Hydroclave System Corporation ... vs Jain Hydraulic Pvt. Ltd. And Anr.
2002 Latest Caselaw 882 Bom

JUDGMENT

R.M.S. Khandeparkar, J.

1. Heard the learned Advocates for the parties. Perused the records. Admit. By consent, heard forthwith.

2. The appellants/original plaintiffs are challenging the order passed by the lower Court disposing of the application for temporary injunction in the suit filed by the appellants to restrain the respondents/original defendants from passing off the respondents goods and/or business as those of the appellants.

3. The records disclose that in the said Suit No. 14 of 2001, pending before the Vth Additional District Judge, Pune, in the application Exhibit-5, filed by the appellants, ex parte order was granted and since the respondents failed to appear before the Court in answer to the notice thereof, the same was confirmed and the application for temporary injunction was allowed on 14-2-2001. Subsequently, the respondents appeared in the Court on 7-1-2002 and submitted their explanation for non-appearance in the Court in answer to the notice ad summons and also filed an application under Order XXXIX, Rule 4 of the Code of Civil Procedure, 1908 for vacating the order of temporary injunction, simultaneously placing on record their reply to the application for temporary injunction, which was filed by the appellants. The Court below, after hearing the parties, vacated the temporary injunction granted earlier and dismissed the application Exhibit-5. Hence the present appeal, which is confined to the claim of temporary injunction against the respondents to restrain them and their agents from passing off their goods and/or business as those of the appellants during the pendency and till the disposal of the suit.

4. The Court below has refused the relief of temporary injunction, firstly, on the ground that the term "HYDROCLAVE" is not a registered trade mark of the appellants in India and signifies a technology and therefore a descriptive term used as such by the appellants for their product which has not acquired distinctiveness in connection with the appellants business and hence there is no possibility of creating any confusion amongst the prospective buyers and, therefore, the question of passing off does not arise, and secondly, that the question as to whether the respondents have acted in unethical manner by setting up their own business of the nature similar to that of the appellants, and that whether they have acted against the interest of the appellants after obtaining knowledge about the technology and the manufacturing of the machine, do not arise for determination in the case and even if the answers to the said questions are found to be in favour of the appellants, it would not justify the grant of relief of temporary injunction.

5. The impugned order is sought to be assailed on various grounds, including that it apparently discloses arbitrary and capricious exercise of its discretion by the Court below while ignoring the settled principles of law, regulating the grant or refusal of interlocutory injunction in actions for passing off as well as on the ground that the finding that the term "Hydroclave" has not acquired distinctiveness with the business of the appellants is contrary to the materials on record and certain undisputed facts.

6. Considering the grounds of challenge to the impugned order, the materials on record and the submissions by the learned counsel for the parties, the following points arise for determination in this appeal:

 (i)     Whether the impugned order discloses arbitrary exercise of its discretion by the Court below and require interference in the appellate jurisdiction by this Court?  
 

 (ii)    Whether the finding arrived at by the Court below are reasonable and possible on the basis of the materials on record?  
 

 (iii)   Whether the materials on record prima facie disclose that the term "Hydroclave" has acquired distinctiveness in connection with the business of the appellants so as to make the prospective buyers believe that the product marketed with the said term to be that of the appellants and the use of the said term by the respondents for their product can create confusion amongst the buyers?  
 

 (iv)    Whether the conduct of the respondents prima facie discloses unfair trading, warranting action for deceit? 

 

 (v)     Whether prima facie case is made out for the grant of relief of temporary injunction against the respondents or not? In whose favour the balance of convenience lies? And who will suffer irreparable loss by the grant or refusal of the relief?  
 

 7. Undoubtedly, it is well settled that in the matter of grant or refusal of temporary injunction, the Appellate Court is expected not to interfere with the discretion exercised by the lower Court and to substitute its own discretion unless the discretion exercised by the Court below is found to be arbitrary, or capricious, or perverse, or contrary to, or in ignorance of the settled principles of law relating to the grant or refusal of interlocutory injunctive relief. In Wander Ltd. and Anr. v. Antox India P. Ltd., reported in 1990 (Supp) SCC 727, it was held that:  

"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. The 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 Court's exercise of discretion."

8. The appellants' case in brief is that "HYDROCLAVE" is the brand name of the machine developed by the appellant No. 1 - Company by inventing a new technology and process for sterilising bio-medical waste and the said machine has global acceptance and their patent has been registered in Canada and they have applied for registration thereof in India in 1998 and is still pending for disposal. "Hydroclave" is also their corporate name and they have extensive sales under the said name and have acquired trans-border reputation and goodwill. The respondent No. 2, who was working as a representative of the appellants in India, after severing his association with the appellants, since February, 2001 has started manufacturing, marketing and selling his own sub-standard product dishonestly and in breach of the confidence reposed by the appellants, adopting the brand name "HYDRAULIC HYDROCLAVE", including the process. The respondents have deliberately and with mala fide intention adopted the said trade mark "Hydraulic Hydroclave" to cash upon the goodwill and reputation of the appellants and that the use of the said mark would mislead the buyers and the public and cause confusion assuming association of the respondents or some other nexus with the appellants. The appellants, therefore, want to restrain the respondents from dealing with the machine under the mark "Hydraulic Hydroclave" or any other mark deceptively similar to the trade mark "Hydroclave" of the appellants, which may cause confusion or deception and from passing off their goods and/or business as those of the appellants.

9. On the other hand, it is the case of the respondents that "Hydroclave" is a technology or process or method of infectious waste treatment and since it is a technology, no patent can be claimed for the same. The term "Hydroclave" is a descriptive or generic term. The respondents have manufactured a machine which is having a totally different design than that of the appellants and there are no similarities or deceptive similarities with the machine manufactured by the appellants and the product of the respondents marketed by the respondents by the name "Hydraulic Hydroclave". Besides, various companies all over the world are using the said term for their product and are making use of the term "Hydroclave" or "Hydraulic". Various tenders were and are called for Hydroclave and even the plaintiffs had offered their bids in response to such tenders, without claiming privilege over the said term "Hydroclave".

10. Considering the case pleaded and the relief prayed for, it cannot be disputed that the suit in question is basically on an action for passing off on the allegation that the respondents manufacture and sell their own product using the name "Hydroclave", the term in respect of which the appellants claim to have acquired trans-border goodwill and distinctiveness. It is also alleged that the respondents having acquired knowledge of technology and manufacturing of machine from the appellants, the same is being utilised dishonestly for causing confusion in the minds of the buyers of such product. In such a suit, for the purpose of considering an application for temporary injunction on the basis of the facts alleged in the suit for action of passing off, certainly, it would be necessary for the Court to ascertain whether the acts of the respondents prima facie disclose unfair trading with the intention to injure the business of the appellants. The conduct of the parties in such cases would certainly assume great importance.

11. In Erven Warnink BV and Ors. v. J. Townend and Sons (Hull) Ltd., and Ors., reported in (1979) 2 All England Law Reports 927, it was observed that:

"Unfair trading as a wrong actionable at the suit of other traders who thereby suffer loss of business or goodwill may take a variety of forms, to some of which separate labels have become attached in English law. Conspiracy to injure a person in his trade or business is one, slander of goods another, but most protean is that which is generally and nowadays, perhaps misleadingly, described as passing off. The forms that unfair trading takes will alter with the ways in which trade is carried on and business reputation and goodwill acquired. Emerson's maker of the better mousetrap if secluded in his house built in the woods would today be unlikely to find a path beaten to his door in the absence of a costly advertising campaign to acquaint the public with the excellence of his wares."

12. The Apex Court in Wander Limited's case (supra) has held that:

"An infringement action is available where there is violation of specific property right acquired under and recognised by the statute. In a passing off action, however, the plaintiff's right is independent of such a statutory right to a trade mark and is against the conduct of the defendant which leads to or is intended or calculated to lead to deception. Passing off is said to be a species of unfair trade competition or of actionable unfair trading by which one person, through deception, attempts to obtain an economic benefit of the reputation which another has established for himself in a particular trade or business. The action is regarded as an action for deceit. The tort of passing off involves a misrepresentation made by a trader to his prospective customers calculated to injure, as a reasonably foreseeable consequence, the business or goodwill of another which actually or probably, causes damage to the business or good of the other trader."

13. Perusal of the impugned order would apparently disclose that the Court below has not considered the above points while deciding the application for temporary injunction in spite of being fully aware that the interim relief was asked for in an action for passing off. This is apparent from the finding arrived at by the Court below to the effect:

"Whether the defendants' extracting knowledge from the plaintiffs, and setting up their own business of similar nature, and acting against the interests of the plaintiffs, is unethical would not be a question to be determined here. The answer even if favourable to the plaintiffs, would not be sufficient to grant injunction."

It evidently reveals arbitrariness in the impugned order as it discloses refusal on the part of the Court below to consider the relevant points which are to be considered in an action for passing off, which is essentially an action for deceit. Apparently, therefore, the Court below cannot be said to have exercised its discretion judiciously and on the contrary having exercised its discretion arbitrarily, the impugned order warrants interference by the Appellate Court.

14. The rejection of the interim relief is also based on the findings, firstly, that the product being not dealt with across the counter, the buyers for the same are specialised customers and the term being of a descriptive nature, the possibility of confusion is ruled out, and secondly, that the affidavits of two persons are not sufficient to establish distinctiveness as regards the said term with the product of the appellants.

15. As regards the first finding, the Court below has placed reliance in the decision of a learned single Judge of this Court in Rochem Separation Systems (I) Pvt. Ltd., Mumbai v. Tas Engineering Co. Pvt. Ltd., Mumbai, reported in 2001(2) Mh.LJ. 146. The ruling in Rochem Separation System's case (supra) was delivered on the basis of the decision of the Apex Court in S. M. Dyechem Ltd. v. Cadbury (India) Ltd., reported in AIR 2000 SC 2114. The Apex Court, however, in the case of Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., reported in 2001 AIR SCW 1411, referring to the decision in S. M. Dyechem Limited's case in relation to the kind of customers to be considered, has held that the observation in that regard in M/s S. M. Dyechem Limited's case appear to be contrary to the decision of the Apex Court in Amritdhara Pharmacy v. Satya Deo, , wherein it was held that the question has to be approached from the point of view of a man of average intelligence and imperfect recollection and further that the purchasers in India cannot be equated with those in England. It was also observed that the decision on merits in S. M. Dyechem Limited's case does not lay down the correct law. Merely because the term is descriptive and the customers are being specialised one, the same by itself cannot be a justification for refusal of interim relief without considering the other materials and analysing the relevant points narrated above in the matter.

16. In relation to the second finding, the same has been arrived at with reference to the affidavits of two persons, ignoring all other materials placed on record by both the parties. Certainly, such a finding based on reference to the two affidavits themselves, without taking into consideration the other materials on record, cannot be said to have been arrived at on analysis of the materials in their proper perspective.

17. Certainly, the analysis of all the materials on record is necessary to ascertain whether the findings can at all be considered as reasonable findings and are borne out from the record. Being so, the first point for consideration has to be answered in the affirmative while the second in the negative while holding that the impugned order does require interference and further it is necessary to address to the points which are framed above to ascertain whether the party has been able to make out a case for grant of relief or not.

18. It is pertinent to note that before arriving at the finding regarding non-acquisition of distinctiveness pertaining to the term "Hydroclave" in relation to the product and the business of the appellants, the Court below has arrived at the finding to the effect that "Hydroclave" is the improvement over "Autoclave". The said process or technology was first time used by the plaintiffs for disposal of bio-medical waste. Since 1994 they started using the said technology for the said purpose. The machine was designed by the plaintiffs. Another finding which has been arrived at by the Court below is to the effect that the plaintiffs claim that the patent is registered in Canada but no registration number is given and that they have applied for registration in India but it is pending and yet to be decided. There is no grievance made by the respondents about these findings in the impugned order and indeed they are borne out from the record. In other words, though Hydroclave is an improvement over Autoclave and is a system to take out water from any substance used for many other purposes since 1964, the use of the said technology for disposal of the bio-medical waste was done for the first time in 1994 and that it was by the appellants and the machine for such use was also designed by the appellants. In the background of these facts prima facie disclosed from the records, it is necessary to analyse the other materials on record to find out the answer to the third point for consideration.

19. The fact of registration of the patent in favour of the appellants in Canada is not in dispute. Merely because the number thereof is not disclosed, it would not make any difference, when the fact of registration of the patent is not disputed by the respondents. No doubt, the claim for registration of the patent in India is still pending. However, this issue is not relevant for consideration of the suit which is being an action for passing off.

20. The records also prima facie disclose that the machine designed and manufactured by the appellants with the trade mark "Hydroclave" were supplied to various customers from various countries and the list of such customers has been filed by the appellants disclosing the identity of such customers. It was sought to be argued on behalf of the respondents that the contents of the list has not been proved. However, as rightly pointed out on behalf of the appellants, there had been no controversy raised by the respondents regarding the veracity of the contents of the said list of the Hydroclave installations by the appellants before the Court below and therefore it is too late for the respondents to make any grievance about the same at this stage. Various installations at different places and the letters written by the respondents to the appellants showing willingness by different establishments in India for installation of such machines manufactured by the appellants prima facie disclose that the mark "Hydroclave" was also used as the appellants corporate name since 1994 and the appellants had achieved goodwill and worldwide reputation in relation to the said mark "Hydroclave". Such a prima facie finding is also inevitable from the correspondence which has been placed on record. The communication by the letters dated 15-3-1999 and 4-9-1999 is very relevant in this regard. In the first letter in relation to the demand for Hydroclave in India, Dr. D.S. Acharya had informed the appellants that due to the efforts on the part of Mr. Ajay Jain the Delhi market is on the verge of opening up and it would be a start for a huge business to come in future and that the interests of Hydroclave are totally safe in the hands of the respondents. In the second letter, support for Hydroclave was reassured. Further, the letter dated 2-9-1999 was relating to the work done by the respondents for promotion of Hydroclave of the appellants in India, particularly in Northern India. These are some of the communications by the respondents themselves, amongst other correspondence, which prima facie disclose the goodwill acquired by the appellants in relation to the product and the mark "Hydroclave" irrespective of the same being even a technology or process.

21. The fact that the use of the term "Hydroclave" by the respondents for their product could create confusion in the minds of the customers is also prima facie established from the materials on record, more particularly by the communications dated 11-10-2001 by Rajan Jagtiani for Dolphin Pharma, dated 3-10-2001 by Lt. Col. Rekha Batura, Assistant Medical Superintendent, Tata Memorial hospital as well as by letters dated 5-2-2001 from Jan-Gerd Kuhling, and dated 24-10-2001 by Rakesh Solanki, Director, Hindustan Medical Products. These letters prima facie disclose that the manufacture and distribution of the product of the respondents with the name "Hydroclave" being attached to the same has already created confusion in the minds of the buyers of such product.

22. In Erven Warnink's case (supra), relied upon by the learned Advocate for the appellants, the plaintiffs therein were manufacturers and distributors of an alcoholic drink called "Advocaat" made out of a mixture of eggs and spirits. The defendants therein started manufacturing an alcoholic drink in England out of dried eggs and Cyprus sherry, properly called an egg-flip, which they marketed as "Old English Advocaat". Even though the defendants had not passed of their product as that of the plaintiffs and it was unlikely that any purchaser would suppose the defendants' drink to be plaintiffs product, the plaintiffs applied for an injunction restraining the defendants from selling or distributing under the name "Advocaat" any product which was not made out of eggs and spirits without the addition of wine. They relied on the principle that, although they did not have an exclusive right to use the particular trade name of "Advocaat", they were members of a class consisting of all those who had a right to use the name and as such were entitled to protect the name by a passing off action. Though the trial Court had granted injunction, the Appellate Court had set aside the same. However, the House of Lords held that if a product of a particular character or composition was marketed in England under a descriptive name and gained a reputation there under that name which distinguished it from competing products of different composition, the goodwill in the name of those entitled to make use of it, there was protection against deceptive use of the name by competitors, whether the name denoted a product made from ingredients from a particular locality or whether the goodwill in the name was the result of the product being made from particular ingredients regardless of their provenance, since it was the reputation that the product itself had gained in the market by reason of its recognisable and distinctive qualities which had generated the relevant goodwill.

23. In Bharat Enterprises (India) v. C. Lall Gopi Industrial Enterprises and Ors., , a decision which was relied upon by the learned Advocate for the respondents, it has been observed that it is settled law that in actions of passing off, the plaintiff has to show that his mark has become so distinctive that the public regard the same as belonging to a particular source and has held that: "The test in this regard necessarily would be of a normal prudent person as to whether the appellant is selling the goods so marked as by design or calculated the public to believe that they are the goods of the respondent." In the said case, the appellant before the High Court was restrained by the lower Court from using the words "Heat Pillar" for selling their room heaters with the same design, shape, mark, etc. After referring to the decisions of the Apex Court in Amritdhara Pharmacy v. Satya Deo (supra) and Chinna Krishna Chettiar v. Sri Ambalal and Co., . It was held that:

"It is abundantly clear from the aforesaid that the Act does not lay down any criteria for determining what is likely to deceive or cause confusion. Every case must depend upon its own peculiar facts and value of the validity lies in not actual decision in determining what is likely to deceive or cause confusion."

24. A Division Bench of the Punjab and Haryana High Court in the case of General Electric Co. of India (P) Ltd. v. Pyara Singh, , while dealing with the issue as to whether there was similarity in the words "G.E.C." and "A.E.C." in relation to lamps and electrical goods sold by the rival parties, held that a purchaser of ordinary intelligence was bound to confuse because of the similar words being used in the sale of G.E.C. and A.E.C.

25. In yet another decision in the matter of Ranjit Singh v. Jaswant Singh, , it was held that:

"....... It is well settled law that where the name of one particular individual or firm has gained universal reputation in connection with a particular class of goods and a second person enters the trade under a name which is the same or similar and which is likely to cause confusion in the minds of the intending purchasers and the harm thus caused is prima facie such as no compensation would be enough to counterbalance it, Court can restrain that person from trading under a name which is similar by granting injunction."

26. The Calcutta High Court in the case of Allergan Inc. v. Milment Oftho Industries, , held that a plaintiff with a reputation which is established internationally can sue to protect it in India even if it did not have any business activity in the country and the other person could be restrained from using similar names.

27. The learned Advocate for the respondents has relied upon various decisions, namely, in the matter of Jeryl Lynn Trade Mark, reported in Fleet Street Reports (1999) at page 491; in the matters of an application by the Gramophone Company Limited, reported in the Reports of Patent, Design, and Trade Marks Cases, the Illustrated Official Journal (Patents), dated 26-10-1910 on 689; The Shredded Wheat Co. Ltd. v. Kellogg Co. of Great Britain Ltd., reported in Reports of Patent, Design and Trade Mark Cases Vol. LVII (No. 6) page 137, and British Vacuum Cleaner Company Ltd. v. New Vacuum Cleaner Company Ltd., reported in Reports of Patent, Design and Trade Mark Cases. Vol. XXIV, No. 28, page 641.

28. The decision in Jeryl Lynn Trade Mark's case (supra) was on the point of distinction between a sign which is capable of distinguishing for the purpose of trade mark law and after considering the facts of the case, it was held that a sign which is overwhelmingly generic and cannot be used without misdescription on other products is one which is not capable of distinguishing in a trade mark sense and cannot be registered and therefore Jeryl Lynn was just such a thing and the registration was held to be invalid. In Gramophone's case (supra), it was held that to the general public the word "Gramophone" denoted a talking machine with disc, as opposed to cylinder, records, and not to a particular type of talking machine or to any source of manufacture and therefore the registration of the trade mark in the name of Gramophone for the product of the applicant-company was rejected. In the case of Shredded Wheat Co. Ltd., (supra) the proprietors of the Mark No. 500,671, were namely "Shredded Wheat", in Class 42 in respect of biscuits or crackers made from wheat. After six years after registration it was objected on various grounds, including that the said trade mark was at the date of registration and still is wholly descriptive of the goods in respect of which it is registered. After analysing the materials placed on record and considering the law applicable thereto, it was held that "the general impression left by the evidence of the majority is to suggest that the words are descriptive". In British Vacuum Cleaner Company Limited's case (supra), in an action brought by the plaintiffs to restrain the defendants from using the words "Vacuum Cleaners" as part of their name, on consideration of all the materials placed on record it was held that a scheme or design by the defendant-company to take unfair advantage of the plaintiff-company by the adoption of the name New Vacuum Cleaner Company was not proved, and that no deception would occur and therefore the action was dismissed. In the facts and circumstances of the case in hand, none of these decisions are of any help.

29. That brings the next point for consideration. However, while considering the same one has to bear in mind the decision of the Apex Court in Wander Limited's case wherein it has been ruled that in passing off action, the plaintiffs right is against the conduct of the defendant which leads to or is intended or calculated to lead to deception and the action is regarded as action for deceit. Further, the Apex Court in the case of N.R. Dongre and Ors. v. Whirlpool Corporation and Anr., , relied upon by the learned Advocate for the appellants, had refused to interfere with the ruling of the Delhi High Court to the effect that no one can be permitted to trade by deceiving or misleading the purchasers or to unauthorisedly divert to itself the reputation and goodwill of others, as also following the decision of the Delhi High Court :--

"The concept and principle on which passing off action is grounded is that a man is not to sell his own goods under the pretence that they are the goods of another man. A trader needs protection of his right of prior user of a trade mark as the benefit of the name and reputation earned by him cannot be taken advantage of by another trader by copying the mark and getting it registered before he could get the same registered in his favour. We see no reason why a registered owner of a trade mark should be allowed to deceive purchasers into the belief that they are getting the goods of another while they would be buying the goods of the former which they never intended to do. In an action for passing off it should not matter whether misrepresentation or deception has proceeded from a registered or an unregistered user of a trade mark. He cannot represent his own goods as the goods of somebody else."

30. It will also be appropriate to take note of the decision of the Apex Court in the case of Amritdhara Pharmacy (supra). Therein the respondents wanted "Lakshmandhara" to be registered as their trade mark in relation to a medicinal preparation for the alleviation of various ailments. That was objected to by the appellants on the ground that their trade mark "Amritdhara" had already been registered in respect of similar medicinal preparation. The point which arose for consideration was that the expression "Lakshmandhara" was likely to deceive the public or cause confusion to the trade. After considering the provisions of law contained in Sections 8 and 10 of the Trade and Merchandise Marks Act 43 of 1958, the Apex Court observed thus:

"It will be noticed that the words used in the sections and relevant for out purpose are "likely to deceive or cause confusion". .... Therefore, every case must depend on its own particular facts, and the value of authorities lies not so much in the actual decision as in the tests applied for determining what is likely to deceive or cause confusion. ......."

31. Reverting to the facts of the case in hand, prima facie, the materials on record reveal that the respondents had been acting as representatives of the appellants and also acquired from the appellants the knowledge about the technology as well as information regarding the design and manufacture of the machine for disposal of the bio-medical waste utilised by the appellants and thereafter severed their connection with the appellants. The fact of the respondents having acted or represented the appellants in India is apparent from the correspondence between the parties. The letter dated 15-3-1999 confirms the said fact on the part of the respondent No. 2. The admission in that regard is also revealed from another fax message dated 15-3-1999 of sales by Dr. D.S. Acharya on behalf of the respondents, assuring the interest of the appellants being safe in the hands of the respondents. Besides, the finding of the Court below is also clear in that regard. In fact the lower Court has also clearly held that the respondent No. 2 acted as the representative or agent of the appellants since 1998 and learnt everything about the technology from the appellants and that the respondents were not aware of the said technology prior to 1998 and since 1999 the respondents started manufacturing the machine "Hydraulic Hydroclave", which is a waste steriliser used for bio-medical waste treatment. These facts are also confirmed by the communication dated 1-9-1999 by the appellants.

32. By the letter dated 1-9-1999, the respondents had informed that the Command Hospital, Bangalore were interested in installation of Hydroclave Model H-25 being the product of the appellants. However, ultimately the machine which was supplied was the one which was manufactured by the respondents. The materials on record prima facie therefore reveal that the said hospital was all the time informed about the product of the appellants but the actual supply was that of the respondents. The communication dated 1-9-1999 apparently discloses that the respondents had informed the appellants that: "Now they want us to get a letter from Hydroclave, Canada on their letterhead stating that M/s Jain Hydraulics Pvt. Ltd., New Delhi, is a sole agent in India to deal with Defence Establishments and is allowed to negotiate and finalise on Hydroclave Systems, Canada behalf. Pursuant to the said communication, the appellant had replied confirming the respondent No. 1 having been the authorized representative of the appellants and as such are entitled to enter into sales negotiations with the Indian Defence Establishments for the purpose of Hydroclave sales. At the same time, the records also reveal that the respondents had assured the appellants that the respondents belong to Hydroclave family and this is apparent from the communications dated 2-9-1999 and 4-9-1999 by the respondents to the appellants.

33. The activities on the part of the respondents in the course of the business relating to their product prima facie disclose intention to create an impression in the trade that the respondents represent the appellants and the product being supplied is of the appellants. A prima facie finding in that regard is also evident from the documents on record, placed in the form of communication between the parties which include the letter dated 3-10-2001 of Lt. Col Rekha Batura of the Tata Memorial Hospital, letter dated 11-10-2001 by Dolphin Pharma and letter dated 24-10-2001 from Rakesh Solanki, Director of Hindustan Medical Products, These materials on record prima facie make out a case of deceit on the part of the respondents in relation to the product of the appellants, more particularly by use of the mark "Hydroclave". The respondents are, therefore, prima facie engaged in the acts of representing themselves as part of the family of the appellants and at the same time supplying their own product as that of the appellants, using the term "Hydroclave" in the name of the product manufactured by the respondents. Prima facie, therefore, the term "Hydroclave" refers to the key word which is helpful to the respondents in such activities. This being unfair trading on the part of the respondents to the prejudice of the appellants, certainly the appellants would be entitled for necessary protection against such acts on the part of the respondents.

34. Prima facie, therefore, it is established that the appellants have acquired distinctiveness in relation to the mark "Hydroclave" in connection with their product and with the use of the term "Hydroclave" and the conduct of the respondents in relation to their product disclose acts of representing themselves as part of the family of the appellants. Apparently, if the respondents are allowed to carry on with the manufacture and supply of their product with the name "Hydroclave", it is bound to confuse the customers and cause irreparable loss to the appellants. Prior user of the mark "Hydroclave" and the reputation acquired by the appellants in relation to the said mark prima facie indicate the goods with such mark to have been originated from the appellants and the use of such mark for the product of the respondents prima facie disclose intention to pass off their product as those of the appellants or at least likelihood of the buyers being confused or misled into that belief. The refusal of injunctive relief in the circumstances of the case to the appellants therefore is bound to incur irreparable injury to their reputation and goodwill since trade in the name of "Hydroclave" has been prima facie established to be associated with the appellants apart from being the first and prior user. The balance of convenience also therefore lies in favour of the appellants.

35. Before parting with the matter, it is also necessary to refer to the oral application by the respondents made after the conclusion of the arguments. It is to be noted that in the course of the arguments, the respondents wanted to refer to two documents in support of their contentions, namely (i) letter of the Government of India, Ministry of Defence, New Delhi, dated 26-2-2002, (ii) zerox copy of the Manual on Municipal Solid Waste Management, prepared by the expert committee. When the said documents were sought to be referred to by the learned Advocate for the respondents, objection was raised on behalf of the appellants that though the respondents had sought to rely upon the said documents, leave in that regard was not granted by the trial Court. Being unaware of details in that regard during the proceedings before the trial Court, the learned Advocate for the respondents could not effectively meet the objection raised on behalf of the appellants. However, considering the fact that after the conclusion of the arguments the Court time for the day being over, the judgment had to be reserved for the next week, before the day of the judgment, the learned Advocate for the respondents, by oral motion submitted to the Court that the records before the trial Court nowhere disclose refusal of leave to rely upon the said documents and, therefore, he requested that the said documents be considered while delivering the judgment in the matter. An affidavit by the Advocate who had appeared for the respondents in the trial Court and the copy of the Roznama of the trial Court proceedings were also placed on record on the said occasion. In the affidavit filed by the said Advocate for the respondents in the trial Court, it has been stated that the production of the documents was allowed by the trial Court. However, in the affidavit in reply filed by the Advocate for the appellants, who had stated to have appeared before the trial Court, it is stated that pursuant to the objection raised by the appellants to the production of the said documents, the trial Court had informed the Advocates that the said documents could be allowed to be kept on record but would not be considered for the purpose of interlocutory injunction application. Both the Advocates for the parties were heard in the matter. The zerox copies of the applications which were filed before the Court below along with the list of documents produced along with the affidavit of the learned Advocate for the respondents, who had filed the affidavit disclose that the documents which were enumerated in the said list were allowed to be placed on record. The Roznama entry dated 4-3-2002 discloses that Exhibit-D/43 which is the list of the documents filed by the respondents along with the copies of the documents was also placed on record. However, neither the entries in the Roznama sheet nor the zerox copies of the application of the document Exhibit-D/43 disclose any order having been passed by the Court below permitting the respondents to rely upon the said documents. Undisputedly, the said documents were not filed along with the reply or the application for modification of the temporary injunction order passed by the trial Court. Being so, in order to enable the respondents to rely upon the said documents, it was necessary for the respondents to seek leave of the trial Court. The records nowhere disclose any such leave having been granted in favour of the respondents. The trial Court also has not considered the said documents while passing the impugned order and that is apparent from the order itself, In case the respondents wanted to rely upon the said documents at the appellate stage, the respondents were required to follow the procedure laid down under the Code of Civil Procedure, 1908. Having not done so, to permit the respondents to rely upon the same at this stage, is bound to take the appellants by surprise and therefore it is not permissible for this Court to allow the respondents to rely upon the said documents at this stage. Besides, the affidavit filed by the Advocate for the respondents, neither discloses any reason for non-production of the documents along with the application for variation of the injunction order nor it explains the reason for non-production of those documents before the arguments in the appeal, nor it explains how the said documents are relevant and necessary for the decision in the appeal. Hence the oral request on behalf of the respondents to consider the said documents is rejected.

36. In the result, therefore, the appeal is allowed. The impugned order is hereby set aside and the earlier order granting Exhibit-5 is hereby revived and confirmed.

37. On oral request by the learned Advocate for the respondents, the order passed today is stayed for a period of eight weeks. Certified copy expedited.