Delhi High Court
M/S Drs Logistics (P) Ltd vs Drs Dilip Roadlines (Pvt) Ltd & Ors on 7 September, 2011
Author: V.K. Jain
Bench: V.K. Jain
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on: 25.08.2011
Judgment Pronounced on: 07.09.2011
+ CS(OS) 1486/2011
M/S DRS LOGISTICS (P) LTD ..... Plaintiff
Through: Mr Chander M. Lall, Ms Ekta
Sarin and Ms Nancy Roya and Ms
Ankita Ubeja, Advs.
versus
DRS DILIP ROADLINES (PVT) LTD & ORS ..... Defendants
Through: Mr Amit Sibal, Ms Prachi
Vashisht Sharma and Mr Giriraj
Subramanium, Advs.
CORAM:-
HON'BLE MR JUSTICE V.K. JAIN
1. Whether Reporters of local papers may
be allowed to see the judgment? Yes
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported Yes
in Digest?
V.K. JAIN, J
IA No. 9741/2011 (O. 39 R. 1&2 CPC) and IA No.
11799/2011 (O.39 R. 4 CPC)
1. This suit has been filed by DRS Logistics (P) Ltd
through its authorized signatory/Director Shri Ramesh
Agarwal. The plaintiff-company is engaged in the business
of packaging, moving and providing logistic services and has
CS(OS)No. 1486/2011 Page 1 of 32
been using the trade marks AGARWAL PACKERS &
MOVERS & DRS Group (Logo). Initially, this business was
started in the name of a partnership firm M/s AGARWAL
PACKERS & MOVERS, which on formation of the plaintiff-
company was merged into it vide agreement dated 15 th
April, 1993. The trade mark AGARWAL PACKERS &
MOVERS is registered in the name of the plaintiff-company
in a number of classes, including class 39 for providing
transporters and goods carriers, packers and storage of
goods and travelling arrangement services and in class 17
for packaging storage, etc. The plaintiff also holds copyright
in the artistic work of AGARWAL PACKERS & MOVERS
(LOGO). DRS Group (Logo) is also a registered trademark of
the plaintiff in class 39. The plaintiff-company had a
turnover or Rs 310 crores in the year 2008-2009 and Rs
360 crores in the year 2009-10. The plaintiff claims to have
incurred advertisement expenditure of Rs 1 crore 85 lakh
and Rs 2 crore 50 lakh respectively during the aforesaid two
years.
2. Defendant No. 1 DRS Dilip Roadlines (Pvt.) Ltd. is
a company managed and owned by defendants No. 2 and 3,
who are also the directors in the plaintiff-company. It is
CS(OS)No. 1486/2011 Page 2 of 32
alleged that investigations conducted by the plaintiff-
company have revealed that defendant No. 1 has printed
quotations bearing various trademarks owned by the
plaintiff-company, including the trademark Agarwal Packers
& Movers. The quotations also provide for payment to be
made in the name of defendant No. 1-company. According
to the plaintiff-company, initially, quotation is given to the
customer representing to them as if it was for and on behalf
of the plaintiff-company and when the order is confirmed, a
certificate is issued to the customer for an endorsement
from him that he had engaged Agarwal Packers & Movers
(Proprietor M/s DRS Dilip Roadlines (Pvt.) Ltd.) for
transportation of his belongings and the invoicing to the
customer is also done in the name of defendant No. 1-
company. The defendants have also issued advertisements
using the trademark Agarwal Packers & Movers on them
and when a telephone call is made on a telephone number
given in the advertisement, the pre-recorded message says
"Welcome to Agarwal Packers & Movers". The person who
answers the phone introduces himself as Agarwal Packers &
Movers and eventually, orders are booked in the name of
defendant No.1-company. The plaintiff has sought an
CS(OS)No. 1486/2011 Page 3 of 32
injunction, restraining the defendant for using its registered
trademarks Agarwal Packers & Movers, DRS GROUP logo
and Dilip Roadlines (Pvt.) Ltd., either as a trade name or
domain name and from passing off its services and
businesses as those of the plaintiff-company.
3. In their written statement, the defendants have
taken a preliminary objection that Mr Ramesh Agarwal is
not competent to act, the plaintiff on behalf of the plaintiff-
company, has concealed material facts from this Court by
not disclosing that Mr Ramesh Agarwal has been sued by
the plaintiff-company, in Secunderabad, for infringement of
its trademarks. It is also alleged that the Board Resolution
dated 25th January, 2007, relied upon by the plaintiff, is a
fake and forged document. It is further alleged that Mr
Ramesh Agarwal has floated a company by the name of
Agarwal Packers & Movers Pvt. Ltd and diverted the
business of the plaintiff-company to that company by using
its name, brand, logo, etc. It is also alleged that since Mr
Ramesh Agarwal and Mr Dinesh Agarwal had siphoned off
funds of the plaintiff-company and played frauds upon it, a
family meeting took place on 18th March, 2009 in the
presence of the representative of Kotak Mahindra Bank,
CS(OS)No. 1486/2011 Page 4 of 32
which is a strategic investor in the plaintiff-company. In the
meeting, a decision was taken for geographical division of
the operations of the plaintiff-company. Thereafter, Mr
Ramesh Agarwal and Mr Rajinder Agarwal formed a group
taking the operational divide as the division of the business
and also started doing business outside their areas. In view
of these acts of Mr Ramesh Agarwal and Mr Rajinder
Agarwal, the defendants were constrained to carry on
business under the name and style of M/s DRS Dilip
Roadlines Pvt. Limited and receive payment from the
customer in the name of defendant No. 1-company.
4. Though the suit pertains a number of trademarks
owned by the plaintiff-company, the arguments by the
parties were advanced only with respect to use of
trademarks Agarwal Packers & Movers bearing registration
No. 1275683 and DRS GROUP (Label) bearing registration
No. 1480427 which were subject matter of the interim order
dated 03rd June, 2011.
5. It is not in dispute that the trademarks Agarwal
Packers & Movers, DRS GROUP logo are owned by the
plaintiff-company and are duly registered in its name.
6. Section 29 of Trademarks Act, to the extent it is
CS(OS)No. 1486/2011 Page 5 of 32
relevant provides that a registered trade mark is infringed
by a person who, not being a registered proprietor or a
person using by way of permitted use, uses in the course of
trade, a mark which is identical with that trade mark, in
relation to goods or services in respect of which the trade
mark is registered and in such manner as to render the use
of the mark likely to be taken as being used as a trade
mark. Sub-Section 29 (2), to the extent it is relevant,
provides that a registered trade mark is infringed by a
person who, not being a registered proprietor or a person
using by way of permitted use, uses, in the course of trade,
a mark which because of its identity with the registered
trade mark and the similarity of the goods or services
covered by such registered trade mark is likely to cause
confusion on the part of the public or is likely to have an
association with the registered trademark.
"Registered user" has been defined in 2(x) of the
Act to mean a person who is for the time being registered as
such under Section 49. Section 49 of the Act prescribes a
procedure for registration of a person as a registered user of
the trademark. Registered proprietor as well as the
proposed registered user have to jointly apply in writing to
CS(OS)No. 1486/2011 Page 6 of 32
the Registrar in the prescribed manner and such an
application is to be accompanied by the documents
prescribed in clause (a) and (b) of sub-Section (1) of Section
49. On the requirement of sub-Section (1) being complied
with, the Registrar is to register the proposed registered
user in respect of goods and services as to which he is so
satisfied.
7. Admittedly, defendant No.1-company does not own
the trademarks in question which stand registered in the
name of the plaintiff-company. Since neither the procedure
prescribed in Section 49 has admittedly been followed nor
defendant No. 1-company has been registered under Section
49 (2) of the Act, it cannot be said that defendant No. 1 is a
registered user of trademarks in question.
8. It is not in dispute that the trademarks Agarwal
Packers & Movers and DRS GROUP logo are being used by
defendant No.1-company. The advertisement published in
Times of India, New Delhi on 30th May, 2011 would show
that the trademark Agarwal Packers & Movers has been
prominently used by defendant No. 1 which also claimed
that it was a DRS Group company.
9. The quotations submitted by defendant No. 1,
CS(OS)No. 1486/2011 Page 7 of 32
copies of which have been filed by the plaintiff-company as
Annexure A to the plaint would show that DRS GROUP logo
as well as the trademark Agarwal Packers & Movers had
been prominently used on them and the quotations also
contain stipulation that payment is to be made in favour of
DRS Dilip Roadlines Private Limited. In fact, the receipt,
issued by defendant No. 1, describes it as an associate of
DRS Logistics Private Limited and Agarwal Packers &
Movers. In fact, this is not the case of the defendants that
they are not using the trademark Agarwal Packers & Movers
and DRS Group logo, their case is that since Mr Ramesh
Agarwal, Mr Dinesh Agarwal and Mr Rajinder Agarwal had
formed a group to harm their interests, they were compelled
to use the aforesaid marks and receive payment in the name
of defendant No.1-company. Since defendant No. 1 is
neither the proprietor nor the registered user of the
trademarks Agarwal Packers & Movers and DRS GROUP
logo, it has absolutely no right to use them and any such
use by defendant No. 1 would amount to infringement of
these trademarks, which are owned by the plaintiff-
company.
10. It was contended by the learned counsel for the
CS(OS)No. 1486/2011 Page 8 of 32
defendants that in the meeting of the Board of Directors
held on 18th September, 2009, the defendants were
permitted to use these trademarks and thereby the plaintiff-
company had acquiesced in the use of trademarks in
question by them. The relevant extract from the minutes of
the meeting held on 18th September, 2009 read as under:-
"The Chairman referred to the Share
Subscription-cum-Shareholders
Agreement dated February 6, 2007
executed with the Investor whereunder it
was agreed that the business of the
Company shall be done only in DRS
Logistics Private Limited.
The Chairman stated that he has received
emails containing information relating to
DRS Dilip Roadlines Private Limited
("DRS Dilip Roadlines") and Agarwal
Packers & Movers Private Limited
("Agarwal Packers & Movers"), being
companies where allegedly business of
the Company is being diverted by the
regions controlling the respective
companies.
The Chairman requested the Founder
Directors to provide the reasons for the
operations of these companies and how
can he, as a Director of the Company,
derive any comfort that these companies
and their operations are not prejudicial to
the interest of the company. He also
requested members to provide the names
of other entities set-up by them.
He further stated that he would like to
put on record, and asked Ms Asha to take
CS(OS)No. 1486/2011 Page 9 of 32
note of the same, that none of the
promoters/founders of the Company are
entitled to float any entity in similar
business as that of DRS Logistics Private
Limited except with the prior written
approval of the Investor and why and how
these companies and their operations
have come into existence without the
prior consent of the Investor.
Mr A.K. Agarwal stated that the business
was commenced in DRS Dilip Roadlines
on knowing that business was being
conducted through Agarwal Packers &
Movers by the othr Founder Directors. He
stated that the DRS Dilip Roadlines was
an old entity which was converted into a
private limited company. The Chairman
inquired that does it mean that DRS Dilip
Roadlinees is a new company, Mr A.K.
Agarwal nodded and said yes it is a new
company. Further, Mr A.K. Agarwal
claimed that DRS Dilip Roadlines has
started business only for servicing the
client, MRF Limited, because he was
facing some practical problem of payment
and bookings on this customer‟s account.
Mr A.K. Agarwal stated that while
Agarwal Packers & Movers is doing other
business, he confirmed that he has not
started any other business in DRS Dilip
Roadlines.
The Chairman intervened and asked him
to focus on DRS Dilip Roadlines. The
Chairman restated that first and foremost
this company, DRS Dilip Roadlines, has
been set up without the prior permission
of the Investor and asked Mr A.K.
Agarwal to give comfort to the Board that
there is no diversion resulting in loss of
business to the Company. Mr A.K.
Agarwal sought some time from the
CS(OS)No. 1486/2011 Page 10 of 32
Chairman to discuss the point internally
with Mr Dayanand Agarwal and Mr
Sanjay Agarwal as to what comfort could
be given to the Board. The Chairman
reiterated that he should also respond as
to why DRS Dilip Roadlines was formed
without the consent of the Board. To this
Mr A.K. Agarwal responded that there are
many things that have been done without
the consent of the Board and this is one
of such hundred things The Chairman
stated that this doesn‟t absolve the
wrongdoings and that he would like Mr
A.K. Agarwal to state how he intends to
set these things right."
11. In Power Control Appliances (1994) 2 SCC 448,
Supreme Court, inter alia, observed as under:
"Acquiescence is sitting by, when another
is invading the rights and spending money
on it. It is a course of conduct inconsistent
with the claim for exclusive rights in a
trade mark, trade name etc. It implies
positive acts; not merely silence or inaction
such as is involved in laches. In Harcourt
v. White10 Sr. John Romilly said: "It is
important to distinguish mere negligence
and acquiescence." Therefore,
acquiescence is one facet of delay. If the
plaintiff stood by knowingly and let the
defendants build up an important trade
until it had become necessary to crush it,
then the plaintiffs would be stopped by
their acquiescence. If the acquiescence in
the infringement amounts to consent, it
will be a complete defence as was laid
down in Mouson (J. G.) & Co. v. Boehm".
The acquiescence must be such as to lead
to the inference of a licence sufficient to
create a new right in the defendant as was
laid down in Rodgers v. Nowill12.
CS(OS)No. 1486/2011 Page 11 of 32
"Delay simpliciter may be no defence to a
suit for infringement of a trade mark, but
the decisions to which I have referred to
clearly indicate that where a trader allows
a rival trader to expend money over a
considerable period in the building up of a
business with the aid of a mark similar to
his own he will not be allowed to stop his
rival's business. If he were permitted to do
so great loss would be caused not only to
the rival trader but to those who depend
on his business for their livelihood. A
village may develop into a large town as the
result of the building up of a business and
most of the inhabitants may be dependent
on the business. No hard and fast rule can
be laid down for deciding when a person
has, as the result of inaction, lost the right
of stopping another using his mark. As
pointed out in Rowland v. Michell15 each
case must depend on its own
circumstances, but obviously a person
cannot be allowed to stand by indefinitely
without suffering the consequence."
12. In my view, the aforesaid minutes do not amount
to any permission/acquiescence on the part of the plaintiff-
company with respect to use of the trademarks Agarwal
Packers & Movers and/or DRS Group Logo by defendant No.
1. Defendant No. 2 Mr A.K. Agarwal, when questioned
about the business of defendant No. 1-company, claimed
that this business was started only for serving MRF Limited
because he was facing some practical problem in making
CS(OS)No. 1486/2011 Page 12 of 32
payments on this customer‟s account. He specifically stated
that he had not started any new business in DRS Dilip
Roadlines. In fact, the explanation given by Mr A.K. Agarwal
did not satisfy the Chairman, who asked him to give comfort
to the Board that there was no diversion resulting in loss of
business to the plaintiff-company. The Chairman also
questioned the formation of DRS Dilip Roadlines without
consent of the Board and when Mr A.K. Agarwal stated that
a number of other things had been done without consent of
the Board, the Chairman maintained that this did not
absolve the wrongdoings on the part of Mr A.K. Agarwal.
13. In my view, this resolution at best can mean that
the Board of Directors of the plaintiff-company condoned
the act of defendant No. 1 in serving MRF Limited on
account of some practical problems which Mr A.K. Agarwal
claimed to be facing in respect of payments and bookings on
this customer‟s account. This resolution cannot by any
stretch be interpreted to mean that the Board of Directors of
the plaintiff-company had permitted the use of the
trademark Agarwal Packers & Movers by defendant No. 1-
company and forever. This is not the case of defendant No.
1 that it is using the trademark Agarwal Packers & Movers
CS(OS)No. 1486/2011 Page 13 of 32
and DRS Group Logo only for serving one client MRF
Limited. In fact, the plaintiff-company had not permitted
use of its trademarks by defendant No. 1 even for serving
MRF Limited in future.
14. The defendants have taken a preliminary objection
that the resolution dated 25th January, 2007 is a forged and
fabricated document and in any case, it does not authorize
Mr A.K. Agarwal to file the present suit on behalf of the
plaintiff-company. It, however, transpired during arguments
that though the list of documents filed with the plaint
referred to Board of Resolution dated 06th October, 2006 in
favour of Mr Ramesh Agarwal, the copy filed by the plaintiff
was of the resolution dated 25th January, 2007. The plaint,
however, has no reference to the Resolution dated 25 th
January, 2007. The plaintiff has already placed on record a
copy of the Resolution dated 06th October, 2006. This
Resolution has not been disputed by the defendants and
admittedly, it bears the signature of the father of defendants
No. 2 and 3. A perusal of the resolution passed by the
Board of Directors of the plaintiff-company on 06th October,
2006 would show that vide this Resolution, Mr Ramesh
Agarwal was authorized to file suits for injunction for
CS(OS)No. 1486/2011 Page 14 of 32
infringement of trademark, passing off and unfair
competition before this Court against the
companies/persons for infringement of the trademark of the
plaintiff-company. In view of this resolution, it is difficult to
say that Shri Ramesh Agarwal does not have authority from
the plaintiff-company to file the suit alleging infringement of
the trademark of the plaintiff-company by defendant No. 1-
company.
15. It was vehemently contended by the learned
counsel for the defendants that the plaintiff is not entitled to
equitable and discretionary relief of injunction since it did
not disclose to the Court that a suit has already been filed
against Shri Ramesh Agarwal, Shri Rajinder Agarwal and
their company against Agarwal Packers & Movers (Pvt.) Ltd.
by the plaintiff-company for infringement of its trademarks.
The suit at Secunderabad has been filed through one Mr
Bhoopal Rao, before the First Additional Chief Judge, City
Civil Court.
16. Emanating from equity jurisdiction, injunction is a
discretionary relief. This is made amply clear also by
Section 38 of Specific Relief Act which specifically provides
that a perpetual injunction may be granted to the plaintiff.
CS(OS)No. 1486/2011 Page 15 of 32
The Court is not bound to grant injunction merely because
it is lawful to do so. Even if the plaintiff is able to make out
violation of an alleged right, the Court may still refuse to
protect him, if it is satisfied that looking into his conduct, it
will not be equitable to exercise the discretion in his favour.
The conduct of a party seeking injunction is an
important factor to be taken into consideration by the Court
while exercising its discretion in a matter. The Court relies
upon the pleadings set out and documents filed before it, in
forming the requisite opinion and, therefore, it naturally
expects the injunction seeker to disclose all the material
and relevant facts which would enable the Court to form a
correct opinion and exercise a sound judicial discretion. If a
material fact having bearing on the matter in controversy,
which was in the knowledge of the plaintiff has been
withheld, he would be disentitled to grant of injunction in
his favour. The Court would then rather not enter into
merits of the case and may deny relief to him on this ground
alone. The plaintiff in an injunction suit must come to the
court with clean hands and do nothing which is not
expected from an honest, upright and deserving litigant.
17. Defendant No. 1-company is not a party to the
CS(OS)No. 1486/2011 Page 16 of 32
Civil Suit filed at Secunderabad. The plaintiff is vehemently
disputing the authority of Shri Bhopal Rao to file the
aforesaid suit on behalf of the plaintiff-company. The
proceedings in that suit have admittedly been stayed by
Andhra Pradesh High Court. The case set up in the suit
filed at Secunderabad, through Mr. Bhopal Rao is that
assuming that Agarwal Packers & Movers is not a registered
user of the trademarks in question as is being claimed by
that company and it had infringed the registered
trademarks of the plaintiff-company by using them for its
business purposes, that would have no bearing on the
question as to whether defendant No. 1 has infringed the
trademarks of the plaintiff-company or not. The question
which arises for consideration of the Court in such matters
is as to whether disclosure of the fact withheld by the
plaintiff could have made any difference to the interim order
passed by this Court on 03rd June, 2011. In my view, even
if the plaintiff had disclosed the factum of filing of the suit
by Shri Bhoopal Rao on its behalf at Secunderabad against
Ramesh Agarwal and Rajinder Agarwal, that would have
made no difference to the interim order passed by this Court
since defendant No.1-company has no authority in law to
CS(OS)No. 1486/2011 Page 17 of 32
use the registered trademarks owned by plaintiff-company
and infringement of these trademarks by Agarwal Packers
and Movers (Pvt.) Ltd. does not condone the infringement by
the plaintiff. The subject matter of the suit at
Secunderabad therefore is altogether different from the
subject matter of the present suit. It is, therefore, difficult
to say that the plaintiff has obtained ex parte injunction
from the Court by withholding a material fact.
18. In support of his contention, based on
concealment, the learned counsel for the defendant has
relied upon M/s Seemax Construction (P) Ltd. v. State Bank
of India and Another, AIR 1992 Delhi 197 and Virumal
Praveen Kumar vs. Gokal Chand Hari Chand 87(2000) Delhi
Law Times 327.
In the case of Seemax (supra), this Court inter alia,
observed as under:
"The suppression of material fact by
itself is a sufficient ground to decline
the discretionary relief of injunction. A
party seeking discretionary relief has
to approach the court with clean
hands and is required to disclose all
material facts which may, one way or
the other, affect the decision. A person
deliberately concealing material facts
from court is not entitled to any
discretionary relief. The court can
CS(OS)No. 1486/2011 Page 18 of 32
refuse to hear such person on merits.
A person seeking relief of injunction is
required to make honest disclosure of
all relevant statements of facts
otherwise it would amount to an abuse
of the process of the court."
There is no quarrel with the proposition of law laid
down in this case, but, in my view, the suit filed at
Secundrabad cannot be said to be such a material fact as
would have affected the decision of the Court even on ex
parte injunction and non disclosure of this suit therefore,
does not disentitle the plaintiff to the discretionary relief of
injunction. In that case, the plaintiff had suppressed the
factum of having filed a suit for permanent injunction in
respect of encashment of the bank guarantee and had
further concealed filing of another suit in Munsif Court at
Ganganagar seeking injunction in regard to encashment of
bank guarantee of Rs 4,38,000/-. In these circumstances,
the Court was of the view that a material fact had been
concealed by the plaintiff from the Court and had not made
full, complete and honest disclosure of the material fats.
The facts here are altogether different.
In Virumal Praveen Kumar (supra), the plaintiff
filed a suit claiming to be lawful proprietor of the trademark
CS(OS)No. 1486/2011 Page 19 of 32
„555‟ and claimed that it was registered under an
application dated 30 th July, 1991. The plaintiff concealed
from the Court that a suit had been filed against it by M/s.
Needle Industries and William Prim GmbH & Co. Ltd.,
seeking relief of infringement of the trademark „555‟ and
when the defendant disclosed this fact to the Court, the
plaintiff, tried to take advantage of an incorrect suit number
having been given by the defendant to claim that no such
suit had been filed against it. It was for this reason that the
Court hold that the plaintiff had suppressed the vital fact on
the dispute before it and, therefore, was not entitled to
interim injunction which he had obtained from the Court.
However, as noted earlier, the suit at Secundrabad has not
been filed against DRS Logistics Private Limited though it
has been filed against Ramesh Chand Agarwal and his
company Agarwal Packers & Movers Private Limited. That
suit has no bearing on the question of infringement of the
trademarks of the plaintiff-companies by defendant No. 1.
Of course, it would have been desirable had the plaintiff
disclosed the suit filed at Secundrabad, but, considering the
nature of the controversy involved in that suit and the
question in dispute in the suit before this Court, it cannot
CS(OS)No. 1486/2011 Page 20 of 32
be said that failure of the plaintiff to disclose the aforesaid
suit amounts to suppression of a fact material to this extent
that the plaintiff-company which owns these registered
trademarks should be deprived of its right to seek
injunction against infringement of those marks by
defendant No.1-company.
19. The learned counsel for the defendants has also
submitted copies of the judgments Micolube India Ltd. v.
Maggon Auto Centre 150 (2008) DLT 458, Satish Khosla
vs. M/s Eli Lilly Ranbaxy Ltd. and Anr. 71 (1998) DLT 1,
Smt Champa Arora v. Shiv Lal Arora 94 (2001) DLT 658,
Vijay Sayal and Anr. v. State of Punjab (2003) 9 SCC 401,
Udai Chand v. Shankar Lal (1978) 2 SCC 209, S.P.
Chengalavaraya v. Jagannath (1994) 1 SCC 1, Rajabhai
Abdul Rehman Munshi v. Vasudev Dhanjibhai Mody AIR
1964 SC 345 on the issue of suppression of material facts.
There is no dispute with the proposition of law applied in
these cases, but, in the facts and circumstances of the case,
I do not think that failure of the plaintiff to disclose the suit
at Secundrabad against Agarwal Packers & Movers Private
Limited, Ramesh Agarwal and Rajinder Agarwal, amounts to
suppression of material facts and disentitles the plaintiff
CS(OS)No. 1486/2011 Page 21 of 32
from claiming injunction against use of its registered
trademarks by defendant No.1.
20. On the question of acquiescence and permissive
user, the learned counsel for the defendant has submitted
copies of decisions in Hari Narain v. Badri Das AIR 1963
SC 1558, Vee Excel Drugs and Pharmaceuticals Ltd. HAB
Pharmaceuticals and Research LIM 2009 (111) DRJ 192.
M/s Ansul Industries v. M/s Shiva Tabacoo Company ILR
(2007) I Delhi 409, M/s Power Control Appliances and
Ors. v. Sumeet Machines Pvt. Ltd. (1994) 2 SCC 448,
Ramdev Food Products Pvt. Ltd. v. Arvindbhai Rambhai
Patel and Ors (2006) 8 SCC 726, P. John Chandy and Co.
Pvt. Ltd v. John P. Thomas (2002) 5 SCC 90, M/s
Hindustan Pencils Pvt. Ltd. v. M/s India Stationery
Proucts Co. And Anr. ILR (1989) I Delhi 115, Khoday
Distilleries v. Scotch Whiskey Association and Ors.
(2008) 10 SCC 723, Marie Stops Intl. v. Parivar Seva
Sanstha 2010 (43) PTS 141 (Del), Baker Hughes and Anr v.
Hiroo Khushlani and Anr. 74 (1998) DLT 715.
He has relied upon the following observations
made by this Court in Ansul Industries (supra):
"Implied or express consent to use of a
CS(OS)No. 1486/2011 Page 22 of 32
trademark under Section 30(1)(b) of
the Act is a statutory defense to a suit
for infringement. Consent involves
affirmative acceptance and not merely
standing by and absence of objection.
Affirmative acceptance can be in
writing and can be termed as express
consent. Implied consent can be oral
and by conduct. The conduct,
however, must indicate acceptance
and not mere inaction or inactivity.
Inaction in every case without
anything more does not lead to an
inference of implied consent. However
where the plaintiff has laid by and
inspite of his right by his conduct has
encouraged the defendant to alter his
condition and the latter has acted
upon this faith of encouragement so
held out, the plaintiff loses his claim to
claim injunction"
Section 30 of Trademarks Act has absolutely no
application to the facts of this case and in fact, no defence
based on Section 30 of the Act has been taken by the
defendants. In this case, the appellant M/s Ansul
Industries as well as the respondent M/s Shiva Tobacco
were manufacturing and selling the same product, i.e., chewing tobacco, the appellant under the name „Udta Panchhi‟ and the respondent under the name „Panchhi Chhap‟. The respondent was also the registered user of the brand name „Punchhi Chhap‟ under the Trade and Merchandise Marks Act, whereas there was no registration CS(OS)No. 1486/2011 Page 23 of 32 of the trademark „Udta Panchhi‟ in favour of the appellant. In para 44 of the judgment, this Court referred to certain principles of law in the matter of granting interim injunction in such matters and principle (vi) referred therein read as under:-
"Where initial adoption by the defendant itself is vitiated by fraud and/or is dishonest, delay is not a valid ground to allow misuse. If user is at the inception is tainted by fraud and dishonesty, continuous use does not bestow legality."
The learned counsel for the defendant has relied upon the following observations made by the Supreme Court in Ramdev Food Products Pvt. Ltd. (supra):-
"103. Acquiescence is a facet of delay. The principle of acquiescence would apply where: (i) sitting by or allow 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.
104. In M/s. Power Control Appliances and Others v. Sumeet Machines Pvt. Ltd. [(1994) 2 SCC 448], this Court stated:
"26. Acquiescence is sitting by, when another is invading the rights and spending money on it. It is a course of CS(OS)No. 1486/2011 Page 24 of 32 conduct inconsistent with the claim for exclusive rights in a trade mark, trade name etc. It implies positive acts; not merely silence or inaction such as is involved in laches."
105. In an infringement of trade mark, delay by itself may not be a ground for refusing to issue injunction as has been observed by Lahoti, J. (as His Lordship then was) in Midas Hygiene Industries (P) Ltd. v. Sudhir Bhatia and Others [(2004) 3 SCC 90] in the following terms:
"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." (Emphasis supplied).
106. The defence of acquiescence, thus, would be satisfied when the plaintiff assents to or lay 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."
In P. John Chandy and Co. Pvt. Ltd (supra), Supreme Court made a distinction between acquiescence CS(OS)No. 1486/2011 Page 25 of 32 and consent, in a dispute between a landlord and tenant. I, however, find no such proposition in this case as would be of help to the defendants in any manner.
The following observations made by this Court in Hindustan Pencils (supra) have been relied upon by the learned counsel for the plaintiff:-
"It would appear that 'inordinate delay', which has never been defined by the Courts so far, would be analogous or similar to 'laces'. In Whitman v. Disney Productions, 263 F2d 229 it was observed by the 9th Circuit Court of Appeal in U.S.A. as follows:
"Mere passage of time cannot constitute laces, but if the passage of time can be shown to have lulled defendant into a false sense of security, and the defendant acts in reliance thereon, laces may, in the discretion of the trial Court, be found."
It would follow, logically, that delay by itself is not a sufficient defense to an action for interim injunction, but delay coupled with prejudice caused to the defendant would amount to 'laces'."
However, neither any case of latches nor of inordinate delay has been set up by the defendant in the written statement nor is it otherwise made out in the facts and circumstances of the case.
CS(OS)No. 1486/2011 Page 26 of 32
In this case, the plaintiffs were the registered proprietors of the trademark „Nataraj‟ with device of „Nataraj‟ in respect of a number of stationery products, including pins and clips. The defendants in that case had obtained copyright in a label similar to the label of the plaintiffs in respect of the pins. The case of the plaintiffs was that they had come to know about copyright registration granted to the defendants only in the middle of the year 1995, whereas the case of the defendants was that the plaintiffs were aware of the use of the trademark „Nataraj‟ by them sine the year 1982 when the advertisement of the plaintiffs and defendants appeared in the magazine. It was contended by the defendants that there was six years delay on the part of the plaintiffs in filing the suit and, therefore, they were not entitled to injunction. This Court in para 31 of the judgment, inter alia, observed as under:
"If a party, for no apparent or a valid reason, adopts, with or without modifications, a mark belonging to another, whether registered or not, it will be difficult for that party to avoid an order of injunction because the Court may rightly assume that such adoption of the mark by the party was not an honest one. The Court would be justified in concluding that the defendant, in such CS(OS)No. 1486/2011 Page 27 of 32 an action, wanted to cash in on the plaintiff's name and reputation and that was the sole, primary or the real motive of the defendant adopting such a mark. Even if. in such a case, there may be an inordinate delay on the part of the plaintiff in bringing a suit for injunction, the application of the plaintiff for an interim injunction cannot be dismissed on the ground that the defendant has been using the mark for a number of years."
However, in para 33 of the judgment, this Court expressed the following view:
"As already noted, acquiescence may mean an encouragement by the plaintiff to the defendant to use the infringing mark. It is as if the plaintiff wants the defendant to be under the belief that the plaintiff does not regard- the action of the defendant as being vocative of the plaintiff's rights. Furthermore, there should be a tacit or an express assent by the plaintiff to the defendant's using the mark and in a way encouraging the defendants to continue with the business. In such a case the infringer acts upon an honest mistaken belief that he is not infringing the trade mark of the plaintiff and if, after a period of time when the infringer has established the business reputation, the plaintiff turns around and brings an action for injunction the defendant would be entitled to raise the defense of acquiescence. Acquiescence may be a good defense even to the grant of a permanent injunction because the defendant may legitimately contend that the encouragement of the plaintiff to the CS(OS)No. 1486/2011 Page 28 of 32 defendant's use of the mark in effect amounted to the abandonment by the plaintiff of his right in favor of the defendant and, over a period of time, the general public has accepted the goods of the defendant resulting in increase of its sale. It may, however, be stated that it will be for the defendant in such cases to prove acquiescence by the plaintiff. Acquiescence cannot be inferred merely by reason of the fact that the plaintiff has not taken any action against the infringement of its rights."
In Khoday Distilleries (supra), Supreme Court observed that 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.
In Marie Stops Intl. (supra), the Court quoted Ziff Davis with respect to permissive user. I fail to appreciate how these observations can be of any help to the defendants in a case of infringement of trademark. When defendant No.1 is neither the proprietor nor the registered user of trademarks in question. I have also gone through the observations made in the case of Baker Hughes and Anr (supra), but, I find no such proposition of law in this case as would be any help to the defendants.
CS(OS)No. 1486/2011 Page 29 of 32
The learned counsel for the defendants has also referred to Kale and Ors. v. Deputy Director of Consolidation and Ors. (1976) 3 SCC 119 and Rajni Dua and Ors. v. Bhushan Kumar and Ors. ILR (1998) II Delhi 870 with respect to family arrangement. However, in the present case, no family arrangement permitting the defendants to use the trademarks Agarwal Packers & Movers and DRS GROUP (Label) has been made out. This is not a case where the defendants are using the trademark owned by the plaintiff-company and crediting the receipts in the account of the plaintiff-company. They have been receiving payments in the name of defendant No. 1 and not in the name of the plaintiff-company. In any case, the trademark is owned by the plaintiff which is a corporate entity and defendant No. 1 has no right to use it without its being the registered user for these trademarks.
21. The learned counsel for the defendants vehemently contended that Agarwal Packers & Movers Private Limited, a company formed by Ramesh Agarwal and Rajinder Agarwal was infringing the registered trademarks of the plaintiff- company. The case of the plaintiff is that there was a CS(OS)No. 1486/2011 Page 30 of 32 registered user agreement between the plaintiff-company and Agarwal Packers & Movers Private Limited. The case of the defendants, on the other hand, is that no such agreement has been executed under the authority of the plaintiff-company and in any case the Memorandum and Articles of Association of the plaintiff-company prohibit the plaintiff-company from entering into such an agreement without affirmative vote of strategic investor Kotak Mahindra Bank. In this regard, he relied upon class 22 and 24 of the Articles of Association of the plaintiff-company. I, however, need not go into this aspect of the matter since a suit has already been filed at Secundrabad against Agarwal Packers & Movers Private Limited and that company is not a party to this suit. If Agarwal Packers & Movers Private Limited is infringing the trademarks of the plaintiff- company, it is for the Court at Secundrabad to pass appropriate order against that company if it finds that the suit before it has been file by a person duly authorized by the plaintiff-company in this regard. But, infringement of the trademarks of the plaintiff-company by Agarwal Packers & Movers Private Limited does not entitle defendant No. 1 also to infringe those marks.
CS(OS)No. 1486/2011 Page 31 of 32
22. For the reasons given in the preceding paragraphs, defendant No. 1 is restrained from using the trademarks Agarwal Packers & Movers bearing registration No. 1275683 and DRS GROUP (Logo) bearing registration No. 1480427 on any advertising or promotional material, on its invoice or in any other manner, during pendency of the suit. Interim order dated 03rd June, 2011 stands merged in this order. However, in the facts and circumstances of the case, it is directed that the trial will be fast tracked by appointing a Local Commissioner, at the cost of the plaintiff, to record evidence of the parties in a time bound manner.
The applications stand disposed of.
CS(OS) 1486/2011 and IA No. 11800/2011 (O. 1 R. 10 CPC) List on 12th October, 2011 for disposal of IA.
(V.K. JAIN) JUDGE SEPTEMBER 07, 2011 bg CS(OS)No. 1486/2011 Page 32 of 32