Astral Polytechnik Limited vs Ashirvad Pipes Private Limited and Another

N. Kumar, J.—This writ petition is filed by the second defendant in OS 27080/2007 challenging the order passed on an interlocutory application u/s 22(4) of the Indian Designs Act, 2000 wherein the trial court has refused to transfer the suit to the High Court.

For the purpose of convenience, the parties are referred to as they are arrayed in the trial court.

The plaintiff M/s Ashirvad Pipes Pvt. Ltd. , filed a suit against M/s Vijay Steel Tubes and Fittings Private Limited, for a declaration that the defendants or their men are not entitled to manufacture, sale, use or offer for sale, the PVC Pipes and fittings produced with the list to the plaint, manufactured by the defendants, which infringes the rights, benefits and privileges granted under the Design Registration No. 203491 and Design Registration No. 203492 by the Patent Office of the Government of India in favour of the plaintiff and for a perpetual injunction restraining the defendants from applying, copying, dealing with or selling or from doing such other act, resulting into taking the features and element of the plaintiff''s design, a registered product which infringes the intellectual property rights of the plaintiff and for a direction to the defendant to render in detail accounts showing the entire quantum of infringing products manufactured and sold by the defendant through out and for a direction to hand over the impugned product pipes and for consequential reliefs.

After service of summons, second defendant filed a detailed written statement traversing all the allegations in the plaint. In addition to contesting the claim of the plaintiff on merits, in para. 17 of the written statement, they set-out in detail the facts which according to them clearly establish that the designs of the plaintiff are not register-able under the act and are liable to be cancelled on the grounds mentioned therein. In other words, apart from denying the allegations of infringement and passing off of their product as plaintiff''s products, they urged the grounds on which the registration of the plaintiff''s design ought to be cancelled u/s 19 of the Designs Act, 2000. It is thereafter, they filed an application u/s 22(4) of the Act requesting the City Civil Court to transfer the suit to the High Court for decision. The said application was opposed by the plaintiffs on the ground that not only they are enforcing the statutory remedy u/s 22(2) of the Act, but also they are enforcing their common law right of passing off and therefore Section 22(4) is not attracted to such a right.

After hearing both the parties, the learned trial Judge held that the plaintiff''s suit is not u/s 22(2) of the Act seeking for damages for violation of his copy right design, but the plaintiff''s relief is for declaration that the defendants or their men are not entitled to manufacture, sell their products in infringement of the rights of suit design registration number; Consequently for permanent injunction restraining the defendants or their men from applying, copying, dealing with or selling etc. , of the said suit design and thirdly to direct the defendants to deal with accounts showing the entire quantum of damages pertaining to the suit design and lastly to direct the defendants to hand over the impugned products. He was of the view that the plaintiff''s reliefs claimed is higher than what is provided u/s 22(2) of the said Act. Section 22(2) only pertains to damages for the violation, to the maximum extent of Rs. 50,000/- only. But, in this case, plaintiff is not at all seeking any relief u/s 22(2) i.e., damages only and the relief is entirely different from the relief provided u/s 22(2) as detailed above. Therefore, only if the defence of revocation of the design is taken in a suit or proceeding for relief under Sub-section (2) of Section 22(4), Section 22(4) is attracted and therefore he dismissed the said application.

Aggrieved by the said order of the learned trial judge, second defendant has preferred this writ petition.

Sri G Shivdas, learned Counsel appearing for the second defendant/petitioner herein submitted that the language employed in Sub-section (3) and (4) of Section 22 is very clear. It is not confined only to a proceeding u/s 22. The defendant has a right to urge grounds on which the registration of a design may be cancelled, as stipulated such a defence is available to a defendant both u/s 19, in a suit filed u/s 22 of the Act as well as a suit filed for passing off under common law. In either of the suits which is filed in the City Civil Court of Bangalore, if such a defence is taken, the Civil Court has no option except to transfer such a suit to the High Court for decision. Learned trial Judge has not properly appreciated the words "in any suit" or "any other proceeding" found in Sub-sections (3) and (4) of the Act and has read both those phrases to include a proceeding u/s 22(2) of the Act.

Per contra, Sri Srivatsa, learned Sr. counsel appearing for the plaintiff/respondent contended the words "in any suit" or "any other proceeding" referred to in Sub-sections (3) & (4) necessarily applies only to a proceeding u/s 22(2). They cannot be read disjunctively. It is to be read conjunctively and if so read, the order passed by the trial Court is legal and valid and do not call for interference.

In order to appreciate the aforesaid rival contentions, it is necessary to have a careful look at Section 22 which reads as under:

Section 22: Piracy of registered design-

(1) During the existence of copyright in any design it shall not be lawful for any person.

(a) for the purpose of sale to apply or cause to be applied to any article in any class of articles in which the design is registered, the design or any fraudulent or obvious limitation thereof, except with the license or written consent of the registered proprietor, or to do anything with a view to enable the design to be so applied; or

(b) to import for the purposes of sale, without the consent of the registered proprietor, any article belonging to the class in which the design has been registered, and having applied to it the design or any fraudulent or obvious limitation thereof; or

(c) knowing that the design or any fraudulent or obvious limitation thereof has been applied to any article in any class of articles in which the design is registered without the consent of the registered proprietor, to publish or expose or cause to be published or exposed for sale that article.

(2) If any person acts in contravention of this section, he shall be liable for every contravention-

(a) to pay to the registered proprietor of the design a sum not exceeding twenty-five thousand rupees recoverable as a contract debt, or

(b) if the proprietor elects to bring a suit for the recovery of damages for any such contravention, and for an injunction against the repetition thereof, to pay such damages as may be awarded and to be restrained by injunction accordingly;

Provided that the total sum recoverable in respect of any one design under Clause (a) shall not exceed fifty thousand rupees;

Provided further that no suit or any other proceeding for relief under this Sub-section shall be instituted in any Court below the Court of District Judge.

(3) In any suit or any other proceeding for relief under Sub-section (2), every ground on which the registration of a design may be cancelled u/s 19 shall be available as a ground of defence.

(4) Notwithstanding anything contained in the second proviso to Sub-section (2), where any ground on which the registration of a design may be cancelled u/s 19 has been availed of as a ground of defence and Sub-section (3) in any suit or other proceeding for relief under Sub-section (2), the suit or such other proceeding shall be transferred by the Court, in which the suit or such other proceeding is pending to the High Court for decision.

(5) When the Court makes a decree in a suit under Sub-section (2), it shall send a copy of the decree to the Controller, who shall cause an entry thereof to be made in the register of designs.)

The Act provides for registration. Once a design is registered, the proprietor of the design shall have a copyright in the design during ten years from the date of registration and if he so chooses, to get it extended for another five years. During the existence of copyright in any design, it is not lawful for any person to make use of the said copyright as a design without a license or written consent of the registered proprietor. Section 22 of the act sets-out what a piracy of the registered design is and what are lawful acts with reference to a registered copy right design and when the user becomes unlawful. It sets out that for the purpose of sale, application, import, publishing and exposing for sale of their article, the registered design should not be made use of, without license or written consent of the registered proprietor, and it would amount to a contravention of the rights conferred under the Act.

Sub-section (2) of Section 22 of the Acts provides for the liabilities on account of such contravention, and the remedies and reliefs to which the registered proprietor of the design is entitled to. The remedies provided in the Sub-section (2) of Section 22 is not exhaustive. If any person acts in contravention of Sub-section (1) of Section 22, a registered proprietor of a design in the event of contravention would be entitled to a sum not exceeding Rs. 25,000/- from such person who infringes the registered design of the registered proprietor. Clause (b) of Sub-section (2) also provides for a suit for the recovery of damages for such contravention, as well as a suit for injunction against the repetition of such contravention. The second proviso to Sub-section (2) of Section 22 provides the forum where the "Suit" or "Any other proceeding" for relief under the said Sub-section is to be instituted. It shall not be instituted in any court below the Court of District Judge.

Sub-section (3) of Section 22 provides, "In any suit" or "Any other proceeding" for relief under Sub-section (2) of Section 22, every ground on which the registration of a design may be cancelled u/s 19, shall be available as a ground of defence. In other words, the defendant in a suit brought by the registered proprietor of a design complaining of infringement, apart from contesting the claim on the ground that there is no infringement as alleged, it is also open to him to take up defences which are set-out in Section 19 of the Act which are good grounds for cancellation of registration of a design.

Sub-section (2) of Section 22 only provides for statutory remedies. They are not exhaustive. Apart from those statutory remedies, the registered proprietor of a design would be entitled to remedies that arc available under common law. In addition to the reliefs set-out in Sub-section (2) of Section 22, a registered proprietor of a design would be entitled to claim rendition of accounts or profits in a suit for infringement. He also would be entitled to the relief of delivering of the infringing material and for destruction of such material. The Act do not exclude the enforcement of such remedies. The wordings of the section are very clear. "In any suit" or "Any other proceeding" for the relief under Sub-section (2) do not refer only to the reliefs to be granted under Sub-section (2) of Section 22 as contended by the learned Counsel. A careful reading of Sub-section (2) of Section 22, shows that the section is dealing with the liabilities, a person would incur if he infringes the copy right in a registered design. Sub-section 2(a) is not referring to any remedy. Infact, both the words compensation or damages is conspicuously missing in the said provision. The phrase used is "Contract debt". It quantifies it at Rs. 25,000/- (Rupees Twenty Five Thousand only) being the higher limit. The first proviso to the said provision makes it clear that the total sum recoverable in respect of any one design under Clause (a) shall not exceed Rs. 50,000/- (Rupees Fifty Thousand only). Therefore, the maximum amount recoverable for contravention of the registered design is statutorily fixed. If the contravention persists, the registered proprietor has been given the option to bring a suit for the recovery of damages or for inj unction against repetition thereof or both.

Therefore, the statute provides two remedies to a registered proprietor. These are the legal proceedings provided under Sub-section (2) of Section 22. "Any other proceeding" for the relief under Sub-section (2) referred to in Sub-section necessarily refers to the aforesaid two types of remedies provided under the said Sub-section. That is the statutory remedies. No other remedy is provided under the statute for such contraventions. Similarly, "In any suit", the opening words of Sub-section (3) do not refer to the suit referred to in Clause (b) of Sub-section (2) of Section 22. The words "Any suit" referred to thereto refer to proceedings other than under Sub-clause (b) which also includes a suit. "Any suit" referred to a suit other than the suit instituted under the act to enforce the statutory remedies provided under the Act. It is a suit to enforce the common law remedies. Therefore, the words "In any suit" or "Any other proceeding" for relief under Sub-section (2) has to be read disjunctively and not conjunctively otherwise it leads to absurdity. When the Legislature has consciously used the aforesaid two different phrases, they cannot be read to mean one and the same. Each phrase has to be given its due weight and meaning. Between the two phrases, all the remedies to which a registered proprietor would be entitled to is covered. It includes both the statutory remedies as contained in Section 22(2) of the Act as well as the common law remedies. The foundation of such a claim is the registration of a design.

Section 19 of the act provides for cancellation of registration. It sets out five grounds on which any person interested may present a petition for the cancellation of registration of a design at any time after the registration of the design to the Controller. Sub-section (2) of Section 19 provides for an appeal to the High Court against any order of the Controller. When such a petition under Sub-section (1) of Section 19 is filed before the Controller, he has been given the discretion to decide the petition on merits or he may refer such petition to the High Court. On such reference, High Court shall decide the petition so referred. Though the civil court has been vested with the power and jurisdiction to decide the question of infringement, payment of damages and other reliefs, it has not been vested with the jurisdiction to cancel the registration of a design made under the Act. The said power vests only with the Controller and the High Court.

Therefore, in a proceedings initiated by the registered proprietor for any of the reliefs to which he is entitled to under Sub-section (2) of Section 22 or "In any suit" claiming other reliefs to which he is entitled to in law, if the defendant sets-up a defence and urges in addition to other grounds, grounds mentioned in Section 19 for cancellation of a registered design, then the Civil Court shall transfer the suit or other proceeding for relief under Sub-section (2) to the High Court for decision. No discretion is left to the Civil Court in this matter, once the ground set-out in Section 19 of the Act is urged as a ground of defence. As the Civil Court has no jurisdiction to adjudicate the said grounds and has no jurisdiction to order for cancellation of a registered design, it shall transfer the suit or such other proceeding pending before it to the High Court for decision.

In that view of the matter, the order passed by the trial judge refusing to transfer the pending suit to this Court when admittedly the second defendant has taken a defence u/s 19 of the Act contending that the design which is registered in favour of the plaintiff was not registerable at all, is erroneous and liable to be quashed. Hence, I pass the following:

RDER

(1) The writ petition is allowed.

(2) The impugned order passed on 2. 2. 2008 on IA u/s 22(4) of the Indian Designs Act, 2000 is hereby quashed.

(3) The said application is allowed.

(4) The trial Court i.e. , XVIII Addl. City Civil Court, Mayo Hall, Bangalore CCH 29 is directed to transfer the suit OS 27080/07 pending on his file to this Court u/s 22(4) of the Act forthwith.