Anugraha Castings & Anr. Vs. Anugraha Valve Castings Limited

Prima Facie Tenability of Invalidity Plea under Section 124 of Trademarks Act 1999

Case Details

The case titled Anugraha Castings & Anr. Vs. Anugraha Valve Castings Limited, bearing Case Number CRP.No.2480 of 2025 & CMP.No.14213 of 2025, was decided by the High Court of Judicature at Madras by The Hon'ble Mr. Justice P.B. Balaji, with the order reserved on 31.07.2025 and pronounced on 22.08.2025

Facts

The underlying dispute revolves around the use of the word mark "Anugraha" in the alloys and casting industry. The respondent, Anugraha Valve Castings Limited (hereinafter referred to as the "Plaintiff"), is a company incorporated under the name "Anugraha" and claims to have coined the word from parts of the names of its founder (Anand Kumar, contributing "An") and the founder's wife (Grahalakshmi, contributing "graha"). The Plaintiff asserts prior use of the mark since 2003 and obtained trademark registration No. 5117934 (noted as incorrectly mentioned as 5117933 in some draft issues) on 04.09.2021 in Classes 6 (common metals and their alloys), 7 (machines and machine tools), and 40 (treatment of materials, including casting services). These classes pertain specifically to alloys, castings, and related manufacturing services.

In 2021, the Plaintiff issued a cease and desist notice to the petitioners, M/s. Anugraha Castings (a firm) and K. Gobinath (its proprietor, hereinafter collectively referred to as the "Defendants"), demanding they stop using the word "Anugraha" in their business, which is in the same line of alloys and castings, located in the same locality (Coimbatore, Tamil Nadu). Despite the notice, the Plaintiff did not initiate legal action immediately. Pre-institution mediation under Section 12A of the Commercial Courts Act, 2015, was attempted in 2024 but failed.

In 2025, the Plaintiff filed a commercial suit (C.O.S. No. 2 of 2025) before the Commercial Court (District Judge cadre), Coimbatore, seeking prohibitory and mandatory injunctions to restrain the Defendants from using the "Anugraha" mark, alleging trademark infringement and passing off. The Defendants filed a written statement defending their use, claiming they had been using the mark since 2018 and raising several pleas, including:

• The Plaintiff is not the prior user.
• The Plaintiff's adoption and use of "Anugraha" is dishonest.
• "Anugraha" is not a coined word but a common dictionary term in seven languages (meaning "grace" or "blessing"), open to public use and common to trade.
• The Plaintiff's trademark registration is invalid due to suppression of material facts, fraud on the Registrar of Trademarks (e.g., false claim of coining the word), and false user affidavit.
• Entitlement to benefits under Section 17(2)(b) of the Trade Marks Act, 1999 (which deals with registration of trademarks not conferring exclusive rights if the mark is common to trade).
• The suit is not bona fide and is vexatious, warranting compensatory and punitive costs.

Both parties submitted draft issues for framing in the suit. The Defendants proposed 12 issues (numbered 4 to 12 in their draft, focusing on prior use, dishonesty, coined word status, validity of registration, fraud, suppression, Section 17(2)(b) benefits, bona fides, and costs). The Commercial Court, after hearing both sides, framed certain issues on 09.06.2025 but omitted several key ones suggested by the Defendants, particularly those challenging the validity of the Plaintiff's registration. Aggrieved, the Defendants filed this Civil Revision Petition (CRP) under Article 227 of the Constitution of India before the Madras High Court, seeking directions to the Commercial Court to frame their draft issues 4 to 12 as additional issues in the suit.

Dispute

The core dispute in this revision petition is whether the Commercial Court erred in not framing all the Defendants' proposed issues, especially those concerning the invalidity of the Plaintiff's trademark registration. The Defendants argued that under Section 124 of the Trade Marks Act, 1999, when a plea of invalidity is raised in a written statement, the court must frame an issue on it if prima facie tenable, adjourn the suit for three months, and allow the party to apply for rectification before the Registrar or High Court/IPAB (Intellectual Property Appellate Board). They contended that the Plaintiff's registration was obtained fraudulently by falsely claiming "Anugraha" as a coined word, despite it being a common term, and that failure to frame such issues prejudiced their defense. They relied on the Supreme Court's decision in Patel Field Marshal Agencies & Ors. vs. P.M. Diesels Ltd. & Ors. (2018) 2 SCC 112, which emphasized that validity issues must be decided by the Tribunal (not civil court) and that non-compliance with timelines for rectification leads to loss of the right to challenge.

The Plaintiff countered that no issue on invalidity was warranted as the Defendants failed to establish a prima facie tenable case. They argued that "Anugraha" is not common to trade in Classes 6, 7, and 40 (alloys and castings), and Section 31(1) of the Trade Marks Act presumes validity of registered marks. The registration process involved publication and invitation of objections, with no challenges raised within the three-year limitation period for rectification. They asserted that the Defendants, being in the same trade associations and locality, must have known about the Plaintiff's use and registration but slept on their rights, and now seek to bypass limitation by forcing an invalidity issue. The Plaintiff also highlighted that the cease and desist notice in 2021 did not mention registration, but this did not excuse the Defendants' delay.

Reasoning

The Madras High Court, per Justice P.B. Balaji, meticulously analyzed the pleadings, draft issues, and relevant provisions of the Trade Marks Act, 1999, particularly Sections 124 (procedure for invalidity pleas in infringement suits), 17(2)(b) (no exclusive rights for common marks), and 31(1) (presumption of validity for registered marks). The Court noted that issues were framed by the Commercial Court only after hearing both counsels on the drafts, ensuring no deprivation of opportunity.

On the invalidity plea (central to Defendants' draft issues 7-9), the Court held that Section 124(1)(ii) requires framing an issue only if the plea is prima facie tenable. Mere raising of a defense does not mandate it; the object is to prevent vexatious objections that could stall suits indefinitely. The Court examined the word "Anugraha":

• While acknowledging it as a common dictionary word in seven languages, the Court emphasized it must be tested in the context of Classes 6, 7, and 40. It is not shown to be common to trade in alloys and castings.
• The Plaintiff's explanation of coining it from founders' names was prima facie justified and acceptable, especially since the company name itself is "Anugraha" and no evidence showed it as a common trade name in the relevant industry.
• The Defendants' attack (false coining claim, fraud, suppression) lacked prima facie merit, as nothing indicated commonality in the specific trade. Allowing an invalidity issue would enable the Defendants to bypass the three-year limitation for rectification, contrary to the Supreme Court's ruling in Patel Field Marshal (paras 31 and 35), which stresses mandatory consequences for non-compliance with timelines and elimination of frivolous claims.
• The Defendants' awareness of the Plaintiff's presence (same trade, locality, associations) since 2018, and their failure to challenge the registration timely, suggested an attempt to "get over the bar" by collaterally raising invalidity.

The Court rejected the Defendants' contention that the 2021 notice's omission of registration details excused their delay, applying their own argument of mutual knowledge symmetrically. It also noted that registration follows due process (publication, objections), and Section 124 aims to filter untenable pleas to avoid suits going into "cold storage."

However, on other proposed issues, the Court found merit in some based on pleadings:

• Whether the Plaintiff's adoption/use is dishonest.
• Whether "Anugraha" is a coined word.
• Whether fraud was played on the Registrar.
• Entitlement to Section 17(2)(b) benefits.
• Entitlement to compensatory/punitive costs for vexatious suit.

These were deemed necessary as they arose from the written statement and could be resolved without invoking rectification.

Decision

The Civil Revision Petition was partly allowed. The High Court directed the Commercial Court to frame five additional issues as set out in paragraph 24 of the judgment:

1. Whether the Plaintiff's adoption and use of the word "Anugraha" as its trademark is dishonest?
2. Whether the word "Anugraha" is a coined word, as claimed by the Plaintiff?
3. Whether the Plaintiff has played fraud on the Registrar of Trademarks in obtaining Trademark Registration No. 5117933 in Classes 6, 7, and 40?
4. Whether the Defendants are entitled to the benefit of Section 17(2)(b) of the Trade Marks Act?
5. Whether the Defendants are entitled to costs, both compensatory and punitive, for a vexatious suit having been filed by the Plaintiff?

The Court explicitly clarified that no issue on the invalidity of the Plaintiff's trademark (Defendants' draft issue 7) was required, given the lack of prima facie tenability. There was no order as to costs in the revision, and the connected Civil Miscellaneous Petition was closed. The decision underscores the need for a threshold prima facie assessment before framing invalidity issues in trademark suits to balance expeditious justice and statutory protections.

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