Delhi High Court Refuses Sale of Seized ‘OLD FORESTER’ Whiskey, Holds Trademark-Infringing Stock to Be Counterfeit Liquor

Delhi High Court Refuses Sale of Seized ‘OLD FORESTER’ Whiskey, Holds Trademark-Infringing Stock to Be Counterfeit Liquor

Introduction

The Delhi High Court has refused to permit the release and sale of seized whiskey bearing the “OLD FORESTER” mark, holding that liquor found in violation of trademark rights falls within the definition of “counterfeit liquor” under the Delhi Excise Act, 2009. The Court emphasized that it cannot allow an importer to profit from goods that infringe a trademark validly registered in India.

Factual Background

The dispute arose in a trademark infringement suit filed by Brown-Forman Distillery, Inc., proprietor of multiple Indian registrations for the “OLD FORESTER” mark.

The plaintiff discovered that Brewholik Private Limited was allegedly selling whiskey bearing the same mark in Delhi liquor stores. Acting on the plaintiff’s application, the Court had earlier granted an ex parte ad interim injunction, pursuant to which a Local Commissioner seized 3,464 boxes of whiskey stock. Subsequently, the defendant moved an application under Section 151 CPC, seeking permission to:

• release and sell the seized 3,464 boxes, and
• complete import of an additional 2,600 boxes

The defendant asserted that the goods were lawfully sourced from a Nepalese company, Yeti Distillery (P.) Ltd., which allegedly owns rights in the mark in Nepal.

Procedural Background

The application came up before Justice Tushar Rao Gedela, who examined whether the Court’s inherent powers under Section 151 CPC could be invoked to permit sale of the seized stock pending adjudication. The issue was considered in the backdrop of the Trade Marks Act, 1999 and the Delhi Excise Act, 2009.

Issues

1. Whether whiskey stocks bearing the “OLD FORESTER” mark seized in India could be permitted to be sold pending trial.

2. Whether trademark-infringing liquor falls within the meaning of “counterfeit liquor” under the Delhi Excise Act.

3. Whether the Court could invoke Section 151 CPC to allow release of such goods despite the statutory framework.

Contentions of Parties

The applicant, Brewholik Private Limited, contended that the goods were not counterfeit but merely “infringing”, and therefore could be released subject to safeguards. It offered to deposit ₹25–30 lakh as security and argued that the sale was necessary to avoid breach of its government supply contracts.

The plaintiff, Brown-Forman Distillery, Inc., opposed the plea, submitting that it holds over 100 registrations in India for “OLD FORESTER” and that import of goods under that mark without consent itself constitutes infringement under Section 29(6)(c) of the Trade Marks Act.

It further argued that once the Trade Marks Act is read harmoniously with the Delhi Excise Act, such liquor must necessarily be treated as counterfeit liquor, and permitting its sale would effectively reward illegality.

Reasoning and Analysis

The Court accepted the plaintiff’s submission that Section 2(16) of the Delhi Excise Act contains no qualification regarding the nature of the liquor. Accordingly, any liquor found to violate trademark rights recognized under Indian law would squarely fall within the statutory meaning of “counterfeit liquor.”

Justice Gedela strongly observed that the Court cannot countenance a situation where a “clever importer” is allowed to earn profits from goods that infringe a trademark registered in India. The Bench rejected the defendant’s attempt to distinguish between “infringing” and “counterfeit” goods, holding that in the context of excise law, trademark infringement itself brings the goods within the counterfeit category.

The Court also distinguished precedents relating to the release of pharmaceutical products, holding that those decisions were influenced by considerations of public interest and access to medicines, which were entirely absent in the case of whiskey stocks.

Importantly, the Court reiterated that Section 151 CPC cannot be used to override express statutory provisions, particularly where the governing legislation already provides a clear legal consequence for the goods in question.

Allowing sale of the seized stock, according to the Court, would run contrary to the combined statutory scheme of the Trade Marks Act and the Delhi Excise Act, and would effectively place a premium on illegal conduct.

Decision

The Delhi High Court dismissed the application filed by Brewholik Private Limited, refusing permission to sell the seized 3,464 boxes of “OLD FORESTER” whiskey or to complete import of the additional consignment. The Court held that the seized stock constitutes counterfeit liquor under the Delhi Excise Act, and therefore cannot be released for sale.

In this case the plaintiff was represented by Advocates Shwetasree Majumder, Rohan Krishna Seth and Ritwik Marwaha. Meanwhile the defendant was represented by Senior Advocate J. Sai Deepak with Advocates Kapil Midha, Sindhoora Ravindran, Garv Singh, Vartika Gautam and Abhishek.