Karnataka High Court
M/S South Thindis vs M/S Billion Smiles Hospitality Pvt Ltd on 17 July, 2012
Author: Jawad Rahim
Bench: Jawad Rahim
1
®
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 17th DAY OF JULY 2012
BEFORE
THE HON'BLE MR.JUSTICE JAWAD RAHIM
WRIT PETITION NO.24093/2012 (IPR)
BETWEEN:
M/S SOUTH THINDIS
(NOW KNOWN AS SOUTH VEG THINDIS)
NO.10, SOUTH CROSS ROAD,
BASAVANAGUDI,
BANGALORE - 560 004
REPRESENTED BY ITS
PARTNER,
MR.DHANANJAYA,
AGED ABOUT 31 YEARS
... PETITIONER
(BY SRI HARIKRISHNA S.HOLLA, ADV.,)
AND:
1. M/S BILLION SMILES HOSPITALITY PVT LTD
EARLIER KNOWN AS
M/S SOUTH INDIES RESTAURANTS PVT LTD
AT NO.565/D, 7TH MAIN,
HAL 2ND STAGE, INDIRA NAGAR,
BANGALORE - 560 038
REPRESENTED BY ITS MANAGING DIRECTOR
MR.VIJAY ABHIMANYU
2
2. INTELLECTUAL PROPERTY APPELLATE BOARD,
GUNA COMPLEX,
ANNEXE-I, 2ND FLOOR,
443, ANNA SALAI, TEYNAMPET,
CHENNAI - 600 018
REPRESENTED BY
DEPUTY REGISTRAR
... RESPONDENTS
(BY SMT.JAYNA KOTHARI, ADV.,)
THIS WP FILED UNDER ARTICLES 226 AND 227 OF
CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER
DATED 07.07.2012 PASSED BY THE XVIII ADDL. CITY CIVIL
JUDGE BANGALORE (CCH-10) IN OS.NO.25852/11, VIDE
ANN-K REJECTION IA.NO.10.
THIS PETITION COMING ON FOR ORDERS THIS DAY,
THE COURT MADE THE FOLLOWING
ORDER
Defendant is in writ action under Articles 226 and 227 of the Constitution of India seeking quashing of the order dated 7.7.2012 passed on I.A.10 on the file of XVIII Additional City Civil Judge in O.S.25852/11 vide Annexure-K and also for a direction in the nature of mandamus to the 2nd respondent to dispose of the application at No.ORA/20/2012/TM/CH/1479 filed by it for rectification. 3
2. In response to the notice regarding Rule, learned counsel, Smt.Jayna Kothari has put in appearance for the 1st respondent.
3. Heard learned counsel for the petitioner and the 1st respondent. Notice to respondent no.2 is dispensed with.
4. The factual matrix to which learned counsel have made reference and as also manifest from the records, reveals:
a) M/s Billion Smiles Hospitality Private Limited (1st respondent herein), a company incorporated under the Companies Act, 1956, a juristic person, filed a suit in O.S.25852/11 against the petitioner herein vide its plaint (Annexure-A) seeking grant of a decree of perpetual injunction to restrain the defendant, its agents, servants, employees, workers, associates, representatives, and anybody claiming through it, from infringing plaintiff's registered trademark bearing No.1485593 comprising of the word 'Southindies' with the design of 'jharni' vessel by using any identical and/or deceptively/confusingly similar 4 trademark including the trademark 'South Thindis' which is deceptively similar to the plaintiff's trademark.
b) Several other incidental reliefs were sought besides consequential relief of the order of injunction to restrain the defendant from the use of such trademark of 'Southindies.'
c) It is not very clear as to whether exparte ad interim injunction was granted, but it is averred in the petition itself that the application filed under Order XXXIX Rules 1 and 2, C.P.C. was allowed granting ad interim injunction sought for, pending disposal of the suit which the petitioner herein assailed before this court which was a failure. Against it, the action was scaled up to the Supreme Court where it met with similar defeat.
d) Subsequent to these events, petitioner approached the Intellectual Property Appellate Board, Chennai, (hereinafter referred to as the Appellate Board) with an application for rectification of registered trademark of the 1st respondent. The application is said to be pending consideration by the said Board. The petitioner then rushed 5 to the trial court and filed I.A.10 invoking Section 124 of the Trademarks Act, 1999, requesting the trial court to stay the proceedings in O.S.25852/11 pending disposal of its application for rectification by the Board.
e) Learned trial judge, after hearing the contesting the 1st respondent, by the impugned order at Annexure-K, rejected it, declining to stay the proceedings and the case is posted down for pronouncement of judgment today.
5. Petitioner has brought in question the legality of the said order at Annexure-K on more than one ground, amongst which his assertive contention is, learned trial judge has not examined the nature of defence taken by the petitioner. He read out to me the averments in paragraphs 7, 11 and 19 of the written statement at Annexure-B to drive home the point that petitioner has taken a specific defence about invalidity of the trademark of the plaintiff. He submits plaintiff has obtained registration of trademark which is opposed to the provisions of Section 23 of the Act. 6
6. Referring to the provision of Section 124 (1)(b)(i) of the Act, he submits petitioner's specific defence is, the application filed by it for rectification of the trademark obtained by the plaintiff is on the ground it is invalid. Therefore, the trial court should have stayed the suit pending decision of the Appellate Board. He submits the learned judge failed to notice the pleadings in the written statement which spell out that the petitioner has been contending throughout that the trademark obtained by the plaintiff is invalid and it requires rectification.
7. Learned counsel submits, no doubt the application was made after disposal of the Special Leave Petition in the Supreme Court, but still the mandate of Section 124 (1)(b)(i) of the Act had to be followed by the trial court, which it has not done. Therefore, he submits, the impugned order is unsustainable and seeks issue of a writ of Certiorari to quash it and to order stay of the suit pending disposal of the application for rectification before the Appellate Board. 7
8. In negation of these grounds, learned counsel for the 1st respondent has questioned the maintainability of the writ petition itself and with her persuasive eloquence, refers to the following case laws:
I) KEDAR NATH .vs. MONGA PERFUMERY
& FLOUR MILLS (AIR 1974 DELHI 12),
II) ASTRAZENECA, UK LIMITED AND
OTHERS .vs. ORCHID CHEMICALS AND
PHARMACEUTICALS LTD.
(UNREPORTED) and
III) PFIZER PRODUCTS INC. .vs. RAJESH CHOPRA & OTHERS (2007 (35) PTC (Del) Her core contention is, in order to be favoured with such an order, it was incumbent on the petitioner to establish that the application for rectification was pending before the suit was instituted, or in the alternative, to show it had raised such a plea in the written statement which necessitated raising of an issue to decide whether the trademark of the plaintiff was invalid. Alternatively, she would submit, petitioner should have obtained leave of the court to file an application for rectification and only then, the trial court would be justified in staying the suit. 8
9. Responding to such contention, learned counsel for the petitioner would submit obtaining leave of the court is not at all necessary for filing the application for rectification. In support of this contention, he placed reliance on the decision reported in 2011 (47) PTC 231 (IPAB) in the case of JEET BIRI MANUFACTURING CO. PRIVATE LIMITED .vs. PRAVIN KUKMAR SINGHAL, TRADING AS P & J AROMATICS & OTHERS rendered by the Board at Chennai, (Circuit Bench sitting at Delhi) wherein the Bench held as follows:
"27. We therefore hold, as held by the Hon'ble Madras High Court that section 124 does not insist on seeking leave.
28. To conclude:-
(a) the section does not anywhere specify that leave should be obtained, in an ordinary reading of it;
(b) when the language is clear, we cannot read a procedural requirement into it;
(c) the word "enable" should be read as giving time to a party to exercise its unfettered right under section 57, and not to be read as giving a new right to a party that did not exist previously;9
(d) there are no words to indicate that right under section 57 are subject to the provisions of section 124;
(e) nor are there any non-obstinate clauses in section 124, which makes that provision override the right to seek rectification under section 57;
(f) the section only requires the court to arrive at Prima facie satisfaction regarding the tenability of the issue. If the power of granting leave is read into it, then the power to refuse leave is implied, then that would mean that the court can decide the issue and refuse leave. There is no room for such construction.
(g) the decision of IPAB, which is one Board sitting in different places must be uniform and speak in one voice."
10. The contentions of both sides have received my consideration.
11. On facts, there is not much controversy raised by the parties. Admittedly, 1st respondent has obtained an order of injunction restraining the petitioner from using the trademark 'Southindies' which, according to the 1st respondent, was deceptive//confusingly similar trademark including the trademark 'South Thindis' which is deceptively similar to its trademark. It is also not in dispute that ad interim injunction order was granted on I.A.1 which 10 was confirmed by this court in M.F.A.10120/11. Both the orders were assailed by the petitioner before the apex court in S.L.P. which was also a failure. Therefore, the petitioner has suffered injunction order and there is a restraint on it from using the trademark 'Southindies'. In this fact situation, petitioner has sought for stay of the suit which has reached final stage and the matter is posted for rendition of judgment today.
12. In a belated action, this writ was filed yesterday and was taken on board at request. However, prior notice was ordered to which the 1st respondent has responded. I, therefore, had the benefit of hearing the learned counsel for both sides.
13. The issue as referred to above is, whether in the given fact situation, further proceedings in the suit has to be stayed, applying Section 124 of the Act, which reads thus:
124. Stay of proceedings where the validity of registration of the trade mark is questioned, etc. 11 (1) Where in any suit for infringement of a trade mark -
(a) ....
(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 Appellate Board, 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 Appellate Board for rectification of the register.
Merely because the petitioner has applied to the Appellate Board for rectification of the plaintiff's trademark, should the suit be stayed, is the question to be considered.
14. In the case of PFIZER PRODUCTS INC. (2007 (35) PTC 59 (Del), the Delhi High Court, after considering the 12 conspectus of the provisions of Section 124 of the Act observed thus:
"67. It now becomes necessary to consider I.A No.8252/2006 filed by the defendant seeking stay of the suit on the ground that it had initiated proceedings for cancellation of the plaintiff's registration. This application has been filed by the defendant urging that inasmuch as the defendant has filed an application seeking cancellation of the registered trademark of the plaintiff which proceedings are admittedly pending before the Registrar, the present suit is liable to be stayed."
After referring to its earlier pronouncement reported in the case of ASTRAZENECA UK LIMITED (2006 PTC 32 733), the Bench observed thus:
"31. On plain reading of this provision, it is apparent that the plaintiffs could not file the application for rectification without showing and obtaining prima facie satisfaction of the Court about their plea of the invalidity of the registration of the mark of the Defendant. Section 124 of the Trade Marks Act, 1999 is similar to the Section 111 of the Trade and Merchandise Marks Act, 1958. Under the Trade and Merchandise Marks Act, 1958 in MANU/DE /0014/1974 : AIR 197 Delhi 12, Kedar Nath v. Monga Perfumary & floor mills, this court had held that an application could not be filed subsequent to the institution of the suit under Section 111(1) (i) of the earlier Act. The learned Single Judge had held as under:13
19. ....The defendant cannot file an application subsequent to the institution of the suit under Section 111(1)(i) and claim that the plaintiff suit for infringement must be stayed.
If no proceeding for rectification of the register is pending on the date of the institution of the suit by the plaintiff then Section 111(1)(ii) is attracted and the Court may adjourn the case for a period of three months in order to enable the defendant to apply to the High Court for rectification of the register. In that case the Court must be satisfied that the contention as to validity of the defendant's registration is bona fide and prima facie sustainable. In the present case I am not satisfied that the contention as to validity and raised by the defendant is bona fide and prima facie sustainable. NO material has been placed on the record to prove a prima facie case that been placed on the record to prove a prima facie case that the plaintiff's registration is invalid or that the defendant has been carrying on business since 1952 as alleged by him. Reliance can also be placed on Patel Field Marshal Agencies v. P.M.Diesels Ltd. 1999 IPLR 142: 1999 (19) PTC 718 where it was held that if the proceedings are not pending and the plea regarding invalidity of registration of the mark is raised, the Court trying the suit is to be prima facie satisfied about tenability of the issue. The Division Bench of the Gujarat High Court had held:
10. .... As we notice, under Section 107, it has been provided that on such pleas being raised, the plea can be decided only in an appropriate rectification 14 proceedings. In conformity with that provision, Section 111 envisages that if proceeding for rectification of the register in relation to plaintiff or defendant's trademark, as the case may be, are pending before the registrar or the High Court, further proceedings in the suit shall be stayed, until final disposal of rectification proceedings. If proceeding are not pending, and the plea regarding invalidity of registration of concerned mark is raised, the Court trying the suit is to be prima facie satisfied about tenability of the issue, and if it is so satisfied, it shall frame as issue to that effect and adjourn the case for three months, from the date of framing of the issue, in order to enable the party concerned to apply to the High Court for rectification of register. The consequences of the raising of issue are two fold. In case, the party concerned, makes an application for rectification within the time allowed, under sub-
clause (ii) of Sub-clause (b) of such Section (1), whether originally specified or extended later on, the civil Court trying the suit has to stay the further proceedings of the suit until disposal of the rectification proceeding. At the same time, if no such application is made within the time allowed, the party, has raised the plea of invalidity of the opponent's registered mark, is deemed to have abandoned the issue. This provision permitting raising of an issue only on prima facie satisfaction of the Court, with further requirement that the party, at whose instance an issue has been framed, is to apply for rectification before the High Court concerned, and failure to make such application with the time allowed results in deemed abandonment of plea, leads us to 15 conclude that once a suit has been filed, the rectification proceedings at the instance of either party to the suit against the other, must take the course and envisaged under Section 111, that is to say, if proceedings for rectification are already pending before raising the plea of an invalidity, that is to say, the attention of an appropriate Forum having already been invited to that issue, those proceedings must first be continued, decision thereon to be obtained and then civil suit for infringement can proceed in the light of that decision. In case, no such proceedings for rectification are pending at the time of raising the plea of invalidity, the prosecution of such plea by the reason raising it depends on prima facie satisfaction of the Court, about the tenability of this plea. If the plea has been found to be prima facie tenable and an issue is raised to that effect then the matter is to be adjourned for three months at least to enable the person raising such plea to approach the High Court concerned, with a rectification application. In case, the rectification proceedings are not already pending, and the Court is not even prima facie satisfied about the tenability of the plea raised before it, the matter rests there."
The ultimate conclusion reached by the Bench is found in paragraph 73 which reads thus:
"A bare perusal of the statute shows that it is only if there are pending proceedings for rectification of the register in relation to the plaintiffs or defendants trademark at the time of filing of the suit that the court is required to stay the suit pending final disposal of such proceedings.16
However, if no such proceedings are pending, the satisfaction of the court that the plea regarding the invalidity of the registrations of the plaintiffs or the defendant's trade mark is prima facie tenable, is a sine qua non under Section 124(1)(b)(ii). Upon such a prima facie view, the law requires the court to raise an issue regarding the same and adjourn the case for a period of three months from the date of framing of issue in order to enable the party concerned to apply to the appellate board for rectification of the register."
15. From the discussion in the judgment, it is evident the Delhi High Court firmly concluded that perusal of the statute shows it is only if there are pending proceedings for rectification of trademark in relation to plaintiff or defendant at the time of filing of the suit that the court is required to stay the suit pending final disposal of such proceedings. However, if no such proceedings are pending, the satisfaction of the court that the plea regarding invalidity of plaintiff's or defendant's trademark is prima facie tenable, it is sine qua non under Section 124 (1)(b)(ii) of the Act. Upon such prima facie evidence, law requires the court to raise an issue regarding the same and adjourn the case for 3 months from the date of framing the issue in order to enable the party concerned to apply to the Board for rectification of the register.
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16. Therefore, certain dates become relevant. It is not in dispute the suit was filed in April 2011. Thereafter orders have been passed on the application against which appeal was filed before this court and ultimately the Hon'ble Supreme Court disposed of the S.L.P. in April 2012. The application for rectification is filed in the month of September 2011. It thus admits of no doubt stay application was filed after the filing of the suit, after filing of written statement and before approaching the Supreme Court. Therefore, I have no hesitation in recording that the issue under consideration is covered not by Section 124(1)(b) (i), but Section 124(1)(b)(ii) of the Act. It spells out that firstly, defendant must raise such material proposition in the written statement requiring the issue to be raised about invalidity of the trademark, and secondly, the court must be 'satisfied' that it is prima facie tenable. The third situation is, court has to raise an issue based on such material proposition and grant 3 months time to the party concerned to apply for rectification of register. Of course, time could be extended as indicated in the provision. 18
17. I am unable to accept the contention of the petitioner's counsel that the issue falls within the ambit of Section 124(1)(b)(i) of the Act for the simple reason that as on the date the suit was filed, no application was pending. Secondly, for the first time petitioner-defendant has raised a plea about invalidity of the trademark of the plaintiff in the written statement which also is not disputed. Therefore, the fact situation is covered by the second circumstance referred to in Section 124 (1)(b)(ii) and not clause (i). If that be so, petitioner must satisfy this court that the plea taken in the written statement was of such nature that it would have satisfied the court that the defence is tenable. In other words, satisfaction of the trial court is a condition precedent for proceeding further to allow the parties to apply to the trial court. It stands to reason because there may be several contentions urged, but if such contentions are untenable, the court would not frame an issue for a mere asking.
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18. In this view, the mandate of Section 124 of the Act to stay the proceedings does not operate and hence, the request made by the petitioner to stay the suit was certainly not grantable. The trial court has rightly rejected its request and dismissed the application. I find no ground to differ with the finding of the trial court. Besides, no circumstance is made out to exercise the extraordinary writ jurisdiction of this court.
19. Before parting, it must be mentioned that the petitioner has not answered the laches on its part in approaching the trial court with a belated application at the time when the trial court is about to render its judgment in the suit. Even presuming that there was a semblance of right in the petitioner to seek stay of the proceedings in the suit, the decision of the apex court in the case of RAMDEV FOOD PRODUCTS .vs. ARVINDBHAI RAMBHAI PATEL & OTHERS ([2006] 8 SCC 726) is an answer, wherein the apex court has disapproved staying of proceedings at a belated stage.
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20. In the result, the writ petition is dismissed.
SD/-
JUDGE vgh*