Introduction: In the intricate world of intellectual property law, the case of Om Prakash Gupta v. Parveen Kumar and Anr., decided by the High Court of Delhi on May 19, 2000, emerges as a compelling narrative of trademark rights, misrepresentation, and the consequences of abandonment. This dispute revolves around the trademark "SURAJ CHHAP," a label tied to the tobacco trade, and pits Om Prakash Gupta, claiming registered proprietorship, against Parveen Kumar and another, who challenge the plaintiff’s assertions with a tale of prior use and alleged deceit. The High Court’s ruling not only vacates an interim injunction but dismisses the suit entirely, spotlighting the sanctity of judicial processes and the fragility of trademark rights in the face of non-use and fraud.
Detailed Factual Background: Om Prakash Gupta, the plaintiff, asserts ownership of the trademark "SURAJ CHHAP," registered under number 287631 on April 24, 1973, in Class 34 for scented chewing tobacco. Initially, Gupta operated as part of a partnership firm, M/s. Prakash Sugandh Bhandar, alongside Sumer Chand and Promod Kumar, starting in 1973. Over time, one partner retired, another passed away, and Gupta became the sole proprietor. He claims extensive use of "SURAJ CHHAP" across states like Delhi, Rajasthan, Uttar Pradesh, Gujarat, and Madhya Pradesh since 1973, building a robust reputation. Gupta also asserts copyright in the artistic design of his product labels and pouches, characterized by a distinctive trade dress and color scheme, and invokes common law rights against passing off due to long-term use. However, he admits to a period of non-use—without specifying its duration—before resuming business in 1999.
The defendants, Parveen Kumar and another, counter that they have been in the tobacco trade since 1956, initially using trademarks "PATANGA" and "HARIBIHARI." They claim to have adopted "SURAJ CHHAP" for unmanufactured raw tobacco in 1993 (later contested as 1995 due to excise licensing), with significant sales figures: ₹10,62,257.50 in 1993-94 escalating to ₹17,66,250 in 1998-99. They assert a copyright registration for "SUN BRAND" Hukka Tobacco since May 10, 1976, and argue that their pouches differ from Gupta’s. The defendants allege that Gupta’s tobacco business faltered by 1979, leading to abandonment of "SURAJ CHHAP," and that his 1999 resumption was a belated attempt to capitalize on their established market presence. They further contend that Gupta’s trademark registration carries a disclaimer excluding exclusive rights to "SURAJ" and the "Sun" device, a fact he allegedly concealed.
Detailed Procedural Background: Gupta filed Suit No. 1744/99 in the High Court of Delhi, seeking a permanent injunction against the defendants for trademark infringement, copyright infringement, and passing off, alongside ancillary reliefs. Concurrently, he moved I.A. No. 7665/99 under Order 39 Rules 1 and 2 of the Code of Civil Procedure, 1908 (CPC), for a temporary injunction. On August 12, 1999, the court granted an ex parte interim injunction, restraining the defendants from using "SURAJ CHHAP" or similar labels, based on Gupta’s claims of registered trademark rights, as recorded on August 10 and 12, 1999.
The defendants responded with I.A. No. 8739/99 under Order 39 Rule 4, CPC, seeking to vacate the injunction, alleging misrepresentation and prior use. They did not file a written statement but presented detailed facts in their application. Both parties submitted extensive documentation and written arguments, supplemented by lengthy oral submissions. Justice J.B. Goel adjudicated the applications together, delivering a comprehensive judgment on May 19, 2000, which not only addressed the injunction but also disposed of the suit itself.
Issues Involved in the Case: The case hinges on several key issues: whether Gupta’s suit for trademark infringement is maintainable given the disclaimer on "SURAJ" and the "Sun" device; whether his concealment of this disclaimer constitutes fraud sufficient to warrant dismissal; whether prolonged non-use of "SURAJ CHHAP" amounts to abandonment, extinguishing his rights; whether the defendants’ prior use since 1993 (or 1995) establishes superior rights; and whether Gupta’s passing off claim survives despite the disclaimer and non-use?
Detailed Submission of Parties: Gupta’s counsel argued that he is the registered proprietor of "SURAJ CHHAP" under registration No. 287631, renewed and valid as of 1994, entitling him to sue for infringement under Section 28 of the Trade and Merchandise Marks Act, 1958. He emphasized extensive use since 1973, claiming goodwill and reputation, and asserted copyright in his pouch designs. On non-use, he attributed the hiatus to a partner’s death, insisting it did not erode his rights, and cited precedents to argue that registration persists despite temporary disuse. For passing off, he contended that the disclaimer under Section 17’s proviso preserves common law remedies, unaffected by registration limitations.
The defendants’ counsel challenged Gupta’s claims, asserting that the registration certificate (No. 287631) includes a disclaimer excluding "SURAJ" and the "Sun" device, rendering his infringement claim baseless. They accused Gupta of suppressing this fact, obtaining the injunction fraudulently, and argued that such misrepresentation justifies dismissal. They claimed prior use of "SURAJ CHHAP" since 1993, supported by sales data, and argued that Gupta abandoned the mark by 1979, losing all rights after 20 years of non-use. They denied similarity in pouch designs and asserted their established market reputation, urging the court to vacate the injunction and dismiss the suit.
Detailed Discussion on Judgments Cited by Parties and Their Context:The parties and court relied on several precedents, each illuminating distinct facets of the dispute:
- Chandra Shashi v. Anil Kumar Verma, (1995) 1 SCC 421: Cited by the defendants and court, this Supreme Court case involved contempt proceedings against a respondent who fabricated a document in a matrimonial dispute. The court emphasized the need to punish fraud to preserve judicial integrity, sentencing the respondent to imprisonment. Justice Goel applied this to Gupta’s concealment, underscoring its severity as a fraud on the court.
- Indian Bank v. Satyam Fibres (India) Pvt. Ltd., (1996) 5 SCC 550: The defendants referenced this Supreme Court ruling, where a forged letter led to the recall of a National Consumer Disputes Redressal Commission judgment. The court affirmed inherent powers under Section 151, CPC, to set aside orders obtained by fraud. Justice Goel used this to justify vacating the injunction and dismissing the suit.
- S.P. Chengalvaraya Naidu (Dead) by LRs v. Jagannath (Dead) by LRs, (1994) 1 SCC 1: Another Supreme Court case cited by the defendants, it declared judgments obtained by fraud as nullities, stressing clean hands in litigation. The court linked non-disclosure of material documents to fraud, a principle Justice Goel applied to Gupta’s omission of the disclaimer certificate.
- Registrar of Trade Marks v. Ashok Chandra Rakhit, AIR 1955 SC 558: Both parties cited this Supreme Court decision, which explained disclaimers under the Trade Marks Act, 1940 (predecessor to Section 17 of the 1958 Act). It clarified that disclaimed elements lack statutory protection but retain common law rights. Gupta used it to support his passing off claim, while the court interpreted it to limit his infringement claim.
- Wander Ltd. v. Antox India P. Ltd., 1990 (Supp) SCC 727: The court referenced this Supreme Court case to distinguish infringement (statutory) from passing off (common law) remedies, noting Gupta’s infringement claim failed due to the disclaimer, though passing off remained theoretically viable.
- Polson Ltd. v. Polson Dairy Ltd., 1996 (16) PTC 709 (Delhi): Gupta relied on this Delhi High Court ruling, where non-use due to government policy did not constitute abandonment. The court distinguished it, finding Gupta’s non-use lacked such justification.
- Avis International Ltd. v. Avi Footwear Industries, AIR 1991 Del 22: Cited by Gupta, this Delhi High Court case placed the burden on defendants to prove non-use leading to abandonment, which they disputed. Justice Goel found sufficient evidence of Gupta’s non-use.
- Garden Perfume (P) Ltd. v. Anand Soaps and Detergents, : Gupta referenced this case to argue non-abandonment, but the court found it factually inapplicable due to Gupta’s unexplained hiatus.
- Godfrey Philips India Ltd. v. Girnar Food & Beverages Pvt. Ltd., : Cited by the court, this case likely elaborated on trademark use and recognition, supporting the defendants’ prior use claim.
- Ruston and Hornby Ltd. v. Zamindara Engineering Co., AIR 1970 SC 1649: Implicitly referenced via Polson, this Supreme Court case upheld registered trademark rights, but Justice Goel noted its irrelevance given the disclaimer.
Detailed Reasoning and Analysis of Judge: Justice J.B. Goel’s analysis is a dual-pronged examination of fraud and trademark rights. He first tackled Gupta’s misrepresentation, noting that the plaint and court submissions claimed "SURAJ CHHAP" as a registered trademark under No. 287631, yet the certificate—produced by both parties—revealed a disclaimer excluding "SURAJ" and the "Sun" device. Gupta’s failure to disclose this, coupled with reliance on a non-legal certificate, constituted a material suppression and misrepresentation. Drawing from Chandra Shashi, Indian Bank, and Chengalvaraya Naidu, the judge held that such fraud vitiates judicial proceedings, justifying not only the injunction’s recall but the suit’s dismissal under inherent powers (Section 151, CPC).
On trademark merits, Justice Goel interpreted Section 17, citing Ashok Chandra Rakhit, to confirm that disclaimed elements lack statutory protection under Section 28, restricting Gupta’s registered rights to "Zafrani Patti." The infringement claim thus collapsed. For passing off, the judge assessed non-use, finding Gupta’s business ceased in 1979, with a 20-year gap until 1999. His explanation—death of a partner in 1985—failed to account for prior cessation, and excise license lapses post-1982 reinforced abandonment. Contrasting cases like Polson (justified non-use) and Avis (disputed non-use), Goel inferred an intent to abandon from the prolonged, unexplained hiatus, per Narayana’s treatise on trademark law.The defendants’ use since 1993 (or 1995) predated Gupta’s 1999 resumption, establishing prior rights. Their pouch design, adopted earlier, negated copyright infringement claims. Balancing equities, the judge found no prima facie case, irreparable harm, or convenience favoring Gupta, especially given his deceitful conduct.
Final Decision: On May 19, 2000, the High Court allowed the defendants’ I.A. No. 8739/99, vacating the August 12, 1999, interim injunction, and dismissed Gupta’s I.A. No. 7665/99 and Suit No. 1744/99 with costs of ₹20,000, citing fraud and abandonment.
Law Settled in This Case: The judgment reinforces that concealment of material facts, such as a trademark disclaimer, constitutes fraud on the court, warranting dismissal under inherent powers. It clarifies that disclaimed elements of a registered trademark lack statutory protection under Section 28, limiting infringement claims, though passing off remains viable under Section 17’s proviso. Prolonged, unjustified non-use can infer abandonment, extinguishing common law rights, especially against prior users.
Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
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