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2024 DIGILAW 1447 (CAL)

Baynee Industries v. Rajiv Rosha

2024-08-14

KRISHNA RAO

body2024
JUDGMENT : Krishna Rao, J. 1. The plaintiff has filed the suit for a decree for a sum of Rs.19,77,48,220.13/- along with interest at the rate of 18% per annum. 2. The defendant has filed the present application being GA 1 of 2023 under Order VII Rule 11(d) of the Code of Civil Procedure, 1908, for rejection of plaint. On the following grounds : (a) The suit is barred by the laws of limitation, (b) It does not disclose a cause of action which can be adjudicated by this Court, (c) The suit is barred by an existing law, (d) Non-joinder of necessary parties, (e) No territorial jurisdiction of Court; (f) Presence of Arbitration Clause, (g) Specific admission by plaintiff, (h) No crystalized claim; (i) Technical incurable defects. 3. Mr. Shourjyo Mukherjee, Learned Advocate representing the defendant submits that the foundation of the plaint case, is that the defendant wrongfully interfered with the business of the plaintiff due to which the plaintiff is entitled for damages. He submits that there is no pleading in the plaint to the effect as to how the defendant’s act or conduct or the patent itself interfered with the business of the plaintiff. He submits that there is no correlation between the claim made by the plaintiff and the allegations made in the plaint. 4. Mr. Mukherjee submits that the plaintiff has pleaded that Tata Motors Limited blocked the purchase orders of the plaintiff but it is nowhere pleaded in the plaint that the Tata Motors Limited blocked the purchase orders of the plaintiff in view of the act or patent of the defendant. He submits that there is no single averment made in the plaint that due to blocking of purchase order of the plaintiff by the Tata Motors Limited, downfall in the business of the plaintiff was caused by the defendant’s patent. 5. Mr. Mukherjee submits that as per the case of the plaintiff towards the end of January, 2019, the plaintiff was constrained to stop supplying the products to Tata Motors Limited but at the same time, it is also pleaded that the plaintiff supplied the same product to Tata Motors Limited till October, 2021. 6. Mr. 5. Mr. Mukherjee submits that as per the case of the plaintiff towards the end of January, 2019, the plaintiff was constrained to stop supplying the products to Tata Motors Limited but at the same time, it is also pleaded that the plaintiff supplied the same product to Tata Motors Limited till October, 2021. 6. Mr. Mukherjee submits that the plaint filed by the plaintiff does not disclose as to how the cause of action for claiming damages in the suit arose as the plaint does not contain any pleading as to the correlation between defendant’s patent and downfall in the business of the plaintiff. He submits that there is no pleading in the plaint that Tata Motors Limited stopped accepting products from the plaintiff due to the patent of the defendant. He submits that the plaint does not disclose as to how and from when the plaintiff has suffered the damages. He submits that the plaint does not disclosed any period during which the plaintiff has suffered loss and damages and the plaint also does not disclose how and in what manner the defendant’s conduct has caused any loss and damages to the plaintiff. 7. Per contra, Mr. Jishnu Chowdhury, Learned Advocate representing the plaintiff submits that the plaintiff has been manufacturing and supplying various automobile components to Tata Motors Limited since 1980, along with other major players in the automotive market including Hindustan Motors Limited, AVTEC Auto Limited etc. 8. Mr. Chowdhury submits that plaintiff started supplying/ manufacturing the exhaust brake units exclusively for the use of Tata Motors Limited. Over 95% of the requirement of exhaust brake units was purchased from the plaintiff and the position continued till the year 2019. He submits that in the year 2018, the plaintiff came to know that the defendant who is a business rival is also supplying the same products to Tata Motors Limited on the basis of drawings provided by Tata Motors Limited. 9. Mr. Chowdhury submits that the plaintiff enquired and discovered that the defendant was also engaged to supply exhaust brake units to Tata Motors Limited and in the process, the plaintiff came to know that the exhaust brake units which was supplied by the defendant was patented and the defendant alleged to have exclusive right to supply to Tata Motors Limited. 10. Mr. 10. Mr. Chowdhury submits that Tata Motors Limited had started to ignore the plaintiff and on the contrary started increasing its business with the defendant. He submits that the plaintiff has also came to know that since the plaintiff has been portrayed as an unauthorized supplier and the defendant claimed to have a patented right, Tata Motors Limited refused to do any further business with the plaintiff. 11. Mr. Chowdhury submits that on 15th January, 2019, the plaintiff was served the notice by the defendant wherein it was alleged that the plaintiff is illegally offering for sale exhaust brake unit assembly system and also threatened the plaintiff not to use such product failing which severe consequences would cause. 12. Mr. Chowdhury submits that on receipt of the said notice, the plaintiff has inquired into the matter and came to know that the patent obtained by the defendant in respect of exhaust brake assembly unit was illegal and does not constitute any inventive steps. He submits that immediately, the plaintiff has filed an application for post-grant opposition alleging that the patent granted to the defendant lacks inventive steps and is not an innovation. He submits that on the application of the plaintiff, by an order dated 1st January, 2022, the patent granted to the defendant was revoked. 13. Mr. Chowdhury submits that by the time when the plaintiff has obtained an order from the competent authority wherein the patent granted to the defendant was revoked, Tata Motors Limited has completely stopped its business with the plaintiff and due to which the plaintiff has suffered severe loss and damages in the business and thus the plaintiff has filed the suit. 14. Mr. Chowdhury by referring paragraphs 11, 12, 13, 16, 17, 20, 23, 31 and 32 of the plaint submits that the plaintiff has shown sufficient cause of action for filing the suit against the defendant. 15. Heard the Learned Counsel for the respective parties, perused the materials on record. Though the defendant has filed an application under Order VII Rule 11(d) of the Code of Civil Procedure, 1908, for rejection of plaint on the several grounds as mentioned in paragraph 2 (supra) but the Learned Counsel for the defendant had argued the matter only with regard to the cause of action and written argument is also filed with regard to cause of action. 16. 16. Order VII Rule 11 of the Code of Civil Procedure, 1908, reads as follows : “11. Rejection of plaint.— The plaint shall be rejected in the following cases:— (a) where it does not disclose a cause of action; (b) where the relief claimed is undervalued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed by the Court, fails to do so; (c) where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the Court to supply the requisite stamp-paper within a time to be fixed by the Court, fails to do so; (d) where the suit appears from the statement in the plaint to be barred by any law; [(e) where it is not filed in duplicate;] [(f) where the plaintiff fails to comply with the provisions of rule 9:] [Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature from correcting the valuation or supplying the requisite stamp-paper, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff.]” 17. The specific case made out by the defendant in the present application is that there is no pleading in the plaint as to how the cause of action arose and the plaint does not disclose any cause of action. 18. As per the case of plaintiff that from the year 1995-96, the plaintiff has been manufacturing Exhaust Brake Units for Tata Motors Limited and is also involved with the development of the same. The plaintiff was involved with the development of the Throttled Valve and Throttled Valve Lever since the month of December, 1995 and the plaintiff has continuously improved its standard and maintained consistent quality in the products. Tata Motors Limited used to source over 95% of its requirements of Exhaust Brake Unit Assembly for its manufacturing units from the plaintiff and started placing orders since 17th July, 2005. 19. Tata Motors Limited used to source over 95% of its requirements of Exhaust Brake Unit Assembly for its manufacturing units from the plaintiff and started placing orders since 17th July, 2005. 19. The plaintiff continued its business with Tata Motors Limited for supplying the Exhaust Brake Assembly and the position continued till 2019 and in between the tenure of the business relationship of the plaintiff and Tata Motors Limited, the plaintiff had also supplied equipment for Bharat Standard -I, Bharat Standard – II and Bharat Standard – III vehicles. In the year 2016, Tata Motors Limited, called upon the plaintiff to develop an Exhaust Brake Assembly as per drawing TML Part No. 216343710101/0104, dated 5th April, 2016 since there was a change in the emission norms after 2017. 20. On 28th May, 2018, the plaintiff received a notice by an email from the defendant, alleging that the product which was being supplied by the plaintiff to the Tata Motors Limited was patented and in the same notice, the defendant had also mentioned that the drawings were provided to them by Tata Motors Limited. The plaintiff has inquired into the matter and came to know that the patent obtained by the defendant in respect of Exhaust Brake Unit Assembly was illegal and does not constitute any inventive steps. 21. The plaintiff has filed an application for post-grant opposition alleging that the patent granted to the defendant lacks inventive steps and is not an innovation. On the application of the plaintiff, by an order dated 1st January, 2022, the patent granted to the defendant was revoked by the competent authority. 22. It is the specific case made out by the plaintiff that towards the end of January 2019, Tata Motors Limited blocked its purchase orders and refused to accept delivery from the plaintiff. In paragraph 32 of the plaint it is mentioned that defendant has interfered with the business of the plaintiff with Tata Motors Limited and the business of the plaintiff come to an end due to which the plaintiff has suffered loss and damages. The plaintiff has described the loss and damages in the said paragraph amounting to Rs.19,77,48,220.13/-. 23. In paragraph 32 of the plaint it is mentioned that defendant has interfered with the business of the plaintiff with Tata Motors Limited and the business of the plaintiff come to an end due to which the plaintiff has suffered loss and damages. The plaintiff has described the loss and damages in the said paragraph amounting to Rs.19,77,48,220.13/-. 23. In paragraphs 33 and 34 of the plaint, the plaintiff has further mentioned that the plaintiff has issued notice to the defendant on 19th May, 2022, calling upon the defendant for damages and on receipt of the notice, the defendant has sent reply on 6th June, 2022, denying the claim of the plaintiff. 24. Under Order VII, Rule 11 of the Code of Civil Procedure, 1908, the Court has jurisdiction to reject the plaint where it does not disclose a cause of action, where the relief claimed is undervalued and the valuation is not corrected within a time as fixed by the Court, where insufficient court fee is paid and the additional court fee is not supplied within the period given by the Court, and where the suit appears from the statement in the plaint to be barred by any law. Rejection of the plaint in exercise of the powers under Order VII, Rule 11 of the Code would be on consideration of the principles laid down by the Hon’ble Supreme Court in the case of T. Arivandandam v. T.V. Satyapal and Another, (1977) 4 SCC 467 , the Hon’ble Court has held that if on a meaningful, not formal, reading of the plaint it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, the Court should exercise its power under Order VII Rule 11 of the Code taking care to see that the ground mentioned therein is fulfilled. In Roop Lal Sethi v. Nachhattar Singh Gill, (1982) 3 SCC 487 , the Hon’ble Supreme Court has held that where the plaint discloses no cause of action, it is obligatory upon the court to reject the plaint as a whole under Order VII, Rule 11 of the Code, but the rule does not justify the rejection of any particular portion of a plaint. Therefore, the High Court could not act under Order VII, Rule 11(a) of the Code of Civil Procedure, 1908 for striking down certain paragraphs nor the High Court could act under Order VI, Rule 16 to strike out the paragraphs in absence of anything to show that the averments in those paragraphs are either unnecessary, frivolous or vexatious, or that they are such as may tend to prejudice, embarrass or delay the fair trial of the case, or constitute an abuse of the process of the court. In ITC Ltd. v. Debts Recovery Appellate Tribunal, (1998) 2 SCC 70 , it was held that the basic question to be decided while dealing with an application filed by the defendant under Order VII, Rule 11 of the Code is to find out whether the real cause of action has been set out in the plaint or something illusory has been projected in the plaint with a view to get out of the said provision. In Saleem Bhai and Others v. State of Maharashtra and Others, (2003) 1 SCC 557 , the Hon’ble Supreme Court has held that the trial court can exercise its powers under Order VII Rule 11 of the Code at any stage of the suit before registering the plaint or after issuing summons to the defendant at any time before the conclusion of the trial and for the said purpose the averments in the plaint are germane and the pleas taken by the defendant in the written statement would be wholly irrelevant at that stage. In Popat and Kotecha Property v. State Bank of India Staff Association, (2005) 7 SCC 510 , the Hon’ble Court has culled out the legal ambit of Rule 11 of Order VII of the Code in these words : "There cannot be any compartmentalization, dissection, segregation and inversions of the language of various paragraphs in the plaint. If such a course is adopted it would run counter to the cardinal canon of interpretation according to which a pleading has to be read as a whole to ascertain its true import. It is not permissible to cull out a sentence of a passage and to read it out of the context in isolation. If such a course is adopted it would run counter to the cardinal canon of interpretation according to which a pleading has to be read as a whole to ascertain its true import. It is not permissible to cull out a sentence of a passage and to read it out of the context in isolation. Although it is the substance and not merely the form that has to be looked into, the pleading has to be construed as it stands without addition or subtraction of words or change of its apparent grammatical sense. The intention of the party concerned is to be gathered primarily from the tenor and terms of his pleadings taken as a whole. At the same time, it should be borne in mind that no pedantic approach should be adopted to defeat justice on hair-splitting technicalities". 25. From the aforesaid, it is apparent that the plaint cannot be rejected on the basis of the allegations made by the defendant in his written statement or in an application for rejection of the plaint. The Court has to read the entire plaint as a whole to find out whether it discloses a cause of action and if it does, then the plaint cannot be rejected by the Court exercising the powers under Order VII, Rule 11 of the Code. Essentially, whether the plaint discloses a cause of action, is a question of fact which has to be gathered on the basis of the averments made in the plaint in its entirety taking those averments to be correct. A cause of action is a bundle of facts which are required to be proved for obtaining relief and for the said purpose, the material facts are required to be stated but not the evidence except in certain cases where the pleadings relied on are in regard to misrepresentation, fraud, wilful default, undue influence or of the same nature. So long as the plaint discloses some cause of action which requires determination by the court, mere fact that in the opinion of the Judge the plaintiff may not succeed cannot be a ground for rejection of the plaint. 26. So long as the plaint discloses some cause of action which requires determination by the court, mere fact that in the opinion of the Judge the plaintiff may not succeed cannot be a ground for rejection of the plaint. 26. After going through the plaint of the instant case as a whole it is found that the plaintiff has not specifically mentioned the word “cause of action” but if paragraphs 17, 20, 23, 31, 32, 33 and 34 read together, it will reveals that there is sufficient cause of action disclosed in the plaint. 27. In view of the above, this Court did not find any merit in the application filed by the defendant under Order VII, Rule 11(d) of the Code of Civil Procedure, 1908. 28. G.A. No. 1 of 2023 is dismissed.