Delhi High Court: While hearing a First Appeal under Order 41, Rule 31 of the Civil Procedure Code, 1908, challenging the territorial jurisdiction and quantum of damages granted by the District Court, the Division Bench of C. Hari Shankar, J, and *Om Prakash Shukla, J, held that an award of damages requires a reasoned basis and evidence linking the damages to a proven injury. Accordingly, the Court held that since the District Court order was not based on any sound principle of law, it was liable to be set aside on account of lack of evidence.
Background
The respondent, sole proprietor of Karmayogi Sharbhang Muni, instituted a commercial suit alleging infringement of her registered trademark ‘Nayan Jyoti’ in respect of ayurvedic medicines. It was pleaded that the mark had been coined and used since 1990, had acquired goodwill across India, and qualified as a well-known trademark under the Trade Marks Act, 1999.
The appellant, engaged in manufacture and sale of ayurvedic products, was alleged to have adopted the mark ‘Amrit Nayan Jyoti’ in relation to similar goods. According to the plaintiff, the impugned mark was deceptively similar in name, trade dress, colour scheme and overall presentation, and was being marketed through an interactive website enabling sales within Delhi. A test purchase conducted through the appellant’s website resulted in delivery of the impugned product at Bhajanpura, Delhi.
The District Judge (Commercial Court) had decreed the suit, granted permanent injunction and awarded damages of Rs. 48,35,610 along with costs. The appellant challenged the decree primarily on the grounds of lack of territorial jurisdiction and erroneous computation of damages.
Analysis, Law and Decision
On the issue of territorial jurisdiction, the Court affirmed the trial court’s finding. Relying on the principles laid down in Banyan Tree Holding (P) Ltd. v. A. Murali Krishna Reddy, 2009 SCC OnLine Del 3780, the Court held that the appellant’s website was not merely interactive but facilitated commercial transactions within Delhi, as evidenced by issuance of an invoice and delivery of goods in North-East Delhi. This satisfied both the ‘sliding scale’ and ‘effects’ tests, conferring jurisdiction on the Delhi courts.
As regards infringement, the Court noted that the appellant had failed to file a written statement, had consented to decree of injunction, and did not dispute the respondent’s ownership of the registered trademark. The finding of infringement and the grant of injunction were therefore not interfered with.
However, the Court found merit in the challenge to the quantum of damages. It held that while Section 135 of the Act permits award of damages, the plaintiff bears the burden of proving the quantum through cogent evidence. Referring to Rule 20 of the Delhi High Court IPD Rules, 2022 and precedents including Kabushiki Kaisha Toshiba v. Tosiba Appliances Co., 2024 SCC OnLine Del 5594 the Court observed that damages cannot be based on speculative assumptions or hypothetical estimations.
The Court noted that the computation of damages was introduced only at the stage of written submissions and did not form part of evidence subjected to cross-examination. The assumptions drawn by the trial court regarding duration of infringement and monthly stock turnover, based solely on the Local Commissioner’s report, were held to be unsupported by the record. In the absence of a reasoned evidentiary basis, the award of damages was found unsustainable in law.
The appeal was partly allowed. The Court upheld the findings on territorial jurisdiction and trademark infringement. The award of damages was set aside and the Court remanded the matter to the District Court for fresh determination limited to the issue of damages/account of profits, after permitting parties to lead evidence.
[B.C. Hasaram & Sons v. Nirmala Agarwal, RFA(COMM) No. 214 of 2025, decided on 12-11-2025]
*Judgement Authored by: Justice Om Prakash Shukla
Advocates who appeared in this case:
For the Appellant: Swathi Sukumar, Senior Advocate, Tusha Malhotra, Sugandha Yadav, Ritik Raghuwanshi, Rishika Aggarwal, Shrudula Murty, Pratibha Singh, Advocates
For the Respondent: Anupam Shrivastav, Senior Advocate, Nitin K Gupta, Sanchay Mehrotra, Parth Kansal, Advocates