Delhi High Court Dismisses Hamdard’s Appeal In Defamation Row With UDMA; Says Suit Falls Within Domain Of Commercial Court

The Delhi High Court has dismissed an appeal filed by Hamdard Laboratories India (Medicine Division) challenging a trial court’s decision to vacate an interim injunction that had restrained the Unani Drugs Manufacturer Association (UDMA) from allegedly misrepresenting and defaming the company.

The Court ruled that the matter was commercial in nature and must be adjudicated by a Commercial Court.

The Single Bench of Justice Dharmesh Sharma held that Hamdard’s claim primarily pertained to the alleged misuse of its trade name 'HAMDARD' in relation to Unani medicinal products, which falls squarely within the domain of intellectual property rights, making the dispute a commercial suit under the Commercial Courts Act, 2015.

"The fact of the matter is that it is difficult to discern that the respondent/defendant has committed any willful or deliberate disobedience of the directions of the learned trial Court. Furthermore, where the Court lacks subject matter jurisdiction for the matter being a commercial dispute, it would not be conducive to take any action for the alleged contempt or disobedience of the directions of that Court," the Court observed.

Dispute Over Use of 'Hamdard' Name in Unani Industry

The controversy stems from statements published on UDMA’s website, which claimed that its members comprise over 70 Unani manufacturers, representing 95% of the Unani medicine industry in India. Hamdard (Medicine Division) objected to these claims, asserting that it alone holds over 60% of the Unani medicine market share and is not a member of UDMA.

The company argued that UDMA’s claims were misleading and had the effect of misrepresenting Hamdard's products, both medicinal and food-based, as being associated with the association, thus causing confusion among the public and regulatory authorities.

The dispute was further complicated by a Family Settlement Deed, under which the Hamdard Group's business was divided into two separate entities — Medicine Division and Food Division with clear restrictions preventing each from entering the other’s domain. Hamdard (Medicine Division) claimed exclusivity over pharmaceutical and medicinal products, and that UDMA was falsely projecting food items from the Hamdard Food Division as Unani medicines, particularly on platforms like Just Dial.

Trial Court’s Interim Relief and Subsequent Reversal

On August 1, 2022, the trial court initially granted an interim injunction, restraining UDMA from publishing or promoting food products of Hamdard Food Division as Unani medicinal items. However, on August 29, 2024, the trial court vacated the stay and dismissed Hamdard’s application for a temporary injunction, noting that the Medicine Division lacked locus standi as it had not filed the suit on behalf of the Food Division.

Hamdard (Medicine Division) then moved the High Court in appeal, contending that the Family Settlement Deed was cited merely to demonstrate its own exclusive rights over the medicinal product line and not to assert any claim over UDMA or the Food Division directly.

High Court: Suit Hit by Commercial Courts Act

The High Court, however, rejected this argument, holding that the dispute was “flawed” in its foundation, particularly the claim that it was not commercial in nature merely because there was no contract between the parties. The Single Bench emphasized, “What is, in essence, claimed is the use of the trade name 'HAMDARD' in relation to Unani Medicinal Products which the respondent/defendant seeks to promote... the present matter clearly falls in the domain of the Commercial Court.”

The Court also highlighted that the Family Settlement Deed, which forms the basis of the claim, has not been fully implemented and that arbitration proceedings between the parties are already underway. Moreover, it held that the suit suffered from non-joinder of a necessary party, namely the Hamdard Food Division, as it was central to the claim of passing off of food items as medicinal products. It found that the case involved issues squarely governed by Sections 2(1)(c)(ix) and (xvii) of the Commercial Courts Act, covering matters related to distribution agreements and intellectual property rights.

Court Urges Commercial Court to Examine IP Issues

The Court concluded that only when Hamdard (Medicine Division) establishes a clear legal right to use the 'HAMDARD' trade name for medicinal products under the Family Settlement, can it claim reputational damage caused by UDMA’s representations.

“The suit, in essence, pertains to the protection of not only the use of trade name but also the intellectual property rights of the appellant/plaintiff with regard to the medicinal, pharmaceutical, and drug,” the Court observed.

Consequently, the Court dismissed the Appeal, paving the way for the matter to be taken up afresh before the appropriate Commercial Court.

"Lastly, in view of the decision by this Court in the case of Namita Gupta v. Suraj Holdings Limited (2024), the learned trial Court shall return the plaint under Order VII Rule 10 of the CPC with liberty to the appellant/plaintiff to present the plaint for redressal of its grievances before the competent Commercial Court," the Court ordered.

Cause Title: Hamdard Laboratories India (Medicine Division) v. Unani Drugs Manufacturer Association [Neutral Citation No. 2025: DHC: 2227]

Appearance:-

Appellant: Senior Advocate Sanjeev Sindhwani, Advocates Shalini Kapoor, Divyanshi Saxena, Udit Bhatiani,

Respondent: Advocate N.K. Jha

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