Calcutta High Court

Baynee Industries vs Rajiv Rosha on 14 August, 2024

                 IN THE HIGH COURT AT CALCUTTA
                 (Ordinary Original Civil Jurisdiction)
                             ORIGINAL SIDE


Present:

The Hon'ble Justice Krishna Rao



                          G.A. No. 1 of 2023
                                     In
                          CS No. 232 of 2022



                           Baynee Industries

                                   Versus

                                Rajiv Rosha




           Mr. Jishnu Chowdhury
           Mr. Ritoban Sarkar
           Mr. Sagnik Basu
           Mr. Subhrojyoti Dey
           Mr. Abhidipto Tarafder
                                                ... For the plaintiff.


           Mr. Shourjyo Mukherjee
           Mr. Sourojit Dasgupta
           Mr. Vishwarup Acharyya
                                               ... For the defendant.


Hearing Concluded On : 27.06.2024

Judgment on           : 14.08.2024
                                            2


Krishna Rao, J.:

1. The plaintiff has filed the suit for a decree for a sum of

Rs.19,77,48,220.13/- along with interest at the rate of 18% per

annum.

2. The defendant has filed the present application being GA 1 of 2023

under Order VII Rule 11(d) of the Code of Civil Procedure, 1908, for

rejection of plaint. On the following grounds:

                  a)    The suit is barred by the laws of limitation,

                  b)    It does not disclose a cause of action which

                        can be adjudicated by this Court,

                  c)    The suit is barred by an existing law,

                  d)    Non-joinder of necessary parties,

                  e)    No territorial jurisdiction of Court;

                  f)    Presence of Arbitration Clause,

                  g)    Specific admission by plaintiff,

                  h)    No crystalized claim;

                  i)    Technical incurable defects.

3. Mr. Shourjyo Mukherjee, Learned Advocate representing the defendant

submits that the foundation of the plaint case, is that the defendant

wrongfully interfered with the business of the plaintiff due to which the

plaintiff is entitled for damages. He submits that there is no pleading

in the plaint to the effect as to how the defendant's act or conduct or

the patent itself interfered with the business of the plaintiff. He

submits that there is no correlation between the claim made by the

plaintiff and the allegations made in the plaint.

4. Mr. Mukherjee submits that the plaintiff has pleaded that Tata Motors

Limited blocked the purchase orders of the plaintiff but it is nowhere

pleaded in the plaint that the Tata Motors Limited blocked the

purchase orders of the plaintiff in view of the act or patent of the

defendant. He submits that there is no single averment made in the

plaint that due to blocking of purchase order of the plaintiff by the

Tata Motors Limited, downfall in the business of the plaintiff was

caused by the defendant's patent.

5. Mr. Mukherjee submits that as per the case of the plaintiff towards the

end of January, 2019, the plaintiff was constrained to stop supplying

the products to Tata Motors Limited but at the same time, it is also

pleaded that the plaintiff supplied the same product to Tata Motors

Limited till October, 2021.

6. Mr. Mukherjee submits that the plaint filed by the plaintiff does not

disclose as to how the cause of action for claiming damages in the suit

arose as the plaint does not contain any pleading as to the correlation

between defendant's patent and downfall in the business of the

plaintiff. He submits that there is no pleading in the plaint that Tata

Motors Limited stopped accepting products from the plaintiff due to

the patent of the defendant. He submits that the plaint does not

disclose as to how and from when the plaintiff has suffered the

damages. He submits that the plaint does not disclosed any period

during which the plaintiff has suffered loss and damages and the

plaint also does not disclose how and in what manner the defendant's

conduct has caused any loss and damages to the plaintiff.

7. Per contra, Mr. Jishnu Chowdhury, Learned Advocate representing the

plaintiff submits that the plaintiff has been manufacturing and

supplying various automobile components to Tata Motors Limited

since 1980, along with other major players in the automotive market

including Hindustan Motors Limited, AVTEC Auto Limited etc.

8. Mr. Chowdhury submits that plaintiff started supplying/

manufacturing the exhaust brake units exclusively for the use of Tata

Motors Limited. Over 95% of the requirement of exhaust brake units

was purchased from the plaintiff and the position continued till the

year 2019. He submits that in the year 2018, the plaintiff came to

know that the defendant who is a business rival is also supplying the

same products to Tata Motors Limited on the basis of drawings

provided by Tata Motors Limited.

9. Mr. Chowdhury submits that the plaintiff enquired and discovered that

the defendant was also engaged to supply exhaust brake units to Tata

Motors Limited and in the process, the plaintiff came to know that the

exhaust brake units which was supplied by the defendant was

patented and the defendant alleged to have exclusive right to supply to

Tata Motors Limited.

10. Mr. Chowdhury submits that Tata Motors Limited had started to

ignore the plaintiff and on the contrary started increasing its business

with the defendant. He submits that the plaintiff has also came to

know that since the plaintiff has been portrayed as an unauthorized

supplier and the defendant claimed to have a patented right, Tata

Motors Limited refused to do any further business with the plaintiff.

11. Mr. Chowdhury submits that on 15th January, 2019, the plaintiff was

served the notice by the defendant wherein it was alleged that the

plaintiff is illegally offering for sale exhaust brake unit assembly

system and also threatened the plaintiff not to use such product failing

which severe consequences would cause.

12. Mr. Chowdhury submits that on receipt of the said notice, the plaintiff

has inquired into the matter and came to know that the patent

obtained by the defendant in respect of exhaust brake assembly unit

was illegal and does not constitute any inventive steps. He submits

that immediately, the plaintiff has filed an application for post-grant

opposition alleging that the patent granted to the defendant lacks

inventive steps and is not an innovation. He submits that on the

application of the plaintiff, by an order dated 1st January, 2022, the

patent granted to the defendant was revoked.

13. Mr. Chowdhury submits that by the time when the plaintiff has

obtained an order from the competent authority wherein the patent

granted to the defendant was revoked, Tata Motors Limited has

completely stopped its business with the plaintiff and due to which the

plaintiff has suffered severe loss and damages in the business and

thus the plaintiff has filed the suit.

14. Mr. Chowdhury by referring paragraphs 11, 12, 13, 16, 17, 20, 23, 31

and 32 of the plaint submits that the plaintiff has shown sufficient

cause of action for filing the suit against the defendant.

15. Heard the Learned Counsel for the respective parties, perused the

materials on record. Though the defendant has filed an application

under Order VII Rule 11(d) of the Code of Civil Procedure, 1908, for

rejection of plaint on the several grounds as mentioned in paragraph 2

(supra) but the Learned Counsel for the defendant had argued the

matter only with regard to the cause of action and written argument is

also filed with regard to cause of action.

16. Order VII Rule 11 of the Code of Civil Procedure, 1908, reads as

follows:

"11. Rejection of plaint.-- The plaint shall be rejected in the following cases:--

(a) where it does not disclose a cause of action;

(b) where the relief claimed is undervalued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed by the Court, fails to do so;

(c) where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the Court to supply the

requisite stamp-paper within a time to be fixed by the Court, fails to do so;

(d) where the suit appears from the statement in the plaint to be barred by any law;

[(e) where it is not filed in duplicate;]

[(f) where the plaintiff fails to comply with the provisions of rule 9:]

[Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature from correcting the valuation or supplying the requisite stamp-paper, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff.]"

17. The specific case made out by the defendant in the present application

is that there is no pleading in the plaint as to how the cause of action

arose and the plaint does not disclose any cause of action.

18. As per the case of plaintiff that from the year 1995-96, the plaintiff

has been manufacturing Exhaust Brake Units for Tata Motors Limited

and is also involved with the development of the same. The plaintiff

was involved with the development of the Throttled Valve and Throttled

Valve Lever since the month of December, 1995 and the plaintiff has

continuously improved its standard and maintained consistent quality

in the products. Tata Motors Limited used to source over 95% of its

requirements of Exhaust Brake Unit Assembly for its manufacturing

units from the plaintiff and started placing orders since 17th July,

2005.

19. The plaintiff continued its business with Tata Motors Limited for

supplying the Exhaust Brake Assembly and the position continued till

2019 and in between the tenure of the business relationship of the

plaintiff and Tata Motors Limited, the plaintiff had also supplied

equipment for Bharat Standard - I, Bharat Standard - II and Bharat

Standard - III vehicles. In the year 2016, Tata Motors Limited, called

upon the plaintiff to develop an Exhaust Brake Assembly as per

drawing TML Part No. 216343710101/0104, dated 5th April, 2016

since there was a change in the emission norms after 2017.

20. On 28th May, 2018, the plaintiff received a notice by an email from

the defendant, alleging that the product which was being supplied by

the plaintiff to the Tata Motors Limited was patented and in the same

notice, the defendant had also mentioned that the drawings were

provided to them by Tata Motors Limited. The plaintiff has inquired

into the matter and came to know that the patent obtained by the

defendant in respect of Exhaust Brake Unit Assembly was illegal and

does not constitute any inventive steps.

21. The plaintiff has filed an application for post-grant opposition alleging

that the patent granted to the defendant lacks inventive steps and is

not an innovation. On the application of the plaintiff, by an order dated

1st January, 2022, the patent granted to the defendant was revoked by

the competent authority.

22. It is the specific case made out by the plaintiff that towards the end of

January 2019, Tata Motors Limited blocked its purchase orders and

refused to accept delivery from the plaintiff. In paragraph 32 of the

plaint it is mentioned that defendant has interfered with the business

of the plaintiff with Tata Motors Limited and the business of the

plaintiff come to an end due to which the plaintiff has suffered loss and

damages. The plaintiff has described the loss and damages in the said

paragraph amounting to Rs. 19,77,48,220.13/-.

23. In paragraphs 33 and 34 of the plaint, the plaintiff has further

mentioned that the plaintiff has issued notice to the defendant on 19th

May, 2022, calling upon the defendant for damages and on receipt of

the notice, the defendant has sent reply on 6th June, 2022, denying the

claim of the plaintiff.

24. Under Order VII, Rule 11 of the Code of Civil Procedure, 1908, the

Court has jurisdiction to reject the plaint where it does not disclose a

cause of action, where the relief claimed is undervalued and the

valuation is not corrected within a time as fixed by the Court, where

insufficient court fee is paid and the additional court fee is not

supplied within the period given by the Court, and where the suit

appears from the statement in the plaint to be barred by any law.

Rejection of the plaint in exercise of the powers under Order VII, Rule

11 of the Code would be on consideration of the principles laid down

by the Hon'ble Supreme Court in the case of T. Arivandandam v. T.

V. Satyapal and Another, (1977) 4 SCC 467, the Hon'ble Court has

held that if on a meaningful, not formal, reading of the plaint it is

manifestly vexatious, and meritless, in the sense of not disclosing a

clear right to sue, the Court should exercise its power under Order VII

Rule 11 of the Code taking care to see that the ground mentioned

therein is fulfilled. In Roop Lal Sethi v. Nachhattar Singh Gill,

(1982) 3 SCC 487, the Hon'ble Supreme Court has held that where

the plaint discloses no cause of action, it is obligatory upon the court

to reject the plaint as a whole under Order VII, Rule 11 of the Code,

but the rule does not justify the rejection of any particular portion of a

plaint. Therefore, the High Court could not act under Order VII, Rule

11(a) of the Code of Civil Procedure, 1908 for striking down certain

paragraphs nor the High Court could act under Order VI, Rule 16 to

strike out the paragraphs in absence of anything to show that the

averments in those paragraphs are either unnecessary, frivolous or

vexatious, or that they are such as may tend to prejudice, embarrass

or delay the fair trial of the case, or constitute an abuse of the process

of the court. In ITC Ltd. v. Debts Recovery Appellate Tribunal,

(1998) 2 SCC 70, it was held that the basic question to be decided

while dealing with an application filed by the defendant under Order

VII, Rule 11 of the Code is to find out whether the real cause of action

has been set out in the plaint or something illusory has been projected

in the plaint with a view to get out of the said provision. In Saleem

Bhai and Others v. State of Maharashtra and Others, (2003) 1

SCC 557, the Hon'ble Supreme Court has held that the trial court can

exercise its powers under Order VII Rule 11 of the Code at any stage of

the suit before registering the plaint or after issuing summons to the

defendant at any time before the conclusion of the trial and for the said

purpose the averments in the plaint are germane and the pleas taken

by the defendant in the written statement would be wholly irrelevant at

that stage. In Popat and Kotecha Property v. State Bank of India

Staff Association, (2005) 7 SCC 510, the Hon'ble Court has culled

out the legal ambit of Rule 11 of Order VII of the Code in these words :

"There cannot be any compartmentalization, dissection, segregation

and inversions of the language of various paragraphs in the plaint. If

such a course is adopted it would run counter to the cardinal canon of

interpretation according to which a pleading has to be read as a whole

to ascertain its true import. It is not permissible to cull out a sentence

of a passage and to read it out of the context in isolation. Although it is

the substance and not merely the form that has to be looked into, the

pleading has to be construed as it stands without addition or

subtraction of words or change of its apparent grammatical sense. The

intention of the party concerned is to be gathered primarily from the

tenor and terms of his pleadings taken as a whole. At the same time, it

should be borne in mind that no pedantic approach should be adopted

to defeat justice on hair-splitting technicalities".