Karnataka High Court
M/S. Deepam Silk International, ... vs M/S. Deepam Silks, Mysore on 25 July, 1997
Equivalent citations: 2000(3)KARLJ249
Author: A.M. Farooq
Bench: A.M. Farooq
JUDGMENT
1. These appeals are filed against the common order dated 22-2-1997 on IA I in O.S. No. 132 of 1996 on the file of the learned First Additional District Judge, Mysore. Both the plaintiff and defendant have filed appeals questioning the impugned order.
2. The plaintiff-M/s. Deepam Silk International, a registered partnership firm from Bangalore filed a suit before the Trial Court at Mysore. The case of the plaintiff was that it is a registered partnership firm carrying on business in the sale of silk sarees and textile piece goods under the brand name 'Deepam' and it has opened a showroom at M.G. Road, Bangalore and carrying on its business since 1981. It was stated that its trading style Deepam has become popular all over India and the plaintiff has been receiving orders from all over India for supply of silk sarees and textile materials. Due to intrinsic quality and reputation built over the number of years, silk sarees and textile pieces sold by it under their brand name Deepam have become very popular. It is stated by them that they have spent considerable amount on advertisements. Due to intrinsic quality and reputation built over the number of years silk sarees and textile pieces sold by it under their brand name Deepam have become very popular. It is stated by them that they have spent considerable amount towards advertising in their trade name Deepam through newspaper and TV and they have also applied for registration of the said trade mark Deepam and they have been given a provisional No. 627841. It is stated by them that they have been spending several lakhs of rupees towards advertisements from the year of its inception in 1981 to the date of filing of the plaint.
3. The defendant-M/s. Deepam Silks, a shop doing business in the sale of silk sarees and other textile materials is running business at Mysore. It is alleged by the plaintiff that the defendant is also trading in sarees and dress materials adopting the trade name Deepam Silks, which according to the plaintiff is conveniently and deceptively similar to their trading style. It is stated by them that the defendant is using the said name fraudulently and deceptively in an attempt to pass off the similar goods as that of the goods of the plaintiff. Plaintiff has stated that he has been receiving several phone calls from his customers from Mysore enquiring as to whether a showroom where the defendant is doing the business with the name 'Deepam Silks' belongs to the plaintiff. Therefore, it is stated by the plaintiff that the defendant by adopting the trade mark is confusing the bona fide and valuable customers and make them believe that the defendant's showroom in Mysore is a branch showroom of the plaintiff. The plaintiff alleged that using of the same or similar sounding trade name amounts to infringement of the trade mark and passing off action under the Trade and Merchandise Marks Act, 1958, hereinafter referred to as the 'Act'. Plaintiff therefore prayed for a perpetual injunction restraining the defendant from using the name 'Deepam' to their shop where they are doing business in similar goods as that of the plaintiffs.
4. Plaintiff also filed an application IA I to restrain the defendant from doing business in the name and style of Deepam Silks pending disposal of the suit as otherwise, it was stated by the plaintiff that they will be put to unnecessary hardship and financial loss and it will encourage the defendant to capitalize on the goodwill of the plaintiff without any effort and expenditure.
5. After appearance, the defendant opposed the application filed by the plaintiff for an interim order of injunction and stated that the defendant-showroom is not only a showroom of silk and textile materials at Mysore, but there are number of silk and textile materials outlet both in Bangalore and different parts of Karnataka and other places. They contended that there was no phonetic and visual similarity between the trade name of the plaintiff and the defendant. The defendant has stated that the suit is not maintainable in view of Section 9(1) of the Act. They also stated that mere application for registration of a trade mark under the Act will not confer an exclusive right to the plaintiff as the Trade Mark of plaintiff is not yet registered and therefore, the suit is not maintainable under Section 27 of the Act. The defendant has also alleged that there are many shops dealing in similar goods with the same name in different places in the State. They prayed for dismissal of the suit and also the application for temporary injunction.
6. Both the parties produced several materials before the Trial Court. The Trial Court after considering the materials on record held that it is virtually a suit against passing off action and the plaintiff has shown a prima facie case in his favour. The Trial Court was also of the view that there are serious debatable questions of law and fact involved in the case and there is no inordinate delay or laches on the part of the plaintiff. However, the learned Judge was of the view that even though the plaintiff is entitled to an interim order of injunction, since loss, if any, sustained by the plaintiff could be calculated in terms of money, there was no need to pass an order of restraint against the defendants and ultimately passed an order vacating the earlier interim order granted, but directed the defendant to maintain true and proper accounts of its business every year commencing from 1-3-1997 till the disposal of the suit.
7. It is now submitted by the learned Counsel appearing for the parties that subsequently the defendant filed an application before the Trial Court to the effect that in view of the interim order made by the Court, which is impugned in these appeals, the defendant has changed his trading style from 'Mysore Deepam Silks' to 'Mysore Silks' and obtained an endorsement of change of name from the Commercial Tax authorities. The plaintiff, who is an appellant in MFA No. 1294 of 1997 has filed an application for an order of temporary injunction. The defendant, who is the appellant in MFA No. 1415 of 1997 has filed objections in the other appeal. The defendant has also filed certain copies of documents. I have perused those documents and heard the arguments of the Counsel appearing for the defendant, who has relied upon the documents now produced and also the materials produced before the Trial Court.
8. Sri B.V. Acharya, learned Senior Counsel for the appellant in MFA No. 1294 of 1997 submitted that once the Trial Court in a case of passing off has come to the conclusion that the plaintiff has shown a prima facie case, it ought to have granted an order of injunction since the loss that can be sustained by the plaintiff in passing off action cannot be estimated in terms of money. Merely directing the defendant to keep account of his business cannot be a remedy or criteria to calculate the loss that would be suffered by the plaintiff. The learned Senior Counsel submitted that the plaintiff is a registered firm doing its business in Bangalore since the year 1981. It has applied for registration of the name "Deepam Silks International" in the year 1987 and a provisional number has been given for the said application by the Registrar of Trade Marks. Moreover, the case of the plaintiff is one against passing off action by the defendant. It is submitted by the learned Counsel for the plaintiff that the plaintiff has been doing business with the Trade Mark "Deepam Silk International" and it has been spending huge amounts in lakhs of rupees for the purpose of advertising its trade name and people buy the goods from its shop in view of the reputation gained by it under the Trade name and when another person deals with similar goods with the same Trade name or the Trade name which phonetically sounds the same or deceptively similar to the trade name of the plaintiff, there is every likelihood of the customers or the general public, who knows the reputation of the plaintiff being deceived in buying the goods from the shop of the defendant.
9. On the other hand, Sri Joseph, learned Counsel appearing for the defendant, submitted before me that the plaintiff has not possessed a registered Trade name. Merely because, it has filed an application for registration, it does not amount to registration and it cannot file a suit, on the ground that it has got a registered trade mark. It is also submitted by him that Section 34 of the Act is a saving section, which entitles the defendant to use the same trade mark. According to the learned Counsel, name 'Deepam' which is used by him for trading in silk sarees etc., is a name which he has got from the alphabets taken from the names of partners and other family members. However, he has stated in the memorandum of appeal at page 3 that the trade name 'Deepam', which is used by the defendant is coined from the surname of his family Davalji, his partner Abdul Fathia's nephew's name, Emad and Ejaz, defendant's partner Mustaq Ahmed's son's name, Parveen, his partner's daughter's name, Abdul Fatha, name of defendant's partner and Mustaq Ahmed, name of defendant's partner. Such an argument cannot be accepted at all in view of the specific provisions of Section 34 of the Act. It seems to me that it is a ridiculous argument to contend that the trade name, which is being used by the defendant can be coined like that and fall upon Section 34 to defeat the very provisions of the Act. This argument addressed on behalf of the defendant has to be rejected at the outset.
10. It was next contended by the learned Counsel appearing for the defendant that name 'Deepam' has not been registered for any specific goods and both the plaintiff and defendant are selling the goods which are produced by others and therefore there is no question of passing off the goods under the trade name 'Deepam'. It is also submitted that the plaintiff has not come before the Court with clean hands since according to the defendant, they have been wrongly described in the plaint. It is to be noted that for a passing off action, it is not necessary that the trade name to be registered. A person, who has used the trade name for many number of years is entitled to file a suit on passing off action and restrain another person from passing off goods with the trade name and therefore, it is not necessary for registration of specific goods. The learned Counsel took me through the copies of documents filed by him before this Court. Annexures-R1 to R4 to the objection statement before this Court are copies of documents issued by the Commercial Tax Department where the name of the defendant has been shown as 'Mysore Deepam Silks'. Annexure-R7 is a paper advertisement where the name of the plaintiff is shown as one of the shops where the goods advertised were available. Annexure-R8 is a bill dated 3-9-1996 issued by one Deepam Silk Sarees in Bangalore and Exs. R-9 to R-14 are other bills or advertised copies of different shop with the name Deepam along with other added names. Annexure-R15 is the Telephone Directory where the several names with the name Deepam are found. Exs. R-16 to 18 are copies of advertisements in newspapers where the plaintiff is shown as one of the stockists of the goods shown therein. All these amiexures produced have no bearing at all on the question involved in the suit. The question involved in the suit is Whether the plaintiff has been doing business with the name Deepam Silks from 1981 and whether it has earned reputation for doing business in silk sarees and other textiles with the trade name Deepam Silk International and whether the defendant, who has admittedly started the shop in July 1996 is running business in similar goods with deceptively the same trade name as that of the plaintiff. The plaintiff has prima facie shown that it has been running the shop with the name Deepam Silks International and it is also prima facie shown that the plaintiff has spent huge amounts on advertisements not only in newspapers, but also through TV and other media. The plaintiff has, therefore, shown that its trade name 'Deepam Silk International' has gained reputation with the general consumers and people go to them and buy the goods from their shop in view of the reputation gained by them with the trade name 'Deepam'.
11. Apart from the materials produced by the plaintiff, the defendant has admitted that he has started a shop in Mysore in July 1996 trading in silk and other textiles with the trade name 'Mysore Deepam Silks', which prima facie sounds like 'Deepam Silk International' belonging to the plaintiff. Any customer of the plaintiff or any general consumer will be misled by the name given by the defendant to his shop trading in the same goods as of plaintiff so as to make those persons buy the goods from his shop mistaking it to be belonging to the plaintiff. The Trial Court has correctly appreciated the matter and has correctly held that the plaintiff has shown a prima facie case for passing off action against the defendant. However, the Trial Court has grossly erred in not granting an order of temporary injunction as prayed for by the plaintiff.
12. The reasoning adopted by the Court below for not granting an order of temporary injunction is, in my opinion, perverse. When the Trial Court after perusal of the document has held that the plaintiff has established a prima facie case and it can be said without hesitation that the plaintiffs suit is not either vexatious, frivolous or unscrupulous and there are serious debatable questions of law and facts involved in the case, the Court below ought to have granted an order of temporary injunction in favour of the plaintiff.
13. The materials produced by the plaintiff and the admitted facts on records not only establish that the plaintiff has shown a prima facie case, but also that the balance of convenience is in favour of the plaintiff. The plaintiff who has been spending heavy amounts on advertisement of his trade name, will be greatly prejudiced and will be put to heavy loss and injury, if protection is not given by the Court against a person, whom the plaintiff has shown that it has been passing off his goods with the same reputed trade name as that of the plaintiff. The Trial Court has reasoned that it cannot be gainfully argued that the plaintiff may sustain ultimately loss by the defendant's continuing business by using the trade mark 'Deepam' is also not a ground, which would work in favour of the plaintiff because that loss which the plaintiff may sustain is the one which is amenable to calculation and can be judicially set right and the amount of loss suffered by the plaintiff can be ascertained and can be compensated. I am unable to agree with the said reasoning adopted by the Court below.
14. The learned Counsel for the defendant relied upon the judgment in Dinesh Mathur v O.P. Arora and Others, wherein the Hon'ble Supreme Court has laid down the principles of granting the discretionary order of injunction. There cannot be any doubt about the principles, which have been laid down by the Supreme Court. The learned Counsel also relied upon the judgment in Parle Products (Private) Limited v J.P. and Company, Mysore, which is a case relating to infringement of a trade mark. It is not the question involved herein. The contention raised by the defendant that the plaintiff is not using the trade mark for specific goods and therefore, the defendant is entitled to use the trade mark for similar goods is also devoid of any merits.
15. In M/s. Kala Niketan, Karol Bagh, New Delhi v M/s. Kala Niketan, G-10 (Basement), South Extension Market I, New Delhi, in a similar matter, the Delhi High Court has held in para 7 as follows:
"7. A trade name means a name under which goods are sold by a certain person and which by established usage has become known to the public as indicating that those goods are the goods of that person. To carry on business under such a name, mark description or otherwise in such a manner as to mislead the public into believing that the business is that of another person, is an actionable wrong. Just as a man is not entitled to pass off his goods as being somebody else's goods, so the man is not entitled to carry on business in such a way as to represent his business as being that of another person. This form of injury is commonly termed as that of passing off one's business as the business of another and is the most important example of the wrong of injurious falsehood. The basis of passing off action is making of a false representation. The right, the invasion of which is the subject of action is the right to the goodwill of his business likely to be injured by the misrepresentation. The Court will protect the business reputation enjoyed by any person against tangible risks or probability of injury just as it would protect any other property of that person against any such risk or probability. One of the ways in which a business reputation may be injured is by the appropriation by a stranger of part of such reputation. Such appropriation may be brought about by the adoption of a name which suggests that the person adopting it is in some way connected or associated with the person enjoying the reputation".
I am in respectful agreement with the principles laid down in the above said judgment and I therefore reject the contention of the learned Counsel for the defendant.
16. The plaintiff has shown that he has been doing business for more than a decade with the trade name and that he has not only applied for registration of the trade name nearly a decade back, but also that he has spent lakhs of rupees on gaining the reputation by spending on advertisements in almost all the media available. The loss that would be caused to the plaintiff, if another person like the defendant makes use of the same trade name and sells the same goods, cannot be ascertained in terms of money. Moreover, it is the reputation of the plaintiff's trade name that will be in jeopardy. It should be noted that if the defendant is to sell inferior quality goods, it will definitely affect the business of the plaintiff and it will give an impression to the buyers of the goods from the defendant that the goods sold by the trade name 'Deepam' are not maintaining the quality. Therefore, there is every likelihood of the plaintiff losing its customers and getting its trade name defamed. Such a loss cannot be calculated in terms of money. I am, therefore of the opinion that the interim order of injunction sought for by the plaintiff ought to have been granted. The Court below was, therefore, wrong in not granting an order of temporary injunction.
17. In the result, while dismissing MFA No. 1415 of 1997, I allow MFA No. 1294 of 1997 and set aside the order passed by the Court below and allow IA I filed by the plaintiff in O.S. No. 132 of 1996 before the Trial Court and there shall be an order of injunction restraining the defendant, their servants, workers, agents, dealers as well a person or persons claiming through them from in any manner using the plaintiffs well-established trade mark 'Deepam' in respect of silk sarees and textile piece goods and passing off the same as of their goods by using offending mark 'Deepam Silks' or any other deceptively and conveniently similar trade mark or trading style. Parties to bear their own costs.