IN THE HIGH COURT OF DELHI AT NEW DELHI
C. Hari Shankar, J.
Sml Limited – Appellant
Versus
Sulphur Crop Care Private Limited & Anr. – Respondents
CS(COMM) 119 of 2023, I.A. 4337 of 2023, I.A. 4338 of 2023, I.A. 4339 of 2023, I.A. 4340 of 2023, I.A. 4341 of 2023, I.A. 4342 of 2023 & I.A. 5695 of 2023
Decided On : 23-03-2023
Order XXIII Rule 3 - Settlement Agreement - The court decreed the suit in terms of the settlement agreement reached by the parties, acknowledging the validity of the suit patent and the exclusive rights of the plaintiff to deal in a fertilizer composition.
Fact of the Case:
The parties reached an amicable resolution before the issuance of summons in the suit, leading to the joint filing of a settlement agreement under Order XXIII Rule 3 of the CPC.
Finding of the Court:
The court found that nothing survived for adjudication in the suit as the parties had reached a settlement agreement, and therefore decreed the suit in terms of the settlement agreement.
Issues: The main issue was the validity of the suit patent and the exclusive rights of the plaintiff to deal in a specific fertilizer composition.
Ratio Decidendi: The court's decision was influenced by the settlement agreement reached by the parties, which acknowledged the validity of the suit patent and the plaintiff's exclusive rights to the fertilizer composition.
Final Decision: The suit was decreed in terms of the settlement agreement, and the parties were bound by the terms of the agreement.
ORDER (Oral)
I.A. 5695/2023 (Under Order XXIII Rule 3 of the CPC)
1. This is one of those providential cases, few and far between, in which, even before summons are issued in the suit, the parties have arrived at an amicable resolution.
2. I.A. 5695/2023 has, therefore, been jointly filed by the parties under Order XXIII Rule 3 of the Code of Civil Procedure, 1908 (CPC), setting out the terms of settlement between the parties, which are reproduced thus:
"(i) The Defendants acknowledge the validity of the suit patent, IN 282092 and the Plaintiffs resultant exclusive rights to deal in a fertilizer composition containing:
a. Elemental Sulphur in the range of 30% to 87% of the total composition; Zinc Oxide (ZnO) in the range of 3% to 25% w/w of the total composition and at least one agrochemically acceptable excipient; wherein the composition is in the form of microgranules of the size 0.1 mm to 0.5mm or broadcast granules of the size range of 0.75mm to 5mm and wherein the composition comprises particles in the size range of 0.1 to 50 microns.
b. Elemental Sulphur in the range of 30% to 85% w/w of the total composition, Zinc Sulphate monohydrate (ZnSO4, H2O) in the range from 8% to 60% w/w of the total composition and at least one agrochemically acceptable excipient, wherein the composition is in the form of microgranules of the size 0.1 mm to 0.5mm or broadcast granules of the size range of 0.75mm to 5mm and wherein the composition comprises particles in the size range of 0.2 micron to 50 microns.
(ii) The Defendants further admit that during the validity of the suit patent IN 282092, any act of making, using, offering for sale, selling or importing or otherwise using the composition covered under paragraph (i) will violate the statutory rights of the Plaintiff irrespective of the method of manufacture employed to prepare the composition.
(iii) The above undertakings are being given by the Defendant No. 2. Amitbhai Jayantila Shah, on behalf of himself as well as the Defendant No. 1. The Defendant No. 2 is authorized to give such an undertaking on behalf of the Defendant No. 1 vide Board Resolution of the Defendant dated 7 March 2023. The said undertakings shall be binding henceforth on the Defendants, their associates, representatives, successors, partners, employees, affiliates and assignees-in-business.
(iv) Subject to the above undertakings, the Plaintiff forego its claims as regards the said Defendants, as prayed for in paragraph no. 41 clauses (c) to (f) of the Plaint. However, in the event of a breach of the above undertakings by the said Defendants, the Plaintiff reserves the right to seek any remedies available to them in law and equity. Furthermore, the above-named Defendants shall be liable to indemnify the Plaintiff against all costs and damages incurred by the Plaintiff in light of such breach by the said Defendants."
3. Mr. Pravin Anand, learned Counsel for the plaintiff and Mr. J. Sai Deepak, learned Counsel for the defendants are present on behalf of their respective clients. In view of the resolution of the dispute, Mr. Pravin Anand's client is not pressing for costs or damages or any of the other reliefs sought in the suit, except the reliefs which stand covered by the terms of settlement hereinabove.
4. As such, nothing survives for adjudication in the suit.
5. The suit is decreed in terms of the aforesaid settlement agreement, by which the parties shall remain bound.
6. Let a decree sheet be drawn up accordingly.
7. If any court fees have been deposited, the plaintiff shall be eligible for refund thereof.
The main legal point established in the judgment is the court's recognition and enforcement of a settlement agreement under Order XXIII Rule 3 of the CPC.
The court upheld the enforceability of the terms of settlement under Order XXIII Rule 3 of the CPC, leading to the decree of the suit in the terms of settlement.
The court upheld the proprietary right of the plaintiff over the patented agricultural composition and prohibited Defendant 1 from infringing the plaintiff's patent.
Settlement terms enforceable under CP Code, where defendant acknowledges patent validity and agrees to refrain from infringing activities.
The acknowledgment of patent validity and early settlement entitles the plaintiff to a full refund of court fees under CPC Order XXIII Rule 3.
The main legal point established in the judgment is the court's authority to decree a suit based on a settlement agreement under Order XXIII Rule 3 of the Code of Civil Procedure.
Enforcement of settlement terms under Order XXIII Rule 3 of CPC and decreeing of the suit in terms of the settlement
Mutual settlement of disputes allows parties to withdraw claims under Order XXIII Rule 3, leading to court decreeing the suit based on agreed terms.
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