Novartis Ag & Ors vs Cadila Helathcare Ltd
2014 Latest Caselaw 5341 Del

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*    IN THE HIGH COURT OF DELHI AT NEW DELHI

+      CS(OS) 1052/2014

       NOVARTIS AG & ORS                                       ..... Plaintiffs
                    Through            Mr. Gopal Subramaniam, Senior
                                       Advocate with Mr. Sunil Gupta,
                                       Senior Advocate, Mr. Hemant Singh,
                                       Advocate, Ms.Mamta Jha, Advocate,
                                       Mr. Manish Mishra, Advocate, Ms.
                                       Shipla Arora, Advocate & Ms.
                                       Kritika Seth, Advocate.

                          versus

       CADILA HELATHCARE LTD                  ..... Defendant
                    Through Ms. Prathibha M. Singh, Senior
                            Advocate with Ms. Bijal Chhatrapati,
                            Advocate, Ms. Bitika Sharma,
                            Advocate, Ms. Anusuya Nigam & Mr.
                            Vihan Dang, Advocate.

       CORAM:
       HON'BLE MR. JUSTICE G.P. MITTAL

                          ORDER

% 29.10.2014

I.A.16018/2014(delay in filing the reply) & I.A.17037/2014(delay in filing the written statement)

1. These applications are for condonation of delay in filing the written statement and reply to the injunction application beyond the specified period of 90 days and the time as granted by the Court.

2. The Defendant applicant seeks extension of time in filing reply to the injunction application and written statement to the plaint. Admittedly, there is a delay of 45 days in filing the written statement

beyond the period of 90 days. On behalf of the Defendant, it is submitted that the matter relates to a patent which covers the Type 2 Diabetes Mellitus (T2DM) compound named 'Vildagliptin'. The sum and substance of the ground taken by the Defendant for extension of time is that the Defendant had applied for certified copies of various patents which were relevant to the present dispute between the parties from the respective patent offices and the same were supplied to the Defendant only recently. It is further the case of the Defendant that the matter being highly technical had to be examined by the experts. Opinions from them were obtained and the requisite material on the subject was also downloaded from internet to file a proper defence. The Defendant had to collect large volumes of data and thus, it delayed the filing of the written statement and the reply to the injunction application.

3. The extension of time is strenuously opposed on behalf of the Plaintiffs. It is the case of the Plaintiffs that no cogent reason has been given by the Defendant for condonation of delay. The Plaintiffs have incorporated several dates in their reply to show that the Defendant was repeatedly granted time to file the written statement and reply to the injunction application. It is the case of the Plaintiffs that the Defendant's averments that technical team of the Defendant was examining the voluminous data is false and without any basis as the said data has not been placed on record.

4. I have heard Mr. Sunil Gupta, learned Senior Advocate for the Plaintiffs and Ms. Pratibha M. Singh, learned Senior Advocate for the Defendant.

5. The learned Senior Counsel for the Plaintiffs referring to the

judgment in Kailash v. Nanhku and Others, (2005) 4 SCC 480 has urged that although it is well settled that the provisions of Order VIII Rule 1 of the Code of Civil Procedure (CPC) specifying the time limit of 30 days and maximum 90 days in filing the written statement is directory, but at the same time, the Court can grant extension of time beyond the same only in appropriate cases where there are exceptional circumstances and there is sufficient cause for which adequate explanation has been given by the Defendant for not filing the pleadings within the stipulated period of time. The learned Senior Counsel also relies upon the judgment in R.N. Jadi & Brothers & Ors. v. Subhashchandra, AIR 2007 SC 2571 and Mohammed Yusuf v. Faiz Mohammad and Ors., (2009) 3 SCC 513.

6. The learned Senior Counsel particularly has referred and taken me through paras 33 to 45 of the judgment in Kailash (supra) wherein it was held as under:

"33. As stated earlier, Order VIII, Rule 1 is a provision contained in the CPC and hence belongs to the domain of procedural law. Another feature noticeable in the language of Order VIII, Rule 1 is that although it appoints a time within which the written statement has to be presented and also restricts the power of the Court by employing language couched in a negative way that the extension of time appointed for filing the written statement was not to be later than 90 days from the date of service of summons yet it does not in itself provide for penal consequences to follow if the time schedule, as laid down, is not observed. From these two features certain consequences follow.

34. Justice G.P. Singh notes in his celebrated work Principles of Statutory Interpretation (9th Edn., 2004) while dealing with mandatory and directory provisions: "The study of numerous cases on this topic does not lead to formulation of any universal rule except this that

language alone most often is not decisive, and regard must be had to the context, subject-matter and object of the statutory provision in question, in determining whether the same is mandatory or directory. In an oft-quoted passage Lord Campbell said: „No universal rule can be laid down as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of courts of justice to try to get at the real intention of the legislature by carefully attending to the whole scope of the statute to be considered.‟ " (p. 338) " „For ascertaining the real intention of the legislature‟, points out Subbarao, J. „the court may consider inter alia, the nature and design of the statute, and the consequences which would follow from construing it the one way or the other; the impact of other provisions whereby the necessity of complying with the provisions in question is avoided; the circumstances, namely, that the statute provides for a contingency of the non-compliance with the provisions; the fact that the non-compliance with the provisions is or is not visited by some penalty; the serious or the trivial consequences, that flow therefrom; and above all, whether the object of the legislation will be defeated or furthered‟. If object of the enactment will be defeated by holding the same directory, it will be construed as mandatory, whereas if by holding it mandatory serious general inconvenience will be created to innocent persons without very much furthering the object of enactment, the same will be construed as directory." (pp. 339-40)

35. Two decisions, having a direct bearing on the issue arising for decision before us, have been brought to our notice, one each by the learned counsel for either party. The learned Senior Counsel for the appellant submitted that in Topline Shoes Ltd. v.Corpn. Bank [(2002) 6 SCC 33] a pari materia provision contained in Section 13 of the Consumer Protection Act, 1986 came up for the consideration of the Court. The provision requires the opposite party to a complaint to give his version of the case within a period of 30 days or such extended period not exceeding 15 days as may be granted by the District Forum.

The Court took into consideration the Statement of Objects and Reasons and the legislative intent behind providing a time-frame to file reply and held: (i) that the provision as framed was not mandatory in nature as no penal consequences are prescribed if the extended time exceeds 15 days, and; (ii) that the provision was directory in nature and could not be interpreted to mean that in no event whatsoever the reply of the respondent could be taken on record beyond the period of 45 days.

36. The Court further held that the provision is more by way of procedure to achieve the object of speedy disposal of such disputes. The strong terms in which the provision is couched are an expression of "desirability" but do not create any kind of substantive right in favour of the complainant by reason of delay so as to debar the respondent from placing his version in defence in any circumstances whatsoever.

37. In our opinion, the view of the law so taken by this Court squarely applies to the issue before us and we find ourselves in agreement with the law stated by the two-Judge Bench of this Court in the case of Topline Shoes Ltd. [(2002) 6 SCC 33]

38. The learned counsel for the respondent, on the other hand, invited our attention to a three-Judge Bench decision of this Court in J.J. Merchant (Dr.) v.Shrinath Chaturvedi [(2002) 6 SCC 635] wherein we find a reference made to Order 8 Rule 1 CPC vide paras 14 and 15 thereof and the Court having said that the mandate of the law is required to be strictly adhered to. A careful reading of the judgment shows that the provisions of Order 8 Rule 1 CPC did not directly arise for consideration before the Court and to that extent the observations made by the Court are obiter. Also, the attention of the Court was not invited to the earlier decision of this Court in Topline Shoes Ltd. case [(2002) 6 SCC 33] .

39. It was submitted by the learned Senior Counsel for the appellant that there may be cases and cases which cannot be foretold or thought of precisely when grave injustice may result if the time-limit of days prescribed by Order 8 Rule 1 was rigidly followed as an insurmountable barrier. The defendant may have fallen sick, unable to move; maybe he is lying unconscious. Also, the person entrusted with the job of presenting a written statement, complete in all respects and on his way to the court, may meet with an accident. The illustrations can be multiplied. If the schedule of time as prescribed was to be followed as a rule of thumb, failure of justice may be occasioned, though for the delay, the defendant and his counsel may not be to blame at all. However, the learned counsel for Respondent 1 submitted that if the court was to take a liberal view of the provision and introduce elasticity into the apparent rigidity of the language, the whole purpose behind enacting Order 8 Rule 1 in the present form may be lost. It will be undoing the amendment and restoring the pre-amendment position, submitted the learned counsel.

40. We find some merit in the submissions made by the learned counsel for both the parties. In our opinion, the solution -- and the correct position of law -- lie somewhere midway and that is what we propose to do placing a reasonable construction on the language of Order 8 Rule 1.

41. Considering the object and purpose behind enacting Rule 1 of Order 8 in the present form and the context in which the provision is placed, we are of the opinion that the provision has to be construed as directory and not mandatory. In exceptional situations, the court may extend the time for filing the written statement though the period of 30 days and 90 days, referred to in the provision, has expired. However, we may not be misunderstood as nullifying the entire force and impact -- the entire life and vigour -- of the provision. The delaying tactics adopted by the defendants in law courts are now proverbial as they do stand to gain by delay. This is more so in election disputes because by delaying the trial of election petition, the

successful candidate may succeed in enjoying the substantial part, if not in its entirety, the term for which he was elected even though he may lose the battle at the end. Therefore, the judge trying the case must handle the prayer for adjournment with firmness. The defendant seeking extension of time beyond the limits laid down by the provision may not ordinarily be shown indulgence.

42. Ordinarily, the time schedule prescribed by Order 8 Rule 1 has to be honoured. The defendant should be vigilant. No sooner the writ of summons is served on him he should take steps for drafting his defence and filing the written statement on the appointed date of hearing without waiting for the arrival of the date appointed in the summons for his appearance in the court. The extension of time sought for by the defendant from the court whether within 30 days or 90 days, as the case may be, should not be granted just as a matter of routine and merely for the asking, more so, when the period of 90 days has expired. The extension can be only by way of an exception and for reasons assigned by the defendant and also recorded in writing by the court to its satisfaction. It must be spelled out that a departure from the time schedule prescribed by Order 8 Rule 1 of the Code was being allowed to be made because the circumstances were exceptional, occasioned by reasons beyond the control of the defendant and such extension was required in the interest of justice, and grave injustice would be occasioned if the time was not extended.

43. A prayer seeking time beyond 90 days for filing the written statement ought to be made in writing. In its judicial discretion exercised on well-settled parameters, the court may indeed put the defendants on terms including imposition of compensatory costs and may also insist on an affidavit, medical certificate or other documentary evidence (depending on the facts and circumstances of a given case) being annexed with the application seeking extension of time so as to convince the court that the prayer was founded on grounds which do exist.

44. The extension of time shall be only by way of exception and for reasons to be recorded in writing, howsoever brief they may be, by the court. In no case, shall the defendant be permitted to seek extension of time when the court is satisfied that it is a case of laxity or gross negligence on the part of the defendant or his counsel. The court may impose costs for dual purpose: (i) to deter the defendant from seeking any extension of time just for the asking, and (ii) to compensate the plaintiff for the delay and inconvenience caused to him.

45. However, no straitjacket formula can be laid down except that the observance of time schedule contemplated by Order 8 Rule 1 shall be the rule and departure therefrom an exception, made for satisfactory reasons only. We hold that Order 8 Rule 1, though couched in mandatory form, is directory being a provision in the domain of processual law."

7. The learned Senior Counsel for the Defendant, on the other hand, refers to Smt. Rani Kusum v. Kanchan Devi & Ors., (2005) 6 SCC 705 and Zolba v. Keshao & Ors., (2008) 11 SCC 769. The learned Senior Counsel has also taken me through the documents which were filed in the Court with reply to the injunction application on 22.08.2014 and the documents filed on 01.10.2014 which runs into over a thousand of pages. The learned Senior Counsel also urges that copy of Form 27 was applied by the Defendant in August, 2014 and the copy was made available only on 03.10.2014 by the patent office. The learned Senior Counsel also submits that although there was no Caveat filed on behalf of the Defendant, yet an e-mail was sent to the Plaintiff to supply a copy of the paper book one day before the suit came up for hearing. However, the same was not supplied to the Defendant and hence, the counsel for the Defendant had no time to

rebut the Plaintiffs' prayer for grant of ad interim injunction.

8. The injunction application came up for ex parte hearing for the first time on 16.04.2014 when the counsel for the Defendant also appeared and accepted advance notice. A concession was also given by the learned Counsel for the Defendant that the Defendant shall not manufacture for marketing purposes the drug in question till the next date of hearing. The relevant portion of the order dated 16.04.2014 is extracted hereunder:

"Learned counsel for the defendant, on instructions, submits that the defendants be permitted to file a brief response to the said application and the matter be taken up on a short date as the defendant has obtained manufacturing permission. Learned counsel for the defendant, however, undertakes that till the next date of hearing, the defendant shall not manufacture for marketing purposes and shall not market in India or abroad any product, that infringes the patented product of the plaintiffs."

9. It is true that although a short adjournment was sought by the Defendant for filing a short reply to the injunction application and the written statement, but the same was not done and initially an I.A.8692/2014 was moved by the Defendant seeking extension of time to file a reply to the I.A. and subsequently, two further applications (in question) were preferred by the Defendant seeking extension of time in filing the written statement and the reply.

10. Admittedly, the Defendant is seriously contesting the case so much so that counsel for the Defendant appeared on the very first day i.e. 16.04.2014 when the ex parte injunction application was heard by the Court and as stated earlier an order was passed. The loads of documents filed by the Defendant do show that the Defendant was

analysing the matter so that a proper reply and defence can be placed on record. The Defendant was not to gain anything by causing delay in filing the written statement, particularly when the injunction order was operating against the Defendant in view of the concession given by the learned counsel for the Defendant on 16.04.2014.

11. In my view, it is a case where the Defendant should be granted extension of time beyond 90 days for filing the written statement and reply to the injunction application. I order accordingly.

12. The written statement and the reply filed by the Defendant are taken on record.

13. Let replication/rejoinder be filed by the Plaintiffs within two weeks.

14. Mr. Sunil Gupta, learned Senior Advocate says that the Plaintiffs may be granted some more time. Let replication/rejoinder be filed within four weeks.

15. I.As.16018/2014 and 17037/2014 stand disposed of. I.A.8692/2014 also stands disposed of.

16. List before the Joint Registrar for admission/denial of documents on 15.12.2014.

17. List I.A. 6757/2014 and 6758/2014 for hearing before the Court on 08.01.2015.

18. Both the parties shall file brief synopsis along with the relevant case law. The Plaintiffs shall file brief synopsis within three weeks. The Defendant shall file brief synopsis within two weeks thereafter. Rejoinder to the new points raised, if any, shall be filed by 09.12.2014. A convenience compilation with relevant case law shall be placed on record by the Plaintiffs before the next date so that the

matter is decided without any delay.

19. Interim order to continue.

C.C.61/2014 Written statement to the counter claim be filed within 30 days. Replication be filed within two weeks thereafter.

List before the Joint Registrar for completion of pleadings and for admission/denial of documents on 15.12.2014.

G.P. MITTAL, J

OCTOBER 29, 2014 pst