Bench of Justices Surya Kant and Ujjal Bhuyan
Introduction:
In a positive development for out-of-court settlements, the Supreme Court recently lauded the amicable resolution of a trademark dispute between Murlidhar Gyanchandani and the State of Jharkhand, highlighting the benefits of resolving disputes without prolonged litigation.
Facts:
The dispute between the appellants (Murlidhar Gyanchandani and others) and the respondent centered on the infringement of the trademark “Ghadi.” They filed a civil suit alleging trademark infringement by the respondent.
In response to the suit, the Court appointed a Local Commissioner to search the respondent’s premises, resulting in a seizure, which was conducted in accordance with prescribed procedures and video-recorded. The respondent, however, filed a case alleging wrongful restraint and other offences under the Indian Penal Code (IPC) due to the search and seizure.
FIR was registered against the appellants, prompting them to approach the High Court to quash the proceedings. The High Court declined to interfere, which brought the matter before the Supreme Court.
Issues:
- Whether the trademark dispute between the parties should be resolved through litigation or an amicable out-of-court settlement?
- Whether the seizure conducted by the Local Commissioner was in compliance with the Court’s order, and whether it resulted in any wrongful acts?
- Whether the criminal proceedings initiated against the appellants be quashed based on the settlement agreement?
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Contentions of the Petitioner:
The appellants argued that their trademark “Ghadi” had been in use for several decades, and that they held exclusive rights over it. They sought relief against the infringement of their trademark by the respondent. They contended that the seizure of goods in the respondent's premises was lawfully conducted under the Court’s direction, and they filed a contempt case to uphold the integrity of the Court’s order. The appellants further contended that the criminal proceedings initiated against them, due to the seizure, were unjustified and should be quashed.
Contentions of the Respondent:
The respondent argued that the seizure carried out by the appellants was unlawful and amounted to wrongful restraint and other offences under the IPC. They filed a case against the appellants, challenging the search and seizure, and maintained that their actions were protected under the law.
Court’s Analysis:
The Supreme Court expressed its approval of the parties’ decision to settle the dispute amicably, encouraging this method of dispute resolution over prolonged litigation.
The Court observed that the appellants had exclusive rights over the trademark “Ghadi,” as agreed by both parties in the Memorandum of Settlement (MoU). The Court invoked its powers under Article 142 of the Constitution (Empowers the Supreme Court to pass any decree or order necessary for doing complete justice in any matter before it) to quash the criminal proceedings initiated by both parties, as the dispute had been resolved through the settlement.
“We hope that this serves as a positive example of an out-of-court settlement, demonstrating how disputes can often be constructively negotiated without the need for sparring litigation before a court of law.,” Justices Surya Kant and Ujjal Bhuyan said.
Conclusion:
The Supreme Court, based on the Memorandum of Settlement, quashed all criminal proceedings and decreed the civil suit in favor of the appellants. The Court also praised the parties for resolving the dispute amicably and encouraged other parties facing similar issues to consider out-of-court settlements. The Court’s intervention through Article 142 helped in ensuring complete justice between the parties.
