1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SHOW CAUSE NOTICE NO.1219 OF 2009 WITH SHOW CAUSE4 NOTICE NO.1477 OF 2009 IN CONTEMPT PETITION NO.62 OF 2009 IN NOTICE OF MOTION NO.1235 OF 2009 IN SUIT NO.805 OF 2009 SKODA AUTO A.S. & Anr. .. Plaintiffs Versus Nummer Eins Motors (India) Pvt.Ltd. & Ors. .. Defendants. Mr.Virag Tulzapurkar, Senior Advocate with S.P.Vijay Ragavan and Chirag Mody i/b. D.S.K. Legal for plaintiffs Mr.Swanand Ganoo i/b. R. Ravindran for defendants. CORAM : S.C.DHARMADHIKARI, J. DATE : November 19, 2009. P.C.: 1] Heard Mr.Tulzapurkar, learned Senior Counsel for petitioners and Mr.Ganoo learned Counsel for defendants. Having perused the petition and the order passed by this Court so also the affidavits, at this stage, I am satisfied that a prima facie case is made out. Contempt petition is accordingly admitted. (S.C.Dharmadhikari, J) 2 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.1235 OF 2009 IN SUIT NO.805 OF 2009 SKODA AUTO A.S. & Anr. .. Plaintiffs Versus Nummer Eins Motors (India) Pvt.Ltd. & Ors. .. Defendants. Mr.Virag Tulzapurkar, Senior Advocate with S.P.Vijay Ragavan and Chirag Mody i/b. D.S.K. Legal for plaintiffs Mr.Swanand Ganoo i/b. R. Ravindran for defendants. CORAM : S.C.DHARMADHIKARI, J. DATE : November 19, 2009. P.C.: 1] This Notice of motion was placed for final hearing on earlier occassion and today. The notice of motion is by the plaintiffs who have filed in this Court a suit against the defendants. The prayers in the suit are that the defendant should be restrained by a permanent order and injunction from in any manner infringing plaintiffs’ SKODA trademark bearing the Registration Number more particularly set out in the prayer (A) of the plaint. Further, a restraint is sought to be placed from using in 3 any manner this trade mark and/or SKODA product trademark or any of them and from using any marks resembling and deceptively similar to the mark or any of them, during the defendant’s trading and business activities. 2] Prayer (B) is seeking to place restraint on passing off and, thereafter, there is an injunction prayed against the defendants from in any manner claiming or holding out themselves as dealers of plaintiffs. 3] There are other prayers in furtherance of these reliefs. 4] This notice of motion was placed for ad-interim reliefs before this Court on 22nd July 2009. Prior thereto, on 9th April 2009, this Court recorded the statement of the defendant that the defendant will not act as a Dealer of the plaintiffs. Further a statement was made and recorded that the material at site if any, will not be used by the defendant and the defendant shall not use the said trademark and the copyright material till the motion is heard. This statement has been continuing till 22nd July 2009 and thereafter. My attention was invited by Mr.Tulzapurkar, learned Senior Counsel not only to the order but to the fact that contrary to the 4 statements recorded in this Court’s order which constitute an undertaking to this Court, the defendant has continued the impugned acts. Therefore, while issuing the show cause notice on the contempt petition moved before me, I had directed that even the notice of motion shall be placed for hearing and final disposal. 5] After the opportunity was given to file affidavits, it appears that two affidavits are filed in answer to the show cause notice. However, as far as the notice of motion is concerned, there is no affidavit in reply. Mr.Tulzapurkar at the hearing of this motion had contended that the items are enlisted by the plaintiffs. Whenever the plaintiff company appoints a dealer for sale and service of their vehicles, so also the spares and accessories, an authorisation is issued which includes handing over certain vital material. The material that is handed over is not just promotional and advertisement material but includes software, logos, trademark etc. This material clearly identifies the dealer of the plaintiffs. The plaintiff has handed over the materials more particularly set out at Annexures Q and T to the plaint. Inviting my attention to these annexures, it is contended by Mr.Tulzapurkar that contrary to the statements made before the Court. the defendant continues to use them. 5 Although, the defendant makes a statement to the Court that it has ceased to be the dealer of the plaintiff, yet, the plaintiff has noticed that the defendant is still holding himself out as a dealer of SKODA Vehicles. Not only in the vehicles but it is discovered that he is dealing with spares and accessories of the plaintiffs. For such dealings, he has retained this material. If the defendant was indeed honest to the Court, then, it would have placed the relevant facts on affidavit and made a disclosure as to what has been done with this material post termination of the dealership. However, the defendant has not filed any affidavit. There is no honest or truthful disclosure. The plaint allegations are uncontroverted, therefore, this is a fit case where the Court should proceed to grant the reliefs prayed in the notice of motion in their entirety. 6] This matter was argued on the prior occasions and I had on 12th November 2009 heard both sides at length. Defendants’ director one Mr.Vijan was present in court. The Court recorded his statement to the effect that such of the materials which are referred to in the aforementioned Annexures and presently lying with the defendant shall be deposited by the defendant in this Court by 16th November 2009. However, he instructed his Advocate to make a statement that post 6 termination by the plaintiffs, the defendant has never acted as a dealer of SKODA Auto. The defendant does not offer for sale any SKODA vehicles. It does not offer the services insofar as repairs nor is it dealing with the spares and accessories manufactured and/or provided by the plaintiffs. 7] Before me, Mr.Tulzapurkar had highlighted the fact that the Logo and the mark is still displayed on the premises and Mr.Ganoo appearing for defendants made a statement on instructions that there is another entity which is carrying on business from the premises belonging to the defendant and more particularly its Director. It is that entity which may be displaying the Logo but the defendant has nothing to do with this act. 8] The matter was placed for further hearing and orders today. On the last occasion my attention was invited by Mr.Ganoo to a letter which accompanied the inventory/list of articles deposited by the defendants in this Court. It was contended by Mr.Ganoo that not only the Articles which are enlisted as Annexures to the plaint but such of the Articles which were supplied during the course of the appointment as a dealer, have all been deposited in this Court. He also makes a statement that 7 from 2001 till date, there are other materials and Articles which are put to use and, therefore, may not be in state in which they were supplied. They have either been damaged or destroyed. Therefore, whatever was available has been deposited in this Court. 9] The matter was placed to enable Mr.Tulzapurkar to seek instructions with regard to complete deposit of the materials by the defendants. Today, Mr.Tulzapurkar brings to my notice that there are some more items viz., FASCIA FB 601, Pylon P 340m so also VSA 5052 which are not deposited although apparently described in the list of items and materials brought in Court. Mr.Tulzapurkar also handed over a photograph of this item. He submits that contrary to what the photograph produced, what has been deposited is a rear portion of the item which is in heavily damaged state. However, the Logo which is imported and supplied to the defendant after it was procured from Germany, has not been deposited and it appears that it is retained by the defendant. My attention is also invited to two further items viz., VAS 5052 and Service Mobile Kit. Mr.Tulzapurkar submits that VAS 5052 is not deposited. As far as this item is concerned, according to Mr.Tulzapurkar, the same is also vital. As far as the service mobile kit is concerned that is partially 8 deposited, that means, out of 43 items only 8 are deposited in Court. 10] Lastly, he invites my attention to Electronic Part Catalogue known as ETKA, which is still not deposited. Mr.Tulzapurkar submits that importance of this item is that with its assistance one can identify batch number of SKODA spare parts and source it from other countries. There is every likelihood of ETKA flourishing in Grey market. This will lead to storing of spurious and duplicate/fake parts by embossing the same batch numbers and customers can be easily deceived/ confused. Mr.Tulzapurkar submits that whatever has been deposited in this Court is merely to avoid an action in contempt and further stringent measures by this Court for full implementation and effect to its orders. Therefore, this is a fit case where the Court Receiver, High Court, Bombay should be appointed as Receiver and he should not only take into custody the items deposited but must inspect the site/ premises of the defendant and seize such of the materials belonging to the plaintiffs which are identified in the presence of both sides and duly listed in an inventory. He submits that a strong prima facie case has been made out by the plaintiffs inasmuch as post termination of the dealership, it has been noticed by the plaintiff that not only the name has been misused but even the marks, logos and other 9 important and vital material. There is every likelihood of innocent buyers and customers being deceived inasmuch as an impression is being given by the defendant to the public at large that it continues to supply and provide SKODA vehicles or deal with them by servicing or selling the spares and accessories. Such an attempt to associate with the plaintiff is nothing but a prima facie act of infringement and passing off. The usual order of injunction would not suffice in the peculiar facts of this case. 11] Mr.Ganoo appearing on behalf of the defendant fairly states that there is no reply filed to the notice of motion despite opportunity being granted in that behalf. However, it is his submission that the defendant has truthfully and honestly disclosed the items supplied and provided by the plaintiffs. It is not only a complete disclosure but such items which are available with the defendants have been duly deposited in this Court. Thus, there is complete compliance with the statement recorded on 12th November 2009. The defendant does not seriously dispute that the items can be placed in the custody of the Court Receiver and he can retain the possession of the same on such terms and conditions as this Court deems fit and proper. However, it is his submission that the items which are highlighted as vital parts are not available. Mr.Ganoo has invited my 10 attention to the affidavit filed in answer to the show cause notice and has contended that as far as FASCIA FB 601 is concerned, it is damaged and destroyed during the course of its removal. Since this item was affixed on the wall or premises of the defendants but had to be removed for being deposited in the Court. Thus, it was necessary to remove it. During the course of such removal, it was damaged and destroyed and in the state in which it was available, the same has been brought to the court. Therefore, it is not as if any portion or part thereof is retained by the defendant and that the defendant is likely to use it. As far as ETKA is concerned, Mr.Ganoo submits that the defendant has stated that ETKA was damaged during normal use. It was in the form of “Compact Disc” (CD) which has been destroyed. He submits that special tools and diagnostic equipment which were listed out from Sr.No.1 to 32, in the list, except the CD all items are returned. The CD has been rendered useless after prolonged usage and, therefore, has been destroyed. There are certain tools which are lost on the site due to continuous handling at the workplace. Mr.Ganoo has submitted that as far as VAS 5052 is concerned, the said item is not with the defendant. As far as service mobile kit is concerned, such of the items which have not either been used or not available or destroyed due to prolonged use have been 11 brought to the Court. There is nothing available at site which could be said to be an item or material belonging to the plaintiff. On instructions Mr.Ganoo makes a statement that defendant is ready and willing to cooperate with the Receiver and if any other items are lying and which can be identified as belonging to the plaintiff, the same would be duly handed over to the Court Receiver. 12] Having perused the plaint and annexures thereto and more particularly Exh.Q and T so also the documents produced today, I am of the opinion that the plaintiff has made out a prima facie case. The plaintiff has come before the Court with specific allegation that it had appointed defendant as a dealer. That appointment has been terminated. There is no challenge to the termination. Further, once the dealer is equipped by the manufacturer with not only the vehicles but their spares and accessories so also necessary tools, then, it is the bounden duty of the dealer to hand over the said unused material post termination of the dealership. Having accepted the termination and made a statement before the Court that the defendant has ceased to act as such, this was the duty and obligation which the defendant should have fulfilled. However, there is an apprehension which has been substantiated by the materials 12 produced with regard to the illegal and unauthorised usage by the defendant of the logos and marks and the material supplied. It was pointed out as to how the defendant continues to represent the plaintiff illegally by holding itself out as dealer to the public. The display of the logo and the marks on the premises, availability of promotional and advertising material so also the product catalogue etc. despite termination is an indicator that the balance of convenience is in favour of the plaintiff. It is only after the matter was argued before the Court and the attention of the defendant was invited to the serious consequences of breach of an undertaking and prima facie finding that indeed there is such breach that the defendant came forward and made a statement that it would deposit the materials in court. The materials which have been pointed out and more particularly at Annexures Q and T are stated to be deposited in full by the defendant but which fact again has been seriously disputed. Once, there is serious dispute with regard to the materials being deposited in the Court and the plaintiffs state that the statements made and recorded in the courts order are not complied with in their entirety, it is just and convenient that Court Receiver, High Court Bombay is appointed as Receiver of the said materials. Mr.Tulzapurkar has contended that the defendant has never disputed that it received this material. During the 13 course of the dealership and even after the proceedings were instituted, at no stage a case has been made out that the materials have never been handed over or received by the defendants from plaintiffs. Conditions in which they were received is also not in issue. On the otherr hand, Mr.Ganoo repeatedly urged that the materials are purchased by paying costs. Thus, in terms of the Agreement, they are the property of the Dealer. No details of such purchase are forthcoming. Merely relying upon the agreement is not enough. Therefore, there is much substance in the contentions of Mr.Tulzapurkar. 13] In these circumstances, in my view, the notice of motion can be made absolute by following order:- (a) The Court Receiver, High Court Bombay is appointed as Receiver of the materials enlisted at Annexures Q and T to the plaint. Such of the materials which are deposited by the defendant in this Court shall be taken into custody by the Court Receiver and stored and kept at the premises which shall be made available by the plaintiff. It is stated by the plaintiffs that they will make necessary arrangements for storage and incur the required expenses therefor. All this shall be done by the 14 plaintiffs subject to further orders in the suit and without prejudice to their contentions in that behalf. (b) The Court Receiver shall upon receipt of an authenticated copy of this order give notice to both sides and shall depute his representative to visit and inspect the premises of the defendants, more particularly described in the plaint and the cause title. (c) Receiver to take into custody all books, records, documents and papers relating to appointment of defendant by the plaintiffs as dealer. If the defendants refused to cooperate with the Court Receiver or his representative, it would be open for the Court Receiver to seek assistance of the nearest police station to effect the seizure. Equally, such of the articles as are stated to be belonging to the plaintiffs shall be identified by the representative of the Receiver in the presence of plaintiffs and defendants and, thereafter, the said Articles and materials shall also be taken into custody by the Court Receiver. Needless to state that the Court Receiver can for seizure of such articles and materials, visit and inspect so also take search of not only the premises of the defendant described in the cause title but any other premises where the said articles, 15 materials are located and found stored by the Court Receiver. The Court Receiver, after completing this exercise shall make an inventory and submit a report to this Court. (d) The Motion is also made absolute in terms of prayer clauses (a) to to (e). However, there shall be no orders as to costs. (e) Needless to further state that when the Court Receiver is identifying the materials, it would be open for both sides to produce documents and such other proof as is available with them to identify the articles and if the said articles are proved to be procured by the defendants at their own cost from the market, the Court Receiver to identify them separately in his report and the Court will issue necessary directions in that behalf after hearing both sides. (f) The motion is allowed accordingly. (S.C.DHARMADHIKARI, J)