In Patent Suits With High Stakes, Right To File Written Statement Can’t Be Forfeited At The Outset: Rajasthan HC [Read Judgment]
120-day period to file WS start from date of dismissal of plea for rejection of suit
The Rajasthan High Court has held that in a patent suit where huge stakes are being claimed by the parties, if the right to file written statement is forfeited at the outset, it will lead to the party whose right is forfeited to first suffer temporary injunction and then a final decree to be able to persuade the court to reverse it by allowing it to file written statement followed by a de-novo trial leading to travesty of justice.
In saying so, a bench of Justice Mohammad Rafiq and Justice Alok Sharma first framed two questions:
- In a patent suit, will the defendant on non-filing of written statement within 120 days from the date of service of summon forfeit the right to file such written statement?
- What should be the starting point for counting period of 120 days for filing the written statement?
The bench decided the second question by holding that the time period of 120 days starts from the date of dismissal of application filed under Order VII Rule 11 CPC for rejection of suit.
The bench was hearing a petition filed by Shri Balaji Industrial Products Limited wherein its counsel, senior advocate Sudhir Chandra and RP Singh assisted by Abhay Jain and Prekhar Gupta submitted that it would be required to file written statement within 120 days from the date of rejection of the application filed by it under Order VII Rule 11 CPC.
To this, the bench noted, “We are convinced that in a patent suit where huge stakes are being claimed by the parties, if the right to file written statement is forfeited at the outset, the inevitable consequence would initially be passing the order of temporary injunction and then the final decree against the petitioner-defendant. If we were to uphold the contention of the respondent-plaintiff, the petitioner-defendant would have to first suffer not only order of temporary injunction but also final decree to be able to persuade this Court later to reverse it by allowing it to file written statement and then, further de-novo trial will have to follow.
“All this would lead to manifest injustice shocking the conscience of the Court. This therefore persuades us to entertain present petition to examine if in that situation, a case has been made out for invoking jurisdiction under Article 227 of the Constitution of India”.
In the present case, AIA Engineering Limited has filed a suit of permanent injunction, damages, delivery and rendition of account alleging infringement of its certified patent on April 22, 2017.
The summons was served on petitioner-defendant Balaji Industrial Products Ltd on May 4, 2017. It then filed application under Order VII Rule 11 CPC on 17.05.2017, which was dismissed by the Commercial Court on September 1, 2017.
The written statement was filed by the petitioner-defendant on October 12, 2017, though after filing of the application by AIA Engineering on September 8, 2017, for closure of defendant’s right to file written statement.
Balaji Industrial Products Ltd moved the high court against the order of the Commercial Court whereby the application filed by it under Order VI Rule 15A(1) read with Section 4 of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015, as suit being not “duly instituted” in absence of “Statement of Truth” envisaged in Order VI Rule 15A, and written statement filed after rejection of application filed under Order VII Rule 11 of CPC was dismissed reckoning 120 days from filing of suit and not from the order of dismissal of the application filed under Order VII Rule 11 of CPC.
The high court observed, “Since in the present case, the application was filed by the petitioner-defendant under Order VII Rule 11 CPC on 17.05.2017 within 13 days from the date of service of summons on 04.05.2017, it was filed within first 30 days allowed under Order VIII Rule 1 CPC. That application was dismissed on 01.09.2017 and written statement was filed within 42 days thereafter on 12.10.2017. In the light of view that we have taken of the matter, such written statement should be taken, in the facts of the case, to have been filed within the outer time limit permissible under Order VIII Rule 1 CPC as amended vide Act No. 8 of 2016 with respect to the Act of 2015.
“In a manner of speaking, the direction of the Apex Court for filing written statement in eight weeks in the case of Sejal Glass Ltd. vs. Navilan Merchants Pvt. Ltd. buttresses our view. The Commercial Court thus having not allowed the written statement of the petitioner-defendant to be taken on record, has failed to lawfully and constructively exercise the jurisdiction vested in it,” said the bench.
The court said: “Written statement already filed is ordered to be taken on record subject to payment of cost of Rs. 50,000 to be paid by the petitioner-defendant to Respondent No. 1-plaintiff within a period of 15 days from the next date fixed before the Commercial Court.”
Read the Judgment Here