Category Archives: Indian Laws

Grey Market Investigations – Indian Law and Issues Involved

A Grey market is also spelled as ‘The Gray Market’. Grey market is also known as Parallel Market. The reason behind calling a Grey Market a Parallel market is because the products or goods have been manufactured with the consent of the brand owner but are sold outside through distribution channels that are not authorized by the original manufacturer or trade mark proprietor. Grey market goods are products traded outside the authorized manufacturer’s channel before they are issued in an initial public offering (IPO) or bond issue.

Mainly, there are three types of grey markets.

Firstly, A ‘Parallel Importation’ in which a product is priced lower in the home market than in the foreign market, and if the cost of arbitrage is less than the price difference, that becomes an advantage for a gray marketer and parallel importing can be done from the country of production to the export market.

Secondly, ‘Reimportation’ this can be defined as if a product in the foreign market is cheaper than in the home market, and if the cost of arbitrage is less than the price difference, then for gray marketer reimportation is profitable.

Thirdly, ‘Lateral Importation’ in this form, if the price of a product differs between two countries and the product, is not produced in either one, the product from one country is sold to the other through unauthorized channels. Example 35mm cameras of any Japanese manufacturer imported from Hong Kong to Europe and Kodak film made in the United States, from Taiwan to Germany.

There are many grey market investigation companies in India such as India mart, Greves group, Ascon detectives and Authentic Investigation and Detective Private Limited situated in Delhi, India.

Role of the Investigators

Investigators deliver an extensive range of services and advice on brand protection and tell the companies that vital IP matters which can decrease the level of grey market of your product. Investigators can also obtain concrete evidence, to identify sellers/ resellers, and to undertake the critical issues.

They also locate witnesses and set up undercover operations wherever required to get into the nerves of the supply and manufacturing chain.

Indian Law Involved

In India, parallel importation is complicatedly linked to the principle of exhaustion of rights under the Trademarks act, 1999. The principle of exhaustion of rights is included under Article 6 of the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPs), which clearly states that “nothing in this agreement shall be used to address the issue of exhaustion of intellectual property rights”. Hence each state is entitled either to prohibit or to allow parallel imports within its own legal framework.

Basically two major issues are involved in the context of parallel importation and trademarks in India:

  1. Whether parallel importation constitutes infringement under Section 29 of the Trademarks Act.
  2. Whether India recognizes the principle of international exhaustion of rights under Section 30 of the Trademarks Act.

Answer to both the above questions will be given in a combined form below:

Section 30 of the Trademark Act, deals with the limits on the effect of a registered trademark. Subclause 3 prevents the trademark owner from prohibiting the sale of goods in any geographical area on grounds of trademark right. Further Subsection 4 states that subsection 3 shall not apply when the condition of goods is changed or impaired after they have been put on the market.

The new provisions give right to the proprietor of a registered trademark to oppose further dealings in the goods if legitimate or legal laws/reasons exist. The new subclauses 3 & 4 recognize the principle of ‘Exhaustion of rights’ of the trademark owner.

The point to be noted that Sec. 30 sub-cl. (3) & (4) of the Indian Trademarks Act, 1999 deals with the exhaustion of rights after first sale of goods. 

There is a famous case – Kapil Wadhwa v. Samsung Electronics:

The issue, in this case, is whether the Indian Trade Marks Act, 1999, embodies the International or National Exhaustion principal when the Registered Proprietor of Trade Mark places the goods in the market under the Registered Trade Mark.

Here, in this case, the defendant dealer of Samsung printers not sold the goods as per the norms including affixing an MRP, no manufacturer guarantee and the most interesting, “not earmarked to be sold in the Indian market”. Further grievance was that the defendant was operating a website whereby the imported Samsung printers were offered at a price much lower than that of the plaintiffs. The learned single judge passed the order but the defendant is not satisfied as applied for an appeal to higher court.

 The Higher Court hereby, after listening to all the facts of the case and taking into consideration all the evidences directed the defendant to follow International Exhaustion of rights.

  Conclusion

Grey market is a market where goods are sold through distribution channels without the authorization of by the original manufacturer. To overcome the problem of grey market a company or person should appoint investigators or should take proper legal measures to overcome their loss and solve the problem of grey marketing.

(The content of this article is intended to provide a general guide to the subject matter).

Consensual Cohabitation Between Two Adults Of Same Sex Not Illegal – Uttarakhand High Court (June 19, 2020)

“Consensual cohabitation between two adults of the same sex cannot in our understanding be illegal far or less crime because its a fundamental right which is being guaranteed to the person under article 21 of the Constitution of India, which inheres within its ambit and it is wide enough in its amplitude to protect the inherent right of self-determination with regards to one’s identity and freedom of choice with regards to the sexual orientation of choice of the partner,” Justice Sharad Kumar Sharma observed.

“Even if the parties, who are living together though they are belonging to the same gender; they are not competent to enter into wedlock, but still they have got a right to live together even outside the wedlock. It would further be not out of a pretext to mention that a live-in relationship has now being recognized by the legislature itself, which has found its place under the provisions of protection of women from Domestic Violence Act,” the bench held.

The bench further remarked that while deciding cases such as the instant one, the court should not engage itself in social mores. It held that the right to liberty and freedom of choice are “constitutional values” that cannot be abridged.

“…Social values and morals they do have their space, but they are not above the constitutional guarantee of freedom assigned to a citizen of a country. This freedom is both a constitutional as well as a human right. Hence, the said freedom and the exercise of jurisdiction in writ courts should not transgress into an area of determining the suitability of a partner to marital life, that decision exclusively rests with the individual themselves that the State, society or even the court cannot intrude into the domain.”

The court added,

“[It] is the strength provided by our constitution, which lies in its acceptance of plurality and diversity of the culture. The intimacy of marriage, including the choice of partner, which individually make, on whether or not to marry and whom to marry are the aspects which exclusively lies outside the control of the State or the Society.”

Right to reservation Not a Fundamental Right – Supreme Court Of India (June 11, 2020)

The Supreme Court bench of Justice L Nageswara Rao, Krishna Murari and S Ravindra Bhat said that “Right to reservation is not a fundamental right”. The Court while replying to the DMK petitioner Article 32 is available only for violation of Fundamental Right. The Apex Court said so while rejecting pleas challenging the Centre’s decision to not grant 50% reservation to OBCs in Tamil Nadu medical colleges.

At last court told that the parties are free to approach Madras High Court.

Execution or Enforcement of Indian and Foreign Judgments

Judgment is a decision of a court regarding the rights and liabilities of parties in a legal action or proceeding. Judgment is a final part of the court case. Enforcement of Judgment means enforcing a judicial decision depends upon its nature and also on the discretion of the court. If a judgment does nothing more than declaring the legal right of a person, or a simple divorce decree or a declaratory judgment (Ex. Interpreting a contract or a statue) then no enforcement is needed.

If a judgement orders a party to do or to refrain from doing a certain act or an injunction is issued to a person or an organization, the court itself takes a first step towards enforcement or execution of a judgment by holding in contempt anyone who refuses to obey the order and sentencing him to pay a fine or to go to jail.


Enforcement of Domestic Judgements

To enforce a domestic judgement, the applicant seeking to enforce have to first appoint a lawyer through a power of attorney (Vakalatnama) for representation before the court with jurisdiction to adjudicate the matter. A Court fee is to be paid at the same time for a suit to be instituted. Further, no security cost is required, during the course of hearing until the court orders.

Unless a jurisdiction is specified in a contract which subjects to pecuniary or other limitations as prescribed by law, lawsuits in relation to immovable property must be instituted in the court or to the closest where the property is situated. The place of business or place of residence will also be a factor to be kept in mind by the court to determine the jurisdiction.

Under the Limitation Act, 1963, there is a limitation period to initiate enforcement proceedings. The application for execution must be made within a period of 12 years from the date of decree or order becomes enforceable.


Below is the outline of steps used to carry out enforcement:

1.     The court must issue summons to the defendant as per the procedure set out in law and the practice rules of the High Courts. Despite the summon of the court, if the defendant failed to appear before the court, the matter will be heard and decided ex parte.

2.     Court fees have to be deposited which varies depending on the value of the lawsuit.

Cases where the order of enforcement is applicable:

·       Any order passed by the court determining the liability of the custodian (it is a person to whom the custody of the movable property is given which cannot be conveniently removed or taken in possession) of movable property to compensate the decree-holder for any damages caused due to his default.

·       Any order made against the garnishee.

·       Any order determining the liability of a partner of the firm who was not the party to the original proceedings.

·       Any order made by adjudicating the claim made to the attachment of any property attached in execution of a decree.

·       Any order adjudicating an application filed by the decree-holder for resistance or obstruction to possession of immovable property.

·       Any order adjudicating an application for the dispossession of the third party by decree-holder.

Enforcement of Foreign Judgements

Enforcement of Foreign Judgements are similar to that of Domestic Judgments.

9 Indian Laws that should be known to public

1. No Woman can be arrested before 6 a.m. and after 6 p.m. – Criminal Procedure Code Section – 46. In case of serious crime only after receipt from the written order from the magistrate, a male policeman can arrest a woman.

2. No company can fire a pregnant woman, it will be punishable for maximum of 3 years of imprisonment.  [If the company (Government or Private) has more than 10 employees than pregnant women is eligible to get 84 days of maternity leave].

3. Under Section 185 and 202 of Motor Vehicle Act, 1988 – At the time of driving if your 100ml blood contains 30mg of alcohol, then the police can arrest you without a warrant.

4. According to Police Act, 1861 – A police officer is always on duty whether he/she wearing a uniform or not. If a person makes a complaint to the officer, he/she could not say that he cant help them because he/she is not on duty.

5. Section 128 of Motor Vehicle Act, 1988 – A Traffic Police officer cannot snatch the key from the car or motorcycle, it is illegal. You have the full right to file a legal proceeding or case against the officer.

6. Automotive (Amendment) Bill, 2016 – If you are fined for a crime (for not wearing a helmet or any other reason) then you will not be fined for the same reason in the same day.

7. Income Tax Act, 1961 – In case of tax violation, the tax collection officer has the power to arrest you but he/she will have to send a notice to you or bring notice during the raid.

8. Maximum Retail Price Act, 2014 – Any shop keeper can’t charge more than the printed price of any commodity but a consumer has the right to bargain for less than the printed price of a commodity.

9. Limitation Act, 1963 – If your office does not pay you then you have the power to file an FIR (First Information Report) against it within 3 years. But According to the Limitation Act, if you file after 3 years, you will not get anything for the due.