INTRODUCTION

 In a significant and recent judgment, the Delhi High Court has set aside a fine of ₹12 lakh imposed on V.I. John Healthcare India LLP in a trademark infringement case filed by Dabur India Ltd. The ruling emphasizes the principle of proportionality and the importance of judicial discretion, especially in matters of procedural delays.

CORE OF THE DISPUTE: TRADEMARK AND PROCEDURAL DELAY

THE initial lawsuit filed by Dabur India Ltd. was a commercial suit for trademark infringement. Dabur's main claim was that V.I. John's toothpaste packaging was deceptively similar to that of its well-known 'Meswak' toothpaste. Dabur also objected to V.I. John's use of the word "MISWAK," which they argued was an attempt to mislead consumers. 

​However, the specific appeal that went to the Delhi High Court was not about the trademark infringement itself but a procedural issue that arose during the litigation.

BACKGROUND OF THE CASE

The trademark dispute between Vi-John Healthcare India LLP and Dabur India Limited centers around allegations by Dabur that Vi-John’s toothpaste packaging and the use of the word “MISWAK” infringe upon Dabur’s well-known Meswak brand. Dabur, an established FMCG company famous for Ayurvedic products, claimed that Vi-John’s toothpaste created a likelihood of consumer confusion due to visual similarity and descriptive usage of “MISWAK,” a term closely associated with Dabur’s traditional herbal toothpaste.

Dabur sought damages amounting to ₹2.5 lakh for trademark infringement, passing off, and related claims.

TRAIL COURT PROCEEDINGS

On 7 August 2024, the trial court issued what later came to be called the First Impugned Order:

• Vi-John was directed to file its written statement within 30 days.
• The order further stated that any delay would attract ₹25,000 per day as costs.

Vi-John filed its written statement 48 days late. The company explained that the delay was due to ongoing settlement discussions with Dabur, which it believed could resolve the matter amicably.

However, the trial court was not convinced. By mechanically applying the earlier cost condition, it imposed ₹12 lakh in costs (₹25,000 × 48 days). This became the Second Impugned Order.

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LEGAL SIGNIFICANCE

  This judgment underscores several important principles for trademark and commercial litigation in India:

• Costs and penalties for procedural delays must be reasonable and proportional, especially when the main relief sought is relatively small.
• Courts must exercise judicial discretion rather than mechanical enforcement of cost orders based on earlier cautionary mandates.
• Active settlement negotiations justify leniency and condonation of procedural delays.
• The ruling affirms the necessity of fairness and balance in intellectual property dispute management, encouraging out-of-court resolution efforts without penalizing parties unduly.

  CURRENT STATUS AND OUTLOOK

     Following the High Court’s intervention:

• The case will proceed back to the trial court for substantive consideration of the trademark infringement and related claims.
• With the penalty quashed and delay condoned, the focus will squarely be on the merits of Vi-John’s alleged infringement and Dabur’s claim for damages.
• A final hearing is anticipated around late October 2025, subject to court calendars.
• There remains space for potential amicable settlement, as highlighted by the High Court’s recognition of ongoing negotiations.

 INTERVENTION BY DELHI HIGH COURT

On July 31, 2025, the Delhi High Court (Single Bench under Justice Tejas Karia) overturned the ₹12 lakh penalty against Vi-John, citing the following key observations:

• Proportionality and Fairness: The High Court emphasized that the penalty was grossly disproportionate relative to the actual claim of ₹2.5 lakh sought by Dabur. Imposing a fine nearly five times the damages sought was excessive and punitive.
• Nature of the Initial Cost Warning: The prior trial court order imposing ₹25,000/day for delay was intended as a precautionary and deterrent measure, not an automatic penalty. The High Court clarified that subsequent developments and circumstances must be factored in rather than enforcing such costs as final and binding.
• Justifiable Delay: Importantly, Vi-John’s delay occurred while both parties were engaged in genuine settlement discussions, an effort the trial court overlooked. The High Court recognized that the delay was neither willful nor negligent.
• Judicial Discretion and Application of Procedural Rules: Justice Karia noted that procedural rules related to costs and delay should be applied with judicial discretion, enabling courts to assess the merits of each case independently with attention to fairness.

THE KEY POINTS OF THE HIGH COURT’S JUDGEMENT WERE

 Proportionality is Paramount: The court held that the fine of ₹12 lakh was "grossly disproportionate" and "excessive." The court noted that Dabur had only claimed damages of ₹2,50,000 in its suit. A procedural fine that was nearly five times the claimed damages was a clear example of a disproportionate penalty that served no purpose other than to punish. The court stressed that costs should be reasonable and should not overshadow the substantive relief sought. 

​Judicial Discretion Cannot Be Foreclosed: The High Court stated that a court cannot be "influenced by the previous orders" and must examine every application on its own merits, considering the facts and submissions at the time of the hearing. The trial court's rigid adherence to its earlier "cautionary" order, without considering the new circumstances (the settlement talks), was found to be an error in judgment. 

​Encouraging Settlement: The court strongly emphasized that a court's role is to encourage amicable resolutions. When parties are engaged in genuine settlement negotiations, the court should be lenient in condoning delays and should not penalize them for attempting to resolve the dispute out of court. This principle, the court noted, is essential for a healthy and efficient justice system. 

​Within Statutory Limits: The court also highlighted that the delay of 48 days was well within the 120-day outer limit prescribed for filing a Written Statement in commercial suits. Thus, the delay was not "inordinate" or unreasonable, further making the penalty unjustifiable.

CONCLUSION

The Delhi High Court’s quashing of the ₹12 lakh cost on Vi-John Healthcare India LLP in the trademark suit brought by Dabur India Limited marks a significant reaffirmation of judicial fairness and proportionate use of procedural penalties in intellectual property litigation. This decision not only serves as a precedent to prevent punitive cost imposition in cases involving minor delays justified by settlement talks but also bolsters the ethos of balanced judicial engagement in trademark disputes.