Unclean Hands and Lack of Established Goodwill Disentitle Prior User from Discretionary Interim Injunctive Relief

The Appellant manufactures packaged water in tetra packs under marks including "MORE THAN WATERBOX" and "WATERBOX IS THE RIGHT CHOICE," claiming use since 2018 through a predecessor.

In 2026, the Appellant sued the Respondent for passing off after discovering the Respondent’s registration of the mark "MY WATER BOX".

The Single Judge denied an absolute injunction, finding the Appellant failed to establish prima facie goodwill, largely due to "doubtful" invoices from 2020 and a lack of continuous use.

The Single Judge imposed a "limited injunction" restricting both parties to sales within their respective home states (Gujarat and Maharashtra); both parties appealed—the Appellant seeking a pan-India injunction and the Respondent (via cross-objections) seeking to vacate the territorial restraint.

1. Whether the Appellant established a prima facie case of reputation and goodwill necessary to maintain an action for passing off.

2. Whether the Appellant's conduct, specifically the submission of potentially fabricated documents and misleading statements regarding licensing, disentitles it to discretionary interim relief.

3. Whether the "territorial restraint" imposed by the Single Judge was legally sustainable after a finding that no prima facie case was established.

The Court applied the principles of appellate interference in discretionary orders established in Wander Ltd. v. Antox India (P) Ltd., which mandates that appellate courts should not substitute their view unless the lower court’s discretion was exercised arbitrarily or perversely.

Regarding passing off, it emphasized the "classical trinity" (goodwill, misrepresentation, and damage) as reinforced in Pernod Ricard India (P) Ltd. v. Karanveer Singh Chhabra.

The court also applied the equitable maxim "he who seeks equity must come with clean hands," citing Tommorroland Limited v. HUDCO, which denies relief to parties who conceal material facts or beguile the court.

The court found the Appellant’s 2020 invoices inherently unreliable due to incorrect HSN codes and lack of GST records, supporting the Single Judge’s doubt regarding prior user claims.

Critically, the Appellant misled the Court by claiming a Central FSSAI license application was pending when it had already been rejected; the court determined that such "unclean hands" disentitle a party to discretionary relief.

The court noted the Respondent also relied on ex facie fabricated photographs and invoices before the Trademark Registry to claim a 2020 user date.

The court agreed that the word "WATERBOX" is descriptive/non-distinctive for water in a box and since the Appellant failed to prove substantial goodwill (with sales only becoming regular in late 2024), the Single Judge’s refusal of an absolute injunction was affirmed.

The Court held that both parties be released from the state-wise sales restrictions but restrained the Respondent from relying on its "MY WATER BOX" registration against any third party during the suit's pendency due to its "deplorable" conduct before the Registry.