The Delhi High Court vide order dated 12th December, 2018 sentenced the Director of a company to fifteen days civil imprisonment for non-compliance of the injunction order. The dispute between the parties was over the mark CITI. The Plaintiff, Citi Group Inc. and Ors (Citi) filed suit against the Defendants, Citicorp Business and Financial Services Pvt. Ltd (CBFS) before the Delhi High Court alleging trademark infringement, passing off and unfair competition.
Citi claimed it is the registered proprietor of the trademarks CITI, CITICORP and other CITI formative marks for financial services, mutual fund and insurance, finance consulting etc. Citi alleged CBFS use of the marks Citicorp and Citi as essential and prominent part of their corporate names, Citi Corp Business & Finance Pvt Ltd and Citi Enterprises & Traders and also operating a website www.citicorpbiz.com amounts to trademark infringement and passing off.
The Single Judge of the Delhi High Court after considering the facts and pleadings granted an ex-parte injunction in favour of Citi which was subsequently confirmed in November, 2014, after hearing the parties. The Court granted six months’ time to CBFS to change the name/trade mark "CITICORP" to some other name, not identical or deceptively similar to "CITICORP/CITI". The court disposed of the injunction application observing that in case of violation Citi was at liberty to revive the same in which case stern action will be initiated against CBFS.
Non-compliance of the injunction order
Aggrieved by the non-compliance of the injunction order Citi in November, 2017, again approached the court. The court directed the personal presence of the Director of CBFS. The Director on appearance before the Court stated that he was unaware of the injunction order which was rejected by the Court considering the regular representation by counsels for CBFS and the hotly contested nature of the proceedings. The Court then ordered attachment of the bank accounts of CBFS and granted a months’ time for compliance. The Judge also recorded that non-compliance would result in the Director being taken into custody. CBFS filed an appeal before the Division Bench (DB) challenging the Single Judge’s order. However, the DB dismissed the appeal as not maintainable taking into account that CBFS had made several assurances before the Single Judge regarding compliance of the injunction order but failed to comply. As CBFS failed to comply with the directions the Court issued bailable warrant to its Directors. The Directors on appearance informed the details of another bank account operated by them which was not disclosed earlier. They also stated that the Registrar of Companies refused to entertain their request for change of company name. However, the Court on verification of records noted that the statements made before Court and the affidavits filed were not true.
The Court after considering the facts directed the Registrar of Companies to strike off the name of CBFS from their records. The Judge also directed attachment of the bank accounts of CBFS and transfer of the domain www.citicorpbiz.com to Citi.
The court noted:
a) Despite repeated assurances given by the Director by way of oral statements and affidavits before the Court there was wilful non-compliance on their part which amounts to gross contempt of court. CBFS failed to fully comply with the injunction order even in the year 2018.
b) The Director was not only misrepresenting facts but also causing obstacles in implementing the judicial orders. The Court accordingly sentenced one of the Directors to fifteen days civil imprisonment in Delhi’s Tihar jail. The other Director was let off with a warning considering the statement that she was a housewife and had no role in the day to day affairs of the company.