South Asia Human Rights ... vs Sh. Suhas Chakma & Ors.
2010 Latest Caselaw 52 Del

*          HIGH COURT OF DELHI : NEW DELHI

+          I.A. Nos. 1654/2009, 1655/2009 & 1656/2009 in CS(OS)
           No. 840/2006

                                   Reserved on: 31st August, 2009

%                                  Decided on: 8th January, 2010

South Asia Human Rights Documentation Trusts & Ors. ...Plaintiffs
                    Through : Mr. D.K. Aggarwal, Sr. Adv. with
                              Mr. V.K. Singh, Adv.

                       Versus

Sh. Suhas Chakma & Ors.                          ....Respondents
                   Through : Mr. Prantap Kalra, Adv. for D-1 and
                             4.
                             Mr. Nitesh Kumar Singh, Adv. for
                             D-2 & 3.
Coram:

HON'BLE MR. JUSTICE MANMOHAN SINGH

1. Whether the Reporters of local papers may
   be allowed to see the judgment?                                    No

2. To be referred to Reporter or not?                                 Yes

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

MANMOHAN SINGH, J.

1. This order shall dispose of the three pending applications

filed by the plaintiff, the details of which are given as under:

a) IA No.1654/2009 under Order 1 Rule 10 CPC by the

plaintiff for impleadment of South Asia human Right

Documentation Centre Pvt. Ltd. as a co-plaintiff No.5 to

the preset suit.

b) IA No.1656/2009 an application filed by the plaintiff for

condonation of delay in filing of application under Order 1

Rule 10 CPC.

c) IA No.1656/2009 filed by the plaintiff under Section 151

CPC for substitution of plaintiff No.3.

2. The plaintiffs filed the present suit for permanent injunction

restraining infringement of copyright, unauthorised downloading,

misappropriation and illegal use of database, delivery up, rendition of

accounts, damages and for passing off. The case of the plaintiffs is that

the defendant plagiarized the original literary work of the plaintiffs and

that the defendants had also dishonestly downloaded the database of the

plaintiffs and were continuing to use the confidential unpublished

research data dishonestly to the detriment of the plaintiffs.

3. Plaintiff No.1 is a registered Public Charitable Trust founded

on 16.10.1993. The Plaintiff No.1 trust conducts research in human

rights violations and abuses worldwide and in a particular South Asia,

with a view to disseminating the result of the research for the benefit of

the general public and the international institutions and community, to

undertake research and publication of educational material(s) on human

rights.

4. It is the case of plaintiff that to execute and advance the

above objects of the Plaintiff-Trust the plaintiffs incorporated and

established a private limited company by the name of South Asia

Human Rights Documentation Centre Pvt. Ltd. as a wholly owned

private company for carrying out research, documentation, and reporting

on human rights issues. It is alleged that the trustees of the plaintiff

No.1 were the promoters of the company and subscribed to the share

capital of the company.

5. The plaintiff categorically stated that whatever work is

carried by the company is done and executed for and on behalf of the

plaintiff trust. The plaintiffs and the South Asia Human Rights

Documentation Centre Pvt. Limited are the joint and several owners of

the copyright in the literary works produced under the aegis of the South

Asia Human Rights Documentation Centre Pvt. Limited. In para 4 of

the plaint, it is asserted that the company is wholly owned and

controlled by the plaintiff Trust and the Trust has the right over all the

material produced by it.

6. The suit was filed on 15th May, 2006 and an ex parte ad

interim injunction was granted in favour of the plaintiffs on 18th May,

2006. Written statement was filed by the defendants wherein they raised

several preliminary objections to the suit. One of the objections taken

by the defendants was that the plaintiffs were not the owners of the

copyright and that the copyright belonged to the company and as such

the suit was not maintainable. The replication to both the written

statement was filed by the plaintiffs on 7 th August, 2006. On the basis

of pleadings of the parties, issues were framed in the suit on 21.04.2008

and issues no.1,2,3 & 4 were treated as preliminary issues. They are

reproduced below:

"i) Whether the plaint has been signed and verified by a competent person and the suit has been duly instituted? OPP

ii) Whether the defendants 2 and 3 are not necessary and/or proper parties? OPD 2 and 3

iii) Whether the suit is bad on misjoinder of causes of action as alleged in para (iii) of the preliminary objections

in the written statement of the defendants 1 and 4? OPD 1 and 4

iv) Whether this Court does not have jurisdiction to entertain, try and decide the suit? OPD 1 and 4"

7. During the course of hearing of preliminary issues on 27 th

November, 2008, the counsel for the plaintiffs offered to implead the

company namely South Asia Human Rights Documentation Centre

Private Limited as a co-plaintiff. He also offered to produce a fresh

resolution of the trustees of the plaintiff trust showing that the filing and

prosecution of the present suit was duly authorized by them. This court

then passed the following order:

"During the course of hearing on preliminary issue Nos.1 to 4, counsel for the plaintiff states that he will implead South Asia Human Rights Documentation Centre Private Limited as a co-plaintiff with a board resolution passed by the said company. He also states that he shall be filing a resolution conforming that the Board of Trustees had permitted and authorized institution of the present suit and the Resolution dated 27th March, 2006 was passed by the Board of Trustees of plaintiff No.1. Counsel for the plaintiffs prays for and is granted three weeks time to file applications for the said purpose. Relist on 5 th February, 2009."

8. The application being IA No.1654/2009 has been filed in

pursuance of the order dated 27.11.2008.

9. I shall take up the first application being IA No.1656/2009

filed by the plaintiff for condonation of delay in filing the application

under Order 1 Rule 10 CPC.

10. The plaintiff sought condonation on the ground that the

drafting counsel of the plaintiffs was out of station for several days for

personal reasons and the application could not be prepared and filed in

time as the plaintiffs could not avail legal help for some time. The delay

is neither malafide nor callous and the application is formal in nature.

Moreover, the delay has not caused any prejudice to the defendants nor

has it delayed the process of court.

11. It is pertinent to mention here that during the course of

hearing on preliminary issues No.1 to 4, counsel for the plaintiffs stated

that he will implead South Asia Human Rights Documentation Centre

Pvt. Ltd. as a co-plaintiff with the requisite Board Resolution passed by

the said company. This Court granted three weeks time to file the

impleadment application on 27th November, 2008. The present

application being IA No.1654/2006 was filed on 2nd February, 2009

after a delay of 46 days.

12. The defendants have raised various objections in allowing

the present application on the ground that vide order dated 27.11.2008,

this Court permitted the plaintiffs to prefer the application within three

weeks, however, the said application has been filed 46 days after the

expiry of three weeks granted by the Court. The learned counsel for the

defendants argued that it is deliberate act on the part of the plaintiff to

delay the matter on one pretext or the other. After considering the

submissions of the parties I am of the considered view that the present

application be allowed as the plaintiff has been able to assign sufficient

reasons in the application for condonation of delay. Thus, in the interest

of justice, equity and fair play that the application filed by the plaintiff is

allowed. IA is disposed of.

13. Now I shall take up the application under Order 1 Rule 10

CPC being IA No.1654/2009 which has been filed in pursuance of order

dated 27.11.2008. The plaintiffs also filed an application being IA

No.1655/2009 for substitution of plaintiff No.3.

14. The plaintiffs prayed that since the suit is in the preliminary

stage, the company shall be impleaded as co-plaintiff No.5 to the suit to

obviate all technical objections. The defendants will suffer no prejudice

if the company is impleaded as prayed and the application is being made

bonafide and in the interest of justice.

15. It is also stated in the application that trustees of the plaintiff

trust held a meeting on 13th December, 2008 at their office at B-6/6,

Safdarjung Enclave Extension, New Delhi noticing that in the resolution

dated 27th March, 2006, the name of the plaintiff trust was wrongly

shown as South Asia Human Rights Documentation Centre Trust.

Therefore, Trustees of the plaintiff trust passed a fresh resolution on 13 th

December, 2008 stating that they had authorized the filing of the present

suit and that the said suit be continued to be pursued and empowered

and authorized the trustees again to take all necessary steps for

prosecution of the suit.

16. A resolution is also passed to the effect that the South Asia

Human Rights Documentation Trust as the parent body are the owners

of the copyrights, infringement of which has been complained of in the

suit. At any rate the trust and the company own the copyrights in the

works jointly and severally. They approved of the filing of the suit and

also consented to be a co-plaintiff in the suit.

17. The first submission of the defendants is that the plaintiff‟s

action of not impleading the South Asia Human Rights Documentation

Centre Pvt. Ltd. cannot be termed as bona fide when they had taken

specific objection to the point of locus standi of the plaintiffs to file the

present suit in their written statement on the grounds that since the trust

is not the original owner of the copyright, it cannot file the suit without

joining the company.

18. It is argued that the plaintiffs cannot be allowed to rectify

their deliberate, conscious mala fide action after almost three years of

institution of the suit by filing the present application for impleadment.

The plaintiff in para 7 of the plaint stated that the plaintiff trust own the

company and therefore, has locus standi to file the present suit. In the

impleadment application, however, it was asserted by the plaintiff trust

that trustees of the plaintiff No.1 were the promoters of the company

and they subscribed to the share capital of the company as trustees of the

trust.

19. It is submitted by defendant Nos.2 and 3 that at the time of

registration of the trust there were three trustees as shown by the trust

deed dated 16th October, 1993 namely Mr. Ravi Nair (plaintiff No.2),

Dr. Arun Mehta and Mr. Suhas Chakm (defendant No.1). However, at

the time of incorporation of the company, there were only two

promoters and shares holders of the company namely Mr. Ravi Nair

(plaintiff No.2) and Mr. Suhas Chakma (defendant No.1), who were the

only two subscribers to the MOA and AOA of the company. The

authorized share capital of the company was Rs.50 lac. It is contended

that the claim of the plaintiffs is false from the fact that at the time of

incorporation of the company, Dr. Arun Mehta was still trustee;

however he was never made a promoter/director/share holder of the

company.

20. It is further contended that in view of the averments made in

the plaint as well as in the replication to the effect that the plaintiff trust

has exclusive rights over the violated copyrighted articles, there arises

no need, necessity or occasion of impleading the company in the suit.

21. It is also pointed out that in para 9 of the IA No.1654/2009

the plaintiffs averred that the trustees had a meeting on 13 th December,

2008 and noticed that in the resolution dated 27 th March, 2006 the name

of the plaintiff trust was wrongly shown as South Asian Human Right

Documentation Centre Trust (hereinafter "SAHDRCT"). It is submitted

that plaintiffs had filed a board resolution dated 27 th March, 2006

authorizing the plaintiff trust (SAHRDCT) filing the present suit against

the defendants herein. The defendants took a specific objection to that

effect, however, in their replication the plaintiffs mentioned the name of

trust as SAHRDCT and took below mentioned stand:

"It is misconceived, incorrect and denied that South Asia Human Rights Documentation Centre Trust does not exist as alleged. .... It is incorrect and denied that the board resolution dated 27th March, 2006 passed by the plaintiff trust is false, baseless, manufactured and illegal as alleged or at all. A proper board resolution to institute the present suit exists and has been filed in this Hon‟ble Court along with the plaint."

22. It is asserted that the plaintiff deliberately and malafidely did

not implead the company as the plaintiff knowing it fully well that the

trust did not have locus standi to file the present suit. It is alleged that

plaintiff Nos.2,3 & 4 conspired together to transfer 50% shares of the

defendant No.1 namely Mr. Suhas Chakma in the company fraudulently

and dishonestly and were very well aware that in case they make the

company a party, the defendant No.1 would come to know about their

illegal and unlawful action. Therefore, they deliberately did not make

the company a party to the present suit.

23. Defendant Nos.1 and 4 also contended that they took a

specific objection with respect to the locus standi of the trust in

preferring the present suit in its written statement filed on 1 st July, 2006.

However, in the plaint the plaintiffs have specifically pleaded that South

Asia Human Rights Documentation Centre Pvt. Ltd. (the company) is

wholly owned company of South Asia Human Rights Documentation

Trust ("the Trust") and therefore the Trust has locus standi to file the

present suit. Defendant Nos. 1 and 4 also raised objection in their

written statement and specifically pointed out:

"3(ii). That the alleged board resolution dated 27 th March, 2006 passed by the „South Asia Human Rights Documentation Centre Trust‟ is completely false, baseless, manufactured and illegal. That, „Sough Asia Human Rights Documentation Centre Trust‟ does not exist at all."

24. To the aforesaid specific objection of the defendants, the

plaintiffs in their replication replied as under:

"4.2 para 3(ii) of the written statement is misconceived and wrong. It is misconceived, incorrect and denied that South Asia Human Rights Documentation Centre Trust does not exist as alleged or at all. The plaintiff trust is also known by this name. It is incorrect and denied that the Board Resolution dated 27th March, 2006 passed by the plaintiff trust is false, baseless, manufactured and illegal as alleged or at all. A proper board resolution to institute the repent suit exists and has been filed in this court along with the plaint." (Emphasis supplied)

25. It is further stated that in view of the fact that the defendants

in their written statement dated 1 st July, 2006 had specifically pointed

out that the alleged board resolution dated 27 th March, 2006 had been

that of "South Asia Human Rights Documentation Centre Trust", there

was no occasion for the alleged trustees of the trust to have noticed the

same on 13th December, 2008 as alleged/submitted in the present

applications. The plaintiffs have perjured themselves all through the

pleadings of the present suit.

26. It is submitted that the defendant no.1 herein was/is the 50%

share holder of the company. The proceedings with regard to the

fraudulent transfer of the 50% shareholding of the defendant No.1 to the

defendant Nos.3 and 4 herein and, consequently, the issue of ownership

of the company is pending before this Court in (FAO (SB) No.4/2008)

and the Company Law Board (Company Petition No.21/2008) and the

competent Criminal Court (CC No2206/2001 of 2008) wherein

summons have already been issued to the defendant No.2 herein and the

company for having committed the offence of forgery, cheating etc.

27. It is argued that in view of the pleadings made in the plaint

that the company is wholly owned by the trust, neither was there nor is

there now, any reason/occasion for the plaintiffs/applicants to offer for

such impleadment and the plaintiffs are under a duty to make good their

pleadings.

28. The next application being IA No.1655/2009 is filed by the

plaintiffs herein seeking substation of the plaintiff No.3 namely Mr.

Vittal Rao with one Ms. Rineeta Naik. It is submitted that plaintiff No.3

had resigned as a trustee of the plaintiff trust and Ms. Rineeta Naik has

been inducted into the Board of Trustees.

29. It is contended by defendant Nos.2 and 3 in this respect that

the plaintiff No.3 resigned on 28th February, 2008, however, the said

fact has been brought to notice of this Court after an unexplained delay

of almost a year. The defendants also questioned the purported

appointment of Ms. Rineeta Naik as a trustee of the trust on the ground

of not being appointed by the Settler Trustee as per the mandatory

requirement contained in Clause VIII of the Trust Deed dated

16.10.2009. Clause VIII is reproduced as under:

"...the power to appoint a new trustee shall vest in the settler trustee who shall make the appointment only in consultation with the managing trustee."

29. It is stated that in response to the said objection, the plaintiffs

filed a letter on 31st August, 2009 purportedly written by the settler

trustee dated 29th May, 2009 whereby it was proved that the

appointment of Ms. Rineeta Naik has been made by the trustees. It is

argued that the plaintiffs have procured the letter dated 31 st August,

2009 only after the objections were raised by the defendants, therefore,

no reliance can be placed on the said letter dated 31 st August, 2009

purportedly written by the Settler Trustee.

30. I have gone through the pleadings in the application as well

as the plaint and documents placed on record.

31. The principle under Order 1 Rule 10 CPC is to save bona

fide plaintiffs from being non-suited on technical ground but at the same

time, the Court has to see that a valuable right acquired by the

defendants should not be defeated. It is also the duty of the Court to see

that the necessary and proper party is to be impleaded for the

determination of the real matter in dispute. It is also settled law that the

question must be decided with reference to the averments in the plaint

in order to decide the application and a Court is not required to

adjudicate upon the objection raised by the non-applicant, the Court has

to record only a prima facie finding to find out whether the application

is bona fide.

32. It is settled law that while considering the application under

Order 1 Rule 10 CPC, the Court may at any stage of the proceedings

add parties which are the proper and necessary parties in order to

enable the Court to effectively and completely adjudicate upon and

settle all the questions involved in the suit. There is no requirement of

law that such application must be made at any particular stage of the

trial. Under the said provision the Court can add a party at any stage of

the proceedings (see Gurmauj Saran Baluja v. Joyce C. Salim, AIR

1990 Delhi 13 (DB).

33. Similarly the Court has also the power to substitute the

plaintiff in the suit where it is doubtful that it has been instituted in the

name of the right plaintiff if the Court is satisfied that the suit has been

instituted through bona fide mistake. It is also not necessary at this

stage of the proceedings to consider the merit of the suit while deciding

the application under Order 1 Rule 10 CPC.

34. As appeared from the objections raised by the defendant

Nos.2 & 3 as well as defendant Nos. 1 & 4, various objections have

been raised in allowing the prayer made in the application. I find that

all the objections raised by the defendants are on merit which ultimately

have to be considered at the appropriate stage of the proceedings after

allowing the defendants to file the amended written statement on

allowing the application for impleadment of the said party.

35. It is settled law that in order to avoid multiplicity of

litigation and also conflicting decisions being passed in different suits

on the same matter, the Court should always allow the necessary party

to be impleaded in the suit. Another fact of the matter is that during the

hearing of the preliminary objection on 27.11.2008 three weeks‟ time

was granted to the plaintiffs for the said purpose.

36. Considering the overall circumstances of the matter, the IA

No.1654/2009 is allowed and the South Asia Human Rights

Documentation Centre Private Limited is arrayed as plaintiff No.5.

Similarly IA No.1655/2009 is also allowed and Ms. Rineeta Rao is

substituted as plaintiff No.3 in place of Mr. Vittal Rao. Hence both the

above said applications are allowed subject to payment of Cost of

Rs.30,000/- to be paid by the plaintiffs to the defendants within two

weeks. The cost shall be shared by both set of defendants No.1 & 4 and

defendants No.2 & 3 in equal proportions. The amended memo of

parties is taken on record.

CS(OS) No. 840/2006

The amended plaint be filed by the plaintiffs within four

weeks from today with advance copy to the learned counsel for the

defendants who may file the written statement to the amended plaint

within four weeks thereafter. The defendants are at liberty to raise all

the objections available to them as raised in the above said IAs

No.1654/209 and 1655/2009 in accordance with law. The parties are

also directed to file the original documents, if necessary, within eight

weeks from today.

List before the Joint Registrar on 14th May, 2010.

MANMOHAN SINGH, J.

January 8, 2010 jk