Consent decree cannot be modified/ altered unless mistake is patent or obvious: SC while considering modification of decree relating to settlement over trademark of CASIO’s scientific calculator

Read Judgment: Ajanta Llp V. Casio Keisanki Kabushiki Kaisha D/b/a Casio Computer Co. Ltd. & Another 

Pankaj Bajpai

New Delhi, February 10, 2022: While considering an application for modification of the Judgment of High Court in consent decree in relation to a Settlement Agreement pertaining to restraining of use of Casio’s trademark over scientific calculator, the Supreme Court has opined that an application u/s 151 of the CPC for alterations/ modification of the consent decree can be entertained if the same is vitiated by fraud, misrepresentation, or misunderstanding. 

A Division Bench of Justice L. Nageswara Rao and Justice B.R Gavai observed that the Court in exercise of its inherent power may rectify the consent decree to ensure that it is free from clerical or arithmetical errors so as to bring it in conformity with the terms of the compromise. 

Going by the background of the case, Casio Keisanki Kabushiki Kaisha (Respondent) filed a suit against the Appellant urging that their directors, agents, sellers, retailers, distributors, suppliers, franchisees, representatives, employees, affiliates and assigns be restrained by a permanent injunction from manufacturing, importing, marketing, advertising, promoting, offering for sale, selling, exporting and/ or using the impugned product ORPAT FX-991ES PLUS bearing the Respondent’s Registered Design for its scientific calculator which is identical to or is a fraudulent imitation of Respondent’s Registered Designs. 

Although the Delhi High Court passed an ex-parte ad-interim order of stay, however, later, a settlement was arrived at and the High Court decreed the suit in terms of the Settlement Agreement. Subsequently, an Application was filed by the Appellant u/s 152 and 153 r/w/s 151 of CPC for rectification of the judgment, contending that the Settlement Agreement pertains only to trademark “FX-991ES PLUS’/ ‘FX-991” and there was an inadvertent typographical error of the trademark in the Settlement Agreement as “FX-991ES PLUS/ FX/ 991”. The High Court however, dismissed the Application. Hence, present appeal. 

After considering the submissions, the Top Court found that the misunderstanding as projected by the counsel for the Appellant between parties relates to use of “FX” or “991” as separate marks in the Settlement Agreement. 

“The understanding between the parties was with respect to “FX-991ES PLUS” as a whole and not with reference to “FX”. A close scrutiny of the correspondence between the parties would show that the Settlement Agreement was arrived at after detailed consultation and deliberations. Thereafter, the parties were communicating with each other and they took six months to arrive at a settlement. The final Settlement Agreement was approved by the mediator”, added the Court.

However, the Apex Court allowed the appeal and upheld the judgment of the High Court observing that there was no allegation either of fraud or misrepresentation on the part of the Respondent.

A consent decree cannot be modified/ altered unless the mistake is a patent or obvious. Or else, there is a danger of every consent decree being sought to be altered on the ground of mistake/ misunderstanding by a party to the consent decree, added the Court.