Calcutta High Court
State Of West Bengal & Anr vs The National Dairy Development Board & ... on 23 November, 2010
Author: Sanjib Banerjee
Bench: Sanjib Banerjee
GA No. 1574 of 2009
CS No. 57 of 2009
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
STATE OF WEST BENGAL & ANR.
Versus
THE NATIONAL DAIRY DEVELOPMENT BOARD & ANR.
Appearance
Mr. Tilak Bose, Sr. Advocate
Mr. R.N. Jhunjhunwala, Advocate
Ms. Vineeta Meharia, Advocate
Mr. Debnath Ghosh, Advocate
Mr. J.B. Panda, Advocate
...Defendant Nos. 1 & 2
Mr. Hirak Mitra, Sr. Advocate
Mr. Pradip Ghosh, Sr. Advocate
Mr. Debdutta Sen, Advocate
Ms. S. Ghosh, Advocate
Mr. M.K. Seal Advocate
...Plaintiffs
BEFORE:
The Hon'ble JUSTICE SANJIB BANERJEE
Date : 23rd November, 2010.
The Court : Several points have been canvassed by the defendants in support of their application for effectively arresting the action in this Court.
2
The first point that the defendants take is that no part of the plaintiffs' cause of action arose within the jurisdiction of this Court and as such the leave granted under Clause 12 of the Letters Patent should be revoked. The alternative case for revocation of the leave under Clause 12 is that even if an infinitesimal part of the cause of action arose within, the leave is liable to be revoked since it would be inconvenient to the defendants to contest the suit here. The second count of attack is that the suit has been instituted in abuse of process and as a counter-blast to the defendants' action instituted in Delhi. The defendants refer to the plaint relating to the present suit and the admission therein that it was only upon service of an order passed by the Delhi High Court early in 2009 that the plaintiffs came to be aware of their rights and the alleged misrepresentation of facts by the defendants.
The next ground urged is that the plaint does not disclose any cause of action. It is defendants' contention that when a case of misrepresentation is made out in relation to the making of a contract, a suit for annulling the contract could not have been instituted without the plaintiffs having avoided and rescinded the contract. The defendants refer to the averments between paragraphs 10 and 18 of the plaint to demonstrate that there is no clear statement that the plaintiffs have 3 avoided the contract and there is no averment to the effect that any notice of rescission or revocation has been served on the defendants.
The final point urged by the defendants is under Section 10 of the Code of Civil Procedure. According to the defendants, the principal parties to the two actions are the same notwithstanding the different manner in which they have been described in the cause titles relating to the two suits. The defendants urge that in the earlier suit having been instituted in Delhi and the claim of the plaintiffs in the present suit being integral to these plaintiffs' defence in the Delhi suit, the matters in issue in this suit are directly and substantially in issue in the previous suit; and, as such, the trial of the present suit and, indeed, all further interlocutory proceedings in the present suit should be arrested.
As to the contention on revocation of leave granted under Clause 12 of the Letters Patent, there are two aspects. The legal principle covering the first facet is that if it is pleaded in the plaint that a part of the cause of action had arisen within jurisdiction - however small - unless it is demonstrated that such averment is absurd on the face of it, the Court would be loath to revoke the leave since the plaintiffs have the choice of forum. At paragraph 22 of the plaint, it has been pleaded that the agreement which is sought to be avoided was entered into at Writers' Buildings within jurisdiction. The defendants labour through a copy of the 4 agreement to show that the agreement did not specify that it was entered into or executed at Writers' Buildings and the agreement would tend to indicate that it may have been executed in Salt Lake where the second plaintiff has an office. On an application in the nature of demurrer, the statements contained in the plaint have to be accepted as correct and the defendants' contention has to be rejected on the ground that the defendants are not entitled to seek rejection of the plaint by discrediting any statement made in the plaint.
As to the question of balance of convenience, it is well-known that an overwhelming case of inconvenience has to be made out for a Court which has jurisdiction to ask the plaintiff to carry his claim elsewhere. Though the defendants have paid lip service to the ground of balance of convenience in the application, no particulars in support thereof have been indicated. The defendants insist that in the plaintiffs having instituted their action as a counter-blast to the defendants' suit in Delhi, it is evident that the plaintiffs intend to harass and cause hardship to the defendants. However, since the plaintiffs had the option to choose their forum, the mere allegation without any material in support thereof, that it would be inconvenient for the defendants to contest this suit or participate in the trial thereof in this Court, cannot be of any significance. No case of overwhelming inconvenience has been alleged, far less established. 5
There is substantial merit in the defendants' contention that the plaint relating to the suit may not disclose any cause of action. On a strict construction, it would appear that though a case of misrepresentation has been made out, there is no revocation or rescission of the agreement of September 20, 2004 by the plaintiffs nor does the plaint allude to any communication of the revocation or rescission. But this aspect of the matter would need a protracted consideration and it has now come to be accepted that the benefit of every doubt on an application for rejection of the plaint or for revocation of leave granted under Clause 12 of the Letters Patent or in the nature of demurrer should go to the plaintiffs.
The defendants say that the suit is barred by law since the plaintiffs have sought cancellation of an agreement of the year 2004 in the year 2009 and Article 59 of the Schedule to the Limitation Act, 1963, prescribes a period of three years therefor. The plaintiffs rely on Article 112 to the Schedule to show that there is a time period of 30 years which is permitted to States for such purpose. Article 112 has an overriding entry in the third column in that this entry in Article 112 would stand substituted in place and stead of the regular entries in the other articles in the Schedule to the Limitation Act if the State were a plaintiff. The plaintiffs have also relied on a State amendment of Article 112 by which actions 6 instituted by Central Government and State Government companies have also been given the same benefit.
The defendants say that the latitude under Section 112 is not available to these plaintiffs since the real cause of action, if at all, in the suit is that of the second plaintiff and since it was only the second plaintiff which had entered into the agreement of September 20, 2004 and the first plaintiff was not a party or otherwise a signatory thereto.
The essence of the claim in the present action is that the first plaintiff is the owner of the "Mother Dairy" mark which the first plaintiff has been using from or about the year 1978. It has been averred in the plaint that between 1978 and 1996, the first plaintiff permitted the National Dairy Development Board - or a previous avatar of the Board or some other entity - to operate the first plaintiff's Dankuni unit also known by the name of Mother Dairy. It has also been averred in the plaint that following the National Dairy Development Board pulling out of the management of the Dankuni unit, it is the second plaintiff who now runs and manages the said unit.
The agreement of September 20, 2004 between the first defendant and the second plaintiff envisaged that the first defendant would be entitled to exclusive rights relating to the "Mother Dairy" mark in the rest of the country and the second plaintiff would be entitled to the use 7 of the mark restricted to the territory of West Bengal. The plaintiffs plead that it was only upon the receipt of a copy of an interlocutory order passed by the Delhi High Court in the year 2009 that the plaintiffs sought legal advice and the plaintiffs thereafter discovered that the plaintiffs had rights which the plaintiffs were previously unaware of. However uninspiring the averments in the plaint may be, they have now to be liberally construed in favour of the plaintiffs as a decision at this stage cannot be on the merits of the claim which is to ordinarily await the trial.
The substance of the claim in the suit is that the first plaintiff is entitled to use and exploit its trademark 'Mother Dairy' and that the plaintiffs had been labouring under a misapprehension that the first defendant had exclusive rights to the 'Mother Dairy' mark elsewhere in the country. The plaintiffs seek to assert that the representation by the first defendant that it was entitled to exclusive use of the mark elsewhere in the country was not warranted on facts and that in view of the misrepresentation by the first defendant as to its rights relating to the mark in the rest of the country, and the discovery thereof only upon receipt of the order of 2009, the plaintiffs were entitled to avoid the contract of September 20, 2004.
What is of significance is that it is a right of the first plaintiff that is canvassed in the suit. The second plaintiff is a mere instrumentality 8 or an agency engaged by the first plaintiff for the purpose of running and operating the Dankuni unit of the first plaintiff. The plaintiffs are, therefore, entitled to seek the benefit of Article 112 of the Schedule to the Limitation Act.
The claim in the previous suit instituted in Delhi is that the plaintiffs herein were apparently seeking to act in derogation of their obligations under the September, 2004 agreement by purporting to exploit the 'Mother Dairy' mark beyond the territorial limits of West Bengal. The injunction sought in the previous action is to restrict the present plaintiffs' use of the 'Mother Dairy' mark to the State of West Bengal.
Surely, the defence of the plaintiffs in the Delhi High Court suit
- whether or not any written statement has been filed there - would be the same as is reflected in the plaint relating to the present suit as the claim in the subsequent suit or the cause of action embodied therein cannot be divorced from the defence that may be set up by these plaintiffs in Delhi. Indeed, as would be evident from the orders passed by the Delhi High Court, the plaintiffs herein had claimed a stay of the Delhi action under Section 151 of the Code by citing, inter alia, the celebrated judgment of Manohar Lal Chopra vs. Seth Hiralal reported at AIR 1962 SC 527. Implicit in these plaintiffs' conduct is their awareness that a decision in the previous suit would have a material bearing on the subsequent action. 9
The defendants here have made out a case under Section 10 of the Civil Procedure Code notwithstanding the State of West Bengal not being a eo nomine party to the Delhi suit. In the Delhi suit, the second plaintiff here is one of the defendants and the Mother Dairy unit at Dankuni is shown to be another defendant. The Mother Dairy unit is shown in the Delhi plaint to be operated or managed by the second plaintiff here. Notwithstanding that the State of West Bengal has not been impleaded by name, it is evident from the plaint relating to the Delhi suit (a copy whereof has been handed over by the defendants in course of the hearing today) that the substance of the Delhi action is that the State of West Bengal and its instrumentality, the second plaintiff herein, have sought to act in derogation of their obligation under the September 20, 2004 agreement by venturing into fields beyond their accepted territory.
Ordinarily, on an application under Section 10 of the Code, it is the trial of the suit which is arrested once the Court finds that the matters directly and substantially in issue between the same parties or parties claiming under them are already in issue in a previous action. It is only in the rare case where, on additional grounds of abuse of process or the principle of comity of Courts, the Court would altogether stay further interlocutory proceedings in the subsequent suit. The object of Section 10 10 is primarily to avoid a protracted second trial on substantially similar issues.
No extraordinary case has been made out by the applying defendants here for an injunction in respect of all interlocutory proceedings that have been or may be instituted by the plaintiffs in the present suit. The defendants have to rest content with an order staying the trial of the present suit till such time that the Delhi suit has been decided. In any event, as it now appears, any final decision on the Delhi High Court suit would willy-nilly amount to res judicata since the same issues having been decided in the previous proceedings cannot be re- agitated.
The applying defendants' contention as to revocation of leave granted under Clause 12 of the Letters Patent (in support whereof they have cited a judgment reported at AIR 1949 Cal 495) is repelled both inasmuch as it appears from the relevant statement in this plaint that a part of cause of action as pleaded in the plaint arose within the territorial jurisdiction of this Court and inasmuch as no overwhelming case of inconvenience has been made out.
There are arguable issues as to the plaint not disclosing any cause of action. In any event, since an order is made staying the trial of the suit, as to whether the plaintiffs have any cause of action or not will be 11 decided upon the merits of the present plaintiffs' defence being assessed in the trial before the Delhi High Court.
GA No.1574 of 2009 succeeds to the limited extent that the trial relating to CS No.57 of 2009 will remain stayed pending disposal of the Delhi High Court suit being CS(OS) No.41 of 2009.
There will be no order as to costs.
Urgent certified photocopies of this order, if applied for, be supplied to the parties upon compliance with all requisite formalities.
(Sanjib Banerjee, J.) sg./bp.