Nbu Bearings Private Limited And Anr vs Union Of India And 4 Ors

NBU Bearings Pvt. Ltd. & Anr. .. Petitioners Versus Union of India & Ors. .. Respondents

...................  Mr. Venkatesh Dhond, Senior Advocate a/w. Mr. Rohan Kadam, Mr. Bhuvan Singh, Mr. Ashwini Kumar i/by Ms. Gunjan Chaubey, Advocates for the Petitioners.  Mr. Vijay Kantharia a/w. Mr. Ram Ochani, Advocates for Respondent Nos. 2 to 5.  Mr. Alankar Kirpekar and Mr. Shekhar Bhagat i/by Ms. Neelaja Kirpekar, Advocates for Respondent No.6. ...................

CORAM : UJJAL BHUYAN & MILIND N. JADHAV, JJ.

RESERVED ON : MARCH 2, 2021. PRONOUNCED ON : MARCH 12, 2021.

JUDGMENT :

(PER : MILIND N. JADHAV, J.)

Heard Mr. Venkatesh Dhond, learned senior

counsel for the petitioners; Mr. Vijay Kantharia, learned

counsel for respondent Nos. 2 to 5; and Mr. Alankar Kirpekar,

learned counsel for respondent No.6.

2. By the present petition fled under Article 226 of

the Constitution of India, petitioners have prayed for a writ of

mandamus to respondent no. 4 i.e. Deputy / Assistant

Commissioner of Customs (Special Intelligence &

1 of 48 wp(L)3371 of 2021.doc

Investigation Branch), Nhava Sheva - V, Tal Uran, District -

Raigad to revoke the suspension of clearance of its

consignment i.e. bearings imported by petitioner No.1 on

05.01.2021 having "TR" mark / brand.

2.1. Petitioner No.1 has fled 6 bills of entry, all dated

04.01.2021, with customs authorities i.e. respondent Nos. 2

to 5 for clearance. Petitioner asserts that without issuing any

order of confscation and in violation of the provisions of Rule

7 of the Intellectual Property Rights (Imported Goods)

Enforcement Rules, 2007 (briefy referred to as "the IPR

Rules" hereinafter) and the provisions of the Copyright Act,

1957 (for short 'the said Act') respondent Nos.2 to 5 have

suspended clearance of the imported goods. Being

aggrieved, petitioners have approached this Court for seeking

release of its consignment.

3. Before we advert to the submissions made on

behalf of the respective parties, it will be apposite to refer to

the relevant facts briefy :-

3.1. Petitioner No.1 is a company incorporated under

the Companies Act, 1956 and is engaged in import and

wholesale trade of bearings, bearing units and housing for

2 of 48 wp(L)3371 of 2021.doc

bearings. Petitioner No.1 is the importer and distributor of

bearings (manufactured and marketed by petitioner No.2) in

India under the trademark "TR". Petitioner No.2 is

incorporated under the laws of the People's Republic of China

having its ofce at Guan Tai Road, Dongguan City, P. R. China

and carries on business of manufacturing and marketing of

spherical outside surface ball bearing units, ball bearings,

spherical roller bearings, etc. under the trademark "TR" since

1979. The trademark "TR" is registered in 18 countries

across the world apart from India. In India the trademark

"TR" is registered under the provisions of the Trade Marks Act,

1999 under TM No. 739266 dated 11.12.1996. This

registration has been renewed from time to time and is valid

and subsisting till 11.12.2026.

3.2. Petitioner No.1 fled 6 Bills of Entry Nos. 2220018,

2221281, 2224083, 2224577, 2224920 and 2225033, all

dated 04.01.2021, for a total assesseable value of goods at

Rs.2,31,39,344.00 with the customs authorities, Nhava Sheva

port i.e. respondent Nos. 2 to 5 under the provisions of

section 46 of the Customs Act, 1962 in respect of the

imported goods i.e. bearings with trademark "TR" brand

imported from petitioner No.2 in China.

3 of 48 wp(L)3371 of 2021.doc

3.3. On 05.01.2021, the customs authorities i.e.

respondent Nos. 2 to 5 without passing any order suspended

clearance of the goods imported by petitioner No.1 vide the 6

Bills of Entry.

3.4. On 05.01.2021 itself petitioner No.1 submitted all

relevant documents evidencing registration of "TR" mark

under the Trade Marks Act, 1999 under class 7 (Bearing Unit,

Housing for Bearing) in the name of petitioner No.2 and

documents relating to authorisation of petitioner No.1 by

petitioner No.2 as its authorised importer and distributor of

"TR" mark bearing in India to the customs authorities.

3.5. It may be mentioned that respondent No.6 had

fled complaint dated 26.12.2020 with respondent Nos. 2 to 5

raising a "system alert" that the goods imported by petitioner

No.1 are suspected to be goods infringing Intellectual

Property Rights and such import is in contravention of the

provisions of Rule 7 of the IPR Rules enacted under the

Customs Act, 1962 and the Trade Marks Act, 1999.

3.6. On 05.01.2021 some samples of the goods

imported were taken by the Special Intelligence and

Investigation Branch in the ofce of the Commissioner of

4 of 48 wp(L)3371 of 2021.doc

Customs, Nhava Sheva - V from the consignment and it was

orally informed that the entire consignment has been

suspended for clearance by respondent No. 3 i.e. Additional

Commissioner of Customs (Special Intelligence &

Investigation Branch), Nhava Sheva - V based on a "system

alert" on the ground of infringement of Intellectual Property

Rights i.e. (IPR infringement).

3.7. On 13.01.2021 and 19.01.2021 petitioner No.1

addressed letters to respondent Nos. 2 and 4 and submitted

all relevant documents seeking clearance of its consignment.

3.8. Petitioners' subsequent consignment in respect of

identical goods i.e. "TR" brand bearings arrived at the Nhava

Sheva Port in Mumbai on 20.01.2021. Petitioner No.1 fled

various Bills of Entry for seeking clearance. Petitioners were

allowed to clear the said consignment by the customs

authorities on submitting the requisite consignment specifc

bond alongwith 25% security of the assessable value of the

goods (which the petitioners submitted by way of bank

guarantee).

3.9. Being aggrieved with the continued suspension of

clearance of the goods imported by the 6 Bills of Entry, all

5 of 48 wp(L)3371 of 2021.doc

dated 04.01.2021 by respondent Nos. 2 to 5, petitioners fled

the present petition on 03.02.2021.

4. Initially, Mr. Jagteshwar Singh, proprietor of

Reetzara International was not impleaded as a respondent

though he had appeared seeking impleadment. By order

dated 09.02.2021 petitioners were granted liberty to implead

him as a respondent. Accordingly, he has been impleaded as

respondent No.6.

5. Mr. Venkatesh Dhond, learned senior counsel

appearing on behalf of the petitioners submitted that

suspension of clearance of goods imported by petitioner No.1

and its continuation without informing the grounds for such

seizure and detention is in violation of the principles of

natural justice; continued suspension of clearance of goods is

contrary to the statutory provisions of Rule 7 of the IPR Rules

enacted under the Customs Act, 1962 read with the

Copyright Act, 1957; respondent Nos. 2 to 5 have no authority

to suspend clearance of the imported goods beyond a period

of 20 days at the highest; petitioner No.1 having submitted

the documentary evidence in respect of its authorisation and

distribution of the goods, the goods should be released after

the prescribed period of 3 days from the date of interdiction

6 of 48 wp(L)3371 of 2021.doc

of the consignment subject to the condition of depositing the

specifc bond alongwith 25% security of the value of the

interdicted goods in view of the IPR Rules read with the

clarifcation issued in two Central Board of Excise and

Customs (CBEC) circulars dated 29.10.2007 and 24.10.2011.

5.1. He submitted that Rule 7 of the IPR Rules

prescribes the procedure for suspension of clearance of

goods. Under sub-rule 1(a) of Rule 7 goods can be suspended

from clearance only when there is a reasonable belief that the

imported goods are suspected to be infringing Intellectual

Property Rights and such reasonable belief has to be a legally

sustainable reasonable belief, as also a fair, objective and

informed reasonable belief to be formed on the basis of

material facts available on record that petitioners having duly

furnished documents evidencing registration of trademark

and authorisation to import to the authorities, continuation of

restraint is uncalled for; petitioners were not informed about

the joining of the complainant i.e. respondent No.6 who

registered the 'system alert' and submitted the requisite

consignment specifc bond along with 25% security of the

value of goods within 10 days leading to suspension;

procedural safeguards provided under Rule 7 having not been

followed the impugned action of continuing suspension of

7 of 48 wp(L)3371 of 2021.doc

clearance of the goods violated the rights guaranteed to the

petitioner under Articles 14, 19(1)(g) and 21 of the

Constitution of India and such action is arbitrary, high handed

and without authority of law.

5.2. He submitted that petitioners have been litigating

with respondent No.6 and M/s. Harman Overseas for

ownership of the right to use the trademark / trade name

"TR"; rival claims have been made by both sides over

claiming sole proprietorship of the trademark "TR"; Suit No.

674 of 2014 has been fled by petitioners against M/s.Harman

Overseas and its three partners namely Harman Deep Singh,

Mrs. Inderjeet Singh and Mr. Jagteshwar Singh (respondent

No.6) in the Bombay High Court and Suit No. 2431 of 2013

has been fled by M/s. Harman Overseas and its partners

against petitioners in the Delhi High Court; neither the

Bombay High Court nor the Delhi High Court has passed any

interim / restraint order against the rival party from using the

"TR" trademark; respondent No.6 has suppressed from the

customs authorities the fact that a suit has been fled against

him prior in point of time to restrain him from using the

trademark "TR" over which he is claiming copyright

proprietorship; respondent No.6 has further suppressed that

he fled a suit for copyright infringement of "TR" mark in the

8 of 48 wp(L)3371 of 2021.doc

Delhi High Court in 2013 wherein he has relinquished his

prayer for interim relief and the trial with respect to his

entitlement and title to copyright is pending; once the details

of litigation between petitioner No.1 and respondent No.6 are

furnished to respondent Nos.2 to 5, under the statutory

provisions namely sub-rule (4) of section 53 of the Copyright

Act, 1957, the customs authority ought to have sought a

restraint order of the Court having jurisdiction from

respondent No.6 in respect of temporary or permanent

disposal of the goods within 14 days from the date of

detention; respondent No.6 having not produced such an

order before the customs authorities, further detention of the

imported goods is per se illegal; respondent No. 6 had applied

for interim relief by Interim Application No. 19725 of 2013 in

the Delhi High Court; on 6th December, 2013, respondent No.6

moved its interim application (IA No. 19725 of 2013) for ad-

interim relief; no ad-interim relief was granted; however

notice was issued and directions were given to parties for

fling afdavits in reply and rejoinder; interim application of

respondent No.6 thus remained pending; thereafter

petitioners fled written statement and respondent No.6 fled

afdavit of evidence; trial has now commenced; however on

14th March, 2018, when the interim application for interim

9 of 48 wp(L)3371 of 2021.doc

relief was taken up for hearing the Court recorded that

respondent No.6 did not wish to press its pending application

for ad-interim relief since the trial of the suit had already

commenced; interim application for interim relief was

accordingly disposed of; thus respondent No.6 gave up his

prayer for interim relief (which could have included a restraint

against importation of goods by the petitioners) and instead

submitted himself to determination of his rights to

adjudication after trial; respondent No. 6's title and

entitlement to copyright of "TR" brand is being tried in the

Delhi High Court suit; by order dated 9th January, 2017, the

Delhi High Court has commenced the trial, inter alia framing

the issues directly relating to the lis between the parties to

claim ownership of "TR" mark / brand i.e. Issue No. (iii) and

(iv) therein which read as under :-

Issues :

"i..........

ii............

iii. Whether the plaintiffs are owner and proprietor of the trademark label TR?

iv. Whether the defendants are infringing the copyright in the artwork of trademark / label of the plaintiff ? ............"

5.3. He submitted that during pendency of the suit in

the High Court, on 11th February, 2016, respondent No.6

applied for copyright registration of the "TR" artwork and

registration was granted on 23.02.2017; respondent No.6 did

10 of 48 wp(L)3371 of 2021.doc

not amend the Delhi High Court suit to place on record or rely

upon the Copyright Registration Certifcate; since it being

settled law that registration of a copyright is not necessary in

law and grant of registration does not confer a higher legal

right to a copyright claimant nor does it improve his cause of

action; registration is merely a prima facie proof of entry in

the Copyright Register; respondent No.6 having been

unsuccessful in securing any interim relief in the suit fled in

the Delhi High Court in the year 2013, more that 7 years

later, on 19th November, 2020 made application to the

customs department seeking registration as a right holder in

respect of the "TR" mark artistic work and claimed copyright

therein by submitting Registration Certifcate dated

23.02.2017 granted by the Registrar of Copyrights by

suppressing the entire history of prior and pending litigation

between the parties; respondent No.6's complaint in

December 2020 was limited to infringement of copyright

only; it did not seek relief for trademark infringement;

petitioners are registered proprietors entitled to protection

under the Trade Marks Act; by virtue of section 28(3) and

section 30 of the Trade Marks Act no case for infringement

can lie against a registered proprietor of a trademark;

respondent No.6 by giving up his right to seek interim relief

11 of 48 wp(L)3371 of 2021.doc

accepted that petitioners could not be restrained or

interdicted in the interregnum from importing "TR" mark

bearings pending determination of its title suit to copyright

ownership in the trial pending before the Delhi High Court;

respondent No.6's invocation of the IPR Rules is illegal and

impermissible; IPR Rules do not confer any new intellectual

property rights but merely provide a mechanism to enforce

the existing ones; respondent No.6 cannot apply as a 'right

holder' when his very entitlement to copyright (the

intellectual property right in question) is expressly an issue

and pending adjudication in a prior civil suit fled seven years

earlier; pendency of civil suit between the parties (where

interim relief was not pressed) rendered the parallel

invocation of summary remedy under the IPR Rules

inappropriate and impermissible; Court should harmoniously

construe the IPR Rules with Section 53 of the Copyright Act,

1957 and Rule 79 of the Copyright Rules, 2013 and interpret

the IPR Rules to mean that it is the duty of the Commissioner

of Customs or the ofcer duly authorised to release the

suspended consignment on expiry of the period of fourteen

days in case the right holder fails to produce an order from

the competent court restraining the Commissioner or the

ofcer duly authorised from releasing the suspended

12 of 48 wp(L)3371 of 2021.doc

consignment of goods; respondent No.6's complaint was

limited to infringement of copyright and it did not seek relief

for trademark infringement since the petitioners are

registered proprietors under the Trademarks Act; in case of

confict the Copyright Act and the Copyright Rules will prevail

over the IPR Rules.

5.4. He submitted that Section 53 was introduced in

2012; Rule 79 was framed alongwith the Copyright Rules,

2013; they being subsequent legislative enactments after the

IPR Rules must necessarily be held to prevail over the IPR

Rules since they operate in the same feld of importation and

the same subject matter i.e. copyright; respondent No. 6's

complaint dated 26th December, 2012, listed his trademark

registration, however detention and seizure of petitioners'

goods was sought on the ground that, "M/s. NBU Bearings

Pvt. Ltd... is importing bearings under the brand TR which

are in violation of our client's Copyright."; thus,

respondent No.6's grievance was only limited to his allegation

of copyright infringement; petitioner No.2 is a registered

proprietor of its "TR" mark under Class 7 (Regn No. 739266)

and its trademark is subsisting; since petitioner No.2 is a

registered proprietor, respondent No.6's trademark

registration is curtailed by Section 28(3) and of the Trade

13 of 48 wp(L)3371 of 2021.doc

Marks Act and therefore, respondent No.6 has no right to take

action against the petitioners under the Trade Marks Act.

6. PER CONTRA Mr. Kantharia, learned counsel for

respondent Nos. 2 to 5 has referred to the afdavit in reply

dated 23.02.2021 fled by the Commissioner of Customs,

Nhava Sehva - V Commissionerate and contended that M/s.

Reetzara International (proprietory concern of respondent

No.6) has been granted registration of "TR" brand by the

ofce of the Principal Commissioner of Customs, Inland

Container Depot, Tughlakabad (Import), Delhi vide UPRN No.

PINTKD6CR0010 under copyright and vide UPRN No.

PINTKD6TM0767; as such M/s. Reetzara International by way

of registration under the IPR Rules is the 'right holder' in

terms of the said rules; ofce of the Deputy Commissioner of

Customs, IPR Cell, on request of the right holder acted in

accordance with the Customs Act, 1962 and IPR Rules as far

as import by petitioner No.1 is concerned; the IPR Cell, JNCH

received two e-mails dated 26.12.2020 and 29.12.2020 from

M/s. United Overseas Trade Mark Company acting on behalf

of its client Mr. Jagteshwar Singh i.e. respondent No.6,

proprietor of M/s. Reetzara International and owner of

trademark "TR" and copyright under the artistic work of "TR"

14 of 48 wp(L)3371 of 2021.doc

bearings for taking action on the consignment imported by

petitioner No.1; as such goods of "TR" brand received from

petitioner No. 2 were suspended for clearance in accordance

with the IPR Rules as the origin of the goods were declared as

China; the right holder specifed China as the country from

which the infringing / pirated goods were suspected to be

imported; representative sealed samples were forwarded to

the ofce of Deputy Commissioner of Customs, IPR Cell by

the ofcers looking after examination and out of charge of the

imported goods; authorized representative of the right holder

was informed vide e-mail dated 07.01.2021 about suspension

of clearance of goods imported by petitioner No. 1 and asked

to join the proceedings; the authorized representative of the

right holder presented for inspection and examination of

goods within the stipulated period as prescribed in the IPR

Rules in accordance with para 8 of the said rules;

representative of right holder submitted technical report to

the Deputy Commissioner of Customs, IPR Cell vide letter

dated 16.01.2021 stating that the suspended goods are

infringing the trademark 'TR bearing' and copyright in the

artistic work "TR" of its client; ofce of Deputy Commissioner

of Customs, IPR Cell intimated the authorized representative

of the right holder value of the imported goods vide e-mail

15 of 48 wp(L)3371 of 2021.doc

dated 20.01.2021 and called for submitting the requisite bond

and bank guarantee within 3 working days; requisite bond

and bank guarantee having being submitted, the goods were

detained by following the due process of law.

6.1. He submitted that respondent Nos. 2 to 5 have

complied with the provisions of the Customs Act read with the

IPR Rules by following the due process of law; petitioners

initially neither submitted any relevant documents before

respondent Nos. 2 to 5 relating to its lis with respondent No. 6

nor any documents relating to its registration of "TR" brand

under the Trade Marks Act, 1999 under class 7 in the name of

petitioner No. 2; petitioner No. 2 is not registered with the

customs under the IPR Rules 2007; petitioner No. 2 is using

the 'TR Brand' for manufacture and marketing of bearings

since 1976 but it is registered in India under the Trade Marks

Act, 1999 w.e.f. 11.12.1996. He therefore prayed for

dismissal of the petition.

7. Mr. Alankar Kirpekar, learned counsel appearing for

respondent No.6 submitted that he fled complaint dated

26.12.2020 with the customs department against the

petitioner's import of goods bearing "TR" brand from China

upon which consignment under the 6 Bills of Entry, all dated

16 of 48 wp(L)3371 of 2021.doc

04.01.2021, were suspended from clearance by the customs

authorities; respondent No.6 has fled relevant documents

and particulars with respondent Nos. 2 to 5 pertaining to its

Intellectual Property Rights in "TR" brand in accordance with

the IPR Rules; mark "TR" belongs to respondent No.6 and is

duly registered with the copyright ofce bearing Registration

No. A116201 / 2017 dated 23.02.2017 in relation to the

artistic work published in the year 1986 and is being used

continuously since then; application for cancellation /

rejection of petitioner No.2's trademark registration bearing

registration No. 739266 in respect of "TR" trademark has

been fled and the said application is pending adjudication

before the trademark ofce; registration of trademark under

the Trade Marks Act by petitioner No.1 is not a valid defence

to an action initiated by a registered owner of copyright under

the Copyright Act; rights granted under Section 28(1) of the

Trade Marks Act are sub-servient to the common law rights

recognised and expressly protected under Section 27 of the

Trade Marks Act; respondent No.6 is admittedly a prior

adopter and user of the trademark "TR" as compared to the

petitioner; respondent No.6 has been using the trademark

"TR" since 1992; on respondent No.6 fling application under

Section 19 of the Designs Act, 2000 on 17.12.2015 before the

17 of 48 wp(L)3371 of 2021.doc

competent authority seeking cancellation of design

application No. 249672 of the petitioner, petitioner

immediately surrendered its registration under the Designs

Act, 2000 by accepting that the registration was obtained by

mistake; respondent No.6 has regularly enforced its

proprietory rights in the trademark "TR" against third parties

who have indulged in using the same by fling appropriate

proceedings in diferent fora.

7.1. In respect of the present case, he submitted that

petitioner fled a suit i.e. Suit No. 674 of 2014 before the

Bombay High Court against respondent No.6 for claiming

various reliefs on the basis of its trademark registration and

prior use of "TR" brand; however Bombay High Court declined

to pass interim injunction in favour of petitioners against

respondent No.6 in the said suit as well as in appellate

proceedings; simultaneously respondent No.6 fled Civil Suit

(Commercial Suit) No. 1528 of 2016 against petitioners in the

Delhi High Court seeking various reliefs on the ground of

infringement of its trademark "TR" and passing of by the

petitioners; respondent No.6 Mr. Jagteshwar Singh is the sole

proprietor of M/s. Reetzara International having its address at

608, Best Sky Tower, Netaji Subhash Place, District Centre,

Wazirpur, New Delhi - 110034 and is engaged in the business

18 of 48 wp(L)3371 of 2021.doc

of manufacturing, trading and importing of various types of

ball bearings, pillow blocks, bearing units and related goods

since 1986; respondent No.6 bonafdely adopted the

trademark "TR" in the year 1986 and started using it in

relation to his goods and business and obtained Registration

No. 1349903 in class 07 since 08.04.2005 for all types of ball

bearings, bearing units and pillow blocks; the artwork

involved in the trademark of respondent No.6 is an original

artwork of which respondent No.6 is the owner and proprietor

and holds copyright therein within the meaning of the

Copyright Act; respondent No.6 has obtained copyright

registration No. A-116201/2017 dated 23.02.2017 and taken

all necessary steps towards protection of its trademark and

copyright with the customs authorities and obtained the

recordials under the IPR Rules as per the following details :-

Particulars Registration No. Unique Permanent Registration No. (in short "UPRN") Trademark 13449903 PINTKD6TM0767 TR BEARING (DEVICE) Copyright A-116201/2017 PINTKD6CR0010 TR (Artistic Work)

7.2. He submitted that based on the customs recordial

of trademark "TR" and copyright in the artistic work obtained

by respondent No.6 complaint was preferred on 26.12.2020

19 of 48 wp(L)3371 of 2021.doc

with respondent No.2 requesting for seizure of any

consignment imported by petitioner No.1 bearing the artistic

work involving the label of "TR"; acting on the said complaint

respondent Nos. 2 to 5 suspended clearance of the

consignment imported by petitioner No.1 under the 6 Bills of

Entry and notifed the same by e-mail dated 07.01.2021;

pursuant to which respondent No.6 fled representation dated

07.01.2021 expressing intention to join the proceedings under

the IPR Rules within 10 days; on 16.01.2021 respondent No.6

conducted inspection of the suspended goods and submitted

assessment report that the imported goods were infringing

the copy right in the artistic work "TR" registered in favour of

respondent No.6; customs authorities provided the assessable

value of the imported goods under the concerned Bills of

Entry to respondent No.6 on 20.01.2021 upon which within

three days respondent No.6 submitted a surety bond of

Rs.2,54,53,277.00 and bank guarantee of Rs.63,63,319.00

against the aforesaid 6 Bills of Entry to the respondent

authorities; as such the detained goods are liable for absolute

confscation and/or destruction in accordance with law.

7.3. He submitted that respondent No.6 possesses

registered copyright of the trademark "TR" as also

registration under the Intellectual Property Rights and both

20 of 48 wp(L)3371 of 2021.doc

registration certifcates have been produced; petitioners have

failed to prove prior use of the trademark "TR" in the Bombay

High Court; petitioner's certifcate of registration of "TR"

trademark is dated 11.12.1996 whereas respondent No.6 has

been using "TR" brand since 1985-86; copyright of

respondent No.6 to use "TR" brand is not questioned by the

petitioner in the suit pending in the Bombay High Court;

registration of copyright involves detailed procedure set out

in Chapter - X of the Copyright Act and more specifcally

sections 44 to 48 of the Act; complaint to respondent Nos. 2

to 5 has been made under the IPR Rules with respect to

copyright registration of respondent No.6; as such pendency

of any civil suit did not bar respondent No.6 from taking

action under the provisions of section 53 of the Copyright Act

read with the IPR Rules; respondent No.6 is free to take

appropriate action under the provisions of the Trade Marks

Act, the Customs Act as also the Designs Act for violation and

copyright infringement of the trademark "TR" used by

respondent No.6 since 1985-86.

7.4. In support of his case he has referred to and relied

upon the case of Kamaladevi Agarwal vs. State of West

Bengal and Ors. decided on 17.10.2001 and reported in

2002 (1) SCC 555 to emphasise that where civil and

21 of 48 wp(L)3371 of 2021.doc

criminal cases are pending in respect of the same cause of

action, precedence shall be given to the criminal proceedings.

He has referred to para 15 of the said case which reads thus :

"15. We have already noticed that the nature and scope of civil and criminal proceedings and the standard of proof required in both matters is different and distinct. Whereas in civil proceedings the matter can be decided on the basis of probabilities, the criminal case has to be decided by adopting the standard of proof of "beyond reasonable doubt". A Constitution Bench of this court. dealing with the similar circumstances, in M.S. Sheriff & Anr. v. State of Madras & Ors. held that where civil and criminal cases are pending, precedence shall be given to criminal proceedings. Detailing the reasons for the conclusions, the court held:

"As between the civil and the criminal proceedings we are of the opinion that the criminal matters should be given precedence. There is some difference of opinion in the High Courts of India on this point. No hard and fast rule can be laid down but we do not consider that the possibility of conflicting decisions in the civil and criminal courts is a relevant consideration. The law envisages such an eventuality when it expressly refrains from making the decision of one court binding on the other, or even relevant, except for certain limited purposes, such as sentence of damages. The only relevant consideration here is the likelihood of embarrassment.

Another factor which weighs with us is that a civil suit often drags on for years and it is undesirable that a criminal prosecution should wait till everybody concerned has forgotten all about the crime. The public interests demand that criminal justice should be swift and sure; that the guilty should be published while the events are still fresh in the public mind and that the innocent should be absolved as early as is consistent with a fair and impartial trial. Another reason is that it is undesirable to let things slide till memories have grown too him to trust.

This however, is not a hard and fast rule. Special considerations obtaining in any particular case might make some other course more expedient and just. For example, the civil case or the other criminal proceeding may be so near its end as to make it expedient to stay it in order to given precedence to a prosecution ordered under S. 476. But in this case we are of the view that the civil suits should be stayed till the criminal proceedings have furnished."

8. In rejoinder submissions Mr. Dhond, learned senior

counsel for the petitioners urged the Court to consider that

trademark registration of the petitioners is dated 11.12.1996

22 of 48 wp(L)3371 of 2021.doc

under the Trade Marks Act whereas the registration certifcate

under the Copyright Act relied upon by respondent No.6 has

been issued on 11.02.2016; the Copyright Act is a self

contained code which provides for remedy and, therefore, the

IPR Rules which have been referred to and relied upon by

respondent No.6 will not override the subsequent statutory

provisions of the Copyright Act; all relevant provisions of the

statutes afecting rights of the parties have to be read

harmoniously; provisions of sub-section (4) of Section 53 will

override the IPR Rules; in case of confict between circulars

and the Rules on the one hand and statutory provisions on

the other hand a harmonious interpretation will have to be

arrived at by the adjudicating authority depending upon the

facts and circumstances governing each case; in the present

case the customs authorities having obtained evidence of

pending litigations from both parties cannot adjudicate or

determine the issue of ownership of "TR" brand or even

cannot, prima facie, on the basis of the available material

decide and will have to inform the person who has given

notice under sub-section (1) of Section 53 i.e. the right holder

(respondent No.6) that if he does not produce any order from

the civil court having jurisdiction as to temporary or

permanent disposal of such goods, then it shall be mandatory

23 of 48 wp(L)3371 of 2021.doc

on the customs authorities to release the goods within 14

days from the date of detention; in the present case

considering that the lis of ownership of "TR" brand is the

subject matter of civil proceedings / suits in the Bombay High

Court and in the Delhi High Court and respondent No.6 having

failed to obtain any interim order from the civil courts having

jurisdiction for temporary or permanent disposal of the

imported goods, the action of suspension beyond the

prescribed period is illegal and the goods are required to be

immediately released to the petitioners.

8.1. Mr. Dhond has referred to and relied upon the case

of Amresh Tiwari v. Lalta Prasad Dubey decided on

11.04.2000 and reported in (2000) 4 SCC 440 to submit

that it is only the civil court which is competent to decide the

complex and vexed issue of title after taking evidence and

orders passed by the civil court would be binding on the

criminal court. He has referred to paras-13 and 14 of the said

judgment which reads thus :

"13. We are unable to accept the submission that the principles laid down in Ram Sumer's case would only apply if the civil Court has already adjudicated on the dispute regarding the property and given a finding. In our view Ram Sumer's case is laying down that multiplicity of litigation should be avoided as it is not in the interest of the parties and public time would be wasted over meaningless litigation. On this principle it has been held that when possession is being examined by the Civil Court and parties are in a position to approach the Civil Court for adequate protection of the property during the pendency of the dispute, the parallel proceedings i.e. Section 145 proceedings should not continue.

24 of 48 wp(L)3371 of 2021.doc

14. Reliance has been placed on the case of Jhummamal alias Devandas v. State of Madhya Pradesh and others, reported in 1989(1) RCR (Crl.) 428 : 1988(4) S.C.C. 452. It is submitted that this authority lays down that merely because a civil suit is pending does not mean that proceedings under Section 145 Criminal Procedure Code should be set at naught. In our view this authority does not lay down any such broad proposition. In this case the proceedings under Section 145 Criminal Procedure Code had resulted in concluded order. Thereafter the party, who had lost, filed civil proceedings. After filing the civil proceedings he prayed that the final order passed in the Section 145 proceedings be quashed. It is in that context that this Court held that merely because a civil suit had been filed did not mean that the concluded Order under Section 145 Criminal Procedure Code should be quashed. This is entirely a different situation. In this case the civil suit had been filed first. An Order of status quo had already been passed by the competent civil court. Thereafter Section 145 proceedings were commenced. No final order had been passed in the proceedings under Section 145. In our view on the facts of the present case the ratio laid down in Ram Sumer's case fully applies. We clarify that we are not stating that in every case where a civil suit is filed, Section 145 proceedings would never lie. It is only in cases where civil suit is for possession or for declaration of title in respect of the same property and for and granted by the civil court that proceedings under Section 145 should decide the question of title as well as possession between the parties and the orders of the civil court would be binding on the Magistrate."

9. Before we advert to the submissions made by the

learned counsel for the parties, it will be appropriate to

consider the relevant provisions of the applicable statutes

briefy.

10. The Customs Intellectual Property Rights (Imported

Goods) Enforcement Rules, 2007 (IPR Rules) were framed by

the Central Government in exercise of its powers under

section 11 (2) (n) & (u) read with section 156 of the Customs

Act. The IPR Rules are extracted as under :-

"NOTIFICATION No. 47/2007-CUSTOMS (N.T.)

G.S.R. 331(E) - In exercise of the powers conferred by sub-section

25 of 48 wp(L)3371 of 2021.doc

(1) of section 156 of the Customs Act, 1962(52 of 1962), read with clauses (n) and (u) of sub- section (2) of section 11 of the said Act, the Central Government hereby makes the following rules, namely:-

1. Short title, commencement and application. -

(i) These may be called the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007.

(ii) They shall come into force on the date of their publication in the Official Gazette.

(iii) They shall apply to imported goods.

2. Definitions. -

(a) "goods infringing intellectual property rights" means any goods which are made, reproduced, put into circulation or otherwise used in breach of the intellectual property laws in India or outside India and without the consent of the right holder or a person duly authorized to do so by the right holder;

(b) "intellectual property" means a copyright as defined in the Copyright Act, 1957, trade mark as defined in the Trade Marks Act,1999, patent as defined in the Patents Act, 1970, design as defined in the Designs Act, 2000 and geographical indications as defined in the Geographical Indications of Goods (Registration and Protection) Act, 1999;

(c) " Intellectual property law" means the Copyright Act, 1957, the Trade Marks Act,1999, the Patents Act, 1970, the Designs Act, 2000 or the Geographical Indications of Goods (Registration and Protection) Act, 1999 ;

(d) " right holder" means a natural person or a legal entity, which according to the laws in force is to be regarded as the owner of protected intellectual property right, its successors in title, or its duly authorized exclusive licensee as well as an individual, a corporation or an association authorized by any of the aforesaid persons to protect its rights.

3. Notice by the right holder. -

(1) A right holder may give notice in writing to the Commissioner of Customs or any Customs officer authorised in this behalf by the Commissioner, at the port of import of goods infringing intellectual property rights in accordance with the procedures and under the conditions as set out in these Rules, requesting for suspension of clearance of goods suspected to be infringing intellectual property right.

(2) The notice in respect of goods infringing intellectual property rights shall be given in the format prescribed in the Annexure to these Rules.

(3) Every such notice shall be accompanied by a document as specified by the Commissioner, evidencing payment of application fee of Rs. 2000 (two thousand rupees only).

26 of 48 wp(L)3371 of 2021.doc

(4) If any of the information as required in the format under sub-rule (2) is not provided, the Deputy Commissioner of Customs or Assistant Commissioner of Customs may, as the case may be, ask the right holder or his authorised representative to provide the same within 15 days, which may be extended on sufficient reasons being shown.

(5) The right holder shall inform customs authority when his intellectual property ceases to be valid or if he ceases to be the owner of such intellectual property right.

4. Registration of notice by the Commissioner. -

(1) Within 30 working days from the date of receipt of the notice under sub-rule(1) of Rule 3, or from the date of expiry of the extended time as contemplated in sub-rule (4) of Rule3, as the case may be, the Commissioner shall notify the applicant whether the notice has been registered or rejected.

(2) In a case where the notice has been registered, the Commissioner shall indicate the validity period of the registration during which assistance by Customs shall be rendered. The minimum validity period shall be one year unless the noticee or right holder requests for a shorter period for customs assistance or action.

(3) The Commissioner granting the registration of the notice under sub-rule (2) shall inform, immediately through a letter by speed post or through electronic mode, all Custom offices covered by the notice of the details of the notice.

5. Conditions for registration. - The grant of registration under rule 4 shall be subject to following conditions, namely: -

(a) the right holder or his authorised representative shall execute a bond with the Commissioner of Customs for such amount with such surety and security as deemed appropriate by the Commissioner, undertaking to protect the importer, consignee and the owner of the goods and the competent authorities against all liabilities and to bear the costs towards destruction, demurrage and detention charges incurred till the time of destruction or disposal, as the case may be;

(b) the right holder shall execute an indemnity bond with the Commissioner of Customs indemnifying the Customs authorities against all liabilities and expenses on account of suspension of the release of allegedly infringing goods.

6. Prohibition for import of goods infringing intellectual property rights:- After the grant of the registration of the notice by the Commissioner on due examination, the import of allegedly infringing goods into India shall be deemed as prohibited within the meaning of Section 11 of the Customs Act, 1962.

7. Suspension of clearance of imported goods:-

27 of 48 wp(L)3371 of 2021.doc

(1)(a) Where the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, based on the notice given by the right holder has a reason to believe that the imported goods are suspected to be goods infringing intellectual property rights, he shall suspend the clearance of the goods.

(b) The Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case may be, may, on his own initiative, suspend the clearance of goods , in respect of which he has prima-facie evidence or reasonable grounds to believe that the imported goods are goods infringing intellectual property rights.

(2) The Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case may be, shall immediately inform the importer and the right holder or their respective authorised representatives through a letter issued by speed post or through electronic mode of the suspension of clearance of the goods and shall state the reasons for such suspension.

(3) Where clearance of the goods suspected to be infringing intellectual property has been suspended and the right holder or his authorised representative does not join the proceedings within a period of ten working days from the date of suspension of clearance leading to a decision on the merits of the case, the goods shall be released provided that all other conditions of import of such goods under the Customs Act, 1962, have been complied with:

Provided that the above time-limit of ten working days may be extended by another ten days in appropriate cases by the Commissioner or an officer authorized by him in this behalf.

(4) Where the Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case may be, has suspended clearance of goods on his own initiative and right holder does not give notice under rule 3 of the Rules or does not fulfill the obligation under Rule 5, within five days from the date of suspension of clearance, the goods shall be released provided that all other conditions of import of such goods under the Customs Act, 1962, have been complied with.

(5) Where the clearance of goods has been suspended, customs may, where it acts on its own initiative, seek from the right holder any information or assistance, including technical expertise and facilities for the purpose of determining whether the suspect goods are counterfeit or pirated or otherwise infringe an intellectual property right.

(6) Where the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, has suspended clearance of goods on his own initiative and right holder has given notice under rule 3 of the Rules and fulfilled the obligations under Rule 5, but , the right holder or his authorised representative does not join the proceedings within a period of ten working days from the date of suspension of clearance leading to a

28 of 48 wp(L)3371 of 2021.doc

decision on the merits of the case, the goods shall be released provided that all other conditions of their import under the Customs Act, 1962, have been complied with:

Provided that the above time- limit of ten working days may be extended by another ten working days in appropriate cases by the Commissioner or an officer authorized by him in this behalf.

(7) In the case of perishable goods suspected of infringing intellectual property rights, the period of suspension of release shall be three working days which may be extended by another four days subject to the satisfaction of the Commissioner or the officer authorized by him in this behalf that such extension shall not affect the goods.

(8) Notwithstanding anything contained in these Rules, in the case of suspension of clearance of perishable goods on the basis of notice of the right holder or his authorized representative, the right holder or his authorized representative shall join the proceedings as required under these Rules within three working days or the extended period as provided in sub-rule (7) and in case of suspension of clearance of perishable good by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, on his own initiative, the right holder shall give notice, execute a bond and join the proceedings as required under these Rules within three working days or the extended period as provided in sub-rule (7) , as the case may be, failing which the goods shall be released.

(9) If within ten working days or the extended period under sub-rule (6), as the case may be, and within three working days or the extended period as provided in sub-rule (7) of this rule in the case of perishable goods, the right-holder or his authorized representative joins the proceedings, the Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case may be, having reasons to believe that the goods are goods infringing intellectual property rights and liable to confiscation under section 111 (d) of the Customs Act, may seize the same under section 110 of the Customs Act.

8. Examination of goods by right holder.- The Commissioner or the officer duly authorized in this behalf shall allow a right holder and the importer or their duly authorized representatives to examine the goods, the clearance of which has been suspended, and may provide representative samples for examination, testing and analysis to assist in determining whether the goods are pirated, counterfeit or otherwise infringe an intellectual property right, without prejudice to the protection of confidential information.

9. Supply of information to the right holder. - At the request of the right holder, the Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case may be, shall inform the name and address of the importer and without prejudice to the protection of confidential information the Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case may be, may also provide additional relevant information relating to the consignment which has been suspended from clearance.

29 of 48 wp(L)3371 of 2021.doc

10. Supply of information to the importer. - At the request of the importer or his duly authorized representative, Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case may be, shall inform the name and address of the right holder and without prejudice to the protection of confidential information the Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case may be, may also provide additional relevant information relating to the consignment which has been suspended from clearance .

11. Disposal of infringing goods. - (1). Where upon determination by the Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case may be, it is found that the goods detained or seized have infringed intellectual property rights, and have been confiscated under section 111 (d) of the Customs Act, 1962 and no legal proceedings are pending in relation to such determination, the Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case may be, shall, destroy the goods under official supervision or dispose them outside the normal channels of commerce after obtaining "no objection" or concurrence of the right holder or his authorized representative:

Provided that if the right holder or his authorized representative does not oppose or react to the mode of disposal as proposed by the Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case may be, within twenty working days after having been informed, or within such extended period as may have been granted by the Commissioner at the request of the right holder, not exceeding another twenty working days, he shall be deemed to have concurred with the mode of disposal as proposed by the Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case may be:

Provided further that the costs toward destruction, demurrage and detention charges incurred till the time of destruction or disposal, as the case may be, shall be borne by the right holder.

(2) There shall not be allowed the re-exportation of the goods infringing intellectual property rights in an unaltered state.

(3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case may be, may on his own, or at the request of the right holder, retain samples of goods infringing intellectual property rights prior to their destruction or disposal and provide the same to the right holder or importer if such samples are needed as evidence in pending or future litigations.

12. Exclusion of baggage and De-minimis Imports.- Goods of a non-commercial nature contained in personal baggage or sent in small consignments intended for personal use of the importer are not subject to the above Rules.

13. Protection of action taken under the Rules.- Customs

30 of 48 wp(L)3371 of 2021.doc

officers when acting in good faith and having followed the procedures set out in these Rules shall not be liable for:

(a) any failure to detect goods infringing intellectual property rights,

(b) the inadvertent release of such goods, and

(c) any other action in respect of such goods.

10.1. The above rules are delegated legislation

framed in exercise of powers under:

(i) Section 11 of the Customs Act which confers the Central Government with power to prohibit importation or exportation of goods for purposes specified in S.11(2);

(ii) Section 11(2)(n) which prescribes a purpose of "protection of patents, trademarks, copyrights, designs and geographical indications";

(iii) Section 11(2)(u) which prescribes a purpose of "the prevention of the contravention of any law for the time being in force"; and

(iv) Section 156 which confers on the Central Government general rule making powers.

10.2. The IPR Rules do not confer any new

intellectual property rights. They prescribe a remedy to

prevent importation of goods that infringe intellectual

property rights recognized and defned under the parent

statutes relating to copyright, patent, trademarks, designs

and geographical indications.

10.3. The above position can be understood from a

reading the defnitions under Rules 1(a) to 2(d) of the IPR

Rules. Rule 2 of the Intellectual Property Rights (Imported

31 of 48 wp(L)3371 of 2021.doc

Goods) Enforcement Rules, 2007 defnes "goods infringing

intellectual property rights" to mean "any goods which are

made, reproduced, put into circulation or otherwise used in

breach of the intellectual property laws in India or outside

India and without the consent of the right holder or a person

duly authorized to do so by the right holder". Clause (b) of

Rule 2 of the said Rules defnes, "intellectual property" which

means a copyright as defned in the Copyright Act, 1957,

trademark as defned in the Trade Marks Act, 1999, patent as

defned in the Patents Act, 1970, design as defned in the

Designs Act, 2000 and geographical indications as defned in

the Geographical Indications of Goods (Registration and

Protection Act, 1999. Under clause (c) of Rule 2 of the said

Rules, "Intellectual property law" means the Copyright Act,

1957, the Trade Marks Act, 1999, the Patents Act, 1970, the

Designs Act, 2000 or the Geographical Indications of Goods

(Registration and Protection) Act, 1999. For any goods to be

called as "infringing the intellectual property rights" under the

Rules, there must be breach of intellectual property laws

under the respective statute; registration of notice for

protection of IPR under the IPR Rules with the customs

authorities does not ipso facto lead to breach of any of the

parent statutes, neither does it bring into its ambit any new

32 of 48 wp(L)3371 of 2021.doc

right which is not provided under the respective statute nor

does it extinguish any right, unless protected by an interim

order / order of the civil court.

10.4. The Copyright Act, 1957 was amended by the

Copyright (Amendment) Act, 2012. The Statement of Objects

and Reasons of the Bill declared that the amendments

proposed, inter alia, sought to :-

"3. (xix) strengthen enforcement of rights by making provisions of controls of importing infringing copies by the Customs department, disposal of infringing copies and presumption of authorship under civil remedies."

10.5. The 2012 Amending Act substituted section

53 in its entirety. Amended section 53 of the Copyright Act,

1957 reads thus :-

53. Importation of infringing copies. -- (1) The owner of any right conferred by this act in respect of any work or any performance embodied in such work, or his duly authorized agent, may give notice in writing to be Commissioner of Customs, or to any other officer authorized in this behalf by the Central Board of Excise and Customs, --

(a) that he is the owner of the said right, with proof thereof, and

(b) that he requests the Commissioner for a period specified in the notice, which shall not exceed one year, to treat infringing copies of the work as prohibited goods, and that infringing copies of the work are expected to arrive in India at a time an a place specified in the notice.

(2) The Commissioner, after scrutiny of the evidence furnished by the owner of the right and on being satisfied may, subject to the provisions of sub-section (3), treat

33 of 48 wp(L)3371 of 2021.doc

infringing copies of the work as prohibited goods that have been imported into India, excluding goods in transit:

Provided that owner of the work deposits such amount as the Commissioner may require as security having regard to the likely expenses on demurrage, cost of storage and compensation to the importer in case it is found that works are not infringing copies.

(3) When any goods treated as prohibited under sub-

section (2) have been detained, the Customs Officer detaining them shall inform the importer as well a the person who gave notice under sub-section (1) of the such goods within forty-eight hours of their detention.

(4) The Customs Officer shall release the goods, and they shall not longer be treated as prohibited goods, if the person who gave notice under sub-section (1) does not produce any order from a court having jurisdiction as to the temporary or permanent disposal of such goods within fourteen days from the date of their detention.

10.6. Though sub-section (1) to (3) of section 53

sets out the procedure after a complaint is fled by a right

holder i.e. owner of any work / mark, however after following

the procedure under sub-section (4) of section 53, a legal

duty is cast on the customs ofcer to release the goods and

no longer treat them as prohibited goods if the right holder

i.e. the person giving notice does not produce an order from a

court having jurisdiction as to the temporary or permanent

disposal of the goods within 14 days from the date of

detention.

10.7. The Copyright Rules, 1958 were repealed by

the Copyright Rules, 2013. Rule 79 of the 2013 Rules

34 of 48 wp(L)3371 of 2021.doc

provides for importation of infringing copies and is relevant.

Rule 79 reads thus :

79. Importation of infringing copies.- (1) Every notice, under sub-section (1) of section 53, shall be made to the Commissioner of Customs, or to any other officer authorized in this behalf, by the Central Board of Excise and Customs in accordance in Form-XVI and shall be accompanied by fee as specified in the Second Schedule.

(2) The person who gives notice under in sub-rule (1) shall deposit, within the time specified by the Commissioner, such amount as the Commissioner may deem fit as security having regard to the likely expenses on demurrage, cost of storage and compensation to the importer in case it is found that the works are not infringing copies.

(3) The Commissioner or the officer duly authorized in this behalf, on arrival of such works, if satisfied, shall suspend the clearance of such works for a period of fourteen days and shall inform the arrival and detention of work to the person who has given the notice.

(4) At the request of the importer or his duly authorized agent, Commissioner or the officer duly authorized in this behalf, shall inform the name and address of the person who gave the notice.

(5) The Commissioner or the officer duly authorized in this behalf shall release the consignment on expiry of a period of fourteen days, in case the person who gave notice failed to produce an order from the competent court having jurisdiction restraining him from releasing the suspended consignment of works.

10.8. Rule 79 of the 2013 Copyright Rules provides

that the Commissioner or the ofcer duly authorized must

release the consignment on expiry of a period of fourteen

days in case the person who gives notice fails to produce an

order from the competent court restraining the Commissioner

or the ofcer duly authorized from releasing the suspended

35 of 48 wp(L)3371 of 2021.doc

consignment of goods. The 2013 Copyright Rules were

enacted subsequent to the 2007 IPR Rules. Hence without a

court order of restraint placed before them, by detaining the

consignment beyond the prescribed period of 14 days,

ofcers of the customs department, who are also required to

observe the mandate of the 2013 Rules, have acted clearly

beyond jurisdiction.

10.9. Section 28 of the Trade Marks Act, 1999

provides for rights conferred by registration under the said

Act, and reads thus :

Section 28. Rights conferred by registration.-

(1) Subject to the other provisions of this Act, the registration of a trademark shall, if valid, give to the registered proprietor of the trademark the exclusive right to the use of the trade mark in relation to the goods or services in respect of which the trademark is registered and to obtain relief in respect of infringement of the trademark in the manner provided by this Act.

(2) The exclusive right to the use of a trademark given under sub-section (1) shall be subject to any conditions and limitations to which the registration is subject.

(3) Where two or more persons are registered proprietors of trademarks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration of the trademarks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of permitted use) as he would have if he were the sole registered proprietor.

36 of 48 wp(L)3371 of 2021.doc

10.10. Under sub-section (3) of section 28 of the Trade

Marks Act, 1999 once identical or nearly resembling

trademarks are registered in the name of two or more

persons under the said Act, these persons do not acquire

exclusive rights to use any of those trademarks against each

other but have the same rights as against the other persons.

10.11. Section 30 of the Trade Marks Act, 1999 provides

for limits on efect of registered trademark and sub-section

(2) thereof provides the conditions when there would be no

infringement of a trademark. Clause (e) of sub-section (2) of

section 30 of the Trade Marks Act is relevant and reads thus :

"(2) A registered trademark is not infringed where -

(a)............................

(b)............................

(c)............................

(d)............................

(e) the use of a registered trade mark, being one of two or more trademarks registered under this Act which are identical or nearly resemble each other, in exercise of the right to the use of that trademark given by registration under this Act."

10.12. Rule 7 of the IPR Rules provides the procedure for

suspension of clearance of goods. Sub-Rule (1)(a) of Rule 7 is

directly relevant in the present case and reads thus :

"Where the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, based on the notice given by the right holder has a reason to believe that the imported goods are suspected to be goods infringing intellectual property rights, he shall suspend the clearance of the goods.

37 of 48 wp(L)3371 of 2021.doc

11. On consideration of the statutory provisions

alluded to hereinabove and adverting to the facts of the

present case it is an admitted position that in the year 2013

petitioners fled Suit No. 570 of 2013 in the Bombay High

Court against respondent No. 6, inter alia. seeking various

reliefs with respect to infringement of the petitioners' right to

use the trademark "TR". Thereafter petitioners subsequently

applied for the trademark "TR" and sought withdrawal of the

suit and by order dated 6 September, 2013 the suit was

allowed to be withdrawn. Petitioners thereafter fled a fresh

suit bearing No. 674 of 2014, against Respondent No. 6, for

trademark infringement and passing of, inter alia, in respect

of its registered 'TR' trademark and their common law "TR"

mark. At the same time, respondent No.6 in November,

2013, fled Commercial Suit (OS) No. 2431 of 2013 in the

Delhi High Court against petitioners for copyright

infringement of its "TR" artwork and trademark infringement

of wrongly obtained "TR" registration and applied for interim

reliefs in respect of both causes of action by Interim

Application No. 19725 of 2013. In this suit, no copyright

registration was asserted; in fact none was then granted at

that point of time; ad-interim relief was not granted to

Respondent No.6 for seven years until the trial commenced

38 of 48 wp(L)3371 of 2021.doc

with framing of issues on 9th January 2017 in the Delhi High

Court and the following issues came to be framed :-

"i. Whether this Court has no territorial jurisdiction to entertain and try the present suit? OPD

ii. Whether the plaint has been signed and verified by an authorized person? OPP

iii. Whether the plaintiffs are owner and proprietor of the trademark/label TR ? OPP

IV. Whether the defendants are passing off their goods as those of the plaintiff? OPP

V. Whether the defendants are infringing the copyright in the artwork of trademark/label of the plaintiff? OPP

Vi. Whether the present suit is not maintainable in view of the Section 10 of CPC? OPD

VII. Whether the plaintiffs are entitled to the damages claimed?

OPP

VIII. Whether the plaintiffs are entitled to the relief claimed?OPP

IX. Relief."

11.1. On 14th March 2018, Delhi High Court disposed of

the Interim Application after recording that Respondent No.6

did not wish to press the same for interim relief since the trial

had commenced. The burden of proof for proving issue Nos.

(iii), (iv) and (v) as can be seen above is on respondent No.6

in the suit pending in the Delhi High Court. 3 issues as framed

go to the root of the matter i.e. asserting ownership rights in

respect of "TR" trademark, infringement of copyright of "TR"

trademark and passing of action.

39 of 48 wp(L)3371 of 2021.doc

12. By notifcation bearing Notifcation No. 56/2018-

Customs dated 22.06.2018, Government of India in exercise

of its powers conferred by sub-section (1) of section 156 of

the Customs Act, 1962 read with clauses (n) and (u) of sub-

section (2) of section 11 of the said Act efected an

amendment to the Intellectual Property Rights (Imported

Goods) Enforcement Rules, 2007 dated 08.05.2007 (IPR

Rules) as under :-

"1(i) These rules may be called the Intellectual Property Rights (Imported Goods) Enforcement Amendment Rules, 2018.

(ii) They shall come into force on the date of their publication in the Official Gazette.

2. In the said rules, -

(A) in rule 2. -

(i) in clause (b), the words and figures "patent as defined in the Patents Act, 1970," shall be omitted;

(ii) in clause (c), the words and figures "the Patents Act, 1970,"

be omitted;

(B) in rule 5, after condition (b), the following conditions shall be inserted, namely:-

"(c) the right holder or his authorised representative shall inform the Commissioner of Customs at the time of giving notice about any amendment, cancellation, suspension, or revocation of the Intellectual Property Right by the authorities under the Intellectual Property Laws or any Court of Law or Appellate Board, subsequent to its registration with the authorities under the Intellectual Property Law and in case of any such amendment, cancellation, suspension or revocation of the Intellectual Property Right during the validity of the notice registered under rule 4, the same shall be brought to the notice of the Commissioner of Customs by the right holder within a period of one month of the date of communication of any such amendment, cancellation, suspension or revocation of the Intellectual Property Right to the right holder or any person authorised by him in this regard;

(d) in the event of any amendment, cancellation, suspension or

40 of 48 wp(L)3371 of 2021.doc

revocation of the Intellectual Property Right by the authorities under the intellectual Property Law or by any Court of Law or Appellate Board, the Commissioner of Customs may accordingly amend, suspend or cancel the notice and the corresponding protection.".

12.1. It is seen that condition(d) has been inserted which

states that in the event of any amendment, cancellation,

suspension or revocation of the Intellectual Property Right by

the authorities under the Intellectual Property Law or by any

Court of law or Appellate Board, Commissioner of Customs

may accordingly amend, suspend or cancel the notice and

the corresponding protection.

13. In the present case it is an admitted position that

petitioners and respondent No.6 are litigating against each

other to establish their respective right, title and entitlement

to the ownership of "TR" brand. Both counsels have fairly

argued and submitted across the bar that both parties have

been unsuccessful in obtaining any interim order of injunction

/ restraint against the other party from using the "TR"

trademark. As alluded to hereinabove though various

proceedings are pending in courts, neither the petitioners nor

respondent No.6 have been in a position to obtain any order

from the civil court and produce the same before the customs

authorities to take beneft of the statutory provisions.

41 of 48 wp(L)3371 of 2021.doc

14. That apart if respondent No.6 succeeds in the suit

proceedings fled in the Delhi High Court in proving that

respondent No.6 is the owner and proprietor of the trademark

"TR" and that the petitioners are infringing copyright in the

artwork of trademark / label "TR", it is only then that

respondent No. 2 to 5 can confscate / dispose of the goods in

accordance with the statutory provisions and/or continue

suspension of clearance of goods imported by the petitioners.

In the absence of any interim order / order from the civil court

from being placed on record by respondent No.6 it will

therefore not be appropriate for respondent Nos. 2 to 5 to

withhold / detain the consignments imported by the

petitioners beyond the prescribed period of 14 days. Sub-

section (4) of section 53 of the Copyright Act, 1957

substituted w.e.f. 21.06.2012 calls upon the customs ofcer to

release the goods and to no longer treat the goods as

prohibited goods if the person giving notice of 'system alert'

under sub-section (1) of section 53 (i.e. the owner of any right

conferred by the Copyright Act, 1957) does not provide any

order from a court having jurisdiction as to the temporary or

permanent disposal of such goods within 14 days from the

date of detention. Provisions of sub-section (2) and sub-

section (3) of section 53 of the Copyright Act also play an

42 of 48 wp(L)3371 of 2021.doc

important role in guiding the customs ofcer in such an

eventuality. Merely because the owner of the work / mark

deposits the requisite amount of security with the customs

department, the customs ofcer cannot treat the imported

goods as prohibited especially when as in the present case

the importer of the goods i.e. the petitioners have also placed

on record the requisite authorisation. Sub-section (2) of

section 53 calls upon the Commissioner of Customs to

undertake a signifcant exercise for treating infringing copies

of the work / mark as prohibited goods that have been

imported into India. This exercise involves scrutiny of the

evidence furnished by the owner of the right and to arrive at

a satisfaction thereafter that there has been an infringement.

However, correspondingly sub-section (3) calls upon the

customs ofcer to inform the importer of the goods as well as

the owner / person who has given the 'system alert' by way of

notice within 48 hours of the detention of goods.

15. In the present case, it has been clarifed and is an

admitted position that both parties i.e. petitioners and

respondent No.6 have appeared before the customs ofcers /

authorities i.e. respondent Nos. 2 to 5 and have presented

documentary evidence, interalia, pertaining to their

respective entitlement to the "TR" mark; the lis in respect of

43 of 48 wp(L)3371 of 2021.doc

establishing ownership to the "TR" is admittedly pending

before the Delhi High Court and the Bombay High Court;

there has been no fnality of ownership of "TR" brand in the

pending lis instituted by either party; section 11 of the

Customs Act relates to prohibition, importation or exportation

of goods; it states that appropriate conditions may be

notifed by the Central Government pertaining to import or

export of goods of any specifed description with respect to

the purposes referred to in sub-section (2); in the present

case, we are concerned with the provisions of sub-section (2)

(n), sub-section (2)(o), sub-section 2(r) and sub-section 2(u)

as pleaded by the parties before the Court; the Intellectual

Property Rights (Imported Goods) Enforcement Rules, 2007 as

amended on 22.06.2018 have been enacted under the

provisions of sub-section (2)(n) and (u) of sub-section (2) of

section 11 of the Customs Act by the Central Government.

16. Thus on a thorough consideration and a conjoint

reading of the aforesaid provisions it is clear that unless there

is fnality to the suit proceedings between the petitioners and

respondent No.6 pending in the civil courts i.e. Delhi High

Court and Bombay High Court or any interim order is passed

by the said courts, both the parties having referred to and

relied upon several documents which cannot be adjudicated

44 of 48 wp(L)3371 of 2021.doc

or veracity of which cannot be gone into in the present writ

proceeding, such documents produced by both the parties

will have to be accepted as prima-facie evidence supporting

the case of each party by this Court. Further in the absence

of a court order as contemplated under sub-section (4) of

section 53 of the Customs Act, 1962 would not be justifed

for respondent Nos. 2 to 5 to withhold the consignment

imported by the petitioners until respondent No.6 i.e. owner

of the copyright obtains an order / interim order from the civil

court declaring respondent No.6 as the owner of the mark

"TR" brand and places the same before the customs

authorities.

17. The assertion of respondent No.6 that two

independent remedies under diferent statutes namely

section 53 of the Copyright Act, 1957 and IPR Rules framed

under the Customs Act, 1962 being independent of each

other cannot be construed harmoniously is a fallible

submission. The IPR Rules are framed under the provisions of

clauses (n) and (u) of sub-section (2) of section 11 of the

Customs Act, 1962. These rules were introduced by an

amendment in the said section w.e.f. 08.05.2007. Clause (c)

of Rule 2 of the IPR Rules defnes 'intellectual property law'

which means Copyright Act, 1957, Trademark Act, 1999,

45 of 48 wp(L)3371 of 2021.doc

Patent Act, 1970, Designs Act, 2000 or Geographical

Indications of Goods (Registration and Protection) Act, 1999.

Rules (2) begins by defning goods infringing 'intellectual

property rights' to mean any goods which are made,

reproduced, put into circulation or otherwise used in breach

of the intellectual property laws in India or outside and

without the consent of the right holder.

18. In view of the meanings prescribed in the IPR

Rules, contention of respondent No.6 that the provisions of

the Copyright Act will have to be read dehors the IPR Rules

cannot be accepted and will have to be rejected. Respondent

No.6 has fled its complaint under the provisions of section 53

on the basis of his Copyright registration No.A-11621 of 2017

dated 23.02.2017, notwithstanding the fact that the issue of

ownership and entitlement to the "TR" brand being expressly

framed as an issue in the suit proceedings pending trial in the

Delhi High Court. If that be the case, assertion of respondent

No.6 to independently maintain its complaint with the

customs authorities on the basis of sub-section (1) of section

53 of the Copyright Act, 1957 as the owner of "TR" mark /

brand and prohibit importation of goods of the same brand by

petitioners cannot be countenanced. The express provisions

of sub-sections (2), (3) and (4) of section 53 clearly defne the

46 of 48 wp(L)3371 of 2021.doc

ambit of the power of confscation / seizure of goods in

respect of which there is a dispute of ownership of the

copyright and/or the trademark concerned between the right

holder and the importer. Another aspect which goes against

respondent No.6 is regarding claiming ownership of copyright

merely on the basis of registration of copyright on

23.02.2017. This is against the tenet of sub-section (3) of

section 28 of the Trademark Act, 1999 which deals with rights

conferred by registration. The defnition of 'intellectual

property law' also includes the Copyright Act, 1957, the

Patent Act, 1970, the Designs Act, 2000 and the Geographical

Indications of Goods (Registration and Protection) Act, 1999

and therefore to state that the IPR Rules notifed under the

Customs Act, 1962 will have to be read independent of the

provisions of section 53 of the Copyright Act, 1957 would not

be the correct proposition.

19. In view of the above discussions and fndings, we

fnd merit in the submissions made on behalf of the

petitioners. Since there has been no fnality to the

proceedings which are pending between the petitioners and

respondent No.6 in the Delhi High Court and Bombay High

Court in respect of ownership of "TR" brand, the imported

goods vide Bills of Entry Nos. 2220018, 2221281, 2224083,

47 of 48 wp(L)3371 of 2021.doc

2224577, 2224920, 2225033 all dated 04.01.2021 suspended

from clearance will have to be released to the petitioners

subject to the petitioners executing such bond with such

surety or security and such conditions as may be specifed in

the bond in accordance with law. For this purpose,

petitioners shall be given a hearing by the Commissioner of

Customs and / or by the duly authorised ofcer within a

period of one week from the date of receipt of a copy of this

order and pass appropriate order within a period of one week

thereafter.

20. Writ petition accordingly stands disposed of in the

above terms. However, there shall be no order as to costs.

[ MILIND N. JADHAV, J. ] [ UJJAL BHUYAN, J. ]

Digitally signed Ravindra by Ravindra M. M. Amberkar Date: 2021.03.12 Amberkar 14:59:05 +0530

48 of 48