S.N. Sapra, J:

1. The present suit for perpetual injunction, infringement of trade mark, passing off and rendition of accounts has been filed by two plaintiffs, namely, Sarabhai International Limited and Ambalal Sarabhai Enterprises Limited.

2. In the plaint, it has been alleged that plaintiff No. 1 is a leading Indian Export House recognised by the Government of India and it is engaged in the export of drugs, pharmaceuticals and allied items, chemicals, dyestuffs & pigments, synthetic detergents, soaps, cosmetics, toiletries, laboratory chemicals, computer hardware and software, machinery and equipments, textiles, and are engaged in other services including designing, packaging & printing. Plaintiff No.1 has exported to various countries during the last 8 years the aforesaid goods to the tune of about 46.20 crores of which 7.24 crores (approximately) accounts for Drugs and pharmaceuticals alone. The name Sarabhai International Limited is well known for the last many years in the field of export of the aforesaid goods, and by virtue of huge exports it has acquired considerable good will amongst manufacturers and dealers as well both in India and abroad.

3. Plaintiff No. 2 is the owner of the trade style, trade name SARABHAI CHEMICALS and goodwill pertaining thereto in respect of medicinal, pharmaceutical and veterinary preparations by virtue of assignment deed dated 25th April, 1978. The trading style SARABHAI CHEMICALS has been used by plaintiff No. 2 and their predecessors in business and title for the last more than 30 years with respect to the aforesaid goods. The goods manufactured by plaintiff No. 2 are exported by and through plaintiff No. 1, as an associate company.

4. It is further alleged that plaintiff No. 2 is the proprietor of the following trade marks registered under the Trade and Merchandise Marks Act, 1958 (hereinafter called the Act):

“a) Trade mark containing the word SARA under No. 113071 in Class 5 as of 27-8-1945 in respect of pharmaceutical, veterinary and sanitary substances; infants and invalids foods; plasters, material for surgical bandaging; material for stopping teeth; dental wax;: disinfectants, preparation for killing weeds and dest roying vermin.

Trade mark containing the word SARA under No. 113072 in Class 1 as of 27-8-1945 in respect of chemical products used in industry, science, photography, agriculture, horticulture, forestry, manures, (natural and artificial); fire extinguishing compositions; tempering substances and chemical substances for preserving food stuffs; tanning substances; adhesive substances used in industry.”

The registrations of the aforesaid trade marks have been renewed from time to time and the registration is subsisting and valid.

5. Plaintiff No. 2 is also the proprietor of trade mark SARABHAI per se and SARABHAI emblems. At the time of filing of the suit it was alleged that the trade mark SARABHAI and SARABAI emblems were pending for registration under No. 310659B, 310658B as of 9-12-1975 and No. 361884 as of 15-5-1980 in respect of medicinal, pharmaceutical and veterinary preparations in Class 5 under the Act.

6. However, during the pendency of the suit these trade marks have been registered vide aforesaid numbers. According to plaintiff No.2, the trade mark Nos. 310658B, 310659B and 361884 are being used since March, 1977. The sales turnover of the goods under the marks SARABHAI and SARABHAI emblems during the period March, 1977 to June, 1981 is approximately Rs. 223.34 crores. The expenditure incurred to make the products bearing these trade marks known to Doctors, chemists, general public and all other concerned is of the order of Rs. 17.38 crores. It is further alleged that plaintiff No. 2 and his predecessors in business and title, manufactured, sold and offered for sale the above mentioned goods during the last 30 years under the trade name/trading style SARABHAI CHEMICALS to the tune of Rs. 549.78 crores. The present annual sale is approximately Rs. 56.56 crores. The plaintiffs have further stated in the plaint that by virtue of long, continuous and extensive user, huge sales and expenditure incurred on the trading style SARABHAI CHEMICALS and the trade marks SARA, SARABHAI AND SARABHAI emblems have acquired very wide reputation, goodwill and name all over India and abroad in respect of pharmaceutical, medicinal and veterinary preparations and the said trading style and trade marks are exclusively associated with the plaintiff and none else.

7. It was only on June 20, 1981, plaintiff No. 2 came to know of the existence of the defendant i. e. Sara Exports International and their alleged activities when a letter dated June 14, 1981 from defendant was received by plaintiff No. 2. In the letter defendant stated that they were having connections with eastern markets importing drugs and pharmaceuticals. There after, the defendant was called upon to discontinue with use of the word SARA as part of the trading style Sara Exports International. This was followed by another letter sent by registered AD post. The defendant did reply to the aforesaid letters but refused to accept the suggestions made by plaintiffs. Thereafter when defendant was again asked to discontinue with the use of the trade name SARA but no reply was given.

8. Vide order dated September 21, 1982 ex prate temporary injunction was granted in terms of prayer as contained in I. A. 375 of 1982 against the defendant.

9. Defendant filed written statement in suit. In the written statement defendant took various preliminary objections. In the written statement, it was alleged that name of the daughter of proprietor of defendant was “SARA” and on account of this name defendant no. 1 adopted the word “SARA” in the trading style. It was further alleged that the trading name SARA Export International was duly registered and none of the plaintiffs had raised any objection against the registration of the trade mark/trading style i.e. Sara Exports International, therefore, the plaintiffs were estopped to raise any objection. It was further alleged in the written statement that trading style/trading mark/trading emblems of the plaintiff are “SARABHAI”, which is absolutely distinguishable and different from the word “SARA”.

10 On the pleadings of the parties on September 15, 1983 the following issues were framed:

“1. Whether the plaint has been signed, verified and instituted by a duly authorized person

Whether plaintiff No. 2 is the registered proprietor of the word/mark SARA under numbers 113071 and 113072, if so to what effect

Whether plaintiffs are the proprietors of trade mark SARABHAI, if so to what effect

Whether the defendants use of the word/mark SARA in their trading style is an infringement of plaintiff No. 2s registered trade mark SARA

Whether the defendants trading style “SARA Export International” is deceptively similar to the plaintiff No. 1s trading style “Sarabhai International” and plaintiff No.2s trading style “Sarabhai Chemicals”

Whether the defendants by using the trading style “Sara International” are passing off their goods and business and are likely to pass off their goods and business as those of the plaintiffs

Whether trade name of the defendant is registered under any law, if so to what effect

Relief.”

11. Vide order dated November 5, 1984, M. K. Chawla, J. allowed the interim application I. A. 3475 of 1982 and confirmed the ad interim injunction already granted in favour of the plaintiff by order dated September 21, 1982. On several dates none appeared on behalf of the defendant. Vide order dated November 18, 1985, M. K. Chawla, J. observed that since November 15, 1984 defendant, had not cared to file the list of witnesses inspite of eight opportunities. Even nobody was present and, therefore, it was held that the provision of Order 17 Rule 3 CPC could be invoked.

12. Evidence of three witnesses of the plaintiffs was recorded on Commission. PW1. Shri J. S. Kothari proved various documents, which were exhibited as Exts. PW1/1 to PW1/49. PW2, Shri S. M. Dongre was examined and he proved documents, which were exhibited as PW2/1 to PW2/8. PW3, Shri. H. A. Shah was examined and he proved the documents Exts. PW3/1 to PW3/14.

13. ISSUE NO. 1.

Shri S. M. Dongre PW 2 has deposed that he has signed the plaint on behalf of plaintiffs 1 and 2 in his capacity as he was the constituted attorney of the plaintiffs. In his statement, he has further deposed that he identifies the signatures of one Mr. J. S. Kothari and Mr. K. H. Bhatt who have also signed the plaint. He has proved two power of attorneys which are Exts. PW2/2 and PW2/3. Therefore, issue No. 1 is decided in favour of plaintiffs and I hold that the plaint has been signed and verified and the suit has been instituted by duly authorized persons.

14. ISSUE NO. 2

Plaintiffs have filed the legal proceedings certificates, which are Ext. PW2/4 and PW2/5 with regard to the registration in respect of the word “SARA” under Nos. 113071 in Class 5 as of 27-8-1945 and under No. 113072 in Class I as of 27-8-1945. Hence, Plaintiffs have proved that they are the proprietors of the trade marks containing the word “SARA” under 113071 in Class 5 as of 27-8-1945 in respect of the goods mentioned therein and 113072 in Class 1 as of 27-8-1945 in respect of the goods mentioned therein. Issue No. 2 is decided in favour of the plaintiffs.

15. ISSUE NO. 3.

Exts. PW2/6, PW2/7 and PW2/8 are the Legal Proceedings Certificates pertaining to three trade marks Nos 310658-B, 310659-B and 361084. Issue No. 3 stands proved in favour of the plaintiff and plaintiffs are the proprietors of the trade marks SARABHAI & SARABHAI emblem. These trade marks were registered during the pendency of the suit.

16. Issue Nos. 4, 5 and 6

Mr. Anoop Singh, learned counsel for plaintiffs, contends that there are common fields of activities in respect of goods of the parties. Thus, there is likelihood of great confusion between the business activities and goods of the parties in India and abroad. He further contends that in the international markets it is likely to be taken that the goods exported by defendant are coming from the plaintiffs, and are the manufacture of plaintiff no. 2 and exported by any of the plaintiffs. He further contends that defendants adoption of the trading style SARA EXPORTS INTERNATIONAL and their offering for sale, selling, exporting and advertising goods and/or business under the said trading style/trade mark is fraudulent and is calculated to deceive and create confusion among the trade and general public in India and abroad and give an impression that defendant is an organisation, branch or a division of plaintiffs or that they have some connection with plaintiffs which in fact is not true. He further submits that the use of the word SARA is a part of defendants trading style SARA EXPORT INTERNATIONAL is an infringement of plaintiff N.2s registered trade mark Nos. 113071 and 113072 containing the word SARA as essential feature thereof. It includes the main portion of the registered trade mark of plaintiffs.

17. PW1, Shri J.S. Kothari is one of the Directors of plaintiff No.1 and he has stated that he has travelled many times in India and abroad in connection with the activities of Sarabhai International Ltd, Ambalal Sarabhai Enterprises Limited. He has deposed that Sara groups of companies are engaged in a number of industrial business and research activities in many technological fields and many of these activities were sponsored by Shri Ambalal Sarabhai during his long business career which dates back to post World War I era. He has also stated that for the last 10 years his company has exported goods worth about Rs.50 crores to various countries. According to him, by virtue of its business policy and exports during the last several years the name SARABHAI has acquired valuable reputation and goodwill amongst the concerned people in India and also among importers/consumers in several countries of the World. Many of the goods exported are exported under the trade marks Sarabhai/Sarabhai emblem/Sara and/or other product trade concerned where the goods are manufactured by Sarabhai Chemicals Sarabhai Machinery Divisions of Ambalal Sarabhai Enterprises Limited. The trading style “Sarabhai Chemicals” is also used prominently for the goods manufactured by it and exported to various countries. He has deposed that the names Sarabhai Chemicals and trade marks and emblems SARA/SARABHAI which are extensively used on products manufactured by Sarabhai Chemical division of plaintiff No. 2 are known to many doctors, chemists and general public all over India and abroad. He has proved that it was only in June, 1981 that the existence of defendant came to the notice of the plaintiffs through a letter dated June 16, 1981. PW 2 Shri, S.M. Dongre is the Legal Executive of plaintiff No. 1. PW3, Shri H.A. Shah is a qualified chartered accountant and is Accounts Officer in the company, plaintiff No.2. He has deposed that he collected particulars of export turnover of plaintiff No.2 for the past years relating to Sarabhai International Limited, plaintiff No.1. The information is Ext. PW1/2. He has also proved the particulars of the sales turnover promotion expenses relating to Sarabhai Chemicals, division of plaintiff No.2 and the same have been exhibited as PW3/1 and PW3/2. He has proved further documents also.

18. Learned counsel for the plaintiffs has placed reliance on the judgements in case Rawel Vs. Duke Enterprises, R. L. R. 1975 (p-440) Suit No. 163/74; Ellora Industries v. Banarsi Dass Goela, A.I.R. 1980 Delhi page 254, M/s. K.G. Khosla Compressors Ltd. v. Khosla Extrakton Ltd. and ors., AIR 1986 Delhi page 181, and Hindustan Radiators Co. v. Hindustan Radiators Ltd.; D.L.T. 1987 Vol. 31, Page 271. In case A.I.R. 1980 Delhi , 254 (supra) M/s Banarsi Dass and Brothers were the registered proprietors of trade mark Ellora in Class 14 as of the date August 11, 1956 in respect of watches, time pieces, clocks etc. The objection of plaintiff was to the use of the name Ellore Industries with Ellora as the trade mark by defendant. It was held as under:-

“Take the present case, the words “Ellora Industries” which is the trading name of the defendants is likely to mislead the public as to the source of manufacture and to create a likelihood that customer of the plaintiffs would be diverted to the defendants. In a passing –off action” all that need be proved is that the defendants goods are so marked, made up or described by them as to be calculated to mislead ordinary purchasers and to lead them to mistake the defendants goods for those of the plaintiffs”. It is the tendency to mislead or confuse that thus forms the gist of action; and the plaintiff need not establish fraud nor that any one was actually deceived, or that he actually suffered damage. The tort is thus (like libel) actionable per se. Indeed the forms of passing off, like the forms of nuisances, are infinite. As Salmond puts it:

“The gist of the conception of passing off is that the goods are in effect telling a falsehood about themselves, are saying something about themselves which is calculated to mislead. The law on this matter is designed to protect traders against that form of unfair competition which consists in acquiring for oneself, by means of false or misleading devices the benefit of the reputation already achieved by rival trader is (Law of Torts 17th Edn. P. 401) Winfield says:

“The law of passing off arose to prevent unfair trading and protects the property rights of a trader in his goodwill…”

(Tort 9th Edn. P. 485)

“The function of the trade marks is to identify the source of manufacture of goods. It is an indicia of origin. With the expansion of markets and the development of large-scale advertising, trade marks began to perform the additional function of advertising and selling device. In the market the chief value of the trade mark is its power to stimulate sales. In law, the fundamental theory upon which the interest in the trade mark is protected is that a trade mark identifies the goods coming from a particular source, and that in infringing designation tends to divert customer from that source by falsely representing that other goods come from it. This at any rate is the theory of Ss. 28 and 29 of the Act. Thus “Ellora Industries” is an “infringing designation”, a misleading name and its use must be restrained by injunction so that the competitor is prohibited from gaining an unfair advantage by confusing potential customers. “The tendency of law, both legislative and common, has been in the direction of enforcing increasingly higher standards of fairness or commercial morality in trade.”

I am in respectful agreement with judgment of Avadh Behari Rohtagi, J.

19. There is sufficient documentary evidence on record to establish that the trading style Sarabhai Chemicals and the trade marks SARA and SARABHAI emblems have acquired very wide reputation, goodwill and name all over India and abroad in respect of medicinal, pharmaceutical and veterinary preprations and said trading style and trade marks are exclusively associated with the plaintiffs and none else. The aforesaid articles bearing he trade mark SARA and SARABHAI denotes and connotes the goods of the plaintiffs and no one else, and is an indication of the source of manufacture as such. I am of the view that there are common fields of activities in respect of the similar goods of plaintiffs and defendant and the adoption of trading style Sara Exports International by the defendant and offering for sale, export and advertising the goods under the aforesaid trading style, that is Sara Exports International is calculated to deceive and create confusion amongst the doctors, chemists and the general public in India and the Importers and general public in India and the Importers and general public abroad. The use of the trading style Sara Exports International creates an impression in the mind of the general public, dealers and importers that defendant may be an organization or a Division or Branch of the plaintiffs. Plaintiffs have produced not only documentary evidence but the trustworthy evidence or record.

20. I thus hold that the use by the defendant of the word/mark SARA in their trading style is an infringement of the plaintiff No.2s registered mark SARA. I further hold that the use of the trading style Sara Exports International is deceptively similar to plaintiff No. 1s trading style Sarabhai International and plaintiff No. 2s trading style Sarabhai Chemicals. I am of the view that the defendants trading style i.e. Sara Exports International is deceptively similar to the trading style of the plaintiffs Sarabhai International and Sarabhai Chemicals. I am of the view that there is a deceptive similarity of the trading name Sara Exports International with the name Sarabhai International Ltd. of plaintiff No.1. On account of the deceptive trading style Sara Exports International which includes the main position of registered trade mark of the plaintiff, the defendant in passing off, enabling others or causing and assisting other to pass off their goods and/or business as the goods and/or business of the plaintiffs No.1 and 2.

21. For the reasons stated above, it is held that there is an infringement of the registered trade marks of plaintiffs by the defendant by adopting the trading style Sara Exports International. In addition, defendant is also guilty of tort of passing off. Issue Nos. 4, 5 and 6 are decided in favour of plaintiffs and against defendant.

22. ISSUE NO.7

Defendant has not led any evidence to prove the registration. Even otherwise, this is not a relevant factor in view of the facts and circumstances of the present case. Issue No. 7 is decided against the defendant.

23. ISSUE NO.8

The suit of the plaintiffs is decreed as under: -

(a) decree for permanent injunction restraining the defendant by themselves, their servants, agents, stockists and all persons on their behalf from using the word Sara as part of their trading style/trade name Sara Exports International which is deceptively similar to trading style Sarabhai International Limited of plaintiff No.1 and the trading style Sarabhai Chemicals of plaintiff No.2 and which includes registered trade mark SARA of plaintiff No.2 or part of their trade mark SARABHAI;

(b) A decree for permanent injunction restraining the defendant themselves, their agents, servants, dealers, importers and all other persons acting for and on their behalf from infringing by using the trade mark SARA as part of defendants trading style/trading name SARA EXPORTS INTERNATIONAL in respect of goods for which plaintiff No. 2 is the registered proprietor of the trade mark SARA under No. 113071 in Class 5 and 113072 in Class 1;

(c) A decree for permanent injunction restraining the defendant themselves, their servants, agents, stockists and all other persons on their behalf from passing off or enabling others and causing or assisting others to pass off their business and/or goods as and for business and/or goods of the plaintiffs by using the trading style Sara Exports International or any other trading style/trade name in which the word SARA forms a part. The defendant is also directed to deliver up offending wrapper, cartons, labels, stationery, literature, dies, blocks and all other material bearing the trading style Sara Exports International for destruction.

24. Plaintiffs are also entitled to costs of the suit.