Delhi District Court
Union Of India vs M/S The State Trading Corporation on 27 March, 2014
IN THE COURT OF MS. VINEETA GOYAL : ADDITIONAL DISTRICT
JUDGE 01, PATIALA HOUSE COURTS, NEW DELHI
Arbtn No. 50/13
Union of India
Through Chief Director of Purchase
Ministry of Defence, APO
Krishi Bhawan
New Delhi110001 ... Petitioner
Versus
M/S The State Trading Corporation
of India Ltd.
Nilhat House (9th & 10th Floor)
11, R N Mukherjee Road
Kolkata - 700001 ... Respondent
Suit presented On : 09.04.2013
Arguments Heard On : 27.03.2014
Order Pronounced On : 27.03.2014
Appearance :
Sh. Jai Raj Mudgal, Counsel for petitioner.
Sh. Shiv Khurana, Counsel for respondent.
O R D E R
The petitioner/UOI filed an objection petition U/s 34 of the Arbitration & Conciliation Act, 1996 (hereinafter called the Act) against the award made on 7.12.2012 by Ld Sole Arbitrator whereby petitioner/UOI was directed to take a sum of Rs. 4, 10, 000/- with interest @ 12% per annum from 1.3.2012 till actual payment.
Union of India Vs. M/S The State Trading Corporation of India Ltd. Page no. 1 of 4 2 The objection petition was contested by non applicant/respondent by
raising plea that objection petition preferred by UOI is barred by limitation. The award was passed on 07.12.2012 and it was received by petitioner on 18.12.2012. The present objection petition was preferred on 12.04.2013 i.e. after statutory period of three months and as such no application has been preferred by petitioner for condonation of delay. The delay cannot be condoned in a petition filed U/S 34 of the Act and the petition is not maintainable in view of specific provisions of the Act. On aforesaid grounds, a prayer for dismissal of objection petition was prayed. 3 I have heard Ld. Counsel for parties and have perused the material placed on record.
4 The Hon'ble Supreme Court in case titled Union of India Vs. M/s Popular Constructions Company, AIR 2011 SC 4010 observed that the time limit prescribed U/S 34 of Arbitration & Conciliation Act was absolute and unextendable. Section 5 of the Limitation Act was not applicable to it.
5 Further in case of Chief Engineer BPDP/EO, Ranchi Vs. Scoot Wilson Kirpatrick India Pvt Ltd. (2006) 13, SCC, 622, the judgment of Union of India Vs. M/s Popular Constructions Company (supra) was followed and it was reiterated that Section 5 of Limitation Act was excluded by Section 34 (3) of the Act.
6 Section 34 of the Act lays down provision for moving application for setting aside arbitral award. The relevant portion of Section 34 reads as under:
Section 34. Application for setting aside arbitral award.
(1)........
Union of India Vs. M/S The State Trading Corporation of India Ltd. Page no. 2 of 4 (2) (3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under Section 33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.
(4) ......
7 A bare reading of Clause (3) of Section 34 shows that period of three months has been prescribed for making an application for setting aside the award from the date when the arbitral award has been received or if a request has been made under Section 33 from the date from which request has been disposed off. However, proviso to Section 34(3) empowers the court to entertain such application within a period of 30 days on showing sufficient cause by the applicant. The expression "entertain an application within a further period of 30 days but not thereafter" , is couched in the negative and is mandatory in character.
8 In present case award has been passed on 07.12.2012 and it has been received by petitioner/UOI on 18.12.2012 and the objection petition has been filed on 09.04.2013. The objection petition was filed beyond the period of three months and there is a delay in filing of same. It is relevant to note that the objection petition is also devoid of any application praying for condonation of delay by showing sufficient cause by the applicant. This delay in filing objection petition cannot be condoned as petition for setting aside an award should be made within three months from the date of receiving of award as per Clause 3 of Section 34 of the Act.
Union of India Vs. M/S The State Trading Corporation of India Ltd. Page no. 3 of 4 9 In view of above discussion, application moved by respondent for
dismissal of objection petition filed by petitioner being barred by limitation is allowed and objection petition deserves to be dismissed.
10 File be consigned to record room.
Order Pronounced on 27.03.2014. (Vineeta Goyal)
Additional District Judge01
NDD /PHC / New Delhi
Union of India Vs. M/S The State Trading
Corporation of India Ltd. Page no. 4 of 4
Arbtn No: 50/13
27.03.2014
Present: Sh. Jai Raj Mudgal, Counsel for petitioner.
Sh. Shiv Khurana, Counsel for respondent.
Vide separate order of the even date, the objection petition U/S 34 of the Arbitration & Conciliation Act, 1996 is dismissed.
File be consigned to record room.
(Vineeta Goyal)
Additional District Judge01
NDD /PHC / New Delhi
Union of India Vs. M/S The State Trading
Corporation of India Ltd. Page no. 5 of 4
Anoop Mittal
Present: Sh. Rakesh Mittal, Counsel for the plaintiff.
Sh. N K Bhardwaj,. Counsel for defendant no. 1 to 5.
Sh. Sanjeev Sindwani and Sh. Prashant Gupta, Counsel for defendant no.6 Vide this order, I will dispose off an application filed by defendant no. 6/applicant namely Mitsubishi Electric India pvt. Ltd. under order 1 rule 10 of Code of Civil Procedure, 1908 praying for deleting the name of defendant no. 6/aplicant from the array of parties on the ground that the plaintiff has filed present suit under Section 134 and 135 of The Trade Mark Act along with relevant section of Copyright Act for Infringement and passing off Trade name 'Messung'. In the application, the applicant / defendant no. 6 categorically denied any claim over the impugned trade mark and submitted that on May 2, 2012, even though it has acquired the business and assets of defendants no.2 to 5, but excluding those relating to 'Messung' including interalia the trademarks 'Messung Logo bearing registration no.1057978 in class 16', 'Messung Piramide Logo 18155525 in class 9 and the domain name www.messung.com which are subject matter of proceedings. It is admitted by applicant / defendant no.6 that even though there exist a 'Business Transfer Agreement' with other defendants but the said agreement is in respect of acquisition of business assets excluding those related to 'Messung Mark' and 'Messung Logo'. The applicant / defendant no.6 further submitted and undertook that it has neither acquired nor will acquire any rights in the mark 'MESSUNG' or any other 'MESSUNG' formative mark from defendants no.1 to 5 till the disposal of the present suit. The applicant / defendant no. 6 further pleaded that it is a separate legal entity and is completely independent from defendants no.1 to 5 which has never infringed the impugned trade mark of plaintiff because there are no such allegations in the plaint.
In support of his application under Order 1 Rule 10, the Ld. Sr. Counsel for defendants has relied on in the decision of the case entitled 'Sh. Mahender Kumar Aggarwal Vs. m/s. Ansal Buildwell Ltd.' decided on 20.10.2011 wherein it was observed that the body of a plaint necessarily decipers what the plaintiff has to state; the impugned order has correctly noted this and recorded that there is no specific averments against defendants no.2 and 3 and as such the joinder of defendants no.2 and 3 is misplaced. Defendant no. 1 is admittedly an individual; he being a company and having an identity of its own. The plaint did not disclose any cause of action against defendants no.2 and 3; the twin test for deciding an application under Order 1 Rule 10 of Code had also been adverted to; a necessary party would be a party against whom a relief is sought or in the absence of that party no effective decree can be passed. Applying the said test, the Court had correctly noted that defendant no. 2 and 3 are liable to be deleted as no relief against them has been claimed and their presence is also not necessary for effective disposal of the suit; the impugned order has no manner suffers from any infirmity.
It was further argued by Ld. Sr. Counsel for applicant that under Order 1 Rule 10 (2) of CPC, if a party has been improperly joined as defendant, the court has jurisdiction to strike of its name. In accessing whether a party is necessary or proper there are two tests to determine such as (1) there must be some right to some relief against such party in respect of the proceedings, and (2) it should be impossible to pass and effective decree in absence of such party. In present case in hand, there are only generic allegations without any specific relief sought against applicant / defendant no. 6. The learned counsel for applicant / defendant no. 6 relied on decision of the case 'Desiccant Rotors International Pvt. Ltd. Vs. Bappaditya Sarkar & Anr' 161(2009) DLT 574 decided on 14.07.2009 wherein it was observed in following paragraphs as under:
21. Defendant no. 2 also submits that no cause of action has been disclosed against it and avers that the true intent of the plaintiff is to restrain defendant no. 2 from entering the Indian market as defendant no. 2 is a global leader of these products and the plaintiff has a virtual monopoly over the same in India.
Defendant no.2 further submits that it has been the market leader in the industry and had launched the product that the plaintiff distributes in India over 30 years back. Accordingly, there is no factual basis for an apprehension that the defendant no. 2 would be requiring and using the technical knowhow of the plaintiff. Irrespective of that, it is submitted that the defendant no. 2 has not received confidential information of any nature from the plaintiff or defendant no.1 at any point in time and that the plaintiff has only made vague allegations as to the same without placing anything on record to support its allegations.
22. In its reply, the plaintiff has stated that defendant no.2 is a necessary party as it is in possession of confidential information of the plaintiff which it has obtained from defendant no.1with mala fide intention. In fact, the plaintiff submits that the defendant no.1 has been engaged in its services by defendant no.2 is allegedly using the said information for illegal gains in the market. The plaintiff submits that it has valid grievances and claims against defendant no.2 and if the latter is deleted from the array of parties, effective adjudication of the dispute will not be possible. Also, defendant no.1 has allegedly contacted suppliers and customers of the plaintiff on behalf of defendant no.2 who has enjoying illegal gains with the same to the detriment of the plaintiff.
23. Defendant no. 2 has submitted that its impleadment in the present suit is motivated and is an abuse of the Court's process. The sole intention behind defendant no. 2's impleadment is to stall its progress as it is a new entrant in the Indian market. In view of all of the above stated, I am of the view that the plaintiff has failed to show any cause of action against defendant no.2. The present application is allowed and defendant no. 2 is deleted from the array of parties as it is not connected with the present suit by virtue of the fact that there exists no contractual relationship between the plaintiff and defendant no. 2. However, if the plaintiff has any evidence that any act of defendant no.2 amounts to infringement of its legal and valid rights, including technical knowhow or information of other such nature of which the plaintiff is the rightful owner, then he is at liberty to initiate legal action in accordance with law. On the mere basis of apprehension, a party cannot be sued. The present application filed by defendant no. 2 is therefore allowed.
Further learned counsel for applicant referred to following decisions:
1. Facebook India Online Services Pvt. Ltd. Vs. Mufty Aijas Arshad Qasmi, 2013 VIII AD (Delhi) 245..
2. W.P.I.L. Vs NTPC Ltd. & Ors, 2009 II AD (Delhi) 453
3. Ramesh Hirachand Kundanmal Vs. Municipal Corporation of Greater Bombay and Others, (1992) 2 Supreme Court Cases 524
4. Kasturi Vs. Iyyamperumal and Others, (2005) 6 Supreme Court Cases 733.
5. Mumbai International Airport Private Limited Vs. Regency Convention Centre and Hotels Private Limited and Others, (2010) 7 Supreme Court Cases 417 Repelling the above application, learned counsel for plaintiff argued that in event of success of plaint, the question of rendition of account and proceedings against the assets of defendant no. 1 to 5 would arise particularly in view of the fact that defendant no.6 has acquired the business and assets of defendants no. 2 to 5 on May 2012 during pendency of suit and more particularly when the application pressing for relief as prayed in para 29(b) of application under Order 39 Rules 1 and 2 CPC was being dismissed. Learned counsel for plaintiff further argued that at the time of disposing off aforesaid application, in para no.8, Ld. Predecessor has categorically observed that 'the defendant no. 6 is already a party to the list and the liability if adjudicated against them would be joint and several against the defendants before this court'. Learned Counsel for plaintiff also argued that the interest of the plaintiff would be prejudiced if defendant no. 6 is deleted from the array of parties.
In support of aforesaid contention, learned counsel for applicant has relief on in the decision of case entitled 'The State Tradng Corporation of India Ltd. Vs. Chittoor Cooperative sugar Ltd. and Others' decided on 09.03.1989 wherein it was observed that:
13 Furthermore, it is alleged in the plaint that the terms which had been agreed between the parties for payment to the defendant no. 1 was that 90% was to be made on the claim being made, and the balance amount of 10% was to be paid subsequently after the plaintiff was satisfied that the sale had in fact been made, and had checked the particulars of the sale. These negotiations had taken place between the plaintiff and the representatives of defendants 2 and 3 and, therefore, to my mind, the said defendants are proper, if not necessary parties in order to decide this question of fact as to whether a new agreement had come into existence or not, and what were the terms of the agreement, and it was necessary to implead the party with whom the agreement is alleged to have been entered into. I, therefore, do not find any merit in the application under O.1, R.10, CPC. The same is accordingly dismissed.
Further learned counsel for non applicant / plaintiff referred to following decision:
1. KRBL Limited Vs. Ramesh Bansal & Anr., 2009 (41) PTC 114 (Del.)
2. Pfizer Products, Inc. Vs. Rajesh Chopra & Ors., 2006 (32) PTC 301 (Del.)
3. Lalli Enterprises Vs. Dharam Chand & Sons, 2003 (26) PTC 239 (DB).
On the other hand, Ld. Sr. Counsel for defendant no. 6 / applicant again stressed that the defendant no. 6 is a separate legal entity which has not acquired impugned trademark and pointed towards affidavit dated 28.05.2013 of Sh. Farooq Nawaj Ali Merchant, defendant no.1, partner in defendant no. 2 and Director of defendant no. 3 to 5 interalia confirming no acquisition of impugned trademark., no merger between defendant no. 2 to 5 and defendant no. 6 and defendant no. 1 to 5 and defendant no. 6 are separate legal entities and are completely independent from each other. It was argued that defendant no.6 neither fall in the category of necessary party nor proper party in present suit.
I have considered the arguments and submissions advanced by learned Counsels for parties and perused the case record. It would be relevant to refer to an order dated 21.04.2012 passed by my Ld. Predecessor on an application filed by plaintiff under Order 39 rule 1 and 2 of CPC interalia praying for restrain of transfer of assets between defendants no.1 to 5 and defendant no. 6. The said application was rejected by the abovesaid order and one of the ground for rejection is contained in para no.8 of order which is reproduced herein: I therefore do not find that any irreparable loss would accrue to the plaintiff by declining their prayer for restraining defendants no. 1 to 5 from transferring their assets to defendant no. 6, as the same can be compensated by money, as also in view of the defendant's submission that they are willing to secure the plaintiff, and the fact that defendant no. 1 to 5 are not being discharged by this Court, even if they dispose off / sell the assets to defendant no.6. Defendant no. 6 is already a party to the lis, and the liability if adjudicated against them would be joint and several against the defendants before this court.
It can be seen from above that the transfer of assets between defendants no. 1 to 5 and defendant no.6 was not restrained on one of the ground that defendant no. 6 continues to be existing defendant in the present suit. Moreover, it is a matter of fact that plaintiff has claimed rendition of accounts as one of relief. The applicant/defendant no. 6 has acquired business and assets of defendant no. 1 to 5 and the presence of defendant no. 6 though not necessary but is a proper party whose presence would enable the court to completely, effectively and adequately adjudicate upon matter in issue in the suit even though he need not to be a person in favour of or against whom decree is to be made. And at this stage, if applicant/defendant no. 6 is deleted from the array of the parties, the interest of plaintiff particularly claim for rendition of account will be effected as the applicant/ defendant no. 6 is undisputedly a person succeeding the business interest of defendants no. 2 to 5. Such a transfer is apparently referred to as lock stock and barrel. The aearlier accounts are continued by the successor. The customers of the business are also succeeded. In such eventuality, the transferrer (defendants no. 2 to 5) would loose control over the accounts from the date of transfer. If defendant no. 6 is deleted it would be difficult to obtain continuous and complete rendition of accounts. Moreover, defendant no.6/applicant has acquired the business assets of defendants no. 2to 5 on 02.05.2012.i.e during pendency of suit and applicant/defendant no. 6 was well aware of proceedings pending before the court. Therefore, the application of applicant / defendant no.6 is hereby declined.
Now to come up for filing of replication, if any,/settlement of issues on 19.04.2014.
Announced in the open court on 26.03.2014