Allahabad High Court
Subhas Chand vs Mahesh Chandra Agrawal & Others on 31 May, 2017
Equivalent citations: AIR 2018 (NOC) 701 (ALL.), 2018 (1) ALJ 444
Author: Ashwani Kumar Mishra
Bench: Ashwani Kumar Mishra
HIGH COURT OF JUDICATURE AT ALLAHABAD AFR Court No. - 30 Case :- FIRST APPEAL No. - 502 of 2005 Appellant :- Subhas Chand Respondent :- Mahesh Chandra Agrawal & Others Counsel for Appellant :- Ranjit Saxena,S.K. Singh,Sanjay Goswami,Satish Dwivedi,Sudhindra Kumar Singh Counsel for Respondent :- A.K. Gupta,Imran Ulla,J.N. Singh,M.K. Shukla,M.L. Jain,Mithlesh Kumar Shukla,Rajesh Dwivedi,S.P. Giri,Satish Dwivedi Hon'ble Ashwani Kumar Mishra,J.
1. This appeal under Section 96 of the Code of Civil Procedure, 1908 is directed against judgment and decree dated 16.7.2001, passed by Additional District Judge, Court No. 8, Agra, in Original Suit No.8 of 1985 (Shri Subhash Chandra Prop. Vs. Shri Mahesh Chandra Agrawal), dismissing plaintiff's suit. Thus aggrieved, plaintiff-appellant is before this Court.
2. Plaintiff-appellant claims to be the proprietor of M/s Panchhi Petha Store, Bhagat Singh Gate, Noori Darwaja, Agra, and has filed Original Suit No.8 of 1985 with the averment that plaintiff carries on business of manufacturing and sale of their products under the name and style of 'Panchhi Petha Store'. Plaintiff manufactures Petha, Dalmoth, Namkin etc. of standard quality for the last 50 years at its given address, and has also a branch situated at Hari Parbat, Agra. Plaintiff has set out his pedigree to show that Panchi Lal was his father and 'Panchhi Petha Store' was started by him. This business was later on converted into a partnership, wherein partners were added or retired, from time to time. These partners were plaintiff's father, his brother and nephew etc. It is claimed that in 1981 all partners except plaintiff retired from the firm running in the name of 'Panchhi Petha Store' and ever since 1981, plaintiff is carrying on business as its sole proprietor. By way of amendment, it was added that in April, 1987 he took his father and nephew for some time as partner but they too retired in January, 1989, and ever since then plaintiff is running the business as the sole proprietor of 'Panchhi Petha Store'. It is also claimed that in 1971, trademark 'Panchhi Petha Store' was got registered by partnership firm consisting of plaintiff, his brother and father. The firm continued as M/S Panchhi Petha Store, and its goodwill was held by the partnership, while firm remained a partnership, and later rendering it an asset of plaintiff as its proprietor. Plaintiff, therefore, asserts that the trademark of the firm is owned by him. Its trademark registration number is given as 273943, and design of the trade name is also registered under the Copyright Act being Registration No.35048/81, and labels and containers/boxes of dalmoth, namkin, petha etc. bear marks i.e. A-6822/71 and A-20428/78, respectively.
3. According to plaintiff the defendant No. 1 recently started carrying business of making similar products in the name of 'New Panchhi Petha Store' and has started using labels and boxes, which are deceptively similar to the labels and boxes of plaintiff. While plaintiff uses red and blue as principal colours, as is apparent from the labels and boxes filed, upon which appears figure of a lady carrying a handbag, the defendant copied the label and added word 'New' before 'Panchhi' with same colours, but instead of lady carrying a handbag in its label, the lady carries 'umbrella and dish'. According to plaintiff, the labels and boxes are deceptively similar and got up with a view to deceive the purchaser of plaintiff's goods, which are sold through out the country. Infringement of copyright and trademark is thus alleged.
4. Plaintiff states that its firm is well known for its quality, and its products are in demand through out the country for its standard quality, and has a unique and distinct reputation in the market. Its trademark has otherwise been widely advertised. Defendant nos.2 to 9 are carrying on business in Agra of selling Namkin and Sweets of a kind similar to that of plaintiff with an intent to illegally gain from plaintiff's 'goodwill'. Defendants are using polythene bags and boxes similar to that of plaintiff and are selling the goods misrepresenting as products of the plaintiff. Defendants, therefore, are accused of infringing plaintiff's trademark and of passing on their sub-standard goods for the goods of the plaintiff. Plaintiff has explained in detail, by way of amendment, the manner in which it is carrying on its business and also the manner in which the defendants are violating law.
5. Accordingly, prayer was made in the suit to restrain the defendants by way of decree of permanent injunction from using the trade name 'Panchhi Petha Store' or 'Panchhi' in their business, whatsoever, and from printing the infringed copy of labels, polythene bags and boxes deceptively similar to that of plaintiff. A further prayer is made to direct the defendant to render correct account of all sales made, and profits gained by them, and for recovery of infringing work found in the premise of defendants and order their destruction, apart from usual reliefs.
6. Defendant No.1 has contested the suit by filing written statement, in which it is alleged that the plaintiff concern is only four and a half years old, and that there are no special contents in the product sold by it. Existence of trademark as 'Panchhi Petha Store' is denied. Further averments made in the plaint have also been disputed in para 22 of the written statement. It is averred that defendant has been carrying on business of manufacturing and sale of dalmoth, petha, namkin for the last about four years in the name and style of M/s New Panchhi Petha Store, and that plaintiff has no exclusive right to use the word 'Panchhi'. An additional written statement is also filed doubting averment with regard to change of plaintiff's firm from partnership to proprietor on account of vagueness of allegations. Plaintiff's averment that his father Panchhi Lal started manufacturing of Panchhi Petha, is also denied. Allegations of violation of copyright and trademark have been denied.
7. Court below on the basis of respective pleadings of the parties framed following issues:-
"1. Whether the expression "Panchhi Petha Store" is a registered trademark of the plaintiff's firm, as mentioned in the plaint? If so, its effect?
2. Whether the defendants have infringed the trademark of the plaintiff's firm?
3. Whether the defendants have passed on their items presenting them to be of the plaintiff, as mentioned in para 10 of the plaint?
4. Whether the court has no justification to hear the suit?
5. Whether the suit is barred by the Section 69 of the Indian Partnership Act, as mentioned in para 21 of the written statement?
6. What relief, if there be any, the plaintiff is entitled to get?
7. Whether the design of the plaintiff's trademark is registered under the Copyright, Designs and Patents Act ? If so, whether the defendant has infringed it?"
8. Oral and documentary evidence have been led by the parties. On issue no.1, the court below has returned a finding on the basis of registration of trademark i.e. paper no. 99-ka, dated 22.7.1973, that 'Panchhi Petha Store' belongs to plaintiff's firm. In the registration certificate 'Panchhi Petha Store', Bhagat Singh Gate, Agra, Uttar Pradesh is recorded in plaintiff's name alongwith his father Panchhi Lal and brother. Admittedly none of the defendants claim to have trademark registered as 'Panchhi Petha Store' nor are they claiming any right over the registered trademark through any of the other two persons, who are recorded alongwith the plaintiff in the registration certificate. A further finding has been returned that for any violation of such trademark, plaintiff would be entitled to appropriate relief from the Court.
9. Issue no. 2 and 3 were framed on the aspect as to whether defendants have violated plaintiff's trademark, and have passed off their goods as that of plaintiff, as is alleged in para 10 of the plaint. Court below examined labels used by defendant and the plaintiff, and returned a finding that both are not similar and contain differences. It was found that address of defendant is clearly mentioned and although similarity in labels and boxes exist, but certain distinctions were also noticed. In place of 'Panchhi Petha Store', defendant's label depicts the name of 'New Panchhi Petha Store' with a different address and two words are missing. There is also a slight change in colours.
10. On the basis of evidence adduced, the court below has returned a finding that plaintiff has not established its case of passing off, and that labels and boxes used by the defendants are deceptively similar. Distinction in the photo of lady in two labels have been noticed. On the basis of such findings, trial court has returned a finding that plea of violation of trademark and passing off is not established. On issue no.7 relating to violation of copyright also, a finding is returned that labels and marks are different, inasmuch as the photo of lady in both the marks are distinct. On issue no.5, regarding plaintiff's suit being barred by Section 69, court below has found that details of constitution of partnership firm from time to time are not specified, and that suit itself is barred under Section 69 of the Partnership Act. Alongwith supplementary affidavit, plaintiff has brought on record renewal of its registration of its trade mark in the year 2016, for a period of 10 years.
11. Learned counsel for the appellant contends with reference to evidence and materials brought on record that allegation of violation of trademark and passing off were clearly established, and findings of court below on issue nos. 2, 3, and 7 are contrary to evidence available on record and perverse. It is also contended that finding on issue no. 5 to the effect that suit is barred under Section 69 of the Act too, is based upon misconstruction of the applicable legal provisions, and is unsustainable in law.
12. It is contended that in view of the averments brought on record plaintiff was entitled to the relief prayed for. Reliance is placed upon decisions reported in 1994 (2) SCC-448 (M/s Power Control Appliances & Others Vs. Sumeep Machines Pvt. Ltd.), 2006 (8) SCC-726 (Ramdev Food Products Pvt. Lts. Vs. Arvind Bhai Rambhai Patel & Ors.), 2001 (5) SCC-73 (Candila Care Ltd. Vs. Candila Pharmaceuticals Ltd.), 2011 (4) SCC-85 (T.V. Venugopal Vs. Ushodaya Enterprises limited and Anr.), 2004 (6) SCC-145 (Satyam Infoway Ltd. Vs. Sifynet Solutions (P) Ltd.), 2002 (2) SCC-147 (Mahendra & Mahendra Paper Mills Ltd. Vs. Mahindra & Mahindra Ltd.), 2000 (3) SCC-250 (Haldiram Bhujiyawala and Another Vs. Anand Kumar Deepak Kumar and Others), JT 2004 (5) SC-47 (Milment Of the Industries and Ors. Vs. Allergan Inc.), and 2010 (43) PTC-103 (All) (Badli Ram Sharma Proprietor A.B.S. Bidi Company Vs. Manglore Ganesh Bidi Works).
13. Learned counsel for the respondents, on the other hand, contend that judgment of the court below is perfectly valid and legal, and that findings returned on various issues against the plaintiff are clearly borne out from the materials brought on record, and thus requires no interference.
14. I have heard Sri Ranjit Saxena for the appellant and Sri Satish Dwivedi for the defendants respondents, and have perused the materials brought on record.
15. Following points arise for determination in the present appeal:-
(i) Whether plaintiff has been able to establish infringement of its trademark as well as passing off goods by the defendants, misrepresenting them to be of plaintiff ?
(ii) Whether the design of plaintiff's trademark as also the labels, boxes/containers registered under The Copyright, Designs and Patents Act, 1988 is infringed by the defendants ?
(iii) Whether plaintiff's suit is barred under Section 69 of The Indian Partnership Act, for the reasons set out in para-21 of the written statement ?
16. Issue with regard to maintainability of suit, in view of Section 69 of the Indian Partnership Act, 1932 is taken up first. Section 69 of the Act reads as under:-
"69. Effect of non-registration.--(1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.
(2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm."
17. Plaintiff seeks injunction to enforce its statutory right to protect its trademark and copyright as also enforce common law right. It is settled that a passing off action is a common law action based upon tort vide Bengal Waterproof Ltd. Vs. Bombay Waterproof Manufacturing Company, reported in 1997 (1) SCC 99, and Haldiram Bhujiawala and another Vs. Anand Kumar Deepak Kumar and another, reported in 2000 (3) SCC 250. Section 69 of the Partnership Act essentially prohibits filing of suit to enforce a right arising from a contract or conferred by the Partnership Act in a firm, by it or its partner, unless the firm is registered. Sub-section 2 of Section 69 of the Act clarifies the position providing that no suit to enforce a right arising from a contract shall be instituted by or on behalf of a firm, unless it is registered. Before Section 69 could be pressed into service, it would have to be seen as to whether the right claimed in the suit arises out of a contract or a right conferred by the Partnership Act. If the right sought to be enforced is a statutory right or a common law right, the provisions itself would not be attracted. Paras-11 and 12 of the Apex Court's judgment in Haldiram Bhujiawala (supra) is relevant for the present purposes, and is thus reproduced:-
"11. Likewise, if the reliefs of permanent injunction or damages are being claimed on the basis of a registered trade mark and its infringement, the suit is to be treated as one based on a statutory right under the Trade Marks Act and is, in our view, not barred by Section 69(2).
12. For the aforesaid reasons. In both these situations, the unregistered partnership in the case before us cannot be said to be enforcing any right "arising from a contract". Point 1 is therefore decided in favour of the plaintiffs-respondents."
18. The ambit and scope of provision was dealt with in greater depth, after referring to reports of various committees in Haldiram Bhujiawala (supra). Paras 21 to 23 of the judgment of Apex Court in Haldiram Bhujiawala (supra) are also reproduced:-
"21. The above Report and provisions of the English Acts, in our view, make it clear that the purpose behind Section 69(2) was to impose a disability on the unregistered firm or its partners to enforce rights arising out of contracts entered into by the plaintiff firm with third party - defendant in the course of the firm's business transactions.
22. In Raptokas Brett and Co., [1998] 7 SCC 184 it was clarified that the contractual rights which are sought to be enforced by plaintiff firm and which are barred under section 69(2) are "rights arising out of the contract" and that it must be a contract entered into by the firm with the third party defendants. Majmudar, J. stated (at p.191) as follows :
"A mere look at the aforesaid provision shows that the suit filed by an unregistered firm against a third party for enforcement of any right arising from a contract with such a third party would be barred........"
(emphasis supplied) From the above passage it is firstly clear that contract must be a contract by the plaintiff firm not with anybody else but with the third party defendant.
23. The further and additional but equally important aspect which has to be made clear is that - the contract by the unregistered firm referred to in section 69(2) must not only be one entered into by the firm with the third party - defendant but must also be one entered into by the plaintiff firm in the course of the business dealing of the plaintiffs firm with such third party - defendant. "
19. In view of such authoritative pronouncement of law, based upon provisions of the relevant statute, the view taken by the court below that suit itself was barred under Section 69 cannot be sustained. A suit for injunction based on a statutory right under the Trade Marks Act, 1999 and for a passing off claim would not be barred under Section 69 of the Act. The third question framed for determination is answered accordingly.
20. I now turn to the next point framed for determination in this appeal. On Issue nos.2 and 3, the court below has held that plaintiff has not been able to establish its case of infringement of its trademark by the defendants or that they have passed on their goods presenting it to be of the plaintiff. On Issue no.1, court below has given a finding that expression 'Panchhi Petha Store' is the registered trademark of the plaintiff's firm. Plaintiff has appeared as PW-1 in support of its claim. He has stated that its products are being sold throughout the country due to its standard quality and reputation and that it is paying huge taxes, but despite registration of its trademark as well as copyright of the design of boxes etc., the defendants are brazenly violating it. The original trademark registration has been filed as Paper no.99-A, whereas copyright registered label is Paper no.100 (Ka), which has been renewed from time to time and have been proved by the plaintiff. It is categorically averred that the defendants are misrepresenting them as 'Panchhi Petha Store' and are passing on their inferior quality goods by using deceptively similar designs and labels. The defendants have also clearly admitted that they are selling similar products under the trademark 'New Panchhi Petha Store'. Except for the work 'New', the description of trade name is same. Although the defendants have given their different address, but that may not be significant, inasmuch as the consumer may not be aware of the address of the maker and would only be concerned with trade name under which goods are being sold. This is so as products are being sold allegedly throughout the country and address of plaintiff and defendant both are of Agra. Defendant no.1 has also appeared in the witness box as DW-1, and admitted that he is engaged in the business of selling Petha, Dalmoth, Namkin etc. He further admits that there are no standard fixed to maintain quality of such products and it is left to the taste and preference of the purchaser. Defendant, however, has denied that he has misrepresented and passed off its products as that of the plaintiff. He further states that he used to sell its product in boxes, which were similar to that of the plaintiff, but that they are not doing so now. He further states that he maintains no account book and also does not pay any tax. He, however, admits that the name of his shop from which he sells Petha, Dalmoth and Namkin is 'New Panchhi Petha Store'. An Advocate Commissioner was also appointed, who has submitted his report, according to which notices were served upon all 09 defendants and 03 boxes and labels were collected from the defendants' shop in which product i.e. Petha, Dalmoth, Namkin were being sold to the end consumer with 'Panchhi' clearly mentioned upon the boxes with additions such as 'New', 'Famous', 'Best' etc. Evidence has also been brought on record clearly indicating that defendants were selling Petha, Dalmoth and Namkin through the shops situated at different places at Agra, using the trade name 'Panchhi Petha Store' by adding prefix 'New', 'Famous', 'Best' etc. Defendant no.1 has also clearly mentioned such facts in his oral testimony. Plaintiff has also categorically stated that goods sold by the defendants are of inferior quality and the customers often complain of poor quality of product sold under the trade name 'Panchhi' by the defendants. Trial court, however, has decided the Issue nos.2 and 3 against the plaintiff. Trial court has examined trademark and copyrights of plaintiff and the defendants. A finding, however, has been given that the defendants are not selling goods under identical trademarks, inasmuch as there is a difference in name inasmuch as prefix 'New', 'Famous', 'Best' etc. are used in front of the word 'Panchhi'. It is also held that address of plaintiff's place of business is separate and distinct. So far as labels are concerned, the trial court has held that though existence of a lady on cover is common but there are differences in their photos. Change of colour in the labels at some places was also noticed. With such findings, the trial court has held that there is sufficient distinction in the marks used by defendants in selling their Petha, Dalmoth and Namkin and that plaintiff has not been able to prove that defendants are passing off their goods representing them as that of plaintiff.
21. Registration of plaintiff's mark 'Panchhi Petha Store' under the Trade and Merchandise Marks Act, 1958 is not in question. Sections 28, 29 and 31 of the Act of 1958 are relevant and are thus reproduced:-
"28. Rights conferred by registration.
(1) Subject to the other provisions of this Act, the registration of a trade mark in Part A or Part B of the register shall, if valid, give to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in relation to the goods in respect of which the trade mark is registered and to obtain relief in respect of infringement of the trade in the manner provided by this Act.
(2) The exclusive right to the use of a trade mark given under sub- section (1) shall be subject to any conditions and limitations to which the registration is subject.
(3) Where two or more persons are registered proprietors of trade marks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration of the trade marks but each of those persons has otherwise the same rights as against any other those persons merely by registration of the trade marks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of permitted use) as he would have if he were the sole registered proprietor.
29. Infringement of trade marks.
(1) A registered trade mark is infringed by a person who, not being the registered proprietor of the trade mark or a registered user thereof using by way of permitted use, uses in the course of trade a mark which is identical with, or deceptively similar to, the trade mark, in relation to any goods in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being use as a trade mark.
(2) In an action for infringement of a trade mark registered in Part B of the register an injunction or other relief shall not be granted to the plaintiff if the defendant establishes to the satisfaction of the court that the use of the mark of which the plaintiff complains is not likely to deceive or cause confusion or to be taken as indicating a connection in the course of trade between the goods in respect of which the trade mark is registered and some person having the right, either as registered proprietor or as registered user, to use the trade mark.
31. Registration to be prima facie evidence of validity.
(1) In all legal proceedings relating to a trade mark registered under this Act (including applications under section 56), the original registration of the trade mark and of all subsequent assignments and transmissions of the trade mark shall be prima facie evidence of the validity thereof.
(2) In all legal proceedings as aforesaid a trade mark registered in Part A of the register shall not be held to be invalid on the ground that it was not a registrable trade mark under section 9 except upon evidence of distinctiveness and that such evidence was not submitted to the Registrar before registration, if it is proved that the trade mark had been so used by the registered proprietor or his predecessor in title as to have become distinctive at the date of registration."
Section 2(1)(d) of the Act of 1958 defines "deceptively similar" in following words:-
"2(1)(d) "deceptively similar":-- A mark shall be deemed to be deceptively similar to another mark if it so nearly resembles that other mark as to be likely to deceive or cause confusion;"
Section 2(1)(j) defines "mark" in following words:-
"2(1)(j) "mark" includes a device, brand, heading, label, ticket, name, signature, word, letter or numeral or any combination thereof;"
22. Certificate of registration of trademark No.273943, dated 27.2.1973, of Panchhi Petha Store, Bhagat Singh Gate, Agra, U.P., in respect of Dalmoth and Petha being food products is undisputed. Plaintiff Subhash Chand is one of the three persons owning the mark in addition to his father and brother. None of the defendants have claimed any right over the registered trademark in them nor have claimed any right through plaintiff or the other two persons to hold registration i.e. plaintiff's father or brother. Court below has also returned a finding on this aspect in favour of the plaintiff. Evidence on record goes to show that defendant no.1 is selling same products in the name of 'New Panchhi Petha Store'. So far as address of plaintiff's place of business mentioned in the registered trademark is concerned, it is merely with an intent to identify the registered trademark holder. However, when a product is purchased by a common man, he/she is not expected to know the exact address of the seller or identify the seller exclusively with reference to its address. This would be particularly so as the plaintiff's product is being marketed throughout the country. Court below was swayed by the fact that defendants have given different address, and therefore, the purchasers can identify the seller and it would not constitute violation of trademark. This view cannot be accepted, inasmuch as mentioning of place of business of plaintiff and defendants separately would not be a safe-guide to hold that a purchaser would be able to clearly identify the seller. Such view, in my opinion, would not be sustainable, especially as plaintiff's product is being marketed in areas beyond Agra and the customers may not exactly remember the address so as to identify it. So far as use of mark 'Panchhi Petha Store' by defendant is also admitted on record. The only distinction is use of prefix 'New' before 'Panchhi Petha Store'. This appears to be a case of use of deceptively similar trademark by defendant. Plaintiff has clearly proved that 'Panchhi' is the name of his father, and that business in the name of 'Panchhi Petha Store' was started by him nearly 50 years ago and currently plaintiff is the person owning the trademark. The defendant has not shown any right over the use of tradename 'Panchhi' in any manner. The defendant is neither related to 'Panchhi' nor there is any other basis for the defendant to contend that it could legally use trade name 'Panchhi', as part of its trademark. Court below, therefore, was not justified in returning finding against the plaintiff on Issue Nos.2 and 3 framed before it. On the basis of evidence adduced by the plaintiff of his being the trademark holder and particularly the clear admission by defendant of use of trade name 'Panchhi' by it, allegation of violation of plaintiff's registered trademark 'Panchhi Petha Store' is made out. Section 31 of the Act clearly provides that in all legal proceedings relating to trademark registered under the Act, the original registration of the trade mark shall be prima facie evidence of its validity. Section 29 which deals with infringement of trade marks clearly provides that a registered trade mark is infringed by a person who, not being the registered proprietor of the trade mark or a registered user thereof, uses in the course of trade a mark which is deceptively similar to the registered trade mark, in relation to any goods in respect of which the trade mark is registered. The product here is Dalmoth (Namkin) and Petha. The trade name 'New Panchhi Petha Store' is deceptively similar to 'Panchhi Petha Store'. Similarly use of trade name 'Best Panchhi Petha Store', Famous Panchhi Petha Store' are all derivatives used from the trademark 'Panchhi Petha Store'. In absence of any right on part of defendants to claim use of trade name 'Panchhi Petha Store' or 'Panchhi', I am of the considered opinion that defendants have no right to use such tradename, without any legal title. The use of trade name by defendants is admitted. The report of Advocate Commissioner Sri Surendra Pal Singh clearly supports the plaintiff's case of use of its trade mark by defendant. Law clearly recognizes existence of one mark, one source and one proprietor. In M/s Power Control Appliances and Others Vs. Sumeet Machines Pvt. Ltd., reported in 1994 (2) SCC 448. following observations are made in para-41, which is of relevance in the instant context:-
"41. It is a settled principle of law relating to trade mark that there can be only one mark, one source and one proprietor. It cannot have two origins. Where, therefore, the first defendant-respondent has proclaimed himself as a rival of the plaintiffs and as joint owner it is impermissible in law. Even then. the joint proprietors must use the trade mark jointly for the benefit of all. It cannot be used in rivalry and in competition with each other."
23. In Ramdev Food Products (P) Ltd. Vs. Arvindbhai Rambhai Patel and others, reported in 2006 (8) SCC 726, the scope of provision of Sections 28 and 29 of the Act of 1958 fell for consideration before the Apex Court. After noticing the statutory scheme, Apex Court clearly held in para-52 that use of the trade mark is the property of manufacturer. While sustaining grant of injunction, Their Lordships observed as under in paras 52 and 54 of the judgment:-
"52. A trade mark is the property of the manufacturer. The purpose of a trade mark is to establish a connection between the goods and the source thereof which would suggest the quality of goods. If the trade mark is registered, indisputably the user thereof by a person who is not otherwise authorised to do so would constitute infringement. Section 21 of the 1958 Act provides that where an application for registration is filed, the same can be opposed. Ordinarily under the law and, as noticed hereinbefore, there can only be one mark, one source or one proprietor. Ordinarily again right to user of a trade mark cannot have two origins. The first respondent herein is a rival trader of the appellant-Company. It did not in law have any right to use the said trade mark, save and except by reason of the terms contained in the MOU or continuous user. It is well-settled that when defences in regard to right of user are set up, the onus would be on the person who has taken the said plea. It is equally well-settled that a person cannot use a mark which would be deceptively similar to that of the registered trade mark. Registration of trade marks is envisaged to remove any confusion in the minds of the consumers. If, thus, goods are sold which are produced from two sources, the same may lead to confusion in the mind of the consumers. In a given situation, it may also amount to fraud on the public. A proprietor of a registered trade mark indisputably has a statutory right thereto. In the event of such use by any person other than the person in whose name the trade mark is registered, he will have a statutory remedy in terms of Section 21 of the 1958 Act. Ordinarily, therefore, two people are not entitled to the same trade mark, unless there exists an express licence in that behalf.
54. In Sumat Prasad Jain v. Sheojanam Prasad (Dead) and Others and State of Bihar [(1973) 1 SCC 56], this Court held:
"Thus, the distinction between a trade mark and a property mark is that whereas the former denotes the manufacture or quality of the goods to which it is attached, the latter denotes the ownership in them. In other words, a trade mark concerns the goods themselves, while a property mark concerns the proprietor. A property mark attached to the movable property of a person remains even if part of such property goes out of his hands and ceases to be his.""
24. The principles on which an action of violation of trade mark and passing off has to be judged is summarized in Cadila Health Care Ltd. Vs. Cadila Pharmaceuticals Ltd., reported in 2001 (5) SCC 73, in para-35, which reads as under:-
"35. Broadly stated in an action for passing off on the basis of unregistered trade mark generally for deciding the question of deceptive similarity the following factors to be considered:
(a) The nature of the marks i.e. whether the marks are word marks or label marks or composite marks, i.e. both words and label works.
(b) The degree of resembleness between the marks, phonetically similar and hence similar in idea.
(c) The nature of the goods in respect of which they are used as trade marks.
(d) The similarity in the nature, character and performance of the goods of the rival traders.
(e) The class of purchasers who are likely to buy the goods bearing the marks they require, on their education and intelligence and a degree of care they are likely to exercise in purchasing and/or using the goods.
(f) The mode of purchasing the goods or placing orders for the goods.
(g) Any other surrounding circumstances which may be relevant in the extent of dissimilarity between the competing marks."
25. In T.V. Venugopal Vs.Ushodaya Enterprises Ltd. and another, reported in 2001 (4) SCC 85, a similar cause was considered by the Apex Court in the context of use of mark ''Eenadu'. Following observations have been made in paras-90 to 92 of the judgment:-
"90. The respondent company's mark `Eenadu' has acquired extra-ordinary reputation and goodwill in the State of Andhra Pradesh. `Eenadu' newspaper and TV are extremely well known and almost household words in the State of Andhra Pradesh. The word `Eenadu' may be a descriptive word but has acquired a secondary or subsidiary meaning and is fully identified with the products and services provided by the respondent company.
91. The appellant is a Karnataka based company which has started manufacturing its product in Bangalore in the name of `Ashika' and started selling its product in the State of Andhra Pradesh in 1995. The appellant started using the name `Eenadu' for its Agarbathi and used the same artistic script, font and method of writing the name which obviously cannot be a co-incidence. The appellant company after adoption of name `Eenadu' accounted for 90% of sale of their product Agarbathi.
92. On consideration of the totality of facts and circumstances of the case, we clearly arrive at the following findings and conclusions:
(a) The respondent company's mark `Eenadu' has acquired extraordinary reputation and goodwill in the State of Andhra Pradesh. The respondent company's products and services are correlated, identified and associated with the word `Eenadu' in the entire State of Andhra Pradesh. `Eenadu' means literally the products or services provided by the respondent company in the State of Andhra Pradesh. In this background the appellant cannot be referred or termed as an honest concurrent user of the mark `Eenadu';
(b) The adoption of the words `Eenadu' is ex facie fraudulent and mala fide from the very inception. By adopting the mark `Eenadu' in the State of Andhra Pradesh, the appellant clearly wanted to ride on the reputation and goodwill of the respondent company;
(c) Permitting the appellant to carry on his business would in fact be putting a seal of approval of the court on the dishonest, illegal and clandestine conduct of the appellant;
(d) Permitting the appellant to sell his product with the mark `Eenadu' in the State of Andhra Pradesh would definitely create confusion in the minds of the consumers because the appellant is selling Agarbathies marked `Eenadu' as to be designed or calculated to lead purchasers to believe that its product Agarbathies are in fact the products of the respondent company. In other words, the appellant wants to ride on the reputation and goodwill of the respondent company. In such a situation, it is the bounden duty and obligation of the court not only to protect the goodwill and reputation of the respondent company but also to protect the interest of the consumers;
(e) Permitting the appellant to sell its product in the State of Andhra Pradesh would amount to encouraging the appellant to practise fraud on the consumers;
(f) Permitting the appellant to carry on his business in the name of `Eenadu' in the State of Andhra Pradesh would lead to eroding extraordinary reputation and goodwill acquired by the respondent company over a passage of time;
(g) Appellant's deliberate misrepresentation has the potentiality of creating serious confusion and deception for the public at large and the consumers have to be saved from such fraudulent and deceitful conduct of the appellant;
(h) Permitting the appellant to sell his product with the mark `Eenadu' would be encroaching on the reputation and goodwill of the respondent company and this would constitute invasion of proprietary rights vested with the respondent company;
(i) Honesty and fair play ought to be the basis of the policies in the world of trade and business."
26. In Satyam Infoway Ltd. Vs. Sifynet Solutions (P) Ltd., reported in 2004 (6) SCC 145, an issue arose with regard to use of word 'Sify' or 'Siffy' as a provider of Internet services. Observations made in paras 31 and 32 may conveniently be relied upon:-
"31. What is also important is that the respondent admittedly adopted the mark after the appellant. The appellant is the prior user and has the right to debar the respondent from eating into the goodwill it may have built up in connection with the name.
32. Another facet of passing off is the likelihood of confusion with possible injury to the public and consequential loss to the appellant. The similarity in the name may lead an unwary user of the internet of average intelligence and imperfect recollection to assume a business connection between the two. Such user may, while trying to access the information or services provided by the appellant, put in that extra 'f' and be disappointed with the result. Documents have been filed by the respondent directed at establishing that the appellant name Sify was similar to other domain names such as Scifinet, Scifi.com etc. The exercise has been undertaken by the respondent presumably to show that the word 'Sify' is not an original word and that several marks which were phonetically similar to the appellants' trade name are already registered. We are not prepared to deny the appellant's claim merely on the aforesaid basis. For one, none of the alleged previous registrants are before us. For another, the word 'sci- fi is an abbreviation of 'science fiction' and is phonetically dissimilar to the word Sify. (See Collins Dictionary of the English Language)."
27. In Mahendra & Mahendra Paper Mills Ltd. Vs. Mahindra & Mahindra Ltd., reported in 2002 (2) SCC 147, Their Lordships of the Supreme Court clearly observed that for determining the question relating to grant of injunction in a suit for passing off it is the likelihood of deception or confusion arising which is relevant, and it is for the Court to examine it with reference to material available on record.
28. In the facts of the present case, the court below instead of examining the issue of deception that may follow due to use of deceptively similar tradename has instead been swayed by the fact that sufficient evidence was not led to prove it. This view is clearly unsustainable in view of the discussions held above. In Corn Products Refining Co. Vs. Shangrila Food Products Ltd, reported in AIR 1960 SC 142, the principle in that regard has been clearly culled out by the Apex Court in following words:-
"The question whether two companies marks are so similar as to be likely to deceive or cause confusion is one of first impression and it is for the court to decide it. The question has to be approached from the point of view of a man of average intelligence and imperfect recollection. To such a man the overall structural and phonetic similarity of the two marks Gluvita and Glucovita is likely to deceive or to cause confusion. In deciding whether two marks are so similar as to be likely to deceive or cause confusion the similarity of idea is a relevant consideration"
29. The aforesaid view has been followed in Mahendra & Mahendra Paper Mills Ltd. (supra). In para-16 of the judgment, the Court has been pleased to observe as under:-
"16. This question has been considered by different High Courts and this court in umpteen cases from time to time. On analysis of the principles laid down in the decisions, certain recognised parameters relating to the matter have emerged. Without intending to be exhaustive some of the principles which are accepted as well settled may be stated, thus, that whether there is a likelihood of deception or confusion arising is a matter for decision by the court, and no witness is entitled to say whether the mark is likely to deceive or to cause confusion; that all factors which are likely to create or allay deception or confusion must be considered in combination; that broadly speaking, factors creating confusion would be, for example, the nature of the market itself, the class of customers, the extent of the reputation, the trade channels, the existence of any connection in course of trade, and others."
30. In view of the principles laid down by the Apex Court as well as evidence adduced on record, this Court has no hesitation in holding that violation of plaintiff appellant's registered trade mark by the defendants was clearly established. Plaintiff appellant is the prior user and its trademark is registered. The defendants had started its business only about 2 years prior to filing of suit. Claim of civil wrong was brought before the civil court, after efforts to persuade defendants to desist from violating law failed. Plea of acquiescence was also not established in view of the evidence led, inasmuch as the defendants started violating plaintiff's trademark only in 1983 and an objection to it within the period of limitation had been made whereafter suit was filed in 1985. In such circumstances, the finding of court below on Issue nos.2 and 3 cannot be sustained. The first point for determination framed in this appeal is, therefore, answered by holding that plaintiff appellant has established violation of its trademark and passing off goods by defendants and is thus entitled to the injunction prayed for in the suit. Defendants, consequently, are restraint from using plaintiff's registered trademark 'Panchhi Petha Store' or 'Panchhi' or any other deceptively similar trade names such as 'New Panchhi Petha Store', 'Famous Panchhi Petha Store' and 'Best Panchhi Petha Store' etc. It would, however, be open for the defendants to sell their product in any other trade name, which may be available to them, in accordance with law.
31. Coming to the next issue with regard to violation of plaintiff's copyright, it is to be observed that plaintiff is the registered copyright holder of design of his trade name, labels and boxes/containers showing name of 'Panchhi Petha Store' on one side and figure of a lady with a handbag. Copyright has been registered on 31.7.1971 and has been proved. Provisions of Section 4(1) of the Copyright Act has been relied upon. Court below, on issue no.7 framed for the purpose, has returned following finding in para-25 of the judgment dated 16.7.2001:-
**25& oknh }kjk tks izfrfyfi;/kdkj ds vUrxZr tks fMtk;u iathd`r djkbZ gS og fdlh Hkh izdkj ls izfroknh dh fMtk;u ls le:i ugha gSA izfroknh }kjk iz;qDr fd;s tk jgs uke&i= dk vkdkj o ?kuRo] fMtk;u efgyk }kjk /kkfjr vax oL=ksa lqfHkUu gSA oknh }kjk izLrqr dkxt la[;k&111d esa Hkh fp= vafdr gS ftlds lEca/k esa izfrfyfif/kdkj dk nkok fd;k x;k gSA blesa dksbZ lansg ugha gS fd ;g d`fr dykRed d`fr gS tks vf/kfu;e dh /kkjk&2 ds Hkkx&x dh ifjHkk"kk ds vUrxZr vkrh gSA dkxt la[;k&180x@2] 180x@3 vkSj 180x@4 vfrya?kudkjh fp= gSA oknh ds fp= vkSj izfroknh }kjk iz;qDr fd;s tk jgs fp= esa dksbZ le:irk ugha gSA vkdkj vkSj ?kuRo ,oa fMtk;u esa dkQh varj gS tks efgykvksa ds fp= vafdr gS muesa Hkh le:irk ugha gSA dkxt la[;k&180x@2 esa efgyk ckyksa dks cka/ks gq;s gSa] /kksrh igus gq;s gS vkSj nkfgus gkaFk esa ilZ gS] tcfd oknh }kjk iz;qDRk fd;s tk jgs fp= dkxt la[;k&111d esa efgyk dqrkZ igus gq;s gSa cky [kMs+ gq;s gSaA eq[kkd`fr esa Hkh varj gS vkSj nkfgus esa gkFk esa >ksyk fy;s gq;s gSaA lHkh fp=ksa dks ns[kus ij efLr"d ij ;g lkekU; izHkko ugha iM+rk gS fd izfroknh dk fp= vU; dqN ugha vfirq oknh fp=ksa dh izfrfyfi ek= gSA lkekU; O;fDRk bu fp=ksa dks ns[kdj ugha dg ldrk gS fd ;g lHkh fp= fdlh ewy fp= dh izfrfyfi gSA vr% oknh }kjk tks lk{; izLrqr fd;k x;k gS mlds vk/kkj ij eaS bl fu"d"kZ ij igaqprk gw¡ fd izfroknhx.k }kjk izfrfyI;f/kdkj dk vfrya?ku ugha fd;k x;k gSA okn fcUnq rn~uqlkj fuLrkfjr fd;k tkrk gSA** "
32. From the evidence led on record, it transpires that plaintiff uses a label, upon which there exist a photo of lady with a bag in her hand. The defendants, however, used label upon which apart from 'New Panchhi Petha Store', there appears photo of a lady. The only distinction is that unlike the earlier case, the lady has tide her hairs and holds a Purse in her right hand, and is wearing a Kurta. Her face also has slight difference. On this ground, the court below has held that there is no violation of plaintiff's copyright.
The evidence laid by the parties has been referred to while dealing the plea with regard to violation of plaintiff's trademark. Here also, I find that use of photo of a lady with an Umbrella or Purse etc. in her hand is intended to cause confusion in the minds of purchaser about the product sold. Plaintiff is the prior user and has established on record that it is carrying on business of manufacturing and selling Dalmoth and Petha since long. The defendant is claimed to have started similar business by misrepresenting them as 'Panchhi Petha Store'. The use of labels, which similarly has photo of a lady on the label with an Umbrella appears to be a part of design by the defendants to pass on their product as that of the plaintiff. The minor changes made by the defendants in the label is similar to the tactics adopted by defendants of making minor changes in the trade name or labels, boxes etc. for passing off their goods misrepresenting it as that of plaintiff. In such circumstances, I am of the opinion that in the facts and circumstances of the present case, the plaintiff has been able to make out a case of violation of registered copyright by the defendants and is entitled to grant of prayer made in that regard in the plaint.
33. 'Panchhi' as a trade mark has come to acquire distinct recognition for standard quality of Dalmoth, Namkin and Petha not only in Agra but throughout the country. The use of trade name 'Panchhi' by the defendants, in absence of any semblance of right over it, would have to be treated as lacking in bona fide. By unauthorizedly using trade name 'Panchhi', defendants apparently wanted to ride on the reputation and goodwill of plaintiff as a reputed manufacturer of Petha, Dalmoth and Namkin. Permitting the defendants to carry on their business in the name of 'Panchhi Petha Store', by merely using a prefix 'New', 'Best' or 'Famous' etc. would amount to grant of approval to the illegal and clandestine act on part of the defendants.
34. For the discussions and reasons recorded above this appeal succeeds and is allowed. Judgment and decree of the trial court dated 16.7.2001 is set aside. Plaintiff's suit is allowed with costs. Defendants are restrained from using trade name containing the plaintiff's registered trademark 'Panchhi Petha Store' or to use 'Panchhi' as a part of their trade name in their business of selling Dalmoth, Petha and Namkin, and are further restrained from using polythene bags, boxes and labels similar to that of plaintiff, as are registered under the Act. The plaintiff shall also be entitled to an order for recovery of infringing work found in the premises of defendants, which shall be destroyed. The plaintiff are also held entitled to costs of the proceedings.
Order Date :- 31.5.2017 Arshad/Anil (Ashwani Kumar Mishra, J.)