contesting the suit by filing a written statement inter alia
pleading i) that CS(OS) No.1105/2010 in which defendant obtained ex parte
injunction against the plaintiff is still pending consideration; ii) that there can
be no claim for damages on the basis of an order of the Court; and, iii) that
the ex parte order dated 2nd June, 2010 in CS(OS) No.1105/2010 was
confirmed on 18th September, 2013.
4. The plaintiff chose not to file the replication.
5. The suit is listed today for framing of issues.
6. Being prima facie of the opinion that a suit as the present one does not
lie, particularly when CS(OS) No.1105/2010, since re-numbered as
CS(COMM) No.535/2017, on account of interim injunction wherein
damages are claimed is still pending and is also listed today and in which
separate orders have been passed, I have enquired so from the counsels.
7. Neither the counsel for the plaintiff has looked into the said aspect nor
has the counsel for the defendant.
8. I have drawn the attention of the counsels to Section 35A and Section
95 of the Code of Civil Procedure, 1908 (CPC) which are as under:
CS(COMM) No.1066/2016 Page 2 of 9
"35A. Compensatory costs in respect of false or vexatious
claims or defences.-- (1) If in any suit or other proceedings,
including an execution proceeding but excluding an appeal or a
revision any party objects to the claim or defence on the ground
that the claim or defence or any part of it is, as against the
objector, false or vexatious to the knowledge of the party by
whom it has been put forward, and if, thereafter, as against the
objector, such claim or defence is disallowed, abandoned or
withdrawn in whole or in part, the Court, if it so thinks fit may,
after recording its reasons for holding such claim or defence to
be false or vexatious, make an order for the payment to the
objector by the party by whom such claim or defence has been
put forward, of cost by way of compensation.
(2) No Court shall make any such order for the payment
of an amount exceeding three thousand rupees or exceeding the
limits of it pecuniary jurisdiction, whichever amount is less:
Provided that where the pecuniary limits of the
jurisdiction of any Court exercising the jurisdiction of a Court of
Small Causes under the Provincial Small Cause Courts Act,
1887 (9 of 1887), or under a corresponding law in force in any
part of India to which the said Act does not extend and not being
a Court constituted under such Act or law, are less than two
hundred and fifty rupees, the High Court may empower such
Court to award as costs under this section any amount not
exceeding two hundred and fifty rupees and not exceeding those
limits by more than one hundred rupees:
Provided, further, that the High Court may limit the
amount which any Court or class of Courts is empowered to
award as costs under this section.
(3) No person against whom an order has been made
under this section shall, by reason thereof, be exempted from
any criminal liability in respect of any claim or defence made by
him.
(4) The amount of any compensation awarded under this
section in respect of a false or vexatious claim or defence shall
be taken into account in any subsequent suit for damages or
compensation in respect of such claim or defence."
CS(COMM) No.1066/2016 Page 3 of 9
"95. Compensation for obtaining arrest, attachment or
injunction on insufficient grounds-- (1) Where, in any suit in
which an arrest or attachment has been affected or a temporary
injunction granted under the last preceding section,--
(a) it appears to the Court that such arrest, attachment
or injunction was applied for on insufficient grounds,
or
(b) the suit of the plaintiff fails and it appears to the
Court that there was no reasonable or probable
grounds for instituting the same,
the defendant may apply to the Court, and the Court may, upon
such application, award against the plaintiff by its order such
amount, not exceeding fifty thousand rupees, as it deems a
reasonable compensation to the defendant for the expense or
injury (including injury to reputation) caused to him:
Provided that a Court shall not award, under this section,
an amount exceeding the limits of its pecuniary jurisdiction.
(2) An order determining any such application shall bar
any suit for compensation in respect of such arrest, attachment
or injunction."
and to Article 90 of the Schedule to the Limitation Act, 1963 which, for a
suit for recovery of compensation for injury caused by an injunction wrongly
obtained, prescribes a limitation of three years commencing from the date
when the injunction ceases.
9. There is no averment in the plaint, of the injunction for obtaining
which damages are claimed from the defendant, having ceased. As per
Article 90 supra, the cause of action for the relief, as claimed in the present
suit, accrued only when the injunction wrongly obtained ceases. The plaint,
on the averments contained therein, thus does not disclose a cause of action
and the suit ought not to have been entertained by the learned District Judge
CS(COMM) No.1066/2016 Page 4 of 9
who, when the suit was pending before him, ordered issuance of summons
thereof.
10. The defendant in its written statement has, as aforesaid, however
pleaded that the injunction was confirmed.
11. A perusal of the file of CS(OS) No.1105/2010, since re-numbered as
CS(COMM) No.535/2017, also listed today, shows that i) the plaintiff
preferred FAO(OS) No.481/2010 against the ex parte order dated 2nd June,
2010 but on 20th July, 2010 withdrew the appeal with liberty to approach the
Suit Court under Order XXXIX Rule 4 of the CPC; ii) the plaintiff having
delayed the filing of written statement in CS(OS) No.1105/2010 since re-
numbered as CS(COMM) No.535/2017 and having sought condonation of
delay in filing thereof; iii) the parties in CS(OS) No.1105/2010 since re-
numbered as CS(COMM) No.535/2017 having on 9th February, 2017 been
referred to mediation; iv) the hearing of the application for interim relief in
CS(OS) No.1105/2010 since re-numbered as CS(COMM) No.535/2017
having been adjourned on innumerable occasions owing to the request of one
counsel or the other or on joint request; v) the plaintiff herein, vide order
dated 11th July, 2013 in CS(OS) No.1105/2010 since re-numbered as
CS(COMM) No.535/2017, having been found to be in non-compliance of
the interim order dated 2nd June, 2010 in that suit; and, vi) the ex parte ad-
interim order dated 2nd June, 2010 having been made absolute, during the
pendency of CS(OS) No.1105/2010 since re-numbered as CS(COMM)
No.535/2017, vide order dated 18th September, 2013 therein. It thus
transpires that the interim injunction, on account of which the plaintiff herein
claims to have suffered damages and for recovery of which the present suit
has been filed, has been made absolute and the suit being CS(OS)
CS(COMM) No.1066/2016 Page 5 of 9
No.1105/2010 since re-numbered as CS(COMM) No.535/2017 in which the
said interim order was passed is still pending consideration.
12. This suit is thus clearly premature. Though this suit is liable to be
dismissed for this reason only but having had occasion to study the subject, I
may for the sake of future reference also refer to a few other aspects.
13. The present suit though for recovery of damages in the sum of Rs.1
crore only, inspite of minimum pecuniary jurisdiction of this Court having
stood enhanced to in excess of Rs.2 crores, is before this Court for the reason
of having been found to be a commercial suit. Though, I entertain doubts
whether a suit for recovery of damages on account of obtaining wrongful
injunction would qualify as a commercial dispute but if it is so, then as per
Clause 3 of Schedule to the Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts Act, 2015, Section 35A(2) of
the CPC which limits the compensatory costs which can be awarded, to
Rs.3,000/-, has been deleted insofar as commercial suits are concerned.
Though the schedule to the Commercial Courts Act does not make any
change to Section 95 of the CPC but following the parity of reasoning as in
deletion of Section 35A(2), in commercial suits, the maximum compensation
which the Court can award for obtaining injunction on insufficient grounds,
cannot be Rs.50,000/- as provided in Section 95(1) of the CPC.
14. Though Section 95(2) of the CPC provides that an order determining
an application under Section 95 will bar any suit for compensation in respect
of such injunction and which would mean that if such an application is not
filed, a suit would lie but I am of the opinion that the Court which is most
suited to award compensation for wrongfully obtaining an injunction, is the
Court which granted the injunction and to relegate the party, which suffers
CS(COMM) No.1066/2016 Page 6 of 9
such an injunction to a separate suit for recovery of compensation therefor
would multiply litigation. I say so because it has been consistently held in
Abhimanyoo Ram Vs. State of Uttar Pradesh (2008) 17 SCC 73, Ramesh
Chandra Sankla Vs. Vikram Cement (2008) 14 SCC 58 followed by me in
Ruchika Cables Pvt. Ltd. Vs. The Secretary (Labour) 2010 (117) DRJ 73
that the Court, at the time of final disposal, must balance the equities flowing
from the interim order and a litigant cannot retain the benefit of interim
order. Thus, if a Court which has granted an injunction, finds the same to
have been obtained on insufficient grounds, while vacating the injunction is
required to, while balancing the equities, compensate the party against whom
such an injunction was granted. Once that is done and / or is required to be
done, in my opinion, the need for a subsequent suit should not arise.
15. In the present case, of course, the injunction has been confirmed and
the suit being CS(OS) No.1105/2010 since re-numbered as CS(COMM)
No.535/2017 is still pending consideration, it will be open to the plaintiff to,
in the said suit, at the time of final disposal thereof, also urge that the interim
injunction should be vacated and the Court, if vacating the interim
injunction, should compensate the plaintiff for the period for which the
injunction remained in force. It is a different matter that the Court may at
that stage, instead of balancing the equities itself, relegate the plaintiff to the
remedy of a separate suit.
16. Thought has also crossed my mind, whether a mere vacation of the ex
parte injunction and thereby cessation thereof during the pendency of the
suit would furnish a cause of action for a suit for damages. The vacation,
even if any of the ex parte injunction, is on a prima facie view of the matter
and the suit for the relief of permanent injunction would still have to be
CS(COMM) No.1066/2016 Page 7 of 9
decided. It is well nigh possible that the Court though has not found the
plaintiff entitled to interim injunction may ultimately find the plaintiff
entitled to a permanent injunction. Thus, in my opinion, a mere vacation of
the ex parte injunction on a prima facie view of the matter also cannot entitle
a defendant against whom the ex parte injunction was granted, to institute a
suit for recovery of damages. If in the suit in which ex parte injunction was
granted and vacated, the plaintiff is ultimately found entitled to a permanent
injunction, it cannot certainly be said that the plaintiff had sought ex parte
injunction on insufficient grounds. Once that is so, the question of the
defendant being entitled to damages on account of ex parte injunction would
not arise. Thus the better view appears to be, that even in cases in which ex
parte injunction is granted and vacated, a suit for damages for obtaining ex
parte injunction should await the final decision of the suit.
17. Reference in this regard may be made to Mahadev I. Todale Vs.
Frankfinn Aviation Services Pvt. Ltd. 242 (2017) DLT 273, SLP(C)
No.28925/2017 preferred whereagainst was dismissed on 10 th November,
2017, holding that till the plaintiff obtains an order of acquittal or discharge
in his favour, no cause of action to file a suit against the defendant on the tort
of malicious prosecution accrues. Reference in this context may also be
made to Primero Skill & Training Pvt. Ltd. Vs. Selima Publications Pvt.
Ltd. MANU/DE/0789/2017 and to order dated 20 th November, 2017 in
CM(M) 1307/2017 titled Ashok Kumar Ohri Vs. Ved Prakash Gulati.
18. Mention may lastly be made of i) Bank of India Vs. Lekhimoni Das
(2000) 3 SCC 640 holding that Section 95 of the CPC provides for a
summary remedy to get compensation where a temporary injunction has
been granted if such injunction was applied for on insufficient grounds or
CS(COMM) No.1066/2016 Page 8 of 9
there were no reasonable or probable grounds for instituting the claim for
injunction; however the said remedy is optional and an injured party can file
a regular suit against the applicant for injunction for compensation if he has
not already sought relief under the aforesaid provision; thus, Section 95 of
the CPC is an alternative remedy in cases of wrongful obtainment of an
injunction and it does not in any way interfere with the principles regulating
suits for damages for tort of malicious prosecution; however proof of malice
and of special damage is necessary; and, ii) to the earlier judgments in Albert
Bonnan Vs. Imperial Tobacco Co. of India Ltd. AIR 1929 PC 222;
Bhupendra Nath Chatterjee Vs. Srimati Trinayani Debi AIR 1944 Cal 289;
Inder Singh Vs. The Chief Commissioner, Delhi AIR 1963 P&H 158;
Basamma Vs. Peerapa AIR 1982 Kar 9, the need to detail the findings
wherein is however not felt.
19. As aforesaid, for dismissal of the present suit, the reasoning given in
para no.12 alone is sufficient.
20. There is thus no merit in the suit.
21. Dismissed.
22. Since the counsel for the defendant was also not of any assistance, no
costs.
Decree sheet be drawn up.
RAJIV SAHAI ENDLAW, J.
DECEMBER 07, 2017 'gsr'..
(Corrected & released on 4th January, 2018) CS(COMM) No.1066/2016 Page 9 of 9