Bhandari Homoeopathic ... vs L.R. Bhandari (Homoeopaths) P. ...
1975 Latest Caselaw 73 Del

JUDGMENT

D.K. Kapur, J.

(1) This application for an injunction has teen moved by the plaintiffs. In the application it is prayed that defendants should be restrained from using the plaintiff's trade mark 'BHANDAR1' or from linking their business with the firm-name of plaintiff No. 2, M/s L.R. Bhandari & Sons. It is also prayed that thr defendant should be restrained from using the names 'BHANDARP and 'L.R. Bhandari' for Homoeopathic Medicines and from using or displaying these names or using them for issuing circulars and advertisement resulting in confusion with the plaintiff business.

(2) According to the plaint, there were two firms, M/s Bhandari Homoeopathic Laboratories and M/s L.R. Bhandari and Sons, which were carrying on business in Homoeopathic Medicines. The former firm had five partners initially & it was constituted in December, 63, for the purpose of manufacturing and dealing in 'Bhandari' Homoeopathic Medicines. It had a. factory at Faridabad, and an office at 3829,. Daryaganj, Delhi. The latter firm, M/s L.R. Bhacdari and Sons, was established in 1930 at Lahore, but later shifted to Delhi. It had at first five partners, consisting of the late Shri L.R. Bhandari and his four sons. On the death of Shri L.R. Bhandari, the firm was re-constituted with the four sons as its partners. There was also a third firm, called 'Bhandari Agencies', which had its office at 3828, Subhash. Marg, Delhi, in which the partners were Scot, Nirmal Bhandari, Smt. Pushpa Bhandari, Smt. Saroj Bhandari and Shri R.M. Bhandari. The partners were obviously, the wives of three of the brothers and the youngest brother. There were some differences between the partners in these three firms which led to the firms being dissolved. The dissolution took place on 10th. October, 1973. Consequent to the dissolution, the firms, plaintiffs 1 and 2, ceased to have Shri R .K. Bhandari, one of its former partners as a partner and the remaining partners were to carry on as continuing partners. In other words, Shri R.K. Bhandari retired from these partnerships. In the case of M/s Bhandari Agencies, all the partners retired except Smt, Nirmal Bhandari, wife of said Shri R.K. Bhandari, and therefore, she became the sole owner of this firm. Dissolution deeds were drawn up in relation to all the three firms. There were many terms and conditions regarding the dissolution but one of them, was the usual term stating that the entire business, including its goodwill, firm's name etc. would belong to the continuing partners. In the case of the dissolution deed of M/s L.R. Bhandari and Sons there was a clear condition that the retiring partner would not be entitled to carry on business in the firm's name. No similar specification Bhandari Homeo. Labs. vs. L.R. Bhandari (Homed) P. Ltd. words have been used in the dissolution deeds relating to the other two firms.

(3) The cause of action, for the present suit and application for injunction, has arisen because a private limited company under the name of M/s L.R. Bhandari (Homoeopaths) Private Limited has been set up, and is now situated at 3828, Netajit Subhash. Marg, Daryaganj, Delhi. It is stated by the plaintiff that this company has been set up by Shri R K. Bhandari, the retiring partner, with a view to nullify the effect of the dissolution deed, and a permanent injunction is claimed to restrain this company from carrying on business in a name which is more less similar to that of plaintiff No. 2 (M/s LR. Bhandari and Sons). The other claim of the plaintiff is that the first plaintiff is a manufacturer of Homoeopathic Medicines which uses a trade mark which is registered. It is alleged that this registered trade mark is being infringed by the defendant. The trade mark in question has the name "Bhandari' with an oval line around it. This trade mark is quite distinctive, and uses the name' Bhandari' in the oval in a particular manner which can be quite easily distinguished by the naked eye from other marks, as I have observed from the documents, advertisements and also some samples shown to me. The question for consideration is whether the plaintiffs should be entitled to this injunction.

(4) The case for the defendants is that the terms in the dissolution deeds which require asettlement of certain accounts etc. have not teen carried out. That they are not obliged to observe the terms of the dissolution deeds regarding the rights of the plaintiffs. It is, therefore, urged that the first defendant can carry on business in a name similar or almost identica to that of the second plaintiff. It is also urged that for the same reason, the remaining defendants can use the trade mark which was used formerly by M/s L.R. Bhandari and Sons and the other firms without any harassment by the plaintiffs. It is alternatively urged, on behalf of the defendant, that the distinctive trade mark is not the property of the plaintiffs and was also being used by the fourth defendant, M/s Bhandari Agencies. It is significant in this case, to note that along with their reply to the application for injunction the defendants filed a document, Exhibit No. 4, which showed the distinctive trade mark as relating to 'Bhandari Agencies' also. I have examined that document. There is no indication of its date and there is noindication of its use. It is a mere emblem or label. There are many reasons for me to hold that this last contention cannot be accepted by the Court. I may set out these reasons straightaway.

(5) Firstly, the second plaintiff firm M/s L.R. Bhandari & sons is a firm which has been established Since 1930 as dealer in Homoeopathic Medicines. It is a firm from which the other two firms, M/s" Bhandari Homeopathic Laboratories and M/s Bhandari Agencies, have obviously appeared as off-shoots. M/s Bhandari Homeopathic Laboratories, the first plaintiff appears to be manufacturing unit which was set up by the then partners of the second plaintiff firm. This manufacturing unit, was set up in 1963 and the dissolution deed clearly indicates that the business of this firm was the manufacturing of Homeopathic Medicines at Faridabad. The dissolution deeds also show that the factory at Faridabad was to belong exclusively to the continuing partners and would not be the concern of the retiring part- ner. I think this dissolution deed clearly indicates that on the retirement of Shri R.K. Bhandari, the remaining partners were to carry on the business of manufacturing Homeopathic Medicines which was done at Faridabad, and it would follow that they would be entitled to use all the rights and advantages associated with the manufacture of medicines by that firm including the trade-mark. Although, there is no specific mention of the trade mark in the dissolution deed, I think it would follow as a natural result of the dissolution, that the remaining partners would become the exclusive owners of the trade mark which was being used by this firm in the course of its manufacturing business. The third firm, M/S Bhandari Agencies (defendant No. 4), seems to have been set up for the sale of homeopathic books etc. and was clearly a corollary or adjunct of the main firm M/s L.R. Bhandari & Sons, which was existing much earlier in the same building or in the adjacent building. The firm had as its partners, the wives of three of the brothers who were themselves partners of M/s L.R. Bhandari and also a fourth brother, R.M. Bhandari, who was a common partner in all the firms. On the dissolution of the partnerships, I think, that there was a sort of disruption in the family and the family business was divided so that the firm Bhandari Agencies) came to the share of Smt. Nirmal Bhandari, wife of Shri R.K. Bhandari, the retiring partner. Initially, I do not think that this firm could have had any dealing with Homeopathic Medicines, this seems to be borne out from the partnership deed. However, there is indication in this partnership deed, that other business could be carried on by all the partners by consent. I am, therefore, assuming that this firm started dealing with the sale of homeopathic medicines, also. As it was an adjunct of M/s L.R. Bhandari & Sons, perhaps it might have sold medicines or dealt in some medicines which were also being dealt with by that firm. I am not at present able to persuade myself that this firm. M/s Bhandari Agencies, could have acquired any right to use the trade mark of the firm, M/s Bhandari Homeopathic Laboratories used in relation to the manufacture of homeopathic medicines by that firm. I would, therefore, find that prima facie the first plaintiff is entitled to restrain the use of its distinctive trade mark 'Bhandari' used in a distinctive manner. I may make it clear also that although the plaintiffs allege that the trade mark was registered, this is, in fact, not so. There is an application for registration of a trade mark which is still pending. However, the fact of the matter, is, that this trade mark is a very neccessary part of the manufacturing business of plaintiff No. 1. If the trade mark is used by defendant No. 4 who is not a manufacturer for the purposes of marketing the same type of medicines as are marketed or manufactured or sold by the first plaintiff, then it is likely to cause tremendous confusion and is likely to deceive the general public. I would, therefore, think that -he use of this trade mark by the fourth defendant has an inevitable tendency to deceive the public and to cause confusion in the minds of intending purchasers as to the identity of the manufacturers of such medicines, and therefore, should be restrained by the powers of this Court to grant an interim injunction during the trial of the suit. There is, however, one saving. as far as the fourth defendant is concerned. From the advertisements which have been shown to me, this firm appears also to have been using the trade mark of 'Crown' with the name 'Bhandari' appearing above till quite recently. This trade-mark is quite different from the distinctive trade-mark which is being used by the first plaintiff for the purpose of manufacturing medicines. It is urged by the learned counsel for the defendants, that they may be able to prove the use of the circular device or oval device, even earlier, but at present nothing has been placed on record to indicate such use. I think, that in any case the facts of the case are such, that it is in the public interest and also in the interest of all the parties that the defendants should not be entitled to use the same trade-mark. I, therefore, think that there is enough material on record to restrain the fourth defend nt from using the name 'Bhandari' with an oval or circular device, although it is free for the moment to use a 'Crown' device with the word 'Bhandari' above. Even this, may eventually have to be modified at the stage of the final decision of this suit, but during the interim period they cannot be restrained as there is no prima facie proof of deception.

(6) Coming now to the name of the first defendant which is the main question before the court, I find that the first defendant is M/s. L.R. Bhandari (Homeopaths) Private Limited. It is a company which is already registered. It is, however, registered not with exactly the same name as the second plaintiff M/s. L.R. Bhandari and Sons. The second plaintiff is a partnership firm, whereas the first defendant is a registered company under the Companies Act. It is settled law, that a registered company can be restrained from being registered with a name similar to that of another registered company. There is considerable case law, showing that a company can also be restrained from being registered in the name of an unregistered firm. There is also case law to indicate, that if a company has already been registered, it can be restrained from carrying on business in the registered name. The principles on which an injunction is issued by the Court have seen set out in Buckley on the Companies Act, Thirteenth Edition, at page 48:- "THEjurisdiction in these cases rests either upon fraud or upon property ; not that there is property in the name, but that the use of a name closely resembling that in which another carries on business is calculated to deceive or cause confusion between the two businesses and to affect property by diverting customers to the person taking, the name, or by affecting the credit or goodwill of the person whose name is taken (a) where this is not the case there is Do jurisdiction."

Pran Nath Pushkarma Vs. Modem Mohan

(7) Now, the second plaintiff is a partnership firm of which the promoter of the first defendant, Shri R.K. Bhandari, is an ex-partner. In the dissolution deed he had agreed not to carry on business under the name 'L.R. Bhandari & Sons', yet he has had a company incorporated under this name. This would be one ground which would justify the injunction prayed for. Even if this company had been got registered by a stranger, the common law right to get an injunction to rertrain the deception to the public resulting from such a registration would exist. The right to claim the injunction is enhanced by the fact that the first defendant wants to carry on exactly the same or similar business as the second plaintiff. A similar injunction was granted in the case Manchester Brewery Co. Ltd. Vs. North Cheshire and Manchester Brewery Co. Ltd. 1898 (7) Chancery Division 539, which was affirmed by the House of Lords in 1899 A.C. 83. There are numerous other cases wherein similar injunctions have been granted. It is not necessary to enumerate them all. In case, an injunction is granted against a limited company which has already been registered time is given as a matter of course to the defendant to get its name changed. Otherwise, the injunction is usually in the form of a restraint order against the defendant not to carry on business under the impugned name. Now it is clear to me that the first defendant has been registered with a name which is almost exactly the same as that of the second plaintiff. The difference is so light as to make no difference. It is also noteworthy, that the company is now carrying on business in the premises which was formerly the business premises of the old firm at Hanging Bridge Building. A photograph on the record shows that there is a Board indicating that the old firm has moved and the present company has occupied the same premises. I think, that in the circumstances there is no doubt that the injunction should be granted. I accordingly grant the injunction to restrain that first defendant carrying on business under the name 'L.R. Bhandari (Homeopath) Private Limited'. A similar order was passed in Kingston Miller & Co., Ltd., Vs. Thomas Kingston & Co, Ltd. 1912 (1) Chancery Division 575.