Delhi High Court

M/S Wheels India vs S.Nirmal Singh & Another on 15 October, 2009

Author: Reva Khetrapal

                                       REPORTED
*     IN THE HIGH COURT OF DELHI AT NEW DELHI

%                             DATE OF RESERVE: AUGUST 25, 2009

                              DATE OF DECISION: OCTOBER 15, 2009



+        IA No.6889/2006 and IA No.7705/2006 in CS(OS) 1261/2006



      M/S. WHEELS INDIA                     ..... Plaintiff
                     Through: Mr.Mohan Vidhani, Advocate.

                     versus

      S.NIRMAL SINGH & ANR.           ..... Defendants
                    Through: Mr.Ajay Sahni, Advocate.



CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL

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



:     REVA KHETRAPAL, J.

1. By this order, it is proposed to decide IA No.6889/2006 under Order

XXXIX Rules 1 and 2 and IA No.7705/2006 under Order XXXIX Rule 4 of

the Civil Procedure Code, 1908.

2. The plaintiff's case is that the business of Wheels India was started by

Mr.Trilok Singh in April, 2001 as its sole proprietor. With effect from April,

2006, the said proprietorship firm was converted into a partnership by

induction of the wife of the plaintiff, namely, Mrs.Satpal Kaur as partner.

Since April, 2001, the plaintiff had been using the distinctive trademark

'PRINCE' and this trademark was filed for registration on 27.09.2004 under

Number 1311254 in respect of accessories for use in cars included in Class-12.

Prior to the registration, the mark was advertised in the Trademarks Journal

No.1328(S-3) dated 21.02.2005 for inviting public objection, if any. The

certificate of registration was issued on 31.10.2005, which registration is valid

and subsisting till 26.09.2014.

3. The plaintiff thus claims that the trademark 'PRINCE' has been used by

the plaintiff and its predecessor since April, 2001 openly, continuously and

extensively and that the plaintiff has conducted huge sales under the aforesaid

trademark and also spent huge amount on publicity thereof. The plaintiff has

been protecting its trademark 'PRINCE' and filed its opposition to the

registration of the aforesaid trademark by some other party from Haryana, who

sought to register the trademark 'PRINCE' for auto accessories, etc.. The said

opposition filed in January, 2006 is stated to be still pending in the Office of

the Registrar of Trademarks, New Delhi. The defendants, the plaintiff asserts,

had complete knowledge about the said trademark of the plaintiff as the

plaintiff earlier used to purchase wheel covers from the defendants, pack the

wheel covers in its own packing under the trademark 'PRINCE' and then

market the said goods. However, since the defendants had not been able to

supply the goods to the plaintiff properly as per the demand and requirement of

the plaintiff and also started charging more than the market price, the plaintiff

discontinued the business with the defendants.

4. Sometime in the fourth week of May, 2006, the plaintiff came across

wheel covers under the identical trademark 'PRINCE' which were not of the

manufacture of the plaintiff. The cartons in which the said wheel covers were

packed contained the name of the defendants. The plaintiff immediately

contacted the defendants and apprised the defendants of its rights in the

trademark 'PRINCE' and requested them not to infringe the said rights, but in

vain. The plaintiff accordingly filed the present suit with an injunction

application (IA No.6889/2006) in this Court and on 02.06.2006, this Court

passed an ex parte ad interim injunction order in favour of the plaintiff,

restraining the defendants from using the trade mark 'PRINCE'.

5. The defendants filed an application (IA No.7705/2006) under Order

XXXIX Rule 4 CPC for vacation of the said ex parte ad interim injunction

order and on 17.07.2006 this Court modified the aforesaid injunction order to

the extent that the defendant was allowed to continue using his firm name as

'PRINCE Auto Industries', but not the trademark 'PRINCE'.

6. The defendants have contested the claim of the plaintiff to the

proprietorship of the trademark 'PRINCE'. The case of the defendants is that

the defendant No.2 had adopted the trademark/trade name 'PRINCE Auto

Industries' in the year 1998, which was admittedly prior to the alleged adoption

of the trademark 'PRINCE' by the plaintiff in the year 2001. It is contended

that the emphatic and distinctive part in the trade name of the defendant No.2,

viz., 'PRINCE Auto Industries' is the word 'PRINCE' alone and the

succeeding words are purely generic and non-distinctive. The ex parte ad

interim injunction granted in favour of the plaintiff, therefore, deserves to be

vacated.

7. The learned counsel for the defendants has also vehemently urged that

in any event, the suit of the plaintiff is liable to be dismissed on account of the

fact that the plaintiff has suppressed material facts and particulars from this

Court. Thus, the plaintiff has completely suppressed in the plaint that the

plaintiff was one of the authorised stockists of the defendant No.2 since the

year 2001, and had in fact subsequently entered into written agreements dated

19.08.2002 and 20.09.2002 with the defendant No.2, in its capacity as an

authorised stockist. Being an authorised stockist of the defendants, the

plaintiff was well aware of the fact that the trademark 'PRINCE' belonged to

the defendant No.2, which the defendant No.2 had been using since the year

1998 and which forms the emphatic and primary part of the trading

style/trademark 'PRINCE Auto Industries' of the defendant No.2. The

plaintiff in fact had fraudulently registered the trademark 'PRINCE' of the

defendant No.2 in its own name shortly after the defendant No.2 ceased to

have any business dealings with the plaintiff as the plaintiff was defaulting on

payments due to the defendant No.2. In fact, the last batch of goods

manufactured by the defendant No.2 under the trademark

'PRINCE'/'PRINCE Auto Industries' was sold to the plaintiff in terms of the

agreements dated 19.08.2002 and 20.09.2002 on the 15th day of September,

2004 and the plaintiff immediately thereafter, i.e. on 27th September, 2004,

fraudulently applied for the defendant No.2's mark 'PRINCE' and behind the

back of the defendant No.2 managed to secure a registration in respect of the

same. The plaintiff firm, though has been in the business of marketing and re-

selling of wheel covers, being auto accessories, since the year 2001, but the

same has been as a stockist/distributor of the defendant No.2. This is borne

out by the fact that the plaintiff applied for registration to the Sales Tax

Authorities in the month of September, 2001 as a distributor of the defendant

No.2, which fact is endorsed on the Sales Tax Certificate of the plaintiff filed

in the present proceedings. Having executed the Stockist Agreements dated

19.08.2002 and 20.09.2002 and having acted as a stockist of the defendant

No.2 for almost three years, the plaintiff is estopped from setting up a

fraudulent title to the trademark 'PRINCE' of the defendant No.2. The

plaintiff is further estopped by virtue of the provisions of Sections 91 and 92 of

the Evidence Act from asserting that there was a manufacturing agreement

between the parties whereunder the defendant No.2 was manufacturing wheel

covers for the plaintiff. The status of the plaintiff was always that of a stockist

and further the said status was intimated to the statutory authorities by none

other than the plaintiff himself.

8. Additionally, it is urged by Mr. Ajay Sahni, the learned counsel for the

defendants that the defendants' adoption of the trademark/trade name

'PRINCE Auto Industries' was from the nick name of their son "Prince" born

on the 29th day of June, 1995, who subsequently came to be known as Jasdeep

Singh. To substantiate this assertion the original invitation card for the

'Namkaran' ceremony of their said son has been filed by the defendants. As

against this, the plaintiff, who was the stockist of the defendants, has failed to

justify as to on what basis the alleged trade name 'PRINCE' was adopted by

the plaintiff, except to trade upon the goodwill and reputation of the defendant

No.2.

9. The defendants further assert that the law does not make any distinction

between the use of a trade name/trademark as is evident from the provisions of

the Trademarks Act, 1999. In order to substantiate this contention the

defendants have filed copies of the Trademarks Journal where the trade name

of a party has also been accepted for registration as a trademark by the office

of the Registrar of Trademarks. For example, the trademark/name "Mahendra

Brothers" for M/s. Mahendra Brothers, "Ketan Brothers Exports" for M/s.

Ketan Brothers Exports, "Seiko Lex Bangles" for Seikolex Bangles, "Jutee

Handicrafts" for Jutee Handicrafts, "Ratna House" for Ratna House,

"BANSAL" for Bansal Silver Ornaments, "Home Television Network

Limited" for Home Television Network Limited, "Lohan's Commerce Classes"

for Lohans's Commerce Classes, "Lohana's Test Series" for Lohana's Test

Series.

10. Mr. Mohan Vidhani, the learned counsel for the plaintiff, on the other

hand, contended that the defendants have never used any trademark on its

goods or packing and thus there was no question of prior use by the

defendants. The defendants had been trading under the name and style of

'PRINCE Auto Industries' and this Court had, therefore, modified the ex parte

ad interim injunction order on 17.07.2006 permitting the defendants to

continue using 'PRINCE Auto Industries'. The defendants were trying to

make a mountain out of a mole hill by unduly emphasizing that the plaintiff

had not come to the Court with clean hands for the mere omission of the

plaintiff to use the word 'stockist' in the plaint, though the plaintiff had

sufficiently disclosed in the plaint about the dealings between the parties and

had mentioned about the plaintiff's purchasing goods from the defendants. The

learned counsel further submitted that the Stockist Agreements were for the

purpose of taking benefit of the provisions of Sub-Rule XXXIV A of Rule 11

of Delhi Sales Tax Rules 1975 to be an extended first point dealer. However,

no such benefit was taken and the plaintiff in fact had paid the sales tax on the

purchases. Besides, it is contended, there is no mention of any trademark in

the said agreements as the defendants did not have any trademark nor any

material has been produced on record to show that the defendants were using

the trademark 'PRINCE'. No packing had been filed by the defendants, even

though it had been specifically stated in the written statement that the carton in

which the defendant No.2 was supplying the goods to the plaintiff at the time

when the plaintiff was a stockist/dealer of the defendant No.2 was being

placed on record. Further, it is submitted that the user of the plaintiff with

respect to the trademark is since April, 2001, while the first agreement is dated

19th August, 2002, which is subsequent to the user of the plaintiff. Thus, the

plaintiff was already using the trademark 'PRINCE' prior to the date of the

agreements.

11. Rebutting the contentions of the defendants' counsel, it is contended by

the plaintiff's counsel that it is not open to the defendants to place reliance on

the provisions of Section 92 of the Evidence Act to contend that, when there

was admittedly no written agreement of manufacture between the plaintiff and

the defendants, the verbal assertion being made by the plaintiff,which is on the

face of the record contrary to the written agreements appointing the defendants

as authorised stockist, is not permissible.

12. It is also submitted by the learned counsel for the plaintiff that the

alleged invitation card of 'Namkaran' had been prepared now for the purpose

of the present suit. There was also no force in the claim of the defendants that

no one else could use 'PRINCE' as a trademark as the defendants had not filed

any opposition to the registration of the trademark 'PRINCE' in favour of the

plaintiff before the Registrar Trade Marks. Further, no cancellation petition or

counter claim had been filed by the defendants nor the defendants had cared to

file any application under Section 124(5) of the Trademarks Act for stay of the

instant suit to facilitate the defendants in filing cancellation petition. The

plaintiff, on the other hand, had filed two affidavits, one being the affidavit of

Mr. Trilok Singh, one of the partners of the plaintiff firm and the other being

an affidavit of a third party to substantiate its case that the wheel covers which

were purchased from the defendant No.2 firm by the plaintiff did not have any

trade name/trademark or firm name embossed on the back of the wheel covers,

though however, there used to be a sticker pasted on the front of the wheel

covers reading 'PRINCE' and the packing of the said wheel covers used to

show the name of M/S. WHEELS INDIA.

13. Reliance is placed by the learned counsel for the plaintiff on the

following judgments of this Court and of the Hon'ble Supreme Court to

contend that temporary injunction must be granted when there is a clear

infringement of the plaintiff's registered trademark and its right to its exclusive

use is violated, viz., Metro Playing Cards vs. Wazir Chand AIR 1972 Delhi

248, Kedar Nath vs. Monga Perfumery and Flour Mills AIR 1974 Delhi 12

(V 61 C 2), M/s. Avis International Ltd. vs. M/s. Avi Footwear Industries and

Anr. AIR 1991 Delhi 22, Ruston and Hornby Ltd. vs. Zamindara

Engineering Co. AIR 1970 SC 1649, Midas Hygiene Industries P. Ltd. &

Anr. vs. Sudhir Bhatia & Ors. 2004 (28) PTC 121 (SC), Shri Swaran Singh

Trading as Appliances Emporium vs. M/s. Usha Industries (India) New

Delhi and Anr. AIR 1986 Delhi 343

14. Reference was also made by the learned counsel for the plaintiff to the

provisions of Sections 28 and 29 of the Trademarks Act, 1999 as also to the

provisions of Section 31 of the said Act to contend that the registration of a

trademark shall be prima facie evidence of its validity and shall bestow upon

the registered proprietor thereof the exclusive right to its user in relation to the

goods or services in respect of which the trademark is registered.

15. The question which arises is whether the defendant No.2, who was

admittedly using the business name 'PRINCE Auto Industries' from the year

1998, prior to the alleged adoption of the trademark 'PRINCE' by the plaintiff

in the year 2001 can be divested of its right to use the trade name 'PRINCE'

despite the fact that in public perception there is a close relationship and nexus

between the said trademark and the name 'PRINCE Auto Industries'.

16. In the above context, in my view, it also needs to be examined as to

whether the plaintiff's deliberate suppression of the execution of the Stockist

Agreements dated 19th August, 2002 and 20th September, 2002 between the

plaintiff and the defendant No.2 at the time of the grant of the ex parte ad

interim injunction against the defendants amounts to material suppression of

facts and whether on this ground alone the ex parte ad interim injunction

granted by this Court is liable to be vacated.

17. There is no manner of doubt that the plaintiff has completely suppressed

in the plaint that vide written agreements dated 19th August, 2002 and 20th

September, 2002 (filed by the defendant No.2 along with written statement),

the plaintiff had agreed to be the authorised stockist of the defendants and the

said agreements were executed on the letter-head of the defendants, which

clearly mentioned the name/mark 'PRINCE Auto Industries'. The agreement

dated 19th August, 2002, being apposite, is reproduced hereunder:-

"PRINCE AUTO INDUSTRIES Mfgr. & Job Work of:

                       AUTOMOBILE ACCESSORIES
            WZ-III B 111, VISHNU GARDEN, NEW DELHI-110018

          Ref. No.PAI/2002-2003/07                 Dated 19/8/2002

          M/S WHEELS INDIA
          WZ-34/65, VISHNU GARDEN,
          NEW DELHI - 110018.

          SUB: AGREEMENT FOR                  APPOINTMENT            AS
          AUTHORISED STOCKIST

          Sir,

This agreement for your appointment as Authorised Stockist for our Standard Products is on the following agreed terms.

1. PRODUCTS Your order may be placed for our standard products viz. Auto Parts and their Accessories, as described in our catalogues. We shall have the right to add or delete any items at our sole discretion.

2. PRICES & DISCOUNTS The list price circulated to you are the maximum prices at which you are allowed to sell. You are however at liberty to sell at prices lower than the list price.

3. TERMS OF PAYMENT

a) You shall made full payments to us for the products including Sales Tax, Excise duties (if any), Packing, Forwarding and Freight charges and any other charges, taxes or levies against delivery.

b) In the event of default of stipulated period of payment, we shall be entitled to withhold supplies.

4. DELIVERY

a) Order once placed by you and confirmed by us cannot normally be altered or cancelled. You will have to take delivery when the goods are dispatched or are ready for delivery. In the event of your failure to accept delivery, you will have to pay storage charges, interest, transportation charges and out of pocket expenses.

b) Delivery period indicated by us are made in good faith but are without any commitment and no claim for any direct or indirect damages incurred by you shall be entertained by us.

5. REPRESENTATION

a) Transaction between you and us will be on principal to principal basis in the course of whole sale trade or buyer and seller.

b) You will not describe yourselves as our agent and you shall have no right or authority to made any commitment on our behalf or bind us in any respect for any purpose, whatsoever.

c) Your appointment is not exclusive for any area and we are free to execute orders from clients anywhere. However in good business interest, we shall endeavour to inform customers in and around area of your place of business that you are operating at that area.

d) This appointment is in your favour only and you will have no right, whatsoever, to transfer, or assign the same to any other party.

6. VALIDITY This agreement is valid from 19/8/2002 to 18/8/2003. This agreement shall be renewed by mutual consent on completion of this period.

7. TERMINATION Notwithstanding anything stated above we shall have the right to terminate this agreement forthwith in cases:-

            a)     You commit any breach of this agreement.


                   b)     If, in our opinion, you indulge in unhealthy

business practice e.g., selling at higher prices, selling imitations/counterfeit products, etc.

c) This agreement can be terminated by giving 60 days notice by either side.

8. JURISDICTION Courts in Delhi shall have jurisdiction in respect of any dispute arising between you and us directly or indirectly.

Yours faithfully, for PRINCE AUTO INDUSTRIES Jasbir Kaur PROP.

The above terms and conditions are accepted by us for our appointment as authorised stockist.

Sd/-

(STOCKIST) For WHEELS INDIA (PROPRIETOR)"

The subsequent agreement, i.e. agreement dated 20th September, 2002,

entered into between the parties valid from 19th August, 2002 to 18th August,

2005 appointing the plaintiff as authorised stockist is on the same lines. Both

these agreements have not been filed by the plaintiff or even referred to in the

pleadings.

18. The plaintiff, therefore, has disentitled itself to the equitable relief of

injunction on account of deliberate suppression of material facts in the plaint as

well as suppression of documentary evidence from the scrutiny of this Court.

Concealment of material facts or documents deserves to be seriously viewed,

for one who comes to the Court owes a duty to the Court to disclose all facts

and documents to the Court. The contention of the plaintiff in the instant case

that it had disclosed in the plaint that it was purchasing goods from the

defendants is neither here nor there. The plaintiff deliberately and

intentionally, in my view, hid from the Court the fact that the defendant No.2,

M/s. PRINCE Auto Industries had been dealing with the same goods, viz.

wheel covers and auto accessories and had made a mark in its field of activity

well before the plaintiff got registered the trademark 'PRINCE'. The plaintiff

also hid from the Court the exact relationship between the plaintiff and the

defendants and that there were written agreements to ensure the smooth

working of the said relationship duly executed by the parties and registered

with the statutory authorities. The reason for suppression of such material

facts is clearly discernible. Had the plaintiff stated in the plaint that the

defendant No.2 had been in the same field of activity from the year 1998 under

the trade name 'PRINCE Automobile Industries' and had the plaintiff further

stated in the plaint that it had been working as the authorised stockist of the

plaintiff from the year 2001 to the 15th of September, 2004, the plaintiff, in my

view, may not have succeeded in obtaining an ex parte ad interim injunction

from this Court, which is enuring to the benefit of the plaintiff till date, though

with some modification.

19. In ANZ Grindlays Bank Plc. vs. The Commissioner, MCD & Ors.,

1995 (34) DRJ 492, while considering the question of conduct of the parties in

injunction applications, the Delhi High Court laid down twin tests on the anvil

of which Courts must determine whether to throw out an application for

interim injunction on the ground of untrue or misleading statements or

suppression of material facts. Paragraph 87 of the judgment, which is apposite

and which lays down the principles to be followed, reads as under:-

"87. When a party approaches the court seeking relief of interim injunction more so when the relief sought for is projected as urgent and is accompanied by a prayer for an ex parte relief the Court places implicit reliance on the plaintiff. They are the facts set out by the plaintiff in its pleadings and the documents filed which enable the court forming an opinion whether to exercise or not to exercise jurisdiction in the matter of issuing ad interim injunction (behind the back of the opposite party who is yet to be noticed). The court while reposing confidence in the plaintiff naturally expects him to make a clean breast of all the material and relevant facts which would enable the court forming a correct opinion and exercising judicial discretion at that stage. Mis-statement by itself would be enough to throw out the application. If it be a concealment, the court would ask

(i) whether it was a relevant fact (it being immaterial whether it would have enabled or disabled the plaintiff in securing the relief); and

(ii) whether the plaintiff was in the knowledge of or could have been in the knowledge of such fact. If both the answers be in the affirmative, the plaintiff would be held disentitled. The court would not then enter into the merits of the

case. The court would simply tell the plaintiff - "Your conduct has been unbecoming of the confidence impliedly reposed by the court in you and so you must be shown out of the court." The plaintiff may then either withdraw the application, may be subject to terms, or suffer a dismissal."

20. Applying the above two tests to the instant case, it cannot be said as

regards the first test that what the plaintiff failed to disclose was not a relevant

fact. As regards the second test, viz., whether the plaintiff was in the

knowledge of or could have been in the knowledge of such fact, the plaintiff

itself has not denied (as indeed it could not have) that it was in the knowledge

of the Stockist Agreements. The conduct of the plaintiff must, therefore, be

said to be unbecoming of the confidence impliedly imposed by the Court in it.

Whether or not the plaintiff should be "shown out of the Court" is, however,

a matter to which I shall presently advert, but before doing so it is proposed to

refer to the judgment of the Supreme Court in S.P. Chengalvaraya Naidu vs.

Jagananath AIR 1994 SC 853.

21. In the above case, the Supreme Court, while holding that a litigant, who

approaches the Court, is bound to produce all the documents executed by him

which are relevant to the litigation and if he withholds a vital document in

order to gain advantage over the other side then he would be guilty of playing

fraud on the Court as well as on the opposite party, observed:-

"The courts of law are meant for imparting justice between the parties. One who comes to the court, must come with clean hands. It can be said without hesitation that a person whose case is based on falsehood has no right to approach the Court. He can be summarily thrown out at any stage of the litigation. A litigant, who approaches the court, is bound to produce all the documents executed by him which are relevant to the litigation. If he withholds a vital document in order to gain advantage over the other side then he would be guilty of playing fraud on the Court as well as on the opposite party."

22. To the same effect are the judgments in Morgan Stanley Mutual Fund

vs. Kartick Dass 1994 (4) SCC 225, The King vs. The General

Commissioners for the purposes of the Income Tax Act for the District of

Kensington 1917 (1) KB 486, Basheshar Nath vs. Moga Municipality AIR

1940 Lahore 69, Seemax Construction (P) Ltd. vs. State Bank of India AIR

1992 Delhi 197, Anand Saroop vs. M.C.D. 36 (1988) DLT 304, Udey Chand

vs. Shanker Lal AIR 1978 (2) SCC 209, Chiranji Lal vs. Financial

Commissioner, Haryana AIR 1978 P&H 326, Warner Bros. Entertainment

Inc. and Anr. vs. Harinder Kohli and Ors. 155 (2008) DLT 56, Om Prakash

Gupta vs. Parveen Kumar and Anr. 86 (2000) DLT 181, Micolube India Ltd.

vs. Maggon Auto Centre and Anr. 150 (2008) DLT 458.

23. On merits also, from the aforesaid two stockists agreements, it is, in my

view, at once apparent that the plaintiff was during the relevant period the

authorised stockist of the products of the defendant No.2 and its claim to be the

user of the trademark 'PRINCE' is without substance. The said fact is further

fortified from the Certificate of Registration of the plaintiff with the Sales Tax

Authorities placed on record by the defendant No.2, which clearly records the

details about the aforementioned agreements between the parties before the

said statutory authority. Additionally, the defendant No.2 has placed on record

sample bills of sales made to the plaintiff from the month of November, 2001

onwards. On the other hand, the plaintiff has failed to file any documentary

evidence in support of its averment that the defendant No.2 was ever

manufacturing the goods on behalf of the plaintiff under the mark 'PRINCE'.

Even otherwise, in my view, it is inconceivable that the defendant No.2

functioning as 'PRINCE Auto Industries' after having appointed the plaintiff

as a stockist would thereafter agree to manufacture goods on behalf of the

plaintiff under a verbal agreement, whose terms were clearly contrary to the

aforementioned written agreement and thereby dilute its own name/mark

'PRINCE Auto Industries'. The said contention of the plaintiff as submitted

by the defendants' counsel is squarely hit by the provisions of Sections 91 and

92 of the Evidence Act.

24. Further, the defendant No.2 has placed on record sample copies of its

bills of sales (about 70 in number) bearing the mark/name 'PRINCE Auto

Industries' to third parties from the month of April, 1999 onwards, thereby

establishing prior user and adoption of the name/mark. Apart from this, as

noticed above, the defendant No.2 has also filed on record copies of its Sales

Tax Registration Certificate and Sales Tax Quarterly Returns which establish

beyond any reasonable doubt that the defendant No.2 was the prior adopter

and user of the mark/name 'PRINCE' in respect of auto parts and accessories.

The plaintiff, on the other hand, has even failed to place on record any bill or

document to establish that it (the plaintiff) was packaging the goods which

were purchased by it from the defendant No.2. Permission from the Sales Tax

Authorities to affix clamps, trademark tikki, wire fittings, packaging tapes,

cartons and packing boxes for the sale of its goods ought to have been placed

on record by the plaintiff, as the plaintiff before the office of the Trademarks

Registry claimed itself to be a manufacturer, but such evidence is significantly

missing on the record. Even the few bills placed on record by the plaintiff to

bear out the contention of the plaintiff that the plaintiff was using the

trademark 'PRINCE' from the year 2001 are of no assistance to the plaintiff,

as the only bills which mention the mark 'PRINCE' (four in number) are

subsequent to the year 2005, being dated 6th February, 2006, 14th September,

2005, 17th May, 2005 and 23rd April, 2005. Not only this, the plaintiff has not

placed on record the product it claims to manufacture. In the circumstances of

the case, in my view, it was incumbent upon the plaintiff to have placed on

record both the product which it was purchasing from the defendants and the

product which it claims to be manufacturing. All that has been filed by the

plaintiff is a card-board (gatta) to show the following:-

Prince W HEELS INDIA

25. Likewise, the packing of the defendant No.2's product in the shape of a

card-board (gatta) which has been placed on record by the plaintiff as

infringing material is as under:-

PRINCE Let's Beautify your Car

WHEEL COVERS

The aforesaid material, in my view, in no manner furthers the case of

the plaintiff with regard to the user of the trademark in question by the plaintiff

and its infringement by the defendants.

26. It is also pertinent to note that the sale figures of the defendant No.2

were nearly four times the sale figures of the plaintiff. The fact that the sale

figures of the defendant No.2 were substantially higher than those claimed by

the plaintiff also clearly establishes the mark made by the defendant No.2 in

the market pertaining to auto parts and accessories, from which an inference

may be drawn that the defendant No.2 was well established in the market

under the trade name of "PRINCE Auto Industries" when the plaintiff was

still at the teething stage. The same are as under:

Sales figures of the plaintiff as set out in Annexure "A" to the plaint

M/S. WHEELS INDIA YEAR WISE SALES FIGURES

Years Sales

2001-2002 2,44,260.00

2002-2003 11,60,374.00

2003-2004 5,18,927.00

2004-2005 3,51,917.00

2005-2006 6,21,605.00

Sales figures of the defendants as set out in the written statement

M/S. PRINCE AUTO INDUSTRIES YEAR WISE SALES FIGURES

YEAR SALES

1998-99 4,51,425.00

1999-00 7,72,780.00

2000-01 5,84,250.00

2001-02 6,47,100.00

2002-03 14,68,420.00

2003-04 13,82,465.00

2004-05 13,76,385.00

27. Then again, it is the plea of the defendant No.2 that the trading style of

the defendant No.2, viz., 'PRINCE Auto Industries' is derived from the name

of the son of the defendant No.1, namely, Prince @ Jasdeep Singh. The

plaintiff, on the other hand, apparently adopted the trademark 'PRINCE' on

account of its Stockist Agreement with the defendant No.2 and cannot,

therefore, be now allowed to steal a march over the defendant No.2.

28. Kerly in the Law of Trademarks and Trade Names (11th edition) at

paragraph 1685, page 386 states as under:-

"A new company with a title of which the name 'A' for instance forms part, has none of the natural rights that an individual born with the name of A would have."

29. It is also well settled that the name under which a business trades, i.e.,

the trade name or trading style cannot easily be distinguished from the trade

name. It is equally well established that no person/entity is entitled to carry on

its business in such a way as to represent that it is the business of another. So

close is the connection between the trading name and trading style of a

vendible article that the two in public mind are invariably associated and it is

not impossible to imagine a situation where a person purchasing wheel covers

under the trademark 'PRINCE' naturally assumes that the same are the

manufacture of 'PRINCE Auto Industries Ltd.'

30. Then again, though, in my opinion, there can be no two views that the

aim of Sections 28 and 29 of the Act is to vest the registered owner of the

trademark with the exclusive right to the user thereof and to prevent its

infringement by a person or persons who have no interests in respect thereof, it

cannot be lost sight of that the provisions of Section 34 of the Act provide for

saving of vested rights in a registered trademark. The said Section which has

been strongly pressed into service in the instant case by the learned counsel for

the defendants is reproduced as under:-

"34. Saving for vested rights.- Nothing in this Act shall entitle the proprietor or a registered user of registered trade mark to interfere with or restrain the use by any person of a trade mark identical with or nearly resembling it in relation to goods or services in relation to which that person or a predecessor in title of his has continuously used that trade mark from a date prior-

(a) to the use of the first-mentioned trade mark in relation to those goods or services be the proprietor or a predecessor in title of his; or

(b) to the date of registration of the first-mentioned trade mark in respect of those goods or services in the name of the proprietor of a predecessor in title of his;

whichever is the earlier, and the Registrar shall not refuse (on such use being proved), to register the second

mentioned trade mark by reason only of the registration of the first-mentioned trade mark."

31. It also deserves to be mentioned that the definition of "mark"

encompasses within its folds a "name". Section 2(1)(m) is as under:-

"2(1)(m) "mark" includes a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereof."

32. In Ellora Industries, Delhi vs. Banarsi Dass and Ors., Delhi 1981

PTC 46, the allegation made in the suit was that the use of the trademark

"Ellora" as the key portion of the trading style "Ellora Industries" was an

infringement of the registered trademark "Ellora" which was the exclusive

property of the plaintiff and that the use of the trademark as a trading style was

deliberately and fraudulently chosen by the defendants to 'cash in' on the

reputation of the plaintiff and usurp the efforts of its self-abnogating toil. This

Court on examining the matter held that a mark is infringed by another trader

if, even without using the whole of it upon or in connection with his goods, he

uses one or more of its essential features. It was held that the defendants had

caused a part of the plaintiffs' reputation to be filched, that the plaintiffs'

trademark "Ellora" was the core or the essential part of the defendants' trading

style "Ellora Industries" and that it was bound to create confusion as to the

source in the mind of the purchasing public. It was observed that many and

insidious are the ways of infringement, sometimes subtle and sometimes a little

more direct, but the tendency of the law has always been in the direction of

enforcing commercial morality in trade. No person has the right to represent

their business as the business of another, to reap without sowing, to mislead as

to the trade source of a product and to fill its own coffers deceptively by

creating confusion.

33. In B.K. Engineering Co. vs. Ubhi Enterprises (Regd.) & Anr. 1985 (5)

PTC 1 (DEL) (DB), the plaintiff 'B.K. Engineering Company' adopted

"B.K." as their house mark. The defendants, who entered the same

manufacturing line, i.e. of marketing cycle bells, subsequently adopted the

mark "B.K.-81" asserting that the plaintiff's trademark was 'Crown and Venus'

and not "B.K." There was some debate as to whether the plaintiffs were

manufacturing bells under the mark "B.K.". This Court in the facts and

circumstances of the case held that the question whether the plaintiffs

manufacture cycle bells under the trademark "B.K." is not a pertinent

question, the really pertinent question is whether the name "B.K." adopted by

the defendants as the trademark of their product is likely to mislead the

purchasing public into thinking that it is a product of 'B.K. Engineering Co.'.

It seemed to the Court that the public or the section of the cycle using public

was likely to be deceived and confused. It was accordingly held:-

"That the plaintiffs are not manufacturing bells under the trademark "B.K." is neither here nor there. The central question is whether there is misappropriation of a name or not.

29. Both firms are engaged in "common field of activity". There is a real possibility that the public to which the defendants address their wares would draw the association with the plaintiffs of which they complain. ..................................................................... .....................................................................

40. The mischief in this case is that the defendants have taken their rival trader's name and made it their trade mark. B.K. It is the striking and significant feature of the plaintiff's name. This trade name and reputation the defendants have appropriated to their use........................................................"

34. In the instant case, the gist of the defence taken by the defendants is that

their trade name and their house mark are being invaded, a key portion of their

trading style has been pilfered and false representation is thereby made to the

purchasing public as to the origin of the goods. The question which arises is:

Assuming for the sake of argument that the defendant No.2 M/s. PRINCE

Auto Industries at no point of time used the trademark or trade name

'PRINCE', was it open to a rival trader to start selling his wheel covers under

the trade name 'PRINCE' so as to mislead the purchasing public into believing

that his goods are the goods of the defendant.

35. In Parker-Knoll Ltd. vs. Knoll International Ltd. (1962) RPC 265,

Lord Devlin answered a somewhat similar question by holding that even if a

man uses his own name so as to divert business of another trader, he must be

restrained from doing so. In the said case, a man named William John Pears

set up a soap business and called his soap "Pears Soap". The Court held that

he was not entitled to abbreviate his name so as to lead to deception.

36. Another interesting illustration given in B.K. Engineering Co. (supra)

by a Division Bench of this Court was of 'Hamam' soap as follows. If on the

cake it is stamped "A Tata Product", is it open to a rival trader to call his soap

"Tata Soap" simply because Tatas do not make "Tata soap" as such by name.

37. In Short's Ld. vs. Short, the defendant whose name was Ernest Louis

Short had acquired the lease of certain licensed premises and had there

exhibited his name as "Short's", and he had also so described his house and

goods in various advertisements and on the labels of the wine bottles. The

plaintiffs, who were the proprietors of a wine and spirit business in London,

which had for a very long time been known as "Short's", and who also were

the owners of a registered trademark consisting of that name, brought an action

against the defendant for an injunction to restrain infringement of their

trademark and passing off. On the aforesaid facts, an injunction was granted in

favour of the plaintiffs and against the defendant Ernest Louis Short

perpetually restraining him from carrying on the business of a wine and spirit

merchant under the name "Short's".

38. It is no doubt true that the plaintiff is the registered proprietor of the

trademark 'PRINCE' and the defendants have taken no steps to file either an

opposition petition or a cancellation petition. However, this by itself, in my

view, is not sufficient to denude the defendant No.2 of its right to use

'PRINCE' as its trademark, the defendant No.2 being prima facie a prior user

thereof.

39. A Division Bench of this Court in the case of Goramal Hari Ram vs.

Bharat Soap & Oil Industries reported in 23 (1983) DLT 401 laid down the

guidelines to be followed for the grant of interim injunction:-

"7. It is difficult to draw a line between cases in which the interim injunction has to be issued and those in which it has to be refused. If it is granted as a matter of course, then the defendant will immediately stop trading in the article in question and the stay will become infructuous. If that happens, the plaintiff would have achieved his purpose without a trial. It can only be allowed to happen if the plaintiff has such a strong case that it is almost impossible to refute. We have not been shown any such material on record ....................................................................."

40. However, in Snell's Equity (29th Edition 1990, page 660), the learned

author observed:-

"Interlocutory Injunctions.

................................................................................................ Over the years a rule was evolved that the plaintiff would be granted an interlocutory order only if, on the material before the court, he could show a strong prima facie case that he was entitled to the right which he claimed and also that his allegation that this right had been infringed was reasonably capable of succeeding. In time this test was rejected on the ground that the remedy of an interlocutory

injunction must be kept flexible and discretionary and that the case must be considered as a whole on the basis of fairness, justice and common sense but subject to this the plaintiff would fail if he could not establish a prima facie case."

41. In Dalpat Kumar vs. Prahlad Singh AIR 1993 SC 276, the Supreme

Court emphasised:-

"The phrases "prima facie case", "balance of convenience" and "irreparable loss" are not rhetoric phrases for incantation, but words of width and elasticity, to meet myriad situations presented by man's ingenuity in given facts and circumstances, but always is hedged with sound exercise of judicial discretion to meet the ends of justice."

42. Taking an overall view of the facts of the instant case, in my opinion,

the continuance of an ad interim injunction granted in favour of the plaintiff ex

parte and without disclosure of full facts is not warranted and the ends of

justice will be met if pending disposal of the suit, the interim orders are

vacated with a direction to the defendant No.2 to maintain accounts of profits

earned by it and to file the same in this Court on a quarterly basis. It is,

therefore, ordered that the defendant No.2 shall maintain regular accounts of its

sales under the trademark 'PRINCE' and pending disposal of the suit shall file

the same every three months. It shall also publish public notices in 'Hindustan

Times', 'The Hindu' and 'The Pioneer' within six weeks informing prospective

buyers of the relevant goods that the goods marketed by it under the trademark

'PRINCE' have no connection with the goods marketed by the plaintiff under