The Hon'ble Delhi High Court in KG Marketing India v. Ms. Rashi Santosh Soni & Anr. (CS(COMM) 18/2023) and Rashi Santosh Soni & Anr. v. KG Marketing India (CS(COMM) 477/2023), dated July 2, 2024, dismissed the suit filed by KG Marketing and decreed the suit filed by Rashi Santosh Soni. The Court found that KG Marketing had fabricated newspaper advertisements to falsely claim prior use of the trademark "SURYA GOLD". The Court ordered filing of a complaint under Section 340 of the Code of Criminal Procedure against KG Marketing for forgery and fabrication of documents.
Facts of the Case:
KG Marketing India (hereinafter, 'KG Marketing') and Ms. Rashi Santosh Soni and Mr. Santosh Soni (hereinafter, 'the Defendants'). KG Marketing, through its proprietor Mr. Karan Kumar, is a company engaged in the business of electrical appliances. The Defendants are individuals who operate a business in the same industry.
KG Marketing filed CS(COMM) 18/2023 against the Defendants, seeking an injunction to restrain them from using the mark/label 'SURYA' and its accompanying trade dress. In this suit, KG Marketing claimed to be the prior user of the mark/label 'SURYA GOLD' since 2016. They asserted to have filed trade mark applications and presented sales figures from 2017-2018 till 2021-2022. KG Marketing claimed to have an expansive network of dealers, distributors, and stockists across India, positioning itself as one of the largest market leaders in electrical appliances with a pan-India presence over the last six years.
To support their claims, KG Marketing presented sales data for five fiscal years, showing a peak in sales during 2019-2020 at ₹8,31,88,268.00/-. For the year 2021-22, they claimed sales figures of ₹2,15,33,737.00/-. Crucially, they also submitted that their products had been advertised in various newspapers and placed on record certain advertisements.
Based on these submissions, the Court granted an ex-parte ad-interim injunction on January 16, 2023, in favor of KG Marketing. However, on May 18, 2023, the Defendants filed an application under Order XXXIX Rule 4 CPC, alleging that the documents filed by KG Marketing, including the newspaper advertisements, were fabricated for the purpose of the suit. Specifically, they claimed that the newspapers Dainik Savera Times (Delhi) dated June 17, 2016, and Navshakti (Mumbai) dated July 12, 2016, were totally fabricated documents.
In a surprising turn of events, on May 25, 2023, KG Marketing stated that it did not wish to contest the suit or use the 'SURYA' trademarks, and the Court vacated the ad-interim injunction.
Subsequently, the Defendants filed their own suit, CS(COMM) 477/2023, on July 15, 2023. In this suit, they sought to injunct KG Marketing from infringing their design rights and from using the mark 'SURYA GOLD' and the accompanying labels. The Defendants claimed to be the prior adopter of the mark/label 'SURYA GOLD' for tower fans since 2014. They stated that in November 2018, they established a new business called M/s. Navya Enterprises for manufacturing, marketing, trading, and selling home appliances, including Tower Fans, continuing to use their mark/label 'SURYA GOLD'.
On July 18, 2023, the Court recorded the statement of Mr. Karan Kumar, proprietor of KG Marketing, who admitted that the newspaper advertisements were fabricated. Following this admission, the Court issued a show cause notice for contempt proceedings. In response, Mr. Kumar filed two affidavits dated May 25, 2023, and July 8, 2023, tendering an unconditional apology for filing the fabricated advertisements. He claimed to have taken steps for repentance, such as a spiritual dip in the Ganges and service at a local temple.
The Defendants then filed an application under Section 340 CrPC in CS(COMM) 18/2023, alleging that KG Marketing had committed offences under various sections of the Indian Penal Code. They also filed an application under Order XXXIX Rule 2A CPC in CS(COMM) 477/2023, alleging that KG Marketing was continuing to use the 'SURYA GOLD' mark/label for selling Tower Fans, which was confirmed through a discreet purchase made by the Defendants.
Issue:
1. Whether KG Marketing should be held liable for fabricating documents and filing a false affidavit in the Court proceedings?
2. Whether a complaint under Section 340 of the Code of Criminal Procedure should be filed against KG Marketing?
3. Whether the suit filed by KG Marketing should be dismissed and the suit filed by the Defendants should be decreed?
Held by the Court:
The Hon'ble Delhi High Court in CS(COMM) 18/2023 and CS(COMM) 477/2023 held that:
Court observed that in trademark, passing off, and copyright matters, documents such as newspaper advertisements are of utmost importance. It held that Courts place enormous reliance on third-party independent documents like newspapers, advertisements, and commercials, as they are expected to be independently verifiable and more credible. The Court emphasized that the authenticity and accuracy of such documents are crucial in intellectual property disputes. It noted that it was undisputed that the newspapers dated June 17, 2016, and July 12, 2016, had been fabricated by Mr. Karan Kumar, the proprietor of KG Marketing, who had categorically admitted to this fabrication.
Court held that although the alleged fabrication of the newspaper might have been done earlier, the affidavit filed before the Court made a categorical assertion that the document was true and there was no false statement or concealment of any document. It opined that the authenticity of these documents had been initially vouched for by Mr. Karan Kumar in his statement of truth filed with the plaint, where he had stated that the documents annexed were true copies of the documents referred to and relied upon by him. The Court concluded that the offence had taken place once the suit was filed before the Court and the document was relied upon for obtaining relief.
Court held that the forgery and fabrication of documents, which were admitted during the Court proceedings by Mr. Karan Kumar, who initially filed a false affidavit and thereafter resiled from the same, could not go unpunished. It emphasized that the purpose of Section 340 CrPC would be undermined if the fabrication of a newspaper was permitted to go unpunished without even an investigation. The Court opined that persons who indulge in forgery and fabrication, especially in respect of documentary evidence which is relied upon heavily, that too in order to obtain an ex-parte injunction, cannot be allowed to go scot-free.
Court held that since the forgery/fabrication of newspapers had been admitted and the filing of a false affidavit had taken place during the proceedings pending before the Court, a case was made out for registration of a complaint under Section 340 CrPC. It directed the Registrar General to take action within four weeks and lodge a complaint with the concerned Judicial Magistrate. The Court also ordered that the entire documents relating to the present two suits be transmitted to the concerned Judicial Magistrate for action to be taken in accordance with law.
Court dismissed CS(COMM) 18/2023 filed by KG Marketing, imposing costs of Rs. 5,00,000/- to be paid by KG Marketing. It decreed CS(COMM) 477/2023 filed by the Defendants, restraining KG Marketing from using the mark 'SURYA GOLD' or the impugned trade dress for its tower fans. The Court granted a permanent injunction in terms of paragraphs 44(a) to 44(e) of the plaint and imposed additional costs of Rs. 5,00,000/- to be paid by KG Marketing to the Defendants. In total, the Court imposed costs of Rs. 10,00,000/- on KG Marketing, to be paid within three months in the manner set out in the judgment.
Relevant Provisions:
Order XXXIX Rules 1 and 2 CPC: For seeking temporary injunctions
Order XXXIX Rule 3 CPC: For ex-parte ad-interim injunctions
Order XXXIX Rule 4 CPC: For vacating ex-parte orders
Order XXIII Rule 1 CPC: For withdrawal of suits
Section 151 CPC: Inherent powers of the Court
Section 340 CrPC: Procedure for offences affecting administration of justice
Order XXXIX Rule 2A CPC: Consequences of disobedience of injunction
fake evidence in trademark dispute
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