M/S Avantika Elcon Private ... vs M/S Ajit Industries Pvt. Ltd.
2018 Latest Caselaw 7597 Del

$~37
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
                                        Date of decision: 21st December, 2018
+        CS (COMM) 1150/2018, I.As. 13314/2018 & 13315/2018
       M/S AVANTIKA ELCON PRIVATE LIMITED           ..... Plaintiff
                    Through: Mr. Sanjeet K. Singh, Advocate with
                             Mr. Vinod Aggarwal, Director in
                             person. (M:9868588173)
                    versus

       M/S AJIT INDUSTRIES PVT. LTD.                ..... Defendant
                      Through: Mr. Kamal Mehta and Mr. Sudeep
                                Singh, Advocates. (M:9810249271)
       CORAM:
       JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)

1. Present suit for permanent injunction restraining passing off of trademark, copyright etc., has been filed by the Plaintiff claiming rights in the mark "MNTECH AELCON" & "MNTECH C AELCON". The stand of the Plaintiff in the plaint is that it is the owner of the said two trademarks since 2012, which are used in respect of Retro Reflective Conspicuity Tapes used for road safety night visibility on commercial vehicles. The pleaded case in the plaint in paragraphs 6 & 7 is as under:

"6. That accordingly after obtaining approval, the plaintiff, engaged one Korean company namely M/s Miraenanotech Co. Ltd. to manufacture and supply the Retro-Reflective Conspicuity Tapes under the mark MNTECH AELCON and accordingly the said company had to manufacture the Retro-Reflective Conspicuity Tapes under the mark MNTECH AELCON for the plaintiff and export the same in India to the plaintiff. It was also informed by the plaintiff to the said Korean

Company that the products manufactured by them would require safety purpose certification from the authorized testing agency in India and only thereafter the products could be sold in India. The plaintiff company had also intimated the Korean company about the specification of goods to be manufactured and supplied by the said company in terms of the guidelines issued by the Ministry of Shipping Road Transport and Highways.

7. In October, 2017 the said Korean company without assigning any reasons unilaterally stopped manufacturing of the said products for the plaintiff."

2. The relief prayed for in the plaint is against the Defendant - M/s. Ajit Industries Pvt. Ltd. on the ground that the Defendant has started selling the products under the name "AIPL MNTECH", which is deceptively similar to "MNTECH AELCON".

3. When the matter was listed on the first date i.e. 28th September, 2018, the following order was passed.

"I.A. 13314/2018 (U/o XXXIX RULE 1 and 2 CPC & I.A. 13315/2018 (U/O XXVI Rule 9 CPC)

9. Issue notice. The Plaintiff has filed the present suit seeking protection of its trademark MNTECH. The Plaintiff is engaged in the business of marketing and selling of Retro Reflective Conspicuity Tapes, under the trademark/names/logo MNTECH AELCON and MNTECH C AELCON. The same are reflective tapes which are affixed on commercial vehicles for safety purposes during night period and to improve night visibility. Mr. Anil Sapra, Ld. Senior Counsel for the Plaintiff submits that the Plaintiffs products were recognized by the Ministry of Road and Transport in the year 2013 and has also been thereafter approved by the transport authorities in various States.

10. Mr. Sapra submits that Plaintiff has initially had an arrangement with a Korean company which was thereafter stopped in October, 2017. It is the case of the Plaintiff that the logo MNTECH AELCON is registered with the Copyright Authorities. The trademark, however is pending registration.

11. The Defendant has recently commenced use of the MNTECH logo and mark along with the mark AIPL. The Court has been shown the physical Retro Reflective Conspicuity Tapes and the use of the by the Defendant is identical to that of the Plaintiff. For the time being, however, this Court is inclined to appoint a Local Commissioner to undertake the following:

a) An inventory of the stocks may be prepared, however, there shall be no seizure of the same.

b) Account books shall be inspected in order to ascertain since when the Defendant is carrying on business as well as the accounts relating to sale of the Plaintiff tapes.

c) To ascertain whether the Defendant Company is approved by the Central Transport Ministry and State Transport Agencies;

d) Whether the Defendant has any arrangement with the Korean Company;

12. List before Court on 29th October, 2018.

13. Mr. Arjun Bhaskar, Advocate (M-9711285445) who is present in Court is appointed as Local Commissioner to visit the premises of the Defendant at Khasara No. 114-115, Auchandi Kharikhoda Road, Saidpur, Sonepat-131402, Near Saipur Police Chowkey. The fee of the Local Commissioner is fixed at Rs.l lakhs to be paid by the Plaintiff. The Commissioner is permitted to seek police assistance and take photographs if needed. A representative of the Plaintiff and one counsel is permitted to accompany the Local commissioner. The Local Commissioner

shall serve the complete paper book to the Defendant who shall file a reply before the next date.

14. Let the report of the Local Commissioner be filed within two weeks. List on 29th October 2018."

4. Thereafter the Defendant has filed the written statement and the Local Commissioner has also filed his report. In the report of the Local Commissioner, it has been clearly stated that the Defendant company is doing business with a Korean company by the name MNTECH Global Company Limited since 20th February, 2018.

"That upon being asked, it has been further stated by Mr. Deepak Kumar that the Defendant Company has been doing its business with a Korean Company namely MNTECH Global Co. Ltd. since 20.02.2018 and from the said Korean Company, the Defendant Company imports the above mentioned Retro Reflective Conspicuity Tapes with the logo of MNTECH as well as "AIPL" on the said tapes and sell the same in the Indian Market. To ascertain the said statement made by Mr. Deepak Kumar, the Undersigned asked to Mr. Deepak Kumar to produce the account ledger maintained by the Defendant Company in the name of the above said Korean Company, MNTECH Global Company Ltd."

5. Thereafter, the Defendant filed its written statement. Along with the same, a copy of the Agency Agreement executed between the Plaintiff and the Korean company is placed on record. As per the said Agency Agreement dated 28th October, 2013, the Plaintiff acknowledged that the trademark "MNTECH" belongs to the Korean company, which is clear from a reading of the clause 1.1 (l) defining the term `trademark', clause 8.4 and clause 12. The relevant clauses read as under:

"1.1 (l) "Trade-mark" means all the trade-marks and

trade names, whether or not registered or not registered, which are owned and used by or under license from MNTECH and which appear on the Product including without limitation, the trade-marks "Aelcon AIS090Mntech"

"8.4 MNTECH shall retain title to all Product registrations and Trade-marks."

12. TRADE-MARKS 12.1 The Product will be marketed and sold by AVANTIKA solely under the Trade-marks, ""avantikaAIS090mntech" AVANTIKA will not alter, obscure, remove, cancel or otherwise interfere with any markings (including without limitation any Trade- marks, logos, trade names or trading style of MNTECH) and other indications of origin, which may be placed on Product."

The above Agency Agreement which was a crucial document was not mentioned or pleaded in the plaint. In fact, an impression to the contrary, that the mark was actually conceived and belonged to the Plaintiff, is sought to be given in the Plaint.

6. Further, the said Agency agreement was terminated by the Korean company and the Plaintiff filed a Section 9 petition seeking interim reliefs against the grant of agency to the Defendant herein. Specific restraint orders were sought in the following terms.

"a. pass an order thereby restraining the Respondent, its successors, employees, representatives, assigns etc. from entering into any agreement with any other third party for the products i.e.. Retro Reflective Conspicuity Tapes for which approval have been obtained by the Petitioner Company; and b. in the- alternative and without prejudice to the prayer clause (a), as detailed hereinabove, in the event

of Respondent Company having already entered into an Agreement with a Third Party including- M/s. Ajit Industries Pvt. Ltd., an order is liable to be passed thereby restraining the Respondent Company, its employees, representatives, assigns, successors, etc. from selling its products, including Retro Reflective Conspicuity Tapes in India, either directly or by entering into any Agreement with any third party, including M/s. Ajit Industries Pvt. Ltd.;"

7. The prayer made above clearly shows that the Plaintiff was well aware of the Agency granted to the Defendant and in fact sought a restraint against the same. The said Section 9 petition came to be considered by a learned Single Judge of this Court and vide order dated 3 rd August, 2018, the petition was dismissed. Even the filing of this petition and the restraint order sought against the Defendant herein i.e. M/s. Ajit Industries Pvt. Ltd. was not disclosed to the Court in the plaint.

8. Considering this position, this Court had, on 29th October, 2018 directed the presence of Mr. Vinod Aggarwal, Director of the Plaintiff, who had signed and verified the plaint. Mr. Vinod Aggarwal is present today in Court and his statement has been recorded wherein he admits the existence of the Agency Agreement dated 28th October 2013 and also the filing of the Section 9 petition. Clearly, the Plaintiff is guilty of the grossest form of suppression and concealment. The Plaintiff is also guilty of misleading this Court. The entire plaint proceeds on the presumption that "MNTECH" is a trademark belonging to Plaintiff. No disclosure was made that the trademark "MNTECH" belongs to the Korean company and that the Defendant has a separate Agency Agreement with the Korean Company. These facts have come to the knowledge of this Court in view of the Local Commissioner's

report and the written statement/documents filed by the Defendant.

9. The Plaintiff further shows no remorse. In the replication, the Plaintiff has reiterated the stand taken in the Plaint. Considering the above facts and circumstances and the gross suppression, which the Plaintiff has resorted to, the suit is not liable to be entertained and the same is liable to be dismissed with costs. The suppression is deliberate. Under these circumstances, costs of Rs.2 lakhs are imposed upon the Plaintiff to be deposited with the Delhi High Court Advocates' Welfare Trust within four weeks.

10. Suit stands dismissed. All the pending I.As. also stand disposed of. List on 12th February, 2019 for Plaintiff to report on the compliance of paying the costs.

CRL.M.A. 47660/2018

11. List on 12th February 2019.

PRATHIBA M. SINGH JUDGE DECEMBER 21, 2018/dk