Hilton International Co vs K.V.Kumar Ac+
2009 Latest Caselaw 4565 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                                      Reserved on : 23.10.2009
                                                                    Pronounced on : 10.11.2009

+                     I.A.No.8208/2007 IN CS (OS) 2015/2003

HILTON INTERNATIONAL CO.                                                 ..... Plaintiff

               Through: Mr. Praveen Anand with Ms. Ishani Sahiwal and Ms. Taapsi
                        Johri, Advocates.

                                            versus

K.V.KUMAR AC+                                                      ..... Defendant

               Through: Mr. G. Prakash, Advocate.

Coram:
Mr. Justice S. Ravindra Bhat
1.

     Whether the Reporters of local papers               Yes
       may be allowed to see the judgment?

2.     To be referred to Reporter or not?                  Yes

3.     Whether the judgment should be                      Yes
       reported in the Digest?


Hon'ble Mr. Justice S. Ravindra Bhat
%

1. This application under Order 9 Rule 13 seeks for recall and setting aside an ex parte

judgment and decree, dated 23.05.2007. It is submitted that the applicant (defendant) had

contested the suit by filing written statement as well as reply to the applications, which were

pending consideration. The applicant states that in the meanwhile, this Court had issued warrant

of arrest against him; the application for discharge of the warrant was rejected by the Court on

14.09.2006. The applicant further contends that an appeal by Special Leave Petition (SLP

I.A. No.8208/2007 in CS (OS) No.2105/2003 Page 1 No.19526/2006) was preferred before the Supreme Court, which, by order dated 04.12.2006

issued notice to the plaintiff and stayed operation of the order rejecting the application for

discharge of the warrant of arrest. The applicant further contends that the Special Leave Petition

was later listed on 09.07.2007 when the Court heard it to enable it to apply for recall of the ex

parte judgment.

2. It is contended that during the pendency of the suit - for infringement of the plaintiff's

registered trademark, the parties were negotiating with each other for settling the disputes in the

case. A draft had been exchanged by the counsel for this purpose. It is further contended that

the plaintiff had agreed to delete Clause 8 from the proposed settlement but it (the joint

compromise application) could not be filed within the time, which eventually led to issuance of

warrant of arrest against the defendant. That order was stayed by the Supreme Court.

3. The applicant states that the suit was listed on 17.01.2007 when the Court was informed

that the counsel had no intention for using the word "Hilton". The case was later listed on

19.02.2007 when the learned Judge was not holding the Court. The applicant contends that his

counsel noted a wrong date.

4. It is submitted that the defendant's counsel had actually appeared on 23.02.2007 but was

not aware of the previous order setting down the applicant/defendant ex parte. Advertence is

also made to defendant's affidavit dated 18.04.2007, which was filed in Court stating that

plaintiff's trademark would not be used.

5. The applicant states that its counsel left for Kerala on 19.05.2007 because the Supreme

Court had closed for summer vacation; on 23.05.2007 he became aware about the ex parte

judgment and applied for a certified copy, which was made available on 17.07.2007. In these

circumstances, defendant contends that it was not deliberately staying away from the

I.A. No.8208/2007 in CS (OS) No.2105/2003 Page 2 proceedings. Reliance is placed upon the draft application under Order 23 Rule 3 stated to have

been finalized and its affidavit stating that the defendant had changed the offending name from

"Hilton" to something else.

6. It is lastly submitted by the defendant/applicant that the ex-parte judgment has granted

relief in excess of what was even claimed. Learned counsel states that as against the relief of

Rs.5 lakhs damages claimed by the plaintiff, the Court granted Rs.23.59 lakhs in that regard and

also decreed interest at 6% per annum.

7. The plaintiff relies upon averments made in the reply to the application and contends that

at least on 11 dates of hearing i.e. 20.08.2004, 20.07.2005, 29.07.2005, 10.08.2005, 28.09.2005,

01.12.2005, 23.01.2006, 24.05.2006, 20.07.2006, 11.09.2006 and 11.01.2007, the defendants

were unrepresented. It is also submitted that there was a conscious pattern of negligence by the

defendant to diligently prosecute their case even though they were fully aware of the previous

orders of the Court, particularly in regard to issuance of warrant of arrest. It is submitted that

this Court was made aware of these facts and indeed took them into consideration in Para 6 of its

ex parte judgment dated 23.05.2007.

8. It is submitted by the defendants that this Court cannot go into the merits of the judgment

sought to be recalled and that in any event the evidence placed on record - both oral and

documentary, establish the claim for Rs.23.59 lakhs.

9. Learned counsel for the plaintiff urged that the non-appearance of the defendant/applicant

was neither unintentional nor bona fide. Elaborating this, it is contended that the defendant on

the one hand hotly contested the matter pertaining to issuance of warrant of arrest by reason of

non-compliance with the Court's order and at the same time intentionally chose to stay away

from the proceedings. In these circumstances, says the plaintiff, the application for recall of

I.A. No.8208/2007 in CS (OS) No.2105/2003 Page 3 judgment, deserves to be dismissed.

10. The Court has carefully considered the submissions. The defendant's application is

premised upon the allegation about its counsel not being aware about the correct date of hearing.

The order sheet in this case would show that on 17.01.2007, a statement was made by the

defendant through his counsel that there was no intention of using the trade name "Hilton" or a

deceptive trademark; time was sought and granted by the Court to the defendant to file an

affidavit in that regard. On the next date of hearing i.e. 19.02.2007, the Court did not take up the

matter since the learned Judge was on leave. The matter was accordingly posted on 23.02.2007,

when the Court proceeded to set down the defendant ex parte and list the matter for final hearing

on 20.03.2007. On that date someone seems to have appeared on behalf of the defendant; a

request for adjournment was acceded to by the Court. The order dated 30.03.2007 gives the

impression that a joint request for adjournment was made. However, the appearance recorded

would reveal that the plaintiff's counsel only was represented. Eventually on 04.04.2007, the

Court reserved the suit for judgment.

11. The plaintiff's objection to the application is based upon the previous conduct of the

defendant in the suit. No doubt prior to 17.01.2007 on several dates, the defendant was not

present; at the same time the order sheet would show that on that day a clear statement was made

that the offending mark would not be used by the defendant/applicant. On the next date of

hearing the learned Judge was on leave and the matter was posted to 23.02.2007 when the

defendant's counsel did not appear. However, he seems to have appeared on the very next date

of hearing i.e. 20.03.2007. If one keeps in mind all the circumstances, the averment of the

defendant that his counsel was unaware about the order setting the defendant ex parte cannot be

altogether ignored. The defendant also appears to have sent a draft application for recording the

I.A. No.8208/2007 in CS (OS) No.2105/2003 Page 4 compromise to the plaintiff. Its awareness about setting being set down ex parte becomes clear

from the reading of the order of the Supreme Court.

12. It is no doubt true that a party is expected to exercise vigilance when impleaded as a

defendant. The Court when confronted with an ex parte judgment is required to consider

whether the record bears out the claim that despite exercising due diligence the applicant's case

could not be prosecuted effectively or properly and that an ex parte judgment was therefore,

pronounced. As to what constitutes sufficient cause is of course dependent on the facts of every

case and the application filed by the defendant. There are judgments of the Supreme Court (refer

Malkiat Singh Vs. Joginder Singh 1998 2 SCC 206 and Lal Devi Vs. Vaneeta Jain 2007 (7) SCC

200) which say that even if a defendant prevaricates, or his counsel is not careful enough for

notifying him or attending the Court, if the consequence that visits the party is harsh, the Court

would secure the ends of justice, and set aside the ex-parte judgment.

13. Here what appears from the record is that the defendant contested the proceedings,

concededly till February 2007. It was set down ex parte on 23.03.2007; the Court appears to

have heard arguments on 04.04.2007 and later pronounced judgment. No doubt the defendant

was unrepresented on several occasions. Yet two important aspects cannot be lost sight of. One,

a warrant for arrest of the defendant had been issued by the Court and the application for its

discharge was rejected. The matter was pending on the file of the Supreme Court. During the

course of those proceedings apparently the defendant became aware of the ex parte judgment.

Two, the defendant had made a statement in January 2007 and that it would not use the offending

trademark. Apparently there was also a move to settle the disputes; a draft compromise

application was also circulated. If one considers all these facts, it is evident that the defendant's

explanation for its absence is a plausible one; it cannot be entirely ruled out. The defendant

I.A. No.8208/2007 in CS (OS) No.2105/2003 Page 5 points out that even though the plaintiff sought a decree for damages to the tune of Rs.5 lakhs,

the Court has granted a decree in excess of that to the extent of Rs.23.59 lakhs. Taking all these

factors into consideration, this Court is of the opinion that the defendant has shown sufficient

cause warranting exercise of discretion under Order 9 Rule 13, CPC.

14. In the above circumstances the judgment and decree dated 23.05.2007 is hereby

recalled/set aside but subject to the defendant paying costs of Rs.20,000/- to the plaintiff within

four weeks.

The application IA 8208/2007 is allowed in the above terms.

CS(OS) No.2105/2003

List before the Joint Registrar for further proceedings, on 30th November, 2009.

                                                                          S. RAVINDRA BHAT
                                                                              (JUDGE)
NOVEMBER 10, 2009




I.A. No.8208/2007 in CS (OS) No.2105/2003                                                   Page 6