Punjab-Haryana High Court
Parker Hannifin France Sas vs Mr.Man Mohan Talwar And Others on 10 January, 2014
Author: Rajiv Narain Raina
Bench: Rajiv Narain Raina
F.A.O. No.4627 of 2013 (O&M) -1-
IN THE HIGH COURT OF PUNJAB & HARYANA AT
CHANDIGARH
F.A.O. No.4627 of 2013 (O&M)
Decision : 10.01.2014
Parker Hannifin France SAS
..... Appellant(s)
Versus
Mr.Man Mohan Talwar and others
..... Respondent(s)
CORAM: HON'BLE MR. JUSTICE RAJIV NARAIN RAINA
Present: Ms.Dahlia Sen Oberoi, Advocate with
Mr.Rohan Rohtagi, Advocate,
Mr.Anuj Bedi, Advocate and
Mr.Amit Aggarwal, Advocate
for the appellant(s).
Mr.N.S.Sekhawat, Advocate with
Mr.Nipun Vashist, Advocate,
for respondents No.1 to 4.
Mr.Jitender K. Seharawat, Advocate,
for respondent No.5.
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1. To be referred to the Reporters or not?
2. Whether the judgment should be reported in the Digest?
*****
RAJIV NARAIN RAINA, J.
The appellant brought Civil Suit No.3 of 18th June, 2013 which is pending and is being tried by the learned Additional District Judge, Gurgaon. The suit is for permanent injunction for infringement of trademark and to enforce the protections of Sections 27(2), 28, 29 read with Sections Kumar Paritosh 2014.02.04 16:29 I attest to the accuracy and integrity of this document F.A.O. No.4627 of 2013 (O&M) -2- 134 and 135 of the Trade Marks Act, 1999 (for short "the Act"). The secondary relief is for rendition of accounts against the defendants. The appellant as plaintiff sought grant of an interim injunction against the defendant-respondents invoking order 39 Rule 1-2 CPC read with Section 151 CPC to restrain them ad interim from marketing and selling of products by the defendants under their brand name 'Legris' and 'Parker' of which they had Global trademarks.
2. It is pleaded that the appellant company is incorporated under the laws of France with its registered office as given in the cause title. The company was founded in 1918 and over a long period of time achieved annual sales exceeding $ 13 billion as at in the year 2012. It claims to be the world's leading diversified manufacturers of motion and control technologies and systems providing precision engineered solutions for a wide variety of mobile industrial and aerospace markets. In the year 2008, the appellant company acquired the company know as 'Legris SAS'. Accordingly, the appellant acquired sole proprietorship and ownership of various intellectual property rights (IPR) including the trademark "LEGRIS". On December 31st, 2010, Legris SAS merged with the appellant. The merger documents have been placed on record and marked Annexure A-2 (colly). The appellant and Legris SAS stand unified. It is pleaded that the trademark "LEGRIS" was adopted and is being worldwide since 1963 when the merging company started its operations in France. The appellant company registered the trademark "LEGRIS" in a large number of countries across the world including India. The products offered in the markets under the brand name "LEGRIS" are sold/used in India extensively since 1984. Over the years, it has acquired in India, a tremendous goodwill and Kumar Paritosh 2014.02.04 16:29 I attest to the accuracy and integrity of this document F.A.O. No.4627 of 2013 (O&M) -3- reputation. In order to cement its goodwill and reputation, it opened its first subsidiary in India under the name Legris India Holding (P) Limited and registered the company on September 05, 2000 with the Registrar of Companies. The appellant also registered a sister concern called Legris India Private Limited on February 20, 2001 with the Registrar of Companies.
3. It is pleaded that the appellant entered into an exclusive distributorship agreement with the first respondent/defendant for the territory of Faridabad, Haryana on April 26, 2003 to distribute the products of the appellant in India. On acquisition of Legris SAS in 2008, the distributorship agreement was terminated by the appellant in order to do their business directly with the consumers of its products. The appellant holding proprietorship of "LEGRIS" and "PARKER" trademarks discovered after termination of distributorship agreement with the first respondent that the respondent/defendant had registered the trademark "LEGRIS" with the Trade Marks Registry as it own. It was in May, 2012 that the proprietor of the respondents was found by the appellant to be committing infringement and trademark violations of the appellant's exclusive trademark "LEGRIS" and thus addressed a Cease and Desist letter to the first respondent on 9th May, 2012 putting them on notice to withdraw the trademark registration No.1798503 in Class II; to cease and desist from using the trademark "LEGRIS" or any other identical or similar mark for any kind of products or services; and calling upon the respondents to give undertaking to the appellant acknowledging the appellant's ownership over the trademark "LEGRIS" and to agree to refrain from future unauthorized use or registration of the appellant's IPR in any manner, whatsoever. In response, Kumar Paritosh 2014.02.04 16:29 I attest to the accuracy and integrity of this document F.A.O. No.4627 of 2013 (O&M) -4- the first respondent in his letter dated 15th May, 2012 admitted registration and use of mark but refused to refrain from selling the products under the mark "LEGRIS". The word, "LEGRIS" is a French word with no etymological origin in any Indian language. As the first respondent did not submit to the request of the appellant, it was constrained to file a rectification application on 21st December, 2012 for removal of the respondent's trademark No.1798503 in Class-II from the trademark register maintained by the Registrar of Trademarks. It also came to the knowledge of the appellant that the company M/s JMD Pneumatics Private Limited owned by the first respondents No.1 to 3 had changed their corporate name to "Legris Pneumatics Private Limited" from 20th September, 2012. Accordingly, the appellant filed and initiated appropriate proceedings before the Regional Director, Northern Region, Ministry of Corporate Affairs under Section 22(1)(ii) of the Companies Act, 1956 for compulsory change of name of respondent No.4. However, the Regional Director vide his order dated 17th June, 2013 dismissed the application on the technical ground of limitation. The appellant has reserved in the present appeal its right to appeal against the order. It is, in these circumstances that the appellant in order to protect its trademarks LEGRIS and PARKER brought the present suit on 18th June, 2013 together with the application for grant of temporary injunction. An application under Order 26 rule 9 and order 39 rule 7 of the Code of Civil Procedure, 1908 was also filed praying for appointment of Local Commissioner. It is pleaded that the appellant filed its entire documentary evidence in support of the decree at the threshold which are appended to this appeal as Annexure A-3 (colly). Notice of the suit was issued on 18th June, 2013 for 24th June, 2013. The trial court appointed a Kumar Paritosh 2014.02.04 16:29 I attest to the accuracy and integrity of this document F.A.O. No.4627 of 2013 (O&M) -5- Local Commissioner for inspection of the premises of the defendant- respondents excluding defendants No.5 and 6. The Local Commissioner was ordered to submit his report on the next date of hearing i.e. on 24th June, 2013. However, on 24th June, 2013, summons issued to the defendant- respondents No.1 to 3 were received back with the report of refusal. The Court, therefore, ordered substituted service of the unserved respondents returnable on 2nd July, 2013. The learned Additional District Judge on hearing the appellant and taking cognizance of the report of the Local Commissioner in favour of the appellant held that the identical trade marks LEGRIS and PARKER were being produced and sold by the defendant- respondents and granted ex parte ad-interim injunction in favour of the appellant till the next date of hearing on the ground that the purpose of the interim prayer would be defeated if injunction was not granted. On 2nd July, 2013, the defendants entered appearance and contested the case by filing reply to the interim injunction application together with an application under order 39 rule 4 CPC for setting aside the ex parte order dated 24th June, 2013. The miscellaneous applications were also filed including one under order 7 rule 10 and 11 CPC for return of plaint. These miscellaneous applications were filed by respondent No.5 while respondents No.1 to 4 sought inter alia vacation of stay order. The ad-interim injunction was extended till the next date of hearing. On 7th July, 2013, the matter was again adjourned and the temporary injunction was extended to 12th July, 2013. On 12th July, 2013, respondent-defendant No.6 was proceeded ex parte while the written statements were filed by respondents No.1 to 5.
4. The appellant filed the rejoinder. Arguments were heard and the injunction was extended till 17th July, 2013, on which date, the Kumar Paritosh 2014.02.04 16:29 I attest to the accuracy and integrity of this document F.A.O. No.4627 of 2013 (O&M) -6- remaining arguments on the stay application were heard and the orders were reserved on 23rd July, 2013 extending the ad-interim injunction till the next date of hearing. The matter was then adjourned to 26.7.2013 when the impugned order was passed vacating ad-interim injunction granted to the appellant and the application was rejected on the ground of lack of jurisdiction. The learned Additional District Judge in the impugned order has reasoned that "in the absence of any substantive proof regarding the branch office or actual business activities carried on by the plaintiff in Gurgaon, the allegations of the defendants that plaintiff neither works in Gurgaon nor personally works for gain, cannot be dismissed summarily."
5. Aggrieved by the order vacating stay, the appellant is before this Court. Notice of motion was issued. The respondents put in appearance. On 16th December, 2013, this Court heard the learned counsel and passed the following order : -
" Notice of motion in the application.
Mr.Nipun Vashist, Advocate accepts notice on behalf of the respondent.
After hearing the arguments and being satisfied about the point prima facie that the issue of jurisdiction on which the Court has held against the petitioner was not properly considered and having further regard to the fact that there was an interim injunction already issued in favour of the petitioner and it was continued till the time when the application was disposed of. I order the interim injunction against the respondents that they will not exhibit the product and solicit customers at their stalls or make any attempt to market the product with trade mark "LEGRIS" at Kumar Paritosh the international fair at Pragati Maidan, New 2014.02.04 16:29 I attest to the accuracy and integrity of this document F.A.O. No.4627 of 2013 (O&M) -7- Delhi. This is purely a temporary arrangement having regard to the urgency of the matter pleaded by the petitioner though stoutly resisted by the counsel appearing for the respondent."
6. I have heard Ms.Dahlia Sen Oberoi, learned counsel for the appellant and Mr.N.S.Shekhawat, Advocate appearing for the respondent at length for final disposal of the appeal.
7. Ms.Oberoi argues that ad-interim injunction granted ex parte to the appellant based inter alia on the report of the Local Commissioner and after the summons on the defendants were received with the report of refusal, deserves to have been extended till the conclusion of the trial since all the essential ingredients for grant of ad-interim temporary injunction were satisfied inasmuch as the appellant had a strong prima facie case on merits, the balance of convenience was in its favour and in case, the injunction was not granted, irreparable loss and injury would result everyday to the plaintiff-appellant which is not possible to compensate as the appellant can have no control over the internal accounts of the defendants and sale bills with much of the sales of products being transacted on cash basis without proper billing procedures irretrievable and lost in the unidentifiable hands of consumers. Equitable considerations would also require immediate protection of the appellant of its trademark "Legris" and "Parker" and the trial court ought to have exercised its discretion in a judicious manner especially once it had granted for good and sufficient reason the ad-interim injunction in favour of the appellant. She points out from para. 10 of the impugned order that the trial court was conscious of the salutary principles of grant of temporary injunction but has improperly Kumar Paritosh 2014.02.04 16:29 I attest to the accuracy and integrity of this document F.A.O. No.4627 of 2013 (O&M) -8- departed therefrom and misapplied those principles in vacating the ad- interim injunction vide the impugned order by non-suiting the appellant on territorial jurisdiction evacuating the suit itself. The trial court has also misapplied the law enunciated by the Supreme Court in M/s Dhodha House v. S.K.Maingi; AIR 2006 SC 730 to the facts of this case with respect to territorial jurisdiction of the Court in a case of infringement of trademark. It is contended that the learned Additional District Judge, Gurgaon has failed to touch upon the most vital submission pressed by the appellant against the respondent that it is guilty of dishonesty of adoption of appellant's IPR and has failed to explain the adoption and registration of a peculiar foreign word, "Legris" which is a distinctly French word no Indian could think of on his own. The appellant has wrongly been non-suited on the ground that the plaintiff itself does not actually or voluntarily reside to carry on its business or personally work for gain at the place of suing and merely because, its goods are sold in the Court's jurisdiction, would not mean that the appellant carries on business at that place. It is urged that the learned trial court such reasoning is fallacious and has fallen in error in holding that in the absence of any substantive proof regarding the branch office or actual business activities carried on by the plaintiff in Gurgaon, the allegations of the defendants that the plaintiff neither works in Gurgaon nor personally works for gain, cannot be dismissed summarily and has to be tried. Meaning thereby temporary injunction cannot be granted at all. This is the primary reason recorded by the trial court for dismissing the application under Order 39 Rule 1-2 CPC.
8. Ms.Oberoi would next contend that the territorial jurisdiction has to be measured, determined and accepted prima facie from the pleadings Kumar Paritosh 2014.02.04 16:29 I attest to the accuracy and integrity of this document F.A.O. No.4627 of 2013 (O&M) -9- and facts stated in the plaint and whatever defence/s are taken by the defendants including that of lack of territorial jurisdiction are at best triable issues involving mixed questions of law and fact to be determined at the trial but for the purpose of grant of temporary injunction, a trademark holder supported by clear documentary proof, such as the appellant could not have been non-suited on lack of territorial jurisdiction in the trial court. She lays emphasis on the technicality of the word "LEGRIS" which is of French origin and finds no place in the vernacular lexicon of the many languages of India and is so inherently special that it is not open to be disputed. The appellant on acquiring Legris SAS company in October, 2008 and having merged that company with itself in accordance with the laws of France on 31.12.2010, it has acquired intellectual property rights in the trademark which can be used only exclusively by the appellant and none-else. Legris SAS (Legris SA before merger) began its operations in the late 19th century when it established a small valve making factory in France. She draws the attention of this Court to the pleadings in the plaint where the history of both the companies till merger have been narrated as also its product range has been show-cased. The appellant has a world wide trade mark of its premium product and services. It has a diversified range of production in three major activities which are run under Legris Connectic, Legris Transair and Legris Autoline. The history of the entry of the appellant in India has been traced in para. 9. In para. 10, it has been pleaded that the plaintiff is the registered proprietor of the well known marks Legris and Parker in classes 6 and 17. The details of the Indian Registration of the appellant's marks have been tabulated in para. 10 as under : -
Kumar Paritosh 2014.02.04 16:29 I attest to the accuracy and integrity of this document F.A.O. No.4627 of 2013 (O&M) - 10 -
S.No. Reg.No. Date Trade Mark Class Status
1 833694 23/12/1998 Legris 6 Registered
2 1461703 13/06/2006 Legris 6 & 17 Registered
3 1456344 24/05/2006 V by Legris 17 Registered
9 383791 03/12/81 Parker 6 Registered
10 383793 03/12/81 Parker 17 Registered
11 668117 05/06/95 Parker 17 Registered
9. Learned counsel argues that Section 124(5) of the Trademarks Act provides that when the proceedings under Section 124 are pending, it would not preclude the civil court in making any interlocutory order including any order granting an injunction.
10. Learned counsel for the appellant is quick to point out from the impugned order that the trial court's reasoning is ex facie incorrect. She reads:
"Here in this case once the plaintiff has failed to make out the prima facie case in its favour, therefore, resort to remedy under section 124 (5) of the Act cannot be claimed by the plaintiff because the plaintiff is admittedly not having any branch office in Gurgaon and further defendant No.1 is doing business in dealing, distributing the registered products under class 11 of the rules in Faridabad. Therefore neither injunction in favour of the plaintiff nor the passing off remedy can be allowed because defendant No.1 is claimed to have been dealing with those products, which are duly registered under class 11. Rectification proceedings are pending, Pneumatic products as per the defendants, overlap in class 6 and 11. There is no much dispute about items of class 17. Admittedly, the plaintiff as well as defendant No.1 are the registered user of trademark Legris but Kumar Paritosh pertaining to different items, under different 2014.02.04 16:29 I attest to the accuracy and integrity of this document F.A.O. No.4627 of 2013 (O&M) - 11 - classes. Plaintiff claims that defendant No.1 is dealing with the products of plaintiff as mentioned in class 6. This technical matter in my opinion at this stage cannot be commented upon, otherwise also the matter is pending before IPAB in the rectification proceedings as per section 125 of the Act."
Learned counsel would then point out that the registration of the trademark "Legris" by the defendant-respondent in India is an actionable protection of its IPR, for the infringement of which they had been compelled to file a Rectification Application on 21st December, 2012 for removal of the respondents trademark from the trademark register and although that application has been dismissed as time barred, the order is not final since the appellant has reserved its right to appeal against the order before this court. At any rate, dehors the Rectification Application, the appellant has an independent right to protect its trademark through action by way of civil suit. The learned counsel has pointed out to numerous documents relied upon in the suit and found at pages 121-122 of the present paper book. It is the further contention of Ms Oberoi that there is another reason to rule in favour of the appellant. She submits that at least the defendant-respondent ought to have been the last person to infringe the appellant's trademark 'Legris' having once been its authorized distributor at Gurgaon and done business together for sale of products in India under a dealership agreement executed between the parties. It was only after the appellant stepped into India and established its presence through sale of products directly by it that the distributorship agreement was terminated between the appellant and the Kumar Paritosh 2014.02.04 16:29 I attest to the accuracy and integrity of this document F.A.O. No.4627 of 2013 (O&M) - 12 - respondent. Learned counsel has, to hammer her case, produced before me a valve manufactured by the respondent and the original manufactured by the appellant. The two products produced in Court definitely resemble each other with the inimitable style "LEGRIS" stamped on the valve. Both the products are owned up by the respective counsel as of their clients.
11. There appears to me to be sufficient merit in submissions of Ms Oberoi and there is prima facie material on record to suggest that the appellant has an eminently triable case on merits to be adjudicated within the territorial jurisdiction of Gurgaon, Haryana till findings are returned by the trial court. although it is a foreign company but appears to possess sufficient actionable interest in India after it stepped here to do business of sale of its products under the disputed trademark. Still further,
12. Mr. Sehkawat appearing for the respondents on the other hand has argued in support of the reasoning applied in the impugned order and submits that they are unexceptionable and not liable to be disturbed. He has taken me to the relevant parts of the written statement filed by the respondent to submit that the appellant is not the registered proprietor of the trademark and the marks were registered in the name of other entities which are not made party herein. Therefore, the plaintiff has no right to institute action under Section 27(2) of the Trademarks Act, 1999 for passing off. He submits that it is the first defendant who is the registered proprietor of the trademark "Legris". He is, however, not in a position to show contra that in a case of defence of lack of territorial jurisdiction, it is only the averments made in the plaint which are to be seen. The written statement is a valuable pleading too and can be read to support the impugned order. However, he has not been able to satisfy this Court that the ingredients for grant of Kumar Paritosh 2014.02.04 16:29 I attest to the accuracy and integrity of this document F.A.O. No.4627 of 2013 (O&M) - 13 - temporary injunction were not made out in this case. A dispute as to territorial jurisdiction could well be framed as a preliminary issue on which both the parties can lead their respective evidences and this Court is not called upon to return any final finding on the hotly contested question of territorial jurisdiction or lack of it and therefore nothing said in this order will affect the findings to be arrived at by the trial court after appreciating evidence which may be brought on record at the appropriate stage. However, at this juncture, I have little doubt that the contentions of Ms.Oberoi as above are sufficient to entitle her client to an ad-interim injunction and a restraint order against the defendants not to commercially use the trade mark Legris and Parker or pass it off. The plea of passing off was duly incorporated in para. 10 of the plaint and was an independent cause of action. The suit was composite in trademark infringement and passing off action. Passing off a product resembling that of the appellant under the same brand name and admittedly sold by the defendant in the territory in question gave sufficient nexus to bring an action notwithstanding the trademark infringement complained of. Here, the learned trial court fell in serious error.
13. The ex parte temporary injunction granted by the trial Court in the first instance, after summons were refused, and on appearance of the defendants, vacated after hearing both sides, have been ordered to continue in operation by the order of this Court dated 16th December, 2013 passed by Brother Kannan, J. directing the ex parte ad interim injunction would continue to operate as a temporary measure till the International Fair at Pragati Maidan, New Delhi was held, restraining the respondents from exhibiting their product and from soliciting customers at their stalls or Kumar Paritosh 2014.02.04 16:29 I attest to the accuracy and integrity of this document F.A.O. No.4627 of 2013 (O&M) - 14 - making any attempt to market the product with the trade mark "Legris" was well considered although the prayer was stoutly resisted by the respondent. I do not see why the interim order dated 16th December, 2013 should not be made to operate against the respondent and in favour of the appellant, after the conclusion of the Trade Fair, in rem.
14. Resultantly, and for the foregoing reasons, this appeal is allowed and the impugned order dated 26th July, 2013 is set aside. The ad- interim temporary injunction as prayed for is issued in favour of the appellant and against the respondents. Parties would remain free to claim the issue of territorial jurisdiction as a preliminary one to be decided by the trial court either stand-alone or with the other issues as may be framed. However, nothing said in this order would be taken as an expression of opinion of this Court on merits since the only issue examined for the time being is that having regard to the three well accepted principles for grant of temporary injunction, those tests stand amply satisfied prima facie in this case and the approach adopted by the learned Additional District Judge, Gurgaon is clearly erroneous.
15. The trial court would now proceed with the pending applications and the suit itself in accordance with law.
(RAJIV NARAIN RAINA) JUDGE January 10, 2014 Paritosh Kumar Kumar Paritosh 2014.02.04 16:29 I attest to the accuracy and integrity of this document