Delhi District Court
M K Auto Clutch Co And Anr vs Swapnil Jain And Ors on 13 September, 2024
IN THE COURT OF SH. SANJAY SHARMA-II : DJ (COMMERCIAL COURT)-11
(CENTRAL): TIS HAZARI COURTS, DELHI
CS (Comm.) No. 621/2020
CNR No.: DLCT01-002233-2020
1. MK Auto Clutch Co.
3, Flag Staff Road, Civil Lines
Delhi-110054
2. MK Auto Clutch Co.
12/1, Delhi Mathura Road
Faridabad-121 005, Haryana
..... Plaintiffs
VERSUS
1. Swapnil Jain
S/o Sh. Virendra Kumar Jain
Office: Building No. 1133/B
Gali No. 10, Naiwala, Karol Bagh
New Delhi-110006
2. Amit Singh
S/o Sh. Narendra Bahadur Singh
Office: T-2460, 3rd Floor
Subhash Mohalla, Karol Bagh
New Delhi-110006
..... Defendants
Date of Institution : 14.02.2020
Date of Arguments : 10.09.2024
Date of Judgment : 13.09.2024
JUDGMENT
CS (Comm.) No. 621/2020 MK Auto Clutch Co. & Anr. vs. Swapnil Jain & Anr. Page No. 1 of 11 THE SUIT:
1. The plaintiffs instituted a suit for permanent injunction seeking a decree of permanent injunction to restrain the defendants from manufacturing, marketing, refurbishing, supplying, selling, advertising or using their registered word mark or label mark MK and deceptively similar marks in relation to automobile parts and passing off their goods under the said marks as that of the plaintiffs, delivery up, rendition of accounts and damages.
THE PLAINT:
2. The plaintiff No. 1 and 2 are partnership firms. Mr. Vijay Bhandari, a partner of the said firms, is registered proprietor of trademark MK. He coined the trademark MK in relation to 'clutch' and 'brakes' in 1963. He authorized the plaintiff No. 1 and 2 to use trademark MK. The plaintiffs are manufacturing and suppling automotive clutches assembly, clutch plates, brake shoes, brake pads, brake linings, pressure die-casting, forging, machining and sheet metal components. The plaintiffs' products are also displayed on their website www.mkautoindia.com. The plaintiffs are continuously, openly, exclusively and uninterruptedly using the trademark MK and as such, they have built goodwill and reputation.
3. The plaintiffs' word mark and label mark MK are registered, as under:
Trademark Application Status Class Goods No. MK (Wordmark) 1898185 Registered 12 Clutch Plates, Clutch Discs, Clutch Facing, Sheet Metal Components, Drilled Brake Lining for 2 wheelers and 3 wheelers and all kick paddles CS (Comm.) No. 621/2020 MK Auto Clutch Co. & Anr. vs. Swapnil Jain & Anr. Page No. 2 of 11 3589994 Pending 12 Clutch Plates, Clutch Discs, Clutch Facing, Sheet Metal Components, Drilled Brake Lining for 2 wheelers and 3 wheelers and all kick paddles in class 12 3589998 Pending 12 Clutch Plates, Clutch Discs, Clutch Facing, Sheet Metal Components, Drilled Brake Lining for 2 wheelers and 3 wheelers and all kick paddles in class 12
4. The case of the plaintiffs is that the artwork in the said marks and labels is original artistic work and they are owner of copyright therein under 'The Copyright Act, 1957'.
5. The plaintiff No. 1 and 2 are maintaining highest standard of quality and their goods are sold across the country. The plaintiffs are advertising and promoting the said marks through print and electronic media. The sales figures of the plaintiffs qua the goods under the said marks is, as under:
Sl. No. Financial Year Plaintiff No. 1 Plaintiff No. 2
1. 2014-15 Rs. 51,83,20,224/- -
2. 2015-16 Rs. 74,56,87,932/- Rs. 15,600/-
3. 2016-17 Rs. 84,69,29,965/- Rs. 84,40,016/-
4. 2017-18 Rs. 85,90,55,080/- Rs. 5,65,68,556/-
5. 2018-19 Rs. 74,84,32,754/- Rs. 21,21,18,162/-
6. The plaintiffs are prior adopter and user of the said marks.
The said marks have acquired distinctiveness and associated with the plaintiffs. The said marks have acquired secondary meaning. The public associate the goods sold under the said marks to the plaintiff No. 1 and 2.
CS (Comm.) No. 621/2020 MK Auto Clutch Co. & Anr. vs. Swapnil Jain & Anr. Page No. 3 of 11
7. The plaintiff No. 1 and 2 have statutory and common law rights in the said marks. However, the defendants are engaged in selling, manufacturing, marketing, supplying and soliciting business by using their mark in relation to clutch plates. The defendants have no right to use their marks in relation to the said goods. The defendants are violating statutory and common law rights of the plaintiffs and passing off their goods as that of the plaintiffs. The defendants adopted and used the plaintiffs' marks with dishonest intention to trade upon goodwill, reputation and proprietary rights of the plaintiffs qua the said marks. The defendants are causing deception and confusion in the market. The plaintiffs are suffering huge losses in terms of business and reputation. The defendant No. 1 and 2 are selling low quality clutch plates in Karol Bagh, More Gate, Kashmere Gate etc. in a clandestine and surreptitious manner.
APPOINTMENT OF LOCAL COMMISSIONER:
8. This Court, vide order dated 19.02.2020, passed ex-parte ad-interim injunction and appointed local commissioner to visit and inspect the premises of the defendant No. 1 and 2. IMPLEADMENT OF THE DEFENDANT NO. 1 AND 2:
9. Initially, the Court passed a 'John Doe' order. However, the name of the defendant No. 1 and 2 were ascertained at the time of inspection of the premises by local commissioner and disclosed in his report. Thereafter, the defendant No. 1 and 2 were impleaded, on the application under Order 1 Rule 10 CPC, vide order dated 19.04.2021.
APPEARANCE OF THE DEFENDANT NO. 1 AND 2:
10. The defendant No. 2 appeared alongwith his counsel on 07.10.2021. The Court, vide order dated 07.10.2021, directed the defendant No. 2 to file written statement.
CS (Comm.) No. 621/2020 MK Auto Clutch Co. & Anr. vs. Swapnil Jain & Anr. Page No. 4 of 11
11. As per the report of process server, the defendant No. 1 was served with the summons of the suit on 17.11.2021. However, he neither appeared nor filed written statement within stipulated period.
EX-PARTE PROCEEDINGS:
12. The Court, vide order dated 25.02.2022, proceeded ex- parte against the defendant No. 1 and 2.
THE PLAINTIFFS' EVIDENCE:
13. The plaintiffs examined their authorized representative Mr. Satish Saluja as PW-1. He deposed, on strength of affidavit Ex.PW1/A. He relied on documents, as under:
Sl No. Description Exhibit 1. Photographs of the trademarks of the plaintiffs Ex.PW1/1
2. Photographs of the plaintiffs and the defendants Ex.PW1/2 products
3. Special Letter of Authority dated 16.01.2020 Ex.PW1/3
4. Special Letter of Authority dated 16.01.2020 Ex.PW1/4
5. Copy of Partnership Deed dated 14.11.2009 Mark A
6. Copy of Supplementary Agreement dated 19.07.2010 Ex.PW1/6
7. Partnership Deed dated 06.05.2011 Ex.PW1/7
8. Supplementary Agreement dated 26.06.2015 Ex.PW1/8
9. Screen shot of home page and contact us page of the Ex.PW1/9 plaintiffs' website www.mkautoindia.com
10. CA certificate for sales figures for FY 2014-2019 Ex.PW1/10
11. Registration certificate of word mark MK, vide Ex.PW1/11 Trademark Application No. 1898185 in Class 12
12. Copy of TM No. 3589994 regarding registration of Ex.PW1/12 device mark 'MK Leaders in Friction Technology'
13. Copy of TM No. 3589998 regarding registration of Ex.PW1/13 device mark 'MK Clutch Plate'
14. Invoices of magazines etc. for advertisement Ex.PW1/14
15. Advertisements of the plaintiffs in magazines during Ex.PW1/15 2015-19
16. Invoices issued by the plaintiff No. 1 during 2014-19 Ex.PW1/16
17. Invoices issued by the plaintiff No. 2 during 2014-19 Ex.PW1/17
18. Affidavit under Order 11 Rule 6 (3) of 'The Ex.PW1/18 Commercial Courts Act, 2015' CS (Comm.) No. 621/2020 MK Auto Clutch Co. & Anr. vs. Swapnil Jain & Anr. Page No. 5 of 11 APPEARANCE:
14. I have heard arguments of Ms. Nisha Sharma, Ld. Counsel for the plaintiffs and Mr. Amogh, Ld. Counsel for the defendant No. 1, and examined the pleadings and documents, and written arguments filed by the plaintiffs. CONTENTIONS OF THE PLAINTIFFS:
15. Ld. Counsel for the plaintiffs contended that the plaintiffs are exclusive owners of the word mark MK and device marks 'MK Leaders in Friction Technology' and 'MK Clutch Plate'.
She contended that the defendants are using similar mark in relation to the similar goods. She contended that report of local commissioner demonstrates that huge amount of counterfeit goods were recovered from the premises of the defendants. She contended that the defendants have not filed written statement and averments made in the plaint are deemed to be admitted. She contended that the plaintiffs examined their authorized representative Mr. Satish Saluja as PW-1 who proved registrations of trademarks. She contended that report of local commissioner is admissible in evidence. She contended that the defendants were selling counterfeit low quality products and thereby, they encashed goodwill and reputation of the plaintiffs and also diluted the goodwill and reputation earned by the plaintiffs. She contended that the plaintiffs should be duly compensated. In that regard, she relied upon judgments in The Heels vs. Mr. V.K. Abrol and Anr., CS (OS) No. 1385/2005 decided on 29.03.2006, Time Incorporated vs. Lokesh Srivastava and Anr., 116 (2005) DLT 599 and The Royal Bank of Scotland Group PLC vs. Sharekhan Ltd., 216 (2015) DLT
197. CS (Comm.) No. 621/2020 MK Auto Clutch Co. & Anr. vs. Swapnil Jain & Anr. Page No. 6 of 11 CONTENTIONS OF THE DEFENDANT NO. 1:
16. Ld. Counsel for the defendant No. 1 confined his prayer to the extent of quantum of compensation. He contended that the defendant No. 1 is unemployed and he is not financially sound.
He contended that the defendant No. 1 is not able to make payment of any compensation to the plaintiffs. He contended that the defendant No. 1 is not indulging in any counterfeiting and he has no objection to grant of prayer of injunction to the plaintiffs. However, he prayed for a lenient view insofar as quantum of compensation is concerned.
ANALYSIS AND CONCLUSION:
17. Mr. Vijay Bhandari, one of the partners of the plaintiff No. 1 is registered proprietor of device marks and label mark MK, as under:
Trademark Application Status Class Goods No. MK (Wordmark) 1898185 Registered 12 Clutch Plates, Clutch Discs, Clutch Facing, Sheet Metal Components, Drilled Brake Lining for 2 wheelers and 3 wheelers and all kick paddles 3589994 Pending 12 Clutch Plates, Clutch Discs, Clutch Facing, Sheet Metal Components, Drilled Brake Lining for 2 wheelers and 3 wheelers and all kick paddles in class 12 3589998 Pending 12 Clutch Plates, Clutch Discs, Clutch Facing, Sheet Metal Components, Drilled Brake Lining for 2 wheelers and 3 wheelers and all kick paddles in class 12 CS (Comm.) No. 621/2020 MK Auto Clutch Co. & Anr. vs. Swapnil Jain & Anr. Page No. 7 of 11
18. PW-1 Satish Saluja, authorized representative of the plaintiffs proved trademarks registrations Ex.PW1/11 to Ex.PW1/13.
19. Local Commissioner conducted inspection of the premises of the defendants on 21.02.2020. According to report, he seized 1100 pieces of clutch plates from the premises of the defendant No. 1 and 247 pieces of clutch plates from the premises of the defendant No. 2.
20. The photographs of the counterfeit products enclosed by local commissioner would show that the defendants imitated word mark and device marks of the plaintiffs and as such, they were selling the clutch plates used in two - three wheelers bearing the word mark and device marks of the plaintiffs. The defendants were passing off their goods under the counterfeit marks as that of the plaintiffs.
21. In Puma SE vs. Ashok Kumar, 2023 SCC OnLine Del 6764, Hon'ble High Court of Delhi held that the Local Commissioner's report can be read in evidence under Order 26 Rule 10 (2) CPC, as under:
"22. The settled legal position is that the Local Commissioner's report can be read in evidence in terms of Order XXVI Rule 10(2) CPC. In ML Brother LLP v. Mahesh Kumar Bhrualal Tanna [CS(COMM) 126/2022] this Court held as under: "11. In Levi Strauss & Co. v. Rajesh Agarwal 2018 IAD (Delhi) 622, this Court examined the said provision and held that once the Commissioner has filed the evidence along with his report, it becomes evidence in the suit itself. Under Order 26 Rule 10(2) CPC it is not mandatory to examine the Commissioner to admit the report of the Commissioner as evidence in the suit....."
CS (Comm.) No. 621/2020 MK Auto Clutch Co. & Anr. vs. Swapnil Jain & Anr. Page No. 8 of 11
22. Therefore, it is proved that the defendants were selling clutch plates bearing word mark and device marks of the plaintiffs. The defendants breached statutory and common law rights of the plaintiffs and also diluted the trademarks of the plaintiffs.
23. As regards damages, in Cartier International A.G. & Others vs. Gaurav Bhatia & Ors., (2016) 226 DLT 662, Hon'ble High Court of Delhi held, as under:
"66. It is well settled that damages in such cases must be awarded and a defendant, who chooses to stay away from the proceedings of the Court, should not be permitted to enjoy the benefits of evasion of court proceedings. Any view to the contrary would result in a situation where the defendant who appears in Court and submits its account books would be liable for damages, while a party which chooses to stay away from court proceedings would escape the liability on account of failure of the availability of account books."
24. In Inter Ikea Systems BV Anr vs. Imtiaz Ahamed and Another, (2017) 237 DLT 247, Hon'ble High Court of Delhi held, as under:
"21. It is well settled that damages in cases like the present one must be awarded and a defendant, who elects to stay away from the court proceedings, should not be permitted to enjoy the benefits of staying away from the said proceedings. With regard to the relief of damages claimed by the plaintiffs herein, it may be noted that courts have been granting both, exemplary and punitive damages against the defendant in ex-parte matters of similar nature....."
25. Therefore, in the facts and circumstances of the case and case law relied by the plaintiffs, the quantum of seizure, expenses incurred by the plaintiffs, financial loss as well as loss of goodwill and reputation of the plaintiffs, the defendant No. 1 and 2 must pay damages in the sum of Rs. 2,00,000/- each to the plaintiffs.
CS (Comm.) No. 621/2020 MK Auto Clutch Co. & Anr. vs. Swapnil Jain & Anr. Page No. 9 of 11 CONCLUSION:
26. Therefore, the suit of the plaintiffs is decreed with costs including expenses of local commissioner and a decree of permanent injunction is passed in favour of the plaintiffs and against the defendants and the defendants are restrained from manufacturing, marketing, refurbishing, supplying, selling, advertising or using the registered word mark or label mark MK and deceptively similar marks in relation to automobile parts and passing off their goods under the said marks as that of the plaintiffs and the defendant No. 1 and 2 are directed to pay damages in the sum of Rs. 2,00,000/- each to the plaintiffs.
Decree sheet be prepared.
Digitally signed27. File be consigned to record room. by SANJAY SHARMA SANJAY Date:
SHARMA 2024.09.13
15:45:55
+0530
Announced in the open Court SANJAY SHARMA-II
on this 13th September, 2024 DJ (Commercial Court)-11 (Central) Tis Hazari Courts, Delhi CS (Comm.) No. 621/2020 MK Auto Clutch Co. & Anr. vs. Swapnil Jain & Anr. Page No. 10 of 11 MK Auto Clutch Co. & Anr. vs. Swapnil Jain & Anr. CNR No.: DLCT01-002233-2020 CS (Comm.) No. 621/2020 13.09.2024 Proceedings convened through Video Conferencing. Present : Ms. Nisha Sharma, Ld. Counsel for the plaintiffs.
Mr. Amogh, Ld. Counsel for the defendant No. 1.
Vide separate judgment, the suit of the plaintiffs is decreed with costs including expenses of local commissioner and a decree of permanent injunction is passed in favour of the plaintiffs and against the defendants and the defendants are restrained from manufacturing, marketing, refurbishing, supplying, selling, advertising or using the registered word mark or label mark MK and deceptively similar marks in relation to automobile parts and passing off their goods under the said marks as that of the plaintiffs and the defendant No. 1 and 2 are directed to pay damages in the sum of Rs. 2,00,000/- each to the plaintiffs. Decree sheet be prepared. File be Digitally signed consigned to record room. by SANJAY SHARMA SANJAY Date:
SHARMA 2024.09.13
15:46:04
+0530
Sanjay Sharma-II
DJ (Commercial Court)-11
Central, THC, Delhi
13.09.2024
CS (Comm.) No. 621/2020 MK Auto Clutch Co. & Anr. vs. Swapnil Jain & Anr. Page No. 11 of 11