Sri Laxmi Balaji Industries Vs. Lakshmi Venkateshwar Rice Industries
Facts of the Case:
Sri Laxmi Balaji Industries and Sri Laxmi Vinayaka Rice Industries, both registered partnership firms, were engaged in the rice manufacturing business. They applied for the registration of the trademark "Swamy Ayyappa Gold" and the image of Lord Ayyappa in 2010. Lakshmi Venkateshwar Rice Industries, the respondent, filed a suit (O.S. No. 3/2012) before the Principal District Judge at Ballari, seeking a permanent injunction to restrain the petitioners from using the "Swamy Ayyappa Gold" trademark. The Trial Court granted an interim injunction in favor of the respondent. The petitioners later filed a rectification application before the Registrar of Trademarks, Chennai, challenging the respondent’s trademark. Subsequently, they filed an application under Section 124 of the Trade Marks Act, 1999, seeking a stay of the civil suit proceedings until the rectification application was decided. The Trial Court dismissed the application, prompting the petitioners to file this writ petition before the Karnataka High Court.
Issues:
Whether the Trial Court erred in dismissing the application filed under Section 124 of the Trade Marks Act, 1999, and whether the civil suit should be stayed pending the rectification proceedings before the Registrar of Trademarks, Chennai.
Reasoning of the Court:
The Karnataka High Court analyzed Section 124 of the Trade Marks Act, which mandates the stay of proceedings when the validity of a trademark is challenged and rectification proceedings are pending. The Court referred to Patel Field Marshal Agencies v. P.M. Diesels Ltd. (2018) 2 SCC 112, which clarified that once an issue of invalidity is framed, the matter must be decided by the appropriate tribunal before the civil suit proceeds. The Court observed that the petitioners had challenged the validity of the respondent’s trademark in their written statement and had initiated rectification proceedings. The Trial Court's reasoning that rectification must be pending before filing the suit was incorrect, as Section 124 allows a stay even if rectification proceedings are initiated later. The Court concluded that the Trial Court failed to properly interpret Section 124 and had wrongly dismissed the petitioners’ application.
Decision:
The Karnataka High Court allowed the writ petition and quashed the Trial Court’s order dated March 30, 2013. The Court stayed all further proceedings in O.S. No. 3/2012 until the disposal of the rectification application before the Madras High Court. The petitioners were also directed to expedite the rectification proceedings since the suit had been pending for over a decade.
Law Point Settled:
Section 124 of the Trade Marks Act, 1999, mandates a stay of civil proceedings if a rectification application challenging the validity of a trademark is pending. The pendency of a rectification application is not a prerequisite at the time of filing the suit; it can be filed later, and the court must still consider granting a stay. Once an issue of invalidity is raised, the civil court must defer to the appropriate tribunal for adjudication before proceeding with the case. The Trial Court must examine the prima facie tenability of a challenge to a trademark’s validity before rejecting a stay application under Section 124.
Case Title: Sri Laxmi Balaji Industries vs. Lakshmi Venkateshwar Rice Industries
Date of Order: September 13, 2024
Case Number: WP No. 77807 of 2013
Neutral Citation: 2024:KHC-D:13121
Court: High Court of Karnataka, Dharwad Bench
Judge: Hon'ble Mr. Justice H.P. Sandesh
