AJANTA LLP versus CASIO KEISANKI KABUSHIKI KAISHA D/B/A CASIO COMPUTER CO. LTD. on 4 February 2022

Conclusion

1. Aggrieved by the judgment dated 22.11.2019 of the High Courtof Delhi, dismissing the application filed by the Appellant under Sections152 and 153 read with Section 151 of the Code of Civil Procedure, 1908(for short “the CPC”) seeking modification of the judgment dated03.07.2019, the Appellant is before this Court.

2. The Respondent filed a suit against the Appellant for thefollowing reliefs:

“A. The Defendants, their directors, agents, sellers, retailers,distributors, suppliers, franchisees, representatives,employees, affiliates and assigns be restrained by a permanentinjunction from manufacturing, importing, marketing,advertising, promoting, offering for sale, selling, exportingand/ or using the impugned product ORPAT FX-991ES PLUSbearing the Plaintiff’s Registered Design bearing Nos. 214283and 214282 dated 16/01/2008 in Class 18-01 for its scientificcalculator CASIO FX-991ES PLUS by itself or in combinationwith any other design(s); and/ or other articles/ goods/products bearing the impugned design or any other designwhich is identical to or is a fraudulent imitation of Plaintiff’sRegistered Designs, so as to commit piracy of the Plaintiff’sRegistered Design Nos. 21483 and 214282.

B. The Defendants, their directors, agents, sellers, retailers,distributors, suppliers, franchisees, representatives,employees, affiliates and assigns be directed by a decree ofmandatory injunction directing that they at their own expense:

i.Recall all the impugned products and/ or any marketing,promotional and advertising materials that bear orincorporate the impugned design or any other articles/goods/ products which bears a design which is afraudulent or an imitation of the Plaintiff’s RegisteredDesigns, which has been manufactured and/ or sold,distributed, displayed or advertised or promoted in themarket, including on online retail/ e-commerce websites.

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312SUPREME COURT REPORTS

Aii.Deliver to the Plaintiff for destruction all the materialsincluding impugned products and/ or any marketing,promotional and advertising materials that bear orincorporate the impugned design or any other articles/goods/ products which bears a design which is afraudulent or an imitation of the Plaintiff’s RegisteredBDesigns.

iii.Make full and fair disclosure to the Plaintiff any designapplication or registration for the impugned design and/or any other design which is a fraudulent or an imitationof the Plaintiff’s Registered Designs, and withdraw suchCapplications and/ or surrender such registrations underintimation to the Plaintiff.

iv.Make a full and fair disclosure to the Plaintiff of thefull details such as names and addresses of the party(s)involved in the manufacturing, marketing, distributingDand selling the impugned products.

C. The Defendant be called upon to allow inspection of theiraccounts to assist in ascertaining the amount of profits madeby them and/ or damages including exemplary and penaldamages suffered by the Plaintiff on account of theEDefendants’ offending activities and a decree is passed infavour of the Plaintiff and against the Defendant for theamount found due.

D. Cost of the suit be awarded to the Plaintiff; and FE. Any other relief which this Hon’ble Court thinks fit andproper in the circumstances of the case is allowed in favor ofthe Plaintiff and against the Defendant.”

3. According to the Plaintiff, the Defendant lifted each and everynovel element of the original design, shape and configuration for itsscientific/ electronic calculator ‘ORPAT FX-991ES PLUS’. TheGRespondent applied for a design registration for its electronic calculatornamely ‘CASIO FX-991ES PLUS’ and it was introduced in India inOctober, 2011. Having knowledge about the sale of the scientific calculatorby the Appellant under the name ‘ORPAT FX-991ES PLUS’, theRespondent filed a civil suit for the reliefs referred to above. The High H

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Court of Delhi passed an ex-parte ad-interim order of stay on 28.11.2018.Thereafter, the parties were referred to mediation by the High Court ofDelhi on 18.12.2018. After a detailed correspondence and exchange ofe-mails between the counsel appearing for the parties, a settlement wasarrived at vide a Settlement Agreement dated 16.05.2019. The HighCourt decreed the suit on 03.07.2019 in terms of the SettlementAgreement. Subsequently, an Application was filed by the Appellant underSections 152 and 153 read with Section 151 of the CPC for correction/rectification/ amendment of the judgment dated 03.07.2019. TheAppellant stated in the said Application that the Settlement Agreementpertains only to trademark “FX-991ES PLUS’/ ‘FX-991". However, therewas an inadvertent typographical error of the trademark in the SettlementAgreement as “FX-991ES PLUS/ FX/ 991”. As stated above, the HighCourt dismissed the Application. Hence, this Appeal.

4. We have heard Mr. K.V. Viswanathan, learned Senior Counselappearing for the Appellant and Dr. Abhishek Manu Singhvi and Mr.Chander Lal, learned Senior Counsel appearing for the Respondents.On behalf of the Appellant, it was contended that the High Courtcommitted an error in dismissing the Application by considering the sameto have been filed only under Section 152 of the CPC. It was submittedthat the High Court ought to have considered the Application by referringto Order 23 Rule 3 read with Section 151 of the CPC. The learnedSenior Counsel argued that misunderstanding between the parties is avalid ground to interfere with a consent decree by relying upon thejudgment of this Court in Shankar Sitaram Sontakke & Anr. v.Balkrishna Sitaram Sontakke & Ors.[1]and Byram Pestonji Gariwalav. Union Bank of India & Ors.[2]. The learned Senior Counsel furtherargued that the High Court has inherent jurisdiction to correct the termsof a consent award to bring it in conformity with the intended compromiseby placing reliance on a judgment of this Court in Compack EnterprisesIndia Pvt. Ltd. v. Beant Singh[3]. He also relied upon the judgment ofthe Privy Council in Sourendra Nath Mitra & Ors. v. Srimati Tarubala Dasi[4] to contend that the inherent power of a Court should be exercisednot to allow its proceedings to give rise to substantial injustice. Mr.Viswanathan referred to the e-mails exchanged between the advocates 1 AIR 1954 SC 352

2 (1992) 1 SCC 31

3 (2021) 3 SCC 702

4 AIR 1930 PC 158

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Aof the parties and submitted that the intention of the parties throughoutrelated to the use of scientific calculator ‘FX-991ES PLUS’ only. Hesubmitted that it would be clear from the correspondence that all along‘FX’ and ‘991’ were separated by a ‘-’ (hyphen) and for the first time a‘/’ (slash) was introduced in the final version of the Settlement Agreement.According to the Appellant ‘FX’ is a common generic name that is usedBto denote “function of” and it is not capable of being independentlytrademarked. The Appellant realized the mistake only after a legal noticewas issued by the Respondent on 26.07.2019 in which it was mentionedthat the Appellant had agreed not to use “FX” or “991” as per theSettlement Agreement in spite of which the Appellant was using “FX” inCviolation of the Settlement Agreement.

5. The Respondents submitted that there is no allegation of fraudor misrepresentation in arriving at the Settlement Agreement and theHigh Court was right in dismissing the Application seeking modificationof the decree. It was submitted on behalf of the Respondents that theDparties agreed that the advocates would act as mediators. Severalmediation sessions were held, and e-mails were exchange between theadvocates appearing for the parties whereafter a Settlement Agreementwas entered into between the parties. The Final agreement was checkedand signed by the mediator and finally, the Court examined the terms ofthe Agreement in terms of which a decree was passed. After applyingEits mind to the Settlement Agreement, the High Court passed a decree interms of the Agreement. A perusal of the correspondence between theadvocates for the parties would clearly demonstrate that the Respondentmade it clear that the Appellant should not use “FX-991ES PLUS”/“FX-991ES” or any deceptively or confusingly similar mark. ReferringFto the judgments relied upon by the learned Senior Counsel for theAppellant, Dr. Singhvi argued that consent decrees create estoppel byjudgment against the parties and cannot be interfered with unless thedecree is vitiated by fraud, misrepresentation or a patent or obviousmistake. He submitted that Respondent No. 1 has adopted trademark ‘FX’ for scientific and electronic calculators since the year 1985.GRespondent No. 1 obtained a Design registration for the mark “FX”bearing No.5010491 in Class-9 and claiming use since 29.01.1999.Countering the submissions of Mr. Viswanathan, learned Senior Counselthat “FX” is used by other manufacturers, Dr. Singhvi, learned SeniorCounsel relied upon a list of 3[rd] party manufacturers of scientificH

calculators who have adopted their respective marks for their scientificcalculators without using their trade mark “FX”.

6. It is necessary to refer to the correspondence between theadvocates of the parties for better appreciation of the contention thatthere was a misunderstanding between the parties while entering intothe Settlement Agreement which needs to be corrected. On 07.02.2019,the advocate for the Respondent communicated the proposed terms tothe advocate for the Appellant. It was stated in the said e-mail that theAppellant will cease and desist using the mark “FX-991ES PLUS” /“FX-991ES” or any other similar mark as well as the impugned designor any other similar design. In response, an e-mail was sent by theAppellant on the same day that the Appellant will cease and desist usingthe mark “FX-991ES PLUS”/ “991ES” or any other similar mark aswell as the impugned design or any other similar design. In addition, itwas stated as follows: “Approved and already detailed in the affidavit(w.e.f. 30.11.2018) filed before the High Court.” The draft terms formediation were prepared by the advocate for the Respondent andcommunicated to the advocate for the Appellant on 04.03.2019. It wasmentioned therein as follows:

“a. The Third Party acknowledges that the First Party hasthe exclusive rights over the design of its scientific calculatorCASIO FX-991ES PLUS and the trademarks FX-991ES PLUS/FX-991ES. The third party further undertakes never to adoptand/ or manufacture and/ or sell and/or offer of sale and/ oradvertise/ promote or use in any manner the impugned designor any other design similar to that of the First party’sregistered designs bearing nos. 214283 and 214282, dated16/01/2008 in Class 18-01. The Third Party furtherundertakes never to adopt and/ or advertise/ promote or usein any manner, any goods or services which incorporate theFirst Party’s FX-991ES PLUS/ FX-991ES or any deceptivelyor confusing similar mark.;

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c. The Third Party undertakes that it has already ceased useof the impugned design and the marks FX-991ES PLUS/ FX-991ES and refrains from any use in the future as well; AB

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d. The Third Party undertakes to never use the packaging/trade dress of the First Party’s scientific calculator FX-991ESPLUS, annexed herewith as Annexure A or any otherdeceptively and confusing similar packaging, which isidentical and/ or deceptively and confusingly similar to theFirst Party’s packaging/ trade dress for its scientificcalculators FX-991ES PLUS;”

7. A modified Settlement Agreement was communicated by theadvocate for the Appellant to the advocate for the Respondent on07.03.2019 in which it was mentioned as follows:

“a. The third party undertakes never to adopt and/ ormanufacture and/ or sell and/ or offer of sale and/ oradvertise/ promote or use in any manner the impugned design,which shall mean and include the subject matter of thechallenge in Suit being C.S.(COMM.) No. 1254 of 2018before the High Court of Delhi or any other design similar tothat of the First party’s registered designs bearing nos.214283 and 214282 dated 16/01/2008 in Class 18-01. TheThird Party further undertakes never to adopt and/ oradvertise/ promote or use in any manner, any goods or serviceswhich incorporate the First Party’s FX-991ES PLUS/ FX-991ES marks, in their entirely or the numeral 991.;

b. xx xx xx c. The Third Party reiterates that since and from 30.11.2018it has neither manufactured nor marketed nor dispatched anycalculator bearing the impugned Design and that it hasalready ceased use of the Impugned Design and the marksFX-991ES PLUS/ FX-991ES and would refrain from any usein the future as well.;

d. The Third Party undertakes to never use the packaging/trade dress of the First Party’s scientific calculator FX-991ESPLUS, annexed herewith as Annexure Aor any otherpackaging, which is identical and/ or deceptively andconfusingly similar to the First Party’s packaging/ trade dressas described in aforementioned Annexure A.;”

8. As response to mediation terms sent by the advocate for theRespondent on 27.03.2019, the advocate for the Appellant suggestedsome alterations in the mediation terms in his e-mail dated 10.04.2019.The relevant changes that were suggested were made in track modeand are as follows:

“a. The third party undertakes never to adopt and/ ormanufacture and/ or sell and/ or offer of sale and/ oradvertise/ promote or use in any manner the impugned design,or any other design similar to that of the First party’s Designregistration No.’s/trade dress of FX-991ES PLUS bearing nos.214283 and 214282 dated 16/01/2008 in Class 18-01. TheThird Party further undertakes never to adopt and/ ormanufacture and/ or sell and/ or offer of sale and/ oradvertise/ promote or use in any manner, any goods or serviceswhich incorporate the First Party’s designs of FX-991ESPLUS bearing nos. 214283 and 214282 dated 16/01/2008 inClass 18-01 trade mark FX-991ES PLUS/ FX-991ES in their entirety and/ or the term FX and/ or numeral 991.;

b. The Third Party agrees to never challenges in any way, orcreate any hindrance to, either by themselves or with any otherparty or supporting any party in any such action, the rightsof First Party in the Design registration No’s. 214283 and214282 dated 16/01/2008 in Class 18-01 for its scientificcalculator during the term of their registration.

c. The Third Party reiterates that since and from 30.11.2018,as undertaken in the Affidavit dated December 7, 2018 ofMr. Nevil P. Patel, it has neither manufactured nor markednor dispatched any calculator bearing the Impugned Designand the marks FX-991ES PLUS/ FX-991ES that it has alreadyceased use of the First Party’s registered designs of FX-991ESPLUS bearing nos. 214283 and 214282 dated 16/01/2008 inClass 18-01 and would refrain from any use in the future aswell.;

d. The Third Party undertakes to never use the packaging/trade dress of the First Party’s scientific calculator FX-991ESPLUSFirst Party’s registered designs of FX-991ES PLUSbearing nos. 214283 and 214282 dated 16/01/2008 in Class A

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18-01, annexed herewith as Annexure A or any otherpackaging, which is identical and/ or deceptively andconfusingly similar to the First Party’s packaging/ trade dressabove as described in aforementioned Annexure A.’

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e. The Third Party has already recalled all the productsbearing the impugned design and/ or any marketing,promotional and advertising materials that bear orincorporate the impugned design or any other articles/ goods/products which bears the impugned design, which have beenmanufactured or promoted in the market, including but notlimited on online retail/ e-commerce websites.; B

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f. In view of the aforesaid recall, the Third Party undertakesthat it has already sent e-mails/ notice to all its distributorsand retailers who have having direct business relation withthe Third party to recall the impugned products from themarket. Copy ies of one such e-mails/ notices dated sent bythe Third Party are collectively annexed herewith as AnnexureB[Colly]. However, the Third Party is not in a position to recallunsold products bearing the impugned design in the openmarket and therefore would not be held responsible for suchproducts bearing the impugned design.

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g. The Third Party undertakes that the quantum of stocksmentioned in their affidavit dated December 07, 2018 aretrue and correct and the Third Party has not manufacturedand/or distributed the impugned products since November 30,2018. The Third Party further undertakes that as mentionedFin the affidavit dated December 7, 2018, the Defendants hasremoved the external body of the remaining 2560 productsbearing the impugned design and destroyed the said pieces,which were lying in its factory.

h. The Third Party undertakes that there is no pending designapplication or registration for the impugned design and/ orany other design which is identical to or an obvious imitationof the First Party’s registered Design No.’s 214283 and214282.; G

i. The Third Party undertakes that there is no pending trademark application or registration for the marks FX-991ES Plus/

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FX-99ES and/ or any other mark comprising of the term FXand/ or numeral 991.;”

9. Thereafter, on 14.05.2019 a final draft of the SettlementAgreement from the Respondents’ side was communicated to theadvocate for the Appellant in which it was categorically stated that theAppellant undertakes not to adopt/ manufacture/ sell/ offer/ advertise/promote/ use in any manner, any goods incorporating the Design of theRespondent of ‘FX-991ES PLUS’ bearing Nos. 214283 and 214282 dated16.01.2008 in Class 18-01 and/ or the trade mark ‘FX-991ES PLUS’/‘FX’/ ‘991’ and/ or its packaging or any other identically, deceptivelyand/ or confusingly similar packaging to that of the Respondents’packaging. In response, an e-mail was sent by the advocate of theAppellant enclosing the mediations terms in the same terms as proposedby the advocate for the Respondents in his e-mail dated 14.05.2019.Finally, the Settlement Agreement was executed between the parties on16.05.2019.

10. Though, there were alterations that were proposed by theadvocate for the Appellant during the course of correspondence, noobjection was raised to the proposed terms of the Settlement Agreementcommunicated by the Advocate for the Respondent on 14.05.2019 whichultimately was the final Settlement Agreement signed by the parties.

11. In Banwari Lal v. Chando Devi (Smt.) (through LRs.) &Anr.[5] this Court was concerned with a compromise on the basis of whichthe Appellant delivered possession of the disputed land to the Respondent.Later, on verification and inspection of the records, the Appellant realizedthat his advocate colluded with the defendants in the suit and had playedfraud on him by filing a fabricated petition of compromise. The TrialCourt recalled the order on the ground that the compromise petition wasnot signed by the parties as required by proviso to Rule 3 of Order 23 ofthe CPC. The Revision Petition filed by the Respondent was allowed bythe High Court against which the Appellant filed an Appeal before thisCourt. It was held in the said case that an Application to exercise thepower under proviso to Rule 3 of Order 23 can be labelled under Section151 of the CPC. It was observed in the judgment that the illegality andvalidity of a compromise can be examined under Section 151 of theCPC. Mr. Viswanathan, learned Senior Counsel relied upon a judgment AB

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Aof the Privy Council in Sourendra Nath Mitra & Ors. (supra) in supportof his submission that the Courts retain an inherent power not to allowtheir proceedings to be used to further substantial injustice. In view ofthe law laid down by this Court in Banwari Lal (supra), the questionthat arises for consideration is whether the Appellant has made out acase for modification/ alteration of the decree by his application beingBtreated to be one under Rule 3 of Order 23 of the CPC. Resolving adispute pertaining to a compromise arrived at between the parties, thisCourt in Shankar Sitaram Sontakke & Anr. (supra) held as under:

“If the compromise was arrived at after due consideration bythe parties and was not vitiated by fraud, misrepresentation,Cmistake or misunderstanding committed by the High Court –the finding which was not interfered with by the High Court –it follows that the matter which once concluded between theparties who were dealing with each other at arm’s lengthcannot now be reopened.”D12. A judgment by consent is intended to stop litigation betweenthe parties just as much as a judgment resulting from a decision of theCourt at the end of a long drawn-out fight. A compromise decree createsan estoppel by judgment[6]. It is relevant to note that in Byram PestonGariwala (supra), this Court held that the Appellant-therein did not raiseEany doubt as to the validity or genuineness of the compromise nor a casewas made out by him to show that the decree was vitiated by fraud ormisrepresentation. While stating so, this Court dismissed the Appeal.

13. A consent decree would not serve as an estoppel, where thecompromise was vitiated by fraud, misrepresentation, or mistake. TheFCourt in exercise of its inherent power may rectify the consent decreeto ensure that it is free from clerical or arithmetical errors so as to bringit in conformity with the terms of the compromise. Undoubtedly, theCourt can entertain an Application under Section 151 of the CPC foralterations/ modification of the consent decree if the same is vitiated byfraud, misrepresentation, or misunderstanding. The misunderstanding asGprojected by the learned Senior Counsel for the Appellant between partiesrelates to use of “FX” or “991” as separate marks in the SettlementAgreement. The understanding between the parties was with respect to“FX-991ES PLUS” as a whole and not with reference to “FX”. A close

scrutiny of the correspondence between the parties would show that theSettlement Agreement was arrived at after detailed consultation anddeliberations. Thereafter, the parties were communicating with each otherand they took six months to arrive at a settlement. The final SettlementAgreement was approved by the mediator. The High Court applied itsmind and passed a decree in terms of the Settlement Agreement dated16.05.2019. Though, the High Court dismissed the Application by refusingto entertain the Application on the ground that it was filed under Section152 of the CPC, we have considered the submissions of the parties toexamine whether the Appellant has made out a case for modification ofthe decree by treating the Application as one under the proviso to Order23 Rule 3 read with Section 151 of the CPC. There is no allegationeither of fraud or misrepresentation on the part of the Respondent. Weare unable to agree with the Appellant that there was a mistake committedwhile entering into a settlement agreement due to misunderstanding.Correspondence between the advocates for the parties who are expertsin law would show that there is no ambiguity or lack of clarity giving riseto any misunderstanding. Even assuming there is a mistake, a consentdecree cannot be modified/ altered unless the mistake is a patent orobvious mistake. Or else, there is a danger of every consent decreebeing sought to be altered on the ground of mistake/ misunderstandingby a party to the consent decree.

14. For the foregoing reasons, we uphold the judgment of theHigh Court and dismiss the Appeal.

Ankit Gyan and Amarendra Kumar(Assisted by : Pragya Samal, LCRA)

Appeal dismissed.

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