State of U. P. v. Ram Kishore — 1963 DIGILAW 310 (ALL)

JUDGMENT D.P. Uniyal, J. - This is an appeal by the State of Uttar Pradesh in a case in which one Ram Kishore was convicted under Sections 78 and 79 of the Trade and Merchandise Marks Act, 1958 (herein after called the Act) by a 1st Class Magistrate of Varanasi, but was acquitted by the Sessions Judge on the ground that the prosecution was barred by limitation and acquiescence. 2. The firm of M/s. Nanduram Khedan Lal (hereinafter referred to as the complainant firm) are the proprietors of the `Titlee' brand trade mark in respect of chewing tobacco manufactured and sold by them. The word `Titlee' was registered as a trade name or mark on 12-5-1952 for the chewing tobacco manufactured by the complainant firm. The device containing pictures of butterflies and labels with which their goods were packed was also similarly registered to identify the goods manufactured by the complainant firm. In the city of Varanasi there was another firm of the name of Laxmi Vilas Karyalaya (hereinafter described as the respondent firm) which carried on business of selling chewing tobacco under the name of 'Titlee' which is a pet bird. The name and mark of the respondent firm were not registered. On 24-11-1960 Vishwakant Mittal, Inspector, I. T. M., came to know that the respondent firm was manufacturing and selling chewing tobacco under the false trade mark of the complainant firm. He made a report (Ex. Ka-1) on the same day to the Sub-Divisional Magistrate, Varanasi alleging the use of counterfeit trade mark by the respondent firm and prayed that suitable action be taken in the matter. The Magistrate passed an order directing the Station Officer, Chetganj, Varanasi to investigate the case. During the search of the shop of the respondent firm conducted by the police a number of labels of big and small size bearing marks similar to those of the complainant's trade mark were recovered. Several wrappers containing devices similar to those of the complainant's trade mark were also found in the shop of the respondent. The respondent was thereupon prosecuted under Section 78 (falsifying the trade mark of the complainant firm and falsely applying to his goods the said trade mark), as also under Section 79 of the Act (selling goods to which a false trade mark is applied). 3. The respondent was thereupon prosecuted under Section 78 (falsifying the trade mark of the complainant firm and falsely applying to his goods the said trade mark), as also under Section 79 of the Act (selling goods to which a false trade mark is applied). 3. The accused-respondent denied the prosecution allegations and claimed that the label bearing the word `Titil' was his own trade mark which had been in use since two decades. He asserted that in the year 1955 the complainant firm had sent him a notice alleging infringement of their trade mark to which he replied that he had never used `Titlee' trade mark and that his goods with the trade mark `Titil' had been introduced into the market long before the goods of the complainant came to be manufactured and sold with the trade mark `Titlee'. It was said that the present complaint was barred by Section 92 of the Act as the same had been filed long after three years of the alleged infringement of the complainant's trade mark. The respondent further stated that as the complainant did not take any action against the respondent firm in respect of the alleged infringement within 3 years from 1955 when he acquired knowledge of the alleged infringement and allowed the respondent's goods to be sold in the market without any protest, the complaint was also barred by the principle of acquiescence. The prosecution case was that the respondent had put his goods in the market in such packages as to pass them off as of the complainant's manufacture and that this was calculated to lead purchasers to believe that they were purchasing the complainant's goods. A comparison of the respective trade marks used by the complainant and the accused would go to show that the trade mark under which the complainant's goods are produced and sold was `Titlee', i.e. a butterfly. The device used on the complainant's goods consisted of three pictures of butterflies, whereas on the goods of the respondent firm the device used was of four butterflies. The colour on the labels or get up of the complainant's firm was yellow-green, whereas the colour of the labels of the respondent firm was leaf-green. The colour of both the sets of butterflies was similar. The colour on the labels or get up of the complainant's firm was yellow-green, whereas the colour of the labels of the respondent firm was leaf-green. The colour of both the sets of butterflies was similar. One thing which may be noticed at this stage is that although the respondent used the trade mark 'Titil' on his goods the device contained pictures of butterflies and not of birds. 4. Looking at the two trade marks one cannot but see that there is strong general resemblance between them, and especially to the eyes of the people who cannot easily distinguish between `Titlee' and `Titil', considering that both the labels have similar colour scheme with pictures of butterflies on them. The imitation by the respondent of the complainant's genuine trade mark is such as to pass of the respondent's goods as the complainant's. 5. Now the only difference which strikes one is this that the respondent has substituted the word 'Titil' for the word 'Titlee' on the wrappers in which his goods are packed. That is the whole difference that catches the eye. When you look at the resemblances between the paper, the printing, the colour scheme and the picture of butterflies on the wrappers, you cannot but conclude that the trade mark used by the respondent is an imitation of the complainant's trade mark. When you look at the whole thing it is impossible not to arrive at the conclusion that the one was intended to pass off for the other. In Corn Products Refining Co. v. Shangrila Food Products Ltd., A.I.R. 1960 S.C. 142, it was pointed out that "in deciding the question of similarity between the two marks the matter has to be approached from the point of view of a man of average intelligence and of imperfect recollection. To such a man the overall structural and phonetic similarity and the similarity of the idea in the two marks is reasonably likely to cause a confusion between them." In Hackla Foundry Co. To such a man the overall structural and phonetic similarity and the similarity of the idea in the two marks is reasonably likely to cause a confusion between them." In Hackla Foundry Co. v. Walker Hunter and Co., (1889) 14 A.C. 550 Lord Herschel at page 555 observed as follows :- "The eye must be the judge in such a case as this and the question must be determined by placing the designs side by side and asking whether they are the same or whether the one is an obvious imitation of the other." The same learned judge pointed out in John Harper and Co. Ltd. v. Wright and Butler, Ltd., (1896) 1 C.D. 142 at 147 "Difference in detail do not prevent the two designs being essentially the same." To the same effect are the observations of Lord Selbourne in Single Manufacturing Co. v. Long, (1882) 8 A.C. 15 that : "The imitation of a man's trade mark in a manner likely to mislead the unwary cannot be justified by saying that a person who carefully and intelligently examined and studied it might not be misled." 6. By putting the two trade marks side by side and comparing their name, device and get up there can be no manner of doubt that the respondent's trade mark is a colourable imitation of the complainant's trade mark and is reasonably likely to mislead an ordinary purchaser who would not be likely to notice the differences or attach importance to them. We, therefore, hold that the respondent had marked his goods in a manner reasonably calculated to deceive an unwary purchaser and to cause him to believe that the goods are the manufacture or merchandise of the complainant's firm. 7. The learned Sessions Judge held that the complaint was barred under Section 92 of the Act as the prosecution in respect of the offence was not commenced before the expiration of 3 years from the commission of the offence and 2 years from the discovery thereof. 7. The learned Sessions Judge held that the complaint was barred under Section 92 of the Act as the prosecution in respect of the offence was not commenced before the expiration of 3 years from the commission of the offence and 2 years from the discovery thereof. Section 92 reads thus: "No prosecution for an offence under this Act shall be commenced after the expiration of 3 years next after the commission of the offence charged, or 2 years after the discovery thereof by the prosecutor, whichever expiration first happens." The case of the accused was that the infringement of the trade mark had been discovered as far back as 1955 by the complainant, but no action had been taken for the alleged infringement of the trade mark by the complainant within 3 years of the discovery of the offence charged, and consequently the present complaint was beyond time. If this interpretation of Section 92 were accepted the court would have to try whether the act of 1955 amounted to an infringement or not. All that emerged from the evidence was that the respondent had sold his goods under the name of `Titil' in 1955 and the complainant had protested against the respondent's use of the said trade mark, but it has not been shown whether the sale of goods by the respondent was in such circumstances as to lead to deception, that is, as to pass off the respondent's goods as the complainant's goods. A similar question arose before the Bombay High Court in Emp. v. Chhota Lals, ILR 1937 Bom. 183. In that case Beaumont, C. J. pointed out the practical difficulty in determining whether there had been a prior infringement. The learned Chief Justice observed as follows:- "For example, where a prosecution is launched in respect of an offence which took place in 1935, and the defence is that a similar infringement took place in 1931 and has continued ever since, the court would have to try whether the act of 1931 amounted to an infringement or not........Now dishonest traders who are minded to take for themselves the reputation of a rival trader very often proceed to their object by progressive stages. They start with a make up which has points of dissimilarity from the rival maker and, if they are not attacked, they gradually approach nearer to the make up of the rival; and a Magistrate might well find himself compelled to try, first of all, whether the infringement alleged by the accused, in say 1931, amounted to an infringement, and if not, whether on different evidence there was infringement in 1932 or in 1933, and so on. The court might have to try a succession, in effect, of passing off claims, each one based on different evidence. Furthermore, I feel great difficulty in supposing that the Legislature intended to confer upon a person a prescriptive right to commit an offence made criminal under the Act." The Full Bench in that case was considering the question whether the prosecution was barred by Section 15 of the Merchandise Marks Act, 1889. On the language of that section it was held that the words `commission of the offence' meant commission of the "offence charged" and that the limitation for the prosecution in respect of such offences was from the date on which the particular offence charged was committed. Their Lordships held that the view of the section taken by the Calcutta High Court in Nagendranath Shaha v. Emp., ILR 57 Cal. 1153 was in consonance with the provisions of the Act. In Bhrigu Nadi v. Ram Narain Lal, AIR 1959 Pat. 554 the Patna High Court adopted the view of the Bombay High Court and held that there was preponderance of authority in favour of the view expressed in Emp. v. Chhota Lal Amarchand, ILR 1937 Bom. 183. The same view was adopted in Akhoy Kumar De v. Emp, AIR 1928 Cal 495 Nagendranath v. Emp., AIR 1930 Cal. 274 Mohammad Kasim v. Sheikh Thumby, AIR 1940 Rang. 114 and Sirumal v. Emp, AIR 1932 Sind 94. It was held that the words 'commission of the offence' in Section 15 of the Merchandise Marks Act meant commission of the offence in respect of which a prosecution is launched, that is to say, commission of the offence charged. In the instant case the respondent was prosecuted in respect of an offence discovered by the prosecutor (Inspector, I. T. M.) in 1960 and, therefore, the complaint was well within 2 years of the offence charged. In the instant case the respondent was prosecuted in respect of an offence discovered by the prosecutor (Inspector, I. T. M.) in 1960 and, therefore, the complaint was well within 2 years of the offence charged. The learned Judge, in our opinion, was clearly in error in holding that the complaint was barred by time. 8. Another objection raised by the respondent was that the complaint was barred by the principle of acquiescence, which according to him amounted to "assent" within the meaning of Section 77(1) (a) and (2) (a) of the Act. It was said that in 1955 the complainant had come to know of the fraudulent use by the respondent of the complainant's trade mark and there was an exchange of notices between them in regard to that matter, but in spite of it the complainant took no action against the respondent and allowed him to continue the manufacture and sale of his goods under the trademark and label which, according to the prosecution, amounted to falsifying a genuine trade mark. In this connection it is worthy of note that in his reply the respondent did not admit that he had counterfeited the complainant's trade mark. On the other hand, he denied the use of any counterfeit trademark resembling that of the complainant. The statement of Kanhaiya Lal Shukla, who was Manager of the complainant firm, was to the effect that originally the respondent carried on business under the name and style of Vishnath Singh Ram Kishore. This firm was dissolved and in its place a new firm by the name of Laxmi Bilas Karyalaya was formed some 2 years before 1961. The evidence of Kanhaiya Lal Shukla disclosed that the respondent Ram Kishore approached him and enquired whether he would object to the respondent starting a new firm under the name and style of Laxmi Bilas Karyalaya with the object of selling chewing tobacco. The fact that the respondent asked the complainant's Manager about his starting a new firm would create an impression in the mind of the latter that the respondent believed that he (the complainant's Manager) had some veto in the matter. This circumstance clearly goes to show that the respondent was under no mistake about the complainant's rights in the trade mark and wanted to impress that by starting a new business he did not intend to infringe the complainant's trade mark. This circumstance clearly goes to show that the respondent was under no mistake about the complainant's rights in the trade mark and wanted to impress that by starting a new business he did not intend to infringe the complainant's trade mark. These facts, to our minds, point to the conclusion that the complainant had not acquiesced in the use of his trade mark by the respondent. 9. Mr. C. S. Saran, the learned counsel for the respondent, strenuously urged that the act of the complainant in lying by when he first came to discover about the alleged infringement of his trade mark by the respondent in 1955 amounted to acquiescence which ripened into "assent" when he allowed the respondent to develop his business and encouraged him in the expenditure of money in his trade. Sec. 77 of the Act, so far as it is material, runs as follows: "(1) A person shall be deemed to falsify a trade mark who either:- (a) without the assent of the proprietor of the trade mark makes that trade mark or a deceptively similar mark (2) A person shall be deemed to falsely apply to goods a trade mark who, without the assent of the proprietor of the trade mark- (a) applies such trade mark or deceptively similar mark to goods or any package containing goods. (3) ...... (4) In any prosecution for falsifying a trade mark or falsely applying a trade mark to goods, the burden of proving the assent of the proprietor shall lie on the accused." The only witness examined on behalf of the respondent was Mangala Prasad D. W. 1. He stated that Ram Kishore respondent used to sell his tobacco with the trade mark `Titil' and that the said business had been carried on by the respondent for the last 15 to 20 years. He admitted that the mark `Titil' used on the label of the respondent's goods meant a bird, whereas the trade mark `Titlee' used by the complainant indicated an insect, i.e., a butterfly. There was no evidence on behalf of the defence that the complainant had, at any time, "assented" to the use of his trade mark by the respondent. The onus which lay on the respondent to prove the assent of the proprietor in respect of the sale of the respondent's goods under the false trade mark of the complainant had not been discharged. 10. The onus which lay on the respondent to prove the assent of the proprietor in respect of the sale of the respondent's goods under the false trade mark of the complainant had not been discharged. 10. The learned counsel strongly relied on Wilmott v. Barber, (1880) 15 Ch. D. 96 for the proposition that the complainant had acted in such a way as would make it fraudulent for him to set up rights based on his registered trade mark. That was a civil action brought by one Wilmott for specific performance on the allegation that in 1869 he was the proprietor of a saw mill and premises adjoining the land owned by one Bowyer. The adjoining piece of land had been leased out by Bowyer to one John Barber in 1869. The lease contained a convent prohibiting the lessee from assigning any part of the demised premises without the written permission of the lessor. John Barber without obtaining the consent of the lessor Bowyer assigned in 1874 1 acre of the said land to the plaintiff Wilmott who was let into possession. In the agreement there was a proviso for option to purchase the land leased out to Wilmott. Wilmott spent a considerable sum of money in raising the level of the land and converting it into a timber yard. In 1877 John Barber surrendered the lease without the knowledge of Wilmott and Bowyer granted him a new lease of the same premises at an increased rent. The same year Wilmott gave notice to John Barber of his intention to exercise the option of purchase. John Barber expressed inability to do so without the licence of Bowyer and said that Bowyer refused to grant the licence. Wilmott then filed a suit and impleaded Bowyer as a defendant along with John Barber. One of the pleas raised was that Bowyer had acquiesced in the letting of the premises by John Barber to Wilmott and in allowing Barber to spend considerable sums of money in the improvement of the land. It was, therefore, asserted that there was acquiescence on the part of Bowyer which amounted to assent in respect of the transfer of the premises by John Barber to the plaintiff. It was, therefore, asserted that there was acquiescence on the part of Bowyer which amounted to assent in respect of the transfer of the premises by John Barber to the plaintiff. Fry, J., after stating the facts and considering the law, said:- "It has been said that the acquiescence which will deprive a man of his legal rights must amount to fraud, and in my view that is an abbreviated statement of a very true proposition. A man is not to be deprived of his legal rights unless he has acted in such a way as would make it fraudulent for him to set up those rights. What, then, are the elements or requisites necessary to constitute fraud of that description? In the first place the plaintiff must have made a mistake as to his legal rights. Secondly, the plaintiff must have expended some money or must have done some act (not necessarily upon the defendant's land) on the faith of his mistaken belief. Thirdly, the defendant, the possessor of the legal right, must know of the existence of his own right which is inconsistent with the right claimed by the plaintiff. If he does not know of it he is in the same position as the plaintiff, and the doctrine of acquiescence is founded upon conduct with a knowledge of your legal rights. Fourthly, the defendant, the possessor of the legal right, must know of the plaintiff's mistaken belief of his rights. If he does not, there is nothing which calls upon him to assert his own rights. Lastly, the defendant, the possessor of the legal right, must have encouraged the plaintiff in his expenditure of money or in the other acts which he has done, either directly or by abstaining from asserting his legal right. Where all these elements exist, there is fraud of such a nature as will entitle the Court to restrain the possessor of the legal right from exercising it, but, in my judgment, nothing short of this will do." 11. Now it will be seen that the first, second, fourth and fifth elements which go to constitute fraud according to the above ruling are wanting in the present case. Now it will be seen that the first, second, fourth and fifth elements which go to constitute fraud according to the above ruling are wanting in the present case. It is not the respondent's case that he was under a mistake about his legal rights or that he had expended money on his business on the faith of that mistaken belief, nor that the complainant knew that the respondent was acting under a mistaken belief of his supposed rights, nor that the complainant had ever induced or encouraged the respondent to spend money in expanding his business by causing it to be believed that the use of the complainant's trade mark by the respondent was not fraudulent. Far from supporting the respondent's contention, the case of Wilmott v. Barber, (1880) 15 Ch. D. 96 goes to show that in order that acquiescence may amount to assent there must be positive and clear evidence to prove that the possessor of the legal right had, by his actions and conduct, given up his rights in favour of the respondent. The evidence in the case did not show that there was any acquiescence on the part of the complainant in respect of the infringement of his trade mark by the respondent. It would be no excuse for the respondent to say that he did not know that the use of a similar mark or device by him amounted to infringement of the complaint's trade mark. The law does not require that the owner of the trade mark should warn persons that what they are doing is an infringement. Any person who employs a counterfeit mark or passes of the goods of another fraudulently cannot be heard to say that since the true owner of the trade mark did not take action against the alleged infringement he is served from prosecution for all time. The learned Sessions Judge failed to appreciate that the respondent had not been able to discharge the burden which lay on him to prove that there was assent on the part of the complaint the proprietor of the trade mark, to Permit the respondent to imitate the complainant's trade mark or to apply to goods the trade mark owned by the complaint. Under these circumstances we feel that the prosecution had satisfactory proved the charge against the respondent. 12. Under these circumstances we feel that the prosecution had satisfactory proved the charge against the respondent. 12. We, therefore, allow this appeal and set aside order of acquittal dated 29-1-1962 passed by the learned Session Judge and restore the order of the Sub-divisional Magistrate Varanasi dated 25-5-1961 convicting the respondent under Sections 78 and 79 of the Trade and Merchandise Marks Act. The respondent is sentenced to a fine of Rs. 1,000/- under each count. In default of payment of fine he shall undergo 3 months simple imprisonment.