Case Name: Newgen IT Technologies Limited Vs. Newgen Software Technologies Limited
Case Number: FAO (COMM) 73/2025 & CM APPLs. 15151-52/2025, 15154/2025 FAO(COMM) 75/2025 & CM APPLs. 15161-62/2025, 15164/2025
Date of Judgment: 12th June 2025
Quorum: Hon’ble Mr. Justice Navin Chawla, Hon’ble Mr. Justice Harish Vaidyanathan Shankar.
FACTUAL BACKGROUND
The Instant appeal has been filed under section 13(1A) of the Commercial Courts Act, 2015 read along with Order XLIII Rule (1)(r) of the Civil Procedure Code, 1908, impugning the Orders dated 27.02.2025 and 05.03.2025 passed by the District Court in C.S. (COMM) No. 102/2025.
The respondent had filed the plain FAO(COMM)73/2025, inter alia, seeking a degree of permanent injunction, infringement and related claims, on the grounds that its trademarks were being infringed by the appellant. In the plaint, the respondent contends that the subject marks were registered in the year 1999 with. In the subsequent years, substantial promotion and advertisement has been done for the businesses under the said subject marks.
In June 2023, the respondent was approached by the appellant with a proposal to enter into a partnership agreement. The respondents, relying upon the representation made by the appellant and after several rounds of discussion, entered into the partnership agreement on 12.07.2023. The appellant agreed to this partnership under the corporate name “VCARE InfoTech Solutions and Services Pvt. Ltd.”. The use of this name was acknowledged in the partnership agreement and it was also agreed upon that any use of the subject marks by the appellant shall arise only out of the said agreement.
On 16.07.2024, the respondent received an email from the appellant, formally stating the change in name of the partnership to “NewGen IT Technologies Limited”. A copy of the new certificate of incorporation dated 10.07.2024 and an undated declaration letter titled “Vcare Infotech rebrands as Newgen IT Technologies Limited”, were attached to the mail as well. On subsequent research, the respondent discovered that the appellant had applied for registration of the concerned Marks via application dated 20.09.2021, which remains pending owing to the objection raised by the Trademark registry flagging the Marks as similar to those trademarked by the respondent. Consequently, the respondent issued a cease-and-desist letter dated 15.09.2024 upon the appellant, terminating the Partnership agreement and calling upon the appellant to cease to use the impugned marks for its business and services in any form. Alongside, the appellant filed an application under section 16(1) of the Companies Act, 2013 seeking the rectification of the appellant’s corporate name.
The respondent also came across the DRHP (Draft Red Herring Prospectus) submitted by the appellant to the National Stock Exchange of India, applying for an Initial Public offering under the impugned Mark. The respondent thereafter filed a suit before the District Court, inter alia, seeking a decree of permanent. The Impugned Order dated 27.02.2025 granted an ex-parte ad-interim injunction in favor of the respondent, in relation to the matter under adjudication in FAO(COMM)75/2025. The aggrieved appellant filed an application under Order XXXIX Rule 4 of the CPC seeking modification and vacation of the ex-parte ad-interim injunction Order.
Via the latter Order, this injunction was made absolute, thereby dismissing the Appellant’s application. Thus, the present appeals.
ISSUES FOR DETERMINATION
- Whether the appellant’s use of the mark “Newgen” constitutes trademark infringement under the trade marks Act, 1999?
- Whether the trial court was correct in granting the ex-parte ad-interim injunction without serving advance notice to the appellant?
LEGAL PROVISIONS
Order XXXIX Rule 1, 2, and 4 of the Code of Civil Procedure, 1908 (CPC), Section 13(1A) of the Commercial Courts Act, 2015, Trade Marks Act, 1999, and Companies Act, 2013 (Section 16(1)).
APPELLANT’S CONTENTIONS
The appellant primarily challenges the impugned orders passed by the learned District Judge, contending that the same involves suppression of material facts and misleading statements by the respondent. The concerned has been used by the appellant in India and Internationally since 2017, and the formal partnership with the respondent was instituted in July 2023. Additionally, the respondent had already been involved in related disputes regarding the name change, and was part of the mediation regarding the same in February 2025. In light of these facts and the law laid down in Wander Ltd. &Anr. v Antox India (P) Ltd., (1990), the learned senior counsel for the appellant argues that, allowing exemption from advance service has deprived the appellant of fair hearing and thereby enabled the respondent to secure the impugned injunction without appellant’s knowledge.
The further contention is that, the said ex-parte ad-interim injunction was obtained in violation of natural justice, since not advance notice was issued to the appellant. The same came to the knowledge of the appellant only during the hearing on 28.02.25. Moreover, the injunction was granted despite the respondent’s delay and without properly evaluating the balance of convenience, which was clearly titled in favor of the appellant in the present case. By relying on the judgment of this court in Natco Pharma Ltd. v Bayer Healthcare LLC, the appellant further asserts that the impugned order dated 05.03.2025 contains no discussion or assessment of the balance of convenience or irreparable harm. Another contention raised by the appellant is that, the respondent deliberately suppressed material facts by not disclosing the respondent’s lack of any exclusive statutory rights over the word “Newgen”. The respondent also cannot claim prior use or invention of the mark “Newgen”, as the appellant has placed on record evidence of prior trademark registrations such as “New Generation”, which dates back to 1988. Thus, relying on the judgment of the Supreme Court in Parakh Vanijya (P) Ltd. v Baroma Agro Product & Ors. (2016), and the judgment of this court in Havells India Limited & Anr. v Vivek Kumar & Ors., the counsel for the appellant submits that both parties should be allowed to co-exist under their respective “Newgen” marks, as they have been doing in India since 2017.
The Word “Newgen” is a common abbreviation for “New Generation” which is widely used across industries. Thus, the present case does not concern with any exclusive right to the word “Newgen”. Additionally, there is clear difference between the parties’ logos and services, making the restraint imposed on the appellant, unjust and excessive.
RESPONDENT’S CONTENTIONS
The respondent supports the Impugned Orders and refutes all allegations made by the Appellant on the grounds that, the subject marks was sought as early as 1992 till 2014, which predate the existence of the appellant company. In addition to this, the class under which the appellant seeks registration of its trademark includes the development of new software, which is already being carried out by the respondent.
The application filed by the appellant fails to specify the material facts that are alleged to have been suppressed or concealed while obtaining the ex-parte ad-interim injunction. In light of the judgment of this court in Prakash Road line Ltd. v Prakash Parcel Service (1992), the respondent contends that, the respondent company is not bound to take action against all third-party users of the subject marks, and has the liberty to choose the companies against which it wishes to take action based on its business requirement. In reply to the accusation of concealing the disclaimer imposed on the concerned mark by the trade marks registry, the counsel for the respondent submits that, several subsequent registrations for NEWGEN have been secured by the respondent, none of which carry any disclaimer. It is the settled principle of law that a disclaimer does not go to the market and is irrelevant to a passing off action.
It is further contended that the e-mails relied on by the appellant, are completely misplaced as the very e-mails which have been relied upon states the appellant’s submission that in India it is known by the name “Vcare InfoTech Solutions and Services Pvt. Ltd. and not by the name “Newgen”. Furthermore, the defense of acquiescence cannot be availed by the appellant, as the appellant has acted with Mala fide. The last contention is that, the Trade Mark prosecution history estoppel does not apply where the impugned mark is not cited in the Examination Report, as held by this court in Raman Kwatra &Anr. KEI Industries Ltd. (2023).
ANALYSIS
The court observed that, in appeals challenging the order passed by the learned trial court in exercise of its discretionary jurisdiction, the appellate court will not interfere, except where discretion has been shown to have been exercised arbitrarily or capriciously or perversely or where the court has ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. As recently reiterated by the Supreme Court in Ramakant Ambalal Choksi v Harish Ambalal Choksi & Ors. (2024), the Appellate court cannot interfere with the exercise of discretion by the learned trial judge unless such exercise is found to be palpably incorrect or untenable. The Appellate Court should not substitute its views in matters merely on the ground that in its opinion the facts of the case call for a different conclusion. The court also relies on the interpretation of the term “perverse” in clarifying the jurisdiction of this court in the context of the present case.
The appellant’s claim that it was improper for the respondent to file the suit and obtain the ex-parte ad-interim injunction is unfounded, since Order XXXIX of CPC expressly permits such orders in appropriate cases, and Rule 4 of the said order specifically provides remedy to the defendant seeking the setting aside of such injunctions. The appellant’s failure to make a persuasive case before the learned District Judge does not amount to a denial of natural justice. Thus, the allegation that appellant was denied fair hearing or that principles of natural justice were violated, is legally unfounded. Thus, the appellate is not called upon to re-examine or re-appreciate every aspect or evidence afresh, as long as it is apparent that the lower court has applied its mind and has reached a sound and reasonable conclusion.
At the stage of granting an ad-interim injunction, a party is required to meet the triple test, i.e., (a) whether a prima facie case exists in favour of the applicant, (b) whether the balance of convenience lies in their favour and (c) whether irreparable harm would result if the injunction were denied. While examining these conditions, the court must also satisfy that each element has been properly considered, but this satisfaction need not occur in a rigid or mechanical fashion where each element is separately discussed in isolation. Rather, the court’s application of mind must be assessed holistically, taking into account that in the process of examining one parameter, related aspects may also be inherently addressed.
The court seeks attention to the decision of this court in Natco Pharma case wherein, the court clarified that it is not necessary for the trial court’s order granting or refusing an interim injunction to explicitly record findings on each of the three elements. Rather, what is essential is that a reading of the order as a whole reflects that the court has formed an opinion on these aspects. The court also observes that the appellant cannot be permitted to continue deriving commercial benefits from a mark that is similar to that of the respondent and clearly warrants restraint through injunctive relief. As settled by various decisions of the Supreme court, such as in Corn products refining Co., v Shangrila food products Ltd. (1959), Amritdhara pharmacy v Satya Deo Gupta (1962) etc., the assessment of similarity between trademarks and the likelihood of confusion arising from them is made from the perspective of the average consumer having an imperfect recollection.
The Supreme Court in M/s Power control appliances v Sumeet Machines (1994), has held that acquiescence is sitting by, when another is invading the rights and spending money on it. While judging the plea of acquiescence, this court must also consider whether the adoption of the mark by the appellant was bona fide, which, in the present case, cannot be considered so. Moreover, the steps took by the respondent to protect its rights in the subject marks, immediately after the termination of the partnership agreement, cannot be said to be sitting by. Thus, the plea of acquiescence taken by the appellant is liable to be rejected.
Furthermore, the court observed that the appellant’s selective focus on a single label mark, in an attempt to undermine the respondent’s broader trademark rights, and its accompanying allegation of suppression are legally unfounded and without merit. It is a settled principle of law that, though trademark must ideally be considered as a whole, there can be a predominant mark of the same which would attract the attention of the customer and have a recall value. The said predominant part of the trademark would therefore be entitled to an equivalent protection from misuse and violation. Also, generalized past statements cannot serve to estop a party from asserting its legal rights in a new factual context. For this purpose, the appellant’s reliance on S K Sachdeva is misplaced.
JUDGMENT
The court affirmed that the district has committed no error in rejecting the appellant’s application under Order XXXXIX Rule 4 of CPC, and thereby confirmed the ex-parte ad-interim order. Accordingly, the present appeals were dismissed by the court. However, the court clarified that the findings set out herein are only prima facie observations, which shall not bind or prejudice the court at the final stage when the matter is decided on merits after the parties have led evidence.
CONCLUSION
By delivering this judgment, the Delhi High Court has successfully illustrated how a prima facie case of trademark infringement must be dealt with. It reinforces the principle that prior users and registrant of a trademark have a strong claim to prohibit subsequent use of the trademark item by another party, in a similar manner. The judgment further highlights the need for trial courts to consider the balance of convenience and the potential of irreparable harm to the plaintiff, when granting injunctions.
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WRITTEN BY AYANA THERESA XAVIER
