Sterling Irrigations Vs Bharat Industries:Date of Order: July 1, 2025:Case Number: No. 8521 of 2024:Neutral Citation: 2025:AHC:101729:Name of Court: Allahabad High Court:Name of Judge: Hon'ble Neeraj Tiwari
Facts: The petitioners-defendants published a notice on June 18, 2015, in Amar Ujala for the transfer of a registered trademark, prompting the respondent-plaintiff, Bharat Industries, to file Original Suit No. 4 of 2015 under Section 134 of the Trade Marks Act, 1999, seeking a permanent injunction. The petitioners filed a counterclaim on December 15, 2015, also seeking a prohibitory injunction. Both parties later filed rectification applications under Section 25(a) of the Act before the Registrar of Trademarks in Kolkata and Delhi.
Procedural Background: The suit and counterclaim were filed for injunctions, not trademark infringement. Issues were framed by the Commercial Court No. 2, Agra, on August 22, 2016. The respondent filed an application (No. 196-C) on March 1, 2022, to stay the counterclaim proceedings, which the petitioners opposed. The Commercial Court stayed the counterclaim proceedings on May 6, 2024, leading to the petitioners’ challenge under Article 227.
Dispute: The key issue was whether the Commercial Court’s order to stay the counterclaim proceedings under Section 124 of the Trade Marks Act, 1999, was valid, given that the suit and counterclaim were for injunctions, not trademark infringement, and whether rectification applications filed before the Registrar, instead of the High Court, justified the stay.
Discussion: The court examined whether the suit qualified as one for trademark infringement to trigger Section 124, which mandates a stay when trademark registration validity is questioned. The petitioners argued the suit and counterclaim sought injunctions, not infringement remedies, and that Section 124 was inapplicable as no validity challenge was raised. They also contended that rectification applications should have been filed before the High Court under Section 125, not the Registrar, and that the Commercial Court failed to frame issues as required under Section 124(1)(b)(ii). The respondent argued that references to “infringement” in the pleadings meant the suit should be treated as one for infringement, making Section 124 applicable, and that prior issue framing in 2016 sufficed.
The court found that the prayers in the plaint and counterclaim sought only injunctions, not validity challenges, and that Order VII Rule 7 of the CPC requires the nature of the suit to be determined by the relief clause, not general pleadings. It held that Section 124 was inapplicable, and even if applicable, the Commercial Court erred by not framing issues before staying proceedings. Additionally, rectification applications filed before the Registrar were deemed non-maintainable under Section 125, as they should have been filed before the High Court, and no referral to the High Court had occurred.
Decision: The Allahabad High Court set aside the Commercial Court’s order dated May 6, 2024, finding it unsustainable. The court ruled that the suit and counterclaim were for injunctions, not trademark infringement, rendering Section 124 inapplicable. It further held that the rectification applications before the Registrar were invalid under Section 125, and the Commercial Court’s failure to frame issues before staying proceedings violated Section 124(1)(b)(ii). The impugned order was quashed, allowing the suit to proceed.
