Andhra HC (Pre-Telangana)
M. Mahendra Shah vs Hindustan Lever Ltd. And Anr. on 3 February, 1997
Equivalent citations: 1997(2)ALT391, 1997(2)ARBLR118(AP)
Author: B.S. Raikote
Bench: B.S. Raikote
ORDER B.S. Raikote, J.
1. These two C.M.A. No. 1715/96 and C.M.A. No. 46/97 have been filed being aggrieved by the common judgment and order dated 6-11-1996 passed by the III Additional Chief Judge, City Civil Court, Hyderabad on I.A. No. 35/96 in O.S. No. 2/96 and on I.A. No. 237/96 in O.S. No. 6/96. The appellant in C.M.A. No. 1715/96 is the plaintiff in O.S. No. 2/96 and the appellant in C.M.A. No. 46/97 is the plaintiff in O.S. No. 6/96. By the impugned order their respective I. As filed for injunction restraining the respective defendants in each suit from using the trade mark 'ANNAPURNA' either by itself or in combination with any other word or words or any other mark identical with or deceptively similar thereto in relation to their respective goods viz., whole wheat flour/atta so as to pass off or enable any other person to pass off their goods, have been dismissed by the court below and at the same time directing the plaintiffs in both the suits to maintain the status-quo ante. The counsel for the appellant in both the cases strenuously contended that the impugned order is illegal and without justification and contrary to the materials on record. They submitted that the court has erred in directing them to maintain status-quo. According to the appellant's counsel in both the cases there should have been an injunction in favour of the respective plaintiffs as against the respective defendants.
2. In order to appreciate the rival contentions on both sides, I have to summarily note the facts of this case. The plaintiff in O.S. No. 2/96 Sri M. Mahendra Shah filed the present suit alleging that he is engaged in the manufacture, sale and marketing of items including wheat, flour, etc., under the trade mark 'ANNAPURNA' which is also the trade name under which he carries on the business. The said trade mark he has been using since long. He further alleged that in the year 1996 he has sold goods worth Rs. 2,37,500/- and he has also advertised under the said trade mark in various newspapers, periodicals etc. In order to popularise his products he incurred a lot of expenditure for advertisements. He further stated that he has already made an application bearing No. 657595 for registering the said trade mark 'ANNAPURNA' for the goods he markets, which fall under class 30 of IV Schedule of Trade and Merchandise Marks, Rules (1959), and the same is pending. He further stated that recently he came to know that the defendants M/s. Hindustan Lever Limited and two others have been using a similar trade mark "ANNAPURNA" along with word 'GOLD SEAL' on their product namely wheat flour (atta) only with a view to pass off their goods as those of the petitioner and thus the defendants have been causing great damage and injury to the plaintiffs reputation as well as his business. Under these circumstances the defendants were liable to be restrained from using the trade Mark 'ANNAPURNA' for their goods. Along with the suit Mr. M. Mahendra Shah (hereinafter referred to as Mr. M. Shah) filed I.A. No. 35/96 for injunction. On that I.A. it appears that an ex parte injunction was granted on 2-2-1996 for a period upto 26-2-1996. Meanwhile M/s. Hindustan Lever Limited (hereinafter referred to as 'HLL') i.e., the D-2 in the case, filed a counter denying the allegations made by the plaintiff inter alia contending that the suit as filed by the plaintiff was not maintainable. Further contending that the defendants were engaged in manufacturing selling and exporting of food items such as Vanaspati, edible oils, soaps, detergents, personal products etc., in the year 1992 in order to extend their food business they decided to engage in marketing staple food such as salt, pulses, rice, atta, maida, etc., and for such products they adopted the trade mark "ANNAPURNA" as a suitable name for their staple food business. Accordingly they applied for registration of the trade mark 'ANNAPURNA' by itself and also in combination with trade mark 'GOLD SEAL'. They filed their application bearing No. 621121 on 3-3-1994 regarding class 30 under the trade mark 'ANNAPURNA' word per se and the second application No. 647300 on 1-12-1994 for class 30 under the trade mark 'GOLD SEAL ANNAPURNA' and the third application No. 664869 on 8-5-1995 for class 32 under the trade mark 'ANNAPURNA' and those applications are pending. It is further contended that HLL caused M/s. Stefen Chemicals Limited to market their 'ANNAPURNA' salt in A.P. in December 1994. The first advertisement regarding salt was released though 'Eenadu' a Telagu daily dated 23-12-1994 and also launched through television from 27-4-1994 at Hyderabad kendra and for such advertisement they have invested huge amounts. As things stood thus in the second week of February 1996 they received information from the plaintiff that he has filed O.S. No. 2/96 praying for injunction and on I.A. No. 35.96 he has secured an ex parte order of injunction and the same was in force till 26-2-1996. HLL further contended that the defendant company has a turnover of more then Rs. 35 crores and they have already marketed their iodised salt under trade mark 'ANNAPURNA' since the year 1992 either by themselves or through their subsidiary companies under the brand name 'ANNAPURNA' or 'GOLD SEAL ANNAPURNA'. Since the year 1994 the said brand name 'ANNAPURNA' has become known to the traders as well as to the consumers and in the year 1994-95 along with every 2 kg 'ANNAPURNA SALT' one 'WHEEL' detergent, 12.5 grams was given free at the promotional cost of Rs. 25 lakhs. In these circumstances using of the said brand name by M. Shah was dishonest and fraudulent and Sri M. Shah was trying to take advantage of the goodwill of the brand name of HLL, and Mr. M. Shah also is trying to pass off his goods under the trade mark 'ANNAPURNA' of HLL fradulently from the month of March 1995. They further contended that HLL company and their dealers have huge stock of goods under the brand name 'ANNAPURNA' awaiting for sale and grant of interim injunction against them would have the effect of blocking the sale of their goods and also their future sale. They further contended that HLL has got superior rights over other subsequent users like plaintiff. The polythene bag in which the HLL has been selling iodised salt since 1994 is identical to the polythene bag which is used for selling atta since December 1995. Even the composition of colour combination, the lettering and the picturisation on both the polythene bags is the same. Accordingly they have built up the business reputation over the picture, colour and the trade mark 'ANNAPURNA' on their plastic bags. They contended that Mr. M. Shah was not a genuine trader and he is trying to put an obstacle in their progress or taking advantage of the extensive advertisement made by them regarding their product under the trade mark 'ANNAPURNA'.
3. In addition to the counter filed by HLL in I.A. No. 35/96 in O.S. No. 2/96 they also filed a separate suit in O.S. No. 6/96 for injunction against M. Shah restraining him from making use of their trade mark 'ANNAPURNA'and restraining him from passing off under the trade mark 'ANNAPURNA'. It is to be noted at this stage itself that the allegations in the suit O.S. No. 6/96 and in I.A. No. 237/96 made by HLL are similar to the counter they have filed to I.A. No. 35/96 in O.S. No. 2/96. Having regard to these circumstances only in order to avoid the confusion, instead of describing them as plaintiff, defendant, respondents, etc., in both the suits and IAs I am referring them by name. In fact the learned counsel on both sides submitted the arguments with reference to the names of the respective parties.
4. The court below clubbing both suits together along with their respective IAs has passed the common impugned judgment and order by which, as I have already stated above, the injunction application filed by them in their respective suits have been dismissed by directing them to maintain the status quo ante till the disposal of the suit or till the disposal of the applications of both of them filed before the Registrar whichever is earlier, without expending their business regarding the whole wheat/atta. It is in these circumstances, the plaintiffs in both the suits have filed these two appeals. C.M.A. No. 1715/96 is filed by the plaintiff in O.S. No. 2/96 (M. Shah) challenging the common judgment and order passed on I.A. 35/96 and C.M.A. No. 46/97 filed by the plaintiff in O.S. No. 6/96 (HLL) challenging the common judgment and order passed on I.A. No. 237/96. In C.M.A. No. 1715/96 filed by M. Shah the C.M.P. No. 20019/96 was filed for injunction and this court vide order dated 31-12-1996 has granted ad-interim injunction. In order to vacate the said order C.M.P. No. 226/97 is filed by HLL and the same is now posted before me. C.M.A. No. 46/97 is filed by HLL along with C.M.P. No. 499/97 for injunction and C.M.P. No. 500/97 for suspending the operation of the impugned order dated 6-11-1996. This C.M.A. No. 46/97 was admitted by this court on 22-1-1997 under S.R. No. with a further direction to post this C.M.A. C.M.Ps. No. 499 and 500/97 along with C.M.A. No. 1715/96 & C.M.P. No. 20019/96 and C.M.P. No. 226/97. Accordingly all the C.M.Ps. filed in both the C.M.As. were posted before me on 27-1-1997. Both the counsel submitted that the arguments on C.M.Ps. and the arguments on the main appeals would be one and the same and accordingly they consented that the appeals themselves could be heard on merits finally. Accordingly they have argued on 27-1-1997 and 29-1-1997. In these circumstances I am disposing of the main C.M.As. themselves finally by this common judgment.
5. The learned counsel appearing for M. Shah contended that the court below has erred in passing the impugned order refusing injuncation to him having regard to the fact that Mr. M. Shah made out a case for grant of injucation. She further contended that even though HLL was marketing iodised salt under the trade mark ANNAPURNA much earlier to Mr. M. Shah but so far as the wheat flour was concerned they started using trade mark 'ANNAPURNA' subsequent to Mr. M. Shah started using the same for his atta and on the basis of common Law principle the first user has priority over the subsequent user and in these circumstances it is the the HLL who are passing off their product encroaching upon the trade mark 'ANNAPURNA' of Mr. M. Shah. Therefore, HLL is liable to be injuncted so far as wheat flour was concerned. She further contended that the object of the principle of "passing off" is to prevent unfair competition so as to destroy honest business and also to restrain any kind of commercial piracy. If HLL is not restrained from using the trade mark 'ANNAPURNA' Mr. M. Shah would be put to great loss and hardship as he has already invested huge amount and even the consumers would be put to confusion. Mrs. Bhagavati Trivedi also relied upon some decision in support of her contentions to which I will be referring shortly. On the other hand Mr. Manohar the counsel appearing for HLL contended that it was the HLL who first used the trade mark 'ANNAPURNA' in the market for marketing iodised salt and later they also started marketing atta under the same brand name. Because of their extensive advertisement in newspapers and other advertising media like television etc., the consumers are associating the trade mark 'ANNAPURNA' with HLL. It is immaterial what commodity they are marketing from time to time but the fact remains that they started making use of the trade mark earlier than Mr. M. Shah, admittedly in this case atleast in relation to iodised salt. Having regard to this fact it is HLL which is entitled to injunction against Mr. M. Shah and accordingly the application of Mr. M. Shah filed for injunction is liable to be dismissed. He also relied upon a number of judgments in support of his contentions which also I will be referring to shortly in this case.
6. On the basis of the contention on both sides. I find that there are a few facts which are not disputed on either side. Mr. M. Shah filed an application for registration of the trade mark 'ANNAPURNA' in respect of all the items in class 30, on 1-3-1995 vide No. 657595 Ex. A-1. To show that 'ANNAPURNA' Enterprises with a trade mark 'ANNAPURNA' started marketing the goods atta, Mr. Shah filed an invoice dated 6-3-1995 and 9-3-1995 in favour of M/s. Laxmichand Dayal & Co., A.P.C., Market, New Bombay. They also filed invoice dated 15-3-1995 issued in favour of M/s. Muralidhar & Co., Hyderabad and two other invoices dated 18-3-1995 and 20-1-1995 issued in the name of M/s. Laxmichand Dayal & Co. along with the material papers. All these invoices are filed under Ex. A-2. Mr. M. Shah also filed a copy of the advertisement published in Andhra Bhoomi, Hyderabad edition, dated 21-1-1995, Sarojini, Hublic edition, dated 16-12-1995 and Morasul of Madras dated 15-11-1995. A copy of the publication in Gujarat paper "Western Times" dated 25-6-1995 is also filed likewise, a few other advertisements issued in the month of June-July 1995. These were filed to show that Mr. M. Shah started using the trade name 'ANNAPURNA' right from the month of March 1995. It is also stated by Mr. M. Shah that before filing the application on 1-3-1995 for registration he got an unofficial search made and came to know of one application filed by HLL for trade mark 'ANNAPURNA' dated 3-3-1994. Subsequently he filed a regular application for search on 18-9-1995 and on that the Registrar has issued a report stating that regarding class 30 goods he caused search to be made among the collection of trade marks in the register of trade marks available upto 30-9-1994 and it, was found that some other companies were using the trade name 'ANNAPURNA' for spices, sweets and namkins, Asofoetida etc., and HLL has filed an application No. 621121 for coffee, tea, cocoa, rice, sugar, flour, maida, from cereals etc. On this basis the counsel for Mr. M. Shah contended that it was Mr. M. Shah who started using the trade marks with regard to atta first, therefore, he is entitled to injunction against HLL.
7. On the other hand HLL filed Ex. B-2, a copy of the application filed before the Registrar for Registration on 3-3-1994 for class 30 i.e., coffee, tea, cocoa, sugar, rice, flour, preparations made from cereals, bread, biscuits, confectionaries, ices, honey, baking powder, salt, spices and ices. The period of use is stated as January 1993. Ex. B-3 is another application filed by HLL dated 1-12-1994 for the trade mark 'ANNAPURNA' for class 30. In that application as against the column used earlier 'proposed' was written and the same was struck off and 'January 1993' is written. They also filed Ex. B-4 the third application dated 8-3-1995 for the same trade mark regarding items in class 32. But, we are not concerned with this application since the dispute is only regarding the items under class 30. They also filed Ex. B-7 a statement showing that they have spent about Rs. 45 lakhs for the advertisement. They filed Ex. B-8, a statement of the commodities sold in the market under the trade mark 'ANNAPURNA'. According to this statement in December 1994 they marketed 496 tonnes of salt, valued at Rs. 16 lakhs, and they have marketed from January 1995 to December 1995, 17,180 tonnes of salt valued at Rs. 563 lakhs and for the month of January 1996 they have marketed 1,800 tonnes of salt valued at Rs. 60,000/- (the suit is filed in the month of February 1996). So far as atta is concerned their statement shows that they marketed 80 tomes of atta value at Rs. 8 lakhs in December 1995 and they marketed 150 tonnes of atta valued at Rs. 14.50 lakhs in the month of January 1996. They also filed the advertisements published in newspaper published in Telugu vide Ex. B-9. On the basis of these documents the learned counsel Mr. Manohar for HLL contended that it is HLL which started using the trade name 'ANNAPURNA' regarding salt right from the month of December 1994 and so far as atta is concerned they started marketing the same under the trade name 'ANNAPURNA' from the month of December, 1995. On the basis of these facts one thing cannot be disputed, and the same is not disputed by the learned counsel for Mr. M. Shah, that HLL started using the trade mark 'ANNAPURNA' regarding salt much earlier than Mr. M. Shah, i.e., from the month of December 1994. In fact, the learned counsel for Mr. M. Shah specifically submitted that it is no doubt true that HLL started using the trade mark 'ANNAPURNA' much earlier than Mr. M. Shah but it was only regarding salt and salt alone but not regarding atta. So far as atta is concerned as per the material on record I find that Mr. M. Shah stated marketing the same from 6-3-1995 (for which date the first invoice is produced in the case under "A" series documents.) However, the learned counsel for Mr. M. Shah contended that so far as atta was concerned HLL started using the trade mark 'ANNAPURNA' nine months later than Mr. M. Shah. Thus, on the basis of material on record and as admitted on both the sides the material facts that clearly emerge are as follows :
That HLL started using the trade mark 'ANNAPURNA' regarding salt in the market from the month of December, 1994. However, it started using the trade mark 'ANNAPURNA' regarding atta from the month of December 1995. So far as Mr. M. Shah is concerned he started using the trade mark "ANNAPURNA" for the first time for his atta from the month of March 1995.
On the basis of this material on record, I have to find our, prima facie at this stage as to who started using the trade mark 'ANNAPURNA' first in the market. In view of the contentions raised by the counsel for Mr. M. Shah the decisive factor in the case of passing off would be to decide who started using first the trade mark 'ANNAPURNA'. For the purpose of this proposition she relied upon the judgment in "Duncan Agro Industries Ltd. v. Somabhai Tea Processors (P.) Ltd. (IPLR 1994 Vol. 19, 229)". In that case the plaintiff after obtaining a clean search report from the Trade Marks Registry applied for registration of the word "SARGAM" in the year 1991 and the first sale of SARGAM brand tea took place on 26-6-1991 and the sales grew to 24,000 kgs. in two months. On coming to know the defendant's move to sell tea using the mark SARGAM the plaintiff filed a suit for injunction against the defendant, along with an application for injunction. The High Court of Gujarat agreed with the reasoning of the trial court that the plaintiff entered into the market with the trade mark SARGAM on 15-4-1991 on which date the plaintiff's first sale took place and the defendant entered into the market on 3-8-1991 as per their contention that the agent of the defendant purchased tea on 3-8-1991 and as such the plaintiff started using the trade mark SARGAM earlier than the defendant and as such was entitled for injunction. In that case the court observed as under :
"All these facts taken in their totality would justify the case of the plaintiff for the interlocutory injunction against the defendant as prayed in the interlocutory application. Firstly, the plaintiff has, by being the prior user of the mark, acquired a proprietary right to use the mark to the exclusion of others. Secondly, the probability of the customers being deceived or confused was not only apparent, but was even apprehended by the defendant as is clear from the fact that the defendant filed various suits against the plaintiff on similar allegations. The plaintiff, therefore, has proved a prima facie case."
From the reading of the above judgment it is clear that number of judgments of other High Courts were also relied upon for the similar preposition that in such cases prior use is a decisive factor. The prior use was considered to be relevant because during such a period consumers or purchasers must have found that as regards the quality of a particular product associated with a particular brand name either it is good or bad and using similar trade name or mark by two different persons would definitely cause confusion in the minds of the consumers, and in such circumstances the sale of goods by the person using the same trade mark later may tantamount to passing off. The Hon'ble Supreme Court in a decision in Rustom and Hornby Ltd. v. Z. Engineering Co. . clearly distinguished between the "passing off action" and "infringement action" by observing as under :
"4. The distinction between an infringement action and a passing off action is important. Apart from the question as to the nature of trade mark the issue in an infringement action is quite different from the issue in a passing off action. In a passing off action the issue is as follows :
"Is the defendant selling goods so marked as to be designed or calculated or calculated to lead purchasers to believe that they are the plaintiff's goods ?"
5. But in an infringement action the issue is as follows :
"In the defendant using a mark which is the same as or which is a colourable imitation of the plaintiffs registered trade mark ?"
"It very often happens that although the defendant is not using the trade mark of the plaintiff, the get up of the defendant's goods may be so much like the plaintiff's that a clear case of passing off would be proved. It is on the contrary conceivable that although the defendant may be using the plaintiff's mark the get up of the defendant's goods may be so different from the get up of the plaintiff's goods and the process also may be so different that there would be no probability of deception of the public. Nevertheless, in an action on the trade mark; that is to say, in an infringement action an injunction would issue as soon as it is proved that the defendant is improperly using the plaintiff's mark."
From the law declared by the Hon'ble Supreme Court above it is clear that an action for 'passing off' lies against the defendant if he sells goods, so marked, designed or calculated to lead purchasers to believe that they are the plaintiff goods. But in the case of an action for infringement it is enough if the defendant uses the mark which is similar to the registered mark of the plaintiff for such action. The purchasers or the consumers, therefore, believe that particular goods of a particular trade mark are good or bad only on the basis of its trade mark. The longer the use the more would be his assessment regarding the quality of a particular trade mark. It is only on this principle that a trader acquires a 'right of property' in a distinctive mark merely by using it upon/in connection with his goods as held by the High Court of Bombay in Consolidated Foods Corporation v. Brandon & Co. . Thus, an action for passing off is "a common law remedy being in substance an action for deceit, i.e., a passing off by a person of his own goods as those of another, Durgadutt v. Navaratna Pharmaceutical Laboratories (AIR 1965 SC 680).
8. The learned counsel Mr. Manohar for HLL did not dispute the proposition of law that in a passing off action the prior use is a relevant factor by agreeing with the proposition of law urged by the learned counsel for Mr. M. Shah. But, he contended that the prior use is of 'the trade mark'. He contended that whoever entered the market by using a particular trade mark later for certain commodity would be liable for passing off action. What is important, to be noticed is the use of the 'trade mark' as such in relation to any commodities one wants to market. He further contended that in the instant case admittedly the HLL entered into the market with the trade mark 'ANNAPURNA' regarding its iodised salt, and under the same trade mark 'ANNAPURNA' HLL is also entitled to market other commodities as well with the same trade mark and thus the use of the trade mark as such is relevant but not the commodity, in relation to which it is used, because the consumer on the basis of his experience associates the trade mark with the quality of commodity and such commodity may be salt or may be atta or any other product. Therefore, he submitted that the contention of the learned counsel for Mr. M. Shah, that Mr. M. Shah entered the market with the trade mark 'ANNAPURNA' so far as atta is concerned earlier in point of time cannot be accepted in view of the fact that HLL had already entered into the market with the same trade mark 'ANNAPURNA' with the colour and the picture, and also the sachet used for the purpose of marketing atta, and contended that practically they are of the same type, and he further submitted that the consumer is guided by the trade mark, the picturisation and the colour of the sachet whether it is atta or salt. He further submitted that due to extensive advertisement in the newspapers and in the television by HLL the trade mark 'ANNAPURNA' has become popular with the consumers and in such circumstances the action of Mr. M. Shah marketing atta under the same trade name is a passing off action. In support of his contention he relied upon a judgment of the High Court of Delhi in Creative Handicrafts v. Sedana Electric Co. and another (1988(2) Arb. LR 297). From the facts of that case it is revealed that the plaintiff in that case was manufacturing and selling T.V. sets under the trade mark "CHOICE" and the defendants started marketing other goods like fans, geysers, electric irons and sewing machines etc., under the same trade mark. In a passing off action the defendants contended that they were not marketing T.Vs. under the trade mark 'CHOICE' as was being done by the plaintiff but they are marketing under the same trade name other goods like fans, geysers, electric irons, sewing machines etc. In view of this controversy the main point that was formulated by the court was whether in a case if a trade mark is unregistered, its breach can be challenged when similar goods are passed off by the defendants by creating a mistaken belief that they were manufactured by the plaintiff The learned single judge relying upon an earlier Division Bench judgment of the same court in M/s. Jugmug Electric and Radio Co. v. M/.s. Telerad Private Limited (AIR 1977 Delhi 152), held as under :
"8. This is a case where the mark of the plaintiff is not registered under the Trade Marks Act. The plaintiff, therefore, is unable to invoke the provisions of Section 29 of the Trade Marks Act. The action which has been initiated by the plaintiff has to be dealt with under the head of passing off. If the goods manufactured by the defendants are likely to cause confusion and deception and are likely to be regarded as the goods which have been manufactured by the plaintiff then in an action under the head 'passing off' the plaintiff would be entitled to an injunction against the defendant. In order to maintain an action for passing off it is not relevant, and it has been so held in 6 R.P.C. 318, as to whether the respective goods fall under the same or different classes. What is to be seen is whether the types of goods which are sold belong to the same category or are in the same trading channel or are allied products. In the present case what is being manufactured by the defendants are domestic appliances. These domestic appliances are non-electrical as well as electrical. Sewing machines, water filters, hot plates etc., are electrical appliances. While sewing machine falls under a class different from hot plate under Schedule IV of the Trade Mark Rules, nevertheless goods belonging to different classes are being manufactured and sold by the defendant under the same trade name, namely, Choice. This tends to lend support to the contention of the plaintiff that even though goods may fall under different classes but they are in the same trading channel and can cause confusion and deception to pass off as the goods of the plaintiff"
The law declared in the above judgment with which I am in agreement clearly supports the contention of the learned counsel for HLL. In the instant case also though applications are filed by the HLL and Mr. M. Shah for registration of the trade mark but those applications are still pending and as a result neither party can invoke Section 29 of the Trade and Merchandise Act, 195R. Therefore, the respective cases have got to be considered under the head "passing off". As I have already noted above it is HLL which started using the trade mark 'ANNAPURNA' for their salt in the month of December 1994, whereas according to the case of Mr. M. Shah be started using the same trade mark for his atta from the month of March 1995. It is only in these circumstances that the action of Mr. M. Shah in marketing atta under the trade mark 'ANNAPURNA' would amount to 'passing off' because marketing the goods under the same mark 'ANNAPURNA' is likely to cause confusion and deception in the minds of the consumers and there is likelihood that his goods may be regarded as the goods which have been marketed by HLL. Moreover, both salt and flour belonged to one class i.e., class 30 under the IV Schedule of Trade and Merchandise Marks Rules. Both of them being food articles of daily consumption their trading channel is the same. In these circumstances both the goods have got to be found in the same grocery shop side by side, thereby creating confusion and deception and if Mr. M. Shah is allowed to market the goods it would result in 'passing off' his goods as that of HLL. A general customer is an ordinary man and is not well versed with the information as to who manufacturers a particular commodity and he always associates commodity with the brand name and on that basis he buys the commodity for his personal consumption. The fact that HLL started using the trade mark 'ANNAPURNA' for their salt only one year prior to M. Shah makes no difference because in between the two HLL is the first user of the trade name and mark 'ANNAPURNA'. Moreover, HLL also has marketed their another product i.e., atta under the same trade mark 'ANNAPURNA' from December 1995. Having regard to these circumstances the contention of Mr. M. Shah that so far as flour or atta is concerned he started using the trade name 'ANNAPURNA' earlier than HLL and therefore he has proprietory right over trade mark 'ANNAPURNA' to sell his atta/ flour is not acceptable. As I have already stated above the prior use is of the trade mark and it does not matter with what commodity or food stuff the same was first used. The person who uses the trade mark first becomes the proprietor of such a trade name or trade mark. According to Section 33 of the Trade and Merchandise Marks Act, 1958. even a registered proprietor of the said mark cannot restrain other using the same trade mark prior to him in the market though not registered. In fact, a Division Bench of the Allahabad High Court in "Thomas Bear & Sons v. Prayag (AIR 1935 Allahabad 7), after considering number of previous decisions held as under :
"The rule deducible from the foregoing cases appears to be that the plaintiffs, whose goods have acquired a reputation in the market through a trade mark or name with which their goods have become associated, have a right to restrain the defendant from using a trade mark or name with which their goods have become associated, have a right to restrain the defendant from using a trade mark or name which is identical with or similar to that of the plaintiffs, and such right extends not only to the particular goods sold by the plaintiffs, but also to cognate classes of goods, provided the cumulative effect of the similarity of the mark the commercial connection between the plaintiff's goods and those of the defendant and surrounding circumstances is such as to lead the unwary customers to mistake the defendant's goods for those of the plaintiffs".
From the reading of this judgment it appears that the earlier view of the High Court in India was that the similarity of trade name or mark was considered in relation "cognate classes of goods" i.e., similar goods falling in the same class. It appears that the scene was also the view in English Law. In fact, in a decision in L.R.C. International Limited and another v. Lilla Edits Sales Company Limited (1973 RPC 560), a similar question came up in the High Court of Justice Chancery Division in England. In that case the plaintiff was trading in household gloves and plastic pants for babies under the mark "MARIGOLD" and they sought an interlocutory injunction to retrain 'passing off' by the sale of toilet tissues under the mark 'MARIGOLD' marketed by the defendants. The main complaint made by the plaintiff in that case was that the undoubted confusion was going to arise if the defendants were not restrained from using their trade mark 'MARIGOLD' since it is their intention to extend their range to cover bin liners, toilet deodorants and other products. In support of their case they contended that if one takes the articles of the defendants which were available for sale and if the plaintiffs also released their product under their trade mark 'MARIGOLD' and in the normal course both products were going to be sold through the same sort of outlets, possibly through super markets or through chemists' business or through other retail shops and as such there would be a strong likelihood of confusion in the minds of the public. By accepting the said contentions his lordship Justice Withford held that :
"I am in no doubt whatsoever, in view of the admitted established reputation of the plaintiffs, that if a housewife went into a shop and saw the defendant's toilet paper on sale there she would think to use the language loved by lawyers, that it came from the same manufacturing source as she was accustomed to buy gloves and baby pants from. Of course, she would not thinks so in so many words inside her head, but assuming that she had been buying the plaintiffs gloves, or the plaintiffs' plastic pants and had been satisfied with these articles sold under this brand name 'Marigold', I have no doubt, she would anticipate she would be similarly satisfied, because of the way "Marigold' is presented in this particular manner with the defendants toilet rolls. I think myself that it is almost impossible to imagine that confusion would not in fact result."
The learned Judge further observed that :
"What the defendants say the plaintiffs are really seeking to do here is to secure a monopoly in the word 'Marigold'. Of course, they are not really seeking to do that at all. If the goods that had been sold by the defendants were motor cars. I have no doubt this proceeding would never been brought. The defendants are entitled to raised the question as to how far beyond their own specific filed of activities the plaintiffs are entitled to extend the area within which they ought to be given protection."
From this it follows that in England the principle of 'passing off' was applied in relation to the cogents goods or goods belonging to almost one class. It has to be noted at this stage itself that the said Chancery Division ultimately granted injunction in favour of the plaintiffs having regard to the fact that the plaintiffs proposed to market similar goods and permitting the defendants to sell their products under the same trade name closely resembling that of the plaintiff was likely to deceive or cause confusion. Moreover, I find that later decisions in India have applied the principle of passing off even regarding dissimilar goods or goods used for different purposes if there is an attempt on the part of anyone to make use of a reputed trade name of others for 'passing off' their goods. For instance in Diamlar Benz Aktiegsellschaft v. Hybo Hindustan the plaintiffs filed a suit against Hybo Hindustan, who manufactured under garments for men under the trade mark "BENZ". The High Court of Delhi held that since the trade mark "BENZ" has assumed the reputation though associated with a car the defendant cannot use the said trade name for their under garments and accordingly injunction was issued against the defendants. In Bata India Ltd. v. M/s. Pyare Lal & Co. (AIR 1995 All 242) M/s. Bata India Ltd. filed a suit against M/s. Pyare Lal & Co. for seeking an injunction against M/s. Pyare Lal & Co. restraining them from using the trade name "BATA" for marketing their foam products like mattresses, sofa cushions. The court by accepting their contention that the trade name 'BATA' had a reputation in the market and using the said trade name by the defendant was a 'passing off' action and according the were restrained. In fact, in the above two cases the nature of goods manufactured by the defendants were entirely different from that of the plaintiff and they had also different vending channels. Even then the court held that the defendants were 'passing off' their goods illegally under the plaintiffs trade mark and accordingly granted injunction against the defendants.
9. In the instant case the salt is already marketed by HLL under the trade name and mark 'ANNAPURNA' one year earlier and flour is marketed subsequently by Mr. Shah under the same trade mark and name 'ANNAPURNA'. In these circumstances Mr. M. Shah is 'passing off' the goods; therefore, he is liable to be restrained. But, the court below did not consider the case of the parties according to these established principles of law applicable to the facts of this case but rejected the application of HLL on two grounds :
(1) The Registrar may and may not register the trade mark as applied for by HLL.
(2) Under Section 12(3) of the Trade and Merchandise Marks Act, 1958 the Registrar may permit the registration of the same trade mark or name by more than one proprietor in respect of the same goods or description of goods subject to certain conditions imposed by him.
But, in my considered opinion these reasons are unsustainable. The pendency of an application by either party before the Registrar for registration under the Trade and Merchandise Marks Act, 1958 is not relevant while considering a 'passing off' action and what the Registrar could have decided in terms Section 12(3) would be simply a matter of guess. As on today what is relevant to be considered is who has made out a prima facie case regarding the use of the trade mark prior in point of time. Whether the other party had the knowledge of such use or not is also not a matter to be considered at this stage since the same requires evidence. Even otherwise then Mr. M. Shah got the unofficial search made in the office of the Registrar in the month of September 1994 he should have known by that dale that HLL had already filed the first application dated 3-3-1994 for the same trade mark 'ANNAPURNA' regarding certain commodities like salt, coffee, tea, cocoa, cereals, ice etc. Even otherwise when he filed an application for official search dated 18-9-1995 he should have insisted for the information from the Trade Marks Registry till the date of application i.e., upto 18-9-1995 but not upto 30-9-1994. From this it follows that he might have filed application for the information upto 30-9-1994 knowing fully well that by the date 18-7-1995, HLL has registered the second application on 1-12-1994 itself for marketing the goods of class 30 under the trade mark 'ANNAPURNA' or 'ANNAPURNA GOLD SEAL'. The copy of the application said to have been filed by Mr. M. Shah on 18-9-1995 is not produced before the court. Having regard to these circumstances it cannot be said that Mr. M. Shah was not knowing that HLL had already applied for the Trade Mark 'ANNAPURNA' to make use of the same even for marketing flour/atta. At any rate, it is the admitted case of Mr. M. Shah that so far as salt is concerned HLL did market the same under the trade name or mark 'ANNAPURNA' right from December, 1994. The material also is produced by HLL that they have advertised their trade name or mark 'ANNAPURNA' from 27-12-1994 both in the newspaper (newspapers cuttings are filed in the case) and also on television media for which an extract of the bill is produced in the case. In these circumstances prima facie, at this stage, it cannot be said that Mr. M. Shah had no knowledge of the use of the trade mark 'ANNAPURNA' by HLL prior to his marketing atta under the same trade name or mark 'ANNAPURNA' in the month of March 1995. In fact, HLL has adopted the same trade name for atta also from the month of December, 1995 and they were entitled to do so as per number of judgments that I have already cited above.. Having regard to these circumstances, I am of the opinion that the court below has not noticed these relevant aspects in the case for the purpose of determining who makes out a prima facie case for grant of injunction. Moreover, since HLL had started marketing their product salt under the trade name 'ANNAPURNA' which gained reputation in the market by reason of extensive advertisement, if they are restrained from marketing the product at this stage they would be put to greater loss than Mr. M. Shah. In these circumstances, I am of the opinion that the balance of convenience also is in favour of HLL. At this stage, it may be noted that the contention of the counsel for Mr. M. Shah was that in his suit O.S. No. 2/96 there was an ex parte injunction on 2-2-1996 till 26-2-1996 and the same was not extended because HLL did not file counter immediately and was taking time, therefore, the court below granted temporary injunction again on 10-5-1996 but unfortunately the same was vacated by this court in a Revision Petition filed by HLL on 22-5-1996. With reference to these dates she submitted that even during the pendency of the suit Mr. M. Shah has extended his business. But, this argument of the learned counsel for Mr. Shah also did not impress me since the injunction that was in force, for nearly 24 days was an ex parte injunction. Moreover, even the later injunction granted by the court below on 10-5-1996 was vacated, thus, it was in force hardly for 12 days. From this face also it is clear that there was no continuous injunction in favour of Mr. M. Shah right from the filing of his suit in O.S. No. 2/96 on 2-2-1996. Normally this court does not grant any ex parte injunction on an appeal Fled unless there was injunction operating as on the date of the passing of the impugned order. In the instant case, there was no injunction operating against HLL on the date of the impugned order. Having regard to these circumstances even the ex parte injunction granted by this court on 31-12-1996 in CMP No. 20019/96 in CMP No. 1715/96 is liable to be vacated. Moreover, having regard to the conclusions that I have arrived at it won't be equitable even to continue the direction of the court below directing both the parties to maintain status quo ante to the extent of their business.
For all the above reasons, I am of the opinion that the impugned order is liable to be set aside and accordingly I pass the order as under :
The appeal filed in C.M.A. No. 46/97 is allowed and the impugned order is set aside and consequently I.A. No. 237/96 filed in suit O.S. No. G/9G is allowed as prayed for. C.M.A. No. 1715/96 is hereby dismissed, consequently the ex parte injunction order granted by this court on 31-12-1996 in C.M.P. No. 20019/96 in C.M.A. 1715/96 is hereby vacated. No costs."