M/S Cico Technologies Ltd & Anr vs M/S Tapcrete Marketing P Ltd & Ors
2008 Latest Caselaw 1886 Del

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                   CS(OS) 2503/2001

%                                        Date of decision: 23.10.2008

M/S CICO TECHNOLOGIES LTD & ANR ....... Plaintiffs
                                   Through: Mr Ashok Chhabra, Advocate

                                     Versus

M/S TAPCRETE MARKETING P LTD & ORS
                                 ......Defendant
                                    Through: Ex parte.


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                 No
       in the Digest?


RAJIV SAHAI ENDLAW, J.

1. This suit has been filed to restrain the infringement and

passing off of the mark TAPECRETE in relation to Polymer Modified

Cementatious Materials / goods. The defendant No.1 is a private

limited company incorporated on 8th February, 2001 with the

Registrar of Companies, Delhi and Haryana impleaded as the

defendant No.10. A relief is also claimed in the suit for cancellation

of the incorporation of the defendant No.1 with the name

TAPECRETE in which the plaintiffs claim rights. The defendants 4, 5

and 6, of which the defendant No.6 is a Canadian citizen, are stated

to be the persons who have got the defendant No.1 incorporated.

The defendants 4 and 5 are also stated to be the Directors of the

defendant No.1. The defendant No.3 M/s Maruti Traders is stated to

be an authorized dealer of the plaintiff with respect to goods

manufactured by the plaintiffs, inter alia, under the mark

CS(OS) 2503/2001 Page of 1 of 8 TAPECRETE. The defendant No.3 is stated to have connived with

the other defendants to sell and market goods under the mark

TAPECRETE not manufactured by the plaintiffs. The defendants 1 to

7 are generally stated as persons who are marketing the goods

under the mark TAPECRETE.

2. Vide ex parte order dated 6th December, 2001 the defendants 1

to 9 and their agents etc were restrained from manufacturing,

selling, offering for sale etc and dealing in Polymer Modified

Cementatious Materials or any other cognate and allied goods under

the trademark TAPECRETE; the defendant No.1 was also restrained

from importing, selling or offering for sale any material in the name

of the defendant No.1 company from outside India and the

Directorate of Revenue Intelligence was also directed to confiscate

any material of the defendants entering into India from any port of

India under the trademark TAPECRETE in the name of the

defendants 1 to 9. However, subsequently, on 29th April, 2003, on

application of the Directorate of Revenue Intelligence, the order

against them was vacated.

3. The defendant No.1 and the defendants 2 to 6 appeared

through their respective counsel. On some dates presence was also

noted of the counsel on behalf of defendants 7 and 9.

4. The defendants 2 and 6 filed their written statement,

application for vacation of the ex parte order, application for

rejection of the plaint, alongwith some documents. However, the

CS(OS) 2503/2001 Page of 2 of 8 said defendants also failed to file the written statement to the plaint

as allowed to be amended on 16th January, 2006 and ultimately vide

order dated 9th November, 2006 all the defendants were proceeded

against ex parte and the plaintiffs were directed to lead ex parte

evidence. The plaintiffs in their ex parte evidence have tendered the

affidavits of Mr D Bhattacharya, Deputy General Manager of the

plaintiff and of Mr Amit Gupta, Managing Director of the plaintiff.

The defendants remain ex parte and the said witnesses of the

plaintiff were not cross examined.

5. The case of the plaintiffs in the plaint is that the plaintiff No.2

M/s FRC Composites (India) Private Limited was set up in technical

collaboration with FRC Composites Limited, a corporation continued

under laws of Canada and having its principal office at Canada; that

the plaintiff No.2 is the registered owner of the trademark

TAPECRETE which is duly registered at No.471218 in class I in the

register of trademarks. In the same paragraph 2 of the amendmed

plaint, it is also stated that the plaintiff No.2 is the permitted user of

the trademark in India under Section 49 of the Trade and

Merchandise Mark Act, 1958. It is further the case in the plaint that

the father of Shri Amit Gupta (supra) was carrying on business, inter

alia, in the aforesaid goods and upon the demise of the father of the

said Amit Gupta, under a settlement within the family of Shri Amit

Gupta, Shri Amit Gupta got the right to carry on business, inter alia,

under the brand TAPECRETE. It is further pleaded that pursuant to

the aforesaid family settlement Form TM-23 under the Act was filed

for transfer of the mark TAPECRETE from the plaintiff No.2 to the

plaintiff No.1. Again in para 10 of the plaint the plaintiff No.2 is

described, on the one hand as the absolute owner of the registered

CS(OS) 2503/2001 Page of 3 of 8 trademark TAPECRETE, and on the other hand it is pleaded that the

plaintiff No.2 is the permitted user of the trademark.

6. It is further the case in the plaint that the defendant No.6 Ms

Linda Karauks is the daughter of Mr Ergo Karauks who was the

President of FRC Composites (Canada) Ltd (supra), collaborators of

plaintiff No.2; that the said FRC Composites (Canada) Ltd is 40%

shareholder in the plaintiff No.2; that the defendant No.6 was

actively involved in the business and was aware of the transfer of the

trademark by the plaintiff No.2 to the plaintiff No.1; that the

Defendant No.6 in collusion with the other defendants had hatched

plans to infringe / violate the trademark TAPECRETE without any

authorization whatsoever.

7. PW2 Amit Gupta examined by the plaintiffs in their ex parte

evidence has not advanced the case further than as pleaded in the

plaint, save for proving certain documents in support of the family

settlement. PW1 Mr D Bhattacharya in his affidavit sought to prove

the orders dated 11th March, 2005 and 3rd March, 2006 of the

Intellectual Property Appellate Tribunal in a proceeding under

Sections 56 and 107 of the 1958 Act filed by FRC Composites

Limited, Canada against the plaintiffs herein and the Registrar of the

Trademarks. Even though at the time of tender of the affidavit of

PW1, the said orders being merely the computer print out, were

given a mark but the same being judicial orders and there be nothing

to suggest that the same are not a correct copy of the original, can

be read. A perusal of the order dated 11th March, 2005 discloses

that it was not disputed by the plaintiffs herein in the said

proceedings that FRC Composites Limited, Canada is the owner of

CS(OS) 2503/2001 Page of 4 of 8 the mark TAPECRETE registered in Canada and other countries. It

was further not disputed that FRC Composites Limited, Canada had

entered into a collaboration for incorporation of plaintiff No.2 M/s

FRC Composites (India) Private Limited as a joint venture. Disputes

appear to have arisen in relation to the said joint venture company.

It was the case of the Canadian Company that the plaintiff no.2 had

fraudulently got the said mark TAPECRETE registered in its name in

India without any authorization of the Canadian company. On the

contrary, it was the case of the plaintiffs herein before the

Intellectual Property Appellate Board that the mark was got

registered in India in the name of the plaintiff No.2 with the active

participation of the Canadian Company. The Intellectual Property

Appellate Board, however, held that the Canadian company had

failed to explain the circumstances under which the application for

registration of the mark was made as far back as in 1987 and which

remained pending till registration in 1995 and further held that the

application by the Canadian Company for rectification had been filed

belatedly and the Canadian company had failed to explain as to why

the registration was allowed and hence dismissed the rectification

petition. PW1 had also proved a copy of the order dated 3 rd March,

2006 of the Appellate Board dismissing the review sought by the

Canadian company of the aforesaid order. The defendants being ex

parte, there is nothing on record to show that the aforesaid orders

were challenged further.

8. As noticed above there is an ambiguity in the language in the

plaint in paras 2 and 10. The plaintiff No.2 is, in the same breath,

described as the registered owner as well as the permitted user of

the trademark. The plaintiff No.2 as a permitted user cannot be the

CS(OS) 2503/2001 Page of 5 of 8 registered owner of the trademark. The plaintiff No.2 as the

permitted user of the mark, is also not entitled under Section 52 of

the 1999 Act to institute any proceeding for infringement of the said

trademark without impleading the registered owner of the said

trademark i.e., the Canadian Company. As aforesaid, the Canadian

company is not a party to the present suit.

9. Even though the plaintiff has not placed any document on

record to show itself as the registered owner of the mark and has

only placed documents to show the filing of the form TM-23 under

Section 45 of the 1999 Act for registration of assignment of the mark

from plaintiff No.2 to the plaintiff No.1, however, the registered

ownership of the plaintiff No.2 of the said mark stands established

from the orders aforesaid of the Appellate Board.

10. On the basis of the ex parte evidence before this court, the

position which emerges today is that the plaintiff No.2 is the

registered owner of the trademark even though it had in the plaint

claimed itself to be the permitted user also. At the time of the

institution of the suit in 2001, it was stated that registration of the

assignment of the mark from plaintiff No.2 to the plaintiff No.1 was

pending. At the time of leading ex parte evidence in 2007, it was not

said that the said assignment had been registered. However, it has

been held by this court in M/s. Modi Threads Limited v. M/s. Som

Soot Gola Factory and another AIR 1992 (Delhi) 4, Grandlay

Electricals (India) Ltd v Vidya Batra 1998 PTC (18) Delhi and

Astrazeneca UK Ltd. and Anr. v. Orchid Chemicals and

Pharmaceuticals Ltd. (2006) PTC 733 DELHI that rights in the

trademark accrue on the basis of assignment deeds and such rights

CS(OS) 2503/2001 Page of 6 of 8 cannot be denied on the ground that in the records of the Registrar

of Trademark, the mark is still shown in the name of the assignor

and that the assignee is entitled to protect the violation of the

trademark at the hands of unscrupulous persons. Also, in the

present case the registered owner of the mark TAPECRETE is also

the plaintiff No.2.

11. The written statement filed by the defendants 2 and 6 to the

plaint as originally filed also discloses that OMP376/2001 had been

preferred by the Canadian Company aforesaid against the plaintiff

No.1 and Mr Amit Gupta under Section 9 of the Arbitration Act for

restraining them from using the brand name TAPECRETE. However,

the outcome of the said OMP has not been explained. At this stage,

it is necessary to state that the parties even while leading ex parte

evidence, in cases where the opposite party had earlier appeared

and filed pleadings and documents are required to still explain/deal

with the said defence/documents. The plaintiff in the present case

has failed to do so. However, notwithstanding the above, since the

Canadian Company which was the adversary of the plaintiffs before

the Intellectual Property Appellate Board and in the OMP aforesaid

is not a party to the present suit and as such its rights are not to be

affected by anything held in the present proceedings and further

since the restrain is sought against others who appeared to be

exploiting the trademark TAPECRETE, perhaps taking advantage of

the disputes between the plaintiffs and the Canadian Company, I

conclude that the said persons i.e., the defendants 1 to 9 in the

present case, in any case, do not have any rights to the mark

TAPECRETE and the plaintiffs have become entitled to the relief of

injunction against them.

CS(OS) 2503/2001 Page of 7 of 8

12. The defendants 1 to 9 are thus restrained by a decree of

permanent injunction from either themselves or through their

agents, servants, from manufacturing, selling, offering for sale,

advertising directly or indirectly or dealing in Polymer Modified

Cementatious Materials under the trademark TAPECRETE or any

other trademark similar or deceptively similar to the said mark. The

defendant No.10 Registrar of Companies, Delhi and Haryana is also

directed by a decree of mandatory injunction to take appropriate

steps for striking off of the incorporation of the defendant No.1 M/s

Tapecrete Marketing Pvt Ltd registered at No.U00000DL2001PTC

109580 on 8th February, 2001, unless the defendant No.1 opts to

change its name. However, in the facts and circumstances of the

case, I do not find the plaintiffs entitled to the relief of restraining

import into India of the goods under the mark TAPECRETE or the

relief of rendition of accounts and delivery in favour of the plaintiffs.

I may notice that during the pendency of the proceedings, the

defendants had offered the materials worth Rs 10 lacs which the

defendants claimed to have been supplied by the plaintiffs to them

and order was made for inspection of the said material by the

plaintiffs but the record does not reveal anything having been done

in pursuance thereto. In the facts of the case, I do not find the

plaintiffs entitled to costs also.

The decree sheet be prepared accordingly.

                                             RAJIV SAHAI ENDLAW
                                                  (JUDGE)
October 23, 2008
M


CS(OS) 2503/2001                                                Page of 8 of 8