In the matter of Confederation of Real Estate Developers Association of India v. Union of India & Ors. [W.P.(C) No. 3119 of 2020], a Single Judge [Rajesh Shankar, J] of the High Court of Jharkhand vide judgement dated May 13, 2021 has refused to set aside a decision of the National Green Tribunal (“NGT”) whereby construction activities undertaken without obtaining a prior environmental clearance (“EC”) were ordered to be stopped.

According to the Environment Impact Assessment Notification, 2006 (“EIA Notification, 2006”), prior EC is required for initiating any construction activity listed in the schedule of the notification. On March 14, 2017, the government issued a notification which gave defaulters a window of 6 months to obtain an ex-post facto EC. By a subsequent notification, the power of conducting appraisal of projects was delegated to the States. Thereafter, the validity of the notification dated March 14, 2017 was challenged, and eventually upheld. Aggrieved by this, one R.K. Singh filed an application before the NGT assailing the non-compliance of the EIA Notification, 2006. Consequently, the NGT ordered that all construction activities being run without having a prior EC be stopped.

Challenging the aforesaid order, the Petitioner argued that it could not obtain an EC due to non-existence of state level appraising authority. The Petitioner further argued that shutting down of its construction activities would lead to loss of livelihood of 3 lakh construction workers, 15 lakh dependent members and 200 MSME industries, hence the court should take a balanced approach by applying the doctrine of sustainable development between ecology and development.

The Respondents, on the other hand, argued that as per Clause 4 of the EIA Notification, 2006, which states ‘In the absence of a duly constituted SEIAA…shall be considered at Central Level…’ , the Petitioner should have approached the appraising authority at the central level for obtaining an EC.

Accepting the Respondent’s contentions, the Court observed, “…even if it is assumed that the projects of the members of the petitioner had started during the period when the SEIAA, Jharkhand was not functioning, the petitioner cannot claim the benefit of the said fact, since its members could have applied before the EAC at Central level for grant of EC and thus the contention of the…petitioner that the EC could not be obtained by the members of the petitioner due to non-functioning of SEIAA, Jharkhand at the relevant time, has no leg to stand.”

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

Copyright: ALG India Law Offices LLP

In the matter of NBU Bearings Ltd & Anr. v. Union of India & Ors. [WP(L) No. 3371 of 2021], a Divison Bench [Ujjal Bhuyan, Milind N. Jadhav, JJ.] of the High Court of Bombay by its judgment dated March 12, 2021 held that, in the absence of any interim order from the competent court, the custom authorities cannot suspend clearance to detain and hold goods beyond the initial period of 14 days.  

Section 53(4) of the Copyright Act, 1957 provides – “The Customs Officer shall release the goods, and they shall not longer be treated as prohibited goods, if the person who gave notice under sub-section (1) does not produce any order from a court having jurisdiction as to the temporary or permanent disposal of such goods within fourteen days from the date of their detention.” (emphasis supplied). Rule 7 (1) of Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 “Where the…Customs…has a reason to believe that the imported goods are suspected to be goods infringing intellectual property rights, he shall suspend the clearance of the goods.”(emphasis supplied). The underlying question in this case is seen to be whether the latter statutory provision can prevail over the former.

The importer-Petitioner imported bearings under the brand ‘TR’. The complainant had raised a system alert with the custom authorities alleging that the imported goods are suspected to be infringing its copyright. Upon the custom authorities suspending clearance, the importer submitted registration of the trademark ‘TR’ in Class 7.

The importer contended that the custom authorities have no authority to suspend clearance of the imported goods beyond the initial period, in absence of the complainant submitting an order of a competent Court. The custom authorities, however, contended that the complainant has been granted registration of the ‘TR’ artistic work under the Customs Act thereby constituting the complainant as the ‘right holder’ and that therefore they have followed due process.

The Court ruled in favour of the Importer and held that “In the absence of any interim order…from the civil court from being placed on record … it will therefore not be appropriate for …to withhold / detain the consignments imported …beyond the prescribed period of 14 days…Merely because the owner of the work / mark deposits the requisite amount of security with the customs department, the customs officer cannot treat the imported goods as prohibited…”. 

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

Copyright: ALG India Law Offices LLP

In the matter of Piyush Subhashbhai Ranipa v. State of Maharashtra [2021 SCC OnLine Bom 350], a single judge [Sarang V. Kotwal, J.] of the High Court of Judicature at Bombay vide an order dated February 26^th 2021, held that offences under Section 63 of Copyright Act, 1957 and Section 103 of Trade Marks Act, 1999 are cognizable and non-bailable.

In the Part II of Schedule I of the Code of Criminal Procedure, 1973 making classification of offences against other laws, it is provided that the offences which are punishable with imprisonment for 3 years and upwards, but not more than 7 years, are cognizable and non-bailable while offences which are punishable with imprisonment for less than 3 years are non-cognizable and bailable. Both Section 63 of the Copyright Act and Section 103 of the Trade Marks Act provide for offences which are punishable with imprisonment for a term which may extend to three years.

The Applicant submitted that the schedule I of CrPC can be applied to Acts other than the Indian Penal Code, keeping in mind the object and reasons of that particular Act, and therefore looking at the scheme of Copyright Act and Trade Marks Act, the offences are bailable, falling within the third category of Part II of Schedule I.

The Respondent State contended that the offences in which punishment can extend upto 3 years of imprisonment are non-bailable offences and fall within the second category of Part II of Schedule I, as this has already been held by various courts in context of other statutes.

The Court after analyzing the provisions of CrPC and few relevant decisions of various courts on the said issue observed that “Bare reading of this Part II of the Schedule I of CrPC shows that, if the offences in the other laws are punishable with imprisonment for three years and upwards then the offences are cognizable and non-bailable. Wherever it is possible to impose the punishment extending to three years, this category would apply, because in such offences it is possible to impose sentence of exact three years. In such cases offences would be non-bailable.” Therefore, the Court concluded that the offences under Section 63 of the Copyright Act and Section 103 of Trade Marks Act are cognizable and non-bailable in nature and hence, the anticipatory bail application, although ultimately rejected on facts, was held maintainable.

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

Copyright: ALG India Law Offices LLP

In the matter of Dhaval Diyora vs. Union of India & Others [Writ Petition (L) No.3718 of 2020], a two-judge bench (Hon’ble Nitin Jamdar J., Milind N. Jadhav J.) of Bombay High Court vide an order dated November 4^th 2020 held that a pre grant opposition to a patent application cannot be filed after the Controller has given its final decision.

In this matter, the Controller had rejected the patent application of Pfizer Inc. (Respondent No. 4), against which Pfizer filed an appeal before the Intellectual Property Appellate Board (IPAB). The IPAB concluded the hearing in appeal on August 10, 2020. The Petitioner filed pre-grant opposition on August 18, marking copy to IPAB. On August 21, the IPAB pronounced order granting patent to Pfizer. The Petitioner filed a writ challenging IPAB’s order of August 21. Petitioner contended that Section 25 (1) of Patents Act, 1970 permits any person to oppose the grant of patent by way of pre-grant opposition “where an application for a patent has been published but a patent has not been granted”, and that unless a patent entered in the Register it is not granted. Petitioner argued that IPAB, being aware of the pre-grant opposition, could not have ordered the grant of patent without first hearing and disposing the opposition on merits. The Respondents argued that the filing and adjudication of pre-grant oppositions is restricted to the stage when the application is pending before the Controller, and the appeal is not a continuation of such proceeding.

The Court observed that the scheme of pre-grant opposition under the Act is limited to the Controller and held that “the right under section 25(1) of pre-grant opposition starts when the Patent is published and continues till the matter is decided by the Controller but no further”. As per the Court, the Controller was functus officio on the date of filing of the pre-grant opposition. The Court also upheld an earlier finding that “sealing of patent and entry of patent in the register are ministerial acts.”

The Court took notice of the fact that the petitioner had not filed any pre-grant opposition before the Controller’s final order in 2015 and observed that “if after the order of the tribunal, which is to be implemented by the Controller, the Controller entertains pre-grant applications; it may give rise to an endless series of oppositions”. The Court dismissed the writ petition with costs and held that the pre-grant opposition is not maintainable in law.

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

Copyright: ALG India Law Offices LLP

In the matter of Engineering Analysis Centre of Excellence Private Limited v. The a Commission of Income Tax and Anr (2021 SCC OnLine SC 159)[i] a full bench (R.F. Nariman, J., Hemant Gupta, J., B. R. Gavai, J.) of the Hon’ble Supreme Court of India vide its order dated March 2^nd 2021, held that the amount paid by a resident Indian end user/distributor to a foreign software manufacturer for a License to resale/use of such Software is not ‘royalty’ and thus is not taxable.

The Appellant is a resident Indian end-user of shrink-wrapped computer software, directly imported from the United States of America. The Respondents were of the view that since the sale of the software included a license to use the same, the payment made by the appellant(s) to foreign suppliers constituted “royalty” which was deemed to accrue or arise in India and, therefore it was required that tax be deducted at source by the Indian importer and end-user (Appellant) under Section 195(1) of the Income Tax Act, 1961.

The Court considered, inter alia, the relevant provisions under the Copyright Act, 1957 and its amending acts in detail and observed that- “The transfer of the ownership of the physical substance, in which copyright subsists, gives the purchaser the right to “do with it whatever he pleases, except the right to reproduce the same and issue it to the public, unless such copies are already in circulation, and the other acts mentioned in section 14 of the Copyright Act.”

The Court further observed that the license between the parties was not a ‘Licence’ in terms of section 30 of the Copyright Act, which transfers an interest in all or any of the rights contained in sections 14(a) and 14(b) of the Copyright Act, but is in fact the sale of a physical object which contains an embedded computer programme, and is therefore, a sale of goods. Thus, the Court held that any amount paid for such license cannot be construed as ‘Royalty’ and is not taxable under the Section 195(1) of the Income Tax Act, 1961.

The Court concluded in its Judgement that- “The amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India.”

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

Copyright: ALG India Law Offices LLP

[i] https://main.sci.gov.in/supremecourt/2011/38137/38137_2011_33_1501_26629_Judgement_02-Mar-2021.pdf