Directors Were Put Behind Bars for Making False Statements
In a recent case titled as Bridgestone Corporation Vs. Tolin Tyres Pvt. Ltd., CS (COMM) No. 375/2016, the Defendant, Tolin Tyres, faced the ire of the Delhi High Court for taking a “blatantly false stand” by denying manufacturing and exporting of tyres under the impugned mark
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Brief Background and Plaintiff’s Contentions:
- Bridgestone Corporation (hereinafter referred to as the
“Plaintiff”) is a transnational company selling tyres for approximately 85 years under the trade mark BRIDGESTONE.
- The Plaintiff not only sells tyres but also sells various rubber products related to the tyre industry or the automobile industry.
- In or around April 2016, the Plaintiff filed a suit for trade mark infringement titled against Tolin Tyres (hereinafter referred to as “Defendant”) in the Delhi High Court.
- The Plaintiff claimed that the Defendant was exporting tyres under the name “BRIDESTONE”, which is almost completely identical to the Plaintiff’s registered trade mark “BRIDGESTONE” which is being used by them since 1931.
- The Plaintiff argued that its adoption of the trade mark “BRIDGESTONE” is arbitrary and derived from the Japanese surname “Ishibashi”, founder of the Plaintiff Company, which when translated to English means “Stone Bridge”.
- The Plaintiff argued that they have been able to ascertain the Defendant’s illegal activities with great difficulty, and made an oral prayer before the Hon’ble Court to appoint a Local Commissioner to make a complete inventory of the tyres sold by the Defendant under the impugned trade mark “BRIDESTONE”.
- The Plaintiff further argued that visual depiction of the trademarks of the two tyres of the Plaintiff and the Defendant would result in more or less an identical position causing visual deceptive similarity between the two trademarks.
- Hon’ble Mr. Justice Valmiki J. Mehta of the Delhi High Court, agreeing with the Plaintiff, passed an ex-parte order dated April 21, 2016 restraining the Defendant from selling tyres or any other products related to the automobile industry in any manner under the trade mark “BRIDESTONE” or any other trade mark which is identical or deceptively similar to the trademark “BRIDGESTONE” of the Plaintiff.
- The Court also appointed a Local Commissioner to make a complete inventory of the tyres manufactured and sold under the mark “BRIDESTONE” at the Defendant’s premises at M.C. Road, Mattoor, Kalady Ernakulam, Kerala-683574.
Attempts at Mediation:
Thereafter, on July 20, 2016, at the joint request of both parties the Hon’ble Court directed them to appear before the High Court Mediation & Conciliation Centre on July 29, 2016. However, it appears that the parties were not able to reach a mutually acceptable settlement.
- The Defendant argued that it is not manufacturing or exporting tyres under the trade mark “BRIDESTONE”.
- That “TOLINS” is the registered trade mark of the Defendant and it manufactures and exports tyres under the said trade name only and no other trade name.
- Therefore, the Defendant has no objection to suffer from a decree for permanent injunction as claimed in prayer paragraph 32(a) and 32(b) of the Plaint.
- The Plaintiff drew attention of the Hon’ble Court to the download from the website www.zauba.com to contend that the particulars on the said website of export of “BRIDESTONE” brand tyres, match the particulars of the exports effected by the Defendant as reported by the Court/Local Commissioner appointed in the suit.
- As per information gathered by the Plaintiff, no export document is required to specify the brand of the goods exported unless the importer insists upon it.
- A notice should be issued to www.zauba.com to disclose the source of the information on the basis which they have on their website, attributed export of tyres under the name “BRIDESTONE” to the Defendants.
- On being enquired by the Hon’ble Court on whether www.zauba.com was itself acquiring information from major ports in India, the Plaintiff stated that the lawyer who visited the Land Customs Port, Raxaul, Bihar-845305 has reported that the Defendant exported tyres to Nepal under the mark ‘BRIDESTONE/BRIDGESTONE’ vide certain bills of discharge, whose details were provided to the Court.
In view of the above, the Hon’ble Court issued notice to the Office of the Public Information Officer, Land Customs Port, Raxaul, Bihar-845305 to produce before the Court on March 16, 2017 the records of exports of tyres by the Defendant vide the above discharge bills to Nepal. The Hon’ble Court further directed the Director of the Defendant to make a statement before the Court and also personally remain present in the Court for the next date of hearing.
DDelhi High Court’s Findings/ Decision
- The Office of the Public Information Officer, Land Customs Port, Raxaul, Bihar – 845305 issued its report which showed that the tyres exported by the Defendant are described as ‘BRIDESTONE’.
- On being enquired by the Hon’ble Court whether the records of the Customs Department are correct or not, the Director and the Managing Director of the Defendant admitted that the records were correct and further admitted that they had been exporting tyres in the name of “BRIDESTONE” and apologized for stating the contrary till now, although they blamed another Director of the Defendant for such export.
- The Hon’ble Court held that it was obvious that the Defendant had been taking a blatantly false stand before the Court, and therefore, the apology tendered by the Directors of the Defendant when forced to admit the falsehood, is meaningless.
- The Hon’ble Court observed that in spite of repeatedly asking the Defendant whether it had been manufacturing and exporting tyres under the trade mark “BRIDESTONE”, the Defendant kept on denying the same. The Hon’ble Court further astutely observed that the Defendant and its directors appear to be under the impression that the Orders of the Court and consequences thereof can be warded off by taking a false stand and the Court will blindly accept what they say and being overburdened and pressed for time, the Court shall not conduct any enquiry.
- The Hon’ble Court ordered that Mr. Joy Konukkudy Thomas, Director and Mr. K.V. Tolin, Managing Director of the Defendant be taken into police custody, and be produced again on the morning of March 17, 2017 to show why they should not be proceeded against for perjury and for criminal contempt of the Court.
Defendant’s attempt to mitigate damage
On March 17, 2017, when produced before the Court, in an attempt to be absolved from their offences and criminal contempt of the Court, the Directors of the Defendant Company stated that in addition to be bound by the permanent injunction restraining them from selling tyres under the name “BRIDESTONE”, they offered an unconditional apology and were willing to pay INR 30,00,000 (approx. USD 46,500)* to the Plaintiff to compensate towards the damages faced by them due to export of tyres under the mark “BRIDESTONE” as well as deposit INR 500,000 (approx. USD 7,750)* with the Delhi Legal Services Authority (DLSA).
Hon’ble Mr. Justice Rajiv Sahai Endlaw of the Delhi High Court stated that though he is of the opinion that INR 500,000 (approx. USD 7,750)* deposited with the DLSA cannot be enough to purge the Directors of their folly, keeping in view that they have given an undertaking to pay INR 3,000,000 (approx. USD 46,500)* to the Plaintiff and deposit INR 500,000 (approx. USD 7,750)* with the DLSA, they shall be let off with a warning.
Hon’ble Mr. Justice Endlaw stated that if the Directors of the Defendant Company do not comply with their undertaking, the Plaintiff shall be at liberty to apply for revival of the suit for a decree for the amount as claimed and also for costs of the suit. Further, Hon’ble Mr. Justice Endlaw also stated that if the receipt of deposit of INR 500,000 (approx. USD 7,750)* with DLSA is not filed on or before May 07, 2017, the Registry should list the suit for further proceedings.
**(@1 USD = approximately INR 64.5, as on April 10, 2017)