29/06/2024

1) Courts Can Delve Into Examination Of Trademark Infringement In Execution Petitions, New
Suit Not Needed: Delhi High Court
The Delhi High Court, under Justice Jasmeet Singh, permitted the execution of a petition against
the Defendants accused of trademark infringement against Glaxo Group Limited, a
biopharmaceutical company known for producing vaccines. The case originated from Glaxo's
lawsuit seeking a permanent injunction to stop the Defendants from using its registered
trademarks such as 'Zentel', 'Otrivin', and 'Ambirix'. The Defendants had employed similar marks
like 'Sontel', 'Etoriwin', and 'Aribrix', allegedly to exploit Glaxo's trademark suffix 'Rix'.

Following a decree in favor of Glaxo, which included terms for the destruction of products
bearing the disputed marks, the Defendants continued their infringing activities, prompting
Glaxo to file an execution petition. The Defendants argued that the court shouldn't delve into
infringement issues, citing a previous case that cautioned against preemptive injunctions without
specific instances of infringement being presented.
However, the High Court differentiated this case as an execution petition based on a settlement
endorsed by both parties, which resulted in a decree outlining specific restrictions on the
Defendants. Drawing from legal precedents like Essco Sanitations v. Mascot Industries, the High
Court affirmed its authority to examine whether the Defendants' products and packaging violated
the trademark decree. It concluded that the Defendants' use of 'Betnevin', resembling Glaxo's
'Betnesol', constituted infringement, thereby upholding Glaxo's petition and granting it liberty to
revive the case for any future infringements.
In essence, the High Court's decision reinforced its role in enforcing decrees without questioning
their validity, thereby safeguarding Glaxo's trademark rights against ongoing infringement.
2) Indian Courts Are Not Bound By Foreign Insolvency Judgments From Non-Reciprocating
Countries: Calcutta High Court
The Calcutta High Court, presided over by Justice Shampa Sarkar, ruled that Indian courts do not
automatically recognize or enforce moratorium orders from non-reciprocating countries like the
U.S., specifically in the absence of a comprehensive cross-border insolvency framework. This
decision was made in response to a case involving Uphealth Holdings and Dr. Syed Sabahat
Azim, where disputes arose over a Share Purchase Agreement containing an arbitration clause.
Uphealth had initiated an anti-arbitration suit in the Trial Court at Rajarhat, prompting Dr. Azim
to seek a stay of proceedings citing a bankruptcy proceeding in the U.S. The Trial Court denied
the stay, explaining that U.S. Bankruptcy Court orders do not apply in India without official
recognition under Indian law.

Dr. Azim filed applications under Section 151 of the CPC and Section 45 of the Arbitration Act,
seeking to refer the dispute to arbitration and stay the ongoing suit. The case was elevated to the
Calcutta High Court through a revision petition. In response, the High Court underscored that
Indian courts are not mandated to halt proceedings due to foreign legal actions unless reciprocal
arrangements exist. It emphasized that while the U.S. Bankruptcy Court's moratorium order
could be considered by the Trial Court, it was not legally binding in India without specific
legislative recognition.
The High Court acknowledged the significance of cross-border insolvency frameworks but noted
India's current lack of a comprehensive legal mechanism for such cases under the Insolvency and
Bankruptcy Code. It affirmed that only orders from reciprocating countries could be enforceable
under Section 44-A of the CPC.
Ultimately, the High Court dismissed the revision petition, indicating that while the U.S.
moratorium order could be a factor in the Trial Court's decision, it did not compel a stay of the
suit.
3) Credit Available On Advance Tax Paid For Stock-Transferred: Kerala High Court
The Kerala High Court, under Justice Gopinath P., ruled in favor of the petitioner in a case
involving the credit entitlement for tax paid under Circular No. 50/2006. The circular imposed
advance tax on evasion-prone items under the Kerala Value Added Tax Act, 2003. The
petitioner, engaged in importing and selling pincoda timber, had transferred goods to its branch
office in Pollachi. The tax paid on these transfers was subject to dispute regarding the extent of
credit allowed.
The High Court emphasized that the tax paid under Circular No. 50/2006, despite its advance
nature, cannot be categorized as input tax under Section 2(xxiii) of the KVAT Act, which defines
input tax for registered dealers. Section 13 of the KVAT Act deals with the refund of input tax in
specific scenarios like exports or interstate sales. The court found that the petitioner had not
engaged in taxable transactions but had only conducted stock transfers to its branch office.
Therefore, it concluded that the order restricting credit to amounts paid in excess of 4% of the
advance tax under Circular No. 50/2006 was legally untenable.
In toto, the Kerala High Court held that the petitioner is entitled to credit for the entire amount
paid under Circular No. 50/2006 for the goods transferred to its branch office in Pollachi,
rejecting the restriction imposed by the assessing authority as unjustified under the KVAT Act.
4) Tax Demand on Post Sale Discounts Received By Way Of Financial Credit Notes Not
Tenable: Madras High Court
The Madras High Court, under Justice Senthilkumar Ramamoorthy, overturned an order that
imposed tax demands based on post-sale discounts received through financial credit notes. The
court observed that the assessing officer's conclusion that receiving a discount constituted a
service provided by the purchaser to the supplier, thereby increasing the supplier's sales volume,
was fundamentally flawed and contrary to GST law.
The case involved the petitioner receiving a show-cause notice regarding the reversal of input tax
credit related to credit notes issued by the supplier. The petitioner contended that under Sub-
section (3) of Section 15 of the GST statutes, a discount should be excluded from the value of
supply only if specific conditions are met, which were not applicable in this instance. Therefore,
the petitioner argued that the credit notes issued were financial in nature, and there was no
obligation to reverse input tax credit. The High Court concluded that the order was erroneous in
directing the reversal of input tax credit concerning the value of credit notes issued by the
supplier. As a result, the court quashed the order to the extent of this defect, thereby ruling in
favour of the petitioner.
5) Assessment Order Passed Against Dead Person Is Nullity: Karnataka High Court
The Karnataka High Court, under Justice S. Sunil Dutt Yadav, nullified an assessment order
under Section 147 of the Income Tax Act, 1961, emphasizing that such an order issued after the
death of the assessee is invalid. The court ruled that when an assessee passes away during
ongoing proceedings, the assessment should continue through their legal representatives.
The case involved the legal representative challenging the validity of the assessment order,
computation sheet, and penalty order issued under Section 147 read with Section 144 of the
Income Tax Act. The petitioner also sought the unfreezing of accounts as consequential relief.
Section 159(2)(a) of the Income Tax Act outlines the procedure for assessing income and levying
sums on the legal representatives of a deceased assessee, continuing proceedings initiated before
the assessee's death. The court noted that the assessment order in question was issued
posthumously without involving the legal representative, rendering it null and void.
Consequently, the High Court allowed the appeal, quashing the bank account freeze order and
remanding the matter back to the stage following the notice issued under Section 148 of the
Income Tax Act.
6) No Explanation For Delay Of 4-5 Yrs In Filing FIR: Rajasthan High Court Grants Bail To
Rape Accused
The Rajasthan High Court, presided over by Justice Kuldeep Mathur, granted bail to an accused
who was charged under the Indian Penal Code (IPC) and the SC/ST (Prevention of Atrocity)
Amendment Act 2015 in a case involving alleged rape. The accused had filed an appeal
challenging the rejection of his bail application by a special judge under the SC/ST Act.
During the proceedings, it was argued on behalf of the accused that the FIR and the prosecutrix's
initial statement to the police did not mention any allegations of sexual assault or rape against
him. It was contended that these accusations were later introduced to fabricate a false case. The
prosecutrix stated in her statement to the magistrate that the accused had sexually assaulted her
4-5 years prior to the filing of the FIR. The court noted that no plausible explanation was
provided by the prosecutrix for the delay in filing the FIR after such a significant period of time.
Additionally, the court took into consideration the fact that there were over 980 phone calls
exchanged between the prosecutrix and the accused on various dates, suggesting ongoing contact
between them. Based on these observations and considering the statements recorded under
Section 164 of the Criminal Procedure Code (Cr.P.C.), the court concluded that there was no
satisfactory explanation from the prosecutrix for the delay in lodging the FIR and that the initial
allegations of sexual assault were not present in the FIR or initial police statement.
Therefore, the Rajasthan High Court allowed the bail application of the accused, highlighting the
absence of a reasonable explanation for the delay in filing the FIR and the circumstances
surrounding the case.
7) Depriving Spouse Of Being On Facebook, Instagram; Damaging Partner's Reputation/ Social
Standing May Amount To Cruelty: Telangana HC
The Telangana High Court, in a recent ruling, expanded the definition of "cruelty" within the
context of marriage to include acts that damage the reputation, social standing, or work prospects
of one spouse by the other. The bench comprising Justice Moushumi Bhattacharya and Justice
M.G. Priyadarshini made these observations while allowing a husband's appeal for divorce under
the Hindu Marriage Act.
The court emphasized that depriving a spouse of using social media platforms like Facebook and
Instagram could also amount to cruelty in modern contexts. It underscored that marriage cannot
be enforced upon individuals, and the court should not act as a hangman or counselor to compel
parties to remain in a loveless marriage. Highlighting the limited role of the court in marital
disputes, the bench stressed that mental cruelty cannot be narrowly defined and varies based on
individual perceptions. It asserted that irreconcilable differences between spouses should suffice
as grounds for granting divorce, rather than engaging in futile exercises to preserve a crumbling
marriage.
The case involved a couple married in 2010, with severe discord emerging shortly after. The
wife left the matrimonial home in 2011 and subsequently filed multiple criminal cases, including
allegations of cruelty and dowry harassment against her husband. Despite brief reunions, the
disputes persisted, leading the husband to seek divorce, which was initially denied by the trial
court in 2021. In overturning the trial court's decision, the Telangana High Court found that the
wife's actions, including repeatedly filing criminal cases, constituted mental cruelty and
irreversibly damaged the marriage. The court emphasized that such conduct undermined the
foundation of trust and respect necessary for marital harmony, thereby justifying the grant of
divorce.
In conclusion, the High Court's decision underscored the evolving understanding of cruelty in
marital law, acknowledging societal changes and individual rights while affirming the
dissolution of a marriage where fundamental trust and compatibility have irreparably broken
down.