1. The Chief Justice on 31.7.2014 was pleased to nominate me to hear this appeal.
2. The appeal arises out of judgment, order and decree dated 22.5.2012 passed in Original Suit No. 12 of 2001 Vishwadeepak Vs. Kishan Lal and another passed by the Additional District Judge, Court No. 2, Ghaziabad.
3. It is a decree of permanent injunction in respect of infringement of a trade mark and passing off.
4. The Court by the impugned judgment and order has decreed the suit of the plaintiff Vishwadeepak and has restrained the defendants Kishan Lal and Jugal Kishore, their servants, agents and representatives etc. from using the trade mark "New Mdhurima Confectioners" and "New Madhurima Bakers" and other identical or similar trade marks and from carrying business in bakery and other cognate and allied products with the above trade mark or deceptively similar name "Madhurima". Simultaneously, the counter claim of the defendant no. 2 Jugal Kishore has been dismissed.
5. The short story of the case is that Acharaj Lal, the father of the plaintiff who was the owner of shop no. A-7 Municipal Market, Jawahar Gate, Ghaziabad some time in the year 1964 started a confectionery business in the name of "Madhurima." He was blessed with the said name by his personal friend Kirhsna Mitra, a renowned poet. He permitted his brother defendant no. 2 to run the aforesaid business.
6. The plaintiff on attaining maturity in 1972 entered into partnership with defendant no. 1 on 1.4.1972 to run the above confectionery business from the said shop in the name of 'Madhurima'. The said partnership was dissolved w.e.f. 1.1.1981 vide dissolution deed dated 9.1.1981. The dissolution deed permitted the plaintiff alone to continue with the aforesaid business from the above shop and defendant no. 1 severed all his connections with the same.
7. The plaintiff instituted Original Suit No. 12 of 2001 against Kishan Lal and Jugal Kishore as defendant nos. 1 and 2 respectively for a decree of permanent injunction restraining them, their servants, agents, representatives dealers etc. from using, displaying, advertising or in dealing with the manufacture and sale of bread, cakes, biscuits, rusks, pastries, buns and other allied/cognate goods under the trade name "Madhurima" and for redention of accounts and profits earned by them by doing business with the above trade name.
8. The above suit was filed on the allegations that the plaintiff is well established in the business of manufacturing and selling of bread, cakes, biscuits, rusks, bakery products, snack foods and other food products for human consumption from shop no. A-7, Municipal Market, Jawahar Gate, Ghaziabad. The above business was started by his father in the name of Madurima" wherein his father's brother defendant no. 1 was later inducted as he was idle and had no other business of his own. The plaintiff also joined the business on attaining maturity and finally entered into a partnership with defendant no. 1 on 1.4.1972 for running the said business. Both of them together started doing bakery and confectionery business from the above shop but subsequently due to dominance of defendant no. 1 who was an elderly person and senior to the plaintiff, it became difficult to carry on the business jointly. Accordingly, it was decided to dissolve the partnership which was ultimately dissolved w.e.f. 1.1.1981 vide dissolution deed dated 9.1.1981. The business of the said shop in the name of "Madhurima" was taken over by the plaintiff along with all its assets and liabilities and he started running the same exclusively.
9. The plaintiff thereafter applied for registration of the trade mark "Madhurima" on 28.8.1981 stating that he had been running the said business independently from 2.1.1981, the date on which he became the sole proprietor notwithstanding the fact that he had been carrying the said business since 1972. His application for registration was duly advertised. It was not opposed. Finally, the trade mark "Madhurima" was registered in his name.
10. The plaintiff is in extensive, open and continuous use of the said trade mark in full knowledge of the defendants. In the year 1999 the defendants installed a board of "New Madhurima Confectioners" on another shop in the same market. He also received a handwritten congratulatory letter on the 31st anniversary of his shop from "New Madhurima"which was sent by defendant no. 1. The plaintiff objected to the use of the name "New Madhurima" by the defendant no. 1 as it was similar to his trade mark "Madhurima". He also made an inquiry from the office of the Registrar of Trade Marks about it, whereupon it was revealed that defendant no. 2 had filed application for registration of the trade mark "New Madhurima Bakers" which is likely to be advertised. On its advertisement on 21.12.1999 plaintiff filed objections opposing its registration. The matter is sub-judice before the Registrar of Trade Marks and no trade mark as aforesaid has been registered in the name of defendant no. 2.
11. The two names "New Madhurmia Confectioners" and "New Madhurima Bakers" adopted by defendant no. 1 and defendant no. 2 respectively are similar to the registered trade mark "Madhurima" of the plaintiff and are deceptive in nature. The defendants under the aforesaid names deal with the same goods as the plaintiff. The use of the said trade names by the defendants is an infringement of the plaintiffs registered trade mark and they are guilty of passing off their goods in the trade name of the plaintiff in a clandestine manner with dishonest intention.
12. The suit was contested by the defendants.
13. Defendant no. 1 in his written statement contended that the suit is not maintainable. He had been using the trade name "Madhurima" since 1964 upto 31.3.1972 as a proprietor and from 1.4.1972 till the dissolution of the firm on 1.1.1981 in partnership with the plaintiff. Thereafter, he has started his independent business as a proprietor in the name of "Madhurima Confectioners"which is distinct. He has applied for registration of the above trade mark vide application no. 98100 and the application is pending consideration before the Registrar of Trade Marks. He is the prior user of the trade name "Madhurima" and can not be restrained from using it. The plaintiff is using the trade name "Madhurima" illegally. The suit is bad on account of delay and laches and is barred by principles acquiescence and waiver.
14. Defendant no. 2 filed his separate written statement and a counter claim. He stated that he is using the trade mark "New Madhurima Bakers" since 1975 without any interruption or interference by any one. It is a distinctive trade mark. The plaintiff is not the owner of the trade mark "Madhurima". Its registration is not legal and proceedings for its cancellation are pending before the Registrar, Trade Marks, New Delhi. His application for registrationof trade mark "New Madhurima Bakers" is also pending consideration. The suit is barred by time, laches, estoppal and acquiescence and the plaintiff is not entitle to any relief, rather he should be restrained from using the trade name "Madhurima".
15. The court below has decreed the suit and has dismissed the counter claim set up by defendant no. 2 holding that the suit is not barred by time or principles of acquiescence and estoppal; the plaintiff is the registered owner of the trade mark "Madhurima"; and the defendants have no right to carry business under the trade name "Madhurima" or "New Madhurima Confectioners" or "New Madhurima Bakers" which are deceptively similar to the registered trade mark of the plaintiff.
16. Aggrieved by the aforesaid decree of the court below the defendants no. 1 and 2 have preferred this appeal under Section 96 CPC.
17. I have heared Sri Ravi Kiran Jain, Senior Advocate assisted by Sri Satyaketu and Sri Y.K. Sinha, learned counsel appearing for defendants no. 1 and 2 (appellants) and Sri M.K. Miglani, learned counsel for the plaintiff (respondent) in opposition.
18. The first and foremost argument of Sri Jain is that there are no pleadings that the trade mark "New Madhurima Confectioners" or "New Madhurima Bakers" is deceptively similar and identical to the name "Madhurima." Moreover, there is no evidence to prove that the trade names used by defendants are similar to the plaintiff's trade mark or are deceptive in nature. In fact, the name "Madhurima" is not even a mark or a trade mark. Secondly, the suit is barred by limitation and Section 41 (g) of Specific Relief Act. Lastly, defendant no. 1 is the prior user of the trade name "Madhurima" and as such in view of Section 34 of the Trade Marks Act, 1999 (hereinafter for short 'Act' only) the plaintiff is not entitle to any relief.
19. Sri Miglani on the other hand contends that there are sufficient pleadings and evidence to prove that "Madhurima" is not only a trade mark but a registered trade mark and that the trade names used by the defendants are deceptively similar and identical to the trade mark used by the plaintiff. There is recurring cause of action for the infringement of the trade mark and deceit of passing off. Therefore the suit is not barred by limitation. The cause of action for the for the suit arose in the year 1999. The suit was filed without loss of much time. The equitable defence of the suit being bad on account of delay or acquiescence etc. is not available to the defendants in view of their dishonest conduct. The defendants are not the prior user of the trade mark "Madhurima" and when under the dissolution deed all assets and liabilities of the firm were allowed to be taken over by the plaintiff, the goodwill including the trade mark/trade name stood transferred to the plaintiff leaving nothing with the defendants.
20. In the light of the above facts and the respective submissions advanced, let me first consider the argument of Sri Jain that 'Madhurima' is neither a 'mark' as defined under Section 2 (m) of the Act or a 'trade mark' as defined under Section 2 (zb) of the Act.
21. Section 2 (m) of the Act which defines 'mark' reads as under:-
"(a).............
(b).............
(c)..............
(m) "mark" includes a device, brand, heading, level, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof;
(n)...............
(o)................
..................
..................."
22. The above definition of the 'mark' is inclusive and purports to enlarge the scope of the word 'mark' by including various objects mentioned therein specially the 'name' and 'word' etc. within its ambit. "Madhurima" is a name and a word both. Therefore, it is covered by the definition of the mark.
23. Trade Mark has been defined under Section 2 (zb) of the Act as under :-
(za) ...............
(i)...........
(ii)...........
(zb) "trade mark" means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours; and
(i).............
(ii).............
(zc)..............."
24. A trader is entitle to deal in goods using a symbol or mark of some sort to distinguish his goods with similar goods sold by other traders. The concept of 'Trade Marks' is essentially to distinguish the goods or services of one trader from those of others.
25. The definition of 'trade mark' refers to a 'mark' capable of being represented graphically and which can distinguish the goods and services of one person from those of others. The mark "Madhurima" is undoubtedly capable of being represented graphically and at the same time is capable of distinguishing the goods of the plaintiff from those of other persons. Therefore, it would fall within the meaning of 'trade mark'.
26. This apart, the name "Madhurima" has been registered as a trade mark of the plaintiff. Its registration itself signifies that it has been recognized by the competent authority as a trade mark. So the argument under consideration warrants no merit and fails.
27. It is admitted to the parties that the business from the shop in dispute in the name and style of "Madhurima" was started by Acharaj Lal, father of the plaintiff and later on defendant no. 1 was inducted therein.
28. In 1972 the said business in whatever form existing was converted into a partnership business with plaintiff and defendant no. 1 as the partners. The said partners adopted the business name "Madhurima." It was dissolved w.e.f. 1.1.1981 and a deed of dissolution was executed between them on 9.1.1988. The dissolution deed paper no. 172 C inter alia provides that both of them have agreed to dissolve the business and that none of them have any objection, if the business is exclusively taken over by the plaintiff and be run by him in the same name and style of "Madhurima" in his individual capacity or in partnership with someone else. The dissolution deed also provides that defendant no. 1 accepts full and final settlement of accounts and that he has severed all rights with the assets and liabilities of the firm.
29. It is important to note that once a partner surrenders or relinquishes his rights in a partnership business in favour of other partner, the assets and liabilities including goodwill of the business passes off to the other partner. A trade mark is traditionally considered to be a vital and inseparable part of the goodwill of the business. Therefore, transfer of goodwill naturally includes the right in trade mark also.
30. In Harmohan Singh Vs. Gurubux Singh AIR 2001 Delhi 507 the Court held that when one of the partners relinquishes his rights and interest in various assets of the partnership firm in favour of other partner, the assets and rights including the goodwill in trade mark of the partnership also passes off . Thus, the trade mark of the partnership firm which stood dissolved was held to be the property of the partner who took over the assets of the business.
31. In view of the dissolution deed all assets of the business "Madhurima" stood transferred in favour of plaintiff who was free to start his independent business in the same name from the shop in question afresh either as a sole proprietor or in partnership with someone. He thus, become the exclusive owner of the said trade mark.
32. Subsequently, the plaintiff even got the above trade mark duly registered in his name, a copy of which is paper no. 177 C and started/continued carrying his business in the name of "Madhurima". There is no dispute that as on date "Madhurima" is the registered trade mark of the plaintiff. It has not been cancelled or revoked by the competent authority. Thus, the plaintiff is the registered proprietor of the trade mark "Madhurima". On the other hand, defendants do not have any certificate of registration of the trade mark "Madhurima" in their name. They are doing business in the name of 'Madhurima Confectioners' and 'Madhurima Bakers'. They are also not the registered trade marks of the defendants.
33. In view of the aforesaid facts and circumstances, after the dissolution of the partnership firm plaintiff alone became the exclusive proprietor of the trade mark 'Madhurima' and on its registration became its registered proprietor as well.
34. Section 27 of the Act provides for the effect of registration of trade mark. It provides that no person shall be entitle to institute any proceedings to prevent, or to recover damages for the infringement of an unregistered trade mark. In other words, it permits a suit for infringement of registered trade mark. It means that a person can institute a suit for infringement of his registered trade mark.
35. Section 28 of the Act confers upon the registered proprietor of the trade mark the exclusive right to use the said trade mark in relation to goods or services in respect whereof it is so registered and to obtain relief in respect of infringement of the said trade mark.
36. Section 29 of the Act provides that a registered trade mark is infringed, if a person, who is not its registered proprietor or a person permitted to use it, uses it or any mark which is identical with or deceptively similar to it in the course of the trade.
37. A conjoint reading of the above provisions of the Act confers upon the registered proprietor of the trade mark a right to use it exclusively for its trade. His registered trade mark can not be used by any other person, if not permitted, either in its identical form or in a form which is deceptively similar and if it is so used, it would amount to an infringement of the registered trade mark.
38. The plaintiff in paragraphs 12,13 and 14 of the plaint has specifically pleaded that the trade mark "New Madhurima Confectioners" and "New Madhurima Bakers" adopted by the defendants are identical and deceptively similar to his registered trade mark and that the defendants deal in same goods for which the plaintiff got his trade mark registered. Therefore, the use of the above trade marks by the defendants is with dishonest intention.
39. The action for infringement of a registered trade mark is a statutory right. In a suit complaining of its infringement and for a decree of perpetual injunction, the court is only supposed to decide if the defendants are using the trade mark of the plaintiff or the imitation of the same.
40. There is no dispute that the defendants are carrying business of confectioners and bakers in the name and style of "Madhurima Confectioners" and "Madhurima Bakers" respectively. The said two names may not be completely identical to the registered trade mark of the plaintiff but are partly identical to it.
41. In Ruston and Hornby Limited Vs. Z. Engineering Co. AIR 1970 SC 1649 their Lordships of the Apex Court held that in a suit for perpetual injunction for the infringement of trade mark, it is not necessary to prove actual deception or damage. It is enough if there is probability of confusion between the goods by the use of mark which resembles the registered trade mark of the owner. In the said case the registered trade mark was Ruston. The competitor started using the trade mark Ruston India, but even that was held to be an infringement.
42. The use of the said aforesaid names by the defendants tested on the above anvil, is likely to deceive or cause confusion in relation to trading of the goods in respect of which the plaintiff got the above trade mark registered. Moreover, it is admitted atleast to defendant no, 1 that the trade mark "Madhurima" is similar to his trade mark as he himself instituted Suit No. 1276 of 2001 in the Delhi High Court complaining of the infringement of his trade mark by the plaintiff in using the trade mark "Madhurima". It means he accepts his trade mark as well as the trade mark trade mark of the plaintiff to be deceptively similar in nature.
43. Defendant no. 2 had raised a counter claim to restrain the plaintiff from using the trade mark "Madhurima" as the same infringes with his right to use his trade mark "Madhurima Bakers" in as much as its use is likely to cause confusion and deception among the public.
44. The institution of the above suit by the defendant no. 1 and the filing of the objection by the defendant no. 2 as aforesaid is sufficient enough to prove that the trade marks used by the defendants are similar to the trade mark of the plaintiff and their use is likely to deceive the public.
45. However, before holding a person guilty of infringement of a registered trade mark one can not loose sight of Section 34 of the Act which provides that infringement of registered trade mark will not take place in cases of prior user of the said trade mark. The proprietor of a registered trade mark can not interfere with or restrain the use by any person of a identical trade mark when such person has continuously used that trade mark from a day prior to the date of registration of trade mark.
46. The burden to prove the continuous prior use of the trade mark is upon the person who alleges the same and it has to be established on the basis of the clear and cogent evidence.
47. Defendant no. 1 has not adduced any evidence that he had been using the trade mark "Madhurima" exclusively prior to 1972 when he entered into partnership with the plaintiff . The use of the aforesaid trade mark prior to 1972, if any, was jointly by Achraj Lal and defendant no. 1. Thereafter it was in joint use of plaintiff and defendant no. 1 in partnership till its dissolution. On dissolution of partnership defendant no. 1 severed all his rights in the assets of the firm including goodwill and trade mark whereupon it become the exclusive property of the plaintiff. The use of the said trade mark by the defendant prior to dissolution of partnership looses all its significance once defendant no 1 entered into partnership with the plaintiff and starting using the said trade mark jointly with him and subsequently severed his connections with the same and allowed it to be used exclusively by the plaintiff. Therefore, any use of the aforesaid trade mark by the defendant no.1 prior to the dissolution of partnership has no significance and is not material.
48. The court below has returned a finding that there is no evidence on record to establish that the defendants are running the business in name of "Madhurima" or new "Madhurima" since 1964. This apart, once the defendant no. 1 who was the partner of plaintiff in the business "Madhurima" had dissolved the firm and had severed all connections with it with the specific understanding that plaintiff is free to use the name "Madhurima" exclusively for his business purpose, he was left with no lien over the name "Madhurima".
49. The defendant no. 1 admits that he was a partner in the business "Madhurima" and that the said partnership has been dissolved vide dissolution deed on 9.1.1981. The terms and conditions of dissolution deed are not disputed. He also accepts that he has neither informed the plaintiff nor has taken his consent either for starting his business in the name of "Madhurima Confectioners" or for applying for its registration as the trade mark.
50. Similarly, defendant no. 2 admits that he had worked as an assistant of the plaintiff who was using the name "Madhurima" for his business meaning thereby that he was aware that the trade mark "Madhurim" is used by the plaintiff and that he was not using the aforesaid trade mark in his independent capacity.
51. In other words, both the defendants were aware that the business of "Madhurima" was either joint or that of the plaintiff. They have severed their connections with it and that the defendant no. 1 had transferred the assets of the said business to the plaintiff. Thus, they had full knowledge that trade mark "Madhurima" is that of the plaintiff and at the same time they have no right to carry any independent business with the same name or which may be similar to it.
52. There is no evidence that the defendants were ever in exclusive use of the said trade mark or have started using it after the dissolution of the partnership but before its registration in the name of plaintiff in the year 1981.
53. Accordingly, defendants can not be held to be the prior users of the above trade mark.
54. One another argument which has been raised is that the suit is barred by law of limitation and acquiescence.
55. Section 3 of The Limitation Act, 1963 provides for the dismissal of every suit preferred after the expiry of period prescribed. The Limitation Act does not specifically provides for any time limit for instituting a suit for the infringement of a trade mark and deceit of passing off goods in the registered trade mark of the other person. In such a situation Article 113 of the Schedule to the Act comes into play which provides that where no limitation is provided for any suit in the schedule to the Limitation Act, a suit can be instituted within three years from the date when the right to sue accrues.
56. In view of the above, a suit for infringement of trade mark or for deceit of passing off goods in the registered trade mark of others can be instituted within 3 years from the date when the right to sue accrues. It is therefore important to first determine as to when the right to sue accrued to the plaintiff.
57. The plaintiff contends that the defendants have started using the trade mark "Madhurima Confectioners" and "Madhurima Bakers" which are deceptively similar to its registered trade mark "Madhurima" in the year 1999. The plaintiff came to know of the said use when they were trying to put a board infront of one of the shops just 4 and 5 shops away from his shop in the same market. Secondly, when at about the same time, he had received a congratulatory note from defendant no. 1 wishing him on the 31st anniversary of his shop "Madhurima"describing himself as the sender with the name "Madhurima Confectioners." These two actions revealed to the plaintiff that the defendants are probably violating his trade mark right. He was not aware of the misuse or infringement of his trade mark earlier. The plaintiff apprehensive of the defendants illegal activities probably of carrying business in the same goods with deceptively similar trade mark made inquiries which revealed that they have applied for registration of trade marks similar to that of the plaintiff. Accordingly, apart from opposing the registration of their trade mark, he filed the suit without wasting any time.
58. No evidence had been adduced to prove that the plaintiff had the knowledge of the infringement of the trade mark by the defendants earlier to 1999.
59. In view of the above, the cause of action for the plaintiff to institute a suit arose, if any, in 1999 when he came to know of use of trade mark similar to his registered trade mark by the defendants.
60. The suit was instituted in the year 2001 well within three years of the period prescribed by Article 113 of the Schedule to the Limitation Act. Therefore, there is no delay much less deliberate delay in filing the suit. The plaintiff's suit for a decree of injunction is accordingly not beyond limitation prescribed.
61. The suit is for infringement of trade mark and of deceit of passing off goods in the registered trade mark of the plaintiff. Both the above wrongs are continuous and have a recurring cause of action. The limitation for it would start running afresh from every subsequent action of its violation.
62. In M/s Bengal Waterproof Limited Vs. M/s. Bombey Waterproof Manufacturing Company and another AIR 1997 SC 1398 it has been held that where the cause of action for the suit is based on the infringement of trade mark and regarding passing off the goods as if they were the goods of the plaintiff, it gives rise to a recurring cause of action to the holder of the trade mark.
63. In view of the above, the argument that the suit is barred by time has no substance and has rightly been turned down by the court below.
64. Acquiescence is part of principle of estoppal enshrined in Section 115 of the Indian Evidence Act. It is in the nature of defence and has to be specifically pleaded and proved.
65. Halsbury's Law of England describes the expression ' acquiescence' as a term which is properly used where a person having a right, and seeing another person about to commit or in the course of committing an act infringing upon that right, stands by in such a manner as really to induce the person committing the act, and who might otherwise have abstained from it, to believe that he assents to it being committed, a person so standing by can not afterwards be heard to complain of the act.
66. In short, a person knowing of his right if allows any person to commit its infringement within his knowledge giving an impression that he has assented to such infringement can not later turn around to make a complaint and even if he so complains he is not entitled to be heard.
67. Acquiescence means encouragement to infringe a right. The person possessing a right must act in such a manner that the other person is mislead to believe that there is no objection to him if the right is so infringed.
68. In M/s Hindustan Pencil (P) Limited Vs. M/s. Indian Stationery Products Co. and another AIR 1990 Delhi 19 which was also a case of infringement of a trade mark, Justice B.N. Kirpal of the Delhi high court (as he then was) observed that acquiescence may be good defence in a suit for permanent injunction because the defendants may legitimately contend that the encouragement of the plaintiff to the defendants use of the mark in effect amounted to abandonment by the plaintiff of his right in favour of the defendant. However, it will be for the defendant in such cases to prove acquiescence by the plaintiff. It can not be inferred merely by reason of the fact that the plaintiff has not taken action against the infringement of his rights.
69. The plaintiff in the instant case has not done any overt act which could in any manner, amount to encouraging the defendant to infringe his trade mark. There is no assent on his part to infringe his right to exclusive use of his registered trade mark at the hands of defendants, atleast no such case has been proved by the defendants. Therefore, merely for the reason that no immediate action was taken by the plaintiff or a suit was brought about acquiescence can not be inferred.
70. In view of the above, there is no estoppel by acquiescence on part of the plaintiff.
71. The argument that the suit is barred by Section 41 (h) of the Specific Relief Act, 1963 has no substance. First of all no such plea was taken in the court below and no issue was got settled on this point. Secondly, the above provision bars the suit only when an equally efficacious remedy for the relief claimed in the suit is otherwise available. Learned counsel for the defendants have utterly failed to point out the alternate remedy, if any, so available. Accordingly, this argument has been noted only to be rejected.
72. In view of the above discussion, I find no force in any of the submissions advanced on behalf of the defendants and consequently in this appeal. It is accordingly dismissed with cost upon the parties.
SKS 19.12.2014