M/S. Amar Singh Chawal Wala vs M/S. Shree Vardhman Rice & Genl. ...
2009 Latest Caselaw 2316 Del

        IN THE HIGH COURT OF DELHI AT NEW DELHI

                                    Date of decision: May 29, 2009.

                FAO (O) No. 138 of 1996 & C.M.No. 842 of 2001


        M/S. AMAR SINGH CHAWAL WALA                ..... Appellant
                      Through: Mr. Valmiki Mehtra, Senior
                      Advocate with Mr. Gurvinder Singh,
                      Advocate.

                versus

        M/S. SHREE VARDHMAN RICE AND
        GENL. MILLS                             ..... Respondent
                      Through: Mr. S.K. Bansal, Advocate.

        CORAM:
        HON'BLE THE CHIEF JUSTICE
        HON'BLE DR. JUSTICE S. MURALIDHAR

         1. Whether Reporters of local papers may be
            allowed to see the judgment?                               No
        2. To be referred to the Reporter or not?                  Yes
        3. Whether the judgment should be reported in Digest? Yes

                            JUDGMENT

S. MURALIDHAR, J.

1. This appeal is directed against the impugned order dated 1 st March

1996 passed by the learned Single Judge dismissing IA No.6222 of

1989 filed by the Plaintiff/Appellant in Suit No. 2247 of 1989).

2. The aforementioned suit was filed by the Plaintiff/Appellant seeking

a permanent injunction to restrain the Defendants/Respondents from

infringing the Plaintiff‟s registered trade marks in the device of

QILLA, the words GOLDEN QILLA (word per se), LAL QILLA

CHAPP (word per se), LAL QILLA (word and device mark) and

NEEL QILLA in relation to the goods for which they were registered,

i.e, rice. A decree of permanent injunction was also sought to restrain

the Defendants/Respondents from processing, selling or offering for

sale or dealing in rice or any other cognate or allied goods under the

trade mark HARA QILLA or the device of QILLA or any mark or

device deceptively similar to the Plaintiff‟s aforementioned registered

trade marks.

3. In this appeal the parties are referred to by their status in the suit.

Accordingly the Appellant is referred to as the Plaintiff and

Respondents 1 and 2 as the Defendants 1 and 2.

4. The case of the Plaintiff is that it is engaged in the selection,

processing and merchandising of rice since 1952. In the year 1954 the

plaintiff adopted GOLDEN QILLA (words per se) and the device of

QILLA as its trade mark so as to indicate its connection in the course

of trade with the goods of its selection, process and merchandise and

also as a proprietor thereof. In the year 1961, it adopted LAL QILLA

(words per se) and also the device of LAL QILLA as its trade mark to

indicate its connection in the course of trade with the goods of its

selection, manufacture and sale and also as a proprietor thereof.

Likewise in 1977, it adopted NEELA QILLA (words per se) and the

device of QILLA as its trade mark. According to the Plaintiff it has

used the aforementioned marks continuously and extensively in the

course of its trade from the dates of their respective adoption by it. Its

rice products have come to be identified and recognized by the

purchasing public and the trade as exclusively belonging to it. The

trade marks mentioned denote to the public and the trade that they are

the goods of the Plaintiff.

5. It is asserted that by virtue of their prior adoption, long, continuous

and established user coupled with the vast publicity given to its marks,

the Plaintiff has acquired an exclusive right to the use thereof as a

proprietor.

6. In the plaint the Plaintiff has set out the annual sales and publicity

expenses figures from the year 1970-71 till 1986-87. This has shown

a progressive increase.

7. According to the Plaintiff in addition to the common law rights, it

also held a statutory right to the exclusive use of the aforementioned

trade marks by virtue of registration granted under the Trade and

Merchandise Marks Act, 1958 as per the following details:

"Trade Mark                Registration No.   Goods      Date

Device of QILLA             180418            Rice    16-11-1960
GOLDEN QILLA 201760                           Rice    16-04-1962
(word per se)
LAL QILLA                   202329            Rice    16-01-1962
CHAAP
(word per se)

LAL QILLA                   249547            Rice    16-01-1970
(word &
Device Mark)

NEEL QILLA                  337140            Rice    16-04-1979."

8. According to the Plaintiff the Defendant No.1 Shree Wardhman

Rice & General Mills located at Panipat, Haryana is engaged in the

process and merchandise of rice and the Defendant No.2, M/s. Mamraj

Chuni Lal is the agent of Defendant No.1. According to the Plaintiff

the Defendants have adopted an identical and/or deceptively similar

mark HARA QILLA and the device of QILLA in respect of rice of

their process and merchandise. It was submitted that the adoption of

HARA QILLA and the device of QILLA by the Defendants is

malafide, dishonest, tainted and solely with a view to infringe the

aforementioned registered trade marks of the Plaintiff and to cause

confusion and deception among the users and the trade and to pass off

the goods and business of the Defendants as and for the goods and

business of the Plaintiff. It was submitted that unwary purchasers are

likely to be misled into considering the mark HARA QILLA and the

device of QILLA as one of the series of the Plaintiff‟s marks of

GOLDEN QILLA, LAL QILLA, NEELA QILLA and device of

QILLA. It is alleged that the Plaintiff was suffering loss in business as

well as in reputation because of the unlawful trade activities of the

Defendants.

9. The Plaintiff came to know in 1986 through an advertisement in the

newspaper „Vyapar Kesri‟ about the Defendants having adopted the

mark of HARA QILLA and the device of QILLA in connection with

the rice being sold by them. The Plaintiff immediately served a notice

dated 13th March, 1986 cautioning the defendants from using the said

mark and device. However, the Defendants did not raise any claim

against the averments made in the notice. The goods of the Defendants

under the impugned marks disappeared from the market. However the

Plaintiff was surprised to notice an advertisement of the Defendants‟

application under No. 435166 in the Trade Marks Journal No. 958

dated 1st May 1989 for registration of the HARA QILLA and device of

QILLA in respect of rice. The Plaintiff immediately filed an

opposition before the Registrar of Trade Marks on 8th May 1989. As

on the date of filing the suit the said opposition was pending. The

Plaintiff also learnt that the Defendants have restarted marketing the

rice under the impugned marks with impunity and therefore the suit

was filed.

10. In the aforementioned suit IA No. 622 of 1989 was filed seeking

an interim injunction restraining the Defendants from infringing the

Plaintiff‟s trade mark and not marketing the Defendant‟s goods under

the mark HARA QILLA and the device QILLA.

11. By the impugned order dated 1st March 1996, the learned Single

Judge rejected the plaintiff‟s prayer for an interim injunction. The

learned Single Judge noted that on 13th December 1993 the Assistant

Registrar of Trade Marks had sustained the opposition and rejected the

Defendant‟s application for registration of the trade mark HARA

QILLA. An application seeking review of the said order was also

rejected by an order dated 19th September 1994. The learned Single

Judge also referred to documents filed by the Plaintiff. It was noticed

that although neither party had brought on record photographs of the

respective trade marks, the photocopies of the trade marks registration

certificate were available. The learned Single Judge held that the

Defendant‟s device of QILLA was not identical or similar to the

QILLA used by the Plaintiff as its device either with GOLDEN

QILLA or QILLA. It was held that the colour scheme was not the

controversy either by way of imitation or by way of distinction. The

learned Single Judge on comparing the marks used by the Plaintiff as

well as the Defendant concluded as under:

"The device used by the plaintiff along with GOLDEN QILLA is so materially different from the device used by the defendant along with Hara Qilla that there is no likelihood of the customer inclined to

purchase Lal Qilla Rice being deceived into purchasing Hara Qilla rice. There is no visual or phonetic similarity between the defendant‟s name and mark- and the plaintiff‟s name and mark- either of the three. Golden or Golden Qilla cannot be confused with Hara Qilla. So is the case with Lal Qilla and Neela Qilla."

12. The learned Single Judge further held that "it is not suggested, nor

is it borne out from the record that the defendants have tried to present

their device of Qilla in such a manner as look similar or deceptively

similar with any of the device adopted by plaintiff. It is not the case of

the plaintiff that any of the defendants has at any time attempted at it

passing off the defendants goods as those of the plaintiff." The learned

Single Judge also rejected the plea of the Plaintiff that the continuous

use of trade names GOLDEN QILLA, LAL QILLA, NEELA QILLA

for a number of years prior to the filing of the suit shows that the

Plaintiff had developed a „family of marks‟ on the ground that merely

because a mark belonged to a „family of marks‟ it was not exempt

from the standard test of trade mark protection.

13. On behalf of the Plaintiff it was contended that the Defendants had

actually failed to indicate how they came across the words „HARA

QILLA‟ and the device of QILLA if indeed Defendant No.1 was in the

trade of marketing rice since 7th December 1978. It is pointed out that

Defendant No.1 made an application for registration of its mark and

device only in 1989. It was therefore submitted that the use of the

mark HARA QILLA and the device QILLA cannot be said to be an

honest. It is further submitted that the use cannot also be said to be

concurrent since no bills or invoices had been produced by the

Defendants to show that they were using the marks since 1978. It was

submitted that the mere fact that this appeal had been pending for over

12 years should not be a reason ground to reject the prayer of the

Plaintiff for an interim injunction since the impugned order was

constituting a precedent for others to infringe the registered marks and

device of the Plaintiff with impunity. It was contended that the

continuous infringement of the registered marks of the Plaintiff by the

Defendants was justification for persisting with the plea of interim

injunction despite the fact that the present appeal was pending for a

long time. In any event the main suit was also pending and was

unlikely to conclude at an early date. Reliance was placed on the

observations of this Court in Hindustan Pencils Private Limited v.

Universal Trading Company 2000 PTC 561 (DB). Reliance was

placed on a number of decisions which will be discussed hereafter.

14. On behalf of the Defendants it was submitted that the trade mark

HARA QILLA was not identical or deceptively similar to the trade

mark sought to be enforced by the Plaintiff. According to the

Defendants the words HARA QILLA and LAL QILLA conveyed

different and distinct identities. The word QILLA was per se of no

significance. The marks of the Plaintiff and that of the Defendant

No.1 were not deceptively similar so as to cause confusion in the mind

of the buyer. Moreover, the Plaintiff had not approached the Court

despite the defendant No. 1 using the mark since 1978 and therefore

had acquiesced in the use by the defendants of the mark and device of

HARA QILLA and QILLA. It was submitted that the mere fact that

the Registrar of Trade Marks had accepted the opposition of the

Plaintiff to the application made by the Defendants for registration of

their mark HARA QILLA could not determine the question of grant of

interim injunction. The Plaintiff was required to make out a prima

facie case in its favour on the basis of materials brought on record in

the suit. In any event the order of the Assistant Registrar of Trade

Marks was challenged in this Court in C.M. (Main) No. 165 of 1995.

It was submitted that a registered trade mark only raises a presumptive

right and it was not necessary that an injunction has to follow.

Reliance was placed upon the decisions in N.R. Dongre v. Whirlpool

Corporation AIR 1995 DELHI 300, Amritdhara Pharmacy v. Satya

Deo AIR 1963 SC 449, Mahendra & Mahendra Paper Mills Ltd. v.

Mahindra & Mahindra Ltd. JT 2001 (9) SC 525, Corn Products

Refining Company v. Shangrila Food Products Ltd. PTC (Suppl) (1)

13 (SC), F. Hoffmann-La Roche & Co. Ltd. v. Geoffrey Manners &

Co. Pvt. Ltd. PTC (Suppl) (1) 88 (SC). The Defendants relied on the

decisions in Power Control Appliances v. Sumeet Machines Pvt. Ltd

1995 PTC 165, Bali Trade Mark (No.2) Fleet Street Reporter [1978]

193 to contend that honest and concurrent user by the defendants of

the registered marks of the Plaintiff would justify the refusal of

injunction to the Plaintiff. Learned counsel for the Defendants relied

upon the observations in Power Control Appliances to contend that

the delay and laches in the Plaintiff approaching the Court for relief

could be fatal to its case for grant of injunction. It was contended that

the appropriate order for this Court was to expedite the trial of the suit

itself.

15. The submissions of the parties have been considered. It is not in

dispute that the Plaintiff has in its favour registration of the four marks

and devices as noticed hereinbefore. The suit filed by the Plaintiff is

essentially one for infringement in respect of the Plaintiff‟s trade mark

on the ground that the use by the Defendants of the mark and device

HARA QILLA and QILLA respectively would cause confusion and

deception among the users and the trade in general. The distinction

between a suit based on infringement and that based on passing off

was explained by the Supreme Court in Kaviraj Pandit Durga Dutt

Sharma v. Navaratna Pharmaceutical Laboratories AIR 1965 SC

980. It was explained that "while action for passing off is a common

law remedy being in substance an action for deceit, that is, a passing

off by a person of his own goods as those of another, that is not the

gist of an action for infringement. The action for infringement is a

statutory remedy conferred on the registered proprietor of a registered

trade mark for the vindication of the „exclusive right to the use of the

trade mark in relation to those goods.‟ The use by the Defendant of

the trade mark of the Plaintiff is not essential in an action for passing

off, but is the sine qua non in the case of an action for infringement."

It was further noticed that "where the evidence in respect of passing

off consists merely of the colourable use of a registered trade mark,

the essential features of both the actions might coincide, in an action

for infringement, the Plaintiff must, no doubt, make out that the

defendant's mark is so close either visually, phonetically or

otherwise and the Court should reach the conclusion that there is an

imitation" in which event it would be established that the Plaintiff‟s

rights are violated. The Supreme Court went on to further explain that

"if the essential features of a trade mark of the Plaintiff have been

adopted by the defendant, the fact that the get up, packing and

other writing or marks on the goods or on the packets in which he

offers his goods for sales show marked differences, or indicate

clearly a trade origin different from that of the registered

proprietor of the mark would be immaterial; whereas in the case of

passing off, the defendant may escape liability if he can show that the

added matter is sufficient to distinguish his goods from those of the

Plaintiff." (emphasis supplied)

16. In Amritdhara Pharmacy v. Satya Deo the question of phonetic

similarity between Amritdhara and Lakshmandhara was considered. It

was said that "an unwary purchaser of average intelligence and

imperfect recollection would not split the name into its component

parts and consider the etymological meaning thereof or even consider

the meaning of the composite words as „current of nectar‟ or „current

of Lakshman‟. Where the trade relates to goods largely sold to

illiterate or badly educated persons, it is no answer to say that a person

educated in the Hindi language would go by the etymological or

ideological meaning and see the difference between „current of nectar‟

and „current of Lakshman‟. It was emphasized that the whole word

had to be considered. It was held that "the overall similarity between

the two names in respect of the same description of the goods would

likely to cause confusion within the meaning of Section 10(1) of the

Trade Marks Act, 1940."

17. In the instant case as far as the registered marks in favour of the

Plaintiff are concerned, applying the test laid down in Kaviraj Pandit

it is seen that the essential feature of the mark is the word „QILLA‟.

Whether the word is spelt as QILLA or KILLA, or even written in a

different style or colour combination. To the customer who seeks to

purchase the QILLA brand rice both names would sound phonetically

similar. The customer is likely to ask the retailer: "Can I have the

QILLA brand rice?" In the considered view of this Court, it is this

essential feature of the Plaintiff‟s mark, i.e the word QILLA, which

has been adopted by the Defendant No.1. That the defendants have

also used a pictorial representation of the device in the form of a fort

also indicates that the Defendants too intended the same meaning to be

assigned to the word, which is an Urdu one meaning "fort".

Therefore, though the device QILLA is depicted in a slightly different

way by the defendant, it is deceptively similar to the device used by

the Plaintiff. Further the use is in respect of the same commodity, rice.

Therefore there is every possibility f there being a confusion created in

the mind of the purchaser of rice that the product being sold by the

Defendant is in fact a product that has emanated from or has been

manufactured by the Plaintiff.

18. It is not possible to agree with the reasoning of the learned Single

Judge that the word QILLA is not associated with rice and therefore

no ordinary purchaser of rice would associate the Defendant‟s mark as

that of the Plaintiff‟s. It is plain from the pleadings that the Plaintiff

has been using the words QILLA consistently in connection with the

rice being sold by them with only the first word indicating the colour

viz., GOLDEN, LAL or NEELA. It must be held that the Plaintiff has

been able to prima facie show that it has developed a „family of

marks‟ and that by merely changing the first word from GOLDEN,

LAL or NEELA to the word HARA there is every possibility of

confusion being caused both in trade and in the mind of any person

desiring to purchase rice. Likewise the use of the picture or depiction

of a fort in the background on the label/packing of the rice is also

likely to cause confusion in the mind of the purchaser and in the trade

that the product being sold by the Defendants are in fact those

manufactured by the Plaintiff.

19. This Court proposes to next consider the plea of the Plaintiff that

use by the Defendants of the said marks was not in fact an honest one

since the Defendant did not indicate how it came across the

word/device associated with its product rice. It must be remembered

that the Plaintiff has been in trade since 1962 onwards and it has been

marketing its rice by using the words and device of QILLA. These

words, as rightly pointed out by the learned Single Judge, do not

automatically get associated with a consumable food product like rice.

For the Defendants to have chance upon the same word i.e. QILLA

and the same device in terms of depiction of a fort would have to be

supported by its showing how it got inspired to use those words. It is

not possible therefore to accept the plea of the Defendants that in the

instant case, there was an honest concurrent use. The legal position

was succinctly explained by the House of Lords in Alex Pirie & Sons'

Application (1933) 50 R.P.C. 147 where it was held as under:

"Secondly, the appellants say, and this is their main line of attack upon the conclusion of the Court of Appeal, that though the respondents were honest in their user in the sense that they never intended to cause confusion or to pass off their goods as the goods of the appellants, yet inasmuch as they knew of the appellants‟ mark when they adopted their own and that the marks have been used on the same goods in the same market, the user of the respondents‟ mark cannot be treated as honest within the meaning of the section and that in any case by refusal of registration there would not in these circumstances be the hardship to the respondents which the section is intended to prevent.

"My lords, it has never been suggested throughout this case that the conduct of the respondents has in the slightest respect been open to criticism, and I should be sorry to place upon this statute a

construction which would brand as statutory dishonesty conduct justified in the eyes of honourable men. There is in fact no ground for doing so. Knowledge of the registration of the opponent‟s mark may be an important factor where the honesty of the user of the mark sought to be registered as impugned, but when once the honesty of the user has been established the fact of knowledge loses much of its significance, though it may be a matter not to be wholly overlooked in balancing the considerations for and against registration."

20. In the considered view of this Court, the defendants have not been

able to demonstrate prima facie honest use of the mark. They have

also not been able to show concurrent user of the mark or device. The

Plaintiff is right in pointing out that no invoices or bills since 1978

have been placed on record by the defendants to substantiate this plea.

Whatever has been placed on record does not prima facie satisfy this

requirement.

21. The next issue to be considered is whether the Plaintiff can be said

to be guilty of laches in not approaching the court earlier particularly

when the Defendants have been using the marks since 1978. In

Hindustan Pencils Private Limited v. India Stationery Products Co.

1989 PTC 61 the complainant was the registered proprietor of trade

mark „NATARAJ and the device of „NATARAJ‟ on its pencils. The

said marks have been adopted by the Plaintiff in the year 1961. In the

middle of 1985 the Plaintiff got to know that the Defendants had got

registered a copy right in respect of a label similar to that of the

Plaintiff in respect of pins. The copy right in respect of pins was

under the name „NATARAJ‟ using also the device of the dancing

Nataraj. The Court also considered the defence raised by the

Defendant in that case that the Plaintiff had acquiesced in the use by

the Defendant of the impugned mark. The Court then referred to the

observation of Court in Whitman v. Disney Productions 263 F2d 229

and held that "delay by itself is not a sufficient defence to an action of

interim injunction but inordinate delay would amount to laches." It

was further observed as under by the learned Single Judge in paras 28

and 29 of the said judgment:

"28. If an action is taken by the registered owner and no interim injunction is granted, the effect is that goods bearing the infringing mark or spurious goods would continue to be sold in the market. After a

number of years when the case is finally disposed of, after trial, and the plaintiff succeeds and gets a permanent injunction then, possibly, the plaintiff may also be compensated by his being awarded damages or an account of profits, that sense of the non-grant of the interim injunction would not ultimately, prejudice the plaintiff for he may be compensated with payment of money but during this period when the defendant is allowed to continue to infringe the intellectual property it is the consumer or the purchaser who alone suffers and who ultimately cannot be compensated. Therefore, in order to curb the menace of manufacture, production and sale of spurious goods and the blatant violation of intellectual property it will be proper for the court to take into consideration the interest of the general public. In this regard reference may usefully be made to the following observations of McCARTHY at page 346, para 30.21 which deals with the protection of third parties;

"Some courts also consider the necessity of protecting third parties trade mark infringement cases, "third parties" means the buying public. If the equities are closely balanced, the right of the public not to be deceived or confused may turn the scales in favour of a preliminary injunction."

29. It would appear to be difficult to accept that relief of temporary injunction should not be granted, because of the delay on the part of the plaintiff, even though the court feels, at that point of time, that ultimately permanent injunction will have to be granted."

22. It was further held that acquiescence cannot be inferred merely by

the reason of the fact that the Plaintiff had not taken any action earlier

against the infringement of its rights. Acquiescence had to mean

something more than mere silence on the part of the Plaintiff. The

Court did not accept the contention that the delay and acquiescence in

the said case would defeat the right of the Plaintiff to seek interim

injunction. The Court on comparison of the marks registered in the

name of the Plaintiff and that used by the Defendant came to the

conclusion that prima facie the adoption of the mark „NATARAJ‟ by

the Defendant was clearly fraudulent." The injunction was accordingly

granted to the Plaintiff.

23. In the instant case, the Plaintiff has explained the sequence of

events preceding the filing of the suit. It first noticed the infringement

in 1986 and immediately sent a legal notice. Thereafter when the

defendants applied for registration, the plaintiff immediately filed an

opposition before the statutory authority and prevented registration

being granted in favour of the defendant. This can hardly be termed as

acquiescence by the Plaintiff. Further, the suit was filed in 1989 itself,

simultaneous with the opposition being filed to the grant of

registration in favour of the defendant. Therefore there is no merit in

this contention of the defendants that the Plaintiff either acquiesced in

the defendants‟ use of the infringing mark and device or that there was

delay in the plaintiff seeking protection of its registered marks from

infringement.

24. For the aforementioned reasons this Court is of the view that the

Plaintiff has made out a prima facie case for grant of injunction. The

mere fact that the present appeal was pending for over 12 years does

not make a difference since the Plaintiff has been able to prima facie

establish that the infringement by the Defendants of the Plaintiff‟s

marks and device by marketing the defendants‟ product under the

mark HARA QILLA and the device of QILLA is a continuing one and

has the effect of harming the Plaintiff‟s reputation and eroding its

goodwill in the trade. It is clarified that the observations in this order

are prima facie and not intended to influence the opinion to be formed

by the trial court on an appreciation of the evidence led by the parties.

25. Before concluding a reference may be made to an application

being CM No. 842 of 2001 filed by the Plaintiff. In the said

application it is pointed out that against the order dated 29th December

1993 passed by the Registrar Trade Marks accepting the opposition

filed by the Plaintiff to the grant of registration in favour of the

Defendant in respect of HARA QILLA the Defendants had filed CM

(Main) No. 165 of 1995 in this Court. By an order dated 30th October

1998 the learned Single Judge dismissed the said application/appeal.

A second appeal against the said order was dismissed by the Division

Bench on 19th January 2001 and therefore the order dated 29th

December 1993 passed by the Assistant Registrar of Trade Marks had

attained finality. The said application was filed to bring on record the

aforementioned facts.

26. The appeal is allowed. The impugned order dated 1st March 1996

passed by the learned Single Judge is hereby set aside. The Defendants

are restrained during the pendency of Suit No. 2247 of 1989 from

processing, selling or offering for sale or dealing in rice or any other

cognate or allied goods under the trade mark HARA QILLA or the

device of QILLA or any mark or device deceptively similar to the

Plaintiff‟s aforementioned registered trade marks and device viz.,

device of QILLA, the words GOLDEN QILLA (word per se), LAL

QILLA CHAPP (word per se), LAL QILLA (word and device mark)

and NEEL QILLA in relation to the goods for which they were

registered, i.e, rice. While the Defendants will be restrained forthwith

as directed hereinbefore, they are granted 3 months‟ time to dispose of

the current stock of rice packed in bags using the words HARA

QILLA and device QILLA. In other words, the Defendants will

forthwith stop the words HARA QILLA and device QILLA and will

be permitted to dispose of the existing stocked of rice that has already

been packed as of date within a period of three months from today

subject of course to maintaining proper inventories and accounts

which will be filed in the trial court every three months.

27. The learned single Judge is requested to expedite the trial of the

suit and dispose it of within a period of one year from today. The trial

court record will be returned forthwith.

S.MURALIDHAR, J

CHIEF JUSTICE MAY 29, 2009 dn