The Bombay High Court finds Mumbai Khadi & Village Industries Association in violation of injunction restraining use of “Khadi” mark and Charkha logo for organising Khadi Mahotsav 2.0 on its own premises. Rejecting contempt allegations for execution of land sale agreement and residual digital listings, the High Court laid down structured four-step test and directs payment of Rs. 2.50 lakhs as costs.
The Board of Trustees of MKVIA is directed not to host any event relating to “Khadi” and the promotion of “Khadi” by any person whatsoever, regardless of whether such person is certified or approved by KVIC, whether on MKVIA’s premises or elsewhere. Since MKVIA has fallen in line and compliance with the Injunction Order has been achieved, the Court declined to direct any attachment of property or confinement to civil imprisonment, holding that these measures are not ends in themselves but means to securing compliance.
Further, each of the trustees of MKVIA was warned to be careful in future and directed to refrain from indulging in any sharp practice by holding events in conflict with the obligation not to directly or indirectly sell and market any products purporting them to be “Khadi” products or using the “Khadi” name and Charkha mark.
Also read MP High Court: Blacklisting of Contractors Is Civil and Commercial Death; Writ Remedy Available
On the Khadi Mahotsav 2.0, a Single Judge Bench of Justice Somasekhar Sundaresan found it abundantly clear from the material on record that the event was the second edition of a Khadi trade fair, held on MKVIA’s own premises within months of the Injunction Order, in the same format as the first edition held just before the injunction. MKVIA’s defence that it was completely ignorant about a three-day event held in its own premises was characterised as a mere bald assertion that did not inspire any confidence. The Court noted that the promotional material and banner of the event clearly depicted the word “Khadi”, the Charkha symbol, and MKVIA as a joint organiser, making it a flagrant breach of the Injunction Order.
On the relationship between Order XXXIX Rule 2A of the CPC and the Contempt of Courts Act, 1971, the Court conducted an extensive analysis. Referring to the Supreme Court’s ruling in Food Corporation of India v. Sukh Deo Prasad [(2009) 5 SCC 665], the Court acknowledged that the power under Order XXXIX Rule 2A is punitive in nature and akin to the power to punish for civil contempt. However, the Court firmly held that this similarity of context does not mean that every nuance and requirement applicable in the extraordinary contempt jurisdiction vested solely in Courts of Record under Article 215 of the Constitution would automatically apply in absolute terms to the more deeply-regulated jurisdiction under Order XXXIX Rule 2A, which is exercisable by every civil court. The Court noted that while orders under Order XXXIX Rule 2A are appealable under Order XLIII Rule 1(r) of the CPC as a matter of statutory right, orders where Courts of Record refrain from exercising contempt jurisdiction have been declared not appealable under Section 19 of the CC Act.
Also read NCLT Approves Resolution Plan with 87% Haircut in Single-Creditor CIRP of SIS Mohan Real Estate
On the standard of proof, the Court held that the standard necessary for finding a violation under Order XXXIX Rule 2A is the civil standard of preponderance of probability, but of a high degree commensurate with the stigma attendant with violation of a Court order. The Court rejected MKVIA’s contention that the criminal standard of proof beyond reasonable doubt must be applied to even consider whether there is a violation of an evidently explicit obligation. The Court clarified that the Supreme Court in Food Corporation of India v. Sukh Deo Prasad [(2009) 5 SCC 665], spoke of “any possible doubt” in the context of the existence of the obligation said to have been violated, and not about the standard of proof to be deployed to maintain an application under Order XXXIX Rule 2A.
On the Agreement for Sale, the Court rejected KVIC’s contention that execution of the agreement constituted contempt. The Court held that the Injunction Order prohibited use of the MKVIA name in relation to promotion and sale of “Khadi” products, and the Agreement for Sale was a document for sale of land, not sale of Khadi products. The Court observed that various property records, land records, and past filings with the Charity Commissioner would continue to depict the name of MKVIA as the owner, and if KVIC’s contention were accepted, even the absence of mutation entries in land records and every filing made in the Court proceedings themselves would constitute contempt.
On the digital listings, the Court found that the listings were on third-party platforms, there was no allegation of a fresh listing after the Injunction Order, and MKVIA had made efforts to write to the platforms requesting takedown. The Court noted that while these requests were made only after the Contempt Petition was filed, the efforts were noted and the Court was not inclined to exercise the contempt jurisdiction in this regard.
Briefly, Khadi & Village Industries Commission (KVIC), a statutory body established under the Khadi & Village Industries Commission Act, 1956, filed a Commercial IP Suit against Mumbai Khadi & Village Industries Association (MKVIA) and its Board of Trustees, alleging infringement and passing off of the registered “Khadi” trademark and Charkha logo. A Learned Single Judge of the Bombay High Court had, on December 14, 2022, passed an Injunction Order restraining MKVIA, its partners, servants, representatives, agents and all others acting on its behalf from manufacturing, selling, offering for sale, advertising directly or indirectly, or providing any goods or services under the mark “Khadi” — whether as a word, part of a trademark, trade name, or logo, including any mark identical or deceptively similar to KVIC’s registered trademarks and Charkha logos. The restraint also covered use of the name “Mumbai Khadi & Village Industries Association” in connection with such proscribed activities.
The Injunction Order was preceded by a history of litigation. In an earlier suit, MKVIA had given a solemn undertaking to the Court that it would not sell any products called, labelled or described as “Khadi” without due certification from KVIC. That suit was withdrawn on the basis of this undertaking. However, KVIC subsequently discovered that two kurtas purchased from MKVIA’s outlet were identified and invoiced as “Khadi” products, in blatant violation of the undertaking. The Single Judge found MKVIA’s defence dishonest and false, noting that the “Khadi” word was being used in the teeth of the undertaking given to Court, and passed the Injunction Order finding a strong prima facie case of infringement and passing off.
KVIC thereafter filed Interim Application under Order XXXIX Rule 2A of the CPC, alleging wilful circumvention of the Injunction Order, and Contempt Petition No. 13 of 2026 under the Contempt of Courts Act, 1971, alleging further violation. Three specific acts of violation were alleged: (A) the organisation of “Khadi Mahotsav 2.0” in May 2023, a three-day Khadi trade fair held on MKVIA’s own premises, jointly under the aegis of Atharva School of Fashion and Arts and MKVIA, replete with promotional material using the word “Khadi” and the Charkha symbol; (B) execution of an Agreement for Sale dated March 30, 2025 between MKVIA and Rishabraj Estate Developers Pvt Ltd. for sale of immovable property, which used the full name of MKVIA; and (C) continuation of MKVIA’s name in a business directory listing on a third-party digital platform.
