"Gross Suppression Of Material Facts": Delhi High Court Vacates Ex-Parte Ad-Interim Injunction Granted In Favour Of Kent RO

The Delhi High Court has vacated an ex-parte ad-interim injunction granted in favour of Kent RO System Limited on the grounds of gross suppression and concealment of material facts.

Justice Amit Bansal was dealing with a suit filed by Kent RO System Limited claiming that the trademark KENT was adopted by it in the year 1988 in respect of products relating to petroleum conservation. In 1999, the plaintiffs started using the mark KENT in respect of its water purifier systems.

The defendant no 1 claimed to own and control an enterprise, Kent Appliances. The defendants no.2 and 3 carried on business under the name and style of Shilpa Electricals in respect of sale of electrical and home appliances.

It was the plaintiff's case that besides holding the trade mark registration for the mark KENT, it also held the copyright registration in respect of its logo. In and around March, 2019, the plaintiffs came to know of the defendants selling products such as thermo flasks and other home appliances under the identical mark of KENT.

The defendants had adopted the mark KENT in the same colour scheme of blue and white of the plaintiffs.

Vide order dated 13th August, 2019, the High Court had passed an ex-parte ad-interim injunction restraining the defendants from manufacturing, selling, offering for sale, advertising or in any manner dealing on product bearing a mark KENT or KENT APPLIANCES or variants thereof or any other mark or logo or trade name.

It was argued by the defendants that a wrong impression was conveyed by the plaintiffs to the Court in the sense that the plaintiffs never came across any product of the defendants till March, 2019 and that the registration application filed on behalf of the defendants had been abandoned by them, when in fact the defendants were the registered proprietors of the trade mark KENT since 2004.

On the issue of suppression and concealment raised on behalf of the defendants against the plaintiffs, the Court noted that there was a clear acknowledgement on behalf of the plaintiffs in the communications that the defendants were in the business of manufacturing and marketing domestic utensils and containers under the mark KENT and had registered the said mark in Classes 7 and 21 in respect of various kitchen appliances.

"It is also acknowledged that the plaintiffs are using the mark "KENT" in respect of water and air purifier systems and other healthcare products alone. Further, the plaintiffs have intended to commit that the plaintiffs shall not use the mark "KENT" or variants thereof in respect of goods for which the defendants have registered the said mark in Classes 7 and 21. Similarly, it is noted that the defendants shall not use the mark "KENT" in respect of water and air purifiers or any goods other than mixers, grinders, juicers, blenders, chutney attachment motors, ghar ghanti and parts of such goods in Class 7 and in respect of any goods falling in Class 11," the Court noted.

The Court said that it was evident from the Draft Agreement that the plaintiffs at the given point of time were not using the mark KENT for kitchen appliances, and that this is a clear acknowledgement on behalf of the plaintiffs to the user of the mark KENT by the defendants.

"The use by the defendants of the mark "KENT" has been acknowledged by the plaintiffs themselves in the Draft Agreement sent vide the email dated 11th May, 2012 by the representative of the plaintiff no.1. In view of the above, I am of the view that the ex parte ad-interim injunction order was obtained by the plaintiff on gross suppression and concealment of relevant facts," the Court observed.

The Court was of the view that as per the first proviso to Order XXXIX Rule 4 of the CPC, if in an application for temporary injunction or in any affidavit supporting such application, a party has knowingly made a false or misleading statement in relation to a material particular and the injunction was granted without giving notice to the opposite party, the Court shall vacate the injunction unless, for reasons to be recorded, it considers that it is not necessary so to do in the interests of justice.

It also said that a party that approaches the Court for a grant of discretionary relief has to come with clean hands and disclose all material facts, which would have a bearing on the merits of the case.

"In the present case also, the aforesaid documents were deliberately not disclosed by the plaintiffs to the Court as the same were detrimental to the case of the plaintiffs. If the aforesaid documents were disclosed, it is possible that the Court would not have granted the ex parte ad-interim injunction in favour of the plaintiffs. Concealment of material facts and documents is a serious matter and sufficient for disqualifying a litigant from obtaining relief," the Court said.

It added "Furthermore, there should be a tacit or an express assent by the plaintiff to the defendant's using the mark and in a way encouraging the defendants to continue with the business. In such a case the infringer acts upon an honest mistaken belief that he is not infringing the trade mark of the plaintiff and if, after a period of time when the infringer has established the business reputation, the plaintiff turns around and brings an action for injunction, the defendant would be entitled to raise the defence of acquiescence."

Therefore, the Court said that in terms of sec. 28(1) of the Trade Marks Act, the defendants had the right to use the trade marks as a registered proprietor. Furthermore, it added that in terms of sec. 29(1) of the Trade Marks Act, no injunction could be granted in respect of the user of a registered proprietor of a trade mark.

"In the present case, the defendants have been conducting their enterprise using the mark „KENT‟ since atleast when the Draft Agreement was shared vide the email dated 11th May, 2012. Therefore, the balance of convenience lies in favour of the defendants. Resultantly, at this prima facie stage, no interim injunction can be passed against the defendants restraining the defendants from using the mark „KENT‟ in respect of their products," the Court observed.

Furthermore, the Court adjudicated upon the contention raised on behalf of the plaintiffs that the defendants had also adopted the colour scheme of their trademark, being white letters on a blue background, in a mala fide manner to give an impression to the public that the said products emanate from the plaintiffs.

The Court noted that while the plaintiffs had filed documents to evidence user of the mark KENT in the said colour scheme in respect of its water purifier systems since 1999, the defendants had not brought anything on record to show their user of the registered trade mark KENT in the said colour scheme prior to that of the plaintiffs.

"Thus, this Court is of the prima facie view that the plaintiffs are the prior user of the mark "KENT" in the said colour scheme. Consequently, this Court, keeping in mind that the products of the defendants and the plaintiffs are available and sold at the same shops and establishments, is of the prima facie view that the user of the mark "KENT" in the said colour scheme by the defendants is likely to cause confusion amongst the public that the goods offered by the defendants are the goods of the plaintiffs," the Court said.

Though, the Court held that the defendants cannot be restrained from using the word mark KENT, it said that a prima facie case of passing off was made out in favour of the plaintiffs in so far as the colour scheme adopted by the defendants was concerned.

Consequently, the Court modified the order dated 13th August, 2019 to the extent that the ex-parte ad-interim injunction restraining the defendants from manufacturing, selling, offering for sale, advertising or in any manner dealing on product bearing a mark KENT or KENT APPLIANCES or variants thereof or any other mark or logo or trade name, which was deceptively similar to the trade mark of the plaintiffs, stands vacated.

"However, an injunction is granted restraining the defendants from using the colour scheme of white and blue or any deceptively similar colour scheme to that used by the plaintiffs," the Court said.

Case Title: KENT RO SYSTEM LTD. & ANR. v. GATTUBHAI & ORS.

Citation: 2022 LiveLaw (Del) 234

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