A.r. Gangadhara & Co., Nirmal & Another v. Firm Of Police Mallaih, Rajeswar & Co. & Others

Chandrasekhara Sastry, J. 1. The above Civil Revision Petition and the appeal were filed against the order of the District Judge, Nizamabad in I.A. No.95 of 1961 in O.S. No.2 of 1961 on his file. As some doubt was felt whether an appeal lay against the order in question, an appeal as well as the Civil Revision Petition were filed. When the cases were taken up for hearing, it is represented by the learned counsel for both sides that the appeal is maintainable and that the Civil Revision Petition is, therefore, not maintainable. The facts which gave rise to this appeal are as follows : The appellants are the defendants 1 and 2 in the suit, O.S.2/61. The suit was filed by the respondents 1 and 2 under Section 106, Clause (1) read with Section 29 (1) of the Trade and Merchandise Marks Act, 1958 for an injunction and for damages for infringement of their trade mark. The main relief asked for in this suit is for a perpetual injunction restraining the defendants their servants, agents, travelling agents, salesmen, brokers, stockiest and dealers and all other persons on their behalf, from infringing the plaintiffs registered Trade Mark No.349 Hyd, and for a perpetual injunction restraining the defendants, their servants, agents, travelling agents, salesmen, brokers, stockiest and dealers and all other persons on their behalf from manufacturing, affixing or otherwise using in connection with beedies or the business relating to such goods of such a mark or any colourable or deceptive imitation or resembling that of the plaintiffs aforesaid registered Trade Mark No.349 Hyderabad as to pass off the goods of the defendants as and for those of the plaintiffs. A decree for Rs. 4,000/- as damages also was asked for on account of the infringement of the plaintiffs registered Trade Mark No.349 Hyd. In clause (f) of paragraph 16 of the plaint, a decree for damages at the rate of Rs. 2,000/- every month till the infringement of the registered Trade Mark is stopped by the defendants was also asked for. Pending the suit, I.A. No.95/61 was filed in the lower Court by the plaintiffs praying that the defendants, their servants, agents etc., be restrained from using and infringing the plaintiffs Registered Trade Mark No.349 Hyderabad and/or from manufacturing, affixing or otherwise using in connection with the beedies or the business relating to such goods of such mark or any colourable or deceptive imitation or resembling that of the petitioners aforesaid Registered Trade Mark No.349 Hyderabad or from using any other mark which is an infringement of the plaintiffs registered Trade Mark, and also for an injunction retraining them from using the mark similar to that of the Registered Trade Mark No.349, Hyderabad with inscription of A.R. Gangadhar and Company in place of Police Malliah Rajeshwar so as to pass off the respondents goods as and for the goods of the petitioners and selling the same. This petition was ordered by the Lower Court. Hence this appeal. 2. it is alleged in the plaint that the 1st plaintiff had been adopting and using the distinctive label containing as its essential feature the figuer of a bearded man with a sash running up across, over his right shoulder from below his left arm and a piece of cloth held falling across his left out-stretched forearm. In that label, the name of Rajeshwar in Telgu script occurs below the aforesaid essential feature of the figure of the bearded man. On either side of that central figure, there are rectangular devises placed in a sianting manner which contain the words Police Malliah Rajeshwar in Telgu script on the left panel and in Hindi script on the right panel. Along with this, a similar label was used with a bust of a younger beardless man with a cap on his head and buttoned up coat right in the centre in place of the bearded man The said labels had gained great reputation and recognition and are exclusively associated by the trade and the public with the goods of the plaintiffs over a substantial period of years. The 2nd plaintiff, who is a partner of the 1st plaintiffs firm applied for and obtained registration of the said trade mark under the Trade Marks Act V of 1940 which is now replaced by the Trade and Merchandise Madks Act (Act No.XLIII of 1958). The registration was with effect from 21st April, 1949 and was numbered as 349 Hyderabad. It is also alleged in the plaint that the plaintiffs 1 and 2 further availed of the advantage of renewal of that registration with effect from 21st April, 1956 and that the said registration is still subsisting and in full effect. The plaintiffs have recently been made aware that the defendants 1 and 2 (the appellants herein) bad not only infringed upon the rights in the essential features of the plaintiffs said registered Trade Marks No.349 Hyderabad, but also deliberately adopted the lay-out arrangement, combination, get up and other essential details of the label used by the plaintiffs for the beedies manufactured and sold by them with the said purpose for passing off their goods as those of the plaintiffs among the trade and the consumers. The only difference between the label registered and used by the plaintiffs and that used by the defendants 1 and 2 is the use of the wards "Gadge Maharaj" in Telgu below the figure of the bearded man in place of the plaintiffs "Rajeshwar". Also the words A.R. Gangadhar and Company in telugu script and Hindi script were used in the defendants labels for the words Police Malliah Rajeshwar" which appear in the Plaintiffs registered trade mark. 3. The defendants case is as follows : There is a partnership firm formed in 1945 and named as "P.M. Ram Das and Co.," which manufactured and sold beedies and in which Police Malliah, the 2nd plaintiff in the suit, had a share of 2 annas and A.R. Gangadhar, the 2nd defendant has a share of 8 annas. The beedies that were manufactured by this company were sold under different labels one of them being the label of "Saint Gadge Maharaj". This label was being used by the partnership right from 1945 and it was very popular with the trade and the public because Saint Gadge Maharaj used to visit Nirmal occasionally where thousands of people used to worship him. Then the 2nd plaintiff applied for registration of the trade mark with the picture of Saint Gadge Maharaj, it was objected to by the Registering Authority. Then, the 2nd plaintiff fraudulently gave a statement before the Registering Authority to the effect that the picture was not that of Saint Gadge Maharaj, but that of one of his fore-fathers, and with that amendment, he got the name on the label changed and got the mark registered. This statement that the picture was that of the 2nd plaintiffs great grandfather is utterly false and fraudulent, and by playing this fraud, the 2nd plaintiff got the mark registered under the Trade Marks Act V of 1940. When the 2nd defendant came to know of this fraud played by the 2nd plaintiff on the Registering Authority, the 2nd defendant filed an application for rectification of the registration under Sections 46, 47 Clause (4) and Rule 56 of the Trade and Merahandise Marks Act of 1958 before the Registrar, Madras on 6th of March, 1961. After receiving notice of that application and after filing a counter therein, the plaintiffs filed this present suit. The plaintiffs filed an application before the Registrar for the grant of an injunction, which was dismissed by the latter. The plaintiffs filed an appeal to the High Court of Andhra Pradesh against the order of the Registrar dismissing the application for injunction and also filed C.M.P. No.5642/61 and got an interim order of injunction on 31-5-1961. After the defendants entered appearance in this petition, the plaintiffs withdrew the appeal and got it dismissed on 23-6-61. 4. It was on that very same day that the suit was filed along with this application for an injunction, I.A. No.95/61 and the plaintiffs got an interim order of injunction on the same day. The plaintiffs also filed a criminal complaint against the 2nd defendant in the Court of the Munsiff-Magistrate, Bodhan; but it was dismissed. Ram Das and Company was dissolved on 31-10-1959 and subsequently defendants 1 and 2 were using the mark in question. There are now two suits pending O.S. Nos.13/60 and 16/60 to which the 2nd plaintiff is a party and which related to the affairs of the dissolved firm, "Ram Das and Company". It is further stated that the 2nd defendant was selling and manufacturing the beedies under the name of Gadge Maharaj for the last 16 years, firstly, as a partner of P.M. Ram Das and Co., and later on from November, 1959 as the proprietor of A.R. Gangadhar and Co., and that the act of the plaintiffs in getting the mark registered with a change in the name only as "Police Malliah Rejeshwar" is fraudulent and does not affect the rights of the defendants 1 and 2 to use the label with the name of "Saint Gadge Maharaj". It is also stated in the counter affidavit filed in I.A. No.95/61 that the accounts of the defendants 1 and 2 right from 1946 showed that they are manufacturing beedies and selling them with the picture and label of "Gadge Maharaj" and that every year their accounts were scrutinised by the Income-tax Department and that those accounts pertain to "P.M. Ram Das and Co." till 1959 and that the bill books from 1946 also showed that the defendants 1 and 2 were manufacturing and selling Gadge Maharaj beedies. 5. The lower Court held that it is satisfied on a perusal of the two labels that prima facie the emblem put forward by the defendants 1 and 2 is capable of and likely to be mistaken or taken for the emblem of the plaintiffs and that since the plaintiffs emblem was registered and the defendants emblem was not registered, the only proper course is to restrain the defendants from putting forward the beedies wrapped in wrappers bearing the essential features of the emblem of the plaintiffs. Earlier in the order referring to the case of the defendants that they were using these labels with the same picture and pattern from the year 1945, the lower Court stated that it is immaterial as the defendants did not appear to have registered that trade mark at all with the Registrar of Trade Marks. It is clear that the Lower Court passed the order of injunction prayed for by the plaintiffs only on the ground that the plaintiffs got their mark registered whereas the defendants did not. The lower Court does not appear to have considered the balance of convenience before passing the order. 6. It is not disputed before me that the mark used by the plaintiffs and that used by the defendants are very similar, the picture on the label being the same and the other pattern also being almost identical and the only difference between the two labels being, as already stated, in the names printed underneath the picture and on the sides. In the label used by the defendants, the name is "Saint Gadge Maharaj" and in the label used by the plaintiffs, the name is "Police Malliah Rajeshwar". But it is contended by Sri Ramachandra Reddy, the learned counsel for the appellants that the registration obtained by the plaintiffs was fraudulent for two reasons; firstly he represented to the Registrar of Trade Marks that the picture on the label is that of one of his ancestors where as in fact it is that of Gadge Maharaj, who was worshipped as a saint by the public and who was held in great respect by the public. In fact, this objection was raised by the Registrar in the first instance. But the plaintiff got over it by making a false statement that the picture was that of one of his ancestors; secondly, it is argued that the plaintiffs played a fraud upon the defendants 1 and 2 and other partners of the firm, Ram Das and Co., which was using this label for the beedies manufactured and sold by them even from the year 1945 and that was why the defendants applied to the Registrar for rectification of the register and also for registering the label used by the defendants as their exclusive trade mark, which proceedings are pending. It is also further contended by the learned Counsel for the appellants that the balance of convenience does not require the issue of an order of injunction which, in effect, destroys the entire business carried on by the defendants. The learned Counsel also submitted that his clients are willing to give any security to meet the plaintiffs claim in case they ultimately obtain a decree in the suit. On the other hand, it is contended by the learned Advocate-General appearing for the plaintiffs-respondents that the plaintiffs prima facie case is that their label is admittedly registered under the Trade Marks Act and that, as such, the plaintiffs had exclusive title to that mark and are the only persons entitled to use it. It is also contended that in cases like this, the normal rule is to restrain those who infringed this trade mark from using the same or any colourable imitation of the same. He submitted that unless the defendants are restrained from using this trade mark pending disposal of the suit, his clients business will be ruined. 7. Under Section 28(1) of the Trade and Merchandise Marks Act, 1958: "Subject to the other provisions of this Act, the registration of a trade mark in part A or Part B of the Register shall, if valid, give to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in relation to the goods in respect of which the trade mark is registered and to obtain relief in respect of infringement of the trade mark in the manner provided by this Act." Section 31, Clause (1) of the Act states that: "In all legal proceedings relating to a trade mark registered under this Act (including applications under Section 56), the original registration of the trade mark and of all subsequent assignment and transmissions of the trade mark-shall be prima facie evidence of the validity thereof." it is relying upon these two sections that the learned Advocate-General for the plaintiffs contended that the registration of the trade mark is prima facie evidence of the validity thereof and that it follows that the plaintiffs had, under Section 28(1), exclusive right to use this trade mark in question. But Sri Ramchandra Reddy, the learned Counsel for the appellants relied upon Section 32, Clauses (a) and (c) and Section 33. Section 32 states that : Subject to the provisions of Section 35 and Section 46, in all legal proceedings relating to a trade mark registered in Part A of the register (including applications under, Section 56), the original registration of the trade mark shall, after the expiration of seven years from the date of such registration, be taken to be valid in all respects unless it is proved: (a) that the original registration was obtained by fraud; or (b) .... .... .... .... (c) that the trade mark was not, at the commencement of the proceedings, distinctive of the goods of the registered proprietor." He further submitted that, in the lower Court, his clients intimated to the Court that their accounts and bill books etc., will show that the beedies manufactured and sold by Ram Das and Co., were being sold under this mark, tut that the lower Court did not think it material to go into that question. Section 33 of the Act is as follows: "Nothing in this Act shall entitle the proprietor or a registered user of a registered trade mark to interfere with or restrain the use by any person of a trade mark identical with or nearly resembling it in relation to goods in relation to which that person or a predecessor in title of his has continuously used that trade mark from a date prior- (a) to the use of the first-mentioned trade mark in relation to those goods by the proprietor or a predecessor in title of his; or (b) to the date of registration of the first-mentioned trade mark in respect of those goods in the name of the proprietor or a predecessor in title of his: whichever is the earlier, and the Registrar shall not refuse (on such use being proved) to register the second-mentioned trade mark by reason only of the registration of the first-mentioned trade mark". Relying upon this Section, it is contended on behalf of the appellants that they have been using the trade mark even from the year 1945 and that, therefore, their user of the trade mark cannot be interfered with or be restrained. Section 46 of the Act relates to the removal from the register and imposition of limitations on the ground of non-use of the trade mark. Under Section 56, power is given to the High Court or the Registrar at the instance of any person aggrieved to cancel or vary the registration of a trade mark on the ground of any contravention, or failure to observe a condition entered on the register in relation thereto and to rectify the register. The appellants, as already stated, applied to the Registrar appointed under this Act, praying that the entry in the register of trade marks in respect of the registered trade mark No.349, Hyderabad be removed from the register as the same was obtained by the registered proprietor by deliberately suppressing the fact that the portrait appearing in the trade mark belonged to the well-known Saint Gadge Maharaj. This application was made on 6-3-61 and the present suit was filed in the lower Court on 23-6-1961. Under Section 111, Clause (1) of the Act: "Where in any suit for the infringement of a trademark- (a) the defendant pleads that the registration of the plaintiffs trade mark is invalid, or (b) the defendant raises a defence under clause (d) of sub-sec.(1) of Section 30 and the plaintiff pleads the invalidity of the registration of the defendants trade mark; the court trying the suit (hereinafter referred to as the Court,) shall. (1) if any proceedings for rectification of the register in relation to the plaintiffs or defendants trade mark are pending before the Registrar or the High Court, stay the suit pending the final disposal of such proceedings;" In view of this provision, the suit is now stayed and its trial cannot be proceeded with. The Court can dispose of the suit only after the final order is made in the rectification proceedings and in conformity with such order in so far as it relates to the issue as to the validity of the registration of the trade mark. At the same time, Section 111, Clause (5) provides that: "The stay of a suit for the infringement of a trade mark under this section shall not preclude the court making any interlocutory orders (including any order granting an injunction, directing accounts to be kept, appointing a receiver or attaching any property), during the period of the stay of the suit." Therefore, it is clear that it is open to the Court to pass any interlocutory order to safeguard the interests of the parties before it pending the decision of the Registrar and the disposal of the suit. It is in view of this Clause 5 of Section 111 that the plaintiffs filed I.A. No.95/61 for the issue of an injunction out of which this appeal arises. 8. Any expression of opinion by me on the merits of the respective cases of the parties is likely to prejudice their respective cases in the rectification proceedings. I am also told during the hearing of this appeal that the appellants had also filed an application before the Registrar to register their trade mark in their name. Therefore, I refrain from expressing any opinion on the respective merits of the respective cases of the parties and I proceed to consider only how best to safeguard the respective interests of the parties to this litigation pending disposal of the suit. 9. I have already mentioned that the lower Court granted the injunction prayed for on the ground that the plaintiffs are the registered proprietors of the trade mark whereas the defendants are not. The learned Advocate-General appearing for the plaintiffs relied upon the decision in Ralli v. Fleming, ILR 3 Cal 417. In that case, the allegation was that the defendant was just prior to the suit using a mark for his goods which was a colourable imitation of the trade mark registered in the plaintiffs name. The question was whether an interim order of injunction should be issued restraining the defendants from using the colourable imitation pending disposal of the suit. Sir Richard Garth, Chief Justice found that the plaintiffs made out a prima facie case of their exclusive right to use the trade mark and that the trade mark which was being used by the defendants was a colourful imitation. The learned Chief Justice also found that the mark used by the plaintiffs was so well known and recognised in the market as the trade mark of the plaintiffs for the goods sold by them. It was therefore, pointed out that if the defendants were allowed to use these trade marks in the market for several months, they would become as well known in the market as importers and sellers of the goods as the plaintiffs and it was under those circumstances, the learned Chief Justice was of the opinion that an order of injunction was the proper one to be passed in the circumsstances of that case. At the same time, it must be noted that Markby, J., the other learned Judge, who decided the case, did not agree with the view taken by the learned Chief Justice even on the question whether the plaintiffs had made out a prima facie case. But the learned judge agreed with the order passed by the learned Chief Justice for the reason that it will be a manifest inconvenience, if, upon the interlocutory application there should be a difference of opinion, giving the parties a right to a second appeal before the suit is heard and that such a situation was clearly not desirable. Therefore, I am unable to treat this as an authority for the position contended for by the learned Advocate-General. The learned Advocate-General also placed reliance upon a decision in Ebrahim Currim and Sons v. Abdulla Saheb, A.I.R. 1934 Madras 226. In that case, the question related to a number in a mark printed on umbrellas sold by the plaintiffs. The facts in that case were that the plaintiffs was a well established article in the market. The defendant did not pretend that his article came on to the market at any more remote period than a year and a half ago prior to the suit and the evidence with regard to that even was utterly unsatisfactory. The learned Judges held that to allow the defendant with so new an article as that to disturb the state of things by putting en the market a whole supply, which may turn out to be an infringement of the plaintiffs right would be much greater inconvenience than to restrain the defendant for the few weeks adjournment during which the trial will be expedited and the slight difficulty of ascertaining by way of injury hereafter what the amount of measurable money loss he would incur by that short adjournment. Therefore, an interlocutory injunction was granted in that case subject to the condition that the plaintiffs under took to submit to an inquiry and to the payment of such damages as shall be found due upon that inquiry in the event of the defendants actions being held not to be an attempt at passing off in derogation of the plaintiffs rights. I cannot regard this decision as an authority for the proposition that, as a general rule, in suits for infringement of a trade mark, the Court is bound to issue an order of injunction restraining the defendant from using the mark pending disposal of the suit. The learned Advocate-General also relied upon a decision in National Co. Ltd. v. Raj Kumar, A.I.R. 1954 Allahabad 218, where the defendants were admittedly new-comers in the field. Further, the defendants in that case did not claim that they had already established a name for their goods in the market and it was also admitted that the plaintiffs" goods, which were being sold with the trade mark in question, were well established throughout India and were sold in large numbers. That was a decision given on the particular facts of that case and cannot be taken to have laid down any general rule in this regard. The other decisions in Ishar Das v. Firm Bhaion Ki Dokan, A.I.R. 1940 Lahore 39, Mohideen Bawa v. Rigaud Perfume Manufacturers, A.I.R. 1932 Rangoon 114, Mangalore Ganesh Beedi Works Mysore Free India Beedi Works Bangalore City A.I.R. 1951 Mysore 29, Haji Abdul Hamid v. Raja Ram, 1957 All LJ 124, am Abdulla Khan v. Miskin Saheb, A.I.R. 1960 Andhra Pradesh 149, do not carry the matter further, as they are decisions given on the particular and respective facts of those cases. 10. Sri Ramachandra Reddy, the learned counsel for the appellants relied upon a decision in Hari Chand Anand and Co. v. Singer Manufacturing Co., A.I.R. 1933 Lahore 1046 where it was held that : "Where in a suit for injunction and other reliefs for infringement of trade mark by the defendants the plaintiffs pray for a temporary injunction the Court has to see on which side the balance of convenience lies assuming that the infringement exists. Where the loss to the defendants by the grant of injunction cannot be remedied if plaintiff fails, but the plaintiffs interests can be otherwise safeguarded, the injunction should be refused. The learned Counsel pointed out to Section 111 (5) which contemplates that the Court in which a suit for an infringement of a trade mark is filed, can make interlocutory orders not only granting an injunction but also directing accounts to be kept, appointing a receiver or attaching any property pending the suit. Therefore, it is contended that it cannot be intention of the legislature that, as a rule, only an order of injunction shall be passed pending, the suit like the present one. 11. It cannot be doubted that the plaintiffs will suffer loss if, ultimately, their suit is decreed and it the defendants are not restrained as prayed for by the plaintiffs. But it may be noted that the plaintiffs business will not come to a standstill pending the suit. They are entitled to carry on their business using the trade mark in question. But, on the other hand, if the defendants-are restrained from using this trade mark, their business which is being carried on with this mark, will be stopped and the defendants may lose their business altogether with regard to their goods with their mark, if, ultimately, they succeed. Therefore, in my opinion, this is not a case where the defendants shall be restrained by an order of injunction from carrying on their business in the manner prayed for by the plaintiffs. Other safeguards must be provided for against the loss which may be sustained by the plaintiffs pending disposal of the suit. Further, there is an essential distinction between the cases relied upon by the Advocate-General and the present case. In almost all those cases, the plaintiffs exclusive right to the use of the mark in question was not in dispute and the only question was whether the mark that was being used by the defendants in those cases was a colourable imitation of the plaintiffs mark or was deceptively similar to the mark registered in the name of the plaintiffs. But, in this case, the question is who is entitled to the mark which is in dispute, whether the plaintiffs or defendants 1 and 2. For this reason also, I think that an order of injunction is not the proper one to be passed in this case. 12. Various suggestions were made during the course of the arguments by the learned counsel appearing on both sides; but they were not able to agree to any one of them. So, I have myself considered how best to safeguard the interests of the plaintiffs in case they ultimately succeed in establishing their claim. In para 16 (f) of the plaint, the plaintiffs claimed future damages from defendants at the rate of Rs. 2,000/- every month till the infringement of the registered trade mark is stopped by the defendants. The rate of damages is thus estimated by the plaintiffs themselves. Therefore, I direct the defendants 1 and 2 to give security for an amount of Rs. 24,000/- to the satisfaction of the Court of the Distirct Judge, Nizamabad within one month from today. I appoint the 2nd defendant, A.R. Gangadhar as the receiver for the sale of the beedies manufactured and sold with the trade mark of "Saint Gadge Maharaj". He shall file a statement of accounts in the lower Court every three months from today pending disposal of the suit. He shall be subject to the further orders of the Court of the District Judge, Nizamabad. 13. C.M.A. No.246/61 is allowed, the order of the lower Court is set aside, and an order, as stated above, will issue. I direct the parties to bear their own costs in this appeal and in I.A. No.95 of 1951. C.R.P., No.1079 of 1961 is dismissed without costs. 14. I direct the defendants to give security only tor Rs. 24,000/- being the estimated damages for one year in the hope that the proceedings before the Registrar and in the lower Court will be completed within one year from today. If for any reason, the proceedings were not completed within that period, it will be open to the plaintiff to move the lower Court again for further directions. Appeal allowed.