Full Judgment Text
$
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on : 20.03.2026
Judgment delivered on : 30.03.2026
Judgment uploaded on : 30.03.2026
+ FAO (COMM) 69/2026 & CM APPL. 14636/2026, CM APPL.
14639- 14642/2026
K.S. OILS LIMITED .....Appellant
versus
SHIVANG EDIBLES OILS LIMITED
AND ANR. .....Respondents
Advocates who appeared in this case
For the Appellant : Mr. Sandeep Sethi, Mr. J. Sai Deepak,
Sr. Advs. with Mr. Yatin Chadha, Mr.
Mayank Chadha, Mr. Kunal Khanna, Mr.
Gurvinder Singh, Ms. Shreya Sethi, Mr.
Krisna Gambhir, Mr. Kaulik Mitra, Ms.
Dolly Luthra, Ms. Aashna Singh, Ms.
Sanskriti Rastogi, Ms. Gaurika Chawla and
Mr. R. Abhishek, Advs.
For the Respondents : Mr. Rajiv Nayyar, Mr. Rajshekhar Rao, Sr.
Advs. with Mr. Neeraj Grover, Mr. Arjun
Mahajan, Mr. Sumit R. Sharma, Mr.
Shreyas Maheshwari, Mr. Ajay Sabharwal,
Mr. Raghvendra N. Budholia, Mr. Sagar
Agarwal, Mr. Piyush Gautam, Mr. Harshit
Kapoor, Mr. Manav Singh, Mr. Siddhant
Bajaj, Mr. Aryan Verma and Ms. Bhavya
Arora, Advs.
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA
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FAO (COMM) 69/2026 Page 1 of 24
JUDGMENT
MANMEET PRITAM SINGH ARORA, J.
1. The present appeal challenges the ex-parte ad-interim injunction order
dated 04.02.2026 [‘impugned order’], whereby the Trial Court while holding that
a case of passing off has been made out, has restrained the Appellant/defendant
from using the word mark ‘KALASH’, and the labels ‘
,
and
’ [‘impugned marks’] while dealing with edible oils or alike
goods, and from representing itself as the proprietor thereof.
In the plaint and the impugned order, ‘
2.
’ is referred to as the
FIRST KALASH LABEL, ‘
’ as the SECOND KALASH LABEL
’ as the THIRD KALASH LABEL.
and ‘
3. At its core, the dispute between the parties concerns statutory rights,
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proprietorship, prior use, and subsisting goodwill in the trademark
‘KALASH’ and the labels, in relation to edible oils. The Respondent asserts
exclusive rights to use the impugned marks on the strength of an assignment
deed dated 01.01.2026 executed by its erstwhile Director Sh. Gopal Das
Garg. The Respondent contends that the said Sh. Gopal Das Garg adopted
the impugned mark ‘KALASH’ by using the First Label ‘
’ in
1974 and has thereafter, used the said mark in different labels with the last
label being
. The Respondent contends that Sh. Gopal Das Garg
has used the impugned marks continuously and uninterruptedly since, 1974
until 2026 through his several business concerns. The Respondent concedes
that the rights in the First KALASH Label were assigned by Sh. Gopal Das
Garg in favour of the Appellant in 1996 and the impugned marks were used
by the Appellant between 1996 to 2012, however, it contends that the
Appellant discontinued the use of the marks in 2012 and also, that the
assignment of 1996 made in appellant’s favour is void. It, therefore,
contends that the Respondent has the exclusive right to use the impugned
marks and it has been using the said marks since 2017 under the express
authority and permission of Sh. Gopal Das Garg. The Respondent concedes
that it is not the registered proprietor of the impugned marks and has,
therefore, filed this suit on the plea of passing off .
In contrast, the Appellant claims exclusive proprietary rights in the
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impugned marks. The Appellant relies upon a deed of assignment dated
26.07.1996 executed in its favour, whereby the registered trademark
application no. 305567
, was transferred in its favour and the said
transfer was recorded in the register of Trade Marks. It relies upon
wordmark registration for KALASH vide TM No. 1773375 on 13.01.2009
and Copyright registration of
label in 2009. The
Appellant relies upon assignment deed(s) dated 13.08.1986 and 26.07.1996
executed by Sh. Gopal Das Garg in respect of the first KALASH label to
assert that the proprietorship of the impugned mark stood transferred in
favour of the Appellant and, therefore, no valid assignment could have been
made by Sh. Gopal Das Garg in favour of the Respondent on 01.01.2026. It
contends that it used the marks till 2017 and thereafter, was undergoing
Corporate Insolvency Resolution Process [‘CIRP’]. It states that Appellant
herein was under liquidation process from 2017-2025 and Sh. Gopal Das
Garg, who was the erstwhile Director in the Appellant company,
unauthorisedly used the impugned marks through its company, the
Respondent herein from 2017. It is stated that in the CIRP, the Appellant
company was auctioned by the CIRP and the sale was allowed by the
National Company Law Tribunal [‘NCLT’] on 03.02.2025. The Appellant’s
ownership of the brand KALASH is duly documented in CIRP and recorded
in the order of the NCLT. The Appellant, therefore, contends that Sh. Gopal
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Das Garg had no proprietary rights in the impugned marks and could not
have transferred any rights in favour of the Respondent vide assignment
deed dated 01.01.2026.
SUBMISSIONS BY THE PARTIES
4. Mr. Sandeep Sethi, learned senior counsel for the Appellant contends
that the impugned order is legally flawed as the Trial Court has applied an
incorrect trinity test for passing off and has placed incorrect reliance on
judicial precedents. He states that the Trial Court failed to record any prima
facie satisfaction of the existence of the essential ingredients of passing off.
He states that in the absence of such findings, the grant of an ex-parte ad-
interim injunction is unsustainable.
4.1 On merits, he submits that the Respondent is a proxy entity set up by
the ousted management of the Appellant to usurp the trademark ‘KALASH’,
which is evident from multiple applications filed immediately after the
Appellant’s e-auction in NCLT. He submits that the Respondent’s challenge
to the validity of assignment deeds of 1986 and 1996 is false and contrary to
extensive documentary and statutory records demonstrating the Appellant’s
continuous use and goodwill in the mark for over three decades, which has
also been recorded in judgment dated 26.11.2012, in C.S. (OS) 1299/2011 ,
passed by the coordinate Bench of this Court in M/S K.S. OIL LTD. v. M/S
EKTA DAIRY PVT. LTD . He further contends that the Respondent has
suppressed material facts, including the Appellant’s existing trademark
registrations, and that the Trial Court ought to have afforded the Appellant
an opportunity of hearing before passing the impugned ex-parte order.
4.2 He relies upon the Annual Reports of the Appellant since 1996 till
2025, which record the trademark KALASH as an asset of the company. He
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also relies upon the Trademark Registration of the wordmark KALASH in
Class 31, recorded in the favour of the Appellant.
5. Mr. Rajeev Nayar, Sr. Advocate and Mr. Neeraj Grover, Advocate for
the Respondents submits that the present appeal is not maintainable at this
stage and that the Appellant ought to seek vacation of the impugned ex-parte
order before the Trial Court under Order XXXIX Rule 1 and 2. They
contend that the impugned order is well-reasoned and duly records findings
on the trinity test for passing off. They assert that Respondents have placed
on record, chartered accountant certificates evidencing sales and
advertisement expenditure, thereby establishing their exclusive and
continuous use of the impugned mark since 2017.
5.1 On facts, they argue that the Appellant had discontinued use of the
mark after 2012, thereafter merely undertaking job work for third parties
until 2017 and eventually ceasing operations during the CIRP. They submit
that in such circumstances, no subsisting goodwill remains with the
Appellant, and it cannot claim rights over goodwill generated by the
Respondent between 2017 and 2025. They further contend that the
Appellant, particularly its new management, was aware of the Respondent’s
use since 2017, especially as the Respondent’s manufacturing unit operates
from the same premises, a fact that would have been apparent during due
diligence prior to the e-auction. They also dispute the genuineness of the
alleged license agreement dated 15.05.2013.
5.2 They further submit that the Appellant’s trademark rights stand
weakened due to non-renewal of Trademark Application No. 305567 in
Class 29, which expired in May 2023, indicating deliberate abandonment,
particularly when another Trademark Application No. 1773375 in Class 31
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was renewed. They contend that the 1986 assignment deed is void, while the
1996 deed constituted only a limited assignment of the label without transfer
of business goodwill. They submit that the Copyright registration of 2009 is
immaterial and is under challenge by the Respondent.
5.3 They have also raised the allegations of collusion between the
Appellant’s current and erstwhile management to question the validity of the
e-auction under the Insolvency and Bankruptcy Code, 2016 [‘IBC’], though
they have simultaneously asserted that Sh. Gopal Das Garg had severed ties
with the Appellant in 2002, negating any such collusion.
5.4 The Respondent also seeks to rely upon additional documents which
were not filed before the Trial Court.
COURT FINDING’S
6. This Court has heard the learned counsel for the parties and perused
the record.
7. We shall first examine the rights asserted by the parties in respect of
the impugned marks as placed before the Trial Court and as canvassed in the
present appeal, in order to determine whether the Trial Court had duly
considered the proprietary rights of the Appellant/defendant emanating from
the documents placed before it prior to granting ex-parte ad-interim
injunction in favour of the Respondent/plaintiff.
Rights of the Appellant in the impugned marks asserted in the present appeal
8. The Appellant asserts statutory and proprietary rights in the trademark
‘KALASH’, tracing a continuous and legally documented chain of title from
1975 till date. It relies primarily on Trademark Registration No. 305567
(Class 29) (originally filed in 1975 by Sh. Gopal Das Garg, registered in
1978), subsequent renewals, and additional registrations including the word
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mark ‘KALASH’ in Class 31 vide Trademark Registration No. 1773375.
9. The Appellant also places reliance on pending and associated
trademark applications filed in 2008 and Copyright registration of 2009 for
artistic label ‘
’ ‘
, to assert statutory exclusivity over
both the mark and its artistic label. It also places reliance on the trademark
applications filed in January 2025, which are pending.
10. The Appellant’s proprietary claim is founded on a complete and
unbroken chain of assignment with goodwill, supported by assignment
deeds dated 13.08.1986 and 26.07.1996, evidencing transfer without any
restrictions or limitations from M/s Gopal Industries to K.S. Enterprises to
K.S. Oils Ltd. (Appellant herein). The Appellant emphasizes that these
assignments were duly recorded by the Trade Marks Registry for Trademark
[‘TM’] No. 305567
, thereby vesting exclusive proprietary rights
in it, since 1996. It also relies on the License Agreement dated 15.05.2013
executed with S. L. Consumer Products Ltd. to show controlled and
permissive use of the impugned mark between 2013 to 2017, reinforcing
continuity of use in law under Section 48 of the Trade Marks Act 1999 [‘Act
of 1999’]. Additionally, it relies upon its Annual Reports from the year 1996
onwards till 2025, which continuously record the ownership of the
trademark ‘KALASH’ as a corporate asset and the large-scale business
conducted under the said trademark.
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Sh. Gopal Das Garg on his own showing was a director in the
Appellant company till 2002 and was, therefore, responsible for the Annual
Reports published by the company.
11. The Appellant also asserts commercial goodwill and prior user rights,
supported by extensive documentary evidence including Agmark, FSSAI
and other certifications , press releases and media coverage showing turnover
and reputation , and advertisements demonstrating market recognition of
‘KALASH’ exclusively with the Appellant from 1996 onwards. It further
relies on invoices (post-October 2025), to show resumed commercial use
post-acquisition in the CIRP process, along with public notices and cease-
and-desist notice dated 26.08.2025 asserting its rights against the
Respondent. Collectively, these documents are relied upon to establish prior
adoption, continuous use, goodwill, and likelihood of confusion.
12. The Appellant emphatically placed reliance upon the judgment dated
26.11.2012, in C.S. (OS) 1299/2011 , passed by the Coordinate Bench of this
Court in M/S K.S. OIL LTD. v. M/S EKTA DAIRY PVT. LTD. wherein
the Court, at paragraph 18 of the judgment held that the Appellant’s
trademark ‘KALASH’ has acquired the status of a well-known trademark
under Section 2(1)(z)(g) of the Act of 1999. The said conclusion was drawn
by the Court in perusal of the sales figures and advertisement expenses
placed before it, as also the fact that the mark had been in use for over two
decades.
13. Lastly, the Appellant asserts rights arising from CIRP and
continuation of corporate identity, contending that trademark ‘KALASH’
remained part of the assets and were never divested. It relies on NCLAT
order dated 16.03.2021, e-auction notice and process documents, Letter of
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Intent, Sale Certificate dated 22.03.2024 and NCLT order dated 03.02.2025
to establish that the company was sold as a going concern with all
intellectual property, including ‘KALASH’.
14. The Appellant also relied upon the findings in the orders of the
Trademark Registry dated 05.07.2024 and 07.11.2025 refusing the
trademark application no. 6212110 for word mark ‘KALASH’ in Class 29
filed by Sh. Gopal Das Garg. The Registrar declined registration while citing
the registrations and pending applications of the Appellant herein, as well as
rejecting the claim of user since 1974.
15. On this basis, the Appellant claims exclusive ownership, prior user
status, subsisting goodwill, and uninterrupted legal entitlement to the mark
‘KALASH’ w.e.f. 1975 till date.
Rights claimed by the Respondent in the impugned marks
16. The Respondent primarily asserts common law proprietary rights
based on continuous and exclusive use of the mark ‘KALASH’, since 2017
claiming that it has independently built substantial goodwill and reputation
in the market. It relies on documentary evidence such as website records,
social media presence, Chartered Accountant-certified sales figures,
advertisement invoices, and extensive commercial records (invoices) to
establish that it has been using the mark at least since 2017. These
documents are relied upon to show market presence, trade recognition, and
consumer association, thereby grounding a passing off action independent of
statutory registration.
17. The Respondent further claims that any existing goodwill in the
impugned marks presently vests with it, contending that the Appellant had
ceased use and business operations for a prolonged period (allegedly since
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2012). On this basis, it asserts that the Appellant’s rights, even if once
existing, stood extinguished due to non-use and abandonment, particularly
evidenced by non-renewal of Trademark No. 305567
in Class 29
and lack of commercial activity until 2025. The Respondent relies on the
Appellant’s own Annual Reports of 2014 - 15 to argue absence of business
activity since 2013, and contends that goodwill cannot survive long after
non-use, thereby positioning itself as the de facto and current source of
goodwill in the market.
18. A key ground of the Respondent’s case is a challenge to the
Appellant’s proprietary claim itself, asserting that the Appellant never
acquired valid proprietary rights in the mark. It disputes the validity of the
assignment deed(s) of 1986 and 1996, arguing that: (i) the 1986 assignment
was limited (label only, without goodwill); (ii) it was in the nature of a
family arrangement without exclusivity; and (iii) in any event, the 1986
assignment is void ab initio due to alleged defects (including execution in
the name of a deceased partner). Consequently, it contends that the
Appellant cannot claim valid title, and any subsequent assignment (deed of
1996) conveys no rights.
The Respondent also relies on an alleged assignment deed dated
01.01.2026 in its favour (executed through Gopal Das Garg) to assert
derivative rights, while simultaneously maintaining that earlier assignments
are invalid.
19. The Respondent also asserts independent and bona fide adoption of
the mark ‘KALASH’ and its use since 2017, emphasizing that its
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manufacturing operations have been open, continuous, and within the
knowledge of the Appellant, particularly due to the shared factory premises
and electricity connection, supported by electricity bills and audit records. It
further alleges that the Appellant is attempting to disrupt its established
market by undercutting prices and flooding the market. It relies upon
WhatsApp communications with distributors, thereby reinforcing its claim
of an existing and protectable trade presence.
20. Lastly, the Respondent seeks to negate the Appellant’s statutory and
ancillary rights by contending that trademarks were not part of the
insolvency sale in the CIRP, relying on IRP valuation documents and
auction records. It contends that the Appellant’s Copyright and licensing
claims are either irrelevant, invalid, or fabricated. It challenges the
Copyright registration of 2009 as fraudulent and under cancellation and
disputes the license agreement dated 15.05.2013 as forged.
21. On this basis, the Respondent asserts a superior right founded on
actual market use, subsisting goodwill, and absence of valid competing title,
thereby justifying the grant of injunction in its favour.
Rights dealt by the Trial Court in the impugned order
22. The Trial Court has primarily accepted and protected the following
rights of the Respondent/plaintiff:
22.1 The Trial Court took note of the assignment deed dated 01.01.2026
executed by Sh. Gopal Das Garg, whereby the Respondent/plaintiff claims
to have acquired the word mark ‘KALASH’; First, Second, and Third
KALASH labels; trade dress, artistic work, and goodwill.
22.2 The Trial Court took note of the documents filed by the
Respondent/plaintiff to aver continuous use, advertising (website, e-
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commerce platforms), and market presence of the Respondent/plaintiff since
2017.
22.3 Even in the absence of registration of the marks, the Trial Court
recognised a common law right of the Respondent/plaintiff to restrain
identical/deceptively similar marks and to protect trade dress, labels,
packaging, and overall get-up, by applying the test of passing off.
22.4 The Trial Court took note of certain asserted or possible rights of the
Appellant/defendant. It noted that Appellant/defendant had earlier
registration (TM No. 305567)
, which had now lapsed and that
the Appellant/defendant has pending trademark applications (2025). The
Trial Court also took note of the Respondent/plaintiff’s plea that
Appellant/defendant had stopped business in 2012 and that the TM No.
305567 was not renewed. However, the Trial Court held that lapsed
registration is treated as non-operative and pending applications (2025)
confer no enforceable rights at this stage.
ANALYSIS
23. The limited issue arising for consideration in the present appeal is
whether, in the facts of this case, an ex-parte ad-interim injunction ought to
have been granted by the Trial Court, without issuing notice to the
Appellant/defendant herein.
24. In the present case, the Appellant and the Respondent are not
strangers, inasmuch as both entities claim derivative proprietary rights in the
impugned marks on the basis of documents executed by Sh. Gopal Das
Garg. The competing claims arise from rival documents executed by Sh.
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Gopal Das Garg himself; however, the documents executed in favour of the
Appellant are prior in point of time, and the execution of the documents is
admitted fact by both the parties.
25. The undisputed facts establish that the Appellant holds proprietary
rights in the FIRST KALASH LABEL
by virtue of assignment
deed(s) dated 13.08.1986 and 26.07.1996. The assignment deed dated
26.07.1996, executed in favour of the Appellant, has been duly recorded
with the Trademarks Registry in respect of Trademark Application No.
305567. It is admitted that Sh. Gopal Das Garg executed the said assignment
deed, and the affidavit dated 26.07.1996 filed before the Trademarks
Registry affirms the said assignment.
In these circumstances, even assuming, arguendo, that there existed
any defect in the earlier assignment deed dated 13.08.1986 (as alleged by the
Respondent), the same stood rectified upon execution of the subsequent
assignment deed and affidavit, which are binding upon Sh. Gopal Das Garg
in view of his admitted execution thereof. However, the impugned order, in
its operative portion, fails to advert to the said assignment deed(s) and
affidavit dated 26.07.1996 or consider the legal effect of their recordal with
the Trademarks Registry in favour of the Appellant.
26. The Respondent has relied on the fact that registration of Trademark
Application No. 305567 lapsed on 19.05.2023. It is submitted that, although
the Appellant has filed a writ petition before the High Court of Judicature at
Bombay in December 2025 for seeking renewal/revival of the said
registration, the same has not been listed till date. On this basis, it is
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contended that the Appellant has abandoned the mark and, therefore,
permitted the registration to lapse. Conversely, the Appellant submits that
the Appellant was admittedly undergoing CIRP during the period 2017-
2025, which constitutes judicially recognised ‘special circumstances’ within
the meaning of Section 47(3) of the Act of 1999 and would similarly form
the basis for seeking revival/renewal of the registration. It is thus contended
that the non-renewal of the registration occurred due to inadvertence during
the CIRP and was not on account of any intention to abandon the mark. The
Appellant has relied upon the proceedings before the IRP, CoC and NCLT
to contend that the impugned marks were consistently considered as the
asset of the Appellant company.
Pertinently, the impugned order notes that the registration of
Trademark Application No. 305567 lapsed during the CIRP period.
However, the impugned order does not reflect if the Trial Court made any
inquiry from the Respondent with respect to legal steps taken by the
Appellant for revival of the said registration, as such an inquiry would have
made the Trial Court aware of the filing of the writ petition for renewal.
The impugned order also does not reflect if the Trial Court made any
inquiry from the Respondent, with respect to the status of the ownership of
the impugned marks KALASH in the CIRP, which led to the e-auction of
the Appellant company. If such an inquiry would have been made,
Respondent would have informed the Trial Court that the impugned marks
are reflected in the valuation report and the order passed by the NCLT.
The above facts show that this was a fit case where the Trial Court
would have been benefitted with the appearance of the Appellant/defendant,
prior to deciding the interim injunction application.
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27. Prima facie, the lapse of the registration of Trademark Application
No. 305567, however, would not have impacted/affected the assignment of
the mark under the deed dated 26.07.1996, which was absolute and
unconditional, and the same would continue to bind the executants i.e., Sh.
Gopal Das Garg and the Appellant. However, the impugned order contains
no express consideration or determination of this fact and its effect on the
proprietary rights of the Appellant.
28. The Trial Court, in the impugned order, at paragraph 16(i), has
referred to the three (3) trademark applications applied for by the Appellant
in January 2025 and has noted that the same are presently pending.
However, the impugned order fails to take into account the earlier
trademark applications filed by the Appellant in 2008 in Class 29 for the
label
(as associate marks), as well as the
and
subsisting registration held by the Appellant for the word mark ‘KALASH’
in Class 31 since 13.01.2009. Likewise, the Copyright registrations obtained
by the Appellant in respect of the artistic label
and
since 2009 have not been adverted to in the impugned order. These
registrations and applications evidence the statutory as well as proprietary
rights of the Appellant in the ‘KALASH’ label mark dating back to 2008.
The Appellant has also placed on record its Annual Reports for the years
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2009-2010 and 2010-11, demonstrating its extensive use of the said artistic
label and reflecting substantial sales under the mark. It has placed on record
Annual Reports till 2024-25, which consistently record the brand
‘KALASH’ as the asset of the Appellant. In the same timeline, the judgment
of the Coordinate Bench of this Court dated 26.11.2012 in M/s K.S. Oil
Ltd. v. M/s Ekta Dairy Pvt. Ltd. (supra) further evidences that the
impugned label mark was recognised by this Court as a well-known
trademark, with the Appellant acknowledged as its proprietor. The said
judgment takes note of the substantial sales figures and advertisement
expenditure of the Appellant while according such recognition to the mark.
These pending trademark applications of 2008 and the Copyright
registrations for the artistic label
and
of the year
2009 were material facts, which ought to have been considered by the Trial
Court before forming an ex-parte prima facie opinion in favour of the
Respondent/plaintiff, as these documents indisputably show prior use, by the
Appellant, of the said mark. However, the impugned order fails to even
record or consider these material aspects, despite the Respondent having
placed on record documents relating to Appellant’s trademark registrations
(2008) at paragraph no. 30 and having specifically pleaded Appellant’s
copyright registrations (2009) in paragraph 42 of the plaint.
29. The Respondent was incorporated in the year 2012 and claims use of
the very same impugned marks and relies upon sales figures for the period
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2017-2025 to assert its goodwill in the said artistic label/mark
and
. The plaint makes no reference to the use of this artistic
label by the Appellant/defendant from 2008 onwards and, therefore, the
impugned order also does not deal with this fact. Even during arguments, the
Respondent was unable to dispute the use of this artistic label by the
Appellant from 2008 onwards. The Annual Reports, pending trademark
applications (2008) and Copyright registration (2009) prima facie shows that
the said artistic label was extensively used by the Appellant from 2008
onwards and the Appellant built goodwill in the artistic label as recognized
by the Coordinate Bench of this Court dated 26.11.2012 in M/s K.S. Oil
Ltd. v. M/s Ekta Dairy Pvt. Ltd. (supra). It is, in fact, the Appellant’s case
that the Respondent has sought to unauthorizedly and illegally ride upon this
pre-existing goodwill from 2017 onwards, coinciding with the period during
which the Appellant was undergoing CIRP before the NCLT and, therefore,
unable to protect its rights.
The competing claims of goodwill necessarily require adjudication by
the Trial Court upon a proper appreciation of these facts and the evidence on
record.
30. The Appellant has contended that the artistic label was used by it until
2012 and thereafter through its licensee, S.L. Consumer Products Limited,
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during the period 2013-2017, and has placed on record a licence agreement
dated 15.05.2013 in this regard. It is further stated that the Appellant
subsequently underwent CIRP during 2017-2025, culminating in an auction
sale of the Appellant company. Notably, the trademark ‘KALASH’ is
expressly reflected as an asset of the Appellant in the CIRP. This fact is not
disputed by the Respondent; however, it is contended that the brand was
assigned only a nominal value of ₹1 lakh in the valuation report. Such
nominal valuation, in our view, has no bearing on the subsistence or
enforceability of the Appellant’s proprietary rights in the impugned mark(s).
No material has been placed on record to indicate that either Sh. Gopal Das
Garg or the Respondent objected to the inclusion of the trademark
‘KALASH’ in the list of assets of the Appellant during the CIRP. The
Respondent was fully aware of both the CIRP and the inclusion of the said
trademark ‘KALASH’ as an asset of the Appellant company. However,
these material facts have not been disclosed in the plaint, nor were the
relevant CIRP documents, culminating in the sale, were placed before the
Trial Court. The impugned order, consequently, does not reflect any
consideration or deliberation on these aspects.
The Respondent has disputed the execution of the license agreement
dated 15.05.2013 in favour of S.L. Consumer Products Ltd., however, since
the Respondent is not an executant to the said document, it is not apparent
that on what basis it is denying the said document. The said issue would be
considered by the Trial Court.
31. The Appellant has contended that the new management, upon
acquiring the company through an e-auction conducted under the aegis of
the NCLT, commenced production on 29.10.2025, a fact which is not
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disputed by the Respondent. However, the suit came to be instituted in
February 2026, after a lapse of nearly three (3) months.
In these circumstances, where the Appellant had already re-
commenced production in October 2025 and was asserting proprietary rights
in the impugned mark(s) and the artistic label on the basis of statutorily
recorded proprietary rights in the marks, as well as assignment deed through
a common person, namely Sh. Gopal Das Garg, it was a fit case where the
Trial Court ought to have issued short notice and afforded the Appellant an
opportunity of appearance and hearing, before passing any ad-interim order
on the interlocutory application.
32. The Respondent in its plaint has contended that Sh. Gopal Das Garg
adopted the impugned wordmark ‘KALASH’ and the first ‘KALASH’ label
in 1974 and has continuously used the same till 2025 through family-owned
business concerns. On this basis, the Respondent relies upon an assignment
deed dated 01.01.2026 executed by Sh. Gopal Das Garg to assert proprietary
rights in the impugned marks, while acknowledging that the marks are
unregistered and that Sh. Gopal Das Garg does not hold any statutory rights
by way of trademark registration.
The Appellant, however, has drawn our attention to the order dated
05.07.2024 passed by the Registrar of Trade Marks, whereby the proprietary
claim to the mark KALASH and user claim since 1974 made by Sh. Gopal
Das Garg was expressly rejected by the Registrar, and even the subsequent
review petition against the said order was also dismissed vide order dated
07.11.2025. These orders were passed in the course of rejecting Sh. Gopal
Das Garg’s Trademark Application No. 6212110 dated 08.12.2023 in Class
29 for the word mark ‘KALASH’. In the said orders, the Registrar also
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declined the claim of proprietorship advanced by Sh. Gopal Das Garg, inter
alia, in view of the Appellant’s registered Trademark No. 305567
and pending Trademark Application No. 6813811 for the
wordmark ‘KALASH’ in Class 29. In our considered view, these orders
were material and germane to the issue at hand and ought to have been duly
considered by the Trial Court while evaluating the Respondent’s prima facie
claim of proprietary rights founded on the assignment deed dated
01.01.2026. However, the impugned order fails to even advert to these facts,
despite the relevant documents having been placed on record.
33. We are of the considered opinion that the finding of a prima facie case
returned by the Trial Court in the impugned order cannot be sustained, as it
fails to consider the effect of the assignment deed(s) of 1986 and 1996,
pending trademark applications (2008), subsisting trademark registrations
(2009), and Copyright registrations 2009 in favour of the Appellant, which
collectively evidence the exercise of proprietary rights in the impugned
marks, admittedly from 1996 onwards. Likewise, while recording a finding
on the balance of convenience, the Trial Court has failed to take into account
the material circumstance that the Appellant had already commenced
production in October 2025, whereas the Respondent approached the Court
only in February 2026; in such circumstances, issuance of shorter date
notice would have been the more appropriate course.
The consequence of the ex-parte ad-interim order is that the
Appellant, despite having statutory rights in the impugned marks, has been
injuncted without being afforded an opportunity of hearing. While it is well
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settled that ex-parte injunctions may be granted in trademark matters in
cases involving, inter alia, counterfeiting or where the defendant lacks any
semblance of proprietary right, the present case however did not fall within
such categories so as to warrant the grant of an ex-parte ad interim
injunction.
34. In view of the aforesaid findings, the impugned order is set aside, and
the Trial Court is directed to consider and decide the injunction application
afresh, after taking into account the stand of the Appellant/defendant.
35. Learned senior counsel for the Appellant has submitted that the
Appellant shall complete the pleadings within a time-bound schedule as
directed by the Court, which is also acceptable to the Respondent.
Accordingly, the Appellant is directed to file its written statement as well as
its reply to the application within a period of one (1) week, along with an
affidavit of admission and denial of documents. Similarly, the Respondent
shall file its replication and rejoinder to the application within a period of
one (1) week thereafter, also accompanied by an affidavit of admission and
denial of documents. The Respondent/plaintiff will be at liberty to file
additional documents with its replication. The time for completion of
pleadings has been granted as per the request of the parties and they shall
ensure that the pleadings are completed.
36. In view of the findings recorded hereinabove, the directions issued by
the Trial Court for seizure of the Appellant/defendant’s goods and their
release on superdari are hereby recalled. The Appellant/defendant is at
liberty to de-seal and sell the said goods in the market. However, the
Appellant/defendant shall maintain proper accounts of all sales effected by
them and shall file, on a monthly basis, duly audited statements of sales of
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the products bearing the impugned marks before the Trial Court, until final
disposal of the injunction application.
37. Mr. Nayar, learned senior counsel for the Respondent stated that
though the appeal is maintainable under Order 43 Rule 1 (r) Code of Civil
Procedure, 1908 [‘CPC’] read with Section 13 of the Commercial Courts
Act, 2015, however, the Court ought not to entertain this appeal and relegate
the Appellant to approach the Trial Court by filing an application under
Order XXXIX Rule 4 CPC. He relied upon the judgment dated 16.03.2026
passed by the Division Bench of this Court in FAO(OS)(COMM) 31/2026
Asian Hotels North Ltd. v. Exclusive Capital Limited & Ors. and order
dated 29.11.2024 passed by the Division Bench of this Court in FAO(OS)
169/2024 titled as Slowform Media Pvt . Ltd. & Ors. v. Asish Mohapatra
& Ors .
38. We are unable to accept the aforesaid submission of the learned senior
counsel for the Respondent. The reliance placed by the Appellant on the
judgment dated 13.12.1996 of the Division Bench of this Court in Rajesh
1
Batra v. M/s Grandlay Electricals (India) authoritatively settles the issue
regarding the maintainability of an appeal against an ex-parte ad-interim
injunction. In the facts of the present case, as noted hereinabove, this was a
fit case where notice ought to have been issued to the Appellant/defendant
prior to grant of any interim relief, particularly in view of the competing
claims of proprietorship and the Appellant’s prior and extensive use of the
impugned marks. It is also pertinent to note that the judgments in Asian
Hotels North Ltd. (supra) and Slowform Media Pvt. Ltd. (supra) do not
lay down that such an appeal is not maintainable; rather, in those cases, the
1
1996 SCC OnLine Del 873, at paragraph no. 9.
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Division Bench declined to interfere with the interim orders on the facts
therein.
39. The Trial Court shall decide the injunction application on its own
merits, uninfluenced by any observations made in the present order. All the
rights and contentions of the parties are left open. The Trial Court is
requested to take up the injunction application, upon completion of
pleadings for expeditious hearing, in accordance with its calendar and
preferably decide the application within one (1) month from completion of
the pleadings.
40. The impugned interim order dated 04.02.2026 is accordingly set
aside, and the appeal stands disposed of in the aforesaid terms. All pending
applications, if any, also stand disposed of.
MANMEET PRITAM SINGH ARORA, J
V. KAMESWAR RAO, J
MARCH 30, 2026/ IB/AM
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