Delhi High Court - Orders
Peps Industries Private Limited vs Kurlon Limited on 13 July, 2022
Author: Navin Chawla
Bench: Navin Chawla
$~6
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(COMM) 174/2019
PEPS INDUSTRIES PRIVATE LIMITED ..... Plaintiff
Through: Ms.Suveni Bhagat, Adv.
versus
KURLON LIMITED ..... Defendant
Through: Mr.Kumar Sudeep & Mr.Anuj Singh,
Advs.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
ORDER
% 13.07.2022 I.A. 6970/2022
1. This application has been filed by the defendant under Section 124 of the Trade Marks Act, 1999 (hereinafter referred to as 'the Act'), praying for a stay of the present Suit till the rectification application, being ORA/24/2019/TM/CHN, filed by the defendant is decided.
2. It is the case of the defendant/applicant that prior to the filing of the Suit, that is, on 25.03.2019, the defendant had already, on 18.03.2019, filed a rectification application seeking cancellation of the registration of the impugned trade mark, 'No Turn', granted in favour of the plaintiff. Notice on the abovementioned rectification application has also been issued to the plaintiff on 23.07.2019. The defendant has also taken the plea of filing of the rectification in its written statement.
3. On the other hand, the learned counsel for the plaintiff/non-applicant Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:14.07.2022 14:56:37 submits that the present Suit is for composite relief both against the infringement of its registered trade mark -'No Turn', as also for passing off. She submits that while the Suit, insofar as it involves the prayer of infringement is concerned, can be stayed under Section 124 of the Act, the Suit for relief of passing off must be allowed to continue. In support of her submissions, she places reliance on the judgment of this Court in M/s. J.K. Oil Industries v. M/s. Adani Wilmar Limited, 2018 SCC OnLine Del 9367; as also on the judgment dated 06.08.2021, passed in CM(M) 428 of 2021, titled Praveen Kumar Gupta v. Ravi Chadha & Ors.
4. The learned counsel for the defendant, in rejoinder, reiterates that the entire Suit is liable to be stayed, inasmuch as the Rectification Application was filed prior to the filing of the present Suit. He submits that before the filing of the present Suit, the parties had exchanged Cease and Desist Notice issued by the plaintiff and a reply thereto filed by the defendant. The defendant had also filed its own application seeking registration of the trade mark in dispute, which was objected to by the Registrar of Trade Marks. He submits that, therefore, the plaintiff would have anticipated that the defendant would file an application seeking cancellation of registration of the trade mark granted to the plaintiff. To avoid the stay of the Suit, the plaintiff has therefore added the relief of passing off in the Suit.
5. I have considered the submissions made by the learned counsels for the respective parties.
6. Section 124 of the Act reads as under:
"124. Stay of proceedings where the validity of registration of the trade mark is questioned, etc.--Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:14.07.2022 14:56:37
(1) Where in any suit for infringement of a trade mark--
(a) the defendant pleads that registration of the plaintiff's trade mark is invalid; or
(b) the defendant raises a defence under clause
(e) of sub-section (2) of section 30 and the plaintiff pleads the invalidity of registration of the defendant's trade mark, the court trying the suit (hereinafter referred to as the court), shall,--
(i) if any proceedings for rectification of the register in relation to the plaintiff's or defendant's trade mark are pending before the Registrar or the High Court, stay the suit pending the final disposal of such proceedings;
(ii) if no such proceedings are pending and the court is satisfied that the plea regarding the invalidity of the registration of the plaintiff's or defendant's trade mark is prima facie tenable, raise an issue regarding the same and adjourn the case for a period of three months from the date of the framing of the issue in order to enable the party concerned to apply to the High Court for rectification of the register.
(2) If the party concerned proves to the court that he has made any such application as is referred to in clause (b) (ii) of sub-section (1) within the time specified therein or within such extended time as the court may for sufficient cause allow, the trial of the suit shall stand stayed until the final disposal of the rectification proceedings.
(3) If no such application as aforesaid has been made within the time so specified or within such extended time as the court may allow, the issue as to the validity of the registration of the trade mark concerned shall be deemed to have been abandoned and the court shall proceed with the suit in regard to the other issues in the case.
(4) The final order made in any rectification proceedings referred to in sub-section (1) or sub-
section (2) shall be binding upon the parties and the court shall dispose of the suit conformably to such Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:14.07.2022 14:56:37 order in so far as it relates to the issue as to the validity of the registration of the trade mark.
(5) The stay of a suit for the infringement of a trade mark under this section shall not preclude the court from making any interlocutory order (including any order granting an injunction, directing account to be kept, appointing a receiver or attaching any property), during the period of the stay of the suit."
7. This Court in M/s. J.K. Oil Industries (supra), relying upon the earlier judgments of this Court, has held as under:
"13. This Court finds merit in the plea of the learned counsel for the plaintiff that in a suit for 'passing off', the proceedings, however, would continue. Section 124 of the Act is applicable only to the suits for stay of infringement till the final decision of the pending rectifications...
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20. This Court finds no valid reasons to take different view than the one taken by the Division Bench of this Court in 'Puma Stationer P. Ltd.' (supra) and 'Micolube India Ltd.'(supra). Having recourse to Section 151 CPC to stay the proceedings in a suit for 'passing off', as urged by the learned counsel for the defendant, is uncalled for as Section 124 is very specific and makes it clear that it is applicable only to suits for infringement.
21. In view of the above circumstances, the instant application is partly allowed. So far as the suit for infringement of Trademark it is stayed till the final decision of the pending rectification; the suit filed by the plaintiff for 'passing off', however, shall continue and is to be decided on its own merit."
8. In Praveen Kumar Gupta (supra), this Court was considering a challenge to an Order passed by the learned Additional District Judge staying the entire Suit which had claims based on both the causes of action, Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:14.07.2022 14:56:37 that is of infringement as also passing off. This Court relying upon the earlier judgments of this Court, observed as under:
"10. This court was dealing with a similar issue in J. K. Oil Industries (supra) where it referred to several decisions including those that have been relied upon by the learned Trial Court in its order dated 6th March, 2017 to stay the suit, namely, Data Infosys Ltd. (supra) and Micolube India Ltd. (supra) as also the judgments of the Division Bench of this court in Puma Stationer P. Ltd. v. Hindustan Pencils Ltd., 2010 (43) PTC 479 (Del)(DB) and Formica International Ltd. v. Caprihans (India) Pvt. Ltd., AIR 1966 Cal 247, to hold that a suit for passing off can continue even when the suit for infringement of trade mark was liable to be stayed under Section 124 of the Trade Marks Act.
11. The settled law is thus that Section 124 of the Trade Marks Act does not provide for stay of action against passing off and is applicable only where a rectification application/cancellation has been sought against the registered trade mark that a plaintiff claims to be exclusively its own. This is intended to avoid conflicting decisions by the Civil Courts and the Tribunal. There is no such occasion arising in a suit for passing off. It is only when clever drafting discloses the intent of the plaintiff to get over the statutory bar, being aware of the rectification proceedings commenced against the trade mark that it claims is exclusively its own, as observed in Formica International Ltd. (supra), that the entire suit would have to be stayed till the rectification proceedings are completed. No such plea has been taken in the present case. In fact, such a plea cannot be taken as it is after the institution of the suit that the defendants/respondents have filed an application for rectification.
12. It is, therefore, more than apparent that learned Trial Court has misread the judgments of this court in Micolube India Ltd. (supra) and Data Infosys Ltd. (supra), and there is an error apparent Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:14.07.2022 14:56:37 on the face of the impugned order. The learned Trial Court ought not to have directed that the entire suit be stayed, though, this court, including in J. K. Oil Industries (supra) has consistently held that while the suit for infringement of trade mark has to be stayed under Section 124 of the Trade Marks Act, when a rectification petition is filed before the IPRB, an action for passing off could continue."
9. A reading of the above judgments would clearly show that it is settled law that under Section 124 of the Act, while a Suit for infringement of the trade mark can be stayed where a rectification application seeking cancellation of the registration of the trade mark is pending before the Registrar, the Suit, insofar as it is based on the cause of action of passing off, must be allowed to continue.
10. In Praveen Kumar Gupta (supra), the Court had also observed that the Suit even for a claim of passing off may be stayed where the Court finds that the relief of passing off is being claimed only as 'clever drafting' and with the intent of the plaintiff to get over the statutory bar, being aware of the rectification proceedings commenced against the trade mark that it claims is exclusively its own. In the present case, no such pleading of the plaintiff being aware of the rectification application having been filed by the defendant or the relief based on passing off having been made only to get over the statutory bar as contained in Section 124 of the Act, has been even made by the defendant in the application. In fact, notice on the rectification application filed by the defendant was issued by the Intellectual Property Appellate Board only on 23.07.2019, that is, much after the filing of the present Suit. Mere exchange of Cease and Desist Notice and reply thereto, cannot lead to an inference that the plaintiff has added the relief of passing Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:14.07.2022 14:56:37 off only to avoid the statutory effect of Section 124 of the Act. Therefore, the exception as carved out in Praveen Kumar Gupta (supra) shall have no application to the facts of the present case.
11. Accordingly, the claim of the defendant that the Suit, even with respect to the prayer of passing off, should be stayed, cannot be accepted.
12. In view of the above, the present application is partly allowed. So far as the Suit for infringement of the trade mark- 'No Turn' is concerned, the same shall remain stayed till the final decision of the pending rectification filed by the defendant. The Suit filed by the plaintiff, seeking relief on the basis of passing off its trade mark, however, shall continue and be decided on its own merit.
13. The application is partly allowed in the above terms. There shall be no order as to costs.
CS(COMM) 174/2019
14. The learned counsels for the parties inform that the Suit is already listed before the learned Joint Registrar (Judicial) on 29th July, 2022.
NAVIN CHAWLA, J JULY 13, 2022/rv/P Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:14.07.2022 14:56:37