Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
DECIDED ON: 02.11.2010
+ I.A. Nos.5916, 8163/2009 & 1396/2010 in CS (OS) 803/2009
M/S BABBAR WRECKERS PRIVATE LTD. ..... Plaintiff
Through: Mr. Hemant Singh with
Ms. Mamta R. Jha and Mr. Manish Mishra,
Advocates.
versus
M/S ASHOK LEYLAND LTD. & ORS. ..... Defendants
Through: Mr. S.K. Bansal with Mr. Ajay Amitabh Suman,
Mr. Anand Vikas Mishra and Mr. Pankaj Kumar,
Advocates.
CORAM:
MR. JUSTICE S. RAVINDRA BHAT
1. Whether the Reporters of local papers YES
may be allowed to see the judgment?
2. To be referred to Reporter or not? YES
3. Whether the judgment should be YES
reported in the Digest?
MR. JUSTICE S.RAVINDRA BHAT
% I.A. Nos.5916/2009 (O-XXXIX, R-1&2, CPC) & 8163/2009 (O-XXXIX, R-4, CPC)
1. The plaintiff (hereafter referred to as “Babbar Wreckers”) seeks a decree for
permanent injunction against the defendants (the first defendant is hereafter called
“Ashok Leyland”; the second defendant is hereafter called “Perfect” and the third
defendant is hereafter called “Niles”), to restrain the manufacturing, fabrication, sale and
offering for sale light recovery vehicles (LRVs) using, or reproducing in any manner
engineering drawings which are the subject matter of the technical specification Nos.
CQA (QFV)/VEH/STLN/003/2005 and CQA (QFV)/VEH/STLN/003/2001 (hereafter
called as 2005 and 2001 specifications) and other injunctive reliefs including a decree for
mandatory injunction to direct Ashok Leyland to take delivery of 50 LRVs fabricated by
CS (OS) 803/2009 Page 1
Babbar Wreckers. Consequential money decrees and a decree for rendition of accounts in
respect of the sale of superstructure mounted on Stallion 4X4 vehicles of Ashok Leyland
produced in accordance with 2005 and the 2001 specifications, are claimed.
2. The Court had initially granted the ex parte injunction on 4.5.2009 restraining the
use of the drawings pertaining to the two specifications or even from manufacture and
supply to the fourth defendant i.e. Central Government. The defendants had carried the
matter in appeal; the Division Bench disposed of the appeal recording that Ashok
Leyland would move an application for vacation of the interim order. Accordingly, I.A.
No.8163/2009 was filed by Ashok Leyland on which notice was served. This order
proposes to dispose of the plaintiff’s interim injunction application - I.A. No.5916/2009
and the defendant’s application for vacation of the interim order, I.A. No.8163/2009.
3. The brief facts necessary for the case according to the suit averments are that the
Babbar Wreckers claims to be engaged in manufacturing and designing wreckers (also
known as LRVs) for more than 40 years and to having supplied them to various
Government departments. The equipments are reliable and easy to operate and are
mounted on suitable commercial vehicles. Babbar Wreckers claims to have earned
substantial reputation and goodwill for the performance of its wrecker equipment and
also claims to have spent considerable money in designing and development them having
regard to their functionality. It is submitted that in 1980-85, one model of a wrecker
known as “Babbar Model GN-7 Medium Recovery Breakdown” (BWGN-7) was
designed. An application for trademark registration was made on 28.7.1983. Babbar
Wreckers claims to have participated in 1995 in the India International Trade Fair and
demonstrated its equipments mounted on TATA 1210D LPT to various vendees. It is
submitted that in September, 1995, Central Government through the Ministry of Defence
was looking for supply of LRVs and the first defendant submitted its specifications to
Army Headquarters with regard to development and supply of LRV on 5/7.5 Ton Stallion
MK-II on Ashok Leyland Chassis for procurement of purchase order. It is stated that
this was rejected by the Ministry of Defence. Subsequently, on 9.1.1996, a technical
group of the Army Headquarters wrote to the Director General, EME (Eqpt.), informing
that preliminary assessment of the specifications submitted by the Ashok Leyland for
CS (OS) 803/2009 Page 2
development of LRV on 5/7.5 Ton Stallion MK-II was found untenable. It is stated that
the same letter recommended the plaintiff for development of LRVs of 7.5 Ton capacity.
The plaintiff’s name was recommended to Ashok Leyland. The said letter reads as
follows: -
“4. In Dec. 95 M/s Babbar Wrecker Pvt. Ltd. demonstrated their
wrecker eqpt during the exhibition of India International Trade Fair –
95. This firm has been manufacturing wrecker eqpt. for last 30 yrs and
they have already supplied over 200 wrecker eqpts to various agencies in
India. The gist of the points, after detailed discussion with M/s Babbar
Wrecker Pvt. Ltd., are as follows: -
(a) The firm demonstrated their wrecker eqpt mounted on Tata
1210D LPT, to Chief Automotive Engineer, which could lift 7.5
ton dead weight on outriggers, without stay anchor, with single
line pull. They have already developed PTO, winch-gear, booms,
super structure and outriggers to handle load up to 15 Tons on
single line pull.
(b) M/s Babbar Wrecker Pvt. Ltd. claims that their wrecker eqpt, to
handle 7.5 tons lift and line pull, will weigh under 3.5 Tons.
(c) The firm offers to supply wrecker eqpt with 7.5 Ton line pull
within 4 to 6 weeks on receipt of orders, for trials. They have
also offered to undertake development of 7.5 ton LRV on any
suitable chasses.
5. In view of para 4 above M/s Babber Wrecker Pvt. Ltd. has been
asked to provide specifications compatible to GSQR. In addition, Mr. P.
Dhanasekaran, Senior Dev elopement Manager (Spl Veh) of M/s Ashok
Leyland, has also been provided details of M/s Babber Wrecker Pvt. Ltd.
to facilitate dev elopement of Light Recovery Vehicle of 7.5 Ton capacity.
6. Considering the feasibility of development 7.5 ton Wrecker eqpt,
the following options are now available.
Option-1. M/s Ashok Leyland be advised to procure 7.5 ton
wrecker equipment from M/s. Babbar Wrecker Pvt. Ltd. for
development of prototype LRV.
Option-2. One 5/7.5 ton Stallion MK-II be offered to M/s.
Babbar Wrecker for development of LRV preferably on „no cost
no commitment‟ basis under the aegis of HQ Tech Group. This
option provides a scope for development of LRV by the Army
Base Wksp.
Option-3. Assigning one of the Army Base Wksp eqpt. Ex.
M/s. Babbar Wrecker. One 5/7.5 Ton Stallion MK-II be made
CS (OS) 803/2009 Page 3
available to the assigned Base Wksp for this task. This option
will be suitable on long term basis as the existing financial rules
and procedure would require some alterations.”
4. Babbar Wreckers contends having represented on 24.1.1996, enclosing its
“Breakdown Wrecker” brochure to the Army Headquarters showing its interest for the
supply of the required equipment. The suit avers that Ashok Leyland on 12.03.1996
wrote to Babbar Wreckers requesting it to provide super structure drawings and technical
data in respect of 7.5 ton wrecker equipments to seek further approval from the Army
Headquarters. The material part of the letter reads as follows: -
“… In order to proceed with the project, it is necessary to make a
superstructure drawing and get it approved. Kindly also furnish
all the technical data regarding the 7.5 ton Wrecker to enable us
make an offer to Defence and to recheck at our end the Wreckter
transmission ratio, service drum gear ratio and the sprocket ratio.
Kindly arrange to send the drawing and the technical details at
the earliest….”
5. Babbar Wreckers submits that on 31.07.1996 it informed Ashok Leyland about
fabrication of a prototype recovery breakdown Wrecker of 7.5 tons capacity on its
(Ashok Leyland’s) vehicle, Stallion 4X4 and that it was ready for inspection and testing
by the Army.
6. The suit further states that Ashok Leyland on 11.12.1999 wrote a letter to Babbar
Wreckers asking it to prepare and submit the fabrication drawings of the LRV. The suit
relies upon the Minutes of the Meeting dated 17.04.2000 held at the Army Headquarters
to decide the modalities for inspection of pilot LRV 5/7.5 Stallion and states that its
drawings were actually agreed to be furnished to Central Government. Babbar Wreckers
states that it thereafter prepared the engineering drawings which were computer
generated and specially prepared by its Draftsman under the direct supervision of Mr.
Naresh Babbar, its Managing Director. The drawings were furnished to Ashok Leyland
and the Central Government. They were provisionally approved by the Deputy
Controller, CQAE (OFV), Jabalpur, of the Central Government. Babbar Wreckers further
states that it developed and designed the wrecker equipment as per specifications of the
Central Government which were tested and approved. Later on 9.6.2000, the Central
CS (OS) 803/2009 Page 4
Government issued a purchase contract to Ashok Leyland for supply of 195 LRV based
on 5/7.5 ton Stallion as per the approved specification No. CQA
(OFV)/VEH/STLN/LRV/2K/03 (hereafter called as “2K specification”) on the
understanding that Babbar Wreckers would be fabricating the LRVs on Ashok
Leyland’s vehicles. Ashok Leyland thereafter issued a letter of intent dated 8.8.2000 for
supply of 195 breakdown wreckers units, out of which 100 were supplied by Babbar
Wreckers and 95 by Perfect. Babbar Wreckers relies upon a joint inspection and its
Minutes of meeting to say that the LRVs were fabricated by it was in conformity with its
engineering drawings and specifications. The Minutes of meeting/inspection report has
been filed.
7. Babbar Wreckers claims to have entered into an arrangement whereby Perfect
was granted license to use its drawings at the behest of Ashok Leyland; reliance is placed
on agreements dated 8.9.2000, 21.9.2000, 7.2.2002 and 15.4.2002 for payment of what is
termed as nominal royalty of 3% to 7% of the basic price of the LRVs. Perfect is alleged
to have paid royalty to Babbar Wreckers, till 2002. The agreement between the parties
dated 7.2.2002 was valid till completion of the work order. It is stated that even though
Perfect did not pay royalty despite its obligation to do so, Babbar Wreckers allowed it to
use the drawings as a gesture of goodwill but at the same time that cannot be construed as
waiving its right to claim such royalty. Babbar Wreckers then mentions about the various
contracts between 2000-2005 where the work orders were procured by Ashok Leyland
for supply of the entire LRV; the fabrication and supply of wreckers were distributed
between the Babbar Wreckers and Perfect. These have been detailed in paragraph-24.
For the period 2000-2009, such orders for supply of 1121 vehicles was given by the
Central Government in five lots; Babbar Wreckers was given the contract (or
sub-contract) to fabricate 664 wreckers assemblies. Babbar Wreckers submits that
according to the understanding between the parties whenever Ashok Leyland procured
the orders for supply of the vehicles with the wrecker assemblies, it (Babbar Wreckers)
invariably was given a proportionate order for fabrication of the wrecker assembly and
Perfect was to get a proportionately lower quantity. The suit mentions about a legal
notice dated 1.10.2005 to Perfect, calling upon it to pay royalty which led to intervention
CS (OS) 803/2009 Page 5
of the Central Government. In this letter, the Central Government stated that unless the
matter was resolved inter se , it would not place any further orders on Ashok Leyland. It
is stated that in these circumstances, on 27.12.2005, Babbar Wreckers wrote to the
Central Government stating that the matter had been resolved.
8. Babbar Wreckers relies upon the grant of provisional Proprietary Article
Certificate by the Central Government on 9.6.2004, which was granted. The said
Proprietary Article Certificate dated 2.2.2005 reads as follows: -
“M/s Babbar Wrecker Pvt. Ltd.,
B-11, Mayapuri Industrial Area
Ph-1, New Delhi - 110 064
PAC FOR SUPERSTRUCTURE OF LRV 5/7.5 TON MODEL
BWGN-7C/BWGN-7C/A MOUNTED ON STALLION 4X4
Dear Sirs,
Reference: (i) Your letter No.BWPL/CQAV/04 dt. 25.12.04.
(ii) this office letter of even No. dt. 5.1.05 and 25.1.05.
2. Superstructure Model BWGN-7C/BWGN-7C/A, developed and designed
by M/s. Babbar Wreckers was trial evaluated at VRDE and by users extensively.
Accordingly, Specification No. CQA (OFV)/VEH/STLN/003/2001 was formulated.
3. Details of items for which PAC is accorded except bought out and
hardware items as indicated in the ISPL submitted by you are enclosed as
Appendix „A‟.
4. Further, as requested vide our letter dated 25.1.05 copy of two sets of
complete manufacturing drgs. consisting of Gp 32.01 to 32.23 including
Assys/Sub-Assys as given in general arrangement, Accessories and SMTs may
please be forwarded to this Controllerate. The drgs. are required to be
forwarded within 7 days to this Controllerate four our sealing and scrutiny
purpose. It is pertinent to mention here that no changes/modification shall be
carried out without the prior approval of this Controllerate.
Thanking you,
Yours Sincerely
(J.S. Sangwan)”
9 . Babbar Wreckers complains that a departure from the previous understanding and
CS (OS) 803/2009 Page 6
agreement took place, when Ashok Leyland was placed with an order of supply of 286
LRVs in January, 2009, the contract/order for fabrication and supply of all the wrecker
assemblies was, however, placed on Perfect. It is stated that this was in breach of the
agreement as Babbar Wreckers had put in tremendous labour and effort in securing its
drawings approved and was entitled to at least half of the order but was content to
maintain cordial relations by executing the orders for wrecker assemblies only in respect
of 50 LRVs. It is submitted that if the past precedent and practice were to be taken into
account, Babbar Wreckers was entitled to manufacture at least 50% of the total orders
placed upon Ashok Leyland; the latter kept on evading and giving vague assurances.
Ultimately, a legal notice dated 7.4.2009 was issued to the first three defendants,
terminating the license to use the drawings and specifications. Babbar Wreckers claims
that it is the author and owner of the copyright in the 2001 and 2005 specifications; the
claim is founded on the following plea: -
“36. It is submitted that the specification
no.CQA(OFV)/VEH/STLN/LRV/2003/01 and specification no.CQA
(OFV)/VEH/STLN/LRV/2003/05 approved by the Ministry of
Defence for fabrication of LRVs comprise of Plaintiff‟s
engineering drawings, specifications and technical know-how. The
subject matter of the said specification contains several
engineering drawings of Wrecker equipments which illustrate the
functional features thereof. The said engineering drawings
constitute original artistic works within the meaning of Section 2
(c) of the Copyright Act, 1957 and are entitled to copyright
protection. All the engineering drawings are computer generated
drawings prepared by the draftsman Mr. Aman under the
employment of the plaintiff and under the supervision of Mr.
Naresh Babbar, Managing Director of the Plaintiff. The said
engineering drawings are artistic works, designed and created at
instance of Plaintiff for valuable consideration paid. The plaintiff,
therefore, is the owner of copyright therein having exclusive right
to use or reproduce features thereof in any material form, directly
or indirectly, including three dimensional form from two
dimensional drawings or three dimensional form by the process of
“reverse engineering”. The fabrication of any Wrecker
equipment (LRV) based on the engineering drawings and
specifications of the Plaintiff without plaintiff‟s authorization
constitute violation of Plaintiff‟s copyright in the engineering
drawings pertaining thereto, which, apart from constituting
CS (OS) 803/2009 Page 7
infringement under Section 51 (a) of the Copyright Act, 1957, also
amounts to cognizable offence, punishable with imprisonment up
to three years and fine up to Rupees Two lakhs, under Sections-63
and 64 of the Copyright Act, 1957.”
10. The plaintiff argues that the pleadings and documents on record prove beyond
doubt, that it is the copyright owner of the drawings conforming to the specifications of
2001 and 2005, used by the Ashok Leyland and Perfect for assembling the wrecker units.
It is submitted that such drawings are artistic works under Section 2 (c) of the Copyright
Act, 1957 (hereafter called “the Act”). Counsel argues that these drawings are product
of the creative effort put in at the plaintiff’s behest. It is submitted the authority and
right to exclusively reproduce the drawings in material, three dimensional form, vests in
the plaintiff, which both Ashok Leyland and Perfect have infringed.
11. Babbar Wreckers relies on the judgments reported as John Richard v. Chemical
Process Equipment (P) Ltd. AIR 1987 Del 372; Escorts Construction Equipment Ltd. &
Anr. v. Action Construction Equipment (Pvt.) Ltd. 1999 PTC 36 (Del), etc. for the
proposition that drawings are deemed to be artistic works, and entitled to protection under
the Act. It is submitted that having used Babbar Wreckers drawings, and secured orders
from the Central Government, which were exploited fully, the plaintiff cannot be
deprived of the benefit of copyright, by the defendants. It is submitted that despite service
of summons, steps have not been taken by the Central Government to contest the suit.
13. The plaintiff contends in addition that the defendants particularly the Ashok
Leyland and Perfect cannot dispute its copyright because of the circumstance that royalty
was consistently paid in accordance with the previous arrangements. It is argued that the
Babbar Wrecker’s copyrights thereby stand explicitly established and it is entitled to the
injunction as claimed. The reliance is placed upon the judgment reported as Najma
Heptulla v. M/s Orient Longman Ltd. & Ors. AIR 1989 Del 623.
14. The first three defendants have filed a common written statement. They contend
that in 1995, Ashok Leyland offered to supply LRVs consisting of its Stallion 4X4
Chassis with wrecker to the Central Government as per the latter’s requirement which
was later published as JSQR No.2320-03 of 1996. It is stated that in 1995 itself Ashok
CS (OS) 803/2009 Page 8
Leyland prepared its drawing X9828800 disclosing the basic lay out of the proposed
LRVs. The submission is that the Ashok Leyland does not fabricate wreckers itself and,
therefore, had approached various vendors. It is stated that in 1996, the plaintiff’s name
- for fabrication of the concerned wrecker units- was suggested to the Central
Government. The defendants’ claim that the wrecker units were assembled according to
the specifications spelt out on the basis of the said drawing X9828800 and even the
proto- type was made subsequently.
15. The defendants’ emphasize on the averments in the suit to the effect that the
prototype of the recovery breakdown wrecker of 7.5 tons capacity, was fabricated
sometime in July, 1996 and a letter to the same effect had been given by the plaintiff. It
is submitted that the documents placed on the record clearly demonstrates that the
drawings on which copyright is claimed are dated 9.7.2000 and consequently the claim
for creation of original drawings in 1996 is ex facie untenable. The defendants argue
that the entire basis of the suit claim about the subsistence of the copyright, therefore, is
without documentary basis.
16. Amplifying the submissions, it is further stated that the plaintiff’s case that the
prototype of the wrecker were ready in 1996 in turn constitute a implicit admission that
they were based on some other drawings which unambiguously point to the plaintiff’s
JSQR No.2320-03 of 1996 specifications and drawing X9828800. The defendants
argued that the plaintiff could not have developed and fabricated the wrecker unit or even
its pilot prototype in the absence of drawings. It is, therefore, urged that these facts are
sufficient to foreclose the claim for injunction and certainly prima facie rebut the
submission that the plaintiff is a copyright owner of the drawings embodying in the 2001,
2003 and 2005 specifications. The defendants urged that any two dimensional rendering
or reduction/recording of a three dimensional object is subject to copyright protection in
terms of Section 14; according to them in this case, the three dimensional rendering was
of prototype/pilot wreckers in 1996 itself. The plaintiff, it is stated, does not claim
copyright over such articles - nor can claim it. Therefore, the copying or recording of
such articles in two dimensional forms does not confer exclusive rights.
17. The defendants argue that the wrecker units are just constituents of an overall
CS (OS) 803/2009 Page 9
article which they were contracted to supply to the Central Government. It is stated that
such articles i.e. LRVs are essential for public use by the defence forces and that grant of
an injunction of the kind sought for, would led to untoward consequences. The
defendants, in this regard, submit that the drawings are not subject to copyright protection
since they constitute Government works under Section-17 (d) of the Copyright Act,
which is in the following terms: -
“17. First owner of copyright. -Subject to the provisions of this Act, the
author of a work shall be the first owner of the copyright therein
Provided that-
XXX XXX XXX
(d) in the case of a Government work, Government shall, in the absence of
any agreement to the contrary, be the first owner of the copyright
therein;”
18. The defendants further submit that in any event, the use of drawings as is
complained of does not constitute copyright infringement under Section-52 (x) of the Act
which is in the following terms: -
“ 52. Certain acts not to be infringement of copyright. -(1) The following
acts shall not constitute an infringement of copyright, namely:
XXX XXX XXX
(x) the reconstruction of a building or structure in accordance with the
architectural drawings or plans by reference to which the building or
structure was originally constructed:
Provided that the original construction was made with the consent or
licence of the owner of the copyright in such drawings and plans;”
19. The defendants further submit that in terms of the JSQR No.2320-03 of 1996
published by the Central Government which forms the basis or foundation in the
formulation of specifications for wrecker units, the proprietary rights over all the
drawings and allied literature vests with the Central Government. The relevant condition
in Paragraph-37 is relied upon: -
“PROPRITORY RIGHTS
CS (OS) 803/2009 Page 10
37. In the event of the proto-type vehicle being accepted as a
standardized product, the aforesaid vehicle design and literature
submitted by the firm concerned shall be deemed to have become
the property of Govt. of India, Ministry of Defence.”
20. It is submitted that there cannot be any estoppel as is argued by the plaintiff; as it
would amount to undermining the public interest. The reliance is placed upon the
judgment of the United States Court of Appeal of the VIth Circuit reported as Beer Nuts,
INC, v. King Nut Company 477 F.2d 326. It is stated that the said judgment though in
the context of patent protection applies equally in the case of copyrights where if a
monopolist claims and is granted royalty on premises which the later discovered to be
unfounded, it is in the public interest that estoppel is not held against the ostensible
licensee. The defendants also rely upon the judgment reported as BRY Air India (P) Ltd.
& Anr. v. Western Engineering Company 1999 PTC (19) 48 for the submission that when
information is furnished to someone on the basis of which drawings or specifications are
formulated, the person who creates such drawings or specification under these
circumstances cannot claim copyright.
21. It is argued that the injunction granted initially by this Court is holding up all
further negotiations and consequent award of similar contracts to Ashok Leyland which
was undisputedly given the assignment of all previous actions, even according to the
plaintiff. Ashok Leyland argues that its tender for supply of further 116 numbers of
LRVs mounted on its 4X4 Stallion is subject to advance negotiations and only the price
component has to be finalized. Learned counsel argues that if the Court were to confirm
the injunction, even without a formal contract, it would be mandated to award a part of
the contract to the plaintiff - a proposition which is contrary to the principles for grant of
injunction which clearly are that the Courts cannot in exercise of their jurisdiction compel
the parties to enter into a contract. It is submitted that at best if the Court is satisfied that
the plaintiff is the prima facie copyright owner and that the previous arrangement
between the parties entitled it to royalty, suitable orders to secure the plaintiff’s interest in
that regard may be made.
22. It can be seen from the above discussion that Ashok Leyland manufactures the
main assemblies of the LRVs; Babbar Wreckers and Pefect manufacture the wrecker
CS (OS) 803/2009 Page 11
units, mounted on it (Ashok Leyland’s heavy vehicle is known as the Stallion 4X4). It is
the common case of parties that these vehicles are utilized by the Ministry of Defence.
Babbar Wreckers claims to have been manufacturing 3.5 tonne capacity wreckers, earlier,
and developed the prototype which matched the Central Government’s requirements,
sometime in 1995. Its positive case is that its drawings formed the basis for a prototype
manufactured, for the first time, in 1996; a letter dated 31-7-1996 is relied on. Similarly,
it relies on several letters by Ashok Lelyland, asking it to prepare the drawings, for
manufacturing the wrecker unit. The other materials include the letter to Ashok Leyland,
dated 11-7-1999, and agreements dated 8.9.2000, 21.9.2000, 7.2.2002 and 15.4.2002 for
supply of various quantities of wrecker assemblies, where the second defendant had
agreed to pay royalty to the plaintiff.
23. The plaintiff is correct when it submits that copyright can subsist, in mechanical
drawings. The question here, however is, whether such prima facie case about the
proprietorship as asserted by it has been made out. Though the plaintiff’s argument is that
the drawings were made in 1996, under its Managing Director’s supervision, and
direction, no such drawing has been produced. Significantly, all the drawings placed on
the record are of mid-2000 vintage; each is contemporaneous to the date when the Central
Government placed the orders upon Ashok Leyland. The plaintiff carefully avers that the
prototypes of the wreckers, which were ultimately supplied, and were the subject matter
of inter se understanding or arrangement with Ashok Leyland, were assembled for the
first time, in 1996. Undeniably, such prototypes must have been prepared on the basis of
some drawings. Yet, those drawings are not forthcoming. The plaintiff argues that the
drawings were prepared, on the basis of such prototype. Now, a facial look at the product
drawings and photographs would lead on to infer, at least prima facie, that some technical
drawings were required for their manufacture, as they are expected to haul and carry
heavy weights, and are to be mounted on chasis manufactured by another concern. Such
being the case, the plaintiff’s argument about creation of the drawings after the
prototypes were manufactured, seems implausible, to say the least. What is prima facie
credible, on the other hand, is Ashok Leyland’s assertion that its prototype and
specifications JSQR No.2320-03 of 1996 and drawing X9828800 were accepted by the
CS (OS) 803/2009 Page 12
Central Government, in 1995, after which Babbar Wreckers was approached in 1996, to
make the wrecker units. The inter se correspondence with Ashok Leyland, then becomes
comprehensible, as the latter’s insistence that the drawings, according to its
specifications, were to be prepared.
24. The second aspect, and an important one at that is that the court cannot shut its
eyes to clause 37 of the JSQR which formed the basis for awarding the contract,
unambiguously states that the Central Government would be the proprietor of the design
and product (“ proto-type vehicle being accepted as a standardized product, the aforesaid
vehicle design and literature submitted by the firm concerned shall be deemed to have
become the property of Govt. of India, Ministry of Defence.” ). This stipulation- coupled
with Section 17 (d)- also prima facie point to copyright ownership of the Central
Government, in the drawings. Here, one cannot lose sight of the fact that the contracts
were primarily awarded to Ashok Leyland, which only parted with a portion of them, to
the plaintiff, as regards wrecker assemblies. They were and are meant to be used for
transportation of materials, and hauling of heavy loads and equipment, for defense
purposes, and cater to an obvious public or national purpose.
25. As far as estoppel is concerned, the plaintiff relies on Najma Heptulla‟s case. In
that, the plaintiff was a legal representative of Maulana Azad, who had supplied his book
to Prof. Humanyun Kabir for its narration and translation. The plaintiff had received 50%
royalty for 30 years, and granted copyrights to the publisher. The court restrained the
plaintiff from challenging the validity of the agreement. The plaintiff was not granted
injunction to stop the defendant from publishing the book even after the said term was
over. In this case, however, the materials on record suggest that Perfect had stopped
paying royalty to the plaintiff, sometime in 2002; this had led to exchange of legal
notices, and the Central Government intervening with the plaintiff, which had withheld
supplies. The plaintiff resumed supplies, and did not claim royalties. The legal notice
which preceded the present case, too, did not claim royalty arrears, nor was any leave
sought to claim them; in any case, such claims are now time barred. An added
circumstance is that for the subsequent supplies, there was no payment of royalty. In
these facts, the court is of the opinion that having regard to the wide nature of copyright
CS (OS) 803/2009 Page 13
claims, in such cases, which amount to declaration of monopolistic rights over the entire
world, the grant of an equitable remedy of injunction solely on the behavioral principle of
estoppel, would be inappropriate. In trademark infringement, however, considerations are
different, because the nature of defences vary, as the defendant can establish honest
concurrent user, prior user, etc, since the claim is uniquely asserted on a case to case
basis. However, a copyright subsists for the longest duration, in the cluster of intellectual
property rights, and the courts are entitled to test the wide and sweeping nature of rights
asserted, undoubtedly in the context of an estoppel, but not soley on such bases. In this
case, royalty was paid in about two instances, and had not been paid for over 7 years
before this case was instituted. In the circumstances, there is no estoppel which bars the
defendants from contesting the plaintiff’s copyright in the drawings.
26. The court has noticed more than once, previously, in this judgment, that the
contracts have an underlying public purpose, ie. catering to the needs of the Ministry of
Defence. The documentary materials on record prima facie suggest that even though
Ashok Leyland granted Babbar Wreckers the contract to manufacture wrecker
assemblies, roughly in the proportion of 50% of what granted in the orders, there is no
written arrangement. The plaintiff of course has averred that royalty of 3% to 7 % used to
be paid to it by Perfect in respect of the wrecker units assembled by it. However, in the
absence of any indication about the duration of the arrangement, and any positive
evidence that such understanding was to operate in a specific manner, for all times to
come, or for a period, it would be imprudent for the court to issue a direction to Ashok
Leyland, to share its contract execution with Babbar Wreckers. Such a direction would
result in the court enjoining a party to enter into a contract, which it clear cannot issue.
Furthermore, the court is of the opinion that attaching any condition of the kind insisted
upon by the plaintiff to permit execution of any contract by the Central Government with
Ashok Leyland, would clearly not be in the public interest. Clause 37 of the JSQR, also
points to the possibility of the Government being the owner and author of the works. In
the circumstances, the court cannot be blind to the public interest element, which looms
large in this case.
27. In view of the above discussion, it is held that the plaintiff has been unable to
CS (OS) 803/2009 Page 14
establish, prima facie, to its being a copyright owner. At the same time, the court is
conscious that it has been beneficiary in previous contracts, and that 3-7 % royalty was
being paid to it – although some time ago. Having regard to these overall circumstances,
and to balance the competing rights, and protect the plaintiff’s interest, Ashok Leyland is
directed to furnish an undertaking to pay damages in the event of the plaintiff succeeding.
It shall, to that end, also file accounts, and statements, in respect of the amounts received
and profits, if any, derived in the contracts that were executed when the suit was filed,
and further contracts to be executed, in the event of their being awarded to it, by the
Central Government. Such accounts shall be filed once each year. Ashok Leyland is also
directed to furnish a bank guarantee for the sum of Rs. 30,00,000/- in favour of the
Registrar of this Court, to satisfy any money decree, within four weeks from today.
28. IA Nos.5916, 8163/2009 and 1396/2010 are disposed of in the above terms.
CS (OS) 803/2009
th
The suit shall be listed for further proceedings, on 29 November, 2010.
S. RAVINDRA BHAT
(JUDGE)
NOVEMBER 2, 2010
CS (OS) 803/2009 Page 15
DECIDED ON: 02.11.2010
+ I.A. Nos.5916, 8163/2009 & 1396/2010 in CS (OS) 803/2009
M/S BABBAR WRECKERS PRIVATE LTD. ..... Plaintiff
Through: Mr. Hemant Singh with
Ms. Mamta R. Jha and Mr. Manish Mishra,
Advocates.
versus
M/S ASHOK LEYLAND LTD. & ORS. ..... Defendants
Through: Mr. S.K. Bansal with Mr. Ajay Amitabh Suman,
Mr. Anand Vikas Mishra and Mr. Pankaj Kumar,
Advocates.
CORAM:
MR. JUSTICE S. RAVINDRA BHAT
1. Whether the Reporters of local papers YES
may be allowed to see the judgment?
2. To be referred to Reporter or not? YES
3. Whether the judgment should be YES
reported in the Digest?
MR. JUSTICE S.RAVINDRA BHAT
% I.A. Nos.5916/2009 (O-XXXIX, R-1&2, CPC) & 8163/2009 (O-XXXIX, R-4, CPC)
1. The plaintiff (hereafter referred to as “Babbar Wreckers”) seeks a decree for
permanent injunction against the defendants (the first defendant is hereafter called
“Ashok Leyland”; the second defendant is hereafter called “Perfect” and the third
defendant is hereafter called “Niles”), to restrain the manufacturing, fabrication, sale and
offering for sale light recovery vehicles (LRVs) using, or reproducing in any manner
engineering drawings which are the subject matter of the technical specification Nos.
CQA (QFV)/VEH/STLN/003/2005 and CQA (QFV)/VEH/STLN/003/2001 (hereafter
called as 2005 and 2001 specifications) and other injunctive reliefs including a decree for
mandatory injunction to direct Ashok Leyland to take delivery of 50 LRVs fabricated by
CS (OS) 803/2009 Page 1
Babbar Wreckers. Consequential money decrees and a decree for rendition of accounts in
respect of the sale of superstructure mounted on Stallion 4X4 vehicles of Ashok Leyland
produced in accordance with 2005 and the 2001 specifications, are claimed.
2. The Court had initially granted the ex parte injunction on 4.5.2009 restraining the
use of the drawings pertaining to the two specifications or even from manufacture and
supply to the fourth defendant i.e. Central Government. The defendants had carried the
matter in appeal; the Division Bench disposed of the appeal recording that Ashok
Leyland would move an application for vacation of the interim order. Accordingly, I.A.
No.8163/2009 was filed by Ashok Leyland on which notice was served. This order
proposes to dispose of the plaintiff’s interim injunction application - I.A. No.5916/2009
and the defendant’s application for vacation of the interim order, I.A. No.8163/2009.
3. The brief facts necessary for the case according to the suit averments are that the
Babbar Wreckers claims to be engaged in manufacturing and designing wreckers (also
known as LRVs) for more than 40 years and to having supplied them to various
Government departments. The equipments are reliable and easy to operate and are
mounted on suitable commercial vehicles. Babbar Wreckers claims to have earned
substantial reputation and goodwill for the performance of its wrecker equipment and
also claims to have spent considerable money in designing and development them having
regard to their functionality. It is submitted that in 1980-85, one model of a wrecker
known as “Babbar Model GN-7 Medium Recovery Breakdown” (BWGN-7) was
designed. An application for trademark registration was made on 28.7.1983. Babbar
Wreckers claims to have participated in 1995 in the India International Trade Fair and
demonstrated its equipments mounted on TATA 1210D LPT to various vendees. It is
submitted that in September, 1995, Central Government through the Ministry of Defence
was looking for supply of LRVs and the first defendant submitted its specifications to
Army Headquarters with regard to development and supply of LRV on 5/7.5 Ton Stallion
MK-II on Ashok Leyland Chassis for procurement of purchase order. It is stated that
this was rejected by the Ministry of Defence. Subsequently, on 9.1.1996, a technical
group of the Army Headquarters wrote to the Director General, EME (Eqpt.), informing
that preliminary assessment of the specifications submitted by the Ashok Leyland for
CS (OS) 803/2009 Page 2
development of LRV on 5/7.5 Ton Stallion MK-II was found untenable. It is stated that
the same letter recommended the plaintiff for development of LRVs of 7.5 Ton capacity.
The plaintiff’s name was recommended to Ashok Leyland. The said letter reads as
follows: -
“4. In Dec. 95 M/s Babbar Wrecker Pvt. Ltd. demonstrated their
wrecker eqpt during the exhibition of India International Trade Fair –
95. This firm has been manufacturing wrecker eqpt. for last 30 yrs and
they have already supplied over 200 wrecker eqpts to various agencies in
India. The gist of the points, after detailed discussion with M/s Babbar
Wrecker Pvt. Ltd., are as follows: -
(a) The firm demonstrated their wrecker eqpt mounted on Tata
1210D LPT, to Chief Automotive Engineer, which could lift 7.5
ton dead weight on outriggers, without stay anchor, with single
line pull. They have already developed PTO, winch-gear, booms,
super structure and outriggers to handle load up to 15 Tons on
single line pull.
(b) M/s Babbar Wrecker Pvt. Ltd. claims that their wrecker eqpt, to
handle 7.5 tons lift and line pull, will weigh under 3.5 Tons.
(c) The firm offers to supply wrecker eqpt with 7.5 Ton line pull
within 4 to 6 weeks on receipt of orders, for trials. They have
also offered to undertake development of 7.5 ton LRV on any
suitable chasses.
5. In view of para 4 above M/s Babber Wrecker Pvt. Ltd. has been
asked to provide specifications compatible to GSQR. In addition, Mr. P.
Dhanasekaran, Senior Dev elopement Manager (Spl Veh) of M/s Ashok
Leyland, has also been provided details of M/s Babber Wrecker Pvt. Ltd.
to facilitate dev elopement of Light Recovery Vehicle of 7.5 Ton capacity.
6. Considering the feasibility of development 7.5 ton Wrecker eqpt,
the following options are now available.
Option-1. M/s Ashok Leyland be advised to procure 7.5 ton
wrecker equipment from M/s. Babbar Wrecker Pvt. Ltd. for
development of prototype LRV.
Option-2. One 5/7.5 ton Stallion MK-II be offered to M/s.
Babbar Wrecker for development of LRV preferably on „no cost
no commitment‟ basis under the aegis of HQ Tech Group. This
option provides a scope for development of LRV by the Army
Base Wksp.
Option-3. Assigning one of the Army Base Wksp eqpt. Ex.
M/s. Babbar Wrecker. One 5/7.5 Ton Stallion MK-II be made
CS (OS) 803/2009 Page 3
available to the assigned Base Wksp for this task. This option
will be suitable on long term basis as the existing financial rules
and procedure would require some alterations.”
4. Babbar Wreckers contends having represented on 24.1.1996, enclosing its
“Breakdown Wrecker” brochure to the Army Headquarters showing its interest for the
supply of the required equipment. The suit avers that Ashok Leyland on 12.03.1996
wrote to Babbar Wreckers requesting it to provide super structure drawings and technical
data in respect of 7.5 ton wrecker equipments to seek further approval from the Army
Headquarters. The material part of the letter reads as follows: -
“… In order to proceed with the project, it is necessary to make a
superstructure drawing and get it approved. Kindly also furnish
all the technical data regarding the 7.5 ton Wrecker to enable us
make an offer to Defence and to recheck at our end the Wreckter
transmission ratio, service drum gear ratio and the sprocket ratio.
Kindly arrange to send the drawing and the technical details at
the earliest….”
5. Babbar Wreckers submits that on 31.07.1996 it informed Ashok Leyland about
fabrication of a prototype recovery breakdown Wrecker of 7.5 tons capacity on its
(Ashok Leyland’s) vehicle, Stallion 4X4 and that it was ready for inspection and testing
by the Army.
6. The suit further states that Ashok Leyland on 11.12.1999 wrote a letter to Babbar
Wreckers asking it to prepare and submit the fabrication drawings of the LRV. The suit
relies upon the Minutes of the Meeting dated 17.04.2000 held at the Army Headquarters
to decide the modalities for inspection of pilot LRV 5/7.5 Stallion and states that its
drawings were actually agreed to be furnished to Central Government. Babbar Wreckers
states that it thereafter prepared the engineering drawings which were computer
generated and specially prepared by its Draftsman under the direct supervision of Mr.
Naresh Babbar, its Managing Director. The drawings were furnished to Ashok Leyland
and the Central Government. They were provisionally approved by the Deputy
Controller, CQAE (OFV), Jabalpur, of the Central Government. Babbar Wreckers further
states that it developed and designed the wrecker equipment as per specifications of the
Central Government which were tested and approved. Later on 9.6.2000, the Central
CS (OS) 803/2009 Page 4
Government issued a purchase contract to Ashok Leyland for supply of 195 LRV based
on 5/7.5 ton Stallion as per the approved specification No. CQA
(OFV)/VEH/STLN/LRV/2K/03 (hereafter called as “2K specification”) on the
understanding that Babbar Wreckers would be fabricating the LRVs on Ashok
Leyland’s vehicles. Ashok Leyland thereafter issued a letter of intent dated 8.8.2000 for
supply of 195 breakdown wreckers units, out of which 100 were supplied by Babbar
Wreckers and 95 by Perfect. Babbar Wreckers relies upon a joint inspection and its
Minutes of meeting to say that the LRVs were fabricated by it was in conformity with its
engineering drawings and specifications. The Minutes of meeting/inspection report has
been filed.
7. Babbar Wreckers claims to have entered into an arrangement whereby Perfect
was granted license to use its drawings at the behest of Ashok Leyland; reliance is placed
on agreements dated 8.9.2000, 21.9.2000, 7.2.2002 and 15.4.2002 for payment of what is
termed as nominal royalty of 3% to 7% of the basic price of the LRVs. Perfect is alleged
to have paid royalty to Babbar Wreckers, till 2002. The agreement between the parties
dated 7.2.2002 was valid till completion of the work order. It is stated that even though
Perfect did not pay royalty despite its obligation to do so, Babbar Wreckers allowed it to
use the drawings as a gesture of goodwill but at the same time that cannot be construed as
waiving its right to claim such royalty. Babbar Wreckers then mentions about the various
contracts between 2000-2005 where the work orders were procured by Ashok Leyland
for supply of the entire LRV; the fabrication and supply of wreckers were distributed
between the Babbar Wreckers and Perfect. These have been detailed in paragraph-24.
For the period 2000-2009, such orders for supply of 1121 vehicles was given by the
Central Government in five lots; Babbar Wreckers was given the contract (or
sub-contract) to fabricate 664 wreckers assemblies. Babbar Wreckers submits that
according to the understanding between the parties whenever Ashok Leyland procured
the orders for supply of the vehicles with the wrecker assemblies, it (Babbar Wreckers)
invariably was given a proportionate order for fabrication of the wrecker assembly and
Perfect was to get a proportionately lower quantity. The suit mentions about a legal
notice dated 1.10.2005 to Perfect, calling upon it to pay royalty which led to intervention
CS (OS) 803/2009 Page 5
of the Central Government. In this letter, the Central Government stated that unless the
matter was resolved inter se , it would not place any further orders on Ashok Leyland. It
is stated that in these circumstances, on 27.12.2005, Babbar Wreckers wrote to the
Central Government stating that the matter had been resolved.
8. Babbar Wreckers relies upon the grant of provisional Proprietary Article
Certificate by the Central Government on 9.6.2004, which was granted. The said
Proprietary Article Certificate dated 2.2.2005 reads as follows: -
“M/s Babbar Wrecker Pvt. Ltd.,
B-11, Mayapuri Industrial Area
Ph-1, New Delhi - 110 064
PAC FOR SUPERSTRUCTURE OF LRV 5/7.5 TON MODEL
BWGN-7C/BWGN-7C/A MOUNTED ON STALLION 4X4
Dear Sirs,
Reference: (i) Your letter No.BWPL/CQAV/04 dt. 25.12.04.
(ii) this office letter of even No. dt. 5.1.05 and 25.1.05.
2. Superstructure Model BWGN-7C/BWGN-7C/A, developed and designed
by M/s. Babbar Wreckers was trial evaluated at VRDE and by users extensively.
Accordingly, Specification No. CQA (OFV)/VEH/STLN/003/2001 was formulated.
3. Details of items for which PAC is accorded except bought out and
hardware items as indicated in the ISPL submitted by you are enclosed as
Appendix „A‟.
4. Further, as requested vide our letter dated 25.1.05 copy of two sets of
complete manufacturing drgs. consisting of Gp 32.01 to 32.23 including
Assys/Sub-Assys as given in general arrangement, Accessories and SMTs may
please be forwarded to this Controllerate. The drgs. are required to be
forwarded within 7 days to this Controllerate four our sealing and scrutiny
purpose. It is pertinent to mention here that no changes/modification shall be
carried out without the prior approval of this Controllerate.
Thanking you,
Yours Sincerely
(J.S. Sangwan)”
9 . Babbar Wreckers complains that a departure from the previous understanding and
CS (OS) 803/2009 Page 6
agreement took place, when Ashok Leyland was placed with an order of supply of 286
LRVs in January, 2009, the contract/order for fabrication and supply of all the wrecker
assemblies was, however, placed on Perfect. It is stated that this was in breach of the
agreement as Babbar Wreckers had put in tremendous labour and effort in securing its
drawings approved and was entitled to at least half of the order but was content to
maintain cordial relations by executing the orders for wrecker assemblies only in respect
of 50 LRVs. It is submitted that if the past precedent and practice were to be taken into
account, Babbar Wreckers was entitled to manufacture at least 50% of the total orders
placed upon Ashok Leyland; the latter kept on evading and giving vague assurances.
Ultimately, a legal notice dated 7.4.2009 was issued to the first three defendants,
terminating the license to use the drawings and specifications. Babbar Wreckers claims
that it is the author and owner of the copyright in the 2001 and 2005 specifications; the
claim is founded on the following plea: -
“36. It is submitted that the specification
no.CQA(OFV)/VEH/STLN/LRV/2003/01 and specification no.CQA
(OFV)/VEH/STLN/LRV/2003/05 approved by the Ministry of
Defence for fabrication of LRVs comprise of Plaintiff‟s
engineering drawings, specifications and technical know-how. The
subject matter of the said specification contains several
engineering drawings of Wrecker equipments which illustrate the
functional features thereof. The said engineering drawings
constitute original artistic works within the meaning of Section 2
(c) of the Copyright Act, 1957 and are entitled to copyright
protection. All the engineering drawings are computer generated
drawings prepared by the draftsman Mr. Aman under the
employment of the plaintiff and under the supervision of Mr.
Naresh Babbar, Managing Director of the Plaintiff. The said
engineering drawings are artistic works, designed and created at
instance of Plaintiff for valuable consideration paid. The plaintiff,
therefore, is the owner of copyright therein having exclusive right
to use or reproduce features thereof in any material form, directly
or indirectly, including three dimensional form from two
dimensional drawings or three dimensional form by the process of
“reverse engineering”. The fabrication of any Wrecker
equipment (LRV) based on the engineering drawings and
specifications of the Plaintiff without plaintiff‟s authorization
constitute violation of Plaintiff‟s copyright in the engineering
drawings pertaining thereto, which, apart from constituting
CS (OS) 803/2009 Page 7
infringement under Section 51 (a) of the Copyright Act, 1957, also
amounts to cognizable offence, punishable with imprisonment up
to three years and fine up to Rupees Two lakhs, under Sections-63
and 64 of the Copyright Act, 1957.”
10. The plaintiff argues that the pleadings and documents on record prove beyond
doubt, that it is the copyright owner of the drawings conforming to the specifications of
2001 and 2005, used by the Ashok Leyland and Perfect for assembling the wrecker units.
It is submitted that such drawings are artistic works under Section 2 (c) of the Copyright
Act, 1957 (hereafter called “the Act”). Counsel argues that these drawings are product
of the creative effort put in at the plaintiff’s behest. It is submitted the authority and
right to exclusively reproduce the drawings in material, three dimensional form, vests in
the plaintiff, which both Ashok Leyland and Perfect have infringed.
11. Babbar Wreckers relies on the judgments reported as John Richard v. Chemical
Process Equipment (P) Ltd. AIR 1987 Del 372; Escorts Construction Equipment Ltd. &
Anr. v. Action Construction Equipment (Pvt.) Ltd. 1999 PTC 36 (Del), etc. for the
proposition that drawings are deemed to be artistic works, and entitled to protection under
the Act. It is submitted that having used Babbar Wreckers drawings, and secured orders
from the Central Government, which were exploited fully, the plaintiff cannot be
deprived of the benefit of copyright, by the defendants. It is submitted that despite service
of summons, steps have not been taken by the Central Government to contest the suit.
13. The plaintiff contends in addition that the defendants particularly the Ashok
Leyland and Perfect cannot dispute its copyright because of the circumstance that royalty
was consistently paid in accordance with the previous arrangements. It is argued that the
Babbar Wrecker’s copyrights thereby stand explicitly established and it is entitled to the
injunction as claimed. The reliance is placed upon the judgment reported as Najma
Heptulla v. M/s Orient Longman Ltd. & Ors. AIR 1989 Del 623.
14. The first three defendants have filed a common written statement. They contend
that in 1995, Ashok Leyland offered to supply LRVs consisting of its Stallion 4X4
Chassis with wrecker to the Central Government as per the latter’s requirement which
was later published as JSQR No.2320-03 of 1996. It is stated that in 1995 itself Ashok
CS (OS) 803/2009 Page 8
Leyland prepared its drawing X9828800 disclosing the basic lay out of the proposed
LRVs. The submission is that the Ashok Leyland does not fabricate wreckers itself and,
therefore, had approached various vendors. It is stated that in 1996, the plaintiff’s name
- for fabrication of the concerned wrecker units- was suggested to the Central
Government. The defendants’ claim that the wrecker units were assembled according to
the specifications spelt out on the basis of the said drawing X9828800 and even the
proto- type was made subsequently.
15. The defendants’ emphasize on the averments in the suit to the effect that the
prototype of the recovery breakdown wrecker of 7.5 tons capacity, was fabricated
sometime in July, 1996 and a letter to the same effect had been given by the plaintiff. It
is submitted that the documents placed on the record clearly demonstrates that the
drawings on which copyright is claimed are dated 9.7.2000 and consequently the claim
for creation of original drawings in 1996 is ex facie untenable. The defendants argue
that the entire basis of the suit claim about the subsistence of the copyright, therefore, is
without documentary basis.
16. Amplifying the submissions, it is further stated that the plaintiff’s case that the
prototype of the wrecker were ready in 1996 in turn constitute a implicit admission that
they were based on some other drawings which unambiguously point to the plaintiff’s
JSQR No.2320-03 of 1996 specifications and drawing X9828800. The defendants
argued that the plaintiff could not have developed and fabricated the wrecker unit or even
its pilot prototype in the absence of drawings. It is, therefore, urged that these facts are
sufficient to foreclose the claim for injunction and certainly prima facie rebut the
submission that the plaintiff is a copyright owner of the drawings embodying in the 2001,
2003 and 2005 specifications. The defendants urged that any two dimensional rendering
or reduction/recording of a three dimensional object is subject to copyright protection in
terms of Section 14; according to them in this case, the three dimensional rendering was
of prototype/pilot wreckers in 1996 itself. The plaintiff, it is stated, does not claim
copyright over such articles - nor can claim it. Therefore, the copying or recording of
such articles in two dimensional forms does not confer exclusive rights.
17. The defendants argue that the wrecker units are just constituents of an overall
CS (OS) 803/2009 Page 9
article which they were contracted to supply to the Central Government. It is stated that
such articles i.e. LRVs are essential for public use by the defence forces and that grant of
an injunction of the kind sought for, would led to untoward consequences. The
defendants, in this regard, submit that the drawings are not subject to copyright protection
since they constitute Government works under Section-17 (d) of the Copyright Act,
which is in the following terms: -
“17. First owner of copyright. -Subject to the provisions of this Act, the
author of a work shall be the first owner of the copyright therein
Provided that-
XXX XXX XXX
(d) in the case of a Government work, Government shall, in the absence of
any agreement to the contrary, be the first owner of the copyright
therein;”
18. The defendants further submit that in any event, the use of drawings as is
complained of does not constitute copyright infringement under Section-52 (x) of the Act
which is in the following terms: -
“ 52. Certain acts not to be infringement of copyright. -(1) The following
acts shall not constitute an infringement of copyright, namely:
XXX XXX XXX
(x) the reconstruction of a building or structure in accordance with the
architectural drawings or plans by reference to which the building or
structure was originally constructed:
Provided that the original construction was made with the consent or
licence of the owner of the copyright in such drawings and plans;”
19. The defendants further submit that in terms of the JSQR No.2320-03 of 1996
published by the Central Government which forms the basis or foundation in the
formulation of specifications for wrecker units, the proprietary rights over all the
drawings and allied literature vests with the Central Government. The relevant condition
in Paragraph-37 is relied upon: -
“PROPRITORY RIGHTS
CS (OS) 803/2009 Page 10
37. In the event of the proto-type vehicle being accepted as a
standardized product, the aforesaid vehicle design and literature
submitted by the firm concerned shall be deemed to have become
the property of Govt. of India, Ministry of Defence.”
20. It is submitted that there cannot be any estoppel as is argued by the plaintiff; as it
would amount to undermining the public interest. The reliance is placed upon the
judgment of the United States Court of Appeal of the VIth Circuit reported as Beer Nuts,
INC, v. King Nut Company 477 F.2d 326. It is stated that the said judgment though in
the context of patent protection applies equally in the case of copyrights where if a
monopolist claims and is granted royalty on premises which the later discovered to be
unfounded, it is in the public interest that estoppel is not held against the ostensible
licensee. The defendants also rely upon the judgment reported as BRY Air India (P) Ltd.
& Anr. v. Western Engineering Company 1999 PTC (19) 48 for the submission that when
information is furnished to someone on the basis of which drawings or specifications are
formulated, the person who creates such drawings or specification under these
circumstances cannot claim copyright.
21. It is argued that the injunction granted initially by this Court is holding up all
further negotiations and consequent award of similar contracts to Ashok Leyland which
was undisputedly given the assignment of all previous actions, even according to the
plaintiff. Ashok Leyland argues that its tender for supply of further 116 numbers of
LRVs mounted on its 4X4 Stallion is subject to advance negotiations and only the price
component has to be finalized. Learned counsel argues that if the Court were to confirm
the injunction, even without a formal contract, it would be mandated to award a part of
the contract to the plaintiff - a proposition which is contrary to the principles for grant of
injunction which clearly are that the Courts cannot in exercise of their jurisdiction compel
the parties to enter into a contract. It is submitted that at best if the Court is satisfied that
the plaintiff is the prima facie copyright owner and that the previous arrangement
between the parties entitled it to royalty, suitable orders to secure the plaintiff’s interest in
that regard may be made.
22. It can be seen from the above discussion that Ashok Leyland manufactures the
main assemblies of the LRVs; Babbar Wreckers and Pefect manufacture the wrecker
CS (OS) 803/2009 Page 11
units, mounted on it (Ashok Leyland’s heavy vehicle is known as the Stallion 4X4). It is
the common case of parties that these vehicles are utilized by the Ministry of Defence.
Babbar Wreckers claims to have been manufacturing 3.5 tonne capacity wreckers, earlier,
and developed the prototype which matched the Central Government’s requirements,
sometime in 1995. Its positive case is that its drawings formed the basis for a prototype
manufactured, for the first time, in 1996; a letter dated 31-7-1996 is relied on. Similarly,
it relies on several letters by Ashok Lelyland, asking it to prepare the drawings, for
manufacturing the wrecker unit. The other materials include the letter to Ashok Leyland,
dated 11-7-1999, and agreements dated 8.9.2000, 21.9.2000, 7.2.2002 and 15.4.2002 for
supply of various quantities of wrecker assemblies, where the second defendant had
agreed to pay royalty to the plaintiff.
23. The plaintiff is correct when it submits that copyright can subsist, in mechanical
drawings. The question here, however is, whether such prima facie case about the
proprietorship as asserted by it has been made out. Though the plaintiff’s argument is that
the drawings were made in 1996, under its Managing Director’s supervision, and
direction, no such drawing has been produced. Significantly, all the drawings placed on
the record are of mid-2000 vintage; each is contemporaneous to the date when the Central
Government placed the orders upon Ashok Leyland. The plaintiff carefully avers that the
prototypes of the wreckers, which were ultimately supplied, and were the subject matter
of inter se understanding or arrangement with Ashok Leyland, were assembled for the
first time, in 1996. Undeniably, such prototypes must have been prepared on the basis of
some drawings. Yet, those drawings are not forthcoming. The plaintiff argues that the
drawings were prepared, on the basis of such prototype. Now, a facial look at the product
drawings and photographs would lead on to infer, at least prima facie, that some technical
drawings were required for their manufacture, as they are expected to haul and carry
heavy weights, and are to be mounted on chasis manufactured by another concern. Such
being the case, the plaintiff’s argument about creation of the drawings after the
prototypes were manufactured, seems implausible, to say the least. What is prima facie
credible, on the other hand, is Ashok Leyland’s assertion that its prototype and
specifications JSQR No.2320-03 of 1996 and drawing X9828800 were accepted by the
CS (OS) 803/2009 Page 12
Central Government, in 1995, after which Babbar Wreckers was approached in 1996, to
make the wrecker units. The inter se correspondence with Ashok Leyland, then becomes
comprehensible, as the latter’s insistence that the drawings, according to its
specifications, were to be prepared.
24. The second aspect, and an important one at that is that the court cannot shut its
eyes to clause 37 of the JSQR which formed the basis for awarding the contract,
unambiguously states that the Central Government would be the proprietor of the design
and product (“ proto-type vehicle being accepted as a standardized product, the aforesaid
vehicle design and literature submitted by the firm concerned shall be deemed to have
become the property of Govt. of India, Ministry of Defence.” ). This stipulation- coupled
with Section 17 (d)- also prima facie point to copyright ownership of the Central
Government, in the drawings. Here, one cannot lose sight of the fact that the contracts
were primarily awarded to Ashok Leyland, which only parted with a portion of them, to
the plaintiff, as regards wrecker assemblies. They were and are meant to be used for
transportation of materials, and hauling of heavy loads and equipment, for defense
purposes, and cater to an obvious public or national purpose.
25. As far as estoppel is concerned, the plaintiff relies on Najma Heptulla‟s case. In
that, the plaintiff was a legal representative of Maulana Azad, who had supplied his book
to Prof. Humanyun Kabir for its narration and translation. The plaintiff had received 50%
royalty for 30 years, and granted copyrights to the publisher. The court restrained the
plaintiff from challenging the validity of the agreement. The plaintiff was not granted
injunction to stop the defendant from publishing the book even after the said term was
over. In this case, however, the materials on record suggest that Perfect had stopped
paying royalty to the plaintiff, sometime in 2002; this had led to exchange of legal
notices, and the Central Government intervening with the plaintiff, which had withheld
supplies. The plaintiff resumed supplies, and did not claim royalties. The legal notice
which preceded the present case, too, did not claim royalty arrears, nor was any leave
sought to claim them; in any case, such claims are now time barred. An added
circumstance is that for the subsequent supplies, there was no payment of royalty. In
these facts, the court is of the opinion that having regard to the wide nature of copyright
CS (OS) 803/2009 Page 13
claims, in such cases, which amount to declaration of monopolistic rights over the entire
world, the grant of an equitable remedy of injunction solely on the behavioral principle of
estoppel, would be inappropriate. In trademark infringement, however, considerations are
different, because the nature of defences vary, as the defendant can establish honest
concurrent user, prior user, etc, since the claim is uniquely asserted on a case to case
basis. However, a copyright subsists for the longest duration, in the cluster of intellectual
property rights, and the courts are entitled to test the wide and sweeping nature of rights
asserted, undoubtedly in the context of an estoppel, but not soley on such bases. In this
case, royalty was paid in about two instances, and had not been paid for over 7 years
before this case was instituted. In the circumstances, there is no estoppel which bars the
defendants from contesting the plaintiff’s copyright in the drawings.
26. The court has noticed more than once, previously, in this judgment, that the
contracts have an underlying public purpose, ie. catering to the needs of the Ministry of
Defence. The documentary materials on record prima facie suggest that even though
Ashok Leyland granted Babbar Wreckers the contract to manufacture wrecker
assemblies, roughly in the proportion of 50% of what granted in the orders, there is no
written arrangement. The plaintiff of course has averred that royalty of 3% to 7 % used to
be paid to it by Perfect in respect of the wrecker units assembled by it. However, in the
absence of any indication about the duration of the arrangement, and any positive
evidence that such understanding was to operate in a specific manner, for all times to
come, or for a period, it would be imprudent for the court to issue a direction to Ashok
Leyland, to share its contract execution with Babbar Wreckers. Such a direction would
result in the court enjoining a party to enter into a contract, which it clear cannot issue.
Furthermore, the court is of the opinion that attaching any condition of the kind insisted
upon by the plaintiff to permit execution of any contract by the Central Government with
Ashok Leyland, would clearly not be in the public interest. Clause 37 of the JSQR, also
points to the possibility of the Government being the owner and author of the works. In
the circumstances, the court cannot be blind to the public interest element, which looms
large in this case.
27. In view of the above discussion, it is held that the plaintiff has been unable to
CS (OS) 803/2009 Page 14
establish, prima facie, to its being a copyright owner. At the same time, the court is
conscious that it has been beneficiary in previous contracts, and that 3-7 % royalty was
being paid to it – although some time ago. Having regard to these overall circumstances,
and to balance the competing rights, and protect the plaintiff’s interest, Ashok Leyland is
directed to furnish an undertaking to pay damages in the event of the plaintiff succeeding.
It shall, to that end, also file accounts, and statements, in respect of the amounts received
and profits, if any, derived in the contracts that were executed when the suit was filed,
and further contracts to be executed, in the event of their being awarded to it, by the
Central Government. Such accounts shall be filed once each year. Ashok Leyland is also
directed to furnish a bank guarantee for the sum of Rs. 30,00,000/- in favour of the
Registrar of this Court, to satisfy any money decree, within four weeks from today.
28. IA Nos.5916, 8163/2009 and 1396/2010 are disposed of in the above terms.
CS (OS) 803/2009
th
The suit shall be listed for further proceedings, on 29 November, 2010.
S. RAVINDRA BHAT
(JUDGE)
NOVEMBER 2, 2010
CS (OS) 803/2009 Page 15