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AO/192/2008 19/ 27 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
APPEAL
FROM ORDER No. 192 of 2008
For
Approval and Signature:
HONOURABLE
MR.JUSTICE K.M.THAKER
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1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To be
referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
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MACLEODS
PHARMACEUTICALS LTD. - Appellant(s)
Versus
ALEMBIC
LIMITED - Respondent(s)
=========================================================
Appearance
:
Mr.Mihir
Thakore with MR
ANIP A GANDHI for
Appellant(s) : 1,
Mr. KS NANAVATI with Mr. K.K. Nanavati for
NANAVATI ASSOCIATES for Respondent(s) :
1,
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CORAM
:
HONOURABLE
MR.JUSTICE K.M.THAKER
Date
: 13/06/2008
ORAL JUDGMENT
1. This
Appeal from Order arises from an order dated 29.05.2008 passed below
Ex. 5 in Civil Suit No. 18 of 2008 whereby the Additional District
Judge, Vadodara has passed an ad-interim injunction against the
present appellant in terms of paras 38[a] and 38[b]of the injunction
application (Ex. 5). The said paragraphs 38[a] and 38[b] read thus:
?S38. The plaintiff,
therefore, prays that:-
[a] Pending hearing and
final disposal of the suit, the Hon’ble Court be pleased to restrain
by an order of injunction the Defendant by themselves, their
servants, agents, chemists, distributors, retailers and anybody
claiming through the Defendant are not entitled to use trade mark
GEMIMAC or any mark identical with or deceptively similar to the
Plaintiff’s reputed trade mark GERIMAC as their trade mark in respect
of manufacturing, selling, exporting or distributing their goods or
in any manner advertising their goods so as to pass off the goods of
the Defendant as and for the Plaintiff;
[b] Pending hearing and
final disposal of the suit, the Hon’ble Court be pleased to restrain
by an order of injunction the Defendant by themselves, their
servants, agents, chemists, distributors, retailers and anybody
claiming through the Defendant are not entitled to use trade mark
GEMIMAC or any mark identical with or deceptively similar to the
Plaintiff’s reputed trade mark GERIMAC as their trade mark in respect
of manufacturing, selling, exporting or distributing their goods or
in any manner advertising their goods so as to cause confusion and/or
deception;??
2. The
appellant, being aggrieved by the said order has approached this
Court by the captioned appeal. The appellant has, essentially raised
serious grievance against the impugned order on the ground that there
was no basis or justification for the learned court to grant exparte
injunction without issuing notice before granting the injunction,
and that too without recording reasons as contemplated by and
required by the provision of Rule 3 of Order 39 of the Code of Civil
Procedure, 1908 (hereinafter referred to as ‘the Code’). The
appellant has prayed that the said order may be quashed and set
aside.
3. The
appellant has raised below mentioned question of law, which according
to the appellant, arise from the impugned order.
?S(a) Whether
irreparable or serious mischief will ensue to the plaintiff;
(b) Whether the refusal
of exparte injunction would involve greater injustice than the grant
of it would involve;
(c ) The court will also
consider the time at which the plaintiff first had notice of the act
complained so that the making of improper order against a party in
his absence is prevented.
(d) The court will
consider whether the plaintiff had acquiesced for sometime and in
such circumstances it will not grant exparte injunction;
(e) The court would
expect a party applying for exparte injunction to show utmost good
faith in making the application;
(f) Even if granted the
exparte injunction would be for a limited period of time;
(g) General principles
like prima-facie case balance of convenience and irreparable loss
would also be considered by the Court;??
4. In
view of the issues arising in this appeal, appeal deserves
consideration. Hence ADMIT. Considering
the facts and request of the respective counsel and with their
consent, the appeal is taken up and heard for final disposal.
5. The
facts involved in and relevant for the present purpose, as stated by
the appellant, are briefly recapitulated below.
5.1 The
case of the appellant is that it is a Public Limited Company
incorporated and registered under the provisions of the Companies
Act, 1956 having its registered office at Mumbai and is interalia
engaged in the business activity of manufacturing and selling of
pharmaceutical products. The appellant has claimed that one of the
several pharmaceutical products being manufactured and marketed by
it, is a medicinal preparation for respiratory disorders, which is
marketed in the name and style of GEMIMAC i.e. under the trademark
?SGEMIMAC??.
5.2 The
appellant claims that it has started manufacturing and selling the
said medicinal preparation since May 2007 and at present the turnover
of the said product is of about 20 crores per annum. The appellant
further claims that it has independently and honestly conceived,
coined and adopted the said trade mark GEMIMAC wherein the prefix
GEMI stands for Gemifloxacin and that the suffix MAC stands for
Macleods Pharmaceutical (which is the name of the appellant company).
5.3 The
appellant has further stated that earlier it was served with a ?Scease
and desist notice?? by the opponent in the present case asking the
appellant to desist from manufacturing/marketing and using, in
relation to the medicinal and pharmaceutical preparation, the
impugned mark GEMIMAC because it was deceptively and also confusingly
similar to the appellant’s reputed trade mark GERIMAC.
5.4 The
appellant has stated that by its communication dated 03.07.2007 it
had responded to the said notice and informed the opponent that the
trade mark GEMIMAC was an independently and honestly coined, invented
and adopted by it and that therefore there was no cause or
justification for the opponent to issue the said ?Scease and desist
notice?? and that the opponent, having faced with competition had
come out with groundless threats and legal proceedings. It is
further claimed by the appellant that for almost ten months the
opponent did not take any steps in the matter and that therefore it
was reasonably believed by the appellant that after the reply dated
03.07.2007, the opponent had appreciated and accepted the case and
the issue was put to rest.
5.5 It
is the case of the appellant that suddenly after a period of almost
ten months it was served with the impugned exparte order restraining
it from using its trade mark GEMIMAC or any mark identical with or
deceptively similar to the present opponent’s (i.e. original
plaintiff’s) trade mark GERIMAC and also restraining it from
manufacturing, selling, exporting or distributing its goods in any
manner using the trade mark GEMIMAC.
5.6 The
appellant has stated that the said exparte order is not only
unreasonable, unjustified and unwarranted in the facts of the case
but is also in total disregard to the mandatory requirements of the
provisions under Rule 3 of Order 39 and proviso of Rule 3 which
requires that in all cases, except where the object of granting
injunction is likely to be defeated by delay, notice must be issued
before granting injunction inasmuch as the learned court failed to
appreciate that the original plaintiff i.e. present opponent had
issued the ?Scease and desist notice?? after almost one year since
the appellant started manufacturing and marketing the medicinal
product with the trade mark GEMIMAC and that the suit was filed after
almost ten months since the said ?Scease and desist notice?? was
issued and that further there was no justification in granting the
exparte mandatory injunction without issuing notice of a week or
atleast three days so as to enable the appellant to place on record
its reply and supporting material.
6. In
the back drop of such facts and on the premise of such contentions,
the appellant has preferred present appeal and challenged the said
exparte order dated 29.05.2008.
7. The
opponent i.e. the original plaintiff has appeared on caveat and on
11.06.2008 when the subject appeal was circulated for hearing,
request for an adjournment for one day was made during which the
opponent-plaintiff wanted to file its reply affidavit opposing the
civil application for interim relief in the present appeal. In view
of the consent of the appellant, the proceeding was adjourned to
12.06.2008.
8. Mr.
Mihir Thakore, learned senior counsel appeared with Mr. Gandhi for
the appellant and Mr. K.S Nanavati, learned senior counsel appeared
with Mr. K.K Nanavati for the opponent-plaintiff. Mr. Thakore made
his submissions on 12.06.2008 and Mr. Nanavati has replied the same
on 13.06.2008 i.e. today.
9. Mr
Mihir Thakore reiterated the factual aspects and in particular
stressed the fact that the appellant’s product is extremely popular
and within a span of one year it has a market of about Rs.20 crores
per annum. He submitted that the ?Scease and desist notice?? was
issued on 20.06.2007 whereas the suit has been filed on 29.05.2008
i.e. after almost ten months since the date of notice and/or the date
of the reply by the appellant to the opponent-plaintiff.
9.1 Mr.
Thakore submitted that in view of such time lag and the delay, there
was no justification for the learned court to not issue notice, for
one week or atleast three days, and to proceed to grant an exparte
mandatory injunction on the same day when the suit was presented.
Mr. Thakore was quick to add that it is not his attempt to urge that
the said delay of ten months would defeat the prayer for interim
injunction but his attempt is to urge that the said delay of ten
months atleast defeated or wiped out any justification, if at all
there was any, of granting exparte mandatory ad interim injunction
without issuing notice as required by Rule 3 of Order 39 of the Code.
He submitted that the said requirement is mandatory and the order
passed by the learned court without issuing notice is contrary to the
legal decisions well settled by catena of judgements and also in
total disregard to the requirement prescribed by the Code.
9.2
Mr. Thakore in support of his submissions relied upon the judgement
of this Court (Coram : J.M Panchal, J., as his lordships then was)
dated 29.01.1994 rendered in Appeal From Order No. 29/94. He has
also relied upon the judgement of the Hon’ble Apex Court in the case
of Laxmikant V. Patel vs. Chetanbhai Shah reported in 2002(3) SCC 65
as well as the order of this Court (Coram: D.N Patel, J.) dated
16.10.2007 passed in Appeal From Order No.378 of 2007 and orders
dated 18.07.2007 in Appeal From Order No. 261/07 and dated 30.08.2007
in Appeal From Order No. 306/07.
10. On
the other hand, Mr K.S. Nanavati referred to the factual aspects
mentioned by the opponent-plaintiff in the application for interim
injunction and submitted that the opponent i.e. original plaintiff is
a century old company which is highly reputed for its pharmaceutical
and medicinal products. He also submitted that the plaintiff spends
a significant amount for research and development work and has
several patentable inventions to its credit. He also submitted that
the plaintiff takes ample measures to protect its Intellectual
Property Rights. Mr. Nanavati further submitted that the plaintiff
has coined several trade marks with prefix GERI. He submitted that in
case of the product in question, the prefix GERI is derived from the
word GERIATRICS and to illustrate his submission he made reference to
plaintiff’s various products which are being marketed under the trade
mark having prefix GERI eg. GERIPOD, GERICEFF, GERICARD, GERIGAT,
GERIFLAM, GERIJOINT, GERIGRAD. Mr. Nanavati submitted that so far as
the product in question i.e. GERIMAC is concerned, the plaintiff has
secured sales of 40.23 lakhs, 58.86 lakhs and 60.29 lakhs during the
financial years 2005-06, 2006-07 and 2007-08 respectively. He
supplemented the said submission by also referring to the amount
spent by the plaintiff company towards promotion of the said product
GERIMAC and submitted that amount of Rs. 6.03 lakhs, 8.83 lakhs and
9.04 lakhs have been spent by the plaintiff company for the promotion
of the said product during the aforesaid period of three years.
10.1 According
to Mr. Nanavati, it is the case of the plaintiff that the present
appellant, with the intention of exploiting the goodwill of the
plaintiff company and reputation of the product GERIMAC, resorted to
the trade mark GEMIMAC which is deceptively and confusingly similar
to the plaintiff’s trade mark GERIMAC. He also submitted that the
product in question is a medicinal preparation which is used for
upper respiratory disorders. In other words his submission amounts
to contending that both the products have a similar purpose and that
therefore the phonetic and/or visual similarity would result into
confusion and thereby adversely affect the prospects of the
plaintiff’s product and the plaintiff’s business.
10.2 Mr.
Nanavati also made reference to the very common and off repeated
contention based on almost illegible or difficult to decipher
prescriptions and in light of that contention he submitted that there
was a strong likelihood of confusion which would facilitate the
passing off the appellant’s products instead of the well reputed
product of the plaintiff. Mr. Nanavati also submitted that the
plaintiff has placed on record before the learned Court the
material-literature of opponent’s products which, even as per the
appellant, has several side effects. Mr Nanavati on the basis of
such material, which is said to be obtaining on the record of the
learned court, submitted that there is, therefore, strong
justification for injunction as prayed for by the plaintiff so that
the passing off of the appellant’s product instead of the opponent’s
product may be immediately arrested and hence the order is justified.
10.3 Mr.
Nanavati also submitted that the learned court has recorded
sufficient reasons to justify the order granting injunction without
issuing notice and the said order cannot be treated as an order
devoid of any reasons. In his submission, it cannot be said on
reading of the order, that the court has gone wrong in taking
decision to grant exparte injunction and it also cannot be said that
the reasons recorded by the court are so perverse or arbitrary and
palpably wrong that it would warrant its setting aside. Mr Nanavati
submitted that may be by some standard the said order probably may
not be meeting with the normal standards of a well reasoned order,
but only on that ground the same ought not be set aside. Mr.
Nanavati in support of his submissions relied upon the judgements
reported in the following:
1988(8)
PTC 85
AIR
1994 J & K 25
AIR
2003 Calcutta 64
(2001)
5 SCC 73
2007(1)
GLR 686
1997(2)
GLH 1002.
11. I
have extensively heard Mr. Thakore and Mr. Nanavati for contesting
parties and I have also gone through the record of the present
appeal.
12. In
the present case which arises from a passing off action initiated by
the present opponent (original plaintiff) against the present
appellant (original opponent) on the ground that by manufacturing and
marketing its medicinal preparation under the trade mark GEMIMAC, the
appellant herein is indulging into passing off of its product by
using phonetically/visually similar trade mark, the learned court
has, on 29.05.2008 granted exparte injunction and the injunction
order is not limited till the returnable date but is until further
orders.
13. This
Court, at this stage of the proceedings, does not intend to go into
the merits of the rival claims, lest it should affect the proceedings
before the learned Civil Court where the suit as well as notice of
motion are still pending. It is clarified that the narration of
factual aspects and observations in the present order are only for
the purpose of deciding this appeal against the exparte injunction
order and are not made on merits of the subject matter of the Civil
Suit and/or by examining the merits of the case and that therefore
they are not to be treated as observations or findings on the merits
of the subject matter or in favour of or against any party.
14. The
factual aspects which are relevant for the present appeal, are not in
dispute inasmuch as it is an undisputed fact-situation that the
original plaintiff i.e. opponent herein has started manufacture and
sale of the medicinal preparation under the trade mark GERIMAC since
September 2005. Accordingly, the plaintiff i.e. the opponent herein
is a prior user of the trade mark GERIMAC.
15. It
appears that the plaintiff was granted drug license in July 2005 for
the said product GERIMAC and it had applied for registration of the
trade mark in Class 5 on 06.10.2005. An advertisement with reference
to the plaintiff’s application came to be published in the trade mark
journal on 16.04.2006 and it appears that thereafter some objection
by a company named Mac Remedies Pvt. Ltd was raised and it is
registered. It is, however, not in dispute that even after the said
advertisement, way back in April 2006, present appellant did not
raise any objection and has not done so until now. It is also not in
dispute that the plaintiff has been marketing the said medicinal
product with trade mark GERIMAC since September 2005 whereas the
appellant herein has started marketing its product with trade mark
GEMIMAC after more than almost 15 months, in May 2007.
15.1 It
is pertinent that after the appellant started marketing the product
in May 2007, in June 2007 the plaintiff issued the ?Scease and
desist notice??. This fact also is not in dispute. True it is,
that the appellant replied the said ?Scease and desist notice?? on
03.07.2007 and the suit came to be filed on 29.05.2008 i.e. after
almost ten months from the date of the appellant’s reply. It is also
not in dispute that the purpose or use of both the products is
similar and that the said medicinal preparations are Schedule H
drugs, as a result of which it would be available or sold only on
prescription.
16. In
the passing off action against the appellant filed by the present
opponent, the learned Civil Court, as it appears from the perusal of
the order, upon taking into account the contents of the suit and
interim relief application and after hearing the plaintiff’s advocate
considered it appropriate to pass exparte injunction, and did not
issue notice as required by Order 39 Rule 3.
16.1 The
appellant has mainly two fold objections against the impugned order.
The first one being that there was no justification for granting
exparte injunction without issuing notice for a period of one week or
atleast three days, more particularly when the suit was filed after
almost ten months since the date of ?Scease and desist notice?? and
the said time gap or difference demonstrated that delay of a week or
three days would not have defeated the object of granting the
injunction, and second being that the learned court has failed to
record reasons, which in appellant’s submission is mandatory,
disclosing as to how and why the court believed that delay of a week
or three days would defeat the object of granting injunction.
17. For
appreciating the appellant’s grievance and objections against the
impugned order it is appropriate to refer to the provisions under
Rule 3 of Order 39 and its proviso and the relevant portion of the
impugned order. The provision under Rule 3 of Order 39 reads thus:
?S3. Before
granting injunction, Court to direct notice to opposite party.-
The Court shall in all cases, except where it appears that the object
of granting the injunction would be defeated by the delay, before
granting an injunction, direct notice of the application for the same
to be given to the opposite party:
[Provided that, where
it is proposed to grant an injunction without giving notice of the
application to the opposite party, the Court shall record the reasons
for its opinion that the object of granting the injunction would be
defeated by delay, and require the applicant-
(a) to deliver to the
opposite party, or to send to him by registered post immediately
after the order granting the injunction has been made, a copy of the
application for injunction together with-
a copy of the
affidavit filed in support of the application;
a copy of the plaint;
and
copies of documents
on which the applicant relies, and
(b) to file, on the day
on which such injunction is granted or on the day immediately
following that day, an affidavit stating that the copies aforesaid
have been so delivered or sent.]
18. The
relevant portion of the impugned order reads thus:
?S… I have a reason
to believe that the defendant has issued reply to the notice given by
the plaintiff and has claimed to be bonafide in such manufacturing
drugs. It is claimed that there are number of drugs suffixing with
Mac manufactured by the defendant. However, it is pertinent to not
that not a single drug except the drug in dispute has such
resemblance as ?SGERIMAC??. The size and color of the tablets is
also resembling. Both the companies are engaged in manufacturing
Antibiotic drugs and there is a reason for me to believe that if the
injunction at this stage is not issued ex-parte, the defendant will
be able to enjoy the benefit of the goodwill earned by the plaintiff
company under the pretext of deceptively similar name of the drug…??
19. The
question which arises is as to whether the said order is in disregard
to or in violation of the provision under Rule 3 of Order 39. While
considering the provision under Rule 3 of Order 39, the Hon’ble Apex
Court has, in the judgement in the case of Shiv kumar Chadha vs.
Municipal Corporation of Delhi and Others reported in 1993(2) GLH 778
held as under:
?S32. Power
to grant injunction is an extraordinary power vested in the Court to
be exercised taking into consideration the facts and circumstances of
a particular case. The Courts have to be more cautious when the
said power is being exercised without notice or hearing the party who
is to be affected by the order so passed. That is why Rule 3 of
Order XXXIX of the Code requires that in all cases the Court shall,
before grant of an injunction, direct notice of the application to be
given to the opposite party, except where it appears that object
of granting injunction itself would be defeated by delay. By the
Civil Procedure Code (Amendment) Act,1976, a proviso has been added
to the said rule saying that ?Swhere it is proposed to grant an
injunction without giving notice of the application to the opposite
party, the Court shall record the reasons for its opinion that the
object of granting the injunction would be defeated by delay…??
(Emphasis supplied)
20. When the learned
court grants an order of injunction without prior notice, then the
other side not only has a reasonable expectation but also has a right
to know which are the facts and aspects or factors of the subject
matter which appealed to or weighed with the learned court. The
other side expects to know the reasons which convinced the learned
court to grant exparte injunction so that it can while responding to
and opposing the notice of motion, effectively address and deal with
the same. Further, when appeal against the order is provided under
the Code, then the appellate court also expects to know the reasoning
of the Court which convinced it to pass the order of injunction
without prior notice. Not only this, it is also necessary that the
reasons recorded in the order be so recorded that it would amply
clarify as to on what basis or for which reasons the learned court
believed that a prior notice of atleast one week or three days would
defeat the object of granting injunction. The said provision under
Rule 3 Order 39 postulates an additional requirement which the
learned court is required to consider before an order of injunction.
Normally, while granting or refusing interim order, the court would
take into account the well-recognised principles of strong prima
facie case, balance of convenience and irreparable injury which
cannot be compensated in terms of money, however, when an injunction
order is being passed without prior notice then there is an
additional requirement which is required to be observed, namely,
recording the reasons which convince the court to grant injunction
order without prior notice and which leads the learned court to the
belief that the time which would be consumed in issuing prior notice
would frustrate the object of granting injunction.
20.1 In view of the
proviso of Rule 3 Order 39 it is necessary that the said reason must
be clearly and eloquently spelt out in the order granting exparte
interim injunction. The said requirement was highlighted by the
Hon’ble Apex Court when the Hon’ble Apex Court observed, in the
judgement in the case of Shiv Kumar Chadha (supra)vide para 34 as
under:
?S…we are quite
conscious of the fact that there are other statutes which contain
similar provisions requiring the court or the authority concerned to
record reasons before exercising power vested in them. In
respect of some of such provisions it has been held that they are
required to be complied with but non-compliance therewith will not
vitiate the order so passed. But the same cannot be said
in respect of the proviso to Rule 3 Order 39. The Parliament
has prescribed a particular procedure for passing of an order of
injunction without notice to the other side, under exceptional
circumstances. Such ex parte orders have far-reaching effect,
as such a condition has been imposed that Court must record reasons
before passing such order. It it is held that the compliance of the
proviso aforesaid is optional and not obligatory, then the Parliament
shall be a futile exercise and that part of Rule 3 will be a
surplusage for all practical purpose. Proviso to Rule 3 of Order 39
of the Code, attracts the principle, that if a statute requires a
thing to be done in a particular manner, it should be done in that
manner or not at all. This principle was approved and accepted in
well-known cases of Taylor v. Taylor, (1875) 1 Ch.D. 426;
Nazir Ahmed v. Emperor, AIR 1939 PC 253. This Court has also
expressed the same view in respect of procedural requirement of the
Bombay Land Tenancy and Agricultural Lands Act in the case of
Ramchandra Keshav Adke v. Govind Joti Chavare AIR 1975 SC
915.??
(Emphasis Supplied)
20.2 It is in light of
the legal position thus settled by the Hon’ble Apex Court that the
impugned order is required to be examined. A glance at the order
shows that the learned court has taken into account ?Sthe similar
purpose or use?? of the two products and that the plaintiff has
several products in its armour which have prefix GERI and the
appellant (original defendant) has various products in its kitty
which have MAC as the suffix. After recording the said features
emerging from the case before it, the learned court has proceeded to
record that it has reason to believe that if the exparte injunction
was not granted at this stage then the defendant(i.e. present
appellant) would be able to enjoy the goodwill earned by the
plaintiff company. The learned court, except recording the said
reason, has not given out any reason from which it can become clear
that for the particular reason the learned court believed that if the
notice for a period of one week or atleast three days before granting
injunction was issued then within that short period of one week or
three days, the object of granting injunction would be defeated.
20.3 In the present
case, the said aspect becomes more relevant and necessary, besides
the importance and relevance on account of proviso under Rule 3, in
light of the fact that the appellant has started manufacturing and
marketing its product under the trade mark GEMIMAC since May 2007
i.e. since about one year and also for the reason that the plaintiff
itself had waited for atleast ten months after issuing the ?Scease
and desist notice??.
20.4 The learned court
does not appear to have addressed and/or considered the said feature
of the present case. The learned court also does not appear to have
addressed the issue that if the concern for general public was, as is
now claimed by the plaintiff on the ground that the alleged phonetic
and visual similarity would result into deceiving people, so
important in its mind, then in that event the plaintiff would have
immediately moved the court after it received reply dated 03.07.2007
and would not have waited until 29.05.2008.
21. It is true that if
there is a case of ?Sprior-user?? in passing off action then such
delay would not and does not affect the plaintiff’s case for interim
injunction and if it is prima facie noticed by the court that there
is a phonetic and/or visual similarity and that such similarity
between competing trade marks is deceptive and confusing then
injunction ought to be granted. As held by the Hon’ble Apex Court
in the case of Cadilla Healthcare Ltd. vs Cadilla Pharmaceuticals
Ltd. granting interim injunction, once such deceptive and confusing
similarity is prima facie established is all the more necessary in
matters involving pharmaceutical and medicinal preparations. The
Hon’ble Apex Court, in this regard, has observed in the said case of
Cadilla Healthcare Ltd (supra) that drugs have a marked difference in
the composition with completely different side effects, and that the
test should be applied strictly as the possibility of harm resulting
from any kind of confusion can have unpleasing if not disastrous
results, and that the courts need to be particularly vigilant where
the defendant’s drugs, of which passing off is alleged, is meant for
curing the same ailment as the plaintiff’s medicine but the
compositions are different and that the confusion is more likely in
such cases and the incorrect intake of medicine may even result in
loss of life or other serious health problems and that the Schedule H
drugs are those which can be sold by the Chemist only on the
prescription of the doctor but Schedule L drugs are not sold across
the counter but are sold only to the hospitals and clinics. It is
true that the Hon’ble Apex Court in the case of Cadilla Healthcare
Ltd (supra) has emphasized that the courts need to be particularly
vigilant and prompt in making appropriate order of interim injunction
if the prima facie case of deceptive similarity is made out. It is,
however, difficult to accept the contention of Mr. Nanavati for the
opponent that requirement provided under Rule 3 of Order 39 and its
proviso is to be or can be lightly given a go-bye or appeal court
should readily or easily assume, though not recorded in or not to be
found in the order, that the learned court has fully satisfied itself
that the delay in issuing notice would defeat the injunction’s
objective. It is relevant to note that in the said judgement the
Hon’ble Apex Court has not considered the propriety or
maintainability of an exparte ad-interim order without prior notice.
It is also difficult to not consider the importance of the
requirement prescribed under the said provision, as emphasized by the
Hon’ble Apex Court in the case of Shiv Kumar Chadha (supra).
22. As regards the
judgement of the Hon’ble Apex Court in case of Laxmikant V. Patel,
the Hon’ble Apex Court has observed that once a case of passing off
is made out grant of prompt exparte injunction is proper, however,
the legality or propriety and maintainability of order not fulfilling
the requirement of recording reasons for waiving prior notice was not
the issue in the said case and further more the Hon’ble Apex Court
has also observed that there was no delay, unlike present case, in
bringing passing off action. Likewise in the judgement in the case of
R.N.Bhagat also the issue of maintainability or propriety of exparte
injunction without recording reasons for waiving Notice was not in
issue before this Court but the legality and maintainability of order
granted after hearing both sides was in issue. In the judgement in
the case of K.K. Puri the Hon’ble Jammu and Kashmir High Court
categorically recorded, while granting exparte order on 22.7.1993
that the meeting was to be held on 26.7.1993. This fact required and
justified the waiver of notice or else the objective of stay would be
lost since the meeting would be convened. The reasoning of the
learned Court, though not in very many words, was clearly flowing
from the order and that is how the Hon’ble Court considered it enough
while holding that the rule or its proviso does not contemplate
special manner of recording reasons and that length of reasons is not
a guide. However, in present case, the facts and order differ
materially and reason justifying waiver of notice is not recorded
while dealing with the factors discussed above. In the case of NOCIL
(supra) the fact under consideration was the failure of
applicant-plaintiff to comply with the proviso of Rule 3 of order 39
and not the absence of reasons for waiver of notice. In the judgement
reported in AIR 2003 Cal pg. 64 the Hon’ble Court has held that the
provision is not mandatory and its non-compliance does not render
the order void. This Court in the judgements in AO 261 of 2007 and AO
306 of 2007 and AO 378 of 2007 has vacated the orders which did not
record reasons for waiving notice. As noticed hereinabove in present
case the learned Court has not only not addressed the issue keeping
in focus the time lag between the ?Scease and desist notice?? but
also failed to limit the injunction order until returnable date,
after making process returnable after about 20 days, and granted the
same till further orders.
22.1 When the impugned
order is examined in light of the law laid down by the Hon’ble Apex
Court with regard to Rule 3 of Order 39 and its proviso, the question
which arises is as to whether the impugned order contains or gives
out the reasoning which convinced the learned court to make exparte
interim injunction.
23. Mr. Nanavati
submitted that the entire set of material including the literature of
the appellant’s products, was on the record of the learned court and
the impugned order does disclose that the learned court has looked
into the said material. It is true that the learned court has
recorded thus: ?SRead the application, affidavit and also perused
the record. Heard the Ld. Advocate Mr. A.P. Hathi for the
plaintiff…??. It is also true that it may be difficult to
consider the impugned order as an order completely bereft of any
reasoning.
23.1 However, as noticed
hereinabove earlier, when an order granting exparte injunction is
passed, then in addition to the reasoning as regards the strong prima
facie case, balance of convenience and irreparable injury which
cannot be compensated in terms of money, the reasons disclosing as to
how and why a prior notice of period of one week or atleast three
days would so gravely defeat the object of granting injunction that
the plaintiff cannot withstand such short delay also are required to
be recorded. The impugned order lacks in this requirement and
requires this Court to proceed on assumption that the learned Court
must have satisfied itself about the expediency and only then waived
the notice. This would defeat the right and expectation of the other
side, besides the requirement prescribed by the proviso.
24. The impugned order
is also required to be examined in light of the facts of the present
case. It is pertinent to recall that the plaintiff filed the suit
after almost ten months since the issuance of the ?Scease and desist
notice??. In the back drop of this vital fact, the learned court
ought to have addressed the issue that when the plaintiff itself
waited for a period of almost ten months since the ?Scease and
desist notice?? and for almost same period since the appellant
started marketing the product, how would or how could a period of 7
or atleast 3 days defeat the object of granting injunction.
24.1 It is as much
necessary to record the reasons in response to such issue as it is to
consider the issue and the order ought to disclose that both aspects
have been met. As noticed hereinabove earlier, it is not only the
other side’s legitimate expectation but also a right to know the
reasons which convinced the court to waive notice and to not give a
period of atleast 2-3 days to the other side by issuing notice
before granting interim injunction.
24.2 On perusal of the
impugned order it is difficult to say that the learned court has
disclosed the reasons which weighed with it for not issuing prior
notice and for waiving the said requirement and issuing exparte
interim injunction.
25. In light of the
facts of the present case and on perusal of the operative part of the
impugned order, which gives out that the returnable date of the
process issued by the court in respect of the notice of motion is
18.06.2008, it would be of little consequence now to set aside the
order and it is now also not of any effective or practical purpose to
decide as to whether the impugned order, which apparently lacks in
the reasoning as regards the issue on hand, should be quashed and set
aside or not inasmuch the process is, as noticed hereinabove earlier,
made returnable on 18.06.2008. While dealing with the appeal, it is
also relevant for this Court to note that the impugned order is dated
29.05.2008 and the appeal is filed in the Registry on 10.06.2008 and
circulated on 11.06.2008 whereafter it came to be adjourned with
consent of the appellant for a day so as to enable the opponent i.e.
the original plaintiff to file reply affidavit.
26. With regard to the
impugned order an additional feature is also required to be noted
viz. the trial court has not only failed to expressly record the
reasons which convinced it to make exparte order, but the learned
court has also granted a blanket and unlimited injunction/stay order.
26.1 It is pertinent
that though process is made returnable on 18.06.2008, the injunction
in terms of paras 38(a) and 38(b) is granted ?Suntil further
orders??. In this way, the learned court not only granted exparte
injunction, and without recording reasons which convinced it to pass
such an order, but it did not even think it necessary to restrict the
operation of such exparte injunction order until returnable date
only.
26.2 It is beyond
comprehension as to why the exparte injunction order is not
restricted atleast until returnable date. That is the least which
could have been done and ought to have been done by the learned
court.
26.3 It is, as observed
above, not considered necessary or expedient at this juncture to
further examine the issue as to whether the impugned order should be
quashed or set aside or not because the process is made returnable on
18.06.2008 and also for the reason that even the appellant has,
though it preferred to approach this court by way of this appeal, not
considered it necessary and appropriate to immediately file its reply
to the notice of motion on or before the suit.
26.4 The appellant
herein could have very well forwarded its reply to the opponent and
placed it on record of the Civil Suit proceedings. However, the
appellant has not followed such course of action. This Court is
informed, in reply to the query, that it is not done even as of today
by the appellant. This should deprive the appellant of the relief of
quashing of the order from the date when granted.
27. Upon having noted
that the impugned order falls short of the requirement prescribed by
Rule 3 Order 39 and its proviso and does not comply with the said
requirement and the direction of granting injunction until further
order is also unwarranted and unreasonable, this Court is of the view
that in the peculiar facts of the case, the following order and
directions would suffice and serve the interest of justice and the
subject appeal can be, justifiably, disposed of with below mentioned
directions.
The interim injunction
granted by order dated 29.05.2008 is restricted and limited until
18.06.2008 and shall not operate beyond 18.06.2008. However, it
would be open for the learned court to pass appropriate order,
including similar or any other order of injunction, after hearing
the parties.
The appellant herein
shall positively file its reply-response to notice of motion (and if
it so desires to the suit also) before or atleast on 18.06.2008 with
a copy to the plaintiff and shall not seek any further time to file
reply to the notice of motion and/or suit. In the event the
opponent prays for further time it would be open for the trial court
to pass any appropriate order after hearing the parties to the
proceedings.
If the appellant
(original opponent) files its reply-response before or atleast on
18.06.2008 then it would be open to the plaintiff to file rejoinder,
if need be, on or before 20.06.2008 and the learned court would
thereafter proceed to hear and decide the matter i.e. the injunction
application on urgent basis, and if the roster so permits, by
hearing the same on day to day basis.
In the event the
plaintiff has not to file any rejoinder then it would disclose the
said decision on 19.06.2008 and the hearing of the injunction
application shall, in that event, commence from 19.06.2008 and the
learned court need not wait till 20.06.2008.
It would be open to the
learned court to pass appropriate order, though not of unlimited
nature, to protect the interest of the parties and subject matter of
the suit, until the hearing of the injunction application is
concluded and the order with regard to the interim injunction is
passed. But this can be done after hearing and taking into account
the submissions of the parties to the proceedings.
The original plaintiff
i.e. the present opponent would maintain, separately, accounts of
production, sale, receipts etc of the product in question from
29.05.2008 onwards until further orders in this regard are made by
the learned court and it shall file the same on the record of the
said suit, every fortnight.
28. The learned court
would pass appropriate order, including interim order on merits after
hearing the parties and without being influenced by this order and by
taking into account the well settled and recognised principles
relevant for deciding the passing off action and prayer for interim
relief in passing off action.
29. This Court is
conscious of the limitation in dealing with appeal from order against
an ad-interim and discretionary order, however, when it is shown that
while passing the discretionary order, the learned court has failed
to observed the conditions prescribed by the Code then, it is
necessary and justified for the appellate court to step-in and
interject. In the present case, the learned court, not only passed
exparte order after passage of almost ten months since the cease and
desist notice and failed to disclose the reasons as to why the laxity
on the part of the plaintiff was not considered a ground sufficient
enough for issuing prior notice of atleast three days, but the
learned court also failed to make the process issued on notice of
motion immediately and has made it returnable after almost 20 days
and granted an unlimited injunction i.e. did not restrict the
injunction till the date on which the notice is made returnable. It
is in this view of the matter and in light of the aforesaid
discussion that this Court considered it appropriate to issue the
aforesaid directions and to restrict the injunction till 18.06.2008
i.e. the returnable date of the notice. Hence the aforesaid order.
30. With the aforesaid
observations and directions, this appeal is disposed of. No order as
to costs. In view of the order passed in the Appeal From Order,
Civil Application shall not survive and is accordingly disposed of.
(K.M. THAKER,
J.)
Divya//
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