Telangana High Court
M. K. Rao Family Trust vs Zippy Edible Products Pvt.Ltd. on 21 March, 2022
Author: Satish Chandra Sharma
Bench: Satish Chandra Sharma, Abhinand Kumar Shavili
THE HON'BLE THE CHIEF JUSTICE SATISH CHANDRA SHARMA
AND
THE HON'BLE SRI JUSTICE ABHINAND KUMAR SHAVILI
CIVIL REVISION PETITION No.632 of 2020
ORDER:(Per the Hon'ble the Chief Justice Satish Chandra Sharma) The present civil revision petition is arising out of an order, dated 05.12.2019 passed in I.A.No.617 of 2019 in C.O.S.No.34 of 2019 by the Court of the XXIV Additional Chief Judge-cum-Commercial Court, City Civil Court, at Hyderabad.
2. The facts of the case reveal that the petitioners/ plaintiffs have filed a suit, i.e., O.S.No.34 of 2019 before the Court of the Special Judge, Commercial Court, City Civil Court, Hyderabad, under Order VII Rules 1 and 2, Section 26 of the Code of Civil Procedure, 1908 (CPC) read with Sections 27, 28, 29 and 134 of the Trade Marks Act, 1999, Section 62 of the Copyright Act, 1957 and Section 88 of the Indian Trusts Act, 1882. The petitioner No.1/plaintiff No.1 is a Trust, incorporated under the Indian Trust Act, 1882 and the registered proprietor of the trade mark 'BAMBINO', which is the subject matter of the suit and the petitioner No.2/plaintiff No.2 is the permitted user of the trade mark 2 and it is a company registered under the Companies Act. The petitioner No.1/plaintiff No.1 is a Private Trust and Sri M.K.Rao is the Managing Trustee of the Trust. Sri M.K.Rao conceived an idea of manufacturing and introducing vermicelli and pasta in India in the year 1982 and the word 'BAMBINO' as trade mark in respect of vermicelli and pasta. The petitioner No.2/plaintiff No.2 is the manufacturer of vermicelli and pasta. The petitioner No.1/plaintiff No.1 has obtained registration of trade mark 'BAMBINO' under No.477151 and composite label marks under Nos.461543, 844424, 844425, 844427, 844428, 844429, 989893, 1028832, 1909811, 1909812, 2004197, 2091673, 2196754, 2196755, 2324258, 2324260, 2456648, 2456649, 2456650, 2456651, 2456652, 2595621, 2595622, 2637861, 2637863, 2737919, 2352979, 2737921, 2764974, 2938242, 2965908, 3055081, 3055083, 3055084, 3055085, 3449824, 3449825, 3449826, 3449827, 3471289, 3471290, 3662224, 3669442, 3669444, 3669445, 3834428, 3889966, 3889967, 3889968, 2352980, 2352981, 2456647 in classes 30, 29 and 3 under the Trade Marks Act, 1999 and the registrations having been renewed from time to time are subsisting. It is stated that the 3 plaintiffs being the prior adopters, users of the trade mark 'BAMBINO' and originators of the artistic works contained in their label marks/pouches, enjoy copyright therein.
3. The facts further reveal that the petitioner No.1/plaintiff No.1 has executed a formal 'registered user' agreement, dated 12.08.1999 in favour of the petitioner No.2/plaintiff No.2 in accordance with the provisions of the Trade Marks Act, 1999 and the petitioner No.2/plaintiff No.2 being the permitted user has been paying the royalty to the petitioner No.1/plaintiff No.1. The facts further reveal that the petitioner No.1/plaintiff No.1, in whose favour there is a registration of the trade mark, is doing the business under the trade mark 'BAMBINO' for the last four decades and in the month of November, 2018, it came to the notice of the petitioners/plaintiffs that the respondents/defendants have started using the trade mark 'BERLINO' for the vermicelli, soan papdi, mushroom soup and mixed vegetable soup, which is almost like that of 'BAMBINO' and therefore, issued a 'cease and desist notice' to the respondents/defendants on 24.11.2018. The respondents did submit a reply on 4 26.12.2018 accepting that they are manufacturing vermicelli, pasta, soups and soan papdi under the trademark 'BERLINO' for their customers. A rejoinder to the reply was also served on the respondents/defendants on 11.01.2019 informing them to comply the requirement of the notice sent on 24.11.2018. The respondents/defendants, instead of desisting from using the trade mark, have filed a suit, i.e., Civil Suit No.1 of 2019 before the learned District Judge, Uddam Singh Nagar, Uttarakhand for alleged groundless threats under Section 142 of the Trade Marks Act, 1999 and the same is pending for adjudication.
4. The facts further reveal that the respondent No.2/ defendant No.2 has also made an application for registration of label mark consisting of the impugned mark 'BERLINO' under No.3918584, dated 17.08.2018, which was published in the Trade Marks Journal No.1872 and the registration of the said trade mark was opposed by the petitioners/plaintiffs vide Opposition No.COL 960504, dated 24.11.2018. As the respondents/defendants kept on using the label which is similar to 'BAMBINO', the petitioners/ plaintiffs issued a 5 'Cease and Desist Notice' on 05.07.2019. However, it was not replied by the respondents/defendants and in those circumstances, a civil suit has been preferred.
5. Another important aspect of the case is that the respondent No.1/defendant No.1 has been doing job work for the petitioners/plaintiffs by manufacturing the goods at their facilities for the period 2017-18 and taking advantage of the aforesaid fact started manufacturing goods under the name of 'BERLINO' and therefore, in the plaint, it has also been alleged that the respondent No.1/defendant No.1 has committed breach of trust. The petitioners/plaintiffs have prayed for the following reliefs in the civil suit, i.e., C.O.S.No.34 of 2019:-
"(1) granting permanent injunction restraining the defendants, their servants, subordinates, representatives, stockists, dealers, agents, successors-in-interest and all other persons claiming under them or acting in concert with them or acting at their instance from
(a) infringing the trademark of the plaintiffs registered under the Trademarks Act, 1999;
(b) infringing copyright of the plaintiff in the artistic features including the 6 colour scheme under the Copyright Act, 1957; and
(c) passing off their goods under the impugned trademark, BERLINO or any other mark/trade marks which are phonetically and visually similar or deceptively similar to the trademark BAMBINO including their artistic features and the colour scheme appearing on the labels of plaintiffs.
(2) granting damages of Rs.86,00,000/- for having caused loss to the business, reputation and goodwill of the plaintiffs to their trademarks and other artistic features registered under the Trademarks Act, 1999 and the Copyright Act, 1957 and for breach of trust.
(3) granting rendition of accounts by the 1st defendant for the unjust benefits reaped by them by breaching the trust reposed by the plaintiffs in them;
(4) to delivery up the infringing labels and marks for destruction;
(5) costs of the suit; and (6) such other and further reliefs as the nature and circumstances of the case may require."
6. The respondents/defendants in the civil suit have preferred an application, i.e., I.A.No.617 of 2019 in C.O.S.No.34 of 2019 under Section 10 of CPC for staying the proceedings of the suit during the pendency of the Civil Suit No.1 of 2019 on the file of the learned District Judge, Udham Singh Nagar, Uttarakhand and the Court below has passed 7 an order staying the suit, which is pending before the Court of the Special Judge, Commercial Court, City Civil Court, Hyderabad, against which the present civil revision petition has been filed.
7. The undisputed facts of the case reveal that the respondents/defendants have filed Civil Suit No.1 of 2019 before the learned District Judge, Udham Singh Nagar, Uttarakhand against the petitioners/plaintiffs under Section 142 of the Trade Marks Act, 1999 and it is certainly a suit prior in time. The suit was filed as a notice was issued by the petitioners/plaintiffs on 24.11.2018 and 05.07.2019 against the 'cease and desist notices'. Undisputedly, the Civil Suit No.1 of 2019, which is pending on the file of the learned District Judge, Udham Singh Nagar, Uttarakhand, is a suit filed under Section 142 of the Trade Marks Act, 1999 and the said suit has been filed alleging that the petitioners herein/plaintiffs have issued threatening notices and the suit, i.e., C.O.S.No.34 of 2019, which is the subject matter of the present revision petition, is certainly a subsequent suit. The reliefs sought by the respondents/defendants under 8 Section 142 of the Trade Marks Act are very much different and distinct from the reliefs prayed by the petitioners/ plaintiffs in the present suit. The respondents/defendants in their suit has sought for a relief of declaration that 'BERLINO' is not similar to the trade mark 'BAMBINO', whereas the relief claimed by the petitioners/ plaintiffs in the present suit is for grant of perpetual injunction. In order to adjudicate the controversy in the present case, the statutory provisions governing the field are relevant. Sections 27, 28, 29, 134 and 142 of the Trade Marks Act, 1999 are reproduced as under:-
"27. No action for infringement of unregistered trade mark:- (1) No person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade mark.
(2) Nothing in this Act shall be deemed to affect rights of action against any person for passing off goods or services as the goods of another person or as services provided by another person, or the remedies in respect thereof.
28. Rights conferred by registration:- (1) Subject to the other provisions of this Act, the registration of a trade mark shall, if valid, give to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in relation to the goods or services in respect of which the trade mark is registered and to obtain relief in 9 respect of infringement of the trade mark in the manner provided by this Act.
(2) The exclusive right to the use of a trade mark given under sub-section (1) shall be subject to any conditions and limitations to which the registration is subject.
(3) Whether two or more persons are registered proprietors of trade mark, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration of the trade marks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of permitted use) as he would have if he were the sole registered proprietor.
29. Infringement of registered trade marks:- (1) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade mark.
(2) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which because of-10
(a) its identity with the registered trade mark and the similarity of the goods or services covered by such registered trade mark; or
(b) its similarity to the registered trade mark and the identity or similarity of the goods or services covered by such registered trade mark; or
(c) its identity with the registered trade mark and the identity of the goods or services covered by such registered trade mark, is likely to cause confusion on the part of the public, or which is likely to have an association with the registered trade mark.
(3) In any case falling under clause (c) of sub-
section (2), the court shall presume that it is likely to cause confusion on the part of the public.
(4) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which-
(a) is identical with or similar to the registered trade mark; and
(b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; and
(c) the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark.
(5) A registered trade mark is infringed by a person if he uses such registered trade mark, as his trade name or part of his trade name, or name of his business concern 11 or part of the name, of his business concern dealing in goods or services in respect of which the trade mark is registered.
(6) For the purposes of this section, a person uses a registered mark, if, in particular, he-
(a) affixes it to goods or the packaging thereof;
(b) offers or exposes goods for sale, puts them on the market, or stocks them for those purposes under the registered trade mark, or offers or supplies services under the registered trade mark;
(c) imports or exports goods under the mark; or
(d) uses the registered trade mark on business papers or in advertising.
(7) A registered trade mark is infringed by a person who applies such registered trade mark to a material intended to be used for labelling or packaging goods, as a business paper, or for advertising goods or services, provided such person, when he applied the mark, knew or had reason to believe that the application of the mark was not duly authorised by the proprietor or a licensee.
(8) A registered trade mark is infringed by any advertising of that trade mark if such advertising-
(a) takes unfair advantage of and is contrary to honest practices in industrial or commercial matters; or
(b) is detrimental to its distinctive character; or
(c) is against the reputation of the trade mark. (9) Where the distinctive elements of a registered trade mark consist of or include words, the trade mark may be infringed by the spoken use of those words as well as by their visual representation and reference in this 12 section to the use of a mark shall be construed accordingly.
134. Suit for infringement, etc., to be instituted before the District Court:- (1) No suit-
(a) for the infringement of a registered trade mark; or
(b) relating to any right in a registered trade mark; or
(c) for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff's trade mark, whether registered or unregistered, shall be instituted in any court inferior to a District Court having jurisdiction to try the suit. (2) For the purpose of clauses (a) and (b) of sub- section (1), a "District Court having jurisdiction" shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or any other law for the time being in force, include a District Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceeding, the person instituting the suit or proceeding, or, where there are more than one such persons any of them, actually and voluntarily resides or carries on business or personally works for gain. Explanation:- For the purposes of sub-section (2), "person" includes the registered proprietor and the registered owner.
142. Groundless threats of legal proceedings:-
(1) Where a person, by means of circulars,
advertisements or otherwise, threatens a person with an
13
action or proceeding for infringement of a trade mark which is registered, or alleged by the first-mentioned person to be registered, or with some other like proceeding, a person aggrieved may, whether the person making the threats is or is not the registered proprietor or the registered user of the trade mark, bring a suit against the first-mentioned person and may obtain a declaration to the effect that the threats are unjustifiable, and an injunction against the continuance of the threats and may recover such damages (if any) as he has sustained, unless the first-mentioned person satisfies the court that the trade mark is registered and that the acts in respect of which the proceedings were threatened, constitute, or, if done, would constitute, an infringement of the trade mark.
(2) The last preceding sub-section does not apply if the registered proprietor of the trade mark, or a registered user acting in pursuance of sub-section (1) of Section 52 with due diligence commences and prosecutes an action against the person threatened for infringement of the trade mark.
(3) Nothing in this section shall render a legal practitioner or a registered trade marks agent liable to an action under this section in respect of an act done by him in his professional capacity on behalf of a client.
(4) A suit under sub-section (1) shall not be instituted in any court inferior to a District Court."
8. Section 10 of the Code of Civil Procedure, 1908 is reproduced as under:-
"10. Stay of suit:- No Court shall proceed with the trial of any suit in which the matter in issue is also 14 directly and substantially in issue in a previously instituted suit between the same parties, or between parties under whom they or any of them claim litigating under the same title where such suit is pending in the same or any other Court in India having jurisdiction to grant the relief claimed, or in any Court beyond the limits of India established or continued by the Central Government and having like jurisdiction, or before the Supreme Court.
Explanation:- The pendency of a suit in a foreign Court does not preclude the Courts in India from trying a suit founded on the same cause of action."
9. In C.O.S.No.34 of 2019, which is pending on the file of the Court of the Special Judge, Commercial Court, City Civil Court, Hyderabad, an application, i.e., I.A.No.617 of 2019 preferred under Section 10 of CPC has been allowed keeping in view the Judgment delivered by the Hon'ble Supreme Court of India in the case of National Institute of Mental Health and Neuro Sciences v. C.Parameshwara1 and the Judgment delivered by the High Court of Calcutta in the case of Heinz Italia Sr L v. Dabur Indua Limited2. Paragraphs 7, 8 and 9 of the order, dated 05.12.2019, passed in I.A.No.617 of 2019 in C.O.S.No.34 of 2019 by the Court of the XXIV Additional 1 AIR 2005 SC 242 2 AIR 2005 CAL 89 15 Chief Judge-cum-Commercial Court, City Civil Court, at Hyderabad, are reproduced as follows:-
"7. Applying the above principles to the facts of the case, it is to be found whether the matter in issue in the previously instituted suit in Civil Suit No.1/2019 on the file of the District Judge, Utham Singh Nagar is similar to the facts involved in the suit on hand. The court at this stage shall not decide whether the trademarks are similar either phonetically or visually and the court shall not decide whether any rights of any of the parties are infringed. If the learned District Judge at Udham Singh Nagar finds that the BERLINO and BAMBINO are not similar trademarks, this Court contradicting the said finding cannot decide as to whether injunction can be granted against the petitioners herein restraining them from using the trademark. Similarly, if this court has passed any perpetual injunction, the learned District Judge, Udham Singh Nagar cannot grant the relief of the declaration and other reliefs claimed by the petitioner in the suit. It is to be stated that for the purpose of granting the injunction, the court has to necessarily find out whether both the trademarks are similar and whether the parties have rights over the trademark. Though the counsel have argued about comprehensiveness of the suit, the court in this case need not decide on the said issue. The counsel for the respondents contends that there are two different causes of action but as held in Heinz Italia SL (supra) stated above the question is not whether the suits are based on similar cause of action but the question is whether the subject matter i.e., matter in issue in the two suits is similar or different. In the case on hand in my 16 opinion the matter in issue in this case before me and the subject matter before the learned District Judge, Udham Singh Nagar is similar. It may be true that there are some additional reliefs claimed by the respondents herein and as the defendants, they have not claimed the reliefs in the suit in Civil Suit No.1/2019 on the file of the learned District Judge, Udham Singh Nagar. The respondents are not permanently deprived of their rights and they can continue with the suit after disposal of Civil Suit No.1/2019 stated above for the additional consequential reliefs sought for by the respondents in this suit. Since the present suit is subsequent suit, the court has to hold it on till the previous suit is adjudicated and the court can basing on the adjudication decide the remaining collateral issues raised by the respondents in this suit. The facts of this case fall within the ambit of Section 10 of the CPC and the court has to stay the trial of the suit for fear of contradicting judgments of the courts having coordinate jurisdiction. This is a subsequent suit and the suit before the learned District Judge, Udham Singh Nagar is the previous suit and therefore, the subsequent suit shall yield and it is to be stayed.
8. It is contended that the reliefs claimed in this suit are different from the reliefs claimed by the petitioner in Civil Suit No.1/2019 before the learned District Judge, Udham Singh Nagar. The test to be applied in such cases where the court can pass decree in both the cases which will not contradict with each other and in my opinion in the suits under consideration, if both the suits are to be decreed they would contradict with each other. Therefore, it shall be concluded that the subsequent suit shall be stayed.17
9. For the above reasons, this petition is allowed and the trial of the suit in COS No.34/2019 is stayed till the disposal of the Civil Suit No.1/2019 on the file of the learned District Judge, Udham Singh Nagar, Uttarakhand. There is no order as to costs."
10. This Court has carefully gone through the Judgments referred by the Court below as well as the statutory provisions governing the field. The suit has been filed by the respondents/defendants under Section 142(1) of the Trade Marks Act, 1999 alleging that groundless threats and Section 142(2) clearly stipulates that if the registered proprietor of the trade mark with due diligence commences and prosecutes an action against the person threatened for infringement of the trade mark, then the suit for groundless threats under Section 142(1) shall not come in the way of registered proprietor of the trademark. In the present case, the petitioners/plaintiffs have filed a suit alleging infringement of trade mark 'BAMBINO' and therefore, keeping in view the statutory provision as contained in section 142(2) of the Trade Marks Act, the Court below has certainly erred in law and on facts in allowing the application preferred under Section 10 of CPC. The prayer in the Civil 18 Suit No.1 of 2019, which is pending on the file of the learned District Judge, Udham Singh Nagar, Uttarakhand and the prayer in the suit, i.e., C.O.S.No.34 of 2019 on the file of the Special Judge, Commercial Court, City Civil Court, Hyderabad is not at all similar. They are different and distinct and therefore, the Court below has committed an error in staying the civil suit, which is pending at Hyderabad. The facts of the case establishes that 'the cease and desist notice' was served on the respondents/defendants in the present suit from using the trade mark, which is the subject matter of the suit/similar name, i.e., 'BERLINO', as the said name was deceptive with the registered trade mark and in those circumstances, civil suit was filed before the learned District Judge, Udham Singh Nagar, Uttarakhand under Section 142 of the Trade Marks Act, 1999.
11. In the present case, as already stated, reliefs claimed in both the suits are different and distinct and in case the subsequent suit, in which infringement of trade mark is challenged, is stayed, there will be a situation where any person who is infringing the trade mark and who is served 19 with a 'cease and desist notice' will file a suit under Section 142(1) of the Trade Marks Act, 1999 and the registered user of the trade mark will be left remediless. Meaning thereby, even if he files a subsequent suit alleging infringement of the trade mark, the same will have to be stayed if the logic and reasoning assigned by the Court below is accepted. The intention of Section 10 of CPC is certainly not to restrain the registered users of trade marks to file a civil suit during the pendency of a suit under Section 142(1) of the Trade Marks Act, 1999.
12. The learned counsel for the petitioners/plaintiffs has placed reliance on the judgment delivered by the High Court of Delhi in the case of Bristol Myers Squibb Holdings v. Natco Pharma (CS (COM) No.342 of 2019 & I.A.No.9768 of 2019, dated 23.01.2020), the judgment delivered by the Madras High Court in O.A.No.744 of 2011 in C.S.No.586 of 2011, dated 06.01.2011, the judgment delivered by the Delhi High Court in the case of the Chartered Institute of Taxation v. the Institute of Chartered Tax Advisers of India (CS (Comm) No.448 of 2019, I.A.Nos.11442 of 2019, 11441 of 2019 and 11440 of 20 2019, dated 22.08.2019) and the judgment delivered by the High Court of Rajasthan Bench at Jaipur in the case of M/s.Havmor Ice Cream Limited v. Piyush Shah (SB Civil Writ Petition No.5496 of 2011). This Court has carefully gone through the aforesaid judgments and the controversy involved in the present case is altogether different from the issue involved in the aforesaid cases.
13. The facts of the case reveal that the respondents before this Court is making an attempt to pre-empt the registered owner of the trade mark to file a suit against the respondents by taking shelter under Section 142 of the Trade Marks Act, 1999. It is true that the respondents/defendants have filed a suit under Section 142 of the Trade Marks Act, 1999, which is prior in time and pending at Udham Singh Nagar, Uttarakhand, however, it does not mean that the present petitioners/plaintiffs cannot proceed ahead with the suit filed by them, i.e., O.S.No.34 of 2019 before the Court of the Special Judge, Commercial Court, City Civil Court, Hyderabad; under Order VII Rules 1 and 2, Section 26 of the Code of Civil Procedure, 1908 read with Sections 27, 28, 29 21 and 134 of the Trade Marks Act, 1999, Section 62 of the Copyright Act, 1957 and Section 88 of the Indian Trusts Act, 1882.
14. Section 120 of the erstwhile Trade and Merchandise Marks Act, 1958 is in pari materia with Section 142 of the Trade Marks Act, 1999. In the case of Dolphin Laboratories Private Limited v Kaptab Pharmaceuticals3, the Calcutta High Court has held as under:-
"18. But the real controversy in this application is whether the plaintiff in its suit under Section 120 of the Act is entitled to restrain the defendant from filing a suit complaining passing off. The section itself do not provide that a person against whom a suit has been filed thereunder can be restrained from filing any other suit in his favour. Had the defendant filed a suit for passing off without any notice to the plaintiff, I am not sure whether the plaintiff could have proceeded under Section 120 of the Act to restrain the defendant from proceeding with the said suit. It also appears to me that sub-section (2) of Section 27 of the Act clearly and in no uncertain terms upholds the right of a person to file a suit for passing off irrespective of any other provision in the Act.
19. I am unable to accept the contention of the plaintiff that while restraining a person from making unjustified threats it is also open to the Court to restrain 3 1980 SCC OnLine Cal 196 22 him from taking the matter to a Court of Law and from agitating his rights there. The right to institute a suit is an important and vital right and it is settled law that unless there is an express statutory bar the right of a person to institute a suit should not normally be interfered with. If the contentions of the plaintiff are accepted then the Court is called upon to pass an order restraining the defendant from instituting a suit. This order cannot be made directly in terms of Section 120.
20. It appeared to me that Section 120 of the Act is intended to give relief in cases where irresponsible and unjustified threats are made and publicised in order to injure another person's trade. In such cases the person threatened would be entitled to come to Court and have it adjudicated that such threats are groundless. But the said section in my view is not intended to prevent a person from instituting a suit alleging passing off."
15. The Delhi High Court in the case of Siddarth Wheels Private Limited v. Bedrock Limited4, has held as under:-
" 13. ..... Sub-Section (2) provides for exclusion from applicability of Sub-Section (1) of Section 120 of the erstwhile Trade and Merdchandise Marks Act, 1958 if the registered proprietor of the Trade Mark with the due diligence commences and prosecutes an action against the person threatened for infringement of the Trade Mark. According to learned counsel for the Defendants, the words "for infringement of the trade mark" used in this Sub-Section relate them to "the person threatened", and 4 1987 SCC OnLine Del 365 23 that they do not qualify the "action". In other words, according to him, any "action" in respect of the Trade Mark commenced by the registered proprietor could knock off applicability of Sub-Section (1) of S. 120. This contention cannot stand scrutiny of the nature and the purpose of the provision made by the Legislature in statutes like S. 120 of the Act. To give effect to both Sub- Sections (1) and (2) of S. 120 and to harmoniously construe them, it has to be appreciated, the subject matter of both the Sub-Sections must be the same. Sub-Section (1) provides the cause of action for the person threatened and requires the Defendants to satisfy the Court that the acts in respect of which proceedings were threatened constitute, or if done, would constitute an infringement of the Trade Mark. Sub-Section (1) provides for relief by a declaration to the effect that threats are unjustifiable, and, if it is so established, it also provides for protection to the person threatened, by an injunction against the continuance of groundless threats, as well as for recovery of such damages, if any, as he has sustained. Loosely speaking, Sub-Section (1) can be described as a provision for action against groundless threats. Sub-Section (2) preserves the predominating effect of an action for infringement of trade mark under S. 29 of the Act. It would be in that suit where it could be shown as to whether there was any infringement of the trade mark of the Defendants or not. ......... Legislative provision must be construed to make sense and to make it meaningful rather than to render it vague and ambiguous the only way to achieve that object is to reasonably construe Sub-
Section (2) as requiring an action for infringement of trade mark to be commenced and prosecuted for an effective 24 and complete adjudication of all matters in controversy between the parties in respect of use of the trade mark."
16. The Madras High Court in the case of Lakshmik PVC Products Private Limited v. Lakshmi Polymers5, has held as under:-
"13. The learned counsel for the defendant further submitted that incorporation of the plaintiff-company does not confer rights to use the word 'LAKSHMI' and there is no provision in the Companies Act to use the word 'LAKSHMI' in the trading side and the use of the word 'LAKSHMI' over their products was objected to and there is no objection for the use of the named for the company, and learned counsel for the defendant also pointed out that the defendant-partnership company was registered on 25-12-1985 and Lakshmi Polymers was prior in point of time to the incorporation of the plaintiff and the plaintiff cannot claim any right from the previous partnership accruing to the plaintiff-company. In this regard, the learned counsel for the defendant also submitted that the defendant has given the sales turnover, and the plaintiff has not given the sales turnover. It is to be seen that the defendant partnership firm had been registered even in the year 1985 and they have been selling their products for the past two years. The plaintiff has come to the market only recently. No doubt, it is being claimed by the plaintiff that they had decided as regards the name much earlier. But that is a matter to be established by evidence. It is also to be seen that the defendant had already applied 5 1990 SCC OnLine Mad 324 25 for registration of the trade mark and it is said to be pending. In such circumstances, I find the notice issued on behalf of the defendant as such may not be a prima facie unjustifiable threat. No doubt, it is for the plaintiff to establish the same in the suit. But taking into consideration the fact that the defendant has already applied for registration and the matter is pending and the plaintiff also submits that they proposed to file an application for registration, that is a matter that could be decided by the Registrar of Trade Marks. Pending disposal of the application, I feel the defendant could be directed not to the issue any circular, or advertisement regarding the plaintiff's products. But it is made clear that it is open to the defendant to file a suit against the plaintiff.
14. The learned counsel on either side placed reliance in the decision reported in Dolphin Laboratories Pvt. Ltd. v. Kaptab Pharmaceuticals (supra). In that decision the facts reveal that a manufacturer of drug had applied for registration of mark on drug long before the defendant who applied for registration of identical drug with similar trade mark. The plaintiff was threatened with legal proceeding by defendant on his continuance of sale of drug under the mark. The defendant intended to file suit for passing off. The plaintiff filed suit for injunction restraining the defendant from continuance of threats by filing suit for passing off. It was held that the defendant could not be restrained from instituting suit for passing off in the court. It has been further laid down that while restraining a person from making unjustified threats it is not open to the court to restrain him from taking the matter to a court of law and from agitating his rights there. Section 120 is not intended to prevent a person 26 from instituting a suit alleging off. Section 27(2) clearly upholds the right of a person to file a suit for passing off irrespective of any other provisions in the Act."
17. The Delhi High Court in the case of Rajni Industries v. Bhartiya Dhook Karyalaya6, has held as under:-
"11. On a reading of the aforesaid provisions of Section 120(1) and (2) of the Act and the position of law laid down in the aforesaid judgments, the predominant position of Section 120(2) becomes evident. In particular the judgment in Sidharth Wheels Pvt. Ltd.'s case (supra) lays down very clearly that the remedy of Section 120(1) is available only when a proceeding is threatened and ceases to operate once a proceeding in a Court of Law has been instituted as is clear from the language of the Sub-section (2) of Section 120 which is predominant in nature and which prohibits the operation of Sub-section (1) in a situation where an action is commenced by the registered user under Section 51 of the Act. Sidharth Wheel's judgment (supra) further holds that the only qualification for the applicability of Section 120(2) is that the suits under Section 120(1) and Section 120(2) must have the same subject matter. The above test of similarity of the matter is fully satisfied by the plaintiff's own pleading in I.A. 8591/99, filed tinder Section 24 of CPC. Therefore, if the registered proprietor of the trade mark commences and prosecutes an action against the person threatened, for infringement of the trade mark, then Section 120(1) ceases to apply and action under it cannot be maintained.
There is no dispute in the present case that not only a 6 2001 SCC OnLine Del 480 27 criminal complaint has been filed under Section 200 of Cr.P.C. by the defendant in the month of August, 1999 against the plaintiffs for committing offences under Sections 77, 78 and 79 of the Trade and Merchandise Marks Act, 1958 read with Section 420/34 of IPC along with an application under Section 93, Cr.P.C. for issuance of warrants for search and seizure of goods bearing false trade mark, labels, etc.; but prior to the date of the filing of the present suit, i.e., 25th of August, 1999; a civil suit had also been filed by the defendants on 19th of August, 1999. Thus the two proceedings, i.e., criminal complaint and civil suit filed by the defendants could constitute a cause of action under Sub-section (1) such cause of action ceases to be available once proceedings specified under Section 120(2) are initiated.
xxx xxx xxx
15. In the light of the above, it is very clear that in accordance with the position of law laid down by this Court in Sidharth Wheels Pvt. Ltd.'s case (supra) the present suit filed by the plaintiff under Section 120(1) cannot bar the continuance of Suit No. 112/99 filed by the defendants as the subject matter of the two suits even on the plaintiff's own averments is the same in so far as Civil Suit No. 112/99, filed by the defendant is concerned. Furthermore the issue as to infringement has to be determined in the suit filed by the defendant. Operation of Section 120(2) would operate as a bar for continuance of the present proceedings qua Suit No. 112/99 and there cannot be any continuance of the interim order in the light of the suit filed by the defendant which was in fact prior in point of time."
28
18. The Madras High Court in the case of Value Invest Wealth Management (India) Private Limited v. B.G.Kishor Kumar7, has held as under:-
"17. On consideration, I find that no ground is made out for grant of injunction. The remedy under Section 142 of the Trade Marks Act, 1999 is only for issuing injunction against threat of action. It is not possible for this Court in absence of claim of damages to determine whether there has been any violation of Trade Mark or not.
18. The Section 142 permits the Defendant in a suit under Section 142 of Act to satisfy the Court that the trade mark is registered and that the acts in respect of which the proceedings were threatened, constitute or if done, would constitute an infringement of the trade mark.
19. The Applicant/Plaintiff in the Plaint itself has not disputed that the trade mark, as claimed in the notice, is a registered trade mark of the Defendants. Though the notice can be treated to be a threat, but in the facts and circumstances of the present case, it is clearly proved that after issuance of notice and reply, no further notice has been received. This Court, in exercise of powers under Section 142 of the Act cannot restrain the holder of the registered trade mark to bring out action in accordance with law. The Suit under Section 142 of the Act cannot bar the Defendants from filing the Suit under Section 29 of the Act, where trade mark is registered.7
2012 (1) CTC 401 29
20. It will be for the Defendants either to proceed under Companies Act for change of name or to move under the Trade Marks Act. 1999. This certainly is not a case where the groundless threat can be said to have been given by the Defendants/Respondents, merely, because a notice is issued, conveying the Applicant about registered trade mark, which is not followed by any other threat. In the facts and circumstances of this case, the notice issued to Plaintiff cannot be said to be a groundless threat."
19. In the case of Chartered Institute of Taxation v. Institute of Chartered Tax Advisers of India Limited8, the Delhi High Court has held as under:-
"3. Finding, on a reading of the plaint, that the groundless threats by the defendant, with respect to which declaration to the effect that the threats are unjustifiable and against making of which injunction is sought, to be by way of oppositions filed by the defendant to the application of the plaintiff for registration of the trade mark ADIT, I have straightaway enquired from the senior counsel for the plaintiff, how can a plea taken in a legal/statutory proceedings, howsoever frivolous and groundless, and pending consideration before a Court/statutory authority, be subject matter of declaration as unjustifiable in another proceeding, and whether not the effect of injunction against the defendant from continuing the groundless threats, complaining whereof this suit has been filed, would amount toinjuncting the defendant from pursuing oppositions filed by it to the application of the plaintiff to 8 2019 SCC OnLine Del 10037 30 the Registrar of Trade Marks for registration of the mark ADIT. Attention of the senior counsel for the plaintiff is drawn to Section 41(a) of the Specific Relief Act, 1963 which bars the grant of injunction to restrain any person from prosecuting a judicial proceeding pending at the institution of the suit, unless such restraint is necessary to prevent a multiplicity of proceeding. Attention is also drawn to the dicta of the Supreme Court in Cotton Corporation of India Limited v. United Industrial Bank Limited (1983) 4 SCC 625, holding (a) that expression 'court' in Section 41 of the Specific Relief Act should be given the widest amplitude, comprehending every forum where relief can be obtained in accordance with law; and,
(b) that anyone having a right that is a legally protected interest and complaining of its infringement and seeking relief through Court, must have an unhindered, uninterrupted access to law Courts and that Courts ordinarily will not impede access to Courts. It was held that access to justice must not be hampered even at the hands of judiciary; no other Court can by its action, impede access to justice.
4. The senior counsel for the plaintiff contends that it is not the intent and want of the plaintiff to injunct the defendant and this Court may clarify that the pendency of this suit and/or grant of any interim injunction sought herein will not affect the proceedings before the Registrar of Trade Marks in the application of the plaintiff for registration of the mark ADIT and adjudication of the opposition by the defendant thereto.
5. However once a suit is not found to be maintainable in law and the relief claimed therein is found to be barred, the same cannot be made maintainable by making such 31 statements. The effect of entertaining this suit and/or a finding of prima facie case of "threats" by the defendant in the averments in its oppositions to the application of the plaintiff for registration of the mark ADIT, are bound to have an impact on the Registrar of Trade Marks, who is within the supervisory jurisdiction of this Court; this Court cannot turn a blind eye to the said reality of life.
6. I have even otherwise enquired from the senior counsel for the plaintiff, as to how a plea taken in opposition proceedings before the Registrar of Trade Marks and which are statutory in nature, can constitute a threat within the meaning of Section 142 of the Trade Marks Act.
Section 142 of the Trade Marks Act is the remedy provided by the legislature against the mischievous acts, by means of circulars, advertisements or otherwise, threatening a person with an action or proceeding for infringement of trade marks. Certainly oppositions filed in statutory proceedings cannot be equated with circulars or advertisements with reference whereto remedy of Section 142 of the Trade Marks Act has been provided. The intent of the legislature in drafting Section 142 of the Trade Marks Act appears to be, to provide remedy against a person, who without instituting legal proceedings, metes out threats of legal proceedings. This is clear from Sub- Section (2) of Section 142, which brings to an end, an action even if initiated under Section 142(1), the moment a proceedings for infringement of trademarks is initiated. The Scheme of the Section is, that adjudication of rights asserted should be through legal proceedings and not in public arena. If Section 142 of the Trade Marks Act is read in this manner, once the Registrar of Trade Marks, being a statutory authority empowered to decide the opposition, is 32 seized of the matter, the pleas if any of the plaintiff, of the grounds taken in the opposition being frivolous, groundless and baseless, have to be adjudicated by the Registrar, and/or in proceedings against the order of the Registrar, and not by way of a separate suit. It is not the pleaded case, that the Registrar of Trade Marks is incompetent to decide the objections"
20. In the light of the aforesaid judgment, it can safely be gathered that the intent of the legislature in drafting Section 142 of the Trade Marks Act, 1999 appears to be, to provide remedy against a person, who without instituting legal proceedings, metes out threat of legal proceedings. It is clear from sub-section (2) of Section 142 of the Trade Marks Act, 1999, which brings to an end, an action even if initiated under Section 142(1) of the Trade Marks Act, 1999, the moment proceedings for infringement of trade mark is initiated and therefore, by no stretch of imagination, the proceedings for infringement of the trade mark can be stayed as was done by the Court below.
21. In the considered opinion of this Court, the order, dated 05.12.2019 passed in I.A.No.617 of 2019 in C.O.S.No.34 of 2019 passed by the Court of the XXIV 33 Additional Chief Judge-cum-Special Judge, Commercial Court, City Civil Court, Hyderabad, staying the suit filed by the petitioners/plaintiffs deserves to be set aside and is accordingly set aside.
22. The Civil Revision Petition is accordingly allowed.
Miscellaneous petitions, pending if any, shall stand closed.
_____________________________ SATISH CHANDRA SHARMA, CJ ___________________________ ABHINAND KUMAR SHAVILI, J 21.03.2022 pln