S.A. BOBDE, J.

1. These notice of motions are taken out in what might be described as cross suits. The parties to the suit are not common, but the case in respect of which the injunctions are claimed in both the suits are the same i.e. a medicinal product called MILICAL-12. The plaintiffs in both the suits have taken out these motions for an injunction in accordance with the prayers in the main suits. In Suit No.1603 of 2001, Mililab Private Limited has sought an injunction against the defendant i.e. Glemark Pharmaceuticals Ltd. from using the trade mark MILICAL and for passing it off as theirs. In Suit No.4901 of 2000, the defendant in Suit No.1603 of 2001 i.e. Glenmark Pharmaceuticals Ltd. has made a prayer that the threats given by the defendant therein i.e. Milichem Laboratories should be treated as groundless threats and for an injunction restraining Milichem Laboratories from making such threats.

SUIT NO. 1603 OF 2002 :

2.In this suit filed by Mililab Private Ltd., inter alia, for an injunction restraining the defendants from passing off their goods under the impugned trade mark "MILICAL-12", the plaintiff has taken out the Notice of Motion for a temporary injunction restraining the defendants Genmark Pharmaceuticals Ltd. from passing off their goods MILICAL-12 so as to pass off the suit goods as those of Mililab Private Ltd.

3.Mililab Private Ltd. claims that it has been manufacturing MILICAL- 12 through Milichem Laboratories. Mililab Private Ltd. claims to be the sole proprietor of Milichem Laboratories. They claim that they have been continuously using the mark since at least the year 1985 and that it was honestly conceived and adopted by them. Mililab Private Ltd. realised that certain licences under the Drugs and Cosmetics Act, 1940 under which Milichem Laboratories was permitted to manufacture "MILICAL-12". Mililab Private Ltd., therefore, claims that it has been manufacturing "MILICAL-12" through Milichem Laboratories since a long time. Mililab Private Limited claims that it got "MILICAL-12" manufactured for the period 1985-90 through Lister Laboratories; then from 1989 to 1994 from Polar Pharmaceuticals Private Ltd. From 1993 to 1995, they have got MILICAL-12 manufactured through Almed Lab. Private Ltd. It is on this background that an injunction has been sought on the basis of prior adoption.

4.Now having regard to the fact that the trade mark in question is not only similar but identical, it is not necessary to go into the question whether it would amount to passing off, if other conditions are satisfied.

5.The issue in this case arises out of the defence raised by Glenmark. According to Glenmark Pharmaceuticals Ltd., they obtained rights under the deed of assignment dated 19-4-2000 from Almed Lab. Private Limited. The deed at Exh. G to the affidavit-in-reply contains a clear recital that the assignee i.e. Almed Lab Pvt. Ltd. is the absolute owner in India of the trade mark MILICAL- 12 which is pending registration. The further recital shows that the assigner has been continuously using the trade mark since 1995 and on consideration of a sum of Rs. 2,40,000/- paid by Glenmark, all rights, title and interest in the trade mark "MILICAL" together with goodwill is assigned to Glenmark. There are clear representations that Almed Lab. Private Limited has absolute authority to make the assignment. The deed of assignment is registered and notarised. The trade mark in question is MILICAL-12.

6.Having regard to the fact that the assignment is by Almed Lab. Private Ltd., Mr. Soni, learned Counsel for Mililab Pvt Ltd., contended that the assignment is of no consequence vis a vis the plaintiff. The plaintiff Mililab Private Ltd. is not bound by the assignment. It continues to remain the owner of the trade mark MILICAL-12 over which it has established use since about the year 1985. This argument, if prima facie, true undoubtedly deserves to be accepted. However, the real facts do not support this contention at all. There are three entities involved:

(i) Almed Lab. Private Limited which assigns the mark for a consideration of Rs. 2,40,000/- to Glenmark Pharmaceuticals Limited;

(ii) Mililab Private Ltd., the sole proprietor of Milichem Laboratories, marketing agents, which have been keeping the product manufactured from various persons that the two directors, viz., Bhavesh Patel and Pinakin Patel are directors common to Almed Lab. Private Ltd., who is joined as a defendant and the plaintiff Mililab Private Ltd.

(iii) Milichem Laboratories owned by Mililab Private Ltd.

It is, therefore, clear that as a matter of fact, the plea that Mililab Private Ltd whose activities are directed and controlled by Bhavesh Patel and Pinakin Patel ought not to be allowed to ignore the deed of assignment and sue as if it were through the entity of Mililab and seek directly to undo what has been done in another capacity through another entity. I am conscious of the fact that this amounts to lifting the corporate veil which undoubtedly the Court is entitled to do where the action appears to be fraudulent. I am of opinion that Glenmark which had acquired the rights in respect of the trade mark from Almed Lab. Private Ltd. is entitled to prima facie allege fraud and deceit when being sued by Mililab Private Limited which has two directors who are common. Both the companies are private companies and in the nature of a partnership firm registered under the Companies Act which are registered under a statute. It is true that the finding of fraud cannot be easily accepted at the prima facie stage, but having regard to the facts referred to above, I find that the facts are sufficient to disentitle the plaintiff to an equitable relief and injunction. Interestingly, one of the Directors Bhavesh Patel is also a partner of Milichem Laboratories i.e. the marketing agents who claims to have got the product MILICAL manufactured from various persons.

7.Mr. Soni, learned Counsel for the defendants, however, argued that there is material on record to show that the two Directors Bhavesh Patil and Pinakin Patel have resigned from the company in the year 1995. The learned Counsel relied on form 32 which is said to have been submitted to the Registrar of Companies in the name of Anvee Impex Pvt. Ltd. which is admittedly the former name of the same company Almed Lab Private Ltd. for the year 1999-2000. This annual return clearly shows the names of the aforesaid directors Bhavesh Patil and Pinakin Patel as Directors of the company. Conspicuously the field meant for entering the date of cessation as Director is blank. Prima facie, it is obvious that these two persons were Directors of the company in the year 2000. This Prima facie leads to the conclusion that when the assignment was made of the trade mark MILICAL- 12 in favour of Glenmark Pharmaceuticals Ltd., these two Directors were also on the Board of the company and have reason why the suit has been filed by Mililab Private Ltd. of which they are admittedly directors for an injunction restraining the defendants from using the trade mark "MILICAL-12". This prima facie view appears sufficient to dismiss the plaintiffs motion for an injunction against the defendants from passing off their goods as those of the plaintiff. I am of view that it would be highly inequitable to allow the same set of persons to assign the trade mark by a formal deed, in consideration of sum of money and then allow the same set of persons to obtain an injunction against its use on the ground of passing off for another name.

8.Even apart from this, I am of view that the plaintiff is not entitled to an injunction on the principle underlying section 27 of the Sales of Goods Act which reads as follows :

"27. Sale by person not the owner - Subject to the provisions of this Act and of any other law for the time being in force, where goods are sold by a person who is not the owner thereof and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the sellers authority to sell;

Provided that, where a mercantile agent is, with the consent of the owner, in possession of the goods or of a document of title to the goods, any sale made by him, when acting in the ordinary course of business of a mercantile agent, shall be as valid as if he were expressly authorised by the owner of the goods to make the same; provided that the buyer acts in good faith and has not at the time of the contract of sale notice that the seller has no authority to sell."

Therefore, even if Almed Lab. Private Limited and the present plaintiff Mililab Private Limited are treated as separate entities and Mililab Private Limited is treated as owner of the trade mark, it is clear that the owner must be taken by its conduct of denying the sellers authority to sell. The deed of assignment was executed by Almed Lab. Private Limited in April 2000. It could not have been without the knowledge of the owner Mililab Private Limited who did not object to it till the notice of October 2001. This period of time when Mililab Private Ltd. did not take any action clearly suggests the knowledge of the owner i.e. Mililab Private Ltd. and their acquiescence till this notice was issued and, in fact, till the suit is filed in May 2001. To my mind, this conduct precludes the owner from doing the sellers authority to sell and, therefore, the injunction must be refused.

Suit No.3405 of 2000:

9.As stated earlier, in this suit the plaintiff has sought an injunction restraining the defendants from communicating groundless threats and they seek protection of section 120 of the Trade an Merchandise Marks Act, 1958. By the Notice of Motion, the plaintiff i.e. Glenmark Pharmaceuticals Ltd. seeks the interim relief of an injunction restraining the defendants from issuing groundless or unjustifiable threats in relation to the use of trade marks MILICAL and MILICAL-12. The plaintiffs product MILICAL shows that it has been manufactured by Glenmark Pharmaceuticals. The application for registration of the trade mark MILICAL dated 31-1-2000 is pending. As stated earlier, the plaintiff claims an assignment under the assignment deed dated 19-4-2000 whereunder Almed Lab. Private Limited has assigned the trade mark MILICAN. The plaintiff thereafter received a notice at Exh. "F" dated 10-10-2000 from Milichem Laboratories which is owned by Mililab Private Ltd. By this notice, Milichem Laboratories has called upon the plaintiff to cease and desist from using, printing, stamping, screening, manufacturing, selling or otherwise dealing in relation to trade mark MILICAL and to deliver the said product for destruction. It appears that the plaintiff replied by letter dated 25-10-2000 and sought certain documents, including the application for registration of the trade mark and a copy of the disclosure for manufacture and sale of the product MILICAL. This has been replied to by Milichem Laboratories who have refused compliance with the plaintiffs request and have reiterated their demand. The demand is set out in their notice dated 10-10-2000. Section 120 of the Trade and Merchandise Marks Act, 1958 reads as follows:

"120. Groundless threats of legal proceedings.

(1) Where a person, by means of circulars, advertisements or otherwise, threatens a person with an action or proceeding for infringement of a trade mark which is registered, or alleged by the first-mentioned person to be registered, or with some other like proceeding, a person aggrieved may, whether the person making the threats is or is not the registered proprietor or the registered user of the trade mark, bring a suit against the first-mentioned person and may obtain a declaration to the effect that the threats are unjustifiable, and an injunction against the continuance of the threats, and may recover such damages (if any) as he has sustained, unless the first-mentioned person satisfies the Court that the trade mark is registered and that the acts in respect of which the proceedings were threatened constitute, or, if done, would constitute, an infringement of the trade mark;

(2) The last preceding sub-section does not apply if the registered proprietor of the trade mark, or a registered user acting in pursuance of sub-section (1) of section 51, with due diligence commences and prosecutes an action against the person threatened for infringement of the trade mark.

(3) Nothing in this section shall render a legal practitioner or a registered trade marks agent liable to an action under this section in respect of an act done by him in his professional capacity on behalf of a client.

(4) A suit under sub-section (1) shall not be instituted in any Court inferior to a District Court."

In view of my finding above, the plaintiff is entitled prima facie under the assignment to use the trade mark MILICAL, the assignment being by a purported owner of the trade mark, I am of view that Glenmark Pharmaceuticals Ltd. is entitled to protection under section 120 of the Trade and Merchandise Marks Act. The threat is not based prima facie on any legal right and moreover, as discussed above, Milichem Laboratories, which is merely a proprietary concern of the plaintiff Mililab Private Ltd. is not entitled to any right higher than that might vest in Mililab. In the circumstances, threats are wrongful and groundless threats. Therefore, there shall be an injunction in terms of prayer Clause (a) of the Motion.

10.Accordingly, Notice of Motion No.1110 of 2001 in Suit No.1603 of 2001 is dismissed. Notice of Motion No.3405 of 2000 in Suit No.4901 of 2000 is allowed in terms of prayer Clause (a).