Delhi District Court
M/S Givo Limited vs Arun Singhal on 19 January, 2015
IN THE COURT OF MANOJ JAIN: ASJ/SPECIAL JUDGE (PC ACT) (CBI)
SOUTH DISTRICT: SAKET DISTRICT COURTS
NEW DELHI
(A) Criminal Revision No. 58/14
Unique ID No. 02406R0240712014
M/s Givo Limited,
42nd Mile Stone, Kherki Daula,
Delhi-Jaipur Highway, Gurgaon,
Haryana. .............Revisionist/Complainant
Versus
1 Arun Singhal,
Son of Sh. S.K. Singhal,
C/o M/s Ahuja Apparels,
17A/28 W.E.A. Ajmal Khan Road,
Karol Bagh, New Delhi-110005
Resident of H. No. 348, Sector-14,
Gurgaon, Haryana. ..............Respondent/Accused No. (1)
2 Mukesh Gaur,
Son of Ram Pal Gaur,
C/o M/s Parichaya,
A-274, 1st Floor, National Highway-8,
Mahipal Pur, New Delhi-110037.
Resident of WZ-84/4F, Gali No. 20,
Indra Park, Palam Colony,
New Delhi-110045. .............. Respondent/Accused No. (3)
3 Anis Ahmed,
Son of Sh. Rafiq Ahmed,
C/o M/s R & Sons,
56 Ground Floor,
Resident of H. No. 38, M-Block,
Abdul Fazal Enclave-1,
New Delhi. ................Respondent/Accused No. (2)
4 Rakesh Kumar Mittal,
Son of late Sh. P.N. Mittal,
C/o M/s Kanha International,
Page 1 of 15
98, 1st Floor, Kalka Garhi Chowk,
Ambedkar Road, Ghaziabad, UP.
Resident of KD-25/13, Kavi Nagar,
Ghaziabad, UP .............Respondent/Accused No. (4)
5 State .............Respondent No. (5)
(B) Criminal Revision No. 80/14
Unique ID No. 02406R0328902014
1 Mukesh Gaur ..............Revisionist/Accused No. (3)
2 Arun Singhal ..............Revisionist/Accused No. (1)
Versus
State (Govt of NCT of Delhi) ..........................Respondent
(C) Criminal Revision No. 54/14
Unique ID No. 02406R0219412014
Rakesh Kumar Mittal, .............Revisionist /Accused No. (4)
Versus
State (Govt of NCT of Delhi) ......................................Respondent
Memo of appearance
1 Sh. Jayant Sud, learned counsel for complainant M/s Givo Limited.
2 Sh. Mujeeb Khan, learned counsel for accused no. 1 & 3.
3 Sh. Mohd. Farukh, learned counsel for accused no. 2.
4 Sh. Anil Kumar Hosley, learned counsel for accused no. 4.
5 Ms. Anupama Singh, learned Addl. P.P. for State/respondent.
Page 2 of 15
JUDGMENT
1 These are three revision petitions. Since they all emanate from the same impugned order, these three petitions have been taken up together and are being disposed of by this common judgment.
2 For the sake of convenience, I would be referring to the parties as per their nomenclature appearing in the charge-sheet filed in relation to FIR No. 48/2007 PS Hauz Khas pending adjudication before the Court of learned Chief Metropolitan Magistrate (South District).
3 Said FIR had been registered on the basis of complaint of M/s GIVO Limited. According to the case of complainant company, it was one of the most reputed and leading manufacturer of readymade garments and had been producing and marketing the product bearing distinctive Trade Mark and also artistic style, namely, GIVO which are also duly registered with the Registrar of Trade Marks, Government of India.
4 Complainant entered into an agreement on 25.03.2004 with M/s Ahuja Apparels Pvt. Ltd (represented & owned by accused no. 1 Arun Singhal). In terms of agreement, M/s Ahuja Apparel Pvt. Ltd. had been given permission to use Trade Mark GIVO for manufacture and sale of men's shirts and trousers. Such agreement was valid upto 31.03.2006. It was never extended or renewed. Despite that accused no. 1 Arun Singhal, even after expiry of said agreement, kept on manufacturing the garments under the name, style and trade mark of GIVO and kept on selling the same. Complainant even got published public notice in a leading daily on 12.08.2006 and 09.12.2006 informing the public that license granted to M/s Ahuja Apparels Pvt. Ltd. stood revoked w.e.f. 31.03.2006 but despite that Page 3 of 15 accused no. 1 Arun Singhal did not budge and continued to manufacture, market and sell the GIVO garments openly in the market without any licence and authorization with a view to cheat the general public by illegally encashing the goodwill of the brand of the complainant company.
5 Complainant company had to approach the Court as police did not register any FIR. On the basis of order under Section 156 (3) Cr.P.C., police eventually registered FIR No. 48/2007 on 25.01.2007. Initially, untraced report was filed on 10.08.2007 but pursuant to the protest petition filed by the complainant company, learned trial court directed further investigation and returned such untraced report.
6 Investigating agency, astonishingly, took around five years in completing the investigation and filed charge-sheet on 01.03.2013 concluding that there was sufficient evidence against accused no. 1 Arun Singhal, accused no. 3 Mukesh Gaur, accused no. 2 Anis Ahmed and accused no. 4 Rakesh Kumar Mittal for offences under Section 63 of Copyright Act 1957 and u/s 103/104 Trade Marks Act 1999.
7 Court took cognizance of the matter and summoned all the accused persons.
8 Arguments on charge were heard and vide impugned order dated 26.05.2014, learned trial court came to the conclusion that there was a prima facie case u/s 103/104 Trade Marks Act and u/s 63 Copyright Act against accused no. 1 Arun Singhal. Other three accused were ordered to be charged under Section 104 Trade Marks Act and Section 63 of Copyright Act only. Charges were framed on two separate dates i.e. 27.06.2014 and 24.09.2014. All the four accused pleaded not guilty and claimed trial.
Page 4 of 159 Both the sides are aggrieved by the order on charge.
10 According to complainant company, there is a clear cut case of cheating against all the accused persons and, therefore, besides the aforesaid charges, all the accused should also be additionally charged u/s 420 r/w Section 120-B IPC. It has also been contended that accused no. 1 Arun Singhal should also be further charged u/s 406 IPC for committing breach of trust.
11 Accused persons have also taken exception to the impugned order and have prayed for their complete discharge.
12 CR No. 80/14 has been filed jointly by accused no. 1 Arun Singhal and accused no. 3 Mukesh Gaur. Accused no. 4 Rakesh Kumar Mittal has filed separate revision petition registered as CR No. 54/14.
13 As far as accused no. 2 Anis Ahmed is concerned, he has not filed any revision but since he has been arraigned as a respondent in the revision petition by the complainant, he has also supported the stand of his co-accused persons and has prayed for his discharge.
14 According to Sh. Mujeeb Khan, counsel for accused no. 1 Arun Singhal and accused no. 3 Mukesh Gaur, both the accused have not committed any offence. He has contended that as far as accused no. 1 Arun Singhal is concerned, he did not manufacture any garment after the expiry of the contract. It has been argued that when the complainant disclosed its intention not to renew or extend the contract, accused no. 1 Arun Singhal immediately declared the unsold stock to the complainant company and complainant company orally assured him to sell such unsold stock even after Page 5 of 15 the expiry of licence. In this regard, he has also relied upon various e-mails which were exchanged between the parties and, therefore, it has been claimed that as far as accused no. 1 Arun Singhal is concerned, he did not commit any offence. It has also been additionally argued that even otherwise as per agreement/contract, there was no stipulation with respect to the use of such unsold stock after the expiry of licence period and moreover as per the agreement, all the disputes were subject to the jurisdiction of Gurgaon and, therefore, Courts at Delhi were not, even otherwise, competent to try the matter.
15 Ms. Anupama Singh has, however, justified the reasoning given by learned trial court.
16 I have given my thoughtful consideration to the rival contentions and carefully perused the trial court record.
17 As per Mr. Sud, contract between complainant company and accused no. 1 ended on 31.03.2006. I have also seen the copy of the contract which is in the trial court record. Agreement was valid for two years and half month and was to expire on 31.03.2006. There was also a provision that this agreement could be reviewed and renewed annually. However, fact remains that it was never renewed. According to Sh. Sud, such agreement stood expired by efflux of time and the audit reflected serious discrepancies and, therefore, after review, complainant decided not to renew the agreement. He has also claimed that rather the exchange of e-mails would corroborate the same and since the agreement was for fixed period, accused no. 1 had no reason or authorization to deal with the goods having trade mark GIVO in any manner whatsoever after the expiry of contract. It has also been claimed that even if it is assumed that any unsold stock was declared by accused no. 1, Page 6 of 15 that would not tantamount to give license to him to sell the same. He has out-rightly denied any alleged verbal assurance by complainant permitting accused no. 1 to sell such unsold stock even after the expiry of contract. It has been argued by Sh. Sud that by way of abundant caution, a notice dated 06.09.2006 was also sent to accused no. 1 advising him to abstain from using trade mark of complainant in any manner whatsoever. He has also relied upon the two subsequent public notices which appeared in newspaper whereby the public at large was also informed about the expiry of such license.
18 Documents collected during the investigation also go on to show that M/s Ahuja Apparels Pvt. Ltd. (owned by accused no. 1) had been dealing in such goods having trade mark GIVO. I have seen various ledger account/ invoices etc. which indicate that M/s Ahuja Apparels Pvt. Ltd. had been selling the same to M/s Kanha International (owned by accused no. 4) which further sold the same to M/s R & Sons (owned by accused no. 2).
19 Undoubtedly, the contract was not specific as to what was to be done with the unsold stock of Givo but nonetheless the contract period was very explicit and unambiguous. It expired on 31.03.2006 and it was never renewed. Since it was never renewed, accused no. 1 had no authorization to manufacture and market any product bearing trade mark GIVO in gross violation of the terms of the contract and to the detriment of complainant. If according to him, there was any verbal assurance to sell off such stock, such fact can only be proved by him during the trial and at this stage his such verbal defence cannot be taken as a gospel truth. He thus tried to encash the goodwill of complainant and cheated complainant and committed an evident breach of trust as well and, therefore, qua him sections 420/406 IPC also stand attracted. Merely because prosecution has been provided under Page 7 of 15 special Acts would not mean that any such person cannot be prosecuted under IPC. Reference in this regard be made to Jolen International Ltd. & Ors. Vs. State & Ors. 2009 (5) AD (Delhi) 94. Charges in this regard are required to be framed against him albeit in alternate.
20 Sh. Mubjeeb Khan has contended that as far as accused no. 3 Mukesh Gaur is concerned, he has been unnecessarily dragged into present litigation. According to him, he never knew about any contract between complainant and accused no. 1 Arun Singhal much less about its non- renewal. According to him, accused no. 3 Mukesh Gaur had received the merchandise in the normal course of business and there was no malafide intention on his part at all and, therefore, he cannot be held liable even if he was found in possession of any such stock. According to him, accused no. 3 Mukesh Gaur never learnt about any such fact till his premises were raided. It has also been argued that there was a Memorandum of Understanding (MoU) between complainant and accused no. 3 Mukesh Gaur on 11.10.2007 which also indicates that complainant had full faith in him and, therefore, there was no occasion to have charged him for any offence.
21 As already noticed above, contract ended on 31.03.2006 and the raid had been conducted on 10.02.2007. Subsequent MoU is, therefore, of not much significance.
22 Here, I would like to highlight that M/s Givo Ltd. had filed CS (OS) No. 218/2007 in the Hon'ble High Court of Delhi and taking note of the averments appearing in the plaint, the Hon'ble High Court of Delhi appointed three Local Commissioners and they were directed to seize the infringing goods lying in the premises of defendants i.e. M/s Ahuja Apparels Pvt. Ltd., M/s Parichay & M/s R & Sons. They were also permitted to take police Page 8 of 15 assistance. Such order is dated 07.02.2007 and pursuant to that, Local Commissioners raided the premises of said three defendants and seized the infringing goods. Copies of such reports are also found to be on record which reveal that such premises had been raided and infringing garments having trademark/ logo of GIVO had been recovered. Such recovery and possession cannot be discarded at this stage.
23 As far as M/s Kanha International (owned by accused no. 4) is concerned, Sh. Anil Kumar Hosley, learned counsel has contended that investigating agency committed a blunder by arraigning Sh. Rakesh Kumar Mittal as an accused. According to Sh. Hosley, he did not commit any violation of any of the provision of Copyright Act and Trade Marks Act. There is no recovery of any infringing article from his possession. So much so, he was not even party to the civil suit pending before Hon'ble High Court of Delhi and, therefore, criminal proceedings were not maintainable qua him from any angle whatsoever. I have considered his such contention. However, fact remains that there are number of invoices on record which indicate that M/s Kanha International had been receiving the merchandise having trademark/logo GIVO from M/s Ahuja Apparels Pvt. Ltd. and were passing the same to M/s R & Sons (owned by accused no. 2 Anis Ahmed).
24 It would be also useful to see the relevant provisions of Trade Marks Act 1999. Section 101 defines act of applying trademark and trade descriptions. Section 102 defines act of falsifying and falsely applying trade marks. As per Section 104 of Trade Marks Act, any person who sells or even exposes for sale or has in his possession for sale, goods or things to which any false trademark is applied would be held liable under such Sections. The bare provision indicates that if any person has in his possession any such goods for sale to which any false trademark is found applied would be liable.
Page 9 of 15Thus, the possession of such goods, in itself, is punishable. It really does not matter whether such trademark was applied by that person or by someone else and as long as any such person is in possession of any such goods for the purpose of sale, the offence is complete. Naturally, any such accused can always substantiate, during the trial, as under:-
(a) that, having taken all reasonable precautions against committing an offence against this section, he had at the time of commission of the alleged offence no reason to suspect the genuineness of the trade mark or trade description or that any offence had been committed in respect of the goods or services;
or
(b) that, on demand by or on behalf of the prosecutor, he gave all the information in his power with respect to the person from whom he obtained such goods or things or services; or
(c) that otherwise he had acted innocently.
25 As per Section 102 Trade Marks Act, a person would also be deemed to falsify who, without any assent of the proprietor of the trademark, makes that trademark. Here, since the contract had already come to end, accused no. 1 was no longer authorized to manufacture goods and apply trademark GIVO and, therefore, he had no reason or occasion to posses any such merchandise or garments for sale.
26 As regards infringement of copyright is concerned, Sh. Mohd. Farukh, learned counsel for A-2 has relied upon following three judgments:
(i) M/s Bikaner Steel Mills Vs. State of Punjab 2007 (1) RCR (Criminal) 773 (P&H)
(ii) Satpal & Anr. Vs. State of Punjab & Ors. (2011) 161 PLR 472 (P&H) Page 10 of 15
(iii) Anil Kumar Vs. State of Punjab & Anr. 2012 (51) PTC 159 (P&H)
27 He has contended that provisions of Copyright Act are applicable in original literary, dramatic, musical and artistic works, cinematograph films and sound recording and these provisions are not applicable for any other category. The aforesaid judgments have been cited in order to show that provisions of Copyright Act have been held as not applicable in context of shoes, chappals and even steel bars. Applying the same analogy, he has contended that even for the purpose of garments, there cannot be any copyright. He has also argued that there is nothing on record to show that the complainant had ever got his any alleged copyright registered in India.
28 Sh. Sud has, on the other hand, relied upon Section 40 of Copyright Act which talks about International Copyright and he has contended that company owned artistic work on packaging of its products and also on get-up and lay-out which fell within Section 2 (c) of Copyright Act 1957 and such original artistic work had been produced by the complainant company and no one else. It has been supplemented that in terms of Berne Convention, to which India is also signatory, such artistic work becomes copyright automatically. He has also relied on International Copyright order passed by Indian Government u/s 40 of Copyright Act whereby such artistic work is duly covered under Copyright Act. Sh. Sud has also relied upon Sunil Kumar Gupta & Anr. Vs. State 74 (1998) DLT 838 wherein it has been observed that copyright serves a varieties of industries including manufacturing industries as well as commerce & trade. He has thus argued that the particular style and pattern in which word "GIVO" is being consistently used has assumed the status of artistic work.
Page 11 of 1529 Reference be, however, made to Section 13 of Copyright Act according to which, copyright shall subsist for the following classes of work i.e. original literary, dramatic, musical and artistic work, cinematograph films and sound recording. Garments as such do not fall in such type of classes of work from any angle whatsoever.
30 I have also seen the Statements of Objects & Reasons of said Act and it is quite evident that Copyright Act is essentially meant for dramatic work, literary work, musical work, photograph and cinematograph film and sound recording. Style in which word "GIVO" is mentioned primarily falls within the scope and ambit of Trade Marks Act 1999 and cannot be confused with copyright. Aforesaid judgments of Punjab & Haryana High Court also clearly go on to show that copyright is not meant for any other class. Admittedly, copyright serves varieties of industries but then it has to be relation to the categories prescribed under said Act only. Complainant has vaguely tried to take shelter behind International Copyright Order 1999 and Section 40 of Copyright Act. Penal statute has to be construed strictly and there is no scope of inference. Trademark GIVO is reportedly registered in Singapore as per the renewal certificate issued by Registrar of Trade Marks, Intellectual Property Office of Singapore. Nothing has been shown which may indicate that GIVO was ever registered as 'copyright' in India or abroad at any point of time and, therefore, Section 40 of Copyright Act cannot be pressed into service. Moreover, trial court record does not come to the rescue of complainant in this regard either and there is no material showing subsistence of any copyright in favour of complainant.
31 Investigating agency has not collected any document which may show that complainant company was having any registered copyright in India or abroad.
Page 12 of 1532 Though artistic design adopted by any particular company may be peculiar and distinct in one way or the other yet, essentially, it falls within the scope and ambit of trademarks unless it falls in the aforesaid classes of works prescribed under Copyright Act and is registered as well. As already noticed above, nothing has been shown which may, at this stage, compel the Court to hold that Section 40 of Copyright Act is also attracted. Needless to say that if during the trial any such fact surfaces, the Court can suo moto or on the basis of any application moved by the complainant company take appropriate steps for adding charges.
33 Much has been argued from the side of the accused persons that investigation is completely faulty as the search and seizure could have been done only by a police official not below the rank of Deputy Superintendent of Police or equivalent. Reference in this regard has been made to Section 115 of Trade Marks Act. In the instant case, as far as investigating agency is concerned, it did not, itself, search and seize any infringing goods. Rather it was only pursuant to the directions given by Hon'ble High Court of Delhi in the aforesaid suit that Local Commissioners had visited the premises of the three defendants and had seized the infringing material. Such reports are on record and such Local Commissioners have also been cited as witnesses in the present case and, therefore, strictly speaking Section 115 (3) of Trade Marks Act does not even come into play in the present case.
34 As regards jurisdiction, suffice it to say that infringing goods had been recovered from Karol Bagh area also and, therefore, Courts at Delhi have clear cut jurisdiction. Moreover, jurisdiction in criminal matters is not governed by any private agreement and is rather to be deciphered on the basis of the provisions contained under Criminal Procedure Code.
Page 13 of 1535 As regards conspiracy, I would agree with the defence contentions emanating from accused no. 1 to 4. There is recovery of infringing goods from the possession of accused no. 1, 2 & 3. Accused no. 4 was also dealing in such goods. However, merely because accused no. 2 & 3 had obtained the alleged infringing goods through accused no. 4 would not, in itself, be sufficient to infer the element of conspiracy. Except for the recovery and invoices, there is nothing which may indicate that there was any conspiracy or that they had received the goods knowingly and consciously and that they had in their possession such goods in terms of any conspiracy for cheating the complainant company. Therefore, accused no. 2, 3 & 4 cannot be charged under Sections 420/120B IPC.
36 It is thus held that accused no. 1 would face trial for committing offences u/s 103/104 Trade Marks Act and also u/s 420 IPC in alternate u/s 406 IPC. Remaining three accused would face trial for offence u/s 104 of Trade Marks Act only.
37 All the petitions stand disposed of accordingly.
38 Main judgment may be placed in the record of Criminal Revision No. 58/2014 and attested copy thereof may be placed in the other two connected revision petitions.
39 A copy of the judgment be also sent to learned trial court along with trial court record to re-frame the charges accordingly and to proceed further in accordance with law.
Page 14 of 1540 A copy of the judgment be also given dasti to all the revisionists.
41 Files pertaining to revision petitions be consigned to Record Room.
Announced in the open Court On this 19th day of January, 2015.
(MANOJ JAIN) ASJ/Special Judge (PC Act) (CBI) South Distt: Saket Courts: New Delhi Page 15 of 15