What are the circumstances where additional documents can be taken on record even at the Appellate stage? This is always important aspect of procedural law. The another important aspect in Trademarks matters is that in case the Defendant adopts a Trademark dishonestly, whether the Defense of acquiescence is available to him or not?

Both issues have been dealt with by the Nagpur Bench, Hon'ble High Court of Mumbai in its Judgement dated 06.05.2022 passed in the Appeal bearing No. Appeal against order No.14 of 2021 titled as Mysore Deep Perfumery Household Vs Sunilkumar Amrutlal Jain.

The Plaintiff/Appellant namely Deep Perfumery Household filed the subject matter Suit on the basis of proprietary rights in Trade Marks including trade mark "Zed Black". The appellant also asserted to have been using trade mark "Shriphal" in respect of Agarbati, Scent, Perfume, Camphor, Dhoop, etc. falling in Class-3 since 1992.

It is claimed by the Appellant that even at the earlier occasion , the Respondent/Defendant have been purchasing the subject matter product under the trademark Shriphal singh the year 1994. At the earlier occassion also the Appellant came across impugned infringing activities of the Respondent under the trade mark Shriphal, abd accordingly even legal notice was issued. At the earlier occasion, In reply, the Respondent admitted the proprietary rights of the Appellant. But still indulged in the impugned activities, hence the suit was filed.

The Ld. Trial Court observed Appellant to be prior adopter, prior user of the subject matter trademark. Hence there was prima facie finding in favour of the Appellant, however injunction was declined on the ground of acquiescence. Hence the subject matter Appeal was filed by the Appellant.

In Appeal, the Respondent took plea of acquiescence on the ground that the same has been supplying the goods under the Brand name "Shriphal" to one legal entity namely "Aastha Sales", allegedly the sister firm of Appellant , for almost 14 years, even after cease and desist notice.

In order to rebut the said argument of the Respondent, the Appellant was desirous of putting on record some additional documents under Order 41 Rule 27 CPC. The Hon'ble High Court Mumbai, after relying upon Judgements namely Sanjay Kumar Singh ors. The State of Jharkhand, 2022 Live Law (SC) 268, A. Andisamy Chettiar v. A. Subburaj Chettiar, reported in (2015) 17 SCC 713,Union of India Vrs. Ibrahim Uddin and another, reported in (2012) 8 SCC 148 etc was pleased to take on record the additional documents under Order XLI Rule 27 of the Code in as much as these documents have a direct bearing on the case of parties apart from furthering the cause of justice. The relevant portion of the Judgement relied upon by the Court titled as Sanjay Kumar Singh Vs. The State of Jharkhand is as under:

“4 It is true that the general principle is that the appellate court should not travel outside the record of the lower court and cannot take any evidence in appeal. However, as an exception, Order 41 Rule 27 CPC enables the appellate court to take additional evidence in exceptional circumstances.

It may also be true that the appellate court may permit additional evidence if the conditions laid down in this Rule are found to exist and the parties are not entitled, as of right, to the admission of such evidence.

However, at the same time, where the additional evidence sought to be adduced removes the cloud of doubt over the case and the evidence has a direct and important bearing on the main issue in the suit and interest of justice clearly renders it imperative that it may be allowed to be permitted on record, such application may be allowed.

Even, one of the circumstances in which the production of additional evidence under Order 41 Rule 27 CPC by the appellate court is to be considered is, whether or not the appellate court requires the additional evidence so as to enable it to pronouncement judgment or for any other substantial cause of like nature.

As observed and held by this Court in the case of A. Andisamy Chettiar v. A. Subburaj Chettiar, reported in (2015) 17 SCC 713, the admissibility of additional evidence does not depend upon the relevancy to the issue on hand, or on the fact, whether the applicant had an opportunity for adducing such evidence at an earlier stage or not, but it depends upon whether or not the appellate court requires the evidence sought to be adduced to enable it to pronounce judgment or for any other substantial cause.

It is further observed that the true test, therefore is, whether the appellate court is able to pronounce judgment on the materials before it without taking into consideration the additional evidence sought to be adduced.”

In fact those additional documents sought to be taken on record were coming from Astha Sales, which were relevant to rebut the argument of the Respondent regarding acquiescence. In such a situation, the Hon'ble Court deemed fit to take on record the additional documents.

The argument of acquiescence was also declined by the Court on the ground that this plea of Respondent was based on the ground that the same has been supplying impugned goods under the impugned Trademark to Astha Sales , the alleged sister concern of the Plaintiff.

But the additional documents put on record by the Appellant established that Astha Sales never procured impugned goods from Respondents. The alleged invoices pertaining to Ashtha Sales , filed by the Respondent , were also refuted by Astha Sales , terming them as forged and fabricated. Astha Sales also asserted that the same is not a sister concern of Appellant.

In such a situation there was no any question of any positive encouragement on the part of the Appellant. While rejecting the argument of Respondent regarding acquiescence, the Hon'ble High Court relied upon the ratio of Judgement reported as Power Control Appliances and others Vrs. Sumeet Machines Pvt. Ltd. (1994) 2 SCC 448, which is as under:

“26.Acquiescence is sitting by, when another is invading the rights and spending money on it. It is a course of conduct inconsistent with the claim for exclusive rights in a trade mark, trade name etc. It implies positive acts; not merely silence or inaction such as is involved in laches.

In Harcourt v. White [(1860)28 Beav 303] Sr. John Romilly said:
It is important to distinguish mere negligence and acquiescence. Therefore, acquiescence is one facet of delay. If the plaintiff stood by knowingly and let the defendants build up an

Important trade until it had become necessary to crush it, then the plaintiffs would be stopped by their acquiescence.

If the acquiescence in the infringement amounts to consent, it will be a complete defence as was laid down in Mouson (J. G.) & Co. v. Boehm [(1884) 26 Ch D 406]". The acquiescence must be such as to lead to the inference of a licence sufficient to create a new right in the defendant as was laid down in Rodgers v. Nowill [22 lj kch 404].”

Keeping in the view that there was no positive encouragement on the part of Appellant . That the Appellant was the prior adoptor and prior user of the subject matter Trademark. That the Respondent's adoption being dishonest and that the Respondent was agent of the Appellant, the plea of acquiescence was also rejected. This is how the Trial Court order was set aside and Appeal was allowed.

The above Judgment throws light on the aspect of taking on record the additional documents at the appellate stage and the other aspect of availability of plea of acquiescence to the Defendant Versus dishonest adoption.

In case the documents sought to be taken on record at the appellate stage under Order 41 Rule 27 CPC, if court fits relevant for adjudicating the lis between the parties, then court can on record the additional documents even at appellate stage.

In order to plea of acquiescence to succeed , the defendant has to establish positive encouragement on the part of the Plaintiff. Mere inaction on the part of plaintiff is not sufficient for plea of acquiescence to succeed.

More over , if court reaches in this conclusion that defendant is the dishonest adoptor, as in the present case , the same can not take advantage of plea of acquiescence. This Judgement will certainly discourage those agents/ex-emoliyees/licencees, who try to misappropriate the hard earned goodwill of the Plaintiff by taking a sham plea of acquiescence.

Written By: Ajay Amitabh Suman, Advocate, Hon'ble High Court of Delhi
Email: [email protected], Mob: 9990389539