IP lawyers would agree that local commission plays an extremely important role in IP litigation by assisting the court in securing evidence against the allegation of infringement. Highlighting potential vulnerabilities in executing a local commission and discussing the solutions to overcome them, we are pleased to bring to you a co-authored post by Rohit Pradhan and Brahmakrit Rao Gadela. Rohit is an IPR litigator working as an Associate at LitLegal, practising before Hon’ble Delhi High Court and Districts Court in Delhi NCR. Brahmakrit is a Law Clerk cum Research Associate for Justice Hima Kohli, Supreme Court of India. They are also co-authors of the book ‘Franchise Laws in India’. Views expressed here are those of the authors’ alone.

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Potential Loopholes in the Execution of Local Commission

Rohit Pradhan and Brahmakrit Rao Gadela

The authors, through this post, raise concerns regarding the appointment and execution of the Local Commission. The authors address specific challenges inherent in the appointment of Local Commissioner (LC) and execution of Local Commissions within the context of Intellectual Property Rights (IPR) litigation. We identify vulnerabilities that, if exploited, could render the objectives of these commissions ineffective. The post further discusses instances where the confidentiality of commission proceedings may be compromised, thereby jeopardizing their intended purpose. Practical solutions to mitigate these challenges are also proposed.

Process of Appointing LC

Particularly in cases involving infringement or passing off, the plaintiff typically files an application under Order XXVI Rule 9 of the Civil Procedure Code (CPC) to seek the appointment of a LC. Once this application is allowed and LC is appointed (wherein the Plaintiff is directed to pay a substantial fees to the LC), aims to ensure that evidence is collected in an impartial manner. It is the plaintiff who incurs the costs associated with appointing a LC, which can range from INR 1-2 lakhs for a single day (para. 25), especially within the jurisdiction of Delhi. Once appointed, the LC becomes a critical component of the legal process, serving as an essential instrument for gathering evidence crucial to the case.

Duty of LC

The LC is a neutral person appointed by the court. Their primary role is to execute the local commission at the designated location (usually it’s Defendant’s place of business). It is tasked with the identification and collection of evidence. This could either involve seizing the evidence or merely inventorying it. If the latter is chosen, the evidence is then handed over to the defendant with a strict stipulation that it should not be disposed of until the court delivers its verdict. This process is instrumental in ensuring that justice is served in the case, since in both the cases i.e., seizing and inventorying (superdari), the evidence is preserved, which helps the court to adjudicate on the said matters properly. Once the LC completes its task, it prepares a detailed LC report. This report chronicles every step taken during the local commission, providing the court with an in-depth insight, which is crucial for adjudication. 

The Problem

The core issue centers around the unauthorized disclosure of information pertaining to the appointment of LCs in IPR suits, particularly those involving infringement and passing off. Such premature leaks compromise the integrity of the legal process by providing an opportunity for defendants to conceal or tamper with evidence, thereby defeating the purpose of the LC’s operation. While there are no publicly documented cases highlighting this specific issue, it is an acknowledged concern among lawyers practicing in the field of IP litigation.

(Sidenote: It is worth noting that the IPD bench, currently presided over by Hon’ble Mr. Justice C. Hari Shankar and Hon’ble Ms. Justice Prathiba M Singh, has begun adopting proactive measures to mitigate this issue. The bench has started to mute microphones during virtual hearings at the moment of passing an order for the appointment of a Local Commissioner. This subtle yet significant change in procedure indirectly reflects that the Bench is aware of the mishap pertaining to leakage of information).

The absence of reported incidents may be attributed to the fact that most IP cases tend to settle out of court, which further underscores the urgency of addressing this persistent issue. Owing to such leaks there may be instances where the defendant may dispose of the evidence and after the execution of Local Commission presents a compliant face, offering to abide by the court’s order in the subsequent hearing. As a result, the plaintiff, despite having the law on their side, is often left at a disadvantage, losing not only time and resources but also the very objective for which the suit was filed in the first place. If these matters were consistently reported and pursued in court, the judiciary might take cognizance of the issue. The lack of reported incidents inadvertently shields the problem, making it all the more crucial to address this loophole.

Potential Loopholes

1. Dispatching the Orders: In the process of dispatching orders regarding appointment of the LC(s) and execution of the local commission, three copies are usually sent to the registry. One is intended for the Station House Officer (SHO) to provide police support, another for the Local Commissioner, and the last for the counsel representing the plaintiff for the purpose of execution of Local Commission. It’s worth noting that the court typically issues directions specifying the confidential nature of these orders. For instance, the court often instructs that such orders are not to be uploaded onto the court’s website until the commission has been executed and a report filed by the LC. The specific directive may read as follows:-

“Let the copy of this order be not uploaded on the website of this Court till commission is executed and a report in that regard is filed by the learned Local Commissioner.”

Despite the critical nature of these orders, there are chances that these orders can be leaked from/ by any of the parties involved, including the court’s registry.

2. Open Court Proceedings: Whether the proceedings are in-person or virtual, they are open to all. This unfettered access allows individuals to glean sensitive details, such as the identity of the defendant, the location targeted, the products in contention, and more. This nullifies the surprise factor which the LC heavily relies on. It is pertinent to note that Section 153B of the CPC, states that the Civil Court is deemed to be an Open Court. The provision under this Section conveys that if the presiding Judge thinks fit, he may order at any stage of trial to restrict the access to the open Court. Thus it is suggested that the presiding Judge may hear and restrict the access of the cases wherein application for exemption from advance service and application for appointment of LC has been made. Furthermore, since, the suits which are filed has in its Master Index and Index-II mentioned the Applications which are being filed along with the suit, it becomes efficient for the Registry to segregate such cases, which could be listed on priority and sequentially. 

Legal Framework

Pursuant to Section 129 of the Code of Civil Procedure, 1908, and Section 7 of the Delhi High Court Act, 1966, the Hon’ble Delhi High Court is vested with the authority to issue appropriate directions concerning the practice and procedure to be followed in the exercise of its ordinary original civil jurisdiction. These legal provisions empower the court to implement measures that can enhance the efficacy and confidentiality of processes such as the appointment and execution of Local Commissioners.

Proposed Solutions

1. Dedicated and Separate Listing for IAs Seeking LC Appointments: All interim applications related to LC appointments and seeking exemption from filing advance service should be given priority and heard sequentially. This ensures that the specialized steps proposed are not entangled with regular court activities.
2. Redacting Defendant’s Name in the Cause List: To maintain the surprise element, it is essential to redact the defendant’s name, particularly when the court has permitted an exemption from serving advance notice to the defendant. Although there may be a concern that this could cause confusion among counsels, especially when multiple matters involve the same plaintiff but different defendants, it is important to consider that both the application and suit numbers are specified in the cause list. Counsels are made aware of these numbers once the suit is registered. Therefore, the availability of these specific identifiers would mitigate any potential confusion, ensuring that no prejudice is caused to any party involved.

It is however, pertinent to note that, the suggestion no. 2 might seem to come in conflict with the ruling of Microlube India judgment, which suggested to highlight the main contesting party in the suit. The judgement sought to curb the trend wherein the main defendant used to get arrayed as Defendant No. 2 and 3 for the sole purpose to not let the defendant know if the matter has been listed in the Court. However, the same judgment did not take into consideration the issue of leakage of information pertaining to the Local Commission. Nonetheless, the main defendant could still be arrayed as the main defendant and on the first date of hearing, when and if the name of Defendant is redacted, the Hon’ble Court may hear the application for exemption of Advance Service u/s 151 CPC and in case if the same is not allowed, the next effective hearing could be done without redacting the name of the Defendant. This way it could be ensured that the aforementioned suggestion does not come in the way of the above-mentioned judgment.

• Controlled Access to Proceedings: Restrict attendance during hearings related to LC appointments to relevant and interested parties only. Once these sessions conclude, normal access can resume.
• Sealed Court Orders: Orders related to LC should be sealed before dispatch to the registry to ensure their confidentiality. If the seal appears tampered or broken upon receipt, accountability measures can be triggered.
• Designated Personnel for Handling LC Orders: The suggestion to appoint a select group of individuals pertains specifically to personnel within the court registry. By limiting the processing and handling of these sensitive orders to a designated team within the registry, the chain of custody is tightened. This makes it easier to trace any potential leaks back to their source. While it is true that leaks could potentially occur from parties outside the court registry, minimizing the points of human contact within the registry itself substantially reduces the likelihood of information being compromised.

Conclusion

The Local Commission’s role is paramount, and ensuring its integrity is of the utmost importance. By addressing the highlighted loopholes and implementing the suggested remedies, we can reinforce the efficacy of the LC in such suits. We hope that the concerned authorities will consider these recommendations and take steps to uphold the sanctity of the legal process.

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• Source: https://spicyip.com/2023/11/loopholes-in-the-execution-of-local-commission.html