Madhya Pradesh High Court
Radhakishan Narayandas (Partnership ... vs Manmohan Garg on 19 February, 1991
Equivalent citations: 1993(0)MPLJ909
JUDGMENT T.N. Singh, J.
1. An action for infringement of trade mark and for passing off came to be tried in the plaintiff's suit instituted in the Court of District Judge, Bhopal, on 24-10-1969. Against the judgment and decree passed on 16-3-1981 by learned District Judge, Vidisha in Civil Suit No. 19A of 1970, the instant appeal is preferred by the plaintiff on his suit being dismissed in toto.
2. Shortly put, the plaintiff's case is that the trade mark "Khargosh Chhap" label was first registered with the Sub-Registrar of Bombay on 26-1-1928 and thereafter under the Trade Marks Act, 1940, it was registered on 14-8-1945 in respect of bidis to be sold under that trade mark throughout India except Madras and Mysore. The Registration number of the label was 112689. Subsequently, the jhilli(tissue-paper wrapper) was also got registered on 2-7-1954 and it was allotted Registration No. 164797. Both registrations were duly renewed from time to time. Looking to the popularity, reputation and huge sale commanded by plaintiff's "Khargosh Chhap" bidis, the defendant started manufacturing and selling bidis using a label which was deceptively similar to and colourful imitation of plaintiff's "Khargosh Chhap" registered trade mark in respect of "design", "layout", "get-up", "colour scheme" and "setting". Defendant's "Khargosh Chhap" label was not a registered trade mark. Defendant's prejudicial activities caused the plaintiff serious loss and defendant made dishonestly unlawful gain to himself at the cost of plaintiff's business. Besides suffering loss of profit on account of defendant's wrongful action, the plaintiff also suffered loss of reputation inasmuch as customers had begun feeling and expressing that the quality of the plaintiff's bidis had deteriorated. Among other reliefs prayed, by way of nominal damage, Rs. 1,000/- was claimed and injunction was also prayed to restrain the defendant from using in any form, plaintiff's "Khargosh Chhap" label on the bidis sold by him.
3. On facts, defendant's plea was that he had started manufacturing bidis under the trade name "Bakri Ka Bachha" (goat cub) in 1950-51 and prior to him, M/s. Surajmal Suganchand, resident of Sehore, in erstwhile Bhopal State, were manufacturing the said bidi and they had got registration of the trade mark on 2-3-1936 at Sehore in Bhopal State and thereafter at Calcutta on 7-12-1936. Shah Krishnakumar Chimanlal, resident of Sironj had got assignment from them of the said trade mark and a registered document was executed in that regard on 22-12-1956. From him, the defendant got an assignment of the said trade mark in virtue of a registered deed, executed on 9-11-1957. There was a vast difference in respect of "design", "layout", "get-up", "colour scheme" and "setting" between the labels respectively of "Goat-cub" bidis sold by the defendant and "Khargosh Chhap", sold by plaintiff. The plaintiff had no cause for either an action for infringment or for passing off. Plaintiff had knowledge since before 1951, 1955 and 1957 of use of the labels in question on the bidis sold thereunder, but he took no action and his suit was, therefore, barred by acquiescence. There was no sale of plaintiff's bidis in District Vidisha and plaintiff's suit was motivated. Having noticed that the bidis manufactured and sold by defendant in Sironj Pargana of District Vidisha was gaining popularity and capturing the market, plaintiff instituted the suit for causing unlawful loss to the defendant.
4. Trial Court framed a large number of issues and parties adduced both, oral and documentary evidence in support of their respective cases. On issues Nos. 12 and 13 respectively, the Court below has recorded the finding that the defendant has not infringed plaintiff's registered trade mark and has not passed off his goods as those of the plaintiff. In regard to issue No. 10, the finding recorded is that only upper label of Ex. P/6-A was "deceptively similar to or identical with" plaintiff's trade mark "Khargosh Chhap" label in respect of design, layout, colour, scheme and setting. It has also been held in deciding issue No. 4 that "Khargosh Chhap" trade mark which the plaintiff used for bidis sold by him was his property. Significantly, it has also been held that the trade mark "Khargosh Chhap" is registered under the law and that is valid and subsisting. Therefore, the plaintiff had an exclusive right to use the trade mark. This conclusion covers issues Nos. 6 and 8. On the other hand, it is held under issue No. 9 that defendant is not manufacturing and selling bidis under the trade label of "Khargosh Chhap". In deciding issue No. 2, it is held, "plaintiff's firm deals in the manufacturing and selling of bidis on a large scale, mainly in Madhya Pradesh and some parts of Uttar Pradesh."
5. At the threshold, I am required to bear in mind the difference between an action for passing off and infringement of registered trade mark. As held by the Apex Court in Kaviraj Pandit Durga Dutt Sharma, AIR 1965 SC 980, "the action for infringement is a statutory remedy conferred on the registered properietor of a registered trade mark for the vindication of the exclusive right of the use of the trade mark in relation to those goods" as are covered thereunder. It has also been held that "when once the use by the defendant of the mark which is claimed to infringe the plaintiff's mark is shown to be in the course of trade, the question whether there has been an infringement is to be decided by comparison of two marks."
6. Realising that difficulty, in this Court, learned counsel for the defendant/respondent, has raised pleas of "prior user" and "concurrent user" and has submitted that in terms of Sections 29, 30 and 33, the Trade and Merchandise Marks Act, 1958, no action for infringement lies. For passing of action also, no case is proved as plaintiff's bidis are not sold in Vidisha.
7. What are the "rights conferred by registration" are stated in Section 28, of which sub-sections (2) and (3) are extracted below:--
"(2) The exclusive right to the use of a trade mark given under Sub-section (1), shall be subject to any conditions and limitations to which the registration is subject.
(3) Where two or more persons are registered proprietors of trade marks which are identical with or nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration of the trade marks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of permitted use) as he would have if he were the sole registered proprietor".
What constitutes an "infringement" of a trade mark is provided in Section 29(1) which is also extracted below:--
"29. Infringement of trade marks. -- (1) A registered trade mark is infringed by a person who, not being the registered proprietor of the trade mark or registered user thereof using by way of permitted use, uses in the course of trade a mark which is identical with, or deceptively similar to, the trade mark, in relation to any goods in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade mark".
Relevant portions of Section 30(1) also deserve extraction:--
"30. Acts not constituting infringement. -- (1) Notwithstanding anything contained in this Act, the following acts do not constitute an infringement of the right to the use of a registered trade mark:
... ... ...
(d) the use of a registered trade mark being one of two or more trade marks registered under this Act which are identical or nearly resemble each other, in exercise of the right to the use of that trade mark given by registration under this Act."
Reliance on Section 33 being the sheet-anchor of the defence, that is extracted in extenso:
"33. Saving for vested rights. --Nothing in this Act shall entitle the proprietor or a registered user of a registered trade mark to interfere with or restrain the use by any person of a trade mark idential with or nearly resembling it in relation to goods in relation to which that person or a predecessor in title of his has continuously used that trade mark from a date prior-
(a) to the use of the first mentioned trade mark in relation to those goods by the proprietor or a predecessor in title of his; or
(b) to the date of registration of the first mentioned trade mark in respect of those goods in the name of the proprietor or a predecessor in title of his;
Whichever is the earlier, and the Registrar shall not refuse (on such use being proved) to register the second-mentioned trade mark by reason only of the registration of the first mentioned trade mark".
However, I would also like to add that Shri R. D. Jain, learned counsel, appearing for the defendant/respondent, relied also on Sections 17 and 27, but that is apparently misconceived. Section 17 deals with the question of "disclaimer" to be decided by the tribunal when that is made in any proceedings taken in that regard. Section 27 bars a suit in regard to infringement of an "unregistered" trade mark.
8. Some other provisions of the Act are, however, to be noted. Some definition clauses of Section 2 deserve special notice. As per Clause (j), "mark"
----includes a device, brand, heading, label, ticket, name, signature, word, letter or numerical or any combination thereof. According to Sub-clause (ii) of Clause (m), the term "permitted use" in relation to a registered trade mark, means the use of a trade mark, "which complies with any conditions or restrictions to which the registration of the trade mark is subject". As per Sub-clause (ii) of Clause (v), "trade mark" means -- "in relation to the other provisions of this Act, a mark used or proposed to be used in relation to goods for the purpose of indicating or so as to indicate a connection in the course of trade between the goods and some person having the right, either as proprietor or as registered user, to use the mark whether with or without any indication of the identity of that person, and includes a certification trade mark registered as such under the provisions of Chap. VIII".
9. In view of the finding of the trial Court that defendant's label used on bidis manufactured and sold by him was in part deceptively similar and identical with the plaintiff's trade mark "Khargosh Chhap" label, I have considered it appropriate to decide first defendant's right to use offensive label or his title in that label before examining correctness of that finding. In any case, it is necessary to state immediately that there is no defect in the finding of the Court below that plaintiff's title in the trade mark "Khargosh Chhap" label has been duly established. Although plaintiff had claimed that he acquired title in virtue of assignment-deed, Ex.P/5, executed on 16-11-1930 for a consideration of Rs. 55,000/- from erstwhile owner Radhakishan Narayandas and validity of that consignment is challenged, that question is answered squarely by Sections 31 and 32 of the Act. While according to Section 31(1), "original registration of the trade mark and of all subsequent assignments and transmissions of the trade mark shall be 'prima facie' evidence of the validity thereof", according to Section 32, registration is deemed conclusive as to validity when seven years have expired from the date of original registration unless it is proved that the original registration was obtained by fraud or that the trade mark was registered in contravention of the provisions of the Act.
10. In the instant case, Exs. P/4 and P/6 establish sufficiently the title of plaintiff in the trade mark "Khargosh Chhap" label in case of bidis manufactured and sold by him. The pictorial devise comprising of a rabbit's picture inside an oval ring along with the words in Hindi "Khargosh Chhap" is the same in Exs. P/4 and P/6-A. Besides other distinctive features of the label, such as the names, in English (top) and in Hindi (bottom), Radhakishan Narayandas, appear in both labels. Only change apparently is in respect of a digit, "No. 7" (in Ex.P/6 A) which, in Ex.P/4 is "No. 5" (in both, Hindi and English). In Ex.P/6 (of which Ex.P/6-A is an annexure, to which reference is made in Ex.P/6 as photo-copy of the label trade mark registered, in respect of registered trade mark 112689, the details given are that it was registered as of 14-8-1945 in clause 34 for bidis to be sold excepting in Madras and Mysore and that it was registered in the name of Seth Bhikabhai Maganlal, trading as Seth Radhakishan Narayandas. Under the registration, no right to exclusive use of expression "No. 7" was given is also stated along with the condition that two labels (namely, the bigger rectangular label and the small strip) were to be used together. Registration of the trade mark was without limitation of colour. Reference also may be made to Exs. P/8 and P/8-A. The certificate and the annexure both were issued on 20-4-1954 in respect of the same trade mark No. 112689. Ex.P/8-A contains (unlike Ex.P/6-A) a real colour representation of the label "Khargosh Chhap". It appears to be same in all respects with the label appearing on Hindi label (proved as A/8) except that there is colour variation. That is so obviously because of relaxation obtained subsequently as per Ex.P/6, issued on 3-4-1970.
11. Defendant's documents of title are Exs. D/3, D/4, D/5 and D/18. On 2-3-1936, a deed was registered by the Sub-Registrar, Sehore which is Ex.D/5 (in Urdu) and Hindi transcript of that is proved as D/5-B. That is a mere declaration by the executant who has given his name as Bakshilal Vald Kapurchand, resident of Sehore Cantt. in Bhopal State. He stated that he has been manufacturing bidis etc. and those are sold under different names and labels, such as Bakri Chhap in the name of Surajmal Suganchand; and also Genda Chhap, Phool Chhap, Sher Chhap, Kabutar Chhap, under different names. He declared that no other manufacturer had used those labels and marks and he was owner thereof. One of the labels affixed on Ex.D/5 bears the caption 'Goat Cub' as a part of the pictorial device and a similar label (along with some other labels) is also affixed on Ex.D/4, another declaration by a different person registered at Calcutta on 7-12-1936. It is indeed contended by Shri Choubey, learned counsel, appearing for plaintiff/appellant, that the label affixed on Ex.D/4 being embossed with the seal of a patent Agent of Delhi, is an interpolation. However, it is not necessary to deal with or decide that controversy.
12. It is stated in Ex.D/4 that M/s. Kapurchand Bakshilal, carrying on business as Kirana and Bidi Merchant in Sehore District of Bhopal State were in possession of, and they claimed to be, the sole proprietors, inventors and designers of the property names and marks" -- (1) Bail Chhap; (2) Kid brand and (3) Guloo Pahalwan brand; that those were used by the said proprietors, as their distinctive marks or brands and they are their "proper marks under the provisions of the Indian Merchandise Marks Act (Act IV of 1989) and protected for their sole and exclusive use under the provisions of Sections 478 and 489, Indian Penal Code for the business carried on or to be carried on by them in any place throughout India....." The Declaration was made by Narendra Chandra Chatterjee as Agent and legal representative of M/s Acme Trading Co., Calcutta and was presented at "Calcutta Registry Office" and registration was effected there. On 22-10-1956, in favour of D. W. 8, Shah Krishnakumar Chimanlal, Ex.D/3 was executed for a consideration of Rs. 901 /- in respect of "Goat-Cub bidi label" by Surajmal and Suganchand sons of Seth Bakshilal of Sehore Cantonment for assigning to him goodwill and trade mark right excluding expressly Sehore District for continuing their own business, there. Ex.D/18 is a certificate, issued under the Act, in respect of Trade Mark No. 260782, evidencing registration in respect of "Goat Cub", made on 24-11-1969, in favour of Manmohan Guttulalji and Ghanashyam Guttulalji for sale of bidis in District Vidisha. Apparently, in respect only of a trade name "Goat Cub", the registration was made as there is no reference therein to any label or any other device or mark.
13. Evidently, only in the year 1969, for the word "Goat Cub" to be used as a trade name for bidis to be sold in Vidisha District, registration was obtained by defendant under the Act. Although defendant has proved assignment in his favour by D. W. 8 of trade mark of "Goat Cub" label of Kapurchand Bakshilal, the real question is, if at any time the said original assignors themselves had legally acquired any property right in the said label. In other words, whether unilat(sic)ral declarations made as per Exs. D/4 and D/5 could create in law valid title thereunder in respect of the trade mark label. At the relevant time when Exs. D/4 and D/5 were executed, Bhopal was not a part of "British India". It was ruled by an independent sovereign and as Sir Ivor Jennings has observed in Constitutional Laws of the Commonwealth, Vol. I, at P. 14(3rd edn.), the British made treaties with local monarchs, such as the Maharajas of the Indian States and the Sultans of Malaya, Zanzibar and the Maldive Islands and thereunder "protection" was provided to them in return for powers of interference of a limited nature. Jurisdiction in such cases, according to the learned author, was exercised by British Government as a "foreign jurisdiction" under Foreign Jurisdiction Act, 1890, enacted by the British Parliament. For transfer of power, Indian Independence Act, 1947 was enacted and therein provision was made as per Section 2(1) in regard to "territories under the sovereignty of His Majesty which immediately before the appointed day were included in British India". Prior to that, when Government of India Act, 1935 was enacted, Section 6 thereof provided surrendering under Instruments of Accession by the Native Rulers of legislative power for making laws for their territories by the Federal legislature, in respect of any matter. Under Section 64, Government of India Act, 1915, the legislature of the British India had power to make laws only for persons within British India and for subjects of the Crown within or beyond British India. (See also, in this connection, Madhav Rao Scindia's case, AIR 1971 SC 530, in regard to the sovereign character of Princely States of India before Independence).
14. In the International Law, the territorial basis of "sovereignty" is well recognised. As observed by J. L. Brierly in the Law of Nations (6th edition) at p. 162, at the basis of international law lies the notion that a State occupies a definite part of the surface of the earth, within which it normally exercises, subject to the limitations imposed by international law, jurisdiction over persons and things to the exclusion of the jurisdiction of other States." At p. 158, the learned author has referred to decision of International Court of Justice that "private rights acquired under existing law do not cease on a change of sovereignty". However, what rights were acquired under the Declaration registered on 2-3-1936 the erstwhile Bhopal State is a question of Private International Law. According to Cheshire, "The question as to what is the foreign law upon some particular matter, like other matters of which no knowledge is imputed to the judge, must be proved, as facts are proved, by appropriate evidence, i.e. by properly qualified witnesses". (Private International Law, 6th edn., p. 131). According to the learned author, no person is a "competent witness" unless he is a practising lawyer in the particular legal system in question or he follows a calling in which he must necessarily acquire a practical working knowledge of the foreign law.
15. It is a basic tenet of Jurisprudence, universally recognised, that no title or legal right in any property can be "acquired" by a person by making simply an unilateral declaration, Law specifies particular situations of fact which give rise to certain rights and duties; and title can be claimed in virtue of any right conferred by a law. (See, G.W. Paton's A Text-book of Jurisprudence, 3rd edition, p. 272). It is stated by Paton that the term "property" (in the sense of title) may be of a type which creates rights in rem and obligation which creates right in personam. The object of the right of ownership or of the subject-matter of the property, may be of various kinds as property may be either corporeal or incorporeal, (ibid, p. 455 et. seq.) Indeed, under different systems of law, different provisions are made for acquisition of title in any particular property and for defining property of different types. Some uniformity is achieved when International Conventions are signed. There exists today an International Convention of Industrial Property for the protection of industrial designs and trade marks etc., but the Convention is not a part of Domestic Law of any of the Contracting parties (see Halsbury, 4th edn., para 7).
16. In the instant case, no "competent witness" has deposed in respect of law in force at the relevant time in the erstwhile native State of Bhopal in regard to acquisition of property in trade mark of its registration. The Indian Merchandise Marks Act, 1889 (for short, I.M.M. Act) as per Section 1(2), extended only to British India. No evidence as contemplated under Section 4 of Foreign Jurisdiction Act, 1890, aforesaid, has been led in this case to establish that in regard to registration of trade marks in the territory governed by the Rule of Bhopal State foreign jurisdiction was exercised. Section 3 of the I.M.M. Act, incorporated referentially and amended simultaneously Sections 478 and 489, Indian Penal Code for defining trade mark and punishing the offence of counterfeiting. According to the said Section 478, Indian Penal Code, "a mark used for denoting that goods are the manufacture of merchandise of a particular person is called a trade mark'' and it also provided for "protection of law in any British possession or foreign State to which the provisions of Section 103, Patents Deigns and Trade Marks Act, 1883 are made applicable" "but also contemplated registration in a Register of trade marks kept under that Act".
17. The executant of the declaration Ex.D/5 not being a British subject at the relevant time, and the Act not being extended for the exercise of power and jurisdiction contemplated under Section 3, I.M.M. Act read with Section 478, Indian Penal Code to erstwhile Bhopal State, there is no basis at all for holding that the defendant or for that matter, his two predecessors-in-interest, had in any manner acquired any legal title in the trade mark claimed in respect of "Goat Cub" label. Indeed, no evidence has come on record that bidis under that label were ever manufactured or sold in British India or that the trade mark in respect of the label was registered in the register kept as per provision of Section 478, Indian Penal Code. Even if the declarations, Exs. D/4 and D/5 are read conjointly, the result is nothing, but zero. So, if nothing was "acquired", nothing could be "assigned". Indeed, there is no evidence or pleading of any act done or any right acquired under the subsequent Trade Marks Act, 1940. There can evidently be no scope of Common Law concept of trade mark to be treated as law in force in erstwhile Bhopal State. So far as British India is concerned, there being no evidence of acquisition in the said territory of goodwill by defendant's predecessors-in-interest "in relation to goods and services" by actual use of the label in relation to the bidis they manufactured (as no sale or manufacture in India of any bidis by them is proved), otherwise too the defendant apparently had no pre-existing right or title in the "Goat Cub" label as a trade mark for use in connection with sale of his bidis (Halsbury, ibid, para 171). It is not possible to hold, therefore, that the defendant had any property right in that label and if they had any lawful claim that extended only to his registration in 1969 in respect of the word "Goat Cub" for use as a trade name for his bidis, as per Ex.D/18.
18. In Ex.D/5-A, copy of the assignment-deed, executed by D. W. 8 on 9-11 -1967 in defendant's favour, the fact stated is that Guttulal (defendant's father) was manufacturing and selling in Sironj for last 7/8 years bidis with "Goat Cub" label. In respect of that label, registration was obtained at Calcutta and from the registered owner, the executant had got assignment and that his application for registration of the assignment was pending disposal in "Bombay Registration Office". Under the said deed, he purported to assign his rights to Guttulal for Rs. 500/- in respect of the said trade mark and bound himself to get the registration mutated in Guttulal's name if his application was allowed. But, no records of Bombay Trade Mark Registry are proved in regard to that application or order, if any, passed under Section 35, Trade Marks Act, 1940, on that; Sub-section (2) thereof expressly prohibits "proof of the title to a trade mark" in respect of which assignment has not been duly registered.
19. On the other hand, from Ex.D/7 and Ex.P/16, it appears that for the first time in 1964, by application No. 213583, steps were taken by defendant for registration of the trade mark "with the device of hare" for his bidis; that was, it appears from Ex.D/6, advertised in Trade Mark Journal dated 16-9-1967 and plaintiff filed affidavit on 10-11-1967 claiming prior registration of the device alleging, at the same time, that there were several unsuccessful attempts "to imitate KHARGOSH (112689) trade mark of the opponent". In his affidavit dated 30-1-1964, (Ex.P/16), defendant averred that the trade mark label "Goat Cub/KHARGOSH" was conceived by his firm in 1952 and his bidis were sold under that trade mark. Because of the opposition, the defendant filed another affidavit (Ex.P/17) on 31-12-1968. As per Ex.P/15-A, plaintiffs opposition was allowed eventually on 16-10-1969 and defendant's application was treated as withdrawn. On subsequent application No. 260873 for the same label, defendant's prayer for registration was refused on 21-8-1974 as per order, Ex.P/37. Under that order, defendant's reliance on invalid assignment of "unregistered trade mark" was rejected.
20. On the evidence adduced in this case, as discussed above, no case for "concurrent user" under Section 30(1)(d) is made out. The provision envisages a contest between "two or more trade marks registered under the Act" as a prior condition for claiming defence contemplated thereunder. It is only on the basis of that concurrent "exercise of the right to the use of that trade mark" which is "identical (to) or nearly resemble" the other (whose infringement is complained) that a lawful defence may be set up. Evidently, the provision is meant to protect an honest concurrent user only; that use must be in the bona fide and lawful exercise of an existing legal right. The defence does not extend to a mere pretence or a cunning design. D. W. 9, Ratanlal, has deposed that "Manmohan, defendant sells his Goat-Cup bidis as KHARGOSH Chhap". Thus, even if the calendar (Ex.P/33) and advertisement in Lions Club Journal (Ex.P/29) are excluded from consideration for want of proper proof as contended, the evidence of D. W. 9, who had been selling for several years bidis manufactured by defendant, establishes clearly and categorically defendant's dishonest intention. Additionally, defendant's conduct of applying repeatedly (albeit unsuccessfully) for registration of label "Goat-Cub/KHARGOSH" is also a vocal pointer to his dishonest design.
21. Coming now to the defence based on Section 33, the scope and purport of the provision has to be first examined. It deals obviously with the right of the "prior user" to resist any opposition by a proprietor of a registered trade mark to registration of another "identical or nearly resembling trade mark". That apart, defence thereunder, can be claimed only when continuous prior user in valid assertion of a "title" is proved. The object of the provision, as the Section-heading indicates, is to protect "vested rights". Importantly, however, benefit of the provision cannot be invoked in a case when the prior use is not prior to the date of registration of the first (competing) trade mark. Due emphasis must be attached to the expression "whichever is earlier" which controls both clauses (a) and (b) of Sub-section (1) of Section 33. In the instant case, plaintiff's trade mark was duly registered in 1945 and defendant's claim of prior use relates back to 1952 only. Indeed, legally, there can be no scope for any prior use of "Goat Cub" label in Sironj (which was territorially included in pre-independence era in the Princely State of Tonk) being considered under Section 33; and factually, that has not even been proved. Stereotype, oral, omnibus evidence of P. W.s 1 to 9 must be discarded as that is categorically contradicted by defendant's own documentary admission (in Exts.P/16 and P/17) of the "Goat-Cub/KHARGOSH" mark being "conceived" or "used" by him since 1952 only. See, in this connection London Rubber Co.'s case, AIR 1963 SC 1882 wherein provision of Section 10(2), Trade Marks Act, 1940 contemplating registration for "honest concurrent use" was construed; their Lordships observed that the same has to be read as an exception to the general prohibitory provision of Section 8(a) in respect of "deception or confusion".
22. To the main question, I revert now. Whether defendant is liable for infringement of plaintiff's trade mark and any relief can be granted to the plaintiff in respect of the infringement? One basic contention of Shri Jain raised in that connection is related to Section 28 and that has to be disposed of first. His argument essentially is that Section 29(1) is subject to Section 28(2) and the plaintiff must first establish his "exclusive right" in the manner contemplated under Section 28(2) before his complaint against infringement can be enquired and defendant's liability for that is enforced. It is difficult to accept that proposition because both provisions are independent and mutually exclusive. Section 28 read as a whole makes that position clear : Sub-section (1) is the main enactment and that specifies the twin rights of proprietor of registered trade mark, namely, the right of exclusive user of the registered trade mark and the right "to obtain relief in respect of infringement of the trade mark in the manner provided by (the) Act". Sub-sections (2) and (3) are not exceptions curtailing the right to obtain relief but are explanations dealing with the scope of the right of exclusive user under the different specified circumstances. The right of exclusive use of a registered trade mark by its proprietor is limited by Sub-section (2) to the precise bounds of the registration. On the other hand, Sub-section (3) defines the scope of contest inter se between proprietors of registered trade marks (as is indicated by the expression, "merely by registration") and also vis-a-vis any other user, such as, user of an unregistered trade mark which is "identical with or resembles" the trade mark registered in the name of any of them.
23. Accordingly, I find no substance in Shri Jain's contention that because plaintiff is not using the strip which is registered along with the label he cannot obtain any relief against defendant under Section 29. The right to obtain relief has to be determined in accordance with the provisions of Section 29 because Section 28(1) itself contemplates that by using the words "in the manner provided by the Act", including obviously Section 29. If in terms of Section 29 the plaintiff makes out a case for relief by satisfying the requirement thereof, he cannot be non-suited. Defendant's liability under Section 29 is established when following conditions are satisfied:--
(a) He is not the registered proprietor of the trade mark of whose infringement is complained.
(b) If he is a "registered user" (as per Section 48) of the trade mark, when he has failed to comply with any condition or restriction imposed on him as a registered user and has thereby transgressed the "permitted use" defined in Section 2(m)(ii).
(c) He uses any "mark" (as defined in Section 2(j)) in the course of his trade.
(d) The "mark" used by him is "identical with or deceptively similar to" the trade mark which is registered.
(e) The offensive "mark" and the registered trade marks are used in relation to" the same class of goods.
(f) The "mark" is so used that it is "likely to be taken as being used as a trade mark".
24. It bears reiteration that the gist of an action of infringement, as held in Kaviraj Pandit Durga Dutt Sarma's case (supra) is comparison of two marks, of plaintiff and defendant. Shri Jain relied, however, on the decision in Registrar, Trade Marks v. Ashok Chandra. AIR 1955 SC 558. to support his contention. That decision does not deal with an action for infringement; Registrar's order of "disclaimer" passed under Section 13. Trade Marks Act, 1940 was challenged. Counsel's categorical reliance on observations at paras 8 and 9 of the report, are of no assistance in construing Sections 28 and 29 of the present Act. "The avowed purpose of the Section", their Lordships observed, "is not to confer any benefit on the rival traders or the general public but to define the rights of the proprietor under the registration". When disclaimer in respect of any part of the registered trade mark is allowed it affects the right of the proprietor to the exclusive use of the part in virtue of the registration. Even if the analogy of "disclaimer" is applied, non-user by the plaintiff of the small strip which had to be used along with the bigger "KHARGOSH CHHAP" label, did not result in plaintiff's losing any right to the exclusive use of that bigger label. In other words, that label did not cease to be a part of the registered trade mark (112689) and the plaintiff did not cease to be the proprietor of that trade-mark, as defined in Section 2(v)(ii). Evidently, the label did not cease to be a "mark" (as defined in Section 2(j)) : it was "used in relation to" bidis which the plaintiff manufactured and sold and it established a "connection in the course of trade" between the plaintiff and the bidis.
25. On the material test of "comparison" there is a serious contest. The trial Court has recorded a defective finding which is untenable, both factually and legally. When comparison of plaintiff's label (Ex.P/6A) with defendant's (Ex.P/19) was undertaken there was no scope for expressing any opinion in respect to "lower" label (the strip) of Ex.P/6A with Ex.P/19. Evidently, therefore, the finding that only in respect of the "upper label" of plaintiff's trade mark, defendant's Goat Cub mark was "deceptively similar", was not warranted. Comparison was called for in respect of the "upper label" only. Admittedly the strip of the "lower label" was not used by the plaintiff. The real and proper test is one of "overall similarity", as held in Amritdhara's case. AIR 1963 SC 449, proceeding on the basis of cause and effect principle. If in the minds of the consumers concerned confusion is created as a result of deception practised, the test is ex hypothesi satisfied. The offensive "similarity" can. therefore, be phonetic also; use of "Lakshandhara" label was held deceptively similar to "Amritdhara". The same view was also expressed in Com Products case. AIR 1960 SC 142. by referring expressly to "overall structural and phonetic similarity" while stressing the need to approach the matter "from the point of view of a man of averge intelligence and imperfect recollection''. An English decision. Berlei Ltd. v. Bali Brassaiere, (1969) 2 All E. R. 812, illustrates also the same principle.
26. Implicit reliance of Shri Choubey on the decision in Ruston and Hornsby's case. AIR 1970 SC 1649 is fully justified. While pointing out with great precision the distinction between an infringement action and passing off action, their Lordships stressed the primacy of the "comparison" test as the only issue to be decided in the infringement action. In a passing off action only (and not necessarily in infringement action) it is necessary to be decided that as a result of defendant's deceptive action of marking his goods in a designed or calculated manner the purchasers believe that they are plaintiff's goods. Use of the words ('mark') "Rustam India" -- by the defendant was held infringement of plaintiff/appellant's trade mark "Ruston" on the footing that plaintiff's statutory right contemplated under Section 21. Trade Marks Act 1940. was in terms violated. In Park Products. AIR 1972 SC 1359. the appeal was also allowed in an infringement action. The "comparison" test expounded in Kaviraj Durga Dutt's case (supra) was approved categorically by referring to the dictum "....(when) the Court reaches the conclusion that there is an imitation, no further evidence is required to establish that the plaintiff's rights are violated." Trade marks were registered by the plaintiff in respect of wrappers in which biscuits were packed for sale on which words respectively. "Gluco" and "Parle's Gluco Biscuits" were printed. High Court compared the two wrappers minutely saying that in plaintiff's wrapper the lady was shown with a pot in her hand while in defendant's wrapper the lady carried a hay- bundle on her head. Rejecting High Court's conclusion, their Lordships held that ''broad and essential features of the two are to be considered".
27. In the instant case. I have no difficulty in upholding trial Court's finding and conclusion that visual comparison itself established "deceptive similarity" of defendant's label Ex.P/19 with plaintiffs Ex.P/6A. There is a great deal of similarity between the two pictures although defendant's case is that the animal shown in his picture is a "goat-cub" (or kid) and that in the label also that word is used. Significantly, taint of deception attaches mainly to the use of that word; it is written in English script (and in very small letters) which the general consumers of bidis from the rural areas, who are mostly illiterate, cannot read. In both labels the animal is shown in a squatting position and in plaintiff's label in Hindi (Deonagri script) the words "Khargosh Chhap" are used; there is hardly any remarkable feature distinguishing the animal shown in defendant's label from one shown in plaintiff's label. Not only has PW 9 Ratanlal as earlier noted, deposed to plaintiff's selling his bidis as "Khargosh Chhap" despite describing it as "Goat-Cub" there is plaintiff's own admission in writing in Exts. P/16 and P/17 to indicate that the picture was meant to be of KHARGOSH (hare/rabbit) and he was selling bidis using "Goat-Cu-b/KHARGOSH" mark.
28. For all the reasons aforesaid, on facts and also in law. I am constrained to hold, by applying both audio and visual tests of comparison, that plaintiff has established infringement of his registered trade mark (No. 112689) by the defendant on account of deceptive similarity between the mark used by the latter and plaintiff's registered trade mark. Accordingly, I hold that plaintiff is entitled to the relief claimed in that regard and that his suit has been wrongly dismissed. The decision in Imperial Tobacco Co. v. Mullaji Jamauluddin, AIR 1937 Nag. 158, is by a learned Single Judge on which Shri Jain had placed implicit reliance to contend that invariably in all cases in infringement action actual deception must be proved. However, that decision was rendered without keeping in view any particular statutory provision as is apparent from the fact that none is referred to in the judgment. In any case, I am bound by the law laid down by the Supreme Court. Mohanlal Harprasad, 1962 MPLJ 792 = AIR 1962 MP 297, is another decision of a learned Single Judge of this Court. cited by Shri Jain, but in that case, the lis related to grant of a temporary injunction only. Manoj Plastic's case, AIR 1984 Delhi 441. and P. M. Dissels case, AIR 1988 Delhi 282. are also similar cases of temporary injunction. Victory Transport Co.'s case, AIR 1981 All. 421. deals with a passing off action. Bajaj Electricals' case. AIR 1988 Bom. 167, deals too with passing off action. These decisions, therefore, are of no assistance to defendant/respondent.
29. As stated in Halsbury (supra, ibid, para 160). "it is essential in a passing off action that the defendant's activities cause substantial damage to plaintiff's business or goodwill, or are likely to do so if continued". In the instant case, I am inclined to accept the evidence of witnesses examined by the defendant deposing that in Sironj proper or even in Vidisha District there was no sale of plaintiff's bidis and defendant's bidis were sold as "Khargosh Chhap". Plaintiff has not discharged his burden to establish that he has actually suffered or is likely to suffer any substantial damage by defendant's activities. Plaintiff's alternative action, for passing off. cannot be decreed for his failure to prove actual or potential loss of business or goodwil in Sironj or in the district of Vidisha as a whole. Indeed, it has not even been proved that the defendant is selling his bidis outside Vidisha District. True, plaintiff has proved income-tax assessment orders (Exts. P/13 and P/14) for Assessment Years 1966-67 and 1968-69 showing annual sales of Rs. 31 lakh and Rs. 42 lakh respectively, but positive evidence of sale in Vidisha is lacking. In any case, in both classes of actions the same types of reliefs can be given, such as. declaration, injunction, damages etc. (Halsbury, supra, ibid, para 261). Plaintiff has sought, along with injunction and damages, order for accounts also in the instant case. Having found that the plaintiff failed to prove sale of his bidis in Vidisha District or that was affected adversely, he cannot be granted that relief.
30. It is a fit case, however, to grant permanent injunction to the plaintiff having regard to persistent attempts unsuccessfully made in the past by the defendant to seek registration of "Goat-Cub/Khargosh" label in order to prevent continuing insidious infringement by him of plaintiff's valid and subsisting registered trade-mark. He is also entitled to nominal damages. Accordingly, the suit is decreed for Rs. 100/ - against the defendant as damages payable to plaintiff for infringement of his registered trade mark. The defendant/respondent is also restrained permanently from selling or advertising for sale, himself and through his agents and servants, bidis using the lavel Ext. P/19 and/or any other device or mark resembling or identical to appellant's registered trade mark, "Khargosh Chhap". No. 112689. He shall deliver within one month to the plaintiff/appellant all printed materials in his possession including the offensive labels, price-lists, invoices and cash-memos etc. displaying the said label and/or any other mark or device of that nature. Costs of this appeal and of the suit are also decreed against the defendant.