V. S. Deshpande, J.

(1) THIS is an appeal against the order of the Additional District Judge, Delhi dated

16/5/1967 refusing the grant of temporary injunction to the plaintiff-appellant. The

application for temporary injunction by the plaintiff before the Additional District

Judge, though made under Order 39, Rules I and 2 read with Section 151 Civil

Procedure Code. , was actually covered by Order 39, Rule 2 alone inasmuch as the

suit by the plaintiff was for restraining the defendants from committing "other injury

of any kind" within the meaning of Rule 2 (1 ). The injury complained of was the

harm caused to the plaintiff by the sale of deceptive. e goods by the defendants. The

order of the learned Additional District Judge was apparently, therefore, passed

under Order 39, Rule 2 Civil Procedure Code and not under Section 151 Civil

Procedure Code It was therefore, appealable under Order 43, Civil Procedure Code.

(2) BRIEFLY, the facts leading to the filing of this appeal against the order dated

16/5/1967 passed by the Additional District Judge, dismissing the appellants

application for temporary injunction are as follows:

(3) SHRI K. C. Aggarwal, the father of defendant No. 2 and certain other persons

decided to promote a company to manufacture "wearwell" Cycles. These cycles used

to be manufactured by an English Company called the Wearwell Cycle Company

Limited in England. Shri Aggarwal, therefore, went to England and entered into an

agreement with the English Company. Shri Aggarwal acted for Janki Das and Sons

of Jullundur, India, and the agreement was entered into by him for the benefit of

the Indian Company which was to be formed under the name of "wearwell Cycle

Company (India) Limited". The English Company permitted by this agreement the

Indian Company to use any of its proprietary marks in India. The Indian Company

was registered under the Indian Companies Act on 14/11/1951. It obtained the

licence to manufacture cycles under the Registration and Licencing of Industrial

Undertaking Rules, 1952 on 14/1/1953. The Indian company went into production

by the end of 1954 and produced and. sold cycles worth Rs. 3 crores or so by the

time the suit came to be filed in 1966. The Indian Company had spent about Rs. 4

lakhs to advertise its cycles. The word "wearwell" and monogram containing the

said word were displaced on all the cycles made and sold by the Indian Company.

(4) THE agreement entered into with the English Company contemplated that the

Indian Company would enter into an agreement with the English Company after the

Indian Company was registered incorporating the terms of the said agreement into

the new agreement between the two companies. This, however, does not seem to

have been done. By the end of 1965 Shri K. C. Aggarwal was removed from the

Directorship of the Indian Company. Defendant No. 2, Ashok, is his son born

probably on 25/4/1947, He took his B. Com. degree in 1966 and started the

business of selling cycles from the 25/7/1966 as would, appear from the licence as a

dealer obtained by him from the Sales Tax Authorities. He also used the name

"wearwell" and the monogram containing that word on the cycles sold by him. The

plaintiff Company came to know of this in September, 1966 and immediately filed

the Suit No. 3 of 1966 on 26/10/1966. The plaintiff av. erred that from the end of

1954, it has been manufacturing cycles under the trade mark "wearwell" in four

different models, viz-; Popular Wearwell, Super delux Wearwell, Delux Wearwell

and Super Jet Wearwell. Since February, 1966, however, the plaintiff has been

concentrating on the manufacture of their famous model Deluxe Wearwell. Its

production till the filing of the suit was approximately worth Rs. 3 crores as per the

statement showing the yearly figures of sale attached. It has spent about Rs. 4

lakhs on advertising the trade mark "wearwell" as per statement attached. The

trade mark "wearwell" is the key portion of the plaintiffs trading style "wearwell

Cycle Company (India) Limited". It denotes the cycles manufactured by the plaintiff

alone in India. It is associated by the members of the public with the plaintiff only.

The plaintiff-company has applied for registration of this trade mark which

application is pending. Even prior to the registration of the trade mark, the plaintiff

has acquired reputation and good-will in this trade mark. The defendants have

started trading under the style of "wearwell Industries" at Ludhiana and started

assembling and selling cycles under the trade mark "wearwell". The trading of the

defendants started only about 3 months prior to the filing of the suit. It is causing

irreparable loss and injury to the plaintiff for which pecuniary compensation would

not be an adequate relief. The action of the defendants amounts to the tort of

passing off. Pending the decision of the suit for permanent injunction, therefore, the

plaintiff prayed for a temporary injunction restraining the defendants from using the

trade mark "wearwell".

(5) THE defendants did not deny that the plaintiff started a factory for assembling

of cycles in the year 1955. They, however, denied that the trade mark "wearwell"

was ever the proprietary mark of the plaintiff. They stated that the plaintiff company

has been assembling the cycles and wrongfully using the name "wearwell"

sometimes. The defendants have been carrying on business under the name of

"wearwell Industries" for the last about three years in manufacturing, assembling

and selling cycles under the trade mark "deluxe Wearwell". The defendants are

entitled to use the trade mark "wearwell". The agreement with the English Company

was entered into by Shri K. C. Aggarwal, who was entitled to use the trade name

"wearwell". The rights under the agreement with the English Company were

transferred to the defendants. The balance of convenience is in favour of the

defendants in as much as the business of the defendants would be totally stopped,

if temporary injunction is granted against them. The plaintiff has no reputation and

is in a had way financially. It is not, therefore, entitled to permanent injunction

against the defendant and hence no temporary injunction should be granted in its

favour.

( 6) THE learned Additional District Judge refused to pass an order of temporary

injunction as prayed for by the plaintiff-appellant and instead directed the

defendants to maintain accounts of sales made by them and to furnish security to

compensate the plaintiff-company in the event of the success of the suit. The

learned Additional District Judge was of the view that a strong prima fade case was

not made out by the plaintiff for the grant of temporary injunction in view of the

following reasons: (1) A serious controversy exists as to whether or not the inv.

mention claimed by the plaintiff is, a new one or a new manufacture or whether or not

it involves any new skill; (2) The defendant disputes the plaintiffs ownership of

the trade mark; (3) A temporary injunction cannot be granted to establish a new

state of things different from the state which existed on the date on which the suit

was instituted; (4) The balance of convenience is not in favour of the plaintiff as -

the grant of temporary injunction would destroy the defendants business

altogether, while the position would be different if the plaintiff is able to prove his

right to the disputed trade mark; and (5) The plaintiff has not been able to get the

trade-mark registered in its name yet.

(7) I am afraid, I am unable to agree with the reasoning of the learned Additional

District Judge. It is not clear what is implied in reason No. 1 given by him. It is true

that the trade-mark "wearwell" is not invented by the plaintiff. Apparently, the invention was made by the English Company, which has been manufacturing Wearwell

Cycles for many years past. The good-will and reputation of the English Company in

respect of this trade mark was so great that the promotors of the plaintiff-company

including Shri K. C. Aggarwal, father of defendant No. 2, thought it worthwhile to

take the trouble and spend money of sending Shri Aggarwal to England to enter into

an agreement with the English Company under which the Indian Company would be

entitled to use the trade- name "wearwell". Both the parties are, therefore,

committed to the position that the trade-mark "wearwell" was the property of the

English Company, which was valuable enough to be sought after by the proposed

Indian Company. If the Indian Company had itself invented the name "wearwell",

it may have perhaps required a longer period to establish its good-will and

reputation in respect of it. But the good-will and the reputation of the trademark in

respect of the cycles manufactured by the Indian Company already existed. Prior to

the gradual stoppage of imports by the Government of India after attainment of

independence. Wearwell cycles used to be imported in India and were known for a

certain quality attached to them. The reputation among the Indian buyers must have been good enough to persuade the promoters of the Indian Company to acquire

the said trade-mark from the English Company. By such acquisition the Indian

Company would get the benefit of the established reputation of the cycles sold

under this trade-mark. A shorter period of time would, therefore, be required for the

Indian Company to acquire the reputation and good-will in respect of this trademark.

Far from being a disqualification, therefore, the fact that the Indian Company

itself did not invent this trade-mark but decided to use it in view of its agreement

with the English Company puts the claim of the Indian Company to the use of the

trade-mark on a better footing. As the trademark was already well known, a

comparatively short period of its association with the cycles made by the Indian

Company would be sufficient to give the Indian Company the goodwill in the use of

the trade-mark.

(8) THE agreement entered into with the English Company was expressly made for

the benefit of the proposed Indian Company. This is conclusively proved not only

by the agreement itself, but also by the fact that Shri K. C. Aggarwal, the

predecessor in-title of the defendant, was himself a Director of the plaintiff-company

which used - the trade-mark "wearwell" in pursuance of the agreement entered into

with the English Company. It is true that the agreement contemplated a fresh

agreement between the Indian Company and the English Company after the

incorporation of the Indian Company. Legally speaking, therefore, the Indian

Company cannot base its claim to the trade-mark "wearwell" on the agreement

entered into by its promotors with the English Company. This does not mean however, that Shri K. C. Aggarwal can personally claim any benefit under the agreement with the English Company. From the date of entering into agreement with the English Company to his remove. al from the Directorship of the Indian Company, Shri K. C. Aggarwal, predecessor in-title of the defendant- respondents, has himself been a party to the use of this trade-mark for the exclusive benefit of the Indian

Company. The Indian Company has based its claim to the exclusive use of this

trade-mark not on the agreement entered into with the English Company, but on the

fact that for 12 years prior to the filing of the suit it has been exclusively using this

trade-mark for cycles made by it. On the contrary, the business of the defendants

dated apparently from July, 1966,. e. , hardly three months before the filing of the

suit by the plaintiff. In view of the age of defendant No. 2 and the date of his Sales

Tax Registration Certificate, one can safely proceed on the assumption that the use

of the trade-mark by the defendants commenced only from July, 1966. One cannot,

therefore, agree with the learned Additional District Judge that there is any serious

controversy as to the proprietorship of this trademark as between the two parties.

On the side of the plaintiff-company is the 12 years use of the trade-mark resulting

in the sale of cycles worth Rs. 3 crores and expenditure on advertisement of about

Rs. 4 lakhs. As against this the defendant- respondents can claim the use of the

trade-mark for just three months before the suit. The defendant-respondent cannot,

therefore, claim any comparison with the plaintiff-company in this respect at all.

Reason No. 2 given by the learned Additional District Judge is also, not, therefore,

valid.

(9) THE plaintiff-company is wanting the temporary injunction to preserve the

status quo as it existed for 12 years ending July, 1966. It is only in July, 1966 that

the defendants started disturbing the status quo by using the trade-mark, which was

used exclusively by the plaintiff till then. It cannot be said, therefore, that the

plaintiff wanted the temporary injunction to create a new state of things.

(10) THE question of balance of convenience can arise only when at least prima

facie the two parties are on the same level and their rights are about equal. As

already stated above, the plaintiff was the user of this trade-mark being for 12

years and the plaintiff having made cycles under this trade-mark to the tune of Rs.

3 crores and having spent on the advertising of this trade-mark an amount of

about Rs. 4 lakhs, the plaintiff-companys position is infinitely superior to that of the

defendant-respondents, who began the use of the trade-mark just three months

before the suit and who have not dared to state how much they have earned by

selling the cycles in this period, of three months and how much they have spent on

advertisement during those three months. It is not the law that any one can start

using the trade-mark exclusively associated with another for a long time and then

tell the Court not to grant temporary injunction to the establish user because this

would be inconvenient to the new user, who may be called a usurper.

(11) THE fact that the plaintiff has not so far succeeded, in getting the trade-mark

registered in its name is not relevant in as much as the suit of the plaintiff is based

on the user of the trade-mark by the plaintiff for 12 years prior to the suit and is not

based on the registration of the trade-mark. The plaintiff avers that the defendants

have committed the tort of passing off. They do not aver that the defendant respondents have infringed any trade-mark registered in the plaintiffs favour. In

Powell v. . Birmingham vinegar Grewery Company, (1896) 2 Ch. 54, C) the

plaintiff-Company had manufactured a sauce under the name "yorkshire Relish" for

34 years. The registration of these words as a trade-mark in 1884 was later set

aside in 1894 in a decision genuineness of which was upheld by the House of Lords,

in (1894) A. C. 8. The Court of appeal observed as follows:-"the plaintiff in this

case does not complain of the infringement of any registered trade-mark. He relies

exclusively on his common law right to prevent other people from making and

selling goods which can be and are passed off and mistaken for goods made by him

under the name "yorkshire Relish". . .

(12) BEFORE there was any legislation on the subject of trade-marks it was well

settled that when any one adopted a mark so closely resembling the trade-mark of

the plaintiff as to be likely to be mistaken for it, the plaintiff was entitled to an

injunction to restrain the use of such mark. Fraud on the public to the detriment of

the plaintiff was the foundation of the right to damages at common law: per Lord

Blackburn in Singer Manufacturing Co. v. . Loog 8 App. Cas. 29; but as long as 1833

it was decided in Millington v. . Fox, 3 Myandcr 338,0, that intentional deceit was

not essential to warrant the court in granting an injunction. The Court will interfere

to protect a plaintiff if ordinary or unwary purchasers are likely to be misled and to

mistake the defendants goods for the plaintiffs" (per Lindley, L.. ).

(13) THE House of Lords sub-nom Birmingham vinegar Brewery Company v. .

Powel,- (1897) A. C. 710,0, unanimously affirmed the judgment of the Court of

Appeal.

(14) WHAT the plaintiff has to prove to succeed in getting temporary (and later a

permanent) injunction is that he has acquired the exclusive right by usage of the trade-mark "wearwell" for the sale of cycles made by it. As observed in Salmond

on Torts, 12th Edition, at page 662, regarding the basis of passing off action: "the

Court have wavered between two conceptions of a passing-off action - as a

remedy for the invasion of a quasi-proprietary right in a trade name or trade mark,

as a remedy, analogous to the action on the case for deceit, for invasion of the

personal right not to be injured by fraudulent competition. It has recently been said

that "the true basis of the action is. that the passing off. . . injuries the right of

property in the plaintiff, that right of property being his right to the goodwill of his

business. " In general the violation of a right to property is actionable, even

though it is innocent and though no damage has been proved. At common law it

was necessary to prove an actual fraudulent intention, but a different view was

taken in equity, and since the Judicature Act it has been generally accepted that it is

not necessary in an action for passing off to prove fraud -that is to say. an intent

to deceive. It is sufficient in all cases to prove that the practice complained of is

calculated (that is to say, likely) to deceive".

(15) THE first question, therefore, is whether the exclusive use of this trade-mark

by the plaintiff for 12 years resulting in the sale of cycles worth. Rs. 3 crores and

advertising expenditure of Rs. 4 lakhs is sufficient to associate this trademark so

closely with the cycles made by the plaintiff as to become the part of the good-will

of the plaintiffs business. It is only then that a proprietary right to the trade-mark

can be claimed by the plaintiff. Taking into account the fact that industrialization has

spread in our country comparatively recently and that too after independence, the

above mentioned period and volume of business should be regarded as sufficient

for the proof of the plaintiffs claim. In Reddaway v. . Banham, (1896) A. C. 199.

Reddaway had been making a belting, which he called Camel Hair Belting for about

12 years before Banham began to use the same name for the Camel Hair Belting,

which he also started to make. As the words "camel Hair Belting" were merely

descriptive words which may be as truly applied to the belting made by Raddaway

as to the belting made by Banham or any one else, a strong burden of proof rested

on Reddaway to show that he had acquired the exclusive right to the use of those

words. The 12 years user was held sufficient for the acquisition of such a right by

the House of Lords. In the case before us. the word "wearwell" is not a descriptive

word, and, therefore, is more easily capable of being appropriated.

(16) SECTION 27 (2) of the Trade and Merchandise Mark, 1958 expressly states

that nothing in the said Act shall affect rights of action against any person for

passing off goods, as the goods of another person or the remedies in respect

thereof. In Kav. iraj Pandit Durgdatt Sharma v. . Nav. ratna Pharmaceutical

Laboratory, AIR 1965 SC 1980, the Supreme Court also pointed out that an action of

passing off is a common law remedy distinct from an action for infringement of a

registered trade-mark. The common law remedy was in substance an action for

deceit,. e. a passing off by a person of his own goods as those of another. No

fraudulent intention on the part of defendant-respondents is to be proved. All that

is to be proved by the plaintiff is that the use of the word "wearwell" by the

defendant in selling their own cycles was likely to deceive purchasers into thinking

that these cycles are made by the same person who have hitherto been using the

trade-mark "wearwell". Nor is it necessary for the plaintiff to prove that actual

damage was caused to him by the imitation of his goods by the defendants. The law

assumes that the presence in the market of a quantity of deceptive goods will have an adverse effect upon the plaintiffs business. The plaintiff is, therefore, without

proof of damage entitled to damages (Draper v. . Twist, (1939) 3 All England

Reports 513, and the Editorial note below the head note of the case. It is not even

necessary that the purchaser should know that the plaintiff-company is the maker of

the "wearwel!" cycles or that their factory is situated in Faridabad. Even actual

deception is not to be proved. The likelihood of customers being deceived is

sufficient. Moreover it is not necessary to prove that there was any actual

likelihood of deception of immediate purchasers. The manufacturer must not release

upon the market products which are calculated to deceive the ultimate consuming

public even though the retailer who is the immediate purchaser from the

manufacturer is not misled. Lastly, the test for determining is whether deception

was probably the first impression likely to be produced on the casual and unwary

customer and it is no answer that an observe ant person making a careful

examination would not be misled.

(17) THE last observation brings us to the question whether the use of the word

"wearwell" by the defendants results in the likelihood of deception of the ultimate

purchasers. The monogram used by the defendants was so similar to the monogram

used by the plaintiff that it was difficult to distinguish one from the other. Andley,. ,

in this Court has, therefore, already passed an order on 29-5-1967 prohibiting the

defendant-respondents from using this monogram which is exclusively associated

with the plaintiffs cycles. The word "wearwell" with its English ancestry invokes an

image of certain quality in the minds of the intending purchaser. By 12 years user

and sale of cycles under the said name in large numbers, the plaintiff-company has

acquired the right to the benefit of the use of this trade-mark. The defendants

cannot, now, so late in the day, be allowed to use the same name. The learned

counsel for the defendant-respondents showed me a small metal plate which is

affixed to their cycles to show that they are made under a licence from the English

Company. The question is whether this is sufficient to distinguish the defendant respondents cycles from the plaintiffs cycles when both are using the trade name

"wearwell". Firstly, the metal plate is too small and may not be observed by most

of the purchasers. Secondly, it does not distinguish the defendants cycles from the

plaintiffs cycles inasmuch as the original reason why the plaintiff company started

making cycles under the trade-name "wearwell" is the same, viz. the agreement of

the English Company with the promotors of the Indian Company. The Indian

Company can, therefore, say with more justification than the defendants that the

cycles are made by it in view of the agreement by its promotors with the English

Company. Lastly, the defendants do not have any licence from the English

Company, for the use of this trade name. On the whole, therefore, there is nothing

to show that the trading style of the defendant-respondents as used on the cycles

made by them is sufficiently distinct from the one used by the plaintiff to avoid

confusion in the minds of the customers. On the contrary, the customer usually

knows the word "wearwell" as it is that word alone which is associated with a

particular make of cycles. The customers do not know whether the manufacture of

such cycles is under a licence from the English Company or whether these cycles are

manufactured in Faridabad. (where the factory of the plaintiff is situated) or in

Ludhiana (where the business of the defendants is carried on ). So long, therefore,

as the defendants are allowed to use the word "wearwell" on their cycles, the

ordinary customer would think that they are the Wearwell cycles known to the public

under that trade name. It must be held, therefore, that the use of the word

"wearwell" by the defendants is likely to mislead the public into thinking that the

defendants cycles are the same Wearwell cycles which have been known to the

public by that name from 1954 to 1966. As the imitation of this trade mark by the

defendants is very recent, there is absolutely no reason why the defendants she

allowed to continue its use. The defendants have to establish their own reputation

independently of the reputation of the plaintiff. They can, therefore, use any other

trade name, which will not be an invasion of the proprietary rights of the plaintiff

or of any other maker of cycles. The defendants must try to become known on their

own. No prejudice would, therefore, be caused to the defendants if they are

prohibited from using the word "wearwell" on their cycles. It is for them to use some

other word or label, which will, in course of time, become known to the public as

their exclusive trade-mark. Since they have no right to use the word "wearweil" it

cannot be said that the prohibition of its use by them would result in the destruction

of their business. Their business does not rest on the use of this trade name. Nor is

there any question of balance of convenience between the parties. For the right to

use the trade name is in the plaintiff alone and it can not be said, therefore, that

any inconvenience can be caused to the defendants by their being prohibited from

using the name.

(18) FOR the above reasons, the appeal is allowed. The order of the learned

Additional District Judge is set aside and pending the decision, of the suit the

defendant-respondents are prohibited, from using the word "wearwell" in the name

of their business and as a mark on the cycles made and sold by them. In the

circumstances of the case. I make no order as to costs of this appeal.