MAREVA & ANTON PILLER INJUNCTIONS IN THE INDIAN CONTEXT

Mareva and Anton Piller injunctions are variants of inter alia Temporary Injunctions, Interim Reliefs and Interlocutory Orders The word injunction as defined by Black’s Law Dictionary means “a court order commanding or preventing an action.”[1] The law of injunctions is generally based upon the principles of equity wherein no unjust harm should come to either party. Conventionally, the taking of any legal action is understood through the renowned maxim ubi jus ibi remedium, which means where there is a right, there is a remedy. However, granting of injunctions are not a matter of right but depend upon the discretion of the court. Mareva and Anton Piller injunctions are forms of temporary injunctions. The primary purpose of temporary injunctions are provide the plaintiff adequate relief that is characterized as being immediate and provisional. Such order to do or not do something is not final and only exists in force until the further orders are issued by the Court or till the final judgment is delivered. Thus the Mareva and Anton Piller injunctions are applied and understood in the Indian context in through different lenses.

WHAT IS MAREVA INJUNCTION?

Mareva Injunction is a type of temporary injunction granted against the defendant.[2] It is often referred to as ‘freezing order’. In this type of injunction, the Court ‘freezes’ the property of the defendant in order to prevent him from wrongfully alienating it and subsequently running away.[3] The origins of this type of injunction can be traced to the case of Mareva Compania Naviera SA v International Bulkcarrier.[4] where it was held that where it appears that there is a likelihood that the debtor will dispose off his assets on which debt is owed so as to preemptively defeat any possible remedy conferrable by the judgment, the court may pass an injunction to prevent such adversity. Mareva injunction matters are only pleaded in cases of extreme urgency and place a very high burden of proof on the plaintiff. This is because such matters are usually heard ex parte without notice given to the other party.[5] Thus, in order for a plaintiff to obtain such an order in his favour, it is necessary for him to outline all possible facts, figures, laws and material evidence in order to convince the Court that it is in the interest of justice for:

a.audi alterum partem to be forgone by passing an ex parte order in favour of the plaintiff AND

b. for the debtor’s asset to be frozen and seized for the time being.


Thus, the essentials in seeking a Mareva injunction can be summarized as follows:

1. Clear and compelling prima facie case- The plaintiff has to disclose all facts, relevant material, laws and details necessary to comprehensively establish the case demands exceptional remedy.

2. Risk of dissipation of assets- whether the risk is in the nature of transfer of assets abroad beyond the local jurisdiction of the court in which it falls or whether it is wrongful alienation of the asset, the risk and likelihood of the defendant taking such action must be proved.

3. Assets are within the jurisdiction of the Court - the impugned assets must fall within the territorial jurisdiction of the Court for any action to be taken upon them.

4. Providing an undertaking- the plaintiff must provide an unconditional undertaking to indemnify the defendant against any damages that may arise if the order turns out to be improperly granted for any reason.


MAREVA INJUNCTION IN THE INDIAN CONTEXT

Vis a vis Order 39

As stated earlier, temporary injunctions are governed by Order 39 of the CPC. Order 39 provides the grant of a temporary injunction in case any property in dispute is in danger of being wasted, damaged or alienated by any party to the suit.[6] Moreover, in the event the defendant threatens or intends to dispose of the property with a view to defraud the creditors[7] or otherwise cause injury to the plaintiff, the Court can grant such temporary injunction as fit for the abovementioned purposes. Thus, a Mareva Injunction would be covered under these grounds and a party seeking a Mareva Injunction or equivalent relief would have to petition under Order 39. In that case the essentials of Order 39 will have to be complied with which are:

  • Prima Facie case- plaintiff must establish a prima facie case exists

  • Balance of convenience- the plaintiff must establish that the comparative loss to him would be greater than the comparative loss to the defendant.

  • Irreparable loss- the plaintiff must also show that if the relief sought is not granted, it would cause an irreversible injury to the plaintiff and would adversely affect his position.

Vis a vis Order 38

Order 38 contemplates attachment of property before judgment. The powers under this order are wide and confer upon the Courts the power to attach property even beyond the limits of its local jurisdiction.[8] The Court can use such powers when it is of the opinion that the defendant is about to dispose of the whole or any part of his property[9] whether from within or beyond the local limits of the jurisdiction under which such property falls.[10] The difference between Order 38 Rule 5 and a Mareva Injunction would only be in effect. Order 38 Rule 5 leads to the attachment of property thereby creating a lien on it or transferring some interest in it to the benefit of the plaintiff. A Mareva Injunction would not lead to the attachment of property but merely its ‘freezing’ or seizing. There is no interest created in favour of the plaintiff, it is merely to prevent the defendant from wrongfully alienating or transferring it.


WHAT IS AN ANTON PILLER INJUNCTION?

Anton Piller injunction allows the plaintiff to search premises of or related to the defendant and seize any evidence without prior warning to the defendant. Such matters are heard ex parte otherwise the purpose of the remedy would be defeated. The purpose of Anton Piller orders are to prevent the destruction of relevant evidence, particularly in cases dealing with infringement of IPR. It is also known as a ‘civil search warrant.’ The inception of Anton Piller injunctions was found in the case of Anton Piller KG v Manufacturing Process Ltd [11]where a fourfold test was laid down for obtaining such order:

  1. Extreme strong and compelling prima facie case- the plaintiff should have a clear and compelling case and should be able to convince the Court that his cause of action does exist.

  2. Potential for or actual damage- such potential or damage done must be very serious in nature.

  3. Clear evidence of defendant possessing incriminating documents or items and is likely to destroy the same if aware of the plaintiff’s application- the plaintiff must establish that the defendant has evidence in his hand that is extremely material and would be potentially destroyed if the plaintiff is not allowed to act immediately.

  4. Should an order be made, it would not cause real harm to the defendant- that is to say that the defendant if not guilty, will not be adversely affected. However such a stance has been questioned as there arises potential scope of misuse arises in the case the plaintiff misuses.

In a case decided by a single judge of the Calcutta High Court named Bucyrus Europe Limited And Anr. vs Vulcan Industries Engineering,[12] the Court established situations wherein the passing of an Anton Piller order was warranted:

  • Where the plaintiff has an extremely strong prima facie case

  • Where the actual/potential damage to the plaintiff is very serious AND

  • Where it is clear that the defendant possesses vital evidence

  • Where there is a real possibility that the defendant may destroy or dispose of such evidence so as to defeat the ends of justice

  • Where the purpose of such order, if granted, is for the preservation of evidence.

The Court further emphasised how utmost bona fide and good faith was a sine qua non for granting an injunction on the lines of Anton Piller.[13]


JOHN DOE ORDERS

Another variant of Anton Piller Order’s are known as John Doe or popularly referred to in India as Ashok Kumar orders. Anton Piller Order’s are passed against known persons, where the person and the premises associated with the person are known. Per contra, John Doe orders are those passed against unknown persons but of the nature of Anton Piller orders. John Doe denotes an unknown person and as soon as the identity of the offender is uncovered, his or her name is substituted instead of John Doe. The same is elucidated through the case of Tej Television Limited vs. Rajan Mandal.[14] In the given case, the plaintiff had registered broadcasting rights to the channel ‘Ten Sports’ for the FIFA World Cup 2002. The plaintiff was faced with the scenario where several unauthorised cable operators were broadcasting the channel without the plaintiff’s permission. The situation was such that if the Court waited to take any action, there would be virtually no way to enforce the infringed rights of the plaintiff and huge revenue losses would occur for the plaintiff. Therefore, the Delhi High Court under Section 151 of the CPC along with citing international precedents for the usage of John Doe orders, passed a John Doe order thereby appointing a Court Commissioner authorised to a search and seizure of the premises of the unauthorized cable operators. The action was successful and the plaintiff was able to avoid any further losses to revenue and reputation.

The abovementioned case thus demonstrates how a John Doe order operates but as a variant of an Anton Piller order in a case of copyright infringement.

John Doe orders also extend to cover trademarks. In a case, a John Doe order was passed by the Delhi High Court to restrain unknown persons from wrongfully adapting the tradename of the plaintiff and purporting to sell goods and services under their name. The plaintiff was in the business of manufacturing and selling cigarettes. The infringement was in the nature of copying the labelling, packaging materials and trademark of the plaintiff and passing off goods thereunder.[15]


CONCLUSION

Mareva and Anton Piller injunctions are exceptional remedies that are usually made ex parte without notice to the other party. The nature of the remedy sought is in exceptional situations wherein the defendant is either going to wrongfully alienate or transfer property thereby undermining the court process or he is going to wrongfully destroy material evidence to the detriment of the plaintiff. Both these situations, if bona fide, are of such a nature that the plaintiff cannot resort to conventional and lengthy litigation but requires urgent and immediate relief. It is for this reason also that the plaintiff has a higher standard of burden of proof to meet as Courts have to ensure there is no malafide proceeding that would unjustly affect the defendant’s interests. The criticism faced by both these remedies is the bypassing of audi alteram partem, one of the principles of a fair trial. With just one single view presented to the Court, any order passed, if adverse to the defendant would be contrary to principles of natural justice. For example, in Mareva cases, it is possible for the plaintiff to cause freezing of the defendant’s assets for malafide purposes such as eliminating competition. Furthermore, an Anton Piller order could be wrongfully used to gain access to trade secrets and other confidential information of the defendant under the garb of destruction of evidence. Thus, these remedies in the Indian context are seldom granted without due diligence by the Courts. In practicality, more Anton Piller orders are passed as compared to Mareva injunctions as IPR infringements are more common and favourable to Anton Piller orders. Moreover, due to the existence of Orders 38 and 39 of the CPC, the recognition and implementation of a separate Mareva injunction is per se unneeded. Thus, even if though the Courts can invoke inherent powers under Section 151 of the CPC to pass an Mareva injunction, the need for the same does not arise as the existing remedies in the Code are sufficient and do not warrant extraneous remedies.

[1] ‘Injunction’, Blacks Law Dictionary, 9th edition, 2010, pg. 855. [2] Bharat Aluminium Company v. Kaiser Aluminium Technical Service, Inc, (2012) 9 SCC 552. [3] Mohit Bhargava v. Bharat Bhushan Bhargava & Ors, AIR 2003 Bom 417. [4] Mareva Compania Naviera SA v International Bulkcarriers, SA [1980] 1 All ER 213. [5] Rajendraprasad R. Singh v. The Municipal Corporation of Greater Bombay, AIR (2003) Bom 392. [6] Order 39 Rule 1 (a), Civil Procedure Code, 1908. [7] Order 39 Rule 1 (b), Civil Procedure Code, 1908.

[8] Biakr Singh v. Badri Prasad, AIR 1988 Orrisa 48,50. [9] Order 38, Rule 5 (1)(a), Civil Procedure Code, 1908. [10]Order 38, Rule 5 (1)(b), Civil Procedure Code, 1908. [11] Anton Piller KG v Manufacturing Process Ltd, [1976] 1 ALL ER 779. [12] Bucyrus Europe Limited And Anr. vs Vulcan Industries Engineering, 2005 (30) PTC 279. [13] Ibid. [14] Tej Television Limited vs. Rajan Mandal, 5 [2003] F.S.R 24. [15] Ardath Tobacco Company Limited vs. Mr. Munna Bhai & Ors., 2009(39)PTC208(Del).

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