Telangana High Court

L. Prakasam Reddy vs Paras Medical Publishers on 9 November, 2023

Bench: Alok Aradhe, N.V.Shravan Kumar

       THE HON'BLE THE CHIEF JUSTICE ALOK ARADHE
                                AND
       THE HON'BLE SRI JUSTICE N.V.SHRAVAN KUMAR


     + CIVIL MISCELLANEOUS APPEAL No.318 of 2023


%     Date: 09.11.2023

#     L.Prakasam Reddy and others.
                                                         ... Appellants
                              v.
$     Paras Medical Publishers and another.
                                                   ... Respondents

! Counsel for the appellants          : Mr. Vivek Reddy,
                                      learned Senior Counsel for
                                      Ms. Preeti Kolluri

^ Counsel for the respondents         : Mr. Vivek Jain


< GIST:


     HEAD NOTE:

? CASES REFERRED:

      1. (1992) 1 SCC 719
      2. (2006) 5 SCC 282
      3. (2012) 6 SCC 792
      4. (2013) 15 SCC 27
      5. (2019) 9 SCC 358
      6. AIR 1970 MP 261
      7. AIR 1958 SC 79
      8. (2002) 3 SCC 65
      9. (2004) 3 SCC 90
      10. (2007) 10 SCC 82
      11. 2003 (67) DRJ 184
      12. 1990 (Supp) SCC 727
      13. (1995) 5 SCC 545
      14. (2020) 5 SCC 410
      15. (1960) 3 SCR 713: AIR 1960 SC 1156
                                          2




         THE HON'BLE THE CHIEF JUSTICE ALOK ARADHE
                                      AND
         THE HON'BLE SRI JUSTICE N.V.SHRAVAN KUMAR


     CIVIL MISCELLANEOUS APPEAL No.318 of 2023

JUDGMENT: (Per the Hon'ble the Chief Justice Alok Aradhe)


       This appeal is filed by the defendants against the

order dated 29.03.2023 passed by the Commercial Court

by which application for temporary injunction filed by the

plaintiffs has been allowed and the appellants herein have

been restrained from printing, publishing or distributing

the eighth edition of the textbook, namely Fundamentals of

Medical Physiology.


2.     Facts

giving rise to filing of this appeal in nutshell are

that the appellant No.1 is a retired professor in Physiology

with 45 years of experience in teaching, researching and

practical experience in Physiology. The appellant Nos.1 to 5

are the authors of medical textbook, namely Fundamentals

of Medical Physiology. The appellant No.1 has authored

eight editions of the text book based on his continued

research.

3. On 30.01.1999, the appellant No.1 entered into an

agreement with the first respondent's publishing house for

publishing a medical textbook, namely Fundamentals of

Medical Physiology - second edition. Between the years

1999 and 2015, appellant No.1 published four editions of

the medical textbook. Thereafter, the agreement was

superseded and the appellants and the respondents

entered into a fresh agreement on 18.04.2015 for

publication of new edition of the medical textbook. The

appellant Nos.1 to 5 by a letter dated 16.11.2022

terminated the agreement inter alia on the grounds that

(a) respondents failed to make satisfactory efforts in

publishing and marketing the textbook; (b) respondents

failed to communicate the actual sales of the textbook; and

availability of the textbook.

4. Thereafter, appellant Nos.1 to 5 published eighth

edition of the textbook in January, 2023 with the support

of another publishing house, namely appellant No.6.

5. Thereupon, the respondents filed a suit against the

appellants seeking relief of permanent injunction, damages

to the tune of Rs.1 crore along with interest @ 18% and for

the relief of rendition of accounts. Along with the plaint,

the respondents filed an application seeking temporary

injunction restraining the defendants from printing,

marketing, distributing, reproducing, publishing or making

alterations of the book, namely Fundamentals of Medical

Physiology, Volumes I and II, in any manner.

6. The Commercial Court by an order dated 29.03.2023

inter alia held that the assignment agreement was executed

between the parties under which the respondents/plaintiffs

had been paying royalty regularly to the appellant Nos.1 to

5/defendant Nos.1 to 5. It was further held that the validity

of termination of the agreement can only be considered

after trial and for the purposes of consideration of

interlocutory application, it has been held that assignment

of copyright in favour of the respondents/plaintiffs is

absolute. It was further held that the defences like undue

influence and misrepresentation in respect of agreement

dated 18.04.2015 can be considered only during trial.

Therefore, it was held that the respondents/plaintiffs have

prima facie case. The Commercial Court further concluded

that in case, the appellants/defendants are not restrained

from any further publication of the book, the same shall

result in huge loss to the respondents/plaintiffs.

Accordingly, the Commercial Court allowed the application

for grant of temporary injunction and restrained the

appellants/defendants from printing, publishing,

marketing or distributing or allowing any others on their

instructions to print, market, publish, distribute or reprint

of any of the previous editions, including the eighth edition

of the book till disposal of the suit. In the aforesaid factual

background, this appeal has been filed.

7. The learned Senior Counsel for the appellants while

inviting the attention of this Court to the averments made

in the plaint pointed out that no challenge has been made

to termination of agreement and therefore, the suit is prima

facie barred under Order II Rule 2 of the Code of Civil

Procedure, 1908. It is also argued that the injury which

may be caused to the respondents/plaintiffs can be

measured in terms of the damages. The attention of this

Court has been invited to averments made in paragraphs

14 and 16 of the affidavit filed in support of the application

for temporary injunction. It is further submitted that in the

absence of any finding that the injury which may be

suffered by the respondents/plaintiffs will be irreparable,

the Court ought to have refused to grant temporary

injunction. It is also contended that the agreement

provides for payment of royalties and imposes obligation on

the respondents/plaintiffs and therefore, the Commercial

Court erred in treating the same as assignment. In support

of the aforesaid submissions, reliance has been placed on

the decisions of the Supreme Court in Dalpat Kumar vs.

Prahlad Singh 1, Seema Arshad Zaheer vs. Municipal

Corporation of Greater Mumbai 2, Best Sellers Retail vs.

Aditya Birla 3, I.S.Sikandar vs. K.Subramani 4, Mahinder

1 (1992) 1 SCC 719 2 (2006) 5 SCC 282 3 (2012) 6 SCC 792 4 (2013) 15 SCC 27

Kaur vs. Sant Paul Singh 5 and Mishra Bandhu

Karyalaya vs. Shivratan Lal Koshal 6.

8. On the other hand, learned counsel for the

respondents/plaintiffs has submitted that the parties had

entered into an assignment agreement on 18.04.2015 and

if Section 18(2) read with Section 19(3) of the Copyright

Act, 1957 is read in conjunction, it is evident that the same

provides for assignment even on payment of royalty. It is

submitted that the appellants/defendants did not raise any

protest till 16.11.2022. It is also contended that the

appellants/defendants have no right to unilaterally

terminate the assignment agreement. It is contended that

the respondents/plaintiffs are not required to challenge the

unilateral cancellation of the assignment agreement and

the remedy available to the appellants/defendants is under

Section 57 of the Copyright Act. It is contended that the

respondents/plaintiffs have a prima facie case in their

favour and the Commercial Court has rightly granted the

injunction as the respondents/plaintiffs would have

5 (2019) 9 SCC 358 6 AIR 1970 MP 261

suffered irreparable loss, in case the injunction as prayed

for is not granted. In support of the aforesaid submissions,

the learned counsel has placed reliance on the decisions of

the Supreme Court in Martin Burn Limited vs.

R.N.Bangerjee 7, Laxmikant V.Patel vs. Chetanbhai

Shah 8, Midas Hygiene Industries (Private) Limited vs.

Sudhir Bhatia 9, Sumtibai vs. Paras Finance Company 10

and The Chancellor Masters and Scholars of the

University of Oxford vs. Orient Longman Private

Limited 11.

9. We have considered the submissions on both sides

and have perused the record.

10. The distinction between the assignment of a

transfers title in the copyright, whereas licence merely

permits certain things to be done by the licensee. The title

in the copyright is assigned to assignee, whereas the

7 AIR 1958 SC 79 8 (2002) 3 SCC 65 9 (2004) 3 SCC 90 10 (2007) 10 SCC 82 11 2003 (67) DRJ 184

licence is personal. Before proceeding further, it is apposite

to take note of the decisions of Supreme Court with regard

to grant of injunction.

11. The Supreme Court in Wander Limited vs. Antox

India Private Limited 12, while dealing with the issue

whether a prima facie case is made out by the plaintiff in

that case, held in paragraph 9 as under:

9. Usually, the prayer for grant of an interlocutory injunction is at a stage when the existence of the legal right asserted by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. The court, at this stage, acts on certain well settled principles of administration of this form of interlocutory remedy which is both temporary and discretionary. The object of the interlocutory injunction, it is stated "...is to protect the plaintiff against injury by violation of his rights for which he could not adequately be compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where the 'balance of convenience' lies."

12 1990 (Supp) SCC 727

The interlocutory remedy is intended to preserve in status quo, the rights of parties which may appear on a prima facie case. The court also, in restraining a defendant from exercising what he considers his legal right but what the plaintiff would like to be prevented, puts into the scales, as a relevant consideration whether the defendant has yet to commence his enterprise or whether he has already been doing so in which latter case considerations somewhat different from those that apply to a case where the defendant is yet to commence his enterprise, are attracted.

12. In Gujarat Bottling Company Limited vs. Coca

Cola 13, the Supreme Court laid down the principles on the

anvil of which the discretion of the Court to deal with the

case of grant of interlocutory injunction can be exercised,

namely (i) whether the plaintiff has a prima facie case;

(ii) whether the balance of convenience is in favour of the

plaintiff and (iii) whether the plaintiff would suffer any

irreparable injury if prayer for interlocutory injunction is

disallowed. In paragraph 43, it was held as under:

43. The grant of an interlocutory injunction during the pendency of legal proceedings is a matter requiring the exercise of discretion of the court. While exercising the discretion the court applies the following tests -- (i) whether the plaintiff has a prima facie case;

13 (1995) 5 SCC 545

(ii) whether the balance of convenience is in favour of the plaintiff; and (iii) whether the plaintiff would suffer an irreparable injury if his prayer for interlocutory injunction is disallowed. The decision whether or not to grant an interlocutory injunction has to be taken at a time when the existence of the legal right assailed by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. Relief by way of interlocutory injunction is granted to mitigate the risk of injustice to the plaintiff during the period before that uncertainty could be resolved. The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection has, however, to be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where the "balance of convenience" lies. [See: Wander Ltd. v. Antox India (P) Ltd. [1990 Supp SCC 727], (SCC at pp. 731-32.] In order to protect the defendant while granting an interlocutory injunction in his favour the court can require the plaintiff to furnish an undertaking so that the defendant can be adequately compensated if the uncertainty were resolved in his favour at the trial.

13. Thus, it is evident that the Supreme Court noted that

the very object of grant of interlocutory injunction is to

protect the party against injury by violation of his right by

which he could not be compensated in damages in the

action, if uncertainty were resolved in his favour at the

trial.

14. In Ambalal Sarabhai Enterprise Limited vs.

K.S.Infraspace LLP Limited 14, the Supreme Court in

paragraph 16 has held as under:

16. The cardinal principles for grant of temporary injunction were considered in Dalpat Kumar v. Prahlad Singh [Dalpat Kumar v. Prahlad Singh, (1992) 1 SCC 719], observing as follows : (SCC p. 721, para 5) "5. ... Satisfaction that there is a prima facie case by itself is not sufficient to grant injunction. The Court further has to satisfy that non-interference by the Court would result in "irreparable injury" to the party seeking relief and that there is no other remedy available to the party except one to grant injunction and he needs protection from the consequences of apprehended injury or dispossession. Irreparable injury, however, does not mean that there must be no physical possibility of repairing the injury, but means only that the injury must be a material one, namely, one that cannot be adequately compensated by way of damages. The third condition also is that "the balance of convenience" must be in favour of granting injunction. The Court while granting or refusing to grant injunction should exercise

14 (2020) 5 SCC 410

sound judicial discretion to find the amount of substantial mischief or injury which is likely to be caused to the parties, if the injunction is refused and compare it with that which is likely to be caused to the other side if the injunction is granted. If on weighing competing possibilities or probabilities of likelihood of injury and if the Court considers that pending the suit, the subject-matter should be maintained in status quo, an injunction would be issued. Thus the Court has to exercise its sound judicial discretion in granting or refusing the relief of ad interim injunction pending the suit."

15. In the backdrop of the aforesaid well settled legal

principles, we may now advert to the facts of the case in

hand. The plaintiff in order to prove a prima facie case is

required to establish that there are serious questions to be

tried in the suit. From the averments made in the plaint, it

is evident that the following questions arise for

consideration in the suit:

i) Whether the agreement dated 18.04.2015

executed between the parties is an assignment

or a licence?

ii) Whether the plaintiffs are entitled to rescind the

agreement and are entitled to the relief as

sought for by them in the suit?

16. The agreement executed between the parties on

18.04.2015 is titled as "assignment agreement". Under

clause (1) of the aforesaid agreement, the authors have

transferred all intellectual property rights, including

copyrights, in favour of the publisher. Clause (5) provides

for royalties and accounting procedure. Therefore, the

agreement appears to be an assignment agreement.

17. Thus, the plaintiffs have been able to make out a

prima facie case as there are serious questions to be tried

in the suit.

18. It is pertinent to note that balance of convenience

lies in favour of the defendants in the suit as in case they

are prevented from publishing the book, namely

Fundamentals of Medical Physiology - Volumes I and II,

the students would be deprived of the benefit of latest

edition of the book.

19. Now we may advert to another essential ingredient for

grant of injunction, namely irreparable injury. From the

decisions referred to in the preceding paragraphs, it is

evident that the object of grant of interlocutory injunction

is to prevent a party against an injury by violation of his

right by which he could not be adequately compensated in

damages in the action if the uncertainty were resolved in

his favour at the trial. In the instant case, in paragraph 18

of the plaint itself, the plaintiffs have pleaded the damages

suffered by them. Paragraph 18 is reproduced below for the

facility of reference:

18. As per the Agreement, the Defendant No.1 is obligated not to act in a manner that would adversely affect the sale of the publication and in the event the Defendants No.1 to 5 do so, the Defendants no.1 to 5 have agreed to be liable for all the losses suffered by the Plaintiff caused by their actions. The Defendant No.6 in collusion with Defendants No.1 to 5 is printing, publishing and selling the said book at Rs.1,995/- MRP as purported 8th edition which is a clear breach of the Agreement dt. 18/04/2015. Therefore, the Defendants stand to illegally profit from such unauthorized publication of the book over which the Plaintiff has vested rights subsisting as on today. The Plaintiff states that it is entitled for Rs.2095/- MRP as compensation on every copy of the infringing book published and sold by the Defendants as loss of profits and damages and, the

Plaintiff reserves its right to call upon the Statement of accounts of the Defendant No.6 to ascertain the same and amend the plaint if needed. Furthermore, the Plaintiff has 7th Edition books in stock which it is unable to sell on account of the circulation of the second edition in the market. Therefore, the Defendants are liable to pay the loss occasioned on the books that the Plaintiff is unable to print, publish and sell as until the date of realization of the suit. The Plaintiff estimates the total loss to his business at Rs.1,00,00,000/- as damages for the loss suffered by the Plaintiff on account of breach of Agreement by the Defendants No.1 to 5.

20. In the instant case, even though the plaintiffs have

been able to establish a prima facie case in their favour, yet

they have failed to fulfil the requirement to demonstrate

that, irreparable injury, would be caused to them in case

injunction as prayed for is not granted.

21. This Court is conscious of the scope of interference

in an appeal with the order of injunction passed by the

trial Court. In Printers (Mysore) Private Limited vs.

Pothan Joseph 15, the Supreme Court has dealt with the

scope of reversal by a Court of appeal and has held as

under:

...These principles are well established, but as has been observed by Viscount Simon in Charles Osenton & Co. v. Jhanaton (1942 AC 130) '...the law as to the reversal by a court of appeal of an order made by a judge below in the exercise of his discretion is well established, and any difficulty that arises is due only to the application of well settled principles in an individual case'.

22. In the instant case, the Commercial Court has failed

to apply the well settled legal principles for grant of

injunction, namely irreparable injury. Therefore, the case

for interference in this appeal is made out.

23. For the aforementioned reasons, the order dated

29.03.2003 passed by the Commercial Court in I.A.No.8 of

2023 in COS.No.3 of 2023 is set aside. However, the

respondent Nos.1 to 6 shall keep an account with regard to

printing, marketing, publishing, distributing or reprinting

any previous editions, including eighth edition of the

medical book, namely Fundamentals of Medical Physiology

15 (1960) 3 SCR 713: AIR 1960 SC 1156