Zydus Wellness Products Limited Vs. Karnal Pack

In Zydus Wellness Products Limited Vs. Karnal Pack and Others, CS (COMM) No. ___ of 2025, Neutral Citation No. 2025:HHC:29474, decided on 29 August 2025 by the High Court of Himachal Pradesh, Justice Ajay Mohan Goel rejected the commercial suit filed by Zydus alleging trademark infringement and passing off concerning its registered marks “Glucon-D” and “Glucon-C”. The plaintiff had sought urgent interim injunction against the defendants for using marks such as “Glucose-D”, “Glucose-C” and “Glucospoon-D”. The Court observed that although the plaintiff claimed urgent relief, the alleged infringement had been within its knowledge since April 2023 and there was no substantial change in circumstances justifying bypass of mandatory pre-institution mediation under Section 12A of the Commercial Courts Act, 2015. Relying upon the Supreme Court decisions in Patil Automation Pvt. Ltd. v. Rakheja Engineers Pvt. Ltd., (2022) 10 SCC 1, Yamini Manohar v. T.K.D. Keerthi, (2024) 5 SCC 815, and M/s Dhanbad Fuels Pvt. Ltd. v. Union of India, 2025 SCC OnLine SC 1129, the Court held that the plea of urgent interim relief cannot be used as a camouflage to avoid mandatory mediation. Holding that the suit was filed in violation of Section 12A of the Commercial Courts Act, the Court rejected the plaint under Order VII Rule 11(d) CPC.

Disclaimer: Donot treat this as substitute for legal advise as it may contain subjective errors.

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

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Zydus Wellness v Karnal Pack: Himachal Pradesh High Court Rejects Trademark Suit for Non-Compliance of Section 12A

Mandatory Pre-Institution Mediation Under Commercial Courts Act: Analysis of Zydus v Karnal Pack Judgment

Can Trademark Suits Bypass Mediation? Himachal Pradesh High Court Explains in Zydus Case

Section 12A Commercial Courts Act Explained Through Zydus Wellness v Karnal Pack

Urgent Interim Relief Cannot Be a Camouflage: Important Trademark Judgment by Himachal Pradesh High Court

Trademark Infringement Suit Rejected for Avoiding Mandatory Mediation: Zydus v Karnal Pack Analysis

Himachal Pradesh High Court on Pre-Litigation Mediation in Trademark Disputes

Order VII Rule 11 CPC and Section 12A Commercial Courts Act: Detailed Analysis of Zydus Judgment

Introduction

The judgment delivered by the High Court of Himachal Pradesh in Zydus Wellness Products Limited v. Karnal Pack and Others is an important decision concerning the mandatory nature of pre-institution mediation under Section 12A of the Commercial Courts Act, 2015. The case arose from a trademark infringement and passing off dispute relating to the well-known marks “Glucon-D” and “Glucon-C”. While the plaintiff sought urgent interim injunction against the defendants for allegedly using deceptively similar marks such as “Glucose-D”, “Glucose-C” and “Glucospoon-D”, the Court ultimately rejected the plaint itself on the ground that the plaintiff had bypassed mandatory pre-institution mediation without establishing any genuine urgency.

The decision is significant because it reiterates that commercial litigants cannot avoid the statutory requirement of mediation merely by making a formal prayer for urgent interim relief. The Court carefully examined whether the urgency pleaded by the plaintiff was real or merely a device to bypass Section 12A of the Commercial Courts Act. The judgment also consolidates and applies several important Supreme Court rulings on mandatory mediation in commercial disputes.

Factual and Procedural Background

The plaintiff, Zydus Wellness Products Limited, claimed to be the proprietor of the registered trademarks “Glucon-D” and “Glucon-C”, which are widely known glucose powder-based drink mixes sold across India. The plaintiff alleged that the defendants were manufacturing and selling products under the marks “Glucose-D”, “Glucose-C” and “Glucospoon-D”, which according to the plaintiff were deceptively similar to its registered trademarks and trade dress. The plaintiff also alleged infringement of copyright in packaging and labels. 

The plaint disclosed that the plaintiff had knowledge of the alleged infringement activities since 28 April 2023 when a cease and desist notice was first issued to Defendant No. 2 in relation to the mark “Glucospoon-D”. Thereafter, further notices and reminders were exchanged between the parties throughout 2023 and 2024. The plaintiff alleged that despite repeated legal notices and undertakings given by the defendants, the defendants continued to sell the impugned products through websites such as IndiaMart and Trade India. 

The plaintiff filed a commercial suit seeking injunctions for trademark infringement, passing off, copyright infringement and removal of online listings. The suit also sought urgent interim relief under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908. However, before examining the merits of trademark infringement, the Court was required to determine whether the suit itself was maintainable without compliance of Section 12A of the Commercial Courts Act, 2015. 

Dispute Before the Court

The principal dispute before the Court was whether the plaintiff was justified in bypassing the mandatory requirement of pre-institution mediation under Section 12A of the Commercial Courts Act on the ground that the suit contemplated urgent interim relief.

The defendants argued that the plaintiff had knowledge of the alleged infringement since April 2023 and had continued exchanging notices and correspondence for almost two years before filing the suit. Therefore, according to the defendants, there was no genuine urgency requiring immediate judicial intervention. The defendants contended that the plaintiff was attempting to avoid the mandatory mediation mechanism prescribed under Section 12A of the Commercial Courts Act.

The plaintiff, on the other hand, argued that the defendants were continuously infringing its registered trademarks and that the continuing nature of infringement itself justified urgent interim relief. The plaintiff also relied upon online advertisements and continued sale of products as constituting continuing cause of action. 

Reasoning and Analysis of the Court

Justice Ajay Mohan Goel extensively examined Section 12A of the Commercial Courts Act, 2015 along with the law laid down by the Supreme Court regarding mandatory pre-institution mediation. The Court first reproduced the statutory language of Section 12A, which mandates that a commercial suit “which does not contemplate any urgent interim relief” cannot be instituted unless the plaintiff exhausts the remedy of pre-institution mediation. 

The Court also referred to Order VII Rule 11 of the Code of Civil Procedure, 1908, which empowers courts to reject a plaint where the suit appears from the plaint itself to be barred by law. The Court reiterated that while considering an application under Order VII Rule 11, only the plaint and accompanying documents are to be examined. 

A major part of the judgment discusses the landmark Supreme Court decision in Patil Automation Private Limited v. Rakheja Engineers Private Limited. The High Court reproduced important portions of the judgment where the Supreme Court held that Section 12A of the Commercial Courts Act is mandatory in nature and that commercial suits filed without compliance are liable to be rejected under Order VII Rule 11 CPC. The Supreme Court in Patil Automation emphasized that mediation was introduced to reduce docket explosion in Indian courts and to encourage settlement of commercial disputes through alternative dispute resolution mechanisms. 

The Court particularly relied upon the Supreme Court’s observation that although urgent interim relief suits may bypass mediation, the requirement cannot be avoided through artificial drafting or camouflage. The High Court observed that the Supreme Court had clearly recognized the possibility of litigants attempting to misuse the urgent relief exception to avoid mediation. 

The Court further relied upon Yamini Manohar v. T.K.D. Keerthi, where the Supreme Court clarified that commercial courts must examine the nature of the suit, cause of action and urgency pleaded by the plaintiff to determine whether the urgent interim relief exception is genuinely attracted. The Supreme Court had held that urgent interim relief should not become a “guise or mask” to bypass Section 12A. 

The High Court also discussed M/s Dhanbad Fuels Private Limited v. Union of India, where the Supreme Court reaffirmed that Section 12A is mandatory and reiterated the tests for determining genuine urgency. The Supreme Court clarified that courts must assess whether the plaintiff’s request for urgent interim relief is bona fide from the standpoint of the plaintiff, while simultaneously ensuring that the urgent relief plea is not merely an excuse to avoid mediation. 

After discussing these precedents, the High Court examined the factual chronology in the present case. The Court noted that the plaintiff admittedly became aware of the alleged infringement on 28 April 2023 and thereafter continuously exchanged notices with the defendants over an extended period. The Court observed that from April 2023 till the filing of the suit, there was no “qualitative change” in the cause of action. The alleged infringement continued in the same manner throughout this period. 

The Court found it significant that the plaintiff’s application for urgent interim relief merely narrated the history of infringement and notices but did not specifically explain why immediate judicial intervention suddenly became necessary without resorting to mediation. According to the Court, the plaintiff failed to explain any exceptional circumstances, immediate threat or sudden development justifying bypass of the statutory mediation process. 

Justice Ajay Mohan Goel observed that since the plaintiff had tolerated the alleged infringement for a substantial period and had continued corresponding with the defendants, the mediation process contemplated under Section 12A would not have caused any grave prejudice to the plaintiff. The Court therefore concluded that the plea of urgent interim relief was not genuine and that the application had effectively been filed merely to circumvent mandatory mediation. 

The Court clarified that rejection of the plaint was not based upon refusal of interim relief on merits. Rather, the rejection was based upon the plaintiff’s failure to satisfy the Court regarding the existence of genuine urgency necessary to bypass Section 12A of the Commercial Courts Act. 

Final Decision of the Court

The High Court allowed the application filed under Order VII Rule 11(d) CPC and rejected the plaint. The Court held that the plaintiff had failed to comply with the mandatory requirement of pre-institution mediation under Section 12A of the Commercial Courts Act, 2015 and had not established any genuine urgency justifying exemption from mediation. The Court therefore concluded that the suit was barred by law and liable to rejection.

Point of Law Settled in the Case

The judgment reinforces the mandatory nature of Section 12A of the Commercial Courts Act, 2015 and clarifies that merely adding a prayer for urgent interim relief in a commercial suit is not sufficient to bypass pre-institution mediation.

The decision establishes that courts must independently examine whether genuine urgency exists by considering the factual background, chronology of events and conduct of the plaintiff. If the plaintiff has long-standing knowledge of the dispute and fails to demonstrate any sudden or exceptional circumstance requiring immediate intervention, the suit may be rejected for non-compliance with Section 12A.

The judgment also reiterates that courts must prevent misuse of the urgent interim relief exception and ensure that mediation remains an effective mechanism for resolution of commercial disputes.

Case Details

Case Title: Zydus Wellness Products Limited v. Karnal Pack and Others

Date of Judgment: 29 August 2025

Case Number: CS (COMM) No. ___ of 2025

Neutral Citation: 2025:HHC:29474

Court: High Court of Himachal Pradesh

Hon’ble Judge: Justice Ajay Mohan Goel

Headnote

The Himachal Pradesh High Court rejected a trademark infringement and passing off suit filed by Zydus Wellness Products Limited on the ground of non-compliance with Section 12A of the Commercial Courts Act, 2015. The Court held that the plaintiff had knowledge of the alleged infringement since April 2023 and failed to establish any genuine urgency justifying bypass of mandatory pre-institution mediation. The judgment reiterates that the plea of urgent interim relief cannot be used as a camouflage to circumvent the statutory mandate of mediation in commercial disputes.

Disclaimer: Readers are advised not to treat this as substitute for legal advise 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

Zydus Wellness v Karnal Pack, Section 12A Commercial Courts Act, Mandatory Pre Institution Mediation, Trademark Infringement Case, Passing Off Law India, Himachal Pradesh High Court Judgment, Order VII Rule 11 CPC, Urgent Interim Relief, Patil Automation Case, Yamini Manohar Case, Commercial Suit Rejection, Trademark Litigation India, Commercial Courts Act 2015, Mediation in Commercial Disputes, Glucon D Trademark Dispute, Intellectual Property Litigation, Civil Procedure Code, Trademark Passing Off, Indian Trademark Law, Commercial Litigation India, AdvocateAjayAmitabhSuman, IPAdjutor

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Dabur India Limited Vs. Emami Limited

Dabur India Limited Vs. Emami Limited:22.05.2026: FAO(OS)(COMM) 23/2026: 2026:DHC:4576-DB, Hon'ble  Justices V. Kameswar Rao and  Manmeet Pritam Singh Arora

The Division Bench upheld the interim injunction granted against Dabur in a trade dress passing off dispute concerning “Cool King Thanda Tael” and Emami’s “Navratna Oil”. 

The Court held that although no monopoly could be claimed over individual common elements such as red colour, herbs, hibiscus flowers, ice cubes or descriptive words like “cool” and “thanda”, the overall combination, arrangement and get-up of Dabur’s packaging was deceptively similar to Emami’s established trade dress. 

The Bench observed that Emami had established substantial goodwill and reputation through long and continuous use since 1989, extensive sales, advertisements and dominant market share in the cooling oil segment. 

Rejecting Dabur’s defence that its well-known house mark “DABUR” was sufficient to dispel confusion, the Court held that the overall impression created on an average consumer with imperfect recollection was likely to result in passing off and consumer confusion. The appeal was accordingly dismissed and the interim injunction restraining Dabur from using the impugned trade dress was sustained.

Disclaimer: Donot treat this as substitute for legal advise as it may contain subjective errors.

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

#DaburVsEmami, #DelhiHighCourt, #TradeDress, #PassingOff, #TrademarkLaw, #IPR, #IntellectualProperty, #BrandProtection, #TradeDressInfringement, #CoolingOilDispute, #NavratnaOil, #CoolKingThandaTael, #CommercialCourts, #TrademarkDispute, #IndianIPLaw, #IPLitigation, #ConsumerConfusion, #PassingOffAction, #DelhiHCJudgment, #LegalNews, #IPUpdate, #AdvocateAjayAmitabhSuman, #IPAdjutor

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Dabur vs Emami Trade Dress Dispute: Delhi High Court Upholds Injunction in Navratna Oil Passing Off Case

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Passing Off and Trade Dress Law in India: Analysis of Dabur India Ltd v Emami Ltd 2026

Can Common Packaging Elements Amount to Passing Off? Delhi High Court Explains in Dabur v Emami

Delhi HC Clarifies Principles of Passing Off and Trade Dress Similarity in Cooling Oil Market

Navratna Oil Trade Dress Protected: Detailed Analysis of Delhi High Court Judgment Against Dabur

House Mark Not Enough to Avoid Passing Off: Important Delhi High Court Ruling in Dabur v Emami

Trade Dress, Consumer Confusion and Passing Off: Delhi HC Judgment in Emami v Dabur Explained

House Mark Not Enough to Avoid Passing Off

Introduction:

The decision of the High Court of Delhi in Dabur India Limited v. Emami Limited is an important development in Indian trademark and trade dress jurisprudence, particularly in relation to passing off actions involving consumer products sold in mass retail markets. The dispute revolved around the alleged imitation of the trade dress and overall packaging of Emami’s well-known “Navratna Oil” product by Dabur’s “Cool King Thanda Tael”. The Division Bench was required to examine whether the overall appearance, packaging style, colour combination and arrangement of features used by Dabur created a deceptive similarity capable of confusing ordinary consumers.

The judgment is significant because the Court clarified that even where individual packaging elements are common to trade and incapable of exclusive monopoly, the overall combination and arrangement of those elements may still acquire distinctiveness and protection under the law of passing off. The Court also didnot give any benefit to the  House Mark and it held Not Enough to Avoid Passing Off.

Factual and Procedural Background

Emami Limited claimed that it had launched “Navratna Oil” in January 1989 and had continuously used the product’s distinctive red trade dress for several decades. Emami asserted that the product had become one of the most recognized cooling oils in India and that it possessed a market share of approximately 66% in the cooling oil segment as of 2022. The company relied upon several trademark registrations, copyright registrations and registered bottle designs under the Designs Act, 2000. Emami also relied upon extensive sales figures, advertising expenditure and long-standing goodwill associated with the product. 

According to Emami, Dabur launched its product “Cool King Thanda Tael” in 2023 using a deceptively similar trade dress containing similar red packaging, ice cubes, hibiscus flowers, ayurvedic herbs, similar colour combinations and Hindi expressions such as “Raahat”, “Aaram” and “Tarotaazgi” appearing in the same sequence. Emami alleged that Dabur had deliberately copied the essential features of the Navratna Oil packaging to ride upon the goodwill and reputation of the plaintiff’s product. 

The learned Single Judge of the Delhi High Court granted interim injunction against Dabur under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908 restraining the sale of the impugned product in the contested trade dress. The Single Judge held that the overall get-up and visual impression created by Dabur’s packaging amounted to passing off. Dabur challenged the injunction before the Division Bench through FAO(OS)(COMM) 23/2026. 

Dispute Before the Court

The central dispute before the Division Bench was whether Dabur’s packaging and trade dress for “Cool King Thanda Tael” was deceptively similar to Emami’s “Navratna Oil” so as to constitute passing off.

Dabur argued that no monopoly could be granted over common elements such as red colour packaging, herbs, hibiscus flowers, ice cubes and descriptive words like “cool”, “thanda” or “cool oil”. Dabur further argued that many third-party cooling oils in the market used similar packaging elements. It was also argued that Dabur prominently displayed its famous house mark “DABUR”, which was sufficient to distinguish the products and avoid consumer confusion. Dabur additionally contended that Emami had failed to establish distinctiveness and secondary meaning in the present packaging style, especially since the packaging had evolved over the years. 

Emami, on the other hand, argued that the issue was not about monopoly over individual elements but about the deceptive imitation of the overall arrangement and visual appearance of the product. Emami contended that Dabur’s adoption of multiple similar features in combination clearly demonstrated dishonest intention to imitate the established trade dress of Navratna Oil. Emami also emphasized its enormous sales turnover, extensive advertisements and long-standing market leadership in the cooling oil segment. 

Reasoning and Analysis of the Court

The Division Bench clarified that Emami had confined its case only to passing off and was not pressing claims relating to trademark infringement, copyright infringement, bottle design infringement or monopoly over the red colour itself. 

The Court observed that in passing off actions, the focus is on similarities in overall get-up and packaging which create deception and confusion in the minds of consumers. The Bench emphasized that the plaintiff must establish that its trade dress has acquired distinctiveness and that the defendant’s product is similar enough to deceive consumers despite differences in individual details. 

The Court accepted Emami’s evidence regarding substantial goodwill and reputation acquired through long use since 1989, extensive advertising and massive sales turnover. The Bench observed that Emami’s sales figures and market share were sufficient at the prima facie stage to establish goodwill in the cooling oil market. The Court also noted that Dabur had launched the impugned trade dress only in 2023 and had not explained the reason behind adopting such similar packaging features. 

The Court discussed several important judgments during the analysis. Reliance was placed on Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd. for the principle that deceptive similarity must be judged from the perspective of a consumer of average intelligence and imperfect recollection. The Court reiterated that side-by-side comparison is not necessary and that overall impression is the governing test. 

The Court also referred to Wander Ltd. v. Antox India P. Ltd. regarding appellate interference in interim injunction matters and held that appellate courts should not lightly interfere with discretionary orders unless the findings are perverse or contrary to law. The Court found no such perversity in the order of the learned Single Judge. 

Another important precedent discussed was Reckitt & Colman Products Ltd. v. Borden Inc. relating to the classical trinity test for passing off, namely goodwill, misrepresentation and likelihood of damage. The Court held that Emami had prima facie satisfied all three requirements. 

The Court further discussed Pernod Ricard India Private Limited v. Karanveer Singh Chhabra concerning acquired distinctiveness and secondary meaning. Dabur had relied upon this judgment to argue that Emami failed to produce consumer surveys and recognition studies. However, the Court distinguished the facts and held that at the interim stage, Emami had produced sufficient material demonstrating substantial goodwill and distinctiveness. 

A major aspect of the reasoning was the Court’s finding that although individual elements such as red colour, herbs or hibiscus flowers may be common to trade, the combination and arrangement of these features in Dabur’s packaging created an overall impression deceptively similar to Navratna Oil. The Court specifically noted similarities in colour scheme, bottle appearance, placement of flowers and herbs, yellow triangular “New” label, use of Hindi words and the overall visual presentation. 

The Court rejected Dabur’s argument that the presence of the house mark “DABUR” was enough to eliminate confusion. The Bench observed that low-cost consumer products are often purchased casually by ordinary consumers with imperfect recollection and limited attention to detail. Therefore, the overall packaging and visual impression become more important than the house mark itself. 

The Court also emphasized that passing off law protects the overall commercial impression of a product rather than isolated individual elements. It observed that the defendant appeared to have copied the essential features of Emami’s trade dress in a manner likely to confuse consumers and damage Emami’s goodwill. 

Final Decision of the Court

The Division Bench dismissed Dabur’s appeal and upheld the interim injunction granted by the learned Single Judge. The Court held that Emami had successfully established a prima facie case of passing off and deceptive similarity.and that House Mark Not Enough to Avoid Passing Off. The Bench concluded that Dabur’s trade dress was likely to cause confusion among ordinary consumers and appeared to be a deliberate attempt to imitate the essential features of Navratna Oil packaging. Accordingly, the restraint against Dabur from selling “Cool King Thanda Tael” in the impugned trade dress continued to remain operative.

Point of Law Settled in the Case

The judgment reinforces the principle that in passing off actions, courts must evaluate the overall commercial impression and visual appearance of competing products rather than dissecting individual packaging elements separately. Even where individual elements are common to trade, their unique combination and arrangement may acquire distinctiveness and legal protection.

The decision further clarifies that a well-known house mark alone may not always be sufficient to dispel confusion when the overall trade dress and packaging are deceptively similar. The Court also reaffirmed that consumer perception must be judged from the standpoint of an average consumer with imperfect recollection, particularly in relation to low-cost retail products purchased in ordinary market conditions.

Case Title: Dabur India Limited v. Emami Limited

Date of Judgment: 22 May 2026

Case Number: FAO(OS)(COMM) 23/2026

Neutral Citation: 2026:DHC:4576-DB

Court: High Court of Delhi

Hon’ble Judges: Justice V. Kameswar Rao and Justice Manmeet Pritam Singh Arora

Disclaimer: Readers are advised not to treat this as substitute for legal advise 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

Headnote

The Delhi High Court upheld an interim injunction against Dabur in a passing off dispute concerning “Cool King Thanda Tael” and Emami’s “Navratna Oil”, holding that although no monopoly exists over individual common packaging elements, the deceptive imitation of the overall trade dress, visual arrangement and commercial impression of a well-known product is actionable under passing off law. The Court further held that the use of a well-known house mark is not always sufficient to avoid consumer confusion where the overall packaging creates deceptive similarity.

Trade Dress Law, Passing Off, Dabur vs Emami, Navratna Oil Case, Delhi High Court Judgment, Trademark Dispute, Cooling Oil Trade Dress, Consumer Confusion, Intellectual Property Law, Brand Protection, Trade Dress Infringement, Passing Off Action, Commercial IP Litigation, Indian Trademark Law, Deceptive Similarity, House Mark Defence, Interim Injunction, Cadila Healthcare Principle, Trade Dress Protection India, Packaging Similarity Dispute, AdvocateAjayAmitabhSuman, IPAdjutor

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Lachman Dass Bhatia Vs. Assistant Commissioner of Income Tax

In Delhi High Court, the Full Bench in Lachman Dass Bhatia Vs. Assistant Commissioner of Income Tax, ITA Nos. 724/2010 to 729/2010 and connected matters, decided on 06 August 2010, clarified the maintainability of appeals against orders passed by the Income Tax Appellate Tribunal under Section 254(2) of the Income Tax Act, 1961. The dispute arose over whether every rectification or recall order passed by the Tribunal could be challenged before the High Court under Section 260A. The Revenue argued that only appellate orders deciding substantial questions of law were appealable, while the assessee contended that parties should not be left without remedy against rectification orders. 

The Full Bench examined decisions of various High Courts including Bombay, Calcutta, Madras, Rajasthan and Karnataka High Courts and interpreted Sections 254(1), 254(2) and 260A of the Income Tax Act. The Court held that where the Tribunal merely amends or rectifies an appellate order, such amended order remains appealable under Section 260A. However, an order rejecting a rectification application or recalling the entire appellate order does not amount to a final adjudication and therefore is not appealable under Section 260A. The Court further observed that in such cases aggrieved parties may invoke writ jurisdiction under Articles 226 and 227 of the Constitution of India. 

The Court accordingly answered the legal reference by holding that recall orders under Section 254(2) are not appealable under Section 260A, whereas amended rectification orders can be challenged before the High Court on substantial questions of law. The judgment has become an important precedent on the distinction between rectification, amendment and recall powers of the Income Tax Appellate Tribunal. 

Case Title: Lachman Dass Bhatia v. Assistant Commissioner of Income Tax

Date of Judgment: 06 August 2010

Case Number: ITA Nos. 724/2010 to 729/2010 and connected matters

Neutral Citation: [2010] 328 ITR 243 (Delhi)

Court: Delhi High Court

High Court: Delhi High Court

Disclaimer: Donot treat this as substitute for legal advise as it may contain subjective errors.

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

#DelhiHighCourt, #IncomeTaxAct, #Section254, #Section260A, #ITAT, #TaxAppeal, #RectificationOrder, #TaxLitigation, #IncomeTaxCase, #WritJurisdiction, #TaxLawIndia, #AppealMaintainability, #IncomeTaxAppellateTribunal, #LegalNewsIndia, #DirectTaxLaw, #Articles226227, #TaxJudgment, #IndianTaxLaw, #LitigationUpdate, #IPUpdate, #AdvocateAjayAmitabhSuman, #IPAdjutor

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1. Delhi High Court Clarifies Appealability of ITAT Rectification Orders Under Section 260A
2. Lachman Dass Bhatia v ACIT: Delhi High Court on Section 254(2) and Section 260A of Income Tax Act
3. Can ITAT Recall Orders Be Appealed? Important Delhi High Court Judgment Explained
4. Delhi High Court Explains Scope of Rectification Powers of ITAT Under Income Tax Act
5. Maintainability of Appeals Against ITAT Rectification Orders: Detailed Legal Analysis
6. Section 254(2) vs Section 260A: Delhi High Court Resolves Tax Appeal Controversy
7. Important Tax Litigation Judgment on ITAT Recall and Rectification Jurisdiction
8. Delhi High Court on Appeal Rights Against ITAT Orders Under Income Tax Act, 1961
9. Lachman Dass Bhatia Case: Difference Between Recall and Amendment of ITAT Orders
10. Delhi High Court Judgment on Tax Appeals, Rectification and Writ Jurisdiction

Detailed Analytical Article

Introduction

The judgment delivered by Delhi High Court in Lachman Dass Bhatia v. Assistant Commissioner of Income Tax, decided on 06 August 2010, is an important decision concerning the scope of appellate remedies available against orders passed by the Income Tax Appellate Tribunal under Section 254(2) of the Income Tax Act, 1961. The judgment resolved an important legal controversy regarding whether an appeal under Section 260A of the Income Tax Act could be maintained against orders passed by the Tribunal while exercising rectification powers under Section 254(2). The Full Bench judgment authored by Chief Justice Dipak Misra examined conflicting views taken by different High Courts across India and clarified the distinction between an order amending an appellate order and an order recalling the entire appellate order.

The Court dealt with the practical consequences of rectification proceedings before the Income Tax Appellate Tribunal and examined the nature of “appealable orders” under the Income Tax Act. The judgment is important because it clarifies when parties can approach the High Court through a statutory appeal and when they must instead invoke writ jurisdiction under Articles 226 and 227 of the Constitution of India.

Factual and Procedural Background

The matter arose from a batch of income tax appeals filed before the Delhi High Court, including ITA Nos. 724/2010 to 729/2010 and connected matters. During hearing before the Division Bench, the Revenue raised a preliminary objection regarding maintainability of the appeals under Section 260A of the Income Tax Act. The objection related to whether an order passed by the Income Tax Appellate Tribunal under Section 254(2) could be challenged through a statutory appeal before the High Court.

Section 254(1) empowers the Tribunal to pass orders in appeals after hearing parties. Section 254(2) allows the Tribunal to rectify mistakes apparent from the record. Section 260A provides a right of appeal to the High Court against orders passed in appeal by the Appellate Tribunal if the case involves a substantial question of law. The controversy arose because different High Courts had interpreted these provisions differently. Some courts held that all orders under Section 254(2) were appealable, while others held that only certain kinds of rectification orders could be appealed.

The Revenue relied upon decisions such as Visvas Promoters (P) Ltd. v. Income Tax Appellate Tribunal, (2009) 226 CTR 638 (Madras), Chem Amit v. Assistant Commissioner of Income Tax, (2005) 272 ITR 397 (Bombay), and Shaw Wallace & Co. Ltd. v. ITAT, [1999] 240 ITR 579 (Calcutta), to argue that appeals under Section 260A were not maintainable against orders merely rejecting rectification applications or recalling original orders.

On the other hand, the assessee relied upon judgments including L. Sohanraj v. Deputy Commissioner of Income Tax, [2003] 260 ITR 147 (Karnataka), Deputy Commissioner of Income Tax v. H.V. Shantharam, [2003] 260 ITR 156 (Karnataka), and Jagdish Chandra and Sons v. ITAT, [2005] 266 ITR 165 (Allahabad), contending that such appeals were maintainable.

Because of conflicting judicial opinions and the recurring nature of the issue, the Division Bench referred the matter to a larger Bench for authoritative determination.

Dispute Before the Court

The principal issue before the Court was whether all orders passed under Section 254(2) of the Income Tax Act are appealable under Section 260A. The dispute specifically focused upon three different situations. The first situation involved rejection of a rectification application under Section 254(2). The second situation involved amendment or correction of the original appellate order. The third situation involved complete recall of the earlier appellate order passed by the Tribunal.

The Revenue argued that Section 260A permits appeals only against “orders passed in appeal” by the Tribunal. According to the Revenue, an order passed under Section 254(2) merely exercising rectification jurisdiction was not an appellate order and therefore could not automatically become appealable. It was further argued that recall of an order effectively wipes out the original appellate order and therefore there remains no operative appellate order against which an appeal could lie.

The assessee argued that Section 260A should receive liberal interpretation and that parties should not be left without remedy merely because the Tribunal exercised rectification powers. The assessee also argued that the legislative intent behind introduction of Section 260A supported maintainability of appeals against Tribunal orders affecting substantive rights.

Reasoning and Analysis of the Court

The Full Bench carefully examined the language of Sections 254 and 260A of the Income Tax Act. The Court observed that Section 260A uses the expression “every order passed in appeal by the Appellate Tribunal.” The Court emphasized that the expression must be understood in the context of appellate adjudication and not every procedural or rectification order.

The Bench analyzed several judgments from different High Courts. The Court extensively discussed the Bombay High Court decision in Chem Amit v. Assistant Commissioner of Income Tax, (2005) 272 ITR 397 (Bom). In that case, the Bombay High Court had distinguished the Supreme Court judgment in CIT v. Durga Engineering and Foundry Works, (2000) 162 CTR (SC) 257. The Bombay High Court had held that the language of Section 260A differed materially from Section 256 because Section 260A permits appeal only against orders passed in appeal, whereas Section 256 used broader language referring to orders passed under Section 254 generally.

The Delhi High Court approved this reasoning and observed that if a rectification order merely rejects an application, it does not independently decide substantive rights because the substantive controversy already stands decided in the original appellate order. Therefore, such rejection orders cannot independently become appealable under Section 260A.

The Court also discussed Shaw Wallace & Co. Ltd. v. ITAT, [1999] 240 ITR 579 (Calcutta), where the Calcutta High Court had held that when an order under Section 254(2) modifies or rectifies the main appellate order, both orders together may become appealable. However, a pure recall order which wipes out the original appellate order cannot itself be treated as an appellate adjudication.

The Bench further examined the Rajasthan High Court judgment in Apex Metchem (P) Ltd. v. ITAT, 318 ITR 48 (Raj), which held that amendment orders merge with the original appellate order and therefore remain appealable, whereas recall orders do not finally adjudicate rights and therefore are not appealable.

The Court also relied upon the Delhi High Court judgment in Karan & Co. v. ITAT, [2002] 253 ITR 131 (Delhi), where it was held that Section 254(2) only permits rectification of mistakes apparent from record and does not ordinarily confer broad powers of rehearing or recall. The Court noted that recalling an entire order would effectively amount to fresh adjudication and exceed the limited rectification jurisdiction contemplated by Section 254(2).

The Bench then referred to general principles governing appealability and decrees. It cited Parmeshwar Lal v. Gokhula Nandan Prasad, AIR 1984 Patna 344, and Dinamani Debi v. Paramananda Choudhury, AIR 1980 Orissa 177, to explain that appealability generally depends upon final adjudication of rights. Where no final adjudication exists, no statutory appeal ordinarily lies.

The Court concluded that when the Tribunal completely recalls its earlier order under Section 254(2), there remains no final appellate adjudication because the matter is reopened for fresh hearing. In such circumstances, an appeal under Section 260A is not maintainable.

However, the Court clarified that where the Tribunal merely amends or rectifies the original appellate order without recalling it entirely, the amended order merges with the original appellate order and therefore becomes appealable under Section 260A.

The Bench also addressed the concern that parties would otherwise be left remediless. The Court held that where statutory appeal is unavailable, parties may invoke writ jurisdiction under Articles 226 and 227 of the Constitution. The Court relied upon Col. Anil Kak (Retd.) v. Municipal Corporation, Indore, AIR 2007 SC 1130, and Nawab Shaqafath Ali Khan v. Nawab Imad Jah Bahadur, 2009 AIR SCW 2289, to hold that proceedings could even be converted from appeal to writ petition where circumstances justify such conversion.

Final Decision of the Court

The Full Bench answered the reference by laying down three clear legal principles. First, an order passed under Section 254(2) recalling the Tribunal’s earlier order in entirety is not appealable under Section 260A. Second, an order rejecting a rectification application under Section 254(2) is also not appealable. Third, where the Tribunal merely amends or rectifies its appellate order under Section 254(2), the amended order can be challenged through an appeal under Section 260A on substantial questions of law.

The Court further held that where statutory appeal is unavailable, the aggrieved party may seek remedy under Articles 226 and 227 of the Constitution of India. The appeals were directed to be placed before the Division Bench for further proceedings in accordance with law.

Point of Law Settled in the Case

The judgment settled the legal position that every order passed under Section 254(2) of the Income Tax Act is not automatically appealable under Section 260A. Only those rectification orders which amend or modify the original appellate order are appealable because they continue to remain part of the appellate adjudication. Orders merely rejecting rectification applications or completely recalling original orders do not amount to final appellate adjudications and therefore are not appealable under Section 260A. In such situations, constitutional remedies under Articles 226 and 227 remain available.

Case Details

Case Title: Lachman Dass Bhatia v. Assistant Commissioner of Income Tax

Date of Judgment: 06 August 2010

Case Numbers: ITA Nos. 724/2010 to 729/2010 and connected matters

Neutral Citation: [2010] 328 ITR 243 (Delhi)

Court: Delhi High Court

Hon’ble Judges: Chief Justice Dipak Misra, Justice Sanjiv Khanna and Justice Manmohan

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Headnote

The Delhi High Court in Lachman Dass Bhatia v. Assistant Commissioner of Income Tax clarified the scope of appeals under Section 260A of the Income Tax Act against orders passed under Section 254(2) by the Income Tax Appellate Tribunal. The Court held that orders merely rejecting rectification applications or recalling appellate orders entirely are not appealable under Section 260A because they do not constitute final appellate adjudications. However, where the Tribunal amends or rectifies its earlier appellate order, such amended order remains appealable on substantial questions of law. The Court further clarified that writ remedies under Articles 226 and 227 of the Constitution remain available where statutory appeals are barred.

Disclaimer: Readers are advised not to treat this as substitute for legal advise 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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Mr. Ilaiyaraaja Vs Saregama India Limited,

Mr. Ilaiyaraaja Vs Saregama India Limited,:21.05.2026:FAO(OS) (COMM) 52/2025: 2026:DHC:4556-DB, Justice C. Hari Shankar and Justice Om Prakash Shukla

The dispute arose over the recreation and adaptation of the iconic song “En Iniya Pon Nilave” from the film Moodu Pani for use in the upcoming film Aghathiyaa. Saregama India Limited claimed ownership over the sound recording and underlying literary and musical works by virtue of a 1980 assignment agreement executed with the producer of the original film, while renowned composer Ilaiyaraaja asserted his independent copyright in the musical composition and his right to authorize adaptations under the Copyright Act, 1957.

The Court examined the interplay between Sections 13, 14 and 17 of the Copyright Act and held that while the producer and Saregama retained copyright in the sound recording and lyrics of the original song, Ilaiyaraaja continued to hold independent copyright in the musical composition as its composer. 

The Bench clarified that Section 13(4) protects the separate copyright of the composer even after incorporation of the work into a cinematograph film. However, the Court also observed that Ilaiyaraaja could not assign rights in the lyrics or original sound recording, since those rights did not vest in him.

Accordingly, the Court partly recognized the composer’s adaptation rights but held that the agreement relied upon by the film producers extended beyond the rights legally available to him. The appeal was dismissed.

Disclaimer: Donot treat this as substitute for legal advise as it may contain subjective errors.

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

#DelhiHighCourt, #Ilaiyaraaja, #Saregama, #CopyrightLaw, #MusicCopyright, #EntertainmentLaw, #IPRIndia, #CopyrightAct1957, #SoundRecordingRights, #MusicalWork, #ComposerRights, #FilmMusicDispute, #IndianCopyrightLaw, #LegalNews, #IPLitigation, #AdaptationRights, #CopyrightInfringement, #MediaAndEntertainmentLaw, #IntellectualProperty, #TrademarkAndPatentAttorney, #IPUpdate, #AdvocateAjayAmitabhSuman, #IPAdjutor

Para 29.6:Right of music composer remains in the music composition and not in the sound recording or lyrics

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4. Copyright in Film Songs: Delhi High Court Distinguishes Musical Work from Sound Recording

5. Ilaiyaraaja Copyright Dispute Explained: Rights of Composers Under the Copyright Act, 1957

6. Delhi High Court Rules on Adaptation Rights of Music Composers in Cinematograph Films

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8. Section 13(4) and Composer Rights: Important Delhi High Court Copyright Judgment

9. Delhi High Court Interprets Sections 13, 14 and 17 of Copyright Act in Ilaiyaraaja Case

10. Legal Analysis of Ilaiyaraaja v Saregama India Ltd on Music Copyright and Adaptation Rights

Detailed Analytical Article

Distinction between ownership of musical works and ownership of sound recordings in cinematograph films

Introduction

The decision delivered by the Division Bench of Delhi High Court in Mr. Ilaiyaraaja v. Saregama India Limited, FAO(OS) (COMM) 52/2025, decided on 21 May 2026, is an important judgment concerning copyright ownership in film music under the Copyright Act, 1957. The judgment examines the distinction between copyright in a musical composition, copyright in lyrics, and copyright in sound recordings forming part of a cinematograph film. The Court was required to determine whether celebrated composer Ilaiyaraaja retained independent rights over the musical composition of the famous Tamil song “En Iniya Pon Nilave” after the song had already become part of the cinematograph film Moodu Pani. The judgment also discusses whether the composer could lawfully authorize adaptation and recreation of the song for use in another film despite rights previously assigned to Saregama India Limited.

The ruling is significant because it carefully balances the rights of music composers with the rights of producers and owners of sound recordings. The Court explained the scope of Sections 13, 14 and 17 of the Copyright Act and clarified that incorporation of a musical work into a cinematograph film does not completely extinguish the composer’s separate copyright in the musical work itself. At the same time, the Court clarified that rights over sound recordings and lyrics may belong to different copyright owners and cannot automatically be claimed by the composer.

Factual and Procedural Background

The dispute related to the well-known Tamil song “En Iniya Pon Nilave” from the cinematograph film Moodu Pani. The musical composition of the song was created by Ilaiyaraaja, while the sound recording formed part of the film soundtrack produced by Raja Cine Arts (RCA). In 1980, RCA entered into an agreement with Gramophone Company of India Limited, later renamed Saregama India Limited, assigning rights relating to the sound recordings of the film. Under the agreement dated 25 February 1980, the producer transferred gramophone recording rights and related copyright interests to the music company for valuable consideration and royalty payments. 

Years later, Ilaiyaraaja entered into an agreement dated 17 March 2023 with Vels Film International Limited (VFIL) for recreation and adaptation of the song in another cinematograph film titled Aghathiyaa. Under this agreement, Ilaiyaraaja represented himself as owner of the sound recording and underlying works and granted rights to recreate and adapt the original song. The agreement permitted VFIL to use the recreated work in multiple formats and languages. 

Saregama challenged this arrangement and filed proceedings alleging infringement of its copyright. According to Saregama, the copyright in the sound recording and associated rights had already vested in it through the 1980 assignment agreement executed with the producer RCA. Saregama contended that Ilaiyaraaja had no authority to authorize recreation or adaptation of the song in a manner that interfered with Saregama’s rights.

The learned Single Judge had accepted substantial portions of Saregama’s arguments and held against Ilaiyaraaja. Aggrieved by the findings, Ilaiyaraaja preferred an appeal before the Division Bench of the Delhi High Court.

Dispute Before the Court

The central issue before the Court concerned the location and extent of copyright ownership in the disputed song. The Court was required to determine whether Ilaiyaraaja, as composer of the musical work, continued to enjoy independent copyright protection over the musical composition despite the incorporation of the song into a cinematograph film and assignment of sound recording rights to Saregama.

Ilaiyaraaja argued that the disputed song constituted a “musical work” under Section 2(p) of the Copyright Act and that, as composer, he was the “author” under Section 2(d)(ii). Therefore, under Section 17, he remained the first owner of copyright in the musical work. He further argued that Section 13(4) protected the separate copyright existing in underlying works even after incorporation into a cinematograph film or sound recording. He also relied upon Section 14(a)(vi), which grants the owner of copyright in a musical work the exclusive right to make adaptations of that work. 

On the other hand, Saregama argued that the producer of the cinematograph film was the first owner of copyright in the film and the accompanying sound recordings. Since RCA had assigned those rights to Saregama through the 1980 agreement, Saregama became owner of the sound recording rights in the disputed song. It was further argued that Ilaiyaraaja’s rights stood exhausted once the composition became part of the cinematograph film soundtrack. Saregama also relied upon the Supreme Court judgment in Indian Performing Right Society Ltd. v. Eastern India Motion Pictures Association, (1977) 2 SCC 820, to contend that producers of cinematograph films possess overriding rights in relation to songs forming part of film soundtracks. 

Reasoning and Analysis of the Court

The Division Bench undertook a detailed interpretation of the Copyright Act, 1957. The Court first examined the definition of “musical work” under Section 2(p), which defines musical work as a work consisting of music but excluding lyrics. The Court observed that the musical composition created by Ilaiyaraaja clearly fell within this definition and therefore enjoyed copyright protection independently. 

The Court then examined Section 17, which provides that the author of a work is the first owner of copyright unless otherwise provided. Since Section 2(d)(ii) defines the composer as the author of a musical work, Ilaiyaraaja was held to be the first owner of copyright in the musical composition of the song. The Court specifically rejected the argument that clauses (b) and (c) of the proviso to Section 17 automatically divested him of his rights. According to the Court, clause (b) did not apply to musical works or sound recordings in the manner argued by Saregama, and clause (c) relating to employment contracts was inapplicable because there was no master-servant relationship between RCA and Ilaiyaraaja. 

The Court further examined Section 14(a)(vi), which grants the owner of copyright in a musical work the exclusive right to make adaptations. The Bench held that Ilaiyaraaja therefore retained the right to adapt the musical composition and authorize its use by third parties. However, the Court carefully limited this right only to the musical component of the song. The composer did not possess copyright over the lyrics or the original sound recording. 

One of the most important discussions in the judgment related to Section 13(4) of the Copyright Act. The Court emphasized that copyright in a cinematograph film or sound recording does not affect the separate copyright existing in any underlying work. Therefore, although Saregama validly owned copyright in the sound recording by virtue of the 1980 agreement, that ownership could not extinguish Ilaiyaraaja’s independent copyright in the musical composition. 

The Court then examined the 2023 agreement executed between Ilaiyaraaja and VFIL. It observed that the agreement went beyond the rights actually possessed by Ilaiyaraaja because it purported to assign rights over the sound recording and underlying works generally. The Court held that Ilaiyaraaja was not the owner of the sound recording or lyrics and therefore could not validly assign those rights. His rights extended only to the musical composition. 

The Court also distinguished the Supreme Court judgment in Indian Performing Right Society Ltd. v. Eastern India Motion Pictures Association, (1977) 2 SCC 820. The Division Bench clarified that the earlier judgment did not completely destroy the separate rights of composers protected under Section 13(4). The Court interpreted the Copyright Act harmoniously to ensure coexistence of rights between composers, lyricists, producers and sound recording owners.

Final Decision of the Court

The Division Bench dismissed the appeal and clarified the legal position regarding ownership of musical works in cinematograph films. The Court held that Ilaiyaraaja retained copyright in the musical composition of the disputed song and consequently possessed adaptation rights in relation to that musical work. However, he did not own the copyright in the lyrics or original sound recording of the song. Saregama continued to remain owner of the sound recording rights through the 1980 assignment agreement executed by the producer RCA.

Accordingly, while Ilaiyaraaja could lawfully exploit and adapt the musical composition, he could not authorize use or assignment of rights in the sound recording or lyrics which legally belonged to others. The Court therefore drew a clear distinction between ownership of musical works and ownership of sound recordings in cinematograph films.

Point of Law Settled in the Case

The judgment settles an important principle of Indian copyright law that incorporation of a musical composition into a cinematograph film does not extinguish the composer’s independent copyright in the musical work unless such rights are specifically assigned in accordance with law. Section 13(4) preserves the separate copyright in underlying works even when the work forms part of a sound recording or cinematograph film. The decision also clarifies that composers, lyricists, producers and sound recording owners may simultaneously hold different and distinct copyrights in relation to the same song. However, each copyright owner can only exploit rights that legally vest in them and cannot assign rights beyond the scope of their ownership.

Case Title: Mr. Ilaiyaraaja v. Saregama India Limited

Date of Judgment: 21 May 2026

Case Number: FAO(OS) (COMM) 52/2025

Neutral Citation: 2026:DHC:4556-DB

Court: Delhi High Court

Hon’ble Judges: Justice C. Hari Shankar and Justice Om Prakash Shukla

Disclaimer: Readers are advised not to treat this as substitute for legal advise 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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Headnote

The Delhi High Court in Mr. Ilaiyaraaja v. Saregama India Limited held that a composer retains independent copyright in the musical composition of a song even after the song becomes part of a cinematograph film. The Court clarified that Section 13(4) of the Copyright Act preserves separate copyright in underlying musical works despite ownership of sound recording rights by film producers or assignees. While the composer possesses adaptation rights in relation to the musical work, rights in lyrics and sound recordings remain distinct and cannot be assigned by the composer unless vested in him. The judgment harmonizes the rights of composers, producers and sound recording owners under Sections 13, 14 and 17 of the Copyright Act, 1957.

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IndiaMart Inter Mesh Limited Vs. Open AI Inc.

Indiamart Inter Mesh Limited Vs Open AI Inc:.20.05.2026: IP-COM/57/2025:CalHC, Hon'ble Justice Ravi Krishan Kapur.

Court dismissed an interim injunction application filed by IndiaMart against OpenAI concerning alleged discriminatory treatment by ChatGPT Search. 

The Court examined whether ChatGPT’s refusal to provide active IndiaMart links in response to user queries amounted to trademark dilution, disparagement, unfair trade practice, copyright infringement and violation of the Information Technology Act, 2000. 

IndiaMart contended that ChatGPT deliberately bypassed its platform and directly displayed sellers’ websites, thereby causing diversion of traffic and economic loss, allegedly relying upon the USTR Notorious Markets List 2024 to exclude IndiaMart.

OpenAI argued that there exists no enforceable “right to visibility” on a private AI platform and that ChatGPT’s internal policies and output generation mechanisms could not be judicially controlled at the interim stage.

The Court held that no statutory, contractual or constitutional obligation existed requiring ChatGPT to display IndiaMart links in a particular manner and observed that pure economic loss without infringement of a vested legal right is not actionable. 

Court further made significant observations on generative AI jurisprudence, prima facie holding that ChatGPT appears to function more as an “originator” than a mere “intermediary” under the IT Act because of its generative and synthesized outputs, while clarifying that the issue requires final adjudication after expert evidence. 

The Court found no prima facie case of trademark infringement, disparagement, trade libel or copyright infringement and held that compelling ChatGPT to display IndiaMart links would amount to forcing a private entity to conduct business in a particular manner. Accordingly, the interim application was dismissed while directing expeditious hearing of the suit.

Disclaimer: Donot treat this as substitute for legal advise as it may contain subjective errors.

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

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Para 11:No third party can compel a service provider to use its services in a manner benefiting another entity

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IndiaMart Inter Mesh Limited v. Open AI Inc. and Ors.: A Landmark Judicial Examination of Generative AI, ChatGPT and Intermediary Liability in India

Can ChatGPT Be Forced to Display Website Links?

Introduction

The decision delivered by the Calcutta High Court in Indiamart Inter Mesh Limited Vs Open AI Inc. and Ors. marks one of the earliest detailed judicial discussions in India concerning the legal character of generative artificial intelligence platforms such as ChatGPT. The judgment goes beyond a traditional intellectual property dispute and enters the evolving area of AI governance, intermediary liability, platform autonomy, economic rights on digital platforms, and the applicability of the Information Technology Act, 2000 to modern generative AI systems.

The case arose from allegations by IndiaMart that ChatGPT Search deliberately avoided displaying IndiaMart links while showing direct seller websites or competing platforms in response to user prompts. The dispute therefore raised larger questions concerning whether a private AI platform can be compelled to display or promote another business platform in a particular manner and whether generative AI systems should legally be treated as “intermediaries” or “originators” under Indian law.

The judgment is significant because the Court extensively discussed the architecture and functioning of Large Language Models (LLMs), the distinction between traditional search engines and generative AI systems, and the inadequacy of existing Indian technology law frameworks to deal with modern AI tools. Though the dispute was decided at an interim stage, the observations made by the Court are likely to influence future litigation involving artificial intelligence, digital platforms, algorithmic visibility, and AI-generated outputs in India.

Factual and Procedural Background

The petitioner, IndiaMart Inter Mesh Limited, operates one of India’s largest B2B online marketplace platforms. Since 1996, the platform has provided online business listings connecting suppliers and buyers across diverse product categories. The petitioner owns several registered trademarks associated with “IndiaMart” and claimed that a substantial part of its business depends on online visibility through internet searches and digital referrals.

The respondents included OpenAI Inc. and related entities associated with the operation of ChatGPT. The Court recorded that ChatGPT is a conversational AI platform powered through Large Language Models and capable of generating synthesized responses by processing enormous volumes of internet data.

The dispute specifically concerned “ChatGPT Search,” introduced broadly around October 2024. According to the petitioner, when users searched for products or suppliers on ChatGPT, the AI system allegedly bypassed IndiaMart links and directly displayed seller websites, whereas competing platforms allegedly received visible platform links. IndiaMart argued that this amounted to selective exclusion and discrimination against its platform.

The petitioner further alleged that OpenAI was relying upon the United States Trade Representative Review of Notorious Markets List 2024 (USTR List), where IndiaMart’s name appeared, to justify restricting visibility of IndiaMart links. IndiaMart contended that the USTR List had no binding legal force in India and that reliance upon such a foreign document was arbitrary and discriminatory.

An interim application seeking relief was filed before the Intellectual Property Rights Division of the Calcutta High Court. IndiaMart sought directions requiring ChatGPT to display accessible IndiaMart links in its responses and alleged infringement of intellectual property rights, dilution of trademark, disparagement, unfair trade practices, violation of the Information Technology Act, 2000, and violation of Articles 14, 19 and 21 of the Constitution of India.

The Dispute Before the Court

The primary issue before the Court was whether IndiaMart possessed any enforceable legal right requiring ChatGPT to display its platform links in a specific manner.

IndiaMart argued that ChatGPT was intentionally excluding the IndiaMart platform despite displaying links of competing platforms. According to the petitioner, such omission interfered with prospective business opportunities, diverted user traffic, and diluted the commercial value of its trademarks.

The petitioner relied upon Section 2(1)(w) and Section 79 of the Information Technology Act, 2000 along with Rule 3(1)(n) of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021. IndiaMart contended that ChatGPT functions as an intermediary and therefore cannot discriminate between platforms while disseminating search-related information.

The petitioner further argued that internet users possess a right to access information concerning IndiaMart and that deliberate exclusion of IndiaMart links violated constitutional guarantees under Articles 14, 19 and 21 of the Constitution.

To support its arguments, the petitioner relied upon judgments including Neptune Assurance Co. Ltd. vs. Union of India, (1973) 1 SCC 310, Press Trust of India vs. Union of India, AIR 1974 SC 1044, and Neetu Singh & Anr. v. Telegram FZ LLC & Ors., 2022 SCC OnLine Del 2637.

OpenAI, on the other hand, argued that IndiaMart had no “right to visibility” on a private platform. It was contended that no contract, statute, or constitutional provision obligated ChatGPT to display IndiaMart links. OpenAI argued that forcing such visibility would interfere with private business autonomy and disrupt the functioning of generative AI systems.

The respondents also denied that ChatGPT was a conventional search engine or intermediary. They argued that ChatGPT functions more like an “originator” under Section 2(1)(za) of the IT Act because it generates independent synthesized responses rather than merely hosting or transmitting third-party content.

The respondents relied upon several precedents including Google LLC v. DRS Logistics (P) Ltd., 2023 SCC OnLine Del 4809, Tech Plus Media Private Limited v. Jyoti Janda, 2014 SCC OnLine Del 1819, Jasbhai Motibhai Desai v. Roshan Kumar, (1976) 1 SCC 671, and Rohit Pulp and Paper Mills Ltd. v. Collector of Central Excise, (1990) 3 SCC 447.

Reasoning and Analysis of the Court:

The Court observed that no law compels a private business to operate according to terms dictated by another business entity. The Court emphasized principles of free market autonomy and noted that compelling a platform to display another business in a particular manner would seriously interfere with commercial freedom.

The Court referred to the common law principle discussed by Lord Diplock in Home Office vs. Dorset Yacht Co. Ltd., [1970] 2 All ER 294, observing that common law generally does not impose liability for “pure omissions” unless there exists a statutory, contractual, or constitutional duty.

According to the Court, the injury complained of by IndiaMart was essentially “pure economic loss,” namely loss of user traffic and potential profit. The Court held that such economic loss alone does not create a legal cause of action unless some enforceable legal right has been infringed.

A major part of the judgment focused upon whether ChatGPT can legally be considered an “intermediary” under Section 2(1)(w) of the IT Act or an “originator” under Section 2(1)(za).

The Court analyzed the functioning of traditional search engines and contrasted them with generative AI systems. Justice Kapur explained that traditional search engines merely crawl and rank existing internet data. In contrast, Large Language Models synthesize information, generate new responses, and create content dynamically. ChatGPT was described as a system capable of independently generating poems, research material, code, drawings and textual outputs.

The Court observed that such functions go far beyond passive hosting or transmission of third-party content. Therefore, prima facie, ChatGPT possesses characteristics of an “originator” because it creates and generates electronic records rather than merely transmitting them.

The Court observed:“ChatGPT has an element of newness, uniqueness and originality in its results which ought to bring it within the definition of an ‘originator’ rather than an ‘intermediary’.”

However, the Court clarified that this issue is legally complex and would ultimately require final adjudication based upon technical and expert evidence during trial.

The judgment also contains important policy observations concerning AI regulation in India. Justice Kapur recognized that the Information Technology Act, 2000 was enacted long before the emergence of generative AI technologies and therefore does not adequately address modern AI systems. The Court noted that legislative intervention would eventually become necessary to define liabilities and responsibilities relating to AI platforms.

The Court further referred to Google LLC v. DRS Logistics (P) Ltd., 2023 SCC OnLine Del 4809, where the Delhi High Court observed that no third party can compel a service provider to use its services in a manner benefiting another entity. This precedent significantly influenced the Court’s conclusion.

Regarding trademark dilution and disparagement, the Court held that no actionable case had been made out because there was no deceptive publication, false representation, confusion, or trade use of IndiaMart’s mark. Mere non-display or silence could not constitute disparagement or trademark dilution.

The Court also relied upon Berger Paints India Ltd. v. JSW Paints Pvt. Ltd., 2023 SCC OnLine Cal 4949, observing that trademark dilution under Section 29(4) of the Trade Marks Act, 1999 requires use “in the course of trade,” which was absent in the present case.

On copyright claims, the Court found that IndiaMart failed to identify any specific copyrighted work allegedly infringed by ChatGPT. Reliance was placed upon Tech Plus Media Private Ltd. v. Jyoti Janda, 2014 SCC OnLine Del 1819.

The Court also rejected the argument that reliance upon the USTR List itself created a legal wrong. According to the Court, OpenAI’s decision to rely upon such reports formed part of its internal policy and business decision-making process, which was not ordinarily justiciable.

Another important aspect discussed by the Court concerned the risk of opening “floodgates of litigation.” The Court cited the famous observation of Cardozo CJ in Ultramares Corp. v. Touche, (1931) 255 NY 170, warning against “liability in an indeterminate amount for an indeterminate time to an indeterminate class.”

The Court ultimately concluded that granting interim relief would effectively amount to compelling specific performance requiring continuous judicial supervision over AI outputs and platform functioning.

Final Decision of the Court

The Calcutta High Court dismissed the interim application filed by IndiaMart and refused to direct ChatGPT to display IndiaMart links in a particular manner. The Court held that IndiaMart failed to establish a prima facie case, balance of convenience, or irreparable injury necessary for grant of interim injunction.

The Court clarified that no vested legal right had been shown by the petitioner requiring enforcement against OpenAI or ChatGPT. The suit itself, however, remains pending for final adjudication, and the parties were directed to take steps for expeditious hearing.

Point of Law Settled in the Case

The judgment lays down several important legal principles relating to generative AI and platform liability in India.

The Court prima facie recognized that generative AI systems like ChatGPT may not neatly fit within the conventional definition of “intermediary” under the Information Technology Act, 2000 and may instead function as “originators” because of their ability to generate synthesized and original outputs.

The judgment also establishes that no private business possesses an automatic legal right to algorithmic visibility or preferential display on another private digital platform unless supported by a specific legal, statutory, or contractual right.

Further, the decision reinforces the principle that pure economic loss and loss of internet traffic, without infringement of a substantive legal right, are insufficient to sustain claims of trademark dilution, disparagement, or unfair trade practices.

The judgment is likely to become an important precedent in future Indian litigation involving artificial intelligence, algorithmic governance, digital platform autonomy, intermediary liability, and AI regulation.

Case: IndiaMart Inter Mesh Limited Vs. Open AI Inc. and Ors.

Date of Judgment: 20 May 2026

Case Number: IP-COM/57/2025

Court: Intellectual Property Rights Division, Original Side

Name of High Court: Calcutta High Court

Coram: Hon’ble Justice Ravi Krishan Kapur

Disclaimer: Readers are advised not to treat this as substitute for legal advise 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

Headnote

The Calcutta High Court in IndiaMart Inter Mesh Limited v. Open AI Inc. and Ors. refused interim relief against ChatGPT concerning alleged exclusion of IndiaMart links from AI-generated responses. The Court held that no entity possesses a legal “right to visibility” on a private AI platform and prima facie observed that generative AI systems like ChatGPT may function more as “originators” than “intermediaries” under the Information Technology Act, 2000 due to their ability to synthesize and generate new content. The Court further held that mere economic loss arising from reduced digital visibility, without infringement of a substantive legal right, does not constitute actionable trademark dilution, disparagement, or unfair trade practice.

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Best Agrolife Limited v. Deputy Controller of Patents

Best Agrolife Limited Vs Deputy Controller of Patents & Anr.:07.07.2022: W.P.(C)-IPD 11/2022:DHC:Hon'ble Justice Jyoti Singh

 The Court set aside the order dated 08.04.2022 passed by the Deputy Controller of Patents granting Patent No. IN 394568 to GSP Crop Science Pvt. Ltd. for a synergistic suspo-emulsion formulation of Pyriproxyfen and Diafenthiuron, after dismissing the pre-grant opposition.

The Petitioner challenged the grant on grounds including lack of novelty, inventive step, and non-patentability under Sections 3(d) and 3(e) of the Patents Act. The Court held that the impugned order was non-speaking and suffered from serious violation of principles of natural justice as the Deputy Controller failed to consider the Petitioner’s substantive objections, particularly under Section 3(d), relevant prior art documents, and allowed claim amendments without notice to the opponent. 

Irrespective of the availability of post-grant remedies, the Court exercised writ jurisdiction due to manifest procedural irregularities. The matter was remanded to the Controller for fresh adjudication in accordance with law.

Disclaimer: Donot treat this as substitute for legal advise as it may contain subjective errors. 

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

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Inspite of availability of alternative remedy, writ is maintainable where there is violation of principle of natural justice

Introduction

In this  judgment concerning patent opposition proceedings in the agrochemical sector, the Delhi High Court has underscored the importance of reasoned orders by the Patent Office and strict adherence to principles of natural justice while deciding pre-grant oppositions. The ruling highlights that even at the pre-grant stage, the Controller must address all substantial grounds raised by the opponent, particularly objections under Section 3(d) of the Patents Act, 1970, which acts as a crucial filter against evergreening of patents.

Factual and Procedural Background

GSP Crop Science Pvt. Ltd. (Respondent No. 2) filed patent application No. 284/MUM/2014 on 27 January 2014 for a synergistic suspo-emulsion formulation of Pyriproxyfen and Diafenthiuron. The application was published on 11 September 2015. After examination and amendments, Best Agrolife Limited (Petitioner) filed a pre-grant opposition on 4 March 2021 under Section 25(1) of the Patents Act, raising multiple grounds including lack of novelty, inventive step, and non-patentability under Sections 3(d) and 3(e). Several other parties also filed oppositions.

The Deputy Controller of Patents heard the matter and passed an order on 8 April 2022 granting the patent (IN 394568) while dismissing the oppositions. He also allowed claim amendments without notice to the opponent.  Aggrieved by this, Best Agrolife filed the writ petition under Article 226 of the Constitution, challenging the order primarily on grounds of non-application of mind, violation of natural justice, and failure to consider key objections.

Dispute

The core dispute centred on whether the Controller’s order granting the patent was sustainable when it allegedly failed to address the Petitioner’s opposition under Section 3(d) of the Patents Act, did not properly evaluate prior art documents, and allowed claim amendments without notice to the opponent. The Petitioner also questioned the maintainability of the writ petition, given the availability of post-grant remedies.

Reasoning and Analysis of the Judge

The Court first examined the maintainability of the writ petition. While acknowledging alternative remedies like post-grant opposition under Section 25(2) or revocation under Section 64, the Court relied on the Supreme Court’s decision in Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and Others, (1998) 8 SCC 1, and Radha Krishan Industries v. State of Himachal Pradesh, (2021) 6 SCC 771. It held that writ jurisdiction can be invoked where there is violation of principles of natural justice or manifest error, and relegating the Petitioner to statutory remedies would cause injustice.

On merits, the Court found the impugned order suffered from serious infirmities. The Petitioner had specifically raised objections under Section 3(d), arguing that the claimed suspo-emulsion was a new form of a known combination that did not demonstrate enhanced efficacy. However, the Controller’s order did not even mention Section 3(d). The Judge referred to the landmark Supreme Court judgment in Novartis AG v. Union of India, (2013) 6 SCC 1, explaining that Section 3(d) sets a higher threshold to prevent evergreening by requiring enhanced efficacy for new forms of known substances. The Court clarified that Section 3(d) (enhanced efficacy) and Section 3(e) (synergistic effect in admixtures) operate in different fields and both needed independent consideration.

The order was described as non-speaking and unreasoned on vital grounds. The Court also noted failure to consider several prior art documents and allowing amendments to claims just two days before the order without giving the Petitioner an opportunity to respond, violating natural justice. Reliance was placed on Agriboard International LLC v. Deputy Controller of Patents, 2022 SCC OnLine Del 940, and Gilead Pharmasset, LLC v. Union of India, 2015 SCC OnLine Del 7014, to stress the need for reasoned decisions.

Final Decision of the Court

The Delhi High Court allowed the writ petition, set aside the impugned order dated 8 April 2022 granting the patent, and remanded the matter back to the Deputy Controller for fresh consideration in accordance with law, after giving due opportunity to all parties.

Point of Law Settled in the Case

The judgment reinforces that pre-grant oppositions must be decided through speaking orders addressing all substantial grounds raised, particularly under Section 3(d) and granting opportunity to hear the matter to Opponent. Non-consideration of key statutory objections or violation of natural justice (such as deciding amendments without notice) renders the order unsustainable, justifying interference under Article 226 despite alternative remedies. It reiterates the distinct roles of Sections 3(d) and 3(e) and the binding principles from Novartis on preventing evergreening in chemical/agrochemical patents.

Case Detail Title: Best Agrolife Limited Vs Deputy Controller of Patents & Anr. 

Date of Order: 7th July, 2022

Case Number: W.P.(C)-IPD 11/2022

Name of Court: High Court of Delhi 

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

Disclaimer: Readers are advised not to treat this as substitute for legal advise 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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Headnote: Delhi High Court allows writ petition by Best Agrolife Limited, quashes order granting patent IN 394568 to GSP Crop Science, holding that non-consideration of Section 3(d) objection, failure to address prior art, and allowing amendments without notice violated principles of natural justice. Matter remanded for fresh decision. Court clarifies distinct application of Sections 3(d) and 3(e) following Novartis principles.

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