Delhi High Court awards Rs. 25 lakhs damages to ‘Daawat’ Basmati Rice in a trade mark infringement suit; restrains manufacturer from selling counterfeit ‘Daawat’ Products

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Delhi High Court: In a suit for permanent injunction and damages for infringement of marks, passing off and unfair competition in relation to the mark ‘DAWAT/DAWAAT’, the Single Judge Bench of Prathiba M. Singh, J. awarded Rs. 25 lakhs as damages and costs in favour of the plaintiff and held that the defendant was manufacturing and selling counterfeit ‘DAAWAT’ branded products with dishonest intention.

Facts of the Case

The plaintiff was engaged in the business of processing, marketing, and exporting food products including rice and had a strong distribution network in all major Basmati Rice consuming cities in India and in foreign countries including USA, Canada, UK, and EU. Some of the well-known brands used by the plaintiff were HERITAGE, DAWAT, DAAWAT, DAAWAT DEVAYA, DAAWAT BESTOW, ORANGE, DEVAAYA, CHEF’s SECRET, SONA, ROYAL, etc. The present suit was related to the trade marks ‘DAWAT/DAAWAT’ which were used in respect of rice and were registered in both word mark and device mark since 1987.

Submissions on behalf of the Plaintiff

It was contended that the defendant was selling, storing, and distributing counterfeit ‘DAAWAT’ branded products, and the plaintiff came to know about this in 2021 when they purchased the defendant’s product. Upon examination, it was revealed that even though the product claimed to be Basmati Rice, it was Jawaphool Rice and did not match the standards of Basmati Rice, which was of high quality. Moreover, the same was being branded as Basmati Rice and sold in ‘DAAWAT CHED’s SECRET BASMATI RICE’ branded product packaging and the packaging of the product of the defendant was identical to the product of the plaintiff.

Analysis, Law, and Decision

On 7-9-2021, an ex-parte ad interim injunction was passed, and a Local Commissioner was appointed to visit the premises of the defendant and prepare an inventory of the infringing goods. The report and images produced by the Local Commissioner revealed that a total of 89 packets of distinct types of rice, bearing the mark ‘DAAWAT’ were found in the defendant’s premises, proving that the defendant’s product packaging was nothing but a counterfeiting packaging of the plaintiff’s ‘DAAWAT’ products.

The Court opined that the defendant was clearly indulging in violation of the plaintiff’s statutory and common law rights in the marks ‘DAWAT/DAAWAT’. Moreover, the product involved was rice for human consumption, therefore, the misrepresentation by the defendant that its product was Basmati Rice, was also impermissible.

The Court stated that the report by the Local Commissioner could be read into evidence under Order XXVI Rule 10(2) of Civil Procedure Code, 1908 (CPC). The Court relied on M.L. Brother LLP v. Mahesh Kumar Bhrualal Tanna, 2022 SCC OnLine Del 1452, wherein it was held by this Court that “Order XXVI Rule 10(2) CPC stipulates that the report of the Commissioner and the evidence taken by the Commissioner shall be evidence in the suit and shall form part of the record”.

After taking into consideration the report of the Local Commissioner, the evidence which was collected by the Local Commissioner and the non-filing of the written statement by the defendants, the Court opined that the no ex-parte evidence was required in this case.

On the relief of costs and damages, the Court held that defendant’s counterfeiting was contrary to law and was diluting the reputation and goodwill of the plaintiff’s marks. Moreover, after considering the amount of seizure made, the nature of the counterfeiting indulged into by the defendant, the costs incurred by the plaintiff for executing the local commission and the court fees deposited, it was clear that the plaintiff’s mark and business had been diluted due to infringing use. Therefore, the Court decreed the suit for a sum of Rs. 25,00,000 towards damages and costs.

[LT Foods Limited v. Saraswati Trading Company, 2022 SCC OnLine Del 3694, decided on 11-11-2022]


Advocate who appeared in this case:

For the Plaintiff(s): Advocate R. Abhishek.

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