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November 5, 2024

Court Case Bulletin (CCB): High Courts Will Mandatorily Have To Stay The Suit If Either Party Files Rectification Petition

Author: Shreyak Patnaik

In the matter of Mr. Amrish Aggarwal Trading as Mahalaxmi Product v. M/s Venus Home Appliances Private Limited & Anr [2024:DHC:3911-DB], a Division Bench (Yashwant Varma, J and Ravinder Dudeja, J) of the High Court of Delhi, vide judgment dated May 17, 2024, held that the Court had to mandatorily stay the infringement suit if a party files rectification petition after pleading invalidity.

Section 124(2) of the Trade Marks Act, 1999 [“The Act”] states that in a suit for infringement, where invalidity of either party’s registration is pleaded and “if the party concerned proves to the court that he has made any such application as is referred to in clause (b) (ii) of sub-section (1)…the trial of the suit shall stand stayed until the final disposal of the rectification proceedings”. The question that arose was whether a filing of a rectification petition by one of the parties in the suit would ipso facto result in a stay of the suit proceeding.

The Petitioners argued that doing away with the requirement of stay was correct in law. They also submitted that the Delhi High Court, being vested with the discretion to consolidate proceeding under Intellectual Property Division Rules, obviated need for a stay in the suit proceeding.

The Respondents however submitted that a textual interpretation of Section 124 of The Act would lead to the inevitable conclusion that the abolition of the IPAB would not eliminate the need for a stay of suit proceedings. The Respondents further submitted that the same position of law was also already clarified by the Supreme Court previously. Members of the bar, upon Court’s invitation, also made similar submissions.

The Court reiterated that, “The provision clearly and categorically envisages stay of the suit pending disposal of the rectification proceedings, even where the rectification proceedings are to be instituted before the High Court.” Further adding that Section 124(2) ipso facto stays the suit, by legislative fiat, on a rectification petition being filed. There is no requirement of any orders being passed by the Court for the suit to be stayed. The stay of the suit is an inexorable legislative consequence to the filing of the rectification petition.

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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