Delhi High Court
Ms Dreams Lingerie Products vs Akash Chawdhary on 21 September, 2022
Author: Navin Chawla
Bench: Navin Chawla
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 05.09.2022
Date of decision: 21.09.2022
+ CS(COMM) 370/2022
MS DREAMS LINGERIE PRODUCTS ..... Plaintiff
Through: Mr.N. Mahabir, Mr.P.C. Arya &
Ms.Nupoor Biswas, Advs.
versus
AKASH CHAWDHARY ..... Defendant
Through: Mr.S.S. Ahluwalia, Mr.Kapil
Choudhary, Mr.Hardik Bedi &
Mr.Sonu Chaudhary, Advs.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
I.A. 8665/2022 & 11026/2022
1. By this order, this Court shall be disposing of the above two
applications; the first filed by the plaintiff, being IA No. 8665 of 2022,
under Order XXXIX Rule 1 and 2 read with Section 151 of the Code of
Civil Procedure, 1908 (in short, „the CPC‟); the second filed by the
defendant, being IA No. 11026 of 2022, under Order XXXIX Rule 4 read
with Section 151 of the CPC.
FACTUAL BACKGROUND
2. It is the case of the plaintiff that the plaintiff is the registered
proprietor of the mark „DREAMS LINGERIE' which was adopted by it
in the year 2003 with respect to the undergarments/lingerie in Class 25. It
claims to be selling and marketing its products under the trade mark
„DREAMS‟ since the year 2006. The details of the registrations and the
pending applications for the mark „DREAMS' or bearing the formative
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mark 'DREAMS' are given by the plaintiff in paragraph 5 of the plaint,
detailed as under:-
S.NO. Application Trademark Dt. Of App. Status Image and
Number with with Type Disclaimer
User Details (if any)
1. 1218380 28/07/2003 Registered Trademark
Proposed to be Journal is
used. Not
available
on the
website of
the
Trademark
Office.
Legal
proceedings
Certificate
Applied
2. 1921771 12/02/2010 Registered Disclaimer
01/07/2009 to the word
dreams and
device of
stars.
3. 3620406 25/08/2017 Registered No
Proposed to be disclaimer
used.
4. 3620407 25/08/2017 Opposed No
Proposed to be disclaimer
used.
3. The plaintiff also gives the figures of turnover with respect to
goods sold under the trade mark 'DREAMS' in paragraph 9 of the plaint,
reproduced as under:-
YEAR TURNOVER IN INR
2008 1,97,81,893
2009 2,92,99,416
2010 2,16,80,956.20
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2011 6,31,40,295.53
2012 6,13,01,917.21
2013 7,85,83,866.99
2014 10,39,91,776.51
2015 12,34,64,864.69
2016 14,64,21,492.30
2017 16,33,35,761.33
2018 20,09,93,626.36
2019 22,89,82,118.77
2020 24,03,51,970.75
2021 26,41,30,536.44
2022 39,81,64,887.10
TOTAL 214,36,25,379.38
4. The plaintiff claims that the long use of the mark „DREAMS‟ by
the plaintiff, entitles it to be declared as a „well-known trade mark‟ in
terms of Section 2(1)(zg) of the Trade Marks Act, 1999 (in short, „the
Act‟).
5. The plaintiff further claims that the defendant who was the
erstwhile distributor of the plaintiff-firm for the territory of Ghaziabad
and Western Uttar Pradesh during the period of 2018 to 31.01.2022, has
adopted a deceptively similar mark, being „DREAM COMFORT', for
the identical goods. The defendant has also applied for registration of its
mark on 10.03.2022 under the application no. 5364877 in Class 25 on a
„proposed to be used‟ basis.
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6. It is further claimed that the father of the defendant, Mr. Ajay
Kumar, was employed as a manager with the plaintiff-firm from the year
2006 to December 2021. It is claimed that the defendant, in his capacity
of being a distributor of the plaintiff-firm, and his father, being the
manager of the plaintiff-firm, had full access to the dealer network,
vendors, trade channels, internal business details, product supply chain,
price points, product demands, product details et cetera and, therefore,
the adoption of a deceptively similar mark is clearly mala fide and
intended to draw a connection with the plaintiff and to ride on its
reputation.
7. It is asserted by the plaintiff that even the trade dress adopted by
the defendant is similar to that of the plaintiff, with the use of the yellow
and white colour among other similarities. The plaintiff gives the
comparison of their products with those of the defendant as under:-
COMPARISON OF PLAINTIFF'S & DEFENDANT'S PRODUCTS
PLAINTIFF'S PRODUCT DEFENDANT'S PRODUCT
FRONT PORTION FRONT PORTION
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BACK PORTION BACK PORTION
TOP PORTION TOP PORTION
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BOTTOM PORTION BOTTOM PORTION
INTERNAL PACKAGING INTERNAL PACKAGING
LABELS OF P ACKAGING LABELS OF PACKAGING
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OUTER CARTON OUTER CARTON
8. This Court, vide order dated 30.05.2022, had granted an ad-interim
injunction in favour of the plaintiff and against the defendant, restraining
the defendant from manufacturing, selling or offering for sale of its
product under the mark „DREAM‟ or another trade mark or logo or
device which is identical to or deceptively similar to the plaintiff‟s trade
mark and trade name „DREAMS‟. The defendant has now filed the
above referred application under Order XXXIX Rule 4 read with Section
151 of the CPC, seeking vacation of the ad-interim injunction granted
vide order of this Court dated 30.05.2022.
SUBMISSIONS ON BEHALF OF THE DEFENDANT
9. It is the case of the defendant that the plaintiff has deliberately
concealed from this Court the fact that the father of the defendant was an
erstwhile-partner of the plaintiff-firm and even the registration of the
trade mark granted under the application no. 1218380, which was
renewed as late as on 17.05.2013 in favour of the plaintiff, records the
name of the father of the defendant as one of the partners of the plaintiff-
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firm. It is asserted that as the plaintiff has deliberately concealed the
above facts, for this reason alone, the ad-interim order of injunction dated
30.05.2022 granted by this Court in its favour is liable to be vacated. In
support, the learned counsel for the defendant has placed reliance on the
judgment of this Court in Triumphant Institute of Management
Education Pvt. Ltd. v. Aspiring Mind Assessment Pvt. Ltd. and Ors.,
2014 SCC OnLine Del 3008 as also of the Division Bench of this Court
in Tenxc Wireless INC. & Anr. v. Andrew LLC & Ors., 176 (2011) DLT
627 (DB).
10. The defendant further pleads that, in any case, the two marks, that
is, „DREAMS LINGERIE‟ of the plaintiff and „DREAM COMFORT‟
of the defendant, are not identical or stated to be deceptively similar.
While the plaintiff uses the word „DREAMS‟, that is in plural, the
defendant is using word „DREAM‟, that is, in singular, and the second
word of the plaintiff‟s mark is „LINGERIE‟ while that of the
defendant‟s is „COMFORT‟.
11. It is further claimed that the word „DREAM‟ is common to trade
and, therefore, not entitled to any protection. In this regard, the defendant
places reliance on various marks registered with the Registrar of Trade
Marks, the details whereof are given in paragraph 13 of his application.
Reliance is also placed on the judgment of this Court in Delhivery
Private Limited v. Treasure Vase Ventures Private Limited, 278 (2021)
DLT 485.
12. The learned counsel for the defendant submits that the
Distributorship Agreement did not have any negative covenant,
prohibiting the defendant from entering the same line of business after
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the termination of its distribution or even otherwise. Therefore, the fact
that the defendant is the erstwhile distributor of the plaintiff-firm is
irrelevant to the suit.
SUBMISSIONS ON BEHALF OF THE PLAINTIFF
13. On the other hand, the learned counsel for the plaintiff submits that
the father of the defendant had retired from the partnership business on
07.03.2005 and had even executed an affidavit recording the said fact. In
the said affidavit, it was further stated that the retiring party was not
concerned with the „name and goodwill, assets and liabilities‟ of the
firm. Thereafter, a Dissolution Deed dated 31.03.2005 was also executed
between the then partners, wherein again, Clauses 8 and 9 reiterated the
aforementioned. Clauses 8 and 9 of the Dissolution Deed dated
31.03.2005 are reproduced as under:-
"8. That the retiring party has agreed to allow
the remaining partner to continue the business
under the same name and style.
9. That the retiring party shall have no
concern, in future, with the name and goodwill of
the firm. He shall not have any claim in the assets
and liabilities of said firm w.e.f. 31st March,
2005."
14. The „retiring party‟ referred hereinabove was Mr. Ajay Kumar, the
father of the defendant.
15. The learned counsel for the plaintiff submits that thereafter a new
partnership was constituted on 02.04.2005, which has since been re-
constituted on 30.06.2016. He submits that, therefore, the father of the
defendant has absolutely no right, title or interest in the trade mark of the
plaintiff-firm. He further submits that the defendant does not deny this
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fact. The defendant also does not deny that the father of the defendant
was being shown as the manager of the plaintiff-firm. In fact, this plea of
the father of the defendant being, in any manner, interested in the trade
mark of the plaintiff-firm, was not even pleaded by the defendant in the
reply dated 05.05.2022 to the cease and desist notice issued by the
plaintiff prior to the institution of the present suit. He submits that,
therefore, the fact that the father of the defendant was the erstwhile-
partner of the plaintiff-firm in whose name the mark was registered, was
not material to the present suit and, rightly and in a bona fide manner,
was not disclosed in the plaint.
16. He further submits that to make necessary corrections in the record
of the Registrar of Trade Marks, the plaintiff has now filed the requisite
applications to record the above change and, while these applications are
pending, this Court would give due effect to the change as described
hereinabove. In support, he places reliance on the judgments of the High
Court of Madras in T.I. Muhammad Zumoon Sahib v. Fathimunnissa,
1959 SCC OnLine Mad 96 and of this Court in M/s. Modi Threads
Limited v. M/s. Som Soot Gola Factory and Another, 1990 SCC Online
Del 375.
17. He further submits that the submission of the learned counsel for
the defendant that the two marks are not identical or deceptively similar
is also liable to be rejected inasmuch as the defendant admits that it was
the distributor of the plaintiff till 31.01.2022. In that relationship, he had
full access to the trade channels of the plaintiff and the adoption of a
similar mark by him is clearly mala fide. In support, he places reliance on
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the judgment of this Court in FMI Limited v. Ashok Jain & Ors., 2006
SCC OnLine Del 1423.
18. On the submission of the counsel of the defendant that the word
„DREAM‟ is common to trade, he submits that mere presence of the
mark on the Register of Trade Marks is not an evidence of its use and,
therefore, in absence of any evidence being led by the defendant that
there are other products which are available in the market which are
using the mark „DREAM‟, no cognizance can be taken of the
defendant‟s submission in this regard. In support of this assertion, he
places reliance on the judgment of the Supreme Court in Corn Products
Refining Co. v. Shangrila Food Products Ltd., AIR 1960 SC 142.
19. He finally submits that the defendant itself has applied for
registration of its mark „DREAM COMFORT' and, therefore, is
estopped from contending that the word „DREAM' is generic in nature.
In support of this contention, he places reliance on the judgment of this
Court in Anil Verma v. R.K. Jewellers SK Group and Others, 2019 SCC
OnLine Del 8252.
20. On the submission of the defendant there is no negative covenant
as far as the Distributorship Agreement is concerned, the learned counsel
for the plaintiff fairly admits that it is not the case of the plaintiff that the
defendant cannot carry on the business in the same goods; the plaintiff‟s
objection is only to the adoption of the similar mark being used by the
defendant for the same goods as that of the plaintiff.
21. This Court has enquired from the learned counsel for the defendant
if the defendant claims that his father has any subsisting right in the trade
mark of the plaintiff. The learned counsel for the defendant fairly admits
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on instructions that it is not the case of the defendant that his father has
any subsisting rights in the trade mark of the plaintiff.
ANALYSIS AND FINDINGS
22. This Court has considered the submissions made by the learned
counsels for the parties.
23. As far as the submissions of the learned counsel for the defendant
that ad-interim injunction granted vide order of this Court dated
30.05.2022 is liable to be vacated on the ground of suppression of facts
on the part of the plaintiff, this Court is unable to agree with the same. It
is not the case of the defendant that his father, Mr. Ajay Kumar, has any
subsisting right in the trade mark of the plaintiff-firm. This was admitted
by the learned counsel for the defendant during the course of his
submissions. Even otherwise, the plaintiff has been able to show prima
facie that Mr. Ajay Kumar has relinquished all his rights, title or interest
in the trade mark of the plaintiff, if any. Mere renewal of the registration
of the trade mark and/or failure of the plaintiff to rectify the Register of
the Trade Marks would not itself create any right in favour of Mr. Ajay
Kumar and in fact, none is claimed by him also in the present suit.
24. It is trite law that the plaintiff, in their plaint is only to disclose the
material particulars. In the absence of any claim being made by Mr. Ajay
Kumar and/or it being the case of the defendant that he is entitled to use
the plaintiff‟s trade mark because of his father‟s right in the same, the
fact that Mr. Ajay Kumar was at one point of time a partner in the
plaintiff-firm and/or his name appears to be still shown in the Register of
Trade Marks as a part of the plaintiff-firm, in the opinion of this Court,
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was not a material fact to be disclosed for which the ad-interim order of
injunction granted on 30.05.2022 by this Court needs to be vacated.
25. In this regard, it is also to be emphasised that in reply to the cease
and desist notice issued by the plaintiff prior to the institution of the
present suit, the defendant had not taken the plea of him using the mark
because of any right subsisting in Mr. Ajay Kumar as the erstwhile-
partner in the plaintiff-firm. Therefore, even the defendant did not
consider this fact material enough to be pleaded in his reply to the cease
and desist notice.
26. The judgments of this Court in Triumphant Institute of
Management Education Pvt. Ltd (supra) and of the Division Bench of
this Court in Tenxc Wireless INC (supra), therefore, would not come to
aid to the defendant. In the present case, the plaintiff has adequately
explained why the fact of Mr. Ajay Kumar being the erstwhile-partner of
the plaintiff-firm was neither relevant nor material to the claim made in
the present suit.
27. On the submission of the learned counsel for the defendant that the
two marks, that is „DREAMS LINGERIE‟ of the plaintiff and „DREAM
COMFORT‟ of the defendant are not deceptively similar, the same is
again liable to be rejected. The test of comparing two marks is now well-
settled. In Corn Products Refining Co. (supra), the Supreme Court has
held that the said question has to be approached from the point of view of
a man of average intelligence and of imperfect recollection; to such a
man, the overall structural and phonetic similarity and the similarity of the
idea in the two marks is reasonably likely to cause confusion between
them. The test to be applied is the overall impression created by the mark
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and not the impression created by the meticulous comparison of the two
marks examined by a microscope to find differences. "The true test", as
observed by Sargant, J. "is whether the totality of the proposed trade
mark is such that it is likely to cause mistake or deception, or confusion,
in the minds of persons accustomed to the existing trade mark." [Law of
Trade Marks and Passing off by P. Naryanan, 6th Edition, page 332,
referring to Egg Products Appln. (1922) 39 RPC 155]. It is also well-
settled law that where one mark contains the whole of the other or its
essential features, it is a factor to be taken into consideration. It should be
considered whether the individuality of the common part is lost or
whether the common part stands out prominently.
28. In the matter of an application by Rysta Ld. to register a Trade
Mark, (1943) 60 RPC 87, it has been held that "the answer to the question
whether the sound of one work resembles too nearly the sound of another
so as to bring the former within the limits of section 12 of the Trade
Marks Act, 1938, must nearly always depend on first impression, for
obviously a person who is familiar with both words will neither be
deceived nor confused. It is the person who only knows the one word, and
has perhaps an imperfect recollection of it, who is likely to be deceived or
confused. Little assistance, therefore, is to be obtained from a meticulous
comparison of the two words, letter by letter and syllable by syllable,
pronounced with the clarity to be expected from a teacher of elocution."
29. It is also a well-settled position that in a device mark, the Court
would also grant protection to the essential features of the mark. In South
India Beverages Pvt. Ltd. v. General Mills Marketing Inc., (2015) 61
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PTC 231 (Del.), a Division Bench of this Court held that "though it bears
no reiteration that while a mark is to be considered in entirety, yet it is
permissible to accord more or less importance or „dominance‟ to a
particular portion or element of a mark in case of composite mark. Thus,
a particular element of a composite mark which enjoys greater
prominence vis-a-vis other constituent elements, may be termed as a
„dominant mark‟." It was further held that "the principle of „anti-
dissection‟ does not impose an absolute embargo upon the consideration
of the constituent elements of a composite mark. The said elements may be
viewed as a preliminary step on the way to an ultimate determination of
probable customer reaction to the conflicting composites as a whole.
Thus, the principle of „anti-dissection‟ and identification of „dominant
mark‟ are not antithetical to one another and if viewed in a holistic
perspective, the said principles rather compliment each other."
30. Reference in this regard may also be made to the judgement of a
Co-ordinate Bench of this Court in V. Guard Industries Ltd. v.
Crompton Greaves Consumer Electricals Ltd., 2022 SCC OnLine Del
1593.
31. In the present case, in the marks of the plaintiff and the defendant,
the word 'DREAM' is an essential feature; which is common to both the
marks. Only because it is plural in the mark of the plaintiff and singular
in the mark of the defendant, would make no difference when the two
marks are compared.
32. In the present case, there is an added-feature which would also
make a defence raised by the defendant liable to be rejected, that is, the
defendant is the erstwhile-distributor of the plaintiff. In FMI Ltd.
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(supra), this Court, while dealing with the case where the defendant was
a distributor of the plaintiff-firm has observed as under:
"19. Before comparing the two trademarks for
any similarities in the present case, one has to
keep in mind the background in which the
defendant adopted the trademark in respect of its
product. It is not disputed that M/s. Sudesh
Hardware Pvt. Ltd. (defendant No. 3), of which
Mr.Ashok Jain (defendant No. 1) was a henchman,
was the distributor of the plaintiff for over 25
years. As distributor, they were selling the goods
of the plaintiff with trademark FREEMANS.
Mr.Ashok Jain has now started the firm
FREEDOM MEASURES (defendant No. 2) and
under banner he has started manufacturing the
same product, namely measuring tapes, and has
adopted the trademark FREEDOM. Case of the
plaintiff is that, as distributor of the plaintiff's
product for 25 years, Mr. Ashok Jain came to be
recognized in the market as FREEDOM
FITEWALLA and with such a reputation acquired
while working as distributor for the plaintiff,
adoption of the trademark FREEDOM, after
starting its own business and producing the same
product, would obviously not be bona fide. It is
clear that the defendants wanted to encash upon
the goodwill of the plaintiff's product in which
they had themselves trader for quarter of a
century. When the two words FREEDOM and
FREEMANS are compared in the aforesaid
backdrop, and the person who was up to now
selling the goods of FREEMANS and comes out
with the goods with the trademark FREEDOM,
with same customers, it is bound to cause
confusion in the minds of the customers. The two
words may not be exactly same, but adoption of
the word FREEDOM, which resembles closely
with the trademark FREEMANS of the plaintiff,
with same clientele, may lead to confusion. It is
the word FREE appearing in the plaintiff's
trademark which has been tried to be exploited by
adopting the word FREEDOM. Had there not
been any association of the defendants with the
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plaintiff and they had not represented the plaintiff
as its distributors for a long period of 25 years by
selling their goods and establishing their own
reputation as FREEDOM FITEWALLA, things
could have been different. The customers who had
been buying the goods of the plaintiff from the
defendants earlier with prominence of FREE in
their mind are likely to be confused that these are
the same goods sold by the defendants and,
therefore, are of the same quality and reputation.
The fact that when the defendants were selling the
goods of the plaintiff with the trademark
FREEMANS and came to be known as
FREEDOM FITEWALLA, it would show that the
consumers did not perceive any difference
between the words FREEMAN and FREEDOM. It
is the word FREE appearing in the plaintiff's
trademark FREEMANS which strikes in the mind
of the users of the goods of the plaintiff for more
than 50 years. Therefore, this case would almost
be same as the case of Atlas Cycle Industries Ltd.
v. Hind Cycle Ltd., 1973 ILR Delhi Vol. 1 where
the defendant, who had adopted the trademark
ROYAL STAR, was injuncted as it was found that
the plaintiff's trademark EASTERN STAR had
acquired a reputation and came to be known to
the public as STAR cycles or TARA BRAND
CYCLES.
20. In view of the above attempt on the part of
the defendants to show that the manner and style
in which the two trademarks are written is
different and, therefore, it would not lead to
confusion would be of no avail. Thus, certain
distinctions sought to be projected by the
defendants would not be able to remove the
confusion which is likely to arise in the minds of
the customers. It is stated at the cost of repetition
that the adoption of the trademark FREEDOM by
the defendants is utterly mala fide. When the
defendants had been the distributors of the
plaintiff's products and sold those products with
the trademark FREEMANS for a long period and
wanted their own production of the same product,
why the word FREEDOM only came in the minds
of the defendants to be adopted as trademark,
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which bears close resemblance to the plaintiff's
trademark FREEMANS, is one thing which is not
explained by the defendants at all. It is a clever
device opted by the defendants to adopt the
trademark FREEDOM and, thereafter, in the
cartons, etc. put some distinguishing features so
as to press the same as defense when the plaintiff
takes legal action, as the present one, against the
defendants. The attempt is to confuse the
customers by adopting the same name and
features and to confuse the Court by trying to
show the alleged dissimilarities. Such an attempt
has to fail." (Emphasis Supplied)
33. The above judgement will apply with full force in the facts of the
present case. While the defendant is within his right to carry out a
competing business with the plaintiff, it is not entitled to use a
deceptively similar mark for such competing business, thereby trying to
exploit his earlier association with the plaintiff.
34. The submission of the learned counsel for the defendant that the
word „DREAM‟ is common to trade is also liable to be rejected. The
defendant, apart from placing reliance on certain marks registered with
the Registrar of Trade Marks, has not filed any proof of the actual
product being sold under those marks. The Supreme Court in Corn
Products Refining Co. (supra) has held that the presence of a mark in the
Register of Trade Marks does not prove its user at all. It is possible that
the mark may have been registered but not used. It is not permissible to
draw any inference as to their user from the presence of the marks on the
register. Even otherwise, the defendant himself having applied for
registration of his mark is estopped from contending that the mark
„DREAM' or „DREAMS' is descriptive or generic in relation to the
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goods in question. Reference in this regard may be had to the judgment
of this Court in Anil Verma (supra).
35. The submission of the learned counsel for the defendant that Mr.
Ajay Kumar, the father of the defendant, has not been paid his dues under
the Dissolution Deed dated 31.03.2005 is not relevant to the present suit.
Even if the above submission is to be accepted, it would not give any
right to the defendant to infringe the mark of the plaintiff and/or pass of
its goods as those of the plaintiff. Mr. Ajay Kumar would have to pursue
his own remedy for recovering the amount due to him, if any, against the
plaintiff in an independent proceeding before an appropriate forum of
law.
36. The submission of the defendant that the plaintiff has been unable
to show the reputation and goodwill of the plaintiff in its mark, in the
absence of the audited accounts of the plaintiff having been filed, is also
liable to be rejected. The plaintiff clearly is not only the prior adopter but
also the registered proprietor of the mark. In fact, the defendant admits
that he was the distributor of plaintiff‟s products. The defendant
therefore, cannot challenge the reputation and goodwill of the plaintiff in
its mark.
RELIEF
37. In view of the above, this Court finds no merit in the application of
the defendant, being I.A. No. 11026 of 2022. The same is accordingly
dismissed. I.A. No. 8665 of 2022 is allowed and the ad-interim order of
this Court dated 30.05.2022 is confirmed to last during the pendency of
the present suit.
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38. It is, however, clarified that any observation made by this Court in
the present order shall not in any manner influence this Court in the final
adjudication of the suit. The same are prima facie in nature.
CS(COMM) 370/2022
39. List before the learned Joint Registrar (Judicial) for the completion
of pleadings and further proceedings on 28th October, 2022.
NAVIN CHAWLA, J.
SEPTEMBER 21, 2022/rv/arya/AB/Ais Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:21.09.2022CS(COMM) 370/2022 Page 20 of 20 18:31:39