[This post has been authored by SpicyIP Intern Kaustubh Chakrabarti. Kaustubh is a second year BA.LLB. (Hons.) student at Hidayatullah National Law University, Raipur.]
There has been a recent development in the Marico v. Alpino case (see “here” for Lokesh’s post on this). After the Delhi High Court granted an ex parte injunction to Marico, Alpino now seeks the vacation of the ex-parte ad order. It alleges that Marico has suppressed material facts from the Court and consequently the Court was misled into granting the injunction order, without allowing Alpino an opportunity to be heard. The Court, on December 13, issued a notice to Marico, which was duly accepted and a time period of four weeks has been allowed to file a reply. The next hearing is scheduled for January 30. Interestingly, the order does not state what these material facts were that were suppressed by Marico.
To put it into context, let me briefly state the background of the case. The plaintiff, Marico Ltd., is in the business of selling oats under the name “Saffola Oats” and is the market leader as it currently has a 45% market share. The defendant, Alpino Health Foods Pvt. Ltd., had launched an outlandish advertisement campaign allegedly targeting oats as a category of food to promote its own product “Alphine Super Oats”. Marico sought an interim injunction against Alpino from running the ad campaign and contended that it is a case of ‘generic disparagement’ as any campaign being run against oats would also directly harm the trade of Marico. The Delhi High Court had accepted this reasoning and granted the injunction.
The immediate implication of the argument that is taken by Alpino is that the burden of proof will be on it to prove that Marico had suppressed material facts. In the context of interim injunction cases, we have seen this defence of “Clean Hands Doctrine” as the go-to remedy for the defendants to vacate the interim injunction order previously. According to this doctrine, any person who is approaching the court for a remedy must come with clean hands, i.e., the person should put forward the circumstances with truthfulness and should not jeopardize the position of the defendant by fabricating facts or wilfully suppressing material facts. In the past Courts have not only set aside the incorrectly granted interim injunction orders but can also impose hefty damages on the plaintiff. Interested readers can read posts on this doctrine here.
On principle this has been recognized as early as 1917 in the judicial decision of King v. The General Commissioners for the Purposes of the Income Tax Acts for the District of Kensington where the King’s Bench Division of the UK High Court refused a writ of prohibition without going into the merits because of suppression of material facts by the applicant.
The legal position in India is also the same in cases from the 20th century. In Udai Chand v. Shankar Lal, (1978) the Supreme Court revoked the order granting special leave and held that there was a misstatement of material fact which amounted to serious misrepresentation. In, S.P. Chengalvaraya Naidu v. Jagannath, the Supreme Court observed “A litigant, who approaches the court, is bound to produce all the documents executed by him which are relevant to the litigation. If he withholds a vital document in order to gain advantage on the other side then he would be guilty of playing fraud on the court as well as on the opposite party.”
The Delhi High Court too, in Seemax Construction (P) Ltd. vs State Bank of India (1991) had upheld this view and said “The suppression of material fact by itself is a sufficient ground to decline the discretionary relief of injunction. A party seeking discretionary relief has to approach the court with clean hands and is required to disclose all material facts which may, one way or the other, affect the decision.”
Thus, the judiciary, on many occasions, has recognized that whenever the plaintiff seeks an ex parte injunction, there is an obligation on him to full and frank disclosure of all relevant material facts to the court, even if they may not be favorable to the plaintiff’s case. This can be seen as a facet of the doctrine of uberrima fides or utmost good faith. Thus, if Alpino can prove that the plaintiff wilfully suppressed material facts or misled the Court, the injunction order may be set aside or vacated. Or can this nudge the plaintiff to negotiate the dispute and settle it out of the Court? It remains to be seen how the case unfolds in the subsequent hearings.