RFA (OS) NO. 85/2007 Page 1 of 67 „Reportable‟ * IN THE HIGH COURT OF DELHI AT NEW DELHI + RFA (OS) No. 85/2007 Date of Decision : July 11, 2008 # M/S MAIDEN PHARMACEUTICALS LTD. .... Appellant ! Through: Mr. A.K. Verma, Advocate Mr. Inder Deep Singh, Advocate versus $ M/S WOCKHARDT LTD. .... Respondent ^ Through Mr. Ajay Sawhney, Advocate. % CORAM: HON'BLE MR. JUSTICE MUKUL MUDGAL HON'BLE MS. JUSTICE ARUNA SURESH 1. Whether the Reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes J U D G M E N T ARUNA SURESH, J. 1. M/s Wockhardt Ltd., the respondent in the present appeal, (hereinafter referred to as plaintiff) is a RFA (OS) NO. 85/2007 Page 2 of 67 company incorporated under the provisions of Indian Companies Act, 1956 and was incorporated on 8.7.1999 under the name of Wockhardt Pharmaceuticals Limited. The name of the company was changed on 28.12.1999 to M/s Wockhardt Limited, the present plaintiff. Plaintiff company is the leading manufacturer of pharmaceutical and medicinal preparations in India. Plaintiff is the owner of registered trademark “SPASMO-PROXYVON”. Over the years, the plaintiff had been supplying the medicines continuously in India and have acquired the reputation of being extremely safe and reliable drug by virtue of adherence to strict quality standards maintained by the plaintiff. The defendant is selling its product under the trademark “DEXOPHEN SPAS”. Plaintiff has no objection to the user of the said trademark but to the get up of the packaging in respect of the blister pack of the defendant along with identical blue coloured capsules which according to the plaintiff is deceptively similar to that of the plaintiff, and is in violation of the rights of RFA (OS) NO. 85/2007 Page 3 of 67 the plaintiff in its unregistered trademark to its blister packaging and is also infringing the copyright in its artistic work. Plaintiff sought following reliefs against the defendant:- “(i) For an order for perpetual injunction restraining the Defendant, its servants, retailers, stockists, distributors, representatives and agents from manufacturing, selling, offering for sale, stocking, advertising, directly or indirectly dealing in pharmaceutical preparations under the impugned blister packaging mark annexed as Annexure-B to the plaint or any other packaging mark/marks which are identical/colourable imitation of the Plaintiff‟s blister packaging mark annexed as Annexure-A to the plaint amounting to infringement of copyright. (ii) For an order for perpetual injunction restraining the Defendant, its servants, retailers, stockists, distributors, representatives and agents from manufacturing selling, offering for sale, stocking, advertising, directly or indirectly dealing in pharmaceutical preparations under the impugned packaging mark and blue coloured capsules annexed as Annexure B to the plaint or any other packaging mark and/or colour of capsules which RFA (OS) NO. 85/2007 Page 4 of 67 are identical or deceptively similar to the plaintiff‟s blister packaging mark and blue coloured capsules annexed as Annexure-A to the plaint amounting to passing off its business and goods as the business and goods of the plaintiff. (iii) That the defendant be directed to disclose on oath and by way of filing unimpeachable documentary evidence the details about the permission, if any, it has applied for and has obtained from the office of the concerned Drug Controller in regard to the manufacture and sale of its impugned pharmaceutical preparations as well as all documents concerning the production and sale of the same including the names and addresses of its stockists, dealers, representatives, agents, etc. alongwith the cost and quantity of the infringing products sold by the defendant to the said parties and the details of its various movable and immovable assets including its bank. (iv) For an order for rendition of accounts of profits illegally earned by the Defendant by manufacturing and selling pharmaceutical preparations‟ under its impugned deceptive blister packaging annexed as Annexure-B to the plaint and for a decree for the sum so ascertained. (v) For an order for delivery for purposes of destruction of all impugned wrappers, blister packs, blue coloured capsules, lables, dies and any other infringing copies or RFA (OS) NO. 85/2007 Page 5 of 67 media used by the Defendant in pursuit of its illegal activities. (vi) For costs in the proceedings. (vii) For such further relief/reliefs to which the Plaintiff may be entitled looking into the facts and circumstances of the case.” 2. Plaintiff valued the suit for purposes of court fees and jurisdiction as follows:- (a) For an order of perpetual injunction at Rs. 200/- for court fees and jurisdiction and the requisite court fees of Rs. 20/- has been affixed. (b) For perpetual injunction restraining passing off, suit is valued at Rs. 200/- for the purpose of court fees and jurisdiction and the requisite court fees of Rs. 20/- has been affixed. (c) For relief of rendition of accounts of profits, illegally earned by the defendant, the plaintiff valued the suit at Rs. 1000/- for purposes of court fees and paid requisite amount of Rs. 150/- and for purposes of jurisdiction the plaintiff valued the suit at Rs. 20 lacs as the plaintiff estimated that such an amount would be founded due to RFA (OS) NO. 85/2007 Page 6 of 67 the plaintiff on accounts being rendered and plaintiff undertook to pay such additional court fee as would be found due when the actual amount is rendered and ascertained by the Court. (d) For an order for delivery, for purposes of destruction of wrappers and labels etc/ the plaintiff valued the suit at Rs. 200/- for purposes of court fee and jurisdiction and paid requisite court of fees Rs. 20/-. (e) For an order directing the defendant to disclose on oath all documents pertaining to the permission to manufacture and/or sell its impugned pharmaceutical preparations along with the details of its stockists/dealers/agents/distributors/retailers etc. plaintiff assessed the valuation for purposes of court fees and jurisdiction at Rs. 200/- and paid requisite court fee of Rs. 20/-. 3. The total jurisdictional value has been assessed at Rs. 20,00800/- upon which a court fee of Rs. 230/- has been affixed by the plaintiff. RFA (OS) NO. 85/2007 Page 7 of 67 4. The valuation of the suit for purposes of court fees and jurisdiction for rendition of accounts has been challenged by the defendant during the course of arguments in the appeal and the only issue now left to be determined by us is whether the suit has been properly valued by the plaintiff for purposes of court fees and jurisdiction for the relief of rendition of accounts and whether plaintiff is required to pay the court fees on the valuation of the suit for purposes of jurisdiction which has been valued at Rs. 20 lacs. 5. Mr. Ajay Sawhney, counsel for the plaintiff, submitted that he has valued the suit for purposes of relief of rendition of accounts separately in view of the judgment of the Division Bench of this Court in Fenner India Ltd. v. Salbros Enterprises Pvt. Ltd. – 67 (1997) DLT 673, PM Diesels Ltd. v. Patel Field Marshal Industries – 1998 PTC 260 and unreported decision RFA (OS) NO. 85/2007 Page 8 of 67 in RFA (OS) No. 62/1998, Wockhardt Veterinary Ltd. v. M/s. Raj Medicos & Anr. and has urged that by virtue of rule 4 framed under Section 9 of the Suits Valuation Act (hereinafter referred to as Act), the plaintiff has the right to value its suit separately for the purposes of court fees and jurisdiction and therefore, according to him, the valuation of the suit for purposes of court fees and jurisdiction for relief claimed in para 31(c) of the plaint is proper and correct. He has referred to the following judgments of this Court as well as of the Apex Court:- 1. Tata Oil Mills Co. Ltd. v. Hansa Chemical Pharmacy – PTC (Supply. 1) 438 (Del), ILR (1979) Vol. II Del. 236. 2. Globe Super Parts v. Domestic Appliances & Anr. – 1981 (1) PTC 78 (Del). 3. Dabur (S.K. Burman) v. Vikas Pharma – 1983 (3) PTC 169 (Del). 4. Commercial Aviation & Travel Co. (Inc.) & Ors. v. Vimla Panna Lal – AIR 1986 Delhi 439. 5. Abdul Hamid Shamsi v. Abdul Majid & Ors. – AIR 1988 SC 1150. RFA (OS) NO. 85/2007 Page 9 of 67 6. Commercial Aviation & Travel Co. (Inc.) & Ors. v. Vimla Pannalal – MANU/SC/0299/1988, AIR 1988 SC 1636. 7. Eastman Kodak Co. v. M.R. Electronics & Ors. – 1995 (15) PTC 146 (Del). 8. Hindustan Pencils Ltd. v. Swaroop Singh – MANU/DE/ 1004/1994. 9. Fenner India Ltd. v. Salbros Enterprises Pvt. Ltd. II AD (Del) 201, MANU/DE/0416/1995. 10. Fenner India Ltd. v. Salbros Enterprises Pvt. Ltd. – 1997 (17) PTC 447 (DB), 67 (1997) DLT 673. 11. Frank Educational Aids Pvt. Ltd. v. Fair Deal Marketing – 1997 (17) PTC 492. 12. PM Diesels Ltd. v. Patel Field Marshal Industries – 1998 PTC (18) 260 (DB). 13. Wockhardt Veterinary Ltd. v. M/s. Raj Medicos & Anr. – MANU/DE/0006/1998. 14. Wockhardt Veterinary Ltd. v. M/s. Raj Medicos & Anr. in RFA (OS) No. 62/1998 decided on 21.5.1998. 15. Hindustan Machines v. Love Sales in CS (OS) No. 414/2001 decided on 24.1.2002. 16. Dev Pharmacy v. Nova International – 2003 (27) PTC 395. 17. Pfizer Products Inc. v. B.L. & Co. & Ors. – 2007 (34) PTC 294 (Del). RFA (OS) NO. 85/2007 Page 10 of 67 18. Okasa Pharma Ltd. v. Lilly Icos – 2007 (35) PTC 373 (Del) (DB).” 6. Learned counsel for the defendant/appellant Sh. A.K. Verma while controverting the submissions of the learned counsel for the plaintiff/respondent has averred that by virtue of Section 8 of the Act the valuation of the suits for purposes of court fees and jurisdiction has to be the same and the plaintiff cannot arbitrarily value the suit for purposes of jurisdiction to chose the forum for filing his suit in a Court and undervalue the suit for purposes of court fees so as to confer jurisdiction in this Court without paying the requisite court fees and therefore according to him the plaint should have been rejected by the learned Single Judge. It is further submitted that the valuation for relief of rendition of accounts for payment of court fees under Section 7(iv) of the Court Fees Act determines the valuation for purposes of jurisdiction as it has to be the same. Therefore, either the plaintiff should pay the deficient RFA (OS) NO. 85/2007 Page 11 of 67 court fees on the valuation for the purposes of jurisdiction or plaint is liable to be returned back to be presented before the District Judge who has the pecuniary jurisdiction to entertain the suit. 7. Section 7 of the Court Fees Act regulates the computation of court fees payable in certain suits. Section 7(iv) so far as relevant for our purposes reads as follows: “for accounts.--(f) for accounts— according to the amount at which the relief sought is valued in the plaint or memorandum of appeal; In all such suits the plaintiff shall state the amount at which he values the relief sought;” 8. As per Section 8 of the Act the value of the suit as determinable for the computation of court fees and the value for purposes of jurisdiction shall be the same. However, Section 9 of the Act acts as a proviso to Section 8 as it empowers the High Court to frame rules RFA (OS) NO. 85/2007 Page 12 of 67 for determination of value of certain suits, if it feels that the valuation as fixed under Section 7 of the Court Fees Act in respect of suits not covered under paragraphs v, vi & x clause (d) of Section 7 of the Act does not admit of being satisfactorily valued. Thus it is clear that valuation of suit for rendition of accounts for purposes of court fees and jurisdiction has to be the same, subject to any rules framed by the High Court regulating valuation for purposes of jurisdiction in exercise of its power under Section 9 of the Act. It is implicit that paragraph 7(iv) requires the plaintiff himself to value the relief he seeks. The only issue for consideration remains; whether the plaintiff has a right to place any valuation that he likes as this paragraph does not itself impose any restriction or condition as regards the valuation by the plaintiff. 9. In Sheila Devi and Ors. v. Kishan Lal Kalra and Ors. – ILR 1974 Delhi 491, where a reference made to the Full Bench of this Court related to whether the RFA (OS) NO. 85/2007 Page 13 of 67 Court has power to interfere in the plaintiff‟s valuation of relief for the purposes of court fees under Section 7(iv) of the Court Fees Act and if so when would such interference be justified and what should be the criterion for redetermination of the value, it was observed: “(26) As pointed out in paragraph 15 of the judgment in the case of 5. Rm. Ar. S. Sp. Sathappa Chettiar (supra), (1) the effect of the provision in Section 8 of the Suits Valuation Act is “to make the value for the purposes of jurisdiction dependent upon the value as determinable for computation of court-fees”, and “the computation of court fees falling under Section 7(iv) of the Court Fees Act depends upon the valuation that the plaintiff makes in respect of his claim”. Also, “once the plaintiff exercises his option and values his claim for the purpose of court-fees, that determines the value for jurisdiction” and “not vice versa”. In other words, the value for the purpose of court-fees under Section 7(iv) of the Court-fees Act should be fixed first, and then by virtue of Section 8 of the Suits Valuation Act the same value would be the value for the purpose of jurisdiction. However, if there are rules made by any High Court under Section 9 of the Suits RFA (OS) NO. 85/2007 Page 14 of 67 Valuation Act and the same are applicable, the valuation for the purpose of court-fees under Section 7(iv) of the Court-fees Act will have to be made according to such rules. So far as the rules made, by the Punjab High Court are concerned, it has to be noted that Rules 3 and 4 set out above contemplate separation valuation for the purpose of court- fees and for the purpose of jurisdiction. So, if the said rules are applicable, the valuation for purpose of court-fees would be separate from the valuation for the purpose of jurisdiction as provided in the said rules. It has also to be noted that under Rule 4, in the case of suits to which it applies the value for the purpose of court-fees is to be as determined by the Court-fees Act. That means that as regards suits falling under Section 7(iv) of the Court-fees Act, the value for the purposes of court-fee would be the value as fixed by the plaintiff. The value for the purpose of jurisdiction would be the value fixed by the plaintiff in the plaint “subject to determination by the Court at any stage of the trial”. In other words, if Rule 4 applies, the value for the purpose of court-fee would be the value as fixed by the plaintiff in the plaint and the same cannot be interfered with by the Court, while the Value for the purpose of jurisdiction would normally be the value fixed by the plaintiff in the RFA (OS) NO. 85/2007 Page 15 of 67 plaint subject, however, to determination by the Court at any stage of the trial. This is the position that emerges on the view taken by us as regards the scope and effect of paragraph (iv) of Section 7 of the Court-fees Act, reading the said paragraph along with Sections 8 and 9 and the Rules framed under Section 9 of the Suits Valuation Act in case they are applicable.” 10. High Court of Judicature at Lahore had framed rules under Section 9 of the Act, 1887 with regard to the manner of determination of the value of certain types of suits for the twin purposes of court fees and jurisdiction. These rules were made applicable in the High Court of Delhi by virtue of Section 7 of the Delhi High Court Act, 1966. Proviso to Section 7 of the Delhi High Court Act envisaged that the rules with respect to practice and procedure as applicable to the High Court of Punjab would remain applicable to High Court of Delhi until they are varied or revoked by rules or orders made by High Court of Delhi. RFA (OS) NO. 85/2007 Page 16 of 67 11. In Tata Oil Mills Co. Ltd. (supra-1) the applicability of Rules 3 & 4 as framed under Section 9 of the Act by the High Court of Judicature at Lahore embodied in Chapter III-C of Rules and Orders (Volume I) of the Punjab High Court to the High Court of Delhi came into consideration and it was observed by this court that by virtue of Section 7 of the Delhi High Court Act the said rules were made applicable to the Delhi High Court as well as to the District Courts, Delhi. It was further observed that the valuation placed by the plaintiff with regard to the jurisdiction in a suit different from the valuation of the suit for purposes of court fees governed under Section 7(iv) of the Court Fees Act are in consonance with the said rules. However, the question as to the payment of court fees on the basis of valuation fixed for purposes of jurisdiction was not under consideration before the court in the said case. 12. There is no dispute that the rules contained in Punjab Rules and Orders are applicable to the Union Territory RFA (OS) NO. 85/2007 Page 17 of 67 of Delhi and are enforceable by virtue of Section 7 of the Delhi High Court Act and these rules have been considered in various judgments of this Court as being applicable to the Courts in the Union Territory of Delhi on the original side. 13. Delhi High Court Original Side Rules 1967 were framed by the Delhi High Court in exercise of its powers conferred by Sections 122 and 129 of the Code of Civil Procedure, 1908 and Section 7 of the Delhi High Court Act, 1966 and all other powers enabling it to make the rules. These rules govern the practice and procedure for the exercise of its ordinary original civil jurisdiction. After the enforcement of these rules, the Courts functioning on its original civil jurisdiction had to follow the practice and procedure as laid down in these rules. Chapter 3 speaks of valuation of suits. Chapter 3 Part (C) lays down rules regulating the manner of determining the value of suits for purposes specified in Section 9 of the Act, 1887. These rules were made by RFA (OS) NO. 85/2007 Page 18 of 67 the High Court under the powers conferred under Section 9 of the Act and all other powers in that behalf, for determining for the purposes specified therein, the value of the subject matter of certain classes of suits which do not admit of being satisfactorily valued and for the treatment of such classes of suits as if their subject matter were of the value in the manner stated in the rules so framed. Rules 3 & 4 are relevant to ascertain whether the plaintiff can value the suit for rendition of accounts separately for court fees and for jurisdiction. Rules 3 & 4 read:- “3. Suits in which the plaintiff in the plaint asks for accounts only not being: (i) Suits to recover the amount which may be found due to the plaintiff on taking unsettled accounts between him and the defendant. (ii) Suits of either of the kinds described in Order XX, Rule 13 of the Code of Civil Procedure. Value—(a) For the purposes of the Rs. Court-fees Act, 1887 …………..200 (b) For the purposes of the Suits Valuation Act, 1887, and the Punjab Courts Act, 1918 …………..1,000 4. (i) Suits in which plaintiff in the plaint seeks to recover the amount which RFA (OS) NO. 85/2007 Page 19 of 67 may be found due to the plaintiff in taking unsettled accounts between him and the defendant. (ii) Suits of either of the kinds described in Order XX, Rule 13 of the Code of Civil Procedure: (a) Value for the purpose (a) As determined of Court-fee by the Court- fees Act, 1870. (a) Value for the purpose (b) For the of jurisdiction purpose of the Suits Valuation Act, 1887, and the Punjab Courts Act, 1918, as valued by the plaintiff in the plaint, subject to determination by the Court at any stage of the trial.” 14. Rules 3 & 4 are identical to the Rules 3 & 4 as contained in Chapter III-C of the Rules and Orders (Vol. I) of the Punjab High Court were made applicable to the Union Territory of Delhi by virtue of Section 7 of the Delhi High Court Act. RFA (OS) NO. 85/2007 Page 20 of 67 15. Since the High Court of Delhi has framed rules under Section 9 of the Act empowering the plaintiff to value its suit for the purposes of court fees as determined by the Court Fees Act and to value for purposes of jurisdiction as valued by the plaintiff in the plaint separately. Valuation for purposes of jurisdiction so fixed by the plaintiff in the plaint is subject to determination by the Court at any stage of the trial. 16. It is pertinent to mention here that in regard to suits for accounts there is divergence of judicial opinions as to whether the plaintiff is entitled to put any valuation he likes. These opinions are not uniform as in some of the cases it has been held that the plaintiff is free to give his own valuation and in some other cases it has been held that the plaintiff is not entitled to give an arbitrary valuation without having any link or connection with the relief in question. RFA (OS) NO. 85/2007 Page 21 of 67 17. Learned counsel for the plaintiff has referred to Fenner India Ltd. case (supra-9) while submitting that suit for rendition of accounts is governed by Rule 3 as trademark, copyright and patent cases do not fall in any of the two categories contemplated by Rule 4. However, this judgment was set aside by the Division Bench in FAO No. 204/95 (Fenner India Ltd. case (supra-10)) vide its order dated 9.4.1997 and it was observed that the nature of passing off action is such that the relief sought can only be for rendition of accounts of profits made consequent upon the breach of copyright and therefore, such suits are governed by rule 4 framed by the High Court and the plaintiff can value the suit for the purposes of jurisdiction as the plaintiff wishes it to be valued. Therefore, this judgment is of no help to the case of the plaintiff nor it helps the Court in reaching to a just conclusion, if the plaintiff has a right to value the suit for purposes of jurisdiction separately other than the valuation for purposes of court fees. RFA (OS) NO. 85/2007 Page 22 of 67 18. In Abdul Hamid Shamsi (supra-5) the Supreme Court while interpreting Section 7(iv)(f) of the Court Fees Act and Section 9 of the Act observed:- “7. It is true that in a suit for accounts the correct amount payable by one party to the other can be ascertained only when the accounts are examined and it is not possible to give an accurate valuation of the claim at the inception of the suit. The plaintiff is, therefore, allowed to give his own tentative