Lachman Dass Bhatia Vs. Assistant Commissioner of Income Tax

In Delhi High Court, the Full Bench in Lachman Dass Bhatia Vs. Assistant Commissioner of Income Tax, ITA Nos. 724/2010 to 729/2010 and connected matters, decided on 06 August 2010, clarified the maintainability of appeals against orders passed by the Income Tax Appellate Tribunal under Section 254(2) of the Income Tax Act, 1961. The dispute arose over whether every rectification or recall order passed by the Tribunal could be challenged before the High Court under Section 260A. The Revenue argued that only appellate orders deciding substantial questions of law were appealable, while the assessee contended that parties should not be left without remedy against rectification orders. 

The Full Bench examined decisions of various High Courts including Bombay, Calcutta, Madras, Rajasthan and Karnataka High Courts and interpreted Sections 254(1), 254(2) and 260A of the Income Tax Act. The Court held that where the Tribunal merely amends or rectifies an appellate order, such amended order remains appealable under Section 260A. However, an order rejecting a rectification application or recalling the entire appellate order does not amount to a final adjudication and therefore is not appealable under Section 260A. The Court further observed that in such cases aggrieved parties may invoke writ jurisdiction under Articles 226 and 227 of the Constitution of India. 

The Court accordingly answered the legal reference by holding that recall orders under Section 254(2) are not appealable under Section 260A, whereas amended rectification orders can be challenged before the High Court on substantial questions of law. The judgment has become an important precedent on the distinction between rectification, amendment and recall powers of the Income Tax Appellate Tribunal. 

Case Title: Lachman Dass Bhatia v. Assistant Commissioner of Income Tax

Date of Judgment: 06 August 2010

Case Number: ITA Nos. 724/2010 to 729/2010 and connected matters

Neutral Citation: [2010] 328 ITR 243 (Delhi)

Court: Delhi High Court

High Court: Delhi High Court

Disclaimer: Donot treat this as substitute for legal advise as it may contain subjective errors.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

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1. Delhi High Court Clarifies Appealability of ITAT Rectification Orders Under Section 260A
2. Lachman Dass Bhatia v ACIT: Delhi High Court on Section 254(2) and Section 260A of Income Tax Act
3. Can ITAT Recall Orders Be Appealed? Important Delhi High Court Judgment Explained
4. Delhi High Court Explains Scope of Rectification Powers of ITAT Under Income Tax Act
5. Maintainability of Appeals Against ITAT Rectification Orders: Detailed Legal Analysis
6. Section 254(2) vs Section 260A: Delhi High Court Resolves Tax Appeal Controversy
7. Important Tax Litigation Judgment on ITAT Recall and Rectification Jurisdiction
8. Delhi High Court on Appeal Rights Against ITAT Orders Under Income Tax Act, 1961
9. Lachman Dass Bhatia Case: Difference Between Recall and Amendment of ITAT Orders
10. Delhi High Court Judgment on Tax Appeals, Rectification and Writ Jurisdiction

Detailed Analytical Article

Introduction

The judgment delivered by Delhi High Court in Lachman Dass Bhatia v. Assistant Commissioner of Income Tax, decided on 06 August 2010, is an important decision concerning the scope of appellate remedies available against orders passed by the Income Tax Appellate Tribunal under Section 254(2) of the Income Tax Act, 1961. The judgment resolved an important legal controversy regarding whether an appeal under Section 260A of the Income Tax Act could be maintained against orders passed by the Tribunal while exercising rectification powers under Section 254(2). The Full Bench judgment authored by Chief Justice Dipak Misra examined conflicting views taken by different High Courts across India and clarified the distinction between an order amending an appellate order and an order recalling the entire appellate order.

The Court dealt with the practical consequences of rectification proceedings before the Income Tax Appellate Tribunal and examined the nature of “appealable orders” under the Income Tax Act. The judgment is important because it clarifies when parties can approach the High Court through a statutory appeal and when they must instead invoke writ jurisdiction under Articles 226 and 227 of the Constitution of India.

Factual and Procedural Background

The matter arose from a batch of income tax appeals filed before the Delhi High Court, including ITA Nos. 724/2010 to 729/2010 and connected matters. During hearing before the Division Bench, the Revenue raised a preliminary objection regarding maintainability of the appeals under Section 260A of the Income Tax Act. The objection related to whether an order passed by the Income Tax Appellate Tribunal under Section 254(2) could be challenged through a statutory appeal before the High Court.

Section 254(1) empowers the Tribunal to pass orders in appeals after hearing parties. Section 254(2) allows the Tribunal to rectify mistakes apparent from the record. Section 260A provides a right of appeal to the High Court against orders passed in appeal by the Appellate Tribunal if the case involves a substantial question of law. The controversy arose because different High Courts had interpreted these provisions differently. Some courts held that all orders under Section 254(2) were appealable, while others held that only certain kinds of rectification orders could be appealed.

The Revenue relied upon decisions such as Visvas Promoters (P) Ltd. v. Income Tax Appellate Tribunal, (2009) 226 CTR 638 (Madras), Chem Amit v. Assistant Commissioner of Income Tax, (2005) 272 ITR 397 (Bombay), and Shaw Wallace & Co. Ltd. v. ITAT, [1999] 240 ITR 579 (Calcutta), to argue that appeals under Section 260A were not maintainable against orders merely rejecting rectification applications or recalling original orders.

On the other hand, the assessee relied upon judgments including L. Sohanraj v. Deputy Commissioner of Income Tax, [2003] 260 ITR 147 (Karnataka), Deputy Commissioner of Income Tax v. H.V. Shantharam, [2003] 260 ITR 156 (Karnataka), and Jagdish Chandra and Sons v. ITAT, [2005] 266 ITR 165 (Allahabad), contending that such appeals were maintainable.

Because of conflicting judicial opinions and the recurring nature of the issue, the Division Bench referred the matter to a larger Bench for authoritative determination.

Dispute Before the Court

The principal issue before the Court was whether all orders passed under Section 254(2) of the Income Tax Act are appealable under Section 260A. The dispute specifically focused upon three different situations. The first situation involved rejection of a rectification application under Section 254(2). The second situation involved amendment or correction of the original appellate order. The third situation involved complete recall of the earlier appellate order passed by the Tribunal.

The Revenue argued that Section 260A permits appeals only against “orders passed in appeal” by the Tribunal. According to the Revenue, an order passed under Section 254(2) merely exercising rectification jurisdiction was not an appellate order and therefore could not automatically become appealable. It was further argued that recall of an order effectively wipes out the original appellate order and therefore there remains no operative appellate order against which an appeal could lie.

The assessee argued that Section 260A should receive liberal interpretation and that parties should not be left without remedy merely because the Tribunal exercised rectification powers. The assessee also argued that the legislative intent behind introduction of Section 260A supported maintainability of appeals against Tribunal orders affecting substantive rights.

Reasoning and Analysis of the Court

The Full Bench carefully examined the language of Sections 254 and 260A of the Income Tax Act. The Court observed that Section 260A uses the expression “every order passed in appeal by the Appellate Tribunal.” The Court emphasized that the expression must be understood in the context of appellate adjudication and not every procedural or rectification order.

The Bench analyzed several judgments from different High Courts. The Court extensively discussed the Bombay High Court decision in Chem Amit v. Assistant Commissioner of Income Tax, (2005) 272 ITR 397 (Bom). In that case, the Bombay High Court had distinguished the Supreme Court judgment in CIT v. Durga Engineering and Foundry Works, (2000) 162 CTR (SC) 257. The Bombay High Court had held that the language of Section 260A differed materially from Section 256 because Section 260A permits appeal only against orders passed in appeal, whereas Section 256 used broader language referring to orders passed under Section 254 generally.

The Delhi High Court approved this reasoning and observed that if a rectification order merely rejects an application, it does not independently decide substantive rights because the substantive controversy already stands decided in the original appellate order. Therefore, such rejection orders cannot independently become appealable under Section 260A.

The Court also discussed Shaw Wallace & Co. Ltd. v. ITAT, [1999] 240 ITR 579 (Calcutta), where the Calcutta High Court had held that when an order under Section 254(2) modifies or rectifies the main appellate order, both orders together may become appealable. However, a pure recall order which wipes out the original appellate order cannot itself be treated as an appellate adjudication.

The Bench further examined the Rajasthan High Court judgment in Apex Metchem (P) Ltd. v. ITAT, 318 ITR 48 (Raj), which held that amendment orders merge with the original appellate order and therefore remain appealable, whereas recall orders do not finally adjudicate rights and therefore are not appealable.

The Court also relied upon the Delhi High Court judgment in Karan & Co. v. ITAT, [2002] 253 ITR 131 (Delhi), where it was held that Section 254(2) only permits rectification of mistakes apparent from record and does not ordinarily confer broad powers of rehearing or recall. The Court noted that recalling an entire order would effectively amount to fresh adjudication and exceed the limited rectification jurisdiction contemplated by Section 254(2).

The Bench then referred to general principles governing appealability and decrees. It cited Parmeshwar Lal v. Gokhula Nandan Prasad, AIR 1984 Patna 344, and Dinamani Debi v. Paramananda Choudhury, AIR 1980 Orissa 177, to explain that appealability generally depends upon final adjudication of rights. Where no final adjudication exists, no statutory appeal ordinarily lies.

The Court concluded that when the Tribunal completely recalls its earlier order under Section 254(2), there remains no final appellate adjudication because the matter is reopened for fresh hearing. In such circumstances, an appeal under Section 260A is not maintainable.

However, the Court clarified that where the Tribunal merely amends or rectifies the original appellate order without recalling it entirely, the amended order merges with the original appellate order and therefore becomes appealable under Section 260A.

The Bench also addressed the concern that parties would otherwise be left remediless. The Court held that where statutory appeal is unavailable, parties may invoke writ jurisdiction under Articles 226 and 227 of the Constitution. The Court relied upon Col. Anil Kak (Retd.) v. Municipal Corporation, Indore, AIR 2007 SC 1130, and Nawab Shaqafath Ali Khan v. Nawab Imad Jah Bahadur, 2009 AIR SCW 2289, to hold that proceedings could even be converted from appeal to writ petition where circumstances justify such conversion.

Final Decision of the Court

The Full Bench answered the reference by laying down three clear legal principles. First, an order passed under Section 254(2) recalling the Tribunal’s earlier order in entirety is not appealable under Section 260A. Second, an order rejecting a rectification application under Section 254(2) is also not appealable. Third, where the Tribunal merely amends or rectifies its appellate order under Section 254(2), the amended order can be challenged through an appeal under Section 260A on substantial questions of law.

The Court further held that where statutory appeal is unavailable, the aggrieved party may seek remedy under Articles 226 and 227 of the Constitution of India. The appeals were directed to be placed before the Division Bench for further proceedings in accordance with law.

Point of Law Settled in the Case

The judgment settled the legal position that every order passed under Section 254(2) of the Income Tax Act is not automatically appealable under Section 260A. Only those rectification orders which amend or modify the original appellate order are appealable because they continue to remain part of the appellate adjudication. Orders merely rejecting rectification applications or completely recalling original orders do not amount to final appellate adjudications and therefore are not appealable under Section 260A. In such situations, constitutional remedies under Articles 226 and 227 remain available.

Case Details

Case Title: Lachman Dass Bhatia v. Assistant Commissioner of Income Tax
Date of Judgment: 06 August 2010
Case Numbers: ITA Nos. 724/2010 to 729/2010 and connected matters
Neutral Citation: [2010] 328 ITR 243 (Delhi)
Court: Delhi High Court
Hon’ble Judges: Chief Justice Dipak Misra, Justice Sanjiv Khanna and Justice Manmohan

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Headnote

The Delhi High Court in Lachman Dass Bhatia v. Assistant Commissioner of Income Tax clarified the scope of appeals under Section 260A of the Income Tax Act against orders passed under Section 254(2) by the Income Tax Appellate Tribunal. The Court held that orders merely rejecting rectification applications or recalling appellate orders entirely are not appealable under Section 260A because they do not constitute final appellate adjudications. However, where the Tribunal amends or rectifies its earlier appellate order, such amended order remains appealable on substantial questions of law. The Court further clarified that writ remedies under Articles 226 and 227 of the Constitution remain available where statutory appeals are barred.

Disclaimer: Readers are advised not to treat this as substitute for legal advise as it may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

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Mr. Ilaiyaraaja Vs Saregama India Limited,

In Delhi High Court, the Division Bench comprising Justice C. Hari Shankar and Justice Om Prakash Shukla delivered a significant copyright ruling in Mr. Ilaiyaraaja Vs Saregama India Limited, FAO(OS) (COMM) 52/2025, Neutral Citation: 2026:DHC:XXXX-DB, decided on 21 May 2026. The dispute arose over the recreation and adaptation of the iconic song “En Iniya Pon Nilave” from the film Moodu Pani for use in the upcoming film Aghathiyaa. Saregama India Limited claimed ownership over the sound recording and underlying literary and musical works by virtue of a 1980 assignment agreement executed with the producer of the original film, while renowned composer Ilaiyaraaja asserted his independent copyright in the musical composition and his right to authorize adaptations under the Copyright Act, 1957.

The Court examined the interplay between Sections 13, 14 and 17 of the Copyright Act and held that while the producer and Saregama retained copyright in the sound recording and lyrics of the original song, Ilaiyaraaja continued to hold independent copyright in the musical composition as its composer. The Bench clarified that Section 13(4) protects the separate copyright of the composer even after incorporation of the work into a cinematograph film. However, the Court also observed that Ilaiyaraaja could not assign rights in the lyrics or original sound recording, since those rights did not vest in him. Accordingly, the Court partly recognized the composer’s adaptation rights but held that the agreement relied upon by the film producers extended beyond the rights legally available to him. The appeal was thus partly allowed with important findings on the scope of composers’ rights in cinematograph films and the distinction between musical works, lyrics and sound recordings.

Disclaimer: Donot treat this as substitute for legal advise as it may contain subjective errors.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

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Detailed Analytical Article

Introduction

The decision delivered by the Division Bench of Delhi High Court in Mr. Ilaiyaraaja v. Saregama India Limited, FAO(OS) (COMM) 52/2025, decided on 21 May 2026, is an important judgment concerning copyright ownership in film music under the Copyright Act, 1957. The judgment examines the distinction between copyright in a musical composition, copyright in lyrics, and copyright in sound recordings forming part of a cinematograph film. The Court was required to determine whether celebrated composer Ilaiyaraaja retained independent rights over the musical composition of the famous Tamil song “En Iniya Pon Nilave” after the song had already become part of the cinematograph film Moodu Pani. The judgment also discusses whether the composer could lawfully authorize adaptation and recreation of the song for use in another film despite rights previously assigned to Saregama India Limited.

The ruling is significant because it carefully balances the rights of music composers with the rights of producers and owners of sound recordings. The Court explained the scope of Sections 13, 14 and 17 of the Copyright Act and clarified that incorporation of a musical work into a cinematograph film does not completely extinguish the composer’s separate copyright in the musical work itself. At the same time, the Court clarified that rights over sound recordings and lyrics may belong to different copyright owners and cannot automatically be claimed by the composer.

Factual and Procedural Background

The dispute related to the well-known Tamil song “En Iniya Pon Nilave” from the cinematograph film Moodu Pani. The musical composition of the song was created by Ilaiyaraaja, while the sound recording formed part of the film soundtrack produced by Raja Cine Arts (RCA). In 1980, RCA entered into an agreement with Gramophone Company of India Limited, later renamed Saregama India Limited, assigning rights relating to the sound recordings of the film. Under the agreement dated 25 February 1980, the producer transferred gramophone recording rights and related copyright interests to the music company for valuable consideration and royalty payments. 

Years later, Ilaiyaraaja entered into an agreement dated 17 March 2023 with Vels Film International Limited (VFIL) for recreation and adaptation of the song in another cinematograph film titled Aghathiyaa. Under this agreement, Ilaiyaraaja represented himself as owner of the sound recording and underlying works and granted rights to recreate and adapt the original song. The agreement permitted VFIL to use the recreated work in multiple formats and languages. 

Saregama challenged this arrangement and filed proceedings alleging infringement of its copyright. According to Saregama, the copyright in the sound recording and associated rights had already vested in it through the 1980 assignment agreement executed with the producer RCA. Saregama contended that Ilaiyaraaja had no authority to authorize recreation or adaptation of the song in a manner that interfered with Saregama’s rights.

The learned Single Judge had accepted substantial portions of Saregama’s arguments and held against Ilaiyaraaja. Aggrieved by the findings, Ilaiyaraaja preferred an appeal before the Division Bench of the Delhi High Court.

Dispute Before the Court

The central issue before the Court concerned the location and extent of copyright ownership in the disputed song. The Court was required to determine whether Ilaiyaraaja, as composer of the musical work, continued to enjoy independent copyright protection over the musical composition despite the incorporation of the song into a cinematograph film and assignment of sound recording rights to Saregama.

Ilaiyaraaja argued that the disputed song constituted a “musical work” under Section 2(p) of the Copyright Act and that, as composer, he was the “author” under Section 2(d)(ii). Therefore, under Section 17, he remained the first owner of copyright in the musical work. He further argued that Section 13(4) protected the separate copyright existing in underlying works even after incorporation into a cinematograph film or sound recording. He also relied upon Section 14(a)(vi), which grants the owner of copyright in a musical work the exclusive right to make adaptations of that work. 

On the other hand, Saregama argued that the producer of the cinematograph film was the first owner of copyright in the film and the accompanying sound recordings. Since RCA had assigned those rights to Saregama through the 1980 agreement, Saregama became owner of the sound recording rights in the disputed song. It was further argued that Ilaiyaraaja’s rights stood exhausted once the composition became part of the cinematograph film soundtrack. Saregama also relied upon the Supreme Court judgment in Indian Performing Right Society Ltd. v. Eastern India Motion Pictures Association, (1977) 2 SCC 820, to contend that producers of cinematograph films possess overriding rights in relation to songs forming part of film soundtracks. 

Reasoning and Analysis of the Court

The Division Bench undertook a detailed interpretation of the Copyright Act, 1957. The Court first examined the definition of “musical work” under Section 2(p), which defines musical work as a work consisting of music but excluding lyrics. The Court observed that the musical composition created by Ilaiyaraaja clearly fell within this definition and therefore enjoyed copyright protection independently. 

The Court then examined Section 17, which provides that the author of a work is the first owner of copyright unless otherwise provided. Since Section 2(d)(ii) defines the composer as the author of a musical work, Ilaiyaraaja was held to be the first owner of copyright in the musical composition of the song. The Court specifically rejected the argument that clauses (b) and (c) of the proviso to Section 17 automatically divested him of his rights. According to the Court, clause (b) did not apply to musical works or sound recordings in the manner argued by Saregama, and clause (c) relating to employment contracts was inapplicable because there was no master-servant relationship between RCA and Ilaiyaraaja. 

The Court further examined Section 14(a)(vi), which grants the owner of copyright in a musical work the exclusive right to make adaptations. The Bench held that Ilaiyaraaja therefore retained the right to adapt the musical composition and authorize its use by third parties. However, the Court carefully limited this right only to the musical component of the song. The composer did not possess copyright over the lyrics or the original sound recording. 

One of the most important discussions in the judgment related to Section 13(4) of the Copyright Act. The Court emphasized that copyright in a cinematograph film or sound recording does not affect the separate copyright existing in any underlying work. Therefore, although Saregama validly owned copyright in the sound recording by virtue of the 1980 agreement, that ownership could not extinguish Ilaiyaraaja’s independent copyright in the musical composition. 

The Court then examined the 2023 agreement executed between Ilaiyaraaja and VFIL. It observed that the agreement went beyond the rights actually possessed by Ilaiyaraaja because it purported to assign rights over the sound recording and underlying works generally. The Court held that Ilaiyaraaja was not the owner of the sound recording or lyrics and therefore could not validly assign those rights. His rights extended only to the musical composition. 

The Court also distinguished the Supreme Court judgment in Indian Performing Right Society Ltd. v. Eastern India Motion Pictures Association, (1977) 2 SCC 820. The Division Bench clarified that the earlier judgment did not completely destroy the separate rights of composers protected under Section 13(4). The Court interpreted the Copyright Act harmoniously to ensure coexistence of rights between composers, lyricists, producers and sound recording owners.

Final Decision of the Court

The Division Bench partly allowed the appeal and clarified the legal position regarding ownership of musical works in cinematograph films. The Court held that Ilaiyaraaja retained copyright in the musical composition of the disputed song and consequently possessed adaptation rights in relation to that musical work. However, he did not own the copyright in the lyrics or original sound recording of the song. Saregama continued to remain owner of the sound recording rights through the 1980 assignment agreement executed by the producer RCA.

Accordingly, while Ilaiyaraaja could lawfully exploit and adapt the musical composition, he could not authorize use or assignment of rights in the sound recording or lyrics which legally belonged to others. The Court therefore drew a clear distinction between ownership of musical works and ownership of sound recordings in cinematograph films.

Point of Law Settled in the Case

The judgment settles an important principle of Indian copyright law that incorporation of a musical composition into a cinematograph film does not extinguish the composer’s independent copyright in the musical work unless such rights are specifically assigned in accordance with law. Section 13(4) preserves the separate copyright in underlying works even when the work forms part of a sound recording or cinematograph film. The decision also clarifies that composers, lyricists, producers and sound recording owners may simultaneously hold different and distinct copyrights in relation to the same song. However, each copyright owner can only exploit rights that legally vest in them and cannot assign rights beyond the scope of their ownership.

Case Details

Case Title: Mr. Ilaiyaraaja v. Saregama India Limited

Date of Judgment: 21 May 2026

Case Number: FAO(OS) (COMM) 52/2025

Neutral Citation: 2026:DHC:XXXX-DB

Court: Delhi High Court

Hon’ble Judges: Justice C. Hari Shankar and Justice Om Prakash Shukla

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Headnote

The Delhi High Court in Mr. Ilaiyaraaja v. Saregama India Limited held that a composer retains independent copyright in the musical composition of a song even after the song becomes part of a cinematograph film. The Court clarified that Section 13(4) of the Copyright Act preserves separate copyright in underlying musical works despite ownership of sound recording rights by film producers or assignees. While the composer possesses adaptation rights in relation to the musical work, rights in lyrics and sound recordings remain distinct and cannot be assigned by the composer unless vested in him. The judgment harmonizes the rights of composers, producers and sound recording owners under Sections 13, 14 and 17 of the Copyright Act, 1957.

Disclaimer: Readers are advised not to treat this as substitute for legal advise as it may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

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IndiaMart Inter Mesh Limited Vs. Open AI Inc.

In Indiamart Inter Mesh Limited Vs Open AI Inc. and Ors., decided on 20 May 2026 in IA No. GA-COM/1/2025 in IP-COM/57/2025, the Calcutta High Court, Intellectual Property Rights Division, presided over by Justice Ravi Krishan Kapur, dismissed an interim injunction application filed by IndiaMart against OpenAI concerning alleged discriminatory treatment by ChatGPT Search. The Court examined whether ChatGPT’s refusal to provide active IndiaMart links in response to user queries amounted to trademark dilution, disparagement, unfair trade practice, copyright infringement and violation of the Information Technology Act, 2000. IndiaMart contended that ChatGPT deliberately bypassed its platform and directly displayed sellers’ websites, thereby causing diversion of traffic and economic loss, allegedly relying upon the USTR Notorious Markets List 2024 to exclude IndiaMart. OpenAI argued that there exists no enforceable “right to visibility” on a private AI platform and that ChatGPT’s internal policies and output generation mechanisms could not be judicially controlled at the interim stage. The Court held that no statutory, contractual or constitutional obligation existed requiring ChatGPT to display IndiaMart links in a particular manner and observed that pure economic loss without infringement of a vested legal right is not actionable. Justice Ravi Krishan Kapur further made significant observations on generative AI jurisprudence, prima facie holding that ChatGPT appears to function more as an “originator” than a mere “intermediary” under the IT Act because of its generative and synthesized outputs, while clarifying that the issue requires final adjudication after expert evidence. The Court found no prima facie case of trademark infringement, disparagement, trade libel or copyright infringement and held that compelling ChatGPT to display IndiaMart links would amount to forcing a private entity to conduct business in a particular manner. Accordingly, the interim application was dismissed while directing expeditious hearing of the suit.

Disclaimer: Donot treat this as substitute for legal advise as it may contain subjective errors.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

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IndiaMart Inter Mesh Limited v. Open AI Inc. and Ors.: A Landmark Judicial Examination of Generative AI, ChatGPT and Intermediary Liability in India

Introduction

The decision delivered by the Calcutta High Court in Indiamart Inter Mesh Limited Vs Open AI Inc. and Ors. marks one of the earliest detailed judicial discussions in India concerning the legal character of generative artificial intelligence platforms such as ChatGPT. The judgment, rendered by Justice Ravi Krishan Kapur on 20 May 2026, goes beyond a traditional intellectual property dispute and enters the evolving area of AI governance, intermediary liability, platform autonomy, economic rights on digital platforms, and the applicability of the Information Technology Act, 2000 to modern generative AI systems.

The case arose from allegations by IndiaMart that ChatGPT Search deliberately avoided displaying IndiaMart links while showing direct seller websites or competing platforms in response to user prompts. The dispute therefore raised larger questions concerning whether a private AI platform can be compelled to display or promote another business platform in a particular manner and whether generative AI systems should legally be treated as “intermediaries” or “originators” under Indian law.

The judgment is significant because the Court extensively discussed the architecture and functioning of Large Language Models (LLMs), the distinction between traditional search engines and generative AI systems, and the inadequacy of existing Indian technology law frameworks to deal with modern AI tools. Though the dispute was decided at an interim stage, the observations made by the Court are likely to influence future litigation involving artificial intelligence, digital platforms, algorithmic visibility, and AI-generated outputs in India.

Factual and Procedural Background

The petitioner, IndiaMart Inter Mesh Limited, operates one of India’s largest B2B online marketplace platforms. Since 1996, the platform has provided online business listings connecting suppliers and buyers across diverse product categories. The petitioner owns several registered trademarks associated with “IndiaMart” and claimed that a substantial part of its business depends on online visibility through internet searches and digital referrals.

The respondents included OpenAI Inc. and related entities associated with the operation of ChatGPT. The Court recorded that ChatGPT is a conversational AI platform powered through Large Language Models and capable of generating synthesized responses by processing enormous volumes of internet data.

The dispute specifically concerned “ChatGPT Search,” introduced broadly around October 2024. According to the petitioner, when users searched for products or suppliers on ChatGPT, the AI system allegedly bypassed IndiaMart links and directly displayed seller websites, whereas competing platforms allegedly received visible platform links. IndiaMart argued that this amounted to selective exclusion and discrimination against its platform.

The petitioner further alleged that OpenAI was relying upon the United States Trade Representative Review of Notorious Markets List 2024 (USTR List), where IndiaMart’s name appeared, to justify restricting visibility of IndiaMart links. IndiaMart contended that the USTR List had no binding legal force in India and that reliance upon such a foreign document was arbitrary and discriminatory.

An interim application seeking relief was filed before the Intellectual Property Rights Division of the Calcutta High Court. IndiaMart sought directions requiring ChatGPT to display accessible IndiaMart links in its responses and alleged infringement of intellectual property rights, dilution of trademark, disparagement, unfair trade practices, violation of the Information Technology Act, 2000, and violation of Articles 14, 19 and 21 of the Constitution of India.

The Dispute Before the Court

The primary issue before the Court was whether IndiaMart possessed any enforceable legal right requiring ChatGPT to display its platform links in a specific manner.

IndiaMart argued that ChatGPT was intentionally excluding the IndiaMart platform despite displaying links of competing platforms. According to the petitioner, such omission interfered with prospective business opportunities, diverted user traffic, and diluted the commercial value of its trademarks.

The petitioner relied upon Section 2(1)(w) and Section 79 of the Information Technology Act, 2000 along with Rule 3(1)(n) of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021. IndiaMart contended that ChatGPT functions as an intermediary and therefore cannot discriminate between platforms while disseminating search-related information.

The petitioner further argued that internet users possess a right to access information concerning IndiaMart and that deliberate exclusion of IndiaMart links violated constitutional guarantees under Articles 14, 19 and 21 of the Constitution.

To support its arguments, the petitioner relied upon judgments including Neptune Assurance Co. Ltd. vs. Union of India, (1973) 1 SCC 310, Press Trust of India vs. Union of India, AIR 1974 SC 1044, and Neetu Singh & Anr. v. Telegram FZ LLC & Ors., 2022 SCC OnLine Del 2637.

OpenAI, on the other hand, argued that IndiaMart had no “right to visibility” on a private platform. It was contended that no contract, statute, or constitutional provision obligated ChatGPT to display IndiaMart links. OpenAI argued that forcing such visibility would interfere with private business autonomy and disrupt the functioning of generative AI systems.

The respondents also denied that ChatGPT was a conventional search engine or intermediary. They argued that ChatGPT functions more like an “originator” under Section 2(1)(za) of the IT Act because it generates independent synthesized responses rather than merely hosting or transmitting third-party content.

The respondents relied upon several precedents including Google LLC v. DRS Logistics (P) Ltd., 2023 SCC OnLine Del 4809, Myspace Inc. v. Super Cassettes Industries Ltd., 236 (2017) DLT 478, Tech Plus Media Private Limited v. Jyoti Janda, 2014 SCC OnLine Del 1819, Jasbhai Motibhai Desai v. Roshan Kumar, (1976) 1 SCC 671, and Rohit Pulp and Paper Mills Ltd. v. Collector of Central Excise, (1990) 3 SCC 447.

Reasoning and Analysis of the Court

Justice Ravi Krishan Kapur delivered an elaborate discussion balancing technological innovation, private commercial freedom, intermediary law, and evolving AI regulation.

The Court first observed that no law compels a private business to operate according to terms dictated by another business entity. The Court emphasized principles of free market autonomy and noted that compelling a platform to display another business in a particular manner would seriously interfere with commercial freedom.

The Court referred to the common law principle discussed by Lord Diplock in Home Office vs. Dorset Yacht Co. Ltd., [1970] 2 All ER 294, observing that common law generally does not impose liability for “pure omissions” unless there exists a statutory, contractual, or constitutional duty.

According to the Court, the injury complained of by IndiaMart was essentially “pure economic loss,” namely loss of user traffic and potential profit. The Court held that such economic loss alone does not create a legal cause of action unless some enforceable legal right has been infringed.

A major part of the judgment focused upon whether ChatGPT can legally be considered an “intermediary” under Section 2(1)(w) of the IT Act or an “originator” under Section 2(1)(za).

The Court analyzed the functioning of traditional search engines and contrasted them with generative AI systems. Justice Kapur explained that traditional search engines merely crawl and rank existing internet data. In contrast, Large Language Models synthesize information, generate new responses, and create content dynamically. ChatGPT was described as a system capable of independently generating poems, research material, code, drawings and textual outputs.

The Court observed that such functions go far beyond passive hosting or transmission of third-party content. Therefore, prima facie, ChatGPT possesses characteristics of an “originator” because it creates and generates electronic records rather than merely transmitting them.

The Court observed:

“ChatGPT has an element of newness, uniqueness and originality in its results which ought to bring it within the definition of an ‘originator’ rather than an ‘intermediary’.”

However, the Court clarified that this issue is legally complex and would ultimately require final adjudication based upon technical and expert evidence during trial.

The judgment also contains important policy observations concerning AI regulation in India. Justice Kapur recognized that the Information Technology Act, 2000 was enacted long before the emergence of generative AI technologies and therefore does not adequately address modern AI systems. The Court noted that legislative intervention would eventually become necessary to define liabilities and responsibilities relating to AI platforms.

The Court further referred to Google LLC v. DRS Logistics (P) Ltd., 2023 SCC OnLine Del 4809, where the Delhi High Court observed that no third party can compel a service provider to use its services in a manner benefiting another entity. This precedent significantly influenced the Court’s conclusion.

Regarding trademark dilution and disparagement, the Court held that no actionable case had been made out because there was no deceptive publication, false representation, confusion, or trade use of IndiaMart’s mark. Mere non-display or silence could not constitute disparagement or trademark dilution.

The Court also relied upon Berger Paints India Ltd. v. JSW Paints Pvt. Ltd., 2023 SCC OnLine Cal 4949, observing that trademark dilution under Section 29(4) of the Trade Marks Act, 1999 requires use “in the course of trade,” which was absent in the present case.

On copyright claims, the Court found that IndiaMart failed to identify any specific copyrighted work allegedly infringed by ChatGPT. Reliance was placed upon Tech Plus Media Private Ltd. v. Jyoti Janda, 2014 SCC OnLine Del 1819.

The Court also rejected the argument that reliance upon the USTR List itself created a legal wrong. According to the Court, OpenAI’s decision to rely upon such reports formed part of its internal policy and business decision-making process, which was not ordinarily justiciable.

Another important aspect discussed by the Court concerned the risk of opening “floodgates of litigation.” The Court cited the famous observation of Cardozo CJ in Ultramares Corp. v. Touche, (1931) 255 NY 170, warning against “liability in an indeterminate amount for an indeterminate time to an indeterminate class.”

The Court ultimately concluded that granting interim relief would effectively amount to compelling specific performance requiring continuous judicial supervision over AI outputs and platform functioning.

Final Decision of the Court

The Calcutta High Court dismissed the interim application filed by IndiaMart and refused to direct ChatGPT to display IndiaMart links in a particular manner. The Court held that IndiaMart failed to establish a prima facie case, balance of convenience, or irreparable injury necessary for grant of interim injunction.

The Court clarified that no vested legal right had been shown by the petitioner requiring enforcement against OpenAI or ChatGPT. The suit itself, however, remains pending for final adjudication, and the parties were directed to take steps for expeditious hearing.

Point of Law Settled in the Case

The judgment lays down several important legal principles relating to generative AI and platform liability in India.

The Court prima facie recognized that generative AI systems like ChatGPT may not neatly fit within the conventional definition of “intermediary” under the Information Technology Act, 2000 and may instead function as “originators” because of their ability to generate synthesized and original outputs.

The judgment also establishes that no private business possesses an automatic legal right to algorithmic visibility or preferential display on another private digital platform unless supported by a specific legal, statutory, or contractual right.

Further, the decision reinforces the principle that pure economic loss and loss of internet traffic, without infringement of a substantive legal right, are insufficient to sustain claims of trademark dilution, disparagement, or unfair trade practices.

The judgment is likely to become an important precedent in future Indian litigation involving artificial intelligence, algorithmic governance, digital platform autonomy, intermediary liability, and AI regulation.

Case Details

Title of the Case: IndiaMart Inter Mesh Limited Vs. Open AI Inc. and Ors.

Date of Judgment: 20 May 2026

Case Number: IA No. GA-COM/1/2025 in IP-COM/57/2025

Neutral Citation: 2026 SCC OnLine Cal ___ (Neutral citation not available in uploaded copy)

Court: Intellectual Property Rights Division, Original Side

Name of High Court: Calcutta High Court

Coram: Hon’ble Justice Ravi Krishan Kapur

Headnote

The Calcutta High Court in IndiaMart Inter Mesh Limited v. Open AI Inc. and Ors. refused interim relief against ChatGPT concerning alleged exclusion of IndiaMart links from AI-generated responses. The Court held that no entity possesses a legal “right to visibility” on a private AI platform and prima facie observed that generative AI systems like ChatGPT may function more as “originators” than “intermediaries” under the Information Technology Act, 2000 due to their ability to synthesize and generate new content. The Court further held that mere economic loss arising from reduced digital visibility, without infringement of a substantive legal right, does not constitute actionable trademark dilution, disparagement, or unfair trade practice.

Disclaimer: Readers are advised not to treat this as substitute for legal advise as it may contain errors in perception, interpretation, and presentation]

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

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Best Agrolife Limited v. Deputy Controller of Patents

In Best Agrolife Limited v. Deputy Controller of Patents & Anr., the High Court of Delhi on 7 July 2022 in W.P.(C)-IPD 11/2022, delivered a judgment by Justice Jyoti Singh allowing the writ petition filed by Best Agrolife Limited. The Court set aside the order dated 08.04.2022 passed by the Deputy Controller of Patents granting Patent No. IN 394568 to GSP Crop Science Pvt. Ltd. for a synergistic suspo-emulsion formulation of Pyriproxyfen and Diafenthiuron, after dismissing the pre-grant opposition.

The Petitioner challenged the grant on grounds including lack of novelty, inventive step, and non-patentability under Sections 3(d) and 3(e) of the Patents Act. The Court held that the impugned order was non-speaking and suffered from serious violation of principles of natural justice as the Deputy Controller failed to consider the Petitioner’s substantive objections, particularly under Section 3(d), relevant prior art documents, and allowed claim amendments without notice to the opponent. While noting the availability of post-grant remedies, the Court exercised writ jurisdiction due to manifest procedural irregularities. The matter was remanded to the Controller for fresh adjudication in accordance with law.

Disclaimer: Donot treat this as substitute for legal advise as it may contain subjective errors. Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

#DelhiHighCourt, #PatentOpposition, #Section3dPatentsAct, #PreGrantOpposition, #AgrochemicalPatent, #NaturalJustice, #WritPetitionIPD, #JusticeJyotiSingh, #PatentRemand, #IPLitigation, #IPUpdate, #AdvocateAjayAmitabhSuman, #IPAdjutor

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Introduction

In a notable judgment concerning patent opposition proceedings in the agrochemical sector, the Delhi High Court has underscored the importance of reasoned orders by the Patent Office and strict adherence to principles of natural justice while deciding pre-grant oppositions. The ruling highlights that even at the pre-grant stage, the Controller must address all substantial grounds raised by the opponent, particularly objections under Section 3(d) of the Patents Act, 1970, which acts as a crucial filter against evergreening of patents.

Factual and Procedural Background

GSP Crop Science Pvt. Ltd. (Respondent No. 2) filed patent application No. 284/MUM/2014 on 27 January 2014 for a synergistic suspo-emulsion formulation of Pyriproxyfen and Diafenthiuron. The application was published on 11 September 2015. After examination and amendments, Best Agrolife Limited (Petitioner) filed a pre-grant opposition on 4 March 2021 under Section 25(1) of the Patents Act, raising multiple grounds including lack of novelty, inventive step, and non-patentability under Sections 3(d) and 3(e). Several other parties also filed oppositions.

The Deputy Controller of Patents heard the matter and passed an order on 8 April 2022 granting the patent (IN 394568) while dismissing the oppositions. Aggrieved by this, Best Agrolife filed the writ petition under Article 226 of the Constitution, challenging the order primarily on grounds of non-application of mind, violation of natural justice, and failure to consider key objections.

Dispute

The core dispute centred on whether the Controller’s order granting the patent was sustainable when it allegedly failed to address the Petitioner’s opposition under Section 3(d) of the Patents Act, did not properly evaluate prior art documents, and allowed claim amendments without notice to the opponent. The Petitioner also questioned the maintainability of the writ petition, given the availability of post-grant remedies.

Reasoning and Analysis of the Judge

Justice Jyoti Singh delivered the judgment on 7 July 2022. The Court first examined the maintainability of the writ petition. While acknowledging alternative remedies like post-grant opposition under Section 25(2) or revocation under Section 64, the Court relied on the Supreme Court’s decision in Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Others, (1998) 8 SCC 1, and Radha Krishan Industries v. State of Himachal Pradesh, (2021) 6 SCC 771. It held that writ jurisdiction can be invoked where there is violation of principles of natural justice or manifest error, and relegating the Petitioner to statutory remedies would cause injustice.

On merits, the Court found the impugned order suffered from serious infirmities. The Petitioner had specifically raised objections under Section 3(d), arguing that the claimed suspo-emulsion was a new form of a known combination that did not demonstrate enhanced efficacy. However, the Controller’s order did not even mention Section 3(d). The Judge referred to the landmark Supreme Court judgment in Novartis AG v. Union of India, (2013) 6 SCC 1, explaining that Section 3(d) sets a higher threshold to prevent evergreening by requiring enhanced efficacy for new forms of known substances. The Court clarified that Section 3(d) (enhanced efficacy) and Section 3(e) (synergistic effect in admixtures) operate in different fields and both needed independent consideration.

The order was described as non-speaking and unreasoned on vital grounds. The Court also noted failure to consider several prior art documents and allowing amendments to claims just two days before the order without giving the Petitioner an opportunity to respond, violating natural justice. Reliance was placed on Agriboard International LLC v. Deputy Controller of Patents, 2022 SCC OnLine Del 940, and Gilead Pharmasset, LLC v. Union of India, 2015 SCC OnLine Del 7014, to stress the need for reasoned decisions.

Final Decision of the Court

The Delhi High Court allowed the writ petition, set aside the impugned order dated 8 April 2022 granting the patent, and remanded the matter back to the Deputy Controller for fresh consideration in accordance with law, after giving due opportunity to all parties.

Point of Law Settled in the Case

The judgment reinforces that pre-grant oppositions must be decided through speaking orders addressing all substantial grounds raised, particularly under Section 3(d). Non-consideration of key statutory objections or violation of natural justice (such as deciding amendments without notice) renders the order unsustainable, justifying interference under Article 226 despite alternative remedies. It reiterates the distinct roles of Sections 3(d) and 3(e) and the binding principles from Novartis on preventing evergreening in chemical/agrochemical patents.

Case Detail Title: Best Agrolife Limited Vs Deputy Controller of Patents & Anr. Date of Order: 7th July, 2022 Case Number: W.P.(C)-IPD 11/2022 & CM APPL. 32/2022, 54/2022, 55/2022 Neutral Citation: 2022:DHC:XXXX (as per available records) Name of Court: High Court of Delhi Name of Hon'ble Judge: Hon'ble Ms. Justice Jyoti Singh

Disclaimer: Readers are advised not to treat this as substitute for legal advise as it may contain errors in perception, interpretation, and presentation

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

Suitable SEO Titles for Legal Journal: Delhi High Court Sets Aside Patent Grant Order for Non-Consideration of Section 3(d) in Pre-Grant Opposition, Best Agrolife Vs Deputy Controller of Patents Judgment on Natural Justice in Patent Matters, Justice Jyoti Singh Remands Agrochemical Patent Case Emphasising Enhanced Efficacy Test, Delhi High Court Reiterates Novartis Principles in Section 3(d) Agrochemical Dispute

SEO Tags: Delhi High Court, Pre Grant Opposition, Section 3(d) Patents Act, Section 3(e) Patents, Patent Evergreening, Natural Justice Patent Office, Jyoti Singh J, Agrochemical Patent, IN 394568, Best Agrolife Limited

AdvocateAjayAmitabhSuman, IPAdjutor

Headnote: Delhi High Court allows writ petition by Best Agrolife Limited, quashes order granting patent IN 394568 to GSP Crop Science, holding that non-consideration of Section 3(d) objection, failure to address prior art, and allowing amendments without notice violated principles of natural justice. Matter remanded for fresh decision. Court clarifies distinct application of Sections 3(d) and 3(e) following Novartis principles.

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Reddy Pharmaceuticals v. Dr. Reddy’s Laboratories Ltd.

In Reddy Pharmaceuticals v. Dr. Reddy’s Laboratories Ltd. & Anr., the High Court of Delhi on 18 May 2026 in RFA(OS) 138/2013 and connected W.P.(C) 654/2014, delivered a common judgment by the Division Bench comprising Justices C. Hari Shankar and Om Prakash Shukla. The Court upheld the learned Single Judge’s decree dated 13.09.2013, which had granted a permanent injunction restraining Reddy Pharmaceuticals Ltd. (RPL) from using the mark “REDDY” in relation to pharmaceutical products, finding it amounted to passing off.

Dr. Reddy’s Laboratories (DRL) claimed that its long and continuous use of the trading style “Dr. Reddy’s” had caused the expression “REDDY” to acquire distinctiveness and secondary meaning exclusively associated with DRL. RPL contended that “REDDY” was a common surname forming part of its bona fide corporate name and house mark, adopted honestly by its Managing Director. The Court held that DRL’s prior adoption and extensive use conferred superior common law rights, and RPL’s use was likely to cause confusion in the pharmaceutical trade. The IPAB’s order for rectification of the Register by removal of RPL’s “REDDY” registration was also sustained. The appeals and writ petition were accordingly dismissed.

Disclaimer: Donot treat this as substitute for legal advise as it may contain subjective errors. Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

#DelhiHighCourt, #TrademarkPassingOff, #ReddyTrademark, #PharmaTrademarkDispute, #DrReddys, #TradeMarkRectification, #Section35TradeMarksAct, #IPLitigation, #JusticeCHariShankar, #JusticeOmPrakashShukla, #IPUpdate, #AdvocateAjayAmitabhSuman, #IPAdjutor

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Introduction

In a significant ruling on trademark rights involving common surnames in the pharmaceutical sector, the Division Bench of the Delhi High Court has clarified the scope of protection available to a trading style that has acquired distinctiveness and secondary meaning through long and continuous use. The judgment balances the rights of prior users with the limitations on adopting surnames in a manner that may cause confusion in the market, particularly in the sensitive field of medicines.

Factual and Procedural Background

Dr. Reddy’s Laboratories Ltd. (DRL), a well-known pharmaceutical company founded in 1984 by Dr. K. Anji Reddy, has been using the trading style “Dr. Reddy’s Laboratories” for decades. Reddy Pharmaceuticals Ltd. (RPL), incorporated in 1996 with a Managing Director bearing the surname Reddy, initially acted as a supplier and later as a del credere agent for DRL’s products. From around 2003, RPL began marketing finished pharmaceutical formulations using “REDDY” prominently as part of its corporate name and house mark.

DRL filed a suit (CS(OS) 2194/2003) seeking permanent injunction for passing off and related reliefs, claiming that RPL’s use of “REDDY” was likely to cause confusion and amounted to passing off. Parallelly, DRL initiated rectification proceedings before the Intellectual Property Appellate Board (IPAB) seeking removal of RPL’s “REDDY” trademark registration. The learned Single Judge, by judgment dated 13 September 2013, decreed the suit substantially in favour of DRL, granting a permanent injunction against RPL’s use of “REDDY” for pharmaceutical products and directing rendition of accounts. The IPAB also ordered rectification by removing RPL’s registration.

RPL challenged the Single Judge’s decree in RFA(OS) 138/2013 and the IPAB order in W.P.(C) 654/2014. Both matters were heard together.

Dispute

The central dispute was whether DRL could claim exclusive rights over the expression “REDDY” in the pharmaceutical trade through prior use and acquired distinctiveness, or whether RPL could legitimately use it as part of its corporate name derived from its Managing Director’s surname. Key issues included likelihood of confusion, bona fide adoption, passing off, acquiescence, and validity of RPL’s trademark registration.

Reasoning and Analysis of the Judge

The Division Bench comprising Justice C. Hari Shankar and Justice Om Prakash Shukla, with Justice Om Prakash Shukla authoring the judgment delivered on 18 May 2026, undertook a detailed examination of the pleadings, evidence, and legal principles. The Court noted that DRL had been using “Dr. Reddy’s” since 1984 and had built substantial goodwill. It held that the word “REDDY” had become the dominant and essential feature of DRL’s trading style and had acquired secondary meaning exclusively associated with DRL’s products.

The Bench rejected RPL’s defence of bona fide adoption of a common surname, observing that while surnames can be used, such use becomes objectionable when it is likely to cause confusion in the market, especially in pharmaceuticals where public interest demands higher scrutiny (referring to principles from Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., (2001) 5 SCC 73). The Court found evidence of mala fide intent, including RPL’s use of DRL’s address (Ameerpet, Hyderabad) on packaging and its prior relationship as DRL’s agent.

On acquiescence and delay, the Bench held that no real conflict existed while RPL was only supplying bulk drugs. The dispute arose when RPL entered formulations business in 2003, and DRL acted promptly. Thus, the defence of laches was not available. The Court affirmed that prior adoption and use confer superior common law rights over subsequent registration.

The Bench upheld the Single Judge’s findings on passing off and sustained the injunction. It also upheld the IPAB’s rectification order removing RPL’s “REDDY” registration, as the registration was obtained without sufficient cause and remained wrongly on the register.

Final Decision of the Court

On 18 May 2026, the Division Bench dismissed the appeal (RFA(OS) 138/2013) and the writ petition (W.P.(C) 654/2014), substantially upholding the learned Single Judge’s decree and the IPAB’s rectification order. The permanent injunction against RPL using “REDDY” in relation to pharmaceutical products was affirmed.

Point of Law Settled in the Case

The judgment settles that in the pharmaceutical sector, a trading style or mark containing a common surname can acquire distinctiveness and secondary meaning through long, continuous and extensive use, conferring superior common law rights that prevail over subsequent registration by another party. It reiterates that bona fide use of a personal name is not an absolute defence if the adoption creates likelihood of confusion or exploits another’s goodwill. Priority of adoption and use takes precedence, and actions for passing off can succeed even without registration where secondary meaning is established.

Case Detail Title: Reddy Pharmaceuticals vs Dr. Reddy’s Laboratories Ltd. & Anr. Date of Order: 18 May 2026 Case Number: RFA(OS) 138/2013 & W.P.(C) 654/2014 Neutral Citation: 2026:DHC:4402-DB Name of Court: High Court of Delhi Name of Hon'ble Judges: Hon'ble Mr. Justice C. Hari Shankar and Hon'ble Mr. Justice Om Prakash Shukla

Disclaimer: Readers are advised not to treat this as substitute for legal advise as it may contain errors in perception, interpretation, and presentation

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

Suitable SEO Titles for Legal Journal: Delhi High Court Upholds Dr Reddy’s Rights Over REDDY Mark in Passing Off Dispute, Reddy Pharmaceuticals vs Dr Reddy’s Laboratories Division Bench Judgment on Surname Trademark, Justice Om Prakash Shukla Ruling on Secondary Meaning in Pharma Trademarks, Delhi High Court Affirms Injunction and Rectification in REDDY Trademark Battle

SEO Tags: Delhi High Court, Trademark Passing Off, Pharma Trademark Dispute, Secondary Meaning, Reddy Mark, Surname Trademark, Intellectual Property, Injunction in Trademark, Trade Marks Act, IPAB Rectification

AdvocateAjayAmitabhSuman, IPAdjutor

Headnote: Delhi High Court Division Bench dismisses appeal by Reddy Pharmaceuticals Ltd. and upholds decree in favour of Dr. Reddy’s Laboratories, holding that “REDDY” acquired distinctiveness and secondary meaning through DRL’s prior continuous use. RPL’s adoption held likely to cause confusion and passing off; permanent injunction and rectification of register sustained.

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K K Bansal & Anr. Vs. Koninklijke Philips Electronics NV

In K K Bansal & Anr. Vs. Koninklijke Philips Electronics NV, the High Court of Delhi on 18 May 2026 in RFA(OS)(COMM) 17/2018 & 18/2018 delivered a detailed judgment by a Division Bench comprising Justices C. Hari Shankar and Om Prakash Shukla, partly allowing the appeals filed by K.K. Bansal and Rajesh Bansal against the judgment of the learned Single Judge dated 12 July 2018.

The dispute centered on Indian Patent IN 184753 held by Philips, claimed to be a Standard Essential Patent (SEP) for decoding technology used in DVD players. Philips alleged that the Bansals infringed the patent by manufacturing and selling DVD players without obtaining a licence. The Single Judge had held the patent to be an SEP, found infringement, and awarded royalty at FRAND rates along with punitive damages.

The Division Bench undertook an extensive analysis of SEP jurisprudence, essentiality, infringement (both direct and indirect tests), patent exhaustion under Section 107A(b), and FRAND obligations. While acknowledging the complexities involved in SEP litigation, the Court held that the Single Judge’s quantification of damages and royalty rates suffered from several infirmities, including insufficient evidence on FRAND compliance and mapping. The appeals were partly allowed and the damages awarded were set aside.

Disclaimer: Donot treat this as substitute for legal advise as it may contain subjective errors. Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

#DelhiHighCourt, #SEPInfringement, #StandardEssentialPatent, #DVDPatent, #FRAND, #PatentExhaustion, #PhilipsvBansal, #IPLitigation, #RFAOSCOMM, #JusticeCHariShankar, #IPUpdate, #AdvocateAjayAmitabhSuman, #IPAdjutor

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Introduction

Standard Essential Patents (SEPs) occupy a unique position in patent law because they cover technologies that have become industry standards, ensuring compatibility across devices from different manufacturers. In a comprehensive judgment, the Division Bench of the Delhi High Court examined critical issues relating to SEPs, including their essentiality, proof of infringement, the doctrine of patent exhaustion, and the requirement of offering licences on Fair, Reasonable and Non-Discriminatory (FRAND) terms. The ruling provides important guidance on balancing the rights of patent holders with the need to prevent abuse of dominant market positions through patent pools.

Factual and Procedural Background

Koninklijke Philips Electronics NV (Philips) filed two commercial suits against K K Bansal (proprietor of Bhagirathi Electronics) and Rajesh Bansal (proprietor of Mangalam Technology). Philips alleged that the defendants were manufacturing and selling DVD video players that infringed its Indian Patent No. IN 184753 titled “Decoding device for converting a modulated signal to a series of m-bit information words.” This patent, granted on 13 February 1995, corresponded to US Patent 5696505 and European Patent EP 745254B1, which Philips claimed were recognised as SEPs for DVD technology.

Philips asserted that its patent was essential to the DVD standard set by the DVD Forum. It claimed willingness to license the patent on FRAND terms, but the defendants were unwilling licensees who continued to sell infringing DVD players without taking a licence. The suits sought injunctions and damages. During the pendency of the suits, the patent expired on 12 February 2015, rendering the injunction claims infructuous. A learned Single Judge of the Delhi High Court, by a common judgment dated 12 July 2018, held the patent to be an SEP, found infringement, and decreed the suits in favour of Philips, awarding royalty at specified FRAND rates along with punitive damages of Rs. 5 lakhs against Rajesh Bansal and directing an inquiry into the number of infringing players sold.

Aggrieved by the judgment, K K Bansal and Rajesh Bansal filed appeals before the Division Bench, which were reserved on 17 December 2025 and pronounced on 18 May 2026.

Dispute

The core dispute revolved around whether Philips’ patent was a valid SEP for DVD technology, whether the defendants’ DVD players infringed it, whether the doctrine of patent exhaustion applied because the defendants sourced components such as printed circuit boards (PCBs) containing the technology from authorised suppliers, and whether Philips had offered a FRAND licence. The defendants also challenged the quantification of damages and the award of punitive damages.

Reasoning and Analysis of the Judge

The Division Bench comprising Justice C. Hari Shankar and Justice Om Prakash Shukla, with Justice Hari Shankar authoring the judgment, provided an extensive prefatory note on SEPs, drawing heavily from the Division Bench decision in Intex Technologies (India) Ltd v. Telefonaktiebolaget L.M. Ericsson (2015 SCC OnLine Del 1845 (DB)). The Court explained that SEPs require proof of a standard set by a recognised Standard Setting Organisation (SSO), essentiality of the patent to that standard through proper mapping, and a commitment by the patentee to license on FRAND terms.

The Bench analysed the nature of the invention in IN 184753, which relates to a decoding device converting 16-bit code words to 8-bit information words using a “look ahead” mechanism involving specific bit positions. It examined whether this technology was essential to the DVD standard and whether the defendants’ products infringed it, considering both direct and indirect tests of infringement as approved in the Intex case.

On the defence of patent exhaustion under Section 107A(b) of the Patents Act, 1970, the Court considered the defendants’ plea that they purchased chips/PCBs from authorised sources like MediaTek. The judgment discussed international exhaustion principles and their application to components incorporated in finished products.

Regarding FRAND, the Bench stressed that the patentee must demonstrate it is a willing licensor by making a specific, written FRAND offer and providing sufficient information for the prospective licensee to evaluate it. The Court referred to the CJEU decision in Huawei Technologies Co. Ltd v. ZTE Corp. (Case No. C-170/13) for the step-by-step protocol involving notice, offer, counter-offer, and security. The Bench found that the rates offered and the evidence led by Philips did not sufficiently establish that the terms were FRAND. It also held that royalty could not be calculated on the entire value of the DVD player but only on the smallest salable patent-practising unit.

The judgment cited several authorities including Microsoft Corporation v. Motorola Inc. (US Court of Appeals) on the value of standards and anti-competitive risks, and discussed claim-to-standard and claim-to-product mapping requirements under the Delhi High Court Patent Rules.

Final Decision of the Court

On 18 May 2026, the Division Bench allowed the appeals in substantial measure. While upholding certain findings on the technical aspects, the Court set aside the Single Judge’s quantification of royalty and the award of punitive damages, finding the evidence on FRAND compliance and damages insufficient. The Bench remanded aspects relating to actual damages for fresh consideration where necessary, while clarifying important legal positions on SEP litigation.

Point of Law Settled in the Case

The judgment reinforces that in SEP cases, the patentee bears a heavy burden to prove essentiality through proper mapping, infringement (directly or indirectly), and willingness to license on genuinely FRAND terms with adequate disclosure. It clarifies the application of patent exhaustion to imported components and emphasises that royalty should be based on the patent-practising unit rather than the entire end product. The ruling underscores the need for fair inquiry and evidence before awarding punitive damages or high royalty rates in SEP disputes.

Case Detail Title: K K Bansal & Anr. vs Koninklijke Philips Electronics NV Date of Order: 18 May 2026 Case Number: RFA(OS)(COMM) 17/2018 & RFA(OS)(COMM) 18/2018 Neutral Citation: 2026: DHC: 4317-DB Name of Court: High Court of Delhi Name of Hon'ble Judges: Hon'ble Mr. Justice C. Hari Shankar and Hon'ble Mr. Justice Om Prakash Shukla

Disclaimer: Readers are advised not to treat this as substitute for legal advise as it may contain errors in perception, interpretation, and presentation

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

Suitable SEO Titles for Legal Journal: Delhi High Court Division Bench Ruling on Philips SEP DVD Patent Infringement and FRAND Obligations, K K Bansal vs Koninklijke Philips Judgment on Standard Essential Patents Exhaustion, Justice C Hari Shankar SEP Royalty Calculation on Smallest Salable Unit, Delhi High Court Clarifies Patent Exhaustion and FRAND in DVD Player SEP Case

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AdvocateAjayAmitabhSuman, IPAdjutor

Headnote: Delhi High Court Division Bench in appeals by K K Bansal and Rajesh Bansal partially allows challenges to Single Judge decree in Philips SEP suits concerning IN 184753, clarifies essentiality, infringement mapping, patent exhaustion for components, and strict requirements for proving FRAND offers while setting aside royalty and punitive damages quantification for want of sufficient evidence.

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Shri Shatruhan Lal Dadsena Vs. Chhattisgarh State Information Commission

In Shri Shatruhan Lal Dadsena v. Chhattisgarh State Information Commission & Ors, the High Court of Chhattisgarh at Bilaspur on 13 May 2026 in WPC No. 3944 of 2021 allowed the writ petition and set aside the order dated 29.05.2021 passed by the Chhattisgarh State Information Commission imposing a penalty of Rs.25,000/- in each of four complaints along with recommendation for disciplinary action against the petitioner, who was then Secretary and Public Information Officer of Gram Panchayat Dongarigardh.

The dispute arose when Respondent No.3 filed four RTI applications seeking information on forest rights leases and related documents. Complaints were filed directly before the State Information Commission under Section 18(1)(c) of the RTI Act, 2005 without preferring a first appeal under Section 19. The Commission imposed the maximum penalty for alleged delay in furnishing information.

Justice Amitendra Kishore Prasad held that the complaints under Section 18 were not maintainable as the statutory appellate remedy under Section 19 was not exhausted. The Court further observed that there was no conclusive proof of receipt of the RTI applications by the petitioner, no proper inquiry was conducted, and reasonable opportunity of hearing was not afforded, especially as the petitioner could not join the video conferencing hearing due to technical failure. The imposition of penalty without establishing mala fide or absence of reasonable cause was unsustainable.

The writ petition was allowed and the impugned order was quashed with a direction to refund any amount deposited by the petitioner.

Disclaimer: Donot treat this as substitute for legal advise as it may contain subjective errors. Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

#ChhattisgarhHighCourt, #RTIAct2005, #PIOPenalty, #Section18RTI, #Section20RTI, #NaturalJustice, #RTILitigation, #InformationCommission, #WritPetition, #JusticeAmitendraKishorePrasad, #IPUpdate, #AdvocateAjayAmitabhSuman, #IPAdjutor

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Introduction

The Right to Information Act, 2005 aims to promote transparency while balancing the duties of public servants. In a significant ruling, the High Court of Chhattisgarh has clarified important safeguards available to Public Information Officers (PIOs) when facing penalties for alleged delays or non-supply of information. The Court emphasized the need to follow proper procedures, including giving fair opportunity of hearing and exhausting statutory remedies before imposing penalties.

Factual and Procedural Background

Shri Shatruhan Lal Dadsena, the petitioner, was serving as Secretary of Gram Panchayat Dongarigardh in District Mungeli, Chhattisgarh and was also the Public Information Officer for that office. Respondent No.3, Shri Nitin Singhvi, filed four separate RTI applications on 21 August 2018 seeking details related to forest rights leases, constitution of Forest Rights Committee, objections sent to higher committees, and related official letters under the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006.

The petitioner claimed that he never received these four RTI applications and there was no record of them in the panchayat office. After about six months, on 22 February 2019, Respondent No.3 filed four separate complaints directly before the Chhattisgarh State Information Commission under Section 18(1)(c) of the RTI Act without approaching the First Appellate Authority. The Commission entertained the complaints and, after issuing notice, passed an order on 29 May 2021 imposing a penalty of Rs.25,000 on the petitioner in each of the four complaints (total Rs.1,00,000) and recommended disciplinary action against him for delay in furnishing information.

Aggrieved by this order, the petitioner filed a writ petition before the High Court of Chhattisgarh.

Dispute

The main dispute was whether the State Information Commission was justified in imposing the maximum penalty on the PIO without proper proof that the RTI applications were received by him, without following the first appeal route, and without granting a meaningful opportunity of hearing. The petitioner argued that he appeared for the video conferencing hearing but could not connect due to internet failure at the NIC centre, yet the Commission passed an ex-parte order. He also contended that filing four separate applications on the same subject amounted to harassment.

Reasoning and Analysis of the Judge

Justice Amitendra Kishore Prasad carefully examined the provisions of the RTI Act, particularly Sections 18, 19, and 20. The Court referred to the Bombay High Court judgment in Goa Cricket Association vs. State of Goa (Writ Petition No.739 of 2010, decided on 22 March 2013, 2013 (4) MhLJ 453). In that case, the Bombay High Court held that Section 18 of the RTI Act is meant for specific complaints and does not normally allow bypassing the first appeal under Section 19 when the grievance relates to non-supply or delay in information.

The Judge also relied on Reserve Bank of India, Mumbai vs. Rui Ferreira and Ors (W.P. Nos.132 and 307 of 2011, decided on 28 July 2011, 2011 (5) MhLJ 765), where it was observed that parties cannot bypass the statutory appeal mechanism under Section 19 and directly approach the Commission under Section 18 for grievances arising from non-furnishing of information.

On the question of penalty under Section 20(1), the Court discussed the Delhi High Court ruling in Shamik Nag vs. The Public Information Officer, Oriental Bank of Commerce (WPC No.8913 of 2016, decided on 4 August 2017). This judgment clarified that penalty can be imposed only after a proper inquiry and after giving the PIO a reasonable opportunity of being heard, as mandated by the proviso to Section 20(1). The burden to prove reasonable and diligent action lies on the PIO, but this burden can only be discharged if a genuine hearing is provided.

In the present case, the Judge found that the petitioner had raised a credible defence that the RTI applications were never received. There was no conclusive evidence of delivery or acknowledgment. The Commission did not conduct a proper inquiry into this aspect. Additionally, the technical failure during the video conferencing hearing was not adequately considered, and no further opportunity was given, violating principles of natural justice. The Court also noted that the information was eventually supplied after the notice from the Commission.

Final Decision of the Court

On 13 May 2026, the High Court of Chhattisgarh allowed the writ petition and quashed the impugned order dated 29 May 2021 passed by the State Information Commission in all four complaint cases. The Court directed refund of any amount deposited by the petitioner within eight weeks.

Point of Law Settled in the Case

The judgment settles that complaints under Section 18(1)(c) of the RTI Act should not ordinarily be entertained when the grievance is of delay or non-supply of information, without first exhausting the appeal remedy under Section 19. It further reinforces that imposition of penalty under Section 20(1) requires clear evidence of receipt of application, deliberate default or mala fide action, and a meaningful opportunity of hearing to the PIO. Technical difficulties in virtual hearings must be considered fairly before passing ex-parte penal orders.

Case Detail Title: Shri Shatruhan Lal Dadsena vs Chhattisgarh State Information Commission & Ors. Date of Order: 13 May 2026 Case Number: WPC No. 3944 of 2021 Neutral Citation: Not Available Name of Court: High Court of Chhattisgarh at Bilaspur Name of Hon'ble Judge: Hon'ble Mr. Justice Amitendra Kishore Prasad

Disclaimer: Readers are advised not to treat this as substitute for legal advise as it may contain errors in perception, interpretation, and presentation

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

Suitable SEO Titles for Legal Journal: Chhattisgarh High Court Quashes Rs 1 Lakh Penalty on PIO for RTI Delay Citing Lack of Hearing and Proof of Receipt, Section 18 vs Section 19 RTI Act Maintainability Judgment by Chhattisgarh High Court, Justice Amitendra Kishore Prasad Ruling on Natural Justice in RTI Penalty Cases, RTI Penalty Quashed Due to Non Exhaustion of First Appeal and Technical Hearing Failure

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AdvocateAjayAmitabhSuman, IPAdjutor

Headnote: Chhattisgarh High Court allows writ petition and quashes penalty of Rs.25,000 imposed in each of four complaints on PIO holding that direct complaint under Section 18 bypassing first appeal under Section 19 was not proper, no conclusive proof of receipt of RTI applications existed, and reasonable opportunity of hearing was not granted especially due to technical failure in video conferencing. Penalty order set aside with direction for refund.

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Biswanath Hosiery Mills Limited v. Anila Kedia

In Biswanath Hosiery Mills Limited v. Anila Kedia, the Intellectual Property Rights Appellate Division of the High Court at Calcutta on 15 May 2026 in FMAT-IPD/2/2026 dismissed the appeal filed by Biswanath Hosiery Mills Limited against the order of the Commercial Court at Rajarhat dated 23 December 2025 refusing interim injunction under Order XXXIX Rules 1 & 2 CPC.

The appellant, holder of registered word and label mark ‘ONN’ for hosiery products, alleged infringement and passing off by the respondent’s use of ‘ON & ON’. The respondent contended that the appellant was estopped from claiming similarity, as in its 2011 reply to the Trademark Registry’s objection, the appellant had described ‘ONN’ as a coined, meaningless expression visually, structurally, and conceptually different from similar marks like ‘ON-N-ON’.

The Division Bench comprising Justice Debangsu Basak and Justice Md. Shabbar Rashidi held that the appellant failed to make out a prima facie case for injunction. On the parity of its own stand before the Registrar, ‘ONN’ could not be treated as deceptively similar to ‘ON & ON’ at the interim stage. The Court declined to interfere with the impugned order refusing injunction.

Disclaimer: Donot treat this as substitute for legal advise as it may contain subjective errors. Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

#CalcuttaHighCourt, #TrademarkInfringement, #InterimInjunction, #HosieryTrademark, #ONNTrademark, #PassingOff, #IPLitigation, #EstoppelInTrademark, #Order39CPC, #JusticeDebangsuBasak, #IPUpdate, #AdvocateAjayAmitabhSuman, #IPAdjutor

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Introduction

In a notable decision on trademark disputes involving prior statements made before the Registrar, the Calcutta High Court has highlighted the principle of estoppel in interim injunction matters. The Court refused to restrain the use of a similar mark when the plaintiff had previously taken a contradictory stand before the Trademark Registry that its own mark was distinct from cited marks.

Factual and Procedural Background

Biswanath Hosiery Mills Limited, a manufacturer and seller of hosiery products, holds registrations for the word and label mark "ONN". The company filed a commercial suit seeking injunction against Anila Kedia for using the mark "ON & ON" on similar goods, alleging infringement and passing off. The plaintiff claimed exclusive rights under Section 28 of the Trade Marks Act, 1999 due to its registration.

The Commercial Court at Rajarhat, by order dated 23 December 2025, dismissed the plaintiff’s application for interim injunction under Order XXXIX Rules 1 and 2 read with Section 151 of the Code of Civil Procedure. Aggrieved by this, Biswanath Hosiery Mills filed an appeal before the Intellectual Property Rights Appellate Division of the Calcutta High Court.

Dispute

The central dispute was whether the plaintiff was entitled to an interim injunction restraining the defendant from using "ON & ON". The plaintiff argued that its registered mark "ONN" gave it exclusive rights and the defendant’s mark was deceptively similar. The defendant contended that the plaintiff had suppressed material facts and was estopped from claiming similarity because, in 2011, while responding to objections from the Trademark Registrar, the plaintiff had described "ONN" as a coined, meaningless expression visually and structurally different from marks like "ON-N-ON".

Reasoning and Analysis of the Judge

The Division Bench comprising Justice Debangsu Basak and Justice Md. Shabbar Rashidi examined the matter on 15 May 2026. Justice Basak, writing for the Bench, noted that for granting an interim injunction, the Court must assess prima facie case, balance of convenience, and irreparable injury.

The Court found that when the plaintiff applied for registration of "ONN" in 2011, the Registrar raised objections under Section 11 citing similar marks including "ON-N-ON". In reply dated 30 September 2011, the plaintiff’s advocates asserted that "ONN" is a coined and meaningless expression, visually, structurally, and conceptually different from the cited marks. They provided a comparative table and relied on case law to argue dissimilarity.

The Bench observed that the defendant is using "ON & ON". Applying the same logic the plaintiff had used before the Registrar, there appeared to be no similarity sufficient for granting injunction at the prima facie stage. The Court held that the plaintiff’s earlier stand created estoppel, preventing it from now claiming deceptive similarity.

The judges emphasized that while considering an interim injunction application, the Court looks at the overall equities. Given the plaintiff’s previous representation that its mark is distinct, it could not demonstrate a strong prima facie case of infringement or passing off at this stage.

Final Decision of the Court

The Calcutta High Court dismissed the appeal (FMAT-IPD/2/2026) along with connected applications on 15 May 2026. The order of the Commercial Court refusing interim injunction was upheld. No order as to costs was passed.

Point of Law Settled in the Case

The judgment reinforces that a party seeking injunction in a trademark matter cannot take contradictory stands at different forums. Statements made before the Trademark Registry regarding distinctiveness of one’s mark can operate as estoppel in subsequent civil proceedings when claiming similarity against another mark. It also reiterates the standard principles for granting interim injunctions – prima facie case, balance of convenience, and irreparable harm – must be satisfied convincingly, especially when prior conduct of the plaintiff weakens its case.

Case Details Title: Biswanath Hosiery Mills Limited vs Anila Kedia Date of Order: 15 May 2026 Case Number: FMAT-IPD/2/2026 Neutral Citation: 2026:CHC-AS:749-DB (as per document) Name of Court: High Court at Calcutta (Civil Appellate Jurisdiction, Intellectual Property Rights Appellate Division) Name of Hon’ble Judges: Justice Debangsu Basak and Justice Md. Shabbar Rashidi

Disclaimer: Readers are advised not to treat this as substitute for legal advise as it may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

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AdvocateAjayAmitabhSuman, IPAdjutor

Headnote: Calcutta High Court dismisses appeal against refusal of interim injunction in trademark suit holding that plaintiff’s earlier stand before Registrar describing its mark ‘ONN’ as coined and dissimilar creates estoppel against claiming similarity with defendant’s mark ‘ON & ON’. No prima facie case made out for injunction.

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