RULE.
Mr. Abhay Jain with Mr. Y.J. Trivedi, learned Counsel waives service of notice of rule on behalf of respondent No.2. Though, respondents Nos. 1 and 3 are duly served, they have not chosen to appear before this Court. It appears that the said respondents are not interested in contesting the petition. As no fruitful purpose would be served if the matter is kept lingering on indefinitely, the petition is being heard and finally decided today.
1.0 This petition has been preferred challenging order dated 16.07.2009, passed by the City Civil Court, Ahmedabad, below application at Exhibit-153, in Civil Suit No.3317 of 2001, whereby the said application for framing additional issues has been rejected.
2.0 Briefly stated, facts of the case relevant for deciding the present petition are that, the petitioner, which is a Company, incorporated under the provisions of Companies Act, 1956, instituted the above-mentioned against the respondents. Respondent No.1 is an ex-employee of the Company and respondent No.3 is a Foundry, managed by another ex-employee of the petitioner, where the machinery and spare parts of the petitioner, have been fabricated. It is the case of the petitioner that respondents Nos. 1 and 3 have clandestinely passed on the trade secrets of the petitioner, accessed by them during the course of their employment, to the respondent No.2. The petitioner-Company is engaged in the business of manufacturing high chromium wear castings including grinding media balls and liners for tube mills, inserted rolls, related castings and airport ring assembly for vertical mills having application in power generation, mining and cement manufacturing industries.
2.1 It is further the case of the petitioner-Company that it has obtained the said technology for manufacturing the aforesaid products from its erstwhile foreign collaborator. The said technology consist trade secrets of the petitioner which reads as below:
Design of parts for Ball Mills, vertical mills, kilns and crushers;
Chemical formulae;
Methoding of casting manufacture;
Manufacturing process;
Heat treatment technology;
Know-how to adopt this technology to deliver end products capable of satisfying the exact working condition and application;
(7) Process know-how for optimization work of equipments where the wear part are fitted;
Developing special equipments for manufacturing the products.
2.2 It is the assertion of the petitioner that the technology and information which comprising the trade secrets referred to above is not in the public domain or otherwise available to any person. Insofar as grinding media, high chromium wear resistant castings are concerned, the petitioner has, over a considerable period of time, developed a special technology which would reduce the wear rate of such media, which has an immense potential to reduce the cost for the petitioner, in addition to other technical benefits. By applying the aforesaid technology, the petitioner has been able to reduce the wear rate of high chromium grinding media for special application of grinding zinc ore, from an industrial average of about 900 gms./tonne to 780 gms./tonne.
2.3 In short, the case of the petitioner is that the respondents, in particular, respondent No.2 has no right of any nature whatsoever to manufacture, offer for sale or supply the products / services as mentioned below:
(i) Grinding media for zinc ore grinding application of a wear rate of 780 gms./tonne or lower.
(ii) Duocast rollers (inserted rolls used in vertical Grinding Mills).
(iii) Airport ring assembly.
(iv) Ball sorting machine and associated services.
2.4 The learned Counsel for the petitioner-Company has submitted that the said technology has been exclusively obtained by it from its erstwhile foreign collaborator and it is a trade secret of the petitioner as the process of manufacturing and applying the said technology and information is available with the petitioner, alone. According to the petitioner-Company, it has further improved upon the said technology that is obtained from its erstwhile foreign collaborator and this information is exclusively in the possession of the petitioner. However, as respondents Nos. 1 and 3 clandestinely passed on the said information, which they gathered during the course of their employment with the petitioner-Company, to the respondent No.2, who is also engaged in the same business, the petitioner was constrained to institute the above-mentioned Suit for declaration and permanent injunction against the respondents.
2.5 Respondent No.2 has filed its written statement on 29.03.2007, whereas the respondents Nos. 1 and 3 have filed their written statements on 25.07.2007 and 26.07.2007, respectively. Five issues were settled vide Exhibit-84, on 12.06.2007, which are as under,
1. Whether the plaintiff has got monopoly and exclusive right for manufacturing and marketing of High Chromium Grinding Ball for Zink are having wear rate 780 Gms./tonnes ?
2. Whether the plaintiff proves that the defendant No.1 and 3 have passed on technology and trade-secret of the plaintiff to defendant No.2 after leaving the service of the plaintiff ?
3. Whether the plaintiff proves that the defendant No.2 is using the technology and trade-secret of the side product?
4. Whether the plaintiff is entitled to get any relief? If yes, what ?
5. what order and decree ?
2.6 The petitioner filed an application at Exhibit-153 on 06.07.2009, submitting that certain material facts have been pleaded by the respondents (Original Defendants) in their written statements, wherein the said respondents have taken a positive stand and made positive assertions, therefore, eight additional issues, as prayed for in the application, be framed. The said application has been rejected by the trail Court, by passing the impugned order, giving rise to the filing of the present petition.
3.0 Mr.
Mihir Joshi, learned Senior Advocate with Mr. Rasesh Parikh, learned Counsel for the petitioner-Company has submitted as below:
(A) That, it is the categorical stand of the petitioner in the Suit that the petitioner has exclusive technology for manufacturing high chromium grinding media for zinc ore grinding application, which has a wear rate of 780 gms./tonne or lower.
(B) That, additional issues are required to be framed in view of the positive assertion of the respondent No.2 in the written statement that he is manufacturing high chromium grinding balls since 1995 and supplying it to various companies in India and also exporting the said product. There is a further assertion by respondent No.2 that he has got a wear rate of 760 gms./tonne, which is lower than the rate of 780 gms./tonne, quoted by the petitioner. Respondent No.2 has further submitted that to manufacture high chromium grinding balls no special machinery or special or innovative technology is required and that the services provided by the petitioner are not unique, or exclusive to the petitioner, and the said machines and technology are available in India as well as abroad, and no new technology has been developed by the petitioner. Respondent No.2 having made a positive statement in his written statement, which is contrary to the assertion made by the petitioner in the plaint, additional issues are required to be framed, in order to prove its case, wherein the onus of proof, rests on respondent No.2.
(C) That, the petitioner-Company has paid considerable amounts to its erstwhile foreign collaborator, in order to obtain the said technology and in the event that respondent No.2 asserts that the said technology is in the public domain, it is an issue which arises in the matter therefore, the trial Court ought to have considered the application in its proper perspective and framed additional issues, which arise for proper adjudication of the matter.
(D) That, in view of the provisions of Order 14, Rule 1 of the Code of Civil Procedure when a material proportion of fact or law is affirmed by one party and denied by another party, an issue arises. As per Rule 3 of the said Order, the Court can frame issues from the allegations made on oath by the parties or the allegations made in the pleadings or in answer to interrogatories, or the contents of documents produced by either party. Order 14, Rule 5, empowers the Court to amend or frame additional issues, at any time, before passing decree, and in the present case, the additional issues are necessary for determining the matter in controversy, between the parties and there is no justification in rejecting the application of the petitioner.
(E) That, the word Necessary' in Order 14, Rule 5 states that additional issues, which are necessary for determining the matters in controversy, may be framed, at any time, before passing a decree and the stage, at which the issues are framed, is not relevant. Moreover the trial Court has not arrived at a finding that the said issues are not necessary for determining the matter in controversy, which is the only ground on which the application could have been rejected.
(F) That, the reason recorded by the trial Court, for rejecting the application of the petitioner, to the effect that if additional issues are framed the onus of proof will shift on the respondent No.2, is not in consonance with the relevant provisions of law. The ground of day-to-day hearing of the matter is also not a justifiable one as it does not touch upon the merits of the application of the petitioner. The trial Court has not arrived at a finding that the proposed issues do not arise in the matter, therefore the impugned order, having been passed without considering the relevant provisions of law in their proper perspective, deserves to be set aside, the and the petition may be allowed.
4.0 As against this Mr. Abhay Jain with Mr. Y.J. Trivedi, learned Counsel for respondent No.2 has submitted as under:
(a) That, Respondent No.2, who is a competitor and business rival of the petitioner, has been successful in obtaining the contract, therefore the petitioner has filed the above-mentioned Suit on 16.072001. Initially, in the trial Court, an injunction was granted in favour of the petitioner, which has now been vacated, as the petitioner has failed to prove his case that the technology is exclusive to it.
(b) That, a Special Leave Petition filed by the petitioner has been summarily rejected by the Apex Court on 16.03.2007, with directions that the trial Court may complete the hearing of the Suit within six months. Issues have been framed on 12.06.2007, and the examination-in-chief of the petitioner took place on 13.09.2007. The first witness of the petitioner was examined on 14.07.09, whereas the examination of two other witnesses of the petitioner is in progress, and it is at this stage, after about two years, the application for framing additional issues have been filed, with an intention of delaying the case.
(c) That, the trial Court has rightly rejected the application of the petitioner, as the issues proposed are already covered by the issues framed, and by proposing the additional issues, the petitioner is shifting the onus of proof on respondent No.2, which cannot be permitted at this belated stage. Moreover, the application filed by the petitioner does not mention that it is filed under any particular provision of law, therefore it has rightly been rejected.
(d) That, the petitioner did not file his application, at the relevant point of time, when defendant No.2 had filed its written statement and it is only after the filing of the written statement by respondents Nos. 1 and 3, that petitioner has filed the application at Exhibit-153 which shows that there is an intention to delay the matter on the part of the petitioner. The impugned order is just and proper and does not require to be interfered with by this Court, and the petition may be dismissed.
5.0 I have heard learned Counsel for the respective parties, perused the contents of the impugned order, and other material on record.
5.1 In order to properly appreciate the controversy between the parties, it would be fruitful to advert to the relevant provisions of law. Order 14, Rule 1 provides for framing of issues and reads as under:
1. Framing of Issues.- (1) Issues arise when a material proposition of fact or law is affirmed by the one party and denied by the other.
(2) Material propositions are those propositions of law or fact which a plaintiff must allege in order to show a right to sue or a defendant must allege in order to constitute his defence.
(3) Each material proposition affirmed by one party and denied by the other shall form the subject of a distinct issue.
(4) Issues are of two kinds:
(a) issues of fact,
(b) issues of law.
(5) At the first hearing of the suit the Court shall, after reading the plaint and the written statements, if any, and [after examination under rule 2 of Order X and after hearing the parties or their pleaders], ascertain upon what material propositions of fact or of law the parties are at variance, and shall thereupon proceed to frame and record the issues on which the right decision of the case appears to depend.
(6) Nothing in this rule requires the Court to frame and record issues where the defendant at the first hearing of the suit makes no defence.
5.2 Order 14, Rule 3 provides for the material from which issues may be framed, and reads as below:
3. Materials from which issues may be framed.- The Court may frame the issues from all or any of the following materials:-
(a) allegations, made on oath by the parties, or by any persons, present on their behalf, or made by the pleaders of such parties;
(b) allegations made in the pleadings or in answers to interrogatories delivered in the suit;
(c) the contents of documents produced by either party.
5.3 Order 14, Rule 5 relates to the power to amend and strike out issues and reads thus:
[5.
Power to amend and strike out issues.-
(1) The Court may at any time before passing a decree amend the issues or frame additional issues on such terms as it thinks fit, and all such amendments or additional issues as may be necessary for determining the matters in controversy between the parties shall be so made or framed.
(2) The Court may also, at any time before passing a decree, strike out any issues that appear to it to be wrongly framed or introduced.] 5.4 As is evident from the provision of Order 14, Rule 3, the Court may frame issues from allegations made on oath by the parties or the persons present on their behalf, allegations made in the pleadings or in answering to interrogatories and from the contents of documents produced by either party. The plaint and the written statement constitute the pleadings in a Suit and this is the first stage on which the divergent stands of the parties are placed before the Court. In view of the above provisions of law, it is incumbent upon the Court to examine at the first hearing of the parties, and after reading the plaint and written-statement, in order to precisely ascertain the propositions of law or assertions of facts on which the parties are at variance and to frame issues on the basis of the said divergent assertions and propositions, that emerge from the pleadings of parties, on such material propositions of facts or law, which are affirmed by one party and denied by the other.
5.5 From the above, it can be gathered that issues are required to be framed, in order to ascertain the scope of the real dispute between the parties and to narrow down the area of conflict to the points, where the two sides differ. As is evident from the provisions of Order 14, Rule 3, an issue framed by the Court can be based on the allegations or assertions made by the parties, in their respective pleadings.
5.6 Order 14, Rule 5 empowers the Court to amend, frame additional issues and strike out issues, in the course of trial of the Suit, at any time before passing a decree. The Court can, therefore, frame additional issues, which are necessary for determining the matter in controversy between the parties. The very essence and purpose of framing issues, is to highlight and narrow down, the real point of controversy between the parties, in order to enable the Court to adjudicate upon and pronounce judgment on the said issues. Sub-rule (1) of Rule 5, Order 14, provides that the Court may at any time before passing a decree amend the issues or frame additional issues on such terms as it thinks fit, and all such amendments or additional issues as may be necessary for determining the matters in controversy between the parties shall be so made or framed. The said rule contains two parts. The first part is enabling and leaves it to the discretion of the Court to amend issues or to frame additional issues, as the Court may deem fit. The word 'May' is, therefore, used in the first part of the Rule 5, Order 14. The second part of the said rule is mandatory and imperative, it requires the Court to amend or frame additional issues as may be necessary for determining matters in controversy between the parties and this is clear from the use of the word Shall in contrast to the word May .
5.7 Examining the impugned order in the background of the above-mentioned provisions of law, it is clear that the first ground on which the trial Court has rejected the application of the petitioner is that the Apex Court has directed that the matter be heard on a day to day basis. The second ground is that, in the opinion of the trial Court, most of the proposed issues are against respondent No.2 and the petitioner has tried to shift the onus on respondent No.2 and if the proposed issues are allowed, then, the onus to prove such issues would lie upon respondent No.2.
5.8 It is found that the trial Court has not rejected the application of the petitioner on the ground that the proposed issues do not arise at all, in the controversy between the parties. Insofar as the directions of the Supreme Court are concerned, the order dismissing Special Leave Petition filed by the petitioner dated 16.03.2007, directs the written statement to be filed within a period of two weeks and to complete the hearing of the case within six months, from the date of the order. Needless to say that the hearing of the matter has not been concluded within the stipulated period of time, therefore, to reject the application of the petitioner, on this ground, does not appear to be justifiable or in consonance with the relevant provisions of law.
5.9 The second ground on which the application has been rejected is that the onus to prove will shift to respondent No.2, which, according to the Court below, cannot be permitted. In the considered view of this Court, the provisions of Order 14, Rule 5 empower the Court to frame additional issues, at any stage, before passing of the decree, meaning thereby the stage at which the issues are framed is not relevant. What is of relevance is that the additional issues which arise from pleadings of parties are necessary to determine the controversy between them. The said provision of law also does not speak of shifting the burden of proof. It is trite law that a party making an assertion is burdened with the onus of proving it. In the considered opinion of this Court, the trial Court has committed error in passing the impugned order, which has been passed without keeping in mind the relevant provisions of law. More so as it is not mentioned in the impugned order that the proposed additional issues have the effect of altering the nature of the case, or do not arise at all, from the pleadings of the parties.
5.10 In the light of the provisions of law, as discussed herein above, the order of the trial Court is not sustainable in law and the interference of this Court is, necessitated.
11.0 For the aforestated reasons, the petition is partly-allowed. The impugned order dated 16.07.2009, passed by City Civil Court No.9, Ahmedabad in application at Exhibit-153 in Special Civil Suit No.3317 of 2001, is quashed and set aside. The matter is remanded to the trial Court, for fresh consideration, in accordance with law, after hearing the parties. Rule is made absolute to the aforesaid extent.
(SMT.
ABHILASHA KUMARI, J.) Umesh/ Top