M/S General Electric Company vs Mr. Altamas Khan & Others
2008 Latest Caselaw 2283 Del

      *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                     CS(OS) No.1283/2006



%                                   Date of decision: 18.12.2008


M/S GENERAL ELECTRIC COMPANY ......................... Plaintiff

                      Through: Mr. Pravin Anand, Mr. Munish Mehra &
                               Mr. Nishan Bora, Advocates

                                 Versus

MR. ALTAMAS KHAN & OTHERS .......................... Defendants

                      Through:    Exparte


CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1.     Whether reporters of Local papers may
       be allowed to see the judgment?       NO

2.     To be referred to the reporter or not?   NO

3.     Whether the judgment should be reported
       in the Digest?                        NO


RAJIV SAHAI ENDLAW, J.

1. The plaintiff instituted the present suit to restrain the defendants

by a decree of permanent injunction from misrepresenting themselves

as authorized distributors of the plaintiff and from trading as GE

Dehumidifiers (Defendant No.3) or in any other deceptively similar

trading style and also from importing, exporting, distributing, selling

or dealing in Dehumidifiers or any other product of the plaintiff under

the trademark GE or GENERAL ELECTRIC or the GE monogram or

any other mark as may be deceptively similar to the plaintiff's

trademark. The plaintiff also claimed damages in the sum of Rs.20

lacs and an order for delivery of all products of the plaintiff including

Dehumidifiers and any other infringing material bearing the

trademark of the plaintiff.

2. Vide ex-parte order dated 2nd June, 2006, the defendants, their

partners, directors and agents were restrained from misrepresenting

themselves as authorized distributors of the plaintiff and from trading

as GE Dehumidifiers or from dealing in any product under the

trademark GE or GENERAL ELECTRIC or GE monogram or any other

mark deceptively similar thereto. Vide the same order, on an

application of the plaintiff, a local commissioner was also appointed to

visit the premises of the defendants and to inspect the Dehumidifiers

and other electrical appliances bearing the trademarks of the plaintiff

and also to determine if the same were "grey market" products or the

infringing version of the plaintiff's products and to seize the grey

market/infringing products and place them in superdari of the

defendants subject to further directions of the court. The said

commission was executed. As per the report of the commissioner filed

before this court, the local commissioner found the defendant No.1 at

the premises and identified himself as the proprietor of M/s Global

Electronics. The commissioner found 23 unopened sealed boxes

bearing the GE trademarks and describing the contents thereof as

Dehumidifiers. The commissioner, as directed, seized the said boxes

and after putting his signatures on the boxes placed the same in the

superdari of the defendant No.1. A superdarinama of the defendant

No.1 undertaking not to sell, dispose of or otherwise deal with the

said goods and to produce the same as directed by the court has also

been filed by the commissioner along with his report. The

commissioner did not find any books of account in the premises but

found two invoices in the said premises of the sale of two GE

Dehumidifiers. The said invoices have also been filed along with the

report. The said invoices are of GE Dehumidifiers, Mumbai and also

bear the GE monogram with respect whereto the suit has been filed.

3. The defendant No.2 who was impleaded in the suit as the only

other partner of the defendant No.1 carrying on business along with

the defendant No.1 in the name and style of M/s GE Dehumidifiers

(Defendant No.3) appeared before this court on 11th September, 2006

and stated that he was not connected with any of the activities of the

defendant No.1 and the defendant No.3 and was as such also not

connected with the reliefs claimed in the suit. On his said statement

he was dropped from the array of parties.

4. The defendant No.1 for himself and as sole proprietor of

defendant No.3 M/s GE Dehumidifiers filed a written statement.

5. The plaintiff had instituted the present suit objecting to the

business in the name and style of GE Dehumidifiers being carried on

for the reason of breach thereby of the registered trademark of the

plaintiff and the defendants thereby passing themselves off as the

authorized distributor or affiliate or having association with the

plaintiff. It was also the case of the plaintiff that the defendants are

illegally using the GE monogram of the plaintiff and of which the

plaintiff is the registered proprietor. It was further the case of the

plaintiff that the plaintiff though manufacturing and selling

Dehumidifiers, was not marketing the same in India; that the

defendants appeared to be acquiring the Dehumidifiers of the plaintiff

from territories other than India and illegally marketing the same in

India. It is the case of the plaintiff that such action of the defendants

of importation of the genuine products of the plaintiff to territory for

which they were not meant, amounted to the violation of the

trademark of the plaintiff and caused loss to the plaintiff. It was the

case of the plaintiff that the plaintiff for the reason of not marketing

Dehumidifiers in India was neither giving any warranty nor any after

sales service for the said Dehumidifiers in India and the illegal sale

thereof by the defendant caused loss of reputation to the plaintiff in as

much as the purchasers from the defendants on not being able to

claim on the warranty and not being able to get the after sales service

were likely to think ill of the plaintiff.

6. The defendants No.1&3 in their written statement while admitting

to be carrying on business in the name and style of M/s GE

Dehumidifiers explained the same as Global Enterprises and denied

thereby infringing the trademark of the plaintiff; they denied that they

were in any manner infringing the trademark of the plaintiff or

passing themselves off as a distributor or associate or affiliate of the

plaintiff; they further pleaded that the defendant was earlier in

collaboration with M/s Godrej marketing Dehumidifiers in India and

pleaded that they were in the business of purchasing old

Dehumidifiers, repairing and re-selling the same. The written

statement of the defendant is however conspicuously quiet as to the

contents of the report of the local commissioner. The defendants

No.1&3 also did not file any objections to the report of the local

commissioner. The plaintiff filed a replication reiterating its stand.

7. The defendants No.1&3 also, after filing the written statement

stopped appearing and were vide order dated 20th November, 2006

proceeded against ex-parte. The plaintiff has led ex-parte evidence by

filing the affidavits by way of examination in chief of its constituted

attorney Ms. Rubi Anand and of the Chartered Accountant Mr.

Sanjeev Sharma. The defendants No.1&3 remain ex-parte and the

evidence of the plaintiff remains unrebutted and unchallenged.

8. The witnesses of the plaintiff have proved the registrations of the

trademark GE monogram, GENERAL ELECTRIC (GE), GE in class

1,2,3,6,7,9,10,11,12 &17 as Exhibit P-4 to Exhibit P-8. It has further

been deposed and which deposition is believed and correct that the

name/mark GENERAL ELECTRIC and the mark GE are as much a

household word in India as some of the known Indian trademarks,

owing to the involvement of the plaintiff with the growth of

infrastructure and amenities in India; that the products of the plaintiff

have been well received in India and the plaintiff has huge sales in

this country; that the plaintiff is involved in a large range of electrical

consumer and household goods and has a strong network of after

sales service, back up support, sales promotion etc. in India and all of

which adds to the good reputation being enjoyed by the plaintiff.

9. As far as the relief of permanent injunction is concerned, I have

no hesitation whatsoever in holding the plaintiff entitled to the same.

The name GE Dehumidifiers in which the defendant No.1 is carrying

on business is suggestive of the defendant No.1&3 being an

authorized distributor affiliate or associate of the plaintiff. The

Dehumidifiers in which the said defendants are dealing are generally

sold and marketed from same outlets from which electrical household

goods viz. refrigerators, freezers, electric cookers, microwave, washer

cookers, water systems, ventilation system etc. in which the plaintiff is

admittedly dealing in India through various companies and

subsidiaries and authorized distributors. The Dehumidifiers fall in the

same class of goods in which the plaintiff is carrying on business in

India. Even though the plaintiff is not carrying on business in

Dehumidifiers in India for the present but the same would not come in

the way of the plaintiff being entitled to the grant of injunctive relief

in as much as a common man wanting to purchase/acquire a

Dehumidifier is not likely to know that the plaintiff is not dealing in

Dehumidifiers in India and is likely to believe that the Dehumidifiers

being sold by the defendants No.1&3 are under authorization from

the plaintiff. Such a consumer is further likely to expect the

compliance of the warranty conditions and after sales service and

support associated with the other products of the plaintiff in India and

is definitely likely to blame the plaintiff and the esteem in which the

plaintiff is held by the said consumer is likely to fall, upon such

consumer not getting the same, in as much as the plaintiff has stated

that it is not providing such services in India in relation to

Dehumidifiers.

10. Though, the defendants sought to explain the trade name of GE

Dehumidifiers adopted by it as Global Enterprises but the name

Global Enterprises nowhere appears on the invoices seized by the

local commissioner from the premises of the defendant. The report of

the local commissioner, in the absence of any objection to the same is

entitled to be read by this court. Had the intentions of the defendants

been bonafide, nothing prevented them from using the name Global

Enterprises for their business and which would have not led anyone to

believe that the defendants had any association with the plaintiff, in

as much as the plaintiff is equally well known as GENERAL ELECTRIC

as it is as GE. However, the use by the defendants of GE instead of

Global Electronics on its invoices can lead to only one assumption i.e.

that the defendants thereby wanted to pass off their business and

their products as that of the plaintiff and intended to confuse and

deceive the customers and public at large. Not only so, the invoices

seized by the commissioner also contain the GE monogram and which

puts the matter beyond any pale of controversy. The defendants by

using the said monogram clearly infringed the trademark of the

plaintiff and sought to pass themselves off as the plaintiff.

11. The plea of the defendant of dealing in old/used legitimate

Dehumidifiers of the plaintiff besides having been not substantiated

by the defendants, is otherwise also not believable in the light of the

report of the court commissioner. The court commissioner has

reported brand new sealed boxes of Dehumidifiers of the plaintiff

acquired from other countries being found in the premises of the

defendants.

12. The present being an ex-parte matter, I, in this, do not deem it

appropriate to deal with the issue of parallel importation and

trademark infringement, with respect whereto a number of judgments

of foreign courts/tribunals have been relied upon by the counsel for

the plaintiff. This is also for the reason that I have found the plaintiff

otherwise entitled to the relief claimed.

13. The next question which arises is of the claim of the plaintiff for

damages. The Chartered Accountant engaged by the plaintiff by his

unrebutted evidence assessed the loss caused to the plaintiff to be of

Rs.25 lac. The claim for damages in the plaint was however confined to

Rs.20 lac only. As aforesaid, 23 Dehumidifiers were seized by the court

commissioner from the premises of the defendants and were left in the

superdari of the defendant No.1. I direct the defendant No.1 in whose

superdari the said Dehumidifiers were left by the court commissioner

to deliver the same to the representative of the plaintiff. The defendant

No.1 shall be liable for consequences, if fails to deliver the said

Dehumidifiers to the plaintiff. However, mere delivery of the said

Dehumidifiers to the plaintiff would not be a substitute for damages in

as much as in the absence of the plaintiff carrying on business in

Dehumidifiers in India, the same are likely to be of no use to the

plaintiff. It is not clear as to what it would cost the plaintiff if the

plaintiff was to export the said goods from India to other territories for

which they were meant. The defendant has been found to be infringing

the trademark of the plaintiff and passing off his business as that of the

plaintiff. Although, there is no complaint of breach of interim order by

the defendants but the defendants merely by remaining absent cannot

escape the liability for damages. The evidence of the plaintiff shows

that the defendant was selling each Dehumidifier for approximately

Rs.25,000/-. The defendant avoided to show his books of accounts also.

From large consignment of 23 Dehumidifiers seized from the premises

of the defendants, it is apparent that the defendant No.1 was dealing in

large volumes. The cost of the Dehumidifiers to the defendants has not

been established but considering that in the last few years, the return

on investments in stocks and mutual funds itself has been in excess of

15%, it can safely be assumed that the defendants would be carrying

on business for returns in excess of return on investments in stocks and

mutual funds. Following the said principle I assume that the

defendants had a margin of 22 to 25% at least on each Dehumidifier i.e.

of over Rs.5,000/- on each Dehumidifier. On this basis I consider the

award of damages in the sum of Rs.10 lacs as appropriate.

14. This court in Microsoft Corporation Vs. Yogesh Papat 2005

(30) PTC 245 (Del) has held that the plaintiff would be entitled to

damages for the reason that it would be futile to direct the defendants

to render accounts for the reason of the defendants carrying on

business surreptitiously. Similarly, in Time Incorporated Vs. Lokesh

Srivastava 2005 (30) PTC 3 (Del) also it was held that where

infringement is found, punitive damages should follow to discourage

such law breakers.

15. The suit of the plaintiff is thus decreed against the defendants

No.1&3 for the relief of permanent injunction restraining the

defendants and their agents from misrepresenting themselves as

authorized distributors of the plaintiff and from trading as GE

Dehumidifiers or in any other name deceptively similar thereto and

from importing, exporting, distributing, selling, advertising or dealing

in Dehumidifiers or any other products as of the plaintiff, under the

trademark GE or GENERAL ELECTRIC or GE monogram or marks

deceptively similar thereto. A decree for recovery of Rs.10 lacs is also

passed against the defendants No.1&3. A decree for delivery of the

goods seized by local commissioner appointed on 2nd June, 2006 is also

passed and the defendant No.1 in whose superdari the said goods were

kept is directed to deliver the seized goods to the representatives of the

plaintiff. The plaintiff shall also be entitled to costs against the said

defendants. The decree sheet be drawn up.

RAJIV SAHAI ENDLAW (JUDGE)

December 18, 2008 PP