Quashing of Non-Compoundable Offences in Trademark Disputes

Facts of the Case

The matter arose out of an FIR No. 460/2024 dated 21st October 2024, registered under Sections 103 and 104 of the Trade Marks Act, 1999 at Police Station Bara Hindu Rao, Delhi. The FIR was based on a complaint filed by BrandMonitor, acting on behalf of M/s. Gianni Versace S.R.L., a globally recognized luxury fashion brand having its registered office in Milan, Italy. The complaint alleged that certain entities operating within the North Delhi district were involved in the sale, storage, and advertisement of counterfeit goods bearing the trademarks of “Versace”. According to the complainant, these activities amounted to infringement of its registered trademarks and constituted offences under the Trade Marks Act, 1999.

After the FIR was lodged, investigation commenced against the accused persons, namely the petitioners in this case. During the course of time, the petitioners entered into negotiations with the complainant and ultimately reached an amicable settlement. Pursuant to this, M/s. Gianni Versace S.R.L. expressed that it no longer wished to pursue criminal proceedings against the accused. Each petitioner executed a separate settlement agreement with the complainant, agreeing to pay the agreed settlement amounts. The complainant, through its authorized representative, filed an affidavit and No Objection Certificate (NOC) before the Court, confirming that the disputes had been settled voluntarily and without any pressure or coercion.

Procedural Background

Following the settlement, the petitioners filed the present petition under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (corresponding to Section 482 of the Code of Criminal Procedure, 1973), seeking quashing of the FIR and all subsequent proceedings arising therefrom.

During the hearing, Mr. Vinay Choudhary, the authorized representative of Gianni Versace S.R.L., appeared in person and confirmed that the complainant had indeed settled the matter voluntarily, received the agreed sums, and did not wish to continue with the criminal case. The State, represented by its Additional Public Prosecutor, was also heard, and the Investigating Officer verified the presence and identity of the complainant’s representative.

The petitioners argued that since the matter had been resolved amicably and the complainant did not wish to proceed, continuing the criminal proceedings would serve no purpose and would merely result in wastage of judicial resources. The petitioners, therefore, sought quashing of the FIR on the basis of the settlement.

The Core Dispute

The central question before the Court was whether the FIR registered under Sections 103 and 104 of the Trade Marks Act, 1999 could be quashed in the exercise of inherent powers under Section 528 BNSS (Section 482 CrPC) when the offences were technically non-compoundable in nature but the parties had amicably settled the dispute.

The Court had to balance two competing considerations:

• That offences under the Trade Marks Act involve elements of public interest since they deal with counterfeiting and consumer deception.
• That continuation of proceedings after a bona fide settlement would be futile and contrary to the interests of justice.

Detailed Reasoning and Judicial Discussion

The Court acknowledged that offences under Sections 103 and 104 of the Trade Marks Act, 1999 are not compoundable under Section 320 CrPC. However, the High Court retains the inherent power to quash criminal proceedings under Section 528 BNSS (formerly Section 482 CrPC) in appropriate cases where the parties have reached a genuine settlement and the continuation of proceedings would serve no useful purpose.

Supreme Court Precedents Considered

The Court first referred to the decision of the Supreme Court in Gian Singh v. State of Punjab & Anr., (2012) 10 SCC 303, where it was held that even non-compoundable offences could be quashed by the High Court if the settlement between the parties was bona fide and the continuation of prosecution would be an exercise in futility. The Court emphasized that the objective of the criminal justice process is to secure justice and not to pursue proceedings mechanically when the complainant no longer wishes to continue.

The Court then relied upon Narinder Singh & Ors. v. State of Punjab & Anr., (2014) 6 SCC 466, where the Supreme Court elaborated guiding principles for quashing criminal proceedings on the basis of compromise. The Apex Court observed that while offences of a heinous or serious nature involving public morality or state interest should not be quashed merely due to a private settlement, criminal cases having a predominantly civil or commercial nature could be quashed to secure the ends of justice and prevent abuse of the process of law.

Justice Narula extracted the key principles from Narinder Singh, noting that the High Court must assess whether the possibility of conviction is remote and whether continuing the case would cause oppression and prejudice to the accused.

Application of Principles to the Present Case

Applying these principles, the Delhi High Court recognized that offences under the Trade Marks Act—though linked to public interest—often arise in a commercial context involving disputes between trademark proprietors and alleged infringers. In the present case, the complainant, a reputed international brand, had confirmed a voluntary and complete settlement, had accepted payment, and had expressed its desire not to continue with the criminal case.

Therefore, the Court reasoned that the likelihood of conviction was remote because the complainant, being the main prosecution witness, was no longer willing to support the charges. The continuation of such proceedings would thus not advance the cause of justice but instead burden the judicial system.

Court Observations

The Court emphasized that while offences under the Trade Marks Act protect public and consumer interest, the Court must also consider the practicality of prosecution in a situation where the aggrieved party has reconciled and withdrawn its complaint. Continuing a prosecution that has lost prosecutorial support would serve no real public purpose. Accordingly, the Court held that it was appropriate to exercise its inherent jurisdiction to quash the FIR and all proceedings emanating therefrom to secure the ends of justice.

However, the Court noted that since the state machinery had been set in motion through the registration of the FIR and subsequent investigation, it was appropriate to impose a nominal cost on the petitioners. Thus, the Court directed each petitioner to deposit Rs. 5,000/- with the Delhi Police Welfare Fund within four weeks.

Decision

The Delhi High Court allowed the petition and quashed FIR No. 460/2024 dated 21st October 2024, registered under Sections 103 and 104 of the Trade Marks Act, 1999 at Police Station Bara Hindu Rao, Delhi, along with all consequential proceedings. The Court found that the matter had been amicably resolved, the complainant had voluntarily withdrawn its grievance, and continuation of the criminal proceedings would only amount to misuse of judicial resources. The petitioners were directed to deposit the prescribed costs as a token responsibility toward the State machinery. The Court concluded by expecting the parties to adhere to the terms of their respective settlement agreements.

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