Adobe Systems Inc. and Others vs Thinking Machine Pvt. Ltd.

Rajiv Sahai Endlaw, J.—M/s Adobe System Incorporated (USA), M/s Autodesk Incorporated (USA) and M/s Microsoft Corporation (USA) instituted the present suit originally against Mr. Pavitra Takle of M/s Thinking Machine Pvt Limited as defendant No. 1 and against M/s Thinking Machine Pvt Ltd as defendant No. 2, inter alia, on the ground that the said defendants were engaged in the business of hard disk loading i.e. pre-loading various pirated and unlicensed software of the plaintiff companies free of costs on to the computers that were being assembled and sold by them, as an incentive to the customers to purchase the machines from them. However, when the suit came up before this Court first on 19th November, 1999, the plaintiffs dropped the defendant No. 1 Mr. Pavitra Takle from the array of parties. Vide ex parte order of the same day the sole defendant M/s Thinking Machine Pvt Ltd was restrained from copying, selling, offering for sale, distributing, issuing to the public pirated/counterfeit/unlicensed version of the plaintiffs'' software as listed in the plaint. The Court Commissioner was also appointed to visit the premises of the defendant at Nasik and to take into custody all the infringing materials found.

On 15th September, 2000, pursuant to service of summons, a counsel appeared for the defendant and sought time for filing the written statement. However, subsequently, on 2nd May, 2001 the said counsel sought discharge on lack of instructions from the defendant and was discharged and the defendant ordered to be proceeded against ex parte. Subsequently, on change in pecuniary jurisdiction, the suit was transferred to the district courts. The plaintiffs applied for amendment of the plaint, which was allowed and whereupon the suit falling within the minimum pecuniary jurisdiction of this Court, was re- transferred to this Court. Upon such receipt of the suit, it was deemed appropriate to issue fresh summons to the defendant. However, it appears that summons were served to Mr. Pavitra Takle who had already been dropped from the array of parties as aforesaid. He appeared on 24th January, 2006 and filed a written statement. He pleaded that he was earlier the director of Thinking Machine Pvt Ltd but stated that he had resigned from directorship on 1st September, 2001. A certified copy of Form 32 stated to be filed on 15th May, 2002 in this regard was also filed alongwith the written statement. It is relevant to point out that the suit as aforesaid was initially instituted in 1999 and the Court Commissioner had also visited the premises of M/s Thinking Machine Pvt Ltd immediately thereafter and the resignation of Mr. Pavitra Takle from the directorship of the company is subsequent thereto. Be that as it may, since he had been dropped from the array of defendants and the summons had been wrongly issued to him, he is not a party to the suit. The defendant M/s Thinking Machine Pvt Ltd again failed to appear in spite of summons and was vide order dated 24th January, 2006 proceeded against ex parte.

On 25th April, 2006 the interim order was made absolute during the pendency of the suit and the plaintiffs have led their ex parte evidence by filing the affidavits by way of examination in chief of Mr. Anand Banerjee constituted attorney of the plaintiffs and of Mr. Sanjiv Sharma a Chartered Accountant engaged by the plaintiffs.

The Court Commissioner appointed by this Court and to whose report no objection has been filed and with respect to which report Mr. Pavitra Takle the then director of M/s Thinking Machine Pvt. Ltd. in his written statement also has not commented, has reported that the place from where the business of the said company was being carried on is adjacent to and or part of the residence of Mr. Pavitra Takle. Though at the time of visit by the Court commissioner on 22nd November, 1999 Mr. Pavitra Takle was not found but his wife and the other employees of the company were present. The Court Commissioner has reported the business of assembling and sale of computers being carried on and found on the premises computers with the software programmes of the plaintiff and with respect whereto the licences were not produced. In fact the Court Commissioner also found a sale being effected at the time of his visit and which sale again was of the computer system with the software of the plaintiffs'' loaded but without any licence. The said report, which can be read by this Court even in the absence of the Court Commissioner having been examined as a witness, unequivocally establishes that the defendant was indulging in the acts complained of. In fact, the wife of Mr. Pavitra Takle, namely, Mrs. Rajeshwar Takle also attempted to obstruct the Court commissioner and in conjunction with another employee, succeeded in destroying some of the evidence as reported by the Local commissioner. The Court Commissioner has reported filing the seized goods/articles in a box alongwith his report.

The witness of the plaintiff has also deposed to the aforesaid effect but in view of the report of the Court Commissioner, the said evidence need not be discussed. It may, however, be stated that the witness of the plaintiffs has proved the plaintiffs to be the owners of the copyright in the software programmes as Exhibit P4 to Exhibit P8 and the registered proprietor of the trademarks Exhibit P9 to Exhibit P20.

The plaintiffs have thus made out a case for grant of permanent injunction. The next question is of other ancillary reliefs claimed by the plaintiffs of delivery, accounts and damages. As far as the delivery is concerned, the Court Commissioner having seized the goods and filed the same before the court, the same does not survive. The plaintiff shall be at liberty to take custody of the said goods from the court and to destroy the same. This Court in Microsoft Corporation Vs. Mr. Yogesh Papat and Another, and in Time Incorporated Vs. Lokesh Srivastava and Another, , has also held that in such cases there is no purpose in ordering accounts against persons dealing in piracy. No accounts are kept of such sales.

However, merely because the defendant has chosen not to contest the suit, the defendant cannot escape the liability for damages. The defendant by loading pirated/unlicensed software on the computers assembled/sold by them has caused loss to the plaintiff inasmuch as had the defendants not indulged in such activities, the buyers of the said computers would have purchased the software of the plaintiffs. It has further been deposed that the average market price of licenced Microsoft products of which the defendants were illegally distributing pirated copies were of the value of Rs 7500/- or Rs 1500/- per licence. Mr. Sanjeev Sharma, witness of plaintiff has deposed of the plaintiffs being entitled to damages of Rs. 9,78,000/-. There is nothing to disbelieve the same. This Court has in the judgments (supra) taken judicial notice of the sales usually made by such vendors of the computers, in the Nehru Place market at New Delhi.

The suit as aforesaid is against a private limited company only. It is unlikely that the plaintiffs shall be able to recover the damages from the said private limited company. However, a corporate identity cannot be used to defeat such claims against the companies which are not in the nature of claims arising from bona fide commercial transactions but are claims of damages on account of the company through natural persons/directors having indulged in illegal activities. Thus the decree for recovery of damages shall also be executable against Mr. Pavitra Takle who admittedly till 1st September, 2001 i.e., till about two years after the institution of the suit was the director of the company as well as against the other directors of defendant company. The suit is therefore decreed for the relief of permanent injunction in terms of paragraph 58 (a)(b) and (c) and for recovery of damages in the sum of Rs. 9,78,000/- as aforesaid. The plaintiffs shall also be entitled to interest @ 10% per annum if the damages are not paid within 90 days of demand by plaintiffs. The plaintiffs shall also be entitled to costs of the suit from the defendants. The counsels fee is assessed at Rs. 50,000/-. Decree sheet be prepared.