66.12-appeal.

docx

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

APPEAL NO. 66 OF 2012

Digitally
signed by IN
BASAVRAJ
BASAVRAJ GURAPPA NOTICE OF MOTION NO. 993 OF 2009
GURAPPA PATIL
PATIL Date: WITH
2025.04.28
[Link] CROSS OBJECTION NO. 3 OF 2012
+0530
IN
APPEAL NO. 66 OF 2012
WITH
NOTICE OF MOTION NO. 445 OF 2012
IN
APPEAL NO. 66 OF 2012

UTO Nederland B. V. & Anr. … Appellants

Versus
Tilaknagar Industries Ltd. ... Respondent

WITH
NOTICE OF MOTION NO. 740 OF 2013
IN
APPEAL NO. 66 OF 2012

UTO Nederland B.V. & Anr. … Applicants

Versus
Tilaknagar Industries Ltd. ... Respondent

WITH
INTERIM APPLICATION NO. 2979 OF 2024
IN
APPEAL NO. 66 OF 2012

Allied Blender and Distillers Ltd. … Applicant

Versus
UTO Nederland B. V. & Ors. ... Respondents

WITH
NOTICE OF MOTION NO. 1427 OF 2014
IN
APPEAL NO. 66 OF 2012

Tilaknagar Industries Ltd. … Applicant

Versus
Herman Jansen Beverages Nederland B. … Respondents
V. & Ors.
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Ms. L. M. Jenkins a/w. Mr. Siddhant Dalvi i/b Laxmi

Maria Jenkins for the Appellants.

Mr. Ashish Kamat, Senior Advocate a/w. Mr. Karl

Tamboly and Mr. Priyank Kapadia i/b Yashvi Panchal for
the Proposed Appellant in IA/2979/2024.

Mr. Ravi Kadam, Senior Advocate and Mr. Venkatesh

Dhond, Senior Advocate a/w. Mr. H. W. Kane,
Mr. Rohan Kelkar, Mr. Rohan Kadam, Mr. Manvendra
Kane, Mr. Ashutosh Kane, Ms. Vedangi Soman and
Mr. I. K. Paranjape i/b Mr. H. W. Kane for the
Respondent in APP/66/2012

CORAM: ALOK ARADHE, CJ.,

M. S. KARNIK &
SHYAM C. CHANDAK, JJ.

RESERVED ON : APRIL 21, 2025

PRONOUNCED ON : APRIL 28, 2025

JUDGMENT (PER : CHIEF JUSTICE)

1. A Division Bench of this Court noticed irreconcilable conflict

of views expressed by Division Benches of this Court in
COLGATE PALMOLIVE COMPANY AND ANOTHER VS.
ANCHOR HEALTH AND BEAUTY CARE PVT. LTD.1 and
PARKSONS CARTAMUNDI PVT. LTD. VS. SURESH KUMAR
JASRAJ BURAD2 as well as GOLDMINES TELEFILMS PVT.
LTD. VS. RELIANCE BIG ENTERTAINMENT PVT. LTD. AND
ORS.3 with regard to following aspects; (i) Whether order passed
on an application for temporary injunction is prima facie
adjudication and not an exercise of discretion (ii) Scope of
appeal from an order of the trial court on an application of
injunction.

1
2005(1) Mh.L.J. 613
2
2012 SCC OnLine Bom 438
3
Appeal (L) No.458/2014 in NM/452/2014 in Suit/194/2014 dt.24.09.2014
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The Division Bench, therefore, by an order dated 15 th

December 2014, has referred the matter for consideration by a
larger Bench:

(I) FACTS :

2. The facts leading to the order of reference lie in a narrow

compass. The appellants are major dutch producers, importers,
exporters, sellers and distributors of various spirits and liquors,
including scotch whiskey, gin, vodka, rum, liqueurs and cognac.
The respondents are in the business of manufacturing and
marketing of industrial alcohol, spirits, Indian made foreign
liquor and sugar cubes. The appellants claim to be proprietors of
several trademarks including ‘Mansion House’ and ‘Savoy Club’
which the appellants have used in relation to the spirits and
liquors manufactured by them. According to them, appellant
No.1 is a registered proprietor of the trademark ‘Mansion House’.
The appellants claim to have used the trade mark ‘Savoy Club’
from 1947.

3. Sometime in the year 1982, the respondents approached

the appellants to consider the possibilities of entering into
collaboration for sale of the appellants’ products in India.
Thereupon, appellant No.1, on 7th July 1983, entered into a
license agreement with the respondents by which the
respondents were licensed and permitted to use the trade marks
and labels of ‘Mansion House’ and ‘Savoy Club for alcoholic
beverage products such as whisky, gin, brandy and rum.
According to the appellants, the respondents, with dishonest and
mala fide intention, filed various applications for registration of
trade marks ‘Mansion House’ and ‘Savoy Club’ in India including
the logo ‘Herman Jensen’, which was used by appellant No.2
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since 1947. The appellants, thereupon, filed a suit for

infringement of copyright and passing-off. Along with the plaint a
Notice of Motion seeking injunction was also filed. The trial
court, by order dated 22nd December 2011 rejected the notice of
motion for injunction. The appellants challenged the aforesaid
order in an appeal namely, appeal No.66 of 2012.

(II) SUBMISSIONS BEFORE DIVISION BENCH :

4. Learned senior counsel for the appellants, at the time of
hearing of the appeal before Division Bench, contended that
there is an infringement and assignment of trademark of the
appellants and in the alternative, there has been an
abandonment of trade marks by the appellants. It was further
contended that, even, there has been acquiescence on the part
of the appellants in permitting the respondents to use the
appellants’ trade mark. It is submitted that in the instant case,
in an appeal from order refusing to grant injunction, the scope of
inquiry is not restricted only to examine whether the impugned
order is perverse or suffers from errors apparent on the face of
record but the impugned order can be examined in all its
aspects. It was further contended that the appellate court,
whenever necessary, on consideration of all the facts and law, is
obliged to substitute the conclusion of the trial judge by its own
findings.

(III) ORDER OF REFERENCE:

5. The Division Bench of this Court, thereafter, in paragraph
9 held as under:
“9) It may be pointed out that the entire exercise of
determining whether order of the learned Single Judge
while disposing of an interim application is within realm of
discretion or is a prima facie adjudication, is of vital
importance because on that finding would depend the
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scope of an Appeal Court’s interference with an order

passed by the learned Single Judge on an interim
application for injunction. This is an issue which would
arise in every appeal from an order disposing of interim
application for injunction. We are of the view that it does
appear that there are two parallel views and in spite of our
attempts with the aid of the learned counsels, we were not
able to reconcile the two views. However, considering the
various decision of the Apex Court beginning with Wander
Limited Vs. Antox India Pvt. Ltd.4 and the decision
rendered in Colgate Palmolive Co. (supra) on one hand
and the decision of the Division Bench in Parksons
Caratmundi (supra) and Goldmines Telefilms (supra)
on the other, we are of the view that there is an apparent
conflict between the aforesaid two lines of decisions. In
that view of the matter, it would be appropriate that the
following questions of law be placed before Hon’ble the
Chief Justice for his consideration to place the following
questions before a Larger Bench to resolve the apparent
conflict and/or reconcile the two lines of the decisions
referred to hereinabove. Accordingly, we direct the
following question of law be placed before the Hon’ble the
Chief Justice for consideration to refer them for opinion of a
Larger Bench.

“Q.1 Which of the decisions rendered in Colgate

Palmolive Vs. Anchor Health and Beauty Care Pvt.
Ltd. (supra) holding that an order passed on the
application for temporary injunction does not cease to be
an order passed in discretion merely because the Trial
Judge does not find any prima facie case or the decision in
Parksons Cartamundi Pvt. Ltd. Vs. Suresh Kumar
Jasraj Burad (supra) and Goldmines Telefilms Pvt.
Ltd. Vs. Reliance Big Entertainment Pvt. Ltd. & Ors.
(supra), where it has been held that the order passed on
the application for temporary injunction is prima facie
adjudication and not an exercise of discretion sets out the
correct law?
Q.2 What is the scope and ambit of an appeal from
an order passed by the trial Judge on an interlocutory
application pending the disposal of the suit?”
In the aforesaid factual background, this reference is made
to a Larger Bench.
4
1990 (supp) SCC 727
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(IV) SUBMISSIONS OF APPELLANTS:

6. Learned counsel for the appellants submitted that the

learned Single Judge, while passing the impugned order, has
delved into prima facie adjudication of the rights of the parties
and therefore, the scope of inquiry by the appellate court is not
restricted to examine whether the impugned order is perverse or
suffers from error apparent but with regard to all aspects of the
impugned order and the appellate court is entitled to substitute
the conclusions by its own findings.

(V) SUBMISSIONS OF RESPONDENT:

7. On the other hand, learned senior counsel for the

respondent submitted that a Court dealing with a prayer for
injunction decides the same on the touchstone of three well
settled parameters viz. prima facie case, balance of convenience
and irreparable injury. It is submitted that the object of
interlocutory remedy of grant of injunction is to preserve the
status-quo and the rights of the parties, which appear on a
prima facie case. It is also submitted that the Court dealing with
a prayer for injunction, exercises its discretion while granting or
refusing to grant the injunction. It is also urged that the scope
of an appeal is confined to examining whether the discretion has
been exercised arbitrarily, capriciously or perversely or whether
the Court had ignored well settled parameters regulating the
grant or refusal to grant an interlocutory injunction. It is
contended that the law laid down by Division Bench of this
Court in HIRALAL PARBHUDAS VS. GANESH TRADING
COMPANY AND OTHERS5 cannot be applied to the facts of the
case and the subsequent Division Bench in PARKSONS
5
AIR 1984 BOM 218
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CARTAMUNDI PVT. LTD. (SUPRA) erred in applying the

decision in HIRALAL PARBHUDAS (SUPRA). In support of the
aforesaid submissions, reliance has been placed on WANDER
LTD. AND ANOTHER VS. ANTOX INDIA P. LTD. (SUPRA),
GUJARAT BOTTLING CO. LTD. AND OTHERS VS. COCA
COLA CO. AND OTHERS6, SHYAM SEL AND POWER
LIMITED AND ANOTHER VS. SHYAM STEEL INDUSTRIES
LIMITED7 and RAMAKANT AMBALAL CHOKSI VS. HARISH
AMBALAL CHOKSI AND OTHERS8.

(VI) CONSIDERATION:

8. We have considered the rival submissions made on both

the sides and have perused the record. The law relating to
injunctions in India has its origin in Equity Jurisprudence of
common law. Injunction is a judicial process by which party is
required to do or to refrain from doing any particular act. It is in
the nature of preventive relief to a litigant to prevent future
possible injury. Identification of the standards for exercising such
discretionary powers by the Court has not, generally, been part
of the legislations. The guiding principles for exercise of
discretionary powers appear to be drawn from the judicial
precedence and the common law principles. The decision
whether or not to grant an injunction has to be taken at the time
when existence of the legal right asserted by the plaintiff and its
alleged violation are both contested and uncertain and remain
uncertain till they are established at the trial on evidence. The
relief, by way of interlocutory injunction is granted to mitigate
the injustice to the plaintiff during the period before that
uncertainty could be resolved. The object of interlocutory
6
(1995) 5 SCC 545
7
(2023) 1 SCC 634
8
2024 SCC OnLine SC 3538
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injunction is to protect the plaintiff against the injury by violation

of his right for which he cannot be adequately compensated in
damages in the recovery if the uncertainty were to be resolved
at the trial.

(VII) TRINITY TEST:

9. The cardinal principles for grant of injunction are:

(i) Whether the plaintiff has prima facie case?
(ii) Whether the balance of convenience lies in favour of
the plaintiff?
(iii) Whether the plaintiff would suffer irreparable injury if
his prayer for interlocutory injunction is disallowed?

10. Now we may advert to the scope and ambit of the trinity
test on the basis of which the discretionary prayer for grant of
injunction has to be dealt with. The expression ‘prima facie case’
is a Latin expression means ‘at first sight or based on first
impression or on the face of it’. The expression ‘ prima facie
case’ has a well settled meaning in legal parlance. The House of
Lords in AMERICAN CYNAMID CO. AND ETHICON LTD.,9
while dealing with scope and ambit of expression ‘ prima facie
case’ held as under:
“The use of such expressions as "a probability," "a prima facie
case," or "a strong prima facie case" in the context of the
exercise of a discretionary power to grant an interlocutory
injunction leads to confusion as to the object sought to be
achieved by this form of temporary relief. The court no doubt
must be satisfied that the claim is not frivolous or vexatious, in
other words, that there is a serious question to be tried.

It is no part of the court's function at this stage of the litigation

to try to resolve conflicts of evidence on affidavit as to facts on
which the claims of either party may ultimately depend nor to
decide difficult questions of law which call for detailed argument
and mature considerations. These are matters to be dealt with
9
1975 (1) ALL ER 504
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at the trial. One of the reasons for the introduction of the

practice of requiring an undertaking as to damages upon the
grant of an interlocutory injunction was that "it aided the court
in doing that which was its great object, viz. abstaining from
expressing any opinion upon the merits of the case until the
hearing":Wakefield v. Duke of Buccleugh (1865) 12 L.T. 628,
629. So unless the material available to the court at the hearing
of the application for an interlocutory injunction fails to disclose
that the plaintiff has any real prospect of succeeding in his claim
for a permanent injunction at the trial, the court should go on to
consider whether the balance of convenience lies in favour of
granting or refusing the interlocutory relief that is sought.”

The aforesaid principle was reiterated in GARDEN

COTTAGE FOODS LTD. VS. MILK MARKETING BOARD 10.

11. The meaning of expression ‘prima facie case’ was

considered by Supreme Court in MARTIN BURN LTD. VS.
R.N.BANERJEE11. In the said case, Supreme Court explained
the connotation ‘prima facie case’ in the following words:

“A prima facie case does not mean a case proved to the hilt
but a case which can be said to be established if the
evidence which is led in support of the same were believed.
While determining whether a prima facie case had been
made out, the relevant consideration is whether on the
evidence let it was possible to arrive at the conclusion in
question and as to whether that was the only conclusion
which could be arrived at on that evidence.”

12. The meaning of expression ‘ prima facie case’ was again

explained by Supreme Court in DALPAT KUMAR AND ANR VS.
PRAHLAD SINGH AND ORS.12 and it was held that prima facie
case is a substantial question raised bona fide which needs
investigation and a decision on merits. It has further been held
that expression ‘prima facie case’ is not to be confused with
prima facie title which has to be established, on evidence at the
10
(1983) 2 All ER 770
11
AIR 1958 Supreme Court 79
12
1992(1) SCC 719
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trial. Thus, at the stage of consideration of the application for

injunction, the plaintiff, in order to establish he has prima facie
case, has to prove that there is serious question to be tried in
the suit.

13. The Supreme Court elucidated the meaning of expression

‘prima facie case’ in GUJARAT BOTTLING CO. LTD. (SUPRA)
to mean that the Court should be satisfied that there is a serious
question to be tried at the hearing, and there is a probability
that of plaintiff obtaining the relief at the conclusion of the trial
on the basis of the material placed before the Court. The
expression ‘prima facie case’ means a substantial question raised
bona fide which needs investigation and decision on merits and
the Court, at the initial stage, cannot insist upon a full proof case
warranting an eventual decree. [See : ANAND PRASAD
AGARWAL VS. TARKESHWAR PRASAD13, RAMAKANT
AMBALAL CHOKSI (SUPRA) and STATE OF KERALA VS.
UNION OF INDIA14].

14. The Court, while dealing with the prayer for injunction has
also to advert itself to the second essential ingredient for grant
of injunction viz. ‘balance of convenience’. In order to determine
whether the balance of convenience lies, the Court must weigh
two matters. The first is to protect the plaintiff against injury by
violation of his rights for which he could not be adequately
compensated in damages recoverable in the action if the
uncertainty were to be resolved in his favour. The second
matter is that the defendant’s need to be protected against
injury resulting from his having been prevented from exercising
his own legal rights for which he could not be adequately
13
(2001) 5 SCC 568
14
(2024) 7 SCC 183
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compensated by an undertaking if the uncertainty were to be

resolved in defendant’s favour at the trial. [see : HALSBURY’S
LAWS OF ENGLAND, FOURTH EDITION, VOL-24 para 856,
AMERICAN CYNAMID CO. AND ETHICON LTD (SUPRA) and
FELLOWES & SON V. FISHER.15]

15. The aforesaid principle has been reiterated with approval

by Supreme Court in WANDER LIMITED (SUPRA) and it has
been held that need to protect the plaintiff against the injury by
violation of his right for which he cannot be compensated in
damages recoverable in the action if the uncertainty were to be
resolved in his favour has to be weighed against the
corresponding need of the defendant to be protected against
injury resulting from his having been prevented from exercising
his legal rights for which he would not be adequately
compensated. The Court, therefore, must weigh one need
against another and determine where the ‘balance of
convenience’ lies.

16. The Court, while dealing with the prayer for grant of
injunction is required to consider the third essential ingredient
viz. irreparable injury. The Supreme Court in M/S. GUJARAT
BOTTLING CO. LTD. (SUPRA) has held that the Court is
required to satisfy itself that the party seeking injunction needs
protection from the consequences of apprehended injury and the
injury is such which cannot be adequately compensated by way
of damages. Thus, the Court is required to satisfy itself that in
case an injunction as prayed for is not granted, the party
seeking the same will suffer irreparable injury.

15
(1975) 2 ALL ER 829
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17. A party is not entitled to an order of injunction as a matter

of right. The grant of interlocutory injunction is a remedy which
is discretionary in nature. However, such a discretion has to be
exercised on the touchstone of trinity test viz. prima facie case,
balance of convenience and irreparable injury. [See SHIV
KUMAR CHADHA ETC. VS. MUNICIPAL CORPORATION OF
DELHI].16 It is equally well settled legal proposition that the
temporary injunction being equitable relief, the discretion to
grant such relief will be exercised only when the plaintiff’s
conduct is free from blame and he approaches the Court with
clean hands SEEMA ARSHAD ZAHEER VS. MUNICIPAL
CORPORATION OF GREATER MUMBAI.17

(VIII) SCOPE OF APPEAL:

18. Having noted the three well settled legal propositions on
the basis of which a discretionary power to deal with the prayer
for injunction has to be exercised, we may now advert to the
scope of appeal against an order dealing with a prayer for
temporary injunction. A decision of three Judge Bench of
Supreme Court in WANDER LIMITED (SUPRA) can be
considered as a locus classicus. The Supreme Court, in
paragraph 14 has dealt with the scope of appeal against an order
granting temporary injunction, which is extracted below for the
facility of reference:
“14. The appeals before the Division Bench were against the
exercise of discretion by the Single Judge. In such appeals, the
appellate court will not interfere with the exercise of discretion
of the court of first instance and substitute its own discretion
except where the discretion has been shown to have been
exercised arbitrarily, or capriciously or perversely or where the
court had ignored the settled principles of law regulating grant
or refusal of interlocutory injunctions. An appeal against
exercise of discretion is said to be an appeal on principle.
16
1993 SCC (3) 161
17
(2006) 5 SCC 282
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Appellate court will not reassess the material and seek to reach
a conclusion different from the one reached by the court below
if the one reached by that court was reasonably possible on the
material. The appellate court would normally not be justified in
interfering with the exercise of discretion under appeal solely on
the ground that if it had considered the matter at the trial stage
it would have come to a contrary conclusion. If the discretion
has been exercised by the trial court reasonably and in a judicial
manner the fact that the appellate court would have taken a
different view may not justify interference with the trial court's
exercise of discretion. After referring to these principles
Gajendragadkar, J. in Printers (Mysore) (P) Ltd. v. Pothan
Joseph [Printers (Mysore) (P) Ltd. v. Pothan Joseph, (1960) 3
SCR 713 :
‘…. These principles are well established, but, as has been
observed by Viscount Simon L.C. in Charles Osenton & Co.
v. Johnston [Charles Osenton & Co. v. Johnston, 1942 AC
130 (HL)] , AC at p. 138 : …..The law as to the reversal by
a court of appeal of an order made by a judge below in
the exercise of his discretion is well-established, and any
difficulty that arises is due only to the application of well-
settled principles in an individual case”.’
The appellate judgment does not seem to defer to this
principle.”

19. The aforesaid view was quoted with approval by another

two Judge Bench of Supreme Court in SHYAM SEL AND
POWER LIMITED (SUPRA). In paragraph 36, it was held that
the judgment in WANDER LIMITED (SUPRA) has been guiding
the appellate courts in the country for decades while exercising
the appellate jurisdiction considering the correctness of the
discretion and jurisdiction for grant or refusal of interlocutory
injunctions. Paragraphs 36 of SHYAM SEL AND POWER
LIMITED (SUPRA) reads as under:

“36. The learned Judges of the Division Bench of the High

Court have taken pains to make a mention of the judgment of
this Court in Wander [Wander Ltd. v. Antox India (P) Ltd., 1990
Supp SCC 727] . This judgment has been guiding the appellate
courts in the country for decades while exercising their appellate
jurisdiction considering the correctness of the discretion and
jurisdiction exercised by the trial courts for grant or refusal of
interlocutory injunctions. In the said case, the learned Single

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Judge had refused an order of temporary injunction in favour of

the plaintiff who was claiming to be a registered proprietor of
the registered trade mark. The Division Bench of the High Court
had reversed the order passed by the learned Single Judge and
granted interim injunction. Reversing the order of the Division
Bench of the High Court and maintaining the order of the
learned Single Judge, this Court observed thus : (Wander case
[Wander Ltd. v. Antox India (P) Ltd., 1990 Supp SCC 727] ,
SCC p. 733, para 14)
“14. The appeals before the Division Bench were against
the exercise of discretion by the Single Judge. In such
appeals, the appellate court will not interfere with the
exercise of discretion of the court of first instance and
substitute its own discretion except where the discretion
has been shown to have been exercised arbitrarily, or
capriciously or perversely or where the court had ignored
the settled principles of law regulating grant or refusal of
interlocutory injunctions. An appeal against exercise of
discretion is said to be an appeal on principle. Appellate
court will not reassess the material and seek to reach a
conclusion different from the one reached by the court
below if the one reached by that court was reasonably
possible on the material. The appellate court would
normally not be justified in interfering with the exercise of
discretion under appeal solely on the ground that if it had
considered the matter at the trial stage it would have
come to a contrary conclusion. If the discretion has been
exercised by the trial court reasonably and in a judicial
manner the fact that the appellate court would have taken
a different view may not justify interference with the trial
court's exercise of discretion. After referring to these
principles Gajendragadkar, J. in Printers (Mysore) (P) Ltd.
v. Pothan Joseph [Printers (Mysore) (P) Ltd. v. Pothan
Joseph, (1960) 3 SCR 713 : AIR 1960 SC 1156] , SCR p.
721, AIR p. 1159, para 9 : (AIR p. 1159, para 9)
9. … These principles are well established, but, as
has been observed by Viscount Simon L.C. in
Charles Osenton & Co. v. Johnston [Charles Osenton
& Co. v. Johnston, 1942 AC 130 (HL)] , AC at p. 138
“… The law as to the reversal by a court of
appeal of an order made by a judge below in the
exercise of his discretion is well-established, and
any difficulty that arises is due only to the
application of well-settled principles in an individual
case”.’
The appellate judgment does not seem to defer to this
principle.”

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20. Recently, another two Judge Bench of the Supreme Court

in RAMAKANT AMBALAL CHOKSI (SUPRA) dealt with the
scope of appellate jurisdiction of the Court dealing with an
appeal against an order of injunction and approved the principles
laid down in WANDER LIMITED (SUPRA) and referred to the
decision in SHYAM SEL AND POWER LTD., (SUPRA) and in
paragraph 21, 26, 30, 32 35, 36, 37 it was held as under:
21. The law in relation to the scope of an appeal against grant
or non-grant of interim injunction was laid down by this Court in
Wander Ltd. v. Antox India P. Ltd., 1990 Supp SCC 727. Antox
brought an action of passing off against Wander with respect to
the mark Cal-De-Ce. The trial court declined Antox's plea for an
interim injunction, however, on appeal the High Court reversed
the findings of the trial judge. This Court, upon due
consideration of the matter, took notice of two egregious errors
said to have been committed by the High Court:
a. First, as regards the scope and nature of the appeals
before it and the limitations on the powers of the appellate
court to substitute its own discretion in an appeal
preferred against a discretionary order; and
b. Secondly, the weakness in ratiocination as to the
quality of Antox's alleged user of the trademark on which
the passing off action is founded.

26. What flows from a plain reading of the decisions in Evans

(supra) and Charles Osenton (supra) is that an appellate court,
even while deciding an appeal against a discretionary order
granting an interim injunction, has to:
a. Examine whether the discretion has been properly
exercised, i.e. examine whether the discretion exercised is
not arbitrary, capricious or contrary to the principles of
law; and
b. In addition to the above, an appellate court may in a
given case have to adjudicate on facts even in such
discretionary orders.

30. This Court in Shyam Sel & Power Ltd. v. Shyam Steel
Industries Ltd., (2023) 1 SCC 634 observed that the hierarchy
of the trial court and the appellate court exists so that the trial
court exercises its discretion upon the settled principles of law.
An appellate court, after the findings of the trial court are
recorded, has an advantage of appreciating the view taken by
the trial judge and examining the correctness or otherwise
thereof within the limited area available. It further observed
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that if the appellate court itself decides the matters required to

be decided by the trial court, there would be no necessity to
have the hierarchy of courts.

32. The appellate court in an appeal from an interlocutory

order granting or declining to grant interim injunction is only
required to adjudicate the validity of such order applying the
well settled principles governing the scope of jurisdiction of
appellate court under Order 43 of the CPC which have been
reiterated in various other decisions of this Court. The appellate
court should not assume unlimited jurisdiction and should guide
its powers within the contours laid down in the Wander (supra)
case.

35. Any order made in conscious violation of pleading and law

is a perverse order. In Moffett v. Gough, (1878) 1 LR 1r 331,
the Court observed that a perverse verdict may probably be
defined as one that is not only against the weight of evidence
but is altogether against the evidence. In Godfrey v. Godfrey,
106 NW 814, the Court defined “perverse” as “turned the wrong
way”; not right; distorted from the right; turned away or
deviating from what is right, proper, correct, etc.

36. The expression “perverse” has been defined by various

dictionaries in the following manner:
a. Oxford Advanced Learner's Dictionary of Current
English, 6th Ed.
Perverse - Showing deliberate determination to behave in
a way that most people think is wrong, unacceptable or
unreasonable.
b. Longman Dictionary of Contemporary English -
International Edition
Perverse - Deliberately departing from what is normal and
reasonable.
c. The New Oxford Dictionary of English - 1998 Edition
Perverse - Law (of a verdict) against the weight of
evidence or the direction of the judge on a point of law.
d. New Webster's Dictionary of the English Language
(Deluxe Encyclopedic Edition)
Perverse - Purposely deviating from accepted or expected
behavior or opinion; wicked or wayward; stubborn; cross
or petulant.
e. Stroud's Judicial Dictionary of Words & Phrases, 4th
Ed. Perverse - A perverse verdict may probably be defined
as one that is not only against the weight of evidence but
is altogether against the evidence.

37. The wrong finding should stem out on a complete

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misreading of evidence or it should be based only on

conjectures and surmises. Safest approach on perversity is the
classic approach on the reasonable man's inference on the facts.
To him, if the conclusion on the facts in evidence made by the
court below is possible, there is no perversity. If not, the finding
is perverse. Inadequacy of evidence or a different reading of
evidence is not perversity. (See : Damodar Lal v. Sohan Devi,
(2016) 3 SCC 78)

(IX) RELEVANT STATUTORY PROVISIONS:

21. At this stage, it is apposite to take note of Section 56(1) of
the Trade and Merchandise Marks Act, 1958 (1958 Act) and
Order XXXIX Rule (1) of the Code of Civil Procedure, 1908, which
are extracted below for the facility of reference:
“56. Power to cancel or vary registration and to
rectify the register:

(1) On application made in the prescribed manner to a

High Court or to the Registrar by any person aggrieved, the
tribunal may make such order as it may think fit for
cancelling or varying the registration of a trade mark on
the ground of any contravention, or failure to observe a
condition entered on the register in relation thereto.”

“ORDER XXXIX
TEMPORARY INJUNCTIONS AND INTERLOCUTORY ORDERS
Temporary injunctions

1. Cases in which temporary injunction may be granted. -

Where in any suit it is proved by affidavit or otherwise-
(a) that any property in dispute in a suit is in danger of being
wasted, damaged or alienated by any party to the suit, or
wrongfully sold in execution of a decree, or
(b) that the defendant threatens, or intends, to remove or
dispose of his property with a view to defrauding his creditors,
(c) that the defendant threatens to dispossess, the plaintiff or
otherwise cause injury to the plaintiff in relation to any
property in dispute in the suit,
the Court may by order grant a temporary injunction to restrain such
act, or make such other order for the purpose of staying and
preventing the wasting, damaging, alienation, sale, removal or
disposition of the property or dispossession of the plaintiff, or
otherwise causing injury to the plaintiff in relation to any property in
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dispute in the suit as the Court thinks fit, until the disposal of the suit
or until further orders.
The Legislature has employed different language in Section
56(1) as well as Order XXXIX Rule (1) of the Code of Civil
Procedure, 1908.

(X) HIRALAL PARBHUDAS (SUPRA) & AND NATIONAL

CHEMICALS AND COLOUR CO. (SUPRA):
22. Now we may advert to the decisions rendered by the
Division Benches of this Court. A Division Bench of this Court in
paragraph 22 of the judgment in HIRALAL PARBHUDAS
(SUPRA) dealing with contention that a discretionary order
passed by the Dy. Registrar under Section 56(1) of the 1958 Act
should not be lightly disturbed, in paragraph 22 held as under:

“22. It was finally urged by Mr. Kale that the discretion

exercised by the Deputy Registrar under Section 56 of the Act in
the respondents' favour should not be lightly disturbed and the
appellate Court should therefore not disturb the judgment and
order of the learned single Judge. We ask ourselves. Pray where
at all arises the question of discretion. To start with, the Deputy
Registrar did not exercise any discretion under Section 56 in
rejecting the appellants' application for rectification. It must be
remembered that the concept of discretion is distinct from that
of adjudication. When the Deputy Registrar rejected the
appellants' application for rectification on the ground that the
two marks are not deceptively similar, she did not use any
discretion but adjudicated upon the rival contentions of the
parties. It would be trite to say that exercise of discretion can
arise in favour of a party when adjudication by the Registrar is
against that party. In the present case, the Deputy Registrar's
adjudication was in fact in favour of the respondents, with the
result that there was no occasion for the Deputy Registrar to
exercise any discretion. If the Deputy Registrar had held that
the two marks were deceptively similar (which she did not) but
that in exercise of her discretion she did not consider it
necessary to pass an order for rectification, it could be said that
the Deputy Registrar having exercised the discretion in favour of
the respondents, interference with such discretion was not
called for. Nothing of the kind can be said in the present case
where in fact the Deputy Registrar has held that the two marks
are not deceptively similar. In any event, this Court having
come to the conclusion that the two marks are deceptively
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similar, this cannot be a case for the exercise of discretion in

favour of the respondents as their case is not founded on truth
and also in view of the uncontroverted evidence of actual
deception perpetrated and confusion caused.”

23. A Division Bench of this Court, in HIRALAL PARBHUDAS

(SUPRA) was dealing with submission that a discretionary order
passed under section 56(1) of the 1958 Act should not be lightly
interfered with in an appeal. In the facts of the said case, it was
found by the Division Bench that the order passed by the
Registrar was not passed in exercise of discretion but on
adjudication.

24. Another Division Bench of this Court in M/S. NATIONAL

CHEMICALS AND COLOUR CO. (SUPRA) again dealt with an
order of the Registrar passed under the 1958 Act and referred to
the decision in HIRALAL PARBHUDAS (SUPRA) for the
proposition that there is a distinction between the adjudication
by the Registrar and exercise of discretion by the Registrar
under the 1958 Act.
Thus, both the decisions in HIRALAL PARBHUDAS
(SUPRA) and M/S. NATIONAL CHEMICALS AND COLOUR
CO. (SUPRA) dealt with an order passed under Section 56(1) of
the Act of 1958.

(XI) COLGATE PALMOLIVE COMPANY AND ANOTHER:

25. Another Division Bench judgment of this Court in
COLGATE PALMOLIVE COMPANY (SUPRA), while placing
reliance on the decision of Supreme Court in DALPAT KUMAR
AND ANR VS. PRAHLAD SINGH AND ORS., 18 held that grant
of injunction is discretionary relief and held that the decisions
rendered by Division Benches of this Court in HIRALAL
18
1992(1) SCC 719
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PARBHUDAS (SUPRA) and M/S. NATIONAL CHEMICALS

AND COLOUR CO. (SUPRA) have no relevance to an appeal
arising out an order under Order XXXIX Rule 1 and 2 of the CPC.
In paragraph 10, it was held as under:
“10. Let us make it clear and we do that the impugned order
declining to grant temporary injunction has not ceased to be
discretionary order merely because the learned motion Judge
did not find any prima facie case and accordingly refused to
grant interim restraint order. In the matters of temporary
injunction, the Court does not adjudicate on the subject matter
or any part of it on merits. The Court considers the application
for temporary injunction in the light of well known principles as
already noticed above and then exercises its discretion weighing
all relevant consideration without any expression of opinion on
merits of the matter. We hardly find the relevance of the two
judgments of this Court namely Hiralal Prabhudas and National
Chemicals and Colour Co. on the position we have noticed
above.”

(XII) PARKSONS CARTAMUNDI PVT. LTD. (SUPRA):

26. However, a Division Bench of this Court in PARKSONS
CARTAMUNDI PVT. LTD. (SUPRA) subsequently did not deal
with the previous judgment of the Division Bench in COLGATE
PALMOLIVE COMPANY (SUPRA), which was binding on it and
relied on a decision in HIRALAL PARBHUDAS (SUPRA), which
was already held to be not relevant while adjudicating an appeal
arising out of an order of injunction. In paragraphs 14, 16 and
17 the subsequent Division Bench held as under:
“14. In the background of the above facts, we have heard
learned counsel for the parties on the question whether use of
mark “MERICELL NO. 7” printed on bigger cartons as well as
small packets containing playing cards infringes plaintiff's
registered trademark “MERELANE” and “MERELANE NO. 7”.
Having examined both the trademarks and also having seen the
designs and colour schemes of the playing cards, the packets
and bigger cartons, and also having gone through the orders
dated 22 September 2011 in Notice of Motion No. 1948 of 2011
where “MARICELL 555” has been considered to be deceptively
similar to “MARELANE 555” and the order dated 6 February
2012, where “NAIKAN No. 7” has been considered to be
deceptively similar to “Nylon No. 7” we have no manner of
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doubt that the defendant's playing cards as well as the packets

and cartons are deceptively similar to the plaintiff's playing
cards, packets and cartons. The reasoning of the learned Single
Judge based on microscopic examination that there is no
similarity between the words “MARICELL” and “MARELANE”
cannot be accepted.

16. It is true that the learned Single Judge has passed the
impugned order in favour of the respondent-defendant. The
question is whether the same can be considered as a
discretionary order. In Hiralal Prabhudas v. Ganesh Trading
Company, where a similar contention was raised that the
appellate court should not disturb the discretionary order of the
learned Single Judge, a Division Bench of this Court speaking
through Justice Lentin held as under:
“It was finally urged by Mr. Kale that the discretion
exercised by the Deputy Register under Section 56 of the
Act in the respondents' favour should not be lightly
disturbed and the appellate Court should therefore not
disturb the judgment and order of the learned single
Judge. We ask ourselves; Pray where at all arises the
Deputy Registrar did not exercise any discretion under
Section 56 in rejecting the appellants application for
rectification. It must be remembered that the concept of
discretion is distinct from that of adjudication. When the
Deputy Registrar rejected the appellants application for
rectification on the ground that the two marks are not
deceptively similar, she did not use any discretion but
adjudicated upon the rival contentions of the parties. It
would be trite to say that exercise of discretion can arise
in favour of a party when adjudication by the Registrar is
against that party. In the present case, the Deputy
Registrar's adjudication was in fact in favour of the
respondents, with the result that there was no occasion
for the Deputy Registrar to exercise any discretion. If the
Deputy Registrar had held that the two marks were
deceptively similar (which she did not) but that in exercise
of her discretion she did not consider it necessary to pass
an order for rectification, it could be said that the Deputy
Registrar having exercised the discretion in favour of the
respondents, interference with such discretion was not
called for. Nothing of the kind can be said in the present
case where in fact the Deputy Registrar has held that the
two marks are not deceptively similar. In any event, this
court having come to the conclusion that the two marks
are deceptively similar, this cannot be a case for the
exercise of discretion in favour of the respondents as their
case is not founded on truth and also in view of the

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uncontroverted evidence of actual deception perpetrated

and confusion caused.
(emphasis supplied)
17. It is thus clear that the concept of discretion is distinct
from that of adjudication. What the learned Single Judge has
done in the instant case is making prima facie adjudication that
the defendants' trademark is not deceptively similar to that of
the plaintiff. Therefore, there is no question of any discretion
exercised by the learned Single Judge. We have already held
that the defendant has been infringing the plaintiff's trademarks
and has been attempting to pass off its playing cards as those of
the plaintiff. This has happened in respect of the very trademark
“MERELANE, which is registered since the year 1971 and also
the label mark on the packets containing the playing cards
prominently bearing the words “MERELANE No. 7”. Hence, there
is no question of applying the principle enunciated in the case of
Wander Limited v. Antox India (P) Limited.

27. Another Division Bench of this Court in GOLDMINES

TELEFILMS PVT. LTD. relied on the decision of M/S.
NATIONAL CHEMICALS AND COLOUR CO. (SUPRA) and
HIRALAL PARBHUDAS (SUPRA).

28. It is pertinent to note that the subsequent Division Bench

decision in PARKSONS CARTAMUNDI PVT. LTD. (SUPRA), in
the facts of the case found that the plaintiff has been able to
make out a strong prima facie case and the balance of
convenience lies in its favour. It was further held that in case
injunction is not granted, the plaintiff in that case would suffer
irreparable injury. Accordingly, injunction, in the facts of the
case was granted. Similar view was taken in GOLDMINES
TELEFILMS PVT. LTD.(SUPRA).

29. The scope of appeal arising out of an order granting

injunction is different than the appeal arising out of an order
passed under Section 56(1) of the 1958 Act and cannot be
compared to scope of an appeal arising from an order passed

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under Section 56(1) of the 1958 Act. The scope of appeal

against an order granting injunction is well delineated by the
decisions of the Supreme Court in WANDER LIMITED
(SUPRA), M/S GUJARAT BOTTLING COMPANY LTD.
(SUPRA), SHYAM SEL AND POWER LTD., (SUPRA) AND
RAMAKANT AMBALAL CHOKSI (SUPRA).

30. Even otherwise, it is well settled in law that if there are two
conflicting judgments of equal strength, the former decision will
prevail in case where previous decision specifically considers a
particular question and lays down the principle relating to the
said question and where subsequent decision neither deals with
the earlier decision nor the principle laid down therein. [See :
GOVERNMENT OF WEST BENGAL VS. TARUN K. ROY. ]19 The
subsequent Division Benches decision in PARKSONS
CARTAMUNDI PVT. LTD. (SUPRA) and GOLDMINES
TELEFILMS PVT. LTD. (SUPRA) did not consider the principle
with regard to the scope of appeal arising out of an order of
injunction laid down in COLGATE PALMOLIVE COMPANY
(SUPRA). The subsequent Division Benches in PARKSONS
CARTAMUNDI PVT. LTD. (SUPRA) and GOLDMINES
TELEFILMS PVT. LTD. (SUPRA) ought to have appreciated
that the decisions rendered in HIRALAL PARBHUDAS
(SUPRA) and M/S. NATIONAL CHEMICALS AND COLOUR
CO. (SUPRA) dealing with an appeal arising from an order
passed by the Registrar under 1958 Act, have no relevance while
dealing with an appeal against an order granting or refusing to
grant injunction. The subsequent Division Benches have failed
to take note of the binding precedent with regard to the scope of
appeal arising out of an order of injunction in WANDER

19
(2004) 1 SCC 347
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LIMITED (SUPRA) and M/S GUJARAT BOTTLING COMPANY

LTD. (SUPRA). Therefore, the view taken by the Division Bench
of this Court in COLGATE PALMOLIVE COMPANY (SUPRA) is
in consonance with the well settled legal proposition with regard
to the scope of an appeal and rightly holds that the decisions
rendered by Division Bench in HIRALAL PARBHUDAS
(SUPRA) and M/S. NATIONAL CHEMICALS AND COLOUR
CO. (SUPRA), which deal with the scope of appeal against an
order passed by the Registrar under the 1958 Act, have no
relevance while dealing with an appeal arising out of an order of
injunction.

(XIII) ANSWER TO REFERENCE:

31. For the aforementioned reasons, the questions referred to

us are answered as follows:

(i) The Division Bench decision of this Court in

COLGATE PALMOLIVE COMPANY (SUPRA) sets out the
correct principle of law. An order of temporary injunction
does not cease to be a discretionary order merely because
the learned motion Judge did not find any prima facie case
and refused to grant interim restraint order. It correctly
holds that in the matter of temporary injunction, the Court
does not adjudicate on the subject matter or any part of it
on merits and considers the application for temporary
injunction in the light of well-known principles and
exercises its discretion weighing all relevant consideration
without any expression of opinion on merits of the matter.
The Division Bench has rightly held that the decisions of
this Court in HIRALAL PARBHUDAS (SUPRA) and M/S.
NATIONAL CHEMICALS AND COLOUR CO. (SUPRA)
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have no relevance while deciding an appeal arising out of

an order of injunction.

(ii) The scope and ambit of an appeal from an order

passed by the trial Judge has already been delineated by
the Supreme Court in WANDER LTD. (SUPRA), SHYAM
SEL AND POWER LIMITED (SUPRA) and RAMAKANT
AMBALAL CHOKSI (SUPRA). In view of aforesaid
enunciation of law by Supreme Court, it is evident that the
appellate court will not interfere with exercise of discretion
of Court of first instance and substitute its own discretion
except where the discretion has been shown to have been
exercised arbitrarily or capriciously or perversely or where
the Court had ignored the settled principles of law
regulating grant or refusal of interlocutory injunctions. The
Appellate Court while deciding an appeal, has to examine
whether the discretion exercised is not arbitrary, capricious
or contrary to the principles of law and the appellate Court
may, in a given case, has to adjudicate on facts even in
such discretionary orders.

32. Accordingly, the reference is answered.

33. Let the appeal be listed for orders before the appropriate
Bench.

(CHIEF JUSTICE)

(M. S. KARNIK, J.)

(SHYAM C. CHANDAK,J.)

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