The Hon'ble High Court of Bombay in Pidilite Industries Ltd. vs. Premier Stationery Industries Pvt. Ltd. & Ors., Contempt Petition (L) No. 28560 of 2021 in Commercial Suit No. 520 of 2017, dated August 13, 2024, held that the respondents committed willful contumacious contempt of court by violating a consent order and imposed penalties on them.
Facts
The Petitioner, Pidilite Industries Ltd., a renowned company in the field of adhesives and sealants since 1969, filed Commercial Suit No. 520 of 2017 against Respondent Nos. 1 and 2 (Premier Stationery Industries Pvt. Ltd. & Ors.) on April 21, 2017. The suit sought reliefs for infringement of the Petitioner's well-known FEVICOL MR Artistic Works, copyrights, violation of design in the Distinctive FEVICOL MR Bottle, violation of rights in the Distinctive FEVICOL MR Glue Pens, and the tort of passing off.
Simultaneously with the suit, the Petitioner filed a Notice of Motion seeking ad-interim and interim reliefs. On April 28, 2017, the court passed an ex-parte ad-interim order injuncting Respondent Nos. 1 and 2 in terms of prayer clauses (a), (b), and (f) of the Notice of Motion. The suit was ultimately disposed of by an order dated July 13, 2017, in terms of consent terms. Respondent Nos. 1 and 2 submitted to a decree in terms of prayer clauses (a), (b), (c), (d), and (e) of the plaint and provided undertakings in the Consent Terms, which were accepted as undertakings to the court.
In August 2020, the Petitioner discovered that despite the consent order, Respondent Nos. 1 and 2 had recommenced use of an impugned label/trade dress and color scheme imitating the Petitioner's FEVICOL MR Artistic Work, trade dress, color scheme, layout, bottles, and glue pens. The Petitioner also found another range of synthetic glue products manufactured and sold by the Respondents in bottles similar to the Distinctive FEVICOL MR Bottles.
The Petitioner sent a cease and desist notice on August 5, 2020, to which the respondents replied on August 31, 2020, denying violations and alleging that the listings on their website were inadvertent. The Petitioner responded on January 5, 2021, reiterating the wrongful nature of the Respondents' activities. The Petitioner also noticed that the Respondents were making the impugned products available for sale on the internet through their website, social media platforms, and third-party websites.
During the contempt proceedings, Respondent Nos. 1 and 2 claimed they had sold their business to Respondent No. 3 (a proprietorship firm owned by Respondent No. 4) in 2017. The Petitioner then amended the petition to include Respondent Nos. 3 and 4. The Petitioner argued that all respondents were connected, associated, and related, aiding and abetting each other in wrongful acts. They pointed out that Respondent No. 2 is the wife of Respondent No. 4, and all respondents operate from the same address.
The Petitioner highlighted contradictions in the respondents' statements, noting that in their response to the cease and desist notice, Respondent Nos. 1 and 2 had admitted to manufacturing and selling the impugned products, contrary to their later claim of having sold the business in 2017. The Petitioner also presented evidence of trademark applications made by both Respondent Nos. 2 and 4 for marks comprising "PREMIER" at various times, indicating their continued involvement in the business.
The respondents contended that Respondent Nos. 3 and 4 were not aware of or bound by the consent order, being third parties to the original suit. They also argued that Respondent Nos. 1 and 2 had ceased their business operations after the alleged sale, presenting income tax returns showing zero income for Respondent No. 1 in the relevant years.
Issue:
Whether the respondents, including those not originally party to the suit, can be held liable for contempt of court for violating the consent order dated July 13, 2017, and if so, what penalties should be imposed?
Held:
The Hon'ble High Court of Bombay in Contempt Petition (L) No. 28560 of 2021 held that:
The court observed that the Final Order passed in terms of the Consent Terms was extremely wide and governed not only Respondent Nos. 1 and 2 but also all other parties claiming under them, including Respondent Nos. 3 and 4. The court rejected the contention that Respondent Nos. 3 and 4 were unaware of the Consent Terms and Final Order, given their integral connection with Respondent Nos. 1 and 2, including the marital relationship between Respondent Nos. 2 and 4. The court held that Respondent Nos. 3 and 4 had made false statements on oath and engaged in willful and deliberate disobedience of the court's order.
The court opined that the conduct of Respondent Nos. 3 and 4 possessed a dual character of contempt: (i) aiding and abetting the contempt by Respondent Nos. 1 and 2, and (ii) directly being responsible for violating the Court's Order and knowingly interfering with the administration of justice. The court found that Respondent Nos. 1 and 2 had made false statements in their Affidavit regarding ceasing their business, as this was contrary to the material on record, including their response to the cease and desist notice.
The court held that the scope of execution proceedings was irrelevant to its contempt jurisdiction, which is wider and independent of any rights of parties in execution proceedings. The court emphasized that its power to punish for contempt under Article 215 of the Constitution of India, read with the Contempt of Courts Act and Section 151 of the Code of Civil Procedure, is not limited by considerations relevant to execution proceedings. The court relied on several precedents, including K. Somnath Vs. D. Veerendra Heggade and Urban Infrastructure Real Estate Fund Vs. Dharmesh S. Jain and Anr., to support its wide powers in contempt jurisdiction.
The court noted that the respondents failed to offer any apology, demonstrating a lack of remorse or regret for their wrongful acts and willful disobedience of the Court's Orders. The court observed that this conduct called for strict action to set an example that Court's orders are not to be taken lightly. Referring to its previous decision in Mangalam Organics Ltd. Vs. Patanjali Ayurved Ltd. and Ors., the court held that it was more appropriate to penalize the Respondents rather than impose civil imprisonment.
Consequently, the court ordered the respondents to jointly and/or severally pay Rs. 50,00,000 (Rupees Fifty Lakh only) to the Petitioner within four weeks from the uploading of the Order. Failure to comply would result in Respondent Nos. 2 and 4 being taken into custody and detained for two weeks in Civil Prison. Additionally, the court granted permanent injunctions restraining the respondents from infringing the Petitioner's registered mark, copyright, and committing passing off.
The respondents were also ordered to deliver up all infringing products and related materials to the Petitioner for destruction. The court concluded that these measures were necessary to purge the contempt and ensure compliance with its orders.
Relevant Sections:
1. Article 215 of the Constitution of India
2. Contempt of Courts Act, 1971
3. Section 151 of the Code of Civil Procedure, 1908
4. Order XXXIX Rule 2A of the Code of Civil Procedure, 1908
Pari Materia / Cases Referred :
1. K. Somnath Vs. D. Veerendra Heggade (MANU/KA/2073/2022)
2. Urban Infrastructure Real Estate Fund Vs. Dharmesh S. Jain and Anr. (Contempt Petition (C) No. 940 of 2021)
3. Sita Ram Vs. Balbir (MANU/SC/1611/2016)
4. Pidilite Industries Ltd. Vs. Raghunath Chemicals & Ors. (Contempt Petition (L) No. 30589 of 2021)
5. Mohd. Sharfuddin Vs. Mohd. Jamal (MANU/AP/0213/2003)
6. Cargil India Pvt Ltd. Vs. M.M. Oil Enterprises (MANU/MH/117/2019)
7. Mangalam Organics Ltd. Vs. Patanjali Ayurved Ltd. and Ors. (Interim Application (L) No. 4586 of 2024)
8. Pfizer INC and Ors. Vs. Triveni Interchem Private Ltd. & Ors. (2023 SCC OnLine Del 363)
9. Sneh Gupta V/s. Devi Sarup (2009) 6 SCC 194
10. Bondar Vs. Mishribai (2019 SCC OnLine MP 6124)
11. Pushpaben and Anr. Vs. Narandas V. Badiani and Anr. (AIR 1979 Supreme Court 1536)
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