Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
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% Judgment Reserved on : 24 January, 2022
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Judgment Delivered on : 02 February, 2022
+ CS(COMM) 117/2020
ASTRA ZENECA AB & ANR. ..... Plaintiffs
Through Mr. Pravin Anand, Ms. Vaishali
Mittal, Mr. Siddhant Chamolam and
Mr. Souradeep Mukhopadhyay,
Advocates
versus
NATCO PHARMA LIMITED ..... Defendant
Through Mr. J. Sai Deepak, Mr. G. Natraj
Guruswamy, Ms. Rajeshwari H. and
Mr. Tahir A. J., Advocates
+ CS(COMM) 129/2020
ASTRA ZENECA AB & ANR. ..... Plaintiffs
Through Mr. Pravin Anand, Ms. Vaishali
Mittal, Mr. Siddhant Chamolam and
Mr. Souradeep Mukhopadhyay,
Advocates
versus
SHIV SHIVAM PHARMA & ORS. ..... Defendants
Through Mr. J. Sai Deepak, Mr. G. Natraj
Guruswamy, Ms. Rajeshwari H. and
Mr. Tahir A. J., Advocates
CORAM:
HON'BLE MR. JUSTICE AMIT BANSAL
Signature Not Verified
Digitally Signed By:MAMTA
ARYA
Signing Date:03.02.2022 12:55:29
CS(COMM) 117/2020 & CS(COMM) 129/2020 Page 1 of 8
JUDGMENT
AMIT BANSAL, J.
[VIA VIDEO CONFERENCING]
I.A.12825/2021 (for Directions) in CS(COMM) 117/2020
1. This application has been filed on behalf of the applicants/defendants
seeking the following directions:
“a. Release the Defendant from all its undertakings in the
present Suit;
b. Release Defendant from the obligation to renew the bank
guarantee from time to time;
c. Dismiss IA 3701/2020 under Order XXXIX rules 1 & 2 filed
by the Plaintiffs.”
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2. Notice in this application was issued on 30 September, 2021 and
pursuant thereto, reply has been filed on behalf of the non-
applicants/plaintiffs.
3. Before dealing with the application, it may be relevant to refer to the
previous proceedings in the present suit.
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4. Reference may be made to the order dated 6 May, 2020 passed by
this Court in I.A.3701/2020, which was filed by the plaintiffs in the main
suit under order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908
(CPC). The relevant paragraphs of the said order are extracted below:
“2. Learned senior counsel appearing for the defendant on
instructions states that as the matter will take time to argue,
without prejudice to his rights and contentions the defendant is
ready and willing to stop production or dealing with the impugned
drug „DAPNAT‟ or any other drug which is in violation of the
patent IN 205147 and IN 235625 till first October, 2020. He
submits that this submission is being made in view of the fact that
the genus patent IN 205147 expires on 02.10.2020. He further
submits that products worth about Rs. 20 crores have been sold
Signature Not Verified
Digitally Signed By:MAMTA
ARYA
Signing Date:03.02.2022 12:55:29
CS(COMM) 117/2020 & CS(COMM) 129/2020 Page 2 of 8
in the market by the defendant on principal to principal basis.
He submits that it is not possible to recall the above products. He
further submits that without prejudice to the validity or invalidity
of the patent which would be decided subsequently that the
defendant is willing to give a bank guarantee for a sum of Rs. 3
crores which would be encashable in case this court records a
finding against the defendant/ on the issue of damages and
mesne profits.
3. The defendant shall remain bound by the said submission.
The bank guarantee will be furnished within two weeks in favour
of the Registrar General of the Delhi High Court. The validity of
the bank guarantee will be up to 01.10.2020 or till further orders
that this court may pass.”
5. Thereafter, arguments were heard on the said application as well as
I.A.3915/2020, filed by the defendant in the present suit under Order
XXXIX Rules 1 and 2 of the CPC, and the undertaking given on behalf of
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the defendant on 6 May, 2020 was extended.
6. Applications in the two suits, being I.A.12009/2020 and
I.A.12006/2020, were filed on behalf of the plaintiffs seeking stay of the
proceedings in the suits in view of the appeals filed by the plaintiffs against
non-grant of injunction in favour of the plaintiffs in applications for interim
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injunctions filed in connected suits. Accordingly, vide the order dated 14
December, 2020, proceedings in the applications under Order XXXIX Rules
1 and 2 of the CPC and under Order XXXIX Rule 4 of the CPC were stayed
till the decision in the above said appeals and it was recorded that the
undertaking given on behalf of the defendant in CS(COMM) 117/2020 and
the interim order passed in CS(COMM) 129/2020 shall continue till the
decision in the said appeals.
7. After the Division Bench (of which I was a part) pronounced its
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judgment on 29 July, 2021, upholding the decisions of the two Coordinate
Signature Not Verified
Digitally Signed By:MAMTA
ARYA
Signing Date:03.02.2022 12:55:29
CS(COMM) 117/2020 & CS(COMM) 129/2020 Page 3 of 8
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Benches of this Court dated 2 November, 2020 and 18 November, 2020
and dismissing the appeals filed on behalf of the plaintiffs, the present
application was filed on behalf of the defendant. Thereafter, on the basis of
the statement given on behalf of the counsel for the plaintiffs, that he does
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not oppose the sale of the impugned products by the defendant, on 8
October, 2021, the defendant was relieved of its undertaking. As regards the
issue of release of bank guarantee, the hearing was adjourned to the next
date. Therefore, now, the issue to be decided is whether or not the defendant
should be released from extending the bank guarantee of Rs.3,00,00,000/-
(prayer “b.” of the present application).
8. Counsel for the applicant/defendant contended that:
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(i) In terms of the judgment dated 20 July, 2021 passed by the Division
Bench, there is no injunction in favour of the plaintiffs. Even in the
Special Leave Petition filed on behalf of the plaintiffs before the
Supreme Court, no interim order has been passed.
(ii) In view of the fact that there is no injunction order against the
defendants prevailing in both the suits, there is no need to keep the
bank guarantee alive.
(iii) The only remedy now available with the plaintiffs is to claim
damages.
(iv) Continuation of the bank guarantee given by the defendant would be
akin to an order being passed under Order XXXVIII Rule 5 of the
CPC i.e., attachment before judgment and parameters as envisaged
under Order XXXVIII Rule 5 of the CPC are not satisfied in the
present case.
Signature Not Verified
Digitally Signed By:MAMTA
ARYA
Signing Date:03.02.2022 12:55:29
CS(COMM) 117/2020 & CS(COMM) 129/2020 Page 4 of 8
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(v) As per the order dated 6 May, 2020, the bank guarantee was not to
be continued till the pendency of the suit. It had to only continue till
further orders. Defendants in the present suits cannot be any worse
off than the defendants in the other suits who also challenged the
validity of Indian Patent No.205147 (hereinafter „IN 147‟)/genus
patent.
9. Per contra , the counsel for the plaintiffs submitted that:
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(i) Order dated 6 May, 2020 records the statement on behalf of the
defendant that the defendant had sold products worth around
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Rs.20,00,00,000/- till 6 May, 2020 and that it was not possible to
recall the said products and therefore, the defendant was willing to
furnish a bank guarantee of Rs.3,00,00,000/-.
(ii) Defendants have not raised any credible challenge to the validity of
the IN 147. Therefore, the sale of Dapagliflozin by the defendants
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before 2 October, 2020, the date on which the said patent expired,
amounted to infringement of, at the very least, IN 147.
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(iii) In the decisions of the Coordinate Benches dated 2 November, 2020
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and 18 November, 2020 as well as the decision of the Division
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Bench dated 20 July, 2021, no doubts were expressed with regard to
the validity of IN 147. The only issue considered in the said judgment
of the Division Bench was with regard to the validity of the Indian
Patent No.235625 (hereinafter „IN 625‟)/species patent.
(iv) Defendants in the present suits are not similarly situated as the
defendants in other suits as the defendants in the present suits had
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commenced sale of their products from 1 April, 2020, whereas the
Signature Not Verified
Digitally Signed By:MAMTA
ARYA
Signing Date:03.02.2022 12:55:29
CS(COMM) 117/2020 & CS(COMM) 129/2020 Page 5 of 8
defendants in other suits did not sell this product till the expiry of IN
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147 on 2 October, 2020.
(v) Bank guarantee was given by the defendant in view of the fact that it
had sold infringing products worth over Rs.20,00,00,000/- and
therefore, it should be continued till the disposal of the suit. Bank
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guarantee is in respect of actions done prior to 2 October, 2020 and
not thereafter.
10. I have considered the submissions of the parties.
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11. A reading of the order dated 6 May, 2020 makes it abundantly clear
that the defendant itself had offered to give a bank guarantee of
Rs.3,00,00,000/- which would be encashable in the event of this Court
recording a finding against the defendant on the issue of damages and
mesne profits . Such a finding can be given by the court only after the trial
in the suit and upon a final adjudication of the suit. Hence, it was clear that
the aforesaid bank guarantee would be continued till the adjudication of the
suit.
12. The defendants had offered to give the aforesaid bank guarantee on
account of the fact that the products worth Rs.20,00,00,000/- had already
been sold in the market by the defendants and it was not possible to recall
the said products. The fact that the defendants expressed their readiness and
willingness to stop production or dealing with the impugned drug
“DAPNAT” or any other drug which was in violation of patent IN 147 and
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IN 625 till 1 October, 2020, amounted to an implied acceptance of the fact
that the drugs were sold in violation of IN 147. Further, the offer of
furnishing a bank guarantee was made, in effect, to avoid an order of
injunction against the defendant.
Signature Not Verified
Digitally Signed By:MAMTA
ARYA
Signing Date:03.02.2022 12:55:29
CS(COMM) 117/2020 & CS(COMM) 129/2020 Page 6 of 8
13. There is merit in the submission made on behalf of the plaintiffs that
neither of the two judgments of the Coordinate Benches of this Court nor the
judgment of the Division Bench cast any doubt in respect of the IN
147/genus patent. The only observations made in the judgment of the
Division Bench were with regard to the IN 625/species patent, against which
a Special Leave Petition is pending before the Supreme Court.
14. It was contended on behalf of the plaintiffs that the defendants in the
present suits were not similarly placed as the defendants in the other suits
inasmuch as the defendants in the present suits commenced sale of their
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products on 1 April, 2020, whereas the other defendants did not sell the
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said products before 2 October, 2020. Along with the written submissions,
plaintiffs have given details of the date of the launch of products containing
Dapagliflozin by the defendants in the other suits and all the said launches
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were after 2 October, 2020. Nothing has been placed on record on behalf
of the defendants in support of their contention that the defendants in the
present suits are placed similarly as the defendants in the other suits. The
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decision of the Division Bench is applicable only for actions done post 2
October, 2020 and has no relevance on the issue of bank guarantee furnished
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by the defendants, which was in respect of acts done prior to 2 October,
2020, during the subsistence of IN 147. It has specifically been noted in
paragraph 11 of the judgment of the Division Bench that the defendants
therein had respected IN 147.
15. In view of the above, the prayer “b.” made in the aforesaid application
is declined and it is directed that the bank guarantee of Rs.3,00,00,000/-
given by the defendants would continue till the final adjudication of the suit.
Signature Not Verified
Digitally Signed By:MAMTA
ARYA
Signing Date:03.02.2022 12:55:29
CS(COMM) 117/2020 & CS(COMM) 129/2020 Page 7 of 8
16. Needless to state that any observations made herein are only for the
purpose of deciding the present application and shall not have any bearing
on the adjudication of the merits of the case.
I.A.12998/2021 in CS(COMM) 129/2020
17. Since the stock of the goods in CS(COMM) 129/2020 was received
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prior to 2 October, 2020 and is covered by the bank guarantee given by the
defendant in CS(COMM) 117/2020, the said bank guarantee shall also
continue till the adjudication of the present suit.
AMIT BANSAL, J.
FEBRUARY 02, 2022
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Signature Not Verified
Digitally Signed By:MAMTA
ARYA
Signing Date:03.02.2022 12:55:29
CS(COMM) 117/2020 & CS(COMM) 129/2020 Page 8 of 8