Comment: I have reproduced the few relevant portion of the judgment, in
which case laws has been referred/settled by the Hon’ble Supreme Court of
India.
1. This
Judgment has been pronounced by Hon’ble Judge Shri M Venkatachaliah, N O Verma,
popularly known as WANDER-ANTOX Judgment.
2. The
object of the interlocutory injunction, it is stated 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". The interlocutory remedy is
intended to preserve in status quo, the rights of parties which may appear on a
prima facie. (Para 5).
3. 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. (Para 5).
4. The appeals before the
Division Bench were against the exercise of discretion by the Single Judge. In
such appeals, the Appellate Court will not interfere with the exercise of
discretion of the court of first instance and substitute its own discretion
except where the discretion has been shown to have been exercised arbitrarily,
or capriciously or perversely or where the court had ignored the settled
principles of law regulating grant or refusal of interlocutory injunctions.
(Para 9).
Wander Ltd. And Anr. vs Antox India P. Ltd. on 26
April, 1990, reported as 1990 (2) ARBLR 399 SC, 1990 Supp (1) SCC 727 The
contents of the judgment has been reproduced as herein below:
ORDER
1.
Appellants in these appeals by Special Leave, are the Defendants in Civil Suit
No. 1220 of 1988 on the original side of the High Court of Madras and assail
the order dated 19-1-1990 of the Division Bench of the High Court granting in
appeal and in reversal of the order dated 2-3-1989 of the learned single Judge
trying the suit an injunction restraining appellants from passing-off their
medicinal product Cal-De-Ce as that of the Respondent-Plaintiff, Respondent
claimed to have acquired a right in that Trade-mark by continuous user. The
temporary injunction was refused by the learned Single-Judge. But in appeals,
O.S.A. Nos. 111 and 112 of 1989, preferred against the refusal, the division
bench granted the temporary injunction in appeal,
2.
The appeals have come up for orders on the prayer for stay. As the
considerations relevant for decision on the prayer for stay, by and large,
conclude the subject-matter of the main appeals, we proceed to dispose of the
main appeals themselves.
We
have heard Sri F.S. Nariman, learned Senior Counsel for the appellants and Sri
U.N.R. Rao, learned Senior Counsel for the respondents. We have been taken
through the orders of the learned trial-Judge and of the Division Bench in
appeal.
3.
Wander Ltd., first appellant, claiming to be registered proprietor of the
Registered Trade-mark Cal-De-Ce entered into an agreement dated 28-3-1986 with
Antox India (P) Ltd. (Antox), the respondent, under which Antox agreed to
manufacture vitaminsed Calcium Gluconate Tablets under the said registered
Trade-Mark Cal-De-Ce and sell the entire production to the Wander Ltd. It would
appear that pursuant to and in implementation of these arrangements Antox
applied for the requisite manufacturing-license from the Drug Controller under
the Drugs and Cosmetics Act, 1940, in the course of the processing of which
Wander Ltd. furnished before the Drug Controller an undertaking that Wander
Ltd., would not authorize the use of its Trade-Mark Cal-De-Ce by any other
company and further not to manufacture Cal-De-Ce with effect from 1st July,
1986, either by itself or under sole licenses from it. The Drug Controller
issued the manufacturing licence to Antox.
The
working of the agreement dated 28-3-198.6 between the parties, however, appears
to have run into serious troubles. It is not necessary to advert to the rival
contentions of the parties on the merits of this controversy as they may have
to be gone into by the High Court in the pending suit. The disputes culminated
in Wander Ltd., purporting to rescind the agreement by its notice dated 30th
November, 1988 and calling upon Antox to stop manufacture of Cal-De-Ce under
the Trade-mark. It would also appear that Wander Ltd., entered into a separate
manufacturing arrangement with Alfred Berg & Co. (I) Pvt. Ltd., the second
appellant, at Madras, under licenses issued to the second appellant by the
authority administering the Drug and Cosmetics Act, 1940 in that State.
It
is at this stage that the Antox came forward with the present suit and sought
temporary injunction.
4.
The case of Antox is that its agreement dated 28-2-1986 with Wander Ltd., was
itself void in that its object was one forbidden by law ; that it would, if
permitted defeat and violate several statutory provisions and prohibitions,
that the agreement thus, out of way, the undertaking furnished on 21st June
1986 by Wander Ltd., to the Drug Controller in Karnataka, had the effect, in
law, of and amounted to an abandonment by Wander Ltd., of its proprietorship of
the Registered Trade-Mark Cal-De-Ce and all of such exclusive rights as Wander
Ltd., had or may have had in respect of that Trade-Mark and that the subsequent
continued user of the said Trade-Mark by Antox under the Drug Controller's
licence amounted to an independent user of the Trade-Mark by Antox in its own
right as, indeed, according to Antox, the said Trade-Mark after its abandonment
by Wander Ltd., came to be in an ascent unwonted condition eligible to be
picked up and used by any body. It was said that the user of the Trade-Mark by
Antox after 21st of June 1986 amounted to such an independent user on the
strength of which Antox claimed that it was entitled to maintain a passing off
action even against Wander Ltd. The mere earlier registration of the Trade-Mark
by Wander Ltd., it is urged, is no evidence of earlier user and with the
abandonment of the Trade-Mark by Wander Ltd. Antox is entitled on the strength
of its continuous user, to restrain Wander Ltd. from manufacture.
The
point for consideration is whether there is a prima facie case on which Antox
could be held entitled to restrain Wander Ltd. and Alfred Berg from
manufacturing and marketing goods under the Trade name Cal-De-Ce and whether on
considerations of balance of convenience and comparative hardship a temporary
injunction should issue. The corollary is that even if the injunction sought by
Antox is refused, that does not, ipso-facto, entitled Wander Ltd. and Alfred
Berg to manufacture and market the goods if they are not otherwise entitled to
do so under the relevant laws regulating the matter.
5.
Usually, the prayer for grant of an interlocutory injunction is at a stage when
the existence of the legal right asserted by the plaintiff and its alleged
violation are both contested and uncertain and remain uncertain till they are
established at the trial on evidence. The court, at this stage, acts on certain
well settled principles of administration of this form of interlocutory remedy
which is both temporary and discretionary. The object of the interlocutory injunction,
it is stated 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". The interlocutory
remedy is intended to preserve in status quo, the rights of parties which may
appear on a prima facie. 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.
6.
In the present case, the learned single Judge held that, at all events as
between Antox and Wander Ltd. even to the extent considerations relevant for a
passing-off action go, the latter was undisputably the earlier user of the
Trade-Mark in that Wander Ltd. was manufacturing and marketing the Calcium
Glouconate Vitamin Tablets under the Trade-Mark Cal-De-Ce at its own factory in
Bombay from August 1983 upto June 1986. If this is correct, Antox's user cannot
be held to be prior user. It is pertinent to note, and perhaps emphasise, that
the appellate bench did not disturb this finding at all. Learned Single Judge
was persuaded to the view that, in any event so far as the prima facie position
as to the test of earlier user is concerned Antox could not be held entitled to
interlocutory order in its favour on the basis of the earlier user claimed by
it. The interlocutory relief was accordingly refused against both Wander and
Alfered Berg.
7.
Aggrieved by this order of the Trial Judge declining the interlocutory
injunction Antox preferred O.S.A. Nos. 111-112 of 1989 before the Division
Bench. The Division Bench, however, re-assessed the material considered by the
single Judge and came to a different conclusion. The Division Bench held :
The
plaintiffs had licenses to manufacture for sale with the trade names and had
indeed sold the manufactured stock in bulk to the defendants Its user of the
trade marks pursuant to the licence obtained, was nut the user of the
registered user under Sections 48 and 49 of the Trade and Merchandise Marks
Act, not was its manufacture carried out in pursuance of any loan licence taken
out by the defendant under rule 69-A of the Drugs and Cosmetics Rules.
The
plaintiffs manufacture with the trade names, under licenses in the trade names
and the consequent user of the trade names establish a prima facie case for
passing off action and the balance of convenience, requiring and the status quo
to be maintained, the plaintiff having had the benefit of the injunction from
23-9-1988 till 2-3-1989 when it was vacated and from 2-5-1989 when this Court
granted the injunction, the plaintiff would be entitled to have the interim
injunction as prayed for by them.
Appellants-Defendants
have come up in appeal here.
8.
On a consideration of the matter, we are afraid, the Appellate Bench fell into
error on own important propositions. The first is a misdirection in regard to
the very scope and nature of the appeals before it and the limitations on the
powers of the Appellate Court to substitute its own discretion in an appeal
preferred against a discretionary order. The second pertains to the infirmities
in the ratiocinations as to the quality of Antox's alleged user of the
Trade-Mark on which the passing-off action is founded. We shall deal with these
two separately.
9.
The appeals before the Division Bench were against the exercise of
discretion by the Single Judge. In such appeals, the Appellate Court will not
interfere with the exercise of discretion of the court of first instance and
substitute its own discretion except where the discretion has been shown to
have been exercised arbitrarily, or capriciously or perversely or where the
court had ignored the settled principles of law regulating grant or refusal of
interlocutory injunctions. An appeal against exercise of discretion is said
to be an appeal on principle. Appellate Court will not reassess the material
and seek to reach a conclusion different from the one reached by the court
below if the one reached by the court was reasonably possible on the material.
The appellate court would normally not be justified in interfering with the
exercise of discretion under appeal solely on the ground that if it had
considered the matter at the trial stage it would have come to a contrary
conclusion. If the discretion has been exercised by the Trial Court reasonably
and in a judicial manner the fact that the appellate court would have taken a
different view may not justify interference with the trial court's exercise of discretion.
After referring to these principles Gajendragadkar, J. in Printers (Mysore) Private Ltd. v.
Pothan Joseph :
...
These principles are well established, but as has been observed by Viscount
Simon in Charles Osention & Co. v. Johnston the law as to the reversal by a
court of appeal of an order made by a judge below in the exercise of his
discretion is well established, and any difficulty that arises is due only to
the application of well settled principles in an individual case.
The
appellate judgment does not seem to defer to this principle.
10.
We may now examine the tenability of the grounds on which a Division Bench
reversed the single Judge's refusal. The passing-off action was based on the
asserted right to a trade mark said to have been acquired by continuous user.
According to the appellate-bench the user by Antox pursuant to the
Drug-Controller's licence and after the under taking given by Wander Ltd.
"was not registered user under Sections 48 and 49 of the Trade and
Merchandise Marks Act nor was it a manufacture carried out in pursuance of a
loan because......" In-passing-off action this would be relevant only in a
negative way. Positively, the plaintiff must establish a prior user of his own
prima facie. Antox's case appears silent on this requirement in the context of
a specific finding of the single judge as to user by Wander Ltd. prior to June,
1986. Antox's user is admittedly after June, 1986.
An
infringement action is available where there is violation of specific
property-right acquired under and recognised by the statute. In a passing-of
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 lends to or
is intended or calculated to lead to deception. Passing-off is said to be a
species of unfair trade 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 as an action for deceit. The tort of
passing-off involves a misrepresentation made by a trade to his prospective
customers calculated to injure, as a reasonably foreseeable consequence, the
business or goodwill of another which actually or probably, causes damage to
the business or goodwill of the other trader. Speaking of the legal
classification of this form of action, Lord Diplock said :
Unfair
trading as a wrong actionable at the suit of other traders who thereby suffer
loss of business or goodwill may take a variety of forms to some of which
separate lables have become attached in English law. Conspiracy to injure a
person in his trade or business is one, slander of goods another but most
protean is that which is generally and nowadays, perhaps misleadingly,
described as "passing off". The form that unfair trading takes will
alter with the ways in which trade is carried on and business reputation and
goodwill acquired. Emerson's maker of the better mousetrap if secluded in his
house built in the woods would today be unlikely to find a path beaten to his
door in the absence of a costly advertising campaign to acquaint the public
with the excellence of his wares" See Erven Warnink B.V. v. J. Towhand
& Sons (Hull) Ltd. 1979 All E.R. 731.
11.
Antox says that it is free from the inhibitions of the terms of the agreement
dated 28th March 1986 on the ground that agreement is itself void for all
purposes and, therefore, do not attach to or diminish the quality of its user,
though commenced under that agreement. Antox says its user is referable to the
Drug Controller's licence. But even assuming that the terms of the agreement
dated 28th March 1986 are not to be put into the scales to determine the title
to and character of the user by Antox, two crucial positions still stage Antox
in the face.
The
first is that the Drug Controller's licence claimed by Antox as the source of
its right to the user of the trade-mark, itself expressly stipulates that the
goods to be manufactured pursuant to the said licence shall be goods under the
registered Trade-mark, of Wander Ltd. The effect of this on the quality of the
user has not been examined by the Appellate-Bench.
Secondly,
even if a prior registration of a Trade mark is not necessarily evidence of
prior user as contended by Sri Raa, Antox cannot, prima facie, explain how in a
passing-off action its user subsequent to June 1986 would prevail over the
prima facie finding that Wander Ltd. was manufacturing Calcium Gluconate
Tablets under the trade-mark Cal-De-Ce at its own factory in Bombay from August
1983 to June 1986. The Appellate Bench does not dislodge this finding nor does
it recognise the crucial effect of prior use by the defendant on the
plaintiff's case in a passing-off action. It appears to us that it was not an
appropriate case where the appellate Bench could have interfered with the
discretion exercised by the learned Single, Judge.
12.
We, accordingly, allow these appeals, set aside order dated 19-1-1990 of the
Division Bench in so far as it pertains to Civil Suit of 1220/ 1988 and restore
the order dated 2-3-1989 made by the learned Single Judge on Applications 4941
and 4942 of 1988. Since we are examining the matter at an interlocutory stage,
none of the observations contained in this order shall affect the final
decision of the suit on the merits after evidence.
13.
The order of the appellate Bench is common to the present suit as well as
certain other proceedings between Antox on the one hand and certain other
parties on the other. This judgment and the observations therein are confined
to the facts of Civil Suit No. 1220/1988. The correctness of the Appellate
Order in respect of other cases is not the subject-matter of these appeals and
that, therefore, whatever we have said shall not prejudice the parties in those
other proceedings.
Having
regard to the nature of the controversy, it will be appropriate for the High
Court to dispose of the Suit expeditiously and we request the High Court to
dispose of the Suit within six months from today.
In
the circumstances of this case, there will be no orders as to costs in the
appeals.
Antox
(India) Pvt. Ltd. v. Wander Ltd.
1.
We have heard Sri U.N.R. Rao, learned Senior Counsel for the appellant and Sri
F.S. Nariman, learned Senior Counsel for the respondent.
Special
leave granted.
2.
The grievance of the appellant is that its appeal before the Learned
Single-Judge of the High Court preferred against an interlocutory order
granting an injunction in a suit pending on the file of the District Court
Baroda was disposed of without giving opportunity to the learned Counsel for
the appellant to argue the matter.
3.
The matter admits of being disposed of on the basis of Sri Nariman's suggestion
which we consider a fair and generous one. Sri Nariman for the respondent
fairly consents to an order-and we accordingly make that order-setting aside
the order under appeal and remitting the matter to the High Court for
consideration afresh of the appeal for admission after affording another
opportunity to the appellant of being heard. The matter is disposed of
accordingly. No costs.
