Sana Herbal Pvt. Ltd. Vs. Dehlvi Ambar Herbals Pvt. Ltd.

Introduction: The case of Sana Herbal Pvt. Ltd. Vs. Dehlvi Ambar Herbals Pvt. Ltd. & Anr. [FAO(COMM) 104/2025] represents a significant procedural ruling by the Delhi High Court, addressing the appropriateness of denying an ex parte ad interim injunction solely on the ground that the defendant is already active in the market. This appea arose from a commercial suit involving intellectual property disputes. The High Court’s decision underscores the principles governing interim relief under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908 (CPC), emphasizing that the defendant’s market presence alone is an insufficient basis for rejecting such relief. This case study provides a detailed analysis of the factual and procedural background, issues, submissions, judicial reasoning, cited judgments, and the law settled, offering insights into the judicial approach to interim injunctions in commercial litigation.

Detailed Factual Background: The appellant, Sana Herbal Pvt. Ltd., initiated a commercial suit (CS (COMM) 152/2025) against the respondents, Dehlvi Ambar Herbals Pvt. Ltd. and another party, before the District Judge (Commercial Court-01), Delhi. The suit involved claims related to intellectual property infringement, such as trademarks, given the nature of the parties (herbal product companies) and the context of commercial litigation. In the suit, the appellant sought an ex parte ad interim injunction under Order XXXIX Rules 1 and 2 CPC to restrain the respondents from engaging in activities allegedly infringing the appellant’s rights, such as using similar trademarks or trade names.

On March 29, 2025, the learned Commercial Court passed an order refusing the appellant’s prayer for an ex parte ad interim injunction. The sole ground cited by the court was that the respondent was already active in the market, implying that the respondent’s established presence negated the need for immediate injunctive relief. Dissatisfied with this reasoning, the appellant filed an appeal (FAO(COMM) 104/2025) before the Delhi High Court, challenging the Commercial Court’s order to the extent it denied the ex parte injunction. The appeal was accompanied by applications (CM APPLs. 25826-829/2025), likely for interim relief and procedural directions.

Detailed Procedural Background: The procedural journey began with the filing of CS (COMM) 152/2025 by Sana Herbal Pvt. Ltd. before the Commercial Court-01, Tis Hazari Courts, Delhi. The appellant’s application for an ex parte ad interim injunction was considered by the learned District Judge, who, on March 29, 2025, rejected the prayer, citing the respondent’s existing market presence. Aggrieved, the appellant invoked the appellate jurisdiction of the Delhi High Court under Section 13 of the Commercial Courts Act, 2015, filing FAO(COMM) 104/2025 along with related applications. T

Issues Involved in the Case: The primary issue before the Delhi High Court was whether the Commercial Court erred in denying the appellant’s prayer for an ex parte ad interim injunction solely on the ground that the respondent was already in the market?

Appellant's submission:The appellant argued that the Commercial Court’s refusal of the ex parte injunction was legally unsustainable. They contended that the respondent’s market presence was not a valid ground for denying interim relief, as it failed to address the established criteria for granting an injunction: prima facie case, balance of convenience, and irreparable injury. Citing the Division Bench’s decision in Hulm Entertainment Pvt. Ltd. v. SBN Gaming Network Pvt. Ltd. [FAO(COMM) 209/2023, dated October 11, 2023], they argued that prior market presence alone cannot negate the need for injunctive relief, especially in intellectual property disputes where ongoing infringement could cause irreparable harm. The appellant urged the High Court to set aside the impugned order and either grant the injunction or direct the Commercial Court to reconsider the application on merits.

Detailed Discussion on Judgments and Citations: The High Court relied on a single precedent cited by the appellant, which was directly relevant to the issue of denying an injunction based on the defendant’s market presence. Below is a detailed discussion of the judgment, its citation, and its context in the case:

Hulm Entertainment Pvt. Ltd. v. SBN Gaming Network Pvt. Ltd., FAO(COMM) 209/2023, dated October 11, 2023: This Delhi High Court Division Bench decision was pivotal to the appellant’s case and the court’s reasoning. In Hulm Entertainment, the court held that the defendant’s prior presence in the market cannot be the sole basis for rejecting an ex parte ad interim injunction. The judgment emphasized that the grant or refusal of an injunction under Order XXXIX Rules 1 and 2 CPC must be based on a comprehensive assessment of the three-pronged test: a prima facie case, balance of convenience in favor of the plaintiff, and the likelihood of irreparable injury if the injunction is not granted. The court found that the Commercial Court’s reliance on the respondent’s market presence in the present case mirrored the error in Hulm Entertainment, as it failed to engage with these essential criteria. The precedent underscored that market presence is merely one factor and cannot override the plaintiff’s entitlement to relief if the requisite legal thresholds are met.

Analysis of Judge: The Division Bench provided a concise yet incisive analysis, focusing on the legal propriety of the Commercial Court’s reasoning and the appropriate procedural remedy. Relying on Hulm Entertainment Pvt. Ltd. v. SBN Gaming Network Pvt. Ltd., the court held that this ground was prima facie untenable, as prior market presence alone cannot justify denying an injunction. The court emphasized that Order XXXIX Rules 1 and 2 CPC require a holistic evaluation of the plaintiff’s prima facie case, the balance of convenience, and the potential for irreparable harm. By focusing exclusively on the respondent’s market activity, the Commercial Court failed to apply these principles, rendering its order legally flawed.   The court mandated that both parties file written submissions within ten days and appear before the Commercial Court on May 22, 2025, for a final hearing on the Order XXXIX Rules 1 and 2 application. The court further requested the Commercial Court to decide the application expeditiously, ensuring no undue delay in resolving the dispute.

Final Decision:The Delhi High Court disposed of the appeal (FAO(COMM) 104/2025) and associated applications (CM APPLs. 25826-829/2025) on May 1, 2025. The court set aside the Commercial Court’s reasoning in the order dated March 29, 2025, to the extent it denied the ex parte ad interim injunction based solely on the respondent’s market presence. Instead of granting the injunction itself, the court directed both parties to file written submissions before the Commercial Court within ten days and appear on May 22, 2025, for a final hearing on the Order XXXIX Rules 1 and 2 application. The Commercial Court was requested to decide the application expeditiously, uninfluenced by the impugned order’s observations.

Law Settled in the Case: The case clarified the following principles under Order XXXIX Rules 1 and 2 CPC in the context of commercial disputes: Invalidity of Market Presence as Sole Ground: The defendant’s prior market presence cannot be the sole basis for denying an ex parte ad interim injunction, as it fails to address the mandatory criteria of prima facie case, balance of convenience, and irreparable injury. Comprehensive Evaluation Required: The grant or refusal of an interim injunction requires a holistic assessment of the three-pronged test under Order XXXIX Rules 1 and 2 CPC, ensuring that all relevant factors are considered. Appellate Discretion in Procedural Errors: Appellate courts may refrain from deciding the merits of an injunction application if the defendant is present, opting instead to remand the matter for expeditious reconsideration by the trial court with proper legal standards.

Sana Herbal Pvt. Ltd. Vs. Dehlvi Ambar Herbals Pvt. Ltd. & Anr.: May 1, 2025: FAO(COMM) 104/2025: High Court of Delhi: Hon'ble Justices Shri C. Hari Shankar, J. and Ajay Digpaul, J.

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.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

Goldmines Telefilms Vs Viacom 18 Media

Introduction

Goldmines Telefilms Pvt. Ltd. filed a suit against Viacom 18 Media Pvt. Ltd. and associated parties, alleging breach of contractual rights related to the licensing and exploitation of numerous films. The dispute primarily concerns the validity of termination notices issued by Goldmines and the alleged unauthorized creation of multiple versions of the films by Viacom.

Background of the Agreements

The core of the case revolves around two film assignment agreements entered into in 2015 and 2016. Under these agreements, Goldmines licensed various rights, including broadcast and on-demand rights, in approximately 250 films for significant consideration. The rights included the ability to sublicense, broadcast, and modify the films under specific contractual clauses.

Allegations of Breach

Goldmines contended that Viacom violated key clauses of the agreements, especially clauses 3.11 and 3.15. Clause 3.11 explicitly granted Viacom the authority to delete, edit, or cut portions of the films, but only in accordance with internal standard practices. Goldmines alleged that Viacom created multiple versions of the same films without adhering to these internal standards, effectively breaching the contractual terms. Such actions, according to Goldmines, amounted to unauthorized mutilation and created confusion regarding the authentic versions of the films.

Furthermore, Goldmines claimed that Viacom did not respond to cure notices sent by the plaintiff, despite alleged breaches, and continued exploiting the films improperly. Goldmines argued that these breaches justified the termination of the license agreements and asserted continuous rights over the films, seeking an order to restrain Viacom from further exploitation.

Legal Contentions

The plaintiff emphasized that the agreements clearly delineated the scope of Viacom's rights, especially concerning the editing and creation of multiple versions. The contention was that Viacom’s actions went beyond permitted standard practices, constituting a breach. Goldmines also relied on provisions under the Indian Contract Act, particularly Section 39, to argue that breach justified termination.

The defendants, on the other hand, contended that Viacom had a broad, unconditional right to create multiple versions, as per clause 3.11 of the agreements, exercised within the scope of internal policies. They argued that the actions taken did not breach the agreements and that the alleged breaches were either justified or did not amount to violations warranting termination.

Court Proceedings and Arguments

The court examined the clauses of the agreements in detail and reviewed the conduct of the parties. It analyzed whether creating multiple versions was within Viacom’s contractual rights or a breach. The court noted that the creation of different versions during broadcast was a known industry practice, but whether such actions violated contractual clauses depended on compliance with internal standards.

Both parties relied on various legal precedents addressing contractual interpretation, breach, and termination rights. The court observed that Goldmines had issued notices notifying Viacom of breaches, but Viacom argued that prior consent or adherence to internal standards exempted their actions from breach.

Interim Relief Considerations

The court considered whether to grant interim relief in favor of Goldmines. It considered the likelihood of irreparable harm, the balance of convenience, and whether Goldmines had established a prima facie case. The court noted that since the agreements involved specific rights and restrictions, the issue of damages versus irreparable injury was significant.

Based on the evidence, the court found that Goldmines’s case for breach and wrongful termination was plausible but that the question of whether Viacom’s actions breached contractual obligations required detailed examination. Nonetheless, the court acknowledged the potential for irreparable damage to the plaintiff if Viacom continued to exploit the films unlawfully.

Legal Principles and Final View

The court referred to various legal principles pertaining to contract interpretation, especially the importance of adhering to clear contractual terms and the consequences of breach. It also emphasized that termination is a serious remedy and should adhere strictly to the contractual provisions and lawful notices.

While the court observed that the agreements granted broad rights to Viacom for editing, whether they were exercised appropriately remained to be seen. The court emphasized that the restrictions on creating multiple versions and the requirement to follow internal standards were central issues.

Conclusion

The court reserved its final decision but granted a temporary injunction preventing Viacom from further exploiting the films until the case was fully adjudicated. The court underscored that the matter involved complex contractual interpretations and evidence pertaining to the creation of multiple film versions, necessitating detailed examination at trial.

Summary

This case centers around allegations by Goldmines that Viacom breached contractual provisions by creating unauthorized multiple versions of films, violating the scope of their rights as defined in the licensing agreements. The dispute involves contractual interpretation, breach, and the legality of termination notices issued by Goldmines. The court is examining whether Viacom’s actions were within their contractual rights or constituted breaches that justified termination, with interim relief granted pending final judgment.

Case Title: Goldmines Telefilms Pvt. Ltd. vs. Viacom 18 Media Pvt. Ltd. Date of Order: 7th May 2025 Case No.: Commercial IP Suit (Lodging) No. 33463 of 2024 Neutral Citation: 2025:BHC-OS-7679: Court: High Court of Bombay, Judge: Hon'ble Justice Manish Pitale

Outlook Publishing Solution Vs R R India

This case involves Outlook Publishing Pvt. Ltd. (the appellant) filing a suit against R R Solution (the respondent) to recover a sum of Rs. 9,77,000, which the appellant claimed was outstanding for advertising services provided in their magazines Outlook, Outlook Business, and Outlook Web. The agreement between the parties was executed on April 24, 2020, and the appellant contended that the respondent had defaulted on the payments for advertisements published in the issues dated April 20, 2020, July 27, 2020, and August 1, 2020. The plaintiff produced invoices, copies of advertisements, and agreements as evidence. However, the respondent did not appear in court and did not file a defense.

The trial court examined the evidence and observed that the appellant relied on photocopies of magazine pages rather than original copies, which are essential under law for evidence. Consequently, the court dismissed the suit, stating that the photocopies were not admissible and that the appellant had failed to prove its case satisfactorily. The court also noted the respondent's absence and held that mere affidavits and photocopies could not establish the claim comprehensively.

On appeal, the appellant argued that the original magazines could not be traced due to pandemic-related difficulties. The appellate court acknowledged this hardship and observed that since the original magazines were now available, the case should not suffer solely due to the pandemic. Accordingly, the appellate court set aside the impugned judgment and permitted the appellant to lead additional evidence, including the original magazines and electronic proofs of digital publications, in accordance with legal procedures. The matter was remanded for fresh proceedings to allow the appellant to substantiate its claim with proper evidence.

Case Details:Outlook Publishing Solution Vs R R India: May 6, 2025: RFA(COMM) 233/2025: 2025:DHC:3481-DB:High Court of Delhi: Prathiba M. Singh and Rajneesh Kumar Gupta, H.J.

Astrazeneca AB Vs. Westcoast Pharmaceutical

Maintainability of Patent Infringement Suit during pendency of Post Grant Opposition

Introduction: The case of Astrazeneca AB & Anr. v. Westcoast Pharmaceutical Works Limited [2023:DHC:3337] is a pivotal decision by the Delhi High Court addressing the maintainability of a patent infringement suit under the Patents Act, 1970, when post-grant opposition proceedings are pending. The defendant sought rejection of the plaintiff’s suit under Order VII Rule 11 of the Code of Civil Procedure, 1908 (CPC), arguing, inter alia, that the Supreme Court’s observations in Aloys Wobben v. Yogesh Mehra [(2014) 15 SCC 360] preclude such suits until the patentee’s rights are crystallized post-opposition. The High Court’s ruling clarifies the scope of Order VII Rule 11, the jurisdictional requirements for patent suits, and the statutory rights of a patentee under Section 48 of the Patents Act, emphasizing that no provision prohibits infringement actions during pending oppositions. This case study provides a comprehensive analysis of the factual and procedural background, issues, submissions, judicial reasoning, cited judgments, and the law settled, offering critical insights into patent enforcement in India.

Detailed Factual Background:  The plaintiffs, Astrazeneca AB (a Swedish company) and its Indian subsidiary, initiated CS(COMM) 101/2022 against the defendant, Westcoast Pharmaceutical Works Limited, alleging infringement of Indian Patent No. 297581 (IN’581), granted on June 11, 2018, for the compound Osimertinib, used in cancer treatment. The plaintiffs claimed that the defendant had begun manufacturing and was either selling or preparing to sell products infringing IN’581 in India. The suit sought an injunction, damages of Rs. 2,00,01,000, and other reliefs, asserting that the defendant’s actions violated their exclusive rights under Section 48 of the Patents Act.

The defendant contested the suit’s maintainability, filing an application (I.A. 21995/2022) under Order VII Rule 11 CPC for its rejection. The application was based on three grounds: lack of pecuniary jurisdiction, lack of territorial jurisdiction, and the pendency of post-grant oppositions under Section 25(2) of the Patents Act. Specifically, post-grant oppositions were filed by Sunshine Organics Pvt. Ltd. on May 14, 2019, and Natco Pharma Ltd. on June 10, 2019, challenging IN’581, and were pending before the Controller General of Patents when the suit was filed on February 8, 2022. The defendant relied on paragraph 19 of Aloys Wobben, arguing that the plaintiffs’ right to sue for infringement had not crystallized due to these pending oppositions.

Detailed Procedural Background: The suit was instituted on February 8, 2022, before the Delhi High Court, invoking its original jurisdiction based on the damages claimed (Rs. 2,00,01,000), which exceeded the pecuniary threshold for district courts. The defendant responded by filing I.A. 21995/2022 under Order VII Rule 11 CPC, seeking rejection of the plaint. The application was argued before Justice C. Hari Shankar, with Mr. Vikas Khera representing the defendant and Mr. Pravin Anand representing the plaintiffs. The court heard extensive submissions on May 12, 2023, reserved its judgment, and pronounced it on May 15, 2023, dismissing the defendant’s application. A related application (I.A. 1079/2023) under Order XIIIA Rule 3 CPC was re-notified for August 1, 2023, indicating ongoing proceedings.

Issues Involved in the Case:The case raised the following issues for determination:Whether the suit was liable to be rejected under Order VII Rule 11 CPC for lack of pecuniary jurisdiction, given the plaintiffs’ claim for damages in a purported quia timet action?Whether the suit could be rejected under Order VII Rule 11 CPC for lack of territorial jurisdiction, considering the defendant’s location outside Delhi and the plaintiffs’ operational presence.?Whether the pendency of post-grant oppositions under Section 25(2) of the Patents Act barred the plaintiffs from filing an infringement suit, as per the Supreme Court’s observations in Aloys Wobben?Whether paragraph 19 of Aloys Wobben constituted binding precedent or obiter dicta, and its impact on the plaintiffs’ statutory rights under Section 48 of the Patents Act?

Defendant's submission: The defendant argued for rejection of the plaint on three grounds. First, they contended that the suit lacked pecuniary jurisdiction, as it was a quia timet action based on mere apprehension of infringement, not actual infringement. Citing Toni & Guy Products Ltd. v. Shyam Sunder Nagpal [2007 (34) DLT 309], they argued that damages are not claimable in such suits, reducing the suit’s valuation to Rs. 1,000, below the High Court’s pecuniary threshold. Second, they challenged territorial jurisdiction under Section 20 CPC, noting that the defendant was based outside Delhi and Plaintiff 1 was in Sweden, despite Plaintiff 2’s Delhi office. However, this ground was not pressed during arguments. Third, relying on paragraph 19 of Aloys Wobben [(2014) 15 SCC 360], they argued that the plaintiffs’ right to sue had not crystallized due to pending post-grant oppositions by Sunshine and Natco. They emphasized the Supreme Court’s observation that it was “unlikely and quite impossible” for an infringement suit to be filed during such proceedings. The defendant also cited Pharmacosmos Holding A/S v. La Renon Healthcare Pvt. Ltd. [2019 (78) PTC 329] and Sergi Transformer Explosion Prevention Technologies Pvt. Ltd. v. CTR Manufacturing Industries Ltd. [2015 SCC OnLine Bom 6984], along with a related Supreme Court order, to support their interpretation of Aloys Wobben.

Plaintiff's submission: The plaintiff opposed the application, arguing that the plaint disclosed a valid cause of action and met jurisdictional requirements. On pecuniary jurisdiction, they distinguished Toni & Guy, asserting that the plaint alleged actual manufacture and sale (or imminent sale) by the defendant, not mere apprehension, justifying the damages claim and High Court jurisdiction. On territorial jurisdiction, they noted the issue was not argued and was irrelevant under Order VII Rule 11, as Order VII Rule 10 governs such challenges. On the Aloys Wobben issue, they relied on the proviso to Section 11A(3) of the Patents Act, which permits infringement suits post-grant without further restrictions. They argued that Aloys Wobben addressed a different issue—simultaneous revocation petitions and counterclaims—not the maintainability of infringement suits during post-grant oppositions. They contended that paragraph 19 was obiter dicta, not binding, as per Career Institute Educational Society v. Om Shree Thakur Educational Society [2023 SCC OnLine SC 586], and cited Novartis AG v. Natco Ltd. [CS(Comm) 299/2019, dated May 2, 2019] and CDE Asia Ltd. v. Terex India Pvt. Ltd. [MANU/DE/0584/2020] to show that infringement suits are maintainable post-grant. They warned that barring such suits would undermine patentees’ rights and encourage infringement during opposition proceedings.

Detailed Discussion on Judgments and Citations: The court extensively analyzed the cited judgments to resolve the issues, particularly the interpretation of Aloys Wobben and the scope of Order VII Rule 11 CPC. Below is a detailed discussion of each judgment, its citation, and its context in the case:

Toni & Guy Products Ltd. v. Shyam Sunder Nagpal, 2007 (34) DLT 309:  Cited by the defendant to argue lack of pecuniary jurisdiction, this Delhi High Court decision held that damages are not claimable in a quia timet suit based on mere apprehension of trademark infringement, as no proprietary rights were invaded. The court distinguished this case, noting that the plaintiffs alleged actual manufacture and sale by the defendant, not mere apprehension, making the damages claim valid and conferring pecuniary jurisdiction on the High Court.

Aloys Wobben v. Yogesh Mehra, (2014) 15 SCC 360: Central to the defendant’s case, this Supreme Court decision was cited for paragraph 19, which suggests that a patentee’s right to hold a patent crystallizes only after favorable disposal of post-grant oppositions or expiry of the one-year opposition period, and that infringement suits are “unlikely and quite impossible” during such proceedings. The plaintiffs argued that this paragraph was obiter, as the case addressed whether a defendant could simultaneously pursue revocation petitions and counterclaims, not the maintainability of infringement suits. The court agreed, applying the inversion test from Career Institute to find paragraph 19 unnecessary to the decision, thus obiter. It further noted that Aloys Wobben distinguished between patent grant and crystallization, with Section 48 rights arising upon grant, not crystallization.

Pharmacosmos Holding A/S v. La Renon Healthcare Pvt. Ltd., 2019 (78) PTC 329: Cited by the defendant, this interlocutory Delhi High Court order expressed tentative concern that Aloys Wobben’s paragraph 19 might bar infringement suits during post-grant oppositions, but noted the absence of statutory provisions supporting such a bar and the potential hardship to patentees. The court dismissed its precedential value, describing paragraph 19 as an inconclusive reflection (using “perhaps”) and highlighting the judge’s discomfort with barring suits, especially given the 20-year patent term.

Sergi Transformer Explosion Prevention Technologies Pvt. Ltd. v. CTR Manufacturing Industries Ltd., 2015 SCC OnLine Bom 6984: Cited by the defendant, this Bombay High Court Division Bench order admitted an appeal and stayed an injunction, partly due to a pending post-grant opposition, citing Aloys Wobben. However, the Supreme Court’s order in SLP(C) 34749-34751/2015 (December 16, 2015) set aside the stay, restoring the injunction despite the opposition, indicating that Aloys Wobben did not bar such suits. The court relied on this to reject the defendant’s interpretation, noting the Supreme Court’s disapproval of prioritizing oppositions over merits.

Career Institute Educational Society v. Om Shree Thakur Educational Society, 2023 SCC OnLine SC 586: Cited by the plaintiffs to argue that Aloys Wobben’s paragraph 19 was obiter, this Supreme Court decision clarified the distinction between ratio decidendi and obiter dicta, introducing the inversion test: if removing a passage does not alter the case’s conclusion, it is obiter. The court applied this test, finding that removing paragraph 19 from Aloys Wobben would not change its outcome, confirming its obiter status. The decision also emphasized that only the ratio binds lower courts under Article 141.

Novartis AG v. Natco Ltd., CS(Comm) 299/2019, dated May 2, 2019:  Cited by the plaintiffs, this interlocutory Delhi High Court order held that Aloys Wobben does not bar infringement suits during post-grant oppositions, as the patentee’s rights under Section 48 arise upon grant. The court noted this supported the plaintiffs’ position but did not rely heavily on it due to its interlocutory nature.

CDE Asia Ltd. v. Terex India Pvt. Ltd., MANU/DE/0584/2020: Cited by the plaintiffs, this Delhi High Court order similarly held that Aloys Wobben does not preclude infringement suits post-grant, emphasizing Section 48 rights. The court acknowledged this but gave it limited weight as an interlocutory view.

Director of Settlements v. M.R. Apparao, (2002) 4 SCC 638: Cited by the court, this Supreme Court decision elucidated the binding nature of Supreme Court judgments under Article 141, stating that only the ratio decidendi binds, while obiter dicta, though not binding, carry considerable weight. The court used this to balance respect for Aloys Wobben’s observations with their non-binding status.

Arun Kumar Aggarwal v. State of Madhya Pradesh, (2014) 13 SCC 707: Cited by the court, this Supreme Court decision discussed obiter dicta, defining them as observations unnecessary to the decision, lacking binding force but persuasive value. The court referenced this to reinforce that Aloys Wobben’s paragraph 19 was non-binding.

MCD v. Gurnam Kaur, (1989) 1 SCC 101: Cited by the court, this Supreme Court decision held that casual expressions by judges are not authoritative. The court used this to argue that Aloys Wobben’s observation about the improbability of infringement suits was not a binding legal pronouncement.

Karnataka SRTC v. Mahadeva Shetty, (2003) 7 SCC 197:Cited by the court, this Supreme Court decision reiterated that passing remarks lack authoritative weight, supporting the court’s view that Aloys Wobben’s paragraph 19 was not binding.

State of Haryana v. Ranbir, (2006) 5 SCC 167:Cited by the court, this Supreme Court decision clarified that obiter dicta are unnecessary to the decision and non-authoritative, reinforcing the court’s classification of Aloys Wobben’s paragraph 19.

Girnar Traders v. State of Maharashtra, (2007) 7 SCC 555:Cited by the court, this Supreme Court decision held that only the ratio decidendi is binding, not general observations, supporting the court’s finding that Aloys Wobben’s paragraph 19 was obiter.

Skill Lotto Solutions (P) Ltd. v. Union of India, (2021) 15 SCC 667:Cited by the court, this Supreme Court decision distinguished obiter from ratio, emphasizing that observations integral to the decision are binding. The court used this to contrast Aloys Wobben’s incidental remarks with its core holding.

U.O.I. v. Chhajju Ram, (2003) 5 SCC 568:Cited by the court, this Supreme Court decision held that a precedent is authority only for what it decides, not logical extensions, supporting the court’s refusal to extend Aloys Wobben’s observation into a prohibition on infringement suits.Detailed Reasoning and Analysis of Judge: Justice C. Hari Shankar’s reasoning meticulously addressed each ground for rejection under Order VII Rule 11 CPC, focusing heavily on the Aloys Wobben controversy and the statutory framework of the Patents Act. 

The analysis can be summarized as follows:

Pecuniary Jurisdiction: The court rejected the defendant’s claim that the suit was a quia timet action lacking a basis for damages. Unlike Toni & Guy, where no trademark use was alleged, the plaintiffs’ plaint asserted actual manufacture and sale, taken as true under Order VII Rule 11. The damages claim of Rs. 2,00,01,000 justified High Court jurisdiction, as it exceeded the district court threshold.

Territorial Jurisdiction: The court noted that territorial jurisdiction challenges fall under Order VII Rule 10 CPC (return of plaint), not Order VII Rule 11 (rejection). Since the defendant did not argue this ground, the court reserved the issue for a potential future application, returning no finding.

Aloys Wobben and Post-Grant Oppositions: The court’s core analysis centered on whether Aloys Wobben’s paragraph 19 barred the suit due to pending oppositions. The court agreed with the plaintiffs that the Patents Act imposes no restriction on infringement suits post-grant, as per the proviso to Section 11A(3). Section 48 confers exclusive rights upon grant, without conditions related to oppositions or a one-year waiting period. The court found that requiring patentees to wait would undermine these rights, allowing unchecked infringement and reducing the patent’s 20-year term, as noted in Pharmacosmos Holding.

Interpretation of Aloys Wobben: The court conducted a detailed analysis of Aloys Wobben, concluding that paragraph 19 was obiter. The case addressed whether a defendant could pursue simultaneous revocation petitions and counterclaims, not the patentee’s right to sue during oppositions. No post-grant oppositions were involved in Aloys Wobben, and the issue of suit maintainability was neither argued nor decided. Applying the inversion test from Career Institute, the court found that removing paragraph 19 would not alter Aloys Wobben’s outcome, confirming its obiter status. The court also noted that Aloys Wobben distinguished between patent grant (conferring Section 48 rights) and crystallization (post-opposition finality), supporting the plaintiffs’ right to sue upon grant.

Precedential Value of Obiter: Citing Director of Settlements and Arun Kumar Aggarwal, the court acknowledged that Supreme Court obiter carries weight but is not binding under Article 141. Paragraph 19’s observation that infringement suits are “unlikely and quite impossible” during oppositions was not a legal prohibition but a possibility, not warranting a bar on suits. The court emphasized that judicial precedents are authority only for what they decide, per U.O.I. v. Chhajju Ram.Supporting Precedents: The court found support in the Supreme Court’s order in Sergi, where an injunction was upheld despite a pending opposition, indicating no bar under Aloys Wobben. The interlocutory orders in Novartis and CDE Asia were noted but not heavily relied upon due to their prima facie nature. Pharmacosmos Holding was dismissed as lacking precedential value, given its tentative and interlocutory nature.

Policy Considerations: The court highlighted the absurdity of barring infringement suits during oppositions, as it would incentivize frivolous oppositions to delay enforcement and erode the patent’s term. Such an interpretation would contravene the Patents Act’s ethos of protecting patentees’ rights.

Final Decision: The Delhi High Court dismissed the defendant’s application (I.A. 21995/2022) under Order VII Rule 11 CPC, holding that no grounds for rejecting the plaint existed. The court found the suit maintainable, with valid pecuniary jurisdiction based on the damages claim, and reserved the territorial jurisdiction issue for a potential Order VII Rule 10 application. The pendency of post-grant oppositions did not bar the infringement suit, as Aloys Wobben’s paragraph 19 was obiter and the Patents Act imposed no such restriction. The related application (I.A. 1079/2023) was re-notified for August 1, 2023.

Law Settled in the Case: The case clarified several principles under the Patents Act and CPC:

Maintainability of Infringement Suits: A patentee can institute an infringement suit upon grant of a patent under Section 48, without waiting for the expiry of the one-year post-grant opposition period or resolution of pending oppositions under Section 25(2).

Scope of Order VII Rule 11 CPC: Rejection of a plaint for lack of pecuniary jurisdiction requires demonstrating that the plaint’s averments, taken as true, do not meet the court’s threshold. Territorial jurisdiction challenges fall under Order VII Rule 10, not Order VII Rule 11.

Interpretation of Aloys Wobben: Paragraph 19 of Aloys Wobben is obiter dicta, not binding, as it addresses a different issue and does not prohibit infringement suits during post-grant oppositions.

Statutory Rights Under Patents Act: Section 48 confers immediate rights to prevent infringement upon patent grant, per the proviso to Section 11A(3), without conditions related to oppositions.

Obiter Dicta’s Precedential Value: Supreme Court obiter, while persuasive, is not binding under Article 141, as clarified by the inversion test and principles in Career Institute and Director of Settlements.

Case Title: Astrazeneca AB & Anr. Vs. Westcoast Pharmaceutical Works Limited:Date of Order: May 15, 2023:Case No.: CS(COMM) 101/2022:Citation: 2023:DHC:3337:Name of Court: High Court of Delhi:Name of Hon'ble Judge: C. Hari Shankar, J.

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.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

Gurmeet Singh Sachdeva Vs. Skyways Air Services Pvt. Ltd.

Introduction: The case of Gurmeet Singh Sachdeva v. Skyways Air Services Pvt. Ltd. [CM(M) 147/2024, Delhi High Court] is a significant ruling by the Delhi High Court that addresses the scope of Order 7 Rule 11 of the Code of Civil Procedure, 1908 (CPC), particularly the requirement for a plaint to disclose a cause of action to survive rejection. The petitioner challenged the trial court’s dismissal of his application to reject the respondent’s plaint, arguing that it lacked sufficient details to constitute a valid cause of action. The High Court’s decision clarifies the principles governing the rejection of a plaint, emphasizing that both the averments in the plaint and accompanying documents must be considered to determine the existence of a cause of action. This case study provides a detailed analysis of the factual and procedural background, issues, submissions, judicial reasoning, cited judgments, and the law settled, offering insights into the procedural safeguards against frivolous litigation under the CPC.

Detailed Factual Background:  The dispute originates from a commercial suit (CS (Comm.) No. 886/2020) filed by the respondent, Skyways Air Services Pvt. Ltd., against the petitioner, Gurmeet Singh Sachdeva, before the District Judge, Commercial Court-03, Tis Hazari Courts, Delhi. The respondent sought recovery of Rs. 21,28,478, comprising Rs. 18,03,795 as principal and Rs. 3,24,683 as interest, alleging that the petitioner availed logistic services to transport goods to foreign destinations via air but failed to pay the outstanding amount. The respondent claimed that the petitioner booked consignments through their services, which involved coordination with airlines, but defaulted on payments, leading to the financial claim.

The petitioner contested the suit by filing a written statement, raising preliminary objections, including that the plaint was vague, ambiguous, and lacked material particulars, thereby failing to disclose a valid cause of action. On October 12, 2023, the petitioner filed an application under Order 7 Rule 11 CPC, seeking rejection of the plaint on the ground of non-disclosure of a cause of action. The trial court dismissed this application with costs of Rs. 5,000, holding that the plaint sufficiently elaborated the cause of action, which involved mixed questions of law and fact requiring adjudication. Aggrieved, the petitioner filed a petition under Article 227 of the Constitution before the Delhi High Court, challenging the trial court’s order.

Detailed Procedural Background: The procedural history began with the respondent’s filing of the commercial suit in 2020. The petitioner responded with a written statement, contesting the claim and raising legal objections, including the lack of a valid cause of action due to insufficient details in the plaint. On October 12, 2023, the petitioner escalated this objection by filing an application under Order 7 Rule 11 CPC, seeking rejection of the plaint. The trial court, on the same date, dismissed the application, finding that the plaint’s averments, particularly the cause of action paragraph, were sufficient to proceed with the suit. The trial court reasoned that the cause of action involved mixed questions of law and fact, necessitating a full trial.Feeling aggrieved, the petitioner invoked the supervisory jurisdiction of the Delhi High Court under Article 227, filing CM(M) 147/2024 along with an application for stay (CM APPL. 4557/2024). 

Issues Involved in the Case: The primary issue was whether the respondent’s plaint disclosed a valid cause of action under Order 7 Rule 11(a) CPC, warranting its continuation or rejection?Whether the plaint’s lack of specific details about the goods, airlines, freight charges, taxes, and service charges rendered it deficient in disclosing a cause of action?Whether the trial court erred in considering the cause of action as a mixed question of law and fact, contrary to the principle that only the plaint’s averments are relevant under Order 7 Rule 11?Whether documents filed with the plaint, such as ledger accounts and airway bills, could be considered to determine the existence of a cause of action?Whether the trial court’s dismissal of the petitioner’s application was legally sustainable or warranted interference under Article 227?

Petitioner's submission: The petitioner  argued that the respondent’s plaint was fatally deficient, lacking specific details about the goods booked, their quantity, dispatch dates, airlines used, freight charges, taxes, and the respondent’s service charges. They contended that the plaint merely stated the total amount per consignment without explaining how these amounts were calculated, rendering it vague and ambiguous. The petitioner asserted that this omission failed to disclose a valid cause of action, justifying rejection under Order 7 Rule 11(a) CPC. 

They criticized the trial court’s finding that the cause of action was sufficiently elaborated, arguing that the court’s reliance on mixed questions of law and fact was contrary to settled law, which restricts the inquiry to the plaint’s averments, excluding evidence, documents, or the written statement. The petitioner cited several Supreme Court and High Court judgments, including Saleem Bhai v. State of Maharashtra [(2003) 1 SCC 557], Raghwendra Sharan Singh v. Ram Prasana Singh [(2020) 16 SCC 601], and Om Prakash Srivastava v. Union of India [(2006) 6 SCC 207], to emphasize that a plaint must contain all essential facts to establish a right to sue, and any deficiency warrants rejection. They urged the High Court to set aside the trial court’s order as a misinterpretation of law.

Respondent's submission: The respondent countered that the plaint, read with the accompanying documents, adequately disclosed a cause of action. They argued that the plaint summarized the facts of the petitioner’s use of their logistic services and non-payment, while detailed documents—ledger accounts, sub-agency collection reports, airway bills, customer instructions, and billing reports (spanning 200 pages)—provided specifics on consignments, destinations, and charges. The respondent accused the petitioner of deliberately omitting these documents from the High Court record to mislead the court. They contended that under Order 7 Rule 11, the court must consider both the plaint’s averments and filed documents, as established by the Supreme Court in Liverpool & London S.P. & I Association Ltd. v. M.V. Sea Success & Another [(2004) 9 SCC 512]. The respondent asserted that the trial court rightly dismissed the application, as the combined reading of the plaint and documents established a triable cause of action. They urged the High Court to uphold the trial court’s order and dismiss the petition.

Detailed Discussion on Judgments and Citations: The Delhi High Court relied on several precedents to resolve the issue, with the petitioner and the court citing key Supreme Court and High Court decisions to clarify the scope of Order 7 Rule 11 and the concept of cause of action.

Saleem Bhai v. State of Maharashtra, (2003) 1 SCC 557:  Cited by the petitioner, this Supreme Court decision holds that for an application under Order 7 Rule 11, only the plaint’s averments are relevant, and the defendant’s pleas in the written statement are immaterial. The Court emphasized that if the plaint does not disclose a cause of action, it should be rejected to prevent frivolous litigation. The Delhi High Court acknowledged this principle but noted that the petitioner’s reliance was incomplete, as subsequent rulings expanded the scope to include documents filed with the plaint.

Raghwendra Sharan Singh v. Ram Prasana Singh, (2020) 16 SCC 601: The petitioner cited this case, where the Supreme Court reiterated that a plaint must disclose a cause of action through clear averments, and clever drafting cannot create an illusion of a cause of action. The Delhi High Court accepted this proposition but found it inapplicable, as the respondent’s plaint, supported by documents, was not a case of clever drafting but a genuine claim.

Om Prakash Srivastava v. Union of India, (2006) 6 SCC 207: Cited by both the petitioner and the Court, this Supreme Court decision provides a comprehensive definition of “cause of action” as a bundle of facts that the plaintiff must prove to succeed, including the defendant’s act causing the infraction. The Court quoted extensively from this judgment to explain that a cause of action encompasses all essential facts necessary for a judgment, distinguishing it from evidence. The Delhi High Court applied this definition, finding that the respondent’s averments and documents collectively disclosed a cause of action.

Rajasthan High Court Advocates Association v. Union of India, (2001) 2 SCC 294: Cited by the petitioner, this Supreme Court case defines cause of action as the facts necessary to establish a right to sue, including both the infraction and the right itself. The Delhi High Court referenced this in conjunction with Om Prakash Srivastava to affirm the broad and narrow senses of cause of action, supporting its conclusion that the respondent’s plaint met this standard.

Mayar (H.K.) Ltd. v. Owners & Parties, (2006) 3 SCC 100: The petitioner relied on this Supreme Court decision, which holds that a plaint lacking a cause of action should be rejected at the threshold to avoid vexatious litigation. The Delhi High Court agreed with the principle but found it inapplicable, as the respondent’s plaint was not vexatious.

Popat and Kotecha Property v. State Bank of India Staff Association, (2005) 7 SCC 510: Cited by the petitioner, this Supreme Court case emphasizes that the court must read the plaint as a whole to determine if it discloses a cause of action, ignoring the defendant’s defenses. The Delhi High Court adhered to this approach, reading the respondent’s plaint with its documents to find a valid cause of action.

H.D. Vashishta v. Glaxo Laboratories, AIR 1979 SC 134: The petitioner cited this Supreme Court decision, which supports the rejection of a plaint if it fails to disclose a right to sue. The Delhi High Court acknowledged this but found it irrelevant, as the respondent’s plaint and documents established a right to sue.

Hari Gokal Jewellers v. Satish Kapoor, 2006 (88) DRJ 837 (Delhi) (DB): Cited by the petitioner, this Delhi High Court decision reinforces that only the plaint’s averments are considered under Order 7 Rule 11. The Court noted that subsequent rulings, like Liverpool, expanded this to include documents, limiting this case’s applicability.

A.B.C. Laminart Pvt. Ltd. v. A.P. Agencies, 1989 (2) JT (SC) 38: The petitioner relied on this Supreme Court case, which holds that a plaint must clearly state facts constituting a cause of action. The Delhi High Court found this consistent with its analysis, as the respondent’s documents supplemented the plaint’s averments.

Madanuri Sri Rama Chandra Murthy v. Syed Jalal, (2017) 13 SCC 174: Cited by the Court, this Supreme Court decision reiterates that a plaint can be rejected under Order 7 Rule 11 if it is vexatious or lacks a cause of action, but the power must be exercised cautiously. The Court must read the plaint holistically, ignoring the written statement. The Delhi High Court applied this to affirm that the respondent’s plaint was not vexatious.

Liverpool & London S.P. & I Association Ltd. v. M.V. Sea Success & Another, (2004) 9 SCC 512: Cited by the respondent and the Court, this Supreme Court decision is pivotal, holding that documents filed with the plaint under Order 7 Rule 14 must be considered to determine a cause of action. A plaint should not be rejected if the averments or documents disclose a triable claim, even if the facts require proof. The Delhi High Court relied heavily on this to reject the petitioner’s argument that only the plaint’s averments matter.

Pfizer Enterprises & Anr. v. Dr. H.R. Manchanda & Anr., CS (OS) 641/2007 (Delhi High Court): Cited by the Court, this Delhi High Court decision, relying on Liverpool, holds that the court must examine the plaint and accompanying documents to assess a cause of action. A meaningful reading of the plaint is required to prevent rejection based on formal deficiencies. This supported the Court’s conclusion that the respondent’s documents cured any deficiencies in the plaint.

Inspiration Clothes & U v. Colby International Limited, 88 (2000) DLT 769 (DB): Cited by the Court, this Delhi High Court decision distinguishes cases where the plaint facially lacks a cause of action from those where documents disclose one. The Court held that documents filed with the plaint can be considered to ascertain a cause of action, reinforcing the respondent’s position.

Sopan Sukhdeo v. Assistant Charity Commissioner, (2004) 3 SCC 137: Referenced in Pfizer Enterprises, this Supreme Court decision emphasizes a meaningful, not formal, reading of the plaint to determine a cause of action. The Delhi High Court indirectly applied this through Pfizer to adopt a holistic approach.

Detailed Reasoning and Analysis of Judge:  Justice Ravinder Dudeja’s reasoning focused on the legal framework of Order 7 Rule 11 CPC, the definition of cause of action, and the role of documents in assessing a plaint’s sufficiency. The Court’s analysis can be summarized as follows:

Definition of Cause of Action: The Court adopted the Supreme Court’s exposition in Om Prakash Srivastava, defining cause of action as a bundle of facts the plaintiff must prove to succeed, including the defendant’s act causing the infraction. The respondent’s plaint alleged the petitioner’s use of logistic services and non-payment, which, though lacking detailed specifics, constituted a prima facie cause of action when read with the documents.

Scope of Order 7 Rule 11: The Court reiterated that Order 7 Rule 11 empowers rejection of a plaint for non-disclosure of a cause of action, but this power is drastic and must be exercised cautiously, as per Madanuri Sri Rama Chandra Murthy. The plaint must be read holistically, and rejection is warranted only if the suit is manifestly vexatious or lacks any right to sue.

Consideration of Documents: The Court’s pivotal finding, based on Liverpool & London S.P. & I Association Ltd., was that documents filed under Order 7 Rule 14 are integral to assessing a cause of action. The respondent’s ledger accounts, airway bills, and billing reports provided details on consignments, charges, and taxes, curing the plaint’s lack of specificity. The petitioner’s contention that only the plaint’s averments matter was rejected in light of Liverpool, Pfizer Enterprises, and Inspiration Clothes.

Trial Court’s Reasoning: The Court found no error in the trial court’s dismissal of the petitioner’s application. The trial court’s reference to mixed questions of law and fact, while arguably imprecise, did not vitiate its conclusion that the plaint disclosed a cause of action. The High Court clarified that the trial court’s reliance on the plaint’s averments was supplemented by the documents, aligning with judicial precedents. Petitioner’s Arguments: The Court dismissed the petitioner’s reliance on cases like Saleem Bhai and Raghwendra Sharan Singh, noting that while they emphasize the plaint’s averments, subsequent rulings like Liverpool expanded the scope to include documents. The petitioner’s failure to dispute the documents’ existence on the trial court record weakened their case. Threshold for Rejection: The Court emphasized that the phrase “does not disclose a cause of action” is narrowly construed, and rejection is an exceptional remedy. The respondent’s plaint, supported by 200 pages of documents, presented an arguable case, precluding rejection under Order 7 Rule 11.

Final Decision: The Delhi High Court dismissed the petitioner’s petition (CM(M) 147/2024) and the accompanying stay application (CM APPL. 4557/2024), finding no merit in the challenge to the trial court’s order dated October 12, 2023. The Court upheld the trial court’s dismissal of the petitioner’s application under Order 7 Rule 11 CPC, confirming that the respondent’s plaint, read with its documents, disclosed a valid cause of action. No costs were awarded.

Law Settled in the Case:  The case clarified several principles under Order 7 Rule 11 CPC: Holistic Reading of Plaint: A plaint must be read as a whole, including documents filed under Order 7 Rule 14, to determine if it discloses a cause of action. Role of Documents: Documents accompanying the plaint are integral to assessing a cause of action, and a plaint should not be rejected if these documents cure deficiencies in the averments. Narrow Construction of Non-Disclosure: The ground of non-disclosure of a cause of action is narrowly construed, and rejection is warranted only in exceptional cases where the plaint is manifestly vexatious or lacks any right to sue.Cautious Exercise of Power: The power to reject a plaint under Order 7 Rule 11 is drastic and must be exercised cautiously, ensuring that arguable cases proceed to trial.Irrelevance of Defendant’s Pleas: The defendant’s written statement or defenses are irrelevant when deciding an application under Order 7 Rule 11, focusing solely on the plaint and its documents.

Case Title: Gurmeet Singh Sachdeva Vs. Skyways Air Services Pvt. Ltd.:Date of Order: May 8, 2025:Case No.: CM(M) 147/2024:Neutral Citation: 2025:DHC:3427:Name of Court: High Court of Delhi:Name of Hon'ble Judge: Ravinder Dudeja, J.

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.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

Parshottam Kumar Vs Hafiz Mohd Sami

Maintainability of Appeals during pendency of Reviews Petition

Introduction: This case is a significant decision by the Delhi High Court that addresses the interplay between the right to file a review petition and an appeal under Order 47 Rule 1 of the Code of Civil Procedure, 1908 (CPC). The case clarifies the legal position regarding the maintainability of an appeal when a review petition has been filed and subsequently dismissed, emphasizing the conditions under which a court retains jurisdiction to hear a review petition. The Delhi High Court, relying on authoritative Supreme Court precedents, resolved the petitioner’s challenge to an appellate court’s jurisdiction to hear an appeal after the dismissal of a review petition. This case study provides a comprehensive analysis of the factual and procedural background, issues, submissions, judicial reasoning, cited judgments, and the law settled, offering insights into the procedural nuances of review and appellate jurisdiction under the CPC.

Detailed Factual Background:The case arises from a dispute where the respondent challenged an order dated February 20, 2013, by filing a review petition on April 2, 2013. On the date of filing the review petition, no appeal had been preferred against the impugned order. Subsequently, the respondent filed an appeal, and the review petition was dismissed by the court that passed the original order. The petitioner, aggrieved by the appellate court’s decision to entertain the appeal, filed a petition (CM(M) 130/2017) before the Delhi High Court, contending that the filing of a review petition barred the respondent from maintaining an appeal against the same order. The petitioner argued that Order 47 Rule 1 CPC prohibits an appeal once a review petition is filed, as the review petition constitutes an election of remedy. The respondent, however, maintained that the dismissal of the review petition restored their right to pursue an appeal, and no provision in the CPC explicitly barred such an appeal. The factual details of the underlying dispute (e.g., the nature of the original suit or the parties’ identities) are not specified in the judgment, as the case focuses solely on the procedural question of maintainability.

Detailed Procedural Background:The procedural history begins with the impugned order dated February 20, 2013, passed by a lower court. The respondent, seeking to challenge this order, filed a review petition on April 2, 2013, under Order 47 Rule 1 CPC, alleging grounds such as an error apparent on the face of the record or new evidence. At the time of filing the review petition, no appeal had been preferred, satisfying the condition under Order 47 Rule 1(1)(a) CPC. Subsequently, the respondent filed an appeal against the same order, and the review petition was dismissed by the original court. The appellate court, where the respondent’s appeal was pending, proceeded to hear the appeal, prompting the petitioner to file a petition (CM(M) 130/2017) before the Delhi High Court. The petitioner sought to quash the appellate proceedings, arguing that the filing of the review petition precluded the respondent from pursuing an appeal. The Delhi High Court heard arguments from both parties and delivered its judgment on February 1, 2017, addressing the legal question of whether the appellate court had jurisdiction to hear the appeal.

Issues Involved in the Case:The primary issue was whether the filing of a review petition under Order 47 Rule 1 CPC bars a party from subsequently filing an appeal against the same decree or order after the review petition is dismissed. 

Subsidiary issues included:The interpretation of Order 47 Rule 1(1)(a) CPC, which allows a review petition from a decree or order from which an appeal is allowed but no appeal has been preferred.The effect of filing an appeal after a review petition on the jurisdiction of the court hearing the review.The impact of the dismissal of a review petition on the maintainability of a subsequently filed appeal.Whether the appellate court’s decision to hear the appeal violated the principles governing review and appellate jurisdiction.

Petitioner's submission: The petitioner argued that Order 47 Rule 1 CPC imposes a restriction on filing an appeal once a review petition is preferred against a decree or order. They contended that the respondent, having elected to file a review petition on April 2, 2013, was barred from subsequently filing an appeal, as this would constitute pursuing two inconsistent remedies. The petitioner relied heavily on the Supreme Court’s decision in Rekha Mukherjee v. Ashish Kumar Das & Ors. [(2005) 3 SCC 427], arguing that an appeal filed during the pendency of a review petition is not maintainable. They asserted that the respondent’s appeal was incompetent because the review petition, even though dismissed, exhausted the respondent’s right to challenge the order through an appeal. The petitioner urged the court to set aside the appellate proceedings, claiming that the appellate court lacked jurisdiction to hear the appeal in light of the prior review petition.

Respondent's submission: The respondent countered that the dismissal of the review petition restored their right to file an appeal, as no provision in the CPC explicitly prohibits an appeal after a review petition is rejected. They argued that Order 47 Rule 1(1)(a) only requires that no appeal be filed at the time the review petition is lodged, a condition they satisfied when filing the review on April 2, 2013. The respondent relied on Supreme Court precedents, including Thungabhadra Industries Ltd. v. Govt. of Andhra Pradesh [AIR 1964 SC 1372] and Kunhayammed & Ors. v. State of Kerala & Anr. [(2000) 6 SCC 359], to assert that the court hearing a review petition retains jurisdiction to dispose of it on merits, even if an appeal is filed subsequently, provided the appeal is not disposed of first. Since their review petition was dismissed and the appeal was still pending, the respondent contended that the appellate court had jurisdiction to hear the appeal. They urged the court to dismiss the petitioner’s petition, arguing that the appellate proceedings were lawful.

Detailed Discussion on Judgments and Citations: The Delhi High Court relied on three Supreme Court judgments to resolve the issue, each addressing the scope of Order 47 Rule 1 CPC and the relationship between review and appellate jurisdiction.

Rekha Mukherjee v. Ashish Kumar Das & Ors., (2005) 3 SCC 427:The petitioner heavily relied on this case, where the Supreme Court held that an appeal filed during the pendency of a review petition is not maintainable under Order 47 Rule 1 CPC. In Rekha Mukherjee, the respondents filed a review petition against a decree dismissing their suit for specific performance. During the review’s pendency, they filed an appeal, which the Supreme Court deemed incompetent because the review petition was still pending. The Court clarified that if a review is granted, the original decree is modified or ceases to exist, rendering an appeal against it infructuous. However, if the review is rejected, the original decree remains intact, and an appeal may be filed, subject to the appeal’s merits. The Delhi High Court distinguished this case, noting that in the present matter, the review petition had been dismissed before the appellate court heard the appeal, thus removing any bar to the appeal’s maintainability.

Thungabhadra Industries Ltd. v. Govt. of Andhra Pradesh, AIR 1964 SC 1372:Cited by the respondent and extensively discussed by the Court, this three-judge bench decision clarified that the crucial date for determining compliance with Order 47 Rule 1(1) is the date the review petition is filed. If no appeal has been filed on that date, the review petition is maintainable, and the court can dispose of it on merits, even if an appeal is filed later. The jurisdiction of the review court ends only if the appeal is disposed of before the review petition is decided. In Thungabhadra, the Supreme Court allowed a review petition to proceed because no appeal was filed when the review was lodged, and the appeal’s subsequent filing did not oust the review court’s jurisdiction. The Delhi High Court applied this principle, noting that the respondent’s review petition was filed when no appeal existed, and its dismissal before the appeal’s disposal preserved the appellate court’s jurisdiction.

Kunhayammed & Ors. v. State of Kerala & Anr., (2000) 6 SCC 359:Also cited by the respondent, this three-judge bench decision reaffirmed Thungabhadra’s holding. In Kunhayammed, the Supreme Court addressed a review petition filed before a High Court, followed by a special leave petition (SLP) under Article 136 of the Constitution. The Court held that the review petition’s maintainability depends on the absence of an appeal at the time of filing, and the review court can proceed unless the appeal is disposed of first. If a review is granted, the original decree merges into the reviewed decree, rendering an appeal against the original decree incompetent. The Delhi High Court found this precedent directly applicable, as the respondent’s review petition was dismissed, leaving the original order intact for the appeal.

Detailed Reasoning and Analysis of Judge:The Court focused on the statutory framework of Order 47 Rule 1 CPC and the authoritative interpretations provided by the Supreme Court. The Court’s analysis can be distilled into the following key points:

Interpretation of Order 47 Rule 1(1)(a): The Court emphasized that Order 47 Rule 1(1)(a) allows a review petition from a decree or order from which an appeal is allowed but no appeal has been preferred at the time of filing. The respondent satisfied this condition, as no appeal was filed on April 2, 2013, when the review petition was lodged. The subsequent filing of an appeal did not retroactively invalidate the review petition’s maintainability.

Jurisdiction of the Review Court: Relying on Thungabhadra and Kunhayammed, the Court held that a review court retains jurisdiction to dispose of a review petition on merits, even if an appeal is filed later, provided the appeal is not disposed of first. If the appeal is decided before the review, the review court’s jurisdiction ends. In this case, the review petition was dismissed before the appeal’s disposal, preserving the appellate court’s jurisdiction.

Effect of Review Dismissal: The Court clarified that the dismissal of a review petition leaves the original decree or order intact, allowing the party to pursue an appeal. Unlike a granted review, which modifies or replaces the original decree, a rejected review does not alter the decree’s status, making an appeal legally permissible. The petitioner’s reliance on Rekha Mukherjee was misplaced, as that case addressed an appeal filed during a pending review, not after its dismissal.

No Statutory Bar to Appeal: The Court found no provision in the CPC that bars an appeal after a review petition is filed and dismissed. The petitioner’s argument that the review petition constituted an election of remedy was rejected, as Order 47 Rule 1 does not impose such a restriction. The Court noted that the appellate court’s decision to hear the appeal was consistent with the legal position established by the Supreme Court.

Application to Facts: The Court applied these principles to the facts, noting that the respondent filed the review petition on April 2, 2013, when no appeal existed. The review’s dismissal and the subsequent appeal’s pendency did not violate Order 47 Rule 1. The appellate court’s jurisdiction to hear the appeal was upheld, as the appeal was not disposed of before the review’s dismissal.

Final Decision:The Delhi High Court dismissed the petitioner’s petition (CM(M) 130/2017), finding no infirmity in the appellate court’s decision to hear the respondent’s appeal. The Court held that the filing of a review petition does not bar a subsequent appeal, especially after the review is dismissed, and the appellate court had jurisdiction to proceed. All pending applications were also dismissed, and no costs were awarded.

Law Settled in the Case:  The case clarified several principles governing review and appellate jurisdiction under Order 47 Rule 1 CPC:

Maintainability of Review Petitions: A review petition is maintainable if no appeal has been filed at the time of its filing, as per Order 47 Rule 1(1)(a). The subsequent filing of an appeal does not invalidate the review petition.

Jurisdiction of Review Court: A court hearing a review petition retains jurisdiction to dispose of it on merits, even if an appeal is filed later, unless the appeal is disposed of first.

Effect of Review Dismissal: The dismissal of a review petition leaves the original decree or order intact, allowing the party to file an appeal without any statutory bar.

No Election of Remedy: Filing a review petition does not preclude a party from pursuing an appeal after the review’s dismissal, as Order 47 Rule 1 does not impose such a restriction.

Crucial Date for Compliance: The date of filing the review petition is determinative for assessing compliance with Order 47 Rule 1(1)(a), ensuring clarity in procedural rights.

Case Title: Parshottam Kumar Vs Hafiz Mohd Sami:Date of Order: February 1, 2017:Case No.: CM(M) 130/2017:Neutral Citation: 2017:DHC:627:Name of Court: High Court of Delhi:Name of Hon'ble Judge: Jayant Nath, J.

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.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

A.P. State Financial Corporation Vs. Gar Re-Rolling Mills

The doctrine of election  does not apply when proceedings differ in ambit and scope

Introduction:The doctrine of election is a fundamental principle in law that typically prevents a party from pursuing two inconsistent remedies for the same relief. However, its applicability becomes nuanced when statutory provisions explicitly provide for multiple remedies with differing scopes and objectives. The case of A.P. State Financial Corporation v. Gar Re-Rolling Mills & Another [(1994) 2 SCC 647] is a landmark judgment by the Supreme Court of India that addresses the interplay between the doctrine of election and the remedies available under Sections 29 and 31 of the State Financial Corporations Act, 1951 (the Act). The Court examined whether a State Financial Corporation (SFC), after initiating proceedings under Section 31 and obtaining an order, could abandon those proceedings and invoke Section 29 to recover its dues without being barred by the doctrine of election. This case study explores the factual and procedural background, the issues involved, the submissions of the parties, the judicial reasoning, and the law settled, with a specific focus on the doctrine of election.

Detailed Factual Background:The case involves two consolidated civil appeals: Civil Appeal No. 3689 of 1987 (A.P. State Financial Corporation v. Kota Subba Reddy and Others) and Civil Appeal No. 3216 of 1988 (A.P. State Financial Corporation v. Gar Re-Rolling Mills and Another). Both appeals arose from disputes between the Andhra Pradesh State Financial Corporation (the Corporation) and defaulting industrial concerns that had borrowed loans and failed to repay them.

In Civil Appeal No. 3689 of 1987, the respondent, Kota Subba Reddy, borrowed Rs 99,500 from the Corporation on December 27, 1966, to manufacture agricultural implements, securing the loan with a mortgage deed. The respondent defaulted on repayments, prompting the Corporation to file an application (O.P. No. 211 of 1969) under Section 31 of the Act before the District Judge, Guntur, seeking recovery of Rs 1,09,020.19 with interest. On September 7, 1971, the District Judge allowed the petition but reduced the future interest rate from 8.5% to 6%. The respondent appealed to the Andhra Pradesh High Court, which stayed execution on March 1, 1973, contingent on the respondent depositing one-fourth of the amount due and furnishing security. The respondent failed to comply, and on March 5, 1975, the High Court dismissed the appeal and allowed the Corporation’s cross-objections, restoring the 8.5% interest rate. The Corporation also filed a suit (O.S. No. 13 of 1974) to enforce the personal liability of the respondent and his guarantor, which was decreed. However, the respondent evaded enforcement by relocating the business, rendering it untraceable. Consequently, the Corporation invoked Section 29, issuing a newspaper advertisement for the sale of the respondent’s concern and accepting a tender of Rs 2,05,000. The respondent challenged this action through Writ Petition No. 235 of 1982, alleging that the Corporation, having pursued Section 31, could not invoke Section 29.

In Civil Appeal No. 3216 of 1988, M/s Gar Re-Rolling Mills borrowed Rs 2,94,000 on November 10, 1970, for its re-rolling mills business, executing a mortgage deed. The respondent defaulted on repayments, leading the Corporation to issue a sale advertisement under Section 29. The respondent filed Writ Petition No. 4187 of 1980, challenging the Section 29 action, and obtained a stay. The High Court dismissed the petition on December 14, 1981, upholding the Corporation’s action. The Corporation accepted a tender from M/s Bhagchandka Brothers, who took possession of the property. The respondent appealed to a Division Bench, which, relying on the Full Bench decision in the Kota Subba Reddy case, held that the Corporation could not invoke Section 29 after pursuing Section 31.

Detailed Procedural Background:In Civil Appeal No. 3689 of 1987, the Corporation’s application under Section 31 resulted in an order on September 7, 1971, which the respondent challenged in the High Court. The High Court’s dismissal of the appeal and the respondent’s failure to comply with conditional stay orders led the Corporation to pursue alternative recovery measures. After failing to enforce the decree against the respondent’s personal liability due to the respondent’s relocation, the Corporation invoked Section 29. The respondent’s writ petition (No. 235 of 1982) was referred to a Full Bench of the Andhra Pradesh High Court due to conflicting bench decisions on Section 29’s vires. The Full Bench, without addressing the vires, held that the Corporation could not invoke Section 29 after obtaining relief under Section 31, allowing the writ petition.

In Civil Appeal No. 3216 of 1988, the Corporation’s attempt to sell the respondent’s property under Section 29 was challenged in Writ Petition No. 4187 of 1980. The Single Judge dismissed the petition, affirming the Corporation’s right to proceed under Section 29. However, the Division Bench, following the Full Bench decision in the Kota Subba Reddy case, reversed the Single Judge’s order, prompting the Corporation to appeal to the Supreme Court.

The Supreme Court granted special leave in both cases to resolve the common legal question: whether the Corporation could invoke Section 29 after obtaining an order under Section 31 without executing it, particularly in the context of the doctrine of election.

Issues Involved in the Case: The primary issue was whether the doctrine of election barred the Corporation from invoking Section 29 of the Act to recover dues after initiating proceedings and obtaining an order under Section 31, which it subsequently abandoned.? 

Appellant (A.P. State Financial Corporation):The Corporation argued that the remedies under Sections 29 and 31 are distinct in scope and purpose, and the doctrine of election does not apply when remedies differ in ambit. Section 29 provides a self-contained mechanism for the Corporation to take over management or possession of a defaulting concern and sell its property without court intervention, making it a broader and more expeditious remedy. In contrast, Section 31 involves court-supervised reliefs, such as property attachment or management transfer, akin to execution proceedings. The phrase “without prejudice to the provisions of Section 29” in Section 31 explicitly preserves the Corporation’s right to invoke Section 29, even after pursuing Section 31, unless the Section 31 order is fully executed or the claim is rejected on merits. The Corporation contended that it could abandon Section 31 proceedings at any stage, including execution, if recovery seemed unlikely, and resort to Section 29 to protect its financial interests. It emphasized that simultaneous pursuit of both remedies was impermissible, but sequential pursuit was lawful, especially given the respondents’ dilatory tactics and failure to honor Section 31 orders. The Corporation cited Gujarat State Financial Corporation v. Natson Mfg. Co. (P) Ltd. [(1979) 1 SCC 193] to argue that Section 31 proceedings are not monetary claims but akin to attachment in execution, supporting its position that Section 29 remains available.

Respondents submission: The respondents argued that the doctrine of election applied, barring the Corporation from invoking Section 29 after choosing Section 31 and obtaining an order. They contended that both sections aim to recover dues, making them alternative remedies for the same relief. Once the Corporation elected to proceed under Section 31 and secured a court order, it was estopped from abandoning that remedy and invoking Section 29, as this would allow forum shopping and prejudice the respondents. The respondents relied on the Andhra Pradesh High Court’s Full Bench decision in the Kota Subba Reddy case, which held that pursuing Section 31 exhausted the Corporation’s right to invoke Section 29. They argued that the Corporation’s actions violated principles of fairness and equity, as it sought to bypass court orders under Section 31 to pursue a more aggressive remedy under Section 29. The respondents also challenged the Corporation’s abandonment of Section 31 proceedings as arbitrary, claiming it deprived them of the opportunity to contest the claims in a judicial forum.

Detailed Discussion on Judgments and Citations: The Supreme Court, in its judgment delivered by Dr. A.S. Anand J. (with Kuldip Singh J. concurring), extensively analyzed the interplay between Sections 29 and 31, the doctrine of election, and the cited precedent.

Gujarat State Financial Corporation v. Natson Mfg. Co. (P) Ltd., (1979) 1 SCC 193; AIR 1978 SC 1765: This case was relied upon by the Corporation and extensively discussed by the Court (Paras 10 and 14). In Natson, the Supreme Court held that an application under Section 31 is not a monetary claim but akin to an application for attachment of property in execution of a decree. The Court in the present case reaffirmed this, noting that Section 31 proceedings involve court-supervised reliefs like property attachment or management transfer, which differ fundamentally from the self-executing, broad remedy under Section 29. The Natson ruling supported the Corporation’s argument that Section 31 does not exhaust its remedies, as it is not a substantive monetary claim, and Section 29 remains available.

Eastern Book Company v. D.B. Modak, (2008) 1 SCC 1:This case was referenced in the document’s metadata (Pages 1–18) to affirm the copyright protection of the judgment’s text as published by the Eastern Book Company. It was not substantively discussed in the judgment but underscores the legal protection of the source material used in the SCC publication. The Court’s reliance on Natson was pivotal, as it clarified the distinct nature of Section 31 proceedings, undermining the respondents’ claim that Sections 29 and 31 are alternative remedies for the same relief, thus negating the doctrine of election’s applicability. Detailed Reasoning and Analysis of Judge: Dr. A.S. Anand J. delivered a comprehensive judgment, analyzing the statutory provisions, the doctrine of election, and equitable principles under Article 226. The Court’s reasoning can be distilled into the following key points: Distinct Scope of Sections 29 and 31: The Court meticulously examined Sections 29 and 31, concluding that they serve different purposes. Section 29 is a self-contained code, granting the Corporation expansive rights to take over management or possession of a defaulting concern and sell its property without court intervention. It is a broader remedy, encompassing both rights and enforcement procedures. Section 31, however, involves court-supervised reliefs, such as property attachment or management transfer, and is akin to execution proceedings rather than a monetary claim. The Court relied on Natson to affirm that Section 31 applications are not substantive monetary claims, reinforcing the distinction in scope (Paras 9–10, 14).  Interpretation of “Without Prejudice” Clause: The phrase “without prejudice to the provisions of Section 29” in Section 31 was central to the Court’s analysis. The Court interpreted this as a legislative intent to preserve the Corporation’s right to invoke Section 29, even after initiating Section 31 proceedings. This clause indicates that Section 31 is not intended to limit the Corporation’s remedies but to provide an additional, court-based option without extinguishing Section 29’s broader remedy. The Court held that the Corporation could abandon Section 31 proceedings at any stage, including execution, and resort to Section 29 if recovery under Section 31 proved impractical (Paras 12–13, 17).

Inapplicability of Doctrine of Election: The Court explicitly addressed the doctrine of election, holding that it does not apply when the remedies differ in ambit and scope. The doctrine typically applies when two remedies seek the same relief, allowing the party to elect one. However, since Sections 29 and 31 have distinct objectives—Section 29 being a direct, self-executing remedy and Section 31 involving court-supervised enforcement—the doctrine is inapplicable. The Court noted that applying the doctrine would lead to injustice, as it would bind the Corporation to a potentially ineffective remedy under Section 31, frustrating its ability to recover dues (Para 15).

Equitable Jurisdiction under Article 226:  The Court emphasized that equitable jurisdiction under Article 226 should promote honesty and good faith, not assist defaulting parties in evading legitimate claims. It held that there is no equity in favor of defaulting parties who fail to honor Section 31 orders, and courts should not interfere under Article 226 to frustrate the Corporation’s recovery efforts. The Court underscored that equity defends the law against crafty evasions, aligning with the Act’s purpose of enabling SFCs to recover dues efficiently to support industrialization (Para 18).

Limits on Simultaneous Pursuit:While affirming the Corporation’s right to switch remedies, the Court clarified that simultaneous pursuit of Sections 29 and 31 for the same relief is impermissible, as it would lead to inconsistent outcomes. Additionally, if a Section 31 claim is rejected on merits, the Corporation may be barred from invoking Section 29, depending on the case’s facts, to ensure fairness (Para 19).

Application to Facts: In Civil Appeal No. 3689 of 1987, the Court found that the respondent’s relocation frustrated the Corporation’s efforts to enforce the Section 31 order. The Corporation’s implicit abandonment of Section 31 proceedings and invocation of Section 29 were justified, as the respondent’s actions could not extinguish the Corporation’s recovery rights (Para 20). In Civil Appeal No. 3216 of 1988, the Court noted the respondent’s persistent delaying tactics and lack of intent to repay, upholding the Corporation’s Section 29 action as a legitimate response to the respondent’s non-compliance with Section 31 orders (Para 21).

Final Decision:The Supreme Court allowed both appeals, setting aside the Andhra Pradesh High Court’s judgments. In Civil Appeal No. 3689 of 1987, the Court overturned the Full Bench’s ruling, holding that the Corporation could invoke Section 29 after abandoning Section 31 proceedings. In Civil Appeal No. 3216 of 1988, the Court reversed the Division Bench’s decision, affirming the Single Judge’s dismissal of the writ petition and upholding the Corporation’s Section 29 action. The Court awarded costs of Rs 5,000 in each appeal, emphasizing the respondents’ dilatory conduct.

Law Settled in the Case: The judgment settled several key legal principles in the context of the doctrine of election and the State Financial Corporations Act:

Non-Applicability of Doctrine of Election: The doctrine of election does not apply when remedies under a statute, such as Sections 29 and 31 of the Act, differ in scope and purpose. The Corporation can choose between these remedies or switch from Section 31 to Section 29 without being barred by election, provided it abandons the earlier proceedings.

Preservation of Section 29 Rights: The phrase “without prejudice to the provisions of Section 29” in Section 31 preserves the Corporation’s right to invoke Section 29, even after obtaining a Section 31 order, unless the order is fully executed or the claim is rejected on merits.

Sequential but Not Simultaneous Remedies: The Corporation cannot pursue Sections 29 and 31 simultaneously for the same relief, but it can abandon Section 31 proceedings at any stage and resort to Section 29 if recovery under Section 31 is impractical.

Equitable Principles: Courts exercising jurisdiction under Article 226 should not assist defaulting parties in evading legitimate claims, as equity promotes honesty and prevents legal fraud. The Act’s purpose of enabling SFCs to recover dues for industrial financing must be upheld.

Limits on Remedy Switching: If a Section 31 claim is rejected on factual grounds, the Corporation’s ability to invoke Section 29 may be restricted, subject to the case’s specific circumstances.

Case Title: A.P. State Financial Corporation Vs. Gar Re-Rolling Mills and Another:Date of Order: February 10, 1994:Case No.: Civil Appeal No. 3216 of 1988:Citation: (1994) 2 SCC 647:Name of Court: Supreme Court of India:Name of Hon'ble Judges: Kuldip Singh and Dr. A.S. Anand, JJ.

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Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi