Agi Logistics Inc & Anr. vs Sher Jang Bahadur & Anr.
2009 Latest Caselaw 3789 Del

        IN THE HIGH COURT OF DELHI AT NEW DELHI

                               CS(OS) 1314/2009

        AGI LOGISTICS INC & ANR                     ..... Plaintiffs
                       Through Mr. Samdarshi Sanjay with
                       Ms. Surbhi Agarwal, Advocate

                      versus

        MR. SHER JANG BHADHUR & ANR                  ..... Defendants
                      Through Ms. Vibha Mahajan Seth, Advocate
                      for D-1 to 5 and 7/applicants in IA 9768/09.
                      Mr. Bhaskar Mishra, Advocate for D-.8.

        CORAM:
        HON'BLE DR. JUSTICE S. MURALIDHAR

1.      Whether reporters of the local newspapers be allowed to
        see the order?                                         No
2.      To be referred to the Reporter or not?                 Yes
3.      Whether the order should be reported in the Digest?    Yes


                           ORDER

16.09.2009

IA No.9768/2009

1. This is an application filed by Defendants 2 to 5 and 7 (hereinafter

„applicants‟/„defendants‟ under Order XXXIX Rules 3 and 4 CPC

seeking vacation of an ex parte ad interim injunction granted by this

Court by an order dated 22nd July 2009 in IA No.9150/2009 in the above

suit.

2. Notice in this application was directed to issue by this Court on 3rd

August 2009. Replies have been filed by the Plaintiffs and a rejoinder

thereto has been filed by the applicants.

3. This Court has heard the submissions of Mr. Samdarshi Sanjay, the

learned Advocate for the Plaintiffs and Ms. Vibha Mahajan Seth, the

learned Advocate for the Applicants/Defendants 2 to 5 and 7.

4. It is stated in the application that despite this Court in its order dated

22nd July, 2009 directing that the Plaintiffs should comply with the

requirements of Order XXXIX Rule 3 CPC within one week, the

Plaintiffs did not serve upon the Applicants within one week a copy of

the plaint, the applications, the affidavits and documents filed by the

Plaintiffs along with the Plaint. It is stated that this Court had appointed

Local Commissioners to visit the Defendants‟ premises to examine the

records including electronic records and seize any incriminating evidence

to establish if the Defendants were carrying on business by using the

words `AGI‟, `AGI Logistics‟ and `AG Freight‟ and whether they were

dealing with the customers of the Plaintiffs. It is stated that even at the

time of the visit of the Local Commissioner to the premises of

Applicants/Defendants on 23rd July 2009 in Gurgaon, the complete set of

papers were not served on the Applicants/Defendants or their counsel. It

is further stated that at the time of the visit of the Local Commissioner,

counsel for the Defendants had asked for copy of the plaint and entire

documents from the counsel for the Plaintiffs assisting the Local

Commissioner but this was declined.

5. It is stated in the application that a copy of the court notice was

delivered to Defendant No.4 on 26th July 2009 by speed post. The cover

in which the said notice was dispatched, has been placed on record. It has

a postal receipt affixed to it showing that the weight of the envelope at

the time of dispatch was 25 gms. and the postage paid was Rs.24/-. It is

obvious that the entire papers i.e. the plaint, affidavits, applications and

documents were not sent by post by the counsel for the Plaintiffs to the

Applicants/Defendants.

6. In reply to this application, the Plaintiffs state in para 6 as under:-

"It is submitted the plaintiffs/Non Applicants through their counsel had issued notices on the defendants/applicants informing them of the order dated 22.07.2009 of this Hon‟ble Court, but due to inadvertence and under bonafide mistake the copies of the plaint and the documents were not enclosed with the notices as issued on 24.07.2009. However, the plaintiffs/Non-applicants had no intention of purposefully disobeying the orders of this Hon‟ble Court as the Court on its own had permitted the plaintiffs to comply with the provisions of Order 39 Rule 3 within one week from the date of the order i.e. on or before 29.07.2009, so under the mistaken impression, that it would suffice if the plaintiffs/non-applicants filed the process fee for service of summons of the suit by way of ordinary process as well as through registered covers on all the defendants, it was for the said purposes that 18 sets of plaint and 9 sets of the documents were filed in the Registry of this Hon‟ble Court vide Diary No.117266 on 27.07.2009. Further, in compliance of the orders of the Court on 04.08.2009, the plaintiffs/non-applicants have supplied the copies of the plaint as well as the entire set of documents to the defendants/applicants, counsel, during the course of the proceedings. In view of the submissions made hereinabove, the averments of the present

application of the defendants/applicants, deserve no consideration at all."

7. Counsel for the Plaintiffs further drew attention of this Court to the

affidavit of compliance filed by the Plaintiffs on 27th July 2009 enclosing

therewith copies of the covering letter alongwith notices which were sent

to the Defendants by way of registered post. A perusal of the said

affidavit filed on 27th July 2009 shows that it is accompanied by copies of

identical letters dated 23rd July 2009 addressed to each of the Defendants.

A copy of the postal receipt affixed thereto again shows the total weight

of the packet in which it was sent to be 25 gms. and the postage paid to

be Rs.24/- each and the date of dispatch to be 24th July 2009. There is no

other document attached to this affidavit which purports to be filed by

way of the compliance of the Order XXXIX Rule 3 CPC.

8. Counsel for the Plaintiffs does not dispute that the complete set of the

papers were delivered to the counsel for the Defendants/applicants only

on 4th August 2009 in this Court when notice was first issued in this

application.

9. There can be no manner of doubt that in the face of the above

admissions by the counsel for the Plaintiffs that the requirement of Order

XXXIX Rule 3 CPC was not complied with. The said provision reads as

under:-

"3. 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--

(i) a copy of the affidavit filed in support of the application;

(ii) a copy of the plaint; and

(iii) 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."

10. It is plain that the Plaintiffs, after obtaining an ex parte ad interim

injunction against the Defendants, failed to deliver to the

Applicants/Defendants or to send them by registered post within one

week, a copy of the application for ad interim injunction together with (i)

a copy of the affidavit filed in support of the application (ii) a copy of the

plaint and (iii) copies of the documents on which the Plaintiffs rely upon.

The statutory requirement is unambiguous. Every document filed by the

Plaintiffs themselves, on the basis of which they obtained an ad interim

ex parte injunction, has to necessarily be "delivered" to the Defendant.

The word `deliver‟ would necessarily mean actual physical delivery on

the Defendant. The only alternative mode that the provision envisages is

dispatch by registered post, immediately after the order granting

injunction has been made. The dispatch by registered post as again would

be of the entire set of documents as set out under Clause (a) to the

proviso to Order XXXIX Rule 3 CPC. There can be no escape from

complying with this provision.

11. The learned counsel for the Plaintiffs repeatedly urged that this was a

bonafide mistake by associate counsel in the office of the learned

Counsel for the Plaintiffs and that they should not be penalized for non-

compliance with the above provision. He submits that the intention of the

Plaintiffs was not to disobey the requirement of law as the entire process

fee was filed as soon as the court granted the ex parte ad interim

injunction.

12. The mandatory nature of the requirement of the provision has been

emphasized by the Supreme Court in A. Venkatasubbiah Naidu v. S.

Chellappan AIR 2000 SC 3032 and this Court in Himalaya Drug v. SBL

Ltd. 1996 III AD (Delhi) 853. There is a logic behind insisting that a

Plaintiff who obtain an ex parte ad interim injunction order should, at the

earliest point in time, deliver to the party against whom such injunction

has been granted, all the documents on the basis of which such injunction

was granted. This is to enable the opposite party to know what the case

against it is and to approach the court at the earliest point in time to seek,

if necessary, a variation of the interim order.

13. In this context following observations of the Supreme Court in Shiv

Kumar Chadha Vs. MCD (1993) 3 SCC 161 are relevant:-

"34. The imperative nature of the proviso has to be judged in the context of Rule 3 of Order 39 the Code. Before the proviso aforesaid was introduced, Rule 3 said "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". The proviso was introduced to provide a condition, where Court proposes to grant an injunction without giving notice of the application to the opposite party, being of the opinion that the object of granting injunction itself shall be defeated by delay. The condition so introduced is that the Court "shall record the reasons" why an ex parte order of injunction was being passed in the facts and circumstances of a particular case. In this background, the requirement for recording the reasons for grant of ex parte injunction, cannot be held to be a mere formality. This requirement is consistent with the principle, that a party to a suit, who is being restrained from exercising a right which such party claims to exercise either under a statute or under the common law, must be informed why instead of following the requirement of Rule 3, the procedure prescribed under the proviso has been followed. The party who invokes the jurisdiction of the Court for grant of an order of restraint against a party, without affording an opportunity to him of being heard, must satisfy the Court about the

gravity of the situation and Court has to consider briefly these factors in the ex parte order. 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 thereof will not vitiate the order so passed. But same cannot be said in respect of the proviso to Rule 3 of 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. If it is held that the compliance of the proviso aforesaid is optional and not obligatory, then the introduction of the proviso by 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 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 Tenancy and Agricultural Lands Act in the case of Ramchandra Keshav Adke v. Govind Joti Chavare AIR 1975 SC 915."

14. If the Court were to take a lenient view and not insist on strict

compliance with the mandatory requirement of Order XXIX Rule 3, then

it would be possible for most Plaintiffs to continue to enjoy an ad interim

ex parte stay in their favour for any length of time and plead genuine

mistake by their counsel for non-compliance. Numerous suits

accompanied by applications seeking urgent ex parte reliefs are filed in

our courts everyday. The court, on a perusal of the documents filed

before it, forms a prima facie view for grant of an parte ad interim

injunction against the opposite party, even in the absence of the opposite

party. The Court at that stage has no means of knowing what the version

of the opposite party is. The court, therefore, makes such interim order

both time bound and conditional. The condition is that there must be

compliance with Order XXXIX Rule 3 CPC within the time specified by

the court. Although Order XXXIX Rule 3(b) CPC requires the filing of

an affidavit of compliance "on the day on which such injunction is

granted or on the day immediately following that day", this Court has

been granting a longer time accounting for the fact that the certified copy

of the order passed by the court may not be available on the same day or

even on the next date. However, there is no question of the Plaintiff not

being required to comply with the mandatory requirement of Order

XXXIX Rule 3 CPC within the time granted by the Court. In the

considered view of this Court, a strict compliance with the mandatory

requirement of this provision must be insisted and any laxity shown to

parties might well defeat the very purpose for which such provision has

been inserted.

15. The filing of process fee in this Court for service of summons/notice

upon Defendants, no doubt, is another mandatory requirement of law.

However, that alone is not enough. If the Plaintiff wants to take the

benefit of an ex parte ad interim injunction, then there is no escape from

complying with the mandatory requirement of Order XXXIX Rule 3

CPC.

16. Since it is plain that the Plaintiffs have not complied with the

requirement of Order XXXIX Rule 3 CPC, the interim order passed by

this Court on 22nd July 2009 hereby stands vacated. IA No. 9768 of 2009

is accordingly allowed.

I.A. No. 9150/2009

17. The interim order dated 22nd July, 2009 stands vacated.

18. List this application on 27th October, 2009.

IA No.11114/09(by Defendant No.7 under Order 39 Rules 1 & 2 CPC

19. This is an application by Defendant No.7 (AG Freight Carrier Pvt.

Ltd.) seeking a direction to restrain the Plaintiffs from causing any

impediment in the way of the Defendant No.7 carrying on its business

under a changed name.

20. At the hearing of the above suit on 4th August 2009, a submission was

made by counsel for Defendant No.7 that Defendant No.7 proposes to

adopt „AWL Logistics India Pvt. Ltd.‟ as its changed name. The counsel

for the Plaintiffs sought time to get instructions. It appears that thereafter

on 16th August 2009, a letter was written by the Plaintiff No.1 to the

Registrar of Companies (ROC) requesting that "the name of AG Freight

Carriers Pvt. Ltd. may kindly not be allowed to be changed".

21. It requires to be noted that the grievance of the Plaintiffs is that the

Defendant No.7 by adopting the name of AG Freight Carriers Pvt. Ltd., is

in fact infringing the trademark, trade name/corporate name of the

Plaintiff No.1. Counsel for the Plaintiffs, while not denying that the

aforesaid letter was written to the ROC, states that the concern of the

Plaintiff is also that the Defendant No.7 should not deal with the

clients/customers of Plaintiff No.1.

22. Counsel for the Applicant/Defendant No.7 has placed on record an e-

mail dated 28th April 2006 by Defendant No.3 Mr. Rahul Mehra to James

Minutello of Plaintiff No.1 which encloses a list of the clients of Plaintiff

No.1 with whom no business was being conducted. She submits that the

Plaintiff No.1 was throughout aware of the existence of AG Freight

Carriers Pvt. Ltd. The copies of the e-mail dated 23rd May 2006 and e-

mail dated 31st October 2007 have also been placed on record. Counsel

for the Defendants states that these documents show that the only client

which the Plaintiffs have referred to viz., „M/s Kohler‟ was in fact a

client introduced by Defendant No.3 to Plaintiff No.1.

23. Counsel for the Plaintiffs states that he will place on record the list of

clients of the Plaintiff No.1 who, according to him, are being either

approached or contacted by the Defendants. He permitted to do so within

two weeks by way of an affidavit.

24. List this application for further consideration on 27th October 2009.

IA No.12060/2009(under Order XXVII Rule 1 CPC)

25. Learned counsel for the Plaintiffs/applicants states that he wishes to

withdraw this application.

26. Dismissed as withdrawn.

IA No. 12061/2009(under Order XXXIX Rule 2A CPC)

27. In view of the orders passed today, this application has become

infructuous and it is dismissed as such.

IA No. 12066/2009(under Section 151 CPC by Defendant No.8)

28. In view of the orders passed today vacating the ad interim injunction

granted on 22nd July 2009, this application seeking extension of that order

does not survive. The Defendant No.8 may file an appropriate application

seeking directions in accordance with law.

29. This application is dismissed.

IA Nos.12062, 12064 and 12065/2009

30. List on 27th October, 2009.

S. MURALIDHAR, J.

SEPTEMBER 16, 2009 ak