A CONSENT DECREE CANNOT BE MODIFIED/ ALTERED UNLESS THE MISTAKE IS A PATENT OR OBVIOUS MISTAKE: SC

Cause Title: Ajanta LLP v. Casio Keisanki Kabushiki Kaisha d/b/a Casio Computer Co. Ltd. and Another

Case Number: Civil Appeal No: 1052/ 2022 (Arising Out of SLP (Civil) No: 9496/ 2020

Judgment Date: 04/02/2022

Quorum: Justice L. Nageswara Rao and Justice B. R. Gavai

Counsel for Appellant: Mr. K. V. Viswanathan

Counsel for Respondents: Dr. Abhishek Manu Singhvi and Mr. Chander Lal

Author: Pragash B, Advocate, Madurai Bench of Madras High Court

Background of the Case

According to the Plaintiff, the Defendant lifted each and every novel element of the original design, shape and configuration for its scientific/ electronic calculator ‘ORPAT FX-991ES PLUS’. The Respondent applied for a design registration for its electronic calculator namely ‘ CASIO FX-991ES PLUS’ and it was introduced in India in October 2011. Having knowledge about the sale of the scientific calculator by the Appellant under the name ‘ORPAT FX-991ES’, the Respondent filed a suit against the Appellant for the following reliefs:

A. The Defendants, their directors, agents, sellers, retailers, distributors, suppliers, franchisees, representatives, employees, affiliates and assigns be restrained by a permanent injunction from manufacturing, importing, marketing, advertising, promoting, offering for sale, selling, exporting and/ or using the impugned product …. for itself or in combination with any other design(s); and/ or other articles/ good/ products bearing the impugned design or any other design which is identical to or is a fraudulent imitation of Plaintiff’s Registered Designs, so as to commit piracy of the Plaintiff’s Registered Design Nos. 21483 and 214282.

B. ….be directed by a decree of mandatory injunction directing that they at their own expense

i) Recall all the impugned products and/ or any marketing, promotional and advertising materials that bear or incorporate the impugned design or any other articles/ goods/ products which bears a design which is a fraudulent or an imitation of the Plaintiff’s Registered Designs, which has been manufactured and/ or sold, distributed, displayed or advertised or promoted in the market, including on online retail/ e-commerce websites.

ii) Deliver to the Plaintiff for destruction all the materials including impugned products and/ or any marketing, promotional and advertising materials that bear or incorporate the impugned design or any other articles/ goods/ products which bears a design which is a fraudulent or an imitation of the Plaintiff’s Registered Designs.

iii) Make full and fair disclosure to the Plaintiff any design application or registration for the impugned design and/ or any other design which is a fraudulent or an imitation of the Plaintiff’s Registered Designs, and withdraw such applications and/ or surrender such applications and/ or surrender such registrations under imitation to the Plaintiff.

iv) Make a full and fair disclosure to the Plaintiff of full details such as names and addresses of the party(s) involved in the manufacturing, marketing, distributing and selling the impugned products.

C. The Defendant be called upon to allow inspection of their accounts to assist in ascertaining the amount of profits made by them and/ or damages including exemplary and penal damages suffered by the Plaintiff on account of the Defendant’s offending activities and a decree is passed in favour of the Plaintiff and against the Defendant for the amount found due.

D. Cost of the suit be awarded to the Plaintiff; and

E. Any other relief which this Hon’ble Court thinks fit and proper in the circumstances of the case is allowed in favour of the Plaintiff and against the Defendant.

The High Court of Delhi passed an ex-parte ad-interim order of stay on 28.11.2018 and then the parties were referred to mediation by the Hon’ble Court on 18.12.2018. A settlement was arrived at vide a Settlement Agreement dated 16.05.2019. The High Court decreed the suit on 03.07.2019 in terms of the Settlement Agreement. Subsequently, an application was filed by the Appellant under Sections 152 and 153 read with Section 151 of the Civil Procedure Code, 1908 for correction/ rectification/ amendment of the judgment dated 03.07.2019. The Appellant stated in the said application that the Settlement Agreement pertains only to trademark “FX-991ES PLUS’/ ‘FX-991” and there is a typographical error in the Settlement Agreement as “FX-991ES PLUS/ FX/ 991”. The High Court dismissed the Application and hence the appeal lies before the Honourable Supreme Court of India.

Findings of the Court.

On 14.05.2019, a final draft of the Settlement Agreement from the Respondents’ side was communicated to the advocate for the Appellant in which it was categorically stated that the Appellant undertakes not to adopt/ manufacture/ sell/ offer/ advertise/ promote/ use in any manner, any goods incorporating the Design of the Respondent of ‘FX-991ES PLUS’ bearing Nos. 214283 and 214282 dated 16.01.2008 in Class 18-01 and/ or the trade mark ‘FX-991ES PLUS’/ ‘FX’/ ‘991’ and/ or its packaging or any other identically, deceptively and/ or confusingly similar packaging to that of the Respondents’ packaging. In response, an e-mail was sent by the advocate of the appellant enclosing the mediations terms in the same terms as proposed by the advocate for the Respondents in his e-mail dated 14.05.2019. Finally, the Settlement Agreement was executed between the parties on 16.05.2019.

Though, there were alterations that were proposed by the advocate for the appellant during the course of correspondence, no objection was raised to the proposed terms of the Settlement Agreement communicated by the Advocate for the Respondent on 14.05.2019 which ultimately was the final settlement Agreement signed by the parties. (Para 10)

The Honourable Court referred to Byram Peston Gariwala Case and has observed that

“A judgment by consent is intended to stop litigation between the parties just as much as a judgment resulting from a decision of the Court at the end of a long drawn-out fight. A compromise decree creates an estoppel by judgment……

A Consent decree would not serve as an estoppel, where the compromise was vitiated by fraud, misrepresentation, or mistake. The Court in exercise of its inherent power may rectify the consent decree to ensure that it is free from clerical or arithmetical errors so as to bring it in conformity with the terms of the compromise. Undoubtedly, the Court can entertain an Application under Section 151 of the CPC for alterations/ modification of the consent decree if the same is vitiated by fraud, misrepresentation, or misunderstanding….. (Para 13)

………The misunderstanding as projected by the learned Senior Counsel for the Appellant between parties relates to use of “FX” or “991” as separate marks in the Settlement Agreement. The understanding between the parties was with respect to “FX-991ES PLUS” as a whole and not with reference to “FX”. A close scrutiny of the correspondence between the parties would show that the settlement Agreement was arrived at after detailed consultation and deliberations. (Para 13)

……..There is no allegation either of fraud or misrepresentation on the part of the Respondent. We are unable to agree with the Appellant that there was a mistake committed while entering into a settlement agreement due to misunderstanding. Correspondence between the advocates for the parties who are experts in law would show that there is no ambiguity or lack of clarity giving rise to any misunderstanding. Even assuming there is a mistake, a consent decree cannot be modified/ altered unless the mistake is patent or obvious mistake. Or else, there is a danger of every consent decree being sought to be altered on the ground of mistake/ misunderstanding by a party to the consent decree. (Para 13)

For the foregoing reasons, we uphold the judgment of the High Court and dismiss the Appeal.

To view/Download Judgment: Ajanta LLP v. Casio Keisanki Kabushiki Kaisha d/b/a Casio Computer Co. Ltd. and Another

Case Referred

1. Shankar Sitaram Sontakke and Another v. Balkrishna Sitaram Sontakke and Others, AIR 1954 SC 352.

2. Byram Pestonji Gariwala v. Union Bank of India and Others, (1992) 1 SCC 31.

3. Compack Enterprises India Pvt. Ltd. v. Beant Singh, (2021) 3 SCC 702.

4. Sourendra Nath Mitra and Others v. Srimati Tarubala Dasi, AIR 1930 PC 158.

5. Banwari Lal v. Chando Devi (SMt.) (through LRs.) and Another, (1993) 1 SCC 581.