Chandra Bhan Dembla Trading v. Bharat Sewing Machine Co

H.L. Anand, J:

By I.A. 968/81, plaintiff in a suit based on allegations of infringement of trade mark and of passing off, seeks to restrain the defendant from manufacturing, selling, advertising and offering for sale sewing machines under the trade marks `Sainik and `Harsha. The defendant opposes the plea for injunction and, by I.A. 1794/81 seeks to have the suit itself stayed u/s 111 of the Trade and Merchandise Marks Act. On the ground of pendency of rectification proceedings in respect of the plaintiffs trade marks.

Parties have been manufacturing and marketing sewing machines with the identical trade marks `Sainik and `Harsha Parties are at variance as to whose user has been earlier in point of time to the other. Parties are, however, agreed that both of them have registered their trade marks, the registration of the trade marks `Sainik in favour of defendant, being confined to the State of Rajasthan. Parties also assail the validity of the registration of each other are agreed the proceedings for rectification, at the instance of both the parties, are pending before the Registrar as also in respect Court. It is a common case of the parties that the defendant never manufactured or marketed sewing machines with the trade mark `Sainik in the Union Territory of Delhi or else where than the State of Rajasthan, but the same was advertised in a local Rajasthan paper, which could also be sent for through the dealer in Delhi and had, in fact, been obtained by post by the plaintiff. It is not disputed that but for the advertisement contained in the said paper, there would be no jurisdiction in this Court to deal with the action for infringement and passing off in relation to the trade mark `Sainik because no part of the cause of action ever arose within this jurisdiction, other than the physical existence of the newspaper and the defendant admittedly carried on business in Bikaner, within the State of Rajasthan. It was also, by and large, admitted that the dealings of trade marks aforesaid were confirmed to the Army authorities, presumably because the plaintiff happen to be an Ex-serviceman. An interim injunction restraining the defendant from using the trade mark `Sainik was granted by this Court on April 7, 1981 and continuous to operate. This was based on the advertisement in the issue of the aforesaid a newspaper. A similar injunction in respect of `Harsha was impliedly turned town.

Two questions arise for decision. One is whether the suit is liable to be stayed owing to the pendency of rectification proceedings and the second is, if the defendant should be restrained from the use of the two trade marks in relation to sewing machines as an interim measure and, alternatively, if any other appropriate order be made to do justice between the parties during the pendency of the suit.

As for the question of stay, the position appears to be quite simple. Both parties are registered owners of the identical trade marks. The registration in favour of one are under challenge by the other. Rectification proceedings in respect of the registration of the Trade Mark `Sainik in favour of the plaintiff were pending before the Registrar of Trade Marks, New Delhi, even before the institution of the suit and the factum of pendency is admitted in the plaint in terms. The proceedings for the rectification or registration in respect of `Harsha were filed subsequently and are pending in this Court. Plaintiff has also admittedly challenged and subsisting registration in favour of the defendants and these are pending in this Court. True, one of the rectification proceedings was filed subsequent to the institution of the suit but in view of sub-section (2) of S. 111 of the Trade and Merchandise Marks Act, 1958, once such proceedings are filed, for the purpose of stay the fact that they are subsequent to the suit would be immaterial. In view of the contest between the parties with regard to the validity of the registration of each other it is reasonable and proper that the suit is stayed u/s. 111 of the Act.

As for the interim restraint, the suit of the plaintiff prima facie appears to suffer from a fatal infirmity of lack of jurisdiction in respect of action regarding the trade mark `Sainik. The issue of the newspaper `Sainik Yugpurush, on the basis of which the interim order was issued, is admittedly a local Bikaner paper, having no circulation outside that territory. True, the newspaper may be obtained by any one outside the territory by post, as has been done by the plaintiff, for the purpose of present proceedings, but that, to my mind, would not be sufficient to give cause of action for the suit. Defendant had admittedly advertised his product in a local Bikaner newspaper and no deliberate act of the defendant could be said to be committed within this jurisdiction. If the newspaper and wider publication or was freely sold in other jurisdictions or if the defendant had given the insertion with the intention of a wider publicity, the position would have been different. On the existing material, prima facie, it would be doubtful if this court would have jurisdiction to deal with this cause of action.

That apart, there are other reasons which would disentitle the plaintiff to the injunction. Plaintiff had initiated criminal prosecution against the defendant, which had been pending since 1975. The protection by a restraint order was sought by the plaintiff after a lapse of almost six years from the initiation of those proceedings when the present suit was filed in March 1981. If the plaintiff really intended protection of his property in the trade marks, one would have expected such proceedings when the prosecution was launched or soon there after. If these proceedings could wait for a period of almost six years, there would appear to be no urgently for the kind of order that is sought by the plaintiff.

The conduct of the plaintiff in relation to the proceedings would also appear to disentitle the plaintiff to any protection plaintiff admittedly notified the defendant in Feb. 1975 with regard to the plaintiffs claim of trademark in `Sainik and alleged that the defendant was wrongly using the said mark in relation to his products. Soon thereafter, the plaintiff filed criminal prosecution in 1975, which is still pending. In the plaint, the plaintiff claimed that the plaintiff had been using the two marks since 1973 and that these marks were duly registered. The plaintiff, however, failed to five the dates of the registration. Pledged that "the defendants have recently started the manufacture and marketing to sewing machine under the identical trademark "Sainik" and "Harsha". The plaint was filed in March 1981. That the defendant has been using the mark `Sainik since before 1975 would appear to be obvious in view of the plaintiffs own notice of that year. The plaintiff, however, deliberately concealed the fact of the aforesaid notice and of the pendency of criminal proceedings since 1975 and the representation by the plaintiff in the plaint that defendants had "recently started" the manufacture and marketing of machines with the offending marks was obviously a deliberate mis-statement. I.A. 968/81 suffers from the same infirmity.

Even on the merits of the claim for an injunction, the most material factor is as to which of the two parties has been using the trademarks in question in relation to the good earlier than the other. The material on the record on this aspect of the matter would also not justify any interference with the use of the trademarks by the defendant. As for `Sainik the plaintiffs predecessor had got it registered in Sept. 1970 and it was assigned in favour of the plaintiff in Dec. 1974. The product of the plaintiff was approved by the Canteen Stores Department somewhere in Feb. 1975, apparently because plaintiff was an Ex-Serviceman. The plaintiff has been supplying to the Canteen Stores Department since 1974-75. Defendant, on the other hand, holds registration for Rajasthan and in the application for registration, defendant had clearly mentioned that he had been using the mark since 1969, when the defendant sought the registration for the State of Rajasthan. The defendant also claims to have a no objection letter from predecessor of the plaintiff to the effect that the predecessor of the plaintiff had not marketed sewing machines with the aforesaid mark prior to 1974. The plaintiffs notice to defendants on Feb. 7, 1975 was also on the basis that defendant has been using the mark for some time. It has clearly been pointed out above that defendant has Not marketed has produce under this trade mark within the jurisdiction or otherwise outside the State of Rajasthan and the mere publication of an advertisement in a Bikaner paper would not appear to give any cause of action to the plaintiff for the suit or to invoke the jurisdiction of this Court for the purpose.

As for `Harsha the plaintiffs registration is of the year 1975 and the plaintiff was apparently not using it in Feb. 1975 when the plaintiff served a notice on the defendant because the wrongful use of the trade mark `Harsha was not mentioned in the notice. That apart, defendants have placed on record not only the various newspapers in which they have been extensively advertising the mark but also the Bills for the period 1965 onwards which would appear to show that the defendants had been either manufacturing, marketing or dealing in sewing machines with this trade mark since 1965.

Lastly, from the documents filed by the plaintiffs it appears that the plaintiffs marketing of the sewing machines under one or the other of the sewing machines under one or the other of the trade marks was confined to the Canteen Stores Department, while the defendant have a wider, even though within the State of Rajasthan, for the machines bearing their rival trademarks. The real grievance the plaintiff, however, appears to be that the defendant has either made attempt to get his product approved by the Canteen Stores Department or was likely to do so in the near future so as to invade the citadel of the plaintiff, within the defence organisation, to which the plaintiff apparently lays a claim by virtue of being an Ex-serviceman and the Departments preference for an Ex-Serviceman is quite manifest in one of the letters of the Director General of Resettlement, placed on the file by the plaintiff by which is product was recommended for the Canteen Stores Department. It would, thus, appear that there would be very little apprehension of any confusion in the course of trade or any attempt to pass off the goods of the defendant as that of the plaintiff because, by and large, the plaintiff does not deal with the proverbial "unwary customer, who is likely to be confused. The dealing with the Canteen Stores Department are obviously based on prior approval of the Department and whether or not that Department adhere to the policy to give preference to an Ex-Servicemans venture over the business activity of others, there is little likelihood of any confusion for the Department would know who they are dealing with.

For all these reasons, I am of the view that no restraint would be justified on the facts and circumstances of this case. Interest of justice would be satisfied by a direction to the defendant to maintain regular account of the dealings in the sewing machines under any of the above trademarks. Defendant would file a quarterly statement of accounts in this Court.

Subject to the above direction, I.A. 968/81 fails and is hereby dismissed. The interim injunction granted earlier is vacated. I.A. 1794/81 succeeds and the proceedings in the suit are accordingly stayed. There would however, be no costs.