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Delhi High Court Dismissed the petition seeking injunction against the encashment of the subject bank guarantee

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Title: SAURABH METALS PVT. LTD vs UOI & Ors.

Date of Decision: 12.07.2023

+ W.P.(C) 8456/2023 & CM APPLs. 32233-32234/2023

CORAM: HON’BLE MR. JUSTICE PRATEEK JALAN

Introduction

Delhi High court Dismissed the writ petition seeking injunction against the encashment of the bank guarantee as It is well settled that an injunction against invocation of an unconditional bank guarantee can be granted only in egregious cases of fraud or special equities, giving rise to irretrievable injury.

Facts of the case

The petitioner is a small business that has been authorised under the Micro, Small and Medium Enterprises [“MSME”] Development Act of 2006 to operate. It took part in the aforementioned tender and received a letter of acceptance dated 17.11.2021 from the Ministry of Railways, Government of India, announcing that it had won the tender. The letter of acceptance stated that the delivery term would be “D+30 weeks,” where “D” stands for the date of the Development Order. Undisputedly, the Development Order in this instance was issued on December 29, 2021, and the 30-week term that followed would end on July 26, 2022.

In the writ case, the petitioner claims that it was due to the expenditure necessary to manufacture the axles in accordance with the conditions of the aforementioned contract, technical requirements in the bid. The petitioner stated that it had not previously provided axles and that it had previously been in the forging industry. The size of the investment necessary to manufacture axles, particularly in relation to the necessary heat treatment facility, was unknown to the petitioner, and such information was not also included in the bidding document. She claims that the petitioner was unable to devote the necessary amount of resources. In reality, the petitioner visited the Indian Railways wheel and axle facility in Bangalore in June 2022 and was shocked by its size and the machinery needed for the production process. This led to a request that the Development Order be revoked by the Ministry of Railways.

The present writ suit was brought in an effort to overturn a letter given by the Ministry of Railways, Government of India, on June 8, 2023, in which that agency announced its intention to forfeit and encash a performance bank guarantee for the amount of $25.20 lakhs that had been provided on November 30, 2021. The petitioner filed the performance bank guarantee in support of a bid for the delivery of 1000 Box N/BG Axles in accordance with the requirements listed in the tender papers.

Analysis of the case

High court held that  At this time, there is no way to prevent the performance bank guarantee from being invoked. The petition includes a copy of the bank guarantee dated 30.11.2021. It is unconditional, and the petitioner’s banker has agreed to pay the respondent’s claimed sum upon demand regardless of any disagreements the petitioner may have. It is generally established that only extreme instances of fraud or unusual circumstances that result in irreparable harm are eligible for an injunction against the use of an unconditional bank guarantee. For illustration, the Supreme Court’s ruling in Standard Chartered Bank vs. Heavy Engineering Corporation Ltd. may be cited.

Regarding performance security, clause 2(iv) of the Scheme stipulates that the initial delivery term or completion period must fall within the range of 19.02.2020 and 31.03.2022. Admittedly, the current situation does not fit under these restrictions. Therefore, in my opinion, the Government of India’s argument in its message of May 22, 2023, cannot be criticised.

The High Court first believed that the petitioner’s reliance on paragraph 2(v) of the scheme was unwarranted. The aforementioned provision is applicable in situations where bid security is forfeited, such as when earnest money is deducted or a tender is disqualified. In this instance, the bank guarantee in question was filed in accordance with Clause 13 of the “Instructions to Tenderers” and was intended to assure contract execution. The Instructions to Tenderers’ Clause 11 makes it clear that no earnest money deposit was necessary. As a result, the matter is covered by paragraph 2(iv) of the Scheme, which deals with “performance security,” rather than paragraph 2(v).

In the absence of the petitioner being able to benefit from the Scheme, the court does not find any evidence of fraud or unusual circumstances that would support a restraining order against the use of the bank guarantee. According to the petitioner, it was not aware of the infrastructure needed to fulfil its contractual duties. According to the writ petition, the petitioner only made a tender for the supply of 1000 axles since a quote for less than 50% of the amount provided was deemed unresponsive.

At least for now, the court was unwilling to believe that a contracting party, even an MSME, can be released from its contractual responsibilities on this basis. Before taking part in a tender, a party must ascertain for itself that it is capable of carrying out a contract. In fact, the respondent has called my attention to a communication from the petitioner dated 03.07.2021, in which the petitioner declares that it has reviewed the pertinent specifications, is aware of the kinds of stores needed, and agrees to provide the stores in accordance with the specifications.

Given this situation, the court does not believe there is sufficient justification to enjoin the encashment of the subject bank guarantee in the current proceedings under Article 226 of the Constitution. As a result, the petition is denied, and the interim order from June 13, 2023 is revoked. All open applications have been closed.

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Delhi High Court Dismissed the writ petition and upheld the verdict of the Central Administrative Tribunal, Principal Bench, New Delhi

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Title: Hansraj vs Commissioner of police & Anr.

Judgment delivered on: July 12, 2023

 + W.P.(C) 6490/2021

CORAM: HON’BLE MR. JUSTICE V. KAMESWAR RAO

    HON’BLE MR. JUSTICE ANOOP KUMAR MENDIRATTA

Introduction

Delhi High Court dismissed the writ petition filed against the order of the Central Administrative Tribunal, Principal Bench, New Delhi (‘Tribunal’, for short) in Original Application No.4666/2014 (‘OA’, for short) whereby the Tribunal has dismissed the OA filed by three persons including the petitioner herein.

Facts of the case

The ruling dated March 10, 2014, which allowed the petitioner(s) to argue that their training period should be counted when they were promoted to Head Constable (Assistant Wireless Operator) (‘HC (AWO)’, was challenged in the OA by the petitioner(s) therein was rejected for the purpose of increment(s).

The petitioner Hansraj (who filed this case) was first hired as a constable on August 7, 1991, and on August 7, 2000, he was elevated (absorbed) to the position of HC (AWO) in the Delhi Police’s Communication Unit. The appointment of Radio (Wireless) and MT Staff is governed by Rule 17 of the Delhi Police (Appointment and Recruitment) Rules, 1980 (the “Rules of 1980,” for short), and the appointment of AWOs and Teleprinter Operators (HC) is governed by Rule 17-B(IV). The appointment of Assistant Wireless Operator Grade-III (HC) and Teleprinter Operator Grade-III (HC) in the Delhi Police is covered by Standing Order No. 223/86, which is in line with Rule 17-B(IV) of the modified Rules, 1986, read in conjunction with Rule 13(ii) of the Rules of 1980. Following completion of the VHR R.T. Course Grade-III and six months of radio operator experience, confirmed (Matriculate) Constables were to be given the opportunity to be promoted to the coveted position.

According to the office order, a preliminary selection test was held, and those who received 33% or higher on each paper were chosen to enrol in the AWOs / Teleprinter Operator (HC) programme for a total of nine months, including three months of practical training, in batches. The constables are expected to take a test administered by the Trade Test Board, designated by the Commissioner of Delhi Police, after completing the AWO/TPO Grade-III Course, and they must receive the appropriate score in accordance with Standing Order No. 223/86.

According to Rules from 1980, the names of the constables chosen by the DPC are listed on List B (Technical) in the order of their seniority in the rank of Constable in their respective categories A promotion order is then issued in accordance with Rule 7 of the Rules of 1980.

Analysis of the court

The order dated March 10, 2014, which was based on the petitioner/applicants’ representations on October 8, 2013 and November 27, 2013, was challenged before the Tribunal. In their representations, they requested that the training period for promotion to the post of HC (AWO) be counted for the purpose of increment(s) in the scale of the concerned post.

AWO/Teleprinter Operator (HC) Course for a period of nine months, including three months of practical training in batches according to the merit list, followed by AWO/Teleprinter Operator (HC) Course for a period of nine months, including three months of practical training in batches according to the merit list, which is also followed by a test conducted by the Trade Test Board, may be stated here. According to the respondents’ position, which was noted above, it is clear that the final promotion order to the post

Accordingly, promotion orders are issued and the chosen constables are added to List B (Technical) in the order of their seniority. Direct recruiting does not follow the aforementioned process. There is unquestionably no reason to calculate the training time for the purpose of awarding increment(s), much less on the post of Head Constable, when the constable is still in the training phase and has not been officially or by an order promoted to that position. Only after receiving an order of promotion as HC (AWO) would a constable begin serving in the position of head constable. The petitioner’s claim that the training duration is not taken into account for the purpose of increment(s) in the grade of Constable

In other words, the petitioner was working as a constable during the training period rather than a Head Constable; as a result, the time would only be relevant for the purpose of awarding an increase on the position of Constable and not Head Constable. We previously discussed the respondents’ position on why a directly hired HC (AWO) / Teleprinter Operator is entitled to the scale of Head Constable; specifically, that the straight recruit Head Constable must complete training after being hired as HC (AWO) / Teleprinter Operator.

The Madras High Court’s ruling in Nuclear Power Corporation & Anr. (supra), in which OMs dated October 22, 1990 and March 31, 1992 were mentioned, is not applicable to the facts of this case, especially in light of the position under the Rules of 1980. In the aforementioned instance, the Department of Atomic Energy; Madras Atomic Power Project, an enterprise of the Government of India, issued an invitation for applications to the post of Stipendiary Trainees under several employment categories. A number of applicants were chosen and hired as stipendiary trainees with combined monthly compensation. The trainees were assimilated and assigned to the regular positions of Tradesman-B, bearing the normal time scale of pay, and Apprentice after successfully completing the training term.  In accordance with how well they performed during the training time, they were also granted one or two increments. According to the DoP&T’s OM dated October 22, 1990, a person who is chosen for a regular appointment and who must complete training before officially taking over the post may be treated as working for the purpose of receiving raises during the training period, whether they are receiving pay or a stipend. The benefit in question was given starting on October 1, 1990. A second OM, issued March 31, 1992, extended the same benefit to government employees who had received the training on or after January 1, 1986, with real benefits beginning on October 1, 1990. This OM was the one that came after the first.

Here, it is not the case. As a matter of fact, the aforementioned OMs apply to the position of HC (AWO)/Teleprinter Operator when the appointment is made through direct recruiting, but not to the position of HC (AWO) when the appointment is made through promotion.

 Therefore, we believe that the Tribunal’s decision to dismiss the OA cannot be criticised. We find no justification for interfering with the Tribunal’s contested order. The writ petition is rejected because it lacks any merit.

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Delhi High court Dismissed the appeal against the order of the Income Tax Appellate Tribunal

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Title: THE COMMISSIONER OF INCOME TAX – INTERNATIONAL TAXATION -3 vs SPRINGER NATURE CUSTOMER SERVICES CENTRE GMBH (EARLIER KNOWN AS SPRINGER CUSTOMERS CENTRE GMBH)

Judgment Reserved on: 25.05.2023  

Judgment Pronounced on: 12.07.2023

+ ITA 306/2023

CORAM: HON’BLE MR JUSTICE RAJIV SHAKDHER

   HON’BLE MR JUSTICE GIRISH KATHPALIA

Introduction

Delhi High court Dismissed the appeal against the order of the Income Tax Appellate Tribunal concerning Assessment Year (AY) 2013-14. Via the impugned order, the Tribunal has partly allowed the appeal preferred by the respondent/assessee.

Facts of the case

On March 31, 2015, the respondent/assessee submitted its return of income (ROI) for the pertinent AY, which was 2013–2014. The respondent/assessee originally processed its declaration of “nil” income under Section 143(1) of the Income Tax Act of 1961 through the aforementioned ROI. However, the ROI was chosen for examination, and as a result, the respondent/assessee was served with a notice dated 20.08.2015 issued under Section 143(2) of the Act. Three increases to the respondent’s income were made by the Assessing Officer (AO) through order dated 04.05.2016, which was issued in accordance with Section 143(3) read with Section 144C(3)(a) of the Act.

The first addition dealt with a sum equal to Rs. 24,84,114 being paid to the respondent/assessee by Springer India Pvt. Ltd. (also known as “SIPL”) in India in accordance with a Commissionaire Agreement. This addition was made up of two parts. The second increase, which the AO made, was for Rs. 16,67,83,110. This sum reflected the subscription costs the respondent/assessee had paid to two Indian companies, Informatics Publishing Private Ltd. and ZS Associates, for e-journals. The third increment amounts to Rs. 2,62,85,504 in total. On behalf of SIPL, the respondent/assessee collected this sum from Indian-based third parties whose consumers were purchasing online journals and/or books. The aforementioned sum is listed as “gross proceeds from sale by AE (Associate Enterprise) of Indian journal in printed form” in SIPL’s Form 3CEB report.

The AO saw the aforementioned three additions as royalties, and to that end, it made use of Section 9(1)(vi) of the Act and Article 12 of the Double Taxation Avoidance Agreement between Germany and India (often known as the “DTAA”). The respondent/assessee opted to file an appeal with the Commissioner of Income Tax (Appeals) (abbreviated “CIT(A)”) because it was unhappy with the changes that had been made. In a ruling dated 22.01.2019, the CIT(A) partially upheld the appeal. The second part of the initial addition, which was equal to Rs. 1,94,279 and had been labelled as “service charges” for the sale of “Indian journals in printed form,” was eliminated by the CIT(A). Insofar as the second and third additions were concerned, the CIT(A) confirmed the same, i.e., both with regard to the amount, as well as the treatment accorded to them by the AO. In other words, these amounts were treated as royalty, by the CIT(A) as well.

It is this decision which led to the respondent/assessee preferring an appeal with the Tribunal. As mentioned above, the CIT(A) affirmed the deletion of the first component of the first addition by the Tribunal in the assailed order dated 14.10.2022. The Tribunal cited a ruling issued by its coordination bench in the case of Springer Verlag GmbH v. DCIT in ITA Nos. 434 and 3826/DEL/2019, which was rendered on August 23,2022. The AYs 2014–15 and 2015–16 were covered by the Tribunal’s ruling.

Regarding the second addition, the Tribunal overruled the respondent/assessee’s argument, which claimed that the subscription fee could not be considered a kind of royalty. Regarding this matter, the Tribunal adhered to the ruling made by the Supreme Court in Engineering Analysis Centre of Excellence (P.) Ltd. v. CIT, [2021] 432 ITR 471 (SC).

Analysis of the court

In this case, the Tribunal disagreed with the CIT(A)’s conclusion. There was Rs. 22,89,835 at stake. The services provided by the respondent/assessee must unquestionably come within one or more of the following categories, namely managerial, technical, or consulting services, in order for this addition to be upheld as FTS. This is clear from a straightforward reading of Section 9(1)(vii)(b) of the Act, read with Explanation 2, and Article 12(4) of the DTAA.

Section 9 establishes a deeming fiction for income accruing or generating in India, which includes, among other things, FTS paid by a resident. Explanation 2 to the aforementioned provision defines FTS as any payment (including lump sum payments) for the provision of managerial, technical, or consulting services. Payments for the recipient’s own construction, assembly, mining, or similar projects are not considered to be FTS, nor are payments that would otherwise be considered compensation subject to taxation under the “salaries” heading.

As a result, the services provided by the respondent/assessee under the Commissionaire Agreement must fall under one or more of the aforementioned categories, namely management, technical, or consultant services, in order for the consideration received to be considered FTS. The respondent/assessee received a commission for providing the services at a rate of 9.9% on the net revenue total of “any and all” sales commissioned through the respondent/assessee’s intermediary. The assessor/respondent was authorised to keep the commission while transferring the revenue to SIPL or by any other commission payment arranged between SIPL and itself.

Nothing in the Commissionaire Agreement suggests that the respondent/assessee was required to identify, create, define, or evaluate the goals that SIPL needed to achieve, or even to frame the policies that led to these goals, supervise, carry out, or modify already-adopted policies. In a sense, the respondent/assessee was not carrying out executive or supervisory duties. The respondent/assessee was only required to provide assistance with company operations.

We do not feel motivated to challenge the Tribunal’s judgement on the removal of the added item in the sum of Rs. 22,89,835, on account of commission that the respondent/assessee got. We believe that the CIT(A) erred in concluding that the respondent/assessee’s receipt of the aforementioned sum possessed FTS characteristics.

The coordination bench judgement of this Court in DIT v. Panalfa Autoelektrik Ltd. addressed the characteristics of what constituted FTS in great detail. The coordination bench has addressed the order issued by the Authority for Advance Ruling (AAR) in Wallace Pharmaceuticals (P.) Ltd. in this ruling. Mr. Bhatia’s attempt to separate the ruling in DIT v. Panalfa Autoelektrik Ltd. must fail because it misinterprets the judgment’s real ratio.

The second addition is therefore brought into focus. We must note that Mr. Bhatia stated during the argument that the additional Rs. 16,67,83,110/- that the respondent/assessee received from its affiliates as a subscription fee for e-journals could not be considered a royalty due to the ruling made by the Supreme Court in Engineering Analysis. The idea that the subscription fee should be classified as FTS or, alternatively, as royalty has been raised for the first time in the written submissions, in contrast to the submission.

According to us, the argument that a subscription fee should be classified as FTS cannot be recognised because the appellant and revenue did not take this stance before the Tribunal. This flip-flop was made by respondent/assessee would do well to abjure. 

Considering that there is no evidence on file indicating that the respondent/assessee has granted the right in respect of copyright to the relevant subscribers of the e-journals, we also believe that the subscription fee cannot be classified as royalty. The only thing the respondent/assessee did was sell the publication that was protected by a copyright to the relevant organisations without granting any copyright to the content in question.

Given the ruling issued by the Supreme Court in the instance of Engineering Analysis, we believe the Tribunal acted correctly when it erased the addition made under this heading. For the aforementioned causes, we believe that there isn’t a significant legal issue that warrants our examination. The judgements mentioned above address the problems that were presented.

 As a result, the appeal is dismissed.

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Delhi High Court dismissed the appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996.

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Title: UNION OF INDIA versus INDIAN AGRO MARKETING CO-OPERATIVE LTD

Judgment reserved on: 25th May, 2023.

Judgment delivered on: 11th July, 2023.

 + FAO (COMM) 123/2022 & CM APPLs. 36105-36107/2022, 36109/2022

CORAM: HON’BLE MR. JUSTICE SANJEEV SACHDEVA

      HON’BLE MR. JUSTICE MANOJ JAIN

Introduction

Delhi High Court dismissed the appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 impugns order dated 28.05.2022 passed by learned District Judge (Commercial Court) whereby, the objection petition filed by the appellant herein under Section 34 of said Act has been dismissed.

Facts of the Case

The appellant issued a tender for the purchase of 5450 metric tonnes (MT) of “Gramme whole.” In this tender procedure, the respondent M/s Indian Agro Marketing Co-operative Limited took part, and they were given the job of supplying 1125 MT of whole gramme at the price of Rs. 3553/- per quintal. On February 9, 2012, the appellant issued an acceptance letter. The work had a total cost of Rs. 3,99,71,250 and was due between February 1 and February 15, 2012.

The respondent made a request for an extension of the delivery time to March 31, 2012, citing the fact that a significant portion of the “delivery period” had already passed even before the receipt of the acceptance letter. The appellate granted this motion, and the delivery deadline was extended to March 31, 2012. According to the contract’s terms and conditions, the respondent provided a 39,97125/- rupee unconditional bank guarantee.

The respondent could not supply „Gram Whole‟ by 31.03.2012. In a “performance notice” dated 16.04.2012, the appellant instructed the respondent to carry out its contractual responsibility to provide supply on or before 17.05.2012, adding that the contract would be voided if such supply was not made.

Since no delivery was delivered, the contract was terminated on June 29, 2012, and the appellant forfeited the bank guarantee in accordance with clauses 7(4) of DGS&D-68 (Revised) and 18(d)(viii) of the appendix to the tender investigation.

 The respondent received the remaining funds after the appellant withheld Rs. 28,97,988 as “general damages.” Since the contract contained a “arbitration clause,” the respondent sought the court to request the appointment of an arbitrator by submitting ARB.P. No. 597/2014. This court was happy to appoint Shri A.K. Garg, Additional District Judge (retired), as Sole Arbitrator in an order dated February 26, 2015.

The Arbitral tribunal rejected the claims of the respondent and passed an Award accordingly. The appellant filed a petition under Section 34 of the aforementioned Act to contest the claimed award. The contested order dismissed the objection petition, OMP (COMM.) No. 37/19, which prompted the filing of the current appeal.

Analysis of the court

The appellant cited ONGC Vs. Saw Pipes Ltd. (2003) 5 SCC 705, and the arbitral tribunal noted that in that case, all of the contractor’s security was permitted to be forfeited because the parties “expressly agreed” that the amount was a true pre-estimate of damages and that liquidated damages were not a punishment. Thus, the Arbitral Tribunal determined that the factual matrix in the current instance was distinct. The forfeiture of a portion of the bank guarantee as “general damages” was not justified since the appellant was unable to demonstrate any financial loss, and no evidence was presented to support this conclusion. The Arbitral Tribunal further noted the cases of Kailash Nath v. DDA (2015) 4 SCC 136, Fateh Chand v. Balkishan Das (1964), and Maula Bax v. UOI (1969) 2 SCC 554.

The appellant cited the Supreme Court’s ruling in Construction and Design Services v. Delhi Development Authority: (2015) 14 SCC 263, arguing that because the purchase was for a public purpose, they were not obliged to prove any loss. The work on the “sewage plant” was delayed in the aforementioned instance, and as there was no way to calculate the losses brought on by the delay, it was determined that the damages were not calculable. In the current instance, the contract pertains to the purchase of goods, and any loss sustained by the appellant may clearly be measured in monetary terms.

In Ministry of Defence, Govt. of India vs. CENREX SP Z.O.O. (supra), it was held, among other things, that the amount sought as liquidated damages could be claimed as per Section 74 of the Indian Contract Act, 1872, once the nature of the contract was such that losses were incalculable. This was done without proving or demonstrating how much loss was caused.

It was noted in MMTC Ltd. v. Vedanta Ltd. (2019) 4 SCC 163 that, in terms of challenging an order issued under Section 34, it cannot be contested that such challenges brought under Section 37 cannot go beyond the bounds of Section 34. In other words, the court cannot independently evaluate the merits of the award; instead, it must just confirm that the court’s use of its authority under Section 34 has not gone beyond the bounds of that provision. Regarding Section 34, it is well established that the Court does not hear appeals involving arbitral awards but may intervene on the merits in certain circumstances.

Thus, it is unnecessary to reiterate that interference under Section 37 of the aforementioned Act does not involve a review of the merits of the dispute and is only permitted in instances where the arbitrator’s findings are arbitrary, capricious, or perverse, when the court’s conscience is shocked, or when the illegality is not minor but instead affects the core of the issue. If the arbitrator’s position is one that might be supported by the evidence, then the arbitral decision cannot be challenged. Referring to Associate Builders v. DDA DDA, (2015) 3 SCC 49; Associate Builders v. See ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705.

Nothing that is shown to us suggests any obvious illegality, a completely illogical or irrational interpretation of a contract, or a result that was reached by disregarding significant facts or on the basis of “no evidence.” However, given the established legal position and the relevant facts, we do not believe there is a need for us to become involved. As a result, the appeal is denied.

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Delhi High Court has set aside the order passed by the Assistant Controller of Patents & Designs under section 15 of the Patents act.

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Title: NIPPON STEEL CORPRATION vs THE ASSISTANT CONTROLLER OF PATENTS AND DESIGNS

Date of Decision: 7th July, 2023

+ C.A.(COMM.IPD-PAT) 36/2022

CORAM: JUSTICE PRATHIBA M. SINGH

Introduction

Delhi High Court has set aside the order passed by the Assistant Controller of Patents & Designs under section 15 of the Patents act and remanded for fresh consideration to the Respondent- Controller of Patents and Designs within a period of two months from today.

Facts of the case

The Appellant, Nippon Steel Corporation, filed the current appeal according to section 117A(2) of the Patents Act, 1970 (hereafter, “Act” disputing the contested ruling dated March 5, 2012 made under Section 15 of the Act.

According to the impugned order, the Respondent-Assistant Controller of Patents & Designs rejected the Appellant’s application bearing no. 435/DEL/2006 for the grant of a patent in respect of an invention titled “Non-Oriented Electrical Steel Excellent in Magnetic Properties in Rolling Direction and Method of Production of Same” (hereinafter, “subject invention”).

The Tribunals Reforms Act of 2021 allowed for the transfer of the current appeal, which was first brought in 2012 before the Intellectual Property Appellate Board (the “IPAB”), to this Court.

Analysis of the court

In Agriboard International LLC v. Deputy Controller of Patents and Designs [C.A.(COMM.IPD-PAT) 4/2022, dated March 31, 2022], this Court held that discussion of the prior art, the subject invention, and how the subject invention would be obvious to a person skilled in the art would be mandatory while rejecting an application for lack of inventive step. It is inadequate to simply get to the plain judgement that the subject invention lacks creative step since doing so would violate Section 2(1)(ja) of the Act.

Following the ruling in Agriboard (supra), this Court once more, in Gogoro Inc. v. Controller of Patents and Designs [C.A. (Comm.IPD-PAT) 25/2021, dated 24th August 2022], set aside the Respondent’s unjustified order refusing the grant of the patent, and restored the patent application to its original position.

Reading the contested order will reveal that the originality and innovative step concerns under Section 2 of the Act were not properly discussed before the order was made. The patent application was abruptly dismissed by the challenged ruling, which makes no mention of any of the FER’s stated previous art. This Court believes that the issue merits being remitted to the Respondent-Controller of Patents and Designs for new consideration after reviewing the contested ruling.

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