Bdr Pharmaceuticals Vs Kudos Pharmaceuticals

Post Expiration of Suit Patent, No Relief of Injunction Can Be Granted in Patent Infringement Suit

Background of the Case:

In the case presented before the High Court of Delhi, BDR Pharmaceuticals International Pvt Ltd ("BDR") and Kudos Pharmaceuticals Limited ("Kudos") were embroiled in a dispute over the patent rights to the compound Olaparib, a prominent cancer treatment drug marketed under the brand name "LYNPARZA". The subject of the lawsuit was Indian Patent No. IN 2287201 (referred to as IN’720), which covered the Olaparib compound.

When the suit was filed, the patent was nearing its expiration date, which introduced significant urgency and complexity to the proceedings. Kudos, as the patent holder, sought to protect its exclusive rights in the period leading up to the expiration, while BDR, the alleged infringer, had already launched a product containing Olaparib into the Indian market. The dispute over these rights raised questions about the scope of remedies available post-expiration, specifically concerning the injunctive relief sought by Kudos to halt BDR's sale of Olaparib-containing products.

Issue of the Case:

The central issue before the court was whether Kudos was entitled to an interim injunction to prevent BDR from continuing to deal in products containing Olaparib, despite the fact that the suit patent (IN'720) was on the verge of expiration. Kudos also sought an order compelling BDR to deposit all revenues earned from the manufacture and sale of Olaparib in India with the court, covering the period from BDR's first launch until the patent expired.

This case posed an important question for patent law: could an injunction be granted in respect of a patent that was about to expire, and could the court order financial restitution even after the expiration of the patent? Additionally, the broader legal implications involved the interpretation of fundamental patent law principles, such as the differentiation between patent "coverage" and "disclosure"—issues that extend beyond the immediate life of the patent.

Contentions of the Parties:

Kudos Pharmaceuticals’ Contentions:

Kudos Pharmaceuticals argued that BDR had acted improperly by launching its Olaparib product before the expiration of the IN'720 patent. Kudos claimed that this action constituted patent infringement and should result in injunctive relief, irrespective of the patent's imminent expiration.

Their key arguments included:

Broader Legal Questions: Kudos stressed that the case involved significant legal questions related to patent law, particularly the difference between "coverage" (the scope of claims) and "disclosure" (the information made available in the patent specification). They urged the court to adjudicate on these matters, arguing that the outcome would have broader implications for future patent jurisprudence.

Sales Revenue Deposit: In addition to the injunction, Kudos sought a direction from the court that BDR deposit all revenues earned from the sale of Olaparib into the court's registry. This deposit was seen as a precautionary remedy to safeguard Kudos' financial interests pending the final adjudication of the case.

Continuing the Proceedings: Kudos argued that the court should continue to adjudicate the injunction application even though the patent was nearing expiration, citing the importance of addressing misconduct and protecting their commercial interests during the residual period of the patent.

BDR Pharmaceuticals’ Contentions:

BDR Pharmaceuticals took the position that an injunction could not be granted once the patent had expired, as there would be no legal basis to prevent the continued sale of their Olaparib product once the exclusive rights conferred by the patent ceased to exist.

Their key arguments included:

Futility of Injunction Post-Expiration: BDR argued that an injunction would serve no purpose since the patent was on the verge of expiring, and once expired, Kudos would have no right to exclude them or any other competitor from selling the Olaparib product.

No Misconduct: BDR denied any misconduct, maintaining that they had complied with the legal requirements and had launched their product lawfully in accordance with Indian patent law. They contended that any deposit of sales revenue should only be ordered if they were found liable for infringement after a full trial.

Pending Appeal: BDR further argued that the matter was already the subject of an appeal before the Division Bench, which would ultimately resolve the issues between the parties. As such, the continuation of the injunction proceedings in the trial court was unnecessary and would only prolong litigation without substantive benefit.

The High Court was faced with several critical issues:

The Right to Injunction Post-Patent Expiration: Could Kudos still seek an injunction to stop BDR from dealing in the patented product when the patent was only days away from expiring? This question hinged on whether the right to exclude others from using a patented invention remained enforceable through injunctions once the patent expired.

Coverage vs. Disclosure in Patent Law: The case involved nuanced legal questions about how the claims of a patent (coverage) should be interpreted in light of the technical information disclosed in the patent specification (disclosure). This distinction is critical in patent law and influences how broadly a patent can be enforced.

The Request for Revenue Deposit: The court had to decide whether BDR should be ordered to deposit its sales revenues from Olaparib into the court’s registry as a form of financial security pending the outcome of the trial. The question here was whether this was an appropriate remedy, given that the patent was expiring imminently.

Urgency of the Matter: Given the imminent expiration of the patent, the court had to determine whether there was sufficient urgency to continue hearing the injunction application or whether the focus should shift to other forms of relief, such as damages or an account of profits.

Reasoning and Final Decision:

The court, after careful consideration of the issues, made the following observations:

No Injunction Post-Expiration: The court recognized that once a patent expires, the right of exclusivity granted to the patent holder is extinguished. This means that any ongoing sale or use of the patented invention after expiration does not constitute infringement, as the product enters the public domain. Since the IN’720 patent had expired by the time the case was being heard, the court held that it was legally impossible to grant injunctive relief against BDR to stop the sale of Olaparib-containing products.

Coverage vs. Disclosure: While the court acknowledged the importance of the issues surrounding patent coverage and disclosure, it concluded that these questions were academic in this case due to the patent's expiration. However, it noted that these issues could still be explored during the full trial, particularly when assessing any claims for damages or profits earned prior to expiration.

Revenue Deposit: The court rejected Kudos’ request for BDR to deposit its revenues from the sale of Olaparib into the court's registry. The court noted that any remedy in the form of monetary compensation, such as damages or an account of profits, would be appropriately decided after the trial concluded, once liability was determined.

Appeal Proceedings: Given that an appeal was pending before the Division Bench on a related issue, the court refrained from taking any further substantive steps in the matter. It deferred to the Division Bench’s ultimate resolution of the issues between the parties.

In light of these findings, the court dismissed the injunction application, holding that no injunction could be granted post-expiration of the patent. The case was set to proceed to trial for the determination of damages or other monetary remedies, if any.

Conclusion:

This case reaffirms the legal principle that injunctive relief is tied to the existence of an enforceable right, which, in patent law, ceases to exist once the patent expires. After expiration, patent holders are no longer entitled to prevent others from using or selling the patented invention. However, the court can still adjudicate on claims for damages or an account of profits for infringing activities that occurred before expiration.

Case Citation: Bdr Pharmaceuticals Vs Kudos Pharmaceuticals: 25.09.2024: Co Comm IPD PAT 1 of 2024:Delhi High Court:Sanjeev Narula, H.J.

Written by: Advocate Ajay Amitabh Suman

IP Adjutor [Patent and Trademark Attorney] United & United

Email: amitabh@unitedandunited.com, Phone: 9990389539

Disclaimer:

The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Keshav Kumar Ratwani Vs Rohit Kumar Dhaka

Stay of copyright registration during pendency of Copyright Cancellation proceeding

Background of the Case:

The case Keshav Kumar Ratwani vs. Rohit Kumar Dhaka is being adjudicated in the High Court of Delhi, New Delhi, and centers on a significant dispute regarding artistic artwork and trademark registrations. The petitioner, Keshav Kumar Ratwani, asserts his rights over an artistic label that he claims is unique and has been in use since 2015. This case exemplifies the complexities inherent in intellectual property law, particularly in the overlapping realms of copyright and trademark rights.

The dispute escalated as the petitioner discovered that the respondents, led by Rohit Kumar Dhaka, had been using an artistic label similar to his registered label. This situation raises essential questions about copyright infringement, the validity of trademark registrations, and the implications of artistic similarities in the marketplace. The petitioner contends that the unauthorized use of a similar label not only infringes upon his copyright but also creates a substantial likelihood of confusion among consumers, leading to reputational damage and financial losses.

Issue of the Case:

At the core of this case lies the issue of alleged infringement of the petitioner’s artistic label and trademark by the respondents. The primary legal question is whether the respondents’ usage of an artistic label, which the petitioner claims is identical or deceptively similar to his own, constitutes an infringement that merits legal redress. The petitioner argues that this infringement creates confusion in the marketplace, which could lead to potential loss of business and erosion of brand value.

In addition to the claim of infringement, the case involves procedural questions surrounding the respondents' attempts to register their own trademark. The petitioner asserts that this new trademark application is unduly similar to his existing label, raising concerns over the integrity of the trademark registry and the protection of creative works under intellectual property law.

Contentions of the Parties:

Longstanding Use: The petitioner asserts that he has utilized the artistic label since 2015, establishing goodwill and recognition in the market.

Copyright Registration: He emphasizes that he is the registered proprietor of the copyright for the artistic label, thereby asserting a legal claim over the exclusive rights to its use.

Infringement and Damages: Ratwani alleges that the respondents’ actions in using a similar label infringe on his copyright, causing irreparable harm to his business and brand reputation.

Issues Dealt with by the Court:

The High Court has confronted several critical issues throughout the proceedings:

Validity of Copyright Claim: The court examined the merits of the petitioner’s copyright claim, questioning whether the artistic label qualifies for copyright protection under the prevailing legal framework.

Similarity of Artistic Labels: A key consideration for the court has been the degree of similarity between the petitioner’s and respondents’ artistic labels. This assessment is crucial in determining the likelihood of confusion among consumers.

Allegations of Bad Faith: The court examined the respondents’ intentions behind their trademark application and whether any bad faith could be inferred from their actions.

Reason and Final Decision:

While the court has yet to render a final decision on the merits of the case, it has taken significant preliminary steps in addressing the concerns raised. In light of the arguments presented and the ongoing legal complexities, the court has ordered a stay on the registration of the impugned copyright granted in favor of respondent no. 1. This stay serves to preserve the status quo while the court assesses the validity of the parties’ claims and the implications for copyright and trademark law.

The decision to impose a stay reflects the court's recognition of the potential risks involved in allowing the registration to proceed amidst ongoing rectification proceedings. By halting the registration process, the court aims to prevent further marketplace confusion and protect the rights of the petitioner while the underlying issues are thoroughly examined.

Conclusion:

The case of Keshav Kumar Ratwani vs. Rohit Kumar Dhaka underscores the intricate interplay between copyright and trademark law, particularly in the realm of artistic works. As the High Court navigates the complexities of copyright claims, trademark registrations, and market confusion, the outcome of this case will likely have significant implications for similar disputes in the future. The stay on copyright registration emphasizes the importance of protecting creative works and ensuring that disputes are resolved with due diligence and respect for intellectual property rights.

Case Citation: Keshav Kumar Ratwani Vs Rohit Kumar Dhaka: 13.09.2024: Co Comm IPD CR 20 of 2024:Delhi High Court:Mini Pushkarna, H.J.

Written by: Advocate Ajay Amitabh Suman

IP Adjutor [Patent and Trademark Attorney] United & United

Email: amitabh@unitedandunited.com, Phone: 9990389539

Disclaimer:

The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Sri Laxmi Balaji Industries Vs MS. Lakshmi Venkateshwar

Trademark Rectification and Stay of Proceedings

Background of the Case:

The case of Sri Laxmi Balaji Industries vs. MS. Lakshmi Venkateshwar Rice Industries is a significant trademark dispute, brought before the High Court under Articles 226 and 227 of the Constitution of India. The petitioners, Sri Laxmi Balaji Industries, are challenging an order passed by the Principal District Judge at Bellary on 30/03/2013, which dismissed their application for a stay of further proceedings in Original Suit No. 3/2012 (O.S.No.3/2012). This application, filed under Section 124 of the Trademarks Act, 1999, relates to the rectification of the trademark register.

The petitioners sought a stay of the ongoing suit, pending the outcome of rectification proceedings that they had initiated, which would determine the validity of the respondent's trademark registration. Section 124 of the Act provides a mechanism where courts can stay trademark infringement suits if rectification proceedings are already pending before the appropriate forum. The crux of the matter lies in whether the dismissal of the stay application by the Trial Court was legally sound.

Issue of the Case:

The primary issue for consideration is whether the Trial Court erred in rejecting the stay application filed by Sri Laxmi Balaji Industries under Section 124 of the Trademarks Act. The petitioners argue that the court should have stayed the proceedings in the trademark infringement suit while the rectification proceedings—challenging the validity of the respondent’s trademark—were still pending before the appropriate authority.

In essence, the case examines whether the trial court correctly interpreted Section 124, including its provisos, and whether it was justified in dismissing the stay application on the grounds that the rectification application was filed belatedly.

Contentions of the Parties:

Petitioners (Sri Laxmi Balaji Industries):

Sri Laxmi Balaji Industries contends that the Trial Court committed an error by dismissing their stay application without properly considering the principles of law laid down in Patel Field Marshal Agencies and other relevant judgments. They argue that their rectification application, filed on 24.07.2012, was prematurely dismissed, as it was filed before the appropriate forum in accordance with Section 124. The petitioners also claim that the Trial Court failed to interpret Section 124 in its entirety, particularly ignoring the proviso, which mandates that proceedings should be stayed when the rectification application is pending.

According to the petitioners, the Trial Court should have stayed the infringement suit pending the outcome of the rectification process, as it directly impacts the validity of the trademark at the center of the dispute. They assert that by allowing the suit to proceed, the court exposed them to potential legal and commercial consequences before the rectification issue was conclusively resolved.

Respondents (MS. Lakshmi Venkateshwar Rice Industries):

The respondents argue that the petitioners filed the rectification application at a belated stage, making it ineligible for consideration under Section 124. They contend that the Trial Court’s decision to dismiss the stay application was justified, as the petitioners failed to raise the issue of trademark validity at the appropriate time during the proceedings. The respondents maintain that the delay in filing the rectification application cannot be excused, and allowing a stay at this stage would unjustly prolong the litigation.

The respondents also argue that there was no error in the Trial Court’s interpretation of Section 124. They assert that the petitioners did not follow the procedural requirements for invoking Section 124 properly, and thus, the application for stay was rightly dismissed.

Issues Dealt with by the Court:

Interpretation of Section 124: Whether the Trial Court correctly interpreted and applied Section 124 of the Trademarks Act in dismissing the stay application. Specifically, the court must assess whether the proviso to Section 124 mandates a stay of the infringement suit when rectification proceedings are pending.

Timeliness of the Rectification Application: Whether the rectification application filed by Sri Laxmi Balaji Industries was timely or belated, and whether the timing affects the validity of their request for a stay.

Judicial Precedents: The court must consider relevant legal precedents, including the Patel Field Marshal Agencies case, to ascertain the proper approach to handling rectification proceedings in the context of ongoing trademark infringement suits.

Reasoning and Final Decision:

The court carefully interpreted the provisions of Section 124, focusing on whether the Trial Court erred in its legal reasoning when it refused to stay the infringement suit. The court found that the rectification application was timely filed and that the Trial Court misapplied Section 124, it may quash the order and direct the stay of proceedings pending the outcome of the rectification process. The High Court set aside the Trial Court’s decision on the ground that that the petitioners raised a legitimate challenge to the validity of the respondent's trademark in accordance with established legal principles.

Case Citation: Sri Laxmi Balaji Industries Vs MS. Lakshmi Venkateshwar: 13.09.2024: 77807 OF 2013 : 2024:KHC-D:13121: Karnatak High Court: Dharwad Bench: H.P.Sandesh, H.J.

Written by: Advocate Ajay Amitabh Suman

IP Adjutor [Patent and Trademark Attorney] United & United

Email: amitabh@unitedandunited.com, Phone: 9990389539

Disclaimer:

The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Renu Bajaj Vs Consilium Automation

Single Trial for Affiliate Companies

Background of the Case:

The case of Renu Bajaj & Anr. v. Consilium Automation & Fire Protection Ltd. & Ors. was brought before the High Court of Delhi, focusing on a commercial dispute involving the supply of materials by the appellants, Renu Bajaj and others, to various entities allegedly belonging to the Consilium Group of Companies. The appellants are suppliers of pipes, pipe fittings, hardware, and other allied items. They claim that they had supplied these materials to the respondents, which included different companies affiliated with the Consilium Group, and had issued invoices to various group entities at the respondents' request for accounting purposes. The appellants argued that all transactions were conducted under the representation of a common agent for the respondents.

The appellants approached the High Court after a decision of the lower court, seeking clarity on whether the respondents, a group of companies, could be treated as a single entity for the purposes of the suit, or if each company was to be treated as separate legal entities.

Issue of the Case:

The central issue in this case was whether the respondents were part of a single, cohesive group of companies, as claimed by the appellants, or if each respondent functioned as an independent legal entity. The resolution of this issue was critical in determining the structure of the legal proceedings. If the respondents were indeed part of the same group, a joint trial would be appropriate; however, if they were separate, each respondent would be entitled to independent legal proceedings.

This issue also involved determining the applicability of Order I Rule 3A of the Code of Civil Procedure, 1908 (CPC), which governs the joinder of defendants and whether such joinder would cause delays or complications in the trial.

Contentions of the Parties:

Appellants' Contentions:

The appellants argued that all the respondents were part of the Consilium Group and that they had dealt with them collectively. They claimed that they had raised invoices on different affiliate companies at the request of the respondents, purely for accounting purposes, and that the underlying transactions were part of a unified business relationship. The appellants further contended that requiring separate trials for each respondent would lead to the same evidence being presented multiple times, resulting in delays and inefficiencies in the judicial process.

Respondents' Contentions:

On the other hand, the respondents, through their legal counsel, disputed the appellants' claims. They argued that each of the companies named in the suit was a separate legal entity, independent of the others. They asserted that the appellants’ assumption that the respondents were part of a group was factually incorrect and that the case against them was based on a flawed premise. As such, they argued that the suit could not be sustained against all respondents collectively and that each respondent should be entitled to separate legal proceedings.

Issues Dealt with by the Court:

The court had to address two primary issues:

Joinder of Defendants under Order I Rule 3A of CPC:

The court was tasked with determining whether the joinder of the respondents as defendants would embarrass or delay the trial of the suit. This rule is designed to prevent unnecessary complications in legal proceedings where multiple defendants are joined inappropriately.

Ambiguity in the Plaint:

The court also had to address certain ambiguities in the plaint, particularly the references to the "defendant" and the "defendant company." It was necessary to determine whether these references collectively referred to all respondents or only to individual companies. The court had to clarify whether the appellants had established a sufficient basis to treat the respondents as a group for legal purposes.

Reasoning and Final Decision:

The High Court, after carefully considering the arguments and the legal framework, ruled in favor of the appellants. The court observed that the appellants had dealt with the respondents collectively through a common representative and that the invoices were raised against different affiliate companies purely for accounting convenience. The court found no substantive grounds to believe that the joinder of the respondents would embarrass or delay the trial of the suit.

The court further noted that the factual matrix of the case indicated that a single trial would be the most efficient way to resolve the dispute, as separate trials would result in the same evidence being led multiple times, thus prolonging the litigation unnecessarily. Additionally, the court pointed out that the appellants had sufficiently established that the respondents operated as part of a unified group for the purposes of their business dealings with the appellants, justifying the joint trial.

As a result, the High Court allowed the appeal, set aside the impugned order of the lower court, and restored the appellants' suit to be heard before the learned Commercial Court. The court directed the parties to appear before the District Judge for further proceedings on 11.09.2024, ensuring that all rights and contentions of the parties were preserved for trial.

The court’s decision underscored the importance of judicial efficiency and fairness, particularly in commercial disputes where the involvement of multiple related entities can complicate proceedings. By allowing a single trial, the court sought to streamline the resolution of the case while ensuring that all parties had the opportunity to fully present their case.

Case Citation: Renu Bajaj Vs Consilium Automation: 28.08.2024: FAO (COMM) 258/2023: 22024:DHC6576: Delhi High Court: Vibhu Bakhru and Tara Vitasta Ganju, H.J.

Written by: Advocate Ajay Amitabh Suman

IP Adjutor [Patent and Trademark Attorney] United & United

Email: amitabh@unitedandunited.com, Phone: 9990389539

Disclaimer:

The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Rasayanam Enterprises Vs Upakarma Ayurveda Pvt Ltd

Trademark Infringement and Passing Off in Ayurvedic Packaging

Background of the Case:

The case of Rasayanam Enterprises vs. Upakarma Ayurveda Pvt. Ltd. was heard before the High Court of Delhi and revolves around a dispute concerning trademark infringement and passing off. Rasayanam Enterprises (the Appellant) and Upakarma Ayurveda Pvt. Ltd. (the Respondent) are two companies involved in the sale of Ayurvedic products. The Appellant challenged an interim order that restrained them from using packaging that the Respondent claimed was deceptively similar to their own. The Respondent alleged that the Appellant’s packaging design was confusingly close to theirs, thereby infringing on their trademark rights and leading to passing off.

Issue of the Case:

At the heart of the dispute was the question of whether Rasayanam Enterprises' packaging infringed on Upakarma Ayurveda’s trademark rights or amounted to passing off. Rasayanam Enterprises argued that they had made sufficient alterations to their packaging to distinguish it from Upakarma’s, particularly in terms of color schemes and design elements. They contended that the beige color used by both parties was not distinctive enough to confer exclusivity and hence did not constitute infringement. In contrast, Upakarma Ayurveda maintained that despite the Appellant's changes, the packaging remained deceptively similar, causing a likelihood of consumer confusion.

Contentions of the Parties:

Appellant’s Contentions: Rasayanam Enterprises argued that they held a registered trademark for their new packaging, which incorporated changes sufficient to differentiate it from the Respondent's design. They claimed there was no monopoly over the use of the beige color and that their packaging did not infringe upon the Respondent’s trademark. Moreover, they asserted that the changes made were in good faith and effectively negated the chance of confusion in the marketplace.

Respondent’s Contentions: Upakarma Ayurveda countered that the Appellant’s packaging remained deceptively similar despite the changes. They argued that the alterations were superficial and done with mala fide intent to circumvent the earlier injunction order. According to the Respondent, the Appellant’s adoption of a similar brown packaging was aimed at capitalizing on the goodwill and reputation of their products, thereby misleading consumers.

The key issues addressed by the court were:

Whether the Appellant’s new packaging, particularly for their 10 gm and 20 gm products, infringed upon the Respondent’s trademark.

Whether the similarities in the packaging constituted passing off by creating confusion among consumers.

The principles governing the grant of interim relief, especially considering the likelihood of confusion and the balance of convenience between the parties during the pendency of the suit.

Reasoning and Final Decision:

After a thorough examination of the new packaging designs and applying the relevant legal principles of trademark infringement and passing off, the court reached the following conclusions:

For the 10 gm product, the court found that the changes made by the Appellant were sufficient to avoid consumer confusion. The court determined that the overall commercial impression created by the packaging was distinct enough, thereby justifying the use of the packaging by Rasayanam Enterprises.

For the 20 gm product, however, the court ruled that the packaging remained deceptively similar to the Respondent’s design. The court upheld the Single Judge’s findings that the changes were inadequate, and the likelihood of confusion persisted.

In dismissing the appeal, the court emphasized that its findings were made within the context of interim relief, and the final determination of the case would depend on the trial's outcome. The court’s decision was grounded in the principle that trademark disputes should focus on the overall commercial impression of the packaging from the perspective of an average consumer with imperfect recollection. Consequently, the injunction against Rasayanam Enterprises for their 20 gm product was upheld, protecting Upakarma Ayurveda’s trademark rights in the interim period.

Case Citation: Rasayanam Enterprises Vs Upakarma Ayurveda Pvt Ltd: 18.08.2024: FAO(OS)(COMM) 80/202: 2024:DHC7131: Delhi High Court: Vibhu Bakhru and Tara Vitasta Ganju, H.J.

Written by: Advocate Ajay Amitabh Suman

IP Adjutor [Patent and Trademark Attorney] United & United

Email: amitabh@unitedandunited.com, Phone: 9990389539

Disclaimer:

The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Manhar Sabharwal Vs High Court of Delhi

In Case of Conflict, Delhi Original Side Rules Prevail Over CPC

Background of the Case:

The case at hand, Manhar Sabharwal Vs High Court of Delhi, decided on August 23, 2024, involves a significant constitutional challenge raised by the petitioner, Manhar Sabharwal, against the High Court of Delhi. The core of the dispute revolves around the constitutionality of Rule 4, Chapter VII of the Delhi High Court (Original Side) Rules, 2018. This rule imposes a strict 120-day deadline for filing a written statement in non-commercial matters. The petitioner contested the rule, arguing that it conflicted with provisions under the Code of Civil Procedure, 1908 (CPC), which offers more flexibility in granting extensions to file written statements.

The petitioner, represented by a team of advocates, challenged the legality of the rule, naming the High Court of Delhi and other respondents. At the heart of the matter is whether the Delhi High Court’s Original Side Rules, which govern the procedures in civil cases directly instituted before the Delhi High Court, can impose stricter procedural limits than those prescribed by the CPC, a statute that broadly governs civil procedures across all Indian courts.

Issue of the Case:

The primary issue before the court was the constitutionality and legality of Rule 4, Chapter VII of the Delhi High Court (Original Side) Rules, 2018. This rule mandates that in non-commercial matters, parties must file their written statements within 120 days of being served the summons, without allowing for judicial discretion in condoning delays beyond this period.

The petitioner contended that this rule is discriminatory and violates the Constitution of India, specifically Article 14, which guarantees the right to equality before the law. According to the petitioner, the rule unfairly strips the court of its inherent powers under Order VIII, Rule 1 of the CPC, which gives judges discretion to condone delays in filing written statements, subject to certain reasonable conditions.

Contentions of the Parties:

Petitioner’s Arguments:

The petitioner argued that Rule 4, Chapter VII is not merely a procedural rule but a substantive provision, as it directly affects the rights of litigants by imposing a rigid and inflexible timeline. This, the petitioner claimed, unjustly restricts the ability of the court to exercise discretion in matters of delay.

It was contended that the rule violated several constitutional provisions, including Article 14, which guarantees equality before the law, and Article 141, which mandates that the law declared by the Supreme Court is binding on all courts. The petitioner further argued that the rule contravened Articles 142 and 144, which deal with the enforcement of Supreme Court orders and the duty of all courts to act in aid of the Supreme Court.

The petitioner also invoked the Concurrent List under the Seventh Schedule of the Constitution, arguing that since civil procedure falls under this list, the High Court did not have the legislative competence to override the CPC, particularly Sections 122 to 128, which govern the procedural aspects of civil cases.

In essence, the petitioner submitted that the High Court’s rule is ultra vires, or beyond its legal authority, as it curtails the judicial discretion available to judges under the CPC, which allows them to extend the time for filing a written statement based on the facts and circumstances of each case.

Respondents’ Arguments:

The respondents, represented by advocates of the Delhi High Court, countered the petitioner’s claims by relying on Section 129 of the CPC. This section empowers the High Court to make its own rules of practice and procedure for civil cases on its Original Side, where cases are filed directly in the High Court, rather than in subordinate courts.

The respondents argued that Rule 4, Chapter VII is purely procedural in nature and falls squarely within the competence of the Delhi High Court to frame under its rule-making powers. The rule’s purpose, they contended, is to ensure the speedy disposal of civil cases, preventing undue delays that often occur due to late filings of written statements.

They further argued that the rule applies uniformly to all non-commercial matters on the Original Side of the Delhi High Court and does not unjustly discriminate against litigants. The respondents maintained that the 120-day limit is reasonable and does not violate any fundamental rights under the Constitution, including Article 14.

Lastly, they emphasized that Section 129 of the CPC gives the High Court the authority to frame rules that prevail over the general provisions of the CPC when it comes to procedural matters on the Original Side. The respondents maintained that this delegation of power allows the High Court to adopt stricter procedural rules in the interest of judicial efficiency.

Issues Dealt with by the Court:

The court had to address several key issues in this case:

Constitutionality of Rule 4, Chapter VII:

The court examined whether the rule, which imposes a strict 120-day deadline for filing written statements in non-commercial cases, violated constitutional principles, particularly Article 14.

Legislative Competence of the High Court:

The court had to determine whether the Delhi High Court had the legislative authority under Section 129 of the CPC to frame rules that could override provisions of the CPC, specifically Order VIII, Rule 1, which allows for judicial discretion in condoning delays.

Nature of the Rule – Procedural vs. Substantive:

Another critical issue was whether the impugned rule is purely procedural—relating to the conduct of the case—or substantive, affecting the rights of the parties. If the rule were substantive, the High Court would not have the power to frame it.

Potential Discrimination Against Litigants:

The court also considered whether the imposition of a stricter procedural timeline for cases on the High Court’s Original Side unjustly discriminated against litigants compared to those whose cases are heard in Subordinate Courts, where the CPC’s more flexible provisions apply.

Reasoning and Final Decision:

After hearing the arguments and carefully reviewing the record, the court upheld the constitutionality of Rule 4, Chapter VII of the Delhi High Court (Original Side) Rules, 2018. The court reasoned as follows:

Legislative Competence: The court held that Section 129 of the CPC clearly empowers the High Court to frame its own rules of practice and procedure for civil cases on its Original Side. As such, the High Court had the legal authority to impose a stricter timeline for filing written statements than that provided under the general provisions of the CPC.

Procedural Nature of the Rule: The court ruled that the impugned rule is procedural in nature. It deals with the conduct of proceedings and does not affect the substantive rights of the litigants. Therefore, the High Court was within its power to adopt the rule, as it aimed to streamline judicial processes and avoid unnecessary delays.

Non-Discriminatory: The court found that the rule applies uniformly to all litigants before the High Court on the Original Side and does not unjustly discriminate against any party. Moreover, the rule was deemed necessary to maintain the efficient administration of justice in non-commercial matters, given the increasing backlog of cases.

Judicial Discretion: The court held that while the rule does limit the judge’s discretion in condoning delays, this limitation was within the High Court’s power to ensure the timely progression of cases. The restriction does not unjustly infringe on judicial discretion, as the CPC itself allows for the framing of stricter procedural rules by High Courts.

Final Decision:

In its final decision, the court dismissed the petition filed by Manhar Sabharwal and the associated applications, holding that they were devoid of merit. The court upheld the constitutionality and legality of Rule 4, Chapter VII of the Delhi High Court (Original Side) Rules, 2018, finding that the rule was both procedural and within the competence of the High Court. The court concluded that the rule did not violate the principles of equality and fairness enshrined in the Constitution of India. Thus, in cases of conflict, the Delhi High Court (Original Side) Rules would prevail over the CPC when it comes to procedural matters.

Case Citation: Manhar Sabharwal Vs High Court of Delhi: 08.08.2024: Madhu Food Products Vs Surya Processed Food: 2024:DHC6118: Delhi High Court: Chief Justice and Mini Pushkarna, H.J.

Written by: Advocate Ajay Amitabh Suman

IP Adjutor [Patent and Trademark Attorney] United & United

Email: amitabh@unitedandunited.com, Phone: 9990389539

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