Infringing liquor constitutes "counterfeit liquor" under the Excise Act and cannot be released for commercial sale.

The Plaintiff, proprietor of the trademark "OLD FORESTER," filed a suit for permanent injunction against the Defendant for importing and selling "OLD FORESTER BLENDED RESERVE WHISKY" manufactured by a Nepalese entity, M/s Yeti Distillery

On 22.12.2025, the Court granted an ex-parte ad-interim injunction and appointed a Local Commissioner, who seized 3,464 boxes of the product and released them on superdari to the Defendant

The Defendant filed I.A. 2059/2026 under Section 151 of the CPC seeking permission to sell the seized stock and import an additional 2,600 boxes to fulfill contractual obligations with the Delhi Government, citing potential blacklisting and financial penalties

1. Whether the Court can permit the sale and further import of goods that prima facie infringe a registered trademark based on contractual or financial exigencies

2. Whether imported liquor infringing a registered trademark is classified as "counterfeit liquor" under the Delhi Excise Act, 2009

3. Whether Section 151 of the CPC can be invoked to grant relief that overrides express statutory prohibitions

The Court applied Sections 29(2)(c), 29(3), and 29(6)(c) of the Trade Marks Act, 1999, which establish that the import of goods under a registered mark without the consent of the proprietor constitutes infringement

It further relied on Section 2(16) of the Delhi Excise Act, 2009, which defines "counterfeit liquor" as any liquor involved in a violation of rights under the Trade Marks Act

The Court applied the principle from Kapil Wadhwa v. Samsung Electronics Co. Ltd., holding that even the import of genuine goods under a mark registered to a third party in India constitutes infringement

Regarding inherent powers, it followed State of Uttar Pradesh v. Roshan Singh, holding that Section 151 of the CPC cannot be used to override express statutory provisions or procedural safeguards

The Court determined that Section 29(6)(c) of the Trade Marks Act explicitly prohibits the import of infringing goods to prevent importers from profiting from registered marks without authorization

By harmonizing this with Section 2(16) of the Delhi Excise Act, the Court concluded that any liquor infringing a trademark is "counterfeit liquor" by statutory definition, regardless of whether the import formalities were otherwise compliant

The Court distinguished the precedent in Alkem Laboratories Ltd. v. Laborate Pharmaceuticals, noting that while that case permitted the sale of infringing medicines in the "public interest," the present case involves liquor—a non-essential product—where the Plaintiff vehemently disputes the quality and alleges counterfeiting

The Court reasoned that financial hardship or contractual penalties do not entitle a party to commit trademark infringement, as such a premium on illegal acts is impermissible in commercial law

It held that granting such a request would violate the express proscriptions in the Trade Marks Act and the Delhi Excise Act

The Court clarified that these observations were limited to the interlocutory application and did not constitute a final expression on the merits of the suit