Kerala High Court on 31/08/2022 in G.M. Sheik and Ors. v. Raja Biri Private Ltd. and Ors., 2022 (6) KHC 23, held that “scope of granting an interim injunction is limited" and caution is a must “while granting ex-parte relief”. Further, it was also observed that powers vested in a Court under Section 135 of the Trade Marks Act, 1999 (the “TM Act”)* do not confer jurisdiction on a Court to grant ex parte injunctions without following the mandate of Rule 3 Order XXXIX of the Code of Civil Procedure, 1908 (the “CPC”)**.  

Background of the Case: G.M. Sheik and Ors. Vs. Raja Biri Private Ltd

Here’s a background of the aforementioned case:

  1. On 31st August 2022, an appeal was tabled for hearing in Kerala High Court. This dispute was about an allegation of infringement of the trademark and names of Raja Biri and Raja Bidi.
  2. The lower court granted ex-parte ad interim injunction, restraining defendants from carrying out their business even before issuing a notice to the defendants or counter-petitioners.
  3. The aggrieved party filed a lawsuit on 31st May 2022. The Court granted an interim ex-parte injunction on 1st June 2022 even before issuing notice to the appellants or counter petitioners.
  4. Appellants/defendants filed a counter on 27th June 2022. However, the Court did not hear the matter on merit within the stipulated time frame of thirty days. The matter was adjourned to 2nd July 2022. Then, it was adjourned to 13th July 2022.
  5. Appellants/defendants filed for an expedited hearing under Order XXXIX Rule 3 A of the CPC. Despite this application, the Court didn’t hear the order on merit. Meanwhile, the Trial Court instructed a Commissioner to accumulate all materials/products supplied by the defendants to multiple shops. Thus, the Trial Court implemented an interim ex parte injunction that was granted without issuing a notice to the counter petitioners, herein appellants.

 

Main Issues of the Case

The Trial Court has every authority to grant an ex parte ad interim injunction without notifying any counter petitioners or appellants. However, scope of granting ex parte injunction under Section 135 of the TM Act is restricted to those matters which are specified under clauses (a) to (c) of sub-section (2) and exceptions are mentioned under sub-section (3). 

The interim order that was granted would not fall under purview of clause (a) or (b) of Section 135(2) of the TM Act. Notably, the Court granted an ex parte ad interim injunction by virtue of clause (c) of Section 135(2).

Moreover, clause (c) of Section 135(2) of the TM Act will be applicable only for preserving the defendant’s properties and assets. It will be applicable only as a precaution to deal with costs, damages and pecuniary measures that will get awarded in the lawsuit. The main purpose of Section 135 (2)(c) of the TM Act is to preserve and protect the plaintiff’s interests.

Details of the Core Issue

Trial Court’s grant of an injunction does not fall under Section 135(2)(c) of the TM Act. Moreover, there is a very restricted scope under Section 135 of the TM Act to grant an interim injunction and it needs to be related to matters falling under clauses (a) to (c) of Sub-Section (2) of that section. Considering its inability to have an exhaustive application, Courts need to exercise caution while granting ad interim injunction without prior notice to defendants/counter petitioners.

Another issue pertained to whether the Court can at all execute an ex parte ad interim order of injunction by exercising jurisdiction under Section 36 of the CPC. There is a lot of confusion regarding the term "ex parte" for an ad interim injunction granted before a notice has been issued to the counter-petitioner.

The term “ex-parte” refers to something that has been done or said by a person when his opponent was absent. In law, the term is used to signify an order or a decree passed in the opposite party’s absence.

The court may pass an ex parte order (i) without sending notice to the opposite party and (ii) after issuing notice to the opposite party.

If the opposite party is absent without presenting any legally valid excuse, an ex parte order would be binding on them. In the second case, each and every order the Court passes after issuing this said notice would be binding upon the opposite party.

However, in the first case, there may be no binding force as the opposite party is deprived of audi alteram partem*** or the right to be heard, an important concept in the judicial system.

It has been pointed out that an injunction can only be granted for matters included under clauses (a) to (c) to subsection (2) of Section 135 of the TM Act. Every court needs to exercise caution and vigilance about exceptions under Section 135 (3) of the TM Act. Courts must not grant ad interim injunctions without taking into account the opposite party’s right.

Moreover, the High Court of Bombay at Goa Bench in VRB Consumer Products Private Limited Vs. Capital Foods Private Limited, (A) No. 2783 of 2022 also referred to the Kerala High Court case and held that powers vested in a CourtO under Section 135 of the TM Act do not confer jurisdiction on a Court to grant ex parte injunctions without following the mandate of recording the reasons as per proviso to Rule 3 Order XXXIX of the CPC. 

Conclusion

Both of these judgements affirm that courts have a limited scope of granting injunctions. Moreover, courts need to exercise caution while granting ex parte relief and while granting an injunction without issuing notice to the opposite party, courts must record reasons.  

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*Section 135 in The Trade Marks Act, 1999

135. Relief in suits for infringement or for passing off.—

(1) The relief which a court may grant in any suit for infringement or for passing off referred to in section 134 includes injunction (subject to such terms, if any, as the court thinks fit) and at the option of the plaintiff, either damages or an account of profits, together with or without any order for the delivery-up of the infringing labels and marks for destruction or erasure.

(2) The order of injunction under sub-section (1) may include an ex parte injunction or any interlocutory order for any of the following matters, namely:—

(a) for discovery of documents;

(b) preserving of infringing goods, documents or other evidence which are related to the subject-matter of the suit;

(c) restraining the defendant from disposing of or dealing with his assets in a manner which may adversely affect plaintiff’s ability to recover damages, costs or other pecuniary remedies which may be finally awarded to the plaintiff.

(3) Notwithstanding anything contained in sub-section (1), the court shall not grant relief by way of damages (other than nominal damages) or on account of profits in any case—

(a) where in a suit for infringement of a trade mark, the infringement complained of is in relation to a certification trade mark or collective mark; or

(b) where in a suit for infringement the defendant satisfies the court—

(i) that at the time he commenced to use the trademark complained of in the suit, he was unaware and had no reasonable ground for believing that the trade mark of the plaintiff was on the register or that the plaintiff was a registered user using by way of permitted use; and

(ii) that when he became aware of the existence and nature of the plaintiff’s right in the trade mark, he forthwith ceased to use the trade mark in relation to goods or services in respect of which it was registered; or

(c) where in a suit for passing off, the defendant satisfies the court—

(i) that at the time he commenced to use the trademark complained of in the suit he was unaware and had no reasonable ground for believing that the trade mark of the plaintiff was in use; and

(ii) that when he became aware of the existence and nature of the plaintiff’s trade mark he forthwith ceased to use the trade mark complained of.

** Rule 3 Order XXXIX of the Code of Civil Procedure, 1908

3. Before granting injunction, Court to direct notice to opposite party. - The Court shall in all case, except where it appears that the object of granting the injunction would be defeated by the delay, before granting an injunction, direct notice of the application for the same to be given to the opposite party:

[Provided that, where it is proposed to grant an injunction without giving notice of the application to the opposite party, the Court shall record the reasons for its opinion that the object of granting the injunction would be defeated by delay, and require the applicant-

(a) to deliver to the opposite party, or to send to him by registered post, immediately after the order granting the injunction has been made, a copy of the application for injunction together with-

 (i) a copy of the affidavit filed in support of the application;

 (ii) a copy of the plaint; and

 (iii) copies of documents on which the applicant relies, and

 (b) to file, on the day on which such injunction is granted or on the day immediately following that day, an affidavit stating that the copies aforesaid have been so delivered or sent.]

*** Audi Alteram Partem

It is a fundamental principle of natural justice meaning "no man should be condemned unheard" and the judge must hear both sides before passing an order.