A.S. Chandurkar JUDGMENT
A.S. Chandurkar, J.
1. An order of injunction passed in the Trade Mark Suit filed by the respondents temporarily restraining the appellant from using the trade mark or trade name "City Collection", in any manner, whatsoever, for business purposes during pendency of the suit is the subject-matter of challenge in this appeal filed under Order-XLIII, Rule 1 (r) of the Civil Procedure Code, 1908 [for short "the Code"].
Parties in the appeal are being referred to by their original status in the suit.
2. It is the case of the plaintiffs that it is a Partnership Firm, duly registered and carrying on business since the year 2001 using the trade name "City Collection". It carries on business of sale of mobile phones, cameras, perfumes etc. The said trade name has been registered under the Copyright Act, 1957, on 29th August, 2013. Its application for registration of the trade mark "City Collection" under the Trade Marks Act, 1999 [for short "the said Act"] made on 28th December, 2011 was pending. According to the plaintiffs, their brand name was well recognized in business circles and that they had acquired immense goodwill and reputation in that regard. On account of prior adoption, long and continuous use, the said trade mark was solely associated with the plaintiffs. The plaintiffs found that the defendant, by using a deceptively similar mark, had started its business in the name "Orange City Mobile Collection" and was in the field of mobile distribution. The trade mark logo of the plaintiffs was copied and this was done with a view to cause confusion amongst the public, thereby affecting the goodwill of the plaintiffs and violating its rights. It is on this basis that in April, 2014, the plaintiffs filed Trade Mark Suit No. 2 of 2014 seeking to permanently restrain the defendant from using its trade name and passing off its goods as those of the plaintiffs. In the said suit, the plaintiffs filed an application for temporary injunction seeking relief of restraining the defendant from using the said trade name for its business purpose during pendency of the suit.
3. The defendant filed its reply to the application for temporary injunction and opposed the same. It was stated that it was doing business of sale of mobile phones in the name and style of "Orange City Mobile Collection" by using common words being "City" and "Collection" It was denied that this was done with a view to mislead the members of the public and that no customer could be confused or misled by adoption of said name, as alleged by the plaintiffs.
4. The trial Court, after hearing both sides, prima facie found that the nature and character of the goods of the plaintiffs and the defendant were similar and that phonetic similarity between the two trade names was likely to deceive or cause confusion amongst customers. On that premise, by order dated 12th June, 2014, the trial Court allowed the application for temporary injunction and restrained the defendant from using the trade name "City Collection" for its business purpose during pendency of the suit.
5. The defendant being aggrieved by the aforesaid order has filed the present appeal. On 13th August, 2014, this Court granted ad interim stay to the order of temporary injunction passed by the trial Court which order was subsequently confirmed.
6. Shri R.L. Khapre, learned counsel for the appellant, submitted that the trial Court was not justified in allowing the application for temporary injunction. He submitted that the words "City" or "Collection" were generic words and the plaintiffs could not claim exclusive user of the same. According to him, the said words were not separately sought to be registered and that the application for registration of the trade mark was made under Clause 35 of the Fourth Schedule to the Trade Marks Rules, 2002. According to him, the defendant was using the trade name "Orange City Mobile Collection" and the words "City" and "Collection" were prefixed by different words. Any customer of ordinary intelligence could distinguish the difference between the two trade names. Referring to the provisions of Sections 17 and 29 of the said Act, it was submitted that the plaintiffs were not entitled for an order of temporary injunction. It was then submitted that the plaintiffs had failed to make out any case for grant of temporary injunction and that necessary ingredients for seeking such an order were lacking. There was no material on record brought by the plaintiffs to indicate that their business had suffered after the defendant started its business. In absence of the trade name of the defendant being deceptively similar to the trade name of the plaintiffs, there was no case for grant of temporary injunction. It was urged that the words "Orange City" indicated the identity of the city where the defendant was doing business and it was a common trade name in the City of Nagpur. Moreover, there was considerable distance between the shop of the plaintiffs and the defendant. The learned judge of the trial Court, without considering these aspects of the matter, proceeded to grant temporary injunction in a manner contrary to law. Lastly, it was submitted that the appellant was willing to increase the fonts of the words "Orange" and "Mobile" in its logo so as to make the entire name conspicuously visible. In support of his submissions, the learned counsel placed reliance upon the following decisions:-
[a] Three-N-Products Pvt. Ltd. Vs. Emami Ltd. [MANU/WB/0011/2010 : 2010 DGLS (Cal.) 32],
[b] Hindustan Sanitaryware & Industries Ltd. Vs. Champion Ceramic [2001 (45) P.T.C. 260],
[c] Shelke Beverages Pvt. Ltd. Vs. Rasiklal Manikchan Dhariwal & another [MANU/MH/0289/2010 : 2010 (4) Mh. L.J. 282],
[d] Plus Inc. Vs. Consim Info Pvt. Ltd. & another [MANU/MH/0939/2009 : 2009 BCI 201],
[e] Lohia Auto Industry Vs. Lohia Starlinger Ltd. [MANU/UP/0916/2009 : AIR 2010 Allahabad 37],
[f] S. B.L. Ltd. Vs. Himalaya Drug Co. [MANU/DE/0311/1997 : AIR 1998 Delhi 126],
[g] M/s. Bharat Enterprises (India) Vs. M/s. C. Lall Gopi Industrial Enterprises & others [MANU/PH/0003/1999 : AIR 1999 Punjab & Haryana 231],
[h] Skyline Education Institute (Pvt.) Ltd. Vs. S.L. Vaswani & another [MANU/SC/0009/2010 : AIR 2010 SC 3221],
7. Shri G.E. Moharir, learned counsel for the plaintiffs, supported the impugned order. He submitted that the words "City Collection" were not generic words in so far as the business of mobile phones was concerned. As the businesses done by both the parties were similar, the defendant by adding the words "Orange" and "Mobile" to the trade name of the plaintiffs had sought to deceive the general public. According to him, the end users of the products sold by the parties were not educated and as both the parties operated in the city of Nagpur, the distance between their shops was immaterial. According to the learned counsel, the trial Court after considering all the relevant material on record had rightly exercised discretion by granting temporary injunction in favour of the plaintiffs. He also referred to the photographs placed on record to indicate the similarity between the logos of both parties due to deceptive use of the words "City Collection" by the defendant.
It was then submitted that the application for registration of the trade mark was made in the year 2011 and the same was pending when the suit was filed. During pendency of the suit, the said trade mark was duly registered by granting Certificate on 10th September, 2015. He referred to the additional submissions made on behalf of the plaintiffs and submitted that the subsequent developments in that regard deserve to be taken into consideration. The learned counsel placed reliance on the following decisions to substantiate his submissions :-
[a] Gaiv Dinshaw Irani & others Vs. Tehmtan Irani & others [MANU/SC/0475/2014 : (2014) 8 SCC 294],
[b] Ramdev Food Products Pvt. Ltd. Vs. Arindbhai Rambhai Patel & others [MANU/SC/3725/2006 : AIR 2006 SC 3304],
[c] Sun Pharmaceuticals Industries Ltd. Vs. Emcure Pharmaceuticals Ltd. [MANU/MH/0020/2012 : 2012 (2) Mh. L.J. 37],
[d] Ruston and Hornby Ltd. Vs. Zamindara Engineering Co. [MANU/SC/0304/1969 : AIR 1970 SC 1649],
[e] Kamat Hotels (India) Ltd. Vs. Royal Orchid Hotels Ltd., & another [MANU/MH/0437/2011 : 2011 (4) Mh. L.J. 71],
[f] Midas Hygiene Industries P. Td. Vs. Sudhir Bhatia & others [MANU/SC/0186/2004 : (2004) 3 SCC 90],
[g] Pearl Retail Solutions Pvt. Ltd. Vs. Pearl Education Society [MANU/DE/0839/2013 : AIR 2013 Delhi 181],
[h] M/s. Kirorimal Kashiram Marketing & Agencies Pvt. Ltd. Vs. M/s. Shree Sita Chawal Udyog Mill Tolly Vill [FAQ (OS) No. 286/2008 decided on 30th August, 2010 by Delhi High Court],
[i] Shri Govindlal Mohanlal Mohata & another Vs. Dilip @ Aniruddha Mukundrao Buty [A.O. No. 58/2009; decided on 16th June, 2009 [Coram R.C. Chavan, J.],
[j] M/s. Heinz Italia & another Vs. M/s. Dabur India Ltd. [MANU/SC/2133/2007 : (2007) (6) Mh. L.J. 7],
[k] Drums Food International Pvt. Ltd. Vs. Euro Ice Cream & another [MANU/MH/0836/2011 : 2011 (5) Mh. J. J. 166], and
[l] M/s. AZ Tech (India) & another Vs. M/s. Intex Technologies (India) Ltd. & another [CS [OS] 2060/2013, decided on 24th Dec., 2016 by Delhi High Court],
8. In reply to the aforesaid submissions, it was urged by Shri R.L. Khapre, learned counsel for the defendant, that the scope of the present appeal filed under provisions of Order-XLIII, Rule 1 (r) of the Code was limited and unless the subsequent developments were brought on record in the manner prescribed by law, same could not be taken into consideration in the appeal. In that regard he placed reliance upon judgment of the Madhya Pradesh High Court in Dhundasingh Vs. Leeladhar & another [MANU/MP/0005/1982 : AIR 1982 MP 14].
9. I have heard the learned counsel for the parties at length and I have perused the documents placed on record. I have also given due consideration to the respective submissions.
Since the plaintiffs have sought to rely upon certain subsequent developments that have occurred after filing of the suit and as the manner in which the same is sought to be done is contested by the defendant, it would be necessary to first consider whether the plaintiffs can be permitted to rely upon the said subsequent developments in this appeal.
10. The plaintiffs filed the trade mark suit in April, 2014. The trial Court allowed the application for temporary injunction on 12th June, 2014 that has been challenged in the present appeal filed under provisions of Order-XLIII, Rule 1 (r) of the Code. The scope of the present appeal would be to examine the correctness of the order passed by the trial Court under provisions of Order-XXXIX, Rules 1 and 2 of the Code. As per provisions of Order-XLIII, Rule 2 of the Code, the rules of Order-XLI are made applicable, as far as may be, to appeals from orders. The manner in which additional evidence can be produced before the Appellate Court is stipulated by provisions of Order-XLI Rule 27 (1) of the Code and sub-clause (b) of Rule (1) also deals with challenge to an order before the Appellate Court.
11. In the present case, the subsequent developments sought to be relied upon are the grant of trade mark certificate to the plaintiffs during pendency of the suit. It is to be noted that when the suit was filed, the plaintiffs had sought to restrain the defendant from passing off its goods as those of the plaintiffs. These subsequent developments have not been brought on record by the plaintiffs by amending the plaint in the trial Court. Similarly, no permission of this Court has been sought in that regard under provisions of Order-XLI Rule 27 (1) of the Code. Merely by filing an affidavit, the said fact is sought to be relied upon in the appeal. Considering the scope of an appeal under provisions of Order-XLIII, Rule 1 (r) of the Code which is limited to examining the correctness of the order passed by the trial Court under provisions of Order-XXXIX, Rules 1 and 2 of the Code, the plaintiffs merely by filing an affidavit cannot seek to rely upon any subsequent event without amending the plaint or by seeking permission to produce additional evidence. The order impugned cannot be assailed by relying upon grounds/facts which do not find place in the pleadings of the parties.
The aforesaid approach is fortified by the observations of the Honourable Supreme Court in Dhariwal Industries Ltd. & another Vs. M.S.S. Food Products [MANU/SC/0160/2005 : (2005) 3 SCC 63]. In paragraph 6 of the said decision, it has been observed thus:
"6. Before proceeding to consider the appeal, we may observe that in this appeal, various documents, not produced before the trial court or before the lower appellate court, have been produced and elaborate arguments addressed based on those documents. The present proceeding is an appeal by special leave against an order passed by the High Court in an appeal under Order 43 Rule 1 (r) CPC and normally the appeal here must be considered based on the material that was produced before the trial court or before the appellate court in terms of the permission granted by that court under Order 41 Rule 27 CPC. ....."
12. In Dhundasingh [supra], the appellate Court, while hearing an appeal under provisions of Order-XLIII, Rule 1 (r) from an order granting interim injunction, had allowed an amendment to the plaint. In that context, it was held that the appellate Court being seized only of the appeal filed under Order-XLIII, Rule 1 (r) of the Code had no seisin over the suit and hence the amendment could not have been allowed by the appellate Court. The Court noticed the distinction between a regular appeal raising challenge to a decree and a miscellaneous appeal raising challenge to an order. The ratio of said decision supports the argument of the learned counsel for the defendant. The decision relied upon by the learned counsel for the plaintiffs in Gaiv Dinshaw Irani & others [supra] with regard to moulding of relief by considering subsequent events is with regard to an appeal filed under Section 96 of the Code. The present appeal not being one under Section 96 of the Code, the law laid down therein cannot be made applicable to the facts of the present case.
Hence, I find that it would not be permissible for this Court while entertaining the present appeal, to take into consideration the subsequent events relied upon by the plaintiffs as the same have not been brought on record either by amending the plaint before trial court or by seeking permission under provisions of Order-XLI Rule 27 (1) of the Code. The appeal would have to be decided on the basis of the material that was placed on record before the trial Court. For this very reason, I have not gone into the submissions and case law relied upon with regard to infringement of trade marks and I have confined myself to considering the submissions on the aspect of passing off alone.
13. The suit as filed is based on alleged infringement of the plaintiffs' trade name with regard to which an application for its registration was pending under the provisions of the said Act when the suit was filed. The relief as sought is, therefore, based on a passing off action. Under provisions of Section 27 (2) of the said Act, the common law right of action for passing off goods or services of another person has been recognized. This common law right is a right in tort and it is on that basis that the claims of the parties would have to be adjudicated. In Kaviraj Pandit Durga Dutt Sharma Vs. Navaratna Pharmaceutical Laboratories [MANU/SC/0197/1964 : AIR 1965 SC 980], it has been held that while an action for infringement of a trade mark is a statutory remedy, the action for passing off is a common law remedy recognized by law. In an action for passing off, it was held that the defendant could escape liability if it could be shown that the added matter was sufficient to distinguish his goods from those of the plaintiff.
At this stage, it would be apposite to refer to the decision of the Honourable Supreme Court in M/s. S.M. Dyechem Ltd. Vs. M/s. Cadbury (India) Ltd. [MANU/SC/0407/2000 : (2000) 5 SCC 573]. While considering the difference between a passing off action and one for infringement, it was held that in a passing off action, additions, get-up or trade dress could be relevant to enable the defendant to escape. In infringement cases, such facts do not assume relevance. It was then observed that on the same facts, a suit for passing off may fail but a suit for infringement may succeed. Said decision also holds that in trade mark matters, while considering the prayer for grant of temporary injunction, the comparable strength of the cases of either parties has also to be gone into.
14. The manner in which an action for passing off has to be considered has been laid down in Ayushakti Ayurved Pvt. Ltd. & others Vs. Hindustan Lever Ltd. [MANU/MH/0256/2003 : 2003 (4) Mh. L.J. 915]. It was observed that claims in passing off action are not for an infringement of property rights, but are for misrepresentation by the defendant. The learned Single Judge [S.A. Bobde, J] [as His Lordship then was] also considered the manner in which the Court should consider the relevant material brought on record by the parties. The submission as made that material in the form of a survey undertaken to indicate the effect of misrepresentation on account of such passing off was desirable, was considered favourably. In that context, it was observed in para 22 as under:-
"22........................................................................................It must be remembered that claims in passing off action are not for an infringement of property rights but for misrepresentation by the defendant. Therefore, if the alleged confusion is the result of the exercise by the defendant of his legitimate rights to use certain common words in order to compete with the plaintiff the Court must be hesitant in granting such an injunction. At the prima facie stage, without actual instances of witness having been deceived, it would be sufficient for the Court to form a broad impression that there is no confusion by and large and not decide merely on the basis of an affidavit of a person who claims that he got confused or as observed in some cases. In this view of the matter, I consider it appropriate to refuse the injunction. "
In Sun Pharmaceuticals Industries Ltd. [supra], the requirements in an action for passing off have been stated in para 14 as under:-
"14...........................................................................................In an action for passing off, the plaintiff must demonstrate a misrepresentation by the defendant to the public leading or likely to lead the public to believe that the goods or the services offered by him are the goods or services of the plaintiff. The plaintiff must establish that it has suffered or is likely to suffer by the misrepresentation. It is the misrepresentation to the public that the defendant's goods are actually those of the plaintiff that is actionable and an essential pre- requisite in a passing off action. A plaintiff is not likely to suffer damages merely by defendant adopting a deceptively similar mark. There can be no misrepresentation as required in a passing off action unless the mark is put to use. It is the use thereof in the course of trade that constitutes to misrepresentation which in turn results in damage to the plaintiff. It follows then that the mere adoption of a mark by a party does not furnish a cause of action to seek a relief against the tort of passing off."
As regards use of generic words in the trade name of the plaintiffs, at this prima facie stage, the following observations of the Division Bench of the Calcutta High Court in Three-N-Products Pvt. Ltd. [supra] can be kept in mind:-
"32. When a person decides to espouse a trade name consisting of a word of common or generic use, some risk of uncertainty in this regard is inescapable. In such cases, the Courts, in one hand, will not readily infer that the use of such a word by a rival in the business as part of the trade name of the latter would likely to cause confusion, but at the same time, have also the duty to protect the right of individuality accrued to the first user and will rather acknowledge even a small variation from the trade name used by the former at the instance of the latter as sufficient to overcome the allegation of passing off."
15. In the light of the aforesaid position, if the pleadings of the plaintiffs are considered, it can be seen that it has been averred by the plaintiffs that for last many years, its trade name "City Collection" was well known and recognized in business circles and that the plaintiffs had acquired goodwill and reputation under the said trade mark. It is then pleaded that due to use of a deceptively similar trade mark by the defendant, the plaintiffs were suffering losses, both in business and in reputation. It is on these pleadings that the plaintiffs had sought grant of interim injunction. The plaintiffs, however, did not place on record any prima facie material to indicate that due to the alleged use of a deceptively similar trade name by the defendant, they had suffered some loss of clientele or that their turnover had reduced. There is not a single instance either pleaded or placed on record of a customer being misled or deceived on account of the use of deceptively similar trade name by the defendant. Some material in that regard was necessary in the facts of the present case for the purpose of making out a prima facie case as one of the ingredients while seeking interim injunction. Prima facie material in that regard appears to be lacking on record. As observed in Ayushakti Ayurved [supra], at a prima facie stage without any actual instance of witnesses having been deceived, it would be sufficient for the Court to form a broad impression that there is no confusion by and large.
16. Another relevant aspect is that the plaintiffs claim to be registered as service providers with regard to various items. The application dated 28th December, 2011 seeking registration under Clause 35 of the Fourth Schedule to the Trade Marks Rules, 2002 indicates that the services intended to be provided are "Display, distribution & supply in the respect of mobile phones, all imported cosmetic, perfume, digital camera, handly camera & electronics goods & retail, all chain stores, wholesale & retail outlets." According to the plaintiffs, the defendant is dealing with mobile phones which is only one activity of the various services being offered by the plaintiffs. Considering the various services being provided by the plaintiffs in contrast with the exclusive service with regard to mobile phones offered by the defendant, prima facie, use of the word 'mobile' in the trade name of the defendant has relevance for being considered as a distinguishing feature in both the marks. The observations of the Honourable Supreme Court in S.M. Dyechem Ltd. [supra] that additions in the trade name would be relevant in a passing off action would, therefore, apply to the case in hand, at least at this prima facie stage..
17. After considering the law laid down in Ruston and Hornby Ltd., Ramdev Food Products Pvt. Ltd., and Midas Hygiene Industries Pvt. Ltd. [supra], I find the material placed on record by the plaintiffs insufficient to make out a prima facie case for grant of temporary injunction in their favour. The variety of services provided by the plaintiffs as contrasted with the services provided by the defendant, use of the word 'mobile' in the trade name of the defendant which is prima facie found relevant in the passing off action and absence of any material to indicate customers being misled or deceived are relevant aspects resulting in absence of making out a prima facie case. These factors would also have a bearing on the comparable strength of the plaintiffs' case which has also to be taken into account while considering the prayer for grant of temporary injunction. There is further no prima facie material placed on record by the plaintiffs that there has been some fall in their sales as a result of the alleged passing off acts of the defendant which aspect has been found relevant by the Division Bench in Shelke Beverages Pvt. Ltd. [supra]. This factor has also been considered in M/s. AZ Tech (India) [supra] that was relied upon by learned counsel for the plaintiffs.
18. Hence, I do not find the material placed on record by the plaintiffs prima facie sufficient to grant an order of temporary injunction in their favour as prayed. The trial Court while passing the impugned order failed to take into consideration the aforesaid settled principles of law regulating grant of temporary injunction. On said count, by following the ratio of the decision in Wander Ltd. Vs. Antox India (P) Ltd. [MANU/SC/0595/1990 : 1990 (Supp) SCC 727] that has been reiterated in Ramdev Food Products P. Ltd. and Skyline Education Institute (Pvt.) Ltd. [supra], a case for interference with the discretion exercised by the trial Court has been made out.
However, in the decision in Kaviraj Pandit Durga Dutt Sharma [supra], it has been observed that in an action for passing off, defendant could escape liability if it can be shown that the added matter was sufficient to distinguish his goods from those of the plaintiff. In the light of this position and accepting the statement made on behalf of the defendant that the defendant was willing to increase fonts of the words "Orange" and "Mobile" in its logo to make the entire trade name of the defendant conspicuously visible, the defendant can be directed without prejudice to the rights of the parties to increase the fonts of said words in its logo during pendency of the suit.
19. As a result of the aforesaid discussion, the following order is passed:-
ORDER
[a] The order passed by the trial Court below Exh.5 dated 12th June, 2014 is quashed and set aside. The application below Exh.5 stands rejected.
[b] Without prejudice to the rights of the parties and during pendency of the suit, the defendant is directed to increase the size of the fonts of the words "Orange" and "Mobile" in its logo so as to make its entire trade name "Orange City Mobile Collection" conspicuously visible. Necessary changes in that regard be carried out within a period of four weeks from today.
[c] In the facts of the case, the proceedings being Trade Mark Suit No. 2 of 2014 are expedited and suit shall be decided by the end of October, 2017.
[d] It is clarified that the observations made in this judgment are only for the purposes of deciding the application for temporary injunction. The trial Court shall decide the suit in accordance with law without being influenced by any observations made therein.
20. Appeal from Order is allowed in aforesaid terms with no order as to costs.
© Manupatra Information Solutions Pvt. Ltd.