Western Digital Technologies, Inc & Anr v. SYT Solutions Pvt. Ltd.

1. The present application has been filed on behalf of Commissioner of Customs (General), Air Cargo Complex, Sahar, Andheri (East), Mumbai – 400009 seeking impleadment in the present suit as a proper party.

2. The application is premised on the infringement of the intellectual property rights of the plaintiff in terms of the Custom Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 (hereinafter referred to as „IPR Enforcement Rules‟), on account of the import of goods by the defendant. The applicant had passed a seizure memo dated 2nd May, 2018 in respect of 9,644pieces of the goods imported by the defendant under Section 110(1) of the Customs Act, 1962. It is also the case of the applicant that goods which have been imported into India are in violation of paragraph 2.[3] of the Foreign Trade Policy, 2015-20 and are therefore, liable for confiscation under Section 111(d) of the Customs Act, 1962.

3. Both the plaintiff and the defendants have opposed the present application. Plaintiffs have filed reply in opposition to the aforesaid application, wherein it stated that the present suit has been filed on the basis of infringement of the plaintiffs‟ trademarks by the defendant and therefore, the applicant is neither a necessary and nor a proper party for the adjudication of the present suit. The applicant, vide its letter dated 24th April, 2018, asked the plaintiff of its willingness to join the proceedings, failing which the applicant would release the seized goods. Rule 11 of the Customs Rules states that if the infringing goods have been confiscated and no legal proceedings are pending in relation to such goods, the applicant may proceed to destroy the goods after obtaining „No-Objection Certificate‟ from the intellectual property right holder. Since the plaintiff has chosen to file the present suit for injunction, the applicant cannot proceed under the IPR Enforcement Rules during the pendency of the present suit. Therefore, the applicant is neither a necessary party nor a proper party.

4. I have heard the counsels for the parties.

5. The Supreme Court in Mumbai International Airport (P) Ltd. v. Regency Convention Centre & Hotels (P) Ltd., (2010) 7 SCC 417, BANSAL has observed that the general rule with regard to impleadment of parties is that the plaintiff in a suit, being dominus litis, may choose the persons against whom he wishes to litigate and cannot be compelled to sue a person against whom he does not seek any relief.

6. In Kasturi v. Iyyamperumal, (2005) 6 SCC 733, the Supreme Court laid down the tests to determine as to who is a necessary party and proper party in a suit. The relevant portions are set out below: “7*. In our view, a bare reading of this provision, namely, second part of Order 1 Rule 10 sub-rule (2) CPC would clearly show that the necessary parties in a suit for specific performance of a contract for sale are the parties to the contract or if they are dead, their legal representatives as also a person who had purchased the contracted property from the vendor. In equity as well as in law, the contract constitutes rights and also regulates the liabilities of the parties. A purchaser is a necessary party as he would be affected if he had purchased with or without notice of the contract, but a person who claims adversely to the claim of a vendor is, however, not a necessary party. From the above, it is now clear that two tests are to be satisfied for determining the question who is a necessary party. Tests are — (1) there must be a right to some relief against such party in respect of the controversies involved in the proceedings; (2) no effective decree can be passed in the absence of such party. …

11. As noted hereinearlier, two tests are required to be satisfied to determine the question who is a necessary party, let us now consider who is a proper party in a suit for specific performance of a contract for sale. For deciding the question who is a proper party in a suit for specific performance the guiding principle is that the presence of such a party is necessary to adjudicate the controversies involved in the suit for specific performance of the contract for sale. Thus, the question is to be decided keeping in mind the scope of the suit. …” BANSAL

7. In Vidur Impex & Traders (P) Ltd. v. Tosh Apartments (P) Ltd., (2012) 8 SCC 384, the Supreme Court has succinctly laid down the principles to be followed while deciding an application filed under Order 1 Rule 10(2) of the CPC. Paragraph 36 in this regard is set out below: “36. Though there is apparent conflict in the observations made in some of the aforementioned judgments, the broad principles which should govern disposal of an application for impleadment are:

1. The court can, at any stage of the proceedings, either on an application made by the parties or otherwise, direct impleadment of any person as party, who ought to have been joined as plaintiff or defendant or whose presence before the court is necessary for effective and complete adjudication of the issues involved in the suit.

2. A necessary party is the person who ought to be joined as party to the suit and in whose absence an effective decree cannot be passed by the court.

3. A proper party is a person whose presence would enable the court to completely, effectively and properly adjudicate upon all matters and issues, though he may not be a person in favour of or against whom a decree is to be made.

4. 4. If a person is not found to be a proper or necessary party, the court does not have the jurisdiction to order his impleadment against the wishes of the plaintiff.”

8. At this stage, a reference may be made to the prayers made in the plaint, which are set out below:

9. As can be seen from the above, no relief has been sought against the applicant. The entire case of the plaintiff is based on the infringement of the trademarks of the plaintiffs by the defendant. Therefore, it cannot be said that an effective decree cannot be passed in the present suit in the absence of the applicant. It is not even the case of the applicant that the applicant is a necessary party, as the present application seeks impleadment only on the basis of the applicant being a proper party.