Reckitt and Colman (Overseas) Limited vs Ind Swift Limited

This appeal is directed against the order dated 12 June 2014 of the learned Trial Judge on the Appellant-Plaintiff''s Notice of Motion No. 1364 of 2013 for restoration of the suit filed in the year 2002 for infringement of trademark and passing off. The suit came to be dismissed on 29 January 2013 on the ground that the Plaintiff had failed to file its affidavit of documents and compilation and failed to complete discovery and inspection though the matter had appeared on board several times but the matter got repeatedly adjourned often at the instance of Plaintiff-Appellant.

The Plaintiff offered the following explanation in paragraph 3 of the affidavit in support of Notice of Motion No. 1364 of 2013:

I say that the draft of the affidavit of evidence and was ready and was in the process of being approved by the plaintiffs. The said affidavit of evidence and list of documents was prepared by the plaintiffs'' advocates on record, who sent the same to the plaintiffs'' Trade Mark Attorneys who after checking the same sent it to the plaintiffs'' for approval. The plaintiffs who are based in United Kingdom have several meetings firstly with their in house Counsel and then with their Attorneys to finalise the same. Further it took a long time to locate the documents required for the same as the documents required are quite old. I say that the affidavit and the compilation of documents are now ready and executed.

The learned Trial Judge has held that it was unlikely that in their own jurisdiction in England the Plaintiff or, for that matter, any other litigant would have been shown the kind of indulgence that the Plaintiff are seeking with the Trial Court, except perhaps on the stringent terms. The learned Trial Judge accordingly directed that upon the Plaintiff paying to the Defendant''s Advocate a sum of Rs. 10 lakhs as costs as a condition precedent within a period of ten days and further conditional upon the Plaintiff''s filing in the registry of this Court its affidavit of evidence and compilation of documents on or before 25 June 2014, the suit was directed to be restored to the file. The learned Trial Judge further directed that if costs are not paid as directed or if the affidavit of evidence and compilation of documents are not filed by the stipulated date, the suit shall not restore to the file. It is the aforesaid order which is under challenge in this appeal.

Learned counsel for the Appellant-Plaintiff has placed heavy reliance on the decision of Supreme Court in Sanjeev Kumar Jain Vs. Raghubir Saran Charitable Trust and Others, in support of the contention that having regard to the Indian conditions, it is not possible or practical to spend the amount of time that is required for determination of actual costs as done in foreign countries. If the Courts have to set apart the time required for the elaborate procedure of assessment of costs, it may even lead to an increase in the pendency of cases.

It is further submitted on behalf of the Appellant that such heavy exemplary and punitive costs ought not to have been imposed upon the Plaintiff. It is only in case where the Court finds that false and vexatious claim has been made by a party, that the Court may consider imposing punitive costs. But even Section 35A of the Code of Civil Procedure, 1908 provides that maximum amount that should be awarded as compensatory costs for false and vexatious claim used to be Rs. 1,000/- which is now raised to Rs. 3,000/-. The Supreme Court has suggested in the aforesaid judgment that quantum of compensatory costs should be at least Rs. 1,00,000/- (Rs. 1 lakh).

The learned counsel for Plaintiff further submits that the claim in the suit is for perpetual order and injunction restraining the Defendant from using in relation to medicinal preparations the mark and trademark "Neurophen" and for damages of Rs. 1 lakh or such amount as may be found due and payable and in the alternative the Plaintiff has prayed for a direction to the Defendant to render a true and faithful account of the profits earned by it by using the impugned mark and label and the Defendant be directed to pay the Plaintiff such amount as may be found due and payable on such accounts being taken. The learned counsel for the Appellant, therefore, submitted that the impugned order imposing costs of 10 lakhs (Rupees One Million) on the Plaintiff is too harsh and disproportionate, and therefore, be quashed and set aside.

Learned counsel for Plaintiff submits that the appeal is not merely against the order of costs but also for the consequences of non compliance with the impugned order. The effect of non compliance with the impugned order is that the suit dismissed by the learned Trial Judge on 29 June 2013 would not be restored to the file and the consequence would be very grave and serious.

Learned counsel for Respondent-Defendant submits that appropriate and reasonable costs be awarded.

We have considered the rival submissions. The observation in Sanjeev Kumar Jain (supra) as regards the costs ceiling of Rs. 3,000/- was in the context of the provisions contained in Section 35A(2) of the Code of Civil Procedure, 1908 (''Code''). The costs awarded in the present case are relatable to the exercise of discretion u/s 35B of the Code.

Although, we see no reason to interfere with the observations recorded by the learned Trial Judge qua the conduct of the Appellants, nevertheless, we are of the opinion that the matter requires to be viewed with a slightly wider perspective. We cannot be unmindful of the circumstance that the present suit was filed in the year 2002. At that time and for that matter even upto 31 August 2012, all the suits of the value exceeding Rs. 50,000/- (wherein Defendants were either residing in Mumbai or where cause of action had arisen entirely or partly in Mumbai) were filed in this Court, as the pecuniary jurisdiction of the Bombay City Civil Court was limited to Rs. 50,000/- only. The Act passed by the State Legislature in 1987 for transfer of the entire original jurisdiction of this Court to the Bombay City Civil Court was not implemented, even after dismissal of the writ petition challenging the constitutional validity thereof, by this Court as also by the Supreme Court in the year 2005 in view of non fulfillment of certain conditions stipulated in the Supreme Court order. It was only upon coming into force of the Bombay City Civil Court (Amendment) Act, 2012 that the pecuniary jurisdiction of the Bombay City Civil court came to be enhanced to Rs. 1 crore and as a consequence thereof about 36000 suits came to be transferred from this Court to the Bombay City Civil Court with effect from 1 October 2012, thereby leaving about 4000 suits for trial by this Court in exercise of its original jurisdiction. This number has now gone upto about 5500 suits.

Further we must note that there were hardly two or three Judges at the relevant time handling the mass of about 40,000 suits, whereas now strength of Judges has gone up and we have five Judges handling about 5500 suits. In such circumstances, earlier it was not possible for the learned Trial Judges of this Court to effectively touch most of the suits. The litigants and the advocates, therefore, perhaps had a feeling that even if they were to take expeditious steps for filing affidavits and documents, there was no realistic chance that the suit would be taken up for trial. Ordinary human psychology, might have therefore, retarded the initial enthusiasm of both litigants and their advocates, particularly in the matter of adoption of expeditious steps, so that the suits are ready for trial. However, now that position has changed. We are able to get matters moving. The necessary steps for having suits ready for trial are being taken up and recording of evidence and delivery of judgments is poised on the fast track. We also hope that now the learned Trail Judges of this Court will adopt the case management techniques including scheduling and holding pre-trial conference.

Whilst we appreciate that moving the system from the first gear to the top gear is bound to create some difficulties, we expect both the litigants and their advocates to brace themselves into preparedness and be a valuable part of this changed scenario. Ultimately, the expeditious disposals of law suits, in accordance with law and established legal procedures is of paramount interest of all concerned. In such circumstances, whilst we do not wish to grant any undue indulgence to the parties, conscious, that some inertia on their part may have to be overcome, we are of the view, that in this case, interests of justice would be served if the suit is restored to the file subject to the Plaintiff paying costs of Rs. 50,000/- to the Defendant''s Advocate and Rs. 50,000/- to the Bombay High Court Main Mediation Centre, at Mumbai within a period of three weeks from today and also subject to condition that the Plaintiff files affidavit of documents and evidence within a period of three weeks from today.

The impugned order dated 12 June 2014 of the learned Trial Judge shall stand modified in the aforesaid terms. The appeal stands disposed of. No order as to costs.