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2018 DIGILAW 1548 (BOM)

Syed Zakirali S/o Syed Jawarali v. Syed Zahidali S/o Syed Jawarali

2018-06-29

Z.A.HAQ

body2018
JUDGMENT : Z.A. HAQ, J. 1. Heard Shri Syed Zakirali S/o Syed Jawarali, appellant in person and Shri G.S. Bapat, Advocate with Shri R.M. Pande, Advocate for the respondent No. 1. 2. The appellant/original plaintiff has challenged the judgment and decree passed by the trial Court by which the civil suit filed by the plaintiff is dismissed. In the civil suit the plaintiff prayed for decree for permanent injunction restraining the defendants from passing off their goods as those of the plaintiff's by imputation of that of plaintiff's goods. The plaintiff prayed for decree for delivery of the goods in question for destruction. The plaintiff prayed for decree of accounts of the profits made by the defendants by wrongfully passing off the goods. The plaintiff prayed for other reliefs also. 3. Haji Syed Jawarali (plaintiff's father) and the plaintiff executed an indenture dated 26th October, 1960 to carry on the business in co-partnership in the name and style “Suratee Tobacco Company.” By this indenture the plaintiff and his father agreed to admit defendant No. 2 Syed Zahidali (plaintiff's step brother) to the benefits of the partnership. At that time, the defendant No. 2 was minor. As per the indenture, the respective shares of the parties in the profits of the business were as follows: The defendant No. 1 (plaintiff's father) 34% The plaintiff 33% The defendant No. 2 (Plaintiff's step brother) 33% The above referred indenture provided that any of the partner was at liberty to dissolve the partnership after giving three months notice to the other partners. The three partners carried on business of manufacture of sale of bidi under different trademarks. As disputes arose between the partners, including dispute regarding dissolution of partnership, Shri Narharibhai Muljibhai Patel and Shri Badarbhai Somabhai Patel were appointed as Arbitrators by arbitration agreement dated 4th February, 1971, to resolve the dispute. This arbitration agreement was written in Gujarati. The arbitration proceedings were undertaken and an award was passed. The plaintiff accepted the award subject to adjudication of rights in Special Civil Suit No. 14/1971. On 9th May, 1971 the plaintiff and the defendant No. 1 executed deed of dissolution. This deed of dissolution was signed by the defendant No. 1 for defendant No. 2 also as defendant No. 2 was minor at that time. The plaintiff accepted the award subject to adjudication of rights in Special Civil Suit No. 14/1971. On 9th May, 1971 the plaintiff and the defendant No. 1 executed deed of dissolution. This deed of dissolution was signed by the defendant No. 1 for defendant No. 2 also as defendant No. 2 was minor at that time. The defendant No. 1 had challenged the above referred award under the provisions of the Arbitration Act, 1940 (for short “the Act of 1940”). By order dated 20th September, 1972, the award was remitted back to the Arbitrators under Section 16 of the Act of 1940 for making fresh award in respect of matters referred in paragraph Nos. 7(A), 8 and 15 thereof. The Arbitrators made fresh award on 18th February, 1974. The Arbitrators clarified about allotment of different trademarks and labels to the respective parties. As per the allotment, the plaintiff was given “322 pucca label” and “322 A.K. (Adi Khadi).” 4. The defendant No. 1 claimed that the trademark “322 pucca label” and trademark “322 A.K.” should have been allotted to him. The plaintiff supported the award and filed an application under Section 41(b) of the Act of 1940 and prayed for an order restraining the defendants from infringing the trademarks allotted to the plaintiff, including the trademark “322 pucca label” and “322 A.K.” This application was rejected by the trial Court by order dated 4th May, 1974. The plaintiff had challenged this order dated 4th May, 1974 by filing Appeal against Order No. 42/1974. Subsequently, this Appeal from Order was converted into Civil Revision Application No. 468/1976. By judgment delivered on 7th October 1976, this Court had allowed the civil revision application and had restrained the defendants from using the trademarks and labels “322” and “322 A.K.” The defendants were directed to hand over all wrappers, labels and the finished goods relating to the above trademarks to the plaintiff within one month from the date of order. The plaintiff was directed to give accounts of all the goods manufactured and sold under the above referred two trademarks and labels. The plaintiff was directed to submit the account every three months before the trail Court. The judgment passed in civil revision application was challenged before the Hon'ble Supreme Court. The plaintiff was directed to give accounts of all the goods manufactured and sold under the above referred two trademarks and labels. The plaintiff was directed to submit the account every three months before the trail Court. The judgment passed in civil revision application was challenged before the Hon'ble Supreme Court. Initially the Hon'ble Supreme Court had granted an ex-parte interim order on 12th November, 1976 in favour of the defendants, however, the special leave petition was disposed as withdrawn on 12th January, 1977. 5. The plaintiff filed the Special Civil Suit No. 2/1977 (out of which this appeal arises), on or about 28th September, 1977 praying for the reliefs as stated earlier. The grievance of the plaintiff in the civil suit was that inspite of restraint order, the defendants were selling their products, passing off their products as the products of the plaintiff's in packs with labels identical to the trademarks “322” and “322 A.K.” which were allotted to the plaintiff. The defendants opposed the claim of the plaintiff by filing separate written statements. After conducting the trial, the trial Court dismissed the civil suit. The trial Court recorded that the name or description or maker of the goods as defendants does not associate defendants' goods with the goods of the plaintiff in public mind. The learned trial Judge recorded that the description or getup of the goods of defendants was not likely to mislead the public into believing that they were purchasing goods of plaintiff. Aggrieved by the judgment and decree passed by the trial Court, the plaintiff has filed this appeal. 6. The appellant plaintiff (who appears in person) submitted that the conclusions of the learned trial Judge are contrary to the documents and evidence on record and the learned trial Judge has not appreciated the evidence in right perspective. It is submitted that while allowing the civil revision application filed by the plaintiff, this Court had restrained the defendants by issuing temporary injunction from selling any goods bearing the trademarks and labels (“322” and “322 A.K.”). It is argued that after civil revision application was allowed by this Court by judgment dated 7th October, 1976, as the defendants were not able to use trademarks and labels allotted to the plaintiff, the defendants started passing off their goods. It is argued that after civil revision application was allowed by this Court by judgment dated 7th October, 1976, as the defendants were not able to use trademarks and labels allotted to the plaintiff, the defendants started passing off their goods. It is submitted that the judgment in civil revision application was not interfered with by the Hon'ble Supreme Court and all these aspects are not considered by the trial Court, properly. The plaintiff submitted that the defendants indulged in illegal activities of passing off the goods by using wrappers similar to those of the trademarks allotted to the plaintiff, with the intention of taking illegal advantage of the reputation created by the product of the plaintiff and further to cause harm and damage to the reputation of establishment of plaintiff and to cause loss to the plaintiff. To support the submission, the plaintiff relied on the award dated 9th June, 1971, the modified award dated 18th February, 1974, the judgment given in Civil Revision Application No. 468/1976 and the judgment given by this Court in First Appeal No. 132/2001. The plaintiff also relied on the evidence on the point that the defendant No. 2 indulged in the illegal activity of passing off the goods as goods of the plaintiff with the oblique intention of causing harm to the reputation of business of plaintiff and loss to the plaintiff as the defendant No. 2 carried personal grudge against the plaintiff being step brother of the plaintiff. 7. The defendant No. 2 supported the impugned judgment. According to the defendant No. 2, the conclusions of the learned District Judge that the name or description or makeup of the labels used by the defendant and about which the plaintiff is making complaint, is not of such type that the goods of the defendant No. 2 get associated with the goods of the plaintiff in public mind. According to the defendant No. 2, the claim of the plaintiff that the wrappers/labels for marketing the goods of defendants are designed to mislead the consumers into believing that the consumers are mislead to purchase the defendant's goods, is without any basis. According to the defendant No. 2, the claim of the plaintiff that the wrappers/labels for marketing the goods of defendants are designed to mislead the consumers into believing that the consumers are mislead to purchase the defendant's goods, is without any basis. The defendants had raised objection to the maintainability of the civil suit on the ground that the grievance of the plaintiff cannot be examined by the Court and the plaintiff will have to approach the competent Authority under the Trademarks and Copy Rights Act (Paragraph No. 26(2) of the written statement which was filed by the defendant No. 1 before the trial Court). The defendant No. 2 submitted that the plaintiff has not been able to prove that the trademarks “322” and “322 A.K.” were registered in favour of the plaintiff and therefore, the claim of the plaintiff is unsustainable in law. 8. The learned trial Judge had framed issues on the point of jurisdiction and competence of District Judge to entertain and decide the civil suit. Relying on the provisions of Section 105(c) and Section 27(2) of the Trade and Merchandise Marks Act, 1958 (hereinafter referred to as the “Act of 1958”) has held that the Court of District Judge is competent to entertain and decide the civil suit. The defendant No. 2 has not challenged this finding recorded by the learned District Judge. However, it being the issue of jurisdiction I have examined the merits of submissions made on behalf of the defendants on this point. Section 105(c) of the Act of 1958 reads as follows: “105. SUIT FOR INFRINGEMENT, ETC. TO BE INSTITUTED BEFORE DISTRICT COURT. No Suit (a).......... (b).......... (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, shall be instituted in any Court inferior to a District Court having jurisdiction to try the suit.” The above provision lays down that the suit of the nature, as filed by the plaintiff, lie before the District Court. The above mentioned provision lays down that the civil suit complaining about passing off the goods by the defendant by using any trademark identical or deceptively similar to the plaintiff's trademark would lie before the District Court, whether the trademark of the plaintiff is registered or unregistered. The above mentioned provision lays down that the civil suit complaining about passing off the goods by the defendant by using any trademark identical or deceptively similar to the plaintiff's trademark would lie before the District Court, whether the trademark of the plaintiff is registered or unregistered. I find that the conclusions of the learned District Judge on this point are in consonance with the provision and cannot be faulted with. 9. After hearing the plaintiff, who appears in person, and the Advocate for the defendant No. 2, I find that the following points arise for consideration: (i) Whether the plaintiff has proved that the defendants had been passing off their goods as those of the plaintiff's by imitating wrappers/labels of the trademark allotted to the plaintiff? (ii) Whether the plaintiff is entitled for injunction as prayed for by him restraining the defendants, their servants, agents or assignees from further passing off bidies in wrappers/ labels with trademark similar and deceptively identical to that of the plaintiff? (iii) Whether the plaintiff is entitled for directions to the defendants to deliver the wrappers and labels in respect of which the plaintiff complains, for destruction? (iv) Whether the defendants are liable to render account of profits earned by them by sale of bidies regarding which the plaintiff has complained? 10. As regards the point No. 1 framed for determination, I find that the plaintiff has brought sufficient evidence on record on the basis of which it has to be held that the defendants were passing off their goods as the goods of plaintiff, by using wrappers/labels similar and deceptively identical to the wrappers and labels of the plaintiff with the trademark “322” and “322 A.K.” The wrapper/label with the trademark “322” is produced on record at Exh. 88 and the wrapper/label used by the defendants is produced on record at Exh. No. 95. Apart from this there is evidence on record to support the claim of the plaintiff on this point. I have also compared the two wrappers/labels and I find considerable force in the submission made by the plaintiff that the defendants used similar and deceptively identical wrappers/labels for marketing their goods (bidies). No. 95. Apart from this there is evidence on record to support the claim of the plaintiff on this point. I have also compared the two wrappers/labels and I find considerable force in the submission made by the plaintiff that the defendants used similar and deceptively identical wrappers/labels for marketing their goods (bidies). The contention of the plaintiff is that the bidies manufactured by the plaintiff were in high demand in rural places and the consumers belonged to rustic class and the similarity in the two wrappers/labels helped the defendants in passing off their goods as the goods of the plaintiff. 11. In the judgment given in the case of Canada vs. Pepsi Cola Co. of Canada, 1942 (1) All ER 615, the Privy Council has laid down as follows: “The question for determination must be answered by the Court unaided by outside evidence after a comparison of the defendant's mark as used with the plaintiff's registered mark, not placing them aside but by asking itself whether having due regard to relevant surrounding circumstances the defendant's mark as used is similar (as defined by the Act) to the plaintiff's registered mark as it would be remembered by persons possessed of an average memory with its usual imperfections.” While dealing with the complaints of passing off the goods under a counterfeit trademark, it is the duty of the Court to find out whether or not the counterfeit mark is similar to the mark (trademark) used by the complainant. Normally, a customer does not see two similar labels or marks simultaneously for comparison and to find out the difference between the two wrappers/labels. He goes by the general notion on looking at the wrapper/label. There may be some difference in the two marks, however, the Court has to examine whether the counterfeit mark is designed with the calculated intention of deceiving the customer to pass off one's goods. While assessing the degree of resemblance in the two marks, the consideration is not objective assessment of similarity but the assessment should be based on the consideration of degree of resemblance and whether the similarity or resemblance is devised to deceive the consumer. While assessing the degree of resemblance in the two marks, the consideration is not objective assessment of similarity but the assessment should be based on the consideration of degree of resemblance and whether the similarity or resemblance is devised to deceive the consumer. The identification of the essential features of the mark is in essence a question of fact and depends on the judgment of the Court, of course, the judgment should be based on evidence led before it and in the background of the usage of the mark. The type of consumer is of prime consideration while examining such matters. Whether the counterfeit mark is similar and deceptively identical cannot be as per the perception of the Court or the predecessor of the marketer of the goods but the assumption should be as per the perception of the consumer. In the judgment given in the case of Parle Products vs. J.P. and Co. Mysore, AIR 1972 SC 1359 the Hon'ble Supreme Court has laid down that if the variation in the counterfeit label is not so prominent and the counterfeit mark is otherwise similar and deceptively identical, the consumer may carry the impression that the owner of the trademark has made the variation. Thus the test would be whether the similarity in the counterfeit trademark is created to deceive the customer. The over all impression which the consumer of the goods in question carries about the identity of the goods purchased by him would be relevant. One of the recognized parameters regarding analysis of the counterfeit mark with the original mark is: Whether there is likelihood of deception or confusion in the mind of the consumer, on seeing two similar wrappers/labels? The factors which are required to be considered while ascertaining whether the counterfeit mark creates confusion in the mind of the consumer would depend on the nature of market, class of customers, existence of reputation, the trade channels and various other factors which cannot be summed up. 12. If the claim of the plaintiff is examined in the light of the established principles, and the evidence on record and the similarity in the two wrappers/labels, in my view, it has to be held that the complaint made by the plaintiff has substantial force. 13. The defendants strongly opposed the claim of the plaintiff on the ground that the trademark on which the plaintiff relies is not registered. 13. The defendants strongly opposed the claim of the plaintiff on the ground that the trademark on which the plaintiff relies is not registered. As per Section 105(c) of the Act of 1958, it is not necessary that the trademark should be registered for maintaining an action for passing off the goods against the defendants. The false plea raised by the defendants speaks volumes. The trademark “322” and “322 A.K.” were alloted to the plaintiff as per the award passed by the Arbitrators. This Court upheld the claim of the plaintiff while deciding the Civil Revision Application No. 468/1976 and restrained the defendants from using the trademark “322” and “322 A.K.” Immediately after the judgment is delivered in Civil Revision Application No. 468/1976 the defendants started marketing of their bidies in the wrappers/labels regarding which the plaintiff has made complaint. The plaintiff has brought evidence on record to show that the defendants marketed their bidies in the same areas where the plaintiff's goods (bidies) had good market. 14. In view of the above, point No. 1 framed for determination has to be answered in favour of the plaintiff. 15. Apart from the above, the defendant has not entered the witness box and has kept himself away from cross-examination on behalf of the plaintiff. At the time of arguments, the plaintiff and the Advocate for the defendant has submitted that the plaintiff has stopped business of bidies from 1986 and he has not renewed the registration of trademark. It is submitted that the defendant has also stopped using the disputed label, since 1978. 16. As regards Point No. 2 framed for determination, admittedly, the plaintiff has not renewed the registration of his trademark and as the defendant has stopped using the disputed wrapper/label, the question of granting decree for injunction as prayed for by the plaintiff does not survive. However, in view of the findings recorded earlier, it is directed that if the plaintiff renews/obtains registration of his trademark, the defendant No. 2 shall not restart using the disputed mark/wrapper. 17. As admittedly, the defendant No. 2 has stopped using the disputed mark/label since 1978, the point No. 3 as framed for determination does not survive. 18. The plaintiff has prayed for decree directing the defendants to render accounts of the profits earned by the defendants by sale of bidies using the disputed labels/wrappers. 17. As admittedly, the defendant No. 2 has stopped using the disputed mark/label since 1978, the point No. 3 as framed for determination does not survive. 18. The plaintiff has prayed for decree directing the defendants to render accounts of the profits earned by the defendants by sale of bidies using the disputed labels/wrappers. During the pendency of these proceedings, the defendant No. 1 died. Considering the fact that the plaintiff has stopped his business from 1986 and the defendant No. 2 has also stopped using the disputed marks/labels since 1978 and as the civil suit was filed in 1977, in my view, the interests of justice would be sub-served by quantifying the amount of damages payable by the defendant No. 2 to the plaintiff and directing the defendant No. 2 to pay an amount of Rs. 10,000,00/- (Rs. Ten Lakhs) to the plaintiff towards damages. 19. Section 106(1) of the Act of 1958 provides for the reliefs which can be granted by the Court in suit for passing off. Sub-section (1) of Section 106 of the Act of 1958 enables the Court to grant damages, however, it is at the option of the plaintiff. In the plaint filed by the plaintiff the prayer for grant of damages is not made. However, considering the fact that the civil suit was filed in 1977 and the proceedings are going on for last 41 years, I feel it appropriate to quantify the damages but this will depend on exercise of option for damages by the plaintiff. If the plaintiff is willing to accept the quantified damages, he may file an affidavit accordingly before the trial Court within one month. If the plaintiff is not willing to accept the quantified damages, then the defendant No. 2 shall render accounts of profits of the bidies sold by him in the labels/wrappers in respect of which the plaintiff has made complaint. The defendant No. 2 shall render accounts of profits before the trial Court within four months. 20. The plaintiff has also challenged the order passed by the learned District Judge by which the application (Exh.29) filed by the plaintiff to bring on record legal representatives of the defendant No. 1 Syed Jawarali is dismissed. The application is dismissed, relying on the observations made by this Court in the judgment given in Civil Revision Application No. 26/1984. 20. The plaintiff has also challenged the order passed by the learned District Judge by which the application (Exh.29) filed by the plaintiff to bring on record legal representatives of the defendant No. 1 Syed Jawarali is dismissed. The application is dismissed, relying on the observations made by this Court in the judgment given in Civil Revision Application No. 26/1984. The appellant/plaintiff has not been able to point out that the conclusions of the learned District Judge suffer from any illegality or infirmity. Therefore, I see no reason to interfere with the order passed on the Application Exh.29. 21. In view of the above, the following order is passed: (i) The judgment and decree passed by the learned Additional District Judge, Gondia in Special Civil Suit No. 2/1997 on 30th March, 2005 is set aside. (ii) It is held that the defendant No. 2 was selling bidies in the disputed wrappers/labels and passed off goods illegally as the goods of plaintiff. (iii) If the plaintiff renews/obtains registration of the trade marks referred earlier, the defendant No. 2 is restrained from using the disputed labels/wrappers to market the bidies produced by the defendant No. 2. (iv) The defendant No. 2 shall deposit Rs. 10,000,00/- (Rs. Ten Lakhs) towards damages before the trial Court within one month from the date on which the plaintiff files affidavit before the trial Court accepting the decree for quantified damages. (v) If the plaintiff fails to file affidavit before the trial Court within one month showing his willingness to accept the amount of quantified damages, the defendant No. 2 shall render accounts of profits earned by him by sale of bidies in the disputed labels/wrappers, from the date of the filing of the civil suit. The defendant No. 2 shall render accounts before the trial Court within four months. 22. Considering the facts of the case, the defendant No. 2 is directed to pay an amount of Rs. 50,000/- (Rs. Fifty Thousand) towards costs to the plaintiff, within one month. 23. The appeal is allowed in the above terms. 24. Decree be drawn accordingly. 25. The appellant, who appears in person, is not present. Shri R.M. Pande, Advocate appearing for respondent (defendant No. 2) prayed that the judgment be kept in abeyance for eight weeks to enable the respondent to take appropriate steps in the matter. Prayer as made is granted.