*
IN THE
HIGH COURT OF DELHI AT NEW DELHI
RESERVED ON : 19th MARCH, 2018
DECIDED ON : 29th MAY, 2018
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CS(COMM) 109/2018 & IA
Nos.13188/14 & 7639/17
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M/S.J.K.OIL
INDUSTRIES
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Plaintiff
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Through : Mr.S.K.Bansal, Advocate
with Mr.Ajay Amitabh Suman, Advocate.
versus
M/S. ADANI WILMAR LIMITED .....
Defendant
Through : Mr.Rajiv Nayar, Sr.Advocate with Mr.Sushant Singh, Mr.Saurabh
Seth & Mohd.Umar Iqbal Khan, Advocates.
CORAM:
HON'BLE MR. JUSTICE S.P.GARG
S.P.GARG, J.
IA 13187/2014 (u/S 124 Trade
Marks Act)
1. The defendant
has filed the
instant application under Section
124 of the Trade Marks Act (hereinafter ‘the Act’) read with Section
151 CPC for stay of the present proceedings pending final disposal of rectification application filed by it. The application is contested
by the plaintiff.
2. I have
heard the learned counsel for the parties and have
examined
the file.
CS(COMM)
109/2018 Page 1 of 15
3. Present suit under Sections 134 and 135 read with Section 27(2) of
the Act; Copy Right Act, 1957, has been instituted by the plaintiff for
permanent injunction restraining infringement, passing off, rendition of
accounts, etc. against the defendant. By an order dated 08.01.2010 in IA
No.107/2010, the defendant was restrained from using, selling, soliciting,
exporting, displaying and advertising the infringing mark appended at page No.4
of the documents filed by the plaintiff till the next date of hearing. By an
order dated 10.02.2010 in IA No.107/2010 (u/O XXXIX Rule 1 & 2 CPC, by the
plaintiff) and IA No.1405/2010 (u/O XXXIX Rule 4 CPC, by defendant), this Court
by a detailed order dismissed IA No.107/2010 and allowed IA No.1405/2010.
FAO(OS) No.213/2010 to challenge the said order resulted in dismissal. SLP came
to be dismissed by an order dated 07.07.2010.
4. On 19.09.2011, when IA No.14894/2011 filed by
the defendant came for hearing, the defendant sought leave of this Court to
file rectification application before the Intellectual Property Rights Board
(hereinafter ‘IPRB’). Learned counsel for the non-applicant / plaintiff
submitted that there was no necessity of filing the said application as no
leave of the Court was required. In view of that, the defendant submitted that
no further orders were required to be passed and that he would take appropriate
steps. The said application stood disposed of that day.
5. On 15.12.2011, with the consent of the parties, issues were framed.
It was pointed out by the learned counsel for the defendant that an application
for rectification of the trade mark of the
CS(COMM)
109/2018 Page 2 of 15
plaintiff was pending and in view of the order
dated 19.09.2011, the defendant was entitled to file an application for
rectification. Defendant’s counsel sought leave of the Court to make an
appropriate application in case the application for rectification was allowed
as the same would have a direct bearing to the outcome of the present suit and
an additional issue would thereafter be required to be framed. The case was
adjourned for recording plaintiff’s evidence.
6. When the evidence of the plaintiff was being
recorded, IA No.13187/2014 in question came to be filed by the defendant along
with IA No.13188/2014 (u/O XIV R 1 CPC). By the order dated 21.07.2014, this
Court directed the Registrar not to record evidence. The said directions
continued till 05.10.2015, when the Joint Registrar was permitted to record the
evidence.
7. Learned counsel for the defendant urged that earlier IA No.14894/2011
was filed due to legal compulsion, as per the law laid down in ‘Astrazeneca UK Ltd. & Anr. Vs. Orchid
Chemicals’, 2006 (32)
PTC 733 Delhi, permission of the
court was sine qua non for filing cancellation pending the suit. The position
of law has since been changed recently in view of Full Bench judgment ‘Data Infosys Ltd. vs. Infosys Technologies Ltd.’, MANU/DE/0283/2016. No effective orders were passed on
19.09.2011 in IA No.14894/2011; it did not preclude the defendant to pray to
the Court to complete the statutory mandate of Section 124 of the Act by filing
the instant IA. He further urged that three months’ time to file rectification
application is to commence from the date of framing of issues under Section 124(1)(b)(ii) of the Act. Cancellation petition dated
CS(COMM)
109/2018 Page 3 of 15
29.02.2012 was filed within three months making it
fully compliant of Section 124 of the Act. The defendant had never abandoned
its plea of invalidity as it always agitated the issue of invalidity from the
very inception and also filed cancellation within three months. Additional
issue was required to be framed as urged by the defendant and for that reason
the process under Section 124 of the Act remained incomplete. Relying upon ‘Bhagwan Dass Khanna Jewellers Pvt. Ltd.&
Ors. vs. Bhagwan Das Khanna Jewellers’,
2017 (70) PTC 56 (Del)(DB), counsel
urged that it was the court’s duty to frame the issues and adjourn the case for
three months. Counsel further urged that provisions of Section 124 of the Act
are mandatory in nature; it does not provide any such limit as to when the
trial of the suit can be stayed. As per law laid down in ‘Data Infosys’ (supra) only pre condition for stay of the
proceedings is that the rectification must be filed within a period of three
months or the extended period of time from the date of framing of the issues.
The plaintiff cannot be permitted to take advantage of his own wrong which
resulted in the passing of the order dated 19.09.2011. Learned counsel further
urged that provision of Section 124 of the Act are applicable even in a
composite-suit filed for ‘passing off’.
8. He further urged that the judgment ‘Puma Stationer P.Ltd. &
Anr. vs. Hindustan Pencils Ltd.’, 2010 (43) PTC 479 (Del)(DB), cannot be relied upon as it did not adjudicate the
issue of staying the suit for ‘passing off’ along with infringement; it did not
constitute precedent. Reliance was placed on ‘Nippon Soda Co.Ltd. vs.
V.P.Goyal & Anr.’ 2014 (58) PTC 386 (Del) and ‘Abbott
CS(COMM)
109/2018 Page 4 of 15
9. Learned counsel for the plaintiff urged that the
proceedings cannot be stayed under Section 124 of the Act as the plea of
invalidity was never raised by the defendant in the written statement. The
defendant was required to file cancellation petition within three months from
19.09.2011 to get the suit stayed. However, the cancellation petition was filed
only in February, 2012 which is beyond the period prescribed under Section
124(1)(b)(ii). The defendant had abandoned the plea of invalidity of the
plaintiffs’ registered trademark. Learned counsel further urged that when the
issues were framed on 15.12.2011 with the consent of the parties, the defendant
did not insist for framing of issue on invalidity of the plaintiff’s registered
trademark. The application is liable to be dismissed due to gross delay in
filing the cancellation petition. The evidence is being recorded in the present
proceedings. Relying upon ‘Micolube India
Ltd. vs. Maggon Auto Centre & Anr.’, 2010 (42) PTC 462 (Del), counsel
urged that the present suit relates to infringement and ‘passing off’ since
Section 124 is applicable only to infringement; the suit in relation to ‘passing
off’ must continue. Reliance was placed on ‘Data
Infosys Ltd. & Ors. vs. Infosys Technologies Ltd.’ (Supra); ‘Dabur India Ltd. vs. Alka Ayurvedic Pvt.
Ltd.’, 2009 (41) PTC 614 (Del.); ‘Puma
Stationer P.Ltd. & Anr. vs. Hindustan Pencils Ltd.’, 2010 (43) PTC 479 (Del)(DB); ‘Formica International Ltd. vs. Caprihans (India) Pvt. Ltd. and Ors.’,
AIR 1966 Cal 247; ‘M/s.Shakti Traders vs. M/s.Shakti Press Ltd.’,
2008 (5) All M.R. 699 and ‘M/s.
CS(COMM)
109/2018 Page 5 of 15
10. On perusal of the sequence of events referred
above, it reveals that the defendant had filed the application for stay of the
proceedings under Section 124 without inordinate delay on 19.09.2011. Learned
counsel for the plaintiff himself apprised the Court that there was no necessity
to file the said application as no leave was required from the Court. On that,
the defendant was permitted to take appropriate steps. It is informed that the
rectification
/
cancellation proceedings were
initiated by the plaintiff thereafter on 29.02.2012; it is not at issue.
Perusal of the record reveals that the plea of invalidity was raised by the
defendant even in the IA No.14894/2011. By that application, the defendant
sought permission from the Court to file necessary rectification application for
removal / rectification / modification to the registration of the plaintiff’s
mark.
In the written statement, in various paras, the
plea of invalidity has been indirectly raised. Order dated 10.02.2010 in IA
No.107/2010 (u/O XXXIX R 1 & 2 CPC, by plaintiff) and IA No.1405/2010 (u/O
XXXIX R 4 CPC, by defendant) is crystal clear whereby the earlier ex-parte
injunction granted to the plaintiff was vacated forming a prima facie view that
the trademark ‘KING’ of the plaintiff was common to English language and did
not have distinctive character and he could not enjoy exclusivity over the part
of the trademark under Section 17 of the Act. It was specifically argued at
that time that the proceedings were liable to be stayed under Section 124 of
the Act. At the time of consideration of issues on 15.12.2011, the
CS(COMM)
109/2018 Page 6 of 15
defendant’s counsel had pointed out that an application for rectification
of the plaintiff’s trademark was pending. It was further urged that in view of
the order dated 19.09.2011, the defendant was entitled to file an application
for rectification. The defendant sought leave of the Court to make an
appropriate application and if allowed it would have a direct bearing on the
outcome of the present suit and additional issue would be required to be
framed. Apparently, the defendant never abandoned the plea of invalidity,
filing of rectification proceedings thereafter within three months of the
framing of the issues on 29.02.2012 confirms it. Since the rectification proceedings
have been filed within three months from the date of issues, it cannot be
inferred that there was inordinate delay in filing the rectification
proceedings. In ‘Bhagwan Dass Khanna
Jewellers Pvt. Ltd.& Ors. vs. Bhagwan
Das Khanna Jewellers’ (supra),
the Division Bench of this Court
observed that it is the Court’s duty to frame the issue and adjourned the case
for three months and non-observance of the said recourse cannot lead to the
abandonment of the plea or the application under Section 124 being time barred
and the time limitation in such a case shall not start running against the
party. Settled position is that the issue with respect to invalidity of the
trademark is to be decided by the Board and not by the Civil Court.
11. In the recent judgment ‘Patel Field Marshal Agencies & Anr. vs. P.M.Diesels Ltd. & Ors’, 2018 (73) PTC 15 (SC), the
Hon’ble Supreme Court while
interpreting Section 111 para materia to Section 124 of the Act held that in
that case the issue with respect to the invalidity of the trademark would be
decided by the Tribunal and not
CS(COMM)
109/2018 Page 7 of 15
by the Civil Court. However, the
Tribunal will come in sesin only if
the Civil
Court was satisfied that the issue with regard to invalidity
ought to be framed in the suit. Once
an issue to the said effect is
framed,
the matter will thereafter go to the Tribunal and the decision
of the Tribunal will thereafter bind the Civil Court. If despite the
order of
the Civil Court, the parties do not approach Tribunal for
rectification,
the plea of invalidity will no longer survive.
12. Since the
defendant has never
abandoned the plea
of
invalidity and
has filed the
rectification proceedings within
three
months
before the Board, the proceedings in the present case under
Section
124 of the Act regarding plaintiff’s suit for infringement of the
trademark
are liable to be stayed.
13. This
Court finds merit in the plea of the learned counsel
for the
plaintiff that in
a suit for ‘passing off’,
the proceedings,
however,
would continue. Section 124 of the Act
is applicable only to
the suits
for stay of infringement till the final decision of the pending
rectifications. This Court in ‘Micolube India Ltd. vs. Maggon Auto
Centre & Anr.’(supra)
decided on 14.01.2010 categorically held :
“18. A
plain reading of the said provision indicates that while considering an
application for the stay of the proceedings where the validity of the
registration of the trade mark is questioned, an order can be passed in a suit
for infringement of trademark. In the present case, since both the parties are
holding the registration of the same mark, thus the suit filed by the plaintiff
for infringement of trademark is not maintainable in view of Section 28(3) and Section
30(2)(e) of the Act. It cannot be disputed that the suit for passing
CS(COMM)
109/2018 Page 8 of 15
off would
be maintainable. Section 124 does not specifically mandates that while staying
the suit for infringement of trademark, an action for passing off shall also be
stayed. Therefore, I am of the view that the suit for passing off can continue.
XXXX XXXX XXXX
20.
In view of the aforesaid circumstances, the present
application is allowed partly as far as the suit of infringement of trade mark
is concerned and the same is stayed till the final decision of the pending
rectifications. But, the suit filed by the plaintiff for passing off shall
continue and is to be considered on its own merit, and the prayer of stay the
suit for passing off cannot be accepted. I.A. No. 3915/2009 is disposed of with
the abovementioned observations.”
(Emphasis given)
14. Again, the Division Bench of this Court in ‘Puma
Stationer P.Ltdd. & Anr. vs. Hindustan Pencils
Ltd.’ (supra) decided on
16.02.2010 held :
“15. We
are of the view, therefore, that the law on this issue is quite well
settled. Where an application for rectification/cancellation of a registered
trade mark is pending before the statutory authority, the High Court is obliged
to stay further proceedings in the suit pending before it pursuant to Section
124(1) of the Trade Marks Act, 1999.
16.
In so far as the suit out of which present appeal arises is concerned,
there is an allegation against the Appellants of passing off the trade mark
'Plasto' as well as 'Non-Dust' and there is an allegation of infringement of
the trade mark 'Non-Dust'.
CS(COMM)
109/2018 Page 9 of 15
17.
In view of the express provisions of Section 124 of Trade Marks Act, we
stay further proceedings in the suit in so far as the alleged infringement is
concerned with regard to the trade mark 'Non-Dust' until the disposal of the
matter before the Intellectual Property Appellate Board. It is, however, made
clear that the passing off action may continue.”
(Emphasis given)
15. Similar view
was taken in ‘Formica International Ltd.
vs.
Caprihans India Pvt. Ltd. & Ors.’, AIR
1966 Cal 247 :
“9. From
what I have observed above it follow that the causes of action for infringement
and " passing off " are distinct and separate and one of them may
fail while the other may succeed on the same evidence. In a suit where the two
causes of action are combined and the defendant seeks to invoke the provisions
of Section 111 the Court, in my view, has the power and the duty to stay the
suit so far us it relates to infringement of trade mark. The Court trying the
suit must wait for the result of the rectification proceedings before it passes
any final order or decree involving the validity of the registration. I realise
that the result will be that the suit may have to be tried piecemeal. But
having regard to the mandatory provisions of Section 111, I do not see any
other alternative. Learned counsel for the petitioner has urged that where a
plaintiff with full knowledge of the pending rectification proceedings drafts
his plaint in such a manner as to make the issues of infringement and
"passing off" inseparable the whole suit ought to be stayed. But the
legislature does not give to the Court the power to stay a suit for
"passing off". At the same
CS(COMM)
109/2018 Page 10 of 15
time the
legislature says that when rectification proceedings are pending it is the duty
of the Court to stay the suit for infringement in order that conflicting
decisions may be eschewed. The legislature says further that the Court must
dispose of the suit in conformity with the final order in the rectification
proceeding in so far as the suit relates to the validity of the registration, I
do not think that learned counsel for the respondent is right in contending
that a combined action is outside the purview of Section 111. If that were the
case the entire purpose of enacting this section can be frustrated in every
case by combining an action for infringement with an action for "passing
off", and conflicting decisions in the rectification proceedings and in
the suit may create problems incapable of being solved. It should be remembered
that these proceedings may be pending either before the Registrar or the High
Court and my attention has not been drawn to any provision in the statute which
provides for a solution of the problem that I have broached. The only course
left to the court which is concerned with the suit is to stay the action for
infringement till the rectification proceedings are finally disposed of. That,
I am of opinion, was the intention of the legislature, when Section 111 was
introduced into the Trade and Merchandise Marks Act, 1958.”
16. High Court
of Judicature at
Bombay, Nagpur Bench,
Nagpur,
in ‘M/s.Shakti Traders vs. M/s.Shakti
Press Ltd.’, 2008 (5)
ALL MR
699, decided on 29.07.2008 in Writ Petition No.4736/2007
held :
CS(COMM)
109/2018 Page 11 of 15
“11.
Perusal of the above provisions clearly discloses that a suit can be filed
either for infringement of a registered trade mark or for passing off action
under Section 134 of the Act. Under Section 124 of the Act the court trying the
suit for infringement of a trade mark is bound to stay the suit if any
proceedings for rectification of the registration in relation to the plaintiff’s
or defendant’s trade marks are pending before the Registrar or the Appellate
Board. Thus, it is clear that the court dealing with a suit for infringement of
a trade mark only is bound to stay the suit when proceedings are pending before
the Registrar or the Appellate Board.
Section
124 does not provide for stay of a suit filed for passing off under Section
134(1)(c) of the Act.
12.
Perusal of the plaint in the above suit discloses that the suit is
primarily based on passing off action and the suit is not for infringement of
the trade mark. In paragraph 19 of the plaint, the plaintiff has specifically
averred that he has made out a strong case based on passing off action. It is,
therefore, clear that the suit is based on passing off action and as such suit
has been filed under clause (c) of sub section 1 of Section 134 of the Act. Obviously,
therefore, Section 124 of the Act which is applicable only in a suit
filed for infringement of trade mark is not attracted. The learned counsel for
the respondent fairly submitted that there is no other provisions in the Act
permitting stay of the suit.”
(Emphasis given)
17. In ‘M/s.Sarvpriya Tubes Pvt. Ltd. & Anr. vs. M/s.
Madhav Udyog Pvt. Ltd. & Anr.’, in CR.No.6058/2015 decided on
12.04.2016,
taking into consideration ‘Nippon Soda
Co.Ltd.’ (supra),
‘Shakti Traders’ (supra), ‘Umesh Kumar Gupta vs. Shree Girraj Food
CS(COMM)
109/2018 Page 12 of 15
Products’, 2013 AIR (Allahabad) 81, High Court of Punjab &
Haryana
observed :
“4. The contention is that in an
action for passing off the issue of mere rectification of register cannot serve
the purpose and the extent of evidence and the proposition to be advanced would
be different. The learned counsel would refer me to a decision of the Bombay
High Court (Nagpur Bench) in ‘M/s.Shakti Traders vs. M/s.Shakti Press Ltd.’, 2008
(5) ALL MR 699. The Bombay High Court had held that Section 124 of the Act
relating to stay of proceedings would apply only in a suit for infringement of
trade mark but if the suit is primarily based as passing off action under
Section 134(1)(c) the Act, the provision of Section 124 would not be attracted
at all. Similar view was also expressed by the Allahabad High Court in ‘Umesh
Kumar Gupta and another vs. M/s.Shree Girraj Food Products’, 2013 AIR
(Allahabad) 81.
5.
I find the distinction made out by the plaintiff is tenable and I am in
respectful agreement with the views expressed by the Bombay High Court and the
Allahabad High Court. The decision cited of the Delhi High Court has no bearing
to a situation that obtains in this case and also does not address a situation
of a suit complaining of passing off action. The order passed by the court
below is correct and would require no intervention.”
18. Learned
counsel for the defendant heavily placed reliance
upon ‘Nippon Soda Co.Ltd.’ (supra) to buttress
the arguments that
Section
124 of the Act is applicable to the suit for ‘passing off’ the
goods as
well. In the said judgment delivered on 28.02.2014 the Co-
CS(COMM)
109/2018 Page 13 of 15
ordinate Bench of this Court itself observed in
para 18 “As far as the stay of the suit /counter claim in so far as for the
relief against passing off is concerned, there is no manner of doubt that
Section 124 can have no application thereto…..”. The said Bench, however,
agreed with the view taken in CS(OS) 1172/2008 titled ‘Mount Everest Mineral Water Ltd. vs. Kadir Khan’ that the suit for the same relief on the ground of infringement as well as passing off cannot be split
up and cannot be decided at different points of time. Apparently, the
applicability of Section 124 of the Act was not at issue in the said
proceedings.
19. Reliance was further placed on the Abbott Healthcare Pvt. Ltd. vs.
Raj Kumar Prasad and Ors. in CS(OS) 3534/2012 decided on 03.01.2018 by the said
Bench. Defendant’s counsel urged that in the said judgment the Co-ordinate
Bench had considered the judgment in ‘Puma
Stationer P.Ltd.’ (supra) and was of the view that the said judgment had
not adjudicated the issue, it did not constitute a precedent or to have decided
contrary to Mount Everest Mineral Water case (supra). This Court finds no
substance in the arguments of the learned counsel for the defendant as Section
124 of the Act is crystal clear and the words ‘passing off’ do not find mention
therein. The Division Bench in ‘Puma
Stationer P.Ltd.’ (supra) was very much oblivious of the relief claimed in
the said suit and was of the view that Section 124 did not have any application
to the suits for ‘passing off’. The Co-ordinate Bench of this Court in ‘Micolube India Ltd. vs. Maggon Auto Centre & Anr.’(supra)
categorically discussed the said
CS(COMM)
109/2018 Page 14 of 15
aspect and was of the view that the proceedings for
‘passing off’ would continue.
20. This Court finds no valid reasons to take
different view than the one taken by the Division Bench of this Court in ‘Puma Stationer
P.Ltd.’ (supra) and ‘Micolube India Ltd.’(supra). Having recourse to Section 151 CPC to stay the
proceedings in a suit for ‘passing off’, as urged by the learned counsel for
the defendant, is uncalled for as Section 124 is very specific and makes it
clear that it is applicable only to suits for infringement.
21. In view of the above circumstances, the instant
application is partly allowed. So far as the suit for infringement of Trademark
it is stayed till the final decision of the pending rectification; the suit
filed by the plaintiff for ‘passing off’, however, shall continue and is to be
decided on its own merit.
CS(COMM) 109/2018
22. In view of recent judgment ‘Patel Field Marshal’ (supra), the
defendant will be at liberty to urge the framing of additional issue regarding
the invalidity of the registration mark before Roster Bench as per law.
23. List
before Roster Bench on 10th July, 2018.
(S.P.GARG)
JUDGE
MAY 29, 2018 / tr
CS(COMM)
109/2018 Page 15 of 15
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