Bombay High Court
Darius Rutton Kavasmaneck vs Gharda Chemicals Ltd. And 4 Ors on 6 February, 2023
Author: N. J. Jamadar
Bench: N. J. Jamadar
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION NO.2498 OF 2020
VISHAL AND
SUBHASH
PAREKAR CHAMBER SUMMONS NO.1507 OF 2016
Digitally signed by IN
VISHAL SUBHASH
PAREKAR SUIT NO.2932 OF 2011
Date: 2023.02.06
18:01:31 +0530
Darius Rutton Kavasmaneck ...Applicant
In the matter of
Darius Rutton Kavasmaneck ...Plaintiff
vs.
Gharda Chemicals Limited and Others ...Defendants
Mr. Mustafa Doctor, Senior Advocate a/w. Mr. Anirudh Hariani, Mr.
Mitesh Naik, Ms. Aastha Mehta i/b. Dhru & Co., for the Applicant/
Ori. Plaintiff.
Mr. Venkatesh Dhond, Senior Advocate a/w. Mr. Rohan Kelkar and
Mr. Chirag Dave i/b. Legasis Partners, for the Defendants.
CORAM : N. J. JAMADAR, J.
DATE : FEBRUARY 06, 2023
P.C.:
1. The plaintiff has preferred this application seeking
permission to amend the plaint with a view to incorporate
additional averments and prayers.
2. This is a derivative suit. The plaintiff is a share holder of
Gharda Chemicals Limited, defendant No. 1, a company
incorporated under the Companies Act, 1956. Defendant Nos. 2 to 4
are the Directors of defendant No. 1. Defendant No. 5 is a Chartered
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Accountant by profession and also on Board of Directors of
defendant No. 1.
3. The plaintiff avers the defendants, particularly defendant No.
2, have diverted valuable intellectual property of defendant No. 1
company for the personal benefit of defendant No. 2. It is, inter alia,
asserted that the defendant No. 2, by abusing his position as the
Chairman and Managing Director of defendant No. 1, was seeking to
claim ownership of inventions that were made by the funds,
resources and employees of defendant No. 1. The inventions which
otherwise belong to defendant No. 1 were permitted to be claimed
by defendant No. 2 as he was not only controlling the Board of
defendant No. 1 but also the preponderant majority shareholder.
Since the wrongdoer was himself in the control of the defendant No.
1 company, the suit was instituted as a derivative action for the
benefit of defendant No. 1 company and its shareholders.
4. The plaintiff further asserts defendant No. 2 had caused
defendant No. 1 to enter into an agreement dated 8 th August, 2013
whereby the defendant No. 1 was made to acknowledge and permit
defendant No. 2 to claim ownership of defendants' valuable know-
how/ patents/ intellectual property. The plaintiff filed Chamber
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Summons No. 1507 of 2016 to amend the plaint so as to assail the
said agreement.
5. In the instant application, the plaintiff claims that whilst the
suit and the Chamber Summons await adjudication, the defendant
No. 2 has yet again applied for and/or secured several additional
patents. Each of these patents/patent applications have been
created by using resources, assets and know-how of the defendant
No. 1 and belong absolutely to defendant No. 1. Defendant No. 2 is
merely a trustee and holds the aforesaid patents in trust for the
benefit of defendant No. 1 company. A list of additional patents/
patent applications is furnished in paragraph 3 of the application.
6. It is further averred that the defendant No. 2 has yet again
caused defendant No.1 to enter into a purported agreement dated
25th July, 2018 with defendant No. 2 incorporating the
objectionable clauses which are the subject matter of amendment
sought by the plaintiff in Chamber Summons No. 1507 of 2016. The
said agreement dated 25th July, 2018 not only permits defendant
No. 2 to compete with defendant No. 1 company but also to claim
ownership in respect of the inventions that otherwise legitimately
belong to defendant No. 1 company. Hence, this application to
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amend the plaint so as to assail the claim of absolute ownership
over the patents/ patents applications and the agreement dated 25th
July, 2018.
7. An affidavit in reply is filed on behalf of defendant No.1
company. At the outset, defendant No.1 contends that the
application has been preferred with a view to harass defendant Nos.
1 and 2 and constitutes an abuse of the process of law. It is actuated
by an ill design of creating impediment in the smooth functioning of
defendant No. 1 company. By the proposed amendment, according
to the defendant No. 1, the plaintiff seeks to introduce a new and
completely different cause of action. Since the plaintiff/applicant's
attempts to obtain injunction have been repelled by this Court and
Division Bench, the applicant has endeavoured to make a fresh
attempt to put hindrances in the smooth operations of the affairs of
the defendant No. 1 company. The application also suffers from
delay and laches. In any event, the challenge to the patents/ patent
applications is barred by limitation. Therefore, the application
deserves to be dismissed.
8. I have heard Mr. Mustafa Doctor, learned senior counsel for
the applicant/ original plaintiff and Mr. Venkatesh Dhond, learned
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senior counsel, for the Defendants. With the assistance of the
learned counsel for the parties, I have perused the original
pleadings, averments in the instant application, affidavit in reply
and rejoinder thereto.
9. Mr. Doctor submitted that by the proposed amendment the
plaintiff simply seeks to assail the patents/ patent applications over
which the defendant No. 2 unjustifiably claims ownership though
they belong to defendant No. 1 company. Derivative nature of the
suit does not change at all. Since the primary objection on behalf of
defendant is that the plaintiff is raising a distinct cause of action
which can form subject matter of a new suit, the amendment
deserves to be allowed as it would avoid the multiplicity of the
proceedings and promote the object of determining all the issues in
controversy between the parties. To lend support to this submission
Mr. Doctor placed reliance on the judgments of the Supreme Court
in the cases of Sampath Kumar vs. Ayyakannu and Another 1 and
Rajesh Kumar Aggarwal and Others vs. K.K.Modi and Others2.
10. Per contra, Mr. Dhond submitted that by the proposed
amendment the plaintiff is making an attempt to indirectly expand
1 (2002) 7 Supreme Court Cases 559.
2 (2006) 4 Supreme Court Cases 385.
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the scope of the suit by including the patents which the Supreme
Court, while upholding the order of the Division Bench rejecting the
interim relief, expressly permitted the defendant No. 2 to claim and
exploit. Mr. Dhond took the Court through the order passed by this
Court in Notice of Motion No. 3567 of 2011 dated 12 th December,
2014 rejecting the interim relief, the judgment of the appeal Bench
in Appeal No. 54 of 2015 wherein the challenge to the order passed
by this Court was negatived and the order of the Supreme Court in
Special Leave to Appeal (C) No(s). 16779 of 2015 dated 3rd August,
2015 to buttress the submission that the plaintiff can not be
permitted to expand the scope of challenge.
11. Mr. Dhond would further urge that the endeavour to assail the
patents/ patent applications enumerated in paragraph 4 of the
application cannot be countenanced as the challenge qua each of
those patents/ patent applications is wholly barred by limitation.
Therefore, the Court cannot permit the plaintiff to amend the plaint
so as to seek relief which is barred by limitation. It was further
submitted that in the event the Court is persuaded to allow the
amendment, the aspect of the bar of limitation deserves to be
clarified. To bolster up this submission, Mr. Dhond placed reliance
on a judgment of the Supreme Court in the case of L.C.
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Hanumanthappa (since dead) vs. H.B. Shivakumar3.
12. To start with, the observations of the Supreme Court in
Special Leave to Appeal (C) No(s). 16779 of 2015 dated 3rd August,
2015 deserve to be noted. They read as under:-
"Having heard learned counsel for the rival parties, we
are satisfied, that the proceedings before the High
Court should be permitted to reach its logical end,
without the rival parties in any way interfering with
the on going business of respondent No. 1.
It is therefore directed that insofar as the patents
depicted in annexure P-49 are concerned, respondent
no. 2 will not charge any royalty in respect thereof, on
account of the business activities of respondent No. 1.
Respondent No. 2 shall also stand restrained, from
transferring or creating any third party rights in the
afore-stated patents, during the pendency of the
proceedings, before the High Court. It is however
imperative to clarify, that the above direction shall not
be applicable to the patents depicted in annexure P-49,
which relate to subjects, not contained in the
prevailing objects of the company".
13. Mr. Dhond urged that in the last sentence the Supreme Court
has clarified that the directions in the preceding sentence shall not
be applicable to the patents depicted in annexure P-49, which relate
to subjects, not contained in the prevailing objects of the company.
By the present amendment, according to Mr. Dhond, the plaintiff
endeavores to mount a challenge to those patents over which the
Supreme Court has declined to place any restraint.
3 (2016) 1 Supreme Court Cases 332.
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14. Even if the interpretation sought to be put on the order of the
Supreme Court by Mr. Dhond is taken at par, I am afraid it would
preclude the plaintiff from seeking amendment to assail the said
patents. It would be a matter for adjudication as to whether any of
the patents over which the defendant No. 2 claims exclusive
ownership do or do not relate to the subjects which fall within the
objects of defendant No. 1 company.
15. In my view, what is of essence is whether the proposed
amendment changes the nature of the suit inexorably. As stated
above, the suit is stated to be a derivative action. Inclusion of the
challenge to the patents/ patent applications as enumerated in
paragraph 4 of the application, would not materially alter the
nature of the suit as it would amount to bringing within the ambit of
challenge more patents than originally assailed.
16. It is trite that all amendments which are necessary for the
determination of real question in controversy deserve to be allowed.
The Court ought to be alive to the consideration as to whether the
proposed amendment has the potential to cause such prejudice to
the opponent as cannot be compensated by costs or otherwise. In
the case at hand, applying these overarching principles, I find it
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difficult to accede to the submissions that the proposed amendment
either changes the nature of the suit or causes irretrievable
prejudice to the defendants. It is well neigh settled merits of the
proposed amendment are not to be delved into at this stage.
17. Mr. Dhond strenuously submitted that the challenge qua each
of the patents/ patent applications, included in paragraph 4 of the
application, would be barred by limitation. Therefore, on this count
alone, the application deserves to be dismissed.
18. It is imperative to note that in addition to the challenge to the
patents/patent applications, by way of amendment the plaintiff
proposes to also assail the legality and validity of the agreement
dated 25th July, 2018 to the extent the said agreement permits
defendant No. 2 to compete with the defendant No. 1 company and
claim ownership in respect of inventions which allegedly belong to
defendant No. 1 company. The proposed amendment, on the said
count, falls within the category of amendments necessitated by
subsequent events.
19. As enunciated in the judgment in the case of L.C.
Hanumanthappa (supra), the Court is empowered to direct that
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there will not be automatic relation-back of the amendment to the
date of the institution of the suit and the amended averments shall
be deemed to have been brought before the Court on the date on
which the application seeking the amendment was filed.
20. It would, therefore, in my view be appropriate to keep open
the issue of limitation. The defendants would thus have the liberty
to assail the challenge to the patents/patent applications
enumerated in paragraph 4 of the application as being barred by
limitation. Subject to aforesaid clarification, the application
deserves to be allowed.
Hence the following order.
ORDER
1] The application stands allowed in terms of prayer clause (a). 2] Necessary amendment in accordance with the Schedule of Amendment (Exhibit A) be carried out within a period of three weeks and amended copy of the plaint be served on the defendants within a period of three weeks thereafter.
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3] The defendants are at liberty to file an additional written
statement, post amendment of the plaint, within a period of 30 days of being served with the amended copy of the plaint. 4] It is clarified that the issue of limitation qua the averments to be incorporated by way of amendment is kept open for adjudication.
Application disposed.
(N. J. JAMADAR, J.)
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