AI Structured Summary
Not yet generated for this judgment
Judgment
Jayant Nath, J
IA No.6775/2017
This application is filed under Order 39 Rule 1 and 2 CPC seeking multiple reliefs. The main relief which has been sought is that defendant No.1 be
directed to secure the alleged liability which has accrued till date, being the profits from the sale of the product BURNOL from 1.5.2005 till 1.5.2017,
by way of a bank guarantee. Other consequential directions are also sought.
The plaintiff has filed the present suit seeking a decree of permanent prohibitory injunction to restrain the defendants from infringing the
plaintiff’s registered trademark BURNOL and from manufacturing and marketing any pharmaceutical preparation including burns cream or
otherwise using the said mark in violation of the plaintiff’s proprietary rights. Other connected reliefs are also sought.
Alongwith the suit the plaintiff filed an application under Order 39 Rule 1 and 2 CPC seeking interim orders. This application was dismissed by the
learned Single Judge of this court on 18.4.2006. The learned Single Judge recorded a finding in paragraph 42 that after considering all the facts and
reasons as given by Dr.Morepen (defendants) it appears that Dr.Morepen has been able to discharge the heavy burden cast upon it to show that the
transaction entered into on 19.4.2004 was a nominal transaction and the purpose of that transaction was entirely different from what was purported to
be. It was also noted that the plaintiff has not been able to make out any case for grant of an injunction in its favour. It also noted the submission of
the defendant that it is maintaining proper accounts of the sale of BURNOL burns cream. The court also held that in case Poysha (plaintiff) succeeds
in the suit it will be entitled to appropriate relief. It also noted that balance of convenience does not lie in favour of Poysha, namely, the plaintiff. In
paragraph 44 the court noted as follows:-
“44. The balance of convenience certainly does not lie in favour of Poysha. It has not, on its own showing, commenced any business activity. The
burns cream BURNOL is a medicinal product that has been in use in India for the last several years if not more. If its manufacture and production is
stalled because of the inability of Poysha to manufacture the product, it will cuase irreparable injury to consumers of the burns cream. Consequently, it
will be in the interest of consumers, if the position as it exists today is allowed to continue till the disposal of the suit. Poysha has not been able to show
how it will suffer any irreparable loss and injury if the injunction prayed for is not granted.â€
Against the above order an appeal was filed before the Division Bench which was disposed of by a consent order on 7.9.2012. The Division Bench
disposed of the appeal on the following terms:-
“(i) The evidence in Suit No. 1140/2005 and Suit No. 1276/2005 be recorded at the earliest point of time. Learned counsel agree that the
examination and cross-examination of the respective witnesses would be concluded on or before 30.04.2013. Thereafter, the matter would be listed
before the concerned Court for final disposal.
(ii) Doctor Morepen Ltd. shall maintain true and faithful accounts pertaining to the trademark and brand which is the subject matter of the pending
suits, i.e. BURNOL . To that end, it shall file an affidavit of its authorised director or person incharge. The affidavit shall undertake, in the event of an
adverse decree for accounts being issued by the Court in any of the pending proceedings against the said defendant, Doctor Morepen Ltd. shall satisfy
the same out of the assets. The affidavit shall also enclose a copy of the Board Resolution authorizing the said Director to file an affidavit. Further, the
affidavit shall undertake to file before the Court audited accounts of the company that Doctor Morepen Ltd. periodically, in every quarter, with a copy
to the learned counsel for the plaintiff in all the pending suits. The above arrangement shall continue and bind the parties till the disposal of the suits
pending before the learned Single Judge. It is clarified that the observations by the learned Single Judge in the impugned judgment were in the context
of the rival claims made by the parties in the proceedings. Since the issues in the suit are yet to be finally decided, nothing stated in the order or in the
order of the learned Single Judge shall be treated as reflecting the merits of the case entitling either parties to use it in any other case. The appeals are
disposed of in the above terms.â€
The grievance of the plaintiff now is that in the Statement of Accounts that are being filed by the defendant show that the defendants have earned
roughly Rs.60 crores from sale of BURNOL from the date of filing of the suit in 2005. Reliance is also placed on the balance sheets of the defendant
to state that the tangible assets of the defendant are only Rs.2.41 crores and the defendants have suffered losses of Rs.2.8 crores. Based on this, it is
pointed out that there is urgent need to pass directions to the defendant to secure the claim of the plaintiff. It is urged that in the eventuality a decree is
passed in favour of the plaintiff, the plaintiff would have no means to recover the dues.
I have heard learned senior counsel for the parties.
I am not inclined to pass any orders in the present application. Firstly, the Single Judge of this court has given a categorical finding holding that the
plaintiff has failed to make out any prima facie case in its favour or that balance of convenience in their favour. Hence, in the light of that finding, it
would not be proper to impose onerous conditions on the defendant.
Secondly, I am told that the evidence has progressed effectively. The evidence of the plaintiff has been completed and the evidence of the
defendant is likely to be concluded soon. The suit being at the final stage it would not at this stage be proper to grant relief sought for by the plaintiff.
Thirdly, in any case the appeal that was filed by the plaintiff was disposed of by a consent order by the Division Bench on 7.9.2012. I see no
compelling reason or justification to modify or add to the aforesaid agreed orders as was passed by the Division Bench.
In the context of giving security, as sought by the plaintiff, the Division Bench of this Court in Ajay Singh and Ors. Vs. Kal Airways Private
Limited and Ors. 2017 (4) Arb.LR 186 (Del) noted that the issue of injunction as sought for by a plaintiff is a matter of the weight to be given to the
materials on record and that it is a fact dependent exercise. The Division Bench held as follows:-
“Though apparently, there seem to be two divergent strands of thought, in judicial thinking, this court is of the opinion that the matter is one of the
weight to be given to the materials on record, a fact dependent exercise, rather than of principle. That Section 9 grants wide powers to the courts in
fashioning an appropriate interim order, is apparent from its text. Nevertheless, what the authorities stress is that the exercise of such power should be
principled, premised on some known guidelines â€" therefore, the analogy of Orders 38 and 39. Equally, the court should not find itself unduly bound
by the text of those provisions rather it is to follow the underlying principles........â€
In my opinion, in the facts of this case, the plaintiff has failed to make out a case whereby this court may exercise discretion and direct the
defendant to give security as sought for.
Accordingly, I see no merits in the present application and the same is dismissed.
CS(COMM)809/2016
List on 21.2.2018.