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IN THE HIGH COURT OF DELHI AT NEW DELHI
C. Hari Shankar, J.
Sunit Shah – Appellant
Versus
Trilok Foods Pvt. Ltd. – Respondent
CS(COMM) 124 of 2022 and IA 2985 of 2022 (Order XXXIX Rules
Decided On : 14-03-2023
Intellectual Property Rights - Settlement Agreement - [Trade Mark Act, 1999, Section 29(4); Trade Marks Act, 1999, Section 135] - The court settled the disputes between the parties based on a Settlement Agreement, acknowledging the ownership of intellectual property rights by the Plaintiff and prohibiting the Defendant from committing any act of infringement or passing off. The Defendant agreed to cease the use of specific packaging materials and trademarks, and pay token damages to the Plaintiff. The court decreed the suit in terms of the Settlement Agreement, binding the parties to its terms.
Fact of the Case:
The disputes between the parties were settled through a Settlement Agreement, rendering the suit decreed in terms of the agreement.
Finding of the Court:
The court found that nothing survived for adjudication in the present case due to the settlement agreement, and decreed the suit accordingly.
Issues: The main issue was the settlement of disputes between the parties regarding intellectual property rights and infringement.
Ratio Decidendi: The court's decision was based on the Settlement Agreement and the acknowledgment of intellectual property rights ownership by the Plaintiff, leading to the decree of the suit in terms of the agreement.
Final Decision: The suit was decreed in terms of the Settlement Agreement, and the parties were bound by its terms. The plaintiff was entitled to a refund of the court fees, and the miscellaneous application was disposed of.
JUDGMENT (Oral)
1. The disputes between the parties stand settled with the intervention of the Delhi High Court Mediation and Conciliation Centre. Settlement Agreement dated 27th January 2023 has been placed on record. The terms of settlement read thus:
"6.1. The Defendant acknowledges that the Plaintiff are the owners of all intellectual property pertaining to the HOT MIX/SHAH HOT MDC (LABEL) as mentioned in the plaint and agrees to not contest the same in the future.
6.2. The Defendant undertakes not to commit any act of infringement and/or passing off by the use of the mark of the Plaintiff and/or any other mark which is identical and/or deceptively similar to the plaintiffs registered mark/artistic work.
6.3. The Defendant undertakes to not use the scripts, fonts, positions and placement of any features, get ups, lay outs, combination of colours and arrangement as are identical or deceptively similar to the features, get ups, lay-outs, positions and placement or combination of colours of the Plaintiffs trade dress/packaging materials.
6.4. The Defendant undertakes to not sell its goods/products in the current packaging and agrees and undertakes to use the mark HOTKING MIXTURE with the new agreed upon packing only as detailed i.e. [IMG] of the present Settlement Agreement to which the Plaintiff has no objection thereof, which is enclosed as Annexure-3.
6.5. That the defendant also undertakes that it shall not usehhe trademark HOT MIX/SHAH HOT MIX (LABEL) and any other mark with the combination of HOT and MIX or the combination which is a variant of the said to words/marks i.e. HOT and MIX besides the agreed upon packaging as enclosed in Annexure-3.
6.6. The Defendant undertakes that the defendant shall withdraw any and all trademark applications filed by the defendant for the registration of the trademark BALAJ1 HOT MIX/HOT MIX and in any event agrees to not press any of its application after signing of the present Agreement.
6.7. The parties agree that the packaging materials i.e. [IMG] which had been seized by the Local Commissioner appointed by this Hon'ble Court on 08.03.2022 and sealed and kept at the premises of the Defendant at A-2/9-10, Sector-17, Kavi Nagar Industrial Area, Ghaziabad-201002, (U.P.) as enshrined in the LC Inventory list enclosed as Annexure-4 will be destroyed in the presence of the representative of the Plaintiff on 05.02.2023 at 11 a.m., but in any event the same shall be carried out latest by 10.02.2023, at the cost of the Defendant.
6.8. The parties further agree that the other packaging i.e. [IMG] and [IMG] which were lying at other location i.e. House No.-605 F/F, Kb-No.121/122, Krishna Gali, Maujpur, Delhi 110053, which were not seized will be sold by the Defendant by putting/adding a sticker on the said packaging and the parties agrees that the same shall be disposed off within a period of four months and not later than 30.05.2023. The copy of the same is also enclosed as Annexure-5.
6.9. After filing of the present Suit, the Defendant had also prepared new packaging subsequent packing i.e. [IMG] which the parties undertake and agree shall be used by the Defendant within a period of four months and not later than 30.05.2023 and the same is also enclosed as Annexure-6.
6.10. The Defendant agrees that after the expiry of the aforestated period i.e. 30.05.2023, the Defendant shall cease and desist from using all of the said packaging material mentioned in paragraph 6.8 and 6.9 in any manner whatsoever and shall destroy all of the packaging materials at its own cost. As the packaging material bears manufacturing stamps, the Defendant in undertakes that said packaging material will not be used in any manner beyond 30.05.2023.
6.11. That the defendant further undertakes to pay a sum of INR 1,00,000/- (Indian National Rupee One Lac Only) to the plaintiff towards token damages which has already been made via UTR no. N023232300542459 into the bank account bearing no. 5145089972 at Kotak Maliindra Bank
The court's approval of the settlement agreement and the subsequent decree based on the terms of the agreement.
Settlement agreements can resolve disputes and lead to the decree of a suit in terms of the settlement.
The acknowledgment of proprietary rights in the trademark and copyright, and the lawful disposal of seized goods in accordance with environmental regulations.
Enforcement of Settlement Agreement
Settlement agreements reached through mediation can be decreed by the court, and parties are bound by the terms of the agreement, with defaulting parties being held liable for contempt of court.
Settlement agreements can be used to resolve disputes without delving into the merits of the case, and the court may decree the suit in terms of the settlement agreement.
The central legal point established in the judgment is the lawfulness of the Settlement Agreement and the parties' undertaking to remain bound by its terms.
The court's decision was based on the validity and acceptance of the settlement agreement by the parties involved.
Enforceability of settlement agreements and their impact on the resolution of disputes.
Settlement agreements under Order XXIII Rule 3 of the CPC can lead to the decree of suits and resolution of disputes, binding the parties to the terms of the agreement.
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