IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF JULY 2019 BEFORE THE HON'BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY R.F.A.No.708 OF 2006 BETWEEN: 1. Ramanna, S/o. late Channapillaiah, Aged about 63 years, Residing at Shettigowdanadoddi Village, Hamlet of Muddapura Karenahalli, Bidadi Hobli, Ramanagaram Taluk, Bengaluru Rural District. 2. Hanumakka, W/o. Sri Ramanna, Aged about 58 years, Residing at the above address with The 1st appellant. ...Appellants (By Sri.R. Narayana, Advocate and Sri H.R. Lakshman Reddy, Advocate) AND: Chaluvaiah, S/o. Doddaiah, Aged about 63 years, Residing at Shettigowdanadoddi Village, RFA.No.708/2006 2 Hamlet of Muddapura Karenahalli, Bidadi Hobli, Ramanagara Taluk, Bengaluru Rural District - 562 109. ...Respondent (By Smt. M.B. Sindhu Shastry, Advocate for Sri N. Subba Shastry, Advocate) **** This Regular First Appeal is filed under Order 41 Rule 1 R/w Section 96 of the Code of Civil Procedure, 1908, against the judgment and decree dated:07.01.2006 passed in O.S.No.195/2002 on the file of the Principal Civil Judge (Sr.Dn), Ramanagaram, partly decreeing the suit for recovery of money. This Regular First Appeal coming on for Hearing this day, the Court delivered the following: JUDGMENT It is the defendants' appeal. The present respondent as a plaintiff had instituted a suit against the present appellants arraigning them as defendants in O.S.No.195/2002, in the Court of the Principal Civil Judge (Senior Division) at Ramanagara, Bengaluru Rural District, (hereinafter for brevity referred to as `trial Court'), for recovery of a sum of `1,96,500/- (Rupees One Lakh Ninety Six Thousand Five Hundred Only), with RFA.No.708/2006 future interest at the rate of 2% per month on a sum of `1,00,000/-. After contest, the said suit came to be decreed by the judgment of the trial Court dated 07.01.2006. It is against the said judgment and decree the defendants have preferred this appeal. 2. The summary of the case of the plaintiff in the Court below is that the defendant No.1 is the husband of defendant No.2. Defendant No.1 borrowed a sum of `1,00,000/- from the plaintiff on 06.11.1998 in the presence of the witnesses for their family necessity and also for education expenses of their daughters. They executed on that day an agreement agreeing to repay the said amount with interest at the rate of 2% per month. The period for repayment of money was for four years and in that regard, the defendants hypothecated the suit property as security. Inspite of several demands and issuance of legal notice, the defendants RFA.No.708/2006 failed to repay the loan amount, as such, the plaintiff was constrained to institute the suit. 3. In response to the summons served upon them, the defendants appeared through their counsel and filed their written statement where they denied all the plaint averments. They denied that they had borrowed a sum of `1,00,000/- from the plaintiff on 06.11.1998 as loan. On the other hand, the defendants contended that their daughters are already married, as such, there was no necessity for them to borrow any amount towards their education expenses. The defendants also denied that they had executed any Hypothecation Agreement in favour of the plaintiff. On the other hand, they have stated that on 04.06.1998 the defendant No.1 had sold 24 guntas of land in Sy.No.67/2, situated in Muddapurakarenahalli Village, Bidadi Hobli, Ramanagaram Taluk, to the plaintiff. Taking undue RFA.No.708/2006 advantage of the said transaction, the plaintiff had fabricated the agreement dated 06.11.1998. They further stated that they are in no way liable to pay any amount to the plaintiff as alleged. 4. Based on the pleadings of the parties, the trial Court framed the following issues: 1. Does the plaintiff prove that the defendants borrowed amount as alleged? 2. Whether the plaintiff is entitled for suit claim? 3. What Order or Decree? The plaintiff got himself examined as PW-1 and got examined Sri Chaluvaiah, Sri K.V. Thimmaiah, Sri K.T. Thimmaiah and Sri B.S.Krishna Murthy in his support as PWs-2, 3 and 4 respectively. He got marked the documents from Exs.P-1 to P-4. Defendant No.1 got himself examined as D.W.1 and certified copy of the RFA.No.708/2006 Sale Deed dated 04.06.1998 was marked as Ex.D-1 from the defendents' side. After hearing for both side, the trial Court by its impugned judgment and decree dated 07.01.2006 answered issue No.1 in the affirmative and issue No.2 partly in the affirmative and partly decreed the suit holding that the defendants shall pay the plaintiff a sum of `1,96,250/- (Rupees One Lakh Ninety Six Thousand Two Hundred Fifty Only) with interest at the rate of 6% per annum on a sum of `.1,00,000/- from the date of the suit till the date of realisation. It is against the said judgment and decree the defendants have preferred this appeal. 5. Lower Court records were called for and the same are placed before this Court. RFA.No.708/2006 6. Heard the arguments of the learned counsel from both side and perused the materials placed before this Court. 7. For the sake of convenience, the parties would be referred to as per their ranks before the trial Court. 8. The learned counsel for the appellants in his argument submitted that Ex.P-1 though is an unregistered document, still, a father cannot alienate or hypothecate minors' property. As such, the Agreement of Hypothecation at Ex.P-1 would not hold good. He further submitted that the plaintiff not taking any action for the alleged non-payment of interest for a period of nearly four years would also go to show the conduct of the plaintiff and creates a doubt in his case. He also stated that the suit is barred by limitation which the trial Court has failed to consider in its proper perspective. RFA.No.708/2006 9. Learned counsel for the respondent/plaintiff in her argument submitted that the defendants though have denied the execution of the Agreement at Ex.P-1, but, the evidence of PW-1 to PW-4, among them, PWs.2 to 4 are the witnesses to the execution of the agreement by the defendants, clearly proves the execution of the Agreement at Ex.P-1 by the defendants. She further submits that the Agreement in Ex.P-1 is an agreement creating charge against the property mentioned therein, however, since it evidences the loan transaction, the said agreement, which is unregistered, can be relied upon for its collateral purpose for proving the loan transaction. In her support, she relied upon several judgments of Hon'ble Apex Court and Coordinate Benches of this Court which would be referred to at the appropriate stage herein afterwards. RFA.No.708/2006 Learned counsel for the respondent/plaintiff further submitted that the limitation attracts in this case is not under Article 19 of the Limitation Act, 1963, but, it is under Article 55 of the same Act. As such, the limitation commences once there is breach of repayment as agreed to under the agreement. 10. In the light of the above, the only point that arise for my consideration is : " Whether the judgment and decree under appeal requires an interference at the hands of this Court." As observed above, the appellants though have prayed for setting aside the impugned judgment and decree, in their arguments, confined only in questioning that the defendants could not have executed Ex.P-1. Further the said document was also a compulsorily registrable document since it creates charge, as such, RFA.No.708/2006 the trial Court ought not to have considered the document. However, the learned counsel for the appellants had made it clear that, he would not dispute on the question of execution of Ex.P-1 by the defendants and would not challenge the finding of the trial Court in that regard. When the evidence of the witnesses on the side of the plaintiff is perused, it go to show that the plaintiff, as PW-1, has reiterated the contentions of his plaint in his examination-in-chief filed in the form of affidavit evidence. He has stated clearly in his examination-in- chief that the schedule property belongs to the defendants and both the defendants jointly for their family necessities and for the education purpose of their children, had availed a loan of `1 lakh from him on 6.11.1998 and it is in that regard, they have executed the document at Ex.P-1, creating a charge against the property. He has got marked the said document at Ex.P-1. RFA.No.708/2006 11. In his cross-examination, interestingly, the defendants have not denied the execution of Ex.P-1 by them. It was only suggested to the witness that on 4.6.1998, the plaintiff had purchased 24 guntas of land in Survey No.67/2 and 27 guntas of land in Survey No.67/1, from defendant No.1, for a sum of `1,27,500/- and out of the said sale consideration, only a sum of `27,500/- was paid. The balance amount of `1 lakh was promised to be paid by the plaintiff to the defendants. Subsequently, the plaintiff took the signatures of the defendants on a blank paper. PW-1 admitted that on 4.6.1998, he purchased the lands, as suggested to him, in Survey No.67/2 and Survey No.67/1, from defendant No.1, for a valuable consideration. However, he denied that he has still remained with payment of a balance of sale consideration of `1 lakh to the defendants with regard to the said transaction and that he had obtained signatures of the defendants in blank paper. Thus, the RFA.No.708/2006 defendants without denying that they have got executed Ex.P-1, have merely suggested that plaintiff had obtained their signatures on blank paper, which the plaintiff has denied. By the said mere suggestion, it cannot be inferred that the defendants have not executed Ex.P-1. Otherwise, they would have specifically suggested to PW-1 that they have not executed Ex.P-1 and have not received the consideration mentioned in the said document. Further, it also cannot be ignored of the fact that Ex.P-1 is a document executed not on any white paper, but, it is on stamp paper, which stamp paper is shown to have purchased on 17.10.1998. Admittedly, even according to the defendants and if their version is believed, they have subscribed their signature on blank paper on 4.6.1998 when they said to have sold some RFA.No.708/2006 portion of the immovable property to the plaintiff. If that were to be the case, the question of the plaintiff getting a stamp paper of a specific date which is more than four months thereafter would not arise. As such, on the very basis of it, the alleged defence of the defendants that the plaintiff has obtained their signature on a blank paper would not sustain. 12. In addition to the above, when the evidence of PWs.2, 3 and 4 is perused, it reveals that PW-2 K.V.Thimmaiah and PW-3-K.T.Thimmaiah, have deposed to the effect that the loan transaction between the plaintiff and defendants had taken place in their presence and execution of the document at Ex.P-1 was also in their presence. Both of them have identified their signatures as witnesses in Ex.P-1. RFA.No.708/2006 In their cross-examination, nothing was elicited from them which makes their evidence in examination- in-chief unbelievable. On the other hand, a mere denial suggestion made to them that no such loan transaction was taken place between the parties has been denied by both the witnesses. 13. PW-4 - B.S.Krishnamurthy, has stated that he had been the scribe of the document at Ex.P-1. He has stated that it was got written through him. Even in his cross-examination also, nothing could be elicited, except suggesting to him that he was not instructed to write the document and that the defendants were not present when the same was written. However, the witness has not admitted the said suggestion as true. 14. The defendant No.1 - Ramanna, who got himself examined as DW-1 has nowhere stated that he has executed the document at Ex.P.1 on 6.11.1998. RFA.No.708/2006 However, he has only stated that on the said day, the defendants did not avail the loan of `1 lakh from the plaintiff. On the contrary, the very same witness in his cross-examination has admitted that Ex.P-1 bears the thumb marks of himself and his wife. 15. Thus, by virtue of evidence of PWs.1, 2, 3 and 4, which could not be shaken in their cross-examination, the plaintiff's evidence as PW-1 is further corroborated and established that, on the date 6.11.1998, both the defendants have jointly executed the document at Ex.P-1 in favour of the plaintiff and have availed a loan of `1 lakh from the plaintiff. The cross-examination of DW-1 also would enable the Court to come to a conclusion that the plaintiff has proved the availment of a loan of a sum of `1 lakh by the defendants on 6.11.1998. RFA.No.708/2006 16. The second question that would remain for consideration is, whether the Ex.P-1 was required to be considered as a basis for proving the alleged loan transaction between the parties. The said document which is on a stamp paper of a sum of `600/- go to show that the defendants jointly after availing a sum of `1 lakh as loan from the plaintiff, have agreed to create a charge on the immovable property shown in the said document. As such, the document is a document with respect to creation of a charge in response to a loan transaction which the executant of the document had availed from the plaintiff. Merely because the defendants have produced a certified copy of the Sale Deed dated 4.6.1998, which is marked at Ex.D-1 and which shows that some portion of the property in Survey No.67/1 and Survey No.67/2 were sold by the defendants in favour of the plaintiff, RFA.No.708/2006 by that itself, the very same defendants executing Ex.P-1 cannot suspected. The said document at Ex.P-1 since creates charge in favour of the plaintiff with respect to an immovable property, is required to be registered under Section 17 of the Registration Act, 1908. Admittedly, the said document is an unregistered document. A perusal of the evidence of PW-1, wherein the said document was marked as an exhibit, goes to show that while marking the said document, an objection was raised, however, subject to the objection for making of the said document, the same was marked. Though the said document was initially referred to in the legal notice dated 18.10.2002, issued by the plaintiff as a Deed of Hypothecation and similarly referred even in the plaint of the plaintiff also, but, a perusal of the said document go to show that nowhere the said document identifies RFA.No.708/2006 itself as a Deed of Hypothecation. On the other hand, the said document calls itself as an document creating charge and acknowledging the receipt of amount and for payment of interest. Therefore, safely the said document may be treated as not an Hypothecation Agreement. The said document since creates a charge, is a registrable document, but, admittedly it is not registered. 17. The learned counsel for the respondent in her argument while canvassing the point that merely because a document which is required to be registered is not registered would not be thrown away and the same can be relied for its collateral purpose, has relied upon some of the judgments of Hon'ble Apex Court High Court of Judicature at Madras and Coordinate Benches of this Court in her support. Those judgments are as below : RFA.No.708/2006 19 In Mattapalli Chelamayya and another -vs- Mattapalli Venkataratnam and another, reported in { (1972) 3 SCC 799}, at Paragraph-11, the Hon'ble Apex Court was pleased to observe as below : " The direction to pay a sum of money which has been held due and payable by the appellants to the respondents is a direction giving effect to a liability which already existed. It does not create the liability for the first time but merely works out the liability. But the same thing cannot be said about the charge. The charge is created for the first time. The case, therefore, involves two distinct matters - one is a personal liability to pay a certain amount, and the second is an additional relief to recover that amount from the immovable property of the appellants, should they fail to pay as ordered. It is, therefore, clear that the two do not form one transaction, but two severable transactions. As pointed out long ago by Muttusami Ayyar, J., in Sambayya v. Gangayya : "The test, therefore, is whether the transaction evidenced by the particular RFA.No.708/2006 instrument is single and indivisible or whether it really evidences two transactions which can be severed from each other, the one as creating an independent personal obligation and the other as merely strengthening it by adding a right to proceed against immovable property. But it should be remembered that it is not enough that there is an obligation to pay a sum of money, but that it is also necessary that the obligation should have an independent existence, and be in no way contingent or conditional on the breach of some obligation relating to immovable property created by the same instrument, for the contingency or the condition and the obligation would then be parts of one indivisible transaction". In the present case the document evidences two transactions which can be severed from each other. One transaction creates an independent personal obligation to pay a certain sum of money and the other transaction namely the charge merely strengthens the first transaction by adding a right to proceed against the charged property. In our opinion, the High Court was right in directing that the second transaction with regard to the charge being a RFA.No.708/2006 severable transaction can be validly ignored and to the extent that it declares the personal obligation to pay the transaction, not being required to be compulsorily registered, the award was admissible in evidence." The very same Hon'ble Apex Court subsequently in Yellapu Uma Maheswari and another -vs- Buddha Jagadheeswararao and others, reported in { (2015) 16 SCC 787}, wherein the question of an unregistered and unstamped Partition Deed and Deed of Relinquishment was in question, was pleased to observe that the Deed of Relinquishment of right in respect of immovable property is not admissible in evidence for primary purpose of division of joint properties by metes and bounds, but, the same can be relied upon for collateral purposes of severance of title and nature of possession of various shares only if it is impounded by paying stamp duty together with penalty. RFA.No.708/2006 22 In Umde Bhojram -vs- Wadla Gangadhar, reported in CDJ 2004 APHC 097, a Single Bench of Andhra Pradesh High Court with respect to Section 58 of Transfer of Property Act, 1882, and an unregistered Mortgage Deed, was pleased to observe that, an unregistered simple Mortgage Deed disclosing any covenant undertaking to discharge the liability personally by the mortgagor without reference to the mortgaged property is admissible in evidence to prove the suit debt. It was further observed that, since the suit was for recovery of money covered by the claim, the document can be marked for collateral purposes for the recovery of money. A similar view was also taken by the High Court of Judicature at Madras in T.K.Sathiyanarayanan & others -vs- S.Jaganathan, reported in CDJ 2013 MHC 2298, where the Court held that, unregistered Mortgage Deeds can be marked as exhibits for the limited extent of RFA.No.708/2006 establishing the loan transactions and such marking cannot be found fault with. A Coordinate Bench of this Court in Smt.Krishnakumari -vs- Sri K.Suresh Kumar, reported in ILR 2015 KAR 2335, though held that a possession of immovable property and an agreement is required to be compulsorily registered and the non-registration of such a document would not affect the immovable property comprised therein, however, had considered about relying on such document for collateral purposes. In that regard, it referred to a judgment of Andhra Pradesh High Court in K.Ramamoorthi -vs- C.Surendranatha Reddy, (C.R.P.No.1623/2012, dated 27.07.2012), wherein the Andhra Pradesh High Court has observed as below : "i) A document, which is compulsorily registrable, but not registered, cannot be received as evidence of any transaction affecting such property or conferring such RFA.No.708/2006 power. The phrase "affecting the immovable property" needs to be understood in the light of the provisions of Section 17(b) of the Registration Act, which would mean that any instrument which creates, declares, assigns, limits or extinguishes a right to immovable property, affects the immovable property. ii) The restriction imposed under Section 49 of the Registration Act is confined to the use of the document to affect the immovable property and to use the document as evidence of a transaction affecting the immovable property. iii) If the object in putting the document in evidence does not fall within the two purposes mentioned in (ii) supra, the document cannot be excluded from evidence altogether. iv) A collateral transaction must be independent of or divisible from a transaction to affect the property i.e., a transaction creating any right, title or interest in the immovable property of the value of rupees hundred and upwards.. RFA.No.708/2006 v) The phrase "collateral purpose" is with reference to the transaction and not to the relief claimed in the suit. Vii (b) An unregistered mortgage deed requiring registration may be received as evidence to prove the money debt, provided, the mortgage deed contains a personal covenant by the mortgagor to pay." From the above judgments, it is clear that even though a document pertaining to creation of charge was marked with respect to an immovable property is required to be a registered document, but, if the said document is unregistered, it cannot be totally ignored and can be considered for any collateral purposes. 18. In the instant case, the creation of charge with respect to the property mentioned in Ex.P-1 though requires the said document to be compulsorily registrable, but, a reading of the said document in its RFA.No.708/2006 entirety, clearly go to show that the defendants, as borrowers of a sum of `1 lakh from the plaintiff, have acknowledged of they borrowing the said sum from the plaintiff and have ensured to repay the said loan amount together with agreed rate of interest thereupon within four years from the date of agreement. It is to ensure the due repayment of the loan amount, a charge was offered to be created with respect to the immovable property shown therein. As such, independent of the creation of the charge, the agreement between the parties as a lender and a borrower stands established and for the said purpose, which is a collateral to the purpose of creation of charge, Ex.P-1 can be relied upon. As such, even though the learned counsel for the appellants did not canvas the said point of alleged unregistered document at Ex.P-1, still, the above analysis would clearly go to show that Ex.P-1 can be relied and acted upon for its collateral purposes. RFA.No.708/2006 19. The first leg of the argument of the learned counsel for the appellants is that, admittedly the property in Ex.P-1 since has given to the share of the minors, the defendants as parents of the minors could not have created a charge against the said property. No doubt, a reading of Ex.P-1 would go to show that the defendants have stated that the property was divided between the children, as such, the property shown in Ex.P-1 has been given up in favour of their minor daughters. It is for the educational expenses of those minor daughters, the defendants, as their natural parents, have executed the document at Ex.P-1. Here once again it can be repeated that, the aspect of whether the defendants executing the document on behalf of the minors would arise, provided the said document is taken for its primary purpose for creating charge against the said property. However, as observed above, RFA.No.708/2006 since the scope of Ex.P-1 for the present suit is confined only for its collateral purpose for repayment of the money, the other question as to whether defendant Nos.1 and 2 could create charge against the property shown therein would not arise for consideration. As such, the said argument of the learned counsel for the appellants is not acceptable. 20. The agreement at Ex.P-1 is admittedly executed on 6.11.1998, which says that the defendants have agreed to repay the loan amount together with interest thereupon at the rate of 2% per month. The period of repayment of the loan amount was fixed at four years from the date of the agreement, which was on 6.11.1998. It is in this context, learned counsel for the appellants canvassed a point in his argument that, had really the defendants executed the said agreement at Ex.P-1, then, the plaintiff would not RFA.No.708/2006 have kept quite for a long period for more than three years without claiming even the interest from the defendants. As such, the conduct of the plaintiff is questionable. Admittedly, the plaintiff has not taken any action against the defendants for the defendants not paying the interest regularly though agreed to under Ex.P-1. But, merely because the plaintiff has not taken any action for recovery of the interest agreed to be paid by the defendants periodically, by that itself, the entire agreement at Ex.P-1 cannot be suspected. This is also for the reason that, as already observed above, apart from PW-1, even PWs.2, 3 and 4 have also supported the case of the plaintiff by stating that PWs.2 and 3 are the witnesses to the said loan transaction and PW-4 was the scribe of the document. RFA.No.708/2006 Moreover, as further observed above, even DW-1 in his cross-examination also has admitted the execution of the document at Ex.P-1 by stating that himself, joined by his wife, have put their thumb marks to the said document. Thus, when the very execution of Ex.P-1 in favour of the plaintiff has stood established, the mere non-payment of the interest would not lead to such a suspicion so as to disregard or disbelieve Ex.P-1 or to exonerate the defendants from liability towards the plaintiff for repayment of the loan amount with interest thereupon. As such, the said point of argument canvassed by the learned counsel for the appellants is also not acceptable. 21. The last point of argument of learned counsel for the appellants is that the plaint is barred by limitation. According to the learned counsel for the appellants, the date of agreement as at Ex.P-1 is RFA.No.708/2006 6.11.1998 and the suit was filed in the trial Court on 11.11.2002, as such, the suit is barred by limitation under Article 19 of the Limitation Act, 1963. No doubt, Article 19 in Schedule-I of the Limitation Act mentions that the institution of a suit for recovery of money payable for the money lent is three years when the loan is made. However, learned counsel for the respondent in her arguments submitted that in the case on hand, admittedly the document at Ex.P-1 gives a period of four years for the repayment of the loan. Since the defendants have committed breach of the agreement by not repaying the loan even at the end of the fourth year from the date of the agreement, the cause of action has arisen to the plaintiff on the said date of breach, as such, the suit has been filed within the period. She further submitted that, it is Article 55 of Schedule-I of the Limitation Act which is applicable in RFA.No.708/2006 the case on hand. The said Article mentions that, in a suit for compensation for the breach of any contract, express or implied, not otherwise specifically provided in the Schedule-I, the limitation period would be three years from the date when the contract is broken or where there are successive breaches when the breach in respect of which the suit instituted occurs or where the breach is continuous from the date when the breach ceases. 22. In that regard, learned counsel for the respondent has relied upon the judgment of Allahabad High Court in Dhapai -vs- Dalla and others, reported in AIR 1970 Allahabad 206. In the said case, the plaintiff had obtained theka of fishery rights in certain tank for complete year. The defendants had agreed to pay half of theka money to the plaintiff in return of half of fishery rights in tank. The plaintiff had filed a suit for recovery RFA.No.708/2006 of amount after defendants working out their theka in respect of their share. The Court held that the suit was for recovery of amount and not for specific performance of contract, as such, it was governed by Article 115 and not Article 113 of the Schedule-I of the Limitation Act. 23. The scope of Article 113 and Article 115 of the Limitation Act was described by the Allahabad High Court at Paras 13 and 14 of the said judgment, which are reproduced here below : " 13. We now proceed to consider why Art. 115 of the First Schedule to the Limitation Act should apply to the facts of the present case. Art.115 applies when there is a breach of contract and the suit is for compensation for the loss suffered by the innocent party. A breach of contract "occurs where a party repudiates or fails to perform one or more of the obligations imposed upon him by the contract": (vide Cheshire and Fifoot, p. 484). "If one of two parties to a contract breaks the RFA.No.708/2006 obligation which the contract imposes, a new obligation will in every case arise -a right of action conferred upon the party injured by the breach": (vide Anson's Law of Contract, p. 412). Admittedly in the present case there was a contract and according to the plaintiff and the findings of the Court a breach of contract had occurred inasmuch as the defendants failed to pay the stipulated amount upon the date fixed under the contract. 14. Difficulty can, however, be caused by the word "compensation" used in Article 115. It can be argued that the words "compensation for breach of contract" point rather to a claim for unliquidated damages than to the payment of a certain sum, and, therefore, where the suit is for the recovery of a specified sum, and not for the determination of unliquidated damages, this Article should not apply. In our opinion this contention would be wholly untenable because it was not accepted by this Court in the Full Bench case of Husain Ali Khan v. Hafiz Ali Khan, (1881) ILR 3 All 600 (FB) and by the Privy Council in the case of Tricomdas Cooverji Bhoja Vs. Sri Gopinath Jiu, AIR 1916 PC 182. RFA.No.708/2006 In the case of Husain Ali Khan, (1881) ILR 3 All 600 (FB), Art. 116 of Schedule II of the Limitation Act (Act 15 of 1877) was the subject of interpretation. Articles 115 and 116 of Schedule II of Act 15 of 1877 have been reproduced verbatim in the Indian Limitation Act, 1908. Article 115 deals with the breach of contracts not in writing and registered while Article 116 provided for breach of contracts in writing and registered. It is, therefore, obvious that the meaning which has to be given to the words "compensation for breach of contract" occurring in both the Articles will have to be the same. In Syndicate Bank -vs- Channaveerappa Beleri and others, reported in { (2006) 11 SCC 506}, at Para- 18, the Hon'ble Apex Court was pleased to observe as below : " 18. Some arguments were addressed about the article of limitation that would apply in respect of a suit against the guarantors. Samuel held that in the case of refusal of a guarantor to pay the amount, the matter would RFA.No.708/2006 be governed by Article 115 of the Schedule to the Limitation Act, 1908, which corresponds to Article 55 of the Limitation Act, 1963. One of the submission made before us was that the term "compensation for breach of contract" in Article 55 indicates a claim for unliqudated damages and not a claim for payment of a sum certain as to what is the difference between a claim for unliquidated damages and a claim for a sum certain or a sum presently due, reference can advantageously be made to the classic statement of law by Chagla, C.J., in Iron and Hardware (India) Co. v. Firm Shamlal & Bros. If Article 55 does not apply, then a claim against a guarantor in such a situation may fall under the residuary Article 113 of the Limitation Act, 1963 corresponding to Article 120 of the old Act. The controversy about the appropriate article applicable, when the claim is found to be not exactly for "compensation" but ascertained sum due has been referred to as long back as in 1916 in Tricomdas Cooverji Bhoja v. Gopinath Jiu Thakur. Under the old Limitation Act (Act of 1908), the periods prescribed were different under Articles 115 and 116. The period prescribed were also different under Articles RFA.No.708/2006 115 and 120. But under the 1963 Act, the period of limitation is the same (three years) both under Articles 55 and 113. Having regard to the fact that the period of limitation is 3 years both under Article 55 and Article 113, and having regard to the binding decision in Samuel, we do not propose to examine the controversy as to whether the appropriate article is 55 or 113. Suffice it to note that even if the article applicable is Article 113, the Bank's suit is in time. In the light of the above judgment, when Ex.P-1 is perused, it clearly go to show that the defendants had agreed for the four years time for the repayment of the loan amount. Though the loan amount was specified, but, the period for repayment was fixed at four years. As such, the defendants had a time up to four years from the date of the alleged execution of the agreement for repaying the said loan amount and the interest thereupon. Once they commit any breach for payment of the said amount at the end of four years, the plaintiff RFA.No.708/2006 gets a cause of action to sue for recovery of the loan amount from the defendants. As such, the arisal of cause of action for the plaintiff in the case on hand is not necessarily the date of alleged agreement, but also the date when the breach of performance on the part of the defendants has occurred. Since the legal notice at Ex.P-2 go to show that plaintiff after waiting for a considerable period as per the agreement to enable the defendants to repay the loan amount, has finally issued a legal notice to them on 18.10.2002, calling upon the defendants to repay the loan amount and since the defendants have not responded to the said notice and not even repaid the loan amount, the plaintiff gets a cause of action as per Ex.P-1 to treat that the defendants have committed breach of agreement towards the repayment of the loan amount with interest thereupon and has thus instituted a suit without wasting any further time. As such, the contention of the RFA.No.708/2006 appellants that the suit was barred by limitation is also not acceptable. 24. Barring the above, the appellants have not raised any other contention in their memorandum of appeal and in the argument which are worth to be considered. As observed above, since the plaintiff by leading cogent evidence, both oral and documentary, has proved that the defendants have borrowed a sum of `1 lakh from him on 6.11.1998, agreeing to repay the same with agreed rate of interest thereupon and have committed default and have failed to repay the loan amount with interest, the plaintiff is entitled for recovery of the said sum. 25. The trial Court since has passed a considered and reasoned order decreeing the suit in-part after appreciating the materials placed before it in its proper RFA.No.708/2006 perspective, I do not find any reason to interfere in the said judgment and decree. 26. Accordingly, I proceed to pass the following order: ORDER The Appeal is dismissed. The judgment and decree dated 7.1.2006, passed by the learned Prl.Civil Judge (Sr.Dn.), Ramanagaram, in O.S.No.195/2002, is confirmed. The Registry is directed to transmit a copy of this judgment along with lower Court records to the lower Court without delay. Sd/- JUDGE bk/


Reportable IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. OF 2008 (Arising out of S.L.P. (C) No.15727 of 2008) J. Mitra & Co. Pvt. Ltd. ... Appellant (s) versus Asst. Controller of Patents & Desig. & Ors. .... Respondent (s) WITH Civil Appeal No. .........of 2008 arising out of S.L.P. (C) No.15729 of 2008 JUDGMENT S.H. KAPADIA, J. 1. Leave granted. 2. For the sake of convenience we refer to the facts mentioned in Civil Appeal No................ of 2008 (arising out of S.L.P. (C) No.15729 of 2008) filed by J. Mitra & Co. Pvt. Ltd. 3. This matter is a classic illustration of the confusion which has emerged on account of the postponement of in-part commencement of Patents (Amendment) Act, 2005. 4. Quite often the commencement of an Act is postponed to some specified future date or to such date as the Appropriate Government may, by Notification in the Official Gazette, appoint. Provision is also at times made for appointment of different dates for coming into force of different parts of the same Act. This is what has exactly happened in this case resulting into utter confusion with regard to pending FAO No.293/06 filed by respondent No.3 in the High Court under Section 116 of the Indian Patents Act, 1970 as amended by the Patents (Amendment) Act, 1999 w.e.f. 26.3.99. 5. Span Diagnostics Limited, respondent No.3 herein, is a public limited company established in 1972 to indigenously develop and manufacture a comprehensive range of ready- made diagnostic reagents made by clinical pathology laboratories. On 14.6.2000 J.Mitra & Company Pvt. Ltd., appellant herein, filed its application for grant of patent. After scrutiny, the said application stood notified by the Patent Office on 20.11.2004. 6. Thus, proceedings commenced before the Controller of Patents in the year 2000 when the appellant herein sought a patent of their device which was opposed by respondent no.3 in the year 2000. By then, the Patents (Amendment) Act, 1999 had amended the Patents Act, 1970 w.e.f. 26.3.99. Section 25 of the Patents Act, 1970 as amended by Patents (Amendment) Act, 1999 dealt with opposition to a patent vide Section 25. At that time appeals against decisions made by the Controller pertaining to "pre-grant oppositions" under Section 25 were maintainable before the High Court under Section 116(2) of the Indian Patents Act, 1970. 7. We quote hereinbelow Sections 25 and 116 as it stood in the year 2000 under the Patents (Amendment) Act, 1999 which read as under: "Section 25. Opposition to grant of patent: (1) At any time within four months from the date of advertisement of the acceptance of a complete specification under this Act (or within such further period not exceeding one month in the aggregate as the Controller may allow on application made to him in the prescribed manner before the expiry of the four months aforesaid) any person interested may give notice to the Controller of opposition to the grant of the patent on any of the following grounds, namely: a. that the applicant for the patent or the person under or through whom he claims, wrongfully obtained the invention or any part thereof from him or from a person under or through whom he claims; b. that the invention so far as claimed in any claim of the complete specification has been published before the priority date of the claim - i. in any specification filed in pursuance of an application for a patent made in India on or after the 1st day of January, 1912; or ii. in India or elsewhere, in any other document: Provided that the ground specified in Sub-clause (ii) shall not be available where such publication does not constitute an anticipation of the invention by virtue of Sub-section (2) or Sub-section (3) of Section 29; that the invention so far as claimed in any claim of the complete specification is claimed in a claim of a complete specification published on or after the priority date of the applicant's claim and filed in pursuance of an application for a patent in India, being a claim of which the priority date is earlier than that of the applicant's claim; a. that the invention so far as claimed in any claim of the complete specification was publicly known or publicly used in India before the priority date of that claim. Explanation - For the purposes of this clause, an invention relating to a process for which a patent is claimed shall be deemed to have been publicly known or publicly used in India before the priority date of the claim if a product made by that process had already been imported into India before that date except where such importation has been for the purpose of reasonable trial or experiment only; b. that the invention so far as claimed in any claim of the complete specification is obvious and clearly does not involve any inventive step, having regard to the matter published as mentioned in clause (b) or having regard to what was used in India before the priority date of the applicant's claim; c. that the subject of any claim of the complete specification is not an invention within the meaning of this Act, or is not patentable under this Act; d. that the complete specification does not sufficiently and clearly describe the invention or the method by which it is to be performed; e. that the applicant has failed to disclose to the Controller the information required by Section 8 or has furnished the information which in any material particular was false to his knowledge; f. that in the case of a convention application, the application was not made within twelve months from the date of the first application for protection for the invention made in a convention country by the applicant or a person from whom he derives title; but on no other ground. (2) Where any such notice of opposition is duly given, the Controller shall notify the applicant and shall give to the applicant and the opponent an opportunity to be heard before deciding the case. (3) The grant of a patent shall not be refused on the ground stated in Clause (c) of Sub-section (1) if no patent has been granted in pursuance of the application mentioned in that clause; and for the purpose of any inquiry under clause (d) or clause (e) of that sub- section, no account shall be taken of any secret use. Section 116. Appeals (1) No appeal shall lie from any decision, order or correction made of issued under this Act by the Central Government, or from any act or order of the Controller for the purpose of giving effect to any such decision, order or direction. (2) Save as otherwise expressly provided in Sub-section (1), an appeal shall lie to a High Court from any decision, order or direction of the Controller under any of the following provisions, that is to say, Section 15, Section 16, Section17, Section 18, Section 19, Section 20, Section 25, Section 27, Section 28, Section 51, Section 54, Section 57, Section 60, Section 61, Section 63, Sub-section (3) of Section 69, Section 78, Section 84, Section 86, Section 88(3), Section 89, Section 93, Section 96 and Section 97." (3) Every appeal under this section shall be in writing and shall be made within three months from the date of the decision, order or direction, as the case may be, of the Controller, or within such further time as the High Court may in accordance with the rules made by it under Section 158 allow." (emphasis supplied by us) 8. Suffice it to note that under Patents (Amendment) Act, 1999 there was only one right given to a person interested to oppose the grant of patent by filing objections at the pre-grant stage. Under the said Amendment Act, 1999, as stated above, vide Section 116 (2) a right of appeal was available to the aggrieved party against orders passed under Section 25. The said appellate remedy was available by way of an appeal to the High Court. 9. In 2002, the Legislature desired an amendment to the law and intended to create an appellate forum to hear appeals against orders passed by the Controller consequently Patents (Amendment) Act, 2002 was promulgated on 25.6.2002. However, it was not brought into force immediately. It may be noted that in the said Amendment Act, 2002, no provision was made pertaining to "post-grant opposition". That provision came to be made only under the Patents (Amendment) Act, 2005 which was promulgated on 4.4.2005 w.e.f. 1.1.2005. 10. Vide Section 47 of the Patents (Amendment) Act, 2002 entire Chapter XIX stood substituted. Sections 116 and 117A were reworded which read as under: "Section 116. (1) Subject to the provisions of this Act, the Appellate Board established under Section 83 of the Trade Marks Act, 1999 shall be the Appellate Board for the purposes of this Act and the said Appellate Board shall exercise the jurisdiction, power and authority conferred on it by or under this Act: Provided that the Technical Member of the Appellate Board for the purposes of this Act shall have the qualifications specified in Sub- section (2). (2) A person shall not be qualified for appointment as a Technical Member for the purposes of this Act unless he- (a) has, at least five years, hold the post of Controller under this Act or has exercised the functions of the Controller under this Act for at least five years; or (b) has, for at least ten years, functioned as a Registered Patent Agent and possesses a degree in engineering or technology or a masters degree in science from any University established under law for the time being in force or equivalent; or (c) has, for at least ten years, been an advocate of a proven specialized experience in practicing law relating to patents and designs. Section 117A. (1) Save as otherwise expressly provided in Sub- section (2), no appeal shall lie from any decision, order or direction made or issued under this Act by the Central Government, or from any act or order of the Controller for the purpose of giving effect to any such decision, order or direction. (2) An appeal shall lie to the Appellate Board from any decision, order or direction of the Controller or Central Government under Section 15, Section 16, Section 17, Section 18, Section 19, Section 20, Section 25, Section 27, Section 28, Section 51, Section 54, Section 57, Section 60, Section 61, Section 63, Section 66, Sub- section (3) of Section 69, Section 78, Sub-sections (1) to (5) of Section 84, Section 85, Section 88, Section 91, Section 92 and Section 94. (3) Every appeal under this section shall be in prescribed form and shall be verified in such manner as may be prescribed and shall be accompanied by a copy of the decision, order or direction appealed against any by such fees as may be prescribed. (4) Every appeal shall be made within three months from the date of the decision, order or direction, as the case may be, of the Controller or the Central Government or within such further time as the Appellate Board may, in accordance with the rules made by it, allow." (emphasis supplied by us) 11. The provisions of the said Amendment Act, 2002, however, were not simultaneously brought into force. Suffice it to note that Sections 116 and 117A were not brought into force. However, Section 25 was brought into force vide Notification dated 20.5.2003. Even as on 20.5.2003 vide Section 25 only one right to oppose a patent at the pre-grant stage was available and appeal against an order, passed by the earlier, lay before the High Court under the then existing Section 116 of the Patents Act, 1970 for the reason that the amended Sections 116 and 117A were not brought into force. 12. Without giving effect to the amendments to Sections 116 and 117A suggested by Section 47 of the Patents (Amendment) Act, 2002, on 4.4.2005 the Legislature enacted the Patents (Amendment) Act, 2005. Even here, not all provisions were simultaneously brought into force. Only certain sections of the Patents (Amendment) Act, 2005 were brought into force. 13. Vide Section 23 of the Patents (Amendment) Act, 2005, the then existing Section 25 was substituted. The substituted Section 25 reads as under: "25. Opposition to the patent.- (1) Where an application for a patent has been published but a patent has not been granted, any person may, in writing, represent by way of opposition to the Controller against the grant of patent on the ground- (a) that the applicant for the patent or the person under or through whom he claims, wrongfully obtained the invention or any part thereof from him or from a person under or through whom he claims; (b) that the invention so far as claimed in any claim of the complete specification has been published before the priority date of the claim- (i) in any specification filed in pursuance of an application for a patent made in India on or after the 1st day of January, 1912; or (ii) in India or elsewhere, in any other document: Provided that the ground specified in Sub-clause (ii) shall not be available where such publication does not constitute an anticipation of the invention by virtue of Sub-section (2) or Sub-section (3) of Section 29; (c) that the invention so far as claimed in any claim of the complete specification is claimed in a claim of a complete specification published on or after the priority date of the applicant's claim and filed in pursuance of an application for a patent in India, being a claim of which the priority date is earlier than that of the applicant's claim; (d) that the invention so far as claimed in any claim of the complete specification was publicly known or publicly used in India before the priority date of that claim. Explanation.-For the purposes of this clause, an invention relating to a process for which a patent is claimed shall be deemed to have been publicly known or publicly used in India before the priority date of the claim if a product made by that process had already been imported into India before that date except where such importation has been for the purpose of reasonable trial or experiment only; (e) that the invention so far as claimed in any claim of the complete specification is obvious and clearly does not involve any inventive step, having regard to the matter published as mentioned in clause (b) or having regard to what was used in India before the priority date of the applicant's claim; (f) that the subject of any claim of the complete specification is not an invention within the meaning of this Act, or is not patentable under this Act; (g) that the complete specification does not sufficiently and clearly describe the invention or the method by which it is to be performed; (h) that the applicant has failed to disclose to the Controller the information required by Section 8 or has furnished the information which in any material particular was false to his knowledge; (i) that in the case of convention application, the application was not made within twelve months from the date of the first application for protection for the invention made in a convention country by the applicant or a person from whom he derives title; (j) that the complete specification does not disclose or wrongly mentions the source or geographical origin of biological material used for the invention; (k) that the invention so far as claimed in any claim of the complete specification is anticipated having regard to the knowledge, oral or otherwise, available within any local or indigenous community in India or elsewhere, but on no other ground and the Controller shall, if requested by such person for being heard, hear him and dispose of such representation in such manner and within such period as may be prescribed. (2) At any time after the grant of patent but before the expiry of a period of one year from the date of publication of grant of a patent, any person interested may give notice of opposition to the Controller in the prescribed manner on any of the following grounds, namely: (a) that the patentee or the person under or through whom he claims, wrongfully obtained the invention or any part thereof from him or from a person under or through whom he claims; (b) that the invention so far as claimed in any claim of the complete specification has been published before the priority date of the claim- (i) in any specification filed in pursuance of an application for a patent made in India on or after the 1st day of January, 1912; or (ii) in India or elsewhere, in any other document: Provided that the ground specified in Sub-clause (ii) shall not be available where such publication does not constitute an anticipation of the invention by virtue of Sub-section (2) or Sub-section (3) of Section 29; (c) that the invention so far as claimed in any claim of the complete specification is claimed in a claim of a complete specification published on or after the priority date of the claim of the patentee and filed in pursuance of an application for a patent in India, being a claim of which the priority date is earlier than that of the claim of the patentee; (d) that the invention so far as claimed in any claim of the complete specification was publicly known or publicly used in India before the priority date of that claim. Explanation.-For the purposes of this clause, an invention relating to a process for which a patent is granted shall be deemed to have been publicly known or publicly used in India before the priority date of the claim if a product made by that process had already been imported into India before that date except where such importation has been for the purpose of reasonable trial or experiment only; (e) that the invention so far as claimed in any claim of the complete specification is obvious and clearly does not involve any inventive step, having regard to the matter published as mentioned in clause (b) or having regard to what was used in India before the priority date of the claim; (f) that the subject of any claim of the complete specification is not an invention within the meaning of this Act, or is not patentable under this Act; (g) that the complete specification does not sufficiently and clearly describe the invention or the method by which it is to be performed; (h) that the patentee has failed to disclose to the Controller the information required by Section 8 or has furnished the information which in any material particular was false to his knowledge; (i) that in the case of a patent granted on convention application, the application for patent was not made within twelve months from the date of the first application for protection for the invention made in a convention country or in India by the patentee or a person from whom he derives title; (j) that the complete specification does not disclose or wrongly mentions the source and geographical origin of biological material used for the invention; (k) that the invention so far as claimed in any claim of the complete specification was anticipated having regard to the knowledge, oral or otherwise, available within any local or indigenous community in India or elsewhere, but on no other ground. (3) (a) Where any such notice of opposition is duly given under Sub-section (2), the Controller shall notify the patentee. (b) On receipt of such notice of opposition, the Controller shall, by order in writing, constitute a Board to be known as the Opposition Board consisting of such officers as he may determine and refer such notice of opposition along with the documents to that Board for examination and submission of its recommendations to the Controller. (c) Every Opposition Board constituted under clause (b) shall conduct the examination in accordance with such procedure as may be prescribed. (4) On receipt of the recommendation of the Opposition Board and after giving the patentee and the opponent an opportunity of being heard, the Controller shall order either to maintain or to amend or to revoke the patent. (5) While passing an order under Sub-section (4) in respect of the ground mentioned in clause (d) or clause (e) of Sub-section (2), the Controller shall not take into account any personal document or secret trial or secret use. (6) In case the Controller issues an order under Sub-section (4) that the patent shall be maintained subject to amendment of the specification or any other document, the patent shall stand amended accordingly." (emphasis supplied by us) 14. We also quote Section 61 of the Patents (Amendment) Act, 2005 which reads as under: "Section 61. In Section 117A of the principal Act [as inserted by Section 47 of the Patents (Amendment) Act, 2002, in Sub-section (2), for the words and figures "section 20, Section 25, Section 27, Section 28,", the words, figures and brackets "section 20, Sub- section (4) of Section 25, Section 28" shall be substituted."* *(this section was not brought into force till 2.4.2007)" (emphasis supplied by us) 15. In short, by the Patents (Amendment) Act, 2005, for the first time a dichotomy was introduced in the Patent Law between "opposition to the pre-grant" and "opposition to the post-grant of patent". This was the major structural change in the Patent Law. Similarly, under the Patents (Amendment) Act, 2005, appeal was restricted to the post-grant opposition orders and that appeal lay before the Appellate Board and not to the High Court. Here also, Section 25 of the Patents Act, 1970 as amended by Patents (Amendment) Act, 2005 (which refers to "pre-grant opposition" and "post-grant opposition") was brought into force on and from 1.1.2005 whereas amended Section 117A by which appeal was provided for against post-grant opposition order was not brought into force till 2.4.2007. One more aspect needs to be mentioned. As stated, vide Patents (Amendment) Act, 2005, a dichotomy was brought in between pre-grant and post-grant opposition orders w.e.f. 1.1.2005. But when it came to filing of first appeal for some unknown reasons, the amended Section 117A (which provided for only one statutory appeal and that too against post-grant orders passed by the Controller) was not brought into force. The result is that although the Legislature intended to provide for only one statutory appeal to the Appellate Board, by reason of Section 61 of the Patents (Amendment) Act, 2005 not being brought into force till 2.4.07 a strange situation developed. The Legislature intended to provide for only one statutory appeal to the Appellate Board but by not bringing Section 61 into force till 2.4.07, appeals filed during the interregnum, as in this case, became vulnerable and liable to be dismissed as misconceived as is contended by the appellant. This is the controversy which needs to be resolved in this case. 16. On 19.10.2006 when FAO No.293/06 was filed in the High Court, Chapter XIX of the parent Act as amended vide Patents (Amendment) Act, 1999 continued to be in operation notwithstanding the enactment of the Patents (Amendment) Act, 2002 and the Patents (Amendment) Act, 2005 as the amended Sections 116 and 117A were brought into force only vide Notification dated 2.4.07. One more point needs to be noted. Section 117G of the principal Act was substituted vide Patents (Amendment) Act, 2005. It reads as under: "Section 117G. Transfer of pending proceedings to Appellate Board.- All cases of appeals against any order or decision of the Controller and all cases pertaining to revocation of patent other than on a counter-claim in a suit for infringement and rectification of register pending before any High Court, shall be transferred to the Appellate Board from such date as may be notified by the Central Government in the Official Gazette and the Appellate Board may proceed with the matter either de novo or from the stage it was so transferred." 17. On reading amended Section 117G it becomes clear that all appeals against any order or decision of the Controller had to be transferred to the Appellate Board from such date as may be notified by the Central Government in the Official Gazette. This amended Section 117G was also brought into force vide Notification dated 3.4.2007. Under Notes on Clauses attached to the Statement of Objects and Reasons, it has been clarified, vide clause 62, that amended Section 117G is consequential to the enforcement of the jurisdiction of the Appellate Board under Section 64 which results to revocation of patent. Vide clause 47 of Notes on Clauses attached to the Statement of Objects and Reasons, it has been clarified that Section 64 is also amended vide Patents (Amendment) Act, 2005 to confer wider jurisdiction on the Appellate Board in matters of revocation of patent, therefore, amended Section 117G which is brought into force only from 3.4.2007 dealt with transfer of pending proceedings from the High Court to the Appellate Board. 18. The question which arises for determination in this batch of civil appeals is : whether FAO No.292/06 and FAO No.293/06 filed by respondent no.3 herein in the High Court were liable to be dismissed. According to the appellant, with the change in Section 25 brought about by Patents (Amendment) Act, 2005, a dichotomy was introduced in the Patents Act, 1970. According to the appellant, that dichotomy was between "pre-grant opposition" and "post-grant opposition". According to the appellant, this was a structural change in the principal Act. According to the appellant, on 23.8.06 the Controller rejected its "pre-grant opposition" and on that day "post-grant opposition" avenue was open to respondent no.3 vide Section 25(2). According to the appellant, under the amended Section 25 on rejection of "pre- grant opposition" it was open to respondent no.3 to move an application opposing grant of patent under Section 25(2). The patent was granted to the appellant on 22.9.06. According to the appellant, it was open to respondent no.3 to challenge the grant of patent by making "post-grant opposition" under Section 25(2) from which an appeal was maintainable to the Appellate Board. This was not done. Further, according to the appellant, "pre-grant opposition" was filed by respondent no.3 under Section 25(1) on 21.3.05. According to the appellant, though the Patents (Amendment) Act, 2005, amended Section 25 by enacting the amendment on 4.4.05 the said amendment was brought into force w.e.f. 1.1.2005 and, therefore, it was open to respondent no.3 to challenge the grant of patent by invoking Section 25(2) of the Patents Act, 1970. According to the appellant, with the change in the structure of the Act providing for only one statutory appeal and that too only against the order granting patent under Section 25(4), the appeal filed by respondent no.3 against pre- grant opposition order was not maintainable on 19.10.06 by which time, as stated above, Section 25 stood restructured providing for a dichotomy between "pre-grant opposition" and "post-grant opposition". 19. On the other hand, on behalf of respondent no.3, it has been urged that on 19.10.06 it had filed an appeal in the High Court under unamended Section 116 of the parent Act; that, even though Section 25 stood restructured w.e.f. 1.1.05 on account of absence of notification bringing the amended law into force, Sections 116 and 117A (as amended) providing appeal to the Appellate Board came into force only with effect from 2.4.07 and, therefore, according to the said respondent, its first appeal being FAO No.293/06 continued to be governed by the law as it stood on 19.10.06 (on which date appeal to the High Court was maintainable); that, on 23.8.06 the "pre- grant opposition", filed by respondent no.3, stood rejected, however, on that date appeal against pre-grant opposition order was maintainable, under Section 116, to the High Court and, therefore, there is no merit in the argument advanced on behalf of the appellant that the first appeal filed by respondent no.3 was misconceived; that, it is true that Section 25 got restructured w.e.f. 1.1.2005, however, such restructuring did not obliterate the first appeal filed by respondent no.3 on 19.10.2006; and lastly it was argued on behalf respondent no.3 that the appellant had filed its application for grant of patent on 14.6.2000, it was notified on 20.11.04, however, respondent no.3 had filed its "pre-grant opposition" under Section 25(1) on 21.3.05 when the Patents (Amendment) Act, 2005 was not promulgated (it was promulgated on 4.4.05) and, therefore, according to respondent no.3 its "pre-grant opposition" filed on 21.3.05 was valid and proper as respondent no.3 could not have invoked Section 25(2) proceedings on that day, namely, 21.3.05 as the law stood enacted bringing in Section 25(2) only on 4.4.05. In the peculiar circumstances of this case it was urged on behalf of respondent no.3 that no interference is called for by this Court in this batch of civil appeals. 20. As stated above, quite often the commencement of an Act is postponed to some specific future date or to such date as the Appropriate Government may, by notification in the Official Gazette, appoint. At times provision is made for appointment of different dates for coming into force of different parts of the same Act. 21. An Act cannot be said to commence or to be in force unless it is brought into operation by legislative enactment or by the exercise of authority by a delegate empowered to bring it into operation. 22. Applying the above tests to the present case, we find that by Patents (Amendment) Act, 2005 for the first time a dichotomy was inserted in the Patent Law by providing vide Section 25(1) for "opposition to pre-grant" and vide Section 25 (2) for "opposition to post-grant" of patent. By reason of Patents (Amendment) Act, 2005, the kind of opposition available under the said 1970 Act is different from what existed earlier. Previously, there was no "post-grant opposition". Previously, the only provision of challenge by an interested party was a "pre-grant" challenge under Section 25 (1) as it then stood. Therefore, the Courts had evolved the `rule of caution' as the patent had not faced any challenge at the hands of interested parties. There is, however, a radical shift due to incorporation of Section 25(2) where an interested party is granted the right to challenge the patent after its grant. The ground of challenge under Section 25(1) is identical to Section 25(2) of the said 1970 Act. However, Section 25(1) is wider than Section 25(2) as the latter is available only to a "person aggrieved". The main difference between Section 25(1) and Section 25(2), as brought about by Patents (Amendment) Act, 2005, is that even after a patent is granted, "post-grant opposition" can be filed under Section 25 (2) for a period of one year. The reason is obvious. In relation to patents that are of recent origin, a higher scrutiny is necessary. This is the main rationale underlying Section 25(2) of the said 1970 Act. Therefore, the Legislature intended an appeal under Section 117A(2) to the Appellate Board from any decision, order or direction of the Controller, inter alia, under Section 25(4) [which refers to the power of the Controller to maintain, amend or revoke the patent]. 23. In the present case, the Legislature intended to provide for two types of scrutiny followed by one statutory appeal to the Appellate Board against "post-grant proceedings". The Legislature intended to have a dichotomy between "pre-grant opposition" and "post-grant opposition". However, the Legislature intended that there shall be only one statutory appeal against grant of patent. The Legislature intended to obliterate appeal from "pre-grant proceedings", which existed earlier. However, it was left to the Executive to bring the enacted law into force vide notification. For some unknown reasons, the amended Sections 116 and 117A(2) were not brought into force till 2.4.07 whereas the concept of "pre- grant" and "post-grant" oppositions were brought into force w.e.f.1.1.2005. This is where the legislative intent got defeated during the interregnum. It is during this interregnum that respondent no.3 filed its FAO No.293/06 in the High Court under Section 116, as it stood on 19.10.06 under the Patents (Amendment) Act, 1999. On that date, the amended Section 117A, suggested by Patents (Amendment) Act, 2005, was not brought into force. On 19.10.06 the old law prevailed under which an appeal lay before the High Court. Respondent no.3, in both the cases, preferred first appeals to the High Court under Section 116 as it then stood. They are FAO No.292/06 and FAO No.293/06. We have to decide the fate of these pending appeals. One more aspect needs to be mentioned. Under the Patents (Amendment) Act, 2005, appeal is provided to the Appellate Board against the order of the Controller under Section 25(4). However, that statutory appeal is maintainable only in "post-grant opposition" proceedings whereas respondent no.3 herein has instituted first appeals under the law then prevailing, challenging the Order rejecting "pre-grant opposition" dated 23.8.06. 24. Taking into account the complexities involved in this case, on account of a hiatus created by reason of the law not being brought into force in time, we are of the view that the first appeals, filed by respondent no.3 in the High Court being FAO No.292/06 and FAO No.293/06, would remain in the High Court. The said appeals would be heard and disposed of by the High Court in accordance with law under Section 116 of the said 1970 Act as it stood on 19.10.06. The High Court will hear and decide the validity of the Order passed by the Controller dated 23.8.06 rejecting "pre-grant opposition" filed by respondent no.3. We are informed that there are hardly one or two matters of this nature which are pending. Therefore, we are of the view that respondent no.3 cannot be let without remedy. In the special circumstances of this case, particularly when after 2.4.07 appeals against orders rejecting "pre-grant opposition" are not maintainable and particularly when FAO No.292/06 and FAO No.293/06 were filed by respondent no.3 prior to 2.4.07 under the old law, we are of the view that these two appeals shall be heard and decided by the High Court in accordance with law. The Appellate Board after 2.4.07 is entitled to hear appeals only arising from orders passed by the Controller under Section 25(4), i.e., in cases of orders passed in "post-grant opposition". Therefore, there is no point in transferring the pending FAO No.292/06 and FAO No.293/06 to the Appellate Board which has no authority to decide matters concerning "pre-grant opposition". Moreover, it may be noted that even Section 117G, which refers to transfer of pending proceedings to the Appellate Board, is also brought into force vide Notification dated 3.4.07. Keeping in mind the peculiar nature of the problem in hand, we are of the view that ends of justice would be subserved if the High Court is directed to hear and decide the appeals bearing FAO No.292/06 and FAO No.293/06 in accordance with law as it then stood, i.e., under Section 116 under Patents (Amendment) Act, 1999 against Orders passed by the Controller in "pre-grant opposition" proceedings. 25. Accordingly, the two Civil Appeals, filed by the appellant herein, stand disposed of with no order as to costs. .................................J. (S.H. Kapadia) .................................J. (B. Sudershan Reddy) New Delhi; August 21, 2008.


REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL ORIGINAL JURISDICTION IN TRANSFER PETITION (CRL.) NO. 262 of 2018 SWAATI NIRKHI & ORS. …PETITIONERS Versus STATE (NCT OF DELHI) & ORS. …RESPONDENTS J U D G M E N T INDU MALHOTRA, J. 1. The present Transfer Petition has been filed by the Petitioner under Section 406 Cr.P.C. seeking transfer of Criminal Case No. 3483 of 2017 titled as State v. Swaati Nirkhi & Ors. (arising out of FIR No. 39/2016) from the Court of Metropolitan Magistrate 461 North West, Rohini Courts, New Delhi to the Court Signature Not Verified Digitally signed by of Metropolitan Magistrate at Allahabad (Prayagraj), Uttar Nidhi Ahuja Date: 2021.03.09 15:38:23 IST Reason: Pradesh. 2. The Respondent No.4 herein/Complainant filed FIR No. 39 on 7.1.2016 before the Police Station, Mangol Puri under Section 389 read with 34 IPC against 4 accused viz. Mr. Mohan Shrivastava, Ms. Swaati Saxena, Sanjay Saxena, Shashank Saxena wherein it was stated that his nephew Ashish Khare was married to Ms. Swaati Nirkhi (Petitioner No.1 in the Transfer Petition) on 19th April 2015 in Delhi. That on 7.8.2015, Swaati Nirkhi left for her parental home in Allahabad, and did not return thereafter, even though she was requested to come back by the family. On 25.11.2015, the Complainant received a message from one Mohan Srivastava alias Akahauri Onkar Nath (Respondent No.2 in the T.P) that Ms. Swaati Nirkhi would not like to come back to Delhi, and the matter could be settled by paying Rs. 5 crores. On 25.11.2015, 3 persons visited the house of the Complainant, and left a message with his driver and domestic help that the Complainant must pay Rs. 5 Crore to Mohan Srivastava. On 6.12.2015, the Complainant stated that it was learnt from the newspaper reports and T.V. media report that Ms. Swaati Nirkhi had falsely alleged that she was gang raped on 4.11.2015 at 9 p.m. in the house of the Respondent No.4, by Respondent No.4 and his nephews- Abhishek and Ashish, with the assistance of his wife- Smt. Heema Khare. It was also stated that he had received messages to pay Rs. 5 Crore otherwise he would be arrested on the ground of gang rape. On 7.1.2016, at 11.13 a.m. he received a call from a person who identified himself as Mohan Srivastava to pay payment of Rs. 5 crore urgently. The 1st instalment could be paid to Swaati Nirkhi, Shashank Saxena and Sanjay Saxena at Delhi in 2 days of Rs. 2.5 Crore. The Complainant has submitted that he was warned not to get in touch with the police, otherwise he would be required to face dire consequences. The complainant stated that he had kept the SHO informed of the subject matter since 10.12.2015 through his Complaints. He stated that his driver Sushil Kumar had informed him of the plan of Mohan Srivastava, Swaati Nirkhi, Sanjay Saxena and Shashank Saxena to get the entire family arrested, and then occupy his property worth 10 to 15 crore. It was further alleged that the Accused had sought to allure the driver of Respondent No.4 by offering a flat to him. It was requested that a criminal case be registered against Mr. Mohan Srivastava, Ms. Swaati Nirkhi, Mr. Sanjay Saxena and Shashank Saxena. 3. Pursuant to the registration of the FIR, a Charge Sheet was filed on 29.6.2017 in the Court of Metropolitan Magistrate, Rohini Court, Delhi against Accused No.1- Swaati Nirkhi, Accused No.2- Sanjay Saxena, Accused No.3- Shashank Saxena, Accused No.4- Mohan Srivastava @Akahauri Onkar Nath, and Accused No.5- Jugal Kishore Yadav under Section 389,419,506,120B and 34 IPC. A list of 23 witnesses was mentioned in the Charge Sheet, out of which 16 were official witnesses, and 7 were non- official witnesses. 4. On 28.11.2017, the Metropolitan Magistrate, 461, Rohini Court, Delhi took cognisance, and issued summons to the Accused persons. 5. In the meanwhile, the Accused Ms. Swaati Nirkhi, Mr. Sanjay Saxena and Shashank Saxena filed the present Transfer Petition (Crl.) No.262 of 2018 before this Court, praying that the trial of Criminal No. 3483 of 2017 titled as State v. Swaati Nirkhi and Ors. arising out of FIR No. 39/2016 pending before the Court of the Metropolitan Magistrate, North West, Rohini Courts, New Delhi be transferred to the Ld. Metropolitan Magistrate at Allahabad (Prayagraj) U.P. 6. This Court vide ex-parte Order dated 18.5.2018 allowed the Transfer Petition and directed that the criminal proceedings in the afore-mentioned case shall stand transferred to the Court of Metropolitan Magistrate at Allahabad, U.P from the Court of Metropolitan Magistrate, 461, Rohini Court, Delhi. Since the Order was being passed ex-parte, it was left open to the Respondents to approach this Court, if they were aggrieved by the same. 7. The Complainant in the FIR i.e. Respondent No.4 in the Transfer Petition filed M.A. No. 1589 of 2018 praying for recall of the Order dated. 18.5.2018 passed by this Court in T.P. No (Crl.) 262 of 2018. The said M.A was dismissed vide Order dated. 5.6.2018. 8. The Respondent No.4 then filed Review Petition (Crl.) No. 671 of 2018 praying for Review of the Orders dated 18.5.2018 and 5.6.2018 passed by this Court. This Court issued Notice in the Review Petition vide Order dated 24.10.2018, and ordered hearing in open Court. 9. After hearing the parties at length, this Court vide detailed Judgment dated 28.1.2021 allowed the Review Petition, and recalled the Order dated 18.5.2018. It was directed that the Review Petitioner/ Complainant be impleaded as Respondent No.4 in the Transfer Petition. The Transfer Petition was then taken up for de novo hearing. 10. We have heard the Counsel for the parties at length, and perused the affidavits filed. The Petitioners have inter alia submitted that the Transfer Petition ought to be allowed since there are 9 cases pending between the parties in Allahabad, out of which 6 cases have been filed by the Respondent No.4, and 3 cases have been filed by the Petitioner No.1. Since the Respondent No.4 was prosecuting the 6 cases filed by him in Allahabad, and that no inconvenience would be caused if the proceedings arising out of the FIR in the present case, were tried by the Court of the Metropolitan Magistrate at Allahabad. It was further submitted that if the Petitioners were compelled to defend themselves in the proceedings at Delhi, it would be financially burdensome on them. However, while the Complainant and his family members who are a well to do family, would not be subject to any hardship or inconvenience. It was further submitted that the Petitioner No.1, due to the physical and mental assault and harassment suffered by her, was not able to work and earn her livelihood. Furthermore, her father i.e. Petitioner No.2 is a senior citizen suffering from various ailments and diseases. In these circumstances it was pleaded that the proceedings in the criminal case may not be transferred back from Allahabad to Delhi. 11. Respondent No.2 who has been named as co-accused in the FIR, has supported the case of the Petitioners. It has been submitted that he is discharging a public function as Deputy Mayor in Gaya, Bihar. It would be inconvenient for him to undertake such a long journey from Gaya to Delhi, as it would impinge on his time to discharge his public functions. 12. Respondent No.3 has submitted that he was not named in the FIR, but was added in the Charge Sheet as an accused on the basis of hearsay evidence. The prosecution of the case in Allahabad would be convenient for him to defend the baseless allegations made by Respondent No.4 against him. 13. The Transfer Petition was seriously opposed by Respondent No.4 on the ground that the allegations mentioned in the present FIR related to incidents which had occurred in New Delhi. Since no cause of action had taken place in Allahabad, the proceedings must be tried by the Court of competent jurisdiction in New Delhi. It was further submitted that out of the 23 witnesses, 12 official witnesses are situated in New Delhi. If the case is transferred out of Delhi, it would impinge upon their official work, since they would be required to travel to Allahabad in these proceedings. With respect to the cases filed by the present Petitioner in Allahabad, no incriminating material has been found against the Respondent No.4 in the FIRs instituted in State of U.P., even after being investigated several times by the Allahabad Police, Crime Branch Allahabad, and DSP Level Gazetted Lady Police Officer. It was further submitted that the Petitioner No.1 herself had instituted 13 cases in Courts in Delhi, Allahabad and before this Court, which she has prosecuted without expressing any difficulty, and there is no reason why an exception should be made in the present case. It was further submitted that the Petitioners in the T.P have not appeared before the Metropolitan Magistrate, Allahabad in 36 hearings from 9.7.2018 to 7.12.2020, even after the case was transferred to Allahabad (Prayagraj). The Transfer Petition was only a ruse to stall the proceedings in the present case. 14. In a criminal case, the place of inquiry and trial has to be by the Court within whose local jurisdiction, the crime was allegedly committed as provided by Section 177 of Cr.P.C. “177. Ordinary place of inquiry and trial. Every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed.” 15. The cause of action as per the averments in the FIR are alleged to have arisen in New Delhi, where the matrimonial home of the Petitioner is situated. This court has consistently held that a criminal case ought to be inquired and tried ordinarily where the cause of action has accrued1. Ramesh v. State of T.N., (2005) 3 SCC 507, Manish Ratan v. State of M.P (2007) 1 SCC 262 Bhura Ram v. State of Rajasthan, (2008) 11 SCC 103 Rajiv Modi v. Sanjay Jain, (2009) 13 SCC 241 Sunita Kumari Kashyap v. State of Bihar, (2011) 11 SCC 301 Amarendu Jyoti vs. State of Chattisgarh (2014) 12 SCC 362 Babita Lila and Ors. vs. Union of India (UOI) (2016) 9 SCC 647 Rupali Devi vs. State of Uttar Pradesh and Ors. (2019) 5 SCC 384 Rhea Chakraborty vs. State of Bihar and Ors. 2020 SCC OnLine SC 654 In Abraham Ajith v. Inspector of Police2, this Court held that : “12. The crucial question is whether any part of the cause of action arose within the jurisdiction of the court concerned. In terms of Section 177 of the Code, it is the place where the offence was committed. In essence it is the cause of action for initiation of the proceedings against the accused. 13. While in civil cases, normally the expression “cause of action” is used, in criminal cases as stated in Section 177 of the Code, reference is to the local jurisdiction where the offence is committed. These variations in etymological expression do not really make the position different. The expression “cause of action” is, therefore, not a stranger to criminal cases. 14. It is settled law that cause of action consists of a bundle of facts, which give cause to enforce the legal inquiry for redress in a court of law. In other words, it is a bundle of facts, which taken with the law applicable to them, gives the allegedly affected party a right to claim relief against the opponent. It must include some act done by the latter since in the absence of such an act no cause of action would possibly accrue or would arise. 15. The expression “cause of action” has acquired a judicially settled meaning. In the restricted sense cause of action means the circumstances forming the infraction of the right or the immediate occasion for the action. In the wider sense, it means the necessary conditions for the maintenance of the proceeding including not only the alleged infraction, but also the infraction coupled with the right itself. Compendiously, the expression means every fact, which it would be necessary for the complainant to prove, if traversed, in order to support his right or grievance to the judgment of the court. Every fact, which is necessary to be proved, as distinguished from every piece of evidence, which is necessary to prove such fact, comprises in “cause of action”. (2004) 8 SCC 100 16. The expression “cause of action” has sometimes been employed to convey the restricted idea of facts or circumstances which constitute either the infringement or the basis of a right and no more. In a wider and more comprehensive sense, it has been used to denote the whole bundle of material facts. 17. The expression “cause of action” is generally understood to mean a situation or state of facts that entitles a party to maintain an action in a court or a tribunal; a group of operative facts giving rise to one or more bases for sitting; a factual situation that entitles one person to obtain a remedy in court from another person. In Black's Law Dictionary a “cause of action” is stated to be the entire set of facts that gives rise to an enforceable claim; the phrase comprises every fact, which, if traversed, the plaintiff must prove in order to obtain judgment. In Words and Phrases (4th Edn.), the meaning attributed to the phrase “cause of action” in common legal parlance is existence of those facts, which give a party a right to judicial interference on his behalf. 18. In Halsbury's Laws of England (4th Edn.) it has been stated as follows: “ ‘Cause of action’ has been defined as meaning simply a factual situation, the existence of which entitles one person to obtain from the court a remedy against another person. The phrase has been held from earliest time to include every fact which is material to be proved to entitle the plaintiff to succeed, and every fact which a defendant would have a right to traverse. ‘Cause of action’ has also been taken to mean that a particular act on the part of the defendant which gives the plaintiff his cause of complaint, or the subject-matter of grievance founding the action, not merely the technical cause of action.” 16. In the present case, we find that most of the prosecution witnesses are situated in Delhi. That 12 official witnesses are serving in New Delhi. If the Transfer Petition is allowed, they would be required to travel from New Delhi to Allahabad (Prayagraj), which would cause hinderance in performing their official duties. 17. The alleged apprehension of the Petitioners and Respondent No.2 and 3 do not constitute any exceptional circumstances for transferring the criminal case from Delhi to Allahabad (Prayagraj). A three judge bench of this Court in Harita Sunil Parab v. State (NCT of Delhi)3, held that : “8. The apprehension of not getting a fair and impartial enquiry or trial is required to be reasonable and not imaginary, based upon conjectures and surmises. No universal or hard-and-fast rule can be prescribed for deciding a transfer petition, which will always have to be decided on the facts of each case. Convenience of a party may be one of the relevant considerations but cannot override all other considerations such as the availability of witnesses exclusively at the original place, making it virtually impossible to continue with the trial at the place of transfer, and progress of which would naturally be impeded for that reason at the transferred place of trial. The convenience of the parties does not mean the convenience of the petitioner alone who approaches the court on misconceived notions of (2018) 6 SCC 358 apprehension. Convenience for the purposes of transfer means the convenience of the prosecution, other accused, the witnesses and the larger interest of the society. The charge-sheet in FIR No. 351 of 2016 reveals that of the 40 witnesses, the petitioner alone is from Mumbai, two are from Ghaziabad, and one is from Noida. The charge-sheet of FIR No. 1742 of 2016 is not on record. A reasonable presumption can be drawn that the position would be similar in the same also. 9. In Mrudul M. Damle v. CBI [Mrudul M. Damle v. CBI4 , it was noticed that early conclusion of the trial becomes much more difficult involving more expenses for the prosecution by it having to bear travelling expenses of official and non-official witnesses and all of which ultimately causes the trial to linger on for years.” 18. The counsel for the Petitioner at the conclusion of hearing in the present transfer petition made a prayer for continuation of Interim Bail from arrest, which was granted by the High Court of Allahabad pursuant to the Order passed in the Transfer Petition. It would be open for the Petitioner to move the appropriate Court in New Delhi for interim relief after the proceedings are transferred. 19. In view of the discussion above, the Transfer Petition is dismissed. (2012) 5 SCC 706 The proceedings arising out of FIR No. 39 of 2016 which were transferred to the Court of Metropolitan Magistrate at Allahabad (Prayagraj), Uttar Pradesh are directed to be transferred back to the Court of Metropolitan Magistrate 461 North West, Rohini Courts, New Delhi. 20. The Registry is directed to transmit a copy of this Order to the Courts of the Metropolitan Magistrate at Allahabad (Prayagraj), Uttar Pradesh and the Metropolitan Magistrate 461 North West, Rohini Courts, New Delhi. Parties are directed to appear before Court of Metropolitan Magistrate 461 North West, Rohini Courts, New Delhi on 15th April, 2021. There will be no Order as to costs. Pending Applications, if any, are accordingly disposed of. ......................................................J. (ASHOK BHUSHAN) ......................................................J. (INDU MALHOTRA) NEW DELHI; MARCH 09, 2021