Calcutta High Court
Jagadamba Fiscal Services Pvt. Ltd. vs Birla Corporation Ltd. And Anr. on 19 April, 2002
Equivalent citations: (2002)3CALLT87(HC)
Author: J.K. Biswas
Bench: Tarun Chatterjee, Jayanta Kumar Biswas
JUDGMENT J.K. Biswas, J.
1. The defendant No. 1 in a pending suit is the appellant before us. Before we go into the merits of this appeal, let us first dispose of the application for leave to appeal without the certified copy of the impugned order.
2. After hearing the parties we are satisfied that it is a fit case where leave to appeal is required to be granted. Accordingly, we grant leave to the appellant to file the instant appeal against the impugned order in terms of prayer (a) of the application.
3. When some argument was advanced on the question of grant of interim relief, the learned counsel for the parties submitted before us that the appeal itself could be heard out and disposed of by treating the same as on day's list. Accordingly, we discharge the appellant from the undertaking made under prayer (a), and by consent of parties we treated the appeal as on the date when the application for grant of interim relief was listed for hearing and had taken up the same for hearing.
4. This appeal is against the judgment and/or order dated 13th of March, 2002 passed by a learned interlocutory Judge of this Court on an interlocutory application being G.A. No. 966 of 2002 filed in connection with Civil Suit being C.S. No. 110 of 2002. In the month of March, 2002 the aforesaid suit has been filed by the plaintiff/respondent praying, inter alia :
"for leave under Clause 12 of the Letters Patent; perpetual injunction restraining the defendants and each of them, their servants, agents and/ or assigns from reproducing or authorizing reproduction of the ^plaintiffs said artistic work shown in annexure "A"'to' the plaint; perpetual injunction restraining the defendants and each of them;'their servants, agents and/or assigns from using or utilizing the plaintiffs secrets, confidential information and trade secrets which were acquired in the course of employment of the defendant No. 2 with the plaintiff; perpetual injunction restraining the defendants and each ofthem, their servants, agents and/or assigns from using the list of dealers and customers of the plaintiff; permanent injunction restraining the defendants and each ofthem, their servants, agents and/or assigns from in any way or manner imitating the get-up, design, lay out and colour scheme of the plaintiffs cement bags; the defendants and each of them be directed to produce on oath all infralning articles and/or articles in violation of the plaintiffs property rights for destruction; receiver; attachment, injunction; and costs of Rs. 20 lakhs."
5. In the aforesaid pending suit the plaintiff/respondent on 7th of March, 2002 filed an interlocutory application for injunction in which, inter alia the following prayers have been made :
" a) Injunction restraining the respondents and each of them, their directors, servants, agents and/or assigns from passing off the business and products of the respondents as and for the business and products of the respondents by using the impugned trademark/tradename 'DURGAPUR CEMENT or any other trademark/tradename similar thereto which so resembles the tradename/trademark 'DURGAPUR CEMENT of the petitioner ;
b) Injunction restaining the respondents and each of them, their directors, servants, agents and/or assigns from passing off the cement of the respondents as and for the cement of the petitioner by using the impugned trade dress shown in annexure "G" hereof so as to be calculated to deceive or to induce the belief that the products of the respondents is the same as the products sold by the petitioner;
c) Injunction restraining the respondents and each of them, their directors, servants, agents and/or assigns from using the list of dealers and customers of the petitioner;
d) Injunction restraining the respondents and each of them, their directors, servants, agents and/or assigns from divulging and/ or making unauthorized use of the trade secrets and confidential business information of the petitioner;"
6. The case made out for grant of injunction in the application is to the following effect :
7. In Burdwan District of the State of West Bengal the plaintiff/ respondent is having a cement plant under the name 'Durgapur Cement Works'. For more than 27 years it has been manufacturing, distributing, marketing and selling cement from such plant under its trademark 'Durgapur Cements' as also 'Birla Cement Durgapur'. The tradename and trademark have also been prominently projected in advertisements and sales promotional activities. Its cement is recognised by all concerned as 'Durgapur Cement'. The synthetic bags of 50 kgs used for packaging and marketing have a unique and distinctive trade dress comprising a distinctive layout, design, get-up and colour combination in orange, blue and yellow. In June 2001 it came to learn that defendant No. 1/appellant was taking steps to market its cement manufactured at its mini cement plant under the tradename/trademark 'Durgapur Cement'. By several letters tq appellant and some authorities plaintiff/respondent raised objections about the use of deceptively similar trademark by the appellant. Ignoring the objections, appellant started manufacturing, marketing and selling its products under the trademark 'Durgapur Cements' and using a trade dress which was deceptively similar in get-up, material and colour scheme. Thus the appellant dishonestly, deliberately and in calculated manner continued to pass-off its business and products as that of the plaintiffs/respondent's. Defendant No. 2, an employee of plaintiff/respondent from 1990 after resigning in 1999 joined the appellant and calculatedly engineered and compounded the dishonest acts of the appellant/defendant No. 1. The cease and desist notice issued by trademark attorneys of plaintiff failed to yield result and hence the suit and the prayers for injunctions.
8. After hearing the parties, the learned interlocutory Judge has passed the impugned order by which he has granted interim order in terms of prayers (a) and (b) of the notice of Motion. The learned interlocutory Judge also gave directions for filing affidavits; and adjourned the interlocutory application for two weeks. It was recorded in the impugned order that the interim order of injunction would not stand in the way of the appellant to sell its cement in any other form of packaging or in any other name.
9. Before we proceed further we keep it on record that the impugned order has been passed on the first date of listing the application for injunction without affording any opportunity to the appellant to produce documents in support of its defence or to file affidavit-in-opposition to the application for injunction.
10. Before us Mr. Ukil appearing on behalf of the appellant had assailed the impugned order, inter alia, by contending that on the very first day of moving the application for injunction as a 'Court Application' the learned Judge ought not to have granted an interim order of injunction on account of delay on the part of the plaintiff/respondent in approaching this Court and without considering the balance of convenience and inconvenience of the appellant as the appellant has already started production of their products and sale thereof for more than seven months. Mr. Ukil further submitted that opportunity ought to have been given to the appellant to satisfy the Court that no reason could be shown to grant interim order of injunction pending disposal of the application for injunction by fixing a later date for the appellant. Mr. Ukil, the learned senior counsel appearing for the appellant also contended that in 1998 the appellant applied to the appropriate authority for registration of their trademark 'Durgapur Cement' and that the plaintiff/respondent had never used the trademark 'Durgapur Cement and that bags annexed to the application for injunction by the plaintiff/respondent were not the bags used by the appellant and therefore, according to Mr. Ukil, the learned interlocutory Judge was not justified in granting interim order of injunction without considering the factual aspect of the matter which was raised through the learned counsel for the appellant. On the question where and under what circumstances an order of injunction in a passing off action should be granted, Mr. Ukil had relied on the decisions of the Supreme Court in the cases of Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., , and Uniply Industries Ltd. v. Unicom Plywood Pvt. Ltd. and Ors., . Mr. Ukil further argued that in the event this interim order which has been granted by the learned interlocutory Judge is allowed to continue till the application for injunction is disposed of on affidavits, the appellant would suffer irreparable loss and injury because an interim order of injunction against appellant from selling their products till the disposal of the application for injunction has been passed by the learned interlocutory Judge. Accordingly, Mr. Ukil submitted that the appellant would suffer irreparable loss and injury if they are not allowed to sell their products as all the employees of the company would become jobless and the company by dint of such interim order has already been closed. Mr. Ukil therefore, contended that during the pendency of the application for injunction they may be permitted to sell their products and they may be directed to keep the sale proceeds in a separate account which would also benefit the respondent No. 1.
11. Mr. Chatterjee, the learned senior counsel appearing for the respondent however strongly disputed the submissions made by Mr. Ukil appearing on behalf of the appellant.
12. Mr. Chatterjee contended before us that in a passing off action --where the question of registered trademark is totally irrelevant and where the prior user of a particular trademark and trade dress is only relevant, the learned interlocutory Judge was fully justified in passing the interim order of injunction. He also contended that the application was moved with sufficient prior notice to the appellant and therefore, the sufficient opportunity was given to the appellant to oppose the prayer for grant of ad interim order of injunction. In this connection Mr. Chatterjee had relied on various decision of High Courts in India and also a decision of the Supreme Court. They are (supra), (Anglo-Dutch Paint, Colour and Varnish Works Pvt. Ltd. v. India Trading House) . (Prem Singh v. Ceeam Auto Industries) , (Century Traders v. Roshan Duggar & Co. and Ors.), .
13. Having heard the learned advocates appearing for the parties and after going through the impugned order and the documents namely, the bags produced before us by both the parties and after considering the decisions cited by the learned counsel for the parties, we are of the view, that in the facts and circumstances, the learned interlocutory Judge was not justified in granting an interim order of injunction in the manner indicated above till the disposal of the application for injunction. For deciding this appeal we have examined the impugned order under appeal. The learned interlocutory Judge has granted the interim order of injunction on a finding that both the bags, which were being used by the parties for sale of their products, were similar in nature and that the products of the respondent No. 1 have come in the market prior to sale and production by the appellant. Mainly on the aforesaid two findings the learned interlocutory Judge has granted interim order of injunction in terms of prayers (a) and (b) of the notice of motion. It is now well settled that in an action of passing off, it is usual, rather essential to seek for an order of injunction, temporary or ad interim. It is also equally settled law that the principles for grant of such injunction are the same as in the case of any other action. That is to say the plaintiff in order to obtain the interim order of injunction must satisfy the Court that he has made out a prima facie case and that the balance of convenience and inconvenience is in his favour and he shall suffer an irreparable loss and injury in the event of refusal to grant an order of injunction. Keeping these principles in mind let us now take up the facts of the present case. In the present case the plaintiff/respondent No. 1 claims to have been running its business for more than 27 years in the name of 'Birla Durgapur Cements'. The fact regarding continuance of business for the last 27 years was not disputed either before the learned interlocutory Judge or before us by Mr. Mr. Ukil appearing on behalf of the appellant. It is also not in dispute that the appellant had started production of cement and selling the same in the market in the name of "Durgapur Cement" for more than eight months. Before an order of injunction in a passing off action is granted, the intention of the defendant to made use of the business name of the plaintiff so as to divert plaintiffs business to himself must appear to the Court to be apparent. The two bags one used by the plaintiff and the other by the appellant have also been produced before us. The bags that were produced before the learned interlocutory Judge however, we keep it on record, are not the same that are produced before us. Mr. Ukil submitted that the bags that were produced before the learned interlocutory Judge were not of the defendant/appellant. Be that as it may, when both sides accepted the position that the bags that were produced before us were their bags, we need not go into the question where the bags, which were produced before the learned interlocutory Judge, were not the same. Be that as it may, the learned interlocutory Judge on comparison of the two bags of the two parties, which were produced before him, came to a finding that the business name sought to be adopted by he appellant was somewhat similar to that of the plaintiff. In order to satisfy ourselves we have also examined the two bags of the parties that were being used by them in the market for sale of their products. From a careful examination of the bags of the plaintiff it appears to us that the words used in the said bag of the plaintiff are 'Birla Cement Durgapur' whereas the bag that has been produced before us on behalf of the appellant shows only 'Durgapur Cement'. Therefore, from this it cannot be straight way said at least prima facie that the two bags of the parties were similar in nature, Mr. Chatterjee appearing on behalf of the plaintiff/respondent however had drawn our attention to the colouring shown in the bag of the defendant/appellant and submitted that the colouring of the two bags of the two parties were similar in nature and therefore, the plaintiff/respondent was entitled to an order of injunction. Prima facie, we are not satisfied with the submission of Mr. Chatterjee that the colourings of the aforesaid two bags of the two parties are the same. Therefore, we are unable to agree with the finding of the learned interlocutory Judge that colouring of the tow bags were similar in nature and therefore an interim injunction should be granted in favour of the plaintiff/respondent. Even assuming that the colouring in the two bags were similar in nature, then also the learned Judge, in our view, at this stage ought not to have granted interim order of injunction. It is not in dispute that the interim order of injunction was passed on the day the application for injunction was placed on the list as "Court application" and the appellant was not given any opportunity to file any affidavit in opposition or to produce documents to show that no order of injunction could be granted in favour of the plaintiff/respondent No. 1. there is yet another aspect of the matter. There is no dispute in this case that the instant suit has been filed at least seven months after commencement of production of 'Durgapur Cement' by the defendant/appellant and sale thereof. That is to say the order of injunction has been passed after the defendant/appellant has already sold their products in the market for the last seven months or so. Such being the state of affairs on the first day of moving the application for injunction there was no need for the learned interlocutory Judge to pass an interim order of injunction. There is another aspect of this matter. It is well settled that action for passing off would lie where the name of the defendant, or its intended name, is calculated to deceive and to so divert business from the plaintiff or to cause confusion between the two business. In this case the learned interlocutory Judge has failed to consider this aspect of the settled principles of law before granting an interim order of injunction. That apart in a recent decision of the Supreme Court in the case of Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., , factors, which are to be considered in a passing off action, have been enumerated. In the said decision it has been stated broadly that in an action for passing off on the basis of unregistered trademark generally in deciding the question of deceptive similarly, following factors are to be considered.
(a) The nature of the marks i.e. whether the marks are word marks or label marks or composite marks, i.e. both words and label works.
(b) The degree of resembleness between the marks, phonetically similar and hence similar in idea.
(c) The nature of the goods in respect of which they are used as trade marks.
(d) The similarity in the nature, character and performance of the goods of the rival traders.
(e) The class of purchasers who are likely to buy the goods bearing the marks they require, on their education and intelligence and a degree of care they are likely to exercise in purchasing and/or using the goods.
(f) The mode of purchasing the goods or placing orders for the goods and
(g) Any other surrounding circumstances which may be relevant in the extent of dis-similarity between the competing marks.
Weightage to be given to each of the aforesaid factors depends upon facts of each case and the same weightage cannot be given to each factor in every case.
14. Even the aforesaid factors were not prima facie considered by the learned interlocutory Judge at the time passing the interim order of injunction. For the reasons aforesaid, we are of the view that on the first day of moving the application for injunction, the learned interlocutory Judge was not justified in passing the interim order of injunction. Accordingly.
the impugned order is set aside. The learned Judge is requested to dispose of the pending application for injunction at an early date preferably within four weeks from this date. The appellant is granted two weeks time to file the opposition arid reply to be filed by respondent by week thereafter.
15. During the pendency of the application for injunction however we permit the appellant to sell their products but they shall keep the sale proceeds in a separate fund which would also benefit the plaintiff/ respondent.
16. We, however, make it clear that the observations and findings made in this order shall not influence the learned interlocutory Judge while deciding the application for injunction on merits and in accordance with law.
There will be no order as to costs, Urgent xerox certified copy of this judgment to be supplied to the parties on usual undertakings.
T. Chatterjee, J.
I agree.