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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ALOK ARADHE, ANANT RAMANATH HEGDE, JJ.
T.Sudhakar Pai, S/o Late Ramesh Pai – Appellant
Versus
M/s Manipal Academy Of Higher Education – Respondent
Commercial Appeal No.404 of 2022
Decided on : 17-07-2023
Commercial Courts Act, 2015 - Section 13(1)(A) - Code of Civil Procedure, 1908 - Order XLIII Rule 1®, Order XXXIX Rule 2(A) - Trade Marks Act, 1999 - Section 2 (2) - Constitution of India, 1950 - Article 21 - Willful disobedience of interim order - Relief of permanent injunction - Restrain from using trade names - O.S. seeking relief of permanent injunction to restrain defendants from using certain trade names – Appellants no. 2 and 3, though on their own accord did not disobey order, certainly aided and abetted appellant No.1, seemingly under directions of appellant No. 1 who held a dominating position. [Para 74.8.]
Finding of the Court: Appellant No.1 instructed them to continue to use prohibited trade mark, and having regard to parameters discussed in paragraph No.71, and keeping in mind that primary underlying object of provision preventive and curative, Court is of view that order of civil imprisonment against appellants No. 2 and 3 is disproportionate and unjustified and has to be set aside - Since appellants are guilty of disobedience of order passed by Court, Commercial Court, on securing details of properties of appellants, shall attach properties for a period of six months, and in case, breach or disobedience continues at expiry of six months, then attached properties of appellants, be sold and compensation of Rs.1,00,000/-be paid to each of plaintiffs from sale of properties of appellant No.1, and Rs.50,000/-be paid to each of plaintiffs from sale of properties of each of appellants No. 2 and 3 - Impugned order passed by X Additional District and Sessions Judge directing Civil imprisonment of appellants No.2, 3 is set aside.
Result: Appeal allowed in part.
JUDGMENT :
This appeal under Section 13(1)(A) of the Commercial Courts Act, 2015 read with Order XLIII Rule 1(r) of the Code of Civil Procedure, 1908 (hereinafter referred to as the 'Code' for short) is filed against the order dated 28.09.2022 passed by X Additional District Judge, Bengaluru Rural District in Commercial Misc. No.246/2021.
1.1 In the aforesaid order, the Commercial Court, exercising powers under Order XXXIX Rule 2(A) of the Code, held that the appellants are guilty of disobedience of the order of temporary injunction, dated 21.02.2019. Consequently, appellant No.1 is sentenced to undergo civil imprisonment for three months and held liable to pay Rs.1,00,000/-as compensation to the plaintiffs. Further, appellants No.2 and 3 and respondent No.5 of this appeal, (respondent No.3 in Misc. No.246/2021) are sentenced to undergo civil imprisonment for one month and each of them is held liable to pay a compensation of Rs.50,000/-, to each of the plaintiffs. Further, the plaintiffs are permitted to apply to attach the movable and immovable properties of the contemnors to recover the compensation amount, if not paid by the appellants.
2. Among other issues, the proportionality of punishment, power to award compensation for disobedience or breach of an interim order of the Court and the procedure to be followed under Order XXXIX Rule 2A of the Code of Civil Procedure, 1908 (‘Code’ for short) before awarding compensation, do arise for consideration in this appeal.
3. The applicants in the Commercial Misc. No.246/2021 are the plaintiffs. Respondents No.1 and 2 in the said Misc. No.246/2021 are defendants No.1 and 3 in the suit. Respondents No.3 to 5 in Misc. No.246/2021 are not parties to the suit.
Facts in brief:
4. O.S. No.1244/2019 is filed by the Manipal Academy of Higher Education (Trust) and the Manipal Academy of Higher Education (Deemed University) before the City Civil Court at Bengaluru, seeking the relief of permanent injunction, to restrain the defendants from using certain trade names/trademarks individually, or in conjunction with the trade name of defendant No.1. Initially, the suit is filed against three defendants viz., Manipal International School, Manipal E-commerce Limited and T. Sudhakar Pai. Later, on 04.11.2020, two more defendants were impleaded.
"Defendants are hereby restrained by an order of ex parte injunction restraining them from infringing the plaintiffs registered trade mark by using identical trade mark like "MAHE" or "Manipal groups" in conjunction with any trademark, service mark and advertisement for their services or business papers".
5. Later, on 02.03.2019, the case is ordered to be registered as Commercial Suit. On 11.03.2019, the above-mentioned suit is registered as Commercial Suit in O.S. No.15/2019. Defendant No.3 appeared on 03.04.2019 and contested the suit by filing a written statement and filed an application under Order XXXIX Rule 4 to vacate the interim order dated 21.02.2019.
6. On 05.04.2019, respondents No.1 and 2 of this appeal moved the Commercial Court under Order XXXIX Rule 2A of the Code, alleging willful disobedience of the interim order dated 21.02.2019, by the appellants. Said application is registered as Com. Misc. No.9/2019.
7. On 04.11.2020, the plaintiffs’ application dated 7.6.2019, under Order I Rule 10 of the Code is allowed and Manipal Academy of Health and Education, (Defendant No.4) and Kurl–On Ltd. (Defendant No.5) are impleaded in the suit.
8. By order dated 27.5.2021, the matter is transferred to Commercial Court, Bengaluru Rural and the suit is renumbered as O.S. No.960/2021. The application under Order XXXIX Rule 2A of the Code which was earlier registered as Com. Misc. No.9/2019 is renumbered as Misc. Application No.246/2021. Appellants of this appeal filed a statement of objection in Misc. 246/2021, and contested the
Power to order civil imprisonment under Order XXXIX Rule 2A curtails an individual's fundamental right, albeit through a process of law.
Willful disobedience of court orders, even if later complied with, can lead to significant penalties to uphold the authority of the court.
Violations of interim orders should be viewed strictly to maintain the rule of law, and the court should send a deterrent message to counterfeiters.
“3A Where an injunction has been granted without giving notice to the opposite party, the court shall make an endeavour to finally dispose of the application within thirty days from the date on which....
A party cannot disregard an interim injunction based on claims of jurisdiction; violation may lead to contempt punishment, maintaining the authority of court orders.
The court emphasized that evidence is required to establish breach of injunction orders, and punitive measures must be proportionate to the nature of disobedience.
Willful disobedience must be established for contempt under Order 39 Rule 2A; mere disobedience is insufficient.
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