TC - 01

CHAPTER 5 - NIRMALA DEVI BAM MEMORIAL

INTERNATIONAL MOOT COURT COMPETITION

INDORE INSTITUTE OF LAW

19 – 21 MAY, 2023

Before

THE HON’BLE DISTRICT COURT OF DELHI

CASE NO. CS 31/2023

IN THE MATTER OF –

Fusion Natural Health

…………..(Plaintiff)

- Versus-

NatureCare
…………..(Defendant 1)
Instabook & Anr.

………….. (Defendent2)

MEMORANDUM FOR THE DEFENDANT

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Contents

LIST OF ABBREVIATIONS .................................................................................................. III

INDEX OF AUTHORITIES..................................................................................................... V

STATEMENT OF JURISDICTION...................................................................................... VII

STATEMENT OF FACTS ................................................................................................... VIII

ISSUES RAISED ................................................................................................................... XII

SUMMARY OF ARGUMENTS .......................................................................................... XIII

ISSUE 1: WHETHER THE SUIT IS MAINTAINABLE BEFORE THE DISTRICT

COURT OF DELHI? ..................................................................................................... XIII

ISSUE 2: WHETHER AND TO WHAT EXTENT THE DIRECT SELLING

GUIDELINES, 2016 ARE ENFORCEABLE AND APPLICABLE TO NATURECARE?
....................................................................................................................................... XIII

ISSUE 3: WHETHER NATURECARE'S USE OF INSTABOOK TO SELL FAKE

GOODS WITH THE MARK " FUSION NATURAL HEALTH " CONSTITUTES AN
INFRACTION OF THE TRADE MARKS ACT, 1999? .............................................. XIII

ISSUE 4: WHETHER INSTABOOK IS UNDER THE DEFINITION OF

"INTERMEDIARIES" AND QUALIFIES FOR PROTECTION UNDER THE "SAFE
HARBOUR" CLAUSES LISTED IN THE INFORMATION TECHNOLOGY ACT OF
2000 AND THE INTERMEDIARY GUIDELINES OF 2011? .................................... XIII

ISSUE 5: WHETHER NATURECARE IS GUILTY OF TORTIOUS INTERFERENCE

WITH THE CONTRACTUAL RELATIONSHIP ESTABLISHED WITH FUSION
NATURAL HEALTH’S DIRECT SELLERS/DISTRIBUTORS? ............................... XIV

ARGUMENTS ADVANCED ............................................................................................... XV

1. WHETHER THE SUIT IS MAINTAINABLE BEFORE THE DISTRICT OF DELHI.

XV

1.1 THE DISTRICT COURT HAS NO JURISDICTION TO ADJUDICATE

TRADEMARK INFRINGEMENT SUIT ...................................................................... XV

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2. WHETHER AND TO WHAT EXTENT THE DIRECT SELLING GUIDELINES, 2016

ARE ENFORCEABLE AND APPLICABLE TO NATURECARE. ............................... XVI

2.1 DSG ARE MERELY A MODEL FRAMEWORK FOR STATE GOVERNMENTS

AND UNION TERRITORIES ...................................................................................... XVI

2.2 DSG ARE NOT ENFORCEABLE TO ANY EXTENT TO NATURE CARE.... XVII

3. WHETHER NATURECARE'S USE OF INSTABOOK TO SELL FAKE GOODS WITH

THE MARK " FUSION NATURAL HEALTH '' CONSTITUTES AN INFRACTION OF
THE TRADE MARKS ACT, 1999................................................................................ XVIII

3.1 NATURE CARE’S CHANNEL OF PROCUREMENT AND SELLING FALLS

UNDER PRINCIPLE OF EXHAUSTION ................................................................ XVIII

3.2 USE OF INSTABOOK TO SELL FAKE GOODS WITH THE MARK " FUSION
NATURAL HEALTH '' DOES NOT CONSTITUTES AN INFRACTION OF THE
TRADE MARKS ACT, 1999. ........................................................................................ XX

4. WHETHER INSTABOOK IS UNDER THE DEFINITION OF "INTERMEDIARIES"

AND QUALIFIES FOR PROTECTION UNDER THE "SAFE HARBOUR" CLAUSES
LISTED IN THE INFORMATION TECHNOLOGY ACT OF 2000 AND THE
INTERMEDIARY GUIDELINES OF 2011..................................................................... XXI

4.1 INSTABOOK IS AN INTERMEDIARY WITHIN THE MEANING OF SECTION

2(1)(W) OF IT ACT .................................................................................................... XXII

4.2 INFORMATION GIVEN BY NATURE CARE QUALIFIES AS THIRD PARTY

INFORMATION AS UNDER SECTION 79(2) AND S.79(3). ................................ XXIII

5.WHETHER NATURECARE IS GUILTY OF TORTIOUS INTERFERENCE WITH THE

CONTRACTUAL RELATIONSHIP ESTABLISHED WITH FUSION NATURAL
HEALTH’S DIRECT SELLERS/DISTRIBUTORS. ..................................................... XXV

5.1 CONCEPT OF CONTRACT BETWEEN FUSION NATURAL HEALTH AND ITS

DISTRIBUTORS......................................................................................................... XXV

5.2 ESTABLISH THE TORTIOUS INTERFERENCE BY NATURE CARE ....... XXVII

PRAYER ............................................................................................................................ XXIX

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LIST OF ABBREVIATIONS

ABBREVIATION TERM

& And

AIR All India Reporter

CH Chapter

AR Article

DEL Delhi

LTD Limited

SC Supreme Court

SCC Supreme Court Cases

V. Versus

ID Identification

ORS Others

LTD Limited

NAG Nagaland

ORS Others

PARA Paragraph

TM Trademark

PVT Private

REP Report

S. Section

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MANU Manupatra

DSG Direct Selling Guidelines

GSR General Statutory Rules

M/S Messers

CPA Consumer Protection Act

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INDEX OF AUTHORITIES

INDIAN CASES

1. Dr. Reddys Laboratories Limited vs. Dr. Reddy Pathlabs Private Limited (09.11.2021 -
DELHC) : MANU/DE/2966/2021
2. Samsung Electronics Company Limited and Ors. vs. Kapil Wadhwa and Ors.
(17.02.2012 - DELHC) : MANU/DE/0571/2012
3. Poonam Verma v. Delhi Development Authority MANU/SC/8225/2007
4. G.J. Fernandez v. State of Mysore MANU/SC/0050/1967
5. Syndicate Bank v. Ramchandran Pillai (2011) 15 SCC 398
6. Amazon Seller Services Pvt. Ltd. and Ors. vs. Amway India Enterprises Pvt. Ltd. and
Ors. (31.01.2020 - DELHC) : MANU/DE/0311/2020
7. Kapil Wadhwa v. Samsung 194 DLT 23 (2012)
8. Samsung Electronics Company Limited v. Kapil Wadhwa, 49 P.T.C. 571 (Del), (2012)
9. Myspace Inc. vs. Super Cassettes Industries Ltd. (23.12.2016 - DELHC) MANU / DE
/ 3411 / 2016
10. Christian Louboutin SAS vs. Nakul Bajaj and Ors. (02.11.2018 - DELHC)
MANU/DE/4019/2018
11. Shreya Singhal vs. Union of India (UOI) (24.03.2015 - SC) MANU/SC/0329/2015
12. Flipkart Internet Private Ltd. v. State of NCT of Delhi & Anr. (2022)
13. Kunal Bahl and Ors. vs. State of Karnataka (07.01.2021 - KARHC) :
MANU/KA/0010/2021
14. Amway India Enterprises Pvt. Ltd. vs. Amazon Seller Services Pvt. Ltd. and Ors.
(22.11.2021 - SC Order) MANU/SCOR/46057/2021
15. Superintendence Company of India (P) Ltd. v. Krishan Murgai (1981) 2 SCC 246
16. Independent News Service Pvt. Ltd. v. Sucherita Kukreti (2019) 257 DLT 426

FOREIGN CASES

17. Amazon.Com, Inc. v. Comm'r, T.C. Memo. 2014-245 (U.S.T.C. Dec. 10, 2014)
18. Greig v Insole 1WLR 302 [1978]
19. Copad SA v Christian Dior couture SA and Others ETMR 683 [2009]

BOOKS AND MANUALS

1. "Law Relating to Intellectual Property Rights" by Dr. V. K. Ahuja Edition 3rd (2022)
2. Law of Trade Marks by KC Kailasam 4th Edition (2017)
3. Mulla: The Code of Civil Procedure 21st edition (2021)

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4. C.K. Takwani's The Code of Civil Procedure 12th edition (2020)

5. MP Jain's Indian Constitutional Law 8th edition (2020)
6. R.F.V. Heuston & R. A. Buckley, Salmond and Heuston on the Law of Torts (21st
Edition)

ARTICLES AND COMMENTARIES

1. Herman Cohen Jehoram, International Exhaustion versus Importation Right: A
Murky Area of Intellectual Property Law, (1996),

STATUTES
1. Trade Marks Act, 1999
2. Constitution of India, 1950
3. Direct Selling Guidelines, 2016
4. Sale of Goods Act, 1930
5. TRIPS Agreement, 1995
6. Code of Civil Procedure, 1908
7. Copyright Act, 1957
8. Intermediary Guidelines, 2011
9. Intermediary Guidelines, 2022
10. Information Technology (Intermediary Guidelines and Digital Media Ethics Code)
Rules, 2021
11. Circular No. 13/2012-Customs, F. No. 528/21039/08-Cus/ICD, May 8 2012,

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STATEMENT OF JURISDICTION

The respondents have appeared before the Hon’ble District Court of Delhi on the notice of the
plaintiff for the cause of trademark infringement under the following section of the Code of
Civil Procedure (CPC):

“[20] Section 20 of the Code of Civil Procedure (CPC)

Other suits to be instituted where defendants reside or cause of action arises.—Subject to the
limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose
jurisdiction—

(a) the defendant, or each of the defendants where there are more than one, at the time of the
commencement of the suit, actually and voluntarily resides, or carries on business, or
personally works for gain; or

(b) any of the defendants, where there are more than one, at the time of the commencement of
the suit, actually and voluntarily resides, or carries on business, or personally works for
gain, provided that in such case either the leave of the Court is given, or the defendants who
do not reside, or carry on business, or personally works for gain, as aforesaid, acquiesce in
such institution; or

(c) The cause of action, wholly or in part, arises.

[Explanation].—A corporation shall be deemed to carry on business at its sole or principal

office in 3 [India] or, in respect of any cause of action arising at any place where it has also
a subordinate office, at such place

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STATEMENT OF FACTS

PARTIES TO THE DISPUTE

PLAINTIFF Fusion Natural Health

DEFENDANT/S 1. NatureCare
2. Instabook

BACKGROUND

1. During the Covid-19 virus outbreak in India, Fusion HealthCare firm founded in 2016,
developed into one of India's top plant-based nutrition and well-being providers. Fusion
Natural Health divides its health offerings into categories for men, women, and children
and nutrition for the skin and hair.
2. Their product line includes plant-based protein powders, collagen shots, energy
beverages, and vitamin supplements. They also provide exercise regimens, food
counselling, and nutrition guidance.
3. A smartphone app from Fusion Natural Health offers recipes, workout videos, and
nutritional advice. Using the app, a qualified nutritionist is also accessible for paid
private health counselling sessions. The mobile app gets the highest reviews on the Play
Store and Apple Store. The products are also sold through a well-established network
of direct sellers and/or dealers outside of its website.
4. Principal to Principal (B2B) sales of these high-end consumer items are made through
direct selling contracts. The Contract specifies the terms and conditions for the sale,
distribution, and promotion of Fusion Natural Health's products. The items sold by
direct sellers of Fusion Natural Health are marked to say that the company's owners are
selling them, and a Code of Ethics binds the direct sellers.
5. Each of Fusion Natural Health's products has a unique identifier on the box, making it
easier to determine responsibility and customer satisfaction. Fusion Natural Health also
keeps track of all of its Direct Sellers. Fusion Natural Health also has a reliable system
in place for handling concerns.
6. Given the direct selling business model employed by Fusion Natural Health, buyers can
only get the company's products from registered direct sellers or through the company's
official website, www.FusionNaturalHealth.Co.in. Fusion Natural Health is a business
that carefully safeguards its intellectual property rights. It is the registered owner of a
word and device mark that bears the phrase "Fusion Natural Health" in line with the
pertinent classes under the Trade Marks Act of 1999.
7. Since May 2022, NatureCare, a Hyderabad-based company that provides supplements
and protein powders to help people build muscle, has promoted and sold "Fusion
Natural Health" products on its business profile on the social media platform Instabook.

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By subscribing to the service's paid promotion feature for corporate profiles, businesses
can pay to advertise their products through images or videos that appear in Instabook
users' stories or feeds.
8. On 3.11.2022, Ms. Seema Singh, a resident of Delhi, saw an advertisement for a Fusion
Natural Health product on NatureCare's website and ordered it. The aforementioned
paid promotion service has a subscriber in NatureCare. The purchase was made by
clicking the "Shop Now" button on the NatureCare advertisement, which directed Ms.
Singh to the NatureCare website.
9. She was startled to see that the product container had been damaged and the safety seal
had been broken when the item was delivered to her home on 12.11.2022. She was
asked to provide details about the purchase, including the payment method, the seller's
information, the date of the purchase, the date of delivery, the batch number, and the
Unique Product Code (UPC) printed on the product packaging, when she complained
about it to Fusion Natural Health's grievance forum on November 13, 2022.
10. When Ms. Singh returned with the necessary information, to the knowledge of the
Fusion Natural Health grievance team to their knowledge, none of their Direct Sellers
had been using the aforementioned platform for the sale of their goods.
11. Despite not being on its list of Direct Sellers, NatureCare has been selling Fusion
Natural Health items on Instabook without its knowledge or consent. By purchasing
Fusion Natural Health items from NatureCare via Instabook and conducting their own
investigation, Fusion Natural Health discovered that the products are being sold at a
significant discount, roughly 70% below the MSRP.
12. Fusion Natural Health subsequently sent NatureCare a cease-and-desist letter dated
5.12.2022, citing product tampering, trademark infringement, and infractions of the
2016 Direct Selling Guidelines. Additionally, the Notice asked that NatureCare stop
selling products from Fusion Natural Health immediately and remove any posts about
them on Facebook and other social media.
13. According to Nature Care’s answer dated 20.12.2022, denying Fusion Natural Health's
claims, the products were acquired from Fusion Natural Health through one of its
approved Direct Sellers in the free market and sold via Instabook. NatureCare continued
to market the disputed goods on Instabook.
14. On February 2, 2023, Instabook received a legal notification from Fusion Natural
Health demanding them to halt NatureCare from doing so. Instabook, on the other hand,
asserted in a response dated 12.2.2023 that it is merely an online social networking
service and, as such, qualifies as an intermediary under the Information Technology
Act of 2000.
15. Instabook stated that it would be unable to monitor or control the transactions occurring
on its platform and would only prevent NatureCare from using it for online sales and/or
block or delete the company, as mentioned earlier, if Fusion Natural Health could
present a court order to that effect. Additionally, Instabook asserted in its response that
its platform is just a tool for businesses to advertise and has no direct control over the

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sale of goods. It is unaware of the kinds of goods traded because it is not actively
involved in business dealings between buyers and sellers.
16. Fusion Natural Health filed a trademark infringement complaint on February 15, 2023,
with the District Court of Delhi under case number CS 31/2023, seeking the necessary
remedies. Additionally, they named Instabook as a defendant and asked for an ex parte
ad interim injunction against NatureCare.

TIMELINE:

DATE INCIDENT

2016 Fusion Health Care was founded.

May 2022 NatureCare, a Hyderabad-based company that provides

supplements and protein powders to help people build muscle, has
promoted and sold "Fusion Natural Health" products on its
business profile on the social media platform Instabook.

3rd November 2022 Ms. Seema Singh saw an advertisement for a Fusion Natural
Health product on NatureCare's website and ordered it.

12th November 2022 Ms. Seema Singh received the product container in a damaged
condition, and the safety seal had been broken when the item was
delivered to her home.

13th November 2022 Ms. Seema Singh reported the matter to Fusion Natural Health.

5th December 2022 Fusion Natural Health sent NatureCare a cease-and-desist letter,
citing product tampering, trademark infringement, and infractions
of the 2016 Direct Selling Guidelines.

20th December 2022 NatureCare denied Fusion Natural Health's claims that the
products were acquired from Fusion Natural Health through one
of its approved Direct Sellers in the free market and sold via
Instabook.

2nd February 2023 Instabook received a legal notification from Fusion Natural Health
demanding them to halt NatureCare from doing so.

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12th February 2023 Instabook asserted in a response that it is merely an online social
networking service and, as such, qualifies as an intermediary
under the Information Technology Act of 2000.

15th February 2023 Fusion Natural Health filed a trademark infringement complaint
with the District Court of Delhi.

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ISSUES RAISED

ISSUE 1

WHETHER THE SUIT IS MAINTAINABLE BEFORE THE DISTRICT COURT OF

DELHI?

ISSUE 2

WHETHER AND TO WHAT EXTENT THE DIRECT SELLING GUIDELINES, 2016

ARE ENFORCEABLE AND APPLICABLE TO NATURECARE?

ISSUE 3

WHETHER NATURECARE'S USE OF INSTABOOK TO SELL FAKE GOODS

WITH THE MARK " FUSION NATURAL HEALTH " CONSTITUTES AN
INFRACTION OF THE TRADE MARKS ACT, 1999?

ISSUE 4

WHETHER INSTABOOK IS UNDER THE DEFINITION OF "INTERMEDIARIES"

AND QUALIFIES FOR PROTECTION UNDER THE "SAFE HARBOUR" CLAUSES
LISTED IN THE INFORMATION TECHNOLOGY ACT OF 2000 AND THE
INTERMEDIARY GUIDELINES OF 2011?

ISSUE 5

WHETHER NATURECARE IS GUILTY OF TORTIOUS INTERFERENCE WITH

THE CONTRACTUAL RELATIONSHIP ESTABLISHED WITH FUSION
NATURAL HEALTH’S DIRECT SELLERS/DISTRIBUTORS?

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SUMMARY OF ARGUMENTS

ISSUE 1: WHETHER THE SUIT IS MAINTAINABLE BEFORE THE DISTRICT

COURT OF DELHI?

It is submitted that the present suit is maintainable pursuant to Section 20 of CPC & Section
134(2) of the Trademarks Act, 1999, allowing the court to hear this plea.

ISSUE 2: WHETHER AND TO WHAT EXTENT THE DIRECT SELLING

GUIDELINES, 2016 ARE ENFORCEABLE AND APPLICABLE TO
NATURECARE?

It is submitted that the Direct Selling Guidelines, 2016 are enforceable and applicable to
NatureCare since they hold the force of law as they have been introduced by the executive
under Articles 73 & 77 of the Constitution of India.

ISSUE 3: WHETHER NATURECARE'S USE OF INSTABOOK TO SELL FAKE

GOODS WITH THE MARK " FUSION NATURAL HEALTH " CONSTITUTES AN
INFRACTION OF THE TRADE MARKS ACT, 1999?

It is submitted that Nature Book’s use of Petitioner’s mark ‘Fusion Natural’ amounts to
infringement under the Trademarks Act, 1999 since the petitioner’s mark is well-known
within the meaning of Section 2(1)(zg) and also comes under one the species of Section 29(2)
of the Act and amounts to infringement.

ISSUE 4: WHETHER INSTABOOK IS UNDER THE DEFINITION OF

"INTERMEDIARIES" AND QUALIFIES FOR PROTECTION UNDER THE "SAFE
HARBOUR" CLAUSES LISTED IN THE INFORMATION TECHNOLOGY ACT OF
2000 AND THE INTERMEDIARY GUIDELINES OF 2011?

It is humbly submitted that Instabook does come under the definition of Intermediaries and
thus, does not qualify for protection under the safe harbor clause since Instabook is not an

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intermediary within the meaning of Section 2(1)(w) of the IT Act and the information
provided by the defendant does not amount to third-party information pursuant to Section
79(2) & 79(3) of the Act.

ISSUE 5: WHETHER NATURECARE IS GUILTY OF TORTIOUS INTERFERENCE

WITH THE CONTRACTUAL RELATIONSHIP ESTABLISHED WITH FUSION
NATURAL HEALTH’S DIRECT SELLERS/DISTRIBUTORS?

It is submitted that NatureCare is guilty of tortious interference with the contractual

relationship established with Fusion Natural Health’s distributors because Fusion Natural
Health has a direct selling model and enjoys distinctiveness in the product. Thus, this act of
the defendant has led to damage.

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ARGUMENTS ADVANCED

1. WHETHER THE SUIT IS MAINTAINABLE BEFORE THE DISTRICT OF

DELHI.

It is most humbly submitted that the suit is not maintainable before the Hon’ble District Court
of Delhi due to jurisdictional limitations and as it does not fulfill the conditions Section 20 of
the Code of Civil Procedure (CPC)1, 1908 in addition to Section 134 under the Trade Marks
(TM) Act, 1999.2

1.1 THE DISTRICT COURT HAS NO JURISDICTION TO ADJUDICATE

TRADEMARK INFRINGEMENT SUIT

20. It is submitted before the hon’ble court under Order 7 Rule 10 read with Order 7 Rule
11(a) and (d) CPC filed by the defendant seeking rejection of the plaint/return of the
plaint to be presented before a court of competent jurisdiction where it is maintainable.
21. In Dr. Reddys Laboratories Limited vs. Dr. Reddy Pathlabs Private Limited3, the
defendant has filed the aforesaid application stating that this court does not have

1
Section 20. Other suits to be instituted where defendants reside or cause of action arises. Subject to the
limitations aforesaid, every suit shall be instituted in Court within the local limits of whose jurisdiction-
(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the
suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
(b) any of the defendants, where there are more than one, at the time of the commencement of the suit actually and
voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of
the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid,
acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises.
2
134. Suit for infringement, etc., to be instituted before district Court. -
(1) No suit –
(a) for the infringement of a registered trade mark, or
(b) relating to any right in a registered trademark, or
(c) for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively
similar to the plaintiff’s trade mark, whether registered or unregistered.
Shall be instituted in any court inferior to a District Court having jurisdiction to try the suit.
(2) For the purpose of clauses (a) and (b) of sub-section (1), a "District Court having jurisdiction" shall,
notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or any other law for the time
being in force, include a District Court within the local limits of whose jurisdiction, at the time of the institution
of the suit or other proceeding, the person instituting the suit or proceeding, or where there are more than one such
person any of them, actually and voluntarily resides or carries on business or personally works for gain.
3
Dr. Reddys Laboratories Limited vs. Dr. Reddy Pathlabs Private Limited (09.11.2021 - DELHC) :
MANU/DE/2966/2021

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territorial jurisdiction to hear the present suit. The registered offices of both the parties
are located at Hyderabad. The defendant is not conducting any business in Delhi and
no part of cause of action has arisen within the jurisdiction of this court. It is also urged
that Section 134 of the Trade Marks Act has no application to the facts of this case as
though the corporate office of the plaintiff is situated in Delhi but a suit for infringement
can be filed only at a place where the plaintiffs registered office is located. Additionally,
it is urged that Section 134 of the Trade Marks Act is relevant only for the purposes of
infringement of the trade mark. It is urged that the present suit is a composite suit for
passing off and unfair competition. Hence, the present application.
22. Similarly, the defendant has its registered office in Hyderabad and is not conducting
any business in Delhi and there has been no trademark infringement and no part of
cause of action has arisen within the jurisdiction of this court.
23. In Samsung Electronics Co. Ltd. v. Kapil Wadhwa4, the Delhi High Court held that a
trademark infringement suit was not maintainable before the District Court of Delhi as
the cause of action did not arise within its territorial jurisdiction.
24. Therefore, in the present case the suit is not maintainable.

2. WHETHER AND TO WHAT EXTENT THE DIRECT SELLING GUIDELINES,

2016 ARE ENFORCEABLE AND APPLICABLE TO NATURECARE.

It is humbly submitted before this Hon’ble court that the [2.1] Direct Selling Guidelines are
merely advisory in nature. Since the guidelines do not trace their origin to any statutory
provision, and were also not placed before Parliament for ratification, [2.2] they are not
binding.

2.1 DSG ARE MERELY A MODEL FRAMEWORK FOR STATE GOVERNMENTS

AND UNION TERRITORIES

25. It is therefore submitted that Formulation of the guidelines5were not in the form of
"executive instructions" at all. A careful reading of the notification reveals that the
guidelines have been issued by the DoCA6. Its power to frame such guidelines can be
traced back to the Consumer Protection Act, 1986 ('CPA').

4
Samsung Electronics Company Limited and Ors. vs. Kapil Wadhwa and Ors. (17.02.2012 - DELHC) :
MANU/DE/0571/2012
5
Direct Selling Guidelines, 2016
6
DoCA – full form

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26. In the case of Poonam Verma v. Delhi Development Authority7, the Supreme Court
held that in the absence of any statutory provision and that "guidelines per se do not
partake the character of a statute" and are merely advisory in nature.
27. In G.J. Fernandez v. State of Mysore8, the Supreme Court stated that the Mysore
Public Works Department Code rules were not considered "law" and that Article 1629
of the Constitution of India could not be invoked to establish the power of the State
Government to frame rules. The Court clarified that executive power allowed the State
Government to issue administrative instructions to its employees, but such instructions
did not become statutory rules unless issued under the authority of a statute or a
constitutional provision. The Court concluded that the Code's instructions were merely
administrative and not statutory rules since no statute conferred the authority to issue
such rules to the State Government, and Article 162 did not provide rule-making power
to the State Government.
28. The Direct Selling Guidelines, 2016 were issued by the Inter-Ministerial Committee
with the following objective:

'MINISTRY OF CONSUMER AFFAIRS, FOOD

AND PUBLIC DISTRIBUTION
(Department of Consumer Affairs)
NOTIFICATION
Advisory to State Government/Union Territories:
Model Framework for Guidelines on Direct Selling
2.2 DSG ARE NOT ENFORCEABLE TO ANY EXTENT TO NATURE CARE

29. In Syndicate Bank v. Ramchandran Pillai10, the Supreme Court ruled that guidelines
or executive instructions without statutory backing are not considered "laws," and
therefore, their compliance cannot be enforced through courts. Even if there is a
violation of such non-statutory guidelines, it does not entitle an individual to seek a
court order for their enforcement. However, if an order is validly made in accordance

7
MANU/SC/8225/2007
8
MANU/SC/0050/1967
9
Article 162 in The Constitution Of India 1950 Extent of executive power of State Subject to the provisions of
this Constitution, the executive power of a State shall extend to the matters with respect to which the Legislature
of the State has power to make laws Provided that in any matter with respect to which the Legislature of a State
and Parliament have power to make laws, the executive power of the State shall be subject to, and limited by, the
executive power expressly conferred by the Constitution or by any law made by Parliament upon the Union or
authorities thereof Council of Ministers

10
(2011) 15 SCC 398

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with a statute, transgressions of guidelines alone do not justify interference unless they
are arbitrary, mala fide, or in violation of a statutory provision.
30. The Court further emphasized that the guidelines in question were not issued under the
authority of the Public Premises Act or any other statute. Therefore, even if there was a
violation or non-compliance with the guidelines, it could not be used to deny relief to
the party invoking the provisions of the Public Premises Act. Reading the guidelines
into the statute was deemed impermissible. The Court clarified that if there is a
complaint regarding non-compliance with such guidelines, the appropriate recourse is
to bring it to the notice of a higher authority. Consequently, the enforcement of rights
and exercise of powers under the Public Premises Act cannot be nullified by relying on
or referring to non-statutory guidelines issued by the Central Government.
31. In the case of Amazon v. Amway case11, the court did not hold DSGs as law. DSG are
not law but merely advisory in nature. DSGs were "merely a model framework for State
Governments and Union Territories to come out with an actual legal mechanism to
enforce the same" and that "they are not binding in nature".
32. As per the para 9 of the facts of the present case a Cease-and-Desist Letter dated
5.12.2022 was promptly sent by Fusion Natural Health to NatureCare, contravention of
the Direct Selling Guidelines 2016. This cannot be enforcing and extended to
NatureCare as Direct Selling Guidelines has no binding effect and cannot be enforced
by court.
33. Therefore, it is humbly submitted by the counsel of the defendant, before this honorable
bench, that the Direct Selling Guidelines, 2016 are not enforceable and applicable to
NatureCare. Thus, the same lacks legal sanction and enforceability.
3. WHETHER NATURECARE'S USE OF INSTABOOK TO SELL FAKE GOODS
WITH THE MARK " FUSION NATURAL HEALTH '' CONSTITUTES AN
INFRACTION OF THE TRADE MARKS ACT, 1999.

It is humbly submitted before this Hon’ble court that NatureCare’s use of Instabook to sell fake
goods with the mark " Fusion Natural Health '' [3.1] does not constitute an infraction of the
Trade Marks Act, 1999 as it is obtained legally by the Nature care through authorised direct
seller and [3.2] it is within the legislative limit provided by the Trade Marks Act, 1999.

3.1 NATURE CARE’S CHANNEL OF PROCUREMENT AND SELLING FALLS

UNDER PRINCIPLE OF EXHAUSTION

34. According to para 9 of the proposition, NatureCare has purchased the goods from
Fusion Natural Health’s authorised direct seller which is a legitimate channel to obtain
Fusion Natural Health’s products.

Amazon Seller Services Pvt. Ltd. and Ors. vs. Amway India Enterprises Pvt. Ltd. and Ors. (31.01.2020 -
11

DELHC): MANU/DE/0311/2020

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35. Exhaustion limits the trademark owner's control over alienation after one legitimate
sale12. National exhaustion means that such a legitimate first sale must take place in the
same national market as the subsequent sale; international exhaustion means that the
first sale could be in any market around the world13.
36. The counsel is relying on the Central Board of Excise and Customs’ clarifications and
observations to this notification that as long as the goods are not materially altered or
impaired and are lawfully acquired in a foreign market, the consent of the owner of the
trademark is immaterial14. Trademark exhaustion, also known as the first sale doctrine,
is a fundamental principle within trademark law. It stipulates that the exclusive rights
associated with a trademark are exhausted or depleted upon the initial sale or lawful
distribution of the goods or services bearing the trademark. The underlying premise is
that once the trademark owner has derived economic benefit from the initial sale or
distribution, the subsequent purchaser or transferee is entitled to utilize or dispose of
the goods or services without further restriction. Once the trademark owner has
exercised this distribution right, they have effectively relinquished their exclusive
control over the subsequent fate of the objects bearing their trademark.
37. Therefore, by virtue of trademark exhaustion, NatureCare in the present suit contends
that it has gained the legal entitlement to utilize, resell, or otherwise dispose of them in
a manner that they deem appropriate, without infringing upon the trademark rights of
the Fusion Natural Health.
38. When it comes to seal of judiciary on the topic of exhaustion of trademark for goods,
the debate only revolves around whether the word ‘market’ mention in section 30(3)15
means national or international. Samsung v. Kapil Wadhwa16 - single bench - Justice
Manmohan observed that 'markets' meant domestic markets and that "reading it
otherwise would be misreading or ignoring the words in the statute "
39. Section 30(3)17 of the Trademarks Act, 1999 provides for the principle of territorial
exhaustion of trademark rights in India. It states that once lawfully acquired, the
purchaser of the goods may further sell those goods in the market without it constituting
as trademark infringement.

12
Herman Cohen Jehoram, International Exhaustion versus Importation Right: A Murky Area of Intellectual
Property Law, (1996), https://www.ivir.nl/publicaties/download/Cohenl.pdf.
13
Id
14
Circular No. 13/2012-Customs, F. No. 528/21039/08-Cus/ICD, May 8 2012, http://foundryinfo-
india.org/ImportantNotification/CUS-CR-13-2012.pdf.
15
Section 30(3) Where the goods bearing a registered trade mark are lawfully acquired by a person, the sale of
the goods in the market or otherwise dealing in those goods by that person or by a person claiming under or
through him is not infringement of a trade by reason only of—
(a) the registered trade mark having been assigned by the registered proprietor to some other person, after the
acquisition of those goods; or
(b) the goods having been put on the market under the registered trade mark by the proprietor or with his consent.
16
Samsung Electronics Company Limited v. Kapil Wadhwa, 49 P.T.C. 571 (Del), (2012)
17
Supra 4

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40. The principle of territorial exhaustion of rights is based on the doctrine of first sale
where the title over any product passes on to the purchaser once it has been sold. In
such a scenario, the purchaser has complete rights over the product and may even
choose to sell it to someone else. This is also embodied in Section 1918 of the Sale of
Goods Act which provides that upon a contract of sale for specific property, the property
and the goods are transferred to the buyer. Once the title passes to the buyer, no
condition can be further imposed on the buyer.
41. The division bench in Kapil Wadhwa v. Samsung19 concluded that the legislative
intent is to adopt the broader version i.e., international exhaustion and India follows the
principle of international exhaustion of rights.
42. Another case of Copad SA v Christian Dior couture SA and Others20 discussed the
exhaustion of the rights of the proprietor of a trade mark. The Court ruled that a licensee
who contravenes a provision in a licence agreement prohibiting sales to discount stores
of goods bearing the trade mark, on grounds of the trade mark's prestige, can be subject
to legal action by the proprietor of the trade mark if it has been established that that
contravention damages the allure and prestigious image which bestows on those goods
an aura of luxury. The Court also stated that if sales by a third party using customary
methods in its sector of trade damage the reputation of a trade mark, it is for the national
court to assess this based on particular circumstances.
3.2 USE OF INSTABOOK TO SELL FAKE GOODS WITH THE MARK " FUSION
NATURAL HEALTH '' DOES NOT CONSTITUTES AN INFRACTION OF THE
TRADE MARKS ACT, 1999.

43. It is humbly submitted that Instabook is an intermediary within the meaning of Section
2(w) of IT Act
44. The term intermediary is defined under Section 2(w) of the IT Act and includes a broad
range of services under its ambit, including storing and recording of information. It is
submitted in this context that Insta book is a social media platform.21 It is engaged, inter
alia, in providing services related to advertising products based on paid-subscription
model.22

18
Section 19 in The Sale of Goods Act, 1930 Property passes when intended to pass. —
(1) Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the
buyer at such time as the parties to the contract intend it to be transferred.
(2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the
conduct of the parties and the circumstances of the case.
(3) Unless a different intention appears, the rules contained in sections 20 to 24 are rules for ascertaining the
intention of the parties as to the time at which the property in the goods is to pass to the buyer.
19
194 DLT 23 (2012)
20
ETMR 683 [2009]
21
Para 11, Moot Proposition
22
Para 5, Moot Proposition

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45. It is submitted that Indian courts in cases like Amway v. Amazon & My Space have
held internet websites to have served the function of intermediaries. Accordingly, it is
submitted that Instabook is intermediary for the purpose of Section 2(1)(w) of the IT
Act.
46. Information given by Nature Care qualifies as Third Party Information as under Section
79(2) & Section 79(3)
47. The Delhi High Court in Christian Louboutin Sas vs Nakul Bajaj & Ors has
observed that when an intermediary receives order by a court of law for removal of
content, it must comply. In the present case, it is clear beyond doubt that Instabook was
willing to stop Nature Care from using its online sale apparatus when requested by the
petitioner.23 Although no actual court order was passed to that effect, the willingness of
Insta to not associate itself in the sale of counterfeit products and assisting the plaintiff
with necessary removal must be taken into consideration.
48. Furthermore, The Hon’ble High Court analyzed the meaning of “intermediary” under
the Information Technology Act and whether “every company which runs an e-
commerce website automatically comes under the definition of intermediary?
49. As per the Information Technology Act, 2009 (or the IT Act), an “intermediary is
defined as under:
50. "Section 2(w) "intermediary", with respect to any particular electronic records, means
any person who on behalf of another person receives, stores or transmits that record or
provides any service with respect to that record and includes telecom service providers,
network service providers, internet service providers, web-hosting service providers,
search engines, online payment sites, online-auction sites, online-marketplaces and
cyber cafes."
51. According to the Clause 7(6)24 of the DSGs, the direct seller in a written consent from
the Direct Selling Entity can sell or offer for sale in a lawful way, any product or service
of a Direct Selling Entity to the including on an e-commerce platform / marketplace.
52. It is submitted that Nature Book’s use of Instabook does not amount to infringement of
the plaintiff’s mark due the principle of exhaustion. Furthermore, since Instabook is an
intermediary, the use of its services to sell the products through an online medium does
also does not amount to an infraction under the Trademarks act, 1999.

4. WHETHER INSTABOOK IS UNDER THE DEFINITION OF

"INTERMEDIARIES" AND QUALIFIES FOR PROTECTION UNDER THE "SAFE

23
Para 11, Moot Proposition
24
Clause 7(6), Direct Selling Guidelines, 2016 Any person who sells or offers for sale, including on an e-
commerce platform / marketplace, any product or service of a Direct Selling Entity must have prior written consent
from the respective Direct Selling Entity in order to undertake or solicit such sale or offer.

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HARBOUR" CLAUSES LISTED IN THE INFORMATION TECHNOLOGY ACT OF

2000 AND THE INTERMEDIARY GUIDELINES OF 2011.

It is humbly submitted that [4.1] Instabook is an intermediary within the meaning of Section
2(1)(w) of IT Act and thus, [4.2] information given by Nature Care qualifies as Third Party
Information as under Section 79(2) and S.79(3).

4.1 INSTABOOK IS AN INTERMEDIARY WITHIN THE MEANING OF SECTION

2(1)(W) OF IT ACT

53. Instabook is an intermediary within the meaning of Section 2(w) of IT Act

54. The term intermediary is defined under Section 2(w) of the IT Act and includes a broad
range of services under its ambit, including storing and recording of information. It is
submitted in this context that Insta book is a social media platform.25 It is engaged, inter
alia, in providing services related to advertising products based on paid-subscription
model.26
55. It is submitted that Indian courts in cases like Amway v. Amazon & My Space have held
internet websites to have served the function of intermediaries. Accordingly, it is
submitted that Insta book is intermediary for the purpose of Section 2(1)(w) of the IT
Act.
56. Information given by Nature Care qualifies as Third Party Information as under Section
79(2) & Section 79(3)
57. The Delhi High Court in Amway v. Amazon has held that an intermediary shall not be
liable for any third-party information and such immunity is granted based on
compliance with Sections 79(2) or 79(3). It is in this context is is submitted that
information given by Nature Care is third-party information since [i] compliance of
Sections 79(2) & [ii] Section 79(3) was ensured
58. Compliance to Sections 79(2) was ensured
59. It is humbly submitted that the information given by Nature Care was third party
information. Third Party Information is defined as information dealt with by an
intermediary in his capacity as an intermediary.27 In other words, any information which
was posted by a third party person (in this case, Nature Care) on the concerned website.
60. The Delhi High Court in Amway v. Amazon has observed that when a website merely
provides access, it must comply with Section 79(2)(a).28 From the facts it is clear
beyond doubt that Insta book has merely provided access to information for the sale

25
Para 11, Moot Proposition
26
Para 5, Moot Proposition
27
Explanation, S.79(3), IT Act.
28
Para 119, Amway v. Amazon

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and purchase of goods. Nature Care was selling its goods via its business page on the
Instabook website29 and Instabook had no direct control over the sale of goods and was
not participating in the sale of goods.30 This is the case since Insta book is only a social-
media platform31 and not the seller in this case, consumer and seller.
61. The Delhi High Court in Super Cassettes Industries Ltd v. Myspace Inc. &
Another32 held Myspace to be an intermediary since it acted as a "conduit"/ portal for
information where users can upload and view content.33 Similarly in the present case,
Instabook is merely acting as a portal of information facilitating sale between two
parties, and thus is liable to be protected under the safe-harbor provision.
62. Compliance to Sections 79(3) was ensured : The Delhi High Court in Christian
Louboutin Sas vs Nakul Bajaj & Ors34 has observed that when an intermediary
receives an order by a court of law for removal of content, it must comply. In the present
case, it is clear beyond doubt that Instabook was willing to stop Nature Care from using
its online sale apparatus when requested by the petitioner.35 Although no actual court
order was passed to that effect, the willingness of Insta to not associate itself in the sale
of counterfeit products and assisting the plaintiff with necessary removal must be taken
into consideration.
63. Furthermore, The Hon’ble High Court analyzed the meaning of “intermediary” under
the Information Technology Act and whether “every company which runs an e-
commerce website automatically comes under the definition of intermediary?
64. As per the Information Technology Act, 2009 (or the IT Act), an “intermediary is
defined as under:
65. "Section 2(w) "intermediary", with respect to any particular electronic records, means
any person who on behalf of another person receives, stores or transmits that record or
provides any service with respect to that record and includes telecom service providers,
network service providers, internet service providers, web-hosting service providers,
search engines, online payment sites, online-auction sites, online-marketplaces and
cyber cafes."
66. Thus, in the present case defendant satisfies all the elements outlined in the reasons
stated above, and hence it is submitted to the hon/ble court that Instabook is an
intermediary within the meaning of Section 2(1)(w) of IT Act.
4.2 INFORMATION GIVEN BY NATURE CARE QUALIFIES AS THIRD PARTY
INFORMATION AS UNDER SECTION 79(2) AND S.79(3).

29
Para 5, Moot Proposition
30
Para 11, Moot Proposition
31
Para 5, Moot Proposition
32
Myspace Inc. vs. Super Cassettes Industries Ltd. (23.12.2016 - DELHC) MANU / DE / 3411 / 2016
33
Para 41
34
Christian Louboutin SAS vs. Nakul Bajaj and Ors. (02.11.2018 - DELHC) MANU/DE/4019/2018
35
Para 11, Moot Proposition

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67. It is humbly submitted in front of the hon/ble court that it was held by the Supreme
Court in Shreya Singhal v. UOI36, that “intermediary upon receiving actual knowledge
from a court order or on being notified by the appropriate government or its agency that
unlawful acts relatable to Article 19 (2) are going to be committed then fails to
expeditiously remove or disable access to such material”. This clearly implies that the
intermediary is not under an obligation to observe self-regulation. It would not lose safe
harbour protection if it refuses to take down unlawful content on its platform, pursuant
to a written intimation by any private party. Compliance with the conditions stated
under Section 79 would ensure safe harbour protection to the intermediary. This
protects the right to freedom of speech and expression of the third parties as well as the
intermediaries to deal with data which is legitimate.

1. Also, the court ruled that intermediaries have been given a safe harbour from civil liability
and that this “safe harbour” should be available even in relation to criminal prosecutions
when a higher degree of culpability is needed. Thus, the intermediary would be eligible to
seek protection under Section 79 of the IT Act unless an active role in the commission of
the offences complained of is disclosed.37

2. Furthermore, in Amazon.com, Inc. v. Commissioner of Taxation38 case, the Australian

Federal Court ruled that Amazon's US website was not liable for goods sold by third-party
sellers on its platform and shipped from overseas. The court held that Amazon was not the
seller of the goods and therefore not responsible for collecting and remitting goods and
services tax (GST) in Australia.

3. An intermediary, as defined under Section 2(w) of the Information Technology Act, or its
directors/officers, shall not be held liable for any action or inaction on the part of a
vendor/seller utilizing the facilities provided by the intermediary through a website or
marketplace. The intermediary cannot be held responsible or liable for the sale of any item
on its platform that does not comply with the requirements under the Drugs and Cosmetics
Act, as the essential elements of Section 18(1)(c) of the Act have not been fulfilled.
Therefore, neither Snapdeal nor its directors can be prosecuted for an offense under Section
27(b)(ii) of the Act. Furthermore, due to the absence of a satisfactory explanation for the
significantly delayed filing of the complaint, the delay proves fatal to these proceedings.
As a result, the petitions are allowed, and the impugned proceedings are quashed. The
Karnataka High Court in its judgment, held that Snapdeal, being a market-place e-
commerce entity, could claim protection under Section 79(1) of the IT Act, provided it
satisfied the conditions laid down in Section 79(2) and Section 79(3).39

36
Shreya Singhal vs. Union of India (UOI) (24.03.2015 - SC) MANU/SC/0329/2015

37
Flipkart Internet Private Ltd. v. State of NCT of Delhi & Anr. (2022)
38
Amazon.Com, Inc. v. Comm'r, T.C. Memo. 2014-245 (U.S.T.C. Dec. 10, 2014)
39
Kunal Bahl and Ors. vs. State of Karnataka (07.01.2021 - KARHC) : MANU/KA/0010/2021

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4. Thus, it is humbly submitted by the counsel of the plaintiff before this honorable bench that
the information provided by Nature Care was third-party information and Insta book
ensured necessary compliance. The exemption of Section 79(1) is applicable when
conditions under Section 79(2) are met.40 In the present case, both Section 79(2) & Section
79(3) were complied with, thereby qualifying Insta Book for protection under Section
79(1).

5. It is humbly submitted that Instabook comes under the definition of Intermediaries and
thus, qualifies for protection under the safe harbor clause since Instabook is an intermediary
within the meaning of Section 2(1)(w) of the IT Act and the information provided by the
defendant amounts to third-party information pursuant to Section 79(2) & 79(3) of the Act.

5.WHETHER NATURECARE IS GUILTY OF TORTIOUS INTERFERENCE WITH

THE CONTRACTUAL RELATIONSHIP ESTABLISHED WITH FUSION
NATURAL HEALTH’S DIRECT SELLERS/DISTRIBUTORS.

It is respectfully submitted before this Honourable Court, NatureCare asserts its plea of not
guilty concerning the allegation of tortious interference with the [5.1] contractual relationship
established between Fusion Natural Health and its direct sellers/distributors. It is therefore
contended that NatureCare is merely engaged in fair competition with the plaintiff and has not
committed any wrongful act that would constitute [5.2] tortious interference.

5.1 CONCEPT OF CONTRACT BETWEEN FUSION NATURAL HEALTH AND ITS

DISTRIBUTORS.

68. It is further submitted that:

6. That the defendant has not engaged in any intentional or malicious behavior to interfere
with the contractual relationship between Fusion Natural Health and its direct
sellers/distributors. Their actions have been in accordance with lawful business practices
and have not sought to induce any breach of contract or to cause any harm to the plaintiff's
contractual relationships. Moreover, it is contended that the defendant's actions were
motivated by a legitimate business interest rather than malice or an intention to harm the
plaintiff.

40
Amway India Enterprises Pvt. Ltd. vs. Amazon Seller Services Pvt. Ltd. and Ors. (22.11.2021 - SC Order)
MANU/SCOR/46057/2021

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69. In the case of Inox Leisure Limited v. PVR Limited41, the Delhi High Court addressed
the tort of unlawful interference in contractual relationships and, among other things,
concluded that this tort has no place in India in light of Section 2742 of the Indian
Contract Act, 1872. The court's decision referred to its earlier ruling in Modicare
Limited v. Gautam Bali43, where an injunction was sought to restrain ex-employees
from enticing customers and consultants within the plaintiff's marketing network. The
following principles were established:
7. Agreements restricting a profession, trade, or business are rendered void under Section 27
of the Contract Act. It would be inconsistent to argue that the law incapacitates a party from
enforcing such an agreement yet permits the same party to seek similar relief under the law
of tort. What cannot be enforced through a contract cannot be enforced by invoking the tort
law.
8. Unlike the United Kingdom, which recognizes both the tort of unlawful interference in
contractual relationships and reasonable restraints on trade, India does not entertain such
concepts due to the existence of Section 27 of the Contract Act. Once the law has been
codified by Parliament, the principles of English law cannot be imported44.
70. The right to engage in trade, business, or a profession is a fundamental right protected
by Article 19(6)45 of the Constitution of India. Any restrictions on this right can only
be imposed by enacting a law specified in Article 1946.
9. A claim based on unlawful interference with business or enticing a breach of contract
cannot be enforced in a court of law, whether contractually or by invoking the law of tort.

41
CS(OS) No. 196/2018, I.A. No. 2291/2019 & I.A. No. 5775/2018
42
Section 27. Agreement in restraint of trade, void. Every agreement by which anyone is restrained from
exercising a lawful profession, trade or business of any kind is to that extent void.
43
MANU/DE/3270/2019
44
Superintendence Company of India (P) Ltd. v. Krishan Murgai (1981) 2 SCC 246

45
Article 19(6) r/w Article 19(1)(g)
Nothing in sub clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes,
or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions
on the exercise of the right conferred by the said sub clause, and, in particular, nothing in the said sub clause shall
affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating
to,
(i) the professional or technical qualifications necessary for practising any profession or carrying on any
occupation, trade or business, or
(ii) the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business,
industry or service, whether to the exclusion, complete or partial, of citizens or otherwise
Article 19 (1)(g) to practise any profession, or to carry on any occupation, trade or business

46
Independent News Service Pvt. Ltd. v. Sucherita Kukreti (2019) 257 DLT 426

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71. These principles were established by the court in a formal and considered manner,
upholding the position that the tort of unlawful interference in contractual relationships
is not recognized in India, primarily due to the provisions of Section 27 of the Indian
Contract Act, 1872.
72. In the present case, NatureCare is not guilty as the plaintiff has not breached any
contract between Fusion Natural Health and its direct sellers/distributors.
5.2 ESTABLISH THE TORTIOUS INTERFERENCE BY NATURE CARE

73. It is humbly submitted before the hon’ble court that in the case of Greig v. Insole47, the
fundamental aspects of Tortious Interference were clearly laid down. It was held that
five conditions were required to be fulfilled by a plaintiff in a suit for interference, in
order to prove a case of unlawful interference:
a. first, there must be either direct interference with performance of the contract or
indirect interference with performance coupled with the use of unlawful means;
b. secondly, the defendant must be shown to have knowledge of the relevant contract
whether of the exact contract or in part;
c. thirdly, the intent to interfere with the relevant contract;
d. fourthly, damage to the Plaintiff which is more than nominal damage; and
e. fifthly, so far as is necessary, the plaintiff must successfully rebut any defence based
on justification which the defendant may put forward.
74. In Kapil Wadhwa v. Samsung Electronics Section 30(3) of the Trademarks Act, 1999
provides for the principle of territorial exhaustion of trademark rights in India. It states
that once lawfully acquired, the purchaser of the goods may further sell those goods in
the market without it constituting as trademark infringement.
75. The Central Board of Excise and Customs drew attention to this notification and
clarified that as long as the goods are not materially altered or impaired and are lawfully
acquired, the consent of the owner of the trademark is immaterial48.
76. As it is necessary to use the unlawful means to constitute interference, Nature Care
cannot be charged with the same as it is seen in the first condition laid down in the case
of Greig v. Insole there must be either direct interference with performance of the
contract or indirect interference with performance coupled with the use of unlawful
means.
77. Therefore, it is submitted before the hon’ble court that NatureCare is not guilty
concerning the allegation of tortious interference with the contractual relationship
established between Fusion Natural Health and its direct sellers/distributors.

47
Greig v Insole 1WLR 302 [1978]
48
Circular No. 13/2012-Customs, F. No. 528/21039/08-Cus/ICD, May 8 2012, http://foundryinfo-
india.org/ImportantNotification/CUS-CR-13-2012.pdf.

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78. It is therefore further submitted that NatureCare is merely engaged in fair competition
with the plaintiff and has not committed any wrongful act that would constitute tortious
interference.

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PRAYER

In the light of facts stated, issues rasied, authorities cited and arguments advanced, the Counsel,
for the defendant, respectfully request the Hon’be court to find and declare that:

i) The suit is not maintainable before the District Court of Delhi

ii) The Direct Selling Guidelines, 2016 are not enforceable and not applicable to
NatureCare
iii) The NatureCare's use of Instabook to sell goods with the mark " Fusion Natural
Health " does not constitutes an infraction of the Trade Marks Act, 1999
iv) The Instabook is not under the definition of "Intermediaries" and does not
qualifies for protection under the "safe harbour" clause listed in the Information
Technology Act of 2000 and the Intermediary Guidelines of 2011
v) The NatureCare is not guilty of tortious interference with the contractual
relationship established with Fusion Natural Health’s direct sellers/distributors.
And therefore, grant the dismissal of the present suit.

And / Or

Pass any order or declaration that the Hon’ble Court may deem fit in the light of justice, equity,
and good conscience.

All of which is humbly prayed

Sd/-

Counsel for the Defendant

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