EVEREADY INDUSTRIES INDIA LTD VS MR. SANAJAY CHADHA & ANR

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*                    IN THE HIGH COURT OF DELHI AT NEW DELHI

+                   CS(OS) 1422/2009

EVEREADY INDUSTRIES INDIA LTD.                                  ..... Plaintiff

Through:       Mr. Ajay Sahni, Advocate with Mr.

Ankur Sangal, Advocate and Ms.

Sucheta Roy, Advocate.

Versus

MR. SANAJAY CHADHA & ANR                                                 ..... Defendants

Through:       Mr. S.K. Bansal, Advocate with Mr.

Ajay Amitabh Suman, Advocate and

Mr. Amit Chanchal Jha, Advocate,

Mr. Rahul Sharma, Advocate and Mr.

Vinay Shukla, Advocate.

CORAM:

HON'BLE MR. JUSTICE VALMIKI J. MEHTA

O R D E R

%                                         26.04.2016

I.A. No.3478/2016 (under Order 39 Rule 2A CPC by plaintiff)

1.                           By this application under Order 39 Rule 2A of the Code of

Civil Procedure, 1908 (CPC), plaintiff pleads violation of injunction order

passed by this Court on 21.12.2010 by the defendants. It is the case argued

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before this Court in support of the application under Order 39 Rule 2A CPC

that defendants are violating the injunction order on account of using the

EVEREADY  device i.e  the stylization and  font  of the depiction of the

wordmark EVEREADY.

2.                           In order to understand as to what is the scope of the injunction

order granted in favour of the plaintiff and only whose violation will result

in a cause of action arising under Order 39 Rule 2A CPC, let me reproduce

the operative portion of the order dated 21.12.2010 whereby the plaintiffs’

injunction  application  was  allowed  to  an  extent  and  disposed  of.        The

relevant portion of the order dated 21.12.2010 reads as under:-

“In view of the facts and circumstances discussed above, I am of the considered view that the plaintiff is not entitled to grant of ad interim injunction against use of the word mark EVEREADY by the defendants in respect of the screw drivers and pliers.

Admittedly, the defendants have already been restrained by IPAB from using EVEREADY (device). Hence, there is no need for the Court to injunct against use of this device by the defendants. The defendants, however, will not use the word trademark ‘EVEREADY’ except in respect of the screw drivers and pliers. If, however, the registration in favour of the defendant is cancelled, they will forthwith stop the use of the word mark ‘EVEREADY’ even in respect of screw drivers and pliers. The interim order passed by this Court on August 24, 2009 stands modified accordingly. The observation made in this order being tentative and having been necessitated for the purpose of taking a prima facie view, will not

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affect the decision of the suit in any manner. The applications stand disposed of.

The parties are directed to appear before the Joint Registrar for admission/denial of documents on 14^th February, 2011. The matter be listed for framed of issues on 04^th April, 2011.” (underlining added)

3. It is trite that an issue of contempt or violation of the injunction order by invoking Order 39 Rule 2A CPC has to be understood in terms of clear cut directions which are issued by the court. Since contempt is a very serious matter, it is the exact violation of the injunction order which will result in contempt by the guilty party. The operative portion of the order dated 21.12.2010 has been reproduced above, and let us examine the same as to whether the defendants are violating the same by using the wordmark EVEREADY in the form of a device and by stylization and font of EVEREADY as is done by the plaintiff.

4. I am afraid the application of the plaintiff is misconceived inasmuch as the operative portion of the order dated 21.12.2010 reproduced above in fact states that there was no need for the Court to grant injunction against the use of the device by the defendants. This was said by the learned Single Judge because there was already a restraint order against the

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defendants by IPAB from using the device EVEREADY i.e the particular stylization and font of the wordmark EVEREADY. Therefore, once this Court has specifically observed that there is no need for granting injunction with respect to the EVEREADY device i.e stylization and font of the wordmark EVEREADY, there is no injunction granted to result in violation of any injunction order passed by the Court.

5. I must note that I put it repeatedly to the counsel for the plaintiff that possibly the remedy of the plaintiff is to file independent contempt proceedings on account of violation of the injunction order issued by the IPAB, but, the counsel for the plaintiff insists that this Court should hear and dispose of the present application.

6. In view of the above since there is no injunction order granted by this Court against use of the EVEREADY device by the defendants, there is no violation of any injunction order passed by this Court for the plaintiff to invoke Order 39 Rule 2A CPC.

Application is therefore dismissed.

+ CS(OS) No.1422/2009

7.                           As recorded in the order dated 15.3.2016 and which is also the

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stand of the plaintiff today that evidence in this case be recorded by a Local Commissioner whose expenses will be borne by the plaintiffs, accordingly, Sh.D.S. Bawa, ADJ (retd.) Mobile No.8860827313 is appointed as a Local Commissioner to record evidence in this case. Fees of the Local Commissioner are fixed at Rs.75,000/- plus all out of pocket expenses which shall be borne by the plaintiffs and which will cover 10 dates on which evidence is recorded. In case, there are more than 10 dates for recording of evidence, then, Local Commissioner will be paid a sum of Rs.5,500/- for each date for recording of evidence. Both the parties will not record evidence of more than three witnesses as is agreed to before this Court. Necessary space will be provided by the plaintiffs in the High Court premises so that judicial file does not go outside the High Court premises. Local Commissioner will keep in mind the ratio of the judgment of the Supreme Court in the case of Bipin Shantilal Panchal Vs. State of Gujarat and Anr. (2001) 3 SCC 1 for recording of evidence. Local Commissioner is requested to expedite the recording of evidence and make endeavours to complete the recording of evidence within a period of six months of the first date fixed for recording of evidence.

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8. Parties will file list of witnesses within six weeks from today. 9. List before the Local Commissioner for fixing dates of

evidence on 7^th July, 2016 at 4.00 P.M.

10.                        List before the Court for reporting recording of evidence on 24^th

November, 2016.

VALMIKI J. MEHTA, J

APRIL 26, 2016

Ne

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M/s KHUSHI RAM BEHARI LAL VS P.V KANAKARAJ TRADING AS KALPATHARU TRADING CO.

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*             IN THE HIGH COURT OF DELHI AT NEW DELHI

8.

+	CS (OS) 2605/2013
M/s KHUSHI RAM BEHARI LAL		..... Plaintiff
	Through:  Mr.  Ajay  Amitabh  Suman,  Mr.  Amit
	Chanchal Jha and Mr. Vinkay Kumar Shukla for
	Mr. S.K. Bansal, Advocates.
	versus
P.V KANAKARAJ  TRADING AS KALPATHARU
TRADING CO.		..... Defendant
	Through: Mr. Manish Gandhi, Advocate.
CORAM: JUSTICE S. MURALIDHAR
	O R D E R
%	16.09.2016

IA No. 5529/2014 (under Order VII Rule 11 CPC)

1.     This is an application under Order VII Rule 11 CPC filed by the Defendant seeking rejection of the plaint on the ground that the Plaintiff has sought to combine two causes of action i.e., one for passing off of the trademark and the other for infringement of copyright without there being necessary basic averments in the plaint as to how the causes of action for the said reliefs have arisen within the territorial jurisdiction of this Court.

2.     It is not in dispute that in the present suit the Plaintiff, having its registered office at 5190, Lahori Gate, Delhi–110006 and its corporate office at 81-B, Central Avenue, Sainik Farm, New Delhi-110062, is seeking two reliefs against the Defendant located in Karnataka. One is for a permanent

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injunction to restrain the Defendant from passing off its trademark with device of „Taj Mahal‟ used on the rice sold by it as that of the Plaintiff which uses a nearly similar mark on the Basmati rice sold by it in the domestic market and exported by it outside India. The other relief is for a permanent injunction to restrain the Defendant from infringing the Plaintiff's copyright in the said trade label with device.

3.   As far as the suit for infringement of the copyright is concerned, it is again not in dispute that by virtue of Section 62 (2) of the Copyright Act, 1957, the Plaintiff can institute the present suit in this Court notwithstanding that the Defendant has its office and is carrying on its business in Bangalore, Karnataka.

4.   The controversy then is as regards the relief of passing off. The case of the Plaintiff as spelt out in para 37 of the plaint reads as under:

“37. That this Hon‟ble Court has the territorial jurisdiction to try and adjudicate the present suit. The defendant is selling the impugned products under the impugned Trade Mark TAJ MAHAL WITH DEVICE OF TAJ MAHAL within the territorial jurisdiction of this Hon‟ble Court i.e. Lahori Gate, Alipur etc. and other part of Delhi. The Defendants impugned acts of infringement of copyright and passing off are taking place in Delhi i.e. within the jurisdiction of this Hon'ble High Court. The cause of action in whole and for in part has arisen within the jurisdiction of this Hon‟ble Court.

Besides this, the Plaintiff is having its Registered Office at 5190 Lahori Gate, Delhi-110006. The Plaintiff's corporate office is situated at 81-B, Central Avenue, Sainik Farm, New Delhi-110062 which is its nerve centre and from where the Plaintiff has been controlling each

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and every aspect of its said goods and business under their said Trade Mark/Label. The Plaintiff is also working for gain and carrying on its said goods and business within the territorial jurisdiction of this Hon'ble Court. This Hon'ble Court as such also has a jurisdiction to try and adjudicate the present suit by virtue of Section 62(2) of the Copyright Act 1957.”

5.    The    submission   of     Mr.    Manish   Gandhi,   learned    counsel    for    the

Defendant, based on the decisions in Dabur India Ltd. v. K. R. Industries AIR 2008 SC 3123, Dhodha House v. S.K. Maingi (2006) 9 SCC 41 and

Lakhan Pal Shyam Kumar v. Ram Prasad Gupta 190 (2012) DLT 659 is that the above averments are too general and vague and not sufficient to enable this Court to exercise jurisdiction as regards the relief of passing off. According to Mr. Gandhi, the Plaintiff ought to have given particulars of where it found the Defendant to be selling its products in Delhi. He submits that merely stating that the Defendant was selling the impugned products at Lahori Gate, Alipur and several parts of Delhi is insufficient.

6. On the other hand, Mr. Ajay Amitabh Suman, learned counsel for the Plaintiff, seeks to place reliance on a recent decision dated 3^rd August, 2016 of the Division Bench (DB) of this Court in FAO (OS) 145/2016 (M/s RSPL Limited v. Mukesh Sharma) where while setting aside the judgment dated 5^th April, 2016 of the learned Single Judge which had allowed the application of the Defendant in that matter under Order VII Rule 10 CPC on the ground that the averments in the plaint regarding the cause of action which had arisen within the jurisdiction of this Court were bereft of particulars, the DB relied on the decisions in Exphar SA v. Eupharma

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Laboratories Limited (2004) 3 SCC 688 and Om Prakash Srivastava v.

Union of India (2006) 6 SCC 207 held that the facts pleaded by the Plaintiff

must be taken to be true while considering the objection as to territorial

jurisdiction under Order VII Rule 10 CPC. Once there were averments to the

effect     that   the     Defendant    was    'conducting,   soliciting,    rendering    the

impugned  services  with  the  impugned  trade  name'  within  the  territorial

jurisdiction of the Court, “then it follows that this Court would have to

proceed with the trial of the suit and cannot return the plaint under Order VII

Rule 10 CPC.”

7.  This  Court  agrees  with  learned  counsel  for  the  Plaintiff that  for  the

purposes of the relief of passing off, the above averments in para 37 of the

plaint  that  the  Defendant  was  selling  the  impugned  products  under  the

impugned trademark was within the territorial jurisdiction of this Court have

to be taken to be correct. In Dhodha House (supra), the focus of the Court

was on the question whether the Plaintiff in that case carried on the business

in Delhi. In para 51 the Supreme Court observed:

"For our purpose, the question as to whether the Defendant had been selling its produce in Delhi or not is wholly irrelevant. It is possible that the goods manufactured by the plaintiff are available in the market of Delhi or they are sold in Delhi but that by itself would not mean that the plaintiff carries on any business in Delhi."

8. It was in that context that the Supreme Court observed that the mere fact

that  goods  may be  available  in  Delhi was  insufficient  to  infer  that  the

Plaintiff was carrying on business in Delhi. In the present case, however, the

specific averment is that the Defendant "is selling the impugned products

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under the impugned Trade Mark TAJ MAHAL WITH DEVICE OF TAJ MAHAL within the territorial jurisdiction of this Court." Consequently, the above decision is of no assistance to the Defendant.

9.    In Dabur India Ltd. v. K. R. Industries (supra), the facts were that a composite suit was filed for both infringement of copyright and for the relief of passing off of the trademark. The learned Single Judge held that as far as the passing off action was concerned, this Court did not have territorial jurisdiction as there was no documentary evidence to show that the Defendant, located in Andhra Pradesh, was selling goods in question in Delhi. This view concurred with by the DB and further by the Supreme Court. It is, however, not clear what the precise averments in the plaint were as they have not been set out in the judgment by the Supreme Court. The Supreme Court appears to have proceeded on the basis that the averments in the plaint were insufficient for the Court to come to a conclusion that the Defendant was selling its goods in Delhi. The above decision does not alter the settled legal position that for the purposes of Order VII Rule 10 CPC, the averments in the plaint will have to be taken to be correct.

10.  Likewise, in Lakhan Pal Shyam Kumar v. Ram Prasad Gupta (supra),

although the precise averments in the plaint in that case on the aspect have not been set out in the judgment itself, a careful reading reveals that the averments were indeed too general and insufficient to infer even prima facie that the Defendant was carrying on business within the territorial jurisdiction of the Court.

11. At the present stage, when the matter is yet to go to trial, the Court

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cannot insist that the full particulars of where precisely the Defendant was found selling its products in Delhi have to be set out in the plaint itself. That would be a matter for evidence. Consequently, this Court is unable to accept the plea of the Defendant that the averments in the plaint are insufficient for the Court to entertain the action of passing off of the trademark of the Plaintiff.

12. The application is accordingly dismissed.

I.A. No. 8938 of 2014

13.    This is an application under Order XXXIX Rule 4 CPC filed by the Defendant seeking to vacate the interim injunction against the Defendants restraining them from using the trademark and label „Taj Mahal‟ in respect of the rice being sold by the Defendant.

14.  The necessary facts to be noticed for the purposes of this application are that the Plaintiff has adopted the said mark in relation to Basmati Rice. The Plaintiff has been engaged in the business of processing and marketing of Basmati Rice including exports thereof. In the plaint, the Plaintiff has set out the total exports/sales figures since 1980-81 as well as the domestic sales figures. Inter alia it is averred that for the year 2008-09 the total exports/sales were Rs. 366. 23 crores and the domestic sales were Rs.275.21 crores. It is stated that the sales of Basmati Rice under the above trademark with label/device of „Taj Mahal‟ is approximately 10% of the abovementioned sales. The Plaintiff states that it filed an application for registration of the aforementioned mark with Taj Mahal label (Device of Taj

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Mahal) in Class 30 in relation to rice for exports on 27^th February, 1989 claiming user since 1^st January, 1978. However, this was opposed by M/s.

New Bharat Rice Mills („NBRM‟), one of the competitors of the Plaintiff, on the ground that it already held registrations in respect thereof. The Plaintiff then filed a civil suit before this Court for cancellation of registration granted in favour of NBRM in respect of the said mark and label. It is stated that the said suit is still pending adjudication. Meanwhile the appeal filed by NBRM against the rejection of its opposition was allowed by the Intellectual Property Appellate Board (IPAB). It is, however, pointed out by the Plaintiff that the said order of the IPAB has been stayed by this Court in a writ petition filed by the Plaintiff.

15. The Defendant contends that the Plaintiff has not yet succeeded in obtaining registration of the said mark/label and, therefore, does not have the locus standi to maintain the present suit and obtain an interim order against the Defendants in the action for passing off. Secondly, the Defendant refers to the fact that there are many other entities that hold registration in their favour for identical mark and label in different classes including Class 30 for rice in particular. Therefore, the Plaintiff cannot claim exclusivity for such mark and label. Thirdly, the Plaintiff itself limited its application for registration to exports of Basmati Rice. Therefore it cannot seek protection as regard its domestic sales of the product. The other plea is that of acquiescence. It is stated that the Defendant has been using the device Taj Mahal on the rice being sold by it since 1^st January, 2000 and has also filed an application for trademark registration on 15^th April, 2010. This was not objected to by the Plaintiff.

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16.  The above submissions have been considered. In the first place, it is trite that an action of passing off does not hinge upon the Plaintiff having a registration of the mark and/or label in its favour. Therefore, the fact that its application for registration has been opposed or not granted or that others may hold registration is of no consequence. In order to succeed in the action for passing off, the Plaintiff has to inter alia show that its mark and label enjoy a reputation and goodwill in relation to the goods in question and that the adoption of the same or similar said mark or label by the Defendant for the good in the same channel of trade is dishonest. The fact that the Plaintiff is a prior and continuous user of the mark/label in relation to the goods in question, which, in the present case, is rice, is certainly a relevant factor. This, the Plaintiff has certainly been able to demonstrate by setting out the figures of its sales both exports and domestic for several years since 1980-

81.             

17.  Second, the Plaintiff has to show that the adoption of the impugned mark by the Defendant is dishonest. The fact of the matter is that an essential

feature of the Plaintiff‟s marks i.e., the trademark „Taj Mahal‟ with the device of „Taj Mahal‟ has been in toto adopted by the Defendants and for the same basic product i.e. rice. In relation to such product the trade mark Taj Mahal with device can be said to be an arbitrary mark with a degree of distinctiveness that enables the consumer to associate the product with the producer of the product. In this context, prima facie the Plaintiff has been able to show that it is the prior and continuous user since 1978 and that the subsequent adoption of an identical mark and label by the Defendant, which

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admittedly commenced its business only in 2000, is dishonest.

18. Thirdly, the mark and label used by the Defendant i.e. Taj Mahal with the device for rice is prima facie bound to cause deception and confusion in the mind of the average purchaser of rice and is an attempt to exploit the reputation and goodwill attached to Plaintiff in the said mark and device for rice. It is in the same channel of trade. There is also no merit is the plea of acquiescence. The Plaintiff states it has filed an opposition to the Defendant's application for registration. As far as the plea that the Plaintiff‟s alleged use of the impugned trademark is confined to export of rice only, the averments in the plaint show that the Plaintiff has been selling rice in the domestic market under the trademark, label and device „Taj Mahal‟ since 1980-81.

19. Consequently, no grounds are made out by the Defendants for vacating the interim injunction granted by this Court by the order dated 19^th

December, 2013. This application under Order XXXIX Rule 4 CPC is accordingly dismissed.

IA No. 20906/2013 (under Order XXXIX Rules 1 and 2 CPC)

20. The interim injunction granted by this Court on 19^th December, 2013 is made absolute during the pendency of the suit. The application is disposed of.

CS (OS) No. 2605/2013

21. To be re-numbered as a commercial suit.

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22.       List before the Joint Registrar on 22^nd December, 2016 for admission/denial of documents.

23.  List before the Court on 6^th March, 2017 for framing of issues.

S. MURALIDHAR, J

SEPTEMBER 16, 2016

dn

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