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Judgment
S. Usha, J
Miscellaneous Petition filed by the appellant seeking leave to amend the name and address of the appellant Company - Associated Capsules Pvt. Ltd., Plot No. 131, Industrial Estate, Kandiwali (West), Mumbai-400067 and the same be substituted/amended to read as ACG Pharmapack Pvt. Ltd. at 10th Floor, Dalamal House, Nariman Point, Mumbai 400021 and to amend the memo of parties in the instant appeal.
The Petitioner/appellant filed the above appeal against an order dated 12.12.2007 passed by the Assistant Controller of Patents, Mumbai, in the matter of post grant opposition to Indian Patent No. 197823 under Section 25(2) of the Patents Act, 1970.
3 . On 2.5.2008, pending the appeal, the Hon'ble Bombay High Court in Company Petition Nos.175 & 176 of 2008 passed an order, whereby the Rigid Packaging Films business of the Appellant - Associated Capsules Pvt. Ltd. (ACPL) has been demerged and transferred to the resulting Company - ACG Pharmapack Pvt. Ltd. (ACGPPL) by virtue of a scheme of arrangement between ACPL & ACGPPL. Accordingly, all the assets, properties, rights and rights in respect of the business in the name of the ACPL is taken over/transferred with ACGPPL.
In view of the said order of demerger and transfer dated 2.5.2008 the name of the Appellant Company in the cause title of the Appeal and wherever such name appears ought to be substituted. In the interest of justice the petitioner/appellants seeks leave to amend the name and address of the appellant Company.
The respondent No. 3 filed their reply to the miscellaneous petition stating that the miscellaneous petition is misconceived, not maintainable and deserves to be dismissed. There is no change in the name of the petitioner based on the facts. The division concerned with the products and services relating to Rigid Packaging Materials which is the subject matter of the appeal has been demerged from the petitioner and the petitioner was debarred from carrying on the appeal in their own name and a different entity ACGPPL has been created for carrying on the activity of the demerged division. The petitioner ceased to be a person interested under the provisions of Section 25(2) read with Section 2(1) (t) of the Act.
The business was carried out in the name of the petitioner as a result of which the 3rd respondent filed a suit for infringement before the Tis Hazari District Court in C.S. No. 42/2008. In the said Suit the petitioner took steps under Order 22, Rule 10, C.P.C. Records show that on or before April, 2007 all the business were transferred to the new entity.
7 . The petitioner had a number of opportunities at the time of hearing before the Controller to bring the fact of demerger to the notice of the Controller. The petitioner willfully suppressed the material fact. The respondent then relied on Clause 8 of the Scheme of Arrangement. The respondent submitted that as per the Scheme of Arrangement the applicant Company ought to have given notice for sanction of Scheme of Arrangement to the respondent who is the judgment creditor of the petitioner in view of the fact that a cost of Rs. 30,000/-was to be paid to the respondent as imposed in the impugned order. In view of the above, the respondent prayed that the miscellaneous petition deserves to be dismissed.
We heard the Counsel for both the parties.
The Counsel for the respondent in Miscellaneous Petition No. 76/2011 had filed a Miscellaneous Petition No. 15/2012 for dismissal of the appeal on the ground that the present appellant are not legally entitled to proceed with the appeal as the rights have been transferred to ACGPPL. The same averments were made as in Miscellaneous Petition No. 76/2011.
The Counsel for the respondent No. 3 advanced his arguments stating that there was a long delay in filing this miscellaneous petition. The petitioner had brought in the change of name in the Civil Suit as early as 2009 and this miscellaneous petition has been filed after the respondent had filed the miscellaneous petition for dismissal. The Counsel then relied on Clause 8.1 and 8.2 of the Scheme of Arrangement for the demerger and submitted that present appellant/petitioner be excluded from the proceedings. The Counsel also raised certain technical issues.
In reply the Counsel for the petitioner relied on Clause 8.3 of the Scheme of Arrangement and submitted that as per that clause the new entity was to defend the Company. The Counsel also admitted that there was a delay due to the reason that the matter was being handled by various Advocates. The Counsel admitted that Power authorizing by the new Company was not filed as it can be only filed after the amendment/substitution is allowed and he undertook to file it any time on the directions by this Board. The Counsel in reply to the respondents arguments relied on the judgment - 1994 (1) SCC 1 - S.P. Chengalvaraya Naidu Vs. Jagannath for fraud and submitted that there was no fraud played by the petitioner and that judgment was not applicable to the case on hand. The Counsel also admitted that there was a procedural lapse but with no intention.
In rejoinder, the Counsel for the respondent No. 3 submitted that Clause 8.3 of the Scheme of Arrangement can come to play only if it cannot be transferred. Clause
2 - cannot be treated jointly as it has been transferred. The Counsel then submitted that it was a motivated delay and there was a willful suppression and hence the miscellaneous petition No. 76/2011 be dismissed and M.P. No. 15/2012 be allowed.
We have heard and considered the arguments of both the Counsel. The relevant clause from the Scheme of Arrangement/providing demerger are reproduced below-
Legal Proceedings
8.1 Upon the Scheme becoming effective, all legal and other proceedings, including before any statutory or quasi-judicial authority or tribunal of whatsoever nature by or against the Demerged Company pending and/or arising at the Appointed Date and relating to the Demerged Undertaking, shall be continued and enforced by or against the Resulting Company only, to the exclusion of the Demerged Company in the manner and to the same extent as would have been continued and enforced by or against the Demerged Company. On and from the Effective Date, the Resulting Company shall and may, if required, initiate any legal proceedings in relation to the Demerged Undertaking.
8.2 In the event that the legal proceedings referred to above, require the Demerged Company and the Resulting Company to be jointly treated as parties thereto, the Resulting Company shall be added as party to such proceedings and shall prosecute or defend such proceedings in cooperation with the Demerged Company. In the event of any difference or difficulty in determining whether any specific legal or other proceeding relates to the Demerged Undertaking or not, the decision of the Board of Directors of the Demerged Company as to whether such proceeding relates to the Demerged Undertaking or not, shall be conclusive evidence of the relationship with Demerged Undertaking.
8 .3 After the Appointed Date, in case the proceeding referred to in Sub-Clause 8.1 cannot be transferred to any reason, the Demerged Company shall defend the same at the cost of the Resulting Company, and the Resulting Company shall reimburse, indemnify and hold harmless the Demerged Company against all liabilities and obligations incurred by the Demerged Company in respect thereof.
From the bare reading of the Clause 8.1, it is clear that all pending legal and other proceedings by or against the Demerged Company (ACPL) shall be continued or enforced by or against the Resulting Company (ACGPPL) in the manner as would have been continued and enforced by or against the Demerged Company.
Clause 8.2 speaks of joint action and if any difference or difficulty the decision of the Board of Directors shall be conclusive.
Clause 8.3 deals with matter which cannot be transferred.
As per Clause 8.1 since the rights, assets and properties are transferred in the name of ACGPL from ACPL, therefore we are inclined to agree with the appellant that the appeal may now be prosecuted by the resulting Company ACGPPL. There is no material change except for change in name and address due to demerger of ACPL with ACGPPL.
1 8 . The Miscellaneous Petition No. 76/2011 in OA/5/2008/PT/MUM is therefore allowed with costs of Rs. 3,000/-and with a direction to carry out the necessary amendments within three weeks from the date of receipt of this order. In view of this, the Miscellaneous Petition No. 15/2012 in OA/5/2008/PT/MUM is dismissed with no order as to costs. M.P. No. 14/2012 in OA/5/2008/PT/MUM is also dismissed as the matter shall be listed and heard in the Circuit Sittings at Mumbai.