Case BriefsSupreme Court

Supreme Court: The 3-judge bench of AM Khanwilkar, BR Gavai* and Krishna Murari has explained the true test to determine whether a party has waived its rights or not. It has held that for establishing waiver, it will have to be established, that a party expressly or by its conduct acted in a manner, which is inconsistent with the continuance of its rights. There can be no waiver unless the person who is said to have waived, is fully informed as to his rights and with full knowledge about the same, he intentionally abandons them.

“As such, for applying the principle of waiver, it will have to be established, that though a party was aware about the relevant facts and the right to take an objection, he has neglected to take such an objection.”

However, the mere acts of indulgence will not amount to waiver. A party claiming waiver would also not be entitled to claim the benefit of waiver, unless it has altered its position in reliance on the same.

The Court explained that a waiver cannot always and in every case be inferred merely from the failure of the party to take the objection. Waiver can be inferred, only if and after it is shown that the party knew about the relevant facts and was aware of his right to take the objection in question.

“The waiver or acquiescence, like election, presupposes, that the person to be bound is fully cognizant of his rights, and that being so, he neglects to enforce them, or chooses one benefit instead of another.”

Distinguishing waiver from estoppel, the Court explained that the principle of waiver although is akin to the principle of estoppel; estoppel is not a cause of action and is a rule of evidence, whereas waiver is contractual and may constitute a cause of action. It is an agreement between the parties and a party fully knowing of its rights has agreed not to assert a right for a consideration.

“… whenever waiver is pleaded, it is for the party pleading the same to show that an agreement waiving the right in consideration of some compromise came into being.”

The Court also explained the difference between waiver and acquiescence and said that for constituting acquiescence or waiver it must be established, that though a party knows the material facts and is conscious of his legal rights in a given matter, but fails to assert its rights at the earliest possible opportunity, it creates an effective bar of waiver against him. Whereas, acquiescence would be a conduct where a party is sitting by, when another is invading his rights. The acquiescence must be such as to lead to the inference of a licence sufficient to create a new right in the defendant.

[Kalparaj Dharamshi v. Kotak Investment Advisors Ltd,  2021 SCC OnLine SC 204, decided on 10.03.2021]


*Judgment by: Justice BR Gavai

Appearances before the Court by:

For Kalparaj: Senior Advocates Mukul Rohatgi, Dr. Abhishek Manu Singhvi and Pinaki Mishra,

For Deutsche Bank and CoC: Senior Advocate K.V. Viswanathan

For Fourth Dimension Solutions Limited: Senior Advocates C.A. Sundaram, Gopal Sankar Narayanan and P.P. Chaudary,

For RP: Senior Advocates Shyam Divan

For KIAL: Senior Advocate: Senior Advocate Neeraj Kishan Kaul

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Case BriefsHigh Courts

Calcutta High Court: A Division Bench of I.P. Mukerji and Md. Nizamuddin, JJ., allowed an appeal filed against the order of the Single Judge whereby he had rejected the appellant-plaintiff’s application for grant of interim injunction restraining the respondent-defendant from using the subject trademark.

The appellant and the respondent were in the business of manufacturing TMT bars. The appellant was the registered proprietor of the word mark “Shyam” and label marks featuring this word prominently. The appellant filed a suit for infringement of the said trademark and passing off against the respondent. The interlocutory application filed by the appellant for grant of interim injunction till the disposal of the suit was rejected by the Single Judge as noted above. Aggrieved thereby, the appellant approached the High Court.

Two main contentions advanced on behalf of the respondent were: Firstly, that the registration of the mark “Shyam”, which is the name of a God, was invalid. And secondly, it was contended that the appellant filed the suit after a considerable delay and, therefore, the defence of acquiescence was available to the respondent.

Regarding the first contention, the High Court, relying on Lal Babu Priyadarshi v. Amritpal Singh, (2015) 16 SCC 795, held that it could not be said as an infallible principle of law that registration of the word “Shyam” was invalid and it should be cancelled. The respondent has to prove, by leading cogent evidence, before the Board, that indeed the name ‘Shyam’ refers to God only, is not distinctive of the appellant, is generic and common. Hence, its registration was invalid. Since, at the instant stage, the respondent was not able to establish this even prima facie, the Court rejected the first contention.

Coming to the second contention, the Court noted that the appellant was aware of the use of their trademark by the respondent since at least December 2015. Yet, the appellant took their own time in filing the suit and applying for an injunction, i.e., in 2019. However, the Court was of the view that the appellant could not be accused of acquiescing to the use of their trademark by the respondent, though it could be said that they took no action to restrain the respondent from using it. Reliance was placed on Power Control Appliances v. Sumeet Machines (P) Ltd., (1994) 2 SCC 448, wherein the Supreme Court has said that acquiescence would only arise out of the positive acts and not merely by silence or inaction. It has gone to the extent of saying that acquiescence was “one facet of delay”.

In such view of the matter of the Court, considering the prima facie case and balance of convenience, ordered that the respondent would be injuncted from using the trademark in question till the disposal of the infringement suit filed by the appellant, which effect from 1-5-2020, by which date, the respondent was permitted to clear the existing stock. [Shyam Steel Industries Ltd., v. Shyam Sel & Power Ltd., 2019 SCC OnLine Cal 5177, decided on 24-12-2019]

Case BriefsHigh Courts

Himachal Pradesh High Court: Tarlok Singh Chauhan, J. contemplated a writ petition where the relief sought by the petitioner was ‘that the bid finalized in favor of respondent, pursuant to the auction with regard to the property referred to in auction notice which was published in the local newspaper may kindly be quashed and set-aside and that Respondent 1 be directed to conduct fresh auction of the property in question in accordance with law and established procedure as approved by law.’

Factual matrix of the case was that the petitioner was one of the prospective buyers in an auction that the proceedings whereof were eventually finalized in favor of Respondent 2, auction notice was published in a local newspaper for the invitation of tenders for the sale of the said properties. The attached properties were named under “Govind Sagar Matasya Sahakari Vipanan Avam Apurti Sang Ltd., Bilaspur”. The petitioner contended that the property which was put to sale was liable to be auctioned separately but the authorities auctioned it as on composite unit whereas, the petitioner as per the tender form had only applied for Items 2 and 4 i.e. one shop and compressor, condenser and allied fittings with panelling and pipeline, but Respondent 1 allowed Respondent 2 to make composite bid, which resulted in low price being fetched for the property and, therefore, an undue favor had been shown towards the alleged respondent. 

On the contrary, the respondent contended that the petitioner had filed a reply wherein preliminary objections regarding suppression of material facts, estoppel etc. had been taken. On merits, it was averred that the auction of the entire property was done through an open bid, so that the same may have fetched the highest price.

The Court observed that, a perusal of the quotation rates undoubtedly revealed that four properties had been mentioned in the auction notice, but there was nothing in the notice to suggest that each of the properties was to be sold separately. The Court further stated that if “petitioner was really serious in bidding for two items, then he would had definitely offered a bid, but the records revealed that no bid was made by the petitioner despite his being present there. All the proceedings took place in front of the petitioner, yet he never objected to the same. Having participated in the proceedings (though not bidding) with his eyes wide open, the petitioner cannot now turn around and question the bidding process.”

The Court further commented on the delay by the petitioner and stated that Long period of silence and inaction on the part of the petitioner amounts to acquiescence and estoppel, more particularly, when there is no explanation for his long silence. It was further opined that if the petitioner was ready to offer the higher price than offered by Respondent 2 and such offer could have been put forth even at any such subsequent date thereto, but the petitioner failed to do so. Hence, the petition was rejected as the Court found no merits. [Jafar Khan v. Distt. Audit Officer, 2019 SCC OnLine HP 1269, decided on 13-08-2019]