B.C. Hasaram & Sons v. Smt. Nirmala Agarwal

Delhi High Court · 12 Nov 2025 · 2025:DHC:9867-DB
C. Hari Shankar; Om Prakash Shukla
RFA(COMM) 214/2025
2025:DHC:9867-DB
civil appeal_allowed Significant

AI Summary

Delhi High Court upheld territorial jurisdiction but set aside damages awarded for trademark infringement due to lack of evidentiary basis, remanding for fresh determination.

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RFA(COMM) 214/2025
HIGH COURT OF DELHI
JUDGMENT
reserved on: 24.09.2025
Judgment pronounced on: 12.11.2025
RFA(COMM) 214/2025, CM APPL. 22330/2025 & CM APPL.
22331/2025 B.C. HASARAM & SONS .....Appellant
Through: Ms. Swathi Sukumar, Sr. Adv. with Ms. Tusha Malhotra, Ms. Sugandha Yadav, Ms. Ritik Raghuwanshi, Ms.Rishika
Aggarwal, Ms. Shrudula Murty, Ms. Pratibha Singh, Advs.
versus
SMT. NIRMALA AGARWAL Proprietor of M/s Karmayogi
Sharbhang Muni ....Respondent
Through: Mr. Anupam Shrivastav, Sr.
Adv. with Mr. Nitin K Gupta, Mr. Sanchay Mehrotra and Mr. Parth Kansal, Advs.
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
HON'BLE MR. JUSTICE OM PRAKASH SHUKLA
JUDGMENT
12.11.2025 OM PRAKASH SHUKLA, J.

1. The present Regular First Appeal has been filed under Section 13 (1A) of the Commercial Courts Act, 2015 read with Section 96 of the Code of Civil Procedure, 1908[1] arising from the final judgment dated 13.01.2025 passed by the court of the learned District Judge (Commercial Courts), North East District, Karkardooma Courts, Delhi “CPC” hereinafter in C.S.(COMM) No. 23 of 2023, titled “Smt. Nirmala Garwal, Proprietor of M/s Karmyogi Sharbhang Muni v B.C. Hasaram & Sons”. Whereby, the learned District Judge decreed the suit in favour of the plaintiff (arrayed as “Respondent” in the present Appeal), holding that the defendant (arrayed as “Appellant” in the present Appeal) had infringed respondent’s trademark and copyright in relation to the product “Nayan Jyoti” and directed the appellant to pay a sum of Rs.48,35,610/- (Forty eight lakh thirty five thousand six hundred and ten only) as damages for the infringement, in addition to Rs. 2,27,514/- (Two lakh twenty seven thousand five hundred and fourteen only) towards costs.

INTRODUCTION

2. The dispute is regarding alleged infringement of the plaintiff/respondent’s trademark “Nayan Jyoti”, on account of usage of purportedly deceptively similar mark “Amrit Nayan Jyoti” by the defendant/appellant. 2.[1] The appellant is a sole proprietorship firm managed, owned, and operated by the members of same family, i.e., father – Mr. Radha Krishna Chandnani and his sons – Mr. Tanuj Chandnani and Mr. Abhishek Chandnani. The appellant is primarily engaged in business of manufacturing and marketing ayurvedic medicines including ointments and eye drops. 2.[2] The respondent is the sole proprietor of the firm namely, M/s Karmyogi Sharbhang Muni and holds the rights to the trademark “Nayan Jyoti”.

FACTUAL BACKGROUND

3. For the sake of convenience, the parties to the present appeal would be referred by the same status and name as they have been before the Learned District Court. Thus, the “appellant” would be addressed as “defendant” and the “respondent” would be referred to as the “plaintiff”.

4. The plaintiff filed a suit before the Learned District Court claiming that the trademark “Nayan Jyoti / ” was coined by them for ayurvedic medicines in the year 1990 and prayed for a decree of permanent injunction and damages of Rs. 1,00,00,000/- (One crore only).

5. The plaintiff claimed that the trademark qualified as a wellknown trademark as per Section 2 (1) (zg) and Section 11 of the Trade Marks Act, 1999[2]. It was asserted in the suit that the mark is duly registered and had acquired substantial goodwill, reputation and trade recognition throughout India in connection with their goods and business. Thus, exclusive rights in respect of the said trademark were “Trade Marks Act” hereinafter asserted by the plaintiff.

6. Additionally, the plaintiff claimed that the defendant had deceptively adopted the mark “Amrit Nayan Jyoti / ” without any authorisation, in relation to goods pertaining to ayurvedic medicine, and thus intentionally infringed the trademark of the plaintiff. It was further alleged that the defendant was engaged in the manufacturing, marketing, selling, distributing, and promotion of various ayurvedic medicines and related products through online platforms and that the impugned goods were also supplied to different traders, dealers, and stockists.

7. It was also the case of the plaintiff that the defendant was a habitual infringer and this claim was supported by referring to an incident from 2009 where a warning letter was sent by the Licensing Officer and Director, Ayurveda and Unani Services, Uttarakhand to the defendant. As per the plaintiff, the licensing authority took cognizance of the issue, resulting in the cancellation of the defendant’s license and directing them to refrain from manufacturing and selling products under the disputed trademark, which was alleged to have caused harm to the goodwill associated with the plaintiff’s trademark. The plaintiff claimed that following this action, the defendant had ceased the use of the impugned trademark.

8. It was further alleged by the plaintiff that the defendant had recently resumed the use of a similar or identical trademark in relation to ayurvedic medicines without authorisation or permission, thereby infringing the plaintiff’s registered trademark. It was alleged that the mark was being used in various forms, including individually and in logo/label format as well. It was stated that the visual and overall comparison between the plaintiff’s registered mark “Nayan Jyoti” and the impugned mark reveals substantial similarities in artistic elements, suggesting a deliberate attempt to mislead the consumers and exploit the plaintiff’s established reputation. To verify this, a test purchase was made on behalf of the plaintiff, through its investigator Mr. Uday Singh, i.e., an online order was placed for “Amrit Nayan Jyoti” eye drops on 21.01.2023 via the defendant’s website i.e., https://haridwaryurved.com the invoice of the same is on record. Further, the said eye drops came to be delivered on 27.01.2023.

9. It was further stated in the plaint that upon examination of the packaging and trade dress, the plaintiff found that the defendant had copied key elements of the plaintiff’s mark including the name “Nayan Jyoti” colour scheme i.e., orange and white, writing style, placement of imagery of a man, pricing structure, and that the packaging of the defendant’s product also contained an eye symbol in a similar colour palette, reinforcing the allegation of similarity.

10. In view of the above, it was the case of the plaintiff that the impugned mark of the defendant closely resembled their mark, thereby giving a false trade description and misrepresenting their goods as those of the plaintiff. The adoption and continued use of the impugned mark is asserted to be intentional and in bad faith, with the objective of securing undue financial gains by exploiting the plaintiff’s goodwill and reputation. It was alleged that the phonetic similarity between “Nayan Jyoti” and “Amrit Nayan Jyoti” coupled with the visual and structural imitation, supports the claim of deceptive similarity.

11. It was also contended in the plaint that the learned District Court possessed the requisite jurisdiction under Section 134(2) of the Trade Marks Act, 1999 and Section 62(2) of the Copyright Act, 1957, as the impugned goods were being marketed, sold, and solicited within the territorial limits of this Court. It was also stated in the plaint that the defendant was operating an interactive website https://haridwaryurved.com through which the impugned products were made available to potential customers in this jurisdiction. Additionally, to constitute valid jurisdiction, it was pointed out that the defendant was carrying out business in North-East Delhi, including areas such as Karkardooma and Bhajanpura, through distributors and retail traders.

12. Accordingly, the plaintiff filed the abovementioned suit claiming that the defendant was infringing upon their trademark and that the defendant was engaged in passing off their goods as those of the plaintiff’s by copying the trade dress. It was also claimed that the defendant had undertaken unfair trade practices. Resultingly, the plaintiff claimed monetary damages of Rs. 1,00,00,000/- (one crore only).

PROCEEDINGS BEFORE THE LD.

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DISTRICT COURT

13. The learned District Court vide order dated 10.05.2023 granted an ex-parte ad-interim injunction in favour of the plaintiff and appointed a Local Commissioner[3] for search and seizure of defendant’s premises. The LC filed its report dated 23.05.2025, along with the inventory of seizure conducted at defendant’s premises.

14. The defendant failed to file their written statement in the said Civil Suit and subsequently, their defence was struck off vide order dated 05.10.2023. Further, pursuant to the ad-interim injunction, the defendant had filed an affidavit dated 29.03.2023 stating that they were not dealing in the impugned goods and consented for the matter to be decreed in terms of the prayer clause of the plaint, specifically paragraph 48(a). In view of the same, the aforementioned ex-parte adinterim injunction order was made absolute.

15. The defendant’s case hinged on the argument that the lower Court did not possess territorial jurisdiction to try the suit as the plaintiff had failed to show any sales of their product in North-East Delhi. It was further contended by the defendant’s that the investigator who placed the order of the defendant’s products on behalf of the plaintiff was not examined and therefore the alleged purchase of the investigator was false and mere hearsay, thereby rendering it inadmissible as evidence in a Court of law. “LC” hereinafter IMPUGNED JUDGEMENT

16. As far as on the preliminary issue of jurisdiction was concerned, the learned District Court opined that since the defendant issued an invoice for the sale of their product “Amrit Nayan Jyoti” in Bhajanpura, North-East Delhi, the Court was vested with the territorial jurisdiction to try the Civil Suit. Further, although while noting that the investigator was not examined as a witness, the learned District Court rejected the plea of the defendant that the test purchase by investigator was fake and hearsay.

17. Further, the learned District Court while placing reliance on the registration certificate, held that the plaintiff was the lawful owner of registered trademark “Nayan Jyoti”. The Court further noted that the defendant did not dispute any of the claims raised by the plaintiff and in fact, had filed an affidavit consenting to plaintiff’s prayer at paragraph 48(a) of the plaint. Accordingly, the learned District Court decreed the suit in favour of the plaintiff and restrained the defendant from using the impugned mark “Amrit Nayan Jyoti”.

18. Thereafter, on the aspect of grant of damages, the learned District Court placed reliance on the following aspects (i) the ratio of the judgment in Koninlijke Philips and Ors. vs. Amazestore and Ors.[4]

(ii) the C.A certified account of sale which depicted reduced Net Sale in the years 2020-21 and 2021-22 in comparison to previous years and

(iii) the respondent being a habitual infringer. Relying on the aforesaid factors, the learned District Court came to conclude that the present case would fall under the category of the proposition that “repeated knowing infringer causes major impact to the plaintiff and as such, the plaintiff is entitled to injunction + cost + compensatory damages” as deduced in the judgment of Koninlijke Philips (supra).

19. The learned District Court, thereafter, relied on Sandisk LLC and Ors. vs B-one Mobile and Ors.[5] to take note of the quantity seized by the LC and held that since the quantity seized was of one month and the defendant had been in business for at least 2 months prior to the grant of the ex parte injunction dated 10.05.2023, the plaintiff was entitled for damages for two months. Further, as far as the damages liable to be paid by the defendant for one month, the learned District Court based its computation of damages for one month, as follows: Particular of Products Quantity discovered during the execution of commission Price of the original products Total Cost Packing outer box (Amrit Nayan Jyoti) 30810 pcs Rs 45/- Rs.13,86,450/- Sticker + Roll (Amrit Nayan Jyoti) 50400 – 30810 = 19590 pcs Rs 45/- Rs.8,81,550/- Packing outer box Big Jyoti) 101 pcs Rs 45/- Rs.4545/- Finished Goods Jyoti) eye drops 3220 + 8 = 3228 pcs Rs 45/- Rs.1,45,260/- 2019 SCC OnLine Del 8022 Label for description of product Jyoti) 9600 pcs Total 53,729 pcs Rs.24,17,805/- Hence, keeping in view the value of the defendant’s stock for one month was calculated as Rs.24,17,805/-, it was thereafter multiplied by 2 since the defendant was in business for two months. Thus, the total amount being Rs. 48,35,610/- was granted in form of damages to the plaintiff.

20. Aggrieved by the impugned judgment, particularly by the quantum of damages, the defendant filed the present Regular First Appeal before this Court.

SUBMISSIONS BY THE LEARNED SENIOR COUNSEL FOR THE APPELLANT (DEFENDANT IN THE ORIGINAL SUIT)

21. Ms. Swathi Sukumar, the learned Senior Counsel for the defendant, contended that no evidence was led by the plaintiff in support of their claim amounting to Rs. 1,00,00,000/- (one crore only). It was also contended that the affidavit of evidence did not contain the material required for computation of damages and the same was only introduced for the first time vide written submissions dated 16.09.2024. Hence, the aspect of computation of damages did not form a part of the evidence nor the veracity of the same was tested on the anvil of cross examination.

22. It was submitted that the learned District Court erred in computing damages at Rs. 48,35,610/- on several incorrect assumptions and miscalculations, namely: i. The Court wrongly presumed that the stock seized by the LC represented one month’s quantity. ii. It was erroneously assumed that the defendant had been carrying on business for a period of two months prior to the grant of the ex-parte injunction dated 10.05.2023. iii. Undue reliance was placed on judgment of SanDisk LLC (supra), without properly applying the principles to the facts of the present case. iv. The price of the defendant’s product was incorrectly taken as Rs.45/- per unit, whereas the actual selling price was Rs.40/- per unit. v. The Court wrongly calculated damages by treating the cost of raw and packaging material at par with the price of the finished product. vi. Damages were erroneously calculated on the price of the original product of the defendant, rather than on the actual profits earned by them. vii. The Court further erred in calculating damages on the basis of the Market Retail Price (MRP) instead of limiting it to the margin of profits earned.

23. It was further submitted that damages could not be awarded on the basis of speculative or hypothetical assumptions. In that regard, inference can be drawn from the judgments of Kabushiki Kaisha Toshiba v. Tosiba Appliances Co.[6] which underscores that damages must be supported by cogent evidence and not conjecture and of Gujarat Ginning and Manufacturing Co. Ltd. v. Swadeshi Mills Co. Ltd.7, which reiterates that damages must have a rational evidentiary foundation.

24. The learned Senior Counsel for the defendant contended that the learned District Court erred in not assessing compensatory damages on the basis of actual profits lost by the plaintiff which is in contravention to the principles established in Koninlijke Philips (supra). In the aforementioned decision, damages were conservatively assessed at 20% of the infringer's profits, calculated per unit and multiplied by the total number of infringing products.

25. The learned Senior Counsel for the defendant argued that the plaintiff’s evidence lacked any such computation of actual damages, it was only provided in final written submissions and hence, not subjected to cross-examination. Despite this, the learned District Court went on to wrongfully use the Maximum Retail Price (MRP) for its calculation instead of determining the profit margin, demonstrating a total lack of proper judicial application.

26. Moreover, it was contended that the reliance placed by the learned District Court on SanDisk LLC (supra) was misplaced since the defendants therein were dealing in counterfeit products, whereas the defendant in the instant suit had a valid license and the plaintiff did not

1938 SCC OnLine Bom 94 submit any evidence to show that the defendant was dealing without proper license. The decision in Sandisk LLC (supra) was sought to be distinguished by explaining that, in that case, the plaintiff had filed ex parte evidence by way of an affidavit wherein they had calculated the actual sales lost based on the quantity seized by the LC but in the instant matter, the plaintiff’s evidence by way of affidavit failed to deal with the computation of damages, which was only provided at the last stage in further written submissions on 16.09.2024 and the same was not subject to cross-examination. According to the learned Senior Counsel, the present case was a classic case of lack of evidence.

27. Lastly, it was submitted that the plaintiff had failed to file any document to show that the defendant produced “Amrit Nayan Jyoti” without any proper license. It was reiterated by learned Senior Counsel that the defendant was lawfully manufacturing the said product under the license No. A-2573/93 as on 23.09.2010 and that the defendant was only restrained from manufacturing “Nayan Jyoti” under the old license A-2573/96 not the product “Amrit Nayan Jyoti”.

SUBMISSIONS BY THE LEARNED COUNSEL FOR THE RESPONDENT (PLAINTIFF IN THE ORIGINAL SUIT)

28. Per Contra, Mr. Anupam Shrivastav, learned Counsel for the plaintiff, contended that the learned District Court had rightfully relied on the report of the LC since the defendant had suppressed accounts of their business. It was submitted that the calculation of damages was not made on the basis of mere speculation, rather it was made on the basis of the LC’s report which is considered to be valid evidence as per Haldiram India Pvt. Ltd. v. Berachah Sales Corporation & Ors.[8]

29. The learned Counsel for the plaintiff submitted that the computation of damages by the learned District Judge was a reasonable estimation since the failure of the defendant to enter a defence or produce financial records left the duration and scale of the infringing business undisclosed before the learned Court. It was submitted that the learned District Judge duly relied on the decision in SanDisk LLC (supra) and the report of the LC. It was submitted that this approach is supported by the decision in Puma SE v. Ashok Kumar[9], which reaffirms that damages can be assessed based on speculative estimation of sales along with LC’s findings in situations wherein the infringer withholds crucial financial information.

30. Moreover, the learned Counsel contended that the bare denial of the plaint without substantiated defence amounts to implied acceptance of the averments and submissions contained therein. It was submitted that the defendant had filed an affidavit admitting that a decree may be passed in favour of the plaintiff in terms of Para 48 (a) of the plaint and did not contest the remaining prayers. It was also pointed out that the defendant also failed to place on record any document or evidence pertaining to their regulatory license to manufacture the product “Amrit Nayan Jyoti”.

REASONING & ANALYSIS

31. We have heard the learned Counsels for both the parties, perused the material on record and have gone through the impugned judgment.

32. At the outset, as this is a Regular First Appeal, it would be pertinent to identify the point of determination in the present case in view of Order XLI Rule 31 of the CPC.

33. The points of determination in the present appeal would be as follows: i. Whether the learned District Court had the territorial jurisdiction to try the instant matter? ii. Whether the learned District Court erred in law by failing to apply the correct legal principles and procedure for calculating quantum of damages?

34. As far as the first issue relating to territorial jurisdiction in cases of trademark infringement is concerned the law is well-settled. In the case of Banyan Tree Holding (P) Limited v. A. Murali Krishna Reddy & Anr.,10 this Court had rigorously explained the legal position and established a stringent framework for determining territorial jurisdiction in disputes of trademark infringement. The said decision invariably records that the jurisdiction of a Court is not triggered merely 2009 SCC OnLine Del 3780 because a defendant's interactive website is accessible within its territory; instead, jurisdiction requires the simultaneous application of two interconnected tests. First, the "Sliding Scale" test, which must be satisfied, meaning thereby that the Court must look beyond simple interactivity to examine whether the website's nature facilitates commercial transactions within the forum state. Secondly and more crucially, the "Effects" test must be met i.e., compelling the plaintiff to demonstrate prima facie that the defendant specifically targeted the forum state and that this caused an actual injurious effect, such as harm to business, goodwill, or reputation to the plaintiff within that state. Further, this injurious effect can only be shown if the plaintiff itself has a current and tangible presence in the forum state, which ought not to be merely a future or potential one. Therefore, by linking commercial activity to proven local injury, this approach ensures that jurisdiction is confined to cases where there is a genuine and substantial connection to the forum, thereby preventing courts from hearing cases based solely on the passive or incidental accessibility of a website. This Court in Banyan Tree (supra) in paragraph 42 held as under: “This Court holds that jurisdiction of the forum court does not get attracted merely on the basis of interactivity of the website which is accessible in the forum state. The degree of the interactivity apart, the nature of the activity permissible and whether it results in a commercial transaction has to be examined. For the ‘effects’ test to apply, the Plaintiff must necessarily plead and show prima facie that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the Plaintiff within the forum state. For the purposes of a passing off or an infringement action (where the plaintiff is not located within the jurisdiction of the court), the injurious effect on the Plaintiff's business, goodwill or reputation within the forum state as a result of the Defendant's website being accessed in the forum state would have to be shown. Naturally therefore, this would require the presence of the Plaintiff in the forum state and not merely the possibility of such presence in the future. Secondly, to show that an injurious effect has been felt by the Plaintiff it would have to be shown that viewers in the forum state were specifically targeted. Therefore the ‘effects’ test would have to be applied in conjunction with the “sliding scale” test to determine if the forum court has jurisdiction to try a suit concerning internet based disputes.”

35. Adverting to the facts of the present case, although the defendant’s main contention before the learned District Court was that that the lone trap/test purchase conducted by the plaintiff was not recognized in the eyes of law to invoke the territorial jurisdiction. It is stated on record that the plaintiff’s investigator placed an order for the impugned goods through the defendant’s website from Delhi, and the corresponding invoice is already on record. This demonstrates that the defendant’s website is not merely interactive but in fact allows customers in Delhi to place orders and receive deliveries. Such interactivity has the potential to cause injury to the plaintiff’s goodwill and business within Delhi. Accordingly, this Court finds that the learned District Court correctly relied on the website and the invoice of delivery of the defendant’s product to hold that it has territorial jurisdiction to try the present suit, keeping in line with the law propounded in the judgment of Banyan Tree (supra). The Court of first instance, relevant to the context, has returned the finding as follows: “Ex.PW1/16 and Ex.PW1/17 clearly proves that the defendant was having interactive website and upon an order placed regarding purchase of Amrit Nayan Jyoti eye drop, the defendant issued invoice regarding delivery of its product at Bhajanpura, North-East, Delhi, therefore, this court has territorial jurisdiction to try the present suit”. (emphasis supplied)

36. Having held that the learned District Court had the requisite territorial jurisdiction to try and entertain the present suit, this Court takes the second point of determination into consideration i.e., whether the learned District Court erred in law by failing to apply the correct legal principles and procedure for calculating quantum of damages?

37. First and foremost, it must be understood that Section 135 of the Trade Marks Act lays down the reliefs available in the suit for infringement. Section 135 of the Act lays down that the owner of a trademark has remedies including the claim of damages in cases of infringement. However, the said provision is silent on the aspect and methodology of computing the quantum of damages. For the sake of convenience, the provision may be reproduced as herein below:

“135. Relief in suits for infringement or for passing off. —
(1) The relief which a court may grant in any suit for infringement
or for passing off referred to in section 134 includes injunction
(subject to such terms, if any, as the court thinks fit) and at the option
of the plaintiff, either damages or an account of profits, together
with or without any order for the delivery-up of the infringing labels
and marks for destruction or erasure.
(2) The order of injunction under sub-section (1) may include an ex
parte injunction or any interlocutory order for any of the following
matters, namely: —
(a) for discovery of documents;
(b) preserving of infringing goods, documents or other evidence which are related to the subject-matter of the suit;
(c) restraining the defendant from disposing of or dealing with his assets in a manner which may adversely affect plaintiff’s ability to recover damages, costs or other pecuniary remedies which may be finally awarded to the plaintiff. (3) Notwithstanding anything contained in sub-section (1), the court shall not grant relief by way of damages (other than nominal damages) or on account of profits in any case—
(a) where in a suit for infringement of a trade mark, the infringement complained of is in relation to a certification trade mark or

collective mark; or (b) where in a suit for infringement the defendant satisfies the court—

(i) that at the time he commenced to use the trade mark complained of in the suit, he was unaware and had no reasonable ground for believing that the trade mark of the plaintiff was on the register or that the plaintiff was a registered user using by way of permitted use; and

(ii) that when he became aware of the existence and nature of the plaintiff’s right in the trade mark, he forthwith ceased to use the trade mark in relation to goods or services in respect of which it was registered; or

(c) where in a suit for passing off, the defendant satisfies the court—

(i) that at the time he commenced to use the trade mark complained of in the suit, he was unaware and had no reasonable ground for believing that the trade mark for the plaintiff was in use; and

(ii) that when he became aware of the existence and nature of the plaintiff’s trade mark he forthwith ceased to use the trade mark complained of.”

38. However, this Court finds that Rule 20 of the Delhi High Court Intellectual Property Rights Division Rules of 2022 prescribes the framework for determining the quantum of damages, in the following manner:

“20. Damages/Account of profits
A party seeking damages/account of profits, shall give a reasonable
estimate of the amounts claimed and the foundational facts/account
statements in respect thereof along with any evidence, documentary
and/or oral led by the parties to support such a claim. In addition,
the Court shall consider the following factors while determining the
quantum of damages:
(i) Lost profits suffered by the injured party;
(ii) Profits earned by the infringing party;
(iii) Quantum of income which the injured party may have earned through royalties/license fees, had the use of the subject IPR been duly authorized;
(iv) The duration of the infringement;
(v) Degree of intention/neglect underlying the infringement;
(vi) Conduct of the infringing party to mitigate the damages being incurred by the injured party; In the computation of damages, the Court may take the assistance of an expert as provided for under Rule 31 of these Rules.” (emphasis supplied)

39. Before enumerating various factors, which may act as a tool for determining the quantum of damages, we reiterate that the aforesaid Rule, in no terms, entails that the foundational facts/account statements in respect of the estimated damages ought to be supported with any evidence, documentary and/or oral led by the parties to support such a claim. The words followed by “any evidence” merely gives a choice to the party to produce evidence, either documentary or oral. It does not, in any sense, mean that the estimated damages claim can be made without any evidence.

40. In the case of Kabushiki Kaisha Toshiba (supra), this Court emphasized that the claim of damages must be supported by evidence and the burden of proof for the same falls upon the plaintiff. This Court cleared that speculative and/or hypothetical claims cannot form the basis for award of damages. The relevant paragraph for the same is reproduced as herein below:

“138. …The Court's decision on awarding damages must be predicated on a substantive examination of evidence that justifies the quantum of such compensation. The burden of proving damages rests unequivocally with the Plaintiff. To succeed, the Plaintiff must present compelling evidence substantiating the claimed damages resulting from the Defendant's alleged infringement. They must provide a reasonable estimate of the amount claimed, foundational facts, account statements, and supporting documentary and/or oral evidence. This entails establishing a direct link between the Defendant's actions and the claimed damages and quantifying these damages in a manner acceptable in law. They must demonstrate how the claimed figure was reached and the methodology employed, which must withstand the Court's scrutiny. Speculative or hypothetical assertions cannot form the basis for a substantial damages award”.

41. In the present case, it is clear that no evidence was led either by the plaintiff or the defendant regarding the claim of damages. Though there was no predicament for the defendant to lead evidence, it is the plaintiff upon whom the burden of proof lies to prove the estimated damages as claimed in the suit and there cannot be any room for hypothetical or arbitrary estimations. The principle "he who claims has to prove" squarely applies to the facts of this case. The aforesaid principle means that the person making a factual claim in a legal proceeding must provide evidence to prove that claim to the Court. This is known as the burden of proof, and it lies with the party who asserts a legal right or liability based on specific facts. Moreover, it is apparent that only at the stage of written submissions did the plaintiff introduce the computation and provided material which consequently did not form part of any evidence nor was it subject to any cross-examination by the defendant. Further, as is evident from paragraphs 35 and 36 of the impugned judgment, there is no clear analysis or rational basis indicating how the damages were quantified. The assumption drawn by the learned District Judge on the basis of the LC’s report that the seized stock constituted one month’s supply of the product and that the defendant had been carrying on business at least two months prior to the ex-parte injunction dated 10.05.2023, is wholly unsubstantiated by any material on record. Hence, the award of damages by the learned District Court is not legally sustainable.

42. There is already a rich history of precedents establishing that quantum of damages awarded require a reasoned basis tied to evidence of actual loss. In the present case, the absence of cogent reasoning and evidence linking the damages to proven injury, diverges the award from the compensatory principle that governs damages thereby risking unjust enrichment. Further, it must be understood that while awarding damages, the Court plays a dual role of not only safeguarding the rights of the parties but also balancing the broader contextual factors i.e., compensatory or punitive or both. Thus, we find that it is the evidence which constitutes the bedrock for any award of compensatory or punitive damages. Accordingly, the damages awarded by the learned District Court, having been not based on any sound principle of law, is liable to be set aside on account of lack of evidence.

43. In view of the above, the appeal is partly allowed as the quantification adopted by the learned District Judge is not in accordance with law and lacks a reasoned evidentiary basis. Resultingly, the present matter is remanded to the learned District Court for fresh determination limited to the issue of damages/account of profits, after permitting both parties to lead evidence including production of any material as may be relevant for quantifying damages in accordance with law.

44. There shall be no order as to costs.

45. Pending application(s), if any, stands disposed of.

46. As we have disposed of the appeal today, the appellant is permitted to withdraw the principal decretal amount deposited in the Court on approaching the Registry for that purpose.

OM PRAKASH SHUKLA, J.

C. HARI SHANKAR, J.

NOVEMBER 12, 2025