The Delhi High Court in Review: November, 2020 [Part II]

With its vast and varied case-docket, the High Court of Delhi has occasion to pronounce verdicts on diverse subjects and myriad areas of law. This two-part monthly column attempts to offer a brief over-view of the important pronouncements of the High Court of Delhi over the period of the relevant month in review.

While an attempt has been made to ensure the widest possible coverage of the various judgments rendered, comprehensive analysis and critique of the individual judgments is eschewed for the sake of brevity.

INTELLECTUAL PROPERTY RIGHTS

In Astrazeneca AB v. Torrent Pharmaceuticals Limited, the Court observed that as per Section 64(1)(a) of the Patents Act,1970 (‘Patents Act’) if the subsequent claim was claimed in a valid claim of earlier priority date, contained in the complete specification of another patent granted, the same would be vulnerable to revocation. The Court further observed that the fact that an objection of double patenting was raised by the US Patent Office (‘USPTO’), for the same invention, was required to be brought to the attention of the concerned Patent Office, for there to be full compliance with Section 8(2) of the Patent Act, and failing which the patent was vulnerable.

In RB Health (US) LLC v. Dabur India Limited, the Court reiterated the classical three-pronged test for adjudicating a case of passing off, firstly that there must be necessary good will and reputation in the goods or services offered interlinked with the getup, secondly that the defendant’s misrepresentation has led the consumers to believe that the good actually originated from plaintiff and, thirdly that this action of the defendant has resulted in damage or likely to result in damage. The Court accordingly noted that it was also important for the party instituting a passing off action to demonstrate that it enjoys sufficient goodwill in the concerned jurisdiction of the Court. The Court further observed that though taglines and indication/signs can acquire a secondary meaning or significance over a period of time, their mere use is not enough to establish distinctiveness at a preliminary stage and the same would be an aspect which would fall within the realm of evidence.

In Astrazeneca AB v. Intas Pharmaceuticals Private Limited, the Court reiterated that the mere grant of patent by the patent office does not guarantee its validity or provide any shield of inviolability. The Court further observed that in the context enforcement of patents concerning drugs, especially life-threatening diseases, the Court has to be vigilant against the tactic of ever-greening without any inventive step and the defendant was required, at the preliminary stage of injunction, only to demonstrate that a credible challenge had been made to the validity of the patent and that the patent is accordingly vulnerable. The Court observed that even if the concerned Examiner of Patents did not raise the issue at the relevant stage, the defendants were definitely entitled to raise the same in defence to an infringement action.

In UFO Contemporary, INC. v. Creative Kids Wear (India) Private Limited, the Court held that even if the good in question is not commercially sold within India but the good in question is being manufactured by putting the relevant trade-mark and exported outside India, the rigor of Section 56 of the Trade Marks Act, 1999 would apply.

LABOUR AND SERVICE LAW

In South Delhi Trade Unionist v. Union of India, the Court held that no person can be said to have a vested right to stake a claim that the Labor Commissioner’s office must function from a particular location, and this was a pure policy decision to be taken by the authority concerned.

In Shivnath Tripathi v. The Registrar General High Court of Delhi, the Court reiterated the presumption of the correctness of an answer-key, and held that the answer key must be proved to be incorrect beyond any doubt and as demonstrably wrong before a candidate could be given any relief qua an answer which was contrary to the answer-key.

In Akash Sharma v. Union of India, while rejecting the challenge to the findings of the Appeal Medical Board, the Court reiterated that in the absence of any challenge premised upon improper constitution of the board, the findings rendered by the board could not be sought to be called into question upon merits.

In Commander Ashley Derrick v. Union of India, the Court reiterated that interference with a transfer order can only be justified on the ground of violation of the rules or on account of existence of mala fides and not otherwise.

In Deepak Kumar v. Union of India, the Court reiterated that in each and every case where a candidate is rejected on the ground of lack of medical fitness, he/she cannot be permitted to be examined further by a research and referral hospital inasmuch as this would defeat the very basis for setting up the medical board and review medical board.

In Disabled War Veterans (India) Regd. v. Union of India, the Court observed that seeking far-ranging and generalized reliefs in relation to payment of gratuity without any particulars about the constitution of the petitioner society cannot be granted, and it was imperative that the concerned aggrieved persons should approach the Court in this regard.

In Dr. Paritosh Verma v. Union of India, the Court held that the mandate under Rule 176 of the Border Security Force Rules, 1969 requiring supply of inquiry proceedings would not apply in a scenario where the concerned Court of Inquiry had not arrived at any opinion, whether in favour of or against the petitioner; nor had any Security Force Court been constituted to try the petitioner.

In EX-LC Shreya Manhas v. Union of India, the Court held that the scheme for grant of ex-gratia awards for disablement or death during training could legitimately be denied to cadets/trainees inasmuch as they had not yet entered into active service and cannot claim equality with those who had actually served the Armed Forces, before misfortune befell them.

In Gaurav Singh v. Union of India, the Court deprecated the whimsical and discriminatory approach of the Union Public Services Commission in permitting certain candidates who had originally submitted defective certificates to submit the proper certificates at a subsequent date, while denying the same opportunity to the similarly placed petitioners.

In Nishant v. Union of India, the Court held that the decision to permit further examination by a review medical board was to be taken as per the discretion of the authority concerned in terms of the applicable rules; and unless the discretion was shown to be exercised in a patently irregular manner, no case for interference was made out.

In Group Captain Suman Roy Chowdhury v. Union of India, in the context of the right to participate in court martial proceedings, the Court held that though it has not yet been defined as to what the term ‘full participation’ means, however, the standard of a criminal trial taking place only in the presence of the accused would be applicable at the court martial proceedings; and not at a pre-trial stage or at the stage of a preliminary fact-finding inquiry.

In Harjinder Singh v. Union of India, the Court reiterated that Section 11(1) of the Central Reserve Police Force Act, 1969 empowers a Commandant to impose certain other punishments which are described within the section as ‘minor’, as a consequence of the disciplinary proceeding, in addition to imposing a major punishment.

In Akshay Kumar v. Union of India, the Court held that Patent Examiners and Assistant Controllers of Patents are holders of a ‘civil post’ and, therefore, any grievance as regards their service condition are required to be agitated before the Central Administrative Tribunal (‘CAT’).

While reiterating that the only remedy available to an employee who is illegally discontinued from service is to sue for damages, the Court in Deepak Wankhede v. India Renewable Energy Development Agency, held that a Court would give a declaration that a contract subsists and deem the employee to be in service against the consent of the employer in three situations viz. firstly, where a public servant is removed in contravention of Article 311 of the Constitution, secondly, where a worker is reinstated on being dismissed under Industrial Law, and thirdly where a statutory body violates mandatory provisions of a statute.

In Pramod Kumar v. Pawan Hans Limited through Chairman cum Managing Director, while refusing to interfere with an order of transfer, the Court observed that when there is a long remaining tenure of four years before superannuation, the transfer cannot be sought to be interdicted on the ground of a last-leg posting.

In Dr. Pradeep Shinde v. Jawaharlal Nehru University through its Vice Chancellor, the Court observed that reservation roasters are required to be post-based and there cannot be exchange of reservation points. It was further observed that even de-reservation is permissible only in exceptional cases and only after following a very rigorous process.

In S. B. Singh v. National Textile Corporation, the Court directed release of amounts due towards leave encashment and employer’s share of Provident Fund (‘PF’) as retirement benefits inasmuch as the Court noted that the petitioner had admittedly superannuated and the charge-sheet was issued to him only after superannuation. The Court further observed that in the absence of any rule prohibiting the entitlement of an employee to the employer’s share of PF, then the employee cannot be deprived of the said benefits when disciplinary proceedings are initiated after superannuation.

In Sandhya Bindal v. State of NCT of Delhi, the Court reiterated that resignation being one of the modes of cessation of service, any controversy which is related to the same would be within the purview of the Delhi School Education Tribunal under the Delhi School Education Act, 1973.

In Shailendra Chopra v. National Aviation Company of India Limited, the Court observed that in the appropriate circumstances, it can direct the grant of medical benefits as an interim measure instead of postponing the adjudication of the entitlement thereof to the date of final disposal of the writ petition.

In Suman Kumari v. Nand Kishor, while elaborating upon the rationale behind designation of a nominee by an employee, the Court held that the purpose behind the identification of a nominee from the perspective of an employer is to relieve itself of the obligation to pay the benefits, irrespective of the right of a person who might actually be entitled in law to the said benefits as the legal heir of the deceased employee. The Court, however, observed that nomination cannot be construed as the equivalent of a ‘will’ and that it cannot circumscribe the legal rights in relation to the disposal of the assets. Therefore, in the end result, the liability of the employer/custodian is discharged by disbursing the funds to the nominee and thereafter if there is an inter-se dispute between the lawful heirs, they could resort to appropriate remedies for identification of their shares and ultimate disbursal of the amounts to themselves from the nominee.

In Khadi Gramodyog Bhawan v. The General Secretary, the Court held that Section 19 of the Industrial Disputes Act, 1947 does not stipulate that an award would lose its enforceability after the expiry of the period of one year, and if the award is for payment of money, then the same is executable, as if, the decree of a Civil Court, with a limitation period of twelve years.

In Rajender Kumar v. Deputy Labour Commissioner, the Court observed that in the light of the second proviso to Section 20 of the Minimum Wages Act, 1948 the delay in filing an application beyond a period of six months from when the minimum wages became payable is condonable. The Court also cautioned the authority that it should approach the issue of condonation of delay with compassion, when the applicant before it hailed from a disadvantaged socio-economic background.

In United News of India v. Regional Provident Fund Commissioner, Delhi (Central), while commenting adversely on the functioning of the Employees’ Provident Fund Organization, including non-service of notices and passing of ex-parte orders, the Court passed a slew of directions to streamline the process.

In Zahoor Ahmad v. Deputy Labour Commissioner, the Court observed that when a completely new establishment had been set up by the new owner in the same premises and a new Employees Provident Fund number had also been allotted, then the said establishment could not be said to have the responsibility towards the employees of the erstwhile establishment which was earlier operating from the premises.

In Five S Man Power Service Private Limited v. Commissioner Under Employees Compensation Act, 1923, the Court observed that under the Employees Compensation Act, 1923 there was no question of the contractor being once again asked to deposit the compensation amount once the principle employer had already made the requisite deposit.

LIMITATION

In North Delhi Municipal Corporation v. Avinash Bansal, the Court reiterated that the usual stereotypical explanation of administrative and procedural red tape could no longer be a ground to justify huge delay by a government department in approaching the Court.

MATRIMONIAL DISPUTES, CUSTODY AND MAINTENANCE

In Kirti Nagpal v. Rohit Girdhar, the Court held that a false allegation of impotency would amount to cruelty within the meaning of the Section 13(1)(ia) of the Hindu Marriage Act, 1955 and also observed that allegations in pleadings, as they are brought into the public domain and are expected be considered by the Court to arrive at a verdict, must be treated with seriousness, and reckless allegations cannot be permitted to be made without any consequence.

In Sergeant Ajith Kumar Shukla v. Union of India, the Court held that Section 28 of the Air Force Act, 1950 (‘Air Force Act’) does not extend immunity to the personnel of the Air Force from attachment of pay and allowances towards maintenance of the wife and dependent children. The Court further held that there is sufficient power vested with the competent authorities under the Air Force Act to award the said maintenance, and this is not a function only available to a Court.

In Amit Dhiman v. Boski Dhiman, the Court reiterated that merely because the wife was capable of earning would not be sufficient reason to reduce the maintenance awarded by the Family Court.

In Harjaspreet Singh v. Jasdeep Kaur, while rejecting the contention of the suspect seeking deduction in the maintenance payable to the estranged wife on the ground that he had a responsibility to maintain his father, the Court noted that the father was admittedly a pensioner.

PERSONAL LAW AND SUCCESSION

In Surinder Pal Kaur v. State, the Court held that even though a beneficiary under a will is not required to furnish an administration bond, however, once the same has been furnished, then the same can only be discharged only after the obligations mentioned therein have, demonstrably, been duly performed.

RENT CONTROL

In proceedings under the Delhi Rent Control Act, 1958 (‘Delhi Rent Control Act’), the Court in R. K. Kainth through Rakesh Kainth, Guardian v. Siri Swadesh Kumar Baghi, held that though a tenant who had made out a prima-facie case is entitled to an interim stay against execution of the decree of eviction, however, the same should be subject to the requisite terms so as to protect the interests of the landlord. The Court observed that the yardstick for such a measure cannot be restricted only to the loss of earnings of the business that the landlord proposes to start in the said premises but can also include other considerations, like market rent, being earned by similarly situated properties. The Court further observed that the financial capacity of the tenant cannot, under normal circumstances, be a relevant criterion for a such determination. The Court further held that though under Section 14(1)(c) Delhi Rent Control Act there is an embargo against the landlord further letting out the premises to a third-party after obtaining possession within a period of three years thereof, however, requisite permission in this regard can be sought from the Rent Controller.

While deprecating the practice of repeatedly adjourning execution petitions of decrees which have not been stayed and are executable, the Court in Savitri Devi v. Santoshi Bhutani, observed that police-aid can be granted even at the first instance to ensure prompt delivery of possession to a decree holder in proceedings under the Delhi Rent Control Act.

In Pawan Kumar Sethi v. Anil Kumar Singhal, the Court held that the mere making of a bald statement as regards the children of the landlord allegedly using an existing portion of the premises for carrying on business without any cogent evidence in this regard would be liable to be discarded.

SPECIFIC RELIEF AND PROPERTY

In Savita Anand v. Krishna Sain, the Court pointed to the difference between fiduciary relationships and filial relationships in the context of Section 4(3)(b) of the the Prohibition of Benami Property Transactions Act, 1988 and noted that the former envisaged the existence of a duty or an obligation in excess of a purely familial one.

In Vikas Jain v. Brijwasi Infratech Private Limited, the Court observed that while fixing the fair market value of a property, a Court is not bound by the Guidelines for Valuation of Immovable Properties 2009” issued by the Directorate of Income Tax and is entitled to evaluate the relevant material on the record including the circle rates as also the data reflected on reputed real-estate websites.

In Prashant Goyal v. Indranil Wadhawa, the Court reiterated that an oral agreement to sell cannot be recognized in view of the amended Section 53A of the Transfer of Property Act, 1882 (‘Transfer of Property Act’). It was further observed that a buyer cannot avail the benefit of Section 53A of the Transfer of Property Act if the agreement to sell is not registered and when a tenant enters into such an agreement to sell for buying the tenanted premises, though the tenant can seek specific performance, however, the tenant acquires no right to retain possession till a sale deed is registered in his/her favour.

STAMP ACT

While allowing a claim for refund of stamp duty, the Court in Kewal Kishore v. Assistant Director MIG(H), construed Sections 49 & 50 of the Indian Stamp Act, 1899 and reiterated that an authority could not be permitted to retain the amount of stamp duty for the same transaction twice over.

TAX, EXCISE AND CUSTOMS

In Skyland Builders Private Limited v. Income Tax Officer, while reiterating that the question whether income is in the nature of a capital receipt or a revenue receipt would depend primarily on the factual context, the Court held that the mesne profits and interest on mesne profits received by the assessee in pursuance of a decree would constitute a revenue receipt.

In Agilent Technologies India Private Limited v. Assistant Commissioner of Income Tax, Circle 1(2), New Delhi, the Court frowned upon the gross delay in the passing of an appeal-effect order wherein certain relief was granted to the assessed and observed that it does not reflect well on the functioning of the Income Tax Department when an assessee was constrained to file yet another legal proceeding to enforce the original order passed in its favor after a protracted litigation.

In Vianaar Homes Private Limited v. Assisstant Commissioner (Circle-12), Central Goods & Services Tax, Audit-II, Delhi, while examining the continued applicability of Rule 5A of the Service Tax Rules 1994, in line with the mandate of Section 6 of the General Clauses Act, 1897 and the saving provision in Section 174(2)(e) of the Central Goods and Service Tax, 2017 (‘CGST Act’), the Court held that the apparent legislative intent was that all pending and new proceedings initiated under the erstwhile Service Tax regime would stand protected. The Court further held that actions such as investigation, enquiry and verification which fell within the ambit of Section 174(2) of the CGST act would include proceedings which were initiated prior to taking the requisite action under Section 72 and 73 of the Finance Act 1994 (‘Finance Act’).

In Sanjiv Kumar Mittal v. Deputy Commissioner (TRC), CGST Commissionerate Delhi South the Court held that a former Director of a company, even if having knowledge of affairs of the company, is not vicariously or jointly liable for the service tax dues of the company. It was observed that the onus of proof in this regard would remain on the department to show that a Director is personally liable for the service tax dues of the company at the stage of issuance of a show-cause notice under Section 73 of the Finance Act. The Court further held in this regard that Section 9AA of the Central Excise Act, 1944 and Section 168(2) of the Companies Act, 2013 would not come to the aid of the department inasmuch as these provisions deal with offences committed by a company, and which is distinct from civil liability to pay tax.

In Bhawna Malhotra v. Union of India, the Court held that an error/mistake apparent on the face of the record by the declarant/assessee/applicant would also fall within the scope and ambit of Section 128 of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (‘SVLDRS’), and it was not restricted to an error/mistake apparent on the face of the record by the designated committee alone.

In PR. Commissioner of Income Tax-20, Delhi v. Akshit Kumar, the Court observed that even though the principles of res-judicata are not applicable to income tax proceedings but the rule of the consistency is a well-established principle which is undoubtedly applicable to income tax proceedings.

In PR. Commissioner of Income Tax LTU, New Delhi v. Mahanagar Telephone Nigam Limited, the Court approved the finding of the Income Tax Appellate Tribunal that the disallowance of prior period expense has to be computed by netting off the prior period income against the prior period expenditure.

TENDER AND BLACKLISTING

In Wadia Techno Engineering Services Limited v. National Highways Authority of India, the Court observed that a decision to black-list a particular entity cannot be termed as arbitrary and unreasonable when the reasoning for the said action had specifically traversed and dealt with with the specialized nature of the duties and responsibilities owned by the entity in question, and which had been admittedly breached.

Dr. Amit George is an Advocate practicing before the High Court of Delhi.

The author would like to place on record his appreciation for the assistance provided by Advocates Amol Acharya, Bharat Rayadurgam and Piyo Harold Jaimon.