Order Deleting Contractor from Defendant List Set Aside; Case Sent Back for Fresh Adjudication
In a significant ruling, the Madhya Pradesh High Court, Jabalpur Bench, has set aside a Commercial Court order in a high-stakes trademark infringement case involving Jindal Steel and Power Limited. The bench, comprising Acting Chief Justice Vivek Rusia and Justice Pradeep Mittal, remanded the matter back to the Commercial Court for fresh adjudication, emphasizing due process and fair trial principles.
The case emerged from allegations by Jindal Steel and Power Limited, a leading steel manufacturer, against JP Structures Private Limited, a contractor accused of using counterfeit TMT rebars bearing the "JINDAL TMT" mark. These were allegedly used in a government project for the Medical College at Budhni, Madhya Pradesh, despite the contract specifying only approved brands like "JINDAL PANTHER."
The controversy centers around an order passed by the Commercial Court, which had accepted an application by JP Structures under Order I Rule 10 of the Civil Procedure Code, 1908. The order had deleted JP Structures from the list of defendants, citing them as a bona fide purchaser. This decision was challenged by Jindal Steel, arguing that JP Structures played an active role in procuring and using the counterfeit products.
The High Court found that the Commercial Court erred in its decision-making process by not issuing notices to the proposed defendants—suppliers named by JP Structures—before deciding on the application for deletion. The High Court emphasized that the failure to issue such notices rendered the order unsustainable, as it denied the proposed defendants the opportunity to oppose their impleadment.
Jindal Steel had raised allegations of trademark infringement and passing off under Sections 29, 30, and 135 of the Trade Marks Act, 1999, against JP Structures. They contended that the contractor knowingly used counterfeit products, causing financial and reputational damage to Jindal Steel. In response, JP Structures claimed protection as a bona fide purchaser, asserting reliance on assurances from their suppliers about the authenticity of the TMT bars.
The High Court highlighted that determinations about bona fide purchaser status and liability for trademark infringement should occur after a thorough trial and appreciation of evidence, rather than at a preliminary stage. The bench directed the parties to appear before the Commercial Court on August 1, 2026, for a fresh hearing where all parties, including the newly proposed defendants, can present their cases.
This decision underscores the judiciary's commitment to ensuring fair trial rights and proper procedural conduct in commercial disputes, particularly those involving allegations of trademark infringement and passing off.
Bottom line:-
Order I Rule 10 CPC - Application for deletion of a party from the array of defendants - Application unsustainable if notices are not issued to proposed defendants who are sought to be impleaded - Matter remanded back to the Commercial Court for fresh adjudication.
Statutory provision(s):
Order I Rule 10 CPC, Trade Marks Act, 1999 Sections 29, 30, 135, Constitution of India, 1950 Article 227
