Delhi District Court
Deepak Kumar Khemka vs Lakshmi Chand & Sons on 17 August, 2022
IN THE COURT OF DISTRICT JUDGE
(COMMERCIAL COURT-02)
SOUTH DISTRICT, SAKET COURTS: NEW DELHI
CS (COMM) 338/2020
Deepak Kumar Khemka ..........plaintiff
Proprietor M/s Wizard Fragrances
402, Gallantt Landmark, Bank Road,
Gorakhpur - 273001 (UP)
Versus
Lakshmi Chand & Sons ......defendant
Shop no. 4, Khan Market,
Ram Nagar, Ghaziabad,
Uttar Pradesh 201001
Date of institution : 03.11.2020
Date of arguments : 17.08.2022
Date of judgment : 17.08.2022
JUDGMENT
1. This is a suit for permanent injunction for restraining the defendants and its agents from infringing the Trademark "SHUDH, SHUDH, SHUDH PLUS". Case of the plaintiff in brief, is that the n brief, case of the plaintiff is that it is engaged in the business of manufacturing and marketing of Pan Masala, Gutkha, Desi Gutkha & Khaini, Supari, Pan Masala, Mouth Freshener and Meethi Supari and has been carrying on its said business under the name and style of M/s Wizard Fragrances. The plaintiff,in the year, 2010 bonafidely and honestly adopted and started using, the trademark/label SHUDH in relation to their said goods in the course of its said business and trade. Thereafter, plaintiff also adopted and started using the Deepak Kumar Khemka vs Lakshmi Chand sons 1 trademarks SHUDH PLUS and SHUDH PLUS ULTRA LABEL on 25.01.2011. It is stated that for the sake of brevity and convenience the trademarks/ labels SHUDH, SHUDH PLUS and SHUDH PLUS ULTRA LABEL of the plaintiff are hereinafter collectively referred to as the said trade mark/label SHUDH. Word mark SHUDH is the essential feature of plaintiff's said trademark/label. It is stated that representation of Plaintiff's trademark SHUDH PLUS and SHUDH PLUS ULTRA is as under and also placed on record. It is stated that the artwork involved in the said trademark/label are original artistic work and the plaintiff is the owner and proprietor thereof within the meaning of Indian Copyright Act, 1957. The copyright involved in artwork of plaintiff's said TradeMark/Label SHUDH PLUS ULTRA is duly registered in favour of the Plaintiff under the Copyright Act under No. A-114247/2015. It is stated that the plaintiff has also obtained No Objection Certificate of the Registrar of Trade Marks in terms of Section 45 of the Copyright Act, 1957 for registration of artwork involved in the said trademark/label SHUDH PLUS under the provisions of Copyright Act, 1957 and have applied to Copyright Office for copyright registration under Diary No.14262/2012/CO-A. Copyright in the artwork of plaintiff's said trademark/label is well protected and enforceable within the ambit of the Copyright Act, 1957. It is stated that the plaintiff has been using/applying copyright in relation to said goods and business within the meaning of and as per Section 14 of the Copyright Act and all reference to the said Trade Mark/Label includes their respective copyright therein as well. Since the year 2010 the plaintiff has been honestly and bonafidely, continuously, commercially, Deepak Kumar Khemka vs Lakshmi Chand sons 2 openly, exclusively, without interruption and in the course of trade and as proprietor thereof using the said trade mark/label as trade marks in relation to his said goods and business and carrying on his said goods and business there under and has built up a valuable trade, goodwill and reputation there under both in India and acquired proprietary rights therein. It is stated that as the volume of sales grew, the plaintiff entered into a Licence User Agreement dated 01.01.2011, with M/s K.G. Pan Products Pvt. Ltd. and authorized them to manufacture and sell the said goods under the said trade mark/label for consideration and royalty.
2. It is further the case of plaintiff that use of the said trademark/label SHUDH by the said License User M/s K.G. Pan Products Pvt. Ltd. amounts to use by the plaintiff under the Trade Marks Act. The said License Agreement of the plaintiff with M/s K.G. Pan Products Pvt. Ltd. is renewed and is in force. It is stated that the entities K. G. Pan Products Private Limited, Shudh Plus Pan Masala Private Limited, Shudh Plus International Private Limited, Shudh Plus India Private Limited, Shudh Plus Fragrances Private Limited and other group companies are part of the plaintiff and are 'single economic unit'. It is stated that the plaintiff is the proprietor, prior adopter and continuous, extensive and exclusive user of his said trademark/label in relation to said goods and business. The said goods and business being carried on by the plaintiff under his said trademark/label is a very extensive one and the said goods and business there under have been practically distributed in major parts of the country and the said goods and business under the said trademark/label are identified as exclusively originating from the plaintiff's source Deepak Kumar Khemka vs Lakshmi Chand sons 3 and are identified with the plaintiff. The said trademark/label have already become distinctive and associated with the plaintiff and the plaintiff's said goods and business on account of its long, continuous, extensive and exclusive user thereof since 2010 till date.
3. It is the case of plaintiff that the defendant is engaged in manufacturing and marketing of Pan Masala, Tobacco and other allied/related products. It is stated that plaintiff is not aware of the exact constitution of the defendant and he is called upon to disclose the same upon causing appearance before this Court. It is stated that the Defendant has adopted and intends to use the trademark/label, SHUDH RATAN and that the defendant is not the proprietor of the impugned trademark, SHUDH RATAN which is deceptively similar to the plaintiff's trademark/label SHUDH, SHUDH PLUS, and has adopted and intends to so and is soliciting and networking to use the same in relation to his impugned goods and business and is otherwise dealing with it in the course of trade without the leave and license of the plaintiff. It is stated that defendant has no right to act in such manner in relation to its impugned goods and business or for any other specification of goods and business whatsoever being in violation of the plaintiff's rights therein. It is stated that the defendant by its impugned adoption and use/intended use of the impugned Trade Mark, is violating the plaintiff's right in the said trade mark and thereby passing off and enabling others to pass off its impugned goods and business as that of the plaintiff as well as diluting the plaintiff's proprietary rights therein. It is stated that the defendant was/is fully aware of the plaintiff's rights, goodwill, reputations, benefits and users etc. in the Deepak Kumar Khemka vs Lakshmi Chand sons 4 plaintiff's said trade mark at the time of his impugned adoption and intended use of the impugned Trade Mark. It is stated that the resemblance between the rival trademarks is so close that it can hardly occur except by deliberate imitation. It is stated that defendant's impugned adoption and intended user thereof is tainted at inception and is a pirate use of the plaintiff's said trade mark.
4. It is further the case of plaintiff that the defendant has adopted and intends to use the impugned trade mark dishonestly, fraudulently and out of positive greed with a view to take advantage and to trade upon the established goodwill, reputation and proprietary rights of the plaintiff in the plaintiff's said trade mark. It is stated that by the defendant's impugned adoption and intended use, deception and confusion in the market is ensuing or is likely to so ensue. It is submitted that plaintiff's said trade mark is otherwise being diluted and eclipsed thereby. It is stated that any person not knowing clearly the relationship between the parties to this action is bound to be confused by the defendant's impugned adoption and intended use and might well do business with the defendant thinking that he is dealing with the plaintiff or that some strong, vital and subtle links exist between the plaintiff and the defendant. It is stated that the plaintiff learnt about the defendant and their impugned adoption and intended use of the impugned Trade Mark/label , SHUDH RATAN in the first week of September 2020, when the plaintiff through its attorneys came to know about the trademark application filed by the defendant under no. 4506744 in Class 29 for the impugned trademark. It is stated that the plaintiff filed its opposition to such application vide notice of opposition dated Deepak Kumar Khemka vs Lakshmi Chand sons 5 05.09.2020. It is submitted that it is relevant to note that the defendant has applied for the registration of the impugned trademark/label during the COVID-19 lockdown on 21/05/2020, in order to get registration malafidely and then launch its products under the impugned trademark/label to cash in on the statutory and common law rights including user, reputation, goodwill of the plaintiff. It is stated that on further enquiry, it was found that the defendant has started soliciting about its products under the impugned trademark/label in the markets of South Delhi.
5. It is averred that the Defendant is soliciting/networking to various other dealers/ shopkeepers /retailers including in South Delhi area viz. Saket, Mehrauli, Malviya Nagar, Hauz Khas and adjoining areas etc. Such soliciting, networking amounts to user of the impugned trademark by the defendant. This amounts to the impugned infringing activities. It is stated that the cause of action is explained in para 23 of the plaint. It is stated that this Court has the territorial jurisdiction to try and adjudicate the present suit and that the proper court fees is being paid. It is submitted that the plaintiff is having prima facie case, balance of convenience in its favour and there will be irreparable loss and injury to the plaintiff, if the ex- parte ad-interim injunction is not granted. It is further submitted that the plaintiff is entitled for the ex-parte ad- interim injunction against the defendant. It is stated that defendants are committing act of infringement of plaintiff's trademark/label/trade name and copyright and passing-off within the territorial jurisdiction of this Court. Hence, present suit for Deepak Kumar Khemka vs Lakshmi Chand sons 6 permanent injunction for restraining the defendants and its agents from infringing the Trademark has been filed.
6. On 03.11.2020 an application u/o XXXIX rule 1 & 2 CPC was moved and on 04.11.2020 exparte interim injunction was granted in favour of plaintiff and defendants by itself as also through their individual proprietors, partners, directors, agents, representatives, distributors, assignees, heirs, successors, stockists and all other acting for and on their behalf were restrained, from soliciting, networking, manufacturing, marketing, intended use, using, selling, displaying, advertising or by any other mode or manner dealing in or using the defendant's impugned trademark "SHUDH RATAN" or soliciting/using it through any online medium or online websites or through any online platforms or through any social medias or any other identical with and/or deceptively similar word/mark/label to the plaintiff's trademarks which is identical/deceptively similar to the plaintiff's trademark and label SHUDH, SHUDH PLUS in relation to their impugned goods and business of pan masala tobacco and related/cognate/allied goods and from doing any other acts or deeds amounting to or likely to infringement of the plaintiff's trademarks/labels; passing off and violation of the plaintiff's common law rights in the plaintiff's said trademarks/labels as well as trade name and dilution of the plaintiff's rights and infringement of the plaintiff's copyrights/labels.
7. It may be noted that that defendants never appeared before this Court despite service. On 30.01.2021, counsel for plaintiff filed affidavit regarding compliance of Order XXXIX Rule 3 CPC alongwith original postal receipts. He has also e-
Deepak Kumar Khemka vs Lakshmi Chand sons 7filed track report to show that defendants were served by way of speed post on 16.11.2021. Since, none appeared on behalf of defendants despite repeated calls, they were proceeded exparte on 30.01.2021.
8. On 07.04.2022 and on 19.07.2022 application u/O XXII rule 10 and application u/O VI rule 17 CPC were allowed. Amended plaint and memo of parties were taken on record.
9. This court has heard submissions advanced by Sh. Siddharth Swain, Learned counsels for the plaintiff and perused the material on record.
10. Ld. counsel for plaintiff submitted that the plaintiff adopted and started using the trademark/label SHUDH in relation to their Pan Masala, Gutkha, Desi Gutkha & Khaini, Supari, Pan Masala, Mouth Freshner and Meethi Supari goods in the course of its said business and trade. It is submitted that plaintiff also adopted started using the trademarks SHUDH PLUS and SHUDH PLUS ULTRA LABLE on 25.01.2011. It is further submitted that the trademarks of the plaintiff SHUDH and SHUDH PLUS are registered marks in class 31 and 34 and are valid and subsisting till date. It is further submitted that the plaintiff has copyright registration in the artwork of the trademark /lable SHUDH PLUS ULTRA under no. A-
114247/2015.
11. Ld. Counsel for plaintiff has averred that the plaintiff has acquired to unmatchable goodwill and reputation by its sales throughout all States in India. It is submitted that the plaintiff has spent huge amount in advertisement and promotion of its brand SHUDH, SHUDH PLUS and SHUDH PLUS ULTRA LABLE and supporting documents i.e. invoices related Deepak Kumar Khemka vs Lakshmi Chand sons 8 to advertisement of the plaintiff brand alongwith telecast and broadcast certificates have been placed on record.
12. Ld. Counsel for plaintiff has further submitted that the plaintiff's brand has made considerable amount of sales in lakhs and crores and supporting documents i.e. invoices related to sales of the plaintiff goods under trademark SHUDH, SHUDH PLUS and SHUDH PLUS ULTRA.
13. Ld. Counsel for plaintiff has submitted that defendant has adopted and intends to use the trademark/label SHUDH RATAN. It is submitted that the defendant has applied for trademark registration under TM No. 4506744 in class 29 for the mark SHUDH RATAN and subsequently, the plaintiff filed a notice of opposition dated 04.09.2020 against the application.
14. Ld. Counsel for plaintiff has placed reliance on judgment of Delhi High Court in the matter of V Guard Industries Ld vs Crompton Greaves Consumer Electricals Ltd. in CS (Comm) 92/2022 decided on 12.05.2022; South India Beverages Pvt ltd vs General Mills Marketing Inc. & Anr. 2015 (61) PTC 231 (Del.) (DB) ; Atlas Cycle Industries Ltd vs Hind Cycles Limited MANU/DE/0198/1972 and Izuk Chemical Works vs Babu Ram Dharam Prakash MANU/DE/2011/2007
15. Ld. Counsel for plaintiff further submitted that the defendant has copied the essential and dominant feature of the plaintiff's trademark SHUDH from its trademarks SHUDH, SHUDH PLUS and SHUDH PLUS ULTRA by adopting the impugned trademark/label SHUDH RATAN. It is further submitted that even part use of the registered trademark by way of opposite party would amount to infringement. It is submitted that it has been long accepted that if a word forming part of a Deepak Kumar Khemka vs Lakshmi Chand sons 9 mark has come in trade to be used to identify the goods of the owner of the mark, it is an infringement of the mark itself to use that word as the mark on part of the mark of another trader, for confusion is likely to result. It is prayed that the defendants are permanently injuncted from using the impugned trademark/label SHUDH RATAN or any other mark i.e. confusingly and deceptively similar to that of the plaintiff's trademark SHUDH, SHUDH PLUS and SHUDH PLUS ULTRA.
16. To prove its case, plaintiff has examined Sh. Sudhir Verma, Director K. G. Pan Products as PW-1, who tendered in evidence his affidavit as Ex. PW1/A and relied upon copies of three Representation/Photographs of the products under the Trademark/label of plaintiff Ex. PW1/1A to 1C; Status and registration certificates of some of the trademark registrations (mentioned in plaint) in India of plaintiff including relevant pages of the trademarks Journal showing publications of the registered trademarks Ex. PW1/2 to Ex. PW1/2J; 04 Receipt of Legal proceedings certificates which were filed on 19.10.2020 with respect to trademark registrations in India (mentioned in plaint) of the plaintiff Ex. PW1/3; list of plaintiff's various other trademark registrations Ex. PW1/4; Registration certificate dated 19.10.2015 of the plaintiff's copyright registration no. A 114247/2015 Ex. PW1/5; Readily available sales figures of the plaintiff from 20102011 to 20172018 Ex. PW1/6; Deed of licence agreement dated 01.01.2011 executed between Amar Tulsiyan proprietor of M/s Wizard Fragrances and M/s K. G. Pan Products Pvt ltd. Ex. PW1/7; computer print out of invoices no. 10, 6, 44, 66 related to the sales of the plaintiff's goods under its Deepak Kumar Khemka vs Lakshmi Chand sons 10 trademark/label Ex. PW1/8 to Ex. PW1/8C; computer print out of invoices no. 14 and invoice dated 30.09.2015 related to advertisement of the plaintiff's brand, telecast certificates, broadcast certificates Ex. PW1/9 and Ex. PW1/9A; status of the defendant's trademark application under no. 4506744 in Class 29 and the opposition filed to it by the plaintiff Ex. PW1/10; certified copy of earlier order dated 17.11.2016 in favour of plaintiff passed by Additional District Judge01, Patiala House courts, New Delhi Ex. PW1/11; certified copy of extract of resolution dated 01.11.2021 executed by K. G. Pan Products Pvt ltd. authorizing him to continue the suit, sign and verify pleadings, applications depose on oath and do all acts in connection with the suit Ex. PW1/13; certificate u/s 65B of Indian Evidence Act pertaining to electronic records i.e. Ex. PW1/2 to Ex. PW1/2J; Ex. PW1/8 to Ex. PW1/8C and Ex. PW1/11 is Ex. PW1/13.
17. This Court has perused the material on record and evidence led by the plaintiff . The testimony of PW-1 Sh. Sudhir Verma has remained unrebutted. In this case, interim orders were granted on 04.11.2020. Plaintiff has established that plaintiff is the proprietor of registered trademarks "SHUDH, SHUDH PLUS, SHUDH PLUS ULTRA ". Plaintiff has placed on record certificate for use in legal proceedings for their registered trademark Ex. PW1/3. Plaintiff has established that the registered trademarks "SHUDH, SHUDH, SHUDH PLUS" are well known marks as defined u/s 2 (1) (zg) of the Trademark Act .
18. The aforesaid facts and circumstances show that the plaintiff has the exclusive right to use the aforenoted trademarks Deepak Kumar Khemka vs Lakshmi Chand sons 11 and defendant is misusing and infringing the trademarks of the plaintiff and passing off its goods as that of the plaintiff. This not only causes loss of profit to the plaintiff but also results in the inferior products and services made available to the public at large , who are deceived by the conduct of the defendant.
19. On appreciation of evidence on record, this Court is satisfied that defendant has adopted the trademark/name SHUDH, SHUDH RATAN . In relation to the above said impugned goods and business of counterfeit goods used by the plaintiff and that there is a high degree of phonetic similarity and degree of resemblances which can very easily create confusion in the minds of members of the general public. The plaintiff being the holder of a registered trademark is entitled to protection against its infringement and the relief claimed.
20. In view of the above, plaintiff is entitled to a decree of permanent injunction against the defendants from dealing with the goods and services having infringing marks and defendants by itself as also through their individual proprietors, partners, directors, agents, representatives, distributors, assignees, heirs, successors, stockists and all other acting for and on their behalf are restrained, till next date of hearing, from soliciting, networking, manufacturing, marketing, intended use, using, selling, displaying, advertising or by any other mode or manner dealing in or using the defendant's impugned trademark "SHUDH RATAN" or soliciting/using it through any online medium or online websites or through any online platforms or through any social medias or any other identical with and/or deceptively similar word/mark/label to the plaintiff's trademarks which is identical/deceptively similar to the plaintiff's trademark Deepak Kumar Khemka vs Lakshmi Chand sons 12 and label SHUDH, SHUDH PLUS in relation to their impugned goods and business of pan masala tobacco and related/cognate/allied goods and from doing any other acts or deeds amounting to or likely to infringement of the plaintiff's registered Trademarks/labels; passing off and violation of the plaintiff's common law rights in the plaintiff's trademarks/labels as well as trade name and dilution of the plaintiff's rights and infringement of the plaintiff's copyrights/labels. COSTS
21. Ld. Counsel for plaintiff further submitted that the cost incurred by the plaintiff in pursuing this litigation is approximately Rs. 3,60,000/- lakhs which includes legal fee and administrative charges of Rs. 3,00,000/- and Rs. 60,000/- respectively. In this context, he has submitted that in the Polo/Lauren Company vs Rohit S. Bajaj's case noted above, the observation made by our Hon'ble High Court were as under:
"14. The last aspect to be considered is the issue of damages for loss of reputation and business as also the cost of the present proceedings. It is trite to say that the defendant has deliberately stayed away from the present proceedings with the result that an enquiry into the accounts of the defendant for determination of damages cannot take place. However, the infringement of the trademark of the plaintiff is not in dispute. The plaintiff has claimed damages to the tune of Rs.50,00,000/- for loss of sale and reputation payable to the plaintiff. The attention of this Court has been drawn to a number of judgments in this behalf where dealing with similar situations, damages have been awarded."
22. The time has come when the Courts dealing actions for infringement of trade marks, copy rights, patents, etc. should not only grant compensatory damages but award punitive damages with a view to discourage and dishearten law breakers who indulge in violations with impunity out of lust for money so Deepak Kumar Khemka vs Lakshmi Chand sons 13 that they realize that in case they are caught, they would be liable not only to reimburse the aggrieved party but would be liable to pay punitive damages also, which may spell financial disaster for them.
23. In Jockey International Inc & Anr. Vs R. Chandra Mohan & Ors. 2014 (59) PTC 437 (Del) in para 43, it was held that damages must be awarded in such cases where defendant chooses to stay from the proceedings of the Court and that defendant should not be permitted to enjoy the benefits of evasion of Court proceedings. A party who chooses not to participate in Court proceedings and stays away must suffer the consequences of damages as it cannot produce its account books. There is larger public purpose involved to discourage such parties indulging in such rights of deception and even if the same has a punitive element, it must be granted.
24. In Cartier International AG & others vs Gaurav Bhatia & ors. CS (OS) No. 1317/2014 decided on 04.01.2016 wherein it has been held that it appears from the conduct of the defendants who are deliberately stayed away from the present proceedings with the result that an inquiry into their accounts for determination of damages could not take place and it is well settled that damages in such cases must be awarded and the defendant who chooses to stay away from the proceedings of the Court should not be permitted to enjoy the benefits of evasions of Court proceedings. Any view to the contrary would result in a situation where the defendant who appears in Court and submits its account books would be liable for damages while a party which choose away from the Court proceedings would escape the liability on account of failure of liability of account books. A Deepak Kumar Khemka vs Lakshmi Chand sons 14 party who chooses not to participate in Court proceedings and stay away must suffer the consequences of damages as stated and set out by the plaintiff as the Court is dealing with the counterfeit products. It is rank case of dishonesty where the piracy committed by the defendant is apparent on the face of record. It is just like printing of duplicate currency. The counterfeiter can never be allowed to do such illegal activities. Cheating can never be condoned by the Court unless the accused is punished. The damages which plaintiff claim are attributable to flagrant infringement.
25. The present suit was filed on 03.11.2020. Total number of 17 hearings have taken place in this case. Plaintiff shall be entitled to costs towards pleader's fee litigation expenses, Court fees and on account of economic and commercial advantage which the defendant tried to gain at the expenses of the enviable reputation which has been created by the plaintiff apart from injunction. Having regard to the totality of aforesaid facts and circumstances, this court holds that plaintiffs are entitled to lumpsum costs of Rs 2,00,000/- .
26. Having regard to the afore noted discussion, the suit of the plaintiff is decreed. A decree of permanent injunction in favour of plaintiff against the defendants are hereby passed and defendants are restrained from dealing by itself as also through their individual proprietors, partners, directors, agents, representatives, distributors, assigns, heirs, successors, stockists and all others acting for and on their behalf from soliciting, networking, manufacturing, marketing, intended use, using, selling, displaying, advertising or by any other mode or manner dealing in or using the defendant's impugned trade mark/label, Deepak Kumar Khemka vs Lakshmi Chand sons 15 SHUDH RATAN or soliciting/using it through any online medium or online websites or through any online platforms or through any social medias or any other identical with and/or deceptively similar word/mark/label to the plaintiff's Trademarks/labels which is identical/deceptively similar to the plaintiff's trademark/label SHUDH, SHUDH PLUS, in relation to their impugned goods and business of electrical goods including electrical wires, wire and cables and related/cognate/allied goods and from doing any other acts or deeds. Plaintiff is also entitled to costs of Rs.2,00,000/- (inclusive of Court fees.) . Decree sheet be drawn up accordingly. File be consigned to record room.
(Dictated and announced today i.e. On 17.08.2022) (VINAY KUMAR KHANNA) District Judge (Commercial Court-02) South Disttt., Saket, New Delhi.
Deepak Kumar Khemka vs Lakshmi Chand sons 16