Bombay High Court Stays ₹4 Crore Penalty Imposed On Patanjali Ayurveda In Trademark Infringement Case

Patanjali filed an interim application challenging the single bench's order, which directed it to deposit Rs. 4 crore, in addition to Rs. 50 lakhs imposed by a previous order.

Justices A.S. Chandurkar and Rajesh S. Patil noted that the single judge had invoked inherent powers under Section 151 read with Order 39 Rule 2A of the CPC while imposing costs on Patanjali.

Order 39 Rule 2A CPC provides that disobedience or breach of injunction can result in the attachment of property of the person guilty of such disobedience and also an order of detention in civil prison.

Referring to this provision, the Court observed that it does not empower the court to impose a penalty for disobeying an injunction order.

“The said provision, prima facie, does not empower the Court while exercising jurisdiction under Order XXXIX Rule 2A of the Code to impose a penalty on the party that has disobeyed an order of injunction in addition to the consequences enumerated in the said provision.”

The Court thus was of the view that imposition of Rs. 4 crore as penalty to Patanjali was not permitted under Order 39 Rule 2A CPC.

It observed, “The impugned order besides directing the defendant to make payment of a sum of Rs.50 lakhs so as to purge the contempt in addition proceeds to penalise the defendant and directs it to jointly and/or severally pay the plaintiff an amount of Rs. 4 crores. Prima facie, the imposition of penalty in exercise of jurisdiction under Order XXXIX Rule 2A of the Code does not find support from the statutory provisions.”

The Court further stated that the impugned order did not indicate the manner in which the amount of penalty was determined.

In view of the above, the Court opined that Patanjali made out a strong prima facie case for the grant of interim relief.

The Court thus stayed the operation of the impugned order.

Regarding the Rs.50 Lakhs already deposited by Patanjali, the Court noted that damages claimed by Mangalam were Rs. 10 lakhs and as such its interest was protected. It said that the amount would remain invested in a fixed deposit and would abide by the final adjudication of the commercial appeal.

With this, the Court disposed of the interim application.

Case title: Patanjali Ayurved Ltd. & Anr. vs. Mangalam Organics Ltd. & Ors (Interim Application (L) No.26085 of 2024 In Commercial Appeal (ST) No.26060 of 2024)