Ab Skf & Anr vs M/S Osaka International Inc. & Ors on 5 March, 2024

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Delhi High Court - Orders

Ab Skf & Anr vs M/S Osaka International Inc. & Ors on 5 March, 2024

Bench: Sanjeev Narula

                                    $~37
                                    *           IN THE HIGH COURT OF DELHI AT NEW DELHI
                                    +           CS(COMM) 197/2024
                                                AB SKF & ANR.                                                                      ..... Plaintiffs
                                                              Through:                                        Mr. Saif Khan and Mr. Prajjwal
                                                                                                              Kushwaha, Advocates.

                                                                                      versus

                                                M/S OSAKA INTERNATIONAL INC. & ORS.                                               ..... Defendants
                                                              Through: None.

                                                CORAM:
                                                HON'BLE MR. JUSTICE SANJEEV NARULA
                                                                                      ORDER

% 05.03.2024 I.A. 5272/2024 (seeking exemption from advance service to Defendant Nos. 1 to 6)

1. The Plaintiffs seek urgent interim relief against prima facie counterfeit products and for this purpose, an ex-parte appointment of Local Commissioners is also sought. Therefore, in the peculiar facts and circumstances of this case, exemption from effecting advance service upon Defendants No. 1 to 6, is granted.

2 The application is disposed of.

I.A. 5270/2024 (seeking exemption from filing clear, translated copies with sufficient margins)

3. Exemption is granted, subject to all just exceptions.

4. The Plaintiffs shall file legible and clearer copies of exempted documents, compliant with practice rules, before the next date of hearing.

CS(COMM) 197/2024 Page 1 of 14

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 29/03/2024 at 21:00:51

5. Accordingly, the application stands disposed of.

I.A. 5271/2024 (seeking leave to file additional documents)

6. This is an application seeking leave to file additional documents under the Commercial Courts Act, 2015.

7. Plaintiffs, if they wish to file additional documents at a later stage, shall do so strictly as per the provisions of the said Act.

8. Accordingly, the application stands disposed of.

I.A. 5274/2024 (seeking exemption from institution of pre-litigation mediation)

9. As the present suit contemplates urgent interim relief, in light of the judgment of Supreme Court in Yamini Manohar v. T.K.D. Krithi,1 exemption from attempting pre-institution mediation is granted.

10. Disposed of.

CS(COMM) 197/2024

11. Let the plaint be registered as a suit.

12. Upon filing of process fee, issue summons to the Defendants by all permissible modes. Summons shall state that the written statement(s) shall be filed by the Defendants within 30 days from the date of receipt of summons. Along with the written statement(s), the Defendants shall also file affidavit(s) of admission/denial of the documents of the Plaintiffs, without which the written statement(s) shall not be taken on record.

13. Liberty is given to the Plaintiffs to file replication(s) within 15 days of the receipt of the written statement(s). Along with the replication(s), if any, filed by the Plaintiffs, affidavit(s) of admission/denial of documents of the 1 2023 SCC OnLine SC 1382.

CS(COMM) 197/2024 Page 2 of 14

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 29/03/2024 at 21:00:51 Defendants, be filed by the Plaintiffs, without which the replication(s) shall not be taken on record. If any of the parties wish to seek inspection of any documents, the same shall be sought and given within the timelines.

14. List before the Joint Registrar for marking of exhibits on 7th May, 2024. It is made clear that any party unjustifiably denying documents would be liable to be burdened with costs.

15. List before Court for framing of issues thereafter.

I.A. 5273/2024 (seeking exemption from two months' notice to the Government of India)

16. Issue notice to counsel for Defendant No. 10, by all permissible modes, upon filing of process fee, returnable on 08th August, 2024.

17. Reply, if any, be filed within four weeks from the date of service. Rejoinder thereto, if any, be filed within two weeks thereafter.

I.A. 5268/2024 (u/Order XXXIX Rules 1 & 2 r/w Section 151 of the Code of Civil Procedure, 1908)

18. Mr. Saif Khan, counsel for the Plaintiffs, presents the following facts:

18.1. Plaintiff No. 1, Aktieboiaget SKF, also known as AB SKF, was incorporated in 1907, under the laws of Sweden. It is among the global leaders in manufacture and supply of more than 241 variants of bearings, seals, lubrication systems, used in machinery and equipment across various industries, such as aerospace, construction, general machinery, railways, oil, gas etc. Plaintiff No. 2, SKF India Limited, is the subsidiary of Plaintiff No. 1, who are been carrying out business operations in India since 1923. 18.2. Since 1907, Plaintiff No. 1 has been utilizing the marks "SKF", CS(COMM) 197/2024 Page 3 of 14 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 29/03/2024 at 21:00:52 " ", " ", " ", and " " [collectively, "Plaintiffs' marks"] in respect of its products, which are sold across the country through retail stores as well as online modes, including its website "https://www.emarketplace.in.skf.com/". Additionally, Plaintiffs have also developed a smartphone application named "SKF Authenticate" through which customers can upload photos of products directly for verification of authenticity by scanning a unique DMC code appended to every product manufactured by them.

18.3. Plaintiff No. 1 has obtained trademark registrations for the Plaintiffs' marks across various classes, with the earliest registration dating back to 30th September, 1942. Particulars of Plaintiff No. 1's registrations are set out in paragraph No. 15 of the plaint.

18.4. Plaintiffs also claim common law rights and copyright in the unique packaging/ artwork used for their products " ", which comprises of distinctive colour scheme of red, white and blue and other features including, stylization and placement of the mark "SKF" written in bold letters.

18.5. Globally, the SKF products and services provide sustainable ways for CS(COMM) 197/2024 Page 4 of 14 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 29/03/2024 at 21:00:52 companies across the automotive and industrial sectors to achieve breakthrough in friction reduction, energy efficiency, equipment longevity and reliability. In India, Plaintiffs have employed substantial workforce and resources. Their extensive reach is reflected by the annual sales figures for last five financial years, as delineated in paragraph No. 10 of the plaint. The publicity expenses incurred by Plaintiffs have also been tabulated in paragraph No. 12 of the plaint.

18.6. The Plaintiffs' grievance arises from the Defendants No. 1 to 6's production and sale of counterfeit products bearing the Plaintiffs' "SKF" marks and packaging, which they learnt about in November, 2020 through various consumer complaints. Thereafter, Plaintiffs engaged a Private Investigator to undertake market surveys and gather information about the Defendants. It appears that Defendants No. 1 to 6 are family members who are acting in collusion to trade in counterfeit products, with the intent to defraud the customers intending to purchase Plaintiffs' genuine and high quality SKF products. The relationship between Defendants No. 1 to 6 is explained through the following family chart:

CS(COMM) 197/2024 Page 5 of 14

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 29/03/2024 at 21:00:52 18.7. Defendants No. 1 and 2, M/s Osaka International and M/s Bearing Business Company Mumbai, respectively, operating through their websites www.osakaglobal.in and www.bearingbusiness.in, are suppliers and exporters of various types of bearings and other accessories. As per the complaints received, when aggrieved consumers questioned the authenticity of the products supplied by the said Defendants, Defendants No. 1 and 2 produced forged invoices raised by Plaintiffs' authorized distributor in Singapore along with a false import certificate. When the Private Investigator showed interest in purchasing the products, an employee of Defendant No. 1 shared copies of brochures, price list and photographs of the impugned products, all of which display the "SKF" mark. The Investigator also paid Rs. 1498/- to obtain some samples of the impugned products in the bank account maintained with HDFC Bank [Defendant No. 8]. Similarly, an order was placed with Defendant No. 2 for 40 pieces of the CS(COMM) 197/2024 Page 6 of 14 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 29/03/2024 at 21:00:52 impugned products by making a payment of Rs. 2,880/- in the given UPI ID of one Ms. Riddhi Patel. The delivery challan for the said products mentioned the name of Defendant No. 3 - M/s International Bearing Industries.

18.8. Plaintiffs' searches have further revealed that the proprietor of Defendant No. 2 is a Director of Vidhisha Paper Mills Ltd., Defendant No. 6, and is also working at Defendant No. 3.

18.9. Defendant No. 3 also manufactures and sells the counterfeit products through online trade directories. One of its customers, who reported the incident to the Plaintiffs, even sent a legal notice to Defendant No. 3 for sale of illegitimate goods. Defendant No. 3 proclaims to be an authorized industrial distributor of the Plaintiffs, on the basis of forged authorization certificates. As per the records of Ministry of Corporate Affairs, the registrant of GST for Defendant No. 3 [Mr. Paras Navinchandra Shah] is also a Director of Defendants No. 5 [M/s Escort Bearing (India) Pvt. Ltd.] and Defendant No. 6.

18.10. Defendant No. 4 has adopted the mark "SKEFLON", derived from the Plaintiff's "SKF" marks, for its products. On its website www.skeflon.com, Defendant No. 4 inter alia sells the products under the " " mark. Similarly, Defendant No. 5's website displays " " as a brand that they sell, although no such authority has ever been given by the Plaintiffs.

18.11. Defendant No. 6 is the manufacturer and distributor of corrugated boxes and craft papers, who supplies the idential boxes as that of the CS(COMM) 197/2024 Page 7 of 14 This is a digitally signed order.

19. The Court has considered the afore-noted contentions and examined the record. An illustrative comparison of the impugned products of Defendant No. 1, with Plaintiffs' products, as pointed out by Mr. Khan, is reproduced below:

CS(COMM) 197/2024 Page 8 of 14

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 29/03/2024 at 21:00:52

20. Defendants No. 1 to 6 are using the Plaintiffs' registered mark "SKF" without any authorization, in an identical paclaging. The rival products, as can been seen from the above pictures, appear to be identical without any noticeable differences. The points of distinction highlighted by Mr. Khan, CS(COMM) 197/2024 Page 9 of 14 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 29/03/2024 at 21:00:52 prima facie, would not ordinarily be discernible to an average consumer of Plaintiffs' products, who would be misled into purchasing the counterfeit products that may be of an inferior quality.

21. In view of the above, the Court finds that the Plaintiffs have made out a prima facie case in their favour and in case an ex-parte ad-interim injunction is not granted, Plaintiffs will suffer an irreparable loss; balance of convenience also lies in favour of the Plaintiffs and against the Defendants.

22. Accordingly, the following directions are issued:

22.1. Till the next date of hearing, Defendants No. 1 to 6, or anybody acting on their behalf, are restrained from using the name/ mark "SKF" or any other mark which is identical or deceptively similar to the trademark "SKF", including Skeflon, and SKF trade dress of the Plaintiffs, including as part of their domain name, e-mail ID, social media or in any other manner in the course of trade, which amounts to infringement or passing off the Plaintiffs' registered "SKF" trademarks and trade dress.

22.2. Defendants No. 1 to 6 and all other acting on their behalf shall also remove/ takedown listings of the impugned products that bear the Plaintiff's "SKF" trademarks or packaging, on all online platforms. 22.3. Defendant No. 7 is directed to file in a sealed cover, the details, records and particulars including call records, history relating to operation of the following phone numbers: 9313801458, 7069122671, 9920539245, 8048361266, 022-49716613, 022-49716614, 932184737, and 8130293706. 22.4. Defendant No. 8 is directed to freeze the bank account No. 50200077225861, having IFSC Code HDFC0000406, and to file in a sealed cover, all details, records relating to opening and operation of the said bank account, including the KYC record.

CS(COMM) 197/2024 Page 10 of 14

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 29/03/2024 at 21:00:52 22.5. Defendant No. 9 is directed to freeze the UPI ID riddhi0patel@okicici and to file in a sealed cover, all details, records and particulars relating to operation of the said UPI ID, including the KYC record of the account holder and complete account statement from opening till date. 22.6. Defendant No. 10 is directed to file in a sealed cover, all details pertaining to Defendants No. 1 to 6, who were allotted GST Nos. 07ACLPS0053J1ZG, 27AEBPS8762G2Z2, 24AEBPS8762G2Z8, 27BJYPS36884N1ZU, 24AACCE0437E1Z9, 27AACCE0437E1Z3, 24AAFCV2041N1ZA, 07AADFG0159R1Z2, 07AADFG0159R1Z2, such PAN, Aadhar address proof, details of its partners/ principal officers, Bank accounts in the GST department's records and any further details which may be relevant.

23. Compliance of Order XXXIX Rule 3 of CPC be done within two weeks from today.

24. Upon filing of process fee, issue notice to the Defendants, by all permissible modes, returnable on the next date of hearing. Reply, if any, be filed within four weeks from the date of service. Rejoinder thereto, if any, be filed within two weeks thereafter.

25. List on 08th August, 2024.

I.A. 5269/2024 (for appointment of Local Commissioners)

26. Mr. Khan submits that Defendants No. 1 to 6 are aware of the Plaintiffs and their products. The Plaintiffs believe that the infringing products are stored/ sold at the premises of Defendants No. 1, 3, 5 and 6 and they are likely to remove all physical evidence or deny their involvement in the infringing activities. Therefore, in order to preserve evidence of CS(COMM) 197/2024 Page 11 of 14 This is a digitally signed order.

27. Accordingly, the following are appointed as Local Commissioners, with a direction to visit the premises of Defendants mentioned against their names:

(a) Ms. Usha Jamnal, Advocate [Contact No.: +91-8744956276] to visit the premises of Defendant No.1 situated at M/s Osaka International, 815, 8th Floor, Antriksh Bhawan, Plot No. 22, K.G Marg, Barakhamba, Connaught Place, Atul Grove Road, New Delhi- 110001.

(b) Ms. Niharika Anand, Advocate [Contact No.: +91-9205477723] to visit the premises of Defendant No. 5 - M/s Escort Bearing (India) Private Limited, situated at Shop No. 4, Platinum Mall, Opp. VIA Playground Nr. Raghuvir Complex, GIDC Vapi, Valsad, Pardi, Gujarat - 39619.

(c) Mr. Vikramaditya Sanghi, Advocate [Contact No.: +91-8982852569] to visit the premises of Defendant No. 6 - M/s. Vidhisha Paper Mills Private Limited, situated at Daheli, Dhagadmad Chowkdi, Pardi-Nanapondha Road, Daheli, Tal, Killa-Pardi, Dist: Valsad, Gujarat - 396126.

(d) Mr. Shashwat Roy, Advocate [Contact No.: +91-9899109926] to visit the premises of Defendant No. 3 - M/s International Bearing Industries, situated at D-4, Kailash Esplanade, L.B.S. Marg, Opp. Shreyas Cinema, Ghatkopar (W), Mumbai-400086.

28. The Local Commissioners, along with a representative of the Plaintiffs and their counsel, shall be permitted to enter upon the premises of the Defendants mentioned above or any other location/ premises that may be identified during the course of commission, in order to conduct the search and seizure. The Local Commissioners shall conduct a search at the CS(COMM) 197/2024 Page 12 of 14 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 29/03/2024 at 21:00:52 respective Defendants' premises and seize the impugned goods, and any document/ packaging/ promotion material reflecting infringement and passing off of Plaintiffs' registered trademark "SKF" and its formative variants.

29. After seizing infringing material, the same shall be inventoried, sealed and signed by the Local Commissioners, in the presence of the parties, and released on superdari to the Defendants on their undertaking to produce the same as and when further directions are issued in this regard. The Local Commissioners shall also be permitted to make copies of the books of accounts including ledgers, cash registers, stock registers, invoices, books, etc. insofar as they pertain to the infringing products. Further, the Local Commissioners shall be permitted to undertake/arrange for photography/ videography of the execution of the commission. Both the parties shall render full assistance to the Local Commissioners for carrying out the aforenoted directions.

30. In case any of the premises are found locked, the Local Commissioners shall be permitted to break open the lock(s). To ensure an unhindered and effective execution of this order, the SHO of the local police station and the DCP is directed to render all protection to the Local Commissioners, if and when sought.

31. The fee of the Local Commissioners, to be borne by the Plaintiffs, is fixed Rs. 1,10,000/- for Ms. Usha Jamnal, Advocate and Rs. 1,50,000/- each for Ms. Niharika Anand, Mr. Vikramaditya Sanghi and Mr. Shashwat Roy. The Plaintiffs shall also bear expenses for travel and lodging of the Local Commissioner and other miscellaneous out-of-pocket expenses for the CS(COMM) 197/2024 Page 13 of 14 This is a digitally signed order.

32. The order passed today shall be not be uploaded for a period of two weeks from today.

33. The application stands disposed of in the above terms.

34. Dasti under the signatures of Court Master.

SANJEEV NARULA, J MARCH 5, 2024 as CS(COMM) 197/2024 Page 14 of 14 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 29/03/2024 at 21:00:53

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Delhi High Court - Orders