Allegations of Affixing Counterfeit Mark Amounts to Cheating Under Illustration (b) of Section 415 IPC: Calcutta High Court Refuses to Quash Criminal Proceedings

“The accused persons supplied counterfeit goods to various governmental industries using the brand name of the complainant and thereby cheated such industries to believe that the counterfeit goods were original.” - In a significant judgment delivered refused to quash criminal proceedings against the petitioners accused of manufacturing and supplying counterfeit hydrogen sensors by deceptively using the complainant’s registered trademark ‘Hydris’.  

Justice Dr. Ajoy Kumar Mukherjee held that: “The ingredients of the offences under the sections mentioned in the complaint cannot be said to be absent… Now whether the allegations made in the complaint are correct or not has to be decided on the basis of the evidence to be laid in the course of trial.”

“A, by putting a counterfeit mark on an article… A cheats” – Illustration (b), Section 415 IPC Invoked  

The complainant, Heraeus Technologies, is the proprietor of the ‘Hydris’ trademark, a technology approved for measuring hydrogen in liquid steel, critical to railway safety. The petitioners were formerly distributors of this product until their distributorship was terminated in October 2013.

 The core allegation is that: “The accused developed their own hydrogen sensor ‘Hysen’ and affixed the mark ‘Hydris’, thereby misrepresenting it as the genuine product of the complainant.”  

The Court found that the complaint clearly invoked Illustration (b) to Section 415 IPC, which reads: “A, by putting a counterfeit mark on an article, intentionally deceives Z into a belief that this article was made by a certain celebrated manufacturer, and thus dishonestly induces Z to buy and pay for the article, A cheats.”

 Justice Mukherjee held: “The element of mens rea on the part of accused persons in committing the criminal breach of trust, cheating and criminal conspiracy are flagrant on the face of the record.”

 “Prior Civil Proceedings Cannot Defeat Criminal Allegations of Cheating and Forgery”  

The petitioners argued that the complaint is purely civil in nature, especially as a civil suit regarding the same subject matter had been filed in 2015, and injunction was granted by a competent court.  

However, the High Court rejected this plea:  

• “It is undoubtedly true that in the whole transaction there are some elements which are civil in nature… However, the complaint alleges manufacturing of counterfeit goods by affixing the brand name of the complainant, ignoring the safety of the railway tracks and general public, for its own illegal gain.”

 The Court relied on the decision in M. Krishnan v. Vijay Singh, (2001) 8 SCC 645, observing:

 “If mere pendency of a suit is made a ground for quashing the criminal proceedings, the unscrupulous litigants… would be encouraged to frustrate the course of justice and law by filing suits.”  

“Police Inquiry Under Section 202 CrPC Was Conducted – Magistrate Applied Judicial Mind”

 The petitioners also challenged the issuance of process under Section 204 CrPC, claiming mechanical application of mind by the Magistrate.

 However, the Court clarified:  

• “The order issuing process dated 14^th November, 2022 was passed after receipt of report of an inquiry made under Section 202 of the Code… It cannot be said that the order impugned was passed by the court below without applying judicial mind.”

 The police Inquiry confirmed the allegations made by the complainant, which were relied upon by the trial court while issuing process.

“Specific Allegations Exist Against Managing Directors – No Ground to Quash Against Them” Petitioners 2 and 3, being Managing Directors of the company, also sought quashing on the ground of lack of specific allegations.

 However, the Court rejected this:  

• “There are specific allegations in the complaint against petitioner no. 2 and 3 which reflect specific individual role… It cannot be said that they have been Implicated vicariously.”

• Hence, reliance on cases like Sharad Kumar Sanghi v. Sanghi Infrastructure and Maksud Saiyed v. State of Gujarat was held misplaced.

 Justice Ajoy Kumar Mukherjee concluded:

 “In view of aforesaid discussion, I find that this is not a fit case where the proceeding can be quashed invoking the court’s jurisdiction under Section 482 of the Code of the Criminal Procedure.”

 Accordingly, the criminal revision application was dismissed, and the Court directed expeditious disposal of the trial.

 Date of Decision: April 16, 2025