Introduction: The present case before the High Court of Himachal Pradesh addressed whether a civil dispute over an alleged patent misuse could be converted into a criminal case: The judgment provides much-needed judicial clarity on the misuse of criminal proceedings for enforcing civil rights, particularly in patent-related matters, and on the legal principles guiding the quashing of an FIR under Section 482 of the Criminal Procedure Code (CrPC).
Factual Background:The complainant (Respondent No. 3) in this case claimed to be a techno-innovator entrepreneur who developed and patented a method of dyeing textile products using natural extracts from neem and holy basil. According to the complainant, the invention was recognized nationally and internationally, and patents had been secured in India, the United States, and Europe. Seeking commercialization opportunities, the complainant submitted the patented technology to Procter & Gamble (P&G) under its Connect + Develop Program, with a proposal to use the technology in sanitary napkins and diapers.
Initially, P&G acknowledged receipt of the submission but subsequently informed the complainant that it would not pursue the proposal. However, P&G later launched a product — "Whisper Ultra Clean (with herbal oil)" — which, according to the complainant, incorporated his patented process. He alleged that the use of neem oil in the product amounted to misappropriation of his innovation.
Procedural Background:On receiving no satisfactory explanation or resolution, the complainant filed an application under Section 156(3) of the CrPC before the Judicial Magistrate First Class, Kandaghat, seeking a direction to register an FIR against P&G and its executives under Sections 120B (criminal conspiracy), 405 (criminal breach of trust), 415 and 420 (cheating) of the Indian Penal Code. The Magistrate, by order dated 30 December 2023, directed the Station House Officer (SHO), Kandaghat, to register the FIR and initiate investigation.
Aggrieved by this order and the registration of FIR No. 02/2024 dated 01 January 2024, the petitioners (P&G) approached the High Court under Section 482 CrPC seeking quashing of the FIR and all related proceedings, arguing that the complaint was frivolous, lacked ingredients of a criminal offence, and was a clear abuse of process.
Legal Issue:The central issue for consideration before the High Court was whether the allegations made in the complaint, even if taken at face value, disclosed any prima facie case of criminal wrongdoing or whether the matter was purely civil in nature involving allegations of patent infringement, for which criminal law could not be invoked?
Discussion on Judgments:The petitioners cited multiple landmark judgments to support their contention that the FIR should be quashed:
In Hridaya Ranjan Prasad Verma v. State of Bihar, (2000) 4 SCC 168, the Supreme Court held that mere breach of contract or civil wrong cannot be converted into a criminal case unless dishonest intention existed at the inception of the transaction.
G.V. Rao v. L.H.V. Prasad, (2000) 3 SCC 693, reinforced the principle that the intention to deceive must exist at the time of inducement for an offence under Section 415 IPC to be made out.
State of Haryana v. Bhajan Lal, 1992 Supp (1) SCC 335, laid down the classic categories under which criminal proceedings can be quashed, particularly where allegations even if taken at face value do not disclose the commission of any offence.
Madhavrao Jiwajirao Scindia v. Sambhajirao Chandrojirao Angre, (1988) 1 SCC 692, clarified that if chances of conviction are bleak and the prosecution appears to be initiated with mala fide intent, the Court is justified in quashing the proceedings.
In Neeharika Infrastructure (P) Ltd. v. State of Maharashtra, (2021) 19 SCC 401, the Court discussed the narrow scope of judicial intervention during the stage of investigation but permitted quashing in exceptional circumstances to prevent miscarriage of justice.
The respondents relied on Minu Kumari v. State of Bihar, (2006) 4 SCC 359, and S.W. Palanitkar v. State of Bihar, (2002) 1 SCC 241, to argue that once an FIR discloses a cognizable offence, investigation should be allowed to continue and courts should not interfere prematurely.
Reasoning and Analysis of the Judge:The Court analyzed the statutory provisions and case law governing the inherent jurisdiction of the High Court under Section 482 CrPC. The Court noted that the allegations in the FIR related to the alleged misuse of a patented process involving herbal dyeing of textiles, which had been voluntarily submitted under a program where P&G had explicitly disclaimed any confidentiality or obligation.
The Court held that the offences of cheating and criminal breach of trust require different mens rea and cannot coexist based on the same set of facts. Criminal breach of trust requires entrustment of property, while cheating requires fraudulent intention at inception. In the present case, the Court found no entrustment or inducement that would satisfy the legal requirements of either offence.
It was observed that the essence of the complainant’s grievance related to patent infringement — a matter governed by the Patents Act, 1970. The complainant had also issued a cease-and-desist notice but failed to pursue civil remedies. This, according to the Court, indicated an attempt to misuse the criminal justice system as a tool of coercion.
The Court further emphasized that neem, being a part of traditional Indian knowledge, cannot be monopolized through patent law, and the use of neem in a proprietary herbal oil formulation by P&G did not prima facie appear to infringe any specific patented process of the complainant.
Citing Lalit Chaturvedi v. State of U.P., 2024 SCC OnLine SC 171, and Delhi Race Club (1940) Ltd. v. State of U.P., (2024) 10 SCC 690, the Court reiterated that civil disputes should not be converted into criminal cases, especially when the ingredients of the alleged criminal offences are absent.
Final Decision:The High Court allowed the petition and quashed FIR No. 02/2024 registered at Police Station Kandaghat and all consequential proceedings. The Court concluded that no prima facie case was made out against the petitioners, and continuing the proceedings would amount to an abuse of the process of law. The order passed by the Judicial Magistrate directing the registration of the FIR was also held to be unsustainable in law.
Law Settled in This Case:This case reinforces the legal position that patent infringement and related commercial disputes fall within the domain of civil law, and criminal proceedings cannot be initiated unless the statutory ingredients of offences such as cheating or breach of trust are clearly satisfied. It affirms that FIRs should not be registered in the absence of prima facie cognizable offences, and courts must quash proceedings that misuse the criminal justice system for private vendettas or business coercion. The judgment draws a clear boundary between civil remedies under IP law and criminal liability under the Indian Penal Code, ensuring that criminal courts are not misused to settle commercial grievances.
Case Title: Procter & Gamble Hygiene and Health Care Ltd. & Anr. vs. State of Himachal Pradesh & Ors.:Date of Order: 28 May 2025:Case Number: Cr. MMO No. 266 of 2024:Neutral Citation: 2025:HHC:16349:Name of Court: High Court of Himachal Pradesh, Shimla::Name of Judge: Hon’ble Mr. Justice Rakesh Kainthla
Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and 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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