Court Vacates Injunction Due to Suppression of Material Facts by Celagenex Research, Emphasizing the Need for Full Disclosure in Legal Proceedings
In a significant decision, the Delhi High Court has vacated an ex-parte ad-interim injunction against Nugenesys Pharmaceuticals Pvt. Ltd., which was initially obtained by Celagenex Research (India) Pvt. Ltd. The court found that Celagenex had failed to disclose crucial facts, including prior notices and objections related to the disputed trademark, to the court. This judgment underscores the imperative for plaintiffs to provide full and honest disclosure when seeking equitable relief.
The dispute arose when Celagenex, engaged in the sale of nutraceutical products, accused Nugenesys of infringing its trademark 'NUREWIRE' by using a similar mark, 'RewireX'. Celagenex had previously issued a cease-and-desist notice and filed objections against Nugenesys' trademark application, facts that were not revealed in the suit filed by Celagenex. The failure to disclose these facts led to the granting of an ex-parte injunction by a single judge, which Nugenesys appealed.
The Division Bench comprising Justices V. Kameswar Rao and Manmeet Pritam Singh Arora found that the non-disclosure was not a mere oversight but a deliberate act to mislead the court into granting an injunction by creating a false sense of urgency. The court emphasized that equitable relief, especially when sought ex-parte, demands utmost candor and full disclosure of all material facts.
The Bench also noted a troubling pattern of non-disclosure by the same counsel across multiple suits, indicating an attempt to manipulate judicial processes. In response, the court imposed costs of Rs. 2,00,000 on Celagenex, payable to the Delhi High Court Legal Services Committee, and instructed the release of products seized under the injunction.
This judgment reinforces the judiciary's commitment to maintaining the integrity of judicial processes and serves as a cautionary tale for litigants and legal professionals to adhere strictly to the principles of full disclosure and good faith.
Bottom Line :
Ex-parte ad-interim injunction obtained through suppression of material facts can be vacated, and the interim application dismissed. Plaintiffs must disclose all relevant facts and documents with utmost candour while seeking equitable relief.
Statutory provision(s): Commercial Courts Act, 2015 Section 13(1A), Civil Procedure Code, 1908 Order XXXIX Rule 3, Trademark infringement principles
