Mother Dairy Fruits & Vegetables ... vs M/S. Maa Baisnavi Enterprises And ...
2010 Latest Caselaw 3933 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI
                                                 Pronounced on : 25.08.2010
+                         CS(OS) 41/2009

       MOTHER DAIRY FRUITS & VEGETABLES PVT. LTD. & ANR                            ..... Plaintiffs

                      Through : Sh. Pravin Anand with Sh. Varun Menon, Advocates.
                              Versus
       M/S. MAA BAISNAVI ENTERPRISES AND OTHERS                                 ..... Defendants

                      Through : Sh. I.K. Nayar, Advocate, for Defendant Nos. 1 and 2.
                      Sh. Paddy, Advocate, for Defendant Nos. 3 and 4.
       CORAM:
       HON'BLE MR. JUSTICE S. RAVINDRA BHAT

1.

     Whether the Reporters of local papers         Yes.
       may be allowed to see the judgment?

2.     To be referred to Reporter or not?            Yes.

3.     Whether the judgment should be                Yes.
       reported in the Digest?

MR. JUSTICE S.RAVINDRA BHAT, J (OPEN COURT)

%

I.A. Nos. 280/2009 (Under Order 39 Rule 1 and 2), 8864/2009 (Under Order 39 Rule 4) & 8865/2009 (Under Section 10 r/w Section 151 CPC)

1. This common order will dispose of three applications, being I.A. Nos. 280/2009 (by the plaintiffs, seeking ad interim injunction); 8864/2009 (by Defendant Nos. 3 and 4, hereafter called "the Federation") and 8865/2009 (filed by the same applicant i.e. Federation, under Section 151 of the Civil Procedure Code (hereafter referred to as "CPC"), for stay of the present proceedings.

2. The plaintiffs file this suit, seeking permanent injunction to restrain the defendants from using the trademark "MOTHER DAIRY", which they contend, was adopted in 1974 and used continuously thereafter. The plaintiffs mention about the Federation being previously permitted to use the trademark for the period 1978 to 1996 when they (the plaintiffs) were involved in managing the business in West Bengal jointly with the Federation. The plaintiffs also rely upon an agreement entered into with the Federation on 20.09.2004 whereby the latter was permitted to

I.A. Nos. 280/2009, 8864/2009 & 8865/2009 in CS (OS) 41/2009 Page 1 use "MOTHER DAIRY" only for liquid pasteurized processed milk with territorial restriction of use in the State of West Bengal. A copy of the said agreement has been placed on record. The plaintiffs contend that despite the knowledge of these facts, the Federation violated the terms of the agreement by which permissive use of the trademark was allowed by marketing its products in Jharkhand through the first two defendants.

3. After considering the pleadings and the averments, this Court had by ex-parte order dated 12.01.2009, injuncted the defendants from using the mark or name "MOTHER DAIRY" in respect of pasteurized milk or any other type of milk or milk products in any State other than West Bengal; that order subsists till date.

4. The Federation and its distributor, i.e. the first two defendants entered appearance and have contested the suit. In the written statement as well as in the application seeking variation/vacation of the temporary injunction, it is contended that the Federation has filed a separate proceeding, being CS (OS) 57/2009 before the Calcutta High Court whereby decree for declaration that the territorial restriction placed upon the plaintiff there (i.e. the Federation there) was done so under misrepresentation and mistake. It is contended that the defendants are legitimately using the mark "MOTHER DAIRY" which has a strong descriptive or generic content in relation to milk products.

5. The Federation further argues that the plaintiffs cannot claim exclusivity in relation to the mark as it was aware right through about its use in West Bengal by it (the Federation) right from 1974. It is particularly contended that although the parties had an agreement for the period 1978- 1996, the materials do suggest that for the period 1996 onwards till the agreement of 20.09.2004 was arrived at, there was no consent as is being argued by the plaintiffs. It was submitted that the use of the mark "MOTHER DAIRY" was all the while with the plaintiffs' full knowledge and implicit consent which disentitles them to injunction.

6. The Federation further argues that the plaintiffs' pre-dominant market is in Delhi and its vicinity and further that no sales in the rest of the country, particularly in the Eastern part of India. It is argued that the generic nature of the plaintiffs' mark was noted in a decision of this Court, [i.e. Mother Dairy Fruits and Vegetables Pvt. Ltd. v. Gujarat Cooperative Milk Marketing Federation (I.A. No. 1329/2005 in CS (OS) 217/2005) decided on 27.04.2006].

7. Learned counsel for the defendants urge that having regard to the facts and materials placed on the record, it would be just and expedient that the proceedings in the present suit are

I.A. Nos. 280/2009, 8864/2009 & 8865/2009 in CS (OS) 41/2009 Page 2 stayed till the decision is rendered by the Kolkata High Court in CS (OS) 57/2009. Learned counsel submitted that even though the application seeks stay of the present suit, it is really one under Section 151 CPC, and relies upon the decisions reported as Manohar Lal Chopra v. Rai Bhadur Rao Raja Seth Hiralal AIR 1962 SC 527; Bhagatram Goel v. Gupta Cables Pvt. Ltd. AIR 1977 Cal. 451 and Banshidhar Naik & Ors. v. Laxmi Prasad Patnaik AIR 1966 Or. 53.

8. Before proceeding with the analysis of rival contentions, it would be necessary to notice the material terms of the agreement arrived at between the second plaintiff and the Federation on 20.09.2004; they are as follows:

"XXXXXX XXXXXX XXXXXX WHEREAS NDDB has conceived the trademark "MOTHER DAIRY" and has been using the same in connection with the sale of milk and milk products since the year 1974, and whereas Mother Dairy Calcutta is using the trademark "Mother Dairy" since the year 1978 as detailed below.

AND WHEREAS, at the request of the Government of West Bengal, the NDDB took over the management of the Mother Dairy Calcutta, owned by the Government of West Bengal, in 1978 and managed it till 1996 when its management was handed over to Federation, which is currently managing it.

WHEREAS at the time of take over the management of Mother Dairy Calcutta in 1978, NDDB was already running Mother Dairy, Delhi and marketing milk and milk products under its trademark, "MOTHER DAIRY". NDDB, therefore started the marketing of milk from Mother Dairy Calcutta also under its trademark "MOTHER DAIRY.

WHEREAS at the time of handing over the management of Mother Dairy Calcutta to the Federation in 1996, the Federation continued to use the trademark "MOTHER DAIRY" for sale of milk and milk products.

NOW, THEREFORE, THE PARTIES AGREE TO THE FOLLOWING:

1. The Federation will continue to use the trade mark "Mother Dairy" for liquid pasteurized milk processed and marketed by Mother Dairy Calcutta in the state of West Bengal. NDDB or any of its Subsidiaries will not use the trade mark "Mother Dairy" for sale of liquid pasteurized milk in West Bengal. The Federation will have absolute authority in use of trademark "Mother Dairy" for sale of liquid pasteurized milk in West Bengal.

XXXXXX XXXXXX XXXXXX"

9. The plaintiffs also rely upon a letter - a copy of which is placed on record, at page 50 of

I.A. Nos. 280/2009, 8864/2009 & 8865/2009 in CS (OS) 41/2009 Page 3 the list of documents filed along with the suit, written by the Federation to them (the plaintiffs), on 10.03.2005. The relevant portion of that letter is as follows:

"XXXXXX XXXXXX XXXXXX After careful deliberations, the Management Committee of Mother Dairy Calcutta has given its consent to ensure that other than liquid pasteurized no product manufactured/related to Mother Dairy Calcutta shall exhibit Mother dairy Calcutta as trade mark or brand name. Subsequently while the revised labeling/printing on the packaging materials of Misthi Doi and Yoghurt has been changed and is expected to be finally put in operation by the end of the current month. we are also working in the similar line for the Packaged Drinking Water presently being manufactured by a private entrepreneur on franchise basis on behalf of Mother Dairy Calcutta. It is expected that this will also be taken care very soon.

You will be glad to know that in the meantime, we have also developed our common brand (Ben's) and its logo. Further, the test marketing of three milk products is scheduled on 28th March, 2005 in the new brand - Ben's. The formal launching of milk products in Ben's brand has been scheduled on 15th April 2005

- the auspicious Bengalee New Years' Day. Subsequently, it has also been planned to introduce another milk products in Ben's brand in April 2005 itself. All these products would be sourced from our Milk Unions with the Standard Operating Procedures and Quality Control developed by this Federation. It is hoped that in the current year we would be able to introduce a few more milk products in Ben's brand for which the R&D work is in progress.

XXXXXX XXXXXX XXXXXX"

10. Based upon the pleadings, documents and submissions, it is apparent that the following are undisputed facts:

(a) The plaintiffs coined the mark "MOTHER DAIRY" in 1974 and has been using it ever since, in relation to milk and allied milk products, including liquid pasteurized milk.

(b) The mark was registered at various points of time. The full description of the trademark registrations subsisting in the plaintiffs' favor is found at para 11 of the suit.

(c) The plaintiffs and the defendants had an arrangement whereby "MOTHER DAIRY" was used in respect of Federation's products in West Bengal for the period 1978 and 1996. Concededly, there was no such arrangement thereafter.

(d) The parties entered into an agreement on 20.09.2004 which specifically provided in clause-1 that the Federation could use "MOTHER DAIRY" for liquid pasteurized and processed milk marketed in West Bengal and that its (the Federation's) subsidiary would not use the market

I.A. Nos. 280/2009, 8864/2009 & 8865/2009 in CS (OS) 41/2009 Page 4 for sale of such product in West Bengal.

(e) The Federation had, on 10.03.2005, corresponded with the plaintiffs, disclosing that it was formally launching a brand "BENS" with effect from 15.04.2005.

11. The plaintiffs approached this Court, complaining that the Federation was violating the territorial restriction agreed to by the parties in clause-1 by distributing its products through first two defendants outside the State of West Bengal.

12. This Court had by its initial order appointed a Local Commissioner to visit the first two defendants' premises. The Commissioner's reports are on the record; they disclose that the Federation's products were marketed in Jharkhand.

13. To this Court's mind, the Federation's argument about the plaintiffs' acquiescence or being their estopped from claiming injunction is unfeasible. Firstly, there is no dispute that the plaintiffs had coined "MOTHER DAIRY" mark in 1974 and have been using it ever since. Secondly, the plaintiffs are proprietors of the registered trademark. The defendants are not contending to have applied for rectification or cancellation of the mark by recourse to other provisions of the Act. Thirdly, the defendants, at least the Federation acknowledged the plaintiffs' rights over the trademark, as is evident from the arrangement it entered into with the former for 18 years between 1978 to 1996. As to the precise reason why the parties did not have any arrangement for eight years from 1996 to 2004 need not detain this Court at this juncture because the subsequent arrangement, embodied in the agreement of 20.09.2004 clearly acknowledges the plaintiffs' exclusive rights in respect of the trademark and more significantly, confines the permissive use by the Federation to the State of West Bengal and prevents the latter's subsidiary from using the mark in respect any product. In this Court's opinion, these findings are sufficient to conclude that the plaintiffs were acknowledged by the defendants, at material and relevant times, as trademark owners of the "MOTHER DAIRY" mark in relation to liquid pasteurized milk and other allied products. Therefore, the rule in Ziff-Davis Inc. v. Dr. D.K. Jain and Ors. 1998 PTC 739 Del. would apply. The defendants' use of the mark or the use by the licensee or the permissive user would inure in plaintiffs' favor.

14. So far as the generic argument that milk food is descriptive is concerned and the reliance placed upon the previous order in the Gujarat Cooperative Milk Marketing Federation is concerned, a careful reading of that order would reveal that the Court had in fact acknowledged that if injunction were not granted, the plaintiffs, i.e. "MOTHER DAIRY", as in the present case,

I.A. Nos. 280/2009, 8864/2009 & 8865/2009 in CS (OS) 41/2009 Page 5 were bound to suffer irreparable loss to their established business reputation. The Court had also rejected the plea of delay and laches taken by the defendants in that case. If one sees these conclusions and juxtaposes them with the final order by which the Court had restrained the defendants from manufacturing, selling, offering for sale, advertising and supplying milk and milk products and there is no sale under the trade mark "MOTHER DAIRY" particularly in Delhi, it would be apparent that the latter part was not in any manner restrictive of the injunction made applicable. Likewise, in this case too, the Court is of opinion that being the proprietor of a registered trademark which has not been challenged through any known legal procedure, the defendants cannot contend that the plaintiffs are disentitled to interlocutory protection.

15. So far as the request for stay of proceedings is concerned, this Court is of the opinion that the same is not tenable. The decision cited by the defendants, no doubt, enables the Court to stay the proceedings. This Court is, however, of the view that each case has to be seen from the subjective facts presented before the Court. In this case, the defendants undeniably acknowledged the plaintiffs' rights, as far as back in 1978 and later entered into an agreement in 2004 for use of the mark. The materials on record reveal that the defendants have violated the territoriality agreed to by the parties in the said contract dated 20.09.2004. Having regard to these facts, the subsequent suit filed by the defendants is apparently an attempt to stall the present proceeding. Ends of justice, therefore, do not warrant any stay of the present suit.

16. In view of the above conclusions, this Court is of the opinion that the interim injunction granted on 12.01.2009 should be confirmed in its terms and bind the defendants till final decision in the suit. I.A. No. 280/2009 (Under Order 39 Rule 1 and 2) is allowed in the above terms. I.A. Nos. 8864/2009 (Under Order 39 Rule 4) and 8865/2009 (Under Section 151) are consequently dismissed.

CS (OS) 41/2009 List on 16.11.2010.

                                                                            S. RAVINDRA BHAT
       AUGUST        25, 2010                                                      (JUDGE)
       'ajk'




I.A. Nos. 280/2009, 8864/2009 & 8865/2009 in CS (OS) 41/2009                                 Page 6