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MEMORANDUM for RESPONDENT

NMC 33
2ndNAVRACHANA UNIVERSITY NVMCC

2nd NAVRACHANA UNIVERSITY NATIONAL VIRTUAL

MOOT COURT COMPETITION

Before

The Hon’ble High Court of Hima Pradesh

Invoking Art 226 of the Constitution of Indiana & Section 117A of the Patents Act,
1970

IN THE MATTER BETWEEN

ALPHA PHARMA. PVT. LTD.

(APPELLANT)

V/S.

STATE OF HIMA PRADESH & CONTROLLER OF PATENTS

(RESPONDENT)

- WRITTEN SUBMISSIONS FOR RESPONDENT -

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

TABLE OF CONTENTS

INDEX OF AUTHORITIES ........................................................................................................ 3

STATEMENT OF JURISDICTION............................................................................................ 10

STATEMENT OF FACTS ........................................................................................................... 11

ISSUES RAISED ....................................................................................................................... 13

SUMMARY OF ARGUMENTS ................................................................................................ 14

ARGUMENTS ADVANCED ..................................................................................................... 15

ISSUE A: WHETHER THE INVENTION OF ‘NOVAK’ MEDICINE SATISFIES THE TEST


OF PATENTABILITY UNDER SECTION 3 OF THE PATENT 1970 OR NOT? ................... 15

[A.1] TEST OF PATENTABILITY ..................................................................................... 15

[A.2] ATTRACTION OF S.3 OF PATENTS ACT, 1970 ...................................................... 20

[A.3] BIO PIRACY COMMITTED BY THE COMPANY .................................................. 22

ISSUE B: WHETHER THE COMPANY IS LIABLE TO GET COMPENSATION FOR


ARBITRARY CANCELLATION OF CONTRACT OR NOT? .............................................. 25

[B.1] THE PRESENT PETITION IS NOT MAINTAINABLE ............................................ 25

[B.2] PUBLIC INTEREST IS A VALID GROUND FOR TERMINATION OF CONTRACT


........................................................................................................................................... 30

[B.3] THE CONTRACT BECAME VOID ON ACCOUNT OF REVOCATION OF


CONTRACT DUE TO THE DOCTRINE OF FRUSTRATION .......................................... 34

[B.4] THE DOCTRINE OF PROMISSORY ESTOPPEL DOES NOT APPLY IN THE CASE
AT HAND ........................................................................................................................... 37

PRAYER .................................................................................................................................... 40

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

INDEX OF AUTHORITIES

LIST OF CASES

S.NO. CAUSE TITLE PAGE NO.

1 A.P. Transco V. Sai Renewable Power (P) Ltd, (2011) 11 SCC 34. 16,37

2 Ajanta Pharma Ltd V. Allergen Inc. 19

3 Aligarh Muslim University And Ors. V. Mansoor Ali Khan, (2000) 7 33


SCC 529.

4 All India Power Engineer Federation And Others V. Sasan Power 30


Limited And Others, (2017) 1 SCC 487.

5 Amrit Banaspati Co. Ltd. V. State Of Punjab, 1992 AIR 1075, 1992 37
SCR (2) 13.

6 Anz Grindlays Bank Limited & Ors., ... Vs Directorate Of Enforcement 35


& Ors.

7 Bajaj Auto Ltd V. TVS Motor Company, Civil Appeal No. 6472 Of 17
2004.

8 Bareilly Development Authority AndAnr. V. Ajay Pal Singh And Ors., 26


AIR 1989 SC 1076; (1989)2 SCC 116.

3
MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

9 Bishwanth Prasad Radhey Shyam V. Hindustan Metal Industries, AIR 15


192 SC 1444;

10 Bombay Agarwal Co v. Ramachand Diwanchand, AIR 1953 Nag. 154; 18

11 Central London Property Trust Ltd. v. High Trees Ltd., [1947] K.B 36
130.

12 Century Spinning And Mfg. Co. Ltd. v. Ulhasnasagar Municipal 36


Council, [1970] 3 SCR 854.

13 Chiron Corp. v. Murex Diagnostics, (1995) EWCA Civ J1102-9. 19

14 CIT. v. Premkumar (2008) 214 CTR 452; 35

15 Cricklewood Property & Investment Trust Ltd v. Leighton’s Investment 34


Trust Ltd, 1945 Ac 221 (Hl).

16 EMCO Ltd v. Malvika Steel Ltd & Ors, Cs(OS) No. 258/2000 38

17 Enercon v. Alloys Wobbens, Order No. 123/2013 P.30, 18

18 F.Hoffman La Roche V. Cipla, 148 (2008) DLT 598. 15

19 Grace Tank And Mfg Company V. Lined Air Pods Inc., 339 U.S. 605 17
(1950).

20 Gurjeewan Garewal (Dr.) V. Dr. Sumitra Dash (2004) 5 SCC 263. 32

21 In Kumari Shrilekha Vidyarthi And Ors. V. State Of Uttar Pradesh And 28,29
Ors., AIR 1991 SC 537; (1991)1 SCC 212.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

22 In Re E.I. Du Pont De Nemours & Co, 476 F.2d 1357. 19

23 Indian Vacuum Brake Co Ltd V. E.S. Luard, 92 Ind Cas 1008. 19,32

24 Joint Chief Controller Of Imports And Exports, 36

25 Joseph Constantine Steamship Line Ltd. V Imperial Smelting Corpn 34


Ltd, 1942 Ac 154 P. 168 (Hl).

26 Joshi Technologies International Inc V. UOI, Civil Appeal No. 6929 25


Of 2012.

27 K.L. Tripathi V. State Bank Of India, (1984) 1 SCC 43. 33

28 Kasturi Lal Lakshmi Reddy V. State Of Jammu And Kashmir And Anr., 29
Air 1980 Sc 1992; (1980)4 SCC 1.

29 King Pharmaceuticals Inc. V.Eon Labs Inc., 616 F.3d 1267. 18

30 Krell V Henry, [1903] 2 Kb 740. 34

31 Kumari Shrilekha Vidyarthi And Others V. State Of U.P., 1991 AIR 28


537, 1990 SCR Supl. (1) 625.

32 Life Insurance Corporation Of India V. Escorts Limited And Ors., AIR 29


1986 SC 1370: (1986)1 SCC 264 : (1986)59 Comp. Cas. 548 (SC).

33 M.P. Power Management Company Limited, Jabalpur …Appellant(S) 26


Versus M/S. Sky Power Southeast Solar India Private Limited &
Others.
34 M.P. Power Management Company Limited, Jabalpur V. M/S. Sky 26

5
MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

Power Southeast Solar India Private Limited & Others.

35 M/S. Becton Dickinson And Co. V. Controller Of Patents & Designs, 19


Oa/7/2008/Pt/Del.

36 M/S. Motilal Padampat Sugar Mills Co. Ltd. V.. The State Of U.P. And 36
Others, AIR 1979 SC 621.

37 Madras V.. Amin Chand Mutha, 1966 SCR 262. 36

38 Malloch V. Aberdeen Corpn, (1971) 1 WLR 1578. 32

39 Michigan Rubber (India) Limited V. State Of Karnataka And Others, 30


(2006) 10 SCC 1.

40 Monnet Ispat & Energy V. Union Of India, (2012) 11 SCC, Paras. 37


I82.I-182.7.

41 Novartis A G V. Union Of India, (2013) 13 S.C.R. 148. 15

42 O.J.S.C. Corporation Transstroy Vs Government Of Karnataka And 29


Ors., Air 2005 Kant 351, 2005 (4) Karlj 292.

43 Pooja Construction Company Vs Jetpur Navagadh Nagar Palika, 29


C/Sca/8616/2018.

44 Pennwalt Corporation V. Dunrad Wayland Inc., 833 F.2d 931. 17

45 Radhakrishna Agarwal And Ors. V. State Of Bihar And Ors, AIR 1977 26
SC 1496; (1977)3 SCC 457; (1977)3 SCR 249.

46 Raj Prakash V. Mangat Ram, JLR (1977) 2 Del 412. 17

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

47 Rama Krishna Rice And General Mills Through Its Partner Narinder 28
Kumar Nayyar And Others V. State Of Punjab And Ors.,CWP-10353-
2021 (O&M).

48 Raunaq International Limited I.V.R. Construction Ltd. And Others, 30,31


(1999) 1 SCC 492.

49 Ravi Kamal Bali V. Kala Tech And Ors., (2008) 38 PTC 435; 17

50 Satyabrata Ghose V Mugneeram Bangur & Co., AIR 1954 SC 44: 1954 17
SCR 310.

51 Shiv Mohan Lal V. State Of U.P. And Ors., 1993 (1) Awc 196 (Fb). 25

52 State Of Gujarat V. M.P. Shah Charitable Trust, (194) 3 SCC 552. 25

53 State Of Rajasthan Vs. Shamsher Singh, 1985(Supp.) SCC 416; 35


Special Reference No. 1 Of 2002 Reported In 2002(8) SCC 237].

54 Standard Chartered Bank And Others V. Directorate Of Enforcement 35


And Others [(2005) 4 SCC 530].

55 Sterling Abrasives Ltd, V. Assessee, Ita No.2243 And 2244/ 35


AHD/2008.

56 Suganmal Vs State Of Madhya Pradesh And Ors., AIR 1965 Sc 1740, 28


1965 56 ITR 84 Sc, 1965 16 STC 398 Sc

57 Tata Cellular V. Union Of India, (1994) 6 SCC 651. 30

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

58 Tata Motors Ltd. V. State Of Maharashtra And Ors, Air 2004 Sc 3618. 36

59 Taylor V. Cladwell, (1863) 3 B&S 826; 122 Er 309. 34

60 U.P. Sasta Galla Vikreta Parishad V. State Of U.P. And Ors., 1992 (2) 25
Efr 655.

61 Viveka Nand Sethi V. Chairman, J&K Bank Ltd., (2005) 5 SCC 337. 32

62 Vls Finance Ltd And Another V Cit And Another (2007) 289 Itr 286 35
(Del).

63 Winans V. Denmead, 56 U.S. 330 (1853). 17

64 Yahoo V. Rediff, W.P.No. 4462 Of 2010. 18

65 Young And Neilson V. Rosenthal &Co.,(1884) 1 Pat. 19

BOOKS REFERRED

1. Elizabeth Verkey, Law Of Patents, Eastern Book Company, (2 nd Ed) Chapter 2, Pg. 26.
2. Avtar Singh, Company Law, (17thEdn. 2021).
3. Wade's Administrative Law (5th Edn., Pp. 472-75).
4. Chitty On Contracts, 28thEdn, 838.

STATUTES/CONVENTIONS

1. The Companies Act, 2013.


2. The Indian Constitution, 1950.
3. The Patents Act of 1970.
4. TRIPS Agreement.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

5. WIPO.
6. Biological Diversity Act, 2002.
7. Convention on Biological Diversity.

DATABASES

1. Cambridge University Press e-Journal


2. Hein Online
3. Manupatra
4. SCC online
5. LexisNexis- Advance

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

STATEMENT OF JURISDICTION

The APPELLANTS, Alpha Pvt Ltd has approached this Hon’ble High Court through section 117 A 1
of the Patent’s Act, 1970 read in pursuance with the Tribunals Reform Act, 2021. Further, the
Appellants approached the Hon’ble High Court through a writ filed under Article 226 2 of the
Constitution of Indiana. In light of speedy justice, this Hon’ble Court has clubbed both the
petitions.

THE PRESENT MEMORANDUM PUTS FORTH THE FACTS, CONTENTIONS AND


ARGUMENTS ON BEHALF OF THE RESPONDENTS IN THIS INSTANT CASE

1
117A. Appeals to High Court.
(1) Save as otherwise expressly provided in sub-section (2), no appeal shall lie from any decision, order or direction
made or issued under this Act by the Central Government, or from any act or order of the Controller for the purpose
of giving effect to any such decision, order or direction.
(2) An appeal shall lie to the High Court from any decision, order or direction of the Controller or Central
Government under section 15, section 16, section 17, section 18, section 19, section 20, sub- section (4) of section 25,
section 28, section 51, section 54, section 57, section 60, section 61, section 63, section 66, sub-section (3) of section
69, section 78, sub-sections (1) to (5) of section 84, section 85, section 88, section 91, section 92 and section 94.
(3) Every appeal under this section shall be in the prescribed form and shall be verified in such manner as may be
prescribed and shall be accompanied by a copy of the decision, order or direction appealed against and by such fees as
may be prescribed.
(4) Every appeal shall be made within three months from the date of the decision, order or direction, as the case may
be, of the Controller or the Central Government or within such further time as the [High Court] may, in accordance
with the rules made by it allow. ‖
2
226. Power of High Courts to issue certain writs
(1) Notwithstanding anything in Article 32 every High Court shall have powers, throughout the territories in relation
to which it exercise jurisdiction, to issue to any person or authority, including in appropriate cases, any Government,
within those territories directions, orders or writs, including writs in the nature of habeas corpus, mandamus,
prohibitions, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III
and for any other purpose

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

STATEMENT OF FACTS

BACKGROUND

Indiana is renowned for its vast biodiversity and the Eastern and Western Ghats are its prominent
biodiversity hotspots. It values its rich cultural diversity and traditional knowledge, cherished by
its rural and forest-dwelling indigenous communities. Indiana is party to several crucial
international agreements, including the Paris Convention, the Convention on International Trade
in Endangered Species, the Indigenous and Tribal Peoples Convention, and the Convention on
Biological Diversity, along with the Nagoya Protocol.

PARTIES

Tongso is a semi-nomadic community and a dominant tribe in the state of Hima Pradesh well-
known for their rich knowledge on medicinal plants of the region. Alpha Pvt. Ltd. is a
pharmaceutical company registered under the Company Act, 2013. Scientists of the company
upon researching the Eastern areas were amazed by the properties of the Peri leaves as an energy
booster and procured further information from the tribes.

PATENT FOR NOVAK

Scientists confirmed the tribal claims through independent research, leading to the development of
the 'Novak' tablet from Peri leaves. The tablet showed faster stamina-boosting effects compared to
consuming the leaves raw. Dr. Simon, an employee of Alpha Pvt. Ltd, filed a patent for 'Novak,'
asserting it as a novel product derived from Peri leaves. The patent was granted on October 31,
2022, and the patent rights were assigned to Alpha Pvt. Ltd as per their contractual agreement.
Within five months of its launch, Novak became Alpha Pvt. Ltd.’s top-selling medicine,
generating significant profits. The company then inked a deal with the government of Hima
Pradesh to establish a new unit near the Eastern Ghats starting April 1, 2023.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

REVOCATION OF THE PATENT

The NGO 'Unnati' uncovered Alpha Private Limited's plans for 'Novak' and launched an
awareness campaign among the tribal community, urging against the exploitation of their
traditional knowledge. The contract announcement triggered public outcry, with the tribal
community demanding the cancellation of the patent and the contract to preserve biodiversity and
their traditional knowledge. The NGO filed a post-grant opposition to the 'Novak' patent under
section 25(2). The controller accepted the notice, leading to the revocation of the patent. Alpha
Pharma Pvt. Ltd appealed the decision in the High Court of Hima Pradesh.

CANCELLATION OF THE GOVERNMENT CONTRACT

In response to the considerable public dissent concerning the contractual arrangement with Alpha
Pharma, the Government of Hima Pradesh officially announced the termination of the factory
setup contract during a press conference, citing the paramount public interest as the primary
motive for this decision. Aggrieved by the abrupt termination of the contract and alleging
reputational damage, the company filed a writ under Article 226 of the Constitution before the
High Court of Hima Pradesh. The company seeks compensation from the state, contending that
both the NGO and the state harbour ulterior motives and are needlessly entangling the company in
litigation.

CLUBBING OF PETITIONS

The high court of Hima Pradesh clubbed the two cases, i.e, appeal against the revocation of patent
of drug Novak and the writ petition filed pursuant to the cancellation of the government contract.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

ISSUES RAISED

ISSUE A:

WHETHER THE INVENTION OF ‘NOVAK’ MEDICINE SATISFIES THE TEST OF PATENTABILITY UNDER

SECTION 3 OF THE PATENT 1970 OR NOT?

ISSUE B:

WHETHER THE COMPANY IS LIABLE TO GET COMPENSATION FOR ARBITRARY CANCELLATION OF

CONTRACT OR NOT?

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

SUMMARY OF ARGUMENTS

ISSUE A:

WHETHER THE INVENTION OF ‘NOVAK’ MEDICINE SATISFIES THE TEST OF PATENTABILITY UNDER
SECTION 3 OF THE PATENT 1970 OR NOT?

It is humbly submitted by the counsel on behalf of the Respondent before this Hon’ble Court of
Hima Pradesh, that the drug ‘Novak’ does not satisfy the test of patentability and therefore the
action of controller of patents in revoking the patent, in light of the post grant opposition raised by
the NGO, Unnati is valid. This argument is dealt in 3 prongs: Firstly, Test of Patentability.
Secondly, Attraction of S.3 of Patents Act, 1970 and thirdly, bio-piracy committed by the
Company.

ISSUE B:

WHETHER THE COMPANY IS LIABLE TO GET COMPENSATION FOR ARBITRARY CANCELLATION OF


CONTRACT OR NOT?

It is the humble contention of the 1st Respondent, The State of Huma Pradesh that the writ petition
filed under Article 226 in order to claim compensation of the termination of the government
contract is not maintainable and this Hon’ble High Court of Hima Pradesh does not have the
required jurisdiction of hear the matter. The counsel submits that the present petition is not
maintainable and public Interest is a valid ground for termination of contract. Further, THE contract
became void on account of revocation of contract due to the doctrine of frustration and the
Doctrine of Promissory Estoppel does not apply in the case at hand.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

ARGUMENTS ADVANCED

ISSUE A: WHETHER THE INVENTION OF ‘NOVAK’ MEDICINE SATISFIES THE


TEST OF PATENTABILITY UNDER SECTION 3 OF THE PATENT 1970 OR NOT?

¶ 1. It is humbly submitted by the counsel on behalf of the Respondent before this Hon’ble Court
of Hima Pradesh, that the drug ‘Novak’ does not satisfy the test of patentability and therefore
the action of controller of patents in revoking the patent, in light of the post grant opposition
raised by the NGO, Unnati is valid. This argument is dealt in 3 prongs:
[A.1] Test of Patentability;
[A.2] Attraction of S.3 of Patents Act, 1970 and;
[A.3] Bio-piracy committed by the Company.

[A.1] TEST OF PATENTABILITY

¶ 2. The test of patentability can be satiated if all 3 of the following essentials are obeyed
 The invention should be novel
 The invention should have an inventive step or should be non-obvious and
 The invention should be capable of industrial applicability

A.1.1 Novelty and Prior Art

¶ 3. The concept of novelty in intellectual property jurisprudence lays down that only what is new
at the time of the filing of the application for a patent is patentable. Out of all the tests, novelty
is of core value.3
¶ 4. Section 2(1)(l) of the Patents Act, 19704 defines novelty under “new invention” as

3
ELIZABETH VERKEY, LAW OF PATENTS, EASTERN BOOK COMPANY, (2nd ed) chapter 2, pg. 26.
4
Section 2(1)(l) of Patents Act, 1970, § 25(4), No. 39, Acts of Parliament, 1970 (India).; Section. 2(g) of The Indian
Patents (Amendment) Act, 2005.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

“any invention or technology which has not been anticipated by publication in any
document or used in the country or elsewhere in the world before the date of filing of
patent application with complete specification i.e, the subject matter has not fallen in
public domain or that it does not form part of the state of the art;”

¶ 5. According to European Patent Convention (EPC), Article 545 defines ‘state of art’ as

“Everything made available to the public by means of a written or oral


description, by use, or in any other way before the date of filing of the European
Patent Application.”

¶ 6. Novelty denotes ‘new’, something that is not known to the public. The nature of the invention
should be such way that it has not been brought to the notice or knowledge of the public
before the priority date. Otherwise, it becomes a matter of common knowledge thus losing its
capability to be patented.
¶ 7. In the case of Novartis A G v. Union of India6, the Indian Patent Office rejected Novartis
patent application for anti-cancer drug ‘Glivec’ (Imatinib Mesylate). The Patent was denied on
the grounds that the drug did not meet the requirements of novelty and inventive step as
stipulated under Sec.3(d) of the Patents Act of 19707. The case went through several legal
battles and appeals, but ultimately the patent was cancelled.
¶ 8. The knowledge of public about an invention has been a question of law in catena of cases.
Justice. Baldwin had laid down requisites for the publication to be construed as ‘within the
knowledge of the public’
 A work of public character intended for general use and
 Within reach of public
¶ 9. Publication does not depend on the degree of dissemination; communication to a single
member of the public without inhibiting fetter is enough to amount to making available to the
public. There is no need to even show that a member of the public has actually seen the
document. Any documented is regarded having been published, and thus forms part of the
state of art if it can be inspected as of right by the public.8

5
Art.54, European Patent Convention.
6
Novartis A G v. Union of India, (2013) 13 S.C.R. 148; Bishwanth Prasad Radhey Shyam v. Hindustan Metal
Industries, AIR 192 SC 1444; F.Hoffman la Roche v. CIPLA, 148 (2008) DLT 598.
7
Patents Act, 1970, § 3(d), No. 39, Acts of Parliament, 1970 (India).
8
ELIZABETH VERKEY, LAW OF PATENTS, EASTERN BOOK COMPANY, (2nd ed) chapter 2, pg. 47.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

¶ 10. Traditional Knowledge Digital Library is one of the remarkable initiatives taken by the
Council of Scientific and Industrial Research, owing to the plethora of cases such as the
patenting for wound healing properties of turmeric at the USPTO and the patent granted by the
European Patent Office (EPO) on the anti-fungal properties of Neem. The big leagues
commercially exploited the deep rooted traditional knowledge in India and acquired patents
for the same. However, the patents were revoked later on the ground of common knowledge.
¶ 11. This library is a collection of databases of traditional knowledge in the State of Indiana.
The knowledge in this data base is construed to be of common use by the public and thus
cannot be patented. As on date, more than 4.54 Lakh formulations/practices have been
transcribed into the TKDL database. 9 The copies of TKDL database are made available to the
controller of patents throughout Indiana in order to aid them in the processes of grant of
patent. In addition, it is also made accessible to 16 Patent Offices located beyond the territory
of Indiana.
¶ 12. The applicant of the Patent through a complete specification filed to the Controller of
Patents, is required to distinctively show the novelty of the invention. If the invention is based
off traditional knowledge as given in the database of the library, then it attracts Section 3(p) of
the Patents Act, 197010 by which the controller shall not grant the patent. Thus, the Traditional
Knowledge Digital Library acts as a first of kind prior-art database.

A.1.2. Lack of inventive step


¶ 13. Section 2(1)(ja) of the Patents Act, 197011 defines ‘inventive step’ as
“a feature of an invention that involves technical advance as compared to the existing
knowledge or having economic significance or both and that makes the invention not
obvious to a person skilled in the art;”
¶ 14. In accordance with the aforementioned definition, the latency of inventive step can be
determined with the presence of the following elements:
 Technical advance or economic significance
 Test of non-obviousness

A.1.2.1 Technical advancement or economic significance


¶ 15. To understand the presence of a technical advancement it is necessary to draw a
comparison between the traditional knowledge with the present drug.

9
Traditional Knowledge Digital Library.
10
Patents Act, 1970, § 3(p), No. 39, Acts of Parliament, 1970 (India).
11
1970, § 2(1)(ja), No. 39, Acts of Parliament, 1970 (India).

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

¶ 16. It is of the humble contention by the Respondents that the Appellants have merely changed
the form nevertheless the component remains the same. There is no literal use of the
traditional knowledge but rather an indirect use in achieving the same result.
¶ 17. The case of Graver Tank and MFG Company v. Lined Air Pods Inc12., laid down the
principle in which, if the substituted element performs substantially the same function in
substantially the same way to obtain the same result, then the invention cannot construe to
have made an advancement simply by substitution.
¶ 18. However, the case of Ravi Kamal Bali v. Kala Tech and Ors.13, laid down a concrete
method to analyse the advancement in an invention and thereby its infringement through a
triple test.
 Same usage and purpose
 Same nature of material and
 Same principle
¶ 19. The court in the aforementioned case held that when there is no substantial difference in
the constructional and functional aspect of the product, it held that the change in the main
structure of the body alone does not indicate the presence of new invention or technical
advancement.
¶ 20. In the case of Raj Prakash v. Mangat Ram14, the Delhi High Court held that the pith and
substance of the invention must be paid heed to and that the decision shall not get lost in
detailed specifications.
¶ 21. In the case of Bajaj Auto Ltd v. TVS Motor Company15, the court applied purposive
construction of claims and had stressed on finding the ‘substance’ of the invention, ignoring
the mere certain omissions or additions of parts.
¶ 22. With the assistance of the facts given it is stated that the Company (Alpha Pharma Pvt Ltd)
upon experiencing the effects of the Peri leaves as an energy booster, convinced the tribal
people to disclose more about the plant. Upon learning the properties of the plant, they simply
developed it into a drug.16

12
Grace Tank and MFG Company v. Lined Air Pods Inc., 339 U.S. 605 (1950); Pennwalt Corporation v. Dunrad
Wayland Inc., 833 F.2d 931.
13
Ravi Kamal Bali v. Kala Tech and Ors., (2008) 38 PTC 435; Winans v. Denmead, 56 U.S. 330 (1853).
14
Raj Prakash v. Mangat Ram, ILR (1977) 2 Del 412.
15
Bajaj Auto Ltd v. TVS Motor Company, Civil Appeal No. 6472 of 2004.
16
Moot Proposition.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

¶ 23. The mere use of knowledge disclosed to the Company by the tribe and consequentially the
making of a drug, which does not exhibit any new property or enhancement in the present
property of boosting the Stamina, cannot contain to be novel.
¶ 24. This fact significantly contradicts any claim suggesting that Novak does not fall under the
realm of traditional knowledge. The utilization of Peri leaves in making Novak demonstrates
its deep-rooted connection to traditional practices and affirms its status as a product firmly
grounded in traditional wisdom.
¶ 25. The patent can be defeated if it is not a new manufacturer or improvement, thereby,
indicating that qua manufacture it was being indulged in by others prior to the date of the
patent.17

A.1.2.2. Test of Non-Obviousness

¶ 26. The Patents Act, 1970 allude to obviousness by stating that the invention shall not be
obvious to the persons ‘skilled in art’.
¶ 27. The question of who regards to be a person skilled in art was dealt by IPAB in Enercon v.
Alloys Wobbens18, in which it held that
“We do not intend to visualize a person who has super skills, but we do not think
we should make this person skilled in the art to be incapable of carrying out
anything but basic instructions.”
¶ 28. The person skilled in art needn’t be a person extremely skilled in the field of work, but
rather a person who has knowledge of the technical advancement as on the date and the skill to
perform experiments with the knowledge of the State of the Art.
¶ 29. However, merely the invention being obvious to the person is not enough. It should be
reasonably expected out of the person skilled in art to implement the knowledge in making the
invention successfully.
¶ 30. In the case of Enercon V. Alloys Wobben19, the Court held the role of reasonable
expectation of success as

“coherent expectation from the prior art to the obviousness or in other words, the
reasonable expectation of success embedded in the prior art which motivates the

17
Bombay Agarwal Co v. Ramachand Diwanchand, AIR 1953 Nag. 154; King Pharmaceuticals Inc. v.Eon Labs Inc.,
616 F.3d 1267.
18
Enercon v. Alloys Wobbens, Order No. 123/2013 p.30, Yahoo v. Rediff, W.P.No. 4462 of 2010.
19
Id.

19
MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

skilled person to reach the invention, is the most crucial determining factor in
ascertaining inventive step.”
¶ 31. In the case of M/s. Becton Dickinson and Co. v. Controller of Patents & Designs20, the
Court observed that
“Obviousness cannot be avoided simply by showing of some degree of unpredictability in
the art so long as there was a reasonable probability of success.”
¶ 32. Thus the persons skilled in art, if access the traditional knowledge of the tribe can
reasonably attain success in making the drug Novak by implementing their skills of
experience.

A.1.3. Lack of industrial applicability and utility


¶ 33. It is imperative for the invention to be industrially applicable. Patent grants exclusive
rights to the patentee21, when the subject matter of the patent is a product to prevent third
parties, who do not have his consent, from the act of making, using, offering for sale, selling
or importing for those purposes that produce in India.
¶ 34. The Drug in question requires an unit to be set up in places in and near the availability of
Peri leaves. The cancellation of contract by the Government has rendered the drug to be
industrially inapplicable. The industrial inapplicability cause to become the inventive to be
unpatentable. 22
¶ 35. When such exclusive rights are conferred on a single party, it cannot merely acquire the
patent and not produce the product. The patent must be put into utility23.
¶ 36. The usefulness of the drug can be questioned merely based on the fact that it is not a
requirement or of any necessity to lead a healthy life. There are plenty of alternatives available
in the market which when administered can produce the same effect.

[A.2] ATTRACTION OF S.3 OF PATENTS ACT, 1970

¶ 37. Section 3 of the Patents Act, 197024 deals with ‘inventions not patentable’. The
concomitant test of patentability it whether the invention in question is patentable or not.

20
M/s. Becton Dickinson and Co. v. Controller of Patents & Designs, OA/7/2008/pt/DEL; Ajanta Pharma Ltd v.
Allergen Inc.
21
Patents Act, 1970, 48, No. 39, Acts of Parliament, 1970 (India); Article 28, TRIPS.
22
In re E.I. du Pont de Nemours & Co, 476 F.2d 1357.
23
Indian Vacuum Brake Co Ltd v. E.S.Luard, 92 Ind Cas 1008; Young and Neilson v. Rosenthal & Co.,(1884) 1 Pat;
Chiron Corp. V. Murex Diagnostics, (1995) EWCA Civ J1102-9.
24
Patents Act, 1970, § 3, No. 39, Acts of Parliament, 1970 (India).

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

¶ 38. It is of the humble contentions by the Respondents that the drug Novak attracts various
provisions under Sec.3 thus making it unpatentable.

A.2.1. Section 3(b)


¶ 39. Section 3(b) states that
“an invention the primary or intended use or commercial exploitation which could
be contrary to public order or morality or which causes serious prejudice to
human, animal or plant life or health or the environment.”
¶ 40. The drug in question is made from the Peri Leaves which are found in and around the
geographical area where the Tongso Community reside. Owing to the high demand in the drug
just in a matter of 5 months25, it is reasonable to conclude that the drug if patented will cause
more destruction to the resources present there and ultimately posing to be an undeniable
threat to the tribal community that depend on these resources for their day to day living. 26

A.2.2. Section 3(p)


¶ 41. Section 3(p) of the Patents Act, 1970 states that
“an invention which in effect, is traditional knowledge or which is an aggregation
or duplication of known properties of traditionally known component or
components.”
then such invention cannot be patented.
¶ 42. In order to comprehend the reasons behind the non-patentability of the drug, it becomes
imperative to delve into the understanding of the encompassing concept known as traditional
knowledge. Grasping the full essence and scope of traditional knowledge provides a
fundamental groundwork to explore and analyse the intricacies that render Novak ineligible
for patent protection.
¶ 43. There is no concrete definition for traditional knowledge.
Sec.2(w) of the Protection, Conservation and Effective Management of Traditional Knowledge
Relating to Biological Diversity Rules, 200927gave a broader definition

“It means the collective knowledge of a traditional community including of a group of


families, on a particular subjects or a skill and passed down from generation to
generation, either orally or in written form, relating to properties, uses and characteristics

25
Moot Proposition.
26
Article 27(2), TRIPS.
27
Section 2(w), The Protection, Conservation and Effective Management of Traditional Knowledge Relating to
Biological Diversity Rules, 2009.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

of plant and animal genetic resources; agricultural and healthcare practices, food
preservation and processing techniques ad devices developed from traditional materials;
cultural expressions, products and practices such as weaving patterns, colours, dyes,
paintings, poetry, folklore, dance and music; and all other products or processes
discovered through a community process including by a member of the community
individually but for the common use of the community.”

¶ 44. However, WIPO provided with a narrower definition

“know-how skills, innovations, practices, teachings or learning” and it is “developed,


sustained and passed on from generation to generation within a community, often forming
part of its cultural or spiritual identity.”28

¶ 45. According to S.3(p), the drug in question falls under the realm of traditional knowledge
and that it is simply a duplication of the known properties of traditionally known components
to produce the same effect.
¶ 46. Thus, the Drug Novak cannot be patented.

[A.3] BIO PIRACY COMMITTED BY THE COMPANY

¶ 47. Bio-piracy is the term used to express the expropriation and licensing of genetic resources
which are common property (freely available) in the developing countries, without any
recognition or recompense to the countries or communities who have traditionally used and
developed them. 29
¶ 48. Pharmaceutical bio-piracy is a term used generally to describe the legal practice by
pharmaceutical companies exploiting the traditional knowledge of medicine belonging to the
indigenous people. Indiana and other developing countries are rich in bio-resources and
Traditional Knowledge thus making them the targets and victims of bio-piracy.
¶ 49. Such misappropriation of TK results in grant of patent for the invention to the ‘first to file’
rather than to the ‘first to invent’. It involves making profit from freely available natural
products by copying techniques used daily for generations by local people in order to feed or
take care of themselves. The bio-pirates in addition to not giving any profits or proper benefits

28
WIPO.
29
Dr.Prankrishna Pal, Intellectual Property Rights in India, General issues and implications, (Deep & Deep
Publications Pvt.Ltd, 2008).

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

to the knowledge holders, they exploit the resources within and around the tribe in greed of
more knowledge which plausibly fetches them more profit.
¶ 50. In the famous Hoodia case, the San tribe of South Africa had a medicinal plant that they
used to consume on long hunting trips to prevent exhaustion. A professor got hold of this
knowledge by interacting and winning the trust of the tribe. This was later patented and sold
as a cure for obesity. In 1995, South African Council of Scientific & Industrial Research
(CSIR) patented Hoodia’s appetite-suppressing element (P57) and hence, its potential cure for
obesity. In 1997 they licensed P57 to British Biotech Company, Phytopharm. In 1998, Pfizer
acquired the rights to develop and market P57 as a potential slimming drug and cure for
obesity (a market worth more than £ 6 billion), from Phytopharm for $ 32 million. The San
people eventually learned of this exploitation of their traditional knowledge, and in June 2001,
launched legal action against South African CSIR and the pharmaceutical industry on grounds
of bio-piracy. They claimed that their traditional knowledge had been stolen, and the South
African CSIR had failed to comply with the rules of the Convention on Biodiversity, which
requires the prior informed consent of all stakeholders, including the original discoverers and
users. Phytopharm conducted extensive enquiries but were unable to find any of the
knowledge holders. The remaining San were apparently at the time living in a tented camp
1500 miles away from their tribal lands. The South African CSIR claimed that they had
planned to inform the San of the research and share the benefits, but wanted to make sure that
the drug proved successful. The two sides entered into negotiations for a benefit-sharing
agreement, despite complications regarding who should be compensated: the person who
originally shared the information, their descendants, the tribe, or the entire country. The San
are nomads spread across four countries. It is still a mystery as to who will receive the benefits
of the agreement and there is a bigger question of what happens after the patent expires.
¶ 51. In the case of Wapishana Tribes, dwellers of the Amazon jungles between Brazil and
Guyana have banned visits by just anyone masquerading as a ‘researcher’ to their village
owing to a bitter experience of bio-piracy.
¶ 52. The case of Ayahuasca is one of the examples of Bio- Piracy. For generations, Shamans of
indigenous tribes throughout the Amazon basin have processed the bark of B.caapi Mort. to
produce a ceremonial drink known as “Ayahuasca”. The shamans use this in religious and
healing ceremonies to diagnose and treat illness, meet with spirits and divine future. Loren
Miller obtained US Plant Patent (No.5, 751 issued in 1986), granting him rights over an
alleged variety of B.caapi Mort. which he had collected from a domestic garden in Amazon

23
MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

and had called “Da Vine” and was analysing it for potential medicinal properties. The
Coordinating Body of Indigenous Organisations of the Amazon Basin (COICA), which
represents more than 400 indigenous tribes in the Amazon region, along with others, protested
about a wrong patent that was given on a plant species. They protested that Ayahuasca had
been known to natives of the Amazon rainforest and it is used in traditional medicine and
cultivated for that purpose for generations, so Miller could not have discovered it, and should
not have been granted such rights, which in effect, appropriated indigenous traditional
knowledge. On re-examination, USPTO revoked this patent on 3rd November 1999. However,
the inventor was able to convince the USPTO on 17th April 2001, and the original claims were
reconfirmed and the patent rights restored to the innovator. In the end, the tribal people’s
traditional knowledge was exploited by an individual to make profit.
¶ 53. The conflict between individual rights and community rights has little or no chance of an
acceptable solution within the mechanism of IPR. Solutions, if any, lie in the approach
perfected by traditional communities, i.e. a holistic approach that seeks to balance survival in a
sustainable manner. In the present case however, the tribe was not even credited for their
knowledge and the company has not even considered establishing an ABS agreement. The
company’s motive has been clear in its endeavor to find out the drug’s market value and
granting of patent by clearly misusing the tribal knowledge should be deemed erroneous.
¶ 54. The grant of patent in such a case also paves way for similar companies to exploit the
resources and the indigenous tribes in the name of furtherance of research.
¶ 55. To prevent Bio-Piracy, the Government introduced the Biological Diversity Act, 2002
through the Convention on Biological Diversity signed at Rio De Janeiro on the 5 th of June,
1992.
¶ 56. Owing to all the aforementioned limbs of arguments, the counsel for the Respondents
humbly contends that the Controller of Patents revoking the patent by exercising his power
through Section 25(2) of the Patents Act, 197030 is valid.

30
Patents Act, 1970, § 25(4), No. 39, Acts of Parliament, 1970 (India).

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

ISSUE B: WHETHER THE COMPANY IS LIABLE TO GET COMPENSATION FOR


ARBITRARY CANCELLATION OF CONTRACT OR NOT?

¶ 57. It is the humble contention of the 1st Respondent, The State of Huma Pradesh, that the writ
petition filed under Article 226 in order to claim compensation of the termination of the
government contract is not maintainable and this Hon’ble High Court of Hima Pradesh does
not have the required jurisdiction of hear the matter.

The counsel submits that:

[B.1] The present petition is not maintainable;

[B.2] Public Interest is a valid ground for termination of contract;

[B.3] The contract became void on account of revocation of contract due to the doctrine of
frustration, and;

[B.4] The Doctrine of Promissory Estoppel does not apply in the case at hand.

[B.1] THE PRESENT PETITION IS NOT MAINTAINABLE

B.1.1Writ Petition cannot be filed for non-statutory contracts

¶ 58. The Supreme Court of India has consistently held that no writ remedy is available for non-
statutory contract since the court may not ordinarily examine a contract it unless the action has
some public law is attached to it.31 It has further held that under Article 226 of the Constitution
of India, the court should bear in mind the fact that the power to issue prerogative writs under
Article 226 of the Constitution is plenary in nature and is not limited by any other provisions
of the Constitution.32
¶ 59. Further ,their Lordships has held that that no writ remedy is available where there is a
Non Statutory Contract .

31
No Writ Remedy In Non -Statutory Contract, AMLEGALS, https://amlegals.com/no-writ-remedy-in-non-statutory-
contract/#.
32
Id.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

¶ 60. In State of Gujarat v. M.P. Shah Charitable Trust33, it reiterated the principles that if the
matter is governed by a contract, the writ petition is not maintainable since it is a public law
remedy and is not available in private law field, for example, Civil Appeal where the matter
is governed by a non-statutory contract .
¶ 61. The court in the case of Joshi Technologies International Inc v. UOI34held that the High
Court should have exercised discretionary jurisdiction under Article 226 of the Constitution.
First, the matter is in the realm of pure contract. It is not a case where any statutory contract is
awarded. It further held that it was purely a contractual matter with no element of public law
involved thereunder.
¶ 62. Therefore, discretion lies with the High Court which under certain circumstances can
refuse to exercise. It also follows that under the following circumstances, “normally”, the
Court would not exercise such a discretion:
1. The Court may not examine the issue unless the action has some public law character
attached to it.
2. Whenever a particular mode of settlement of dispute is provided in the contract, the High
Court would refuse to exercise its discretion under Article 226 of the Constitution and relegate
the party to the said mode of settlement, particularly when settlement of disputes is to be
resorted to through the means of arbitration.
3. If there are very serious disputed questions of fact which are of complex nature and require
oral evidence for their determination.
4. Money claims per se particularly arising out of contractual obligations are normally not to
be entertained except in exceptional circumstances.
¶ 63. In Shiv Mohan Lal v. State of U.P. and Ors.35 and U.P. Sasta Galla Vikreta Parishad V.
State of U.P. and Ors.36, it was held that in case of a non-statutory contract, writ jurisdiction
can be invoked only if there lies a violation of Article 14 or some other provisions of the
Constitution. However, in case of a statutory contract, a writ will lie not only for the
constitutional grounds but also on the ground if there is violation of any statutory provision or
provisions relating to that contract.

33
State of Gujarat v. M.P. Shah Charitable Trust, (194) 3 SCC 552.
34
Joshi Technologies International Inc v. UOI, Civil Appeal No. 6929 OF 2012.
35
Shiv Mohan Lal v. State of U.P. and Ors., 1993 (1) AWC 196 (FB).
36
U.P. Sasta Galla Vikreta Parishad V. State of U.P. and Ors., 1992 (2) EFR 655.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

¶ 64. The Supreme Court in the case of Radhakrishna Agarwal and Ors. v. State of Bihar and
Ors.37, held, after the State or its agents have entered into the field of the ordinary contract, the
relations are no longer governed by the constitutional provisions but by the legally valid
contract which determines rights and obligations of the parties inter se. No question arises of
violation of Article 14 or of any other constitutional provision when the State or its agents,
purporting to act within this field, perform any act. In this sphere, they can only claim rights
conferred upon them by contract and are bound by the terms of the contract only.
¶ 65. In the case of Bareilly Development Authority and Anr. v. Ajay Pal Singh and Ors.38, it is
held that, there is a line of decisions where the contract entered into between the State and the
persons aggrieved is non-statutory and purely contractual and the rights are governed only by
the terms of the contract, no writ or order can be issued under Article 226 of the Constitution
of India so as to compel the authorities to remedy a breach of contract pure and simple.
¶ 66. A contract would not become statutory simply because it is for construction of a public
utility and it has been awarded by a statutory body. A statute may expressly or impliedly
confer power on a statutory body to enable it to discharge its functions. Dispute arising out of
the terms of such contracts or alleged breaches have to be settled by the ordinary principles of
law of contract. The fact that one of the parties to the agreement is statutory or public body
will not of itself affect the principles to be applied. 39
¶ 67. The disputes about the meaning of a covenant in a contract or its enforceability have to be
determined according to the usual principles of the Contract Act. Every act of a statutory body
need not necessarily involve an exercise of statutory power. Statutory bodies like private
parties have power to contract or deal with property. Such activities may not raise any issue of
public law.
¶ 68. Therefore, it is most humbly submitted that the contract and it’s alleged breach can only be
questioned by the High Court via a writ petition when there is an arbitrary decision and the
same is in violation of Article 1440.

37
Radhakrishna Agarwal and Ors. v. State of Bihar and Ors, AIR 1977 SC 1496 : (1977)3 SCC 457 : (1977)3 SCR
249.
38
Bareilly Development Authority and Anr. v. Ajay Pal Singh and Ors., AIR 1989 SC 1076 : (1989)2 SCC 116.
39
M.P. Power Management Company Limited, Jabalpur v. M/S. Sky Power Southeast Solar India Private Limited &
Others.
40
Art.14, Indian Const., 1950.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

B.1.2 The decision is not arbitrary


¶ 69. The counsel seeks to reiterate that the government is free to get into contracts and its
decision in that regard can only be questioned in light of it being in violation od article 14 of
the Constitution. However, in the present matter, the decision was most just, fair and in light of
the public interest at large. The same would be elaborated in subsequent sub-isses, however, to
substantiate, the contract became void due to the revocation of the patent of ‘Novak’ by the
Controller of patents and therefore, the government and the company had lost the object of the
contract.
¶ 70. Setting up of a factory for a patent which was received at the expense of the tribals lead to
wide public outrage resulting into a protest. The tribal community at the forefront of the
protest demanded cancellation of patent, cancellation of contract in the interest of the
conservation of biodiversity and of the traditional knowledge system of the indigenous
community. 41

B.1.3. Cannot claim compensation at the high court


¶ 71. The dismissal of this writ petition it is open to the petitioner to agitate his rights, if any,
flowing from the contract, according to the principles of Contract Act, before the appropriate
forum, including the validity of the termination of the contract, and seek the reliefs to which
they are entitled to in law. The forum which determines the rights of the parties to the contract
shall do so in accordance with law and on merits, without in any way being influenced by any
observations made by this Court in this order.42

B.1.4 Alternative remedy


¶ 72. The existence of an alternate remedy, is, undoubtedly, a matter to be borne in mind in
declining relief in a Writ Petition in a contractual matter. Again, the question as to whether the
Writ Petitioner must be told off the gates, would depend upon the nature of the claim and
relief sought by the petitioner, the questions, which would have to be decided, and, most
importantly, whether there are disputed questions of fact, resolution of which is necessary, as
an indispensable prelude to the grant of the relief sought.

41
Moot Proposition, Para 6.
M.P. Power Management Company Limited, Jabalpur …Appellant(S) Versus M/S. Sky Power Southeast Solar India
42

Private Limited & Others.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

¶ 73. Undoubtedly, while there is no prohibition, in the Writ Court even deciding disputed
questions of fact, particularly when the dispute surrounds demystifying of documents only, the
Court may relegate the party to the remedy by way of a civil suit.
¶ 74. In a case the State is a party to the contract and a breach of a contract is alleged against the
State, a civil action in the appropriate Forum is, maintainable. 43 But this is not the end of the
matter. Having regard to the position of the State and its duty to act fairly and to eschew
arbitrariness in all its actions, resort to the constitutional remedy on the cause of action, that
the action is arbitrary, is permissible.44
¶ 75. However, it must be made clear that every case involving breach of contract by the State,
cannot be dressed up and disguised as a case of arbitrary State action. While the concept of an
arbitrary action or inaction cannot be cribbed or confined to any immutable mantra, and must
be laid bare, with reference to the facts of each case, it cannot be a mere allegation of breach
of contract that would suffice.
¶ 76. What must be involved in the case must be action/inaction, which must be palpably
unreasonable or absolutely irrational and bereft of any principle. An action, which is
completely malafide, can hardly be described as a fair action and may, depending on the facts,
amount to arbitrary action. The question must be posed and answered by the Court and all we
intend to lay down is that there is a discretion available to the Court to grant relief in
appropriate cases.45
¶ 77. Normally petitions solely praying for the refund of money against the State by a writ of
mandamus are not to be entertained. The aggrieved party has the right of going to the civil
court for claiming the amount and it is open to the State to raise all possible defences to the
claim, defences which cannot, in most cases, be appropriately raised and considered in the
exercise of writ jurisdiction.'46
¶ 78. A monetary claim arising from a contract may be successfully urged by a writ applicant
but the premise would not be a mere breach of contract. Being part of public law, the case
must proceed on the basis of there being arbitrariness vitiating the decision. The matter should
not fall within a genuinely disputed question of facts scenario. The dispute which must be
capable of being resolved on a proper understanding of documents which are not in dispute
may furnish a cause of action in a writ court.

43
Id.
44
Kumari Shrilekha Vidyarthi and others v. State of U.P., 1991 AIR 537, 1990 SCR Supl. (1) 625.
45
Rama Krishna Rice and General MillsThrough its Partner Narinder Kumar Nayyar and Others v. State of Punjab
and Ors.,CWP-10353-2021 (O&M).
46
Suganmal vs State Of Madhya Pradesh And Ors.,AIR 1965 SC 1740, 1965 56 ITR 84 SC, 1965 16 STC 398 SC

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

¶ 79. Therefore it is the humble contention of the respondent that questions such as whether the
process adopted or decision made by the authority is mala fide or intended to favour someone;
or whether the process adopted or decision made is so arbitrary and irrational that the court
can say: "the decision is such that no responsible authority acting reasonably and in
accordance with relevant law could have reached"; and whether the public interest is affected
are to be perused by the Hon’ble Court. If the answers to the above questions are in negative,
then there should be no interference under Article 226.47
¶ 80. No mala fides are alleged against the respondents. In the circumstances, the respondents
have terminated the contract as per the stipulation contained in the contract itself, in public
interest. The action of the respondents is fair, just, reasonable and do not offend Article 14 of
the Constitution and has been exercised keeping in mind the public interest. Therefore, no case
for judicial review of the action of the respondents in passing the impugned orders is made
out.48

[B.2] PUBLIC INTEREST IS A VALID GROUND FOR TERMINATION OF CONTRACT

B.2.1. Public interest is of utmost importance

¶ 81. There is an obvious difference in the contracts between private parties and contracts to
which the State is a party. Private parties are concerned only with their personal interest
whereas the State while exercising its powers and discharging its functions, acts indubitably,
as is expected of it, for public good and in public interest.49
¶ 82. The Supreme Court in the case of Kasturi Lal Lakshmi Reddy v. State of Jammu and
Kashmir and Anr.50, held the constitutional power conferred on the Government cannot be
exercised by it arbitrarily or capriciously or in an unprincipled manner, it has to be exercised
for the public good. Every activity of the Government has a public element in it and it must
therefore, be informed with reason and guided by public interest. Every action taken by the
Government must be in public interest, the Government cannot act arbitrarily and without
reason and if it does, its action would be liable to be invalidated.

47
Pooja Cosntruction Company vs JetpurNavagadh Nagar Palika, C/SCA/8616/2018 .
48
O.J.S.C. Corporation Transstroy vs Government Of Karnataka And Ors., AIR 2005 Kant 351, 2005 (4) KarLJ 292.
49
In Kumari Shrilekha Vidyarthi and Ors. v. State of Uttar Pradesh and Ors., AIR 1991 SC 537 : (1991)1 SCC 212.
50
Kasturi Lal Lakshmi Reddy v. State of Jammu and Kashmir and Anr., AIR 1980 SC 1992 : (1980)4 SCC 1.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

¶ 83. A Constitution Bench of the Supreme Court in the case of Life Insurance Corporation of
India v. Escorts Limited and Ors.51, held, if the action of the State is related to contractual
obligation or obligations arising out of the tort the Court may not ordinarily examine it unless
the action has some public law character attached to it.
¶ 84. In All India Power Engineer Federation and others v. Sasan Power Limited and
others52, for the proposition that the Court must be mindful of public interest
¶ 85. In Michigan Rubber (India) Limited v. State of Karnataka and Others53after referring to
Tata Cellular v. Union of India54and Raunaq International Limited v. I.V.R. Construction
Ltd. and Others55, the Court inter alia held as follows: - “35. As observed earlier, the Court
would not normally interfere with the policy decision and in matters challenging the award of
contract by the State or public authorities. In view of the above, the appellant has failed to
establish that the same was contrary to public interest and beyond the pale of discrimination
or unreasonable.”
¶ 86. Further, the legal position on the subject was summed up after a comprehensive review
and principles of law applicable to the process for judicial review and identified the following
principles emerge:
(1) the basic requirement of Article 14 is fairness in action by the State, and non- arbitrariness
in essence and substance is the heartbeat of fair play.
(2) These actions are amenable to the judicial review only to the extent that the State must act
validly for a discernible reason and not whimsically for any ulterior purpose.
(3) If the State acts within the bounds of reasonableness, it would be legitimate to take into
consideration the national priorities;
¶ 87. Therefore, applying the above legal principles, the judicial review can be made only when
there are ulterior motives by the government. Further, the courts must take into consideration
the national priorities.
B.2.2 Arguendo, if the contract was not terminated, there would have been destruction of
public interest
¶ 88. It is humbly contented that if the government did not terminate the contract in the press
conference, it could have resulted in mass protest and gravely affected public peace and

51
Life Insurance Corporation of India v. Escorts Limited and Ors., AIR 1986 SC 1370 : (1986)1 SCC 264 : (1986)59
Comp. Cas. 548 (SC).
52
All India Power Engineer Federation and others v. Sasan Power Limited and others, (2017) 1 SCC 487.
53
Michigan Rubber (India) Limited v. State of Karnataka and Others, (2006) 10 SCC 1.
54
Tata Cellular v. Union of India, (1994) 6 SCC 651.
55
Raunaq International Limited I.V.R. Construction Ltd. and Others, (1999) 1 SCC 492.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

tranquillity. Government contracts, unlike private ones must keep in mind the effect on the
public policy.
¶ 89. There can certain objects which on grounds of public policy can invalidate contracts for
convenience and may include objects which are injurious to good government either in the
field of domestic or foreign affairs, objects injurious to morality and objects economically
against the public policy. 56
¶ 90. In Raunaq International Ltd, the case involved award of contract for the purpose of
Thermal Power Station. In fact, the Appeals in this court were maintained against the grant of
an interim order against the appellant to whom the contracts stood awarded. The case also
involved relaxation of the criteria which was based on valid principles it was found. It was
further found that the construction of two Thermal Power Units was being held up due to the
dispute.
¶ 91. The Court held that because the State or a public body or an agency of the State enters into
such a contract, there could be, in a given case, an element of public law or public interest
involved even in such a commercial transaction. Further, the elements of public interest are:57
(1) Public money would be expended for the purposes of the contract.
(2) The goods or services which are being commissioned could be for a public purpose, such
as, construction of roads, public buildings, power plants or other public utilities.
(3) The public would be directly interested in the timely fulfilment of the contract so that the
services become available to the public expeditiously.
(4) The public would also be interested in the quality of the work undertaken or goods
supplied by the tenderer. Poor quality of work or goods can lead to tremendous public
hardship and substantial financial outlay either in correcting mistakes or in rectifying defects
or even at times in redoing the entire work — thus involving larger outlays of public money
and delaying the availability of services, facilities or goods, e.g., a delay in commissioning a
power project, as in the present case, could lead to power shortages, retardation of industrial
development, hardship to the general public and substantial cost escalation.
¶ 92. When a writ petition is filed in the High Court challenging the award of a contract by a
public authority or the State, the court must be satisfied that there is some element of public
interest involved in entertaining such a petition.

56
Chitty on Contracts, 28thEdn, 838.
57
Id.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

¶ 93. Therefore, it is clear from the above observations of this Court, once the State or an
instrumentality of the State is a party of the contract, it has an obligation in law to act fairly,
justly and reasonably which is the requirement of Article 14 of the Constitution of India.
Therefore, if by the impugned repudiation of the claim of the appellants the first respondent as
an instrumentality of the State has acted in contravention of the above said requirement
of Article 14, then we have no hesitation in holding that a writ court can issue suitable
directions to set right the arbitrary actions of the first respondent.

B.2.3 Company is profit oriented

¶ 94. It is the Respondent’s humble contention that the patenting of an invention is with the goal
of commercialising and profiting of the same. Considering that the patent granted to Novak
was not even a novel invention, there will not be able effect to the public due to the cancelling
of contract for factory set up.
¶ 95. Further, the setting up of factory on the Eastern Ghats amidst public outcry will only
aggravate the issue and the same is not desirable.

B.2.4 Principles of natural justice does not make the decision to terminate null and void

¶ 96. In Viveka Nand Sethi v. Chairman, J&K Bank Ltd.58“ the court held that the principle of
natural justice, it is trite, is no unruly horse. When facts are admitted, an enquiry would be an
empty formality. Even the principle of estoppel will apply. 59The principles of natural justice
are required to be complied with having regard to the fact situation obtaining therein. It cannot
be put in a straitjacket formula. It cannot be applied in a vacuum without reference to the
relevant facts and circumstances of the case.”
¶ 97. The High Court, therefore, must be held to have erred in law in holding that the principles
of natural justice were required to be complied with.
¶ 98. In Malloch v. Aberdeen Corpn.60, court held that a breach of procedure cannot give a
remedy in the courts, unless behind it there is something of substance which has been lost by
the failure as the court does not act in vain.
¶ 99. In this behalf, it is most humbly submitted that even if it is found by the court that there is
a violation of principles of natural justice, the courts have held that it may not be necessary to

58
Viveka Nand Sethi v. Chairman, J&K Bank Ltd., (2005) 5 SCC 337.
59
Gurjeewan Garewal (Dr.) v. Dr. Sumitra Dash (2004) 5 SCC 263.
60
Malloch v. Aberdeen Corpn, (1971) 1 WLR 1578.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

strike down the action and refer the matter back to the authorities to take fresh decision after
complying with the procedural requirement in those cases where non-grant of hearing has not
caused any prejudice to the person against whom the action is taken.
¶ 100. Therefore, every violation of a facet of natural justice may not lead to the conclusion that
the order passed is always null and void. The validity of the order has to be decided on the
touchstone of “prejudice”. The ultimate test is always the same viz. the test of prejudice or the
test of fair hearing
¶ 101. In Aligarh Muslim University and Ors. v. Mansoor Ali Khan61, the aforesaid authorities
were relied upon, and the answer given was that there is no absolute rule, and prejudice must
be shown depending on the facts of each case. The principle that in addition to breach of
natural justice, prejudice must also be proved has been developed in several cases.
¶ 102. In K.L. Tripathi v. State Bank of India62 Sabyasachi Mukharji, J. also laid down the
principle that not mere violation of natural justice but de facto prejudice had to be proved. It
was observed “[I]t is not possible to lay down rigid rules as to when the principles of natural
justice are to apply, nor as to their scope and extent. There must also have been some real
prejudice to the complainant; there is no such thing as a merely technical infringement of
natural justice. The requirements of natural justice must depend on the facts and circumstances
of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject
matter to be dealt with, and so forth.”63
¶ 103. Therefore, it is most humbly submitted that as the contract was frustrated, there was no
need to provide for a notice and the decision to terminate the contract was subsequent to the
destruction of the subject matter

[B.3] THE CONTRACT BECAME VOID ON ACCOUNT OF REVOCATION OF


CONTRACT DUE TO THE DOCTRINE OF FRUSTRATION

B.3.1 Doctrine of frustration

¶ 104. The counsel humbly submits that a contract to do an act which, after the contract is made,
becomes impossible, by reason of some act the promissor could not prevent, unlawful,
becomes void when the act becomes impossible of unlawful. 64

61
Aligarh Muslim University and Ors. v. Mansoor Ali Khan, (2000) 7 SCC 529.
62
K.L. Tripathi v. State Bank of India, (1984) 1 SCC 43.
63
Wade's Administrative Law (5th Edn., pp. 472-75).
64
S.56 Contract Act, 1872.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

¶ 105. It is humbly submitted by the respondents that termination of the contract is not a breach,
but a mere discharge due to frustration. Frustration applies in special case of discharge of
contract by an impossibility of performance arising after the contract was made. 65
¶ 106. In this case, the occurrence of this intervening event or change in circumstances, i.e., the
ban on importation is so fundamental as to be regarded by law both as striking at the root of
the agreement, and as entirely beyond what was contemplated by the respondent when they
entered into the contract.66 The prevailing approach is that if parties want to excuse themselves
from liability on account of a supervening event, they should protect themselves through a
force majeure clause. Nevertheless, in Taylor v. Cladwell67, where the performance had
become impossible due to an external event, the Court held that the contract stands discharged
though there was not any force majeure clause.
¶ 107. The doctrine of frustration is a special case of discharge of contract by an impossibility of
performance arising after the contract was made. 68 Frustration ends the contract automatically.
According to Viscount Simon LC, frustration is an occurrence of an intervening event of
change in circumstances so fundamental as to regarded by the law bot as striking at the toot of
the agreement, and as entirely beyond what was contemplated by the parties when they
entered into the contract.69
¶ 108. From analysing precedents such as Taylor v Caldwell70 and Krell v Henry71, the doctrine
of frustration comes into play in two types of situations, first, where the performance is
physically cut off, and, second, where the object has failed. In Indiana, both kinds of
frustration comes under the ambit of section 56. 72
¶ 109. The Supreme Court in the case of Satyabrata Ghose v Mugneeram Bangur& Co.73 held
that the term ‘impossible’ has not been used in the literal sense of physical or literal sense but
that the performance of an act becomes impracticable and useless from the point of view of
the object and purpose which the parties had in view.

65
Joseph Constantin Steamship Line Ltd v Imperial Smelting Corpn Ltd 1942 AC 154 P.168 (HL).
66
Cricklewood Property & Investment Trust Ltd v. Leighton’s Investment Trust Ltd, 1945 AC 221 (HL).
67
Taylor v. Cladwell, (1863) 3 B&S 826; 122 ER 309.
68
Joseph Constantine Steamship Line Ltd. v Imperial Smelting Corpn Ltd, 1942 AC 154 p. 168 (HL).
69
Id.
70
Id.
71
Krell v Henry, [1903] 2 KB 740.
72
Avtar Singh, Company Law, (17th ed 2021).
73
Satyabrata Ghose v MugneeramBangur& Co., AIR 1954 SC 44: 1954 SCR 310.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

¶ 110. Further, if an untoward event of change of circumstances totally upsets the very foundation
upon which the parties rested their bargain, it can very well be said that the promisor finds it
impossible to do the act which he promised to do.

B.3.2 Frustration due to destruction of subject-matter

¶ 111. It is most humbly submitted that through the facts of the case, it is evident that the
government contract was entered in 1st April 2023 for setting up of a factory unit near the
eastern ghats, so as to produce the patented product. However, considering the post-grant
opposition by the NGO, Unnati, the patent was revoked and therefore, the production of the
drug became impossible subsequent to the entering of the contract, i.e., on 1 st July, 2023.74
¶ 112. Therefore, with the destruction of the patent rights, there is a grave change in circumstance
and therefore, the contract becomes void.

B.3.3 Les Non Cogit Ad Impossible

¶ 113. "'Lex Non Cogitadimpossibilia' is an age old maxim meaning that the law does not compel
a man to do which he cannot possibly perform. The law itself and its administration is
understood to disclaim as it does in its general aphorisms, all intention of compelling
impossibilities, and the administration of law must adopt that 75. The Apex court has applied
the doctrine of impossibility of performance i.e., Lex non cogitadimpossibilia, in numerous
cases. 76
¶ 114. The maxim springs into action when there is significant change in the nature of the
outstandingcontractual rights and/or obligations from what the parties could reasonably have
contemplated at thetime of execution, that it would be unjust to hold them to the literal sense
of its stipulations in the newcircumstances, in that case, the law must declare the parties
discharged from further obligations.

74
Moot Proposition, Para 7.
75
Sterling Abrasives Ltd,v.Assessee, ITA No.2243 AND 2244/ Ahd/2008.
76
State of Rajasthan vs. Shamsher Singh, 1985(Supp.) SCC 416; Special Reference No. 1 of 2002 reported in 2002(8)
SCC 237]; Anz Grindlays Bank Limited & Ors., ... vs Directorate Of Enforcement & ... on 5 May, 2005; Standard
Chartered Bank and Others v. Directorate of Enforcement and Others [(2005) 4 SCC 530]; CIT. V. Premkumar (2008)
214 CTR 452; VLS Finance Ltd And Another v CIT And Another (2007) 289 ITR 286 (Del).

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

B.3.4 Absence of substantial deprivation/ detriment

¶ 115. The Respondents submit before this Hon’ble Court that, for it to be declared as a
fundamental breach ofcontract, there must be substantial deprivation or detriment caused to
the Petitioner. The Secretariat’sCommentary on the 1978 Draft states that ‘the determination
whether the injury is substantial must bemade in light of the circumstances of each case, for
example, the monetary value of the contract, themonetary harm caused by the breach, or the
extent to which the breach interferes with other activitiesof the injured party.’ 77
¶ 116. This is a criterion which looks to the harm suffered by the injured party. However, when
compensationfor damages can serve as a remedy for non-performance, this should be an
indication of the fact thatthere is no detriment. What matters most in commercial relations are
economic results and not theformal fulfilment of obligations. 78

[B.4] THE DOCTRINE OF PROMISSORY ESTOPPEL DOES NOT APPLY IN THE CASE
AT HAND

¶ 117. Section 115 of the Indian Evidence Act lays the doctrine of estoppels. The doctrine of
estoppels, under it wide canvass, has been branched out to include promissory estoppels which
has found its origin in the Common Law. 79
¶ 118. The ingredients for the application of this doctrine are:
1. That there was a representation or promise made in regard to something to be done
in the future,
2. That the representation or promise was intended to affect the legal relationship of
the parties and to be acted upon accordingly, and,
3. That it is, one on which, the other side has, in fact, acted to its prejudice.
¶ 119. The doctrine has been affirmed by this Hon’ble Court in multitude of cases. 80 In the case
of Century Spinning and Mfg. Co. Ltd. v. Ulhasnasagar Municipal Council81 , it has been
held by the Supreme Court that the doctrine of promissory estoppels applies to private
individuals and entities as well.

77
Secretariat Commentary on 1978 Draft Art. 23 (draft counterpart of CISG Art. 25), Comment 3, available at
http://www.cisg.law.pace.edu.
78
P. Enderlein and D. Maskow, “International Sales Law”, available at www.heinonline.com.
79
Central London Property Trust Ltd. v. High Trees Ltd., [1947] K.B 130.
80
M/s. Motilal Padampat Sugar Mills Co. Ltd. v.. The State of U.P. and others, AIR 1979 SC 621, Joint Chief
Controller of Imports and Exports, Madras v.. Amin Chand Mutha, 1966 SCR 262, Tata Motors Ltd. v. State of
Maharashtra and Ors, AIR 2004 SC 3618.
81
Century Spinning and Mfg. Co. Ltd. v.Ulhasnasagar Municipal Council, [1970] 3 SCR 854.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

B.4.1 Promissory estoppel and public policy

¶ 120. The doctrine of estoppel is equitable and therefore, must yield to equity and can be
invoked in the larger public interest. If a promise or agreement is opposed to public policy, it
cannot be enforced. Further, it cannot be extended or applied where the promise has been
obtained by playing fraud on the constitution. 82
¶ 121. Additionally, with regards to public interest, the Supreme Court held in the case of A.P.
Transco v. Sai Renewable Power (P) Ltd.83that the doctrine is evolved by equity to prevent
injustice. Hence, even where it is applicable, the government can still show that equity lies in
its favour and thus can discharge heavy burden placed on it. In sucg a case, the court may not
enforce the doctrine against the government.

B.4.2 There is no change of position

¶ 122. The supreme court in the case of Monnet Ispat & Energy v. Union of India84 laid down
certain guidelines which would guide courts where the doctrine of promissory estoppel is
invoked.
¶ 123. One such essential is that the promisee must show that by acting on the promise made by
the other party, he altered his position. Thereby, the change of position by the promise is a sine
qua non for the applicability of the doctrine. Additionally, it is necessary that a clear, sound
and positive foundation is laid in the petition. Bald assertions, averments or allegations
without any supporting material are not sufficient to press into aid the doctrine.
¶ 124. It is the respondent’s humble contention that the company fails to provide any evidence
that there was a change of position. The government contract was entered on 1st April, 2023 to
set up a factory unit for the production of the drug Novak. 85 There are no further information
to prove that the promise acted on it and that the result of the act lead to monetary damages.
Therefore, considering that there is no change of position, the respondent is not liable to pay
any compensation as it is not estopped by its promise and neither is in unjustly enriched by the
act of the petitioner company.

82
Amrit Banaspati Co. Ltd. v. State of Punjab, 1992 AIR 1075, 1992 SCR (2) 13.
83
A.P. Transco v. Sai Renewable Power (P) Ltd, (2011) 11 SCC 34.
84
Monnet Ispat& Energy v. Union of India, (2012) 11 SCC, paras. I82.I-182.7.
85
Moot Proposition, Para 5.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

B.4.3 The destruction of goodwill and reputation was due to the company’s own actions

¶ 125. In regular circumstances, any decision that leads to a destruction of goodwill or reputation
of the innocent party may be compensated through payment of damages. However, as per the
timeline of events, an NGO ‘Unnati’ working for the protection of interest of the tribal
community in the Eastern Ghat came to know about the activities of Alpha Private Limited
and its plan of coming of the drug ‘Novak’ and started awareness campaign in the state among
the tribal community against the commercial exploitation and misuse of their traditional
knowledge.
¶ 126. Therefore, there was already destruction of their reputation and public relations. After the
announcement of the contract of factory set-up, there was a wide public outrage resulting into
a protest. The revocation of the patent by the controller of patents furthered the proving of the
allegations and that subsequently affected the goodwill of the company.
¶ 127. The court in the case of EMCO Ltd v Malvika Steel Ltd & Ors86held that an honest
estimation, even guesswork, of damages once a breach had been proved. The very decision
says that the assessment of damages must be a fair one.
“Simply plucking a number out of thin air will not do.”
¶ 128. Therefore, the cancellation of the contract is not the root cause of any bad reputation of the
company and the company is not entitled to any damages for the same.

86
EMCO Ltd v Malvika Steel Ltd & Ors, CS(OS) No. 258/2000.

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MEMORANDUM for RESPONDENT 2ndNAVRACHANA UNIVERSITY NVMCC

PRAYER

WHEREFORE in the light of issues raised, arguments advanced and authorities cited, it is most
humbly prayed before this Hon’ble Court that it may on the basis of the prior and foregoing
written submission, be pleased to adjudge and declare that:

 To dismiss the present petition as they are devoid of all merits

AND/OR pass any other order/orders as this Hon’ble Court deems fit and proper in the
circumstances of the given case and in the interest of Justice, Equity and Good Conscience. And
for this act of kindness and justice the RESPONDENT shall be duty bound and forever pray.

ALL OF WHICH IS MOST HUMBLY AND RESPECTFULLY SUBMITTED

S/d-

COUNSELS FOR THE RESPONDENT

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