Telangana High Court
Ms Industries And Spirits P Ltd vs M/S. Allied Blenders And Distillers Pvt ... on 24 June, 2020
Author: M.S.Ramachandra Rao
Bench: M.S.Ramachandra Rao
HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO
AND
HONOURABLE SRI JUSTICE T.AMARNATH GOUD
CIVIL MISCELLANEOUS APPEAL NOS.
180, 181 AND 182 OF 2020
COMMON JUDGMENT:
(Per Sri Justice M.S.Ramachandra Rao) Heard Sri S.Ravi, learned Senior Counsel appearing for Sri M.Naga Deepak, learned counsel for the appellant in these Appeals and Sri Sunil B. Ganu, learned counsel for the respondent.
2. These Appeals are preferred under Order XLIII Rule 1 CPC challenging the orders dt.12.03.2020 in I.A.Nos.401 of 2020, 402 of 2020 and 403 of 2020 in O.S.No.106 of 2020 passed by the XI Additional Chief Judge, City Civil Court, Hyderabad. The plea of the respondent/plaintiff in O.S.No.106 of 2020
3. The said suit had been filed by the respondent against the appellant alleging that the respondent/plaintiff manufactures and markets alcoholic beverages including Indian Made Foreign Liquor (IMFL) and sells it under certain distinctive trademarks and labels, one of which is "Officer's Choice" since 1988; that the respondent had also launched variants of Officer's Choice products including "Officer's Choice Blue"
and "Officer's Choice Black" under various distinctive labels with unique trade dress; that the respondent's products are sold throughout India and overseas under its trademark, label and trade dress under the 2 brand Officer's Choice and its variants and had acquired reputation and goodwill because of their excellent quality, distinctive packaging and characteristics such as taste, flavour, blending etc.; that it is the registered proprietor of the trademark 'Officer's Choice' and its variants in various classes in India which are valid and subsisting; that its label 'Officer's Choice' constitutes original artistic work within the meaning of Section 2(c) of the Copyright Act, 1957 and the respondent is the owner of the copyright therein and had registered labels of Officer's Choice; and the defendant/appellant, which is also a manufacturer and marketer of liquor brands and products and is doing business in the States of Telangana and Andhra Pradesh, is using the label "Manjeera Classic No.1 Whisky" and variants using the prefix "Manjeera" similar and identical to the respondent's Officer's Choice trademark, trade dressed labels.
4. It is contended by the respondent that the conduct of the appellant in adopting and attempting to use the impugned labels is dishonest and in bad faith and proves the appellant's intention to ride on the goodwill and reputation enjoyed by the respondent in the trade dress and labels.
5. It is alleged that the appellant's labels are deceptively and confusingly similar to the respondent's Officer's Choice trademark and labels and that they violate the statutory rights granted to the respondent apart from common law rights acquired by the respondent by virtue of long and continuous use of the same in the market. 3
6. According to the respondent, the label adopted by the appellant copies the red and white combination of the respondent's label "Officer's Choice" with an intention to cause confusion among the public in the market and the public would be deceived into thinking that the appellant's labels and other products form part of the respondent's multiple distinctive products available in the market.
7. It is also contended that there is infringement of trademarks of the respondent by the appellant and the appellant's use of its Manjeera label amounts to "passing off" the appellant's goods as those of the respondent and there is also infringement of copyright of the respondent by the appellant.
8. It is pleaded that irreparable injury is being caused to the respondent and balance of convenience is in favour of the respondent and the following reliefs be granted in the suit:
"i. A decree of permanent injunction be passed in favour of the Plaintiff and against the Defendant, restraining the Defendant, their affiliates, subsidiaries, directors, wholesalers, distributors, partners or proprietors, as the case may be, its officers, servants and agents from launching, manufacturing, selling, exporting, importing, offering for sale, distributing, advertising, dealing in alcoholic beverages directly or indirectly, especially IMFL, or goods of any description bearing the impugned labels and trademarks "Manjeera Classic" and "Manjeera Special" or any trademark and/or label deceptively similar to the Plaintiff's trademark and label "Officer's Choice", amounting to infringement of the Plaintiff's registered trademark "Officer's Choice" and its variants as stated in paragraph 8 of the plaint;4
ii. A decree of permanent injunction be passed in favour of the plaintiff and against the Defendant, restraining the Defendant, their affiliates, subsidiaries, directors, wholesalers, distributors, partners or proprietors, as the case may be, their officers, servants and agents from launching, manufacturing, selling, exporting, importing, offering for sale, distributing, advertising, dealing in alcoholic beverages directly or indirectly, especially IMFL, or goods of any description bearing the impugned trademarks and/or labels "Manjeera Classic" and "Manjeera Special" or any other trademark and/or label deceptively similar to the Plaintiff's "Officer's Choice" labels as stated in paragraph 47 of the plant thereby amounting to infringement of the Plaintiff's copyright therein;
iii. A decree of permanent injunction be passed in favour of the Plaintiff and against the Defendant, restraining the Defendant, their affiliates, subsidiaries, directors, wholesalers, distributors, partners or proprietors, as the case may be, their officers, servants and agents from launching, manufacturing, selling, exporting, importing, offering for sale, distributing, advertising, dealing in alcoholic beverages directly or indirectly, especially IMFL, or goods of any description bearing the impugned trademarks and/or labels "Manjeera Classic" and "Manjeera Special" or any other trademark and/or label deceptively similar thereto, so as to take unfair advantage of and/or cause detriment to the distinctive character and reputation of the Plaintiff's said trademarks, including but not limited to alcoholic products, especially whisky products, and/or misrepresent its products as those of the Plaintiff and from doing any other thing as is likely to cause confusion or deception leading to passing off of the Defendant's goods and business as those of the Plaintiff and/or dilution of the Plaintiff's trademark/labels "Officer's Choice";
iv. A decree be passed in favour of the Plaintiff and against the defendant, directing the Defendant to deliver up of all the goods bearing the impugned trademark and labels "Manjeera 5 Classic" and "Manjeera Special" and/or any other similar trademarks and/or labels, bottles, dies, blocks, cartons and any other infringing material to the authorized representatives of the Plaintiff for the purposes of destruction;
v. A decree be passed in favour of the Plaintiff and against the Defendant directing the Defendant to render accounts of profits illegally earned by the Defendant on account of use of the impugned trademark and labels "Manjeera Classic" and "Manjeera Special" which are deceptively similar to the Plaintiff's trademark/labels "Officer's Choice", and a decree for the amount so found be passed in favour of the Plaintiff;
vi. A decree for damages in the Plaintiff's favour against the Defendant on the basis of the accounts rendered by the Defendant to prove the illegal profits of the Defendant and the losses of the Plaintiff;
vii. An order for costs of the suit proceedings;
viii. Any further orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case."The prayer in IA No.401 of 2020
9. Along with the suit, the respondent filed I.A.No.401 of 2020 under Order XXXIX Rules 1 and 2 CPC for the following relief:
"To grant an interim injunction in favour of the Petitioner and against the Respondents, their affiliates, subsidiaries, directors, wholesalers, distributors, partners and proprietors, as the case may be, its officers, servants and agents and persons claiming through them from manufacturing, selling, exporting, importing, offering for sale, distributing, advertising, dealing in alcoholic beverages, directly or indirectly, especially IMFL, or goods of any description bearing the trademark/label "Manjeera Classic" and "Manjeera Special" or any mark deceptively similar to the Plaintiff's trademark/label "Officer's Choice" and "OC", amounting to infringement of the 6 Petitioner/Plaintiff's trademarks "Officer's Choice", "Choice" and their variants under registration numbers, and be pleased to pass such other order or orders as this Hon'ble Court deems fit and proper in the interest of justice."The prayer in IA No.402 of 2020
10. The respondent also filed I.A.No.402 of 2020 under Order XXXIX Rules 1 and 2 CPC for the following relief:
"To grant an interim injunction in favour of the Petitioner and against the Respondents, their affiliates, subsidiaries, directors, wholesalers, distributors, partners and proprietors, as the case may be, its officers, servants and agents and persons claiming through them from manufacturing, selling, exporting, importing, offering for sale, distributing, advertising, dealing in alcoholic beverages, directly or indirectly, especially IMFL, or goods of any description bearing the trademark/label "Manjeera Classic" and "Manjeera Special" or any mark deceptively similar to the Plaintiff's trademark/label "Officer's Choice" and "OC", so as to take unfair advantage of and/or cause detriment to the distinctive character and reputation of the Petitioner/Plaintiff's said trademarks, including but not limited to alcoholic products, especially whisky products, and/or misrepresent its products as those of the Petitioner/Plaintiff and from doing any other thing as is likely to cause confusion or deception leading to passing off of the Respondent/Defendant's goods and business as those of the Petitioner/Plaintiff and/or dilution of the Petitioner/Plaintiff's trademark/labels "Officer's Choice", "Choice" and "OC" and be pleased to pass such other order or orders as this Hon'ble Court deems fit and proper in the interest of justice."The prayer in IA No.403 of 2020
11. The respondent also filed I.A.No.403 of 2020 under Order XXXIX Rules 1 and 2 CPC for the following relief:
7
"To grant an interim injunction in favour of the Petitioner and against the Respondents, their affiliates, subsidiaries, directors, wholesalers, distributors, partners and proprietors, as the case may be, its officers, servants and agents and persons claiming through them from manufacturing, selling, exporting, importing, offering for sale, distributing, advertising, dealing in alcoholic beverages, directly or indirectly, especially IMFL, or goods of any description bearing the trademark/label "Manjeera Classic" and "Manjeera Special" or any mark deceptively similar to the Plaintiff's trademark/label "Officer's Choice" and "OC", amounting to infringement of the Petitioner/Plaintiff's Copyright under registration numbers, and be pleased to pass such other order or orders as this Hon'ble Court deems fit and proper in the interest of justice."
12. In these 3 IAs,the respondent reiterated the pleas raised in the plaint in support of the interim reliefs claimed therein. The exparte ad-interim injunction granted on 12.3.2020 in the 3 IAs.
13. On 12.03.2020, ex parte ad interim injunction orders were passed by the Court below in all the three I.A.s stating as follows:
"Heard counsel for the petitioner.
Perused records and documents relied by the counsel for the petitioner.
There is a prima facie and balance of convenience in favour of the petitioner. Under the above circumstances, the temporary injunction is granted as prayed till 27-03-2020 subject to compliance under Order 39 Rule 3 of CPC. Issue notice to the respondent by 27-03-2020."
The instant CMAs
14. Assailing these orders, the instant Appeals have been preferred by the appellant/defendant.
8
15. Sri S.Ravi, Sr.Counsel for the appellant contended that while granting an ex parte ad interim injunction under Order XXXIX Rule 3 CPC, it is mandatory on the part of the Court below to record reasons for grant of such ex parte ad interim injunction and since the impugned orders passed by the Court below do not contain any such reasons, the said orders cannot be sustained.
16. It is also further contended that when such ex parte ad interim injunction was granted, it is mandatory on the part of the Court below to decide the Applications for temporary injunction within 30 days as per Order XXXIX Rule 3A CPC, and the Court below has also not done so, and this has caused serious prejudice to the appellant.
17. Sri Sunil B. Ganu, counsel for the respondent does not dispute that the impugned orders passed by the Court below do not contain any reasons as is required by proviso to Order XXXIX Rule 3 CPC when an ex parte ad interim injunction is granted. He also stated that because of COVID-19 pandemic, Subordinate Courts have not been functioning and it was not possible probably for the Court below to comply with Order XXXIX Rule 3A CPC and decide the temporary injunction Applications within 30 days.
9The consideration by the Court
18. We have noted the contentions of both parties.
19. Order XXXIX Rule 3 CPC states:
"3. Before granting injunction, Court to direct notice to opposite party :-- The Court shall in all cases, except where it appears that the object of granting the injunction would be defeated by the delay, before granting an injunction, direct notice of the application for the same to be given to the opposite party :
Provided that, where it is proposed to grant an injunction without giving notice of the application to the opposite party, the Court shall record the reasons for its opinion that the object of granting the injunction would be defeated by delay, and require the applicant--
(a) To deliver to the opposite party, or to send to him by registered post, immediately after the order granting the injunction has been made, a copy of the application for injunction together with--
(i) a copy of the affidavit filed in support of the application;
(ii) a copy of the plaint; and
(iii)Copies of documents on which the applicant relies; and
(b) To file, on the day on which such injunction is granted or on the day immediately following that day, an affidavit stating that the copies aforesaid have been so delivered or sent."
20. Order XXXIX Rule 3A CPC states:
"3-A. Court to dispose of application for injunction within thirty days :-- Where an injunction has been granted without giving notice to the opposite party, the Court shall make an endeavour to finally dispose of the application within thirty days from the date on 10 which the injunction was granted; and where it is unable so to do, it shall record its reasons for such inability."
21. The Supreme Court of India had considered Order XXXIX Rule 3 CPC in Shiv Kumar Chadha Vs. Municipal Corporation of Delhi1 and observed:
"32. Power to grant injunction is an extraordinary power vested in the court to be exercised taking into consideration the facts and circumstances of a particular case. The courts have to be more cautious when the said power is being exercised without notice or hearing the party who is to be affected by the order so passed. That is why Rule 3 of Order 39 of the Code requires that in all cases the court shall, before grant of an injunction, direct notice of the application to be given to the opposite-party, except where it appears that object of granting injunction itself would be defeated by delay. By the Civil Procedure Code (Amendment) Act, 1976, a proviso has been added to the said rule saying that "where it is proposed to grant an injunction without giving notice of the application to the opposite-party, the court shall record the reasons for its opinion that the object of granting the injunction would be defeated by delay...".
33. It has come to our notice that in spite of the aforesaid statutory requirement, the courts have been passing orders of injunction before issuance of notices or hearing the parties against whom such orders are to operate without recording the reasons for passing such orders. It is said that if the reasons for grant of injunction are mentioned, a grievance can be made by the other side that court has prejudged the issues involved in the suit. According to us, this is a misconception about the nature and the scope of interim orders. It need not be pointed out that any opinion expressed in connection with an interlocutory application has no bearing and shall not affect any party, at the stage of the final adjudication. Apart from that now in view of the proviso to Rule 3 aforesaid, there is no scope for any argument. When the statute 1 (1993) 3 SCC 161 11 itself requires reasons to be recorded, the court cannot ignore that requirement by saying that if reasons are recorded, it may amount to expressing an opinion in favour of the plaintiff before hearing the defendant.
34. The imperative nature of the proviso has to be judged in the context of Rule 3 of Order 39 of the Code. Before the proviso aforesaid was introduced, Rule 3 said "the court shall in all cases, except where it appears that the object of granting the injunction would be defeated by the delay, before granting an injunction, direct notice of the application for the same to be given to the opposite-party". The proviso was introduced to provide a condition, where court proposes to grant an injunction without giving notice of the application to the opposite-party, being of the opinion that the object of granting injunction itself shall be defeated by delay. The condition so introduced is that the court "shall record the reasons" why an ex parte order of injunction was being passed in the facts and circumstances of a particular case. In this background, the requirement for recording the reasons for grant of ex parte injunction, cannot be held to be a mere formality. This requirement is consistent with the principle, that a party to a suit, who is being restrained from exercising a right which such party claims to exercise either under a statute or under the common law, must be informed why instead of following the requirement of Rule 3, the procedure prescribed under the proviso has been followed. The party which invokes the jurisdiction of the court for grant of an order of restraint against a party, without affording an opportunity to him of being heard, must satisfy the court about the gravity of the situation and court has to consider briefly these factors in the ex parte order. We are quite conscious of the fact that there are other statutes which contain similar provisions requiring the court or the authority concerned to record reasons before exercising power vested in them. In respect of some of such provisions it has been held that they are required to be complied with but non-compliance therewith will not vitiate the order so passed. But same cannot be said in respect of the proviso to Rule 3 of Order 39. The Parliament has prescribed a particular procedure for passing of an order of injunction without notice to the other side, under 12 exceptional circumstances. Such ex parte orders have far-reaching effect, as such a condition has been imposed that court must record reasons before passing such order. If it is held that the compliance with the proviso aforesaid is optional and not obligatory, then the introduction of the proviso by the Parliament shall be a futile exercise and that part of Rule 3 will be a surplusage for all practical purposes. Proviso to Rule 3 of Order 39 of the Code, attracts the principle, that if a statute requires a thing to be done in a particular manner, it should be done in that manner or not all. This principle was approved and accepted in well-known cases of Taylor v. Taylor [(1875 1 Ch. D. 426] and Nazir Ahmed v. Emperor [AIR 1936 PC 253]. This Court has also expressed the same view in respect of procedural requirement of the Bombay Tenancy and Agricultural Lands Act in the case of Ramchandra Keshav Adke v. Govind Joti Chavare [AIR 1975 SC 915].
35. As such whenever a court considers it necessary in the facts and circumstances of a particular case to pass an order of injunction without notice to other side, it must record the reasons for doing so and should take into consideration, while passing an order of injunction, all relevant factors, including as to how the object of granting injunction itself shall be defeated if an ex parte order is not passed......." (emphasis supplied)
22. This legal position is not disputed by the learned counsel for the respondent.
23. As regards Order XXXIX Rule 3A CPC, the same was considered by the Supreme Court in Quantum Securities (P) Limited Vs. New Delhi Television Limited2 and the Supreme Court observed that when an ex parte ad interim injunction is granted, the Court which is seized of the main case, should make endeavour to dispose of the Notice of Motion on merits in the light of the mandate contained in Order XXXIX 2 (2015) 10 SCC 602 13 Rule 3A CPC which provides that the Court shall make an endeavour to finally dispose of the Application within 30 days from the date on which the ex parte injunction was granted.
24. No doubt, because of the COVID-19 pandemic and the limited functioning of the Subordinate Courts pursuant to the decision of the High Court of Telangana, there might have been some difficulty for the Court below in the months of March, April and May, 2020 to decide the interim injunction Applications as per the mandate of Order XXXIX Rule 3A CPC.
25. However, it is shocking that the Court below did not bother to give any reasons for grant of ex parte ad interim injunctions to the respondent in spite of the statutory mandate contained in the proviso to Order XXXIX Rule 3 CPC.
26. Therefore, the impugned orders cannot be sustained.
27. Accordingly, the Appeals are allowed; the ex parte ad interim injunction orders granted on 12.03.2020 in I.A.Nos.401, 402 and 403 of 2020 in O.S.No.106 of 2020 by the XI Additional Chief Judge, City Civil Court, Hyderabad are set aside; the said I.A.s are remitted back to the Court below for fresh adjudication in accordance with law. The appellant is granted ten (10) days time from the date of receipt of the copy of this order to file counter-affidavits before the Court below; and the Court below is directed to hear both the appellant as well as the 14 respondent and decide the said Applications within thirty (30) days from the date of receipt of a copy of this order.
28. Pending miscellaneous petitions, if any, in these Appeals shall stand closed. No costs.
____________________________ M.S.RAMACHANDRA RAO, J _______________________ T.AMARNATH GOUD, J Date: 24-06-2020 Svv