B.C. Hasaram & Sons v. Smt. Nirmala Agarwal

In a recent judgment, a Division Bench of the Delhi High Court (“Court”) has served an important and timely reminder that damages must necessarily be based on evidence which proves that the claimant suffered actual loss, and that any calculation based on speculative assumptions would be liable to be set aside.

The judgment came in an appeal by the Defendant/Appellant challenging a Trial Court decision where the Defendant’s mark “Amrit Nayan Jyoti” was found to be deceptively similar to the Respondent/Plaintiff’s registered trade mark “Nayan Jyoti”. Pursuant to an ex parte ad interim injunction, a Local Commissioner (“LC”) was also appointed by the Trial Court in the matter, who then visited the Defendant’s premises and recovered large quantities of packaging material and finished/unfinished infringing goods bearing the infringing marks. The suit, eventually, got decreed vide judgment dated January 13, 2025, in light of the Appellant consenting to suffer a decree.

Pertinently, the Trial Court found the appellant to be a ‘habitual infringer’ and found its conduct fit to be burdened with significant damages amounting to Rs. 48,35,610/-. The Trial Court calculated the damages by multiplying the quantities of products, labels, etc., seized by the LC, with the MRP of the infringing products printed on the labels, and took the resulting figure to be the Appellant’s sales for one month. It then doubled this figure for arriving at the final awarded amount on the basis of its finding that the Defendant had been selling the products at least for 2 months. The Defendant assailed the judgment in appeal before the Division Bench.

While the Court dismissed the Defendant’s challenge on the ground of lack of territorial jurisdiction of the Trial Court, it found merit in the Defendant’s challenge to the award of damages and found the methodology employed by the Trial Court in ascertaining the quantum of damages to be woefully erroneous. The Court ruled that the burden of supporting the claim of damages with evidence of actual loss lied solely with the Plaintiff, and that no hypothetical or arbitrary estimations could be drawn by the Trial Court to fill the gaps in the plaintiff’s evidence. It observed that the Trial Court’s reliance on, and drawing assumptions on the basis of, unsubstantiated observations in the LC report, could not be said to constitute a rational basis for determining the quantum of damages. It further held that since the impugned judgment risked unjust enrichment of the Plaintiff as it lacked a reasoned evidentiary basis, it was liable to be set aside.

Thus, the Court partly allowed the appeal and remanded the matter back to the Trial Court for fresh determination limited to the issue of damages. The Court also granted both parties an opportunity to lead evidence in this regard.

B.C. Hasaram & Sons v. Smt. Nirmala Agarwal, 2025:DHC:9867-DB

Read the judgement copy here.