HINDUSTAN LEVER LTD. AND ANR. V. RAKESH GOYAL AND ORS 2026:DHC:1821:

DATE: 28/02/2026

COURT: High Court of Delhi

BENCH: Justice Tejas Kalia

FACTS:

The suit, filed by Hindustan Unilever Limited (Plaintiff No. 1) and Procter & Gamble Home Products Private Limited (Plaintiff No. 2), leading FMCG giants with decades of operations in India and global renown for products like shampoos, cosmetics, soaps, detergents, and health care items seeks a permanent injunction against Defendants (Rakesh Goyal and family members) for manufacturing, selling, distributing, and advertising counterfeit goods infringing the Plaintiffs' trademarks (e.g., Sunsilk, Clinic Plus, Lakme, Head & Shoulders, Ariel) and copyrights in packaging artwork. These marks, registered since the 1950s-1990s under Class 3 and 5 for relevant categories, are backed by extensive use, advertising, and market leadership, with Plaintiffs owning exclusive rights through prior adoption, statutory registration, and commissioned designs. Joint and independent police raids on October 17, 2002, January 29, 2003, and May 10, 2003, at Defendants' premises seized large quantities of counterfeit items like Fair & Lovely cream, Sunsilk and Clinic Plus shampoos, Lakme and Elle 18 cosmetics, Ariel detergent, and Head & Shoulders shampoo, often in replicated packaging with poor printing or reused bottles, revealing a family-run counterfeiting operation motivated by the Plaintiffs' brand success.

Procedurally, an ex-parte ad-interim injunction was granted on May 11, 2005, confirmed on September 9, 2014, till suit disposal; issues were framed on January 16, 2006, with preliminary issues (valuation and stay due to criminal cases) resolved in Plaintiffs' favor on April 26, 2006. Defendant No. 2's death led to impleadment of heirs (Defendants Nos. 1 and 3) on May 10, 2022, but they ceased appearance, resulting in ex-parte proceedings against them on October 19, 2022, and February 2, 2023. Plaintiffs closed evidence on August 11, 2023, filed a convenience compilation on April 29, 2025, and arguments concluded on November 14, 2025. Defendants denied involvement in their written statement despite raid seizures but led no evidence, cross-examined no witnesses, and offered no defense, while Plaintiffs proved proprietorship via registrations and raid memos.

ISSUES:

The key issues framed included whether Plaintiffs are proprietors of the trademarks (e.g., Sunsilk, Lakme, Ariel) and copyrights in packaging artwork; whether Defendants infringed these rights and passed off counterfeits as Plaintiffs' goods; entitlement to damages and interest; whether the plaint was duly authorized and valued; and Defendants' defenses of misjoinder of parties, suit stay due to pending criminal cases, and Plaintiffs' alleged tax evasion via pirated goods distribution.

JUDGEMENT WITH REASONING:

The Delhi High Court decreed the suit in Plaintiffs' favor on all issues except those onus-bound to Defendants, granting a permanent injunction restraining Defendants, their heirs, and agents from manufacturing, selling, distributing, or advertising counterfeit goods infringing Plaintiffs' marks and copyrights; directed joint and several payments of Rs. 2,50,000 in damages by Defendants Nos. 1, 3, and 4 within four weeks (with 9% interest thereafter till realization); awarded actual costs under the Commercial Courts Act, 2015, to be taxed; and dismissed Defendants' counter-claims for lack of evidence.

The Court held Plaintiffs as proprietors of the marks and artistic works under common law (prior use since mid-20th century) and statute (registrations from 1950s-1990s in Classes 3/5 for FMCG categories), evidenced by affidavits, sale invoices, and advertising records demonstrating arbitrary, coined terms with transborder reputation and market leadership, entitling them to exclusive statutory and passing-off protection. On infringement and passing off, raid seizures (memos proving replicated packaging, logos, and poor-quality counterfeits of identical goods like shampoos and detergents) established visual/structural similarity causing deception in trade channels, eroding goodwill and harming consumers via inferior products; Defendants' non-appearance, lack of denial evidence, and continued operations post-raids inferred mala fide intent to free-ride reputation, satisfying Sections 29 (Trade Marks Act, 1999) and 51 (Copyright Act, 1957) tests for substantial reproduction and likelihood of confusion. Preliminary issues were affirmed: plaint duly authorized by competent attorneys; no stay warranted as civil suits proceed independently of criminal raids; and valuation/court fees proper after Plaintiffs abandoned accounts claim.

For damages, the Court assessed notional Rs. 2,50,000 (jointly on active Defendants) based on raid scales indicating large-scale operations, Plaintiffs' litigation costs/raids, and precedents like Strix Ltd. v. Maharaja Appliances Ltd. (2023) for broad estimation in undefended cases, rejecting higher claims absent sales data but awarding punitive elements per Time Inc. v. Lokesh Srivastava (2005) to deter hardened counterfeiters. Interest at 9% post-four weeks was deemed reasonable sans evidence otherwise, balancing equity. Defendants' onus-bound issues (misjoinder, tax evasion) failed for zero evidence, reinforcing ex-parte decree's validity; costs were actual per commercial rules, considering Defendants' contumacious conduct and infringement volume, ensuring holistic relief against economic harm, consumer deception, and revenue loss.

ANALYSIS:

This CS(COMM) 256/2018 judgment exemplifies robust IP enforcement against FMCG counterfeiting, affirming multinational Plaintiffs' (Hindustan Unilever and P&G) dominion over iconic marks like Sunsilk and Ariel through layered protections statutory registrations, prior use, and copyright in packaging, while penalizing family-run rackets exploiting replication for quick profits. By leveraging raid memos as irrefutable proof of deceptive similarity and consumer harm (inferior goods risking health, evading taxes), the Court invoked the Trade Marks Act's expanded infringement scope (post-2017 amendments) and Copyright Act's artistic work safeguards, underscoring that non-participation equates to admission, justifying ex-parte injunctions and notional damages to deter recidivists without exhaustive quantification burdens on rights-holders.

The ruling advances anti-counterfeiting jurisprudence by harmonizing civil remedies with criminal raids, rejecting stays and emphasizing passing-off's goodwill dilution test amid identical trade channels, per precedents like Time Inc. (punitive damages for economic offenders). It balances deterrence (9% interest, actual costs) with proportionality (modest Rs. 2,50,000 award), signaling Delhi High Court's zero-tolerance for "hardened" infringers, yet cautioning on evidence-led assessments; this precedent bolsters FMCG brands' proactive raid strategies, fostering market integrity and consumer trust in a sector plagued by spurious products.