Madan B. Lokur.

1. Both the parties before us are bona fide concurrent users of the same trade mark Star Bazaar" with the Appellant being the prior user. The Respondent has agreed to use "A Tata Enterprise" in conjunction with "Star Bazaar" so that the customers of the Appellant are not misled. The question before us is whether, notwithstanding this, the Appellant is entitled to an injunction restraining the Respondent from using the trade mark "Star Bazaar". In our opinion, this question must be answered in the negative.

2. The Appellant is aggrieved by an order dated 22nd October, 2009 passed by a learned Single Judge in IA No. 13278/2008 (under Order XXXIX Rules 1 and 2 of the CPC) and IA No. 3465/2009 (under Order XXXIX Rule 4 of the CPC) in CS(OS) No. 2296/2008. By the impugned order, the learned Single Judge declined to confirm the ex parte injunction granted in favour of the Appellant.

3. The Appellant was incorporated on or about 12th March, 2003 and commenced business soon thereafter in Kailash Colony Market, New Delhi by opening a retail departmental store under the name and style of "Star Bazaar". According to the Appellant, it has only one such departmental store, which is located in South Delhi and at no other place in the country.

4. The Appellant says that it has acquired considerable goodwill on account of its sales, marketing policy, efficiency etc. It has also had huge sales over the last few years.

5. Sometime in August 2008, one of the Directors of the Appellant was on a business trip to Mumbai when he came across an advertisement in the local edition of a national newspaper to the effect that the Respondent is running a store in Andheri (West) in Mumbai, in the name and style of "Star Bazaar". It appeared from a reading of the advertisement that the Respondent was carrying on the same business as that of the Appellant. It is further stated that the Appellant came to know through this advertisement that the Respondent is intending to open up a retail departmental store in Delhi in the name of "Star Bazaar". It is, under these circumstances, that the Appellant filed a suit in this Court for an order restraining the Respondent from using the name "Star Bazaar" and trying to pass off its goods as those of the Appellant.

6. It appears from the record that the Respondent was earlier carrying on business under the name and style of "Star India Bazaar" and had departmental stores in Ahmedabad and Mumbai and was planning to open a similar store in Bengaluru and Delhi. It was carrying on business in the name of "Star India Bazaar" from 2004 till sometime in September 2007 after which, it changed the name of its retail departmental store from "Star India Bazaar" to "Star Bazaar".

7. On these broad facts, the Appellant contended before the learned Single Judge (and this contention was reiterated before us) that it was using the trademark "Star Bazaar" for its retail departmental store prior to its use by the Respondent and therefore it was entitled to an injunction against the Respondent from using the trademark "Star Bazaar" in respect of its retail stores anywhere in the country and particularly in Delhi/NCR of Delhi.

8. The learned Single Judge declined to grant an injunction after hearing the parties on the ground, inter alia, that both of them were bona fide concurrent users of the mark "Star Bazaar" and that there was nothing to show that the Respondent had wanted to cash in on the goodwill of the Appellant and pass off its retail store and goods as those of the Appellant.

9. Learned counsel for the Respondent stated before us, and which is recorded in our order dated 15th February, 2007 (after hearing concluded in the case) that the Respondent is prepared to write "A Tata Enterprise" or similar words above "Star Bazaar" in respect of the store proposed to be opened in Delhi. It was submitted that this should allay any apprehension that the Appellant may have of the Respondent trying to pass off its store or goods as those of the Appellant and also to make it clear that the Appellant and the Respondent were two distinct entities having no connection with each other. By use of the expression "A Tata Enterprise", the Respondent would be distinguishing itself from the Appellant so that there is no confusion in the mind of anybody that "Star Bazaar" of the Respondent is similar to or connected with the "Star Bazaar" of the Appellant. Since this statement does not meet the requirements of the Appellant, we proceed to deliberate on the issues raised.

10. It was submitted on merits by learned counsel for the Appellant that it has been held time and again that in a suit for passing off, the mere fact that a defendant had a registered trademark would be of no consequence. What is of importance is that a plaintiff should be able to establish prior use of the mark, which would enable it to obtain an injunction against the defendant. In support of this submission, reliance was placed on Century Traders v. Roshan Lal Duggar & Co. and others, AIR 1978 Delhi 250 : PTC (Suppl)(1) 720(Del)(DB). Reliance was placed particularly on paragraph 14 of the decision, the relevant extract of which reads as follows:-

"Thus, the law is pretty well settled that in order to succeed at this stage the appellant had to establish user of the aforesaid mark prior in point of time than the impugned user by the respondents. The registration of the said mark or similar mark prior in point of time to user by the appellant is irrelevant in an action for passing off and the mere presence of the mark in the register maintained by the trade mark registry did not prove its user by the persons in whose name the mark was registered and was irrelevant for the purposes of deciding the application for interim injunction unless evidence had been led or was available of user of the registered trade marks."

11. Reference was also made to M/s. Satyam Infoway Ltd. v. M/s. Sifynet Solutions Pvt. Ltd., AIR 2004 SC 3540 [LQ/SC/2004/690] : 2004 (28) PTC 566 (SC) [LQ/SC/2004/690] . In paragraphs 13 to 16 of the Report, the Supreme Court noted the principles of trademark law in relation to passing off and observed that there are three important elements that need to be taken into consideration. They are:

(i) Prior use, that is to say who was the first user of the trademark. It is not essential for a plaintiff to prove long user but the volume of sales and extent of advertisement would be important in this regard.

(ii) The plaintiff must establish misrepresentation by the defendant to the public. In other words, it must be established that there is likelihood of confusion between the two trademarks in the mind of the public.

(iii) The loss or the likelihood of loss that may be caused to a plaintiff, that is to say that use of the same or similar marks may lead to a diversion of customers or users.

12. Reference was also made by learned counsel for the Appellant to Laxmikant V. Patel v. Chetanbhat Shah & Anr., 2002 (24) PTC 1 (SC). In paragraph 10 of the Report, the Supreme Court noted that honesty and fair play are, and ought to be, the basic policies in the world of business and that when a person adopts or intends to adopt a name in connection with his business or services which already belongs to someone else, it results in confusion and has the propensity of diverting the customers and clients of someone else to himself thereby resulting in injury. Paragraph 10 of the Report, which is material for our purpose, reads as follows: -

"10. A person may sell his goods or deliver his services such as in case of a profession under a trading name or style. With the lapse of time such business or services associated with a person acquire a reputation or goodwill which becomes a property which is protected by courts. A competitor initiating sale of goods or services in the same name or by imitating that name results in injury to the business of one who has the property in that name. the law does not permit any one to carry on his business in such a way as would persuade the customers or clients in believing that the goods or services belonging to someone else are his or are associated therewith. It does not matter whether the latter person does so fraudulently or otherwise. The reasons are two. Firstly, honesty and fair play, are and ought to be, the basic policies in the world of business. Secondly, when a person adopts or intends to adopt a name in connection with his business or services which already belongs to someone else it results in confusion and has propensity of diverting the customers and clients of someone else to himself and thereby resulting in injury."

13. In the same decision, reference is made to Christopher Wadlow - Law of Passing Off (1995 Edition, at 0.3.06) that a plaintiff does not have to prove actual damage in order to succeed in an action for passing off - likelihood of damage is sufficient.

14. It may be mentioned, en passant, that learned counsel for the Respondent also referred to Laxmikant V. Patel particularly paragraph 17 thereof with regard to the principles on which interference and exercise of discretion in the matter of grant of temporary injunction should be exercised. He referred to the following passage from paragraph 17 of the Report which reads as follows:-

"17. We are conscious of the law that this Court would not ordinarily interfere with the exercise of discretion in the matter of grant of temporary injunction by the High Court and the Trial Court and substitute its own discretion therefor except where the discretion has been shown to have been exercised arbitrarily or capriciously or perversely or where the order of the Court under scrutiny ignores the settled principles of law regulating grant or refusal of interlocutory injunction. An appeal against exercise of discretion is said to be an appeal on principal. Appellate court will not reassess the material and seek to reach a conclusion different from the one reached by the court below solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the Trial Court reasonably and in a judicial manner the fact that the appellate court valid have taken a different view may not justify interference with the Trial Courts exercise of discretion {(see Wander Ltd. v. Antox India Pvt. Ltd., 1990 (Supp) SCC 727 : 1991 PTC 1(SC) and N.R. Dongre v. Whirlpool Corporation and another, (1996) 5 SCC 714 [LQ/SC/1996/1396] : 1996 (16) PTC 583 (SC))] [LQ/SC/1996/1396] "

15. Finally, a reference was made by the learned counsel for the Appellant to M/s. L.D. Malhotra Industries v. M/s. Ropi Industries, ILR (1976) 1 Delhi 278 : PTC (Suppl)(2) 564(Del). We are not separately adverting to this decision because it has been considered in Century Traders.

16. Learned counsel for the Respondent on the other hand, referred to Wander Ltd. v. Antox India (P) Ltd., (1990) Supp SCC 727 : 1991 PTC 1(SC) to submit that the principles for the grant of an injunction in respect of a running business are different from the principles for the grant of an injunction in respect of a business that is yet to start. He referred to the following passage in paragraph 9 of the Report:

"The interlocutory remedy is intended to preserve in status quo, the rights of parties which may appear on a prima facie case. The court also, in restraining a defendant from exercising what he considers his legal right but what the plaintiff would like to be prevented, puts into the scales, as a relevant consideration whether the defendant has yet to commence his enterprise or whether he has already been doing so in which latter case considerations somewhat different from those that apply to a case where the defendant is yet to commence his enterprise, are attracted."

17. Reaffirming his submission (based on Laxmikant V. Patel) learned counsel for the Respondent cited the following passage from Wander (paragraph 14 of the Report) to contend that the discretion exercised by the learned Single Judge should not ordinarily be interfered with:

"The appeals before the Division Bench were against the exercise of discretion by the Single Judge. In such appeals, the appellate court will not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. Appellate court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by that court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial courts exercise of discretion." (emphasis supplied).

18. Reference was also made to S.M. Dychem v. Cadbury, (2000) 5 SCC 573 [LQ/SC/2000/941] : 2000 PTC (20) 297(SC) in support of his submission that the use of the words "A Tata Enterprise" above Star Bazaar" in respect of the departmental store of the Respondent would be a relevant factor to take into consideration for determining the necessity or otherwise of granting an injunction. The words "A Tata Enterprise" would be sufficient, in the ordinary course, to distinguish the departmental store of the Respondent from that of the Appellant and would ensure that no customer is confused by the similarity of names. He referred to the following passages (paragraphs 52 and 53 of the Report):

"52. In the present case, the defendants goods contain the word "Cadbury" on their wrapper. As per the principle laid down in Fisons Ltd. v. E.J. Godwin [1976 RPC 653] the occurrence of the name "Cadbury" on the defendants wrapper is a factor to be considered while deciding the question of passing off. Similarly in King & Co. Ltd. v. Gillard and Co. Ltd. [22 RPC 327] and Cadbury Schweppes Pty. Ltd. v. Pub Squash Ltd. [1981 RPC 429] it was held that the presence of the defendants name on his goods was an indication that there was no passing off, even if the trade-dress was similar.

53. The fact that the defendants wrapper contains the word "Cadbury" above the word picnic is therefore a factor which is to be taken into account." (emphasis supplied)

19. It was also submitted by learned by learned counsel that apart from the three elements laid down by the Supreme Court, the fact that there is honest, concurrent use of the trademark by a defendant needs to be considered. For this submission, reliance was placed on Uniply Industries v. Unicorn Plywood, (2001) 5 SCC 95 [LQ/SC/2001/1184] : 2001 PTC (21) 417(SC) particularly the following passage from paragraph 8 of the Report:

"It has also to be borne in mind whether the appellant had also honestly and concurrently used the trade marks or there are other special circumstances arising in the matter. The courts below have merely looked at what the prima facie case is and tried to decide the matter without considering the various other aspects arising in the matter."

20. Learned counsel also referred to The Law of Passing-Off: Unfair Competition by Misrepresentation by Christopher Wadlow, (Third Edition 2004 at page 6) particularly what has been described therein as the "classical trinity" of passing off, that is misrepresentation, damage and goodwill, being the three essential ingredients of the tort of passing off. In particular, he referred to the following passage:

"Passing-off is concerned with misrepresentations made by one trader which damage the goodwill of another trader. Misrepresentation, damage and goodwill are therefore the three essential elements of the tort, and are sometimes referred to as its "classical trinity". It is worth adding that liability for passing-off is not affected by the defendants state of mind. There is no fourth element requiring the defendant to be fraudulent, malicious, or even negligent."

It may be mentioned, that in the footnote to the passage, it is stated that confusion or deception may be substituted for misrepresentation, while reputation may be substituted for goodwill.

21. On a consideration of the entire case law placed before us as well as on the facts as presented, it is quite clear that one of the primary requirements for the grant of temporary injunction in a case of passing off is that the customers of a plaintiff might be led to believe or might be confused between the goods of that plaintiff and the goods of the defendant. To avoid any such confusion, learned counsel for the Respondent has made it absolutely clear that his client is willing to add the words "A Tata Enterprise" or words to the same effect above "Star Bazaar" in respect of its retail store in Delhi. In our opinion, once these words are added, it is unlikely that there would remain any confusion in the mind of any customer that the retail departmental store of the Respondent is the same as the retail departmental store of the Appellant. This by itself should dispel all doubts that any customer might have and should be adequate protection in so far as the Appellant is concerned.

22. However, learned counsel for the Appellant submitted that the prior use of "Star Bazaar" by his client cannot be forgotten. We agree (and this was argued by learned counsel for the Respondent on a demurrer) that the Appellant is a prior user of "Star Bazaar" and if another store by the same name is opened up by somebody else in another part of Delhi, it is likely to lead to a diversion of customers in the normal course of business. However, if it is made absolutely clear to those customers that the two stores are distinct entities having no connection with each other, even this likelihood of diversion will disappear. In our opinion, this can be achieved by the Respondent using the words "A Tata Enterprise" above "Star Bazaar" in its retail departmental store to be opened in Delhi.

23. That there should be no confusion in the mind of any customer that the two departmental stores are different, is a matter of prime consideration, at least in so far as the Appellant is concerned. It seems to us quite clear that "A Tata Enterprise" mentioned prominently over "Star Bazaar" on the retail departmental store of the Respondent would adequately serve that purpose.

24. Under these circumstances, it is not necessary for us to go into the question whether the principles adopted by the learned Single Judge for declining an injunction are correct or not. Suffice it to say that we do not find any prima facie perversity in the view expressed by the learned Single Judge in declining to grant a temporary injunction to the Appellant, so as to warrant any detailed examination. It is quite clear that both the parties are bona fide (at least prima facie) concurrent users of the trademark "Star Bazaar". Whether the goodwill of the Appellant is being generally encashed by the Respondent or not is a matter that will have to be tested during the trial of the suit. No presumption can be made on the facts of this case, one way or the other. There is no doubt that the Appellant has been using this trademark for the last several years in Delhi, while the Respondent has been using this trademark for the last one or two years in Ahmedabad, Mumbai and in Bengaluru. It was not known to the Appellant that the Respondent was using this trademark in other cities and it was also not known to the Respondent that the Appellant runs a departmental store under the trademark "Star Bazaar" in Delhi. It is a matter of sheer coincidence that both are using the same trademark and at this stage of the suit even when issues have not been framed, it is not possible for us to come to a prima facie conclusion that the balance of convenience is in favour of the Appellant for the grant of an interim injunction.

25. We find no merit in this appeal. Dismissed.