Inox India Private Limited v. Cryogas Equipment Private Limited
2024-03-13
ANIRUDDHA P.MAYEE, SUNITA AGARWAL
body2024
DigiLaw.ai
JUDGMENT : Sunita Agarwal, J. The instant First Appeal has been filed under Section 96 read with Order XLI of the Code of Civil Procedure, 1908, and under section 13 of the Commercial Courts Act, 2015, challenging the order of dismissal dated 01.04.2022 of the Commercial Trademark Suit No. 3 of 2019 on the ground that the suit is barred by law and the plaint is liable to be rejected under Order VII Rule 11 (d) of the CPC. The conclusion drawn by the Commercial Court is that the suit of the plaintiff is hit by the statutory bar under Section 15(2) of the Copyright Act, 1957. 2. Having exhaustively gone through the judgment and order impugned of the Commercial Court, we find that the court has dealt with two applications together namely the applications under Order VII Rule 11 of the CPC and under Order XXXIX Rule (1) and (2), CPC namely Exh. 48 and Exh.5; respectively, on the premise that in the previous order dated 26.9.2019 passed by the predecessor Judge, it was decided to proceed with the hearing of both the applications together. Resultantly, the learned Judge by the common order under challenge, while allowing the application under Order VII Rule 11, CPC and rejecting the application for interim injunction under Order XXXIX Rule 1, has begun to record the case of the plaintiff and the reliefs prayed by him and further the averments in the application under Order VII Rule 11, CPC in the judgment. Noticing that both the applications were to be heard conjointly, it has further proceeded to record the defense of the defendant Nos. 1 to 3 and noted the arguments of the learned advocates for the defendants as to why the suit be rejected. Some of the arguments of the defendants noted by the learned Judge are that :- “6.2 Arguments by the Advocate of Defendant no.1 - - The suit filed by the plaintiff is not tenable in the eyes of law and is to be rejected. - Plaintiff has not specified the proprietary nature of the property and the knowledge, technology and information of the commercial vehicle is 'publici juris'. Thus, the claim of protection under copyright does not subsist. - The infringement alleged by the plaintiff is scientifically and readily available in the literature, books pertaining to the subject.
- Plaintiff has not specified the proprietary nature of the property and the knowledge, technology and information of the commercial vehicle is 'publici juris'. Thus, the claim of protection under copyright does not subsist. - The infringement alleged by the plaintiff is scientifically and readily available in the literature, books pertaining to the subject. - Design codes in both the drawings are mentioned by the plaintiff as well as defendant no.1. Hence, the said IP design does not fall within the purview of the artistic work covered under section 2(c) of the Copy Right Act. - Defendant no. 1 has independently created his drawings by investing huge sum of money on experts. - On comparison of both the drawings i.e. the one claimed by the plaintiff and the other created by the defendants are not similar. Even the experts have opined that the drawings are different. Expert opinion is produced on record. - Defendant no.1 has also registered his drawings and obtained certification from PESO. Hence, plaintiff has no prima facie case for granting of interim relief. - The authorities cited by the plaintiff are not relevant to the facts of the present case. 6.3 Arguments by the Ld. Advocate of Defendant no.2- - Defendant No.2 is not using the drawings/manufacturing the commercial vehicle like semi-trailer truck as alleged by the plaintiff. Allegations against the defendant No.2 are therefore baseless and without any substance. Hence, the suit should be rejected. - Defendant No.2 holds expertise in supply of gas to the consumers. Defendant no.2 is nowhere connected with the disputed issue in the suit. Hence, there is no cause of action against defendant No.2. 6.4 Arguments of Defendant no. 3 & 4 : Defendant No. 3 & 4 submitted written submissions vide Ex.88. They have submitted that the plaintiff has filed false suit against them. Originally, plaintiff had not filed suit against defendant number 3 & 4 and eventually after filing of the suit, they have been joined as co-defendants to this suit. No reliefs have been claimed against defendant Nos. 3 & 4. Hence, the suit is liable to be rejected.” 3. The arguments of the learned advocate for the defendants on the maintainability of the suit are simultaneously noted in the following manner, - As per the say of the Plaintiff his copyright drawings are applied for making commercial vehicles.
No reliefs have been claimed against defendant Nos. 3 & 4. Hence, the suit is liable to be rejected.” 3. The arguments of the learned advocate for the defendants on the maintainability of the suit are simultaneously noted in the following manner, - As per the say of the Plaintiff his copyright drawings are applied for making commercial vehicles. Plaintiff has admitted that his company generated revenue of Rs. 122 crore by selling the products which is of alleged literary and artistic work in the present suit. Hence, undisputedly plaintiffs have reproduced and manufactured the semi trailer trucks more than 50 in number. - As per the provision in Copyright Act, Section 15(2), plaintiff seizes the copyright of the proprietary engineering drawings after production of 50 numbers. - It is admitted that said proprietary engineering drawings are claimed as Artistic work and are not registered under the Copyright Act as well as Design Act by the plaintiff. - Hence, as per the settled legal propositions laid down by the Hon'ble Apex Court as well as Hon'ble High Court, suit is not maintainable under O-7, R-11 of C.P.C and the plaint is required to be rejected as suit is barred by law. In support of his submissions, he submitted following authorities, which are as under- i. Indowind Energy Ltd. Vs. Wescare (I) Ltd. and Ors., (2010) SCC 306. ii. Industrial Development Corporation Orissa Limited and Ors. Vs. Regional Provident Fund Commissioner-II and Ors., 2002 (9) FLR 945. iii. Ritika Private Limited Vs. Biba Apparels Private Limited, 2016 (2) MIPR 0166. iv. IPEG Inc. & Ors. Vs. Kay Bee Engineers & Anr., 2016 (66) PTC 305 (Guj) (DB).” 4. The points of consideration formulated in the judgment are, “(i) Whether the present suit of the plaintiff is barred under section 15(2) of the Copyright Act, 1957? (ii) Whether the plaintiff is entitled to get the relief of interim injunction as prayed for ?” 5. On such considerations, the learned Judge has proceeded to deal with the impact of Section 15(2) of the Copyright Act and noted that the defendants have raised question of maintainability of the suit on the ground that the disputed Intellectual Property (IP) came to be infringed by the plaintiff, does not fall within the purview of artistic work under the Copyright Act, but it falls under the Designs Act, 2000.
Referring to the various judgments of the Delhi High Court and this Court, the learned Judge has proceeded to record that considering the statutory bar in Section 15(2) of the Copyright Act, it can be concluded that the suit is apparently barred by law, as Section 14 of the Copyright Act is not applicable under which the relief has been claimed by the plaintiff. The plaintiff looses protection under the Copyright Act after manufacturing 50 units of Trailers, the suit is barred by law and hence the plaint is required to be rejected under Order VII Rule 11 (d) of CPC. As the Court has found that the suit cannot be maintained, it has rejected the application under Order XXXIX Rule (1) and (2), CPC, as well. 6. During the course of arguments, various points have been urged by the learned counsel for the plaintiff/appellant that interpretation of Section 2(d) of the Designs Act would be required to ascertain as to whether the engineering design, with respect to which infringement of copyright has been claimed by the plaintiff, would fall within the meaning of design which is capable of being registered under the Designs Act, 2000, which has not been so registered. It is contended that apart from the Copyright with respect to engineering design, other reliefs have also been sought against the defendants namely the right of the plaintiff in the literature work, such as instructions for manufacturing, the know-how use of manufacturing/assembly the impugned products and that the defendants who were initially the employees of the plaintiff, have stolen the confidential information related to the design. The submission is that all these issues have not been looked into by the learned Judge and rejection of the plaint at its threshold is too harsh.
The submission is that all these issues have not been looked into by the learned Judge and rejection of the plaint at its threshold is too harsh. The learned advocate appearing for the respondents/defendants, however, would contend that on a conjoint reading of the Section 2(d) of the Designs Act and the Sections 14(c) and 15(2) of the Copyright Act, 1957, it is amply clear that where a design of an article is prepared for the production of an article, it is a design and registerable under the Designs Act, 2000 and under Section 14(C), the author for such design can claim Copyright, however, since such a design is registerable under the Designs Act and if the design has been used for production of the articles in industrial process for more than 50 times by the owner of the copyright or by any other person with his permission then such person ceases to have got right in such design. 7. The contention of the appellant is that the institution of the suit being barred by Section 15(2) of the Copyright Act can not be contended so as to reject the plaint under Order VII Rule 11(d), CPC. Section 15(2) of the Copyright Act does not bar institution of the suit in law. 8. While dealing with the above submissions as noted hereinabove, we find that the judgment of the Commercial Court suffers from inherent flaws in deciding the application filed under Order VII Rule 11, CPC. It is settled position in law that Order VII Rule 11 of the Code of Civil Procedure provides for rejection of the plaint and Clause(d) whereof specifies that “where the suit appears from statement in the plaint to be barred by any law”. Other Clauses in Order VII Rule 11, CPC for rejection of plaint at the threshold are :- “11.
Other Clauses in Order VII Rule 11, CPC for rejection of plaint at the threshold are :- “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 returned 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 Coun, 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.]” 9. A perusal of Section 15 of the Copyright Act indicates that in sub-section(1) it only provides that Copyright shall not subsist under this Act for any design, which is registered under the Designs Act, 2000. And sub-section(2) provides that Copyright in any design which is capable of being registered under the Designs Act, 2000, but which has not been so registered, shall cease as soon as any article to which the design has been applied has been reproduced more than fifty times by an industrial process by the owner of the copyright, or with his license, by any other persons. On a plain reading of the Copyright Act, 1957, it is evident that the said provision does not provide any statutory bar on institution of the suit for infringement of the Copyright Act.
On a plain reading of the Copyright Act, 1957, it is evident that the said provision does not provide any statutory bar on institution of the suit for infringement of the Copyright Act. Rather the effect of this provision is that in a case where Section 15(2) is attracted, it would not fall under Section 14 and the plaintiff cannot claim exclusive right under the Copyright Act so as to claim any relief in the suit for infringement of the Copyright. The result is that, it can be said that since the plaint does not disclose a cause of action or the suit cannot proceed from the averments in the plaint itself, or the plaintiff could not show or establish that it can claim protection of Section 14 of the Copyright Act, 1957 and in view of Section 15(2) of the Copyright Act, 1957 the suit cannot proceed and is liable to fail at its threshold. 10. Understanding the law of Rejection of Plaint under Order VII Rule 11, CPC, we may note that the Apex Court in the case of Kamla and Others vs. K.T. Eshwara Sa and Others [ (2008) 12 SCC 661 ] has held that it is settled law that Order VII Rule 11 (d) of the Act has limited application. It must be shown that the suit is barred under any law. Such a conclusion must be drawn from the averments made in the plaint. The different clauses in Order VII Rule 11 should not be mixed up. Where in a given case, the application for rejection of the plaint may be filed on more than one ground as specified in various sub-clauses thereof, a clear finding to that effect must be arrived at. What would be relevant for invoking Clause (d) of Order VII Rule 11 of the Code, is the averments made in the plaint. For that purpose, there cannot be any addition or subtraction. For the purpose of invoking Order VII Rule 11(d) of the Code, no amount of evidence can be looked into nor on the issue on the merits of the matter which may arise, would be within the realm of the Court at that stage.
For that purpose, there cannot be any addition or subtraction. For the purpose of invoking Order VII Rule 11(d) of the Code, no amount of evidence can be looked into nor on the issue on the merits of the matter which may arise, would be within the realm of the Court at that stage. It is held by the Apex Court therein that it is one thing to say that the averments made in the plaint on their face disclose no cause of action, but it is another thing to say that although the same discloses a cause of action, the suit is barred by law. It is further noted in paragraph Nos. 40 and 41 of the said decision as under :- “40. Order VII Rule 11(d) of the Code serves a broad purpose as has been noted in Liverpool & London S.P. & I Association Ltd. v. M.V. Sea Success I & Anr. [ (2004) 9 SCC 512 ] in the following terms: "The idea underlying Order 7 Rule 11(a) is that when no cause of action is disclosed, the courts will not unnecessarily protract the hearing of a suit. Having regard to the changes in the legislative policy as adumbrated by the amendments carried out in the Code of Civil Procedure, the courts would interpret the provisions in such a manner so as to save expenses, achieve expedition and avoid the court's resources being used up on cases which will serve no useful purpose. A litigation which in the opinion of the court is doomed to fail would not further be allowed to be used as a device to harass a litigant. [See Azhar Hussain v. Rajiv Gandhi (1986) Supp SCC 315" at pp. 324-35]" But therein itself, it was held: "Whether a plaint discloses a cause of action or not is essentially a question of fact. But whether it does or does not must be found out from reading the plaint itself. For the said purpose the averments made in the plaint in their entirety must be held to be correct. The test is as to whether if the averments made in the plaint are taken to be correct in their entirety, a decree would be passed." 4.1 In C. Natrajan v. Ashim Bai & Anr.
For the said purpose the averments made in the plaint in their entirety must be held to be correct. The test is as to whether if the averments made in the plaint are taken to be correct in their entirety, a decree would be passed." 4.1 In C. Natrajan v. Ashim Bai & Anr. [ 2007 (12) SCALE 163 ], this Court held: "An application for rejection of the plaint can be filed if the allegations made in the plaint even if given face value and taken to be correct in their entirety appear to be barred by any law. The question as to whether a suit is barred by limitation or not would, therefore, depend upon the facts and circumstances of each case. For the said purpose, only the averments made in the plaint are relevant. At this stage, the court would not be entitled to consider the case of the defence. {See [Popat and Kotecha Property v. State Bank of India Staff Association [ (2005) 7 SCC 510 ]}" 11. In paragraph No. 44, referring to the decision of the Apex Court in Popat and Kotecha Property vs. SBI Staff Assn. [ (2005) 7 SCC 510 ], the Apex Court observed that :- “44. In Popat and Kotecha Property v. State Bank of India Staff Association [ (2005) 7 SCC 510 ], the question which arose for consideration was as to whether the suit was barred by limitation. It was held: "22. There is distinction between "material facts" and "particulars". The words "material facts" show that the facts necessary to formulate a complete cause of action must be stated. Omission of a single material fact leads to an incomplete cause of action and the statement or plaint becomes bad. The distinction which has been made between "material facts" and "particulars" was brought by Scott, L.J. in Bruce v. Odhams Press Ltd. 23. Rule 11 of Order 7 lays down an independent remedy made available to the defendant to challenge the maintainability of the suit itself, irrespective of his right to contest the same on merits. The law ostensibly does not contemplate at any stage when the objections can be raised, and also does not say in express terms about the filing of a written statement.
The law ostensibly does not contemplate at any stage when the objections can be raised, and also does not say in express terms about the filing of a written statement. Instead, the word "shall" is used clearly implying thereby that it casts a duty on the court to perform its obligations in rejecting the plaint when the same is hit by any of the infirmities provided in the four clauses of Rule 11, even without intervention of the defendant. In any event, rejection of the plaint under Rule 11 does not preclude the plaintiffs from presenting a fresh plaint in terms of Rule 13." This Court opined that therein questions of fact were to be determined.” 12. It was noted therein that the question for consideration was as to whether the suit was barred by limitation. It was held that there is distinction between “material facts” and “particulars”. The words “material facts” show that the facts necessary to formulate a complete cause of action must be stated. Formulation of a single material facts leads to incomplete cause of action and the statement of claim becomes vague. This distinction made between ‘material facts’ and ‘particulars’ was noted therein with the aid of decision in [(1936) 1 ALL ER 287 (CA)] in the case of Bruce vs. Odhams Press Ltd. 13. It was held in Popat and Kotecha Property that Order VII Rule 11 lays down an independent remedy made available to the defendant to challenge the maintainability of the suit itself irrespective of his right to contest the suit on merits. The law ostensibly does not contemplate at any stage when the objections can be raised and also does not say in express terms about the filling of written statement. Instead the word ‘shall’ used clearly implies thereby that it casts a duty on the Court to perform its obligation in rejecting the plaint when the said is hit by any of the infirmities provided in the four Clauses of Rule 11, even without intervention of the defendants. In any event, rejection of the plaint under Order 11, does not preclude the plaintiff from presenting a fresh plaint in terms of Rule 13. 14. We may note that Rule 12 of Order VII further provides that where a plaint is rejected, the Judge shall render an order to that effect with the reasons for such order. 15.
In any event, rejection of the plaint under Order 11, does not preclude the plaintiff from presenting a fresh plaint in terms of Rule 13. 14. We may note that Rule 12 of Order VII further provides that where a plaint is rejected, the Judge shall render an order to that effect with the reasons for such order. 15. The question while considering the effect of Clause (a) of Order VII Rule 11 would be that no cause of action has been disclosed in the plaint or no cause of action exist so as to maintain the suit, as ultimately if the allegations made in the plaint even if given face value and taken to be correct for their entirety, no relief can be granted to the plaintiff. 16. The said question whether the plaint discloses a cause of action or not, is an essential question of fact and must be found from the reading the plaint itself. For the said purpose, the averments made in the plaint in their entirety must be held to be correct. The test is as to whether if the averments made in the plaint are taken correct in their entirety, a decree could be passed. This test laid down for consideration of rejection of plaint under Order VII Rule 11(a) cannot be mixed up with the requirement of Rule 11(d) of Order VII, which provides for the rejection of plaint if the allegations made in the plaint even if given face value and taken to be correct in their entirety, appears to be barred by any law. 17. The above noted two clauses cannot be mixed up while deciding the application under Order VII Rule 11, CPC. It may be a different aspect where the plaint is liable to be rejected under both the Clauses of Order VII Rule 11(a) and (d), in the facts of a given case on reading of the plaint itself. 18. In the instant case, the learned Judge presiding the Commercial Court has committed an error of law in mixing two clauses (a) and (d) of Order VII Rule 11 in rejecting the plaint on the premise that the suit is barred by Section 15(2) of the Copyright Act, whereas no bar for institution of the Commercial Suit claiming infringement of copyright has been provided therein. 19.
19. Secondly, the learned Judge presiding the Commercial Court has committed an error of law by deciding both the applications under Order VII Rule 11, CPC and Order XXXIX Rule (1) & (2) CPC, for rejection of plaint and interim injunction (Exh. 48 and Exh. 5; respectively), by a common judgment while noticing the arguments of the defendants, their defence for the claim of rejection alongwith the claim of rejection of the suit at its threshold. Though in the concluding part of the judgment, the defense of the defendants or the evidence of the parties have not been discussed, but the construction of the judgment itself is contrary to the settled principle of law for invoking Order VII Rule 11(d), CPC. For the purpose, the relevant are the averments made in the plaint and there cannot be any addition or subtraction. The broad principle is that the Court at the stage of Order VII Rule 11 CPC would not consider any evidence or enter into any disputed questions of facts or law. The issues on the merits of the matter which may arise between the parties would not be within the realm of the Court at that stage. All the issues shall not be the subject matter of an Order under the said provisions (Reference Kamla & Ors. (supra)). 20. For the above discussion, we are of the considered opinion that the impugned judgment and order dated 1.4.2022 passed by the Commercial Court for allowing the application Exh. 48 under Order VII Rule 11 CPC, rejecting the plaint under clause (d) of the said provision, cannot be sustained. However, the categorical assertion of the learned counsel for the respondent that the engineering design in dispute is capable of being registered under the Designs Act and since it has not been registered, the design would continue to enjoy the copyright protection under the Copyright Act so long as threshold limit of its application of an article by an industrial process for more than 50 times is reached. But once that limit is crossed, the Section 15(2) of the Copyright Act, 1957 would come into play and such design would loose its copyright protection under the Copyright Act.
But once that limit is crossed, the Section 15(2) of the Copyright Act, 1957 would come into play and such design would loose its copyright protection under the Copyright Act. Considering the said submissions, we find that this aspect of the matter is to be looked into in light of the arguments made by the learned counsel for the plaintiff that the engineering design with respect to which copyright is claimed, does not fall within the meaning of Section 2(d) of the Designs Act, 2000, a design which is capable of being registered under the Designs Act, 2000, section 15(2), thus, would have no application at all. 21. For the purpose, while setting aside the judgment and order dated 1.4.2022 passed by the Commercial Court, Vadodara in Commercial Trademark Suit No. 3 of 2019, we relegate the matter for fresh consideration by the Commercial Court while restoring the Commercial Suit to its original number, as Commercial Trademark Suit No. 3 of 2019, reviving both the applications namely under Order VII Rule 11 CPC and under Order XXXIX Rule (1)(2) CPC being the Exh. 48 and Exh. 5; respectively. We provide that the concerned court shall deal with both the applications simultaneously by passing separate orders on the same date, which are required to be decided within a period of four weeks from today, without granting any unnecessary adjournments to any of the parties. 22. It is further clarified that our directions that both the applications under Order VII Rule 11 and Order XXXIV Rule (1) and (2) CPC shall be decided simultaneously, shall not be mis-understood to pass a common order again, to repeat the mistake, which has been made by the learned Judge passing the judgment impugned. It is further clarified that the Court concerned shall decide the matter independently keeping in mind the legal principles stated above without being influenced by any of the observations on the facts of the instant case made hereinabove. 23. With the above observations and directions, both the appeals stand allowed. The Civil Applications also stand disposed of accordingly. No order as to costs.