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The reason for the existence of Order XIII-A of the Code of Civil Procedure, 1908 was because despite suits having a clear outcome, that could be ascertained on merits, it was imperative for them to go through the procedure under the “CPC” which was a time-consuming process. To get rid of the delays that took place due to technicalities, the amendment envisioned a process for a summary judgment. This process was similar to the one provided for summary suits in CPC, with a difference being that an application for summary judgment could be in respect of a relief in a commercial dispute, while summary suits were with respect to reliefs related to liquidated demand or a fixed sum of debt.
The Commercial Courts Act (2015), under Order XIII-A of inserted the procedure for summary judgment in CPC. This was in pursuance of the procedure for Summary Judgement that was submitted to the Law Commission in its 253rd Report for deciding claims pertaining to oral evidence as long as the application is filed accordingly. As per the provisions, it needs to be understood that on an application by a party (the party could be either the plaintiff or the defendant), the courts have the power to decide a claim. This claim is inclusive of a part of a claim, or a counterclaim, and also any particular question that’s essential or on which the whole or a part of the claim depends on. The claims pertaining to commercial disputes, without recording oral evidence. The same had been done to avoid prolonged trial in cases wherein-
(a) the plaintiff has no real prospect of succeeding on the claim or the defendant has no real prospect of successfully defending the claim,
(b) there is no other compelling reason why the claim should not be disposed of before recording oral evidence.
A party may apply for a summary judgment in the prescribed manner at any time after the summons has been served on the defendant and before the issues have been framed. The respondent has the ability to reply in the prescribed manner within the timeframe of 30 days. In respect of this, the court has the power to make any order it deems fit. This includes making an order that it deems fit, which may include a judgment on the claim, dismissal of the claim, or the dismissal of an application and a conditional order (that may, for instance, provide security for restitution of costs). There are two criteria that need to be met before the grant of a summary judgment-
- There must be no genuine issues of material facts.
- The judgment must be entitled as a matter of right.
Bright Enterprises Pvt. Ltd. & Anr. v. MJ Bizcraft LLP & Anr. 2016, was the first-ever decision in which the Delhi High Court interpreted the Summary Judgement Proceedings under Order XIII-A of CPC, the case allowed an opportunity to the court, while setting aside the prior ruling by a single judge, to note important points such as the Period of Filing Application, the Contents of Application and the Nature of Proceedings. With respect to the first point, the court stressed that the power could only be exercised in the window after serving the summons to the Defendant and before the framing of issues by the Court in the suit. It was also required to file an appropriate application that complied with the contents of Rule 4 of Order XIII-A. It was imperative that the application and its reply disclosed all material facts along with identifying points of law, inclusive of documentary evidence. Emphasis was required to be placed on the prospects of the claim, as to whether it could succeed or not. The burden on the respondents to the application was to include issues and additionally state the reasons to prevent the court from proceeding with a Summary Judgement while identifying further evidence that could be brought on record at trial. The Court, from a plain of the Order XIII-A of the CPC, held that the proceedings were adversarial in nature. This meant that summary judgment could only be rendered in the presence of an adversary.
Summary Judgement: The court’s view in granting such an application
The willingness of courts to pass summary judgments can be seen from the fact that the applications for summary judgments have been viewed favorably. These provisions are handy, especially in cases where there has been a default by defendants, i.e. where they haven’t entered an appearance or haven’t filed a written statement. There are also ex-parte cases, wherein the courts have examined documents, that have been provided by the plaintiffs to ascertain whether there are real chances or prospects of success for a defendant and conclude accordingly.
Moving further, in a case where the contended issue was alleged plagiarism of software and the dependence was on the report of a third-party expert for comparing the codes of two software, the Delhi High Court accepted the defendant’s application for a summary judgment as the expert didn’t find any evidence of plagiarism. This shows us that the approach of the court on a speedy resolution has increased with the introduction of the provision for summary judgment.
However, when a triable issue was found, like in Rockwool International A/S v. Thermocare Rockwool (India) Pvt. Ltd., wherein the question was regarding the infringement of a validly registered trademark and the point raised forth was that it was generic in nature, in such a situation, the application was rejected by the court.
In Syrma Technology Private Limited v. Powerwave Technology Sweden AD, where the defendant didn’t refund the amount of advance that he received for only shipping a part of the order, claiming to have adjusted the money against other dues by the plaintiff on oral instructions of the plaintiff’s holding company, the Single Judge did accept the plaintiff’s application for summary judgment due to the lack of specificity in the pleadings of the defendant. The Division Bench of Madras High Court did set aside the order of the Single Judge and clarified that although it was improbable, there was still a faint possibility that the defendant could be successful and keeping that in mind, stated that the matter ought to proceed to trial. However, the defendant was still required to pay a conditional deposit that was around 66% of the amount in dispute.
The scope for a summary judgment can be best explained from the analysis by the High Court of Delhi in Su-Kam Power Systems Ltd. v. Kunwer Sachdev, wherein the Hon’ble Court held,
“…this Court is of the view that when a summary judgment application allows the Court to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely, or cost-effective. It bears reiteration that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the Court the confidence that it can find the necessary facts and apply the relevant legal principles so as to resolve the dispute…Consequently, this Court is of the opinion that there will be no real prospect of successfully defending the claim’ when the Court is able to reach a fair and just determination on the merits of the application for summary judgment. This will be the case when the process allows the court to make the necessary finding of fact, apply the law to the facts, and the same is a proportionate, more expeditious and less expensive means to achieve a fair and just result.”
The above cases further highlight the court’s use of these provisions to limit delay in proceedings arising out of the adoption of baseless grounds, thereby indicating the need for substance in the said proceedings. The courts, apart from accepting the application for summary judgment, have also made use of the power for passing conditional orders that ensure parties’ cognizance in bearing costs on failure. It can also be seen that rather than having a fixed approach in dealing with similar cases, the conclusions would wary on the basis of peculiarity in facts.
Author: Abhimanyu Agarwal, a 5th Year student of BA-LLB of O.P. Jindal Global University, an intern at Khurana And Khurana, IP Attorney and Advocates. In case of any queries please contact/write back to us at firstname.lastname@example.org.