Balar Marketing Pvt. Ltd. v. Lakha Ram Sharma
CM(M)-IPD 5/2025, decided on March 27, 2025 / Delhi High Court, Hon’ble Justice Shri Amit Bansal
Doctrine of Precedent in Indian Legal System
The Indian legal system, like other common law jurisdictions, operates on the doctrine of precedent to ensure consistency and predictability in judicial decisions. At the core of this doctrine lies the distinction between ratio decidendi, the legal principle that forms the basis of a decision, and obiter dictum, statements made by judges that are incidental to the main issue and not essential to the outcome of the case. While the former holds the force of binding precedent, the latter carries no binding authority but may be persuasive in nature.
In practice, however, determining whether a particular statement made by a higher bench is ratio or obiter can be contentious. This dilemma becomes especially significant when Single Judges are tasked with interpreting statements made by Division Benches.
The Delhi High Court’s recent decision in Balar Marketing Pvt. Ltd. v. Lakha Ram Sharma sheds light on the question of whether a Single Judge is bound by an obiter dictum of a Division Bench of the same High Court. The case revolved around the application of Section 124 of the Trade Marks Act, 1999 in trademark infringement and passing off proceedings.
Factual Background and Procedural History
The dispute between Balar Marketing Pvt. Ltd. (the petitioner) and Lakha Ram Sharma, the proprietor of Kundan Cable India (the respondent), centered on the use of the trademark “KUNDAN” and its variants. Both parties operated in the electrical goods industry, and each claimed the exclusive right to the trademark based on prior adoption.
The petitioner asserted that its predecessor had adopted the mark in 1975. The respondent claimed earlier use, leading to multiple legal disputes filed between 1994 and 2006. These suits were consolidated over time.
In January 2025, the respondent sought a stay on all suits under Section 124 of the Trade Marks Act, citing pending rectification proceedings. The Trial Court granted the stay based on the Division Bench decision in Amrish Aggarwal v. Venus Home Appliances, 2024 SCC OnLine Del 3652.
Aggrieved, the petitioner filed a writ petition under Article 227 of the Constitution of India.
Core Legal Issue
The main issue was whether the Trial Court was justified in staying the suits under Section 124 based on observations in Amrish Aggarwal. The key question: Were those remarks obiter dictum or binding precedent?
Submissions by the Parties
Petitioner’s Argument: Paragraph 44 of Amrish Aggarwal was merely obiter dictum. The Division Bench in that case mainly dealt with infringement suits, not passing off. The petitioner relied on Puma Stationer Pvt. Ltd. v. Hindustan Pencils Ltd., 2010 (43) PTC 479 (Del.) (DB), which stated passing off suits are not stayed under Section 124.
Respondent’s Argument: Even obiter dicta from a Division Bench must be followed by a Single Judge to ensure judicial consistency. Cases cited: Naseemunisa Begum v. Shaikh Abdul Rehman, 2002 (2) Mah L.J. 115 and Crocs Inc. USA v. Aqualite India Ltd., 2019 SCC OnLine Del 11957.
Contextual Interpretation of Amrish Aggarwal
The Single Judge noted that the main issue in Amrish Aggarwal was the stay of infringement actions, not passing off. The mention of passing off in paragraph 44 was incidental and lacked reasoning. Therefore, it was deemed obiter dictum.
No Express Overruling of Puma Stationer
The Division Bench in Amrish Aggarwal did not overrule or even discuss Puma. Hence, Puma remained binding.
Application of Supreme Court Precedents
Cases cited by Justice Bansal:
- Mohinder Singh Gill v. Chief Election Commissioner, (1978) 1 SCC 405
- State of Orissa v. Sudhansu Sekhar Misra, AIR 1968 SC 647
- Gudri v. Ram Kishun, AIR 1984 All 100
These cases confirmed that only the ratio decidendi is binding; obiter dicta are not.
Lack of Legal Reasoning in Amrish Aggarwal
The Division Bench did not refer to key provisions like Section 27(2) of the Trade Marks Act. Nor did it address relevant case law. Hence, its remarks on passing off suits lacked authority.
Distinguishing Other Cited Cases
Cases like Naseemunisa Begum and Crocs Inc. involved central legal issues. The mention of passing off in Amrish Aggarwal was not similarly analyzed.
Final Decision and Clarified Legal Principle
The Trial Court misapplied Amrish Aggarwal. Paragraph 44 was obiter dictum. The Single Judge was not bound by it. The stay order dated January 18, 2025, was set aside. All pending suits were ordered to proceed to trial.
Author’s Comment: Doctrinal Clarity Needed
This decision reinforces that only ratio decidendi binds, not obiter dicta. It upholds common law rights like passing off and delimits Section 124’s scope.
However, conflict remains between Division Bench rulings in Puma and Amrish Aggarwal. The latter rejected Puma‘s reasoning, creating interpretive tension.
Past decisions like Abbott Healthcare Pvt. Ltd. v. Raj Kumar Prasad [2018:DHC:53] considered Puma itself as obiter. This led to contradictory judgments: Balar upheld Puma, while Abbott did not.
The conflict underscores the need for clarity. As per Christian Louboutin v. Abu Baker, 2019 (78) PTC 262 (Del) (DB), such matters require resolution by a Larger Bench. Until then, doctrinal inconsistency will persist.
Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman,IP Adjutor [Patent and Trademark Attorney] ,High Court of Delhi
