Digital Filing System Inc. vs Akhilesh Agarwal And Anr.
2005 Latest Caselaw 106 Del

JUDGMENT

1. Whether this Court or for that matter any Civil Court in India could injunct a person from pursuing his lawfully instituted proceedings in a foreign Court and whether such injunction would amount to staying the proceedings of that Court are the interesting questions arising in this appeal.

2. The appeal is directed against an ex-parte interim order dated 27.7.2004 passed by the learned Trial Judge in respondent's suit No.1470/2002 and interim stay matter (IA No.2785/2003) directing appellant not to proceed any further in his case pending in the Court of Magistrate Judge PEPE, United States District Court at Michigan, USA.

3. The parties are involved in a dispute on infringement of copyright in software under the name 'DIGIFILE'. While Appellant has filed a suit at Michigan, USA seeking cancellation of US copyright registration obtained by the respondent, the respondent has also filed a declaratory and injunction suit in this regard along with an application under Section 39, Order 1 and 2 CPC for grant of an interim injunction restraining Appellant from proceeding in any manner with his case in the Michigan Court. This application appears to have been filed in the backdrop of the statement made by Appellant's counsel before the learned Trial Judge here on 10.4.2003 that appellant would not proceed with his case in the US District Court till the statement of one Harish Verma was recorded under Order 10, CPC in this Court. This statement was later extended till 29.10.2003 and yet appellant is said to have made a statement in the US District Court that suit filed by Respondent No.1 in this Court stood disposed of pursuant whereto US District Court resumed its proceedings in the Appellant's case.

4. Respondent reacted to this by filing a contempt petition against appellant and seeking a restraint order against him from proceeding with his case at US Court. Learned Trial Judge on consideration of this application found that appellant had admitted having wrongly conveyed the status of the Court proceedings of this Court to the US District Court and making it as a basis passed impugned ex-parte order dated 27.7.2004 injuncting appellant from proceeding with his case in the US Court.

5. Appellant challenges this order on the ground that learned Trial Judge had no power to injunct him from pursuing his case before the US Court. It is submitted by appellant's counsel that there was no provision in the CPC or any law in force in India which empowered the learned Judge to injunct him from pursuing his lawfully instituted proceedings which amounted to staying proceedings of a foreign Court by this Court.

6. Learned Counsel for respondent Mr.Malhotra maintained that this Court was competent to injunct the appellant from proceeding with his case in the US Court. He referred to two Supreme Court judgments in ONGC v. Western Company of North America and V/O. Tractoroexport, Moscow v. Tarapore and Co. and a judgment of this Court in Palm Print Textiles (India) Ltd. v. British Millerain Co. Ltd. , to support his contention.

7. Appellant's plea that the Civil Court had no power to injunct a person from pursuing his legal remedy appears attractive on the face of it because there is no express power provision in the CPC which empowers a Civil Court to injunct a person from pursuing a lawfully instituted remedy. Order 39 CPC also does not authorise issuance of such injunction. But the matter would not rest at that because the Civil Court was competent to grant a temporary injunction in appropriate cases in exercise of its inherent power in cases not covered by Order 39 CPC to promote the interests of justice.

8. The courts are, after all, constituted for doing justice and it is inherent in the discharge of their functions to remove and rectify and to undo any injustice. Therefore, even in the absence of any provision in the CPC vesting a particular power on the Court and of any provision which prohibits a remedial action being taken in the facts and circumstances of the case, the Civil Court would be competent to pass any appropriate order that would advance the interests of substantial justice. This is not to suggest that Court could pass any order it liked while exercising its inherent power which was exercisable only in rare cases and special circumstances and very sparingly. Whether or not, the exercise of this power would depend on the facts and circumstances of a particular case. This position is supported by several Supreme Court judgments. In the ONGC case(supra), the Court restrained the Western Company of North America from pursuing its proceedings in the American Court which were held to be oppressive in the facts and circumstances of that case.

9. The Court held:-

As we have pointed out earlier, it would be unfair to refuse the restraint order in a case like the present one for the action in the foreign Court would be oppressive in the facts and circumstances of the case. And in such a situation the Courts have undoubted jurisdiction to grant such a restraint order whenever the circumstances of the case make it necessary or expedient to do so or the ends of justice so require. The following passage extracted from paragraph 1039 of Halsbury's Laws of England Vol.24 at page 579 supports this point of view:-

With regard to foreign proceedings the Court will restrain a person within its jurisdiction from instituting or prosecuting proceedings in a foreign Court whenever the circumstances of the case make such an interposition necessary or expedient. In a proper case the Court in this country may restrain person who has actually recovered judgment in a foreign Court from proceeding to enforce that judgment. The jurisdiction is discretionary and the Court will give credit to foreign Courts for doing justice in their own jurisdiction.

10. The position, therefore, that emerges is that a Court of Record/Civil Court would be competent to injunct a party before it from pursuing the proceedings in a foreign Court in exercise of its inherent power, saved by Section 151 CPC and by doing so it was not staying the proceedings of the foreign Court, which it had no jurisdiction to do but was only injuncting a party before it.

11. Whether such circumstances existed in the present case as to justify the restraint order was still pending consideration of the learned Trial Judge who was seized of Respondents application for grant of ad-interim injunction and in which the Appellant had all the opportunity to set up his case. It was for the appellant to persuade the learned Judge that the circumstances of the case did not merit the continuation of the ex-parte restraint order.

12. The appeal is accordingly disposed of leaving Appellant free to raise his pleas and contentions before the learned Trial Judge and to seek appropriate orders in the matter. The learned Trial Judge is requested to consider the appellant's stand and pass appropriate orders in the matter after hearing the parties.

13. Parties to appear before learned Single Judge on 03.02.2005.