Post the enactment of the Commercial Courts Act, 2015 (“CCA”), robust tools and measures were introduced to the Code of Civil Procedure, 1908 (“CPC”) in an attempt to improve efficiency in disposal of commercial disputes involving amounts over the specified value and reduce delays caused in the justice delivery system due to prolonged proceedings and trials. One such measure was the insertion of Order XIII-A to the CPC, which empowers a commercial court to pass a summary judgment against a plaintiff or defendant, upon an application made by a party after the summons have been served and before the issues are framed. The Court can consider a claim and make an order on an application made under Order XIII-A, if it is satisfied that the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim, as the case may be, and that there is no other compelling reason why the claim should not be disposed of before recording of oral evidence.
The Hon'ble Bombay High Court (“Court”), in its recent judgment dated 11 January 2022 in M/s. Jayant Industries Vs. Indian Tobacco Company (ITC) & Ors. [COMIP SUIT NO. 242 OF 2015 & I.A. (L) 6771 OF 2020], had the occasion to consider, enforce and apply the provisions of Order XIII-A of the CPC whilst deciding an application made by Indian Tobacco Company (ITC) (“Defendant”) seeking a summary judgment of dismissal of a suit filed by M/s Jayant Industries, through its sole proprietress Ms Janvi Shah (“Plaintiff”), against the Defendant for infringement of trademark, copyright and passing off (“Suit”). The Court, upon examining the documents produced on record by the Plaintiff and after noting the conduct of the Plaintiff, held that the claims made by the Plaintiff in the Suit are frivolous and vexatious and the Plaintiff has no real prospect of succeeding in the Suit and there was no other compelling reason why the Suit cannot be disposed of before recording oral evidence. The Court went on to summarily dismiss the Suit and even imposed costs upon the Plaintiff to the tune of INR 60 lakhs to be paid to the Defendant, to cover the costs and expenses of the Defendant in defending the Suit, under the provisions of Section 35 of the CPC.
The Plaintiff claimed to be a manufacturer of various types of sanitary and perfumery products like multi-purpose air purifiers, plastic dispensers for rooms, cupboard purifiers, etc. as also cigarettes and cigar ashtrays, etc. It was averred that the Plaintiff is the owner of the copyright in the artistic work “CLASSIC” and has also secured a copyright registration for the same under the provisions of the Copyright Act, 1957. The Plaintiff also claimed to have applied for registration of a trademark label in respect of the said artistic work, and the same is pending registration. The Plaintiff further claimed that it has used “CLASSIC” as an umbrella brand for its various products since the year 1968 and has been openly, continuously, extensively, and exclusively using the trademark / logo “CLASSIC” in respect of its products and services all over India. The Plaintiff claimed to have come across the Defendant's cigarettes bearing the trademark “CLASSIC”, which according to the Plaintiff, was a violation of the Plaintiff's rights in its trademark and copyright in its artistic work “CLASSIC”. The Plaintiff thus filed the Suit against the Defendant alleging trademark and copyright infringement and seeking an injunction and damages to the tune of INR 2100 Crores. The Plaintiff also claimed that prior to the filing of the Suit, she had engaged in correspondence with certain officials of the Defendant whereby the Plaintiff was willing to sell her copyright to the Defendant, but which was without any success.
The Defendant filed an application before the Court seeking a summary judgment of dismissal of the above Suit under the provisions of Order XIII-A of the Code of Civil Procedure, 1908.
The Defendant inter alia contended that: (i) the Plaintiff's claim for authorship of the artistic work “CLASSIC” and its adoption as a mark in 1968, was false and could be demonstrated from her own documents produced with the plaint; (ii) the proprietress of the Plaintiff, who was born only in the year 1987, claims that she adopted the “CLASSIC” label in the year 1968, which is an impossibility; (iii) when the impossibility was pointed out, the Plaintiff subsequently averred in her Affidavit in Reply to Chambers Summons No. 868 of 2016 that the copyright in the “CLASSIC” label existed since its creation in 1968 and was created by her grandmother, viz. Mrs. Damayanti Kantilal Shah, which was contrary to the original case pleaded in the Plaint; (iv) despite taking contradictory pleas, the Plaintiff thereafter represented before the Trade Marks Registry in the user affidavit filed in support of her trademark applications that the “CLASSIC” mark has honestly and independently been conceived, coined and adopted by her in January 1968; (v) the invoices / bills issued by one M/s Vikas Art Industries between the years 1968 and 2004 are ex-facie fraudulent in as much as the invoices prior to 1972 bear pin codes on them, when in fact pin codes were first adopted by India Post only after the year 1972, and bear seven-digit phone numbers, when in fact seven digit phone numbers were adopted in India in or around 1980; (vi) the affidavit-cum-declaration of Mrs. Damayanti K. Shah which was brought on record subsequently by the Plaintiff is also fabricated; (vii) the Plaintiff has approached this Court with a completely false case and the Plaintiff has no real prospect of succeeding in her claim for copyright infringement or even passing-off.
On the other hand, it was sought to be contended by the Plaintiff that: (i) the grandmother of the proprietress of the Plaintiff, late Mrs. Damayanti K Shah is the creator, inventor, and owner of the artistic work “CLASSIC”, and has since 1968, been using the said artistic work; (ii) in the year 1982, when she retired from the Plaintiff (which was a partnership firm at that time), she gave her stake to the father of the Plaintiff's proprietress, Mr. Jayant K. Shah, who in turn, transferred all his rights, including the rights in the said artistic work to the properietress of the Plaintiff in the year 2007, and it is in these circumstances, that the proprietress of the Plaintiff became the owner of copyright in the said artistic work; (iii) being the owner, the Plaintiff applied for registration of copyright in the same and no one opposed the registration of the copyright; (iv) Defendant wanted to buy the artistic work “CLASSIC” created by the grandmother of the Plaintiff's properietress and there is correspondence to substantiate the same; (v) however, after the emails of the father of the Plaintiff's proprietress were hacked, several emails were deleted which evinced that he had a conversation with the Defendant; (vi) the father of the Plaintiff's proprietress sent a notice to the Defendant to show soft copies of such emails from their records, to which, the Defendant had agreed to buy the Plaintiff's artistic work, but later declined to do so; (vii)it was in these circumstances that a cease-and-desist notice dated 14 August 2014 was sent to the Defendant and to which also there was no reply; (viii) therefore the Plaintiff was constrained to file the Suit and the Plaintiff is entitled to the reliefs claimed therein; (ix) there was an inadvertent mistake in the copyright application and the real author of the said artistic work was the grandmother of the Plaintiff's proprietress; (x) the pin codes which are appearing in the invoices for the year 1968 are because the stamp of the Plaintiff along with the address were inserted subsequently, i.e., after 15 August 1972 when the pin codes came into existence; (xi) with regard to the discrepancy in the affidavit-cum-declaration, whilst taking a photocopy in 2016, the xerox operator must have blanked out what is written by hand in the affidavit-cum-declaration; it is wholly incorrect on the part of the Defendant to contend that the Plaintiff has no real prospect of succeeding in the Suit; and there is no merit in the said application and the same be dismissed with compensatory costs.
Findings and Decision
The Court upon careful consideration of the documents produced by the Plaintiff in the Suit in light of the discrepancies pointed out by the Defendant, held that the Plaintiff is guilty of fabrication and has come to Court with a completely false and dishonest case, and the entire proceedings are nothing short of an abuse of the process of the Court.
The Court referred to the celebrated decision of the Hon'ble Supreme Court in Chengalvaraya Naidu by LRs vs Jagannath by LRs and Ors. [(1994) 1 SCC 1] to re-affirm the view that when a party comes to Court with a false case, he can be shown the door at any stage of the proceedings. The Court further referred to another decision of the Hon'ble Supreme Court in Indian Council for Enviro-Legal Action v. Union of India [(2011) 8 SCC 161] wherein it was opined that Court should never permit a litigant to perpetuate illegality by abusing the legal process; it is the bounden duty of the Court to ensure that dishonesty and any attempt to abuse the legal process must be effectively curbed and the Court must ensure that there is no wrongful, unauthorised or unjust gain for anyone by abuse of the process of the Court; and that one way to curb this tendency is to impose realistic costs which the defendant has in fact incurred in order to defend itself in such legal proceedings.
The Court thereafter held that the present proceedings have been filed only to try and extract monies from the Defendant is in the form of a nuisance litigation and the Plaintiff has no real prospect of succeeding in the above Suit and there is no other compelling reason why the above Suit cannot be disposed of before recording oral evidence. The Court accordingly came to the conclusion that the Defendant is entitled to a summary judgment of dismissal of the above Suit under the provisions of Order XIII-A of the CPC.
The Court thereafter also briefly discussed the provisions of Section 35 of the CPC and the parameters warranting the award of costs. The Court, observed that since the conduct of the Plaintiff is reprehensible in as much as the Plaintiff has approached the Court not only with a false case and on the basis of dubious documents but has also lied to the Court, it would be a fit case to direct the Plaintiff to bear the entire costs incurred by the Defendant in defending the Suit, which were quantified by the Defendant at INR 1,19,26,308. However, the Court, further recorded that purely out of mercy for the Plaintiff and considering that the proprietress of the Plaintiff is a woman, the Plaintiff was being directed to pay to the Defendant costs quantified at INR 60 lakhs.
The Court accordingly dismissed the Suit and directed the Plaintiff to pay costs of the litigation to the time of INR 60 lakhs to the Defendant within a period of four weeks from the date of the Judgment.
The provisions of Order XIII-A of the CPC have been subsisting on the statute book for over five years now, however, the same have not thus far been effectively put to use by litigants, save and except in a handful of cases. The very purpose of the CCA and the changes that were sought to be introduced was to curtail frivolous litigation and to speed up legal proceedings but not all provisions are being used to potential and courts continue to be burdened. This decision comes as a progressive move in highlighting the willingness of courts to pass summary judgments in such type of cases and reinforces that the provisions of Order XIII-A are not toothless provisions and can indeed serve as a powerful tool to curb frivolous and vexatious litigations, which would eventually reduce the burden of the already overburdened judicial system. This decision also seeks to instil a fear of imposition of heavy costs under Section 35 of CPC in the mind of litigants who take undue advantage of the justice delivery system and use it as an artifice to harass innocent parties by engaging them in the shackles of nuisance litigations. It remains to be seen whether this decision would encourage more parties to promptly turn to and seek assistance of the provisions of Order XIII-A of the CPC, when the facts of their case permit them to do so.
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