R. DAYAL, J. ( 1 ) BY this revision petition, the petitioner, I. T. C. Limited, a company registered under the Indian Companies Act, 1956, has challenged the order dated 1-5-1991 of shri T. Dorjee, the learned District Judge, Sikkim, rejecting the petitioner's application in Civil Suit No. 1 of 1991, under Order VII Rule 11 of the Code of Civil Procedure, for rejecting the plaint on the grounds that the plaint does not disclose any cause of action and the suit is barred by law. ( 2 ) CIVIL Suit No. 1 of 1991 was filed by respondent Nos. 1 to 3 on 21-1-1991. Respondent No. 4 Druk Industrial Company Pvt. Ltd. , is the first defendant and the petitioner company (hereinafter referred as ITC) is the second defendant in the suit. The plaintiffs have claimed the following substantive reliefs :-" (A) a decree of declaration be passed in favour of the plaintiffs and against the Defendants declaring that the Defendants are not entitled to use the aforesaid Foreign Brand name and/or endorsement of "w. D. and H. O. Wills and/or "wills" on the cigarettes packets and cartons manufactured sold and advertised by the Defendant No. 2 through Defendant No. 1 and/or their other Dealers, Agents etc. (B) a perpetual injunction be issued restraining the defendants their employees, servants, agents and dealers and/or assigns from producing and/or manufacturing and/or marketing and/or advertising and dealing with the cigarettes packets and cartons having an endorsement and/or brand name of "w. D. and H. O. Wills" and/or "wills". The allegations made in the plaint for claiming these reliefs may be summarised as under :- (I) The plaintiffs are the residents of Sikkim and are smokers or users of cigarettes and have knowledge and experience of various brands of cigarettes, their brand names and quality and have filed the suit as members of the public to prevent the defendants wrongful action constituting unfair trade practice affecting a large section of the public who are habitual smokers and who have been and continue to be deceived by the action of the defendants; (II) The suit is also in the nature of a public interest litigation to stop the perpetuation of fraud and misrepresentation being committed by the defendants; (III) Defendant No. 2, ITC produces and markets various brands of cigarettes containing the endorsement - "w. D. and H. O. Wills" and/or "wills".
The list of the various brands of cigarettes manufactured by defendant No. 2 has been annexed as annexure "i" and photostat copy of some of the packings of Wills cigarettes sold and distributed by the defendants has been annexed as annexure "ii" to the plaint : (IV) W. D. and H. O. Wills were two foreigners who are the original founders of the well known Wills' tobacco. The endorsement "w. D. and H. O. Wills" and/or "wills" therefore, represents the said original manufacturers of the brand name in U. K. and the said name was registered as trade mark by the Imperial Tobacco Company and British American Tobacco. The founders of the said brand name do not have any manufacturing activity in India and do not have any connection with ITC. The British companies who are selling the cigarettes with this endorsement do not manufacture or sell or advertise their cigarettes in India nor do they have any agent in India, but the ITC, by their advertising campaign is openly and blatantly misleading the general public by creating a false impression that the cigarettes manufactured and sold by it are either of foreign make or are manufactured and sold in collaboration with the aforesaid foreign companies with whom the brand name "w. D. and H. O. Wills" and/or "wills" is associated; (V) The use of the aforesaid endorsement on the cigarette packets is suggestive of the fact that the cigarattes being sold in the packets carrying this endorsement are being manufactured or sold by the aforesaid foreign companies. The defendants are not in any way acting as an agent of the said foreign companies and the cigarettes sold by them have no foreign content and are being manufactured, sold and distributed entirely in India. This is clearly deceptive and misleading and is injurious to public interest, and the defendants are passing off their cigarettes as those manufactured in India by these British companies.
This is clearly deceptive and misleading and is injurious to public interest, and the defendants are passing off their cigarettes as those manufactured in India by these British companies. Alternatively, the endorsement made on the Wills cigarette packings manufactured by ITC suggests and creates an impression upon the minds of the consumers that all the brands of Wills cigarettes manufactured and sold by it are products, being sold in collaboration or association with the aforesaid foreign companies; (VI) There is a widely prevalent affinity and a desire in the general consumers in India to go for goods of foreign make or made with foreign association and as such by using the aforesaid endorsement, the members of the public such as the plaintiffs get misled, deceived and buy the products of ITC under the impression that these are the goods of foreign origin and/or manufactured and sold in collaboration with the foreign manufacturers; (VII) The quality of the Wills brand cigarettes manufactured and sold by the defendants is not similar or comparable to the quality of the cigarettes manufactured by "w. D. and H. O. Wills"; (VIII) The activities of ITC in manufacturing, selling and advertising its products under cover of the foreign brand name is misleading, deceptive and amounts to fraud and misrepresentation with intention to deceive the public, with a view to enhancing its sales; (IX) The activities of ITC are also contrary to and inconsistent with the guidelines for industrial policy laid down by the Government of India, Ministry of Industry, Department of Industrial Development, New Delhi, part I of chapter IV whereof provides that the use of foreign brand names will not be permitted for internal sales ; (X) The aforesaid endorsement also amounts to unfair trade practice within the meaning of Section 36-A (1) (iv) and (v) of the Monopolies and Restrictive Trade Practices Act, 1969 in as much as the said endorsement creates an impression that the wills brand cigarettes, manufactured and sold by ITC has either the approval or the characteristics of the original foreign brand cigarettes and/or that the said cigarettes are being manufactured and sold with the approval and affiliation of the foreign companies using the aforesaid brand name which is false to the knowledge of ITC; (XI) The said unfair trade practice is also a public nuisance and also amounts to wrongful action on the part of ITC; (XII) The cigarettes bearing the brand name "wills Kings" are also sold in Pakistan and Sri Lanka etc.
There, the packets clearly state that the said cigarettes have been made in Pakistan by the successors to W. D. and H. O. Wills, Bristol and London but the ITC in the present case does not write any such thing on the Wills cigarette packets, manufactured and sold by it; (XIII) Defendant No. 1 is carrying on business in Sikkim as dealer of ITC. (xiv) If the defendants are not restrained from using the said endorsement on the various Wills brand of cigarettes manufactured and sold by ITC, the general public including the plaintiffs will suffer and will continue to be deceived by the defendants; (XV) The acts of ITC are contrary to public interest and national interest, since they enhance the use of the products which are gravely deleterious to public health, public well being and public welfare as the Court can take judicial notice of the fact that smoking is injurious to health; (XVI) Cause of action for filing this suit arose when the plaintiffs recently learnt that W. D. and H. O. Wills are not the collaborators of ITC for the manufacture of Wills brand cigarettes produced and marked by ITC. ( 3 ) ON 19-2-1991, ITC moved an application under Order VII, Rule 11 of the Code of Civil Procedure, alleging therein that the averments made in the body of the plaint and the reliefs claimed by the plaintiffs do not disclose any cause of action and only an illusion of a cause of action has been created by making fake and untrue statements, and further that the suit is barred by law and is not maintainable. It is also stated that the Head Office of ITC is situated at 37, Chowringhee, calcutta and it has no office establishment- or representatives and does net carry on business within the State of Sikkim and the goods manufactured by it at various factories and establishments are purchased by Druk Investment Company, defendant No. 1, on a principal to principal basis, and thereafter distributed in the State of Sikkim pursuant to certain orders of the Government of Sikkim. ( 4 ) ON 25-3-1991, the learned Trial Court framed the following two issues :-1. Whether the plaint discloses any cause of action, if not, whether the same is liable to be rejected?2.
( 4 ) ON 25-3-1991, the learned Trial Court framed the following two issues :-1. Whether the plaint discloses any cause of action, if not, whether the same is liable to be rejected?2. Whether this Court has no jurisdiction to try and entertain the said suit as alleged by the defendant No. 2?"on that date, the learned counsel for ITC pressed for taking up the application under Order VII Rule 11 prior to hearing on the injunction matter. On the other hand, the learned counsel for the plaintiffs urged that the injunction application should be heared and disposed of first. After considering the submissions of both sides, the learned Trial Judge recorded his view that "these two issues should be heard and decided first", as the same raised important questions of law. However, he disposed of the application for temporary injunction, granting injunction as also application under Order VII Rule 11 by one composite order on 1-5-1991, but without deciding the issue as to territorial jurisdiction. He said that the issue as to territorial jurisdiction is a mixed question of fact and law which can be decided only after evidence. ( 5 ) THE learned Trial Judge rejected the application under Order VII Rule 11, giving rise to this Revision. Along with this Revision were also posted for hearing two Civil Misc. Appeal Nos. 1 and 2 of the 1991 which arose from the order of temporary injunction made by the learned District Judge in the same suit. Another Revision. (Revision No. 7/ 91) which arose from similar order under Order VII Rule 11 CPC in another suit (No. 2/91) filed for substantially similar reliefs against the same defendants but by a different set of plaintiffs and one Civil Misc. Appeal (No. 3 / 91) which arose from the order of temporary injunction passed in that suit and also one other Revision (8/91) which ITC filed against the order rejecting its prayer for revocation of the leave granted under Order I Rule 8 CPC, in that suit were also posted for hearing. At first, hearing of the present Revision was taken up along with the other Revision arising from similar order. The Revision was argued by Shri Ashok Desai, senior advocate, on behalf of ITC and Dr. Shankar Ghosh, senior advocate, on behalf of the plaintiffs, for a number of days with extra-ordinary throughness.
At first, hearing of the present Revision was taken up along with the other Revision arising from similar order. The Revision was argued by Shri Ashok Desai, senior advocate, on behalf of ITC and Dr. Shankar Ghosh, senior advocate, on behalf of the plaintiffs, for a number of days with extra-ordinary throughness. After concluding arguments in the Revision and, in fact, in continuation thereof, on 22-8-1991. Mr. Desai urged the Court to postpone the hearing in the Civil Misc. appeals till the decision of the Revision saying that he would like to go through the judgment of the Revision before proceeding further, and if the Revision was allowed, the hearing on the appeals would be a futile exercise extending over a number of days. He also submitted that the manner in which the learned District Judge had proceeded, had vitiated the injunction order from which the Misc. Appeals had arisen. It is on record that the Learned District Judge had ordered on 25-3-1991 that the two issues framed by him on that date which included the issue as to territorial jurisdiction would be heard and decided first, and, yet he proceeded to dispose of the application for injunction, without deciding that issue. At no time, he had recalled that order. According to Mr. Desai, this affected the validity of the order. Affidavits and counter-affidavits were filed in this regard. Dr. Ghosh opposed Mr. Desai and pressed that the matter should be heard in continuation. However, after arguments were concluded in the Revision, I came to the conclusion that the impugned order could not be sustained. Accordingly, I pronounced the order allowing the Revision with reasons to follow. That order is reproduced at the end of the judgment. I now proceed to record my reasons for the order. ( 6 ) MR. Desai has urged the following points in support of the Revision: (A) The plaintiffs have not made necessary averments in the plaint to disclose cause of action on any of the various counts on which reliefs are claimed by them, viz. , deceit, passing off, unfair trade practice, violation of the guidelines for Industrial policy laid down by the Government of India, public nuisance and wrongful action by the ITC.
, deceit, passing off, unfair trade practice, violation of the guidelines for Industrial policy laid down by the Government of India, public nuisance and wrongful action by the ITC. (b) The suit is barred by Sections 34 and 41 of the Specific Relief Act, 1963; (c) The impugned judgment is vitiated by illegality for the following reasons : (i) The learned District Judge did not consider the relevant law and the arguments advanced by ITC; (ii) The impugned judgment does not show how the plaint discloses cause of action; though the Learned District Judge has stated that the plaintiffs have made allegations of serious nature, he has not spelled out how any allegation constitutes any cause of action; the judgment is based on no intelligible reasons; the so-called reasons being a mere pretence of reasons; (iii) The learned District Judge relied on material outside the plaint. He relied upon a xerox copy of a letter from M/s. Fox and Gibbons, solicitors, to a Malayasian oil company to come to the conclusion that the mark "w. C. and H. O. Wills" is still registered in the names of the two English companies, even when it was not referred to in the plaint and its genuineness was under challenge; (iv) The learned District Judge sought to create a wrong impression that the conclusion recorded by him was in accord with the decision of the Hon'ble Supreme Court in the Special Leave Petition which had been filed by ITC against the ex parte order of injunction granted by him, even when it was not possible for anyone to get that impression, thus betraying a complete lack of judicial approach. ( 7 ) ON the other hand, Dr. Ghosh has attempted to support the impugned judgment. ( 8 ) ORDER VII, Rule 11 mandates that the plaint shall be rejected in the four kinds of cases specified in clauses (a) to (d) thereof. For the present case, only clauses (a) and (d) are relevant. These are reproduced as under :"11. Rejection of plaint.-The plaint shall be rejected in the following cases : (a) where it does not disclose a cause of action; (b) and (c ). . . . . . . . . . . . . . .
For the present case, only clauses (a) and (d) are relevant. These are reproduced as under :"11. Rejection of plaint.-The plaint shall be rejected in the following cases : (a) where it does not disclose a cause of action; (b) and (c ). . . . . . . . . . . . . . . (d) where the suit appears from the statement in the plaint to be barred by any law; ( 9 ) AS pointed out in Jagannath v. Smt. Chandrawati, AIR 1970 All 309 (FB), there is a clear distinction between a case where the plaint itself does not disclose any cause of action and a case in which, after the parties have produced oral and documentary evidence, the Court, on consideration of the entire material on record, comes to the conclusion that there was no cause of action for the suit. In the latter case, obviously the plaint cannot be rejected under Order VII, Rule 11, C. P. C. The question whether the plaint does not disclose cause of action, has to be determined from the pleadings of the plaintiff alone. If the plaint is vague, the Court should clear, the vagueness by examining the plaintiff under Order X, Rule 2, C. P. C. As pointed out by the Privy Council in Mohammad Khalil Khan v. Mahbub Ali Mian, AIR 1949 PC 78, the phrase "cause of action" has not been defined in any enactment, but the meaning of it has been judicially considered in various decisions. 'cause of action' means the whole bundle of material facts which are necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. Therefore, where the defendant claims that the plaint does not disclose cause of action, it is necessary for the court to scrutinise the plaint in order to find whether the plaintiff has averred all the necessary allegations which, if traversed, are necessary to be proved by him to entitle him to relief. At the same time, if the plaintiff pleads more than one cause of action and he is able to show that decree could be passed for the relief or a part of the relief claimed on any of the several causes of action, the plaint cannot be rejected.
At the same time, if the plaintiff pleads more than one cause of action and he is able to show that decree could be passed for the relief or a part of the relief claimed on any of the several causes of action, the plaint cannot be rejected. The plaint has to be rejected only where it does not disclose any cause of action whatsoever, and he is to be wholly non-suited. Further, the plaint should be read not in a formal manner but with a view to get at the substance of the matter. The Hon'ble Supreme Court pointed out in T. Arivandandam v. T. V. Satyapal, AIR 1977 SC 2421, that the Court should exercise the power under Order VII, Rule 11, C. P. C. "if on a meaningful - not formal - reading of the plaint it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue", taking care to see that the ground mentioned therein is fulfilled. And, if clever drafting has created the illusion of a cause of action, the Court should nip it in the bud at the first hearing by examining the party searchingly under Order X, C. P. C. A meaningful reading of the plaint means that the plaintiff merely by a camouflage cannot maintain a suit, if according to the substance of the allegations made in the plaint, no cause of action is disclosed. While dealing with the question of the bar of limitation in a suit, the Hon'ble Supreme Court pointed out in Janakirama Iyer v. Nilakanta Iyer, AIR 1962 SC 633 in paragraph 12 that in construing the plaint, the Court "must have regard to all the relevant allegations made in the plaint and must look at the substance of the matter and not its form. " The same principle would, obviously, apply while construing the plaint for the purpose of Order VII, Rule 11.
" The same principle would, obviously, apply while construing the plaint for the purpose of Order VII, Rule 11. Again, while construing the plaint of a particular case to see whether the civil court had the jurisdiction, the Supreme Court in Abdulla Bin Ali v. Galappa, AIR 1985 SC 577, applied the same principle and construed the plaint to find the substance and not in a formal manner and observed in paragraph 6 that even though the plaintiffs in that case "had alleged that the defendant No. 2 was a tenant but on the denial of the tenancy and the title of the plaintiffs-appellants they filed a suit treating the defendant to be a trespasser and a suit against a trespasser would lie only in the civil Court and not in the revenue Court" and held that the civil Court had the jurisdiction. It is in the light of this legal position that the plaint has to be scrutinised to find whether the plaintiffs have pleaded all the material allegations which it was necessary for them to prove, if traversed, in order to entitle them to any of the reliefs claimed. ( 10 ) ONE of the causes of action on which the plaintiffs claim relief is deceit. As per Halsbury's Laws of England, fourth edition (volume 31), an action of deceit is maintainable at the suit of the representee for damages in respect of fraudulent misrepresentation and is founded in tort. In such an action, the burden is on the representee of alleging and proving the following matters :" (1) that the alleged representation consisted of something said, written or done which amounts in law to a representation; (2) that the defendant was the representator; (3) that the plaintiff was the representee; (4) that the representation was false; (5) inducement and materiality; (6) alteration of position; (7) fraud; and (8) damage. " the only damage which the law recognises is actual and temporal injury, that is, some loss of money or money's worth, or some tangible detriment capable of being quantified and assessed. "it does not include mental distress, unless accompanied by physical effects. " "it is also necessary for the representee to establish a causal connection, as distinct from a relation of mere sequence and succession, between the damage and misrepresentation.
"it does not include mental distress, unless accompanied by physical effects. " "it is also necessary for the representee to establish a causal connection, as distinct from a relation of mere sequence and succession, between the damage and misrepresentation. The damage must be shown to have been a natural and direct result of the misrepresentation being believed and acted on or, where the representee is induced by fraudulent misrepresentation to believe a certain state of things to exist, of the representation being believed. Where this connection is not made out, then, even if he proves that he did in fact sustain the damage alleged by reason of his belief in the truth of the misrepresentation, the representee will not succeed in the action; but, where it is made out, he will succeed. " ( 11 ) ACCORDING to Salmond and Heuston on the Law of Torts (nineteenth edition), the "tort of deceit consists in the act of making a wilfully false statement with the intent that the plaintiff shall act in reliance on it, and with the result that he does so act and suffers harm in consequence. According to this authority, there are four main elements in this tort :" (1) there must be a false representation of fact; (2) the representation must be made with knowledge of its falsity; (3) it must be made with the intention that it should be acted on by the plaintiff, or by a class of persons which includes the plaintiff, in the manner which resulted in damage to him; (4) it must be proved that the plaintiff has acted upon the false statement, and has sustained damage by so doing. " it is further stated that a false statement is not actionable in deceit unless it is wilfully false. A reference has been made to the decision of the House of Lords in Derry v. Peek, (1889) 14 App Cas 337, where "the directors of a tramway company which had authority to use steam power with the consent of the Board of Trade, believing honestly but unreasonably, that his consent would be given as a matter of course, issued a prospectus in which it was stated that they had the right to use steam power without reference to any condition. In reliance on this statement the plaintiff took, shares in the company.
In reliance on this statement the plaintiff took, shares in the company. The promoters were held not liable in damages, on the ground that there was no proof that the error was fraudulent. " This authority emphasises that no action will lie for a false statement unless the plaintiff did in fact rely and act upon it. ( 12 ) THUS, in an action of deceit, the plaintiff must allege the following facts :1. The defendant made a false representation; 2. The defendant made it fraudulently, that is, knowing it to be false or not knowing it to be true; 3. The defendant made it with the intent that the plaintiff should act on it; 4. The plaintiff acted on it; and 5. The plaintiff by acting on it, sustained damage. Misrepresentation and fraud are the two essential ingredients of an action of deceit. Order VI, Rule 4 of the Code of Civil Procedure says that in all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default, or undue influence, and in all other cases in which particulars may be necessary, particulars (with dates and items if necessary) shall be stated in the pleading. In the House of Lords' decision in "dow Hager Lawrance v. Lord Norreys, (1890) 15 App Cas 210, Lord Watson referred to the observations of Earl Selborne in Wallingford v. Mutual Society, (1880) 5 App Cas 685 (697) : "general allegations, however strong may be the words in which they are stated, are insufficient to amount to an averment of fraud of which any Court ought to take notice;" and further observed "it is not a sufficient compliance with the rule to state facts and circumstances which merely imply that the defendant, or some one for whose action he is responsible, did commit a fraud of some kind. There must be a probable, if not necessary, connection between the fraud averred and the injurious consequences which the plaintiff attributes to it; and if that connection is not sufficiently apparent from the particulars stated, it cannot be supplied by general averments. Facts and circumstances must in that case be set forth, and in every genuine claim are capable of being stated, leading to a reasonable inference that the fraud and the injuries complained of stood to each other in the relation of cause and effect.
Facts and circumstances must in that case be set forth, and in every genuine claim are capable of being stated, leading to a reasonable inference that the fraud and the injuries complained of stood to each other in the relation of cause and effect. "the Hon'ble Supreme Court observed in Bishundeo v. Seogeni Rai, AIR 1951 SC 280 :"25. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Now if there is one rule which is better established than any other, it is that in cases of fraud, undue influence and coercion, the parties pleading it must set forth full particulars and the case can only be decided on the particulars as laid. There can be no departure from them in evidence. General allegations are insufficient even to amount to an averment of fraud of which any Ct. ought to take notice, however strong the language in which they are couched may be, and the same applies to undue influence and coercion. . . . . " ( 13 ) COMING to the plaint of the present case, as regards false a5. The plaintiff by acting on it, sustained damagend fraudulent representation, the allegation is that the mark "w. D. and H. O. Wills" and/or "wills" which was owned and registered by the two foreigners has been used by ITC on the various brands of cigarettes manufactured by it and this is suggestive of the fact that the cigarettes being sold in the packets carrying this mark are manufactured and sold by the foreign companies or in collaboration with them, even when ITC is not acting as agent of the foreign companies. They have further alleged that the British Companies who are selling these cigarettes do not manufacture or sell or advertise their cigarettes, nor do they have any agent in India, but the ITC, by its advertising campaign, is openly and blatantly misleading the general public by creating a false impression that the cigarettes manufactured and sold by it are either of foreign make or are manufactured and sold in collaboration with the foreign companies. No particulars about advertising campaign have been given to indicate how the misrepresentation has been made and how it is fraudulent.
No particulars about advertising campaign have been given to indicate how the misrepresentation has been made and how it is fraudulent. Misrepresentation and fraud are alleged by the use by ITC of the aforesaid brand name on the packets of the cigarettes manufactured by it in the circumstances mentioned above. Even about the effect of the alleged misrepresentation on the minds of the public, the plaintiffs are not precise, as instead of being categorical, they have alleged that the impression created is either that they are of foreign make or that they are manufactured and sold in collaboration with the foreign companies. The plaintiffs have annexed a photostat copy of some of the packets of cigarettes manufactured by ITC as annexure "ii". A bare perusal of the packets shows that they do not carry any misrepresentation of the kind alleged by them. Each of the packets contains an endorsement "made IN INDIA" and either a legend "a PRODUCT OF I. T. C. LTD. " or a legend "a BRAND OWNED BY I. T. C. LTD". Along with the brand name is written the letter "t" in a circle to indicate that it is the trade mark of ITC. The address of ITC Ltd. , is given on each packet as "37, CHOWRINGHEE, CALCUTTA". In addition, the particular place of manufacture in India is also mentioned. It is evident that the allegation that the use of the brand name by ITC creates either an impression of the goods being of foreign origin or of being manufactured in collaboration with Foreign Companies is inferential in nature and that inference is contradicted by the photostat copy of the packets annexed with the plaint, as the packets clearly indicate that the manufacture was done in India and the product is of ITC or the brand name is owned by ITC, which means that ITC indicated in clear terms that the product was not of foreign origin and the brand name has been used by it, being registered in its name. The plaintiffs have not disputed the actual fact of registration. There is no suggestion about any foreign collaboration from the packets. ( 14 ) DR.
The plaintiffs have not disputed the actual fact of registration. There is no suggestion about any foreign collaboration from the packets. ( 14 ) DR. Ghosh has urged that for the purpose of deciding the application under Order VII, Rule 11, C. P. C. the allegations made in the plaint have to be taken as correct, and, therefore, the allegations made in the plaint about the impression being created that the goods were of either foreign origin or were manufactured in collaboration with a foreign company should be taken as correct. There can be no dispute as to the legal proposition urged by the learned counsel; but this legal position applies only to statements of facts. The allegation that the use of the brand name by ITC on the packets suggests an impression of the product being of foreign origin or of being manufactured in collaboration with foreign companies is not a mere statement of fact but is of an inference from the facts stated on the packets. Inscriptions on the packets are the allegations of facts, which have to be taken as correct, but this is not so about the suggestions which arise therefrom. If the inference alleged in the plaint is not warranted from the packets, it is a clear case of clever drafting to create an illusion of a cause of action. ( 15 ) FURTHERMORE, in an action of deceit, one of the several ingredients which must be shown to be present is that the plaintiff must have acted on the representation and while so acting must have suffered harm in consequence. A mere attempt to deceive is not actionable. In the present case, the plaintiffs have not claimed any damages for any damage having been suffered by them. They profess to have filed the suit in order to prevent ITC from practising deceit in the name of public interest. It is clear that the plaintiffs are aware at least now of the true factual position that the product of ITC bearing the aforesaid brand name is neither of foreign origin nor is being manufactured with any foreign collaboration. The same must also be true about those for whose alleged benefit, they have brought the suit, for the alleged beneficiaries cannot, obviously, be presumed to be in dark.
The same must also be true about those for whose alleged benefit, they have brought the suit, for the alleged beneficiaries cannot, obviously, be presumed to be in dark. That is apart from the fact that no suit in the nature of public interest litigation, except as provided for specifically in Section 91 and Order 1, Rule 8, CPC, if the procedure prescribed there can be said in any sense, to provide for litigation of that kind is permissible. Where the allegations made in the plaint do not constitute cause of action, the mere allegation that they have purported to bring the suit in public interest, does not have the magic of making good the deficiency. When the plaintiffs and all others placed in their situation are aware of the true facts, there is absolutely no question of their acting on any misrepresentation and, in consequence, of being deceived. Further, the allegation made by the plaintiffs that the foreign companies owning the brand name do not manufacture or sell or advertise their cigarettes in India contradicts their case of an impression being created that the goods were of foreign origin. It is of essence in an action of deceit that the deceit must have been completed. No person can say that he should be saved from being deceived. There can be no greater guarantee against deceit to protect a person who knows that some other wants to deceive him by a fraudulent misrepresentation that his own decision not to act on the misrepresentation. When the law cannot compel a plaintiff to take such a decision, law will not compel the defendant to act on the allegation of such a plaintiff that the defendant is threatening to deceive him. So, in an action of deceit, reliefs of declaration and injunction are incongruous. Thus the plaint does not disclose any cause for an action of deceit. ( 16 ) ANOTHER cause on which the plaintiffs have grounded the reliefs claimed by them is 'passing off'. 'passing off' means, passing off one's goods or business as the goods or business of another.
Thus the plaint does not disclose any cause for an action of deceit. ( 16 ) ANOTHER cause on which the plaintiffs have grounded the reliefs claimed by them is 'passing off'. 'passing off' means, passing off one's goods or business as the goods or business of another. Salmond and Heuston say that to "sell merchandise or carry on business under such a name, mark, description, or otherwise in such a manner as to mislead the public into believing that the merchandise or business is that of another person is a wrong actionable at the suit of that other person. " "the law on this matter is designed to protect traders against that form of unfair competition which consists in acquiring for oneself, by means of false or misleading devices, the benefit of the reputation already achieved by rival traders. " It is further stated that the true basis of the action is "that the passing off injures the right of property in the plaintiff, that right of property being his right to the goodwill of his business. In general, the violation of a right to property is actionable even though it is innocent and though no damage has been proved. At common law it was necessary to prove an actual fraudulent intention but a different view was taken in equity, and now it is generally accepted that it is not necessary in an action for passing off to prove an intent to deceive. " In the High Court of Justice Chancery Division case in Derek Mcculloch v. Lewis A. May (Produce Distributors) Ltd. (Vol. LXV) R. P. C. 58, observation was made -". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . It is of the essence of an action for passing off to show, first, that there has been an invasion by the defendant of a proprietary right of the plaintiff, in respect of which the plaintiff is entitled to protection, and, secondly, that such invasion has resulted in damage or that it creates a real and tangible risk that damage will ensue.
"again in Erven Warnink B. V. v. J. Townend and Sons (Hull) Ltd. , 1980 RPC 31 : (1979 (2) All ER 927), which was the House of Lord's decision, Lord Diplock identified , five characteristics which must be present in order to create a valid cause of action for passing off". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) a misrepresentation, (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably forseeable consequence), and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so. "in Ruston and Hornby Ltd. v. -. Engineering Co. , AIR 1970 SC 1649, the Hon'ble Supreme Court reiterated that the (para 6) -"gist of a passing off action is that A is not entitled to represent his goods as the goods of B but it is not necessary for B to prove that A did this knowingly or with any intent to deceive. It is enough, that the get-up of B' s goods has become distinctive of them and that there is a probability of confusion between them and the goods of A. No case of actual deception nor any actual damage need be proved. ''legal position is firmly established that passing off action is available to a trader for the protection of his proprietary right in his goodwill or business. This is not a remedy open to the consumers of goods or services to complain about confusion or likelihood of confusion by the use of a particular mark by a trader or manufacturer on his goods. ( 17 ) ONE essential distinction between an action of deceit and passing off is that whereas, in the former, deception is on the plaintiff who alleges that he has been deceived, in the latter case, the deception is not on the plaintiff but on some others.
( 17 ) ONE essential distinction between an action of deceit and passing off is that whereas, in the former, deception is on the plaintiff who alleges that he has been deceived, in the latter case, the deception is not on the plaintiff but on some others. In the former action, the plaintiff claims compensation for the injury caused due to deception practised on him, but in the latter, the plaintiff seeks to protect his proprietary right in his goodwill or business which is threatened by deception, or confusion or likelihood of deception or confusion on others. Since in the latter case, the purpose is the protection of the proprietary right in the goodwill or business of the plaintiff, actual deception is not an essential ingredient. Even the likelihood of deception or confusion is sufficient. So remedy of injunction is also available in the passing off action. But in an action of deceit, since completion of deception is essential, damages is the only remedy available, and the remedy of declaration or injunction is incongruous. So, in the present case, the plaintiffs have no cause for passing off action and their claim on this count is entirely misconceived. ( 18 ) DR. Ghosh has further urged that every person has the right not to be deceived or confused and this right has been violated by ITC by the use of the mark which is likely to deceive or confuse the public that the products bearing the mark are the products of the foreign companies that own the mark. In this connection, he has referred to S. 11 (1) of the Trade and Merchandise Marks Act, 1958, which prohibits the registration as trade mark of a mark the use of which would be likely to deceive or cause confusion. Reference is also been made to Section 12 (1) of the same Act which says that save as provided in sub-section (3), no trade mark shall be registered in respect of any goods or description of goods which is identical with or deceptively similar to a trade mark which is already registered in the name of a different proprietor in respect of the same goods or description of goods. Reference is also made to the commentary of Dr.
Reference is also made to the commentary of Dr. Venkateswaran in support of his contention where it is stated that Section 11 exists not merely for the benefit of other traders but for the benefit of the public at large. The interests of the public are of greater importance than the relative rights of the parties with the result that although the opponent might be estopped by his conduct from opposing registration yet in the public interest the tribunal must take cognizance of any fact that would render registration improper. In considering an objection under Section 12 (1), the primary duty of the tribunal "is towards the public and the maintenance of the purity of the Register. When a case is sought to be made out that a particular trade mark is likely to deceive or cause confusion, the contest is not so much between the parties to the litigation as it is a contest between the party defending his right to a particular trade mark and the public, and the duty of the Court must always be to protect the public irrespective of what hardship or inconvenience it may cause to a particular party whose trade mark is likely to deceive or cause confusion. The object of maintaining a trade mark register is that the public should know whose goods they are buying and with whom particular goods are associated. It is therefore essential that the register should not contain trade marks which are identical or which so closely resemble each other that an unwary purchaser may be likely to be deceived. " It is further stated, that the question being one of public interest, it is immaterial whether the owner of a registered mark does not oppose the registration or that he consents to the new registration. Reference has also been made by the learned counsel to several authorities where deception or likelihood of confusion has been taken into consideration as a relevant factor for refusal of registration or in the proceedings for rectification of the register of trade marks maintained by the registrar of trade marks. The argument though seems to be attractive is devoid of merit. Sections 11 and 12 provide for certain considerations relevant for registration of a trade mark or in a proceeding concerning the rectification of the register of trade marks.
The argument though seems to be attractive is devoid of merit. Sections 11 and 12 provide for certain considerations relevant for registration of a trade mark or in a proceeding concerning the rectification of the register of trade marks. The mere fact that they seek to serve some public interest does not mean that they create in every person of the public a right to approach the Civil Court for their violation. The purpose of the Trade and Merchandise Marks Act is to protect the interest of the proprietors of the registered trade marks and, the rights and duties created in relation to the registration, though have to serve a public purpose, are in relation to the rights of the individual owners of the registered trade marks, and the public purpose contemplated therein has to be served in the manner prescribed for the enforcement of the provisions of the Act. They do not seek to create any right in a general sense. Confusion or likelihood of confusion does not by itself constitute a cause of action for a suit for declaration or injunction. If it were otherwise, the tort or deceit would be otiose, for, no one would like to prefer a cause calling for a higher burden of proof and promising an inferior remedy. Confusion is not a tort unless it amounts to deceit. It is one of the several ingredients for a 'passing off' action. When the relief of declaration or injunction is not available to a plaintiff on a cause of action of deceit, it would be wholly irrational to say that such a relief would be available on the allegation of confusion or likelihood of confusion, which may be occasioned even without the presence of the element of fraud, even of misrepresentation which must be present in deceit. If a plaintiff is confused without a misrepresentation by the defendant, it is a sign of plaintiff's weakness and there is no reason why the defendant should suffer for the weakness of the plaintiff. However, the matter is different in a passing off action, but even there, the plaintiff does not have a cause for a declaration or injunction on the allegation of confusion about himself, he has a cause of action for the confusion caused or likely to be caused to others by an act of the defendant.
However, the matter is different in a passing off action, but even there, the plaintiff does not have a cause for a declaration or injunction on the allegation of confusion about himself, he has a cause of action for the confusion caused or likely to be caused to others by an act of the defendant. There the remedy is not against confusion but because the defendant has no right to pass off his goods as the goods of the plaintiff and thus to cause loss to the proprietary right of the plaintiff. For enforcement of the special rights created by the Act under Sections 11 and 12, remedy has to be sought in the manner provided by the same Act. That is available at two stages : one, at the time of registration by opposing registration; and second, subsequently, in rectification proceedings. ( 19 ) DR. Ghosh has referred to a few decisions in support of his contention that an act which is likely to cause confusion is a public wrong for the redressal of which a civil suit is maintainable. One is the Mcwhirter case reported in Attorney General v. Independent Broadcasting Authority, (1973) 1 All ER 689. This was an action for injunction against the Broadcasting Authority which was threatening to show a film which did not comply with the statutory requirements and the showing of which would, therefore, be illegal. Lord Denning observed :"we live in an age when Parliament has placed statutory duties on government departments and public authorities for the benefit of the public - but has provided no remedy for the breach of them, If a government department or a public authority transgresses the law laid down by Parliament, or threatens to transgress it, can a member of the public comes to the Court and draws the matter to its attention. . . . . . . . . . I am of the opinion that, in the last resort, if the Attorney General refuses leave in a proper case or improperly or unreasonably delays in giving leave, or his machinery works too slowly, then a member of the public who has sufficient interest can himself apply to the court itself.
. . . . . . . . . I am of the opinion that, in the last resort, if the Attorney General refuses leave in a proper case or improperly or unreasonably delays in giving leave, or his machinery works too slowly, then a member of the public who has sufficient interest can himself apply to the court itself. "lord Denning held that Mcwhirter had sufficient interest to bring the action since he had a television set for which he had paid licence fee and his susceptibility would be offended like that of many others watching television if the film was shown in breach of the statutory requirements. In that case the duty which was sought to be enforced against the Braodcasting Authority was one which the Braodcasting Authority owed to the general public, regarding which no remedy had been provided. The corresponding right created was the right created in favour of the general public. The other case is Attorney-General v. Shrewsbury (Kingsland) Bridge Company decided by the Chancery Division on June 17, (1882) 21 Ch D 752. In that case, the defendant company had without any power (for their powers had come to an end) thought fit to do certain acts which undoubtedly tended in their nature to interfere with public rights, and so tended to injure the public. The question was whether, under such circumstances, the Attorney-General was justified in interfering, though there was no evidence of actual injury to the public. Fry, J. held that he was entitled to do so. The other case is the decision of the Queen's Bench Division in the Attorney-General on the Relation of the Warwickshire County Council v. The London and North Western Railway Company decided in November 10, 1898, 1 QB 72. In that case, the railway company, under a particular statute, had the power to cross a level crossing at a speed not greater than four miles an hour, but they constantly drove their trains at a speed exceeding that limit. Upon an information, filed by the Attorney-General, it was held that as the information had been filed to enforce the express terms of an Act of Parliament, an injunction must be granted, although there was no evidence of any injury to the public. In all these cases, rights had been created in the general public without providing for any remedy.
Upon an information, filed by the Attorney-General, it was held that as the information had been filed to enforce the express terms of an Act of Parliament, an injunction must be granted, although there was no evidence of any injury to the public. In all these cases, rights had been created in the general public without providing for any remedy. They do not lay down any general proposition of law that any violation of law creates a legal right in every member of the general public entitling him to bring an action by himself or through the Attorney-General in the present case, rights have not been created in the general public, and whatever rights have been created have been taken care of, by the provision of the remedies considered appropriate and adequate by the legislature, in the very statute that created the rights. So these decisions are of no relevance to support the contention of Dr. Ghosh. ( 20 ) THE next cause of action on which the plaintiffs seek reliefs is about public nuisance and wrongful acts. The plaintiffs have pleaded that the use of the mark "w. D. and H. O. Wills" and/or "wills" is not only a public nuisance but also amounts to wrongful action on the part of the defendants on the plaintiffs as also on the general public. It is further alleged that the use of the mark is contrary to public interest and national interest since that results in enhanced use of the products which are gravely deleterious to public health, public well-being and public welfare, and the Court can take judicial notice of the incontrovertible and well established fact that cigarette smoking is injurious to health and this is contrary to Chapter IV of the Indian Constitution. ( 21 ) SECTION 91 of the Code of Civil Procedure provides for the institution of a suit in the case of a public nuisance or other wrongful act affecting, or likely to affect, the public. The words "public nuisance" have not been defined in the Code. By virtue of S. 3 (48) of the General Clauses Act, the words mean a public nuisance as defined by the Indian Penal Code.
The words "public nuisance" have not been defined in the Code. By virtue of S. 3 (48) of the General Clauses Act, the words mean a public nuisance as defined by the Indian Penal Code. Under Section 268 of the Indian Penal Code, "a public nuisance" is an act or illegal omission which causes any common injury, danger or annoyance to the public or to the people in general who dwell or occupy property in the vicinity, or which must necessarily cause injury, danger, or annoyance to persons who may have occasion to use any public right. Undoubtedly, injury, damage or annoyance contemplated in S. 268 does not comprehend the injury, damage or annoyance which may result from smoking, smoking being regarded as injurious to health. Even though smoking is injurious, neither its manufacture, nor its sale, nor its advertisement, nor its consumption is prohibited. Therefore, the use of the mark which results in an increase in the sale of cigarettes does not give a cause of action for an action of public nuisance. Nor does that act amounts to any other wrongful act. It will be profitable to bear in mind that Section 91 does not create any new legal right. It only provides for the procedure in cases of public nuisances and other wrongful acts affecting the public, where no special damage has been caused to such persons by reason of such public nuisance or other wrongful act. There are many forms of harm of which the law takes no account. Damage so done and suffered is called damnum sine injuria. Undoubtedly, such a harm is not comprehended within the expression, 'other wrongful act' affecting the public, occurring in Section 91. Thus the allegations about public nuisance and other wrongful act also do not constitute any cause of action in the present case. ( 22 ) THE other cause of action on which the plaintiffs have relied upon is unfair trade practice. In paragraph 1 of the plaint, they have alleged that the suit is to prevent the defendants' wrongful action which also constitutes unfair trade practice affecting a large section of the public who are habitual smokers.
( 22 ) THE other cause of action on which the plaintiffs have relied upon is unfair trade practice. In paragraph 1 of the plaint, they have alleged that the suit is to prevent the defendants' wrongful action which also constitutes unfair trade practice affecting a large section of the public who are habitual smokers. In paragraph 9, they have alleged that the use of the aforesaid mark on the cigarettes manufactured and sold by the defendants amounts to unfair trade practice within the meaning of S. 36a (1) (iv) and (v) of the Monopolies and Restrictive Trade Practices Act, 1969 in as much as the said mark creates an impression that the Wills brand cigarettes manufactured and sold by ITC have either the approval or the characteristics of the original foreign brand cigarettes and/or that the said cigarettes are being manufactured and sold with the approval or affiliation of the foreign companies using the aforesaid foreign brand name which the defendants know and/or have reasons to believe is false to their knowledge. On the other hand, Mr. Desai has contended that the allegations made in the plaint do not amount to unfair trade practice and further that the Civil Court does not have the jurisdiction to deal with a case of this kind. ( 23 ) THE aforesaid Act empowers the Commission to enquire into any unfair trade practice and to make the necessary orders. Rights and obligations relating to unfair trade practice have been created by the Monopolies and Restrictive Trade Practices (Amendment) Act, 1984 and, therefore, one who feels aggrieved has to pursue the remedy provided in the Act, with the result that the Civil Court does not have the jurisdiction to deal with the matter brought before it by virtue of Section 36-A of the Act. ( 24 ) THE other ground on which the plaintiffs have relied is that the use of the mark "w. D. and H. O. Wills" and/or "wills" is inconsistent with the guidelines for industrial policy laid down by the Government of India, Ministry of Industry, Department of Industrial Development, New Delhi, in as much as Part-I in Chapter IV thereof, the Government of India has prohibited the use of a foreign brand name for internal sales. The guidelines have been marked as Annexure-III to the plaint.
The guidelines have been marked as Annexure-III to the plaint. The annexure shows that the guidelines are such as an entrepreneur is required to take note of in negotiating proposals for foreign collaboration so as to ensure that such proposals conform to the policy of the government, and one of the guidelines is that the "use of foreign brand names will not be permitted for internal sales. " There is no dispute that the guidelines were published much after ITC started using the aforesaid brand name. Furthermore, the guidelines do not create any legal right or legal obligations. As such the allegations regarding guidelines also do not constitute any cause of action. ( 25 ) DURING arguments, reference was made to the Supreme Court decisions in Fertiliser Corporation Kamagar Union v. Union of India, AIR 1981 SC 344, S. P. Gupta v. President of India, AIR 1982 SC 149 D. S. Nakara v. Union of India, AIR 1983 SC 130 and Bandhua Mukti Morcha v. Union of India, AIR 1984 SC 802 on the question whether the plaintiffs have the locus standi to bring the suit as public interest litigation. Since the plaint does not disclose any cause of action, the question as to the locus standi of the plaintiffs to bring the suit does not survive. As observed in S. P. Gupta v. President of India AIR 1982 SC 149 , "there is a vital distinction between locus standi and justiciability and it is not every default on the part of the State or a public authority that is justifiable. " The question as to locus standi arises for decision, only if there is a justiciable cause before the Court. There is nothing in these authorities to support the case of the plaintiffs, as regards the justiciability of the action brought by them. ( 26 ) THE question whether the suit is barred by Ss. 34 and 41 of the Specific Relief Act, 1963 need not be examined, once it is held that the plaint does not disclose any cause of action. ( 27 ) NOW is for consideration the argument advanced by Mr.
( 26 ) THE question whether the suit is barred by Ss. 34 and 41 of the Specific Relief Act, 1963 need not be examined, once it is held that the plaint does not disclose any cause of action. ( 27 ) NOW is for consideration the argument advanced by Mr. Desai that the impugned judgment is vitiated by illegality, since the learned District Judge did not consider the relevant law and the arguments advanced on behalf of ITC, relied upon material outside the plaint, sought to create a wrong impression that the conclusion recorded by him was in accord with the decision of the Hon'ble Supreme Court in the Special Leave Petition which had been filed by ITC against the ex parte injunction order granted by him, even when it was not possible for any one to construe the order of the Supreme Court in that manner and rejected the application under Order VII Rule 11 without saying which cause of action, if any, the plaint disclosed. According to the learned counsel, the judgment is based on no intelligible reasons, the so called reasons being a mere pretence of reasons and is, therefore, null and void. ( 28 ) AS observed by the Hon'ble Supreme Court in Swaran Lata v. Harendra Kumar, AIR 1969 SC 1167, "trial of a civil dispute in Court is intended to achieve, according to law and the procedure of the Court, a judicial determination between the contesting parties of the matter in controversy", and "adjudication by a reasoned judgment of the dispute upon a finding on the facts in controversy and application of the law to the facts found are essential attributes of a judicial trial. In a judicial trial the Judge not only must reach a conclusion which he regards as just, but unless otherwise permitted, by the practice of the Court or by law, he must record the ultimate mental process leading from the dispute to its solution. A judicial determination of a disputed claim where substantial questions of law or fact arise is satisfactorily reached, only if it be supported by the most cogent reasons that suggest themselves to the Judge; a mere order deciding the matter in dispute not supported by reasons is not judgment at all. Recording of reasons in support of a decision of a disputed claim serves more purposes than one.
Recording of reasons in support of a decision of a disputed claim serves more purposes than one. It is intended to ensure that the decision is not the result of whim or fancy, but of a judicial approach to the matter in contest : it is also intended to ensure adjudication of the matter according to law and the procedure established by law. A party to the dispute is ordinarily entitled to know the grounds on which the Court has decided against him, and more so, when the judgment is subject to appeal" or revision. The appellate or a revision Court "will then have adequate material on which it may determine whether the facts are properly ascertained, the law has been correctly applied and the resultant decision is just". ( 29 ) ). Mr. Desai went through substantially the whole of the impugned judgment making comments to make his point. After a careful consideration of the entire matter, I find myself with no choice except to agree with him. The learned District Judge has referred to the pleadings of the parties. He has even referred to the written statement of ITC, even though it was not necessary to refer to it, for the question as to whether the plaint discloses cause of action has to be decided on the pleadings of the plaintiffs. He has also made an elaborate reference to the submissions made by both the counsel. He has also stated that the learned counsel for ITC, referred to Halsbury. (4th edition), Vol. 31, para 1091 , Ramaswamy Iyer's Law of Torts (8th Edition) page 2831 and Salmond and Heuston on the Law of Torts (19th Edition) page 434.
He has also made an elaborate reference to the submissions made by both the counsel. He has also stated that the learned counsel for ITC, referred to Halsbury. (4th edition), Vol. 31, para 1091 , Ramaswamy Iyer's Law of Torts (8th Edition) page 2831 and Salmond and Heuston on the Law of Torts (19th Edition) page 434. He has also referred to the submissions of the learned counsel that the plaint does not disclose cause of action for deceit as no damage has been claimed by the plaintiffs and in an action of deceit, the only relief available to the plaintiffs is damages, that the charge of alleged deceit came to an end once this was detected or found by the plaintiffs, that the general allegations of fraud as averred in the plaint are insufficient for the Court to take any notice of, that ITC had taken all precautions to avoid confusion by printing the words "made in India" or the legend "the Product of I. T. C. Limited" or "brand Owned by I. T. C. Ltd. " on each cigarette packet in a prominent manner and that each packet also contains the address of ITC Limited as 37, Chowringhee, Calcutta and that, in addition, the packets and/or slides also contain the place of manufacture of the cigarettes in India in accordance with the standards of Weights and Measures (Package Commodities Rules, 1977 ). Despite having taken note of all these submissions in paras 11 and 13 of the judgment, the learned District Judge did not deal with any of them. He did not spell out whether the facts pleaded by the plaintiffs disclosed any cause of action of deceit or passing off or unfair trade practice or violation of government policy or nuisance or any other wrongful act or all of them. This he failed to do even when he referred in para 19 to the Supreme Court decision in AIR 1977 SC 2421 and quoted the head note which says that if "on a meaningful, not formal reading of the plaint it is manifestly vexatious and meritless, in the sense of not disclosing a clear right to sue, the trial Court should exercase its power under Order VII Rule 11, C. P. C. taking care to see that the ground mentioned therein is fulfilled. . . . . . . . . ".
. . . . . . . . ". After referring to the head note, he commented that the authority was on entirely different set of facts in which repeated suits" had been filed by the petitioner only to prevent the execution of a decree of ejectment. This comment amounts to no reason for not following the law clarified by the Supreme Court, which was undoubtedly binding on him that, if the plaint does not disclose a clear right to sue, the Trial Court should exercise its power of rejecting the plaint under Order VII Rule 11, CPC. Law is clear even on a reading of the bare provision. The fact that the decision had been rendered in a case where repeated suits had been filed to prevent the execution of a decree of ejectment does not in any manner make inapplicable to the present case the legal principle that the Court has to reject the plaint under Order VII Rule 11, CPC, where the plaint does not disclose any cause of action. ( 30 ) PARAGRAPH 20 of the judgment runs as under :"20. In the instant case the plaintiff's case has been that the defendants have been selling their products with the trade mark which is identical with the registered trade mark of the two English companies in England whose reputation is still well known throughout the world thereby leading the unwary smokers and purchasers to confusion and deception. The plaintiffs have filed one letter written by M/s Fox and Gibbons dated 12/09/1989 addressed to a Malasian Oil Company who apparently enquired about the mark "w. D, and H. O. Wills" and the information supplied by the Solicitors concerned is that the mark "w. D. and H. O. Wills" is still registered in the names of Imperial Tobacco Company, Bristol and British American Tobbaco Company, London. During the argument the learned counsel for the plaintiffs stated that it appeared that in 1932 by some method the I. T. C. Limited had managed to obtain a registration in respect of the mark "w. D. and H. O. Wills" and since the I. T. C. Limited has not come forward to explain how they got the registration in 1942, inference can be drawn that the registration of the said mark in the name of I. T. C. Limited was not obtained upon due observance of law.
The learned counsel for the plaintiffs have also produced the cigarettes (sticks) to show that none of the cigarettes contained the letters that they are the products of I. T. C. limited or that they are made in India and the only words mentioned are "w. D. and H. O. Wills". The learned counsel further stated that India Kings and Classic cigarettes manufactured by the I. T. C. Limited do not have the mark "w. D. and H. O. Wills" and in the packets of these cigarettes the I. T. C. Limited categorically stated that these cigarettes are made of their blend. So anybody buying these cigarettes would know that these are cigarettes manufactured by I. T. C. Limited having no connection with any foreign company or collaboration. Thus the different writings in the packets are capable of forming an impression in the mind of an unwary purchaser that "wills' cigarettes are manufactured by the foreign companies in India through their agents and associates and they use the brand name "wills" and that brand name is owned by I. T. C. Limited. Thus it is the definite case of the plaintiffs that they were confused and deceived. So considering the submissions made by the learned counsel for both the parties and on a meaningful reading of the plaint I am of the view that there is a serious question to be tried and as such the contention of the defendant No. 2 to say that the plaint does not disclose any cause of action is not sustainable. "thus, after referring to the various submissions made by the learned counsel, the learned District Judge said that on a meaningful reading of the plaint he was of the view that there was a serious question to be tried and as such the contention of ITC that the plaint does not disclose any cause of action is not sustainable. Instead of saying how the plaint discloses cause of action, it has been said that the contention that the plaint does not disclose cause of action is not sustainable. It was essential to specify with precision how the plaint disclosed cause of action, if the contention of ITC, was not found sustainable but this was not done, and instead, it was said that there was a serious question to be tried. Even that serious question was not specified.
It was essential to specify with precision how the plaint disclosed cause of action, if the contention of ITC, was not found sustainable but this was not done, and instead, it was said that there was a serious question to be tried. Even that serious question was not specified. That might mean the plaintiffs' allegation that they were confused and deceived. For deciding an application under Order VII, Rule 11, it is not necessary to decide whether the question is serious or not. It is enough, if there is a question which calls for decision. That would be so, if the bundle of facts pleaded by the plaintiffs on proof of admission make out a case for some relief to the plaintiffs. The impugned judgment nowhere says how the allegation about confusion and deception is sufficient to constitute any cause of action. I have already held that the mere allegation that the plaintiffs were deceived or confused or are likely to be deceived or confused is not sufficient to constitute the tort of deceit and the plaintiffs have no cause to sue for passing off. The learned trial Court has not dealt with the argument advanced on behalf of ITC that the printing made by it on the cigarette packets regarding the manufacture made in India, left no room for any deception or confusion. The judgment does not deal with the question how the cause of action of deceit is complete in the absence of an allegation that the person deceived had acted on a false representation made by the defendant and suffered damage by so acting. The learned District Judge referred to the letter of M/s Fox and Gibbons which was not referred in the plaint and it is not clear how this letter could be relied upon and to which extent he actually relied upon it. The question of registration was not pleaded by the plaintiffs in the plaint and, therefore, both the learned counsel rightly conceded that this question did not arise for decision in this case.
The question of registration was not pleaded by the plaintiffs in the plaint and, therefore, both the learned counsel rightly conceded that this question did not arise for decision in this case. Even then, the learned District Judge made a reference to the argument of the learned counsel for the plaintiffs that in 1942 by some method, ITC managed to obtain the registration in respect of the mark "w. D. and H. O. Wills" and since ITC has not come forward to explain how they got the registration in 1942, inference can be drawn that the registration of the said mark was not obtained after due observance of law. But he has not stated to what extent he was inclined to accept this argument. Law is clear that the party pleading fraud has to give all the necessary particulars of fraud and certainly, there was no presumption against ITC in this regard. The learned District Judge has noted the argument advanced on behalf of the plaintiffs that individual cigarette sticks do not indicate that they are the products of ITC or that they are made in India, as if the people purchase individual cigarette sticks instead of cigarettes packed in packets, without indicating whether it found favour with him, and if so, to what extent and why. This is so even when the plea was not taken in the plaint. In paragraph 18 of the judgment, the learned District Judge has again mentioned that the allegations made in the plaint are of serious nature and the learned counsel for the plaintiffs had urged that the suit had been filed in the nature of public interest litigation to stop the perpetuation of fraud and misrepresentation committed by the defendants and said, "to accept the contention of the defendant No. 2 that since the plaintiffs did not claim any damage in terms of money the suit in its present form cannot be sustained, as correct, it would lead to an absurd situation. If the plaintiffs could show during the trial that their allegations are well founded or substantiated by sufficient materials the Court cannot remain a silent spectator because the Courts always got to have the interest of the public in mind while deciding such a serious conflict between the parties.
If the plaintiffs could show during the trial that their allegations are well founded or substantiated by sufficient materials the Court cannot remain a silent spectator because the Courts always got to have the interest of the public in mind while deciding such a serious conflict between the parties. It is highly undesirable that in the wake of such serious allegations the public should be put in a position where they are likely to be deceived or confused". Thus the learned District Judge was prolific in irrelevancies and avoided the relevant question which of the allegations constituted which cause of action, if the plaint disclosed any cause of action, in his view. The argument that a tort of deceit gives cause only for damages cannot possibly be met by saying that such an argument would lead to an absurd situation. If several ingredients must be present to constitute a cause of action, it is not open to any one to say that he will treat the presence only of one or a few as sufficient. The logic of saying that if the plaintiffs could show during trial that their allegations are well founded or substantiated by sufficient material, the Court cannot remain a silent spectator because the Court always have got to have the interest of the public in mind while deciding such a serious conflict between the parties, again begs the question what the cause of action is to warrant a trial. The trial Judge has adopted a very peculiar way of writing judgment whereby he referred to several submissions of the learned counsel of both sides without making any comment in respect of many of them to give an indication about his reaction to them and said in the end that after considering the submissions, he is of the view that there is a serious question to be tried and the contention raised on behalf of ITC is not sustainable. ( 31 ) IN order to appreciate the contention of Mr. Desai about the Special Leave Petition, a reference may be made to a few facts that lead to the filing of that Petition. Along with the plaint on 21-1-1991, the plaintiffs filed an application for temporary injunction making prayer in terms of the injunction claimed in the suit. On that very date, the learned District Judge issued an ex parte injunction order, as claimed.
Along with the plaint on 21-1-1991, the plaintiffs filed an application for temporary injunction making prayer in terms of the injunction claimed in the suit. On that very date, the learned District Judge issued an ex parte injunction order, as claimed. Thereafter, ITC moved an application under Order 39, Rule 4 read with Section 151 of the Code of Civil Procedure on 28-1-1991 for vacating that ex parte injunction order. The District Judge was on special casual leave from 23-1-1991 to 12-2-1991 and so, Mr. A. P. Subba, the learned Additional District Judge dealt with the matter. In the meanwhile, ITC filed a Special Leave Petition before the Supreme Court against the ex parte injunction order dated 21-1-1991. The Supreme Court vide its order dated 31-1-1991 modified the ex parte injunction order permitting the production and manufacture of the cigarettes and limiting the injunction to marketing only subject to further orders that might be made by the trial Court. On 6-2-1991, the learned Additional District Judge disposed of the application under Order 39, Rule 4 and vacated the ex parte injunction order passed by the District Judge on 21-1-1991. In paragraph 17 of the impugned judgment, the learned District Judge has stated that in the Special Leave Petition, ITC had challenged the grant of the ad interim injunction order on the grounds that the injunction order was without jurisdiction, that the plaint did not disclose cause of action and that the application under Order 39, Rules 1 and 2 CPC did not disclose any ground for any ex parte injunction and the fact that even then the Hon'ble Supreme court, after hearing the learned counsel for both the parties, had been pleased only to modify the injunction order permitting the production and manufacture and limiting the injunction to marketing only subject to further orders that might be made by the trial Court, showed that the Hon'ble Supreme Court was not convinced with the grounds as stated above by ITC. The learned District Judge has further stated that if the Hon'ble Supreme Court was convinced that the impugned order had been passed without jurisdiction "and the suit did not disclose any cause of action as alleged, perhaps, the Hon'ble Court would have quashed the impugned order instead of passing the modified order of injunction". To say the least, the inference drawn by the learned District Judge is entirely unwarranted.
To say the least, the inference drawn by the learned District Judge is entirely unwarranted. The fact that the Hon'ble Supreme Court did not quash the impugned order in its entirety does not mean that the Hon'ble Court was convinced that the plaint disclosed cause of action or that the impugned order was not without jurisdiction. Had the Hon'ble Court considered the various pleas with a view to deciding the matter on merit, there could be no question of the Court passing the order subject to the decision of the trial Court. A bare reading of the order makes it clear that the Hon'ble Supreme Court agreed to modify the order in the peculiar facts and circumstances of the case where it was alleged that the District Judge who made the order had proceeded on leave and the High Court was on vacation, and the Judges were not at the headquarters. This shows that ordinarily the Hon'ble Supreme Court does not interfere in such matters, but agreed to modify the injunction order in the peculiar facts and circumstances, where it seemed, there was no other Court which ITC could approach for immediate relief. This, instead of showing that the Court was convinced about the jurisdiction and cause of action, indicates that the Court saw no justification in the continuation of the part of the injunction order, which related to manufacture and production till the application was heard upon on merit. The fact that the Supreme Court did not consider the various pleas on merit is further clear from the fact that by the order, the Hon'ble Court directed the learned Additional District Judge to proceed with the matter from the next day until the hearing was over day to day and to dispose of the application within a week from the next day. Thus the submission of the learned counsel has merit. ( 32 ) WHILE disposing of a Revision Petition, it is necessary for the High Court to consider whether the impugned order suffers from any jurisdictional error, which includes consideration of the question whether the decision was reached judicially and not arbitrarily. In the present case, the learned District Judge did not even advert to the basic issue: whether the plaint discloses all the material allegations necessary to constitute a cause of action.
In the present case, the learned District Judge did not even advert to the basic issue: whether the plaint discloses all the material allegations necessary to constitute a cause of action. The judgment is not based on consideration of the allegations made in the plaint in the light of the relevant law. Arguments advanced on behalf of the parties have also not been considered. There are no intelligible reasons to support the judgment and the judgment is not a judgment in the eye of law. ( 33 ) THUS, the learned District Judge has acted in the exercise of his jurisdiction illegally. For this reason, and also because on a consideration of the facts and the relevant law, I have come to the conclusion that the plaint does not disclose any cause of action, and so is liable to be rejected. ( 34 ) AS regards costs, the general rule is that the costs should follow the event. The object of awarding costs is to indemnify a party against the expense of successfully vindicating his rights in Court. The quantum of costs that the Court awards has relation to the valuation of the suit. In the present case, the plaintiffs and ITC secured the services of more than one lawyer from outside, besides local counsel. Expenses in terms of fees, transport, boarding and lodging must be so enormous that the costs which the Court may allow as per the usual practice, may look to be illusory, for the recovery of which the successful party like ITC who has no office in Sikkim and who may have to again engage a lawyer from outside, may have to incur an expense which may well exceed the amount of the costs that may be awarded. The purpos of awarding costs is to compensate the winning party and not to penalise it. But, for the recovery of the costs that may be awarded if the party that is awarded costs, has to incur an expense exceeding the amount of costs, it would amount in reality, to the imposition of a penalty though, in form, it may give a different appearance. A limited company such as ITC may have no real option not to take any steps for the recovery of costs or account of the constraints of audit etc.
A limited company such as ITC may have no real option not to take any steps for the recovery of costs or account of the constraints of audit etc. Therefore, during arguments, the Court asked the learned counsel to advance arguments on the question as to whether the winning party would like to have an order of costs and, if so, what, they consider, would be a reasonable amount for quantification of counsel fee. Both the learned counsel expressed their desire to postpone the argument on this point, till the conclusion of the arguments on merit. But at the end of the arguments on merit, this point got somehow omitted to be argued, perhaps, because no party wanted to press for costs. Certificate of counsel fee was also not filed by either of them. In the circumstances, this is a fit case for making no order as to costs. ( 35 ) THESE are the reasons for the order that I passed on 22-8-1991 which runs as under:"the revision is allowed, the impugned order is set aside, the application under Order VII Rule II of the Code of Civil Procedure is allowed and the plaint is rejected. There shall be no order as to costs. Reasons shall follow. "order accordingly. --- *** ---