Order XXIII Rule 3 of the Code of Civil Procedure, 1908

Source:  Delhi High Court 

Why in News? 

Recently, Justice Tejas Karia held that Shankeshwar Utensils & Appliances Pvt. Ltd. cannot manufacture, sell, or advertise products under the mark “Maggisun” or any mark similar to Nestlé’s “Maggi,” and must also cancel its trademark and destroy existing goods bearing the infringing mark. 

• The Delhi High Court held this in the matter of Societe Des Produits Nestle S.A & ANR V. M/S Shree Shankeshwar Utensils & Appliances Pvt. Ltd. (2025). 

What was the Background of Societe Des Produits Nestle S.A & ANR V. M/S Shree Shankeshwar Utensils & Appliances Pvt. Ltd. (2025) Case? 

• The plaintiffs, Societe Des Produits Nestle S.A. and another, are the registered proprietors of the internationally recognized trademark "MAGGI," acquired by Nestlé in 1947. The MAGGI brand constitutes a cornerstone of Nestlé's global food and beverage operations, representing decades of continuous commercial use, substantial marketing investments, and significant consumer goodwill across multiple jurisdictions.  
• The plaintiffs maintain numerous trademark registrations for MAGGI across various classes of goods and services, establishing their exclusive proprietary rights in the mark. 
• The defendant, M/s Shree Shankeshwar Utensils & Appliances Private Limited, represented by Sh. Dilip Jain, operates in the manufacturing and distribution of kitchen utensils and appliances, with particular emphasis on pressure cookers and related cookware products. 
• The commercial suit CS(COMM) 106/2018 was instituted before the Delhi High Court in 2018, alleging trademark infringement and passing off.  
• The plaintiffs discovered that the defendant had commenced manufacturing, marketing, and selling pressure cookers under the trademark "MAGGISUN," which was substantially and deceptively similar to the protected MAGGI mark. 
• The plaintiffs contended that the defendant's adoption of "MAGGISUN" constituted a deliberate attempt to capitalize upon the reputation and commercial magnetism of the MAGGI brand.  
• Such unauthorized use created the likelihood of confusion among consumers, who might erroneously associate the defendant's products with the plaintiffs' brand. This conduct amounted to an offence of trademark infringement under the Trademarks Act, 1999, and the tort of passing off. 
• The defendant had obtained Trademark Registration No. 1163623 for "MAGGISUN," lending apparent legitimacy to their operations. However, the plaintiffs challenged this registration through cancellation proceedings vide Petition No. C.O. (COMM. IPD-TM) NO. 318 of 2022.  
• The defendant actively promoted their products through print media, electronic media, social media platforms, and e-commerce portals, amplifying potential consumer confusion and dilution of the plaintiffs' intellectual property rights. 
• Subsequently, both parties engaged in good faith negotiations and arrived at a mutually acceptable settlement, filing a joint application under Order XXIII Rule 3 read with Section 151 of the Code of Civil Procedure, 1908. 

What were the Court’s Observations? 

• The Hon'ble Mr. Justice Tejas Karia examined the joint settlement application dated 22.09.2025 and heard comprehensive submissions from learned counsel representing both parties.  
• The Court observed that the parties had voluntarily reached a comprehensive settlement without coercion, effectively resolving all contentious issues in the litigation. 
• The Court noted with approval the defendant's unequivocal acknowledgment of the plaintiffs as legitimate and exclusive proprietors of the MAGGI trademark, including recognition of the validity of all trademark registrations enumerated in the plaint. This acknowledgment represented clear vindication of the plaintiffs' intellectual property rights and eliminated future disputes regarding ownership or validity. 
• The Court recorded the defendant's comprehensive undertaking to permanently cease manufacturing, selling, offering for sale, advertising, or dealing in pressure cookers or any goods under "MAGGISUN" or any mark identical or similar to MAGGI. This undertaking extended to all commercial exploitation and promotional activities across print, electronic, social media, and e-commerce platforms, ensuring complete protection both presently and in perpetuity. 
• The Court noted the defendant's commitment to destroy all infringing materials, including finished goods, labels, stickers, printed materials, printing equipment, cylinders, blocks, negatives, and dyes, with photographic evidence to be furnished within two weeks. The defendant consented to cancellation of Trademark Registration No. 1163623 for "MAGGISUN," and the Court accordingly allowed the pending cancellation petition. 
• The Court emphasized that the undertaking tendered by Sh. Dilip Jain remained perpetually binding upon the defendant company, its servants, agents, franchisees, assigns, dealers, stockists, successors-in-interest, and any person acting on its behalf, preventing future offence or violation through related entities. 
• Upon the plaintiffs' counsel confirming that remaining prayers would not be pressed, the Court disposed of the application and decreed the suit according to settlement terms. The Court directed preparation of the Decree Sheet and mandated strict compliance by both parties. All pending applications, including I.A. 21780/2025, were disposed of, bringing the litigation to conclusive resolution. 

What are the Legal Provisions Referred to ? 

• Order XXIII Rule 3 of the Code of Civil Procedure, 1908: 
  • Order XXIII Rule 3 of the Code of Civil Procedure, 1908 provides that where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise in writing and signed by the parties, or where the defendant has satisfied the plaintiff in respect to the whole or any part of the subject-matter of the suit, the Court shall order such agreement, compromise or satisfaction to be recorded.  
  • The Court shall pass a decree in accordance therewith, so far as it relates to the parties to the suit, whether or not the subject matter of the agreement, compromise or satisfaction is the same as the subject-matter of the suit.  
  • The provision further stipulates that where it is alleged by one party and denied by the other that an adjustment or satisfaction has been arrived at, the Court shall decide the question, but no adjournment shall be granted for the purpose of deciding the question unless the Court, for reasons to be recorded, thinks fit to grant such adjournment. 
  • The Explanation to the Rule clarifies that an agreement or compromise which is void or voidable under the Indian Contract Act, 1872 shall not be deemed to be lawful within the meaning of this Rule. 
• Section 151 of the Code of Civil Procedure, 1908: 
  • Section 151 of the Code of Civil Procedure, 1908 confers inherent powers upon the Court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court. 
• Trademarks Act, 1999: 
  • The Trademarks Act, 1999 governs the registration, protection, and enforcement of trademark rights in India. 
• Section 29 of the Trademarks Act, 1999: 
  • Section 29 of the Trademarks Act, 1999 defines the scope of trademark infringement and provides that a registered trademark is infringed when a person uses an identical or deceptively similar mark in the course of trade in relation to goods or services for which the trademark is registered. 
• Common Law Action of Passing Off: 
  • The common law action of passing off protects unregistered trademark rights and goodwill associated with a mark. The tort of passing off prevents one trader from representing their goods or services as those of another, thereby causing confusion and deception among consumers. The essential elements of passing off include goodwill or reputation, misrepresentation, and likelihood of damage to the plaintiff's business interests. 
• Section 57 of the Trademarks Act, 1999: 
  • Section 57 of the Trademarks Act, 1999 provides grounds for rectification or cancellation of trademark registrations from the Register of Trademarks, including cases where registration was obtained without sufficient cause or where the mark is likely to deceive or cause confusion.