In a Well Reasoned Judgment, Delhi High Court Strikes Down Section 24(5) of Plant Varieties Act

In a significant judgment delivered earlier this month, a Division Bench of the Delhi High Court struck down Section 24(5) of the Protection of Plant Varieties and Farmers’ Rights Act (“PPVFRA”) on the ground that it gives uncanalized power to the Registrar of Plant Varieties to grant interim relief to a breeder whose application for the registration of a plant variety is under consideration.

Authored by Justice Ravindra Bhat, the judgment stands out for the Court’s lucid articulation of the principles that should undergird the grant of interim relief in legal disputes in general and intellectual property disputes in particular and the incisive analysis of the constitutional validity of Section 24(5) against the touchstone of these principles.

Readers who want to learn more about the scheme and objects of the PPVFRA can read Mathew’s primer here.

Section 24(5) of the PPVFRA, which empowers the registrar to pass an interim order during the period between the filing of an application for registration of a variety and the authority making its decision on such an application reads as follows: “(5) The Registrar shall have power to issue such directions to protect the interests of a breeder against any abusive act committed by any third party during the period between filing of application for registration and decision taken by the Authority on such application.” [Long post ahead!]

Arguments of the Petitioners:

The Petitioners advanced 5 main arguments in support of the proposition that Section 24(5) is unconstitutional.

First, contending that Section 24(5) can be used as an instrument to smother the commercial operations of third parties, the Petitioners argued that the provision does not envisage any compliance with principles of natural justice when such orders are issued. More specifically, in light of the fact that the Registrar is not obligated to hear all the third parties which are likely to be adversely impacted by the issuance of his directions, the Petitioners argued that the provision is unconstitutional.

Second, in light of the fact that the provision envisages the issuance of interim directions even before the concerned breeder’s application for registration has been accepted and any proprietary rights have consequently accrued in its favour, the Petitioners argued that the provision could result in favourable interim directions being issued even if the registration application is ultimately rejected. Since the provision envisages the grant of interim directions even before the completion of the 5 stages of registration outlined in the Act, they argued that it can cause ‘immeasurable harm’.

Third, they contended that the provision does not flesh out any details of the orders that can be issued by the Registrar, such as the conditions subject to which they can be issued or the duration of their operation. Most significantly, the Act does not provide for any appeal against the issuance of an order under the impugned provision.

Fourth, relying on the Supreme Court’s holding in the cases of Union of India versus R. Gandhi and Madras Bar Association versus Union of India, the Petitioners contended that it is a well settled principle that substantial questions of law can only be decided by tribunals consisting of an adequate number of judicial members. This being the case, the impugned provision is not constitutionally tenable, inasmuch as the Act does not prescribe any qualifications for the Registrar who is empowered to issue such orders. In support of this argument, they referred to other provisions of the PPVFRA under which questions of critical legal significance can only be issued by a court not lower in rank to the District Court.

Finally, although the provision envisages the issuance of orders to injunct the commission of abusive acts, it does not explain what acts are to be considered abusive. This further fortifies the argument that the Registrar has been vested with unbridled power under the Act.

Arguments of respondents:

In response, the respondents advanced 3 principal arguments.

First, underscoring the need to provide sui generis protection to plant varieties, they contended that breeders typically invest a substantial amount of time and money in developing new plant varieties. This being the case, in the absence of the impugned provision, they would be left with no remedy to prevent the misappropriation of the product of their labour. Stating that the PPVFRA does not stand on the same footing as other IP statutes by virtue of the unique concerns that the law addresses, they argued that the two cannot be compared.

Second, since the Act gives to the Registrar all the powers of a civil court, the procedures and powers that he is required to comply with/is possessed of are on the same footing as those of a civil court. This being the case, there is no force in the argument that the failure to delineate the appropriate procedure in accordance with which interim directions can be issued renders the provision constitutionally suspect.

Third, a breeder intending to get his variety registered has to share a substantial amount of novel information with the Registrar, giving rise to a high likelihood of the information being misused. This being the case, the impugned provision, by imposing an embargo on such misappropriation, plays a critical role in the effective functioning of the statutory scheme governing the registration of new varieties.

Decision of court:

The Court commenced its analysis by characterizing Section 24(5) as a provision giving ‘broad and sweeping’ powers to the Registrar.
Thereafter, it delineated the two grave infirmities that the provision suffers from: Absence of any clearly defined parameters in accordance with which the provision is to be applied and lack of clarity on what constitutes an ‘abusive act’.

In explicating its assertion that the power given to the Registrar is overbroad, the Court stated that an applicant may claim that it was first responsible for developing a variety and its competitor is wrongly misappropriating the same – a claim which may be disputed by the latter. In such a situation, absent registration of the applicant’s variety, it is very difficult for the Registrar to determine if the conduct of the competitor would constitute an abusive act.

In light of the fact that the term ‘abusive act’ is susceptible to multiple interpretations, the Court reasoned that the provision could be legally tenable only if the exercise of the Registrar’s powers was governed by an objective set of parameters.

Citing a number of judgments in support of the proposition that quasi-judicial authorities must act in accordance with a set of well-defined parameters, the Court held that Section 24(5) is clearly not in consonance with this well settled principle.
Holding that the grant of interim relief on the basis of an inchoate right is an anathema in the realm of property law, the Court held that only a vested right in the breeder’s favour can form the legal basis for the issuance of the directions contemplated by Section 24(5).

Finally, noting that the Act or the Rules do not spell out the need for the registrar to come from a legal background or possess legal expertise, the Court held that it would be constitutionally impermissible to vest him with the power to make a significant legal determination with far-reaching implications.

Reasoning that the arbitrary exercise of the power conferred upon the Registrar by Section 24(5) can have a large number of deleterious effects on the key stakeholders in the farming industry, the Court struck down the provision as being violative of Article 14.

Analysis:

In most respects, this case is a textbook application of the new doctrine of equality first articulated by the Apex Court in the celebrated case of E.P. Royappa versus State of Tamil Nadu.

From the standpoint of intellectual property law, however, the Court’s emphatic rejection of the argument that principles of natural justice and the Constitutional obligation to ensure that questions of law are answered by judges possessing legal expertise can be given a go-by so as to protect the commercial interests of breeders of new plant varieties is a welcome development.

At present, a significant number of crucial determinations in the realm of IP law are made by individuals and bodies lacking an iota of legal knowledge as we’ve noted on this Blog [see here, here and Professor Basheer’s letter to the DIPP on the importance of ensuring that complex legal determinations are made by legally trained individuals here].
Ergo, one hopes that this judgment will go a long way in ensuring that legal determinations are made by quasi judicial and judicial agencies, not executive officials.