Madras High Court
Rubinetterie Bresciane Bonomi Spa vs M/S.Lehry Instrumentation & Valves ...
Author: N. Sathish Kumar
Bench: N. Sathish Kumar
C.S.No.405 of 2014 and C.S.No.891 of 2015
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on Delivered on
31~10~2019 21~11~2019
CORAM:
THE HONOURABLE MR.JUSTICE N. SATHISH KUMAR
C.S.No.405 of 2014 and 891 of 2015
and A.No.7447 and 7961 of 2015
Rubinetterie Bresciane Bonomi SpA
Via M.Bonami 1, 25064, Gussago, Brescia (Italia)
Through its authorised representative
Mr. Federico Salatini. ... Plaintiff in CS.405/2014 &
Defendant in CS.891/2015
Vs.
M/s.Lehry Instrumentation & Valves Pvt. Ltd.,
NO.78/Old No.51, Sembudoss Street,
Parrys, Chennai 600001, Tamilnadu
through its Managing Director. ... Defendant in CS.405/2014 &
Plaintiff in C.S.891/2015
C.S.No.405 of 2014 filed under Order IV Rule 1 O.S. Rules
read with order VII Rule 1 of CPC alongwith Ss.27, and 134 135
of the Trademarks Act, 1999, to grant Permanent Injunction
restraining the Defendant and their person connected with and
claiming through the Defendant and passing off it valves and
other plumbing product by using the offending, identical and well
known trademark or in any manner advertising the same; to
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C.S.No.405 of 2014 and C.S.No.891 of 2015
render true and faithful accounts of the profits earned by it using
the offending identical and/or deceptively similar trademark and
payment of such profits to the Plaintiff for the passing off; a
mandatory injunction directing the Defendant to disclose the
identity with full particulars of manufacturer of the counterfeit
product with further direction to seize and destroy the counterfeit
products stoked with defendant at Defendant's cost and
consequences; to order and decree to pay to the Plaintiff by the
Defendant Rs.10,00,000/- towards damages for the illegal
activities committed by the defendant with costs.
C.S.No.891 of 2015 filed under Order IV Rule 1 O.S. Rules
read with order VII Rule 1 of CPC to declare termination of the
dealership between the plaintiff and the defendant on 8.7.2014
was wrongful and in bad faith and direct the defendant to pay the
Plaintiff for a sum of Rs.60,61,400/-as compensation for such
termination; to order a sum of Rs.3,02,57,868/- with further
interest on Rs.2,46,68,371.00 from the date of plaint till the date
of payment against re-delivery of the goods imported by the
plaintiff from the defendant; Permanent injunction restraining the
Defendant from communicating or publishing any defamatory
allegations against the plaintiff, directly or indirectly relating to
manufacturing of counterfeit products of the defendant by the
plaintiff to anyone; to order damages for a sum of Rs.50 lakhs
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C.S.No.405 of 2014 and C.S.No.891 of 2015
for the loss of reputation caused by the defamatory statements
communicated by the defendant along with costs.
For Plaintiff in : Mr.N.L.Rajah
C.S.No.405/2014 Senior Counsel for
& for Defendant in for M/s.C.Gladys Daniel
C.S.No.891/2015
For Defendant in : Mr.P.S. Raman
C.S.No.405/2014 Senior Counsel for
& for Plaintiff in Mr.V.P. Raman
C.S.No.891/2015
COMMON JUDGMENT
The Civil Suit in C.S.No.405 of 2014 is filed for the following reliefs:
a. to grant Permanent Injunction restraining the Defendant and their person connected with and claiming through the Defendant and passing off it valves and other plumbing product by using the offending, identical and well known trademark or in any manner advertising the same;
Page 3 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 b. to render true and faithful accounts of the profits earned by it using the offending identical and/or deceptively similar trademark and payment of such profits to the Plaintiff for the passing off;
c. a mandatory injunction directing the Defendant to disclose the identity with full particulars of manufacturer of the counterfeit product with further direction to seize and destroy the counterfeit products stoked with defendant at Defendant's cost and consequences;
d. Defendant be ordered and decreed to pay to the Plaintiff by the Defendant Rs.10,00,000/- towards damages for the illegal activities committed by the defendant and e. cost;
3. The brief facts leading to file the suit by the Plaintiff in Page 4 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 C.S.No.405 of 2019 is as follows:
3(a) The Plaintiff are involved in the business of manufacturing and selling of brass ball valves, fittings, press ball valves, butterfly valves, gas ball valves and check valves, Valpres carbon and stainless steeel ball valves, and valbia automation products worldwide. It is one of the largest and highest quality ball valve and actuator companies in Italy and is one of the leaders in its field. The Plaintiff is part of Bonomi Group, which is a group of three companies Valpres, Valbia and the Plaintiff.
During the course of the said business the Plaintiff have honestly conceived and adopted the trademark for its high quality ball valve and actuators ever since the year 1901 and have continuously used the said trademark ever since its inception. The Plaintiff also have business associates in India, who are selling the Plaintiff's products after purchasing it from the Plaintiff company. The aforesaid business associates in Page 5 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 India selling goods under the name and trademark of the Plaintiff's company. The Plaintiff's associates in India do not have any license, permission except authority to sell in India genuine products of the Plaintiff only after importing the same from the plaintiff.
3(b) The Defendant is one of the major associates of the Plaintiff in India since 2005, who purchases goods from Plaintiff and then sells them in the Indian market. The Plaintiff has been selling Ball valves, Non-ball valves (such as full bore non return valves), Pressure reducing valves. The Plaintiff are well known for the quality of their products worldwide. They have branches in Germany, England, Russia and North America including India.
The Plaintiff enjoys exclusive proprietory and monopoly right in the said trademark in respect of the goods which are sold worldwide including India due to his long and statutory right and exclusive ownership of the said trademark. The Plaintiff therefore has legal and statutory right and exclusive ownership of Page 6 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 the said trademark. The defendant also represented that it is a very old establishment and has all the necessary infrastructure to resell and market the products of Plaintiff. It was clearly understood between Plaintiff and the Defendant that Defendant would only be permitted to resell Plaintiff's products under Plaintiff's trademark.
3(c) In may 2014, the Plaintiff was shocked to receive a complaint from an Indian company viz., M/s. Apco Trading Company, who used to purchase Plaintiff's products from the Defendant, in respect of quality of some of its products. The above said company also forwarded some samples of "ball valves" sold by the defendant, portraying them to be imported from the Plaintiff directly from Italy. M/s. Apco also forwarded copy of a certificate, purportedly issued by the Plaintiff which was used by the Defendant to fortify its claim that the valves came from the Plaintiff while selling the same to M/s.Apco.Page 7 of 81
http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 3(d) It is the contention of the Plaintiff that certificate is fake certificate, which has been forged to deceive the innocent customers. The products supplied by the Defendant to M/s.Apco was spurious/counterfeit product and the materials used in such valves did not comply with the international standards set for those products and being followed by the Plaintiff. The counterfeit products sold by the Defendant was deceiptively similar to the original valves as manufactured by the Plaintiff. The Plaintiff was shocked on such revelations as the defendant at any point of time never purchased any such product from the Plaintiff ever since 2005. The Plaintiff sent a warning letter dated June 9, 2014 called upon them to refrain from selling the counterfeit product under Plaintiff's trademark and also refrain from issuing false certificates. After receiving the above letter, the Defendant through its C.E.O. Mr.Abbas Lehry telephonically contacted Mr.Federico Salatini of the Plaintiff company on June 11, 2014.
During the above conversation the Defendant did not deny the facts alleged facts. Further, the Defendant vide its e-mail dated Page 8 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 June 13, 2014 admitted the fact that it has been issuing the certificates to the customers though such certificates were never issued and/or authorised by the Plaintiff. Hence, it is the contention of the Plaintiff that the Defendant sold the above mentioned counterfeit product in India by falsely using the Plaintiff's trademark. The Defendant has absolutely no right to pass off its products as that of plaintiff's. Hence the suit.
4. In the written statement filed by the Defendant it is averred as follows:
4(a). The present suit is a collusive litigation involving the plaintiff and M/s.Apco Trading Co. (hereinafter called as "M/s.Apco") to run the defendant out of business for the defendant's continuous complaints to the Plaintiff about the inferior quality of its products. The Defendant's grandfather had commenced the business of importing automobile parts and reselling in India in the year 1930 along with some of his Page 9 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 brothers. In the year 1950 a firm in the name and style of M/s.Lehry Brothers was started. This firm was involved in distribution of the valves apart from importing and reselling valves in India. In 2006, the firm began manufacturing certain types of valves apart from merely importing and reselling them.
The Plaintiff originally began selling its products in India only from the year 1996. Some of the products supplied by the plaintiff were found to be faulty and therefore the arrangement with M/s.Thakur Bhai was terminated. The Plaintiff subsequently appointed separate importers for different regions in India. The Plaintiff subsequently appointed separate importers for different regions in India. The Plaintiff and Defendant came into contact only through M/s. Modern Sales Agencies based in Mumbai who was the importer of the plaintiff's products for the west and south zone. The Defendant was appointed by the Plaintiff as the importer for the southern zone covering the states of Tamil Nadu, Andhra Pradesh, Karnataka and Pondicherry.Page 10 of 81
http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 4(b) In January 2012, the Defendant brought to the notice of the Plaintiff that there was ample business opportunity for the Plaintiff in an upcoming residential project in Chennai.
Thereafter, the Defendant was appointed as the importer for the western zone. The Defendant has on many occasions brought it to the notice of the Plaintiff that the products supplied by them have been found to be defective and the Plaintiff has time and again agreed to replace the same. E-mail dated 04.02.2013 the Defendant appraised the Plaintiff about complaints received from three different clients to whom the Plaintiff's products were supplied. These complaints relates to breakage of cups and punchering of the diaphragm in the Pressure Reducing Valves, leakage in 3” Ball valves and deviation in the angle of the threads in 3/4” Ball valves which were not parallel. Similar complaints also received from M/s. Lanco a customer based in Hyderabad.
By various correspondence, the Defendant also brought to the notice of the Plaintiff about the defects. Only the Defendant has increased the turnover of the Plaintiff's products in and is Page 11 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 importing and reselling products of the Plaintiff worth about Rs.4 Crores. The Defendant's turnover for the Plaintiff's products in India is more than the turnover earned by all other importers of the Plaintiff's products in India. The Defendant is currently holding the products imported from the Plaintiff worth Rs.3 Crores. The Defendant has not used the trademark "RB".
4(c) It is the further contention that the Plaintiff in fact provides only one certificate covering the entire consignment of imported products. However, the Defendant has to annex a quality certificate with each and every sale of the Plaintiff's products to third party consumers. Many of the buyers of the plaintiff's products are contractors and builders to whom the products cannot be sold without annexing quality certificates.
Further the Defendant in many cases sell small quantities where the buryers pay the value by cash and the products have to be delivered immediately. In such cases also the Defendant cannot wait for the Plaintiff to send quality certificates which have to be Page 12 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 issued to the Defendant. Therefore the Plaintiff was made aware that the Defendant would be annexing copies of the certificates sent by the Plaintiff and the Plaintiff at no point of time objected to the same. However, in order to suit the convenience of the Plaintiff, the facts have been twisted by the Plaintiff alleging that the Defendant have been issuing forged certificates. Hence, it is the contention of the Defendant that the suit itself engineered by its competitor and the Defendant is never involved in manufacturing counterfeit products.
5. In the reply statement the Plaintiff has stated that through their local representative in India Mr.Sudhir Paithankar, they discovered the counterfeit valves bearing the RB sign supplied by the Defendant, have been used by Amrappali Group in NOIDA. They found that the valves supplied were counterfeit, and even the cartons were tampered.
6. Based on the above pleadings the following issues have Page 13 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 been framed in C.S.No.405 of 2014:
1. whether the defendant sold its own products by saying that it was imported from the plaintiff?
2. Whether the defendant has falsely applied the plaintiff's trademark on its products?
3. Whether M/s.Apco Trading Company is a proper and necessary party?
4. Whether the defendant also manufactures certain types of plumbing equipments and whether it is different from the products of the Plaintiff?
5. Whether the advertisements relating to plaintiff's products have been published by the defendant and also by other importers?
6. Whether the defendant has copied or sold or counterfeited the products of the Plaintiff?
7. Whether the plaintiff has used the trademark RB (inside a diamond shaped device) along with the words `RUBINETTERIE BRESCIANE`?Page 14 of 81
http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015
8. Whether the plaintiff is entitled to relief as prayed for and to what other relief the plaintiff is entitled to?
7. Following additional issues have also been framed in C.S.No.405 of 2014:
1. Whether Defendant is liable to disclose identity of the counterfeit goods being sold by using the trademark of Plaintiff with full particulars of the manufacturers of the same?
2. Whether Defendant is entitled to cost of the present suit?
3. Whether Defendant is passing off Plaintiff's Defendant's trademark?
4. Whether Defendant had applied for registration of Trademark belonging to Defendant in India and later withdrew it?
8. C.S.891 of 2015 filed by the Defendant in C.S.No.405 Page 15 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 of 2014 for the following reliefs:
a. to declare the termination of the dealership between the plaintiff and the defendant on 8.7.2014 was wrongful and in bad faith and direct the defendant to pay the Plaintiff for a sum of Rs.60,61,400/-as compensation for such termination;
b. to order a sum of Rs.3,02,57,868/-
with further interest on Rs.2,46,68,371.00 from the date of plaint till the date of payment against re-delivery of the goods imported by the plaintiff from the defendant;
c. Permanent injunction restraining the Defendant from communicating or publishing any defamatory allegations against the plaintiff, directly or indirectly relating to manufacturing of counterfeit products of the defendant by the plaintiff to anyone;
d. to order damages for a sum of Rs.50 lakhs for the loss of reputation caused by the defamatory statements communicated by the Page 16 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 defendant, and e. Cost.
9. The following are the brief facts contained the the plaint in C.S.No.891 of 2015 :
9(a) The Plaintiff's firm involved in the distribution of plumbing valves apart from importing and reselling valves in India. The firm has been continuously trading in valves and plumbing equipment since then. The Defendant began selling its products in India only from the year 1996. Originally they had transaction with M/s. Thakur Bhai, later the same was terminated. Thereafter the Defendant appointed separte importers for different region in India. The Plaintiff and the Defendant came into contact only through M/s. Modern Sales Agencies based in Mumbai, who was the partners of the Defendant products for the west and south zone. Apart from South zone the Plaintiff was appointed as importers for the Page 17 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 western zone. The Plaintiff besides the products of the Defendant, imports products from various other entities too. The Plaintiff also manufactures certain type of plumbing equipments in India but there is a difference in the material used in the products imported from the Defendant and those manufactured indigenously. The products imported from the defendant are brass based ferrous valves. This element of iron is absent in the products manufactures by the Plaintiff. The Plaintiff has on many occasions brought to the notice of the Defendant that the products supplied by them have been found to be defective and the Defendant has time and again agreed to replace the same.
They also specifically brought to the notice of the Defendant about the complaint received from three different clients to whom the Defedant's products were supplied. In this regard, various letters also sent to the Defendant. The Plaintiff from 2005 has increased the turnover of the Defendant's products in India and was importing and reselling products of the Plaintiff worth about Rs.4 Crores. The Plaintiff's turnover for the Page 18 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 Defendant's products in India was more than the turnover earned by all the other importers of the Defendant's products in India.
9(b) Under these circumstances the Plaintiff was shocked to receive a notice dated 09.06.2014 from attorneys alleging that the Plaintiff was involved in manufacturing counterfeits of the defendant's products and selling them in the market in India.
The same was denied by the Plaintiff. The Plaintiff currently holding the products imported from the Defendant worth Rs.2,46,687,371.00. When the matter stood thus the Defendant has sent letter dated 08.07.2014 informed all customers of the Defendant's products that the business arrangement between the Plaintiff and defendant stood terminated and requested that all pending requests for products should be redirected to the Defendant directly and several notices also sent to the other customers of the Plaintiff. Many pending invoices raised by the Plaintiff were not paid by the customers due to the false allegations circulated by the Defendant. The Defendant spread Page 19 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 false allegations against the Plaintiff with the knowledge that these allegation are false and with an aim to bring disrepute to the Plaintiff. These have been calculated to damage the reputation of the plaintiff in the market as a leading supplier of the Defendant's products. Hence the suit.
10. In the written statement filed by the Defendant in C.S.No.891 of 2015 it is averred as follows:
10(a). It is the case of the Defendant that the present suit is merely a counter blast to the suit for “passing off” filed on behalf of the Defendant bearing C.S.No.405 of 2014 pending before this Court and there is no merit in this suit. There is no cause of action in favour of the Plaintiff to file the present suit and reiterated his pleadings raised in C.S.No.405 of 2014 pending before this court. Hence the same need not be once again repeated.Page 20 of 81
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11. Based on the above pleadings the following issues have been framed in C.S.No.891 of 2015 :
(i) Whether the termination of the dealership agreement between the Plaintiff and Defendant on 08.07.2014 was wrongful or in bad faith?
(ii) Whether the Plaintiff is entitled to the amount of Rs.60,61,400/- as compensation for termination of its dealership by the Defendant?
(iii) Whether the Plaintiff is entitled to a sum of Rs.3,02,57,868/- along with further interest on Rs.2,46,68,371/- as claimed in the suit
(iv) Whether the Plaintiff is entitled to a permanent injunction restraining the Defendant from communicating or causing to be communicated, publishing or causing to be published any allegation against the Plaintiff directly or indirectly relating to manufacturing of counterfeit product of the Defendant by the Plaintiff to anyone?
(v) Whether the Plaintiff is entitled to damages of a sum of Rs.50 lakhs for the alleged loss Page 21 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 of reputation?
(vi) Whether the Plaintiff is entitled to cost of the present suit?
(vii) Whether the Defendant-Rubinetterie Bresciane Bonomi Spa's goods sold in India contained defects?
(viii) Whether the Defendant-Rubinetterie Bresciane Bonomi Spa sold other products apart from Pressure Reducing Valves, ball Valves and Non-Return Valves to the Plaintiffs?
(ix) Whether the Defendant-Rubinetterie Bresciane Bonomi Spa is obligated to take back the goods imported by the Plaintiff from the Defendant upon termination of the dealership?
(x) To what other reliefs the parties are entitled to?
12. As the suits are cross suits, joint trial was conducted Page 22 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 and common judgement is delivered. For sake of convenience, the parties to the above proceedings were referred to according to their array in C.S.No.405 of 2014.
13. On the side of the Plaintiff two witnesses were examined Mr.Federico Salatini and Mr. Manish Shrivastava were examined as P.W.1 and P.W.2 respectively and Exs.P.1 to P.19 were marked. On the side of the Defendant Mr.Abbas Lehri was examined as D.W.1 and Exs.D.1 to D.48 were marked. The Exhibits are as under:-
13a. Exhibits produced on the side of the plaintiff:
S.No. Date Description of documents Exhibit
1. 18~06~2014 Authorisation letters given by the Plaintiff in favour of P-1 01~02~2016 the Deponent series
2. --- Invoice showing the trading of the Plaintiff's products P-2 in India since 1996
3. --- Print out of totl hits made on the Plaintiff's Indian P-3 Website series
4. --- Print out of the list of pending P-4 applications/registrations of the Plaintiff's company series indicating the countreis along with a few registration certificates
5. --- Print out from the website of the trademark registry P-5 showing the Application No.2493808 filed by the series Page 23 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 S.No. Date Description of documents Exhibit Defendant
6. --- Printout from the website of the trademark registry P-6 showing the withdrawal of Application No.2493808 by the Defendant
7. 28~05~2014 print out of e-mail sent by Sudhir to Mr.Federico P-7 Salatini showing the list of names of the major seminar along with documents demonstrating the praticipation made by the plaitnff to such members
8. --- Print out of the Invoice showing sale of RB product P-8 made by the Plaintiff to the Defendant based on the order placed by the Defendant in 2005 along with 3- mail dt.06.06.2005
9. 15.05.2014 Print out of letter by Apco certifying that they P-9 pruchased counterfeit/defective product from the Defendant and the forged certificate issued by the Defendant.
10. --- Print out of test result issued by the Plaintiff's P-10 supplier of raw material pertaining to the counterfeit products procured by Apco and dispatched to the Plaintiff 29~05~2014 Print out of email sent by Infodrive with their invoice P-11 11 to Mr.Federico Salatini 09~06~2014 Print out of letter with attachment issued by the P-12 12 Plaintiff's Counsel M/s.Carnelutti to the Defendant 13~06~2014 Print out of email issued by the Defendant to the P-13 13 Plaintiff 12~06~2014 Comparative analysis done by Plaintiff's of the P-14 Defendant's counterfeit product bearing the 14 Trademark RB 22~01~2015 The Original Investigation Report conducted by P-15 Insta-Quest showing sale of counterfeit products by 15 the Defendant.
22~01~2015 The Original comparison between RB Original P-16 valvesand Lehry counterfeit valves prepared on the 16 basis of Insta-Quest Report.
17 --- Original of the catalogue Indian Plumbing Today P-17 issued by the Defendant Page 24 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 S.No. Date Description of documents Exhibit 18 18~02~2013 Form - 48 P-18 19 15~07~2019 Legal Use Certificate in respect of Trademark P-19 Application under No.2493808 13b. Exhibits produced on the side of the defendant:
S.No. Date Description of documents Exhibit
1. 19~03~2013 The Invoice with custom receipt D-1 09~06~2014 Email informing Apco's appointment is filed D-2 along the written statement in C.S.No.405 of 2 2014 3 25~11~2013 The hand written minutes of meeting held at D-3 Aparna Hill Park, Hyderabad 4 15~04~2014,22 Invoices were the basis for invoking the letter D-4 ~04~2014 of credits 5 08~07~2014 Letter D-5
--- Certificate issuing appointing Lehry as a D-6 6 Distributor from 1.1.2014 to 31.12.2014 7 25~05~2013, The emails from Lehry and From RB D-7 28.05.2013 8 26~08~2014 Letter to various clients D-8 9 28~10~2014 Letter D-9 10 21~02~2015 Legal notice issued by Lehry to RB D-10 11 11~03~2015 Reply Notice D-11 12 07~04~2015 Letter to Watts D-12 05~12~2017 Certificate of Incorporation of the Defendant D-13 13 company 14 12~05~2010 Lease cum sale agreement entered into with D-14 Page 25 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 S.No. Date Description of documents Exhibit CMDA 01~10~2010 Invoice raised on the Defendant by M/s. D-15 15 Huzefa Roofings 02~09~2011 Invoice raised on the Defendant by M/s. S&S D-16 16 Construction 20~04~2012 Invoices for the Plaintiff's products imported by D-17 to Defendant with customs invoices 17 10.05.2013 04~02~2012 Email from the Defendant to the Plaintiff D-18 18 regarding defects in the products 10~02~2012 Email complaint from M/s.Lanco Regarding D-19 19 Pressure Reducing Valves 21~03~2012 Email from the Defendantg to the Plaintiff D-20 20 regarding defects in the products 12~06~2013 Email showing disagreement between the D-21 21 Defendant and the Plaintiff 14~11~2013 Email from the Plaintiff to the Defendant D-22 22 acknowledging defects 02~12~2013 Email from M/s.Equip Sales and Services D-23 23 regarding quality fo the Plaintiff's products 24~01~2014 Email from the Defendant to the Plaintiff D-24 24 regarding defects in the products 13~02~2014 Email from the Defendant to the Plaintiff D-25 25 regarding defects in the products 24~03~2014 Email from the Defendant to the Plaintiff D-26 26 regarding defects in the products 22~03~2012 Email from Sudhir Paithankar suggesting that D-27 27 defective goods are dumped in India 28~03~2014 Email from the Plaitniff agreeing to replace D-28 28 defective goods 21~03~2014 Email from the Defendant to the Plaintiff D-29 29 regarding defects in the products 30 17~04~2012 Email from Sudhir Misra regaridng quality of D-30 Page 26 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 S.No. Date Description of documents Exhibit the Defendant's products 09~05~2014 Email from the Plaintiff informing that D-31 M/s.Apco has been appointed as the importer 31 for the western region 10~12~2013 Invoice for the Plaintiff's products supplied to D-32 32 M/s.Apco 13~01~2014 Invoice for the Plaintiff's products supplied to D-33 33 M/s.Apco 19~06~2014 Legal notice from the Plaintiff suspending the D-34 34 business relationship with the defendant 35 01~07~2014 Reply legal notice sent by the Defendant D-35 13~08~2014 Email from the Defendant to M/s. Sudhir D-36 36 Paithankar regarding false allegations 22~08~2014 Intimation from HSBC regarding invocation of D-37 37 letter of creidt dated 22~08~2014 17~09~2014 Email received by the Defendant from M/s. D-38 38 Santech Engineers 30~10~2014 Email from Industrial Hardware Store to the D-39 39 Defendant 20~03~2015 Email from M/s.R.D.Associates that M/s. P2V2 D-40 had been appointed as the Importer in 40 Chennai 41 14~04~2015 Email from Mr.Jeff Miller to Mr.Gary Brodie D-41 30~04~2015 Email from Mr.Gary Brodie forwarding D-42 42 communcation received from the Plaintiff 08~07~2014 Email from M/s.Amrapali alleging that the D-43 43 Defendant manufactured counterfeits 14~07~2014 Email from Kumar Enterprises withholding D-44 44 payment to the Defendant 17~07~2014 Email from M/s.Gautam Techno Sanitation D-45 45 Pvt. Ltd., to the Defendant 16~09~2014 Email from WSP to the Defendant regarding D-46 46 the allegations Page 27 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 S.No. Date Description of documents Exhibit
--- Figures showing the fall in the monthly sales D-47 47 average
--- Details of existing stock of the Defendant's D-48 48 products with the Plaintiff.
14(a) It is the contention of the learned Senior Counsel appearing for the Plaintiff that the Plaintiff has been trading its products universally and selling in India since 1996. The Defendant from the year 2005 approached the Plaintiff and started placing orders. There was no written agreement appointing the Defendant to sell and market Plaintiff's products in India. However, the Defendant continued to place the order of the plaintiff. Plaintiff notice that after the year 2012 the import of their products by the Defendants suddenly dropped and expressed its concern. However, Defendant avoided such concerns. It is his contention that around May 2014 the plaintiff has received samples of valves purportedly manufactured by the Plaintiff by an Indian Company namely, Apco Trading Company. Thereafter he found that thay all manufactured by the Defendant Page 28 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 are counterfeit. Ex.P.15 Investigation Report filed by the Plaintff clearly proves the counterfeit products manufactured by the Defendant. The evidence of the person who prepared investigation report clinchingly established the fact that the Defendant is using counterfeit product and passing off the goods. Ex.P.19 Trade Mark Applications given by the Defendant itself clearly established the fact that the Defendant claimed to be manufacturered the he using the product from 2008. Ex.P.19 Trade Mark Application filed by the Defendant established fact that the Defendant used the mark of the Plaintiff. Ex.P.19 and the oral evidence of P.W.1 probabalise the plaintiff's case that the counterfeit valves were being sold in India by using the trade mark of the plaintiff. The Defendant has purposefully avoided the answer a question relating to the import data. The above conduct also clearly established the mala fide intention of the Defendant company.
14(b) It is his further contention that the Defendant under Page 29 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 Ex.P.13 has accepted the generating both quality Certificates but denied the sale of counterfeit goods. It is the further contention of the learned counsel that to prove the allegation of the defendant that customers are buying the goods. No one was examined in this regard by the Defendant. Whereas the Passing off Plaintiff goods have been clearly established. Further, nothing prevented the Defendant from clear the goods. Therefore, there cannot be any damages either for defamation or for the goods imported by the Defendants. Exs.D.18 to D.33, Ex.D.36, Ex.D.8 and Ex.D.46 are only a photocopies those documents cannot be given any important. Ex.P.19 series proves the fact that the Defendant company was admittedly the importer of the plaintiff's product and trade mark is the plaintiff's trademark, the Defendant filing the application claiming the trademark of the plaintiff proves the mala fide on their part. His conduct in shifting his stand during the evidence that the Defendant has not signed in the trademark application also to be taken note of. It is further contended that the Defendant plaint has not contained Page 30 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 the extract of the alleged defamatory statement to claim the damages. Hence, it is his contention that Ex.P.19 itself clearly proved not only passing off but also counterfeit product being sold by the Defendant. Hence, it is his contention that the Plaintiff is entitled to decree and judgement in the suit with punitive damages and the cross suit filed by the Defendant has to be dismissed.
15. In support of his submissions, he relied upon the following judgements:-
1. Reckitt and Colman Products Ltd., Vs. Borden Inc. & Ors. [MANU/UKHL/0012/1990]
2. Cadila Healthcare Ltd., Vs. Cadila Pharmaceuticals Ltd., [(2001) 5 SCC 73]
3. Corn Products Refining Co. vs. Shangrila Food Products Ltd., [AIR 1960 SC 142]
4. Consolidated Foods Corporation vs. Brandon & Co. Private Limited [1961 SCC Bom 55] Page 31 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015
5. Honda Motors Co. Ltd., vs. Charanjit Singh & ors. [2002 SCC Del 1332]
6. Air India Limited vs. Gati Limited [2015 SCC Del 10220]
7. Bharat Petroleum Corporation Limited and Ors. vs. Jethanand Thakordas Karachiwala and Ors.[MANU/MH/0053/2000]
8. Strategic Outsourcing, Incorporated vs.Continental Casualty Company [MANU/FEFO/0155/2008]
9. Whatman International Limited vs. Mehta and Ors. [ MANU/MH/0347/2019]
10. Glenmark Pharmaceuticals Ltd., vs. Curetech Skincare and Ors.
[MANU/MH/2566/2018]
11. Shalina Laboratories Pvt. Ltd., and Ors. vs. Twin Impex and Ors. [MANU/MH/2899/2018 ]
12. Nippon Steel & Sumitomo Metal Page 32 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 Corporation vs. Kishor D Jain & Another [NML.No.810 of 2019 in COMIP(L) No.383 of 2019 Bombay High Court]
16. Whereas the Learned Senior Counsel appearing for the Defendant submitted that admittedly there is no proof whatsoever filed by the Plaintiff to prove the alleged counterfeit products. What the plaintiff sought in the plaint is to seek legitimate accounts of the Defendant. It is his contention that the relationship between the Plaintiff and Defendant is Principal and Dealer. Only the defendant has enhanced the reputation of the Plaintiff in India. Only in order to terminate the dealership the entire suit has been filed with the help of the competitor of the defendant in the market. The alleged investigation report and the alleged samples sent by the Apco, the competitor of the Defendant is fabricated only to do away with the Defendant from the business. Further, it is his contention that the Plaintiff used to sell the bulk of goods and issue only one Certificate and it was the practice that in order to annex a quality certificate with each Page 33 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 and every sale of the Plaintiff products to third party customer a xerox certificate generated and given to the purchasers. It is the practice in the field, that has been taken by the Plaintiff to contend that the Defendant is generating the bogus certificate thereby selling counterfeit products. Ex.P.13 Reply Notice cannot be taken into admission. What was contended in the above notice is to explain the true facts. Therefore, such notice cannot be treated as admission.
17. It is further contention of the learned counsel for the Defendant that no material objects to prove the alleged counterfeit products filed. Ex.D.5 termination letter did not refer as counterfeit. Even in the evidence no question was put to the Defendant on the above certificate etc., The Plaintiff has invoked the Letter of Credit on 24.2.2014 thereafter issued letters to all the dealers stating that the Defendant dealt with the counterfeit. The termination was made with bad faith only to tarnish the image of the Defendant. No complaint whatsoever ever raised by Page 34 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 the purchaser questioning the alleged counterfeit goods dealt by the Defendant. Ex.P.15 Report is fabricated one and the evidence was collected only after the suit. In Ex.P.9 there is interpolation. Ex.P.8 series photographs alone filed. No evidence to show who took the photographs. Ex.P.10 is also not admissible since it is issued by some other company. Ex.P.11 original data was not marked which is admitted by the Plaintiff. It is his further contention that Ex.P.14 Photographs matched with the photos contained in Ex.P.16. It is clearly indicated that the alleged inspection is an after thought. In fact even at the time of filing of the Plaint there is no whisper about the counterfeit products. The evidence created after the suit at the instance of Apco who is the competitor of the Defendant. Hence it is the contention of the learned Senior Counsel that all the documents relied upon by the Plaintiff is not admissible in evidence. Whereas the e-mails to various customers of the Defendants clearly defamed the defendant and tarnished their name. The Plaintiff having sent the materials and encashed LOC has spread the false rumours as Page 35 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 against the Defendant, which prevented the sale of the original materials. Therefore, it is his contention that the plaintiff has to compensate for the loss sustainable by the Defendant due to non-sale of the goods.
18. It is his further contention that as far as the passing off is concerned, misrepresentation has not pleaded and the Plaintiff himself admitted that the suit is only for the ball valves and no turnover particulars given in the suit. Turnover for India not pleaded and the auditors were not examined. P.W.2's cross examination specifically indicated that no counterfeit product seized. Hence, prayed for the dismissal of the suit.
19. In support of his contention he relied upon the following judgements:
1. Aravind Laboratories v.Modicare [(2014) 4 LW 55]
2. Corn Products Refining Co. v. Shangrila Page 36 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 Food Products [AIR 1960 SC 142]
3. Amar Singh v. State of Bihar [(1971) 3 SCC 273]
4. Muddasani Venkata Narasiah v. Muddasani Sarojana [(2016)12 SCC 288]
5. Bishwanath Rai v. Sachinanda Singh [(1972) 4 SCC 707]
6. Prashanti Plantations v. L.Krishnakumar [2018 SCC Online Mad 11998]
7. Om Prakash Berlia v. Unit Trust of India [AIR 1983 Bom 1]
8. Anvar PV v. PK Basheer & Ors. [(2014) 10 SCC 473]
9. Nyati Builders v. Rajat Dinesh Chauhan [2015 SCC Online Bom 7578]
10. ICICI Bank v. Sunil Sharma [2018 SCC Online Del 6948]
11. HDFC Bank v. Suhrit Services [2018 SCC Page 37 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 Online Del 8220] Issues in C.S.No.405 of 2014:
20. The main contention of the plaintiff that they dealing with the business of manufacturing and selling of brass ball valves, fittings, press ball valves, butterfly valves, gas ball valves and check valves and Valbia automation products worldwide. The plaintiff conceived and adopted the trade mark They have been trading these products and using the relative trademarks in Indian market since the year 1996. The Defendant is one of the major associates of the plaintiff in India since 2005. Accordingly the Plaintiff sold ball valves, non-ball Valves and pressure reducing valves to the Defendant. It was clearly understood from the plaintiff and the defendant that the defendant is only permitted to resell plaintiff's products under the Page 38 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 Plaintiff's trademark. In May 2014 the Plaintiff has received a complaint from the Indian Company viz., M/s. Apco Trading Company used to purchase the plaintiff product from the Defendant in respect of the quality of the some of its products. Some samples of ball valves also forwarded to the Plaintiff and also copy of the certificate. It is the further case of the plaintiff that certificates submitted by the defendant, there are many typographical errors hence it is the contention of the plaintiff that the defendant used fake certificate and forged the certificate of the plaintiff to deceive the innocent customer. Further, the product sold by the defendant under the plaintiff's trademark is counterfeit product.
21. Whereas it is the case of the defendant that the suit is filed with the collusion of M/s. Apco Trading Company. To run the defendant out of the business, continuous complaints were sent to the Plaintiff regarding inferior quality of its products. The Plaintiff filed Ex.P.9 series to show the defendant is selling the Page 39 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 counterfeit products and also by forging the certificate issued by the Plaintiff. Ex.P.9 series when carefully seen, absolutely there is no dispute with regard to the plaintiff's trademark and their business dealing with the valves of various varieties. The plaintiff also selling the product viz., ball valves, non-ball Valves and Pressure Reducing Valves to the Defendant in India from the year 2005. This fact is not in dispute. Specific contention of the plaintiff is that on 15.05.2014, they received a complaint from one M/s.Apco Trading Company. Only on the basis of the above complaint they came to know that the defendants are counterfeiting the product and also forging the certificate issued by the Plaintiff. Ex.P.9 is filed by the Plaintiff in this regard to prove the alleged counterfeit and forgery committed by the Defendant. Ex.P.9 series filed to show that the Defendant has sold “RB” products RB Italy 1510 Brass Ball Valve 15mm; RB Italy 1510 Bras Ball Valve 40 mm and RB Italy 1510 Brass Ball Valve 20 mm for a sum of Rs.48,263/- and it is contended by the Plaintiff that along with this some samples are sent by the said Page 40 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 M/s. Apco Trading Company which was tested in recognised labs under Ex.P.10 and it is established that the said valve was counterfeit and not manufactured by the by the Plaintiff company.
22. In this regard, the evidence of P.W.1 when carefully seen, he has clearly admitted that the present suit is filed for passing off only in respect of the Ball Valves. It is to be noted that the date mentioned in Ex.P.9, does not match with the date on which they purchased the goods from the Defendant. P.W.1 also admitted in his evidence that the date of Ball Valve certifying in Ex.P.9 is 5.4.2012. Whereas the products said to have been purchased in the year 2014. Similarly, P.W.1 in his question No.147 has admitted that a certificate can be given to a purchaser only when he purchases the product from the seller. It is also to be noted that when the alleged invoices Ex.P.9 relates to the Ball Valves only, the question of issuing certificate for the Pressure Reducing Valves (PRV) does not arise at all. P.W.1 also Page 41 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 admitted that the Pressure Reducing Valves never sold under Invoice Ex.P.9. When the particular goods itself were not sold, their allegation that the forged certificate was issued by the Defendant in respect of the goods which was never sold is highly improbable. The main contention of the plaintiff that the defendant have generated the certificates issued by the Plaintiff in respect of their goods and admitted the same in their e-mail communications. The Defendant in their written statement has admitted that the average size of any consignment imported from the plaintiff is a container of goods which has around 40,000 to 50,000 pieces. Unlike such a bulk import, the Defendant sells the imported products in much smaller quantities. For instance, there are customers who by 10 or 20 pieces. The plaintiff provides only one certificate covering the entire consignment of imported products. However, the defendant has to annex a quality certificate with each and every sale of the plaintiff's products to third party consumers. Since, many of the buyers of the plaintiff's products are contractors and Page 42 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 builders to whom the products cannot be sold without annexing quality certificates and since small quantities to be delivered immediately, the defendant cannot wait for the plaintiff to send quality certificate which have to be issued to the Defendant. Therefore, the Plaintiff was made aware that the defendant would be annexing copies of the certificates sent by the Plaintiff and the Plaintiff at no point of time objected the same. Further the defendant has also not confronted with regard to the explanation in this regard.
23. In this regard P.W.1 the plaintiff in his evidence admitted in question No.147 tht a certificate can be given only when he purchases the product from the seller. He has also admitted that Ex.P.9 does not say the certificates are attached. Similarly he has also admitted that he has not received letters with samples from M/s.Apco Trading Company. Whereas it is the main contention of the Plaintiff in the plaint, that one certificate was issued to M/s.Apco Trading Co., Whereas on perusal of Page 43 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 Ex.P.9 there are two certificates available. It is stated in the plaint that the alleged sale of Ball Valves in the year 2014. Whereas the certificates annexed in Ex.P.9 show that the year of 2012. Further one of the certificates also relate to the Pressure Reducing Valve in the year 2014. Curious to note such sale was made to M/s.Apco Trading Co., as could be seen from the invoice dated 07.04.2014. Therefore, merely, on the ground that the defendant has admitted in the e-mail that they are generating certificates to annex the same whenever the small quantity sold, it cannot be concluded that the entire certificate of the defendant has been forged. Initial burden lies on the plaintiff to prove not only the manufacture of the counterfeit product but also the plea of forgery of certificates. The alleged forged certificate has not been filed. Further, the counterfeit products also not been produced before the court.
24. The Plaintiff mainly relied upon Ex.P.10 and Ex.P.15 to prove the alleged counterfeit. Ex.P.10 has filed said to be the Page 44 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 test result in one of the lab in Italy and the entire report is in Italian language and no translated copy has been filed as required in the original side Rules. Further person who has given such report has not been examined. It is also relevant to note that Ex.D.5 issued by the plaintiff for the termination of the dealership of the Defendant.
25. It is also relevant to note that the letter dated 18.7.2014 issued by the Plaintiff for terminating their business relationship with the Defendant. This letter was sent on 08.07.2014 much after the alleged communication Ex.P.9 dated 15.5.2014 sent by Apco. Ex.D.5 totally silent about any alleged counterfeit products manufactured by the Plaintiff. If really the plaintiff was aware of the alleged counterfeit products being manufactured by the Defendant in the month of May 2014 and found out the alleged counterfeit products as per the test report Ex.P.10 as early as on 16.5.2014, the normal conduct of the Plaintiff would have referred the same in Ex.D.5, the termination Page 45 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 of contract. Ex.P.9 series said to have been contained photographs. There is no evidence to show who had taken the photographs.
26. Ex.P.14 report of the comparative analysis between original RB Valves and counterfeit units. The author of Ex.P.14 has not examined. It is also curious to note that Ex.P.15 investigation report. It is the contention of the Plaintiff that the investigating officer appointed in this regard (Ex.P.15) and the Project name is known as `Jaypee Aman'. As per the Plan, the IO visited the project and enquired some people and clicked the photograph and left the premises. Ex.P.14 comparative analysis between the original RB Valves and counterfeit units, filed by the Plaintiff show that the valves are manufactured by the defendant are the counterfeit. Though the author of Ex.P.14 was not examined, on a perusal of the report indicates that the samples have been provided by the Indian third subjects, such as companies Fluid Valve Co.and Apco Trading Company. According Page 46 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 to the report those two companies have purchased the products from the Indian Company viz, the Defendant and the photographs have also attached. This report is dated 12.06.2014 marked as Ex.P.14. Ex.P.15 is the Investigation Report does not indicate any counterfeit. Ex.P.16 is the comparison report between the RB original valves and Lehry counterfeit valves which was prepared by one Mr.Sudhir Paithankar. He has given a report on the basis of the visual examination on the valves based on the Investigation Report filed under Ex.P.15. Ex.P.15 Investigation Report clearly indicate that some investigating agencies appointed by the plaintiff to visit some selective sites.
27. The first report dated 22.1.2015 wherein he did not find any counterfeit product except one damage of Diaphragm and the above investigation report clearly indicate that the valves belongs to the plaintiff's company. The second investigation report dated 11.3.2015 indicate that the I.O.found that only Lehry instrumentation and V.H.Shah supplies the products. Page 47 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 However, no original documents could be recovered from the I.O. The I.O also said to have been clicked certain photographs and left the premises. Based on the above photographs Ex.P16 said to be the export report came to be filed. It is relevant to note that the I.O. has not seized any material objects. It is also found from the report that apart from the plaintiff there are one other suppliers viz., V.H.Shaw company also supplied the products to the defendant. Therefore, when there are many suppliers who supplied the valves, without any concrete evidence that the alleged counterfeit valves are actually supplied by the Defendant the court cannot infer or presume that the defendant in fact the manufactured of the counterfeit products and supplied to the customers. One another aspect to doubt the contention of the plaintiff with regard to the alleged counterfeit products is Ex.P.16. Ex.P.16 report prepared by one Mr.Sudhir Paithangar has not examined before this Court.
28. Be that as it may. The entire report proceeded as if he Page 48 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 has conducted the visual examination on the valves randomly selected and found in the mentioned construction site. So according to the Report only Valves collected from the site were compared. Whereas investigation report indicate that no seizure of materials whatsoever effected from the site. Similarly, in Ex.P.16 series, the report of Mr.Sudhir Paithankar, the photographs of valves annexed in the report on bare comparison with Ex.P.14 makes it clear that the photographs contained in Ex.P.14 are identical with the Ex.P.16 photographs. Ex.P.14 photographs said to be the samples sent by Apco in May 2014. Whereas Ex.P.16 in fact contained same photographs. These facts clearly create a serious doubt about the alleged seizure and investigation conducted in various site by the Plaintiff. Ex.P.9 is the certificate issued by the Plaintiff in the year 2012. But the Invoice and Letter has been sent in the year 2014. It is the contention of the Defendant that the said Apco is the competitor of the defendant and he was the root cause for filing the suit by the Plaintiff. The suit itself filed with the collusion of Apco Page 49 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 Trading Company. Such contention of the defendant cannot be ignored altogether and in fact more probabalised for the following reasons:
The letter alleging the counterfeit marked under Ex.P.9 contained the invoices of the year 2012 to 2014. Thereafter the samples said to have been sent to the Plaintiff have not seen the light of the day. Though it was said to have been examined in Ex.P.10 and Ex.P.14, the same photographs are also appears in the report Ex.P.16 which in fact clearly probablise the defence case that the entire investigation report and the comparison report have been fabricated and created after the filing of the suit. Further the author of Ex.P.14 is also not examined and Ex.P.15 does not indicate that the investigation officer recovered the counterfeit product allegedly found on both sites. Whereas Ex.P.16 show as if the material objects seized by the Investigation Officer have been compared. Therefore, such report is highly unbelievable. Further, as indicated, the very same Page 50 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 photograph appeared in Ex.P.14 is available in Ex.P.16, that itself makes it very clear that the report is after thought and created only for the purpose of the case.
29. P.W.2 said to be one of the investigation officer has admitted in his evidence that he has not taken samples from any of the site he has visited. It is also admitted that he never took photographs contained in Ex.P.16. Whereas P.W.1 in his evidence has admitted that all the papers found in Exs.P.15 and P.16 are from the samples received in Italian language. therefore, the contention of the Plaintiff that the above documents are clinchingly established the counterfeit cannot be countenanced. In fact, those documents have not been established. Further contention of the Plaintiff that Ex.P.19 is itself sufficient to prove the alleged counterfeit and passing off the goods of the plaintiff has to be analysed.
30. It is relevant to note that the defendant was originally Page 51 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 appointed as the distributor for the Western Zone which has been clearly admitted by the plaintiff in his evidence. From the cross examination of P.W.1, it can be seen that only after the complaint from one M/s. Apco Trading Co., Ex.P.12 letter was sent to the defendant. In Ex.P.12, it is not specifically stated by the plaintiff that counterfeit of Ball Valves were sold by the defendant. It is to be noted that the suit itself is for 'passing off' with respect of Ball Valves as admitted by the plaintiff. If really the plaintiff were sure that the defendant was dealing with the counterfeit products of ball valves, there is no reason as to why it has not been mentioned in Ex.P.12. Ex.P.12 only relates to Pressure Reducing Valves (PRV). It is not stated specifically by the plaintiff that the defendant is selling counterfeit valves in Ex.P.12. It is also admitted by P.W.1 in his evidence. Whereas, as already discussed above, though the Investigating Officer visited the site, they only found some damage in diaphragm. It is the specific case of the defendant that he was always complaining about poor products of the plaintiff which resulted in filing of a complaint by Page 52 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 some other distributor in order to remove the defendant from the business. In this regard, P.W.1 in his evidence also admitted in Question No.49 that they also received quality complaint of their products since the company has industrial mass production to have some defects in manufacturing. The defendant is one of the major importer of the plaintiff's products in India and the same is also admitted by the plaintiff.
31. The main grievance of the plaintiff seems to be that the defendant has not reached the target. In this regard, the evidence of P.W.1 is that they have not sent any communication before for not reaching the target. Ex.P.9, which is the main complaint for the alleged counterfeit products, when carefully seen, the letter did not contain the allegation of the alleged counterfeit. It is the case of the plaintiff that photographs are annexed to show the counterfeit. As already discussed, there is no evidence as to who has taken such photographs and from where it was taken. It is also to be noted that it is the specific Page 53 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 admission of P.W.1 that ball valves have no diaphragm. Whereas, the investigation report reveal that there was some damage of diaphragm. All these facts clearly indicate that only Pressure Reducing Valve alone have a diaphragm. Such being the case, merely some damage in diaphragm found by the Investigating Officer, it cannot be concluded that all the defects said to have been found by the Investigating Officer is manufactured only by the defendant.
32. It is curious to note that the plaintiff has informed all its distributors that one Apco was appointed as a distributor and this has been communicated to all the distributors by email dated 09.04.2014, which is also admitted by P.W.1. Apco were also appointed for distributor from Mumbai. Such being the position, the Apco Trading Company purchasing the material from the defendant is highly improbable. It is also curious to note that Ex.P.9, in Tax Invoice, the Apco Trading Company is said to have been purchased description of ball valves 1510 of 15mm 40 mm Page 54 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 and 20 mm. Whereas, the test report found in Ex.P.9 relate to article type with regard to Pressure Reducing Valve and another report is with regard to the ball valve which relates to Size DN25. Whereas, the Apco Trading Company claimed to have purchased 15, 20 mm 40 mm valves. These discrepancies in size of the so- called pressure reducing value also create serious doubt about the entire plaintiff case. When the invoice Ex.P.9 sent by Apco shows as if ball valves have been sold by the defendant. The next question arises is how the test report certificate relates to Pressure Reducing Valve. This is also one of the reason which create doubt about the alleged test report contained in Ex.P.9.
33. The main contention of the Plaintiff is that they issued advertisement Ex.P.17 after getting approval from the plaintiff, for which the defendant has not denied specifically. Whereas, P.W.1 has said that he do not remember. The plaintiff has also admitted that the advertisement in Ex.P.17 was corrected by Mr. Sudhir Paithnakar.
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34. Much emphasis was made by the Plaintiff to Ex.P.19 series wherein the Defendant have given an application for registration of the Trade Mark. Ex.P.19 indicate that application was given by the Defendant company on 12.03.2013 claiming user date 01.04.2008 for manufacturing Valves and Product included in Class 06 for mark “RB”. It is the contention of the plaintiff that the Defendant deliberately applied for the registration of the Plaintiff's mark and pursuing such application till 03.06.2017. Thereafter he proceeded to withdraw the said application. The conduct of filing application for registration of the “RB” trademark itself indicate that the Defendant was selling the products of the Plaintiff. No doubt Ex.P.19 was filed by the defendant for the registration of the trade mark “RB” in application dated 12.03.2013.
35. Whereas it is the contention of the Defendant that filing of the trade mark application for mark “RB” was inadvertent Page 56 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 mistake and it is the contention of the defendant that he was not aware of the such application being filed before the trademark and the same was filed by his son. The defendant wanted to have the trade mark for its lehry lavy brand to be registered. Mr. Abbas Lehry as the Managing director of the Defendant's company authorising his trade mark eligible to file trade mark application on his behalf and only his son was overseeing the registration of the trademark himself and he has erroneously appliced “RB” Logo. Though the Defendant has given an explanation in the application was given erroneously and inadvertently, such explanation cannot be countenanced for the simple reason that the application in fact signed by the defendant. Therefore, the explanation in this regard has no relevance.
36. Be that as it may. Filing an application and subsequent withdrawal is not in dispute. Now the question remains mere filing of application for RB whether the same will lead to the Page 57 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 presumption that the Defendant has sold the goods of the Plaintiff. Such presumption cannot be drawn merely on such applications for the simple reason that the plaintiff has appointed the Defendant as dealer, not only in the south India but also Bombay as per his evidence and he has also admitted that the defendant was major reseller of Plaintiff's products in India. Further there is no evidence whatsoever available on the side of Plaintiff at the time of trade mark application dated 12.03.2013. There were counterfeit products manufactured and sold by the Defendant and the same were sold as that of the plaintiff goods.
37. The very dispute in fact started after the other competitor namely Apco Trading Company was appointed as distributor and they sent letter Ex.P.9. The suit itself for passing off Ball Valves. Whereas all the so called investigation report relied upon by the plaintiff indicate that it has been prepared only to non-suit the defendant. The Plaintiff in fact admitted in it evidence that the photographs found in Ex.P.14 and Ex.P.16 are Page 58 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 made in Itali. As discussed above, the question of taking evidence by the investigator is also highly improbable. As already discussed above, the investigation report, the photographs in fact allegedly sent by the Apco. Such being the position unless the plaintiff establishes with concrete evidence that the defendant has manufactured the counterfeit product at the time of applications merely some applications filed for registration of trade mark RB, it cannot be concluded that the defendant has manufactured counterfeit ball valves. Though the filing of such application for RB mark not legally correct and give rise to an inference that the defendant make such applications to sell its product in the name of the Plaintiff. The issue remains in this case not really selling the plaintiff's product. The specific issue is with regard to the alleged counterfeit product manufactured by the Defendant. Unless there is concrete evidence adduced by the Plaintiff to prove the manufacture of the counterfeit product at that time, this court is of the view that merely on the basis of the Ex.P.19, it cannot be concluded that the defendant in fact Page 59 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 manufactured the counterfeit products.
38. Admittedly the defendants were distributors and major seller of the plaintiff. This fact is not in dispute. On entire perusal of the evidence of P.W.1 the dispute mainly started when the turnover has come down at the relevant point of time. Merely because of turnover has come down that may not be a ground to hold that such short of sale was because of the counterfeit product and such inference cannot be drawn. The increase or decrease of the turnover always depends upon the various factors. One cannot expect that only the plaintiff goods always sold and turnover will increase every year. Therefore, merely on that ground, it cannot be inferred that there were counterfeit products. Admittedly the defendant also dealing with the plumbing and similar business. The Defendants also manufactured different type of valves from the year 1996. Such being the position, when the plaintiff's specific allegation that the Defendant is manufactured the counterfeit products of the Page 60 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 plaintiff, the entire burden lies on the plaintiff to establish the manufacture of counterfeit product of the plaintiff. Except relying upon the investigation report, which has also contained serious discrepancies as discussed above, this Court is unable to countenance the contention of the plaintiff. Further no materials whatsoever filed in this regard to show that the products are counterfeit one.
39. Further the Plaintiff also in his evidence has not specifically denied with regard to the advertisement and approval before issuing the advertisement. When the evidence is lacking on the side of the plaintiff, when the plaintiff himself failed to establish the alleged manufacture of the counterfeit goods, then the question of directing the defendant to disclose the identity of the counterfeit goods allegedly sold by him does not arise. The entire lis started after the letter Ex.P.9 sent by Apco Trading Company, as the letter Ex.P.9 and other documents relied upon by the plaintiff have not established particularly the alleged Page 61 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 allegation that the defendant has manufactured the counterfeit valves thereby sold the goods as that of the plaintiff. The said Apco Trading Company is not necessary party to this suit. It is for the Plaintiff to establish its allegation or should have examined some one from the Apco trading Company with regard to Ex.P.9 which has not done so.
40. The judgement cited by the Plaintiff counsel in Reckitt and Colman Products Ltd v Borden Inc & Ors [(08.02.1990 - UKHL) : MANU/UKHL/0012/1990] it is held as follows:
"The basic underlying principle of such an action was stated in 1842 by Lord Langdale M.R. in Perry v. Truefitt (1842) 6 Beav. 66, 73 to be:
"A man is not to sell his own goods under the pretence that they are the goods of another man. . . "
Accordingly, a misrepresentation achieving such a result is actionable because it constitutes an invasion of proprietary rights vested in the plaintiff. However, it is a Page 62 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 prerequisite of any successful passing off action that the plaintiff's goods have acquired a reputation in the market and are known by some distinguishing feature. It is also a prerequisite that the misrepresentation has deceived or is likely to deceive and that the plaintiff is likely to suffer damage by such deception. Mere confusion which does not lead to a sale is not sufficient. Thus, if a customer asks for a tin of black shoe polish without specifying any brand and is offered the product of A which he mistakenly believes to be that of B, he may be confused as to what he has got but he has not been deceived into getting it. Misrepresentation has played no part in his purchase.
In Star Industrial Co. Ltd. v. Yap Kwee Kor [1976] F.S.R. 236, Lord Diplock, delivering the judgment of the Board, said, at p. 269:
"A passing off action is a remedy for the invasion of a right of property not in the mark, name or get-up improperly used, but in the business or goodwill likely to be injured by the misrepresentation made by passing off one person's goods as the goods of another. Goodwill, as the subject of proprietary rights, is incapable of subsisting by itself. It has no independent Page 63 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 existence apart from the business to which it is attached."
In Erven Warnink B.V. v. J. V. Townend & Sons (Hull) Ltd. [1980] R.P.C. 31, Lord Diplock, after pointing out that misrepresentation of one's goods as the goods of someone else was a species of wrong included in a wider genus rather than a separate genus, set out five essential characteristics of a passing off action in the following manner, at p. 93:
"My Lords, A.G. Spalding & Bros, v. A.W. Gamage Ltd. and the later cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing off: (1) a misrepresentation, (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or Page 64 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 (in a quia timet action) will probably do so."
These five characteristics cover both the case where A misrepresents his goods as being those of B and that where he misrepresents the quality of his own goods thereby purporting to render them competitive with those of B. In a case such as the present where what is in issue is whether the goods of A are likely to be passed off as those of B, a plaintiff, to succeed, must establish (1) that his goods have acquired a particular reputation among the public, (2) that persons wishing to buy his goods are likely to be misled into buying the goods of the defendant and (3) that he is likely to suffer damage thereby."
41. Similarly the judgement reported in Cadila Health Care Ltd., vs. Cadila Pharmaceuticals Ltd., [2001 (5) SCC 73] the Honourable Supreme Court has held that test to determine passing of goods the similarity and not similarity between the competing marks, phonetic similarity is not to be Page 65 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 ignored when the competing words are written differently and the question has to be approached from the point of view of an Indian of average intelligence and imperfect recollection and not from the view of an Englishman.
42. In Consolidated Foods Corporation vs. Brandon & Co. Private Limited [1961 SCC online Bombay 55] it is held as follows:
"38. Thus, it will be seen that in case of a distinstive mark within the meaning of the Act, right to be exclusive use thereof can be acquired immediately on that mark being used as a trade mark i.e., used by the trader in his business upon or in connection with his goods and it is not necessary to prove either the length of the user or the extent of the trade. It may be noted that the word "Monarch" in this case, as conceded by the counsel at the Bar, is a distinctive mark and, therefore, it follows that if it is shown that this mark was used by the petitioner corporation as a trade mark in this country upon or in connection with its food products even for once prior to the use of that mark by the respondent company in 1961, and if there is no evidence to show that this mark was abandoned by it, it would be entitled under Section 18 of the Act to apply for registration of Page 66 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 that mark as its trade mark and also to oppose an application made by any other trade for the purpose of registering that mark in his name."
43. And also relied the following judgements.
1. Corn Products Refining Co. vs. Shangrila Food Products Ltd., [AIR 1960 SC 142]
2. Honda Motors Co. Ltd., vs. Charanjit Singh & ors. [2002 SCC Del 1332]
3. Air India Limited vs. Gati Limited [2015 SCC Del 10220]
5. Strategic Outsourcing, Incorporated vs.Continental Casualty Company [MANU/FEFO/0155/2008]
6. Whatman International Limited vs. Mehta and Ors. [ MANU/MH/0347/2019] Page 67 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015
7. Glenmark Pharmaceuticals Ltd., vs. Curetech Skincare and Ors.
[MANU/MH/2566/2018]
8. Shalina Laboratories Pvt. Ltd., and Ors. vs. Twin Impex and Ors. [MANU/MH/2899/2018 ]
9. Nippon Steel & Sumitomo Metal Corporation vs. Kishor D Jain & Another [NML.No.810 of 2019 in COMIP(L) No.383 of 2019 Bombay High Court]
44. Absolutely there is no dispute with regard to the preposition laid down in the above judgements. The fact remains that there is no dispute with regard to the plaintiff registration and their business. The Plaintiff have filed Ex.P.4 trademark Registration Certificate. Admittedly, the defendants are the dealers. They are major reseller and the main allegation of the plaintiff that the defendant has counterfeited their products and manufactured the counterfeit and sold it. The burden of establishing the alleged manufacturing of the goods has not been Page 68 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 discharged by the plaintiff. Though the plaintiff mainly based reliance on the Ex.P.9, Ex.P.10 and Ex.P.15, this court as discussed above, found that these documents are fabricating documents and in fact no evidence established for the proof of alleged manufacturing of the counterfeit products.
45. Ex.D.5 letter dated 8.7.2014 issued by the Plaintiff to all the customers. Wherein the Plaintiff has issued a notice terminating the business of the Defendant and informed the termination of the Defendant to all the customers and requested all of them to revalidate all the pending orders with the Defendant to them. In the above letter also nothing has whispered about the alleged counterfeit products marketed by the Defendant. The Plaintiff has admitted in his evidence that they have not mentioned anything about the counterfeit product in the above letter. A specific question was raised to the Plaintiff at the time of evidence in this regard which is as follows: Page 69 of 81
http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 “Q.311. In other words you have told your customers that Lehry is not selling original products and therefore pending orders should be redirected to RB?
A. No. I say that Lehry was not importing our product any more due to the termination of our business relationship.”
46. It is specifically admitted by the Plaintiff that they never said that defendant was marketing their products. It is also admitted by the plaintiff that since the decision is pending before the Court, they did not want to say anything which they could not prove. The above facts clearly indicate that in fact at the time of filing the suit they have no evidence for the alleged counterfeit products. Whereas Ex.P15 and Ex.P.16 reports prepared after the suit. The suit is filed in the year 2014 and the Reports prepared after the suit. All these facts clearly indicate that plaintiff has not discharged the burden of establishing the allegation of manufacturing counterfeit products. Page 70 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015
47. Further it is not established by the Plaintiff that their mark is well known around the world and especially in India. The Plaintiff has also admitted that they have not given any turnover volume of ball valves. The Plaintiff neither pleaded nor proved his turnover before the court. Similarly not a single alleged counterfeit product is produced. From the above discussions this Court answer all the issues against the Plaintiff. Issues in C.S.891 of 2015:
48. The Defendant in C.S.No.405 of 2014 is the Plaintiff in C.S.No.891 of 2015. Under Ex.P.12 dated 09.06.2014 letter was sent charging the Defendant that the Defendant manufacturing products and selling the same as that of Plaintiff's products. As discussed the earlier issues in O.S.No.405 of 2014 miserably failed to establish the counterfeit products, the ball valves. Further it is also relevant to note that the plaintiff in C.S.No.405 of 2014 has not taken any application for appointment of Page 71 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 Advocate Commissioner. Whereas the Defendant/Plaintiff has filed an application for appointment of Advocate Commissioner to find out any counterfeit product. The Commissioner in fact examined the goods supplied by the Plaintiff. The Commissioner did not find any counterfeit products. The Report of the Commissioner also filed on record. No objection whatsoever filed by the Plaintiff in C.S.No.405 of 2014 in this regard. Further it has already held above that the Plaintiff has not produced any original certificate. Quality Certificates annexed with Ex.P.9 also having corrections and interpolations. Whereas, as discussed in the previous issues, the original certificate has not been filed. In this regard the Defendant has also spoken about the necessity for generating the certificate. In the written statement, the Defendant's specific case is that since large size of consignment reported from the Plaintiff that it is a container around 40,000 to 50,000 pieces, the Defendant used to provide only one certificate covering the entire consignment of their products. Therefore, to annex the quality certificate each and every sale of the Page 72 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 Defendant's products to third party consumers after making the plaintiff aware that the Defendant would be annexing the copies of the certificate. In this regard evidence of P.W.1 is also not denied in the cross examination. When the explanation offered by the witness and spoken in the chief examination not controverted nor denied, such evidence deemed to be the admission on the part of the other side.
49. It is relevant to note that after the interim order vacated the Plaintiff sent the communication dated 8.7.2014 to all the customers that the relationship with the Defendant is terminated and all the pending orders with the Defendant should be redirected to the Plaintiff directly. In the above communication Ex.D.5 absolutely there is no whisper about the alleged counterfeit product and reasons also not given for termination. Thereafter when the interim order vacated on 4.7.2014 the Plaintiff issued Ex.D.8 and Ex.D.9 wherein for the first time they charged the Defendant for counterfeiting the Page 73 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 valves. It is also relevant to note that on 22.8.2014, the Plaintiff has invoked the letter of credit for a sum of Rs.64,84,371/- towards the goods imported by the Defendant in May 2014 prior to the termination. Ex.D.4 is Letter of Credit. The LC was encashed when the goods of the plaintiff was struck with the defendant. Thereafter several communications were sent to the customers as discussed above alleging the counterfeit products. Having admitted that Ex.D.5 never intended to blame the defendant for counterfeit products, thereafter communication was sent under Ex.D.12 dated 7.4.2015. Further the Plaintiff in O.S.No.405 of 2014has admitted writing letters Ex.D.9 to the customers. After the termination of the dealership under Ex.D.8 dated 26.8.2014 it is also admitted by the Plaintiff during his cross examination that they have permitted the Defendant to sell the belated goods.
50. The Original order has not been extracted, whereas the communication has been sent selectively. Similarly, D.W.1 in his Page 74 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 evidence also stated that several customers also received such letters terminating him as counterfeiter. However, no cross examination whatsoever done by the plaintiff in this regard. The Ex.D.8 and Ex.D.9 and the admission of P.W.1 also clearly indicated that the communications were sent to the customers defaming the defendant. Above communications are in fact without any evidence, therefore such conduct certainly amounts to defamation. Further without establishing the counterfeit products, having supplied the goods and encahsing LoC and suddenly terminated the agreement is also not bona fide.
51. The Defendant has also in his evidence stated that because of such communications the business has come down he has also given the turnover particulars in his evidence which has also not been challenged or controverted in the cross examination. When the specific facts spoken in the chief examination is not denied, same amounts to admission, which is not disputed in the cross examination. Though it is the Page 75 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 contention of the Defendant/Plaintiff in C.S.891 of 2015 they are entitled to a sum of Rs.3,02,57,868/- till the date of payment of redelivery of the goods, it is admitted by the Senior counsel that goods worth Rs.1,13,00,000/- already sold by the Defendant/Plaintiff in O.S.No.891 of 2015. In view of the above and further fact that LoC has also encahsed, this Court is of the view that there is no need whatsoever for directing the Defendant/Plaintiff in C.S.No.405 of 2014 to pay that amount. Admittedly the Defendant/Plaintiff in C.S.891 of 2015 is also dealing with the similar business from the year 1996, now the products are already with them, such view of the matter, the Defendant can market the above goods in his own name, though it contains the mark of the plaintiff. Till such goods are sold, the plaintiff has no right whatsoever to complain about the goods being sold by the defendants. Similarly Plaintiff in O.S.No.405 of 2014 is not entitled to make any further defamatory statement in view of the fact that immediately after the goods were imported by the plaintiff Letter of Credit has been encashed and Page 76 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 dealership agreement was terminated. Such view of the matter this court is of the view that the Defendant/Plaintiff in C.S.No.891 of 2015 is entitled to sell the goods imported from the Plaintiff in the same mark and liquidate the same.
52. This court is not inclined to pass any direction to the Plaintiff in C.S.No.405 of 2014 for payment of money towards the goods, since the Defendant is also involved in the same business and dealing with the products. Therefore he can very well liquidate the stock. Accordingly the money claimed by the Defendant/Plaintiff in C.S.No.405 of 2014 is negatived. However, taking into consideration of the nature of the defamations, the defamatory statements made against the defendant/Plaintiff in C.S.No.816 of 2015 and the termination has been effected in bad faith at the instance of the other competitor and the allegation of manufacture of the counterfeit Ball Valves has not been established, this court is of the view that the Defendant is certainly entitled to certain compensation for Page 77 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 loss of reputation. It is admitted case of both side that the Defendant is the major reseller of the Plaintiff's products in India. Such being the position, even suddenly casting aspirations and branding him as a counterfeiter, certainly would have caused loss to reputation as well as business. Further fact that the evidence of the D.W.1 that the turnover has completely reduced because of such communications by the plaintiff also probabalise the case of the defendant for claiming compensation. Though, Rs.50 lakhs compensation is claimed by the Defendant/Plaintiff in C.S.No.891 of 2015, this court taking into consideration of overall situation and the nature of the evidence, particularly non- denial of evidence of the D.W.1 as to the reduction of the turnover, inclined to award the Defendant a sum of Rs.10,00,000/- as damages.
53. The additional issue whether there are some defects in the goods sold by the plaintiff is concerned P.W.1 himself admitted in his evidence that since large productions there found Page 78 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 to be some defects in some of the goods. The issue has to whether the plaintiff has sold other products apart from Pressure Reducing Valves, Ball Valves and non-return valves has no relevance to the lis. Accordingly all the issues are answered.
54. In the result, C.S.No.405 of 2014 is dismissed with costs. C.S.No.891 of 2015 is decreed for a sum of Rs.10 lakhs as damages payable by the Defendant; the termination of the dealership between the Plaintiff and the Defendant on 08.07.2014 was wrongful; and also permanent injunction restraining the Plaintiff from communicating or causing to be communicated, publishing or causing to be published any defamatory allegations against the Defendant, directly or indirectly relating to manufacturing of counterfeit products of the Defendant by the Plaintiff to anyone, along with cost. Connected Applications are closed. The Defendant/Plaintiff in C.S.891 of 2015 is also entitled to market the products imported from the Plaintiff in the same name and he can liquidate the stocks.
Page 79 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 21.11.2019 Index :Yes/No Internet :Yes Speaking/Non-speaking order ggs N. SATHISH KUMAR, J. ggs common judgement in C.S.No.405 of 2014 and C.S.No.891 of 2015 Page 80 of 81 http://www.judis.nic.in C.S.No.405 of 2014 and C.S.No.891 of 2015 .11..2019 Page 81 of 81 http://www.judis.nic.in