Teva Pharmaceutical Industries ... vs Natco Pharma Limited
2014 Latest Caselaw 4690 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                          Date of decision: 22nd September, 2014.

+              Review Petition No.316/2014 in FAO(OS) No.144/2014

       TEVA PHARMACEUTICAL
       INDUSTRIES LTD & ORS                       ..... Appellants
                    Through: Mr. Parag P. Tripathi, Sr. Adv. with
                             Mr. Praveen Anand, Mr. Kunal Bahri,
                             Mr. Nischal Anand and Mr. Aman
                             Taneja, Advs.

                                      Versus

    NATCO PHARMA LIMITED .... Respondent/Review Applicant
                  Through: Mr. T. K. Ganju, Sr. Adv. & Mr.
                           Chetan Sharma, Sr. Adv. with Mrs.
                           Rajeshwari H., Ms. Sudipa Das Gupta,
                           Mr. Amit Gupta, Mr. Tahir Abdul
                           Zabbar & Ms. Aparna Gaur, Advs.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J.

1. The respondent/review applicant, after dismissal in limine on 1st July,

2014 of the SLP(C) No.15602/2014 preferred thereagainst, seeks review of

para Nos.9 to 12 of our judgment dated 30th May, 2014 allowing this appeal.

2. The review petition came up before this Court first on 11 th July, 2014,

when the senior counsel for the appellant/non-review applicant also appeared

and sought time to place on record a copy of the SLP preferred by the

respondent/review applicant to the Supreme Court against the judgment of

which review is sought. While allowing the same, opportunity was also

given to the appellant/non-review applicant to file reply, if any to the review

application. A reply has been filed and the counsels have addressed lengthy

arguments, after hearing which, we reserved orders.

3. This Court, during the hearing of the appeal had enquired from the

senior counsel for the respondent (as recorded in para 9 of the judgment),

whether any permission was required for export of the drugs, the process of

manufacture whereof is the subject matter of these proceedings and whether

such permission had been obtained.

4. The senior counsel for the respondent in reply to the aforesaid, had

answered in the affirmative and further stated that as of then (i.e. the date of

hearing 15th May,2014), the respondent did not have the permission for

export to the United States of America (USA), as recorded in para 10 of the

judgment dated 30th May, 2014.

5. The respondent/review applicant in the review application states that

the true legal and factual position is that there is no requirement of any

permission for export; import into the USA is a matter of applicable US laws

and is generally permitted upon U.S. Food and Drug Administration

approval of the product for the commercial sale within the United States or

under certain other circumstances. It is further informed that as on the date

of filing of the review application, the U.S. Food and Drug Administration

had not approved any application of the respondent/review applicant to allow

commercial sale of subject product within United States, though the

respondent review applicant is awaiting approval. It is yet further informed

that Rule 84 read with Form 25 of the Drugs and Cosmetics Rules, 1945

which deals with „manufacture and sale‟, poses no limitation on export of the

product.

6. The senior counsel appearing for the respondent/review applicant in

the review application also drew our attention in this regard to the approval

dated 1st March, 2007 accorded to the respondent/review applicant for

manufacturing the subject product as an additional item under the Drug

License already issued to the respondent/review applicant and a copy of

which is filed along with the review application and on the basis thereof, it is

argued that the same also entitles the respondent/review applicant to export

the subject product with only the requirement to furnish information after

completion of each export.

7. We had similarly during the hearing of the appeal enquired from the

senior counsel for the respondent (as recorded in para 11 of the judgment

dated 30th May, 2014), whether the permission from the Drug Controller was

required qua a product only or also qua the process of manufacture of the

product and whether the respondent had such permissions.

8. The senior counsel for the respondent had on instructions informed

that permission from the Drug Controller is required for the process also and

the respondent as on that date (i.e. 15th May, 2014) had no such permission

either, as recorded in para 12 of the judgment dated 30th May, 2014.

9. The respondent/review applicant in the review application states that

the true legal and factual position is that no such permission for the process

is required from the Drug Controller of India. It is further informed that the

respondent/review applicant has permission under Form 25 for the subject

product and manufacture thereof and the same is sufficient for the

respondent/review applicant to manufacture the product. It is reiterated that

the U.S. Food and Drug Administration had till the filing of the review

application not approved any application allowing importation of the subject

product into the United States.

10. The senior counsel for the respondent/review applicant during the

hearing of the review application also drew our attention to Rule 84 read

with Form 25 of the Drugs and Cosmetics Rules, 1945 to contend that no

limitation on use of different process for manufacture of the product has

been placed.

11. Though the review application also mentions an error having crept in

para 19 of the judgment dated 30th May, 2014 but the senior counsel for the

respondent / review applicant during the hearing stated that the respondent /

review applicant having preferred an SLP against the judgment and the same

having been dismissed with the observation that "no ground for interference

is made out in exercise of our jurisdiction under Article 136 of the

Constitution of India", he is not pressing for review thereof.

12. The senior counsel for the respondent/review applicant has contended

that the reply given by the counsel/senior counsel for the respondent to the

queries raised by the Court during the hearing of the appeal, on the spur of

the moment, cannot bind the respondent/review applicant particularly when

the same relates to the factual/legal position and of which the counsel/senior

counsel for the respondent was not expected to be aware, since the appeal

was concerned only with the aspect of territorial jurisdiction of this Court.

Reliance in this regard is placed on Swami Krishnanand Govindanand Vs.

M.D. Oswal Hosiery (Regd.) (2002) 3 SCC 39 in para 3 whereof it is

observed that though there can be no doubt that admission of a party is a

relevant material but the statement made by the counsel of a party across the

Bar, cannot be treated as an admission.

We may however notice that the Supreme Court in the said case was

concerned with a claim by the landlord for eviction of tenant on the ground

of bona fide requirement of the tenancy premises, under the provisions of the

Delhi Rent Control Act, 1958 and the law in which regard is that the Rent

Controller can pass an order of eviction only upon being satisfied that the

elements / ingredients only on the proof whereof, the landlord is entitled to

an order of eviction, exist.

13. The senior counsel for the respondent/review applicant has also

referred to Central Council for Research in Ayurveda & Siddha Vs. Dr. K.

Santhakumari (2001) 5 SCC 60 in para 13 whereof, referring to Uptron

India Ltd. Vs. Shammi Bhan (1998) 6 SCC 538, it was held that a wrong

concession on question of law made by a counsel is not binding on his client

and such concession cannot constitute a just ground for a binding precedent.

14. We have also been taken through Board of Control for Cricket in

India Vs. Netaji Cricket Club (2005) 4 SCC 741, in para 90 whereof it has

been held that the words "sufficient reason" in Order 47 Rule 1 of the Code

of Civil Procedure are wide enough to include a misconception of fact or law

by a Court or even an Advocate.

15. We had during the hearing of the review application enquired from the

senior counsel for the respondent/review applicant, as to what is the

prejudice caused to the respondent / review applicant from the recordings

aforesaid in para Nos.9 to 12 of the judgment dated 30 th May, 2014 and as to

what is the need for the respondent/review applicant to seek this review,

inasmuch as the respondent/review applicant, during the hearing of the suit

from which this appeal arises can contend as to what the true legal position

on the aforesaid aspects is.

16. The senior counsel for the respondent/review applicant replied that

review is necessary inasmuch as the replies given by the counsel for the

respondent to the Court‟s queries during the hearing of the appeal have

turned out to be not correct and the record needs to be put straight and so as

not to be accused of having made a wrong statement to the Court and having

not taken any step to point out the mistake and lastly because the

appellant/non-review applicant, in the hearing of the suit particularly the

application for interim relief and contempt etc., is attempting to take

advantage of the aforesaid mistakes on the part of the respondent/ review

applicant in replying to the Court‟s queries.

17. The senior counsel for the respondent/review applicant lastly also

contended that CS(OS) No.1708/2007 filed by the appellant/non-review

applicant against the respondent/review applicant prior to the institution of

the suit from which this appeal arose (and referred to in para 3(iii) of our

judgment dated 30th May, 2014) stands dismissed on 20th August, 2014 and

which fact was also concealed by the appellant/non-review applicant from

this Court on the last date of hearing. A copy of the order of dismissal

thereof owing to the appellant/plaintiff/non-review applicant having not led

any evidence, was handed over.

We may however notice that the last date of hearing in this review

application was 12th August, 2014 and thus the appellant/non-review

applicant cannot be accused of non-disclosure of dismissal on 20th August,

2014 of the previously instituted suit on the last date.

18. The senior counsel who had argued the appeal on behalf of the

respondent/review applicant and who also appeared contended that the filing

of the earlier suit as well as of this suit from which this appeal arose is mala

fide and an attempt to prevent the respondent/review applicant from

marketing the subject drug in USA, even though the patent of the appellant/

non-review applicant of the said drug in USA has lapsed and the appellant/

non-review applicant has no right to so prevent the respondent/review

applicant.

19. The senior counsel for the appellant/non-review applicant has argued:

(i) that the dismissal of CS(OS) No.1708/2007 earlier filed by the

appellant / non-review applicant is inconsequential and rather

advantageous to the appellant / non-review applicant inasmuch as

along therewith the counter-claim of the respondent / review applicant

challenging the patent in India of the appellant / non-review applicant

has also been dismissed and upon which dismissal the challenge by

the respondent/review applicant to the patent in India of the

appellant/non-review applicant of such drug does not survive;

(ii) that the respondent/review applicant has indulged in fraud/

concealment and the review application cannot be entertained on this

ground. Attention is invited to para 8 of the judgment dated 30 th May,

2014 recording the reply of the senior counsel for the respondent /

review applicant to yet another Court query inter alia to the effect that

the respondent / review applicant till then i.e. at the time of hearing on

15th May, 2014 had not started manufacturing the subject product. It

is argued that the appellant / non-review applicant has subsequently

learnt that the respondent / review applicant had already commenced

not only manufacturing but also exporting the subject product since

September, 2013, to countries other than America; even in the review

application, a true disclosure in this regard has not been made;

(iii) that even if it were to be believed that on the date of the hearing

of the appeal, wrong answers were given owing to lack of instructions

(though this is also disputed and it is argued that the representative of

the respondent / review applicant at the time of hearing of the appeal

was present in the Court, as on the date of hearing of the review

application), the respondent / review applicant in the fifteen days

interregnum between the conclusion of the hearing of the appeal and

the pronouncement of the judgment, ought to have informed the Court

of the correct position;

(iv) that the respondent / review applicant even after pronouncement

of the judgment on 30th May, 2014 and till the filing and dismissal of

the SLP on 1st July, 2014 preferred thereagainst, did not inform this

Court of the mistake, if any in answering to the Court‟s queries;

(v) that the respondent / review applicant in the SLP before the

Supreme Court also did not state that any such mistakes had occurred

in replying to the Court‟s queries;

(vi) that the alleged „wrong statements / replies‟ made were not

innocent but consciously made to deceive the Court and to keep the

appellant / non-review applicant in the dark of the respondent / review

applicant having already commenced exports to countries other than

America;

(vii) that such design of the respondent / review applicant nearly

succeeded, inasmuch as this Court also, during the hearing of the

appeal and on the basis of the replies to the Court‟s queries of the

respondent / review applicant, had put to the counsel for the appellant

/ non-review applicant, as to what survived in the suit and as recorded

in para 13 of the judgment dated 30th May, 2014;

(viii) that it is thus obvious that the respondent / review applicant was

taking a chance in the Supreme Court and applied for such review

only when that remained unsuccessful. Attention is invited to

Annexure-A to the reply to the review application containing the

extract from the pleadings, in which also it is argued that the

respondent / review applicant had designedly practiced concealment;

(ix) that principle of uberrima fides applies to all parties irrespective

of whether they are plaintiff or the defendant. Attention is invited to

the reply dated 2nd August, 2014 filed by the respondent / review

applicant to the CCP No.95/2014 in the suit from which this appeal

arose and in para 4(a) whereof, the respondent / review applicant has

in addition to stating that the replies of the counsel for the respondent /

review applicant as recorded in para Nos.9 to 12 of the judgment dated

30th May, 2014 were erroneous, has also pleaded the same to be a case

of erroneous recording; it is thus argued that even there a false plea is

taken;

(x) attention is invited to the documents filed by the appellant/non-

review applicant along with the aforesaid CCP to show exports of the

subject product by the respondent / review applicant since September,

2013 of approximately Rs.27 crores and it is contended that it is

impossible that the representative present in the Court was not aware

of such voluminous exports which ordinarily creates a buzz in the

company;

(xi) that the respondent/review applicant till date has not disclosed

the process adopted by it for manufacture of the product which is

being exported to other countries and permission for export whereof to

USA has been applied for;

(xii) reliance is placed on para Nos.5 & 6 of S.P. Chengalvaraya

Naidu Vs. Jagannath (1994) 1 SCC 1 and para Nos.20 to 25 of Oswal

Fats and Oils Limited Vs. Additional Commissioner

(Administration), Bareilly (2010) 4 SCC 728.

20. The senior counsel for the respondent/review applicant in rejoinder

stated that the CCP aforesaid filed by the appellant/non-review applicant has

since been dismissed as not pressed.

21. We have, considering it our duty to duly record the contentions made

before us and further finding the lis to be a hotly contested one between two

pharma giants, have made a detailed recording of the contentions made. We

may however highlight that we, in dealing with the review application, are

exercising review and not original or appellate jurisdiction. For this reason

only, we do not feel the need to give an opportunity to the respondent/

review applicant to file rejoinder to the reply of the appellant/non-review

applicant accusing the respondent/review applicant of concealment and fraud

as aforesaid recorded, nor we do intend to adjudicate the same nor are

required to adjudicate the said allegations. The question, whether the

respondent/review applicant designedly made wrong statements to derive

any advantage thereof, if at all arising and if relevant for adjudication,

whether of the suit or at any stage thereof, have to be decided by the Suit

Court and not by us. Without reaching a conclusive finding of the

respondent/review applicant having practiced such a design, the review

sought cannot be dismissed merely on that ground.

22. Else, as the aforesaid would show, there is no opposition to the review

which is merely in the nature of informing the Court that the information

given to the Court during the hearing of the appeal and as recorded in the

judgment dated 30th May, 2014 disposing of the appeal, was incorrect. The

senior counsel for the respondent/review applicant expressly stated that the

respondent/review applicant is not asking for the final outcome in the

judgment dated 30th May, 2014 to be reviewed. We are thus not even

required to consider whether the reply to the Court‟s queries given during the

hearing of the appeal was correct or the reply now given is correct.

23. We accordingly dispose of this review application observing that the

statements now made in the review application and hearing thereof, re-

replying to the Court‟s queries made during the hearing of the appeal, are

taken on record. The same shall however be without prejudice to any right

which may have accrued to the appellant/non-review applicant including of

establishing/proving/arguing that the respondent/review applicant had

designedly made wrong statements at the hearing of the appeal, to ward off

any adverse order and without also making the appellant/non-review

applicant bound by the re-replies now given by the respondent/review

applicant and/or without accepting the correctness thereof either.

24. We however deem it appropriate to burden the respondent/review

applicant with costs of Rs.25,000/- payable to the appellant/plaintiff/non-

review applicant.

RAJIV SAHAI ENDLAW, J.

CHIEF JUSTICE SEPTEMBER 22, 2014 bs