Manishankar Oils Pvt. Ltd v. S. V. M. Oil Industries
2016-12-22
VEERENDR SINGH SIRADHANA
body2016
DigiLaw.ai
JUDGMENT : Veerendr Singh Siradhana, J. The instant appeal projects a challenge to the order dated 11th February, 2013, made by the trial Court, declining the application for grant of Temporary Injunction under Order 39 Rule and 2 CPC as well as order dated 17th July, 2013, declining the review application instituted for review of the order dated 11th February, 2013. 2. Shorn off unnecessary details, the essential skeletal material facts necessary for appreciation of the controversy are that the plaintiff-appellant instituted suit proceedings for permanent injunction against the defendant-non-appellant for the non-appellant infringed the exclusive use of trade mark "KABIRA". It is pleaded case of the plaintiff-appellant that the appellant-Company is registered under the Companies Act, 1956. The company is into the business of manufacture and sale of large variety of edible oils for human consumption under the trade mark "KABIRA". The appellant-Company also obtained a certificate of authorization to use of agmark from the Department of Agricultural and Cooperative, Government of India. The trade mark "KABIRA" acquired a high degree of distinctiveness on account of its long and extensive use in the market throughout the country. Thus, the plaintiff-Company, with reference to the trade mark, has acquired vast, enviable and enduring reputation as well as goodwill. 3. Learned counsel for the appellant, reiterating the facts and grounds of the memo of appeal asserted that on or about 11th September, 2012, the appellant-company learnt that the defendant-non-appellant was marketing edible oil under its trade mark, which phonetically sounded identical for the letter "i" was substituted by "ee", in the trade name "KABIRA" with a fraudulent and malafide intention to take advantage of invaluable reputation and goodwill of the appellant-Company and has resulted into dishonest and illegal gains. The non-appellant made the gain by misleading the traders, customers and the general public. It is further contended that the trade mark "KABIRA" is being used as trade mark by the appellant-Company since year 1999 and was continuously in use up to 23rd September, 2008. The appellant, placed on record several documents before the trial Court in support of user of the trade mark "KABIRA".
It is further contended that the trade mark "KABIRA" is being used as trade mark by the appellant-Company since year 1999 and was continuously in use up to 23rd September, 2008. The appellant, placed on record several documents before the trial Court in support of user of the trade mark "KABIRA". The trial Court while declining the review application instituting for review of the order dated 11th February, 2013, did take note of the fact that the documents as to use of the trade mark "KABIRA", were produced and placed on record with reference to year 1999, but those documents by mistake were enclosed with the main file of the suit proceedings and were not including in the application under Order 39, Rule 1 and 2 CPC, and therefore, could not be considered. The fact that the documents are also on record with reference to the use of the trade mark with effect from 12th April, 2010 and onwards, is also not in dispute. 4. An application for registration of the trade mark "KABIRA" was filed on 9th July, 2011, bearing number 2172935 and Registration Certificate has also been accorded in favour of the appellant on 26th August, 2014. Thus, the plaintiff-appellant has staked his claim on the principle of "passing of goods or services" as contemplated under Section 27 of the Trade Marks Act, 1999 (for short the Act of 1999). In support of his submissions, learned counsel has placed reliance on the opinion of the Supreme Court in the cases of Laxmikant V. Patel v. Chetan Bhai Shah & Anr., 2002 (24) PTC (SC) 1 : (2002) 3 SCC 65 , Midas Hygiene P. Ltd. v. Sudhir Bhatia, 2004 (28) PTC 121 (SC) : (2004) 3 SCC 90 , Heinz Italia v. Dabur India Ltd., (2007) 6 SCC 1 , N.R. Dongre v. Whirlpool Corp., (1996) 5 SCC 714 , Century Traders v. Roshan Lai Duggar, PTC (Suppl) (1) 720 (Del)(DB) : AIR 1978 Delhi 250, Satyanarayan Agarwal & Anr. v. Khandelwal Food Products: 2015 (62) PTC 336 (Raj.) : 2015 (2) CDR 733 (Raj.), International Dog Bazar v. International Dog World, 2016 (66) PTC 30 (Raj.) : AIR 2016 (Raj.) 81 , Maheshawari Tea Co.
v. Khandelwal Food Products: 2015 (62) PTC 336 (Raj.) : 2015 (2) CDR 733 (Raj.), International Dog Bazar v. International Dog World, 2016 (66) PTC 30 (Raj.) : AIR 2016 (Raj.) 81 , Maheshawari Tea Co. Pvt. Ltd. v. Vijay Agencies, 2016 (67) PTC 116 (Raj.) : AIR 2016 (Raj.) 161 , Duncan Agro Industries Ltd. v. Somabhai Tea Processors (P) Ltd., 2000 (Supl.) (2) 839 (Guj.) : 1995 1 GLR 380 , Bajaj Auto Limited v. TVS Motor Co. Ltd., 2009 (41) PTC 398 (SC) : (2009) 9 SCC 797 , Lalit Kumar Arya v. Apsana gobal Sugnandhy (P) Ltd., 2011 (48) PTC 182 (Del.) : ILR (2011) Supp. (4) Delhi 710, Skyline Edu. Inst. (I) Pvt. Ltd. v. S.L. Vaswani, 2010 (42) PTC 217 (SC) : (2010) 2 SCC 142 , T.V. Venugopal v. Ushodaya Enterprises Ltd., 2011 (45) PTC 433 (SC) : (2011) 4 SCC 85 , Neon Laboratories Ltd. v. Medical Technologies Ltd., (2016) 2 SCC 672 , Amaravati Enterprises v. Karaikudi Chettinadu, 2008 (36) PTC 688 (Mad.)(DB). 5. Per contra; Mr. Amit Jindal, learned counsel, appearing for defendant-non-appellant while supporting the impugned order declining the application under Order 39, Rule 1 and 2 dated 11th February, 2013 so also the order dated 17th July, 2013, made on review application by the trial Court, vehemently argued that the plaintiff-appellant cannot claim exclusive right on the user of the trade mark "KABIRA" in the face of Section 34 of the Act of 1999, which carves out an exception, if the trade mark was not in continuous use. Thus, the rights of the traders who may be in possession of a registration certificate for the use of trade mark, cannot be defeated. It is further urged that the appellant has not approached the Court with clean hands and in guilty of suppression of material facts having important bearing on the merits of the case. According to learned counsel, the appellant used the trade mark "KABIRA" only upto 23rd September, 2008. Further, the appellant surrendered the trade mark "agmark" earlier acquired. Further, the non-appellant instituted the application for registration of trade mark "KABIRA" on 9th July, 2011, and registration certificate was accorded in favour of the non-appellant on 26th October, 2014. Thus, the appellant cannot stake claim for exclusive use of the trade mark "KABIRA".
Further, the appellant surrendered the trade mark "agmark" earlier acquired. Further, the non-appellant instituted the application for registration of trade mark "KABIRA" on 9th July, 2011, and registration certificate was accorded in favour of the non-appellant on 26th October, 2014. Thus, the appellant cannot stake claim for exclusive use of the trade mark "KABIRA". In support of his submissions, learned counsel has relied upon the opinion of the Supreme Court in the case of Uniply Industries Ltd. v. Unicorn Plywood Pvt. Ltd. & Ors.: decided on 1st May, 2001: Appeal (Civil) 3415-3420/2001 and Amaravati Enterprises v. Karaikudi Chettinadu adjudicated by Madras High Court: MIPR 2008 (2) 228. 6. I have heard the learned counsel for the parties and with their assistance perused the relevant materials available on record as well as gave my thoughtful consideration to the rival submissions at Bar so also carefully scanned the impugned orders dated 11th February, 2013, 17th July, 2013. 7. Indisputably, the appellant is carrying on the business of manufacturing and marketing of edible oils under the trade mark "KABIRA" since year, 1999 and continued to use the same trade mark upto 31st September, 2008. It is also not in dispute that the defendant-non appellant started use of the same trade mark with a slight variation in the spelling by substitution of letter "i" by letter "ee" to read as "KABEERA". The appellant having learnt about the use of the trade mark as aforesaid, by the defendant-non-appellant in the year 2011, instituted suit proceedings along with an application under Order 39, Rule 1 and 2 CPC, which has been declined. The suit proceedings and the application declined were instituted on 22nd September, 2012. The defendant-non-appellant appeared on 23rd October, 2012 and moved an application under Order 7, Rule 11 CPC on 6th November, 2012, which has been dismissed on 22nd August, 2016, with cost of Rs.1000/- (Rupees One Thousand Only). 8. From the pleadings of the parties and materials available on record, it is not in dispute that the defendant-non-appellant started use of the trade mark "KABEERA" with effect from 1st April, 2008. The plaintiff-appellant did submit several documents reflecting use of the trade mark "KABIRA" since 1999 to 23rd September, 2008, and thereafter, with effect from 12th April, 2010, till institution of the suit proceedings.
The plaintiff-appellant did submit several documents reflecting use of the trade mark "KABIRA" since 1999 to 23rd September, 2008, and thereafter, with effect from 12th April, 2010, till institution of the suit proceedings. The appellant has also been accorded registration of the trade mark on 26th August, 2014, in response to his application instituted on 9th July, 2011. 9. The claim of the plaintiff-appellant is based on "passing of action" in the backdrop of contemplation under Section 27 (2) read with Section 134(l)(c) of the Trade Marks Act, 1999. Sustainability of the claim on the principle of "passing of action" is no more res-integra as has been observed by the Apex Court of the land in the case of Laxmikant V. Patel v. Chetanbhat Shah, (2002) 3 SCC 65 , wherein the Supreme Court held thus: "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 acquire a 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 any one to carry on his business in such a way as would persuade the customers or clients in believing that he 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 arid thereby resulting in injury." 10. Delay in bringing action is not sufficient to decline the grant of injunction in case of a nature at hand as has been observed by Supreme Court in the case of Midas Hygiene P. Ltd v. Sudhir Bhatia: (2004) 3 SCC 90 , holding thus: "5. The law on the subject is well settled.
Delay in bringing action is not sufficient to decline the grant of injunction in case of a nature at hand as has been observed by Supreme Court in the case of Midas Hygiene P. Ltd v. Sudhir Bhatia: (2004) 3 SCC 90 , holding thus: "5. The law on the subject is well settled. In cases of infringement either of Trade Mark or of Copyright normally an injunction must follow. Mere delay in bringing action is not sufficient to defeat grant of injunction in such cases. The grant of injunction also becomes necessary if it prima facie appears that the adoption of the Mark was itself dishonest. 7. In our view on the facts extracted by the learned Single Judge this was a fit case where an interim injunction should have been granted and should have been continued. In our view the Division Bench was entirely wrong in vacating that injunction merely on the ground of delay and laches. Under the circumstances, the impugned order is set aside and that of the trial court is restored. It is clarified that all observations made by the High Court and by this Court are prima facie and shall not be taken into consideration the time of the trial of the suit. 11. The view aforesaid has been reiterated by the Supreme Court in the case of Heniz Italia v. Dabur India Ltd. : (2007) 6 SCC 1 , observing thus: "15. We have also considered the arguments with regard to the prior user of the trademark "Glucon-D" and the specific packaging. It is the admitted case that the term "Glucose-D" has been used by the respondent from the year 1989 and that the packaging which is the subject matter of dispute in the present suit has been in use from the year 2000. In the case of Century Traders (supra) it has been held that in an action for passing off, the plaintiff has to establish prior user to secure an injunction and that the registration of the mark or similar mark in point of time, is irrelevant. This Court in Cadila Health Care case (supra) also laid down the tests in the case of passing off and observed as under: In other words in the case of unregistered trade marks, a passing off action is maintainable.
This Court in Cadila Health Care case (supra) also laid down the tests in the case of passing off and observed as under: In other words in the case of unregistered trade marks, a passing off action is maintainable. The passing off action depends upon the principle that nobody has a right to represent his goods as the goods of some body. In other words a man is not to sell his goods or services under the pretence that they are those of another person. As per Lord Diplock in Erwin Warnink BV v. J. Townend & Sons: 1979 (2) AER 927, 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 trade (in the sense that this is a reasonably foreseeable 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." 12. A Coordinate Bench of this Court relying upon the opinion of the Supreme Court in the case of Laxmikant V. Patel v. Chetanbhat Shah (Supra) in the case of International Dog Bazar v. International Dog World: 2016 (66) PTC 30 (Raj ), under paragraph 12 observed thus: "12. In Laxmikant V. Patel (supra), the Supreme Court held that in an action for passing off, it is usual, rather essential, to seek an injunction, temporary or ad-interim. The principles for the grant of such injunction are the same as in the case of any other action against injury complained of. Passing off cases are often cases of deliberate and intentional misrepresentation, but it is well-settled that fraud is not a necessary element of the right of action, and the absence of an intention to deceive is not a defence, though proof of fraudulent intention may materially assist a plaintiff in establishing probability of deception. Therein, the Supreme Court, while referring to authority of Christopher Wadlow in Law of Passing of (1995 Edition, at P. 3.06), observed that plaintiff does not have to prove actual damage in order to succeed in an action for passing off. Likelihood of damage is sufficient.
Therein, the Supreme Court, while referring to authority of Christopher Wadlow in Law of Passing of (1995 Edition, at P. 3.06), observed that plaintiff does not have to prove actual damage in order to succeed in an action for passing off. Likelihood of damage is sufficient. It further observed that defendant's state of mind is wholly irrelevant to the existence of the cause of action for passing off." 13. In the case T.V. Venugopal v. Ushodaya Enterprises Ltd., (2011) 4 SCC 85 , the Apex Court of the land while dealing with the principle of "passing an action", "dilution of goodwill and reputation" and continuing dishonest illegal action, fraud on the consumers; held that no one can be permitted to approach upon the reputation and goodwill of others. It will be relevant to consider text of para 102 and 103 of the judgment, which reads thus; "102. On consideration of the totality of facts and circumstances of the case, we clearly arrive at the following findings and conclusions: (a) The Respondent company's mark 'Eenadu' has acquired extraordinary reputation and goodwill in the State of Andhra Pradesh. The Respondent company's products and services are correlated, identified and associated with the word 'Eenadu' in the entire State of Andhra Pradesh. 'Eenadu' means literally the products or services provided by the Respondent company in the State of Andhra Pradesh. In this background the Appellant cannot be referred or termed as an honest concurrent user of the mark 'Eenadu'; (b) The adoption of the words 'Eenadu' is ex facie fraudulent and mala fide from the very inception. By adopting the mark 'Eenadu' in the State of Andhra Pradesh, the Appellant clearly wanted to ride on the reputation and goodwill of the Respondent company; (c) Permitting the Appellant to carry on his business would in fact be putting a seal of approval of the court on the dishonest, illegal and clandestine conduct of the Appellant; (d) Permitting the Appellant to sell his product with the mark `Eenadu' in the State of Andhra Pradesh would definitely create confusion in the minds of the consumers because the Appellant is selling Agarbathies marked 'Eenadu' as to be designed or calculated to lead purchasers to believe that its product Agarbathies are in fact the products of the Respondent company. In other words, the Appellant wants to ride on the reputation and goodwill of the Respondent company.
In other words, the Appellant wants to ride on the reputation and goodwill of the Respondent company. In such a situation, it is the bounden duty and obligation of the court not only to protect the goodwill and reputation of the Respondent company but also to protect the interest of the consumers; (e) Permitting the Appellant to sell its product in the State of Andhra Pradesh would amount to encouraging the Appellant to practise fraud on the consumers; (f) Permitting the Appellant to carry on his business in the name of 'Eenadu' in the State of Andhra Pradesh would lead to eroding extra-ordinary reputation and goodwill acquired by the Respondent company over a passage of time; (g) Appellant's deliberate misrepresentation has the potentiality of creating serious confusion and deception for the public at large and the consumers have to be saved from such fraudulent and deceitful conduct of the Appellant. (h) Permitting the Appellant to sell his product with the mark `Eenadu' would be encroaching on the reputation and goodwill of the Respondent company and this would constitute invasion of proprietary rights vested with the Respondent company. (i) Honesty and fair play ought to be the basis of the policies in the world of trade and business. 103. The law is consistent that no one can be permitted to encroach upon the reputation and goodwill of other parties. This approach is in consonance with protecting proprietary rights of the Respondent company. 14. In the case of Neon Laboratories Limited v. Medical Technologies Limited & Ors., (2016) 2 SCC 672 , the Apex Court of the land recognized the principle "first in the market" test has always enjoyed pre-eminence. The Supreme Court reiterating the earlier opinion to permit rights of prior user of trade mark on the principle of "passing of action", held thus: "9. We must hasten to clarify that had the Defendant-Appellant commenced user of its trademark ROFOL prior to or even simultaneous with or even shortly after the Plaintiff-Respondents' marketing of their products under the trademark PROFOL, on the Defendant-Appellant being accorded registration in respect of ROFOL which registration would retrospectively have efficacy from 19.10.1992, the situation would have been unassailably favourable to it. What has actually transpired is that after applying for registration of its trademark ROFOL in 1992, the Defendant-Appellant took no steps whatsoever in placing its product in the market till 2004.
What has actually transpired is that after applying for registration of its trademark ROFOL in 1992, the Defendant-Appellant took no steps whatsoever in placing its product in the market till 2004. It also was legally lethargic in not seeking a curial restraint against the Plaintiff-Respondents. This reluctance to protect its mark could well be interpreted as an indication that the Defendant-Appellant had abandoned its mark at some point during the twelve year interregnum between its application and the commencement of its user, and that in 2004 it sought to exercise its rights afresh. It would not be unfair or fanciful to favour the view that the Defendant-Appellant`s delayed user was to' exploit the niche already created and built-up by the Plaintiff-fanciful to favour the view that the Defendant-Appellant's delayed user was to exploit the niche already created and built-up by the Plaintiff-Respondents for themselves in the market. The 'first in the market' test has always enjoyed pre-eminence. We shall not burden this judgment by referring to the several precedents that can be found apposite to the subject. In the interest of prolixity we may mention only N.R. Dongre v. Whirlpool Corporation: (1996) 5 SCC 714 and Milmet Oftho Industries v. Allergan Inc., (2004) 12 SCC 624 . In Whirlpool, the worldwide prior user was given preference nay predominance over the registered trademark in India of the Defendant. In Milmet, the marks of pharmaceutical preparation were similar but the prior user worldwide had not registered its mark in India whereas its adversary had done so. This Court approved the grant of an injunction in favour of the prior user. Additionally, in the recent decision in S. Syed Mohiden v. P. Sulochana Bai, (2015) 7 SCALE 136, this Court has pithily underscored that the rights in a passing-off action emanate from common law and not from statutory provisions, nevertheless the prior user's rights will override those of a subsequent user even though it had been accorded registration of its trademark. Learned Counsel for the Defendant-Appellant has endeavoured to minimise the relevance of Whirlpool as well as Milmet by drawing the distinction that those trademarks had attained worldwide reputation. However, we think that as world shrinks almost to global village, the relevance of the transnational nature of a trademark will progressively diminish into insignificance. In other words, the attainment of valuable goodwill will have ever increasing importance.
However, we think that as world shrinks almost to global village, the relevance of the transnational nature of a trademark will progressively diminish into insignificance. In other words, the attainment of valuable goodwill will have ever increasing importance. At the present stage, the argument in favour of the Defendant-Appellant that we find holds more water is that in both Milmet and Whirlpool, as distinct from the case before us, the prior user of the successful party predated the date of application for registration of the competing party. The question to examine, then, would be whether prior user would have to be anterior to the date of application or prior to the user by the Defendant-Appellant. In other words, the question before the court would remain whether the situation on the date of application for registration alone would be relevant, or whether the developments in the period between this date and the date of grant of registration would have any bearing on the rights of the parties. All these considerations will-be cast into a curial cauldron to be appreciated by the Court before which the suit is being contested. In these premises, we cannot conclude that a prima facie case has not been disclosed by the Plaintiff-Respondents. " 15. In the case of Amarvati Enterprises v. Karaikudi Chettinadu (Supra), the Division Bench of this Court did allow the appeal and granted injunction in favour of the appellant-plaintiff referring to the principle of "passing of infringement" on the basis of prior user as would be evident from the text of para 20 to 22. Thus, the reliance placed by the counsel for the defendant-non-appellant is of no help in the face of the fact that the documents as to prior user of trade mark "KABIRA" were placed on record by the plaintiff-appellant, which were enclosed with the main file of the suit and were not included with the record of the application under Order 39, Rule 1 and 2, and therefore, could not be taken note of. In the case of Uniply Industries Ltd. (Supra), the Supreme Court reiterated the test to determine continuous prior user and the volume of sale or the degree of familiarity of the public with mark.
In the case of Uniply Industries Ltd. (Supra), the Supreme Court reiterated the test to determine continuous prior user and the volume of sale or the degree of familiarity of the public with mark. From the pleadings of the parties and materials available on record, it is not in dispute that the appellant did use the trade mark with effect from year 1999 and continued to use the same trade mark up till 23rd September, 2008, and thereafter instituted an application for registration of the trade mark on 17th July, 2013. The application has been grated on 22nd August, 2016, i.e application on 9th July, 2011 and the application has been granted on 26th August, 2014, as a trade mark "KABIRA" has been registered in favour of the appellant. Thus, the stand of the foundation and is hereby rejected. 16. For the reasons and discussion aforesaid, the appeal instituted by the appellant succeeds and is hereby allowed. 17. The defendant-non-appellant is restrained to use the trade mark "KABIRA" and/or "KABEERA". Further, the trial Court is directed to expedite the trial and conclude the suit proceedings as expeditiously as possible strictly following the steps suggested by the Apex Court of the land in the Rameshwari Devi and Ors. v. Nirmala Devi and Ors. (2011) 8 SCC 249 . Needless to observe that the restraint order would come into force from today.