The Supreme Court on Friday ruled that Asian Paints was a “victim” in a criminal case involving counterfeit paint sold under its brand name and had every right to appeal against the acquittal of the accused even though it was not the original complainant in the case [Asian Paints Limited vs. Ram Babu & Anr.].

A bench of Justices Ahsanuddin Amanullah and Prashant Kumar Mishra held that a company harmed by fake goods bearing its brand could directly challenge acquittal of the accused even if it had not filed the original complaint.

“There cannot be any two opinions, that ultimately, it is the Appellant (Asian Paints) who has suffered due to the counterfeit/fake products being sold/attempted to be sold as having been manufactured by the Appellant,” the bench said.

It set aside a 2023 decision of the Rajasthan High Court that had disallowed Asian Paints from appealing against the acquittal of a counterfeit paint seller because it was not the original complainant in the case.

The case originated in February 2016 when a man named Pankaj Kumar Singh - an investigator appointed by a private firm hired by Asian Paints -filed a police complaint in Jaipur. He alleged that a shop called Ganpati Traders, run by one Ram Babu, was selling fake paint buckets with Asian Paints branding.

The police registered a first information report (FIR) under sections 420 (cheating), 120B (conspiracy) of the IPC and 63 and 65 of the Copyright Act, 1957 that deal with infringement.

It later seized 12 buckets of paint from the shop. Forensic tests confirmed that the paint was not manufactured by Asian Paints. A trial followed and in 2019, a local court convicted Ram Babu for cheating and copyright violation. He was sentenced to three years in jail.

However, in 2022, the appellate court reversed the conviction and acquitted him.

Asian Paints then filed an appeal before the Rajasthan High Court but the High Court dismissed it, saying that only the person who originally filed the complaint, i.e, Singh, could appeal. This prompted Asian Paints to approach the top Court.

The Supreme Court said that the approach taken by the High Court was mechanical and narrow. It said the law recognises any person or company who has suffered harm from a crime as a “victim”, even if they themselves didn’t approach the police.

Under the Criminal Procedure Code (CrPC), the term 'victim' includes anyone who suffers a direct loss - physical, financial or reputational - because of an offence.

“The Appellant would suffer financial loss and reputational injury if such products would be bought by the public under the mistaken belief that the same belonged to the Appellant’s brand,” the Court said.

It explained that Singh had only filed the complaint because he had been hired by a firm authorised by Asian Paints to investigate counterfeit activity. So the real injured party and the one whose interests were being protected was the company itself.

The Court also clarified a crucial legal point. Normally, when a case ends in acquittal, it is the government that files an appeal, and only after getting the High Court’s permission. This process falls under Section 378 of the CrPC.

But in 2009, the law was amended to give victims an independent right to appeal against acquittal under a new clause added to Section 372.

The High Court had said that even this new right under Section 372 had to follow the older rule under Section 378 meaning the victim would still need government permission. But the Supreme Court firmly rejected that view.

“We are constrained to observe that the finding of the High Court that the Appellant could not have maintained the appeal before it would amount to completely negating the proviso to Section 372 of the CrPC,” the Court said.

The Court held that Section 372 of the CrPC gives victims an independent and complete right to file an appeal against acquittal without relying on Section 378, which governs State appeals.

“In our considered opinion, Section 372 of the CrPC is a self-contained and independent Section; in other words, it is a stand-alone Section,” the Court said.

The Court also addressed another important question - can this right to appeal be used only when a trial court lets someone off or can it also be used when a higher court overturns a conviction?

The Bench said the victim’s right to appeal applies to any acquittal, whether it comes from a trial court or from an appellate court.

“The proviso to Section 372 of the CrPC is agnostic to the factum of such acquittal being by the Trial Court or the First Appellate Court,” the Supreme Court held.

It cited its earlier judgment in Mallikarjun Kodagali v State of Karnataka to support this interpretation and said victims should get a “realistic, liberal, progressive and beneficial” reading of the law, not a restrictive one.

With these findings, the Court set aside the Rajasthan High Court’s order and restored Asian Paints’ appeal.

The matter was remanded to High Court which was asked to hear the appeal on merits.

Asian Paints was represented by advocates Ajay Singh, Alka Sinha, and Anuvrat Sharma.

The respondents were represented by advocates Thakur Sumit, Arvind Gupta, and S Udaya Kumar Sagar.

[Read Judgment]