Jaininder Jain And Ors. vs Arihant Jain And Ors.
2006 Latest Caselaw 2282 Del

JUDGMENT

B.N. Chaturvedi, J.

Page 0270

1. At loggerheads, in these proceedings, are the members of same family, who would have, perhaps, been well advised to strive to sort out amicably their ongoing dispute over use of trademark "KANGARO" instead of slugging it out by entangling themselves in multifarious litigious bouts.

2. The origin of present proceedings can be traced to an injunction order passed in CS (OS) No. 156/2004, filed by the petitioners, inter alia seeking permanent injunction restraining the respondents from using the trademark "KANGARO", which was claimed to have fallen to the share of petitioner No. 1 by virtue of a family settlement dated 10th / 14th April, 1995. The aforesaid suit was filed before the District Court, Ludhiana, on 7th January, 1997, wherein after hearing the parties an order to the following effect was passed:

The application under Section 8 of the New Arbitration Act has been dismissed as not pressed. Learned Counsel for respondents No. 1 to 4 claims that he is the registered owner of Trade Mark Kangaru. Plaintiff No. 1 claims that he is using the same as owner. Let status quo regarding use of trade mark be maintained and w.s. be filed on 10.1.1997.

3. Apart from the aforesaid suit, two other suits being CS (OS) No. 157/2004 and CS (OS) No. 155/2004, between the parties, were also filed before the District Court, Ludhiana. Also, a rectification petition bearing CO No. 4/1997 was filed by the petitioners before this Court. The above suits pending Page 0271 with the District Court, Ludhiana were, under an order dated 8th September, 2003 of the Supreme Court, transferred to this Court to be heard and tried Along with CO No. 4/1997.

4. The status quo order dated 7.1.1997, passed in suit No. 156/2004, continues to operate till date enabling thereby the parties to do their business by using the trademark "KANGARO".

5. The petitioners exported a consignment of their goods under the trademark "KANGARO" to Dubai in September 2006 which was, on a complaint by the respondents stating the same to be counterfeit goods, seized by the Customs Authorities at Dubai. Consequent upon such seizure, the respondents were directed vide court attachment petition No. 5071/2006 to furnish a bank guarantee to the tune of AED 2,00,000 (UAE Dirham 2,00,000 only) encashable on first return demand in the event of respondents failing to fulfilll the terms and conditions of the contract. According to the respondents, under the laws of UAE, they are under a legal obligation to prosecute the proceedings with due diligence failing which the seized goods may be released and the bank guarantee furnished by them liable to encashment. The matter before UAE court is now stated to be fixed for 19th December, 2006 when the respondents are required to file their reply and supporting evidence in view of the defense/counter statement and the evidence filed on behalf of the petitioners. Apart from seizure of the petitioners' goods at Dubai, on a similar complaint by the respondents, their another consignment exported to Sri Lanka has also been seized.

6. The petitioners complain that the respondents got their consignments seized at Dubai and Sri Lanka by misrepresenting, in concealment of and contrary to the dictate of the status quo order, that the same constituted counterfeit goods knowing it fully well that under the status quo order, they were entitled to use the trademark "KANGARO" in relation to goods so exported. It is pleaded that inspite of being injuncted by virtue of status quo order from interfering with their use of trademark "KANGARO", the respondents, in defiance of such order got the petitioners' consignments to Dubai and Sri Lanka seized and are now in the process of prosecuting their action for destruction of the seized consignment, before the Dubai Court.

7. Faced with the situation as aforesaid, the petitioners filed a petition under Order XXXIX Rule 2A CPC read with Section 151 CPC and Section 2(a) & (b) read with Section 11 and 12 of the Contempt of Courts Act, 1971 wherein instant application seeking an interim order restraining the respondents from pursuing the matter further before the Dubai Court was also made. On 10th October, 2006 while issuing notice to show cause to the respondents, which was accepted on their behalf by their counsel, an interim order was passed asking the respondents not to pursue the matter further before the Dubai Court concerning infringement action in respect of trademark "KANGARO".

8. The respondents in response to show cause notice filed their replies to the contempt petition as also to the present application on the basis whereof the interim order, as aforesaid, was passed.

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9. Mr. Parag Tripathi, learned Senior counsel appearing for the petitioners pleaded that in view of status quo order the petitioners were within their rights to use the trademark "KANGARO" in relation to their goods including those exported to Dubai and interference with use of the trademark from the respondents by misrepresenting to custom authorities at Dubai and Sri Lanka that the same represented counterfeit goods was in clear defiance of the interlocutory status quo order.

10. Mr. Sudhir Chandra, learned Senior counsel appearing for respondents on the other hand argued that the status quo order could not have prevented the respondents from proceeding against importers of goods at Dubai under the relevant laws of UAE as trademark "KANGARO" was registered in the name of the respondents in UAE and they were thus the registered proprietors thereof. Mr. Tripathi referring to Section 55 of The Trade and Merchandise Marks Act, 1958 argued that the application in India of trademark to goods to be exported constituted the 'use' of trademark. In support of his contention Mr. Tripathi relied upon a decision of this Court in Flower Tobacco Company v. State and Anr. 1986-PTC-352 wherein the application in India of trademark to goods to be exported from India was held to constitute the 'use' of the trademark. Mr. Chandra, on the other hand, citing a decision of Calcutta High Court in Aktiebolaget Jonkoping Vulcan v. S.V. Palanichamy Nadar and Ors. AIR 1969 Calcutta 43 argued that since the trademark law is not extra territorial, use of a particular trademark abroad would not amount to 'use' within the meaning of the Indian Trade and Merchandise Marks Act. Noticeably, the case relied upon on behalf of respondents pertained to a matter under Section 46(3) of the said Act for removal from registration and imposition of limitations on the grounds of non use. It was in the context of application of Section 46 that the definition of word 'trademark' under Section 2(v), speaking of 'use' in relation to goods, was held to mean use within the territory of India and not abroad and it was in that context that if a trademark is not used in India that could be a ground for removal from the Indian register and use of trademark abroad or outside India could not be pleaded as a sufficient ground for retaining a registered trademark in Indian trademark register. Thus, the issue involved in the above referred case is relatable to a different set of facts and cannot be applied in support of the plea that use of trademark for export trade as contemplated under Section 55 of The Trade and Merchandise Marks Act would be confined in relation to the goods to be sold or otherwise traded within India only. Undoubtedly, once a status quo order in regard to 'use' of the trademark "KANGARO" was in operation, such 'use' would be permissible in relation to the goods sold within India and also by way of export to other countries.

11. Questioning the sustainability of the interim order dated 10th October, 2006 restraining the respondents from prosecuting their action before the Dubai Court, thrust of Mr. Chandra's argument was that in exercise of its contempt jurisdiction this Court was not empowered to pass such an order. In this connection he also made a reference to Section 41(h) of the Specific Relief Act and in support referred to a decision of the Supreme Court in Page 0273 Cotton Corporation of India Ltd. v. United Industrial Bank Ltd. and Ors. . In addition, another decision of the Apex Court in V.M. Manohar Prasad v. N. Ratnam Raju and Anr. (2004) 13 SCC 610 was also relied upon.

12. V.M. Manohar Prasad (supra) was a case where in exercise of contempt jurisdiction a supplemental direction was issued to the authorities particularly the Government, to sanction a given number of posts so that certain employees could be absorbed on permanent posts. It was held in the facts of that case that the Judge disposing of the contempt matter had no jurisdiction to pass a supplemental order to the main order granting relief. The main order simply contained a direction that the employees completing five years' continuous service were to be considered for regularization against clear vacancies of posts. The request of appellants for regularization was however turned down as the posts against which regularization was being sought were not sanctioned by the competent authority. Unlike in V.M. Manohar Prasad (supra), the interim order dated 10th October, 2006 restraining the respondents from pursuing the matter before the Dubai Court is not in the nature of a supplemental order rather the same simply aims at enforcing obedience to the status quo order, in regard to use of the trademark "KANGARO", passed way back in the year 1997. The Supreme Court in Oil & Natural Gas Commission v. Western Company of North America SCC 1987 (Vol. 1) 496, referred to by Mr. Parag Tripathi, had the occasion to take notice of its decision in Cotton Corporation of India Ltd.(supra) in which the question before the court was whether in the face of Section 41(b) of the Specific Relief Act the Court was justified in granting the injunction and it was held that Section 41(b) of the said Act could be attracted in the facts and circumstances where an injunction is sought to restrain the party from instituting or prosecuting any action in a court in India which is either of coordinate jurisdiction or is higher to the court from which the injunction is sought in the hierarchy of courts in India. It was clearly observed that there was nothing in Cotton Corporation of India Ltd. case which supports the proposition that the High Court has no jurisdiction to grant an injunction or restraint order in exercise of its inherent powers in appropriate cases. It was clearly laid down that the courts have undoubted jurisdiction to grant such a restraint order wherever circumstances of the case make it necessary or expedient to do so or the ends of justice so required.

13. A decision of the Supreme Court in Modi Entertainment Network and Anr. v. W.S.G. Cricket PTE. Ltd. (2004) 4 SCC 341, cited in support, on behalf of the petitioners, in exposition of law on anti suit injunction lays down thus:

10. The courts in India like the courts in England are courts of both law and equity. The principles governing grant of injunction-an equitable relief-by a court will also govern grant of anti-suit injunction which is but a species of injunction. When a court restrains a party to a suit/Page 0274 proceeding before it from instituting or prosecuting a case in another court including a foreign court, it is called anti-suit injunction. It is a common ground that the courts in India have power to issue anti-suit injunction to a party over whom it has personal jurisdiction, in an appropriate case. This is because courts of equity exercise jurisdiction in personam. However, having regard to the rule of comity, this power will be exercised sparingly because such an injunction though directed against a person, in effect causes interference in the exercise of jurisdiction by another court.

14. In Delhi Development Authority v. Skipper Construction Co. (P) Ltd. and Anr. , relied upon by Mr. Tripathi, the Supreme Court observing that 'a contemnor ought not to be permitted to enjoy and/or keep the fruits of his contempt' quoted with approval a Full Bench decision of the Madras High Court in Century Flour Mills Ltd. v. S. Suppiah and Ors. , wherein it was held:

...where an act is done in violation of an order of stay or injunction, it is the duty of the court, as a policy, to set the wrong right and not allow the perpetuation of the wrongdoing. The inherent power of the court, it was held, is not only available in such a case, but it is bound to exercise it to undo the wrong in the interest of justice...

15. There is thus no substance in the argument that no interim order restraining the respondents from proceeding with the matter before the Dubai Court could have been passed in the present case in view of Section 41(h) of the Specific Relief Act or in exercise of contempt jurisdiction.

16. It was argued on behalf of respondents that under the laws of UAE the respondents are under legal obligation to prosecute the proceedings there with due diligence failing which apart from the seized goods being released, the bank guarantee to the tune of AED 2 lacs furnished by them would be rendered liable to encashment thereby putting them to huge financial loss in case interim order restraining them from prosecuting their action before the Dubai Court is allowed to continue. In this context, suffices to say that the situation in which the respondents find themselves in, is of their own making and in a case where they are prima facie found to have acted in defiance of the status quo order they are rather under an obligation to purge themselves of the contempt instead of pleading for vacation of interim order dated 10th October, 2006 to enable them to continue with their action before the Dubai Court.

17. In the result, the application is allowed and the order dated 10th October, 2006 restraining the respondents from prosecuting their action before the Dubai Court concerning infringement action in respect of trademark "KANGARO" is confirmed and made absolute pending disposal of contempt petition. The application shall stand disposed of accordingly.