*
IN THE
HIGH COURT OF DELHI AT NEW DELHI
Order
reserved on : 13.08.2018
Order
Pronounced on: 23.08.2018
+
FAO(OS) 309/2017, C.M. Appl. No. 44902/2017
M/S
AASHIANA ROLLING MILLS LTD
.....
Appellant
Through: Mr.Rajshekhar Rao, Mr. Kapil
Wadhwa,
Ms. Devyani Nath, and Ms.
Kaveri
Jain, Advocates
versus
M/S
KAMDHENU LTD
.....
Respondent
Through: Mr. Akhil Sibal, Senior Advocate
with Mr.
S.K. Bansal and Mr. Ajay
Amitabh
Suman, Mr. Nikhil Chawla,
Advocates
CORAM:
HON’BLE MR. JUSTICE S. RAVINDRA
BHAT HON’BLE MR. JUSTICE A. K. CHAWLA
JUDGMENT
%
S. RAVINDRA BHAT, J.
1.
This
appeal by the
defendant (hereafter referred
to as
“Aashiana”),
questioning the temporary ad-interim injunction
issued
by the learned Single Judge on 03.11.2017, in a suit by the
plaintiff/respondent
(hereafter “Kamdhenu”). Kamdhenu alleged that
Aashiana
had infringed its registered design in the sale of the latter‟s
FRIENDS
500 HD steel bars. Aashiana contended that Kamdhenu
could not
establish its registered design prima facie
to be novel and
FAO(OS) 309/2017 Page 1
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exclusive from the record so as to justify the impugned ad interim temporary injunction.
2.
Briefly, the case set up in the
suit is that the plaintiff manufactures and markets steel bars and other allied
goods under the name and trademark, Kamdhenu®. It also claimed that to
distinguish its TMT bars from the other bars in the market, it developed a
unique design with new and original features of surface pattern, comprising of
double ribs applied to 16 bars. This development took place in 2012. Kamdhenu
applied for registration under the Designs Act, 2000; its claim was accepted,
and the registration was granted in Class 25-01 with effect from 14.01.2013, by
certificate issued on 29.08.2014 by the Patents and Designs Controller General.
Kamdhenu applied the design to its product, known as SS 10,000 TMT, which it
claims is the best quality steel bar. This resulted in its „sole right to
utilize a design in an artistic manner‟ and use it for its products or adoption
of any identical or similar design.
3.
The suit alleged that Kamdhenu
became aware in the first week of June 2017 about the infringement by Aashiana,
when it came across
TMT bars and leaflets relating to the defendant‟s
goods bearing the trademark 'Friends 500 HD' in the markets of South Delhi. The
suit alleged that Aashiana applied and copied, adopted and imitated design
identical to Kamdhenu‟s registered design in Class 25.01 and its registered
trademark. It claimed that the surface pattern on the double ribs used and
applied to Aashiana‟s TMT bars was identical or substantially similar to its
design. These were an obvious imitation of
FAO(OS) 309/2017 Page 2
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the plaintiffs registered design and this use of
the design with the intention of imitating and using the plaintiffs registered
design was fraudulent and would amount to an infringement.
4.
At the stage of issue of summons,
the learned Single Judge also issued an ex
parte injunction order. Aashiana entered defense and urged that Kamdhenu had
played a fraud on the design office by misrepresenting itself as the owner and
originator of the designs in question. It pointed out that the design was
copied from British standard BS 4449: 2005 category B500 C. These documents,
according to Aashiana were suppressed by Kamdhenu. It asserted that the design
was used as a standard for reinforcement bars worldwide and was in force since
1984 and that such standard was adopted by several countries, including Germany
and the United Kingdom. Aashiana asserted that Kamdhenu could not enclose or
claim any monopoly rights over an impugned design, which was a mere replication
of the prevailing standard in respect of the goods.
5.
Aashiana argued that to comply
with the BS500C standard the manufacturer had to necessarily follow the
transverse rib arrangement depicted in the standard published in 1984.
According to Aashiana, Kamdhenu registered design was liable to be cancelled
under section
19
of the Design Act. Aashiana also
stated that it was in the business of manufacture and sale of steel bars,
including TMT bars, since 1998, in Gujarat; its articles are approved by the
standards organization-Bureau of Indian Standards (BIS) and that the impugned
articles were designed in June 2017 and Aashiana, thereafter, commenced their
trial
FAO(OS) 309/2017 Page 3
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production. Samples of those goods were sent to the
government approved labs for trial and testing purposes. Soon thereafter in
June 2017, shape and surface pattern of the impugned product was in terms of what
was prescribed by British standard BS for 49:2005 category D 500 C designs
which had existed in the public domain. They confirmed to the categorization of
reinforcing bars within the B500C standard. Aashiana complained that plaintiff
could not have secured registration under the Design Act. In fact, it copied
the design from the surface pattern proposed and laid out in the B500C class.
It stated that it was in the process of filing a cancellation petition before
the Controller of Designs in accordance with law.
6.
This defense evoked a replication by Kamdhenu which
besides
reiterating the plaintiff‟s stand in the suit, saw
Kamdhenu asserting that the design it obtained registration for was unique and
novel. Kamdhenu stated that it produced bars, with ribs inclined 48° and 65°,
being unique to it. It submits that the British Standards do not speak of this
particular degree (or incline of the ribs on the bars) and it was not mentioned
in the specific standard cited by the defendant or in BS 500C and relied upon
by it. It is stated that the allegations are to be seen in the context of the
fact that the exact same angles were copied by Aashiana which disclosed its
intention to imitate and infringe the plaintiff‟s registered design. It was
also highlighted that Aashiana‟s director was an ex-employee of the plaintiff.
The machine operator, who used to work for the plaintiff, has also now been
engaged by Aashiana to manufacture infringing goods.
FAO(OS) 309/2017 Page 4
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7.
The learned Single Judge while granting
the interim temporary injunction till final decision in the suit, reasoned as
follows:
“11. The plaintiff undoubtedly is the prior user of the design since 2013. As
per the defendant's admission, it started trial production of the impugned
steel bars only in June 2017. No substantial sales have been effected pursuant
to that. On the contrary, the plaintiff has pleaded sale of subject matter
products since 2013; its total sale for the year 2016-2017 was ` 8,377/- lacs. The total gross turnover of the plaintiff for the year
2016-2017 is ` 63,315/- lacs. The plaintiff has
also shown that huge sum of money was spent on the advertisement of the subject
matter. In 2016-2017,
` 27,50,292/- was spent on
advertisement expenses and ` 1,13,86,571/- was spent on sales promotion.
12.
The defendant has not placed on record any credible material at this
stage to infer if the impugned design has been copied by the plaintiff from the
British Standard BS 4449:2005 category B500C. The plaintiff has placed on
record the advertisement undertaken by the defendant for its products which is
identical to the plaintiff's design. In this advertisement, the defendant
claims that the design underneath the magnifying glass was its 'innovation'.
Apparently, the defendant cannot plead at this juncture that the impugned
design of which the plaintiff is the registered proprietor was in public domain
prior to 2013.
13.
The plaintiff has produced on record a report from Standard Testing
Laboratory (page 245, part III); it records that the sample described TMT 10 mm
"FRIENDS" did not conform to IS : 1786-08 for GR-Fe-500 with test No.
3, 4 & 5. Report dated 29.08.2017 (page 246, part III) given by Mr.
FAO(OS) 309/2017 Page 5
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Rajesh
Kant Chand Mishra, Assistant Professor observed : "on the basis of various
comparisons as studied and discussed in above paragraphs on support of
aforesaid figures and facts of this report, it has been concluded herein that
the design in FRIENDS' TMT Bars is the copy of the design in KAMDHENU's TMT
Bars."
14.
The plaintiff has also placed on record the document showing that one
Narendra, who is alleged to have shifted his employment with the defendant
presently, was machine operator with it in April, 2014. The plaintiff has
further claimed that earlier the defendant was its ex-licensee and was aware of
the impugned design to be replicated in its TMT bars. Photocopy of the Licence
User Agreement (page 233, part III) executed between the parties on 01.06.2008
has been placed on record.
15.
The impugned design has been protected by the plaintiff earlier also by
filing various suits and the Courts have given interim protection. This is so
apparent from the orders (pages 206 to 219) passed in CS/TM No. 78/2014 'M/s.
Kamdhenu Ispat Ltd. vs. Shri Sharma Steeltech (India) Pvt. Ltd. & Anr.'
confirmed by this Court in CS(COMM) 348/2016 'M/s. Kamdhenu Ispat Ltd. vs. Sh.
Sharma Steel Tech India Pvt. Ltd. & Anr.' and CS/TM No. 96/2016 'M/s.
Kamdhenu Ltd. vs.
M/s. Him Steel Private Limited' dated 14.12.2016.”
8.
Mr. Rajshekar Rao, learned
counsel for Aashiana, urges that the impugned order is in clear error in
concluding that the prima facie
strength
of the plaintiff‟s case has been established. He emphasized
that
registration of a design merely endorses that the applicant‟s claim
to novelty
was established before
the registering agency,
i.e the
FAO(OS) 309/2017 Page 6
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controller. That registration, however, at best was
a rebuttable presumption of novelty. Urging this court to vacate the impugned
order, Mr. Rao stated that Kamdhenu copied the design from the British Standard
BS 4449:2005 (category B500C) freely available in the public domain. It was
published in 2005. He also stated that the design is functional in nature and
is not a registrable design under Section 19(1)(d) of the Act. Aashiana was in
the process of filing a cancellation petition at the stage of the impugned
order. He highlighted that it was only in the replication, that the plaintiff
stated that the ribs were inclined 480 and 650. This too, according to Mr. Rao, did not lead to any inference of
novelty. As a part of the standards which indicated a range within which the
ribs of such bars could be manufactured, the manufacture and sale of the range
which the plaintiff had chosen to produce could not ipso facto lead one to conclude that Aashiana indulged in
infringement.
9.
It is argued that the impugned
design registration is invalid because of numerous prior publications placed on
record for more than
30
years prior to the date of
Kamdhenu's registration. It is stated that the impugned design is an Industry
Standard for reinforcement bars since 1984, prescribed by various
countries/organizations around the world such as Germany, Poland, ISO, etc. and
is thus in the public domain. Counsel stated that the surface pattern on the
impugned design is functional as it is imprinted for identification of a
specific Steel Grade by all TMT bars manufacturers and is part of an industry
practice.
Terming Kamdhenu‟s claim to be the originator/creator of
FAO(OS) 309/2017 Page 7
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the impugned design as false, it was submitted that
the plaintiff replicated the British Standard BS 4449:2005 category B500C
design and several other Industry Standards. He also submitted that the
impugned design registration does not claim any angle of the transverse ribs
and thus irrespective of which angles are used by Aashiana the impugned design
is invalid by reason of prior publication. Counsel highlighted that the
plaintiff concealed from the court the fact that impugned design has been in
the public domain since as early as 1984 and therefore it cannot claim monopoly
over it. Mr. Rao elaborated that the impugned design/surface pattern is also
functional inasmuch as the surface pattern enables the TMT bar to grip the concrete
used for reinforcing concrete structures and thus, not registrable as a Design
under Section 2(d) of the Designs Act, 2000.
10.
In fact, the sole purpose of this
Act is protection of the intellectual property right of the original design for
a period of ten years or whatever further period extendable. The object behind
this enactment is to benefit the person for his research and labour put in by
him to evolve the new and original design. This is the sole aim of enacting
this Act. It has also laid down that if design is not new or original or
published previously then such design should not be registered. It further lays
down that if it has been disclosed to the public anywhere in India or in any
other country by publication in tangible form or by use or in any other way
prior to the filing date, or where applicable, the priority date of the
application for registration then such design will not be registered or if it
is found that it is not
FAO(OS) 309/2017 Page 8
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significantly distinguishable from known designs or
combination of known designs, then such designs shall not be registered. It
also provides that registration can be cancelled under Section 19 of the Act if
proper application is filed before the competent authority i.e. the Controller
that the design has been previously registered in India or published in India
or in any other country prior to the date of registration, or that the design
is not a new or original design or that the design is not registerable under
this Act or that it is not a design as defined in Section 2 (d) of the Act.
Counsel relied on Bharat Glass Tube Limited vs. Gopal Glass Works Ltd. 2008
(10) SCC 657; Reckitt Benckiser India
Ltd. v. Wyeth Ltd. AIR 2013 Delhi 101 (FB); and Dart Industries Inc. And Another v. Techno Plast & Ors 2007
(35) PTC 129 (Del).
11.
Mr. Akhil Sibal, learned senior
counsel for Kamdhenu, urged this court not to interfere with a reasoned,
discretionary order injuncting pendente
lite, the appellant Aashiana from using the design used by it for the iron
bars, sold in the market by it, for which the plaintiff (Kamdhenu) is the
registered owner. Counsel relied on
Wander limited v. Antox India
(Pvt.) Limited 1990 (Supp) SCC 727 and urged that this court should desist
from setting aside a reasoned interim order in a pending suit.
12.
On the other aspects, urged on behalf of Kamdhenu,
Mr. Sibal
submitted that Kamdhenu‟s registered design is new, novel and original.
After applying for registration of the said design, it took steps for its
effective use and publication. Kamdhenu is using the registered
FAO(OS) 309/2017 Page 9
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design on its KAMDHENU SS 10000 TMT which is best quality steel bar.
After getting the Test Certificates from IIT Roorkee and Guru Nanak Dev
Engineering College, Punjab, Kamdhenu actively launched KAMDHENU SS 10000 TMT
bar bearing the said Design in the market on June 18, 2013. It was emphasized
that representation of KAMDHENU SS 10000 TMT bar bearing the said design is
distinctive and the defendant/Aashiana‟s use of an identical magnifying glass
to highlight sections of the bar, betrays its intent to copy Kamdhenu‟s product
and represent it as its own.
13.
Mr. Sibal, learned senior
advocate argued that the KAMDHENU design is not identical to any design
available in the public domain; he has asserted that in fact it is new and
original. It was submitted that the Aashiana‟s allegations with respect to
fraudulent and dishonest adoption, of the design is
baseless. Elaborating, it is urged that the plaintiff‟s subject design is quite
distinct from the designs and standards that Aashiana relies upon. Emphasizing
that essentially what Aashiana did was to merely imitate the two sets of ribs
at the identical incline i.e. 480 – which is not mentioned specifically in any standard, it in effect
indulged in infringement. Learned senior counsel also highlighted that the
exact reflection of the distinctive magnifying glass design and the striking
similarity between the two products in their visual representation leads one to
conclude that Aashiana blatantly imitated the plaintiff/KAMDHENU products and
the resultant confusion would inevitably be at the economic expenses of
KAMDHENU. Learned
FAO(OS) 309/2017 Page 10
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counsel also submitted that since Aashiana traded only in Gujarat and has
not substantiated its submission with respect to the existence of any market,
the balance of convenience was with the plaintiff and was correctly held as
such by the learned Single Judge.
14.
It is argued
further that Aashiana‟s
submission that the
plaintiff‟s design could not be registered because it related to
functionality, is unacceptable. Learned counsel relied upon Mohan Lal, Proprietor of Mourya Industries vs. Sona Paint & Hardwares, 2013
(55) PTC 61 (Del) (FB) and Whirlpool of
India Ltd. vs. Videocon Industries
Ltd., 2014 (60) PTC 155 (Bom). It was emphasized that in order for the defence of functionality
to succeed, the design applied for has to be the only mode or option available
given the functional requirement and inherit limitation of the article or the
product. It was submitted that the courts have recognized that there may be
cases where the design while fulfilling
the novelty standard is also functional.
In such cases, the complexity is resolved by noting that the function can be performed
by another shape as well, without in any manner defeating the novelty claimed.
Analysis
and Conclusions
15.
The above discussion would reveal
that the appellant/ Aashiana essentially urges that the product i.e., Steel
Rods (used in the construction industry) over which Kamdhenu predominantly
claimed and was granted design registration on 29.08.2014 is neither unique nor
novel and that rather it is a mere reproduction of a standard design
FAO(OS) 309/2017 Page 11
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that has been in the public domain since 1984. It is also brought to
notice that the question of imitation of the technical and the so called
reproduction of the inclines of transverse ribs (i.e. rib pattern) was never
highlighted. Aashiana also complains that Kamdhenu suppressed the relevant
facts relating to the applicable standards.
16.
Aashiana, the defendant has
relied upon several documents, which were part of the record before the learned
Single Judge, which suggests the angular arrangement of ribs within the
particular range. These standards were revised in 2005 (evident from British
Standards BS 4449:2005). Aashiana relies upon Figure 4 i.e. an example of rib
pattern of Grade B-50 C. The relevant extract of the concerned rib patterns
(including figures 2, 3 and 4) are as follows:
B500B consists of two or more
series of parallel transverse ribs and each series is at a contrary angle to
the others. The BIS reproduced them as illustrations in the following terms:
FAO(OS) 309/2017 Page 12
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B500C consists of transverse ribs
in the pattern of series as defined in B500B but the transverse ribs are
arranged in an angle to each other as illustrated below:
17.
Aashiana has produced similar
standards (International standards – ISO 6935-2:2007 (E) which deals with
similar ribbed bars/rods. Likewise, Turkish and Polish standards have been
relied upon. Aashiana‟s arguments in this regard are that these standards have
been in existence and pre-date the claim of novelty put forward by Kamdhenu. In
this regard, it relies upon certain decisions, notably;
Bharat
Glass Limited Tube Limited vs. Gopal Glass Works Ltd., AIR 2008 SC 2520, which
emphasized that if a design is not new or original or has been previously
published, then it should not be registered. The judgment of this court in Niky Tasha India (P) Ltd vs. Faridabad Gadget Pvt. Ltd., AIR 1985 Del
136 has ruled that registration of a
design is only “a prima facie evidence” of proprietorship and novelty.
Likewise, as to what constitutes novelty – in the context of previous
publication or previously used articles-was dealt with in B. Chawla and sons vs. Bright Auto Industries, AIR 1981
FAO(OS) 309/2017 Page 13
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Del 95.
The court held that little variation in products which existed
such as
adding a curve here or there in the shape of a well recognized
shape of
an article of common use in the market does not make it a
new or
original design.
18.
Paras 3-97, 3-98 and 3-99 of Russell-Clarke and Howe on Industrial Designs (Seventh Edition
Sweet & Maxwell) which dealt with
what constitutes prior publication reads as follows:
“3-97
What counts as “published” for the purpose of calling into question the novelty
of a later design registration? This is broader than the word at first suggests.
It by no means limited to the publishing of a design in a printed publication,
although it includes that. In practical terms, there are two main ways in which
a design can be published: by prior use of the design, by selling or displaying
to the public articles to which the design has been applied; and by paper
publications of one sort or another. It is not, in fact, necessary that
publication should be on paper; an oral disclosure, provided it is
non-confidential, will amount to publication.
3-98 In general, the law as to
what constitutes a prior publication for registered design purposes is that
same as the law of prior publication under the pre-1977 patent authorities on
the subject have consistently been treated as applicable to registered design
cases.
3-99 In order to be relied upon
for the purpose of attacking the novelty of a pre-2001 design registration, the
publication concerned must be within the United
Kingdom. This limitation has
important practical consequences.”
FAO(OS) 309/2017 Page 14
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19.
In the present case, the suit
nowhere discloses – nor does the plaintiff/ Kamdhenu appear to have stated in
its pleadings or in the documents filed before the court that the rods/ bars
for which the registration was sought conformed to any particular standard at
all. It is a matter of record that Aashiana averred to that the standard
universally accepted and applied routinely by all manufacturers of the product
had existed for almost three decades. It relied upon the last British Standards
published in 2005, especially B500C. B500 C refers to B500 B (Figure 3). B500B
while adverting to B500A states that the bars would have two or more parallel
transverse ribs. It thus, states that for bars with two or three rib series “one of the series shall be
contrary angle to the other and
for bars with 4 ribs series, two of the series shall be at contrary angle”. The B500C standard states that the
bars for this particular standard would have the same arrangement of rib
series as for B500B and then provides that “Further
in each rib series, the ribs shall
alternate between a higher and lower angle with respect to the bar excess. The
difference between the angles of the different ribs and the bar excess shall be
at least 100”.
20.
During the submissions, it was pointed
out by Aashiana that the bars necessarily had to be diagonal by at least 450 or more else that would end up
as parallel rib patterns and not serve the purpose intended. If that is taken
into account, the standard indicates a limited range of possibilities for the
ribbing of the bars. For instance, if a ribbing at one surface is at 500, the other would have to be at
least at
600
. In this
range, thus, there are limited options available to the
FAO(OS) 309/2017 Page 15
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manufacturer. Furthermore, these ribs would
necessarily have to reflect a familiar pattern that the customers would choose,
having regard to the peculiarity of the product. In these circumstances, the
arguments that its adoption of 480 and 650 for the two transverse ribbing patterns, were unique and cannot be
accepted. They merely reflected common standards – available in the public
domain and applicable to the concerned product i.e. bars. As regards the
contention that even though the products conformed to a known standard, they
satisfied the test of novelty and uniqueness, is concerned, prima facie, this court is unpersuaded
by the plaintiff‟s contention. The design (i.e. set of transverse ribs) is a
part of known standards that are applicable and accepted by the industry and the
manufacturers are familiar with this. Moreover, the range of possibilities, i.e
the limits of angularity of the ribs (given they are to be transverse and at
least 100 apart) restrict the choices to an even greater extent. In these
circumstances, this court holds that despite
functionality, no distinct feature that can claim novelty was revealed,
deserving design registration. This observation is prima facie and meant for the purpose of this judgment; all rights
of parties to deal with it in the suit, are kept open.
21.
The learned Single Judge, with
respect to this, completely overlooked these salient aspects. In other words, a
commonly applicable standard available in the public domain, used by the
plaintiff – Kamdhenu to claim monopoly registration right, could not have been
suppressed from the court or from the Controller. The
FAO(OS) 309/2017 Page 16
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registration of the design thus was suspect. This court does not wish to
say anything further given that proceedings for cancellation of the registration
are said to have been taken out.
22.
As far as the visual
representation of the product (use of magnifying glass device) is concerned,
this court notices that Kamdhenu‟s suit is predicated on design infringement.
It does not urge passing off nor claims any relief in that regard. Likewise,
the fact that Aashiana or someone connected with it was an ex-licensee of the
plaintiff, cannot in any manner be a material factor to grant injunction since
issues in respect of confidentiality do not appear to have been pleaded.
Likewise, the allegation that a particular manufacturer who performed job work
for Kamdhenu did so for Aashiana, is also of no relevance.
23.
The only issue that the learned Single Judge dwelt
upon and
pronounced to be the basis of the plaintiff‟s prima
facie strength, on the merits of the case, was that of infringement based upon
registration. Given that the relevant and material circumstances with respect
to prior publication were not taken into account and analysed in the proper
perspective, this court is of the opinion that the observations with respect to
the existence of prima facie case cannot be upheld. They are hereby set aside.
24.
In view of the above findings,
the I.A. No. 12872/2017 in CS (OS) No.360/2017 is dismissed and the impugned
order thereby
FAO(OS) 309/2017 Page 17
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granting injunction to the plaintiff/Kamdhenu is hereby set aside. The
appeal is allowed in the above terms.
S.
RAVINDRA BHAT, J
A. K.
CHAWLA, J
AUGUST 23, 2018
pkb
FAO(OS) 309/2017 Page 18
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