SC expresses concern over frivolous appeals clogging the system

In a recent judgment, a two-judge bench of the Supreme Court set aside an order of the Calcutta High Court’s division bench in a trade mark case on the ground that it interfered with the high court’s Single Judge’s order erroneously.


ON Monday, a Supreme Court bench of Justices L. Nageshwara Rao and B.R. Gavai observed in Shyam Sel and Power Limited vs. Shyam Steel Industries Limited thus: 

“An appellate court, after the findings of the trial court are recorded, has an advantage of appreciating the view taken by the trial judge and examining the correctness or otherwise thereof within the limited area available. If the appellate court itself decides the matters required to be decided by the trial court, there would be no necessity to have the hierarchy of courts.”

The court further pointed out that the appellate court cannot usurp the jurisdiction of the subordinate court (single judge of the high court in this case) to decide as to whether the tests of prima facie case, balance of convenience and irreparable injury are made out in a case or not.

These observations came while disposing of an appeal, pertaining to a trademark infringement case. The heart of the problem is a challenge against an order passed by the division bench of the Calcutta High Court, which modified a single bench order. 

Facts of the case

The respondent, who was the original plaintiff, had first filed a suit against the appellants, who are the original defendants, for infringement of trademark and passing off, in relation to a registered trademark ‘SHYAM’. 

Both the parties are involved in the manufacture and sale of Thermo Mechanically treated bars [TMT bars].

According to the respondent, the appellants had agreed to phase out the products that they had manufactured with the mark ‘SHYAM’, and not to use the said mark ‘SHYAM’ on their products in the future.

In 2018, the appellants started using the word ‘SHYAM METALICS’ on the packaging of their TMT bars. But they used the word ‘SHYAM’ on their invoices and stationeries. This was done by them only to take advantage of the growing and expanding business of the plaintiff, it was alleged. 

After the respondent filed a suit before the Calcutta high court, a single judge bench made a prima facie observation that since the mark ‘SHYAM’ is a part of the business name of the appellants-defendants, no injunction should be passed to restrain them from using the said word on their packaging.

This prompted the respondent to move an appeal before a division bench of the High Court. The division bench “modified” the Single Judge’s order. 

But in essence, the bench allowed the respondent’s appeal and passed a stay order restraining the appellants from using the mark ‘SHYAM’ in any manner till the disposal of the suit.

Aggrieved, the appellants moved the Supreme Court.

On behalf of the appellants, it was submitted that the appeal filed by the respondent before the Division Bench of the High Court was not tenable. 

“The order passed by the learned Single Judge dated 2nd April 2019 could not be construed to be a ‘judgment’ within the meaning of Clause 15 of the Letters Patent of the High Court”, was the argument. 

It was also submitted that the single judge had only granted time to file the reply, and had neither granted nor refused an interim injunction. The order of the Single Judge is neither a final judgment nor a preliminary judgment nor an intermediary/interlocutory judgment. 

Senior Advocate Neeraj Kishan Kaul, appearing on behalf of the respondent, submitted that the Division Bench of the High Court had rightly interfered with the order passed by the single judge.

What the Supreme Court said 

The main question that the court considered was regarding the tenability of the appeal against the order of the single judge and the correctness of the approach of the division bench of the High Court.

Firstly, the court looked into when an order takes the form of a judgment.

Heavily relying on its judgment in Shah Babulal Khimji vs. Jayaben D. Kania & Anr. (1981), it concluded that an order can be construed as a ‘judgment’ only when it possesses the traits and trappings of finality.

The Court also discussed clause 15 of the Calcutta High Court’s Letters Patent, which enables a party to appeal to the division bench of the high court against an order of the single judge.

According to the Supreme Court, what the single judge had done by the said order was to grant two weeks’ time to the appellants to file an affidavit and postpone the issue of grant of an ad-interim injunction by three weeks.     

“No doubt, that the learned Single Judge has at one place observed that prima facie, he was of the view that ‘SHYAM’ being a part of the business name of the appellants-defendants, no injunction should be passed to restrain the appellants¬defendants from using the said word ‘SHYAM’ on their packaging, but in the same order, he has clarified that all the observations he has made in the said order were prima facie for the purpose of passing an order at the ad-interim stage and the same would have no relevance at the time of considering and deciding the said application after exchange of affidavits”

Though, the postponement of the issue with regard to grant of ad¬interim injunction caused some inconvenience to the respondent, the same could not be treated as a ‘judgment’, the Supreme Court said. This is because there was no conclusive finding as to whether the respondent was entitled for grant of ad¬interim injunction or not.

“As such, the order passed by the learned Single Judge did not contain the traits and trappings of finality.”

The court also expressed its dissatisfaction with the approach of the division bench of the high court. The Supreme Court’s view was the division bench’s order was totally contrary to various well-settled principles of law.

Delving a little deeper into the issue at hand, the court noted that the two orders, by the single judge and the division bench respectively, were passed after a gap of about eight to nine months.

With this, the court also noted the high court’s division bench had observed in its order that there was an unnecessary prolongation of litigation in the matter.

“When the Division Bench of the High Court itself took 8¬9 months to decide the appeal, it is difficult to understand as to what the learned Judges of the Division Bench of the High Court meant by “unnecessary prolongation of the litigation and utter wastage of time”. If the learned Judges of the Division Bench were so much concerned with the prolongation of litigation, they could have very well requested the learned Single Judge to decide the injunction application within a stipulated period.”

The division bench further failed to identify how the discretion exercised by the single judge was exercised arbitrarily, capriciously or perversely. 

While pulling up the High Court for its approach, the Supreme Court also deemed it fit to highlight how frivolous appeals are wasting precious judicial time. 

“We find that it is high time that this Court should take note of frivolous appeals being filed against unappealable orders wasting precious judicial time. As it is, the courts in India are already over-burdened with huge pendency. Such unwarranted proceedings at the behest of the parties who can afford to bear the expenses of such litigations, must be discouraged.” 

Owing to this reason, the Court directed the respondent to pay up Rs. 5 lakhs to the Supreme Court Middle Income Group Legal Aid Society as costs. 

On these grounds, the Supreme court allowed the appeal and set aside the division bench order. The Supreme Court also asked the Single Judge to decide the application filed by the respondent under the Code of Civil Procedure within six weeks. Till further orders are passed by the single judge, the older order passed by the single judge dated April 2, 2019 would continue to operate, the Supreme Court ruled.

Click here to view the Supreme Court’s judgment.