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  • Bombay HC: Section 37 NDPS Act Does Not Fetter Bail Where Trial Is Unduly Delayed and Incarceration Is Prolonged

    Bombay HC: Section 37 NDPS Act Does Not Fetter Bail Where Trial Is Unduly Delayed and Incarceration Is Prolonged

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 29.09.2026

    Bombay HC: Section 37 NDPS Act Does Not Fetter Bail Where Trial Is Unduly Delayed and Incarceration Is Prolonged

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    In a significant order concerning bail under the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act), the Bombay High Court has granted bail to two foreign nationals who had remained incarcerated for approximately one year and ten months, despite completion of investigation and with the trial yet to commence.

    Justice Milind N. Jadhav, while deciding the connected bail applications of Aguilum Jude Ebuka and Eneje Grace Chinonyen, took note of the prolonged incarceration, non-commencement of trial and what the Court found to be prima facie deficiencies concerning compliance with Sections 50 and 52 of the NDPS Act.

    Importantly, the Court dealt with the prosecution’s reliance on the commercial quantity of contraband and the rigours of Section 37, observing that substantial pre-trial incarceration and undue delay in completion of trial engage the constitutional guarantee of life and personal liberty under Article 21 of the Constitution.

    Background of the case

    • Both applicants were foreign nationals implicated in C.R. No. 451 of 2024, registered at Taloja Police Station, Navi Mumbai, for alleged offences punishable under Sections 8(c), 21(c) and 22(c) of the NDPS Act.
    • At the time the High Court considered their bail applications, both applicants had been in custody for approximately one year and ten months.
    • The investigation had already been completed. However, the trial had not commenced.
    • These circumstances became central to the High Court’s consideration of whether continued incarceration was justified.

    Prima facie concern over compliance with Sections 50 and 52 NDPS Act

    • A particularly important aspect of the order is the High Court’s scrutiny of the documentation relating to compliance with the procedural safeguards contained in the NDPS Act.
    • The Court observed that, prima facie, the notice under Section 50 and the intimation concerning the rights/procedure referred to by the Court under Section 52 β€œleave much to be desired”.
    • The applicants’ signatures did not appear on the Section 50 notice. Although the prosecution case in the FIR was that the applicants had refused to sign, the Court observed that, if that were so, an appropriate remark ought to have been made on the Section 50 notice itself.
    • The absence of such a remark, according to the Court, created an element of doubt and suspicion.

    Court finds Section 52 documentation even more problematic

    • The High Court expressed stronger prima facie concern regarding the documentation concerning Section 52.
    • According to the order, witnesses had not appended their signatures, even though the FIR stated otherwise.
    • The prosecution argued that a commercial quantity of contraband had been recovered pursuant to secret information and that the stringent requirements of Section 37 of the NDPS Act therefore applied.
    • The Court, however, simultaneously noted that the applicants had remained incarcerated for almost two years while the trial had not even begun.
    • The Court emphasised that procedural requirements under Sections 50 and 52 are crucial threshold steps and must be satisfied without creating suspicion about whether the prescribed procedure was actually followed.
    • It observed that where the supporting documentation is not consistent with the procedure claimed in the FIR, such circumstances may become relevant while considering bail.

    Foreign nationality by itself cannot justify continued incarceration

    Another significant observation concerns the nationality of the accused.

    The High Court expressly stated:

    • β€œMerely because the Applicants before the Court are foreign nationals, that cannot be a reason for incarceration.”
    • Instead of treating nationality itself as sufficient reason to deny bail, the Court considered that appropriate and stringent conditions could be imposed to address concerns regarding re-offending and compliance with the trial process.
    • The order consequently imposed several safeguards, including passport deposit, restrictions on leaving India and mandatory police-station reporting.

    Commercial quantity and the rigours of Section 37 NDPS Act

    • The prosecution’s case involved alleged recovery of commercial quantity, making Section 37 of the NDPS Act particularly relevant.
    • Section 37 imposes stringent statutory conditions for grant of bail in specified NDPS offences. The High Court did not disregard this statutory restriction. Instead, it examined Section 37 alongside the constitutional consequences of prolonged pre-trial detention.
    • The Court referred to several decisions in which the Supreme Court and High Courts had granted bail to undertrial prisoners facing commercial-quantity allegations after substantial periods of incarceration.

    These included:

    • Nitish Adhikary alias Bapan v. State of West Bengal, where the Supreme Court granted bail after incarceration of approximately one year and seven months;
    • Babor Ali Mondal v. State of West Bengal, involving incarceration of approximately one year and four months;
    • Sukhvinder Singh Bittu v. State of Punjab, where bail was granted after approximately one year of incarceration despite an allegation involving commercial quantity of poppy straw; and
    • Mohd. Mobin Jahurul Hasan Manihar v. State of Maharashtra, where the Bombay High Court had granted bail after approximately one year and eleven months of custody in a matter involving 220 grams of MD. Aguilum Jude Ebuka BHC

    Prolonged incarceration and Article 21

    • The High Court drew an important constitutional connection between prolonged incarceration and the right to life and personal liberty under Article 21.
    • It observed that although an accused must satisfy the stringent test under Section 37, that provision does not necessarily prevent grant of bail where there is undue delay in completion of trial.
    • The Court recorded that incarceration for a substantial period generally militates against the constitutional guarantee of life and liberty, and referred to the principle that conditional liberty may, in appropriate circumstances of prolonged delay, prevail over the statutory embargo under Section 37.

    Reliance on Mohd. Muslim alias Hussain

    • The Court also extensively relied upon the Supreme Court’s decision in Mohd. Muslim alias Hussain v. State (NCT of Delhi), 2023 SCC OnLine SC 352.
    • The extracted reasoning emphasised that the requirement under Section 37 that the Court have reasonable grounds for believing that an accused is β€œnot guilty” cannot be interpreted as requiring a final adjudication of innocence at the bail stage.
    • Instead, the inquiry is necessarily prima facie, based on the material available when bail is considered.
    • The Supreme Court passage reproduced in the Bombay High Court’s order further explained that an overly literal application of Section 37 could effectively exclude bail altogether and result in punitive or unsanctioned preventive detention.
    • Accordingly, the satisfaction required at the bail stage must be based upon a broad and reasonable assessment of the material rather than a meticulous examination equivalent to trial.

    Delay in trial can override the Section 37 embargo in appropriate cases

    The constitutional dimension of the ruling becomes particularly important here.

    The Bombay High Court relied upon the proposition from Mohd. Muslim that:

    • β€œGrant of bail on ground of undue delay in trial, cannot be said to be fettered by Section 37 of the Act…”
    • The Court also reproduced the Supreme Court’s observations concerning the serious consequences of prolonged imprisonment, especially when trials under special statutes containing stringent bail provisions are not concluded expeditiously.
    • Those observations stress that courts must remain sensitive to the potentially irreparable consequences of pre-trial incarceration, particularly where the accused may ultimately be acquitted.

    Investigation complete, charge-sheet filed, but trial had not begun

    • The Bombay High Court additionally noted that the investigation was complete and the charge-sheet had already been filed.
    • Thus, continued custody was no longer being justified by an incomplete investigation.
    • The Court considered the period of incarcerationβ€”almost two yearsβ€”alongside the probability that the trial would neither commence nor conclude in the near foreseeable future.
    • On this cumulative assessment, the Court found that both applicants had made out a case for bail.

    Bombay High Court grants bail with stringent conditions

    • The High Court accordingly ordered the immediate release of both applicants on bail in connection with C.R. No. 451 of 2024.
    • Each applicant was required to furnish a personal recognizance bond of β‚Ή50,000 with one or two sureties in the like amount.
    • Recognising their status as foreign nationals, the Court imposed detailed safeguards.

    The applicants were directed to:

    • report to the concerned Police Station once every month on the first Sunday between 10:00 a.m. and 12:00 p.m.;
    • cooperate with the trial and attend the Trial Court on all dates unless specifically exempted;
    • refrain from seeking unnecessary adjournments;
    • not leave India without prior permission of the Trial Court;
    • deposit their passports, if any, with the Trial Court within one week of release;
    • not influence witnesses or tamper with evidence;
    • keep the Investigating Officer informed of their current residential addresses and mobile numbers; and
    • comply with all conditions, breach of which could result in cancellation of bail.

    The Court also directed the prosecuting agency to communicate the bail order immediately to the concerned Registration Officer under the Registration of Foreigners Rules, 1992, referring in this context to the Supreme Court’s decision in Frank Vitus v. Narcotics Control Bureau & Ors.

    Why this judgment matters in NDPS bail jurisprudence

    • The decision is significant because it demonstrates that Section 37 cannot be considered in isolation from Article 21, particularly where an accused has spent a substantial period in custody and the trial has not even begun.
    • At the same time, the ruling should not be understood as laying down that every NDPS accused becomes entitled to bail after a particular period of incarceration.
    • The Court’s decision rested upon a combination of circumstances: prolonged custody, non-commencement of trial, completion of investigation, filing of the charge-sheet, prima facie concerns regarding procedural documentation and the possibility of managing risks through stringent bail conditions.

    Procedural safeguards under the NDPS Act are not empty formalities

    • Another important aspect is the Court’s scrutiny of the documentation supporting claimed statutory compliance.
    • Where the FIR asserts that a particular procedure was followed, but the contemporaneous notices or documents do not correspond with that assertion, the discrepancy can become relevant at least at the prima facie bail stage.
    • The Court’s observations concerning Sections 50 and 52 therefore reinforce the importance of maintaining accurate contemporaneous records during NDPS searches, seizures and subsequent statutory procedures.

    Foreign nationals and bail: nationality is not an automatic bar

    • The order is also noteworthy for its treatment of foreign-national accused.
    • Rather than regarding foreign nationality as an automatic justification for detention, the Court addressed legitimate concerns through enforceable conditionsβ€”passport deposit, prohibition on leaving the country without judicial permission, police reporting and communication with the Registration Officer.
    • The approach reflects a distinction between nationality itself and identifiable risks such as absconding, non-participation in trial or re-offending.

    Important caution: findings are only prima facie

    • The High Court expressly clarified that its observations would not affect the trial.
    • The findings were prima facie in nature, based upon the submissions and material placed before the Court for deciding bail.
    • Accordingly, the order does not amount to an acquittal, nor does it finally determine that Sections 50 or 52 were violated. Those questions remain open for determination at the appropriate stage of the criminal proceedings.
    • This distinction is important when reporting the judgment: the Court identified prima facie concerns with the statutory documentation; it did not finally invalidate the search, seizure or prosecution.

    Conclusion

    The Bombay High Court’s decision in Aguilum Jude Ebuka v. State of Maharashtra, along with the connected application of Eneje Grace Chinonyen, reinforces the constitutional importance of timely trials even in prosecutions involving alleged commercial quantities under the NDPS Act.

    The Court considered the applicants’ nearly two-year incarceration, the fact that investigation had concluded while trial had not commenced, prima facie concerns surrounding procedural documentation under Sections 50 and 52, and established jurisprudence recognising that undue delay in trial can become a compelling consideration notwithstanding Section 37.

    Equally significant is the Court’s observation that foreign nationality alone cannot justify continued incarceration.

    Concerns associated with release can instead be addressed through stringent and appropriately tailored bail conditions.

    The ruling therefore adds to the developing body of jurisprudence balancing the stringent statutory framework of the NDPS Act with the constitutional protection of personal liberty under Article 21.

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    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Bombay High Court

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  • P&H HC: Importer Cannot Be Saddled with Demurrage and Ground Rent for Delay in Release of Detained Goods

    P&H HC: Importer Cannot Be Saddled with Demurrage and Ground Rent for Delay in Release of Detained Goods

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 29.09.2026

    P&H HC: Importer Cannot Be Saddled with Demurrage and Ground Rent for Delay in Release of Detained Goods

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    In a significant ruling concerning prolonged detention of imported goods, Customs clearance, detention waiver, demurrage and ground-rent liability, the Punjab & Haryana High Court has come down strongly on authorities and other stakeholders for allowing an importer to suffer for more than two years because of disputes amongst themselves.

    A Division Bench comprising the Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor allowed the writ petition filed by M/s Dhillon Overseas and issued a writ of mandamus directing release of the imported goods within two weeks. The Court also held that the importer could not be saddled with demurrage and ground-rent charges for the periods specified in the judgment.

    The Court opened its judgment with a striking observation, describing the dispute as:

    β€œa classic case” demonstrating how an importer was unduly harassed because of inter-se disputes among the respondents.

    Background: Import of β€œLow Alloy Scrap”

    • M/s Dhillon Overseas is an importer of ferrous and non-ferrous scrap.
    • The petitioner imported goods declared as β€œLow Alloy Scrap”, which arrived on 18 December 2023. Bill of Entry No. 9307732 was presented to Customs on 19 December 2023.
    • Customs subsequently detained the goods on 24 January 2024, taking the view that the imported goods were actually β€œWire Bundles” rather than β€œLow Alloy Scrap.”
    • This resulted in reassessment and imposition of additional duty. The reassessment was carried out on 14 February 2024, and the petitioner paid the additional duty demanded by Customs.
    • Thus, despite the initial dispute concerning the description of the imported goods, the importer complied with the reassessment and discharged the additional Customs duty.

    Customs itself directed waiver of detention charges

    • An important development followed on 18 March 2024.
    • The Customs Department issued a communication intimating that the goods had been detained and that detention charges were liable to be waived under the applicable provisions of the Sea Cargo Manifest and Transhipment Regulations, 2014 and Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009 (HCCAR).
    • Customs separately directed issuance of a detention certificate for waiver of detention charges for the period beginning from detention until the date of Out-of-Charge.
    • The respondents’ own pleadings recorded that the detention-waiver certificate was issued on 18 March 2024, while Out-of-Charge was granted on 18 April 2024.
    • Yet, despite reassessment, payment of additional duty, the detention-waiver certificate and OOC, the goods remained in custody at the Inland Container Depot.
    • That continuing non-release ultimately led the importer to approach the High Court.

    High Court had already ordered release in December 2024

    • During the pendency of the writ petition, the High Court passed an interim order on 16 December 2024 directing release of the goods upon the petitioner furnishing surety bonds equivalent to the value of the goods.
    • The Court specifically directed that, once the bonds were furnished, the goods should be released forthwith.
    • Nevertheless, the goods were still not released.
    • The petitioner consequently instituted Contempt Petition No. COCP-2388-2025 alleging non-compliance with the High Court’s interim direction. The contempt proceedings recorded that the petitioner had furnished surety bonds and that the goods nevertheless continued to remain unreleased.

    Shipping line vs custodian: importer caught in the middle

    • The judgment reveals that the continued detention arose substantially from disagreement among the respondents.
    • The custodian’s position was that although the goods were in its possession, they could not be released unless the shipping line issued a Delivery Order.
    • The shipping line, on the other hand, maintained that it had not been present when the earlier release order was passed and disputed the basis on which the release direction had been obtained.
    • The shipping line had also challenged the Customs order dated 18 March 2024 before the CESTAT, Chandigarh Regional Bench, but that challenge was dismissed on 3 February 2026.
    • The practical result was that the importer continued to be deprived of its goods while the various respondents disputed responsibility amongst themselves.

    Dispute over statement that goods were β€œperishable”

    • Another issue arose from the High Court’s interim order dated 16 December 2024, which had recorded that the imported goods were of a β€œperishable nature”.
    • The petitioner subsequently explained that no such factual representation had actually been made. Instead, the expression appeared to have entered the order inadvertently because the petitioner had relied upon earlier High Court orders concerning similar issues in which the goods had been described as perishable.
    • Counsel for the Customs authorities, who had been present when the interim order was passed, confirmed that the petitioner had not represented the goods as perishable.
    • The High Court therefore directed deletion of the observation concerning the goods being perishable.
    • Despite that clarification, the goods were still not released.

    High Court finds respondents’ conduct β€œwholly arbitrary”

    • The Division Bench ultimately found the conduct of the respondents β€œwholly arbitrary.” DHILLON OVERSEAS P&H HC
    • The Court noted that the Bill of Entry had been presented on 19 December 2023 and questioned why the goods had not been promptly examined by Customs.
    • This led the Court to examine the prescribed timelines for Customs assessment and examination.

    Customs examination and assessment must be completed promptly

    • The judgment referred to circular/instructions dated 22 August 2006, issued by the Chief Commissioner of Central Excise, Delhi Zone pursuant to an earlier High Court order in CWP-9882-2006.

    According to the judgment, those instructions contemplated that:

    • in the case of first appraisement, examination of imported goods should take place within 48 hours, followed by assessment within 24 hours; and
    • in the case of second appraisement, assessment should be undertaken within 24 hours of filing the Bill of Entry and examination completed within 48 hours.

    The instructions also provided that the importer should be informed in writing about the option of shifting the goods to a bonded warehouse under Section 49 of the Customs Act, 1962, failing which demurrage could accrue.

    This aspect of the judgment is particularly important for importers facing prolonged examination or assessment delays.

    Customs failed to adhere to the contemplated timeline

    Applying these principles, the High Court observed that Customs was expected to conclude proceedings within the timelines contemplated in the circular.

    Instead:

    • Bill of Entry was filed on 19.12.2023;
    • goods were examined/detained on 24.01.2024;
    • reassessment was completed on 14.02.2024;
    • additional duty was paid; and
    • detention-waiver communication/certificate followed on 18.03.2024.

    Yet the goods remained unreleased.

    • The Court held that once the Bill of Entry had been presented, Customs ought to have concluded the proceedings within a reasonable time.
    • It further held that the period for which the imported goods remained detained despite Customs having been informed of their arrival through the Bill of Entry rendered the impugned action arbitrary.

    Importer cannot suffer because of disputes among Customs, shipping line and custodian

    • One of the strongest aspects of the judgment concerns the Court’s treatment of the inter-se disputes among the respondents.
    • The Bench observed that the manner in which responsibility was being shifted between the concerned respondents demonstrated that:
    • the petitioner had been made to suffer for more than two years because of disputes amongst the respondents.
    • The Court further characterised the continued non-releaseβ€”despite the detention-waiver certificate and earlier judicial ordersβ€”as showing β€œcomplete apathy” on the part of the respondents in dealing with the petitioner’s claim.
    • This finding carries wider practical significance. Once Customs formalities have been completed and the competent authorities have authorised or directed release, an importer should not ordinarily be left bearing the commercial consequences of unresolved disputes among Customs, a shipping line and a custodian.

    No demurrage or ground rent liability on importer after 18 March 2024

    • The High Court then dealt directly with demurrage and ground-rent charges.
    • It held that the petitioner could not be saddled with liability for the imported goods that remained detained even after payment of the additional duty determined by Customs.
    • The Court held that the consequences of the delay in release after 18 March 2024 would have to be dealt with inter se among the respondents themselves.
    • This was followed by an even more specific direction in the operative portion of the judgment.
    • The Court clarified that the petitioner would bear no liability for demurrage or ground-rent charges from 18 March 2024 until actual release of the goods.
    • Significantly, the Court also held that even for the earlier period from 19 December 2023 to 24 January 2024, the respondentsβ€”not the importerβ€”would have to bear the demurrage and ground-rent liability.

    High Court orders release within two weeks

    • The writ petition was accordingly allowed.
    • A writ of mandamus was issued directing the concerned authorities to release the goods covered by the Bill of Entry dated 19 December 2023 within two weeks from the date of the judgment.
    • The shipping line was specifically directed to issue the necessary Delivery Order within three days from uploading of the judgment.
    • The Court refrained from imposing costs upon the shipping line in view of its statement that the Delivery Order would be issued within three days.
    • At the same time, the Court expressly left any inter-se dispute among respondents Nos. 1 to 5 open for adjudication in appropriate proceedings.

    Significance for importers and Customs practitioners

    • The judgment is particularly relevant to disputes involving detention certificates, demurrage waiver, container/custodian charges and delayed release after Customs clearance.
    • Three practical principles stand out.
    • First, Customs detention cannot become commercially indefinite. Once an importer has complied with reassessment, paid the additional duty and Customs has taken the necessary steps toward release, continued withholding requires lawful justification.
    • Second, administrative disputes cannot simply be transferred to the importer. Where Customs, a shipping line and a custodian disagree over who must issue a document or bear a particular charge, the importer should not automatically become the financial casualty of that disagreement.
    • Third, the judgment demonstrates the importance of detention-waiver documentation. Once Customs itself recognises detention and issues a certificate or communication for waiver, that document becomes highly relevant when a shipping line or custodian subsequently seeks demurrage or ground rent from the importer.

    Important distinction: detention charges, demurrage and ground rent

    • The case also illustrates the interaction between Customs decisions and commercial cargo-handling arrangements.
    • A detention certificate does not merely resolve the Customs classification or assessment dispute. It may become crucial to determining who should ultimately bear charges arising because goods remained in a Customs area during a period when the importer was prevented from obtaining possession.
    • In Dhillon Overseas, the High Court went beyond simply directing release. It expressly allocated the relevant demurrage and ground-rent burden away from the petitioner for the periods specified in its operative directions.
    • That makes the judgment particularly useful in cases where an importer has obtained OOC or a detention certificate but continues to face demands from other stakeholders before physical delivery is permitted.

    Conclusion

    The Punjab & Haryana High Court’s decision in M/s Dhillon Overseas v. Central Board of Indirect Taxes & Customs & Ors. sends a clear message against prolonged detention of imported goods caused by administrative delay and institutional disputes.

    The importer had filed its Bill of Entry in December 2023, paid the additional duty following reassessment, obtained the benefit of Customs’ detention-waiver action, and was even armed with an interim High Court order directing release. Yet the goods remained unreleased for more than two years.

    Finding this conduct arbitrary and reflective of complete apathy, the High Court directed release within two weeks and prevented the importer from being burdened with the specified demurrage and ground-rent charges. The ruling therefore has substantial practical relevance for importers, Customs Brokers, shipping lines, custodians and logistics operators, particularly where goods remain detained even after the underlying Customs assessment and clearance process has substantially concluded.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Punjab & Haryana High Court

    Disclaimer

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    Ravi Shekhar Jha – Advocate, Bar Council of Delhi

  • Delhi HC: Registrability of Composite Trademark Must Be Tested on Overall Mark, Not Individual Components

    Delhi HC: Registrability of Composite Trademark Must Be Tested on Overall Mark, Not Individual Components

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 29.09.2026

    Delhi HC: Registrability of Composite Trademark Must Be Tested on Overall Mark, Not Individual Components

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    In an important ruling on trademark distinctiveness, descriptiveness and the anti-dissection principle, the Delhi High Court has held that a composite trademark must be examined as a whole while determining its eligibility for registration and cannot ordinarily be broken into its individual components for separately testing distinctiveness.

    In Ticona Polymers, Inc. v. Registrar of Trade Marks, Justice C. Hari Shankar set aside the Senior Examiner’s refusal to register the word mark β€œCOOLPOLY”, holding that the Registrar had incorrectly dissected the mark into β€œCOOL” and β€œPOLY” and had also conflated the concepts of lack of distinctiveness under Section 9(1)(a) and descriptiveness under Section 9(1)(b) of the Trade Marks Act, 1999.

    The ruling is particularly significant because the Court held that the anti-dissection principle embodied in Section 17(1), though statutorily expressed in the context of rights flowing from registration, applies mutatis mutandis even while examining whether a mark is entitled to registration.

    Background of the case

    Ticona Polymers, Inc. had filed Application No. 2847019 on 19 November 2014 seeking registration of the word mark COOLPOLY.

    Registration was sought in:

    • Class 1 – for plastic and carbon moulding materials used in the manufacture of moulded plastic articles; and
    • Class 9 – for moulded heat sinks used in computers and their parts/components, as well as moulded electrical conductors.
    • Following preliminary scrutiny, the Registrar issued a First Examination Report dated 13 January 2016, raising objections concerning lack of distinctive character and the existence of allegedly same/similar earlier marks. The judgment records objections under Section 9(1)(a) and relative grounds under Section 11.

    Why did the Trademark Registry refuse β€œCOOLPOLY”?

    Although the relative-ground objections were subsequently dropped, the Senior Examiner refused registration principally because:

    • COOLPOLY was considered a combination of the English words β€œCOOL” and β€œPOLY”;
    • the mark as a whole was regarded as not inherently distinctive;
    • it was treated as descriptive of the goods; and
    • because the application had been filed on a β€œproposed to be used” basis, the Examiner considered that it had not acquired secondary meaning.

    The Examiner’s reasoning was essentially that no exclusive right could be claimed over descriptive words unless the mark had acquired distinctiveness through long and continuous commercial use.

    Ticona Polymers challenged this refusal before the Delhi High Court under Section 91 of the Trade Marks Act, 1999.

    Delhi High Court: COOLPOLY must be considered as a whole

    • The High Court rejected the approach adopted by the Senior Examiner.
    • Justice C. Hari Shankar held that the Registrar was required to examine the entitlement to registration of COOLPOLY as a whole, rather than breaking the mark into β€œCOOL” and β€œPOLY”.

    The Court observed:

    • β€œa mark cannot be dissected into its individual parts while examining its entitlement to registration.”
    • This became the central principle governing the Court’s analysis.

    Anti-dissection principle applies even at registration stage

    • An especially important aspect of the judgment is its interpretation of Section 17(1) of the Trade Marks Act.
    • Section 17(1) provides, in substance, that where a trademark consists of several matters, registration confers upon the proprietor the exclusive right to use the trademark taken as a whole.
    • The High Court observed that although Section 17(1) statutorily embodies the anti-dissection principle in relation to rights arising from registration, the same principle applies mutatis mutandis at the stage of determining entitlement to registration.
    • The Court reasoned that registration itself gives rise to the statutory privileges associated with a registered trademark, including protection against infringement.
    • This makes the judgment particularly relevant to examination practice before the Trade Marks Registry: a composite mark cannot be rejected merely by separately analysing its constituent elements without properly assessing the commercial impression created by the mark as a whole.

    COOLPOLY has no ordinary English meaning

    • The Court then examined the mark as a single expression.
    • It found that COOLPOLY has no etymological meaning or significance in the English language and is neither a word of common nor uncommon English usage.
    • Consequently, the Court found no basis to conclude that the expression was incapable of distinguishing the appellant’s goods from those of another trader.
    • This finding directly undermined the objection under Section 9(1)(a).

    Section 9(1)(a): Lack of distinctive character

    • The Court explained that Section 9(1)(a) concerns marks that are devoid of distinctive characterβ€”that is, marks incapable of distinguishing one person’s goods or services from those of another.
    • According to the judgment, the provision would apply where a mark is so common and lacking in distinction that it cannot function as a badge of commercial origin. The Court referred, for example, to common English words and everyday expressions, subject to the statutory exceptions relating to acquired distinctiveness and well-known trademarks.
    • COOLPOLY, however, did not fall within that category.
    • The impugned order did not find COOLPOLY to be a word of common English usage, nor did it identify another similar mark that demonstrated why COOLPOLY could not distinguish Ticona’s goods from those of other traders.

    Distinctiveness and descriptiveness are different concepts

    • The judgment also contains an important clarification concerning the relationship between Section 9(1)(a) and Section 9(1)(b).
    • The Court found that the Senior Examiner had conflated two legally distinct concepts:
    • Section 9(1)(a) – lack of distinctive character; and
    • Section 9(1)(b) – descriptiveness.
    • The Court expressly observed that the Examiner had β€œconfused the two”.
    • This distinction is important in trademark examination because a finding that a mark lacks distinctiveness is not automatically synonymous with a finding that the mark describes the goods or their characteristics.

    Was β€œCOOLPOLY” descriptive of the goods?

    • The High Court answered this in the negative.
    • Since COOLPOLY itself had no meaning, the Court held that it could not be regarded as descriptive of the goods for which registration had been sought.
    • Significantly, the Court went further and found that even if β€œCOOL” and β€œPOLY” were viewed individually, the impugned order failed to explain how either expression described the specific goods covered by the application.
    • Those goods included plastic and carbon moulding materials, moulded heat sinks for computers and moulded electrical conductors.
    • The Registrar’s decision therefore lacked adequate reasoning connecting the words to the actual nature, quality or intended purpose of the goods.

    Court finds the Examiner’s order effectively unreasoned

    • The High Court was critical of the reasoning underlying the refusal.
    • It observed that the basic prerequisites of Section 9(1)(a) had not been properly addressed and described the conclusion that β€œCOOL” and β€œPOLY” were descriptive as essentially the ipse dixit of the Senior Examiner.
    • The Court was therefore not persuaded either by the legal reasoning or the factual basis of the refusal.

    Six important findings recorded by the Delhi High Court

    The Court ultimately summarised its conclusions in six clear propositions:

    1. COOLPOLY cannot be β€œvivisected” into COOL and POLY for examining distinctiveness.
    2. COOLPOLY is not a word of common English usage.
    3. When used as a trademark, COOLPOLY is capable of distinguishing one person’s goods or services from those of others.
    4. Consequently, the prohibition contained in Section 9(1)(a) does not apply.
    5. Neither COOLPOLY as a whole nor COOL and POLY individually are descriptive of the goods covered by Ticona’s application.
    6. Therefore, the prohibition under Section 9(1)(b) also does not apply.

    These findings form the operative legal core of the judgment.

    What did the Delhi High Court finally decide?

    • The Delhi High Court held that the Senior Examiner’s order was unsustainable both in law and on facts and accordingly quashed and set it aside.
    • However, an important procedural distinction should be noted.
    • The High Court did not direct immediate registration of COOLPOLY.
    • Since Ticona’s trademark application had not yet been advertised, the Court remanded the matter to the Registrar with directions to advertise the mark and thereafter proceed in accordance with the Trade Marks Act and Trade Marks Rules.
    • The appeal was accordingly allowed, with no order as to costs.
    • Therefore, it would be inaccurate to describe the judgment as one in which the Delhi High Court itself β€œregistered” the COOLPOLY mark. Rather, it removed the absolute-ground refusal and directed the application to proceed to the advertisement stage.

    Why the judgment matters for trademark applicants

    • The ruling has practical importance for businesses seeking protection for coined, composite, portmanteau and combination marks.
    • Trademark examiners frequently encounter marks consisting of two recognisable words, prefixes, suffixes or abbreviated expressions. Ticona Polymers makes clear that the mere ability to separate a composite expression into identifiable components does not, by itself, justify refusal.
    • The correct inquiry must focus on the mark for which registration is actually sought.
    • Thus, even where individual components may carry some meaning independently, the Registrar must examine whether their combination, viewed as a whole, is capable of functioning as a trademark and whether that composite expression actually describes the goods or services concerned.
    • The judgment also demonstrates that an objection under Section 9 should be supported by reasoned analysis. Merely asserting that the components of a mark are descriptive, without explaining their relationship with the specified goods, may not satisfy the statutory test.

    Relevance to β€œBharatStamp” and subsequent trademark jurisprudence

    • The significance of Ticona Polymers is also evident from its subsequent use in Delhi High Court trademark jurisprudence.
    • The anti-dissection principle articulated in this judgmentβ€”that a mark cannot be broken into individual parts when assessing registrabilityβ€”provides a useful analytical framework for composite marks consisting of otherwise recognisable expressions.
    • The central lesson remains straightforward: the registrability inquiry concerns the trademark as applied for, not an artificial reconstruction of the mark by separately testing its constituent parts.

    Conclusion

    The Delhi High Court’s decision in Ticona Polymers, Inc. v. Registrar of Trade Marks reinforces an important principle of Indian trademark law: a composite mark must ordinarily be assessed in its entirety.

    By setting aside the refusal of COOLPOLY, the Court clarified that the Registrar could not simply split the expression into β€œCOOL” and β€œPOLY” and use that dissection to conclude that the mark lacked distinctiveness or was descriptive.

    Equally important, the judgment distinguishes lack of distinctiveness under Section 9(1)(a) from descriptiveness under Section 9(1)(b) and requires the Trademark Registry to apply these statutory grounds with appropriate reasoning. The appeal was therefore allowed, the refusal order was quashed, and the Registrar was directed to advertise the application and proceed further in accordance with law.

    Connected Matter

    Delhi High Court: Trademark Registry Cannot Dissect a Composite Mark While Testing Registrability

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Delhi High Court

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  • Delhi High Court: Trademark Registry Cannot Dissect a Composite Mark While Testing Registrability

    Delhi High Court: Trademark Registry Cannot Dissect a Composite Mark While Testing Registrability

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 28.09.2026

    Delhi High Court: Trademark Registry Cannot Dissect a Composite Mark While Testing Registrability

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    In an important ruling on trademark distinctiveness, composite marks and the anti-dissection principle, the Delhi High Court has set aside the refusal of registration of the word mark β€œBharatStamp” and held that the composite expression must be considered as a whole, rather than by separately analysing the words β€œBharat” and β€œStamp”.

    Justice Saurabh Banerjee held that β€œBharatStamp”, when taken as a composite singular mark, was a self-created, arbitrary and fanciful expression which did not directly convey a connection with the goods or services for which registration was sought. The Court consequently found the mark inherently distinctive.

    The Court allowed the appeal, set aside the Senior Examiner’s refusal order and directed that Trademark Application No. 4872027 for β€œBharatStamp” proceed for registration. Importantly, however, the Court clarified that registration of the composite mark would not give the proprietor exclusive rights over the individual words β€œBharat” or β€œStamp” separately.

    Background of the Case

    • The appeal was filed by Grey Swift Private Limited, through Mr. Shivam Singla, against the Registrar of Trade Marks under Section 91 of the Trade Marks Act, 1999 read with Rule 156 of the Trade Marks Rules, 2017.
    • The judgment was reserved on 7 April 2025 and pronounced by the Delhi High Court on 16 April 2025.
    • The dispute concerned the rejection of Grey Swift’s application for registration of:

    β€œBharatStamp”

    • as a word mark in Class 9.
    • The Senior Examiner of Trade Marks had rejected the application by an order dated 2 January 2024.

    Trademark Application for β€œBharatStamp”

    • Grey Swift had applied on 20 February 2021 for registration of β€œBharatStamp” in Class 9 on a β€œproposed to be used” basis.
    • On 20 March 2021, the Trade Marks Registry issued an Examination Report raising an objection under Section 9(1)(a) of the Trade Marks Act.
    • The Registry’s position was that the mark was non-distinctive and incapable of distinguishing the applicant’s goods from those of others.
    • The Senior Examiner subsequently maintained that objection.
    • According to the impugned order, although the applicant had submitted documents supporting distinctiveness, the Registry considered the mark to be within the public domain and common in use, lacking sufficient distinctive features to differentiate the applicant’s goods or services.
    • Application No. 4872027 was therefore refused.

    Grey Swift Challenges the Registry’s Approach

    • Before the Delhi High Court, Grey Swift argued that the Registry had adopted an inconsistent approach.
    • The appellant pointed out that the Trade Marks Registry had granted registration to several marks incorporating β€œBharat”, such as β€œBharat Bijlee”, β€œBharat Sangeeth” and β€œBharatMatrimony.com”, as well as marks incorporating β€œStamp”, including β€œStampXpress”, β€œMatrimonyStamp” and β€œStampTac”.
    • The appellant also pointed out that it had itself obtained registration for β€œBharatSign” in Class 42.
    • This formed part of its challenge to the Registry’s conclusion that β€œBharatStamp” lacked distinctiveness.

    β€œBharatStamp” Is a Novel Combination, Appellant Argues

    • The appellant submitted that β€œBharatStamp” represented an unusual juxtaposition of two terms:
    • β€œBharat” β€” a proper noun of Sanskrit origin; and
      β€œStamp” β€” an English word capable of carrying different meanings.
    • It was argued that β€œStamp” was polysemous and did not automatically direct an average consumer’s mind toward legal stamp papers or the concept of digital stamping.
    • Accordingly, the combination β€œBharatStamp” was argued to be sufficiently distinctive for registration.

    Can β€œBharatStamp” Be Split into β€œBharat” + β€œStamp”?

    • This became one of the most important issues before the High Court.
    • Grey Swift argued that a trademark must be examined in its entirety.
    • Therefore, the Registry could not dissect β€œBharatStamp” into the separate components β€œBharat” and β€œStamp” and then assess the distinctiveness of each word individually.
    • The appellant relied upon several authorities supporting the proposition that registrability of a trademark must be assessed by considering the overall composite mark.
    • This argument ultimately found favour with the High Court.

    Trademark Spectrum: Generic to Fanciful Marks

    The appellant also relied upon the traditional spectrum of trademark distinctiveness.

    Marks may broadly be classified as:

    • generic β†’ descriptive β†’ suggestive β†’ arbitrary β†’ fanciful
    • with generic marks at the weakest end of the spectrum and fanciful marks at the strongest.
    • Grey Swift initially argued that β€œBharatStamp” was at least suggestive, because an average consumer would need imagination, thought or perception before connecting the mark to the nature of the underlying product.
    • The High Court ultimately went further in its own assessment and described the composite expression as arbitrary and fanciful.

    Claim of Acquired Distinctiveness and Secondary Meaning

    • Grey Swift also argued that β€œBharatStamp” had acquired a secondary meaning within the proviso to Section 9(1).
    • The appellant submitted that its product allowed customers to procure stamp papers from more than twenty States, had been in continuous use for over six years, had a clientele comprising more than 300 prominent institutions and companies, and had received recognition including awards, nominations and empanelment by the State of Rajasthan.
    • These were submissions made by the appellant to establish acquired distinctiveness.

    Registrar Opposes Registration

    • The Registrar of Trade Marks defended the refusal.
    • It was argued that β€œBharatStamp” was not sufficiently distinctive to enable consumers to associate it specifically with Grey Swift or its product.
    • The Registrar emphasised the basic trademark principle that a mark should operate as a source identifier, enabling consumers to distinguish one trader’s goods or services from those of others.
    • The respondent also argued that monopolisation of descriptive expressions should not be permitted.

    β€œProposed to Be Used” Application and Secondary Meaning

    • The Registrar further contended that Grey Swift had applied for β€œBharatStamp” on a β€œproposed to be used” basis.
    • Accordingly, it was argued that the appellant could not rely upon acquired secondary meaning in support of an application originally filed on that basis.
    • The Registrar also objected to reliance upon subsequent materials relating to acquired distinctiveness because such material was not before the Senior Examiner when the impugned order was passed.
    • The High Court, however, subsequently addressed the temporal question of distinctiveness in the context of the statutory framework and precedent.

    Section 9(1)(a): Trademark Must Be Capable of Distinguishing Source

    • The High Court began its substantive analysis with Section 9(1)(a) of the Trade Marks Act.
    • The provision concerns absolute grounds for refusal of registration and prevents registration of a mark that is devoid of distinctive characterβ€”that is, one incapable of distinguishing the goods or services of one person from those of another.
    • The Court therefore recognised that the fundamental question was whether β€œBharatStamp”, considered as the mark actually applied for, was capable of functioning as a source identifier.

    Delhi High Court: Composite Mark Cannot Be Dissected

    • The Court held that although β€œBharatStamp” combines the two expressions β€œBharat” and β€œStamp”, the mark could not be split into its individual components for determining registrability.
    • The Court observed that it was admittedly a composite singular mark and must therefore be read and considered as a whole.

    Significantly, the Court found that β€œBharatStamp” was:

    • not a colloquial expression;
    • not a dictionary term;
    • without an independent existing meaning when considered as a whole; and
    • a self-created expression coined by the appellant.

    The Court characterised it as a β€œself-created, arbitrary and fanciful word”.

    This finding became central to the ultimate decision.

    Coined Words Can Be Registrable Trademarks

    • The High Court referred to the Supreme Court’s decision in F. Hoffmann-La Roche & Co. Ltd. v. Geoffrey Manners & Co. Pvt. Ltd.
    • The principle discussed was that even where a coined expression originates from commonly understood words, the resulting combination may create a new expression that does not immediately remind the ordinary consumer of its constituent words.
    • The High Court also referred to McCarthy on Trademarks and Unfair Competition for the proposition that even a combination of generic terms may create a composite mark producing a distinct commercial impression greater than the sum of its constituent parts.
    • This reinforced the Court’s view that individual components cannot automatically determine the legal character of the resulting composite trademark.

    Anti-Dissection Principle Reaffirmed

    • A particularly significant aspect of the judgment is its reaffirmation of the anti-dissection principle.
    • The High Court observed that β€œBharatStamp” must be taken as a whole and could not be dissected while determining whether it qualified for registration.

    Relying upon Ticona Polymers, Inc. v. Registrar of Trade Marks, the Court reiterated that:

    • β€œa mark cannot be dissected into its individual parts while examining its entitlement to registration.”
    • The Court further explained that although Section 17(1) statutorily embodies the anti-dissection principle in the context of infringement, the same principle applies mutatis mutandis at the registration stage.
    • This is one of the most practically important propositions emerging from the judgment.

    β€œBharatStamp” Held Inherently Distinctive

    • Having examined the composite mark as a whole, the Delhi High Court concluded that β€œBharatStamp” did not directly convey a connection with the relevant goods or services to an average consumer.
    • According to the Court, arriving at such a connection would require a higher degree of imagination.

    The Court therefore concluded that:

    • β€œThe said mark β€˜BharatStamp’ of the appellant is, thus, inherently distinctive.”
    • This finding directly undermined the Registry’s objection under Section 9(1)(a).

    Can a β€œProposed to Be Used” Mark Acquire Distinctiveness Before Registration?

    • The judgment also addresses an interesting temporal issue concerning distinctiveness.
    • The High Court noted that although β€œBharatStamp” had originally been filed on a β€œproposed to be used” basis, the mark could acquire distinctiveness on or before registration.
    • The Court referred to Zydus Wellness Products Limited and the earlier Division Bench decision in Marico Limited v. Agro Tech Foods Limited.
    • The principle referred to by the Court was that, read with Section 31(2), the relevant endpoint for considering acquired distinctiveness may extend to the date of registration, rather than being frozen exclusively at the date on which the application was filed.
    • This aspect of the ruling may have wider relevance for trademark applicants whose marks acquire market recognition while their applications remain pending.

    Registry’s Treatment of Other β€œBharat” Marks Also Noted

    • The High Court also considered the appellant’s argument concerning registrations granted by the same Registry to other marks containing β€œBharat”.
    • The Court recorded that the Registry had granted registration to word marks including:

    BharatPe, Bharat ScanPay, ibharath and BHARAT VISION

    as well as device marks including:

    B BHARAT BIJLEE, BHARATH SANGEETH and BHARAT ELECTRONICS

    • across different classes.
    • This formed an additional part of the factual context considered before the Court allowed the appeal.

    Delhi High Court Sets Aside Trademark Registry’s Refusal

    • Having considered the mark, statutory framework and applicable principles, the Delhi High Court allowed Grey Swift’s appeal.
    • The Court set aside the Senior Examiner’s order dated 2 January 2024 rejecting the application.
    • It then held that the mark β€œBharatStamp”, covered by Trademark Application No. 4872027, was liable to proceed for registration.
    • A copy of the judgment was directed to be forwarded to the Registrar of Trade Marks for compliance.

    No Monopoly Over β€œBharat” or β€œStamp” Individually

    The relief was accompanied by an important qualification.

    The High Court expressly clarified that registration of the composite mark:

    β€œBharatStamp”

    • would not confer an exclusive right over either of its individual componentsβ€”β€œBharat” or β€œStamp”—upon Grey Swift. GREY SWIFT PRIVATE LIMITED DHC
    • This qualification is crucial.
    • The judgment protects the composite commercial identity of BharatStamp, but it should not be interpreted as granting Grey Swift a monopoly over the standalone words β€œBharat” or β€œStamp”.

    Why the Judgment Matters for Trademark Applicants

    • The ruling carries significant implications for businesses seeking registration of coined and composite trademarks.
    • The most important lesson is that registrability cannot necessarily be determined by breaking a mark into individual words and separately asking whether each component is descriptive, common or otherwise weak.
    • The legally relevant question is what commercial impression the mark creates when viewed as a whole.
    • A combination of otherwise familiar words may produce an expression that is itself arbitrary, fanciful, suggestive or otherwise capable of identifying commercial source.
    • That is precisely the approach adopted by the Delhi High Court while examining β€œBharatStamp”.

    Importance of the Anti-Dissection Principle at Registration Stage

    • The judgment is particularly useful because the High Court did not confine anti-dissection merely to trademark infringement disputes.
    • The Court recognised that although Section 17(1) embodies the principle statutorily in the infringement context, the logic applies, mutatis mutandis, when determining whether a mark deserves registration in the first place.
    • For trademark prosecution, this can be important where an Examiner raises an absolute-ground objection by focusing heavily upon the individual meanings of constituent words while overlooking the distinctiveness of their combination.

    Practical Takeaways for Brand Owners

    • Businesses considering composite marks should assess the proposed brand from the perspective of the average consumer encountering the complete expression, rather than merely examining the dictionary meanings of its components.

    Where an objection under Section 9(1)(a) is raised, applicants may need to demonstrate how the combination:

    • creates a distinct overall commercial impression;
    • requires imagination or mental processing before connecting it to the goods or services;
    • functions as a source identifier;
    • differs from ordinary or dictionary usage; and
    • should be assessed as an integrated mark rather than through dissection.

    At the same time, applicants should recognise the distinction between obtaining protection for a composite mark and claiming exclusive rights in common or non-distinctive individual components.

    The β€œBharatStamp” judgment illustrates both sides of that principle.

    Conclusion

    The Delhi High Court’s judgment in Grey Swift Private Limited v. Registrar of Trade Marks is an important addition to Indian jurisprudence on composite trademarks, inherent distinctiveness and the anti-dissection rule.

    The Court rejected an approach that separately evaluated β€œBharat” and β€œStamp” and instead examined β€œBharatStamp” as a single composite expression.

    Finding that the expression was not colloquial or dictionary-defined, did not directly communicate the nature of the relevant goods or services to the average consumer, and required imagination to establish such a connection, the Court held it to be inherently distinctive.

    The refusal order was accordingly set aside and the trademark application was permitted to proceed for registration. However, the Court carefully preserved the distinction between the composite mark and its individual elements by clarifying that registration would not confer exclusive rights over β€œBharat” or β€œStamp” individually.

    For businesses, startups and trademark practitioners, the ruling reinforces a valuable principle: the distinctiveness of a composite brand lies in the commercial impression created by the mark as a wholeβ€”not merely in the individual meanings of the words from which it is formed.

    Connected Matter

    Delhi HC: Registrability of Composite Trademark Must Be Tested on Overall Mark, Not Individual Components

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Delhi High Court

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  • Chhattisgarh HC Grants Regular Bail in NDPS Case Involving 41 Kg Ganja; Considers Parity, No Criminal Antecedents and Prolonged Custody

    Chhattisgarh HC Grants Regular Bail in NDPS Case Involving 41 Kg Ganja; Considers Parity, No Criminal Antecedents and Prolonged Custody

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 28.09.2026

    Chhattisgarh HC Grants Regular Bail in NDPS Case Involving 41 Kg Ganja; Considers Parity, No Criminal Antecedents and Prolonged Custody

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    In a significant bail order concerning offences under the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act), the Chhattisgarh High Court has granted regular bail to an accused in a case involving the alleged recovery of 41 kilograms of ganja.

    Justice Rakesh Mohan Pandey, while allowing the first regular bail application of Anwar Munna Khan, took into consideration the overall facts and circumstances, including the nature and gravity of the allegations, completion of investigation and filing of the charge-sheet, absence of criminal antecedents, custody since 16 January 2025, grant of bail to co-accused personsβ€”including one by the Supreme Courtβ€”and the likelihood that the trial would take time to conclude.

    The order is relevant to the jurisprudence surrounding regular bail in NDPS prosecutions, particularly where prolonged custody, parity with co-accused and the stage of the criminal proceedings are placed before the Court.

    Background of the Case

    • The matter arose in MCRC No. 7605 of 2026, Anwar Munna Khan v. State of Chhattisgarh, before the High Court of Chhattisgarh at Bilaspur. The application was decided on 26 September 2026 by Justice Rakesh Mohan Pandey.
    • The applicant filed his first bail application under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) seeking regular bail.
    • He had been arrested in connection with Crime No. 5/2025, registered at Police Station Singhoda, District Mahasamund, Chhattisgarh, for alleged offences punishable under Sections 20(b) and 29 of the NDPS Act, 1985.

    Prosecution Case: Alleged Recovery of 41 Kg Ganja

    • According to the prosecution, on 16 January 2025 at approximately 11:40 hours, police received secret information regarding transportation of ganja in a Toyota Corolla.
    • The prosecution alleged that the vehicle was being escorted by another vehicle.
    • Acting upon the information, police intercepted the vehicles and allegedly recovered 41 kilograms of ganja from the possession of the applicant and other co-accused persons.
    • An offence was consequently registered, investigation followed and the charge-sheet was filed before the competent court.
    • It is important to note that these are the prosecution’s allegations; the High Court’s order granting bail does not constitute a finding of guilt.

    Applicant’s Case: False Implication, Long Custody and Parity with Co-Accused

    • Counsel appearing for the applicant contended that he was innocent and had been falsely implicated.
    • A significant part of the bail argument was based upon parity with co-accused persons who had already secured bail.

    The applicant pointed out that:

    • co-accused Anjan Kumar Mohanty had been granted bail by the Supreme Court on 19 January 2026 in SLP (Crl.) No. 18677/2025;
    • co-accused Ataulla Khan had been granted bail by the Chhattisgarh High Court on 13 April 2026 in MCRC No. 1576/2026; and
    • co-accused Husain Iqbal Shaikh had also secured bail from the High Court on 13 April 2026 in MCRC No. 2907/2026.

    It was further submitted that the applicant had remained in custody since 16 January 2025, the charge-sheet had already been filed, and conclusion of the trial was likely to take considerable time.

    State Opposes the Bail Application

    • The State opposed the application for bail.
    • However, while opposing the prayer, counsel for the State could not dispute that the other co-accused persons had already been granted bailβ€”one by the Supreme Court and others by the Chhattisgarh High Court.
    • The previous bail orders concerning the co-accused therefore became a relevant circumstance in the High Court’s consideration of the applicant’s request.

    Parity with Co-Accused Becomes a Material Consideration

    • One of the notable aspects of the order is the Court’s consideration of the treatment already accorded to the co-accused.
    • The High Court specifically recorded that Anjan Kumar Mohanty had been granted bail by the Supreme Court, while Ataulla Khan and Husain Iqbal Shaikh had received bail from the Chhattisgarh High Court.
    • The State was unable to dispute those facts.
    • The order therefore demonstrates how the status of similarly situated co-accused may become a relevant consideration in a bail proceeding, although parity is ordinarily assessed alongside the accused’s role, allegations, antecedents and other circumstances of the individual case.

    Prolonged Custody Was Also Considered

    • Another material circumstance was the period already spent in judicial custody.
    • The applicant had been incarcerated since 16 January 2025, while the High Court decided the bail application on 26 September 2026.
    • The Court expressly referred to this period of custody while assessing the application and also noted that the trial was likely to take further time.
    • The bail order thus reflects consideration not only of the allegations but also of the procedural stage of the prosecution and the likely duration before completion of trial.

    Filing of Charge-Sheet Reduced the Investigation-Stage Consideration

    • The High Court also expressly recorded that the charge-sheet had already been filed.
    • This meant that the investigation had reached the stage where the prosecution had placed its case before the competent trial court.
    • The filing of the charge-sheet was one of the circumstances considered by the Court alongside custody, absence of antecedents, bail granted to co-accused and likely delay in conclusion of trial.
    • The order, however, does not lay down that filing of a charge-sheet by itself creates an entitlement to bail in an NDPS case. It was one factor in the Court’s overall assessment.

    Absence of Criminal Antecedents

    • The Court also specifically recorded that the applicant had no criminal antecedents.
    • This was considered together with the other circumstances rather than in isolation.
    • The relevant portion of the order demonstrates that the High Court’s decision was based on the cumulative circumstances of the individual case, rather than on any single factor.

    High Court Grants Regular Bail

    • Having considered these factors, the Chhattisgarh High Court allowed the bail application.
    • The Court directed that the applicant be released upon executing a personal bond of β‚Ή50,000 with one surety for the like amount, to the satisfaction of the concerned trial court.
    • The grant of bail was also made subject to specific conditions.

    The applicant was directed:

    1. not to directly or indirectly induce, threaten or promise any person acquainted with the facts of the case so as to dissuade such person from disclosing facts to the Court;
    2. not to act in any manner prejudicial to a fair and expeditious trial; and
    3. to appear before the trial court on every date fixed until disposal of the trial.

    Bail Order Does Not Decide Guilt or Innocence

    • An important qualification appears at the end of the order.
    • The High Court expressly clarified that the observations made in the bail order were only for the purpose of deciding the bail application.
    • The trial court was directed to decide the criminal case on its own merits.
    • Accordingly, the order should not be understood as an acquittal, discharge or finding that the prosecution allegations are false.
    • It concerns the applicant’s entitlement to remain on bail during the pendency of the criminal proceedings.

    Why This Order Is Significant

    • The decision is noteworthy because it demonstrates the multi-factor assessment undertaken by a constitutional court while considering regular bail in a serious NDPS prosecution.
    • The High Court did not base its order merely on the fact that co-accused persons had obtained bail. Nor did it rely solely on the applicant’s period of incarceration.
    • Instead, the order expressly brings together several considerations:
    • parity with co-accused + absence of criminal antecedents + completion of investigation/filing of charge-sheet + prolonged custody + likely delay in completion of trial.
    • This combination ultimately persuaded the Court to grant regular bail.

    Important Point on NDPS Bail Jurisprudence

    • NDPS cases often involve stricter statutory considerations than ordinary criminal prosecutions. However, this particular four-page order does not set out a detailed analysis of Section 37 of the NDPS Act, nor does it formulate a broader proposition regarding the application of Section 37 to all cases involving commercial quantity.
    • Therefore, the decision should be reported carefully and within its factual boundaries.
    • What the order clearly establishes is that, in this applicant’s case, the High Court considered the stated combination of circumstances sufficient to grant regular bail.
    • Any broader question regarding Section 37, commercial quantity, or the conditions governing bail in other NDPS prosecutions would need to be examined on the facts and governing precedents applicable to those cases.

    Practical Takeaways for NDPS Bail Proceedings

    • The order highlights several issues that may become important while presenting a regular bail application in an NDPS prosecution:
    • Parity should be properly documented. Where co-accused have already secured bail, the relevant orders and the respective roles of the accused should be placed before the Court.
    • Custody period should be specifically demonstrated. The actual period of incarceration and likely time required for trial can become relevant considerations.
    • Criminal antecedents matter. The High Court expressly took note of the applicant having no criminal antecedents.
    • Stage of proceedings is relevant. Completion of investigation and filing of the charge-sheet were specifically recorded.
    • Bail is not an adjudication on merits. Even where regular bail is granted, the prosecution and defence remain subject to adjudication by the trial court.

    Conclusion

    The Chhattisgarh High Court’s order in Anwar Munna Khan v. State of Chhattisgarh provides a useful example of the factors that may be considered while deciding a regular bail application in an NDPS prosecution.

    Despite the prosecution allegation concerning recovery of 41 kilograms of ganja, the Court considered the applicant’s custody since 16 January 2025, absence of criminal antecedents, filing of the charge-sheet, bail already granted to co-accusedβ€”including by the Supreme Courtβ€”and the likelihood of delay in completion of trial.

    On the cumulative consideration of these circumstances, the High Court allowed the regular bail application, subject to a β‚Ή50,000 personal bond, one surety of the like amount and conditions intended to protect the fairness of the trial.

    At the same time, the Court made it clear that its observations were confined to the bail application and that the trial court must determine the case independently on its merits.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Chhattisgarh High Court

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  • CESTAT Hyderabad: Mere Suspicion Cannot Substitute β€œReasonable Belief” for Confiscation of Gold Under Customs Act

    CESTAT Hyderabad: Mere Suspicion Cannot Substitute β€œReasonable Belief” for Confiscation of Gold Under Customs Act

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 28.09.2026

    CESTAT Hyderabad: Mere Suspicion Cannot Substitute β€œReasonable Belief” for Confiscation of Gold Under Customs Act

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    In a significant ruling concerning Section 123 of the Customs Act, 1962 and the reverse burden applicable to notified goods such as gold, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad has set aside the confiscation of 100 grams of gold in the form of a kada/bangle and the penalty imposed upon the appellant.

    The Tribunal held that high purity of gold, coupled with transportation through a domestic courier, is not by itself sufficient to establish smuggled origin where there is no clandestine concealment, incriminating admission, foreign marking, falsity of purchase invoices or other reliable evidence linking the seized article with smuggled gold.

    Importantly, the Tribunal clarified that although Section 123 creates a stringent reverse burden, it does not authorise confiscation based upon β€œa presumption upon a presumption.” The Department must first have material capable of supporting the statutory requirement of a reasonable belief that the goods are smuggled; thereafter, the claimant’s explanation and evidence must be objectively evaluated.

    The ruling has considerable relevance for jewellers, bullion traders, manufacturers and persons dealing in domestically purchased gold, particularly where Customs proceedings are initiated on the basis of purity, mode of transportation or suspicion regarding provenance.

    Background of the Case

    • The dispute concerned 100 grams of gold in the form of a kada/bangle, which the appellant, Manik Chand Soni, claimed had been manufactured from gold lawfully purchased in the domestic market.
    • The Customs Department treated the gold as being of foreign/smuggled origin, resulting in confiscation of the gold and imposition of penalty.
    • The appeal arose from denovo proceedings following an earlier CESTAT remand. The final hearing took place on 18 August 2026, and the Tribunal delivered its decision on 21 September 2026.
    • The dispute was therefore not simply whether the gold was of high purity. The central legal issue was whether the circumstances justified invocation of Section 123 and, if so, whether the appellant’s evidence of lawful domestic acquisition sufficiently discharged the statutory burden.

    The Appellant’s Case: Gold Was Purchased from Registered Domestic Dealers

    The appellant relied upon specific purchase invoices issued by:

    • M/s Augmount Enterprises Pvt. Ltd., Hyderabad, and
      M/s Preeti Jewellers, Secunderabad.
    • According to the appellant, 999-purity gold purchased under these invoices was used for manufacturing the seized kada/bangle.
    • In the earlier round of proceedings, CESTAT had found that neither the Adjudicating Authority nor the Commissioner (Appeals) had properly examined or verified this documentary evidence. The matter had consequently been remanded for fresh adjudication specifically requiring examination of those documents.

    Before CESTAT in the subsequent appeal, the appellant contended that:

    • he was a registered manufacturer;
    • the seized article carried no foreign marking;
    • the gold had been purchased from registered domestic dealers against tax invoices;
    • the transactions were reflected in books of account/GST records;
    • the jewellery was being transported for job-work; and
    • purity alone could not establish foreign or smuggled origin.

    Customs Department Relied Upon Section 123

    • The Department invoked Section 123 of the Customs Act, 1962, which provides for a reverse burden of proof in relation to specified goods once they are seized in the reasonable belief that they are smuggled goods.
    • Customs particularly relied upon the Calcutta High Court’s judgment in Commissioner of Customs (Preventive), Kolkata v. Shri Anil Kumar Soni & Shri Anil Kumar Goud, CUSTA Nos. 30 & 31 of 2025, decided on 31 March 2026.
    • The Department argued that the absence of foreign markings is not conclusive and that once the requisite reasonable belief exists, the burden falls upon the person concerned to establish lawful acquisition.
    • This placed the interpretation and application of Section 123 at the centre of the appeal.

    The Core Question Before CESTAT

    • The Tribunal framed the principal issue as whether Customs had established the foundational circumstances necessary to invoke the reverse burden under Section 123, and, if so, whether the appellant had satisfactorily discharged that burden.
    • This distinction became critical.
    • Section 123 does not mean that the mere recovery of gold automatically proves smuggling. There must first be circumstances capable of generating the statutory reasonable belief that the goods are smuggled.

    CESTAT Examines the Calcutta High Court Judgment

    • CESTAT accepted and followed the legal proposition laid down by the Calcutta High Court that a town or inland seizure does not automatically prevent application of Section 123.
    • Similarly, the absence of foreign markings does not, by itself, negate a reasonable belief that the goods may be smuggled.
    • However, the Tribunal emphasised another equally important part of that principle: reasonable belief must arise from tangible material and the totality of surrounding circumstances and cannot rest merely upon suspicion.
    • The Tribunal then distinguished the facts before the Calcutta High Court.
    • In that case, approximately 2 kilograms of gold had been carried in a specially stitched waist belt beneath the carrier’s clothes; statements under Section 108 reportedly admitted foreign origin; purity was around 99.5–99.6%; and the explanation regarding melting of old ornaments was unsupported by refinery or melting records.
    • Those circumstances were materially different from Manik Chand Soni’s case.

    Why the Tribunal Found the Present Case Different

    • The seized article in the present dispute was not unmarked bullion secretly concealed on a carrier.
    • It was 100 grams of gold in the form of a kada/bangle, transported through a domestic courier together with other jewellery/gold articles.
    • More importantly, the appellant had identified the asserted source of the gold from the investigation stage itself and produced purchase invoices from identified domestic suppliers.
    • The appellant’s case was that the input itself was 999-purity gold purchased domestically and that the kada was manufactured from that material.
    • This factual distinction proved important.

    The β€œIdentity Mismatch” Distinction

    • The Tribunal carefully analysed why the reasoning adopted in the Calcutta High Court case could not mechanically be applied.
    • In that matter, the claim concerned 22-carat jewellery allegedly melted into bullion having purity of 99.5–99.6%, without refinery or melting documentation explaining how the lower-purity jewellery became such high-purity bullion.
    • CESTAT described this as an β€œidentity mismatch.”
    • By contrast, Manik Chand Soni’s specific case was that the input gold itself was 999 purity and had been purchased against identified domestic GST invoices.
    • Therefore, if those invoices genuinely represented purchases of 999-purity gold and were duly accounted for, the unexplained conversion problem present in the Calcutta High Court case did not arise.
    • This distinction is one of the most important aspects of the decision.

    Section 123 Does Not Permit β€œPresumption Upon Presumption”

    The Tribunal’s observations on Section 123 have wider significance.

    It held that although Section 123 undoubtedly places a reverse burden upon the person concerned once notified goods are seized in the reasonable belief that they are smuggled:

    • β€œSection 123 does not permit confiscation on the basis of a presumption upon a presumption.”

    Accordingly, two stages must be kept analytically distinct:

    • Stage 1 – Customs must possess material capable of supporting the statutory reasonable belief that the goods are smuggled.
    • Stage 2 – The claimant’s explanation and evidence must then be objectively evaluated for the purpose of determining whether the reverse burden has been discharged.

    The Tribunal rejected both extremes.

    • Absence of foreign markings does not automatically take gold outside Section 123. But equally, every piece of high-purity gold found inland cannot automatically be presumed smuggled merely because gold is a notified commodity.

    What Factors Should Be Examined?

    According to the Tribunal, the decision must depend upon the cumulative evidence, including:

    • manner in which the goods were carried;
    • nature of the article;
    • statements recorded during investigation;
    • documentary provenance;
    • accounting trail; and
    • surrounding circumstances.

    This provides an important evidentiary framework for future Section 123 disputes involving gold.

    Domestic Courier Transportation Is Not the Same as Clandestine Concealment

    • The Tribunal also made an important distinction concerning transportation.
    • There was no finding that the kada/bangle carried a foreign inscription or marking. Nor was there an allegation of concealment comparable to the specially stitched waist belt involved in the Calcutta High Court matter.
    • The Tribunal observed that transportation through a domestic courier for stated job-work purposes, without further incriminating material, could not be equated with physical concealment designed to avoid detection.
    • This is particularly relevant for jewellery businesses that routinely send precious-metal articles between manufacturers, job-workers, artisans and other business locations.

    Customs Must Verify Specific GST Invoices Instead of Simply Rejecting Them

    • Another significant part of the ruling concerns documentary evidence.
    • The appellant did not merely make a vague assertion that the gold had been purchased somewhere in the local market. He identified specific registered suppliers and specific tax invoices.

    CESTAT held that once objectively verifiable documents are produced, the Adjudicating Authority is required to examine their:

    • genuineness, and
      nexus with the transaction.
    • They cannot simply be rejected because the claimant is unable to establish the complete historical movement of every gram of gold.
    • This is a practically significant finding because gold is a fungible commodity, and an insistence upon establishing an uninterrupted physical identity of every gram may be commercially unrealistic in ordinary jewellery manufacturing.

    Burden Under Section 123 Can Be Discharged on Preponderance of Probability

    CESTAT acknowledged that the burden under Section 123 is stringent.

    However, the Tribunal held that it is a burden capable of being discharged by:

    • preponderance of probability, together with
      reliable documentary and circumstantial evidence.
    • The Tribunal expressly observed that a jewellery manufacturer is not required to establish an impossible, uninterrupted physical identity of fungible gold from the stage of purchase through manufacture unless the circumstances of the particular case reasonably require such proof.
    • This aspect of the judgment may have substantial importance in future gold-confiscation proceedings.

    Department Must Examine Whether the Invoices Are False or Fabricated

    • The earlier remand had specifically required verification of the purchase documents.
    • CESTAT therefore observed that if, despite that remand, there was no positive finding based upon enquiry from the issuing dealers that the invoices were false or fabricated or that the transactions recorded in them never occurred, the documentary evidence could not simply be brushed aside.
    • In other words, Customs cannot merely demand documents and then disregard them without conducting the verification necessary to determine their authenticity and evidentiary value.

    High Purity Alone Is Insufficient

    Ultimately, the Tribunal found that the evidentiary circumstances supporting confiscation in the Calcutta High Court matter were absent in this appeal.

    It held that:

    mere purity of gold + transportation through domestic courier, without evidence of:

    • clandestine concealment;
    • incriminating admission;
    • foreign markings;
    • falsity of purchase invoices; or
    • other reliable material connecting the seized article with smuggled gold,

    was insufficient to sustain the Department’s conclusion.

    This does not mean purity is irrelevant. Rather, the ruling establishes that purity must be assessed alongside the complete factual and documentary matrix.

    CESTAT Sets Aside Confiscation and Penalty

    CESTAT concluded that the appellant’s documentary explanation regarding domestic acquisition could not be rejected merely on conjecture.

    Consequently, it held that the findings sustaining confiscation and penalty were unsustainable.

    The Tribunal therefore:

    • set aside the impugned order insofar as it related to Manik Chand Soni;
    • set aside the confiscation of the 100 grams of gold/kada-bangle;
    • set aside the penalty imposed upon the appellant; and
    • allowed the appeal with consequential relief, if any, in accordance with law.

    Why This Judgment Matters for the Jewellery and Bullion Industry

    • The ruling has practical importance beyond the facts of one seizure.
    • Gold and precious-metal businesses commonly operate through chains involving bullion suppliers, manufacturers, artisans, job-workers, couriers and retailers. Gold purchased in one form may subsequently undergo manufacturing, conversion or incorporation into jewellery.
    • Against that commercial background, requiring a dealer or manufacturer to prove an uninterrupted physical identity of every gram of fungible gold could create an evidentiary burden substantially different from proving its legitimate commercial provenance.
    • CESTAT’s ruling recognises this distinction while preserving the statutory operation of Section 123.
    • The judgment therefore does not dilute Section 123. Instead, it emphasises disciplined application of the provision: Customs must examine the circumstances giving rise to reasonable belief, while the claimant must support lawful acquisition through credible documentary and circumstantial evidence.

    Practical Compliance Lessons for Jewellers and Gold Traders

    • Businesses dealing in gold should treat this decision as a reminder of the importance of maintaining a strong documentary trail. In particular, jewellers, bullion dealers and manufacturers should preserve purchase invoices, GST records, stock registers, accounting entries, job-work documentation, courier records, manufacturing records and supplier details in a manner capable of establishing a coherent nexus between legitimate purchases and business stock.
    • Where Customs questions the origin of gold, a defence based simply upon the absence of foreign markings may not be sufficient. Conversely, where identifiable domestic suppliers, tax invoices and accounting records establish legitimate provenance, those documents should be specifically placed before the adjudicating authority and their verification sought.
    • The evidentiary strength lies not in any single document but in the consistency of the commercial and accounting trail.

    Conclusion

    • The decision in Manik Chand Soni v. Commissioner of Customs, Hyderabad provides an important clarification on the evidentiary operation of Section 123 of the Customs Act, 1962.
    • CESTAT Hyderabad has recognised that Section 123 creates a stringent reverse burden, but that burden does not eliminate the requirement for an objective examination of evidence.
    • The decision draws a crucial distinction between reasonable belief and mere suspicion.
    • High purity, inland recovery or domestic transportation may form part of an investigation, but confiscation cannot automatically follow merely because the commodity involved is gold. Where a claimant produces specific domestic purchase invoices and supporting commercial records, those documents must be objectively tested for genuineness and nexus.

    The Tribunal’s ultimate conclusion is particularly significant: in the absence of clandestine concealment, incriminating admissions, foreign markings, falsified purchase invoices or other reliable material linking the article to smuggled gold, mere purity and domestic courier transportation were insufficient to sustain confiscation and penalty.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: CESTAT Hyderabad

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  • Rajasthan HC Grants Bail Where Samples Were Drawn from Just One of Five Bags

    Rajasthan HC Grants Bail Where Samples Were Drawn from Just One of Five Bags

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 26.09.2026

    Rajasthan HC Grants Bail Where Samples Were Drawn from Just One of Five Bags

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Rajasthan High Court has granted bail to an accused in an NDPS case involving an alleged recovery of 79.400 kg of Doda Chura (poppy straw), after finding that samples for forensic examination were taken from only one out of five bags allegedly recovered from him.

    Justice Ganesh Ram Meena held that since no samples were drawn from the remaining four bags, only the material contained in the sampled bag could, at this stage, be treated as the alleged contraband. That bag weighed 19.80 kg, which was below the commercial quantity threshold. Consequently, the stringent restrictions governing bail under Section 37 of the Narcotic Drugs and Psychotropic Substances Act, 1985 were not attracted in the circumstances considered by the Court.

    Case Arose From Alleged Recovery of 79.400 Kg Doda Chura

    • Sitaram alias Udham Meena filed his second bail application under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).
    • The proceedings arose from FIR No. 94/2025, registered at Police Station Harnavda Shahji, District Baran, Rajasthan, for offences under Sections 8, 15 and 25 of the NDPS Act.
    • The petitioner’s first bail application had earlier been dismissed as withdrawn by the High Court on 8 May 2026.
    • According to the FIR, the alleged contrabandβ€”Doda Churaβ€”was recovered from the petitioner’s possession in five separate bags, having a combined weight of 79.400 kg.

    Samples Drawn From Only Bag β€˜C’

    • The petitioner’s principal argument concerned the manner in which the samples were drawn.
    • According to the inventory report prepared before the Judicial Officer, two samples were taken only from the packet/bag marked β€˜C’. No samples were taken from the remaining four bags for examination by the Forensic Science Laboratory (FSL).
    • The defence therefore argued that there was no forensic material to establish that the substances contained in bags A, B, D and E were also contraband.
    • It was submitted that only the contents of bag C could be treated as alleged contraband for the purpose of considering bail.
    • Crucially, bag C weighed only 19.80 kg. The petitioner argued that this was below commercial quantity and hence the restrictions contained in Section 37 of the NDPS Act would not apply.

    State: All Five Bags Contained Similar Material

    • The Public Prosecutor opposed the second bail application.
    • The State argued that samples were taken from only one bag because the material found in the other bags appeared to be the same or similar.
    • It further contended that the total alleged recovery was above commercial quantity and therefore the restrictions under Section 37 of the NDPS Act continued to apply.
    • The High Court, however, did not accept that contention for the purpose of deciding the bail application.

    Court Examines Inventory and Judicial Officer’s Certificate

    • The High Court examined the record and found that the alleged recovery made on 31 May 2025 had been packed in five separate bags marked A, B, C, D and E.
    • The inventory report and certificate issued by the Additional Chief Judicial Magistrate No. 2, Chhabra, Baran on 6 June 2025 showed that only two samples, marked F and G, were drawn from bag C.
    • No sample was drawn from bags A, B, D or E.
    • This factual circumstance became decisive for the bail determination.

    Unsampled Bags Could Not Be Treated as Contraband at Bail Stage

    • The High Court held that in the absence of samples from the other four bags, the material contained in bag C alone could be treated as the alleged contraband for the purpose under consideration.

    The Court recorded:

    • β€œthe material which has been found to be in bag marked as-C can only be treated to be alleged contraband”
    • Since bag C weighed 19.80 kg, the quantity attributable to the sampled material was below commercial quantity.
    • The ruling is significant because the total physical recovery alleged by the prosecution was 79.400 kg. However, for the bail assessment, the Court did not aggregate the contents of the four bags from which no sample had been taken with the sampled bag merely because the substances appeared similar.

    Rajasthan HC Relies on Hariram v. State of Rajasthan

    • The petitioner relied upon the Rajasthan High Court’s recent order in Hariram v. State of Rajasthan, S.B. Criminal Miscellaneous Bail Application No. 741/2026, decided on 20 April 2026.
    • In Hariram, six bags were allegedly recovered containing Doda Chura. However, samples had been drawn from only two bagsβ€”marked A and E.
    • The combined weight of those two sampled bags was 45.400 kg, below the commercial quantity of 50 kg applicable to poppy straw.
    • The Court in Hariram observed that because no samples had been taken or sent to the FSL from the remaining bags, those bags could not be treated as containing contraband merely on assumption, particularly when there was nothing on record showing that the entire recovered material had first been mixed and thereafter sampled.
    • The same reasoning was applied in Sitaram’s case.

    Supreme Court’s Puranmal Jat Decision Considered

    The Hariram order, reproduced in the present judgment, also relied upon the Supreme Court’s decision in:

    • Puranmal Jat v. State of Rajasthan, Criminal Appeal No. 3394/2023 arising out of SLP (Crl.) No. 10670/2023, decided on 2 November 2023.
    • In that case, the alleged recovery was approximately 35 kg and 150 grams of Doda Posh/poppy straw, while the commercial quantity was 50 kg.
    • The Supreme Court observed that because the recovered quantity was below commercial quantity, the restriction on grant of bail under Section 37 of the NDPS Act did not apply. The accused had also remained in custody for more than seven months and the charge sheet had already been filed.

    Section 37 NDPS Act Not Attracted to 19.80 Kg Sampled Bag

    • Applying the above reasoning, the Rajasthan High Court treated 19.80 kg in bag C as the relevant alleged contraband quantity for the bail consideration.
    • Because this was below commercial quantity, the defence contention was that the special restrictions under Section 37 were not attracted, and the Court’s reasoning proceeded on that basis.
    • This distinction was particularly important because Section 37 imposes stringent conditions for release on bail in cases involving commercial quantity.
    • The order, however, is a bail-stage determination and does not finally adjudicate the nature or quantity of the entire seized material.

    More Than One Year in Custody

    • The Court also took into consideration the period of incarceration.
    • Sitaram had remained in custody since 31 May 2025, meaning that by the date of the order on 25 September 2026, he had spent more than one year in custody.
    • Considering the sampling issue, the quantity of the sampled bag and the period of custody, the High Court found it just and proper to enlarge him on bail.
    • Importantly, the Court expressly stated that it was doing so without expressing any opinion on the merits or demerits of the case.

    Second Bail Application Allowed

    • The Rajasthan High Court accordingly allowed the second bail application.

    The Court directed Sitaram alias Udham Meena to be released upon furnishing:

    • a personal bond of β‚Ή1,00,000; and
    • two sureties of β‚Ή50,000 each,

    to the satisfaction of the Trial Court.

    He was also directed to remain present before the Trial Court, or any court to which the proceedings may be transferred, on subsequent hearing dates and whenever required.

    Bail Can Be Cancelled for Similar Future Offence

    • The High Court imposed an additional safeguard.
    • It directed that if the petitioner is found involved in any other criminal case of a similar nature in the future, the prosecution would be at liberty to move an application seeking cancellation of his bail. Sitaram Alias Udham Meena RHC
    • Thus, the order grants liberty to the accused pending trial but leaves the prosecution free to seek cancellation if the stipulated condition is breached.

    Cases Referred

    Two decisions were central to the reasoning recorded in the order:

    1. Hariram v. State of Rajasthan, S.B. Criminal Miscellaneous Bail Application No. 741/2026, decided on 20 April 2026 β€” relied upon for the principle that where multiple bags are separately seized but only some are sampled, unsampled bags cannot automatically be treated as contraband in the absence of FSL examination or evidence that the entire material was mixed before sampling.
    2. Puranmal Jat v. State of Rajasthan, Criminal Appeal No. 3394/2023 arising from SLP (Crl.) No. 10670/2023, decided on 2 November 2023 β€” Supreme Court decision noting that where recovered poppy straw was below the stipulated commercial quantity, the Section 37 restriction did not apply.

    Key Takeaway

    The ruling underscores the importance of representative sampling and forensic examination in multi-bag NDPS recoveries, particularly when the prosecution seeks to rely upon the combined weight to invoke the stringent commercial-quantity bail restrictions under Section 37.

    Where five separate bags were allegedly recovered but the inventory showed that samples were taken from only one bag, the Rajasthan High Court treated only the 19.80 kg contained in that sampled bag as the alleged contraband for the purpose of deciding bail. Since that quantity was below commercial quantity and the accused had spent more than a year in custody, the Court granted bail.

    The ruling should nevertheless be read in its procedural context: the High Court did not acquit the accused or finally hold that the remaining four bags contained no contraband.

    Its determination was confined to the second bail application, and the Court expressly refrained from expressing any opinion on the merits of the prosecution case.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Rajasthan High Court

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  • Delhi High Court: Different Trademark Classes Cannot Justify Use of Identical Corporate Name

    Delhi High Court: Different Trademark Classes Cannot Justify Use of Identical Corporate Name

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 26.09.2026

    Delhi High Court: Different Trademark Classes Cannot Justify Use of Identical Corporate Name

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Delhi High Court has held that dissimilarity in the nature of businesses carried on by two companies is not a relevant consideration for refusing rectification of a corporate name under Section 16 of the Companies Act, 2013, where the later company’s name is identical with or too closely resembles the name of an existing company.

    Allowing a writ petition filed by Refex Industries Limited, the Court set aside a 2018 order of the Regional Director, Northern Region, Ministry of Corporate Affairs (MCA), which had refused to direct Refex Hotels Private Limited to change its name merely because the two companies operated in different industries.

    The High Court directed Refex Hotels Private Limited to change its name within four weeks to a name that is neither identical to nor resembles the name of Refex Industries or any other existing company.

    Refex Industries Was Incorporated in 2002

    • Refex Industries was originally incorporated on 13 September 2002 under the name Refex Refrigerants Private Limited. It became a public company in March 2006 under the name Refex Refrigerants Limited, and its name was subsequently changed to Refex Industries Limited on 22 November 2013.
    • The company is engaged in the manufacture and refilling of refrigerant gases and owns the registered trademark β€œREFEX”, bearing Trademark No. 1559466 in Class 1 with effect from 17 May 2007.
    • Refex Hotels Private Limited, on the other hand, was incorporated in Punjab on 27 January 2017.

    Refex Industries Approaches MCA for Change of Company Name

    • On 27 April 2018, Refex Industries filed Form RD-1 under Section 16(1)(b) of the Companies Act, 2013 before the Regional Director, Northern Region, MCA.
    • It sought rectification of the corporate name β€œRefex Hotels Private Limited” on the ground that the later company’s name contained the word β€œREFEX”, which was identical to Refex Industries’ registered trademark.
    • However, the Regional Director rejected the application on 23 August 2018.
    • The Regional Director accepted that Refex Industries owned the registered trademark β€œREFEX” in Class 1 but reasoned that Refex Hotels operated in the hotel industry. Since the parties’ businesses fell in different classes under trademark law, their activities were considered entirely different.
    • Refex Industries challenged that decision before the Delhi High Court.

    Refex Industries: β€˜REFEX’ Is the Distinctive Part of Both Corporate Names

    • Before the High Court, Refex Industries argued that β€œREFEX” was not only its registered trademark but also the distinctive feature of its corporate identity.
    • It submitted that nine other companies in its group also used β€œREFEX” as the distinctive part of their names. It further argued that Refex Hotels had adopted the name without obtaining its consent.
    • According to Refex Industries, whether the two entities operated in different industries was irrelevant to the statutory exercise under Section 16 of the Companies Act.

    Refex Hotels Relies on Different Nature of Businesses

    • Refex Hotels defended its corporate name primarily on the ground that the parties operated in entirely different fields.
    • Refex Industries operated in the refrigerant-gas industry falling under Class 1, whereas Refex Hotels operated in the hospitality sector falling under Class 43.
    • It argued that there was therefore no likelihood of confusion between the parties.
    • Refex Hotels also contended that its name had been chosen in good faith and that several other companies had subsequently been incorporated with names containing the word β€œREFEX”.
    • The Regional Director similarly maintained before the High Court that the scope of the parties’ businesses was β€œdiametrically different” and that use of β€œREFEX” by the hotel company was neither intended to deceive consumers nor likely to cause confusion.

    Delhi HC Finds β€˜REFEX’ Prominent and Distinctive in Both Names

    • The High Court began by directly comparing the corporate names.
    • It found that β€œREFEX” was the prominent and distinctive element of both Refex Industries Limited and Refex Hotels Private Limited and held that the names were structurally and phonetically identical in that respect.
    • The Court also noted the chronology.
    • Refex Industries had been incorporated in 2002 and had secured trademark registration for REFEX with effect from 2007. Refex Hotels, in contrast, was incorporated only in January 2017.
    • Significantly, Refex Hotels itself admitted that β€œREFEX” was a coined word, although it claimed that it had adopted the word in good faith for its hospitality business.

    Likelihood of Confusion Is Not Necessary Under Companies Act

    • A central issue before the High Court was whether the Regional Director was justified in applying a trademark-style test based on the nature of the parties’ businesses and likelihood of consumer confusion.
    • The Court answered this in the negative.
    • Relying on CGMP Pharmaplan (P) Ltd. v. Regional Director, Ministry of Corporate Affairs, the Court explained that the statutory authority’s powers concerning company names are wider than the inquiry ordinarily undertaken in a passing-off action.
    • The relevant question is whether the subsequently registered corporate name too nearly resembles an existing registered name.
    • Where that requirement is satisfied, it is unnecessary to additionally establish likelihood of deception or consumer confusion.
    • The earlier CGMP Pharmaplan ruling had specifically held that the Central Government’s jurisdiction in relation to corporate names is distinct from the jurisdiction exercised by civil courts in trademark or passing-off disputes.

    Different Businesses Do Not Save a Similar Corporate Name

    • The Delhi High Court further relied on Everstone Capital Advisors Pvt. Ltd. v. Everstone Ventures LLP.
    • In Everstone, the Court had held that the statutory framework governing corporate names does not impose a requirement that the earlier and later entities must operate in the same line of business before rectification can be ordered.
    • The judgment also recognised the equivalence of the relevant provisions concerning LLP names with Section 16 of the Companies Act, 2013.

    The principle was expressed clearly in the precedent:

    • β€œirrespective of dissimilarity in business”
    • a later registration may violate the statutory restriction where the relevant names are impermissibly similar.
    • Accordingly, the High Court held in the Refex dispute that the difference between the refrigerant and hospitality businesses was not a relevant criterion for the Regional Director to decline jurisdiction under Section 16.

    Corporate Name Protection Is Different From Trademark Classification

    • The ruling draws an important distinction between trademark classification and the statutory regulation of corporate names.
    • The Regional Director had essentially reasoned that because Refex Industries’ trademark was registered in Class 1 while Refex Hotels operated in the hospitality sector, the use of the common word REFEX did not justify rectification.
    • The High Court rejected that approach.
    • For the statutory company-name inquiry, the crucial consideration was the identity or close resemblance between the corporate namesβ€”not merely whether the businesses fell within the same trademark class.
    • Thus, the absence of Refex Industries’ trademark registration in the hotel or hospitality class could not, by itself, justify retention of the later corporate name.

    β€˜REFEX’ Was Already Used Across Refex Group Companies

    • The High Court also considered the established use of REFEX within the petitioner’s corporate group.
    • It found that when Refex Hotels sought incorporation on 27 January 2017, seven companies belonging to the same Refex group were already on the register with β€œREFEX” forming a prominent part of their corporate names.
    • Six of these group companies had been incorporated in 2008, 2010 and 2015, apart from the petitioner itself.
    • This chronology reinforced the petitioner’s status as the prior adopter of the distinctive expression.

    Name β€˜Refex Hotels’ Held Undesirable Under Section 4(2)(a)

    • The Court proceeded to apply Section 4(2)(a) of the Companies Act, 2013.
    • The provision stipulates that the name stated in a company’s memorandum shall not be identical with or resemble too nearly the name of an existing company registered under the Companies Act or any previous company law.
    • In view of the identity of the prominent and distinctive part of the parties’ corporate names, the Court concluded that the name adopted by Refex Hotels was β€œundesirable” within the meaning of Section 4(2)(a).

    Refex Hotels Had No Reasonable Ground to Adopt Coined Word β€˜REFEX’

    • The High Court also rejected Refex Hotels’ attempt to characterise β€œREFEX” as descriptive of hospitality services.
    • The Court noted an internal contradiction: Refex Hotels had itself acknowledged that REFEX was a coined word, while simultaneously arguing that it was descriptive of its hospitality business.
    • The Court found the descriptive-use argument both unpersuasive and unsubstantiated.
    • The documents showed that Refex Industries was the prior adopter of the coined word. The Court consequently held that Refex Hotels had β€œno reasonable grounds” for adopting REFEX as part of its corporate name.

    Claim That Other Companies Used β€˜REFEX’ Was Unsubstantiated

    • Refex Hotels additionally argued that several other companies appearing on the corporate register used REFEX in their names.
    • However, the High Court found that no details of those alleged companies had been placed on record.
    • The defence was therefore rejected as unsubstantiated.
    • Refex Industries, by contrast, maintained that the other entities using REFEX were companies belonging to its own group.

    Four-Year Delay Does Not Defeat Petition

    • The Regional Director had also raised the issue of delay and laches.
    • The impugned order was passed in August 2018, whereas Refex Industries approached the High Court in October 2022.
    • The Court nevertheless declined to dismiss the petition on this ground. It took into consideration the Supreme Court’s order in In Re: Cognizance for Extension of Limitation, under which limitation stood suspended for the intervening period from 15 March 2020 to 28 February 2022.

    Delhi High Court Sets Aside Regional Director’s Order

    • The High Court ultimately allowed Refex Industries’ writ petition and set aside the Regional Director’s order dated 23 August 2018.
    • It directed Refex Hotels Private Limited to change its name within four weeks to another name which is not identical to or does not resemble the name of Refex Industries or any other existing company.
    • The directors of Refex Hotels were also directed to ensure compliance, while the Regional Director was directed to issue appropriate directions for implementation of the Court’s order.
    • Accordingly, Refex Industries Limited succeeded in the writ petition.

    Cases Referred by the Delhi High Court

    The judgment discusses and/or refers to several authorities on corporate-name protection and related principles, including:

    • CGMP Pharmaplan (P) Ltd. v. Regional Director, Ministry of Corporate Affairs, 2010 SCC OnLine Del 2387;
    • Everstone Capital Advisors Pvt. Ltd. v. Everstone Ventures LLP, 2019:DHC:1578;
    • Mondelez Foods Private Limited v. Regional Director (North), Ministry of Corporate Affairs & Ors., 2017:DHC:3382;
    • Mahendra and Mahendra Paper Mills Limited v. Mahindra and Mahindra Limited, AIR 2002 SC 117;
    • Montari Overseas Ltd., 1996 PTC 16 (Delhi);
    • International Trade & Exhibitions India Pvt. Ltd. v. Regional Director North, 2011 SCC OnLine Del 4011;
    • K.G. Khosla Compressors Ltd. v. Khosla Extrakting Ltd., AIR 1986 Del 181; and
    • In Re: Cognizance for Extension of Limitation, Suo Motu Writ Petition (Civil) No. 3 of 2020.

    Key Takeaway

    The judgment reinforces an important distinction between corporate-name rectification under the Companies Act and conventional trademark infringement or passing-off analysis.

    For proceedings concerning corporate names, the statutory inquiry is not necessarily dependent on whether the companies operate in the same industry or whether actual consumer confusion can be established. Where the prominent and distinctive portion of a later company’s name is identical with or too closely resembles that of a prior existing company, dissimilarity in business cannot by itself justify retention of the later name.

    The Delhi High Court therefore found the Regional Director’s reliance on the distinction between Class 1 refrigerant products and Class 43 hospitality services legally irrelevant to the exercise of jurisdiction under Section 16.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Delhi High Court

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  • CESTAT Mumbai Allows Customs Duty Exemption on Dowtherm Heat Transfer Fluid Under SHIS Scheme

    CESTAT Mumbai Allows Customs Duty Exemption on Dowtherm Heat Transfer Fluid Under SHIS Scheme

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 26.09.2026

    CESTAT Mumbai Allows Customs Duty Exemption on Dowtherm Heat Transfer Fluid Under SHIS Scheme

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai has held that Dowtherm RP Heat Transfer Fluid/Dowtherm A Heat Transfer Fluid, used for the initial charging and continuous operation of a Continuous Polycondensation (CP) Plant for manufacturing polyester products, falls within the definition of β€œcapital goods” and is consequently eligible for Customs duty exemption under Notification No. 104/2009-Customs dated 14 September 2009.

    Setting aside the Commissioner’s order, the Tribunal held that the thermic fluids fulfilled the statutory requirements of the Status Holders Incentive Scrip (SHIS) Scheme under the Foreign Trade Policy and that Customs was not justified in denying the exemption merely because the goods were chemicals falling under Chapter 29 or were described as inputs under SION.

    Background of the Dispute

    • Wellknown Polyesters Limited was engaged in manufacturing Polyester Filament Yarn (PFY), Polyester Oriented Yarn (POY), Fully Drawn Yarn (FDY), Draw Textured Yarn (DTY) and polyester chips at its Daman manufacturing facility.
    • For its manufacturing operations, the company had imported a Continuous Polycondensation Plant from Oerlikon Barmag under an EPCG authorisation during April–July 2012. The plant was imported without thermic fluid.
    • Subsequently, the company imported 3,01,296 kg of Dowtherm RP Heat Transfer Fluid/Dowtherm A Heat Transfer Fluid, valued at approximately β‚Ή9.86 crore, through Bills of Entry filed in October 2012. Customs duty involved was approximately β‚Ή2.55 crore.
    • Instead of paying the duty in cash, Wellknown Polyesters utilised eight SHIS scrips issued by the DGFT under the Status Holders Incentive Scrip Scheme and claimed exemption under Notification No. 104/2009-Customs. The goods were initially cleared by Customs extending the exemption.

    DRI Objects to SHIS Benefit

    • The Directorate of Revenue Intelligence (DRI), Ahmedabad Zonal Unit subsequently initiated an investigation on the ground that Notification No. 104/2009-Customs permitted duty-free import of capital goods, whereas Dowtherm heat-transfer fluid was, according to the Department, not capital goods.
    • DRI also relied upon the Standard Input Output Norms (SION), under which Dowtherm/Therminol and heat-transfer oil were identified as permitted inputs for manufacture of Polyester Partially Oriented Yarn and Polyester Filament Yarn. The Department therefore treated the material as an input rather than capital goods.
    • A Show Cause Notice dated 14 May 2013 consequently demanded approximately β‚Ή2.55 crore Customs duty with interest under Section 28(1) of the Customs Act, 1962, besides proposing confiscation under Section 111(o) and penalty under Section 112(a).
    • The Commissioner confirmed the duty demand and interest but refrained from confiscating the goods because they were no longer physically available and did not impose the proposed penalty. Wellknown Polyesters challenged that order before CESTAT.

    Appellant: Thermic Fluid Was Integral to Continuous Polycondensation Plant

    • The appellant argued that although the CP Plant and thermic fluid had been imported separately, both were required to operate together.
    • The thermic fluid was charged into the heaters, piping and vessels and thereafter continuously circulated in a closed loop between the heaters and reactors. The polyester polycondensation process required temperatures of approximately 270Β°C–300Β°C under high vacuum, making the thermic fluid critical for providing precise high-temperature heat while maintaining low system pressure.
    • The appellant relied upon the definition of β€œcapital goods” under the Foreign Trade Policy and Notification No. 104/2009-Customs, arguing that it was broad enough to cover goods required directly or indirectly for manufacture, including items necessary for the initial setting up and functioning of plant and machinery.
    • It also relied upon CBEC’s earlier clarification concerning transformer oil, under which oil required for filling/topping up a transformer was considered part of the equipment because the transformer could not function without it.

    Revenue: Chemical Falling Under Chapter 29 Cannot Be Capital Goods

    • The Department maintained that the imported thermic fluid was a chemical classifiable under Chapter 29 and therefore could not be regarded as plant, machinery, equipment or an accessory.
    • The Commissioner’s reasoning was that even though the chemical was indirectly used in manufacturing, its nature did not change into that of plant, machinery, equipment or accessories. The Department also relied upon the fact that SION treated Dowtherm as an input/raw material for polyester production.
    • CESTAT was therefore required to decide whether denial of the exemption under Notification No. 104/2009-Customs for the October 2012 imports was legally sustainable.

    CESTAT Examines SHIS Scheme and Definition of β€˜Capital Goods’

    • The Tribunal examined the Foreign Trade Policy 2009–2014 and observed that the objective of the SHIS Scheme was to promote investment in technology upgradation.
    • Paragraph 3.17.5 of the FTP permitted Duty Credit Scrips to be used for import of inputs or goods, including capital goods, subject to the stipulated conditions. More importantly, the FTP defined β€œcapital goods” broadly as plant, machinery, equipment or accessories required directly or indirectly for manufacture or production, including specified items such as refractories for initial lining and catalysts for initial charge.
    • Notification No. 104/2009-Customs, issued under Section 25(1) of the Customs Act, 1962, similarly exempted capital goods and specified components/spares/parts imported against SHIS Duty Credit Scrips from Customs duties, subject to its conditions.
    • CESTAT found the definition of β€œcapital goods” under the Customs notification and the FTP to be substantially identical.

    Thermic Fluid Critical to Functioning of CP Plant

    • The Tribunal accepted the technical evidence concerning the role played by Dowtherm in the Continuous Polycondensation Plant.
    • It observed that the thermic fluid enabled the plant to provide precise high-temperature heat while maintaining low pressure, thereby permitting efficient continuous polycondensation and energy-efficient manufacture of high molecular weight polyester.
    • On that basis, CESTAT concluded that the imported goods fulfilled the statutory requirements of the SHIS Scheme.
    • A particularly important factual finding arose from the Chartered Engineer’s Certificate. Out of the total 3,01,296 kg of imported thermic fluid, 2,92,920 kgβ€”approximately 97.2%β€”was used as a one-time/initial charge in the CP Plant’s Electric Thermal Oil Heater Boiler.
    • The fluid thereafter enabled continuous high-temperature operation at very low pressure for the polycondensation process.
    • The technical diagrams reproduced on pages 13–15 of the order further illustrate the closed-loop recirculation of Dowtherm between the thermic-fluid heater and CP Plant, the stages of polyester manufacture where heat transfer is required, and the Electric Thermal Oil Heater Boiler arrangement.

    Capitalisation in Books Also Supported Appellant

    • CESTAT additionally noted that the imported thermic fluid had been capitalised in Wellknown Polyesters’ books of account, as certified by its Chartered Accountants on 29 May 2026.
    • The Tribunal regarded this financial treatment as further evidence supporting the appellant’s case that the imported goods were treated as capital goods.

    Accordingly, the Bench held:

    • β€œthe impugned goods are covered under the definition of β€˜capital goods’”
    • and were therefore eligible for exemption under Notification No. 104/2009-Customs.

    CESTAT Relies on Reliance Communications Infrastructure

    • The Tribunal found support in Reliance Communications Infrastructure v. Commissioner of Customs, 2009 (240) E.L.T. 461 (Tri.-Bang.).
    • In that case, a Gas Suppression System included HFC 227 EA gas. The Tribunal had held that Customs could not dissect an integrated system and treat the gas required for its functioning as a mere consumable when the EPCG licence covered the complete system.
    • CESTAT applied the same reasoning to the thermic fluid, observing that where a material is essential to the functioning of the plant, its character cannot be determined merely by isolating it from the system in which it operates.

    Transformer Oil Analogy Applied to Dowtherm

    • CESTAT also referred to CBEC Circular No. 344/60/97-CX dated 22 October 1997, concerning transformer oil.
    • The circular recognised that a transformer cannot function without transformer oil and that the equipment cannot be regarded as complete without the oil filled into it.
    • Applying the same analogy, CESTAT held that if the Continuous Polycondensation Plant cannot function without thermic fluid, the fluid has to be treated as part of the plant, notwithstanding the absence of a specific Customs clarification concerning thermic fluid.

    Cases Cited by Wellknown Polyesters

    The appellant relied upon several judicial authorities in support of its interpretation of capital goods:

    S. No.CaseCitation
    1Reliance Communications Infrastructure v. Commissioner of Customs2009 (240) E.L.T. 461 (Tri.-Bang.)
    2Commissioner of Central Excise, Coimbatore v. Jawahar Mills2001 (132) E.L.T. 3 (S.C.)
    3Bharti Airtel Limited v. Commissioner of Central Excise, Pune2025 (391) E.L.T. 3 (S.C.)
    4Chief Commissioner of Central Goods and Service Tax & Ors. v. Safari Retreats Private Limited & Ors.2024 SCC OnLine SC 2691
    5Scientific Engineering House (P) Ltd. v. Commissioner of Income Tax, Andhra Pradesh(1986) 1 SCC 11
    • These authorities are expressly recorded in the appellant’s submissions.
    • Of these, the final reasoning expressly discusses and applies Reliance Communications Infrastructure.

    Final Decision: Wellknown Polyesters Wins Appeal

    CESTAT concluded that the Commissioner’s order denying the benefit of Notification No. 104/2009-Customs dated 14 September 2009 by refusing to treat Dowtherm RP/Dowtherm A Heat Transfer Fluid as capital goods β€œdoes not stand the scrutiny of law.”

    The Tribunal consequently set aside the Order-in-Original dated 7 October 2016 and allowed Wellknown Polyesters’ appeal in its favour.

    The ruling is significant for the interpretation of capital goods under export-promotion schemes, particularly where a material may chemically resemble an input or consumable but is technically required as an initial charge and thereafter continuously circulates as an integral part of plant operation.

    It also demonstrates that classification of an item as a chemical under Chapter 29, or its description as an β€œinput” under SION for a different regulatory purpose, is not by itself determinative of whether it can qualify as capital goods under the specific language and objective of an exemption notification.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: CESTAT Mumbai

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  • Delhi High Court: Trademark Refusal Must Be Based on Reasoned Analysis, Not Mere Similarity of Marks

    Delhi High Court: Trademark Refusal Must Be Based on Reasoned Analysis, Not Mere Similarity of Marks

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 25.09.2026

    Delhi High Court: Trademark Refusal Must Be Based on Reasoned Analysis, Not Mere Similarity of Marks

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Delhi High Court has set aside the refusal of Lucy Group Ltd.’s application for registration of the trademark β€œGEMINI” in Class 09, holding that the Registrar of Trademarks failed to consider crucial factual and legal submissions placed before it.

    Justice Jyoti Singh held that the Registrar’s order was β€œunreasoned, non-speaking and reflects non-application of mind”, observing that a quasi-judicial authority is legally required to consider all relevant contentions and issues raised by the parties before arriving at its decision.

    The High Court, however, did not decide whether GEMINI was ultimately entitled to registration. Instead, it remanded the trademark application to the Registrar for fresh consideration and directed a decision within 10 weeks after hearing Lucy Group.

    Background: Lucy Group’s β€˜GEMINI’ Trademark Application

    • Lucy Group Ltd. filed the appeal under Section 91 of the Trade Marks Act, 1999, challenging the Registrar’s order dated 17 April 2025, which had refused registration of its trademark under Application No. 5247072 dated 14 December 2021 in Class 09.
    • According to the company, it first used the GEMINI mark in India at the Elecrama trade event in Bengaluru on 13 February 2016, where it promoted and displayed products to potential customers and business associates.
    • Lucy Group subsequently filed a convention trademark application in Great Britain on 16 June 2021 and, on 14 December 2021, applied to register GEMINI in India as a convention application.

    Trademark Registry Cites Four Earlier β€˜GEMINI’ Marks

    • On 4 January 2022, the Registry issued an Examination Report raising an objection under Section 11(1) of the Trade Marks Act.
    • Four earlier marks were cited on the ground that Lucy Group’s proposed GEMINI mark was identical or similar to marks already appearing on the Register in respect of identical or similar goods.
    • Following hearings and written submissions, the Registrar refused registration on 17 April 2025. Lucy Group thereafter filed Form TM-M on 15 May 2025 seeking detailed grounds for refusal, but according to the appeal, those grounds were never supplied.

    Lucy Group: Registrar Failed to Compare the Actual Goods

    • Lucy Group’s principal grievance was that the Registrar had merely noted the existence of four earlier registrations and concluded that there was a likelihood of confusion because of the allegedly similar goods.
    • The company argued that the Registrar had failed to undertake a meaningful comparative analysis of the nature and function of the goods, their trade channels and the relevant consumers.
    • It also challenged the Registrar’s finding that adoption of GEMINI was not bona fide, arguing that this was not a ground of refusal under Section 11(1).

    Lucy Group’s GEMINI Products Are Industrial SCADA and RTU Systems

    • A central aspect of Lucy Group’s case was the highly specialised nature of the products for which registration was sought.
    • The application covered industrial-grade products including SCADA (Supervisory Control and Data Acquisition) systems and GEMINI RTUs (Remote Terminal Units).
    • The RTUs were described as multipurpose units intended for advanced feeder automation and for controlling and monitoring pole- and ground-mounted medium-voltage switchgear.
    • Lucy Group relied on product catalogues, technical specifications and its corporate profile to show that it operated in the specialised field of power automation, grid monitoring and infrastructure control systems.
    • The company also claimed continuous and extensive use of GEMINI in India since February 2016 and argued that the specialised nature, application and trade channels of its goods distinguished them from the products covered by the cited registrations.

    Cited Mark 1: β€˜Wires and Cables’

    • The first cited GEMINI registration, No. 728627 in Class 09, covered β€œwires and cables.”
    • Lucy Group argued that wires and cables were basic electrical transmission components, whereas its SCADA systems, RTUs and industrial switchgear were advanced control systems integrated with software and supplied as part of specialised engineering projects.
    • It further claimed that the two marks had co-existed in the Indian market since 2016 without reported confusion and that GEMINI had acquired secondary distinctiveness among its customers.

    Cited Mark 2: Television Broadcasting and Entertainment Products

    • The second cited registration, No. 953168, was also for GEMINI in Class 09 and belonged to Sun TV Network Limited.
    • Lucy Group argued that the goods associated with this registration related to the television broadcasting and entertainment sector, whereas its own products concerned industrial power-distribution and control solutions.
    • According to Lucy Group, the nature, purpose and consumer base of the respective goods were entirely different. It also informed the Court that it had filed a rectification petition on the ground of non-use against the second cited mark on 30 July 2022, which remained pending.

    Third Mark Abandoned; Fourth Filed on β€˜Proposed to Be Used’ Basis

    • Lucy Group also raised specific objections regarding the remaining two cited marks.
    • It submitted that Registration No. 3164101 for GEMINI in Class 09 had been abandoned before the date of the impugned order.
    • As regards the fourth mark, Application No. 3939124, Lucy Group pointed out that it had been filed on a β€œproposed to be used” basis and that its filing was later than Lucy Group’s claimed first use of GEMINI.
    • The detailed comparison reproduced on pages 5–9 of the High Court order further contrasted Lucy Group’s specialised industrial products with the goods associated with each cited mark, including wires and cables, broadcasting/electronic goods, consumer electronics and portable spectroscopic instruments.

    Same Trademark Class Does Not Automatically Mean Goods Are Similar: Lucy Group’s Argument

    • Lucy Group argued that goods cannot be treated as similar merely because they fall within the same Nice Classification class.
    • According to the company, the correct enquiry was whether the respective goods were commercially and functionally similar, rather than whether there was a theoretical or broad overlap in their classification.
    • It also emphasised that Section 11 requires consideration of likelihood of confusion β€œon the part of the public”, yet the Registrar had not identified the relevant public or adequately examined the consumers involved.

    Registrar Defends Refusal Under Section 11

    • The Registrar defended the order, arguing that the GEMINI application was barred by earlier identical marks appearing on the Trade Marks Register.
    • It contended that Lucy Group’s mark was phonetically, visually and structurally identical to the cited marks and that the relevant goods were similar or identical, creating a likelihood of confusion under Section 11(1).
    • In particular, the Registrar argued that electrical goods such as wires, cables and switchgear may travel through the same trade channels and reach common classes of consumers such as electricians, contractors and engineers.
    • According to the Registrar, treating specialised industrial products as wholly different from cables created an artificial distinction because cables and switchgear could be closely connected in the modern electrical industry.

    Delhi High Court Finds Crucial Submissions Were Ignored

    • After examining the Examination Report, Lucy Group’s reply and its detailed written submissions, the High Court found a fundamental defect in the Registrar’s decision-making process.
    • Justice Jyoti Singh observed that none of the crucial submissions had been considered.
    • The registration had essentially been refused because the applied-for mark was considered phonetically and visually similar to the cited marks and the goods were treated as similar.
    • However, the Registrar had not examined the distinctions Lucy Group sought to establish regarding the nature and function of the competing goods.

    Registrar Failed to Consider Abandoned and Later-Filed Marks

    The Court specifically noted that the Registrar had also failed to consider Lucy Group’s submissions that:

    • the third cited mark had been abandoned; and
    • the fourth cited mark was filed on a β€œproposed to be used” basis much after Lucy Group’s claimed first use.

    The High Court observed that these crucial facts and legal issues were not even referred to in the impugned order.

    Significantly, the Court stated that had these matters been considered and adjudicated, the decision might have been different.

    Quasi-Judicial Authorities Must Deal With Relevant Contentions

    • The Court then reiterated an important principle governing administrative and quasi-judicial decision-making.
    • It held that even a quasi-judicial authority is under a legal obligation to consider all contentions and issues raised by the parties, insofar as they are relevant, before taking a decision.

    Viewed against that requirement, the Registrar’s order was held to be:

    • β€œclearly unreasoned, non-speaking and reflects non-application of mind.”
    • This became the decisive basis for judicial interference.

    High Court Does Not Decide Trademark Registration on Merits

    • Importantly, the Delhi High Court expressly stated that it was not entering into the merits of Lucy Group’s claim for registration.
    • The Court therefore did not finally rule that the cited GEMINI marks were dissimilar, that there was no likelihood of confusion, or that Lucy Group was necessarily entitled to registration.
    • Instead, it remanded the matter to the Registrar for a fresh decision.
    • This distinction is significant because Lucy Group secured a procedural appellate victory, while the substantive question of whether GEMINI should ultimately be registered remains for reconsideration by the Trademark Registry.

    Fresh Decision Within 10 Weeks

    The High Court directed the Registrar to freshly consider Application No. 5247072 after hearing Lucy Group and taking into account all the points raised in response to the Examination Report.

    The Registrar was specifically directed to consider documents already on record, including the:

    • priority documents;
    • user affidavit;
    • written submissions dated 6 August 2024;
    • written submissions dated 17 February 2025; and
    • written submissions dated 15 March 2025.

    The fresh decision must be taken within 10 weeks from 27 March 2026. The Court also directed that no new documents would be permitted before the Registrar during the reconsideration.

    The appeal was accordingly allowed and disposed of.

    Why the Judgment Matters for Trademark Examination

    • The ruling highlights an important procedural safeguard in trademark registration proceedings. The existence of an identical or similar earlier mark may trigger scrutiny under Section 11, but a refusal order must still demonstrate that the Registrar has considered the material factual and legal submissions placed by the applicant.
    • Where an applicant specifically distinguishes the competing goods by their function, market, consumer base and trade channelsβ€”or raises issues concerning abandonment, priority and claimed prior useβ€”those contentions cannot simply be ignored.
    • At the same time, the judgment should not be understood as establishing a general rule that goods within the same class are necessarily dissimilar merely because their applications differ. The High Court deliberately left the merits open for the Registrar’s fresh determination.

    Key Takeaway

    The Delhi High Court’s decision reinforces that trademark refusal orders must be reasoned, speaking orders reflecting consideration of relevant evidence and contentions.

    A mechanical conclusion based on similarity of marks and broadly stated similarity of goods, without addressing material objections raised by the applicant, may not withstand appellate scrutiny.

    For Lucy Group, the judgment reopens the path to registration of GEMINI in Class 09, but does not itself grant the trademark registration. The Registrar must now reconsider the application on its merits within the timeline fixed by the Court.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Delhi High Court

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