TEAM CODE: _ST-14_

13TH SURANA & SURANA INTERNATIONAL TECHNOLOGY LAW MOOT COURT

COMPETITION

10TH OCTOBER TO 12TH OCTOBER, 2014

SYMBIOSIS LAW SCHOOL, PUNE

BEFORE
THE HON’BLE HIGH COURT OF JUDICATURE AT MUMBAI

DISPUTE RELATING TO
RECOVERY OF MONIES & PROTECTION OF PROPRIETARY RIGHTS

CIVIL CASE NO._____/2014

[Under § 20 & §15 of the Civil Procedure Code, 1908]

In the Matter of

INDICO…..…………………………………………………………………………(APPLICANT)

V.

CARCO…………………………………………………………………………...(RESPONDENT)

MEMORIAL for APPLICANT

~ INDICO ~
 ~I~

TABLE OF CONTENTS

INDEX OF AUTHORITIES ...........................................................................................................IV

STATEMENT OF JURISDICTION ........................................................................................ VIII

STATEMENT OF FACTS ..............................................................................................................IX

STATEMENT OF ISSUES ...............................................................................................................X

SUMMARY OF ISSUES..................................................................................................................XI

ARGUMENTS ADVANCED ........................................................................................................... 1

ISSUE I: THE SUIT IS MAINTAINABLE IN THE HON’BLE COURT ............... 1

[A] THE HON’BLE COURT HAS THE JURISDICTION TO TRY THE INSTANT CASE .............. 1

(a) The Hon’ble Court has Territorial Jurisdiction ........................................................ 1

(b) The Hon’ble Court has Pecuniary Jurisdiction ........................................................ 2

[B] THE INSTANT CASE NEED NOT BE REFERRED TO ARBITRATION ................................... 2

(a) The doctrine of ‘Balance of Convenience’ favours Indico ................................... 2

(b) The dispute is not Arbitrable........................................................................................ 3

(c) The ‘Dispute Resolution Clause’ is not an ‘Ouster Clause’.................................. 3

[C] THE PRINCIPLES OF ‘CONFLICT OF LAWS’ ARE APPLICABLE FOR THE HON’BLE
COURT TO ASSUME JURISDICTION................................................................................................ 3

(a) The ‘Proper Laws’ for the Contract would be Indian Laws .................................. 4

(b) The Hon’ble Court is ‘Forum Conveniens’ for the Parties ................................... 4

ISSUE II: THE CONTRACT BETWEEN THE PARTIES IS VALID AND

BINDING ............................................................................................................................................ 5

[A] THERE IS NO ILLEGAL CONSIDERATION. ........................................................................ 5

(a) The Codes do not violate the Notification issued by the Government of India 5

(b) The Notification issued by the Government is Regulatory ................................... 5

[B] THE SOFTWARE CODES DO NOT VIOLATE PRIVACY ..................................................... 6

MEMORIAL for APPLICANT TABLE OF CONTENTS

 ~ II ~

(a) The Software Codes are not violative of the IT Act, 2000 .................................... 6

(b) The Software Codes used cannot be termed as Invasive ....................................... 7

ISSUE III: CARCO CANNOT TERMINATE THE CONTRACT ............................... 7

[A] THERE IS NO BREACH OF CONTRACT ON PART OF INDICO ........................................... 7

(a) Time is not the ‘Essence of the Contract’ ................................................................. 8

(b) Use of Third Party IPR cannot be a ground to Terminate the Contract.............. 8

(c) There is no Misrepresentation on the part of Indico ............................................... 9

(d) Carco has partially accepted the Software Codes.................................................... 9

[B] CIRCUMSTANCES CREATED BY CARCO LED TO NON-PERFORMANCE OF

CONTRACTUAL OBLIGATIONS .................................................................................................... 10

(a) A Reasonable Time should have been granted in lieu of the additions made . 10

(b) There is ‘Unconscionable Bargain’ on part of Carco ........................................... 10

(c) In Arguendo, there is Peremptory Termination of Contract by Carco .............. 11

ISSUE IV: THE OWNERSHIP OF THE INTELLECTUAL PROPERTY RIGHTS

IN THE SOFTWARE CODES LIE WITH INDICO ......................................................... 11

[A] COPYRIGHT CAN BE GRANTED TO THE SOFTWARE CODES ......................................... 11

(a) The Software Code are covered under the Indian Copyright Act, 1957 .......... 11

(b) The ‘Test of Originality’ is satisfied ........................................................................ 12

[B] CARCO CANNOT CLAIM COPYRIGHT OVER THE SOFTWARE CODES ......................... 12

(a) The Contract is a ‘Contract for Service’ ................................................................. 12

(b) Indico granted Non-Exclusive IPR to Carco .......................................................... 13

ISSUE V: THERE ARE REMEDIES AVAILABLE TO INDICO UNDER THE

INDIAN LAWS............................................................................................................................... 13

[A] COMPENSATION IN THE NAME OF ACTUAL DAMAGES SUFFERED BY INDICO .......... 13

(a) There was a Breach of Contract on the part of Carco .......................................... 14

(b) Indico is entitled to receive Compensation ............................................................. 14

[B] INJUNCTION ON CARCO FOR USING THE ‘SOFTWARE CODES’ ................................... 14

MEMORIAL for APPLICANT TABLE OF CONTENTS

 ~ III ~

(a) There is a Prima Facie case of Indico ..................................................................... 15

(b) The ‘Balance of Convenience’ is in favour of Indico .......................................... 15

(c) There would be an Irreparable Loss to Indico if Injunction not be granted .... 15

PRAYER ............................................................................................................................................. XII

MEMORIAL for APPLICANT TABLE OF CONTENTS

 ~ IV ~

INDEX OF AUTHORITIES

ERROR! REFERENCE SOURCE NOT FOUND.

ERROR! REFERENCE SOURCE NOT FOUND.

Error! Reference source not found.

MEMORIAL for APPLICANT INDEX OF AUTHORITIES

 ~V~

STATEMENT OF JURISDICTION

The APPLICANT (Indico) humbly submits the dispute, concerning ‘Recovery of

Monies and Protection of Proprietary Rights’, to the Territorial and Pecuniary Jurisdiction
of the Hon’ble High Court of Judicature at Mumbai, Maharashtra, pursuant to § 20 and § 15
of the Civil Procedure Code, 1908, respectively. Thereby, the APPLICANT submits this
memorial which sets forth the facts & the laws on which the claims are based.

MEMORIAL for APPLICANT STATEMENT OF JURISDICTION

 ~ VI ~

STATEMENT OF FACTS

BACKGROUND
The APPLICANT (Indico) is a Pvt. Ltd. Co. incorporated in India. The RESPONDENT
(Carco) is Detroit based US Co.

The Government of India issued a notification that manufacture and use of

microchip used in Smart TV or any such invasive technology, only with the prior
permission of the Government after detailing the end use of such a device

THE CONTRACT
The parties entered into an agreement in January 2014, which mentioned the ‘Scope
of Work’ (SOW) regarding manufacture of software codes, involving a consideration of
USD 7 Million. A substantial part of the work was required to be done at Pune, India,
where Indico’s Company was situated but installation, commissioning and approval was to
be done at Detroit using Carco’s systems.

Within about 10 days of signing of the Agreement, Carco added an additional SOW,
after confirming of the Indico’s ability to deliver the same. Indico confirmed that it was
capable of performing and agreed to include the same for the same cost.

THE DISPUTE
Indico submitted preliminary details as per the agreement and Carco paid the first
two instalments which was 30% of the total consideration. There was delay in complying
with the 2nd milestone due to the additional SOW. The delayed submission was not
accepted by Carco which claimed that the submissions were not as per specifications.

After several exchange of communications between the parties and modifications to

submissions by Indico, Carco issued a termination letter to Indico within 10 days of
submission of the 2nd milestone and stopped further payments. Carco raised a claim for
refund of monies already paid by it, on the ground that Indico had misrepresented its ability
to deliver requirements under SOW.

THE SUIT
Indico has, thereby, filed the instant suit for recovery of monies and for protection
of their copyright to the software codes submitted by them to Carco.

MEMORIAL for APPLICANT STATEMENT OF FACTS

 ~ VII ~

STATEMENT OF ISSUES

¶ 1. Whether the suit is maintainable in the Hon’ble Court.

¶ 2. Whether the Contract between the parties is valid and binding.
¶ 3. Whether Carco can terminate the Contract.
¶ 4. Whether the ownership of the Intellectual Property Rights in the Software Codes lie
with Indico.
¶ 5. Whether there are remedies available to Indico under the Indian Laws.

MEMORIAL for APPLICANT STATEMENT OF ISSUES

 ~ VIII ~

SUMMARY OF ISSUES

¶ 6. WHETHER THE SUIT IS MAINTAINABLE IN THE HON’BLE COURT.

The instant suit is maintainable as the Hon’ble Court has Territorial and Pecuniary
Jurisdiction over the instant case. Moreover, the principle of ‘Conflict of Laws’ would be
applicable with no requisite to refer the matter to arbitration.

¶ 7. WHETHER THE CONTRACT BETWEEN THE PARTIES IS VALID AND BINDING.

The Contract between the parties is valid and binding as there was no illegal
consideration on the part of Indico and the software codes are not invasive of privacy.

¶ 8. WHETHER CARCO CAN TERMINATE THE CONTRACT.

There was no breach of contract on part of Indico. Whereas, Carco created such
circumstances that led to the non-performance of the contract., thereby, not giving the right
to Carco to terminate the contract.

¶ 9. WHETHER THE OWNERSHIP OF THE INTELLECTUAL PROPERTY RIGHTS IN THE

SOFTWARE CODES LIE WITH INDICO.

The software codes are a subject matter of Copyright. Further, Indico only granted
non-exclusive rights to Carco. Thus, the ownership of IPR in the codes lie with Indico.

¶ 10. WHETHER THERE ARE REMEDIES AVAILABLE TO INDICO UNDER THE INDIAN LAWS.

The innocent party, who entered into an agreement, in case of breach of contract is
entitled to various remedies. Therefore, Indico is entitled to claim compensation in the
name of actual damage suffered by it and also to claim injunction on Carco for using the
submissions made.

MEMORIAL for APPLICANT SUMMARY OF ISSUES

 ~1~

ARGUMENTS ADVANCED

¶ 11. THE SUIT IS MAINTAINABLE IN THE HON’BLE COURT.

¶ 12. The Civil Procedure Code gives Civil Courts the powers to decide its own jurisdiction
and questions regarding maintainability of the suit.1 It is submitted that, firstly, the Hon’ble
Court has jurisdiction [A]; secondly, the instant case need not be referred to arbitration [B];
and, thirdly, the principles of ‘Conflict of Laws’ are applicable for the Hon’ble Court to
assume jurisdiction [C].

¶ 13. THE HON’BLE COURT HAS THE JURISDICTION TO TRY THE INSTANT CASE

¶ 14. The applicant has approached the Hon’ble Court under § 202 and § 153, invoking the
territorial and pecuniary jurisdiction on the Hon’ble Court. Thereby, it is put forth that, the
Hon’ble Court has Territorial Jurisdiction [a]; and, the Hon’ble Court has Pecuniary
Jurisdiction [b].

THE HON’BLE COURT HAS TERRITORIAL JURISDICTION

¶ 16. The facts pleaded, having nexus and relevance to the dispute, constitutes ‘cause of action’
and in a given case when a part or whole of the cause of action arises within territorial

jurisdiction of a Court, the said Court would have jurisdiction to entertain such suit.4

¶ 17. For the purposes of § 205, the contract shall be deemed to be entered at the place where
offer was received and acceptance was posted.6 Further, the cause of action also arises at the
place, (i) where the contract was to be performed; or, (ii) where the money was required to be
paid.7 If it is repudiated, then at the place where such repudiation is received.8

¶ 18. In the instant case, the manufacturing of the goods as well as the repudiation of the
contract happened at Pune. Thus, the cause of action arose in the territorial jurisdiction of this

1
The Code of Civil Procedure, No. 5 of 1908Error! Reference source not found., O7 R11 & O14 R2.
2
Id., § 20.
3
Id., § 15.
4
Union of India v. Adani Exports Ltd., A.I.R. 2002 S.C. 126Error! Reference source not found..
5
The Code of Civil Procedure, No. 5 of 1908Error! Reference source not found., § 20.
6
Bhagwan Das v. Girdhari Lal, A.I.R. 1996 S.C. 543Error! Reference source not found..
7
Bakhtawar Singh Bal Kishan v. Union of India, A.I.R. 1988 S.C. 1003Error! Reference source not found..
8
M/s. Angile Insulations v. M/s. Davy Ashmore India Ltd., A.I.R. 1995 S.C. 1766Error! Reference source
not found..

MEMORIAL for APPLICANT ARGUMENTS ADVANCED

 ~2~

Hon’ble Court and that the court is competent to try the case.

THE HON’BLE COURT HAS PECUNIARY JURISDICTION

¶ 20. A suit has to be initiated in the Court of lowest grade only when they are competent to
try such case,9 which is essentially territorial.10 The jurisdiction should not only be in
relation to the subject matter but in relation to the pecuniary limits. 11
¶ 21. The Bombay High Court through notification dated August 28, 2012 r/w Government
Notification dated August 27, 2012 and Bombay City Civil Court Rules, 2012 r/w notice
dated September 7, 2012 has increased the upper limit of pecuniary jurisdiction of the City
Civil Courts to Rs. 1 Crore.12 Thereby, increasing the jurisdiction of the High Court beyond
Rs. 1 Crore.

¶ 22. The instant case involves a consideration of USD 7 Million, which comes under the
pecuniary limit of the Hon’ble Court. Thus, it is humbly put forth that the Hon’ble Court
also has the pecuniary jurisdiction to try the case.

¶ 23. THE INSTANT CASE NEED NOT BE REFERRED TO ARBITRATION

¶ 24. Whether there is a need to refer a case for arbitration has to be ascertained from the
facts and circumstances of each case.13 Thereby, it is put forth that, the instant case need
not be referred to arbitration as, the doctrine of ‘Balance of Convenience’ favours Indico
[a]; the dispute is not arbitrable [b]; and, the ‘Dispute Resolution Clause’ is not an ‘Ouster
Clause’ [c].

¶ 1. THE DOCTRINE OF ‘BALANCE OF CONVENIENCE’ FAVOURS INDICO

¶ 2. Where the parties have chosen to oust the jurisdiction of a court by incorporating an
arbitration clause in their agreement, the court may still entertain the case having regards to the

doctrine of ‘Balance of Convenience’ and demands of justice.14 Further, if the contract is

9
State of Karmataka v. State of Andhra Pradesh, A.I.R. 2001 S.C. 1560Error! Reference source not found..
10
Id.
11
Union of India v. Delhi High Court Bar Association, A.I.R. 2002 S.C. 1479Error! Reference source not
found..
12
The Bombay City Civil Court Act, No. 40 of 1948 (2012)Error! Reference source not found..
13
M. Dayananda Reddy v. A. P. Industrial Infrasructure Corpn. Ltd., A.I.R. 1993 S.C. 2268Error! Reference
source not found..
14
Badat & Co. Bombay v. East India Trading Co., A.I.R. 1964 S.C. 538Error! Reference source not found..

MEMORIAL for APPLICANT ARGUMENTS ADVANCED

 ~3~

unreasonable and unfair, then courts have to come to the rescue of the weaker party.15

¶ 3. In the instant case, considering the law related to the contract, the legality of the
software codes and the expenses to be incurred by the parties makes it clear that the
‘Balance of Convenience’ favours Indico to waive off the choice of forum made in the
contract and thus, the court can assume jurisdiction.

THE DISPUTE IS NOT ARBITRABLE

¶ 5. The scope of arbitration excludes matters such as the protection of intellectual

property,16 as they do not fall within the limit of private laws.17 Further, where the dispute
between the parties is that the contract itself did not subsist, either by rescission or by
alteration, that dispute could not be referred to the arbitration.18

¶ 6. The instant dispute between the parties involves the ownership over the copyright of
codes and also the legality of them used by Indico, which do not fall within the boundaries
of private laws. Further, the instant case also involves the questions as to whether the
addition made to the contract forms the part of the original contract, making it a dispute as
to the binding nature of the contract. Thus, the instant case is not arbitrable.

THE ‘DISPUTE RESOLUTION CLAUSE’ IS NOT AN ‘OUSTER CLAUSE’

¶ 8. The Hon’ble Supreme Court has stated that when a court has to decide the question of
jurisdiction pursuant to an ouster clause, it’s necessary to construe such clause, to see whether

there is ouster of jurisdiction of other courts.19 Further, it would not be wrong for the court
to adjudicate the case on merits, even though the parties have agreed to an arbitration
agreement.20

¶ 9. In the instant case, the dispute resolution clause clearly mentions that there is no
ouster of the Part I21 of the Act.22 Thus, making the intention of the parties clear in not

15
Central Inland Water Transport Corpn. Ltd. v. Brojo Nath Ganguly, A.I.R. 1986 S.C. 1571Error! Reference
source not found..
16
Nigel Blackaby & Costantine Partasides, Redfern & Hunter on International Arbitration 125 (Alan Redfern &
Martin Hunter, Oxford University Press 2009)Error! Reference source not found..
17 Id.,
at 123 - 124.
18
Damodar Valley Corpn. v. K. K. Kar, A.I.R. 1974 S.C. 158Error! Reference source not found..
19
ABC Laminart v. A. P. Agencies, Salem, (1989) 2 S.C.R. 1Error! Reference source not found..
20
Blackaby & Partasides, supra note 16, at 440 – 441.
21
The Arbitration and Conciliation Act, No. 26 of 1996Error! Reference source not found., Part I.

MEMORIAL for APPLICANT ARGUMENTS ADVANCED

 ~4~

making the clause an ouster clause.

¶ 10. THE PRINCIPLES OF ‘CONFLICT OF LAWS’ ARE APPLICABLE FOR THE HON’BLE
COURT TO ASSUME JURISDICTION

¶ 11. Whenever a contract, having a foreign element, is brought before the court, the rules
of Conflict of Laws must be considered.23 Thereby, it is put forth that, the ‘proper laws’ for
the contract would be Indian Laws [a]; and, the Hon’ble Court is ‘Forum Conveniens’ for
the parties [b].

¶ 1. THE ‘PROPER LAWS’ FOR THE CONTRACT WOULD BE INDIAN LAWS

¶ 2. In cases of international contracts, the proper law is determined by the judicial

determination of the system of law with which the transaction has the closest and most real
connection.24 In ascertaining the proper law of the contract, the courts have referred to the
‘connection with the system of law’, which is the closest to the contract. 25 The true
intention of the parties must be discovered by applying the comprehensive ideas of
business, convenience and sense of the language of the contract itself.26

¶ 3. The choice made by the parties, in the instant case, does not have the closest relation to
the contract. The court must, thus, consider the Indian laws to be the proper laws
applicable.

THE HON’BLE COURT IS ‘FORUM CONVENIENS’ FOR THE PARTIES

¶ 5. The Hon’ble Supreme Court, taking reference to the Black’s Law Dictionary, defined
Forum Conveniens as the court in which an action is most appropriately brought,
considering the best interests and convenience of the parties and witnesses, 27 which is
obligatory on the court.28

22
Case Data, ¶ 4, 3.
23
Viswanathan (R) v. Rukn-ul-Mulk Syed Abdul Wajid (Dead), A.I.R. 1963 S.C. 1Error! Reference source
not found..
24
National Thermal Power Corpn. v. Singer Co., A.I..R. 1993 S.C. 998Error! Reference source not found..
25
Delhi Cloth & General Mills Co. Ltd. v. Harnam Singh, A.I.R. 1955 S.C. 590Error! Reference source not
found..
26
National Thermal Power Corpn. v. Singer Co., supra note 24.
27
Rajendran Chingaravelu v. R. K. Mishra, (2010) 1 S.C.C. 457Error! Reference source not found..
28
Mosaraf Hossain Khan v. Bhagheeratha Engineering Ltd., (2006) 3 S.C.C. 658Error! Reference source not

MEMORIAL for APPLICANT ARGUMENTS ADVANCED

 ~5~

¶ 6. Thus, considering the best interest and convenience of the parties and the fact the
substantial portion of the contract is to be performed within the local limits of the Hon’ble
Court,29 the Court is the forum conveniens for the parties.

found..
29
Case Data, ¶ 4, 3.

MEMORIAL for APPLICANT ARGUMENTS ADVANCED

 ~6~

¶ 7. THE CONTRACT BETWEEN THE PARTIES IS VALID AND BINDING.

¶ 8. A contract to be enforceable should not have an illegal object or illegal

consideration.30 Therefore, it is submitted that the contract is valid and enforceable as,
firstly, there is no illegal consideration [A]; and, secondly, the software codes do not violate
privacy [B].

¶ 1. THERE IS NO ILLEGAL CONSIDERATION.

¶ 2. A consideration is said to be unlawful, if it is either forbidden by law or would

involve injury to the person or property of another.31 Thereby, it is put forth that, the codes
do not violate the notification issued by the Government of India [a]; and, the notification
issued by the Government is regulatory [b].

¶ 1. THE CODES DO NOT VIOLATE THE NOTIFICATION ISSUED BY THE GOVERNMENT OF INDIA

¶ 2. The use of the word “and” 32 should be read conjunctively to give effect to the manifest
intention of the Legislature.33 The word “and” cannot be read otherwise unless some other
part of the same statute or the clear intention of it requires that to be done; when the literal
reading of the words produces an unintelligible or absurd result.34

¶ 3. The codes can per se not be invasive, only its unauthorised use can be invasive.35
Further, if the word is interpreted disjunctively then either its use or its manufacture would
be against the law. But, the purpose of the notification is to ban the manufacture and use,
both, of such invasive technology and not just its manufacture.36

¶ 4. Thus, the manufacturing of the technology in question by Indico is not per se illegal for
the purposes of the notification issued by the Government.

THE NOTIFICATION ISSUED BY THE GOVERNMENT IS REGULATORY

30
Gurmukh Singh v. Amar Singh, (1991) 3 S.C.C. 79Error! Reference source not found..
31
The Indian Contract Act, No. 9 of 1872Error! Reference source not found., § 23.
32
Case Data, ¶ 2, 1.
33
Ishwar Singh Bindra v. State of U. P., A.I.R. 1968 S.C. 1450Error! Reference source not found..
34
Competition Commission of India v. Steel Authority of India, (2010) 10 S.C.C. 744Error! Reference
source not found..
35
Smt. Selvi v. State of Karnataka, A.I.R. 2010 S.C. 1974Error! Reference source not found..
36
Case Data, ¶ 2, 1.

MEMORIAL for APPLICANT ARGUMENTS ADVANCED

 ~7~

¶ 6. When the intention of the legislature is merely to regulate an act by prescribing certain
terms and conditions and formalities, a contract to do the act without fulfilling the statutory
requirements is not in itself be void.37

¶ 7. The notification issued by the government mandates the manufacture and use of
invasive technology to be done only with the prior permission, failing which there is an
imposition of strict action.38 Thus, making the object of the notification is clear that the
party manufacturing and using the technology has to seek the permission; which is merely
regulatory.

¶ 8. THE SOFTWARE CODES DO NOT VIOLATE PRIVACY

¶ 9. An unlawful object also includes such invasion of privacy which involves injury to
person or property, making the agreement unlawful.39 However, the software codes are not
illegal on the grounds that, the software codes are not violative of the IT Act, 2000 [a]; and
the software codes used cannot be termed as invasive [b].

¶ 1. THE SOFTWARE CODES ARE NOT VIOLATIVE OF THE IT ACT, 2000

¶ 2. The codes used by Indico cannot be said to violate privacy, nor are they in
contravention with the provision of § 43A40, which obliges corporates, who possess, deal
or handle any ‘sensitive personal data’ to implement and maintain ‘reasonable security’,
failing which they would be liable to compensate those affected by any negligence
attributable to such failure.41

¶ 3. The law relating to the data protection in India i.e. the Information Technology
(Reasonable Security Practices and Procedures and Sensitive Personal Information) Rules,
2011, r/w § 43A42, states that a body corporate must prescribe reasonable security practice
in relation to the information they hold.43
¶ 4. The codes alleged to be invasive in the instant case are only operative at the time of

37
Nutan Kumar v. 2nd Addl. Distt. Judge, A.I.R. 2002 S.C. 3456Error! Reference source not found..
38
Case Data, ¶ 2, 1.
39
Gurmukh Singh v. Amar Singh, supra note 30Error! Reference source not found..
40 The Information Technology Act, No. 21 of 2000 (2008)Error! Reference source not found., § 43A.
41
Id.
42
Id.
43
Id.

MEMORIAL for APPLICANT ARGUMENTS ADVANCED

 ~8~

accident.44 Further, there was no involvement of any sensitive personal data so as to make
it violative of the aforementioned provisions of law. Thereby, making it a preventive
technology and not an invasive technology.

THE SOFTWARE CODES USED CANNOT BE TERMED AS INVASIVE

¶ 6. Privacy is defined as a condition or a state of being free from public attention to

intrusion into or interference with one’s acts or decisions.45 Privacy means the claim of an
individual, groups or institutions to determine how, and to what extent information about
them is communicated to others.46 The generally accepted principle of right of privacy
means the right of a person to be let alone, and free from unwarranted publicity.47
¶ 7. Indico, in the instant case, did maintain reasonable security practices by providing an
override switch with the driver.48 Thereby, making it a preventive technology and not an
invasive technology.

¶ 8. CARCO CANNOT TERMINATE THE CONTRACT.

¶ 9. Although there are differences of approach in cases, the law is fretful to uphold the
contract wherever possible lest it defeats the purpose for which the contract was entered
into.49 Therefore, it is submitted that, firstly, there is no breach of contract on part Indico
[A]; and, secondly, circumstances created by Carco led to non-performance of contractual
obligations [B].

¶ 1. THERE IS NO BREACH OF CONTRACT ON PART OF INDICO

¶ 2. A breach of contract occurs when a party to a contract fails to perform his part of the
contract.50 The contemporary approach is to consider the nature of the terms of contract so as to

decide whether such terms are conditions or warranties.51 The breach of warranty does not

44
Case Data, ¶ 4, 3.
45
BLACK’S LAW DICTIONARY 1315 (Ed. 9th 2009)Error! Reference source not found..
46 Id., at 1439.
47
Id.
48
Case Data, ¶ 4, 3.
49
Raju Kakara Shetty v. Ramesh Prataprao Shiraole, (1991) 1 S.C.C. 570Error! Reference source not found..
50
Man Kaur (Dead) by LRS v. Hartar Singh Sangha, (2010) 10 S.C.C. 512Error! Reference source not
found..
51
Gomathinath Pillai v. Palaniswami Nadar, A.I.R. 1967 S.C. 868Error! Reference source not found..

MEMORIAL for APPLICANT ARGUMENTS ADVANCED

 ~9~

warrant the rescission of contract.52 Thereby, it is put forth that, time is not an ‘essence of
the contract’ in the instant case [a]; use of third party IPR cannot be a ground to terminate
the contract [b]; there is no misrepresentation on the part of Indico [c]; and, Carco has
partially accepted the software codes [d].

¶ 1. TIME IS NOT THE ‘ESSENCE OF THE CONTRACT’

¶ 2. Whether the time is of an ‘essence of the contract’ is a question of law and fact. 53
Further, not merely because of the specification of time, but a contract may be avoided only
if it is intended by the parties that time is of an ‘essence of the contract’. 54

¶ 3. Such intentions must be in the language which is unambiguous. 55 It may also be

inferred from the nature of property agreed to be sold and conduct of the parties.56 The time
is not of an essence where the contract provides for damages for delayed completion, or for
extension of time.57

¶ 4. In the instant case, the property is neither perishable nor there is any urgency shown by
Carco regarding the delivery of the codes. Further, there was no time frame that was
provided to Indico so far as the completion of time of the additional requirement is
concerned. Further, there is also a provision to extend time by one calendar month.58 Thus,
it could be concluded that time is not of an essence of the present contract.

USE OF THIRD PARTY IPR CANNOT BE A GROUND TO TERMINATE THE CONTRACT

¶ 6. Whether a stipulation in contract of sale is a condition or a warranty depends on the

construction of the contract.59 The breach of warranty does not warrant the termination of

contract.60 No special form of words is necessary to create a warranty, but depends upon the
52
Indochem Electronics v. Addl. Collector of Customs, A. P., (2006) 3 S.C.C. 721Error! Reference source not
found..
53
Municipal Corpn. of Delhi v. Jagannath Ashok Kumar, (1987) 4 S.C.C. 497Error! Reference source not
found..
54
Sardamani Kandappan v. S. Rajlaxmi, A.I.R. 2011 S.C. 3234Error! Reference source not found..
55
Gomathinath Pillai v. Palaniswami Nadar, A.I.R. 1967 S.C. 868Error! Reference source not found..
56
Id.
57
Hind Construction Contractors v. State of Maharashtra, A.I.R. 1979 S.C. 720Error! Reference source not
found..
58
Case Data, ¶ 3, 2.
59
Indochem Electronics v. Addl. Collector of Customs, A. P., supra note 51.
60 Id.

MEMORIAL for APPLICANT ARGUMENTS ADVANCED

 ~ 10 ~

intention of the parties.61

¶ 7. In the instant case, the terms mentioned in the contract are not the core of the contract
i.e. non-adherence of such terms would not render the contract terminated. Thus, it will be
apposite to put forth that merely using the ‘logic of AACN’,62 which is already in public
domain. Hence, would not amount to use of third-party IPR.

THERE IS NO MISREPRESENTATION ON THE PART OF INDICO

¶ 9. ‘Misrepresentation’ is a positive assertion, in a manner not warranted by the

information of the person making it, of that which is not true, though he believes it to be
true. 63 Further, the contractual terms must also be distinguished from the words of
expectation, which do not form part of the contract;64 such statements may not even give
rise to liability as misrepresentations if they are honestly made. 65
¶ 10. It is an enunciated rule that when a purchaser chose to rely upon his own judgment, then

he is estopped from claiming that he relied upon a representation made by the vendor.66

¶ 11. In the instant case, there was no positive act on the part of Indico and their ability was
‘confirmed’67 by Carco was based on its own reliance. Further, the projections made by
Indico about its capabilities of timely completing the milestones were not related to the
additional clause added. Thus, it could be concluded that there is no misrepresentation on
part of Indico.

CARCO HAS PARTIALLY ACCEPTED THE SOFTWARE CODES

¶ 13. Where a contract of sale is not severable and the buyer has accepted the goods or part
thereof, the breach of any condition to be fulfilled by the seller can only be treated as a
breach of warranty and not as a ground for rejection of goods or termination of the contract,

61
Gopalakrishna Pillai v. K. M. Mani, (1984) 2 S.C.C. 83Error! Reference source not found..
62
Case Data, ¶ 5, 3.
63
The Indian Contract Act, No. 9 of 1872Error! Reference source not found., § 18(1).
64
K. Narendra v. Riviera Apartments (P) Ltd., A.I.R. 1999 S.C. 2309Error! Reference source not found..
65
Iridium India Telecom v. Motorola Inc., A.I.R. 2011 S.C. 20Error! Reference source not found..
66
1 Pollock & Mulla, Indian Contract & Specific Relief Act ¶ 3 (R. G. Padia, Ed. 13th 2010)Error! Reference
source not found..
67
Case Data, ¶ 4, 3.

MEMORIAL for APPLICANT ARGUMENTS ADVANCED

 ~ 11 ~

unless there is a term of the contract, express or implied, to that effect.68

¶ 14. The submission of first two milestones were reciprocated by instalment, 69 shows
acceptance in part and thus, there is no breach of condition so as to render the contract
terminated.

¶ 15. CIRCUMSTANCES CREATED BY CARCO LED TO NON-PERFORMANCE OF

CONTRACTUAL OBLIGATIONS

¶ 16. If one party makes the performance of the contract impossible, then such innocent
party, is not liable for the breach of contract.70 Thereby, it is put forth that, a reasonable
time should have been granted in lieu of the additions made [a]; there is ‘unconscionable
bargain’ on part of Carco [b]; and, in arguendo, there is peremptory termination of contract
by Carco [c].

¶ 1. A REASONABLE TIME SHOULD HAVE BEEN GRANTED IN LIEU OF THE ADDITIONS MADE

¶ 2. Reasonable time should be determined by looking into the surrounding circumstances,

including express terms of contract and nature of property.71

¶ 3. The additional requirement added could not have been sufficiently completed in the
same time period. Owing to the fact that there is no consensus with regards to the time of
the completion, and also, that there is a clause for granting extension in circumstances
beyond control,72 it has to be reasonably extended seeing the addition in the contract.

THERE IS ‘UNCONSCIONABLE BARGAIN’ ON PART OF CARCO

¶ 5. Where the court, on the terms of the contract, comes to the conclusion that the contract
or any part of it is unconscionable, it may refuse to enforce such contract or such part
thereof.73 A contract of unconscionable bargain is one which is irreconcilable with what is

68
The Sales of Goods Act, No. 3 of 1930Error! Reference source not found., § 13(2).
69
Case Data, ¶ 7, 4.
70
Jai Durga Finvest Pvt. Ltd. v. State of Haryana, A.I.R. 2004 S.C. 1484Error! Reference source not found..
71
K. Narendra v. Riviera Apartments (P) Ltd., supra note 63.
72
Case Data, ¶ 3, 2.
73
The Indian Contract Act, No. 9 of 1872Error! Reference source not found., § 67A.

MEMORIAL for APPLICANT ARGUMENTS ADVANCED

 ~ 12 ~

right or reasonable or the terms of which are so unfair and unreasonable.74

¶ 6. The terms of the contract kept both the parties at an unequal footing, granting more
bargaining power to Carco; which is clear from the clause subject to the satisfaction of Carco

mentioned in every milestone.75 Thus, it is to put forth that there is no breach of contract on
the part of Indico as there are arbitrary circumstances created by Carco.

IN ARGUENDO, THERE IS PEREMPTORY TERMINATION OF CONTRACT BY CARCO

¶ 8. The term peremptory is defined as something which is not requiring any shown cause
or is arbitrary.76 This definition clearly put forths the arbitrariness shown on the part of
Carco.

¶ 9. Thus, even if there is a breach of the contract it is completely because of Carco which
peremptorily terminated the agreement as issuance of letter was within the 10 days of the
submission of the 2nd milestone. Further, with respect to the milestones laid in the contract,
it is clear that the time of two months has to be given as far as the modifications/corrections
sought for by Carco were to be made.77 Carco did not grant sufficient time for the
completion of the milestones laid.

¶ 10.THE OWNERSHIP OF THE INTELLECTUAL PROPERTY RIGHTS

IN THE SOFTWARE CODES LIE WITH INDICO.

¶ 11. A ‘software’ means a set of instructions expressed in words, codes, schemes, or in any
other form, which are a subject matter of copyright. 78 Therefore, it is submitted that the
ownership of copyright over the codes lie with Indico as, firstly, copyright can be granted to
the codes [A]; and, secondly, Carco cannot claim copyright over the software codes [B].

¶ 1. COPYRIGHT CAN BE GRANTED TO THE SOFTWARE CODES

¶ 2. Software falls under the definition of literary works for the purposes of the Act 79. It
specifically provides that copyright subsists in original literary works. 80 Thereby, it is put

74
Central Inland Water Transport Corpn. Ltd. v. Brojo Nath Ganguly, supra note 15.
75
Case Data, ¶ 3, 2.
76
BLACK’S LAW DICTIONARY 1215 (Ed. 9th 2009)Error! Reference source not found..
77
Case Data, ¶ 3, 2.
78
The Indian Copyright Act, No. 14 of 1957Error! Reference source not found., § 2(ffb).
79
Id., § 2(ffc).
80
Id., § 13(1)(a).

MEMORIAL for APPLICANT ARGUMENTS ADVANCED

 ~ 13 ~

forth that copyright subsists in the software codes used as, the software codes are covered
under the Indian Copyright Act, 1957 [a]; and, the ‘test of originality’ is satisfied [b].

¶ 1. THE SOFTWARE CODES ARE COVERED UNDER THE INDIAN COPYRIGHT ACT

¶ 2. The Act provides an inclusive definition of literary work, including ‘computer

programs’81. The ordinary meaning and understanding of computer software is no different.82
Thus, the ‘software codes’ can be encumbered within the ambit of a computer program.
Moreover, the codes, preliminary programs, etc. would also qualify as literary works.

THE ‘TEST OF ORIGINALITY’ IS SATISFIED

¶ 4. The ‘original literary works’ referred to in § 1383, means that the work in question
should not be copied from some work but should originate in the author, being the product
of his labour and skill.84

¶ 5. The amount of originality and creativity is evident from the fact that there was a
provision of an override switch to shut the program off.85 Moreover, merely using the logic or
idea of AACN and the smart TV tracking chip would not amount to copying. Thus, the codes
do not lack the essential element of ‘originality’ which is required for a copyright to subsist.

¶ 6. CARCO CANNOT CLAIM COPYRIGHT OVER THE SOFTWARE CODES

¶ 7. The author of a literary work is the first owner of a literary work. 86 Thereby, it is put
forth, that the ownership of copyright lies with Indico as, the contract is a ‘contract for
service’ [a]; and, Indico granted non-exclusive IPR to Carco [b].

¶ 1. THE CONTRACT IS A ‘CONTRACT FOR SERVICE’

¶ 2. The greater the degree of independence of control, the greater the probability that the
services rendered are of the nature of professional services and that the contract is not one of

service.87 Further, if someone employs another to do a certain work but leaves it to the

81
Id., § 2(o).
82
M/s PSI Data Systems Ltd. v. Collector of Central Excise, A.I.R. 1997 S.C. 785Error! Reference source
not found..
83
The Indian Copyright Act, No. 14 of 1957Error! Reference source not found., § 13.
84
Eastern Book Co. v. D. B. Modak, A.I.R. 2008 S.C. 809Error! Reference source not found..
85
Case Data, ¶ 4, 3.
86
The Indian Copyright Act, No. 14 of 1957Error! Reference source not found., § 17.
87
Bank of India v. O. P. Swarankar, A.I.R. 2003 S.C. 858Error! Reference source not found..

MEMORIAL for APPLICANT ARGUMENTS ADVANCED

 ~ 14 ~

employee, to decide how it shall be done, then it is a contract for service.88

¶ 3. The court, while deciding on the type of contract, is required to consider several factors
which would have a bearing on the result; (i) how long the service lasts; (ii) the extent
of control and supervision; and, (iii) the nature of the job.89 The establishment is also to be
taken into account.90
¶ 4. Thus, the contract is a ‘contract for service’ due to the fact that the services rendered by
Indico are clearly professional in nature and there is no guidance of any kind whatsoever
in the manner of creating the software codes.91 Further, a substantial part of the contract
was to be performed at Pune, making the contract a contract for service.

INDICO GRANTED NON-EXCLUSIVE IPR TO CARCO

¶ 6. A non-exclusive licence is a license that grants several licensees within the same
industry, the same rights to an intellectual party at the same time or consecutively. 92 It
amounts to a consent or permission by an owner of copyright that another person should do
an act which, but for that license, would involve an infringement of the copyright of
licensor.93

¶ 7. Indico has given non-exclusive license to Carco,94 laying emphasis on the fact that it
has given non-exclusive rights to it and the ownership of codes, designs and templates still
lies with Indico.

¶ 8. THERE ARE REMEDIES AVAILABLE TO INDICO UNDER THE INDIAN

LAWS.

¶ 9. Where the party performing a contract does not do so to the standard required under the
contract or within the timeframe set, that party is liable for the breach of the contract. 95 In
88
Union Public Service Commission v. Girish Jayanti Lal Vaghela, A.I.R. 2006 S.C. 1165Error! Reference
source not found..
89
Workmen of Nilgiri Cooperative Marketing Society Ltd. v. State of Tamil Nadu, (2004) 2 S.C.C. 514Error!
Reference source not found..
90
Id.
91
Case Data, ¶ 4, 3.
92
BLACK’S LAW DICTIONARY 1002 (Ed. 9th 2009)Error! Reference source not found..
93
T. R. Srinivasa Iyengar’s, The Copyright Act, 1957 227 (Ed. 6th 2000)Error! Reference source not found..
94
Case Data, ¶ 3, 2.
95
Maula Bux v. Union of India, A.I.R. 1970 S.C. 1955Error! Reference source not found..

MEMORIAL for APPLICANT ARGUMENTS ADVANCED

 ~ 15 ~

such cases the party suffering due to such breach of contract has various remedies. Therefore, it
is submitted that Indico sought for, firstly, compensation in the name of actual damages
suffered by Indico [A]; and, secondly, injunction on the software codes used by Carco [B].

¶ 1. COMPENSATION IN THE NAME OF ACTUAL DAMAGES SUFFERED BY INDICO

¶ 2. § 7396 provides for compensation for any loss or damage caused, to the party who
suffers by such breach is entitled to receive, form the party who has broken the contract. 97
Thereby, it is put forth that, there was a breach of contract on the part of Carco [a]; and,
Indico is entitled to receive compensation [b].

¶ 1. THERE WAS A BREACH OF CONTRACT ON THE PART OF CARCO

¶ 2. A breach of contract occurs when a party to a contract fails to perform his part of the
contract.98 Such breach may occur on the due date of performance or during the course of
performance.99
¶ 3. Carco, by repudiating the contract peremptorily, has breached the terms of the
contract.100 Thus, making Indico entitled for damages.

INDICO IS ENTITLED TO RECEIVE COMPENSATION

¶ 5. Where two parties have contracted, out of which, one of them has breached the contract, the
damages which the other party ought to receive in respect of such breach of contract should be
such as may be fairly and reasonably be considered either arising in the usual course of things
from such breach itself, or such as may reasonably be supposed to have
been in contemplation of both parties at the time they made the contract, as the probable
result of it.101

¶ 6. Further, on a breach of a sales contract, the buyer is entitled to recover all the

96
The Indian Copyright Act, No. 14 of 1957Error! Reference source not found., § 73.
97
MSK Projects (I) (JV) Ltd. v. State of Rajasthan, A.I.R. 2011 S.C. 2979Error! Reference source not found..
98
Man Kaur (Dead) by LRS v. Hartar Singh Sangha, supra note 50.
99
Reliance Salt Ltd. v. Cosmos Enterprise, (2006) 13 S.C.C. 599Error! Reference source not found..
100
Case Data, ¶ 10, 4.
101
Rajkot Municipal Corpn. v. Manjulben Jyantilal Nakum, (1997) 9 S.C.C. 552Error! Reference source not
found..

MEMORIAL for APPLICANT ARGUMENTS ADVANCED

 ~ 16 ~

expenses of procuring same or similar goods.102 The injured party has to be placed in as
good a situation as if the contract has been performed.103 Thus, Carco is liable to pay
damages to Indico.

¶ 7. INJUNCTION ON CARCO FOR USING THE ‘SOFTWARE CODES’

¶ 8. § 37104 provides that a temporary injunction is granted for a specific time and at any
stage of the suit.105 It is the discretion of the court to grant injunction after taking into the
considerations for the same. Thereby, it is submitted that, there is a prima facie case of
Indico [a]; the ‘balance of convenience’ is in favour of Indico [b]; and, there would be an
irreparable loss to Indico if injunction is not granted.

¶ 1. THERE IS A PRIMA FACIE CASE OF INDICO

¶ 2. To prove a prima facie case, the Court shall not examine the merits of the case, rather
only the basic facts on which it is established.106 Moreover, necessitating protection of the
plaintiff's rights by issue of a temporary injunction has to be shown. 107
¶ 3. As submitted above, it is put forth that the ownership of the right with respect to the
Copyright on codes, lie with Indico. Further, Indico has asked Carco to cease from using
the proposal already forwarded, as the proprietary rights to the same still vests with Indico.

THE ‘BALANCE OF CONVENIENCE’ IS IN FAVOUR OF INDICO

¶ 5. When the need for protection of the applicant’s rights is compared with or weighed against
the need for protection of the respondent’s rights, the ‘balance of convenience’ should

favour the plaintiff. 108 The party who would suffer greater loss would be said to have
‘balance of convenience’ in his favour and accordingly, the court will pass or refuse to pass

102
Priya Vasant Kalgutkar v. Murad Shaikh, A.I.R. 2010 S.C. 40Error! Reference source not found..
103
Enercon (India) Ltd. v. Enercon GMBH, (2014) 5 S.C.C. 1Error! Reference source not found..
104
The Specific Relief Act, No. 47 of 1963Error! Reference source not found., § 37.
105
Bhagwanrao v. Ganpatrao, (1987) 3 Bom.C.R. 258Error! Reference source not found..
106
The State Trading Corpn. of India v. Jainsons Clothing Corpn., A.I.R. 1994 S.C. 2778Error! Reference source
not found..
107 Id.
108
The State Trading Corpn. of India v. Jainsons Clothing Corpn., supra note 106.

MEMORIAL for APPLICANT ARGUMENTS ADVANCED

 ~ 17 ~

the order.109

¶ 6. In the instant case, if the injunction is not granted on the use of the codes by Carco, the
right of Indico, with respect to Copyright over the codes, would be violated.

THERE WOULD BE AN IRREPARABLE LOSS TO INDICO IF INJUNCTION NOT BE GRANTED

¶ 8. The settled principle of law is that even where prima facie case is in favour of the
plaintiff, the Court will refuse temporary injunction only if the injury suffered by the
plaintiff on account of refusal of temporary injunction was not irreparable. 110

¶ 9. Thus, if injunction is not granted, the loss suffered by Indico would be irreparable with
respect to the copyright that they have on the software codes.

109
Gujrat Bottling Co. Ltd. v. Coco Cola Co., A.I.R. 1995 S.C. 2372Error! Reference source not found..
110
Best Sellers Retail India (P) Ltd. v. Aditya Nirla Nuvo Ltd., (2012) 6 S.C.C. 792Error! Reference source not
found..

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 ~ XII ~

PRAYER

Wherefore, in the light of the facts stated, arguments advanced and authorities cited,
it is most humbly prayed and implored before the Hon’ble High Court of Mumbai, that it
may be graciously pleased to adjudge and declare that:

¶ 10. The suit is maintainable in the Hon’ble Court.

¶ 11. The contract between the parties is valid and binding.

¶ 12. Carco cannot terminate the contract.

¶ 13. The ownership of the Intellectual Property Rights in the software codes lie with
Indico.

¶ 14. The remedies sought for be granted.

Also, pass any other order that it may deem fit in the favour of the APPLICANT to
meet the ends of equity, justice and good conscience.

For this act of Kindness, the Applicant shall duty bound forever pray.

Place: Mumbai s/d

Dated: 11th October, 2014 Counsel for Applicant

MEMORIAL for APPLICANT PRAYER