IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 08TH DAY OF MAY, 2019 BEFORE THE HON’BLE MR.JUSTICE N.K. SUDHINDRARAO M.F.A. No.9532 OF 2018 (CPC) BETWEEN:
1. M/s. Indus Steel & Alloys Ltd. A Company incorporated under Companies Act, 1956 Having its Registered Office At No.163/B, 2nd Floor, Kanakapura Road, Bengaluru-560004 Represented by its Director S.S.Srikanth S/o Mr.S.R.Sathananathan 2. M/s.Indus TMT Industries Limited (Earlier Known as Apple Rolling Mills Pvt. Ltd.) A Company incorporated Under the Companies Act, 1956 Having its Registered Office At No.164/1, 1st Floor, Sakamma Garden, Kanakapura road, Bengaluru-560004 Represented by its Authorized Representative C Raju 3. Sri S.R.Sathanantham S/o late S.Rajagopal Setty Aged about 78 years, Director, M/s. Indus Steel And Alloys Limited Old No.12, New No.23 Govindappanaicken Street Chennai-600001 Rep. by SPA Holder of Appellant No.4 4. Sri S.S.Srikanth S/o S.R.Sathanantham Aged about 43 years, Director, M/s. Indus Steel And Alloys Limited, Old No.12, New No.23 Govindappanaicken Street, Chennai-600001 Presently at D-801, Mantri Pride Apartment, Mountain Road, Jayanagar I Block, Behind Madhavan Park, Bangalore-560011 5. Sri B.Vishweshwara Adiga S/o Siddalingappa, Aged about 64 years, R/o No.112, RLF Residency, Kothanur Dinne, Bengaluru-560076 Rep. by SPA Holder of Appellant No.4 ... Appellants (By Sri Poonacha C.M., Advocate) AND:
1. Mr.D.Venkatesh Guptha S/o ReddappaSetty, Aged about 71 years, R/at No.461, Ground Floor, 21st Cross, New Diagnol Road, 3rd Block, Jayanagar, Bengaluru-560011 2. The Registrar of Companies (ROC) ‘E’ Wing, 2nd Floor, Kendriya Sadan, Koramangala, Bengaluru-560034 3. The Deputy General Manager IDBI Bank Ltd.
Indian Red Cross Society Building, 1, Red Cross Road, P.B.No.231 New Delhi-110001 ...Respondents (By Sri V.Sanjay Krishna, Advocate for R1, Notice to R2 and R3 are dispensed with) This MFA is filed Under Order 43 Rule 1(r) of the CPC, against the order dated 03.10.2017 passed on I.A.No.1 in O.S.No.6669/2017 on the file of the Principal City Civil and Sessions Judge, Bengaluru, issuing exparte temporary injunction order on I.A.No.1 and notice on I.A.No.1 and suit summons to defendants.
This MFA coming on for admission, this day, the Court delivered the following:
J U D G M E N T With the consent of learned counsel for the parties, the matter is taken up for final disposal.
2. This Miscellaneous First Appeal filed under Order 43 Rule 1(r) of the Code of Civil Procedure is directed against the order passed by the learned Principal City Civil and Sessions Judge, Bengaluru, in O.S.No.6669/2017 dated 03.10.2017 on the application filed by the plaintiff numbered as I.A.No.1.
3. In order to avoid confusion and overlappings, the parties are addressed in accordance with their ranking as held before the trial court.
4. Basically a suit was filed by the plaintiff for permanent injunction to restrain defendants No. 4 to 7 and the persons claiming under them from diverting the business of M/s Indus Steel and Alloys Ltd., and to carry on with the business in the name and style of M/s Indus TMT Industries Ltd., without ascertaining the fair market value of the suit schedule property in accordance with law and also the prayer as sought for in the plaint.
5. The plaintiff is one Mr. D Venkatesh Guptha and there are seven defendants. The relief urged against the defendants is as stated above. Learned Principal City Civil and Sessions Judge, Bengaluru, on 3.10.2017 after perusing the records and hearing the learned counsel for the plaintiff passed an order on I.A.No.1 therein and granted exparte temporary injunction restraining the defendants No.4 to 7 and the persons claiming under them from dealing with the name “INDUS” and from using the land and building, plant and machinery and other assets connected to the said organization. Exparte injunction was granted till next date of hearing. Learned trial Judge ordered for temporary injunction in the following manner:
“Issue exparte temporary injunction on I.A.No.1 and notice of I.A.1 and II and suit summons to defendants.”
6. The date of order passed by the learned trial judge is 3.10.2017 regard being had to the fact that the suit was filed on the same day.
7. Learned counsel for appellants Sri. C.M. Poonacha would submit that appellants hold an agreement in the form of assignment deed for using the Trade mark and connected intellectual rights. The appeal is preferred by defendant Nos.3 to 7. The order passed by the learned trial judge dated 3.10.2017 is being questioned on two limbs i.e., substantive and procedural aspects 8. Learned counsel Sri. Poonachha, for appellants as well submits that he is not alone, the other defendants are also joined him in presenting the appeal. As the order dated 3.10.2017 is affecting larger interest of the Concern, he would submit that the learned trial Judge has not assigned reasons for granting interim order on 3.10.2017 nor dispensing with the notice to any of the appellants which includes first defendant.
9. Learned counsel would further submit that having granted an order of exparte injunction, learned trial Judge did not adjudicate the matter by hearing both parties within the stipulated period of 30 days. Learned counsel would further submit that the injunction order should have been treated as nonest after the expiry of 30 days by virtue of the principles formulated by the Hon’ble Apex Court. It was also submitted that the plaintiff neither had prima facie case nor balance of convenience in his favour to get the order of injunction. There was no necessity for granting the order as the interest of the plaintiff and defendants was in the form of inseparable mode, particularly, defendant No.3, who has larger interest along with other defendants. He further submits that the plaintiff is bent upon in dragging the defendant in one or the other proceedings. As a matter of fact, Misc. No.25111/2016 was filed against the order that was passed with regard to compromise and disposing of the matter accordingly between the parties, and the said petition is stated to be still pending of course, however, without any exparte orders or interim order. He would also submit that the defendant filed an application for rejecting the plaint under Order 7 Rule 11 of C.P.C. in respect of non disclosure of cause of action. However, the said application came to be rejected on 24.9.2018. It is stated that the defendants consist of present lot or group filed CRP No.509/2018 challenging the said order which also stated to be pending having regard to the fact that no interim order are said to be in force against either of the parties.
10. Learned counsel Sri. Sanjaya Krishna for the plaintiff respondent No.1 would submit that when his interest was at stake he filed a suit for injunction. He would further submit that the defendant No.3 and others, who are parties in appeal were acting against the paramount interest of the entire organization and depriving the plaintiff of his rights and he was compelled by the circumstances to file the present suit in O.S.No.6669/2017. He would further submit that, it was the trial court which passed the orders on 3.10.2017 and after service of process the defendants entered appearance on 25.10.2017.
11. Learned counsel for the respondent No.1/plaintiff would further submit that there was no hiccups for disposing of the application. But for the reasons and contingencies such as bifurcation of courts, change of jurisdiction, classification of the case occurred at regular intervals etc., propelled for not disposing of the matter expeditiously, more particularly within the mandated period.
12. Learned counsel for the plaintiff would further submit that he has got the injunction order only to prevent the defendants from misusing the trade mark name, assets, plant and machinery and other belongings of the Concern.
13. Learned counsel for the appellants would submit that Trial Judge did not dispose of the application for injunction by hearing both the parties within the stipulated period as laid down in the case of A Venkatasubbaiah Naidu Vs. S Chellappan and Others, reported in (2000)7 Supreme Court Cases, 695.
14. Learned counsel for the appellant/defendants would submit that the order dated 3.10.2017 is literally preventing the larger interest of the Concern. The result of the said order is stated to be a grinding halt of the business due to non-working of the plant and machinery. Consequently, the machineries are undergoing depreciation without any output. The question that would arise at the stage of hearing is that the suit was filed on 3.10.2017 along with I.A.No.1 seeking grant of temporary injunction against the defendants stated above. The order was passed on 3.10.2017. However, the application for vacating injunction along with written statement were filed by the defendants on 25.10.2017. If that is taken into consideration, it was the bounden duty on the part of the Court to dispose of the application within the mandated period, but that did not happen. Of course, it is seen that there has been several ups and down in the proceedings that paved the way for non disposal of the application.
15. Sri. M Poonacha, learned counsel for the appellants would submit, earlier Writ Petition Nos.55338-342/2017 were filed before this Court on 3.12.2017, wherein the appellants/defendants urged with regard to the pendency of the application or its non-disposal within the mandated period as held by the Hon’ble Apex Court in Challappan’s case. However, the petitions came to be disposed of with a direction to dispose of the application filed under Order XXXIX Rule 1 and 2 within the time frame as indicated in the Code of Civil Procedure.
16. It was also brought to my notice that the Court was sandwiched one application under Order VII rule 11 of C.P.C. and transferred all cases on account of change of jurisdiction and the related facts. Having regard to the facts and circumstances of the case, learned counsel for the defendants/appellants relied on the decision reported in 2018 SCC Online Karnataka 626, in addition to Chellappan’s case.
17. Incidentally, learned counsel for the plaintiff also relied upon Chellappan’s case which is relied upon by the learned counsel for the defendants/appellants to submit that the court should have disposed of the application within the mandated period. However, the said submission was resisted by the learned counsel for the plaintiff claiming that there was no occasion for procrastination of the proceedings at the instance of the Court. The effect of the order is that the plaintiff holds the order against the defendants and others from using the trade mark, plant and machinery relating to Indus Steel and Alloys Ltd., 18. Learned counsel for the plaintiff would submit that if the injunction order is vacated, the result would be that the defendants will start manufacturing process by using the name, trade mark and other assets connected to the Concern, in which event, it amounts to disposal of the suit without analyzing the merits.
19. It is also the grievance of the defendants that if the present order is allowed to continue, it would affect the interest of the entire Concern and it is a punishment without trial for no fault of the defendants.
20. Insofar as grant of injunction under Order XXXIX Rule 1 and 2 of CPC is concerned, it is the domain of the trial court in deciding the application whether there is prima-facie case, balance of convenience and hardship that are going to be caused to either of the parties in granting or refusing temporary injunction. The yardstick is not on the alternative basis of the said factors. On the other hand, the court has to satisfy the presence of the said factors. It is not the case that the entire pleadings are to be cross-examined before passing the order. But, there should be a mention as to need and justifiable and compelling circumstances on the basis of the documents and the pleadings for granting interlocutory order of temporary injunction. Yes, there are several factors that dominated which are said to have been crept in the middle and the matter was not disposed of. The question is not what prevented or interrupted, the process should go on and the ends of justice must be the object, whether though an order is in favour or against the parties.
21. The suit is filed on 3.10.2017 and order was passed on the same day and the same was in force till next date of hearing or until further orders. However, it appears that the matter was advanced and written statement along with objections were filed on 25.10.2017. It is not the question that how many Judges or courts or jurisdiction are changed. It is not the question of successor putting the responsibility on the predecessor or the predecessor transferring the responsibility to the Successor.
22. It is to be borne in mind that whether the Presiding Officer or succeeding Officer of the first court or subsequent court or newly constituted court or designated court or special court or names would change but the issues remain consistent and it was up to them to discharge their duties without waiting for or relying on the reasons aforesaid.
23. The direction issued by this Court in W.P.Nos.55338- 342/2017 was also not considered. In totality, the application- I.A.No.1 filed under Order XXXIX Rule 1 and 2 did not get any light of adjudication before the trial court. However, it is high time for the trial court and now onwards, it shall get alerted about its responsibility and dispose of the application better later than never and avoid the effect of miscarriage of justice would occur.
24. Insofar as the non-disposal of the application and the effects of such inaction is left to the administrative side of this Court. However, this court is bound to go ahead for disposal of the case as the courts are running Summer vacation and re- opening on 27.5.2019.
25. Learned counsel for both parties submit that arguments were heard for several reasons and the matter was posted for orders.
26. In the over all circumstances of the case, the trial court shall dispose of the matter within a period of 10 days from reopening day of the courts i.e., on 27.5.2019 without seeking any request for further extension of time considering the nature and circumstances of the case.
27. Accordingly, the appeal is disposed of with a direction to the trial court to dispose of the application within a period of 10 days from the reopening day of the Courts i.e., 27.05.2019. However, the injunction order granted shall continue till disposal of the said application.
In case of non-disposal of the case within the said period i.e., 06.06.2019, either seeking adjournment by the plaintiff or the defendants, the order dated 03.10.2017 shall come to an end and the accountability shall be on the trial court.
Sd/-
JUDGE Psg