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Judgment
S. Chandrasekaran, Technical Member
This is an appeal filed by PRI Ltd., which is subsidiary of an Indian Company i.e., Secure Meters Ltd., (hereinafter referred to as the appellant)
against the order dated 23.5.2006 passed by the respondent.
The appellant is a leading manufacturer of consumer goods and utility meters including the electricity meters used by the customers. The appellant
filed an International PCT application numbered PCT/GB01/01135 on 14-3-2001. Thereafter, prior to completion of 30 and 31 months from the date of
filing of the PCT International Application, the appellant took decision to enter national phase in select countries which are the member states of the
PCT treaty. The appellant sent a mail in this regard to their principal attorney in UK, but it appears they never received the mail. When the principal
attorneys made enquiries about entering the national phase, the appellant made enquiries with their counterparts in India, Europe, Australia, New
Zealand and other countries to take steps for filing national phase applications.
One such application was made in India on 4-3-2004, whereas the national phase application should have been made in India preferably on or
before 14-10-2003, the application was numbered 546/DELNP/2004. There was a delay of nearly 4 months in filing the application and the appellant
filed a petition under Rule 138 of the Patent Rules, 2003 (hereinafter referred to as the Rules) for the condonation of delay along with the national
phase application for entering the national phase on the date of filing in India. Also the appellant prayed for an opportunity of hearing, in case should
the Controller decide to take an adverse decision against the appellant. The appellant had mentioned in its petition that in addition to India, it had filed
national phase application in 29 other countries and explained about the unforeseen and unintentional circumstances due to which delay had occurred
in filing the national phase application. In this respect it also referred to the Apex Court judgement viz., Pasupuleti Venkateswarulu v. the Motor &
General Traders wherein it was held that ""equity justifies bending the rules of procedure, where no specific provision or fairplay is violated, with a
view to promote substantial justice - subject of course to the absence of other disentitling factors or just circumstances."" On or around 1st March 2005
the appellant had filed the request for examination of the national phase application on Form 18 accompanied with the prescribed fees.
The respondent issued a letter on 18-11-2005 simply stating that ""the application has been deemed to have been withdrawn by the applicant in view
of non compliance of requirement as laid down under Rule 22 of Patents Rules 2003"". The appellant submitted a reply on 3-5-2006 and explained to
the respondent stating that the application was rightly filed and that, if at all there has been a delay in filing, the same is inadvertent, unintended and on
account of circumstances beyond its control. To this the respondent passed an order stating that ""the applicant does not comply with requirements of
Rule 20 of the Patents Rules 2003, accordingly the application is deemed to be withdrawn under the Rule 22 of the Patents Rules 2003."" Being
aggrieved by this impugned order, the appellant filed a civil writ petition No. 708/07 in the Hon'ble High Court of Delhi and subsequently withdrawn
with the liberty to file the same before this Appellate Board. Hence this appeal under Section 117A of the Act.
The Registry of the Appellate Board had scrutinised the appeal and finally placed it before the Bench for deciding its maintainability. The matter
came up before the Bench on 10-9-2008, wherein the appellant was represented by their counsel Shri Sanjiv Tiwari, but none represented the
respondent.
The counsel for the appellant argued stating the provisions of PCT clearly, as to how an International PCT application is filed and when a National
Phase application is filed in India. The counsel for the appellant admitted that there was a delay of more than 4 months of filing and it also, in abundant
caution, filed a petition for condoning the delay in filing the national phase application, together with a request for an opportunity of hearing, in case the
respondent decides to take an adverse decision against the applicant for Patent. The counsel also argued that as per Article 48 of the PCT any delay
in meeting the time limits fixed in the Treaty or the rules or regulations may be excused or condoned by the contracting state. Accordingly, the
countries like Australia, Europe, China and USA national phase applications have been accepted even with a delay when the sufficient cause for the
delay was shown. But the respondent should have at least given an opportunity of hearing to the applicant before issuing the impugned order, which
the Controller has not done and violated the Principles of Natural justice. The counsel submitted that this impugned order is non-ethical, illegal,
arbitrary and contrary to the principles of natural justice and need to be set aside. The counsel submitted that the right of audi alteram partem is one of
the well established principle of natural justice and is applicable to all the decision making administrative and quasi-judicial bodies. The counsel
submitted that the denial of the opportunity of hearing and denial of a reasoned order from the respondent adversely affects the appellant's right. In
fact the counsel also showed how the appellant has been making effort to file the national phase applications in various member countries and there
has been a delay in various countries like
But they have all taken on record the national filing except India, in spite of the fact there having filed a condonation petition before the Controller
together with an opportunity of hearing, in case the respondent is likely to take an adverse decision against the appellant. The counsel referred to the
Apex Court decision in the case of Pasupuleti Venkateswarulu v. the Motor & General Traders The Counsel also referred to Smt. Rani Kusum v.
Smt. Kanchan Devi and Ors. wherein it was held that ""all the rules of procedure are the handmaid of justice...procedural law is not to be a tyrant but
a servant; not an obstruction but an aid to justice. Procedural prescriptions are the handmaid and not the mistress, a lubricant, not a resistant in the
administration of justice."" Finally the counsel for the appellant prayed for setting aside this impugned order and pass a direction to the respondent to
examine the appellant's application for Patent and in case the respondent decides to take an adverse order, then to give an opportunity of hearing to
the appellant before taking any such decision.
We have heard the counsel for the appellant. Let us see the provisions of PCT as per the Patents Act and Rules there under, which read as under:
Rule 20.- International applications designating or designating and electing India.- (1) An application corresponding to an international application under
the Patent Cooperation Treaty under Section 7(1A) may be made in Form 1.
(2) The Patent Office shall not commence processing of an application filed corresponding to international application designating Indian before the
expiration of the time limit prescribed under Sub-rule (4)(i).
(3) An applicant in respect of an international application designating India shall, before the time limit prescribed in [Sub-rule (4)(i)],-
(a) pay the prescribed national fee and other fees to the patent office in the manner prescribed under these rules and under the regulations made
under the Treaty;
(b) and where the international application was either not filed or has not been published in English, duly verified by the applicant [or the person duly
authorized by him] that the contents thereof are correct and complete.
[(4)(i) The time limit referred to in Sub-rule (2) shall be thirty one months from the priority date as referred to in Article 2(xi);
(ii) Notwithstanding anything contained in Clause (i), the patent office may, on the express request filed in Form 18 along with the fee specified in the
First Schedule, process or examine the application at any time before thirty one months.]
(5) The translation of the international application referred to in Sub-rule (3) shall include a translation in English of,-
(i) the description;
(ii) the claims as filed;
(iii) any text matter of the drawings;
(iv) the abstract; and
(v) in case the applicant has not elected Indian and if the claims have been amended under Article 19, then the amended claims together with any
statement filed under the said Article;
(vi) in case the applicant has elected India and an amendments to the description, the claims and text matter of the drawings that are annexed to the
international preliminary examination report.
(6) If the applicant fails to file a translation of the amended claims and annexures referred to in Sub-rule (5), even after invitation from the appropriate
office to do so, within a time limit as may be fixed by that office having regard to the time left for meeting the requirements, the amended claims and
annexures shall be disregarded in the course of further processing the application by the appropriate office.
(7) The applicant in respect of an international application designating India shall when complying with Sub-rule (3), preferably use Forms set out in
the Second Schedule before the appropriate office as designated office.
Rule 21. Filing of priority document.- (1) Where the applicant in respect of an international application designating Indian has not complied with the
requirements of paragraph (a) or paragraph (b) of Rule 17.1 of the regulations under the Treaty, the applicant shall file with the patent office the
priority document referred to in that rule before the expiration of the time limit referred to in Sub-rule (4) of Rule 20.
(2) Where priority document referred to in Sub-rule (1) is not in the English language, an English translation thereof duly verified by the applicant shall
be filed within the time limit specified in Sub-rule (4) of Rule 20.
(3) Where the applicant does not comply with the requirements of Sub-rule (1) or Sub-rule (2), the appropriate office shall invite the applicant to file
the priority document or the translation thereof, as the case may be, within three months from the date of such invitation, and if the applicant fails to do
so, the claim of applicant for the priority shall be disregarded for the purposes of the Act.
Rule 22. Effect of non-compliance with certain requirements.- An international application designating India shall be deemed to be withdrawn if the
applicant does not comply with the requirements of Rule 20.
Rule 23. The requirements under this Chapter to be supplemental of the regulations, etc., under the Treaty.- (1) The provisions of this Chapter shall be
supplemental to the PCT and the regulation and the administrative instructions made thereunder.
(2) In case of a conflict between any provisions of the rules contained in this Chapter and provisions of the Treaty and the regulations and the
administrative instructions made thereunder, the provisions of the Treaty and the regulations and administrative instructions made thereunder shall
apply in relation to international applications.
Patent Cooperation Treaty (PCT)
Article 48
Delay in Meeting Certain Time Limits
(1) Where any time limit fixed in this Treaty or the Regulations is not met because of interruption in the mail service or unavoidable loss or delay in the
mail, the time limit shall be deemed to be met in the cases and subject to the proof and other conditions prescribed in the Regulations.
(2)(a) Any Contracting State shall, as far as that State is concerned, excuse, for reasons admitted under its national law, any delay in meeting any time
limit.
(b) Any Contracting State may, as far as that State is concerned, excuse, for reasons other than those referred to in subparagraph (a), any delay in
meeting any time limit.
Now from the above provisions of Sub-rules (1) to (7) of Rule 20, there is provision for meeting a requirement of the rule for PCT filing except the
time limit of thirty one months from the date of filing of the international PCT application, which is kept as an outer limit. That means the national
phase application in respect of an international PCT application shall be filed together with the fee payment etc., within the outer time limit of 31
months from the date of filing of the international PCT application. For example when a priority document is not filed within the 31 months, the
Controller may give additional three months time within which the priority document shall be filed otherwise forfeit the priority date for the
international PCT application, whereas such a provision with a flexibility or any additional time limit has not been provided in the rules for national
phase entry. That means the applicant who wishes to enter the national phase in India, after having chosen India as one of the designated member
state for filing the national phase application shall without any excuse file the same national phase application before the expiry of 31 months along
with prescribed fee etc., failing which, it would go to prove that the applicant has not complied with the requirements of provisions contained in the
Rule 20 of the Rules. Then it would be automatically turning out non-compliance of certain requirements of Rule 20 and Rule 22 will be immediately
attracted. Though some free will or liberty is given to any contract state to excuse any delay in meeting any time limit, India has only kept the time
limit as 31 months and no further extension of time limit. That means it is mandatory requirement for all the international applicants to come within the
time limit of 31 months if they choose to file national phase application in India. This free authority is given under Article 48(2)(a) of the PCT
regulations. That means the Controller has the right to admit or refuse entry according to the time limit specified in the rules. The respondent here, of
course could have been given the opportunity of hearing when the applicant (appellant here) has specifically made a petition and a request in it
towards an opportunity of hearing.
It is a well known principle of law that while appreciating the dominance of principle in decision making by any authority, which would adversely
affect the interests of the applicant, the authority shall always follow the well settled principles of natural justice. One of the essential pillars of
principles of natural justice is audi alteram partem. The rule ensures that no one should be condemned unheard. ""The rules of natural justice operate as
implied mandatory requirement, non-observance of which amounts to arbitrariness and discrimination. ""In fact, the principles of natural justice in the
realm of life and liberty would ipso facto even be read into Article 21 because any procedure, which affected life or liberty had to be a just, fair and
reasonable procedure which necessarily meant the observance of the principles of natural justice. That is why these principles have been called as
part of the universal law, as part of the rule of law and have also been termed as fair play in action."" ""Audi Alteram Partem is one of the fundamental
principles of natural justice. A quasi-judicial or administrative decision rendered or an order made in violation of the rule of Audi Alteram Partem is
null and void and the order made in such a case can be struck down as invalid on that score alone--- In Dhakeshwari Cotton Mills Ltd. v. C.I.T. AIR
1955 SC 65, the Supreme Court held that the principles of natural justice were violated while making assessments and so quashed the assessments
order so passed. Hence from this case, it may be noted that the rules of natural justice operate as implied mandatory requirement, non- observance of
which amounts to arbitrariness and discrimination. See Maneka Gandhi v. Union of India AIR 1980 SC 597, Gangadharan Pillai v. Asstt. CED In
other words, the order, which infringes the fundamental principles, passed in violation of Audi Alteram Partem rule, is a nullity. When a competent
court of authority holds such an order as invalid or sets it aside, the impugned order becomes null and void-- See Nawabkhan Abbaskhan v. State of
Gujarat ""In case of Swadeshi Cotton Mills (p) Ltd; in case of Mankea Gandhi, in case of Smt. Kanti Khare the courts have followed the same
principle and have quashed the order as being a nullity and void."" ""In view of aforesaid settled principle of law and various decisions, which we are
bound to follow there remains no doubt the answer to the question before us, i.e. our answer to the question is that once the assessment is found to be
in violation of principle of natural justice it has to be quashed as being bad in law and void or a nullity"". In Ross v. Medical University of South Carolina
328 S.C. 51, 68 : 492 S.E.2d 62, 71 (1997), the South Carolina Supreme Court held that, ""law requires an administrative agency or authority to provide
notice and an opportunity to be heard, but does not require notice and an opportunity to be heard at each level of the administrative process. It
mandates notice and opportunity to be heard at some point before the agency makes its final decision. An authority is required to act judicially
whenever its actions are likely to result in any disadvantage to a person. ""Disadvantage"" as the Supreme Court has stated in Bhagwan v. Ramchand
may result from taking away of a right or a privilege or adverse effect on an interest"". If it appears that an authority or a body has been given power
to determine questions affecting the right of citizens, the very nature of power would inevitably impose a limitation that the power should be exercised
in conformity with the principles of natural justice. Supreme Court of India had even gone to the extent of treating cases on the principles of natural
justice as a part of Article 14 of the Constitution. The principles of natural justice have been elevated to the status of fundamental rights guaranteed in
the Constitution as is evident from the decision of the full Bench of the Supreme Court in the case of Union of India v. Tulsiram Patel holding that the
principles of natural justice have thus come to be recognized as being a part of the guarantee contained in Article 14 of the Constitution because of the
new and dynamic interpretation given by the Supreme Court to the concept of equality and that violation of principles of natural justice.
There is only one more principle that has slowly taken root as a part of natural justice. This is the principle that every decision must contain
reasons for the decision. Reasons may be elaborate or may be brief. But these are beginning to be considered necessary to ensure fair decision
making. There are many grounds for requiring reasons. In the first place, it ensures application of mind by the decision maker to the material before
them which will be reflected in the reasons given. A non-speaking order does not do this. The soul of a judgment or decision making process in
litigation is normally, the listing of the reasons for arriving at the findings. These are also called 'the opinion' of an adjudicating authority. There is no
rigid rule, as to how a finding may be listed or recorded. The adjudicating authority, shall however, give his reasons while arriving at the decision. It is
not sufficient to say that he believes the evidence or agrees with the argument. The authority must give his reasons for such belief and agreement
while making the decision. The logical reasoning, however, must follow in reaching to a conclusion. The operative portion of the order should as far as
possible self-executing and self-contained and not arbitrary, by making it a speaking order. The necessary ingredient in all such orders is recording of
the raison d'etre for the order/decision. Thus the recording of reasons is essential. The reasons must deal with the facts and the evidence at least in
some summary manner. There must be some indication in the order that the matter was considered in the proper perspective and the decision so
rendered.
In this case the first authority is the Controller of Patents who shall adjudicate the matter in such a way, that, it is not only a question of law and its
interpretation, which is required to be considered but also applied in a judicious manner. Let us see some of the famous reported cases and decisions
of the Hon'ble High Courts in this matter of recording the reasons in the order or decision.
In Porter v. S.C. Public Serv. Comm.'s 333 S.C. 12, 21 : 507 S.E.2d 328, 332 (1998), it was held by the tribunal, that it will not accept an
administrative agency's decision at face value without requiring the agency to explain its reasoning and that ""an administrative body must make
findings which are sufficiently detailed to enable the tribunal to determine whether the findings are supported by the evidence and whether the law has
been applied properly to those findings. Under this standard, an administrative decision is unacceptable if it states the outcome without adequately and
correctly explaining the reasoning that leads to the outcome"".
The Apex Court in Karnataka State Road Transport Corporation v. Asmathunnisa (Smt. ) and Ors. considered the submission that the court did not
consider all the relevant points and has not come to a reasoned conclusion for agreeing with the conclusion drawn by the trial court. The court pointed
out that the appeal was not disposed of in accordance with law and without expressing any opinion on the merits of the controversy between the
parties and the appeal was remanded.
The Apex Court in the case of Satya Pal and Ors. v. Tek Ram and Ors. In Civil Appeal No. 1493/2004 decided on March 8, 2004 pointed out as
under:
We are of the view that the manner of disposal given by the Division Bench could hardly be said to be a judicious or judicial disposal of the matter as
is expected of a first appellate court. Though the appellate court while passing an order in affirmance need not give detailed and elaborate reasons,
there should be sufficient indication of proper application of mind before court. To see that the impugned order is a well reasoned order and does not
call for interference is no sufficient indication of application of mind.
HON'BLE Mr. Justice Sanjay Kishan Kaul and B.C. Patel, C.J. of High Court of Delhi in LPA No. 1120 of 2004, Mohammad Abullas @ Abdul and
Anr. v. Mussadi Lal and Ors., in their decision dated 2nd March, 2005, held, that ""in the absence of any reasons recorded by the first appellate court it
is not possible to consider this appeal on merits unless the first appellate court itself examines merits of the judgment of the Tribunal and records
reasons for accepting or rejecting the first appeal. On this short ground alone the appeal is required to be allowed and the matter is required to be
remanded before the learned single Judge for hearing in accordance with law.
Thus we are of the opinion that the learned Controller of Patents could have offered an opportunity of hearing to the applicant for Patent in this
case of national phase entry in respect of an international PCT application and recorded his observations in the file.
The learned Controller of Patents, instead of giving the impugned one line report, could have clearly mentioned why the appellant's national phase
application could not be processed further. Nevertheless, this appellant has appealed in the Appellate Board against this impugned order, but this
impugned order says that this application is deemed to have been withdrawn as per Rule 22, due to non-compliance of the requirements of Rule 20 of
the Patents Rules, 2003. This one line order has been included in the examination report issued under Section 12 of the Act which is again not
encompassed by Section 117A of the Act for appeal before the Appellate Board. In the absence of entitlement of such an appeal to the appellant this
appeal before us is held as not maintainable and hence appeal is dismissed.
Parties shall bear their own costs.