Society Des Products Nestle S.A. & ... vs Satya Prakash Maheshwari & Ors.
2008 Latest Caselaw 1562 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

+     RFA (OS) NO.11/2008 & CM NOS.2886/2008, 2887/2008

                                  Reserved on : 3rd July, 2008
                                  Date of Decision : 5th September, 2008

SOCIETY DES PRODUCTS NESTLE S.A. & ANR ...... Appellants
                      Through: Mr.Hemant Singh, Advocate
                      with Ms.Mamta Rani Jha, Advocate.

                         Versus
SATYA PRAKASH MAHESHWARI & ORS. ...... Respondents
               Through: Mr.Sai Krishna, Amicus Curiae.

CORAM :
HON'BLE MR. JUSTICE MUKUL MUDGAL
HON'BLE MR. JUSTICE V.K.SHALI


1.    Whether reporters of local papers may be allowed to see the
      judgment?                                                Yes
2.    To be referred to the Reporter or not?                    Yes
3.    Whether the judgment should be reported in the Digest? Yes



                         JUDGMENT

V.K. SHALI, J:

1. This is an appeal against the judgment dated 17th December, 2007

delivered by the learned Single Judge in CS(OS) No.1943/2006 titled as

Society Des Products Nestle S.A. & Anr. Vs. Satya Prakash

Maheshwari & Ors. By the impugned judgment although the suit of the

appellant has been allowed, so far as the grant of relief of permanent

injunction against the respondents is concerned but the prayer of the

appellant for the rendition of accounts and the payment of damages has

been disallowed.

2. The facts of the case are as follows:

a) The plaintiff/appellant herein filed a Civil Suit No.1943/2006 for

permanent injunction restraining the defendants from infringing their

registered trademarks, copyright and for rendition of accounts of

profits/damages etc. against the defendants/respondents herein.

b) The case which was set up by the appellant in the plaint was to the

effect that the appellant is a manufacturer of noodles which are being

sold by them under the brand name of ―MAGGI‖.

c) It was alleged by the appellant that respondent no.2 is a

manufacturer of packaging the offending product, which is similar to the

product of the appellant, and is being sold under the brand name of

―MAGIC‖.

d) The respondents were alleged to be indulging in reproduction of

the ―MAGGI‖ logo and the Maggi packaging scheme with overall colour

combination, get up lay out plan arrangement of features constituting

infringement of the appellant's copy right as well as the violation of their

registered trade mark.

e) The respondent Nos.2 and 3 were functioning as printers and were

executing the orders placed on them by respondent no.1 and the

respondent no.1 was the main manufacturer and selling the product

under the alleged brand name of ―MAGIC‖.

f) The respondents had responded to the notice issued by the Court

and on the very first day i.e. on 14.12.2006 the respondent Nos.2 and 3

made a statement before the Court that they were functioning as printers

and were executing the order which were placed before them by the

respondent no.1.

g) The respondent Nos.2 and 3 stated before the Court that this is the

statement of defence and they are not intending to sell the infringing

product. So far as respondent Nos.1,4 and 5 were concerned, they

sought time to file their written statement and contested the claim of the

appellant.

h) On 22nd October, 2007, the learned counsel for respondent Nos.1,

4 and 5 made a statement that they are willing to compromise the suit and

made an offer without prejudice to their rights and contentions that if the

appellants are willing to give up their relief/claim in respect of prayer ‗e'

in the plaint which pertains to the grant of damages and rendition of

accounts they are willing to suffer a decree in terms of prayers (a),(b),

(c), (d) and (f).

i) The learned counsel for the appellant prayed for some time to seek

instructions and the matter was adjourned to 27th November, 2007. On

27th November, 2007 the matter was again adjourned to 17th December,

2007 on which date the learned Single Judge passed an order decreeing

the suit of the appellant/plaintiff for permanent injunction and

restraining respondent no.1 in terms of prayer (a), (b), (c) and (d) of para

28 of the plaint.

3. It may be pertinent here to reproduce the prayers made by the

appellant in the plaint which read as under:-

―It is therefore respectfully prayed that this Hon'ble Court may be pleased to grant the following reliefs in favour of the plaintiffs and against the defendants:

(a) A decree for permanent injunction restraining the defendants, their partners or proprietor as the case may be, their assigns in business, franchises, licences, distributors and agents from printing, packaging, producing, selling, offering for sale, advertising, directly or indirectly dealing in food products including noodles under the impugned trade mark MAGIC or MAGIC logo, or any other trade mark or logo as may be identical to or deceptively similar with the plaintiff's trade marks MAGGI and MAGGI logo amounting to infringement of appellants registered trade marks Nos.267814, 267813, 578342, 578343, 475983 and 1056836;

(b) a decree for permanent injunction restraining the defendants, their partners or proprietor as the case may be, their assigns in business, franchisees, licencees, distributors and agents from printing, packaging, producing, selling, offering for sale, advertising, directly or indirectly

dealing in food products including noodles under the impugned trade marks MAGIC, MAGIC logo and impugned packaging pertaining thereto, or any other trade mark, logo or packaging as may be deceptively similar to the trade mark MAGGI, MAGGI logo and packaging pertaining thereto and likely to cause confusion or deception, leading to passing off of the goods or business of the defendants for those of the plaintiffs;

(c) a decree for permanent injunction restraining the defendants, their partners or proprietor as the case may be, their assigns in business, franchisees, licencees, distributors and agents from using, reproducing, printing, selling, offering for sale or dealing under the impugned MAGIC logo or packagings or any other logo or packaging as may be a colourable imitation or substantial reproduction of MAGGI logo and MAGGI noodle packaging in respect of its colour combination, get up, lay out or arrangement of features, amounting to infringement of copyright of plaintiffs therein;

(d) a decree directing the defendants to deliver up all the infringing and impugned packagings, printed rolls of infringing packagings machinery and equipments used in printing the infringing packagings, printing cylinders, their blocks, negatives or dyes, as the case may be, to an authorised representative of the plaintiffs for destruction;

(e) An order for rendition of accounts of profit illegally earned by the defencants and a decree for an amount so found due or in the alternative a decree for Rs. Twenty Lakhs(Rs.20,00,000) towards token damages may be passed in favour of the plaintiffs and against the defendants;

(f) An order for costs in the proceedings

(g) Any other order as this Hon'ble Court deems fit and proper under the facts and circumstances of present case‖

4. So far as the appellant is concerned, no relief was granted with

regard to the grant of damages as well as rendition of accounts qua the

respondents. The Learned Single Judge referred to Section 135 of the

Trade Marks Act, 1999 and came to the conclusion that as the

respondent no.1 was a small operator inasmuch as the product which was

alleged to be passed off by him under the brand name of ‗Magic' which

was similar to the ‗Maggi' of the appellant, was carrying a price of

Rupee one against the ten rupees at which the ‗Maggi' was being sold,

therefore, there was no merit in the submission of the appellant to the

effect that the respondent no.1 could have earned a huge profit since the

price of the product sold by the respondent was so low therefore he could

have hardly made any profit. It was also observed by the learned Single

Judge that there was no chance of public being misled on account of the

vast differential in the price of the two products, notwithstanding the fact

that there was a similarity in packaging and colour scheme. Further as

the respondent no.1 had agreed to suffer a decree voluntarily, the learned

Single Judge, did not pass any order with regard to the grant of damages

and rendition of accounts on account of the fact that under Section 135, it

was discretionary on the part of the Court to grant such damages.

5. The appellant is aggrieved by the aforesaid judgment. It is the

contention of the learned counsel for the appellant that it was a fit case

where all the respondents including the printers (respondent no.2 & 3)

ought to have been subjected to damages apart from the rendition of

accounts. One of the main contentions of the learned counsel for the

appellant has been that the judgment and order passed by the learned

Single Judge is liable to be set aside inasmuch as the learned Single

Judge did not frame any issue nor did he give any opportunity to the

appellant to adduce its evidence in support of its case.

6. It was also urged by the learned counsel for the appellant that the

decree for permanent injunction ought to have been passed against the

respondent nos.2 and 3 also. The respondent Nos.2 and 3 are the printers

who on the very first date of hearing in the Civil Suit No. 1943/2006

appeared and stated that they were functioning only as printers and were

executing the orders placed on them by the respondent no.1. They

admitted their mistake and stated that they would not print the offending

packaging material which led to the filing of the suit. The obduracy of

the appellant is exemplified by its insistence upon proceeding against the

printers respondent nos.2 and 3. One fails to understand how a printer

working on a print order by the respondent no.1 could be guilty of

violation of the intellectual property rights of the appellant. If the plea of

the appellant is accepted, it would lead to a bizarre situation where any

printer faced with an order of commercial logos would be required to

have a search conducted in the trade mark registry to configure if the

order under print violates the rights of any party. It is not the case of the

appellant that the respondent nos.2 and 3 had printed labels after any

legal notice by the appellant or any order by the Court. The logic of the

appellant carried further would also make an innocent printer of a book

liable for copyright violations by the book printed or the defamation

caused by such publication. By the same logic the transporter of the

offending goods and the warehouse owner where the goods may be

lodged would also be guilty of violating the inflated and overambitious

claim of the appellant. This approach of the appellant is thus calculated

to overawe anyone who may have had a role, however, remote and

innocent, in the creation, transportation, storage of the offending goods

and/or their packaging.

7. The learned counsel for the appellant has also referred to the

judgment given by the learned Single Judge in Hero Honda Motors

Ltd. Vs. Shree Assuramji Scooters 2006 (32) PTC 117 (Delhi) where

apart from permanent injunction granted by the Hon'ble Court damages

of Rs.5,00,000/- (Rupees Five Lacs) was also granted against the

respondents in a case where the offending trademark was deceptively

similar to the trademark of the party invoking the jurisdiction of the

Court in the said case. The learned counsel for the appellant has also

placed reliance on case titled as Makhan Lal Bangal Vs. Manas Bhunia

& Ors. AIR 2001 SC 490 in support of his contention that framing of

issues is an important aspect of trial which the Ld. Single Judge has

failed to follow.

8. We have considered the submissions made by the learned counsel

for the appellant and have gone through the record. The first contention

of the learned counsel for the appellant that the entire judgment dated

17th December, 2007 is liable to be set aside on the ground that no issues

have been framed or that no evidence has been permitted to be led by the

plaintiff/appellant does not have any force. This is on account of the

fact that the question of framing of issues would arise only when the

parties are at lis that means an issue will be framed under Order 14 of

CPC by the Court only when there is assertion made by one party on a

question of fact or a law which is denied by the 'defendant' in a suit. The

relevant provision of Order 14 Rule 1of the CPC reads as under :

―Framing of issues:-(1) Issues arise when a material proposition of fact or law is affirmed by the one party and denied by the other.‖

9. The plea of the learned counsel for the appellant loses sight of the

aforesaid provision of law which if seen in the facts of the present case

would not warrant framing of issues. In the instant case, the appellant

admittedly filed a suit for permanent injunction against the respondents

and also claimed the relief of damages as well as rendition of accounts

on the ground that the registered trade mark namely ‗MAGGI' is

infringed and deceptively being copied and passed off by the

respondents by selling a similar product under the brand name of

―MAGIC‖ which has the same colour combination, scheme, format, etc.

so as to misled public. The respondent Nos.2 and 3 are the printers who

on the very first date of hearing appeared and admitted their mistake and

stated that they would not print the offending packaging material which

has led to the filing of the suit, any further, as the same was being done

by them at the instance of Respondent No. 1 therefore no lis qua the

Respondent No. 2 or 3 arises.

10. Similarly, the others namely respondent Nos. 1,4 and 5 were

given time to file the written statement who subsequent thereto through

their counsel made a statement on 27th October, 2007 that even they are

also prepared to suffer a decree in terms of prayers (a), (b), (c) , (d) and

(f) provided the prayer (e) in the plaint is given up by the Appellant. It

may be pertinent here to mention that prayer (e) pertains to grant of

damages and the rendition of accounts by the respondents on account of

using offending trade mark. The learned counsel for the appellant

sought time to seek instructions but the Court was not informed about

the instructions on the date to which the matter was adjourned thereafter

necessitating the learned Single Judge to pass the impugned

order. Since the counsel for the appellant was present at the time of

passing the order and had not pressed specifically for the grant of

rendition of accounts or damages, it was well within the discretion of the

learned Court to assume that this prayer is not being pressed by the

appellant. Even otherwise what weighed with the Court was that the

offending product is being sold at Re.1 (Rupee One) against Rs.10/-

(Rupees Ten) of the appellant therefore the Respondent no.1 could have

hardly expected to have made a fortune. We, therefore, feel by passing

an order of rendition of accounts or granting damages will not be

advancing the cause of justice or rather we would be causing injustice

to the respondents and penalize them for their forthrightness by

awarding damages and the rendition of accounts.

11. Section 58 of the Evidence Act clearly lays down that a fact which

is admitted need not be proved. Similarly, Order 12 Rule 6 of the CPC

of the Act clearly lays down that a judgment can be passed on the

admission made by the party in the pleadings or otherwise. The

admission which is made by a party warranting the passing of a

judgment on the basis of admission must be clear, unambiguous without

any condition. The exact language of the aforesaid two provisions are as

under :

Section 58 of the Evidence Act,

―58. Facts admitted need not be proved.--No fact need to be proved in any proceeding which the parties thereto or their agents

agree to admit at the hearing, or which, before the hearing, they agree to admit by any writing under their hands, or which by any rule of pleading in force at the time they are deemed to have admitted by their pleadings: Provided that the Court may, in its discretion, require the facts admitted to be proved otherwise than by such admissions.‖ Order 12 Rule 6 of the CPC:-

―6. Judgment on admissions.--(1) Where admissions of fact have been made either in the pleading or otherwise, whether orally or in writing, the Court at any stage of the suit, either on the application of any party or of its own motion and without waiting for the determination of any other question between the parties, make such order or give such judgment as it may think fit, having regard to such admissions.

12. Coming back to the facts of the present case in the light of the fact

that the respondent Nos.2 and 3 on the very first date of appearance made

an admission before the learned Single Judge that they would not print

the offending material any further in itself was sufficient not to proceed

against them and pass a Judgment under Order 12 Rule 6 against them

but the Ld Single Judge deferred the same on account of the fact that

other respondents namely Respondent Nos. 1,4 and 5 had sought

time. Respondent Nos.1, 4 and 5 had also conceded before the learned

Single Judge on 27th October, 2007 that they have no objection in case a

decree in terms of prayers (a), (b), (c) and (d) is passed. Thus both these

separate admissions made by the two sets of Respondents was sufficient

enough for the learned Single Judge to pass a decree of permanent

injunction in favour of the appellant without resorting to framing issues

and permitting the appellant to adduce evidence, as this was not

warranted. There was no confusion or doubt the admission by the

Respondent was not voluntary or unambiguous. If the Court would

have framed issues and permitted the appellant to adduce evidence

despite the admission of the respondents, it would have only permitted

the appellant to indulge in unnecessary litigation.

13. In the instant case, the learned Single Judge has rightly observed

that respondent no.1 is a small time operator and cost of the product

which was being sold by him was only Re.1/-(Rupee One) as against the

product of the plaintiff, which was being sold at Rs.10/- (Rupees

Ten). Notwithstanding the fact that the price differential between the

product of the appellant and that of the respondent no.1 was substantial,

even otherwise also the product of the plaintiff will invariably be

consumed by school going children of a specific age group. Therefore,

the public especially school children who constitute the major segment

of consumer of product would hardly be expected to be deceived by the

colour formula, combination format of the product of the -‗MAGIC' to

be that of ‗MAGGI'. It could hardly be said to be a ground for passing

an order of punitive damages against a small time operator.

14. A perusal of Section 135 (b) of the Trade Marks Act, 1999 lays

down that if at the time of commencement of the use of trade mark in the

suit, a party was unaware and had no reasonable ground for believing

that the trademark of the plaintiff was on the register or when he

becomes aware of the existence and nature of the plaintiff's right in the

trade mark forthwith ceases to use the said trade mark in relation to such

goods, the Court shall not grant relief by way of damages (other then

normal damages) or on account of profits. Thus there is a clear mandate

in a case of the present nature where the parties were not aware that there

mark was offending a registered trade mark of appellant and at the

threshold admitted their mistake. The grant of damages even nominal

or rendition of account would not only have been against the law but also

unjustified and harsh. In our view, the respondent no.1 is only a small

time operator who has accepted his mistake on the very first instance

without wasting the time of the Court and therefore, we agree with the

view of the learned Single Judge in not granting the damages nominal or

punitive to the appellant on the basis of the admission of infringement of

its trademark by respondent no.1. The judgment which has been relied

upon by the learned counsel for the appellant in Hero Honda's case

(supra) is distinguishable from the facts of the present case inasmuch as

that was a case in which the respondent had not admitted that it had

indulged in violation of any trademark and further the status of the

parties would also not comparable with the status of parties in the present

case and accordingly merely on account of the fact that damages to the

tune of Rs.5,00,000/- (Rupees Five Lacs) had been granted in the said

case, could hardly be said to be a ground for grant of damages in the

present case. Similarly, the second judgment also cited by the learned

counsel for the appellant is also not applicable in view of clear admission

made by the Respondents on two different dates and Section 58 of The

Evidence Act and Order 12 Rule 6 C.P.C. in the present case.

15. So far as the grant of injunction against the remaining defendants/

respondents are concerned, the grievance of the appellant is also not

sustainable on account of the fact that the respondent no.1 was the main

distributor or the seller of the offending product. It was he who had

been getting the goods sold under the brand name of ‗MAGIC' after

getting the goods printed, packed etc. and if he himself had admitted his

mistake and permitted himself to suffer from the decree of injunction,

there is hardly any occasion to pass a corresponding decree against the

remaining defendants/respondents. Even otherwise assuming though

such a decree is passed in favour of the appellant and against the

respondent Nos.2 to 4, it would be a mere paper formality inasmuch as

the respondent no.1 himself has admitted that he does not intend to

proceed further in the said business resulting in the offence to the trade

mark of the appellant.

16. For the reasons mentioned above, we are of the considered

opinion that there is no merit in the appeal filed by the appellant only for

reasons which are inexplicable and amounts to needless and avoidable

litigation. Accordingly, the appeal is dismissed. We refrain from

imposing costs as we had appointed Amicus Curiae Shri Sai Krishna

whose efforts for rendering assistance are appreciated.

(V.K.SHALI) JUDGE

(MUKUL MUDGAL) JUDGE September 05, 2008 RN/RS