Bombay HC Grants Ad-Interim Injunction Against Counterfeit 'Gold Flake' Cigarette Manufacturing: ITC Limited v. Abbas Mohammad Shaikh

Bombay High Court Halts Clandestine 'Gold Flake' Counterfeiting Operation

In a swift and decisive move to protect both intellectual property and public health, the High Court of Judicature at Bombay has granted an ad-interim injunction in favor of ITC Limited, restraining the production and sale of counterfeit cigarettes sold under the brand name "GOLD FLAKE."

Justice Sharmila U. Deshmukh, presiding over the Commercial Division, issued the order after reviewing evidence of a sophisticated, unlicensed manufacturing unit that was disguising hazardous sawdust and chemicals as branded consumer goods.

A Raid Uncovers a Hidden Danger

The legal action stems from a raid conducted on October 24, 2024, by the Karjat Police. Acting on a complaint filed by ITC Limited, authorities discovered a large-scale illegal farmhouse operation filled with raw materials, machinery, and finished counterfeit products valued at approximately Rs. 4.94 Crores.

According to filings before the Court, the defendants had purportedly established the unit clandestinely in a farmhouse located in Raigad. The subsequent criminal proceedings culminated in the filing of a charge-sheet on May 2, 2025, which identified several individuals—including the landowners and other alleged conspirators—as primary actors in the illicit trade.

The Arguments: Reputation vs. Illicit Operations

Representing ITC Limited, Senior Advocate Mr. Ravi Kadam argued that the Plaintiff has held the "GOLD FLAKE" trademark since 1905, establishing massive global reputation and goodwill. The company reported a staggering sales turnover of Rs. 40,186 Crores for the 2023-2024 fiscal year.

The Plaintiff asserted that the continued operation of these counterfeiters posed not only a proprietary threat but a severe risk to consumers, as the illicit cigarettes were found to be filled with "mixed sawdust and chemicals." With the manufacturing unit located in the vicinity of Mumbai, the Plaintiff expressed grave concerns that these hazardous products were actively flowing into the stream of commerce.

Court’s Legal Reasoning

The Court found that the Plaintiff had made a "strong overwhelming prima facie case" for relief. Justice Deshmukh highlighted the insurmountable evidence provided by the police raid and the subsequent charge-sheet, noting that the defendants lacked any viable defense against the claims of counterfeit manufacturing.

The Court held that the Plaintiff’s proprietary rights, backed by continuous usage since 1905 and significant market presence, were clearly being infringed. Beyond the IP violation, the Bench expressed significant concern regarding the public safety implications of the substances found inside the counterfeit products.

Key Observations

The Court’s order emphasized the urgency of the matter:

• "I am convinced for the reasons which are set out in paragraph 11 to 14 of the additional affidavit that the grant of ad-interim relief will be defeated by delay."
• "It is also a matter of concern that the counterfeit cigarettes are learnt to have been filled with the mix of sawdust and chemicals which would be hazardous to the health of the general public."
• "Upon prima facie comparison of the rival products, it is evident that the Defendants’ products are counterfeit GOLD FLAKE cigarettes."
• "The proprietary right of the Plaintiff in the registered trade mark is prima facie demonstrated from the registrations which are placed on record and the user which is since the year 1905."

Final Decision: Stopping the Flow

The Court's Order grants a comprehensive injunction preventing the respondents from manufacturing, selling, or dealing in any manner with the counterfeit products. Additionally, the defendants are mandated to disclose on oath the identities of all persons involved in the illicit network, as well as the locations of any other manufacturing premises.

This decision serves as a significant deterrent, reinforcing that brand owners can rely on high-court intervention to dismantle sophisticated counterfeiting rings that threaten consumer welfare. The application has been scheduled for further consideration on December 10, 2025.