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2004 DIGILAW 879 (AP)

Ambadas Vittal Gajul v. S. R. Bootla

2004-08-20

L.NARASIMHA REDDY

body2004
L. NARASIMHA REDDY, J. ( 1 ) THESE two civil miscellaneous appeals are between the same parties and relate to the same subject-matter. Hence, they are disposed of through a common judgment. ( 2 ) THE appellant and the respondent in both the appeals are manufacturers and traders in textiles. Both of them deal in "dyed casement" cloth, which is used mostly for making undergarments. They have their place of business at Sircilla, Karimnagar district. ( 3 ) THE appellant filed O. S. No. 8 of 2002 in the Court of the III Additional district Judge, Karimnagar against the respondent for the relief of permanent injunction, restraining him from using the trade marks, under which he is said to have been carrying on the business, and for awarding of damages quantified at rs. 1,50,000/- for the loss of profit on account of the acts of passing off. The appellant pleaded that his is a reputed proprietary concern, undertaking manufacture and business of dyed long cloth, casement, poplin etc. , and that ever since 1986, he has been selling the cloth with a trade mark, having a semi circular inscription, ambadas Vithal gajul, Venkampet at the top, head of a ram in the middle of the star in between and ambadas Bharani at the bottom. He also narrated that he has taken steps to get the trade mark registered and even while the same is in process, the respondent had devised almost a replica of the trade mark and he is passing off the goods. He also filed LA. No. 937 of 2002 under order XXXIX, Rule 1 C. P. C. for grant of temporary injunction against the respondent from selling or offering to sell the goods with the trademark referred to above. ( 4 ) THE respondent filed O. S. No. 11 of 2002 against the appellant, almost for the same relief as in O. S. No. 8 of 2002. He pleaded that the trade mark in question was designed by him and that he has been using it since 1992. According to him, the word bharani being the star in which his son Naveen was bom, has a special significance for him. It is stated that the goods manufactured by him are of distinct quality and that over the years he had acquired substantial reputation. According to him, the word bharani being the star in which his son Naveen was bom, has a special significance for him. It is stated that the goods manufactured by him are of distinct quality and that over the years he had acquired substantial reputation. It was alleged that the appellant started using the same trade mark with some insignificant modification in the recent past and when he was about to initiate legal proceedings, the appellant filed O. S. No. 8 of 2002. He filed LA. No. 117 of 2002 under Order XXXIX, Rule 1 C. P. C. for temporary injunction. ( 5 ) THE Trial Court heard both I. A. No. 937 of 2002 in O. S. No. 8 of 2002 and la. No. 117 of 2002 in O. S. No. 11 of 2002 together. On behalf of the appellant, Exs. Al to A19 were marked and on behalf of the respondent, Exs. B1 to B27 were marked. After hearing the parties at length, the trial Court passed two separate orders dated 18. 11. 2002 dismissing LA. No. 937 of 2002 and allowing LA. No. 117 of 2002. C. M. A. Nos. 1824 and 4208 of 2003 are filed against the orders in LA. Nos. 117 and 937 of 2002 respectively. ( 6 ) SRI V. S. Raju, learned Counsel for the appellant submits that the trade mark in question was got designed by the appellant in the year 1986 and that, the appellant submitted application before the Registering authority under the TRADE MARKS ACT, 1999, 1999 (for short the Act ) for registration of the same. He contends that except mere assertion, the respondent did not place any evidence before the Trial Court to establish that he started using the trade mark even before the appellant started using the same. He further contends that even otherwise there are substantial variations in both the marks and the Trial Court was not justified in granting temporary injunction against the respondent. He states that the evidence on record warrants granting an order of temporary injunction in favour of the appellant. ( 7 ) SRI K. Henta Prakash Rao, learned Counsel for the respondent, on the other hand, submits that there is voluminous and clinching evidence to disclose that the respondent has been undertaking the business with the said trade mark from the year 1992. ( 7 ) SRI K. Henta Prakash Rao, learned Counsel for the respondent, on the other hand, submits that there is voluminous and clinching evidence to disclose that the respondent has been undertaking the business with the said trade mark from the year 1992. Referring to the certificate of Registration under A. P. G. S. T. Act, marked as Ex. B1 and Sales Tax assessments, marked as Exs. B8 tob13, the learned Counsel submits that similar evidence was not adduced by me appellant. He contends that the trademark was got designed by the respondent and the words naveen Bharani used therein have got their own personal significance to the respondent. ( 8 ) THE appellant and the respondent filed suits together with applications under order XXXIX, Rule 1 C. P. C. for identical reliefs. They claim rights in respect of a particular trademark. It is a matter of record that none of them got registered the mark. Hence, it is a case, at the most, of passing off dealt with under sub- section (2) of Section 27 of the Act. The question as to whether the acts or omissions on the part of both the parties constitute passing off goods of services as goods of the other, needs to be considered at the time of disposal of the suit. The present controversy is only as regards grant of temporary injunction. This, in turn, is governed by the provisions of Order XXXIX rules 1 and 2 C. P. C. The factors, such as, existence of prima facie case, balance of convenience etc. , need to be taken into account. Learned Counsel for both the parties have made extensive references to the evidence on record as well as the case- law. ( 9 ) BEFORE discussing the matter on merits, it is appropriate to refer to certain decided cases on the subject. However, it needs to be noticed that most of the principles enunciated in the decisions cited by the parties relate to the final adjudication of infringement of trade marks or for torts of passing off, except for a few. The distinction between an action for infringement of copyright, on the one hand, and for passing off the goods on the other, was explained by the Supreme Court in ruston and Hornby Ltd. v. Zamindars engineering Co. The distinction between an action for infringement of copyright, on the one hand, and for passing off the goods on the other, was explained by the Supreme Court in ruston and Hornby Ltd. v. Zamindars engineering Co. , AIR 1970 SC 1649 , as under:"the distinction between an infringement action and a passing off action is important. Apart from the question as to the nature of trade mark the issue in an infringement action is quite different from the issue in a passing off actioa In a passing off action the issue is as follows: "is the defendant selling goods so marked as to be designed or calculated to lead purchasers to believe that they are the plaintiffs goods?" but in an infringement action the issue is as follows: "is the defendant using a mark which is the same as or which is a colourable imitation of the plaintiff s registered trade mark?" it very often happens that although the defendant is not using the trade mark of the plaintiff, the get-up of the defendant s goods may be so much like the plaintiff s that a clear case of passing off would be proved. It is on the contrary conceivable that although the defendant may be using the plaintiff s mark the get-up of the defendant s goods may be so different from the get-up of the plaintiff s goods and the prices also may be so different that there would be no probability of deception of the public. Nevertheless, in an action on the trade mark, that is to say, in an infringement action, an injunction would issue as soon as it is proved that the defendant is improperly using the plaintiffs mark. "in Durga Dutt Sharma v. N. P. Laboratories, AIR 1965 SC 980 , it was held that an action for passing off is a common Law remedy, similar or close to an action for deceit and to that extent, it differs substantially from an action for infringement. In Ellora Industries, Delhi v. Banarasi Doss Goela, AIR 1980 Delhi 254, the Delhi High Court reviewed the case-law on the subject and laid down the principles involving the adjudication of infringement and passing off actions. Recently, the Supreme Court specifically dealt with the factors to be taken into account in an action for passing off. In Ellora Industries, Delhi v. Banarasi Doss Goela, AIR 1980 Delhi 254, the Delhi High Court reviewed the case-law on the subject and laid down the principles involving the adjudication of infringement and passing off actions. Recently, the Supreme Court specifically dealt with the factors to be taken into account in an action for passing off. In cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd. , AIR 2001 SC 1952 , ithe Supreme Court enlisted the factors as under: "broadly stated in an action for passing off on the basis of unregistered trade mark generally for deciding the question of deceptive similarity the following factors to be considered. (A) The nature of the marks i. e. , whether the marks are word marks or label marks or composite marks, i. e. , both words and label works. (B) The degree of resembleness between the marks, phonetically similar and hence similar in idea. (C) The nature of the goods in respect of which they are used as trade marks. (D) The similarity in the nature, character and performance of the goods of the rival traders. (E) The class of purchasers who are likely to buy the goods bearing the marks they require, or their education and intelligence and a degree of care they are likely to exercise in purchasing and/or using the goods. (F) The mode of purchasing the goods or placing orders for the goods and (G) Any other surrounding circumstances which may be relevant in the extent of dissimilarity between the competing marks. In Parle Products (P) Ltd. v. J. OP. and co. , Mysore, AIR 1972 SC 1359 , the supreme Court held that the broad and essential features of the trade marks in dispute are to be considered to decide as to whether one mark is deceptively similar to the other. ( 10 ) THESE decisions would become strictly applicable and relevant when the main dispute in the suit is taken up for adjudication. However, the broad principles laid down therein need to be kept in mind even while deciding the applications for temporary injunction. The Delhi High court in its judgments in M/s Manoj Plastic india v. M/s. Bhola Plastic Industries, air 1984 Del. 441 and in M/s. Hindustan radiators v. M/s. Hindustan Radiators ltd. , AIR 1987 Del. 353 , considered the principles to be followed for granting temporary injunction in such matters. The Delhi High court in its judgments in M/s Manoj Plastic india v. M/s. Bhola Plastic Industries, air 1984 Del. 441 and in M/s. Hindustan radiators v. M/s. Hindustan Radiators ltd. , AIR 1987 Del. 353 , considered the principles to be followed for granting temporary injunction in such matters. In the latter, it was held:"in an application for grant of temporary injunction, in an action for infringement of trade mark and passing off, a plaintiff has to establish (a) that plaintiff has been using its trading style and trade mark for quite a long period and continuously whereas the defendant has entered into the said field only recently, (b) that there has not been much delay in the filing of the suit for injunction by the plaintiff, (c) that the goods of the plaintiff have acquired a distinctiveness and are associated in the mind of the general public as goods of the plaintiff, (d) that nature of activity of the plaintiff and the defendant is same or similar, (e) that the goods of the parties to which the trade mark of the plaintiff is associated are same or similar, (f) that the user of the said trade mark or trade name by the defendant is likely to deceive and cause confusion in the public mind and injury to the business reputation of the plaintiff, (g) that the sphere of activity and the market of consumption of goods of the parties are the same, (h) that the customers of the plaintiff, inter alia, include uneducated, illiterate and unwary customers who are capable of being deceived or confused or misled. "these principles were also dealt with extensively by this Court in Sri Sai Agencies pvt. Ltd. v. Chintala Rama Rao, 1997 (5) ald 384 = 1997 Patent and Trade Mark cases 17. ( 11 ) EVEN while applying these principles, it should be kept in mind that the grant of temporary injunction is a preventive action and that the Courts would be slow to interfere with the state of affairs, which is already in existence. In a way, it can be said that by an order of temporary injunction, the defendant in a suit can be restrained from infringing the rights of the plaintiff, but if the infringement has already taken place or when it is continuing, much more caution and care is needed. In a way, it can be said that by an order of temporary injunction, the defendant in a suit can be restrained from infringing the rights of the plaintiff, but if the infringement has already taken place or when it is continuing, much more caution and care is needed. Rules 1 and 2 of Order XXXIX c. P. C. specifically deal with the rights in respect of the property in dispute or contractual rights. It is true that the expression other injury of any kind , occurring in Rule 2, takes in its fold various other lands of rights. However, as the well known legal maxim Damnum Sine Injuria suggests, in the absence of definite right, mere injury cannot clothe the plaintiff with a remedy. That is the reason why while in case of trade marks, mere use of the mark, with or without consequential loss, gives rise to cause of action for the owner of the same, in the case of actions for passing off, several other factors, including the intention on the part of the defendant to mislead the purchasers, needs to be established on the basis of clinching evidence. ( 12 ) REVERTING to the facts of the case, the appellant specifically pleaded that he has been using the trade mark in question since 1986. In support of his contention, he filed third party affidavits of several persons. Important among them is the one filed by sri Annaldas Balram. He stated that he knows the appellant and the respondent and that he is a screen designer. He categorically stated that the appellant herein has been using the brand name bharani Ambadas and manufacturing the goods since 1986. From his affidavit, it is evident that the mark in dispute was designed by the deponent of the said affidavit and that it has been in use since 1986. As observed earlier, the evidence in the form of affidavits and documents was treated as common to both the applications. The respondent did not choose to contradict the correctness of this affidavit. ( 13 ) THE Trial Court proceeded as though the starting point of commencement of business is the starting point for using the mark also. Further, the starting point of the business by the parties was decided solely on the basis of registration under the a. P. G. S. T. Act. ( 13 ) THE Trial Court proceeded as though the starting point of commencement of business is the starting point for using the mark also. Further, the starting point of the business by the parties was decided solely on the basis of registration under the a. P. G. S. T. Act. To rest the conclusion as to the conducting or commencement of the business, on such registration alone does not appear to be safe. There may be instances where, a person or a firm may have commenced the business without such registration and instances are not lacking where no business activity is undertaken by firms even after such registration. If any business is carried out, without registration, and in contravention of the provisions of the A. P. G. S. T. Act, it may give rise to certain consequences. However, it cannot be inferred that no business takes place without registration. Except the evidence in relation to registration under A. P. G. S. T. Act, the respondent did not place any material in support of his contention that he has been using the mark from an earlier point of time compared to the appellant. Further, the fact that it is the appellant, who took steps to get the trade mark registered and filed the suit much before the respondent initiated action cannot be ignored. ( 14 ) EVEN assuming that the respondent started using the trade mark much before the appellant, the latter can be injuncted, if only it is found that both the marks are substantially similar. The Supreme Court and other High Courts held that in an action for passing off, the marks in dispute need not be identical. Much would depend on the type of the customers, who commonly use the products, their perceptive capacities and degree of similarity of the marks. The marks used by the appellant on the one hand and the respondent on the other were placed before the Trial Court as well as this Court. A comparison of the same discloses that there are substantial differences between them. In the mark being used by the appellant, the name of Ambadas Vittal Gajul, venkampet are written in an arch pattern at the top, followed by a star having the head of a ram in it. Underneath this, the name ambadas Bharani is written in separate blocks. The words since 1986 are also written. In the mark being used by the appellant, the name of Ambadas Vittal Gajul, venkampet are written in an arch pattern at the top, followed by a star having the head of a ram in it. Underneath this, the name ambadas Bharani is written in separate blocks. The words since 1986 are also written. Thereafter, a logo with a map of India with a circle around it and the words av Gajul written on the periphery and product written across the circle find place. The mark used by the respondent does not contain any writing over the star with head of the ram in it. Underneath the star, the words naveen Bharani are inscribed. The resemblance, if at all, appears to be only as regards start and the words bharani . Learned Counsel for the appellant submits that to avoid disputes, the appellant had agreed to remove the word bharani . If that is so, the prominent feature of the mark used by the appellant could be his name and the star. ( 15 ) AS observed in the initial paragraphs, the cloth is used mostly for making undergarments. The bulk of material will be purchased by the manufacturers of such garments. The retail sales of this commodity do not appear to be of substantial magnitude. The right of an individual in relation to a particular mark needs to be protected, even if it is not registered, and it cannot be permitted to be used by another citizen while carrying on the business. At the same time, the freedom of the citizens to carry on trade of their choice, guaranteed under the Constitution of India, cannot be curtailed except in accordance with law. None of the parties have proved, at least prima facie, they sustained losses of a particular magnitude on account of use of the mark by the other. A perfect balance needs to be maintained between these two. Any findings as regards the similarity or otherwise of the marks is likely to have its shadow on the adjudication of the dispute in the suits. ( 16 ) HENCE, this Court is of the view that the interests of both the parties would be protected if the difference as to the marks, as pointed out in the previous paragraphs, is directed to be maintained. The civil miscellaneous appeals are, therefore, allowed and the orders under appeal are set aside. ( 16 ) HENCE, this Court is of the view that the interests of both the parties would be protected if the difference as to the marks, as pointed out in the previous paragraphs, is directed to be maintained. The civil miscellaneous appeals are, therefore, allowed and the orders under appeal are set aside. The applications, in turn, are allowed in part in the following terms: (A) The appellant shall be entitled to use the mark in dispute, but shall not use the word bharani in any place of the mark or other markings on the product; (B) The appellant shall also continue to prominently print the name ambadas gajul in an arch pattern over the star. (C) This use shall be subject to the outcome of the suit and without prejudice to the rights of the parties to seek damages on proving that they have sustained loss in their business on account of the acts alleged by them against the others. (D) There shall be no order as to costs.