Rasiklal Manickchand Dhariwal and Anr. Vs. M.S.S. Food Products: Big Fish Can not be permitted to swallow small fish
Case Title: Rasiklal Manickchand Dhariwal and Anr. Vs. M.S.S. Food Products
Date of Order: 25.11.2011
Case No.: Civil Appeal No. 10112 of 2011 (Arising out of SLP (Civil) No. 27180 of 2008)
Neutral Citation: MANU/SC/1408/2011
Court: Supreme Court of India
Judges:Hon'ble Justice Aftab Alam and Justice R.M. Lodha
Introduction:This case pertains to intellectual property rights, specifically concerning the alleged passing off of a trademark. The dispute arose between Rasiklal Manickchand Dhariwal and Anr. (appellants) and M.S.S. Food Products (respondent). The fundamental question in the case was whether the appellants' use of the trademark "Manikchand" amounted to passing off against the respondent's trademark "Malikchand."
Factual Background:The respondent, M.S.S. Food Products, claimed prior use of the trademark "Malikchand" since 1959-60 for selling supari, ayurvedic pan masala, and related products. The ownership of this trademark passed through multiple assignments, eventually being acquired by M.S.S. Food Products in 1996. The appellants, who were using the trade name "Manikchand" for gutka and pan masala, were accused of misleading consumers due to the phonetic similarity of their brand name with "Malikchand." The respondent alleged that this similarity caused confusion in the market, leading to the loss of goodwill and sales. The appellants, on the other hand, contended that they had legally registered "Manikchand" since 1966 and had been running their business under this name for decades.
Procedural Background:The respondent filed a suit before the 1st Additional District Judge, Mandaleshwar (West), Madhya Pradesh, seeking a permanent injunction and damages. The trial court granted an ex parte interim injunction, which was subsequently challenged by the appellants but upheld by the Madhya Pradesh High Court. The trial court framed issues related to trademark infringement, passing off, and jurisdictional aspects. The appellants filed multiple interlocutory applications, including those for rejection of the plaint, discovery and production of documents, and summoning of witnesses. However, these applications were dismissed. The trial court, after repeated non-appearances of the appellants, proceeded ex parte and ruled in favor of the respondent, issuing a permanent injunction and awarding damages. The Madhya Pradesh High Court upheld this decision, reducing the compensation to Rs. 11,00,000. The appellants then filed a Special Leave Petition (SLP) before the Supreme Court.
Issues Involved:
Whether the trial court erred in proceeding ex parte against the appellants and restraining them from using the mark "Manikchand?Whether the appellants' procedural rights were violated due to irregularities in the trial process?Whether the phonetic similarity between "Malikchand" and "Manikchand" constituted passing off?Whether the successor judge had the authority to pronounce the judgment when the predecessor had reserved it?
Submissions of Parties:The appellants argued that they had been using "Manikchand" since 1966 and had obtained legal trademark registration. They contended that the respondent fabricated evidence to support its claim of prior use. They also claimed that the trial court's decision to proceed ex parte was unjustified and that the successor judge lacked the authority to deliver the final judgment. The respondent countered that the appellants deliberately delayed the trial and failed to present their case effectively. They maintained that the phonetic similarity between the trademarks caused consumer confusion and warranted an injunction.
Discussion on Documents Submitted by Parties:The Supreme Court examined the documentary evidence submitted by both parties to assess the credibility of their claims. The respondent submitted:Assignment Deeds and Trademark Registration Certificates – The respondent provided evidence of a continuous chain of ownership through assignment deeds dating back to 1959-60.Sales Invoices and Business Records – Documents showing long-standing commercial use of the "Malikchand" trademark in the sale of pan masala and supari.Advertising Materials – The respondent presented print and media advertisements demonstrating market presence and consumer recognition of "Malikchand."The appellants challenged the authenticity of these documents, arguing that they were fabricated and that no credible historical use of "Malikchand" could be established. The appellants submitted:Their Own Trademark Registration Documents – Claiming that "Manikchand" had been in use since 1966.Business Correspondence and Invoices – Attempting to prove their long-standing presence in the market under the "Manikchand" name.Market Survey Reports – Alleging that the brand "Malikchand" did not have significant consumer recognition.
The Court scrutinized these documents and found the respondent’s evidence to be more reliable, particularly due to the continuous assignments and substantial sales records. The Court noted discrepancies in the appellants’ claims, particularly regarding the actual use of "Manikchand" prior to 1996. The Court also observed that the appellants’ attempt to discredit the respondent’s documentation lacked substantive proof.
Discussion on Judgments Cited:The case relied on various precedents, including:Gullapalli Nageswara Rao v. Andhra Pradesh State Road Transport Corporation (1959 Supp 1 SCR 319) – The appellants cited this case to argue that a judge who hears must decide. The Supreme Court distinguished this precedent, holding that procedural rules permitted the successor judge to deliver the judgment.Arjun Singh v. Mohindra Kumar (1964 5 SCR 946) – Cited by the respondents to support the argument that a case reserved for judgment could be decided by a successor judge.Ameer Trading Corp. Ltd. v. Shapoorji Data Processing Ltd. (2004 1 SCC 702) – Referred to clarify the procedure for admitting documentary evidence.F.D.C. Limited v. Federation of Medical Representatives Association India (AIR 2003 Bom 371) – Discussed the admissibility of affidavit-based evidence.Sahara India v. M.C. Aggarwal HUF (2007 11 SCC 800) – Used by the appellants to argue that procedural irregularities warranted remand, which was rejected by the Supreme Court.
Reasoning and Analysis by the Supreme Court:Big Fish Cannot Be Allowed to Swallow Small Fish:A critical observation made by the Supreme Court in this case was the principle that a dominant market player cannot be permitted to use its financial and market strength to suppress smaller businesses. The court emphasized that intellectual property laws are designed to protect both established and emerging businesses, ensuring a level playing field. The respondent, a relatively smaller entity, had built goodwill over decades under the trademark "Malikchand." Allowing the appellants, a large and well-known business, to continue using "Manikchand" would have caused undue harm and diluted the respondent’s brand identity. The court highlighted that market dominance should not translate into an unchecked ability to usurp another’s brand equity, particularly when consumer confusion is evident. This judgment reinforces the legal principle that trademark laws aim to prevent unfair competition and monopolization by powerful market entities at the expense of smaller competitors.
The Supreme Court held that the appellants had multiple opportunities to present their case but failed to utilize them effectively. Order XVIII Rule 2 of CPC provides parties the option to argue their case, but failure to do so results in forfeiture of that right. The successor judge was authorized under Order XVIII Rule 15 of CPC to deliver the judgment based on the record. The appellants engaged in delaying tactics, leading to the closure of their right to cross-examine witnesses and present oral arguments. The phonetic similarity between "Malikchand" and "Manikchand" was found to be misleading to consumers, justifying the injunction.
Final Decision:The Supreme Court dismissed the appeal, upholding the Madhya Pradesh High Court’s ruling, including the permanent injunction and reduced compensation of Rs. 11,00,000.
Law Settled in This Case:A successor judge can pronounce judgment based on the record if the predecessor had completed hearings (Order XVIII Rule 15 CPC).Failure to cross-examine witnesses and present arguments can lead to forfeiture of procedural rights (Order XVIII Rule 2 CPC).Phonetic similarity in trademarks can constitute passing off.A trial court has discretion to proceed ex parte if a party deliberately avoids participation.Procedural delays cannot be used as a defense to challenge a judgment if they are caused by the party raising the challenge.
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
