In the intricate landscape of intellectual property disputes, the intersection of civil and criminal law often presents complex challenges, particularly when allegations of trademark infringement escalate into accusations of criminal misconduct. The case of Arddy Engineering Innovations Pvt. Ltd. & Ors. v. Heraeus Technologies India Pvt. Ltd., adjudicated by the High Court at Calcutta, exemplifies this convergence. This criminal revisional application, decided on April 16, 2025, addresses the contentious issue of whether a criminal proceeding for cheating, forgery, and criminal conspiracy should be quashed when rooted in a terminated distributorship agreement and alleged trademark misuse.

Centered on the misuse of the trademark 'Hydris' for hydrogen sensors critical to railway safety, the case underscores the judiciary’s cautious approach to quashing criminal proceedings at a preliminary stage, emphasizing the need for trial to test serious allegations. The Calcutta High Court’s ruling reinforces the distinction between civil disputes and criminal offenses, offering significant insights for businesses navigating trademark enforcement in India.

Detailed Factual Background

• Heraeus Technologies India Pvt. Ltd., the complainant, owns proprietary trademarks and technologies, including the 'Hydris' hydrogen sensor approved by the Research Design and Standard Organization.
• Arddy Engineering Innovations Pvt. Ltd. entered into an International Exclusive Distributorship Agreement (IEDA) with Heraeus in 2002, which was terminated on October 24, 2013.
• Post-termination, Arddy allegedly developed a counterfeit 'Hysen' sensor affixed with the 'Hydris' trademark and supplied it to Indian Railways and others, compromising safety and deceiving customers.
• Heraeus claimed these acts constituted cheating under Section 415 IPC, forgery, and criminal conspiracy, despite an October 28, 2015, injunction from the District Judge of Sundergarh.
• Arddy argued the relationship was unblemished for 11 years and that the dispute was civil in nature, already pending in court, and the criminal case was a delayed harassment attempt.

Detailed Procedural Background

• Heraeus filed a criminal complaint (Case No. 743 of 2021) before the Judicial Magistrate, 4th Court, Barrackpore under multiple IPC sections including 420, 406, 461, 471, 120B, and 34.
• The Magistrate took cognizance on December 29, 2021, and issued process on January 4, 2022, based on witness examination.
• Arddy challenged this order, arguing non-compliance with Section 202 Cr.P.C.; the High Court ordered an inquiry, which verified the complaint.
• The Magistrate reissued process on November 14, 2022, prompting Arddy’s revisional application (CRR 4690 of 2022) and interim application (CRAN 2 of 2024) to quash proceedings.
• The matter was heard on January 29, 2025, and judgment delivered on April 16, 2025, by Hon’ble Dr. Justice Ajoy Kumar Mukherjee.

Issues Involved in the Case

• Whether the complaint disclosed prima facie offenses or was a civil dispute over contract breach?
• Whether the criminal complaint filed after six years was malicious and liable for quashing under Section 482 Cr.P.C?
• Whether Heraeus’s stands in civil and criminal proceedings were contradictory?
• Whether allegations against petitioners 2 and 3 were specific enough to implicate them personally?
• Whether the Magistrate applied judicial mind or issued process mechanically?

Detailed Submission of Parties

• Arddy contended no intent to cheat was established and the matter was purely civil, already litigated.
• The delay in criminal complaint filing suggested malice; cited State of Haryana v. Bhajan Lal for malicious prosecution.
• They argued contradiction in Heraeus’s civil and criminal claims, relying on All Cargo Movers and Mitesh Kumar J. Shah.
• For directors (petitioners 2 & 3), Arddy claimed no specific acts alleged, citing Sharad Kumar Sanghi and Maksud Saiyed.
• They claimed the Magistrate’s order lacked judicial application, referencing Mehmood Ul Rehman.
• Heraeus countered that Arddy deceptively used the 'Hydris' mark post-termination, supported by police verification.
• They distinguished the cases cited by Arddy and emphasized public safety concerns and the need for trial proceedings.

Detailed Discussion on Judgments Cited by Parties

• State of Haryana v. Bhajan Lal: Court found this inapplicable as Heraeus's complaint disclosed prima facie offenses.
• All Cargo Movers: Distinguished; both civil and criminal claims were consistent regarding unauthorized 'Hydris' use.
• Mitesh Kumar J. Shah: Found inapplicable; allegations involved criminal elements beyond contractual breach.
• Sharad Kumar Sanghi: Distinguished; specific allegations were made against directors in the complaint.
• Maksud Saiyed: Similarly distinguished due to individual roles being specified for the directors.
• Mehmood Ul Rehman: Court agreed with Heraeus that magisterial satisfaction was evident through reliance on inquiry report.

Law Settled in This Case
This case establishes several key principles in Indian criminal and intellectual property law. First, under Section 482 Cr.P.C., courts will not quash criminal proceedings when the complaint discloses prima facie offenses, such as cheating under Section 415 IPC, even if civil disputes coexist, per M. Krishnan v. Vijay Singh. Second, allegations of trademark misuse post-termination of a distributorship agreement can constitute criminal offenses like cheating, forgery, and conspiracy, warranting trial to test evidence.

Third, civil and criminal proceedings can proceed concurrently, as they involve distinct legal standards, and pending civil suits do not bar criminal action. Fourth, specific allegations against company directors negate claims of vicarious liability, per Sharad Kumar Sanghi, requiring individual roles to be detailed. Fifth, magisterial orders issuing process under Section 204 Cr.P.C. need not be elaborate, provided satisfaction is reflected, per Mehmood Ul Rehman, especially when supported by a Section 202 inquiry. Finally, untested defense documents are inadmissible under Section 482, limiting analysis to the complaint and inquiry reports, per State of Bihar v. P.P. Sharma.

Final Outcome: CRR 4690 of 2022 dismissed. Complaint proceeding in C. Case No. 743 of 2021 to continue. Trial court directed to expedite trial.

Case Title:Arddy Engineering Innovations Pvt. Ltd. Vs Heraeus Technologies Indian Pvt. Ltd.
Judge: Hon’ble Dr. Justice Ajoy Kumar Mukherjee
Court: High Court at Calcutta 
Case No.CRR 4690 of 2022
Date of Order: 16 April 2025
Name of Judge: Ajoy Kumar Mukherjee

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
Email: ajayamitabhsuman@gmail.com, Ph no: 9990389539