GRM Foodkraft Pvt Ltd and Another Vs. KS Agro Impex

GRM Foodkraft Pvt. Ltd. & Anr. Vs. KS Agro Impex & Anr.:29 May 2026: CS(COMM) 637/2024: 2026:DHC:4851:Hon’ble Ms. Justice Jyoti Singh

The Delhi High Court, in a trademark and trade dress passing-off dispute concerning Basmati rice packaging, granted interim protection to GRM Foodkraft Pvt. Ltd. and its affiliate against KS Agro Impex. The plaintiffs alleged that the defendants had copied the distinctive packaging and trade dress of their “10X Zarda King” Golden Sella Basmati Rice product, including the green-and-gold colour scheme, stylised lettering, lanterns, stars, moon imagery, and other visual elements.

The defendants contended that the features relied upon by the plaintiffs were generic, that the word “Zarda” was descriptive and common to trade, and that their prominent “Double Chabi” house mark eliminated any possibility of confusion.

Court held that the test in a passing-off action is the overall impression created by the rival trade dresses and not a side-by-side comparison of differences. The Court found that the defendants had copied several essential and distinctive elements of the plaintiffs’ packaging, resulting in deceptive similarity likely to confuse consumers of average intelligence and imperfect recollection. The Court further observed that the plaintiffs had established substantial goodwill and reputation through significant sales, advertising expenditure, and market presence.

Holding that a prima facie case of passing off was made out, the Court concluded that the defendants’ packaging amounted to “smart copying” of the plaintiffs’ trade dress and upheld the injunction restraining use of the impugned packaging pending disposal of the suit.

Here is a concise legal news-style report:

GRM Foodkraft Pvt. Ltd. & Anr. v. KS Agro Impex & Anr.

Date of Judgment: 29 May 2026

Case No.: CS(COMM) 637/2024

Neutral Citation: 2026:DHC:4335

Court: Delhi High Court

Judge: Hon’ble Ms. Justice Jyoti Singh

The Delhi High Court, in a trademark and trade dress passing-off dispute concerning Basmati rice packaging, granted interim protection to GRM Foodkraft Pvt. Ltd. and its affiliate against KS Agro Impex. The plaintiffs alleged that the defendants had copied the distinctive packaging and trade dress of their “10X Zarda King” Golden Sella Basmati Rice product, including the green-and-gold colour scheme, stylised lettering, lanterns, stars, moon imagery, and other visual elements.

The defendants contended that the features relied upon by the plaintiffs were generic, that the word “Zarda” was descriptive and common to trade, and that their prominent “Double Chabi” house mark eliminated any possibility of confusion.

Justice Jyoti Singh held that the test in a passing-off action is the overall impression created by the rival trade dresses and not a side-by-side comparison of differences. The Court found that the defendants had copied several essential and distinctive elements of the plaintiffs’ packaging, resulting in deceptive similarity likely to confuse consumers of average intelligence and imperfect recollection. The Court further observed that the plaintiffs had established substantial goodwill and reputation through significant sales, advertising expenditure, and market presence.

Holding that a prima facie case of passing off was made out, the Court concluded that the defendants’ packaging amounted to “smart copying” of the plaintiffs’ trade dress and upheld the injunction restraining use of the impugned packaging pending disposal of the suit.

[Disclaimer: Readers are advised not treat this as a substitute for legal advise as it may contain errors in perception,interpretation and presentation of facts and law.]

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Presence of house mark on  packaging does not by itself dispel consumer confusion

Introduction:

In the competitive world of fast-moving consumer goods, particularly food products like rice, the visual appearance of packaging often matters more to consumers than the brand name printed on it. A consumer walking into a kirana store or wholesale market relies heavily on colour, design, imagery, and overall visual impression to identify and pick a product they have previously purchased. This reality forms the bedrock of trade dress protection law in India, and the Delhi High Court's judgment in GRM Foodkraft Pvt Ltd v. KS Agro Impex is a significant recent addition to this body of law.

Decided on 29th May 2026, this case deals with the question of whether a rice seller can protect the unique packaging of its product, even without a registered trademark , when a competitor launches a nearly identical-looking product in the market. The Court's answer is a resounding yes, provided the plaintiff can demonstrate goodwill, misrepresentation, and damage, the three classic ingredients of a passing off action. What makes this judgment particularly instructive is the Court's detailed analysis of how the "overall impression" test works in practice, how the presence of a competitor's own house mark does not automatically rescue it from a finding of deceptive similarity, and why rice as a food product demands a lower threshold of deceptive similarity than many other products.

Factual and Procedural Background:

The story of this dispute begins in 1974, when the predecessors of the Plaintiff companies started a rice milling business called Garg Rice & General Mills in Panipat, Haryana. They set up their first milling plant between 1974 and 1979, initially selling only in the domestic market. A second plant followed in 1980, and by 1988 the business had expanded internationally, exporting basmati rice to Saudi Arabia and other Middle Eastern countries. Over the decades, the business grew substantially, and by 2024, Plaintiff No. 2 had a presence in more than 38 countries and was recognised as one of India's leading basmati rice exporters.

Plaintiff No. 1, GRM Foodkraft Pvt Ltd, was incorporated on 7th July 2020 as a wholly owned subsidiary of Plaintiff No. 2, specifically to handle the domestic market. It adopted the house mark "10X" for its range of rice products. In 2021, Plaintiff No. 1 launched Golden Sella Basmati Rice under the sub-brand "Zarda King," using a specially designed, distinctive packaging. This packaging featured a green and gold colour scheme, gold English lettering styled to resemble Urdu or Arabic script, the words "Zarda King" prominently placed in the centre in golden font, hanging lanterns and stars at the top in golden colour, a crescent moon with a star at the top centre, an image of a building resembling Arabic architecture with minarets, and a plate of pulao at the bottom. The trademarks associated with this packaging were assigned to Plaintiff No. 1 by Mr. Dhruv Kumar Singhal through assignment deeds dated 6th August 2023, following trademark applications filed on 4th November 2022.

The product achieved remarkable commercial success. From the time of its launch in October 2021 through financial year 2023-24, it generated cumulative sales exceeding Rs. 86.16 crores. Promotional and marketing expenditure exceeded Rs. 8 crores over this period. Celebrities such as Salman Khan and Saina Nehwal endorsed the brand, and it was promoted through hoardings, YouTube videos, and listings on platforms like IndiaMart.

In the first week of July 2024, Plaintiff No. 1 learned through trade channels that Defendant No. 1, KS Agro Impex, was also selling Golden Sella Basmati Rice. When the product was procured from the market, it became apparent that the packaging of Defendant No. 1 was strikingly similar to that of the Plaintiffs. It used a green and gold colour scheme, gold lettering in English resembling Urdu or Arabic script, the word "Zarda" in a similar golden stylised font (but with the suffix "Special" added), hanging lanterns and stars at the top in golden colour, the word "Zarda" written separately in Urdu or Arabic script, and an image of a pulao dish towards the lower portion of the pack. Defendant No. 1 was established as a partnership firm in 2016 and claimed to be a reputed business entity selling over 50 varieties of rice under the brand "Double Chabi," exporting to over 25 countries. In July 2024, two of its partners applied for trademark registration of a label bearing "Double Chabi Zarda Special." Defendant No. 2 was found to be the manufacturer and supplier of packaging material to Defendant No. 1.

After conducting an extensive market survey covering 208 persons across 7 cities  comprising 109 street hawkers, 75 rice retailers, and 24 rice distributors  the Plaintiffs filed the suit. The survey revealed that 81 percent of respondents were aware of the Plaintiffs' packaging and 85 percent could identify it from a distance. On 1st August 2024, the Court passed an ex parte ad interim injunction restraining the Defendants from selling, offering for sale, or advertising Golden Sella Basmati Rice in the impugned packaging, while granting Defendant No. 1 the liberty to continue its business using a different and distinct packaging. Defendant No. 1 subsequently filed an application under Order XXXIX Rule 4 of the Code of Civil Procedure, 1908 seeking vacation of this ex parte order.

The Dispute:

The core dispute before the Court was whether the packaging or trade dress adopted by Defendant No. 1 for its Golden Sella Basmati Rice was deceptively similar to the distinctive trade dress of the Plaintiffs, and whether the Plaintiffs had made out a prima facie case of passing off and copyright infringement warranting continuation of the interim injunction.

The Plaintiffs argued that Defendant No. 1 had dishonestly and deliberately copied almost every essential element of their unique packaging  the colour scheme, font style, the word Zarda, hanging lanterns and stars, Arabic architectural imagery, and pulao plate  with the intent to mislead consumers into believing that the Defendant's product was associated with the Plaintiffs. They contended that all three ingredients of passing off  goodwill and reputation, misrepresentation, and irreparable harm  were clearly established. They emphasised that for edible products like rice, a lower threshold of deceptive similarity should apply and the relevant consumers include street hawkers, rice retailers, and distributors in Tier-II and Tier-III cities who may not be discerning buyers.

Defendant No. 1 contested the claim on several grounds. It argued that individual elements of a trade dress such as colours, stars, lanterns, the crescent moon, a pulao image, or minarets cannot be monopolised by any party. It contended that the word "Zarda" is generic and descriptive, referring to a traditional sweet rice dish made from milk, saffron, sugar, and food colouring, and that the word originates from the Urdu word "Zard" meaning yellow. Defendant No. 1 also argued that it had given a disclaimer in its trademark application stating it would not claim exclusive rights over the word "Zarda." It further contended that its packaging was distinct from the Plaintiffs' because it had a matte finish with white polka dots in the background, prominently displayed the house mark "DOUBLE CHABI" on multiple places including the foldable sides of the packaging, had a prominent red colour strip at the bottom, and placed the pulao image in the centre rather than on the side. It argued that the Plaintiffs had failed to prove goodwill specifically in relation to the Zarda King sub-brand packaging and had merely shown overall sales figures for the 10X brand. It also argued that consumers buying rice in 30-kg bags are discerning consumers who would not be confused.

Reasoning and Analysis of the Court:

The Court approached the matter by first identifying the applicable legal framework for passing off before examining the facts in light of that framework.

On the law of passing off, the Court reiterated the classic "trinity test"  goodwill and reputation, misrepresentation, and damage or injury  drawing from the House of Lords judgment in Reckitt and Colman Products Ltd v. Borden Inc., [1990] 1 WLR 491, and the Supreme Court's judgment in Laxmikant V. Patel v. Chetanbhai Shah and Another, (2002) 3 SCC 65. From the Reckitt and Colman case, the Court noted that a successful passing off action requires that the plaintiff's goods have acquired a reputation in the market and are known by some distinguishing feature, and that the misrepresentation has deceived or is likely to deceive in a manner likely to cause damage to the plaintiff. The Court also drew upon the Delhi High Court's own judgment in Dabur India Limited v. Shree Baidyanath Ayurved Bhawan Pvt. Ltd., 2012 SCC OnLine Del 3332, emphasising that no trader is entitled to represent his goods as being the goods of another, and that any representation through marks, devices, colour combinations, or other means constitutes an invasion of proprietary rights.

On the question of deceptive similarity, the Court anchored itself firmly in the landmark Supreme Court decision in Parle Products (P) Ltd. v. J.P. and Co., Mysore, (1972) 1 SCC 618. From this case, the Court extracted the central principle that in determining whether one mark or packaging is deceptively similar to another, it is the broad and essential features that must be considered, not a side-by-side comparison to hunt for differences. The test is whether there is overall similarity sufficient to mislead a person of average intelligence and imperfect recollection. The Court quoted the Supreme Court's observation from Parle Products that if a person was not careful enough to note the peculiar features of the plaintiff's packaging, he might easily mistake the defendant's packaging for it some time after seeing the original, because an ordinary purchaser is not gifted with the powers of observation of Sherlock Holmes.

Applying these principles, the Court conducted a detailed visual comparison of the rival packaging. It found that the similarities were numerous and obvious  green and gold colour scheme, gold English lettering styled to resemble Urdu or Arabic script, the word "Zarda" in a similar font and style, hanging stars and lanterns at the top in golden colour, the word "Zarda" separately inscribed in Urdu or Arabic script, and a plate of pulao in the lower portion — and these similarities substantially outweighed the differences pointed out by Defendant No. 1. The Court acknowledged that there were some differences, such as the white polka dots and matte finish on Defendant No. 1's packaging, the placement of the pulao image, and the red strip at the bottom. However, it held that the test is not to focus on dissimilarities but on similarities of essential elements, and that even where dishonesty is apparent, the law requires paying greater attention to points of similarity. In this context, the Court drew on the observation in Baker v. Master Printers Union of New Jersey, 47 USPQ 69, which has been widely quoted in Indian courts: the most successful form of copying is to employ enough points of similarity to confuse the public, with enough points of difference to confuse the courts.

The Court found that Defendant No. 1 had engaged in precisely this kind of "smart copying," a term the Court borrowed from Allied Blenders alias Distillers Private Limited v. Hermes Distillery Private Limited, 2024 SCC OnLine Del 217. In the Allied Blenders case, the Court had observed that when broad similarities are so obvious at first look, the differences are nudged into oblivion, and that a chart of differences showing extraordinary effort by the defendant actually highlights the similarities rather than diminishing them.

On the argument that the word "Zarda" is generic or descriptive and therefore no one can claim exclusivity over it, the Court took a nuanced position. It acknowledged that even if Zarda is accepted to be generic or descriptive, this does not materially dilute the Plaintiffs' case of passing off, because the claim is not merely about the word Zarda but about the overall deceptive imitation of the entire trade dress, get-up, and visual presentation. The Court further observed that in the overall setting of the packaging, Zarda functions as a memorable component in consumer recollection, and that the addition of the suffix "Special" by Defendant No. 1 is not sufficient to create any meaningful distinction in the mind of a consumer guided by overall impression. The Court noted pointedly that this addition of "Special" was an unsuccessful attempt to create an illusion of distinction and avoid an action for dishonest copying and imitation.

The Court was also unpersuaded by Defendant No. 1's argument that it cannot claim monopoly over individual elements like colours, stars, minarets, or lanterns. Referring to the Delhi High Court's judgment in Colgate Palmolive Company and Another v. Anchor Health and Beauty Care Pvt. Ltd., 2003 SCC OnLine Del 1005, the Court observed that while no party can have monopoly over a particular colour, if there is substantial reproduction of a colour combination in similar order and proportion on packaging that has been imprinted on consumers' minds, it is liable to cause confusion and dilute distinctiveness. The Court emphasised that it is the overall combination, arrangement, and ensemble of these elements taken together that acquires distinctiveness and deserves protection.

On the question of goodwill and reputation, the Court rejected Defendant No. 1's contention that the Plaintiffs had failed to prove goodwill specifically in relation to the Zarda King packaging. It found that the Plaintiffs had placed on record sales turnover documents, GST invoices for printing the laminated packaging in question, CA Certificates, sales invoices, photographs of hoardings and billboards, social media promotions, YouTube campaign screenshots, and IndiaMart listings, all specifically linked to the 10X Zarda King brand. The Court held that sales worth approximately Rs. 90 crores in three years cannot be regarded as nominal for a fast-moving consumer food product like rice and are sufficient to support a prima facie inference of goodwill and distinctiveness in the trade dress.

A particularly striking rhetorical question posed by the Court was: if the Plaintiffs' trade dress was not distinctive and had not created formidable goodwill and reputation in the market, why did Defendant No. 1 choose to copy it to the maximum extent possible? The Court drew support from the principle articulated in cases like Dabur India Limited v. Shree Baidyanath Ayurved Bhawan (supra) and Seven Towns Ltd. and Another v. M/s. Kiddiland and Another, 2016 SCC OnLine Del 5168, that in a passing off action, the trade dress and get-up of packaging constitute an essential component of goodwill and reputation.

On the critical question of whether the prominent display of Defendant No. 1's house mark "DOUBLE CHABI" on its packaging was sufficient to dispel consumer confusion, the Court gave a clear and emphatic answer in the negative. It drew upon the Supreme Court's decision in Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., (2001) 5 SCC 73, which emphasised that the relevant consumer is a person of average intelligence and imperfect recollection, and that for products purchased across different literacy levels and in diverse markets, the degree of care exercised is lower. The Court observed that for rice, which is a fast-moving consumer good sold from retail shelves, kirana stores, and wholesale counters, buying decisions are predominantly driven by visual recognition of packaging  colour scheme, layout, and general trade dress  rather than careful scrutiny of brand names or house marks. In such an environment, the presence of DOUBLE CHABI is not sufficient to dispel consumer confusion.

This conclusion was reinforced by the recent judgment of the Division Bench of the Delhi High Court in Dabur India Limited v. Emami Limited, 2026 SCC OnLine Del 3922, where it was observed that even when a defendant's product bears a well-known house mark like "DABUR," this has little role to play when the overlapping features in the trade dress are likely to cause confusion. The Division Bench specifically held that if individual elements of a trade dress are common to the trade, the distinctive combination, arrangement, and presentation of those elements as a whole can still acquire secondary meaning and deserve protection.

The Court also drew from Cadbury India Ltd. and Others v. Neeraj Food Products, 2007 SCC OnLine Del 841, where the Delhi High Court had found passing off even though one packet was marked "Cadbury GEMS" and the other "Neeraj JAMES BOND," because all other essential features of the Cadbury pillow pack — the blue background, brown oval shape, colour of the tablets, visual explosion imagery — had been copied by the Defendant. Similarly, in Allied Blenders and Distillers Pvt. Ltd. v. Agribiotech Industries Limited (ABIL), 2020 SCC OnLine Del 2770, the Court had found deceptive similarity between the "Officers Choice" whisky label and the "Chetak" label despite clearly different brand names, because the overall combination and arrangement of elements was substantially similar.

The Court found additional support in Mondelez India Foods Pvt. Ltd. and Another v. Neeraj Food Products, 2022 SCC OnLine Del 2199, where a blue and purple pillow pack comparison had led to a passing off finding on account of copying of all essential features, and in Marico Limited v. Mr. Mukesh Kumar and Others, 2018 SCC OnLine Del 10823, where the Court held that trade dress was novel and distinctive, and exclusivity could be claimed over several elements taken as a whole.

For food products specifically, the Court applied the principle from Dominos IP Holder LLC and Another v. Dominick Pizza and Another, 2023 SCC OnLine Del 6135, Ferrero SPA and Others v. M.B. Enterprises, 2025 SCC OnLine Del 5105, and Capital Foods Private Limited v. Sankalp Recreation Private Limited and Others, MANU/DEOR/75775/2025, that greater sensitivity is required and the threshold of deceptive similarity is far lower for edible products.

The Court also applied the initial interest confusion test drawn from the Division Bench judgment in Under Armour Inc v. Anish Agarwal and Another, 2025 SCC OnLine Del 3784, noting that given the deceptive similarity in the rival packaging, a consumer may initially be drawn to Defendant No. 1's product in the mistaken belief that it has some association with the Plaintiffs, and this constitutes actionable confusion.

On the third ingredient of passing off damage  the Court held that once goodwill and misrepresentation are established, damage is ordinarily presumed. The mere existence of an identically packaged competing product for an identical product — Golden Sella Basmati Rice  sold through common trade channels to a common consumer base is sufficient to indicate the likelihood of injury to the Plaintiffs' goodwill and reputation.

Finally, on the common to trade argument based on third-party use of the word Zarda, the Court found no merit in it. It observed that none of the documents filed by Defendant No. 1 showed any third party using the word Zarda with a packaging deceptively similar to that of the instant case with the same colour combination and elements. Drawing from Marico Limited (supra), the Court held that to establish the plea of common use, the use by other persons must be shown to be substantial and capable of affecting distinctiveness, and the Plaintiffs are not required to pursue every insignificant infringer.

Final Decision of the Court:

The Court held that the Plaintiffs had made out a prima facie case for continuing the ex parte ad interim injunction order dated 1st August 2024. The balance of convenience lay in favour of the Plaintiffs and against the Defendants, particularly since the injunction had already been in operation for almost two years. Vacating it would cause irreparable harm and injury to the Plaintiffs. Accordingly, the injunction was confirmed and made operative till the disposal of the suit. The Defendants and all persons acting on their behalf were restrained from selling, offering for sale, and advertising Golden Sella Basmati Rice in the impugned trade dress or packaging, which was found to be confusingly and deceptively similar to the Plaintiffs' trade dress or packaging.

However, it was expressly clarified that Defendant No. 1 is not precluded from carrying on its business for Golden Sella Basmati Rice using a different trade dress or packaging that is distinct and not deceptively similar to the Plaintiffs' packaging. It was also clarified that the packaging proposals offered by Defendant No. 1 during the course of the hearing cannot be used, as those too were found to be deceptively similar.

Point of Law Settled:

This judgment settles and reinforces several important principles of passing off law in the Indian context. The overall impression test applies to trade dress just as firmly as it applies to trademarks, and what matters is not whether the packaging is identical but whether, taken as a whole, it is likely to deceive a person of average intelligence and imperfect recollection. The presence of a competitor's house mark on its packaging, even a well-known one, does not by itself dispel consumer confusion when the overall trade dress is substantially similar to that of the plaintiff. For fast-moving consumer goods, particularly food products like rice where visual impression dominates purchase decisions and consumers include those with varying literacy levels, a lower threshold of deceptive similarity applies. A party who copies all essential features of a trade dress cannot escape liability by making minor cosmetic differences, as this constitutes "smart copying" which is still copying. Goodwill in a trade dress can be established even within a relatively short period through substantial sales, promotional expenditure, and celebrity endorsements, without necessarily requiring decades of use. The word or element claimed to be generic or descriptive does not dilute the overall passing off claim if the gravamen of the action is the deceptive imitation of the entire trade dress rather than any single word.

Case Title: GRM Foodkraft Pvt Ltd and Another Vs. KS Agro Impex and Another

Date of Order: 29th May 2026

Case Number: CS(COMM) 637/2024

Neutral Citation: 2026:DHC:4851

Name of Court: High Court of Delhi at New Delhi

Name of Hon'ble Judge: Hon'ble Ms. Justice Jyoti Singh

Disclaimer: Readers are advised not to treat this as substitute for legal advice 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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Head Note

GRM Foodkraft Pvt Ltd launched Golden Sella Basmati Rice in 2021 under the sub-brand Zarda King with a distinctive green and gold packaging featuring gold Arabic-style lettering, hanging lanterns and stars, a crescent moon, minarets, and a pulao plate image, achieving sales of over Rs. 86 crores in three years. On discovering that KS Agro Impex was selling an identically named product in packaging reproducing almost all these elements under the mark "Double Chabi Zarda Special," the Plaintiffs filed a suit for passing off and copyright infringement and obtained an ex parte interim injunction on 1st August 2024. The Delhi High Court, on hearing both the application for ad interim injunction and the Defendant's application for vacation of the ex parte order, held that the Defendant had substantially copied the Plaintiffs' trade dress and that the presence of the house mark "Double Chabi" was insufficient to dispel consumer confusion for a food product like rice. Applying the overall impression test from Parle Products, the Court confirmed the injunction and dismissed the vacation application, reinforcing that smart copying of trade dress, even with cosmetic differences, constitutes actionable passing off.

Jyothy Labs Limited Vs. The Registrar of Trade Marks

Jyothy Labs Limited v. The Registrar of Trade Marks & Ors.:18.05.2026:C.A.(COMM.IPD-TM) 29/2026:Hon'ble Justice Tushar Rao Gedela

In a trademark dispute, the Delhi High Court set aside an order of the Registrar of Trade Marks that had dismissed Jyothy Labs Limited’s opposition to a trademark application on the ground that the company failed to file evidence within the prescribed period. The appellant contended that the counter-statement filed by the applicant was never served upon it, depriving it of the opportunity to submit evidence under Rule 45 of the Trade Marks Rules, 2017. During the proceedings, the Registrar’s counsel acknowledged that due to a technical glitch, the counter-statement had in fact not been served on the appellant.

Justice Tushar Rao Gedela observed that proper service of the counter-statement is a mandatory requirement and that the failure to comply with this requirement denied the appellant a fair opportunity to pursue its opposition. Finding merit in the appellant’s grievance, the Court quashed the impugned order dated 6 February 2025 and remanded the matter to the Registrar of Trade Marks with directions to complete service of the counter-statement, provide the appellant an opportunity to file evidence, and thereafter continue the opposition proceedings. The appeal was accordingly disposed of.

[Disclaimer: Readers are advised not treat this as a substitute for legal advise as it may contain errors in perception,interpretation and presentation of facts and law.]

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Technical Glitch Cannot Defeat Trademark Opposition

Introduction: In trademark opposition proceedings, procedural fairness is not merely a technical formality  it is the very foundation on which the entire system of checks and balances rests. When a party files an opposition to the registration of a trademark, it does so to protect its existing rights from being diluted or infringed upon by a new registration. The opposition process under the Trade Marks Act, 1999 and the Trade Marks Rules, 2017 is a carefully designed mechanism that gives both the applicant and the opponent a fair opportunity to present their respective cases before the Registrar of Trade Marks. This mechanism depends critically on proper service of documents between the parties, because every subsequent step in the opposition  including the filing of evidence  is triggered by the receipt of the previous document.

When this chain of communication breaks down due to a technical failure on the part of the Registry itself, and the opposition is dismissed merely because the opponent did not file evidence within the prescribed time, a grave injustice results. The opponent is penalised not for its own default but for a failure that was entirely the Registry's doing. The Delhi High Court's order dated 18th May 2026 in Jyothy Labs Limited v. The Registrar of Trade Marks and Others directly confronts this situation and reaffirms a principle that is fundamental to any fair adjudicatory process: no party can be condemned for failing to do something it was never given the opportunity or notice to do.

This case, though brief in its order, carries significant lessons for trademark practitioners, trademark applicants, and the Trade Marks Registry itself about the importance of proper service, the consequences of procedural lapses by administrative bodies, and the role of the High Court in correcting such errors on appeal.

Factual and Procedural Background:

Jyothy Labs Limited, the Appellant, is a well-known Indian consumer goods company with an established presence in personal care, fabric care, and household products. The company filed an opposition bearing Opposition No. 1279339 against an application for registration of the trademark "JIVA AYURVEDA" filed under Application No. 4903005 in Class 42. Class 42 under the Trade Marks Act, 1999 relates broadly to scientific and technological services and wellness-related services, which is consistent with the Ayurveda services that the applied mark appeared to cover.

Under the Trade Marks Rules, 2017, the trademark opposition process follows a structured sequence. Once an opposition notice is filed by the opponent, the trademark applicant is required to file a counter-statement. Under Rule 45 of the Trade Marks Rules, 2017, once the counter-statement is filed by the applicant and served upon the opponent, the opponent has a period of two months to file its evidence in support of its opposition. This evidence stage is critical because it is through this evidence that the opponent substantiates the grounds of its opposition and places on record the factual basis for why the applied trademark should not be registered.

In the present case, the Registrar of Trade Marks passed an order dated 6th February 2025, dismissing the opposition filed by Jyothy Labs. The basis for this dismissal was that Jyothy Labs had not filed its evidence under Rule 45 of the Trade Marks Rules, 2017 within the prescribed period of two months from the alleged date of service of the counter-statement. As a consequence of this dismissal, the Registrar allowed the application for registration of the mark "JIVA AYURVEDA" under Application No. 4903005 in Class 42 to proceed for registration.

Jyothy Labs challenged this order by filing an appeal before the Delhi High Court under Section 91 of the Trade Marks Act, 1999 read with Rule 156 of the Trade Marks Rules, 2017. The appeal was registered as C.A.(COMM.IPD-TM) 29/2026 and was accompanied by three interlocutory applications bearing numbers I.A. 13755/2026, I.A. 13756/2026, and I.A. 13757/2026.

The core grievance of Jyothy Labs was straightforward: it never received the counter-statement filed by the trademark applicant. Since the counter-statement was never served upon it, Jyothy Labs could not have known that the two-month clock for filing evidence had started running. It was therefore impossible for it to have filed evidence within a period the commencement of which it had no notice of. There was an additional and telling inconsistency in the Registry's own records. The Hearing Notice dated 11th September 2025 issued by the Registrar of Trade Marks recorded the date of service of the counter-statement upon the appellant as 11th June 2024. However, the impugned order dated 6th February 2025 recorded the date of service of the counter-statement as 23rd April 2024. These two dates are different, and this discrepancy within the Registry's own documents powerfully corroborated the appellant's claim that something had clearly gone wrong with the service process.

The Dispute:

The dispute before the Court was narrow but significant. The question was whether the Registrar of Trade Marks was justified in dismissing Jyothy Labs' opposition under Opposition No. 1279339 solely on the ground that evidence under Rule 45 of the Trade Marks Rules, 2017 had not been filed within two months, when in fact the counter-statement  the very document whose service triggers the running of that two-month period  had never been properly served upon the appellant.

Jyothy Labs' position was that it was a victim of the Registry's own failure. It had filed its opposition diligently and was waiting for the next step in the proceedings. It was never informed that a counter-statement had been filed, and it was therefore never in a position to respond by filing evidence. To penalise it for this non-compliance was to visit upon it the consequences of a failure that was not of its making.

Reasoning and Analysis:

Upon hearing the parties, the Court first noted the specific claim of the Appellant that the counter-statement had never been served upon it, which was the direct cause of its failure to file evidence within the prescribed period under Rule 45 of the Trade Marks Rules, 2017. The Court also took note of the significant internal inconsistency in the Registry's own records  the discrepancy between the date of alleged service mentioned in the Hearing Notice dated 11th September 2025, which stated 11th June 2024, and the date recorded in the impugned order of 6th February 2025, which stated 23rd April 2024. This inconsistency by itself raised serious doubt about whether any effective service had taken place at all.

Most importantly, when the Court issued notice and the matter was heard, the counsel representing the Registrar of Trade Marks   made a candid and critical statement on instructions, after scrutinising the official records of the Registry. He stated that upon examination, it was indeed found that the counter-statement had in fact not been served upon the appellant. The reason attributed was a technical glitch that occurred at the time of service. The Registry thus effectively admitted that the service had failed and that the failure was on its part, not the appellant's.

The Court's analysis, though concise, was legally sound and principled. It observed that the mandate under Rule 45 of the Trade Marks Rules, 2017  which requires the counter-statement to be served upon the opponent before the evidence period commences  had not been properly complied with by the Registrar. This non-compliance by the Registry directly deprived the appellant of the opportunity to file its evidence in support of its opposition notice. Essentially, a party cannot be expected to comply with a time-bound procedural obligation when the very trigger for that obligation  the receipt of a document  never reached it. Procedural deadlines presuppose proper notice; without notice, there can be no default.

No external judicial precedents were cited or discussed in this brief order, which is not unusual for an interlocutory or remand order where the facts speak clearly for themselves and the legal principle is well-established. The principle that a party must be given due notice before a proceeding can be conducted against it is foundational to natural justice and has been affirmed in countless contexts by Indian courts. The right to be heard  audi alteram partem  is one of the oldest and most fundamental principles of fair adjudication, and it cannot be bypassed by a procedural glitch in the Registry's own system.

The Court found it entirely appropriate in these circumstances to quash the impugned order dated 6th February 2025 and remand the matter back to the Registrar of Trade Marks. The directions given were specific and practical. The Registrar was directed to complete service of the counter-statement upon the appellant within three weeks from the date of the order. Thereafter, the appellant was to be given a proper opportunity to file its evidence in accordance with Rule 45 of the Trade Marks Rules, 2017. The Registrar was also directed to continue the proceedings in Opposition No. 1279339 after this was done. 

Final Decision of the Court:

The appeal filed by Jyothy Labs Limited under Section 91 of the Trade Marks Act, 1999 read with Rule 156 of the Trade Marks Rules, 2017 was disposed of by quashing the order dated 6th February 2025 passed by the Registrar of Trade Marks. The matter was remanded to the Registrar with a direction to serve the counter-statement upon the appellant within three weeks, after which the appellant was to be given a full and proper opportunity to file its evidence under Rule 45 of the Trade Marks Rules, 2017. 

Point of Law Settled:

This order reaffirms and applies the elementary but vital principle that a statutory time period for filing evidence in trademark opposition proceedings under Rule 45 of the Trade Marks Rules, 2017 can only commence from the date of actual and proper service of the counter-statement upon the opponent. Where the counter-statement has never been served upon the opponent due to a technical failure in the Registry's own system, the opposition cannot be dismissed for non-filing of evidence within that period. The consequences of a procedural failure by the Registry cannot be visited upon the opposing party. When it is admitted by the Registry itself that there was a glitch in service, the proper remedy is to quash the order dismissing the opposition and remand the matter with a direction for fresh and proper service followed by a genuine opportunity to file evidence. 

Case Title: Jyothy Labs Limited Vs. The Registrar of Trade Marks and Others

Date of Order: 18th May 2026

Case Number: C.A.(COMM.IPD-TM) 29/2026

Name of Court: High Court of Delhi at New Delhi

Name of Hon'ble Judge: Hon'ble Mr. Justice Tushar Rao Gedela

Disclaimer: Readers are advised not to treat this as substitute for legal advice 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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Section 91 Trade Marks Act Appeal: Delhi High Court Quashes Registrar's Order Dismissing Opposition for Non-Service

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**Head Note**

Jyothy Labs Limited filed an opposition to the registration of the trademark "JIVA AYURVEDA" under Application No. 4903005 in Class 42. The Registrar of Trade Marks dismissed the opposition vide order dated 6th February 2025 on the ground that Jyothy Labs had not filed evidence under Rule 45 of the Trade Marks Rules, 2017 within two months of the alleged service of the counter-statement. On appeal before the Delhi High Court, the Registry's own counsel admitted upon scrutiny of records that the counter-statement had in fact never been served upon the appellant due to a technical glitch. The Court held that the mandate under Rule 45 of serving the counter-statement upon the opponent had not been complied with, thereby depriving the appellant of its right to file evidence. The impugned order was quashed, the matter was remanded to the Registrar with a direction to serve the counter-statement within three weeks, and the appellant was to be given a proper opportunity to file evidence thereafter.

SC-Dhodha House Vs. S.K. Maingi

Territorial Jurisdiction of Court and Joinder  of Copyright Infringement and Passing off:Dhodha House Vs. S.K. Maingi by Supreme Court

Introduction

The Supreme Court’s decision in Dhodha House v. S.K. Maingi and the connected appeal Patel Field Marshal Industries v. P.M. Diesels Ltd. is a landmark judgment on the law of territorial jurisdiction in intellectual property disputes. The ruling addressed a recurring problem faced by trademark owners and copyright holders: determining the proper court in which infringement and passing-off actions may be instituted.

The case is particularly significant because it clarified the relationship between the provisions of the Code of Civil Procedure, 1908, the Copyright Act, 1957, and the Trade and Merchandise Marks Act, 1958. The Court examined whether a plaintiff could invoke the special jurisdictional provision contained in Section 62(2) of the Copyright Act to maintain a suit that was substantially based on trademark infringement and passing-off claims.

The judgment continues to be of immense importance for businesses, trademark proprietors, copyright owners, intellectual property practitioners, and courts dealing with jurisdictional objections. It emphasizes that jurisdiction cannot be assumed merely on grounds of convenience and that statutory requirements governing territorial jurisdiction must be strictly satisfied. The ruling has played a crucial role in shaping the jurisprudence governing intellectual property litigation in India.

Factual and Procedural Background

The Supreme Court considered two connected appeals involving questions relating to territorial jurisdiction in intellectual property disputes.

The first appeal arose from a dispute between Dhodha House and S.K. Maingi. Dhodha House claimed ownership of the registered trademark “Dhodha House” in Class 30 under the Trade and Merchandise Marks Act, 1958. It also asserted copyright registrations in artistic works relating to its labels and wrappers. According to the plaintiff, it had been using the mark since 1960 and had acquired substantial goodwill and reputation.

Dhodha House carried on business in Ghaziabad, Uttar Pradesh, whereas the defendant conducted a similar sweetmeat business in Kotkapura, District Faridkot, Punjab. Alleging infringement of trademark, copyright, and passing-off, the plaintiff instituted a suit before the District Judge at Ghaziabad seeking injunction and other reliefs.

On 17 January 1992, the Additional District Judge granted an interim injunction restraining the defendant from using labels, wrappers, and trade dress allegedly similar to those of the plaintiff. The defendant challenged the order before the Allahabad High Court. By judgment dated 5 May 1997, the High Court held that the Ghaziabad court lacked territorial jurisdiction and further observed that “Dhodha” was the name of a variety of sweet and not an exclusive product of the plaintiff. Aggrieved by this decision, Dhodha House approached the Supreme Court.

The second appeal involved Patel Field Marshal Industries and P.M. Diesels Ltd. Both parties carried on business in diesel engines at Rajkot in Gujarat. The plaintiff claimed ownership of the trademark “Field Marshal” and also asserted copyright in its label and artistic work. A suit was instituted on the original side of the Delhi High Court seeking perpetual injunction for trademark infringement, copyright infringement, passing-off, and rendition of accounts.

The plaintiff attempted to invoke the jurisdiction of the Delhi High Court on the grounds that the defendants’ trademark applications had been advertised in the Trade Marks Journal and that goods bearing the disputed marks were allegedly sold in Delhi. The Single Judge rejected the injunction application on the ground that the plaintiff had failed to establish territorial and pecuniary jurisdiction. However, the Division Bench reversed the decision and held that the Delhi High Court possessed jurisdiction. This led to the appeal before the Supreme Court.

The central issue in both matters ultimately concerned the extent of territorial jurisdiction available in intellectual property disputes and the scope of Section 62(2) of the Copyright Act, 1957.

Dispute Before the Court

The principal question before the Supreme Court was whether a plaintiff could rely upon Section 62(2) of the Copyright Act, 1957 to institute a suit at a place where it resided or carried on business when the primary grievance related to trademark infringement and passing-off under the Trade and Merchandise Marks Act, 1958.

The appellants contended that the special jurisdictional provision under the Copyright Act created an additional forum and that a composite suit involving copyright and trademark claims could be filed where the plaintiff resided or carried on business. They also argued that publication of trademark applications in the Trade Marks Journal and the possibility of sale of goods in a particular territory furnished sufficient cause of action for conferring jurisdiction.

The respondents disputed these contentions. They argued that trademark infringement and copyright infringement constitute distinct causes of action. According to them, Section 62(2) of the Copyright Act applied only to copyright disputes and could not be used to create jurisdiction for trademark infringement proceedings. It was further contended that publication of a trademark application in the Trade Marks Journal or mere availability of goods in a market did not confer territorial jurisdiction upon a court.

The Supreme Court was therefore required to determine the true scope of Section 62(2) of the Copyright Act, the principles governing territorial jurisdiction under Section 20 of the Code of Civil Procedure, and whether a composite intellectual property suit could be used to enlarge the jurisdiction of a court otherwise lacking authority to entertain trademark claims.

Reasoning and Analysis of the Court

The Supreme Court began its analysis by examining the statutory framework governing territorial jurisdiction. It observed that the determination of territorial jurisdiction is primarily governed by Sections 16 to 20 of the Code of Civil Procedure, 1908. Section 20 provides that a suit may ordinarily be instituted where the defendant resides or carries on business or where the cause of action wholly or partly arises.

The Court then examined Section 62(2) of the Copyright Act, 1957. This provision creates an additional forum for copyright litigation by permitting a plaintiff to institute proceedings where he actually and voluntarily resides, carries on business, or personally works for gain. The Court emphasized that this provision was enacted to benefit authors and copyright owners who might otherwise be compelled to litigate in distant places where infringement occurred.

A central aspect of the Court’s reasoning was that the Copyright Act and the Trade and Merchandise Marks Act operate in different spheres. While certain factual circumstances may overlap, a copyright infringement claim and a trademark infringement claim are distinct causes of action. The Court held that merely joining different causes of action in a composite suit under Order II Rule 3 of the Code of Civil Procedure does not confer jurisdiction where none otherwise exists.

The Court gave considerable importance to legislative intent. It observed that when Parliament enacted the Copyright Act in 1957, it consciously introduced Section 62(2) granting an additional forum. However, when Parliament enacted the Trade and Merchandise Marks Act in 1958, it did not incorporate a similar provision. According to the Court, this omission was deliberate and reflected legislative intent not to create an additional jurisdictional forum for trademark disputes under the 1958 Act. The Court noted that Parliament eventually introduced such a provision in Section 134(2) of the Trade Marks Act, 1999, thereby confirming that no such additional forum existed under the earlier law.

The Court further emphasized the well-established principle that jurisdiction cannot be presumed and must be expressly conferred by statute. A court lacking territorial jurisdiction cannot acquire jurisdiction merely because multiple causes of action are joined in a single suit. A decree passed by a court without jurisdiction would be a nullity. For this proposition, the Court relied upon Kiran Singh v. Chaman Paswan, [1955] 1 SCR 117, where it was held that a decree passed without jurisdiction is void and can be challenged even in collateral proceedings.

The Supreme Court also considered Jawahar Engineering Co. v. Jawahar Engineering Pvt. Ltd., 1983 PTC 207, where the Delhi High Court had recognized jurisdiction based on threatened infringement arising from a trademark registration application. The Court distinguished that decision and held that mere publication of a trademark application in the Trade Marks Journal does not by itself create a cause of action. A cause of action for trademark infringement arises from actual use of the mark and not merely from filing an application for registration.

The Court relied upon Oil and Natural Gas Commission v. Utpal Kumar Basu, (1994) 4 SCC 711, where it was held that incidental facts such as reading an advertisement or sending communications from a particular location do not constitute integral parts of a cause of action. Applying this principle, the Court held that publication of an advertisement in the Trade Marks Journal could not confer territorial jurisdiction.

The Court also discussed Exphar SA v. Eupharma Laboratories Ltd., (2004) 28 PTC 251 SC, where Section 62(2) of the Copyright Act was interpreted as providing an additional forum for copyright actions. However, the Court clarified that Exphar dealt primarily with copyright infringement and did not decide the issue presently under consideration, namely whether Section 62(2) could be used to confer jurisdiction in trademark disputes.

The Court approved the reasoning of the Madras High Court in Premier Distilleries Pvt. Ltd. v. Shashi Distilleries, 2001 PTC 907 (Mad), which held that filing an application for trademark registration does not constitute a part of the cause of action in a passing-off action. The Court agreed that convenience of the plaintiff cannot determine jurisdiction.

The judgment also provides a detailed explanation of the phrase “carries on business.” The Court held that a person carries on business at a place only when there is a real business presence involving control, participation, and commercial activity. Merely selling goods in a market through distributors or having products available in a particular city does not mean that the proprietor carries on business there. Similarly, mere availability of products in Delhi would not establish that the plaintiff carried on business in Delhi.

Applying these principles, the Court concluded that the Ghaziabad court lacked territorial jurisdiction in the Dhodha House matter because the primary grievance related to trademark infringement under the 1958 Act. Likewise, the Delhi High Court lacked jurisdiction in the Field Marshal matter because neither party resided nor carried on business in Delhi and publication of trademark applications in the Trade Marks Journal could not create jurisdiction.

Final Decision of the Court

The Supreme Court dismissed Civil Appeal No. 6248 of 1997 filed by Dhodha House and upheld the Allahabad High Court’s conclusion that the Ghaziabad court lacked territorial jurisdiction to entertain the suit.

The Court allowed Civil Appeal No. 16 of 1999 filed by Patel Field Marshal Industries and held that the Delhi High Court did not possess territorial jurisdiction to entertain the trademark and passing-off action merely because trademark applications were advertised in the Trade Marks Journal or because goods were allegedly available in Delhi.

The Court clarified that Section 62(2) of the Copyright Act could not be invoked to create jurisdiction for disputes primarily arising under the Trade and Merchandise Marks Act, 1958. The parties were directed to bear their own costs.

Point of Law Settled

The judgment settled the principle that Section 62(2) of the Copyright Act, 1957 creates an additional forum only for copyright-related disputes and cannot be used to confer territorial jurisdiction in trademark infringement or passing-off actions arising under the Trade and Merchandise Marks Act, 1958.

The Court further clarified that joining copyright and trademark claims in a composite suit does not automatically enlarge the territorial jurisdiction of a court. Jurisdiction must independently exist in respect of each cause of action.

The decision also establishes that publication of a trademark application in the Trade Marks Journal does not constitute a cause of action for trademark infringement and does not confer territorial jurisdiction. Additionally, the mere sale or availability of products in a particular market does not mean that a business “carries on business” at that location.

The ruling remains a foundational authority on territorial jurisdiction in intellectual property litigation and continues to guide courts in determining the proper forum for trademark, copyright, and passing-off disputes.

Title of the Case: Dhodha House Vs. S.K. Maingi; Connected with Patel Field Marshal Industries & Ors. v. P.M. Diesels Ltd.

Date of Judgment/Order: 15 December 2005

Case Number: Civil Appeal Nos. 6248 of 1997 and 16 of 1999

Citations: AIR 2006 SC 730;  (2006) 6 SCC 41; 

Name of Court: Supreme Court of India

Name of Hon'ble Judge: Justice B.P. Singh and Justice S.B. Sinha

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

Disclaimer: Images used herein do not reflect actual images used in Judgement and that the same are for illustrative purpose only. Readers are advised not to treat this as substitute for legal advice as it may contain errors in perception, interpretation, and presentation.

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1. Dhodha House v. S.K. Maingi: Supreme Court on Territorial Jurisdiction in Trademark Cases

2. Landmark Ruling on Copyright and Trademark Jurisdiction Explained

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4. Supreme Court Clarifies Section 62 of Copyright Act and Trademark Litigation

5. Territorial Jurisdiction in Intellectual Property Cases: Dhodha House Case Analysis

6. Can Trademark Journal Publication Create Jurisdiction? Supreme Court Answers

7. Dhodha House and Field Marshal Cases: Key Principles for IP Litigation

8. Trademark Infringement and Forum Selection Under Indian Law

9. Section 62 Copyright Act vs Trademark Jurisdiction: Supreme Court Interpretation

10. Composite IP Suits and Territorial Jurisdiction After Dhodha House

11. Supreme Court on Carrying on Business for Jurisdiction Purposes

12. Intellectual Property Litigation and Cause of Action: Understanding Dhodha House

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Headnote of the Judgment:

Dhodha House v. S.K. Maingi; Patel Field Marshal Industries v. P.M. Diesels Ltd., Supreme Court of India, Civil Appeal Nos. 6248 of 1997 and 16 of 1999, decided on 15.12.2005. The Supreme Court considered whether Section 62(2) of the Copyright Act, 1957 could be invoked to confer territorial jurisdiction in suits substantially based on trademark infringement and passing-off under the Trade and Merchandise Marks Act, 1958. The Court held that Section 62(2) provides an additional forum only for copyright disputes and cannot be used to enlarge jurisdiction for trademark claims. It further ruled that publication of a trademark application in the Trade Marks Journal does not create a cause of action and does not confer territorial jurisdiction. Dhodha House’s appeal was dismissed, while Patel Field Marshal Industries’ appeal was allowed, reaffirming strict adherence to statutory jurisdictional requirements in intellectual property litigation.

Safex Chemicals Private Limited Vs SML Limited

Safex Chemicals Private Limited Vs SML Limited & Anr., decided on 4 June 2026 in COMAP No. 2 of 2025, was adjudicated by the High Court of Himachal Pradesh at Shimla by a Division Bench comprising Chief Justice Gurmeet Singh Sandhawalia and Justice Bipin Chander Negi. The appeal arose from an order confirming an ex parte ad-interim injunction in a patent infringement suit relating to the fertilizer product “Aladdin.” The core dispute before the Division Bench was limited to whether the High Court had territorial jurisdiction to grant and continue interim injunctive relief against Safex Chemicals, the appellant. The plaintiff alleged that infringing goods were sold within Himachal Pradesh, while the appellant contended that it neither carried on business nor authorised sales of the product in the State and that the alleged sales were isolated trap transactions by an unauthorised retailer. The Court closely examined pleadings, invoices, regulatory permissions under the Fertilizer Control Order, and the law laid down by the Supreme Court in Asma Lateef v. Shabbir, holding that jurisdiction must be prima facie established even at the interim stage. It found that there were no pleadings or credible material to show that the appellant manufactured or authorised sale of the product within Himachal Pradesh and that the alleged sales could not confer jurisdiction. Allowing the appeal, the Court vacated the interim injunction insofar as it applied to Safex Chemicals, clarifying that its observations were confined to the issue of interim relief and would not prejudice the trial on merits.

[Disclaimer: Readers are advised not treat this as a substitute for legal advise as it may contain errors in perception,interpretation and presentation of facts and law.]

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**Safex Chemicals Private Limited v. SML Limited & Another**

**Court:** High Court of Himachal Pradesh, Shimla | **Case No.:** COMAP No. 2 of 2025 | **Date of Judgment:** 4th June, 2026 | **Bench:** Hon'ble Chief Justice G.S. Sandhawalia & Hon'ble Justice Bipin Chander Negi (judgment authored by Justice Bipin Chander Negi)

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When Trap Purchases Are Not Enough: Territorial Jurisdiction in Patent Infringement Suits

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Territorial Jurisdiction at Interim Injunction Stage to Be Decided on the Basis of Plaint, written statement and documents on record.

Introduction

One of the most fundamental questions in any civil lawsuit is whether the court where the suit is filed actually has the authority to hear it. This authority, known as territorial jurisdiction, determines which court can entertain a dispute based on geography , where the defendant resides, where the alleged wrong occurred, or where business is carried on. In intellectual property disputes, particularly those involving patents, plaintiffs sometimes file suits in distant courts by relying on small, strategically arranged purchases of the allegedly infringing product within that court's territory. These are commonly called "trap purchases" or "trap transactions." The question of whether such purchases alone are sufficient to drag a defendant into litigation before a court far removed from where it actually operates is one that courts across India have grappled with repeatedly.

The Himachal Pradesh High Court, in its decision dated 4th June 2026 in COMAP No. 2 of 2025, addressed this precise question in a patent infringement dispute between SML Limited as the plaintiff and Safex Chemicals Private Limited as one of the defendants. The Division Bench, comprising the Chief Justice and another learned Judge, examined whether the Himachal Pradesh High Court had the territorial jurisdiction to entertain a suit and, more immediately, whether the interim injunction granted against Safex Chemicals Private Limited should be sustained. The court's conclusion was a clear and firm answer: four invoices generated by a third party who was neither an authorized dealer nor agent of the defendant, combined with an unsubstantiated claim about a manufacturing unit, did not create a prima facie basis for the court's jurisdiction. The interim injunction was accordingly set aside.

Factual and Procedural Background

SML Limited, the plaintiff in the underlying suit, claimed to be the owner of a patent and filed a commercial suit before the learned Single Judge of the Himachal Pradesh High Court, alleging that two defendants had infringed its patent by manufacturing, marketing, and selling a product under the brand name "Aladdin." The product in question is a fertilizer-based commodity regulated under the Fertilizer (Control) Order, 1985, which itself is issued under the Essential Commodities Act, 1955.

The first defendant in the suit was a local entity with its principal place of business within Himachal Pradesh. The second defendant was Safex Chemicals Private Limited, which became the appellant before the Division Bench. Safex Chemicals had addresses in New Delhi and Jaipur, Rajasthan, and did not have any business establishment within the territorial limits of the Himachal Pradesh High Court.

On 24th July 2023, the learned Single Judge granted an ex-parte ad-interim injunction against both defendants. This order was later confirmed by the learned Single Judge on 6th June 2025 in OMP No. 320/23 in COMS No. 6/2026. It was this confirmed order that Safex Chemicals challenged before the Division Bench in COMAP No. 2 of 2025. By agreement between the parties, the Division Bench confined its hearing only to the preliminary issue of territorial jurisdiction.

The plaintiff's case for jurisdiction rested on two broad planks. First, it was averred in paragraph 8 of the plaint that Safex Chemicals carries on business for gain within the territorial jurisdiction of the court, and relevant downloaded documents were annexed as Annexure "D." Second, it was averred in paragraphs 29, 55, and 56 of the plaint that infringing products manufactured and marketed by Safex Chemicals were being offered for sale within the territorial limits of the court. To support this, four sale invoices were placed on record as Annexure "M," showing that the product "Aladdin" had been sold by the first defendant within Himachal Pradesh.

Safex Chemicals filed a detailed written statement contesting jurisdiction. It asserted that it had no authorized dealers or retailers within Himachal Pradesh, that "Aladdin" was a regulated commodity and it had obtained permission to market it only in certain specific states, that Himachal Pradesh was not among those states, and that the first defendant had purchased the product from Haryana, where Safex Chemicals was authorized to sell, and had then brought it into Himachal Pradesh for resale. Safex Chemicals categorically denied being in any business relationship with the first defendant.

At a significant hearing on 29th December 2025, the Division Bench noted procedural infirmities in the counter-affidavit filed by the first defendant before the Single Judge and directed that the proprietor of the first defendant, one Mr. Mohan Lal Sharma, appear in person. On 8th January 2026, Mr. Mohan Lal Sharma appeared before the Division Bench and produced original documents. His authorization letter showed that he was licensed only to sell straight fertilizers, NPK complex fertilizers, and bio fertilizers from specified sources  none of which included "Aladdin" or Safex Chemicals as a source. He himself acknowledged that he had no authority to sell "Aladdin," which he had purchased from a shop called Jangra Khad Beej Bhandar, Sarmathla, not directly from Safex Chemicals or its authorized dealers.

The Dispute Before the Division Bench

The core dispute before the Division Bench was whether the Himachal Pradesh High Court had the territorial jurisdiction to entertain the suit and grant injunction against Safex Chemicals, a company based entirely outside Himachal Pradesh. The specific grievance of Safex Chemicals was directed at the finding in paragraph 55 of the Single Judge's order dated 6th June 2025, which held that jurisdiction existed primarily on the basis of two factors: the sale invoices generated by the first defendant, and an alleged manufacturing unit of Safex Chemicals located at Una, Himachal Pradesh.

Safex Chemicals argued that the manufacturing unit finding was unsupported by any pleading in the plaint or replication, that the invoices were not issued to the plaintiff but to unconnected third parties, that there was no explanation for how the plaintiff obtained those invoices, and that the first defendant was demonstrably not an authorized dealer of Safex Chemicals. It further argued, drawing on the Supreme Court's ruling in Asma Lateef and Another vs. Shabbir and Others, reported as (2024) 4 SCC 696, that even for the purpose of granting interim injunction, the court must record at least a prima facie satisfaction regarding its own jurisdiction.

The plaintiff countered that even a single act of selling, making, offering for sale, or importing a patented product within a court's territory violates the rights of the patentee under Section 48 of the Patents Act, 1970, and that this single act is sufficient to invoke jurisdiction. The plaintiff also argued that since damages were also claimed, Section 19 of the Code of Civil Procedure would apply, which provides that where a wrong is committed within the limits of one court and the defendant resides or carries on business within another court, the plaintiff may choose either forum. It also sought to distinguish the judgments cited by Safex Chemicals on the ground that those cases involved the Trademarks Act, not the Patents Act, under which the nature of rights and violations is different.

Reasoning and Analysis of the Court

The court began its analysis by firmly endorsing the principle laid down in Asma Lateef and Another vs. Shabbir and Others, (2024) 4 SCC 696, where the Supreme Court of India had clarified that the question of jurisdiction is not merely a question to be deferred to trial. Even at the stage of considering an application for interim relief, the court must record at least a prima facie satisfaction that it has the jurisdiction. If a party raises a specific objection that the suit is not maintainable or is barred before the court, the grant of interim relief must be preceded by the court's prima facie finding on this jurisdictional question. The court cannot simply proceed to grant protection on the assumption that jurisdiction will be determined later as a preliminary issue under Order XIV Rule 2 of the Code of Civil Procedure. To do so would amount to an improper exercise of judicial power.

Turning to the first basis of jurisdiction  the finding about the manufacturing unit at Una, Himachal Pradesh  the court subjected it to close scrutiny. The court observed that paragraph 8 of the plaint averred that Safex Chemicals "carries on business for gain within the territorial jurisdiction" of the court, with reference to documents annexed as Annexure "D." However, on an examination of Annexure "D," the court found that nothing in those documents indicated that Safex Chemicals had a manufacturing facility within the territorial jurisdiction of the court. The plaint and the replication were both silent on the question of any manufacturing unit in Himachal Pradesh.

The court then examined a document placed on record by Safex Chemicals itself an authorization letter  issued by the State of Madhya Pradesh, authorizing Safex Chemicals to carry on business for a period of five years from 29th June 2021 to 28th June 2026 within Madhya Pradesh. Annexed to this authorization letter was Annexure-I, which detailed the products and their sources. The court found that the product "Aladdin" appeared at serial numbers 5 and 8 of this annexure. Insofar as serial number 5 was concerned, the product was manufactured by Safex Chemicals itself at Delhi. Insofar as serial number 8 was concerned, the same product was manufactured by an entirely separate entity, M/s Him Bio Agro, at Village Bala, Bathari, Tehsil Haroli, District Una, Himachal Pradesh.

The court drew a critical conclusion from this document. The manufacturing unit at Una belonged not to Safex Chemicals but to M/s Him Bio Agro, a completely separate and distinct entity. Therefore, the finding in paragraph 55 of the learned Single Judge's impugned order  that Safex Chemicals had a manufacturing unit within the territorial jurisdiction  was factually incorrect and unsupported by the record. The learned Single Judge appeared to have relied on a brochure from Safex Chemicals' website, which, on closer examination, did not support the conclusion that Safex Chemicals itself manufactured the product in Himachal Pradesh. Furthermore, if "Aladdin" was being manufactured at Una and was available locally in Himachal Pradesh, there would have been no reason for the first defendant to have procured it from Haryana, which is what actually happened.

Turning to the second basis of jurisdiction  the sale invoices  the court carefully examined their character and provenance. The court noted that Safex Chemicals had obtained permission to market "Aladdin" in only five states, as stated in paragraph 12 of its written statement, though paragraph 83(b) of the same written statement disclosed that the product was actually being sold in eleven states. Himachal Pradesh was conspicuous by its absence from either list. There was no permission granted to Safex Chemicals to sell "Aladdin" within the State of Himachal Pradesh, and the plaint itself contained no averment that "Aladdin" was being sold in Himachal Pradesh through unauthorized channels in breach of the regulatory framework.

The written statement of Safex Chemicals specifically averred that "Aladdin," being a regulated product under the Fertilizer (Control) Order, 1985, was sold only through authorized dealers, and that the first defendant was not its authorized dealer. When Mr. Mohan Lal Sharma appeared before the Division Bench on 8th January 2026, this was confirmed beyond doubt. He acknowledged that he had no authority to sell "Aladdin" and had procured it from Jangra Khad Beej Bhandar, Sarmathla, not from Safex Chemicals or any of its authorized dealers. He had purchased it from Haryana, where Safex Chemicals had authorization to sell, and then resold it locally.

The court then analyzed the four invoices that formed the plaintiff's primary evidentiary basis for invoking jurisdiction. These invoices were issued by the first defendant, not to the plaintiff itself, but to unconnected third parties. The plaintiff provided no explanation as to how it came to obtain these invoices. The plaint contained no averments establishing any connection between Safex Chemicals and the first defendant as principal and agent, or as manufacturer and authorized dealer. In this light, the court had to assess whether these transactions could prima facie be said to have been obtained by fair means.

The court referred to the Delhi High Court's judgment in Rieter AG and Another vs. Kavassery Narayanaswamy Venkatasubramanian, reported as 2025 SCC Online Del 4379, and the Delhi High Court's judgment in Kubota Corporation and Godabari Agro Machinery and Services India Pvt. Ltd. (CS Comm 655 of 2023) and Others vs. Great Galleon Venture Limited vs. Champa Prema Tandel Sole Proprietor of Dharmesh Distiller and Another, CS (CoMM) No. 343/2023, decided on 1st May 2024  both of which the plaintiff had relied upon. The court distinguished these cases on a crucial ground. In Rieter AG, the plaintiff's investigator had directly placed an order with the defendant for the infringing goods. In Kubota Corporation, the defendant had directly made an offer for sale to the plaintiff's investigator. In both those cases, there was a direct, authentic, and traceable transaction between the plaintiff's representative and the defendant's representative, demonstrating infringement within the court's territory by fair means. The present case was entirely different: the invoices were transactions between the first defendant and unconnected third parties, the first defendant was not Safex Chemicals' authorized representative, and the plaintiff could not explain how it obtained those invoices.

The court also addressed the Madras High Court's judgment in OSA Nos. 38, 40 and 42 of 2020 and CMP Nos. 1518, 1538 and 1544 of 2020, titled Sulphur Mills Limited vs. M/s Dayal Fertilizers Pvt. Ltd. and Others, decided on 11th November 2020, where it had been held that a suit could be maintained on the basis of a lone "trap order" and that whether the defendant was offloading its product within the court's jurisdiction was a matter for trial. The court noted that this ruling arose in the context of an application seeking revocation of leave, not an application for interim injunction under Order 39 Rules 1 and 2 of the Code. The considerations applicable are materially different in the two contexts.

On this point, the court drew extensively from the Delhi High Court Division Bench judgment in M/s Allied Blenders and Distillers Pvt. Ltd. vs. Prag Distillery Pvt. Ltd. and Another, reported as 2017 SCC Online Del 7225, FAO (OS) No. 49/2017, decided on 1st March 2017. This judgment clarified that the standard of examination under Order VII Rule 10 of the Code (for return of plaint) is entirely different from the standard applicable under Order XXXIX Rules 1 and 2 (for interim injunction). Under Order VII Rule 10, the court examines only the averments in the plaint and assumes them to be correct. But when considering interim injunction, the court must look at not just the plaint but also the defendant's reply and written statement. A mere averment in the plaint is not enough. The assumption that plaint averments are correct is unavailable. If the issue of jurisdiction is highly debatable and prima facie not tenable, the court can refuse interim injunction on that ground even if it has previously declined to return the plaint. The earlier refusal to return the plaint does not foreclose the defendant's right to raise jurisdiction as an objection to interim relief.

The court also cited the Supreme Court's judgment in Exphar Sa vs. Eupharma Laboratories Ltd., (2004) 3 SCC 688, which had held that when a jurisdictional objection is raised by demurrer (without a full trial), the court must proceed on the assumption that the facts as pleaded are true. However, as clarified in Allied Blenders, this principle is confined to the Order VII Rule 10 context and does not apply when the court is considering interim relief.

On the plaintiff's argument based on Section 48 of the Patents Act, 1970, the court accepted the legal proposition that even a single act of selling, making, offering for sale, or importing a patented product without authorization violates the patentee's rights. However, the court held that the real question was whether such an act had been committed by Safex Chemicals within the court's territorial jurisdiction. Given that the first defendant had no authorization from Safex Chemicals, that the goods had been procured from Haryana through channels entirely unconnected to any agency of Safex Chemicals, and that Safex Chemicals had no authorized dealer in Himachal Pradesh, the court concluded prima facie that no such act attributable to Safex Chemicals had taken place within its territorial limits.

On the Section 19 CPC argument, the court was equally dismissive. Section 19 provides that where a wrong is committed within the jurisdiction of one court and the defendant resides or carries on business within the jurisdiction of another, the plaintiff may sue in either. However, the court held that for Section 19 to apply, the wrong must first be shown prima facie to have been committed by the defendant within the court's territory. Since the evidence indicated that no act attributable to Safex Chemicals had been committed within Himachal Pradesh, Section 19 was of no assistance to the plaintiff.

The court also took a broader view of the risks of allowing jurisdiction to be manufactured through the mechanism of unverified trap transactions. It observed that if the mere existence of a few invoices issued by an entity that is not an authorized representative of the defendant to some third parties is sufficient to confer jurisdiction, any company can easily be dragged into distant litigation, regardless of whether it has any genuine connection to that forum. This would be an open invitation to forum shopping and harassment. The court was therefore of the view that such transactions must at least prima facie appear to have been obtained by fair and authentic means, a threshold that the plaintiff in this case could not meet.

Final Decision of the Court

The Division Bench allowed the appeal preferred by Safex Chemicals Private Limited. It held that prima facie there was no cause of action or wrong attributable to Safex Chemicals that could invoke the territorial jurisdiction of the Himachal Pradesh High Court. The alleged cause of action or wrong, if any, was declared to be a triable issue  meaning the question could be examined at full trial on the basis of additional material if brought on record. As a consequence, the impugned interim order dated 6th June 2025, passed in OMP No. 320/23 in COMS No. 6/2026, insofar as it operated against Safex Chemicals Private Limited (defendant No. 2), was vacated. The court carefully added that these observations were confined only to the question of interim injunction at this stage and would not influence the learned Single Judge in arriving at a finding on the basis of any additional material that the parties may bring on record in the main suit. The appeal was accordingly disposed of on 4th June 2026.

Points of Law Settled

This judgment makes a significant and clear contribution to the law on several fronts. It reaffirms that territorial jurisdiction is not a question to be deferred indefinitely  it must be addressed prima facie even at the stage of interim injunction, following the Supreme Court's mandate in Asma Lateef, (2024) 4 SCC 696. It firmly distinguishes between the standard applicable under Order VII Rule 10 CPC (return of plaint) and Order XXXIX Rules 1 and 2 CPC (interim injunction)  a distinction that significantly raises the bar for obtaining interim relief when jurisdiction is genuinely disputed. It establishes that in patent infringement cases, trap purchases or trap transactions must be shown prima facie to have been obtained by fair and authentic means before they can form the basis for invoking territorial jurisdiction. Where the alleged infringing product reaches the court's territory not through the defendant's own acts or through any authorized agent or dealer of the defendant, but through independent and unconnected intermediaries, no cause of action against the defendant can be said to have arisen within that territory. Finally, it clarifies that Section 48 of the Patents Act, 1970, while conferring rights against a single infringing act, still requires prima facie proof that the act was committed by the defendant within the court's jurisdiction.

Case Title: Safex Chemicals Private Limited Vs. SML Limited and Another

Date of Order: 4th June 2026

Case Number: COMAP No. 2 of 2025

Court: High Court of Himachal Pradesh, Shimla

Hon'ble Judges: Hon'ble Mr. Gurmeet Singh Sandhawalia, Chief Justice, and Hon'ble Mr. Justice Bipin Chander Negi

Disclaimer: Readers are advised not to treat this as a substitute for legal advice 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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Brief Headnote

Facts: The plaintiff SML Limited sued two defendants for patent infringement relating to a fertilizer product sold under the brand name "Aladdin." The Himachal Pradesh High Court granted and confirmed an ex-parte ad-interim injunction against both defendants including Safex Chemicals Private Limited, whose addresses were in New Delhi and Jaipur. Safex Chemicals challenged jurisdiction on the ground that it had no business presence, authorized dealer, or manufacturing unit in Himachal Pradesh, and that the invoices relied upon by the plaintiff were issued by an unauthorized third party who had independently procured the product from Haryana.

Decision: The Division Bench allowed the appeal, held that no prima facie cause of action attributable to Safex Chemicals had arisen within the territorial jurisdiction of the court, vacated the interim injunction against Safex Chemicals, and ruled that trap transactions by unauthorized intermediaries, unsupported by any pleading or evidence of agency or authorization, are insufficient to invoke territorial jurisdiction for the purpose of granting interim relief in a patent suit.

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SC-Dhariwal Industries Ltd. and Another Vs. M.S.S. Food Products

Malikchand vs Manikchand: The Battle Over an Unregistered Trademark and the Supreme Court's Guidance on Passing Off, Assigned Marks, and Interim Injunctions

Prior Use , Few Advertisement succeeded in Passing off Action: Dhariwal Industries Vs. M.S.S. Food Products: MALIKCHAND Vs MANIKCHAND by Supreme Court

Introduction

When two businesses claim rights over similar-sounding trademarks for the same category of products, and neither of them holds a registered trademark, the resulting legal battle can be complex, bitter, and full of disputed facts. The situation becomes even more complicated when one party claims its rights not on the basis of its own long use of the mark, but on the basis that the mark was assigned to it by someone who used it earlier. In such circumstances, can a court grant an emergency injunction stopping one party from using its mark while the full case is being heard? And if two courts below have already decided to grant such an injunction, should the Supreme Court step in and overturn that decision?

These are the questions that the Supreme Court of India addressed in its decision dated 25 February 2005 in Dhariwal Industries Ltd. and Another v. M.S.S. Food Products, reported as (2005) 3 Supreme Court Cases 63. The judgment, delivered by a Bench comprising Justice B.P. Singh and Justice P.K. Balasubramanyan, touches upon several important legal principles  the passing off action for unregistered trademarks, the right to claim prior use through an assignor, the scope of the Supreme Court's interference in interlocutory matters, and the role of public health considerations in the balance of convenience. It is a judgment that is practical, nuanced, and genuinely useful for anyone who deals with trademark disputes in the consumer goods sector.

Factual and Procedural Background

The dispute in this case arose out of competing claims over two very similar-sounding marks: "Malikchand" and "Manikchand." Both marks were used for the same category of products  pan masala, gutkha, supari, and supari mix. Neither party held a registered trademark at the time the suit was filed, though both had subsequently applied for registration and their applications were pending.

M.S.S. Food Products, the respondent-plaintiff, claimed that it and its predecessors had been using the mark "Malikchand" since around 1960 for these products. The plaintiff's claim of prior use was not based solely on its own use of the mark. It claimed to have received the right to use the mark "Malikchand" through a series of three assignments  that is, formal transfers of the mark  from the original users. In other words, the plaintiff was saying: we may not have started using this mark ourselves from the very beginning, but the original users transferred their rights to us through proper legal documents, and we can therefore claim the benefit of their prior use. This concept of "tacking on" the prior use of the assignor to the assignee's claim is recognized under Section 39 of the Trade Marks Act, 1999, which allows an unregistered trademark to be assigned or transmitted with or without the goodwill of the business.

The defendants, Dhariwal Industries Ltd. and another, were also marketing pan masala, gutkha, and supari under the mark "Manikchand." They claimed to be well-established in the market, having built up considerable reputation and goodwill under that name. They asserted that the plaintiff was a rival trader who was well aware of their use of "Manikchand" for a considerable time, and that the plaintiff's belated approach to the court was an attempt to interfere with their established trade.

The plaintiff filed Civil Suit No. 8-A of 2004 before the District Court of Mandaleshwar, Madhya Pradesh. Along with the suit, it filed an application, designated IA No. 2 of 2004, under Order 39 Rules 1 and 2 of the Code of Civil Procedure, 1908, seeking an interim injunction to restrain the defendants from selling products under the mark "Manikchand" pending the outcome of the suit. The defendants appeared and not only filed objections to the injunction application but also filed their own application, IA No. 5 of 2004, under Order 39 Rule 4 of the Code of Civil Procedure, seeking to vacate the ad interim injunction that the trial court had initially granted.

Both parties produced various documents before the trial court, and the genuineness and validity of those documents was hotly contested from both sides. The trial court, by its order dated 6 April 2004, held that the plaintiff had made out a prima facie case for an interim injunction and that the balance of convenience was in its favour. It accordingly confirmed the ad interim injunction, allowed IA No. 2 of 2004, and dismissed IA No. 5 of 2004, meaning the injunction against the defendants would continue until the final disposal of the suit.

The defendants then appealed to the Madhya Pradesh High Court under Order 43 Rule 1(r) of the Code of Civil Procedure, which allows a party to appeal against an order granting or refusing an interlocutory injunction. The High Court, by its judgment and order dated 11 May 2004 in MA No. 904 of 2004, examined the arguments raised before it and came to the conclusion that the trial court's order could not be described as incorrect, arbitrary, or perverse. The High Court confirmed the injunction. However, it gave an additional direction to the trial court to conclude the trial of the suit expeditiously, preferably within a period of six months from the date of receipt of a copy of its order. The defendants were not satisfied with this outcome and approached the Supreme Court of India by way of a Special Leave Petition, which was converted into Civil Appeal No. 1407 of 2005.

The Dispute

The central issues before the Supreme Court were of both law and fact, though the Court was careful to recognize the limited scope of its jurisdiction at this interlocutory stage. The core factual question was whether the plaintiff had prima facie established that it was the prior user of the mark "Malikchand" — either through its own use or through the assignments from its predecessors. The defendants argued strenuously that the assignment documents relied upon by the plaintiff were forged or manufactured specifically for the purpose of this litigation, and hence entirely unreliable.

The core legal questions were threefold. First, can a plaintiff in a passing off action base its claim of prior use on assignments received from earlier users  that is, can it "tack on" the prior use of its assignors? Second, what documents and materials can be considered by the Supreme Court when hearing an appeal against an interlocutory order, particularly when fresh documents have been placed before it that were never shown to the trial court or the appellate court? Third, given that both the trial court and the High Court had granted and confirmed the interim injunction, was there any ground for the Supreme Court to interfere at this stage under its special leave jurisdiction under Article 136 of the Constitution of India?

Additionally, two subsidiary questions arose. The defendants had argued that even if the injunction was to be maintained, they should be allowed to sell their products under the "Manikchand" name if they maintained separate accounts of sales, so that any damages payable to the plaintiff at the end of the trial could be calculated. They also argued that the plaintiff had been guilty of delay and laches  meaning that the plaintiff had known about the defendants' use of "Manikchand" for a long time and had waited too long before filing the suit, thereby disentitling itself to an urgent remedy.

Reasoning and Analysis of the Judge

The Court  noted that Section 27 of the Trade Marks Act, 1999 expressly states that nothing in the Act shall be deemed to affect the right of action against any person for passing off goods as the goods of another person, or the remedies in respect thereof. This provision makes clear that a passing off action is completely independent of registration  the absence of a registered trademark does not stand in the way of a party bringing a passing off suit and seeking an injunction, as long as it can establish prima facie that it was the prior user of the mark and that the balance of convenience favours the grant of an injunction.

On the question of whether an assignee can claim the benefit of its assignor's prior use, the Court referred to Section 39 of the Trade Marks Act, 1999. That provision states that an unregistered trademark may be assigned or transmitted with or without the goodwill of the business concerned. The Court held that this provision makes it legally possible for a plaintiff or defendant to show that an unregistered trademark that was being used by another person earlier had been assigned to it, and that such an assignee can tack on the prior use of its predecessor. This is an important and clear ruling: in a passing off action, a party whose title to a mark derives from an assignment is not at a disadvantage compared to someone who has personally used the mark from the beginning, provided the assignment is valid and genuine. The plaintiff was therefore legally entitled to rely on the assignments to assert prior use of the mark "Malikchand."

The Court then addressed the fundamental evidentiary question at this stage: what happens when the very documents on which a party's case rests are challenged as forged or fabricated? The defendants had invested considerable time and effort before the Supreme Court in challenging the three assignment deeds produced by the plaintiff, raising issues about the stamp papers used, the dates of execution, and the licence status of the stamp vendor. The Court observed that the trial court had noted the prima facie evidence of prior use while also acknowledging that the question of whether the assignment documents were genuine was one to be finally decided only at trial. The High Court had similarly taken the view that a wholesale condemnation of the plaintiff's documents as forged could not be made at the interlocutory stage. The Court in the Supreme Court agreed with this approach. It noted that even before it, a document relating to one of the prior assignments had allegedly been seized during an income tax raid in 2001, and a document acknowledging that seizure was produced. The Court held that at this prima facie stage, it was not possible to decide whether the documents had been manufactured for the litigation. Questions of genuineness, admissibility, and discrepancy in documents are matters to be decided at trial, not at the interlocutory stage.

The Court addressed the scope of its own jurisdiction in a pointed and practical way. It noted that the present appeal had come before it under Article 136 of the Constitution of India, which allows the Supreme Court to grant special leave to appeal from any judgment or order passed by any court or tribunal in India. When the Supreme Court exercises this jurisdiction in an interlocutory matter, the materials it can properly consider are normally those that were produced before the trial court or before the appellate court with the permission of that court under Order 41 Rule 27 of the Code of Civil Procedure. In this case, the defendants had produced a large number of documents before the Supreme Court that had never been shown to the trial court or the High Court. The Court firmly declined to enter into an adjudication based on these fresh documents, particularly since their authenticity and genuineness were mutually questioned. It confined itself to the materials that had been before the courts below, as is appropriate in an interlocutory appeal of this nature.

On the question of delay and latches, the Court accepted that this was a potentially relevant consideration in the balance of convenience analysis. However, it noted two important factors. First, the High Court had concluded that the present suit was in substantial part triggered by the defendants' own suit filed in the High Court of Bombay, where they had sought to restrain the plaintiff from using the mark "Malikchand" on the ground that it was deceptively similar to their mark "Manikchand." The plaintiff, apprehensive that its mark was about to be annihilated by a court order, responded by filing the present suit to assert its own prior user rights. In that context, the delay in approaching the trial court was understandable and was not the kind of unjustified delay that disentitles a party to interim relief. Second, and more importantly, the argument of delay and laches had not been properly or clearly raised by the defendants in their written submissions before the trial court or the High Court. It would not be appropriate for the Supreme Court to refuse relief on a ground that had not been squarely put before and considered by the courts below. The Court noted that in any event, once the trial court had adverted to the question and granted the injunction, and the High Court had confirmed it, the Supreme Court at the special leave stage would not be justified in reversing that decision solely on the ground of delay and laches. The argument was kept open for the defendants to raise at the final trial.

On the question of balance of convenience, the defendants had argued that instead of maintaining the injunction, the Court should allow them to continue selling under the "Manikchand" mark on the condition that they maintained separate accounts of sales, so that any ultimate liability could be quantified. The Court rejected this suggestion. It noted that the interim injunction had been in force since 16 March 2004 — at least seven months by the time the matter came before the Supreme Court. Importantly, the defendants had already changed the format of their product wrapper and were continuing to market their products under the brand name "RMD" after the injunction was granted. In this context, directing them to maintain separate accounts would in effect mean modifying the injunction and allowing them to resume use of the disputed name "Manikchand," which the courts below had specifically prohibited. The Court declined to do this.

The Court also noted, in a passage of significant public interest value, that the High Court had drawn attention to several cases registered against the defendants under the Prevention of Food Adulteration Act on the ground of alleged adulteration of the pan masala and gutkha sold by them under the name "Manikchand." The Court invoked Article 47 of the Constitution of India, which places a duty on the State to improve public health and nutrition and to prohibit the consumption of intoxicating drinks and drugs injurious to health. The Court clarified that it was referring to the adulteration aspect not to pronounce on the merits of those prosecutions, but only to reinforce the conclusion that in exercising its discretion, it would not interfere with the injunction granted below. The product itself  gutkha and pan masala  was noted to be potentially harmful to health, and adulterated versions of it even more so. This consideration reinforced the balance of convenience in favour of maintaining the injunction.

Finally, the Court reiterated the general principle that there cannot be any absolute rule regarding interference or non-interference in interlocutory matters when the Supreme Court exercises its jurisdiction under Article 136. The arguments of both sides must be kept in mind. However, the Court must also guard against making final pronouncements on contested issues of fact lest it prejudice the fair trial of the suit. Both the balance of convenience and the prima facie case had been decided in the plaintiff's favour by two courts. The Supreme Court found no basis to disagree.

Final Decision of the Court

The Supreme Court dismissed the appeal filed by Dhariwal Industries Ltd. It declined to interfere with the order of the Madhya Pradesh High Court confirming the interim injunction granted by the trial court. The injunction restraining the defendants from selling products under the mark "Manikchand" was upheld. The Court also directed the trial court to comply with the High Court's earlier direction to try and dispose of the suit expeditiously, and to complete the trial and final disposal within a period of six months from the date of the Supreme Court's order of 25 February 2005.

Points of Law Settled in the Case

This judgment settles several important and practically useful legal principles that continue to be relevant in trademark and passing off litigation.

The first and most significant point is that an assignee of an unregistered trademark can claim the benefit of the prior use of its assignor. Under Section 39 of the Trade Marks Act, 1999, an unregistered mark can be assigned with or without the goodwill of the business. The assignee is entitled to "tack on" the earlier use by its predecessor to establish its own priority of use for the purpose of a passing off action. This means that a person who acquires an unregistered mark through a valid assignment does not have to start counting priority only from the date of the assignment  it can go back to when the original user first used the mark.

The second point is that in a passing off action, the absence of registration does not bar a plaintiff from claiming an interim injunction, provided it can make out a prima facie case of prior user and a balance of convenience in its favour. Section 27 of the Trade Marks Act, 1999 expressly preserves the common law right of action for passing off regardless of whether either party holds a registered mark.

The third point relates to the evidence at the interlocutory stage. A court cannot wholesale condemn documents produced by a party as forged or fabricated at the interim stage of a lawsuit. The genuineness of documents is a matter to be decided at trial. At the interlocutory stage, the court only needs to satisfy itself that the documents prima facie support the case being made, and that there is no compelling reason to reject them entirely before the trial.

The fourth point concerns the scope of the Supreme Court's jurisdiction under Article 136 of the Constitution in interlocutory matters. The Court should not base its decision on fresh documents produced for the first time before it, especially when those documents' authenticity is disputed. The materials to be considered are normally those that were before the trial court and the appellate court.

The fifth point is that delay and laches, while relevant to the balance of convenience, will not automatically disentitle a party to an interim injunction  particularly when the delay was triggered by the conduct of the opposing party itself, and when the argument of delay was not properly raised and argued before the courts below.

Case Title: Dhariwal Industries Ltd. and Another Vs. M.S.S. Food Products

Date of Order: 25 February 2005

Case Number: Civil Appeal No. 1407 of 2005 (Arising out of SLP (C) No. 14862 of 2004)

Citation: (2005) 3 Supreme Court Cases 63

Name of Court: Supreme Court of India

Name of Hon'ble Judges: Justice B.P. Singh and Justice P.K. Balasubramanyan

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

Disclaimer: Images used herein do not reflect actual images used in Judgement and that the same are for illustrative purpose only. Readers are advised not to treat this as substitute for legal advice as it may contain errors in perception, interpretation, and presentation.  

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Headnote

SC-Dhariwal Industries Ltd. and Another Vs. M.S.S. Food Products — Supreme Court of India — Civil Appeal No. 1407 of 2005 — Decided on 25 February 2005 — (2005) 3 SCC 63

 The plaintiff, as assignee of the unregistered trade mark “Manikchand,” sought an injunction against the defendants for passing off. The Supreme Court held that an assignee of an unregistered trade mark can maintain a passing-off action and may rely on the prior use of the mark by its assignor. At the interlocutory stage, disputed questions regarding the authenticity of assignment documents were not to be finally determined. Finding no perversity in the concurrent orders granting interim injunction and no ground for interference under Article 136, the Court dismissed the appeal and upheld the interim injunction, while directing expeditious disposal of the suit.