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IN THE HIGH COURT OF DELHI AT NEW DELHI
Jyoti Singh, J.
Skechers U. S. A. Inc. & Ors. – Appellants
Versus
Pure Play Sports & Ors. – Respondents
CS(COMM) 573 of 2016
Decided On : 14-02-2023
Taxing Officer - Review of Costs - DHC Rules, 2018 - Summary of Acts and Sections: DHC Rules, 2018, Chapter XXIII Rule 13; Commercial Courts Act, 2015, Section 35(2) - The court discussed the assessment of costs under the DHC Rules, 2018 and the Commercial Courts Act, 2015, emphasizing the discretion of the court in awarding actual reasonable costs and the factors to be considered in determining costs. The court also highlighted the principle that law supports those who are awake and not those who sleep over their rights, and the maxim 'vigilantibus non dormientibus subvenit lex' was applied in the context of condonation of delay in filing the review application.
Fact of the Case:
The suit was filed by the Plaintiffs against the Defendants for permanent injunction and other reliefs. The Taxing Officer assessed the costs at Rs. 86,98,173.05, and the decree against Defendant No.1 had attained finality. The Applicant, a partner of Defendant No.1, filed an application seeking review of the order dated 20.08.2018 and condonation of delay of 1054 days.
Finding of the Court:
The court found that the Applicant failed to establish a sufficient cause for condonation of delay and dismissed the application. It also held that the Applicant, as a 2% shareholder in the Partnership Firm, could not absolve himself of the liabilities incurred under the decree, especially when it had not been challenged over the years.
Issues: The issues included the condonation of delay in filing the review application, the liability of the Applicant as a partner of Defendant No.1, and the assessment of costs by the Taxing Officer.
Ratio Decidendi: The court applied the principle that law supports those who are awake and not those who sleep over their rights in the context of condonation of delay. It also emphasized the liability of the Applicant as a partner of Defendant No.1 and the discretion of the court in awarding actual reasonable costs.
Final Decision: Both the Applications for review of costs and condonation of delay were dismissed by the court, being devoid of merits.
JUDGMENT
Jyoti Singh, J.
I.A. 12718/2022 and I.A. 12719/2022
1. This judgment will dispose of two applications, one being I.A.12718/2022 filed under Chapter XXIII Rule 13 of Delhi High Court (Original Side) Rules, 2018 (hereinafter referred to as the `DHC Rules, 2018'), seeking review of the order passed by the Taxing Officer and the other being I.A. 12719/2022 for condonation of delay of 1054 days in filing the application for review. Both applications have been filed by Mr. Anil Chopra, one of the Partners of Defendant No.1/Pure Play Sports, a Partnership Firm.
2. Brief background necessary for deciding the present applications is that a suit was filed by the Plaintiffs against the Defendants for permanent injunction restraining them from passing off, dilution etc. as well as claiming damages/rendition of accounts, delivery up amongst other reliefs. Defendants No.2 to 4 were proceeded ex parte and vide judgment dated 15.05.2018, the suit was decreed against the Defendants permanently restraining them from manufacturing, selling, etc. their goods with a similar trade dress or in any other manner amounting to passing off. Decree was passed jointly and severally against the four Defendants out of which Defendant No. 1 is the Partnership Firm. Plaintiffs filed an application being I.A. 8409/2018 for costs along with bill of costs and by a subsequent application being I.A. 8826/2018, Plaintiffs sought liberty to file details of additional costs which had been earlier overlooked. By order dated 19.07.2018, Court directed the applications to be listed before the learned Joint Registrar since the costs were to be determined by the Taxing Officer in terms of DHC Rules, 2018. By order dated 20.08.2018, cost of the suit was taxed at Rs. 86,98,173.05/- and on that basis decree was drawn up.
3. Plaintiffs thereafter filed Execution Petition No. 81 of 2018 seeking execution of the decree. On 12.09.2019, the Executing Court directed Judgment Debtor No. 1/Shri Vishnu Bhagat to file affidavit disclosing movable and immovable assets along with details of accounts and investments. Notices were issued to the other three Partners Mr. Satya Pal Maini, Mr. Anil Chopra and Smt. Meena Soni, whose names were disclosed by the counsel for the Judgment Debtors. The Applicant herein Mr. Anil Chopra filed his affidavit of assets and he along with other Partners was directed to be present in Court on 09.01.2020, by an order dated 19.12.2019.
4. As per the case of the Review applicant, upon learning that arrest warrants were issued by the Executing Court, he contacted a counsel and filed the present application for recall of order dated 20.08.2018, passed by the Taxing Officer, along with application seeking condonation of delay. It is the case of the Applicant that Defendant No. 1/Pure Play Sports is a Partnership Firm with four Partners and Applicant is only a 2% shareholder and a Sleeping Partner. He does not possess business acumen or the experience to run the business of the Partnership Firm and being a Sleeping Partner was provided with nil or very little information of the business activities or any litigation associated with it. The Applicant thus had no knowledge of the suit proceedings and it was only in September, 2019 that he learnt of the proceedings upon receipt of summons from the Executing Court. On being served with the summons, Applicant approached the other two Managing Partners, who informed him of the passing of the decree, whereupon the Applicant engaged a counsel to handle the matter. By order dated 18.11.2019, Court directed the Applicant to appear in person on 19.11.2019, which he did. Further, in compliance of the order dated 19.12.2019, Applicant filed an affidavit declaring the assets and income and also disclosed other information, sought by the Court. Subsequently, the Applicant obtained copy of the application filed by the Decree Holders along with bill of costs in the third week of July, 2022 and the order dated 20.08.2018,
AI
The main legal point established in the judgment is that law supports those who are awake and not those who sleep over their rights, and the court has the discretion to award actual reasonable costs.
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