Ajanta LLP vs Casio Keisanki Kabushiki Kaisha d/b/a Casio Computer Co. Ltd.

Ajanta LLP  vs Casio Keisanki Kabushiki Kaisha d/b/a Casio Computer Co. Ltd. - Supreme Court Case 2022

Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

Civil Appeal No. 1052 of 2022

(Arising out of SLP (Civil) No.9496 of 2020)

Ajanta LLP .... Appellant (s)

Versus

Casio Keisanki Kabushiki

Kaisha d/b/a Casio Computer Co. Ltd.

& Another …. Respondent (s)

J U D G M E N T

L. NAGESWARA RAO, J.

Leave granted.

1. Aggrieved by the judgment dated 22.11.2019 of the High

Court of Delhi, dismissing the application filed by the

Appellant under Sections 152 and 153 read with Section 151

of the Code of Civil Procedure, 1908 (for short “the CPC”)

seeking modification of the judgment dated 03.07.2019, the

Appellant is before this Court.

P a g e 1 | 25

2. The Respondent filed a suit against the Appellant for

the following reliefs:

“A. The Defendants, their directors, agents,

sellers, retailers, distributors, suppliers,

franchisees, representatives, employees, affiliates

and assigns be restrained by a permanent

injunction from manufacturing, importing,

marketing, advertising, promoting, offering for

sale, selling, exporting and/ or using the

impugned product ORPAT FX-991ES PLUS bearing

the Plaintiff’s Registered Design bearing Nos.

214283 and 214282 dated 16/01/2008 in Class

18-01 for its scientific calculator CASIO FX-991ES

PLUS by itself or in combination with any other

design(s); and/ or other articles/ goods/ products

bearing the impugned design or any other design

which is identical to or is a fraudulent imitation of

Plaintiff’s Registered Designs, so as to commit

piracy of the Plaintiff’s Registered Design Nos.

21483 and 214282.

P a g e 2 | 25

B. The Defendants, their directors, agents, sellers,

retailers, distributors, suppliers, franchisees,

representatives, employees, affiliates and assigns

be directed by a decree of mandatory injunction

directing that they at their own expense:

i. Recall all the impugned products and/

or any marketing, promotional and

advertising materials that bear or

incorporate the impugned design or

any other articles/ goods/ products

which bears a design which is a

fraudulent or an imitation of the

Plaintiff’s Registered Designs, which

has been manufactured and/ or sold,

distributed, displayed or advertised or

promoted in the market, including on

online retail/ e-commerce websites.

ii. Deliver to the Plaintiff for destruction all

the materials including impugned

products and/ or any marketing,

promotional and advertising materials

P a g e 3 | 25

that bear or incorporate the impugned

design or any other articles/ goods/

products which bears a design which is

a fraudulent or an imitation of the

Plaintiff’s Registered Designs.

iii. Make full and fair disclosure to the

Plaintiff any design application or

registration for the impugned design

and/ or any other design which is a

fraudulent or an imitation of the

Plaintiff’s Registered Designs, and

withdraw such applications and/ or

surrender such registrations under

intimation to the Plaintiff.

iv. Make a full and fair disclosure to the

Plaintiff of the full details such as

names and addresses of the party(s)

involved in the manufacturing,

marketing, distributing and selling the

impugned products.

P a g e 4 | 25

C. The Defendant be called upon to allow

inspection of their accounts to assist in

ascertaining the amount of profits made by them

and/ or damages including exemplary and penal

damages suffered by the Plaintiff on account of

the Defendants’ offending activities and a decree

is passed in favour of the Plaintiff and against the

Defendant for the amount found due.

D. Cost of the suit be awarded to the Plaintiff;

and

E. Any other relief which this Hon’ble Court thinks

fit and proper in the circumstances of the case is

allowed in favor of the Plaintiff and against the

Defendant.”

3. According to the Plaintiff, the Defendant lifted each

and every novel element of the original design, shape and

configuration for its scientific/ electronic calculator ‘ORPAT

FX-991ES PLUS’. The Respondent applied for a design

registration for its electronic calculator namely ‘CASIO FX991ES PLUS’ and it was introduced in India in October,

2011. Having knowledge about the sale of the scientific

calculator by the Appellant under the name ‘ORPAT FXP a g e 5 | 25

991ES PLUS’, the Respondent filed a civil suit for the

reliefs referred to above. The High 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 of Delhi on 18.12.2018. After a detailed

correspondence and exchange of e-mails between the

counsel appearing for the parties, a settlement was

arrived at vide a Settlement Agreement dated

16.05.2019. The High Court decreed the suit on

03.07.2019 in terms of the Settlement Agreement.

Subsequently, an Application was filed by the Appellant

under Sections 152 and 153 read with Section 151 of the

CPC for correction/ rectification/ amendment of the

judgment dated 03.07.2019. The Appellant stated in the

said Application that the Settlement Agreement pertains

only to trademark “FX-991ES PLUS’/ ‘FX-991”. However,

there was an inadvertent typographical error of the

trademark in the Settlement Agreement as “FX-991ES

PLUS/ FX/ 991”. As stated above, the High Court

dismissed the Application. Hence, this Appeal.

P a g e 6 | 25

4. We have heard Mr. K.V. Viswanathan, learned Senior

Counsel appearing 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 Court

committed an error in dismissing the Application by

considering the same to have been filed only under

Section 152 of the CPC. It was submitted that the High

Court ought to have considered the Application by

referring to Order 23 Rule 3 read with Section 151 of the

CPC. The learned Senior Counsel argued that

misunderstanding between the parties is a valid ground

to interfere with a consent decree by relying upon the

judgment of this Court in Shankar Sitaram Sontakke &

Anr. v. Balkrishna Sitaram Sontakke & Ors.

1 and

Byram Pestonji Gariwala v. Union Bank of India &

Ors.

2

. The learned Senior Counsel further argued that

the High Court has inherent jurisdiction to correct the

terms of a consent award to bring it in conformity with the

intended compromise by placing reliance on a judgment

1 AIR 1954 SC 352

2 (1992) 1 SCC 31

P a g e 7 | 25

of this Court in Compack Enterprises India Pvt. Ltd. v.

Beant Singh

3

. He also relied upon the judgment of the

Privy Council in Sourendra Nath Mitra & Ors. v. Srimati

Tarubala Dasi

4

 to contend that the inherent power of a

Court should be exercised not to allow its proceedings to

give rise to substantial injustice. Mr. Viswanathan

referred to the e-mails exchanged between the advocates

of the parties and submitted that the intention of the

parties throughout related to the use of scientific

calculator ‘FX-991ES PLUS’ only. He submitted 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 used to

denote “function of” and it is not capable of being

independently trademarked. The Appellant realized the

mistake only after a legal notice was issued by the

Respondent on 26.07.2019 in which it was mentioned that

the Appellant had agreed not to use “FX” or “991” as per

3 (2021) 3 SCC 702

4 AIR 1930 PC 158

P a g e 8 | 25

the Settlement Agreement in spite of which the Appellant

was using “FX” in violation of the Settlement Agreement.

5. The Respondents submitted that there is no

allegation of fraud or misrepresentation in arriving at the

Settlement Agreement and the High Court was right in

dismissing the Application seeking modification of the

decree. It was submitted on behalf of the Respondents

that the parties agreed that the advocates would act as

mediators. Several mediation sessions were held, and emails were exchange between the advocates appearing

for the parties whereafter a Settlement Agreement was

entered into between the parties. The Final agreement

was checked and signed by the mediator and finally, the

Court examined the terms of the Agreement in terms of

which a decree was passed. After applying its mind to the

Settlement Agreement, the High Court passed a decree in

terms of the Agreement. A perusal of the

correspondence between the advocates for the parties

would clearly demonstrate that the Respondent made it

clear that the Appellant should not use “FX-991ES PLUS”/

“FX-991ES” or any deceptively or confusingly similar

P a g e 9 | 25

mark. Referring to the judgments relied upon by the

learned Senior Counsel for the Appellant, Dr. Singhvi

argued that consent decrees create estoppel by judgment

against the parties and cannot be interfered with unless

the decree is vitiated by fraud, misrepresentation or a

patent or obvious mistake. He submitted that

Respondent No. 1 has adopted trademark ‘FX’ for

scientific and electronic calculators since the year 1985.

Respondent 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 Counsel that “FX” is used by

other manufacturers, Dr. Singhvi, learned Senior Counsel

relied upon a list of 3rd party manufacturers of scientific

calculators who have adopted their respective marks for

their scientific calculators without using their trade mark

“FX”.

6. It is necessary to refer to the correspondence

between the advocates of the parties for better

appreciation of the contention that there was a

misunderstanding between the parties while entering into

P a g e 10 | 25

the Settlement Agreement which needs to be corrected.

On 07.02.2019, the advocate for the Respondent

communicated the proposed terms to the advocate for

the Appellant. It was stated in the said e-mail that the

Appellant will cease and desist using the mark “FX-991ES

PLUS” / “FX-991ES” or any other similar mark as well as

the impugned design or any other similar design. In

response, an e-mail was sent by the Appellant on the

same day that the Appellant will cease and desist using

the mark “FX-991ES PLUS”/ “991ES” or any other similar

mark as well as the impugned design or any other similar

design. In addition, it was stated as follows: “Approved

and already detailed in the affidavit (w.e.f. 30.11.2018)

filed before the High Court.” The draft terms for

mediation were prepared by the advocate for the

Respondent and communicated to the advocate for the

Appellant on 04.03.2019. It was mentioned therein as

follows:

“a. The Third Party acknowledges that the First

Party has the exclusive rights over the design of

its scientific calculator CASIO FX-991ES PLUS and

P a g e 11 | 25

the trademarks FX-991ES PLUS/ FX-991ES. The

third party further undertakes never to adopt

and/ or manufacture and/ or sell and/or offer of

sale and/ or advertise/ promote or use in any

manner the impugned design or any other design

similar to that of the First party’s registered

designs bearing nos. 214283 and 214282, dated

16/01/2008 in Class 18-01. The Third Party

further undertakes never to adopt and/ or

advertise/ promote or use in any manner, any

goods or services which incorporate the First

Party’s FX-991ES PLUS/ FX-991ES or any

deceptively or confusing similar mark.;

b. xx xx xx

c. The Third Party undertakes that it has already

ceased use of the impugned design and the

marks FX-991ES PLUS/ FX-991ES and refrains

from any use in the future as well;

d. The Third Party undertakes to never use the

packaging/ trade dress of the First Party’s

scientific calculator FX-991ES PLUS, annexed

P a g e 12 | 25

herewith as Annexure A or any other

deceptively and confusing similar packaging,

which is identical and/ or deceptively and

confusingly similar to the First Party’s packaging/

trade dress for its scientific calculators FX-991ES

PLUS;”

7. A modified Settlement Agreement was

communicated by the advocate for the Appellant to the

advocate for the Respondent on 07.03.2019 in which it

was mentioned as follows:

“a. The third party undertakes never to adopt

and/ or manufacture and/ or sell and/ or offer of

sale and/ or advertise/ promote or use in any

manner the impugned design, which shall mean

and include the subject matter of the challenge in

Suit being C.S.(COMM.) No. 1254 of 2018 before

the High Court of Delhi or any other design similar

to that of the First party’s registered designs

bearing nos. 214283 and 214282 dated

16/01/2008 in Class 18-01. The Third Party further

undertakes never to adopt and/ or advertise/

P a g e 13 | 25

promote or use in any manner, any goods or

services which incorporate the First Party’s FX991ES PLUS/ FX-991ES marks, in their entirely or

the numeral 991.;

b. xx xx xx

c. The Third Party reiterates that since and from

30.11.2018 it has neither manufactured nor

marketed nor dispatched any calculator bearing

the impugned Design and that it has already

ceased use of the Impugned Design and the marks

FX-991ES PLUS/ FX-991ES and would refrain from

any use in the future as well.;

d. The Third Party undertakes to never use the

packaging/ trade dress of the First Party’s scientific

calculator FX-991ES PLUS, annexed herewith as

Annexure A or any other packaging, which is

identical and/ or deceptively and confusingly

similar to the First Party’s packaging/ trade dress

as described in aforementioned Annexure A.;”

8. As response to mediation terms sent by the

advocate for the Respondent on 27.03.2019, the advocate

for the Appellant suggested some alterations in the

P a g e 14 | 25

mediation terms in his e-mail dated 10.04.2019. The

relevant changes that were suggested were made in track

mode and are as follows:

“a. The third party undertakes never to adopt

and/ or manufacture and/ or sell and/ or offer of

sale and/ or advertise/ promote or use in any

manner the impugned design, or any other

design similar to that of the First party’s Design

registration No.’s/trade dress of FX-991ES PLUS

bearing nos. 214283 and 214282 dated

16/01/2008 in Class 18-01. The Third Party

further undertakes never to adopt and/ or

manufacture and/ or sell and/ or offer of sale and/

or advertise/ promote or use in any manner, any

goods or services which incorporate the First

Party’s designs of FX-991ES PLUS bearing nos.

214283 and 214282 dated 16/01/2008 in Class

18-01 trade mark FX-991ES PLUS/ FX-991ES in

their entirety and/ or the term FX and/ or numeral

991.;

P a g e 15 | 25

b. The Third Party agrees to never challenges in

any way, or create any hindrance to, either by

themselves or with any other party or supporting

any party in any such action, the rights of First

Party in the Design registration No’s. 214283 and

214282 dated 16/01/2008 in Class 18-01 for its

scientific calculator 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 of Mr. Nevil P. Patel, it has

neither manufactured nor marked nor dispatched

any calculator bearing the Impugned Design and

the marks FX-991ES PLUS/ FX-991ES that it has

already ceased use of the First Party’s registered

designs of FX-991ES PLUS bearing nos. 214283

and 214282 dated 16/01/2008 in Class 18-01 and

would refrain from any use in the future as well.;

d. The Third Party undertakes to never use the

packaging/ trade dress of the First Party’s

scientific calculator FX-991ES PLUS First Party’s

P a g e 16 | 25

registered designs of FX-991ES PLUS bearing nos.

214283 and 214282 dated 16/01/2008 in Class

18-01, annexed herewith as Annexure A or any

other packaging, which is identical and/ or

deceptively and confusingly similar to the First

Party’s packaging/ trade dress above as

described in aforementioned Annexure A.’

e. The Third Party has already recalled all the

products bearing the impugned design and/ or

any marketing, promotional and advertising

materials that bear or incorporate the impugned

design or any other articles/ goods/ products

which bears the impugned design, which have

been manufactured or promoted in the market,

including but not limited on online retail/ ecommerce websites.;

f. In view of the aforesaid recall, the Third Party

undertakes that it has already sent e-mails/

notice to all its distributors and retailers who

have having direct business relation with the

Third party to recall the impugned products from

P a g e 17 | 25

the market. Copy ies of one such e-mails/ notices

dated sent by the Third Party are collectively

annexed herewith as Annexure B[Colly].

However, the Third Party is not in a position to

recall unsold products bearing the impugned

design in the open market and therefore would

not be held responsible for such products bearing

the impugned design.

g. The Third Party undertakes that the quantum

of stocks mentioned in their affidavit dated

December 07, 2018 are true and correct and the

Third Party has not manufactured and/or

distributed the impugned products since

November 30, 2018. The Third Party further

undertakes that as mentioned in the affidavit

dated December 7, 2018, the Defendants has

removed the external body of the remaining 2560

products bearing the impugned design and

destroyed the said pieces, which were lying in its

factory.

P a g e 18 | 25

h. The Third Party undertakes that there is no

pending design application or registration for the

impugned design and/ or any other design which

is identical to or an obvious imitation of the First

Party’s registered Design No.’s 214283 and

214282.;

i. The Third Party undertakes that there is no

pending trade mark application or

registration for the marks FX-991ES Plus/ FX99ES and/ or any other mark comprising of

the term FX and/ or numeral 991.;”

9. Thereafter, on 14.05.2019 a final draft of the

Settlement Agreement from the Respondents’ side was

communicated to the advocate for the Appellant in which

it was categorically stated that the Appellant undertakes

not to adopt/ manufacture/ sell/ offer/ advertise/ promote/

use in any manner, any goods incorporating the Design of

the Respondent of ‘FX-991ES PLUS’ bearing Nos. 214283

and 214282 dated 16.01.2008 in Class 18-01 and/ or the

trade mark ‘FX-991ES PLUS’/ ‘FX’/ ‘991’ and/ or its

packaging or any other identically, deceptively and/ or

confusingly similar packaging to that of the Respondents’

P a g e 19 | 25

packaging. In response, an e-mail was sent by the

advocate of the Appellant enclosing the mediations terms

in the same terms as proposed by the advocate for the

Respondents in his e-mail dated 14.05.2019. Finally, the

Settlement Agreement was executed between the parties

on 16.05.2019.

10. Though, there were alterations that were proposed

by the advocate for the Appellant during the course of

correspondence, no objection was raised to the proposed

terms of the Settlement Agreement communicated by the

Advocate for the Respondent on 14.05.2019 which

ultimately 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 which the Appellant delivered

possession of the disputed land to the Respondent. Later,

on verification and inspection of the records, the

Appellant realized that his advocate colluded with the

defendants in the suit and had played fraud on him by

filing a fabricated petition of compromise. The Trial Court

5 (1993) 1 SCC 581

P a g e 20 | 25

recalled the order on the ground that the compromise

petition was not signed by the parties as required by

proviso to Rule 3 of Order 23 of the CPC. The Revision

Petition filed by the Respondent was allowed by the High

Court against which the Appellant filed an Appeal before

this Court. It was held in the said case that an Application

to exercise the power under proviso to Rule 3 of Order 23

can be labelled under Section 151 of the CPC. It was

observed in the judgment that the illegality and validity of

a compromise can be examined under Section 151 of the

CPC. Mr. Viswanathan, learned Senior Counsel relied

upon a judgment of the Privy Council in Sourendra Nath

Mitra & Ors. (supra) in support of his submission that

the Courts retain an inherent power not to allow their

proceedings to be used to further substantial injustice. In

view of the law laid down by this Court in Banwari Lal

(supra), the question that arises for consideration is

whether the Appellant has made out a case for

modification/ alteration of the decree by his application

being treated to be one under Rule 3 of Order 23 of the

CPC. Resolving a dispute pertaining to a compromise

P a g e 21 | 25

arrived at between the parties, this Court in Shankar

Sitaram Sontakke & Anr. (supra) held as under:

“If the compromise was arrived at after due

consideration by the parties and was not vitiated

by fraud, misrepresentation, mistake 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 the parties who were dealing

with each other at arm’s length cannot now be

reopened.”

12. A judgment by consent is intended to stop litigation

between the parties just as much as a judgment resulting

from a decision of the Court at the end of a long drawnout fight. A compromise decree creates an estoppel by

judgment6

. It is relevant to note that in Byram Peston

Gariwala (supra), this Court held that the Appellanttherein did not raise any doubt as to the validity or

genuineness of the compromise nor a case was made out

by him to show that the decree was vitiated by fraud or

misrepresentation. While stating so, this Court dismissed

the Appeal.

13. A consent decree would not serve as an estoppel,

where the compromise was vitiated by fraud,

6 (1992) 1 SCC 31 – Byram Peston Gariwala v. Union of India

P a g e 22 | 25

misrepresentation, or mistake. The Court in exercise of

its inherent power may rectify the consent decree to

ensure that it is free from clerical or arithmetical errors so

as to bring it in conformity with the terms of the

compromise. Undoubtedly, the Court can entertain an

Application under Section 151 of the CPC for alterations/

modification of the consent decree if the same is vitiated

by fraud, misrepresentation, or misunderstanding. The

misunderstanding as projected by the learned Senior

Counsel for the Appellant between parties relates to use

of “FX” or “991” as separate marks in the Settlement

Agreement. 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 the Settlement

Agreement was arrived at after detailed consultation and

deliberations. Thereafter, the parties were

communicating with each other and they took six months

to arrive at a settlement. The final Settlement Agreement

was approved by the mediator. The High Court applied its

mind and passed a decree in terms of the Settlement

P a g e 23 | 25

Agreement dated 16.05.2019. Though, the High Court

dismissed the Application by refusing to entertain the

Application on the ground that it was filed under Section

152 of the CPC, we have considered the submissions of

the parties to examine whether the Appellant has made

out a case for modification of the decree by treating the

Application as one under the proviso to Order 23 Rule 3

read with Section 151 of the CPC. There is no allegation

either of fraud or misrepresentation on the part of the

Respondent. We are unable to agree with the Appellant

that there was a mistake committed while entering into a

settlement agreement due to misunderstanding.

Correspondence between the advocates for the parties

who are experts in law would show that there is no

ambiguity or lack of clarity giving rise to any

misunderstanding. Even assuming there is a mistake, a

consent decree cannot be modified/ altered unless the

mistake is a patent or obvious mistake. Or else, there is a

danger of every consent decree being sought to be

altered on the ground of mistake/ misunderstanding by a

party to the consent decree.

P a g e 24 | 25

14. For the foregoing reasons, we uphold the judgment

of the High Court and dismiss the Appeal.

.....................................J.

 [ L. NAGESWARA RAO ]

 .....................................J.

 [ B.R. GAVAI ]

New Delhi,

February 04, 2022.

P a g e 25 | 25

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले