Delhi High Court
Sancheti Applicances Pvt. Ltd. vs Pritam Electricals & Anr. on 9 February, 2011
Author: S.Ravindra Bhat
Bench: S. Ravindra Bhat
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Pronounced on: 9th February, 2011
+ IA No. 8649/2006 in CS (OS) No.1529/2006
M/S SANCHETI APPLIANCES PVT. LTD. ..... Plaintiff
versus
M/S D.K. ELECTRICALS AC+ ..... Defendant
IA No.8653/2006 in CS (OS) No.1530/2006
M/S SANCHETI APPLIANCES PVT.LTD. ..... Plaintiff
versus
M/S J.K. ELECTRICAL INDUSTRIES AC+ ..... Defendant
IA No. 13828/2007 in CS (OS) No.2363/2007
M/S. SANCHETI APPLIANCES PVT. LTD. ..... Plaintiff
versus
M/S. D.K. ELECTRICALS AC+ ..... Defendant
IA No. 13836/2007 in CS (OS) No.2364/2007
SANCHETI APPLICANCES PVT. LTD. ..... Plaintiff
versus
PRITAM ELECTRICALS & ANR. AC+ ..... Defendant
APPEARANCE: Mr. S.K. Bansal, Mr. Pankaj Kumar and Mr. Santosh Kumar,
Advocates for plaintiffs.
Mr. Sandeep Sethi, Sr. Advocate with Mr. Sanjeev Singh,
Ms. Beena Shaw and Mr. Nikhil Bhalla, Advocates for defendants.
CORAM:
MR. JUSTICE S. RAVINDRA BHAT
1. Whether the Reporters of local papers Yes.
may be allowed to see the judgment?
2. To be referred to Reporter or not? Yes.
IAs 8649/06 in CS(OS)1529/06,IA 8653/06 in CS (OS) 1530/06, IA 13828/07 in CS (OS) 2363/07, IA 13836/007 in CS (OS)2364/2007 Page 1
3. Whether the judgment should be Yes.
reported in the Digest?
MR. JUSTICE S.RAVINDRA BHAT
%
1. This common order will dispose of pending temporary injunctions in the four suits.
2. The facts necessary for disposing of this order are that the plaintiff in all the four
cases is M/S SANCHETI APPLIANCES PVT. LTD. (hereinafter referred to as
"Sancheti"). In CS(OS) No.1529/2006 Sancheti sues M/s D.K. Electricals (hereafter
referred to as "D.K.") for alleged passing off in respect of trade mark "PRETTY"
used for electrical appliances such as sockets, switches and other allied products.
D.K. in turn preferred a counter claim alleging that it is the proprietor of the
registered trademark "PRETTY" since 2004.
3. In CS(OS) No.1530/2006 Sancheti sues M/S J.K. ELECTRICAL INDUSTRIES
(hereafter referred to as "J.K.") complaining of passing off in respect of trademark
"WINNER" used for marketing electrical appliances. In CS(OS) No.2363/2007 a
similar injunction is claimed as in CS(OS) No.1529/2006, in respect of "PRETTY"
against the same defendant i.e. D.K. In CS(OS) No.2364/2007 Sancheti claims a
permanent injunction and consequential reliefs against M/s PRITAM
ELECTRICALS (hereafter referred to as "Pritam") for passing off in respect of
trademark "PRETTY". Pritam claims to be assignee of the mark with effect from
01.04.2004 from M/s D.K. Electricals.
4. The common case of Sancheti in all the suits is that originally Shri Ashok Kumar
Sancheti was the sole proprietor of the concern who had conceived and adopted the
"WINNER" and "PRETTY" marks in respect of electrical accessories, fittings, fuse,
fuse units, switches, sockets, indicators, electrical bells, buzzers, lightening fixtures,
holders, fan regulators etc. (hereinafter referred as the "appliances"). It is averred in
all the suits that Shri Ashok Kumar Sancheti, (the sole proprietor), established M/s
Sancheti Electricals in the year 1980 and in December 1993 he established another
proprietary concern under the style M/s Sancheti Distributors and continued to carry
on business and marketing of products under the same marks. It is further averred
IAs 8649/06 in CS(OS)1529/06,IA 8653/06 in CS (OS) 1530/06, IA 13828/07 in CS (OS) 2363/07, IA 13836/007 in CS (OS)2364/2007 Page 2
that goods were even exported under the same marks, claiming that the business grew
exponentially and earned extensive reputation both in India and abroad. The suits
contend that in August 1998 the said proprietor Shri Ashok Kumar Sancheti promoted
and incorporated the plaintiff company with the objective of engaging itself in
business concerning the same products. It is also contended that the two trademarks
were transferred to the company for commercial exploitation. Through all these
pleadings the plaintiff claims continuous and uninterrupted usage of the trademarks of
"WINNER" and "PRETTY" since 1980.
5. It is also alleged that labels for the marks involved underlying work of art, which was
registered in the year 2007. They were, however, rectified by the Copyright Board
by its order dated 31st March, 2009 on the ground that it had not complied with Rule
16 (3) of Indian Copyright Rules. The said order was set aside by a Division Bench
of this Court on 3rd August, 2009 directing the Copyright Board to consider the
application for registration afresh.
6. The plaintiff urges that its marks have gained considerable reputation and earned
notoriety and are valid for the goods marketed under those brands, are known for
their quality and precision. The plaintiff urges having achieved considerable sales in
this regard. It is also claimed that plaintiff has applied for trademark registration in
respect of both "PRETTY" and "WINNER" marks on 26th July, 2006. To
substantiate the claim for usage of the marks, the plaintiff is relying upon the
importer-exporter code certificate issued by Ministry of Commerce, Central
Government on 18.05.2001 and 23.04.2001. They also relied upon a large number of
invoices including export invoices and orders placed by overseas companies, for
which bills were issued and these were in respect of the years from 2000 onwards.
The plaintiff further relies upon a certificate of enlistment issued by a Kolkata
Municipality for the year 1994-95.
7. The plaintiff also relied upon invoices evidencing export of switches, sockets, fuses,
regulators and other electrical appliances to Bangalesh, shipping documents and
letters of credit have also been placed on record. It is argued that the materials on
record establish that both the " PRETTY " and "WINNER" marks have been in
widespread usage and known amongst business circle since 1980's and early 1990's
IAs 8649/06 in CS(OS)1529/06,IA 8653/06 in CS (OS) 1530/06, IA 13828/07 in CS (OS) 2363/07, IA 13836/007 in CS (OS)2364/2007 Page 3
as claimed in the suit. The plaintiff also highlighted that a suit was filed against them
by Mr. Jayanti Kumar Jain claiming that he had adopted "PRITAM" in and around
2007 in respect of electrical switches, goods etc. In that suit the said plaintiff had
alleged trademark violation in respect of mark and labels by the defendants (i.e.
Sancheti) alleging that it was using the word mark "PRITAM". It is argued that in
that suit the application for temporary injunction was denied by the Calcutta High
Court.
8. Sancheti argues that this suit was a deliberate attempt by J.K. Electricals to thwart it
from asserting its rights. Sancheti also highlights that a malafide attempt was made
by M/s J.K. Electricals by complaining to the police authorities alleging violation of
BIS Standards that led to various raids in its (the plaintiff) premises. The Sancheti
relies upon criminal complaint and ISI report given by Shri Manoj Jain sometime in
July 2006.
9. Sancheti contests that the defendant's assertion about adoption of " WINNER" mark
in 1984 is false. It is argued here in this regard that the documentary evidence placed
along with written statement discloses that one Mr. Sanjiv Gupta claiming to be the
proprietor of Natraj Cables assigned the "WINNER" mark in favour of J.K. on
05.07.1984. The Assignment Deed clearly states that Natraj was using the
"WINNER" mark since 1984 to trade wire and cables and other electrical accessories.
The assignment deed explicitly reserved to the assigner the right to use "WINNER"
in respect of those goods and assigned the mark in respect of other electrical fittings.
It is submitted that this clearly establishes that M /s J.K. or its predecessor-in-interest
never used or could have claimed usage of the "WINNER" mark prior to the
Sancheti.
10. Learned counsel urged that so far as " PRETTY" mark is concerned, the claim by M/s
D.K. Electricals of prior use since 1992-93 is clearly without foundation. It is argued
here that the trademark registration relied upon was on the basis that the owner
proposed to use the mark with effect from 22.03.1994. It is submitted that if such
were the true position, M /s J.K. Electricals could not have claimed user from a prior
date, i.e. 1982 and therefore, this Court cannot believe its assertion about the sales
figures etc. Sancheti also argues that first invoice or bill evidencing sales relied upon
IAs 8649/06 in CS(OS)1529/06,IA 8653/06 in CS (OS) 1530/06, IA 13828/07 in CS (OS) 2363/07, IA 13836/007 in CS (OS)2364/2007 Page 4
by M/s J.K. pertains to the year 2005 and under these circumstances, the Court should
disregard their plea and grant the temporary injunction sought for in the present cases.
Sancheti relies upon the decision of the Supreme Court reported as Gujarat Bottling
Company Ltd. v. Cocacola Company, AIR 1995 SC 2372, Premwati Bansal v. Shri
Ganpati International, 1999 PTC 640, to say that prior user claim has to outweigh
even registered owner's application for injunction.
11. M/s D.K. Electricals, defendants in CS(OS) No.1529/2008 and CS (OS)
No.2363/2007 argued that it is the registered proprietor of the mark "PRETTY" with
effect from 22.03.1994 and that registration has been renewed upto 22.03.2014. It
relies upon a copy of the said registration certificate and asserts that the mark was
used in respect of goods only the plaintiff Sancheti claims to be trading in M/s D.K.
electrical also relies upon the copies of licences granted or issued to it by the Bureau
of Indian Standards for using the mark in relation to the goods it sells with effect
from 01.12.1993, copies of the renewal application and test report by the Central
Electrical Laboratory regarding the brand concerned being "PRETTY" sometime in
December 1995 are also relied upon for this purpose. M/s D.K. Electricals further
relies upon the Central Excise declaration forms for the previous periods with
particular reference to some of them contending the brand name "PRETTY". Besides
this, it is argued that M/s D.K. Electricals has placed on record a large number of
invoices for the period 1993-94 till 2000 to establish continuous and uninterrupted
usage of the mark.
12. The defendant D.K. Electricals relies upon the sales tax registration certificate issued
to it with effect from 27.05.1994 and copies of the renewal certificate issued by BIS
etc., and argues that being the prior user of the mark "PRETTY", which is also a
registered trade mark, its claim has to prevail over that of Sancheti and the Court
ought to grant ad interim injunction.
13. The defendant in CS(OS) No.1530/2008, i.e. J.K. Electricals states that it is the
assignee of the "WINNER" mark from M/s Natraj Cables and relies upon a copy of
the assignment deed. It also relies upon its price list in the catalogues and a large
number of invoices for the period 20.03.1990 onwards claiming to have sold
electrical appliances and goods under the market. M/s J.K. Electricals also relies
IAs 8649/06 in CS(OS)1529/06,IA 8653/06 in CS (OS) 1530/06, IA 13828/07 in CS (OS) 2363/07, IA 13836/007 in CS (OS)2364/2007 Page 5
upon a sales tax dealership registration certificate, excise declarations and the copy
of declaration that it is a small scale unit and registered as such with the appropriate
Government. These are in addition to several invoices for the period 1995 onwards.
14. It is apparent from the above discussion that Sancheti claims to be the user of marks
"WINNER" and "PRETTY" in respect of electrical accessories, fittings, fuse, fuse
units, switches, sockets, indicators, electrical bells, buzzers, lightening fixtures,
holders, fan regulators etc. from early 1980's. It had secured copyright registration in
respect of both the marks and underlying art work; apparently by order dated
31.03.2009 made at the behest of defendants, that registration was revoked. To
establish such trademark usage, plaintiff has relied upon invoices and shipping
documents right from 1980 onwards. Some of these invoices - particularly of 1980's
appear to be hand written. The record also reveals that M /s D.K. Electricals had
filed a complaint with the Additional Chief Magistrate in July 2006 against (unknown
persons/firms) claiming that the latter were using labels similar to that of the
complainant (M/s D.K. Electricals) and was involved in violation of Trademarks Act.
15. The defence in all the four cases of the defendants, i.e. M/s D.K. Electricals, J.K.
Electricals and Pritam Electricals is more or less overlapping. M/s J.K. Electricals, in
CS(OS) No.1530/2006 claims to be using "PRETTY" prior to the plaintiff and cites
ownership of a registered trademark from 22.03.1994, in relation to Class 9 goods.
Both D.K. and J.K. Electricals have claimed prior usage and also alleged that
Sancheti had not disclosed that it was using the "WINNER" or "PRETTY" marks. In
turn M/s J.K. and D.K. Electricals relied upon several invoices for the period of early
1990's, to mid 1990's, as well as sales tax registration certificates and copies of
excise declaration forms to say that goods were being marketed since then.
16. A visual comparison of the rival marks in the present case show close similarity, if
not entire identity between the two. One of the marks, PRETTY is also a registered
trademark; owned by JK Electricals. The class of goods, in respect of which the user
is claimed, are identical, i.e. electrical accessories and allied equipment. Therefore,
the question which the Court has to address itself is which of the parties, was the prior
user. This question would also determine the rights of M/s Pritam Enterprises, which
claims to be a licensee or further assignee. Sancheti has placed on record
IAs 8649/06 in CS(OS)1529/06,IA 8653/06 in CS (OS) 1530/06, IA 13828/07 in CS (OS) 2363/07, IA 13836/007 in CS (OS)2364/2007 Page 6
documentary evidence to the effect that its PRETTY and WINNER marks were in use
since 1980s. These include some invoices in the 1980s and 1990s, and several from
the year 2000 onwards. Sancheti has also placed on record export documents dating
back to transactions over a decade ago, disclosing that its goods were being exported
to Bangladesh. The other documents include registration certificates, etc., issued by
Municipal and other agencies. Both D.K. Electricals and J.K. Electricals rely on
similar documents; however, there are hardly any relating to the 1980s; some are of
1990s. The registration certificates evidence registration of the concern as small scale
industry, under the concerned government's policy, sales tax registration, excise
returns, etc. Very few documents disclose the trademark names "PRETTY" or
"WINNER". The claim that the trademark PRETTY was being used since 1992 and
the further assertion that its sales for that year was ` 1,06,000/- is suspect and
doubtful, because the trademark registration, which reveals the mark to have been
registered since March, 1994, shows that the claim of the owner was as a proposed
user. Counsel for defendants had argued that an application for amending the
"proposed to be used" remark is pending. However, the Court has to go by the
evidence on record, which prima facie reveals that the representation of the trademark
owner was that he merely intended to use it, and was not actually doing so. On an
overall conspectus of circumstances, the Court is not persuaded by the submissions of
all defendants, i.e J.K. Electricals, D.K. Electricals and Pritam Electricals that they
were the first users of the mark. No doubt, PRETTY is a registered trademark; the
established authorities have ruled in this regard that intention of the rival mark, either
to infringe or not is not material, so long as similarity, is established. However, the
Trademarks Act, 1999, has woven an exception to this rule, which is that if there is a
prior user, of the same or similar mark, his action or defense can defeat the registered
trademark proprietor's rights. Similarly, adoption of " WINNER" mark in 1984, by
M/s J.K. Electricals is prima facie doubtful. The documents placed by J.K.
Electricals on the record show that Sanjiv Gupta claiming to be the proprietor of
Natraj Cables assigned the said "WINNER" mark in to J.K. Electricals on
05.07.1984. The said Deed states that M/s Natraj was using the "WINNER" mark
since 1984 in respect of wire and cables and other electrical accessories. The
IAs 8649/06 in CS(OS)1529/06,IA 8653/06 in CS (OS) 1530/06, IA 13828/07 in CS (OS) 2363/07, IA 13836/007 in CS (OS)2364/2007 Page 7
assignment deed expressly reserved to the assigner (Natraj) the right to use
"WINNER" in respect of those goods and assigned the mark in respect of other
electrical fittings. These disclose that M /s J.K Electricals or M/s Natraj did not use
nor could have claimed usage of the "WINNER" mark prior to the period which
Sancheti does.
17. In the context of prior user, (as regards PRETTY being a registered trademark) it
would be useful to notice the ruling in Swaran Singh v. Usha Industries (India), AIR
1986 Del 343. There, a Division Bench of this Court dealt with the case of a prior
user in where infringement was alleged, and held as follows:
"The order under appeal has the effect of permitting the defendants to use the
impugned mark during the pendency of the suit. In the case of a registered trade
mark, this creates a very difficult situation. The effect of registration is to give an
exclusive right of user to the proprietor of the registered trade mark. This is
provided in section 28 of the Trade and Merchandise Marks Act, 1958. The only
persons who can defeat this exclusive user are persons covered by section 33 of
the Act, which provides as follows :
"33. Saving for vested rights: Nothing in this Act shall entitle the proprietor or a
registered user of a registered trade mark to interfere with or restrain in the use
by any person of a trade mark identical with or nearly resembling it in relating to
goods in relation to which that person or a predecessor in title of his has
continuously used that trade mark from a date prior:
(a) to the use of the first mentioned trade mark in relation to those goods by the
proprietor or a predecessor in title of his ; or
(b) to the date of registration of the first mentioned trade-mark in respect of those
goods in the name of the proprietor or a predecessor in title of his ; whichever is
the earlier, and the register shall not refuse (on such use being proved) is
registrar the second mentioned trade mark by reason only of the registration of
the first mentioned trade mark."
In short, if there is user prior to the date of registration, then the user may continue.
According to the defendants, now respondents, they have been using the marks from a
prior date. There are two portions of the section, one of which refers to the date of user and the other refers to the date of registration. The section seems to give the earlier date as the operative date,i.e., if the user is earlier than the registration it is that date. If we take the user of the two trade-marks as being 1960 and 1971 respectively, it means that the defendants must show that they have used the trade mark 'US HA' prior to 1960 in relation to electric irons and prior to 1971 in respect of room beaters, stoves, angithis, hot plates, etc."
IAs 8649/06 in CS(OS)1529/06,IA 8653/06 in CS (OS) 1530/06, IA 13828/07 in CS (OS) 2363/07, IA 13836/007 in CS (OS)2364/2007 Page 8
18. The above decision was followed in Micolube India Ltd. v. Maggon Auto Centre 2008 (36) PTC 231(Del). It was similarly held by the Division Bench in N.R. Dongre and Ors. v. Whirlpool Corporation and Ors., AIR 1995 Delhi 300 that:
"According to Section 28(1) of the Act, registration of a trade mark gives to the registered proprietor thereof exclusive right to use the same in relation to the goods in respect of which it has been registered. But from the opening words of Section 28(1) namely, "subject to other provisions" it is clear that the right conferred on a trader is not an indefeasible right as the same is expressly made subject to other provisions of the Act. This is further, made clear by Section 27(2) of the Act, which provides that "nothing in this Act shall be deemed to affect the right of action against any person for passing off the goods as goods of another person or the remedies in respect thereof."
Thus it is manifest that Section 28 of the Act and all other provisions come within the over-riding sway of Section 27(2) of the Act. Similarly Section 33 of the Act also saves vested rights of a prior user. It lays down that nothing in the Act shall entitle a registered proprietor of a trade mark to interfere with the use of the trade mark by a prior user of the same. Thus the right created by Section 28(1) of the Act in favour of a registered proprietor of a trade mark is not an absolute right and is subservient to other provisions of the Act namely Sections 27(2), 33 etc.."
(emphasis supplied)
19. On an overall prima facie appreciation of the rival materials, it is apparent that the plaintiff has been able to establish its usage of the two trademarks, WINNER and PRETTY, from 1980s. The plaintiff has also being exporting its goods and wares overseas buyers, in evidence of which, it has placed on record export documents. The defendants in the suits have shown that they were using PRETTY - through invoices revealing the said mark, later, from 2005. All copies of invoices and bills are of an earlier period and merely speak of the concerned defendant, and not the mark. So far as WINNER is concerned, the Assignment deed does not substantiate first usage of the mark by Natraj, but that the latter was using it only in respect of a restricted category of goods, like cables; the transfer or assignment is shown to be in respect of other goods. The defendants have not shown how they acquired goodwill, or IAs 8649/06 in CS(OS)1529/06,IA 8653/06 in CS (OS) 1530/06, IA 13828/07 in CS (OS) 2363/07, IA 13836/007 in CS (OS)2364/2007 Page 9 distinctiveness, to lay a claim, in preference to the plaintiff's claim over the marks, as prior user.
20. Reckitt and Colman Products Ltd. v. Borden Inc and others, [1990] 1 All ER 873.
The three elements cited to be established for passing off were summarized as the plaintiff establishing (in relation to the mark) (1) a goodwill or reputation;
(2) demonstration, that the use (trademark use by defendant) will lead the public to believe that the goods or services offered by him are goods and services of the plaintiff; and (3) that he suffers or is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of his (the defendant's) goods or services is the same as the source of those offered by the plaintiff.
21. There is a need to establish some goodwill is important, if the word mark is a common or dictionary word. This was underlined by this Court, in Vijay Kumar Ahuja v. Lalita Ahuja, 95 (2002) DLT 3 in the following terms:
"It is settled law that common language words and names cannot be exclusively appropriated by any trader unless and until such trade names have acquired such a great reputation and goodwill in the market that the common language word has assumed a secondary significance. Secondary significance here would mean that other traders in that line of trade acknowledge that such common word has come to denote the goods belonging to a particular trader. In this connection reference may be made to a decision of this Court in the case of Globe Super Parts v. Blue Supra Flame Industries AIR 1986 DELHI 245; While dealing with the question of exclusive appropriation of common language word by a trader, Learned Single Judge of this court has held that even a common language word can be exclusively appropriated by a party as a trade mark if the said word has acquired a secondary significance but in the case of a word which is coined, fancy, new or meaningless the claim to exclusive appropriation is sustainable without the need to prove existence of secondary significance.."
22. In the present case, the two rival marks are WINNER and PRETTY, both common marks. The plaintiff has been able to show, to some reasonable degree that it was prior user of the two marks, and was consistently selling goods and equipments, under the said trademarks, since long, which included export sales. The documentary IAs 8649/06 in CS(OS)1529/06,IA 8653/06 in CS (OS) 1530/06, IA 13828/07 in CS (OS) 2363/07, IA 13836/007 in CS (OS)2364/2007 Page 10 evidence included sales invoices, export documents, copies of some local authorities' registration certificates, etc. The defendants' claim of user, prior to that of the plaintiff, is prima facie unconvincing. The Supreme Court in Midas Hygiene Industries (P) Ltd v. Sudhir Bhatia, 2004 (3) SCC 90, held that in trademark claims, normally an injunction must follow, once prima facie case is established. It has been held that mere delay in bringing action is not sufficient to defeat grant of injunction in such cases. The grant of injunction becomes necessary, said the Court, if it prima facie appears that the adoption of the mark was itself dishonest. In this case, the resemblance of the two marks is close, the rival parties are in the same trade, and what is more, even the labels are identical.
23. In view of the above discussion, the Court is of the opinion that the defendants, their agents, employees, or anyone acting on their behalf, in all the suits must be restrained, through an ad interim temporary injunction order, from using the plaintiff's marks "WINNER" and "PRETTY", in respect of electrical appliances, switches, fans, sockets, etc, classified in Item 9 of the Trademarks Act, 1999, or from using any word mark, or label similar to such word mark, or label as is being used by the plaintiff, Sancheti, in the four suits. IA Nos. 8649/2006 , 8653/2006, 13828/2007 and 13836/2007 are allowed, to that extent. The ad-interim injunction shall be in force, till disposal of the suits.
CS(OS) Nos. 1529/2006, 1530/2006, 2363 and 2364/ 2007 List the suits for further proceedings, before the Bench according to regular Roster, on 7th March, 2011.
(S.RAVINDRA BHAT) JUDGE FEBRUARY 9, 2011 IAs 8649/06 in CS(OS)1529/06,IA 8653/06 in CS (OS) 1530/06, IA 13828/07 in CS (OS) 2363/07, IA 13836/007 in CS (OS)2364/2007 Page 11