Supreme Court overturns contempt order in trademark case: U.C. Surendranath vs. Mambally’s Bakery (22 July 2019)

Date of the Judgment: 22 July 2019

Citation: (2019) INSC 726

Judges: R. Banumathi, J., A.S. Bopanna, J.

Can a person be imprisoned for violating a court order if the violation is not intentional? The Supreme Court of India recently addressed this question in a case involving a trademark dispute. The core issue was whether the appellant had willfully disobeyed an interim injunction order, thereby warranting punishment under Order XXXIX Rule 2A of the Code of Civil Procedure, 1908. The bench consisted of Justice R. Banumathi and Justice A.S. Bopanna, with Justice Banumathi authoring the judgment.

Case Background

Mambally’s Bakery filed a suit seeking a permanent injunction against U.C. Surendranath, restraining him from using their trademark “Mambally’s Bakery” or any similar mark. The Trial Court granted an interim injunction on 04 November 2015, which was served on Surendranath on 09 November 2015. An Advocate Commissioner inspected Surendranath’s shop on 07 November 2015 and reported that he was selling tea cakes and masala cakes with the “Mambally’s Bakery” trademark and had a hoarding with the same name displayed. Based on this report, the Trial Court concluded that Surendranath had willfully disobeyed the injunction and sentenced him to one week of imprisonment.

Timeline

Course of Proceedings

The Trial Court, based on the Advocate Commissioner’s report of 26 November 2015, the counter-affidavit, and after hearing the parties, found U.C. Surendranath guilty of willful disobedience of the interim injunction order. The Trial Court sentenced him to one week of imprisonment. Surendranath appealed to the High Court of Kerala at Ernakulam, which dismissed the appeal, affirming the Trial Court’s order.

Legal Framework

The core legal provision in question is Order XXXIX Rule 2A of the Code of Civil Procedure, 1908 (C.P.C.). This provision deals with the consequences of disobedience or breach of an injunction. It states that in case of disobedience of an injunction granted, the court may order the property of the person guilty of disobedience to be attached and may also order such person to be detained in the civil prison for a term not exceeding three months, unless in the meantime, the Court directs his release.

Order XXXIX Rule 2A of the C.P.C. states:

“Consequence of disobedience or breach of injunction.—(1) In the case of disobedience of any injunction granted or other order made under rule 1 or rule 2 or breach of any of the terms on which the injunction was granted or the order made, the Court granting the injunction or making the order, or any Court to which the suit or proceeding is transferred, may order the property of the person guilty of such disobedience or breach to be attached, and may also order such person to be detained in the civil prison for a term not exceeding three months, unless in the meantime the Court directs his release. (2) No attachment under this rule shall remain in force for more than one year, at the end of which time, if the disobedience or breach continues, the property attached may be sold and out of the proceeds, the Court may award such compensation as it thinks fit to the injured party and shall pay the balance, if any, to the party entitled to it. (3) In case of disobedience of any injunction granted or other order made under rule 1 or rule 2 or breach of any of the terms on which the injunction was granted or the order made, the Court granting the injunction or making the order, or any Court to which the suit or proceeding is transferred, may order the property of the person guilty of such disobedience or breach to be attached, and may also order such person to be detained in the civil prison for a term not exceeding three months, unless in the meantime the Court directs his release.”

Arguments

The appellant, U.C. Surendranath, argued that the Trial Court and the High Court erred in holding him guilty of willful disobedience. He contended that the first inspection by the Advocate Commissioner was before the injunction order was served on him, and therefore, the findings of that inspection could not be considered a violation.

Regarding the second inspection, he explained that while the hoarding with the “Mambally’s Bakery” name was still displayed, he had taken steps to remove the wrappers/labels from the products. He further stated that he could not remove the hoarding immediately due to its height (13 feet) and his 40% disability, which prevented him from climbing and removing it himself.

The respondent, Mambally’s Bakery, argued that the appellant was in clear violation of the injunction order by continuing to use their trademark and display the hoarding. They contended that the appellant’s explanation for not removing the hoarding was not satisfactory.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame specific issues in a separate section. However, the core issue addressed was:

• Whether the appellant’s actions constituted “willful disobedience” of the interim injunction order under Order XXXIX Rule 2A of the C.P.C.

Treatment of the Issue by the Court

Authorities

The Supreme Court did not cite any previous cases or books. The judgment primarily focused on the interpretation of Order XXXIX Rule 2A of the C.P.C.

Judgment

The Court held that for a person to be found guilty of willful disobedience under Order XXXIX Rule 2A of the C.P.C., it must be proven that the disobedience was not mere disobedience but a “willful disobedience.” The Court noted that during the second inspection, the appellant was not using the trademark on the products. While the hoarding was still displayed, the appellant provided a reasonable explanation for the delay in its removal.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the principle that contempt of court requires “willful disobedience,” not just mere disobedience. The Court emphasized that the violation must be intentional and deliberate. The Court considered the following points:

• Timing of the First Inspection: The fact that the first inspection occurred before the injunction was served was a significant factor.
• Absence of Trademark on Products during Second Inspection: The Court noted that the appellant had stopped using the trademark on the products by the time of the second inspection.
• Appellant’s Explanation: The Court found the appellant’s explanation for not removing the hoarding to be reasonable, given his disability and the height of the hoarding.

The Court’s reasoning focused on the lack of evidence of intentional disregard for the court’s order, which is a necessary element for a finding of contempt. The Court also took a practical view of the situation, considering the appellant’s physical limitations and the circumstances surrounding the hoarding.

The Supreme Court’s decision was influenced more by the factual aspects of the case rather than the legal aspects.

The Court’s reasoning is further supported by the following quotes from the judgment:

“For finding a person guilty of willful disobedience of the order under XXXIX Rule 2A C.P.C. there has to be not mere “disobedience” but it should be a “willful disobedience”.”

“The allegation of willful disobedience being in the nature of criminal liability, the same has to be proved to the satisfaction of the court that the disobedience was not mere “disobedience” but a “willful disobedience”.”

“In the facts and circumstances of the case, we do not find any “willful disobedience” on the part of the appellant warranting invoking Order XXXIX Rule 2A of the C.P.C. and sentencing the appellant to one week civil imprisonment.”

Key Takeaways

• Willful Disobedience Required: For a person to be held in contempt under Order XXXIX Rule 2A of the C.P.C., the disobedience must be “willful,” not just mere non-compliance.
• Timing Matters: Actions taken before an injunction is served cannot be considered a violation of that injunction.
• Reasonable Explanations: Courts will consider reasonable explanations for non-compliance, especially when physical limitations are involved.
• Burden of Proof: The burden of proving willful disobedience lies with the party alleging the contempt.

Directions

The Supreme Court directed the Trial Court to proceed with the suit (O.S.NO.1 of 2015) and dispose of it as expeditiously as possible. The Court clarified that it had not expressed any opinion on the merits of the case or the contentions raised by the parties.

Development of Law

The ratio decidendi of this case is that for a person to be held in contempt under Order XXXIX Rule 2A of the Code of Civil Procedure, 1908, the disobedience must be “willful” and not mere disobedience. This judgment reinforces the principle that contempt proceedings are quasi-criminal in nature and require a higher standard of proof. There was no change in the previous position of law.

Conclusion

The Supreme Court overturned the High Court’s decision, emphasizing that “willful disobedience” is necessary for contempt under Order XXXIX Rule 2A of the C.P.C. The Court found that the appellant’s actions did not demonstrate an intentional disregard for the court’s order. This case clarifies the importance of proving intent in contempt cases and highlights the need for courts to consider all circumstances, including any reasonable explanations for non-compliance.