Delhi High Court
Bimal Govindji Shah vs Panna Lal Chandu Lal on 24 April, 1997
Equivalent citations: 1997IIIAD(DELHI)771, 1997(2)ARBLR76(DELHI), 67(1997)DLT65
JUDGMENT M.K. Sharma, J.
(1) The plaintiff instituted the present suit praying for perpetual in junction against the defendant restraining passing off the trade mark of the plaintiff and also for damages and rendition of accounts. The plaintiff has been carrying on his business of manufacturing and marketing of hardware goods under the name and style of M/s. Acme Industries. It is stated that during the year 1979 the plaintiff bonafide and honestly adopted and conceived the trade mark Flora in relation to his aforesaid goods. The plaintiff states that the said mark is being used by him since then openly, continuously, exclusively and extensively. In the same year the plaintiff also honestly devised the label/wrapper/ carton entitled Flora in a attractive lettering style to which the plaintiff is the first adopter, originator and author. It is stated that on account of continuous, regular & extensive use of the said trade mark Flora in relation to hardware goods of the plaintiff the said trade mark has come to be associated with the name of the plaintiff. The plaintiff has also applied for the registration of the said trade mark Flora in the Trade Marks Registry under the provisions of the Trade and Merchandise Marks Act, 1958, which application is pending. The petitioner has also made large scale publicity in respect of the aforesaid trade mark Flora of the plaintiff in view of which the said trade mark has acquired secondary meaning coming to be exclusively identified and recognised with the plaintiff. It is stated that the plaintiff received a legal notice dated 10.6.1996 served upon him by the defendant through its Counsel, that the defendant is a registered proprietor and owner of the said trade mark Flora in respect of hardwares on account of its adoption by it during the year 1987. By the aforesaid notice the plaintiff was asked to stop its user. In view of the aforesaid legal notice received from the defendant and also in view of the fact that the registration of the aforesaid trade mark has been obtained by the defendant behind the back of the plaintiff and through suppression of facts and also in view of the fact that the defendant has dishonestly and mala fide pirated the trade mark/label/wrapper with trade mark Flora of the plaintiff the present suit has been instituted by the plaintiff.
(2) It has also been brought to the notice of this Court that the plaintiff has filed an application for rectification of the registration of the trade mark granted in favour of the defendant and the said application was filed on 21.6.1996 which is pending disposal. Alongwith the aforesaid suit the plaintiff also filed an application under Order 39 Rules 1 & 2, Civil Procedure Code which was registered as I.A.No. 6641/1996, seeking for temporary in junction restraining the defendants from using the aforesaid trade mark in relation to hardware goods during the pendency of the suit.
(3) Summons and notices of the suit as also of the in junction application having been issued, the defendant filed the written statement as also reply to the application under Order 39 Rules 1 & 2, CPC. The defendant also filed counter claim against the plaintiff in the present suit. Besides the defendant also filed an application under Order 39 Rules 1 & 2 of the Code of Civil Procedure praying for a temporary in junction restraining the plaintiff from manufacturing, selling, offering for sale, and/or directly or indirectly dealing with hardware goods under the trade mark Flora or any other trade mark identical with or deceptively similar to the trade mark Flora of the defendant. The said application was registered as I.A.No. 8765/ 1996. Reply to the said application has also been filed by the plaintiff.
(4) The defendant's case as disclosed from the written statement and reply as also from the application filed under Order 39 Rules 1 & 2, Civil Procedure Code is that the defendant has been continuously using the trade mark Flora since 29.10.1987 and that the defendant is the registered proprietor of the said mark being registered on 29.10.1987. The further defense of the defendant is that the invoices and documentary evidence filed by the plaintiff are false and fabricated. The defendant further pleaded that the present proceedings initiated by the plaintiff are liable to be dismissed on the ground of laches and unexplained delay.
(5) I have heard the learned Counsel appearing for the parties on the issue as to whether the plaintiff is entitled to grant of a temporary in junction as prayed for in the suit or whether the defendant is entitled to grant of such an in junction, it being the registered proprietor of the trade mark Flora in respect of the hardware goods against the plaintiff as prayed for in its application.
(6) The learned Counsel appearing for the parties advanced their arguments at length and I propose to dispose of both the applications (I.A.No. 6641/1996 filed by the plaintiff and I.A.No. 8765/1996 filed by the defendant) under Order 39 Rules 1 & 2, Civil Procedure Code respectively by this common order.
(7) For the purpose of adjudicating the issues posed before me it would be necessary to deal with the main questions which arise for my prima facie determination, (I)whether the plaintiff not being a registered proprietor of trade mark Flora in respect of hardware goods can maintain an action for passing off against the defendant in respect of the use of the same which has been registered in its favour in respect of the said goods; (ii) whether the present application filed by the plaintiff seeking for temporary in junction is liable to be dismissed on the ground of unexplained delay on the part of the plaintiff in approaching this Court, in view of the fact that the defendant was registered as proprietor of the trade mark Flora in respect of hardware goods in 1987, whereas the present suit was instituted only in 1996.
(8) Under Section 28(1) of the Trade and Merchandise Marks Act (hereinafter called the Act) registration of a trade mark gives to the registered proprietor thereof exclusive right to use the same in relation to the goods in respect of which it has been registered. Accordingly, in the present case in terms of the aforesaid provision the defendant being the registered proprietor of the trade mark Flora in respect of hardware goods could claim to have the exclusive right to use the same in relation to hardware goods in respect of which it is registered. But when the opening words of Section 28(1) are noticed which opens with the expression "subject to other provisions" it is crystal clear that the aforesaid right conferred on a registered proprietor is not an absolute right as the same is made subject to other provisions of the Act. The aforesaid view is fortified by the provisions of Section 27(2) of the Act which provides that "nothing in this Act shall be deemed to affect rights of action against any person for passing off goods as the goods of another person or the remedies in respect thereof". Accordingly, it is manifestly clear that Section 28 of the Act and other provisions come within the over-riding effect of Section 27(2) of the Act. Similarly, the provisions of Section 33 of the Act also saves vested right of a prior user when it lays down that "nothing in the Act shall entitle the proprietor or a registered user of a registered trade mark to interfere with or restrain the use by any person of a trade mark identical with or nearly resembling it in relation to goods in relation to which that person or a predecessor in title of his has continuously used that trade mark from a prior date". THUS a conjoint reading of the aforesaid provisions persuaded me to conclude on a reading of the aforesaid provisions conjointly the natural deduction is that the right conferred by Section 28(1) of the Act in favour of a registered proprietor of a trade mark is not an absolute right but is subject to the other provisions of the Act namely - Sections 27(2) and 33. It is also to be noted that neither Section 28 nor any other provision of the Act prohibits an action for passing off by an anterior user of a trade mark against a registered user of the same. In other words registration of a trade mark does not provide a defense to the proceedings for passing off as provided for under Section 27(2) of the Act. A prior user of a trade mark is entitled to maintain an action against a subsequent user of identical trade mark including registered user thereof.
(9) In N.R.Dongre v. Whirlpool Corporation; , a Division Bench of this Court held that registration of a trade mark under the Act would be irrelevant in an action for passing off. It was further held that the registration of a trade mark in fact does not confer any new right on the proprietor thereof than what already existed at common law without registration of the mark. In the aforesaid decision the Division Bench noticed and relied upon, on the Division Bench decision of this Court in Century Traders v. Roshan Lal Duggar & Co. . In the said decision of this Court (Century Traders) while construing Sections 27(2) and 106 of the Act it was held as follows ; "FROM a reading of the above sections it is clear that registration of mark in the trade mark registry would be irrelevant in an action for passing off. Thus, the law is pretty well settled that in order to succeed at this stage the appellant had to establish user of the aforesaid mark prior in point of time than the impugned user by the respondents. The registration of the said mark or similar mark prior in point of time to user by the appellant is irrelevant in an action for passing off and the mere presence of the mark in the register maintained by the Trade Mark Registry did not prove its user by the persons in whose names the mark was registered and was irrelevant for the purposes of deciding the application for interim in junction unless evidence had been led or was available of user of the registered trade marks. In our opinion, these clear rules of law were not kept in view by the learned Single Judge and led him to commit an error".
(10) It is also to be noted that the Special Leave Petition preferred as against the decision of the Division Bench in N.R. Dongre's case (supra) was heard by the Supreme Court and was dismissed by a speaking order upholding the decision of the Division Bench of this Court (See 1996 Ptc (16) 583 (SC); N.R. Dongre v. Whirlpool Corporation).
(11) In the decision of the Bombay High Court in Consolidated Foods Corporation v. Brandon & Co. Pvt. Ltd. , it was held that registration under the statute does not confer any new right to the mark claimed or any greater right than what already existed in common law and at equity without registration. It was further held that registration itself does not create a trade mark and that the trade mark exists independently of the registration which merely affords further protection under the Statute. The Bombay High Court further went on to hold that common law rights are left wholly unaffected and that priority in adoption and use of a trade mark is superior to priority in registration.
(12) Reference may also be made to a Single Bench decision of this Court in M/s. L.D. Malhotra Industries v. M/s. Ropi Industries; reported in Ilr 1976(1) Delhi page 278. The aforesaid decision in M/s. L.D. Malhotra's case (supra) was noticed in the decision of Division Bench of this Court in Century Traders' case (supra). In N.R. Dongre (supra) the Division Bench of this Court, after noticing the aforesaid judgments, held that under Section 27(2) an action for passing off against a registered user of trade mark is maintainable at the instance of a prior user of the same, similar or identical mark and since such a remedy is available against the registered user of trade mark, an interim in junction restraining him to use the mark can also be granted to make the remedy effective.
(13) In Imperial Group Limited v. Philip Morris & Co. Ltd., reported in Fleet Street Reports (1982) page 72, Lawton L.J. held that the use of the mark Merit was limited in size, time and area and that it was not accompanied, nor did the plaintiffs want it to be, by what they call "Press Support" and the advertising was small in amount and that compared with the ordinary way in which the plaintiffs marketed new brands of cigarettes, the effort they put into introducing the Merit brand was tiny, but not so tiny as to be de- minimis. The Court considered as to whether such use could be said to be bona fide and while considering that the Court considered the judgment in Electrolux Ltd. v. Electrix Ltd., (1954) 71 Rpc 23 and found that according to the said judgment in that case a bonafide use should be "ordinary and genuine", "perfectly genuine", "substantial in amount", "a real commercial use on a substantial scale" and not some "fictitious or colourable use but a real or genuine use". In the same judgment Lord Lawton L.J. observed that the plaintiffs never intended to use the mark "Merit" in the ordinary course of their business; their use of it was not substantial; it was not a real use in any commercial sense, and that it was a colourable stratagem for making their trade rivals think that they were using the mark "Merit" in a way which gave it the protection of the Act. In the same judgment Lord Shaw L.J. observed that unlike copyright, a trade mark does not arise from the mere use of the word or words or a formula or a mark; it derives from the use of words or marks in relation to a course of trade in goods giving rise to a goodwill connecting the trade with the goods by reason of the trade mark under which the goods are marketed. He concluded that where, in relation to particular goods, there is no such course of trading as to give rise to a goodwill, there is no interest to be protected by a trade mark, and no such mark can subsist in vacuo.
(14) At this stage I may also appropriately refer to another Single Bench Decision of this Court in Jai prakash Gupta v. Vishal Aluminium Mfg. Co., reported in 1996 Ptc (16) page 575=63 (1996) Dlt 947. In para 10 of the said judgment the learned Single Judge held that there is no dispute and can be none with the legal proposition that as between the two parties, who proposed to use a particular trade mark the person who designs the mark will get preference over the other and in case of one party proposing to use the mark against the actual user, the later will take precedence. The learned Single Judge further held that in between the two parties clarifying actual user as against the prior user, the party, who is prior in point of time will have the advantage over the other. The Bench held that even in regard to the prior registration of the trade mark as against the prior user the action of the later will prevail.
(15) The legal proposition that emerges from all the aforesaid decisions is that the registration is immaterial in a case of passing off and the criteria for granting an in junction is the prior user of the trade mark by the parties. In other words, "in an action for passing off, in order to succeed in getting an interim in junction the plaintiff has to establish user of the mark prior in point of time than the impugned user by the defendant and that the registration of the mark or similar mark prior in point of time to user of the plaintiff is irrelevant in an action of passing off and the mere presence of the mark in the register maintained by the Trade Mark Registry did not prove its user by the persons in whose names the mark was registered and it is irrelevant for the purposes of deciding the application for interim in junction unless evidence had been led or was available of user of the registered trade mark". (Jai Prakash Gupta's case (supra).
(16) In view of the aforesaid legal proposition emerging from the various decisions it is manifestly clear that the registration of the trade mark Flora obtained by the defendant in respect of hardware goods in 1987 would be of little consequence if the plaintiff could establish user of the said mark Flora in respect of the hardware goods prior in point of time than the impugned user by the defendant. It is admitted position as disclosed from the pleadings of the parties that the defendant has been using the trade mark Flora in respect of hardware goods only from the year 1987 whereas it is the specific case of the plaintiff that he has been using the said trade mark in respect of his hardware goods from the year 1979. In support of the aforesaid claim the plaintiff has also produced on record documentary evidence in the nature of carbon copies of bills and invoices. My attention has been drawn to some of the aforesaid bills and invoices filed by the plaintiff in support of his contention that it has been using the trade mark Flora in respect of hardware goods from 1979. The contention of the learned Counsel appearing for the defendant is that some of the carbon copies of the aforesaid bills and invoices are dubious and of doubtful character and that atleast some of them are fabricated for the purpose of the present case. The learned Counsel appearing for the defendant particularly drew my attention to Bill No. 048 dated 5.6.1980 in the name of Sr. Raghvendra Agencies, Bangalore and same Bill No. 048 dated 5.6.1980 in the name of M/s. V. Samaras am & Co., Bangalore, and submitted that both the bills bear the same order No. 048 and same date. He also drew my attention to document Nos. 47 & 48 in plaintiff's list of documents dated 28.10.1996. According to him the document No. 47 which is Bill No. 292 dated 21.10.1981 shows that the invoice is against Brass double ball catches while the transport receipt shows that Electrical brass parts have been sent against invoice No. 292. According to him same is the case with documents No. 99,101,173,174,175 and 176 of the list dated 8.10.1996. As against the aforesaid allegations in respect of particular bills and invoices, raised on behalf of the defendant the plaintiff has given explanations by filing an affidavit which is on record. In view of the explanation in respect of the said bills by the plaintiff the issue as to whether the said bills were fabricated or not is a matter to be decided after a full fledged trial.
(17) It is no doubt true that an arguable dispute has been raised by the defendant as regards some of the bills and invoices but at this stage, as was held in the decision Jai Prakash Gupta (supra) it would not be appropriate without further evidence to give any finding about the said dispute raised by the defendant as to whether the plaintiff is guilty of fabrication or not, which would be a matter to be considered and decided during the course of the hearing of the suit.
(18) However, on going through the records of the case I find that prima facie the plaintiff has been able to place atleast some documents on record namely the carbon copies of the bills and invoices from 1979 onwards to show that the plaintiff has been using the trade mark Flora in respect of hardware goods. As against such documents the defendant has failed to lead and/or produce any evidence to prove that it has been using the trade mark Flora in respect of hardware goods even from 1987 i.e. even after obtaining the registration. Thus the material placed on record prima facie proves and establishes the case of the plaintiff that the plaintiff is the prior user of the trade mark Flora with respect to hardware goods than the defendant and that its application seeking for registration is pending before the Competent Authority as also its application seeking for rectification of the trade mark FLORA.
(19) I have also given my thoughtful consideration to the other arguments advanced by the learned Counsel for the defendant that the present application filed by the plaintiff seeking for temporary in junction is liable to be dismissed in view of inordinate delay on the part of the plaintiff in approaching this Court. According to the learned Counsel the registration of the trade mark Flora in respect of hardware goods was granted by the Competent Authority to the defendant in the year 1987 whereas the present petition has been filed only in the year 1996. On consideration of the records of the case I find that apart from the fact that the plaintiff has given some explanation explaining the delay in approaching this Court, the defendant is also equally liable on the same count in view of the fact that although it was to the knowledge of the defendant that the plaintiff had been using the same trade mark in respect of the same material/ goods, it never approached this Court claiming relief against the plaintiff except for giving a legal notice to the plaintiff only in the year 1996 and did not even institute a suit in this Court except for raising a counter claim and filing an application under Order 39 Rules 1 & 2, Civil Procedure Code in the present suit. Therefore, for the delay, if any, in my considered opinion, both the plaintiff and the defendant are equally liable. However, in an act of passing off which is an act of deceit fresh cause of action accrues at every moment of time during which the breach is committed. In other words, in a matter of passing off by the defendant by selling their goods as if they are the goods of the plaintiff gives a continuous and recurring cause of action and therefore, fresh period of limitation begins to run at every moment of time during which such breach is committed. In M/s. Bengal Waterproof Limited v. M/s. Bombay Waterproof Manufacturing Company & Another, , the Supreme Court after noticing the provisions of Section 22 of the Limitation Act, 1963 held that as the act of passing off is an act of deceit and tort every time when such tortuous act or deceit is committed by the defendant the plaintiff gets a fresh cause of action to come to the Court by appropriate proceedings. IN the light of the aforesaid settled legal principle, in my considered opinion, the present application filed by the plaintiff seeking for temporary in Junction and for that matter even the suit cannot be dismissed on the ground of delay.
(20) Considering all the aforesaid factors, the in junction as prayed for in the application is granted in favour of the plaintiff and against the defendant restraining the defendant, their servants, agents, dealers and representatives from manufacturing, selling, offering for sale under the trade mark Flora in respect of hardware goods or any other trade mark identical with or deceptively similar to the trade mark Flora of the plaintiff till the disposal of the suit. Consequently, the application filed by the plaintiff (I.A. No. 6641 /1996) stands allowed to the extent indicated above and the application (I.A. No. 8765/96) filed by the defendant stands dismissed. However, in the interest of justice I deem it appropriate to put a condition on the aforesaid order of temporary in junction granted by me that the plaintiff shall maintain account of the sale and submit the same quarterly to this Court till the disposal of the suit. BEFORE parting with the records of the case, I may however observe that whatever, opinion and observations are made by me herein are my prima facie view for the purpose of deciding the in junction application and shall not in any manner be interpreted as the final opinion on the merits of the case.
LA.No. 6641/96 allowed/I.A, No. 8765/96 dismissed.