Kerala High Court
Nirapara Roller Flour Mills Pvt. Ltd vs Ammini Karnan on 11 May, 2010
Author: Pius C.Kuriakose
Bench: Pius C.Kuriakose
IN THE HIGH COURT OF KERALA AT ERNAKULAM
RFA.No. 371 of 2007()
1. NIRAPARA ROLLER FLOUR MILLS PVT. LTD.,
... Petitioner
2. XAVIER CHACKO, S/O. CHACKO,
3. ROSAMMA XAVIER, W/O. XAVIER CHACKO,
4. SUNITHA JOSE, W/O. P.F. JOSEPH,
Vs
1. AMMINI KARNAN, PROPRIETRIX,
... Respondent
2. BIJU KARNAN, PROPRIETOR,
3. K.K.R. AGRO MILLS PVT. LTD.,
4. K.K.R. FOOD PRODUCTS,
5. S.N. FOOD PRODUCTS,
For Petitioner :SRI.T.KRISHNANUNNI (SR.)
For Respondent :SMT.V.P.SEEMANDINI (SR.)
The Hon'ble MR. Justice PIUS C.KURIAKOSE
Dated :11/05/2010
O R D E R
PIUS C. KURIAKOSE, J.
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RFA. No. 371 of 2007
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Dated this the 11th day of May, 2010
J U D G M E N T
The defendants in a passing off action aggrieved by the decree of the District Court, Kottayam restraining them from manufacturing, marketing, distributing or displaying any products by displaying the trade mark "Nirapara and Device" and trade name and brand name "Nirapara" or any other brand name identical, similar or deceptively similar to the trade mark of the respondent plaintiff have preferred this appeal. The parties will be referred to as they were before the District Court.
2. In brief, the case of the plaintiff as pleaded was that the first plaintiff Ammini Karnan who is the mother of the second plaintiff Biju Karnan is the proprietrix of K.K.R. Mills and the second plaintiff Biju Karnan is the proprietor of K.K.R. Flour Mills. The third plaintiff K.K.R. Agro Mills (P) RFA. 371 of 2007
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Ltd. is a company of which the Directors are K.K. Karnan, husband of the first plaintiff and father of the second plaintiff as well as plaintiffs 1 and 2. Plaintiffs 4 and 5 M/s, K.K.R, Food products and S.N.Food Products respectively are two registered partnership firms of which Sri.K.K.Karnan is the Managing Partner. The first defendant (the first appellant) Nirapara Roller Flour Mills (P) Ltd. was originally incorporated as a company under the Companies Act under the name South Kerala Food Processors (P) Ltd. It was later that the name was changed to the present name Nirapara Roller Flour Mills (P) Ltd. The second defendant Xavier Chacko is the Managing Director and the third defendant Rosamma Xavier and the 4th defendant Sunitha Jose are the Directors of the first defendant Company. The first plaintiff is the Proprietrix of the trade mark "Nirapara and Device" and plaintiffs 2 to 5 are using the said trade mark as assigned by the first plaintiff. The trade mark of RFA. 371 of 2007
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the plaintiffs "Nirapara" shows a para filled with paddy and inflorescence of coconut tree in its middle and two paddy shoots at both sides of the para. The general public, customers and consumers have accepted this trade mark as the trade mark of the plaintiffs' products. This is printed upon all packets, jute bags etc. of plaintiffs' products as well as their advertisements. The plaintiffs are manufacturers of rice, rice products, rice flours for various dishes like puttupodi, idiyappom podi, iddali podi, dosa podi, appom podi, palappam podi etc. Sri. K.K.Karnan started business in paddy, rice and rice products in the name and style K.K.Karnan and Company in 1977. His brother K.K.Padmanabhan joined as a partners in the business. Sri.Karnan was doing the business with trade mark "Nirapara" and Sri.Karnan honestly adopted the trade mark "Nirapara and Device" and dissolved the partnership with Sri.K.K.Padmanabhan and continued business with the same RFA. 371 of 2007
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trade mark "Nirapara and Device" under the new name S.N.Rice Mills Ltd. by inducting his wife Ammini Karnan as partner. The plaintiffs' products are popularly known with the name Nirapara and Device. Nirapara has become the trade name and brand name of plaintiffs' products. The plaintiffs' products are all of superior quality. They are sold in various parts of Kerala and all other States in India. They are marketed in foreign countries also. Because of their high quality and purity, plaintiffs' products popularly called as Nirapara products are purchased by customers. The trade mark itself is attracting customers for buying various products of the plaintiff. It was the plaintiff who first started to use the trade mark and trade name "Nirapara". The word Nirapara has become the trade name and brand name of the plaintiffs' products. The plaintiffs are enjoying high reputation and goodwill in respect of their products which are being identified by the trade mark "Nirapara and RFA. 371 of 2007
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Device". No one has the right to use the trade mark "Nirapara" without the knowledge and assignment from the first plaintiff. The plaintiffs have expended heavily for advertising their products through various media both in India and abroad. The volume of business of the plaintiffs is increasing every year. The plaintiffs have acquired right over trade mark "Nirapara and Device" and the trade name and brand name "Nirapara" belongs absolutely to the plaintiffs.
3. The plaint alleges that the first defendant has started business of rice, rice flours and the various dishes like dosappodi, puttupodi etc. in order to take advantage of the popularity, reputation and goodwill enjoyed by the plaintiffs and their products. Even the change of name was with this objective. The defendants are now using the trade mark and trade name identical, similar and deceptively similar to that of the plaintiffs' trade mark "Nirapara and RFA. 371 of 2007
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Device". The defendants are creating confusion among the general public and customers. The public and customers are being deceived by the defendants' using of the name and trade mark which is deceptively similar to that of the plaintiffs. The plaintiffs' trade mark has got registration from the Government of Behrain and Dubai and process for registration is in progress in other countries also. The plaintiffs' application for registration of the trade mark is pending with the office of the Registrar of Trade Marks, Chennai. The plaintiffs' trade mark is distinctive and it distinguishes plaintiffs' products from similar products manufactured by others including the products of the defendants. The defendants intention is to pass off their products as that of the plaintiffs. For this the defendants are using the trade mark of a Para filled with flour and two cereal like shoots at both ends as their trade mark. The defendants are also using the name "Nirapara". The trade RFA. 371 of 2007
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mark and name used by the defendants is identical to that of the plaintiffs. The intention of the defendants is mala fide. Even though the first defendant applied for registration under clause 30 before the Trade Mark Registry, Chennai the application was opposed by the plaintiffs and the registering authority dismissed the application by their order dated 7-3-2005. The defendants have absolutely no authority to use the trade mark and trade name of the plaintiffs. The defendants' act is illegal. The plaintiffs are suffering heavy loss because of the defendants' activities. Unless this illegal activities are prevented, the loss to the plaintiffs will be heavier. Hence the suit.
4. It was a joint written statement which was filed by the defendants. It was contended that the suit is not maintainable. In view of the allegation that K.K.Karnan executed an assignment deed selling the entire right of the unregistered trade mark "Nirapara and Device" along with RFA. 371 of 2007
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the goodwill to Smt.Ammini Karnan for an amount of Rs.1000/- Sri.Karnan has no locus standi to institute the suit against the defendants. The South Kerala Food Processors Pvt. Ltd. was registered as a private limited company on 12- 4-1988. In the year 1995 the Directors of that company passed a resolution in terms of Section 21 of the Companies Act changing the name of the company as Nirapara Roller Flour Mills Pvt. Ltd. From the year 1988 onwards the first defendant company is carrying on the business of operating flour mills for wheat, rice or other grains and deal in such products of grains. One of the main object of the company is to manufacture, produce, process, purchase, store, import and also deal in food products out of wheat, paddy, rice, barley etc. Ever since the incorporation of the company they have honestly adopted the trade mark "Nirapara" since 1990 for its business. To the defendants' knowledge no one is using a similar trade mark in respect of RFA. 371 of 2007
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wheat products such as maida, sooji and aatta. The defendants have been using the trade mark continuously, extensively and with bonafides ever since 25-3-1990 in respect of the above products. Because of this continuous and extensive use, the defendants have obtained a very high reputation. The defendants' trade mark has become exclusively associated with the products of the defendants' company since 1991. The first defendant company filed an application before the Registrar of Trade Marks in the name of South Kerala Food Processors for registration of the word "Nirapara" brand with a device of corn and container full of flour in respect of wheat products such as maida, sooji, aatta, bran and bran flakes. The above application was numbered as 543880 under clause 30. The application was accepted by amending the goods such as maida, sooji and aatta with disclaimer of word bran device of corn and device of container full of flour. The application submitted by the RFA. 371 of 2007
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defendants was advertised as accepted in the Trade Mark Journal dated 1-7-1996. Though the opposition filed by the first plaintiff was upheld by the registering authority, the defendants have preferred appeal before the Intellectual Property Appellate Board and the matter has not become final. The defendants have also filed an application for registration of its trade mark Nirapara brand under clause 31 for registering its products with respect to the production and marketing of bran, bran flakes, cattle and poultry feeds. The Registrar of Trade Mark issued a certificate of registration of trade mark for the trade name and device Nirapara brand. The defendant company is the owner of trade mark Nirapara brand and the company is enjoying the rights conferred by registration as per the the provisions of the Trade Mark Act. The registered owner of the trade mark has the exclusive right to use the trade mark in relation to the goods in respect of which the trade mark is registered. RFA. 371 of 2007
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Because of the continuous use of the trade mark Nirapara since 1990 it has attained very high reputation and has become exclusively associated with the aforesaid goods of the company. Because of the superior quality of the goods and marketing skills, the defendant company became very popular and the trade name with its device Nirapara became distinctive of its goods. The plaintiffs never obtained a registration for the trade mark Nirapara either under clause 30 or clause 31. From the affidavit filed before the Registrar of Trade Marks it is clear that the plaintiffs have no right over the trade mark. The trade mark "Nirapara" was not adopted by the plaintiffs as alleged in the plaint. The agreement dated 27-6-1977 alleged to have been executed between K.K.Karnan and K.K.Padmanabhan reveals the fact that the firm name for marketing their rice products was K.K.Karnan and Company. The plaintiffs have no case of adoption of the disputed trade mark with respect to the RFA. 371 of 2007
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defendants' products viz., maida, aatta and sooji. They are also not making any claim over any of the goods mentioned in clause 31 of the Trade Mark Rules pertaining to bran, bran flakes, cattle and poultry feeds. Even as per the allegations in the plaint adoption of the disputed trade mark by their establishment has reached a stage of fragmentation. The plaintiffs have no right over the trade mark "Nirapara". They have not established that the disputed trade name Nirapara was being used with respect to the goods mentioned therein. The trade mark Nirapara has become distinctive and distinguished with the defendants' products. The defendants have never taken advantage of the popularity and reputation or goodwill enjoyed by the plaintiffs. Even though the trade mark and trade name used by the plaintiffs may be identical and similar to that of the defendants, they have no mala fide intention to pass off their products as that of the plaintiffs RFA. 371 of 2007
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by deceiving and confusing the general public and customers. In 1996 itself plaintiffs were aware of the use of the trade name Nirapara by the defendants. Even though a lawyer notice was issued to the defendants regarding this no action was taken in pursuance of that notice. The plaintiffs are therefore guilty of acquiescence and they are not entitled for a discretionary relief of injunction. At this stage the plaintiffs are not entitled to initiate any action. No explanation is given by the plaintiffs for the inordinate delay of 9 years in filing the suit, especially when the defendants have been, in the market for more than 15 years and the defendants sales have gone up to crores of rupees. The first defendant's company's name was changed with the approval of the registrar of companies. The plaintiffs who were aware of this change of name did not take any action under section 20 of the Companies Act. The first defendant company is having an independent entity and reputation in RFA. 371 of 2007
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the market with large number of customers. The suit is liable to be dismissed.
5. On the basis of the above pleadings the learned District Judge raised the following issues for trial.
1. Whether the suit is maintainable?
2. Whether the plaintiffs are the prior users of an unregistered trade mark "Nirapara"?
3. Whether the plaintiffs are entitled to the injunction?
6. At trial the evidence on the side of the plaintiffs consisted of the oral testimonies of PW-1 to PW-8 and documents Exts.A1 to A49 apart from X-1 and X-2. On the side of the defendants the solitary witness was DW-1 and documents B-1 to B-35(A) were marked. The learned District Judge considered issue No.1 first. It was noticed that though it is contended in the written statement that the suit is not maintainable, the defendants have not shown or explained as to how the suit is not maintainable. The District Judge assumed that the contention regarding maintainability RFA. 371 of 2007
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is raised on the premise that K.K.Karnan, Managing Partner of plaintiffs 4 and 5 having already assigned the trade name/trade mark to the first plaintiff has no locus standi to file the suit. Making a survey of the documents the learned District Judge found that the claim in the plaint is that the first plaintiff has become the absolute owner of the disputed trade mark "Nirapara". It was noticed that K.K.Karnan whose locus standi is disputed is not a party to the suit, but his name figures in the plaint as the Managing Partner of plaintiffs 4 and 5 which are partnership firms in which the first plaintiff is also a partner. The learned District Judge referred to Section 39 and held that assignment of an unregistered trade mark is valid. In this context, the learned District Judge relies on the judgment of the Supreme Court in Dariwal Industries Ltd. v. M.S.S. Food Products, 2005 SAR (civil) 244. Mainly on the reason that Karnan is not a party to the suit in his personal capacity and RFA. 371 of 2007
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on the reason that no further arguments were raised to show that the suit is not maintainable, the learned District Judge would answer issue No.1 and hold that the suit is maintainable. Considering issue No.2 the learned District Judge would notice that Ext.A40 is the pouches containing the trade name and trade mark of the plaintiffs while Ext.A41 is the pouches containing the trade name and trade mark of the defendants. According to the learned District Judge there cannot be any doubt that the trade mark and trade name shown in Exts.A40 and A41 are similar and an ordinary customer will be confused by the similarity of these two. Ext.B28 is partnership agreement dated 27-6-1977 executed between K.K.Karnan and his brother K.K.Padmanabhan. Ext.A4 is the partnership deed dated 18-6-1991 executed between Karnan and his wife Ammini Karnan in the name S.N. Rice Mills. Ext.A7 is certificate of incorporation dated 19-6-2001 in respect of K.K.R. Agro RFA. 371 of 2007
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Mills Pvt. Ltd. Ext.A6 is an assignment deed dated 12-11-01 by which unregistered trade mark "Nirapara" along with goodwill etc. is assigned by Karnan to Ammini Karnan and the allegations in the plaint are all noticed by the learned District Judge to understand that the plaintiffs' case is that from 1975 onwards the plaintiffs were using the disputed trade mark of "Nirapara". Ext.A10 certificate of registration from sales tax department in respect of K.K.R.Mills, Ext.A11 assessment order dated 13-6-1989 in respect of K.K.Karnan and Company for the assessment year 1987-88, Ext.A12 the inspection report dated 10-8-1998 prepared by the Sales Tax Officer in respect of the business place of K.K.Karnan and Company, Ext.A20 sales tax registration dated 24-8-2000 in respect of K.K.R. Flour Mills, A21 sales tax registration in respect of K.K.R. Agro Mills Pvt. Ltd. dated 9-11-2001 onwards, A22 dated 29-3-2003 in respect of K.K.R. Food Products, A23 dated 3-3-1990 showing that RFA. 371 of 2007
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K.K.Karnan got registration under Sales Tax as dealer of rice and paddy, A24 inspection report dated 13-3-1990 prepared in respect of K.K.Karnan's business place, A26 stock register of K.K.Karnan for the year 1989-90 are all relied on by the learned District Judge to conclude that the plaintiffs establishments were functioning as pleaded by the plaintiffs. Oral evidence of PW-2, partner of M/s. J.V. & Sons, suppliers of jute bags is relied on by the court below to accept the plaintiffs' case that M/s. J.V. & Sons used to supply jute bags with trade mark "Nirapara" printed on the same to the plaintiff. Oral evidence of PW-3, administrator of Okkal Sree Krishna Temple is relied on by the court below to accept the plaintiffs' case that from 1984 onwards advertisement banners of Nirapara rice were being displayed during the temple festival at the instance of K.K.Karnan. Testimony of PW-4, merchant of rice and rice products based at Kollam is relied on to believe the version of the RFA. 371 of 2007
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plaintiffs that from 1994 onwards they used to purchase Nirapara brand rice from Karnan. The oral testimony of PW- 5 Addl. Sales Tax Officer, Perumbavoor during the period July 1989 to January 1991 and Ext.A24 inspection report and A25 and A26 stock registers of Karnan are relied on to accept the case that Sri.Karnan was popularly called Nirapara Karnan and his products were popularly called by the name Nirapara. The evidence of Pw-6 a whole sale merchant in rice and provisions at Palai is believed by the court below to prove Exts.A15 andA16 carbon copies of bill books kept by K.K.Karnan and Company in respect of transactions on 22-12-1988 and 5-1-1989. Ext.A17 day book kept by K.K.Karnan and Company reflecting Exts.A15 and A16 is also taken into account by the court below to conclude that atleast during the period of 1988-89 K.K.Karnan was marketing goods under Nirapara brand. Ext. X-1 notification in Malayala Manorama daily proved by RFA. 371 of 2007
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PW-7, an employee of Malayala Manorama daily dealing with an advertisement in respect of the installation of the first automatic rice mill by S.N.Rice Mills is very much relied on by the court below. According to the court below, Ext. X-1 shows that the rice mill started business from 1975 onwards and its genuineness cannot be doubted since the same was released long before the litigation commenced. Ext.X2 notification dated 9-6-1996 in Desabhimani daily in respect of "Niradeepam Rice" manufactured by first defendant company is referred to by the court below to find that the trade mark of the first defendant company is identical to the disputed trade mark of the plaintiff. The learned District Judge would make a survey of the defence evidence particularly the oral testimony of DW-1 and documents Ext.B2 certificate of incorporation dated 12-4-1988 in respect of South Kerala Food Processors Pvt. Ltd. , Ext.B3 dated 23-2-1995 showing the change of the name of Sough RFA. 371 of 2007
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Kerala Food Processors as Nirapara Roller Flour Mills Pvt. Ltd. Exts.B6 and B7 sales tax assessment orders of South Kerala Food Processors Pvt. Ltd for 1991-92 and 1993-94, Ext.B8 assessment order for 1995-96 of the first defendant company, Ext.B9 stock statement of the first defendant company in respect of 1996-97, B10 to B13 assessment orders for the years upto 2003-04, B14 certificate of sales tax registration changing the name of South Kerala Food Processors, B19 registration certificate obtained by the defendant company from the Industries Department, B16 sanction order dated 7-12-1988 issued to the South Kerala Food Processors Pvt. Ltd from Vazhappally Panchayat for installation of a motor in its business place, B17 licence issued under Kerala Food Grains dealers licensing order to South Kerala Food Processors Pvt. Ltd. B20 Panchayat licence dated 10-3-2004, B21 receipt for payment of licence fee, B18 licence obtained under the Factories and Boilers RFA. 371 of 2007
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Act, B33 bill book of South Kerala Food Processors Pvt. Ltd. from 31-10-1990 dealing with sales of wheat and wheat products, B34 stock register of South Kerala Food Processors for 1991, B35 purchase register and conclude that there is no documentary evidence to show that before 1995 the defendants have used trade mark Nirapara for sale of their products. According to the court, though the defendants have obtained a registration for class 31 of the Act under the trade mark Nirapara for cattle and poultry feeds as per B5 there is nothing to show that before changing their name the first defendant company had passed off their goods with the trade mark or trade name Nirapara. The statement in B31 issued on behalf of the plaintiffs that the trade mark Nirapara has been used by the plaintiffs from 1991 onwards highlighted by the defendants in their arguments against the plaintiffs is considered by the District Judge. According to the District Judge, the RFA. 371 of 2007
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explanation offered by PW-1 that the above statement is a mistake committed by the Advocate while sending the notice was a reasonable one and there was evidence oral and documentary to show that even before 1991 the plaintiffs were using the trade mark Nirapara. Thus on an analysis of the evidence the court below concluded that plaintiffs are the prior users of the trade mark Nirapara. Further, in this context the court below referred to Ext.A42 copy of the FIR in crime No.370/2000 registered on the basis of a complaint filed by PW-1 before the Judicial First Class Magistrate, Thiruvananthapuram alleging that his trade mark and trade name Nirapara and logo are being misused by the accused persons therein for passing off their products by some rival business men. A45 copy of the complaint filed by PW-1 against one NSN Reddy and others before the Judicial First Class Magistrate's Court, Paravoor raising accusation similar to those contained in Ext.A42 is RFA. 371 of 2007
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also referred to. According to the court below when DW-1 was examined with reference to Exts.A42 and A45 his evidence was one of ignorance. This according to the court below, will show that unlike the plaintiffs, DW-1 was not much concerned with the infringement of the trade mark by rival traders. Thus the court below concludes that it was the plaintiff who were vigilant in protecting their trade mark from invasion unlike DW-1. On the basis of the analysis of the evidence the court below held that PW-1 and his concerns were prior users of the trade marks Nirapara and the device therein and he assigned it to the first plaintiff by A6 and thereafter she has become the absolute owner of the trade mark and with her permission the other plaintiffs are using it. Thus issue No.2 was answered in favour of the plaintiffs.
7. Considering issue No.3, grantability of the relief of injunction the learned District Judge would refer to various RFA. 371 of 2007
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judicial precedents and conclude that most customers of the plaintiffs are common men who will be confused by the similarity in the trade mark and logo presently used by the plaintiffs and the first defendant. Finding that the first defendant is not legally entitled to pass off their goods using a trade mark which is identical or deceptively similar to that of the plaintiffs, the court below held that the plaintiffs being prior users are entitled for relief of injunction. The plea of acquiescence taken by the defendants was also repelled by the court below on the basis that the plaintiff was resisting the defendants' application for registration before the registering authority and thus agitating though before other forums for protecting their trade mark. Resultantly the court below would answer the third issue also in favour of the plaintiffs and passed the impugned decree of prohibitory injunction.
8. It was very extensive submissions which were RFA. 371 of 2007
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addressed before us by Sri.T.Krishnan Unni, learned senior counsel for the appellant. According to Mr.Krishnan Unni, essentially passing off action is a common law remedy enunciated by the common law courts in England to redress the tortious act of the defendant in passing of his goods as the goods of the plaintiff. The tort lies in the misrepresentation by the defendant aimed at the potential buyers of their goods or services who are invited to the goods or services believing that the goods are that of the plaintiff. This might be done by the use of a confusingly or deceitful trade name, mark or other indication used by the plaintiff in respect of such goods or services. Passing off action is based on the common law principle that nobody has any right to represent his goods as that of another. Referring to the judgment of House of Lords in Erven Warnink v. J.Townend & Sons, 1979 FSR 397 Mr. Unni submitted that Lord Diplock in that case identified five RFA. 371 of 2007
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characteristics as the requisites for a valid cause of action for passing off - (1) a misrepresentation, (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of the goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another (in the sense that this is a reasonably foreseeable consequence) and (5) which causes actual damage to the business or goodwill of the trade by whom the action is brought (or in a quia timet) will probably do so. Mr. Krishan Unni referred to the judgment of the Supreme Court in Cadila Health v. Cadila Pharma,2001 PTC 300 SC and in Neinz Italia & another v. Dabur Idia Ltd., (2007)6 SCC 1 and submitted that the above principle was endorsed by the Supreme Court of India. According to him, in order that an action for passing off is successfully established, it is necessary that all the aforesaid elements should be separately and cumulatively proved and if any RFA. 371 of 2007
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one of the elements is missing the action for passing off has to fail. The learned senior counsel referred to the judgment of the Supreme Court in Cadila Healthcare Ltd. v. Dabur India Ltd. MIPR 2008 (3) 0162. Mr. Unni went on to argue that various elements are to be proved by a plaintiff in an action for passing off. According to him, of the various elements, the primary and the most essential one is that the reputation and goodwill attained by the plaintiff's mark in the minds of the potential consumer as on the date of the alleged activity complained off by the defendant. It is the proprietary right in goodwill attained by a mark which is sought to be protected under the action for passing off. Therefore the action cannot succeed unless the plaintiff establishes goodwill for his mark as on the date when the defendant commenced the activity complained off. Counsel referred to the judgment in Jarman & Platt Ltd. v. I.Barget Ltd. & others, 1977 FSR 260. Any future goodwill that may RFA. 371 of 2007
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arise to the plaintiff's mark after the activity complained off cannot be accounted for sustaining the passing off action. Counsel referred to the judgment in Cadbury Schweppes Pty Ltd. v. Pub Squash Pty. Ltd. (1981) 1 All E.R. 213.
9. Coming to the element of misrepresentation, Mr. Unni submitted that only actual representations which are calculated or capable of injuring another's proprietary goodwill amount to an actionable misrepresentation under the passing off law. Prior to alleging misrepresentation, the plaintiff ought to establish that his mark has acquired a distinctive character amongst the consumers, i.e., the consumers identify the mark exclusively with the plaintiff's goods in the market. When the mark is essentially descriptive in character or is a common word ("Nirapara" as in the present case) the plaintiff should primarily establish that amongst his consumers his mark has acquired a secondary significance over and above the descriptive RFA. 371 of 2007
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character or primary meaning of the word adopted as the trademark. Without this even if a rival trader adopts a similar or identical mark to that of the plaintiff, the plaintiff cannot succeed in proving the element of misrepresentation in a case of passing off. The judgments in City Link Travel Holdings Ltd. & others v. Lakin & another, (1979) FSR 653, and Cadila Healthcare Ltd. v. Dabur India Ltd., MIPR 2008 (3) 0162 were relied on by Mr.Krishan Unni.
10. Damages is another essential element element according to Mr. Krishnan Unni. The tort of passing off is complete only when the plaintiff proves that he has sustained an injury due to the activity complained off by the defendant or in a quia timet action is likely to be injured. Mere likelihood of confusion is not adequate to complete the tort of passing off. Confusion should be of such a nature that the same is capable of injuring or damaging the business, goodwill or reputation of the plaintiff. While in a RFA. 371 of 2007
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case of long concurrent usage between the rival mark, proof of actual deception is a must, in a quia timet action, probability of deception is sufficient. Counsel referred to the judgment in H.P.Bulmer Ltd. & Showerings Ltd. v. J.Bollinger SA & Champagne Lanson Pere et Fils, 1978 RPC 79 CA and also the commentaries of P.Narayanan on Trademark, Trade name and passing off cases, 2nd Edition, Volume II. According to Mr. Krishna Unni in the instant case none of the above basic elements of passing off law was considered by the court below while deciding the suit. The main question that is seen examined by the trial court was prior use of the rival claimants. Solely on the basis of a finding of prior user in favour of the plaintiff, the suit has been decreed. The plaintiff averred in the plaint that they adopted the mark "Nirapara" with device in the year 1975 in connection with paddy, rice and rice products. But in the oral evidence of PW-1 Sri. K.K. Karnan (proof affidavit) it is RFA. 371 of 2007
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stated that they have used the mark "Nirapara" with device only since the year 1988. The plaintiff produced Exts.A15 and A16 carbon copies of bill books wherein the word "Nirapara" appears against bills relating to the sale of 70 kilograms of rice bags to retail dealers of the plaintiff. A bare perusal of the bill books would show that all the items therein do not contain the trade name "Nirapara" in a uniform manner. Mr. Krishnan Unni pointed out various other infirmities about Exts.A15 and A16. A15 and A16 were sought to be corroborated by PW-6, son of one Govindan Nair, a rice merchant in Palai who purchased rice bags from M/s. Karnan & Co. in the year 1990. Mr. Unni pointed out various infirmities in PW-6's evidence including documents and submitted that it is unsafe to rely on A15 and A16 bill books which are doubtful documents. Counsel pointed out that no other documents has been produced by the plaintiff to substantiate their claim of prior usage than RFA. 371 of 2007
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the defendants who started using the mark from 25-3-1990 as evidenced by documents B-22, B32 and B-33. Mr. Krishan Unni submitted that the finding that there is prior usage from the year 1975 apparently entered by the court below is totally unjustified. It was Ext.X-1 which was relied on by the court below for substantiating the plaintiff's claim of long use from 1975. Ext. X-1 document pertains to inauguration of a rice mill with modern facilities by S.N.Rice Mills stating inter alia that superior quality Nirapara branded rice is being introduced in the market by S.N.Rice Mills which has been functioning from 1975 onwards. But A4 document will show that S.N.Rice Mills came into existence only on 18-6-1991. The wording in X-1 also does not give any inference that Nirapara was in existence since 1975. The admissions in B-31 lawyer notice is highlighted by Mr.Krishan Unni. The Counsel referred to Annexure-A2 caution notice issued in the name of KKR Mills produced RFA. 371 of 2007
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along with IA. 4630 of 2007 wherein it was stated that Nirapara brand rice has been manufactured and distributed from the year 1991 and had acquired substantial reputation for the rice sold under that trade name because of the high grade export quality referred to in B-1 lawyer notice. Counsel submitted that these evidence will show that the mark was adopted some time in early 1991 and the same acquired reputation and goodwill with introduction of high grade export quality Nirapara brand rice free from mudstone dust only from 15-11-1991. Thus veracity of Exts.A15 and A16 relied on by the trial court becomes extremely doubtful. Counsel would refer to the testimonies of PW2, PW3, PW4, PW5 and submitted that the court below was not at all justified in relying on the oral testimonies of these witnesses for finding prior usage of the mark. All these witnesses are interested ones as they are in one way or other connected with the plaintiff. None of these oral RFA. 371 of 2007
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evidence are supported by any documents. PW6 has certainly produced A15 and A16, but they are not conclusive. They are only carbon copies. The originals were not called for from their custodians.
11. Mr. Unni highlighted that there is no finding on fact by the learned District Judge as to reputation and goodwill in the year 1990. According to him, the court below overlooked three important pieces of evidence in this connection. Ext.B32 auditors report, Annexure-A1 advertisement, B19 registration certificate and B22 series of bills will show that the defendant started his business activity with the mark "Nirapara" as on 23-3-1990. It was the burden of the plaintiff to establish that sufficient goodwill and reputation was already acquired over the mark as on that date. Mr. Unni submitted that there is no attempt from the part of the plaintiff to establish their goodwill as on 25-3-1990. The trial court was carried away RFA. 371 of 2007
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by the pleadings in the plaint that the "Nirapara" was adopted by the defendant in 1995 when the company's name was changed from South Kerala Roller Flour Mills to Nirapara Roller Flour Mills. Without discussing or adverting to the pieces of evidence, the court below entered a finding that the appellant commenced use of the trade mark in 1995 and not at any time earlier. But there is clear evidence regarding usage from 25-3-1990. Therefore the goodwill and reputation of the plaintiff's Nirapara mark ought to have been determined as on 25-3-1990. The relevant time to find reputation of the plaintiff's mark is the time of commencement of the defendant's business. Mr. Unni submits that the plaintiff has miserably failed in establishing the goodwill in 1990. He referred to Ext.A9, A15, A16, A25 and A26 and submitted that from Ext.A9 turnover statement relied on by the plaintiff it is not discernible as to what is the sales turnover achieved by the plaintiff using the mark RFA. 371 of 2007
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"Nirapara" individually. Relying on the judgment of the Delhi High Court in Vijay Kumar Ahuja v. Lalita Ahuja, 2002 (24) PTC 141 counsel submitted that mere cumulative sales figures cannot be said to have proved reputation, particularly when the separate turnover figure attained using the mark is not discernible. Counsel submitted that as against Ext.A9 and the evidence adduced by the plaintiff regarding turnover for the seven day period in the financial year 1989-90 the defendant's turnover was Rs.25,460/-.
This was over Rs.2 crores 29 lakhs for the financial year 1990-91. A9 shows that the plaintiffs have not spent any amount for advertisement purposes until the financial year ending March 31, 1991. A9 will thus discredit the version of PW3 who stated that banners of Nirapara rice used to be exhibited in Okkal Sree Krishna Temple festival from the year 1984 onwards. Mr. Krishnan Unni submitted that the plaintiff in a suit for passing off will have to establish that RFA. 371 of 2007
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his mark has attained such an extent of distinctiveness that use of the mark will be identified by the public as that of his and his alone as on date of the complained activity by the defendant. Whether at a particular time a name has goodwill of any substantial extent must be a question of act to be determined on the basis of the evidence. A15 and A16 bills books will show that the plaintiffs have only sold rice to retail traders and that too in 70 kilograms bags. This will show that such rice has not been sold to the end customers under the trademark "Nirapara" and that end customers have never got a chance to identify 'Nirapara branded rice' with the plaintiff. Thus there is no possibility that end customers are familiar with the mark Nirapara rice of the plaintiff as on 25-3-1990. Therefore, according to Mr.Krishnan Unni it can be straight away said that there is no evidence to satisfy the standard of proof for establishing reputation. Mr. Unni reiterated once against that Ext.X-1 RFA. 371 of 2007
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advertisement in Malayala Manorama was not evidence enough to enter a finding that export quality Nirapara brand rice was being manufactured by the plaintiff for a quite long time. Ext.A2 will show that even the plaintiff claimed reputation only on the basis that high grade mudstone free rice introduced only in November 1991. Counsel referred to Ext.B2, B16, B17, B18, B19, B32 and submitted that these are all documents which will throw light into the bonafide and systematic way in which the defendant company commenced business operations since 1988. According to him, there cannot be any comparison between the sales turnover of the plaintiff and the defendant for the financial year 1990-91. While the plaintiff's turnover was a meagre Rs.36 lakhs and six thousand the defendant's was Rs.2 crores and 29 thousand. According to Mr. Unni it is highly illogical to say that the defendants are taking advantage of the goodwill of the RFA. 371 of 2007
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plaintiff's mark by misrepresenting and passing off their products as that of the plaintiff. Counsel submitted that at that point of time the plaintiff was confined to manufacture and sale of rice only while the defendant was manufacturing and selling wheat based products under the mark "Nirapara". Mr. Unni submitted that in order to protect the accruing goodwill and reputation over the defendant's trademark "Nirapara" by the end of 1990 the defendant took steps to register and protect the mark "Nirapara" before the trademark Registry. A search application was filed in December 1990. Subsequently in 1991 application No.543880 was preferred in class 30 in relation to Maida, Sooji, and Atta. The application was opposed by the plaintiff . The plaintiff's objections were upheld finding that the plaintiff is the prior user of the mark relying on the bill books produced by the plaintiff. However, in appeal the Intellectual Property Appellate Board by Ext.B1 order held RFA. 371 of 2007
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that the bills produced by the plaintiffs are fabricated and cannot be accepted in evidence. Further on the question of deception and confusion it was found that in spite of 15 years of concurrent trading the plaintiff could not produce a single piece of evidence to prove the same. The defendants were granted registration to their trademark. Ext.A3 is the certificate of registration. The plaintiffs have certainly filed a review petition against the order B-1. But review is not likely to be allowed since in Godrej Sara Lee v. Reckitt Benckiser (India) Ltd. (MIPR 2008(3) 0124) the Board has taken a view that it has no jurisdiction or power to review. The plaintiff is also the registered proprietor of the mark "Nirapara" in class 31 against Bran, Bran flakes, cattle and poultry feeds vide application No.813396 dated 4- 8-1998. The certificate of registration is B5.
12. Counsel submitted that only when reputation and goodwill is established by the plaintiff, the court will have to RFA. 371 of 2007
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consider the other ingredients such as misrepresentation and damages. In the case of a distinctive trademark the courts are free to presume misrepresentation when the defendant adopts an identical trademark. But where the trademark is of a descriptive in nature it is for the plaintiff to establish that the trade mark has acquired a secondary significance among the customers and trade as on date of the activity complained off. Mr. Unni highlighted that Nirapara is a common word having a definite meaning and signifies prosperity and is descriptive in connection with the trade of rice and paddy. That being so, it is for the plaintiff to establish that he has acquired a secondary significance over and above the descriptive character or primary meaning of the word adopted as his trademark. The plaintiff failed to establish the same.
13. The counsel submitted that in quia timet action likelihood of damages alone is sufficient in a case of long RFA. 371 of 2007
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concurrent usage between the rival marks, proof of actual deception is a must. The court below came to the conclusion that the plaintiff need establish only likelihood of deception. This conclusion is arrived at as a result of the gross failure to notice that both the parties were concurrently trading in the same market for 17 years in respect of rice ad wheat products. Though admittedly plaintiff noticed the activity of the defendant in the year 1995, even at the trial in the year 2007 the plaintiff could not establish a single instance of actual damage caused due to the alleged activity of the defendant. Thus in this case the tort of passing off cannot be determined to have been completed.
14. Counsel submitted that at any rate, there is acquiescence on the side of the plaintiff. Though B31 notice was sent to the defendants in 1996 the suit is filed only in 2005, after a long delay of 9 years. All these years the RFA. 371 of 2007
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plaintiff stood by and allowed the defendant to develop his business from 2 crores in 1994 to 13 crores in the year 2004. Learned counsel relied on a judgment in Amritdhara Pharmacy v. Satyadeo Gupta (PTC (Suppl) (2) 1 at page 10 para 18 and 19). Neither the opposition proceedings in the registry nor the criminal cases initiated against third parties will be an answer to the contention of acquiescence. According to Mr.Krishnan Unni, the facts and circumstances which have come out in evidence will necessitate the matter to be classified as a special case whereby both marks have attained independent distinctiveness in respect of their different products i.e., plaintiff in relation to rice products and the defendants in relation to wheat products. Concurrent usage can be permitted. Mr. Krishnan Unni relied on the judgment of the Supreme Court in Vishnudas Trading as Vishnudas Kishebndas v. Vazir Sultan Tobacco Co. Ltd. (1996 PTC 16) RFA. 371 of 2007
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15. Smt.V.P.Seemanthini, the learned senior counsel for the respondent/plaintiffs submitted that there is absolutely no warrant for interference with the judgment and decree of the court below. She submitted that Nirapara as mark with a logo as seen in Ext.A-40 belongs to the plaintiffs. Defendant used Ext.A41 mark and logo in respect of their goods. On a comparison of the marks the deceptive similarity is clearly established. Smt.Seemanthini pointed out that the pleadings of the plaintiffs referred to the commencement of the business by the plaintiffs in 1975 and also to the reputation the plaintiffs earned by use of Ext.A40 mark and logo in connection with the plaintiff's goods. She submitted that a defendant/company was incorporated in the year 1988 and even if the very first bill issued by the defendant is assumed to be proved the defendant started commercial production only from 25/03/90. According to Smt.Seemanthini proper issues RFA. 371 of 2007
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arising from the pleadings raised by the parties were raised by the court below and correct findings have been entered by the court on all issues including the issue whether the plaintiffs are entitled to get a decree of prohibitory injunction. According to the learned senior counsel, there is no specific ground raised in the memorandum of appeal that any principle of law as stated in the judgment of the court below is wrong nor is any ground raised that appreciation and evaluation of evidence by the court below is arbitrary or perverse. When the trial court applies the correct legal principle and appreciates the evidence correctly and enters a specific finding in favour of the plaintiffs on the issues raised, the judgment of the trial court is not to be lightly interfered with. According to Smt.Seemanthini, the crucial question to be decided is the question of the plaintiffs reputation as owner of the trade mark that is to say plaintiffs title to the mark. Reputation according to her is the RFA. 371 of 2007
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goodwill belonging to the business of the plaintiff. The partnership firm which is the predecessor in interest of the present plaintiff commenced on 01/08/75. The firm was registered on 29/07/1977. Certificate of Chartered Accountants showing sales turn over and advertisement charges incurred by the plaintiffs during the period from 1976-2003 as well as Sales Tax Assessment are available on record. Ext.A11 to A12, A15 and A16 were highlighted by Smt.Seemanthini. Smt.Seemanthini submitted that reputation like 'Rome is not built in a day' - it is built over the years. Labels or receptacles go a long way in bringing reputation to the commercial establishments. She referred to the evidence of PW2 and submitted that gunny bags supplied by PW2 to the plaintiffs carried the words NIRAPARA and its device since 1988. Smt.Seemanthini highlighted the oral evidence given by PW5 former sales tax officer belong to the area where the production units of the RFA. 371 of 2007
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plaintiff are situated. According to her, PW5 is not a mere way farer. He is a Government official who knows the plaintiff and his trade. He was intimately connected with the plaintiffs trading activities in his official capacity. He had occasion to inspect the books of accounts and other records relating the plaintiffs business for the purpose of assessment. Ext.A24 inspection report dt.13/03/90 contains his signature. Exts.A15 to A17, 24 to 26 were properly proved. He has given evidence to the effect that Sri.K.K.Karnan is popularly known since long as Nirapara Karnan. As the local Sales Tax Officer, he had the vocational necessity to be in touch with the traders within the area under his jurisdiction He is the most competent witness. Nothing was brought out in cross examination to doubt his veracity. The trial court which had occasion to see him and record his evidence, believed him and accepted his evidence. His testimony is a solid piece of evidence of RFA. 371 of 2007
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plaintiffs association with the words NIRAPARA long prior to 1990. Smt.Seemanthini referred to the testimony of PW6 also. She submitted that PW6 has clearly stated that K.K.Karnan has long since been known as Nirapara Karnanan. About the evidence of PW3, she submitted that PW3 is a local resident who used to collect advertisements of Nirapara products during the festival in the local temple from 1984 onwards. As regards PW4, she submitted that PW4 is a wholesale merchant from Kollam who used to purchase rice products branded Nirapara from the plaintiff. She submitted that Ext.A17 day book and Ext.A26 stock register contain the signatures of PW5. She argued that the plaintiff as PW1 has deposed that the originals of the bills pertaining to the counter foils in Ext.A15 had been given to the concerned purchasers. Therefore, according to her, the evidentiary value of Ext.A15 cannot be under-estimated. Thus, according to Smt.Seemanthini, the most crucial RFA. 371 of 2007
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question in the case, which is regarding the reputation of the plaintiff as owner of the trade mark in question, can be answered only in favour of the plaintiff.
16. Smt. Seemanthini further submitted that the conduct of the parties in specific situations justifying the inference that the plaintiff is the true owner of the trade mark and genuinely interested in the protection of the mark against infringement, is also highly relevant. She submitted that when some persons in Kollam openly infringed the trade mark "Nirapara", the plaintiff initiated immediate criminal action against those persons. She referred to Exts.A42 and A45 documents, in this connection. She highlighted that as against the above response of the plaintiff, the defendant did not take any action at all to protect the trade mark (which he claims to be his own) from invasion.
17. Smt. Seemanthini would then submit that the RFA. 371 of 2007
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jurisdiction to grant a decree of injunction which is invoked, is an equitable jurisdiction and therefore, the general conduct of the parties will have considerable relevance while deciding as to how the court's discretion is to be exercised. According to her, the conduct of the defendant has been such that invocation of the discretionary jurisdiction against him will be perfectly in order. Smt. Seemanthini pointed out that the defendant's Company was originally registered under the name and style "South India Food Processors Private Limited", on 12.4.1988. But, on 23.2.1995, the name of the defendant Company is changed to "Nirapara Roller Flour Mills Private Limited". This, according to her, is at a time when the controversy between the parties had already erupted. She submitted that change of name by a trader resembling the trade name of his rival is a conduct which will attract an adverse inference against the trader, in the absence of any convincing reason for the adoption of the RFA. 371 of 2007
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name of the trade rival. Referring to Ext.A48, a copy of the F.I.R. in Crime No.247/2000, Smt. Seemanthini submitted that the defendant is a person, who was involved in a serious case regarding the criminal dealings in relation to rationed articles in distribution for the poorer sections of the people. Considering the equitable character of the relief, it is only appropriate that the character of the defendant ought to be kept in mind by this Court, while deciding the suit. She referred to Ext.A49 order of the Assistant Registrar of Trade Marks, wherein the manipulative exercises resorted to by the defendant are detailed.
18. Smt. Seemanthini would then argue that there is no acceptable evidence in this case, regarding the commencement and continuance of the defendant's dealings which establish the link between the trade mark in question and his products. She submitted that to establish the defendant's claim that he started business from 25.3.1990, RFA. 371 of 2007
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the solitary witness examined by him is himself. Their reconcilable contradictions between the defendant's stand in this regard and the documentary evidence has been detailed in Ext.A49 order passed by the Assistant Registrar of Trade Marks. According to Smt. Seemanthini, while the plaintiff has proved the documents relied on by the plaintiff, by examining the witnesses, what the defendant has done is to merely produce papers purporting to be bills. Unless these papers are proved by adducing supporting evidence, it cannot be stated that these are bills as claimed by the defendant.
19. According to Smt. Seemanthini, so many other contentions raised by the defendant subsequently are only technical contentions, which cannot be accepted in the teeth of factual findings entered by the court below, in favour of the plaintiff on the basis of evidence actually available in that case. She referred to the apparent admission in RFA. 371 of 2007
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Ext.P31, the lawyer notice that the trade mark "Nirapara" has been used since 1991 only. She submitted that it has been explained by PW1 that this is the result of a mistake in communication with the lawyer. A mistake in communication, cannot in any way, affect the correctness of the finding in the plaintiff's favour, which is based on quality evidence, which establishes the plaintiff's title to the mark. Referring to Section 31 of the Indian Evidence Act, Smt. Seemanthini submitted that unless an admission operates as an estoppel, the same will not be conclusive. The learned senior counsel referred in this context, to the judgment of the Supreme Court in Narayan v. Gopal (1960 SC 100) and State of H.P. v. Gujarat Ambuja Cements Ltd. 2005(6) JT 298. She relied on the commentaries of Woodroff and Amir Ali as well as Ratanlal on the Law of Evidence.
20. Smt. Seemanthini would refute Mr.Krishnan RFA. 371 of 2007
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Unni's arguments against the probative value of Exts.A15 to A17. According to her, the stand that Exts.A15 and A16 are only secondary in evidence is not acceptable, in view of the judgment of the Supreme Court in Prithi Chand v. State of Himachal Pradesh (AIR 1989 S.C. 702). She submitted that in the above decision, it has been held by the Supreme Court, interpreting Section 62 that carbon copies of bills are primary evidence. The decision applies in this case, where bills were proved by examining PW6, recipient of the bills. That Exts.P15 and P16 are originals get corroboration from Ext.A17 day book in the year 1988-89. The last page of Ext.A17 is signed by the Assistant Commissioner of Sales Tax. The earlier pages contain Sales Tax Officer's official signature. She referred in detail to the various relevant entries made in Ext.A17.
21. According to Smt.Seemanthini, the word "reputation" means character imputed to a person by those RFA. 371 of 2007
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acquainted with him. That by which we are known and is the total sum of how we are seen by others. Reputation is what people think an individual is and what they say about him. According to her, the very fact that Mr.K.K.Karnan, who is the Managing Director of the third plaintiff and the Managing Partner of plaintiffs 4 and 5 is identified with the strange name as 'Nirapara Karnan" throughout the world itself is more than sufficient to prove that he has established his reputation as a dealer in Nirapara rice products from the year 1975 onwards.
22. Smt.Seemanthini maintained that Ext.X1 is a very strong piece of evidence in favour of the plaintiff and that refute all the arguments of Sri.Krishnan Unni against Ext.X1. Ext.X1 is of the year 1991, a point of time the controversy had not surmised. Ext.X1 will show that the plaintiff had established reputation in the trade name "Nirapara", much prior to 1990, for which period only the defendants are RFA. 371 of 2007
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claiming user.
23. Smt.Seemanthini submitted that Nirapara rice products of the plaintiff are popular, not only in India, but in various foreign countries like USA, UAE, U.K., Dubai, Saudi Arabia, Oman, Malaysia, Muscat, Bahrain, Qatar, SIA and Singapore. She submitted that the plaintiff has already obtained a Trade Mark Registration in CTM Registry (European countries), UAE, Bahrain etc. In other countries, applications are in process. According to her, plaintiff's Nirapara products have got Trans-Boarder reputation.
24. Smt. Seemanthini relied on a large number of precedents in support of various propositions that were advanced by her. Strong reliance was placed by her, on the judgment of the Supreme Court in Ramdev Food Products Pvt.Ltd. v. Arvindbhai Rambhai Patel (2006 SC 3304) to argue that ordinarily under law, there can only be one mark, one source or one proprietor. Ordinarily again, the right of RFA. 371 of 2007
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resorting of a trade mark cannot have two regions. She argued that if goods are sold on from sources, the same may lead to confusion in the minds of the consumers and in a given situation, it may also amount to fraud on the public. Thus, ordinarily, two people are not entitled to the same trade mark unless there exists an express licence in that behalf.
25. Arguing that in a passing off action, registration of a trade mark is immaterial, Smt.Seemanthini placed strong reliance on the judgment of the Supreme Court in N.R.Dongre v. Whirlpool Corporation [1996 PTC (16) 583 S.C.] and a judgment of this Court in A.C.Krishnan v. Nambisan's Dairy Pvt.Ltd. (1997(1) KLT 163). Answering the argument of Mr.Krishnan Unni, based on the principle of acquiescence, Smt.Seemanthini referred to the judgment of the Supreme Court in Midas Hygiene Industries P.Ltd. v. Sudhir Bhatia [2004(28) PTC 121 (SC] and submitted that RFA. 371 of 2007
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mere delay in bringing action is not sufficient to defeat grant of injunction. Smt.Seemanthini also referred to the judgment of the Delhi High Court in Syncom Formulations v. SAS Pharmaceuticals [2004(28) PTC 632 (Delhi)] and in Hindustan Pencils Ltd. v. M/s.Indian Stationary Products Co. (AIR 1990 Delhi 19). She argued that the doctrine of acquiescence cannot be resorted to or availed of when there is dishonesty in choosing the mark and ill-design to trade and cash upon the reputation and goodwill of the plaintiff. Smt.Seemanthini placed strong reliance on the judgment of the Supreme Court in Lakshmikant v. Patel v. Chethanbhai Shah (2002(3) SCC 65) to expatiate the principles to be followed in the matter of granting injunction in the matter of passing off actions. According to her, this decision will show that the fact that the defendant had already commenced their business under the offending name would not dis-entitle the plaintiff to grant of RFA. 371 of 2007
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injunction. She would submit that a passing off action will lie wherever the defendant company's name or its intended name is calculated to deceive and to so divert business from the plaintiff or to cause confusion between the two businesses, propensity to divert business or likelihood of injury enough even if name adopted innocently will be enough to sustain action for passing off .
26. Lastly, Smt.Seemanthini referred to the judgment of the Supreme Court in Mahendra and Mahendra Paper Mills (P) Ltd. v. Mahindra and Mahindra Ltd. (2002(2) SCC 147) and also the judgment in Lakshmikant V Patel v. Chethanbhai Shah (2002(3) SCC 65) to argue that the appellate court has got very limited power to interfere with the discretion exercised by the trial court in the matter of passing off action.
27. I have anxiously considered the rival submissions addressed at the Bar in the light of the pleadings raised by RFA. 371 of 2007
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the parties. I have made a reappraisal of the evidence available in the case. The ratio of the various decisions cited at the Bar by counsel on both sides are also kept in mind.
28. Passing off action is essentially a common law remedy conceived by the Common Law Courts of England for redressing the grievances of a trader who suffers or is likely to suffer by a wrongful act of his rival trader in passing off his goods as the case of the plaintiff. The tort or wrongful act lies in the misrepresentation by the defendant aimed at the potential buyers of the goods or services under a belief that the goods or services are those of the plaintiff. This is done by the defendant by using trade name, mark or other indication similar to the one used by the plaintiff. The House of Lords in Erven Warnink v. J.Townend & Sons, 1979 FSR 397 through Lord Diplock identified five characteristics as requisites for a valid cause of action for passing off. "(i) a misrepresentation (ii) made by a trader in the course of RFA. 371 of 2007
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trade, (iii) to prospective customers of his or ultimate consumers of the goods or services supplied by him, (iv) which is calculated to injure the business or goodwill of another (in the sense that this is a reasonably foreseeable consequence) and (v) which causes actual damage to the business or goodwill of the trader by whom the action is brought (or in a quia timet) will probably do so" The Supreme Court approved the above principles in its judgment in Cadila Health v. Cadila Pharma (2001 PTC 300 (SC) and in Heinz Italia & another v. Dabur India Ltd. (2007) 6 SCC 1. It was laid down by the Supreme Court that in order that a passing off action succeeds all the above five characteristics should be separately and cumulatively proved and if any one of the elements is missing the action fails. (See Cadila Healthcare Ltd. v. Dabur India Ltd. ( MIPR 2008(3) 0162). It is settled by decisions that of the various elements expected to be proved by the plaintiff in a passing RFA. 371 of 2007
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off action the primary and the most essential one is that of the goodwill and reputation attained by the plaintiff's mark in the minds of the potential consumers as on the date of the alleged activity complained off against the defendant. Whether the plaintiff's mark attained a goodwill in the minds of the customer public and whether the plaintiff has attained proprietory right in the above goodwill is therefore the question. The decisions are to the effect that if the plaintiff fails to establish goodwill for his mark as on the date when defendant commenced the activity complained off, cause of action for passing of is not established and there is no necessity for the court to look into other elements of misrepresentation and damage. Acquisition of future goodwill by the plaintiff's mark after the activity complained off is not to be accounted for sustaining a passing of action (see judgment in Jarman & Platt Ltd. v. I. Barget Ltd. & others, (1977) FSR 260, Cadbury Schweppes Pty Ltd. v.Pub RFA. 371 of 2007
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Squash Pty. Ltd. (1981) All.E.R. 213) and Teleworks Ltd. v. Teleworks Group PLC, (2002) RPC 27).
29. The second element expected to be proved by a plaintiff is misrepresentation by the defendant. It is not all misrepresentations that amount to actionable misrepresentation under passing off law. Before the plaintiff alleges misrepresentation he will have to establish that his mark has acquired a distinctive character amongst the consumers, i.e., the consumers identify the mark exclusively with the plaintiff's goods in the market. When the mark in question is essentially descriptive in character or is a common word (like "Nirapara" in the present case) in order that the plaintiff succeeds it will be necessary that he establishes that amongst the consumers his mark has acquired a secondary significance over and above the descriptive character or primary meaning of the word adopted as the trade mark. Unless this is done by the RFA. 371 of 2007
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plaintiff, even if a rival trader adopts a mark similar or identical to that of the plaintiff, the plaintiff cannot succeed in proving element of misrepresentation in a case of passing off (See the judgment in City Link Travel Holdings Ltd. & others v. Lakin & another (1979) FSR 653). The third aspect is damages. The tort of passing off is complete only when the plaintiff proves that he has sustained an injury due to the activity of the defendant. In a quia timet action (action for prohibitory relief) the plaintiff need to establish that he is likely to be injured. Law is trite that mere likelihood of confusion in the minds of consumers is not sufficient. The confusion should be of such a nature that the same is capable of injuring or damaging the goodwill or reputation of the plaintiff. In a case of long concurrent usage between the rival marks, proof of actual deception is a must, in a quia timet action probability of deception is sufficient (See H.B.Bulmer Ltd. & Showerings Ltd. v. RFA. 371 of 2007
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J.Bollinger SA & Champagne Lanson Pere et Fils - 1978 RPC 79 CA). On a careful reading of the judgment of the learned District Judge, it is seen that the learned Judge has not considered all the above basic elements of passing off law while taking the decision in the suit. The learned District Judge actually focussed his attention on the question as to whose was the prior use as between the two rival claimants. The judgment will show that it is essentially on the basis of a finding of prior use in favour of the plaintiff that the decision of the learned District Judge turned. The learned District Judge has entered a finding at paragraph 25 of his judgment that the evidence would show that PW1 stated his business somewhere in 1975 and that since then he has been selling rice and rice products under the mark "Nirapara" and also that there was continuous user of the trade mark. It is difficult to sustain the above finding. The averment in the plaint was that the plaintiff adopted the RFA. 371 of 2007
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mark "Nirapara" and device in the year 1975 in connection with paddy, rice and rice products. But PW1 Karnan would state in his proof affidavit that they have used the mark "Nirapara" with device only since the year 1988. A15 and A16 carbon copies of the bill books where the word "Nirapara" appears against bills relating to sale of 70 kilograms of rice bags to retail dealers are the documents relied on for proving usage of the mark "Nirapara" from 1988. The argument of Mr.Krishnan Unni that the word "Nirapara" has been inserted subsequently into those pages of A15 and A16 pertaining to sale of boiled rice bags cannot be lightly brushed aside as one scans these documents. A15 and A16 are sought to be corroborated through oral evidence of PW6 S/0 of Govindan Nair, Rice Merchant from Palai who claims to have purchased rice bags from K.K.Karnan and Company against bill Nos. 612, 625 and 630 in A-15 and bill Nos. 754, 757, 779, 787 and 789 in A16. RFA. 371 of 2007
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Bill Nos. 779 and 787 are significantly two bills pertaining to purchase of boiled rice by C.K.Govindan Nair, father of PW6. These bills do not contain the word "Nirapara" which gives some force to the submission of Mr.Krishnan Unni that the word "Nirapara" appearing in several pages of A15 and A16 pertaining to sale of boiled rice is a subsequent insertion. Ofcourse, there is a corresponding entry in Ext.A17 day book in respect of certain bills in Ext.A15 and A17 day book has been initialled by the sales tax authorities. But as rightly argued by Mr.Krishnan Unni, A17 at best can only prove that the originals of the various bills in Ext.A15 were actually issued by K.K.Karnan and Company and cannot prove whether the word "Nirapara" is contained in the originals of the bills or whether they were subsequently inserted. It is difficult to accept Smt.Seemanthini's argument on the basis of the judgment of the Supreme Court in Prithi Chand v. State of H.P. (AIR 1989 SC 702) RFA. 371 of 2007
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that carbon copies are primary evidence of the originals. First of all there is no similarity between the fact situations in that case and in the present case. The admissibility of what was disputed in that case was the carbon copy of medical certificate issued by a doctor who had examined the victim prosecutrix immediately after the alleged incident of rape. The carbon copy did contain the signature of the author. Since the attendance of the doctor who had issued the medical certificate could not be procured due to genuine reasons, another doctor who had acquaintance with the signature of the author doctor was examined. Their Lordships of the Supreme Court referred to section 32(2) of the Indian Evidence Act and stated that when a statement written or oral is made by a person in the discharge of a professional duty whose attendance cannot be procured without an amount of delay, the same is relevant and admissible in evidence. Ofcourse, their Lordships referred RFA. 371 of 2007
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to Explanation - 2 to Section 62 and further observed that the document was primary evidence within the meaning of that Explanation. Explanation 2 to Section 62 obviously provides only that where a number of documents are all made by one uniform process, as in the case of printing, lithography, or photography, each is primary evidence of the contents of the rest; but, where they are all copies of a common original, they are not primary evidence of the contents of the original. Same process carbon copies may be primary evidence of the other carbon copies, but it cannot be argued on the basis of Explanation 2 to Section 62 that same process copies are primary evidence of the original. Significantly, even when PW-6 is examined for corroborating a few bills in Ext.A15 and A16 no endeavour is seen made to bring forth evidence regarding the non- availability of the originals of the bills which were issued to PW6's father.
RFA. 371 of 2007
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30. Ext. X-1 is one document which is relied on very much by the court below to conclude that the plaintiff has been using the mark and device from 1975. Ext.X-1 is an advertisement in Malayala Manorama dated 15-11-1991 relating to the inauguration of a rice mill with modern facilities by S.N.Rice Mills and the claim in Ext.X-1 is that export quality Nirapara brand rice with export standards is being introduced into the market by S.N. Rice Mills. In the earlier part of this advertisement it is also claimed that S.N.Rice Mill had been functioning from 1975 onwards. This claim to a certain extent is justifiable since obviously S.N.Rice Mill is successor of the original firm by name K.K.Karnan and Company which was founded on 10-8-1975. But the question is whether Ext.X-1 can be relied on to enter a finding that the mark and logo which is pictorially represented in Ext. X-1, had been adopted by the plaintiffs way back in 1975 itself. It is difficult to enter into such a RFA. 371 of 2007
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conclusion based on Ext.X-1 alone as there is no claim in Ext.X-1 that Nirapara Brand rice was being manufactured or marketed by S.N.Rice Mills or its predecessor establishments prior to 1975. Ext.A4 shows that S.N.Rice Mills come into being only in the year 1991. Thus in my opinion it is not safe to enter a decision regarding prior user based on Ext.A15, A16 and X-1 alone. But then there is the oral evidence adduced by the plaintiffs' witnesses including PW1 in support of the plaintiffs' case that plaintiffs are the prior users of the disputed mark. It is also true that on the side of the defendant, apart from the self serving oral testimony of DW1, no other witnesses are examined to support their contentions that plaintiffs' claim that they are the prior user of the trade mark is not correct. But Ext.B32 auditors report will show that the defendants started commercial production under the trade mark "Nirapara" on 25-3-1990 as manufacturers of wheat RFA. 371 of 2007
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products. Formal inauguration of the defendants' plant was on 6-4-1990. This is clear from Annexures A1 advertisement, P19 certificate of registration and B22 series of bills. Thus it is clear that the business activity of the defendant with mark "Nirapara" Ext.A41 commenced on 25- 3-1990. I have no doubt in my mind that Ext.A40 of the plaintiffs and A41 of the defendants are deceptively similar. But then it is the plaintiffs duty to establish that as on 25-3- 1990 when the defendants started using Ext.A41 which is deceptively to his mark A40 the plaintiff had acquired sufficient goodwill and reputation in the minds of the customer public over his mark. A9 is perhaps the one document produced by the plaintiff with the object of establishing goodwill for his mark prior to 25-3-1990. A9 is a statement issued by the plaintiffs' auditors showing the details of the sales turnover and advertisement charges relating to K.K.Karnan and Company and its associate RFA. 371 of 2007
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concerns. To begin with in the year 1976-77 the total sales turnover of K.K.Karnan and Company was Rs.5,65,587.77. By 1988-89 when the plaintiffs claim to have used the mark Nirapara in the sale of their rice products the turnover goes upto Rs.17,31,945.65. By 1989-90 the next year when the defendant has not entered the fray the turn over goes down to Rs.15,36,107.95. But as rightly argued by M. Krishnan Unni, this turnover statement includes proceeds from sale of products like paddy and bran which are not branded by the trade mark Nirapara through A15, A16, A25 bill books and A26 stock register. Importantly Sri.Karnan is described in all the records as rice and paddy merchant. This means that the sales turnover (of rice and rice products) using the mark Nirapara separately is not discernible from Ext.A9. Another thing is clear from Ext.A9. The plaintiffs incur advertisement charges, whether it be for S.N.Rice Mills or for K.K.R.Mills only from 1991-92. The question that arises RFA. 371 of 2007
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for consideration is whether the plaintiff was successful in establishing that his mark Ext.A40 has attained such an extent of distinctiveness that the use of the mark will be identified by the customer public as that of the plaintiff alone as on the date of the complained activity by the defendant. According to me, even if it is possible to hold that the plaintiff is the prior user of Ext.A40 mark in the sense that A40 was adopted by the plaintiff even prior to the defendant starting commercial production, the evidence presently available on record falls short of holding that the plaintiff's mark has attained such an extent of distinctiveness that the customer public will identify Ext.A40 mark as the plaintiff's alone as on the date of commencement of the complained activity by the defendant. Significantly, none of the witnesses examined on the side of the plaintiff, PW2, PW3, PW4, PW5 and PW6 belong to the ultimate consumer class. It is only the ordinary consumer RFA. 371 of 2007
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of rice products under the mark 'Nirapara' who will be able to give cogent evidence regarding the reputation and goodwill attained by the mark as on 25-3-1990 in their minds.
31. As already noticed, the element of reputation and goodwill as well as the element of damages, which are the essential elements to be established by a plaintiff in any passing off action have not been specifically considered by the court below. At any rate, specific findings are not seen entered by the court below. As for damages, the argument of Smt.Seemanthini was that the present action is a quia timet action and the relief is only for injunction and therefore, it is not necessary to establish sustainment of actual damages and that probability of damages in future is sufficient. The evidence in this case will reveal that there has been concurrent trading by the parties on the strength of their respective marks, Ext.A40 and A41, for a period of RFA. 371 of 2007
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15 years and that being the situation, the probability of the plaintiffs sustaining damages will be best established by proving actual damages. No serious endeavour has been made by the plaintiffs to adduce evidence in the context of damages. Ext.B31 notice was issued to the defendants, alleging violation of plaintiffs' trade mark rights, in the year 1996 itself. The suit is preferred only after nine years. The contention of the defendants was that there has been acquiescence from the side of the plaintiffs in allowing the defendants to develop their business, which in the year 1994 was Rs.2 crores, to Rs.13 crores in 2004. The learned District Judge would answer the question of acquiescence in favour of the plaintiffs, on the basis of criminal cases filed against third parties by the plaintiffs and also the opposition proceedings in the trade mark registry. I feel that the question of acquiescence raised by the defendants demands reconsideration.
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32. As already noticed, Smt. Seemanthini did make a valiant effort to sustain the impugned judgment and decree. I have already accepted her argument and the finding of the court below that Ext.A41 mark and logo of the defendants are deceptively similar to the mark and logo of the plaintiff. Once the plaintiff establishes the other essential elements of reputation and goodwill and damages or probability of damages, the relief will have to be given to the plaintiffs. But, as already found, the learned District Judge has proceeded to decide the suit solely on the basis of prior user. For the finding that there has been prior user since 1975 or that the prior user has been for such a duration of time as to attain goodwill and reputation in the minds of the consumers to the extent that the consumers will identify Ext.A40 with to the products of the plaintiffs alone, there is no sufficient evidence. Under the above circumstances I become obliged to set aside the judgment RFA. 371 of 2007
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and decree and relegate the suit back to the District Court. The learned District Judge is directed to take a fresh decision in the suit. While doing so, the learned District Judge will enter specific findings on the following aspects :-
(1) Whether Ext.A40 mark has attained goodwill and reputation in the minds of potential consumers of the plaintiffs' products as on 25.3.1990 and whether the plaintiffs' mark has acquired a distinctive character in the minds of the consumers, so that the consumers identify the mark exclusively with the plaintiffs' goods. (2) Whether the plaintiffs have sustained any damages on account of the defendants' user of Ext.A41 mark during the period from 25.3.1990 till the date of institution of the suit.
(3) The learned District Judge will also reconsider the plea of acquiescence raised by the defendants, in the context of the delay caused by the plaintiffs in instituting the suit after Ext.B31 notice was issued.
33. The learned District Judge will afford opportunity to the plaintiffs to adduce whatever further evidence they want to adduce in support of their case. The defendants also will be permitted to adduce further evidence. Fresh decision will RFA. 371 of 2007
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be taken in the suit, in the light of the evidence already on record and the further evidence to be adduced.
34. Notwithstanding my decision to relegate the suit to the District Court for fresh decision, I feel that a prima facie case is made out by the plaintiffs by the evidence already adduced by them for the obtainment of interim relief. The overall impression that I gather on a re-appraisal of the evidence is that the plaintiffs have been dealing mainly in rice and rice products and the defendants, mainly in wheat and wheat products and therefore, I am of the view that till a final decision is taken in the suit by the learned District Judge, and order of injunction can be granted in favour of the plaintiffs and against the appellants in respect of rice and rice products .
35. The result of the above discussions is therefore, as follows :-
The impugned judgment and decree are set aside. The RFA. 371 of 2007
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suit is relegated to the District Court, Kottayam. The District Court is directed to take a fresh decision, after entering specific findings on the following questions :-
(1) Whether Ext.A40 mark has attained goodwill and reputation in the minds of potential consumers of the plaintiffs' products as on 25.3.1990 and whether the plaintiffs' mark has acquired a distinctive character among the consumers, so that the consumers identify the mark exclusively with the plaintiffs' goods.
(2) Whether the plaintiffs have sustained any damages on account of the defendants' user of Ext.A41 mark during the period from 25.3.1990 till the date of institution of the suit.
(3) The learned District Judge will also reconsider the plea of acquiescence raised by the defendants, in the context of the delay caused by the plaintiffs in instituting the suit after Ext.B31 notice was issued.
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4) The learned District Judge will afford opportunity to the plaintiffs to adduce whatever further evidence they want to adduce in support of their case. The defendants also will be permitted to adduce further evidence. Fresh decision will be taken in the suit, in the light of the entirety of the evidence that comes on record.
There will be an interim order of injunction restraining the defendants from manufacturing, distributing or displaying rice or rice products by using the plaintiffs' trade mark "Nirapara" and the device therein and the trade name and brand name "Nirapara" or by using the trade mark and logo presently used by the defendants, as shown in Ext.A41 or any other trade mark, trade name or brand name identical, similar or deceptively similar to that of the plaintiffs' trade mark. In other words, the order of stay passed by this Court in I.A.No.2677/2007 will continue to the extent the same pertains to wheat and wheat products, RFA. 371 of 2007
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but, not in respect of rice and rice products.
The appeal is allowed by way of remand. The parties will enter appearance before the court below on 1.7.2010. The learned District Judge will complete the enquiry and pass a revised judgment early and at any rate within six months thereafter.
PIUS C.KURIAKOSE, JUDGE ksv/tgs/-