Kanade Anand Udyog Pvt. Ltd vs Indiana Gratings Pvt. Ltd. & Ors
2010 Latest Caselaw 181 Bom

    VBC                                       1                           app1044.10-23.11


            IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                             O. O. C. J.




                                                                                         
                        APPEAL NO.1044 OF 2010




                                                                 
                                  IN
                   NOTICE OF MOTION NO.1263 OF 2009
                                  IN
                         SUIT NO.3094  OF 2005




                                                                
                                WITH 
                   NOTICE OF MOTION NO. 2952 OF 2010

    Kanade Anand Udyog Pvt. Ltd.                                  ...Appellant.




                                                   
                            Vs.
    Indiana Gratings Pvt. Ltd. & Ors.
                                    ig                            ...Respondents.
                                    ....
    Mr.V.R.Dhond   with   Mr.   N.C.Parekh   and   Ms.Bhavna   Sinde   i/b. 
    Mansukhlal Hiralal & Co.   for the Appellant.
                                  
    Dr.Virendra   Tulzapurkar,   Senior   Advocate   with   Mr.Shriraj   Dhruv 
    and Ms.RanjuYadav i/b. Dhru & Co.  for Respondent Nos.1 and 2.
                                    .....
                                    CORAM : DR.D.Y.CHANDRACHUD AND 
            


                                                   ANOOP V. MOHTA,  JJ.

November 23, 2010.

ORAL JUDGMENT (PER DR.D.Y.CHANDRACHUD, J) :

The appeal arises out of an order of a Learned Single

Judge by which a motion for interim relief in a suit based on

infringement of copyright was made absolute. Parties will be

referred to by their appellations in the Plaint.

2. The action by the Plaintiff is founded on an alleged

VBC 2 app1044.10-23.11

infringement of its copyright in artistic work. The artistic work in

the present case consists of Industrial Drawings. The Plaintiff

sought protection in respect of 126 drawings which have been

referred to in Exhibit 'G' to the Plaint.

3. The First Defendant is a Limited Company controlled by

the Kanade family. The Second Defendant is a partnership firm of

which Defendant Nos.8, 10 and 11 are partners. Defendant Nos.4

to 7 are former employees of the Plaintiff. Defendant Nos.13 to 23

are fabricators, who had, in the past, made parts for the Plaintiff

which were used for manufacturing electroforged grating

machines. The case of the Plaintiff is that Defendant Nos.4 to7

resigned from the service of the Plaintiff. Of them, Defendant Nos.

5 to 7 joined service with the First Defendant. On a police

complaint being lodged, in the course of the investigation, the

drawings of the Plaintiff were found in the custody of the First

Defendant and with some amongst the fabricators, Defendant Nos.

13 to 23. According to the Plaintiff, these drawings were furnished

to them by the Plaintiff's employees.

VBC 3 app1044.10-23.11

4. A Notice of Motion was taken out for interim orders in

the suit. By an order dated 26 June 2008, a Learned Single Judge

of this Court found prima facie merit in the contention of the

Plaintiff. An order of injunction was passed restraining the

Defendants from using the Plaintiff's drawings mentioned in

Exhibit 'G' to the Plaint and thereby infringing the copyright of the

Plaintiff or making any three dimensional objects of machine parts

which would be a reproduction of the Plaintiff's drawings.

5. A fresh motion for interim relief was taken out by the

Plaintiff. The foundation for the fresh motion is that the First

Defendant had, despite the order of injunction, not only continued

to infringe the Plaintiff's copyright in the original artistic drawings

by making infringing copies, but also made three dimensional

copies, electroforged gratings machines and was marketing and

selling electroforged grating made in complete violation of the

Plaintiff's right in the original artistic work. These acts of

infringement were alleged to have been committed in collusion

with Defendant No.24. Defendant No.24 is a Limited Company. All

the shares of the Company are held by Defendant Nos.8 to12, the

VBC 4 app1044.10-23.11

son of Defendant No.8 and by the wife of Defendant No.10. The

case of the Plaintiff in the affidavit in support was that the First

Defendant, through Defendant No.24, has started marketing and

selling the electroforged gratings manufactured by the use of

electroforged grating machines which was an infringement of the

Plaintiff's original artistic work in the drawings. The Plaintiff

averred that Defendant No.24 has been awarded six contracts of

the value of Rs.4.7 crores by Bharat Heavy Electricals Ltd.

Essentially, in the fresh motion three reliefs were sought by the

Plaintiff - (i) Action under Order 39 Rule 2A for breach of the

order of injunction; (ii) The striking out of the defence of the

Defendants; and (iii) The appointment of a Receiver of

electroforged grating machines manufactured from parts based on

the drawings of the Plaintiff.

6. Defendant No.24 filed an affidavit in response to the

Notice of Motion on 9 June 2009. In the affidavit, it was stated

that the brochures which are relied upon by the Plaintiff pertain to

a machine which was imported by the Defendant from a South

African supplier against an order placed on 15 January 2008.

VBC 5 app1044.10-23.11

Defendant No.24 stated that the Company had commissioned the

electroforged machine imported from the South African supplier

and "has been conducting its business from the said machine".

What Defendant No.24 did not disclose in his affidavit is that

besides the machine imported from South Africa, the Company

was in possession of two additional machines which were sourced

indigenously.

7. A rejoinder was filed by the Plaintiff on 29 August 2009.

Exhibit 'A' to the rejoinder contains a statement of the orders

obtained by Defendant No.24, many of which were prior to the

date of the import of the machine from South Africa. This was

relied upon by the Plaintiff in order to establish the case that

Defendant No.24 was in possession not only of an imported

machine, but other machines which were based on the use of the

parts made in infringement of the copyright of the Plaintiff.

8. On 22 June 2010, in a statement made on behalf of

Defendant No.24 before the Learned Single Judge, the Company

conceded that it had three electroforged grating machines one of

VBC 6 app1044.10-23.11

which was imported from South Africa. The Learned Single

Judge directed Defendant No.24 to show how and when these

three electroforged grating machines or parts thereof had been

purchased. In response to those directions, an affidavit was filed

by Defendant No.24 on 28 June 2010. In the affidavit, it was

stated that Defendant No.24 has three machines, one of them being

sourced from South Africa and for the other two machines, parts

were purchased locally in India from diverse manufacturers.

Documents were disclosed by Defendant No.24.

9. The Plaintiff filed an affidavit before the Learned Single

Judge on 6 July 2010. The affidavit buttressed the case of the

Plaintiff that the two indigenous machines which were in the

custody of Defendant No.24 had been assembled from the use of

parts which were made in infringement of the copyright of the

Plaintiff in its artistic work. For instance, in respect of the first

machine, the Plaintiff pointed out that Defendant No.24 was

incorporated only on 12 July 2005 and hence the company could

not have procured or acquired the parts of that machine. Most of

the purchase orders corresponding to the invoices were prior to the

VBC 7 app1044.10-23.11

date of incorporation of Defendant No.24. None of the invoices

were raised on Defendant No.24. Of the total payment of Rs.72.52

lakhs, Defendant No.24 made a payment of Rs.2.84 lakhs.

Significantly, Defendant No.24 failed to produce even a single

drawing to establish that the two indigenous machines had been

assembled on the basis of drawings other than the drawings of the

Plaintiff. The Plaintiff also highlighted various invoices which

pertain to specific machine parts for which drawings were

necessarily required. Exhibit 'A' to the affidavit filed by the Plaintiff

is titled "Illustrative invoices exposing Infringement". Exhibit 'A'

contains a list of orders placed by Defendant No.24 on parties from

whom drawings pertaining to the particular part were recovered.

For instance, in Sr.No.1 of Exhibit 'A' which relates to Defendant

No.20, the drawings of the Plaintiff were recovered from that

Defendant and from the workshop of the First Defendant. Exhibit

'D' to the affidavit contains a statement of invoices produced by

Defendant No.24 which as a matter of fact referred to drawings.

Despite being called upon to produce the drawings by the Plaintiff,

Defendant No.24 failed to produce any drawings.

VBC 8 app1044.10-23.11

10. The principal contention which has been urged on behalf

of the Appellant, original Defendant No.24, is that no comparison

was made by the Learned Single Judge of the machines in the

custody of Defendant No.24 with the artistic drawings of the

Plaintiff and it is only on that basis that a case for infringement

could have been made out. In our view, the Learned Single Judge

has carefully evaluated the documents which were produced on the

record and the surrounding circumstances of the case before

entering a finding that the two indigenous machines in the custody

of Defendant No.24 were assembled on the basis of parts which in

turn had utilized drawings of the Plaintiff. Significantly, Defendant

No.24 did not produce any drawings at all. The case of the

Plaintiff was that the machines were assembled on the basis of the

parts sourced from various fabricators to whom the Plaintiff's

drawings had been supplied in the past by its employees who had

since resigned from service and joined the First Defendant. A

prima facie case was made out for the grant of interim relief. The

balance of convenience clearly lay in favour of the grant of relief as

sought. Despite an order of injunction that was granted by the

Learned Single Judge in the earlier motion, a device was created to

VBC 9 app1044.10-23.11

defeat the order by setting up a case that Defendant No.24 was

now in custody of the electroforged machine sourced from South

Africa which is producing electroforged gratings. In these

circumstances, the Learned Single Judge was entirely justified in

appointing a Receiver in respect of the two indigenous

electroforged grating machines and in directing the Receiver to seal

the two machines. The Defendants have been permitted to use the

machine which has been imported from Sough Africa.

11. No case for interference is, therefore, made out. The

Appeal is dismissed. No costs.

12. In view of the disposal of the appeal, the Notice of

Motion does not survive and is accordingly disposed of.

( Dr.D.Y.Chandrachud, J.)

( Anoop V. Mohta, J.)