Karnataka High Court
Haldiram Bhujiawala Ltd. And Anr. vs Haldiram Foods International And Anr. on 17 August, 2004
Equivalent citations: 2004(29)PTC450(KARN)
Author: S.R. Bannurmath
Bench: S.R. Bannurmath
JUDGMENT S.R. Bannurmath, J.
1. This petition is filed by accused Nos. 1 and 3 for quashing the proceedings in Crime No. 633/2002 registered by Koramangala police station and now pending enquiry before the learned Additional Chief Metropolitan Magistrate Bangalore.
2. The petitioners alongwith others have been alleged of commission of offences under Sections 78 and 79 of the Trade and Merchandise Marks Act, 1958 (hereinafter referred to as the Trade Marks Act) and under Section 63 of the Copyrights Act and Section 420 read with Section 34 of the Indian Penal Code. Since the allegations and the dispute as well as the offences alleged to have been committed are practically technical in nature, it is not necessary to mention the allegations, and the reply addressed by both the sides.
3. A complaint under Section 200 Cr. P.C. has been filed by M/s. Haldiram Foods International Ltd. against the petitioners here in and others for the aforesaid offences, inter alia, contending that the complainant firm is engaged in the business of manufacture and sale of sweets, namkeens and ready-to-eat snacks. The firm was established at Nagpur in the year 1989. That the products manufactured by the complainant are marketed throughout India for past several decades.
That the complainant has registered its trade marks 'HALDIRAM BHUJIAWALA' with the Trademarks Authority in the Trademarks No. 285062; the trademark "HALDIRAM BHUJIAWALA" with its logo is in continuous use in the course of trade. The trade mark registered in the name of complainant firm is used not only in India but also in USA, UK, Canada, Japan, Singapore, Hong Kong, Australia and UAE, etc. That the package material of the complainant is also registered under the Copyrights Act under registration Nos. A--55087/98 to A-55104/98. That the complainant has an exclusive right to the use of the trademarks and the logo being prior adopter and user.
4. It is alleged that the firm called as M/s SVAD has recently opened a retail outlet at No. 148, V Block, 60 Ft. Rd. Koramangala, Bangalore under the trade name of 'HALDIRAM KOLKATTA'. The petitioner No. 2 is the partner of the said firm M/s SVAD. On enquiry as the complainant came to know that the partners of the said firm in collusion with the Petitioner No. 1 herein have been using the trademark of the complainant and are applying the said trademark to the goods manufactured by them, thereby the said persons are making use of identical or deceptively similar trademark and logo without the assent of the complainant and thus have committed the offences under the Trade Marks Act and the Copyrights Act.
It is also alleged that there is a longstanding dispute between the complainant firm and the Accused No. 1 firm represented by one Sri Prabhushankar Agarwal pending before various courts in this regard; that the complainant has obtained an order of injunction against the petitioner No.l firm restraining it from using the trademark; that the accused having full knowledge about the legal rights of the complainant firm and the orders of the Delhi High Court in this regard, have deliberately and with mala fide intention misused the complainant's trademark and as such also have committed offences under Sections 78 and 79 of the Trademarks Act as well as other infringement constituting an offence punishable under Section 63 of the Copyrights Act and under Section 420 IPC.
5. On receipt of this complaint, the jurisdictional police have registered a case against the petitioners and another in Cr. No. 633 of 2002 and investigation has been taken up. It is the case of the petitioners that immediately after registration of the case, the concerned police have raided the shop and after removing the items found therein, practically shut down the shop which action is illegal one. As such the petitioners are forced to approach this Court by invoking the inherent jurisdiction of this Court under Section 482 Cr. P.C., to quash the criminal proceedings.
6. The argument of the petitioners in this regard is that there is a longstanding civil dispute between the parties as to the use of the trademark and when numbers of cases of civil nature are pending before various courts in the country; the same cannot be a ground for initiating criminal proceedings, According to the petitioners the powers of the police under Sections 77, 78, 79 of the Trademarks Act cannot be invoked, as there is no falsification of a brand name or trademark. According to the petitioners they too are holding their own registered trademark and hence when the question as to any violation of trademarks is concerned is pending in the civil courts and as such criminal proceedings of the present nature are not maintainable. According to the petitioners the complaint has been filed with mala fide intention only to harass the petitioners. It is submitted that the mala fide intention is apparent from the fact that the complainant has filed a suit 635/92 though against one Ashok Kumar Agarwal -- the sole proprietor of firm Haldiram Bhujiawala at Delhi and obtained an ex parte injunction even against the petitioner No. 1 herein though not a party in the suit. However, in the appeal the injunction order has been vacated by the Delhi High Court. Even the approach to the Hon'ble Supreme Court by the complainant has become futile since SLP filed is also dismissed. It is also submitted that similar attempts made by the complainant by filing various petitions or suits in different parts of the country have failed and as a last resort present criminal case is also filed. It is submitted that as the complainant has filed the criminal case with mala fide intention and even if the entire contents of the complaint are accepted as true, since they do not make out any case or commission of offences named therein, instead of harassing the petitioners of undergoing agony of attending courts, it would be just and appropriate to quash the proceedings at the initial stage itself by exercising the inherent jurisdiction.
7. Replying to these arguments the stand of the respondent complainants is that in view of the settled position of law by the Hon'ble Supreme Court in respect of exercise of inherent jurisdiction by the High Courts which is to the effect that the inherent power should not be exercised at the initial stage, thereby scuttling the criminal proceedings, by going into the merits and that too without any evidence available or trial. It is submitted that so far as the merits of the complaint are concerned, prima facie the present case is filed for the offences under Sections 78 and 79 of the Trade and Merchandising Act and in order to constitute the offences, the complainant is required to show only two things namely the proprietorship of a trademark by the petitioner and that the use of the identical trademark by the accused is without permission of the proprietor. In this regard it is submitted that admittedly the complainant is the registered proprietor of the trademark HALDIRAM BHUJIAWALA in trademark No. 285062, whereas the alleged claim of the accused even if accepted as true, itself shows that its trademark is later one. As such as there is violation or misuse of the complainant's trademark without permission of the proprietor namely the complainant, prima facie it is shown that the accused have committed the offences alleged. In this regard it is submitted that the trademark bearing number 330375 by the accused has been found to be obtained by fraud and even otherwise the same was restricted to West Bengal area only as per the judgment of the High Court of Delhi by the order dated 12-5-1999 which is still in force and as such the use of the trademark by the accused is not only in violation of the provisions of the Act but also against the pronouncement of the competent court. It is also submitted that as per various pronouncements of the Apex Court itself show mere pendency of civil nature is not a ground for quashing the criminal proceedings. It is submitted that at this stage when the investigation is yet to commence, the alleged defence of the accused cannot be looked into. On these among other grounds it is submitted that the present petition is a liable to be dismissed.
It is to be mentioned that both the sides have produced volumes of documents and various pronouncements of the Hon'ble Supreme Court in support of their contentions.
8. Before going into the merits of the case let me remind myself as to the various pronouncements and law laid down by the Hon'ble Supreme Court in respect of exercise of inherent jurisdiction by the High Court under Section 482 Cr PC for quashing the criminal proceedings at the initial stage itself.
9. Right from the case of Nagawwa v. Veeranna, , State of Haryana v. Bhajanlal, 1992 SCC (Cri) 426, in the case of State of Bihar v. Rajendra Agarwal, in the case of Trisuns Chemical Industry v. Rajesh Agarwal, 2000 SCC (Cri) 47, and several other reported cases the Apex Court time and again, emphasized that inherent jurisdiction should be used sparingly and cautiously that too only when the court comes to the conclusion that there would he manifest injustice or abuse of the process of the court by continuing the criminal proceedings. In fact in Bhajanlal's case the Apex Court after considering its various earlier pronouncements, laid down guidelines or principles indicating which of the categories of cases fall under exception or permit the High Court to exercise the inherent jurisdiction to quash the proceedings at the initial stage itself.
These are as follows:
1. When the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima-facie constitute any offence or make out the case against the accused;
2. Where the allegations in the first information report and other materials if any accompanying the F.I.R. do not disclose a cognizable offence justifying an investigation by the police officer under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code;
3. Where the uncontroverted allegations made in the FIR or complaint do not disclose commission of any offence and make out to a case against the accused;
4. When the allegations in F.I.R. do not constitute a cognizable offence but constitute only a non-cognizable ;
5. Where the allegations made in the F.I.R. or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused;
6. Where there is an express legal bar engrafted in any of the provisions of the Code on the concerned the Act to the institution and continuance of the proceedings and/or where there is specific provision in the Code or the concerned Act. Providing efficacious redress for the grievance of the aggrieved party;
7. Where the criminal proceedings is manifestly attended with mala fides and/or where the proceeding is manifestly instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him with private/personal grudge. The Apex Court also observed as follows :
"We also give a note of caution to the fact that the power of quashing criminal proceedings should be exercised very sparingly and with a circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an inquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whims and caprice."
10. Keeping in view these will settled principles I have considered the case on hand. In my view the lengthy arguments addressed and the voluminous documents relied upon by both the sides need not be considered in details at this stage. Suffice it to state that the case of the complainant against the accused is violation of the provisions of Trademark Act and Copyright Act. The offences alleged against the accused are punishable under Sections 78 and 79 of the Trade and Merchandise Act and Section 63 of the Copyright Act.
11. Section 78 of the Act prescribes penalty for applying false trademarks, trade descriptions etc. and under Section 79 penalty for selling goods to which a false trademarks or false trade description is applied. Section 77 of the very Act defines false, defines falsifying and falsely applying trademarks. The gist is when a person without the assent of the proprietor of the trademark makes use of that trademark or a deceptively similar mark, is deemed to have committed the offense of falsifying a trademark and falsely applying trademarks is stated to be committed when a person without the assent of the proprietor of the trademark applies such trademarks or deceptively similar marts to goods or any package containing goods.
12. In the present complaint the allegation of the complainant is that though the complainants are the proprietors of the trademarks HALDIRAM BHUJIWALA, the accused are using the same without the permission of the complainant. It is to be noted that under Section 77 Clause (4) the burden in a prosecution for falsifying or falsely applying the trademarks in respect of the assent of the proprietor shall be on the accused. In the present case though the accused do not seriously dispute as to complainants being the proprietor of the trademark HALDIRAM BHUJIWALA, in the present petition it is argued that the accused are also entitled to use the said trademark. In this regard at length argument is addressed. The accused claim that the accused being descendants of the original proprietor are also entitled to use the trademark. Even otherwise it is argued that under Section 12(3) of the Act it is permissible for more than one concern to use identical or nearly resembling trademarks. In fact both the sides have tried to deal with this aspect elaborately, but in my view it is not necessary at this stage to go into disputed questions of fact, which are to be established during the trial. However, it may be noted that under Section 12(3) of the Act it is the Registrar under the Act who can permit such user by two separate concerns. In the absence of any clear material at this stage and especially various litigations pending between the parties in my view this question cannot be decided by this Court while considering the petition under Section 482 Cr. P.C. by detailed probing. Similarly, under Section 63 of the Copyright Act offence of infringement of copyright is made penal. Similarly the argument in respect Section 28(3) that rights conferred by way registration can be simultaneously used by more than one concern, again it is matter in evidence to be lead by both sides during the trial and this Court cannot go into the disputed facts at this stage.
13. It is not disputed that the complainant firm is the established in the year 1941 and has obtained the trademarks registration earlier to the accused firm established in the year 1958. The question whether the accused are the trademark proprietors or whether complainant and the accused both can use the same trademark has to be decided in appropriate proceedings and in the least in the present criminal petition under Section 482 Cr. PC.
14. The only exercise this Court can do, in the light of various pronouncements of the Apex Court to see that without adding or subtracting anything in the complaint, whether the complaint or the first information prima facie show on its face any offence as alleged therein has been committed or not.
15. On going through the complaint/first information in my view as the complainant has made out a case for the alleged offences under the Trade and Merchandise Marks Act and Copyright Act as well as offence of cheating punishable under Section 420 IPC, the contentions on merits by the accused at this initial stage cannot be gone into and hence the prayer of the petitioners for quashing the criminal proceeding in Crime No. 633/2002 is devoid of merits at this stage and hence the petition is liable to be rejected.
In the result and for the reasons stated above the petition fails and same is dismissed.
Before concluding it is made clear that all the discussion made above or merits are only for the limited purpose and should not be treated as final conclusions arrival at by the Court. It is open for the both the sides to raise these questions during the trial or at the time of final arguments.