DELHI HIGH COURT DECLARES THAT SECTION 24(5) OF PLANT VARIETIES ACT IS VOID AND CAN BE ABUSED.

In a landmark judgement delivered by division bench of J. Ravinder Bhatt and J. R.K. Gauba of Delhi High Court holds section 24(5) of the Protection of Plant Varieties & Farmers’ Rights Act, 2001 (PPVFRA) as void. The Hon’ble Division Bench of the Hon’ble Delhi High Court held that section 24(5) of the Act is broad, sweeping, arbitrary and hence void. 

The case went back to 2008 when MAHYCO MONSANTO filed an Application under Section 24(5) of the PPV&FR Act seeking direction from the Registrar to grant an ex-parte injunction against Nuziveedu Seeds Limited (NSL). MONSANTO MAHYCO had sought relief in the nature to (i) seeking direction against NSL its agents and distributors from selling any variety similar to one of their variety (ii) rendition of account (iii) appointment of Local Commissioner (iv) preventing farmers from selling or sowing any such variety.

A similar petition was filed by PIONEER OVERSEAS against KAVERI SEED LIMITED seeking a similar direction against Kaveri’s KMH-50.

Infini Juridique on behalf of NSL as well as Kaveri challenged the notice issued by the Registrar in their respective petitions and also questioned the legal validity of Section 24(5) of the PPVFRA. Section 24(5) of the PPVFRA reads as under:

 

SECTION 24. ISSUE OF CERTIFICATE OF REGISTRATION

(5) The Registrar shall have power to issue such directions to protect the interest of a breeder against any abusive act committed buy any third party during the period between filing of Application for Registration and decision taken by the Authority on such Application.

The main grounds of challenge was that the provision is ultra vires as it (i) creates a de-facto right in favour of the Applicant despite the variety yet to be registered (ii) it provides wide powers to the Registrar of PPV&FR to pass any order, which cant be even appealed (iii) the provision may be abused by applicants to stretch the protection beyond the statutory protection as provided under the Plant Varieties Act and it may be against the legislative intent.

Jayant Bhushan, Senior Advocate and Mr. Abhishek Saket of Infini Juridique argued the matter comprehensively. The Hon’ble Court finally opined in the favour of the Petitioners NSL and Kaveri while dismissing the arguments of Union of India as well as MAHYCO MONSANTO and PIONEER Overseas.  

SUBMISSIONS BY THE PETITIONERS:

  1. First, section 24(5) is unreasonable and void, and that the impugned provision gives the Registrar the rights to issue injunctions or any kind of restraint order under Section 24(5) of the PPV&FR Act, despite the applicant not possessing any proprietary right and there may be an eventuality that the application for registration of the Variety may be ultimately rejected.  Additionally, that such provisional or interim protection would in essence extend the exclusivity beyond the permissible 15 year limit under the Act.
  2. Moreover, the provision violates principle of natural justice as it contains no proper guidelines for making ex-parte orders, this enables an order against a third party, who is adversely affected, but deliberately kept out of the proceedings. The authority exercising such unlimited and uninhibited powers is not deemed a judicial institution. 
  3. Further, analogy was drawn with Order 39 CPC, 1908 to describe that making of ex-parte ad interim orders is statutorily controlled and the discretion exercised, is tempered by prescribed principles, which makes it reasonable. It was highlighted that orders under 24(5) are not appealable as the right to appeal is limited to matters of Registration i.e. when registration is finally granted or rejected as prescribed under section 56 of the Act. 
  4. Further it was submitted that substantial question of law can only be decided by tribunals consisting of sufficient number of judicial members. This being the condition, absence of any qualifications required on part of the Registrar and the absence of a provision for appeal of matters which are not final, aggravates the possibility of arbitrary orders under the impugned provision.  

 

SUBMISSIONS BY THE RESPONDENTS:

  1. The foremost argument submitted by the Union of India (Resp. 1) that the impugned provision is necessitated by International Convention for the Protection of the New Varieties of Plants, 1991 (UPOV) and mere silence of any guidance in the statue would not per se invalidate the impugned provision.
  2. On arbitrary and sweeping powers, the UOI urged that other IP laws deals in business and industrial process whereas the PPV&FR Act is primarily for agricultural matters and time-span in obtaining plant breeder’s rights under the Act is longer than that required for obtaining any other IPR. 
  3. On procedural vacuums in legislation, it was argued that the powers of the Civil Court and the principles applicable to them essentially would always fill the gap in the Act. Additionally, the same is in a nature of a preventive remedy, which can be tailored to suit the peculiar circumstances and facts of each case. Pioneer Overseas Corporation (Intervener) confined its submission that legislature, in its wisdom, enabled interim protection under the Act, which cannot be held arbitrary merely because the statue is inexplicit about the conditions of such power.
  4. Maharashtra Seeds (R 3) the breeder is under threat of losing exclusivity without a provision that protects the claim during the period when it is under examination, which is sound rationale for impugned provision. Unlike pure administrative discretion, which might be unguided, quasi-judicial discretion to a statutory authority asked to discharge the functions akin to a court, should be viewed differently.   

 

Judgement/Conclusion:

  1. The Hon’ble Court observed that the impugned provision contains a unique power, to make an interim order anytime during the pendency of an application, from its filing to its disposal. The provision is broad and sweeping and its exercise is not in any manner conditioned upon consideration of any objective material of the Act. The solitary guidance given is that such order can be made if someone is indulging in an “abusive act”. Significantly abusive act is undefined and its breadth can comprehend a range of behaviour.
  2. The Court while negating the contention of the doctrine of sui generis to the Act with regard to the application of impugned provision, further, stated that the basis for grant of an order under the impugned provision is existence of a a vague and undefined state of affairs.
  3. Further the Court also noted that the provisions of the Act per se do not furnish guidance in this regard, both as to what power is conferred and at the same time, is incapable of control, having regard to its amplitude. Plainly the lack of guidance clothes the authority with arbitrary power.
  4. While concluding the Hon’ble judge stated that the protection granted is not only wide but in respect of an entirely inchoate claim. The court very comprehensively drew comparisons with other IP laws and finally noted that in the application under the Act, the claims are entirely inchoate.
  5. On qualifications of the Registrar, the Hon’ble court noted that the tribunal constituted under the Act comprised of members having experience of more than 10 years as judicial member or 12 years as lawyers. The omission to the factor in any qualification with legal experience for Registrar, who can issue wide interim orders that can sound a death knell spell to business of breeders, or even farmers, is a fatal omission. 

The Hon’ble court observed that section 24(5) may undoubtedly be an adequate remedy to prevent abusive practices; yet the danger of abuse of the provision in view of the unguided nature of the power, is destructive of the rule of law and contrary to Article 14 of the Constitution of India. Based on the above, the Hon’ble Court held/declared that Section 24(5) of the Protection of Plant Varieties and Farmer’s Rights Act, 2001 is void.