Court frowns upon suppression of material facts

Quests for personal gains have become so intense that those involved in litigation do not hesitate to take shelter of falsehood and misrepresent and suppress facts in the court proceedings. Materialism, opportunism and malicious intent have overshadowed the old ethos of litigative values for small gains.

This post discusses the perils of suppressing material facts when seeking interim injunction and the ensuing consequences.

The Plaintiff, Mittal Electronics, filed the suit before the Delhi High Court alleging trademark infringement, passing off and other ancillary reliefs against the Defendants, Sujata Home Appliances (P) Ltd (SHAP) and Ors., and sought restrain order against SHAP from using the mark SUJATA, STAR SUJATA, in relation to their business.

Mittal in the plaint states:

They are the registered proprietor of the mark SUJATA, adopted by their predecessors in the year 1980 and being used in relation to electrical goods and home appliances such as Mixer, Grinder, Grater, Shredder, Chopper, etc. The mark is registered since 1991 in several classes including 7, 8, 9, 11 and 35. On becoming aware of SHAP’s use of an identical mark SUJATA in relation to their business suit was filed. On the basis of its registration and other materials placed by Mittal an ex-parte injunction was granted restraining SHAP from using the mark SUJATA.

SHAP filed application to modify the injunction on the following grounds:

  1. Mittal has suppressed material facts to obtain ex-parte injunction.
  2. One of the Directors of SHAP, namely Rajesh Kumar Bansal, started business in the year 2008, trading as Luxmi Enterprises, a proprietorship firm and was manufacturing and selling water purifiers under the brand name ‘SUJATA’. Rajesh Kumar Bansal has obtained trademark registration in the year 2012 for the device mark ‘SUJATA’ in class 11 in respect of water purifiers, RO system and water filters claiming use since 2008. The said trademark is being used by SHAP under license from Rajesh Kumar Bansal.
  3. Mittal is selling only juicer, mixer, grinders and geysers and not dealing with water purifier, RO systems or water filters for which SHAP’s use of the trademark ‘SUJATA’ is prior in time. This fact was concealed by Mittal for obtaining ex-parte injunction.
  4. SHAP seeks modification of the injunction order allowing them to use the mark SUJATA for water purifiers, water filters and RO systems.

Mittal’s arguments:

  • Both parties are using the trademark ‘SUJATA’ in relation to home and kitchen appliances which are allied and cognate goods, having same trade channels and target customers. Hence, SHAP’s contention that the goods are different is not correct.
  • Mittal has registration for the mark ‘SUJATA’ in various classes including those relating to water purifiers, RO systems and water filters and is at liberty to use the same as and when it deems fit.
  • SHAP has not filed any proceedings challenging Mittal’s registration and thus, estopped from alleging non-use of the mark in relation to water purifiers and filters.
  • Mittal adopted the mark ‘SUJATA’ in the year 1980 and the first registration is of the year 1991, whereas, SHAP’s claim of user is only 2008 and the invoice on record is of June, 2013. Adoption of an identical mark is dishonest. Mittal has filed rectification petition to cancel Rajesh Bansal’s registration for the mark SUJATA and in view of prior adoption, injunction granted is justified.

SHAP contends:

  1. Mittal is not manufacturing or selling water purifiers, water filters or RO systems and only deal with juicer, mixer, grinder, etc.
  2. Mittal has not opposed the registration of the SUJATA mark for water purifiers and filters. The averment that Mittal was not aware of the aforesaid registration is not sustainable.
  3. SHAP’s prior use and exclusivity of the use of the mark ‘SUJATA’ in relation to water purifier, water filter and RO system is irrefutable and even now Mittal is not dealing with the aforesaid products.

The court after considering the pleadings, arguments and case laws held:

  • Registration of the trademark is a prima facie evidence of its validity. SHAP has filed documents to show that since 2013, earlier as Luxmi Enterprises and even now they are selling water purifiers, RO system and water filters. On the other hand there are no documents on record to show Mittal deals with water purifiers, RO systems and water filters.
  • Mittal’s prior knowledge of registration for the mark SUJATA in the name of one Rajesh Bansal trading as Luxmi Enterprises is evident from the documents on record. Mittal’s plea that despite due diligence there was no way to ascertain that Rajesh Bansal who is the registered proprietor of the trademark ‘SUJATA’ for water purifiers, water filters and RO system is the Director of SHAP is not sustainable. Considering that Rajesh Kumar Bansal is one of the Directors of SHAP was sufficient for Mittal to have carried out further investigation and ascertain whether it was the same person in whose favour registration of the mark ‘SUJATA’ has been granted.
  • Mittal in the prayer clause has sought to injunct geysers, water purifiers, RO systems, etc, though till date they have neither manufactured nor sold water filters, water purifiers and RO system, nor is there pleadings in respect of its use of the trade mark SUJATA qua water purifiers, RO Systems and water filters. Thus, it is a case of clever drafting and shows the oblique manner in which the injunction was sought.
  • In the present case despite the fact that SHAP is selling its water filters, water purifiers and RO Systems under the mark ‘SUJATA’ at least since 2013, there is no material that any customer was deceived into buying SHAP’s product as that of Mittal.

In view of the above the Court modified the injunction granted earlier and allowed SHAP to use the mark SUJATA for water filters, water purifiers and RO Systems and also released the goods seized by the Local commissioner.

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