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Madhya Pradesh High Court · body

2009 DIGILAW 122 (MP)

Marble City Hospital and Research Centre (P) Ltd. v. City Hospital and Research Centre (P) Ltd.

2009-01-23

A.M.NAIK

body2009
ORDER 1. This appeal is directed against the order dated 30.7.2008 rejecting thereby an application for temporary injunction by the Court of District Judge, Jabalpur in Civil Suit No.12-A/2008. 2. Facts involved herein are that the plaintiff is a Marble City Hospital and Research Centre Pvt. Ltd. with its registration under the provisions of the Companies Act, w.e.f. 11.7.1997. Respondents No.2 to 5 leased out their property to the plaintiff-appellant for running its hospital in it. Presently the lessors are realising rent @ Rs.1,36,000/- per month in addition to Rs.20,000/- per month for the top floor. It is situated on main road in front of Hero Honda showroom. Respondent No.5 in addition to being one of the lessors has also purchased the shares and remained director of the plaintiff-appellant till 31.1.2005. There arose a dispute about his directorship. The Company Law Board, New Delhi directed for his reinstatement as director against which an appeal bearing M.A. (Company) No.01/07 preferred by the plaintiff-appellant is allegedly pending wherein an interim stay order is stated to have been issued. 3. Respondent No.5 purchased a piece of land behind the plaintiff appellant's said hospital building in the year 2006. This is adjacent to the appellant's hospital premises. Both the pieces of land i.e. the piece of land purchased- by respondent No.5 and the piece of land on which plaintiff's hospital is situated originally belonged to one Balbir Singh Anand forming plot No.21. It is pleaded by the plaintiff-appellant that the shareholder doctors of the plaintiff hospital are having special expertise in the medical fields and with the passage of time, the plaintiff hospital has acquired a good degree of reputation in and around the town of Jabalpur and the patients are coming to it due to its name and fame on account of services rendered by it. It is stated that the hospital, though named as Marble City Hospital, is also known/called as City Hospital, Marble Hospital or City Hospital. The word 'city' has attained a trade name for the appellant and it is identified by it because in Jabalpur town there was no other hospital using the name 'Marble City Hospital' or 'City Hospital' either jointly or severally except the appellant. The appellant came to know that respondents were starting a hospital in the name of "City Hospital and Research Centre Pvt. Ltd." on the adjoining piece of land. The appellant came to know that respondents were starting a hospital in the name of "City Hospital and Research Centre Pvt. Ltd." on the adjoining piece of land. It has been objected on the ground that the defendants have no right to use the name of appellant which is substantially confusing with appellant's name. Plaintiff-appellant instituted a suit for declaration and injunction, simultaneously with an application for temporary injunction to restrain the defendants from using a trade name/trade mark City Hospital and Research Centre/City or any trade name or trade mark which is identical to and/or deceptively similar or resembling to appellant's trade name and mark as the same is likely to deceive or cause confusion. Restraint order was also prayed for against respondents No.2 to 5 from using the said plot for hospital business. 4. Defendants-respondents submitted a joint reply refuting thereby the allegations contained in the plaint as well as the application for temporary injunction. They have also submitted a detailed reply before this Court. It is stated that the answering respondents have started a company by the name of 'M/s. City Hospital and Research Centre Private Limited' having its registered official address at New 112, Old 14, South Civil Lines, Pachpedi, Jabalpur. The company is registered and known as Corporate Identity No.U85110MP008PTC020309. There are three directors in the company namely Shri Manjeet Singh Mokha, Smt. Gurucharan Kaur Mokha and Smt. Jasmeet Kaur Mokha. Respondent No.2 in the present case is the Managing Director of the aforesaid company The hospital of the company is being started at 21/2, Block No.3, Civil Station, Jabalpur on a land admeasuring 18069 sq.ft. A lease has been agreed upon in favour of the company of the answering respondents, on 7.5.2008 for the purpose of land situated at plot No.21/2, North Civil Line. The land was purchased from Balbir Singh Anand on 19.4.2007. The aforesaid sale-deed was executed between Shri Sarabjeet Singh Mokha, Shri Manjeet Singh Mokha, Smt. Gurucharan Mokha, Smt. Jasmeet Kaur Mokha and Balbir Singh Anand as vendor. 5. It is further stated that the company has invested huge amount of money including heavy loans and has constructed a five storeyed building comprising of two hundred beds hospital having as many 41 departments and units of the most advanced technology available in the town involving as many as 74 medical specialists and doctors of different fields. 5. It is further stated that the company has invested huge amount of money including heavy loans and has constructed a five storeyed building comprising of two hundred beds hospital having as many 41 departments and units of the most advanced technology available in the town involving as many as 74 medical specialists and doctors of different fields. The hospital of the answering respondents is a multi-speciality hospital providing para medical support. The functioning is mainly based upon the references by the doctors and other Nursing Homes. It is specifically stated that the word "city" does not denote or reflect or have a phonetic confusion with the name of Marble City as the word Marble in the name of appellant's company is more significant. Thus, it is stated that there is no similarity between Marble City and City Hospital and the respondents have not chosen to obtain advantage by way of creating confusion with the name of the appellants company and passing of their business giving a deceptive or phonetic meaning which may be identical to the appellant's company. Accordingly, a prayer was made for rejection of the application for temporary injunction. 6. Learned District Judge, Jabalpur vide his order dated 30.7.2008 dismissed the application for temporary injunction holding that the limbs of prima facie case, balance of convenience and irreparable injury are not in favour of the plaintiff-appellant. Hence, this appeal. 7. Shri P.R. Bhave, senior counsel with advocates Shri R.K. Sanghi and Shri S.A. Khan, made their submissions on behalf of the appellant whereas Shri Ajay Mishra, senior counsel with advocates Shri Pankaj Dubey and Shri Ankit Saxena, advanced arguments on behalf of respondents. 8. Considered the submissions and perused the record including the paper-book furnished by the parties. 9. First, I feel it proper to deal with preliminary objections of Shri Ajay Mishra, learned senior counsel appearing for respondents. First and foremost objection of Shri Ajay Mishra, learned senior counsel is that the suit of the plaintiff does not fall under section 134 of the Trade Marks Act, 1999 and no application for temporary injunction could be entertained on the pleadings contained in the plaint as well as in the application under Order 39 rules 1 and 2 CPC. First and foremost objection of Shri Ajay Mishra, learned senior counsel is that the suit of the plaintiff does not fall under section 134 of the Trade Marks Act, 1999 and no application for temporary injunction could be entertained on the pleadings contained in the plaint as well as in the application under Order 39 rules 1 and 2 CPC. Section 134 empowers a District Court to entertain a suit : (a) for the infringement of a registered trade mark; or (b) relating to any right in a registered trade mark; or (c) for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff's trade mark, whether registered or unregistered. It further enables the registered proprietor and the registered user to bring the suit by virtue of explanation contained in it. "Mark" and "Trade Mark" are defined in clause (m) and clause (zb) of sub-section (1) of section 2 of the said Act in the following manner : "(m) "mark" includes a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof; (zb) "trade mark" means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of any person from those of others and may include shape of goods, their packaging and combination of colours. 10. Aforesaid definitions make it clear that the definition of mark is of inclusive nature whereas definition of trade mark is of exhaustive nature. Clause (c) of section 134 is not confined to registered trade marks. Plaintiff's contention is that he has been using the name of Marble City Hospital and Research Centre Pvt. Ltd. since 1997 as its trade name which would fall within the word "mark" as defined in clause (s). "Trade mark" defined in clause (zb) means a mark capable of being represented graphically. Word "graphical representation" has been defined in the Trade Marks Rules, 2002 as representation of a trade mark for goods or services in paper form. Thus, words "Marble City Hospital and Research Centre' are found to be capable of being represented in graphical manner and fall within the definition of trade mark for the purposes of clause (zb) as well as provisions of the Trade Marks Act, 1999. 11. Thus, words "Marble City Hospital and Research Centre' are found to be capable of being represented in graphical manner and fall within the definition of trade mark for the purposes of clause (zb) as well as provisions of the Trade Marks Act, 1999. 11. Further submission of Shri Ajay Mishra, learned senior counsel is that sub-section 2 of section 20 of the Companies Act, 1956 has been amended in the year 1999 and the plaintiff had an alternate remedy in the form of section 22 of the said Act. Plaintiff-appellant could have applied to the Central Government for making change in the name of the defendants' company. This, too, is not impressive because the right of the plaintiff to sue for the purposes mentioned in section 134 of the Trade Marks Act, 1999 is in no way curtailed by section 22(supra). Moreover, section 22 does not enable an unregistered proprietor of the trade mark to submit an application for change in the name of another company seeking its registration by identical name. 12. It has been contended on behalf of the appellant that the premises of the plaintiff-company is on lease and the lessors were restrained under the lease-deed from creating a third party interest detrimental to carrying out a proposed business by the lessee. Relevant clause contained in the lease-deed is reproduced below for convenience : "The lessor shall have no right to raise further construction or by any act create a third party interest detrimental to the carrying out of proposed business by the lessee, during the tenure of this and subsequent lease. However, with mutual consent of lessee and lessor further expansion of built-up area may be permitted. Any such expanded area will be at the disposal of the lessee exclusively." Firstly, the aforesaid clause relates to the premises in question only that, too, during the tenure of the lease. The disputed hospital is on separate land and not on the leased premises. Secondly, there is nothing on record for ascertaining the status of lease in presenti. This being so, I do not agree with the contention of the appellant's learned counsel that the lessors are prohibited from running any hospital on another piece of land which was not owned by the lessors at the time of creation of the said lease on 13.8.1997. 13. This being so, I do not agree with the contention of the appellant's learned counsel that the lessors are prohibited from running any hospital on another piece of land which was not owned by the lessors at the time of creation of the said lease on 13.8.1997. 13. As regards merits of the case, it is not disputed that Marble City Hospital and Research Centre is running since 1997 whereas the defendants have opened the new hospital in the name of City Hospital and Research Centre. The words Marble City Hospital and Research Centre Pvt. Ltd. and City Hospital and Research Centre Pvt. Ltd. do not tally fully but they are partly, substantially and phonetically identical. They cannot be said to be absolutely distinct and different. There perhaps would not have any dispute, if they were situated at different locations with a substantial distance between them. The dispute seems to be more or less on account of inter se dispute between the lessor and lessee of the Marble City Hospital and Research Centre. 14. Hon'ble Supreme Court of India in the case of Laxmikant Patel v. Chetanbhai Shah and another [ (2002)3 SCC 65 ], has observed : "It is common in the trade and business for a trader or a businessman to adopt a name and/or mark under which he would carry on his trade or business. According to Kerly (Law of Trade Marks and Trade Names, Twelfth Edition, para 16.49), the name under which a business trades will almost always be a trade mark (or if the business provides services, a service mark, or both). Independently of questions of trade or service mark, however, the name of a business (a trading business or any other) will normally have attached to it a goodwill that the Courts will protect. An action for passing-off will then lie wherever the defendant company's name, or its intended name, is calculated to deceive, and so to divert business from the plaintiff, or to occasion a confusion between the two businesses. If this is not made out there is no case. The ground is not to be limited to the date of the proceedings; the Court will have regard to the way in which the business may be carried on in the future, and to its lot being carried on precisely as carried on at the date of the proceedings. If this is not made out there is no case. The ground is not to be limited to the date of the proceedings; the Court will have regard to the way in which the business may be carried on in the future, and to its lot being carried on precisely as carried on at the date of the proceedings. Where there is probability of confusion in business, an injunction will be granted even though the defendants adopted the name innocently." It is further observed in paragraph 10 : "A person may sell his goods or deliver his services such as in case of a profession under a trading name or style. With the lapse of time such business or services associated with a person acquired reputation or goodwill which becomes a property which is protected by Courts. A competitor initiating sale of goods or services in the same name or by imitating that name results in injury to the business of one who has the property in that name. The law does not permit anyone to carry on his business in such a way as would persuade the customers or clients in believing that the goods or services belonging to someone else are his or are associated therewith. It does not matter whether the latter person does so fraudulently or otherwise. The reasons are two. Firstly, honesty and fair play are, and ought to be, the basic policies in the world of business. Secondly, when a person adopts or intends to adopt a name in connection with his business or services which already belongs to someone else it results in confusion and has propensity of diverting the customers and clients of someone else to himself and thereby resulting in injury." 15. Hon'ble Supreme Court in the case of Parle Products (P) Ltd. v. J.P. and Company, Mysore [ AIR 1972 SC 1359 ], has held that in order to come to the conclusion whether one mark is deceptively similar to another, the broad and essential features of the two are to be considered. They should not be placed side by side to find out if there are any differences in the design and if so, whether they are of such character as to prevent one design from being mistaken for the other. They should not be placed side by side to find out if there are any differences in the design and if so, whether they are of such character as to prevent one design from being mistaken for the other. It would be enough if the impugned mark bears such an overall similarity to the registered mark as would be likely to mislead a person usually dealing with one to accept the other if offered to him. Thus, the test to determine the distinction is the similarity and not the dissimilarity between the competing marks. 16. Phonetical similarity is also liable to be taken into consideration as observed by the Supreme Court in the case of Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd. [ (2001)5 SCC 73 ]. In Cadila's case (supra), the necessary factors for deciding the question of deceptive similarity in an action of passing-off on the basis of unregistered trade mark generally has been enumerated as follows : "(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 reasembleness 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, on 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." 17. Looking to the dispute of present nature, following may be deducted for deciding the question of deceptive similarity : "(a) Nature of the trade mark, i.e., "Marble City Hospital and Research Central Pvt. Ltd." and "City Hospital and Research Centre Pvt. Ltd.". Except the word "Marble", the word marks "City Hospital and Research Centre" are alphabetically common. (b) Degree of reasemblences between the marks -- except the word "Marble", remaining name is alphabetically as well as phonetically common. (c) Nature of service. Both provide medical treatment services. Except the word "Marble", the word marks "City Hospital and Research Centre" are alphabetically common. (b) Degree of reasemblences between the marks -- except the word "Marble", remaining name is alphabetically as well as phonetically common. (c) Nature of service. Both provide medical treatment services. (d) Substantial similarity in the nature and character of the services rendered in the fields of Medicine, Orthopaedics, Gynaecology, Obstertrics, ENT, Ophthalmology, Neurosurgery etc. (e) Class of patients -- substantially identical. (f) Dissimilarity is only about the word "Marble" which is found in the name of the plaintiff's hospital alone." In the case of Glenny v. Smith [(1865)2 Drew and Sm. 476; 11 Jur.NS 964; 13 LT 11; 13 WR 1032; 6 NR 363; 62 ER 701], it was held that : "It is not the question whether the public generally or even a majority of the public is likely to be mislead; but whether the unwary, the heedless, the incautious portion of the public would be likely to be misled." 18. From the aforesaid, it is clear that the two names of the plaintiff's and defendants' hospital namely Marble City Hospital and Research Centre Pvt. Ltd. and City Hospital and Reserve Centre Pvt. Ltd. do not have total similarity, but, they are not equally totally distinct. Literate class may not be misled, but misleading of illiterate class cannot be totally ruled out, more so, because both the hospitals are situated adjoing to each other at a common place. Supreme Court in India in a recent case of Heinz Italia and another v. Dabur India Ltd. [ (2007)6 SCC 1 ], has followed Lord Diplock's decision in Erven Warnink BV v. J. Townend and Sons that : "The modern tort of passing off has five elements i.e. (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 foreseeable consequences), 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." 19. In another case M/s. Satyam Infoway Ltd. v. M/s. Sifynet Solutions Pvt. Ltd. [ AIR 2004 SC 3540 ], Supreme Court has observed : "The next question is would the principles of trade mark law and in particular those relating to passing off apply? An action for passing off, as the phrase "passing off' itself suggests, is to restrain the defendant from passing off its goods or services to the public as that of the plaintiff's. It is an action not only to preserve the reputation of the plaintiff but also to safeguard the public. The defendant must have sold its goods or offered its services in a manner which has deceived or would be likely to deceive the public into thinking that the defendant's goods or services are the plaintiff's. The action is normally available to the owner of a distinctive trade mark and the person who, if the word or name is an invented one, invents and uses it. If two trade rivals claim to have individually invented the same mark, then the trader who is able to establish prior user will succeed." 20. Normally, while deciding an application for temporary injunction, three necessary limbs of prima facie case, balance of convenience and irreparable injury are taken into consideration. Fourth factor of conduct is also relevant as observed by this Court long back in the case of Chhotey Singh and others v. Gangadhar and others [1972 JLJ SN 68]. Injunction is a relief of equitable nature and a balance is to be struck while dealing with a matter of injunction in as much as it is to be ensured that the plaintiff's rights are to be protected without causing obstruction/disturbance to the exercise of rights by the defendants in a rightful manner. While striking a balance, conduct of the parties gains important significance. 21. Now corning to the fourth factor in the light of the aforesaid, certain important facts are liable to be taken into consideration. Defendant City Hospital while making recruitment published an advertisement in the newspaper "Dainik Bhaskar" with the following words : "Contact with Full Resume : City Hospital, Opp. Hero Honda Showroom; Near 2nd Bridge, North Civil Lines, Jabalpur 482001. Now corning to the fourth factor in the light of the aforesaid, certain important facts are liable to be taken into consideration. Defendant City Hospital while making recruitment published an advertisement in the newspaper "Dainik Bhaskar" with the following words : "Contact with Full Resume : City Hospital, Opp. Hero Honda Showroom; Near 2nd Bridge, North Civil Lines, Jabalpur 482001. In paragraph 24 of the reply to the civil suit on behalf of defendants No.1 to 4 it has been specifically averred that the location of the hospital of the answering defendants is not in front of the hospital of the plaintiff's or next to it. The location is behind the hospital. In the sale-deed of the land purchased by the defendants for construction of their hospital, the location of the plot of the City Hospital is shown as behind Marble City Hospital and Research Centre Pvt. Ltd., Jabalpur. Thus, it is clear that the defendants intended to open a new hospital behind the plantiff's hospital. 22. However, the same defendants in another civil suit bearing No.198.A/2006 submitted their reply in the Court of Civil Judge, Class II, Jabalpur to the following effect: "That the defendant No.1, is the land owner and share holder to a Hospital named as 'Marble City Hospital' Jabalpur situated at North Civil Lines, Jabalpur. The aforesaid hospital is centrally located and extends medical facilities to a large number of people within Jabalpur. It is also authorized by the Central Government to extend treatment to the employees, officers and the families. The aforesaid hospital is running successfully and is having name and fame in the town and other places also. Behind the aforesaid hospital was the land of the defendant No.2 having an absolute title in favour of the defendant No.2 vide an agreement of sale dated 22.7.2006, the defendant No.1, entered into an agreement with the defendant No.2 for the land situated at 21/2, Block No.3, North Civil Lines admeasuring 18000 sq.fts. The purpose of purchasing the aforesaid land was to extend the building of the hospital as it is required in the present situation. The construction work of the hospital has already being initiated by the defendant No.1" 23. The purpose of purchasing the aforesaid land was to extend the building of the hospital as it is required in the present situation. The construction work of the hospital has already being initiated by the defendant No.1" 23. Again in another suit bearing No.40-A/06, respondent No.5 has stated in his application under section 250 of MPLRC before the Court of Tahsildar, Omti, Jabalpur : "That the applicant, is the land owner and share holder to a hospital named as 'Marble City Hospital' Jabalpur situated at North Civil Lines, Jabalpur. The aforesaid hospital is centrally located and extends medical facilities to a large number of people within Jabalpur. It is also authorized by the Central Government to extend treatment to the employees, officers and the families. The aforesaid hospital is running successfully and is having name and fame in the town and other places also. Behind the aforesaid hospital was the land of one Shri Balbir Singh Anand having an absolute title in favour of Shri Balbir Singh Anand. Vide an agreement of sale dated 22.7.2006, the applicant has entered into an agreement with Shri Balbir Singh Anand for the land situated at 21/2, Block No.3, North Civil Lines admeasuring 18000 sq.fts. The aforesaid land is situated exactly behind the Marble City Hospital, Jabalpur. The purpose of purchasing the aforesaid land was to extend the building of the hospital as it is required in the present situation. The construction work of the hospital has already being initiated by the applicant." 24. From the aforesaid, it is clear that the plaintiff's hospital is a well reputed hospital with a known goodwill. Defendants' hospital, though is a separate entity, may mislead illiterate and unwary patients. It is true that the defendants-respondents even before this Court have categorically stated in paragraph 9 that they have not chosen the name of City Hospital and Research Centre to obtain advantage and passing off their deceptive or phonetic similarity identical to the appellants company. At this juncture section 27 of the Trade Marks Act, 1999 is also to be taken note of which recognises common right of the trade mark owner to take action against any person for passing off services. One important fact in the case which cannot be lost sight of is that the City Hospital of the defendants has already been inaugurated on 12.7.2008 and is running since then. One important fact in the case which cannot be lost sight of is that the City Hospital of the defendants has already been inaugurated on 12.7.2008 and is running since then. This being so, there cannot be blanket restraint against user of land for hospital or user of words "City Hospital and Research Centre". 25. Thus, the findings of the learned trial Court about prima facie case, balance of convenience and irreparable injury are found to have been recorded ignoring the aforesaid aspects. In the totality of the facts and circumstances, more so, on account of partial similarity, alphabetically and phonetically between the names of the two hospitals, and further in view of the misleading statements of the defendants as stated hereinabove representing thereby construction of the City Hospital and Research Centre Pvt. Ltd. as for extending the existing Marble City Hospital (this misrepresentation is not shown to have been withdrawn till date), this Court finds it appropriate to order that the defendants would be entitled to use their trade name of 'City Hospital and Research Centre Pvt. Ltd.' only after inscribing in English or Hindi as the case may be in bracket below its name everywhere on the name plates and at advertising places in bold block letters (DISTINCT FROM MARBLE CITY HOSPITAL AND RESEARCH CENTRE Pvt. Ltd). Applications under Order 39 rules 1 and 2 and section 151 CPC submitted before the trial Court is accordingly disposed of by this order, in the aforesaid manner which would serve the ends of justice so far as both the parties are concerned. This order would remain operative during pendency of the civil suit or for a period of six months, after the plaintiff vacates the present premises of Marble City Hospital and Research Centre and hands it over to the lessors in due manner, whichever is earlier. Compliance of this order is to be made within fifteen days from today. Appeal accordingly stands disposed of impugned order stands modified/superseded to the aforesaid extent. No order as to costs.