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2023 Supreme(Del) 5675
IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, J.
The Hershey Company - Appellant
Versus
Atul Jalan Trading As Akshat Online Traders - Respondent
CS(COMM) 780 of 2023, I.As. 21398 of 2023, 21399 of 2023, 21401 of 2023, 24575 of 2023 and 25545 of 2023
Decided On : 19-12-2023
Mr. Urfee Roomi, Ms. Janaki Arun, Ms. Anuja Chaudhury, Mr. Jaskaran Singh, Mr. Ayush Dixit, for the Plaintiff; Mr. Raj Shekhar Rao, Sr. Advocate, Dr. Vikrant Narayan Vausdeva, Mr. Sarthak Chiller, Mr. Rohit Lochav, Ms. Anshi Gupta, Ms. Yamini Mokeerjee, Advs. (M. 9811212045) with Mr. Atul Jalan and his son Mr. Mridul Krishan, Mr. Harish Vaidyanathan Shankar, CGSC, with Mr. Srish Kumar Mishra, Mr. Alexander Mathai Paikaday and Mr. Krishnan V., Advocate, Mr Anuj Aggarwal, ASC, GNCTD with Mr Yash Upadhyay Advocate, Mr. Arjun Basra, Advocate, Ms. Hetu Arora Sethi, ASC, GNCTD, for the Defendant.
IMPORTANT POINT
The central legal point established in the judgment is the need to protect public health and safety by preventing the sale of expired and counterfeit food products.
Headnote:
Expired Products - Food Safety and Public Health - FSSAI Act, 2006, Food Safety and Standards Act - The court issued directions and appointed Local Commissioners for seizure of expired products, instructed FSSAI to prevent sale of expired products, and suspended non-bailable warrants against the Defendant pending investigation.
Fact of the Case:
The Plaintiff, a chocolate company, sought an injunction against the Defendant for selling expired chocolates by re-packaging them. Local Commissioners' reports revealed a large stock of expired and counterfeit products at the Defendant's premises.
Finding of the Court:
The Court found that the Defendant was involved in selling expired and counterfeit products, leading to serious concerns for public health. The Court issued directions for seizure of expired products and instructed FSSAI to prevent their sale.
Issues: Sale of expired and counterfeit products, lack of transparency and cooperation by the Defendant, and potential harm to public health during the festive season.
Ratio Decidendi: The Court's decision was influenced by the serious nature of the allegations, the lack of cooperation from the Defendant, and the potential harm to public health during the festive season.
Final Decision: The Court issued directions for seizure of expired products, instructed FSSAI to prevent their sale, and suspended non-bailable warrants against the Defendant pending investigation.
JUDGMENT
Prathiba M. Singh, J. (Oral) - This hearing has been done through hybrid mode.
2. The present suit reveals to an extraordinary situation involving safety and public health, particularly relating to food products. The present suit was filed by the Plaintiff - The Hershey Company, a well-known chocolate company, seeking an injunction before the Diwali period against the Defendant-Atul Jalan, trading as Akshat Online Traders from selling expired chocolates by re-packaging the same.
3. As per the Plaintiff, the defendant is a rank counterfeiter, causing harm to both the Plaintiff and the public. The Defendant had knowledge of and access to the Plaintiff's marks and packaging, and blatantly copied them, misrepresenting their expired and counterfeit chocolates as Plaintiff's products.
4. The Court had taken note of all the averments made in the plaint and vide order dated 30th October, 2023, had passed a detailed interim order giving directions and appointing Local Commissioners for seizure of all the expired products. Further, due to the urgent and serious nature of the allegations, the Court instructed that two Food Safety and Standards Authority of India (hereinafter, 'FSSAI') Inspectors accompany the LCs to conduct a thorough inspection and testing of all products sold by the defendant. Additionally, the FSSAI was given specific directions to ensure that perishable and food products, which are either expired and repackaged or counterfeit, are not sold, particularly during the festive season. The relevant extract of the said order is set out below:
"33. This Court is convinced that the Plaintiff has made out a prima facie case for grant of an ex-parte ad-interim injunction. In light of the above stated it is also clear that balance of convenience lies in favour of the Plaintiff considering that the counterfeit packaging is used for expired confectionary products, which will be sold and consumed in bulk in this festive season of Diwali. This will cause irreparable loss/harm not only to the Plaintiffs business and reputation but also to the public at large.
34. Accordingly, the Defendant and anyone acting for or on his behalf are restrained from manufacturing, selling, and offering for sale any 'HERSHEY'S' products including chocolates, candies and any other confectionery products till the next date of hearing."
5. Thereafter, on 10th November, 2023, this Court observed that the respective Local Commissioners (hereinafter, 'LCs') had filed their respective reports. The said reports reveal an extremely sorry state of affairs at the Defendant's premises.
Major Findings from the Report of the Local Commissioner- Adv. Akshat Agrawal dated 7th November, 2023:
6. Premises: Unit nos. 819 and 820, Street No. 50, Lekhu Nagar, Tri Nagar, New Delhi. Important observations of the LC in respect of both the units of the Defendant are:
Various products including the Plaintiff's Hershey's chocolates were found in the premises. The condition of the Defendant's units were poor, with various food, beverage, and cosmetic products present, including large stocks of counterfeit Hershey's chocolates in ripped cartons and marked as 'expired products not for sale'.
Expired products were stored due to disputes with the supplier and were not returned.
FSSAI License: The Defendant did not have an FSSAI license to sell or resell the Plaintiff's products, and he did not respond to inquiries about violating the provisions of the FSSAI Act, 2006.
Lack of Transparency and Cooperation: The Defendant displayed reluctance to fully disclose information about their business operations, including details about other units they run and their involvement in the sale of Hershey's products. There were several contradictions in their statements regarding the history and scope of their business, particularly in relation to selling food items.
Unclear Source of Products: The Defendant was unable to provide clear and verifiable details about the source of their Hershey's products, i
