The plaintiff, a Canadian company holding Indian Patent No.240893 for antennas used in telecommunications, filed a suit for permanent injunction alleging infringement by the defendants, including a South Korean manufacturer and its subsidiaries. The plaintiff argued that the defendants’ continued sales of allegedly infringing antennas threatened the enforceability of any decree due to their limited assets in India and the absence of a reciprocal arrangement for enforcing Indian judgments in South Korea.
Procedurally, an earlier interim order in July 2019 directed the defendants to deposit bank guarantees and sums equal to 10% of their sales. This was upheld by the Division Bench and the Supreme Court. Later, based on concerns over the financial deterioration of the defendants and risk of frustration of any future decree, the plaintiff filed the present application under Section 151 CPC, seeking an additional deposit equal to 25% of the claimed damages.
The dispute focused on whether the plaintiff was entitled to further security during the pendency of the suit, especially when the defendants had already deposited significant amounts earlier. The plaintiff stressed the risk of non-enforceability abroad and cited falling share value of defendant no.1, whereas the defendants argued they were financially stable, had already complied with previous orders, and no technical infringement had yet been proved.
In discussion, the Court analyzed the power under Section 151 CPC to protect the plaintiff’s interests when no other remedy is adequate, emphasizing that the plaintiff had established a prima facie case and balance of convenience. Relying on precedents like Deoraj v. State of Maharashtra (2004) 4 SCC 697, Nokia Technologies v. Guangdong Oppo Mobile Telecommunications Corp. Ltd., and M. Ramachandra Rao v. Varaprasad Rao, the Court held it was just to require further security to prevent the suit from becoming infructuous.
The Court ultimately directed the defendant no.1 to deposit, within four weeks, an additional amount equivalent to 25% of the claimed damages of Rs.1160 crores, amounting to Rs.290 crores, by way of bank guarantee or fixed deposit in the name of the Registrar General of the Court, besides amounts already deposited earlier.
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