Bombay HC Slaps Plaintiff With ₹50 Lakh Cost For ‘Fraud On Court’ In Trademark Case; Judge Terms Suppression Of Facts A 'Deliberate Deception'

Mumbai: In a stern message against litigants who mislead courts, the Bombay High Court has imposed exemplary costs of Rs 50 lakh on a plaintiff who obtained an ex-parte (without other defendant’s presence) injunction in a trademark infringement case by concealing material facts.

Judge Condemns Plaintiff’s Fraudulent Action

Justice Arif Doctor held that the plaintiff, Shoban Salim Thakur, proprietor of M/s Family Footwear, had engaged in “gross suppression of material facts” and “deliberately and systematically played fraud upon the Court” to secure an ex parte ad-interim order.

Court’s Observation on Fraud and Concealment

“The deliberate and selective withholding of such material… is, in my view, clearly a fraud which has been played on this Court by the Plaintiff only to obtain the ex parte ad interim order,” the judge observed. The Court directed Thakur to pay Rs 25 lakh each to two defendants within four weeks.

Background of the Case

Thakur had filed a suit seeking a permanent injunction restraining two Delhi-based traders — Chaitanya Enterprises and Sonu Shah, proprietor of Sonu Enterprises — from using a mark allegedly similar to his registered trademark.

On June 30, the Court granted him an ex parte injunction restraining the defendants from manufacturing or selling footwear under the impugned mark. Acting on the order, the court receiver seized several consignments of the defendants’ goods from the market.

Defendants Challenge the Injunction

The defendants later moved an application to vacate the injunction, alleging suppression of key facts. They pointed out that the plaintiff’s registration was territorially restricted to Maharashtra, that they had been prior users of their own mark since April 2022, and that Thakur had taken contradictory stands before the Trade Marks Registry.

Critical Omissions Identified by Court

Justice Doctor identified these as three critical facts deliberately concealed by the plaintiff. During proceedings, Thakur admitted that his trademark registration in Class 25 was limited to Maharashtra and that he would not have been entitled to an injunction beyond that territory.

Judge’s Remarks on Dishonesty

“To even suggest this would, in my view, be an affront to the Court, and to condone such ‘inadvertence’ would amount to putting a premium on dishonesty,” the judge remarked, rejecting the plaintiff’s claim that the omissions were accidental.

Failure to Rectify Concealment

The Court also noted that even after the defendants exposed the concealment, the plaintiff made no attempt to limit the injunction to Maharashtra. Instead, he filed multiple affidavits alleging contempt to “ensure that the ex parte ad interim order continued.”

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Invoking Commercial Courts Act for Exemplary Costs

Considering that the case was a commercial dispute, the Court invoked Section 35 of the CPC (as amended by the Commercial Courts Act, 2015) to impose exemplary costs, observing that the plaintiff’s conduct had brought the defendants’ business “to a standstill.”

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