Full Judgment Text
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
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Date of decision :1 October, 2018
+ CS (COMM) 1417/2016
M/S. VINI COSMETICS PVT. LTD. ..... Plaintiff
Through: Mr. Ajay Amitabh Suman, Mr.
Pankaj Kumar and Mr. Kapil Giri,
Advocates. (M:9990389539)
versus
M/S. ABHAY ENTERPRISES & ORS. ..... Defendants
Through: Ms. Pratishtha Vij, Mr. P. Hansranjan
and Mr. Prawal, Advocates for D-1.
(M:9971919461)
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
1. Plaintiff has filed the present suit for permanent injunction restraining
passing off, infringement of trademark, infringement of copyright, rendition
of accounts etc. The case of the Plaintiff is that it is engaged in the
manufacturing and marketing of various kinds of cosmetics and proprietary
products, lotions, talcum powder, powder (make up), creams, deodorant,
styling gel, perfume, shaving cream, soap, shampoo, bleaching preparations
etc.
2. One of the products being manufactured and sold by the Plaintiff is
the „ GLAM-UP LABEL ‟ powder cream in a distinctive red coloured
packaging. It is the case of the Plaintiff that the mark and label was adopted
by it in September, 2012 and the same has been in use since August, 2013.
It has applied for registration, in various classes for the word-mark and
label-mark.
3. The Plaintiff came to know that Defendant No.1 – M/s Abhay
CS (COMM) 1417/2016 Page 1 of 7
Enterprises had started using an identical mark and carton and imported the
same from foreign countries. According to the Plaintiff, Defendant No.1 is
not only selling the products at its own outlets but also supplying the same
to various dealers and retailers. It is the case of the Plaintiff that the
information about Defendant No.1 was revealed when the Commissioner of
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Customs, Mumbai sent a notice dated 2 April, 2014 to one of the
manufacturers, who was manufacturing and supplying the products to the
Plaintiff. The customs authorities informed the manufacturer about the
arrival of a consignment of 14,400 pieces of GLAM-UP POWDER CREAM
products at the customs and called upon the Plaintiff‟s manufacturer to
furnish the requisite security bond and bank guarantee so that the said
counterfeit products could be detained. The Plaintiff was then informed by
its manufacturer, who took steps to file the present suit against the
Defendants.
4. In the present suit, the Plaintiff has impleaded Abhay Enterprises as
Defendant No.1 as also the customs authorities as Defendant Nos.2 & 3.
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Vide order dated 20 August, 2014 this Court granted an ex-parte injunction
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order in favour of the Plaintiff. On 5 November, 2014 the said injunction
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was also confirmed. On 1 December, 2014, the Court recorded the
Defendant No.1‟s statement as under:
“ Learned counsel for the defendants submit that
defendants are willing to suffer a decree provided the
plaintiff gives up the relief of damages.”
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5. On the next date i.e. 2 December, 2014, learned counsel for the
Plaintiff reverted with instructions and submitted as under:
“ Counsel for the plaintiff submits that in case
defendants pay reasonable costs and damages and also
CS (COMM) 1417/2016 Page 2 of 7
agree for destruction of the seized goods, he will
instructions from his client. ”
6. Thereafter, there were some objections raised by the Defendant No.1
that one Mr. Mahesh Thakkar had misused its IEC (Import Export Code)
and imported the goods without its permission. The Defendant No.1
delayed in filing the written statement and costs also were imposed. Finally,
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the written statement was taken on record vide order dated 23 February,
2017.
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7. On 14 September, 2018, a new counsel was engaged and
adjournment was sought to seek instructions.
8. In the written statement, the basic case made out by the Defendant
No.1 was that one Mr. Mahesh Thakkar had fraudulently misused the IEC of
Abhay Enterprises. It is claimed that the said Mr. Mahesh Thakkar was the
one who had imported the products. In paragraph 1 of the reply on merits,
the Defendant No.1 stated as under:
“ To this, answering Defendant has already stated that
it is neither disputed nor the legality of the trademark
has been challenged by the answering Defendant at
any occasion. The trademark of GLAM-UP LABEL has
never been used by answering Defendant in any
manner and thus rights associated with the trademark
have not been infringed as alleged by the Plaintiff. ”
9. Today, learned counsel appearing for Defendant No.1 submits that as
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per the show cause notice issued by the customs authorities on 17
September, 2014, it is clear that there were several other goods apart from
GLAM-UP products, which are part of the consignment and huge losses
have been suffered by the Defendant. She, however, submits that she has no
objection if a permanent injunction is passed against her client. However, it
CS (COMM) 1417/2016 Page 3 of 7
is submitted by her that the Defendant No.1, being a small entity, ought not
to be burdened with any damages.
10. Learned counsel for the Plaintiff, on the other hand, submits that a
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perusal of the seizure memo issued by the customs authorities dated 15
May, 2014 shows that the value of the seized products i.e. 14,400 pieces is
more than Rs.23 lakhs. The Plaintiff was forced to give a bank guarantee to
the customs to the tune of Rs.5,93,560/- as a security for getting the goods
seized. The Defendant No.1 is a habitual infringer and is also involved in
importing various other counterfeit products.
11. This Court has perused the pleadings and documents on record. There
is no doubt that the competing mark and label cartons are absolutely
identical. The same are extracted herein below:
PLAINTIFF’S MARK DEFENDANT’S MARK
CS (COMM) 1417/2016 Page 4 of 7
12. In the written statement, Defendant No.1 denies his involvement in
the imports and appears to be shifting the blame to a third party, however,
this Court is not going into the said issue, as the said third party is not before
this Court. Admittedly, the name of Abhay Enterprises i.e. Defendant No.1
appears as the importer with the customs authorities which is evident from
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the show cause notice dated 17 September, 2014 as also from the seizure
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memo dated 15 May, 2014. Both documents are on record. The
consignment, in respect of which the show cause notice was issued, appears
to have various other products including silver jewellery, mobile
accessories, etc. The present dispute does not relate to any of those
products. In the present case, the Court is concerned only with the products
under the name and label GLAM-UP.
13. This is a case of res ipsa loquiter . The violation of the rights of the
Plaintiff is writ large even on a perusal of the carton and products‟
packaging. Such import of counterfeit products cannot be countenanced in
any manner. If such imports are permitted, they would cause huge losses to
trademark owners, especially since markets would be flooded with such
passed off products. Apart from the fact that this has resulted in serious
violation of rights, there is also an issue in respect of the quality of such
products, especially cosmetics, which are used on the skin. The imported
products do not go through the same quality control measures and thus, can
prove to be harmful for the skin. Such imports are also likely to result in
severe damages and losses to the owners of the intellectual property and as
also the consumers. It is in order to protect against such misuse and harm
that the Intellectual Property Rights (Imported Goods) Enforcement Rules,
2007 have been introduced. The customs authorities were right in calling
CS (COMM) 1417/2016 Page 5 of 7
upon the owner as per the Rules and detaining the infringing products. The
Defendant No.1 having now agreeing not to import, manufacture or use the
infringing mark, carton and get up under the name/packaging GLAM-UP,
the permanent injunction, as prayed for, is liable to be granted.
14. No triable defence exists in favour of Defendant No.1. As per the
provisions of The Commercial Courts, Commercial Division and
Commercial Appellate Division of High Courts Act, 2015 and the Delhi
High Court (Original Side) Rules, 2018 it is not necessary that evidence
should be recorded in every suit. In the present case, right from beginning
the Defendant No.1 has made a statement that he is willing to give an
undertaking to not manufacture, sell or import these products. Thus, the
only issue which remains is that of damages. Since Defendant No.1 has not
disclosed his accounts or sale figures, keeping in mind the value of
consignment i.e. approximately Rs.25 Lakhs, the suit of the Plaintiff is
decreed for a sum of Rs.5 Lakhs which is 20% of the value of the
consignment. Decree in terms of paragraph 30(a) be drawn up. In addition,
a decree of Rs.5 Lakhs as damages is also granted in favour of the Plaintiff
against the Defendant no.1.
15. The Defendant Nos.2 & 3 i.e. the customs authorities are directed to
release the bank guarantee furnished by the Plaintiff in respect of this
consignment and to also hand over to the Plaintiff the 14,400 pieces of
GLAM-UP LABEL powder cream to the Plaintiff for the purpose of
destruction and erasure.
16. Other products of the Defendant No.1, which have been seized by the
customs authority, if any, may be released to the Defendant No.1 through its
authorized signatory.
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16. The suit is decreed in the above terms. No orders as to costs.
PRATHIBA M. SINGH, J.
JUDGE
OCTOBER 01, 2018/ dk
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