* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ IA Nos. 3214/2006 & IA 3975/2006 in CS(OS) No.480/2006
% Date of Decision: 26.11.2010
M/s. Amir Chand Jagdish Kumar (Exports) Ltd. .... Plaintiff
Through Mr. S.K.Bansal, Mr. Akshay
Srivastava, Mr. Pankaj Kumar and
Mr.Anand Vikas Mishra Advocates
Versus
M/s. Hindustan Hing Supplying Co. .... Defendant
Through Mr. Hemant Singh, Mr. Sachin Gupta
and Mr. Animesh Rastogi, Advocates
CORAM:
HON'BLE MR. JUSTICE ANIL KUMAR
1. Whether reporters of Local papers may be YES
allowed to see the judgment?
2. To be referred to the reporter or not? NO
3. Whether the judgment should be reported in NO
the Digest?
ANIL KUMAR, J.
* IA Nos. 3214/2006 (under Order 39 R. 1 & 2 CPC) (by the plaintiff) and IA 3975/2006( under Order 39 Rule 4 by the defendant)
1. The plaintiff has filed the above noted suit for permanent injunction seeking restrain against infringement, passing off goods IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 1 of 36 by the defendant under the trademark `Aeroplane‟ brand label with device of `Aeroplane‟ contending, inter-alia, that since the year of its incorporation, plaintiff company is engaged in the business of processing, marketing and exporting rice, and during the course of business it also started the business of processing and marketing spices and other allied preparation made from cereals using trademark `Aeroplane‟ brand label with device of `Aeroplane‟ which trademark has a distinctive get up, make up and has a distinctive artistic manner. According to the plaintiff this trademark `Aeroplane‟ with device of `Aeroplane‟ along with its goodwill and reputation was acquired from its predecessor M/s. Amir Chand Jagdish Kumar by agreement dated 14th January, 2005 which had been a proprietorship concern. The averment of the plaintiff is that its predecessor had adopted `Aeroplane‟ brand label with device of `Aeroplane‟ on 1st May, 1982 and has been continuously using the same since then up to the present time and goods bearing the said trade mark are distributed in major parts of India as well as the world. The trademark of the plaintiff was duly registered under No. 439849 in the States of Punjab, Haryana, Gujarat and Union Territory of Delhi in respect of rice under class 30 on 5th July, 1985. The said trade mark was registered under No. 588262 under class 30 from 8th January, 1993 for sale in India and also for export. From 4th May, 2001, the trademark and device were registered under No. IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 2 of 36 1007672 for rice, pulses rawa, maida, atta, suji, sugar, honey, salt. An application No. 1405910 dated 12.12.2005 was filed under class 30 in respect of spices, flour and other food articles for human consumption which is pending for registration. The plaintiff also disclosed the details of the applications and the registration of his trademark in different countries. According to the plaintiff its company is accredited with ISO 9001 for maintaining excellent quality of products and consequently, the plaintiff‟s goods and business have acquired tremendous goodwill and good reputation in global market.
2. On the allegation of the plaintiff that the defendant has adopted an identical/deceptively similar trademark `Aeroplane‟ label with device of `Aeroplane‟ in relation to spices and other allied food preparation and that the trademark of the defendant is identical and deceptively similar and by adoption and user, the defendant has infringed and passed off his goods as that of the plaintiff and the defendant‟s activities are amounting to interference in the business of the plaintiff and is an unethical trade practice and that the impugned adoption and use by the defendant is malafide and fraudulent, this Court by an ex-parte interim order dated 20th March, 2006 in IA No. 3214/2006 restrained the defendants from using the trademark „Aeroplane‟ and the device of „Aeroplane‟ for spices and IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 3 of 36 cereals products including the packaging. The said order was further clarified by order dated 4.4.2006 holding that the order dated 20th March, 2006 shall not apply to asafoetida sold under the brand name `Aeroplane‟ since the interim order per se does not apply to asafoetida being only applicable to spices and cereals.
3. The defendant filed an appeal being FAO(OS) No. 312/2006 against the ex-parte order dated 20th March, 2006 in which by order dated 1st May, 2006, with the consent of counsel for both the parties held that the order dated 20th March, 2006 shall not be given effect till the disposal of the application under Order 39 Rule 1 & 2 of CPC and the application of the defendant under Order 39 Rule 4 of CPC. The Division Bench, however, did not vacate the ex-parte injunction order dated 20th March, 2006 but only stayed the direction for appointment of Local Commissioner by the Single Judge by order dated 20th March, 2006.
4. The defendant thereafter, had filed another FAO(OS) No. 650/2006 titled as M/s. Hindustan Hing Supplying Company Vs. Amir Chand Jagdish Kumar which was disposed of by order dated 16th October, 2006 whereby hearing of the application for injunction under Order 39 Rule 1 & 2 and defendant‟s application under Order 39 Rule 4 before the Single Judge were preponed.
IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 4 of 36
5. By order dated 24th October, 2007 while dealing with the above noted applications, this Court had held that two questions arise for consideration for deciding these applications which are as follows:-
1. Whether the assignment of trademark without goodwill would convey the right of proprietor used by predecessor in favor of assignee?
2. Whether the predecessor, who have assigned their trademark „aeroplane‟ to the defendant, were the prior user of said trademark and if so, since when?
This Court also held that question No. 1 is purely a question of law whereas the second question is a question of fact.
6. The above questions were framed by this Court on the pleadings of the defendant contending, inter-alia, that the defendant is the proprietor of the trademark „Aeroplane‟ and device of „Aeroplane‟ in relation to spices and has exclusive right to use it. It was asserted that he has been using the trademark „Aeroplane‟ and device of „Aeroplane‟ in relation to Asafoetida since 1952 and the said trademark and device in respect of spices since 2003. The defendant disclosed that he is the registered proprietor of the said trademark by trademark registration No. 184843 in Class-30 for Asafoetida as on 30th April, 1958 and in respect of spices trade, an application with IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 5 of 36 Registrar of Trademark was filed being application No. 872133 dated 19th August, 1999.
7. According to the defendant, the plaintiff has admitted that the defendant is using the said trademark and device for spices since 2003 whereas the plaintiff is using the said trademark for spices since September, 2005. The defendant further asserted that the trademark „Aeroplane‟ was used by partnership under the name and style of `New Bharat Hing Supplying Company‟ since 1952. The said partnership comprised of late Mr. Abdul Karim Khan Mirza Khan, father of defendant and Mr. Abdul Rahim Khan Mirza Khan, uncle of the defendant. According to the defendant, several persons were inducted as partners or beneficiaries from time to time and their induction is reflected in the record of the Registrar of Trademark, issued regarding use of trade mark registration No. 184843. The defendant contended that he, Mr. Navroz Khan Pathan, was admitted to the benefits of the partnership in 1966.
8. By a retirement deed dated 1st November, 1988, defendant Mr. Navroz Khan, retired from partnership firm along with another partner Mr. Firoz Khan. After retirement, defendant continued the business of selling Asafoetida under the name and style of `Hindustan Hing Supplying Company‟. He categorically asserted that IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 6 of 36 the partnership business had assigned the registered trademark „Aeroplane‟ for Asafoetida to him and he has been using it in his business under the name and style of `Hindustan Hing Supplying Company‟. The further assertion of the defendant is that on 11th April, 2000, the partnership of Mr. Navroz Khan, defendant and Mr. Feroz Khan, who had retired from the earlier partnership `M/s. New Bharat Hing Supplying Company‟ and had started business in the name of `M/s. Hindustan Hing Supplying Company‟ also dissolved and the trademark and device „Aeroplane‟ and the goodwill was transferred in favor of defendant, Mr. Navroz Khan Abdul Karim Pathan and a dissolution deed dated 11th April 2000 was executed, which was, however, somehow named as partnership deed instead of dissolution deed.
9. The defendant pleaded that the copy of the deed and the application on TM Form-24 dated 6th April, 2004 was submitted with the Registrar of Trademark for incorporating Mr. Navroz Khan Abdul Karim Pathan as the sole proprietor of the trademark „Aeroplane‟ registered vide trademark registration No. 184843. Since 11th April, 2000 `M/s. Hindustan Hing Supplying Company‟ has been carrying on business of sale of Asafoetida as sole proprietary concern of Navroz Khan Abdul Karim Pathan/defendant. The defendant also disclosed the amount spent by the partnership and thereafter, sole IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 7 of 36 proprietorship firm in the advertisement and sale promotion. In 2005-2006 firm‟s annual sale was Rs.3,26,98,792/- whereas its annual expenditure on sale and promotion was 16,73,706/-.
10. According to the averments of the defendant, in 1999, it expanded its business to commence manufacture and sale of other spices such as chilli powder, turmeric powder, baking powder, salt, tea, coffee, cocoa, sugar etc. under the said trademark and device „Aeroplane‟ and applied for registration by application No. 872133 dated 19th August, 1999. The defendant, however, commenced manufacture and sale of spices under its trademark „Aeroplane‟ in the year 2003.
11. The defendant disclosed that he was not aware of use of his trademark and his device „Aeroplane‟ by the plaintiff in relation to rice and cereals and only in December, 2005 he came across the advertisement of the trademark application No. 1007673 dated 4th May, 2001 advertised in the trademark Journal No. 133 dated 1st August, 2005, which was made public on 14th October, 2005. The defendant therefore, submitted his objection by opposition dated 7th December, 2005. According to defendant, the present suit by the plaintiff is a pre-emptry action and is malafide and fraudulent in nature.
IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 8 of 36
12. The defendant filed an affidavit of its proprietor Mr. Navroz Khan Pathan dated 22nd July, 2006, deposing about the documents filed with the affidavit. The documents filed by the defendant included the registration certificate of `New Bharat Hing Supplying Company‟ with the sales tax office dated 7th October, 1978 showing the defendant as partner of the said firm. A copy of notice dated 29th April, 1958 issued by food inspector which was also filed with Borough Municipality, Nadiad showing Mr. Abdul Karim Mirza as the proprietor of M/s. New Bharat Hing Supplying Company. In order to demonstrate that the predecessor firm of the defendant `New Bharat Hing Supplying Company‟ had been using the trademark „Aeroplane‟ and device „Aeroplane‟ since 1952 which was registered in 1958, the defendant produced a copy of order dated 3rd September, 1960 placed by M/s. J. Manilal and Company on the predecessor firm.
13. The defendant also produced various invoices from 25th January, 1980 up till 15th October, 1985 to show the business carried on by `New Bharat Hing Supplying Company‟ using the trade name „Aeroplane‟ and device „Aeroplane‟. The documents, photocopies of invoices produced by the defendant are in Gujarati, therefore, the defendant filed the English translation with the certificate of notary about the translation being the correct copy of IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 9 of 36 the documents in Gujarati. The documents filed with affidavit dated 22nd July, 2006 were the photocopies of the documents. The defendant filed another affidavit dated 28th October, 2010 and filed original documents with the said affidavit.
14. According to the defendant the goodwill of business `New Bharat Hing Supplying Company‟ was not calculated at the time of his retirement on 1.11.198 and it was incorporated in the deed that nothing is due to the defendant retiring partner on account of goodwill. However, the trademark with device along with trademark‟s goodwill was assigned by `New Bharat Hing Supplying Company‟ to his newly constituted firm `M/s. Hindustan Hing Supplying Company‟, which was also dissolved on 11th April, 2000 and after that date he is carrying on business as a sole proprietor of `Hindustan Hing Supplying Company‟ and using the trademark „Aeroplane‟ and device „Aeroplane‟. The defendant also clarified that assignment was of entire goodwill of the trade mark but not of partnership firm `New Bharat Hing Supplying Company‟. Being a partner of `New Bharat Hing Supplying Company‟ he had share in the undivided goodwill of the partnership firm but since it was not calculated so it was held that nothing is due to him on account of goodwill from `New Bharat Hing Supplying Company‟, however, he was given exclusive right to continue using the trade mark and IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 10 of 36 device `Aeroplane‟. From the deed of retirement it is also apparent that the remaining partners of `M/s New Bharat Hing Supplying Company‟ also did not charge anything from the retiring partners including defendant for using the trademark and device `Aeroplane‟.
15. The defendant has also produced the documents pertaining to initiation of proceeding under Prevention of Food Adulteration Act regarding spices as on 27th June, 2002. Some copies of bills along with newspapers‟ advertisements for the period 2003-04 have also been produced by the defendant. The copies of the bills issued by the defendant to Super Stockists of the defendant, namely, Dipti Traders, Nadiad have also been produced. The defendant has also produced the Agmark certificate granted for Asafoetida in 1997 and „Aeroplane‟ spices as on 2nd August, 2001.
16. The defendant contended that the documents produced by him are only some of the documents to establish his pleas and contentions, as most of the record of the defendant had been burnt in Gujarat riots in April, 2002 in which his factory and office premises were destroyed and record was burnt. He has also produced the photographs of his burnt factory.
IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 11 of 36
17. The defendant also produced the letter dated 10th July, 2006 to the Registrar of Trademarks by which error in the advertisement pertaining to trademark application No. 872133 in the Trademark Journal dated 15th January,2006 was pointed out whereby the device „Aeroplane‟ had been wrongly disclaimed in the advertisement issued at the instance of trade mark registry.
18. The defendant along with his application under Order 39 Rule 4, filed the copy of retirement deed dated 1st November, 1988, stipulating that no goodwill of the firm „New Bharat Hing Supplying Company‟, Nadiad was calculated and consequently nothing was found due to the retiring partners for the same.
19. The defendant, in the circumstances, contended that he is the proprietor of trademark „Aeroplane‟ and device of „Aeroplane‟ in relation to spices and has an exclusive right. According to him, he is a registered proprietor and user and in the circumstances, in accordance with the provisions of the Trademarks Act, the plaintiff is not entitled for any interim order against him restraining him to use the trademark „Aeroplane‟ and device „Aeroplane‟ for spices. It was contended that because of the ex-parte order dated 20th March, 2006, his entire business has come to a grinding halt causing irreparable injury and damage to his goodwill and business. In the IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 12 of 36 circumstances, it is contended that he has a good prima facie case and inconvenience caused to him on account of not using his established trade name `Aeroplane‟ and device „Aeroplane‟ is much more in comparison to the plaintiff which has started using the trademark and device „Aeroplane‟ for rice and cereals admittedly from 2005 and thus, the balance of convenience is in favor of the defendant. The defendant also asserted that if the interim injunction is continued against use of his trade mark for spices, irreparable harm shall be caused to him.
20. This Court has heard the learned counsel for the parties in detail. Who is a prior registered proprietor of Trade Mark `Aeroplane‟ with device of `Aeroplane‟? According to plaintiff since 1st May, 1982 the plaintiff‟s predecessor firm adopted the said Mark in relation to rice and is using same continuously and exclusively since then. The plaintiff has claimed that he is the registered proprietor of Trade Mark under Nos.439849 (dated 5th July, 1985); 588262 (dated 8th January, 1993) and 1007672 (dated 4th May, 2010). According to plaintiff he is also a registered proprietor of Art Work involved in the said Mark under the Copyright Act, and he extended his business in September, 2005 in respect of spices and other food articles and had to file the present suit when the plaintiff became aware in February, 2006 about defendant‟s adoption of the said Trade Mark. According IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 13 of 36 to plaintiff he is a prior registered user of Trade Mark. Because the assignment of Trade Mark `Aeroplane‟ and device `Aeroplane‟ to the defendant by his erstwhile firm in 1988 was without goodwill and so to the defendant it was assignment in gross and therefore the defendant cannot claim that he is prior user and has prior registration of trade mark. According to the plaintiff if the assignment is in gross, the continuity of the thing symbolized by the Mark is broken and the use of the Mark by the assignee in connection with the Trade Mark will also be broken. This is because though goodwill always goes with the Trade Mark, however, for general public the assignment may not be deceptive, therefore in assignment in gross where the goodwill is not transferred, the continuity and use is broken. It is contended that if the goodwill is transferred then it will not break the continuity of the thing symbolized by the assignee‟s Mark. For this proposition the plaintiff has relied on Mc Carthy on Trade Marks and Unfair Competition Third Edition, in article 18.01 (3) dealing with `Assignment in Gross‟. It is asserted by the learned counsel for the plaintiff, Mr.Bansal that general rule is that an "assignment in gross" of a Trade Mark is invalid and operates to pass no right to the purported assignee. It is further contended that the most significant impact of an assignment in gross is that the purported assignee does not succeed to the assigner‟s priority of the use of the Mark. The learned counsel for the IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 14 of 36 plaintiff has also relied on Indian Law Reports, Volume-XXXVIII, at Page 110 in the matter of British American Tobacco Company Ltd. Vs. Mahboob Buksh. Learned counsel for the plaintiff has also relied on the advertisement given on behalf of the assignor of the defendant `New Bharat Hing Supplying Company‟ stipulating that from 1st November, 1988 they have assigned the registered Trade Mark and device „Aeroplane‟ otherwise than in connection with the goodwill of the business in which they were used by the erstwhile partners in favor of Sh.Firoz Khan Abdul Karim Khan Pathan and Sh.Navroz Khan Abdul Karim Khan Pathan who are trading in the name of „Hindustan Hing Supplying Company‟. This advertisement is dated 5th February, 1990 which was published in The Times of India dated 11th February, 1990. The reliance has also been placed on advertisement of defendant before acceptance of Trade Mark under Section 20(1) in respect of application No.872133 dated 19th August, 1990 stipulating that the articles as Asafoetida-S-coffee-TCA, Sugar, Tapioca, Sago, coffee, Turmeric powder, Chilli powder, Bread, Biscuits, Paste, Confectionary, Ices, Honey, Treacle, East and Baking powder and salt are proposed to be used. The emphasis of the learned counsel for the plaintiff is that since 1988, the transfer of the business is without goodwill to the defendant, therefore, it is transfer in gross and the defendant cannot claim that it has a prior registered Trade Mark of `Aeroplane‟.
IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 15 of 36
21. Per contra the plea of the learned counsel for the defendant is that the perusal of the retirement deed dated 1st November, 1988 clearly shows that the retiring partners, Sh.Firoz Khan Abdul Karim Khan Pathan and Sh.Navroz Khan Abdul Karim Khan Pathan were given two Trade Marks "Tajmahal Chhap Hing" and "Aeroplane Chhap Hing" and no consideration was to be paid by them for the same nor they were entitled for any amount for the goodwill of the partnership as it was not determined. Clause 3 of the retirement deed rather stipulated that no goodwill is to be calculated and nothing is due to the retiring partner for the same. The relevant Clauses of the retirement deed dated 1st November, 1988 reads as under:-
2) The retiring two partners Sh.Firoz Khan Abdul Karim Khan Pathan and Sh.Navroz Khan Abdul Karim Khan Pathan are given two Trade Marks viz. "In Tajmahal Chhap Hing" and "Aeroplane Chhap Hing" and no consideration is to be paid by them for the same, 3) No goodwill is to be calculated and nothing is due to the retiring partners for the same.
22. In order to determine as to who is the prior registered user what is to be decided prima facie is whether after retirement on 1st November, 1988 whereby the trademark `Aeroplane Chaap Hing‟ was solely assigned to defendant, whether it was an `assignment in gross‟ that is an assignment of trademark divorced from goodwill of its trade mark.
IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 16 of 36
23. The answer to this will depend upon whether in a business the goodwill comprises entirely of the goodwill of the trademark or the goodwill has other components also as the trade name under which business is done and other factors. Say if a partnership business is carried in name A and the business also has trade mark registered in name of partners, it cannot be said that the goodwill is only of the trade name under which business is carried on by the partnership. If the partnership business besides the trade name also has trademark for its products, a component of goodwill will be of trademark of its products also. In partnership business, if some of the partners retire from a business carried in the name of A and retiring partner starts business in name B, the goodwill associated with name A may not be transferred to those retiring partners who would carry on business in the name B, however, it may not be inferred that if the trademark which the partnership was using has been solely assigned to retiring partners, the goodwill of the trademark cannot be used by the retiring partner. If the trade mark is assigned to the retiring partners without any reservation, all the incidents of trade mark solely assigned will also go to such retiring partners. Partnership is nothing but a compendious name of partners. If partners were using a particular trade mark and after retirement some of them are entitled to continue to use the same trade mark, though they may not be allowed to use the business name, it cannot be said that they are not IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 17 of 36 entitled to benefits of use of trademark‟s goodwill prior to retirement, unless it is specifically stipulated and crystallized for whatever reason at the time of retirement that the retiring partners will not be entitled for the goodwill of the trademark.
24. The learned counsel for the plaintiff has contended that in case of defendant it was `assignment in gross‟ when the defendant retired in 1988 and continued the trademark under a different name of his business. In `assignment in gross‟ subsequent use of the mark by the assignee may be in connection with a different business with different goodwill and a different type of product. In those circumstances the continuity of the thing symbolized by the mark will be broken as the use of the mark by the assignee in connection with a different goodwill and different product may result in a fraud on the purchasing public who may reasonably assume that the mark signifies the same nature, quality of goods or services by the same persons which were traded by the assignor. The rationale for `assignment in gross‟ appears to be that the law‟s requirement that goodwill always goes with the trademark may not make the assignee‟s use of mark deceptive. Whether an assignment is an assignment in gross, therefore, will depend on various factors. IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 18 of 36
25. Considering the principles as enunciated in McCarthy on Trade Marks and Unfair Competition regarding `assignment in gross‟ it is apparent that assignment of trademark `Aeroplane‟ without the goodwill of business but with the goodwill of trade mark is not an `assignment in gross‟ to the retiring partners. It is because though business name of the defendant is different which is `Hindustan Hing Supplying Company‟ from the name of the assignor, `New Bharat Hing Supplying Company‟, earlier partnership firm of the defendant, however, the trade mark was assigned exclusively to the retiring partners and it pertained to the same product. While transferring the trade mark to the retiring partners to use that exclusively, the assignors, other partners had not put any restriction regarding use of said trade mark nor had claimed any consideration from the retiring partners for the exclusive use of trade mark by the retiring partners. The retiring partner/defendant had also not claimed any consideration for use of trade/business name of partnership by continuing partners. What emerges from this is that if the goodwill of the business, goodwill of the mark and the type of the goods are different, the continuity symbolized by the mark may break. However, if the types of goods traded under the mark are same and some of the persons trading the goods under particular mark are the same and goods are not traded under the trademark by the strangers to the earlier business, the continuity will not be IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 19 of 36 broken. Applying these factors in the case of defendant, it cannot be held that in 1988 assignment of mark solely to the defendant was an `assignment in gross‟. Prima facie the continuity of the mark will not be broken in case some of the partners retire from a partnership business and carries on the similar business, trading similar product under the same trademark but under a different business name.
26. From the retirement deed of the defendant it is also apparent that for the good will of the business nothing was paid to the retiring partner/defendant and similarly the retiring partner/defendant who had been assigned the trade marks exclusively without any reservation and restriction was asked to pay any consideration for exclusive use of trade marks by the retiring partner/defendant. Another factor which negates that the assignment in case of the defendant was `assignment in gross‟ is because if the goodwill of the trade mark had remained with the continuing partners besides the goodwill of the business name, they could use the trade name `Aeroplane‟ and device „Aeroplane‟ but under the retirement deed they could not use this trade name. In these circumstances, if the continuing partners of the defendant firm were not to use the trade mark which was solely assigned to the retiring partner/defendant, it cannot be held that the goodwill of the trade mark up to the date of retirement got extinguished on assignment or was retained by the IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 20 of 36 continuing partners because they continued the business under the same trade name.
27. In case of a retiring partner who continues with the trade mark, it cannot be held that the use of trade mark by such a retiring partner will be deceptive and consequently the plea of the plaintiff that on retirement by the defendant from the firm `New Bharat Hing Supplying Company‟ in November, 1988 it was a case of the `assignment in gross‟ and the defendant cannot take advantage of the fact that the trade mark `Aeroplane‟ was registered since 1958 which is prior to the registration of the trade mark `Aeroplane‟ of the plaintiff in 1982. In these circumstances and for the foregoing reasons it has to be inferred prima facie that the registration of the trade mark `Aeroplane‟ and device `Aeroplane‟ of the defendant is prior to that of plaintiff.
28. The precedent relied on by the plaintiff, British American Tobacco Company Ltd (Supra) is distinguishable and does not advance the plea of the plaintiff that the assignment of trade mark in 1988 by the partnership in favor of retiring partners will be `assignment in gross‟. In the case relied on by the plaintiff the dispute was between British American Tobacco (India Ltd) with IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 21 of 36 Sheikh Mahboob Buksh and Mahomed Ismail. The business was carried on in the name of Hindustan Cigarette Company by Sh.Kusi Lal Kabasi. Sh.Kabasi was entitled for four trade marks in connection with cigarettes and the plaintiff company had entered into an arrangement with Sh.Kabasi to use the trade mark and for the goodwill of Kabasi business. In the suit filed by the British American Tobacco Company (India Ltd.) against Sheikh Mahboob Buksh and Mahomed Ismail, the stand of the Kabasi was that he had assigned to the company only brand and not the entire business. This was not the case that the plaintiff company and Kabasi were using the trade name together and later the trade mark was assigned to the said company and only the business continued with Kabasi. In the circumstances, in the case of British American Tobacco Ltd it was held to be an `assignment in gross‟ but the facts of the defendant are clearly distinguishable. In the circumstances on the ratio of the said case it cannot be held that the assignment in 1988 by the partnership firm in favor of the retiring partner to trade in the same product in which the partnership firm was dealing and under the same trade name in which the partnership firm was earlier dealing, it will be a case of assignment in gross so as not to pass such rights as has been claimed by the defendant.
IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 22 of 36
29. The next plea is about the user. The plaintiff has admitted categorically that he is using the said trade mark and device `Aeroplane‟ for spices from September, 2005 whereas by various documents produced, it can be prima facie inferred that the defendant is using the said trade name and device `Aeroplane‟ for the spices prior to that of plaintiff.
30. The plea of the plaintiff that the invoices of defendant in the name of „Hindustan Hing Supplying Company‟ prior to September, 2005 cannot be relied on account of two invoices of different dates having same numbers cannot be accepted in view of the explanation given by the defendant. One invoice No.103 dated 27th December, 2003 is in respect of 9 bags of compound asafoetida and 20 Kgs of different qualities of Aeroplane Chilli powder, Aeroplane Turmeric Powder and Aeroplane Hing 555 powder for a total sum of Rs.13,028.40/- and another invoice though bearing the same number 103 is dated 28th February, 2003 raised on Dipti Traders, Gunj Bazaar, Nadiad is for a sum of Rs.56,720/- for 100 Kgs of Hing Afghan Powder and for Hing Aeroplane 555 Powder of different quality and for different quantity. The defendant has contended and has given a specific affidavit in this regard deposing that his financial year begins from 1st day of April of every year and ends on the 31st day of March of the subsequent year. The defendant has also IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 23 of 36 categorically deposed that in the beginning of the new financial year, the invoice numbers are started afresh and the invoice numbers of previous financial years are not continued in the next financial year. This cannot be disputed that the invoice dated 28th February, 2003 will be of financial year commencing from 1st April, 2002 ending on 31st March, 2003 whereas invoice dated 27th December, 2003 would be of financial year commencing from 1st April, 2003 and ending on 31st March, 2004. This is the solitary instance pointed out by the plaintiff. If the new invoice number is started in every financial year there can be more than one invoice bearing the same number in the name of the same purchaser. This fact that two invoices with same invoice number and different dates would not show that the invoices have been fabricated as has been contended by the plaintiff. The products purchased by these two invoices are different and in the circumstances this Court is unable to infer, prima facie, that the invoices produced by the defendant are fabricated and do not establish the prior use of the defendant of trade mark and device `Aeroplane‟ in respect of spices and various other products. The plea that the invoice number 115 dated 10th January, 2003 shows fabrication cannot be accepted. The other invoices before and after the said invoice number are not in synchronization with the said invoice's date. The date as 10th January, 2003 apparently bears a wrong year on account of typographical mistake. The defendant has IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 24 of 36 produced the copies of the other invoices and apparently the date "10th January, 2003" has a typographical error as the date of this invoice should have been "10th January, 2004". The defendant has categorically deposed about this fact and there is nothing to disbelieve the plea of the defendant on the basis of preponderance of probabilities considering the entirety of the documents produced on behalf of defendant. Regarding some invoices the plaintiff has also filed an affidavit deposing that on random enquiries being made, it has transpired that business in the name of some of the purchasers did not exist. Such an affidavit cannot be accepted. Prima facie such invoices have to be accepted and would be proved by the defendant during the trial. On the basis of random enquiry allegedly done by the plaintiff and contending such a purchaser did not exist, it cannot be held that the invoice produced by the defendant is forged.
31. Taking into consideration the advertisements given by the defendant and other documents, the inevitable inference prima facie is that the defendant is also the prior user of the trade mark and device `Aeroplane‟ in respect of spices. This has not been disputed by the plaintiff that he started using the trade mark and device „Aeroplane‟ from September, 2005. If that be so then the prior use of the trade mark and device `Aeroplane‟ by the defendant, prima facie cannot be doubted. The plea of the plaintiff that the conduct of the IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 25 of 36 defendant is malafide and fraudulent also cannot be accepted on the basis of plea and contentions raised by the plaintiff.
32. The learned counsel for the defendant has also contended that Asafoetida in respect of which the defendant is entitled to claim registrations since 1958 and user since 1952 is also a spice. Thus the user of trade mark and device `Aeroplane‟ for spices by the defendant is much prior to that of the plaintiff. Reliance has been placed on a communication which is an email addressed to the defendant by the Head of Technology Transfer & Business Development, Central Food Technological Research Institute, Mysore stipulating that Asafoetida is the common name and the botanical name is `Ferula asafoetida‟ which is a part of the plant Rhizome which is a spice as per ISO list of plant species. The said communication also stipulates that Asafoetida is one of the 75 species out of 109 species listed in ISO list. If that be so the pleas and contentions of the defendant regarding registration and use of Trade Mark for spices much prior to that of plaintiff is further fortified. The learned counsel for the defendant has also relied on (2005) 3 SCC 63, Dhariwal Industries Ltd and Anr. v. M.S.S Food Products where in para 7 at page 68 the Supreme Court had held that if none of the parties have a registered trade mark as on the date of the suit, it cannot stand in the way of entertaining the claim IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 26 of 36 of the plaintiff and granting the plaintiff an injunction in case the plaintiff can show prima facie that he is the prior user of its mark and that it has a prima facie case and that the balance of convenience is in favor of grant of an interim injunction. It was further held that it may be possible for a plaintiff or a defendant to show that an unregistered trade mark otherwise being used by another person earlier had been assigned to it and that it can take on the prior user of its predecessor. Para 7 of the said judgment is as under:
"7. Section 27 of the Trade Marks Act, 1999 provides that nothing in that Act shall be deemed to affect the right of action against any person for passing off goods or services as the goods of another person or as services by another person or the remedies in respect thereof. Therefore, the fact that neither party has a registered trade mark as on the date of the suit cannot stand in the way of entertaining the claim of the plaintiff and granting the plaintiff an injunction in case the plaintiff is in a position to show prima facie that it was the prior user of its mark, that it had a prima facie case and that the balance of convenience was in favour of the grant of an interim injunction. It is provided in Section 39 of the Act that an unregistered trade mark may be assigned or transmitted with or without goodwill of the business concerned. It is, therefore, possible for a plaintiff or a defendant to show that an unregistered trade mark that was being used by another person earlier had been assigned to it and that it can tack on the prior user of its predecessor."
In the case of defendant he was the prior user as a partner of the partnership firm which was nothing but their compendious name and on retirement he was allowed to use it solely and so he can take the prior user.
IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 27 of 36
33. Regarding disclaimer on behalf of defendant advertised by the concerned authorities it is apparent that it is not in consonance with the application of the defendant. Perusal of the application bearing No.872133 dated 19th August, 1999 it is apparent that the application on Form TM-1 in which he has claimed proprietorship of the trade mark and device `Aeroplane‟ continuously since 1952 in respect of Asafoetida and he also proposed to use it in respect of remaining goods and the defendant also agreed to associate the above trade mark with registered trade mark No.184843 in Class 30. On this ground also it cannot be held that the defendant is not the prior user of trade mark and the device „Aeroplane‟.
34. The plea of the learned counsel for the plaintiff is also that even if the defendant has established that his erstwhile firm M/s New Bharat Hing Supplying Company had the registration of Trademark „Aeroplane‟ since 1958 and he is entitled to claim benefit of it, however, the defendant has not been able to show even prima facie that the said trademark was used by the defendant and his erstwhile firm M/s. New Bharat Hing Supplying Company whereas the plaintiff has produced various invoices since 1982 showing continuous use of the trademark „Aeroplane‟ by the plaintiff. IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 28 of 36 According to Mr. Bansal though the defendant has alleged user of trademark „Aeroplane‟ by M/s New Bharat Hing Supplying Company since 1952 and its registration since 1958, however, the trademark was obtained by the said firm malafidely in 1958 as no user has been established. In the circumstances, defendant cannot claim any right on the basis of user of the said Trademark. He also contended that rice is more near and similar to the spices than ASAFOETIDA which is medicinal in nature. The learned counsel contended that the rice and spices are in normal course used as edible items whereas ASAFOETIDA is used for medicinal purpose to cure the ante- spasmodic pain.
35. The plea of the plaintiff that the defendant has failed to produce any document to show the user of trademark „Aeroplane‟ prior to 1982 is to be repelled, prima facie, on the basis of the documents produced on behalf of the defendant on record. The defendant has filed a copy of sampling of the product of the defendant for scientific analysis by Chief Chemist, Public Health Laboratory, Baroda on 29th April, 1958. The defendant has also filed the translation of this document along with certificate of notary certifying that the translation is the correct translation of the document. The said specimen taking order categorically stipulates that the sample of powder Hing (Aeroplane brand) packeting was IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 29 of 36 taken for the purpose of scientific analysis. The packeting of defendant‟s product ASAFOETIDA under the trade name „Aeroplane‟ would be lifted for scientific analysis only if the product was marketed by the defendant. In the circumstances, the plea of the plaintiff that the defendant‟s erstwhile firm M/s. New Bharat Hing Supplying Company has not been able to show use of trade name cannot be accepted. It cannot be held that the erstwhile firm of the defendant had obtained the registration of the trade mark without use with malafide intentions which cannot be accepted in the present facts and circumstances.
36. The other documentary evidence produced by the defendant to show the use of the trademark „Aeroplane‟ prior to 1982 by the erstwhile partnership firm of the defendant, is an order dated 3rd September, 1960 by M/s. J. Manilal & Co. for supplying of liquid (ras) (aeroplane hing), Tin 112 KGs on the defendant. This order placed on the defendant‟s erstwhile firm negates the plea of the plaintiff that the trade mark `Aeroplane‟ was not used by the defendant and the registration of the trade mark was obtained without use with malafide intentions. The defendant has also produced an invoice dated 25th January, 1980 of New Bharat Hing Supplying Company. This invoice though does not have the trademark „Aeroplane‟ or device „Aeroplane‟, like another similar IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 30 of 36 invoice dated 26th May, 1983 which also does not bear the trademark and device „Aeroplane‟. However, both the invoices in their product description use the words ASAFOETIDA „Aeroplane‟.
37. The learned counsel for the plaintiff has also relied on the report of handwriting and Finger Prints expert, Shri Deepak Jain to contend that the invoices produced by the defendant are forged. Perusal of the report reveals that that the alleged expert has relied on `quality of ink strokes‟. How he could rely on quality of ink strokes on the basis of photocopies of carbon copies has not been explained. The report does not indicate the factors on the basis of which it has been inferred that that some of the writings on the photocopies of invoices are written by different handwriting instrument. Perusal of the entire report rather reflect that even prima facie it cannot be held on the basis of this report that the copies of invoices produced by the defendant are fabricated. The report appears to have been manipulated in connivance with alleged handwriting expert and cannot be relied on prima facie.
38. Mr. Bansal, learned counsel for the plaintiff has also contended very vehemently that the defendant has only produced one invoice prior to 1982 and another document that is the sample IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 31 of 36 taking order under the Food Adulteration Act and since other invoices have not been produced, therefore, it should not be inferred that the defendant had been using the trade mark and device `Aeroplane‟. According to him the advertisement allegedly given in the news paper `PHULCHHAB‟ dated 7.11.1980 and 22.11.1980 by the defendant‟s firm which have been produced by the defendant also cannot be relied on as on enquiry it has been revealed that all the record prior to 1980 of same news paper has been destroyed.
39. To counter the allegation of the plaintiff as to why only a few of the invoices and other documents have been produced, defendant has contended that a substantial record of the defendant was burnt in Gujarat Riots in 2002. To this plea of the defendant, the learned counsel for the plaintiff has submitted that if the factory and business premises of the defendant were burnt, then how the record produced by the defendant could survive and in the circumstances it should be inferred that the documents produced by the defendant are fabricated. Learned counsel for the plaintiff has also contended that the invoices produced by the defendant are duplicate copies whereas the invoices showing the use of trademark by the plaintiff are the copies of the original invoices.
IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 32 of 36
40. Perusal of the document shows that both the parties had produced the photocopies of the invoices. The defendant later on has produced copies of invoices of 2003 and 2004 and photocopies of some other invoices. The learned counsel for the plaintiff has also contended that the photocopies of the invoices cannot be considered as no affidavit to consider the secondary evidence has been filed by the defendant.
41. This plea of the counsel for the plaintiff cannot be accepted. At this stage the court has to consider whether prima facie, there are documents which require consideration or not. Whether the parties shall be entitled to lead secondary evidence and prove the same will be decided at the appropriate stage during trial. The plea that some of the photocopies filed by the defendant cannot be considered cannot be accepted in the facts and circumstances. The evidence which has been produced by the defendant, if it is secondary in nature will have to be proved by the defendant in accordance with law. Merely because the photocopies have been produced by the defendant, the same cannot be rejected for consideration at this stage on the ground that no permission has been taken by the defendant for production of secondary evidence and no affidavit has been filed. If this yardstick is to be applied, then even the documents of the plaintiff cannot be considered. In the IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 33 of 36 circumstances, the consideration of the documents of the defendant cannot be denied on the ground that they are the photocopies, secondary evidence and no permission has been taken by the defendant from the Court for their consideration. Similarly the copies of advertisements produced by the defendant cannot be ignored on the plea of the plaintiff that the record of the said news paper prior to 1980 has been destroyed. In the entirety of these facts and circumstances, the inevitable prima facie inference is that the erstwhile firm of the defendant was using the trademark „Aeroplane‟ prior to 1982.
42. The learned counsel for the plaintiff has also relied on 2009 (14) PTC 362, Pioneer Nuts and Bolts Pvt. Ltd. Vs Goodwill Enterprises to contend that Advertisement issued in the News papers hardly constitute the user of mark by a party. However, in the case of defendant, it is not only the advertisement given by them in the news papers but there is other evidence, samples taken under the Food Adulteration Act, the order placed by a dealer and some of the invoices. In the circumstances, the contention of the learned counsel for the plaintiff that the evidence produced by the defendant to prima facie show user prior to 1982 cannot be accepted.
IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 34 of 36
43. Considering the documents filed along with the affidavit of the defendant dated 22nd July, 2006 and 27th November, 2010, prima facie, it cannot be held that the defendant was not using the trademark „Aeroplane‟ prior to 1982 when the plaintiff also got the trademark „Aeroplane‟ registered in its name. It also cannot be held that the trade mark has not been used by the defendant for spices prior to the plaintiff. In the circumstances the plea of the plaintiff that the defendant had not used the trade mark `Aeroplane‟ prior to him cannot be accepted. Therefore, prima facie the trade mark and device of `Aeroplane‟ of the defendant was registered prior to that of the plaintiff and user of the trade mark and device `Aeroplane‟ by the defendant is also prior to that of the plaintiff. In the circumstances the plaintiff does not have a good prima facie case. Since the defendant is prior user and has prior registration of trade mark, the inconvenience caused to the defendant shall be much in case the defendant is not allowed to use mark `Aeroplane‟. Continuation of restrain order against the defendant shall also cause irreparable loss to him.
44. For the foregoing reasons, the application of the defendant being I.A No. 3975/2006 under Order 39 Rule 4 of the CPC is allowed and the interim order dated 20th March, 2006 directing the defendant, his agent, distributors not to use the trade mark IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 35 of 36 `Aeroplane‟ and the device „Aeroplane‟ for spices and cereal including packaging at Annexure `B‟ to the plaint is vacated. IA 3214 of 2006 of the plaintiff under order 39 Rule 1 & 2 of CPC is therefore, dismissed.
CS(OS) No. 480/2006 List before the Regular Bench on original side subject to the orders of the Hon‟ble Chief Justice on 10th December, 2010.
November 26th 2010 ANIL KUMAR, J.
„rs‟
IA NOs.3214/2006 & 3975/2006 in CS(OS) 480/2006 Page 36 of 36