Delhi HC Imposes Rs 10 Lakh Cost On Policy Bazaar For Concealment Of Material Facts To Get Ex-Parte Injunction [Read Order]

The Delhi High Court on May 28, 2019, in the case of Policybazaar Insurance Web Aggregator & Anr. v. Acko General Insurance Ltd. & Ors., has imposed Rs 10 lakh cost on online insurance aggregator, Policybazaar, for concealing material facts to obtain an ex-parte injunction in a trademark infringement case filed by it against Acko General Insurance.

A Single Judge Bench of Justice Sanjeev Narula passed the order in a suit filed by Policybazaar against the insurance company, seeking a permanent injunction restraining infringement of its trademarks, passing off, dilution of goodwill, etc.

The Delhi High Court on May 16, 2019, had granted an ex parte ad-interim injunction, restraining Acko General Insurance, which sells policies online, from using the trademark 'policy bazaar' in any manner "or form or combination or as an adword/key word programme through Google".

Acko, thereafter moved an application for vacation of the injunction order on the ground that Policybazaar had no cause of action against it and that the case did not merit the grant of any equitable relief in its favour.

The insurance company told the court that Policybazaar has "concealed and distorted material facts, made misrepresentations and false statements" to obtain the ex-parte ad-interim injunction.

It was argued that while Policybazaar came to the court alleging use of its name/mark as keyword by Acko, the aggregator was doing the same thing with the insurance company's name.

The insurance company claimed that Policybazaar had been bidding for its registered trademark ‘ACKO’ as a keyword and therefore, its website was showing up as a sponsored link whenever someone was searching for 'ACKO'.

Policybazaar admitted to doing so, but told the court that it had stopped the same since April 23, 2019, and on the date of filing of the suit, it was not bidding for the trademark of the defendant.

Further, it also stated that it was willing to file an affidavit in the court that it would not bid for the trademark ‘ACKO’ at any time during the pendency of the suit, and would also render an unconditional apology to the court.

The court, however, did not accept the submission and said that Policybazaar ought to have made true, correct and complete disclosure of the material facts. The court noted that the company was itself indulging in the same activity that it has been complaining of in the present suit.

“(The Court) must uphold its majesty and dignity. The stature of a party or enormity of the claim should not be a constraint for the court to advance the cause of justice. Courts should not allow a party to get away with concealment of material facts when it comes to matters relating to grant of reliefs that are founded on principles of equity. I have no hesitation to say that the concealment has been deliberate in this case…Plaintiffs owed a duty to the court and concealment of facts amounts to making an attempt to pollute the pure stream of justice. Courts have repeatedly instructed that a party who doesn’t disclose all material facts doesn’t have a right to be heard. The maxim “he who seeks equity must also do equity” would also be applicable,” the order states.

Thus, concluding that nondisclosure of relevant facts and its active concealment, for seeking an injunction cannot be countenanced, the court imposed a cost of Rs 10 lakh on Policybazaar.

It directed that Rs 5 lakh be deposited with the Prime Minister's Relief Fund and Rs 5 lakh with Delhi Legal Aid Services Authority and said that the interim order of injunction will remain suspended till the next date of hearing on July 11, 2019.

[Read Order]