Companies affected in IPR cases can press criminal charges as 'victim': SC

The Supreme Court has held that a company can be called a “victim”’ under the Code of Criminal Procedure and it can file an appeal against an acquittal order in criminal cases, including violations of intellectual property rights (IPRs).

 

This means that corporate entities affected by violations of such rights could pursue criminal proceedings as the victim.

 

A Bench of Justice Ahsanuddin Amanullah and Justice Prashant Kumar Mishra was hearing a plea by Asian Paints, which had suffered losses due to the accused allegedly selling counterfeit paints.

 

Asian Paints moved the apex court against the Rajasthan High Court judgment dismissing its appeal against the acquittal of Ram Babu, who was allegedly found selling counterfeit paints under the brand name “Asian Paints”.

 

The High Court had dismissed the appeal under the proviso to Section 372 CrPC, reasoning that an agent of Asian Paints and not the company was the “complainant” and therefore the latter couldn’t file an appeal against the acquittal.

 

The Supreme Court, while disagreeing with this reasoning, questioned whether the appellant would fall under the definition of “victim” in terms of Section 2(wa) read with the proviso to Section 372 of the CrPC, or whether Section 378 of the CrPC would prevail in the facts and circumstances of the present case.

 

The proviso to Section 372 grants victims the right to appeal against acquittal of the accused, conviction for a lesser offence, and inadequate compensation. If the court orders insufficient compensation for the victim, the victim can appeal.  

 

The apex court Bench held it was clear that “Section 2(wa) of the CrPC has thoughtfully accorded an expansive understanding to the term ‘victim’ and not a narrow and restrictive meaning”.

 

“In the present case, there cannot be any two opinions that ultimately, it is the Appellant who has suffered due to the counterfeit/fake products being sold/attempted to be sold as having been manufactured by the Appellant. The Appellant would suffer financial loss and reputational injury if such products would be bought by the public under the mistaken belief that the same belonged to the Appellant’s brand,” the judgment said.

 

Asian Paints, a manufacturer in the paints industry for over 73 years, had engaged IPR consultancy firm M/s Solution to track and take action against counterfeiters. During a market investigation in February 2016, the firm had found counterfeit products resembling Asian Paints’ trademarks at the shop Ganpati Traders in Tunga, Rajasthan, owned by Ram Babu. After police inspection, 12 buckets of allegedly fake paint were seized.

 

The trial court acquitted Ram Babu, after which Asian Paints challenged the order in the High Court. The High Court dismissed Asian Paints’ appeal.

 

Advocate Ajay Singh and his team from Singh Law Chambers appeared for Asian Paints (petitioner). Advocate Thakur Sumit and others appeared for the respondents.   ALSO READ: Asian Paints divests entire stake in Akzo Nobel India for ₹734 crore