Introduction and Background
This case involves a criminal revision petition filed by Arddy Engineering Innovations Pvt. Ltd. challenging the initiation of criminal proceedings against it by Heraeus Technologies Indian Pvt. Ltd. The core issue revolves around allegations of trademark infringement, counterfeiting, cheating, and violations of court orders related to the trademark ‘Hydris,’ a product used for measuring the hydrogen levels in liquid steel, crucial for railway safety and defense purposes.
Dispute and Allegations
Heraeus Technologies owned the exclusive rights to the ‘Hydris’ trademark and technical know-how. Arddy Engineering, previously authorized as a distributor under a distributorship agreement, allegedly manufactured and supplied counterfeit hydrogen sensors branded ‘Hydris’ even after the termination of the distributorship agreement on 24th October 2013. Heraeus accused Arddy of developing a product called ‘Hysen’ with identical markings and falsely representing it as genuine ‘Hydris.’ The counterfeit products were allegedly supplied to Indian Railways and steel factories, posing significant safety risks and causing financial and reputational damage to Heraeus.
Court Proceedings and Legal Contentions
The criminal case was initiated based on a complaint lodged by Heraeus, which also involved an inquiry under section 202 of the Criminal Procedure Code (CrPC). The magistrate issued process against Arddy after being satisfied of credible grounds, based on police reports and documents indicating that counterfeit products were manufactured and supplied with the intent to deceive customers and infringe upon Heraeus’s trademarks.
Arddy contended that the proceedings should be quashed, claiming that the complaint lacked sufficient grounds, that the allegations were civil disputes mischaracterized as criminal matters, and that the magistrate did not properly apply judicial mind before issuing process. They argued that the civil injunction order restraining them from using the ‘Hydris’ mark was still in force, emphasizing contradictions in the plaintiff’s stance in civil and criminal courts, as well as reliance on precedents suggesting that criminal proceedings should not be initiated without proper prima facie evidence.
Court’s Analysis
The court examined whether the complaint disclosed an offense under relevant sections of the Indian Penal Code, including cheating, criminal breach of trust, and forgery. It noted that the complaint, along with police reports, laid down factual foundations for criminal liability, including specific allegations of counterfeit manufacturing, misappropriation, and deliberate deception. The court stated that at this stage, the court was required to consider whether there was a prima facie case, not to determine the guilt or innocence.
Regarding Arddy’s argument that the magistrate failed to apply judicial mind, the court observed that orders issuing process under section 204 of CrPC do not necessarily require a formal detailed order, provided that the magistrate was satisfied after due inquiry. The inquiry under section 202, which included police investigations and reports, was deemed sufficient to satisfy this requirement.
The court also considered arguments on whether contradictory pleadings in civil and criminal proceedings could justify quashing the criminal case. It concluded that the complaint’s allegations were detailed enough to show a prima facie offense, especially given the specific role assigned to the accused, including counterfeiting and fraudulent representation, and that the civil injunction did not prevent criminal proceedings.
Decision and Conclusion
The court dismissed the petition, ruling that the initiation of criminal proceedings was justified based on the available evidence and procedural compliance. It emphasized the importance of allowing the case to proceed to trial for a full factual adjudication. The court also urged the lower courts to expedite proceedings, recognizing the ongoing civil injunction and the seriousness of the allegations. In conclusion, the court rejected Arddy’s plea to quash the criminal case, asserting that the process was initiated in accordance with law, with sufficient grounds for the case to be tried on merit.
Arddy Engineering Innovations Vs Heraeus Technologies/16th April 2025/CRR 4690 of 2022/High Court at Calcutta/Ajoy Kumar Mukherjee
