2007(3) ALL MR 731
IN THE HIGH COURT OF JUDICATURE AT BOMBAY(AURANGABAD BENCH)

P.V. KAKADE, J.

M/S. R. K. Patel & Co.Vs.Shri. Rajdhar Kalu Patil @ Patel & Ors.

Appeal From Order No.81 of 2005,Civil Application No.9539 of 2005,Appeal From Order No.81 of 2005,Appeal From Order No.88 of 2005,Civil Application No.9922 of 2005,Appeal From Order No.88 of 2005,Appeal From Order No.01 of 2005,Civil Application No.850 of 2005,Appeal From Order No.1 of 2005

23rd April, 2007

Petitioner Counsel: Shri. H. W. KANE,Shri. S. P. DESHMUKH
Respondent Counsel: Shri. P. M. SHAH,Shri. P. V. BORDE

Trade Marks Act (1999), S.29 - Civil P.C. (1908), O.39, Rr.1, 2 - Interlocutory relief - Suit for declaration, permanent injunction on basis of infringement of trade marks, passing off - Interlocutory remedy is intended to preserve status quo, the rights of parties which may appear on a prima facie case - Tort of passing-off involves a misrepresentation made by a trader to his prospective customers calculated to injure, as a reasonably forseeable consequence, the business or goodwill of another which actually or probably, causes damages to the business or goods of the other trader - Plaintiff succeeding in establishing a prima facie case - Held, plaintiffs are entitled to the relief of temporary injunction.

Perusal of the wrappers also shows that the entire colour scheme, the design, the wording, its placement on the wrapper is exactly the same as that of plaintiff no.2. The ordinary customers are, therefore, impressed to believe that they are purchasing the products of the manufacturers which are one and the same. The imitation is so calculated that it may appear to be only a printing error between the words "Ashok" and "Ashik"; in fact and in reality it is not an error but a well-designed and well calculated strategy thought of by the defendant No.1. The phonetical similarity and the manner and the ink in which the competing letters and the words are written is also the same. A man of average intelligence with imperfect recollection is bound to be deceived, in a given case even an intelligent person is also likely to be mislead and may fall prey to passing off the goods of defendants as if they are the goods of the plaintiff.

In view of these aspects and circumstances and taking into account the reasoning adopted by the learned trial Judge, the plaintiff has succeeded in establishing a prima facie case.

The interlocutory remedy is intended to preserve in status quo, the rights of parties which may appear on a prima facie case. The Court also, in restraining a defendant from exercising what he considers his legal right but what the plaintiff would like to be prevented, puts into the scales, as a relevant consideration whether the defendant has yet to commence his enterprise or whether he has already been doing so in which latter case considerations somewhat different from those that apply to a case where the defendant is yet to commence his enterprise, are attracted. It must be remembered that an infringement action is available where there is violation of specific property right acquired under and recognised by the statute. In a passing-off action, however, the plaintiff's right is independent of such a statutory right to a trade mark and is against the conduct of the defendant which leads to or is intended or calculated to lead to deception. Passing-off is said to be a species of unfair trade and competition or of actionable unfair trading by which one person, through deception, attempts to obtain an economic benefit of the reputation which another has established for himself in a particular trade or business. The action is regarded an action for deceit. The tort of passing-off involves a misrepresentation made by a trader to his prospective customers calculated to injure, as a reasonably foreseeable consequence, the business or good-will of another which actually or probably, causes damages to the business or goods of the other trader. In view of this legal position applicable to the present set of facts, there is no doubt whatsoever that the plaintiffs are entitled to the relief of temporary injunction and the learned trial Judge has rightly allowed the application while dismissing the similar application filed on behalf of the defendants. 1990(Supp) SCC 727 - Ref. to. [Para 18,19,21,23]

Cases Cited:
Wander Ltd. Vs. Antox India P. Ltd., 1990 (Supp) SCC 727 [Para 20]


JUDGMENT

JUDGMENT :- All these appeals arise out of the common order dated 12.10.2004 passed by the Additional District Judge, Amalner allowing the application (Exh.6) filed by the plaintiff for temporary injunction and rejecting the defendant No.1's application (Exh.16) for temporary injunction, as well as against rejection of application (Exh.45) for appointment of receiver. The proceedings arise out of the said applications for temporary injunction filed by the parties in Trade Mark Suit No.1 of 1999 wherein the present respondents in both the proceedings who are plaintiffs no.1 to 3, filed the suit against the defendants for declaration, permanent injunction on the basis of infringement of trade marks, passing off and revocation of user agreement and other consequential reliefs.

2. The plaintiffs - respondents moved an application (Exh.6) for grant of temporary injunction against the defendant No.1 whereby the defendant no.1 moved an application (Exh.16) for the grant of temporary injunction against the plaintiffs.

3. The plaintiff No.1 Rajdhar Kalu Patil is the registered proprietor and owner of the registered trade marks namely "Patel Jarda Cow Brand and Vaibhav Brand" and plaintiff No.1 Rajdhar is the Karta of the Hindu Undivided Family. Plaintiff No.1 Rajdhar, Defendant No.1 Sahebrao and Narayan are real brothers. These three brothers have formed three different independent partnership firms, namely, (1) R. K. Patil and Company, Tobacco Processor, (2) R. K. Patel and Company, Tobacco Manufacturers and (3) R. K. Patel and Company, Tobacco Trading Co. The family members of each brother are the partners in these partnership firms.

4. On 3.2.1989 plaintiff no.2 entered into an user agreement of the registered trade marks namely Patel Jardha Cow Brand and Vaibhav Brand with plaintiff No.1 Rajdhar, which gave licence to use trade marks as per the terms and conditions of the agreement.

5. It is alleged that the trade marks would remain the property of Hindu Undivided Family irrespective of period for which the firm has used it. In the event of breach of condition of the agreement the Hindu Undivided Family shall be entitled to revoke the agreement by giving one week notice. The area of operation of tobacco processor for Patel Jardha Cow Brand is Jalgaon District and for Vaibhav Brand is Jalgaon District, Vidharbha and Marathwada. The area of operation of tobacco manufacture for Patel Jardha Cow Brand is Dhule District, Malegaon, Bombay, Thane, Pune, Ahmednagar, Sangali, Satara and Kolhapur. The respective firms were manufacturing the packing and selling products, under the above trade marks on the basis of user agreement.

6. The Plaintiff No.3 - Ashok Tobacco Processing is also a registered partnership firm of which the partners are the same as that of plaintiff no.2. Plaintiff No.3 started manufacturing Lime, Mishri, Kathha and tobacco under the brand name "Ashok Chuna, Ashok Mishri, Ashok Kathha". Plaintiff No.2 got its trade mark registered bearing trade marks no.392759 and 458913 with the Registrar of Trade Marks. The trade marks of the plaintiff no.3 cannot be used by any other person.

7. On 25.3.1998 plaintiff no.3 by a letter requested the plaintiff no.2 to print on its Jardha wrapper its brand name of Ashok Chuna and also simultaneously asked plaintiff no.1 Rajdhar to grant permission for the user. Plaintiff No.1 Rajdhar was pleased to grant such permission as per the terms of the user agreement. Plaintiff no.2 on 30.2.1998 informed plaintiff no.3 that they would start printing the advertisement of Ashok Chuna on their Jardha rapper for which plaintiff no.3 would be required to pay yearly Rs.24000/- to plaintiff no.2. It is the case sought to be made out on behalf of the plaintiffs that the plaintiff no.1 Rajdhar is the person who has brought a name and fame to two registered trade marks and in his own capacity and on account of his labour and industry in manufacturing Patel Jardha carries a very high reputation in the public at large and also amongst fellow merchants community.

8. It is further alleged that the plaintiff no.3 sought the permission from plaintiff no.1 Rajdhar for giving advertisement as "Ashok Chuna Nehami Wapara" on its product. However, defendant no.1 on 22.7.1998 or prior to that, started printing on its product the words namely "Ashik Chuna Nehami Wapara". Therefore, the said act on the part of the defendant no.1 amounts to infringement of the trade mark of the plaintiff no.3. The defendant no.1 is selling in these fashion its product by printing the said legend and it is, therefore, alleged that such act of defendant no.1 is likely to lead the customers that the goods are belonging to the plaintiff no.3 and therefore, the defendant no.1 is allegedly passing off the goods as that of goods of plaintiff no.3.

9. It is further alleged that defendant no.1 committed the breach of user agreement dated 8.2.1989. On 31.3.1999 plaintiff no.1 Rajdhar revoked the user agreement dated 8.2.1999 and hence the suit came to be filed. Consequently, the application filed for grant of temporary injunction restraining the defendant no.1 from printing the words "Ashik Chuna Nehami Wapara" on the product in question.

10. The defendant no.1 contested the application wherein inter alia, he admitted that the three brothers made arrangement for marketing Jardha in three separate territories allotted exclusively to each one of them. However, it is denied that the plaintiff no.1 Rajdhar has power and authority to deal with the two registered trade marks without the consent and concurrence of the other two brothers who are the co-owners in the matter of right and enjoyment of the registered trade marks. It is denied that the plaintiff no.1 Rajdhar is the exclusive owner of the two registered trade marks namely "Patel Jardha Cow Brand and Vaibhav Brand". It is further contended that three brothers agreed to execute separate registered user agreement in favour of the three respective partnership firms for their respective territorial sectors. The said registered user agreements were intended to give formal and ceremonial shape to the family arrangement. The user agreement and their renewals from time to time were a matter of form and not of substance and reality. Three brothers started carrying on the business in the separate partnership firms since August, 1986. The registered user agreements were executed in 1986 and thereafter in 1989 in pursuance of the family arrangement. It was also contended that plaintiff no.1 Rajdhar had no legal right to grant permission to plaintiff no.3 for printing the words "Ashok Chuna Nehami Wapara" on the products and thereby the plaintiff no.1 Rajdhar has misused his power in allowing the plaintiff no.3 to print the words. It is sought to be made out by the defendant no.1 that after due enquiry, the defendant no.1 started printing the words "Ashik Chuna Nehami Wapara" on its products and therefore, the defendant no.1 has not committed any infringement of the trade mark right of the plaintiff no.3. It is further contended that two registered trade marks namely "Patel Jardha Cow Brand" and "Vaibhav Brand" are belonging to the joint family and, therefore, the three brothers have 1/3rd share each.

It is to be noted that the defendant no.1 also filed counter claim seeking partition of 1/3rd share in above two registered trade marks.

11. The defendant no.1 also moved the application (Exh.16) for the grant of temporary injunction against the plaintiffs. The defendant No.1 reiterated the contents of the reply given to the temporary injunction application filed by the plaintiffs and sought relief of temporary injunction alleging that two registered trade marks in question were property of the joint family and, therefore, three brothers have 1/3rd share each therein and hence, the application restraining the plaintiffs from manufacturing and marketing the Jardha under the two registered trade marks namely, Patel Jardha Cow Brand and Vaibhav Brand. This application was also contested by the plaintiff no.1 basically adopting his own pleadings in his own application for temporary injunction.

12. The learned trial Judge heard both the sides and on the basis of the evidence available on record, thought it proper to appreciate the evidence on record concerning the temporary injunction applications filed by the rival parties and came to the conclusion that plaintiffs had made out prima facie case for grant of temporary injunction and defendant no.1 had failed to make out a prima facie case. Further it was held that the plaintiff would suffer irreparable injury if temporary injunction was not granted, whereas, the defendants' plea on that count was rejected. The principle of balance of convenience also was found to be tilted in favour of the plaintiff and against the defendant no.1 and as such, the temporary injunction application filed by the plaintiff came to be allowed whereas, the defendants' application came to be rejected. Under the circumstances, the defendant proceeded to file the present appeals, against the said omnibus order. Similarly, application for appointment of receiver under Order 40 of the Code of Civil Procedure also came to be rejected.

13. I heard the learned Counsel for the parties and perused the record. Both the learned counsel for the parties made various submissions relying on rulings of this Court as well as the Apex Court in this regard. I have gone through those rulings as well as the submissions critically and having considered all the relevant facets of those submissions advanced on behalf of both the parties, I have come to the conclusion that the learned trial Judge was right in holding that the plaintiff No.1 has proved his prima facie case. It is also found that the learned trial Judge was also right in holding that the balance of convenience tilted in favour of the plaintiffs and they would suffer irreparable injury, if temporary injunction is not granted in their favour. As against this, I am also in agreement with the finding recorded by the trial Court wherein it has been held that the defendants' application failed on all these three counts and consequently, rejected the same. Also, the application for appointment of court receiver also is found to be rejected as no case is made out in that regard.

14. At the outset, it may be noted that the record has revealed that it is undisputed that the plaintiffs are manufacturing Chuna whereas, the defendants are not manufacturing the said commodity namely, Chuna. It is also not in dispute that the defendants have not even obtained licence relating to manufacture of Chuna e.g. licence under the Factories Act, licence under the Shops and Establishments Act, permit under the provisions of Prevention of Water Pollution Act etc. They have also no sales tax number relating to Chuna nor they have filed any returns under the Sales Tax Act. Finally, it is also to be noted that there is no nexus or co-relation of the defendants to the name ".........." (Ashik).

15. By contrast, it is established on record that the plaintiff no.3 has undertaken manufacturing of Chuna. It has registered trade mark having monogram i.e. ATP i.e. "Ashok Tobacco Processors". The trade mark of plaintiff no.3 is registered since 7.7.1982 and the product is marketed in the name of "Ashok Chuna". It will not be out of place to note here that it is also evident that son of plaintiff is named as "Ashok". The record further shows that the trade mark of plaintiff no.3 is in existence ever since February, 1981. The trademark "Ashok Chuna" is registered by plaintiff no.3 on 7.7.1982 and since then the plaintiff no.3 is manufacturing the product Ashok Chuna and is paying the sales tax. No evidence by way of rebuttal of any kind is placed on record by the defendants.

16. On the background of this, it is to be noted that the grievance of the respondents - plaintiffs is not about infringement of trademark "ATP" or "Ashok Chuna". The basic grievance is about the passing off. The plaintiffs use the words "Ashok Chuna Nehmi Wapra" on its wrapper for the reasons mentioned above. After using the words "Ashok Chuna Nehmi Wapra" on its wrapper, the wrapper of plaintiffs could be easily distinguished from the wrapper of defendants. Therefore, it leads to the irresistible conclusion that the defendants used the words "Ashik Chuna Nehami Wapara" with an intention to cause deception of the public and to mislead the public and pass off the goods of the defendants as the goods originating from the plaintiffs.

17. The wrappers on the products of the plaintiffs as well as the defendants are also part of the record. It is obvious therefrom that there is phonetic, visual, as well as structural resemblance between the words "Ashok" and "Ashik". Letter by letter, syllable by syllable, there is a close similarity between these two words. The word "Ashik" has no dictionary meaning. It is not the name of anybody in common use. It is only an act of aping with the dishonest intention of deceiving the public by taking recourse to unfair trade practice. Plaintiffs and defendants are dealing with the same product i.e. tobacco. From the fact that the defendant no.1 felt it necessary to make identical copy of the wrapper of the plaintiffs by itself would go to show that it is an admission on the part of defendant no.1 that he wants to take benefit of the goodwill of and the reputation earned by plaintiffs nos. 2 and 3 and to pass off.

18. Perusal of the wrappers also shows that the entire colour scheme, the design, the wording, its placement on the wrapper is exactly the same as that of plaintiff no.2. The ordinary customers are, therefore, impressed to believe that they are purchasing the products of the manufacturers which are one and the same. The imitation is so calculated that it may appear to be only a printing error between the words "Ashok" and "Ashik"; in fact and in reality it is not an error but a well-designed and well calculated strategy thought of by the defendant No.1. The phonetical similarity and the manner and the ink in which the competing letters and the words are written is also the same. A man of average intelligence with imperfect recollection is bound to be deceived, in a given case even an intelligent person is also likely to be mislead and may fall pray to passing off the goods of defendants as if they are the goods of the plaintiff.

19. In view of these aspects and circumstances and taking into account the reasoning adopted by the learned trial Judge, I am of the considered view that the plaintiff has succeeded in establishing a prima facie case. On the other hand, the defendant no.1's application for temporary injunction runs on a different footing and averments made therein are of such nature, which would have to be adjudicated at the time of final hearing on merits and not at the interim stage.

20. Finally, the learned Counsel for the respondents relied upon the ratio laid down by the Apex Court in the case of Wander Ltd. and another Vs. Antox India P. Ltd. [1990 (Supp) SCC 727] wherein it was observed that the object of interlocutory injunction is to protect the plaintiff against injury by violation of his rights for which he could not adequately be compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial.? The need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where the "balance of convenience" lies.

21. Therefore, in my view, the interlocutory remedy is intended to preserve in status quo, the rights of parties which may appear on a prima facie case. The Court also, in restraining a defendant from exercising what he considers his legal right but what the plaintiff would like to be prevented, puts into the scales, as a relevant consideration whether the defendant has yet to commence his enterprise or whether he has already been doing so in which latter case considerations somewhat different from those that apply to a case where the defendant is yet to commence his enterprise, are attracted.

22. It must be remembered that an infringement action is available where there is violation of specific property right acquired under and recognised by the statute. In a passing-off action, however, the plaintiffs right is independent of such a statutory right to a trade mark and is against the conduct of the defendant which leads to or is intended or calculated to lead to deception. Passing-off is said to be a species of unfair trade and competition or of actionable unfair trading by which one person, through deception, attempts to obtain an economic benefit of the reputation which another has established for himself in a particular trade or business. The action is regarded an action for deceit. The tort of passing-off involves a misrepresentation made by a trader to his prospective customers calculated to injure, as a reasonably foreseeable consequence, the business or good-will of another which actually or probably, causes damages to the business or good's of the other trader.

23. In view of this legal position applicable to the present set of facts, there is no doubt whatsoever that the plaintiffs are entitled to the relief of temporary injunction and the learned trial Judge has rightly allowed the application while dismissing the similar application filed on behalf of the defendants. Under the circumstances, I hold that all the appeals are without any merits and, therefore, deserve to be dismissed. Accordingly, all the appeals as well as civil applications are dismissed with no order as to costs. The plea for appointment of receiver stands consequently rejected.

It is clarified that the observations made herein above are strictly limited to the present appeals and should not reflect on the merits of the matters when those are adjudicated in the course of final trial.

At this stage, the learned Counsel for the appellants requested for direction to expedite the hearing of the suit as it is quite old and ripe for hearing.

In view of the facts and circumstances, the hearing of the suit is expedited and it is directed that the learned trial Judge shall dispose of the suit after giving opportunity to both the parties to lead their evidence, if any, within a period of six months from the date of receipt of writ of this Court.

Appeals dismissed.