Federated Hermes Ltd v. John Doe & Ors.

10. The defendant no.2 is WhatsApp LLC, a company providing instant messaging and social networking services through its popular platform, WhatsApp. The platform permits users to register with minimal identification requirements, such as a phone number and name, without requiring proof of identity or KYC documentation. The defendant no.1 uses the anonymity and privacy features afforded by WhatsApp to conduct its fraudulent activities while concealing its identity from the plaintiff, the public, and the victims of the fraud.

11. The defendant no.3 [Ministry of Electronics and Information Technology] and the defendant no.4 [Department of Telecommunications] are branches of the Union of India, tasked with the control, governance, and regulation of the country’s information technology and telecommunications infrastructure.

12. The defendant no.5 [Bharti Airtel Limited] and the defendant no.6 [Vodafone Idea Limited] are telecommunication network providers engaged in providing cellular SIM cards and connectivity services. These services are utilized by the phone numbers linked to defendant no.1’s fraudulent and infringing activities, facilitating the execution of their unlawful schemes.

13. The defendant no.7 [Saraswat Co-operative Bank Ltd.] is a banking institution that maintains one or more bank accounts used by the defendant no.1 to collect funds from victims of its fraudulent impersonation and misrepresentation schemes. Through these accounts, the defendant no.1 has defrauded unsuspecting individuals in the guise of offering legitimate investment and stock trading services associated with Federated Hermes.

14. On 1st March 2024, the plaintiff received an email communication from an individual informing the plaintiff about the existence of a WhatsApp group named “Federated Hermes – VIP 02,” engaged in stock trading on the National Stock Exchange (NSE)/ Bombay Stock Exchange (BSE). The email stated that the group could be accessed via a link shared on another social media platform and included screenshots that suggested the purported involvement of Mr. Pankaj Tibrewal. The said email is filed as document 9 in the documents filed by the plaintiff

15. It is stated that initially the plaintiff did not have access to the social media link referenced in the aforementioned email and was unable to independently verify the claims made therein, therefore, the plaintiff commenced monitoring social media platforms for potential leads. Around late March and early April 2024, the plaintiff identified multiple posts on the social media platform Twitter, authored by Mr. Tibrewal which show the blatant misuse of the plaintiff’s trademarks, including the name “FEDERATED HERMES” and its logo “ ” by the defendant no.1. These posts show that the defendant no.1 not only impersonated Mr. Tibrewal but also misrepresented an association with the plaintiff. Furthermore, defendant no.1 fabricated and distributed forged marketing materials incorporating the plaintiff’s logo, with the intent to mislead even seasoned investors and defraud them by creating an illusion of legitimacy.

16. On 15th April, 2024, the plaintiff received another email from an Indian investor expressing suspicion over fraudulent activities allegedly involving Mr. Tibrewal and the plaintiff. The email detailed the inducement of individuals to open “VIP trading accounts” purportedly associated with the plaintiff for trading on the NSE stock market. A subsequent email, dated 16th April, 2024, similarly sought verification of WhatsApp groups operating under the plaintiff’s name and promoting the opening of VIP trading accounts. The said emails are filed as documents 10 and 11 in the documents filed by the plaintiff.

17. On 17th April, 2024, the plaintiff received an email raising concerns about WhatsApp-based operations that falsely declared the plaintiff as registered with SEBI and RBI. The said email confirmed that the defendant no. 1 had induced multiple individuals to open ‘VIP trading accounts’ by promising exorbitant returns, which led to monetary transfers into the accounts controlled by defendant no.1.

18. On 21st April, 2024, the plaintiff received a detailed email from an investor confirming the fraudulent schemes carried out by defendant no.1. The email included screenshots from the FHT mobile application and the WhatsApp group titled “803 Federated Hermes,” as well as a PDF document referencing a video lecture allegedly delivered by Mr. Tibrewal. The attachments outlined various fraudulent practices carried out by defendant no.1, including directing the users to a counterfeit FHT app misusing the plaintiff’s logo, conducting purported live trading classes, showcasing fabricated profits, and inducing users to pay for VIP trading accounts falsely claimed to be affiliated with the plaintiff. Furthermore, it was stated that funds deposited by investors were transferred to frequently changed bank accounts and that no demat accounts were issued, clearly indicating a fraudulent scheme.

19. In May 2024, the plaintiff received multiple detailed emails from victims of defendant no.1’s fraudulent operations. In the said communications, it is detailed that defendant no.1 had continued defrauding Indian investors under the guise of offering exclusive stock trading opportunities. The victims have reported losing significant sums, ranging from several lacs to crores of rupees. The defendant no.1 legitimized its fraudulent claims by misusing the plaintiff’s trademarks and logos, deceiving investors into believing they had been granted access to plaintiff’s VIP trading accounts.

20. Around the second week of May 2024, the plaintiff became aware of news articles reporting that the FHT mobile app, operated by defendant NO. 1, had been delisted from the Google Play Store following a notice issued by the Gurugram Cyber Police due to its involvement in investment fraud. Despite this, the plaintiff learned that defendant no.1 continued its fraudulent activities using a web application accessible through obscure links, such as https://federatedhermes.w2app.io/download. The news articles revealed that the app had been downloaded over 1.55 lakh times before being delisted, and the fraudulent operations are being carried out unabated through the functionally identical web application.

21. It is stated that the plaintiff has diligently responded to each email and message received from concerned investors, unequivocally denying any involvement in the fraudulent WhatsApp schemes. Moreover, the plaintiff has advised victims to seek legal remedies and has actively sought additional information to identify the perpetrators responsible for infringing its statutory and common law rights.

22. On 4 May 2024, the plaintiff received a response from an individual informant confirming that WhatsApp groups operated by the defendant no. 1 were being run by administrators potentially using false phone numbers and display images. Further, on 13th May 2024, another informant provided screenshots and evidence of significant monetary transfers by the informant to the defendant no.1, including documentation of a transfer totalling Rs.

11.64 Lacs. These emails also included attachments showing the use of the "FHT" mobile application, both as a mobile app and a web app, further substantiating the infringing activities being carried out by the defendant no.1.

23. It is stated that despite its efforts in finding know-abouts of defendant no.1, the plaintiff has not received any substantive information that would assist in identifying the defendant no.1.

24. Being aggrieved by the aforesaid activities, the plaintiff filed the present suit on 21st May, 2024 seeking to restrain the defendant no.1 from carrying on their infringing activities.

PROCEEDINGS IN THE SUIT

25. On 28th May, 2024, this Court granted an ex-parte ad interim injunction in favour of the plaintiff. The directions contained in order dated 28th May, 2024 are reproduced below: “Till the next date of hearing, the Defendant No. 1 and all others acting on its behalf are restrained from selling, offering for sale, advertising, directly or indirectly dealing in any manner with any services including but not limited to trading in stocks, shares and equity and/or inducing any other persons to do so, using the trademark “FEDERATED HERMES” and its logo “ ” and/or any other trademark containing Federated Hermes’ trademarks and/or any other mark deceptively similar thereto, as a part of its domain names, websites, mobile apps, web apps, social media handle names/ group names/ profiles credentials/ description, promotional/ business activities on digital or print media, bank accounts and/or any business papers or in any manner leading to: a. passing off of the Defendant No. 1’s services as those of the Plaintiff’s or of any member(s) of the Plaintiff’s group; b. infringement of copyright in the artistic work in the logo; c. counterfeiting of the Plaintiff’s services or of the services of any member(s) of the Plaintiff’s group;”

26. Further, the defendant no.2 [WhatsApp LLC] was directed to suspend, delete, or block access to the infringing WhatsApp groups listed in Annexure-II of the said order and suspend/block access to accounts registered with the phone numbers in Annexure-I of the said order, along with providing the details of the associated subscribers/users in a sealed cover to the Court and the plaintiff for impleadment and investigation purposes.

27. The defendants no. 3 and 4 were directed to issue notifications or directives to telecom and internet service providers to block access to websites hosted on the specified domain names.

28. The defendants no. 5 and 6 were directed to file affidavits in a sealed cover, disclosing all details such as name, contact information, postal address, email address, bank account details, and KYC documents for their subscribers associated with the phone numbers mentioned in Annexure-I of the said order.

29. The defendant no. 7 was directed to freeze defendant no. 1's bank account and submit an affidavit in a sealed cover, providing all account holder details, including name, contact information, postal address, email, other bank accounts, and KYC documents.

30. In compliance with the aforesaid directions, an affidavit of compliance dated 6th July, 2024 was filed by defendant no.6 stating that defendant no.6 has blocked all the mobile numbers mentioned in paragraph 19.[3] of the order dated 5th February, 2024.

31. Via order dated 15th October, 2024, the Joint Registrar noted that all the defendants except defendant no.1[John Doe] and defendant no.7 were duly served and time was given to the defendants to file written statement(s).

32. In the reply filed on behalf of defendant no.2 in the ad-interim injunction application, the defendant no.2 has stated that it has duly complied with the directions passed by this court on 28th May, 2024

33. The plaintiff now seeks a decree against the defendant no.1 in terms of Order VIII Rule 10 of the Code of Civil Procedure, 1908.

ANALYSIS AND FINDINGS

34. I have heard the submissions of learned counsel for the parties and also perused the material on record.

35. The plaint has been duly verified and is also supported by the affidavit of the plaintiff. In view of the fact that the only contesting defendant is defendant no.1 and no written statement has been filed on behalf of the defendant no.1, all the averments made in the plaint have to be taken to be admitted. Further, since no affidavit of admission/denial has been filed on behalf of the defendant no.1 in respect of the documents filed with the plaint, in terms of Rule 3 of the Delhi High Court (Original Side) Rules 2018, the same are deemed to have been admitted. Therefore, in my opinion, this suit does not merit trial and the suit is capable of being decreed in terms of Order VIII Rule 10 of CPC.

36. Based on averments made in the plaint and the documents placed on record, the plaintiff has established its rights over mark "FEDERATED HERMES" and its logo “ ”. Moreover, the plaintiff by virtue of extensive use and reputation, has acquired common law rights in the name/mark "FEDERATED HERMES" and its logo “ ”, which are associated solely with the plaintiff. The defendant no. 1 has deliberately and wilfully misappropriated the plaintiff’s trademarks by creating and operating WhatsApp groups, the fraudulent website www.fedhlive.com, and the impugned "FHT" app, all of which blatantly reproduce the plaintiff’s name and logo to mislead and deceive users into believing that these services are associated with the plaintiff. Any unauthorized or unwarranted reference to the name “FEDERATED HERMES” in the context of investment and stock trading is likely to cause confusion, mislead consumers, and adversely impact the plaintiff’s business interests, entrenched goodwill, and brand reputation.

37. The defendant no.1 has induced users to make payments and subscribe to its services under the mistaken belief that they are affiliated with the plaintiff. As a result of this deception, any allegations made by defrauded users against the defendant no.1 will likely and unjustifiably tarnish the reputation of the plaintiff.

38. Clearly, the plaintiff’s name, trade mark and copyrights have been used by the defendant no.1 with the clear intent to defraud and deceive the public. It is apparent that the defendants no.1 is attempting to defraud the public by falsely claiming to offer investment advice through WhatsApp Groups, website and the impugned app ‘FHT’ which they claim are associated with the plaintiff. The unauthorized actions of the defendant no.1, including the creation and operation of fraudulent WhatsApp groups, the fraudulent website www.fedhlive.com, and the impugned "FHT" app, have given rise to substantial confusion, leading individuals to falsely believe that the impugned WhatsApp Groups the website www.fedhlive.com, and the "FHT" app are authorized, associated, and affiliated with the plaintiff.

39. At this stage, it may be relevant to note that defendant no.1, the contesting defendant, are unknown entities who are infringing the plaintiff’s mark and logo. Since, defendant no.1 has failed to take any requisite steps to contest the present suit, despite having suffered an ad-interim injunction order, it is evident that it has no defence to put forth on merits.

40. Accordingly, the plaintiff is entitled to restrain the aforesaid defendant from using the plaintiff’s name and marks without authorization from the plaintiff.

RELIEF

41. In view of the foregoing analysis, a decree of permanent injunction is passed in favour of the plaintiff in terms of prayer clauses 76 (a) to (e) of the plaint.

42. In view of the fact that the defendant no.2 has complied with the directions contained in paragraph 19.[2] of the order passed on 28th May, 2024, the plaintiff does not wish to press for relief sought in the prayer clause 76 (f) of the plaint.

43. No written statement has been filed on behalf of defendant no.3 and 4. Accordingly, a decree is passed in favour of the plaintiff and against the defendants no.3 and 4 in terms of prayer clauses 76 (g) and (h) of the plaint.

44. In view of the compliance affidavit filed by the defendants no.5 and 6, the plaintiff does not press for relief sought in prayer clause 76 (i) of the plaint.

45. In view of the compliance affidavit filed on behalf of the defendant no.7, the plaintiff does not press for relief sought in prayer clause 76 (j) of the plaint.

46. Counsel for the plaintiff does not press for the remaining reliefs sought in prayer clauses 76 (k) to (n) of the plaint.

47. Let the decree sheet be drawn up.

48. All pending applications stand disposed of. AMIT BANSAL, J DECEMBER 05, 2024