Comments on the New India Assurance Co. Ltd. v. Hilli Mutipurpose Cold Storage Pvt. Ltd. Reported in 2020 (3) KLT 59 (SC) = 2020(2) KLT OnLine 1003(SC) and Dissent on the 45 Days Rule
By Sajeer H., Court Officer, Kerala State Consumer Disputes Redressal Commission,TVM
14/02/2022Comments on the New India Assurance Co. Ltd. v. Hilli Mutipurpose Cold Storage Pvt. Ltd. Reported in 2020 (3) KLT 59 (SC) = 2020(2) KLT OnLine 1003(SC) and Dissent on the 45 Days Rule
(By Sajeer H., Court Officer, Kerala State Consumer Disputes Redressal Commission, Thiruvananthapuram)
The titled case was the culmination of a reference made to the Constitution Bench of the Apex Court, and relates to the grant of time for filing response or version to a complaint under the provisions of the Consumer Protection Act, 1986. The first question referred was whether Section 13(2)(a) of the Act, which limits the time for the respondent/opposite party to file his response to the complaint to 30 days or such extended period, not exceeding 15 days, should be read as mandatory or directory or whether the District Forum has the power to extend the time for filing the version beyond the period of 15 days, in addition to the initial 30 days. The second question which was referred to it was, what would be the commencing point of limitation of the period of 30 days stipulated in the aforesaid Section.
The Constitution Bench of the Apex Court held that the District Forum has no power to extend the time for filing the response to the complaint beyond the period of 15 days in addition to the initial 30 days as contemplated under Section 13 of the Act and the commencing point of the limitation of 30 days would be from the date of receipt of the notice accompanied by the complaint of the opposite party along with the documents produced, and not mere receipt of the notice of the complaint. It has also been held that the provision aforesaid was mandatory and not directory.
The question was referred by a two Judge Bench of the Apex Court in M/s.Bhasin
Infotech and Infrastructure Pvt.Ltd. v. M/s.Grand Venezia Buyers Association (2016 (1) KLT OnLine 2790 (SC)) in the following words: “There is an apparent conflict between the decisions of this Court in Topline Shoes Limited v. Corporation Bank (2002 (3) KLT OnLine 1015 (SC) = (2002) 6 SCC 33), on the one hand, and J.J.Merchant & Ors. v. Shrinath Chaturvedi (2002 (3) KLT OnLine 1016 (SC) = (2002) 6 SCC 635) on the other, in so far as the power of the Courts to extend the time for filing of the version to a complaint is concerned. The earlier case takes the view that the relevant provisions including those of Order VIII Rule 1 of the Civil Procedure Code, 1908 are directory in nature and the Courts concerned have the power to extend the time for filing the written statement. The second takes a contrary view that the Consumer Fora has no such power”.
The Apex Court held that a bare reading of Section 13(2) of the Act makes it clear that the copy of the complaint which is to be sent to the opposite party, should be accompanied by a direction to give his version of (or response to ) the case (or complaint) within 30 days. It is further held that such 30 days can be extended by the District Forum, but not beyond 15 days.
It is reiterated that sub-section (2)(b)(i) of Section 13 of the Act provides for a complaint to be decided based on the response of the opposite party and the evidence of the complainant and the opposite party, where allegations contained in the complaint are denied or disputed by the opposite party. Sub-section (2)(b)(ii) of Section 13 of the Act provides that where no response is filed by the opposite party, the complaint may be decided ex parte based on the evidence brought forth by the complainant.
It is further observed that “justice hurried is justice buried. But in the same breath, it is also stated that “justice delayed is justice denied”. The legislature has chosen the latter and for a good reason. It is in consonance with the objective sought to be achieved by the Act, which is to provide speedy justice to the consumer. It is not sufficient time to file a response to the complaint that has been denied to the opposite party, it is just that the discretion for extension of time beyond 15 days (after the 30 days) has been curtailed and consequences for the same have been provided under Section 13(2)(b)(ii) of the Act. It may be that in some cases the opposite party could face hardship because of such provision, yet for achieving the object of the Act, which is speedy and simple redressal of consumer disputes, a hardship that may be caused to a party has to be ignored.
Let’s go through the various provisions of the Act and Regulations, to explore whether it is mandatory or directory.
No one should be a judge in his own cause and each party should be allowed to be heard are the two cardinal principles of Natural Justice. It is the general principle of law that justice should not only be done but should manifestly and undoubtedly be seen to be done. Even if the legislature specifically authorizes an administrative action without hearing or without giving sufficient opportunity for hearing, it would be violative of Articles 14 and 21 of the Indian Constitution. However, it is true that refusal to participate in an enquiry without a valid reason, cannot be pleaded as a violation of natural justice at a later stage. The courts should afford a reasonable opportunity to the party to present his/her case. This can be done either in writing or orally at the discretion of the court unless the statute under which the authority is functioning, directs otherwise. If a statute allows natural justice only in a limited manner and excludes the power to extend the stipulated time even on the principles of Act of God or unexpected incidents that may preclude a person from filing his version within time, such provision would be a definite violation of the Natural Justice enshrined in Articles 14 and 21 of the Constitution of India.
Unlike the common hierarchy of courts in India, our Consumer adjudicatory system is laddered as District Commissions at the District level, State Commissions at the State level and National Commission at the National Level. A person aggrieved by the order of the National Commission has a remedy only before the Apex Court. It is very interesting to note that the powers of punishment assigned by the Act to the first original authority, the District Commission are the same and similar to that of the highest original authority, the National Commission.
Coming to the case on hand, the Apex Court has given different interpretations for the term “endeavour” that appears in two places. First Place is in Regulation 26 of the Consumer Protection Regulations, 2005 wherein, 26(1) says that in all proceedings before the Consumer Forum, endeavour shall be made by the parties and their counsel to avoid the use of provisions of Code of Civil Procedure, 1908:
Provided that the provisions of the Code of Civil Procedure, 1908 may be applied which have been referred to in the Act or the rules made thereunder. (emphasis supplied).
Secondly, the Apex Court travelled through sub-section (3A) of Section 13 of the Consumer Protection Act, 1986, wherein:
Every complaint shall be heard as expeditiously as possible and endeavour shall be made to decide the complaint within three months from the date of receipt of notice by the opposite party where the complaint does not require analysis or testing of commodities and within five months, if it requires analysis or testing of commodities: (emphasis supplied)
Among these two provisions, the Apex Court has construed the term “endeavour” that appears in the Regulation as mandatory and in the same breath, it has interpreted the term “endeavour” that appears in Section 13(3A) of the Act as the directory.
The term endeavour means, an effort or an attempt. It is an attempt to do something, especially something new or difficult. By including the aforesaid word in Regulation 26 and incorporating it in Section 13 of the Act, the legislature has intentionally reduced the rigidity of the procedures usually followed and never intended a complete prohibition of the applicability of the Code of Civil Procedure.
On going through the Act in its entirety, it can be seen that the Act protects the rights of a person aggrieved and safeguards the principles of natural justice in letter and spirit. The only intention of the legislature is to settle the consumer disputes as expeditiously as possible, but not in a hurried manner.
It is pertinent to note that sub-section (6) of Section 13 the Act permits the procedure under O I Rule 8 and sub-section (7) of Section 13 allows the procedures under O.XXII of the Civil Procedure Code, 1908.
On a conjoint reading of all the above provisions, it can be seen that the legislative intention in inserting the word ‘endeavour’ is to construe the provisions in a directory manner.
Clause (a) of sub-section (1) of Section 13 of the Act says that, on the admission of a complaint, if it relates to any goods, refer a copy of the admitted complaint, within twenty-one days from the date of its admission to the opposite party mentioned in the complaint directing him to give his version of the case within thirty days or such extended period not exceeding fifteen days as the case may be granted by the forum.
Nowhere in the Act the term notice or summons has been used. The provisions use the term ‘version’ only and not the term “written version”. It has used the word ‘refer’ only. When we go deep into the provision it can be seen that the legislature included the term in a liberal manner and not in the strict sense.
The Apex Court, while deciding the instant case, relied on Order V Rule 1 of the Civil Procedure Code. It says that the term ‘refer’ includes the term notice wherein, every summons shall be accompanied by a copy of plaint. It says that while issuing notice to the opposite parties the mandate in Order V of the C.P.C. shall be followed.
Order V Rule 1 of C.P.C. says that ‘when a suit has been duly instituted, a summons may be issued to the defendant to appear and answer the claim and to file written statement of his defence, if any, within 30 days from the date of service of summons on the defendant’. The second proviso to O. V R1 says that “where the defendant fails to file the written statement within the said period of 30 days, he shall be allowed to file the same on such other days as may be specified by the court, for reasons to be recorded in writing, but which shall not be later than 90 days from the date of service of summons.
The Apex Court herein held that for service of notice to the opposite parties the consumer commissions have to follow Order V R.1 C.P.C. and in the same breath holds that for version or response, the provisions of C.P.C. shall not be followed. This is piecemeal interpretation and is contradictory.
It is true that the preamble of the Act mentions, for the better protection of interests of consumers, but that doesn’t mean to discard the right to be heard of the opposite parties. Sub-section (2)(b)(i) of Section 13 of the Act provides that a complaint has to be decided based on the evidence brought to its notice by the complainant and the opposite party. Sub-section (2)(b)(ii) of Section 13 of the Act provides that, the complaint may be decided ex parte based on the evidence brought forth by the complainant where the opposite party fails to take any action to represent his case within the time given by the forum. Sub-section (2)(c) of the Act, provides that where the complainant fails to appear on the date of hearing the forum may either dismiss the complaint for default or decide it on merits. When we go through this provision it can be seen that a written version or response is not a mandatory criterion for deciding a case in the forum. If the opposite party who appears on the date specified and submits that he does not intend to file a written response but wants to proceed with only oral evidence, the fora have no way other than than to proceed with the case. On the other hand, if the first part is to also be construed as mandatory, then the second part must be construed as mandatory. The Apex Court must fix a period and penal consequences for the non appearance of the complainant also. Therefore, Section 13(2)(i) and Section 13(2)(ii) and Section 13(2)(c) of the Act are to be construed harmoniously not to be read as prohibitive or negative.
In Rohitash Kumar v. Om Prakash Sharma (2012 (4) KLT SN 139 (C.No.134) SC = (2013) 11 SCC 451) the Apex Court held that hardship and inconvenience to either party concerned, or to an individual cannot be a basis to alter the meaning of the language employed by the legislature. In Patangrao Kaddam v. Pritviraj Sajjirao Yadav Deshmugh (2001 (1) KLT OnLine 1076 (SC) = AIR 2001 SC 1121) it was held that “the literal rule of interpretation really means that there should be no interpretation. In other words, we should read the statute as it is, without distorting or twisting its language. We may mention here that the literal rule of interpretation is not only followed by Judges and lawyers, but it is also followed by the lay man in his ordinary life. To give an illustration, if a person says “this is a pencil”, then he means that it is a pencil; and it is not that when he says that the object is a pencil, he means that it is a horse, donkey or an elephant. In other words, the literal rule of interpretation simply means that we mean what we say and we say what we mean. If we do not follow the literal rule of interpretation, social life will become impossible, and we will not understand each other. If we say that a certain object is a book, then we mean it is a book. If we say it is a book, but we mean it is a horse, table or an elephant, then we will not be able to communicate with each other. Life will become impossible. Hence, the meaning of the literal rule of interpretation is simply that we mean what we say and we say what we mean”.
Therefore if we follow the dictum in India House v. Kishan N. Lalwani (2003 (1) KLT OnLine 1154 (SC) = (2003) 9 SCC 393), the period of limitation statutorily prescribed has to be strictly adhered to and cannot be relaxed or departed from on equitable considerations, then sub-section (3A) of Section 13 is also to be strictly interpreted.
In Topline Shoes Ltd. v. Corporation Bank (2002 (3) KLT OnLine 1015 (SC) = (2002) 6 SCC 33) the Apex Court has rightly observed that the Act does not provide any consequences of non-filing of version within the time stipulated. The Quasi-judicial bodies will observe the principles of natural justice in letter and spirit.
It is pertinent to note that not leaving discretion with the District Commissions for extending the period of limitation for filing version before it by the opposite parties may cause grave injustice and may lead to the early closing of the doors of justice before him. The opposite parties may become scapegoats in the hands of the complainants.
There may be circumstances beyond the control of the Opposite Parties. Compelling and unexpected circumstances may prevent the Opposite Parties from filing their versions in time. A judgment without allowing him to explain the reasons for non-filing of his version would become partial and one-sided. Equity, Law and good conscience are the three pillars of dispensing justice of all quasi-judicial bodies as they are the creatures of statutes.
Let us travel through certain circumstances which may occur beyond the control of the Opposite Parties,
Actus dei nemini facit injuriam is a Latin legal maxim. It has the meaning that an act of God does no injury to anyone. In other words, no one is responsible for inevitable accidents. It is also known as the Act of God. When an event is caused by the effect of nature without interference from humans it is called an act of God. An event foreseen cannot be considered as an act of God. If nature’s act was foreseeable and a person’s negligence led to an accident, the jury considers the extent of negligence before giving the verdict. The law gives the idea that no man is responsible for the act of God. It refers to an injury, that was inevitable, as a result of an act of God, which no law can avoid or policy prevent.
Suppose after appearing before the court on its first call, the party met with an accident or falls ill and he is bed ridden for a long period. He may not be able to attend the court for a period of three or four months without his fault. His medical certificate and his genuine explanations for the delay, as per this judgement, would fall before the deaf ears and blind eyes of justice, because of the eclipse of this decision.
Secondly, suppose the opposite party after getting notice, entrusted his brief to a counsel of his choice. The counsel without knowing the relevant direction or due to any unexpected circumstances beyond his control, such as shifting of office, illness, misplacement of files etc., fails to file a response within the stipulated time. The court will close the doors for his party even if he moots up his position before it. The opposite parties are the ultimate sufferers of these consequences as his counsel has no role in protecting his interests before the court of law.
On going through the Act in its entirety, we can see that the legislative intention is to settle the consumer’s disputes in a simple, costless, speedy and efficacious manner. With the said objective, the legislature also directs to settle the consumer’s disputes within 90 days. The legislature does not intend that a hard and fast rule should be applied for the time limit for acceptance of version and liberal view on the time limit for the settling of disputes is necessary. If the 45 days rule is to be applied in letter and spirit, then 90 days rule for the settling of cases is also to be construed strictly. So acceptance of versions in a hurry burry manner, without observing natural justice and placing it in the court files, for Kumbha Karna sleep is not a good practice.
If a person, aggrieved by an ex parte order approaches the State Commission or the National Commission as the case may be, the State Commission and the National Commission can only pull down its shutters of justice before him because of the eclipse of the Constitution Bench ruling. No adversarial system of justice can succeed unless it provides adequate representation to the aggrieved and the opponent. Proper representation is the heart of fair justice.
Thirdly, most of the complainants and Opposite Parties are daily breadwinners and not hailing from multinational companies. Sometimes the opposite parties are mere labourers of firms and companies working for low wages. In some cases, they are persons appointed on contract basis. There may be a situation where the shops of the Opposite parties may be closed due to unexpected incidents or natural calamities. It is the common practice of entrepreneurs to issue all communications in the name of their employees by giving them a fancy designation. They easily dismiss them from service without even giving notice. Such employees, while struggling for their daily bread, would have the Police after them with a warrant from the Consumer Court. They may rush to the appellate court with an appeal explaining the reason for their non appearance citing genuine reasons and saying that they were the mere employees of that institution once. Even in such cases the courts have no option, by virtue of this ruling, except to throw their defence to the waste bin and to proceed with the case.
The Consumer Protection Act is a beneficial legislation stipulating no specific procedure for redressing the grievances under it. It is simple, inexpensive, cost less, speedy and efficacious. Because of these golden features the complainants and opposite parties are directly approaching and appearing before it without the assistance of a legal professional. They won’t know the rigid procedure contemplated by the Apex Court. Indeed, the ignorance of the law is not an excuse. But prompt appearance without filing the response in time can be taken with a liberal view. In Inderpreet Singh Kahion v. State of Punjab & Ors. (2006 (3) KLT SN 21 (C.No.34 (SC)) our Apex Court held that it is the well-settled principles of law that justice should not only be done but manifestly also seen to be done. In the People’s Union For Civil Liberties v. Union of India it was held that “When there are more aspects of public interest to be considered, the Court will be in a better position to decide whether the weight of public interest predominates.” While considering the public interest no aggrieved person will be pushed out from the line of justice without allowing him to be heard.
Therefore, the need to either reconsider the matter by a larger bench of the Apex Court or revamping the Consumer Protection Act is highly necessary. Expecting that voluntary associations may moot this issue before the Apex Court.
Another suggestion is that the legislature may add a proviso to Section 13(2)(a) of the Act that “provided that the District Commission may entertain a version after the period specified if it is satisfied that he had sufficient cause for not filing the version within such period, provided also that the National Commission, the State Commission or the District Commission, as the case may be, shall record its reasons for condoning such delay.
A justice without heeding the aggrieved is not justice but injustice.
Therefore, it is absolutely necessary to reconsider the judgement dated 04.03.2020 in New India Assurance Co. Ltd v. Hilli Multipurpose Cold Storage Pvt. Ltd. (2020 (3) KLT 59 (SC) = 2020 (2) KLT OnLine 1003 (SC)), as it is too rigid an approach and would breed injustice.
Weeding out Patent Trolls : Issues and Challenges
By Dr. Raju Narayana Swamy, I.A.S.
12/02/2022Weeding out Patent Trolls : Issues and Challenges
(By Dr. Raju Narayana Swamy, IAS)
Patent Troll : The Concept
Patent Troll is a negative term. First coined in the 1990s, the term has no legal definition. It is also called non-practicing entity or nonproducing entity (NPE) or patent holding company or patent shark. The term arose in reference to trolls in Norwegian folk tails who extract tolls from travellers passing over bridges. It is generally attributed to Peter Detkin, former Assistant Counsel of Intel who explained the concept as “companies that buy rather than create patents and then extract disproportionately high license fees by threatening expensive litigation in the alternative.”[1] Some others are of the view that the term originated from an educational video called the Patents Video produced in 1994 by Paula Natasha Chavez, a US IP Law Attorney. Britannica Encyclopaedia defines patent troll as a “pejorative term for a company found most open in the American information technology industry that uses a portfolio of patents not to produce products but solely to collect licensing fees or settlement on patent infringement from other companies.”[2]
Put in simple terms, patent trolls are entities that neither develop new technologies nor use technologies to provide goods or services to the market. They accumulate patents relate to one area, do not produce any products, sue a large a number of defendants together and claim a percent of the total revenue from the product. Even though their patent may cover a small area of technology, the award granted can amount to millions for a successful product. Thus trolls are extortive entities conducting deceptive abuse and possibly unlawful behaviour in connection with patent litigation. The fact that whenever an individual or company gets sued by a troll, the burden of proof for not infringing the patent is on the defendant compounds the problem.
Patent trolls acquire patents mainly for licensing purposes.[3] They neither use the patent for their own production nor for follow-up innovations.[4] Thus trolling is the abuse of exclusive rights where by patent holders themselves do not use their products and further prevent others from creating similar ones.[5] In fact, there are four broad business models followed by trolls:
a) Trolls could be companies which purchase controversial patents from others merely for the purpose of asserting them.
b) A troll could be a company that originally sold products, but has either completely or partially closed its operations.
c) Trolls could be the agents that assert patents on behalf of patent owners.
d) Trolls could be law firms that help clients to exploit their IP for which they take contingency fees[6]
Buying a patent (usually from a bankrupt company at an auction) with the intent of suing a competing company is a usual modus operandi. One analogy for a patent trolls actions would be earning the right to charge tolls on a road without performing any improvement to the roadway. Another analogy is that unlike an innovator who uses the land to raise a crop, a troll merely aims at excluding people there from. Using a patent to collect money from other companies predates the invention of the computer. American Inventor George Selden is frequently cited as an early example of a patent troll. From 1903-1911, Selden, who never built a car, used his patent on the automobiles to collect royalties from other automobile companies. Ray Niro is another well known patent troll. In 18 years of patent litigation, he sued 235 companies and made a fortune of 315 million dollars. Patent trolls are a menace and impede the innovation environment in a country. They use patents as lawful weapons. The usual strategy is to maintain a basket of patents till the technology matures and then start litigation. The patents they register are broad and unclear so that multiple companies can be targeted. Trolls use their patent titles to try to compel individuals, businesses and non profits to pay them fees for use of ordinary items of daily use (like office equipments, printers, Wi-Fi routers) and even go to the extent of threatening mobile phone apps developers. Patents are not that easy to understand, litigation takes time and as companies are left with no other solution, they end up signing a non-disclosure agreement with the troll and by paying them a part of the revenue accordingly.
It needs to be mention here that when universities or non-profit research institutions file claims for protection of unutilized patents, it is not considered an act of trolling. It also needs to be pointed out that a producer need not actually practice the patent to avoid being called a troll. The crucial question is whether it is enforcing its patent in a market in which it participates. As an example, a patentee might manufacture a product that can either use a widget or gadget. The patentee has patents on both, but decides to use only widgets in its products. While the patentee does not practice the gadget patents, it is not a troll.
Policing of patent trolls is remarkably tricky as a game power from the strength of the very patent protection regimes they reside in. The situation is even more complicated as trolls are usually firms consisting of patent professionals and lawyers with pooled experience in patent law and litigation as the trolls threaten litigation, the alleged infringer even if in a position to defend himself may prefer to settle the matter out of court to avoid the time and cost involved in litigation. Usually the license fee demanded by the troll is less than the cost and effort involved in litigation and the alleged infringer gives in to the demands of the troll. This vicious cycle continues as the troll can use this money to buy more patents and in the name of infringement target more companies.[7]
Patent Trolls in the US
The recent case of Labrador Diagnostics LLC v. Biofire Diagnostics LLC etal filed in the US District Court for the District of Delaware against the corona virus tests over the allegation of patent infringement reveals the dark side of IP laws in that country. In this case a patent troll (Labrador Diagnostics LLC) alleged infringement against the companies making and distributing virus tests throughout the country. Appallingly, such actions are rampant where companies like Labrador Diagnostics take advantage of the law and keep the masses from getting access to COVID-19 tests and treatments.
Mention must also be made here of the patent infringement suit filed by NTP
(a patent troll) in a US District Court against Apple, Google, Microsoft, Motorola, HTC and LG alleging that the companies are liable for infringing eight of its patent relating to sending emails over wireless network. Add to these the fact that NTP had earlier won a 612 million dollar damage award against Research in Motion which sells blackberry devices and the hurdles posed to large companies can very well be imagined.
Patent trolling is a growing problem in the US – particularly in the IT industry – mainly because of the judicial system and the laws. First, US is the hub for technological innovation and the Patent Office is flooded with applications. Due to the sheer volume and time constraint, patent examiners grant a patent when there is a doubt. This gives room for trolls to file broad and vague patents. Second, the US legal system states that the respective parties must bear their own cost. This is diametrically opposite the situation in many other jurisdictions, where the losing party covers the cost of litigation of the winning party – wholly or partly. This is less of a deterrent for trolls to take part in excessive litigation. However it needs to be mentioned here that in April 2016 the final ruling in the court case Octane Fitness LLC v. ICON Health & Fitness Inc filed in the US Supreme Court made it easier for the court to impose legal expenses of both parties on the losers in patent claim court cases in the future.
Third, the US traditionally follows a system in which the first person to invent a product was entitled to a patent unlike in many countries where the first person to file a patent is the one who receives it. Thus in the American system, someone who invented a product but neither patented nor manufactured it could bring a suit against a later inventor who was more successful at making and patenting the same product. However with the US moving to a first file system in 2011, the activities of patent trolls as a backdrop of the first file system have been largely contained. Fourth, relative unavailability of compulsory licensing works to the benefit of trolls.
Patent trolls may also take advantage of a judicial reluctance to employ the equitable doctrines of laches and estoppel when considering infringement claims. Also injunctive relief in US is very generous. After eBay v. Merc Exchange, there may be a shift towards a more restrained use of injunctions, but this is not necessarily the case.
Mention needs to be made here that patent trolling in US may also involve venue shopping. A classic example is the report that 45% of the patent cases in 2015 were filed in the Eastern District of Texas. This must be read with a fact that the said district was home to a judge with both patent expertise and a track record of favouring plaintiffs. This practice has been curbed to a certain extent by the US Supreme Court’s final ruling in the 2017 case TC Heartland LLC v. Craft Foods Group Brands LLC.[8] This decision brings a sigh of relief as many cases can now be moved away from plaintiff – friendly districts to much more neutral districts where the defendants stand a chance of having a fairer outcome.
No discussion on patent trolls in the US would be complete without a mention on their decline during the period from 2013-2017 which was largely attributable to post-patent grant review mechanisms. Moreover the Supreme Court’s decision in Alice Corp v. CLS Bank Internal affords the much–needed relief by allowing defendants to challenge overbroad, abstract patents and have suits decided early. But all is not well today. Currently there is an increase in abusive litigation as the review mechanisms are under threat. PTAB for instance is increasingly exercising discretion and refusing to consider meritorious IPR’s. The potential for abuse of this discretion has increased in the wake of the Supreme Court’s decision in United States v. Arthrex Inc. In a fight for ruling, the Court afforded the PTO Director of the USPTO the ability to review and overrule the decisions of the patent judges of the PTAB.
Critics are of the view the trend of increase in patent troll litigation can be reversed only by focusing on the quality and balance in patent law. One way to accomplish this is to make use of the information about the quality of the patent that every prosecution generates – the patent file history. Called the file wrapper, the prosecution history of each patent is a record of all communications and documentation involved in the patent examination process. If that wrapper is filled with examiner’s repeated rejections to certain claims and the inventor repeatedly appeals those rejections, it suggests low quality. Needless to say, a defendant should be allowed to point to such a wrapper early in the case to rebut the patent’s inherent presumption of validity. Better yet, such a wrapper could trigger withdrawal of the presumption of validity which the plaintiff would then have to affirmatively plead.
Patent Trolls and the European Patent System
The European patent system holds both incentives and disincentives for patent trolls. The system is unique in that there is a central patent office for grant of patents which are then valid across all European Patent Convention member states, but disposal of infringement suits is national rather than centralised. Thus if a European patent is infringed anywhere in Germany and the German Courts uphold the infringement, it does not imply that the same patent will be deemed infringed automatically in other member nations too. This is a big disincentive for a troll. It is also worth mentioning that the potential costs of litigating in Europe are lower in quantum vis–a–vis US. This prima facie seems like a potential incentive for trolling, but may also translate in to the fact that infringers would be more willing to take up litigation and fight it out rather than settle out of Court. Even the damages that are awarded in Europe are a lot lower as compared to US. Thus a patent owner is less likely to initiate litigation against an assumed infringer in Europe as he will not get significant damages out of the proceedings even if he won. Also contingency fee is not allowed in Europe. Moreover, stringent laws in EU make it almost impossible for patent trolls to exist. But EU is not free from patent trolls. This is a result of the imbalances in the European patent system which PAE’s are looking to exploit. These imbalances include
a) injunctions automatically awarded upon a finding of infringement
b) low quality patents &
c) lack of transparency in Court proceedings
In fact majority of the infringement cases are filed in Germany and France. Statistics show that in Germany 20% of all law suits are patent infringement law suits. Factually trolling involving European entities may be evinced by way of mentioning the dispute between Infincon, a German chip manufacturer and Rambus, a US memory manufacturer. The end result was a settlement for $ 23.5 million to be paid by Infincon to Rambus for two years.
The Indian Legal System and Patent Trolls
Patent trolling was quite prevalent in India in the information technology and communication sectors prior to the enactment of the amendment in 2005, but it sharply declined after the amendment. Though the Patents Act 1970 does not specifically prohibit patent trolls[9], this problem is curbed through several provisions in the Act. Many argue that US and EU could learn from India and adopt these safeguards which include.
Post-grant opposition
As per Section 25(2), any person interested can file a post-grant opposition within 12 months of the date of publication of the grant of a patent on any of the grounds specified therein by giving a notice of opposition to the Controller. Thus even after the grant of a patent it can be challenged. This post-grant opposition is an inbuilt hindrance to the menace of patent trolls.
IPAB (Intellectual Property Appellate Board)
This specialised board ensures speedy disposal of IP disputes and reduces the cost of litigation. This allows small companies targeted by patent trolls to defend themselves without worrying about the high cost involved therein. Mention must be made here of the judgment IPAB revoking two patents belonging to Bharat Bhogilal Patel in the case of M/s Aditi Manufacturing Co. M/s. Bharat Bhogilal Patel.[10] This patentee can be regarded as a classic patent troll and held two patents – one for a process of manufacturing engraved design articles on metals or non-metals and another for an improved laser marking and engraving machine. The IPAB held as follows: “In the present case, prior arts have the features of the invention and there is nothing new in the features that have been claimed as new.” The highlight of the case is that the patent troll involved did not file any civil suit for infringement, but instance filed complaints with the Customs authorities at various ports of entry requesting them to seize the import consignments on the ground that they infringed their patents.
In a similar case, the IPAB revoked a patent belonging to one Ramkumar in the case of Spice and Samsung v. Somasundar Ramkumar.[11] The patent related to mobile phones with a plurality of SIM cards allocated to different communication networks and revocation was sought u/S. 64(1) of the Patents Act 1970. The IPAB held that not only the invention was anticipated by prior art, but also that the amendments carried out during the prosecution of the application in specification, drawings and claims extended the scope of the disclosed matter which is particularly prohibited by Section 59. The applicants were also able to establish through various prior art references the obviousness in the Respondent’s patent. It is worth mentioning here that Ramkumar can be considered as a classic patent troll.
Section 13(4) of the Patents Act
This provision expressly states that the validity of a patent is not guaranteed by its grant.[12] As there is no presumptions as to the validity of a patent, the burden of proving it in a patent infringement suit vests in the patentee. This is likely to discourage trolls.
Compulsory License
The essence of this provision is that in case of non-working of a patent, the public is deprived of its use and benefits. A period of three years from granting of patent is given beyond which an application can be made for grant of compulsory license. This mechanism reprimands trolls that fail to exploit their patents or put them to work. But criticisms are galore that this provision gives patent trolls a time frame of three years to purchase a patent and harass companies with law suits.
India’s requirements for domestic working of a patent are highlighted in Section 83. In fact, the practice of abuse of patent rights through trolls is discussed u/S.83(b). India is also of the view that the reasonable requirements of the public are to be taken into consideration and are deemed unsatisfied (Section 84(1)(a)) if the patented invention is not being worked in the territory of India or is not being worked to the fullest extent that is reasonably practicable (Section 84(7)(d)). The controller also has the power u/S.146 to give a written notice to the patentee or licensee requiring them to furnish necessary information regarding the extent to which the patented invention has been commercially worked in India. In case of non-compliance of this requirement, the Act provides for the imposition of a fine upto INR 10 lakhs on the holder (Section 122(b)). In order to check the working of patents, the Act requires a patent holder to file an annual statement regarding the working thereof. Patent holders who fail to file such a statement may be liable for a fine and /or imprisonment.
No patent protection to software
The implementation of the Patent Amendment Act, 2005 excludes a huge area for trolling by not providing patent protection to software (including embedded software) which is a common subject matter prone to trolling activity.
Section 115 of Patents Act
This Section allows appointment of scientific advisors with deep technological knowledge for speedy trials. It also helps the Courts to identify dubious patents and to revoke them.
Section 3(d) of Patents Act
Section 3(d) makes it very difficult for patent trolls to get dubious patents there by resorting to evergreening.[13]
Add to these the facts that Indian Courts are not generally patent friendly (and hence do not grant injunctions easily) and that after succeeding in a case the damages granted are often insufficient and the picture is complete to the extent that the business model of patent trolling is difficult to sustain in the Indian legal landscape. A lacuna in the Indian legal system often pointed out by critics needs special mention here – namely the absence of an open post grant review. If such a review is judiciously implemented at the time of renewal of a patent or at any time that a patent is sold, it can go a long way in improving the system so as to make sure that the public is not hoarded for exploitation by patent trolls. Moreover to control the chaos caused by trolling, the quality of patent examination should be enhanced to avoid unnecessary patent authorisations. Steps such as implementing patent concentration strategy and perfecting the patent trading market can also go a long way. Another recommended measure is the introduction of the provision for joint/class litigation in the Patents Act similar to Section 245 of the Companies Act 2013 so that the entities targeted by trolls can collectively file a suit there by reducing the per head cost. Government can also think of creating a public fund where by parties who can substantially prove that they are victims of trolling can be given funds to file a suit at the proper forum. Sources of income in that fund may by no means be limited to Government grants, but can also include penalty imposed on trolls. Needless to stay, patent trolls can also be curbed by not entering in to agreements for licensing or purchasing patents with unverified parties.
Patent Trolls and Defensive Patenting
The rise of patent trolls has lead to a practice called defensive patenting wherein companies amass portfolios of patents to protect themselves against law suits. A classic example is the announcement of Google in the year 2011 to buy the cell phone company Motorola Mobility. As a key factor in the acquisition, Google specifically cited its wish to use Motorola’s thousands of patents to protect its own mobile operating system Android from possible legal action.
Conclusion
Patent trolls target companies of various types including manufactures, distributors or retailers in certain industries. But it is a small company devoid of deep pockets that are primarily targeted. For instance one California company by name Pangea Intellectual Properties claimed that its patents were infringed by websites that possess financial information that customers enter online. In fact patent trolls very often pick up low quality patents and take advantage of asymmetries in the economics of litigation to make quick cash. An oft quoted case is that of Bitmovin which has mean on the receiving end of several of these dubious suits which are a very real threat to innovators and other start-ups. Sometimes they remain stagnant and wait for some other company to develop the same technology before proceeding to sue them for infringement.
It must be mention here that NPEs reject the term patent troll and claim that they are actually protecting the system by ensuring that patent holders receive the monitory rewards that are due to them. They defend themselves on the grounds that they actually promote invention by adding liquidity, absorbing some of the risk otherwise borne by inventors and getting more royalties for small inventors.[14] But the reality is otherwise. For instance, American economists are of the opinion that investors lost approximately $500 billion to patent trolls from 1990 to 2010 based on the decrease in value of company’s stock after they have been sued by NPEs. Microsoft says that it typically faces about 60 pending PAE infringement claims costing it tens of millions of dollars every year to defend. Google, Blackberry, Earthlink and Red Hat detail that there litigation defends costs have gone up by 400% as patents trolls are filing four times as many law suits in 2018 as compared to 2005. Through these abusive practices they costs uncertainty for businesses, add redundant costs, scare investors and even force businesses to shut down. It needs to be mention here that the concept of troll is by no means confined to patents, but extends to copyrights as well. Such a company’s business model would typically consists of filing suits against bloggers, artists, freelance journalists and other small-fry individual users for alleged unauthorised reproduction of works. A classic example is Righthaven LLC, a copyright holding company founded in 2010. Its modus operandi consists of entering in to agreements with various publishers (often localised periodicals) and subsequently filing suits for copyright infringement against website owners for unauthorised reproduction of the periodical’s photographs and other contents. Righthaven then proceeds to demand $ 75000 from each alleged infringer in lieu of court action. This coupled with Righthaven’s propensity to swiftly settle cases and high expenses in defending such actions leads to a highly profitable business model – with Righthaven footing no more than the cost of the paper on which the initial demand was made.
But the reality is that such business models are not only inherently exploit it and abusive of the legal process but also question the very theoretical justifications that are usually put forth to support the treatment of IP as traditional tangible property. These entities function in a manner seemingly independent of the three dominant strains of property theory- the Labour, Utilitarian and Personality justifications. Righthaven being a non-innovative entity does not labour to create the good that is sort to be protected (viz) the creative works. Moreover its conduct violates Locke’s Proviso in that there is net harm being caused to innovation in general and to society – through curtailments to free speech and expression caused by the threat of litigation. In fact, a copyright aggregator like Righthaven infringes on the fair use doctrine and leads to a chilling effect. The result is a negative impact on social welfare and completing the circle.
It is heartening to note that the US courts have recently started to recognise that these entities have no legal basis for continued functioning. This lack of basis extends to jurisprudential and historical realms also. In Righthaven v. Democratic Underground case, for instance (US District of Nevada Court) it was found that Righthaven has no standing to sue for copyright infringement. A similar ruling of a federal judge in Colorado has put an end to all 57 proceedings that Righthaven has initiated in that State. In fact, Righthaven is now virtually defunct. The company is now insolvent having failed to pay legal costs owed to the defendants in Righthaven v. Thomas Die Blase and Righthaven v. Wayne Hoehn. Its domain name was auctioned by the receiver to satisfy the company’s debtors. The company has been criticised for bullying internet users in to unnecessary settlements and has been fined for making material misrepresentations to federal courts. Needless to say, it can be characterised as a capitalism - induced manifestation of corporate greed. And that explains the twin reasons why trolls should not be accorded protection by law – first being the violation of the social contract and the second being skewing public-private interest balance unjustly. The need of the hour is to weed out the concept of trolls by redefining IP rights and obligations. This course for reformation in both the legislative and judicial branches.
References
1.David B.Y. et al “The new patent intermediaries: platforms, defensive aggregators and super-aggregators” Journal of Economic Perspectives, 27(2013).
2. Peter N.D, “ Levelling the Patent Playing Field” Review of Intellectual Property Law, 6(4),2007.
3. Nicholas Varchaver “ Who’s afraid of Nathan Mybrvold?” Fortune Magazine, July 10,2006.
4. Axel H et al, “Patent trolls, litigation and the market for innovation”, SSR Electronic Journal, 2014.
5. “Are the Patent Trolls here to get us?” https:/ /hoiberg.com/omhoeiberg /artikler/are-the- patent-trolls –here-to-get-us
6. Mueller J., “The Tiger Awakens: The Tumultuous Transformation of India’s Patent System & the Rise of Indian Pharmaceutical Innovation” University of Pittsburgh Law Review 68(2007).
7. Barker D., “ Troll or No Troll? Policing Patent Usage with an Open Post-Grant Review” Duke Law & Technology Review 9,11(2005).
(End Notes)
1. Jennifer Gregory, The Troll Next Door, 6 J.Marshal Rev Intell.Prop.L (2007).
2. Eric Gregorson, Patent Trolls, Encyclopaedia Britannica.
3. John M Golden, Patent Trolls and Patent Remedies, 85 Tex L Rev 2111-2162(2007)
4. Axel H etal, Patent Trolls, Litigation and the Market for Innovation, SSRN Electronic Journal (2014).
5. Rantanen J, ‘Slaying the Troll: Litigation as an Effective Strategy against Patent Threats’ 23 Santa Clara Computer Hardware & Technology Law Journal 43 (2006).
6. Beyers, J.,Perspective-Rise of the Patent Trolls http://news.com/rise+of+the+patent+trolls/2010-1071.
7. Rajkumar V, The Effect of Patent Trolls on Innovations: a Multi-Jurisdictional Analysis, 1 Indian Journal of Intellectual Property Law (2008).
8. 581 US 2017.
9. Indian Patent Act does not even mention the term patent trolls
10. MP Nos. 41&42 of 2012 in TRA/05 of 2008/PT/MUM & TRA/06 of 2008/PT/MUM.
11. ORA/17 of 2009/PT/CH & ORA/31 of 2009/PT/CH.
12. This section reads as follows:- The examination and investigations required under Section 12 and this section shall not be deemed in any way to warrant the validity of any patent, and no liability shall be incurred by the Central Government or any officer thereof by reason of, or in connection with, any such examination or investigation or any report or other proceedings consequent thereon.
13. Section 3(d) says that the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant, is not patentable.
14. Nathan M: The big idea: Funding Eureka ! Harvard Business Review 88(3), 2010.
By Saiju S., A.P.P., Ernakulam
12/02/2022In Pursuit of the Greener Grass:-
Parliamentary Defections and the Tenth Schedule
(By Saiju S., Asst. Public Prosecutor, Ernakulam)
Survey any literature or court pronouncements on parliamentary defections in India, to discern that the term defection is oft-preceded by an adjective. The ‘evil’ of defection. It is indeed political infidelity. Does the law, the Tenth Schedule a.k.a. anti-defection law have the claw and teeth to take on the evil effectively and with sufficient deterrence?
In a multi-party democracy like ours, the sizeable chunk of the electorate exercises franchise in favour of the political party contesting, often oblivious to the aura or charisma of the candidates, be it the Modi, the Gandhi scion, the Kejriwal or any political heavyweight for that matter. (Not to say that the attributes of candidates are not factors at all. They have been reckoning factors, very important and on very many occasions decisive too). The political parties gaining public acceptance produce MP’s, MLA’s and MLC’s.
The ungrateful bunch of people’s representatives, after their entering the legislative chambers upon winning from a party ticket unconscientiously shift their allegiance to what they find as a more lucrative political zone. To insulate themselves against the possible disqualification which the anti-defection law provides, they take the dubious ‘merger’ route, a merger which the original political party never gives a thought about. The political party which set them up as candidates continues its predominance in the politics of the country or the State concerned, regardless of the merger. The avaricious two-third legislators masterminding the merger of the sponsor party continue as legislators, rallying behind the new party and save their membership in the house, despite their deed constituting defection of the first degree, de facto but not de jure. And it has the name democracy.
The law stood in awe of it. Our courts nonchalantly acquiesced to such mergers. And result? The sponsoring political party is ditched. The numerical equations in legislatures are redrawn overnight against the will of the electorate. The government of the day fails in the game of numbers and is thrown out. Crossovers, horse trading and resort politics become the new norms. The “Aaya Ram Gaya Ram” is back in vogue. And the world’s largest democracy is hyperventilating.
In this backdrop, the following issues become germane for judicial consideration.
1. Is it for the two-third majority of a certain legislature party to decide as to merger of that party? What is a merger in terms of the Tenth Schedule?
2. How can a merger declared by not less than two-third of the Legislature Party but not effected by the Original Political Party/Sponsor Party beyond the house of legislature insulate the legislators constituting the said two-third from the consequences of Tenth Schedule to the Constitution of India?
3. The words “have agreed to such merger’ in paragraph 4(2) of the Tenth Schedule to the Constitution - what do they mean? Does it allow a merger to be engineered by two-third of the legislature party?
For the above concerns and furthermore, the anti-defection needs to be revisited or atleast interpreted, keeping in mind the elementary principle that Tenth Schedule was introduced to contain defections and not as a facilitator to defections.
Future Prospects, Grammarly and Redundancy
By Jacob Abraham, Advocate, HC
15/01/2022Future Prospects, Grammarly and Redundancy
(By Jacob Abraham, Advocate, High Court of Kerala)
Future prospects is a head under which compensation is awarded, Grammarly is the name of the software and the word redundancy means ‘the state of being not or no longer needed or useful’. At the first glance, one may think that they are unconnected words. When putting them in the right context, the strangeness of the caption of the article disappears.
English judgements still influence us, especially in the field of the law of torts. Dissimilarities in both the countries on several aspects were unfortunately ignored. One such aspect is the rate of inflation in both countries. Here it is very high and there it is negligible. This has resulted in compensation awarded in fatal and personal injury cases sometimes render illusory or rendering the amount of compensation awarded inadequate after a couple of years. To remedy this situation the honourable Apex Court invented a new head called “future prospects” and started adding compensation under this head. Earlier also compensation was awarded under the head with the same name but the situation covered was likely loss of promotions in the job in future, inability to pursue higher education, etc.
Now, the head, future prospects is widely accepted as an aspect to be taken into consideration while assessing the compensation. This expression is widely used and a search in any of the legal software will throw up several thousands of judgements of the apex court or of various high courts, wherein this expression is used.
It was in this background, in a memorandum of an appeal I included this ground. Thereafter I sent the draft of it to the server of Grammarly. Grammarly is owned by the Microsoft Corporation. It has two versions. Free and paid, and the paid version is prohibitively priced. For obvious reasons, the version I use is the free one. This software will point out various grammatical and or spelling errors, extra space or lack of space between the words, redundant expressions, etc., and also makes better suggestions. When it reached the expression ‘future prospects’ the software pointed out that there is redundancy in this expression. It was a big surprise. Redundancy in an expression freely used by the highly educated class of India! First I thought that the software is under a mistake. There are such instances also. When the word ‘state’ is typed in the attestation portion, this software would suggest writing the article ‘the’ before the word state. So I thought that the redundancy, in this case, belonged to that category.
Anyway, I decided to go deeper into it. The result was quick and more surprising. The word prospects itself means the possibility or likely hood of some future event occurring. So the word future is not needed or useful before the word prospects.
Tailpiece
To put it light-heartedly, I feel that, though Grammarly is correct, there is no “future prospect” of use of this expression being avoided by the courts or lawyers. It is likely to remain in the vocabulary of the courts, along with the names of different kinds of consorts. Until recently there was only one type of consort though the number may be more in certain cases. Anyway, a welcoming feature is that these heads enhance the amount of compensation that is awarded.
Bar Service for Pension and 2021(6) KLT 746 (SC)
By P.R. Vijayakumar, Thrissur
15/01/2022Bar Service for Pension and 2021(6) KLT 746 (SC)
(By P. R.Vijayakumar, Advocate, Thrissur)
Hon’ble Supreme Court as per the decision Sadasivan Nair v. Cochin University of Science and Technology (2021(6) KLT 746 (SC) set aside the judgment of the Division Bench of Kerala High Court as well as that of the learned Single Judge of the High Court dated 29th August 2019 (2019 (3) KLT OnLine 3095 - Sadasivan Nair v. Cochin University of Science and Technology) and 3rd April, 2006 respectively and allowed the appeal.
By the judgment the Apex Court found no valid ground to sustain the application of the proviso in relation to the appellant, Dr.Sadasivan Nair, a retired faculty of law of Cusat thereby denying the benefit of Rule 25(a) of Part III,Kerala Service Rules, when the same was not applied in the case of Dr.P.Leela Krishnan (also a facaulty of law of Cusat retired earlier), thereby allowing the benefit of Rule 25(a) by the university to him. Rule 25(a) by an amendment is as follows:
“25(a).Persons recruited from the Bar after the age of 25 years to appointments in Government service may add to their service qualifying for superannuation pension (but not for any other kind of pension) the actual period (not exceeding ten years) by which their age at the time of recruitment exceeded 25 years provided that no employee can claim the benefit of this rule unless his actual qualifying service at the time he becomes eligible for superannuation pension is not less than eight years. This concession is also subject to the condition that the period that may be so added shall not at any time exceed the actual period of the employees practice at the Bar. No application will be entertained for pension on the ground that the appointee did not get an opportunity for service for the qualifying period:
Provided that the benefit under this sub-rule shall be available only to employees who are recruited when practicing at the Bar to posts requiring law qualification and experience at the Bar”.
In the Civil Appeal before the Apex Court the CUSAT (the respondent) putforth the argument that Dr.Sadasivan Nair (the appellant) cannot claim his bar service as qualifying service for pension relying on an earlier illegal order of the CUSAT. Such a claim based on negative equality in favour of the appellant is untenable, it is further contented. The earlier illegal order of the respondent university is nothing but consideration of Bar service of an earlier faculty of law (Dr.Leela Krishnan) and when retired allowed pension to Dr.Leela Krishnan treating his earlier Bar service as qualifying service for pension. But the KSR (Part III) Rule 25(a) stands, as quoted above since 12.02.1985. Dr.Leela Krishnan retired on 30.04.1996.
By earlier judgments the Apex Court reiterated that the pension payable to an employee on retirement shall be determined on the rules existing at the time of retirement. ln this juncture it has to be specified thus that the law laid down by the Apex Court in Chandigarh Administration and Anr. v. Jagjit Singh & Anr. (1995 (1) KLT OnLine 904 (SC) = AIR 1995 SC 705) is to the effect that a mistake is always a mistake, which cannot be perpetuated by giving a positive direction, and an illegal order cannot be repeated again and again by exercising the discretionary power of the Court. (emphasis supplied)
Thus the University specifically repeated and admitted that the reckoning of bar service of Dr.Leela Krishnan as qualifying service for pension is an illegal order and therefore that illegal order and such other orders of the university cannot be relied or based to reckon the appellant’s bar service as qualifying service for pension under K.S.R. In this juncture it is pertinent to note that the Hon’ble High Court of Kerala has a reasoned occasion to consider this issue in O.P. (KAT) No.294 of 2017 (Vijayakumar v. State of Kerala, relied the decision of Chandigarh Administration & Anr. v. Jagjit Singh & Anr. (1995 (1) KLT OnLine 904 (SC) = AIR 1995 SC 705) and dismissed the OP by not admitting the claim of the petitioner to reckon his bar service as qualifying service for pension. The petitioner was a Deputy Commissioner retired from Commercial Taxes Department, Govt. of Kerala.
The Hon’ble Apex Court in Sadasivan Nair’s case judges: “While we accept the settled position of law that the rule applicable in matters of determination of pension is that which exists at the time of retirement, we are unable to find any legal basis in the action of the respondent University of selectively allowing the benefit of Rule 25(a). The law, as recognized by this Court in Deoki Nandan Prasad and Syed Yousuddin Ahmed (supra) unequivocally states that the pension payable to an employee on retirement shall be determined on the rules existing at the time of retirement. However, the law does not allow the employer to apply the rules differently in relation to persons who are similarly situated”.
Thus the view of the Apex Court byDr.Sadasivan Nair’s judgment that if the respondent University sought to deny the benefit of Rule 25(a), in light of the proviso which was subsequently inserted thereby limiting the benefit of the Rule, it ought to have done so uniformly. The proviso is in force from 12 February, 1985. However, the action of the respondent University of selectively applying the proviso to Rule 25(a) in relation to the appellant, while not applying the said proviso in relation to similarly situated persons, is arbitrary and therefore illegal, the Apex Court now held. Such discrimination, which is not based on any reasonable classification, is violative of all canons of equality which are enshrined in the Constitution of lndia, the Hon’ble Apex Court as perDr.Sadasivan Nair’s judgment held.Hence, in the instant case (of Dr.Sadasivan Nair), the denial of the benefit under Rule 25(a), KSR, to the appellant is arbitrary and not in accordance with law. The Hon’ble Court further held that consequently, the appellant is entitled to receive pension having regard to his total qualifying service, inclusive of the period of his service at CUSAT and the period of his practice as an Advocate in various Courts of Kerala.
Thus there emerges a conflict as whether an order of Government Authority or University in Kerala governed by KSR be liable to follow thereon the earlier order reckoning bar service as qualifying service for pension since 12.02.1985 while this authority itself recognizes as their earlier order reckoning bar service as qualifying service for pension is an illegal order(ie., against the provision under K.S.R.).AIso, whether an admitted illegal order of Government, authority or University in Kerala governed by K.S.R. is liable to be repeated based on the pronouncement that the law does not allow the employer to apply the rules differently in relation to persons who are similarly situated.
The Apex Court is seen relied their earlier judgments of Deoki Nandan Prasad v. State of Bihar (1971 KLT OnLine 1025 (SC) = AIR 1971 SC 1409) and Government of Andhra Pradesh & Ors.v. Syed Yousuddin Ahmed (1997 (2) KLT OnLine 1122 (SC) = (1997) 7 SCC 241) by which it is held that the emoluments forming a part of the pension payable to an employee shall be determined on the basis of the rule existing on the date of retirement. Dr.Leela Krishnan retired on 30.04.1996 and Dr.Sadasivan Nair retired on 30.04.2007.The proviso under Rule 25(a) is with effect from 12.02.1985.Thus both of them retired after 12.02.1985.
May be the University (CUSAT), the Apex Court found in the instant case of Dr.Sadasivan Nair, no argument has been advanced on behalf of the respondents as to the manner in which the case of the appellant is different from that of Dr.P.Leela Krishnan and on what basis the benefit of Rule 25(a) was granted to Dr.P.Leela Krishnan but was withheld in relation to the appellant. From the judgment of Dr. Sadasivan Nair’s case it is clear that the main reasoning of the Apex Court led to decide in favour of the appellant is nothing but “the law does not allow the employer to apply the rules differently in relation to persons who are similarly situated”. That is the university as specified by the Apex Court in this judgment that “However, the action of the respondent University of selectively applying the provision to Rule 25(a) in relation to the appellant, while not applying the said proviso in relation to similarly situated persons, is arbitrary and therefore illegal”.
Thus the questions remain as whether 1995 (1) KLT OnLine 904 (SC) = AIR 1995 SC 705 (i.e., Chandigarh Administration’s case), or 2021 (6) KLT 746 (SC) i.e.,Sadasivan Nair’s case, is a reliable one while considering the Bar service as qualifying service for pension under Rule 25(a),Part III of K.S.R. in future is a moot question. Both the judgments are of the Benches with 2 Hon’ble Judges. And whether correction of mistaken application of service rules in future by a department or university (as done by CUSAT, the respondent) while allowing pension in Kerala be amounts to discrimination and violative of all cannons of equality enshrined in Constitution of India?
A kind clarification is needed.