Bayer Intellectual Property Gmbh ... vs Symed Laboratories Ltd
2019 Latest Caselaw 984 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                    Date of decision: 14th February, 2019
+       EX.P. 158/2016 & EA No.371/2015 (u/S 151 CPC)
    BAYER INTELLECTUAL PROPERTY
    GMBH AND ANR                         ..... Decree Holders
                   Through: Mr. Pravin Anand, Mr. Nishchal
                             Anand & Mr. Sanchith Shivakumar,
                             Advs.
                           Versus
    SYMED LABORATORIES LTD               ..... Judgement Debtor
                   Through: Mr. Karan Lahiri, Ms. Shwetasree
                             Majumdar & Ms. Vasundhara
                             Majithia, Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.

Execution is sought of a consent decree dated 24th April, 2015 in CS(OS) No.2434/2013 in terms of the compromise arrived at between the parties and as contained in IA No.8386/2015 in the said suit and which forms part of the decree.

2. Under the said consent decree, the defendant has undertaken that it shall not use, manufacture, import, offer to sell and sell „RIVAROXABAN‟ or any formulation containing „RIVAROXABAN‟ for the purpose of commercial exploitation or sell the same to manufacturers for commercial purpose and that if the defendant manufactures or sells products falling within the scope of suit patent, the defendant in its invoice will indicate that the sale of „RIVAROXABAN‟ or the formulation was only for the purpose of as exempted under Section 107A(a) of the Indian Patents Act, 1970. In view of the said undertaking of the defendant / judgment-debtor, the plaintiff

/ decree-holder made a statement that they were not pressing for damages and costs.

3. Execution petition has been filed pleading that (i) the defendant / judgment-debtor on 29th January, 2013 applied for a Test License (Form 29) for „RIVAROXABAN‟ and was granted the said licence on 14th May, 2013;

(ii) the plaintiff instituted the suit, decree whereunder is in execution, with the cause of action of the defendant/judgment-debtor having applied for manufacturing licence with respect to „RIVAROXABAN‟ and having advertised „RIVAROXABAN‟ on its website; (iii) the defendant / judgment- debtor on 11th December, 2013 itself when the suit came up before this Court at the after notice stage gave a statement in the Court that it will not commercialize the product and that it only had a Test Licence under Form 29 and will only manufacture „RIVAROXABAN‟ for the purpose of testing, analysis and experimentation; (iv) the same stand was repeated in the written statement filed on 21st February, 2014 and on the basis of the said stand of the defendant / judgment-debtor, the compromise aforesaid was entered into and the suit disposed of in terms of the compromise decree; (v) the plaintiff / decree-holder subsequently learnt that the defendant / judgment-debtor on 4th February, 2014 i.e. after the institution of the suit, had applied to the Drug Controller for a Commercial Licence (Form 25) for „RIVAROXABAN‟ for manufacturing „RIVAROXABAN‟ for domestic use and export and on 11 th February, 2014 had been granted the said licence; (vi) however, the defendant/judgment-debtor did not disclose the said facts in its written statement filed on 21st February, 2014 or at the time of entering into the compromise with the plaintiff / decree-holder; (vii) the plaintiff / decree- holder entered into the compromise not knowing of the commercial licence

having been applied for and granted to the defendant / judgment-debtor; and,

(viii) the plaintiff / decree-holder learnt of exports on 5th March, 2015 and 17th October, 2016 by the defendant / judgment-debtor of varied quantities of „RIVAROXABAN‟ to companies in Turkey, Belarus, US, Germany and Hong Kong and hence, this execution was filed on 8th December, 2016.

4. Notice of the execution was issued and the defendant / judgment- debtor in its reply has admitted a commercial licence to export „RIVAROXABAN‟.

5. The counsel for the plaintiff / decree-holder on 11th February, 2019 proposed that, recording the statement of the defendant / judgment-debtor that the defendant / judgment-debtor will not commercially use any product subject matter of patent with respect to „RIVAROXABAN‟ and that in the event of the Division Bench of this Court in RFA (OS) (COMM) No.6/2017 holding that export under Section 107A of the Patents Act cannot be made, whether for commercial purpose or otherwise and that the defendant / judgment-debtor shall remain bound by the said outcome, this execution petition be disposed of. Time was granted to the counsel for the defendant / judgment-debtor to take instructions.

6. The counsel for the defendant / judgment-debtor yesterday stated that she was not agreeable to the aforesaid proposal and also contended that this execution petition, as per the valuation of the suit, decree wherein is under execution, should have been filed in the District Court and does not lie before this Court. It was further contended that there is no cause of action for the execution petition. It was yet further argued that this Court does not even have the territorial jurisdiction.

7. As far as the argument of the counsel for the defendant / judgment- debtor objecting to the territorial jurisdiction of this Court was concerned, the same was rejected yesterday itself and the counsel for the defendant / judgment-debtor did not press the same.

8. On request of the counsel for the plaintiff / decree-holder, further hearing was adjourned to today.

9. The counsel for the plaintiff / decree-holder has with reference to a list of dates contended that it cannot be said that there is no cause of action for the execution. It is contended that it was not envisaged by the plaintiff / decree-holder at the time of entering into the settlement in terms whereof the suit was decreed that this Court in a subsequent dicta would hold exports to be within the purview of Section 107A of the Patents Act. It is further argued that the plaintiff / decree-holder, on the basis of exports made by the defendant / judgment-debtor after the decree, had cause of action for believing that defendant / judgment-debtor had violated the decree.

10. With respect to the objection of the counsel for the defendant / judgment-debtor to the pecuniary entitlement of this Court to entertain this execution, the counsel for the plaintiff / decree-holder has referred to the dicta of the Division Bench of this Court in Gulab Chand Sharma Vs. Saraswati Devi LLR (1975) I Delhi 345 and to the subsequent judgment of this Court in Pearey Lal & Sons (Pvt.) Ltd. Vs. Jamuna Properties (P) Ltd. AIR 2004 Del 126, both holding that under Section 37 of the Code of Civil Procedure, 1908 (CPC), the Court which passed the decree does not lose jurisdiction to execute the same merely on account of the minimum pecuniary jurisdiction of the Court being enhanced in the interregnum.

11. The counsel for the defendant / judgment-debtor has argued that, (a) the suit, decree wherein is under execution, was a commercial suit within the meaning of Section 2(i)(c) of the Commercial Courts Act, 2015; (b) the suit, decree wherein is under execution, was instituted on 5th December, 2013 with jurisdictional value of over Rs.20 lacs but below Rs.1 crore and as per the then minimum pecuniary jurisdiction of this Court was entertained in this Court; (c) however, the minimum pecuniary jurisdiction of this Court was enhanced from that in excess of Rs.20 lacs to that in excess of Rs.2 crores vide the Delhi High Court (Amendment) Act, 2015 with effect from 26 th October, 2015 and vide Notification dated 24th November, 2015 of this Court, all suits valuation whereof was upto Rs.2 crores were ordered to be transferred to the Subordinate Courts; (d) however, shortly prior to 26 th October, 2015, on 23rd October, 2015, the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Ordinance, 2015 was promulgated and later on substituted by the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 now known as the Commercial Courts Act, 2015; (e) the Commercial Courts Act classified certain categories of suits as commercial suits and the suit, decree wherein is under execution, fell in that classification; (f) the Commercial Courts Act provided that the commercial suits, jurisdictional value whereof was Rs.1 crore and above were to be entertained by Commercial Divisions if any of the High Courts; (g) the first proviso to Section 7 of the Commercial Courts Act provided that commercial suits, stipulated by an Act to lie in a Court not inferior to a District Court, and filed or pending on the original side of the High Court, shall be heard and disposed of by the Commercial Division of the High Court; (h) the suit,

decree wherein is under execution, also fell within the meaning of first proviso to Section 7 of the Commercial Courts Act and thus though had jurisdictional value of less than Rs.1 crore, was required to be tried in this Court only; (i) the first proviso aforesaid to Section 7 of the Commercial Courts Act applies to "pending suits as well as pending applications in the High Court" and "an application" as mentioned therein would take into its ambit an execution application also; (j) however if a fresh suit or fresh application including any execution application were to be filed with a valuation of less than Rs.1 crore, even if qualifying as "commercial", had to be filed in the Court of the District Judge; and, (k) this execution application having been filed after the coming into force of the Commercial Courts Act, does not qualify as a "pending application" within the meaning of first proviso to Section 7 of the Act and being of execution of decree in a suit jurisdictional value whereof was less than Rs.1 crore, can lie before the District Court only and this Court does not have territorial jurisdiction to entertain the same.

12. The aforesaid elaborate analysis and contentions by the counsel for the defendant / judgment-debtor suffer from a basic fallacy and ignores the fact that the suit, decree wherein is under execution, was disposed of on 24th April, 2015 i.e. well before the coming into force of the Commercial Courts Act on 23rd October, 2015 and the Delhi High Court (Amendment) Act on 26th October, 2015.

13. The classification in the Commercial Courts Act, of "commercial disputes", as per settled principles of interpretation of statutes, in the absence of anything to the contrary, contained in the Act itself, was / is prospective (see Commissioner of Income Tax I, Ahmedabad Vs. Gold Coin Health

Food Pvt. Ltd. (2008) 9 SCC 622 and Zile Singh Vs. State of Haryana (2004) 8 SCC 1) i.e. with effect from 23rd October, 2015 and applied to suits instituted thereafter. However, the Act expressly made the said classification applicable to pending suits and applications also.

14. The suit, decree wherein is under execution, however stood disposed of much prior thereto on 24th April, 2015 and was not a pending suit. There is nothing in the Act to suggest that the classification as commercial suits, brought into effect vide the said Act, applied to disposed of suits as well. The suit, decree wherein is under execution, cannot thus be called a commercial suit and the application by the counsel for the defendant / judgment-debtor of the provisions of the Commercial Courts Act thereto is thus misconceived.

15. That being the situation, this execution will be governed only by Section 37 of the CPC and qua which judgments supra have been cited by the counsel for the decree-holders and the contention that the aforesaid judgments will not apply owing to the suit, decree wherein is under execution, being a commercial suit, is rejected.

16. Undoubtedly the decree under execution has been passed by this Court and vide Section 38 of the CPC, is to be executed by this Court. However, per Section 37 of the CPC, the expression "court which passed a decree", in relation to execution of decrees also includes, if the Court which passed the decree has ceased to have jurisdiction to execute it, the Court which would have jurisdiction to entertain the suit, decree wherein is under execution if had been instituted at the time of applying for execution. Thus, Section 37 of the CPC takes within the sweep of the expression "court which passed a decree", also the Court which would have jurisdiction to entertain the suit of

jurisdictional value of over Rs.20 lacs and below Rs.1 crore if had been instituted on the date when this execution was filed on 8 th December, 2016 and on which date the said jurisdiction was of the District Judge. However, Section 37 of the CPC being inclusive, the Court which passed the decree i.e. this Court, as well as the Court which would now had jurisdiction to entertain the suit of the said jurisdictional valuation i.e. the Court of the District Judge, both would have jurisdiction to entertain the execution.

17. The contention of the counsel for the defendant / judgment-debtor is misconceived for another reason. Even if I were to agree with him and to hold that the suit, decree wherein is under execution, though stood disposed of prior to the coming into force of the Commercial Courts Act, would qualify as a commercial suit, an application for execution of its decree would lie in a Commercial Court only and not in an ordinary Civil Court. The execution as aforesaid was filed on 8th December, 2016 i.e. before the Commercial Courts were constituted in the District Court with effect from 21st August, 2018 upon amendment of the Commercial Courts Act by the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018 and on the said parity of reasoning also, execution could have been filed in this Court only and even under Section 37 of the CPC could not have been filed before the District Judge.

18. The counsel for the defendant / judgment-debtor interjects to contend that since the first proviso to Section 7 of the Commercial Courts Act applies only to pending suits and applications, the execution could have been filed in the Ordinary Civil Court in the District Court.

19. I am unable to agree. If the decree is of a Commercial Court, its execution will lie in a Commercial Court only and would not lie in an Ordinary Civil Court which has jurisdiction to entertain suits of a non- commercial nature. Vide Section 6 of the Commercial Courts Act, the Commercial Courts have jurisdiction to try "all suits and applications relating to commercial dispute". Thus an application for execution of a decree in a commercial suit would be in a Commercial Court only. To hold otherwise would be contrary to the underlying objective of the Commercial Courts Act, i.e. expediency and speed. A decree till executed, is a piece of paper and to hold that expediency and speed is made available till drawing up of a piece of paper and not till benefit thereunder is reaped, would defeat the objective of the statue.

20. Even otherwise, this Court does not lose jurisdiction over matters pending in this Court, of below the enhanced minimum pecuniary jurisdiction of this Court. Reference if any required can be made to Subhashini Malik Vs. S.K. Gandhi (2016) 233 DLT 83 (FB).

21. No other argument has been raised.

22. Though I have in the past, reasoning that the purport of enhancement of minimum pecuniary jurisdiction of this Court being to lessen the pendency of suits and related proceedings in this Court, jurisdiction for purposes of execution of decrees of suits, jurisdictional value whereof was less than Rs.2 crores, should be of the District Judge only but do not deem the said course of action to be appropriate in the present case. It is not deemed appropriate to trouble the District Judge to entertain and hear the execution and to compel the parties to make further expense thereon. There is really nothing for adjudication in this execution petition. The

defendant / judgment-debtor also does not claim that it will act contrary to the decree or will make any exports for purposes other than those provided under Section 107A of the Patents Act. The execution petition can thus be disposed of with the said clarification only.

23. As far as the other proposal of the counsel for the plaintiff / decree- holder, of the defendant / judgment-debtor remaining bound with the outcome of the RFA(OS)(COMM) No.6/2017 is concerned, such a direction cannot be granted without the defendant consenting and which is not forthcoming. Thus, as far as the said aspect is concerned, it will be open to the parties to take appropriate proceedings after the decision of RFA(OS)(COMM) No.6/2017 or even prior thereto, if entitled in law.

24. This execution petition is thus disposed of directing that the defendant / judgment-debtor will not commercially use any product subject matter of patent No.IN 211300 and will not export any goods covered by the said patent otherwise than for the purpose prescribed in Section 107A.

25. The counsel for the defendant / judgment-debtor has pointed out that the defendant / judgment-debtor has been complying with the decree in letter and spirit, with all invoices of export also having the endorsement which the judgment-debtor had agreed and has also taken back to back undertakings to the said effect from the consignees.

26. Execution petition is disposed of.

RAJIV SAHAI ENDLAW, J.

FEBRUARY 14, 2019 „gsr‟..