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HC vacates stay granted to Microsoft against Girnar

I expect that Microsoft is sufficiently concerned about its own reputation and standing, including in courts, not to risk further observations and findings

Delivering a hard knock to Microsoft Corporation, the Bombay HC vacated a stay it had granted this June in favour of the US tech major in its plea against an Indian software firm over unlicensed use of its products. Justice Gautam Patel who reversed the relief said, "I expect that Microsoft is sufficiently concerned about its own reputation and standing, including in courts, not to risk further observations and findings, and that it has understood from the tone and tenor of this order what it can reasonably expect in future."

Microsoft had moved court for an Anton Piller order against Girnar Software, alleging that the Indian company had unlicensed MS Windows Operating System (OS) and MS Office on over a thousand computers across its offices in Jaipur, Gurgaon and Mumbai. An Anton Piller order is one that provides rights to a party to enter, search and seize evidence without warning, for its case.

Microsoft had claimed that Girnar has over 3,300 computers with 1,340 working on MS Windows but had licences for only 545, along with 1,308 computers with MS Office but licences for only 545. It said there were 2,000 computers in Jaipur, "some of which" ran Windows. It also complained that Girnar was "uncooperative and stymied attempts at an audit, thus necessitating investigations". Thus the HC had on June 24, in an ex-parte order (without hearing the other side), directed the court receiver to visit offices of Girnar to inspect and seize.
On July 15, Girnar's counsel Rashmin Khandekar, however, said that Microsoft had made "vague, false and misleading statements" and gave a "distorted number of computers". Justice Patel said, "To my very great dismay, I find Khandekar is entirely correct. The number of machines audited is nowhere close to Microsoft's assertions." An audit by the court receiver and HC team showed there were only 1,053 machines at all four sites, of which only 283 ran on Microsoft Windows, and only five machines ran non-compliant MS products. The HC said it was "more distressed" that Microsoft "wilfully suppressed vital information" which the judge said, shows that "Girnar was not obstructing Microsoft at all".

For the relief that Microsoft sought, specific pleadings are a must, and the HC said Microsoft should have applied a more "stricter standard" in its pleadings, as should any company seeking Anton Piller orders.

The HC said, "there is no question of allowing Microsoft any latitude in its use of vague and imprecise words like "some of which", "approximate", "estimated" and so on, but gave Microsoft an option to withdraw its suit. The HC said it was expressing such latitude and was also sparing Microsoft from large significant costs in dollars, because of its counsel Rahul Ajatashatru who "battled single-handedly...without any support from anyone at Microsoft or his attorneys".

The HC posted the dispute for a hearing next on July 20.

 Khandekar and solicitors Krishna & Saurastri Associates, who represented Girnar, also submitted email exchanges in court between Microsoft and Girnar between May 10 and 12, 2016. Justice Patel said, "This email correspondence clearly shows that Girnar was not obstructing Microsoft at all. It was in no sense non-cooperative. It only sought specific — and in my view, utterly reasonable clarifications relating to the processes and protocols to be followed during the audit, to ensure the security of Girnar's own systems and data."

The judge hoped the case would serve as a lesson. He said, "The lesson to be learned from all this, one that I believe will govern all future applications for Anton Piller orders — every one of those orders will require clearest statement of facts. Any grey areas — 'estimates', 'approximates' — will be clearly set out in the plaint. There is to be no holding back of relevant documentary material."

The HC even said that in future, "every order will be conditional on the applicant depositing in court as security a sum to be decided when the order is made."

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Written & Published in Timesofindia

Reviewed by:
Aditya Abhyankar
Published on 20-Jul-16