2004 (2) TMI 358 - HC - Companies Law

Summary

Issues Involved:
1. Alleged breach of injunction order by the defendant.
2. Validity of changes made by the defendant to its product.
3. Applicability of Order 39, Rule 2A of the Code of Civil Procedure by the High Court.
4. Nature of the defendant's breach (whether wilful or not).
5. Appropriate actions and remedies for the breach.

Issue-wise Detailed Analysis:

Alleged Breach of Injunction Order by the Defendant:
The plaintiffs sought relief under Order 39 Rule 2A of the Code of Civil Procedure, alleging that the defendant breached the injunction order dated April 30 and May 2, 2003, by making cosmetic alterations to its product that were immaterial in nature, thereby continuing to sell textmarkers deceptively similar to the plaintiffs' products.

Validity of Changes Made by the Defendant to Its Product:
The defendant argued that the changes made to its textmarkers were substantial and not deceptively similar to the plaintiffs' products. The court compared the plaintiffs' product, the defendant's original product, and the altered product. It was noted that the changes were primarily cosmetic, such as changing the body color from green to black and altering the layout of the text on the barrel. However, the court found that these changes were not sufficient to remove the deceptive similarity, as the overall get-up remained confusingly similar to the plaintiffs' product.

Applicability of Order 39, Rule 2A of the Code of Civil Procedure by the High Court:
The defendant contended that Order 39, Rule 2A is not applicable to the High Court exercising its original jurisdiction and that contempt proceedings under Article 215 of the Constitution of India should be invoked instead. The court, however, held that the High Court could take action under Order 39, Rule 2A for breaches of its injunction orders. The court emphasized that while contempt proceedings require proof of wilful disobedience, Order 39, Rule 2A does not necessitate such proof, thereby allowing the High Court to take action even if the breach was not wilful.

Nature of the Defendant's Breach (Whether Wilful or Not):
The court examined whether the breach by the defendant was wilful. The defendant argued that the changes were made in good faith to comply with the injunction order. The court acknowledged the defendant's willingness to make further changes and noted that the initial changes were made bona fide. The court refrained from detaining the director in civil prison, considering the defendant's intention to comply with the order.

Appropriate Actions and Remedies for the Breach:
The court decided on the appropriate actions under Order 39, Rule 2A. It ordered the attachment of the dyes used by the defendant to manufacture the offending textmarkers, conditional upon any further breach of the undertaking given by the defendant to make additional changes to its product. The court noted that the attachment order was curative in nature, providing the defendant an opportunity to rectify the breach without immediate punitive action.

Conclusion:
The motion was allowed with the court ordering the conditional attachment of the dyes used by the defendant to manufacture the textmarkers, contingent on further compliance with the undertaking to make additional changes to the product. The court emphasized the curative nature of the attachment order, giving the defendant an opportunity to comply with the injunction order and avoid punitive measures.