Gujarat High Court
Mahesh Viraram Trivedi vs Mayank Jayantilal Thakkar on 22 December, 2022
Author: A. P. Thaker
Bench: A. P. Thaker
C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/APPEAL FROM ORDER NO. 152 of 2019
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2019
In R/APPEAL FROM ORDER NO. 152 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE DR. JUSTICE A. P. THAKER
==========================================================
1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy No
of the judgment ?
4 Whether this case involves a substantial question No
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
==========================================================
MAHESH VIRARAM TRIVEDI
Versus
MAYANK JAYANTILAL THAKKAR
==========================================================
Appearance:
MR HARSHIT S TOLIA(2708) for the Appellant(s) No. 1,2,3
MR TEJAS S TRIVEDI(5692) for the Appellant(s) No. 1
MS. POOJA ACHARYA, ADVOCATE WITH DR RAJESH H ACHARYA(2233)
for the Respondent(s) No. 1
==========================================================
CORAM:HONOURABLE DR. JUSTICE A. P. THAKER
Date : 22/12/2022
CAV JUDGMENT
1. Being aggrieved and dissatisfied with the order dated 6.5.2019 passed by learned Judge, City Civil Court, Page 1 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 Ahmedabad below Exh-6 and 7 filed in Regular Civil Suit No. 262 of 2015 whereby the defendants have been restrained from using the Trade Mark "RAJSHSHREE", "SHEETAL" and "MAYUR" during the pendency of the Suit, the original defendants have preferred this Appeal from Order under Order 43 Rule 1(r) of the CPC.
2. The appellants are the original defendants and respondent is the plaintiff before the trial Court. For the brevity and convenience, the parties are referred to in this order as per the character assigned to them before the trial Court.
3. The brief facts of the case is that the plaintiff has filed the Suit for declaration, Permanent and perpetual injunction for passing off action of Trade Mark against the defendants. Along with the plaint, the plaintiff has moved the application for interim injunction at Exh-6 and 7 before the trial Court. It is the case of the plaintiff that the plaintiff is a sole proprietorship concern engaged in the business of manufacturing, marketing and selling of Pepsi, Sharbat, juice and cold-drinks since long as household business i.e. very small scale since 1995-96 by adopting brand/ Page 2 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 trademark SHEETAL. That thereafter in the year 2000, the plaintiff adopted and started two other brands/ trademarks RAJSHREE and MAYUR for the same business. According to the plaintiff, he is the true owner of the said Trademark SHEETAL, MAYUR and RAJSHREE and is using the same continuously, exclusively and uninterruptedly since then. 3.1 That the defendant No.1 is proprietorship of defendant No.3 and husband of defendant No.2 and defendant No.2 is also carrying on business of Pep cee with the trademark SHEETAL PEPCEE and MAYUR PEPSY, which is identical and deceptively similar to the plaintiff's trademark. That the defendant No.3 is the proprietor concern. 3.2 It is also the case of the plaintiff that the plaintiff is the first adopter and first user of the said trademarks since the year 1996. That on 7.3.2000, the plaintiff has applied for registration of Trademarks RAJSHREE, SHEETAL and MAYUR in Class 30 and 32 and the said application is pending. That the plaintiff has developed the said artwork of the device of girl with a candy in hand for the plaintiff Page 3 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 products since its use. It is also contended that due to bonafide mistake and oversight, the user date was mentioned as 31.3.1998 for the trademark instead of 1996. It is also revealed that by virtue of prior honest adoption, long continuous and uninterrupted use of the Trademarks RAJSHREE, SHEETAL and MAYUR, it was identified and associated with plaintiff firm and is synonymous with the plaintiff's service and goods.
3.3 It is the case of the plaintiff that the defendant No.1 was previously working with the plaintiff as one of the employees for almost more than 12 years . That along with the said business, the plaintiff has expanded a new business for courier services and the plaintiff was unable to give personal attention in the said business and, therefore, the plaintiff gave the said business along with the premises on rent to defendant No.1 as per rent/ royalty agreements. That initially when the business was given on rent to the defendants, the defendants used to pay royalty to the plaintiff. But now, the defendants have started the same business with the identical marks.
Page 4 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 3.4 It is contended that the plaintiff received a legal notice dated 13.11.2014 from the defendants only for the trademark RAJSHREE. That the plaintiff has also received letter dated 14.11.2014 from defendant No.1 stating that they have filed an application for the said trademark before the trademark Registry claiming the user dated from 2011. It is the case of the plaintiff that the business was only given on rent to run the factory to the defendants, but, the defendants with a malafide intention started using the said trademark and applied for the registration without the permission of the plaintiff. That thereafter, the plaintiff contacted the defendants and after talks of settlement, it was agreed by the defendants that they will not use the trademark RAJSHREE, SHEETAL and MAYUR. According to the plaintiff, despite the said assurance, the defendants have recently given an advertisement in the local newspaper having circular within territorial limit of Ahmedabad City for appointing the dealers and distributors for the trademark SHEETAL, RAJSHREE and MAYUR. It is the case of the plaintiff that the defendants are, therefore, guilty of violating statutory right of the plaintiff and Page 5 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 causing infringement of the trademark of the plaintiff. That the use of the words RAJSHREE, SHEETAL and MAYUR by the defendants is likely to cause confusion and deception in the course of trade and plaintiff's wide reputation would be seriously injured and thus the defendants are also guilty of passing off by using trademark of the plaintiff. 3.5 On the aforesaid averments, the appellant- original defendants have preferred this Appeal against the order dated 6.5.2019 passed by the learned City Civil Court, Ahmedabad below Exhs-6 and 7 filed in Regular Civil Suit No. 262 of 2015, whereby the defendants have been restrained from using the Trade Mark "RAJSHSHREE", "SHEETAL" and "MAYUR" during the pendency of the Suit.
4. The defendants have resisted the Suit and application for interim injunction and denied the contention of the plaintiff in toto of his having ownership of the three trademarks. That according to the defendants, the City Civil Court, Ahmedabad has no territorial jurisdiction to try and entertain the suit. The defendants have also raised the Page 6 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 issue of mis-joinder and non-joinder of the parties and the issue that the plaintiffs have suppressed the material facts. It is contended that all the sale invoices of the plaintiffs are created/ prepared by the plaintiff to obtain restraining order from the Court. It is contended that the so-called advertisement at Mark-4/10 was not circulated by the defendants, but it was published by the plaintiff to create jurisdiction of the Court. It is also contended that the plaintiff is well aware about the adoption and use of the mark RAJSHREE atleast from the year 2011 whereas the plaintiff has filed the present Suit in the year 2015. It is the contention of the defendants that, therefore, the suit is required to be dismissed. on the ground of delay, laches and acquiescence on the part of the plaintiff. It is also contended that the plaintiff has filed the Suit only because of business rivalry and jealousy as the defendants have already established higher reputation and good-will in the market for the products and the plaintiffs have failed to maintain quality. It is also contended that the plaintiffs have failed to make prima-facie case of passing off and all ingredients i.e. existence of reputation/ good-will, mis- Page 7 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 representation and damages. It is also contended that the Suit and application for interim injunction are devoid of merits and the same are liable to be dismissed. 4.1 The defendants have also contended that both the parties are not residing at Ahmedabad and they are carrying on business in Banaskantha District and not in Ahmedabad. It is also contended that the defendants are running a small business at Kankrej, District: Banaskantha only and, therefore, the Civil Court at Ahmedabad has no territorial jurisdiction to entertain the Suit. It is also contended that the actual sale of goods was necessary to be proved in the case of passing off action and, therefore, the Court within whose jurisdiction the commercial sale of goods took place, had jurisdiction to entertain a suit for passing off. According to the defendants, in view of the provisions under Section 20 of Code of Civil Procedure, Civil Court, Ahmedabad has no jurisdiction.
4.2 The defendants have admitted regarding its business as averred by the plaintiff. However, it has denied the allegation of plaintiff regarding the use of trademark Page 8 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 SHEETAL PEPCEE and MAYUR PEPSY as identical and deceptively similar to the plaintiff's trademark. It has also denied that the plaintiff is a prior user of the said trademark and that the plaintiff is exclusive owner and proprietor of the trademark. It has denied that by adoption and use of such identical and / or deceptively similar trademark, the defendants are deliberately cheating the public at large by passing off their goods as that of the plaintiff. It has prayed to dismiss the application.
5. On the basis of the pleadings of the parties and after hearing both the sides, the learned trial Court has passed interim injunction against the appellants-defendants. It appears that the trial Court has stayed its own order. Against the said order, the defendants has preferred this Appeal from Order wherein initially the interim order staying the impugned order of the trial Court has been passed, which is ordered to be continued till further orders.
6. Heard Mr. H.S. Tolia, learned advocate with Mr. Tejas Trivedi, learned advocate for the appellants-defendants and Ms. Pooja Acharya, learned advocate with Dr. Rajesh Page 9 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 Acharya, learned advocate for respondent-plaintiff at length. Perused the material placed on record and the decisions cited at bar.
7. Mr. H.S. Tolia, learned advocate for the appellants has vehemently submitted that the trial Court has failed to consider the issue of territorial jurisdiction. He has submitted that both the parties reside in Banaskantha District and carrying on business there. He has submitted that neither party has any business in Ahmedabad. Mr. Tolia has submitted that merely because advertisement has been issued, that fact does not give any territorial jurisdiction to the City Civil Court, Ahmedabad.
7.1 He has submitted that there is no evidence as to the Registration of alleged trademarks RAJSHREE, SHEETAL and MAYUR. He has submitted that as per the version of the plaintiff, it has sold his business in the year 2011 and shifted to Bhuj. Mr. Tolia has submitted that the defendants are independently doing the business since 2011 with the said trademark. He has submitted that the plaintiff has not produced any order or bill during the Page 10 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 period from 2015 to 2019. He has submitted that according to the plaintiff, the business was rented to the defendants, but, no such agreement was made with the plaintiff as alleged. Mr. Tolia has also submitted that the trial Court has not considered the settled principles of law that in a action of passing off, the plaintiff has to prove its continuous prior user. According to him, for a passing off action, the plaintiff has to establish good-will or reputation attached with the goods, which he supplies in the minds of the public and to demonstrate that the defendant has made mis- representation and according to which it is going to affect the on-going business. He has also submitted that three ingredients must be established by the plaintiff in a Suit for passing off action. He has submitted that the learned trial Court has not considered this aspect and has passed the impugned order, which, is not sustainable in the eyes of law.
7.2 Mr. Tolia, learned advocate has also submitted that the plaintiff is not doing business in PEPSI COLA. He has also submitted that legal notice was issued by the defendants Page 11 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 to the plaintiff which has not been replied by the plaintiff. He has also submitted that the agreement upon which the reliance has been placed by the plaintiff, is a simple agreement and it is not a true-copy. He has also submitted that during the pendency of the Suit, Notice of inspection was issued to the plaintiff but it was not allowed and, therefore, adverse inference could have been drawn against the plaintiff. He has vehemently submitted that the points raised by the defendants regarding the forgery of the agreement as produced by the plaintiff, is not discussed by the trial Court.
7.3 Mr. Tolia, learned advocate has also submitted that in absence of the basic ingredients which are required in an action of passing off, no interim injunction could be granted in favour of the plaintiff. He has also submitted that when the plaintiff was not doing any business since 2011, and the defendant was doing the business since 2011, with the said trade-mark, there is no continuous user by the plaintiff, the alleged trade-mark and even the plaintiff could not establish the good-will and, therefore, Page 12 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 the impugned order of the trial Court granting interim injunction needs to be set-aside.
7.4 Mr. Tolia has also submitted that even the defendant has purchased raw materials and remaining stock of products from the plaintiff and started his own business under the same trade-mark, as per bills which are produced with paper-book from page Nos. 155 to 158, which suggest that the plaintiff actively acquiesced the defendant to use the trade-mark in question since 2011. Mr. Tolia has also referred to the two agreements produced in the matter at Page No. 187 to 192 and has submitted that the second agreement is forged one, as both the stamp papers cannot contain the same Serial Number. He has also submitted that defendant has never paid any royalty/ good-will to the plaintiff as the plaintiff has never demanded it. He has also submitted that the defendant has vacated the rented premises with machinery belonging to plaintiff in the year 2014 and on 13.11.2014 issued legal notice, claiming exclusive right over the trademark and calling upon the plaintiff not to pursue trademark application before the Page 13 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 trademark Registry, which has not been replied by the plaintiff. He has prayed to allow the present appeal and to set-aside the impugned order of the trial Court. He has relied upon the following decisions in support of his submission:
1. Ramdev Food Products Ltd. v. Arvindbhai Rambhai Patel, reported in 2006 (8) SCC 726;
"90. In Kerly's Law of Trade Marks and Trade Names' Supplement pages 42 and 43, paragraph 16-02, the concept of passing off is stated as under:
"The law of passing-off can be summarised in one short general proposition no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number.
Firstly, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying 'get-up' (whether it consists simply of a brand name or a trade descrip- tion,or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services.
Page 14 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 Secondly, he must demonstrate a
misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to belief that the goods or services offered by him are the goods or services of the plaintiff.
Thirdly, he must demonstrate that he suffers or, in a quick time action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or service is the same as the source of those offered by the plaintiff..."
Passing Off - Infringement
91. Although, the defendant may not be using the actual trade mark of the plaintiff, the get up of the defendant's goods may be so much like the plaintiff's that a clear case of passing off could be proved. It is also possible that the defendant may be using the plaintiff's mark, the get up of the defendant's goods may be so different from the get up of the plaintiff's goods and the prices also may be so different that there would be no probability of deception of the public. However, in an infringement action, an injunction would be issued if it is proved that the defendant is improperly using the plaintiff's mark. In an action for infringement where the defendant's trade mark is identical with the plaintiff's mark, the Court will not enquire whether the infringement is such as is likely to deceive or cause confusion. The test, therefore, is as to likelihood of confusion or deception arising from similarity of marks is the same both in Page 15 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 infringement and passing off actions. [ See Ruston & Hornsby Ltd. v. The Zamindara Engineering Co., (1969) 2 SCC 727] "107. Kerr in his "Treatise on the Law and Practice of Injunction", Sixth Edition at pages 360-361 states as under:
"Mere delay after knowledge of the infringement to take proceedings, not sufficient to call the Statute of Limitations into operation, or where the infringement continues, is not, it seems, a bar to the right of an injunction at the trial. Lapse of time unaccompanied by anything else is, it seems, no more a bar to a suit for an injunction in aid of the legal right than it is to an action deceit.
But delay may cause the Court to refuse an interlocutory injunction, especially if the defendant has built up a trade in which he has notoriously used the mark"
108. Specific knowledge on the part of the plaintiff and prejudice suffered by the defendant is also a relevant factor."
2. Wander Ltd. v. Antox India P. Ltd., reported in 1990 supp SCC 727:
"5. Usually, the prayer for grant of an interlocutory injunction is at a stage when the existence of the legal right asserted by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. The court, at Page 16 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 this stage, acts on certain well settled principles of administration of this form of interlocutory remedy which is both temporary and discretionary. The object of the interlocutory injucntion, it is stated "...is to protect the plaintiff against injury by violation of his rights for which he could not adequately be compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where the "balance of convenience lies".
The interlocutory remedy is intended to preserve in status quo, the rights of parties which may appear on a prima facie. The court also, in restraining a defendant from exercising what he considers his legal right but what the plaintiff would like to be prevented, puts into the scales, as a relevant consideration whether the defendant has yet to commence his enterprise or whether he has already been doing so in which latter case considerations somewhat different from those that apply to a case where the defendant is yet to commence his enterprise, are attracted."
3. Khoday Distilleries Ltd. v. Scotch Whisky Association, reported in 2008 (10) SCC 723:
Page 17 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022
C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 "43. The principles of waiver and acquiescence in a case of this nature are applicable. Apart from the ordinary rule of waiver of a right expressly provided for in a case of passing off, the court has consistently been noticing development of law in this field. The principles in that behalf were laid down by way of provender in Scotch Whiskey Association and another v. Pravara Sahakar Shakar Karkhana Ltd."
"47. The question again came up for consideration before this Court in Ramdev Food Products (P) Ltd. v. Arvindbhai Rambhai Patel and others, [ (2006) 8 SCC 726] wherein it was held :-
103. Acquiescence is a facet of delay. The principle of acquiescence would apply where: (i) sitting by or allowing another to invade the rights and spending money on it; (ii) it is a course of conduct inconsistent with the claim for exclusive rights for trade mark, trade name, etc.µ The delay by itself, however, may not be necessarily a ground for refusing to issue injunction. It was opined :-
106. The defence of acquiescence, thus, would be satisfied when the plaintiff assents to or lays by in relation to the acts of another person and in view of that assent or laying by and consequent acts it would be unjust in all the circumstances to grant the specific relief.µ It was furthermore observed :-
108. Specific knowledge on the part of the plaintiff and prejudice suffered by the defendant is also a relevant factor.Page 18 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022
C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022
48. In Halsburys Laws of England, Fourth Edition, Vol. 16, para 1505, it is stated:
"1505. Estoppel by matter in pais - Where a person has by words or conduct made to another a clear unequivocal representation of fact, either with knowledge of its falsehood or with the intention that it should be acted upon, or has so conducted himself that another would, as a reasonable man, understand that a certain representation of fact was intended to be acted on, and that the other has acted on the representation and thereby altered his position to his prejudice an estoppel arises against the party who made the representation, and he is not allowed to aver that the fact is otherwise than he represented it to be.µ
49. Delay would be a valid defence where it has caused a change in the subject matter and action or brought about a situation in which justice cannot be done."
"61. A passing off action may be brought by one or more of these traders to protect the goodwill in the name.µ A passing off action may be brought by those who fulfill the following requirements:
(i) the claimant himself owns or has a sufficient proprietary interest in the requisite goodwill, and
(ii) the goodwill so owned must be the goodwill which is really likely to be damaged by the alleged misrepresentations."
4. Order of the Co-ordinate Bench passed AO No.27/2019 dated 29.1.2019 in the case of Stillman Page 19 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 Fashion v. Still All Male.
5. Order of the Coordinate Bench dated 20.7.2011 passed in AO No. 251/2008 in the case of Cadila Healthcare Ltd. v. Biochem Pharmaceutical Industries.
6. M/s. KRBL Ltd. v. Lal Mahal Ltd, reported in 2015 SCC OnLine Del 13793;
"16. The cases of passing off are on a different footing from the cases of infringement of registered trademarks. In a case of a registered trademark, the proprietor apart from common law rights also possesses statutory rights granted by the statute. On the other hand in the case of passing off of an unregistered trade mark/label the proprietor only possesses common law rights. Where common law rights are concerned, equity has a greater role to play. Therefore, in the case of an unregistered trade mark/label delay and laches on the part of the appellant in bringing an action would assume greater importance. In case the court is of the view that the delay in bringing an action is not substantial or is sufficiently explained, the court may still in the facts and circumstances grant an injunction but where the delay in bring an action is substantial and is not sufficiently explained the court is empowered to refuse to restrain the defendant.
7. Allied Blenders & Distillers Pvt. Ltd v. Prag Distillery Pvt. Ltd. & Another, reported in 2017 LawSuit (Del) Page 20 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 808;
"12. It must be clarified that the considerations with regard to territorial jurisdiction in the context of Order VII Rule 10 of the Code are entirely different from those in an application under Order XXXIX Rules 1 & 2 of the Code or when a finding is to be returned on the issue of territorial jurisdiction. Under Order VII Rule 10 of the Code, only the averments in the plaint are to be seen and that, too, on the assumption that they are correct. While considering an application under Order XXXIX Rules 1 & 2 of the Code, not only the averments in the plaint but also other material including the defendant‟s reply and writtens reply and written statement are to be seen. For establishing the existence of a prime facie case (a condition precedent for an ad interim injunction order), the plaintiff would obviously have to demonstrate, albeit at a prima facie level, that the apprehension was reasonable and credible. Here, a mere averment in the plaint would not do. And, the assumption that the averments in the plaint are correct would also not be available. Where the issue of jurisdiction is to be decided at the trial, the standard of proof would be even higher. Therefore, while for the purposes of an examination under Order VII Rule 10 of the Code, the court may „conclude‟s reply and written that it has territorial jurisdiction, this would not come in the way of the defendant in raising a question as to territorial jurisdiction, both, when the issue of temporary injunction under Order XXXIX Rules 1 & 2 of the Code is being considered and when an issue as to territorial jurisdiction is being decided in the trial of the suit. In other words, while a plaintiff may succeed in demonstrating, for the purposes of Order VII Rule 10 of Page 21 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 the Code that this court has territorial jurisdiction and that the plaint ought not to be returned, he may fail in obtaining an order of interim injunction on the ground that the plaintiff‟s reply and writtens case is itself shaky because the issue of territorial jurisdiction is highly debatable and prima facie not tenable. Therefore, the decision of the court in rejecting the objection of the defendant and in refusing the defendant‟s reply and writtens prayer for return of the plaint under Order VII Rule 10 of the Code, would not come in the way of the defendant raising the question of territorial jurisdiction, both as an objection to the grant of an interim injunction as also at the time of decision of the issue of territorial jurisdiction, if framed, at the trial of the suit."
8. Dhodha House v. S.K. Maingi, reported in 2006 (9) SCC 41;
"24.It is trite law that a judgment and order passed by the court having no territorial jurisdiction would be nullity."
"49. In Patel Field Marshal (supra) again the thrust was on the sale of products and/or advertisement by the Appellant for registration of trade marks in the Trade Marks Journal and other local papers. The Division Bench of the High Court, as has been noticed hereinbefore, did not advert to the issue as to whether the defendant had been selling its product in Delhi on commercial scale or not. It is, therefore, not necessary for us also to dilate further on the said question. We have furthermore noticed hereinbefore that the advertisement appearing in a journal or newspapers by itself would not confer any jurisdiction on the court, if it otherwise did not have any."Page 22 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022
C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022
9. Indian Performing Rights Society Limite v. Sanjay Dalia and Another, reported in (2015) 10 SCC 161 (Head Note) "Section 20 of the Code of Civil Procedure enables a plaintiff to file a suit where the defendant resides or where cause of action arose. Section 20(a) and section 20(b) usually provides the venue where the defendant or any of them resides, carries on business or personally works for gain. Section 20(c) of the Code of Civil Procedure enables a plaintiff to institute a suit where the cause of action wholly or in part, arises. The Explanation to Section 20 C.P.C. has been added to the effect that Corporation shall be deemed to carry on business at its sole or principal office in India or in respect of any cause of action arising at any place where it has subordinate office at such place. The intendment of the Explanation to section 20 of the Code of Civil Procedure is that once the corporation has a subordinate office in the place where the cause of action arises wholly or in part, it cannot be heard to say that it cannot be sued there because it did not carry on business at that place. The linking of the place with the cause of action in the Explanation where subordinate office of the corporation is situated is reflective of the intention of the Legislature and such a place has to be the place of the filing of the suit and not the principal place of business. Ordinarily the suit has to be filed at the place where there is principal place of business of the corporation is".
10. Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., Page 23 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 reported in 2001 (5) SCC 73):
"9. When the special leave came up for hearing, detailed arguments were heard and, for the reasons to be given, this Court did not interfere with the orders passed by the courts below but gave directions regarding expeditious disposal of the suit. In this judgment, we give the reason for not interfering and also set out the principles which are to be kept in mind while dealing with an action for infringement or passing off specially in the cases relating to medicinal products. The reason for not interfering with the order appealed against was that there may be possibility of evidence being required on merits of the case and directions were given for speedy trial of the suit. Expression of opinion on merits by this Court at this stage was not thought advisable. We now proceed to examine the principles on which these cases have been and are required to be decided."
11. Order of the Hon'ble Apex Court dated 17.8.2018 passed in Special Leave to Appeal (C) No. 21997/2018 in the case of Groupe Seb (India) Pvt. Ltd. v. M/s. Symphony Limited & Anr.
12. Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Limited and Others, reported IN 2018 (2) SCC 1:
"34. To give effect to the territoriality principle, the courts Page 24 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 must necessarily have to determine if there has been a spill over of the reputation and goodwill of the mark used by the claimant who has brought the passing off action. In the course of such determination it may be necessary to seek and ascertain the existence of not necessarily a real market but the presence of the claimant through its mark within a particular territorial jurisdiction in a more subtle form which can best be manifested by the following illustrations, though they arise from decisions of Courts which may not be final in that particular jurisdiction."
8. Per contra, learned advocate Ms. Pooja Acharya for the respondent- original plaintiff has vehemently supported the impugned order of the learned trial Court. She has submitted that the appellant was an employee of the plaintiff in the business. She has submitted that the plaintiff was the prior user and he was using the trademark SHEETAL from 1996 whereas trademark RAJSHREE and MAYUR was used from 2000. She has submitted that vide two agreements, the business of the plaintiff was rented to the defendants and on that basis, the defendant was using trademark in question and, therefore, the defendant could be treated as a permitted user of the trademark. She has submitted that as per the provisions of the Trademarks Act, Page 25 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 the prior user is entitled to initiate the passing off action against the wrong doer. She has submitted that the ground of non-user, as put up by the defendant- appellant in the present appeal was not raised before the trial Court and, therefore, that point cannot be considered at this stage. She has also submitted that the plaintiff has never sold his trademark or business to the defendant and only business was rented to the defendant. She has also submitted that the defendant has not produced any document as to purchase of the trademark from the plaintiff. She has also submitted that the defendant himself has issued advertisement in local newspaper at Ahmedabad pertaining to the trademark in question. She has also submitted that the item which has been sold by the defendant is edible item and it has tried to use the trademark of the plaintiff and thereby, tried to pass off his goods as to goods of the plaintiff in the market. She has also submitted that since item is edible and used by the children and rustic persons also, the goods of the defendants could be sold in market in place of the plaintiff.
Page 26 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022
9. Mr. Pooja Acharya, learned advocate has also submitted that the cause of action is recurring one and by action of the defendant, public at large would be deceived and, therefore, injunction needs to be granted. She has also submitted that there is no delay on the part of the plaintiff in initiating the action as he has received legal notice and the defendant has applied for registration. She has also submitted that there was no any waiver or acquiescence on the part of the plaintiff. She has submitted that the trial Court has considered every aspect of the case and has properly passed the impugned order, which needs to be confirmed. She has prayed to dismiss the present Appeal from Order and has relied upon the following decisions:
1. Laxmikant v. Chetan Shah, reported in 2002 (24) PTC 1 (SC);
"8. It is common in the trade and business for a trader or a businessman to adopt a name and/or mark under which he would carry on his trade or business. According to Kerly (Law of Trade Marks and Trade Names, Twelfth Edition, para 16.49), the name under which a business trades will almost always be a trade mark (or if the business provides services, a service mark, or both). Independently of questions of trade or service mark, Page 27 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 however, the name of a business (a trading business or any other) will normally have attached to it a goodwill that the courts will protect. An action for passing-off will then lie wherever the defendant companys name, or its intended name, is calculated to deceive, and so to divert business from the plaintiff, or to occasion a confusion between the two businesses. If this is not made out there is no case. The ground is not to be limited to the date of the proceedings;
the court will have regard to the way in which the business may be carried on in the future, and to its not being carried on precisely as carried on at the date of the proceedings. Where there is probability of confusion in business, an injunction will be granted even though the defendants adopted the name innocently."
"13. In an action for passing off it is usual, rather essential, to seek an injunction temporary or ad-interim. The principles for the grant of such injunction are the same as in the case of any other action against injury complained of. The plaintiff must prove a prima facie case, availability of balance of convenience in his favour and his suffering an irreparable injury in the absence of grant of injunction. According to Kerly (ibid, para 16.16) passing off cases are often cases of deliberate and intentional misrepresentation, but it is well-settled that fraud is not a necessary element of the right of action, and the absence of an intention to deceive is not a defence though proof of fraudulent intention may materially assist a plaintiff in establishing probability of deception. Christopher Wadlow in Law of Passing Off (1995 Edition, at p.3.06) states that the plaintiff does not have to prove actual damage in order to succeed in an action for passing off. Likelihood of Page 28 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 damage is sufficient. The same learned author states that the defendants state of mind is wholly irrelevant to the existence of the cause of action for passing off (ibid, paras 4.20 and 7.15). As to how the injunction granted by the Court would shape depends on the facts and circumstances of each case. Where a defendant has imitated or adopted the plaintiffs distinctive trade mark or business name, the order may be an absolute injunction that he would not use or carry on business under that name. (Kerly, ibid, para 16.97)."
"17. We are conscious of the law that this Court would not ordinarily interfere with the exercise of discretion in the matter of grant of temporary injunction by the High Court and the Trial Court and substitute its own discretion therefor except where the discretion has been shown to have been exercised arbitrarily or capriciously or perversely or where the order of the Court under scrutiny ignores the settled principles of law regulating grant or refusal of interlocutory injunction. An appeal against exercise of discretion is said to be an appeal on principle. Appellate court will not reassess the material and seek to reach a conclusion different from the one reached by the court below solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial courts exercise of discretion [(see Wander Ltd. v. Antox India P.Ltd : 1990 (Supp) SCC 727 and N.R. Dongre v. Whirpool Corporation and another: (1996) 5 SCC 714)]. However, the present one Page 29 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 is a case falling within the well accepted exceptions.
Neither the Trial Court nor the High Court have kept in view and applied their mind to the relevant settled principles of law governing the grant or refusal of interlocutory injunction in trade mark and trade name disputes. A refusal to grant an injunction in spite of the availability of facts, which are prima facie established by overwhelming evidence and material available on record justifying the grant thereof, occasion a failure of justice and such injury to the plaintiff as would not be capable of being undone at a latter stage. The discretion exercised by the Trial Court and the High Court against the plaintiff, is neither reasonable nor judicious. The grant of interlocutory injunction to the plaintiff could not have been refused, therefore, it becomes obligatory on the part of this Court to interfere.
2. T.V.Venugopal v. Ushodaya Enterprise Ltd. & Anr., reported in 2011 (45) PTC 433 (SC):
"66. Mr. Sundaram also placed reliance on a judgment of this court in Satyam Infoway Ltd. v. Sifynet Solutions (P) Limited - 2004 (6) SCC 145. The relevant passage is reproduced as under:-
"The next question is would the principles of trade mark law and in particular those relating to passing off apply? An action for passing off, as the phrase "passing off" itself suggests, is to restrain the defendant from passing off its goods or services to the public as that of the plaintiff's. It is an action not only to preserve the reputation of the plaintiff Page 30 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 but also to safeguard the public. The defendant must have sold its goods or offered its services in a manner which has deceived or would be likely to deceive the public into thinking that the defendant's goods or services are the plaintiff's. The action is normally available to the owner of a distinctive trademark and the person who, if the word or name is an invented one, invents and uses it. If two trade rivals claim to have individually invented the same mark, then the trader who is able to establish prior user will succeed. The question is, as has been aptly put, who gets these first? It is not essential for the plaintiff to prove long user to establish reputation in a passing off action. It would depend upon the volume of sales and extent of advertisement."
"102. On consideration of the totality of facts and circumstances of the case, we clearly arrive at the following findings and conclusions :
(a) xxx xxx
(b) xxx xxx
c) Permitting the appellant to carry on his business would in fact be putting a seal of approval of the court on the dishonest, illegal and clandestine conduct of the appellant;
3. Power Control Applicances and Others v. Sumeet Machine Pvt. Ltd., reported in 1995 (15) PTC 165 (SC) Page 31 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 "44. It is a settled principle of law relating to trade mark that there can be only one mark, one source and one proprietor. It cannot have two origins. Where, therefore, the first defendant-respondent has proclaimed himself as arrival of the plaintiffs and as joint owner it is impermissible in law. Even then. the joint proprietors must use the trade mark jointly for the benefit of all. It cannot be used in rivalry and in competition with each other."
4. J. Zeenath Bivi, v. M. Khader Ibrahim and Ors, reported in 2004 (28) PTC 590 (Mad) (DB) "51. In Narayanan on Trademarks (4th Edn. at page 334) the following observation of the learned author is also relevant:
"In the case of an unregistered licensed user, if the registered proprietor retained the power to exercise sufficient control over the use of the mark as to ensure that it would not become deceptive, and that he exercised such control when necessary, the user of the mark by the licensed user inured to the benefit of the proprietor and the registration cannot be attacked on the ground of non-user or deceptive use. The definition of a trade mark does not require that use of a trade mark indicate the identity of the proprietor or of any registered user."
53. A similar question arose before a Division Bench of the Calcutta High Court in CYCLE CORPORATION OF INDIA LTD. v. T.I.RALEIGH INDUSTRIES PVT. LTD. (AIR 1995 Calcutta 73) where the Calcutta High Court considered the provisions of section 46 of the Trademarks Act and Page 32 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 held that the expression, 'by any proprietor thereof' in section 46 would mean and include not only the proprietor, but also any registered user and any other bona fide authorised user. The Calcutta High Court held as under:-
" In dealing with the scope of section 46 of the said Act it was argued on behalf of the respondents, both before the trial Court as also before us that removal of a mark is highly prejudicial consequence on the registered proprietor. There is no dispute that Raleighs are the registered proprietor. Mr.Chakraborty, the learned senior counsel for the respondents submits that the expression "by any proprietor thereof" should not be restricted to the user by the proprietor himself or any registered user but should also take in its sweep a bona fide authorised user. The learned trial Judge accepted this submission as well founded to which we agree. We also agree with the learned trial Judge when he says that removal of trade marks amount to depriving the registered proprietor of the benefit of registration and prejudicially affects his proprietary rights, in effect he is deprived of his property in the mark. The learned Judge also proceeded to observe that Legislature did not intend the owner to be deprived of his property at the instance of a person who has been authorised to use the mark by the owner himself merely because the user is not registered. We agree with this observation of the learned trial Judge. In our view the said expression "by any proprietor thereof" should not be restricted to the user by the proprietor himself or any Page 33 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 registered user, but it should also be taken into account if it is used by bona fide authorised user."
5. Midas Hygience Industries P. Ltd. v. Sudhir Bhatia and Others, reported in 2004 (28) PTC 121 (SC) (Para-5) "5. The law on the subject is well settled. In cases of infringement either of Trade Mark or of Copyright normally an injunction must follow. Mere delay in bringing action is not sufficient to defeat grant of injunction in such cases. The grant of injunction also becomes necessary if it prima facie appears that the adoption of the Mark was itself dishonest."
6. Bengal Waterproof Ltd. v. Bombay Waterproof Mnfg.
Co., reported in 1997 (17) PTC 98 ;
"11. The aforesaid averments in the plaint clearly show that the present suit is not based on the some cause of action on which the earlier suit was based. The cause of action for filling this present second suit is the continuous and recurring infringement of plaintiff's trade mark by the defendants continuously till the filing of the present second suit. We asked the learned counsel for the defendants as to whether pending the suit and at present also the defendants are trading in the offending goods, namely, bearing the mark `DACK BACK' and he informed us that defendants even at present are carrying on this business. Therefore, pending the second suit all throughout and during the pendency of these proceedings Page 34 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 the defendants have carried on the business of trading in the commodity waterproof raincoats `DACK BACK'. It is obvious that thus the alleged infringement of plaintiff's trade mark `DUCK BACK' and the alleged passing off action on the part of the defendants in selling their goods by passing off their goods as if they were plaintiff's goods has continued all throughout uninterrupted and in a recurring manner. It is obvious that such infringement of a registered trade mark carried on from time to time would give a recurring cause of action to the holder of the trade mark to make a grievance about the same and similarly such impugned passing off actions also would give a recurring cause of action to the plaintiff to make a grievance about the same and to seek appropriate relief from the court. It is now well settled that an action foe passing off is a common law remedy being an action in substance of deceit under the Law of Torts. Wherever and whenever fresh deceitful act is committed the person deceived would naturally have a fresh cause of action in his favour. Thus every time when a person passes off his goods as those of another he commits the act of such deceit. Similarly whenever and wherever a person commits breach of a registered trade mark of another he commits a recurring act of breach of infringement of such trade mark giving a recurring and fresh cause of action at each time of such infringement to the party aggrieved. It is difficult to agree how in such a case when in historical past earlier suit was disposed of as technically not maintainable in absence of proper reliers, for all times to come in future defendant of such a suit should be armed with a licence to go on committing fresh acts of infringement and passing off with impunity without being subjected to any legal Page 35 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 action against such future acts. We posed a question to the learned counsel for the defendants as to whether after the disposal of the earlier suit if the defendants had suspended their business activities and after a few years had resumed the same and had started selling their goods under the trade mark `DACK BACK' passing them off, the plaintiff could have been prohibited and prevented by the bar of Order 2 Rule 2 sub-rule (3) from filing a fresh suit in future when such future infringement or passing off took place. He rightly and fairly stated that such a suit would not be barred. But his only grievance was that whatever was the infringement or passing off alleged against the defendants in 1980 had, according to the plaintiff, continued uninterrupted and, therefor, in substance the cause of action in both the suits was identical. It is difficult to agree. In cases of continuous causes of action or recurring causes of action bar of Order 2 Rule 2 sub-rule (3) cannot be invoked. In this connection it is profitable to have a lock at Section 22 of the Limitation Act, 1963. It lays down that `in the case of a continuing tort, a fresh period of limitation begins to run at every moment of the time during which the beach or the tort, as the case may be, continues'. As act of passing off is an act of deceit and tort every time when such tortious act or deceit is committed by the defendant the plaintiff gets a fresh cause of action to some to the court by appropriate proceedings. Similarly infringement of a registered trade mark would also be a continuing wrong so long as infringement continues. Therefore, whether the earlier infringement has continuer or a new infringement has taken place cause of action for filing a fresh suit would obviously arise in favour of the plaintiff who is aggrieved Page 36 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 by such fresh infringements of trade mark or fresh passing off actions alleged against the defendant. Consequently, in our view even on merits the learned Trial Judge as well as the learned Single Judge were obviously in error in taking the view that the second suit of the plaintiff in the present case was barred by Order 2 Rule 2 sub-rule (3), CPC."
7. Cadila Healthcare Ltd. v. Aureate Healthcare Pvt. Ltd. , reported in 2012 (51) PTC 585 (DEL) (Para-49) "49. Now, with regard to question of delay, defendants submit that they have been using the mark in question since the year 2006 and the present suit was filed after five years and the plaintiff had the knowledge about the use, thus there is delay in bringing an action. Thus, the plaintiff is not entitled to discretionary relief of injunction. Though there is no clinching, cogent and clear evidence available on record to show that the plaintiff was definitely aware about such user, but the defendants have certain documents which indicate that they had been directly or indirectly using the mark PANTOBLOC since the year 2006. Now the question before this Court is as to whether such delay is fatal to the case of the plaintiff who is seeking injunction against the defendants."
8. Amar Singh Chawal Wala v. Shree Vardhman Rice and General Mills, reported in 2009 (40) PTC 417 (DEL) (DB) "24. For the aforementioned reasons this Court is of the view that the Plaintiff has made out a prima facie case for Page 37 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 grant of injunction. The mere fact that the present appeal was pending for over 12 years does not make a difference since the Plaintiff has been able to prima facie establish that the infringement by the Defendants of the Plaintiff‟s reply and writtens marks and device by marketing the defendants‟s reply and written product under the mark HARA QILLA and the device of QILLA is a continuing one and has the effect of harming the Plaintiff‟s reply and writtens reputation and eroding itsgoodwill in the trade. It is clarified that the observations in this order are prima facie and not intended to influence the opinion to be formed by the trial court on an appreciation of the evidence led by the parties."
9. Hindustan Pencils Pvt. Ltd. v. India Stationary Producets Co. and Another, reported in 1989 (9) PTC 61, (pARAS- 29, 38) "29. It would appear to be difficult to accept that relief of temporary injunction should not be granted, because of the delay on the part of the plaintiff, even though the court feels, at that point of time, that ultimately permanent injunction will have to be granted."
"38. It had been submitted that there was an inordinate delay on the part of. the plaintiffs in filing the present suit. I have already held that inordinate delay would not defeat an action for the grant of a temporary injunction especially where the use by the defendant of the mark was fraudulent. An any case, in my opinion, the delay in the present case cannot be regarded as inordinate. Assuming for the sake of argument that, as contended by the Page 38 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 defendants, the plaintiffs came to know about the user by the defendants of the infringing mark in March, 1982, it is not as if the plaintiffs slept over their rights for a number of years. It is to be seen that the plaintiffs' principal place of business is 'in Bombay while the defendant is a small businessman carrying on its business in Sadar Bazar, Delhi. The plaintiffs, in 1985, did file an application for cancellation of the registration of copyright of the defendant. This amounted to first step being taken by it. The plaintiffs waited and within 3 years thereafter filed the present suit. The defendant must have known that it was adopting a mark which belongs to some one else. Any infringer who uses or adopts some one else's mark must be aware of the consequences which may follow. The defendants ran the risk in using a mark which belonged to some one else. It continued. its business un-interruptedly for a number of years before any action was taken by the plaintiffs against it. Any growth after notice is at the risk and peril of the defendant. The defendant certainly had notice of application of the plaintiff having been filed against it in the year 1985 for cancellation of registration of the copyright. The defendant should have been warned, at that stage, that the plaintiff is not likely to accept the user of its mark by the defendant If the defendant continued to do business by using the impugned mark. it did so at its own peril. The continued user cannot be set up as a defense under these circumstances."
10. Ram Sarup Gupta (dead) by L.Rs., v. Bishnu Narain Inter College and Ors, reported in AIR 1987 SC 1242 Page 39 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 (Para- 6) "6. The question which falls for consideration is whether the respondents in their written statement have raised the necessary pleading that the license was irrevocable as contemplated by Section 60(b)of the Act and, if so, is there any evidence on record to support that plea. It is well settled that in the absence of pleading, evidence, if any, produced by the parties cannot be considered. It is also equally settled that no party should be permitted to travel beyond its pleading and that all necessary and mate- rial facts should be pleaded by the party in support of the case set up by it. The object and purpose of pleading is to enable the adversary party to know the case it has to meet. In order to have a fair trial it is imperative that the party should state the essential material facts so that other party may not be taken by surprise. The pleadings however should receive a liberal construction, no pedantic approach should be adopted to defeat justice on hair split- ting technicalities. Sometimes, pleadings are expressed in words which may not expressly make out a case in accordance with strict interpretation of law, in such a case it is the duty of the Court to ascertain the substance of the plead- ings to determine the question. It is not desirable to place undue emphasis on form, instead the substance of the plead- ings should be considered. Whenever the question about lack of pleading is raised the enquiry should not be so much about the form of the pleadings, instead; the court must find out whether in substance the parties knew the case and the issues upon which they went to trial. Once it is found that in spite of deficiency in the pleadings parties knew the case and they Page 40 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 proceeded to trial on those issues by producing evidence, in that event it would not be open to a party to raise the question of absence of pleadings in appeal.In Bhagwati Prasad v. Shri Chandramaul, [1956] 1 SCR 286 a Constitution Bench of this Court considering this question observed (at p.738 of AIR):
"If a plea is not specifically made and yet it is covered by an issue by implication, and the parties knew that the said pleawas involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon if it is satisfactori- ly proved by evidence. The general rule no doubt is that the relief should be founded on pleadings made by the parties. But where the substantial matters relating to the title of both parties to the suit are touched, though indirectly or even obscurely in the issues, and evidence has been led about them, then the argument that a particular matter was not expressly taken in the pleadings would be purely formal and technical and cannot succeed in every case. What the Court has to consider in dealing with such an objection is: did the parties know that the matter in question was involved in the trial, and did they lead evidence about it? If it appears that the parties did not know that the matter was in issue at the trial and one of them has had no opportunity to lead evidence in respect of it, that undoubtedly would be a different matter. To allow one party to reply upon a matter in respect of which the other party did not lead Page 41 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 evidence and has had no opportunity to lead evidence, would introduce considerations of prejudice, and in doing justice to one party, the Court cannot do injustice to another."
11. Neon Laboratories Ltd. v. Medical Technologies Ltd., reported in 2015 (64) PTC 225 (SC), "3 This Court does not normally entertain appeals against interlocutory orders. In the case of trademarks, however, keeping in perspective the endemic delay in concluding cases/suits in India because of the exponentially increasing docket explosion, temporary ad interim injunctions are of far reaching consequences, oftentimes effectively deciding the lis and the disputes themselves. Possibly for this reason 'Leave' has already been granted in the present Appeal. However, it is now well entrenched in our jurisprudence that the Appellate Court should not flimsily, whimsically or lightly interfere in the exercise of discretion by a subordinate court unless such exercise is palpably perverse. Perversity can pertain to the understanding of law or the appreciation of pleadings or evidence. We shall restrict ourselves to reference inWander Ltd. v. Antox India P. Ltd. 1990 Supp SCC 727, wherein it has been adumbrated that the Appellate Court ought not to "reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by that court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary Page 42 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion". We shall be careful not to transgress these frontiers."
12. Medicure Hygiene & Anr. v. Medicare Hygience Private Limited and Ors, reported in 2013 (53) PTC 425 (Guj) "19.This Court has considered the aspect that present Appeal From Order is challenging a discretionary order passed by the trial Court. In this connection, reliance is placed on a decision of this Court in the case of Matrix Telecom Pvt.Ltd. Vs.Matrix Cellular Services Pvt.Ltd. reported in 2011(3) GLR 1951 more particularly towards paragraph 6.1 which reads thus:
"6.1 It is required to be noted that it is well settled law that the Appellate Court may not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. The Appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by the court was reasonably possible on the material. The Page 43 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion."
20.In view of the above settled principle of law, power of this Court as an Appellate Court to interfere with the order passed by the trial court is very limited and only in exceptional circumstances, the appellate Court can interfere with the discretionary order passed by the trial Court. The appellate Court cannot reevaluate the entire evidence and arrive at a conclusion contrary to the conclusion arrived at by the trial Court. However, in case where the order passed by the trial court is found to be invalid, illegal, arbitrary, perverse or contrary to the settled principles of law, the Appellate Court has all powers to interfere with the same. Considering the above principles of law, this Court has only to see as to whether the trial court has committed any error in passing the impugned order. It has also to see whether the main basic principles of law namely, prima-case, balance of convenience and irreparable loss are satisfied or not in passing the order."
10. Regarding the various decisions relied upon by the learned advocate Mr. Tolia, learned advocate Ms. Pooja Acharya has made following submission:
Page 44 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022
C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022
1. So far as the case of Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries Limited and Others (Supra) is concerned, she has submitted that it was factually different.
2. Regarding the order of the Apex Court in the case of Groupe Seb (India) Pvt. Ltd. v. M/s. Symphony Limited & Anr. (Supra), she has submitted that it was with the consent of the parties.
3. Regarding the case of Indian Performing Rights Society Limite v. Sanjay Dalia and Another (Supra), she has submitted that this case does not deal with the passing off action.
4. Regarding the case of Dhodha House v. S.K. Maingi (Supra), she has submitted that in that matter, the consideration was regarding Sectin 20 of CPC read with Section 134 of the Trade Marks Act and, therefore, factually it is not applicabel to the facts of the present case.
5. Regarding other cases, she has submitted that facts of these cases are difference from the facts of the Page 45 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 present case.
11. In rejoinder, learned advocate Mr. Tolia has submitted that the trial Court has not considered the question of territorial jurisdiction in proper perspective and the point of prior user is also not considered properly. He has also submitted that the trial Court has failed to consider the necessary ingredients which the plaintiff must prove in passing off action. He has also submitted that the trial Court has also not considered the three main ingredients for granting interim relief. He has submitted that the agreements relied upon by the plaintiff is forged one and therefore, no reliance can be placed upon it. 11.1 Regarding the various decisions cited by the learned advocate Ms. Pooja, Mr. Tolia has submitted that those are not applicable to the facts of the present case. He has also submitted that the plaintiff did not reply to the legal notice issued by the defendant and has merely relied upon the forged agreement. He has prayed to allow the present Appeal from Order.
Page 46 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022
12. It is well settled principles of law that in an Appeal against exercise of 'discretion' by the Court of first instance, the power of appellate Court to interfere with the exercise of discretion is restrictive. Merely because on facts, the appellate Court would have concluded differently from that of the Court below, that would not, by itself, provide justification for appellate Court to interfere. To justify interference, the appellant would have to demonstrate that the discretion has been shown to have been exercised arbitrarily or capriciously or perversely or where the Court had ignored the settled principles of law regulating grant or refusal of interlocutory injunction. An appeal against the exercise of discretion is an appeal on principle. In the case of Wander Ltd. V. Antox India P. Ltd, (Supra) wherein it has been adumbrated that the Appellate Court ought not to "re- assess the material and seek to reach a conclusion different from the one reached by the Court below if the one reached by that Court was reasonably possible on the material. The Appellate Court would normally not be justified in interfering with the exercise of discretion under Appeal Page 47 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial Court reasonably and in a judicial manner, the fact that the Appellate Court would have taken a different view, may not justify interference with the trial Court's exercise of discretion".
13. In view of the above settled principles of law, power of this Court, as an Appellate Court, to interfere with the order passed by the trial Court is very limited and only in exceptional circumstances, the Appellate Court can interfere with the discretionary order passed by the trial Court. The Appellate Court cannot re-evaluate the entire evidence and arrive at a conclusion contrary to the conclusion arrived at by the trial Court. However, in case where the order passed by the trial Court is found to be invalid, illegal, arbitrary, perverse or contrary to the settled principles of law, the Appellate Court has all powers to interfere with the same. Considering the above principles of law, this Court has only to see as to whether the trial Court has committed any error Page 48 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 in passing the impugned order. It has also to see whether the main basic principles of law namely, prima-facie case, balance of convenience and irreparable loss are satisfied or not in passing the order.
14. Admittedly, the plaintiff has file the Suit for passing off action. Passing of action has its origin, as an action in tort to restrain the wrongful conduct of the defendant in passing off his goods as the goods of the plaintiff. This might be done by using the trade name, trademark or other get-up of the plaintiff so as to induce any potential purchaser the belief that his goods or business were those of the plaintiff's. The tort lies in the mis-representation by the defendant. Mis-representation is aimed at the potential buyers of the goods or the services, who are invited to buy goods believing that the goods are of the plaintiff. This might be done through confusion or deceitful use of the trade name or mark with or other indication used by the plaintiff in respect of such goods or service. The passing off action is to create an actionable wrong based on the border principles of law that nobody has any right to represent his Page 49 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 goods or business as the goods or business of somebody else. The principle is that " trading must not only be honest but must not even unintentionally be dis-honest". The purpose of passing off action is to protect commercial goodwill and to ensure that the purchaser are not exploited and dis-honest trading is prevented. For that, the plaintiff must establish that his business or goods have acquired the reputation. Whether the defendants goods are marked with the trademark of the plaintiff or made-up or described as calculated to mislead the ordinary purchaser, it is thus tendency to mislead or confuse which forms the gist of passing off action. There is no need to establish fraud or actual deception or actual damages in such cases. In passing off action it is necessary to prove that an ordinary person is likely to buy goods in a believe that the goods are that of plaintiff, though it is not necessary to show that actual sale took place.
15. It is well settled that while considering the likelihood of confusion in the mind of a purchaser, the wisdom of an ordinary person is to be taken into consideration. If an Page 50 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 ordinary person exercising ordinary caution is likely to be confusion or is likely to be deceived into buying the product of the defendant, believing the same to be originating from the plaintiff, the injunction must follow. Intention to pass of his neither necessary nor is required to be shown. There is no necessity to prove actual damage to the plaintiff. Of course, the plaintiff has to establish that he has build-up good reputation and goodwill on the trademark. The plaintiff has also to establish deception similar so as to cause confusion in the minds of consumer and also likely suffering of substantial damages either to his business financially or to the reputation and goodwill of his trademark.
16. Considering the aforesaid proposition regarding passing off action and the submissions made on behalf of both the sides, coupled with the material placed on record, it transpires that there is no dispute as to the fact that plaintiff was using the trademark/ brand "SHEETAL" from 1995-96 and trade name 'RAJSHREE" and "MAYUR" since 2000. It also appears that the defendant was employee of the plaintiff. It also reveals from the copy of documents placed at Page-187-192 that Page 51 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 there was a Contract of handing over the running business of PEPSI from plaintiff to defendant Maheshkumar. That entire business has been given to the defendant on rental basis and that paying good-will royalty. It also appears from documents placed at Page-194 to 197 that it s supplementary contract for the running of the business of PEPSI entered into between the parties. On both the documents there is signature of Maheshbhai Trivedi. Of course, it is contended by the defendant that it is not his signature. It is also contended by the defendant in respect of both these documents that the same bears the same serial number. However, on perusal of the Page-188, it bears Serial Number AB4 2 8929 whereas Supplementary Agreement at Page-192 bears Serial Number AB4 2 8928. At this juncture, it is also worthwhile to refer to the legal Notice dated 13.11.2014 issued by the defendant to the plaintiff which is at Page-198 and 199, wherein in Para-5, the defendant has admitted to execution of Contract as referred to hereinabove. It also reveals from the averments of this notice that the defendant has averred that he is using trademark "RAJSHREE" from 2011. It is also averred that the Page 52 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 defendant has vacated the premises of the plaintiff and plaintiff has started his own business of Pepsicola, Sharbat, etc. It is also averred therein that the plaintiff is unauthorisedly using RAJSHREE trademark and has applied for its registration before the trademarks Registry. On perusal of the paper-book, it appears that the defendant has applied for registration of trademark RAJSHREE showing the date of user as 1.4.2011 and for SHEETAL PEPCEE as in user- detail column it is shown as "proposed to be used". It also reveals from that for "MAYUR PEPSY", the defendant has applied for registration and in user-detail Column, it is shown as " proposed to be used."
17. Now, considering the material placed on record, it clearly appears that defendant had contract with the plaintiff regarding the running of the Pepsi Cola business. Thus, it reveals from the material placed on record, that the plaintiff is a prior user of the trademark RAJSHREE, SHEETAL and MAYUR. The proposed trade names as the defendant wants to register as his trademark are concerned, the name RAJSHREE is the same whereas he Page 53 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 has added PEP CEE to the word "SHEETAL" and " PEPSY" in the name "MAYUR". Thus, the name of words "PEP CEE" , "PEPSY" is added with brand "SHEETAL" and "MAYUR" is phonetically same as the goods Pepsi and Sharbat of the plaintiff. Therefore, there is likelihood of confusion created in the minds of the ordinary purchaser. Therefore, in view of the settled principles of law regarding granting of injunction, the plaintiff is entitled to get relief of injunction.
18. The defendant has vehemently submitted that the City Civil Court, Ahmedabad has no jurisdiction to entertain the suit. At this juncture, it is pertinent to note that for the said ground, the defendant has filed separate Application under Order 7 Rule 11 of CPC, which came to be rejected by the trial Court by separate order, holding that the Civil Court, Ahmedabad has jurisdiction. Now, admittedly, this order of the City Civil Court, Ahmedabad has not been challenged by the defendant. Therefore, at this interlocutory stage, the observation of the trial Court regarding the fact that it has jurisdiction, has to be accepted. The defendant ought to have challenged the order of the trial Court rejecting his Page 54 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 application filed under Order 7 Rule 11 on the ground that no territorial jurisdiction with the City Civil Court, Ahmedabad.
19. Now, considering the impugned order of the trial Court, it clearly appears that the trial Court has properly appreciated the facts and law. The view taken by the learned trial Court in granting injunction in favour of the plaintiff, is proper and this Court does not find any error in the said order.
20. In view of the above discussion, the present Appeal from Order is devoid of merit and liable to be dismissed. However, considering the issue involved, the Suit needs to be expedited and necessary direction needs to be issued to the trial Court for earlier disposal of the Suit, with the cooperation of both the parties.
21. In view of the above, the present Appeal from Order is hereby dismissed. The impugned order of the Trial Court is upheld. However, the learned trial Court is hereby directed to expedite the Suit and try to dispose of the Suit as early Page 55 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022 C/AO/152/2019 CAV JUDGMENT DATED: 22/12/2022 as possible, preferably within a period of 4 months from the date of receipt of copy of this Order. The parties are directed to co-operate the trial Court for earlier disposal of the Suit.
In view of the above, the Civil Application also stands disposed of accordingly. Interim relief, if any, stands vacated.
No order as to costs.
(DR. A. P. THAKER, J) FURTHER ORDER Heard learned advocate for the petitioner. He has submitted to stay the impugned order. The same is objected by the learned advocate appearing for the other side.
In view of the observations made by this Court in the order, the prayer is declined.
(DR. A. P. THAKER, J) SAJ GEORGE Page 56 of 56 Downloaded on : Sat Dec 24 04:38:52 IST 2022