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Ajanta Limited & Others v/s M/s. Ajanta Transistor Clock Manufacturing Co & Others

    CCP (O) Nos. 114 of 2012, 15, 22 & 76 of 2013 in Arb. A. No. 19 of 2012
    Decided On, 13 May 2014
    At, High Court of Delhi
    For the Appearing Parties: Dushyant Dave, Sr. Adv. With Vikram Bajaj, T. Sundar Ramanathan, Natasha, Divya, Azeem, Purvish Malkan, Advocates.

Judgment Text
Manmohan Singh, J. (Oral)

1. By order dated 20th September, 2013, this Court decided the Arbitration Appeal No.19/2012 wherein it was held that both the parties would strictly comply with all the terms and conditions arrived at between the parties in Memorandum of Understanding (MOU) dated 21st July, 2004, until the Arbitrator passed the Award, as a temporary arrangement. Both the parties were granted time to file the undertaking by way of affidavits.

2. In the pending contempt proceedings bearing No.114/2012, by order dated 31st July, 2013, earlier the Court directed Mr.Jaysukhbhai Odhavjibhai Patel, partner of respondent No.1 and Managing Director of respondent No.5-Company to remain present on the next date. He was also directed to file the complete statement on affidavit as to the number of pieces of clocks of the kind referred to in the said order which have been sold after 3rd October, 2012 along with the details of invoice and value stated therein. In the said proceeding, the contention of Mr.Dushyant Dave, learned Senior counsel appearing on behalf of the petitioners was that, 'the respondents are selling clocks (which are not LCD or LED clocks) even today through another entity by the name of Oreva Marketing Company.' The petitioner was also directed to file an affidavit giving details in this regard.

3. Other contempt petitions being CCP(O) Nos.22/2013 & 76/2013 filed by the petitioners with the allegations of similar nature are also pending.

4. The respondents’ have also filed the contempt petition being CCP(O) No.15/2013 which is pending. According to the respondents, the petitioners themselves are not complying with clause 2 of the MOU whereby the petitioners were not entitled to use the trademark ORPAT in respect of wall-clocks and timepieces but despite of the same, they are continuously using the said name on their wall-clocks and timepieces and are also using the mark QUARTZ by selling their products which is reflected in their boxes, packaging material, catalogue and literature and other places in respect of wall-clocks and time pieces in violation of the MOU and the orders dated 17th May, 2012.

5. The respondents have challenged the order dated 20th September, 2013, passed in Arbitration Appeal No. 19/2012, in the Supreme Court by filing of Special Leave Petition No.31962/2013 which is still pending. In the said SLP, the Supreme Court while passing the order dated 28th October, 2013 observed that the contempt proceedings pending before the High Court may be proceeded with further, however, no final order would be passed and it would be open to the parties to make a request before the High Court for dispensing with their personal presence in the contempt proceedings.

6. Mr. Dushyant Dave, learned Senior counsel appearing on behalf of the petitioners states that since the respondents are not complying the terms and conditions of the MOU as well as the order dated 17th May, 2012 passed by this Court in OMP No.431/2012, which was passed with the consent of the parties, therefore, this Court has to pass some interim order for implementation of the terms and conditions of the MOU as well as the order passed by this Court as this Court is empowered to pass such orders for the compliance. He referred the decision of the Supreme Court in the case of Delhi Development Authority vs. Skipper Construction Co. (P) Ltd. and Another, reported in (1996) 4 Supreme Court Cases 622, paras 17 & 19, which read as under:-

'17. The principle that a contemnor ought not to be permitted to enjoy and/or keep the fruits of his contempt is well-settled. In Mohd. Idris v. Rustam Jehangir Babuji, (1985) 1 SCR 598, this Court held clearly that undergoing the punishment for contempt does not mean that the Court is not entitled to give appropriate directions for remedying and rectifying the things done in violation of its Orders. The petitioners therein had given an undertaking to the Bombay High Court. They acted in breach of it. A learned Single Judge held them guilty of contempt and imposed a sentence of one month's imprisonment. In addition thereto, the learned Single Judge made appropriate directions to remedy the breach of undertaking. It was contended before this Court that the learned Judge was not justified in giving the aforesaid directions in addition to punishing the petitioners for contempt of court. The argument was rejected holding that "the Single Judge was quite right in giving appropriate directions to close the breach (of undertaking)".

19. To the same effect are the decisions of the Madras and Calcutta High Courts in Century Flour Mills Limited v. S. Suppiah, AIR1975 Mad. 270 and Sujit Pal v. Prabir Kumar Sun, AIR1986 Cal. 220. In Century Flour Mills Limited, it was held by a Full Bench of the Madras High Court that where an act is done in violation of an order of stay or injunction, it is the duty of the Court, as a policy, to set the wrong right and not allow the perpetuation of the wrong-doing. The inherent power of the Court, it was held, is not only available in such a case, but it is bound to exercise it to undo the wrong in the interest of justice. That was a case where a meeting was held contrary to an order of injunction. The Court refused to recognize that the holding of the meeting is a legal one. It put back the parties in the same position as they stood immediately prior to the service of the interim order.'

7. As a matter of fact, the respondents have a similar grievance against the petitioners. They state that the petitioners are also not complying the terms of the MOU as well as the order passed by this Court on 17th May, 2012 in the presence of the evidence of the respondents which shows that the petitioners are using the trademark ORPAT in their advertising material.

8. When the contempt proceedings were taken up, small submissions were made by both the parties. At one point of time, they had also met in person and discussed the terms of settlement on all the issues but the same was not materialized between the parties. However, at this stage, they are ready to make some working temporary arrangement till the award is rendered in the arbitration proceedings.

9. As already mentioned that the SLP is still pending in the Supreme Court and by the order dated 28th October, 2013, it was recorded with regard to the contempt proceedings that no final order be passed in the matter. Without prejudice, both the parties are agreeable to comply with the terms and conditions of the MOU dated 21st July, 2004 as well as the order dated 17th May, 2012 which was passed with the consent of the parties in OMP No.431/2012, sincerely and it is agreed by them now that the said orders would not only apply to the parties herein but also to their subsidiaries, sister concerns, licencees, agents, including entity Oreva Marketing Company or any other entity controlled directly or indirectly by either party, and also their authorized dealers in view of the allegations made by the parties against each other for non compliance of the terms of the MOU as a temporary arrangement for the purpose of compliance. The parties are also agreeable that in order to comply the said terms, a Court Commissioner be appointed to verify the position in the market for the said purpose, who may after considering the situation, give a surprise visit at the instance of the aggrieved party at the site of the other party and make an inventory of goods which are contrary to the terms of the MOU and inform the Court accordingly in his report. He may be authorised to visit the authorized dealers, subsidiary or sister concerns, licencees, agents, including entity Oreva Marketing Company or any other entity controlled directly or indirectly by either party. The aggrieved party who would inform the Court Commissioner in writing against the other party shall bear the expenses and the fee of the Court Commissioner for the said purposes. The surprise visit of the Court Commissioner would be without notice to the other party.

10. The parties agree that this arrangement may continue at least for three months in order to comply the terms and conditions of the MOU and the order dated 17th May, 2012 passed in OMP No.431/2012 with the consent of the parties and this arrangement would continue for the said period for the purpose of compliance only.

11. In view of the above said, the request of both the parties is allowed accordingly for appointment of the Court Commissioner. The said order shall come into operation after the expiry of period of 15 days from today so that in case cer

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tain goods/products are available with the parties or their subsidiary/sister concern/authorized dealers, licencees, agents, employees, any other person or entity including Oreva Marketing Company or any other entity controlled directly or indirectly by either party, assigns, the same may be removed or obliterated. 12. As agreed, Ms. Anam Zaidi, Advocate (Mobile No.9891735884) is appointed as Court Commissioner who shall comply with the abovementioned directions as agreed between the parties. The fee of the Court Commissioner would be `70,000/- per visit excluding pocket expenses, payable by the party who is making such complaint. The Court Commissioner shall submit her report on the next date. 13. List on 11th September, 2014. 14. Copies of this order be given dasti to the learned counsel for the parties under the signatures of the Court Master and a copy thereof be also communicated to the Court Commissioner forthwith.