w w w . L a w y e r S e r v i c e s . i n



Citigroup Inc & Another v/s Citicorp Business And Finance Pvt Ltd. & Another

    Civil Suit (Comm) No. 416 of 2018

    Decided On, 12 December 2018

    At, High Court of Delhi

    By, THE HONOURABLE MR. JUSTICE MANMOHAN

    For the Appearing Parties: Chander M Lall, Karan Bajaj, Nancy Roy, Dhruv Nayar, Shreya Sethi, Ram Ekbal Roy, Dinesh Patnia, Advocates.



Judgment Text

Present suit has been filed for damages and injunction for infringement of registered trade mark, passing off, unfair competition against the defendants.

2. It is stated that the plaintiffs' registered trade marks/name are CITI, CITICORP and other CITI Formative marks for financial services, mutual fund and insurance, finance consulting etc. It is stated that the defendants are using the marks CitiCorp and Citi as essential and prominent part of their corporate names i.e. Citi Enterprises & Traders (Defendant No. 2) and Citi Corp Business & Finance Pvt. LTD (defendant no. 1). It is further stated that the defendants own and operate a website bearing the plaintiffs' mark i.e. w w w. citicorpbiz.com.

3. Vide order dated 23rd September, 2013, the learned predecessor of this Court granted an ex-parte ad interim injunction in favour of the plaintiff, restraining the defendants from using any domain name and/or trade marks containing CITICORP and/or CITI.4. The said injunction order was confirmed on 24th November, 2014. Additionally, the defendants were directed to change the name of their companies to a name which is not deceptively similar to the plaintiffs' trade mark CITICORP/CITI. The defendants were granted six months to carry out this change. The plaintiffs' application under Order 39 Rule 2A CPC was also disposed of by this Court with the direction that the defendants shall strictly comply with the interim order forthwith, as a last opportunity. It was directed that in case of fresh violation, the plaintiffs shall be at liberty to revive the application and under those circumstances, stern action shall be taken against the defendants.

5. On 01st November, 2017, this Court recorded that the defendants had been repeatedly changing counsels to take adjournments. The contention of the of the plaintiffs was recorded that the injunction orders dated 23rd September, 2013 and 24th November, 2014 had not been complied with till date. Accordingly, the director of the defendant companies Mr. Dinesh Kumar Patnia was directed to be personally present in court on the next date of hearing.

6. On 09th January, 2018, the director of the defendant companies, Mr.Dinesh Kumar Patnia was personally present and stated that he was not aware of the injunction orders dated 23rd September, 2013 and 24th November, 2014. This Court rejected the said explanation on the ground of constant representation of the defendants through counsel and combative nature of the defence. Consequently, this Court invoked provisions under Order 39 Rule 2A CPC and ordered attachment of the bank accounts of the defendant companies as well as Mr. Dinesh Kumar Patnia. At that stage, Mr. Dinesh Kumar Patnia gave an assurance that he would comply with the said injunction orders within a period of one month. This Court recorded that if the said injunction orders were not complied within the stipulated period, it would have no other option but to take Mr. Dinesh Kumar Patnia into custody.

7. However, the said injunction orders were not complied within the stipulated period of time. Vide order dated 20th February, 2018, the counsel for the defendants handed over an affidavit of Mr. Dinesh Kumar Patnia dated 20th February, 2018, undertaking to change the corporate names within one week. In the said affidavit a statement contrary to the statement made and recorded on 09th January, 2018, that the defendants were not aware of the injunction orders were made. In the said affidavit, Mr. Patnia, stated that pursuant to the injunction orders, the impugned website w w w .citicorpbiz.com had been blocked with effect from 05th May, 2014 and the business and trading under the mark/name CITICORP/CITI was not being carried out.

8. On 13th March, 2018, the defendants filed two appeals being FAO(OS) 43/2018 and FAO(OS) 42/2018 challenging the orders dated 24th November, 2014 and 09th January, 2014 respectively. On the same date, in furtherance of order dated 20th February, 2018, Mr.Patnia, filed a supplementary affidavit which stated that the defendant companies had held a board meeting on 09th March, 2018 wherein the board approved that steps be taken before the Registrar of Companies Kolkata to change the name of the defendant companies and remove the words CITI and CITICORP.

9. On 14th March, 2018 the defendants submitted another affidavit dated 14th March, 2018 to this Court. In the said affidavit the defendants disclosed another personal bank account that belonged to Mr.Dinesh Kumar Patnia and stated that there was no other bank account in his name. The defendants also undertook to comply with the injunction orders within a period of fifteen days. Since the said injunction orders had not been complied with for more than four years, this Court directed all the directors of the defendant companies to be present in Court on the next date of hearing.

10. On 03rd April, 2018 the matter was adjourned at the request of the defendants, as they had not prepared a detailed affidavit explaining why the corporate names of the defendant companies had still not been changed.

11. Despite being directed to be personally present, the director of the defendant companies, Ms. Renu Patnia was neither present in Court on 03rd April, 2018 nor on the next date of hearing i.e. 04th April, 2018. On 04th April, 2018, an exemption application was handed over at the Bar on the ground that she was unwell. The said application was taken on record and allowed. Furthermore, the defendants handed over an additional affidavit highlighting the steps taken to change the corporate names of the defendant companies and stating that the defendants' Facebook page had been deleted. Vide the said additional affidavit, the defendants undertook to comply with the said injunction orders within a period of fifteen days. Both the directors of the defendant companies were again directed to be present on the next date of hearing.

12. On 08th May, 2018, none appeared for the defendants. In view of the fact that despite attachment of bank accounts, the injunction orders dated 23rd September, 2013 and 24th November, 2014, had still not been complied with, this Court issued bailable warrants against Mr.Dinesh Kumar Patnia and Ms. Renu Patnia, directors of the defendant companies.

13. Vide judgement and order dated 17th July, 2018, the Division Bench dismissed FAO(OS) Nos.42/2018 and 43/2018. The relevant portion of the judgment in FAO(OS) No. 42/2018 is reproduced hereinbelow:-

"17. Apart from the statutory prohibition, a statement was made on behalf of the appellants before the learned Single Judge on 9th January, 2018 that they would comply with the order of injunction within a period of 30 days. Having given such statement, the present appeal is a completely dishonest attempt by the appellants to avoid compliance with the orders of the court. It also manifests that the statement made before the learned Single Judge on 9th January, 2018 was with the malafide intent of evading the direction by the learned single Judge for the director of the appellant to undergo civil imprisonment.

18. In view of the above, the present appeal is completely misconceived and is not maintainable."

14. On 29th August, 2018, the directors of the defendant companies were personally present in Court. Despite having stated in the affidavit dated 14th March, 2018 that all accounts of the defendant companies as well as Mr.Dinesh Kumar Patnia had been disclosed to this Court, Mr.Patnia, stated that he had another bank account in the name of D.K. Patnia & Co. Vide a detailed judgment dated 29th August, 2018, this Court held Mr. Dinesh Kumar Patnia and Ms. Renu Patnia, guilty of contempt. The relevant portion of the said judgment is reproduced hereinbelow:-

13. Today, Mr. Dinesh Kumar Patnia and Mrs. Renu Patnia are personally present in pursuance to the bailable warrants issued by this Court on 08th May, 2018. However, no affidavit has been placed on record to show that any steps had been taken by the contemnors/directors of the defendant-companies to change their corporate names between 4th April, 2018 and today.

14. Mr. Dinesh Kumar Patnia today states that he operates another bank account in the name of D.K. Patnia & Co. in ICICI Bank, Stephen House Branch, Kolkata, being Current Account No. 331505000333. This is surprising as this Court had been informed vide affidavit dated 14th March, 2018 that all the bank accounts of the defendant-companies as well as of Mr. Dinesh Kumar Patnia had been disclosed.

15. Mr. Dinesh Kumar Patnia also states that Registrar of Companies has refused to change the name of CitiCorp Business & Finance Pvt. Ltd. (Defendant no.1) on the ground that it is a Non-Banking Financial Company (for short "NBFC") and prior permission of Reserve Bank of India is required. He, however, asserts that CitiCorp Business and Finance Pvt. Ltd. is not an NBFC. He states that though the Reserve Bank of India has been approached for clarification, yet till date no response had been received from it.

16. Mr. Dinesh Kumar Patnia further states that the Registrar of Companies has refused to change the corporate name of Citi Enterprises & Traders Pvt. Ltd. on similar grounds.

17. However, documents on record do not show that any steps have been taken by either the defendants or contemnors to challenge the decision of Registrar of Companies not to change the corporate names of the defendants.

18. In fact, a perusal of the affidavit dated 3rd April, 2018 reveals that the Registrar of Companies has not accepted Mr. Dinesh Kumar Patnia's application for change of corporate name of defendant no. 2 i.e. Citi Enterprises & Traders Pvt. Ltd. as the proposed new name resembled the name of another existing company. There is nothing to show that thereafter an alternative name had been suggested by either the contemnors or the defendants.

19. Keeping in view the intransigent attitude of the contemnors and the fact that the injunction orders dated 23rd September, 2013 and 24th November, 2014 have not been complied with till date despite grant of number of opportunities and attachment orders, this Court is left with no other option but to direct compliance of the said orders. Consequently, this Court directs the Registrar of Companies to strike off defendant nos.1 and 2-companies from the Register of Companies. The Current Bank Account No.331505000333 held in the name of D.K. Patnia and Co. with ICICI Bank, Stephen House Branch, Kolkata, is also attached till further orders. The defendants' website w w w . citicorpbiz.com is directed to be closed down with immediate effect, if not already closed, and the Registrant of defendants' aforesaid website is directed to transfer the domain name citicorpbiz.com to the plaintiffs on the payment of usual fees.

20. Let the present order be complied by the Registrar of Companies within a period of two weeks of receipt of this order. The plaintiffs are directed to forward this order to the Registrar of Companies as well as Registrants of defendants' website and to ICICI Bank, Stephen House Branch, Kolkata.

21. At this stage, Mr. Dinesh Kumar Patnia states that two defendants own certain immovable properties and if the defendant-companies are struck off the record, he and other shareholders would suffer a financial loss.

22. This Court is of the opinion that the directors of defendant-companies have left it with no other option, but to pass the aforesaid order. This Court is further of the view that the intent of the contemnors/defendants has been to "mock at the judicial system" as the defendants/contemnors have had sufficient opportunities and more than reasonable time to comply with the binding injunction orders.

23. It is settled law that the High Court has power under the Contempt of Courts Act, 1971 as also under its inherent constitutional power (Article 215) to commit a defendant to jail of its own motion for disobeying injunction issued by it. Consequently, Mr. Dinesh Kumar Patnia and Mrs. Renu Patnia are held guilty of contempt of court.

24. At this stage, learned counsel for the contemnors/defendants prays for some time to argue on sentencing.

25. List on 1st October, 2018. The personal presence of Mrs. Renu Patnia is exempted. However, Mr. Dinesh Kumar Patnia is directed to be personally present in Court on the next date of hearing.

Order dasti under the signature of the Court Master."

15. Upon oral prayer by learned counsel for the defendants, the defendants were directed vide order dated 01st October, 2018 to file an additional affidavit of apology along with details of actions that had been taken by them for getting the defendant companies names struck off from the Register of Companies as well as for transfer of the impugned domain name. The counsel for defendants undertook to pay actual costs incurred by the plaintiffs, post the first injunction order for a charitable cause.

16. On 22nd October, 2018, this Court observed that in the affidavit of Apology dated 12th October, 2018, it was stated that the contemnors had written to the Registrar of Domain Names not to transfer the impugned domain name to the plaintiffs as the contemnors had filed a Special Leave Petition which was pending before the Apex Court. It was also observed that a Special Leave Petition had been filed against order dated 17th July, 2018 in FAO(OS) 43/2018 and not against orders dated 29th August, 2018 and 01st October, 2018 which directed transfer of the impugned domain name. Vide order dated 22nd October, 2018, this Court found that, "Mr. Dinesh Kumar Patnia is not only mis-representing the facts repeatedly but he has also been creating obstacles in implementation of binding injunction orders dated 23rd September, 2013 and 24th November, 2014" and was inclined to take Mr. Dinesh Kumar Patnia into custody. However, on expression of unconditional regret as well as undertaking to transfer the domain name to the plaintiffs and to file the balance sheet of Profit and Loss account of the defendants and to file an application to striking off the names of the defendant companies before the next date of hearing, the matter was deferred.

17. However, before the next date of hearing, Mr.Dinesh Kumar Patnia did not file an application to strike off the names of the defendant companies. He once again undertook to do the same within a period of one week. He was also directed to file an affidavit outlining the steps he had taken in pursuance to the said order.

18. On 22nd November, 2018, this Court recorded that no affidavit had been filed by Mr.Dinesh Kumar Patnia. At that stage, a copy of the affidavit was handed over by the counsel for the defendants. However, this Court directed the defendants to file the same along with an application for condonation of delay. Mr.Dinesh Kumar Patnia was further directed to file another affidavit to place on record bank balances of his accounts as well as his consultancy firm and statement of his accounts for the last two years. It was also recorded that this Court intended to pass a sentencing order and directed Mr. Dinesh Kumar Patnia and his wife Ms. Renu Patnia to be personally present in Court on the next date of hearing.

19. On 05th December, 2018, neither Mr.Dinesh Kumar Patnia nor Ms. Renu Patnia appeared. The counsel for the defendants sought an adjournment on the ground that Ms. Renu Patnia was unwell. Consequently, the matter was adjourned to today and the defendants were directed to comply with the previous orders of this Court.

20. On 07th December, 2018, a petition for special leave challenging the judgment and order dated 17th July, 2018 in FAO(OS) No.43/20

Please Login To View The Full Judgment!

18 was dismissed as withdrawn by the Supreme Court. 21. Till date no fresh affidavit has been placed on record. Admittedly, neither the name of defendant companies has been changed or struck off nor the cost has been deposited. Consequently, this Court is of the view that the directors of the defendant companies need to be sentenced in accordance with the Order 39 Rule 2A CPC and Contempt of Courts Act, 1971 as also under its inherent constitutional power (Article 215). 22. This Court is conscious that the power to punish under Order 39 Rule 2A CPC and Contempt of Courts Act has to be exercised with circumspection. At the same time, the Court has to act with seriousness where the judicial system is exploited by the parties as otherwise the rule of law would disappear. 23. Keeping in view the number of opportunities given to the defendants to comply with the binding injunction orders dated 23rd September, 2013 and 24th November, 2014 as well as the contemptuous conduct of the defendants, in particular, its director Mr.Dinesh Kumar Patnia, this Court directs Mr.Dinesh Kumar Patnia to be detained in civil imprisonment for fifteen days at Tihar Jail, Delhi. 24. The other director of the defendant companies Ms.Renu Patnia is let off with a warning as on the date when she had appeared before this Court, she had stated that she was a mere housewife and was not involved in day-to-day management of the defendant companies. The counsel for plaintiff is directed to deposit necessary expenses qua civil imprisonment, if any, with the concerned Jail Superintendent within three days. 25. List the present suit for further consideration on 25th January, 2019. 26. Order dasti under signature of Court Master.
O R