1. This is an application seeking revocation of dispensation granted to the
Settlement under section 12A of the Commercial Courts Act 2015.
2. The suit is for infringement and passing off. The plaintiffs are the owners
and registered proprietors of the mark "Ralli" "Ralli Engine" "Ralli Sprayer"
and "Ralli Agricultural Machines" (word as well as the device) under classes
7 and 8 respectively without any limitation or condition. The grievance of
the plaintiffs is against the defendant no.2 having obtained registration of a
deceptively similar mark " " (device) in class 7.
3. The relevant averments in the plaint for obtaining dispensation under
section 12A of the Act are as follows:
21. "In or about May, 2024, the plaintiffs were "informed by the
industry sources particularly, manufacturers, dealers and traders that
the defendant/respondent no. 1 has adopted the mark " "as a
part of its trade name and/or corporate name and is carrying on
identical business of manufacturing, trading and selling of agricultural
machine tools and sprayers and/or its allied products by wrongfully
and illegally using the registered mark of the petitioners "RALLI."
64. "The instant suit is for infringement of trade mark and passing off,
which contemplates urgent reliefs to protect the interest of the
plaintiffs. The Trade Marks Act, 1999 makes it abundantly clear that it
is the option of the plaintiffs to seek urgent interim reliefs which
includes injunction, together with orders for delivery up of the label
and mark and destruction thereof, at the interim stage. The plaintiffs
are entitled to ex-parte order of injunction and other interlocutory
orders namely, discovery of documents, preserving of infringing goods
and other evidences which are related to the subject matter of the suit,
and also restraining the defendants and/or their men, servants
agents, assigns, dealers and distributors and/or anyone claiming on
their behalf, from dealing with their assets and properties which
adversely affect the plaintiffs' ability to recover damages, costs and
other pecuniary remedies that would be finally awarded to the
plaintiffs in the suit. The cause of action of the plaintiffs against the
defendant is a recurring or continuous one, and each sale and/or
attempt to sale the impugned products of the defendants, affords a
fresh cause of action to the plaintiff. It has been judicially recognized
by the Hon'ble Supreme Court of India that once a case of infringement
and passing off is made out, the Court should pass a prompt order of
ex-parte injunction followed by an order of appointment of a
Commissioner, and the absence of such orders would occasion a
failure of justice and such injury to the plaintiffs as would not be
capable of being undone at a later stage. Besides, it is all the more
incumbent on this Hon'ble Court to allow the leave under Section 12A
of the Commercial Courts Act, 2015 and restrain the defendants, who
are fly by night operators and whose continuing acts of infringement
and/or passing off have diluted and tarnished and/or are capable of
diluting and tarnishing the reputation of the plaintiffs' well known
trade mark, and such acts involve the larger interest of the
customers/consumers of the plaintiffs' product under the marks
"RALLI", "RALLI ENGINE". "RALLI SPRAYER" and "RALLI
AGRICULTURAL MACHINES" in question. Hence, the suit contemplates
urgent interim reliefs for the protection of the plaintiffs' statutory and
common law rights, and also in order to avoid confusion, deception,
unfair and fraudulent practices in the market place, and unless such
urgent reliefs are granted, the plaintiffs shall suffer irreparable loss,
prejudice and injury. In such circumstances, there is no possibility of
pre-suit mediation and the plaintiffs are beseeching this Hon'ble Court
to dispense with the provisions of Section 12A of the Commercial
Courts Act, 2015.
4. Upon filing of the suit, by an order dated 30 September 2024, the plaintiffs
obtained dispensation of Pre-Institution, Mediation and Settlement under
section 12A of the Act.
5. On behalf of the defendants it is contended that the plaintiffs have
deliberately misrepresented and suppressed the true and correct facts as
to knowledge of the impugned mark. The plaintiffs were aware that the
defendants had been selling goods under the impugned mark as far back
as in December 2018. This would be evident from the promotional
materials pertaining to an Industrial Trade Fair and Exhibition Kishan
Mela held at Moshi, Pune between 12 and 16 December 2018. The
documents relied on by the defendants indicate that the plaintiffs had
participated at the said exhibition and had notice and knowledge of the
rival goods being sold under the impugned mark. The defendants also rely
on a series of WhatsApp messages dated 9 March 2022 exchanged
between an employee of the plaintiffs, which reveal that while in service in
the Production Management Team of the plaintiffs, the said employee had
in the usual course of business, dealt with and exchanged specific
information pertaining to the products of the defendants being sold under
the impugned mark. Accordingly, the averment in the plaint that the
plaintiffs only came to learn of the impugned mark in May 2024, is ex
facie false and incorrect. In such circumstances, the plaintiffs have
fabricated a false sense of urgency in order to mislead this Hon'ble Court
into permitting the plaintiffs to institute the suit without exhausting the
remedy of Pre-Institution Mediation and Settlement. In support of such
contentions, the defendants rely on the decisions in SRMB Srijan Pvt. Ltd.
vs. B.S. Sponge Pvt. Ltd. APO 157 of 2023, Sanjay Kumar Mishra vs.
Godavari Commodities Ltd. GA No.2 of 2023 in C.S. No. 267 of 2022,
Proactive Ship Management vs. Owners and Parties Interested in the Vessel
Green Ocean (2024) SCC OnLine Cal 1838.
7. On behalf of the plaintiffs, it is submitted that the catalogue pertaining to
the Kisan Mela relied on by the defendants indicates that the same had
been conducted in the name of Karan Enterprises and not in the name of
either of the defendants. There is no mention of " " in any of the
materials. A stall of the respondent no.2 in the name of Karan Enterprises
does not imply that the plaintiffs would necessarily have any knowledge of
the existence of the goods being sold by the defendants under the
impugned mark. Insofar as the WhatsApp messages relied on by the
defendants are concerned, the plaintiffs contend that the said employee
has long left the services of the plaintiffs. In any event, knowledge of an
employee of the plaintiffs cannot be deemed to be knowledge of the
plaintiffs. In support of such contentions, the plaintiffs rely on the
decisions in Yamini Manohar vs T.K .D Keerthi, (2024) 5 SCC 815, Dr
Reddy Laboratories Limited vs Smart Laboratories Pvt. Ltd. (2023)
SCCOnline Del 7276, Ultra Media Entertainmentr pvt Ltd. vs Y-Not Films
LLP & Anr (2024) SCC Online Bom 3085, Quality Services & Solution Pvt
Ltd & Ors vs QSS Inspection & Testing Pvt Ltd.,Chemco Plastic Industries
Pvt. Ltd vs. Chemco Plast (2024) SCC OnLine Bom 1607 and Novex
Communications Pvt. Ltd. vs. Goregoan Sports Club (2024) SCC OnLine Bom
3476.
8. Section 12A of the Commercial Courts Act, 2015 is as follows:
"12A. Pre-Institution Mediation and Settlement--
(1) A suit, which does not contemplate any urgent interim relief under this
Act, shall not be instituted unless the plaintiff exhausts the remedy of
pre-institution mediation in accordance with such manner and
procedure as may be prescribed by rules made by the Central
Government.
(2) The Central Government may, by notification, authorise the Authorities
constituted under the Legal Services Authorities Act, 1987 (39 of
1987), for the purposes of pre-institution mediation.
(3) Notwithstanding anything contained in the Legal Services
Authorities Act, 1987, the Authority authorised by the Central
Government under sub-section (2) shall complete the process of
mediation within a period of three months from the date of application
made by the plaintiff under sub-section (1):
Provided that the period of mediation may be extended for a further
period of two months with the consent of the parties:
Provided further that, the period during which the parties remained
occupied with the pre-institution mediation, such period shall not be
computed for the purpose of limitation under the Limitation Act, 1963
(36 of 1963).
(4) If the parties to the commercial dispute arrive at a settlement, the
same shall be reduced into writing and shall be signed by the parties
to the dispute and the mediator.
(5) The settlement arrived at under this section shall have the same
status and effect as if it is an arbitral award on agreed terms under
sub-section (4) of section 30 of the Arbitration and Conciliation Act,
1996 (26 of 1996).]"
9. In Yamini Manohar vs. T.K.D. Keerthi, 2023 SCC OnLine SC 1382, it has
been held as follows:
10. We are of the opinion that when a plaint is filed under the CC Act,
with a prayer for an urgent interim relief, the Commercial Court should
examine the nature and the subject-matter of the suit, the cause of
action, and the prayer for interim relief. The prayer for urgent interim
relief should not be a disguise or mask to wriggle out of and get over
Section 12-A of the CC Act. The facts and circumstances of the case
have to be considered holistically from the standpoint of the plaintiff.
Non-grant of interim relief at the ad interim stage, when the plaint is
taken up for registration/admission and examination, will not justify
dismissal of the commercial suit under Order 7 Rule 11 of the Code; at
times, interim relief is granted after issuance of notice. Nor can the suit
be dismissed under Order 7 Rule 11 of the Code, because the interim
relief, post the arguments, is denied on merits and on examination of
the three principles, namely: (i) prima facie case, (ii) irreparable harm
and injury, and (iii) balance of convenience. The fact that the court
issued notice and/or granted interim stay may indicate that the court
is inclined to entertain the plaint.
11. Having stated so, it is difficult to agree with the proposition that
the plaintiff has the absolute choice and right to paralyse Section 12-A
of the CC Act by making a prayer for urgent interim relief. Camouflage
and guise to bypass the statutory mandate of pre-litigation mediation
should be checked when deception and falsity is apparent or
established. The proposition that the Commercial Courts do have a
role, albeit a limited one, should be accepted, otherwise it would be up
to the plaintiff alone to decide whether to resort to the procedure under
Section 12-A of the CC Act. An "absolute and unfettered right"
approach is not justified if the pre-institution mediation under Section
12-A of the CC Act is mandatory, as held by this Court in Patil
Automation [Patil Automation (P) Ltd. v. Rakheja Engineers (P) Ltd.,
(2022) 10 SCC 1 : (2023) 1 SCC (Civ) 545] .
10. In view of the above, there is limited scope for a Court to examine the
grounds for revocation of dispensation with the requirement of Pre-
Institution Mediation and Settlement. Section 12A of the Act is imperative
and any suit which is instituted without following the mandate of the Act
has necessarily to be rejected. This is no longer res integra. [Patil
Automation vs. Rakheja Engineers (P) Ltd. (2022) 10 SCC 1, Laxmi Polyfab
Pvt. Ltd. vs. Eden Realty Ventures Pvt. Ltd. AIR 2021 Cal 190.] It is too late
to question whether in all cases mediation is a viable or practical option.
The legislative intent is explicit and clear. As a consequence, every
plaintiff is obliged to be vigilant or on the qui vive in seeking redressal of
their grievances. The plaintiff though dominus litus cannot escape the
mandatory requirement of the Act. In order to seek dispensation with the
requirement of Pre-Institution Mediation and Settlement, the plaint must
contemplate grant of urgent interim reliefs. This needs to be pleaded and
must appear from the plaint alongwith the supporting facts and
documentary evidence available to the Court at that stage. The narrow
compass in Yamini Manohar (Supra) which has been left open are in those
cases where a plaintiff seeks to artificially or falsely create urgency only to
circumvent the requirement of Pre-Institution Mediation or Settlement. In
cases where the request for urgent interim reliefs as pleaded in the plaint,
is not tainted nor artificial, ordinarily the Court must defer to the
perception of the plaintiffs that is the need for urgent reliefs. A fortiori
there cannot be any deception, falsehood or suppression in pleading
urgency in order to obtain dispensation under section 12A of the Act. (Dr.
Reddys Laboratories Ltd. vs. Smart Laboratories Pvt. Ltd. (2023) SCC
OnLine Del 7276).
11. There can be no straight jacket formula in such cases. Each case depends
on its facts. It is true that the section does not provide for any exemption
to any particular class or category of suits, save and except those where
the plaint contemplates urgent reliefs. Ordinarily, in intellectual property
matters keeping in mind the question of public interest, nature of the rival
rights or competing interests involved, the need for urgent interim reliefs is
almost inevitable. However, this is not an inflexible rule nor an exception
to the mandatory provisions under section 12A of the Act. It is also true
that the cause of action in such cases is recurring and continuing in
nature. Nevertheless, this has to be tested in the backdrop of when the
right to sue accrues. [Sundaram Finance Ltd. vs. Noorjahan Beevi & Anr.
(2016) 13 SCC 1]. The mandatory obligation under section 12A of the Act
cannot be bypassed in a circuitous manner to render the same nugatory
and ineffective.
12. The crucial aspect which needs to be examined is the knowledge of the
defendants' adoption and use of the impugned mark " " in the
light of the averments in the plaint. Admittedly, the parties are trade rivals
carrying on similar business. Both are registered proprietors of their
respective marks. It is also true that an exhibition displaying the rival
products in the same category of goods was held between 12 to 16
December 2018 at Moshi, Pune. This fact is also mentioned by the
plaintiffs albeit for a different purpose. The exhibition was attended by
both parties. The goods being sold under the impugned mark were on
display. It is true that, at that point of time, the impugned mark belonged
to "Karan Enterprises" prior to the change in favour of the defendant no.1
in July 2020. However, this does not mean that the plaintiffs could not
have had any knowledge of the existence of the impugned mark " "
which had already been launched and the products were available in the
market. In any event, the WhatsApp messages exchanged between an
employee of the plaintiffs, and an authorized dealer Express Agri, seeking
specific information and details of spare parts for agricultural machines
which were being sold and imported by the defendants under the
impugned mark is conclusive. Accordingly, the plaintiffs are deemed to
have had knowledge of the impugned mark " " being in the market
long prior to May 2024. The contention that knowledge of an employee is
not attributable to the plaintiffs is unsubstantiated and without basis. In
this regard, the decision in Apollo Tyres Ltd. vs. Pioneer Trading
Corporation & Anr. 2017 SCC OnLine Del 9825 is distinguishable. In the
said decision, the Court had found that the facts which had not been
disclosed were trivial, inconsequential and did not fundamentally alter the
case.
13. In such circumstances, the assertion in the plaint of the plaintiffs having
come to learn of the impugned product in May 2024 is patently false. A
party litigant cannot be indifferent and negligent in its duty to place all
relevant documents and materials in support of its contention and is
bound to produce the same. One who comes to Court must come with
clean hands. Non-mentioning and non-production of the true and correct
information pertaining to the Kisan Mela or the WhatsApp messages and
the documents in support thereof tantamounts to material suppression
and in effect playing fraud on the Court. [S.J.S. Business Enterprises (P)
Ltd. vs. State of Bihar & Ors. (2004) 7 SCC 166 and Mayar (H.K.) Ltd. &
Ors. vs. Owners & Parties, Vessel M.V. Fortune Express & Ors., (2006) 3
SCC 100.]
14. Both the above facts are material and germane on the aspect of knowledge
of the impugned mark and suppression thereof can only be with the aim
of wriggling out of the mandatory requirement under section 12A of the
Act. Concealment of material facts disqualifies any litigant from obtaining
relief. In the bargain, the plaintiffs have deprived themselves of an
opportunity of providing any explanation or justification whether
believable or not either in the plaint or the petition.
15. In S.J.S. Business Enterprises (P) Ltd. (Supra) it has been held as follows:
"13. As a general rule, suppression of a material fact by a litigant
disqualifies such litigant from obtaining any relief. This rule has been
evolved out of the need of the Courts to deter a litigant from abusing
the process of Court by deceiving it. But the suppressed fact must be a
material one in the sense that had it not been suppressed it would
have had an effect on the merits of the case. It must be a matter which
was material for the consideration of the Court, whatever view the
Court may have taken...."
16. It is true that in someways the exercise undertaken by a Court while
examining the revocation with the requirement of Pre Institution,
Mediation and Settlement is akin to hearing a demurrer application.
[Indian Mineral & Chemicals Co. and Ors. vs. Deutsche Bank (2004) 12
SCC 376, Exphar Sa and Anr. vs. Eupharma Laboratories Ltd. and Anr.
(2004) 3 SCC 688 and D Oceanic Dolphin Apparels Pvt. Ltd. vs. Leather Co.
and Ors. (2024) SCC OnLine Del 6207]. Nevertheless, in the light of the
principle that fraud unravels all, any material fact or document which is
alleged to have been suppressed can always be looked into by the Court to
ascertain whether or not there has been fraud on Court. [S.P.
Chengalvaraya Naidu v. Jagannath, (1994) 1 SCC 1, State of A.P. v. T.
Suryachandra Rao, (2005) 6 SCC 149 and Amar Singh vs. Union of India
and Others (2011) 7 SCC 69.]
17. The ground that the plaintiffs had waited for 5 months before filing of the
suit and this fact per se disentitles them to seek dispensation under
section 12A of the Act is untenable and rejected. Whether there exists the
need for urgent interim reliefs or not is required to be examined in the
totality of circumstances. There must be a holistic approach. The fact that
there is merely a time gap between the knowledge of infringement of rights
or breach of obligation and the institution of the suit is not the only
parameter which determines whether the suit contemplates urgent interim
reliefs or not. In such circumstances, various factors come into play,
including the relative position of the parties, the subsequent events which
have transpired during the interregnum and the conduct of the parties. A
finding cannot necessarily be based merely on the interval or time gap
between the knowledge of the infringement and the institution of a suit.
This cannot be determined in isolation. The entitlement to reliefs or the
merits of whether Ralli and " " are phonetically similar is also
irrelevant for the limited enquiry of finding as to whether on the basis of
the materials on record, the plaint indeed contemplates urgent interim
reliefs. This exercise also does not involve a mini trial. Ultimately, there
must be deference to the plaintiff subject to the limited exception in Yamini
Manohar (Supra). [Chemco Plastic Industries Pvt. Ltd. vs. Chemco Plast 2024
SCC OnLine Bom 1607, Quality Services & Solutions Pvt. Ltd and Ors. vs.
QSS Inspection and Testing Pvt. Ltd and Ors. (2024) SCC OnLine Bom 2120].
18. In view of the above, the non-mentioning of the true and material facts i.e.
Kisan Mela or the WhatsApp messages by the plaintiffs is a clear attempt to
suppress and misrepresent facts. The statement in the plaint that the
plaintiff only came to learn of the impugned mark in May 2024 is ex facie
false, incorrect and with the intent to bypass the mechanism of section 12A
of the Act. The dispensation with the requirement of Pre-Institution
Mediation and Settlement granted in terms of the order dated 30
September 2024 stands revoked. There shall be an order in terms of
prayers (a) and (b) of the Master's Summons in GA-COM 3 of 2024. The
plaint filed in IP COM 31 of 2024 stands rejected. Consequently, all interim
orders are vacated. GA-COM No.3 of 2024 and GA-COM No.2 of 2024 i.e.
for vacating of the interim order stands allowed. IP-Com/31/2024
alongwith GA-COM No.1 of 2024 seeking interim orders stand dismissed.
(Ravi Krishan Kapur, J.)
Later:
After pronouncement of the judgment, the plaintiffs pray for stay.
The prayer for stay is considered and rejected.
(Ravi Krishan Kapur, J.)
