Mr. Harsh Tiwari, Adv .
Mr. Bhupendra Gupta, Adv.
Mr. Samriddha Sen, Adv.
Mr. Anwar Hossain, Adv.
Ms. Ojasvi Gupta, Adv.
1. The defendant in a suit for passing off has preferred the instant appeal
against a common judgment and order dated February 25, 2025 passed in
I.A. No. G.A. (COM) 1 of 2024 and I.A. No. G.A. (COM) 6 of 2025 (both the
IAs having been filed in connection with IP - COM 7 of 2024. By the order
impugned in the present appeal, I.A. No. G.A. (COM) 1 of 2024 has been
allowed, thereby confirming the ad interim order dated April 08, 2024
passed in the said application and I.A. No. G.A. (COM) 6 of 2025, which
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had been filed for vacating the aforesaid ad interim order dated April 8,
2024, has been dismissed. Since all the necessary papers that were there
before the learned Single Judge are there before us, therefore by consent
of parties we have heard the appeal itself at the stage of hearing the
application for stay (hereafter "stay application") filed by the appellant.
2. The respondent (i.e. plaintiff before the Trial Court) has instituted a suit
being I.P. (COM) No. 7 of 2024 praying inter alia for a decree of perpetual
injunction restraining the defendants from passing off their products
bearing the trade mark "METERIVA" as if the same are the goods of the
plaintiff bearing the trade mark "METRAVI". Briefly summed up the plaint
case is as follows.
together with the goodwill of the business of the said products for
sufficient consideration by way of a deed of assignment of even
date.
(g) Pursuant thereto the plaintiff applied to the trademark registry and
got the said mark "METRAVI" recorded in its favour.
(h) The said trademark "METRAVI" has thenceforth been used by the
plaintiff extensively, openly and continuously and the plaintiff has
also been using the domain name www.metravi.com.
(i) It has been averred that since the plaintiff has been using the said
trademark "METRAVI" since 1998 (i.e. initially through its
predecessor in interest namely, M/s Arun Enterprises and
subsequently by itself upon assignment), therefore the said
trademark is inextricably associated with the name, identity and
business of the plaintiff and that plaintiff has spent considerable
amount of money for establishing such trademark. The plaintiff
has an unparalleled goodwill and reputation of more than two
decades attached to the said trademark.
(j) In fact, the said trademark used by the plaintiff satisfies all the
parameters that are required by the provisions of Section 2(1)(zg) of
the Trademark Act, 1999 for the purpose of achieving the status of
a well-known trademark.
(k) The plaintiff has a large consumer base of more than 40,000
existing customers and the said products dealt in by the company
are sold all over India. The plaintiff has over 900 dealers and the
plaintiff has substantially invested towards advertisement and
promotion of its goods bearing the trademark "METRAVI".
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(l) On or about June 21, 2022, the defendant (a company which got
incorporated under the Companies Act, 2013 only on November 16,
2016), approached Mr. Vikram Raj Bhansali through one of its
directors through the website LinkedIn and expressed its
willingness to sell the products of the plaintiff.
(m) The defendant had complete knowledge of the goodwill and
reputation attached to the plaintiff's products sold under the
trademark and corporate name "METRAVI".
(n) In October, 2023, the defendant approached the plaintiff with a
request for allowing it to act as a distributor of its products. The
defendant purchased a few products from the plaintiff but such
business relationship did not continue. In the first week of January
2024, the plaintiff discovered that the defendant had been offering
for sale, selling, manufacturing, marketing, advertising and
otherwise dealing in electrical test products, scientific and
industrial testing products under an identical and deceptively
similar mark "METERIVA" on the interactive e-commerce websites
of defendant nos. 2 and 3.
(o) On or about January 5, 2024, the plaintiff also discovered that the
defendant had applied for and obtained registration of deceptively
similar and identical device mark under class 9 in respect of
several of its products (mentioned in paragraph 17 of the plaint). It
was further found out that the defendant had also obtained a
domain name www.meteriva.com for advertising, marketing and
selling its products which were inferior to those of the plaintiff. The
defendant has thus been passing off its inferior quality products
under identical and deceptively similar trademark "METERIVA"
thereby deceiving the customers into purchase the same as if the
same were the products of the plaintiff bearing the well-known
mark "METRAVI".
(p) Feeling thus aggrieved the plaintiff has approached this Court by
filing the aforesaid suit praying for several reliefs including a
decree of perpetual injunction restraining defendants from passing
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off their inferior quality products bearing the impugned trade mark
"METERIVA" as plaintiff's goods bearing the trade mark "METRAVI"
and delivery up and cancellation of any and/or all labels, dyes,
block, etc. and other materials bearing the identical and
deceptively similar mark "METERIVA" or any deceptively similar
mark in any form whatsoever.
3. Along with the plaint, the plaintiff also filed an application for injunction
being G.A. (COM) 1 of 2024 praying inter alia for an order of injunction
restraining the defendants from passing off their goods/products bearing
the impugned trademark "METERIVA" as the plaintiff's goods/products
under the trademark "METRAVI". The said application was initially heard
ex parte on April 8, 2024 and an interim order was passed in terms of
prayer (a) of the said application.
4. The appellant/defendant used an affidavit in opposition to the said
application for injunction filed by the respondent/plaintiff denying all the
material allegations made in the said application. Feeling aggrieved by
the ex-parte ad-interim order, the appellant/defendant also filed an
application being G.A. (COM) 6 of 2025 seeking vacation thereof.
5. The case made out by the appellant/defendant in its pleadings before the
learned Single Judge (i.e. in its affidavit in opposition and its application
being G.A. (COM) 6 of 2025 seeking vacation of the ex-parte ad-interim
order dated April 08, 2024) now needs to be noticed. The same is
synopsized hereunder:
c) The defendant has made a considerable customer base in the said
span of 8 years and it employs more than 10 personnel of skilled and
semi-skilled staff including its sales representatives for the purpose
of its said business.
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d) The defendant is the honest and prior adopter and user of the
word/mark "METER" as essential part of its trademark "METERIVA",
which is composed by integration of the word "METER" and "IVA".
While the word "METER" is a generic term in which no one can claim
proprietary interest, the word "IVA" has been derived from Slavic and
Hebrew which means "God is gracious". The defendant has thus
sought to demonstrate that the origin of the name "METERIVA" is in
no way associated with the plaintiff's trademark "METRAVI". The
defendant has also pointed out that its mark is "associated with a
sign wave at bottom" which makes the same entirely different from
that of the plaintiff's mark.
e) The defendant honestly adopted a distinctive trademark "METERIVA"
for its industrial meter in the year 2022 upon the same being
registered on April 20, 2022. The colour combination of the said
registered trademark of the defendant is entirely dissimilar with that
of the plaintiff and the said defendant has been using its registered
trademark in relation to several products including digital
thermometers and industrial meters.
f) Upon the mark "METERIVA" being registered in the name of the
defendant, the said defendant has exclusive right to use the same in
course of trade and commerce in terms of Section 28 of the Trade
Marks Act, 1999.
g) The products of the said defendant are sold extensively throughout
India and are widely relied upon as cost effective and reliable
products.
h) The plaintiff has suppressed material facts as regards the alleged
deed of assignment dated December 17, 2015 whereby M/s Arun
Enterprises sold, conveyed and assigned the trade mark "METRAVI"
together with the goodwill of the business to the plaintiff. The alleged
deed of assignment reveals that the consideration/value of the mark
"METRAVI" has been shown to be only Rs.10,000/-.
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i) The two competing trademarks are poles apart and there is no
similarity in the two. The plaintiff is therefore not entitled to any
interim order.
6. The plaintiff/respondent has in turn denied the appellant's assertions in
its affidavit in opposition by an affidavit in reply.
7. Both the said applications (i.e. the plaintiff's application for injunction
and the defendant's application for vacating of the ad-interim order) were
taken up together by the learned Single Judge and after hearing the
respective parties, the learned Single Judge has by a common judgment
and order dated February 25, 2025, been pleased to confirm the ex parte
ad interim order of injunction passed on April 8, 2024 while dismissing
the appellant/defendant's application for vacating of the interim order.
8. It is this judgment and order dated February 25, 2025 which has been
impugned in the present appeal. Parties have made both oral as well as
written submissions before us.
SUBMISSIONS OF THE PARTIES
9. Mr. Sayantan Basu, learned Senior Advocate appearing for the
appellant/defendant opened his arguments by submitting that since the
suit is one for passing off and not for infringement, the most important
factor was goodwill and reputation in the plaintiff's trademark
"METRAVI". It was submitted that the plaintiff cannot claim any right,
goodwill or reputation in the mark, as in the Balance Sheet of the
plaintiff it has declared that it has no intangible asset. It was contended
that once the said plaintiff itself has declared that it has no intangible
asset, it cannot be permitted to claim any right or goodwill over any
mark, as a mark is also an intangible asset. It was further contended
that although the impugned order records such submission, however,
such aspect has not been dealt with at all.
10. Mr. Basu next submitted that as the packages of the rival products
including the colour combination thereof were entirely different, there
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was no chance of deception. It was further submitted that while the
plaintiff uses various colours being blue, black etc. the defendant only
uses green and white colour palette with a black background.
11. It was then submitted by Mr. Basu that the packages of the rival parties
are also different from each other in that while the packages of the
defendant clearly revealed the source or origin of the product, the
packages of the plaintiff only contains a sticker which negligibly
mentions the name of the plaintiff. It was sought to be clarified that as
the source or origin of the plaintiff's goods cannot be seen by an unwary
purchaser while that of the defendant was clearly visible, there was no
chance of deception.
12. It was further contended that as the class of consumers in the test and
measurement equipment market are technical professionals or informed
buyers, who are more likely to be interested with the specification of the
products there was no chance of deception in the wake of the apparent
differences in the packaging and information provided thereat. Mr. Basu
criticized the order impugned by submitting that the class of consumers
has also not been considered by the learned Single Judge.
13. Mr. Basu then submitted that there was no phonetic similarity between
the rival marks and that the impugned order merely recorded the factors
for phonetic similarity, without discussing as to how such factors were
applicable to the facts of the case.
14. It was submitted that in a case of passing off, both visual and phonetic
similarity must be seen but from a visual standpoint, the logos of
'METERIVA' and 'METRAVI' are clearly distinct in font, style, color
combination, graphic symbols, presence of tagline, and overall layout.
Reliance was placed on paragraphs 28 and 29 of the judgment rendered
by the Hon'ble Supreme Court in the case of Kaviraj Pandit Durga Dutt
Sharma vs. Navaratna Pharmaceutical Laboratories1 for the
proposition that added matter is sufficient to distinguish the goods of the
1 AIR 1965 SC 980
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defendant from that of the plaintiff and the marks have to be seen as a
whole.
15. It was contended that the impugned order did not contain any discussion
on visual similarity and that no reasons had been assigned in the
impugned order for arriving at the conclusion. It was further submitted
that although the decision of Cadila Health Care Ltd. vs. Cadila
Pharmaceuticals Ltd.2 had been cited in the order yet the tests for
passing off had not been applied. Reliance was placed on the
observations of the Hon'ble Supreme Court in paragraphs 33 and 35 in
Cadila Health Care Ltd.2(supra) for demonstrating the tests for passing
off.
16. Mr. Basu next submitted that the mark "METRAVI" of which plaintiff
claims to be an assignee carries no goodwill. He submitted that the Deed
of Assignment recorded that the consideration for assignment was only
Rs.10,000/- which itself was an indicator that there was/is no goodwill
in the said mark. It was submitted that if there had been any goodwill,
the consideration amount would have been far more than Rs.10,000/-.
The impugned order was criticized by submitting that the order did not
discuss this aspect at all, but merely held that the same was irrelevant.
17. Mr. Basu then proceeded to demonstrate the difference in the two names.
It was submitted that the first part of the two rival names, i.e. 'MET',
apart from being common is also descriptive of the product, being
industrial meters, and hence, incapable of being monopolized. As regards
the second parts of the two rival words, it was submitted that the same
were different. It was contended that mere interchange of letters led to
completely different pronunciation, thereby ruling out any chance of
confusion. The order was also denounced by submitting that the same
did not contain any discussion on the aforesaid aspect.
18. The impugned order was then faulted by submitting that the same
incorrectly records that the defendant applied for registration after
2 (2001) 5 SCC 73
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correspondences were exchanged between the parties while the
defendant had admittedly applied for registration on April 20, 2022,
whereas the discussions took place on June 23, 2022. It was submitted
that the defendant received the Purchase Order on 7th June, 2022, for
Meteriva Borescope from MTU and as such the allegation that the
defendant had adopted the mark after discussions with the plaintiff was
incorrect and that there was no question of any misrepresentation.
19. It was also submitted that since the plaintiff knew about the defendant's
existence since June, 2022, therefore, the mandatory procedure for
mediation under Section 12A of the Commercial Courts Act, 2015 ought
to have been adopted, inasmuch as the suit was filed only in April, 2024.
Reliance in this regard was placed on an unreported decision dated 2nd
December, 2024 in the case of SRMB Srijan Private Limited vs. B. S.
Sponge Pvt. Ltd. (APO 157/2023).
20. It was lastly submitted that the impugned order is arbitrary and
unreasoned inasmuch as while it does not even discuss the defendant's
explanation for adoption of the mark "METERIVA" it has reached the
conclusion that the explanation is unsatisfactory.
21. Ms. Susrea Mitra, learned Advocate appearing for the
respondent/plaintiff started by submitting that the Appellate Court
should not interfere with the exercise of discretion except where the
discretion had 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 injunction.
22. It was then submitted that upon a bare perusal of the Memorandum of
Appeal and the Stay Application, it would be evident that the Appellant
has not taken any ground to show that the discretion by the learned
Single Bench, in its judgment and order dated 25th February, 2025, has
been exercised arbitrarily or capriciously or perversely or in ignorance of
the settled principles of law regulating grant or refusal of interim
injunction.
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23. Ms. Mitra further submitted that as the plaintiff has instituted the suit in
question for passing off thereby demonstrating the confusion created due
to the adoption of identical and deceptively similar marks "METERIVA"
and "METERDI" by the appellant/respondent therefore the order of
injunction has rightly been granted. It was submitted that it is settled
law that where the defendant had adopted or imitated the plaintiff's
distinctive mark or business name the order of injunction must follow
and that the learned Trial Court rightly relied on the principles laid down
in the case of Laxmikant V. Patel vs. Chetanbhai Shah & Another3.
24. Referring to the factual narration in the plaint it was submitted that the
respondent/plaintiff is a prior user and prior adopter of a well-known
trademark "METRAVI" since 1st April, 1998, inter alia, for digital clamp
tester, multimeter and electrical and electronic test and measuring
instruments under class 9. It was submitted that the said mark was first
adopted by the respondent/plaintiff's predecessor-in-interest Mr. Vikram
Bhansali through M/s Arun Enterprise and that such well-known mark
"METRAVI" (word) has been granted registration by learned Trade Mark
Registry. It was further submitted that the respondent/plaintiff on 12th
August, 1998 also obtained registration of the domain name (being
www.METRAVI.com) which bears the mark "METRAVI" and that on
March 25, 2009, the respondent/plaintiff company was incorporated
bearing the trademark "METRAVI". Ms. Mitra submitted that the said
trademark was transferred, conveyed and assigned to the
respondent/plaintiff by its predecessor-in-interest on 17th December,
2015. Ms. Mitra stressed that the mark 'METRAVI' is being used
continuously, uninterrupted, exclusively and openly by the
respondent/plaintiff since 1998, for more than 2 (two) decades, though
initially through its predecessor-in-interest.
25. It was submitted that the respondent/plaintiff has invested substantially
towards advertising and promotion of its goods bearing the mark
"METRAVI" and has made huge sales of its goods under the said
3 (2002) 3 SCC 65
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trademark. Ms. Mitra invited the attention of the Court to the Annual
Reports, the plaintiff's brochure, several invoices and the certificate
issued by a Chartered Accountant all of which have been annexed to the
to the application for stay filed in the present appeal to demonstrate that
the plaintiff has a sizeable customer base and has sufficient goodwill and
business reputation.
26. It was further submitted that the appellant/defendant's explanation that
the expression "METER" is a generic term which cannot be monopolized
and that the term "IVA" is derived from Slavic and Hebrew which means
God, is nothing but an afterthought. Ms. Mitra reiterated that the
impugned mark "METERIVA" is phonetically, structurally and visually
identical and deceptively similar to the respondent/plaintiff's mark
"METRAVI". She also urged that the trade dress and trade get up of the
genuine products of the respondent/plaintiff (bearing its mark
"METRAVI") and the inferior products of the Appellant/Defendant
(bearing the impugned mark "METERIVA") are identical and deceptively
similar. She also emphasized that it was evident that as the plaintiff's
mark "METRAVI" and the appellant/defendant's mark "METERIVA" are
being used in respect of identical category of goods (i.e., goods falling
under Class 9), the users of the genuine products of the
respondent/plaintiff and the impugned products of the
appellant/defendant are one and the same. It was submitted that the
appellant/defendant is encashing upon the goodwill and reputation of
the respondent/plaintiff by creating confusion.
27. It was submitted that the appellant/defendant is trying to capture the
entire market of the plaintiff by trying to sell its products through the
online market and e-commerce websites and that it is being done to
target the plaintiff's customers throughout India. We were taken through
two print-outs of pages from the website of Amazon an online retail
platform to demonstrate that when enquiries were made for products of
the plaintiff company by feeding the name "METRAVI" the product of the
appellant/defendant also got displayed. It was submitted that the
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algorithm of the online retail platform is unable to differentiate between
the two names i.e. "METRAVI" and "METERIVA" and as such is pushing
up products of "METERIVA" also along with those of "METRAVI."
28. Ms. Mitra then submitted that the learned Single Judge had granted the
ex parte ad interim order dated 8th April, 2024 in terms of prayer (a) of
I.A. G.A. (COM) 1 of 2024 on being satisfied about the existence of
material justifying such grant but despite such order, the
appellant/defendant continued to deal in its products bearing the
impugned deceptively similar marks through various electronic/digital
means and modes.
29. Ms. Mitra pointed out that such fact was also taken note of by the
learned Single Judge in its order dated October 3, 2024 and the learned
Single Judge was pleased to appoint a Special Officer for visiting the
known factories, godowns and places of business of the
appellant/defendant and to seize and take possession of the impugned
products of the appellant/defendant bearing the mark "METERIVA" and
any other deceptively similar and identical marks. Such order was stated
to have been passed on the respondent/plaintiff's application under
Order XXXIX Rule 2A of the Code of Civil Procedure, 1908 (hereafter the
Code).
30. It was indicated that the Report of the Special Officer demonstrates that
the appellant/defendant had no intention of complying with the ad
interim order dated April 8, 2024, despite being aware of the same. It was
further submitted that it was discovered from the said Report that the
appellant/defendant was using another identical and deceptively similar
mark "METERDI".
31. Relying on the definition of "deceptive similarity" under Section 2(1)(h) of
the Trademarks Act, 1999 it was submitted that both the marks used by
the appellant/defendant i.e. "METERIVA" as well as "METERDI" were
deceptively similar to the respondent/plaintiff's mark "METRAVI".
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32. Responding to the appellant/defendant's contention that the
Independent Auditor's report mentioned that the Company did not have
any intangible asset, it was submitted that there was a certificate issued
by a Chartered Accountant annexed to the plaint that indicated the
turnovers of the plaintiff and that the same provided sufficient basis for
the plaintiff's claim to goodwill. It was also submitted that the suit
involves a question of passing off which requires the respondent/plaintiff
to be a prior user and that the respondent/plaintiff has successfully
demonstrated the same. It was further submitted that the
appellant/defendant has failed to show that the respondent/plaintiff is
not prior user existing for two decades and that the appellant/defendant
is not a new entrant in the market. It was then submitted that the Indian
Accounting Standards - AS 26 and 38 clarify that an intangible asset
cannot be recognized if it is not identifiable or the cost of the asset
cannot be measured reliably.
33. Ms. Mitra further contended, while relying on messages exchanged
between one Mr. Prasad Nidhi and Mr. Vikram Bhansali on the "Linked
In" platform (copies whereof have been annexed to the plaint as well as
the stay application), that the defendant/appellant has adopted the mark
"METRAVI" having full knowledge about the plaintiff's mark and about
the plaintiff being the exclusive user thereof since a point of time much
prior to that of the defendant/appellant. Our attention was drawn to a
Director/Signatory Details downloaded from the website of the Ministry
of Corporate Affairs as annexed to the stay application to show that one
Mr. Prasad Nidhi has been shown to be one of the Directors of the
appellant/defendant. We were then taken through messages exchanged
between the said Mr. Prasad Nidhi and Mr. Vikram Bhansali (one of the
directors of the plaintiff, who as claimed by the plaintiff had also coined
the name "METRAVI") on the "Linked In" platform. Ms. Mitra then took
us to an Invoice having "Issue Date" July 17, 2022 annexed to the stay
application and submitted that it was only after the defendant/appellant
established contact with the plaintiff that the defendant begun its
business of manufacturing equipment and dealing with the same under
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the trademark "METERIVA". Ms. Mitra also submitted that before the
learned Single Judge reliance had been placed by the plaintiff on a
passage from "McCarthy on Trademarks and Unfair Competition" to assert
that if a well-known mark has been used in identical manner by a
subsequent user or a junior user, such junior user would be obliged to
render an explanation to the motive in selecting such mark. She
submitted that the explanation given by the defendant by breaking the
word "METERIVA" into "METER" and "IVA" while seeking to rely on the
meaning of the said terms is wholly unacceptable.
34. Mr. Basu in reply, attempted to counter the salvo by inviting our
attention to the date of the purchase order i.e. June 07, 2022 on the
invoice issued on July 17, 2022. Mr. Basu submitted that the said date
clearly established the fact that the defendant had been using the
impugned mark from a time prior to the conversation between the said
two directors. It was also submitted that the said conversation between
the two directors relied on by Ms. Mitra had nothing to do with the
appellant's business using the trademark "METRAVI" and that the same
was for the purpose of the other brand of the plaintiff i.e. CEM.
ANALYSIS AND DECISION:
35. We have heard the learned Advocates for the respective parties and have
perused the material on record.
36. It is now very well settled that in order to maintain an action for passing
off the suitor must pass the classical trinity test as recognized by the
Hon'ble Supreme Court in the case of S. Syed Mohideen vs. P.
Sulochana Bai4. Paragraph 31.1 of the report deserves notice in the
present context:
"31.1. Traditionally, passing off in common law is considered to be a right for
protection of goodwill in the business against misrepresentation caused in the
course of trade and for prevention of resultant damage on account of the said
misrepresentation. The three ingredients of passing off are goodwill,
misrepresentation and damage. These ingredients are considered to be
4 (2016) 2 SCC 683
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classical trinity under the law of passing off as per the speech of Lord Oliver
laid down in Reckitt & Colman Products Ltd. v. Borden Inc. [Reckitt & Colman
Products Ltd. v. Borden Inc., (1990) 1 WLR 491 : (1990) 1 All ER 873 (HL)]
which is more popularly known as "Jif Lemon" case wherein Lord Oliver
reduced the five guidelines laid out by Lord Diplock in Erven Warnink Besloten
Vennootschap v. J. Townend & Sons (Hull) Ltd. [Erven Warnink Besloten
Vennootschap v. J. Townend & Sons (Hull) Ltd., 1979 AC 731 at p. 742 : (1979)
3 WLR 68 : (1979) 2 All ER 927 (HL)] ("the Advocaat case") to three elements :
(1) goodwill owned by a trader, (2) misrepresentation, and (3) damage to
goodwill. Thus, the passing off action is essentially an action in deceit where
the common law rule is that no person is entitled to carry on his or her business
on pretext that the said business is of that of another. This Court has given its
imprimatur to the above principle in Laxmikant V. Patel v. Chetanbhai
Shah [Laxmikant V. Patel v. Chetanbhai Shah, (2002) 3 SCC 65]."
[Emphasis supplied by underscoring]
37. Since we are at the interim stage where we cannot hold a mini trial
therefore we would at this juncture not require the plaintiff to firmly
prove and establish the aforesaid three ingredients which form the life-
blood of a passing off action, yet the plaintiff would certainly have to
show considerable presence of the said three elements and demonstrate
that it has a strong prima facie case to go to trial. The scope of enquiry in
this appeal would also be of the same nature as would have been before
the learned Single Judge while considering the plaintiff's prayer for grant
of injunction. We have gone through the order impugned. We find it to be
appropriately reasoned. However we may once again conduct the enquiry
permissible under law to see whether we reach the same conclusion as
that of the learned Single Judge or not.
PLAINTIFF'S GOODWILL:
38. Almost seven decades back, this Court in the case of Dulaldas Mullick
& Ors. vs. Ganesh Das Damani & Ors.5 had an occasion to expound
the jurisprudential basis of goodwill in the following words:
5 AIR 1957 Cal 280
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"The law of goodwill is often misunderstood because I think Jurisprudence
not infrequently treats it as an abstract notion, which in fact it is not.
Goodwill must always be understood in relation to facts. Goodwill in
jurisprudence is not the abstract quality which the grammarian means by
that expression but a very concrete notion of great practical import. What
the goodwill of a business is depends a good deal on the facts and
circumstances of the particular business. Goodwill represents business
reputation. Business reputation in my view is a complex of personal
reputation, local reputation and objective reputation of the products of the
business. Which one of these elements will predominate will depend on the
facts and circumstances of each case. Except where the reputation of a
business and where the product of the business more than its proprietor
have won widespread popularity and universal approval and except in the
case of well-known patents and manufacturing processes in which event
the personal and objective reputations predominate it is the local
reputation or the attribute of locality which forms the largest content of
goodwill in almost every other business. Specially is the attribute of locality
the most important consideration in the business of an ordinary trader or a
dealer as in the present case. In my opinion there can be no hard and fast
rule, no simple formula and no inflexible and rigid definition of the term
"goodwill" but in each case it is necessary to see the entire nexus of facts
connected with the business whose goodwill is to be determined."
39. A little more than a score years later the Hon'ble Supreme Court
in C.I.T. v. B.C. Srinivasa Setty6 while referring to several authorities of
both Indian as well as foreign Courts, elucidated the term goodwill in the
following words:
"9. Goodwill denotes the benefit arising from connection and reputation.
The original definition by Lord Eldon in Crutwell v. Lye [1810, 17 Ves
335] that goodwill was nothing more than "the probability that the old
customers would resort to the old places" was expanded by Wood V.C.
in Churton v. Douglas [1859 John 174] to encompass every positive
advantage "that has been acquired by the old firm in carrying on its
business, whether connected with the premises in which the business
was previously carried on or with the name of the old firm, or with any
6 (1981) 128 I.T.R. 294
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other matter carrying with it the benefit of the business".
In Trego v. Hunt [1896 AC 7] Lord Herschell described goodwill as a
connection which tended to become permanent because of habit or
otherwise. The benefit to the business varies with the nature of the
business and also from one business to another. No business
commenced for the first time possesses goodwill from the start. It is
generated as the business is carried on and may be augmented with the
passage of time. Lawson in his INTRODUCTION TO THE LAW OF
PROPERTY describes it as property of a highly peculiar kind. In CIT, West
Bengal (III) v. Chunilal Prabhudas & Co. [(1970) 76 ITR 566 (Cal HC)] the
Calcutta High Court reviewed different approaches to the concept:
"It has been horticulturally and botanically viewed as 'a seed
sprouting' or an 'a corn growing into the mighty oak of goodwill'. It has
been geographically described by locality. It has been historically
explained as growing and crystallising traditions in the business. It has
been described in terms of a magnet as the 'attracting force'. In terms of
comparative dynamics, goodwill has been described as the 'differential
return of profit'. Philosophically it has been held to be intangible. Though
immaterial, it is materially valued. Physically and psychologically, it is a
'habit' and sociologically it is a 'custom'. Biologically, it has been
described by Lord Macnaghten in Trego v. Hunt [1896 AC 7] as the 'sap
and life' of the business. Architecturally, it has been described as the
'cement' binding together the business and its assets as a whole and a
going and developing concern."
A variety of elements goes into its making, and its composition
varies in different trades and in different businesses in the same trade,
and while one element may preponderate in one business, another may
dominate in another business. And yet because of its intangible nature,
it remains insubstantial in form and nebulous in character. Those
features prompted Lord Macnaghten to remark in CIT v. Muller & Co.'s
Margarine Limited [1901 AC 217] that although goodwill was easy to
describe, it was nonetheless difficult to define. In a progressing
business goodwill tends to show progressive increase. And in a failing
business it may begin to wane. Its value may fluctuate from one moment
to another depending on changes in the reputation of the business. It is
affected by everything relating to the business, the personality and
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business rectitude of the owners, the nature and character of the
business, its name and reputation, its location, its impact on the
contemporary market, the prevailing socio-economic ecology,
introduction to old customers and agreed absence of competition. There
can be no account in value of the factors producing it. It is also
impossible to predicate the moment of its birth. It comes silently into the
world, unheralded and unproclaimed and its impact may not be visibly
felt for an undefined period. Imperceptible at birth it exists enwrapped
in a concept, growing or fluctuating with the numerous imponderables
pouring into, and affecting the business......"
40. The Hon'ble Supreme Court has in the case of Brihan Karan Sugar
Syndicate (P) Ltd. vs. Yashwantrao Mohite Krushna Sahakari
Sakhar Karkhana7 spelt out the requirements for establishing goodwill
of a business in a suit for passing off both at the final and interim stages
in the following words:
"17. For establishing goodwill of the product, it was necessary for the
appellant to prove not only the figures of sale of the product but also the
expenditure incurred on promotion and advertisement of the product.
Prima facie, there is no evidence on this aspect. While deciding an
application for a temporary injunction in a suit for passing off action, in a
given case, the statements of accounts signed by the Chartered
Accountant of the plaintiff indicating the expenses incurred on
advertisement and promotion and figures of sales may constitute a
material which can be considered for examining whether a prima facie
case was made out by the appellant-plaintiff. However, at the time of the
final hearing of the suit, the figures must be proved in a manner known to
law." [Emphasis supplied by underscoring]
41. Keeping the aforesaid principles in mind we shall thus have to be prima
facie satisfied that plaintiff's business has good reputation, a
considerable customer base and satisfactory sales and also that the
plaintiff has incurred expenses on promotion and advertisement of its
products. If we are satisfied on these aspects, then for the present stage
7 (2024) 2 SCC 577
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that would suffice for us to prima facie hold that the plaintiff has
goodwill.
42. The plaintiff's submission that it obtained registration of the domain
name (being www.METRAVI.com) on 12th August, 1998 and that the
plaintiff was incorporated on March 25, 2009 initially appeared to us to
be totally absurd. However, upon perusal of the audited balance sheet for
the year ended March 31, 2023 and connecting the same with the plaint
case we could understand that the plaintiff has actually claimed to have
been using the mark "METRAVI" since 1998 upon the mark passing
hands from Mr. Vikram Raj Bhansali through the partnership firm
named M/s Arun Enterprises to the plaintiff. We note that the case run
in plaint is that Mr. Vikram Bhansali created the mark and adopted it
first through the partnership firm M/s Arun Enterprises who in turn
assigned it to the plaintiff. The said audited balance sheet reveals that
the plaintiff is wholly owned by its four promoters namely Vidhya
Bhansali (shareholding of 20%), Vikram Bhansali (shareholding of 35%),
Vimal Raj Bhansali (shareholding of 20%) and Richa Bhansali
(shareholding of 25%). The said balance sheet also reveals that Vimal Raj
Bhansali, Vikram Bhansali and Richa Bhansali are its directors and that
M/s Arun Enterprises is a partnership firm of the directors of the plaintiff
company. The plaintiff is thus a new face of the same persons who have
been using the said mark. Therefore, notwithstanding the fact that the
plaintiff is a separate juristic entity which was created in the year 2009
and the mark alongwith the goodwill was formally assigned to it on
December 17, 2015, the plaintiff does not prima facie appear to be wrong
in claiming that it had been using the mark since 1998. The same in our
prima facie view also explains the parsimonious consideration of the
mark in the assignment agreement that was relied on by Mr. Basu in
order to demonstrate absence of goodwill. The plaintiff has annexed a
product catalogue showing the wide range of products (electrical and
electronic test and measuring instruments) dealt in by it. The said
annexure is followed by a number of invoices ranging from December 05,
2007 to September 12, 2022. The same prima facie reveal that the
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plaintiff has been continuously dealing in electrical & electronic test and
measuring instruments called by different names. The audited balance
sheet of the plaintiff company for the Year ended March 31, 2023 reveals
that its revenue from operations (i.e. sale of products as described in the
notes forming part of the financial statements) stood at an impressive
Rs.12,27,89,459/- (Rupees Twelve Crore Twenty Seven Lakh Eighty Nine
Thousand Four Hundred and Fifty Nine) only. The same balance sheet
also discloses the sales figure for the previous Financial Year to be
Rs.9,11,17,267/- (Rupees Nine Crore Eleven Lakh Seventeen Thousand
Two Hundred and Sixty Seven) only.
43. A certificate issued by a Chartered Accountant indicating the plaintiff's
turnovers during several years starting from 2013 till 2024 has also been
annexed to the plaint. It shows that the plaintiff's turnovers during the
given Financial Years have been consistently on the rise excepting minor
exceptions in the years 2017-18 and 2019-2020. Indeed the figures
denote a steady business growth. The turnovers of a few years
immediately preceding the institution of the suit may be noted for
instance:
a) Financial Year 2018-19 ---------- Rs. 5,09,94,755/-;
b) Financial Year 2019-20 ---------- Rs. 5,04,39,411/- ;
c) Financial Year 2020-21 ---------- Rs. 6,70,30,915/- ;
d) Financial Year 2020-22----------- Rs. 9,11,17,267/- ;
e) Financial Year 2022-23 ---------- Rs.12,27,89,459/- ;
f) April 2023 - February 2024 ----- Rs.14, 22,33,863/-.
44. The audited balance sheet of the plaintiff company for the Year ended
March 31, 2023 reveals that the Company had spent a sum of
Rs.16,28,256/- (Rupees Sixteen Lakh Twenty Eight Thousand Two
Hundred and Fifty Six) for advertisement in the said financial year and
had spent a sum of Rs.15,58,026/-(Rupees Fifteen Lakh Fifty Eight
Thousand and Twenty Six) in the previous financial year.
45. The continuous ascension of the plaintiff's business and the expenses
incurred by the plaintiff in advertising its products as may be gathered
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from the material on record are prima facie strong indicators of the
plaintiff commanding substantial goodwill in the market.
46. Mr. Basu learned Senior Advocate appearing for the appellant decried the
plaintiff's claim to goodwill by relying on the same audited balance sheet
for the Year ended March 31, 2023 that forms an annexure to the plaint.
He invited our attention to annexure A to the Independent Auditor's
report at page 90 of Volume I of the stay application and emphasized on
the observation that "The Company is not having any intangible asset". He
further drew the attention of the Court to the noting at page 95 of
Volume I of the stay application to demonstrate that in the said balance
sheet at the place where assets are to be described the auditor had once
again clarified that the plaintiff had no intangible asset. Mr. Basu sought
to assert that once the said plaintiff itself has declared in the balance
sheet that it has no intangible asset, it cannot be permitted to claim any
right or goodwill over any mark, as a mark is also an intangible asset.
Ms. Mitra has on the other hand relied on the Accounting Standards (AS)
26 and AS 38 to demonstrate that for the purpose of being reflected in
the balance sheet the intangible asset should be identifiable which
means it should be either separable from the entity and therefore capable
of being transferred or should have arisen from contractual or other legal
right. She submits that as the plaintiff's trademark is inseparable from
its business, the same was not reflected in the balance sheet.
47. While Mr. Basu's contention appears to be attractive at the first blush,
yet, the same by itself may not demolish the plaintiff's case of
commanding goodwill at least at this interim stage. We say so because
non reflection of intangible property in the balance sheet may not always
mean absence or lack of intangible property and goodwill. At times it may
be due to an accounting error and at times it may be a deliberate act
following the set accounting standards. As to what is the case here is not
required to be gone into, since we are not concerned with the accounting
treatment of intangible assets at all. At this stage we only need to get
prima facie satisfied that the plaintiff has substantial goodwill and as
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discussed earlier and we are prima facie satisfied that the plaintiff has
generated considerable goodwill.
MISREPRESENTATION BY THE DEFENDANT:
48. We now move on to analyze as to whether or not there has been any
misrepresentation on the part of the defendant. Before doing so the set
legal standards by which an allegation of misrepresentation is required to
be examined need to be noticed. A three Judge Bench of the Hon'ble
Supreme Court admirably outlined the concept of misrepresentation in
the context of passing off in the case of Wander Ltd. & Anr. vs. Antox
India (P) Ltd.8:
"16. 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 forseeable consequence, the
business or goodwill of another which actually or probably, causes damages
to the business or good of the other trader. Speaking of the legal clarification
of this form of action, Lord Diplock said:
"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
form 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
8 1990 Supp SCC 727
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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." [ See Erven Warnink v. J. Townend
& Sons (Hull) Ltd., 1979 AC 731, 740 : (1979) 2 All ER 927, 931]"
[Emphasis supplied by underscoring]
49. The same view was also echoed by another three Judge Bench of the
Hon'ble Supreme Court in the case of Cadila Health Care Ltd.2 (supra)
in the following words:
"31. Trade mark is essentially adopted to advertise one's product and to
make it known to the purchaser. It attempts to portray the nature and, if
possible, the quality of the product and over a period of time the mark may
become popular. It is usually at that stage that other people are tempted to
pass off their products as that of the original owner of the mark. That is
why it is said that in a passing-off action, the plaintiff's right 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". [See Wander Ltd. v. Antox India (P) Ltd. [1990 Supp SCC 727]
, SCC p. 734, para 16.]"
[Emphasis supplied by underscoring]
50. Therefore, it would be essential at this stage to first ascertain if the
defendant's conduct in the case at hand is one "which leads to or is
intended or calculated to lead to deception. We may not overemphasise
that the enquiry at this stage would only be for prima facie satisfaction.
51. We have seen the messages exchanged between the said two persons
namely Mr. Prasad Nidhi and Mr. Vikram Bhansali (who are directors of
the rival companies). The same evince that Mr. Prasad Nidhi had while
offering to sell the products of the plaintiff enquired of Mr. Vikram
Bhansali as to whether the plaintiff dealt in OEM products. Mr. Vikram
Bhansali had replied in the affirmative by saying "Yes we are OEMs". Mr.
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Vikram Bhansali also informed that "Metravi, CEM and EEE-Tech" were
the brands of his company and that the company also dealt in other
brands. Mr. Prasad Nidhi then gave Mr. Vikram Bhansali to understand
that his company was interested in selling the products of the plaintiff
and he was then requested by Mr. Vikram Bhansali to apply for
dealership on-line. There are messages which reveal that Mr. Prasad
Nidhi then went on to ask about the MOQ (Minimum Order Quantity)
also placed orders for CEM DT-9881 Air Particle Counter Battery. The
first invoice that has been issued by the defendant for presumably the
first lot of the defendant's products under the trademark "METERIVA"
uncannily follows the textual exchange between the directors of the two
companies at logger-heads.
52. We do not agree with Ms. Mitra that the enquiry made by Mr. Prasad
Nidhi and the conversation between the two persons as aforesaid was
about the plaintiff's products under the trademark "METRAVI", since the
order that was subsequently placed was for CEM DT-9881 Air Particle
Counter Battery and CEM was also a brand dealt in by the concerns of
Mr. Vikram Bhansali as would be evident from the texts exchanged
between him and Mr. Prasad Nidhi. However, that does not make the said
text exchange/conversation irrelevant. It is highly implausible to accept
that while the defendant applied for registration of its mark in April 2022
and got in contact with the plaintiff's director in June 2022 it was all
along unaware of the plaintiff's trademark. While we will definitely not
read more into the text exchanges between Mr. Prasad Nidhi and Mr.
Vikram Bhansali than is apparent, we are prima facie satisfied that the
defendant was aware by the time it put its trademark into use (the
earliest being July 2022 in terms of the material on record since nothing
prior thereto has been brought to our notice) that the plaintiff was
already using a similar trademark and was sufficiently established in the
market. It is also interesting to note that after the invoice bearing the
"issue date" as "July 17, 2022" and purchase order date as "June 07,
2022" the immediately following invoice on record is dated November 02,
2023 i.e. more than one year later. The invoices which follow thereafter
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are in reasonable succession being invoices of January 24, February 24
and March 24. The time-gap between the first and the second invoice
precipitates an inference that the defendant's products under the
trademark "METERIVA" did not have much business during such phase
and it may have gathered steam later. Indeed it was not for nothing that
the defendant expressed its willingness to sell the plaintiff's goods and
also struck a deal with the plaintiff. We have also noticed that
appellant/defendant has itself projected on its website (a copy whereof
has been annexed to the plaint and the stay application) that
"METERIVA" has been a brand of the appellant/defendant since 2023. All
this taken cumulatively leads to the prima facie conclusion that the
defendant's conduct leads to or is intended or calculated to lead to
deception.
53. Mr. Basu had relied on the judgment in the case of Kaviraj Pandit
Durga Dutt Sharma1 (supra) for asserting that added matter is
sufficient to distinguish the goods of the defendant from that of the
plaintiff and that the marks have to be seen as a whole. We feel that the
said judgment supports the plaintiff more than the defendant. It was a
case of infringement of trademark. In the said case too, the Hon'ble
Supreme Court had held in paragraph 29 thereof that the "purpose of the
comparison is for determining whether the essential features of the
plaintiff's trade mark are to be found in that used by the defendant" and it
was in such context that the Supreme Court observed that "....... the
object of the enquiry in ultimate analysis is whether the mark used by the
defendant as a whole is deceptively similar to that of the registered mark
of the plaintiff". A reading of the said judgment as whole reveals that the
Hon'ble Court cautioned not to disregard parts which are common,
because it is that part which would ultimately deceive and create
confusion. In fact the observations of the Hon'ble Supreme Court in
paragraph 30 of the Kaviraj Pandit Durga Dutt Sharma1 judgment
clarify all doubts. The said paragraph is quoted hereinbelow:
30. The mark of the respondent which he claims has been infringed by
the appellant is the mark 'Navaratna Pharmaceutical Laboratories',
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and the mark of the appellant which the respondent claimed was a
colourable imitation of that mark is 'Navaratna Pharmacy'. Mr
Agarwala here again stressed the fact that the 'Navaratna' which
constituted an essential part or feature of the Registered Trade Mark
was a descriptive word in common use and that if the use of this word
in the appellant's mark were disregarded there would not be enough
material left for holding that the appellant had used a trade mark
which was deceptively similar to that of the respondent. But this
proceeds, in our opinion, on ignoring that the appellant is not, as we
have explained earlier, entitled to insist on a disclaimer in regard to
that word by the respondent. In these circumstances, the trade mark to
be compared with that used by the appellant is the entire registered
mark including the word 'Navaratna'. Even otherwise, as stated in a
slightly different context : [Kerly on Trade Marks 8th Edn. 407]
"Where common marks are included in the trade marks to be compared or
in one of them, the proper course is to look at the marks as wholes and
not to disregard the parts which are common".
[Emphasis supplied by underscoring]
54. If the marks are seen as a whole it will appear that both the expressions
"METRAVI" and "METERIVA" which are constituted by seven letters
contain "MET" in the beginning and "R" in the middle and "V" at the
penultimate position. Goods sold under the mark "METERIVA" are likely,
(if not certainly) to deceive any person into believing them to be those
sold under the mark "METRAVI", more so on the online platform. While
we are conscious of the law on the subject of passing off that if an added
matter sufficiently distinguishes the defendant's mark from that of the
plaintiff then the defendant would escape the liability but in the case at
hand we prima facie find that addition of a sign wave at bottom of the
expression "METERIVA" would not make much difference or at least such
difference that would obviate or prevent deception.
55. Before moving further the following observations of the Hon'ble Supreme
Court in the case of Satyam Infoway Ltd. v. Siffynet Solutions (P)
Ltd.9 deserve to be noticed:
9 (2004) 6 SCC 145
2025:CHC-OS:81-DB
"14. The second element that must be established by a plaintiff in a passing-off
action is misrepresentation by the defendant to the public. The word
misrepresentation does not mean that the plaintiff has to prove any mala fide
intention on the part of the defendant. Of course, if the misrepresentation is
intentional, it might lead to an inference that the reputation of the plaintiff is
such that it is worth the defendant's while to cash in on it. An innocent
misrepresentation would be relevant only on the question of the ultimate relief
which would be granted to the plaintiff [Cadbury Schweppes v. Pub Squash,
1981 RPC 429 : (1981) 1 All ER 213 : (1981) 1 WLR 193 (PC); Erven
Warnink v. Townend, 1980 RPC 31 : (1979) 2 All ER 927 : 1979 AC 731 (HL)] .
What has to be established is the likelihood of confusion in the minds of the
public (the word "public" being understood to mean actual or potential customers
or users) that the goods or services offered by the defendant are the goods or the
services of the plaintiff. In assessing the likelihood of such confusion the courts
must allow for the "imperfect recollection of a person of ordinary memory"
[Aristoc v. Rysta, 1945 AC 68 : (1945) 1 All ER 34 (HL)]."
[Emphasis supplied by underscoring]
56. We, therefore, now need to examine as to whether the products sold by
the defendant under the trademark "METERIVA" cause confusion in the
minds of the public. It had been submitted by Ms. Mitra that when a
search was made for made for products of the plaintiff company by
feeding the name "METRAVI" the products of the appellant/defendant
also got displayed because the algorithm of the online retail platform was
unable to differentiate between the two names i.e. "METRAVI" and
"METERIVA" and as such displayed products of "METERIVA" also
alongwith those of "METRAVI." We have seen the print-outs of pages from
the website of Amazon an online retail platform which form part of the
stay application. The same reveal that upon the name "metravi
boroscope" being fed in the search-bar a product under the name
"meteriva boroscope" has also got displayed. We have also noticed that
along with "meteriva" and "metravi" boroscopes, other products carrying
different names with the suffix boroscope have also been popped up but
then "meteriva" and "metravi" get too close to be easily differentiated.
Indeed in today's digital age when life has become faster than usual
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confusion of the nature as aforesaid cannot and should not be lightly
ignored.
57. We have already prima facie found that owing to the sameness of the
syllables used as well as positioning thereof goods sold under the mark
"METERIVA" are likely, (if not certainly) to deceive any person into
believing them to be those sold under the mark "METRAVI", more so on
the online platform.
58. We also take note of the plaintiff's submission relying on "McCarthy on
Trademarks and Unfair Competition" that if a subsequent user adopts a
similar mark as that of the prior user despite having knowledge about the
prior users mark, the subsequent user must give a cogent explanation as
regards the adoption of in case and we agree that the same should be so.
In the case at hand the defendant has denied having knowledge about
the plaintiff's mark (in paragraph 24 of its affidavit in opposition) and as
such no explanation could be offered by the defendant as to why it
adopted a mark similar to that of the plaintiff subsequent to the
plaintiff's adoption. In any case the explanation offered by the defendant
that its trademark "METERIVA", being composed by integration of the
word "METER" and "IVA" of which the word "METER" is a generic term
(in which no one can claim proprietary interest) and the word "IVA" has
been derived from Slavic and Hebrew which means "God is gracious"
does not appeal to us. We are not impressed by such explanation
because we have prima facie found that the use of the same alphabets in
the two equally lettered words at almost the same position deceives the
eyes (viz. "MET" in the beginning and "R" in the middle and "V" at the
penultimate position).
59. We have seen that the learned Single Judge has observed in the order
impugned that the two rival marks thinly differ only in the interchange of
syllables. We agree with such observation. We also agree with the
observation of the learned Single Judge that the two marks have such
degree of phonetic similarity that the same may create confusion. We,
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therefore, hold that there is indeed prima facie evidence of the
defendant's products causing confusion.
60. We have also seen the comparative charts of the two rival marks annexed
to the written notes of submissions provided by both the parties. We note
that there is sufficient similarity in the two for creating confusion. Indeed
the marks are not the same word for word or syllable for syllable or even
design for design, but that is not what is required to be seen either. What
is required to be noticed is, whether or not the impugned mark deceives a
person of normal prudence to believe it to be the mark of the plaintiff and
get misled into purchasing goods under the said other mark believing it
to be the goods of the plaintiff. What is required to be established in a
case of passing off is deceptive similarity and not total similarity. In the
words of the statute the impugned mark should be shown to be such that
the same "so nearly resembles that other mark as to be likely to deceive or
cause confusion". "The likelihood of confusion" is to be tested on the
touchstone of the "imperfect recollection of a person of ordinary memory"
as felicitously put by the Hon'ble Supreme Court. We find that such
likelihood is there.
61. Mr. Basu had contended that as the class of consumers in the test and
measurement equipment market are technical professionals or informed
buyers, who are more likely to be interested with the specification of the
products there was no chance of deception in the wake of the apparent
differences in the packaging and information provided thereat. For such
purpose Mr. Basu had relied on Cadila Health Care2 (supra). Paragraph
35 of the report is relevant for the present purpose and the same is
quoted hereinbelow:
"35. Broadly stated, in an action for passing-off on the basis of
unregistered trade mark generally for deciding the question of
deceptive similarity the following factors are to be considered:
(a) The nature of the marks i.e. whether the marks are word marks or
label marks or composite marks i.e. both words and label works.
(b) The degree of resembleness between the marks, phonetically similar
and hence similar in idea.
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(c) The nature of the goods in respect of which they are used as
trademarks.
(d) The similarity in the nature, character and performance of the goods
of the rival traders.
(e) The class of purchasers who are likely to buy the goods bearing the
marks they require, on their education and intelligence and a degree of
care they are likely to exercise in purchasing and/or using the goods.
(f) The mode of purchasing the goods or placing orders for the goods.
(g) Any other surrounding circumstances which may be relevant in the
extent of dissimilarity between the competing marks."
62. The aforesaid proposition of law enunciated by Cadila Health Care2
(supra) is indubitably salutary but in our considered view the same does
not apply to the facts of the present case where confusion is evidently
rampant. It must be noted that about more than two decades back, when
the Cadila Health Care2 judgment came to be passed online market
portals in India were not so prominently in use. Indeed there is a great
deal of difference in shopping online and shopping physically. The
chances of being deceived in shopping online are far greater than when
done physically. It is common knowledge that satisfaction level in
verification of the product purchased online is way lower compared to
that purchased physically/offline.
63. We also note that given the nature of the products dealt in by the
parties, in the age of retail sale through online platforms, it cannot be
said with certainty that all the products would necessarily be purchased
by a class of informed customers only. Electrical and electronic test and
measurement instruments which fall under class 9 and in which the rival
parties deal is a genus which comprises a wide range of instruments, all
of which are not necessarily used by well informed and educated people.
While it is a fact that certain specialized equipment/instrument which
require special technical expertise are used by technical experts yet there
are many test and measurement tools which are used by a large section
of people which may include normal technicians, electricians and even
common people. Technicians, mechanics and electricians in our country
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are mostly free-lancers and may not be attached to reputed organisations
and therefore all of them may not be so well informed as to purchase a
product after analysing the name of the company that has
manufactured it. We feel that the dictum of the Hon'ble Supreme Court
is meant to be applicable to cases where the entire class of persons is
comprised of persons of the same standard in terms of intelligence,
knowledge and understanding and not to a case of this nature which
involves a heterogeneous class of purchasers.
64. We are prima facie satisfied that there is misrepresentation on the part of
the defendant leading to confusion or at least "the likelihood of confusion
in the minds of the" customers and as such the second requirement also
stands answered by the plaintiff.
DAMAGES:
65. The third test that is required to be answered by the plaintiffs is that the
defendant's act may cause or is likely to cause damage to the plaintiff's
business. Once it is found that the (prima facie though) that the plaintiff
has sufficient goodwill and the defendant's conduct has led to
misrepresentation, likelihood of damages being caused to the plaintiff
becomes almost a certainty. At this stage we are not required to be
satisfied that actual damage has been caused to the plaintiff. Mere
likelihood of damage would do. In this regard paragraph 13 of the
judgment of the Hon'ble Supreme Court in the case of Laxmikant V.
Patel3 (supra) may be noticed:
"13. In an action for passing-off it is usual, rather essential, to seek an
injunction, temporary or ad interim. The principles for the grant of such
injunction are the same as in the case of any other action against injury
complained of. The plaintiff must prove a prima facie case, availability of
balance of convenience in his favour and his suffering an irreparable
injury in the absence of grant of injunction. According to Kerly (ibid, para
16.16) passing-off cases are often cases of deliberate and intentional
misrepresentation, but it is well settled that fraud is not a necessary
element of the right of action, and the absence of an intention to deceive
is not a defence, though proof of fraudulent intention may materially
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assist a plaintiff in establishing probability of deception. Christopher
Wadlow in Law of Passing-Off (1995 Edn., at p. 3.06) states that the
plaintiff does not have to prove actual damage in order to succeed in an
action for passing-off. Likelihood of damage is sufficient. The same
learned author states that the defendant's state of mind is wholly
irrelevant to the existence of the cause of action for passing-off (ibid,
paras 4.20 and 7.15). As to how the injunction granted by the court
would shape depends on the facts and circumstances of each case.
Where a defendant has imitated or adopted the plaintiff's distinctive
trade mark or business name, the order may be an absolute injunction
that he would not use or carry on business under that name (Kerly, ibid,
para 16.97)." [Emphasis supplied by underscoring]
66. Mr. Bose had while inviting our attention to the communication between
Mr. Prasad Nidhi and Mr. Vikram Bhansali pointed out that it would
appear from the texts exchanged between them that Mr. Bhansali had
seen the profile of Mr. Prasad Nidhi on Linked In and that being so it
should be inferred that Mr. Vikram Bhansali had knowledge of the
defendant's mark "METERIVA" in 2022 itself since the said mark was
displayed there. Mr. Basu submitted that in view of the aforesaid the
mandatory condition of pre-litigation mediation under Section 12A of the
Commercial Court's Act, 2015 ought not to have dispensed with by the
learned Single judge. Ms. Mitra had however disputed this and submitted
that the plaintiff came to know about the use of the impugned mark by
the defendant only in January 2024 and had approached the Court
immediately thereafter. We may not be able to make any guess far less an
educated and informed guess that Mr. Vikram Bhansali saw the
defendant's mark "METERIVA" on the Linked In profile of Mr. Prasad
Nidhi. We have also not been shown that the profile at the relevant point
of time did project such mark. Therefore, there is no reason to infer that
Mr. Vikram Bhansali must have seen the defendant's mark "METERIVA"
on the Linked In profile of Mr. Prasad Nidhi as submitted by Mr. Basu.
67. The unreported judgment in case of SRMB Srijan Private Limited vs. B.
S. Sponge Pvt. Ltd (APO 157/2023) hardly helps the
appellant/defendant inasmuch as the said order was passed in a totally
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different set of facts. In the said case, initially the plaintiff had issued a
cease-and-desist notice on 25th May, 2021 and then had not pursued its
claim. After about two years, in the year 2023 a suit was instituted, and
urgency was sought to be artificially created by introducing the word
'recently' in the plaint in order to project that in case any notice was
served, the plaintiff would suffer irreparably. Such is not the case here.
Be that as it may, in view of the case made out in the plaint which thus
far has not been so dented as to propel us to disbelieve the same and the
fact that the appellant has on its own website (a copy whereof has been
annexed to the plaint and the stay application) projected that
"METERIVA" has been a brand of the appellant/defendant since 2023 the
point raised by Mr. Basu need not detain us further. While on the subject
we may note that in a judgment of a fairly recent origin in the case of
Yamini Manohar v. T.K.D. Keerthi10 the Hon'ble Supreme Court has
clarified the law regarding the power of Court under section 12A of the
Commercial Courts Act, 2015 by observing that when a plaint is filed
under the said Act with a prayer for an urgent interim relief, the
commercial court should examine the nature and the subject-matter of
the suit, the cause of action, and the prayer for interim relief and then
decide as to whether the requirement of pre-litigation mediation should
be dispensed with or not. The Courts have been instructed to consider
the facts and circumstances of the case holistically from the standpoint of
the plaintiff". The caution sounded in the said judgment is to ensure that
the prayer for urgent interim relief does not become a disguise or mask to
wriggle out of and get over Section 12-A of the CC Act. The facts and
circumstances of the case at hand at least prima facie do not appear to
be a cloak to walk away with an interim order. In fact in view of the
discussion hereinabove, we are satisfied that the plaintiff has by prima
facie passing the classical trinity test as aforesaid, made out a strong
prima facie case. In view of the fact that the plaintiff has been able to
make out a prima facie case of running substantial business under the
said mark, the balance of convenience and inconvenience leans heavily in
10 (2024) 5 SCC 815
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favour of the plaintiff and we therefore feel that if interim order as prayed
for is not granted, the plaintiff will suffer irreparably inasmuch as its
goodwill and reputation may get compromised due to sale of products not
belonging to it but being passed off as its.
68. Since the conclusion reached by the learned Single Judge is
unexceptionable in view of the reasons provided in the order impugned
and for the additional reasons that we have hereby supplied, we find no
reason to interfere with the same. In any case, it is settled law that the
appellate Court interferes only when the order appealed against is clearly
wrong and not when it is not right. Such is not the case here. The appeal
and application are therefore dismissed. No costs.
69. Urgent photostat certified copy of this judgment, if applied for, be
supplied to the parties upon compliance of all formalities.
I agree.
(Arijit Banerjee, J.) (Om Narayan Rai, J.)
