SOCIETE DES PRODUCTS NESTLE, S.A. & ANR v. ESSAR INDUSTRIES & ORS

Delhi High Court · 23 Dec 2015 · 2015:DHC:10516

Manmohan Singh

CS(OS) No.3047/1996

2015:DHC:10516

civil appeal_allowed Significant

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The Delhi High Court allowed the plaintiffs' amendment application to enhance the suit valuation for court fee and jurisdictional purposes in an intellectual property passing off suit, affirming that such amendments should be permitted unless they change the suit's nature or cause prejudice.

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CS(OS) No.3047/1996 HIGH COURT OF DELHI
Order delivered on: 23rd December, 2015 CS(OS) No.3047/1996
SOCIETE DES PRODUCTS NESTLE, S.A. & ANR ..... Plaintiffs
Through Mr.Manish K. Mishra, Adv. with Mr.Waseem Shuaib Ahmed, Adv.

VERSUS

ESSAR INDUSTRIES & ORS ..... Defendants
Through Mr.Amit Jain, Adv. with Ms.Babita & Mr.Neeraj, Advs.

CORAM:

HON'BLE MR.JUSTICE MANMOHAN SINGH MANMOHAN SINGH, J. (ORAL)
I.A. No.25854/2015 (u/o VI R.17 CPC, by plaintiffs)

JUDGMENT

1. This is an application filed by the plaintiffs under Order VI Rule 17 read with Section 151 CPC for amendment of the plaint. The plaintiffs wish to enhance the valuation of the suit for the purposes of Court fee and jurisdiction from Rs.20,01,200/- to Rs.1,00,06,200/-.

2. The plaintiffs have filed the suit for permanent injunction restraining passing off, rendition of accounts of profits, delivery up against the defendants.

3. It is stated in the application that the plaintiffs were not required to specify the value of the intellectual property right earlier. But in view of the Commercial Courts Ordinance, the “specified value” of the intellectual property right, subject matter of the suit becomes determinative of whether the suit would or would not be governed by the Commercial Courts Ordinance. Therefore, it is essential for the 2015:DHC:10516 plaintiffs to amend the plaint to include the plea pertaining to the market value of its intangible intellectual property right subject matter of the suit which is in excess of Rs.[1] crore. In view of the said reasons, the plaintiffs seek to amend the paragraphs 11, 20 and 23 of the plaint, the details of which are given in para 7 of the application.

4. Copy of the abovementioned application was served to the other side on 3rd December, 2015 (also through courier on 15th December, 2015). No reply was filed on behalf of the defendants. Learned counsel for the defendants has orally opposed the prayer of this application without reply.

5. This Court has already dealt with the issue of amendment in the case of Jiva Institute of Vedic Science & Culture & Ors. v. The Indian Hotels Company Ltd. & Anr., being CS(OS) No.1960/2006, decided on 4th December, 2015, has dealt with the same aspect. Paragraphs 6 to 12 of the said order read as under: “6. In the present application, it is stated by the plaintiffs that at the time of filing of the suit, the same was valued for the relief of rendition of accounts at Rs.25 lac and the ad-valorem Court fee was paid. The plaintiffs at that time had also undertaken to pay the requisite Court fee on the account of the defendants being liable to pay in excess of the amount of Rs.25 lac. Learned Senior counsel for the plaintiffs submits that since the plaintiffs have re-assessed the damages likely to be served, therefore, the relief for rendition of accounts is likely to assess at Rs.[1] crore in view of the statement of accounts produced by the defendants. Therefore, the plaintiffs wish to amend para 59 as well as prayer clause (b) of the plaint by enhancing the pecuniary jurisdiction for the reliefs of rendition of accounts/damages from Rs.25 lac to Rs.[1] crore.

7. Learned Senior counsel for the plaintiffs submits that the present suit is not required to be transferred in view of the Proviso to Section 7 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Ordinance, 2015. Section 7 and the First Proviso to Section 7 of the Ordinance read as under: “All suits and applications relating to commercial disputes of a Specified value filed in a High Court having ordinary original civil jurisdiction shall be heard and disposed of by the Commercial Division of that High Court. Provided that all suits and applications relating to commercial disputes, stipulated by an Act to lie in a court not inferior to a District Court, and filed on the original side of the High Court, shall be heard and disposed of by the Commercial Division of the High Court.”

8. Learned Senior counsel has also pointed out the order dated 3rd December, 2015 passed by the Division Bench in writ petitions being W.P.(C) No.11035/2015, titled as Vifor (International) Limited v. The High Court of Delhi and W.P.(C) No.11043/2015, titled as Asian Patent Association (Indian Group) v. Registrar General, Delhi High Court, whereby it was directed that “...The cases arising out of Patents Act, 1870; Trademarks Act, 1999; Designs Act, 2000; Copyright Act, 2000; and The Geographical Indications of Goods (Registration And Protection) Act, 1999, shall not be transferred and in case application seeking amendment in the pecuniary value is filed, they shall be considered by the respective Single Judges in accordance with law.”

9. Even otherwise, it is stated that this Court is not ousted from its jurisdiction or power to pass an order in the application for amendment of plaint, assuming the interpretation of Section 7 of the Ordinance, 2015 is ultimately not accepted in the writ petitions.

10. It is the admitted position that while passing the order by the Division Bench on 3rd December, 2015, liberty is granted to the parties for amendment of pecuniary value. In the case of Balar Marketing Pvt. Ltd. v. Lakha Ram Sharma, 2002(97) DLT 424, the order of the Additional District Judge, dated 10th August, 2000 whereby the amendment was allowed, was set-aside, inter-alia, on the grounds that the amendment sought is not bonafide one and such a sum may be found due, if any, from the defendants on accounting the same and the said aspect will be decided when ultimately the decree would be passed. Thus, the prayer made in the application in the said case appeared to be arbitrary and not on the basis of the cogent material.

11. In the present case, on the face of it, there is a cogent material available on record in view of the grounds rendered by the defendants. Further, the order of the Single Bench in Balar Marketing Pvt. Ltd. (supra) was challenged in the Supreme Court who set-aside the order of this Court in the case of Lakha Ram Sharma v. Balar Marketing Pvt. Ltd., (2008) 17 SCC 671. The contents of the said judgment read as under:-

“3. A very short question is involved in this appeal. The appellant had filed a suit claiming that he is the proprietor of a trade mark “KUNDAN” and “KUNDAN CAB” in respect of PVC wires and cables and that the respondent was using the appellant's trade mark. Permanent injunction, rendition of accounts and other reliefs were claimed. The appellant applied for an amendment of the suit. The application for amendment was granted by the trial court. The High Court, however, by the impugned order, has disallowed only one portion of the amendment, namely, where the appellant sought to raise the valuation of the suit from Rs 1,00,000 (Rupees one lakh) to Rs 10,00,000 (Rupees ten lakhs). The High Court has held that such a claim is arbitrary and not based on any cogent material. The High Court has held that the application to raise valuation is not bona fide as it is done with the purpose of taking the suit out of the jurisdiction of that court. 4. It is settled law that while considering

whether the amendment is to be granted or not, the court does not go into the merits of the matter and decide whether or not the claim made therein is bona fide or not. That is a question which can only be decided at the trial of the suit. It is also settled law that merely because an amendment may take the suit out of the jurisdiction of that court is no ground for refusing that amendment. We, therefore, do not find any justifiable reason on which the High Court has refused this amendment. Accordingly, the impugned order is set aside and that of the trial court is restored. We, however, clarify that as the appellant has now raised the claim from Rs 1 lakh to Rs 10 lakhs, the trial court will determine, whether or not court fees are correctly paid”.

12. Similar view was taken by the Supreme Court in the case of Mount Mary Enterprises v. Jivratna Medi Treat Pvt Ltd., (2015) 4 SCC 182. The Supreme Court has also dealt with the objection raised by the defendant in the said case in para 9 of the application. The relevant paras are reproduced as under:-

“2. The facts giving rise to the present litigation in a nutshell are as under: the appellant, who has been described as a plaintiff hereinafter, filed a suit against the present respondent, who has been hereinafter described as a defendant, for specific performance of a contract in relation to the suit property. The suit property was initially valued at Rs 13,50,000 (Rupees thirteen lakhs and fifty thousand only). The plaintiff, thereafter, realised that market value of the property in question was around Rs 1,20,00,000 (Rupees one crore and twenty lakhs only) and therefore, filed an application for amending the plaint. The said application for amendment was rejected by the trial court and thereafter, the aforestated writ petition was filed by the plaintiff challenging the order rejecting the amendment application. The said petition has also been dismissed and therefore, the plaintiff has approached this Court and prayed that the impugned judgment confirming

the order rejecting the amendment of the plaint be set aside and the plaintiff be permitted to amend the plaint so as to state correct value of the property in question, which is Rs.1,20,00,000.

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7. In our opinion, as per the provisions of Order 6 Rule 17 of the Civil Procedure Code, the amendment application should be normally granted unless by virtue of the amendment nature of the suit is changed or some prejudice is caused to the defendant. In the instant case, the nature of the suit was not to be changed by virtue of granting the amendment application because the suit was for specific performance and initially the property had been valued at Rs 13,50,000 but as the market value of the property was actually Rs 1,20,00,000, the appellant-plaintiff had submitted an application for amendment so as to give the correct value of the suit property in the plaint.

9. The main reason assigned by the trial court for rejection of the amendment application was that upon enhancement of the valuation of the suit property, the suit was to be transferred to the High Court on its original side. In our view, that is not a reason for which the amendment application should have been rejected.

11. In our opinion, on the basis of the aforestated legal position, the amendment application made by the plaintiff should have been granted, especially in view of the fact that it was admitted by the plaintiff that the suit property was initially undervalued in the plaint and by virtue of the amendment application, the plaintiff wanted to correct the error and wanted to place correct market value of the suit property in the plaint.

12. For the aforestated reasons, we are of the view that the amendment application should not have been rejected by the trial court and the High Court should not have confirmed the order of rejection. We, therefore, set aside the impugned judgment [Mount Mary Enterprises v. Jivratna Medi Treat (P) Ltd., WP No. 12099 of 2013, order dated 10-3-2014 (Bom)] delivered by the High Court and the order dated 22-11-2013 of the trial court, whereby the amendment application had been rejected”.

6. It is a commercial dispute and the Court dealing with the commercial matters should not have the narrow approach, as the Court has to examine the application from commercial angle, though the same is subject to the condition that a valid case for amendment is made out, once the said condition is fulfilled, the prayer has to be allowed. The judgment rendered by the Supreme Court and the order passed by the Division Bench on 3rd December, 2015 have the binding effect.

7. In the present case, all the conditions are fulfilled. Thus, there is no impediment in allowing the application for amendment. The prayer in the present application is allowed. The amended plaint filed along with the application is taken on record.

8. The application is disposed of. CS (OS) No. 3047/1996 In view of the order passed in I.A. No.25854/2015, let the deficient Court fee be furnished by the plaintiffs within two weeks. Written statement, if any, to the amended plaint be filed within four weeks. Replication, if any, be filed within two weeks thereafter. List on 10th March, 2016 for framing of additional issues, if any.

JUDGE DECEMBER 23, 2015

SOCIETE DES PRODUCTS NESTLE, S.A. & ANR v. ESSAR INDUSTRIES & ORS

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