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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G.S. Patel, J.
CTR MANUFACTURING INDUSTRIES LTD. – Plaintiff
Versus
SERGI TRANSFORMER EXPLOSION PREVENTION TECHNOLOGIES PRIVATE LIMITED & Ors. – Defendants
NOTICE OF MOTION NO.191 OF 2013 AND NOTICE OF MOTION NO.192 OF 2013 AND NOTICE OF MOTION NO. 193 OF 2013 AND NOTICE OF MOTION NO. 665 OF 2012 IN SUIT NO. 448 OF 2012
Decided on : 28-6-2016
The Court dismissed all four contempt Motions filed by the Plaintiff (CTR) against the Defendant (Sergi) for alleged breach of restraint orders passed in a patent infringement suit. The Court held that the Plaintiff's application for striking out the Defendant's defense was not maintainable as it was an attempt to indirectly achieve the striking out of the Defendant's Counter-Claim and other pending applications, thereby knocking the Defendant out of the market. The Court also held that the Defendant's submission of drawings to a tender floated by a third party during a restraint-free period did not amount to contempt. The Court further held that the Defendant's undertaking not to sell its products to a particular entity during the pendency of the suit did not extend to a prohibition on participating in the tender process.
Fact of the Case:
The Plaintiff (CTR) filed a patent infringement suit against the Defendant (Sergi) and obtained an ex parte ad-interim injunction restraining Sergi from selling its allegedly infringing product to a particular entity (DTL). Sergi filed an appeal against the injunction order, and the Appeal Court stayed the operation of the injunction. During the pendency of the appeal, Sergi submitted its drawings to DTL for a tender. CTR filed four contempt Motions against Sergi, alleging breach of the injunction order and seeking reliefs such as arrest and attachment of Sergi's directors and properties, and striking out of Sergi's defense. Sergi filed an Affidavit in Reply denying the allegations of contempt and submitting that it had not sold any products to DTL during the pendency of the injunction order.
Finding of the Court:
The Court held that the Plaintiff's application for striking out the Defendant's defense was not maintainable as it was an attempt to indirectly achieve the striking out of the Defendant's Counter-Claim and other pending applications, thereby knocking the Defendant out of the market. The Court also held that the Defendant's submission of drawings to a tender floated by a third party during a restraint-free period did not amount to contempt. The Court further held that the Defendant's undertaking not to sell its products to a particular entity during the pendency of the suit did not extend to a prohibition on participating in the tender process.
Issues: 1. Whether the Plaintiff's application for striking out the Defendant's defense was maintainable? 2. Whether the Defendant's submission of drawings to a tender floated by a third party during a restraint-free period amounted to contempt? 3. Whether the Defendant's undertaking not to sell its products to a particular entity during the pendency of the suit extended to a prohibition on participating in the tender process?
Ratio Decidendi: 1. The Court held that the Plaintiff's application for striking out the Defendant's defense was not maintainable as it was an attempt to indirectly achieve the striking out of the Defendant's Counter-Claim and other pending applications, thereby knocking the Defendant out of the market. The Court observed that the Plaintiff's true intent behind these Motions was to get Sergi out of the way and not to uphold the dignity or prestige of the Court or the sanctity of its orders. 2. The Court held that the Defendant's submission of drawings to a tender floated by a third party during a restraint-free period did not amount to contempt. The Court observed that the Defendant had not sold any products to DTL during the pendency of the injunction order and that the submission of drawings was not a sale. 3. The Court held that the Defendant's undertaking not to sell its products to a particular entity during the pendency of the suit did not extend to a prohibition on participating in the tender process. The Court observed that the undertaking was limited to a prohibition on selling products and did not extend to a prohibition on participating in the tender process.
Final Decision: The Court dismissed all four contempt Motions filed by the Plaintiff against the Defendant.
GENERAL
1. These are four Notices of Motion under Order 39 Rule 2A and 11 of the Code of Civil Procedure, 1908 (“CPC”). All are filed by the Plaintiff (“CTR”), alleging that the Defendant (“Sergi”) is in repeated and contumacious breach of restraint orders passed in CTR’s patent infringement suit. This common judgment disposes of all four Notices of Motion.
2. I heard Mr. Seervai for CTR and Mr. Chagla for Sergi at some length. They took me through this record; no easy task, I might add, for not only do the Notices of Motion overlap, but they are also tied hand and foot to, and share a history with, CTR’s principal Notice of Motion No. 497 of 2014 for injunctive relief. That Notice of Motion is now separated from this group, since I decided it by a judgment dated 23rd October 2015. There, I held for CTR and against Sergi on the issue of infringement of CTR’s patent, one that relates to an explosion and fire detection technology for use in electrical transformers. Sergi is in appeal. It seems that on 1st December 2015, the Appeal Court stayed the order on the Notice of Motion; CTR moved the Supreme Court from that appellate stay order. On 16th December 2015, the Supreme Court set aside the appellate order and put in place its own earlier order of 25th May 2012, one to which I will presently return. That order now governs the parties. The appeal is pending hearing and final disposal before the Appellate Bench of this Court.
AN OVERVIEW OF THE FOUR MOTIONS
3. In this judgment, I refer to these applications as ‘contempt Motions’; I do not propose to spend time on overly nice distinctions between applications such as these under the CPC and others under the Contempt of Courts Act. Apart from anything else, this is not a distinction that CTR itself has ever been careful to make, for it refers to its own applications as ‘contempt applications’ throughout.
4. CTR filed the present Suit as Civil Suit No. 1 of 2010 in the Thane District Court. On Sergi filing a Counter-Claim, in view of the proviso to Section 104 of the Patents Act, 1970, the Suit and the Counter-Claim were both transferred to this Court, the Suit being numbered as Suit No. 488 of 2012.
5. Notice of Motion No. 193 of 2013 — “the First Contempt Motion”; “NM 193”: CTR originally filed this as Civil Miscellaneous Application No.68 of 2010 on 23rd March 2010 before the Thane District Court under Order 39 Rule 2-A of the CPC, alleging breach of an ad-interim order dated 15th February 2010. Sergi filed a reply on 26th March 2010. CTR filed a rejoinder, and then Sergi filed a further Affidavit in Reply. The application was argued, but the District Judge decided or directed that the decision on this application would be pronounced along with other pending applications. That never happened as the District Judge was, in the meantime, transferred in routine course. CTR alleged that Sergi delayed the pending hearing of and decision on the first Contempt Motion.
6. Notice of Motion No. 192 of 2013 — “the Second Contempt Motion”; “NM 192”: Alleging continued contempt by Sergi of the ad-interim order of 15th February 2010, and on the basis of additional factual material, CTR filed the Second Contempt Motion as Miscellaneous Application No. 319 of 2010 before the Thane District Court under Order 39, Rr. 2-A and 11 of the CPC on 9th December 2010.
7. Notice of Motion No. 191 of 2013 — “the Third Contempt Motion”; “NM 191”: (The numbering of the first three Motions is, therefore, in the reverse order of their filing.) CTR filed this as Miscellaneous Application No. 87 of 2010 on 21st March 2011 before the Thane District Court. It was also under Order 39, Rr. 2-A and 11 of the CPC. In this, CTR alleges breach by CTR of the final order dated 25th February 2011 on its application for interim injunctive relief. In circumstances to which I will presently advert, that final order came to be treated as a continuing ad-interim order. The application for interim relief was ultimately numbered as
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