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Khoday India Limited v. The Scotch Whisky Association & Others S

Bombay High Court

Mar 21, 2016

Judgment

Subsequent
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Structured Summary of the Opinion

Factual and Procedural Background

The Appellant is the original defendant and the Respondents are the original plaintiffs in a suit instituted in 1987 for passing off. The plaintiffs allege that the defendant used the word "SCOT", a lion rampant crest and the description "Distilled from the Finest Malt and Blended with Choiceste Whiskies by Scotch Experts under Government Supervision" on labels/cartons of whisky not distilled and matured in Scotland, thereby passing it off as "Scotch Whisky".

After written statements were filed and issues framed (15 June 2006), the Appellant filed multiple chamber summonses seeking rejection of the plaint under Rule 11 of Order VII of the Code of Civil Procedure (CPC) or otherwise raising a plea of res judicata. An earlier Chamber Summons (No. 1783 of 2008) was dismissed by the Single Judge by order dated 7 October 2009; Appeal No. 150 of 2010 against that dismissal was dismissed by the Division Bench on 12 September 2011 (which noted the plea of res judicata had not been raised in the written statement). The Appellant obtained disposal of an SLP (Special Leave Petition) by an order dated 27 January 2012 directing the Single Judge to decide the old suit expeditiously (within three months).

Subsequent amendments were allowed to both the plaint and the written statement (orders dated 16 July 2012). On the basis of a geographical indication registration dated 27 January 2011 for "Scotch Wisky", the plaintiffs were permitted to amend the plaint. The Supreme Court disposed of a challenge relating to that amendment by order dated 5 November 2012, keeping all contentions open but requesting disposal within three months.

On 12 February 2013 the Appellant filed Chamber Summons No. 170 of 2013 invoking Rule 11 Order VII CPC seeking rejection of the plaint. The learned Single Judge dismissed that Chamber Summons by order dated 1 April 2014. The Appellant filed the present Letters Patent Appeal challenging that order.

Legal Issues Presented

Whether the plaint could be rejected under Rule 11 of Order VII of the Code of Civil Procedure at the stage and in the manner sought by the Appellant.
Whether the suit was barred by res judicata such that rejection under Rule 11 was mandated on the face of the plaint and its annexures.
Whether, in view of earlier orders (including directions by the Apex Court to dispose of the old suit expeditiously), the question raised by the Chamber Summons could be decided as a preliminary issue by the Single Judge.

Arguments of the Parties

Appellant's Arguments

The Appellant contended that rejection of the plaint under Rule 11, Order VII of the Code could be considered at any stage of proceedings and that the suit could be disposed of by rejection of the plaint in furtherance of the Apex Court's directions for expeditious disposal.
The Appellant argued that the bar of res judicata was attracted on the face of the plaint and therefore the plaint ought to be rejected under Rule 11.
In affidavits supporting the Chamber Summons (No. 170 of 2013) the Appellant also invoked provisions of Section 11 of the Code and sought dismissal under Section 151 of the Code, contending the amended suit was not maintainable.

Respondents' Arguments

The Respondents (original plaintiffs) supported the impugned order dismissing the Chamber Summons and opposed the Appellant's contentions seeking rejection of the plaint.
The Respondents argued that certain decisions relied upon by the Appellant (Abdul Rahman v. Prasony Bai and Shipping Corporation of India Ltd. v. Machado Brothers) were fact-dependent and not applicable to the present case.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
(2008) 10 SCC 723 (referred to in the opinion as a judgment of the Apex Court)	Cited by the Appellant as authority that the issue involved in the suit had been decided by the Apex Court.	The Court records that the Appellant relied upon this reported Apex Court decision when earlier seeking rejection of the plaint; it formed part of the factual background to prior chamber proceedings but the Division Bench had noted that res judicata had not been pleaded in the written statement at that stage.
Abdul Rahman v. Prasony Bai	Relied upon by the Appellant (as authority for deciding preliminary issues).	The Single Judge observed that conclusions in Abdul Rahman were fact-specific and therefore plaintiffs were correct in submitting that those observations could not be applied indiscriminately to the present case; the Court treated the authority as not controlling on the facts here.
Shipping Corporation of India Ltd. v. Machado Brothers	Relied upon by the Appellant (as authority for deciding preliminary issues).	The Single Judge noted that the observations and conclusions in this judgment were based on the facts of that case and, in view of the particular procedural history and orders in the present matter, it was not open for the defendants to contend that the question should be decided as a preliminary issue relying on that authority.

Court's Reasoning and Analysis

The Court's analysis focused on the limited scope of Rule 11, Order VII CPC and the procedural history of prior chamber proceedings and appellate orders:

The Court reiterated the legal proposition that when a prayer for rejection of the plaint under Rule 11 is considered, the Court may examine only the averments in the plaint and annexures; nothing beyond the plaint can ordinarily be looked into for that purpose.
On that premise, the Single Judge could consider res judicata under Rule 11 only if the averments in the plaint itself showed that the suit was barred by res judicata.
The Court observed that an earlier Chamber Summons for rejection of the plaint on the ground of res judicata had been rejected by the Single Judge (order dated 7 October 2009) and that the Division Bench, while dismissing the Appellant's appeal (order dated 12 September 2011), had confirmed that order for different reasons and granted liberty to raise res judicata in the written statement. The order of the Single Judge on that earlier Chamber Summons had thus become final for the purposes of that procedural exercise.
Because the written statement was later amended (pursuant to Chamber Summons No. 424 of 2012 made absolute on 16 July 2012) to include the plea of res judicata, the Court held that the same prayer for rejection of the plaint could not be re-decided on the identical ground under Rule 11 when the prior chamber process had already been finally determined; the new context required treating the plea as a substantive plea to be decided on the merits.
The Court further reasoned that Supreme Court orders (27 January 2012 and 5 November 2012) directing the High Court to decide the old suit expeditiously (within three months) meant that the learned Single Judge was justified in not deciding the Chamber Summons No. 170 of 2013 on merits as a preliminary issue — the Single Judge was expected to proceed to final hearing and decision in accordance with the higher court's directions.
With respect to the precedent authorities (Abdul Rahman and Shipping Corporation v. Machado), the Single Judge noted those decisions were fact-specific and therefore their observations could not be applied blindly to require preliminary determination in this case given the procedural orders and amendments that had taken place.
Finally, although the Chamber Summons for rejection was dismissed, the Court noted that the additional issue framed on the plea of res judicata (arising from the amended written statement) would be decided on its own merits in due course, as that issue had not been decided on merits yet.

Holding and Implications

Holding: The Letters Patent Appeal is dismissed subject to the observations recorded in the opinion. The Court declined to interfere with the impugned order of the learned Single Judge dismissing Chamber Summons No. 170 of 2013.

Implications and direct effects:

The impugned order dismissing the Chamber Summons for rejection of the plaint under Rule 11, Order VII CPC is upheld.
The learned Single Judge was justified in refraining from deciding the Chamber Summons on merits in view of the Supreme Court's directions to dispose of the old suit expeditiously; the plea of res judicata will nevertheless be decided subsequently on its own merits as an issue framed on the amended pleadings.
No order as to costs was made (the appeal was dismissed with no order as to costs).
Notice of Motion No. 782 of 2015 does not survive and stands disposed of.
The opinion does not purport to lay down any new legal precedent beyond application of settled procedural principles (and the matter-specific application of fact-dependent authorities); the decision's immediate effect is procedural and specific to the parties and the case history described.

Show all summary ...

1. Heard learned Senior Advocate appearing for the Appellant and learned Senior Advocate appearing for the Respondent no. 1. The Appellant is the original defendant and the Respondents are original plaintiffs. What is impugned in this Letters Patent Appeal is an order dated 1st April 2014 passed by the learned Single Judge on chamber Summons No. 170 of 2013 taken out by the Appellant for rejection of the plaint under Rule 11 of Order VII of Code of Civil Procedure, 1908 (‘Code’ for short).

2. The suit is filed by Respondents as an action for passing off by the Appellant, inter alia, seeking a declaration that by using in respect of whisky not distilled and matured in Scotland, the label and carton containing the word “SCOT” and/or the crest of a lion rampant and/or the description “Distilled from the Finest Malt and Blended with Choiceste Whiskies by Scotch Experts under Government Supervision”, the Appellant is passing off its whisky as “Scotch Whisky”.

3. In the suit of the year 1987 after the written statement was filed, on 15th June 2006, issues were framed by learned Single Judge. A Chamber Summons being Chamber Summons No. 1783 of 2008 was taken out by the Appellant on 12 February, 2013 for rejection of the plaint by invoking Rule 11 of Order VII of the code. The rejection was sought on the ground that the issue involved in the suit was already decided by the Apex Court on 27 May, 2011. Learned Single Judge by judgment and order dated 7 October 2009 dismissed the Chamber Summons for rejection of the plaint. The order was subjected to a challenge by present Appellant by preferring Appeal No. 150 of 2010, which was dismissed by order dated 12 September 2011. The Division Bench while dismissing the Appeal No. 150 of 2010, by order dated 12 September 2011, held that the suit could not have been dismissed at that stage because amongst other reasons, the issue of res-judicata was not raised by the Appellant in their written statement. A Special Leave Petition (Civil) No. 1106 of 2012 was preferred by present Appellant. By order dated 27 January 2012, the SLP was disposed of by directing the learned Single Judge to decide old suit of 1987 as expeditiously as possible and in any event within three months from the date of communication of the said order. After the aforesaid order of Apex Court dated 27 January 2012, a Chamber Summons was taken out by the Appellant for amendment of the written statement for incorporating the plea of bar of res-judicata. The said Chamber Summons No. 424 of 2012 was made absolute by order dated 16 July 2012.

4. On the basis of the registration granted on 27 January, 2011 to “Scotch Wisky” as a geographical indication under the provisions of the Geographical Indications of Goods (Regulation and Protection) Act, 1999, the Respondents took out Chamber Summons No. 488 of 2012 for amendment of the plaint. While allowing the said Chamber Summons on 16 July 2012, the learned Single Judge observed that the question whether the Geographical Indications of Goods (Registration and Protection) Act, 1999 could be applicable to the facts of the present case or not will have to be decided after evidence is led by the parties and the parties are heard. We must note here that the order dated 16 July 2012 passed by the learned Single Judge in chamber Summons No. 488 of 2012 for amendment of the plaint was challenged before the Apex Court by filing a Special Leave Petition which was disposed of by order dated 5 November 2012. Though special leave petition was not entertained, all contentions of the parties were kept open and the learned Single Judge was directed to dispose of the matter within a period of three months.

5. It is after this order that on 12 February 2013, Chamber Summons No. 170 of 2013 was taken out by present Appellant invoking Rule 11, Order VII of Code for rejection of the plaint. By the impugned order, the learned Single Judge dismissed the Chamber Summons.

6. Learned Senior Advocate appearing for the Appellant submitted that the prayer for rejection of plaint under rule 11 Order VII of the Code could have been considered at any stage of the proceedings and the suit could have been disposed of in terms of the directions of Apex Court even by the rejection of the plaint. Learned Senior Advocate invited our attention to the findings recorded in the impugned order and in particular observations made by learned Single Judge in paragraph 10 of the impugned order that the issues which were settled earlier by the Division Bench by judgment and order dated 12 September, 2011 cannot be reagitated. Assailing the said finding of learned Single Judge, the submission is that the learned Single Judge ought to have decided the Chamber Summons on its own merits. he urged that the bar of resjudicata was attracted on reading of the plaint. Learned senior counsel for the original plaintiffs supported the impugned order.

7. We have carefully considered the submissions. In the first Chamber Summons being Chamber Summons No. 1783 of 2008 taken out by the Appellant, the contention was that the plaint be rejected on the ground that the issue involved in the suit is decided by the judgment of Apex Court dated 27 May 2011 reported in (2008) 10 SCC 723. By the order dated 7 October 2009, said Chamber Summons was rejected by learned Single Judge. Appeal No. 150 of 2010 was carried by the Appellant before the Division Bench for challenging the said order. The Division Bench dismissed the appeal by judgment and order dated 12 September 2011 In paragraph no. 1 of the said order, the Division Bench observed that in the earlier Chamber Summons, it was not the case of the Appellant that the suit was barred by res-judicata. The Division Bench noted the submission made by the Appellant that in that case, section 151 of the code could have been invoked for dismissing the suit as barred by res-judicata. Ultimately, the Division Bench observed that in the written statement filed by the Appellant, the plea of res-judicata was not raised and, therefore, the suit could not have been dismissed on the basis of Chamber Summons taken out by the Appellant. Therefore, the order of learned Single Judge was confirmed by the Division Bench for different reasons. The Division Bench while dismissing the Appeal, granted liberty to the Appellant to raise a plea of res-judicata in the written statement. It is this order of the Division Bench which was challenged by the Appellant in Special Leave Petition No. 1106 of 2012, which was disposed of by the Apex Court by order dated 27 January 2012. The order of the Apex Court reads thus:

“We have heard the learned counsel for the parties at some length. We are not inclined to interfere in the matter. However, in the peculiar facts and circumstances of this case, we deem it appropriate to request the High court of Judicature at Bombay to decide the old suit of 1987, being Civil Suit No. 1729/1987, as expeditiously as possible, in any event, within three months from the date of communication of this order. With these observations this special leave petition is disposed of.”

(Underline supplied)

8. Thereafter, as stated earlier, Chamber Summons No. 424 of 2012 was taken out by the Appellant for amendment of the written statement for incorporating the plea of resjudicata. The said Chamber Summons was made absolute. Chamber Summons No. 484 of 2012 filed by the Respondents-Plaintiffs for amendment of the plaint was also made absolute. Both the orders were passed by learned Single Judge on 16 July 2012. As pointed out earlier, the order dated 16 July 2012 passed in Chamber Summons taken out by the Respondents-Plaintiffs was confirmed by the Apex Court by the order dated 5 November 2012. The said order reads thus:

“We notice that the Suit is of the year 1987 and on that simple ground we are not entertaining this special leave petition. However, all the contentions available to the parties are kept open to be urged by the parties before the court below.

Considering the fact that the Suit is of the year 1987, the learned Single Judge of the Bombay High court is requested to dispose of the matter within a period of three months.

The special leave petition is, accordingly, disposed of.”

(Underline supplied)

9. On 12 February 2013, Chamber Summons No. 170 of 2013 was taken out by present Appellant for the rejection of the plaint. We have perused the affidavit-in-support of the said Chamber Summons in particular. Paragraph 15 which refers to the subsequent amendment made to the plaint. In paragraph 14 it is contended that the suit is barred by provisions of Section 11 of the Code and therefore, the Court ought to have rejected it on that ground. Paragraph 15 of the affidavit-in-support of the Chamber Summons raises a contention that amended suit is not maintainable. In paragraph 14, there is a contention that the suit be dismissed in exercise of the power under section 151 of the code.

10. From the prayers made in the Chamber Summons No. 170 of 2013 it is crystal clear that what was invoked was Rule 11 of Order VII of the code. While considering the prayer for rejection of the plaint, only the averments made in the plaint and the annexures to the plaint can be considered and nothing else. Therefore, at highest, under rule 11 Order VII of the Code, the learned Single Judge could have considered the prayer for rejection of plaint on the ground of res-judicata on the basis that the averments made in the plaint show that the suit is barred by, res-judicata. It is in that context that the learned Single Judge in paragraph 10 has observed that the issue which was admittedly canvassed by taking out earlier Chamber Summons for rejection of the plaint, could not be reagitated. The fact remains that the earlier order of the learned Single Judge by which the prayer for rejection of the suit on the ground of res-judicata was rejected has become final. The same prayer could not have been again considered by the learned Single Judge because there was an amendment made to the written statement. In paragraph 16 of the impugned order, the learned Single Judge has observed thus:

“16. With regard to the Defendants' contention that the question posed for the Court's consideration by the present Chamber Summons should be decided as a preliminary issue, and their reliance on the judgments in Abdul Rahman v. Prasony Bai (supra) and Shipping Corporation of India Ltd. v. Machado Brothers (supra) for the said purpose, the Plaintiffs are correct in submitting that the observations and conclusions in these two judgments were made by the Hon'ble Supreme Court on the basis of the facts in those two matters. In the present case, especially in view of the order dated 16 July 2012, it is now not open for the Defendants to contend that the question raised by the present Chamber Summons should be decided as a preliminary issue.”

11. Therefore, the learned Single Judge has observed that in the light of the order dated 16 July 2012 passed by the Apex Court, it is not open for the Appellant to contend that the question raised by the present Chamber Summons should be decided as a preliminary issue.

12. On special leave petition filed by the Appellant bearing No. 32062 of 2012, by order dated 5 November 2012, the Apex Court expected the learned Single Judge to decide the suit within a period of three months. In fact, under the earlier order dated 27 January 2012 passed by the Apex Court in Special Leave Petition No. 1106 of 2012 filed by the Appellant, a direction was already issued to decide the suit within three months from the communication of the said order.

13. Issues have been framed on the basis of amended pleadings. On the face of order dated 5 November 2012 of the Apex Court, which expected the learned Single Judge to take up the suit for final hearing and decide the same in three months, the learned Single Judge was justified in not deciding the Chamber Summons for rejection of plaint taken out by the Appellant on merits. However, notwithstanding the impugned order, the additional issue framed on the basis of the plea of res-judicata will be decided on its own merits as the said issue has not been decided on merits.

14. Therefore, we do not see any reason to interfere with the impugned order passed by learned Single Judge. Subject to what is observed above, the appeal is dismissed with no order as to costs. Notice of Motion No. 782 of 2015 does not survive and stands disposed of as such.