Calcutta High Court
Binod Khanna vs Sunny Sales & Ors on 14 May, 2014
Author: Ashim Kumar Banerjee
Bench: Ashim Kumar Banerjee
Form No. J.(2)
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
Original Side
Present :
The Hon'ble Mr. Justice Ashim Kumar Banerjee
And
The Hon'ble Mr. Justice Arijit Banerjee
G.A. No. 1345 of 2014
A.P.O.T. No. 209 of 2014
C.S. No. 99 of 2014
And
G.A. No. 1347 of 2014
A.P.O.T. No. 210 of 2014
C.S. No. 98 of 2014
Binod Khanna
Vs.
Sunny Sales & Ors.
For the Appellants : Mr. Jishnu Saha, Advocate
Mr. Debnath Ghosh, Advocate
Mr. Srenik Singhvi, Advocate
Mr. Sananda Ganguly, Advocate
For the Respondents : Mr. Pratap Chatterjee, Senior Advocate
Mr. Ranjan Bachawat, Advocate
Mr. Sayantan Bose, Advocate
Mr. Prithviraj Sinha, Adovcate
Mr. Goutam Ray, Advocate
Heard on : April 29, 30 and May 6, 2014
Judgment on : May 14, 2014
ASHIM KUMAR BANERJEE, J.
BACKDROP:
The respondent filed a suit alleging passing off action as against the appellant for using the mark "SUNSHINE" for the product that both parties would deal with. Soon after filing of the suit, the respondent moved an application for interim protection. The learned single Judge passed the following Order:
"This is a passing off action. It is moved ex parte, according to the existing practice.
The mark involved is "Sun Shine". The plaintiffs use this mark in sewing machines. They are using this mark, according to Mr. Bose, learned Counsel, from 1994. They have applied for registration. The application is pending.
The defendant is trying to sell identical products with the same mark. He claims user from 2007.
Prima facie the plaintiffs have been able to establish prior user. Let notice of this application be served upon the defendant. I make this application returnable on17th April, 2014. Order in terms of prayer (b) of the Notice of Motion till 30th April, 2014 or until further orders whichever is earlier".
The prayer (b) of the notice of motion was as follows:
"An order injunction restraining the respondent, his men, servants, agents, employees and/or assigns from using the trade mark "Sun Shine" and/or any other mark which is phonetically and/or structurally similar and/or identical with and/or deceptively similar to or fraudulent imitation of your petitioners' trade mark "Sun Shine"
in any manner whatsoever."
The matter was returnable on April 17, 2014. We were told, the parties mentioned the matter before His Lordship however, we are not sure what transpired at the mentioning as there was conflicting version. Fact remains, the interim Order expired on April 30, 2014. His Lordship did not extend the same in view of pendency of the present appeal. The appellant filed the instant appeal on April 25, 2014 that we heard on the above mentioned dates.
ISSUE WHERE THE PARTIES WOULD JOIN:
Normally, the Court of Appeal would not interfere with the ad- interim Order of injunction passed at the initial stage. The present case would have a distinction that we would be discussing little later. We heard the parties at length on the scope of passing of the ex-parte ad interim Order in a passing off action. The appellant would contend, the learned Judge passed the Order ex-parte without requiring the plaintiff to serve a copy of the petition upon the appellant hence; the appellant would not get any opportunity to place their version before the Court, before the Order was passed. They would also contend, normally they would have a right to pray for vacating of the Order under Order XXXIX rule 4 of the Code of Civil Procedure. However, such power would not preclude the appellant to come straight to the Court of Appeal making a grievance of non-service and denial of hearing before passing off the Order.
Per contra, the respondent would contend, the learned Judge limited the interim Order for a brief period and directed notice to be served, immediately the respondent served the notice. The appellant could have applied for vacating of the Order under Order XXXIX rule 4 or wait till the returnable date and pray for vacating or oppose extension of the same as the said Order would spend its force after April 30, 2014 if the same was not continued. The learned Counsel would also contend, without exhausting the remedy as prescribed in the Code referred to above, the appeal would not be maintainable. The parties wanted us to go into merits of the matter, we however, did not permit them to argue on merits. We feel, the learned Judge should be given opportunity to deal with the issue on merit. We would only examine as to whether the situation would warrant passing of the ex-parte ad interim Order on the strength of the material available on record and if so, whether the learned Judge should have explained the situation in the Order itself instead of describing it as "existing practice". The learned Senior Counsel for the respondent, while defending the Order, tried to make a comparison between an ordinary action and an action under intellectual property law. According to him, the tests were totally different. He would go further to say, in any event, the Original Side Judges of a Chartered High Court were not required to assign reason while passing ad interim Order. If the Court of Appeal interfered with the Order it would take the opportunity of the learned Judge to deal with the issue on merits upon hearing both sides. The respondents would rely on the following decisions:
1. Smt. Swaran Lata Ghosh Vs. Harendra Kumar Banerjee and another reported in All India Reporter 1969 Supreme Court Page-1167.
2. Sm. Muktakesi Dawn and others Vs. Haripada Mazumdar and another reported in All India Reporter 1988 Calcutta Page-25.
3. Shiv Kumar Chadha Vs. Municipal Corporation of Delhi and others reported in 1993 Volume-III Supreme Court Cases Page-161.
4. NEPC Micon Limited Vs. Magma Leasing Limited and another reported in 1999 Volume-I Calcutta High Court Notes Page-617.
5. Jitesh Pandey Vs. Smt. Urmilata Sinha and Others reported in 2000 Volume-II Page-856.
6. Venkatasubbiah Naidu Vs. Chellappan and others reported in All India Reporter 2000 Supreme Court Page-3032.
7. Laxmikant V. Patel Vs. Chetanbhai Shah and another reported in 2002 Volume-III Supreme Court Cases Page-65.
8. Binod Kumar Gupta and others Vs. Rajendra Prosad Shukla reported in All India Reporter 2003 Calcutta Page-
68.
9. Akbar Sekh and others Vs. M/s. Mousumi Factory Agency and others reported in All India Reporter 2005 Delhi Page-
73.
10. Intime Spectrum Registry Limited Vs, MCS Limited reported in 2007 Volume-II Calcutta High Court Notes Page-109.
While giving reply the learned Counsel for the appellant would submit the decision in the case of Muktakesi (supra) was no longer a good law in view of the later decisions. He would try to contend, the respondent was not a prior user. In any event, the documents used by the respondents were insufficient to establish a prima facie case. We do not take note of such fact on merit as we did not permit the respondents to argue on merits.
Resuming his argument on the next day, Mr. Debnath Ghosh learned Counsel would rely upon a decision in the case of Bengal Club Limited Vs. Susanta Kumar Chowdhury reported in 2002 Volume-III Calcutta High Court Notes Page-322 and Supratik Ghosh and Another Vs. M/s. Pasari Housing Development Private Limited reported in 2000 Volume-I Calcutta High Court Notes Page-614 to contend, Muktakesi was no longer a good law. He would contend, both parties were importing equipment from abroad. None of the parties were manufacturer. The manufacturer did have the appropriate logo that the appellant used as permissive user. He would also rely upon an unreported decision in the case of Sevoke Plywood Industries Private Limited Vs. Greenply Industries Limiteddated October 11, 1999 and the decision of this Court in the case of Jagadamba Fiscal Services Private Limited Vs. Birla Corporation Limited & Another reported in 2002 Volume-III Calcutta Law Times Page-87.
Mr. Jishnu Saha also appearing for the appellants would adopt the argument made by Ghosh, in addition he would submit, there could be no monopoly on the word "SUNSHINE" or "Lipo" that the original manufacturer possessed, in any event, both parties applied for registration of the mark. The learned Judge recorded, the appellant was using the mark since 2007. Hence, His Lordship should not have passed ex-parte Order without giving opportunity to the appellant to place their views before the learned Judge. He would pray for setting aside of the judgment and Order impugned. With the permission of the Court, Mr. Ranjan Bachawat learned Counsel appearing for the respondent would add, the precedents cited by Mr. Ghosh referred to above, would have no application in the present case as the facts would differ. Mr. Bachawat would reiterate, the judgment and Order impugned would contain reason hence, the plea of the appellant, it was an unreasoned Order, would have no basis whatsoever. He would distinguish the cases cited by Mr. Ghosh. He would contend, the decision in the case of Sevoke Plywood (supra) was rendered after hearing both parties. In Victoria Memorial case, the High Court appointed an expert committee. The expert committee submitted report that this Court rejected without assigning reason, Apex Court upset the same. Mr. Bachawat tried to show us "yellow pages" to substantiate, even in 2005 they were in the market. According to him, the label mark would have no consequence in an action of the like nature. He would pray for dismissal of the appeal.
OUR VIEW:
As observed by us herein before, we made it clear to the parties, we would not be going into the merits, we would only consider whether the materials before His Lordship would warrant an ex-parte Order of injunction or whether His Lordship could have waited for a day or two asking the plaintiff to serve notice upon the defendant. The parties tried to gain sympathy from the Court by referring to facts, we would not blame them. However, we would not consider the same unless it would be absolutely necessary for the present purpose for which we heard the parties and are giving our view through the foregoing judgment and Order.
The law on the subject, in our view, should be guided by the appropriate Matrix Law and the Procedural Law. Mr. Chatterjee learned Senior Counsel appearing for the Respondent, very rightly referred to Section 135 of the Trade Mark Act 1999. The relevant provision would relate to relief in suit for infringement or for passing off. The provision would stipulate, the Court may grant injunction in case of passing off if the Court thinks fit, at the instance of the plaintiff. Such injunction may include an ex-parte injunction or any inter-locutary Order. Sub-Section 3(c) would provide, where in a suit for passing off, the defendants satisfies the Court that at the time he commenced to use the mark complained of he was unaware and had no reasonble ground for believing that the mark was in use and when he became aware, he forthwith ceased to use the mark. The Procedural Law would be the Trade Mark Rules 2002 that would however, not deal with the subject controversy with which we are presently occupied. It is well-settled principle of law in respect of any civil action when Procedural Law is silent the Code of Civil Procedure would come into play. In many Special Statutes and the rules framed thereunder, it was specifically mentioned, even if it is not mentioned Civil Court in a civil action would always use the tool provided by the Code of Civil Procedure. The present action would be of no exception. The Code of Civil Procedure would provide for appropriate mechanism to deal with an action of the like nature. Order XXXIX rule 1 would inter- alia provide, where any property in dispute in a suit is in danger of being wasted, damaged or wrongfully alienated or that the defendant would threaten or intend to remove or dispose of any property to defraud his creditor or threatens to dispossess the plaintiff or causes injury to him, the Court may grant temporary injunction restraining the defendant from doing so. Rule 2 would restrain a defendant from committing a breach of contract or other injury to the plaintiff and such injunction can be passed on such terms as the Court may impose. The consequence of disobedience or breach would amount to contempt. We are really concerned with rule 3 that would require a prior notice to be given to the opposite party before grant of injunction. However, the proviso would empower the Court to pass an ex-parte ad interim Order where the Court shall record the reasons for its opinion that object of granting the injunction would be defeated by delay. However, the applicant must immediately deliver copy of the pleadings and the Order immediately on the following day and consequence of non- service would ip so facto vacate the Order of injunction. The parties cited various decisions on the issue. Mr. Chatterjee would strenuously contend, the Chartered High Court Judge was not required to assign any reason. Also appearing for the respondent, Mr. Bachawat would however, bank his argument by contending, the Order impugned, in fact, recorded reasons. We would go into such aspect little later.
We have considered all the decisions cited at the bar on the issue. The decision in the case of Shiv Kumar Chadha (supra) would however, hold the field. Let us consider Shiv Kumar Chadha (supra). The Apex Court considered its earlier precedents and once again cautioned the Courts that they must follow the mandate of Order XXXIX rule 3 proviso in its true spirit. We feel it apt to quote paragraph 36 and make it a part of this Judgment.
"Accordingly we direct that the application for interim injunction should be considered and disposed of in the following manner:
i) The Court should first direct the plaintiff to serve a copy of the application with a copy of the plaint along with relevant documents on the counsel for the Corporation or any competent authority of the Corporation and the order should be passed only after hearing the parties.
ii) If the circumstances of a case so warrant and where the Court is of the opinion, that the object of granting the injunction would be defeated by delay, the Court should record reasons for its opinion as required by proviso to Rule 3 of Order XXXIX of the Code, before passing an order for injunction. The Court must direct that such order shall operate only for a period of two weeks, during which notice along with copy of the application, plaint and relevant documents should be served on the competent authority or the counsel for the Corporation. Affidavit of service of notice should be filed as provided by proviso to rule 3 of Order XXXIX aforesaid. If the Corporation has entered appearance, any such ex-parte order of injunction should be extended only after hearing the counsel for the Corporation.
iii) While passing an ex-parte order of injunction the Court shall direct the plaintiff to give an undertaking that he will not make any further construction upon the premises till the application for injunction is finally heard and disposed of.
We fully agree with Mr. Chatterjee, the Chartered High Court Judges dealing with matters in the Original Side was not required to assign any reason. Such was the old provision and in our view, would still hold the field. We may look at the said provision from a little different angle. The proviso came in force with effect from February 1, 1977. Even if we hold, the later provision would not disturb the Charter and privilege the Original Side Judges would still enjoy, we would still feel, principles of natural justice, equity and fair play would demand, application of such procedure in all cases. There should not be a different yardstick followed by an Additional District Judge sitting in Barasat with an Original Side Judge dealing with an identical lis of passing off. Such difference would rather be unreasonable. The provision under the Charter was an enabling provision. We, the Judges, speak through our conscience. When we render Justice we should create a situation that the litigants must feel, Justice has been done. We strongly feel, the learned Judge must assign reason before passing an ex-parte ad interim Order of injunction. When it would come to assigning reason, the responsibility of a Judge would be more. He has to consider why he would make a departure from the general provision under rule 3 compelling an applicant to serve notice upon the respondent so that the respondent could come and make their stand clear before the Court. It would be easier for the Court to have two versions at the same time and pass the appropriate Order that the Court may think fit and proper.
Mr. Debnath Ghosh would rely upon two Division Bench decisions in the case of Bengal Club (supra) and Supratik Ghosh (supra), Mr. Chatterjee expressed his dissatisfaction on the proposition of law that these two decisions rendered. He did not specifically criticize these two judgments however, his gesture would make the thing clear. With all humility may we say, the decision in the case of Bengal Club (supra) would correctly apply Shiv Kumar Chadha (supra).
Too much emphasis was put on Muktakesi (supra), the Division Bench of this Court observed, when the learned Judge would pass an ad interim Order it would only consider the pleadings so advanced by the applicant. When the defendant would come and oppose such prayer at the initial stage how could the Court ignore or refuse to look into any document that might be relied upon by the respondent. Otherwise, the purpose for which the rule 3 was enacted would be rendered nugatory. When a respondent is asked to make his stand clear before the Court while prayer for grant of temporary injunction was being considered the defendant and/or the respondent, as the case may be, would definitely try to make their stand clear, such stand could only be supported by documents, if readily available with them, otherwise the statement from the bar without any prima facie support of documents would be of no consequence. With all humility and with deepest regard, we have for their Lordships, Muktakesi was rightly distinguished by Bengal Club, perhaps Muktakesi would not represent the correct legal position. Supratik Ghosh (supra) also took the identical view. Paragraphs 12 and 13 would make it clear. In paragraphs 15 and 16 Supratik Ghosh (supra) reiterated what the Apex Court held, in the case of Shiv Kumar Chadha (supra). In our view, the learned Judge, while passing an ex-parte ad interim Order of injunction must follow the mandate of rule 3 requiring the plaintiff to serve notice upon the respondent so that respondent could make an effective representation at the initial stage. In absence of any affidavit from the respondent, the Court, for ends of Justice, should also consider any material that the defendant would rely upon on their undertaking to file an affidavit certifying the veracity of such document, otherwise the principles of natural justice, equity and fair play would be defeated.
We do not question the competence of the Court to pass an ex-parte ad interim Order of injunction. Proviso would empower so, provided the Court would assign reason explaining as to why they would pass an ex-parte ad interim Order of injunction otherwise, it would defeat the purpose for which such injunction is granted. With due respect to His Lordship and with all humility may we say, there could be no "existing practice" in passing an ex-parte ad interim Order of injunction unless the statute would specifically provide so. Let us now deal with the contention of Mr. Bachawat. Mr. Bachawat would contend, the Order did contain reason. He would refer to two reasons:
i) It was existing practice.
ii) The plaintiff was using the mark from 1994. They applied for registration that was pending whereas the defendant was claiming user from 2007.
The first reason was without any basis as we have observed, immediately herein before. The second reason would say, plaintiff was the prior user. Whether the plaintiff was prior user or not, the defendant must have a say hence, compliance of rule 3 was necessary to that extent, the learned Judge erred. The question would thus remain, whether the situation would cover the proviso to rule 3. The Order would itself say, defendant was using the mark from 2007. An action after seven years in 2014 could, in no stretch of imagination, be termed as a case, rarest of the rare, where heaven would fall on the plaintiff in case of refusal or minute's delay would defeat justice.
We have deepest regard for His Lordship. With all humility may we say, we, the Chartered High Court Judges, while dealing with an Original Side case, would not assume any special power that would defeat the basics of the principles of natural justice. There could be no "existing practice". Each case must stand on its own, each case must be judged on the facts and the distinctive feature involved therein. The Court may pass ex-parte ad interim Order if the situation would demand so however, the Court must discharge its onerous responsibility assigning reason well within the frame work of the proviso to rule 3 so explicitly prescribed and reiterated in Shiv Kumar Chadha (supra). In the present case, the only reason that we find, the plaintiff was the prior user. The plaintiff was not a registered mark holder, nor was the defendant. In an action for passing off the prior use would have dominance. Once the plaintiff would assert they were the prior user the defendant must get reasonable opportunity to deal with such claim. We have scanned the application made before the learned Single Judge. We do not find any serious averment making the case, rarest of the rare, where denial of ex-parte Order would create a situation when heaven would fall on the plaintiff. We could have sustained the Order had there been a case so made out. The Order would itself show, learned Judge took into consideration, the defendant was using the mark since 2007.
The respondent heavily relied on Laxmikant V. Patel (supra) and contended, in intellectual property law, we must follow a different procedure other than Order XXXIX. Mr. Bachawat heavily relied on paragraph 13 to 17. Mr. Bachawat would submit, in passing off action, the plaintiff did not have to prove actual damage in Order to succeed. Likelihood of damage was sufficient hence, a different yardstick should be followed. We would draw his attention to the first part of the same paragraph where the Apex Court recognized the principle for grant of injunction and observed, it was the "same as in case of any other action". In our view, the yardstick to be followed to find out reason might be different however, the basics must be followed. In paragraph 17 the Apex Court observed, the appellate Court should not reassess the material and seek to reach a conclusion different from the one reached by the Court below. We have already observed, we are not of the opinion; the Court did not have power to pass ex-parte Order of injunction. We would say, it must have the materials to sustain, as prescribed under Order XXXIX.
In the case of Smt. Swaran Lata Ghosh (supra), the Apex Court in paragraph 10 of the decision recognized the special power granted to the Original Side Judge of a Chartered High Court. The Apex Court observed, "A Judge of a Chartered High Court is not obliged to record a judgment strictly according to the provisions contend in rule 4(2) and 3 of Order XX Code of Civil Procedure. But the privilege of not recording a judgment is intended normally to apply where the action is undefended, where the parties are not at issue on any substantial matter". In our view, the said decision would have no conflict with the proviso to Order XXXIX rule 3, although came in force much later than the date of delivery of this decision. In the case of Venkatasubbiah Naidu (supra), in paragraph 11 and 13 the Apex Court observed, "It cannot be contended, that the power to pass interim ex-parte orders of injunction does not emanate from the said rule. In fact, the said rule is repository of the powers to grant Orders of temporary injunction with or without notice, interim or temporary, or till further orders or till disposal of the suit". This is well-settled principle of law; we have already recognized the power of the Court to pass ex-parte Order. This decision would support such view. In the case of Victoria Memorial (supra), the Apex Court, while dealing with an environmental matter set aside the Order of the High Court that rejected the report of an expert committee without assigning any reason.
On a Combined reading of the decisions cited at the bar, our understanding of the law is, the Court would have power to pass ex- parte ad interim Order of injunction in a given case where situation would demand so. Such demanding of situation must be apparent from the Order meaning thereby, the Order must be supported by reasons particularly, reasons that would prompt the learned Judge to avoid delay that might be caused asking the plaintiff to serve notice upon the defendant and pray for interim relief. RESULT & DIRECTIONS:
The appeal succeeds and is allowed. The judgment and Order impugned herein, is set aside. We abundantly make it clear, we have not gone into the merits of the matter. The parties would be free to approach the learned Judge to have appropriate Order considering the contentions of the parties.
We direct the appellant to file affidavit-in-opposition positively on the date of reopening after summer vacation, the advanced copy must be served upon the learned Advocate-on-record for the respondent/plaintiff at least five days before reopening so that the respondent could make their affidavit in reply ready to be affirmed and filed on the same day after reopening. We would humbly request the learned Judge to hear the parties and pass appropriate Order in accordance with law. We also permit the respondent to pray for any interim protection pending disposal of the said application in case application is not taken up for hearing within a reasonable period after the reopening.
Arijit Banerjee, J:
I agree.
[ASHIM KUMAR BANERJEE, J.] [ARIJIT BANERJEE,J.]