Delhi High Court - Orders
Grauer And Weil (India) Limited vs Mr. Nirav Shah & Ors on 19 October, 2023
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
$~52
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(COMM) 339/2023 and I.A. 10097/2023, 12430/2023,
12435/2023, 17284/2023
GRAUER AND WEIL (INDIA) LIMITED ..... Plaintiff
Through: Mr. Jayant Mehta, Sr. Advocate with
Mr. Ankur Kashyap, Mr. Karan
Aggarwal and Ms. Megharanjani
Chandu, Advocates along with Mr.
Rishabh Aggarwala (M:
7506095868).
versus
MR. NIRAV SHAH & ORS. ..... Defendants
Through: Mr. Anshuman Sharma, Mr. Aditya
C. Yagnik, Mr. Azaz Ahmed
Advocates for D-1, 2 and 3 along
with Defendant No. 1 Mr. Nirav
Shah in person (M: 9910207302).
CORAM:
JUSTICE PRATHIBA M. SINGH
ORDER
% 19.10.2023
1. This hearing has been done through hybrid mode. I.A. 17284/2023 ( for additional documents)
2. Issue notice.
3. Let reply be filed within six weeks. Rejoinder, if any, be filed within six weeks thereafter.
4. List on 21st February, 2024.
CS(COMM) 339/2023 and 10097/2023, 12430/2023, 12435/2023
5. The Local Commissioner has appeared before the Court and has regretted the delay in bringing the Local Commissioner's report on record. Whenever the Registry issues an order of Local Commissioner dasti to the CS(COMM) 339/2023 Page 1 of 7 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/10/2023 at 21:07:15 Local Commissioner, an endorsement be made by the Registry that the Local Commissioner to file the report within the time period specified as per the order after execution of the commission. The Local Commissioner shall also ought to ensure that the Local Commissioner report is brought on record. Registry to ensure compliance and if the Local Commissioner report is not on record, the same be brought to the notice of the Court by means of office noting.
6. The present suit has been filed by the Plaintiff- Grauer and Weil (India) Ltd. seeking injunction from the use of the Plaintiff's trade dress, trade secrets, copyright in the label 'GRODAL', against three Defendants i.e., Mr. Nirav Shah, Defendant No. 1, Mr. Rahul Patel, Defendant No. 2 and Furor Specialty Lubricants, Defendant No. 3.
7. The present suit has been filed by the Plaintiff, which is a Company engaged in the manufacturing and marketing of lubricant oils, electroplating, industrial chemicals, industrial paints, thinner, varnishes and engineering plants in the Indian metal finishing industry, apparatus, storage tanks and other industrial equipment.
8. The case of the Plaintiff is that it set up its facility for production of chemicals in 1957 and has ventured into various other segments such as engineering equipment, real estate and lubricants. As per paragraph 8 of the amended plaint the Plaintiff also caters to various large corporations such as Tata, Mahindra, Dorset, Godrej, as also government agencies such as ISRO and Indian Railways.
9. The Plaintiff uses the brand name "GRODAL" since the year 2013 for manufacturing, marketing and selling lubricants and oils. The brand name "GRODAL" bearing application number 2889988 has been registered with CS(COMM) 339/2023 Page 2 of 7 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/10/2023 at 21:07:15 the Registrar of Trade Marks, Mumbai dated 12th December, 2021. The Plaintiff claims to have earned a product revenue (gross revenue) of Rs. 116.68 crores and Rs. 108.56 crores of total revenue (net revenue) from its lubricants business in the last 9 years. Further, the Plaintiff also asserts that an earning of Rs. 57 crore has been done solely from its lubricants business in the past 9 years.
10. The Defendant No. 1- Mr. Nirav Shah who is a former employee of the Plaintiff, along with Defendant No. 2- Mr. Rahul Patel in the present case incorporated a partnership firm i.e., Defendant No. 3- Furor Specialty Lubricants.
11. The allegation in the plaint is that Defendant No. 1 was working as a manager with the Plaintiff and, according to the Plaintiff, he was appointed on 1st July, 2014 as the Assistant Manager, Sales (Lubricant Division) for the Ahmedabad branch of the Plaintiff. During the course of his employment, the allegation is that he, along with Defendant No. 2 and other individuals, had exploited its position and disclosed trade secrets and confidential/proprietary information of the Plaintiff relating to its formulations. Defendant No. 1's services were terminated on 15th March, 2022 and prior to the same, the said Defendant No.1 had even set up Defendant No. 3 firm on 14th March, 2022 and obtained DST registration as well.
12. The suit has, thus, been filed seeking various reliefs including an injunction against disclosure, use of confidential proprietary information and trade secrets relating to the formulae, raw materials, manufacturing methods and processes developed by the Plaintiff.
13. The Court had appointed a Local Commissioner vide order dated 29th CS(COMM) 339/2023 Page 3 of 7 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/10/2023 at 21:07:15 May, 2023. The operative portion of the said order reads as under:-
"10. Mr. Mehta requests for appointment of a Local Commissioner to prepare an inventory of the Defendants' products and to take samples of all 96 products sold by the Defendants under the 15 categories mentioned in paragraph no. 51 (iv) of the plaint.
11. In view of the above, Ms. Palak Batra [+91- 7982941551] is appointed as the Local Commissioner to visit the premises of Defendant No. 3 firm located at: -
(i) Shed No. 95, Gajanan Industrial Estate-2, Near Dev I Land, Road No. 8, Kathwada, Ahmedabad, Gujarat-3 82415.
(ii) Shed No. 3 and 4, Ashtavinayak Industrial Park, Behind Green Arcade, Iscon Circle, Nugar Bypass Road, Mehsana, Gujarat-384002.
12. The Local Commissioner, along with a representative of the Plaintiff and its counsel, shall be permitted to enter upon the premises of the Defendants mentioned above in order to conduct a search to the following effect: -
12.1. Prepare a list of the names of products manufactured and stored on the premises under the categories provided in paragraph 51 (iv) of the plaint and prepare an inventory of the said products. 12.2. Extract a sample of all the products found at the Defendants' premises and store the same in separate smaller containers which shall be inventoried, sealed and signed by the Local Commissioner, in the presence of the parties, and then released on superdari to the Plaintiffs representative for safe keeping on their undertaking to produce the same as and when further directions are issued in this regard.
13. The Local Commissioner shall be permitted to undertake/arrange for photography/ videography of the execution of the commission. All parties shall render full assistance to the Local Commissioner for carrying out the aforenoted directions.
14. In case any of the premises are found locked, the Local Commissioner shall be permitted to break open the CS(COMM) 339/2023 Page 4 of 7 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/10/2023 at 21:07:16 lock(s). To ensure an unhindered and effective execution of this Order, the SHO of the local police station is directed to render all assistance and protection to the Local Commissioner, if and when sought."
14. The Local Commissioner had visited the premises of the Defendant No.3 in Ahmedabad, as also other premises and had made an inventory of various products. The said products were, then, handed over on superdari basis to the Plaintiff.
15. The Defendants have filed their written statements as also documents. Mr. Jayant Mehta, ld. Sr. Counsel for the Plaintiff has relied upon certain emails including emails of January, 2022 - as per which, according to him, it becomes clear that the Defendant No. 1 along with Defendant No. 2 and another ex-employee had together revealed and disclosed the formulations relating to various products of the Plaintiff. The further allegation is that after leaving the employment with the Plaintiff, the Defendants have started a competing business and have also started approaching the customers of the Plaintiff.
16. On the other hand, the stand of the Defendants is that, Defendants were entitled to look at other business prospects for their own growth of career, even during employment. There are no trade secrets or confidential information which has been used by Defendant No. 1 as he was only a sales manager and never had access to the Research and Development laboratories or the manufacturing premises. A competing business cannot be injuncted by the Plaintiff on the allegation of disclosure of confidential information.
17. The case of the Plaintiff is that the formulation of the Defendants is identical to that of the Plaintiff. Reliance is placed upon analysis which has CS(COMM) 339/2023 Page 5 of 7 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/10/2023 at 21:07:16 been done by the Plaintiff in independent laboratories which would show that the products of the Defendants have an identical composition as that of the Plaintiff. This fact is disputed by the ld. Counsel for the Defendants.
18. In order to proceed further, since the present case involves allegations of violation of trade secrets and confidential information, this Court is of the opinion that the products of the Plaintiff and the Defendants ought to be tested by an independent laboratory so as to determine, as to whether the formulation is identical or not.
19. The testing of the products is not objected to by the ld. Counsel for the parties. In addition, this Court is of the view that along with the Plaintiff's and the Defendants' products, two, third party products, one each suggested by the Plaintiff and the Defendants for each category, shall also be tested in order to establish as to whether these formulations are even common to the trade or not.
20. In the background recorded above, the Court directs testing of the Plaintiff's products, Defendants' products and two, third party products in each category, by IIT Bombay, by conducting a Fourier Transform Infrared Spectroscopy (FTIR) Analysis or any other analysis that is deemed appropriate by IIT Bombay in these facts. The third parties' products have also be agreed upon between the parties. One representative of the Plaintiff and the Defendants shall visit IIT Bombay for furnishing the samples to the concerned laboratory. As per the requirements, both parties have submitted a joint chart including information about the products they intend to be tested. The chart includes the names of two third party products to be submitted for testing. The parties shall coordinate with each other and submit the samples to IIT Bombay on the day that may be mutually convenient. On the said CS(COMM) 339/2023 Page 6 of 7 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/10/2023 at 21:07:16 date, the persons nominated by the Director, IIT Bombay shall also draw samples as may be needed to conduct the testing. After conducting the testing, the report shall be communicated directly by IIT Bombay to the Registrar (Original Side), High Court of Delhi as also to the Registrar General of the High Court of Delhi on the following email addresses:
i. Registrar General - [email protected] ii. Registrar (OS) - [email protected]
21. IIT, Bombay shall be paid a sum of Rs.3,00,000/- for conducting testing and submitting the report. The fee of Rs.3,00,000/- shall be shared by the parties equally.
22. The chart of the samples to be tested as agreed between the parties is annexed as ANNEXURE A to this order.
23. List for receiving the report on 21st February, 2024.
24. Copy of this order be communicated by the Registry to the Director, IIT Bombay at the email address: [email protected].
PRATHIBA M. SINGH, J.
OCTOBER 19, 2023 mr/ks CS(COMM) 339/2023 Page 7 of 7 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/10/2023 at 21:07:16 Annexure A IN THE HIGH COURT OF DELHI AT NEW DELHI (ORDINARY ORIGINAL COMMERCIAL JURISDICTION) IA. NO. 12435 OF 2023 IN CS (COMM) NO. 339 OF 2023 Grauer & Weil (India) Limited ...Plaintiff Versus Mr. Nirav Shah and Others ...Defendants LIST OF COMPARATIVE PRODUCTS ON BEHALF OF THE PLAINTIFF AND DEFENDANT AS PER THE COURT ORDER DATED OCTOBER 4, 2023 Sr. Plaintiff Product Defendants' Product No .
Product Company ProductProduct Company Product Remarks
manufact Name Details
manufactu Name Details
ured by red by
Plaintiff Defendant
1 Grodal Metalube Alumol 20 FUROR Bechem Bechem
Draw 300 Ex ALWD 3 India/Metalube Berudraw
Pvt. Ltd./Bpcl Al 2
2 Grodal Metalube Lubricool FUROR Aartek Surfin Kemtek
CU 860 AC Ex CU 56 CU 156
3 Grodal Castrol Rustilo FUROR Castrol India "Castrol" Comparable
RPSB 106 DW 904 RPSOL Limited/IPOL/ Rustilo products are
P 106 P HPCL/Arabian Dwx 32 in bulk
Petroleum Ltd. container of
210 Litre
4 Grodal Castrol Rustilo FUROR Apar Industries "Poweroil"
RPSB 106 DW 902 RPSOL Limited/Pcp Rp Hp
H 106 H Chemicals/Corr
oguard
5 - - - FUROR Hindustan "HPCL" FTIR Test
GEARX Petroleum Parthan Ep Report dated
320 Corporation 320 08.08.2023
Limited has already
been placed
on record as
Document
No. II & JJ
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/10/2023 at 21:07:16 6 Grodal HPCL KoolCut FUROR Cumi/Hardcastl Cimguard RPWB 70 RPAQUA e/ 90 100 100 Corroguard 7 - - - FUROR Cumi/China Cimtech *Product GLASSGR Make D18 dropped by IND 25 the Plaintiff 8 Grodal BASF Tech Cool FUROR No Similar Customize Multicut 35200 Ex MULTICU Product Is d Product al 2000 T SS 2000 Available In Market 9 Grodal Mahir Surface FUROR Hindustan "HPCL" Comparable Syncool 2 Protector AQUACO Petroleum Koolcut 70 products are Ex OL 2 Corporation in bulk Limited/Classic container of Coolant 210 Litre 10 Grodal Metalube Metalube FUROR Bechem Bechem Comparable CU 22G CWD 1350 /Metalube/Arab Unopol products are 1350N ian F811 in bulk container of 210 Litre 11 Grodal HPCL ENKLO FUROR Bpcl/Hpcl/ "Mak"
Hydra 68 Ex HYDRA Gandhar/Arabin Hydrol Aw series AW 68 68 12 - - - FUROR Quaker Quakercool *Product MULTICU Houghton/Mark 7101 Afs dropped by T SS 7101 Speciality/Cumi the Plaintiff 13 Grodal HPCL Drawmet FUROR AMTROL AMTROL DRAW 15 Ex ALWD 180 DRAW AL AL 135 (M) 135 14 Grodal BASF Tech Cool FUROR MMCF 4006 Ex FERROCU No Similar 1000 T 1000 Product Is Available In Market 15 Grodal Metalube Lubricool FUROR Bechem Unopol Comparable CU 118 22G Ex CWD 118 /Metalube/Arab G560 products are ian in bulk container of 210 Litre 16 Grodal Castrol Almaredg FUROR Gandhar Oil "Divyol"
Cutsol AC e SL Ex SOL CUT Refinery Cut 400
AS/
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/10/2023 at 21:07:16 FUROR Limited/Arabia EMULSY n Petroleum Ltd CUT AS 17 Grodal Mobil Mobil FUROR Indian Oil Servo Cut Cutsol AA Mobilcut SOL CUT Corporation S 100 Ex AA/ Limited/Arabia FUROR n Petroleum EMULSY Ltd.
CUT AA 18 Grodal GP Aquacut FUROR HPCL/Arabian "HPCL"
Cutsol D Petroleum 125 Ex SOL CUT Petroleum Koolcut 40
D/ FUROR Ltd/Gandhar
EMULSY Oil Refinery
CUT D Ltd.
19 Grodal HPCL ENKLO FUROR IOCL/Arabian/ Servo
Hydra 68 Ex HYDRA Gandhar System
HLP HLP 68 HLP 68
20 Grodal HPCL WAYLUB FUROR Gandhar Oil "Divyol"
Way 68 E 68 Ex SLIDEWA Refinery Way Lub
Y 68 Limited 68
21 Grodal Metalube Lubricool FUROR Metalube Lubricool Comparable
CU 22G Ex CWD 1350 Private 22G products are
1350N C Ltd/Bechem/Ar in bulk
abian container of
210 Litre
22 Grodal HPCL Metaquen FUROR Hardcastle Hiquench Comparable
Termquen ch M Ex QUENCH Petrofer M products are
ch M M /HPCL/Arabian in bulk
/Gandhar container of
210 Litre
23 - - - FUROR No Similar Customize
RPSOL Product Is d Product
406 DTR Available in
Market
24 Grodal Castrol Rustilo FUROR BPCL/ Mineral Comparable
RPSB 950 DW 950 CLEANSO CASTROL Turpentine products are
L 950 Oil in bulk
container of
210 Litre
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/10/2023 at 21:07:16 25 Grodal AL YBI YBI FUROR Anand Comparable SB 105 Belpress ALSOL Engineers Pvt. "Molygrap products are 99I Ex 105 Ltd./Idemitsu/ h" Punch in bulk Vinayak Oil 4300 S container of Industries 210 Litre 26 Grodal Chembon Chembon FUROR Comparable RPSB 940 d d W2 Ex CLEANSO products are KLJ Organics L 940 40 Pf in bulk Limited/Mobil container of 210 Litre 27 Grodal HPCL Rustop FUROR HPCL/Arabian/ "HPCL"
RPOB 10 173 Ex RPOB 10 Gandhar Rustop 274
28 Grodal HPCL Drawmet FUROR Metalube Alumol
DRAW 15 Ex ALWD 180 Private 195
AL 135 Limited/Beche
m/HPCL
29 - - - FUROR HPCL "HPCL" *Product
DRAW Drawmet dropped by
PASTE 44 the Plaintiff
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/10/2023 at 21:07:16